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

(Amendment No.     )

 

 

  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 Pursuant to §240.14a-12

 

IDEX Corporation

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)

 

  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.

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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:

   

 

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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.
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LOGO

1925 West Field Court, Suite 200

Lake Forest, IL 60045

March 20, 2020

Dear Stockholders,

You are cordially invited to attend the Annual Meeting of Stockholders of IDEX Corporation (the Company), which will be held on Thursday, May 7, 2020 , at 9:00 a.m. Central Time, at the DoubleTree Hotel, 5460 N. River Road, Rosemont, Illinois 60018.

We intend to hold our annual meeting in person. However, we are actively monitoring the novel coronavirus disease, COVID-19, as part of our effort to maintain a safe and healthy environment at our annual meeting. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we take this step, details on how to participate will be issued by press release, posted on our website, and filed with the Securities and Exchange Commission as additional proxy material. We also encourage attendees to review guidance from public health authorities on this issue.

The following pages contain our notice of annual meeting and proxy statement. Please review this material for information concerning the business to be conducted at the 2020 Annual Meeting, including the nominees for election as directors.

As we did last year, we have elected to provide access to our proxy materials and 2019 Annual Report on the Internet and are mailing paper copies to stockholders who have requested them. For further details, please refer to the section entitled Summary beginning on page 1 of the proxy statement.

Whether or not you plan to attend the 2020 Annual Meeting, it is important that your shares be represented. Please vote via telephone, the Internet or proxy card. If you own shares through a bank, broker or other nominee, please execute your vote by following the instructions provided by such nominee.

On behalf of the Board of Directors, I would like to express our appreciation for your continued interest in the Company.

Sincerely,

 

 

LOGO

ANDREW K. SILVERNAIL

Chairman of the Board and

Chief Executive Officer


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LOGO

NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS

 

Date and Time  

Thursday, May 7, 2020 at 9:00 a.m. Central Time

 

Place  

DoubleTree Hotel, 5460 N. River Road, Rosemont, Illinois 60018*

 

Agenda  

1.  Election of four members of the IDEX Board of Directors, each for a term of three years

 

 

2.  Advisory vote to approve named executive officer compensation

 

 

3.  Ratification of the appointment of Deloitte & Touche LLP as our independent registered accounting firm for 2020

 

 

4.  To consider a stockholder proposal regarding a report related to employee representation on the Company’s Board of Directors, if properly presented at the meeting

 

 

5.  To transact such other business as may properly come before the 2020 Annual Meeting or any adjournment or postponement thereof

 

Voting Recommendations  

The Company’s Board of Directors recommends that you vote:

 

 

1.  “FOR” all the director nominees

 

 

2.  “FOR” the approval of the compensation of our named executive officers

 

 

3.  “FOR” the ratification of the appointment of Deloitte & Touche LLP

 

 

4.  “AGAINST” the stockholder proposal regarding a report related to employee representation on the Company’s Board of Directors

 

Proxy Voting  

Your vote is important. You can vote your shares by Internet, by telephone, or by mail. Instructions for each of these methods and the control number that you will need are provided on the proxy card. If your shares are held in “street name” in a stock brokerage account, or by a bank or other nominee, you must provide your broker with instructions on how to vote your shares in order for your shares to be voted on important matters presented at the 2020 Annual Meeting.

 

March 20, 2019  

By Order of the Board of Directors,

 

LOGO

 

DENISE R. CADE

Senior Vice President, General Counsel and

Corporate Secretary

 

 

*

We intend to hold our annual meeting in person. However, we are actively monitoring the novel coronavirus disease, COVID-19, as part of our effort to maintain a safe and healthy environment at our annual meeting. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. If we take this step, details on how to participate will be issued by press release, posted on our website, and filed with the Securities and Exchange Commission as additional proxy material. We also encourage attendees to review guidance from public health authorities on this issue.

 

 

Important Notice Regarding the Availability of Proxy Materials for the 2020 Annual Meeting

The Proxy Statement and 2019 Annual Report are available online at:

http://phx.corporate-ir.net/phoenix.zhtml?c=83305&p=irol-reportsAnnual

 

 


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TABLE OF CONTENTS

 

     Page

SUMMARY

     1  

PROPOSAL 1 — ELECTION OF DIRECTORS

     5  

CORPORATE GOVERNANCE

     14  

Framework for Corporate Governance

     14  

Corporate Governance Guidelines and Code of Business Conduct and Ethics

     14  

Director Independence

     14  

Director Nominations

     14  

Board Leadership

     15  

Board’s Role in Risk Oversight

     16  

Board and Committee Assessment Process

     16  

Board’s Engagement with Management

     16  

Board’s Role in Talent Development and Strategic Planning

     16  

Director Onboarding and Education

     17  

Investor Outreach

     17  

Corporate Social Responsibility/Non-Financial Highlights

     17  

Communications with Our Board

     18  

BOARD COMMITTEES

     18  

Audit Committee

     18  

Compensation Committee

     19  

Nominating and Corporate Governance Committee

     20  

COMPENSATION OF DIRECTORS

     22  

Equity Grants

     22  

Directors Deferred Compensation Plan

     23  

Stock Ownership Guideline

     23  

2019 Director Compensation

     24  

Directors’ Outstanding Equity Awards at 2019 Fiscal Year End

     25  

SECURITY OWNERSHIP

     26  

EXECUTIVE COMPENSATION

     28  

Compensation Discussion and Analysis

     28  

2019 Executive Compensation Program

     33  

Setting Executive Compensation

     37  

Other Compensation Components

     40  

Other Executive Compensation Matters

     40  

Risk Assessment

     42  

Compensation Committee Report

     42  

2019 Summary Compensation Table

     43  

Narrative to 2019 Summary Compensation Table

     45  

2019 Grants of Plan-Based Awards

     46  

Narrative to 2019 Grants of Plan-Based Awards Table

     46  

Outstanding Equity Awards at 2019 Fiscal Year End

     48  

2019 Option Exercises and Stock Vested

     50  

Nonqualified Deferred Compensation at 2019 Fiscal Year End

     50  

Narrative to Nonqualified Deferred Compensation at 2019 Fiscal Year End Table

     51  

Potential Payments upon Termination or Change in Control

     51  

CEO and Median Employee Pay Ratio

     57  

PROPOSAL 2 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

     58  

AUDIT COMMITTEE REPORT

     59  

PRINCIPAL ACCOUNTANT FEES AND SERVICES

     60  

Pre-Approval Policies and Procedures

     60  

PROPOSAL 3 — APPROVAL OF AUDITORS

     61  

PROPOSAL 4 — STOCKHOLDER PROPOSAL

     62  

STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2021 ANNUAL MEETING OF STOCKHOLDERS

     66  

OTHER BUSINESS

     66  

 

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LOGO

SUMMARY

IDEX Corporation (the Company or IDEX) has prepared this proxy statement (Proxy Statement) in connection with the solicitation by the Company’s Board of Directors (the Board) of proxies for the Annual Meeting of Stockholders to be held on Thursday, May 7, 2020, at 9:00 a.m. Central Time, at the DoubleTree Hotel, 5460 N. River Road, Rosemont, Illinois 60018 (the Annual Meeting). The Company commenced distribution of, or otherwise made available, this Proxy Statement and the accompanying materials on March 20, 2020.

Who is entitled to vote at the Annual Meeting?

You are entitled to vote if you owned shares of IDEX’s common stock, par value $0.01 per share (Common Stock) as of the close of business on March 13, 2020, the record date of the Annual Meeting. On the record date, a total of 76,239,242 shares of Common Stock were outstanding. Each share of Common Stock entitles its holder of record to one vote on each matter upon which votes are taken at the Annual Meeting. There is no cumulative voting. No other securities are entitled to be voted at the Annual Meeting.

How do I vote?

Even if you plan to attend the Annual Meeting in person, we encourage you to vote as soon as possible, using one of the methods listed below.

 

 

By Internet

 

 

 

By Telephone

 

 

 

By Mail

 

 

 

In Person

 

www.proxyvote.com

Open until 11:59 p.m. Eastern Time the day before the meeting date.

Have your proxy card in hand when you access the website and follow the instructions.

 

1-800-690-6903

Open until 11:59 p.m. Eastern Time the day before the meeting date.

Have your proxy card in hand when you call and follow the instructions.

 

Mark, sign and date

your proxy card and

return it in the postage-paid envelope or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717

 

If you decide to attend

the Annual Meeting,

you will be able to vote

in person, even if you

have previously voted

by Internet, telephone or mail.

If you vote by telephone or over the Internet, you should not mail your proxy card. If your completed proxy card or telephone or Internet voting instructions are received prior to the Annual Meeting, your shares will be voted in accordance with your voting instructions.

If your shares are held in “street name” (that is, they are held in the name of a broker, financial institution or other nominee), you will receive instructions with your materials that you must follow in order to have your shares voted. Please review your voting instruction form to determine whether you will be able to vote by telephone or over the Internet.



 

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What is a quorum for the Annual Meeting?

A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of outstanding shares of Common Stock present in person or represented by proxy will constitute a quorum. The Company will appoint election inspectors to determine whether or not a quorum is present, and to tabulate votes cast by proxy or in person. Under certain circumstances, a broker or other nominee may have discretionary authority to vote shares of Common Stock if instructions have not been received from the beneficial owner or other person entitled to vote.

The election inspectors will treat directions to withhold authority, abstentions and broker non-votes (which occur when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because such broker or other nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner) as present and entitled to vote for purposes of determining the presence of a quorum for the transaction of business at the Annual Meeting.

What are the voting requirements?

 

Proposal   Vote Required   Effect of Broker
Non-Votes
  Effect of Abstentions
       

Election of Directors

  “Plurality Plus” Standard   No effect   No effect
       

Advisory Vote on Executive

Compensation

  The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter   No effect   “Against”
       
Ratification of Auditors   The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter   No effect   “Against”
       
Stockholder Proposal Regarding a Report Related to Employee Representation on the Company’s Board of Directors   The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter   No effect   “Against”

What is the “Plurality Plus” Standard?

The Company’s Corporate Governance Guidelines provide for a Plurality Plus Standard with respect to the election of directors. Any nominee who receives a greater number of withhold votes than affirmative votes in an uncontested election is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committee of the Board within 90 days from the date of election.



 

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The Nominating and Corporate Governance Committee must then consider all of the relevant facts and circumstances and recommend to the Board the action to be taken with respect to the offer of resignation.

How does the Board recommend that I vote?

The Board recommends that you vote:

1. FOR the election of the Company’s nominees as directors.

2. FOR the approval of the compensation of the Company’s named executive officers.

3. FOR the ratification of the appointment of auditors.

4. AGAINST the stockholder proposal regarding a report related to employee representation on the Company’s Board of Directors.

What happens if I do not specify a choice for a matter when returning my proxy card?

If you sign and return your proxy card but do not give voting instructions, your shares will be voted as recommended by the Board, and in the discretion of the proxy holders as to any other business which may properly come before the Annual Meeting.

What can I do if I change my mind after I vote my shares?

You can revoke a proxy prior to the completion of voting at the Annual Meeting by:

 

1.

Mailing a new proxy card with a later date.

2.

Casting a new vote on the Internet or by telephone.

3.

Sending a written notice of revocation addressed to Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045.

4.

Voting in person at the Annual Meeting.

If your shares are held in “street name,” please contact your broker, financial institution or other nominee and comply with such nominee’s procedures if you want to change or revoke your previous voting instructions.

Who will solicit the proxies and who will pay the cost of this proxy solicitation?

The Company will bear the costs of preparing and mailing this Proxy Statement and other costs of the proxy solicitation made by the Board. Certain of the Company’s officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Board’s recommendations, but no additional remuneration will be paid by the Company for the solicitation of those proxies. Any such solicitations may be made by personal interview, telephone, email or facsimile transmission.

The Company has made arrangements with brokerage firms and other record holders of its Common Stock to forward proxy solicitation materials to the beneficial owners of such Common Stock. The Company will reimburse those brokerage firms and others for their reasonable out-of-pocket expenses in connection with this work.

In addition, the Company has engaged Morrow Sodali LLC, 470 West Avenue, Stamford, Connecticut, to assist in proxy solicitation and collection at a cost of $6,500, plus out-of-pocket expenses.



 

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Why did I receive a “Notice of Internet Availability of Proxy Materials” but no proxy materials?

As permitted under rules of the Securities and Exchange Commission (SEC), we are making our proxy materials available to stockholders electronically via the Internet. We believe electronic delivery expedites receipt of our proxy materials by stockholders, while lowering the costs and reducing the environmental impact of the Annual Meeting.

If you receive a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials by mail unless you specifically request them. Instead, the Notice of Internet Availability will provide instructions as to how you may review the proxy materials and submit your voting instructions over the Internet.

If you receive the Notice of Internet Availability by mail and would like to receive a printed copy of the proxy materials, you should follow the instructions in the notice for requesting a printed copy. In addition, the proxy card contains instructions for electing to receive proxy materials over the Internet or by mail in future years.



 

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PROPOSALS TO BE VOTED ON AT THE 2020 ANNUAL MEETING

PROPOSAL 1 — ELECTION OF DIRECTORS

The Company’s Restated Certificate of Incorporation, as amended, provides for a three-class Board of Directors, with one class being elected each year for a term of three years. The Board currently consists of ten members, four of whom are Class I directors whose terms will expire at this year’s Annual Meeting, three of whom are Class II directors whose terms will expire at the Annual Meeting to be held in 2021, and three of whom are Class III directors whose terms will expire at the Annual Meeting to be held in 2022.

 

         
 

Overview of IDEX Board of Directors

 

       
 

 

Our Directors Exhibit:

 

High integrity

 

Loyalty to the Company and commitment to its success

 

Proven record of success

 

Knowledge of corporate governance and practices

 

Our Directors Bring to the Boardroom:

 

High level of leadership experience

 

    

 

Board Composition

 

Independent Directors: 9 of 10

 

Average IDEX Board Tenure: 6.5 years

 

Average Age: 59

 

Diversity of gender, race or ethnicity: 2 of 10

  

 

 

Specialized industry expertise

 

Financial expertise

 

Extensive knowledge of the Company

       
         
         

Set forth below is a summary of the Board’s collective qualifications, experiences and backgrounds.

 

 

LOGO

Senior Leadership Experience Current or Former CEO Other Public Company Board Experience Broad International Experience Extensive M&A Experience Extensive Knowledge of IDEX's Business and Industry High Level of Financial Literacy Number of Directors 0 1 2 3 4 5 6 7 8 9 10

 

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The Board has nominated four individuals for election as Class I directors to serve for a three-year term expiring at the Annual Meeting to be held in 2023, or upon the election and qualification of their successors. The nominees of the Board are Andrew K. Silvernail, Katrina L. Helmkamp, Mark A. Beck and Carl R. Christenson, each of whom is currently serving as a director of the Company.

The nominees and the directors serving in Class II and Class III whose terms expire in future years and who will continue to serve after the Annual Meeting are listed below with brief statements setting forth their present principal occupations and other information, including any directorships in other public companies, and their particular experiences, qualifications, attributes and skills that led to the conclusion they should serve as directors. If for any reason any of the nominees are unavailable to serve, proxies solicited hereby may be voted for a substitute. The Board, however, expects the nominees to be available.

