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. )
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☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to §240.14a-12 |
IDEX Corporation (Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
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3100 Sanders Road, Suite 301
Northbrook, IL 60062
March 23, 2021
Dear Stockholders,
You are cordially invited to attend the Annual Meeting of Stockholders of IDEX Corporation (the Company) in a virtual format only via the Internet, which will be held on Wednesday, May 12, 2021, at 9:00 a.m. Central Time. In order to attend the Annual Meeting, vote during the Annual Meeting and submit questions, stockholders must go to http://www.virtualshareholdermeeting.com/IEX2021 and enter the 16-digit control number found in their proxy materials.
The meeting will be held virtually due to the continuing public health impact of the COVID-19 pandemic and to support the health and well-being of IDEX management and stockholders. 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 2021 Annual Meeting, including the nominees for election of directors named in this proxy statement.
We will provide access to our proxy materials and 2020 Annual Report on the Internet and are mailing paper copies only to those 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 2021 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,
WILLIAM M. COOK
Chairman of the Board
NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
Date and Time | Wednesday, May 12, 2021, at 9:00 a.m. Central Time
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Place | Go to http://www.virtualshareholdermeeting.com/IEX2021 and enter the 16-digit control number found in your proxy materials
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Agenda | 1. Election of the three members of the IDEX Board of Directors named in this proxy, each for a term of three years
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2. Advisory vote to approve named executive officer compensation
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3. Ratification of the appointment of Deloitte & Touche LLP as our independent registered accounting firm for 2021
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4. To transact such other business as may properly come before the 2021 Annual Meeting or any adjournment or postponement thereof
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Voting Recommendations | The Companys Board of Directors recommends that you vote:
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1. FOR all the director nominees
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2. FOR the approval of the compensation of our named executive officers
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3. FOR the ratification of the appointment of Deloitte & Touche LLP
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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 2021 Annual Meeting.
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March 23, 2021 | By Order of the Board of Directors,
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DENISE R. CADE Senior Vice President, General Counsel and Corporate Secretary |
Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting The Proxy Statement and 2020 Annual Report are available online at: http://phx.corporate-ir.net/phoenix.zhtml?c=83305&p=irol-reportsAnnual
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Boards Role in Talent Development, Strategic Planning and DEI |
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STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2022 ANNUAL MEETING OF STOCKHOLDERS |
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IDEX Corporation (the Company or IDEX) has prepared this proxy statement (Proxy Statement) in connection with the solicitation by the Companys Board of Directors (the Board) of proxies for the Annual Meeting of Stockholders to be held virtually on Wednesday, May 12, 2021, at 9:00 a.m. Central Time (the Annual Meeting). In order to attend the Annual Meeting, vote during the Annual Meeting and submit questions, stockholders must go to http://www.virtualshareholdermeeting.com/IEX2021 and enter the 16-digit control number found in their proxy materials. The meeting webcast will begin promptly at 9:00 a.m., Central Time, on May 12, 2021. We encourage you to access the webcast prior to the scheduled start time of the Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting, please call the technical support number that will be posted on the virtual shareholder meeting log in page. The Company commenced distribution of, or otherwise made available, this Proxy Statement and the accompanying materials on March 23, 2021.
Who is entitled to vote at the Annual Meeting?
You are entitled to vote if you owned shares of IDEXs common stock, par value $0.01 per share (Common Stock) as of the close of business on March 15, 2021, the record date of the Annual Meeting. On the record date, a total of 75,920,203 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 virtually, we encourage you to vote as soon as possible, using one of the methods listed below.
By Internet
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By Telephone
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By Mail
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Virtually
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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 |
In order to vote during the Annual Meeting you
must go to http://www.virtualshareholder have previously voted by Internet, telephone or mail. |
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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.
Will I be able to ask questions at the Annual Meeting?
We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. Our directors and members of our management team will join the virtual meeting and be available for questions, and we are committed to answering all relevant questions we receive during the meeting. Stockholders may submit questions during the meeting through the virtual meeting platform at http://www.virtualshareholdermeeting.com/IEX2021 and enter the 16-digit control number found in their proxy materials. We will address as many questions during the meeting as time permits, but if there are any questions that cannot be addressed due to time constraints or for any other reason, we will post answers to such questions on our website following the meeting. If we receive substantially similar questions, we may group them together and provide a single response to avoid repetition. Only questions that are relevant to the purpose of the Annual Meeting or our business will be answered.
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 entitled to vote at the meeting present at the Annual Meeting 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 virtually at the Annual Meeting. 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 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 for purposes of determining the presence of a quorum for the transaction of business at the Annual Meeting.
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What are the voting requirements?
Proposal | Vote Required | Effect of Broker Non-Votes |
Effect of Abstentions | |||
Election of Directors |
A nominee for director will be elected if the votes cast for such nominee exceed the votes cast against such nominee |
No effect | No effect | |||
Advisory Vote on Executive Compensation |
The affirmative vote of a majority of shares present at the Annual Meeting 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 at the Annual Meeting or represented by proxy and entitled to vote on the matter | Brokers have discretion to vote |
Against |
What happens if a nominee does not receive a majority vote in an uncontested election?
The Companys Corporate Governance Guidelines provide for a majority vote with respect to the election of directors. Any nominee who receives a greater number of against 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.
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 each of the Companys nominees named in this proxy as directors.
2. FOR the approval of the compensation of the Companys named executive officers.
3. FOR the ratification of the appointment of auditors.
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.
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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 Corporate Secretary, IDEX Corporation, 3100 Sanders Road, Suite 301, Northbrook, IL 60062. |
4. | Voting virtually at the Annual Meeting at http://www.virtualshareholdermeeting.com/IEX2021 and enter the 16-digit control number found in your proxy materials. |
If your shares are held in street name, please contact your broker, financial institution or other nominee and comply with such nominees 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 Companys officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Boards 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.
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 it. 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 2021 ANNUAL MEETING
PROPOSAL 1 ELECTION OF DIRECTORS
The Companys 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 eleven members, four of whom are Class II directors whose terms will expire at this years Annual Meeting, three of whom are Class III directors whose terms will expire at the Annual Meeting to be held in 2022, and four of whom are Class I directors whose terms will expire at the Annual Meeting to be held in 2023.
Cynthia J. Warner, a Class II director since 2013, is retiring from the Board immediately following this years Annual Meeting and will not stand for reelection at the Annual Meeting. Accordingly, the size of the Board will be reduced to ten members following the Annual Meeting. The Company is grateful to Ms. Warner for her invaluable insights and contributions during her Board service, including her leadership as Chair of the Nominating and Corporate Governance Committee.
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Overview of IDEX Board of Directors
Our directors have a proven record of success, exhibit high integrity, are loyal to the Company and committed to its success and have knowledge of corporate governance and practices. Ten out of our 11 current directors are independent, the average tenure of our directors is 5.7 years, and the average age of our directors is 59.6 years old. The matrix below illustrates the diverse set of skills, knowledge, experiences, backgrounds and personal attributes represented on our Board.
CLASS I DIRECTORS |
CLASS II DIRECTORS |
CLASS III DIRECTORS | ||||||||||||||||||||
Experience, Skill or Attribute |
Ashleman |
Beck |
Christenson |
Helmkamp |
Buthman |
Cook |
Gunter |
Warner |
Mrozek |
Parry |
Satterthwaite | |||||||||||
Leadership, Strategy and Operations: | ||||||||||||||||||||||
Deep senior leadership experience with the following: | ||||||||||||||||||||||
Decentralized/diversified business |
x |
x |
x |
x |
x |
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Scale |
x |
x |
x |
x |
x |
x |
x |
x | ||||||||||||||
International/global manufacturing |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x | ||||||||||||
M&A |
x |
x |
x |
x |
x |
x |
x |
x |
x |
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Customer-focused organic growth |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x | |||||||||||
Technology/innovation |
x |
x |
x |
x |
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Current or former CEO and/or President |
x |
x |
x |
x |
x |
x |
x | |||||||||||||||
Other public company board experience |
x |
x |
x |
x |
x |
x |
x |
x |
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ESG/corporate social responsibility experience |
x |
x |
x |
x | ||||||||||||||||||
Financial: | ||||||||||||||||||||||
High level of financial literacy |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x | |||||||||||
Audit Committee Financial Expert |
x |
x |
x |
x |
x |
x |
x |
x |
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Board Tenure: | ||||||||||||||||||||||
Years |
.3 |
3.2 |
1.9 |
5.5 |
4.11 |
12.11 |
.2 |
8.1 |
10.8 |
8.3 |
9.11 | |||||||||||
Demographic Information: | ||||||||||||||||||||||
Gender | ||||||||||||||||||||||
Male |
x |
x |
x |
x |
x |
x |
x |
x | ||||||||||||||
Female |
x |
x |
x |
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Age (Years Old) |
54 |
55 |
61 |
55 |
60 |
67 |
48 |
62 |
67 |
67 |
60 | |||||||||||
Nationality | ||||||||||||||||||||||
American |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x | |||||||||||
British |
x |
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Race/Ethnicity | ||||||||||||||||||||||
Hispanic or Latino |
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White |
x |
x |
x |
x |
x |
x |
x |
x |
x |
x | ||||||||||||
Asian |
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Black or African American |
x |
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Native Hawaiian or Other Pacific Islander |
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American Indian or Alaska Native |
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Two or more races |
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Openly LGBTQ |
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The Board has nominated three individuals for election as Class II directors to serve for a three-year term expiring at the Annual Meeting to be held in 2024, or upon the election and qualification of their successors. The nominees of the Board are William M. Cook, Mark A. Buthman and Lakecia N. Gunter, each of whom is currently serving as a director of the Company. Ms. Gunter was recommended by a third-party search firm the Nominating and Corporate Governance Committee retained at the expense of the Company.
