(2)
| Applicable ownership percentage is based upon 24,548,69724,922,944 shares of common stock outstanding as of February 25, 2021. | | | | | | | | | | 2021 Proxy Statement | 1927, 2024. |
(3)
| The information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 10, 2021 reporting beneficial ownership as of December 31, 2020. The Vanguard Group reported that they have sole voting power with respect to no shares, shared voting power with respect to 16,539 shares, shared dispositive power with respect to 36,077 shares, and sole dispositive power with respect to 2,187,135 shares.13, 2024 |
| | | 2024 Proxy Statement | | | 22 |
TABLE OF CONTENTS reporting beneficial ownership as of December 29, 2023. The Vanguard Group reported that they have sole voting power with respect to no shares, shared voting power with respect to 8,771 shares, shared dispositive power with respect to 35,248 shares, and sole dispositive power with respect to 2,627,400 shares. (4)
| The information is based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 29, 202125, 2024 reporting beneficial ownership as of December 31, 2020.2023. BlackRock, Inc. reported that they have sole voting power with respect to 1,956,4132,087,520 shares, and sole dispositive power with respect to all of the shares reported. |
(5)
| The information is based on a Schedule 13G filed by T. Rowe Price Associates,Investment Management, Inc. with the SEC on February 16, 202114, 2024 reporting beneficial ownership as of December 31, 2020.2023. T. Rowe Price Associates,Investment Management, Inc. reported that they have sole voting power with respect to 513,083522,650 shares, sole dispositive power with respect to 1,927,4221,415,163 shares and no shared voting or shared dispositive power. |
(6)
| Includes (i) 1,0853,700 stock options currently exercisable or that become exercisable within 60 days, and (ii) 447454 restricted stock units that vest within 60 days. |
(7)
| Includes (i) 4,2453,700 stock options currently exercisable or that become exercisable within 60 days, and (ii) 447454 restricted stock units that vest within 60 days, and (iii)days. Mr. Chung also holds 7,308 deferred restricted stock units granted pursuant to the directors deferred compensation plan that are deferred until 10 days after termination of service from the Board.Board, including by resignation or retirement. |
(8)
| Ms. Delly joined the Board in September 2023. |
(9)
| Includes (i) 3,7634,500 stock options currently exercisable or that become exercisable within 60 days, and (ii) 447454 restricted stock units that vest within 60 days.(9)Ms. Green joined the Board on February 1, 2020.
|
(10)
| Includes (i) 4782,789 stock options currently exercisable or that become exercisable within 60 days, and (ii) 269454 restricted stock units that vest within 60 days.(10) Ms. Green also holds 2,169 deferred restricted stock units granted pursuant to the directors deferred compensation plan that are deferred until 10 days after termination of service from the Board, including by resignation or retirement.
|
(11)
| Includes (i) 5,2105,445 stock options currently exercisable or that become exercisable within 60 days, and (ii) 447454 restricted stock units that vest within 60 days, and (iii)days. Mr. Grillo also holds 774 deferred restricted stock units granted pursuant to the directors deferred compensation plan that are deferred until 10 days after termination of service from the Board.(11)Board, including by resignation or retirement.
|
(12)
| Includes (i) 87,940 stock options currently exercisable or that become exercisable within 60 days, (ii) 6,546 restricted stock units that vest within 60 days, and (iii) 1,132 shares held indirectly by trust.(12)Includes (i) 17,692139,231 stock options currently exercisable or that become exercisable within 60 days, and (ii) 4478,275 restricted stock units that vest within 60 days.
|
(13)
| Dr. Henderson joined the Board in May 2023. |
(14)
| Includes (i) 2,5634,500 stock options currently exercisable or that become exercisable within 60 days, and (ii) 454 restricted stock units that vest within 60 days. |
(15)
| Includes (i) 4,500 stock options currently exercisable or that become exercisable within 60 days, (ii) 447454 restricted stock units that vest within 60 days, and (iii) 4685,000 shares held indirectly by trust. Mr. Noglows also holds 1,784 deferred restricted stock units granted pursuant to the directors deferred compensation plan that are deferred until 10 days after termination of service from the Board.(14)Board, including by resignation or retirement.
|
(16)
| Includes (i) 5,210 stock options currently exercisable or that become exercisable within 60 days, (ii) 447 restricted stock units that vest within 60 days, and (iii) 2,468 deferred restricted stock units granted pursuant to the directors deferred compensation plan that are deferred until termination of service from the Board.(15)Includes (i) 6,04465,056 stock options currently exercisable or that become exercisable within 60 days, and (ii) 4472,895 restricted stock units that vest within 60 days. Excludes 16,727 shares held in a trust account pursuant to which he has no voting or dispositive power.
(16)
|
(17)
| Includes (i) 29,08646,515 stock options currently exercisable or that become exercisable within 60 days, and (ii) 2,5953,134 restricted stock units that vest within 60 days.(17)
|
(18)
| Includes (i) 18,4785,489 stock options currently exercisable or that become exercisable within 60 days, and (ii) 2,581875 restricted stock units that vest within 60 days.(18)
|
(19)
| Includes (i) 13,89511,581 stock options currently exercisable or that become exercisable within 60 days, and (ii) 7242,003 restricted stock units that vest within 60 days.
(19)Includes (i) 5,687 stock options currently exercisable or that become exercisable within 60 days, and (ii) 1,588 restricted stock units that vest within 60 days.
(20)
| Our executive officers as of February 25, 202129, 2024 consisted of our named executive officers, Mr. Alexander Conrad, Mr. Matthew J. Cole, Mr. Chad Marak, and Mr. Alexander Conrad.Peter Kim. The number of shares of common stock beneficially owned by our current directors and executive officers as a group includes (i) 4,753 stock options currently exercisable or that become exercisable within 60 days, and (ii) 738 restricted stock units that vest within 60 days, held by Mr. Conrad. |
| | | 2024 Proxy Statement
| | | Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our executive officers, directors and holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Based solely on our review of the copies of these reports and on information provided by our executive officers and directors, we believe that during the fiscal year ended December 26, 2020 our directors and executive officers complied with all Section 16(a) filing requirements.
| | | PROPOSAL NO. 2- ADVISORY VOTE ON COMPENSATIONOF NAMED EXECUTIVE OFFICERS
23 |
Under the Dodd-Frank Act and the related rules promulgated by the SEC, we are requesting your advisory, non-binding approval of the compensation of our NEOs as disclosed in the following Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative as presented in this Proxy Statement. This proposal, commonly known as a "Say-on-Pay" proposal, gives stockholders the opportunity to provide their input on our executive pay program and policies. We currently elect to provide our stockholders the opportunity to provide an advisory, non-binding vote on the compensation of our NEOs on an annual basis.
TABLE OF CONTENTS beneficially owned by our current directors and executive officers as a group includes (i) 62,383 stock options currently exercisable or that become exercisable within 60 days, and (ii) 3,941 restricted stock units that vest within 60 days, held by Messrs. Conrad, Cole, Marak, and Kim. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers, directors and holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Based solely on our review of the copies of these reports and on information provided by our executive officers and directors, we believe that during the fiscal year ended December 30, 2023 our directors and executive officers complied with all Section 16(a) filing requirements. | | | 2024 Proxy Statement | | | 24 |
TABLE OF CONTENTS PROPOSAL NO. 2 – ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS Under the Dodd-Frank Act and the related rules promulgated by the SEC, we are requesting your advisory, non-binding approval of the compensation of our NEOs as disclosed in the following Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative as presented in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives stockholders the opportunity to provide their input on our executive pay program and policies. We currently elect to provide our stockholders the opportunity to provide an advisory, non-binding vote on the compensation of our NEOs on an annual basis. Accordingly, it is expected that the next say-on-pay vote will occur at the 2025 annual meeting of stockholders. As an advisory vote, this proposal is not binding on Littelfuse, the Board, or the Compensation Committee. However, the Compensation Committee and the Board value the opinions expressed by stockholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding named executive officers. Executive Compensation Vote We believe that our executive compensation program effectively aligns the interests of stockholders and executives, incentivizes the accomplishment of company goals, and attracts and retains talented executives. The key components of our compensation program are as follows:
■ ⯀ | Alignment of executive and stockholder interests through short and long-term incentives linked to operating performance;■ performance;
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⯀ | Short-term cash compensation based upon Company performance and individual contribution and performance;■ contribution;
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⯀ | Compensation structured to attract and retain the most talented industry leaders; and ■
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⯀ | Compensation program based, in part, on the practices of peers in our industry and other comparable companies. |
At our 2023 annual meeting of stockholders, approximately 94% of the shares voted were cast in support of our executive compensation program. The Board and Compensation Committee value the opinions of our stockholders and took this high level of approval into account when developing the compensation for our NEOs. There were no significant changes to our executive compensation program for 2023 in light of the results of the say-on-pay votes at the 2023 annual meeting of stockholders. This vote is not intended to address any specific item of compensation; rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Our Board urges you to approve the compensation of our NEOs by voting in favor of the following resolution: “RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative as presented in this Proxy Statement.” THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS At our 2020 annual meeting of stockholders, approximately 93% of the shares voted were cast in support of our executive compensation program. The Board and Compensation Committee value the opinions of our stockholders and took this high level of approval into account when developing the compensation for our NEOs.
| | | This vote is not intended to address any specific item of compensation; rather the overall compensation of our NEOs and the philosophy, policies and practices described in this2024 Proxy Statement. Our Board urges you to approve the compensation of our NEOs by voting in favor of the following resolution:Statement
| | | 25 "RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative as presented in this Proxy Statement."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NEOS
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| | | COMPENSATION DISCUSSION AND ANALYSIS
|
The following Compensation Discussion and Analysis, or CD&A, describes our 2020 executive compensation programs. This CD&A is intended to be read in conjunction with the tables beginning on page 34,
TABLE OF CONTENTS COMPENSATION DISCUSSION AND ANALYSIS The following Compensation Discussion and Analysis, or CD&A, describes our 2023 executive compensation programs. This CD&A is intended to be read in conjunction with the tables beginning on page 38, which provide detailed historical compensation information for our following NEOs. | | | | | | | | | Name | Title | Notes | David W. Heinzmann | President and Chief Executive Officer | Appointed to current role in January 2017. | Meenal A. Sethna | Executive Vice President, Chief Financial Officer | Appointed to current role in March 2016. | Ryan K. Stafford | Executive Vice President, Chief Legal and Human Resources Officer and Corporate Secretary | Appointed to expanded role as Corporate Secretary in January 2017. | Matthew J. Cole | Senior Vice President, eMobility and Corporate Strategy; and Former Senior Vice President, Business Development and Strategy | Appointed to current role in January 2021. | Deepak Nayar | Senior Vice President and General Manager Electronics Business; and Former Senior Vice President and General Manager, Electronics and Industrial Business Unit | Appointed to expanded role in May 2020. | | David W. Heinzmann | | | President and Chief Executive Officer
| | | Appointed to current role in January 2017. | | | EXECUTIVE SUMMARYMeenal A. Sethna
| | |
Impact of COVID-19 on Fiscal Year 2020Executive Vice President and Chief Financial PerformanceOfficer
| | | The Company continuedAppointed to manage the uncertaintiescurrent role in March 2016.
| | | Ryan K. Stafford | | | Executive Vice President, Mergers & Acquisitions, Chief Legal Officer and impacts of COVID-19 through the year, with significant improvementCorporate Secretary | | | Appointed to its financial resultscurrent role in the second half of 2020 compared to the first half of 2020. During the first half of 2020, the Company’s revenueJune 2021. Previously also served as CHRO. | | | Maggie Chu | | | Senior Vice President and operations were impacted by production disruptions due to temporary closures of several of the company’s manufacturing facilities, resulting from government directives due to the impact of COVID-19. During the second half of 2020, the Company’s total revenue grew 13% compared to the prior year, with growth across all of its businesses led by higher production levels, and increased demand across a number of end markets into which it sells. The ability of our global associates to adapt quickly and their resiliency through each new challenge has been critical to maintaining long-term value for our stockholders and customers.Chief Human Resources Officer | | |
The Company’s priorities continue to be first, on our associates, their families and the communities in which we operate; second, our customers; and third, long-term financial health of the company. In an effort to protect the health and safety of our employees,Joined the Company enacted numerous proactive, aggressive actions at its facilities globally in the first quarter of 2020,June 2021, and implemented a number of safety procedures including hygienewas appointed an Executive Officer in July 2021.
| | | Deepak Nayar | | | Senior Vice President and disinfection protocols, social distancing and wearing personal protective equipment ("PPE"). The Company expects these actions will continue for the foreseeable future.General Manager, Electronics Business | | |
The financial effects from COVID-19 have been wide-ranging and include items such as spending on PPE, additional personnel and employee transportation costs, and manufacturing inefficiencies, as well as an increaseAppointed to current role in freight costs for our products due to the transportation capacity constraints across the world.May 2020.
Impact of COVID-19 on Executive Compensation
As a result of the many COVID uncertainties, the Company implemented temporary reductions to the salaries of our Executive Officers and the compensation of our Directors. The Company executed our strategy to manage costs at the onset of the COVID-19 pandemic successfully, and as a result, when business conditions began to stabilize, the reductions were discontinued, effective July 1, 2020. The Company also implemented a freeze on the merit increase program for the entirety of 2020 and cancelled the 2020 Annual Incentive Plan (AIP) for all associates, including our Executive Officers.
In the second half of 2020, business conditions stabilized. In recognition of the tremendous efforts of our global associates throughout the pandemic and the Company's financial performance in the difficult and uncertain environment, the Company made discretionary bonus payments to certain eligible associates in January 2021. The Compensation Committee also approved discretionary bonus payments to the NEOs representing 25% of the target award that would have been payable under the 2020 AIP, as detailed further on page 32. In recognition of the significant contributions of a number of our leaders around
| |
the world, the Compensation Committee granted long-term retention restricted stock unit and stock option awards to certain key associates, including certain NEOs.
As described below, our executive compensation programs are designed to pay for performance and align the interests of our executives with those of our stockholders. In fiscal year 2023, our annual incentive awards for our NEOs were based on the Company’s achievement of financial objectives related to its base business operations including sales growth, earnings per share growth and cash generation, and the NEOs’ individual performances. In addition, a significant portion of our executive compensation program consists of long-term compensation subject to long-term vesting requirements. The Compensation Committee continually reviews the compensation programs for our NEOs to ensure they achieve the desired goals of aligning our executive compensation structure with our stockholders’ interests and current market practices. We believe that our compensation programs align the compensation of our executives with the interests of our stockholders while managing compensation risk, including through stock ownership guidelines, an independent Compensation Committee and the use of an independent compensation consultant. The compensation of our NEOs during fiscal year 2023 directly ties to the Company’s overall business performance. Our 2023 results reflected improvements in our portfolio diversification and ability to execute through weaker end markets and inventory destocking cycles. While our sales declined 6% and our diluted earnings per share was down 31%, we delivered more resilient operating profit margins versus prior macroeconomic downturns. We also generated $457 million in cash flow from operations, a record for the Company, and growth of 9% versus the prior year. We continued to advance our long-term strategic initiatives and execute on our capital deployment strategy. We expanded our product portfolio by acquiring Western Automation Research and Development Limited, based in Galway, Ireland, and entered into an agreement to acquire a 200mm wafer fab located in Dortmund, Germany in early 2025. We also increased our quarterly cash dividend by over 8% to $0.65 per share in 2023. The Compensation Committee is responsible for overseeing the formulation and application of the Company’s Total Rewards Philosophy relating to the compensation and benefit programs for executive officers. Pay for performance is an essential element of our Total Rewards Philosophy, which is designed to drive performance in the form of global business growth by financially incentivizing our executive officers to create stockholder value. The Compensation Committee has worked with our management and the independent compensation consultant to design compensation programs with the following primary objectives:
■ ⯀ | Attract, retain and motivate highly qualified executives;executives; |
■ | | | 2024 Proxy Statement | | | 26 |
TABLE OF CONTENTS ⯀ | Reward executives based upon our financial performance at levels competitive with peer companies; and ■
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⯀ | Align a significant portion of the executive compensation with driving our performance and stockholder value in the form of performance-based executive incentive awards and long-term awards. The guiding principles of our Total Rewards Philosophy are as follows:
Performance. We believe that the best way to accomplish alignment of compensation with the interests of our stockholders is to link a significant portion of total compensation directly to meeting or exceeding Company, business unit and individual performance goals. When performances exceed expectations, total pay levels are expected to be higher. When performances fall below expectations, total pay levels are expected to be lower.
Competitiveness. Our compensation and benefit programs are designed to be competitive with the compensation provided by companies with whom we compete for talent. While we generally target the 50th percentile of the total compensation of competitor companies, in some instances, we provide compensation above or below the 50th percentile to account for other factors such as an executive’s operating responsibilities, management level, tenure and performance in the position. To help us analyze the competitiveness of our compensation programs, we developed, with guidance from our independent compensation consultant, a compensation peer group that was used to set compensation for the 2020 fiscal year, as discussed below.
Cost. Our compensation and benefit programs are designed to be cost effective, which we believe to be in the best interests of our stakeholders.
