ATI INC
For the period ended May 16, 2024. Filed Mar 28, 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.
May 16, 2024 · Filed Mar 28, 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, and Item 402(v) of Regulation
S-K,
we provide the following disclosure regarding executive compensation and Company performance for the years listed below. For further information concerning ATI’s variable
pay-for-performance
philosophy and how ATI aligns executive compensation with its performance, see “Executive Compensation — Compensation Discussion and Analysis.” Our Compensation and Leadership Development Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
| Year · Summary Compensation Table total for CEO ($)(1) · Compensation actually paid to CEO ($)(2) · Average Summary Compensation Table total for non-CEO NEOs ($)(3) · Average Compensation actually paid to non-CEO NEOs ($)(4) · Value of initial fixed $100 investment based on: · Net Income ($) · ATI Adjusted EBITDA ($)(7) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Total share- holder return ($) · Peer group total share-holder return ($)(5) | ||||||||
| 2023 | 7,670,554 | 35,206,270 | 2,902,853 | 12,593,071 | 220.09 | 174.04 | 410,800,000 | 634,600,000 |
| 2022 | 11,007,608 | 32,090,373 | 4,410,737 | 11,733,557 | 144.53 | 132.42 | 323,500,000 | 612,800,000 |
| 2021 | 7,590,345 | 6,677,580 | 2,792,700 | 2,480,715 | 77,11 | 149.62 | 184,600,000 | 366,500,000 |
| 2020 | 5,710,651 | 1,229,666 | 2,107,531 | 692,423 | 81.17 | 116.49 | (1,559,600,000) | 196,300,000 |
| (1) | Reflects total compensation for our CEO, Robert S. Wetherbee, who is our “Principal Executive Officer,” as determined in accordance with Item 402(c) of Regulation S-K and (“Item 402(c)”) and reflected on the Company’s 2023 Summary Compensation Table as shown on page 65 of this Proxy Statement (the “Summary Compensation Table”) for 2023, 2022, 2021 and 2020 as indicated. |
| (2) | For a reconciliation of Compensation Actually Paid to Total Compensation as reflected on the Summary Compensation Table for Mr Wetherbee, see the immediately following table under the headings “Compensation Actually Paid to CEO.” |
| (3) | Reflects the average total compensation for our non-CEO NEOs as determined in accordance with Item 402(c) and reflected in the Summary Compensation Table for 2023, 2022, 2021 and 2020 as indicated. Compensation paid to the following executive officers is included in the average amounts shown for each such year: |
2023: Kimberly A. Fields, Donald P. Newman, Elliot S. Davis and Timothy J. Harris
2022: Ms. Fields, Messrs. Newman and Davis and Kevin B. Kramer, who ceased to serve as an executive officer of the Company in 2022 and retired in January 2024.
2021: Ms. Fields and Messrs. Newman, Kramer and Davis
2020: Ms. Fields and Messrs. Newman and Kramer, as well as John D. Sims, former Executive Vice President for the Company’s HPMC business who retired in mid-2021 and Patrick J. DeCourcy, former Senior Vice President, Finance and Chief Financial Officer, who retired in January 2020.