The nominees and the other incumbent directors 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 2021 Class II director nominees
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Mr. Cook was appointed Non-Executive Chairman of the Board of the Company in December 2020. Prior to that since April 2015, Mr. Cook served as Lead Director of the Company. He served as Executive Chairman of the Board of Donaldson Company, Inc. from 2015 to 2016. Mr. Cook retired as the Chairman, President and Chief Executive Officer of Donaldson in April 2015, having served since 2005; and was President and Chief Executive Officer from 2004 to 2005.
Mr. Cooks strong business, financial and organizational leadership skills and his relevant global experience in leading 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 designs and manufactures innovative filtration systems and their replacement parts, Mr. Cook served in several senior executive positions in the U.S. and Europe, including as Chief Financial Officer and Senior Vice President, International.
William M. Cook Age: 67 Director since April 2008 Independent Committees: Audit
Mr. Cook received a bachelor of science degree in business management and a master of business administration degree from Virginia Polytechnic Institute and State University.
Mr. Cook is non-executive chairman of the board of Neenah, Inc. and a director of Axalta Coating Systems, Ltd.
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: 60 Director since April 2016 Independent Committees: Audit (Chair)
Mr. Buthmans 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, who has been a disciplined financial leader with a track record of allocating capital in shareholder-friendly ways, provides insights that are 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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Ms. Gunter has served since May 2020 as Vice President and General Manager of IoT Global and Strategic Engagement at Microsoft Corporation, a leading global developer, manufacturer and licensor of consumer electronics. From April 2018 to May 2020, Ms. Gunter was Vice President of the Programmable Solutions Group and General Manager of Ecosystem Development and Operations at Intel Corporation, a leading global designer, manufacturer and marketer of computer products and technologies. Prior to that since October 2008, Ms. Gunter served in several leadership roles at Intel, including Chief of Staff and Technical Assistant to the CEO. Prior to joining Intel, Ms. Gunter held several positions at the Department of Defense from 2004 to 2008.
Lakecia N. Gunter Age: 48 Director since January 2021 Independent Committees: Compensation
Ms. Gunters deep technology and digital innovation experience and her extensive strategic and commercial leadership experience gained at two Fortune 50 companies led to the conclusion that she should serve on the Board of Directors. Ms. Gunter has successfully developed and executed strategic initiatives to create new business models and to accelerate the growth and increase the profitability of multiple technology solutions. Ms. Gunter architected the operating model to transform Intel from a PC-centric company to a data-centric company, which transformation led to a greater than 50% increase in revenues within 18 months.
Ms. Gunter received a bachelor of science degree in computer engineering from the University of South Florida and a master of science degree in electrical engineering from the Georgia Institute of Technology.
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Class III: Three-Year Term Expires in 2022
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. Mrozeks 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: 67 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 formerly served as a director of Advanced Disposal Services, Inc. and G&K Services Inc.
Mr. Satterthwaite has served since March 2021 as Vice Chairman of Cummins, Inc., a global power leader that designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products. Prior to that since October 2019, he was President and Chief Operating Officer of Cummins. 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: 60 Director since April 2011 Independent Committees: Compensation (Chair) Nominating and Corporate Governance
Mr. Satterthwaites 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.
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. Parrys 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: 67 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.
Mr. Parry previously served as a director of Celanese Corporation.
Class I: Three-Year Term Expires in 2023
Ms. Helmkamp has served as President and 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: 55 Director since November 2015 Independent Committees: Compensation Nominating and Corporate Governance (Chair)
Ms. Helmkamps 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
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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.
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.
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 worlds 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 Danahers 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 Cornings 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: 55 Director since January 2018 Independent Committees: Audit
Mr. Becks 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 chairman of the board of Owens & Minor, Inc.
12
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 Woods Incorporated and several positions at the Torrington Company, a division of Ingersoll Rand.
Carl R. Christenson Age: 61 Director since June 2019 Independent Committees: Compensation Nominating and Corporate Governance
Mr. Christensons 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.
Mr. Ashleman was appointed a director and Chief Executive Officer of the Company in December 2020. He has served as President of the Company since February 2020. Prior to that, Mr. Ashleman served since July 2015 as the Companys Chief Operating Officer. From February 2014 to July 2015, Mr. Ashleman was Senior Vice President and Group Executive of the Companys Global Dispensing, Fire & Safety/Diversified Products and Health & Science and Optics business segments. From September 2011 to February 2014, Mr. Ashleman was Vice President and Group Executive of the Companys Fire & Safety/Diversified Products business segment. From April 2010 to September 2011, Mr. Ashleman was President of Gast Manufacturing and Global Dispensing. Mr. Ashleman joined IDEX in March 2008 as President of Gast Manufacturing.
Eric D. Ashleman Age: 54 Director since December 2020 Chief Executive Officer and President
Mr. Ashlemans significant industrial manufacturing and operations experience, coupled with his extensive management experience, led to the conclusion that he should serve on the Board of Directors. Mr. Ashleman has been integral to the Companys success, including his role in developing our distinct culture, business model and global strategy.
Mr. Ashleman received a bachelor of arts degree in economics and a master of business administration degree from the University of Michigan.
Mr. Ashleman is a director of Modine Manufacturing Co.
13
NOT STANDING FOR REELECTION
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 Andeavors 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: 62 Director since February 2013 Independent Committees: Compensation Nominating and Corporate Governance
Ms. Warners 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 BPs 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 BPs global facilities.
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.
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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 to determine market pay is the peer group of companies. The peer group used in this analysis was the same peer group used for the Companys 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 2020 is set forth below. In December 2020, Mr. Cook was appointed Non-Executive Chairman of the Board and his additional fee is listed below.
2020 | ||
Annual Retainer and Meeting Fees
|
$ 90,000
| |
Committee Chair Retainer
|
||
Audit Committee
|
$ 18,000
| |
Compensation Committee
|
$ 12,500
| |
Nominating and Corporate Governance Committee
|
$ 10,000
| |
Additional Lead Director Fees
|
||
Annual Retainer
|
$ 15,000
| |
Annual Equity Grant (100% Restricted Stock Units)
|
$ 15,000
| |
Additional Non-Executive Chairman of the Board Fees
|
||
Annual Retainer
|
$ 100,000
| |
Annual Equity Grant (100% Restricted Stock Units)
|
$ 50,000
| |
Value of Equity Grants Upon Initial Election to the Board (100% Restricted Stock Units)
|
Pro-rated annual
grant | |
Value of Annual Equity Grants (100% Restricted Stock Units)
|
$145,000
|
24
25
The following table summarizes the total compensation earned in 2020 for the Companys non-management directors. Neither Mr. Ashleman nor Mr. Silvernail received any additional compensation for his service as a director during 2020.
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) (1) |
All Other Compensation ($) (2) |
Total ($) | ||||
Mark A. Beck
|
90,000
|
145,000
|
|
235,000
| ||||
Mark A. Buthman
|
108,000
|
145,000
|
5,000
|
258,000
| ||||
Carl R. Christenson
|
90,000
|
145,000
|
10,000
|
245,000
| ||||
William M. Cook
|
108,927(3)
|
160,000
|
10,000
|
278,927
| ||||
Katrina L. Helmkamp
|
100,000
|
145,000
|
10,000
|
255,000
| ||||
Ernest J. Mrozek
|
90,000
|
145,000
|
10,000
|
245,000
| ||||
David C. Parry
|
90,000
|
145,000
|
|
235,000
| ||||
Livingston L. Satterthwaite
|
102,500
|
145,000
|
|
247,500
| ||||
Cynthia J. Warner
|
90,000
|
145,000
|
|
235,000
|
(1) | Reflects the aggregate grant date fair value of the restricted stock units granted in 2020, determined in accordance with FASB ASC Topic 718 using the assumptions set forth in the footnotes to financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2020, assuming no forfeitures. |
(2) | Reflects matching gifts of up to $10,000 per year directed to Internal Revenue Code 501(c)(3) tax-exempt, non-profit organizations under the IDEX Corporation Matching Gift Program. |
(3) | Reflects Mr. Cooks fees prorated for his service as Lead Director until December 14, 2020 and as Non-Executive Chairman of the Board beginning December 15, 2020. |
26
Directors Outstanding Equity Awards at 2020 Fiscal Year End
The following table provides information on restricted stock units and stock option awards held by the Companys non-management directors and the value of those awards as of December 31, 2020. All outstanding awards are in or exercisable for shares of Common Stock.