Best Practices inCompensation
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The guiding principles of our Total Rewards Philosophy are as follows: Performance. We believe that the best way to accomplish alignment of compensation with the interests of our stockholders is to link a significant portion of total compensation directly to meeting or exceeding Company, business unit and individual performance goals. When performance exceeds expectations, total pay levels are expected to be higher. When performance falls below expectations, total pay levels are expected to be lower. Competitiveness. Our compensation and benefit programs are designed to be competitive with the compensation provided by companies with whom we compete for talent. While we generally target the 50th percentile of the total compensation of competitor companies, in some instances, we provide compensation above or below the 50th percentile to account for other factors such as an executive’s operating responsibilities, management level, tenure and performance in the position. To help us analyze the competitiveness of our compensation programs, we developed, with guidance from our independent compensation consultant, a compensation peer group that was used to set compensation for the 2023 fiscal year, as discussed below. Cost. Our compensation and benefit programs are designed to be cost effective, which we believe to be in the best interests of our stakeholders. Best Practices in Compensation Governance Highlighted below are the key features of our executive compensation program, including the pay practices that we have implemented to drive sustainable results, encourage executive retention and align executive and stockholder interests. We also identify certain pay practices that we have not implemented because we believe they do not serve our risk management goals or stockholders’ long-term interests. |
| | | | | | ü
What
We
Do
| ■ Pay for performance and allocate individual awards based on actual results
■We
Do | | | ⯀ Pay for performance and allocate individual awards based on actual results
⯀ Provide an appropriate mix of short-term and long-term compensation ■ Require stock ownership and retention of a significant portion of equity-based awards
■ Prohibit pledging and speculative trading of company securities
■ Engage independent compensation consultant
■ Limit the annual incentive cash payout amounts and annual equity grants to any individual executive officer in a given year
| X
What
We
Don’t
Do
| ■ No multi-year guaranteed incentive awards for executive officers
■ No excise tax gross ups upon change in control payments and benefits
■ No discounts, reloading or re-pricing stock options
■ No incentives that encourage excessively risky behavior
■ No dividend equivalents are paid on unearned restricted stock units
■ No excessive perquisites
|
Allocation between Short-Term and Long-Term Compensation
The allocation between short-term and long-term compensation is based primarily on competitive market practices relative to base salaries,
⯀ Require stock ownership and retention of a significant portion of equity-based awards
⯀ Prohibit pledging and speculative trading of company securities
⯀ Engage independent compensation consultant
⯀ Annually assess and mitigate compensation risk
⯀ Limit the annual incentive awardscash payout amounts and long-term incentive values, as opposedannual equity grants to any individual executive officer in a targeted allocation between short-term and long-term pay. We also consider certain internal factors that may cause us to target a particular element of a NEO’s compensation differently. These internal factors may include the NEO’s operating responsibilities, management level and tenure and performance in the position. We consider the total compensation to be delivered to individual NEOs, and as such, exercise discretion in determining the portion allocated to annual and long-term incentive opportunity. We believe that this "total compensation" approach provides the ability to align pay decisions with the short-term and long-term needs of the business and the interests of our stockholders. It also allows for the flexibility needed to recognize differences in performance of each NEO by providing differentiated pay.given year | | | ✘
What
We
BenchmarkingDon’t
Do | | | Competitive compensation levels for our executive officers are in part established through the review of competitive market compensation data provided by the Compensation Committee’s independent compensation consultant. This review includes base salary, annual incentive opportunities and long-term incentive opportunities for comparable companies. In 2019, we selected an industry compensation peer group as a source to evaluate compensation levels for the 2020 and 2021 fiscal years. The compensation peer group originally consisted of 21 publicly-traded companies of reasonably similar size to us in the electronic equipment, the electronic components and equipment industry and the semiconductor/semiconductor equipment and manufacturing industry, representing different segments of our business. The compensation peer group now consists of 17 companies as AVX Corporation, Cypress Semiconductor Corporation, Finisar Corporation and KEMET Corporation were removed from the peer group as they were acquired. The current compensation peer group is set forth below:
| | | | | | Ametek, Inc. (AME) | Hubbell Incorporated (HUBA, HUBB) | Belden, Inc. (BDC) | Keysight Technologies, Inc. (KEYS) | Cirrus Logic, Inc. (CRUS) | Methode Electronics, Inc. (MEI) | Cree, Inc. (CREE) | ON Semiconductor Corporation (ON) | Coherent, Inc. (COHR) | OSI Systems, Inc. (OSIS) | Diodes Incorporated (DIOD) | Qorvo, Inc. (QRVO) | Gentex Corporation (GNTX) | Sensata Technologies Holding PLC (ST) | Gentherm, Incorporated (THRM) | Skyworks Solutions, Inc. (SWKS) | | TTM Technologies, Inc. (TTMI) |
For 2020 total compensation, an analysis conducted in 2019 was relied upon to obtain data from each compensation peer group company. That data was then size-adjusted to approximate our revenues for the corresponding fiscal year. The total compensation for our NEOs is generally targeted at the 50th percentile of the competitive market data. In 2020, the Compensation Committee awarded total target compensation to Messrs. Heinzmann, Stafford, Nayar and Cole and Ms. Sethna that was +5%, +22%, +16%, -4% and +11%, respectively, in relation to the median of our peer group. In setting the compensation of our NEOs in 2020, the Compensation Committee considered the individual scope of responsibility of each NEO, each NEO’s historical compensation levels, the NEO’s years of experience, the NEO’s past, and expected future contributions to our success, market practice, internal equity considerations and individual performance. Additional information regarding the components of total compensation for our NEOs is discussed below under "Components of Total Compensation."
Annual Compensation Process
The Compensation Committee reviews industry data and performance results presented by its independent compensation consultant in determining the appropriate aggregate and individual compensation levels for the year. In conducting its review, the Compensation Committee considers quantitative performance results, the overall need of the organization to attract, retain and motivate the executive team, and the total cost of compensation programs.
The Compensation Committee reviews base salaries annually and changes them when it determines appropriate. The approval of⯀ No multi-year guaranteed incentive awards for NEOs under the Littelfuse, Inc. Annual Incentive Plan (the "Annual Incentive Plan") for the preceding yearexecutive officers
⯀ No excise tax gross ups upon change in control payments and the terms of the incentive awards for NEOs for the current yearbenefits
⯀ No discounts, reloading or re-pricing stock options
⯀ No incentives that encourage excessively risky behavior
⯀ No dividend equivalents are approved by the Compensation Committee at its January or February meeting. Long-term equity compensation is granted by the Compensation Committee and the full Board at the April meeting, held in connection with the annual meeting of stockholders. The Compensation Committee oversees the administration of the Company’s equity-based programs and makes recommendations to the Board for its consideration and approval of equity awards to be made to the CEO and other executive officers. The Compensation Committee has delegated authority to the CEO to grant equity awards to other non-executive officer employees. Ratification of grants for any non-executive officers who are newly-hired or promoted during the course of the year generally occurs at the Compensation Committee meeting immediately following the hiring or promotion, as applicable.paid on unearned restricted stock units
⯀ No excessive perquisites | |
Allocation between Short-Term and Long-Term Compensation The allocation between short-term and long-term compensation is based primarily on competitive market practices relative to base salaries, annual incentive awards and long-term incentive values, as opposed to a targeted allocation between short-term and long-term pay. We also consider certain internal factors that may cause us to target a particular element of a NEO’s compensation differently. These internal factors may include the NEO’s operating responsibilities, management level and tenure and performance in the position. We consider the total compensation to be delivered to individual NEOs, and as such, exercise discretion in determining the portion allocated to annual and long-term incentive opportunity. We believe that this “total compensation” approach provides the ability to align pay decisions with the short-term and long-term needs of the business and the interests of our stockholders. It also allows for the flexibility needed to recognize differences in performance of each NEO by providing differentiated pay. | | | 2024 Proxy Statement | | | 27 |
TABLE OF CONTENTS Competitive compensation levels for our executive officers are in part established through the review of competitive market compensation data provided by the Compensation Committee’s independent compensation consultant. This review includes base salary, annual incentive opportunities and long-term incentive opportunities for comparable companies. In 2021, we selected an industry compensation peer group as a source to evaluate compensation levels for the 2022 and 2023 fiscal years. The compensation peer group consisted of 19 publicly traded companies of reasonably similar size to us in the electronic equipment, the electronic components and equipment industry and the semiconductor/semiconductor equipment and manufacturing industry, representing different segments of our business. In 2022, CMC Materials Inc was removed from the peer group, as it was acquired. The current compensation peer group is set forth below: Ametek, Inc. (AME) | | | Methode Electronics, Inc. (MEI) | Belden, Inc. (BDC) | | | ON Semiconductor Corporation (ON) | Cirrus Logic, Inc. (CRUS) | | | OSI Systems, Inc. (OSIS) | Coherent Corp (f/k/a II-VI, Inc.) (COHR) | | | Qorvo, Inc. (QRVO) | Diodes Incorporated (DIOD) | | | Rogers Corp (ROG) | Gentex Corporation (GNTX) | | | Sensata Technologies Holding PLC (ST) | Gentherm, Incorporated (THRM) | | | Synaptics Inc (SYNA) | Hubbell Incorporated (HUBA, HUBB) | | | TTM Technologies, Inc. (TTMI) | Knowles Corp (KN) | | | Visteon (VC) |
As part of its ongoing review of the compensation peer group, in July 2023 the Compensation Committee approved updates to the compensation peer group for the 2024 fiscal year. This new peer group positions Littelfuse around the median of the peer group based on revenue. The following group will be used to evaluate 2024 compensation decisions for our NEOs: Advanced Energy Industries, Inc. (AEIS) * | | | Methode Electronics, Inc. (MEI) | Ametek, Inc. (AME) | | | ON Semiconductor Corporation (ON) | Belden, Inc. (BDC) | | | OSI Systems, Inc. (OSIS) | Cirrus Logic, Inc. (CRUS) | | | Qorvo, Inc. (QRVO) | Coherent Corp (f/k/a II-VI, Inc.) (COHR) | | | Rogers Corp (ROG) | Diodes Incorporated (DIOD) | | | Sensata Technologies Holding PLC (ST) | Gentex Corporation (GNTX) | | | Synaptics Inc (SYNA) | Gentherm, Incorporated (THRM) | | | TTM Technologies, Inc. (TTMI) | Hubbell Incorporated (HUBA, HUBB) | | | Visteon (VC) | Knowles Corp (KN) | | | |
*
| Indicates a new peer group company for 2024 compensation decisions |
The raw data derived from each company in the compensation peer group was size-adjusted to approximate our revenues for the corresponding fiscal year. The total compensation for our NEOs is generally targeted at the 50th percentile of the competitive market data. In 2023, the Compensation Committee awarded total target compensation to Messrs. Heinzmann, Stafford, and Nayar and Mses. Sethna and Chu that was +9%, +5%, +11%, +7%, and 0%, respectively, in relation to the median of our peer group. In setting the compensation of our NEOs in 2023, the Compensation Committee considered the individual scope of responsibility of each NEO, each NEO’s historical compensation levels, the NEO’s years of experience, the NEO’s past, and expected future contributions to our success, market practice, internal equity considerations and individual performance. Additional information regarding the components of total compensation for our NEOs is discussed below under “Components of Total Compensation.” Annual Compensation Process The Compensation Committee reviews industry data and performance results presented by its independent compensation consultant in determining the appropriate aggregate and individual compensation levels for the year. In conducting its review, the Compensation Committee considers quantitative performance results, the overall need of the organization to attract, retain and motivate the executive team, and the total cost of compensation programs. | | | 2024 Proxy Statement | | | 28 |
TABLE OF CONTENTS The Compensation Committee reviews base salaries annually and changes them when it determines appropriate. The approval of incentive awards for NEOs under the Littelfuse, Inc. Annual Incentive Plan (the “Annual Incentive Plan”) for the preceding year and the terms of the incentive awards for NEOs for the current year are approved by the Compensation Committee at its January or February meeting. Long-term equity compensation is granted by the Compensation Committee and the full Board at the April meeting, held in connection with the annual meeting of stockholders. The Compensation Committee oversees the administration of the Company’s equity-based programs and makes recommendations to the Board for its consideration and approval of equity awards to be made to the CEO and other executive officers. The Compensation Committee has delegated authority to the CEO to grant equity awards to other non-executive officer employees. Ratification of grants for any non-executive officers who are newly-hired or promoted during the course of the year generally occurs at the Compensation Committee meeting immediately following the hiring or promotion, as applicable. Role of the Board, Compensation Committee, Management and Consultants The Compensation Committee establishes, reviews and recommends all elements of the executive compensation program to the members of the Board for approval. The Compensation Committee works with an independent compensation consultant, Compensation Strategies, Inc., for advice and perspective regarding market trends that may affect decisions about our executive compensation program and practices. Our independent compensation consultant also advises the Compensation Committee on non-employee director compensation matters. Additional responsibilities of the Board, the Compensation Committee, management and the independent compensation consultant include: Board of Directors and Compensation Committee
■ The Compensation Committee reviews and recommends the CEO’s business goals and objectives relevant to executive compensation to the members of the Board, other than the CEO, for approval; evaluates the performance of the CEO in light of those goals and objectives and recommends the CEO’s compensation level to such members of the Board based on this evaluation. The Compensation Committee reviews and recommends the CEO’s annual and long-term incentive target opportunities and payouts for approval by the members of the Board, other than the CEO.
■ For NEOs other than the CEO, the Compensation Committee reviews and makes recommendations based on a review of compensation survey data and publicly-disclosed compensation information for our peer group, individual performance, internal pay equity and other relevant factors for approval by the full Board for all NEO compensation arrangements including base salary determination and annual and long-term incentive target opportunities and payouts.
⯀ | The Compensation Committee reviews and recommends the CEO’s business goals and objectives relevant to executive compensation to the members of the Board, other than the CEO, for approval, evaluates the performance of the CEO in light of those goals and objectives and recommends the CEO’s compensation level to such members of the Board based on this evaluation. The Compensation Committee reviews and recommends the CEO’s annual and long-term incentive target opportunities and payouts for approval by the members of the Board, other than the CEO. |
⯀ | For NEOs other than the CEO, the Compensation Committee reviews and makes recommendations based on a review of compensation survey data and publicly-disclosed compensation information for our peer group, individual performance, internal pay equity and other relevant factors for approval by the full Board for all NEO compensation arrangements including base salary determination and annual and long-term incentive target opportunities and payouts. |
Management and Consultants
■ Compensation program design: Management makes recommendations in consultation with the independent compensation consultant on compensation program design and pay levels and implements the compensation programs approved by the Board.
⯀ | Compensation program design: Management makes recommendations in consultation with the independent compensation consultant on compensation program design and pay levels and implements the compensation programs approved by the Board. |
⯀ | Develop performance measures: Management identifies appropriate performance measures, recommends performance targets that are used to determine annual awards, and develops individual performance objectives for each NEO. |
⯀ | Compile competitive market data: Management works with the independent compensation consultant in compiling compensation information and preparing the data for presentation to the Compensation Committee. |
⯀ | Develop compensation recommendations: Based on the compensation survey data and publicly-disclosed compensation information, our CEO and our Chief Human Resources Officer (“CHRO”) prepare recommendations for the NEOs (other than for the CEO) and present these recommendations to the Compensation Committee. The Compensation Committee reviews these recommendations along with the competitive market data and other information and advice of the independent compensation consultant, and makes a recommendation to the full Board for approval. Our CEO also assists the Compensation Committee by providing input with regards to the fulfillment of the individual performance objectives of the other NEOs. Compensation recommendations for the CEO are made by the Compensation Committee |
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 26 | | 29 |
■ Develop performance measures: Management identifies appropriate performance measures, recommends performance targets that are used to determine annual awards, and develops individual performance objectives for each NEO.
■ Compile competitive market data: Management works with the independent compensation consultant in compiling compensation information and preparing the data for presentation to the Compensation Committee.
■ Develop compensation recommendations: Based on the compensation survey data and publicly-disclosed compensation information, our CEO and our CHRO prepare recommendations for the NEOs (other than for the CEO) and present these recommendations to the Compensation Committee. The Compensation Committee reviews these recommendations along with the competitive market data and other information and advice of the independent compensation consultant, and makes a recommendation to the full Board for approval. Our CEO also assists the Compensation Committee by providing input with regards to the fulfillment of the individual performance objectives of the other NEOs. Compensation recommendations for the CEO are made by the Compensation Committee TABLE OF CONTENTS based on the compensation survey data and are presented for approval to the directors other than the CEO. Our Executive Vice President and Chief Financial Officer also assists in the preparation of performance targets and objectives based on our short-term and long-term growth plans and provides financial information used by the Compensation Committee to make decisions with respect to incentive goals based on achievement of financial targets and related payouts.
Compensation Risk At the direction of the Compensation Committee, management conducts a comprehensive risk assessment of our compensation policies and practices and presents its findings to the Compensation Committee. The assessment includes a review of the risk areas within the Company’s compensation programs to ensure that there are no design flaws which motivate inappropriate or excessive risk taking. Management conducted this assessment of all compensation policies and practices for all employees, including the NEOs, and determined that the compensation programs are not reasonably likely to have a material adverse effect on the Company. During the review, several risk mitigating factors in our programs were noted, including: ⯀ | Our annual incentive program awards are capped to limit compensation in any given year; |
⯀ | Our equity incentive awards vest over several years, so while the potential compensation payable for equity incentive awards is tied directly to appreciation of our stock price, taking excessive risk for a short-term gain is discouraged because it would not maximize the value of equity incentive awards over the long-term; and |
⯀ | Our executive officers and directors are subject to a stock ownership policy with minimum stock holding requirements that aligns their interests with the interests of our stockholders. |
■ Our annual incentive program awards are capped to limit compensation in any given year;
■ Our equity incentive awards vest over several years, so while the potential compensation payable for equity incentive awards is tied directly to appreciation of our stock price, taking excessive risk for a short-term gain is discouraged because it would not maximize the value of equity incentive awards over the long-term; and
■ Our executive officers and directors are subject to a stock ownership policy with minimum stock holding requirements that aligns their interests with the interests of our stockholders.
Impact of Accounting and Tax Issues on Executive Compensation In general, Section 162(m) of the Internal Revenue Code ("(“162(m)"”) limits to $1 million the amount of annual compensation that we can deduct for federal income tax purposes with respect to each of our covered executive officers, as defined (including but not limited to our CEO, our CFO and our three other most highly compensated officers). While the Committee considers the tax consequences of compensation programs, including the 162(m) limitations, it will weigh those considerations against others in order to structure compensation in a manner that is in the best interest of the Company and its stockholders and to attract and retain senior talent.