| (4) | For a reconciliation of average Compensation Actually Paid to average Total Compensation as reflected on the Summary Compensation Table for our non-CEO NEOs, see the table below under the heading “Compensation Actually Paid to Non-CEO NEOs.” |
| (5) | The peer group used for the purposes of this table is the S&P MidCap 400 Industrials Index. |
| (6) | The Company Selected Measure for purposes of this table is ATI Adjusted EBITDA. |
“Compensation Actually Paid,” as determined under applicable SEC rules, reflects adjusted values for unvested and vested equity awards during the years shown in the table based on
year-end
stock prices, various accounting valuation assumptions, and other adjustments. As a result, Compensation Actually Paid fluctuates, potentially significantly, based on changes in our stock price and other assumed values and does not reflect the actual value realized by our CEO or any of our NEOs in connection with the vesting of those awards. The following table sets forth the adjustments made during each year represented in the Pay Versus Performance Table to arrive at compensation “actually paid” to our CEO during each of the years in question:
Compensation Actually Paid to CEO
| Year · Amounts Reflected inSummary Compensation Table ($) · YE Fair Value of Equity Compensation granted in Current Year ($)(4) · Change in CY Fair Value of Unvested Prior Year Equity Awards ($)(5) · Change in CY Fair Value of Equity Awards Vesting in CY ($)(5) · Compensation ActuallyPaid ($) | |||||||
|---|---|---|---|---|---|---|---|
| Total Compensation(1) · Pension Value(2) · Equity Value(3) | |||||||
| 2023 | 7,670,554 | (17,259) | (4,774,796) | 8,913,063 | 13,040,130 | 10,374,578 | 35,206,270 |
| 2022 | 11,007,608 | — | (7,555,702) | 18,204,232 | 8,330,568 | 2,103,668 | 32,090,373 |
| 2021 | 7,590,345 | — | (4,428,259) | 3,040,422 | (43,181) | 518,253 | 6,677,580 |
| 2020 | 5,710,651 | (45,679) | (4,128,163) | 1,035,179 | (1,234,013) | (108,309) | 1,229,666 |
| (1) | As determined in accordance with Item 402(c) and reflected on the Summary Compensation Table. |
| (2) | Amount shown for 2020 reflects the actuarial change in the present value of Mr. Wetherbee’s benefits under all defined benefit pension plans established by the Company, determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. Effective December 31, 2014, the Company froze future benefit accruals in the ATI Pension Plan for all participating employees other than those in contractual employment arrangements. Also effective December 31, 2014, the Company froze the defined benefit-type non-qualified deferred compensation plans in which salaried employees participate, including the defined benefit portion of the ATI Benefit Restoration Plan in which Mr. Wetherbee participates. In 2020, the discount rate used was 2.6% and had the effect of increasing the pension benefit to Mr. Wetherbee. |
| (3) | Aggregate grant date fair value, determined in accordance with FASB ASC Topic 718, of awards made to Mr. Wetherbee under the Company’s LTIP in 2023, 2022, 2021 and 2020 as indicated. Grant date fair values for RSUs granted in each such year are based on the average of the high and low trading prices for a share of ATI stock on the applicable grant date. Grant date fair values for PSUs granted in each such year, including BPUs, were estimated using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over three-year time horizons matching the applicable PSU performance measurement periods. |
| Pay Versus Performance | ATI 2024 Proxy Statement | 79 |
|---|
| (4) | Aggregate year-end 2023, 2022, 2021 and 2020 (as applicable) fair value of the awards described in footnote (3) above. Year-end fair values for RSUs granted in each such year are based on the average of the high and low trading prices for a share of ATI stock on the last trading day of the applicable year. Year-end fair values for PSUs granted in each such year, including BPUs, were estimated using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over three-year time horizons matching the applicable PSU performance measurement periods. |
| (5) | Changes in fair value determined by comparing fair values determined in the manner described above with comparable prior year values. |
The following table sets forth the adjustments made during each year represented in the Pay Versus Performance Table to arrive at compensation “actually paid” to our
non-CEO
NEOs during each of the years in question:
Compensation Actually Paid to
Non-CEO
NEOs
| Year · Amounts Reflected inSummary Compensation Table ($) · YE Fair Value of Equity Compensation granted in Current Year ($)(4) · Change in CY Fair Value of Unvested Prior Year Equity Awards ($)(5) · Change in CY Fair Value of Equity Awards Vesting in CY ($)(5) · Prior Year-End Fair Value of Equity Awards Forfeited in CY ($)(6) · Compensation Actually Paid ($) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Total Compensation(1) · Pension Value(2) · Equity Value(3) | ||||||||
| 2023 | 2,902,853 | — | (1,549,120) | 2,776,371 | 5,712,179 | 2,750,786 | — | 12,593,071 |
| 2022 | 4,410,737 | — | (2,766,323) | 6,781,978 | 2,710,245 | 596,920 | — | 11,733,557 |