Option Awards
|
Stock Awards
| |||||||||||||||||||||||||
Number of Securities
|
Number of Shares or Units of Stock that Have Not Vested and
|
Market Value
| ||||||||||||||||||||||||
Name | Grant Date | Type | # Shares (#) |
Shares Exercised (#)
|
Exercisable (#) (a)
|
Unexercisable (#)
|
Option Exercise Price ($)
|
Option Expiration Date (a)
|
||||||||||||||||||
Mark A. Beck |
01/02/18 | RSU | 310 | 61,752 | ||||||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
Mark A. Buthman |
04/06/16 | RSU | 1,290* | 256,968 | ||||||||||||||||||||||
02/22/17 | RSU | 1,290* | 256,968 | |||||||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
Carl R. Christenson |
06/17/19 | RSU | 725 | 144,240 | ||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
William M. Cook |
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 | |||||||||||||||||||
04/25/18 | RSU | 1,055 | 210,156 | |||||||||||||||||||||||
05/10/19 | RSU | 940 | 187,248 | |||||||||||||||||||||||
05/07/20 | RSU | 1,045 | 208,164 | |||||||||||||||||||||||
Katrina L. Helmkamp |
02/19/16 | RSU | 1,610* | 320,712 | ||||||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
Ernest J. Mrozek |
02/15/13 | NQSO | 3,075 | 0 | 3,075 | 0 | 50.45 | 02/15/2023 | ||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
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 | |||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
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* | 279,876 | |||||||||||||||||||||||
02/19/16 | RSU | 1,610* | 320,712 | |||||||||||||||||||||||
02/22/17 | RSU | 1,290* | 256,968 | |||||||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 | |||||||||||||||||||||||
Cynthia J. Warner |
02/15/13 | NQSO | 4,610 | 0 | 4,610 | 0 | 50.45 | 02/15/2023 | ||||||||||||||||||
04/25/18 | RSU | 945 | 188,244 | |||||||||||||||||||||||
05/10/19 | RSU | 845 | 168,324 | |||||||||||||||||||||||
05/07/20 | RSU | 950 | 189,240 |
(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. Amounts marked with an asterisk have vested but the non-employee director has elected to defer settlement. Other amounts listed in this column have not vested or settled. |
(c) | Determined based upon the closing price of the Companys Common Stock on December 31, 2020. |
27
The following table furnishes information as of March 15, 2021, 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 15, 2021. Shares of Common Stock subject to options that are exercisable within 60 days of March 15, 2021, 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 3100 Sanders Road, Suite 301, Northbrook, IL 60062.
Name and Address of Beneficial Owner |
Shares Beneficially Owned |
Percent of Class | ||
Directors and Nominees (other than Named Executive Officers):
|
||||
Mark A. Beck(1)
|
3,050
|
*
| ||
Mark A. Buthman(1)
|
5,320
|
*
| ||
Carl R. Christenson(1)
|
1,675
|
*
| ||
William M. Cook(1)
|
25,878
|
*
| ||
Lakecia N. Gunter(1)
|
220
|
*
| ||
Katrina L. Helmkamp(1)
|
6,055
|
*
| ||
Ernest J. Mrozek(1)
|
13,630
|
*
| ||
David C. Parry(1)
|
18,825
|
*
| ||
Livingston L. Satterthwaite(1)
|
18,347
|
*
| ||
Cynthia J. Warner(1)
|
14,435
|
*
| ||
Named Executive Officers:
|
||||
Eric D. Ashleman(2)
|
91,181
|
*
| ||
Andrew K. Silvernail(2)
|
0
|
*
| ||
William K. Grogan(2)
|
80,275
|
*
| ||
Denise R. Cade(2)
|
38,364
|
*
| ||
Jeffrey D. Bucklew(2)
|
26,749
|
*
| ||
Daniel J. Salliotte(2)
|
25,025
|
*
| ||
Directors, Nominees and All Executive Officers as a Group: (19 persons)(3)
|
413,203
|
0.5%
| ||
Other Beneficial Owners:
|
||||
The Vanguard Group(4)
|
8,429,764
|
11.1%
| ||
BlackRock Inc.(5)
|
5,954,195
|
7.9%
| ||
T. Rowe Price Associates, Inc.(6)
|
5,517,459
|
7.2%
|
28
(1) | Includes 6,605, 3,075, 8,005, 11,405 and 4,610 shares under exercisable options for Messrs. Cook, Mrozek, Parry and Satterthwaite, and Ms. Warner, respectively. Mss. Gunter and 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 settlement; 1,610 restricted stock units issued to Mr. Satterthwaite on February 19, 2016, for which Mr. Satterthwaite elected to defer settlement; 1,290 restricted stock units issued to Mr. Buthman on April 6, 2016, for which Mr. Buthman elected to defer settlement; 310 restricted stock units issued to Mr. Beck on January 2, 2018, for which Mr. Beck elected to defer settlement; 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 (provided that Messrs. Beck, Buthman and Satterthwaite each elected to defer settlement); 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 (provided that Messrs. Beck, Buthman and Satterthwaite each elected to defer settlement); 940 restricted stock units issued to Mr. Cook on May 10, 2019, which vest on May 10, 2022; 725 restricted stock units issued to Mr. Christenson on June 17, 2019, for which Mr. Christenson elected to defer settlement; 950 restricted stock units issued to each of Mss. Helmkamp and Warner and Messrs. Beck, Buthman, Christenson, Mrozek, Parry and Satterthwaite on May 7, 2020, which vest on May 7, 2023 (provided that Messrs. Beck, Buthman, Christenson and Satterthwaite each elected to defer settlement); 1045 restricted stock units issued to Mr. Cook on May 7, 2020, which vest on May 7, 2023; and 220 restricted stock units issued to Ms. Gunter on January 29, 2021, which vest on January 29, 2024. 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 61,944, 69,501, 24,012, 5,172 and 30,632 shares under exercisable options for Messrs. Ashleman, Grogan, Bucklew and Salliotte and Ms. Cade, respectively. Mr. Silvernail forfeited all of his option awards that had not yet vested in connection with his separation from the Company on December 15, 2020. |
(3) | Includes 243,834 shares under options that are exercisable currently or will be exercisable within 60 days of March 15, 2021. |
(4) | Based solely on information in Schedule 13G, as of December 31, 2020, filed by The Vanguard Group (Vanguard) with respect to Common Stock owned by Vanguard and certain subsidiaries. Vanguard has shared power to vote or direct the vote of 121,336 shares of Common Stock, sole power to dispose or to direct the disposition of 8,101,043 shares of Common Stock and shared power to dispose or to direct the disposition of 328,721 shares of Common Stock. |
(5) | Based solely on information in Schedule 13G, as of December 31, 2020, filed by BlackRock, Inc. (BlackRock) with respect to Common Stock owned by BlackRock and certain subsidiaries. BlackRock has sole power to vote or to direct the vote of 5,154,810 shares of Common Stock and sole power to dispose or to direct the disposition of all 5,954,195 shares of Common Stock. |
(6) | Based solely on information in Schedule 13G, as of December 31, 2020, filed by T. Rowe Price Associates, Inc. (Price Associates). Price Associates has sole power to vote or to direct the vote of 2,300,321 shares of Common Stock and sole power to dispose or to direct the disposition of all 5,517,459 shares of Common Stock. |
29
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 2020, who are listed below.
Name |
Title | |
Eric D. Ashleman |
Chief Executive Officer and President(1) | |
Andrew K. Silvernail |
Former Chairman and Chief Executive Officer(1) | |
William K. Grogan |
Senior Vice President and Chief Financial Officer | |
Denise R. Cade |
Senior Vice President General Counsel and Corporate Secretary | |
Jeffrey D. Bucklew |
Senior Vice President and Chief Human Resources Officer(2) | |
Daniel J. Salliotte |
Senior Vice President, Corporate Development |
(1) | Effective December 15, 2020, Mr. Silvernail resigned, and Mr. Ashleman was named Chief Executive Officer. Mr. Ashleman was President and Chief Operating Officer prior to his appointment as Chief Executive Officer. |
(2) | Mr. Bucklew ceased to serve as Senior Vice President and Chief Human Resources Officer on January 31, 2021. |
Principles of Our Compensation Programs
Pay-for-Performance |
The key principle of our compensation philosophy is
| |
Alignment with Stockholders |
We reward performance that meets or exceeds the performance
| |
Variation Based on Performance |
We favor variable pay opportunities that are based on
|
30
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.
| |
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 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.
|
31
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 2020 Annual Meeting of Stockholders, more than 95% of the votes cast on the say-on-pay proposal were in favor of the fiscal year 2019 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. |
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 Dont 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 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. |
32
Performance Highlights and Impact on Incentive Compensation
Despite the difficult conditions presented with the COVID-19 pandemic in 2020, we were able to deliver for our shareholders, customers and employees as the Company performed well throughout with a focus on workplace safety, business continuity, liquidity and playing offense opportunistically. The performance highlights and accomplishments indicated in the chart below are closely related to the performance metrics under our executive compensation programs.