The Committee also considers the accounting implications of significant compensation decisions, including decisions that relate to our equity incentive plans. If accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives. Components of Total Compensation Our executive compensation program combines both fixed and variable elements of compensation focusing on both annual and long-term incentives. The following charts show target total compensation for fiscal year 2023.
| | | 2024 Proxy Statement | | | 30 |
TABLE OF CONTENTS The compensation of our NEOs consists of five components, each designed to help achieve our compensation objectives and to contribute to a total compensation arrangement that is competitive, appropriately performance-based and valued by our NEOs, asNEOs. The purpose of each component of our NEOs’ compensation, along with the pay mix methodology used to determine target total compensation illustrated in the above charts, are described in the following table. | Base Salary | 2021 Proxy Statement | 27 |
| | | | | | Compensation Component | Purpose | Base Salary |
Designed to attract, retain and motivate highly-qualified executives by paying a competitive salary.
| | | Annualized base salary as of 12/30/2023. | | | Short-Term Incentive – Annual Incentive Plan (cash awards) | | | Designed to provide a performance-based cash reward to executives and key employees of the Company for contributing to the achievement of our short-term company goals.
| | | Based on an annualized target amount as a percentage of base pay.
• Incentives, if earned, are typically paid in Q1 following the performance year. | | | Long-Term Incentive Plan (stock (stock option and RSU awards)
| | | Designed to emphasize the goals of our equity compensation: (1) align each NEO’s financial interests with driving stockholder value; (2) focus the NEOs’ efforts on long-term financial performance of the Company; and (3) assist in the retention of our NEOs.
• Stock option awards - Generate value only when Company’s stock price appreciates above the stock price on the date of grant and aligns to interests of shareholders.
• RSU awards - Value of these awards increases if the Company’s stock price increases from stock price on the date of grant, and the value of these awards decreases if the stock price declines from stock price on the date of grant and aligns to interests of shareholders. | | | Based on 2023 annual grant value of long-term incentives.
• Grants awarded are comprised of 50% stock options and 50% RSUs. | | | Health and Welfare Programs and Perquisites | | | Designed to provide competitive levels of health and welfare protection and retirement and savings programs. | | | | | | Retirement and Post-Employment Arrangements | |
Information regarding the administration and the determination of amounts of each component is below.
A. Base Salary
Administration: Our CEO and our CHRO recommend NEO salary levels (other than for the CEO) to the Compensation Committee for approval. The Compensation Committee reviews the NEO salary recommendations and makes its recommendations to the full Board for approval. The Compensation Committee determines and makes CEO salary recommendations to the Board, other than the CEO, for approval. Determination of amounts: Base salary is generally targeted at the 50th percentile of the compensation peer group, although we also take into account factors such as individual scope of responsibility, years of experience, past | | | 2024 Proxy Statement | | | 31 |
TABLE OF CONTENTS and future contributions to our success and possible differences in compensation standards in our industry. We strive to be market competitive in an effort to attract, retain and motivate highly-talented executive officers. Each year the Compensation Committee may recommend to the Board and the Board may approve increases in base salary for NEOs. Annual salary increases are generally effective as of April 1 each year. During 2020, however, the Company implemented a freeze on the merit increase program. Also, as a result of the uncertainty of the impacts of the COVID-19 pandemic, the Company implemented temporary reductions to the salaries of the NEOs, as detailed below. As business conditions stabilized, the temporary salary reductions were eliminated, effective July 1, 2020.
The table below shows the NEO's 2020 annualized base salary amounts (prior tofor the temporary salary reductions), percentNEOs, effective as of the second quarter 2020 reduction,April 1, 2023, and the 2021 base salaryapproved to become effective on April 1, 2021.2024, are as follows: | | | | | | | | | | | | | | | Name | 2020 Annualized Base Salary | Second Quarter Reduction (%) | 2021 Annualized Base Salary | David W. Heinzmann | $901,600 | 25% | $928,648 | | Meenal A. Sethna | $467,460 | 20% | $481,484 | | Ryan K. Stafford | $515,783 | 20% | $531,256 | | Matthew J. Cole | $339,947 | 10% | $350,146 | | Deepak Nayar (1) | $367,979 | 10% | $437,750 | |
(1) Mr. Nayar's salary reduction was only in effect until May 1, 2020 when his salary increased from $367,979 to $425,000, in connection with the expansion of his responsibilities.
| David W. Heinzmann | | | $1,009,869 | | | $1,045,214 | | | Meenal A. Sethna | | | $582,595 | | | $623,377 | | | Ryan K. Stafford | | | $571,844 | | | $591,859 | | | Maggie Chu | | | $386,100 | | | $413,127 | | | Deepak Nayar | | | $500,786 | | | $520,817 | |
B.
| | | | | | | | | | 2021 Proxy Statement | 28Annual Incentive Plan |
B. Annual Incentive Plan
In January 2014, our Compensation Committee and our Board approved the Annual Incentive Plan and on April 25, 2014, our stockholders approved the Annual Incentive Plan ("AIP"(“AIP”). Administration: The Compensation Committee establishes, after (1) consulting with our CEO and CHRO, (2) reviewing the compensation peer group information and other information and advice of the independent compensation consultant and (3) discussing the financial goals and targets of the Company for the next fiscal year with our CEO and our CFO, the threshold, target and maximum amounts that may be awarded under the AIP to each NEO for the fiscal year. The annual target amounts are set as percentages of each NEO’s base salary and the maximum amounts for 20202023 were set at the percentages set forth below. Determination ofeligible AIPamounts: Our AIP is intended to compensate NEOs for their short-term contributions to the Company’s performance. Annual incentive awards to NEOs are granted based on the NEOs’ and the Company’s performances and are approved by the Compensation Committee and recommended to the full Board for approval. While one factor the Compensation Committee considers regarding the compensation of our NEOs is where that compensation falls in relation to the 50th percentile of the total compensation of our compensation peer group, it does not necessarily match our annual incentive awards against a certain percentile of the compensation peer group and it considers other factors, such as internal equity considerations, executive experience and the years of service of the NEO, in setting the targets as a percent of base salary. It sets the threshold, target and maximum amounts for the AIP so that, if earned, we pay sufficient total annual compensation to remain competitive. The maximum incentive amount that may be paid to an employee for a performance period has been limitedis subject to a cap under the AIP, which was $2,500,000. Effective January 1, 2024, the AIP was amended and restated to $2,500,000.
As(i) increase to $5,000,000 the maximum incentive amount that may be paid to an employee for a performance period, (ii) remove references to Section 162(m) given the elimination of the performance-based compensation exception as a result of the uncertaintyenactment of the impactsTax Cuts and Jobs Act of 2017 for tax years beginning on or after January 1, 2018, and make related adjustments to affected provisions, (iii) allow the Compensation Committee the discretion to adjust any awards upward, as well as downward, for any plan participant, including NEOs, and (iv) clarify that payments received under the AIP are subject to certain “clawback” rights in favor of the COVID-19 pandemic, in March 2020 the Company, suspended the 2020 AIP and in August 2020 the Company cancelled the 2020 AIP for all associates. Therefore, there were no payouts madeincluding pursuant to the 2020 AIP.Company’s clawback policy, which is described on page 36.Prior toThe following table summarizes the cancellation of the 2020 AIP, the following AIP opportunity percentages had been established for the NEOs for 2020:2023:
| David W. Heinzmann | | | 60.0% | | | 120.0% | | | 264.0% | | | Meenal A. Sethna | | | 40.0% | | | 80.0% | | | 176.0% | | | Ryan K. Stafford | | | 40.0% | | | 80.0% | | | 176.0% | | | Maggie Chu | | | 30.0% | | | 60.0% | | | 132.0% | | | Deepak Nayar | | | 40.0% | | | 80.0% | | | 176.0% | |
| | | | | | | | | | | | Name | 2020 AIP Target Opportunity (as a % of 2020 Base Salary) | Threshold | Target | Maximum (1) | David W. Heinzmann | 57.5% | 115% | 253% | Meenal A. Sethna | 40% | 80% | 176% | Ryan K. Stafford | 40% | 80% | 176% | Matthew J. Cole | 30% | 60% | 132% | Deepak Nayar | 35% | 70% | 154% |
| | | 2024 Proxy Statement | | | 32 |
(1) The
TABLE OF CONTENTS Under the 2023 AIP, the Compensation Committee established performance goals each with a maximum annual award percentage that could be paid to each NEO. For 2023, the NEOs were eligible to receive up to a maximum of 200% of their target annual incentive opportunities for each of the performance goals related to business operations have(payout range of 0% – 200%). The NEOs were eligible to receive up to a payout range from 0% - 200%maximum of target. The payout range300% for thetheir individual performance goal, which is weighted at 20% for each NEO was(payout range of 0% -– 300%). The Compensation Committee considered the performance of the Company’s base business operations when selecting the below financial performance metrics and relevant weighting. The Compensation Committee believes that these metrics reflect the performance of the Company’s ongoing operations with respect to its existing business.
2021
| David W. Heinzmann | | | 30% | | | 25% | | | 25% | | | 0% | | | 20% | | | Meenal A. Sethna | | | 10% | | | 40% | | | 30% | | | 0% | | | 20% | | | Ryan K. Stafford | | | 10% | | | 40% | | | 30% | | | 0% | | | 20% | | | Maggie Chu | | | 10% | | | 40% | | | 30% | | | 0% | | | 20% | | | Deepak Nayar | | | 0% | | | 10% | | | 10% | | | 60% | | | 20% | |
In January 2024, the Compensation Committee evaluated the Company’s performance against the AIP performance metrics and determined the following achievement results: | AIP Corporate Sales ($M) | | | $2,387 | | | $2,513 | | | $2,764 | | | $2,350 | | | 0% | | | AIP Earnings per Share (“AIP EPS”) | | | $13.49 | | | $14.20 | | | $16.90 | | | $11.75 | | | 0% | | | AIP Cash flow from Operations ($M) | | | $382 | | | $402 | | | $442 | | | $457 | | | 200% | | | Applicable Business Unit Metrics | | | (2) | | | (2) | | | (2) | | | (2) | | | (3) | |
(1)
| The performance metrics were determined as follows: |
• | | | AIP Corporate Sales – represents our 2023 net sales as reported in our audited financial statements adjusted to exclude the Western Automation acquisition. | • | | | AIP EPS – represents our 2023 AIP net income, as described below, divided by our diluted weighted-average shares and equivalent shares outstanding. “AIP net income” is calculated as our GAAP net income, as reported in our audited financial statements, excluding the after-tax impact of the following items: acquisition and integration costs; restructuring, impairment and other charges; non-operating foreign exchange gains and losses; the Western Automation acquisition; and certain other significant and unusual items. | • | | | AIP Cash flow from Operations – represents our 2023 cash flow from operations, as reported in our audited financial statements. |
(2)
| The business unit target goals for Mr. Nayar were set to be attainable with good performance. |
(3)
| Based on the actual performance of his business unit, Mr. Nayar’s percentage achievement for the electronics net sales metric was 0% and the electronics operating income metric was 0%. |
The Compensation Committee also reviews the individual performance of each NEO. These reviews are qualitative in nature and require subjective determinations by the Compensation Committee. The Compensation Committee receives input from the CEO and CHRO with respect to each NEO’s performance and considers factors generally related to (i) overall Company business performance, (ii) organization strength and talent pipeline development within the Company, (iii) improved results and maturity of our ESG program, (iv) strategic long-term growth including the integration of newly acquired companies, and (v) other matters specific to each NEO’s scope of responsibility. Our 2023 NEO evaluation result reflects recognition of current year actions taken to align the | | | 2024 Proxy Statement | | | 33 |
TABLE OF CONTENTS Company’s operations with the macroeconomic environment and the advancement of several long-term strategic initiatives. The Compensation Committee determined the achievement of the individual performance goals for each of the NEOs as follows: Mr. Heinzmann – 121 %, Ms. Sethna - 120%, Mr. Stafford - 120%, Ms. Chu - 120%, and Mr. Nayar - 125%. The Compensation Committee also received recommendations from Mr. Heinzmann related to the 2023 AIP award amounts for the other NEOs. It received input from its independent compensation consultant with respect to the appropriate 2023 AIP award amount for Mr. Heinzmann. After consideration of the performance metrics described above and the recommendations from Mr. Heinzmann and input from the independent compensation consultant, the Compensation Committee approved and recommended to the Board, and the Board approved, the following 2023 AIP awards to the NEOs: | David W. Heinzmann | | | 120% | | | $1,211,843 | | | $2,666,054 | | | 74.3% | | | $900,000 | | | Meenal A. Sethna | | | 80% | | | $466,076 | | | $1,025,367 | | | 84.0% | | | $391,504 | | | Ryan K. Stafford | | | 80% | | | $457,475 | | | $1,006,445 | | | 84.0% | | | $384,279 | | | Maggie Chu | | | 60% | | | $231,660 | | | $509,652 | | | 84.0% | | | $194,594 | | | Deepak Nayar | | | 80% | | | $400,629 | | | $881,383 | | | 45.0% | | | $180,283 | |
(1)
| For AIP purposes, incentive opportunities are based on our NEO’s 2023 annualized base salary. |
2024 Annual Incentive Plan: At itsthe January 20212024 Compensation Committee meeting, the Compensation Committee approved the annual incentive plan structure along withand performance goal weights and established the NEOs’ target annual incentive plan opportunity percentages for the 20212024 AIP. TheSubsequently, in February 2024, the Committee also established 2024 financial performance goals under the 20212024 AIP will be established atfor Messrs. Heinzmann, Stafford, and Nayar and Mses. Sethna and Chu. The goals were set in commensurate with budget considering a later date.challenging yet attainable growth year and the dynamic performance of our end markets, and they are based on the same performance metrics and weighting as in 2023. The following table summarizes each NEO'sNEO’s AIP target opportunity, as a percentage of base salary for the NEOs: | | | | | | | | | | | | Name | 2021 AIP Opportunity (as a % of 2021 Base Salary) | Threshold | Target | Maximum | David W. Heinzmann | 57.5% | 115% | 253% | Meenal A. Sethna | 40% | 80% | 176% | Ryan K. Stafford | 40% | 80% | 176% | Matthew J. Cole | 30% | 60% | 132% | Deepak Nayar | 35% | 70% | 154% |
| David W. Heinzmann | | | 62.5% | | | 125% | | | 275% | | | Meenal A. Sethna | | | 42.5% | | | 85% | | | 187% | | | Ryan K. Stafford | | | 42.5% | | | 85% | | | 187% | | | Maggie Chu | | | 30.0% | | | 60% | | | 132% | | | Deepak Nayar | | | 40.0% | | | 80% | | | 176% | |
C.
| | | | | | | | | | 2021 Proxy Statement | 29Long-Term Incentive Compensation |
C. Long-Term Incentive Compensation
Consistent with prior years’ practice, in 20202023 the Compensation Committee awarded a combination of two types of equity awards under the Long-Term Incentive Plan to our NEOs: stock option awards and RSUs. The stock options vest one-third annually over a three-year vesting period and have an exercise price equal to the fair market value of our common stock on the date of grant. The RSUs also vest one-third annually over a three-year vesting period. Administration: The Compensation Committee reviews the compensation peer group information, the advice of the independent compensation consultant and, for NEOs other than the CEO, the recommendation of our CEO and our CHRO with respect to the NEOs’ long-term incentive grants of stock options and RSUs. The Compensation Committee makes recommendations to the Board, other than the CEO, for the grant of stock options and RSUs to the NEOs. Determination ofamounts: We target total equity compensation awards at the 50th percentile of our compensation peer group, although we also take into account other factors, such as years of experience and internal pay equity considerations, when determining total equity compensation. In 2020,2023, based on a valuation performed by the independent compensation consultant, the Compensation Committee determined that 50% of the value of the equity awards would be made in stock options and 50% would be made in RSUs.
| | | 2024 Proxy Statement | | | 34 |
TABLE OF CONTENTS As part of the annual grant of long-term compensation in April, the restricted stock unit awards and stock options granted in 20202023 to each NEO are set forth below. | | | | | | | | | | | | | | | | | | Name | RSU Award | RSU Vesting Schedule (1) | Stock Option Award | Option Vesting Schedule (1) | Option Grant Price | David W. Heinzmann | 12,028 | 3-year vest | 42,711 | 3-year vest | $132.08 | Meenal A. Sethna | 4,770 | 3-year vest | 16,938 | 3-year vest | $132.08 | Ryan K. Stafford | 4,742 | 3-year vest | 16,839 | 3-year vest | $132.08 | Matthew J. Cole | 1,331 | 3-year vest | 4,728 | 3-year vest | $132.08 | Deepak Nayar | 3,019 | 3-year vest | 10,720 | 3-year vest | $132.08 |
(1)2020 grant of RSUs and Options vest in annual installments of 33% on each of the first three anniversaries of the grant date.
| David W. Heinzmann | | | 9,708 | | | 3-year vest | | | 29,800 | | | 3-year vest | | | $240.76 | | | Meenal A. Sethna | | | 3,344 | | | 3-year vest | | | 10,265 | | | 3-year vest | | | $240.76 | | | Ryan K. Stafford | | | 3,039 | | | 3-year vest | | | 9,329 | | | 3-year vest | | | $240.76 | | | Maggie Chu | | | 1,395 | | | 3-year vest | | | 4,283 | | | 3-year vest | | | $240.76 | | | Deepak Nayar | | | 2,236 | | | 3-year vest | | | 6,862 | | | 3-year vest | | | $240.76 | |
(1)
| 2023 grant of RSUs and Options vest in annual installments of 33% on each of the first three anniversaries of the grant date. |
Stock Ownership Policy As discussed on page 15,19, the Company maintains a stock ownership policy applicable to all executive officers and directors that is reviewed annually by the Compensation Committee. The table below describes the ownership requirements for each NEO, and their progress towards the ownership requirements, as of February 25, 2021.27, 2024. | | | | | | | | | Name | Number of Shares Required (1) | Number of Shares Owned (2) | David W. Heinzmann | 19,700 | 53,943 | Meenal A. Sethna | 6,600 | 15,805 | Ryan K. Stafford | 7,500 | 21,225 | Matthew J. Cole | 3,300 | 4,275 | Deepak Nayar | 3,500 | 8,505 |
(1)Pursuant to the stock ownership policy, the Compensation Committee may adjust the share ownership requirements in the event of a significant increase in the price of the Company’s common stock. The current share ownership requirements are based on the 30-business-day average stock price for the period of December 4, 2017 through January 17, 2018, of $199.29 per share and the NEO's annualized base salaries for 2018. At the time the share ownership requirements are established, the Compensation Committee uses a multiple of the NEO's base salary to calculate the minimum share requirement, as described on page 15.
