Active, Independent Board | •10 of 11 directors are independent | | •Executive sessions of independent directors held at each regularly scheduled meeting •Independent Board Chair •Independent Audit Committee, Governance Committee, and Talent & Compensation Committee •High rate of attendance at Board and committee meetings •Complete access to management •Access to outside advisors at the company’s expense | The Robust Corporate Governance | •Board review of Directors recommendscompany strategy on at least an annual basis •Active Board involvement in management succession planning •Robust Board oversight on ESG matters •Comprehensive and strategic approach to enterprise risk management •Declassified Board •Majority vote standard in uncontested elections •Commitment to Board refreshment with four new Board members added in 2022 with a vote FOR thediverse set of skills and experience | Shareholder Rights | •Proxy access right •No poison pill •Proactive investor outreach program; see "Stakeholder Engagement” on page 8 •Annual election of Scott P. Anderson, Robert C. Biesterfeld Jr., Kermit R. Crawford, Timothy C. Gokey, Mark A. Goodburn, Mary J. Steele Guilfoile, Jodee A. Kozlak, Henry J. Maier, James B. Stake, Paula C. Tolliver,all directors •Plurality vote standard in contested elections •Annual “say-on-pay” vote | Board and Henry W. "Jay" Winship asManagement Checks and Balances | •Prohibition on pledging and hedging •Stock ownership guidelines for directors of C.H. Robinson Worldwide, Inc.and management •Annual Board and Committee self-evaluation •Clawback policy |
PROPOSAL ONE: ELECTION OF DIRECTORS
Corporate Governance
BOARD OF DIRECTORS GOVERNANCE MATTERSBoard Meetings and Attendance
The Board of Directors (or the “Board”) has a policy that all directors and nominees nominated for election at the Annual Meeting are expected to attend the Annual Meeting. In 2021,2022, all of the ten director nominees who were directors at that time attended the Annual Meeting. During 2021,2022, the Board of Directors held five14 meetings. Each director holding office during the year attended at least 75% of the aggregate of the meetings of the Board (held during the period for which he or she had been a director) and the meetings of the committees of the Board on which he or she served (held during the period for which he or she served on a committee). The Board has four committees: the Audit Committee, the Talent & Compensation Committee, the Governance Committee, and the Capital Allocation and Planning Committee. Currently, members and chairs of these committees are:
| | | | | | | | | | | | | | | | | | | | | | | | Directors | Audit | Talent & Compensation | Governance | Capital Allocation and Planning | Scott P. Anderson(1)
| x | | Chair | x | Robert C. Biesterfeld Jr. | | | | x | Kermit R. Crawford(1)
| | x | x | | Wayne M. Fortun(1)
| | x | x | | Timothy C. Gokey(1)
| x | x | | | Mary J. Steele Guilfoile(1)
| | x | x | | Jodee A. Kozlak(1)
| | Chair | x | | Henry J. Maier(1)
| | | x | x | Brian P. Short(1)
| x | | x | | James B. Stake(1)
| Chair | x | | | Paula C. Tolliver(1)
| x | x | | | Henry W. "Jay" Winship(1)
| | x | | Chair |
(1)Director is indicated as independent.
Board Leadership Structure
Mr. Anderson, an independent director who has served on the Board since 2012, serves as the independent chairman of the Board.
Our Corporate Governance Guidelines provide that the chairman, in consultation with other Board members, sets the agenda for regular meetings of the Board, and the chair of each committee is responsible for the agendas for the meetings of the applicable committee. Directors and committee members are encouraged to suggest agenda items and may raise other matters at meetings.
We believe that our leadership structure supports the Board’s risk oversight function. Strong independent directors serve as chairs of the committees most directly involved in the risk oversight function, there is open communication between management and the Board, and all directors are involved in the risk oversight function.