2020 Performance Highligts*"EPS, orders and sales were down, butCompany bounced back with a strong 4th quarter"Cash from operations of $569 million,Up 8% from the prior year, led to recordfree cash flow of $518 million, up 9%,131% of adjusted net incomeContinued to pay quarterly dividendat same level each quarterAcquired flow management devices,LLCHow incentives support Performance Short-Term Goals Adjusted EPS Adjusted cash flow as a Percentage of net income Organic sales growthLong-term goals Relative TSRIncentive plan results2020 bonus payout of 90% Adjusted EPS of $5.04 Adjusted cash flow of 133% of Adjusted net income Organic sales growth of -8.8%2018-2020 PSU payout of 201% Three-year TSR of 53% (70th Percentile relative ranking)
* | A reconciliation from GAAP to non-GAAP financial measures and other related information is included in Item 6 of the Companys Annual Report on Form 10-K for the year ended December 31, 2020. 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 2020 Executive Compensation Program
For 2020, 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 2020 bonus payouts were 90% of target. This payout level includes an adjustment due to the Companys actions in light of the COVID-19 pandemic as described in the Short-Term Incentives section of the 2020 Executive Compensation Program below. |
| Our TSR for the 2018-2020 period was 53%, which resulted in 70th percentile performance compared to the companies in the Russell Midcap Index, and resulted in a 201% payout of performance stock units (PSUs). The maximum possible payout is 250%, which is earned when 80th percentile performance is achieved or exceeded. |
33
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 2020:
Approximately 84% of Mr. Silvernails 2020 total targeted pay was performance-based, and an average of approximately 73% of our other NEOs total targeted pay in 2020 was performance-based. The charts below show the allocation of 2020 targeted pay across base salary, the annual cash incentive award, and the long-term incentive award for Mr. Silvernail and our other NEOs.*
Other NEOs 2020 target compensation mix Cash Compensation 48% Equity Compensation 52% Performance-Based 73% Base Salary 27% Short-Term Incentives 21% Long Term Incentives 52%CEO 2020 Target Compensation Mix Cash Compensation 36% Equity Compensation 64%Performance-Based 84% Base Salary 16% Short-Term Incentives 20% Long-Term Incentives 64%
* | Data reflects Mr. Silvernails target compensation as Chairman and Chief Executive Officer and Mr. Ashlemans target compensation as President and Chief Operating Officer. |
In 2020, our long-term incentives continued to represent the single largest component of our CEOs and other NEOs targeted pay, representing approximately 64% and 52% of total targeted pay, respectively.
Maintaining a balanced perspective is a core part of the Companys business strategy, which requires employees to take calculated risks to capitalize on anticipated changes in the Companys 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 2020 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 Companys 2020 Annual Meeting of Stockholders. The say-on-pay advisory vote received support from over 95% of the shares voted at the 2020 Annual Meeting. The Compensation Committee believes this affirms
34
stockholders support of the Companys 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 2020. The Compensation Committee will continue to
review and consider the outcome of the Companys say-on-pay votes when making future compensation decisions for the NEOs.
2020 Executive Compensation Program
The following discussion describes our 2020 compensation elements and 2020 compensation decisions related to our NEOs.
CEO Transition
Effective December 15, 2020, Mr. Silvernail resigned, and Mr. Ashleman was named Chief Executive Officer. The terms of Mr. Silvernails separation agreement can be found in the Potential Payments upon Termination or Change in Control section below. In conjunction with Mr. Ashlemans appointment as Chief Executive Officer, the IDEX Board of Directors established the terms of his compensation with an annual base salary of $900,000, an annual incentive target of 100% of annual base salary and an annual long-term incentive target of $3,700,000.
2020 Key Compensation Elements
The material elements of 2020 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 executives 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 |
Performance- |
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 |
Performance- |
Provides retention through vesting schedules and aligns each NEOs interests with long-term stockholder interests by linking a substantial portion of each executives 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 |
Performance- |
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 S&P 500 over a cumulative three-year period.
| |||
Retirement/Other |
Fixed/
|
Provides overall wealth accumulation and retention.
|
Various market-based retirement and welfare benefits and perquisites.
|
Base Salary
Base salaries are typically reviewed annually in February and may be adjusted to reflect market data, as well as individual responsibility, experience and performance. The table below highlights the change in 2020 base salary for each NEO, reflecting one or more of the following: annual merit increase, market and/or performance-related adjustments. Base pay is typically paid over 26 bi-weekly
35
pay periods throughout the year. In 2020, the NEOs and other employees on the same bi-weekly pay schedule received a 27th pay period payment due to the payroll calendar, which resulted in higher amounts listed in the Summary Compensation Table than those listed in the following table.
NEO
|
2019
|
2020 ($)
|
Percentage
|
|||||||||
Eric D. Ashleman1 |
|
630,000 |
|
|
675,000 |
|
|
7 |
% | |||
Andrew K. Silvernail |
|
1,030,000 |
|
|
1,060,900 |
|
|
3 |
% | |||
William K. Grogan |
|
515,000 |
|
|
530,500 |
|
|
3 |
% | |||
Denise R. Cade |
|
474,000 |
|
|
488,000 |
|
|
3 |
% | |||
Jeffrey D. Bucklew |
|
412,000 |
|
|
424,500 |
|
|
3 |
% | |||
Daniel J. Salliotte |
|
354,500 |
|
|
365,000 |
|
|
3 |
% |
(1) | Mr. Ashlemans base salary rate was increased to $675,000 in connection with his appointment to serve as the Companys President effective February 21, 2020. His base salary rate was subsequently increased to $900,000 in connection with his appointment to serve as the Companys Chief Executive Officer effective December 15, 2020. |
Short-Term Incentives
36
37
For 2020, the relative weightings and the performance against the quantitative and strategic measures resulted in a calculated Business Performance Factor of 60%, as shown in the table below. In light of the actions that the Company took in anticipation and as a result of the pandemic as described above, the Compensation Committee, in its discretion, decided to adjust the payout of the organic sales growth component, resulting in a final Business Performance Factor of 90% of target for the NEOs, as well as the 190 other leaders and employees linked to the Companys Business Performance Factor. The Committee chose to adjust organic sales growth to target payout as that metric was drastically impacted by events outside the control of the leaders and, despite actions taken, was quickly and significantly below threshold achievement. Further details can be found in the tables below.
MICP Objective | Goal | Actual* | Payout | MICP Weighting |
Business Performance Factor |
|||||||||||||||
Adjusted EPS
|
|
$5.55
|
|
$
|
5.04
|
|
|
41.1%
|
|
|
50%
|
|
|
20.6%
|
| |||||
Adjusted Cash Flow Conversion
|
|
105%
|
|
|
133%
|
|
|
196.9%
|
|
|
20%
|
|
|
39.4%
|
| |||||
Organic Sales Growth
|
|
-2.0%
|
|
|
-8.8%
|
|
|
0.0%
|
|
|
30%
|
|
|
0.0%
|
| |||||
Adjustment to Organic Sales Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30%
|
| |||||
Total
|
|
|
|
|
|
|
|
|
|
|
100%
|
|
|
90%
|
|
* | A reconciliation from GAAP to non-GAAP financial measures and other related information is included in Item 6 of the Companys Annual Report on Form 10-K for the year ended December 31, 2020. 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. |
38
The short-term incentive payments are included in the 2020 Summary Compensation Table under the Non-Equity Incentive Plan Compensation column and summarized in the table below.
NEO
|
Base Salary
|
Individual
|
Business
|
Calculated
|
Discretionary
|
Discretionary
|
Total
|
|||||||||||||||||||||
Eric D. Ashleman (3) |
900,000 | 100 | % | 60 | % | 25,082 | 30 | % | 12,541 | 37,623 | ||||||||||||||||||
Eric D. Ashleman (3) |
675,000 | 90 | % | 60 | % | 347,569 | 30 | % | 173,785 | 521,354 | ||||||||||||||||||
William K. Grogan |
530,500 | 75 | % | 60 | % | 238,725 | 30 | % | 119,363 | 358,088 | ||||||||||||||||||
Denise R. Cade |
488,000 | 70 | % | 60 | % | 204,960 | 30 | % | 102,480 | 307,440 | ||||||||||||||||||
Jeffrey D. Bucklew |
424,500 | 70 | % | 60 | % | 178,290 | 30 | % | 89,145 | 267,435 | ||||||||||||||||||
Daniel J. Salliotte |
365,000 | 65 | % | 60 | % | 142,350 | 30 | % | 71,175 | 215,525 |
(1) | The short-term incentive payments are included in the 2020 Summary Compensation Table under the Non-Equity Incentive Plan Compensation column. |
(2) | The discretionary adjustment amounts are included in the 2020 Summary Compensation Table under the Bonus column. |
(3) | Mr. Ashlemans incentive compensation plan payment was pro-rated for his time as Chief Operating Officer and President until December 14, 2020 and Chief Executive Officer and President beginning on December 15, 2020. Mr. Silvernail left the Company on December 15, 2020 and did not receive an incentive compensation plan payment; however, he received a separation payment equal in value to the incentive compensation plan payment, as indicated in the All Other Compensation column of the Summary Compensation Table below. |
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 2020 short-term incentives were administered, is the plan that has historically governed annual incentives for the broader executive population and the plan under which the Chief Financial Officer 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.
39
40
41
42
43
44
45
46
2020 Summary Compensation Table
The table below and related footnotes summarize the total compensation earned or paid in 2020, 2019 and 2018 for the Companys CEO, CFO, and each of the three most highly compensated executive officers other than the CEO and CFO.
