DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant      Filed by a Party other than the Registrant

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Under Rule 14a-12

NEWELL BRANDS INC.

 

 

(Name of Registrant as Specified in its Charter)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

 

  (1)

Title of each class of securities to which transaction applies:

 

 

 

  (2)

Aggregate number of securities to which transaction applies:

 

 

 

  (3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

  (4)

Proposed maximum aggregate value of transaction:

 

 

 

  (5)

Total fee paid:

 

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

  (1)

Amount Previously Paid:

 

 

 

  (2)

Form, Schedule or Registration Statement No.:

 

 

 

  (3)

Filing party:

 

 

 

  (4)

Date Filed:

 

 


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LOGO                                                

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On May 5, 2021

To the Stockholders of NEWELL BRANDS INC.:

You are cordially invited to attend the annual meeting of stockholders of NEWELL BRANDS INC. (the “Company”) to be held on May 5, 2021, at 9:00 a.m., Eastern Daylight Time (the “Annual Meeting”). At this point, we anticipate that the ongoing public health impact of the coronavirus pandemic (COVID-19) and its social distancing requirements will continue over the next few months. To support the ongoing health and well-being of our stockholders, employees and their families, the Annual Meeting will be held in a virtual meeting format only, via live audio webcast. This is not our permanent preference and we expect to return to an in-person format as soon as it is safe to do so.

At the Annual Meeting, you will be asked to:

 

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Elect ten directors of the Company nominated by the Board of Directors;

 

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Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021;

 

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Vote on an advisory resolution to approve named executive officer compensation;

 

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Vote on a stockholder proposal described in the attached Proxy Statement, if properly presented at the meeting; and

 

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Transact such other business as may properly come before the Annual Meeting and any adjournment or postponement of the Annual Meeting.

Only stockholders of record at the close of business on March 9, 2021 may vote at the Annual Meeting or any adjournment or postponement thereof.

Whether or not you plan to attend the Annual Meeting, please act promptly to vote your shares with respect to the proposals described above. You may vote your shares by marking, signing and dating the enclosed proxy card and returning it in the postage-paid envelope provided. You also may vote your shares by telephone or through the Internet by following the instructions set forth on the proxy card. If you attend the Annual Meeting, you may vote your shares in person, even if you have previously submitted a proxy in writing, by telephone or through the Internet.


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We appreciate your continued confidence in our Company and look forward to having you join us at 9:00 a.m. on May 5, 2021.

 

By Order of the Board of Directors,

LOGO

 

Bradford R. Turner

Chief Legal and Administrative Officer and Corporate Secretary

March 25, 2021

ADDITIONAL INFORMATION ABOUT THE VIRTUAL ANNUAL MEETING

ATTENDANCE AND PARTICIPATION

Our 2021 Annual Meeting will be conducted on the Internet via live audio webcast. You will be able to participate online and submit your questions in advance of the Annual Meeting by visiting www.virtualshareholdermeeting.com/NWL2021, beginning at 8:45 a.m. EDT on May 5, 2021. Stockholders will be able to vote their shares electronically during the Annual Meeting.

To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or your voting instruction form. The Annual Meeting will begin promptly at 9:00 a.m. EDT. We encourage you to access the Annual Meeting prior to the start time. Online access will begin at 8:45 a.m. EDT. Guests may listen to a live audio webcast of the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/NWL2021 but are not entitled to participate.

The virtual Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell smartphones) 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.

We will make available an electronic list of stockholders of record as of the record date for inspection by stockholders for any purpose germane to the meeting from April 24 through May 4, 2021. To access the electronic list during this time, please send your request, along with proof of ownership, by email to investor.relations@newellco.com. You will receive confirmation of your request and instructions on how to view the electronic list. The list will also be available to stockholders during the live audio webcast of the Annual Meeting through a link to be made available at www.virtualshareholdermeeting.com/NWL2021.

QUESTIONS

Questions submitted by stockholders will be answered at the conclusion of the Annual Meeting. Stockholders may submit questions for the Annual Meeting after logging in, beginning at 8:45 a.m. EDT on May 5, 2020. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/NWL2021, clicking Q&A, then typing your question into the “Submit a Question” field and clicking “Submit.” Please submit any questions before the start time of the meeting.

We intend to answer questions pertinent to Company matters as time allows during the meeting. Questions that are substantially similar may be grouped and answered once to avoid repetition. To the extent, we are


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not able to answer all questions during the time allotted for the Annual Meeting, we will publish answers to unanswered questions that were not duplicative and/or inappropriate on our IR website.

Additional information regarding the ability of stockholders to ask questions at the Annual Meeting, related rules of conduct and other materials for the Annual Meeting, including the list of our stockholders of record, will be available at www.virtualshareholdermeeting.com/NWL2021.

TECHNICAL DIFFICULTIES

Technical support, including related technical support phone numbers, will be available on the virtual meeting platform at www.virtualshareholdermeeting.com/NWL2021 beginning at 8:45 a.m. EDT on May 5, 2020 through the conclusion of the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 5, 2020

The Company’s Proxy Statement and 2020 Annual Report to Stockholders are available at

WWW.PROXYVOTE.COM


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Section

   Page  
          

Ø   Questions and Answers About Voting at the Annual Meeting and Related Matters

     1  

Ø   Proxy Statement Summary

     8  

Ø   Proposal 1 – Election of Directors

     12  

Ø   Information Regarding Board of Directors and Committees and Corporate Governance

     18  

Ø   Certain Relationships and Related Transactions

     27  

Ø   Compensation Committee Interlocks and Insider Participation

     29  

Ø   Organizational Development & Compensation Committee Report

     30  

Ø   Executive Compensation

     31  

Ø   Equity Compensation Plan Information

     89  

Ø   Certain Beneficial Owners

     92  

Ø   Audit Committee Report

     95  

Ø   Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm

     96  

Ø   Proposal 3 – Advisory Resolution to Approve Named Executive Officer Compensation

     97  

Ø   Proposal 4 – Vote on Stockholder Proposal to Amend the Stockholder Right to Act by Written Consent

     98  

Ø   Other Business

     101  

Ø   Appendix A – Non-GAAP Financial Measures

     A-1  
          


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NEWELL BRANDS INC.

6655 Peachtree Dunwoody Road, Atlanta, Georgia 30328

 

 

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 5, 2021

You are receiving this Proxy Statement (the “Proxy Statement”) and proxy card in connection with the 2021 annual meeting of stockholders (the “Annual Meeting”) of Newell Brands Inc. (“Newell” or the “Company”) to be held in a virtual meeting format, at 9:00 a.m., Eastern Time, on May 5, 20211.

Proxy materials or a Notice of Internet Availability of Proxy Materials (the “Notice”) are being first released or mailed to stockholders on or about March 26, 2021. In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), the Company may furnish proxy materials by providing Internet access to those documents, instead of mailing a printed copy of the Company’s proxy materials to each stockholder of record. The Notice contains instructions on how to access our proxy materials and vote online, or alternatively, request a paper copy of the proxy materials and a proxy card.

QUESTIONS AND ANSWERS ABOUT

VOTING AT THE ANNUAL MEETING AND RELATED MATTERS

Who is entitled to vote at the Annual Meeting?

Record holders of the Company’s common stock at the close of business on March 9, 2021 are entitled to notice of and to vote at the Annual Meeting. On the record date, approximately 425,331,082 shares of common stock were issued and eligible to vote.

What constitutes a quorum for the Annual Meeting?

A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of the outstanding shares of common stock of the Company, present in person or by proxy, will constitute a quorum.

Who will count the votes?

Representatives from Broadridge Financial Solutions, Inc. (“Broadridge”) will tabulate the votes and act as an independent inspector of election for the Annual Meeting.

As the independent inspector of election, Broadridge will determine whether a quorum is present at the Annual Meeting. Broadridge will treat instructions to withhold authority, abstentions and broker non-votes as present for purposes of determining the presence of a quorum. In the event that a quorum is not present at the Annual Meeting, the Company expects that the Annual Meeting will be adjourned to solicit additional proxies.

How are votes counted?

You are entitled to one vote for each share you own on the record date on the election of directors and each proposal to be considered at the Annual Meeting. If your common stock is held in “street name”

 

1 As part of our precautions regarding the coronavirus or COVID-19, the Annual Meeting will be held by means of remote communication.

 

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(i.e., in the name of a bank, broker or other record holder), you will need to instruct your broker or bank regarding how to vote your common stock. Pursuant to Nasdaq Global Select Market (“Nasdaq”) rules, your broker or bank does not have discretion to vote your common stock without your instructions regarding the election of directors, the advisory vote on named executive officer compensation and the stockholder proposal. For the approval of named executive officer compensation and the stockholder proposal, if you do not provide your broker or bank with voting instructions, your shares of common stock will not be considered entitled to vote at the Annual Meeting for purposes of these proposals (this is also known as “broker non-votes”). However, please note that banks and brokers that have not received voting instructions from their clients may vote their clients’ shares on the ratification of the appointment of PricewaterhouseCoopers LLP.

How many votes are required to elect a director or approve a proposal?

 

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Election of Directors. Directors receiving a majority of votes cast with respect to that director’s election (number of shares voted “for” a director must exceed the number of votes cast “against” that director) will be elected as a director. Shares not present, shares not voting and shares voting “abstain” will have no effect on the election of directors.

 

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Ratification of the Appointment of PricewaterhouseCoopers LLP, Approval of Named Executive Officer Compensation, the Stockholder Proposal and Approval of Any Other Proposals. The vote required for the ratification of the appointment of PricewaterhouseCoopers LLP, the approval of named executive officer compensation in the advisory vote, the stockholder proposal and the approval of any other proposal that may properly come before the Annual Meeting or any adjournment or postponement of the meeting is the affirmative vote of a majority of the shares of common stock present in person or by proxy and entitled to vote at the Annual Meeting. With respect to the proposal, you may vote in favor of or against the item or you may abstain from voting. Any proxy marked “abstain” with respect to the proposal will have the effect of a vote against the proposal. Broker non-votes will have no effect on the approval of named executive officer compensation and the stockholder proposal and shares not present will have no effect on any of these proposals.

Why is the Company holding a virtual Annual Meeting? How can I attend?

In light of the ongoing COVID-19 pandemic, the Board of Directors, after careful consideration, has decided that the 2021 Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively online via a live audio-only webcast, in order to protect the health and safety of our stockholders and employees. There will be no physical location for the Annual Meeting.

The Annual Meeting will be conducted virtually via a webcast available at www.virtualshareholdermeeting.com/NWL2021. You are entitled to participate in the annual meeting via the webcast if you were a stockholder as of the close of business on March 9, 2021, the record date, or hold a valid proxy for the meeting. To be admitted to the annual meeting at www.virtualshareholdermeeting.com/NWL2021, you must enter the 16-digit control number found next to the label “Control Number” for postal mail recipients or within the body of the email sending you the Proxy Statement. If you do not have your 16-digit control number, you will be able to login as a guest but will not be able to vote your shares or submit questions during the meeting.

 

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How can I ask questions pertinent to annual meeting matters?

The stockholders’ question and answer session will include questions submitted in advance of, and questions submitted live during, the 2021 Annual Meeting. Questions may be submitted during the 2021 Annual Meeting through www.virtualshareholdermeeting.com/NWL2021. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/NWL2021, clicking Q&A, then typing your question into the “Submit a Question” field and clicking “Submit.” Please submit any questions before the start time of the meeting.

You are entitled to participate in the Annual Meeting only if you were a stockholder as of the close of business on the record date, or if you hold a valid proxy for the annual meeting. The virtual Annual Meeting has been designed to provide substantially the same rights to participate as you would have at an in-person meeting.

The online meeting will begin promptly at 9:00 a.m., Eastern Time. We encourage you to access the meeting prior to the start time to provide ample time for logging in. Rules of conduct for the annual meeting will be posted on the annual meeting website at www.virtualshareholdermeeting.com/NWL2021.

What if I have trouble accessing the annual meeting virtually?

If you have difficulties logging into the annual meeting virtually, once the meeting is opened at 8:45 a.m., you can utilize the technical resources available on the log-in webpage for the virtual annual meeting. If you should need technical assistance, a toll-free telephone number will be available on that page on the day of the annual meeting on the log-in webpage: www.virtualshareholdermeeting.com/NWL2021.

If there are any technical issues in convening or hosting the annual meeting, we will promptly post information to our Investor Relations website, https://ir.newellbrands.com/, including information on when the meeting will be reconvened.

How do I vote my shares?

You may attend the virtual Annual Meeting and vote your shares online at that time. You also may choose to submit your proxies by any of the following methods:

 

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Voting by Mail. All stockholders of record can vote by written proxy card. If you are a stockholder of record and receive a Notice, you may request a written proxy card by following the instructions included in the Notice. Your shares will be voted in accordance with the instructions on your proxy card. If you sign your proxy card and return it without marking any voting instructions, your shares will be voted FOR the election of all director nominees recommended by the Board, FOR the ratification of the appointment of PricewaterhouseCoopers LLP, FOR the advisory resolution to approve named executive officer compensation, AGAINST the stockholder proposal to amend the written consent right, and in the discretion of the persons named as proxies on all other matters that may properly come before the Annual Meeting or any adjournment or postponement of the meeting.

 

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Voting by Internet. You also may vote through the Internet by signing on to the website identified on the Notice and following the procedures described on the website. Internet voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the Notice. The procedures permit you to give a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by Internet, you should not return a proxy card.

 

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Voting by Telephone. You may vote your shares by telephone by calling the toll-free telephone number provided on the proxy card, which can be viewed online by following the instructions in the Notice or you may request a written proxy card by following the instructions included in the Notice. Telephone voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the Notice. The procedures permit you to give a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by telephone, you should not return a proxy card.

If you are a stockholder whose shares are held in “street name,” you must either direct the record holder of your shares how to vote your shares or obtain a proxy, executed in your favor, from the record holder to be able to vote at the Annual Meeting.

This Proxy Statement is also being used to solicit voting instructions for the shares of the Company’s common stock held by the trustee of the Newell Brands Employee Savings Plan for the benefit of plan participants. Participants in this plan have the right to direct the trustee regarding how to vote the shares of Company stock credited to their accounts. Unless otherwise required by law, the shares credited to each participant’s account will be voted as directed. Participants in this plan may direct the trustee by telephone, through the Internet or by requesting, completing and returning a voting card. If valid instructions are not received from a Newell Brands Employee Savings Plan participant by 11:59 p.m. Eastern Daylight Time on April 30, 2021, a participant’s shares will be voted proportionately by the trustee in the same manner in which the trustee votes all shares for which it has received valid instructions.

How may I revoke or change my vote?

You may revoke your proxy at any time before it is voted at the Annual Meeting by any of the following methods:

 

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Submitting a later-dated proxy by mail.

 

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Mailing a written notice to the Corporate Secretary of the Company. You must send any written notice of a revocation of a proxy so that it is received before the taking of the vote at the Annual Meeting to:

Newell Brands Inc.

6655 Peachtree Dunwoody Road

Atlanta, GA 30328

Attention: Corporate Secretary

 

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Attending the virtual Annual Meeting and voting online. Your attendance at the Annual Meeting will not in and of itself revoke your proxy. You must also vote your shares at the Annual Meeting. If your shares are held in “street name” by a bank, broker or other record holder, you must obtain a proxy, executed in your favor, from the record holder to be able to vote at the Annual Meeting.

 

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If you require assistance in changing or revoking your proxy, please contact the Company’s proxy solicitor:

Morrow Sodali LLC

470 West Avenue

3rd Floor

Stamford, CT 06902

Phone Number: 1-800-662-5200

Email: NWL.info@investor.morrowsodali.com

Who will pay the costs of solicitation of proxies?

The Company will pay the costs of soliciting proxies.

Who is the Company’s proxy solicitor?

The Company has retained Morrow Sodali LLC to aid in the solicitation of proxies and to verify certain records related to the solicitation.

The Company will pay Morrow Sodali LLC a fee of approximately $11,500 as compensation for its services and will reimburse it for its reasonable out-of-pocket expenses.

In addition to solicitation by mail, directors, officers and employees of the Company, at no additional compensation, may solicit proxies from stockholders by telephone, facsimile, Internet or in person. Upon request, the Company will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in sending the proxy materials to beneficial owners.

How will my shares be voted?

If you vote by mail, through the Internet, by telephone or in person, your shares of common stock will be voted as you direct.

If you sign and return your proxy card, but do not specify how your shares of common stock are to be voted, your shares of common stock will be voted as recommended by the Board.

We recommend that you vote on your proxy card as follows:

 

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FOR” all of the director nominees listed under the caption “PROPOSAL 1—ELECTION OF DIRECTORS” beginning on page 12;

 

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FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021, as described under the caption “PROPOSAL 2—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM” beginning on page 96;

 

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FOR” the approval of the advisory resolution on named executive officer compensation, as described under the caption “PROPOSAL 3—ADVISORY RESOLUTION TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION” beginning on page 97; and

 

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AGAINST” the stockholder proposal, as described under the caption “PROPOSAL 4–STOCKHOLDER PROPOSAL TO AMEND THE STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT beginning on page 98.

How do I submit a stockholder proposal for the 2022 annual meeting?

To be considered for inclusion in next year’s proxy materials, stockholder proposals to be presented at the Company’s 2022 annual meeting of stockholders must be in writing and be received by the Company no later than November 26, 2021. At the 2022 annual meeting, the Company’s management will be able to vote proxies in its discretion on any proposal not included in the Company’s Proxy Statement for such meeting if the Company does not receive notice of the proposal on or before February 4, 2022.

If a stockholder does not submit a proposal for inclusion in next year’s proxy statement, but instead wishes to present it directly at the 2022 annual meeting, the Company’s By-Laws require that the stockholder notify the Company of such proposal in writing no later than 90 days prior to the anniversary date of the Annual Meeting, or February 4, 2022. The stockholder must also comply with the requirements of Section 2.12 of the Company’s By-Laws with respect to stockholder proposals.

How do I nominate a candidate for election as a director at the 2022 annual meeting?

Any stockholder wishing to nominate a candidate for election as a director at the Company’s Annual Meeting must notify the Company in writing no later than February 4, 2022. Such notice must include appropriate biographical information and otherwise comply with the requirements of the Company’s Restated Certificate of Incorporation and By-Laws relating to stockholder nominations of directors. In addition, our By-Laws allow qualifying stockholders to include their director nominees in the Company’s proxy materials by giving notice in writing no earlier than January 5, 2022 and no later than February 4, 2022. Such notice of a proxy access nomination must set forth certain information specified in the proxy access By-Law about each stockholder submitting a nomination and each person being nominated as a candidate for election as a director.

How do I provide a notice of my intention to present proposals and director nominations at the 2022 annual meeting?

Notices of intention to present proposals and director nominations at the 2022 annual meeting or requests in connection therewith, including requests for copies of the relevant provisions of the Company’s Restated Certificate of Incorporation or By-Laws relating to proposals and director nominations, should be addressed to Newell Brands Inc., 6655 Peachtree Dunwoody Road, Atlanta, GA 30328, Attention: Corporate Secretary.

How can I obtain a copy of the Company’s 2020 annual report on Form 10-K?

A copy of the Company’s 2020 annual report on Form 10-K (including the financial statements and financial statement schedules), as filed with the SEC, may be obtained without charge upon written request to the office of the Corporate Secretary of the Company at 6655 Peachtree Dunwoody Road, Atlanta, GA 30328. A copy of the Company’s Form 10-K and other periodic filings also may be obtained under the “SEC Filings” link under the “Investors” tab on the Company’s website at www.newellbrands.com and from the SEC’s EDGAR database at www.sec.gov. The information contained on, or accessible from, the Company’s website is not incorporated by reference into this proxy statement or any other report or document the Company files with or furnishes to the SEC, and references to the Company’s website are intended to be inactive textual references only.

 

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What is householding?

As permitted by the Securities Exchange Act of 1934 (“Exchange Act”), only one copy of the Notice, proxy materials or 2020 Annual Report is being delivered to stockholders residing at the same address, unless the stockholders have notified the Company of their desire to receive multiple copies of the Notice, proxy materials or 2020 Annual Report. This is known as “householding.”

The Company will promptly deliver, upon oral or written request, a separate copy of the Notice, proxy materials or 2020 Annual Report to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Newell Brands Inc., 6655 Peachtree Dunwoody Road, Atlanta, GA 30328, Attention: Corporate Secretary. Stockholders of record residing at the same address and currently receiving multiple copies of the Notice, proxy materials or 2020 Annual Report may contact our transfer agent, Computershare Investor Services, to request that only a single copy of the Notice or proxy materials be mailed in the future.

Contact Computershare by phone at (877) 233-3006 or (312) 360-5217 or by mail at P.O. Box 505000, Louisville, KY 40233-5000. Stockholders may also contact their bank, broker or other nominee to make a similar request.

Could other business be conducted at the Annual Meeting?

The Board does not know of any business to be brought before the Annual Meeting other than the matters described in the Notice of Annual Meeting. However, if any other matters properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting, each person named in the accompanying proxy intends to vote the proxy in accordance with his judgment on such matters.

 

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PROXY STATEMENT SUMMARY

We are providing this Proxy Statement to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Newell for the 2021 Annual Meeting and for any adjournment or postponement of the Annual Meeting. Below are highlights of certain information in this Proxy Statement. As it is only a summary, please review our complete Proxy Statement and 2020 Annual Report before you vote.

This Proxy Statement is intended to be made available to you on or about March 26, 2021.

2021 ANNUAL MEETING OF STOCKHOLDERS

 

 

 

 

 

LOGO

 

 

 

LOGO

 

 

 

 

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CORPORATE GOVERNANCE HIGHLIGHTS

 

 

LOGO

2021 BOARD COMPOSITION SNAPSHOT

The graphics below reflect the diversity and tenure of the directors standing for election at the Annual Meeting.

 

 

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STOCKHOLDER ENGAGEMENT

We value the views of our stockholders and we believe that building positive relationships with our stockholders is critical to our long- term success. To help Company management and the Board understand and consider the issues that matter most to our stockholders, we periodically engage with our stockholders on a range of topics related to corporate governance, executive compensation and sustainability. We then incorporate this feedback into our disclosures, corporate governance policies and executive compensation program.

At the 2020 Annual Meeting of Stockholders, the advisory resolution to approve the compensation of the Company’s named executive officers (“Say on Pay Proposal”) was approved by approximately 92% of votes cast, including abstentions. The Organizational Development & Compensation Committee considered this level of approval to indicate the support of a substantial majority of the Company’s stockholders. It also represented a 24% increase in the votes cast, including abstentions, in support of the Say on Pay Proposal versus the prior year.

In 2020, the Board addressed a 2019 shareholder proposal requesting public reporting on diversity in the executive leadership team and the Company’s plans to increase diversity. In our Corporate Social Responsibility Report published in April 2020, we disclosed our current workforce demographics in terms of

 

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women and people of color across the leadership, professional and general employee base. We also discussed our goals to improve diversity in leadership and management roles and ongoing initiatives to enhance inclusivity of underrepresented employees.