(2)Includes direct and indirect ownership of beneficially owned shares and unvested restricted stock/units.
| David W. Heinzmann | | | 15,900 | | | 52,156 | | | Meenal A. Sethna | | | 5,300 | | | 19,633 | | | Ryan K. Stafford | | | 5,500 | | | 24,155 | | | Maggie Chu | | | 2,300 | | | 4,608 | | | Deepak Nayar | | | 3,200 | | | 4,264 | |
(1)
| | | | | | | | | | Pursuant to the stock ownership policy, the Compensation Committee may adjust the share ownership requirements in the event of a significant increase in the price of the Company’s common stock. The current share ownership requirements are based on the 30-business-day average stock price for the period of December 13, 2021, Proxy Statement | 30through January 25, 2022, of $301.35 per share and the NEO’s annualized base salaries for 2022. At the time the share ownership requirements are established, the Compensation Committee uses a multiple of the NEO’s base salary to calculate the minimum share requirement, as described on page 19. |
D. Health and Welfare ProgramsandPerquisites
(2)
| Includes direct and indirect ownership of beneficially owned shares and unvested restricted stock/units. |
D.
| Health and Welfare Programs and Perquisites |
Health and Welfare Programs Our NEOs participate in the same health and welfare programs designed for all of our full-time U.S. employees. The program includes partial reimbursement of gym membership dues, wellness bonus, group health, dental, disability, business travel accident, life and accidental death and dismemberment (AD&D) coverage. Our NEOs are also provided with an increased amount of life and AD&D insurance in order to provide a targeted level of coverage equal to the lesser of three times annual base salary or $1,000,000. These programs are important components of our total compensation program, and we provide them to remain competitive. Perquisites Our NEOs are provided with the opportunity to receive executive physicals and financial planning services on an annual basis. The executive physical program provides approximately $5,000$6,000 in services per NEO annually. The financial planning program provides up to $12,000 per year of financial planning services per NEO annually. The Company also pays for limited expenses related to spouse travel on certain business trips. We provide these benefits to help our NEOs efficiently manage their time and financial affairs and to allow them to stay focused on business issues. Amounts and types of perquisites are included in the 20202023 All Other Compensation Table on page 35.39.
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E. Retirement andPost-EmploymentArrangements
TABLE OF CONTENTS E.
| Retirement and Post-Employment Arrangements |
Retirement Plans We provide retirement benefits to our U.S. employees and NEOs through the following plans that are intended to be a component of a competitive compensation package. Littelfuse, Inc. 401(k) Retirement and Savings Plan NEOs may elect to participate in the Littelfuse, Inc. 401(k) Retirement and Savings Plan ("(“401(k) Plan"Plan”) on the same basis as all other U.S. employees. The 401(k) Plan provides employees the opportunity to save for retirement on a tax-favored basis. The Company amended and restated the 401(k) Plan, effective as of January 1, 2019.2022. The Company provides discretionary Company contributions equal to 2% of a participant’s annual eligible pay. This is in addition to the existing Company matching contributions, which provide a dollar-for-dollar match on participant salary deferrals up to 4% of a participant’s annual eligible pay (subject to IRS compensation limits).
Littelfuse, Inc. Supplemental Retirement and Savings Plan The Littelfuse, Inc. Supplemental Retirement and Savings Plan (the "Supplemental Plan"“Supplemental Plan”) is a non-qualified retirement plan that is intended to provide supplemental retirement income benefits to employees whose benefits under our tax-qualified 401(k) plan are limited by the application of Internal Revenue Code Section 415, which includes our NEOs. Participants can defer a portion of their annual compensation to the Supplemental Plan. The Company provides a matching contribution designed to ensure that participants receive a combined match under the Supplemental Plan and the Company’s 401(k) Plan on the first 4% of their annual compensation.compensation and on the 2% discretionary contribution, if applicable. Post-EmploymentArrangements Change in Control Agreements Each of the NEOs has entered into a change of control agreement with the Company that provides certain payments and benefits on termination of employment in connection with a change of control of the Company. Additional information including the terms of our NEO’s change of control agreements is included on page 41.45.
Employment Contracts We have not entered into an employment agreement with any NEO, other than (i) a Letter Agreement with Mr. Heinzmann, effective January 1, 2017 in connection with his assumption of the President and Chief Executive Officer role.role, and (ii) an Employment Offer Letter to Ms. Chu, dated April 27, 2021, as accepted by Ms. Chu on April 28, 2021, in connection with the Company’s employment of Ms. Chu as Senior Vice President and Chief Human Resources Officer.
Pursuant to theMr. Heinzmann’s Letter Agreement, Mr. Heinzmann’s base salary was $700,000 for 2017 and his target bonus was set at 90% of base salary. In addition, the Letter Agreement provided for the grant of restricted stock units having a grant date value of $1,050,000, that vestvested entirely on the third anniversary of the grant. Pursuant to the Employment Offer Letter with Ms. Chu, her annualized base salary was set at $325,000 for 2021 and her target bonus was set at 60% of base salary. In addition, the Employment Offer Letter provided for (i) the grant of restricted stock units having an approximate equivalent value of $662,500 based on the closing price of Littelfuse common stock on the date of Ms. Chu’s hire, and (ii) the grant of options having an approximate equivalent value of $162,500, each of which vest in three annual installments beginning one year from the grant date. The Company also entered into a new change of control agreement with Mr. Heinzmann,Ms. Chu, consistent with the terms described on page 41.45.
Other 2020 Compensation Actions
Retention Awards
In April 2020,compliance with NASDAQ listing requirements, the Board grantedadopted a special RSU awardClawback Policy in October 2023 to Mr. Nayarallow the Company to recover incentive-based compensation paid to executive officers in connection with his expanded responsibilities. Additionally, when business conditions stabilized in July 2020 resulting in increased demands on our executive team, the Compensation Committee granted long-term retention stock option awards, detailed below,event that the Company is required to certain NEOs.
| | | | | | | | | | | | | | | | | | Name | RSU Award | RSU Vesting Schedule (1) | Stock Option Award | Option Vesting Schedule (1) | Option Grant Price | Meenal A. Sethna | — | — | 11,953 | 3-year cliff vest | $177.65 | Matthew J. Cole | — | — | 6,519 | 3-year cliff vest | $166.63 | Deepak Nayar | 3,785 | 3-year cliff vest | 2,717 | 3-year cliff vest | $166.63 |
(1) The restricted stock units and stock option awards were granted pursuantprepare an accounting restatement due to the Long-Term Incentive Plan, and vest in full after three years.
Discretionary Bonus Payouts
In recognitionmaterial noncompliance of the diligent efforts of our NEOs and the Company'sCompany with any financial performance in the difficult and uncertain environment throughout 2020, as further described on page 23, in January 2021 the Compensation Committee approved discretionary bonus payments to the NEOs as detailed below. This bonus payout amount represents 25% of the target award that would have been payablereporting requirement under the 2020 AIP, had it not been cancelled.
| | | | | | Name | Discretionary Bonus Payout
($) | David W. Heinzmann | $259,210 | Meenal A. Sethna | $93,492 | Ryan K. Stafford | $103,157 | Matthew J. Cole | $50,992 | Deepak Nayar | $74,375 |
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 32 | | 36 |
TABLE OF CONTENTS COMPENSATION COMMITTEE REPORT To the Board of Directors of Littelfuse, Inc.: We have reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on the review and discussion referred to above, we recommend to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in this Proxy Statement and in our Annual Report on Form 10-K for the year ended December 26, 2020.30, 2023. | | | | | Compensation Committee: | | Compensation Committee: | | | | | | Tzau-Jin Chung (Chairman) | | | | Kristina A. Cerniglia | | | | Cary T. Fu | | | | William P. Noglows |
The foregoing report is not deemed to be "soliciting material"“soliciting material” or to be "filed"“filed” with the Securities and Exchange Commission or subject to the Securities and Exchange Commission’s proxy rules or the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. | | | | | | | | | | 2021 | | 2024 Proxy Statement | 33 | | 37 |
TABLE OF CONTENTS The following table sets forth compensation information for our NEOs in fiscal years 2020, 2019,2023, 2022, and 2018.2021.
20202023 Summary Compensation Table | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | David W. Heinzmann President and Chief Executive Officer | 2020 | $845,250 | $259,210 | $1,543,674 | $1,340,271 | $0 | $76,656 | $4,065,061 | 2019 | $872,200 | $0 | $1,490,299 | $1,233,045 | $138,846 | $185,754 | $3,920,145 | 2018 | $763,000 | $0 | $1,279,067 | $1,042,127 | $1,646,322 | $146,174 | $4,876,689 | | | | | | | | | Meenal A. Sethna Executive Vice President and Chief Financial Officer | 2020 | $444,087 | $93,892 | $612,182 | $1,075,256 | $0 | $48,585 | $2,274,002 | 2019 | $460,845 | $600 | $590,910 | $488,970 | $49,083 | $70,414 | $1,660,822 | 2018 | $429,188 | $850 | $507,151 | $413,263 | $586,221 | $66,849 | $2,003,521 | | | | | | | | | Ryan K. Stafford Executive Vice President, Chief Legal and Human Resources Officer and Corporate Secretary | 2020 | $489,994 | $103,357 | $608,588 | $528,408 | $0 | $51,062 | $1,781,409 | 2019 | $510,823 | $200 | $587,580 | $486,112 | $54,157 | $75,982 | $1,714,854 | 2018 | $487,834 | $0 | $504,306 | $410,867 | $659,260 | $73,950 | $2,136,217 | | | | | | | | | Matthew J. Cole Senior Vice President, eMobility and Corporate Strategy (7) | 2020 | $331,449 | $51,192 | $170,821 | $425,944 | $0 | $26,659 | $1,006,064 | | | | | | | | | | | | | | | | | Deepak Nayar Senior Vice President and General Manager Electronics Business (8) | 2020 | $402,926 | $76,739 | $866,261 | $452,083 | $0 | $28,738 | $1,826,747 | 2019 | $374,788 | $0 | $341,580 | $282,589 | $52,436 | $35,106 | $1,086,498 | 2018 | $366,428 | $0 | $306,491 | $249,675 | $386,795 | $35,014 | $1,344,402 |
(1) Base salary includes compensation deferred under the 401(k) Plan and the Supplemental Plan. The amounts also include a 10% - 25% reduction in base salary from April 1, 2020 through June 30, 2020 in connection with the Company's cost-cutting measures related to the COVID-19 pandemic as described on page 23.
(2) For fiscal year 2020, represents discretionary bonus payments made to NEOs as described on page 32. For Messrs Stafford and Cole and Ms. Sethna, amounts also include discretionary bonuses earned in connection with the Company's wellness initiatives, in the amounts of $200, $200, and $400, respectively. For Mr. Nayar, amount includes discretionary bonus earned in connection with our patent program in the amount of $2,364. For fiscal years 2019 and 2018, represents discretionary bonuses earned in connection with the Company's wellness initiatives.
(3) Represents the full grant date fair value of RSUs for fiscal years 2020, 2019 and 2018, in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our 2020 Annual Report on Form 10-K.
(4) Represents the full grant date fair value of stock option awards for fiscal years 2020, 2019 and 2018, in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our 2020 Annual Report on Form 10-K.
(5) Represents payouts for performance under the Annual Incentive Plan. See pages 29 - | David W. Heinzmann
President and Chief
Executive Officer | | | 2023 | | | $997,691 | | | $0 | | | $2,291,379 | | | $2,304,434 | | | $900,000 | | | $148,002 | | | $6,641,506 | | | 2022 | | | $953,025 | | | $0 | | | $1,960,305 | | | $1,984,294 | | | $1,873,523 | | | $161,399 | | | $6,932,546 | | | 2021 | | | $921,885 | | | $0 | | | $1,715,931 | | | $1,396,152 | | | $2,056,862 | | | $79,301 | | | $6,170,131 | | | Meenal A. Sethna
Executive Vice
President and Chief
Financial Officer | | | 2023 | | | $569,355 | | | $641 | | | $789,284 | | | $793,792 | | | $391,504 | | | $83,949 | | | $2,628,525 | | | 2022 | | | $517,595 | | | $625 | | | $682,093 | | | $690,385 | | | $759,704 | | | $80,572 | | | $2,730,974 | | | 2021 | | | $477,978 | | | $200 | | | $618,622 | | | $503,293 | | | $751,115 | | | $51,783 | | | $2,402,991 | | | Ryan K. Stafford
Executive Vice
President, Mergers &
Acquisitions, Chief
Legal Officer and
Corporate Secretary (7) | | | 2023 | | | $566,346 | | | $0 | | | $717,295 | | | $721,412 | | | $384,279 | | | $82,479 | | | $2,471,811 | | | 2022 | | | $545,202 | | | $0 | | | $661,168 | | | $669,127 | | | $788,705 | | | $67,275 | | | $2,731,477 | | | 2021 | | | $527,388 | | | $0 | | | $912,752 | | | $742,604 | | | $816,010 | | | $55,629 | | | $3,054,383 | | | Maggie Chu
Senior Vice President
and Chief Human
Resources Officer (8) | | | 2023 | | | $377,324 | | | $665 | | | $329,262 | | | $331,204 | | | $194,594 | | | $51,059 | | | $1,284,108 | | | 2022 | | | $344,500 | | | $0 | | | $280,206 | | | $283,672 | | | $377,606 | | | $47,195 | | | $1,333,179 | | | 2021 | | | $189,583 | | | $110,000 | | | $676,145 | | | $149,649 | | | $219,511 | | | $27,144 | | | $1,372,032 | | | Deepak Nayar
Senior Vice President
and General Manager,
Electronics Business | | | 2023 | | | $495,971 | | | $0 | | | $527,763 | | | $530,638 | | | $180,283 | | | $59,865 | | | $1,794,520 | | | 2022 | | | $470,582 | | | $366 | | | $520,838 | | | $527,221 | | | $722,673 | | | $38,425 | | | $2,280,105 | | | 2021 | | | $434,562 | | | $1,575 | | | $391,556 | | | $318,587 | | | $612,850 | | | $32,126 | | | $1,791,256 | |
(1)
| Base salary includes compensation deferred under the 401(k) Plan and the Supplemental Plan. |
(2)
| For fiscal year 2023, represents discretionary payments made to NEOs. For Mses. Sethna and Chu, amounts include discretionary bonuses earned in connection with the Company’s wellness initiatives, in the amounts of $641 and $665, respectively. For fiscal year 2022, represents discretionary bonus earned in connection with the Company’s wellness initiatives in the amount of $625 for Ms. Sethna. For Mr. Nayar, amount includes discretionary bonus earned in connection with our patent program in the amount of $366. For fiscal year 2021, represents discretionary bonus earned in connection with the Company’s wellness initiatives in the amount of $200 for Ms. Sethna. For Ms. Chu, bonus amount earned represents a cash sign-on payment included as part of her employment offer letter. For Mr. Nayar, amount includes discretionary bonus earned in connection with our patent program in the amount of $1,575. |
(3)
| Represents the full grant date fair value of RSUs for fiscal years 2023, 2022, and 2021, in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. |
(4)
| Represents the full grant date fair value of stock option awards for fiscal years 2023, 2022, and 2021, in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023. |
(5)
| Represents payouts for performance under the Annual Incentive Plan. See pages 32-34 for information on how amounts were determined. (6) The amounts shown are detailed in the supplemental "All Other Compensation" table below.
(7) Mr. Cole was appointed as Senior Vice President, eMobility and Corporate Strategy in January 2021 and previously served as Senior Vice President, Business Development and Strategy.
(8) Mr. Nayar was appointed as Senior Vice President and General Manager Electronics Business in May 2020 and previously served as Senior Vice President and General Manager, Electronics and Industrial Business Unit.
|
(6)
| The amounts shown are detailed in the supplemental “All Other Compensation” table below. The amount of each NEO’s supplemental plan company matching contribution has been updated to reflect a correction that was made for the fiscal year ended December 31, 2022. Each NEO received the following corrected company |
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2020
TABLE OF CONTENTS matching contribution attributable to the 2022 fiscal year: Mr. Heinzmann, $121,157 (previously reported as $38,882); Ms. Sethna, $42,801 (previously reported as $12,756); Mr. Stafford, $30,446 (previously reported as $14,412); Ms. Chu, $11,150 (previously reported as $2,370); and Mr. Nayar, $18,103 (previously reported as $9,957). (7)
| Mr. Stafford was appointed as Executive Vice President, Mergers & Acquisitions, Chief Legal Officer and Corporate Secretary in June 2021 and previously served as Executive Vice President, Chief Legal and Human Resources Officer and Corporate Secretary. |
(8)
| Ms. Chu was hired as Senior Vice President and Chief Human Resources Officer in June 2021. |
2023 All Other Compensation Table The table below provides additional information about the amounts that appear in the "All“All Other Compensation"Compensation” column in the Summary Compensation Table above. For additional information regarding perquisites and health and welfare programs, refer to page 31.35. | | | | | | | | | | | | | | | | | | NEO | 401(k) Plan Company Matching Contributions ($) | Supplemental Plan Company Matching Contributions ($) | Miscellaneous ($) | Total All Other Compensation ($) | David W. Heinzmann | $17,100 | $39,169 | $20,387 | (1) | $76,656 | Meenal A. Sethna | $17,100 | $11,509 | $19,976 | (2) | $48,585 | Ryan K. Stafford | $17,100 | $14,466 | $19,496 | (3) | $51,062 | Matthew J. Cole | $17,100 | $4,964 | $4,595 | (4) | $26,659 | Deepak Nayar | $17,100 | $9,268 | $2,370 | (5) | $28,738 |
(1)The amount reported for Mr. Heinzmann includes the cost of: an executive physical ($4,770); tax and financial planning ($12,000); spouse travel ($1,997); and life and AD&D insurance ($1,620).