 

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Our Board of Directors recommends that you vote

FOR the election of each of the 2020 Class I director nominees

 

  

 

            

 

2020 DIRECTOR NOMINEES

 

 

LOGO

Mr. Silvernail was appointed Chairman of the Board effective January 1, 2012. Mr. Silvernail has served as Chief Executive Officer and a director of the Company since August 10, 2011. From August 10, 2011 to February 21, 2020, Mr. Silvernail also served as President of the Company. Prior to that, Mr. Silvernail served since January 2011 as Vice President Group Executive of the Company’s Health & Science Technologies, Global Dispensing and Fire & Safety/Diversified Products business segments. From February 2010 to December 2010, Mr. Silvernail was Vice President Group Executive of the Company’s Health & Sciences Technologies and Global Dispensing business segments. Mr. Silvernail joined IDEX in January 2009 as Vice President Group Executive of Health & Science Technologies.

Andrew K. Silvernail Age: 48 Director since August 2011 Chairman, President and Chief Executive Officer

Mr. Silvernail’s relevant experience with engineering and technology industries in general, together with his extensive management experience, led to the conclusion that he should serve on the Board of Directors.

Mr. Silvernail received a bachelor of science degree in government from Dartmouth College and a master of business administration degree from Harvard University.

Mr. Silvernail is a director of Stryker Corporation.

 

 

 

 

LOGO

Ms. Helmkamp has served as Chief Executive Officer of Cartus Corporation, the relocation services subsidiary of Realogy Holdings Corp., the largest full-service residential real estate services company in the United States, since June 2018. Previously, Ms. Helmkamp served as Chief Executive Officer of Lenox Corporation from November 2016 to June 2018. Prior to Lenox Corporation, Ms. Helmkamp served as Chief Executive Officer of SVP Worldwide from 2010 through 2014, and as Senior Vice President, North America Product for Whirlpool Corporation from 2008 to 2010.

Katrina L. Helmkamp Age: 53 Director since November 2015 Independent Committees: Compensation Nominating and Corporate Governance

Ms. Helmkamp’s operating leadership skills and her experience across multiple markets and technologies led to the conclusion that she should serve on the Board of Directors. During her time at SVP Worldwide and Whirlpool Corporation, Ms. Helmkamp was responsible for managing the operations and profitability of global businesses that derived a substantial portion of their revenues from outside of the United States.

 

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In addition, Ms. Helmkamp successfully oversaw numerous new product development and technology initiatives, including the launch of new products and service categories with improved margins and quality. Ms. Helmkamp also has significant mergers and acquisitions experience, both in identifying and evaluating potential targets, as well as leading post-acquisition integration activities.

Ms. Helmkamp received a bachelor of science degree in industrial engineering and a master of business administration degree from Northwestern University.

 

 

 

 

LOGO

Mr. Beck is the co-founder and Chief Executive Officer of B-Square Precision, LLC, a private company engaged in the acquisition and management of companies that manufacture high-precision tools, dies, molds and components. Previously, Mr. Beck served as President and Chief Executive Officer of JELD-WEN Holding, Inc. (JELD-WEN), one of the world’s largest door and window manufacturers, from November 2015 to February 2018, and was a director of JELD-WEN from May 2016 to February 2018. Prior to JELD-WEN, Mr. Beck served as an Executive Vice President at Danaher Corporation, leading Danaher’s water quality and dental programs, beginning in April 2014. Previously, he spent 18 years with Corning Incorporated in a series of management positions with increasing responsibility, culminating in his appointment as Executive Vice President overseeing Corning’s environmental technologies and life science units in July 2012. He also served on the board of directors of Dow-Corning Corporation from 2010 to 2014.

Mark A. Beck Age: 53 Director since January 2018 Independent Committees: Audit

Mr. Beck’s experience as a chief executive officer of a public company with significant international operations and his track record of innovation and successfully integrating acquired businesses led to the conclusion that he should serve on the Board of Directors.

Mr. Beck received a bachelor of arts degree in business management from Pacific University and a master of business administration degree from Harvard University.

Mr. Beck is a director of Owens & Minor, Inc.

 

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LOGO

Mr. Christenson has served since April 2014 as Chief Executive Officer and Chairman of the Board of Directors of Altra Industrial Motion Corp. (Altra), a leading global designer, producer and marketer of a wide range of electromechanical power transmission motion control products. From January 2009 to April 2014, Mr. Christenson served as President and Chief Executive Officer of Altra. Prior to that, Mr. Christenson served as President and Chief Operating Officer of Altra from January 2005 to December 2008. From 2001 to 2005, Mr. Christenson was President of Kaydon Bearings, a manufacturer of custom-engineered bearings and a division of Kaydon Corporation. Prior to joining Kaydon, Mr. Christenson held several management positions at TB Wood’s Incorporated and several positions at the Torrington Company, a division of Ingersoll Rand.

Carl R. Christenson Age: 60 Director since June 2019 Independent Committees: Compensation

Mr. Christenson’s extensive experience leading industrial businesses and executing strategic acquisitions, including in his current role as chief executive officer of a public company with global operations, led to the conclusion that he should serve on the Board of Directors.

Mr. Christenson received bachelor of science and master of science degrees in Mechanical Engineering from the University of Massachusetts and a master of business administration degree from Rensselaer Polytechnic Institute.

 

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OTHER INCUMBENT DIRECTORS

Class II: Three-Year Term Expires in 2021

 

LOGO

Mr. Cook is our Lead Director. He served as Chairman of the Board of Donaldson Company, Inc. from prior to 2009 to April 2016. Mr. Cook retired as the President and Chief Executive Officer of Donaldson in April 2015, having served since prior to 2009.

Mr. Cook’s strong business and organizational leadership skills and his relevant experience in technology industries led to the conclusion that he should serve on the Board of Directors. Throughout his 35-year career at Donaldson, a technology-driven global company that manufactures filtration systems designed to remove contaminants from air and liquids, Mr. Cook served in several senior executive positions, and was elected as a director in 2004.

William M. Cook Age: 65 Director since April 2008 Independent Committees: Audit

Mr. Cook received a bachelor of science degree in business administration and a master of business administration degree from Virginia Polytechnic Institute and State University.

Mr. Cook is a director of Neenah, Inc. and Axalta Coating Systems, Ltd.

 

 

 

LOGO

Ms. Warner has served as President and Chief Executive Officer and as a director of Renewable Energy Group, Inc., an advanced biofuel producer, since January 2019. Previously, Ms. Warner served as Executive Vice President, Operations for Andeavor (formerly known as Tesoro Corporation) from August 2016 until October 2018, when Andeavor was acquired by Marathon Petroleum Corp. Prior to that, Ms. Warner served as Andeavor’s Executive Vice President, Strategy and Business Development, since October 2014. From 2012 to 2014, Ms. Warner was Chairman and Chief Executive Officer of Sapphire Energy, Inc. From 2009 to 2011, Ms. Warner was Chairman and President of Sapphire Energy. Prior to 2009, Ms. Warner was Group Vice President, Global Refining, at BP plc.

Cynthia J. Warner Age: 60 Director since February 2013 Independent Committees: Compensation Nominating and Corporate Governance (Chair)

Ms. Warner’s operating leadership skills, international experience and extensive experience in the energy, refining and transportation industries led to the conclusion that she should serve on the Board of Directors. During her 25 years at BP and Amoco, Inc. (prior to its acquisition by BP), Ms. Warner gained significant knowledge of the global energy industry and served in numerous leadership roles, including overseeing BP’s Global Refining business and its health, safety, security and environmental efforts, with a consistent record of success in coordinating the operations of thousands of employees across BP’s global facilities.

 

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In her role as Chief Executive Officer of Sapphire Energy, an alternative energy venture, Ms. Warner had oversight responsibility for the raising of substantial investment capital and the successful completion of a new demonstration facility for the company.

Ms. Warner received a bachelor of engineering degree in chemical engineering from Vanderbilt University and a master of business administration degree from Illinois Institute of Technology.

Ms. Warner is a director of Sempra Energy.

 

 

 

LOGO

Mr. Buthman retired from Kimberly-Clark Corporation, a leading global manufacturer of consumer packaged goods and personal care products, in 2015, where he was Executive Vice President and Chief Financial Officer from January 2003 to April 2015. During his 33-year career at Kimberly-Clark, Mr. Buthman held a wide range of leadership roles, led or participated in more than 50 acquisition transactions totaling more than $10 billion in value and was part of an executive team that created more than $20 billion in shareholder value during his tenure as Chief Financial Officer.

Mark A. Buthman Age: 58 Director since April 2016 Independent Committees: Audit (Chair)

Mr. Buthman’s experience as a Chief Financial Officer of a Fortune 150 company with significant international operations and as a public company director led to the conclusion that he should serve on the Board of Directors. Mr. Buthman is a disciplined financial leader with a track record of allocating capital in shareholder-friendly ways and his insight is extremely valuable to our Board of Directors and management.

Mr. Buthman received a bachelor of business administration degree in finance from the University of Iowa.

Mr. Buthman is a director of West Pharmaceutical Services, Inc.

 

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Class III: Three-Year Term Expires in 2022

 

LOGO

Mr. Mrozek served as Vice Chairman and Chief Financial Officer of The ServiceMaster Company, a residential and commercial service company, until his retirement in March 2008.

Mr. Mrozek’s strategic and operating leadership skills, his extensive experience and expertise in the business services industry and his financial reporting expertise led to the conclusion that he should serve on the Board of Directors. Through over 20 years of executive experience in various senior positions in general management, operations and finance at ServiceMaster, including more than eight years as President and Chief Operating Officer of ServiceMaster or one of its largest segments, Mr. Mrozek developed extensive knowledge of the business services industry and gained valuable financial expertise and experience in mergers and acquisitions.

Ernest J. Mrozek Age: 65 Director since July 2010 Independent Committees: Audit

Prior to joining ServiceMaster in 1987, Mr. Mrozek spent 12 years in public accounting with Arthur Andersen & Co. Mr. Mrozek has also acquired substantial experience in corporate governance as a director on the boards of several public and private companies.

Mr. Mrozek received a bachelor of science degree in accountancy with honors from the University of Illinois and is a certified public accountant, on inactive status.

Mr. Mrozek is a director of Advanced Disposal Services, Inc.

 

 

 

 

LOGO

Mr. Satterthwaite has served since October 2019 as President and Chief Operating Officer of Cummins, Inc., a global power leader that designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products. From April 2015 through October 2019, Mr. Satterthwaite served as President of Cummins Distribution Business, a unit of Cummins. Prior to that, Mr. Satterthwaite served as President of Cummins Power Generation from June 2008 to April 2015.

Livingston L. Satterthwaite Age: 58 Director since April 2011 Independent Committees: Compensation (Chair) Nominating and Corporate Governance

Mr. Satterthwaite’s business leadership and sales skills, international experience and extensive experience in industrial manufacturing led to the conclusion that he should serve on the Board of Directors. Since joining Cummins in 1988, Mr. Satterthwaite has held various positions at Cummins Power Generation and other divisions of Cummins, including 14 years in managerial and sales positions in the United Kingdom and Singapore.

 

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Prior to joining Cummins, Mr. Satterthwaite spent four years at Schlumberger Limited, an oil field services provider, as a general field engineer.

Mr. Satterthwaite received a bachelor of science degree in civil engineering from Cornell University and a master of business administration degree from Stanford University.

 

 

 

LOGO

Mr. Parry served as Vice Chairman of Illinois Tool Works Inc. (ITW) from 2010 until his retirement in April 2017. From prior to 2009 until 2010, Mr. Parry was Executive Vice President of ITW with responsibility for the Polymers and Fluids Group.

Mr. Parry’s strategic and operating leadership skills and global commercial perspective gained from over 30 years of international business leadership experience, his significant acquisition experience and his extensive

expertise in the industrial products manufacturing industry led to the conclusion that he should serve on the Board of Directors. During 18 years of executive and management experience in various senior management positions at ITW, a multinational manufacturer of a diversified range of industrial products and equipment, Mr. Parry successfully grew the operations and profitability of multiple business units and helped ITW complete numerous acquisitions.

David C. Parry Age: 65 Director since December 2012 Independent Committees: Compensation Nominating and Corporate Governance

Prior to joining ITW in 1994, Mr. Parry spent 17 years in various executive and management positions at Imperial Chemical Industries, which at the time was one of the largest chemical producers in the world.

Mr. Parry received a bachelor of science degree in chemistry, a master of science degree in chemistry and a Ph.D. in polymer chemistry from Victoria University of Manchester, Manchester, England.

 

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CORPORATE GOVERNANCE

Framework for Corporate Governance

The Board of Directors has the ultimate authority for the management of the Company’s business. The Corporate Governance Guidelines, the charters of the Board committees, the Code of Business Conduct and Ethics, and the Standards for Director Independence (Governance Documents) provide the framework for the governance of the Company. Copies of the current Governance Documents are available under the Investors link on the Company’s website at www.idexcorp.com.

Corporate Governance Guidelines and Code

of Business Conduct and Ethics

The Corporate Governance Guidelines address matters such as election of directors, size and retirement age for the Board, Board composition and membership criteria, the role and responsibilities of the Board and each of its committees, Board evaluations and the frequency of Board meetings (including meetings to be held without the presence of management).

The Code of Business Conduct and Ethics sets forth the guiding principles of business ethics and certain legal requirements applicable to all of the Company’s employees and directors.

Director Independence

The Board has adopted standards for determining whether a director is independent. These standards are based upon the listing standards of the New York Stock Exchange (NYSE) and applicable laws and regulations and are available on the Company’s website as described above. The Board also reviewed commercial relationships between the Company and organizations with which directors were affiliated by service as an executive officer. The relationships with these organizations involved the Company’s sale or purchase of products or services in the ordinary course of business that were made on arm’s-length terms and other

circumstances that did not affect the relevant directors’ independence under applicable law and NYSE listing standards.

The Board has affirmatively determined, based on these standards and after considering the relationships described immediately above, that the following directors are independent: Messrs. Beck, Buthman, Christenson, Cook, Mrozek, Parry and Satterthwaite, and Mss. Helmkamp and Warner. The Board has also determined that Mr. Silvernail is not independent because he is the Chief Executive Officer of the Company (and was, until February 21, 2020, President of the Company). All standing Board committees are, and throughout fiscal year 2019 were, composed entirely of independent directors.

Director Nominations

The Board believes that maintaining a diverse membership with varying backgrounds, skills, expertise and other differentiating personal characteristics promotes inclusiveness, enhances the Board’s deliberations and enables the Board to better represent all of the Company’s constituents. Accordingly, the Board is committed to seeking out highly qualified women and minority candidates as well as candidates with diverse backgrounds, skills and experiences as part of each Board search the Company conducts. The Board considers the following in selecting nominees for the Board:

Experience (in one or more of the following):

 

    high level leadership experience in business or administrative activities;

 

    specialized expertise in the industries in which the Company competes;

 

    financial expertise;

 

    breadth of knowledge about issues affecting the Company;

 

    ability and willingness to contribute special competencies to Board activities; and
 

 

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    expertise and experience that is useful to the Company and complementary to the background and experience of other Board members, so that an optimal balance and diversity of Board members may be achieved and maintained.

Personal attributes and characteristics:

 

    personal integrity;

 

    loyalty to the Company and concern for its success and welfare, and willingness to apply sound independent business judgment;

 

    awareness of a director’s vital part in the Company’s good corporate citizenship and corporate image;

 

    time available for meetings and consultation on Company matters; and

 

    willingness to assume fiduciary responsibilities.