Risk Oversight
The Board is actively involved in the oversight of risks that could affect the company. This oversight is conducted primarily through the Audit Committee. The Audit Committee Charter establishes that one of the responsibilities of the Audit Committee is to review the key risks or exposures and assess the steps management has taken to minimize such risk on an annual basis. Management is responsible for our Enterprise Risk Management ("ERM") program, which includes key risk identification, mitigation efforts, day-to-day management, and communication to the Audit Committee. The ERM program allows the company to evaluate risks and their potential impact to the company based on multiple factors, including but not limited to business conditions, company capabilities, and risk tolerance. The ERM program is facilitated by the company's Internal Audit Department and consists of identifying and classifying risks, enlisting risk owners, facilitating risk mitigation efforts, and communicating results to senior management and the Audit Committee. Changes in
| | Engaged and Active Board of Directors | | | | | | | | | | | 12 | | 14 | | 2022 Proxy Statement | | | |
PROPOSAL ONE: ELECTION OF DIRECTORS
the company’s risk profile may also be identified through routine internal audits and ongoing discussions with members of the company's operational staff and management. A significant component of the ERM program is the annual risk assessment, which includes interviews of various key personnel and risk owners within the company, as well as with members of the Audit Committee. The results of the annual risk assessment are presented to the Audit Committee. The Audit Committee provides periodic risk assessment updates to the Board and solicits input from the Board regarding the company’s risk management practices. In addition, the Talent & Compensation Committee periodically reviews the company’s compensation programs to ensure that they do not encourage excessive risk-taking. Additional review or reports on enterprise risks are conducted as needed by the Board or the committees.
ESG Oversight
C.H. Robinson is committed to being a strong corporate citizen and our value of operating with integrity is core to our success. We believe that identifying and managing critical ESG topics helps ensure the sustainability of our company and drives long-term value for our stakeholders. At C.H. Robinson, our ESG efforts are focused on climate action, people empowerment and ethical business practices. Oversight of these issues starts with the Board and our chief executive officer ("CEO"), as well as our chief human resources and ESG officer.
The full Board receives regular updates on ESG strategy and risk management. Additionally, the Board committees oversee specific areas of our ESG efforts. The Governance Committee receives annual updates on ESG strategy and risks, as well as environmental sustainability; the Talent & Compensation Committee has oversight of talent strategies, diversity, equity, and inclusion, company culture and other talent-related topics. The Audit Committee has oversight of ethics and compliance, risk management, cybersecurity and data privacy.
See our annual ESG Report on our website for more information. Our 2021 report will be available in April 2022 and will include disclosures aligned to Sustainability Accounting Standards Board and Task Force on Climate-Related Financial Disclosure.
The Audit Committee
All of our Audit Committee members are “independent” under applicable Nasdaq listing standards and Securities and Exchange Commission rules and regulations. The Board has determined that all five members of the Audit Committee, Messrs. Anderson, Gokey, Short, and Stake, and Ms. Tolliver, meet the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the quality and integrity of the financial reports of the company. The Audit Committee has the sole authority to appoint, review, and discharge our independent auditors, and has established procedures for the receipt, retention, and response to complaints regarding accounting, internal controls, or audit matters. In addition, among other responsibilities in the Audit Committee Charter, the Audit Committee is responsible for:
(1)Reviewing the scope, timing, and costs of the audit with the company's independent registered public accounting firm and reviewing the results of the annual audit;
(2)Assessing the independence of the outside auditors on an annual basis, including receipt and review of a written report from the independent auditors regarding their independence consistent with applicable rules of the Public Company Accounting Oversight Board;
(3)Reviewing and approving in advance the services provided by the independent auditors;
(4)Overseeing the internal audit function;
(5)Reviewing the company’s significant accounting policies, financial results, and earnings releases and the adequacy of our internal controls and procedures;
(6)Reviewing the risk management status of the company, including cybersecurity risks; and
(7)Reviewing and approving related-party transactions.
