Our Overall Process. Our Compensation Committee is comprised entirely of independent directors that meet as often as necessary to perform their duties. In fiscal 2024, our Compensation Committee met nine (9) times. Our Compensation Committee typically meets with our Chief Executive Officer and with our Chief Administrative Officer and Chief Human Resources Officer. The Compensation Committee holds executive sessions without any members of management present as needed.
Our Compensation Committee annually engages a compensation consultant to review the competitiveness and effectiveness of our executive compensation program and annually reviews summaries of our named executive officers’ compensation relative to peers and survey data. Our Compensation Committee also annually reviews company performance relative to peers.
Our Chief Executive Officer’s compensation is determined by our Compensation Committee. Management does not make recommendations to our Compensation Committee regarding our Chief Executive Officer’s compensation. For named executive officers other than our Chief Executive Officer, compensation packages are developed and recommended by our Chief Executive Officer, in consultation with our Chief Administrative Officer and Chief Human Resources Officer, based on guidelines provided by our Compensation Committee, although our Chief Administrative Officer and Chief Human Resources Officer does not have input or make recommendations as to her own compensation package. Our Compensation Committee determines whether to approve these recommendations, subject to any modifications that it may deem appropriate.
Role of Compensation Consultant. Since 2013, Frederic W. Cook & Co., Inc. (“FW Cook”) has provided independent executive compensation consulting services to the Compensation Committee. FW Cook is retained by and reports to the Compensation Committee. During fiscal 2024, FW Cook provided the following services:
| • | assisted the Compensation Committee in evaluating the linkage between pay and performance; |
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| • | assisted the Compensation Committee in developing a compensation peer group; |
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| • | provided and reviewed market data and advised the Compensation Committee on setting executive compensation and the competitiveness and reasonableness of the Company’s executive compensation program, including the former CEO and CFO transition agreements; |
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| • | reviewed and advised the Compensation Committee regarding the elements of the Company’s executive compensation program, each as relative to the Company’s peers and survey data; |
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| • | provided information regarding realizable pay in light of our multi-year LTI Programs; |
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| • | evaluated the Company’s compensation programs and practices in relation to potential compensation risk areas to confirm that the risks inherent in the executive compensation program are not reasonably likely to have a material adverse effect on the Company; and |
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| • | advised the Compensation Committee regarding regulatory, governance, disclosure and other technical matters. |
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The Compensation Committee reviewed information provided by FW Cook addressing the independence of FW Cook and the representatives serving the Committee. Based on this information, the Compensation Committee concluded that the work performed by FW Cook and its representatives involved in the engagement did not raise any conflict of interest and that FW Cook and such representatives are independent from the Company’s management.
Risk Assessment. The Compensation Committee, together with the Chief Executive Officer and its independent compensation consultant, annually considers potential risks when reviewing our compensation programs for all employees, including our executive officers. Based on this assessment, the Compensation Committee concluded that our fiscal 2024 compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company. In making this determination, the Compensation Committee reviewed the key features of our compensation programs and policies, including the following:
| • | The Compensation Committee is independent and utilizes an independent compensation consultant. |
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| • | Compensation for our executive officers represents a balanced mix of short-term, long-term and at-risk compensation. |
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| • | Our short-term incentive programs are designed to avoid an over emphasis on a single performance metric. |
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| • | The maximum amount payable under the annual performance-based bonuses is capped at 200% of target. |
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| • | A significant component of our LTI Programs is comprised of equity awards in order to directly align the interests of our executive officers with those of our stockholders. |
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| • | Our stock ownership policy requires significant stock ownership by our executive officers and directors. |
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| • | Our Incentive Compensation Recovery Policy requires us to recover incentive-based compensation in the event we restate our financial statements due to material noncompliance with any financial reporting requirements under U.S. securities laws. |
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| • | Executive officers and directors are prohibited from pledging and hedging our common stock. |
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| • | The Company does not provide excise tax gross-ups. |
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