(2)The amount reported for Ms. Sethna includes the cost of: partial reimbursement of health club membership dues generally available to U.S. employees ($397); an executive physical ($5,959); life and AD&D insurance ($1,620); and tax and financial planning ($12,000).
(3)The amount reported for Mr. Stafford includes the cost of: an executive physical ($5,876); life and AD&D insurance ($1,620); and tax and financial planning ($12,000).
(4)The amount reported for Mr. Cole includes the cost of: life and AD&D insurance ($1,620); and tax and financial planning ($2,975).
(5)The amount reported for Mr. Nayar includes the cost of: life and AD&D insurance ($1,620) and tax and financial planning ($750).
| David W. Heinzmann | | | $19,800 | | | $115,002 | | | $13,200 (1) | | | $148,002 | | | Meenal A. Sethna | | | $19,800 | | | $44,749 | | | $19,400 (2) | | | $83,949 | | | Ryan K. Stafford | | | $19,800 | | | $45,729 | | | $16,950 (3) | | | $82,479 | | | Maggie Chu | | | $19,800 | | | $17,944 | | | $13,315 (4) | | | $51,059 | | | Deepak Nayar | | | $19,800 | | | $38,865 | | | $1,200 (5) | | | $59,865 | |
(1)
| The amount reported for Mr. Heinzmann includes the cost of: tax and financial planning ($12,000); and life and AD&D insurance ($1,200). |
(2)
| The amount reported for Ms. Sethna includes the cost of: partial reimbursement of health club membership dues generally available to U.S. employees ($400); an executive physical ($5,800); life and AD&D insurance ($1,200); and tax and financial planning ($12,000). |
(3)
| The amount reported for Mr. Stafford includes the cost of: an executive physical ($3,750); life and AD&D insurance ($1,200); and tax and financial planning ($12,000). |
(4)
| The amount reported for Ms. Chu includes the cost of: partial reimbursement of health club membership dues generally available to U.S. employees ($400); life and AD&D insurance ($1,200); and tax and financial planning ($11,715). |
(5)
| The amount reported for Mr. Nayar includes the cost of: life and AD&D insurance ($1,200). |
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TABLE OF CONTENTS Grants of Plan-Based Awards in 2020 2023
The following table sets forth plan-based awards granted to our NEOs in 2020.2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Type of Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/sh)(1) | Grant Date Fair Value of Stock and Option Awards (2) | Threshold ($) | Target ($) | Maximum ($) | David W. Heinzmann | RSUs | 4/23/20 | - | - | - | 12,028 | | (4) | | - | | - | $1,543,674 | Options | 4/23/20 | - | - | - | - | | 42,711 | | (6) | | $132.08 | $1,340,271 | Annual Cash (3) | - | $0 | $0 | $0 | - | | - | | - | - | Meenal A. Sethna | RSUs | 4/23/20 | - | - | - | 4,770 | | (4) | | - | | - | $612,182 | Options | 4/23/20 | - | - | - | - | | 16,938 | | (6) | | $132.08 | $531,514 | Options | 7/31/20 | - | - | - | | | 11,953 | | (7) | | $177.65 | $543,742 | Annual Cash (3) | - | $0 | $0 | $0 | - | | - | | - | - | Ryan K. Stafford | RSUs | 4/23/20 | - | - | - | 4,742 | | (4) | | - | | - | $608,588 | Options | 4/23/20 | - | - | - | - | | 16,839 | | (6) | | $132.08 | $528,408 | Annual Cash (3) | - | $0 | $0 | $0 | - | | - | | - | - | Matthew J. Cole | RSUs | 4/23/20 | - | - | - | 1,331 | | (4) | | - | | - | $170,821 | Options | 4/23/20 | - | - | - | - | | 4,728 | | (6) | | $132.08 | $148,365 | Options | 7/10/20 | - | - | - | | | 6,519 | | (7) | | $166.63 | $277,579 | Annual Cash (3) | - | $0 | $0 | $0 | - | | - | | - | - | Deepak Nayar | RSUs | 4/23/20 | - | - | - | 3,019 | | (4) | | - | | - | $387,458 | RSUs | 4/23/20 | - | - | - | 3,785 | | (5) | | | | | $478,803 | Options | 4/23/20 | - | - | - | | | 10,720 | | (6) | | $132.08 | $336,394 | Options | 7/10/20 | - | - | - | - | | 2,717 | | (7) | | $166.63 | $115,690 | Annual Cash (3) | - | $0 | $0 | $0 | - | | - | | - | - |
| David W. Heinzmann | | | RSUs | | | 4/27/23 | | | – | | | – | | | – | | | 9,708(4) | | | – | | | – | | | $2,291,379 | | | Options | | | 4/27/23 | | | – | | | – | | | – | | | – | | | 29,800(5) | | | $240.76 | | | $2,304,434 | | | Annual Cash (3) | | | – | | | $605,921 | | | $1,211,843 | | | $2,666,054 | | | – | | | – | | | – | | | – | | | Meenal A. Sethna | | | RSUs | | | 4/27/23 | | | – | | | – | | | – | | | 3,344(4) | | | – | | | – | | | $789,284 | | | Options | | | 4/27/23 | | | – | | | – | | | – | | | – | | | 10,265(5) | | | $240.76 | | | $793,792 | | | Annual Cash (3) | | | – | | | $233,038 | | | $466,076 | | | $1,025,367 | | | – | | | – | | | – | | | – | | | Ryan K. Stafford | | | RSUs | | | 4/27/23 | | | – | | | – | | | – | | | 3,039(4) | | | – | | | – | | | $717,295 | | | Options | | | 4/27/23 | | | – | | | – | | | – | | | – | | | 9,329(5) | | | $240.76 | | | $721,412 | | | Annual Cash (3) | | | – | | | $228,738 | | | $457,475 | | | $1,006,445 | | | – | | | – | | | – | | | – | | | Maggie Chu | | | RSUs | | | 4/27/23 | | | – | | | – | | | – | | | 1,395(4) | | | – | | | – | | | $329,262 | | | Options | | | 4/27/23 | | | – | | | – | | | – | | | – | | | 4,283(5) | | | $240.76 | | | $331,204 | | | Annual Cash (3) | | | – | | | $115,830 | | | $231,660 | | | $509,652 | | | – | | | – | | | – | | | – | | | Deepak Nayar | | | RSUs | | | 4/27/23 | | | – | | | – | | | – | | | 2,236(4) | | | – | | | – | | | $527,763 | | | Options | | | 4/27/23 | | | – | | | – | | | – | | | – | | | 6,862(5) | | | $240.76 | | | $530,638 | | | Annual Cash (3) | | | – | | | $200,314 | | | $400,629 | | | $881,383 | | | – | | | – | | | – | | | – | |
(1)
| The exercise price shown for individual options is the fair market value of the Company’s common stock on the date of grant (determined based on the closing stock price on that date reported by NASDAQ). |
(2)
| Represents the full grant date fair value of 2023 awards calculated in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our 2023 Annual Report on Form 10-K. There can be no assurance that amounts shown under the Grant Date Fair Value of Stock and Option Awards column will ever be realized by the NEOs. |
(3)
| These amounts represent 2023 annual incentive cash awards granted under the Annual Incentive Plan. The actual 2023 annual incentive cash award achievements were determined by the Compensation Committee and approved by the full Board in January 2024 and are reflected in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column. Refer to pages 32–34 for additional information concerning these awards. |
(4)
| Represents the 2023 annual grant of RSUs awarded under the Long-Term Plan that typically vest annually in installments of 33% on each anniversary of the grant date such that the RSUs are fully vested on or after three years from the date of grant. Refer to page 34-35 for additional information concerning these awards. |
(5)
| Reflects the 2023 award of stock options under the Long-Term Incentive Plan. The underlying option awards typically vest in installments of 33% on each anniversary of the date of grant, such that options are fully exercisable on or after three years from the date of grant. Refer to page 34-35 for additional information concerning these awards. |
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(1) The exercise price shown for individual options is the fair market value of the Company’s common stock on the date of grant (determined based on the closing stock price on that date reported by NASDAQ).
(2) Represents the full grant date fair value of 2020 awards calculated in accordance with FASB ASC Topic 718, based on assumptions described in Note 12 to our audited financial statements included in our 2020 Annual Report on Form 10-K. There can be no assurance that amounts shown under the Grant Date Fair Value of Stock and Option Awards column will ever be realized by the NEOs.
(3)As a result of the COVID-19 pandemic, the Company cancelled the 2020 AIP for all associates. Refer to page 23 for additional information.
(4)Represents the 2020 annual grant of RSUs awarded under the Long-Term Plan that typically vest annually in installments of 33% on each anniversary of the grant date such that the RSUs are fully vested on or after three years from the date of grant. Refer to page 30 for additional information concerning these awards.
(5) Represents special one-time retention grant of RSUs awarded under the Long-Term Plan that will cliff vest on the third anniversary from the grant date. Refer to page 32 for additional information concerning these awards.
(6)Reflects the 2020 award of stock options under the Long Term Incentive Plan. The underlying option awards typically vest in installments of 33% on each anniversary of the date of grant, such that options are fully exercisable on or after three years from the date of grant. Refer to page 30 for additional information concerning these awards.
TABLE OF CONTENTS (7) Represents special one-time retention grant of Options awarded under the Long-Term Plan that will cliff vest on the third anniversary from the grant date. Refer to page 32 for additional information concerning these awards.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
See discussion of information presented in the Summary Compensation Table and Grants of Plan-Based Awards Table in the Compensation Discussion and Analysis starting on page 23.26
Outstanding Equity Awards at 20202023 Fiscal Year-End
The following table provides information regarding the outstanding equity awards held by each of the NEOs as of December 26, 2020.30, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | Name | Date of Grant | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Option Exercise Price ($)(1) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Exercisable | Unexercisable | David W. Heinzmann | 4/22/16 | 17,004 | | 0 | | $120.15 | 4/22/23 | — | | — | | 4/28/17 | 24,066 | 0 | | $154.15 | 4/28/24 | — | | — | | 4/27/18 | 15,374 | 7,687 | (3) | | $192.59 | 4/27/25 | 2,248 | $565,732 | 4/26/19 | 8,630 | 17,258 | (4) | | $199.24 | 4/26/26 | 5,072 | $1,276,420 | 4/23/20 | 0 | 42,711 | (5) | | $132.08 | 4/23/27 | 12,028 | $3,026,966 | Meenal A. Sethna | 4/22/16 | 3,621 | 0 | | $120.15 | 4/22/23 | — | | — | | 4/28/17 | 6,878 | 0 | | $154.15 | 4/28/24 | — | | — | | 4/27/18 | 6,097 | 3,048 | (3) | | $192.59 | 4/27/25 | 891 | $224,229 | 4/26/19 | 3,422 | 6,844 | (4) | | $199.24 | 4/26/26 | 2,011 | $506,088 | 4/23/20 | 0 | 16,938 | (5) | | $132.08 | 4/23/27 | 4,770 | $1,200,418 | 7/31/20 | 0 | 11,953 | (6) | | $177.65 | 7/31/27 | — | | — | | Ryan K. Stafford | 4/28/17 | 10,103 | 0 | | $154.15 | 4/28/24 | — | | — | | 4/27/18 | 6,061 | 3,031 | (3) | | $192.59 | 4/27/25 | 886 | $222,971 | 4/26/19 | 3,402 | 6,804 | (4) | | $199.24 | 4/26/26 | 2,000 | $503,320 | 4/23/20 | 0 | 16,839 | (5) | | $132.08 | 4/23/27 | 4,742 | $1,193,372 | Matthew J. Cole | 4/22/16 | 4,835 | 0 | | $120.15 | 4/22/23 | — | | — | | 4/28/17 | 3,616 | 0 | | $154.15 | 4/28/24 | — | | — | | 4/27/18 | 1,957 | 979 | (3) | | $192.59 | 4/27/25 | 286 | $71,975 | 4/26/19 | 956 | 1,910 | (4) | | $199.24 | 4/26/26 | 561 | $141,181 | 4/23/20 | 0 | 4,728 | (5) | | $132.08 | 4/23/27 | 1,331 | $334,959 | 7/10/20 | 0 | 6,519 | (6) | | $166.63 | 7/10/27 | — | | — | | Deepak Nayar | 4/27/18 | 0 | 1,842 | (3) | | $192.59 | 4/27/25 | 539 | $135,645 | 4/26/19 | 136 | 3,955 | (4) | | $199.24 | 4/26/26 | 1,162 | $292,429 | 4/23/20 | 0 | 10,720 | (5) | | $132.08 | 4/23/27 | 6,804 | $1,712,295 | 7/10/20 | 0 | 2,717 | (6) | | $166.63 | 7/10/27 | — | | — | |
(1)The exercise price shown for individual optionees is the fair market value of the Company’s common stock on the date of grant (determined based on the closing stock price on that date reported by NASDAQ).
(2) Values are based on the closing stock price of $251.66 per share of our common stock on the NASDAQ on December 24, 2020, the last trading day of the 2020 fiscal year. There is no assurance that if or when the RSUs vest they will have this value.
(3) Options vest annually in installments of 33% beginning April 27, 2019, such that the options are fully exercisable on or after three years from the date of grant.
(4) Options vest annually in installments of 33% beginning April 26, 2020, such that the options are fully exercisable on or after three years from the date of grant.
(5) Options vest annually in installments of 33% beginning April 23, 2021, such that the options are fully exercisable on or after three years from the date of grant.
(6) Options 100% cliff vest such that the options are fully exercisable on or after three years from the date of grant.
| David
W. Heinzmann | | | 4/27/2018 | | | 23,061 | | | 0 | | | $192.59 | | | 4/27/2025 | | | 0 | | | $0 | | | 4/26/2019 | | | 25,888 | | | 0 | | | $199.24 | | | 4/26/2026 | | | 0 | | | $0 | | | | | | 4/23/2020 | | | 42,711 | | | 0 | | | $132.08 | | | 4/23/2027 | | | 0 | | | $0 | | | | | | 4/22/2021 | | | 12,563 | | | 6,281(3) | | | $267.84 | | | 4/22/2028 | | | 2,166 | | | $579,535 | | | | | | 4/28/2022 | | | 9,397 | | | 18,793 (5) | | | $231.64 | | | 4/28/2029 | | | 5,746 | | | $1,537,400 | | | | | | 4/27/2023 | | | 0 | | | 29,800 (6) | | | $240.76 | | | 4/27/2030 | | | 9,708 | | | $2,597,472 | | | Meenal A. Sethna | | | 4/27/2018 | | | 9,145 | | | 0 | | | $192.59 | | | 4/27/2025 | | | 0 | | | $0 | | | | | | 4/26/2019 | | | 10,266 | | | 0 | | | $199.24 | | | 4/26/2026 | | | 0 | | | $0 | | | | | | 4/23/2020 | | | 16,938 | | | 0 | | | $132.08 | | | 4/23/2027 | | | 0 | | | $0 | | | | | | 7/31/2020 | | | 11,953 | | | 0 | | | $177.65 | | | 7/31/2027 | | | 0 | | | $0 | | | | | | 4/22/2021 | | | 4,529 | | | 2,264 (3) | | | $267.84 | | | 4/22/2028 | | | 781 | | | $208,964 | | | | | | 4/28/2022 | | | 3,270 | | | 6,538 (5) | | | $231.64 | | | 4/28/2029 | | | 1,999 | | | $534,852 | | | | | | 4/27/2023 | | | 0 | | | 10,265 (6) | | | $240.76 | | | 4/27/2030 | | | 3,344 | | | $894,721 | | | Ryan K. Stafford | | | 4/26/2019 | | | 10,206 | | | 0 | | | $199.24 | | | 4/26/2026 | | | 0 | | | $0 | | | | | | 4/23/2020 | | | 16,839 | | | 0 | | | $132.08 | | | 4/23/2027 | | | 0 | | | $0 | | | | | | 4/22/2021 | | | 6,682 | | | 3,341 (3) | | | $267.84 | | | 4/22/2028 | | | 1,152 | | | $308,229 | | | | | | 4/28/2022 | | | 3,169 | | | 6,337 (5) | | | $231.64 | | | 4/28/2029 | | | 1,938 | | | $518,531 | | | | | | 4/27/2023 | | | 0 | | | 9,329 (6) | | | $240.76 | | | 4/27/2030 | | | 3,039 | | | $813,115 | | | Maggie Chu | | | 6/1/2021 | | | 1,374 | | | 687 (4) | | | $262.75 | | | 6/1/2028 | | | 870 | | | $232,777 | | | | | | 4/28/2022 | | | 1,344 | | | 2,686 (5) | | | $231.64 | | | 4/28/2029 | | | 821 | | | $219,667 | | | | | | 4/27/2023 | | | 0 | | | 4,283 (6) | | | $240.76 | | | 4/27/2030 | | | 1,395 | | | $373,246 | | | Deepak Nayar | | | 4/22/2021 | | | 2,867 | | | 1,433 (3) | | | $267.84 | | | 4/22/2028 | | | 494 | | | $132,175 | | | | | | 4/28/2022 | | | 2,497 | | | 4,993 (5) | | | $231.64 | | | 4/28/2029 | | | 1,526 | | | $408,297 | | | | | | 4/27/2023 | | | 0 | | | 6,862 (6) | | | $240.76 | | | 4/27/2030 | | | 2,236 | | | $598,264 | |
(1)
| The exercise price shown for individual optionees is the fair market value of the Company’s common stock on the date of grant (determined based on the closing stock price on that date reported by NASDAQ). |
(2)
| Values are based on the closing stock price of $267.56 per share of our common stock on the NASDAQ on December 29, 2023, the last trading day of the 2023 fiscal year. There is no assurance that if or when the RSUs vest they will have this value. |
(3)
| Options vest annually in installments of 33% beginning April 22, 2022, such that the options are fully exercisable on or after three years from the date of grant. |
(4)
| Options vest annually in installments of 33% beginning June 1, 2022, such that the options are fully exercisable on or after three years from the date of grant. |
(5)
| Options vest annually in installments of 33% beginning April 28, 2023, such that the options are fully exercisable on or after three years from the date of grant. |
(6)
| Options vest annually in installments of 33% beginning April 27, 2024, such that the options are fully exercisable on or after three years from the date of grant. |
Narrative disclosures of the compensation awarded to our NEOs as reported in the Summary Compensation Table and Grants of Plan-Based Awards Table are included in the Compensation Discussion and Analysis, starting on page 23. | | | | | | | | | | 2021 | | 2024 Proxy Statement | 37 | | 41 |
TABLE OF CONTENTS Option Exercises and Stock Vested in 2020 2023
The following table provides the amounts received upon exercise of options or similar instruments or the vesting of stock or similar instruments during 20202023 fiscal year. | | | | | | | | | | | | | | | | | | Name | Option Awards | Stock Awards | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | David W. Heinzmann | 32,030 | $3,432,230 | 13,894 | | (3) | $2,299,237 | Meenal A. Sethna | 8,500 | $716,860 | 2,817 | | (4) | $394,142 | Ryan K. Stafford | 10,750 | $954,384 | 2,787 | | (5) | $389,904 | Matthew J. Cole | 0 | $0 | 889 | | (6) | $124,650 | Deepak Nayar | 7,789 | $203,398 | 1,726 | | (7) | $241,758 |
(1) Value Realized on Exercise represents the difference between exercise price and market price at the time of exercise, excluding any tax obligation in connection with such exercises.