Qualified candidates for membership on the Board shall not be discriminated against with regard to age, race, color, religion, sex, ancestry, national origin, sexual orientation or disability. In the past, the Company has engaged executive search firms to help identify and facilitate the screening and interviewing of director candidates. Any search firm retained by the Company to find director candidates is instructed to take into account all of the considerations used by our Nominating and Corporate Governance Committee, including diversity. After conducting an initial evaluation of a candidate, the Nominating and Corporate Governance Committee will interview that candidate if it believes the candidate is suitable to be a director. The Nominating and Corporate Governance Committee may also ask the candidate to meet with other members of the Board.

If the Nominating and Corporate Governance Committee believes a candidate would be a valuable addition to the Board, it will

recommend to the full Board appointment or election of that candidate. Annually, the Nominating and Corporate Governance Committee reviews the qualifications and backgrounds of the directors, as well as the overall composition of the Board, and recommends to the full Board the slate of directors for nomination for election at the annual meeting of stockholders.

Board Leadership

The Company’s Bylaws permit the Board to select its Chairman in the manner it determines to be most appropriate. The Corporate Governance Guidelines provide that, if the Chairman of the Board is not the Chief Executive Officer, and is an independent director, there shall be no Lead Director. If the Chairman of the Board is the Chief Executive Officer or is not an independent director, the independent directors shall elect an independent Lead Director.

Mr. Cook has served as Lead Director since immediately following the 2015 Annual Meeting of Stockholders. The responsibilities of the Lead Director include:

 

    coordinating the activities of the independent directors;

 

    reviewing the Board meeting agendas and providing the Chairman with input on the agendas;

 

    preparing the agendas for executive sessions of the independent directors and chairing those sessions;

 

    facilitating communications between the Chairman and other members of the Board; and

 

    coordinating the performance evaluation of the Chief Executive Officer.

The independent non-management directors of the Board meet separately as a group at every regularly scheduled Board meeting. The Lead

 

 

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Director generally presides at these non-management executive sessions. During 2019, the Board held seven meetings.

The Board believes that its current leadership structure provides independent board leadership and engagement while deriving the benefit of having the Chief Executive Officer also serve as Chairman of the Board.

The Chief Executive Officer, as the individual with primary responsibility for managing the Company’s day-to-day operations, is best positioned to chair regular Board meetings and to oversee discussion on business and strategic issues. Coupled with the existence of a Lead Director and regular executive sessions of the non-management directors, this structure provides independent oversight, including risk oversight, while facilitating the exercise of the Board’s responsibilities.

During 2019, each director attended more than 75% of the aggregate number of meetings of the Board and of committees of the Board of which he or she was a member. The Company encourages its directors to attend the annual meeting of stockholders but has no formal policy with respect to that attendance. All of the current directors attended the 2019 Annual Meeting of Stockholders.

Board’s Role in Risk Oversight

The Board oversees an annual assessment of enterprise risk exposure, and the management of such risk, conducted by the Company’s executives.

When assessing enterprise risk, the Board focuses on the achievement of organizational objectives, including strategic objectives, to improve long-term performance and enhance stockholder value. Direct oversight allows the Board to assess management’s inclination for risk, to determine what constitutes an appropriate level of risk for the Company and to discuss with management the means by which to control risk.

Board and Committee Assessment Process

On an annual basis, the Board and each Committee conduct assessments, which consist of written self-assessment questionnaires, supplemented by individual interviews of each director conducted by the Chair of the Nominating and Corporate Governance Committee. The results of the assessment process are then reviewed and discussed by the Board and each Committee and have led to process and oversight improvements.

Board’s Engagement with Management

The Board approves the Company’s executive officers, delegates responsibilities for the conduct of the Company’s operations to those officers and monitors their performance. In addition, members of the Board informally mentor executive officers, meeting with such officers individually to share insights and experiences accumulated over the course of the directors’ careers.

Each year, some directors visit Company manufacturing facilities and meet with their leaders. During 2019, directors visited sites in the United States, Europe and China. Some directors attend the Company’s annual global leadership conference of about 150 leaders each year. In addition, each year the Board holds at least one meeting at a Company manufacturing facility where all directors attend a daily management meeting, receive a tour of the facility and participate in an operational review with senior leadership.

Board’s Role in Talent Development and Strategic Planning

Our Board calendar includes at least one meeting per year at which the Board participates in an extensive review of the Company’s talent management and retention strategies, leadership development pipeline and succession plans for senior management.

Each fall the Board participates in a multi-day three-year enterprise strategy review with the

 

 

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Company’s executive officers and other senior management. Management and the Board agree

upon a strategy and it is used as a lens for decision making at each Board meeting following the annual comprehensive review. As a result, strategy discussions are a regular feature of Board meetings throughout the year.

Director Onboarding and Education

All new directors participate in our director onboarding program. The onboarding process includes in-person meetings at the Company’s headquarters with senior leaders to familiarize new directors with the Company’s strategic vision, values and culture; operational and financial reporting structure; and legal, compliance and governance framework. In addition, new directors have also attended training courses led by IDEX senior leaders covering the 80/20 business process that serves as the foundation of IDEX’s operating model and seeks to accelerate profitable growth by focusing resources on our highest value opportunities.

The Board encourages all directors to participate in continuing director education programs, either individually or together with other Committee members, and directors are reimbursed for their expenses for such programs. Over the past year, directors attended off-site education seminars covering a variety of topics, including board and audit committee leadership, strategy, cybersecurity, shareholder activism and regulatory developments. In addition, last spring all directors participated in an educational session led by an outside expert on responsible supply chain practices, which was delivered as part of a regularly-scheduled Board meeting.

Investor Outreach

We value the input of our stockholders and believe that it is important to understand their questions and concerns about the Company. During 2019, we met with a number of our stockholders and prospective stockholders to

answer questions about the Company and learn about matters that are important to them. We plan to continue our investor outreach efforts during 2020.

Corporate Social Responsibility/Non-Financial Highlights

As an embodiment of our commitment to focus on what matters to our various stakeholders, in March 2019, we published our first Corporate Social Responsibility Report, which is available under the Corporate Social Responsibility link on our website at www.idexcorp.com. We continued to make great progress in 2019 as a Company in building a culture and environment where all of our employees are engaged and have the tools and support they need in order to truly do and be their best every day.

Employee Engagement: We have best-in-class employee engagement. In 2019, we were in the top quartile of manufacturing companies in all three indices (employee engagement, manager effectiveness and performance enablement) of our employee engagement survey, with a response rate of 88% to the survey. In 2018, we were in the top quartile on employee engagement and manager effectiveness.

Community Involvement: We are proud of the efforts of our employees during 2019 to positively impact the communities in which we live and work. The IDEX Foundation provides all business units globally a way to give back to the communities in which we live. From partnering with local food banks and soup kitchens, to helping to build or improve schools, to providing toys, clothing and other essentials to impoverished or sick children, to donating and assembling toiletry kits for the homeless, IDEX employees around the world are solving problems and improving the lives of the people around them. In partnership with the IDEX Foundation, in 2019 more than 2,594 IDEX employees participated in over 66 community or charitable events, spanning three continents and touching thousands of lives.

 

 

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Communications with Our Board

Stockholders and other interested parties may contact the Board and the directors by writing to Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045. Inquiries sent by mail will be reviewed, sorted and summarized by Ms. Cade before they are forwarded to any director.

BOARD COMMITTEES

Important functions of the Board are performed by committees comprised of members of the Board. There are three standing committees of the Board: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Each committee has a written charter that is available on the Company’s website as described above.

Subject to applicable provisions of the Company’s Bylaws and based on the

recommendations of the Nominating and Corporate Governance Committee, the Board as a whole appoints the members of each committee each year at its February meeting. The Board may, at any time, appoint or remove committee members or change the authority or responsibility delegated to any committee, subject to applicable law and NYSE listing standards.

The following table summarizes the current membership of the committees of the Board.

 

 

Director

 

 

Audit
Committee

 

 

Compensation
Committee

 

 

Nominating
and
Corporate
Governance
Committee

 

 

 

Mark A. Beck

 

 

 

Ö

       

 

Mark A. Buthman

 

 

 

 

Ö

       

 

Carl R. Christenson

 

     

 

 

Ö

   

 

William M. Cook

 

 

 

 

Ö

       

 

Katrina L. Helmkamp

 

     

 

 

Ö

 

 

 

Ö

 

Ernest J. Mrozek

 

 

 

 

Ö

       

 

 

David C. Parry

     

 

 

Ö

 

 

 

Ö

 

Livingston L. Satterthwaite

 

     

 

Ö

 

 

 

Ö

 

Cynthia J. Warner

 

     

 

 

Ö

 

 

 

Ö

Audit Committee

Pursuant to its charter, the Audit Committee has the authority and responsibility to:

 

    monitor the integrity of the Company’s financial statements, financial reporting process and systems of internal controls regarding finance, accounting, legal and regulatory compliance;

 

    monitor the qualifications, independence and performance of the Company’s independent auditor and monitor the performance of the Company’s internal audit function;

 

    hire and fire the Company’s independent auditor and approve any audit and non-audit work performed by the independent auditor;

 

    provide an avenue of communication among the independent auditor, management and the Board;

 

    prepare the audit committee report that SEC rules require to be included in the Company’s annual proxy statement;
 

 

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    provide oversight of the Company’s compliance and corporate environmental health and safety functions; and

 

    administer the Company’s Related Person Transactions Policy (described further below).

While the Board has the ultimate oversight responsibility for the risk management process, the Audit Committee focuses on financial risk management and exposure, and legal compliance. The Audit Committee receives an annual risk assessment report from the Company’s internal auditors and reviews and discusses the Company’s financial risk exposures and the steps management has taken to monitor, control and report those exposures.

During 2019, Messrs. Beck, Buthman, Cook and Mrozek served as members of the Audit Committee, and the Board determined that each of them is an “audit committee financial expert,” as defined by SEC rules. Mr. Mrozek served as Chair of the Audit Committee through the filing of the Company’s annual report on Form 10-K for the year ended December 31, 2018 in February 2019, after which Mr. Buthman was elected as Chair, effective as of March 2, 2019.

The Audit Committee has adopted a written Related Person Transactions Policy regarding the review, approval or ratification of transactions with related persons. All related person transactions are approved by the Audit Committee. If the transaction involves a related person who is an Audit Committee member or immediate family member of an Audit Committee member, that Audit Committee member will not be included in the deliberations or vote regarding approval. In approving the transaction, the Audit Committee must determine that the transaction is fair and reasonable to the Company. At the first Audit Committee meeting of each calendar year, or a subsequent meeting if the Audit Committee so chooses, the Audit Committee reviews any previously approved or ratified related person transactions that remain ongoing and have a

remaining term of more than six months or remaining amounts payable to or receivable from the Company of more than $10,000. Based on all relevant facts and circumstances, taking into consideration the Company’s contractual

obligations, the Audit Committee determines if it is in the best interests of the Company and its stockholders to continue, modify or terminate any such related person transactions.

During 2019, the Audit Committee held eight meetings.

Compensation Committee

The Compensation Committee’s primary purpose and responsibilities are to:

 

    establish the Company’s compensation philosophy and structure the Company’s compensation programs to be consistent with that philosophy;

 

    develop and recommend to the independent members of the Board for approval the compensation of the Chief Executive Officer;

 

    approve the compensation of the executive officers of the Company (other than the Chief Executive Officer), the Chief Executive Officer’s direct reports and selected other managers identified by the Compensation Committee from time to time, and communicate such compensation decisions to the Board;

 

    develop and recommend to the Board for approval the compensation of the Board;

 

    review and recommend to the Board the Company’s compensation discussion and analysis to be included in the Company’s annual proxy statement; and

 

    produce a Compensation Committee Report on executive compensation to be included in the Company’s annual proxy statement.
 

 

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To assist the Compensation Committee in discharging its responsibilities, the Compensation Committee retained Frederic W. Cook & Co., Inc. (F.W. Cook) to act as an outside consultant. F.W. Cook is engaged by, and reports directly to, the Compensation Committee.

The Compensation Committee has reviewed the nature of the relationship between itself and F.W. Cook, including all personal and business relationships between the committee members, F.W. Cook and the individual compensation consultants who provide advice to the Compensation Committee. Based on its review, the Compensation Committee did not identify any actual or potential conflicts of interest in F.W. Cook’s engagement as an independent consultant.

F.W. Cook works with the Compensation Committee and management to structure the Company’s compensation programs and to evaluate the competitiveness of its executive compensation levels. F.W. Cook’s primary areas of assistance to the Compensation Committee are:

 

    analyzing market compensation data for all executive positions;

 

    advising on the structure of the Company’s compensation programs;

 

    advising on the terms of equity awards;

 

    assessing the relationship between named executive officer compensation and Company financial performance;

 

    reviewing the risk associated with the Company’s compensation programs; and

 

    reviewing materials to be used in the Company’s annual proxy statement.

F.W. Cook periodically provides the Compensation Committee and management market data on a variety of compensation-related topics. The Compensation Committee has

authorized F.W. Cook to interact with the Company’s management, as needed, on behalf of the Compensation Committee, to obtain or confirm information.

During 2019, Mr. Christenson (since June 2019), Ms. Helmkamp, Mr. Parry, Mr. Satterthwaite and Ms. Warner served as members of the Compensation Committee. None of these directors (i) was an officer or employee of the Company or any of its subsidiaries during 2019, (ii) was formerly an officer of the Company or any of its subsidiaries, or (iii) had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K under the Securities Act of 1933, as amended. There were no relationships between the Company’s executive officers and the members of the Compensation Committee that require disclosure under Item 407(e)(4) of Regulation S-K.

During 2019, the Compensation Committee held six meetings.

Nominating and Corporate Governance

Committee

The Nominating and Corporate Governance Committee’s primary purpose and responsibilities are to:

 

    develop and recommend to the Board corporate governance principles and a code of business conduct and ethics;

 

    develop and recommend criteria for selecting new directors;

 

    identify individuals qualified to become directors consistent with criteria approved by the Board, and recommend that the Board select such individuals as nominees for election to the Board;

 

    make recommendations to the Board regarding any director who submits an offer of resignation by reason of the Plurality Plus voting standard under the Company’s Corporate Governance Guidelines;
 

 

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    screen and recommend to the Board individuals qualified to become Chief Executive Officer in the event of a vacancy and any other senior officer whom the committee may wish to approve; and

 

    oversee evaluations of the Board, individual Board members and Board committees.

It is the policy of the Nominating and Corporate Governance Committee to consider nominees for the Board recommended by the Company’s stockholders in accordance with the procedures described under “STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2021 ANNUAL MEETING OF STOCKHOLDERS” below.

Stockholder nominees who are nominated in accordance with these procedures will be given the same consideration as nominees for director from other sources.

During 2019, Ms. Helmkamp, Mr. Parry, Mr. Satterthwaite and Ms. Warner served as members of the Nominating and Corporate Governance Committee.

During 2019, the Nominating and Corporate Governance Committee held three meetings.

 

 

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COMPENSATION OF DIRECTORS

The objectives of our director compensation program are to attract highly-qualified individuals to serve on our Board and to align our directors’ interests with the interests of our stockholders. The Compensation Committee periodically reviews the program to ensure that it continues to meet these objectives.

