SunCoke Energy Inc
For the period ended May 16, 2024. Filed Mar 27, 2024.
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May 16, 2024 · Filed Mar 27, 2024
Contents
Pay versus Performance Table
| Value of Initial Fixed $100Investment Based on: | ||||||||
|---|---|---|---|---|---|---|---|---|
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) |
| Year | SummaryCompensationTable Total forPEO (1)($) | CompensationActually Paidto PEO (2)($) | AverageSummaryCompensationTable Total forNon-PEONEOs (3)($) | AverageCompensationActually Paid toNon-PEONEOs (4)($) | TotalShareholderReturn($) | Peer GroupTotalShareholderReturn (5)($) | NetIncome (6)($mm) | AdjustedEBITDA (7)($mm) |
| 2023 | 7,036,958 | 9,716,485 | 1,718,603 | 1,999,733 | 205 | 301 | 57.5 | 268.8 |
| 2022 | 7,479,976 | 10,983,862 | 1,255,461 | 1,490,330 | 158 | 222 | 100.7 | 297.7 |
| 2021 | 5,410,975 | 8,598,532 | 1,092,805 | 1,010,626 | 116 | 190 | 43.4 | 275.4 |
| 2020 | 4,013,702 | 2,664,824 | 1,135,178 | 879,759 | 74 | 110 | 3.7 | 205.9 |
| (1) | For each of the years shown in the foregoing table, the Principal Executive Officer (“PEO”) is Michael G. Rippey. The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Rippey for each corresponding year in the “Total” column of the Summary Compensation Table (“SCT”). |
| (2) | The dollar amounts reported in column (c) represent the amount of “compensation actually paid” (“CAP”) to the PEO computed in accordance with Item 402(v) of Regulation S-K. As required, these dollar amounts include (among other items) unpaid amounts of equity compensation that may be realizable in future periods, and as such, these dollar amounts do not reflect the actual amount of compensation earned by, or paid to, the PEO during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the PEO’s total compensation to determine the CAP: |
| Year | Reported SummaryCompensation TableTotal for PEO($) | Minus:Reported SummaryCompensation Table Valueof Equity Awards (i)($) | Plus:Equity AwardAdjustments (ii)($) | CompensationActually Paidto PEO($) |
|---|---|---|---|---|
| 2023 | 7,036,958 | 2,681,498 | 5,361,026 | 9,716,485 |
| 2022 | 7,479,976 | 2,502,391 | 6,006,277 | 10,983,862 |
| 2021 | 5,410,975 | 2,758,176 | 5,945,733 | 8,598,532 |
| 2020 | 4,013,702 | 2,203,220 | 854,342 | 2,664,824 |
| (i) | The amounts included in this column are the amounts reported in “Stock Awards” column of the SCT for each applicable year. |
2024 PROXY STATEMENT 45
| Proposal One | The Board &Committees | CorporateGovernance | DirectorCompensation | Executive Compensation | ProposalTwo | ProposalThree | BeneficialStockOwnership | AuditCommitteeMatters | ProposalFour | Q&A | OtherInformation |
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| (ii) | The equity award adjustments for 2023 were calculated in accordance with the methodology required by Item 402(v) of Regulation S-K, to include the fair value of current and prior year equity awards that are outstanding, vested or forfeited during the applicable year, instead of the grant date value of awards granted during the applicable year and include accrued dividend equivalents. Since the Company does not provide a defined benefit pension plan to its executives, there is no adjustment required for this element. The amounts deducted or added in calculating the equity award adjustments for the PEO are provided in the table below. |
| Year · Year-EndFair Value ofCurrentYear AwardsOutstandingas ofYear End($) · Change inValue as ofYear-Endfor PriorYear AwardsOutstandingas ofYear-End($) · Change inValue as ofVesting Datefor PriorYear Awardsthat VestedDuringthe Year($) · Value as ofVesting Datefor CurrentYear Awardsthat VestedDuringthe Year*($) · Value as ofVestingDate forDividendEquivalentsthat VestedDuringthe Year($) · Value as ofPriorYear-Endfor PriorYear AwardsForfeitedDuringthe Year($) · Value ofEquity forPurpose ofReporting“CompensationActually Paid”($) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 3,177,698 | + | 1,459,244 | + | 348,046 | + | 0 | + | 376,038 | - | 0 | = | 5,361,026 |
| * | We generally do not issue equity awards that vest in the year of grant. |
| (3) | The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding the PEO) in the “Total” column of the SCT in each applicable year. Our non-PEO NEOs included in the table above are the following individuals: |
| • | for 2023 and 2022: Katherine T. Gates, Mark W. Marinko, P. Michael Hardesty, and John F. Quanci; |
| • | for 2021: Katherine T. Gates, Fay West, Allison S. Lausas, P. Michael Hardesty, and John F. Quanci; and |
| • | for 2020: Katherine T. Gates, Fay West, P. Michael Hardesty, and John F. Quanci |
| (4) | The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the Non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by, or paid to, the Non-PEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the Non-PEO NEOs as a group to determine the compensation actually paid: |