The Company has also adopted a hiring policy for U.S. leadership roles that requires the inclusion of diverse slates consisting of at least two candidates who are (i) women and/or (ii) candidates of color (e.g. identifying as other than white/Caucasian) and/or (iii) openly LGBTQ. Pursuant to this policy, the Company will apply the same policy to filling vacancies on the Board of Directors as well, should the opportunity arise. The Company also plans to publicly share its quantitative goals for diversity on the Executive Leadership Team and among direct reports of the Business Unit CEOs and functional heads in its upcoming 2020 Corporate Citizenship Report. In the near future, the Company plans to begin including its EEO-1 survey data on its corporate website.

During Spring and Fall 2020, we conducted outreach with the Company’s top institutional investors representing approximately 55% of our shares outstanding to get feedback on and to discuss executive compensation, corporate governance and sustainability matters. The conversations with and feedback from our stockholders have been considered by management and where applicable, incorporated in our disclosures.

 

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COMPENSATION HIGHLIGHTS

(See page 31 for our Compensation Discussion and Analysis (“CD&A”) under the section titled “Executive Compensation”)

 

 

 

 

2020 was a year in which the Company continued executing its Turnaround Plan amidst

significant uncertainty caused by the emergence of the Coronavirus pandemic (“COVID-19”).

Ø    The Company hired several new Business Unit CEOs and a Chief Customer Officer and promoted Mr. Peterson to President, Business Operations in addition to his role as Chief Financial Officer.

Ø    The Company continued executing a Turnaround Plan focused on improved cash generation, paying down debt, reducing complexity, enhancing its digital strategy, strengthening the portfolio and building a strong management team and winning culture.

Ø    Appliances & Cookware Business Unit CEO, David Hammer, left the Company in September 2020.

 

 

 

 

 

 

 

The Company Emphasizes Pay for Performance.

Ø    Approximately 84% of the CEO’s annualized total target direct compensation was performance-based, inclusive of stock options, and 77% of the annual total target direct compensation for 2020 of the other named executive officers (on average and excluding Mr. Hammer) was performance based.

Ø    Based on achievement against adjusted earnings per share, annual core sales growth and adjusted operating cash flow targets as well as operational efficiency targets, the Management Bonus Plan for 2020 paid out at 115% for Messrs. Saligram, Peterson and Turner, 106% for Ms. Hurd, and 125% for Ms. Malkoski and Mr. Hammer.

Ø    In 2020, 100% of named executive officer annual equity awards were performance-based with a mix of 70% performance-based RSUs and 30% stock options.

Ø    Performance-based restricted stock units granted to applicable named executive officers in 2018 paid out at 57% upon the conclusion of their vesting period in February 2021.

 

 

 

 

 

 

 

The Company Continued to Encourage Stockholder Alignment and Long-Term Performance.

Ø    In response to shareholder feedback, the Company moved to core sales growth and free cash flow as the metrics for the performance-based awards under the Company’s Long-Term Incentive Plan (the “LTIP”) in 2020, with relative TSR as a performance modifier.

Ø    The Company maintains stock ownership and shareholding guidelines for its executive officers and non-employee directors to encourage alignment.

 

 

 

 

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PROPOSAL 1—ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

The Board has selected the following ten nominees for election to the Board. The nominees will hold office from their election until the next annual meeting of stockholders, or until their successors are elected and qualified.

Steven J. Strobel will not stand for election at the Annual Meeting as he has decided to retire from his position as Director of the Company effective as of the Annual Meeting. The Board wishes to thank Mr. Strobel for his distinguished service over the past 15 years, including his service as Chair of the Audit Committee. Upon his retirement, the size of the Board will be reduced to ten members.

Proxies will be voted, unless otherwise indicated, FOR the election of all of the ten nominees for director. Each of the nominees identified in this Proxy Statement has consented to being named as a nominee in the Company’s proxy materials and has accepted the nomination and agreed to serve as a director if elected by the Company’s stockholders. The Company has no reason to believe that any of the nominees will be unable to serve as a director. However, should any nominee be unable to serve if elected, the Board may reduce the number of directors, or proxies may be voted for another person nominated as a substitute by the Board.

The Board unanimously recommends that you vote FOR the election of each nominee for director.

 

 

 

 

Director Since

 

Age

 

 2018  

 

    60  

 

 

Bridget Ryan Berman has served as the Managing Partner of Ryan Berman Advisory, LLC, a consumer and investment advisory firm, since January 2018. From 2016 to 2018, Ms. Ryan Berman worked as the Chief Experience and Strategy Officer at ENJOY Technology, Inc., a provider of personal delivery, set-up and training for consumer technology products. During 2016, Ms. Ryan Berman served as a Management Consultant at Google Inc., a multinational technology company and subsidiary of Alphabet Inc. From 2011 to 2016, Ms. Ryan Berman served as Chief Executive Officer of Victoria’s Secret Direct, LLC. Previously, Ms. Ryan Berman served as a Management Consultant for various retail brands, consulting on business strategy, merchandising, marketing and organizational development from 2008 to 2011; as the Chief Executive Officer of the Giorgio Armani Corporation, a U.S. subsidiary of Giorgio Armani S.p.A. from 2006 to 2007; and as Vice President and Chief Operating Officer of Retail Stores for Apple Computer, Inc. from 2004 to 2005. Ms. Ryan Berman also served in a variety of positions, including Group President, Global Retail, at Polo Ralph Lauren Corporation from 1992 to 2004. Ms. Ryan Berman currently serves as a member of the Board of Directors of Tanger Factory Outlet Centers, Inc., Asbury Automotive Group, Inc., and Tegra Global. Ms. Ryan Berman is a former member of the Board of Directors of J. Crew Group, Inc. and BH Cosmetics, Inc. Ms. Ryan Berman is a seasoned brand and e-commerce executive with over 35 years of experience in retail, and as a senior level executive has helped oversee the strategies and operations of some of the leading brands in the world.

 

 

 

 

 

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Director Since

Age

 

 2018  

    68  

 

 

Patrick D. Campbell has been the independent non-executive Chairperson of the Board since March 2018. Mr. Campbell retired in 2011 as Senior Vice President and Chief Financial Officer of 3M Company, a post he held from 2002 to 2011. Prior thereto, he served as Vice President of International and Europe for General Motors Corporation, where he served in various finance functions during his 25 years with the company. Mr. Campbell currently serves as a member of the Board of Directors of Stanley Black & Decker, Inc., SPX FLOW, Inc., and Herc Holdings Inc., where he serves as the non-executive Chairman of the Board. Mr. Campbell is a former member of the Board of Directors of SPX Corporation and Solera Holdings, Inc. Mr. Campbell was nominated to the Board in 2018 and serves as Chairperson pursuant to the Director Appointment and Nomination Agreement (the “Nomination Agreement”) entered into with Mr. Carl C. Icahn described under “Certain Relationships and Related Transactions.” Mr. Campbell’s knowledge of financial and accounting matters, company capitalization structures and capital markets gained through his tenures at General Motors and 3M Company provide him with insight into a variety of issues applicable to the Company. In addition, he was also responsible for mergers and acquisitions as well as information technology in his role at 3M Company, and provides significant expertise in each of those areas.

 

 

 

 

 

 

 

 

Director Since

Age

 

 2018  

    67  

 

 

James R. Craigie is the retired Chief Executive Officer of Church & Dwight Co., Inc. (“Church & Dwight”), a household products manufacturing company. He served as non-executive Chairman of Church & Dwight, from 2016 to May 2019. Mr. Craigie served in a variety of senior roles with Church & Dwight, including Chairman and Chief Executive Officer from 2007 to 2016 and President and Chief Executive Officer from 2004 through 2007. From 1998 through 2003, Mr. Craigie was President and Chief Executive Officer and a member of the board of directors of Spalding Sports Worldwide, and its successor, Top-Flite Golf Co. From 1983 to 1998, Mr. Craigie held various senior management positions with Kraft Foods Inc. Prior to entering private industry, he served for six years as an officer in the U.S. Navy. Mr. Craigie currently serves as a member of the Board of Directors of Church & Dwight, and Bloomin’ Brands, Inc., where he serves as non-executive Chairman. He also serves as a member of the New York Regional Board of UNICEF. Mr. Craigie also currently serves as an investor and Advisory Board member to Cove Hill Partners, a private equity firm. Mr. Craigie is a former member of the Board of Directors of Meredith Corporation, TerraVia Holdings Inc. (previously called Solazyme, Inc.), World Kitchens LLC, and Nielsen Media Research, Inc. Mr. Craigie is a recognized leader in consumer brands with deep brand building experience and a long track record of value creation during his tenure as Chief Executive Officer of Church & Dwight.

 

 

 

 

 

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Director Since

Age

 

 2018  

    41  

 

 

Brett M. Icahn has been a Portfolio Manager and member of the Board of Directors of Icahn Capital LP, a subsidiary of Icahn Enterprises L.P. (“IELP”), a diversified holding company engaged in a variety of businesses, including investment, automotive, energy, food packaging, metals, mining, real estate and home fashion, since October 2020. Previously, he served as a consultant for IELP where he exclusively provided investment advice to Mr. Carl C. Icahn with respect to the investment strategy for Icahn Enterprises’ Investment segment and with respect to capital allocation across Icahn Enterprises’ various operating subsidiaries from 2017 to 2020. From 2010 to 2017, Mr. Brett Icahn served as a Portfolio Manager of the Sargon Portfolio for Icahn Capital LP, the entity through which Mr. Carl C. Icahn manages investment funds. From 2002 to 2010, Mr. Brett Icahn served as an investment analyst for Icahn Capital LP and in a variety of investment advisory roles for Mr. Carl C. Icahn. Mr. Brett Icahn currently serves on the Board of Directors of Bausch Health Companies, Inc. and is a former member of the Board of Directors of Nuance Communications, Inc., American Railcar Industries, Inc., Cadus Corporation, Take-Two Interactive Software Inc., The Hain Celestial Group, Inc. and Voltari Corporation. Mr. Carl C. Icahn has or previously had non-controlling interests in Bausch Health, Nuance, Hain Celestial and Take-Two through the ownership of securities. Mr. Brett Icahn was nominated to the Board in 2018 in connection with the Nomination Agreement entered into with Mr. Carl C. Icahn described under “Certain Relationships and Related Transactions.” Mr. Brett Icahn’s experience at the Icahn entities, his multiple public company directorships and his tenure as a Portfolio Manager provide the Board with expertise in investing and capital allocation.

 

 

 

 

 

 

 

 

Director Since

Age

 

 2020  

    44  

 

 

Jay L. Johnson has served as the Chief Financial Officer, Executive Vice President and Treasurer of Lamar Advertising Company, a leading outdoor advertising company, since October 2019. Prior to joining Lamar Advertising Company, Mr. Johnson served as Executive Vice President and Chief Financial Officer of DiamondRock Hospitality Company, a self-advised real estate investment trust with a portfolio of hotels and resorts, from March 2018 until August 2019, and as Senior Vice President and Treasurer of Host Hotels & Resorts, Inc. (“HHRI”), a major lodging real estate investment trust and owner of luxury hotels, from July 2015 to March 2018. Prior to his role as Senior Vice President and Treasurer of HHRI, Mr. Johnson served from 2010 through 2015 in various roles within HHRI’s corporate finance and treasury group. Prior to joining HHRI, Mr. Johnson served in various positions at KeyBank Real Estate Capital and at Bank of America. Prior to those roles in banking, he worked with the management consulting practice of Deloitte & Touche LLP and in the investment banking group at Prudential Securities. Mr. Johnson brings a comprehensive set of experiences from the advertising, real estate and financial services sectors along with investment acumen and financial expertise to the Board.

 

 

 

 

 

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Director Since

Age

 

 2018  

    61  

 

 

Gerardo I. Lopez currently serves as Operating Partner and the Head of Operating Group at Softbank Investment Advisers, Inc., the U.S. registered investment adviser subsidiary of the Japanese multinational SoftBank Group Corp., where he has worked since December 2018. Previously, he served as Operating Partner at High Bluff Capital, a private investment firm focused on consumer facing companies. Prior to High Bluff Capital, Mr. Lopez was President and Chief Executive Officer of Extended Stay America, Inc. and ESH Hospitality, Inc., the largest integrated owner/operator of company-branded hotels in North America, a post he held from 2015 to 2017. From 2009 to 2015, Mr. Lopez was the President and Chief Executive Officer of AMC Entertainment Holdings, Inc. (“AMC”). Prior to joining AMC, he served as Executive Vice President of Starbucks Corporation, where he also served as President of its Global Consumer Products, Seattle’s Best Coffee and Foodservice divisions, from 2004 to 2009. From 2001 to 2004, Mr. Lopez served as President of the Handleman Entertainment Resources division of Handleman Company. Mr. Lopez currently serves as a member of the Board of Directors of CBRE Group, Inc., and Realty Income Corp. Mr. Lopez is a former member of the Board of Directors of Brinker International, Inc., TXU Corp. (n/k/a Energy Future Holdings Corp.), National CineMedia, Inc., Extended Stay America, Inc., ESH Hospitality, Inc., REI, Inc., AMC, and Safeco Insurance. Mr. Lopez is an executive with over three decades of experience in consumer- focused industries. In addition, he has overseen a variety of corporate transformations and brings significant expertise in that area.

 

 

 

 

 

 

 

 

Director Since

Age

 

 2018  

    44  

 

 

Courtney R. Mather served as Portfolio Manager of Icahn Capital, the entity through which Mr. Carl C. Icahn manages investment funds, from December 2016 to March 2020, and was previously Managing Director of Icahn Capital from April 2014 to November 2016. Prior to joining Icahn Capital, Mr. Mather served in investment roles of increasing responsibility at Goldman Sachs & Co. from 1998 to 2012, most recently as Managing Director responsible for Private Distressed Trading and Investing. Mr. Mather currently serves on the Board of Directors of Caesar’s Entertainment Corporation. Mr. Mather is a former member of the Board of Directors of American Railcar Industries, Inc., Cheniere Energy Inc., Conduent Inc., CVR Refining, LP, CVR Energy, Inc., Federal-Mogul Holdings Corporation, Ferrous Resources Ltd., Freeport-McMoRan Inc., Herc Holdings Inc., and Viskase Companies Inc. American Railcar Industries, Inc., CVR Refining, LP, CVR Energy, Inc., Ferrous Resources Ltd., Federal-Mogul Holdings Corporation, and Viskase Companies Inc. are each indirectly controlled by Mr. Carl C. Icahn. Mr. Carl C. Icahn also has a non-controlling interest in Cheniere Energy Inc., Conduent Inc. and Herc Holdings, Inc., through the ownership of securities. Mr. Mather holds the Chartered Alternative Investment Analyst, Chartered Financial Analyst, and Certified Financial Risk Manager professional designations. Mr. Mather was nominated to the Board in 2018 in connection with the Nomination Agreement entered into with Mr. Carl C. Icahn described under “Certain Relationships and Related Transactions.” Through his tenure at Icahn Capital and Goldman Sachs & Co., Mr. Mather gained detailed knowledge of accounting and financial analysis, corporate strategy, risk governance, company capitalization structures and the capital markets. Additionally, Mr. Mather’s experience on public company boards in a variety of industries provides him with a broad understanding of the responsibilities of public company boards, governance matters and public relations issues applicable to public companies.

 

 

 

 

 

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Director Since

Age

 

 2019  

    64  

 

 

Ravichandra K. Saligram has served as President and Chief Executive Officer of the Company and as a member of the Company’s Board of Directors since October 2019. Prior to joining the Company, Mr. Saligram was Chief Executive Officer and Director of Ritchie Bros. Auctioneers Incorporated, the world’s largest onsite/online industrial equipment auctioneer, from July 2014 until July 2019. From November 2010 until November 2013, Mr. Saligram was Chief Executive Officer, President, and a member of the Board of Directors of OfficeMax Inc., where he oversaw the historic 2013 merger of OfficeMax and Office Depot. From 2003 through November 2010, Mr. Saligram served in executive management positions with ARAMARK, including as President of ARAMARK International, Chief Globalization Officer and Executive Vice President of ARAMARK. From 1994 through 2002, Mr. Saligram served in various capacities for the InterContinental Hotels Group, including as President of Brands and Franchise for North America; Chief Marketing Officer and Managing Director, Global Strategy; President, International; and President, Asia Pacific. Earlier in his career, Mr. Saligram held various general and brand management roles globally at S.C. Johnson & Son, Inc. Mr. Saligram began his career at Leo Burnett. He has served on the Board of Directors of Church & Dwight since 2006. Mr. Saligram brings to the Board an extensive background in consumer brands, omnichannel commerce and global operations as well as experience leading corporate transformations and building innovative and diverse employee cultures. He also brings an important perspective to the Board as the President and Chief Executive Officer of the Company.

 

 

 

 

 

 

 

 

Director Since

Age

 

 2018  

    67  

 

 

Judith A. Sprieser served as the Managing Director of Warrenton Advisors LLC, a strategic planning, corporate governance and business financing advisory firm from 2005 to 2019. Previously, Ms. Sprieser served as the founder, President and Chief Executive Officer of Transora, Inc. from 2000 to 2005. From 1987 to 2000, Ms. Sprieser held various positions at Sara Lee Corporation, including Executive Vice President and Chief Executive Officer of Sara Lee’s Food Group from 1999 to 2000 and Executive Vice President and Chief Financial Officer from 1995 to 1999. Ms. Sprieser serves on the Board of Directors of Allstate Insurance Company, where she serves as Lead Director, and Intercontinental Exchange, Inc., where she chairs the Audit Committee. Ms. Sprieser is also a member of the National Association of Corporate Directors Committee for Audit Committee Chairs. Ms. Sprieser is a former member of the Board of Directors of Experian plc, Jimmy Choo plc, Koninkilijke Ahold Delhaize N.V., Reckitt Benckiser Group, plc, and Total Wine & More. Ms. Sprieser also serves as a trustee of Northwestern University. Ms. Sprieser brings to the board decades of experience in both financial and operations management of consumer-packaged goods companies and as a director of large, multi-national corporations operating across multiple sectors.

 

 

 

 

 

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Director Since

Age

 

 2018  

    65  

 

 

Robert A. Steele has served as founder and CEO of STEELE Consulting LLC, a consulting firm, since 2012. Mr. Steele retired in 2011 as the Vice Chairman, Health Care for Procter & Gamble Co. During his 35-year tenure with Procter & Gamble Co., Mr. Steele served in a variety of executive leadership positions, including Vice Chairman Global Health and Well-being, Group President Global Household Care, and Group President of North American Operations. Mr. Steele currently serves on the Board of Directors of Berry Global Group, Inc. and BJ’s Wholesale Club, Inc. Mr. Steele is a former member of the Board of Directors of Beam Inc., Keurig Green Mountain Inc. and Kellogg Company. Mr. Steele has extensive consumer products management experience, having held a variety of executive leadership positions during his tenure at Procter & Gamble Co.

 

 

 

 

 

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INFORMATION REGARDING BOARD OF DIRECTORS, COMMITTEES

AND CORPORATE GOVERNANCE

The primary responsibility of the Board is to oversee the affairs of the Company for the benefit of the Company’s stockholders. To assist it in fulfilling its duties, the Board has delegated certain authority to the Audit Committee, the Finance Committee, the Organizational Development & Compensation Committee and the Nominating/Governance Committee. The duties and responsibilities of these standing committees are described below under “Committees.”

The Board has adopted the “Newell Brands Inc. Corporate Governance Guidelines.” The purpose of these guidelines is to ensure that the Company’s corporate governance practices enhance the Board’s ability to discharge its duties on behalf of the Company’s stockholders. The Corporate Governance Guidelines are available under the “Corporate Governance” link under the “Investors” tab on the Company’s website at www.newellbrands.com and may be obtained in print without charge upon written request by any stockholder to the Corporate Secretary at 6655 Peachtree Dunwoody Road, Atlanta, GA 30328.

In recent years, the Board has taken the following actions with respect to the Company’s corporate governance practices:

 

 

 

Ø   implemented and enhanced an annual Board, committee and individual director evaluation process

 

        

 

Ø   adopted a “clawback,” or recoupment, policy with respect to the incentive compensation of executive officers

Ø   implemented director and executive officer stock ownership guidelines

   

Ø   amended the Company’s Restated Certificate of Incorporation to provide for the annual election of directors

Ø   established a stockholder outreach program

   

Ø   terminated the Company’s stockholder rights plan, or poison pill

Ø   adopted changes to the Company’s By-Laws to permit stockholders who own 15% or more of the Company’s outstanding common stock, on an aggregate net long basis, to call a special meeting of stockholders

   

Ø   adopted a “proxy access” provision in the Company’s By-Laws to permit stockholders who have owned 3% or more of the Company’s outstanding common stock for at least three years to nominate up to 20% of directors up for election in any one year

Ø   adopted a formal procedure in the Corporate Governance Guidelines to address and respond to successful stockholder proposals

   

Ø   amended the Company’s Restated Certificate of Incorporation to allow stockholder action by written consent

Ø   implemented majority voting for directors in uncontested director elections

   

Ø   implemented anti-hedging and anti-pledging policies applicable to executive officers and directors

Ø   recommended a proposal to eliminate supermajority voting requirements in the Company’s charter documents which was approved by stockholders

       
 

 

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THE COMPANY HAS AN INDEPENDENT NON-EXECUTIVE CHAIRPERSON OF THE BOARD

The positions of Chairperson of the Board and CEO are usually held by different persons. The Board believes that this separation has served the Company well for many years. However, the Board may choose to change this as it determines to be best for the Company under the then existing circumstances.

Should the Chairperson of the Board position be held by the CEO, the Board will appoint a lead independent director. The Board believes that the current arrangement of separating the roles of Chairperson of the Board and CEO is in the best interest of the Company and its stockholders at this time because it provides the appropriate balance between strategy development and independent oversight of management. Mr. Campbell currently serves as the independent non-executive Chairperson of the Board.

Mr. Campbell was appointed Chairperson of the Board in 2018 pursuant to the Nomination Agreement, which prohibits the Board from appointing any other Chairperson of the Board without the approval of at least one of the Icahn Designees (as defined under “Certain Relationships and Related Transactions”) so long as at least two Icahn Designees are members of the Board.

DIRECTOR INDEPENDENCE

Pursuant to the Corporate Governance Guidelines, the Board undertook its annual review of director independence in 2021. During this review, the Board considered whether or not each director has any material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company) and has otherwise complied with the requirements for independence under the applicable Nasdaq rules.

As a result of these reviews, the Board affirmatively determined that all of the Company’s current directors are “independent” of the Company and its management within the meaning of the applicable Nasdaq rules and under the standards set forth in the Corporate Governance Guidelines, with the exception of Ravichandra Saligram. Mr. Saligram is not considered an independent director because of his employment as President and Chief Executive Officer of the Company.