Name and Principal Position | Year | Salary ($) |
Bonus ($) (1) |
Stock Awards ($) (2) |
Option Awards ($) (3) |
Non-Equity Incentive Plan Compensation ($) (4) |
Change in ($) (5) |
All
Other ($) (6) |
Total ($) |
|||||||||||||||||||||||||||
Eric D. Ashleman, Chief Executive Officer and President |
2020 | 698,365 | 186,326 | 1,131,907 | 875,072 | 372,651 | 143,518 | 3,407,839 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Andrew K. Silvernail, Former Chairman and Chief Executive Officer |
2020 | 1,061,930 | 3,540,291 | 2,737,646 | 1,550,994 | 8,890,861 | ||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
William K. Grogan, Senior Vice President and Chief Financial Officer |
2020 | 547,327 | 119,363 | 776,645 | 600,088 | 238,725 | 112,092 | 2,394,240 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary |
2020 | 503,538 | 102,480 | 502,074 | 387,586 | 204,960 | 107,876 | 1,808,514 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Jeffrey D. Bucklew, Senior Vice President and Chief Human Resources Officer |
2020 | 437,942 | 89,145 | 420,263 | 325,105 | 178,290 | 95,956 | 1,546,701 | ||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Daniel J. Salliotte, Senior Vice President, Corporate Development |
2020 | 376,615 | 71,175 | 226,381 | 175,083 | 142,350 | 11,064 | 84,392 | 1,087,060 |
(1) | Reflects discretionary portion of the annual cash bonus under the MICP as described in the Short-Term Incentives section of the 2020 Executive Compensation Program. |
(2) | 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 2020, see note 16 Share-Based Compensation of the financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2020. For PSUs granted in 2020, 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 2020 based on the maximum level of performance is as follows: Mr. Ashleman, $2,829,768; Mr. Silvernail, $8,850,728; Mr. Grogan, $1,941,613; Ms. Cade, $1,255,184; Mr. Bucklew, $1,050,656; and Mr. Salliotte, $565,954. All shares of restricted stock are eligible for dividend equivalent payments when paid on Common Stock and, with respect to PSUs, cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period. |
(3) | Reflects the aggregate grant date fair value for the year indicated in accordance with FASB ASC Topic 718. For a discussion of assumptions made in the valuation of stock options granted in 2020, see note 16 Share-Based Compensation of the financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2020. |
47
(4) | Reflects the annual cash bonus under the MICP. For 2020, Mr. Silvernail did not receive a bonus payment under the MICP, as he received a separation payment in an equivalent value to his annual bonus. That value is reflected in All Other Compensation (see footnote 6). |
(5) | Represents the aggregate increase/decrease in actuarial value under the Pension Plan. Mr. Salliotte was the only NEO who participated in the Pension Plan. See the Narrative to 2020 Summary Compensation Table under the heading Pension Plan for a description of the Pension Plan. Additional information about the Pension Plan is available in the Pension Benefits at 2020 Fiscal Year End table. |
(6) | Consists of the following for 2020: |
Name | Company Contribution to Defined SERP Benefits |
Automotive, Supplemental Disability ($) (a) |
Aircraft ($) (b) | Other Payments ($) (c) |
Total ($) | |||||||||||||||
Eric D. Ashleman |
121,019 | 22,499 | - | - | 143,518 | |||||||||||||||
Andrew K. Silvernail |
226,061 | 28,732 | 102,688 | 1,193,513 | 1,550,994 | |||||||||||||||
William K. Grogan |
89,987 | 22,105 | - | - | 112,092 | |||||||||||||||
Denise R. Cade |
84,832 | 23,044 | - | - | 107,876 | |||||||||||||||
Jeffrey D. Bucklew |
73,979 | 21,977 | - | - | 95,956 | |||||||||||||||
Daniel J. Salliotte |
65,130 | 19,262 | - | - | 84,392 |
(a) | Consists of automotive and fuel allowance and supplemental disability premiums. |
(b) | Represents Mr. Silvernails personal use of the Companys leased aircraft. The Companys methodology for calculating the value of the personal use of the Company leased aircraft is to calculate the incremental costs of such usage to the Company, which includes fuel, landing fees, hangar fees, catering, additional expenses related to the crew and other expenses which would not have otherwise been incurred by the Company if the aircraft had not been used for personal travel. |
(c) | Consists of payment pursuant to Mr. Silvernails separation agreement equivalent to the value of the annual bonus Mr. Silvernail would have received had he remained employed by the Company. Additional information about Mr. Silvernails separation arrangement is available below under the heading Quantification of Termination Payments and Benefits Mr. Silvernail. |
48
49
2020 Grants of Plan-Based Awards
The following table provides information on plan-based awards for all NEOs for 2020.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (2) |
All Other Stock Awards: Number of Shares of Stock (#) |
All
Other |
Exercise or Base Price of Option Awards ($/Sh) (3) |
Grant Date Fair Value of Stock and Option Awards ($) (4) |
|||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||
Eric D. Ashleman |
|
02/21/2020 |
|
0 |
|
621,086 |
|
1,242,172 |
|
1,683 |
|
|
5,050 |
|
|
12,625 |
|
|
- |
|
25,490 |
|
|
173.35 |
|
|
2,006,979 |
| ||||||||||||
Andrew K. Silvernail |
|
02/21/2020 |
|
0 |
|
1,326,125 |
|
2,652,250 |
|
5,265 |
|
|
15,795 |
|
|
39,488 |
|
|
- |
|
79,745 |
|
|
173.35 |
|
|
6,277,937 |
| ||||||||||||
William K. Grogan |
|
02/21/2020 |
|
0 |
|
397,875 |
|
795,750 |
|
1,155 |
|
|
3,465 |
|
|
8,663 |
|
|
- |
|
17,480 |
|
|
173.35 |
|
|
1,376,733 |
| ||||||||||||
Denise R. Cade |
|
02/21/2020 |
|
0 |
|
341,600 |
|
683,200 |
|
747 |
|
|
2,240 |
|
|
5,600 |
|
|
- |
|
11,290 |
|
|
173.35 |
|
|
889,660 |
| ||||||||||||
Jeffrey D. Bucklew |
|
02/21/2020 |
|
0 |
|
297,150 |
|
594,300 |
|
625 |
|
|
1,875 |
|
|
4,688 |
|
|
- |
|
9,470 |
|
|
173.35 |
|
|
745,368 |
| ||||||||||||
Daniel J. Salliotte |
|
02/21/2020 |
|
0 |
|
237,250 |
|
474,500 |
|
337 |
|
|
1,010 |
|
|
2,525 |
|
|
- |
|
5,100 |
|
|
173.35 |
|
|
401,464 |
|
(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 2020 Executive Compensation Program. The amounts actually earned by the NEOs are reflected in the Non-Equity Incentive Plan Compensation column in the 2020 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 2020 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 16 Share-Based Compensation of the financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2020. 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 2020 based on the maximum level of performance is as follows: Mr. Ashleman, $2,829,768; Mr. Silvernail, $8,850,728; Mr. Grogan, $1,941,613; Ms. Cade, $1,255,184; Mr. Bucklew, $1,050,656; and Mr. Salliotte, $565,954. With respect to PSUs, cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period. For stock 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. |
Narrative to 2020 Grants of Plan-Based Awards Table
Stock options awarded to the NEOs in 2020 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 NEOs continued service; |
| all vest upon retirement if retirement eligible (for Mr. Silvernail, as defined in his employment agreement and for NEOs other than Mr. Silvernail, NEO is at least age 50, with a minimum of five years of service, and the NEOs age plus years of service equals 70); and |