The Audit Committee held eight meetings during 2021. The Audit Committee has engaged Deloitte & Touche LLP as the independent auditor for fiscal year 2022 and is recommending that the company’s shareholders ratify this appointment at the Annual Meeting. The report of the Audit Committee is found on page 47 of this Proxy Statement. | | Board of Director meetings in 2022 | All directors attended at least 75% of 2022 Board and committee meetings | 100% Director nominee attendance at the 2022 Annual Meeting | Each 2022 regularly scheduled Board meeting also included a non-management director executive session | | | | | | | | | | | 2022 Proxy Statement | | 13 |
PROPOSAL ONE: ELECTION OF DIRECTORS
The Talent & Compensation Committee
All of our Talent & Compensation Committee members are “independent” under applicable Nasdaq listing standards and Internal Revenue Service and Securities and Exchange Commission rules and regulations. Mr. Winship was appointed to the Talent & Compensation Committee on February 28, 2022. The Talent & Compensation Committee has oversight responsibilities relating to executive compensation, employee compensation and benefits programs and plans, and succession and leadership development. In addition, among other responsibilities in the Talent & Compensation Committee Charter, the Talent & Compensation Committee is responsible for:
(1)Reviewing the performance of the chief executive officer;
(2)Determining all elements of the compensation and benefits for the chief executive officer and other executive officers of the company;
(3)Reviewing and approving the company’s compensation programs, including equity-based plans, for management employees generally;
(4)Reviewing the company’s policies, practices, performance, disclosures and progress toward goals with respect to significant issues of Diversity, Equity & Inclusion ("DEI") and Human Capital Management, including the alignment of such efforts with the company’s overall strategy;
(5)Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and
(6)Reviewing executive officers’ employment agreements; separation and severance agreements; change in control agreements; and other compensatory contracts, arrangements, and benefits.
The Talent & Compensation Committee held five meetings during 2021. See 2021 Compensation Discussion and Analysis beginning on page 19 including Section VI, Compensation Process, beginning on page 31, for a discussion of the role played by our chief executive officer in compensation decisions. The Talent & Compensation Committee report on executive compensation is found on page 42 of this Proxy Statement.
The Governance Committee
All members of our Governance Committee are “independent” under applicable Nasdaq listing standards. The Governance Committee serves in an advisory capacity to the Board on matters of organization and the conduct of Board activities. Among other responsibilities in the Governance Committee Charter, the Governance Committee is responsible for:
(1)Periodically reviewing and making recommendations to the Board as to the size, diversity, and composition of the Board and criteria for director nominees;
(2)Identifying and recommending candidates for service on the Board;
(3)Reviewing and revising the company’s Corporate Governance Guidelines, including recommending any necessary changes to the Corporate Governance Guidelines to the Board;
(4)Leading the Board in an annual review of the performance of the Board and the Board committees;
(5)Making recommendations to the Board regarding Board committee assignments;
(6)Making recommendations to the Board on whether each director is independent under all applicable requirements;
(7)Making recommendations to the Board with respect to the compensation of non-employee directors;
(8)Periodically reviewing with the company’s chief legal officer developments that may have a material impact on the company’s corporate governance programs, including related compliance policies; and
(9)Reviewing, at least annually, the company’s policies, practices, performance, disclosures, and progress toward goals with respect to significant issues of Environmental, Social, and Governance, including the alignment of such efforts with the company’s overall strategy.
The Governance Committee considers Board nominees recommended by shareholders. The process for receiving and evaluating these nominations from shareholders is described below under the caption “Nominations.”
PROPOSAL ONE: ELECTION OF DIRECTORS
The Governance Committee held three meetings during 2021.
The Capital Allocation and Planning Committee
The Capital Allocation and Planning Committee serves in an advisory capacity to the Board on matters of capital allocation and strategic planning. The Capital Allocation and Planning Committee is responsible for objectively assessing value creation opportunities and to support and make recommendations to the Board and to support management’s review of the company’s capital allocation, operations and strategy and enhanced transparency and disclosures to shareholders.
The Capital Allocation and Planning Committee did not hold any meetings during 2021, because it was formed in March 2022.
Committee Charters and Governance Documents The charters for each of the required Committeescommittees of the Board of Directors, our Corporate Governance Guidelines, and our company’s Code of Ethics, which are all a part of our Corporate Compliance Program, are posted under the Governance section of the Investors page of our website at www.chrobinson.com.investor.chrobinson.com. Each of our committees reviews its charter on an annual basis to assess its adequacy and effectiveness and then recommends any proposed changes to the Board for approval. Our Corporate Governance Guidelines are reviewed by our Board and the Governance Committee on a regular basis to determine whether any revisions are advisable based on stakeholder feedback, changes in rules or regulations, or updated best governance practices. Certain sections of this Proxy Statement reference or refer you to materials on our website at www.chrobinson.com. These materials are not incorporated by reference in, and are not a part of, this Proxy Statement. Board Structure Board Leadership Structure Ms. Kozlak, an independent director who has served on the Board since 2013, serves as the independent Chair of the Board. Our Board believes it important to retain the flexibility to allocate the responsibilities of the Board chair and CEO positions in any manner that it determines to be in the best interests of the company based on the then-current circumstances. We have remained committed to having an independent Chair of the Board during this time of our CEO transition when our prior Chairman of the Board is no longer independent due to his service as Interim CEO. Our Corporate Governance Guidelines provide that the Board chair, in consultation with other Board members, sets the agenda for regular meetings of the Board of Directors, and the chair of each committee is responsible for the agendas for the meetings of the applicable committee. Directors and committee members are encouraged to suggest agenda items and may raise other matters at meetings. We believe that our leadership structure supports the Board’s risk oversight function. Strong independent directors serve on our Audit Committee—the committee most directly involved in the risk oversight function—and there is open communication between management and the Board, and all directors are involved in the risk oversight function.