MEETINGS

The Company’s Board held seventeen meetings during 2020. All directors attended at least 75% of the Board meetings, including the 2020 annual meeting of stockholders, and meetings of Board committees on which they served. Under the Company’s Corporate Governance Guidelines, each director is expected to attend the Annual Meeting.

The Company’s non-management directors held five meetings during 2020 separately in executive session without any members of management present. The Company’s Corporate Governance Guidelines provide that the presiding director at each such session is the Chairperson of the Board or lead director, or in his or her absence, the person the Chairperson of the Board or lead director so appoints. The Chairperson of the Board currently presides over executive sessions of the non-management directors.

COMMITTEES

The Board has an Audit Committee, a Finance Committee, an Organizational Development & Compensation Committee and a Nominating/Governance Committee.

 

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Pursuant to the subsequently described Nomination Agreement, in 2018, Mr. Brett Icahn was appointed to the Audit Committee and Organizational Development & Compensation Committee and Mr. Mather was appointed to the Finance Committee as committee chair and to the Nominating/Governance Committee. Since March 2020, Mr. Brett Icahn serves only on the Organizational Development & Compensation Committee.

Audit Committee.    The Audit Committee, the current Chair of which is Ms. Sprieser and the other current members of which are Mr. Johnson, Mr. Lopez, Ms. Ryan-Berman and Mr. Strobel, met ten times during 2020. Ms. Sprieser has served as Chair since March 2020, and Mr. Johnson joined the Audit Committee in October 2020. The Board has affirmatively determined that (a) each member of the Audit Committee was, during such director’s time of service through March 2021, an “independent director” and (b) each continuing member of the Audit Committee is an “independent director”, in each case, for purposes of the Audit Committee under the applicable SEC regulations, the applicable Nasdaq rules and the Company’s Corporate Governance Guidelines. Each of Messrs. Johnson and Strobel and Ms. Sprieser qualifies as an “audit committee financial expert” within the meaning of the applicable SEC regulations.

The Audit Committee assists the Board in fulfilling its fiduciary obligations to oversee:

 

  l    

the integrity of the Company’s financial statements;

 

  l    

the Company’s compliance with legal and regulatory requirements;

 

  l    

the qualifications and independence of the Company’s independent registered public accounting firm;

 

  l    

the performance of the Company’s internal audit function and independent registered public accounting firm; and

 

  l    

the Company’s overall risk management profile and the Company’s process for assessing significant business risks.

In addition, the Audit Committee:

 

  l    

is directly responsible for the appointment, compensation, retention and oversight of the work of the Company’s independent registered public accounting firm;

 

  l    

has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters, including procedures for confidential, anonymous submission by employees of concerns regarding questionable accounting or audit matters; and

 

  l    

has the authority to engage independent counsel and other advisors as it deems necessary to carry out its duties.

Finance Committee.    The Finance Committee, the Chair of which is Mr. Mather and the other current members of which are Mr. Lopez, Ms. Sprieser and Mr. Strobel, met five times in 2020.

The Finance Committee is principally responsible for:

 

  l    

reviewing the Company’s capital structure, including its dividend policy and stock repurchase programs;

 

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  l    

reviewing and recommending, as appropriate, acquisitions, divestitures, partnerships and other business combinations; and

 

  l    

reviewing the Company’s tax planning and treasury activities and key financial policies.

Organizational Development & Compensation Committee.    The Organizational Development & Compensation Committee, the current Chair of which is Mr. Craigie and the other current members of which are Mr. Icahn, Ms. Ryan Berman and Mr. Steele, met ten times during 2020. The Board has affirmatively determined that each member of the Organizational Development & Compensation Committee is an “independent director” for purposes of the Organizational Development & Compensation Committee under the applicable SEC regulations, the applicable Nasdaq rules and the Company’s Corporate Governance Guidelines.

The Organizational Development & Compensation Committee is principally responsible for:

 

  l    

assisting the independent directors in evaluating the CEO’s performance and setting the CEO’s compensation;

 

  l    

making recommendations to the Board with respect to incentive-compensation plans, equity-based plans and director compensation;

 

  l    

reviewing and approving the compensation for executive officers other than the CEO; and

 

  l    

assisting the Board in management succession planning.

The Organizational Development & Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Organizational Development & Compensation Committee. Additional information on the Organizational Development & Compensation Committee’s processes and procedures for the selection of a compensation consultant and consideration and determination of executive and director compensation is addressed below under the caption “Executive Compensation—Compensation Discussion and Analysis.”

Nominating/Governance Committee.    The Nominating/Governance Committee, the current Chair of which is Mr. Steele and the other current members of which are Mr. Craigie and Mr. Mather, met five times during 2020. The Board has affirmatively determined that each member of the committee is an “independent director” for purposes of the Nominating/Governance Committee under the applicable SEC regulations and the Company’s Corporate Governance Guidelines.

The Nominating/Governance Committee is principally responsible for:

 

  l    

identifying and recommending to the Board candidates for nomination or election as directors;

 

  l    

reviewing and recommending to the Board appointments to Board committees;

 

  l    

developing and recommending to the Board corporate governance guidelines for the Company and any changes to those guidelines;

 

  l    

reviewing, from time to time, the Company’s Code of Conduct and certain other policies and programs intended to promote compliance by the Company with its legal and ethical obligations, and recommending to the Board any changes to the Company’s Code of Conduct and such policies and programs;

 

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  l    

reviewing environmental, health and safety compliance, sustainability programs, diversity and inclusion programs, corporate citizenship and government relations; and

 

  l    

overseeing the Board’s annual evaluation of its own performance.

Each of the above referenced committees acts under a written charter that is available under the “Corporate Governance” link under the “Investors” tab on the Company’s website at www.newellbrands.com and may be obtained in print without charge upon written request by any stockholder to the office of the Corporate Secretary of the Company at 6655 Peachtree Dunwoody Road, Atlanta, GA 30328.

BOARD AND MANAGEMENT ROLES IN RISK OVERSIGHT

Management is responsible for the day-to-day management of risk, while the Board, as a whole and through its committees, provides oversight of the Company’s risk management. The Board engages in risk oversight throughout the year as a matter of course in fulfilling its role overseeing management and business operations. In addition, each year, the full Board receives reports on the strategic plans and related risks facing the Company from senior management, including reports from the Company’s individual functions and businesses and their respective management teams. These risks may include financial risks, political and regulatory risks, legal risks, supply chain risks, competitive risks, privacy and information technology risks and other risks relevant to the Company and the way it conducts business.

The Board has delegated to its committees certain elements of its risk oversight function to better coordinate with management and serve the long-term interests of stockholders.

 

  l    

The Audit Committee oversees the Company’s risk management process, with specific focus on internal controls, financial statement integrity, compliance programs, fraud risk, legal matters and related risk mitigation. In connection with this oversight, the Audit Committee reviews and discusses with management, and, as appropriate, the Company’s internal auditors and the Company’s independent registered public accounting firm, the Company’s risk assessments, the risk management process and issues related to the management of the Company’s business. Among the risk management oversight responsibilities of the Audit Committee is the status of data privacy, security for the Company’s electronic data processing information systems and the general security of information systems. The Audit Committee also receives an annual enterprise risk management update, which discusses the Company’s major financial, strategic, operational, cybersecurity and compliance risk exposures and the steps management has taken to monitor and control such exposures.

 

  l    

The Finance Committee oversees risks relating to the Company’s capital structure and financing, including borrowing, liquidity and capital allocation. The Finance Committee also oversees risks associated with stockholder distributions (dividends and stock repurchases), acquisitions and divestitures, the Company’s insurance programs, long-term benefit obligations and the use of derivatives to manage risk related to foreign currencies, commodities and interest rates.

 

  l    

The Organizational Development & Compensation Committee reviews the risk profile of the Company’s compensation policies and practices. This process includes a review of an assessment of the Company’s compensation programs, as described in “Risk Assessment of Compensation Programs” below. The Organizational Development & Compensation Committee also manages risks associated with employee retention through employee development and succession planning.

 

  l    

The Nominating/Governance Committee monitors risks relating to governance matters and recommends appropriate actions in response to those risks. The Nominating/Governance

 

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Committee also oversees Code of Conduct-related compliance programs, environmental, health and safety compliance, sustainability programs, diversity and inclusion programs, corporate citizenship and government relations.

The Board believes the allocation of risk management responsibilities described above supplements the Board’s leadership structure by allocating risk areas to an appropriate committee for oversight, allows for an orderly escalation of issues as necessary, and helps the Board satisfy its risk oversight responsibilities.

RISK ASSESSMENT OF COMPENSATION PROGRAMS

With respect to compensation practices, the Organizational Development & Compensation Committee considered, with the assistance of management and the independent compensation consultant, whether the Company’s compensation policies and practices in 2020 for its employees, including the named executive officers, would motivate inappropriate levels of risk taking that could have a material adverse effect on the Company. The Organizational Development & Compensation Committee determined that there was no risk that was reasonably likely to have such a material adverse effect. The Organizational Development & Compensation Committee noted the following aspects of the executive compensation program that serve to mitigate any potential risk:

 

  l    

The program provides an appropriate balance between fixed and variable compensation.

 

  l    

Annual bonus payouts are based on a variety of performance metrics.

 

  l    

LTIP awards are generally subject to a three-year cliff vesting, or in some cases three-year ratable vesting, promoting employee development and retention.

 

  l    

Stock ownership guidelines link executives’ interests to increasing the value of the Company’s common stock over the long-term, thus aligning management’s interest with those of the Company’s stockholders.

 

  l    

Executive incentive awards are subject to an incentive recoupment policy.

 

  l    

The hedging and pledging of Company securities by executive officers is prohibited.

DIRECTOR NOMINATION PROCESS

The Nominating/Governance Committee is responsible for identifying and recommending to the Board candidates for directorships. The Nominating/Governance Committee considers candidates for Board membership who are recommended by members of the Nominating/Governance Committee, other Board members, members of management and individual stockholders. From time to time, the Nominating/Governance Committee has engaged the services of global executive search firms to assist the Nominating/Governance Committee and the Board in identifying and evaluating potential director candidates. Once the Nominating/Governance Committee has identified prospective nominees for director, the Board is responsible for selecting such candidates. The Board considers candidates for director who are free of conflicts of interest or relationships that may interfere with the performance of their duties.

As set forth in the Corporate Governance Guidelines, the Board seeks to identify as candidates for director a diverse group of persons from various backgrounds and with a variety of life experiences, a reputation for integrity and good business judgment and experience in highly responsible positions in professions or industries relevant to the conduct of the Company’s business. In selecting director candidates, the Board takes into account the current composition and diversity of the Board (including

 

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diversity with respect to race, gender and ethnicity) and the extent to which a candidate’s particular expertise and experience will complement the expertise and experience of other directors.

This year’s director nominees include many current or former CEOs or senior executives of large companies, reflect racial, ethnic and gender diversity and feature several individuals with extensive international experience. The average Board tenure of the directors seeking re-election is 2.4 years.

The Board assesses the effectiveness of the director nomination process by conducting a periodic review of its own performance, as discussed below, which evaluates, among other things, whether the Board and Nominating/Governance Committee are functioning effectively and in compliance with this policy. The Nominating/Governance Committee is responsible for organizing and overseeing the review process and for soliciting the input of all of the directors.

BOARD EVALUATIONS

In order to increase the effectiveness of the Board, the Nominating/Governance Committee supervises a review and evaluation of the performance of the Board of Directors, its Committees and each individual director each year. The evaluation includes both an interview of each director and a questionnaire with a wide range of questions related to topics including oversight, strategy, management capabilities, composition of the Board, responsibilities and resources. In 2020, the Nominating/Governance Committee and Chairperson of the Board led a robust process, including the engagement of an independent third-party firm to interview each director, collect feedback, review it with the Board and facilitate self-evaluation comments. In addition, each of the Audit, Finance, Nominating/Governance and Organizational Development & Compensation committees conducted an annual self-evaluation. The Board’s Committees were evaluated by each Committee member based on a questionnaire that is updated periodically.

DIVERSITY AND INCLUSION

The Nominating/Governance Committee of the Board provides oversight for and periodically reviews the Company’s Diversity and Inclusion policies and programs.

In 2019, the Company appointed a Chief Diversity Officer to oversee diversity and inclusion initiatives. The Company began publicly reporting on its priorities, initiatives and workforce demographics in its 2019 Corporate Social Responsibility Report, published in April 2020.

In 2020, the Company adopted a hiring policy for U.S. leadership roles that requires the inclusion of diverse slates consisting of at least two candidates who are (i) women and/or (ii) candidates of color (e.g. identifying as other than white/Caucasian) and/or (iii) openly LGBTQ. Pursuant to this policy, the Company will apply the same policy to filling vacancies on our Board of Directors as well, should the opportunity arise. The Company also plans to publicly share its quantitative goals for diversity on the Executive Leadership Team and among direct reports of the Business Unit CEOs and functional heads in its 2020 Corporate Citizenship Report. In the near future, the Company plans to begin including its EEO-1 survey data on its corporate website.

Diversity is an important criterion that is factored in when conducting new director recruitment and evaluating the composition of the Board. In its annual Board evaluation, the Board assessed whether its composition reflected an appropriate mixture of skills, diversity, and experience that align with the strategic demands of the Company.

 

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Of the ten directors seeking election at the 2021 Annual Meeting of Stockholders, five directors reflect gender or ethnic/racial diversity, including two female directors (Mses. Ryan Berman and Sprieser) and three male directors (Messrs. Johnson, Lopez and Saligram) who identify as Black/African American, Hispanic and Asian American, respectively.

2021 BOARD COMPOSITION SNAPSHOT

The graphics below reflect the diversity, tenure and key skill sets of the directors standing for election at the Annual Meeting.

 

 

 

LOGO

BOARD SKILLS

In early 2021, the Nominating/Governance Committee discussed the key experience, qualifications and attributes for Board members and facilitated an evaluation of each director’s skills in these categories. The graphics below depict the percentage of directors standing for election at the Annual Meeting possessing each skill.

 

 

LOGO

 

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COMMUNICATIONS WITH THE BOARD

The independent members of the Board have adopted the Company’s “Procedures for the Processing and Review of Stockholder Communications to the Board,” which provide for the processing, review and disposition of all communications sent by stockholders or other interested persons to the Board. Stockholders and other interested persons may communicate with the Company’s Board or any member or committee of the Board by writing to them at the following address:

 

                                               

 

Newell Brands Inc.

Attention: Board of Directors

c/o Corporate Secretary

6655 Peachtree Dunwoody Road

Atlanta, GA 30328

 

                                            

Communications directed to the independent or non-management directors should be sent to the attention of the Chairperson of the Board or the Chair of the Nominating/Governance Committee, c/o Corporate Secretary, at the address indicated above.

Any complaint or concern regarding financial statement disclosures, accounting, internal accounting controls, auditing matters or violations of the Company’s Code of Ethics for Senior Financial Officers should be sent to the attention of the Chief Legal Officer at the address indicated above or may be submitted in a sealed envelope addressed to the Chair of the Audit Committee, c/o Chief Legal Officer, at the same address, and labeled with a legend such as: “To Be Opened Only by the Audit Committee.” Such accounting complaints will be processed in accordance with procedures adopted by the Audit Committee. Further information on reporting allegations relating to accounting matters is available under the “Corporate Governance” link under the “Investors” tab on the Company’s website at www.newellbrands.com.

CODE OF ETHICS

The Board has adopted a “Code of Ethics for Senior Financial Officers,” which is applicable to the Company’s senior financial officers, including the Company’s principal executive officer, principal financial officer, principal accounting officer and controller. The Company also has a separate “Code of Conduct” that is applicable to all Company employees, including each of the Company’s directors and officers. Both the Code of Ethics for Senior Financial Officers and the Code of Conduct are available under the “Corporate Governance” link under the “Investors” tab on the Company’s website at www.newellbrands.com. The Company posts any amendments to or waivers of its Code of Ethics for Senior Financial Officers or to the Code of Conduct (to the extent applicable to the Company’s directors or executive officers) at the same location on the Company’s website. In addition, copies of the Code of Ethics for Senior Financial Officers and of the Code of Conduct may be obtained in print without charge upon written request by any stockholder to the office of the Corporate Secretary of the Company at 6655 Peachtree Dunwoody Road, Atlanta, GA 30328.

 

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Various Company policies and procedures, which include the Code of Conduct (applicable to all Company employees, including executive officers and non-employee directors), the Code of Ethics for Senior Financial Officers and annual questionnaires completed by all Company directors and executive officers, require disclosure of transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable SEC rules. Pursuant to its charter, the Nominating/Governance Committee considers and makes recommendations to the Board with respect to possible waivers of conflicts of interest or any other provisions of the Code of Conduct and the Code of Ethics for Senior Financial Officers. Pursuant to the Corporate Governance Guidelines, the Nominating/Governance Committee also annually reviews the continuing independence of the Company’s non-employee directors under applicable law or Nasdaq rules and reports its findings to the Board in connection with its independence determinations.

When the Nominating/Governance Committee learns of a transaction or relationship that may constitute a conflict of interest or may cause a director not to be treated as independent, the Nominating/Governance Committee determines if further investigation is required and, if so, whether it should be conducted by the Company’s legal, internal audit or other staff or by outside advisors. The Nominating/Governance Committee reviews and evaluates the transaction or relationship, including the results of any investigation, and makes a recommendation to the Board with respect to whether a conflict or violation exists or will exist or whether a director’s independence is or would be impaired. The Board, excluding any director who is the subject of the recommendation, receives the report of the Nominating/Governance Committee and makes the relevant determination. These practices are flexible and are not required by any document.

NOMINATION AGREEMENT

The Company is a party to the Nomination Agreement, which was entered into on March 18, 2018 with Mr. Carl C. Icahn, Mr. Brett Icahn, Mr. Courtney Mather, Mr. Andrew Langham, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Enterprises G.P. Inc., Icahn Enterprises Holdings L.P., IPH GP LLC, Icahn Capital LP, Icahn Onshore LP, Icahn Offshore LP and Beckton Corp. (collectively, the “Icahn Group”) and amended on April 23, 2018. Pursuant to the Nomination Agreement, each of Messrs. Brett Icahn and Mather (the “Icahn Designees”) and Mr. Campbell were appointed to the Board as of March 18, 2018. Mr. Campbell was also appointed Chairperson of the Board pursuant to the Nomination Agreement, and the Board may not appoint any other Chairperson of the Board without the approval of at least one of the Icahn Designees (so long as at least two Icahn Designees are members of the Board). For any annual meeting of stockholders, should the Board decide not to nominate Mr. Campbell or one of the Icahn Designees to the Board, the Company must notify the Icahn Group within a certain period of time in advance of the advance notice deadline for that annual meeting. So long as Mr. Campbell or one of the Icahn Designees is serving on the Board and the Icahn Group has not materially breached the Nomination Agreement or dropped below certain ownership thresholds set forth therein, the Icahn Group shall be entitled to designate a replacement, who must be approved by the Board, should Mr. Campbell or one of the Icahn Designees be rendered unable to continue to serve on the Board.

Pursuant to the Nomination Agreement, so long as an Icahn Designee is a member of the Board, the Board will not be expanded to more than twelve directors without the approval from the Icahn Designees then on the Board.

In addition, at the Annual Meeting, and any subsequent annual meeting of stockholders subsequent to the Annual Meeting, if the Icahn Designees have agreed in writing to be nominated for election at such

 

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annual meeting, the Icahn Group agrees not to vote for any directors nominated by any person other than the Board and to vote in favor of the appointment of the Company’s auditors.

Pursuant to the Nomination Agreement, so long as either of the Icahn Designees is a member of the Board, the Company agreed (i) not to create a separate executive committee of the Board or any other committee with functions similar to those customarily granted to an executive committee, (ii) not to form any new committee without offering at least one Icahn Designee the opportunity to be a member of such committee, and (iii) that, with respect to any Board consideration of appointment and employment of executive officers, mergers, acquisitions of material assets, dispositions of material assets, or other extraordinary transactions, such consideration, and voting with respect thereto, shall take place only at the full Board level or in committees of which at least one of the Icahn Designees is a member.

If at any time the Icahn Group ceases to hold a “net long” position, as defined in the Nomination Agreement, in at least (A) 3.0% of the total outstanding shares of the Company’s common stock, the Icahn Group will cause one Icahn Designee employed by a member of the Icahn Group as of the date of the Nomination Agreement (or his or her replacement) to promptly resign from the Board and any committee of the Board on which he or she then sits and (B) 1.5% of the total outstanding shares of the Company’s common stock, the Icahn Group will cause each Icahn Designee employed by a member of the Icahn Group as of the date of the Nomination Agreement to promptly resign from the Board and any committee of the Board on which he or she then sits.

OWNERSHIP OF DEBT SECURITIES

Mr. Brett Icahn owns $700,000 face amount of the Company’s 3.850% notes due 2023, which he purchased in an open market transaction with an unaffiliated third party. Mr. Brett Icahn purchased the notes through a wholly owned limited liability company. In 2020, as a result of his ownership of the notes and in accordance with the terms of the notes, Mr. Brett Icahn received approximately $28,700 in interest from the Company. Mr. Brett Icahn did not receive any principal from the Company. The notes pay interest semi-annually in arrears on April 1 and October 1 of each year at the rate of 3.850% per annum plus an applicable interest rate increase based on the coupon step up provision.

 

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2020, Messrs. Craigie, Brett Icahn and Steele and Ms. Ryan Berman served on the Organizational Development & Compensation Committee. No member of the Organizational Development & Compensation Committee was, during 2020, an officer or employee of the Company, was formerly an officer of the Company, or, other than as noted in the section titled “Certain Relationships and Related Transactions”, above, had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K. During 2020, none of the Company’s executive officers served on the Board or the compensation committee of any other entity, any officers of which served either on the Company’s Board or the Organizational Development & Compensation Committee.

 

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ORGANIZATIONAL DEVELOPMENT & COMPENSATION COMMITTEE REPORT

The Organizational Development & Compensation Committee (the “Committee”) has furnished the following report to the stockholders of the Company in accordance with rules adopted by the U. S. Securities and Exchange Commission.

The Committee states that it reviewed and discussed with management the Company’s Compensation Discussion and Analysis contained in this Proxy Statement.

Based upon the review and discussions referred to above, the Committee recommended to the Board that the Company’s Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

This report is submitted on behalf of the current members of the Committee:

James R. Craigie, Chair

Brett M. Icahn

Bridget Ryan Berman

Robert A. Steele

 

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This CD&A explains the material elements of the compensation of the Company’s named executive officers and describes the objectives and principles underlying the Company’s executive compensation program and decisions made in 2020. For 2020, our named executive officers (“NEOs”) are:

 

Named Executive Officer

   Title
      

Ravichandra K. Saligram

  

President and Chief Executive Officer

Christopher H. Peterson

  

Chief Financial Officer and President, Business Operations

Mr. Peterson was promoted from Chief Financial Officer to Chief Financial Officer and President, Business Operations in February 2020.

Bradford R. Turner

  

Chief Legal and Administrative Officer and Corporate Secretary

Laurel M. Hurd

  

Segment President, Learning and Development

Kristine K. Malkoski

  

Business Unit CEO—Food

Ms. Malkoski joined the Company in February 2020.