(2) Determined based on the closing stock price of the Company common stock on the vesting dates, excluding tax obligations incurred in connection with such vesting.
(3) Represents 100% cliff vesting of award granted on January 3, 2017 and 33% installment vesting of RSU award granted on April 28, 2017, April 27, 2018, and April 26, 2019. Number of shares includes 5,406 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on January 3, 2020, April 28, 2020, April 27, 2020, and April 26, 2020.
(4) Represents 33% installment vesting of RSU award granted on April 28, 2017, April 27, 2018, and April 26, 2019. Number of shares includes 826 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 28, 2020, April 27, 2020, and April 26, 2020.
(5) Represents 33% installment vesting of RSU award granted on April 28, 2017, April 27, 2018, and April 26, 2019. Number of shares includes 817 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 28, 2020, April 27, 2020, and April 26, 2020.
(6) Represents 33% installment vesting of RSU award granted on April 28, 2017, April 27, 2018, and April 26, 2019. Number of shares includes 214 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 28, 2020, April 27, 2020 and April 26, 2020.
(7) Represents 33% installment vesting of RSU award granted on April 28, 2017, April 27, 2018, and April 26, 2019. Number of shares includes 596 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU award on April 28, 2020, April 27, 2020 and April 26, 2020.
| David W. Heinzmann | | | 24,066 | | | $2,728,798 | | | 9,048(3) | | | $2,213,153 | | | Meenal A. Sethna | | | 3,478 | | | $338,242 | | | 3,371(4) | | | $824,795 | | | Ryan K. Stafford | | | 0 | | | $0 | | | 3,702(5) | | | $906,229 | | | Maggie Chu | | | 0 | | | $0 | | | 1,281(6) | | | $322,890 | | | Deepak Nayar | | | 6,290 | | | $711,198 | | | 6,049(7) | | | $1,483,596 | |
(1)
| Value Realized on Exercise represents the difference between exercise price and market price at the time of exercise, excluding any tax obligation in connection with such exercises. |
(2)
| Determined based on the closing stock price of the Company common stock on the vesting dates, excluding tax obligations incurred in connection with such vesting. |
(3)
| Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022. Number of shares includes 4,009 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
(4)
| Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022. Number of shares includes 1,428 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
(5)
| Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022. Number of shares includes 1,483 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
(6)
| Represents 33% installment vesting of RSU award granted on June 1, 2021 and April 28, 2022. Number of shares includes 375 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on June 1, 2023 and April 28, 2023. |
(7)
| Represents 33% installment vesting of RSU award granted on April 23, 2020, April 22, 2021, and April 28, 2022 and 100% cliff vesting of an award granted on April 23, 2020. Number of shares includes 2,830 shares withheld by the Company to pay for minimum withholding tax due upon the vesting of the RSU awards on April 23, 2023, April 22, 2023, and April 28, 2023. |
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 38 | | 42 |
TABLE OF CONTENTS Nonqualified Deferred Compensation
The following table discloses contributions, earnings and balances under the Supplemental Plan for each NEO for 2020.2023. | | | | | | | | | | | | | | | | | | Name | Executive Contributions in Last Fiscal Year ($)(1) | Company Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings (Losses) in Last Fiscal Year ($)(3) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | David W. Heinzmann | $229,690 | $39,169 | $287,278 | $0 | $2,058,384 | Meenal A. Sethna | $165,793 | $11,509 | $111,432 | $0 | $1,016,230 | Ryan K. Stafford | $10,453 | $14,466 | $88,074 | $0 | $588,100 | Matthew J. Cole | $2,177 | $4,964 | $10,105 | $0 | $71,406 | Deepak Nayar | $0 | $9,268 | $170 | $0 | $137,251 |
(1)Reflects amounts that have been reported in the Salary column of the Summary Compensation Table.
(2)These amounts reflect Company and matching contributions made under the Supplemental Plan. These amounts were reported in the All Other Compensation column of the Summary Compensation Table for 2020. These amounts include contributions that are attributable to the 2020 fiscal year but that were made in 2021 after the end of the 2020 fiscal year.
(3) These amounts represent interest earnings/losses credited to each NEO’s account in the Supplemental Plan. Interest earnings/losses credited to these accounts are derived from the actual returns on the same investment options that are available under the 401(k) Plan, and the allocation the executives make amongst those qualified plan investment options. Given that these investment options are available to all employees participating in the non-discriminatory, tax-qualified 401(k) Plan, the interest earnings credited to the Supplemental Plan are not considered to be above market and, thus, do not need to be reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table, which column is not included in our Summary Compensation Table.
| David W. Heinzmann | | | $911,249 | | | $115,002 | | | $591,920 | | | ($539,421) | | | $4,287,695 | | | Meenal A. Sethna | | | $246,862 | | | $44,749 | | | $222,755 | | | $0 | | | $1,817,430 | | | Ryan K. Stafford | | | $34,988 | | | $45,729 | | | $108,981 | | | $0 | | | $759,924 | | | Maggie Chu | | | $226,479 | | | $17,944 | | | $56,740 | | | $0 | | | $393,322 | | | Deepak Nayar | | | $0 | | | $38,865 | | | $32,800 | | | $0 | | | $241,843 | |
(1)
| Reflects amounts that have been reported in the Salary column of the Summary Compensation Table. |
(2)
| These amounts reflect Company and matching contributions made under the Supplemental Plan. These amounts were reported in the All Other Compensation column of the Summary Compensation Table for 2023. These amounts include contributions that are attributable to the 2023 fiscal year but that were made in 2024 after the end of the 2023 fiscal year. |
(3)
| These amounts represent interest earnings/losses credited to each NEO’s account in the Supplemental Plan. Interest earnings/losses credited to these accounts are derived from the actual returns on the same investment options that are available under the 401(k) Plan, and the allocation the executives make amongst those qualified plan investment options. Given that these investment options are available to all employees participating in the non-discriminatory, tax-qualified 401(k) Plan, the interest earnings credited to the Supplemental Plan are not considered to be above market and, thus, do not need to be reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table, which column is not included in our Summary Compensation Table. |
See discussion of the Supplemental Plan in the section titled "Retirement“Retirement and Post-Employment Arrangements"Arrangements” starting on page 31.
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 39 |
| | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
43 |
TABLE OF CONTENTS POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Termination of Employment Generally We have not entered into any employment agreements with our NEOs, other than a Letter Agreement with Mr. Heinzmann.Heinzmann and an Employment Offer Letter with Ms. Chu. We have entered into a change in control agreement with each NEO and each NEO is entitled to receive certain payments and benefits upon termination of employment pursuant to (i) the Long-Term Incentive Plan, (ii) Individual Award Agreements, (iii) the Executive Severance Policy, and (iv) Supplemental Plan provisions. Long-Term Incentive Plan Termination Provisions The Long-Term Plan governs equity grants made in years 2010 and later, and under the provisions of the Long-Term Plan, all outstanding (unvested) equity grants shall be cancelled and no longer exercisable on the date of employment termination, unless otherwise provided in an individual award agreement or by approval of the Compensation Committee. Key definitions in our Long-Term Plan and the individual award agreements are described below. Disability For purposes of the Long-Term Plan, "disability"“disability” has the same meaning as in the Award Agreements and the change in control agreements in effect. Disability is defined as the inability to engage in substantial gainful activity or receipt of income replacement benefits under our (or our subsidiary’s) accident and health plan for at least three months, in either case, because of a medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of at least 12 months. Change in Control "“Change in control"control” under the Long-Term Plan generally means the first to occur of (1) certain acquisitions by any person becoming the owner of more than 50% of the Company, by vote or by value, (2) certain acquisitions (other than as described in (1)) by any person becoming the owner of 30% or more of the total voting power of Company stock within a 12 month period, (3) replacement of a majority of the Board within a 12 month period by directors whose appointment or election is not previously endorsed by the then majority of the Board, or (4) certain acquisitions of 40% or more of the Company’s assets.
Award AgreementTermination Provisions In April 2020, the Compensation Committee and the full Board approved new form award agreements for restricted stock units and stock options granted to executive-level employees, including all NEOs, and non-employee directors (the “2020 Form Award Agreements”). The 2020 Form Award Agreements were substantially similar to the form of award agreements previously disclosed by the Company with terms as described below.
In connection with the retention awards granted in April and July 2020, as described on page 32, the Compensation Committee and the full Board approved form retention restricted stock unit and stock option award agreements that were granted to executive-level employees, including certain NEOs (the “2020 Form Retention Award Agreements”). The 2020 Form Retention Award Agreements provide that upon eligible retirement both unvested outstanding stock options and restricted stock units are immediately forfeited. All other provisions remain the same as the 2020 Form Award Agreements, with terms as described below.
Eligible Retirement Eligible retirement under the individual award agreements entered into prior to 2017 means the date upon which an employee, having attained an age of not less than 62 and completing five years of employment with us, terminates employment with the Company. Eligible retirement under the individual award agreements entered into in 2017 and later provides that the definition of eligible retirement is 55 plus 10 years of service with the Company.
Stock Options
Stock options granted to the NEOs in or after 2017 under the Long-Term Plan automatically become fully vested upon the recipient’s termination of employment due to death or "disability,"“disability,” termination without cause within two years following a "change“change in control,"” or termination without cause on or after "eligible“eligible retirement."” Upon any such termination of employment, recipient may exercise his or her vested stock options until the earlier of (1) the date on which the stock options would otherwise terminate in accordance with the terms of their grants or (2) the expiration of three months (or 90 days in some cases) after the date of termination or 12 months in the case of death or the | | | 2024 Proxy Statement | | | 44 |
TABLE OF CONTENTS 7th anniversary of the grant date in the case of eligible retirement. Under all other termination of employment events, all unvested stock options are forfeited upon termination and the recipient has three months after termination to exercise his or her stock options which were vested immediately prior to termination (unless the recipient is terminated for cause, in which case the options will no longer be exercisable effective immediately upon the recipient’s termination date). Restricted Stock Units RSUs granted to the NEOs inon or after 2017 under the Long-Term Plan that have not vested are generally forfeited upon the recipient’s termination of employment. However, if a recipient terminates employment due to death or "disability,"“disability,” then a pro rata portion of his or her unvested RSUs may become vested based on the recipient’s prior service with the Company. Any unvested RSUs will automatically fully vest if an event occurs that constitutes a "change“change in control"control” or upon "eligible“eligible retirement."” For awards granted prior to 2017, if a recipient terminates employment due to "eligible“eligible retirement,"” then a pro-rata portion of his or her unvested RSUs will vest. Change of Control Agreements Termination Provisions We entered into new Tier I change of control agreements with each of our executive officers, including our NEOs, effective January 1, 2021.2024. These agreements replaced the previous change of control agreements that had expired on December 31, 2020.2023 and contain substantially identical terms. If a change of control occurs at any time on or before December 31, 2023,2026, the Company has agreed to continue to retain the services of such NEOs and each of them has agreed to remain in our service, for two years after the occurrence of the change of control (the "Service Period"“Service Period”). During the Service Period, the Company will provide them with (i) monthly base salary that is no less than the highest monthly base salary provided to them during the twelve months prior to the change of control, (ii) fringe benefits, reimbursement of business expenses, paid vacation time and office support at levels no less than provided to them during the 120 days prior to the change of control, (iii) annual bonuses that shall be the greater of (a) the average of the NEO’s annual bonus for the three years prior to the change of control and (b) the target bonus amount applicable to the NEO for the fiscal year in which the change of control occurs, and (iv) health and welfare benefits and incentive, paid vacation, savings and retirement opportunities generally no less favorable, in the aggregate, than the plans in effect during the 120 days prior to the change of control or those provided after the change of control to other peer executives of the Company if more favorable. In the event that the Company terminates the service of the NEOs during the Service Period other than for cause, death or disability, or if any of them terminate their service for good reason, they will be entitled to the following payments and benefits in addition to certain accrued amounts: (1) a lump sum payment equal to two times (three times in the case of Mr. Heinzmann) his or her annual base salary and the greater of: (i) the average of the NEO’s annual bonus for the three years prior to termination from service and (ii) the target bonus amount applicable to the NEO for the fiscal year in which the termination occurs;
(2) a pro-rata amount equal to the greatest of such NEO’s (i) target annual bonus for the fiscal year in which the termination occurs, (ii) annual bonus for the year in which the termination occurs based on performance through the termination date, and (iii) average annual bonus for the last three fiscal years for the three years prior to the termination date;
(3) during the two years (three years in the case of Mr. Heinzmann) following termination, reimbursement of the premium cost in excess of the normal active employee rate for his or her peer group to continue group medical benefits under COBRA (or reimbursements of excess individual insurance policy costs, if COBRA is not available) plus reimbursement of any post-tax difference;
(4) for a period of up to two years (three years in the case of Mr. Heinzmann) after termination, or until the NEO accepts employment with any third party if earlier, reasonable outplacement services to the NEO;
(1)
| a lump sum payment equal to two times (three times in the case of Mr. Heinzmann) his or her annual base salary and the greater of: (i) the average of the NEO’s annual bonus for the three years prior to termination from service and (ii) the target bonus amount applicable to the NEO for the fiscal year in which the termination occurs; |
(2)
| a pro-rata amount equal to the greatest of such NEO’s (i) target annual bonus for the fiscal year in which the termination occurs, (ii) annual bonus for the year in which the termination occurs based on performance through the termination date, and (iii) average annual bonus for the last three fiscal years for the three years prior to the termination date; |
(3)
| during the two years (three years in the case of Mr. Heinzmann) following termination, reimbursement of the premium cost in excess of the normal active employee rate for his or her peer group to continue group medical benefits under COBRA (or reimbursements of excess individual insurance policy costs, if COBRA is not available) plus reimbursement of any post-tax difference; |
(4)
| for a period of up to two years (three years in the case of Mr. Heinzmann) after termination, or until the NEO accepts employment with any third party if earlier, reasonable outplacement services to the NEO; |
(5)
| any option or right granted to the NEO under any of our equity-based plans will be exercisable by the NEO until the earlier of the date on which the option or right terminates in accordance with the terms of its grant or the expiration of 12 months after the date of termination, or the expiration of such longer period, if any, in accordance with the terms of the individual award agreement; and |
(6)
| the payment or provision of other amounts or benefits required to be paid under any of our plans, programs, policies, practices, contracts or agreements. |
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 41 | | 45 |
(5) any option or right granted to the NEO under any of our equity-based plans will be exercisable by the NEO until the earlier of the date on which the option or right terminates in accordance with the terms of its grant or the expiration of 12 months after the date of termination, or the expiration of such longer period, if any, in accordance with the terms of the individual award agreement; and
(6) the payment or provision of other amounts or benefits required to be paid under any of our plans, programs, policies, practices, contracts or agreements.
TABLE OF CONTENTS In addition to the above additional benefits and payments, the NEO will no longer be bound by any non-compete agreements. For purposes of the change in control agreements, "cause"“cause” means (i) the willful and continued failure by the NEO to substantially perform his duties (other than due to physical or mental illness), after a written demand for substantial performance is delivered by the Board specifically identifying the manner in which the Board believes that the NEO has not substantially performed his duties and such failure is not cured within 60 calendar days after receipt of such written demand or (ii) the willful engagement by the NEO in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. "“Good reason"reason” means (i) the NEO is not elected to, or is removed from, any elected office that the NEO held immediately prior to a change of control, (ii) the assignment to the NEO of any duties materially inconsistent in any respect with the NEO’s position, authority, duties or responsibilities, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, other than isolated, insubstantial and inadvertent actions not occurring in bad faith which are remedied, (iii) any failure by the Company to comply with any of the provisions of the change of control agreement other than certain isolated, insubstantial and inadvertent failures not occurring in bad faith which are remedied, (iv) requiring the NEO to travel on business to a substantially greater extent than required immediately prior to the change of control, or (v) any purported termination of the NEO’s service other than as expressly permitted under the agreements, in all cases provided the NEO provides at least 90 days’ notice and allows the Company at least 30 days to cure.