| all expire 10 years after the date of grant. |
50
PSUs awarded to the NEOs in 2020 had the following characteristics:
| all have an approximate three-year performance period with vesting based on relative TSR and the NEOs continued service; |
| all shares vest upon retirement if the NEO is retirement eligible (for Mr. Silvernail, as defined in his employment agreement and for NEOs other than Mr. Silvernail, the NEO is retirement eligible when he or she is at least age 50, with a minimum of five years of service, and the NEOs age plus years of service equals 70); but are paid out only based on the Companys actual TSR as compared to the companies in the S&P 500 index determined as of the last day of the performance period; |
| cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period; and |
| shares delivered upon vesting are subject to a one-year holding requirement. |
51
Outstanding Equity Awards at 2020 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, 2020.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options |
Option ($) |
Option Expiration Date |
Number of Shares of Stock that Have Not Vested (#) |
Market Value of Shares of Stock that Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (2) |
Equity Incentive |
||||||||||||||||||||||||||
Name
|
Exercisable (#) (1)
|
Unexercisable (#) (1)
|
||||||||||||||||||||||||||||||
Eric D. Ashleman |
|
5,848 |
|
|
- |
|
|
74.74 |
|
|
02/19/2026 |
|
|
- |
|
|
- |
|
|
29,442 |
|
|
5,864,846 |
| ||||||||
|
19,038 |
|
|
6,347 |
|
|
93.27 |
|
|
02/22/2027 |
|
|||||||||||||||||||||
|
9,355 |
|
|
9,355 |
|
|
138.12 |
|
|
02/22/2028 |
|
|||||||||||||||||||||
|
5,153 |
|
|
15,462 |
|
|
144.85 |
|
|
03/01/2029 |
|
|||||||||||||||||||||
|
- |
|
|
25,490 |
|
|
173.35 |
|
|
02/21/2030 |
|
|||||||||||||||||||||
Andrew K. Silvernail (3) |
||||||||||||||||||||||||||||||||
William K. Grogan |
|
843 |
|
|
- |
|
|
50.45 |
|
|
02/15/2023 |
|
|
- |
|
|
- |
|
|
12,885 |
|
|
2,566,692 |
| ||||||||
|
1,798 |
|
|
- |
|
|
72.73 |
|
|
02/13/2024 |
|
|||||||||||||||||||||
|
1,383 |
|
|
- |
|
|
67.49 |
|
|
10/15/2024 |
|
|||||||||||||||||||||
|
2,575 |
|
|
- |
|
|
78.43 |
|
|
02/20/2025 |
|
|||||||||||||||||||||
|
5,435 |
|
|
- |
|
|
74.74 |
|
|
02/19/2026 |
|
|||||||||||||||||||||
|
15,836 |
|
|
5,279 |
|
|
91.22 |
|
|
01/03/2027 |
|
|||||||||||||||||||||
|
10,548 |
|
|
3,517 |
|
|
93.27 |
|
|
02/22/2027 |
|
|||||||||||||||||||||
|
6,590 |
|
|
6,590 |
|
|
138.12 |
|
|
02/22/2028 |
|
|||||||||||||||||||||
|
4,016 |
|
|
12,049 |
|
|
144.85 |
|
|
03/01/2029 |
|
|||||||||||||||||||||
|
- |
|
|
17,480 |
|
|
173.35 |
|
|
02/21/2030 |
|
|||||||||||||||||||||
Denise R. Cade |
|
2,092 |
|
|
- |
|
|
76.79 |
|
|
10/26/2025 |
|
|
- |
|
|
- |
|
|
9,411 |
|
|
1,874,671 |
| ||||||||
|
3,234 |
|
|
- |
|
|
74.74 |
|
|
02/19/2026 |
|
|||||||||||||||||||||
|
3,601 |
|
|
3,602 |
|
|
93.27 |
|
|
02/22/2027 |
|
|||||||||||||||||||||
|
5,897 |
|
|
5,898 |
|
|
138.12 |
|
|
02/22/2028 |
|
|||||||||||||||||||||
|
3,217 |
|
|
9,653 |
|
|
144.85 |
|
|
03/01/2029 |
|
|||||||||||||||||||||
|
- |
|
|
11,290 |
|
|
173.35 |
|
|
02/21/2030 |
|
|||||||||||||||||||||
Jeffrey D. Bucklew |
|
7,015 |
|
|
3,005 |
|
|
93.27 |
|
|
02/22/2027 |
|
|
- |
|
|
- |
|
|
7,462 |
|
|
1,486,431 |
| ||||||||
|
4,480 |
|
|
4,480 |
|
|
138.12 |
|
|
02/22/2028 |
|
|||||||||||||||||||||
|
2,452 |
|
|
7,358 |
|
|
144.85 |
|
|
03/01/2029 |
|
|||||||||||||||||||||
|
- |
|
|
9,470 |
|
|
173.35 |
|
|
02/21/2030 |
|
|||||||||||||||||||||
Daniel J. Salliotte |
|
- |
|
|
1,684 |
|
|
93.27 |
|
|
02/22/2027 |
|
|
- |
|
|
- |
|
|
3,759 |
|
|
748,792 |
| ||||||||
|
- |
|
|
2,078 |
|
|
138.12 |
|
|
02/22/2028 |
|
|||||||||||||||||||||
|
- |
|
|
3,522 |
|
|
144.85 |
|
|
03/01/2029 |
|
|||||||||||||||||||||
|
- |
|
|
5,110 |
|
|
173.35 |
|
|
02/21/2030 |
|
(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. |
52
(2) | Represents the number and value of outstanding PSU awards based on performance as of December 31, 2020 as set forth in the following table. Actual number of shares delivered upon vesting will be based on performance through December 31, 2021 for the 2019 PSU award and performance through January 31, 2023 for the PSU award granted in 2020. The 2019 PSU awards are disclosed at 180% of the target and the 2020 PSU awards are disclosed at 169% of the target based on performance through December 31, 2020 and at a closing price of $199.20 on December 31, 2020. |
|
Grant Date |
Number of (#) |
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
Vesting | ||||||||||
Eric D. Ashleman |
|
03/01/2019 |
|
|
5,010 |
|
|
1,796,386 |
|
Award vests on 12/31/2021 | ||||
|
03/28/2019 |
|
|
6,605 |
|
|
2,368,289 |
|
Award vests on 12/31/2021 | |||||
|
02/21/2020 |
|
|
5,050 |
|
|
1,700,172 |
|
Award vests on 01/31/2023 | |||||
William K. Grogan |
|
03/01/2019 |
|
|
3,905 |
|
|
1,400,177 |
|
Award vests on 12/31/2021 | ||||
|
02/21/2020 |
|
|
3,465 |
|
|
1,166,515 |
|
Award vests on 01/31/2023 | |||||
Denise R. Cade |
|
03/01/2019 |
|
|
3,125 |
|
|
1,120,500 |
|
Award vests on 12/31/2021 | ||||
|
02/21/2020 |
|
|
2,240 |
|
|
754,171 |
|
Award vests on 01/31/2023 | |||||
Jeffrey D. Bucklew |
|
03/01/2019 |
|
|
2,385 |
|
|
855,166 |
|
Award vests on 12/31/2021 | ||||
|
02/21/2020 |
|
|
1,875 |
|
|
631,265 |
|
Award vests on 01/31/2023 | |||||
Daniel J. Salliotte |
|
03/01/2019 |
|
|
1,140 |
|
|
408,758 |
|
Award vests on 12/31/2021 | ||||
|
02/21/2020 |
|
|
1,010 |
|
|
340,034 |
|
Award vests on 01/31/2023 |
(3) | Mr. Silvernail forfeited all of his equity-based awards that had not yet vested in connection with his separation from the Company on December 15, 2020. |
2020 Option Exercises and Stock Vested
The following table provides information on stock option exercises and stock vesting for all NEOs in 2020.
Option Awards
|
Stock Awards
|
|||||||||||||||
Name
|
Number of Shares
|
Value Realized
|
Number of Shares
|
Value Realized
|
||||||||||||
Eric D. Ashleman |
|
10,000 |
|
|
781,987 |
|
|
10,342 |
|
|
2,060,126 |
| ||||
Andrew K. Silvernail |
|
258,296 |
|
|
19,252,547 |
|
|
- |
|
|
- |
| ||||
William K. Grogan |
|
- |
|
|
- |
|
|
12,772 |
|
|
2,402,121 |
| ||||
Denise R. Cade |
|
- |
|
|
- |
|
|
6,513 |
|
|
1,297,390 |
| ||||
Jeffrey D. Bucklew |
|
15,240 |
|
|
1,531,816 |
|
|
4,955 |
|
|
987,036 |
| ||||
Daniel J. Salliotte |
|
7,652 |
|
|
521,748 |
|
|
2,302 |
|
|
458,558 |
|
(1) | Calculated based on the difference between the closing price of Common Stock on the date of exercise and the exercise price. |
53
(2) | Calculated based on the closing price of Common Stock on the vesting date or the previous trading day. For 2018 PSUs vesting on December 31, 2020 after the end of the three-year performance period with a vesting price of $199.20 and a multiplier of 201% due to IDEXs 3-year relative TSR performance at the 70th percentile as compared to companies in the Russell Midcap Index, Mr. Ashleman had 10,341 shares vest, Mr. Silvernails 2018 PSUs did not vest as he separated with the Company prior to the vesting date, Mr. Grogan had 7,286 shares vest, Ms. Cade had 6,512 shares vest, Mr. Bucklew had 4,955 shares vest and Mr. Salliotte had 2,301 share vest. Mr. Grogan also had 5,485 restricted shares vest on January 3, 2020 at a vesting price of $173.30. |
Pension Benefits at 2020 Fiscal Year End
The following table provides information related to the pension benefits payable to each NEO determined as described in the footnotes below.