David M. Hammer

  

Formerly, Business Unit CEO—Appliances and Cookware

Mr. Hammer left the Company as of September 30, 2020.

      

Except as noted above, all of the NEOs served for the full year.

2020 Major Accomplishments

 

 

Ø    Improved core sales trends and returned to core sales growth in 2H 2020

Ø    Generated $1.4 billion in operating cash flow

Ø    Significantly improved operating margin

Ø    Improved omni-channel execution and accelerated eCommerce growth

Ø    Reduced over 30,000 total SKUs and achieved $279 million in FUEL productivity improvements

Ø    Strengthened and diversified leadership team

Ø    Improved customer relationships

Ø    Substantially reduced net debt

 

Progress on the Turnaround Plan.

2020 was a foundational year for the Company’s turnaround plan. The Company continued executing on its turnaround strategy of building a global, next generation consumer products company that can

 

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unleash the full potential of its brands in a fast moving omni-channel environment. The strategy, developed in 2019, is designed to drive sustainable top line growth, improve operating margins, accelerate our cash conversion cycle and strengthen our portfolio, organizational capabilities and employee engagement, while addressing key challenges facing the Company. These challenges include shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail landscape, including the growth in e-commerce; continued macroeconomic volatility; and an evolving regulatory landscape.

Despite the ongoing COVID-19 pandemic and its impact on the business, the Company made significant progress on the following previously identified turnaround plan initiatives:

 

  l    

Strengthening the portfolio by investing in attractive categories aligned with its capabilities and strategy;

 

  l    

Driving sustainable, profitable growth by focusing on innovation, as well as growth in digital marketing, e-commerce and its international businesses;

 

  l    

Improving margins by driving productivity and overhead savings, while reinvesting in the business;

 

  l    

Enhancing cash efficiency by improving key working capital metrics, resulting in a lower cash conversion cycle; and

 

  l    

Building a winning team through engagement and focusing the best people on the right things.

In 2020, the Company recruited three new Business Unit CEOs (including Ms. Malkoski) as well as a Chief Customer Officer.

Performance Against Original Bonus Plan Performance Goals*

 

  Original Bonus Plan Performance Goals    2019 Actual
Performance
       2020
Actual Performance
 
                              

  Adjusted Earnings Per Share

     $1.70          $1.79        LOGO  

  Adjusted Operating Cash Flow

     $1.1 billion          $1.4 billion        LOGO  

  Core Sales Growth

     -1.9%          -1.1%        LOGO  
                              

 

*For detailed information about 2020 performance under the original Bonus Plan targets and the Amended Bonus Program, adopted in June, please see the tables below titled Bonus Plan Performance Targets” and “2020 Amended Bonus Program—Performance Targets.”

COVID-19 Impact on Operations.

The COVID-19 pandemic in 2020 resulted in restrictions mandated by various federal, state and local governments, as well as private entities, on travel and public gatherings, the closure of non-essential commerce, stay at home orders and quarantining of people to limit exposure to the virus. The Company’s

 

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global operations, similar to those of many large, multi-national corporations, experienced significant and unprecedented disruptions to its business in three primary areas: supply chain, retail and consumer demand patterns.

While the majority of the Company’s factories are considered essential in their applicable jurisdictions and have remained operational, the Company experienced disruption at certain of its facilities. Of our 135 manufacturing and distribution facilities, approximately 20 were temporarily closed at the end of the first quarter of 2020, the most significant of which were our South Deerfield, MA, Home Fragrance plant, our Mexicali, Mexico and India Writing facilities and our Juarez, Mexico Connected Home and Security facility, all of which were closed in accordance with state government guidelines. By the end of the third quarter of 2020, substantially all of the Company’s manufacturing and distribution facilities reopened and were operating at or near capacity. Since then, the Company’s facilities have replenished most of the inventory levels that were depleted by lost production during the temporary closure period. The Company does, however, continue to face intermittent supply and labor shortages, capacity constraints, and transportation and logistical challenges and expects this to persist until the current economic and public health conditions improve globally.

While the Company’s largest retail customers experienced a surge in sales as their stores remained open, a number of secondary customers, primarily in the specialty and department store channels, temporarily closed their brick and mortar locations in March 2020, and began to reopen in certain regions where conditions improved towards the end of the second quarter of 2020. These dynamics, in combination with some retailers’ prioritization of essential items, have had a meaningful impact on the Company’s traditional order patterns. In addition, the Company temporarily closed its Yankee Candle retail stores in North America as of mid-March. These stores reopened by the end of the third quarter and have remained open since.

During the quarantine phase of the pandemic, consumer purchasing behavior strongly shifted to certain focused categories. While certain of the Company’s product categories in the Food, Commercial and Appliances and Cookware business benefited from this shift, others, particularly the Writing business, experienced significant slowing. Changes in consumer purchasing patterns, temporary office closures, as well as the shift to remote learning for schools and other higher education programs in the Fall semester of 2020 adversely impacted the performance of the Writing business during 2020.

In response to the COVID-19 pandemic, the Company focused on protecting the health and well-being of its employees; maintaining financial viability and business continuity; and keeping manufacturing facilities and distribution centers operating, where permitted and deemed prudent, to provide products to our consumers. The Company put in place internal protocols including the establishment of a COVID-19 task force to monitor the situation, as well as communications and guidance issued by foreign, federal, state and local governments. The Company instituted mandatory work-from-home policies for employees able to work from home in various locations around the world and implemented a number of precautionary measures at its manufacturing plants, warehouses, distribution centers and R&D centers to reduce person-to-person contact and improve the personal safety for our front-line employees. Furthermore, the Company temporarily closed all of the world-wide Yankee Candle retail stores. By the end of the third quarter of 2020, all of the Company’s temporarily closed manufacturing and distribution sites reopened and were operating at or near capacity. In addition, most of the Company’s office locations have reopened on a limited basis.

The Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level to evaluate possible cessation or extensions to all or part of these COVID-19 precautionary initiatives. As part of the Company’s efforts to contain costs and maintain financial liquidity and flexibility, we instituted a hiring freeze for non-essential roles, furloughed all

 

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field-based and most corporate retail employees in North America, from April 1, 2020 through the third quarter of 2020, tightened discretionary spending, reduced non-essential travel and optimized advertising and promotional expenses. In addition, the Company announced a restructuring program during the second quarter of 2020 to reduce overhead costs, streamline certain underperforming operations and improve future profitability.

While the negative effects from the COVID-19 global pandemic in the first half of 2020 were material to the Company’s operating results, the Company saw positive business momentum, which included sales growth during the second half of the year and strong liquidity with over $1.4 billion in operating cash flow for the year ended December 31, 2020.

Board Response to COVID-19—Impact on Compensation Plans.

From an executive compensation perspective, the Company had set its budgets and performance targets for 2020 awards under our Management Bonus Plan (the “Bonus Plan”) and LTIP before the COVID-19 pandemic took hold and while recruitment efforts for Business Unit leadership were underway. By the end of the second quarter, the uncertainty with respect to consumer demand and limited visibility as to full year results, taken together with the need for the Company to retain and incentivize key executives, led the Committee to modify certain elements of executive compensation, as further described below.

In particular, the Bonus Plan was amended in order to drive performance in the second half of 2020, to promote collaboration in managing the challenges presented by COVID-19 and to focus on operational improvements at the Company. The Amended Bonus Program had provisions in place to mitigate windfalls and shortfalls in an effort to unite the Company towards a common purpose in 2020.

2020 Results.

In 2020, the Company continued executing its Turnaround Strategy and strengthening financial and operational performance amidst the ongoing COVID-19 pandemic.

Below is a summary of the overall 2020 financial and operating performance of the Company2:

 

  l    

Net sales were $9.4 billion, a decline of 3.4% compared with $9.7 billion in the prior year. Core sales decreased 1.1% versus 2019.

 

  l    

Reported gross margin was 32.8%, compared with 33.1% in the prior year. Normalized gross margin was 32.9%, compared with 33.8% in the prior year.

 

  l    

Reported operating loss was $634 million compared with an operating loss of $482 million in 2019. Normalized operating income was $1.0 billion, similar to the prior year. Normalized operating margin was 11.1% compared with 10.8% in the prior year.

 

  l    

Interest expense was $274 million, compared with $303 million in 2019, reflecting a reduction in outstanding debt.

 

  l    

Reported net loss was $770 million compared with net income of $107 million in 2019. Reported diluted loss per share was $1.82 compared with a reported diluted earnings per share of $0.25 in 2019.

 

2 For an explanation of non-GAAP measures and a reconciliation to GAAP, please see Appendix A.

 

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  l    

Normalized net income was $760 million, compared with $722 million in the prior year. Normalized Diluted Earnings Per Share were $1.79 compared with $1.70 in the prior year.

 

  l    

2020 operating cash flow was $1.4 billion, compared with $1.0 billion in 2019.

Pay for Performance.

2020 Pay for Performance at a Glance

2020 Amended Bonus Program Results - Corporate

 

 

 

 

 

LOGO

 

LOGO

 

 

 

2018–2020 LTIP—Performance Results

Performance Metric—Relative TSR vs. TSR Comparator Group

 

 

 

 

 

LOGO

 

 

 

 

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The Company continues to emphasize pay for performance, as evidenced by the design and execution of its compensation program:

 

  l    

Mr. Saligram’s total target direct compensation (which is comprised of base salary, target annual cash incentive awards, and target annual LTIP awards) for 2020 was 84% performance-based and approximately 77% of total target direct compensation of the other named executive officers (on average and excluding Mr. Hammer) was performance based.

 

  l    

Based on the Company’s performance in prior years, performance-based restricted stock units (“PRSUs”) granted pursuant to the LTIP in 2018 paid out at 57% in February 2021.

 

  l    

In 2020, the named executive officers received LTIP grants that were 100% performance-based, consisting of 70% PRSUs and 30% stock options.

 

  l    

The incentive targets for PRSUs granted to named executive officers in 2020 were weighted 50% to annual core sales growth performance and 50% to the achievement of cumulative free cash flow targets over the three-year performance period, with a +/- 25% modifier based on relative total shareholder return against the TSR Comparator Group (as defined below), representing an enhanced focus on achieving and sustaining core sales growth while maintaining an emphasis on cash generation during the performance period.

 

  l    

The annual incentive targets for Messrs. Saligram, Peterson and Turner included in the Company’s Amended Bonus Program (as defined below) were weighted 80% to the achievement of adjusted earnings per share, adjusted operating cash flow and core sales growth targets for the entire Company, 10% to the reduction of stock keeping units (“SKUs”) and 10% to the achievement of annual cost of goods sold (“COGS”) and indirect procurement savings goals under the Finding Untapped Efficiencies and Leverage initiative (the “FUEL Initiative”), a Company-wide program focused on margin enhancement.

 

  l    

The annual incentive targets for Mses. Hurd and Malkoski and Mr. Hammer were weighted 80% to the achievement of the adjusted earnings per share, adjusted operating cash flow and core sales growth targets for the entire Company, 10% to SKU reduction at the Business Unit level and 10% to FUEL Initiative savings at the Business Unit level.

 

  l    

Bonus payments to Corporate participants (Saligram, Peterson and Turner) were lower under the Amended Bonus Program (115%) than the amount each would have received under the original Bonus Plan performance targets (165%) in 2020.

 

  l    

The payout to each of Ms. Malkoski and Mr. Hammer under the Amended Bonus Program was below the amount each would have received under the Company’s original Bonus Plan performance targets.

 

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Compensation Program Objectives.

 

Objective    Rationale
      
Motivate Executives to Meet or Exceed Company Performance Goals   


A significant portion of an executive’s total compensation is directly tied to achieving the Company’s performance goals. Each year, the Committee reviews the performance goals and modifies them as appropriate to reflect the Company’s current business objectives and strategies

Reward Individual

Performance and

Contributions

  

The individual performance evaluation of each named executive officer, together with the executive’s contribution to Company performance, generally affects most aspects of each executive’s compensation. For example, the Committee typically considers individual performance in determining an executive’s annual salary, which, in turn, impacts the amount of incentive compensation that the executive could have earned for meeting or exceeding annual performance goals under the Bonus Plan. In addition, the CEO considers the individual performance of his direct reports when recommending any adjustments to the grant value for equity awards made to such executives under the LTIP or the final payout percentage of Bonus Plan payments.

Link the Financial

Interests of Executives

and Stockholders

  

The Committee uses restricted stock units (“RSUs”) and stock options, to provide long-term incentive compensation and to link the financial interests of the Company’s executives with those of its stockholders. In addition, the named executive officers are subject to stock ownership guidelines that help ensure they retain a significant portion of their vested equity awards.

Attract and Retain the

Best Possible

Executive Talent

  

Successful recruitment and retention of talented executives requires the Company to provide competitive compensation opportunities. To do that, the Company obtains information about compensation practices of its relevant competitors, and in 2020, the Company used compensation information compiled from a custom comparator group and published survey data.

      

 

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Compensation Policies and Practices.

The Committee believes that the compensation program includes key features that align the interest of the named executive officers and the long-term interest of stockholders and are good corporate governance practices.

 

What We Do   What We Don’t Do
     

Ø  Align pay with performance

 

Ø    Provide automatic or guaranteed base salary increases

Ø  In 2020, 100% of named executive officer annual equity awards were performance-based, including PRSUs and stock options

 

Ø    Re-price or back-date stock options

Ø  Cap annual and long-term incentive awards

 

Ø    Reward executives with little link to performance

Ø  Require named executive officers and directors to own a meaningful amount of Company stock

 

Ø    Pay dividend equivalents on RSUs prior to vesting

Ø  Maintain a compensation recoupment policy

 

Ø    Provide tax gross ups on golden parachute excise taxes

Ø  Maintain anti-hedging and anti-pledging policies for executive officers

 

Ø    Provide guaranteed incentive payouts over multi-year periods

Ø  Balance short-term and long-term incentives

 

Ø    Permit directors, executives or other employees to engage in hedging or pledging of our stock

Ø  Use an independent compensation consultant that is engaged by the Committee

 

Ø  Periodically review and evaluate plans for management development and succession

 

Ø  Periodically review and update the composition of the compensation peer group, as appropriate

   
     

 

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Determination of Executive Officer Compensation.

Summarized in the table below are roles and responsibilities of the parties that participate in, or have been delegated authority with respect to, the development and administration of the Company’s executive compensation program:

 

 

 

Organizational Development & Compensation Committee

 

(or its Equity Award Subcommittee, as applicable)

 

 

Ø     Reviews Company performance and approves the payout level of performance awards, if any, for executives.

 

 

 

Ø    Reviews and recommends to the independent Board members the CEO’s annual compensation, including salary, bonus and long-term incentives.

 

 

 

Ø     Approves the annual compensation for all executive officers other than the CEO.

 

 

 

Ø    Reviews and sets performance goals under the Bonus Plan and LTIP.

 

 

 

Ø     Reviews and approves awards (including the terms and conditions of such awards) under the Bonus Plan and LTIP for all executive officers other than the CEO.

 

 

 

Ø    Approves any severance agreements, change in control agreements or similar agreements between the Company and its executive officers other than the CEO.

 

 

 

 

Ø     Reviews and approves compensation for newly recruited executive officers.

 

 

 

 

 

Ø     Drives consistency, market competitiveness and parity in executive compensation plan design.

 

 

 

 

 

 

Independent Board Members  

 

 

Ø     Approve the CEO’s annual compensation, including salary, bonus and long-term incentive compensation.

 

 

 

 

 

 

Committee Consultant

 

(FW Cook)

 

 

 

Ø     Assists the Committee in reviewing the effectiveness and competitiveness of the Company’s executive compensation programs and policies.

 

 

 

 

Ø     Makes recommendations regarding executive compensation programs consistent with the Company’s business needs, pay philosophy, market trends, and the latest legal and regulatory considerations.

 

 

 

 

Ø     Provides market data as background to decisions regarding CEO and senior executive base salary and annual and long-term incentives.

 

 

 

 

Ø     Advises the Committee regarding non-executive director pay levels and executive compensation best practices.

 

 

 

 

Ø     Maintains independence by providing no other services to the Company (the Committee has evaluated its relationship with FW Cook and has determined that no conflict of interest exists with respect to the services FW Cook provides to the Committee).

 

 

 

 

Ø     Supports the development of a compensation peer group.

 

 

 

 

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Chief Executive Officer  

 

Ø    Recommends to the Committee, in the case of other executive officers, base salary amounts, equity awards as well as potential adjustments to incentive awards based on individual performance.

 

 

Ø     Participates in the development of annual Company performance goals under the Bonus Plan.

 

 

 

 

 

 

Other Executives  

 

Ø    The CEO’s management team plays a prominent role in gathering information for, and by participating in meetings of, the Committee.

 

 

Ø     The CEO works with the Chief Human Resources Officer regarding recommendations on base salary amounts, annual target bonus and equity awards for executives other than the CEO using competitive market data.

 

 

Ø    The Chief Financial Officer assists in developing recommendations on annual performance goals and determining whether financial performance goals were attained by the Company under the Bonus Plan and LTIP.

 

 

In making compensation decisions, the Committee considers several factors including competitive market data, individual and Company performance, skills, experience, complexity and criticality of role and internal pay equity. The Committee does not use a predetermined formula to make its overall decisions but considers all the above factors. However, in determining the performance-based component of compensation for the Company’s named executive officers in 2020, generally including annual incentive and long-term incentive compensation, the Committee tied payment to adjusted earnings per share, adjusted operating cash flow, free cash flow, core sales growth and relative total shareholder return (“TSR”). In June, the Committee added additional annual incentive performance goals to emphasize the importance of continuing to execute on the Company’s strategic operational objectives in light of COVID-19. In particular, the Committee added full-year performance goals at the corporate and Business Unit level for the reduction of SKUs and the achievement of annual COGS and indirect procurement savings goals under the FUEL Initiative. Such performance goals are intended to align the majority of each executive officer’s compensation with stockholders’ interests over the near and long term.

Stockholder Engagement.

We value the views of our stockholders and we believe that building positive relationships with our stockholders is critical to our long- term success. To help Company management and the Board understand and consider the issues that matter most to our stockholders, we periodically engage with our stockholders on a range of topics including executive compensation. We then incorporate this feedback into our executive compensation program when we determine it is appropriate.

Pursuant to Section 14A of the Exchange Act, the Company is required to submit to stockholders a Say on Pay Proposal. The Company currently submits the Say on Pay Proposal annually to stockholders, with a vote being held at the Annual Meeting. See “Proposal 3—Advisory Resolution to Approve Named Executive Officer Compensation.” Based on the advisory vote at the 2017 annual meeting, we expect that the frequency of the vote on our Say on Pay Proposal will continue to be every year.

 

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At the 2020 Annual Meeting of Stockholders, the Say on Pay Proposal was approved by approximately 92% of votes cast, including abstentions. The Compensation Committee considered this level of approval to indicate the support of the substantial majority of the Company’s stockholders. It also represented a 24% increase in the votes cast, including abstentions, in support of the Say on Pay Proposal versus the prior year.

Custom Comparator Group.

The Committee used the same custom comparator group in 2020 as was used in 2019. The custom comparator group data was among the factors considered for setting 2020 LTIP awards. The Committee determined to make no changes to this custom comparator group for purposes of 2020 compensation decisions because it believed the companies in the custom comparator group continued to represent the Company’s principal competitors for executive talent and reflect companies of similar size, global presence, business complexity and brand recognition. The following 23 companies were in the Company’s custom comparator group for 2020.

2020 Custom Comparator Group

 

     
   
Avery Dennison Corporation   Henkel AG & Company, KGaA
Brother Industries, Ltd.   Kimberly-Clark Corporation
The Clorox Company   Koninklijke Philips N.V.
Church & Dwight Co., Inc.   Mattel, Inc.
Colgate-Palmolive Company   Reckitt Benckiser Group plc
Coty Inc.   Groupe SEB SA
Domtar Corporation   Societe Bic SA
Dorel Industries Inc.   Spectrum Brands Holding, Inc.
Electrolux AB   Tupperware Brands Corporation
Fortune Brands Home & Security, Inc.   VF Corporation
General Mills, Inc.   Whirlpool Corporation
Hasbro, Inc.    
     

Compensation Survey Data.

The Company periodically obtains information on the compensation practices of companies in both the custom comparator group and general industry and compares the Company’s executive compensation components to that data. For 2020, the Company also used compensation information compiled from published compensation surveys, including surveys from Willis Towers Watson and Mercer. These surveys provide a larger pool of data for a more statistically relevant comparison of compensation levels and pay practices.

 

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In 2020, the Company used competitive practice and survey information as a reference for decisions regarding:

 

  l    

the mix of executive compensation that is annual and long-term;

 

  l    

the portion of total compensation that is equity or cash; and

 

  l    

levels of total direct compensation, both the total and for each element (salary, annual incentive opportunities and long-term incentive opportunities).

For purposes of evaluating relative TSR for PRSUs awarded under the LTIP in 2020, the Company uses only the following subset of the custom comparator group:

2020 TSR Comparator Group

 

     
   
Avery Dennison Corporation   Koninklijke Philips N.V.
Dorel Industries Inc.   Mattel, Inc.
Fortune Brands Home & Security Inc.   Societe BIC SA
Hasbro, Inc.   Spectrum Brands Holdings, Inc.
Henkel AG & Co. KGaA   Tupperware Brands
Kimberly-Clark Corporation   Whirlpool Corporation
     

The Company elected in 2020 to use this smaller subset of durables and consumables companies for measuring relative TSR because these 12 companies had greater similarities in terms of product portfolio, competition for consumer spend and exposure to cyclicality.

Setting Compensation Opportunity.

Each element of the compensation program complements the others and, together, is intended to achieve the Committee’s principal compensation objectives. When decisions about compensation for an executive officer are made, the impact on the total value of all these elements of compensation for the individual is considered. The Committee periodically reviews total direct compensation summary reports, which identify key elements of the compensation paid to or realizable by each executive officer. The Committee uses the summary reports to review the overall pay and benefit levels and provide additional perspective on how the executive compensation program meets the Company’s compensation objectives.

For executives, the Committee reviews competitive market data and establishes target total direct compensation opportunities (i.e., salary, annual cash incentive targets and annual long-term incentive targets) based on the following factors: individual performance, breadth of the executive’s responsibility, strategic importance of the position, internal pay equity, competitive market data, the circumstances surrounding the executive’s initial hiring or promotion to a position with increased responsibilities and the desire to promote executive retention. The Committee does not apply a formulaic approach to setting individual elements of the named executive officers’ compensation or their total compensation amounts.

The 2020 Summary Compensation Table shows the compensation of each named executive officer for the fiscal year ended December 31, 2020.

 

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Mix of Pay.