The Company believes that to attract and retain qualified directors, pay levels should be targeted at the 50th percentile (or median) of pay levels for directors at comparable companies. On at least a biennial basis, the Compensation Committee, with the assistance of F.W. Cook, evaluates the competitiveness of director compensation. The primary reference point for the determination of market pay is the peer group of companies. The peer group used in this analysis was the same peer group used for the Company’s executive compensation analysis.

For further details on this topic, refer to “Peer Companies” under “Setting Executive Compensation” in the Compensation Discussion and Analysis below. Market composite data derived from pay surveys available to F.W. Cook and to the Company is also used.

Our director compensation for 2019 and 2020 is set forth below. The changes for 2020 are detailed in the Company’s Amended and Restated Non-Employee Director Compensation Policy (Director Compensation Policy) and reflect market-based adjustments as a result of the analysis described above.

 

     
     

 

2019

 

  

 

2020

     

 

 

Annual Retainer and Meeting Fees

  

 

 

$ 85,000  

  

 

 

$ 90,000  

     

 

 

Committee Chair Retainer

         
     

 

 

Audit Committee

  

 

 

$ 15,000  

  

 

 

$ 18,000  

     

 

 

Compensation Committee

  

 

 

$ 10,000  

  

 

 

$ 12,500  

     

 

 

Nominating and Corporate Governance Committee

  

 

 

$ 10,000  

  

 

 

$ 10,000  

     

 

 

Additional Lead Director Fees

         
     

 

 

Annual Retainer

  

 

 

$ 15,000  

  

 

 

$ 15,000  

     

 

 

Annual Equity Grant (100% Restricted Stock Units)

  

 

 

$ 15,000  

  

 

 

$ 15,000  

     

 

Value of Equity Grants Upon Initial Election to the Board (100% Restricted Stock Units)

 

  

 

Pro-rated annual  

 

grant  

  

 

Pro-rated annual  

 

grant  

     

 

 

Value of Annual Equity Grants (100% Restricted Stock Units)

  

 

 

$130,000  

  

 

 

$145,000  

 

Equity Grants

 

 

Under the Director Compensation Policy, equity grants upon initial election to the Board are made on the date of appointment. Initial equity grant values are equal to the annual grant value prorated for the remaining period of time until the next Annual Meeting. Annual equity grants to continuing directors are made on the date of the Annual Meeting. All grants are structured to provide 100% of the expected value in the form of restricted stock unit awards and are made under the IDEX Corporation Incentive Award Plan (Incentive Award Plan). The restricted

stock units vest in full on the earliest of the third anniversary of the grant date, retirement, failure of the director to be re-elected to the Board, or a change in control of the Company. The restricted stock units are non-transferable until the recipient is no longer serving as a director and are subject to forfeiture if the director terminates service as a director for reasons other than death, disability, retirement, or failure to be re-elected to the Board.

 

 

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Since the start of 2015, directors have had the ability to defer payment of all or a portion of their annual equity grant.

Directors Deferred Compensation Plan

Under the Company’s Directors Deferred Compensation Plan, directors are permitted to defer their cash compensation as of the date their compensation would otherwise be payable. In general, directors must make elections to defer fees payable during a calendar year by the end of the preceding calendar year. Newly appointed directors have up to 30 days from their appointment to elect to defer future fees.

All amounts deferred are recorded in a memorandum account for each director and are credited or debited with earnings or losses as if such amounts had been invested in an interest- bearing account or certain mutual funds, at the option of the director. The deferred compensation credited to the interest-bearing account is adjusted on at least a quarterly basis with hypothetical earnings equal to the lesser of the Barclays Capital Long Term Bond AAA — Corporate Bond Index as of the first business day in November of the calendar year preceding the year for which the earnings are to be credited or 120% of the long-term applicable federal rate as of the first business day in November.

In accordance with SEC rules, no earnings on deferred compensation are shown in the Director Compensation table below because no “above market” rates were earned on deferred amounts in 2019. Directors must elect irrevocably to

receive the deferred funds either in a lump sum or in equal annual installments of up to 10 years, and to begin receiving distributions either at termination of Board service or at a future specified date.

If a director should die before all amounts credited under the Directors Deferred Compensation Plan have been paid, the unpaid balance in the participating director’s account will be paid to the director’s beneficiary. The memorandum accounts are not funded, and the right to receive future payments of amounts recorded in these accounts is an unsecured claim against the Company’s general assets.

Stock Ownership Guideline

Under the Director Compensation Policy, non-management directors are subject to a stock ownership guideline. Non-management directors are required to maintain direct ownership of shares of Common Stock equal to or greater in value to five times the current annual Board service retainer. No non-management director is permitted to sell shares of Common Stock until the director satisfies the stock ownership guideline, and after a director meets the stock ownership guideline, the director may not sell shares if the sale would put the director below the stock ownership guideline.

As of March 13, 2020, all non-management directors were in compliance with the stock ownership guideline or subject to the mandatory holding requirement until the ownership guideline is met.

 

 

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2019 Director Compensation

The following table summarizes the total compensation earned in 2019 for the Company’s non-management directors. Mr. Silvernail receives no additional compensation for his service as a director.

 

Name  

Fees Earned

or Paid in Cash

($)

 

Stock Awards

($) (1)

 

All Other

Compensation

($) (2)

  Total ($)
         

 

Mark A. Beck

 

 

 

85,000   

 

 

 

130,000   

 

 

 

1,000   

 

 

 

216,000   

 

         

 

Mark A. Buthman

 

 

 

97,500   

 

 

 

130,000   

 

 

 

—   

 

 

 

227,500   

 

         

 

Carl R. Christenson

 

 

 

45,770   

 

 

 

115,913(3)   

 

 

 

—   

 

 

 

161,683   

 

         

 

William M. Cook

 

 

 

100,000   

 

 

 

145,000   

 

 

 

—   

 

 

 

245,000   

 

         

 

Katrina L. Helmkamp

 

 

 

88,995   

 

 

 

130,000   

 

 

 

—   

 

 

 

218,995   

 

         

 

Ernest J. Mrozek

 

 

 

87,500   

 

 

 

130,000   

 

 

 

10,000   

 

 

 

227,500   

 

         

 

David C. Parry

 

 

 

85,000   

 

 

 

130,000   

 

 

 

10,000   

 

 

 

225,000   

 

         

 

Livingston L. Satterthwaite

 

 

 

95,000   

 

 

 

130,000   

 

 

 

10,000   

 

 

 

235,000   

 

         

 

Cynthia J. Warner

 

 

 

91,005   

 

 

 

130,000   

 

 

 

—   

 

 

 

221,005   

 

 

(1)

Reflects the aggregate grant date fair value of the restricted stock units granted in 2019, determined in accordance with FASB ASC Topic 718 using the assumptions set forth in the footnotes to financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, assuming no forfeitures.

(2)

Reflects matching gifts of up to $10,000 per year directed to Internal Revenue Code 501(c)(3) tax-exempt, non-profit organizations under the IDEX Corporation Matching Gift Program.

(3)

Reflects Mr. Christenson’s prorated initial grant awarded upon his election to the Board on June 17, 2019.

 

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Directors’ Outstanding Equity Awards at 2019 Fiscal Year End

The following table provides information on restricted stock units and stock option awards held by the Company’s non-management directors and the value of those awards as of December 31, 2019. All outstanding awards are in or exercisable for shares of Common Stock.

 

                        

Option Awards

   

Stock Awards

                        

Number of Securities
Underlying Unexercised
Options

 

               

Number of    

Shares or    

 Units of Stock     

that Have Not    

Vested (#) (b)    

 

 

Market Value
of Shares or
Units of
Stock that
Have Not
Vested ($) (c)

 

Name    Grant Date      Type    

 # Shares   

(#)  

 

Shares          

 Exercised           

(#)          

 

 

 Exercisable   

(#) (a)  

 

 

   Unexercisable 

  (#) (a)

 

   

Option

 Exercise 

Price ($)

 

   

Option

 Expiration 

Date

 

 

Mark A. Beck

  01/02/18     RSU                                            310     53,320
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

Mark A. Buthman

  04/06/16     RSU                             1,290   221,880
    02/22/17     RSU                             1,290   221,880
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

Carl R. Christenson

  06/17/19     RSU                                             725   124,700

William M. Cook

  02/22/11     NQSO     3,190     0             3,190     0       40.89       02/22/2021          
    02/21/12     NQSO     3,530     0             3,530     0       42.86       02/21/2022          
    02/15/13     NQSO     3,075     0             3,075     0       50.45       02/15/2023          
    02/22/17     RSU                             1,450   249,400
    04/25/18     RSU                             1,055   181,460
    05/10/19     RSU                                            940   161,680

Katrina L. Helmkamp

  02/19/16     RSU                             1,610   276,920
    02/22/17     RSU                             1,290   221,880
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

Ernest J. Mrozek

  02/22/11     NQSO     3,190     0           3,190     0       40.89       02/22/2021          
    02/21/12     NQSO     3,530     0           3,530     0       42.86       02/21/2022          
    02/15/13     NQSO     3,075     0           3,075     0       50.45       02/15/2023          
    02/22/17     RSU                             1,290   221,880
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

David C. Parry

  12/06/12     NQSO     4,930     0           4,930     0       45.08       12/06/2022          
    02/15/13     NQSO     3,075     0           3,075     0       50.45       02/15/2023          
    02/22/17     RSU                             1,290   221,880
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

Livingston L. Satterthwaite

  04/05/11     NQSO     4,800     0           4,800     0       45.16       04/05/2021          
    02/21/12     NQSO     3,530     0           3,530     0       42.86       02/21/2022          
    02/15/13     NQSO     3,075     0           3,075     0       50.45       02/15/2023          
    02/20/15     RSU                             1,405   241,660
    02/19/16     RSU                             1,610   276,920
    02/22/17     RSU                             1,290   221,880
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

Cynthia J. Warner

  02/15/13     NQSO     4,610     0           4,610     0       50.45       02/15/2023          
    02/22/17     RSU                             1,290   221,880
    04/25/18     RSU                                945   162,540
    05/10/19     RSU                                            845   145,340

 

  (a)

All options expire on the 10th anniversary of the grant date.

  (b)

See footnote 1 to table under “SECURITY OWNERSHIP” below for vesting provisions.

  (c)

Determined based upon the closing price of the Company’s Common Stock on December 31, 2019.

 

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SECURITY OWNERSHIP

The following table furnishes information as of March 13, 2020, except as otherwise noted, with respect to shares of Common Stock beneficially owned by (i) each director and nominee for director, (ii) each executive officer named in the Summary Compensation Table, (iii) directors, nominees and executive officers of the Company as a group, and (iv) any person who is known by the Company to be a beneficial owner of more than five percent of the outstanding shares of Common Stock.

Except as indicated by the notes to the following table, the holders listed below have sole voting power and investment power over the shares beneficially held by them. Under SEC rules, the number of shares shown as beneficially owned includes shares of Common Stock subject to options that are exercisable currently or will be exercisable within 60 days of March 13, 2020. Shares of Common Stock subject to options that are exercisable within 60 days of March 13, 2020, are considered to be outstanding for the purpose of determining the percentage of shares held by a holder, but not for the purpose of computing the percentage held by others. An * indicates ownership of less than one percent of the outstanding Common Stock.

For purposes of the following table, the address for each of the directors, nominees for director and executive officers of the Company is c/o 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045.

 

Name and Address of Beneficial Owner  

Shares

Beneficially

Owned

 

Percent of

Class

 

Directors and Nominees (other than Named Executive Officers):

 

       

 

Mark A. Beck(1)

 

 

 

2,100  

 

 

 

*  

 

 

Mark A. Buthman(1)

 

 

 

4,370  

 

 

 

*  

 

 

Carl R. Christenson(1)

 

 

 

725  

 

 

 

*  

 

 

William M. Cook(1)

 

 

 

28,023  

 

 

 

*  

 

 

Katrina L. Helmkamp(1)

 

 

 

5,105  

 

 

 

*  

 

 

Ernest J. Mrozek(1)

 

 

 

19,400  

 

 

 

*  

 

 

David C. Parry(1)

 

 

 

17,878  

 

 

 

*  

 

 

Livingston L. Satterthwaite(1)

 

 

 

22,197  

 

 

 

*  

 

 

Cynthia J. Warner(1)

 

 

 

13,485  

 

 

 

*  

 

 

Named Executive Officers:

 

       

 

Andrew K. Silvernail(2)

 

 

 

463,962  

 

 

 

*  

 

 

William K. Grogan(2)

 

 

 

59,758  

 

 

 

*  

 

 

Eric D. Ashleman(2)

 

 

 

80,970  

 

 

 

*  

 

 

Denise R. Cade(2)

 

 

 

30,766  

 

 

 

*  

 

 

Jeffrey D. Bucklew(2)

 

 

 

34,621  

 

 

 

*  

 

 

Directors, Nominees and All Executive Officers as a Group: (16 persons)(3)

 

 

 

754,135  

 

 

 

1.1%  

 

 

Other Beneficial Owners:

 

       

 

The Vanguard Group(4)

 

 

8,279,685  

 

 

 

10.9%  

 

 

100 Vanguard Blvd. Malvern, PA 19355

 

       

 

BlackRock Inc.(5)

 

 

6,677,748  

 

 

 

8.8%  

 

 

55 East 52nd Street New York, NY 10055

 

       

 

Capital World Investors(6)

 

 

5,751,716  

 

 

 

7.5%  

 

 

333 South Hope Street, Los Angeles, CA 90071

 

       

 

T. Rowe Price Associates, Inc.(7)

 

 

5,358,445  

 

 

 

7.0%  

 

 

100 East Pratt Street, Baltimore, MD 21202

 

       

 

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(1)

Includes 9,795, 9,795, 8,005, 11,405 and 4,610 shares under exercisable options for Messrs. Cook, Mrozek, Parry and Satterthwaite, and Ms. Warner, respectively. Ms. Helmkamp and Messrs. Buthman, Beck and Christenson do not have any options. Includes 1,405 restricted stock units issued to Mr. Satterthwaite on February 20, 2015 for which Mr. Satterthwaite elected to defer vesting; 1,610 restricted stock units issued to Ms. Helmkamp and Mr. Satterthwaite on February 19, 2016, who each elected to defer vesting; 1,290 restricted stock units issued to Mr. Buthman on April 6, 2016, for which Mr. Buthman elected to defer vesting; 310 restricted stock units issued to Mr. Beck on January 2, 2018, for which Mr. Beck elected to defer vesting; 945 restricted stock units issued to each of Mss. Helmkamp and Warner and Messrs. Beck, Buthman, Mrozek, Parry and Satterthwaite on April 25, 2018, which vest on April 25, 2021 (except Messrs. Beck, Buthman and Satterthwaite, who each elected to defer vesting); 1,055 restricted stock units issued to Mr. Cook on April 25, 2018, which vest on April 25, 2021; 845 restricted stock units issued to each of Mss. Helmkamp and Warner and Messrs. Beck, Buthman, Mrozek, Parry and Satterthwaite on May 10, 2019, which vest on May 10, 2022 (except Messrs. Beck, Buthman and Satterthwaite, who each elected to defer vesting); 940 restricted stock units issued to Mr. Cook on May 10, 2019, which vest on May 10, 2022; and 725 restricted stock units issued to Mr. Christenson on June 17, 2019, for which Mr. Christenson elected to defer vesting. The restricted shares and restricted stock units held by the directors may vest earlier than the dates indicated above upon a change in control of the Company, retirement, or failure to be re-elected to the Board. All shares of restricted stock and restricted stock units are eligible for dividends.

