Our fiscal 2024 executive compensation program consists of the following elements:
| • | annual short-term incentive awards linked to our overall performance; |
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| • | annual grants of long-term, equity-based compensation, such as performance and restricted shares; |
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| • | other executive benefits and perquisites; and |
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| • | employment agreements and change in control policy. |
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We combine these elements to formulate compensation packages that provide competitive pay and reward the achievement of financial, operational, and strategic objectives that align the interests of our Executive Officers and other senior personnel with those of our shareholders. The Compensation Committee evaluates base salary, target short-term and long-term award opportunities, and other plan design elements for our Executive Officers as discussed below. Differences in total compensation generally reflect the Executive Officer’s role, relevant experience, expertise, tenure, and performance of the individual Executive Officer within their role.
| Element | Purpose | Delivery | Focus |
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| Base Salary | Attract and retain highly qualified executives | Cash, fixed amount paid on a monthly basis | Differentiated pay based on market and the executive’s experience, skills, and performance |
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| Annual Short-Term Incentive Awards | Focus executives’ performance to achieve short-term goals | Cash, variable amount generally paid in October following the end of the fiscal year based on the extent to which pre-defined targets are achieved | Annual performance period to align with short-term financial and operational objectives, and thereby to shareholder interests |
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| Long-Term Equity-Based Compensation | Focus executives’ performance to achieve long-term goals | Equity-based awards that include a majority weighting on performance-based awards, and to a lesser extent, time-based awards | Long-term focus to align with shareholder value creation over a three-year period |
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| Other Executive Benefits and Perquisites | Attract and retain executives by providing competitive benefits | Health and welfare benefits, retirement benefits, and perquisites | Specific to each benefit program |
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| Employment Agreement and Change in Control Policy | Protect company interests through contractual provisions | Upon appointment to Executive Officer role | Non-compete and non-solicitation; continued leadership engagement in the event of a change in control |
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| 44 | 2024 PROXY STATEMENT FERGUSON ENTERPRISES INC. |