To reinforce the Company’s pay for performance philosophy, the Board, at the Committee’s recommendation, approved a total target direct compensation package for 2020 for Mr. Saligram that was 84% contingent on performance. In addition, in 2020, approximately 77% of total target direct compensation for other named executive officers (on average and excluding Mr. Hammer) was contingent upon performance. As a result, realized compensation fluctuates significantly with the Company’s financial results and share price. The Committee believes this approach motivates executives to consider the impact of their decisions on stockholder value.

2020 Target Compensation Mix and “Pay at Risk”

 

Current CEO        Other NEOs          
                 
LOGO  

l   84% of annualized total target direct compensation was at risk.

 

l   25% of annualized total target direct compensation was tied to achievement of annual incentive goals, and 59% was tied to achievement of share price appreciation and long-term incentive goals.

  LOGO  

l   77% of annualized total target direct compensation for the other NEOs (on average and excluding Mr. Hammer) was at risk.

 

 

l   21% of annualized total target direct compensation of the other NEOs (on average and excluding Mr. Hammer) was tied to achievement of annual incentive goals, and 56% was tied to achievement of share price appreciation and long-term incentive goals.

 

 

     

 

LOGO  Performance-Based

 

LOGO  Time-Based

 

                 
                 

Consideration of Individual Performance.

As part of the Company’s annual performance evaluation process, the CEO and each named executive officer establish that officer’s individual performance objectives for the coming year. These performance objectives are not specifically weighted or otherwise intended to be formulaic, but rather serve as the framework upon which the CEO evaluates the named executive officer’s overall performance. The CEO’s evaluation of a named executive officer’s performance relative to these objectives involves a high degree of judgment based on the CEO’s observations of, and interaction with, the executive throughout the year. No single performance objective is material to the CEO’s evaluation of the named executive officer’s performance; however, these performance goals, which reinforce alignment of Company and stockholder interests, are critical to the evaluation of each named executive officer. The CEO’s evaluation of individual performance is considered when he recommends to the Committee, in the case of other named executive officers, base salary amounts, annual incentive payout amounts and equity grants.

 

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At the beginning of the year, the Committee recommends to the independent members of the Board the CEO’s individual performance objectives. The Board’s method of evaluation of the CEO’s performance is substantially similar to that used by the CEO to evaluate the other executive officers. As such, the CEO’s performance objectives are not specifically weighted or otherwise intended to be formulaic, but rather serve as the framework upon which the Committee and the full Board evaluate the CEO’s performance. The evaluation of the CEO’s overall performance relative to these objectives involves a high degree of judgment. No single performance objective is material to the Board’s evaluation of the CEO’s performance; however, these performance goals, which reinforce alignment of Company and stockholder interests, are critical to the CEO evaluation.

The Committee and Board also may take into consideration the CEO’s performance when developing his base salary increase, if any, annual incentive target amounts and long-term incentive grant value. In 2020, Mr. Saligram continued to receive a base salary of $1.4 million and target bonus opportunity of 150% of base salary, and received an LTIP award with a target value of $5 million, comprised of 70% PRSUs and 30% stock options, each as set forth in the CEO Offer Letter, dated July 29, 2019, as filed with the U.S. Securities and Exchange Commission on a Current Report on Form 8-K dated July 30, 2019 (the “CEO Offer Letter”).

Key Elements of Executive Compensation.

Salary.

Salaries are paid to provide a predictable, fixed cost element of compensation to attract and retain qualified executives. Salaries provide executives with a base level of income and are set based on the factors outlined above in “Setting Compensation Opportunity.”

 

Named Executive Officer    2020 Base Salary
      

Ravichandra K. Saligram

   $1,400,000

Christopher H. Peterson

   $835,000

Bradford R. Turner

   $700,000

Laurel M. Hurd

   $650,000

Kristine Malkoski

   $600,000

David Hammer

   $508,000
      

In February 2020, the independent directors and the Committee did not approve any increases to the base salaries of Messrs. Saligram, Turner and Hammer and Ms. Hurd. Mr. Peterson was appointed President, Business Operations (in addition to his ongoing role as Chief Financial Officer) in February 2020 with an expanded role including oversight of Supply Chain, Procurement and Investor Relations. In connection with this promotion, his annual base salary rate was increased from $800,000 to $835,000.

 

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Annual Incentive Compensation.

The Company believes that the opportunity for annual cash incentives for each named executive officer serves the Company’s goals to:

 

  l    

motivate each of them to achieve Company performance goals and enhance stockholder value; and

 

  l    

allow the Company to retain their services because it provides each of them with the opportunity to receive a competitive cash incentive payment.

In February 2020, the Committee adopted annual incentive targets and performance goals for 2020 awards to be made under the Bonus Plan. The annual incentive program under the Bonus Plan is designed to reward annual performance that supports our business objectives and strategy. A cash incentive payout, measured as a percentage of the executive’s salary, is paid based on the extent to which the performance goals are achieved.

Performance Goals.

Listed below are the 2020 corporate performance goals (the “Corporate Performance Goals”) initially adopted under the Company’s Bonus Plan in February 2020 and their original relative weight for Messrs. Saligram, Peterson and Turner:

 

Corporate Performance Goals3    Weight      Rationale for the Measure  
                 

Adjusted Earnings Per Share

   33%        Incent profitable growth  

Adjusted Operating Cash Flow

   33%        Drive cash flow generation  

Core Sales Growth

   33%        Drive core sales growth  
                 

 

3  Adjusted earnings per share is the reported earnings per share, excluding the impact of charges which the Company normalizes for public reporting. Core sales growth is calculated on the same basis as the publicly reported metric. Adjusted operating cash flow is publicly reported operating cash flow, excluding the impact of cash costs related to the extinguishment of debt; debt and equity related financing costs; cash expenditures and tax payments associated with the acquisition or divestiture of a Business Unit or line of business and other unanticipated, extraordinary, non-budgeted cash expenditures as determined by the Committee. Adjusted operating cash flow includes disposal proceeds for ordinary course and restructuring related asset sales.

 

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Under the original Bonus Plan performance goals for 2020 applicable to Business Unit participants (the “Business Unit Performance Goals”), including Mses. Hurd and Malkoski and Mr. Hammer, the annual incentive opportunity was weighted at 25% based on the Corporate Performance Goals, and 75% based on achievement against targets set at the applicable Business Unit level for operating income, operating cash flow, and core sales growth, as shown below:

 

Business Unit Performance Goals4    Weight        Rationale for the Measure
                 

Business Unit Operating Income

     25%        Drive profitable growth

Business Unit Operating Cash Flow

     25%        Drive cash flow generation

Business Unit Core Sales Growth

     25%        Drive core sales growth

Corporate Performance Goals

     25%          
                 

In February 2020, the Committee originally set the following targets for corporate financial performance under the Bonus Plan, as shown in the table below.

Bonus Plan Performance Targets

 

Performance Goals    Target for
Payout at 100%
     Minimum
Threshold for
Payout
     Performance
for Maximum
Payout (200%)
     Actual
Performance
 
                                     

Adjusted Earnings Per Share

     $1.56        >$1.40        $1.72        $1.79  

Adjusted Operating Cash Flow ($ millions)

     $1,150        >$950        $1,350        $1,435  

Core Sales Growth

     -1%        -4%        2%        -1.1%  
                                     

2020 Amended Bonus Program.

After the Committee set its original 2020 full year annual incentive targets for the Bonus Plan, the COVID-19 pandemic took hold and had an unprecedented impact on the Company’s operations and prospects for the year. In late June, the Committee considered the impact of the COVID-19 pandemic on the Company’s operations and determined that it was in the best interests of the Company and stockholders to amend the performance criteria for 2020 annual incentive awards under the Bonus Plan, including the performance goals applicable to the Company’s named executive officers. The Committee looked at numerous factors in considering whether to amend the performance criteria for the 2020 annual incentive awards and determined that these amendments were necessary to support the retention of talent, to provide a continuing incentive for performance and to offer a reasonable payout opportunity for the efforts of executives, considering the heavy impact of the COVID-19 pandemic on the 2020 performance year, which acutely affected the Company’s various Business Units in different ways. The Committee also considered whether to refrain from amending goals and instead rely on the use of discretion to adjust payouts under the Bonus Plan following the completion of the performance period. On balance, the Committee, in consultation

 

4 Business Unit operating income is direct operating income for a Business Unit, calculated using budgeted foreign exchange rates and excluding corporate allocations and items excluded from the Company’s adjusted earnings per share calculation. Foreign currency transaction gains or losses are included in the calculation of Business Unit operating income. Business Unit operating cash flow and core sales growth are calculated in the same manner as the corresponding corporate metrics, except that the Business Unit metrics are calculated using budgeted foreign exchange rates.

 

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with its independent consultant, determined that adopting amended goals, as opposed to relying on the use of discretion, was critical to driving a pay-for-performance culture and ensuring that realistic and transparent incentives remained in place to motivate collaboration and performance across all businesses throughout the remainder of the year.

As further detailed in the Current Report on Form 8-K filed with the SEC on July 2, 2020 and described below, the Amended Bonus Program included changes to the Corporate Performance Goals and Business Unit Performance Goals, including:

 

  l    

the use of Company-wide financial targets for both corporate and Business Unit participants (rather than financial targets measuring financial performance within his or her Business Unit);

 

  l    

the addition of new full year operations performance goals at both the corporate and Business Unit levels to drive strategic operational improvements, and

 

  l    

changes in the relative weighting percentages of the goals.

We refer to the Bonus Plan framework and goals for 2020, as modified in June 2020, as the “Amended Bonus Program.”

Under the Amended Bonus Program, the time period for measuring and evaluating performance on adjusted earnings per share, core sales growth and adjusted operating cash flow against the Corporate Performance Goals was split into first and second quarter (or first six months, in the case of adjusted operating cash flow) (“First Half”) 2020 performance and third and fourth quarter (or cumulative full year, in the case of adjusted operating cash flow) (“Second Half”) 2020 performance. First Half targets were based on performance against the original budgets for 2020, and Second Half targets were based on performance against the Company’s mid-year internal forecasts (updated after the onset of the COVID-19 pandemic) (collectively, the “Corporate Financial Performance Metrics”). In addition, the Business Unit Performance Goals were adjusted to align with those of the Company’s corporate participants, such that, in each case, 80% of payout was tied to achievement of the Corporate Financial Performance Metrics. The Amended Bonus Program continued to use achievement of specific adjusted operating cash flow, adjusted earnings per share and core sales growth levels as financial performance goals. However, the relative weighting of those financial performance goals was adjusted, the metrics for measuring those financial performance goals were adjusted, and, for the Company’s Business Unit leadership, those financial performance goals which originally related to a mix of corporate and Business Unit financial performance objectives shifted to relate solely to corporate financial performance objectives. The Amended Bonus Program also introduced certain operational performance objectives for all participants at the corporate and Business Unit levels.

To emphasize the importance of continuing to execute on the Company’s strategic operational objectives, as part of the Amended Bonus Program, the Committee added new full-year operations performance goals, at the corporate and Business Unit levels, for the reduction of total SKUs and active SKUs (collectively, the “SKU Reduction Goals”) and the achievement of annual COGS and indirect procurement savings goals under the FUEL Initiative (the “FUEL Productivity Improvements” and, collectively with SKU Reduction Goals, the “Operations Goals”). For each of the NEOs, an aggregate 20% of payout was tied to achievement of the Operations Goals.

 

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The table below sets forth the final Corporate Performance Goals and weightings, pursuant to which the 2020 cash bonuses for Messrs. Saligram, Peterson and Turner were actually paid.

 

    2020 Final Corporate Performance Goals    Weight      
          

    First Half 2020 Corporate Financial Performance Metrics

     30%      

    Second Half 2020 Corporate Financial Performance Metrics

     50%      

    Full Year Total SKU Reduction for the total Company

     5%      

    Full Year Active SKU Reduction for the total Company

     5%      

    Full Year FUEL Productivity Improvements for the total Company

     10%      
          

The table below sets forth the final Business Unit Performance Goals and weightings pursuant to which Mses. Hurd and Malkoski and Mr. Hammer were actually paid.

 

    2020 Final Business Unit Performance Goals    Weight      
          

    First Half 2020 Corporate Financial Performance Metrics

     30%      

    Second Half 2020 Corporate Financial Performance Metrics

     50%      

    Full Year Total SKU Reduction for respective Business Unit

     5%      

    Full Year Active SKU Reduction for respective Business Unit

     5%      

    Full Year FUEL Productivity Improvements for respective Business Unit

     10%      
          

Under the 2020 Bonus Plan awards as initially established, a payout between 0% and 200% would have been determined by the Committee based on achievement of specified performance criteria for each applicable 2020 annual incentive award. However, in connection with the above-referenced amendments of performance criteria for the 2020 annual incentive awards, the Committee reduced the maximum payout percentage from 200% to 125% of any named executive officer’s 2020 target bonus award.

The Committee further specified that no payment of a 2020 annual incentive award to any named executive officer who is a corporate participant would exceed 100% of the individual’s 2020 target bonus award if he would have earned less than a 100% payout under the applicable original performance goals previously adopted for 2020 bonus awards. Similarly, no payment of a 2020 annual incentive to a named executive officer who is a Business Unit participant would exceed 100% of the individual’s 2020 target bonus award if the payout would have been less than 100% according to the targets for his or her Business Unit’s operating income, core sales growth and operating cash flow previously adopted for 2020 bonus awards (collectively, the Multiplier Cap).

The Amended Bonus Program also stated that, for named executive officers in a Business Unit whose actual performance, measured at year-end, would have resulted in a payout above 100% according to the Business Unit’s original targets under the Bonus Plan for operating income, core sales growth and operating cash flow, as determined by the Committee, the annual incentive award payout would be increased by multiplying the payout percentage applicable to the Corporate Financial Performance Metrics by the total payout percentage calculated under the relevant original Business Unit targets based on actual performance (the “Multiplier Adjustment”). This Multiplier Adjustment mechanism did not apply to corporate Bonus Plan participants, which included Messrs. Saligram, Peterson and Turner.

 

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The 2020 performance targets, after giving effect to the amendments, and actual performance against these targets, are summarized below:

2020 Amended Bonus Program - Performance Targets

 

Goal Category  

Target for
Payout at

100%

    Minimum
Threshold for
Payout
    Performance
for
Maximum
Payout
    Actual
Performance
 
                                 

Corporate Performance Goals

 

First Half Corporate Financial Performance Metrics (1)

       

Adjusted Earnings Per Share - 1Q 2020

    $0.08       >$0.02        $0.14        $0.09  

Adjusted Earnings Per Share - 2Q 2020

    $0.42       >$0.36        $0.48        $0.30  

Adjusted Operating Cash Flow - 1Q 2020

    -$122.7 million       >-$222.7 million       -$22.7 million        $25.4 million  

Adjusted Operating Cash Flow - 2Q 2020 (First Six Mos.)

    -$11.6 million       >-$111.6 million        $88.4 million        $148.7 million  

Core Sales Growth - 1Q 2020

    -3.2%       >-6.2%       -0.2%       -5.1%  

Core Sales Growth - 2Q 2020

    -3.2%       >-6.2%       -0.2%       -12.6%  
       

Second Half Corporate Financial Performance Metrics (2)(6)

       

Adjusted Earnings Per Share - 2H 2020

    $0.98       >$0.84        $1.05        $1.37  

Adjusted Operating Cash Flow - Full Year 2020

    $1.025 billion       >$800 million        $1.15 billion        $1.435 billion  

Core Sales Growth - 2H 2020

    -2%       >-5.5%       -0.3%       6.0%  
       

Operations Goals

 

(Messrs. Saligram, Peterson and Turner)

       

Annual FUEL Productivity Improvements (3)(6)

    $205 million       >$155 million        $225 million        $279 million  

Total SKUs reduced (Annual) (4)(6)

    14,000       8,000       24,000       34,298  

Active SKUs reduced (Annual) (4)(6)

    7,000       1,000       17,000       22,879  
   
       
   

Food Business Unit Operations Goals

 

(Ms. Malkoski)

                               

Annual FUEL Productivity Improvements (3)(6)

    $22 million         $17 million        $24 million        $32 million  

Total SKUs reduced (Annual) (4)(6)

    542       242       741       941  

Active SKUs reduced (Annual) (4)(6)

    476       111       776       1,071  
   
       
   

Writing and Baby Business Unit Operations Goals (5)

 

(Ms. Hurd)

                               

Annual FUEL Productivity Improvements (Writing) (3)(6)

    $33 million         $28 million        $37 million        $40 million  

Annual FUEL Productivity Improvements (Baby) (3)(6)

    $14 million         $12 million        $18 million        $15 million  

Total SKUs reduced (Writing) (4)(6)

    5,154       4,346       6,232       5,704  

Total SKU reduced (Baby) (4)(6)

    1,642       987       2,692       2,247  

Active SKU reduced (Writing) (4)(6)

    1,143       187       1,974       2,053  

Active SKU reduced (Baby) (4)(6)

    394             1,269       1,495  
   
       
   

Appliances & Cookware Business Unit Operations Goals

 

(Mr. Hammer)

                               

Annual FUEL Productivity Improvements (3)(6)

    $28 million         $21 million        $31 million        $42 million  

Total SKUs reduced (Annual) (4)(6)

    3,001       2,401       4,001       4,228  

Active SKUs reduced (Annual) (4)(6)

    2,281       1,577       3,681       3,740  
   

 

(1)

Payout for achievement against the First Half Corporate Financial Performance Metrics was based on the average payout for first quarter and second quarter metrics (or six-month end result in the

 

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case of adjusted operating cash flow) with each of the metrics equally weighted. Maximum payout percentage for each component was 200%.

 

(2)

Payout for achievement against the Second Half Corporate Financial Performance Metrics was based on the six-month end result (or twelve-month end result in the case of adjusted operating cash flow) with each of the three metrics equally weighted. Maximum payout percentage for each component was 125%.

 

(3)

The FUEL Initiative refers to annual savings commitments made as part of a Company-wide program focused on margin enhancement. FUEL Productivity Improvements were defined as the sum of gross productivity and indirect procurement savings. Gross productivity savings were based on year over year savings in COGS that are directly related to a project, activity, or systemic improvement. Indirect procurement savings were based on annual savings in indirect spend (materials and services not related to cost of goods) resulting from negotiation, vendor changes, or other procurement influenced savings, excluding the impact of volume and overall spend levels. Maximum payout percentage was 125%.

 

(4)

Total SKU Reduction was defined as the reduction in the count of both active SKUs and SKUS which are obsolete but continue to carry inventory. Active SKU reduction was defined as the reduction in the count of active SKUs only. A count of total SKUs at the end of year 2019 was compared to a final count as of the end of 2020 to determine the reduction. SKU calculations excluded Technical Apparel SKUs, auxiliary SKUs for the Yankee Candle flagship store and Mapa Professional SKUs. Maximum payout percentage was 125%.

 

(5)

For Ms. Hurd, Writing and Baby results were weighted at 50% and 50%, respectively, in calculating Business Unit performance against the performance goals.

 

(6)

Under the Amended Bonus Program, if actual performance would result in a payout of less than 25% under any of the Second Half Corporate Financial Metrics or any of the Operations Goals, then the payout for such component would be deemed to be 0% for purposes of calculating final annual incentive award payout.

The maximum payout percentage for each of the Corporate Financial Metrics (in the aggregate) or any of the Operations Goals was reduced in the Amended Bonus Program from 200% to 125% of the portion of the target cash incentive opportunity weighted toward each of those sets of goals, respectively. If a performance goal is met at the target level, as determined by the Committee, the target amount is paid for that goal. Performance above the target results in payment of a higher percentage of salary up to the pre-established cap. Performance below the target results in a lower bonus payment for that goal if a minimum threshold is met, or no payment if the minimum threshold is not met. The 2020 awards were also subject to further adjustment based on Business Unit performance levels as described above. The Committee (or independent directors, in the case of the CEO) also has the discretion to increase or decrease bonus payouts to named executive officers based on individual performance, quality of results or other factors they deem relevant.

Actual Payout Under Amended Bonus Program.

If the original Corporate Performance Goals and original performance targets under the Bonus Plan had remained in place, the 2020 bonus payout percentage would have been 165% for Messrs. Saligram, Peterson and Turner, given the strength of the Company’s ultimate performance, particularly over the second half of the year. Instead, due to the mid-year amendment, these named executive officers each realized lower aggregate bonus payout percentages of 115% under the Amended Bonus Program, as described more fully below.

 

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Actual performance as compared to the targets for the original Corporate Performance Goals is shown in the table above titled “Bonus Plan Performance Targets.”

Actual payout percentages applicable to the named executive officers under the Amended Bonus Program, expressed as a percentage of target payout, are shown in the tables below:

2020 Corporate Payout Percentages

 

Named Executive Officer     

Corporate Financial
Performance

Metrics Payout

%

    

Operations
Goals Payout

%

    

Final Bonus
Payout

%

                                        

Ravichandra K. Saligram

         112          125          115

Christopher H. Peterson

         112          125          115

Bradford R. Turner

         112          125          115
                                        

In 2020, actual performance on the Corporate Financial Performance Metrics resulted in a 112% payout for the 80% of the bonuses tied to these metrics for all named executive officers. For corporate participants, performance against the Operations Goals exceeded the maximum performance level, resulting in a 125% payout for this 20% component of their annual incentive opportunities. As a result, the total payout percentage under the Amended Bonus Program for Messrs. Saligram, Peterson and Turner was 115%.

2020 Business Unit Payout Percentages

 

NEO   Business Unit    Corporate
Financial
Performance
Metrics
Payout %
  

Operations
Goals
Payout

%

  

Payout
Calculation

%

  

Multiplier Cap/
Adjustment

%

   Final
Bonus
Payout
%
                                                            

Kristine K. Malkoski

  Food        112        125        115        10        125

David M. Hammer

  Appliances & Cookware        112        125        115        10        125

Laurel M. Hurd

  Baby        112        102        110        2        112
    Writing        112        118        113        -13        100
     Total:                                    106
                                                            

For Ms. Malkoski and Mr. Hammer, their respective Business Unit performances against Operations Goals resulted in 125% payouts for each with respect to this 20% of component of their bonuses. This component, together with the 112% payout measured pursuant to the Corporate Financial Performance Metrics, yielded a 115% total payout calculation for each of these named executive officers. Since the actual performance of their respective Business Units relative to the applicable original 2020 Business Unit targets for operating income, core sales growth and operating cash flow would have resulted in a 200% payout in the case of Ms. Malkoski and a 181% payout in the case of Mr. Hammer, the Multiplier Adjustment mechanism applied to each of their bonus calculations. Therefore, the final bonus payout percentages for Ms. Malkoski and Mr. Hammer were adjusted to the maximum payout level of 125% each.