Board Committees The Board has four committees: the Audit Committee, the Talent & Compensation Committee, the Governance Committee, and the Capital Allocation and Planning Committee. Currently, members and chairs of these committees are: | | | | | | | | | | | | | | | Directors | Audit | Talent & Compensation | Governance | Capital Allocation and Planning | Scott P. Anderson |
| |
| | James J. Barber, Jr.(1) | | | | | Kermit R. Crawford(1) | | | | | Timothy C. Gokey(1) | | | | | Mark A. Goodburn(1) | | | | | Mary J. Steele Guilfoile(1) | | | | | Jodee A. Kozlak(1) | | | | | Henry J. Maier(1) | | | | | James B. Stake(1) | | | | | Paula C. Tolliver(1) | | | | | Henry W. “Jay” Winship(1) | | | | |
| | | | | | | | | | | | | | | (1)Director is indicated as independent. | | Member | | Chair |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Audit Committee 2022 Meetings: 7 | James B. Stake, Chair | Other Members: àJames J. Barber, Jr. àTimothy C. Gokey àMark A. Goodburn àPaula C. Tolliver | | | | | | | | | | | | | | | | | | | Function: The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the quality and integrity of the financial reports of the company. The Audit Committee has the sole authority to appoint, review, and discharge our independent auditors, and has established procedures for the receipt, retention, and response to complaints regarding accounting, internal controls, or audit matters. | | | | | | | | | | | | | | | | | | | | | | | | | | Key Responsibilities: Among other responsibilities in the Audit Committee Charter, the Audit Committee is responsible for: 1.Reviewing the scope, timing, and costs of the audit with the company’s independent registered public accounting firm and reviewing the results of the annual audit; 2.Assessing the independence of the outside auditors on an annual basis, including receipt and review of a written report from the independent auditors regarding their independence consistent with applicable rules of the Public Company Accounting Oversight Board; 3.Reviewing and approving in advance the services provided by the independent auditors; 4.Overseeing the internal audit function; 5.Reviewing the company’s significant accounting policies, financial results, and earnings releases and the adequacy of our internal controls and procedures; 6.Reviewing the risk management status of the company, including cybersecurity risks; and 7.Reviewing and approving related-party transactions. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Independence and Financial Expertise: All of our Audit Committee members are “independent” under applicable Nasdaq listing standards and Securities and Exchange Commission rules and regulations. James J. Barber, Jr. was appointed to the Audit Committee on January 1, 2023. The Board has determined that all five members of the Audit Committee, Messrs. Barber, Gokey, Goodburn, and Stake, and Ms. Tolliver, meet the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Talent & Compensation Committee 2022 Meetings: 5 |
Jodee A. Kozlak, Chair | Other Members: àKermit R. Crawford àTimothy C. Gokey àMary J. Steele Guilfoile àHenry W. “Jay” Winship | | | | | | | | | | | | | | | | | | | Function: The Talent & Compensation Committee has oversight responsibilities relating to overall talent strategy, executive compensation, employee compensation and benefits programs and plans, succession and leadership development, and diversity, equity & inclusion. | | | | | | | | | | | | | | | | | | | | | | | | | | Key Responsibilities: Among other responsibilities in the Talent & Compensation Committee Charter, the Talent & Compensation Committee is responsible for: 1.Reviewing the performance of the Chief Executive Officer; 2.Determining all elements of the compensation and benefits for the Chief Executive Officer and other executive officers of the company; 3.Reviewing and approving the company’s compensation program, including equity-based plans, for management employees generally; 4.Reviewing the company’s policies, practices, performance, disclosures, and progress toward goals with respect to significant issues of DEI and Human Capital Management, including the alignment of such efforts with the Company’s overall strategy; 5.Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and 6.Reviewing executive officers’ employment agreements; separation and severance agreements; change in control agreements; and other compensatory contracts, arrangements, and benefits. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Independence: All of our Talent & Compensation Committee members are “independent” under applicable Nasdaq listing standards and Internal Revenue Service and Securities and Exchange Commission rules and regulations. | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Governance Committee 2022 Meetings: 4 | Kermit R. Crawford, Chair | Other Members: àMary J. Steele Guilfoile àJodee A. Kozlak àHenry J. Maier | | | | | | | | | | | | | | | | | | Function: The Governance Committee identifies for the Board individuals qualified to become Board members, considers nominees recommended by shareholders, and recommends nominees to the Board for election as directors. The Committee also adopts and revises corporate governance guidelines applicable to the Company and serves in an advisory capacity to the Board on matters of organization and the conduct of Board activities. | | | | | | | | | | | | | | | | | | | | | | | | | | Key Responsibilities: Among other responsibilities in the Governance Committee Charter, the Governance Committee is responsible for: 1.Periodically reviewing and making recommendations to the Board as to the size, diversity, and composition of the Board and criteria for director nominees; 2.Identifying and recommending candidates for service on the Board; 3.Reviewing and revising the company’s Corporate Governance Guidelines, including recommending any necessary changes to the Corporate Governance Guidelines to the Board; 4.Leading the Board in an annual review of the performance of the Board and the Board committees; 5.Making recommendations to the Board regarding Board committee assignments; 6.Making recommendations to the Board on whether each director is independent under all applicable requirements; 7.Making recommendations to the Board with respect to the compensation of non-employee directors; 8.Periodically reviewing with the company’s Chief Legal Officer developments that may have a material impact on the company’s corporate governance programs, including related compliance policies; and 9.Reviewing, at least annually, the company’s policies, practices, performance, disclosures, and progress toward goals with respect to significant issues of Environmental, Social, and Governance (“ESG”), including the alignment of such efforts with the company’s overall strategy. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Independence: All members of our Governance Committee are “independent” under applicable Nasdaq listing standards. | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Capital Allocation and Planning Committee 2022 Meetings: 12 | Henry W. “Jay” Winship, Chair | Other Members: àScott P. Anderson àMark A. Goodburn àHenry J. Maier àPaula C. Tolliver | | | | | | | | | | | | | | | | | | | Function: The Capital Allocation and Planning Committee objectively assesses value creation opportunities and supports and makes recommendations to the Board to assist in its and management’s review of, and planning for, the company’s capital allocation, operations and strategy, and enhanced transparency and disclosures to shareholders. | | | | | | | | | | | | | | | | | | | | | | | | | | Key Responsibilities: Among other responsibilities, the Capital Allocation and Planning Committee is responsible for: 1.Reviewing and evaluating the company’s business and financial strategies and growth opportunities, including performance toward those strategies and opportunities and making recommendations to the Board in respect thereof; 2.Reviewing and making recommendations to the Board regarding the company’s capital allocation, cash flow, technology initiatives, capital expenditures, and financing requirements; 3.Reviewing and making recommendations to the Board regarding potential material mergers, acquisitions, divestitures, and other key strategic transactions; and 4.Reviewing and evaluating the company’s annual operating and capital plans and budgets and making recommendations to the Board based on its findings. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Independence: While the Capital Allocation and Planning Committee is not subject to particular Nasdaq independence requirements, a majority of the members of our Capital Allocation and Planning Committee are “independent” under applicable Nasdaq listing standards. | | | | | | | | | | | | | | | | |
Role of the Board of Directors Strategic Oversight The Board of Directors generally meets at least four times a year to oversee, review, and, where appropriate, approve fundamental operating, financial, risk management, and other corporate strategies, as well as major plans and objectives. The Board also monitors the effectiveness of management policies and decisions, including the execution of strategies. The Board regularly reviews and discusses, among others, each of the topics listed below, with significant inputs from each Committee to whom oversight for such topic has been assigned, as applicable and appropriate. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | àQuarterly and fiscal year financial results àEnvironmental, Social, and Governance àLong range financial planning and review of financial models àLong-term strategic planning and M&A àRisk management, mitigation, and insurance updates àReview and revision, as necessary, of policies and committee charters | | àCybersecurity, Privacy, and Compliance àHuman Capital Management and DEI àLeadership succession and Talent planning àExecutive compensation àDirector compensation àBoard composition, effectiveness, and self-assessment results | | | | | | | |