(2)

Includes 258,296, 49,024, 49,394, 29,187 and 18,041 shares under exercisable options for Messrs. Silvernail, Grogan, Ashleman and Bucklew and Ms. Cade, respectively.

(3)

Includes 432,268 shares under options that are exercisable currently or will be exercisable within 60 days of March 13, 2020.

(4)

Based solely on information in Schedule 13G, as of December 31, 2019, filed by Vanguard Group (Vanguard) with respect to Common Stock owned by Vanguard and certain subsidiaries. Vanguard reports beneficial ownership of shares for itself, Vanguard Fiduciary Trust Company, a wholly-owned subsidiary, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary. Vanguard has sole power to vote or to direct the vote of 117,928 shares of Common Stock, shared power to vote or direct the vote of 21,431 shares of Common Stock, sole power to dispose or to direct the disposition of 8,150,543 shares of Common Stock and shared power to dispose or to direct the disposition of 129,142 shares of Common Stock.

(5)

Based solely on information in Schedule 13G, as of December 31, 2019, filed by BlackRock Inc. (BlackRock) with respect to Common Stock owned by BlackRock and certain subsidiaries, including BlackRock Life Limited, BlackRock International Limited, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Asset Management North Asia Limited, BlackRock (Singapore) Limited and BlackRock Fund Managers Ltd. BlackRock has sole power to vote or to direct the vote of 5,778,181 shares of Common Stock and sole power to dispose or to direct the disposition of all 6,677,748 shares of Common Stock.

(6)

Based solely on information in Schedule 13G, as of December 31, 2019, filed by Capital World Investors, a division of Capital Research and Management Company (Capital World). Capital World has sole power to vote or to direct the vote of 5,664,584 shares of Common Stock and sole power to dispose or to direct the disposition of all 5,751,716 shares of Common Stock.

(7)

Based solely on information in Schedule 13G, as of December 31, 2019, filed by T. Rowe Price Associates, Inc. (Price Associates). Price Associates has sole power to vote or to direct the vote of 1,991,663 shares of Common Stock and sole power to dispose or to direct the disposition of all 5,358,445 shares of Common Stock.

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes our executive compensation philosophy and programs, and compensation decisions made under those programs for our named executive officers (NEOs) for fiscal year 2019, who are listed below.

 

  Name

 

  Title

Andrew K. Silvernail

 

Chairman, President and Chief Executive Officer(1)

William K. Grogan

 

Senior Vice President and Chief Financial Officer

Eric D. Ashleman

 

Senior Vice President and Chief Operating Officer(1)

Denise R. Cade

 

Senior Vice President, General Counsel and Corporate Secretary

Jeffrey D. Bucklew

 

Senior Vice President and Chief Human Resources Officer

 

(1)

On February 21, 2020, the Board voted Mr. Ashleman President and Chief Operating Officer. Mr. Silvernail retained his positions as Chairman and Chief Executive Officer.

Principles of Our Compensation Programs

 

 

Pay-for-Performance

 

 

The key principle of our compensation philosophy is
pay-for-performance.

 

 

Alignment with Stockholders’
Interests

 

 

We reward performance that meets or exceeds the performance
goals that the Compensation Committee establishes with the
objective of increasing stockholder value.

 

 

Variation Based on

Performance

 

 

We favor variable pay opportunities that are based on
performance over fixed pay. The total compensation received by
our NEOs varies based on corporate and individual performance
measured against annual and long-term goals.

 

Compensation Philosophy

The following table describes our compensation philosophy that guides our pay programs, structure and decisions.

 

   

Compensation Philosophy

  

How We Deliver

 

Attract and retain an effective management team

  

 

•  We offer a total pay package that consists of both compensation and benefits that are targeted to be competitive with the market.

•  We seek to retain our executives by regularly benchmarking our total compensation package relative to companies of similar size, scope and complexity — our peer group is constructed to include companies within an appropriate range of revenue and market capitalization values.

 

 

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Compensation Philosophy

  

How We Deliver

 

Motivate and reward management team with a focus on pay-for-performance

  

 

•  We tie a meaningful portion of total compensation to financial and stock price performance – between 70% to 80% of our compensation mix is tied to performance.

•  Our compensation program provides a mix of base salary, short-term incentives and long-term incentives — the balance of our compensation elements provides direct line of sight with our objectives, motivating executives to outperform on our goals.

•  In line with our compensation philosophy to align pay and performance, when the Company outperforms or underperforms the goals in our incentive plans, payouts can result in above or below target levels, respectively.

 

 

Create a strong financial incentive that aligns with our stockholders and long-term objectives

  

 

•  Through a combination of appropriate performance metrics and targets, executives are paid according to how the Company performs.

•  Specific financial measures used in our incentive programs include:

–  Earnings per share (EPS), cash flow conversion, and organic sales growth in our short-term incentive plan; and

–  Total stockholder return (TSR) relative to companies in the relevant market index used in our long-term incentive plan.

 

 

Align the interests of management and stockholders

  

 

•  In order to emphasize long-term stockholder returns, we require our executives to maintain significant stock ownership levels through the use of stock ownership guidelines.

 

Governance Best Practices

The Company employs compensation principles in delivering executive pay that we believe are supportive of the business strategy and governance best practices.

What We Do

 

Ö

Annual Say-on-Pay Vote: We conduct an annual say-on-pay advisory vote. At our 2019 Annual Meeting of Stockholders, more than 96% of the votes cast on the say-on-pay proposal were in favor of the fiscal year 2018 compensation of our NEOs.

 

Ö

Clawback Policy: Our clawback policy allows the Board to recoup any excess incentive compensation paid to our executive officers and other employees if the financial results on which the awards were based are materially restated due to fraud, intentional misconduct or gross negligence of the executive officer or other employee.

 

Ö

Short-Term and Long-Term Incentives/Measures: Our annual and long-term plans provide a balance of incentives and include different measures of performance.

 

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Ö

Independent Compensation Consultant: The Compensation Committee engages an independent compensation consultant, who does not provide any services to management.

 

Ö

Stock Ownership Guidelines: To further align the interests of management and our directors with our stockholders, we have significant stock ownership guidelines, which require our executive officers and directors to hold a multiple of their annual compensation in Common Stock.

 

Ö

Limited Perquisites and Related Tax Gross-Ups: We provide limited perquisites and tax gross-ups.

 

Ö

Mitigate Inappropriate Risk Taking: In addition to our clawback policy, stock ownership guidelines and prohibition of hedging and pledging, we structure our compensation programs so that they minimize inappropriate risk taking by our executive officers and other employees, including using multiple performance metrics and multi-year performance periods and capping our annual incentive awards and performance share awards.

What We Don’t Do

 

×

Gross-ups for Excise Taxes: Our executive severance agreements do not contain a gross-up for excise taxes that may be imposed as a result of severance or other payments deemed made in connection with a change in control.

 

×

Reprice Stock Options: Our equity incentive plan prohibits the repricing of stock options and stock appreciation rights without prior stockholder approval.

 

×

Fixed Term Employment Agreements: Employment of our executive officers (other than our CEO) is “at will” and may be terminated by either the Company or the employee at any time.

 

×

Hedging and Pledging: Our insider trading policy prohibits all employees and directors from hedging and pledging their economic interest in the Common Stock they hold.

 

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Performance Highlights and Impact on Incentive Compensation

Despite facing challenging market conditions in 2019, the Company continued to perform against its strategic and business plans, with full year organic sales increasing for the third year in a row and gross margin of 45%, up 10 basis points. The performance highlights and accomplishments indicated in the chart below are closely related to performance metrics under our executive compensation programs.

 

 

LOGO

2019 Performance Highlights* Orders and sales were flat Adjusted EPS up 7% Cash from operations of $528.1 million, up 10% from the prior year, led to free cash flow of $477.2 million, up 13%, 107% of Adjusted Net Income Increased quarterly dividend by 16% Acquired Velcora Holding AB and its operating subsidiaries, Roplan and Steridose Annual TSR of 38% How Incentives Support Performance Short-Term Goals Adjusted EPS Adjusted Cash Flow Conversion Organic Sales Growth Long-Term Goals Relative TSR Incentive Plan Results 2019 Bonus Payout of 87% Adjusted EPS of $5.70 Adjusted Cash Flow Conversion of 107% of Adjusted Net Income Organic Sales Growth of 1.1% 2017-2019 PSU Payout of 250% Three-year TSR of 88% (82 nd percentile relative ranking)

 

*

A reconciliation from GAAP to non-GAAP financial measures and other related information is included in Item 6 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In addition to the adjustments noted in the Form 10-K, additional adjustments are used to determine the short-term incentive payouts, including adjustments related to acquisitions and divestitures, actual capital expenditures and actual share count compared to the annual plan.

Key Takeaways of our 2019 Executive Compensation Program

For 2019, our executive compensation programs were designed to directly link compensation opportunities to the financial performance metrics that we believe are the best measures of success in our business: EPS, cash flow conversion, organic sales growth and relative TSR.

 

   

The 2019 bonus payouts were 87% of target.

 

   

Our TSR for the 2017-2019 period was 88%, which resulted in an 82nd percentile performance compared to the companies in the Russell Midcap Index and resulted in a 250% payout of performance stock units (PSUs).

 

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NEO Compensation Aligns with Company Performance

The compensation opportunities of our executives are directly tied to the performance of the Company. Our pay-for-performance philosophy is demonstrated by the following elements of our executive compensation program for 2019:

Approximately 83% of our CEO’s 2019 total targeted pay was performance-based, and an average of approximately 71% of our other NEOs’ total targeted pay in 2019 was performance-based. The charts

below show the allocation of 2019 targeted pay across base salary, the annual cash incentive award, and the long-term incentive award for our CEO and other NEOs.

 

 

LOGO

In 2019, our long-term incentives continued to represent the single largest component of our CEO’s and other NEOs’ targeted pay, representing approximately 63% and 50% of total targeted pay, respectively.

Maintaining a balanced perspective is a core part of the Company’s business strategy, which requires employees to take calculated risks to capitalize on anticipated changes in the Company’s numerous businesses. The Compensation Committee believes that balancing the proportion of cash and non-cash awards, as well as short-term versus long-term awards, is important to motivate performance while mitigating risk. Cash-based awards are important in motivating executives for the short-term, while long-term incentives focus executives who have the greatest ability to impact business results on managing the business for the long-term and reinforce the link between their earnings opportunity and the long-term growth of the Company.

Our 2019 incentive awards are directly tied to performance metrics that balance absolute and relative performance goals: EPS, cash flow conversion, organic sales growth and TSR (measured on a relative basis). We believe these are the best measures of our financial success and support the creation of stockholder value.

Role of Say-on-Pay

The Company held an advisory vote on executive compensation (say-on-pay) at the Company’s 2019 Annual Meeting of Stockholders. The say-on-pay advisory vote received support from over 96% of the shares voted at the 2019 Annual Meeting. The Compensation Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation. Accordingly, the Compensation Committee did not make any material changes to the underlying structure of our executive compensation program for fiscal year 2019. The Compensation Committee will continue to

 

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review and consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the NEOs.

2019 Executive Compensation Program

The following discussion describes our 2019 compensation elements and 2019 compensation decisions related to our NEOs.

2019 Key Compensation Elements

The material elements of 2019 compensation for the NEOs are outlined below:

 

Element

  

Type of Pay

  

Purpose

  

General Characteristics

 

Base Salary

  

 

Fixed

  

 

Provides a fixed level of current cash compensation consonant with the executive’s primary duties and responsibilities and necessary to attract, retain and reward NEOs.

 

  

 

Reviewed annually and adjusted as necessary to reflect market changes, salary budgets and individual performance.

 

Short-Term
Incentives —
Annual Bonus

  

 

Performance-
Based

  

 

Focuses NEOs on annual performance by rewarding corporate and individual performance and achievement of pre-determined goals.

 

  

 

Variable cash payments. Annual awards based on performance against pre-determined individual and corporate performance goals.

 

 

Long-Term
Incentives —
Stock Options

  

 

Performance-
Based

  

 

Provides retention through vesting schedules and aligns each NEO’s interests with long-term stockholder interests by linking a substantial portion of each executive’s compensation to increases in the price of Common Stock.

 

  

 

Variable compensation based on stock value. Options are granted with exercise prices not less than fair market value at grant date and vest ratably over four years.

 

Long-Term
Incentives —
PSUs

  

 

Performance-
Based

  

 

Ties long-term compensation to relative performance, further aligning the interests of NEOs with stockholders.

  

 

PSUs vest based on continued service and relative TSR compared to companies in the Russell Midcap Index over a cumulative three-year period.

 

 

Retirement/Other

  

 

Fixed/
Voluntary

 

  

 

Provides overall wealth accumulation and retention.

 

  

 

Various market-based retirement and welfare benefits and perquisites.

 

Base Salary

Base salaries are reviewed annually and may be adjusted to reflect market data, as well as individual responsibility, experience and performance. The table below highlights the change in 2019 base salary for each NEO, reflecting one or more of the following: annual merit increase, market and/or performance-related adjustments.

 

NEO

 

  

 

2018
Base
Salary
Rate
($)

 

    

 

2019
Base
Salary
Rate

($)

 

    

Percentage
Increase

 

 

Andrew K. Silvernail

  

 

1,000,000

 

  

 

1,030,000

 

  

 

3

William K. Grogan

  

 

470,000

 

  

 

515,000

 

  

 

10

Eric D. Ashleman

  

 

585,000

 

  

 

630,000

 

  

 

8

Denise R. Cade

  

 

460,000

 

  

 

474,000

 

  

 

3

Jeffrey D. Bucklew

  

 

400,000

 

  

 

412,000

 

  

 

3

 

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Short-Term Incentives

 

The Company administers the short-term incentive plan under the Management Incentive Compensation Plan (MICP). The amount of the annual cash bonus paid to each participant is determined under the following formula:

Annual Bonus = Base Salary x Individual Target Bonus Percentage x Business Performance Factor

Individual Target Bonus Percentage for the year is a percentage of the participant’s base salary and is based on the participant’s position and market data. The Business Performance Factor (discussed in more detail below) is calculated based on measurable corporate quantitative objectives, which are given a combined 70% weighting, and one strategic measure with a 30% weighting.

For 2019, the measurable quantitative objectives within the Business Performance Factor were adjusted EPS and adjusted cash flow conversion. Adjusted EPS excludes from reported earnings per share the impact of acquisition and

divestiture-related income and charges, and restructuring charges (EPS Adjustments). Adjusted cash flow conversion is cash flow as a percent of net income excluding the impact of the EPS Adjustments. The payout of each quantitative objective is a function of the amount by which actual performance exceeds or falls short of goal, with a maximum payout of 200% of target for each objective.

For 2019, the 30% strategic measure was organic sales growth. Organic sales growth is a critical business metric and helps identify the underlying health of the Company’s businesses and management’s ability to increase sales through innovation and customer focus. Organic sales is defined as net sales of the Company adjusted to exclude the impact of foreign currency translation and sales from acquired businesses during the first twelve months of ownership. The goal for organic sales growth is established relative to expected growth in key markets, such as industrial, health and science instrumentation, energy and fire and rescue.