| 2021 | 2,792,700 | — | (1,392,976) | 1,003,087 | (12,807) | 90,710 | — | 2,480,715 |
| 2020 | 2,107,531 | (161,741) | (1,108,151) | 393,196 | (387,167) | (86,442) | (64,803) | 692,423 |
| (1) | As determined in accordance with Item 402(c) and reflected on the Summary Compensation Table |
| (2) | Amount shown for 2020 reflects the actuarial change in the present value of benefits for Mr. Sims, who retired in 2021, under all defined benefit pension plans established by the Company, determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. Effective December 31, 2014, the Company froze future benefit accruals in the ATI Pension Plan for all participating employees other than those in contractual employment arrangements. Also effective December 31, 2014, the Company froze the defined benefit-type non-qualified deferred compensation plans in which salaried employees participate, including the defined benefit portion of the ATI Benefit Restoration Plan in which Mr. Sims participated. In 2020, the discount rate used was 2.6% and had the effect of increasing the pension benefit to Mr. Sims. |
| (3) | Average grant date fair value, determined in accordance with FASB ASC Topic 718, of awards made to NEOs under the Company’s LTIP in 2022, 2021 and 2020 as indicated. Grant date fair values for RSUs granted in each such year are based on the average of the high and low trading prices for a share of ATI stock on the applicable grant date. Grant date fair values for PSUs granted in each such year, including BPUs, were estimated using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over three-year time horizons matching the applicable PSU performance measurement periods. |
| (4) | Average year-end 2023, 2022, 2021 and 2020 (as applicable) fair value of the awards described in footnote (3) above. Year-end fair values for RSUs granted in each such year are based on the average of the high and low trading prices for a share of ATI stock on the last trading day of the applicable year. Year-end fair values for PSUs granted in each such year, including BPUs, were estimated using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over three-year time horizons matching the applicable PSU performance measurement periods. |
| (5) | Changes in fair value determined by comparing fair values determined in the manner described above with comparable prior year values. |
| (6) | Includes amounts forfeited by Mr. DeCourcy in connection with his retirement. |
Relationship Between Pay and Performance
The following graphs show the relationship between “Compensation Actually Paid” to our CEO and other named executive officers in 2020, 2021, 2022 and 2023 to:
| ◆ | Our Company Selected Performance Measure: ATI’s Adjusted EBITDA; and |
| ◆ | Net Income: ATI’s net income (loss) for the periods shown; and |
| ◆ | Relative TSR: ATI’s TSR and that of the S&P MidCap 400 Industrials Index. |
| 80 | ATI 2024 Proxy Statement | Pay Versus Performance |
2023 Performance Measures
For 2023, the performance measures listed below were identified as the most important to ATI’s compensation-setting process for named executive officers. The importance of EBITDA and cash flow is reflected in our use of these measures when setting performance standards applicable to annual short-term incentive program, while the importance of both relative and absolute TSR are reflected in the performance criteria established for our longer-term, performance vested equity awards.
| Performance Measures: | Other Factors We Consider: |
|---|---|
| Net Income Adjusted EBITDA Operating Cash Flow Free Cash Flow Relative Total Shareholder Return Absolute Total Shareholder Return | As discussed in greater detail in the “Compensation Discussion and Analysis” portion of this Proxy Statement, in addition to the performance measures listed here, our Compensation and Leadership Development Committee considers a range of factors in determining compensation, including among others: compensation levels among our benchmarking peer group; shareholder feedback; the advice of our independent compensation consultants and other advisors; our effectiveness in attracting and retaining the talent necessary to pursue our strategic goals; and the Committee’s overall evaluation of the individual performance of our CEO and each NEO, both in general and relative to their individual strategic goals for the year. |
Reconciliations of Adjusted EBITDA to Net Income (Loss) Attributable to ATI (the most directly comparable GAAP measure) are provided (a) for 2023 on page 37 of our Annual Report on Form
10-K
for the year ended December 31, 2023, which we filed with the SEC on February 23, 2024, (b) for 2022 and 2021, on page 32 of our Annual Report on Form
10-K
for the year ended December 31, 2022, which we filed with the SEC on February 24, 2023 and (b) for 2020, on page 37 of our Annual Report on Form
10-K
for the year ended December 31, 2020, which we filed with the SEC on February 26, 2021.
| Item 3: Ratification of the Selection of Independent Auditors Audit Committee Pre-Approval Policy | ATI 2024 Proxy Statement | 81 |
|---|
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.