Orthofix Medical Inc
For the period ended Apr 29, 2024. Filed Apr 29, 2024.
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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.
Apr 29, 2024 · Filed Apr 29, 2024
Contents
Pay Versus Performance
In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Company is required to disclose in its proxy statement information that shows the relationship between “Compensation Actually Paid” as defined in Item 402(v) of Regulation S-K and the financial performance of the Company. The following table provides compensation, both as reported in the Summary Compensation Table and with certain adjustments to reflect the “Compensation Actually Paid”, as computed in accordance with SEC rules, for our principal executive officer (“PEO”), who we have identified as Jon C. Serbousek, who served in the role of President and Chief Executive Officer for each of the years presented below through January 5, 2023 (PEO 1), Keith C. Valentine (PEO 2), our CEO from January 5, 2023 through September 11, 2023, Catherine Burzik (PEO 3), our Interim CEO beginning on September 11, 2023, and our other named executive officers for each of the years presented below other than the PEO (such other named executive officers, the “Non-PEO NEOs”). In accordance with SEC rules, the table also provides information on our cumulative TSR, the cumulative TSR of a peer group, Net Income, and a Company-Selected Measure, Company-wide net sales.
“Compensation Actually Paid” does not necessarily reflect the target value of compensation as approved by our Compensation and Talent Development Committee or the value of compensation actually earned, realized, or received by the Company’s NEOs. The Compensation and Talent Development Committee did not consider the “Compensation Actually Paid” in making its pay decisions for any of the years shown.
| Year · Summary Compensation Table Total for PEO 1¹($) · Summary Compensation Table Total for PEO 2¹($) · Summary Compensation Table Total for PEO 3¹($) · Compensation Actually Paid to PEO 1¹˒²˒³($) · Compensation Actually Paid to PEO 2¹˒²˒³($) · Compensation Actually Paid to PEO 3¹˒²˒³($) · Average Summary Compensation Table Total for Non-PEO NEOs1($) · Average Compensation Actually Paid to Non-PEO NEOs1,2,3($) · Value of Initial Fixed $100 Investment based on: 4 · Net Income($ Millions) · Company-Wide Net Sales⁵ ($ Millions) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TSR ($) · Peer Group TSR($) | ||||||||||||
| (a) | (b) | (b) | (b) | (c) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | (i) |
| 2023 | 15,628,123 | 6,484,267 | 2,615,890 | 2,339,023 | -1,199,925 | 2,578,673 | 2,275,647 | 521,034 | 29.19 | 130.16 | -151.4 | 746.64 |
| 2022 | 6,316,051 | — | — | 5,003,168 | — | — | 2,133,026 | 1,363,185 | 44.46 | 120.91 | -19.75 | 460.71 |
| 2021 | 5,340,865 | — | — | 723,446 | — | — | 1,791,220 | 673,740 | 67.32 | 169.55 | -38.38 | 464.48 |
| 2020 | 5,337,861 | — | — | 6,764,143 | — | — | 1,502,685 | 1,451,284 | 93.07 | 145.89 | 2.52 | 406.56 |
(1) Jon C. Serbousek (PEO 1) was our CEO for each year presented until January 5, 2023. Keith C. Valentine (PEO 2) was our CEO from January 5, 2023 through September 11, 2023. Catherine Burzik (PEO 3) became our Interim CEO beginning on September 11, 2023. The individuals comprising the Non-PEO NEOs for each year presented are listed below.
| 2020 | 2021 | 2022 | 2023 |
| Douglas C. Rice | Douglas C. Rice | Douglas C. Rice | Geoffrey C. Gillespie |
| Kimberley A. Elting | Kimberley A. Elting | Kimberley A. Elting | Kimberley A. Elting |
| Kevin J. Kenny | Kevin J. Kenny | Kevin J. Kenny | Kevin J. Kenny |
| Paul W. Gonsalves | Paul W. Gonsalves | Paul W. Gonsalves | John Bostjancic |
| Davide Bianchi | Douglas C. Rice | ||
| Puja Leekha | |||
| Patrick L. Keran | |||
(2) The amounts shown for “Compensation Actually Paid” have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote (3) below.