Plan Name | Number of Years Credited Service (#) (1) |
Present Value of Accumulated Benefit ($) (2) |
||||||||
Eric D. Ashleman |
Pension Plan |
|
N/A |
|
|
N/A |
| |||
Andrew K. Silvernail |
Pension Plan |
|
N/A |
|
|
N/A |
| |||
William K. Grogan |
Pension Plan |
|
N/A |
|
|
N/A |
| |||
Denise R. Cade |
Pension Plan |
|
N/A |
|
|
N/A |
| |||
Jeffrey D. Bucklew |
Pension Plan |
|
N/A |
|
|
N/A |
| |||
Daniel J. Salliotte |
Pension Plan |
|
1.17 |
|
|
61,986 |
|
(1) | Credited service is determined under the Pension Plan as of December 31, 2020. Mr. Salliotte has been employed by the Company since 2004 but the Pension Plan was frozen as of December 31, 2005. |
(2) | The present value of accumulated benefits as of December 31, 2020 is determined using an assumed retirement age of 65 and an assumed 100% lump-sum payment. For valuing lump sums, interest and mortality assumptions are required by the Pension Protection Act of 2009 (PPA) for funding valuations. The interest and mortality assumptions are the PPA-required three-segment interest rates (for December 31, 2020, interest rates of 0.53% for payments in the first five years, 2.31% for payments in the next 15 years, and 3.09% for payments in year 20 and beyond), and combined mortality as required under PPA. The discount rate used for determining present value was 2.15%. |
54
Nonqualified Deferred Compensation at 2020 Fiscal Year End
The Supplemental Executive Retirement and Deferred Compensation Plan (SERP) is an unfunded, nonqualified plan designed to provide supplemental executive retirement benefits. The following table provides information related to the benefits payable to each NEO under the defined contribution portion of the SERP, which is the Companys only defined contribution nonqualified deferred compensation plan:
Name |
Executive
|
Registrant
|
Aggregate
|
Aggregate
|
Aggregate
|
|||||||||||||||
Eric D. Ashleman |
|
- |
|
|
96,794 |
|
|
198,733 |
|
|
4,109 |
|
|
1,147,072 |
| |||||
Andrew K. Silvernail |
|
- |
|
|
201,836 |
|
|
916,887 |
|
|
9,202 |
|
|
3,751,053 |
| |||||
William K. Grogan |
|
- |
|
|
67,187 |
|
|
105,201 |
|
|
2,850 |
|
|
449,619 |
| |||||
Denise R. Cade |
|
- |
|
|
60,607 |
|
|
140,764 |
|
|
2,538 |
|
|
511,147 |
| |||||
Jeffrey D. Bucklew |
|
- |
|
|
49,754 |
|
|
9,555 |
|
|
2,059 |
|
|
440,573 |
| |||||
Daniel J. Salliotte |
|
- |
|
|
39,480 |
|
|
162,667 |
|
|
1,580 |
|
|
789,783 |
|
(1) | None of the NEOs contributed to the SERP in 2020. |
(2) | Amounts are reflected in All Other Compensation column of the Summary Compensation Table. |
(3) | None of the amounts reported in this column are reported in the Summary Compensation Table because the Company does not pay guaranteed, above-market or preferential earnings on deferred compensation under the SERP. |
(4) | The following amounts have been previously reported as All Other Compensation in the Summary Compensation Table for prior years: Mr. Ashleman, $498,140; Mr. Silvernail, $1,700,421; Mr. Grogan, $209,733; Ms. Cade, $261,040; and Mr. Bucklew, $186,255. |
55
56
57
Change in Control and Termination Payments and Benefits for Eric D. Ashleman
Incremental Benefits Due to Termination Event |
Involuntary Not for Cause Termination ($) |
Disability, Death or Retirement ($) |
Change in Control ($) |
Involuntary Not for Cause Termination or Voluntary Good Reason
|
||||||||||||
Cash Severance (incl. Incentives) |
|
1,800,000 |
|
|
- |
|
|
- |
|
|
3,600,000 |
| ||||
Unvested Options |
|
- |
|
|
2,743,017 |
|
|
- |
|
|
2,743,017 |
| ||||
Unvested Performance Shares (1) |
|
- |
|
|
6,050,488 |
|
|
- |
|
|
5,959,813 |
| ||||
SERP |
|
1,147,072 |
|
|
1,147,072 |
|
|
1,147,072 |
|
|
1,147,072 |
| ||||
Total |
|
2,947,072 |
|
|
9,943,907 |
|
|
1,147,072 |
|
|
13,449,902 |
|
Change in Control and Termination Payments and Benefits for William K. Grogan
Incremental Benefits Due to Termination Event |
Involuntary Not for Cause Termination ($) |
Disability, Death or Retirement ($) |
Change in Control ($) |
Involuntary Not for Cause Termination or Voluntary Good Reason
|
||||||||||||
Cash Severance (incl. Incentives) |
|
928,375 |
|
|
- |
|
|
- |
|
|
1,856,750 |
| ||||
Unvested Options |
|
- |
|
|
2,451,821 |
|
|
- |
|
|
2,451,821 |
| ||||
Unvested Performance Shares (1) |
|
- |
|
|
2,647,024 |
|
|
- |
|
|
2,603,100 |
| ||||
SERP |
|
449,619 |
|
|
449,619 |
|
|
449,619 |
|
|
449,619 |
| ||||
Total |
|
1,377,994 |
|
|
5,550,750 |
|
|
449,619 |
|
|
7,361,290 |
|
58
Change in Control and Termination Payments and Benefits for Denise R. Cade
Incremental Benefits Due to Termination Event |
Involuntary Not for Cause Termination ($) |
Disability, Death or Retirement ($) |
Change in Control ($) |
Involuntary Not for Cause Termination or Voluntary Good Reason
|
||||||||||||
Cash Severance (incl. Incentives) |
|
829,600 |
|
|
- |
|
|
- |
|
|
1,659,200 |
| ||||
Unvested Options |
|
- |
|
|
1,558,297 |
|
|
- |
|
|
1,558,297 |
| ||||
Unvested Performance Shares (1) |
|
- |
|
|
1,933,556 |
|
|
- |
|
|
1,902,456 |
| ||||
SERP |
|
511,147 |
|
|
511,147 |
|
|
511,147 |
|
|
511,147 |
| ||||
Total |
|
1,340,747 |
|
|
4,004,476 |
|
|
511,147 |
|
|
5,631,100 |
|
Change in Control and Termination Payments and Benefits for Jeffrey D. Bucklew
Incremental Benefits Due to Termination Event |
Involuntary Not for Cause Termination ($) |
Disability, Death or Retirement ($) |
Change in Control ($) |
Involuntary Not for Cause Termination or Voluntary Good Reason
|
||||||||||||
Cash Severance (incl. Incentives) |
|
721,650 |
|
|
- |
|
|
- |
|
|
1,443,300 |
| ||||
Unvested Options |
|
- |
|
|
1,236,665 |
|
|
- |
|
|
1,236,665 |
| ||||
Unvested Performance Shares (1) |
|
- |
|
|
1,533,049 |
|
|
- |
|
|
1,508,056 |
| ||||
SERP |
|
440,573 |
|
|
440,573 |
|
|
440,573 |
|
|
440,573 |
| ||||
Total |
|
1,162,223 |
|
|
3,211,523 |
|
|
440,573 |
|
|
4,628,594 |
|
Change in Control and Termination Payments and Benefits for Daniel J. Salliotte
Incremental Benefits Due to Termination Event |
Involuntary Not for Cause Termination ($) |
Disability, Death or Retirement ($) |
Change in Control ($) |
Involuntary Not for Cause Termination or Voluntary Good Reason
|
||||||||||||
Cash Severance (incl. Incentives) |
|
602,250 |
|
|
- |
|
|
- |
|
|
1,204,500 |
| ||||
Unvested Options |
|
- |
|
|
628,566 |
|
|
- |
|
|
628,566 |
| ||||
Unvested Performance Shares (1) |
|
- |
|
|
772,228 |
|
|
- |
|
|
759,417 |
| ||||
SERP |
|
789,783 |
|
|
789,783 |
|
|
789,783 |
|
|
789,783 |
| ||||
Total |
|
1,392,033 |
|
|
2,191,243 |
|
|
789,783 |
|
|
3,382,266 |
|
(1) | In the event of a termination for disability or death, PSU grants and cumulative dividend equivalents will become fully vested at the end of the applicable performance period. For purposes of the termination payment calculation, PSU grants have been valued based on performance as of December 31, 2020. |
59
CEO and Median Employee Pay Ratio
We believe our executive compensation program must be consistent and internally equitable to motivate our employees to perform in ways that enhance stockholder value. We are committed to providing market-competitive compensation and to internal pay equity. The following CEO to median employee pay ratio is provided pursuant to Item 402(u) of SEC Regulation S-K.
Methodology for Identifying the Median Employee
The Compensation Committee reviewed a comparison of our CEOs annual total compensation in 2020 to that of the median employee for the same period. The Company used total annual cash compensation (salary/hourly earnings, commissions, bonuses paid, and allowances/fixed payments) as of December 31, 2020 to determine the median employee. Under the Item 402(u)(4)(ii) (de minimis) exemption, the Company may exclude non-U.S. employees up to a 5% threshold when identifying the median employee. In determining such median employee, the Company excluded 163 employees from the following jurisdictions, comprising less than 5% of the 6,954 total Company population (with number of employees):
Australia (23) | Colombia (1) | Korea (3) | South Africa (2) | |||
Austria (49) | Czech Republic (1) | Mexico (6) | United Arab Emirates (10) | |||
Belgium (16) | France (7) | Poland (1) | ||||
Brazil (8)
|
Ireland (23)
|
Singapore (13)
|
The 6,791 employees who were included in identifying the median employee are located in the following countries:
Canada | India | Sweden | United Kingdom | |||
China | Italy | Switzerland | United States of America | |||
Germany
|
Japan
|
The Netherlands
|
Pay Ratio
The median employee selected as the basis for calculating the initial CEO pay ratio disclosure and that of the following two years had compensation that increased over those three years from $58,292 to $63,175 to $66,703. However, pursuant to the SECs pay ratio disclosure rules, a new median employee was required to be selected and the new median employees compensation is lower than the median compensation used in last years disclosure. For 2020, the new median employees annual total compensation was calculated consistent with the same methodology that we use for our NEOs, as set forth in the 2020 Summary Compensation Table. The median of the annual total compensation of all employees, except the CEO on December 31, 2020, is $60,425. Mr. Silvernail served as CEO from January 1, 2020 to December 15, 2020, and Mr. Ashleman was appointed CEO effective December 15, 2020. To calculate the CEO full year annual total compensation, we combined $8,890,861, which is Mr. Silvernails annual total compensation from the Summary Compensation Table, and $35,256, which is Mr. Ashlemans Salary and All Other Compensation earned as CEO. Mr. Ashleman did not earn any other compensation as CEO in 2020 that would be included in the Summary Compensation Table. Combining these figures, the annual total compensation of the CEO is $8,926,117. We believe that this methodology to calculate our CEO annual total compensation provides the most consistent approach with prior and future years. Additionally, this approach includes the total compensation of our CEO who served for most of 2020. The pay ratio is 148:1.
60
Our Board of Directors recommends that you vote FOR the approval of the Companys executive compensation
|
PROPOSAL 2 ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are soliciting a non-binding advisory vote (say-on-pay) on the compensation of the Companys NEOs, as described in the Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative disclosure set forth in this Proxy Statement, as required under Section 14A of the Securities Exchange Act of 1934, as amended.
The Company maintains a balanced approach to executive compensation with a mix of both cash and non-cash awards and short- and long-term incentives, with total direct compensation targeted within a range that includes market median for comparable positions at comparable companies. Where an individual executives target compensation is positioned within the competitive range is based on the individual factors listed in the Compensation Discussion and Analysis. Actual compensation in any given year should and does vary from target based on Company and individual performance. In this way, the Company motivates and rewards both vital short-term performance and long-term value creation. The Board of Directors strongly endorses the Companys executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the Companys named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and accompanying narrative discussion contained in this Proxy Statement.