As Ms. Hurd was responsible for two Business Units, her payout was based on the average payout for the Baby and Writing Business Units. For Baby, performance relative to the Operations Goals resulted in 102% payout. This component, together with the 112% payout measured against the Corporate Financial Performance Metrics, yielded a 110% payout calculation. In addition, since Baby’s performance would have resulted in a 102% payout under the original Bonus Plan goals for Business Unit operating income, core sales growth and operating cash flow, the Multiplier Adjustment applied, bringing the final payout calculation for Baby to 112%. For Writing, performance relative to the Operations Goals resulted in a 118% payout. This

 

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component, together with the 112% payout measured against the Corporate Financial Performance Metrics, yielded a 113% total payout calculation. However, the performance of the Writing Business Unit, which was heavily impacted by school and office closures during 2020, would have been below the original Business Unit targets for a 100% payout, thus the Multiplier Cap was applied to the Writing Business Unit payout, limiting it to 100% under the Amended Bonus Program. As a result, Ms. Hurd’s combined final bonus payout percentage was 106%.

The table below shows actual bonus payouts for 2020 to the named executive officers and 2020 target payouts as a percentage of their earned base salaries.

 

    Name    2020 Actual Bonus
Payment
   Target as % of
Earned Base Salary
   Actual Earned in
2020 as % of Target    
                                  

    Ravichandra K. Saligram

       $2,415,000        150%          115%      

    Christopher Peterson*

       $1,146,263        120%          115%      

    Bradford R. Turner

       $805,000        100%          115%      

    Laurel M. Hurd

       $515,775        75%          106%      

    Kristine K. Malkoski*

       $403,125        60%          125%      

    David M. Hammer*

       $261,938        55%          125%      
                                  

 

* Actual payout is based on base salary actually earned in 2020.

Additional information appears in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” columns of the “2020 Grants of Plan-Based Awards” table.

Mr. Peterson’s target annual incentive award for 2020 was $1,002,000 based on 120% of his base salary. His target percentage increased from 100% to 120% of base salary in light of his promotion in February 2020.

Other than as described above, none of the named executive officers received target annual incentive percentage increases in 2020. There were no discretionary adjustments to any named executive officer’s bonus payout for 2020.

Ms. Malkoski joined the Company on February 17, 2020. Her annualized target incentive percentage for 2020 was calculated on a prorated basis. Her proration was achieved by applying the target annual incentive percentage to actual base earnings for the calendar year.

Mr. Hammer left the Company on September 30, 2020. He was paid a pro-rated bonus based on the amount of base salary actually earned in 2020.

Long-Term Incentive Compensation.

Long-term incentive awards granted pursuant to the Newell Rubbermaid Inc. 2013 Incentive Plan (as amended, the “2013 Incentive Plan”) are designed to motivate executives to increase stockholder value over the long term and align the interests of executives with those of stockholders. Under the annual LTIP, the Committee sets a target award value for RSUs and stock options to be granted to each executive based on the breadth of the executive’s responsibility, strategic importance of the position, competitive data and internal pay equity.

The CEO’s recommendation to the Committee for the other named executive officers may include an adjustment to the target LTIP opportunity based upon the CEO’s evaluation of the named executive officer’s performance or other factors deemed relevant by the Committee. Similarly, when setting the CEO’s equity

 

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compensation, the independent members of the Board determine the CEO’s LTIP grant value based upon the Board’s evaluation of the CEO’s performance and other relevant factors.

Each of the named executive officers received LTIP awards with a value equal to his or her annual target in 2020. In connection with her 2019 promotion to Segment President, Learning and Development, Ms. Hurd’s target LTIP percentage was increased from 100% to 175% of base salary for the 2020 LTIP grant. Pursuant to the CEO Offer Letter, Mr. Saligram’s 2020 target LTIP award value was set at $5,000,000.

2020 LTIP Awards.

The LTIP target values, PRSU grants and stock option awards for each of the named executive officers receiving LTIP awards in 2020 were as follows:

 

Name      LTIP Award Value
at Target
($)
       LTIP PRSUs        LTIP Stock Options  
                                  

Mr. Saligram

       $5,000,000          174,825          274,752  

Mr. Peterson

       $3,131,250          109,484          172,063  

Mr. Turner

       $1,750,000          61,188          96,163  

Ms. Hurd

       $1,137,500          39,772          62,506  

Ms. Malkoski

       $750,000          26,223          41,212  

Mr. Hammer

       $508,000          17,762          27,914  
                                  

The Committee (or in the case of the Chief Executive Officer, the independent members of the Board) changed the mix of long-term incentive compensation in 2020 to include stock options as a new mechanism to link named executive officer compensation to Company performance. For each of the named executive officers, 70% of the 2020 LTIP grant was provided in PRSUs that generally vest on the third anniversary of the date of grant, subject to the Company’s free cash flow performance and core sales growth performance over a three year period, and 30% was provided in stock options that generally vest ratably in one-third increments on each of the first, second and third anniversaries of the date of the grant, subject to continuous employment, and expire on the tenth anniversary of the grant date. The exercise price per share of the stock options equals $20.02 (the closing price of a share of the Company’s common stock on the date of grant). The number of PRSUs granted was derived based on the closing price of the Company’s common stock on February 18, 2020 ($20.02), and the number of stock options was calculated in accordance with ASC 718.

The PRSUs awarded may vest from 0% to 200% depending upon achievement of equally weighted performance goals for free cash flow and annual core sales growth5. Free cash flow6 performance will be measured on a cumulative basis over a three-year performance period between January 1, 2020 and

 

5 “Annual core sales growth” is defined as the Company’s core sales growth performance, calculated on the same basis as core sales growth publicly reported by the Company, and excludes the impact of planned and completed divestitures, discontinued operations, acquisitions, retail store openings and closures, foreign currency exchange, and all other items excluded from publicly reported core sales growth.

6 For the purposes of the 2020 LTIP, “free cash flow” was defined as operating cash flow for the total Company, less capital expenditures, excluding: the impact of all cash costs related to the extinguishment of debt; debt and equity related financing costs; cash tax payments associated with the sale of a Business Unit or line of business; cash expenditures associated with the acquisition or divestiture of Business Units or lines of business; and other significant cash costs that have had or are likely to have a significant impact on free cash flow for the period in which the item is recognized, are not indicative of the Company’s core operating results and affect the comparability of underlying results from period to period, as determined by the Committee. Free cash flow includes disposal proceeds for ordinary course and restructuring related asset sales.

 

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December 31, 2022. With respect to annual core sales growth, the total payout percentage applicable to the three-year performance period between January 1, 2020 and December 31, 2022 was initially set as the average of annual payout percentages over a three-year performance period.

As further described on the Current Report on Form 8-K filed with the SEC on August 12, 2020, the Committee subsequently amended the weighting of the payout percentages for annual core sales growth to be calculated on the following basis: 20% for 2020 and 40% for each of 2021 and 2022. The amendment was made in consideration of the unavoidable impact of the COVID-19 pandemic on the current year results, which impact was not foreseen at the time of grant. In making this amendment, the Committee assessed various criteria and determined that revising the percentage weighting was an appropriate way to more closely align the goals in light of the impact of the pandemic, to provide a continued incentive for performance and to support the continued retention of executives by offering a reasonable payout opportunity under the three-year awards.

Following the determination of the extent to which the Company has achieved its performance goals, a positive or negative adjustment to the payout will be made based upon a comparison of the Company’s TSR relative to a pre-determined set of comparator group companies listed above in the section titled “Compensation Survey Data,” as set forth in the 2020 LTIP Terms and Conditions (the “TSR Comparator Group”) for the three-year performance period. If the Company’s ranking is in the bottom quartile of the TSR Comparator Group (including the Company) at the end of the performance period, the payout percentage will be multiplied by 75% to determine the total payout percentage of the award, and the total payout percentage for the award will be no higher than target (100%), even if the calculation results in a higher payout. If the Company’s ranking is in the top quartile of the TSR Comparator Group (including the Company) at the end of the performance period, the payout percentage will be multiplied by 125%. For a ranking in the second or third quartile, no TSR-related adjustment will be made. The total payout percentage for the award will not exceed 200% of the target.

We do not disclose the specific, forward-looking financial goals that we established for PRSUs granted in 2020 (including Ms. Malkoski’s sign-on award described below) in this proxy statement because (1) these goals relate to executive compensation to be earned and/or paid in future years and do not affect a fair understanding of the named executive officers’ compensation for 2020 and (2) we believe that disclosure of such goals while the applicable performance period is ongoing would cause us competitive harm. However, we expect to disclose such goals in future proxy statements once the applicable performance periods have ended as part of our discussion and analysis about the amounts earned by the named executive officers under these awards. In setting the applicable target levels, the Committee considered how achievement of the performance goals could be impacted by events expected to occur in the coming years, and how likely it will be for the Company to achieve the goals. We believe that (where applicable) the threshold goals have been established at levels that should be appropriately difficult to attain, and that the target goals will require considerable and increasing collective effort on the part of our employees, including our named executive officers, to achieve.

Prior Year LTIP Awards.

For PRSUs granted pursuant to the LTIP in 2018, the sole performance metric was relative TSR with respect to the applicable custom comparator group established by the Company, and the payout ranges from 200% (if the Company is first in the three-year relative TSR rank) to 0% (if the Company is last in the three-year relative TSR rank), with interpolation being used for relative TSR rankings between first and last. In addition, no payout would have been earned if the Company’s three-year relative TSR ranking fell in the bottom quartile of the applicable custom comparator group for the performance period. From 2016 to 2018, the Committee established performance metrics for PRSUs that were based 100% on relative TSR due to

 

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the complexities related to the 2016 acquisition and subsequent integration of Jarden, and related portfolio transformation, and establishing long term performance metrics for the combined enterprise.

The applicable custom comparator group for the 2018 LTIP Awards was as follows:

2018 Comparator Group

 

 

 

 

3M Company    General Mills
Avery Dennison Corporation    Henkel AG
Brother Industries    Kraft Heinz
The Clorox Company    Kimberly-Clark Corporation
Colgate-Palmolive Company    Mattel, Inc.
Dorel Industries Inc.    Mitsubishi Electric
Ecolab Inc.    Societe Bic SA
Electrolux AB    Tupperware Brands
Emerson Electric    VF Corporation
Estee Lauder    Whirlpool Corporation
Fortune Brands     

 

 

 

The Company’s performance against the 2018 LTIP PRSU metric, as calculated under the LTIP for the performance period beginning in January 2018 and ending December 31, 2020, is summarized below:

2018 LTIP Performance Metrics

 

 

Performance Goals   Weight     Target for
Payout at 100%
    Minimum
Threshold
for Payout
    Performance
for Maximum
Payout (200%)
    Actual
Performance
 
                                         

  Relative TSR Performance

    100%       Ranking of 10th       >Bottom Quartile       Ranking of 1st       57%  

 

 

 

Based on the Company’s relative TSR during the applicable performance period (16th out of 22 TSR comparators, including the Company), the PRSUs granted to Mr. Turner in 2018 vested at 57%. None of the other named executive officers received 2018 LTIP PRSU grants.

In 2019, to enhance focus on cash flow generation and working capital improvement, the Committee established metrics for the PRSUs that were based 50% on relative TSR (based on the payout ranges described above) and 50% on cumulative free cash flow7, over a three-year performance period, with payout ranging from 0 to 200% depending upon achievement of these equally weighted performance goals.

 

7 In 2019, for the purposes of the LTIP, the term “free cash flow” was defined as operating cash flow for the total Company, less capital expenditures, excluding: the impact of all cash costs related to the extinguishment of debt; debt and equity related financing costs; cash tax payments associated with the sale of a Business Unit or line of business; cash expenditures associated with the acquisition or divestiture of Business Units or lines of business; and other significant cash costs that have had or are likely to have a significant impact on free cash flow for the period in which the item is recognized, are not indicative of the Company’s core operating results and affect the comparability of underlying results from period to period, as determined by the Committee. Free cash flow includes disposal proceeds for ordinary course and restructuring related asset sales. Free cash flow targets for PRSUs under the 2019 LTIP were initially set in February 2019 (as disclosed on a Current Report on Form 8-K filed with the SEC on February 12, 2019) and, pursuant to the terms of the 2019 LTIP and the related RSU agreements, were subsequently adjusted to reflect changes relative to the assumed timing of the 2019 divestitures of the Company’s Rexair, Process Solutions and USPC businesses, as well as the Company’s decision to retain the Mapa/Spontex and Commercial businesses.

 

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Holders of RSUs do not receive dividend equivalents at the time dividends are paid. Rather, all such dividend equivalents will be accrued and paid only at the time and to the extent that the RSUs actually vest.

In addition to the annual grants under the LTIP, from time to time, RSUs and stock options may be granted to named executive officers in circumstances such as a promotion, new hire, or for retention purposes. Please see the subsection below titled “Ms. Malkoski’s Sign-On Award” and the section titled “Prior Year Special Awards” for further information.

Compensation Arrangements and Other Awards.

Mr. Saligram’s Compensation Arrangement.

In 2019, as inducement to join the Company and in connection with his appointment as President and CEO, Mr. Saligram and the Company entered into the compensation arrangement set forth in the CEO Offer Letter, pursuant to which Mr. Saligram was entitled to receive the following compensation and benefits:

 

  l    

An annual base salary of $1.4 million and target bonus opportunity of 150% of base salary (with a maximum bonus payout of 300% of annual base salary) under the Bonus Plan;

 

  l    

A cash sign-on bonus of $600,000, which was paid in 2019;

 

  l    

A sign-on stock option award covering 1,333,333 shares, that was granted on his start date with the Company and generally expires on the tenth anniversary of the grant date, subject to continued employment with the Company, and has an exercise price equal to the closing market price of the Company’s common stock on the grant date (the “Employment Transition Award”);

 

  l    

An annual LTIP award, commencing in 2020, with a target value of $5,000,000. His 2020 LTIP Award consisted of 70% PRSUs and 30% stock options. The target value of LTIP awards for years after 2020 will remain $5,000,000; however, the target value of actual grants may vary from this target based on Company performance and/or significant changes in the relevant market for compensation; and

 

  l    

Participation in the Company’s U.S. benefits program, the Company’s Supplemental Employee Savings Plan and its Flexible Perquisites Program, under which Mr. Saligram will receive an annual cash allowance of $36,000 per year that may be used for such items as car, insurance, automobile maintenance, income tax preparation services, estate planning services and financial planning services.

Vesting of the Employment Transition Award occurs ratably upon the eighteen month, two year and three year anniversaries of the grant date, subject to the attainment of a performance condition that, during any 30-day period between the date that is eighteen calendar months following the grant date and the third anniversary of the grant date of the Employment Transition Award, the average of the Company’s closing stock price must exceed 125% of the closing stock price on July 29, 2019. If the performance condition has not been satisfied as of any of the vesting dates, then the vesting of any portion of the Employment Transition Award otherwise scheduled for such vesting date will be deferred until the fifth business day following the date, if any, on which the performance condition has been satisfied. The Employment Transition Award also provides for vesting in the event of a termination of Mr. Saligram’s employment by the Company without Good Cause, or by Mr. Saligram for Good Reason, as such terms are defined in the Company’s 2013 Incentive Plan, in each case subject to attainment of the applicable performance condition

 

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(with the performance condition, for this purpose only, measured as of any 30-day period falling between the grant date and the third anniversary of the grant date).

If Mr. Saligram retires from the Company, or is terminated involuntarily without Good Cause (as defined in the applicable award agreement) in either case after three years of continuous service with the Company, he will be entitled to receive (subject to his execution of a separation agreement and general release) (i) a partial pro-rated bonus under the Bonus Plan for the year of termination based upon the number of days worked in the year of termination, on the basis of actual corporate performance levels as determined by the Board; (ii) continued vesting of previously granted RSU and stock option awards (subject to the satisfaction of any applicable performance conditions); and (iii) a three year period following termination or vesting (whichever is later), not to exceed the remaining term of the option, during which his options will remain exercisable.

Mr. Saligram participates in the Newell Brands Executive Severance Plan (the “Severance Plan”) and is entitled to the severance benefits described therein. Pursuant to the terms of the CEO Offer Letter, Mr. Saligram’s participation in the Severance Plan will end after three years of continuous service with the Company (subject to a 90-day notice requirement for termination without cause thereafter) and his benefits thereunder will not be adversely affected by any amendment thereof within the first three years of his continuous service to the Company.

Mr. Peterson’s Offer Letter.

After Michael B. Polk’s departure on June 28, 2019, Mr. Peterson was appointed Interim CEO as the Board continued its search for a permanent CEO. In connection with his appointment as Interim CEO, Mr. Peterson and the Company entered into a compensation arrangement dated June 25, 2019 (the “Interim CEO Offer Letter”), as filed on a Current Report on Form 8-K filed with the SEC on June 26, 2019. The Interim CEO Offer Letter supplemented the compensation and benefits described in Mr. Peterson’s Compensation Arrangement, dated November 21, 2018, filed with the SEC with the Company’s 2018 Annual Report on Form 10-K on March 4, 2019 (the “2018 Compensation Arrangement”).

Under the Interim CEO Offer Letter, if Mr. Peterson would have terminated his employment during the time period between July 1, 2020 and August 31, 2020, upon at least sixty days written notice to the Company, he would have been entitled to receive (i) a pro-rated annual incentive payment under the Bonus Plan based upon eligible earnings for the amount of days worked in 2020, to be paid out by March 15, 2021 on the basis of actual corporate performance levels as determined by the Board; (ii) a pro-rata portion of previously granted RSU awards (other than the Interim Service Award described below) that would vest during the three year period after his termination (subject to the satisfaction of any applicable performance conditions), to ensure appropriate retention and compensation for the period worked; and (iii) a waiver of any repayment obligations under the Company’s Executive Relocation Program. Mr. Peterson had the option to extend the applicable time period and notice dates to terminate employment (described above) by an additional six months in each case, upon providing written notice prior to June 30, 2020, and Mr. Peterson exercised this option in 2020 to extend this benefit through year-end.

In December 2020, the Committee and Mr. Peterson amended the Interim CEO Offer Letter. The Amendment (the “Amendment” and, together with the Interim CEO Offer Letter and the 2018 Compensation Arrangement, the “Peterson Compensation Arrangement”) to the Interim CEO Offer Letter, as filed on Current Report on Form 8-K dated December 30, 2020, provides that if, upon at least sixty days written notice to the Company, Mr. Peterson voluntarily terminates his employment on a date that falls between March 2, 2022 and April 30, 2022, he will be entitled to receive (i) a 2021 bonus under the Bonus Plan, to be paid out by March 15, 2022 on the basis of actual corporate performance levels as determined by the Board;

 

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(ii) vesting of a pro-rata portion of his PRSU awards granted in February 2020 (the “2020 Peterson RSU Award”) which would have otherwise vested after his termination date, as if he remained employed through the applicable vesting date (subject to the satisfaction of any applicable performance conditions); and (iii) a waiver of any repayment obligations under the Company’s Executive Relocation Program.

The portion of the 2020 Peterson RSU Award which shall be permitted to vest shall be calculated on a pro rata basis to reflect the number of days between the grant date and his termination date relative to the total number of days constituting the vesting period of such award. If he voluntarily terminates employment with the Company at any time, any unvested portion of all RSU or stock option awards other than the 2020 Peterson RSU Award shall be forfeited, unless provided otherwise in the applicable award agreement or his Employment Security Agreement

In order to receive the foregoing benefits, Mr. Peterson will be required to sign a reasonable separation agreement (including confidentiality, non-solicitation and non-competition obligations) in the form substantially similar to that required of similarly situated employees of the Company.

Ms. Malkoski’s Sign-On Award.

In connection with the commencement of her employment with the Company in February 2020, the Committee awarded Ms. Malkoski 20,000 PRSUs in February 2020. The award vests upon the third anniversary of the grant date if Ms. Malkoski remains in the continuous employment with the Company until such vesting date, and targets for each of the following performance criteria are satisfied:

 

  l    

Average annual core sales growth for the Food Business Unit (the “Food Business Unit”) for the three-year period ending December 31, 2022; and

 

  l    

Average annual direct operating margin increase for the Food Business Unit for the three-year period ending December 31, 2022.

Mr. Hammer’s Departure.

Mr. Hammer left the Company on September 30, 2020 as part of a leadership change in the Appliances & Cookware Business Unit. Pursuant to the terms of the Severance Plan and as reflected in his Separation Agreement, Mr. Hammer received the following:

 

  l    

a lump sum payment of $787,400 representing one year of pay at his 2020 base salary rate and his 2020 annual incentive award at a 100% payout level;

 

  l    

a payment for unused vacation time of $29,307;

 

  l    

reimbursement for outplacement services of approximately $25,000 plus $8,046 as a tax reimbursement payment thereon;

 

  l    

a payment of $2,658 for continuation of health and welfare benefits for him and his dependents for a specified period; and

 

  l    

a pro-rated portion of his actual 2020 earned annual bonus payment of $261,938 under the Amended Bonus Program.

 

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All of Mr. Hammer’s vested and unvested stock options and all unvested RSUs or other equity awards were forfeited as of September 30, 2020, except those scheduled to vest in February 2021. For a detailed summary, please see the section titled “Outstanding Equity Awards at Fiscal Year End.” In exchange for the above referenced payments and benefits, Mr. Hammer agreed to a customary release and restrictive covenants.

Prior Year Special Awards.

In July 2020, Ms. Hurd and Messrs. Hammer and Turner received their final installments of $400,000, $400,000 and $350,000, respectively, of retention bonuses that were awarded to retain key functional and operational executives during a time of significant volatility and change in 2018.

Mr. Turner received a payout of 8,858 shares in May 2020 upon the vesting of the second tranche of PRSUs pursuant to a 2018 special RSU award with a grant date value of $700,000 based on the achievement of certain performance conditions. The third tranche for the remainder of the award is scheduled to vest in May 2021. To earn the second and third tranches of the award, Mr. Turner was required to oversee completion by December 31, 2019 of the Company’s previously announced divestiture program8. The Committee has concluded that this performance condition was achieved.

In connection with his recruitment as Chief Financial Officer in December 2018, the Committee approved a sign-on inducement award to Mr. Peterson of time-based RSUs with a value of $2.7 million based on the Company’s closing stock price on the date of grant. Half of the award vested in December 2019 and the other half vested on the second anniversary of the award date in December 2020.

Pursuant to the Peterson Compensation Arrangement and in connection with his prior service as interim Chief Executive Officer of the Company, in June 2019, Mr. Peterson received an award of PRSUs with a value of $1.75 million based on the closing price of the Company’s common stock on the date of grant (the “Interim Service Award”). In general, vesting of this award was subject to the Company’s generation of an adjusted operating cash flow9 of $675 million or more during the performance period commencing June 1, 2019 and ending June 30, 2020, as approved by the Board, and Mr. Peterson’s continued employment through each of the vesting dates. The Company generated adjusted operating cash flow, as defined in the Interim Service Award, during the performance period of $1.4 billion. As both of the vesting conditions were satisfied, 57% of the Interim Service Award vested on July 1, 2020 and the remaining 43% vested on December 31, 2020.

Grant Policies and Practices.

The Company’s practice has been to make annual equity awards and award other incentive compensation to named executive officers at the time of regularly scheduled meetings of the Board or the Committee in February of each year. The Company’s policy is that, except for new hires and certain promotions, all other equity awards to named executive officers will be made only at quarterly meetings of the Committee or the Board.