| Year | Average ReportedSummary CompensationTable Total forNon-PEO NEOs($) | Minus:Average ReportedSummary CompensationTable Value of EquityAwards forNon-PEO NEOs (i)($) | Plus:Average EquityAwardAdjustments(ii)($) | AverageCompensationActually Paid toNon-PEO NEOs($) |
|---|---|---|---|---|
| 2023 | 1,718,603 | 410,351 | 691,481 | 1,999,733 |
| 2022 | 1,255,461 | 240,336 | 475,205 | 1,490,330 |
| 2021 | 1,092,805 | 385,980 | 303,801 | 1,010,626 |
| 2020 | 1,135,178 | 280,532 | 25,113 | 879,759 |
| (i) | Represents the average total of the amounts reported in the “Stock Awards” column of the Summary Compensation Table for the Non-PEO NEOs for the applicable year. |
| Proposal One | The Board &Committees | CorporateGovernance | DirectorCompensation | Executive Compensation | ProposalTwo | ProposalThree | BeneficialStockOwnership | AuditCommitteeMatters | ProposalFour | Q&A | OtherInformation |
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| (ii) | The equity award adjustments for 2023 were calculated using the same methodology described above in footnote (2) with respect to reconciliation of Summary Compensation Table total amounts to total “Compensation Actually Paid” for the PEO. Since the Company does not provide a defined benefit pension plan to its executives, there is no adjustment required for this element. The amounts deducted or added in calculating the equity award adjustments for the PEO are provided in the table below. |
| Year · AverageYear-EndFair Value ofCurrentYear AwardsOutstandingas ofYear End($) · AverageChange inValue as ofYear-Endfor PriorYear AwardsOutstandingas ofYear-End($) · AverageChange inValue as ofVesting Datefor PriorYear Awardsthat VestedDuringthe Year($) · AverageValue as ofVesting Datefor CurrentYear Awardsthat VestedDuringthe Year*($) · AverageValue as ofVestingDate forDividendEquivalentsthat VestedDuringthe Year($) · AverageValue as ofPriorYear-End forPriorYear AwardsForfeitedDuringthe Year($) · AverageValue ofEquity forPurpose ofReporting“CompensationActually Paid”($) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 485,414 | + | 136,350 | + | 31,182 | + | 0 | + | 38,534 | - | 0 | = | 691,481 |
| (iii) | * We generally do not issue equity awards that vest in the year of grant. |
| (5) | The cumulative TSR depicts a hypothetical $100 investment in SunCoke Energy common stock on December 31, 2019, and shows the value of that investment over time (assuming the reinvestment of dividends) for each calendar year. A hypothetical $100 investment in the peer group using the same methodology is shown for comparison. As permitted by SEC rules, for 2020, 2021, and 2022, the Company utilized the NASDAQ U.S. Benchmark Iron & Steel Index, which is the industry peer group we used for purposes of Item 201(e) of Regulation S-K. The dollar values shown in column (g) of the table thus reflect the NASDAQ U.S. Benchmark Iron & Steel Index TSR. The fourteen companies currently included in this index are: Cleveland-Cliffs Inc, Commercial Metals Co, Carpenter Technology Corp, Haynes International Inc, Nucor Corp, Northwest Pipe Co, Reliance Steel & Aluminum Co, Ryerson Holding Corp, Schnitzer Steel Industries Inc, Steel Dynamics Inc, Timkensteel Corp, Worthington Industries Inc, United States Steel Corp and Olympic Steel Inc. The separate peer group used by the Compensation Committee for purposes of determining compensation paid to our executive officers is described on page 27 of this proxy statement. |
| (6) | Presented in millions. Net income is as listed in the Company’s financial statements in accordance with U.S. GAAP. |
| (7) | In accordance with SEC rules, the Company is required to include in the Pay versus Performance table the “most important” financial performance measure (as determined by the Company) used to link compensation actually paid to our executive officers to company performance for the most recently completed fiscal year. The Company has determined that Adjusted EBITDA, which is a metric included in our long-term and short-term incentive programs. Management believes that Adjusted EBITDA best reflects the ongoing performance of the Company during the periods presented and provides relevant and meaningful insight to investors regarding the Company’s operating results. We therefore have included this performance measure in the Pay versus Performance table. Adjusted EBITDA is a non-GAAP measure used to supplement the Company’s U.S. GAAP disclosures and should not be viewed as alternatives to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent with similar measures provided or used by other companies. |
Most Important Performance Measures Linking Compensation Actually Paid During 2022 to Company Performance
As required, we disclose below the most important measures used by the Company to link compensation actually paid to our NEOs to Company performance for the 2022 fiscal year. For further information regarding these performance metrics and their function in our executive compensation program, please see “Compensation Discussion and Analysis” beginning on page 21.