If the NEO’s service is terminated by reason of his death or disability during the Service Period, in addition to any accrued amounts due to the NEO for services prior to separation, the Company will pay to the NEO or his or her legal representative (i) a pro-rata amount equal to the greatest of such NEO’s (a) target annual bonus for the fiscal year in which the termination occurs, (b) annual bonus for the year in which the termination occurs based on performance through the termination date or (c) average annual bonus for the last three fiscal years prior to the termination date, plus (ii) any other amounts or benefits required to be paid or provided or which the NEO is eligible to receive under any of our plans, programs, policies, practices, contracts or agreements. These other benefits include, in the case of death, benefits at least equal to the most favorable benefits provided by the Company to the estates and beneficiaries of peer executives and, in the case of disability, disability and other benefits at least equal to the most favorable of those generally provided by the Company to disabled NEOs and/or their families. If the NEO is terminated voluntarily without good reason during the Service Period, the Company will pay to the NEO any accrued amounts due to the NEO for services prior to termination, plus (i) a pro-rata amount equal to the greatest of such NEO’s (a) target annual bonus for the fiscal year in which the termination occurs, (b) annual bonus for the year in which the termination occurs based on performance through the termination date or (c) average annual bonus for the last three fiscal years for the three years prior to the termination date, and (ii) any other amounts or benefits required to be paid or provided or which the NEO is eligible to receive under any of our plans, programs, policies, practices, contracts or agreements. If the NEO is terminated for cause during the Service Period, the Company will pay to the NEO any accrued but unpaid base salary due to the NEO for services prior to termination, plus any other amounts or benefits required to be paid or provided or which the NEO is eligible to receive under any of our plans, programs, policies, practices, contracts or agreements. Consistent with the Tier I change of control agreements entered into previously, the NEOs agree to confidentiality provisions, provisions for non-disparagement, compensation clawback, return of documents and cooperation in defense of claims made by or against Littelfuse.
Executive Severance Policy The Company adopted an Executive Severance Policy (the "Severance Policy"“Severance Policy”) on January 15, 2018. The Severance Policy provides severance protections to the senior leadership team holding titles of Senior Vice President or higher and any other key employee specifically designated as a participant by the Board. The severance protections provided by the Severance Policy apply to terminations occurring on or after January 15, 2018, and consist of the following:
⯀ | Severance benefits equal to a specified multiple of base salary and target annual bonus (2x for CEO, 1.5x for Executive Vice Presidents, and 1x for Senior Vice Presidents); |
⯀ | Pro-rated actual annual bonus for the year of termination; |
■ Severance benefits equal to a specified multiple of base salary and target annual bonus (2x for CEO, 1.5x for Executive Vice Presidents, and 1x for Senior Vice Presidents); | | | 2024 Proxy Statement | | | 46 |
■ Pro-rated actual annual bonus for the year of termination;
■ Payment of premiums for continued group health coverage for a specified period (18 months for CEO and Executive Vice Presidents, and 12 months for Senior Vice Presidents), or, if shorter, the maximum period provided by law; and
■ Continuation of perquisites through the end of the year of termination, and outplacement services for up to one year after the date of termination.
TABLE OF CONTENTS ⯀ | Payment of premiums for continued group health coverage for a specified period (18 months for CEO and Executive Vice Presidents, and 12 months for Senior Vice Presidents), or, if shorter, the maximum period provided by law; and |
⯀ | Continuation of perquisites through the end of the year of termination, and outplacement services for up to one year after the date of termination. |
Provision of these severance benefits under the Severance Policy is conditioned upon the executive entering into a separation and release agreement with Littelfuse, which will include certain protections for Littelfuse such as a general release of claims, agreements not to disclose confidential information, and, for a specified period after the date of termination, (1) solicit employees or interfere with customer, vendor, and other relationships or (2) engage in competitive activities. No severance is payable under the Severance Policy if termination of employment is for "cause"“cause” (as defined below), due to the executive’s death or disability, or if the executive voluntarily terminates employment for any reason. "Cause"“Cause” is defined as set forth in the executive’s change of control agreement with Littelfuse as in effect at the time of termination or, in the absence of such an agreement, as determined by the Board, in its sole discretion. Supplemental Plan Termination Provisions Supplemental Plan account balances are at all times 100% vested, and each U.S. NEO is entitled to receive his or her Supplemental Plan account balance upon termination of employment, or if elected either (i) age 59½ or (ii) age 65 or the later of five years of service. The benefit is paid in a lump sum or installments over five years, as elected by the NEO. For purposes of the Potential Payments Upon Termination or Change in Control table below we have assumed that the account balances of the NEOs will be paid on termination of employment in a lump sum, although the NEO could have elected a different distribution date and form of payment in accordance with the Supplemental Plan. Potential Payments Uponupon Termination or Change in Control Upon the termination of employment of a NEO, they may be entitled to additional benefits or payments beyond those provided under our benefit plans, depending on the event triggering the termination. The events that would trigger a NEO’s entitlement to additional benefits or payments, and the estimated value of these additional benefits or payments, and the timing of such payments are described in the following table. As each NEO is considered a "specified employee"“specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended, upon separation of service the payments described below for the NEO’s Supplemental Plan balance would be subject to a six-month delay. The table below has been prepared assuming a termination date and, where applicable, a change of control date, of December 24, 2020,29, 2023, the last business day of our 20202023 fiscal year, and a stock price of $251.66$267.56 per share, which was the closing price of our common stock on such date. | David W. Heinzmann | | | $10,475,787 | | | $15,470,858 | | | $8,236,973 | | | $7,236,973 | | | $4,287,695 | | | $15,914,367 | | | Meenal A. Sethna | | | $1,817,430 | | | $5,679,768 | | | $3,843,500 | | | $2,843,500 | | | $1,817,430 | | | $3,835,386 | | | Ryan K. Stafford | | | $2,877,441 | | | $5,779,539 | | | $2,796,231 | | | $1,796,231 | | | $759,924 | | | $4,877,980 | | | Maggie Chu | | | $393,322 | | | $3,026,596 | | | $1,899,265 | | | $899,265 | | | $393,322 | | | $1,254,228 | | | Deepak Nayar | | | $1,565,864 | | | $4,022,944 | | | $1,783,786 | | | $783,786 | | | $241,843 | | | $2,698,065 | |
(1)
| This amount represents for Messrs. Heinzmann, Stafford, and Nayar (i) the value of all unvested stock options (actual value to be determined upon exercise), (ii) the value of all unvested RSUs, and (iii) his Supplemental Plan account balance. For Mses. Sethna and Chu, this amount represents the value of each NEO’s Supplemental Plan account balance. |
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 43 | | 47 |
| | | | | | | | | | | | | | | | | | | | | Name | Voluntary Resignation or Retirement (1) | Resignation for Good Reason or Involuntary Termination other than for Cause within 2 years of a Change of Control (2) | Death (3) | Disability (4) | Termination for Cause (5) | Involuntary Termination other than Cause, Death, Disability or Change of Control (6) | David W. Heinzmann | $13,393,618 | $20,311,911 | $10,999,228 | $9,999,228 | $2,058,384 | $15,289,027 | Meenal A. Sethna | $1,016,230 | $8,592,071 | $6,049,732 | $5,049,732 | $1,016,230 | $1,760,561 | Ryan K. Stafford | $588,100 | $7,570,355 | $4,718,497 | $3,718,497 | $588,100 | $1,425,806 | Matthew J. Cole | $71,406 | $3,309,375 | $2,517,906 | $1,517,906 | $71,406 | $453,657 | Deepak Nayar | $2,923,112 | $5,840,754 | $3,534,048 | $2,534,048 | $137,251 | $3,385,374 |
(1) This amount represents for Mr. Heinzmann (i) the value of all unvested stock options (actual value to be determined upon exercise), (ii) the value of all unvested RSUs, and (iii) his Supplemental Plan account balance. For Mr. Nayar, the amount represents (i) the value of all unvested stock options excluding the special retention award (actual value to be determined upon exercise), (ii) the value of unvested RSUs (excluding the April 23, 2020 cliff vested RSU award), and (iii) his Supplemental Plan account balance. For Messrs. Stafford and Cole and Ms. Sethna, this amount represents the value of each NEO’s Supplemental Plan account balance.
(2) This amount represents (i) two years of annual base salary (three years for Mr. Heinzmann) payable in a lump sum on the 30th day following separation of service, (ii) two times (three times for Mr. Heinzmann) the greater of the average AIP bonuses for the previous three years and the AIP target bonus for 2020 payable in a lump sum on the 30th day following separation of service, (iii) an amount equal to the greatest of the average AIP bonuses for three years, the AIP target bonus for 2020, and the AIP bonus for 2020 based on performance through separation of service payable in a lump sum on the 30th day following separation of service, (iv) the cost of two years of continued coverage under our group health and dental plans (three years for Mr. Heinzmann), and (v) the cost of outplacement services for two years, assuming the value of this benefit is 15% of the NEO’s annual base salary. In addition, this amount includes the value of all unvested stock options (actual value to be determined upon exercise) and all unvested RSUs which vest upon termination, and the value of the NEO’s Supplemental Plan account balance. If the change of control and severance payments and benefits are above the threshold which triggers an excise tax under Section 280G of the Code, either the severance is reduced to the amount such that the excise tax is avoided or the full severance is paid with the excise tax imposed, whichever is more favorable to the executive on an after-tax basis.
(3) This amount represents (i) life insurance coverage equal to the lesser of three times the executive’s annual base salary and $1,000,000, (ii) the value of all unvested stock options which vest upon termination (actual value to be determined upon exercise), (iii) the value of a pro-rata portion of all unvested RSUs which vest upon termination, and (iv) the NEO’s Supplemental Plan account balance.
TABLE OF CONTENTS (4) This amount represents (i) the value of all unvested stock options (actual value to be determined upon exercise), (ii) the value of a pro-rata portion of all unvested RSUs, and (iii) the NEO’s Supplemental Plan account balance.
(5) This amount represents the value of each NEO’s Supplemental Plan account balance.
(6) This amount represents (i) severance benefits equal to a multiple of base and target annual bonus (2 times for Mr. Heinzmann, one and a half times for Ms. Sethna and Mr. Stafford, and one time for Messrs. Nayar and Cole), (ii) AIP target bonus for 2020, (iii) the cost of continued coverage under our group health and dental plans (eighteen months for Messrs. Heinzmann and Stafford and Ms. Sethna and twelve months for Messrs. Nayar and Cole), and (iv) the cost of outplacement services for one year, assuming the value of this benefit is 7.5% of the NEO’s annual base salary. In addition, this amount includes for Mr. Heinzmann the value of all unvested stock options (actual value to be determined upon exercise) and all unvested RSUs which vest upon termination, and the value of the his Supplemental Plan account balance. For Mr. Nayar, the value of all unvested stock options, excluding the special retention award (actual value to be determined upon exercise) and all unvested RSUs, excluding the cliff vested award, which vest upon termination, and the value of his Supplemental Plan account balance.
(2)
| | | | | | | | | | 2021 Proxy Statement | 44This amount represents (i) two years of annual base salary (three years for Mr. Heinzmann) payable in a lump sum on the 30th day following separation of service, (ii) two times (three times for Mr. Heinzmann) the greater of the average AIP bonuses for the previous three years and the AIP target bonus for 2023 payable in a lump sum on the 30th day following separation of service, (iii) an amount equal to the greatest of the average AIP bonuses for three years, the AIP target bonus for 2023, and the AIP bonus for 2023 based on performance through separation of service payable in a lump sum on the 30th day following separation of service, (iv) the cost of two years of continued coverage under our group health and dental plans (three years for Mr. Heinzmann), and (v) the cost of outplacement services for two years, assuming the value of this benefit is 15% of the NEO’s annual base salary. In addition, this amount includes the value of all unvested stock options (actual value to be determined upon exercise) and all unvested RSUs which vest upon termination, and the value of the NEO’s Supplemental Plan account balance. If the change of control and severance payments and benefits are above the threshold which triggers an excise tax under Section 280G of the Code, either the severance is reduced to the amount such that the excise tax is avoided or the full severance is paid with the excise tax imposed, whichever is more favorable to the executive on an after-tax basis. |
(3)
| This amount represents (i) life insurance coverage equal to the lesser of three times the executive’s annual base salary and $1,000,000, (ii) the value of all unvested stock options which vest upon termination (actual value to be determined upon exercise), (iii) the value of a pro-rata portion of all unvested RSUs which vest upon termination, and (iv) the NEO’s Supplemental Plan account balance. |
(4)
| This amount represents (i) the value of all unvested stock options (actual value to be determined upon exercise), (ii) the value of a pro-rata portion of all unvested RSUs, and (iii) the NEO’s Supplemental Plan account balance. |
(5)
| This amount represents the value of each NEO’s Supplemental Plan account balance. |
(6)
| This amount represents (i) severance benefits equal to a multiple of base and target annual bonus (2 times for Mr. Heinzmann, one and a half times for Ms. Sethna and Mr. Stafford, and one time for Ms. Chu and Mr. Nayar), (ii) AIP target bonus for 2023, (iii) the cost of continued coverage under our group health and dental plans (eighteen months for Messrs. Heinzmann and Stafford and Ms. Sethna and twelve months for Ms. Chu and Mr. Nayar), and (iv) the cost of outplacement services for one year, assuming the value of this benefit is 7.5% of the NEO’s annual base salary. In addition, this amount includes for Messrs. Heinzmann, Stafford, and Nayar the value of all unvested stock options (actual value to be determined upon exercise) and all unvested RSUs which vest upon termination, and the value of his Supplemental Plan account balance. For Mses. Sethna and Chu, this amount also includes the value of each NEO’s Supplemental Plan account balance. |
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information for the fiscal year 2020:2023: ⯀ | the median of the annual total compensation of all employees of our company (other than Mr. Heinzmann, our Chief Executive Officer), was $10,343; |
⯀ | the annual total compensation of Mr. Heinzmann, our Chief Executive Officer, was $6,641,506; and |
⯀ | the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees, which represents a reasonable estimate calculated in accordance with SEC regulations and guidance, is 642 to 1. |
■Our median employee for the medianfiscal year 2023 is not the same employee that was used in the 2022 CEO Pay Ratio calculation. As a result of the annual total compensation of all employees of our company (other than Mr. Heinzmann, our Chief Executive Officer), was $14,993;acquisition activity and
■ the annual total compensation of Mr. Heinzmann, our Chief Executive Officer, was $4,065,061.
■ the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all employees, which represents a reasonable estimate calculated in accordance with SEC regulations and guidance, is 271 to 1.
We have determined that footprint optimization during 2023, there have been nowere significant changes to our employee population.
Methodology ⯀ | As of December 30, 2023, we had 16,658 employees of Littelfuse, Inc. and its consolidated subsidiaries, with 49% of these employees located in the Americas (including U.S., Canada, Mexico and Brazil), 13% located in Europe (primarily in Lithuania, Italy, United Kingdom and Germany), and 38% located in various countries in Asia-Pacific (primarily in China and the Philippines). |
⯀ | After taking into consideration the adjustments permitted by SEC rules, we have excluded 42 employees of Western Automation Research and Development Limited, which we acquired during fiscal 2023. As a |
| | | 2024 Proxy Statement | | | 48 |
TABLE OF CONTENTS result, our employee population or compensation programs compared to our 2020 pay ratio analysis that would impact our new pay ratio disclosure. Therefore, we are using the same median employee from our fiscal year 2020 pay ratio disclosure, as described below:
■ Our median employee is a full-time, salaried employee located in Asia-Pacific, with a base salaryfor purposes of $6,289. Onceidentifying our median employee was identified, we collected, from local HR, all other compensation elements, including overtime pay, position and shift allowances, productivity and spot bonus awards, life insurance premiums and housing benefits to calculate the median employee's total annual compensation in the amountconsisted of $14,993.
■ All compensation components for non-U.S.16,616 individuals. The majority of these employees were converted into U.S. dollars using fiscal year 2020 annually set internal exchange rates.
■ With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the "Total" column of our 2020 Summary Compensation Table included in this Proxy Statementare full-time (or full-time equivalent) employees, with less than 1% who are employed on page 34 and incorporated by reference under Item 11 of Part III of our Annual Report.a part-time basis.
