GRIFFON CORP
For the period ended Mar 11, 2025. Filed Jan 27, 2025.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Mar 11, 2025 · Filed Jan 27, 2025
Contents
Proxy Statement Summary
This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting.
AGENDA AND VOTING RECOMMENDATIONS
| Proposal | Board Vote Recommendation | Page Reference |
|---|---|---|
| 1. Election of eleven directors for a term of one year | FOR | 16 |
| 2. Approval of an Amendment to our Certificate of Incorporation to reduce the size of the Board to a range of nine to eleven directors | FOR | 34 |
| 3. Approval of an Amendment to our Certificate of Incorporation to provide for the exculpation of certain officers from breaches of fiduciary duty to the extent permitted by Delaware law | FOR | 36 |
| 4. Advisory vote on executive compensation | FOR | 91 |
| 5. Ratification of the selection by our Audit Committee of Grant Thornton LLP to serve as our independent registered public accounting firm for fiscal year 2025 | FOR | 93 |
The following table provides summary information about each nominee for election at the Annual Meeting. Each nominee is currently a director on our Board. For more detailed information about our directors, see “Proposal 1–Election of Directors” on page 16.
| Name · Age · Director Since · Principal Occupation · Independent · Committee Memberships | ||||
|---|---|---|---|---|
| Henry A. Alpert | 77 | 1995 | President, Spartan Petroleum Corp. | Nominating and Corporate Governance (NCG), Finance |
| Jerome L. Coben | 80 | 2020 | Retired Partner, Skadden, Arps, Slate, Meagher and Flom LLP | Compensation, Finance |
| H. C. Charles Diao | 67 | 2022 | Senior Vice President, Finance and Corporate Treasurer, Bally’s Corporation | Finance |
| Louis J. Grabowsky | 73 | 2015 | Founder and principal of Juniper Capital Management | Audit |
| Lacy M. Johnson | 72 | 2019 | Partner, Public Affairs Strategies Group, Taft Stettinius & Hollister LLP | Compensation, NCG |
| Ronald J. Kramer | 66 | 1993 | Chief Executive Officer and Chairman of the Board, Griffon Corporation | |
| James W. Sight | 69 | 2019 | Private Investor | Audit |
| Samanta Hegedus Stewart | 49 | 2018 | Former Investor Relations Executive | Compensation, NCG |
| Kevin F. Sullivan | 71 | 2013 | Retired Executive | Audit, Finance |
| Michelle L. Taylor | 56 | 2022 | Vice President, Supply Chain, NiSource Inc. | Audit |
| Cheryl L. Turnbull | 64 | 2018 | Senior Director of the Keenan Center for Entrepreneurship at The Ohio State University | Compensation |
GOVERNANCE HIGHLIGHTS
We recognize that strong corporate governance contributes to long-term shareholder value. We strive to ensure that our corporate governance reflects best practices tailored, as necessary, to our culture, goals and strategy. Our corporate governance practices include the items below:
Recent Changes
In 2022, we committed that, by 2025, 40% of our independent directors would be women or persons of color. We met this goal in 2024. • In 2022 we began the transition to declassify our Board. Our Board was fully declassified by 2024. • In this proxy statement we are asking shareholders to approve an amendment to our charter to reduce the size of our Board from a range of twelve to fourteen directors to a range of nine to eleven directors.
| Independence | Best Practices | Accountability |
|---|---|---|
| • Every member of the Board except our CEO is independent • Strong independent Lead Director with clearly delineated duties • All standing Board Committees composed entirely of independent directors • Independent directors hold regular executive sessions at the Board and Committee levels | • Annual shareholder outreach program • Proactive Board that is responsive to shareholder feedback • Diverse Board in terms of gender, ethnicity, and specific skills and qualifications • Regular Board refreshment (5 of 11 directors being nominated for re-election have joined the Board since 2019) • Strategy and risk oversight by full Board and Committees • Periodic changes to membership of standing Board Committees • Long-standing commitment to sustainability and corporate social responsibility • Robust stock ownership guidelines for executive officers and nonemployee directors | • Annual Board and Committee self-evaluations, including individual Board member evaluation • A substantial portion of compensation paid to our NEOs is performance-based • Clawback policy that applies to our short and long-term incentive plans |
2024 PERFORMANCE SNAPSHOT
Our 2024 operating results continue to reflect the impact of the strategic actions taken to strengthen Griffon and position ourselves for additional growth and increased profitability, while providing the flexibility to return substantial capital to shareholders.
Our business model is delivering results
We generated record adjusted EBITDA and adjusted earnings per share (EPS), and substantial free cash flow, in fiscal 2024. Our fiscal 2024 free cash flow of $326 million allowed us to return a record $310 million to shareholders through a combination of dividends and share repurchases without increasing our net debt to EBITDA leverage ratio,(1) which was 2.6x at the end of both fiscal 2024 and fiscal 2023. Our strong balance sheet, coupled with our solid free cash flow and proven ability to access the capital markets, provides flexibility to return capital to shareholders, reduce debt and/or pursue strategic acquisitions.
| (1) | See Appendix A for the calculation of our net debt to EBITDA leverage ratio as of September 30, 2024 and September 30, 2023, which is calculated based on the applicable covenant in Griffon’s credit agreement. |
| (2) | On a continuing operations basis; excludes the results of the Telephonics business which was classified as discontinued operations in our Annual Report on Form 10-K filed on November 17, 2021. |
| (3) | For a reconciliation of Income (loss) before taxes from continuing operations to adjusted EBITDA (defined as segment adjusted EBITDA less unallocated amounts, excluding depreciation) for each of 2024, 2023, 2022 and 2021, see Appendix A to this Proxy Statement. Income (loss) before taxes from continuing operations was $296.7 million for 2024, $112.7 million for 2023, ($270.9) million for 2022, and $110.0 million for 2021. |
| (4) | For a reconciliation of Earnings (loss) per share from continuing operations to adjusted Earnings per share from continuing operations for each of 2024, 2023, 2022 and 2021, see Appendix A to this Proxy Statement. Earnings (loss) per share from continuing operations was $4.23 for 2024, $1.42 for 2023, $(5.57) for 2022, and $1.32 for 2021. |
| (5) | For a reconciliation of net cash provided by operating activities from continuing operations to free cash flow for each of 2024, 2023, 2022 and 2021, see Appendix A to this Proxy Statement. Net cash from operating activities was $380.0 million for 2024, $431.8 million for 2023, $59.2 million for 2022, and $69.8 million for 2021. |
EXECUTIVE COMPENSATION HIGHLIGHTS
We strive to provide incentives to senior management to achieve both short-term and long-term objectives and to reward exceptional performance. We believe our compensation practices and our overall level of executive compensation reflect our commitment to performance-based pay.
We provide highlights of our compensation program below. Please review our Compensation Discussion and Analysis and compensation-related tables beginning on page 38 of this Proxy Statement for a complete understanding of our compensation program.
Compensation program highlights
Based on shareholder feedback, - our CFO and General Counsel now receive restricted stock grants with the same performance metrics and goals as the CEO and COO - beginning in fiscal 2022, we included free cash flow as a component of our long-term cash incentive program for our NEOs - beginning in fiscal 2022, we included return on invested capital as a performance measure for equity grants to our CEO and COO • For fiscal 2023 and fiscal 2024, we used three different performance metrics as the basis for our short-term cash program, with weightings of 75% assigned to EBITDA, 15% assigned to working capital and 10% assigned to ESG
PERFORMANCE-BASED COMPENSATION STRUCTURE
Note: equity awards are based upon grant date value
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