 

 

For 2019, the relative weightings and the performance against the quantitative and strategic measures resulted in a recommended Business Performance Factor of 87%, as shown in the table below.

 

MICP Objective           Goal                     Actual*               Payout      

MICP

  Weighting  

   

Business

Performance

Factor

 

 

Adjusted EPS

 

 

 

 

 

 

$5.60

 

 

 

 

 

 

$

 

 

5.70

 

 

 

 

 

 

 

 

 

112.5%

 

 

 

 

 

 

 

 

 

50%

 

 

 

 

 

 

 

 

 

56.3%

 

 

 

 

 

Adjusted Cash Flow Conversion

 

 

 

 

 

 

105%

 

 

 

 

 

 

 

 

 

107%

 

 

 

 

 

 

 

 

 

110.0%

 

 

 

 

 

 

 

 

 

20%

 

 

 

 

 

 

 

 

 

22.0%

 

 

 

 

 

Organic Sales Growth

 

   

 

4.0%

 

 

 

   

 

1.1%

 

 

 

   

 

27.5%

 

 

 

   

 

30%

 

 

 

   

 

8.3%

 

 

 

 

Total

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

100%

 

 

 

 

 

 

 

 

 

86.6%

 

 

 

 

 

 

*

A reconciliation from GAAP to non-GAAP financial measures and other related information is included in Item 6 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In addition to the adjustments noted in the Form 10-K, additional adjustments are used to determine the short-term incentive payouts, including adjustments related to acquisitions and divestitures, actual capital expenditures and actual share count compared to the annual plan.

 

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The short-term incentive payments are included in the 2019 Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column and summarized in the table below.

 

NEO

 

 

Base Salary Rate
($)

 

   

Individual Target
  Bonus Percentage  

 

   

Business
Performance
    Factor    

 

    

Actual

2019 Short-
Term
Incentive
Award ($)

 

 

Andrew K. Silvernail

 

 

1,030,000

 

 

 

120

 

 

87%

 

  

 

1,075,320

 

William K. Grogan

 

 

515,000

 

 

 

75

 

 

87%

 

  

 

336,038

 

Eric D. Ashleman

 

 

630,000

 

 

 

80

 

 

87%

 

  

 

438,480

 

Denise R. Cade

 

 

474,000

 

 

 

70

 

 

87%

 

  

 

288,666

 

Jeffrey D. Bucklew

 

 

412,000

 

 

 

70

 

 

87%

 

  

 

250,908

 

Prior to 2018, the Company also provided short-term incentive payments under the Incentive Award Plan (IAP) to allow performance-based bonuses to certain executives to be fully deductible under Internal Revenue Code (IRC) Section 162(m). The Tax Cut and Jobs Act eliminated the deductibility of excess qualified performance-based compensation under IRC Section 162(m). The MICP, under which the 2019 short-term incentives were administered, is the plan that has historically governed annual incentives for the broader executive population and also the plan under which the CFO received short-term incentive awards prior to 2018. Final awards under the MICP are calculated the same as awards under the IAP had been calculated.

 

2019 Long-Term Incentive Awards

Long-term incentive awards are generally made on an annual basis, or at the time of a special event (such as upon hiring or promotion). We typically grant awards at the February Board meeting each year, or the date of the annual meeting of stockholders. We attempt to make awards during periods when we do not have non-public information that could impact our stock price. Working with its independent compensation consultant, the Compensation Committee granted long-term incentive awards to the NEOs in early 2019. Each NEO has a long-term incentive target established on an individual basis taking into consideration market practice for each role, and individual impact and performance.

In 2019, the NEOs received annual long-term incentive awards consisting of PSUs and stock options, which are intended to emphasize the link between pay and performance. The target

number of PSUs granted was determined by dividing the PSU award value by the closing price of Common Stock on the date of grant. The number of stock options granted was determined by dividing the stock option award value by the grant date fair value, utilizing the Binomial lattice option-pricing model. For additional details of the assumptions made in the valuation of such awards, see note 15 “Share-Based Compensation” of the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The Compensation Committee may grant awards above or below target based on individual and Company performance. In February 2019, the Committee reviewed the Company’s performance compared to one- and three-year TSR, revenue and EPS growth of companies in the executive pay peer group (listed below), as well as performance against strategic goals established at the beginning of the year. Based on this review, the Compensation Committee determined to grant above-target long-term incentive award values

 

 

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to the NEOs for 2019 due to the Company’s strong performance in 2018. The Compensation Committee intends to perform a similar review annually and may adjust annual long-term incentives above or below target levels as appropriate to support the Company’s pay-for-performance philosophy.

2019 CEO Awards. For 2019, the Board granted Mr. Silvernail an award based on the Compensation Committee’s recommendation, which considered Mr. Silvernail’s compensation position relative to the market, his outstanding performance in leading the Company, and the Company’s strong performance during the prior three-year period. The following chart shows the grant value recommended by the Compensation Committee and approved by the Board, and the Summary Compensation Table reported value of Mr. Silvernail’s long-term incentive awards for 2018 and 2019. The Summary Compensation Table reported value reflects the grant date fair value determined in accordance with FASB ASC Topic 718. Similar to the other NEOs, the Compensation Committee and the Board will consider similar criteria in assessing future awards for Mr. Silvernail to determine whether an upward or downward adjustment is warranted.

 

         2018             2019    

Grant Value

  $ 5,250,000      $5,475,000 

Reported Value

  $ 6,742,378      $6,575,467 

2019 COO Award. The Compensation Committee approved a special grant of PSUs to Mr. Ashleman in recognition of his outstanding performance, with a grant value of $1,000,000. This award is subject to the same terms as the annual 2019 PSU awards.

Objectives of Long-Term Incentive Vehicles

The Compensation Committee believes that PSUs and stock options both motivate management actions that drive the creation of stockholder value and promote executive stock ownership. However, each long-term incentive

component has different characteristics. The value of the PSUs after the three-year performance period is directly linked to relative TSR, as described above, as well as the stock price movement during the performance period. Stock options provide value only to the extent that the Company’s stock price appreciates above the stock price on the date of grant.

PSU Design Features

The PSUs have a three-year performance period and measure the Company’s relative TSR against the TSR of companies in the Russell Midcap Index at the end of such period. If the Company achieves 50th percentile TSR performance as compared to the group of companies, each NEO will receive the target number of performance units, paid out in shares of Common Stock. Threshold performance is at the 33rd percentile, which will result in a payout equal to 33% of target; performance below this level will result in zero payout. Maximum payout is 250% of the target number of shares for 80th percentile performance or higher. Payouts are interpolated between the 33rd percentile and 50th percentile and between the 50th percentile and 80th percentile performance. Cumulative dividend equivalent payments will be made at the end of the performance period based on the number of shares of Common Stock received by each executive.

In selecting relative TSR as the measure, the Compensation Committee noted that TSR is highly correlated with a combination of other metrics that are important to the Company and to investors, notably: return on invested capital, operating profit margin and compound annual sales growth rate (CAGR).

Consistent with 2018, the Compensation Committee selected the Russell Midcap Index companies as the comparator group for relative TSR for the 2019 PSU grant. In selecting the Russell Midcap Index companies, the Compensation Committee’s objective was to have a sizeable group of companies similar in revenue and market capitalization to the

 

 

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Company. In addition, the Compensation Committee seeks to align with the mutual funds within the Company’s largest stockholders as they generally hold a broad range of investments covering multiple industries.

For the 2020 PSU grant, the Committee selected the S&P 500 index companies as the comparator group for relative TSR, as IDEX was added to this index in August 2019. In addition, there will be a one-year post-vest holding requirement beginning with the 2020 PSU grant, which will further align our executives’ interests with those of shareholders.

Our PSU grant for the 2017-2019 performance period resulted in a 250% payout based on a 88% TSR, which placed the Company in the 82nd percentile of companies in the Russell Midcap Index.

Setting Executive Compensation

Role of Compensation Committee

The Compensation Committee establishes the Company’s compensation philosophy, structures the Company’s compensation programs to be consistent with that philosophy, and approves each element of NEO compensation. In the case of the CEO, the Board reviews, ratifies and approves compensation recommendations made by the Compensation Committee.

The Compensation Committee performs periodic reviews of executive pay tally sheets. The tally sheets outline each executive’s recent annual target and actual pay history, unvested equity holdings and termination payments under various scenarios. Data from the tally sheets is considered by the Compensation Committee when setting target total compensation. Generally, the Compensation Committee reviews and adjusts target total compensation levels annually. Actual total compensation may vary from target based on performance and changes in stock price over time.

Generally, the amount of compensation realized historically, or potentially realizable in the future, from past equity awards does not directly impact the level at which future pay opportunities are set. When granting equity awards, the Compensation Committee considers market data and Company and individual performance.

Role of Compensation Consultant

The Compensation Committee has the sole authority to retain and replace, as necessary, compensation consultants to provide it with independent advice. The Compensation Committee has engaged F.W. Cook as its independent consultant to advise it on executive and non-employee director compensation matters. This selection was made without the input or influence of management.

Under the terms of its agreement with the Compensation Committee, F.W. Cook will not provide any other services to the Company, unless directed to do so by the Compensation Committee. During fiscal year 2019, F.W. Cook provided no services to the Company other than to advise the Compensation Committee on executive and non-employee director compensation issues. In its review, the Compensation Committee did not identify any conflicts of interest raised by the work F.W. Cook performed in fiscal year 2019, nor any business or personal relationships that would impair F.W. Cook’s independence.

Setting Individual Executive Pay

The Compensation Committee formulates a recommendation of CEO pay based on the financial and operating performance of the Company, the Compensation Committee’s assessment of the CEO and a thorough review of the market benchmarking data discussed below. The CEO pay recommendations put forth by the Compensation Committee are then reviewed and subject to approval by the Board.

 

 

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The pay packages for the other NEOs are set by the Compensation Committee after taking into consideration the recommendations of the CEO. Individual pay decisions are based on an assessment of the individual executive, utilizing the following criteria:

 

  1.

Contribution

 

    Value to IDEX; short- and long-term

 

    Individual contribution and impact to team performance

 

  2.

Market attractiveness

 

    Supply-demand of role

 

    Experience, background, track record

 

  3.

Replacement difficulty

 

    Challenge of replacing the role with equivalent capability

 

  4.

Experience in role

 

    Overall experience in current or similar role

 

  5.

Company Performance

 

    In determining the long-term incentive award value, the Compensation Committee reviews the Company’s performance relative to our peers against key performance indicators, including growth and returns and stock price performance

 

    The Compensation Committee has the latitude to adjust awards up and down relative to the executives’ target

The Compensation Committee reviews pay data from two primary sources (third party surveys and peer company data) as one input in

determining appropriate target compensation levels. The Compensation Committee utilizes the expertise of its independent compensation consultant, F.W. Cook, in developing compensation recommendations for the NEOs, including the CEO. The Compensation Committee believes that to attract and retain qualified management, total direct compensation should be competitively targeted within a range that includes the market median for comparable positions at comparable companies, with market compensation data being only one of many factors considered by the Compensation Committee when setting the compensation levels for any particular executive. While an individual executive’s target compensation is positioned within the competitive range based on the individual factors listed above, actual compensation in any given year should and does vary from target based on Company and individual performance.

The Compensation Committee undertook a review and analysis to ensure that the 2019 executive compensation programs appropriately reflected the market for talent. The Compensation Committee considered relevant market pay practices to ensure the Company’s ability to recruit and retain high performing talent across its diversified markets and global footprint. Two surveys and a peer group analysis were utilized for the 2019 executive compensation market analysis for the NEOs.

Survey Data

The Willis Towers Watson Executive Compensation Database Survey and the Equilar Top 25 Survey were used because they include a broad range of manufacturing companies that are comparable to the Company in size, geography and industry.

Peer Companies

The peer group of companies identified below consists of companies that are similar to the Company in terms of their size (i.e., revenue, and market capitalization), diversified industry

 

 

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profile (ranging from customized manufacturing solutions to emerging markets in highly specialized health science technology), investment in research and development and global presence. In addition, the peer companies have executive officer positions that are comparable to the Company’s in terms of breadth, complexity and scope of responsibilities. F.W. Cook reviewed the composition of the peer group used to benchmark pay in 2018 with the Compensation Committee. Based on that review, the companies listed below for the 2019 review are the same group of companies used to benchmark pay in 2018.

 

AMETEK, Inc.

Bruker Corporation

Colfax Corporation

Crane Co.

Donaldson Company, Inc.

Dover Corporation

Enerpac Tool Group(1)

Flowserve Corporation

Graco Inc.

ITT Corporation

KLA-Tencor Corporation

Lincoln Electric Holdings, Inc.

Nordson Corporation

Pentair Ltd.

PerkinElmer, Inc.

Roper Technologies, Inc.

SPX Flow, Inc.

Watts Water Technologies, Inc.

Woodward, Inc.

Xylem Inc.

 

(1)

Formerly known as Actuant Corporation

The Compensation Committee believes that multiple data sources provide for a clearer perspective of the market. As such, with the assistance of management and F.W. Cook, the Compensation Committee developed an aggregate composite of the market data to establish target compensation levels for the executives weighted as follows:

 

Position(s)   Survey
Weighting
  Peer
Group
Weighting
  Rationale
President and Chief Executive Officer; and Senior Vice President and Chief Financial Officer   20%     80%     Positions are required to be represented in all of the proxy peer group companies; closest representation of the corporate profile; balance of peer and survey data.
Senior Vice President, General Counsel and Corporate Secretary   70%     30%     Limited number of position matches in the proxy group; pool for talent would include the broader industry representation in the survey data.

Senior Vice President and Chief Operating Officer; and Senior Vice President and Chief Human Resources

Officer

  100%     0%     Very limited number of position matches in the proxy group; pool for talent would include the broader industry representation in the survey data.
 

 

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Other Compensation Components

Employee Benefits

The NEOs participate in group health, welfare and qualified retirement programs available to all of the Company’s employees. The NEOs also participate in nonqualified supplemental retirement plans, deferred compensation arrangements and supplemental disability benefits. Participation in these nonqualified plans is intended to provide the NEOs with the opportunity to accumulate retirement benefits at levels above the limitations imposed by tax qualified plans. For a more complete explanation of these plans, see the “Narrative to 2019 Summary Compensation Table,” the “Narrative to Nonqualified Deferred Compensation at 2019 Fiscal Year End Table,” and the discussion under “Potential Payments upon Termination or Change in Control.”

Severance and Change in Control Benefits

Each of the NEOs is entitled to severance benefits under the terms of written agreements in the event that their employment is actually or constructively terminated without cause. The amount of the benefit, which varies with the individual, depends on whether or not the termination is in connection with a change in control. The level of each NEO’s severance benefits reflects the Company’s perception of the market for their positions at the time the agreements were put in place. For additional information, see the section below entitled “Potential Payments upon Termination or Change in Control.”

Perquisites

The Compensation Committee believes in providing limited perquisites in line with market practice. The NEOs are provided a car allowance. The CEO is entitled to limited use of the Company’s leased aircraft for non-business purposes. For further details on these perquisites, see the “Narrative to 2019 Summary Compensation Table” below.