 

8 Any transaction abandoned or postponed by determination of the Board of the Company or the Chief Executive Officer, or any transaction subject to a definitive agreement, the closing of which has not yet occurred, shall be considered completed for purposes of the award.

9 “Adjusted operating cash flow” for purposes of the Interim Service Award was calculated in the same manner as under the corporate metrics for the Bonus Plan described above, except that under the Interim Service Award such calculation excludes the impact of cash tax savings resulting from a deduction under analysis by management as of the date of the Interim Service Award and the impact of any increase in inventory carrying costs resulting from U.S. tariffs first enacted after the date of the Interim Service Award.

 

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Incentive Compensation Recoupment Policy.

Subject to the discretion and approval of the Board, the Company will require reimbursement and/or cancellation of any bonus or other incentive compensation, including equity-based compensation, awarded to an executive officer after January 1, 2010 where all of the following factors are present: (a) the award was predicated upon the achievement of certain financial results that were subsequently the subject of a material restatement, (b) in the Board’s view, the executive engaged in fraud or willful misconduct that was a significant contributing cause to the need for the restatement, and (c) a lower award would have been made to the executive based upon the restated financial results. In each such instance, the Company will, to the extent permitted by applicable law and subject to the fiduciary duties of the Board, seek to recover the individual executive’s bonus award or other incentive compensation paid or issued to the executive officer in excess of the amount that would have been paid or issued based on the restated financial results.

Stock Ownership Guidelines.

Certain executives and non-employee directors are expected to maintain ownership of Company stock equal to the following applicable market value:

 

Position

  

        Ownership Requirement        

 

President

Chief Executive Officer

   6 times annual salary

Chief Financial Officer and

President, Business Operations

Chief Legal & Administrative Officer

   3 times annual salary

Segment President

Chief Human Resources Officer

Chief Customer Officer

Chief Marketing/Digital Officer

Business Unit CEOs with revenue over $500 million

   1.5 times annual salary

Non-Employee Directors (including Chairperson of the Board)

   5 times annual cash retainer

 

 

 

Until the ownership level is met, executives are required to retain 75% of the net after-tax shares received from stock option exercises and the vesting of RSUs. Non-employee directors are generally not permitted to sell any of their shares of Company stock received pursuant to annual equity awards granted from and after May 7, 2019 until the end of their Board service. All shares held directly or beneficially, including time-based RSUs, PRSUs for which all performance criteria have been satisfied but have not yet vested due to time-based vesting requirements, shares of Company stock allocated to executives’ accounts under the Newell Brands Employee Savings Plan (the “401(k) Plan”), and deemed investments in Company stock available to non-employee directors under the Newell Rubbermaid Inc. 2008 Deferred Compensation Plan (the “2008 Plan”), count toward attainment of these targets. Unexercised stock options and other unvested PRSUs are not counted.

Retirement Compensation.

The Company provides its eligible executives with retirement benefits that are supplemental to those provided to its employees generally in order to provide competitive benefits and assist in attracting and retaining key executives. Depending on his or her employment date and participation eligibility date with the Company, these supplemental executive retirement benefits may also apply to named executive officers.

 

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See the section below titled “2020 Nonqualified Deferred Compensation” for a more detailed discussion of the supplemental retirement benefits to which certain named executive officers are entitled.

In November 2017, upon recommendation of the Committee, the Newell Brands Supplemental Employee Savings Plan (the “Supplemental ESP”) was adopted, effective January 1, 2018. The Supplemental ESP was adopted in connection with an overall harmonization of U.S. benefit plans at the Company. The Supplemental ESP is a nonqualified deferred compensation plan that is available to a select group of management and highly compensated employees of the Company and certain of its subsidiaries. The Supplemental ESP is designed to allow for deferrals that are in addition to those available to employees under the 401(k) Plan because of compensation limits under that plan.

Other Compensation.

Executive officers are provided other benefits as part of the Company’s executive compensation program which the Committee believes are in line with competitive practices. See the “All Other Compensation” column of the “2020 Summary Compensation Table” and the related footnotes and narrative discussion.

Benefits for the named executive officers include:

 

  l    

Participation in the Flexible Perquisites Program, which provides a monthly cash stipend that can be used for the purchase or lease of a personal automobile and related insurance and maintenance, income tax preparation services, estate planning services, financial planning services or other perquisites;

 

  l    

Company contributions to the 401(k) Plan;

 

  l    

payment of life and long-term disability insurance premiums;

 

  l    

annual health examinations encouraged by the Company; and

 

  l    

assistance for a new hire or transfer necessitating relocation, which includes reimbursement of various relocation expenses, a relocation allowance, purchase of the executive’s home at an appraised value if not sold within a certain period, payment up to $50,000 for a loss on sale, a bonus for an early sale of the executive’s home and tax assistance on certain taxable reimbursed expenses.

The Company maintains one corporate aircraft, for business travel. The President and CEO and other named executive officers may only use the corporate aircraft for personal travel on an exceptional basis.

Termination Benefits.

Each of the named executive officers is entitled to severance benefits following certain terminations of employment pursuant to their employment terms, the Severance Plan and/or the terms of their 2018, 2019, and 2020 RSU agreements and their Stock Option Agreements, as applicable. Please see the caption “Potential Payments Upon Termination or Change in Control of the Company—Termination of Employment—No Change in Control” for a discussion of these terms.

 

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The Company believes that appropriate severance benefits are important to attracting and retaining talented executives. The Company also believes that the termination protections afforded under the 2018, 2019, and 2020 RSU agreements, certain individual RSU agreements and Stock Option Agreements are appropriate given that the agreements provide that the executive will be subject to confidentiality obligations and non-solicitation, non-competition and non-disparagement restrictive covenants following any termination of employment.

The Company believes that, in the event of an extraordinary corporate transaction, the Severance Plan and the ESAs (as defined below), as applicable, could prove crucial to the Company’s ability to retain top management through the transaction process. In addition, the Company believes that the benefits provided under the ESAs and the Severance Plan represent fair and appropriate consideration for the agreement of the named executive officers to the restrictive covenants in the ESAs or required under the Severance Plan that prohibit them from competing with the Company and from soliciting Company employees following a termination of employment. The benefits provided under the ESAs and the Severance Plan were determined to be at levels appropriate and competitive with the benefits provided under similar arrangements of companies in the Company’s custom comparator group.

Neither the ESAs nor the Severance Plan contains tax gross up provisions. Rather, payments and benefits payable to the executive will be reduced to the extent necessary if doing so would result in the executive retaining a larger after-tax amount, taking into account the income, excise and other taxes imposed on the payments and benefits.

Newell Brands Executive Severance Plan.

To harmonize severance benefits offered to current and future executives, the Committee recommended and the Board approved the adoption in July 2019 of the Severance Plan. It was adopted to provide severance pay, medical benefits and certain other benefits to eligible Company Executives (as defined in the Severance Plan) when their employment terminates under certain circumstances.

Messrs. Saligram and Turner and Mses. Hurd and Malkoski are participants in the Severance Plan. Prior to his departure, Mr. Hammer was also a participant in the Severance Plan. Mr. Peterson does not currently participate in the Severance Plan.

In order for the other named executive officers to participate in the Severance Plan, the executive must waive any rights to severance payments and other severance benefits under his or her employment security agreement (each an “ESA” or collectively, “ESAs”) or other written agreement between such executive and the Company in effect as of the effective date of participation in the Severance Plan (other than any provisions thereof that apply to the executive’s awards with respect to the securities of the Company granted prior to the effective date of the executive’s participation in the Severance Plan). Both Mr. Turner and Ms. Hurd waived their rights under previously existing ESAs and other applicable arrangements and began participating in the Severance Plan in 2020, while Mr. Saligram and Ms. Malkoski were not parties to a prior ESA or other severance agreement.

The Severance Plan provides for benefits upon either of two types of employment termination involving a participating executive (an “Executive”): (i) an involuntary termination of the Executive’s employment by the Company without Good Cause (as defined in the Severance Plan); or (ii) a voluntary termination of employment for Good Reason (as defined in the Severance Plan. Under the Severance Plan, Good Cause exists if the Executive in the performance of his or her duties engages in misconduct that causes material harm to the Company, materially breaches the Company’s Code of Conduct or is convicted of a criminal violation involving fraud or dishonesty. Generally, Good Reason exists under the Severance

 

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Plan if there is a material adverse change in the nature or the scope of the Executive’s authority, duties, rate of pay or incentive or retirement benefits; the Executive is required to report to an officer with a materially lesser position or title; the Company relocates the Executive by 50 miles or more; or the Company materially breaches the provisions of the Severance Plan. However, Good Reason will not exist if the Company’s reduction in benefits under an incentive or retirement plan is applicable to all other plan participants who are senior executives and either (1) the reduction is a result of an extraordinary decline in the Company’s earnings, share price or public image or (2) the reduction is done to bring the plan(s) in line with the compensation programs of comparable companies.

In the event of termination in the absence of a Change in Control, at any time by the Company other than for Good Cause or by the Executive for Good Reason, as those terms are defined in the Severance Plan, Executives are eligible to receive the following pay and benefits:

 

  l    

Severance pay equal to two times the sum of the base salary and target annual cash bonus for the CEO and equal to one times the sum of the base salary and target annual cash bonus for non-CEO Executives;

 

  l    

A pro rata annual cash bonus based on actual corporate results, subject to adjustments that may be applied generally;

 

  l    

Vesting of a pro-rata portion of time-based equity and long-term incentive awards that were granted on or after the Executive’s participation in the Severance Plan and would have otherwise vested during the three-year period after termination, with settlement in accordance with the original schedule and vesting of performance-based equity and long-term incentive awards subject to the level of achievement of performance goals, in each case subject to any more favorable provisions in an offer letter or grant agreement;

 

  l    

Vesting of a pro-rata portion of option awards that were granted on or after the Executive’s participation in the Severance Plan and would have otherwise vested during the three-year period after termination, and exercisability of vested options for up to one year after termination, subject to any more favorable provisions in an offer letter or grant agreement;

 

  l    

Up to 2 years for the CEO and 1 year for non-CEO Executives of medical and dental benefits at active employee premium rates that terminates upon eligibility for coverage under certain other plans; and

 

  l    

Twelve months of outplacement benefits.

For purposes of the Severance Plan, a Change in Control generally means: (i) a person acquires 25% or more of the voting power of the Company’s outstanding securities; (ii) a merger, consolidation or similar transaction that generally involves a change in ownership of at least 50% of the Company’s outstanding voting securities; (iii) a sale of all or substantially all of the Company’s assets that generally involves a change in ownership of at least 50% of the Company’s outstanding voting securities; or (iv) during any period of two consecutive years or less, the incumbent directors cease to constitute a majority of the Board. Under the Severance Plan, in the event of a Change in Control, Executives are eligible to receive the following pay and benefits if their employment is terminated by the Company other than for Good Cause or by the Executive for Good Reason, on or within 24 months after a Change in Control:

 

  l    

Severance pay equal to two times the sum of their base salary and target annual cash bonus;

 

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  l    

A pro rata annual cash bonus based on attainment of targeted results at a target payout level;

 

  l    

Full vesting of equity and long-term incentive awards that were granted on or after the Executive’s participation in the Severance Plan, with performance metrics deemed satisfied at target payout level for uncompleted performance periods;

 

  l    

A period of 3 years or the remaining term under an Executive’s option agreement to exercise options that were granted on or after the Executive’s participation in the Severance Plan;

 

  l    

Up to 2 years of medical, vision and dental benefits at active employee premium rates which terminate upon eligibility for coverage under certain other plans;

 

  l    

100% vesting of benefits under the Newell Brands Supplemental Employee Savings Plan and the 2008 Plan and payment to Executives of a lump sum equal to the sum of any unvested amounts accrued or credited under qualified defined contribution plans as of the date of termination; and

 

  l    

Twelve months of outplacement benefits.

In order to receive benefits under the Severance Plan, participating Executives will be required to sign restrictive covenants, including non-competition for a period of up to two years, and a release of claims. The Company may recover payments previously paid in the event an Executive breaches restrictive covenants. No gross-up payment will be made to cover any excise and related income tax liability arising under Sections 4999 and 280G of the Internal Revenue Code as a result of any payment or benefit arising under the Severance Plan. Instead, the Severance Plan provides for a reduction in amounts payable so that no excise tax would be imposed. However, a reduction in payments will not occur if the payment of the excise tax would produce a greater overall net after-tax benefit.

Employment Security Agreements.

The Company still has an ESA with Mr. Peterson. The ESA provides severance benefits following certain terminations of employment occurring within two years of a Change in Control (as defined in the ESA) of the Company. Please see the caption “Potential Payments Upon Termination or Change in Control of the Company—Termination of Employment Following a Change in Control—Employment Security Agreements” below for a discussion of the terms of the ESA.

 

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2020 Summary Compensation Table

 

Name and Principal

Position

  Year    

Salary

($)

   

Bonus

($)(2)

 

Stock
Awards

($)(3)

   

Option
Awards

($)(4)

   

Non-Equity
Incentive
Plan

Compensa-

tion

($)

 

Change in
Pension
Value and
Nonqualified
Deferred
Compensa-
tion
Earnings

($)

   

All Other
Compensa-
tion

($)(5)

   

Total

($)

 
                                                                 

Ravichandra K. Saligram(1),

President and Chief
Executive Officer

   

2020

2019

 

 

   

1,400,000

344,697

 

 

 

1,875,000

   

4,222,024

 

 

   

1,500,146

5,235,554

 

 

  2,415,000

87,898

   


 

 

   

267,330

70,713

 

 

   

9,804,500

7,613,862

 

 

Christopher H. Peterson,

Chief Financial Officer and President, Business
Operations

   

2020
2019
2018
 
 
 
   

830,625

1,100,000

66,667

 

 

 

 

   

2,644,039

4,824,058

2,699,986

 

 

 

   

939,464

 

 

 

  1,146,263

1,462,500

   


 

 

 

   

619,484

339,264

2,902

 

 

 

   

6,179,875

7,725,822

2,769,555

 

 

 

Bradford R. Turner,

Chief Legal and
Administrative Officer and Corporate Secretary

   

2020

2019

2018

 

 

 

   

700,000

700,000

700,000

 

 

 

  350,000

350,000

500,000

   

1,477,690

1,627,632

3,028,841

 

 

 

   

525,050

 

 

 

  805,000

819,000

525,000

   


206

 

 

 

   

906,904

320,076

162,721

 

 

 

   

4,764,644

3,816,708

4,916,768

 

 

 

Laurel M. Hurd,

Segment President,
Learning & Development

   

2020

2019

 

 

   

650,000

573,958

 

 

  400,000

425,000

   

960,494

665,968

 

 

   

341,283

 

 

  515,775

475,989

   


 

 

   

119,125

133,684

 

 

   

2,986,677

2,274,599

 

 

Kristine K. Malkoski

Business Unit CEO - Food

    2020       537,500         969,685       225,018     403,125           96,307       2,231,635  

David M. Hammer

Business Unit CEO – Appliances and Cookware

    2020       381,000     400,000     428,952       152,410     261,938           911,917       2,536,217  
                                                                 

 

(1)

Amounts in the “All Other Compensation” and “Total” columns for Mr. Saligram for 2019 reflect a correction to include $44,360 for a Company reimbursement of legal fees incurred in connection with review and negotiation of the CEO Offer Letter, which amount was inadvertently omitted in the Company’s 2020 proxy statement. The amount reported in the “Option Awards” column for 2019 for Mr. Saligram was inadvertently reported in the “Stock Awards” column in our 2020 proxy statement but has been corrected for purposes of this 2020 Summary Compensation Table.

 

(2)

Bonus Amounts. This column reflects the final installments of $350,000, $400,000 and $400,000 paid in 2020 to Messrs. Turner and Hammer and Ms. Hurd, respectively, under two year retention awards that were subject to certain conditions, including but not limited to continued employment with the Company between 2018 and 2020.

 

(3)

Stock Awards. This column shows the grant date fair value of awards of RSUs granted to the named executive officers calculated in accordance with ASC 718. In February 2020, PRSUs were awarded under the LTIP in the following target amounts: Mr. Saligram, 174,825 PRSUs, Mr. Peterson, 109,484 PRSUs, Mr. Turner, 61,188 PRSUs, Ms. Hurd, 39,772 PRSUs, Ms. Malkoski, 26,223 PRSUs and Mr. Hammer, 17,762 PRSUs. Also, in connection with joining the Company, Ms. Malkoski received a sign-on award of 20,000 PRSUs with a grant date fair value of $336,400. Her grant date fair value is based on the closing price of the stock on the date on which the performance conditions were established. The values reported in this column include the following amounts representing the increase in fair value associated with the adjustment of LTIP awards pursuant to the amendment of the LTIP on August 6, 2020: Mr. Saligram, $321,678, Mr. Peterson, $201,451, Mr. Turner, $112,586, Ms. Hurd, $73,180, Ms. Malkoski, $48,250 and Mr. Hammer,

 

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$32,682. Please see the section “Compensation Discussion and Analysis” for further information on the LTIP amendment and Ms. Malkoski’s sign-on grant. See the Share-Based Compensation footnote to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for an explanation of the assumptions made by the Company in the valuation of some of the awards shown in this column. Details regarding 2020 restricted stock awards can be found below in the table “2020 Grants of Plan-Based Awards.” Additional information regarding the stock awards that were still outstanding as of December 31, 2020 can be found in the table “Outstanding Equity Awards At 2020 Fiscal Year-End.”

 

(4)

Option Awards. This column shows the grant date fair value of the stock options granted to the named executive officers calculated in accordance with ASC 718. In February 2020, stock options were granted under the LTIP to the named executive officers in the following amounts: Mr. Saligram, 274,752 stock options, Mr. Peterson, 172,063 stock options, Mr. Turner, 96,163 stock options, Ms. Hurd, 62,056 stock options, Ms. Malkoski, 41,212 stock options and Mr. Hammer, 27,914 stock options. The exercise price per share of the 2020 grants was $20.02. See the Share-Based Compensation footnote to the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for an explanation of the assumptions made by the Company in the valuation of the awards shown in this column. Details regarding 2020 option awards can be found below in the table “2020 Grants of Plan-Based Awards.” Additional information regarding the stock option awards that were still outstanding as of December 31, 2020 can be found below in the table “Outstanding Equity Awards At 2020 Fiscal Year-End.”

Salary. The “Salary” column of the “2020 Summary Compensation Table” shows the salaries earned in the years indicated to each of the named executive officers. Salary increases, if any, for each year are generally approved in February of that year or in connection with the named executive officer’s promotion.

Bonus. The “Bonus” column of the “2020 Summary Compensation Table” shows guaranteed minimum bonuses and retention bonuses and similar one-time, lump-sum payments to the named executive officers paid during the year which are separate from Non-Equity Incentive Plan Compensation.

Stock Awards and Option Awards. The amounts in the “Stock Awards” and “Option Awards” columns of the “2020 Summary Compensation Table” consist of the grant date fair value of awards of RSUs and stock options calculated in accordance with ASC 718 for each named executive officer. The grant date fair values of PRSU and stock option awards under the LTIP are based on the probability of outcomes possible under each award and the shares the recipient would receive under each of the outcomes. Assuming maximum performance with respect to the applicable performance objectives, the value of the PRSUs at the grant date would have been as follows: Mr. Saligram, $8,444,048; Mr. Peterson, $5,288,078; Mr. Turner, $2,955,380; Ms. Hurd, $1,920,988; Ms. Malkoski’s LTIP PRSUs, $1,266,570; Ms. Malkoski’s Sign-On Award of PRSUs, $336,400; and Mr. Hammer, $857,904.

Non-Equity Incentive Plan Compensation. The “Non-Equity Incentive Plan Compensation” column of the “2020 Summary Compensation Table” shows the cash incentive payouts earned by each of the named executive officers under the Amended Bonus Program. The Company pays all of these amounts, if any, in the month of March following the year in which they are earned. Incentive payments made in 2020 under the Amended Bonus Program were earned at 115% of target for Messrs. Saligram, Peterson and Turner, 106% of target for Ms. Hurd, and 125% of target for Ms. Malkoski and Mr. Hammer. Additional explanation of the non-equity incentive plan compensation for each named executive officer appears above under the caption “Compensation Discussion and Analysis—Key Elements of Executive Compensation—”Annual Incentive Compensation” and below in the footnotes to the “2020 Grants of Plan-Based Awards” table.

 

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Information regarding the amount of salary and bonus received in proportion to total compensation appears above in the CD&A, under the caption “Compensation Discussion and Analysis—Mix of Pay.”

 

(5)

All Other Compensation. The “All Other Compensation” column of the “2020 Summary Compensation Table” reflects the following amounts for each named executive officer in 2020:

 

Name    Other
Benefits
($)(1)
     401(k)
Plan
($)(2)
    

Supple-
mental

ESP

($)(3)

     Insurance
Premiums
($)(4)
    

Severance
Related
Compensa-
tion

($)(5)

     RSU
Dividend
Equivalents
on Vested
Awards
($)(6)
    

Total

($)

 
                                                                

Ravichandra K. Saligram

     36,000        17,100        211,800        2,430                      267,330  

Christopher H. Peterson

     260,638        17,100        101,513        2,430               237,803        619,484  

Bradford R. Turner

     777,162        17,100        71,730        2,430               38,482        906,904  

Laurel M. Hurd

     21,638        17,100        52,847        2,430               25,110        119,125  

Kristine K. Malkoski

     77,519        17,100               1,688                      96,307  

David M. Hammer

     21,747        17,100               1,640        844,365        27,065        911,917  
                                                                

 

(1)

Other Benefits. The amounts in this column include (a) cash stipends under our Flexible Benefits Perquisites Program of $36,000 for Mr. Saligram; $21,638 for Messrs. Peterson and Turner and Ms. Hurd, respectively; $18,933 for Ms. Malkoski; and $13,701 for Mr. Hammer, (b) all amounts paid by the Company for annual health examinations for the named executive officers, which are permitted pursuant to Company policy and were utilized by Messrs. Peterson and Turner, (c) a tax reimbursement payment to Mr. Hammer of $8,046 on the value of outplacement services he received upon his separation from the Company, and (d) relocation related benefits of $159,508 for Mr. Peterson and $58,586 for Ms. Malkoski, respectively (in connection with their relocations to Atlanta, Georgia, the site of the Company’s headquarters), which include tax reimbursement payments of $70,972 for Mr. Peterson and $18,429 for Ms. Malkoski, respectively.

In accordance with the executive relocation policy, the Company purchased each of Messrs. Peterson’s and Turner’s homes at a price based on the average of multiple independent appraisals and resold them in 2020. As described in “CD&A—Other Compensation,” in connection with purchases and resales of the homes of executives, the Company incurs certain expenses and makes certain payments that are reported as all other compensation, per SEC rules. For Mr. Peterson, the Company incurred $76,421 in expenses and payments pursuant to the Company’s executive relocation policy. For Mr. Turner, due in part to deteriorating market conditions, the Company incurred a total of $752,838 in losses and expenses related to resale of the home.

