As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S - K, we are providing thefollowing information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the section “Compensation Discussion and Analysis.”
The following table summarizes the Summary Compensation Table (“SCT”) total and Compensation Actually Paid (“CAP”) to the CEO and the average for the other NEOs:
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| · · · · · · · · · · · · · · Value of Initial Fixed $100 · · · · · · · · |
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| · · · · · · · · · · · · · · Investment Based On: · · · · · · · · |
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| · · · · · Average · · · · · · · · · · · |
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| · · · · · · · · Summary · · Average · · · · · · · · · · · Net Income · · |
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| · · Summary · · · · · Compensation · · Compensation · · · · · Peer Group · · · · · From · · |
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| · · Compensation · · Compensation · · Table Total · · Actually Paid · · Total · · Total · · · · · Continuing · · Adjusted |
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| | | Table Total for | | Actually Paid | | for Non-CEO | | to Non-CEO | | Stockholder | | Stockholder | | Net Income | | Operations | | Operating |
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| Year | | CEO(1) | | to CEO(2) | | NEOs(3) | | NEOs(4) | | Return(5) | | Return(6) | | ($m)(7) | | ($m)(8) | | Margin(9) |
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| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) |
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| 2023 | | $19,308,195 | | $11,039,535 | | $6,631,757 | | $4,287,745 | | $100.38 | | $90.17 | | $625 | | | $632 | 9.63% |
| 2022 | | $17,860,730 | | $26,562,730 | | $5,986,427 | | $8,322,000 | | $97.64 | | $91.20 | | $944 | | | $636 | 10.26% |
| 2021 | | $17,603,127 | | $21,435,078 | | $5,235,163 | | $6,004,222 | | $107.51 | | $126.01 | | $537 | | | $343 | 10.56% |
| 2020 | | $9,848,772 | | $6,664,736 | | $2,836,370 | | $2,055,230 | | $90.80 | | $118.57 | | $500 | | $ | N/A | 9.74% |
| (1) | The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Lissalde (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. |
| (2) | The dollar amounts reported in column (c) represent the amount of CAP to Mr. Lissalde, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Lissalde’s total compensation from the SCT to determine CAP: |
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| · · · Deductions · Additions · · |
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| Year · SCT Total · · from SCT(a) · · to SCT(b) · · CAP |
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| 2023 | | $19,308,195 | | $(13,223,536) | | $4,954,876 | | $11,039,535 |
| (a) | Represents the grant date fair value of equity-based awards granted each year. We did not report a change in pension values for any of the years reflected in this table; therefore, a deduction from the SCT total related to pension value is not needed. |
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| (b) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (iv) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (v) the dollar value of any dividends or other earnings paid on stock in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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| · · · · · · · Fair Value at the · · · · |
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| · · · · · Year-over- · · Change in Fair · · End of the Prior · · · · · · |
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| · · · · · Year Change · · Value as of Vesting · · Year of Equity · · · · · · |
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| · · Year End Fair · · in Fair Value of · · Date of Equity · · Awards that Failed · · · · · |
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| · · Value of Equity · · Outstanding and · · Awards Granted · · to Meet Vesting · · Value of · · · |
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| | | Awards Granted | | Unvested Equity | | in Prior Years that | | Conditions in | | Dividends Related | | Total Equity Award |
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| Year | | During the Year | | Awards | | Vested in the Year | | the Year | | to Equity Awards | | Adjustments |
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| 2023 | | $10,527,894 | | $(4,060,130) | | $(1,708,124) | | $— | | $195,236 | | $4,954,876 |
| (3) | The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Lissalde, our Chief Executive Officer) in the “Total” column of the SCT in each applicable year. The NEOs included for purposes of calculating the average amounts for 2023 and 2022 are as follows: Mr. Nowlan, Mr. Fadool, Mr. Demmerle, and Ms. Calaway. For 2021 and 2020, Mr. Ericson was also included. |
| (4) | The dollar amounts reported in column (e) represent the average amount of CAP to the NEOs as a group (excluding Mr. Lissalde), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the amount of compensation realized by the NEOs as a group (excluding Mr. Lissalde) 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 from the SCT for the NEOs as a group (excluding Mr. Lissalde) for each year to determine CAP: |
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| · Average · Deductions · Additions · Average |
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| Year · · SCT Total · · from SCT(a) · · to SCT(b) · · CAP |
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| 2023 | | $6,631,757 | | $(3,897,452) | | $1,553,440 | | $4,287,745 | |
| (a) | Represents the grant date fair value of equity-based awards granted each year. We did not report a change in pension values for any of the years reflected in this table; therefore, a deduction from the SCT total related to pension value is not needed. |
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| (b) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (iv) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (v) the dollar value of any dividends or other earnings paid on stock in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
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2024 Proxy Statement | 59
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| · · · · · Change in · Average Fair Value · · · · |
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| · · · · · Year-over-Year · · Average Fair Value · · at the End of the · · Average · · · |
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| | | | | | Change in Average | | as of Vesting Date | | Prior Year of Equity | | Value of | | Total |
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| · · Average Year End · · Fair Value of · · of Equity Awards · · Awards that Failed · · Dividends · · Average |
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| · · Fair Value of Equity · · Outstanding and · · Granted in Prior · · to Meet Vesting · · Related · · Equity |
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| · · Award Granted · · Unvested Equity · · Years that Vested · · Conditions in · · to Equity · · Award |
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| Year · · During the Year · · Awards · · in the Year · · the Year · · Awards · · Adjustments |
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| 2023 | | $3,103,074 | | $(1,146,460) | | $(457,723) | | $— | | $54,549 | | $1,553,440 | |
| (5) | The Total Stockholder Return shows the value at each year end (including dividend reinvestment, to the extent applicable) of $100 invested in our common stock on January 1, 2020. |
| (6) | The Peer Group Total Stockholder Return shows the value at each year end (including dividend reinvestment, to the extent applicable) of $100 invested on January 1, 2020, in companies within Standard Industrial Code (“SIC”) 3714 Motor Vehicle Parts. |
| (7) | The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
| (8) | The dollar amounts reported represent the amount of net income attributable to continuing operations (i.e., reflecting the PHINIA spin-off) reflected in the Company’s audited financial statements for 2023, 2022, and 2021. |
| (9) | Adjusted Operating Margin is defined in the Compensation Discussion and Analysis and a reconciliation from US GAAP Operating Income is shown in the Appendix. We have selected Adjusted Operating Margin for this table as the financial performance measure we consider most important in linking compensation actually paid to our NEOs for 2023. |
Most Important Performance Measures
In our assessment, the most important financial performance measures used to link CAP to Company performance in 2023 are listed in the table below, not ranked in order of importance. The role of each of these performance measures in our executive compensation program is discussed in the “Compensation Discussion and Analysis.”
| Adjusted Operating Margin | Relative Total Stockholder Return |
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| Free Cash Flow | eProducts Revenue Mix |
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Analysis of the Information Presented in the Pay Versus Performance Table
In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table.
Compensation Actually Paid and TSR
The chart below shows the comparison of Compensation Actually Paid to the CEO and non-CEO NEOs and TSR for the Company and Peer Group.
Compensation Actually Paid and Net Income
The chart below shows the comparison of Compensation Actually Paid for the CEO and non-CEO NEOs and Net Income.
Compensation Actually Paid and Adjusted Operating Margin
The chart below shows the comparison of Compensation Actually Paid for the CEO and non-CEO NEOs and Adjusted Operating Margin.
2024 Proxy Statement | 61
