NORTHWEST PIPE CO
For the period ended Dec 31, 2023. Filed Apr 25, 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.
Dec 31, 2023 · Filed Apr 25, 2024
Contents
Proxy Summary
PROXY SUMMARY
CREATING STAKEHOLDER VALUE
‘Creating Stakeholder Value**' Section starts on page 6.**
| 58 | Years of Quality Manufacturing Data as of 12/31/2023 | 13 | Manufacturing Facilities | 1,325 | Company Employees | 4 | Branded Product Lines |
Founded in 1966, Northwest Pipe Company is a leading manufacturer of water-related infrastructure products. In addition to being the largest manufacturer of engineered steel water pipeline systems in North America, the Company manufactures stormwater and wastewater technology products; high-quality precast and reinforced concrete products; pump lift stations; steel casing pipe, bar-wrapped concrete cylinder pipe, and one of the largest offerings of pipeline system joints, fittings, and specialized components.
| Notice and Proxy Statement | 2024
PROXY SUMMARY
DELIVERING VALUE
A combination of new population centers, rising demand on developed water sources, substantial underinvestment in water infrastructure over the past several decades, impacts from climate change, and increasingly stringent regulatory policies are driving demand for water infrastructure projects and environmental solutions across the United States.
The Company’s core market for its Engineered Steel Pressure Pipe (“SPP”) segment is the large-diameter, high-pressure portion of a water transmission pipeline, which the Company believes has a total addressable market of approximately $2 billion over the next three years.
With the Company’s goal of creating growth and profitability to drive shareholder value, Northwest Pipe Company continues to look beyond the engineered welded steel pipeline market and address the much larger potential market of concrete pipe and precast. The Company believes the water-related Precast Infrastructure and Engineered Systems (“Precast”) segment has a total annual addressable market of approximately $3 to $5 billion. The Company’s environmental solutions and engineered equipment manufactured by its Precast segment support this addressable market and provide precast infrastructure products that facilitate water efficiency, security, wastewater pretreatment, and stormwater quality.
The Company will continue to maximize its SPP segment by being opportunistic with the limited but identified potential acquisition opportunities, as well as expand its footprint in the precast concrete and engineered solutions market for growth through expansion or acquisition.
| Notice and Proxy Statement | 2024
PROXY SUMMARY
| EARNINGS PER SHARE | COMPOUND ANNUAL GROWTH RATE |
| Basic net income per share is computed by dividing the net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including restricted stock units (“RSUs”) and performance share awards (“PSAs”), assumed to be outstanding during the period using the treasury stock method. The chart below shows diluted net income per share from continuing operations, which was $2.09 in 2023. The Company’s SPP market has seen improved resiliency to variability in demand. The addition of the Precast segment has improved the Company’s margins and cash conversion cycle. | The compound annual growth rate (“CAGR”) is the mean annual growth rate of revenue over a specified period of time longer than one year. The chart below shows the Company’s revenue by segment (in millions) and its six-year compound annual growth rate of 22%. The Company has achieved its growth principally through acquisitions, acquiring Ameron Water Transmission Group, LLC, its largest SPP competitor in 2018, before strategically selecting the precast concrete market and completing the acquisitions of Geneva Pipe and Precast Company (“Geneva”) (2020) and Park Environmental Equipment, LLC (“ParkUSA”) (2021). |
CORPORATE GOVERNANCE
‘Corporate Governance’*** Section starts on page 16.***
CORPORATE GOVERNANCE HIGHLIGHTS
| SHAREHOLDER EMPOWERMENT AND ENGAGEMENT | ✔ | 10% threshold for shareholder to call a special meeting |
|---|---|---|
| ✔ | Robust year-round shareholder engagement | |
| ✔ | No poison pill | |
| ✔ | Initiated share repurchase program of up to $30 million to enhance shareholder value by improving financial metrics | |
| SKILLED AND INDEPENDENT BOARD OF DIRECTORS “BOARD” | ✔ | All directors are independent, except the Chief Executive Officer (“CEO”) |
| ✔ | Range of tenures enables balance between historical experience and fresh perspectives | |
| ✔ | Skills and background aligned to the Company’s strategic direction | |
| ✔ | Director recruitment and selection process that prioritizes skills and qualifications and emphasizes leadership traits, work ethic, independence, business experience, and diversity of background | |
| ✔ | Training opportunities to address evolving business environment and governance landscape | |
| ✔ | Diverse experience (industry, profession, public service, geography) |
| Notice and Proxy Statement | 2024
PROXY SUMMARY