Other Executive Compensation Matters

Stock Grant Practices

For all newly issued stock option awards, the exercise price of the stock option award will be the closing price of Common Stock on the NYSE on the date of the grant. If the grant date for the annual awards falls on a weekend, the exercise price of stock option awards will be the closing price of Common Stock on the NYSE on the last trading day preceding the date of grant.

Stock Ownership

Consistent with its executive pay philosophy, the Company requires that executive officers maintain minimum ownership levels of Common Stock as follows:

 

Executive            

Ownership as a Multiple  

of Base Salary  

 

CEO

    5x  

CFO, COO

    3x  

Other NEOs

    2x  

NEOs must comply with these ownership requirements within five years of their date of hire or promotion. Counted for purposes of satisfying ownership requirements are shares directly owned, unvested restricted shares and PSUs at target. As of December 31, 2019, all NEOs met or exceeded the ownership guidelines.

Hedging and Pledging

All directors and employees (including officers) of the Company are prohibited from (i) pledging Company securities (including through holding Company securities in margin accounts), and (ii) engaging in any transaction in which they may profit from short-term speculative swings in the value of the Company’s securities (“hedging”). For this purpose, “hedging” includes “short-sales” (selling borrowed securities that the seller hopes can be purchased at a lower price in the future) or “short sales against the box” (selling, but not delivering,

 

 

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Table of Contents

owned securities), “put” and “call” options (publicly available rights to sell or buy securities within a certain period of time at a specified price or the like), and other hedging transactions designed to minimize the risk inherent in owning Common Stock, such as zero-cost collars and forward sales contracts.

Clawbacks

To the extent not in violation of applicable law, the Company reserves the right to recover, or clawback, from current or former directors and officers any wrongfully earned performance-based compensation, including stock-based awards, upon the determination by the Compensation Committee that:

 

    the Company’s financial statements have been restated due to material noncompliance with any financial reporting requirement;

 

    the cash incentive or equity compensation to be recouped was calculated on, or its realized value was affected by, the financial results that were subsequently restated;

 

    the cash incentive or equity compensation would have been less valuable than that actually awarded or paid based upon the application of the correct financial results; and

 

    the pay affected by the calculation was earned or awarded within three years of the restatement.

Tax Gross-Up Provisions

The Company has not entered into any new agreements that include excise tax gross-up provisions with respect to payments contingent upon a change in control since the adoption of such a policy by the Compensation Committee in February 2011. No executives are eligible for an excise tax gross-up.

The Compensation Committee has exclusive authority to modify, interpret and enforce this policy in compliance with applicable law.

Accounting and Tax Implications — Deductibility of Executive Compensation

In developing compensation programs, the Compensation Committee reviews the estimated accounting and tax impact of all elements of the executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular pay element (generally equal to the performance period) and the Company realizes a tax deduction upon payment to, or realization by, the executive. Previously, many of the awards granted were generally intended to satisfy the requirements for performance-based compensation under IRC Section 162(m). However, the Tax Cuts and Jobs Act (the “Act”), which became law on December 22, 2017, significantly amended IRC Section 162(m). Pursuant to the Act, the definition of “covered employees” under IRC Section 162(m) was amended to expand the scope of executive officers subject to the deduction limitation, including coverage of a company’s chief financial officer. The Act also eliminated the performance-based compensation exception with respect to tax years beginning January 1, 2018, but included a transition rule with respect to compensation that is provided pursuant to a written binding contract that was in effect on November 2, 2017 and not materially modified after that date. Accordingly, commencing in 2018, the Company’s tax deduction with regard to compensation of “covered employees” is limited to $1 million per taxable year for each officer.

While it is a goal of the Compensation Committee to maximize the deductibility of executive compensation, the Compensation Committee retains the discretion to compensate officers in a manner commensurate with performance and the competitive environment for executive talent, while also consistent with

 

 

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its compensation philosophy and in the Company’s and its stockholders’ best interests. Accordingly, achieving these goals may have resulted (and may continue to result, in light of the recent changes in law) in compensation that, in certain cases, is not deductible for federal income tax purposes. The Compensation Committee did not make any significant changes to the Company’s executive compensation program for 2019 in response to the changes to IRC Section 162(m).

Risk Assessment

The Compensation Committee periodically reviews the potential risks arising from our compensation policies, practices and programs to determine whether any potential risks are material to the Company. In approving the 2019 compensation program design, the Compensation Committee engaged in discussions with its independent compensation consultant and management regarding any potential risks and concluded that the Company’s compensation policies and practices are designed with the appropriate balance of risk and reward in relation to the Company’s overall business strategy, do not incentivize employees, including executive officers, to take unnecessary or excessive risks, and that any risks arising from the Company’s policies and practices are not reasonably likely to have a material adverse effect on the Company.

In this review, the Compensation Committee considered the attributes of the Company’s policies and practices, including:

 

    the mix of fixed and variable compensation opportunities;

 

    the balance between annual cash and long-term, stock-based performance opportunities;
    multiple performance factors tied to key measures of short-term and long-term performance that motivate sustained performance and are based on quantitative measures;

 

    caps on the maximum payout for cash incentives;

 

    stock ownership requirements for executives that encourage a long-term focus on performance;

 

    an insider trading policy that prohibits hedging and pledging;

 

    a clawback policy that applies to performance-based compensation, including stock-based awards, for directors and officers; and

 

    oversight by an independent compensation committee.

Compensation Committee Report

The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed its contents with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Livingston L. Satterthwaite, Chair

Carl R. Christenson

Katrina L. Helmkamp

David C. Parry

Cynthia J. Warner

 

 

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2019 Summary Compensation Table

The table below and related footnotes summarize the total compensation earned or paid in 2019, 2018 and 2017 for the Company’s CEO, CFO, and each of the three most highly compensated executive officers other than the CEO and CFO.

 

Name and Principal Position Year Salary
($)
Bonus
($)
Stock
Awards
($) (1)
Option
Awards
($) (2)
Non-Equity
Incentive
Compensation
Plan ($) (3)

All Other
Compensation

($) (4)

Total
($)

 

 

Andrew K. Silvernail,

Chairman, President and

Chief Executive Officer

 

 

 

 

 

2019

 

 

 

 

 

 

 

1,023,654

 

 

 

 

 

 

 

3,837,834

 

 

 

 

 

 

 

2,737,633

 

 

 

 

 

 

 

1,075,320

 

 

 

 

 

 

 

445,155

 

 

 

 

 

 

 

9,119,596

 

 

 

 

 

2018

 

 

 

 

996,808

 

 

 

 

4,117,376

 

 

 

 

2,625,002

 

 

 

 

1,968,000

 

 

 

 

418,464

 

 

 

 

10,125,650

 

 

 

 

2017

 

 

 

 

977,900

 

 

 

 

2,730,307

 

 

 

 

2,200,053

 

 

 

 

1,779,954

 

 

 

 

343,028

 

 

 

 

8,031,242

 

                 

 

William K. Grogan,

Senior Vice President and

Chief Financial Officer

 

 

 

2019

 

 

 

 

505,481

 

 

 

 

792,949

 

 

 

 

565,006

 

 

 

 

336,038

 

 

 

 

130,315

 

 

 

 

2,329,789

 

 

 

 

2018

 

 

 

 

463,808

 

 

 

 

785,139

 

 

 

 

500,181

 

 

 

 

578,100

 

 

 

 

123,367

 

 

 

 

2,450,595

 

 

 

 

2017

 

 

 

 

429,688

 

 

 

 

921,635

 

 

 

 

839,392

 

 

 

 

554,693

 

 

 

 

79,829

 

 

 

 

2,825,237

 

 

 

Eric D. Ashleman,
Senior Vice President and Chief

Operating Officer

 

 

 

 

 

2019

 

 

 

 

 

 

 

620,481

 

 

 

 

 

2,597,181

 

 

 

 

 

 

725,030

 

 

 

 

 

 

 

438,480

 

 

 

 

 

 

 

165,614

 

 

 

 

 

 

 

4,546,786

 

 

 

 

 

2018

 

 

 

 

574,519

 

 

 

 

1,114,356

 

 

 

 

710,045

 

 

 

 

767,520

 

 

 

 

156,558

 

 

 

 

3,322,998

 

 

 

 

2017

 

 

 

 

527,519

 

 

 

 

760,412

 

 

 

 

612,540

 

 

 

 

720,154

 

 

 

 

129,352

 

 

 

 

2,749,977

 

                 

 

Denise R. Cade,
Senior Vice President, General Counsel

and Corporate Secretary

 

 

 

2019

 

 

 

 

471,038

 

 

 

 

634,563

 

 

 

 

452,638

 

 

 

 

288,666

 

 

 

 

128,824

 

 

 

 

1,975,729

 

 

 

 

2018

 

 

 

 

457,231

 

 

 

 

701,752

 

 

 

 

447,620

 

 

 

 

528,080

 

 

 

 

127,374

 

 

 

 

2,262,057

 

 

 

 

2017

 

 

 

 

443,100

 

 

 

 

431,710

 

 

 

 

347,593

 

 

 

 

524,248

 

 

 

 

104,609

 

 

 

 

1,851,260

 

                 

 

Jeffrey D. Bucklew,

Senior Vice President and Chief

Human Resources Officer

 

 

 

2019

 

 

 

 

409,461

 

 

 

 

484,298

 

 

 

 

345,018

 

 

 

 

250,908

 

 

 

 

111,339

 

 

 

 

1,601,024

 

 

 

 

2018

 

 

 

 

395,635

 

 

 

 

533,894

 

 

 

 

340,032

 

 

 

 

459,200

 

 

 

 

109,081

 

 

 

 

1,837,842

 

 

 

 

2017

 

 

 

 

375,185

 

 

 

 

359,951

 

 

 

 

290,043

 

 

 

 

478,039

 

 

 

 

91,305

 

 

 

 

1,594,523

 

 

(1)

Reflects the aggregate grant date fair value of restricted stock awards and PSUs for the year indicated in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of those awards granted in 2019, see note 15 “Share-Based Compensation” of the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. For PSUs granted in 2019, the grant date fair value is based on the probable outcome of the related performance conditions which reflects the target level of performance. The grant date fair value of the PSUs granted in 2019 based on the maximum level of performance is as follows: Mr. Silvernail, $9,594,585; Mr. Grogan, $1,982,373; Mr. Ashleman, $6,492,952; Ms. Cade, $1,586,406; and Mr. Bucklew, $1,210,745. All shares of restricted stock are eligible for dividend equivalent payments when paid on Common Stock and, with respect to PSUs, cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period.

(2)

Reflects the aggregate grant date fair value for the year indicated in accordance with FASB ASC Topic 718. For a discussion of assumptions made in the valuation of stock options granted in 2019, see note 15 “Share-Based Compensation” of the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

(3)

For 2019 and 2018, reflects the annual cash bonus under the MICP; for 2017, reflects Messrs. Silvernail’s, Ashleman’s and Bucklew’s, and Ms. Cade’s annual cash performance award under the IAP and the annual cash bonus under the MICP for Mr. Grogan.

 

43


Table of Contents
(4)

Consists of the following for 2019:

 

Name

 

 

Company

Contribution to
401(k) Plan,

Defined
Contribution
Plan and
Accrued

SERP Benefits
($)

 

   

Automotive,
Supplemental
Disability ($) (a)

 

   

Aircraft ($) (b)

 

   

  Total ($)  

 

 
         

 

Andrew K. Silvernail

 

 

 

 

 

 

311,816  

 

 

 

 

 

 

 

 

27,551  

 

 

 

 

 

 

 

 

105,788  

 

 

 

 

 

 

 

 

445,155  

 

 

 

         

 

William K. Grogan

 

 

 

 

 

 

108,358  

 

 

 

 

 

 

 

 

21,957  

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

130,315  

 

 

 

         

 

Eric D. Ashleman

 

 

 

 

 

 

144,053  

 

 

 

 

 

 

 

 

21,561  

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

165,614  

 

 

 

         

 

Denise R. Cade

 

 

 

 

 

 

104,465  

 

 

 

 

 

 

 

 

24,359  

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

128,824  

 

 

 

         

 

Jeffrey D. Bucklew

 

 

 

 

 

 

90,441  

 

 

 

 

 

 

 

 

20,898  

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

111,339  

 

 

 

 

  (a)

Consists of auto and gas allowance and supplemental disability premiums.

  (b)

Represents Mr. Silvernail’s personal use of the Company’s leased aircraft. The Company’s methodology for calculating the value of the personal use of the Company leased aircraft is to calculate the incremental costs of such usage to the Company, which includes fuel, landing fees, hangar fees, catering, additional expenses related to the crew and other expenses which would not have otherwise been incurred by the Company if the aircraft had not been used for personal travel.

 

44


Table of Contents

Narrative to 2019 Summary Compensation Table

Perquisites and Supplemental Disability

In addition to benefits generally available to all other U.S.-based non-union employees, the CEO and other NEOs receive an auto allowance and participate in a supplemental long-term disability program. The supplemental disability benefit is in addition to the group long-term disability benefit generally available to all U.S.-based non-union employees. The group long-term disability plan provides an annual benefit of 60% of the first $300,000 of base salary, or an annual maximum benefit of $180,000 per year. For the NEOs, the supplemental program provides an annual benefit of 60% of their base salary above $300,000, with a maximum supplemental benefit of $60,000 per year. The CEO is also offered the personal use of the Company leased aircraft (limited to 25 hours per year covered by the Company and up to an additional 25 hours per year for which the CEO is required to reimburse the Company for all incremental costs related to such additional use).

Retirement Benefits

The Company maintains a tax-qualified retirement plan for employees, the IDEX Corporation Savings Plan, in which the CEO and other NEOs participate, which consists of a 401(k) with a prescribed matching contribution (401(k)) and a defined contribution portion (Defined Contribution).

 

Defined Contribution

The Defined Contribution portion of the IDEX Corporation Savings Plan is an ongoing tax-qualified “defined contribution” plan that provides contributions based on a participant’s compensation and a combination of the participant’s age and years of service as shown below:

 

Age + Years of

Service

  Company
Contribution
Less than 40   3.5% of Eligible
Compensation
40 but less than 55   4.0% of Eligible
Compensation
55 but less than 70   4.5% of Eligible
Compensation
70 or more   5.0% of Eligible
Compensation

Under the plan, participants are entitled to receive the lump-sum value of their vested account at termination of employment subject to distribution rules under the law. Account balances are 100% vested after three years of service.

401(k)

The 401(k) is an ongoing tax-qualified “401(k)” plan that provides a matching contribution based on the employee’s contribution up to 8% of eligible compensation. The maximum matching contribution by the Company is 4% of eligible compensation. The matching contribution vests 20% for each year of service and is 100% vested after 5 years of service.

 

 

45


Table of Contents

2019 Grants of Plan-Based Awards

The following table provides information on plan-based awards for all NEOs for 2019.