Because the vote is advisory, it will not be binding on the Company. However, the Compensation Committee will consider the outcome of the vote in determining future compensation policies and decisions. Currently, stockholders are given an opportunity to cast an advisory vote on this topic annually, with the next opportunity occurring in connection with the Companys 2022 Annual Meeting of Stockholders.
61
For the year ended December 31, 2020, the Audit Committee has reviewed and discussed the audited financial statements with management and the Companys independent registered public accounting firm, Deloitte & Touche LLP. The Audit Committee discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC, and reviewed the results of the independent registered public accounting firms examination of the financial statements.
The Audit Committee also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche LLPs communications with the Audit Committee concerning independence, discussed with the auditors their independence, and satisfied itself as to the auditors independence.
Based on the above reviews and discussions, the Audit Committee recommends to the Board of Directors that the financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC.
Notwithstanding anything to the contrary set forth in any of the Companys previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings made by the Company under those statutes, in whole or in part, this report shall not be deemed to be incorporated by reference into any such filings, nor will this report be incorporated by reference into any future filings made by the Company under those statutes.
Mark A. Buthman, Chair
Mark A. Beck
William M. Cook
Ernest J. Mrozek
62
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed to the Company for each of the last two fiscal years for professional services rendered by the Companys principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the Deloitte Entities), are set forth in the table below. All such fees were pre-approved by the Audit Committee in accordance with the pre-approval policy discussed below.
2020 | 2019 | |||||||||
Audit fees(1) (2) |
|
$ 3,804,204 |
$ |
3,448,291 |
||||||
Audit-related fees(3) |
|
- |
|
- |
||||||
Tax fees(4) |
|
$ 1,419,800 |
$ |
1,722,719 |
||||||
All other fees(5) |
|
- |
|
- |
||||||
Total |
|
$ 5,224,004 |
$ |
5,171,010 |
(1) | Audit fees represent the aggregate fees billed for the audit of the Companys financial statements, review of the financial statements included in the Companys quarterly reports, and services in connection with statutory and regulatory filings or engagements. |
(2) | Audit fees include $55,885 of additional fees related to the 2019 audit of the Companys financial statements that were billed after the Companys 2019 Proxy Statement was filed on March 20, 2020. |
(3) | Audit-related fees represent the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Companys financial statements and are not reported under audit fees. |
(4) | Tax fees represent the aggregate fees billed for professional services for tax compliance, tax advice and tax planning. |
(5) | All other fees represent the aggregate fees billed for products and services that are not included in the audit fees, audit-related fees, and tax fees. The Audit Committee has determined that the provision of these services is not incompatible with maintaining the Deloitte Entities independence. |
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy that requires the pre-approval of audit and non-audit services rendered by the Deloitte Entities. For audit services, the accounting firm provides the Audit Committee with an audit services plan during the second quarter of each fiscal year outlining the scope of the audit services proposed to be performed for the fiscal year and the associated fees. This audit services plan must be formally accepted by the Audit Committee.
For non-audit services, management submits to the Audit Committee for approval during the second quarter of each fiscal year and from time-to-time during the fiscal year a list of non-audit services that it recommends the Audit Committee engage the accounting firm to provide for the current year, along with the associated fees. Company management and the accounting firm each confirm to the Audit Committee that any non-audit service on the list is permissible under all applicable legal requirements.
The Audit Committee approves both the list of permissible non-audit services and the budget for such services. The Audit Committee delegates to its Chair the authority to amend or modify the list of approved permissible non-audit services and fees. The Chair reports any such actions taken to the Audit Committee at a subsequent Audit Committee meeting.
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Our Board of Directors and Audit Committee recommend that you vote FOR the ratification of the appointment of Deloitte & Touche LLP
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PROPOSAL 3 APPROVAL OF AUDITORS
The Audit Committee has appointed Deloitte & Touche LLP as the Companys independent registered public accounting firm for 2021. Representatives of Deloitte & Touche LLP will attend the Annual Meeting and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.
Although the rules of the U.S. Securities and Exchange Commission and the corporate governance listing standards of the New York Stock Exchange require that the Audit Committee be directly responsible for selecting and retaining the independent registered public accounting firm, we are providing stockholders with the opportunity to express their views on this issue. While this vote is not
binding, if the stockholders do not ratify the appointment of Deloitte & Touche LLP, the Audit Committee will take the vote into account in making future appointments.
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STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
FOR THE 2022 ANNUAL MEETING OF STOCKHOLDERS
A stockholder desiring to submit a proposal for inclusion in the Companys proxy statement for the 2022 Annual Meeting of Stockholders under Exchange Act Rule 14a-8 must deliver the proposal so that it is received by the Company at its principal executive offices no later than November 23, 2021 and otherwise comply with SEC rules. The Company requests that all such proposals be addressed to Corporate Secretary, IDEX Corporation, 3100 Sanders Road, Suite 301, Northbrook, IL 60062, and mailed by certified mail, return receipt requested.
In 2021, we also amended our Bylaws to provide that, under certain circumstances, a stockholder or group of stockholders may include director candidates that they have nominated in the proxy materials for our annual meetings. Stockholders who intend to submit director nominees for inclusion in the Companys proxy statement for the 2022 Annual Meeting of Stockholders must comply with the requirements of proxy access set forth in the Companys Bylaws. The stockholder or group of stockholders who wish to submit director nominees pursuant to proxy access must deliver the required materials to the Company so that it is received by the Company no earlier than 150 or later than 120 days before the first anniversary of the date the definitive proxy statement was first made available to stockholders in connection with the preceding years annual meeting of stockholders. To be timely for the 2022 Annual Meeting of Stockholders, any such notice must be received by the Corporate Secretary, at the address above, on any date beginning on October 24, 2021 and ending on November 23, 2021.
In addition, any stockholder desiring to nominate a director for election or propose other business for consideration at the 2022 Annual Meeting of Stockholders (other than under Exchange Act Rule 14a-8) must provide written notice in accordance with the Companys Bylaws. Such notice must contain the information required by the Bylaws and must be received by the Corporate Secretary no earlier than 120 or later than 90 days before the first anniversary of the preceding years annual meeting of stockholders. To be timely for the 2022 Annual Meeting of Stockholders, any such notice must be received by the Corporate Secretary, at the address above, on any date beginning on January 12, 2022 and ending on February 11, 2022.
The Board of Directors does not know of any business to be brought before the Annual Meeting other than the matters described in the Notice of Annual Meeting. However, if any other matters are properly presented for action, it is the intention of each person named in the accompanying proxy to vote said proxy in accordance with his or her judgment on those matters.
By Order of the Board of Directors,
DENISE R. CADE
Senior Vice President, General Counsel
and Corporate Secretary
March 23, 2021
Northbrook, Illinois
A copy of the Companys Annual Report on Form 10-K for the year ended December 31, 2020, including the financial statement schedules, as filed with the Securities and Exchange Commission, may be obtained by stockholders without charge by sending a written request to Chief Financial Officer, IDEX Corporation, 3100 Sanders Road, Suite 301, Northbrook, IL 60062.
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IDEX CORPORATION 3100 SANDERS RD, SUITE 301 NORTHBROOK, IL 60062 |
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/IEX2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
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VOTE BY PHONE - 1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL | ||
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||||
D38025-P48612 KEEP THIS PORTION FOR YOUR RECORDS | ||||
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH DIRECTOR NOMINEE AND FOR PROPOSALS 2 AND 3. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THE PERSONS NAMED IN THIS PROXY WILL VOTE IN THEIR DISCRETION.
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1. | To elect three directors each for a term of three years
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Nominees: |
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1a. WILLIAM M. COOK |
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1b. MARK A. BUTHMAN |
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1c. LAKECIA N. GUNTER |
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2. | Advisory vote to approve named executive officer compensation. |
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3. | Ratification of the appointment of Deloitte & Touche LLP as our independent registered accounting firm for 2021. | ☐ |
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Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signed as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
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Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
IDEX CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 2021
The Annual Meeting of Stockholders of IDEX Corporation (the Company) will be held virtually at www.virtualshareholdermeeting.com/IEX2021, on Wednesday, May 12, 2021, at 9:00 a.m., Central Time, for the purposes listed on the reverse side.
The Board of Directors fixed the close of business on March 15, 2021, as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting.
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of Stockholders, you can be sure these shares are represented at the meeting by promptly returning your proxy in the enclosed envelope.
Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting The Notice of the Annual Meeting, Proxy Statement and Annual Report on Form 10-K of IDEX Corporation are available at: http://phx.corporate-ir.net/phoenix.zhtml?c=83305&p=irol-reportsAnnual
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Proxy card must be signed and dated on the reverse side.
Please fold and detach card at perforation before mailing.
D38026-P48612
IDEX CORPORATION 3100 SANDERS ROAD, SUITE 301 NORTHBROOK, ILLINOIS 60062
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Katrina L. Helmkamp, Eric D. Ashleman and Denise R. Cade, and each of them, as Proxies, with full power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side, all the shares of common stock of IDEX Corporation held of record by the undersigned on March 15, 2021, at the Annual Meeting of Stockholders to be held virtually at www.virtualshareholdermeeting.com/IEX2021, on May 12, 2021, at 9:00 a.m. Central Time, or at any adjournment or postponement thereof.
Continued and to be signed on reverse side
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