 

(2)

401(k) Plan. This column shows the amount of all Company Matching Contributions made for 2020 under the 401(k) Plan on behalf of each named executive officer.

 

(3)

Supplemental ESP. This column shows the employer matching contributions for 2020 (exclusive of employee deferrals) which were credited to each named executive officer’s Supplemental ESP account for 2020, as described below under “Deferred Compensation Plans—Supplemental ESP.”

 

(4)

Insurance Premiums. This column shows all amounts paid by the Company on behalf of each named executive officer in 2020 for life insurance premiums: Mr. Saligram, $1,080; Mr. Peterson, $1,080; Mr. Turner, $1,080; Ms. Hurd, $1,080; Ms. Malkoski, $900; and Mr. Hammer, $729; and (b) long-term disability insurance premiums: Mr. Saligram, $1,350; Mr. Peterson, $1,350; Mr. Turner, $1,350; Ms. Hurd, $1,350; Ms. Malkoski, $788; and Mr. Hammer, $911.

 

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(5)

Severance Related Compensation. In connection with Mr. Hammer’s separation from the Company, he received, among other things: (1) a lump sum payment of $508,000 representing one year of pay at his 2020 salary rate; and (2) a lump sum payment equal to $279,400 representing his 2020 bonus at a 100% payout level; (3) a payment of $29,307 for unused vacation time; (4) $25,000 in lieu of executive outplacement services for which taxes were reimbursed as described above; and (5) $2,658 for continuation of health and welfare coverage. He also received a pro-rata payout of his 2020 annual incentive award based on actual performance against the applicable goals under the Amended Bonus Program, which amount is set forth in the “Non-Equity Incentive Plan Compensation” column of the “2020 Summary Compensation Table.”

 

(6)

RSU Dividend Equivalents on Vested Awards. This column shows all dividend equivalents paid to each named executive officer on RSUs which vested in 2020.

 

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2020 Grants of Plan-Based Awards

 

 Name   Grant
Date
 

Estimated Possible Payouts

Under Non-Equity Incentive

Plan Awards(1)

 

Estimated Future Payouts

Under Equity Incentive
Plan Awards(2)

   All Other
Option
Awards:
Securities
Underlying
Options
    (#)(6)    
 

Exercise
or Base
Price of
Option
Awards

($/sh)

 

Grant Date
Fair Value
of Stock
and Option
Awards

($)(7)

 
 

Thresh-
old

($)(3)

 

Target

($)(4)

  Maxi-
mum
($)(5)
 

Thresh-
old

(#)

  Target
(#)
   

Maxi-
mum

(#)

   

Ravichandra K. Saligram

 

 

 

2,100,000

 

2,625,000

 

 

 

 

 

  

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

174,825

 

 

349,650

  

 

 

 

3,900,346

 

 

2/18/2020

 

 

 

 

 

 

 

 

  

274,752

 

$20.02

 

 

1,500,146

 

(8)

 

8/6/2020

 

 

 

 

 

 

 

 

  

 

 

 

321,678

 

Christopher H. Peterson

 

 

 

996,750

 

1,245,938

 

 

 

 

 

  

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

109,484

 

 

218,968

  

 

 

 

2,442,588

 

 

2/18/2020

 

 

 

 

 

 

 

 

  

172,063

 

$20.02

 

 

939,464

 

(8)

 

8/6/2020

 

 

 

 

 

 

 

 

  

 

 

 

201,451

 

Bradford R. Turner

 

 

 

700,000

 

875,000

 

 

 

 

 

  

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

61,188

 

 

122,376

  

 

 

 

1,365,104

 

 

2/18/2020

 

 

 

 

 

 

 

 

  

96,163

 

$20.02

 

 

525,050

 

(8)

 

8/6/2020

 

 

 

 

 

 

 

 

  

 

 

 

112,586

 

Laurel M. Hurd

 

 

 

487,500

 

609,375

 

 

 

 

 

  

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

39,772

 

 

79,544

  

 

 

 

887,314

 

 

2/18/2020

 

 

 

 

 

 

 

 

  

62,506

 

$20.02

 

 

341,283

 

(8)

 

8/6/2020

 

 

 

 

 

 

 

 

  

 

 

 

73,180

 

Kristine K. Malkoski

 

 

 

322,500

 

403,125

 

 

 

 

 

  

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

26,223

 

 

52,446

  

 

 

 

585,035

 

 

2/18/2020

 

 

 

 

 

 

 

 

  

41,212

 

$20.02

 

 

225,018

 

 

2/18/2020

 

 

 

 

 

 

20,000

 

 

  

 

 

 

336,400

 

(8)

 

8/6/2020

 

 

 

 

 

 

 

 

  

 

 

 

48,250

 

David M. Hammer

 

 

 

209,550

 

261,938

 

 

 

 

 

  

 

 

 

 

 

2/18/2020

 

 

 

 

 

 

17,762

 

 

35,524

  

 

 

 

396,270

 

 

2/18/2020

 

 

 

 

 

 

 

 

  

27,914

 

$20.02

 

 

152,410

 

(8)

 

8/6/2020

 

 

 

 

 

 

 

 

  

 

 

 

32,682

 

   

 

 

(1)

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards. Payouts under the Bonus Plan could be earned based on performance in 2020. Bonuses under the Amended Bonus Program were earned at 115% of target for Messrs. Saligram, Peterson and Turner, 106% of target for Ms. Hurd, and 125% of target for Ms. Malkoski and Mr. Hammer. Target amounts are based on base salary actually earned in 2020.

 

(2)

Estimated Future Payouts Under Equity Incentive Plan Awards. This column includes the number of PRSUs granted in 2020 to the named executive officers under the LTIP and Ms. Malkoski’s Sign-On Award. The target number of shares shown in the table reflects the number of shares that will be earned if, for the PRSUs granted in February 2020, the three-year total performance conditions are met at the target level. Actual shares, if any, will be paid in February 2023 and, other than for Ms. Malkoski’s Sign-On Award of 20,000 PRSUs, may range from 0% to 200% of the target.

 

(3)

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards—Threshold Payout. Pursuant to the Bonus Plan, performance at or below a specific percentage of a target goal will result in no payment with respect to that performance goal. As a result, no payment is to be made under the Amended Bonus Program until a minimum performance level for a performance goal, or threshold, is

 

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exceeded, and performance above such level will result in a payment, depending upon the level at which the goal was attained. For an explanation of the potential payouts under the Amended Bonus Program with respect to 2020 performance, see the section titled “Compensation Discussion and Analysis—Key Elements of Executive Compensation—Annual Incentive Compensation.”

 

(4)

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards—Target Payout. Under the Bonus Plan, the amounts shown in this column represent: (i) for Mr. Saligram, 150% of full year salary earned; (ii) for Mr. Peterson, 120% of full year salary earned; (iii) for Mr. Turner, 100% of full year salary earned; (iv) for Ms. Hurd, 75% of full year salary earned; (vi) for Ms. Malkoski, 60% of full year salary earned; and (vii) for Mr. Hammer, 55% of full year salary earned.

 

(5)

Estimated Possible Payouts Under Non-Equity Incentive Plan Awards—Maximum Payout. The amounts shown in these columns represent the opportunities under the Amended Bonus Program, reflecting a reduction in maximum payout opportunity from 200% under the original design of the 2020 annual incentive program to 125% under the Amended Bonus Program, as discussed in the “Compensation Discussion and Analysis.”

 

(6)

All Other Option Awards: Number of Securities Underlying Options. This column shows the number of shares of common stock underlying stock options awarded in 2020 to the named executive officers under the LTIP.

 

(7)

Grant Date Fair Value of Stock and Option Awards. This column shows the grant date fair value of awards of PRSUs and stock options granted to the named executive officers, computed based in accordance with ASC 718 based on the target number of PRSUs and stock options awarded. Ms. Malkoski received a PRSU award in connection with joining the Company with a grant date fair value of $336,400, based on the closing price of the stock on the date on which the performance conditions were established. See the Share Based Compensation Footnote to Consolidated Financial Statements included in the Company’s 2020 Annual Report on Form 10-K for an explanation of the assumptions made by the Company in valuing the grants of these awards.

 

(8)

Material Modification of PRSU Awards. Represents the incremental increase in fair value of the named executive officer’s February 2020 PRSU award as of the August 6, 2020 modification date.

For information regarding the amount of salary and bonus compensation in relation to the total compensation of our named executive officers, as well as the individual agreements in effect with our named executive officers, see the CD&A.

 

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Outstanding Equity Awards at 2020 Fiscal Year-End

 

    Option Awards   Stock Awards  
  Name  

Number

Of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

 

Number

Of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

    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

($)(2)

   

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

($)(3)

   

Ravichandra K. Saligram(4)

      274,752       $20.02   2/18/2030                        
                              174,825     $ 3,711,535  
          1,333,333   $17.79   10/2/2029                        

Christopher H. Peterson (5)

      172,063       $20.02   2/18/2030                        
                              109,484     $ 2,324,345  
                              176,366     $ 3,744,250  

Bradford R. Turner(6)

      96,163       $20.02   2/18/2030                        
                              61,188     $ 1,299,021  
                  18,812       $399,379              
                              65,843     $ 1,397,847  
                  8,859       $188,077              
                  7,353       $156,104              
                              51,470     $ 1,092,708  

Laurel M. Hurd(7)

      62,506       $20.02   2/18/2030                        
                              39,772       $844,360  
                  10,288       $218,414              
                              23,148       $491,432  
                  6,863       $145,701              

Kristine K. Malkoski(8)

      41,212       $20.02   2/18/2030                        
                              20,000       $424,600  
                              26,223       $556,714  

David M. Hammer(9)

      9,304       $20.02   2/18/2030                        
                  4,037       $85,706              
                     6,311       $133,983              
   

 

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(1)

Number of Shares or Units of Stock That Have Not Vested. Represents all time-based RSU awards (including PRSUs for which all performance conditions have been satisfied) held by the named executive officer as of December 31, 2020.

 

(2)

Market Value of Shares or Units of Stock That Have Not Vested. Represents the value of the number of shares of common stock covered by the time-based RSU awards (including PRSUs for which all performance conditions have been satisfied) valued using $21.23 (the closing market price of the Company’s common stock on December 31, 2020).

 

(3)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested. Represents the value of the number of shares of common stock covered by the PRSU awards using $21.23 (the closing market price of the Company’s common stock on December 31, 2020). The value provided assumes the PRSU awards pay out at target and any stock price targets or other performance criteria are achieved. The PRSU awards vest following the end of the applicable performance cycle if certain performance goals are attained and, generally, if the executive remains employed by the Company. The actual number of shares issued or cash paid upon settlement will depend on the extent to which the performance goals are attained or exceeded. Based on the Company’s TSR relative to the applicable custom comparator group through the applicable performance period, ending December 31, 2020, 57% of the PRSUs granted pursuant to the 2018 LTIP vested.

 

(4)

Vesting Dates—Saligram. Mr. Saligram was granted 1,333,333 stock options on October 2, 2019 pursuant to the CEO Offer Letter. In reference to the Employee Transition Award in Mr. Saligram’s offer letter, the options will expire on the tenth anniversary of the grant date, assuming continued employment with the Company, and the exercise price per share ($17.79) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. One-third of the award (rounded down to the nearest whole share) will vest on the date that is eighteen months after the grant date (April 2, 2021), the next one-third will vest on the second anniversary of the grant date (October 2, 2021), and the last one-third will vest on the third anniversary of the grant date (October 1, 2022). The vesting and exercise of the award are subject to continued employment and the attainment of a specific stock price threshold following 18 months after Mr. Saligram’s commencement of employment. If the performance condition has not been satisfied as of any of the vesting dates, then the vesting of any portion of the Employment Transition Award otherwise scheduled for such vesting date will be deferred until the fifth business day following the date, if any, on which the performance condition has been satisfied. Mr. Saligram was granted 274,752 stock options on February 18, 2020, and the exercise price per share ($20.02) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. The option award vests in three tranches as follows: February 18, 2021 (91,584 options); February 18, 2022 (91,584 options); and February 18, 2023 (91,584 options). The vesting date of his PRSU award is: February 18, 2023 (174,825 PRSUs).

 

(5)

Vesting Dates—Peterson. Mr. Peterson was granted 172,063 stock options on February 18, 2020, and the exercise price per share ($20.02) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. The option award vests in three tranches as follows: February 18, 2021 (57,354 options); February 18, 2022 (57,354 options); and February 18, 2023 (57,355 options). The vesting date of his PRSU awards are as follows: February 19, 2022 (176,366 PRSUs) and February 18, 2023 (109,484 PRSUs).

 

(6)

Vesting Dates—Turner. Mr. Turner was granted 96,163 stock options on February 18, 2020, and the exercise price per share ($20.02) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. The option award vests in three tranches as follows: February 18, 2021 (32,054 options); February 18, 2022 (32,054 options); and February 18, 2023

 

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(32,055 options). The vesting dates of the time-based RSU awards are as follows: February 14, 2021 (7,353 RSUs); February 19, 2021 (9,406 RSUs); February 19, 2022 (9,406 RSUs). The remaining vesting date of the special RSU award made in May 2018 is as follows: May 15, 2021 (8,859 RSUs). The vesting dates of his PRSU awards are as follows: February 14, 2021 (51,470 PRSUs); February 19, 2022 (65,843 PRSUs); and February 18, 2023 (61,188 PRSUs).

 

(7)

Vesting Dates—Hurd. Ms. Hurd was granted 62,506 stock options on February 18, 2020, and the exercise price per share ($20.02) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. The option award vests in three tranches as follows: February 18, 2021 (20,835 options); February 18, 2022 (20,835 options); and February 18, 2023 (20,836 options). The vesting dates of her time-based RSU awards are as follows: February 19, 2021 (5,144 RSUs); February 19, 2022 (5,144 RSUs); and February 14, 2021 (6,863 RSUs) The vesting dates of her PRSU awards are as follows: February 19, 2022 (23,148 PRSUs) and February 18, 2023 (39,772 PRSUs).

 

(8)

Vesting Dates—Malkoski. Ms. Malkoski was granted 41,212 stock options on February 18, 2020, and the exercise price per share ($20.02) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. The option award vests in three tranches as follows: February 18, 2021 (13,737 options); February 18, 2022 (13,737 options); and February 18, 2023 (13,738 options). The vesting dates of her PRSU awards are as follows: February 18, 2023 (26,223 PRSUs) and February 18, 2023 (20,000 PRSUs).

 

(9)

Vesting Dates—Hammer. Mr. Hammer was granted 27,914 stock options on February 18, 2020, and the exercise price per share ($20.02) of the stock options was equal to the closing price of a share of the Company’s common stock on the date of grant. In connection with his departure from the Company, all of Mr. Hammer’s vested and non-vested stock options and all non-vested RSUs or other equity awards were forfeited as of September 30, 2020, except for those RSU and stock option grants that were scheduled to vest in February 2021. Mr. Hammer’s remaining 9,304 options vested on February 18, 2021. His remaining time-based RSU awards vest as follows: February 14, 2021 (6,311 RSUs) and February 19, 2021 (4,037 RSUs).

2020 Option Exercises and Stock Vested

 

    Name   

Number of

Shares

Acquired on
Vesting

(#)

      

Value

Realized On
Vesting

($)(1)

 
                     
                     

    Ravichandra K. Saligram

  

 

—    

 

    

 

—    

 

    Christopher H. Peterson

  

 

175,537    

 

    

 

$3,628,604    

 

    Bradford R. Turner

  

 

25,617    

 

    

 

$477,095    

 

    Laurel M. Hurd

  

 

14,856    

 

    

 

$322,573    

 

    Kristine K. Malkoski

  

 

—    

 

    

 

—    

 

    David M. Hammer

  

 

14,663    

 

    

 

$320,811    

 

                     
                     

 

(1)

Value Realized on Vesting. Represents the value of vested shares of RSUs using the closing market price of the Company’s common stock on the relevant vesting date and includes the following cash payments for dividend equivalents paid with respect to RSUs: Mr. Peterson, $237,803; Mr. Turner, $38,482; Ms. Hurd, $25,110; and Mr. Hammer, $27,065.

 

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Retirement Plans.

The Company generally provides its eligible executives in the U.S. with retirement benefits using a combination of the 401(k) plan, the 2008 Plan, and the Supplemental ESP.

2020 Pension Benefits.

None of the named executive officers in 2020 participated in the Company’s tax qualified defined benefit plans or qualified pension plans.

401(k) Plan.

Effective January 1, 2018, the 401(k) Plan was amended to provide for matching Company contributions up to 6% of eligible earnings for all participants. The matching Company contributions made for each named executive officer in 2020 are reflected in the “All Other Compensation” column of the “2020 Summary Compensation Table.”

2020 Nonqualified Deferred Compensation

This table shows the contributions made by each named executive officer and the Company in 2020, the earnings accrued on the named executive officer’s account balances in 2020 and the account balances at December 31, 2020 under the 2008 Plan and the Supplemental ESP.

 

Name   Name of Plan    

Executive
  Contributions  
in Last FY

($)(1)

   

Company
  Contributions  
in Last FY

($)(2)

   

Aggregate
Earnings
  in Last FY  

($)(3)

   

Aggregate
Withdrawals/
  Distributions  

($)(4)

      Aggregate  
Balance at
Last FYE
($)(5)(6)
 
                                                 

Ravichandra K. Saligram

 

 

2008 Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental ESP

 

 

 

214,900

 

 

 

211,800

 

 

 

9,318

 

 

 

 

 

 

436,018

 

Christopher H. Peterson

 

 

2008 Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental ESP

 

 

 

164,464

 

 

 

101,513

 

 

 

117,805

 

 

 

 

 

 

718,023

 

Bradford R. Turner

 

 

2008 Plan

 

 

 

 

 

 

 

 

 

28,615

 

 

 

 

 

 

291,612

 

 

 

Supplemental ESP

 

 

 

69,300

 

 

 

71,730

 

 

 

58,965

 

 

 

 

 

 

480,584

 

Laurel M. Hurd

 

 

2008 Plan

 

 

 

 

 

 

 

 

 

168,031

 

 

 

 

 

 

1,170,380

 

 

 

Supplemental ESP

 

 

 

56,946

 

 

 

52,847

 

 

 

57,212

 

 

 

 

 

 

303,130

 

Kristine K. Malkoski

 

 

2008 Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental ESP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David M. Hammer

 

 

2008 Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental ESP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Executive Contributions in Last FY.    The amounts reported in this column for each named executive officer are reported as “Salary/Non-Equity Incentive Plan Compensation” in the “2020 Summary Compensation Table.”

 

(2)

Company Contributions in Last FY.    For 2020, the Company contributed to each eligible named executive officer’s account under the Supplemental ESP the amount described in the table, as reported in the “All Other Compensation” column of the “2020 Summary Compensation Table.” Company contributions were credited in March 2021 for the 2020 Plan year. No Company contributions are reflected for the 2008 Plan because the 2008 Plan was frozen to future deferrals as of January 1, 2018 with respect to the named executive officers.

 

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(3)

Aggregate Earnings (Loss) in Last FY.    The investment earnings/loss for 2020 reported in this column for each named executive officer is not included in the 2020 Summary Compensation Table.

 

(4)

Aggregate Withdrawals/Distributions.    No named executive officer received a distribution from, or withdrew funds from, the 2008 Plan in 2020.

 

(5)

Aggregate Balance at Last FYE.    The following amounts with respect to the 2008 Plan were reported in the Summary Compensation Table in prior years: Mr. Turner $262,997 and Ms. Hurd $1,002,349. The following amounts with respect to the Supplemental ESP were reported in the Summary Compensation Table in prior years: Mr. Peterson, $334,241; Mr. Turner, $280,589; and Ms. Hurd, $136,125. The Aggregate Balance at Last FYE column in this table includes 2020 accrued contributions that were paid in 2021.

 

(6)

Legacy Accounts under 2008 Plan.    Prior to 2018, certain named executive officers received “SERP Cash Account Credits,” as defined in the 2008 Plan, which vested ratably in annual installments based on their continued employment with the Company, and which, once vested, continue to be maintained in an investment account (each, a “Cash Account”) for the eligible named executive officer’s benefit pursuant to the 2008 Plan. In 2013, the Company, upon recommendation of the Committee, amended the 2008 Plan in order to: (1) align the retirement benefits provided by these plans with market practice; (2) simplify and harmonize the operation of the plans; (3) provide consistent levels of benefits among executives; and (4) stabilize the cost of the plans by reducing volatility. As a result, the Company discontinued awards of SERP Cash Account Credits. The balances set forth in the table for Mr. Turner and Ms. Hurd relating to the 2008 Plan reflect legacy payments made before this benefit was discontinued.

Deferred Compensation Plans.

2008 Plan.

Eligibility. Mr. Turner and Ms. Hurd were eligible to participate in the 2008 Plan.

Participant Contributions. For each calendar year prior to 2018, a participant could elect to defer to the 2008 Plan up to 50% of his base salary and up to 100% of any cash bonus paid for the calendar year. The deferred amounts were credited to an account established for the participant. As of January 1, 2018, the 2008 Plan was frozen to future deferrals with the exception of a small number of grandfathered participants, none of whom are named executive officers.

Cash Account—Basic Contribution. Mr. Turner and Ms. Hurd had funds deposited for their benefit in Cash Accounts as contributions made by the Company pursuant to the 2008 Plan. Prior to 2018, those named executive officers received an annual basic contribution credit, as provided in the table below. This annual contribution credit to Cash Accounts was discontinued for all plan years following 2017 in connection with the adoption of the Supplemental ESP.

 

Age + Completed Years of

Service

   % of Eligible
Compensation
 
          

Less than 40

     6  

40-49

     7  

50-59

     8  

60 or more

     9  
          

Vesting.    Many of the contributions made by the Company were subject to ratable annual vesting schedules. All named executive officers with Cash Accounts established under the 2008 Plan are currently 100% vested in their Cash Account balances and other benefits under the 2008 Plan.

 

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Investments.    Each Cash Account is credited with earnings and losses based on investment alternatives made available in the 2008 Plan and selected by the named executive officer from time to time.

Distributions.    At the time a named executive officer with a Cash Account made a deferral election, he or she must have elected whether such amount is to be paid in a lump sum or in annual installments of not more than 10 years (five years in the case of in-service distributions). However, the named executive officer’s retirement account and the vested portion of his or her Company contributions account will be paid out in a lump sum upon termination of employment prior to attaining age 55. The payment or commencement of the benefits will be made in the year after the year of the named executive officer’s termination of employment, but not sooner than six months after the date of such termination. A named executive officer also may have elected, at the time of the named executive officer’s initial deferral election, to have certain deferrals paid in January of any year during the named executive officer’s employment, provided that the payment date is at least two years after the year for which the election was effective and amounts subject to such payment election will become payable upon the named executive officer’s termination of employment if such termination occurs before payments have begun pursuant to the named executive officer’s election.

In addition, upon a named executive officer’s death, deferrals and Company contributions will be paid t