(3) “Compensation Actually Paid” reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table.
| Year | Summary Compensation Table Total for PEO 1 | Exclusion of Stock Awards and Option Awards for PEO 1 | Inclusion of Equity Values for PEO 1 | Compensation Actually Paid to PEO 1 |
|---|---|---|---|---|
| ($) · ($) · ($) · ($) | ||||
| 2023 | 15,628,123 | (11,442,550) | (1,846,550) | 2,339,023 |
| Year | Summary Compensation Table Total for PEO 2 | Exclusion of Stock Awards and Option Awards for PEO 2 | Inclusion of Equity Values for PEO 2 | Compensation Actually Paid to PEO 2 |
|---|---|---|---|---|
| ($) · ($) · ($) · ($) | ||||
| 2023 | 6,484,267 | (5,873,274) | (1,810,918) | (1,199,925) |
| Year | Summary Compensation Table Total for PEO 3 | Exclusion of Stock Awards and Option Awards for PEO 3 | Inclusion of Equity Values for PEO 3 | Compensation Actually Paid to PEO 3 |
|---|---|---|---|---|
| ($) · ($) · ($) · ($) | ||||
| 2023 | 2,615,890 | (1,870,633) | 1,833,416 | 2,578,673 |
| Year | Average Summary Compensation Table Total for Non-PEO NEOs | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs | Average Inclusion of Equity Values for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs |
|---|---|---|---|---|
| ($) · ($) · ($) · ($) | ||||
| 2023 | 2,275,647 | (1,740,265) | (14,348) | 521,034 |
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO 1 | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO 1 | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO 1 | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO 1 | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO 1 | Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for PEO 1 | Total - Inclusion of Equity Values for PEO 1 |
|---|---|---|---|---|---|---|---|
| ($) · ($) · ($) · ($) · ($) · ($) · ($) | |||||||
| 2023 | — | — | — | (1,846,550) | — | — | (1,846,550) |
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO 2 | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO 2 | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO 2 | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO 2 | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO 2 | Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for PEO 2 | Total - Inclusion of Equity Values for PEO 2 |
|---|---|---|---|---|---|---|---|
| ($) · ($) · ($) · ($) · ($) · ($) · ($) | |||||||
| 2023 | — | — | — | (16,017) | (1,794,901) | — | (1,810,918) |
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO 3 | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO 3 | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO 3 | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO 3 | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO 3 | Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for PEO 3 | Total - Inclusion of Equity Values for PEO 3 |
|---|---|---|---|---|---|---|---|
| ($) · ($) · ($) · ($) · ($) · ($) · ($) | |||||||
| 2023 | 1,868,584 | (25,068) | — | (10,100) | — | — | 1,833,416 |
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs | Average Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for Non-PEO NEOs | Total - Average Inclusion of Equity Values for Non-PEO NEOs |
|---|---|---|---|---|---|---|---|
| ($) · ($) · ($) · ($) · ($) · ($) · ($) | |||||||
| 2023 | 443,524 | (269,062) | — | (57,138) | (131,672) | — | (14,348) |
(4) The Peer Group TSR set forth in this table utilizes the NASDAQ Stocks Surgical, Medical and Dental Instruments Index (“Peer Group”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the years ended December 31, 2023. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the Peer Group, respectively. All dollar values assume reinvestment of dividends paid by companies, where applicable, included in the Peer Group. Historical stock performance is not necessarily indicative of future stock performance.
(5) We determined Company-Wide Net Sales to be the most important financial performance measure used to link Company performance to “Compensation Actually Paid” to our NEOs in 2023. This performance measure may not have been the most important financial performance measure for prior years and we may determine a different financial performance measure to be the most important financial performance measure in future years.
Financial Performance Measures
The following table lists on an unranked basis the financial performance measures that, in the Company’s
assessment represent the most important performance measures used to link “Compensation Actually Paid”
for our NEOs to Company performance for 2023:
| Most Important Financial Metrics to Link Compensation to Performance: | |
|---|---|
| CEO and CFO | Other NEOs |
| Company-Wide Net Sales | Company-Wide Net Sales |
| Adjusted EBITDA | Adjusted EBITDA |
| Relative TSR | Relative TSR |
| Reporting Segment Net Sales | |
As discussed previously, the Committee’s compensation philosophy is to fairly and appropriately compensate executive officers with an emphasis on providing incentives that balance our short-term and long-term objectives. The achievement of short-term financial performance goals is rewarded through annual cash incentive payouts, while grants of performance stock units and time-based vesting restricted stock units encourage executive officers to focus on achieving longer-term goals and sustained increases in shareholder value. For additional information regarding our pay for performance philosophy, please see the Compensation Discussion & Analysis beginning on page 27.
Relationship between “Compensation Actually Paid” and Performance
The following graph shows the relationship of the average of the“Compensation Actually Paid” to our PEOs and the average of the “Compensation Actually Paid” to our Non-PEO NEOs to our net income.
The following graph shows the relationship of the average of the “Compensation Actually Paid” to our PEO and the average of “Compensation Actually Paid” to our Non-PEO NEOs to the TSR performance of our common stock and the TSR performance of the Peer Group. The TSR performance amounts in the graph assume that $100 was invested beginning on December 31, 2019 and that all distributions or dividends were reinvested, where applicable.
The following graph shows the relationship of“Compensation Actually Paid” to our PEO and the average of “Compensation Actually Paid” to our Non-PEO NEOs to Company-Wide Net Sales.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.