Most Important Performance Measures (Unranked)
Adjusted EBITDA
Operating Cash Flow
Pre-tax Return on Invested Capital (ROIC)
Safety Performance
Environmental Performance
2024 PROXY STATEMENT 47
| Proposal One | The Board &Committees | CorporateGovernance | DirectorCompensation | Executive Compensation | ProposalTwo | ProposalThree | BeneficialStockOwnership | AuditCommitteeMatters | ProposalFour | Q&A | OtherInformation |
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Set forth below are charts showing the relationship between “Compensation Actually Paid” and the financial performance metrics set forth in the Pay versus Performance table above, as well as the relationship of the Company’s Total Shareholder Return (“TSR”) compared to our Peer Groups’ TSR. As noted above, “Compensation Actually Paid” for purposes of the tabular disclosure and the following charts was calculated in accordance with SEC rules and does not fully represent the actual final amount of compensation earned by, or actually paid to, our NEOs during the applicable years.
GRAPHICAL REPRESENTATION: COMPANY-SELECTED METRIC (Adjusted EBITDA) versus CAP
As noted above, we believe long-term, performance-based equity incentive awards create alignment with stockholders’ interests. As shown in the chart below, the Company’s Adjusted EBITDA has steadily increased each year and demonstrates generation of earnings from core operations:
| Proposal One | The Board &Committees | CorporateGovernance | DirectorCompensation | Executive Compensation | ProposalTwo | ProposalThree | BeneficialStockOwnership | AuditCommitteeMatters | ProposalFour | Q&A | OtherInformation |
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GRAPHICAL REPRESENTATION: NET INCOME versus CAP
Set forth below in accordance with Item 402(v) of Regulation
S-K
is a graphical representation of Net Income compared to CAP. As shown in the chart below, the Company’s net income increased significantly from 2020 to 2021 and also increased from 2021 to 2022. This measure is somewhat aligned with the calculated CAP for both the PEO and the
Non-PEO
NEOs, although the correlation related to Net Income impact is overshadowed by the impact of changes in the Company’s stock price on CAP primarily due to the Company’s use of equity incentives that are tied directly to stock price, as described above. Notably, the Company does not use Net Income to determine compensation levels or long-term incentive plan payouts.
2024 PROXY STATEMENT 49
| Proposal One | The Board &Committees | CorporateGovernance | DirectorCompensation | Executive Compensation | ProposalTwo | ProposalThree | BeneficialStockOwnership | AuditCommitteeMatters | ProposalFour | Q&A | OtherInformation |
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GRAPHICAL REPRESENTATION: TSR versus CAP
As shown in the chart below, the calculated CAP for both the PEO and the
Non-PEO
NEOs is correlated with the Company’s TSR for each of the years set forth in the table above. This is due primarily to the Company’s use of equity awards in the long-term incentive compensation granted pursuant to the Omnibus Plan, which results in the alignment of the value of our executives’ outstanding and unvested awards with shareholders ’interests. As described in detail in the Compensation Discussion and Analysis beginning on page 21, awards issued under our long-term incentive compensation program are directly linked to stock price and represent a substantial portion of our NEOs’ compensation which serves to align our executives’ interests with our shareholders’ interests. The impact of equity incentive compensation is greater for the PEO’s CAP calculation because the portion of his compensation that is delivered in the form of equity incentives is greater than that for the
Non-PEO
NEOs. Set forth below in accordance with Item 402(v) of Regulation
S-K
is a graphical representation of cumulative total shareholder return compared to CAP:
| Proposal One | The Board &Committees | CorporateGovernance | DirectorCompensation | ExecutiveCompensation | Proposal Two | ProposalThree | BeneficialStockOwnership | AuditCommitteeMatters | ProposalFour | Q&A | OtherInformation |
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.