 

      

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards (1)

  Estimated Future Payouts Under
Equity Incentive Plan Awards (2)
    All Other
Stock
Awards:
Number of
Shares of
Stock (#)
    All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
    Exercise or
Base Price of
Option
Awards
($/Sh)
(3)
    Grant Date
Fair Value of
Stock and
Option
Awards ($)
(4)
 
Name   Grant Date    

Threshold

($)

 

Target

($)

   

Maximum

($)

 

  Threshold  

(#)

   

  Target  

(#)

   

  Maximum  

(#)

 

 

Andrew K. Silvernail

 

 

 

 

 

 

03/01/2019

 

 

 

 

 

 

0  

 

 

 

 

 

 

1,236,000

 

 

 

 

 

 

2,472,000  

 

 

 

 

 

 

6,300

 

 

 

 

 

 

 

 

 

18,900

 

 

 

 

 

 

 

 

 

47,250

 

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

77,840

 

 

 

 

 

 

 

 

 

144.85

 

 

 

 

 

 

 

 

 

6,575,467

 

 

 

 

 

William K. Grogan

 

 

 

 

 

 

03/01/2019

 

 

 

 

 

 

0  

 

 

 

 

 

 

386,250

 

 

 

 

 

 

772,500  

 

 

 

 

 

 

1,302

 

 

 

 

 

 

 

 

 

3,905

 

 

 

 

 

 

 

 

 

9,763

 

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

16,065

 

 

 

 

 

 

 

 

 

144.85

 

 

 

 

 

 

 

 

 

1,357,955

 

 

 

 

 

Eric D. Ashleman

 

 

 

 

 

 

03/01/2019

 

 

 

 

 

 

0  

 

 

 

 

 

 

504,000

 

 

 

 

 

 

1,008,000  

 

 

 

 

 

 

1,670

 

 

 

 

 

 

 

 

 

5,010

 

 

 

 

 

 

 

 

 

12,525

 

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

20,615

 

 

 

 

 

 

 

 

 

144.85

 

 

 

 

 

 

 

 

 

1,742,361

 

 

 

 

   

 

 

 

 

03/28/2019

 

 

(5) 

 

 

 

-  

 

 

 

 

 

 

-

 

 

 

 

 

-  

 

 

 

 

 

 

2,202

 

 

 

 

 

 

 

 

 

6,605

 

 

 

 

 

 

 

 

 

16,513

 

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

1,579,850

 

 

 

 

 

Denise R. Cade

 

 

 

 

 

 

03/01/2019

 

 

 

 

 

 

0  

 

 

 

 

 

 

331,800

 

 

 

 

 

 

663,600  

 

 

 

 

 

 

1,042

 

 

 

 

 

 

 

 

 

3,125

 

 

 

 

 

 

 

 

 

7,813

 

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

12,870

 

 

 

 

 

 

 

 

 

144.85

 

 

 

 

 

 

 

 

 

1,087,201

 

 

 

 

 

Jeffrey D. Bucklew

 

 

 

 

 

 

03/01/2019

 

 

 

 

 

 

0  

 

 

 

 

 

 

288,400

 

 

 

 

 

 

576,800  

 

 

 

 

 

 

795

 

 

 

 

 

 

 

 

 

2,385

 

 

 

 

 

 

 

 

 

5,963

 

 

 

 

 

 

 

 

 

-    

 

 

 

 

 

 

 

 

9,810

 

 

 

 

 

 

 

 

 

144.85

 

 

 

 

 

 

 

 

 

829,316

 

 

 

 

(1)

Amounts reflect payment levels under the MICP at a percentage of base salary for each executive and a Business Performance Factor of 0% for threshold, 100% for target and 200% for maximum. See “Short-Term Incentives” under “Compensation Discussion and Analysis — 2019 Executive Compensation Program.” The amounts actually earned by the NEOs are reflected in the Non-Equity Incentive Plan Compensation column in the 2019 Summary Compensation Table.

(2)

Reflects the range of the number of shares of Common Stock that could be issued pertaining to the PSUs awarded in 2019 under the IAP. The target number of PSUs is used to determine the grant date fair value for this award.

(3)

Reflects closing price of Common Stock on the grant date, which is the fair market value of the stock under the terms of the IAP.

(4)

Represents the grant date fair value of PSUs and stock options granted under the IAP to each NEO in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of those awards, see note 15 “Share-Based Compensation” of the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. For PSUs, the grant date fair value is based on the probable outcome of the related performance conditions which reflects the target level of performance. The grant date fair value of the PSUs granted in 2019 based on the maximum level of performance is as follows: Mr. Silvernail, $9,594,585; Mr. Grogan, $1,982,373; Mr. Ashleman, $6,492,952; Ms. Cade, $1,586,406; and Mr. Bucklew, $1,210,745. With respect to PSUs, cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period. For options, the actual value a NEO realizes from the stock option will depend on the difference between the market price of the underlying share at exercise and the exercise price of the stock option established at the time of the grant.

(5)

Reflects the special performance grant awarded to Mr. Ashleman. See “2019 COO Award” under “2019 Long-Term Incentive Awards.”

Narrative to 2019 Grants of Plan-Based Awards Table

Stock options awarded to the NEOs in 2019 had the following characteristics:

 

   

all are nonqualified stock options;

 

   

all have an exercise price equal to the closing price of Common Stock on the grant date;

 

   

all vest annually in equal amounts over a four-year period based on the NEO’s continued service;

 

   

all vest upon retirement if retirement eligible (for the CEO as defined in his employment agreement and for NEOs other than the CEO, NEO is at least age 50, with a minimum of five years of service, and the NEO’s age plus years of service equals 70); and

 

   

all expire 10 years after the date of grant.

 

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Table of Contents

PSUs awarded to the NEOs in 2019 had the following characteristics:

 

   

all have a three-year performance period with vesting based on relative TSR and the NEO’s continued service;

 

   

all shares vest upon retirement if the NEO is retirement eligible (for the CEO as defined in his employment agreement and for NEOs other than the CEO, the NEO is retirement eligible when he or she is at least age 50, with a minimum of five years of service, and the NEO’s age plus years of service equals 70); but are paid out only based on the Company’s actual TSR as compared to the companies in the Russell Midcap Index determined as of the last day of the performance period; and

 

   

cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period.

 

47


Table of Contents

Outstanding Equity Awards at 2019 Fiscal Year End

The following table provides information on all PSU, restricted stock and stock option awards held by the NEOs as of December 31, 2019.

 

    

 

Option Awards

 

   

 

Stock Awards

 

 
     Number of Securities Underlying
Unexercised Options
   

Option
Exercise
Price

($)

    Option
Expiration
Date
    Number of
Shares of Stock
that Have Not
Vested (#) (2)
    Market Value of
Shares of Stock
that Have Not
Vested ($) (3)
   

Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#) (4)

 

   

 

Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($) (4)

 

 

 

Name

 

 

 

Exercisable

(#) (1)

 

   

 

Unexercisable

(#) (1)

 

 

 

Andrew K. Silvernail

 

 

 

 

101,902

 

 

 

 

 

 

33,968

 

 

 

 

 

 

74.74

 

 

 

 

 

 

02/19/2026

 

 

 

 

 

 

-    

 

 

 

 

 

-    

 

 

 

 

 

 

 

64,846

 

 

 

 

 

11,153,512

 

   

 

45,587

 

 

 

45,588

 

 

 

93.27

 

 

 

02/22/2027

 

             
   

 

17,292

 

 

 

51,878

 

 

 

138.12

 

 

 

02/22/2028

 

             
   

 

 

-    

 

 

 

 

 

77,840

 

 

 

 

 

 

144.85

 

 

 

 

 

 

03/01/2029

 

 

 

                               

 

William K. Grogan

 

 

 

 

843

 

 

 

 

 

 

-    

 

 

 

 

 

 

50.45

 

 

 

 

 

 

02/15/2023

 

 

 

 

 

 

5,485

 

 

 

 

 

 

943,420

 

 

 

 

 

 

12,827

 

 

 

 

 

 

2,206,244

 

 

   

 

1,798

 

 

 

-    

 

 

 

72.73

 

 

 

02/13/2024

 

             
   

 

1,383

 

 

 

-    

 

 

 

67.49

 

 

 

10/15/2024

 

             
   

 

2,575

 

 

 

-    

 

 

 

78.43

 

 

 

02/20/2025

 

             
   

 

4,076

 

 

 

1,359

 

 

 

74.74

 

 

 

02/19/2026

 

             
   

 

10,557

 

 

 

10,558

 

 

 

91.22

 

 

 

01/03/2027

 

             
   

 

7,032

 

 

 

7,033

 

 

 

93.27

 

 

 

02/22/2027

 

             
   

 

3,295

 

 

 

9,885

 

 

 

138.12

 

 

 

02/22/2028

 

             
   

 

 

-    

 

 

 

 

 

16,065

 

 

 

 

 

 

144.85

 

 

 

 

 

 

03/01/2029

 

 

 

                               

 

Eric D. Ashleman

 

 

 

 

8,850

 

 

 

 

 

 

-    

 

 

 

 

 

77.61

 

 

 

 

 

 

07/15/2025

 

 

 

 

 

 

-    

 

 

 

 

 

-    

 

 

 

 

 

27,497

 

 

 

 

 

 

4,729,484

 

 

   

 

-    

 

 

6,998

 

 

 

74.74

 

 

 

02/19/2026

 

             
   

 

12,692

 

 

 

12,693

 

 

 

93.27

 

 

 

02/22/2027

 

             
   

 

4,677

 

 

 

14,033

 

 

 

138.12

 

 

 

02/22/2028

 

             
   

 

 

-    

 

 

 

 

 

20,615

 

 

 

 

 

 

144.85

 

 

 

 

 

 

03/01/2029

 

 

 

                               

 

Denise R. Cade

 

 

 

 

2,092

 

 

 

 

 

 

-    

 

 

 

 

 

76.79

 

 

 

 

 

 

10/26/2025

 

 

 

 

 

 

-    

 

 

 

 

 

-    

 

 

 

 

 

10,906

 

 

 

 

 

 

1,875,832

 

 

   

 

-    

 

 

3,234

 

 

 

74.74

 

 

 

02/19/2026

 

             
   

 

-    

 

 

7,203

 

 

 

93.27

 

 

 

02/22/2027

 

             
   

 

2,948

 

 

 

8,847

 

 

 

138.12

 

 

 

02/22/2028

 

             
   

 

 

-    

 

 

 

 

 

12,870

 

 

 

 

 

 

144.85

 

 

 

 

 

 

03/01/2029

 

 

 

                               

 

Jeffrey D. Bucklew

 

 

 

 

9,930

 

 

 

 

 

 

3,310

 

 

 

 

 

 

74.74

 

 

 

 

 

 

02/19/2026

 

 

 

 

 

 

-    

 

 

 

 

 

-    

 

 

 

 

 

8,309

 

 

 

 

 

 

1,429,148

 

 

   

 

6,010

 

 

 

6,010

 

 

 

93.27

 

 

 

02/22/2027

 

             
   

 

2,240

 

 

 

6,720

 

 

 

138.12

 

 

 

02/22/2028

 

             
   

 

 

-    

 

 

 

 

 

9,810

 

 

 

 

 

 

144.85

 

 

 

 

 

03/01/2029

 

                               

 

(1)

All options expire on the 10th anniversary of the grant date and vest 25% per year on the anniversary of the grant date. As discussed in “Potential Payments upon Termination or Change in Control”, all stock options vest 100% upon a qualifying termination of employment following a change in control.

 

48


Table of Contents
(2)

The following table sets forth grant and vesting information for the outstanding restricted stock awards for Mr. Grogan, the only NEO who held an outstanding restricted stock award as of December 31, 2019. The award will vest 100% upon a qualifying termination of employment following a change in control.

 

  

 

  Grant Date    

Shares

(#)

    Market
Value Per
Share at
Grant ($)
   

 

Number of
Shares of
Stock that
Have Not
Vested (#)

 

   

 

Market Value
of Shares of
Stock that
Have Not
Vested ($)

 

    Vesting  

 

William K. Grogan

 

 

 

 

 

 

01/03/2017

 

 

 

 

 

 

 

 

 

5,485

 

 

 

 

 

 

 

 

 

91.22

 

 

 

 

 

 

 

 

 

5,485

 

 

 

 

 

 

 

 

 

943,420

 

 

 

 

 

 

 

 

 

100% vest on 01/03/2020

 

 

 

 

 

(3)

Determined based upon the closing price of the Company’s Common Stock on December 31, 2019 of $172.00.

 

(4)

Represents the number and value of outstanding PSU awards based on performance as of December 31, 2019 as set forth in the following table. Actual number of shares delivered upon vesting will be based on performance through December 31, 2020 for the 2018 PSU award and performance through December 31, 2021 for the 2019 PSU award. The 2018 PSU awards are disclosed at 189% of the target and the 2019 PSU awards are disclosed at 153% of the target based on performance through December 31, 2019.

 

  

 

  Grant Date    

Number of
PSUs

(#)

   

 

Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have  Not
Vested ($)

 

 

    Vesting  

 

Andrew K. Silvernail

 

 

 

 

02/22/2018

 

 

 

 

 

 

19,010

 

 

 

 

 

 

6,179,788

 

 

 

 

 

 

Award vests on 12/31/2020

 

 

   

 

 

03/01/2019

 

 

 

 

 

 

18,900

 

 

 

 

 

 

4,973,724

 

 

 

 

 

 

Award vests on 12/31/2021

 

 

 

 

William K. Grogan

 

 

 

 

02/22/2018

 

 

 

 

 

 

3,625

 

 

 

 

 

 

1,178,544

 

 

 

 

 

 

Award vests on 12/31/2020

 

 

   

 

03/01/2019

 

 

 

3,905

 

 

 

1,027,700

 

 

 

Award vests on 12/31/2021

 

 

Eric D. Ashleman

 

 

 

 

02/22/2018

 

 

 

 

 

 

5,145

 

 

 

 

 

 

1,672,700

 

 

 

 

 

 

Award vests on 12/31/2020

 

 

   

 

03/01/2019

 

 

 

5,010

 

 

 

1,318,552

 

 

 

Award vests on 12/31/2021

 

   

 

 

03/28/2019

 

 

 

 

 

 

6,605

 

 

 

 

 

 

1,738,232

 

 

 

 

 

 

Award vests on 12/31/2021

 

 

 

 

Denise R. Cade

 

 

 

 

02/22/2018

 

 

 

 

 

 

3,240

 

 

 

 

 

 

1,053,328

 

 

 

 

 

 

Award vests on 12/31/2020

 

 

   

 

 

03/01/2019

 

 

 

 

 

 

3,125

 

 

 

 

 

 

822,504

 

 

 

 

 

 

Award vests on 12/31/2021

 

 

 

 

Jeffrey D. Bucklew

 

 

 

 

02/22/2018

 

 

 

 

 

 

2,465

 

 

 

 

 

 

801,348

 

 

 

 

 

 

Award vests on 12/31/2020

 

 

   

 

 

03/01/2019

 

 

 

 

 

 

2,385

 

 

 

 

 

 

627,800

 

 

 

 

 

 

Award vests on 12/31/2021

 

 

 

 

49


Table of Contents

2019 Option Exercises and Stock Vested

The following table provides information on stock option exercises and stock vesting for all NEOs in 2019.

 

    

 

Option Awards

 

   

 

Stock Awards

 

 

Name

 

 

 

Number of Shares
Acquired on
Exercise (#)

 

   

Value Realized
Upon Exercise ($) (1)

 

   

 

Number of Shares
Acquired on
Vesting (#)

 

   

Value Realized
Upon Vesting ($) (2)

 

 

Andrew K. Silvernail

 

 

166,905

 

 

 

14,344,221

 

 

 

58,975

 

 

 

10,143,700

 

William K. Grogan

 

 

-    

 

 

 

-