| DEFINED BOARD STRUCTURE AND PROCESSES | ✔ | Annual self-assessment to enable adequate Board refreshment and appropriate evaluation of Board skills, experience, and perspectives; results shared and discussed in executive session of independent directors |
|---|---|---|
| ✔ | Annual review of Corporate Bylaws and Corporate Governance Principles to ensure alignment with best practices | |
| ✔ | All committee members are independent directors | |
| ✔ | All members empowered to call special Board meetings at any time for any reason | |
| ✔ | Regular executive sessions of independent directors | |
| ROBUST OVERSIGHT OF RISKS AND OPPORTUNITIES | ✔ | Board responsible for risk oversight, with specific risk areas delegated to relevant Board committees |
| ✔ | Purposeful inclusion of key risk areas on Board and/or committee agendas | |
| ✔ | Engagement with business leaders to review short-term plans, long-term strategies, and associated risks | |
| ✔ | Incentive compensation not overly leveraged and with maximum payout caps and design features intended to balance pay for performance with the appropriate level of risk-taking | |
| ✔ | Robust stock ownership requirements and prohibition from hedging and pledging Company securities | |
| ✔ | Incentive compensation clawbacks in the event of a financial restatement | |
| COMMITMENT TO SUSTAINABILITY AND CORPORATE RESPONSIBILITY | ✔ | Dedicated adherence to principles of Integrity and Ethics, Diversity, Equity and Inclusion, and Workplace Respect |
| ✔ | Fostering core values, particularly safety, while balancing a performance culture based on Company behaviors | |
| ✔ | No use of corporate funds for political contributions; robust oversight of and transparency into political activities |
PROPOSAL #1: ELECTION OF DIRECTORS
‘Proposal #1: Election of Directors**' Section starts on page 24.**
| Nominees | Title | Years of Service | Independent | Committee Membership |
|---|---|---|---|---|
| Amanda Julian | Senior Partner of NeoPsy Systems | 4 | Yes | Environmental and Social Governance Committee - chairperson; Nominating and Governance Committee |
| Keith Larson | Retired Vice President of Intel Corporation | 17 | Yes | Audit Committee - chairperson; Compensation Committee; Environmental and Social Governance Committee |
| Richard Roman | Retired Chief Executive Officer of Northwest Pipe Company | 21 | Yes | Audit Committee |
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Board of Directors unanimously recommends that shareholders vote “FOR” the election of its nominees for director. Proxies solicited by the Board will be voted “FOR” the election of the Board’s nominees unless a vote withholding authority is specifically indicated.
| Notice and Proxy Statement | 2024
PROXY SUMMARY
PROPOSAL #2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
‘Proposal #2: Advisory Vote on Executive Compensation**' Section starts on page 33.**
EXECUTIVE COMPENSATION
The following table reflects compensation awarded to the Company’s CEO, Chief Financial Officer (“CFO”), and each of the three other most highly compensated executive officers (collectively the “Named Executive Officers” or “NEOs”) in 2023. More detailed information regarding Executive Compensation can be found on page 33 under “Executive Compensation Discussion and Analysis” and on page 41 under “Summary Compensation.”
| Name | Principal Position | Salary | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total |
|---|---|---|---|---|---|---|
| Scott Montross | Director, CEO, and President | $700,793 | $977,844 | $720,939 | $14,748 | $2,414,324 |
| Aaron Wilkins | Senior Vice President, CFO, and Corporate Secretary | 391,250 | 365,012 | 241,499 | 12,270 | 1,010,031 |
| Miles Brittain | Executive Vice President | 391,250 | 365,012 | 241,499 | 16,536 | 1,014,297 |
| Eric Stokes | Senior Vice President, SPP | 342,285 | 327,539 | 176,063 | 14,009 | 859,896 |
| Michael Wray | Senior Vice President, Precast | 338,575 | 312,709 | 174,154 | 14,958 | 840,396 |
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Board of Directors unanimously recommends voting “FOR” the approval of the compensation of the NEOs as disclosed in this proxy statement and as described pursuant to the compensation disclosure rules of the Exchange Act.
PROPOSAL #3: RATIFICATION OF THE APPOINTMENT OF MOSS ADAMS LLP
‘Proposal #3: Ratification of the Appointment of Moss Adams LLP**' Section starts on page 51.**
AUDIT SERVICES AND FEES
Audit fees include fees for the audit of the annual financial statements, including required quarterly reviews, the audit of the Company’s internal control over financial reporting, and services in connection with other regulatory filings. Fees for services billed by the Company’s principal accountant, Moss Adams LLP (“Moss Adams”), for the years ended December 31, 2023 and 2022 were as follows:
2023 $1,472,000
2022 $1,388,000
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Board of Directors unanimously recommends voting “FOR” the ratification of the Audit Committee’s appointment of Moss Adams LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024.
ADDITIONAL INFORMATION
‘Additional Information**' Section starts on page 52.**
| Notice and Proxy Statement | 2024
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.