⯀ | To find the median of the annual total compensation of all our employees (other than our Chief Executive Officer) as of December 30, 2023, we used the annual base pay, including salary or hourly wages, from our global payroll records. We annualized the compensation of all permanent employees who were hired in fiscal 2023 and remained employed at the end of fiscal 2023, although they did not work for the Company or its consolidated subsidiaries for the entire fiscal year. We did not make any cost-of-living adjustments in identifying the median employee. |
⯀ | Our median employee is a full-time, hourly employee located in the Americas, with a base salary of $7,811. Once the median employee was identified, we collected, from local HR, all other compensation elements, including overtime pay, productivity awards, and meal, transportation and housing benefits to calculate the median employee’s total annual compensation in the amount of $10,343. |
⯀ | All compensation components for non-U.S. employees were converted into U.S. dollars using fiscal year 2023 annually set internal exchange rates. |
⯀ | With respect to the annual total compensation of our Chief Executive Officer, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this Proxy Statement on page 38 and incorporated by reference under Item 11 of Part III of our Annual Report. |
The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee'semployee’s annual total compensation allow companies to use estimates, assumptions, adjustments and statistical sampling. Accordingly, our pay ratio is an estimate calculated in accordance with Item 402(u) and may not be comparable to the pay ratios reported by other companies.
| | | 2024 Proxy Statement | | | 49 |
TABLE OF CONTENTS PAY VERSUS PERFORMANCE The following table presents specified executive compensation and financial performance measures for the Company’s four most recently completed fiscal years. | 2023 | | | $6,641,506 | | | $8,714,124 | | | $2,044,741 | | | $2,860,318 | | | $145.06 | | | $159.56 | | | $259.5 | | | $11.75 | | | 2022 | | | $6,932,546 | | | $1,230,392 | | | $2,268,933 | | | $327,118 | | | $118.21 | | | $124.87 | | | $373.3 | | | $17.26 | | | 2021 | | | $6,170,131 | | | $10,569,353 | | | $2,155,166 | | | $3,602,524 | | | $167.40 | | | $151.36 | | | $283.8 | | | $12.88 | | | 2020 | | | $4,065,061 | | | $9,624,985 | | | $1,722,056 | | | $3,711,472 | | | $134.50 | | | $120.75 | | | $130.0 | | | $6.23 | |
(1)
| The amount of the PEO and each Non-PEO NEO’s Summary Compensation Table total has been updated to reflect a correction that was made to the supplemental plan company matching contribution for the fiscal year ended December 31, 2022. Each PEO and Non-PEO NEO received the following corrected company matching contribution attributable to the 2022 fiscal year: Mr. Heinzmann, $121,157 (previously reported as $38,882); Ms. Sethna, $42,801 (previously reported as $12,756); Mr. Stafford, $30,446 (previously reported as $14,412); Ms. Chu, $11,150 (previously reported as $2,370); and Mr. Nayar, $18,103 (previously reported as $9,957). These updates have been reflected in the graphs on pages 53-54. |
(2)
| The table below outlines the amounts included as additions and deductions in the calculation of Compensation Actually Paid (CAP) for our Principal Executive Officer (PEO), David W. Heinzmann. |
| 2023 | | | $6,641,506 | | | $2,291,379 | | | $2,304,434 | | | $3,184,473 | | | $3,483,958 | | | $8,714,124 | | | 2022 | | | $6,932,546 | | | $1,960,305 | | | $1,984,294 | | | $361,791 | | | ($2,119,346) | | | $1,230,392 | | | 2021 | | | $6,170,131 | | | $1,715,931 | | | $1,396,152 | | | $2,936,037 | | | $4,575,268 | | | $10,569,353 | | | 2020 | | | $4,065,061 | | | $1,543,674 | | | $1,340,271 | | | $3,083,060 | | | $5,360,809 | | | $9,624,985 | |
(a)
| The methodology for estimating the fair value of restricted stock unit awards is consistent with the methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K. The methodology for estimating the fair value of stock option awards at each applicable measurement date is consistent with the Black Scholes methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K, with the exception of the expected life assumption. The expected life assumption used in estimating the stock option valuations noted above ranges from 0.50 to 4.02 years. |
(b)
| The reported value of equity awards represents the grant date fair value of restricted stock unit awards as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year. |
(c)
| The reported value of option awards represents the grant date fair value of stock option awards as reported in the “Option Awards” column of the Summary Compensation Table for each applicable year. |
(d)
| The equity award adjustments incorporate the following additions (or subtractions, as applicable): |
(i)
| the respective year-end estimated fair value of any equity awards granted in the applicable year that are both outstanding and unvested as of each year; 2023: $2,564,562; 2022: $1,870,840; 2021: $2,027,364; 2020: $2,996,776 |
(ii)
| the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $382,942; 2022: ($780,780); 2021: $673,996; 2020: $443,446 |
| | | 2024 Proxy Statement | | | 50 |
TABLE OF CONTENTS (iii)
| for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $236,969; 2022: ($728,269); 2021: $234,677; 2020: ($357,162) |
(e)
| The option award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: |
(i)
| the respective year-end estimated fair value of any equity awards granted in the applicable year that are both outstanding and unvested as of each year; 2023: $2,656,968; 2022: $1,816,846; 2021: $1,856,699; 2020: $5,129,591 |
(ii)
| the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $396,935; 2022: ($1,904,221); 2021: $2,124,028; 2020: $847,250 |
(iii)
| for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $430,055; 2022: ($2,031,971); 2021: $594,541; 2020: ($616,032) |
(3)
| The table below outlines the amounts included as additions and deductions in the calculation of compensation actually paid (CAP) for Non-PEO NEOs. |
| 2023 (f) | | | $2,044,741 | | | $590,901 | | | $594,262 | | | $874,386 | | | $1,126,354 | | | $2,860,318 | | | 2022 (g) | | | $2,268,933 | | | $536,076 | | | $542,601 | | | ($29,073) | | | ($834,065) | | | $327,118 | | | 2021 (h) | | | $2,155,166 | | | $649,769 | | | $428,533 | | | $1,067,878 | | | $1,457,782 | | | $3,602,524 | | | 2020 (i) | | | $1,722,056 | | | $564,463 | | | $620,423 | | | $1,119,992 | | | $2,054,310 | | | $3,711,472 | |
(a)
| The methodology for estimating the fair value of restricted stock unit awards is consistent with the methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K. The methodology for estimating the fair value of stock option awards at each applicable measurement date is consistent with the Black Scholes methodology as described in Note 12 “Stock-Based Compensation” of the Notes to Consolidated Financial Statements included in our 2021-2023 Annual Reports on Form 10-K, with the exception of the expected life assumption. The expected life assumption used in estimating the stock option valuations noted above ranges from 0.50 to 4.02 years. |
(b)
| The reported value of equity awards represents the grant date fair value of restricted stock unit awards as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year. |
(c)
| The reported value of option awards represents the grant date fair value of stock option awards as reported in the “Option Awards” column of the Summary Compensation Table for each applicable year. |
(d)
| The equity award adjustments for stock in each applicable year include the addition (or subtraction, as applicable) of the following: |
(i)
| the respective year-end estimated fair value of any equity awards granted in the applicable year that are both outstanding and unvested as of each year; 2023: $661,349; 2022: $511,609; 2021: $771,458; 2020: $863,429 |
(ii)
| the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $115,945; 2022: ($339,626); 2021: $235,855; 2020: $360,228 |
(iii)
| for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $97,092; 2022: ($201,056); 2021: $60,565; 2020: ($103,665) |
| | | 2024 Proxy Statement | | | 51 |
TABLE OF CONTENTS (e)
| The option award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: |
(i)
| the respective year-end estimated fair value of any equity awards granted in the applicable year that are outstanding and unvested as of each year; 2023: $685,173; 2022: $496,813; 2021: $572,479; 2020: $1,477,981 |
(ii)
| the amount of change in estimated fair value as of the end of each applicable year as compared to the prior fiscal year for all awards granted in prior years that remain outstanding and unvested as of each year; 2023: $110,705; 2022: ($795,064); 2021: $731,620; 2020: $760,646 |
(iii)
| for all awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date compared to the estimated fair value from the prior fiscal year; 2023: $330,476; 2022: ($535,814); 2021: $153,683; 2020: ($184,317) |
(f)
| For fiscal year 2023, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Maggie Chu, and Deepak Nayar |
(g)
| For fiscal year 2022, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Maggie Chu, and Deepak Nayar |
(h)
| For fiscal year 2021, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Maggie Chu, and Deepak Nayar |
(i)
| For fiscal year 2020, the following NEOs are included in the calculation: Meenal A. Sethna, Ryan K. Stafford, Matthew J. Cole, and Deepak Nayar |
(4)
| For years 2020 – 2023, the Peer Group used for Total Shareholder Return (TSR) is the group of companies consisting of the Dow Jones Electrical Components and Equipment Industry Group Index consistent with the peer group as disclosed in Item 5 in our 2023 Annual Report on Form 10-K. |
(5)
| Net Income is shown in millions, as reported in our 2023 Annual Report on Form 10-K. |
(6)
| Company Selected Measure used is Adjusted Earnings Per Share. Adjusted Earnings Per Share (AIP EPS) is calculated as described for “AIP EPS” in footnote 1 on page 33. |
| | | 2024 Proxy Statement | | | 52 |
TABLE OF CONTENTS The following graphs illustrate the relationship of Compensation Actually Paid (CAP) for our PEO and the average CAP for our Non-PEO NEOs in relationship to our Total Shareholder Return, Net Income and Adjusted EPS (the Company Selected Measure (CSM)). Additionally, the graphs also describe the relationship between our own TSR versus our peer group TSR. Compensation actually paid is influenced by numerous factors, including, but not limited to, share price volatility, new grant issuance and timing of vesting, as well as other factors. | | | | | | | | | | 2021 | | 2024 Proxy Statement | 45 | | 53 |
Table of ContentsTABLE OF CONTENTS The most important Financial Performance measures used by the Company to link Compensation Actually Paid to Company Performance for the most recently completed fiscal year for PEO and Non-PEO NEOs are as follows: (i)
| Adjusted Earnings Per Share |
(iii)
| Cash from Operations |
| | | 2024 Proxy Statement | | | PROPOSAL NO.3-APPROVALANDRATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
54 |
TABLE OF CONTENTS PROPOSAL NO. 3 - APPROVAL AND RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS Subject to approval of the stockholders, the Audit Committee of the Board has appointed Grant ThorntonDeloitte & Touche LLP ("Grant Thornton"(“Deloitte”), an independent registered public accounting firm, as independent auditors to examine the annual consolidated financial statements of the Company and its subsidiary companies for the fiscal year ending January 1, 2022.December 28, 2024. The stockholders are being asked to approve and ratify such appointment. A representative of Grant Thornton LLPDeloitte will be present atavailable during the meeting to make a statement, if such representative so desires, and to respond to stockholders’ questions. Although approval and ratification of the Audit Committee’s appointment of Deloitte is not required, we value the opinions of our stockholders and believe that stockholder approval and ratification of the appointment is a good corporate governance practice. In the event of a negative vote on this proposal, the Audit Committee will reconsider its appointment of Deloitte. Even if this appointment is approved and ratified, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of Littelfuse and its stockholders. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL AND RATIFICATION OF GRANT THORNTONDELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY'SCOMPANY’S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING JANUARY 1, 2022DECEMBER 28, 2024
Audit and Non-Audit Fees The following table presents the approximate fees for professional audit services rendered by Grant Thornton LLP for the audit of our financial statements for professional services rendered for the fiscal years ended December 26, 202030, 2023 and December 28, 2019:31, 2022: | | | | | | | | | | | | | Fiscal Year 2020 | | Fiscal Year 2019 | Audit Fees (1) | $2,585,000 | | $2,599,200 | Audit-Related Fees (2) | $27,500 | | $26,500 | Tax Fees | $0 | | $0 | All Other Fees (3) | $6,500 | | $6,500 | Total | $2,619,000 | | $2,632,200 |
(1)Includes fees related to U.S. GAAP audit and statutory audits of foreign subsidiaries in each year.
(2)Includes fees related to audits of employee benefit plans in each year.
(3)Includes fees related to access to an on-line accounting research tool in each year.
| Audit Fees (1) | | | $3,357,450 | | | $3,259,200 | | | Audit-Related Fees (2) | | | $30,000 | | | $29,500 | | | Tax Fees (3) | | | $99,000 | | | $185,700 | | | All Other Fees (4) | | | $6,500 | | | $6,500 | | | Total | | | $3,492,950 | | | $3,480,900 | |
(1)
| Includes fees related to U.S. GAAP audit and statutory audits of foreign subsidiaries in each year. |
(2)
| Includes fees related to audits of employee benefit plans in each year. |
(3)
| Includes fees related to tax, transfer pricing and expatriate tax advice and compliance in each year and other miscellaneous services. |
(4)
| Includes fees related to access to an on-line accounting research tool in each year. |
Audit Committee Pre-Approval Policies and Procedures All audit and non-audit services and the related fees are pre-approved by the Audit Committee, which considers, among other things, the possible effect of the performance of such services on the registered public accounting firm’s independence. The Audit Committee pre-approves the annual engagement of the principal independent registered public accounting firm, including the performance of the annual audit, statutory audits at foreign locations, quarterly reviews and tax services. The Chairperson of the Audit Committee has been delegated the authority to provide any necessary specific pre-approval for services that have not been previously pre- approved,pre-approved, but he must report the pre-approval at the next meeting of the Audit Committee. | | | | | | | | | | 2021 | | 2024 Proxy Statement | 46 | | 55 |
TABLE OF CONTENTS REPORT OF THE AUDIT COMMITTEE Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended, or the Exchange Act that might incorporate by reference filings, including this Proxy Statement, in whole or in part, the following Report of the Audit Committee shall not be incorporated by reference into any such filings.
The Audit Committee oversees our financial reporting process and compliance with the Sarbanes-Oxley Act of 2002 on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in our Annual Report on Form 10-K for the 20202023 fiscal year with management, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Audit Committee also reviewed and discussed the audited financial statements with the independent auditors and discussed the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”) and the Commission. In addition, the Audit Committee has discussed with the independent auditors their independence from management and the Company, including the matters in the written disclosures and letter received by the Audit Committee from the independent auditors as required by the applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee regarding the independent auditors’ independence, and considered the compatibility of non-audit services with the auditors’ independence. The Audit Committee discussed with the independent auditors the overall scope and plans for their audits. The Audit Committee meets with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of our internal control over financial reporting, and the overall quality of our financial reporting. The Audit Committee held fivesix meetings during fiscal 2020. 2023. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board (and the Board has approved) that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 26, 2020,30, 2023, for filing with the SEC. | | | | | Audit Committee: | | Audit Committee: | | | | | | Cary T. Fu (Chairman) | | | | Kristina A. Cerniglia | | | | Gayla J. Delly | | | | Maria C. Green | | | | Anthony Grillo | | John E. Major |
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 47 |
| | | STOCKHOLDER PROPOSALS
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TABLE OF CONTENTS Stockholder Proposals for Inclusion in the2022 2025 Proxy Statement.Statement. If a stockholder wants to submit, in accordance with SEC Rule 14a-8, a proposal for inclusion in our proxy statement for the 20222025 annual meeting, the proposal must be received at our principal executive offices, in writing, by November 12, 2021.[November 14, 2024]. All proposals should be submitted, along with proof of ownership of our common stock in accordance with Rule 14a-8(b)(2), to our Corporate Secretary at 8755 West Higgins Road, Suite 500, Chicago, Illinois 60631. Stockholder proposals must comply with SEC Rule 14a-8, Delaware law and our bylaws. Failure to deliver a proposal by these means may result in it not being deemed timely received.
Our bylaws provide proxy access to eligible stockholders. The proxy access bylaw provision provides that a stockholder, or a group of up to twenty stockholders, that own three percent or more of the Company'sCompany’s outstanding common stock continuously for at least three years may submit director nominees for up to the greater of (i) two directors or (ii) twenty percent of the Board. A stockholder'sstockholder’s notice of nomination of one or more director candidates to be included in the Company'sCompany’s proxy statement and ballot pursuant to Article II, Section 8 of our bylaws must be received at our principal executive offices, in writing by November 12, 2021[November 14, 2024] (i.e., no later than 120 days prior to the anniversary of the mailing of the Company'sCompany’s proxy statement for the immediately preceding year). Other Stockholder Proposals for Presentation at the2022 2025 AnnualMeeting. Meeting. Stockholders of record who do not submit a proposal for inclusion in our proxy materials under SEC Rule 14a-8, but who instead intend to nominate a person for election as director or to introduce an item of business at the 20222025 annual meeting, must provide advance written notice to us in accordance with our bylaws. Our bylaws require that in order to nominate persons to our Board or to present a proposal for action by stockholders at an annual meeting of stockholders, a stockholder must provide advance written notice to our Corporate Secretary, which notice must be delivered to or mailed and received at our principal executive offices not later than the close of business on the 60th day (February 21, 202224, 2025 for the 20222025 annual meeting of stockholders) nor earlier than the close of business on the 90th day prior (January 22, 202225, 2025 for the 20222025 annual meeting of stockholders) to the first anniversary of the preceding year’s annual meeting of stockholders. In the event that the date of the annual meeting to which such stockholder’s notice relates is more than 30 days before or more than 60 days after such anniversary date, for notice by the stockholder to be timely it must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such annual meeting is first made by us. In the event that the number of directors to be elected to the Board is increased and there is no public announcement by us naming all of the nominees for director or specifying the size of the increased Board at least 70 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice will be considered timely, but only with respect to nominees for any new positions created by such increase, if it is delivered to or mailed and received at our principal executive offices not later than the close of business on the 10th day following the day on which such public announcement is first made by us. Additionally, stockholders of record who intend to solicit proxies in support of director nominees other than the Company’s nominees pursuant to SEC Rule 14a-19, must also provide the additional information required by SEC Rule 14a-19 no later than February 24, 2025, and must comply with certain other requirements set forth in our bylaws. The stockholder’s notice must contain detailed information specified in our bylaws and, if applicable, SEC Rule 14a-19, and should be addressed to our Corporate Secretary at 8755 West Higgins Road, Suite 500, Chicago, Illinois 60631. You may obtain a copy of our bylaws upon request by writing to the Corporate Secretary at our principal executive offices. As to any proposal that a stockholder intends to present to stockholders without inclusion in our Proxy Statement for our 20222025 annual meeting of stockholders, the proxies named in management’s proxy for that meeting will be entitled to exercise their discretionary authority on that proposal by advising stockholders of such proposal and how they intend to exercise their discretion to vote on such matter, unless the stockholder making the proposal solicits proxies with respect to the proposal to the extent required by Rule 14a-4(c)(2) under the Exchange Act. In order for proposals of stockholders made outside of Rule 14a-8 under the Exchange Act to be considered timely within the meaning of Rule 14a-4(c) under the Exchange Act, such proposals must be received by our Corporate Secretary at the address above by February 21, 2022. 24, 2025. The chairman of the 20222025 annual meeting may refuse to allow the transaction of any business or acknowledge the nomination of any person not made in compliance with the procedures set forth for such matters in our bylaws. | | | | | | | | | | 2021 | | 2024 Proxy Statement | 48 | | 57 |
We do not know of any matters to be acted upon at the Annual Meeting other than those discussed in this Proxy Statement. If any other items or matters are properly presented before the Annual Meeting, the proxy holders will vote on such matters in their discretion. A proxy granted by a stockholder will give discretionary authority to the proxy holders to vote on any matters introduced pursuant to these procedures, subject to applicable SEC rules.
| | | | | | | | | | 2021 | | 2024 Proxy Statement | 49 | | 58 |
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