Risk Oversight | | | | BOARD RESPONSIBILITIES àThe Board is actively involved in the oversight of risks that could affect the company. | |
| | | | | | | | | | AUDIT COMMITTEE àRisk oversight is conducted primarily through the Audit Committee. àThe Audit Committee Charter provides that the Audit Committee is responsible for at least annually reviewing the company’s key risks or exposures and assessing the steps management has taken to minimize such risk. àProvides periodic risk assessment updates to the Board and solicits input from the Board regarding the company’s risk management practices. | TALENT & COMPENSATION COMMITTEE àPeriodically reviews the company’s compensation programs to ensure that they do not encourage excessive risk-taking. | | |
| | | | MANAGEMENT RESPONSIBILITIES àManagement is responsible for our Enterprise Risk Management (“ERM”) program, which includes key risk identification, mitigation efforts, day-to-day management, and communication to the Audit Committee. | |
ESG Structure C.H. Robinson is committed to being a strong corporate citizen and our emphasis on integrity is core to our success. We believe that identifying and managing critical ESG topics helps ensure the sustainability of our company and drives long-term value for our stakeholders. At C.H. Robinson, our ESG efforts are focused on climate action, people empowerment, and ethical business practices. Oversight of these issues starts with the Board and our Chief Executive Officer (“CEO”), as well as our Chief Human Resources and ESG Officer. The full Board receives regular updates from management, including our VP of ESG, on ESG strategy and risk management. Additionally, the Board committees oversee specific areas of our ESG efforts. The Governance Committee receives regular updates on ESG strategy and risks, as well as environmental sustainability. The Talent & Compensation Committee has oversight of talent strategies; diversity, equity, and inclusion; company culture; and other talent-related topics. The Audit Committee has oversight of ethics and compliance, risk management, cybersecurity, data privacy, as well as reporting on ESG metrics. See our annual ESG Report on our website for more information. Our 2022 report will be available in the spring of 2023. It will be informed by the Global Reporting Initiative and will include disclosures aligned to the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-Related Financial Disclosure (“TCFD”). Climate change is evaluated within our enterprise risk register. Our internal audit team leads risk management for the company, which is reviewed quarterly and aligned to the risk factors reported annually in our Annual Report on Form 10-K. ESG issues and impacts of climate change, its consequences, and opportunities are included in this process, including the impact severe weather events could have on our general operations, the transportation industry, and our fresh produce sourcing. In 2022, the company continued to evolve the enterprise climate risk process and published the first TCFD report for our U.S. and Canadian operations. Our team also began the process of conducting a joint quantitative and qualitative climate scenario analysis for risks and opportunities in our global operations using a number of climate risk scenarios. Workshops commenced in early 2023. Our Chief Financial Officer works with our CEO, Chief Legal Officer, and Chief Human Resources and ESG Officer to review climate-related issues as they arise. They provide feedback on recommended actions and give final approval regarding which actions are brought to the Board. In addition to regularly scheduled updates to the Board, we add time to review climate-related topics if they arise outside of the scheduled time. | | | | | | | OVERSIGHT OF ENTERPRISE RISK MANAGEMENT |
The Enterprise Risk Management (ERM) program, overseen by our Chief Financial Officer and the Audit Committee, allows the company to evaluate risks and their potential impact to the company based on multiple factors, including but not limited to, business conditions, company capabilities, and risk tolerance. The ERM program is facilitated by the
company’s Internal Audit Department and consists of a framework that identifies and classifies risks, enlists risk owners, facilitates risk mitigation efforts, and communicates results to senior management and the Audit Committee. Changes in the company’s risk profile may also be identified through routine internal audits and ongoing discussions with members of the company’s operational staff and management. A significant component of the ERM program is the annual risk assessment, which includes interviews of various key personnel and risk owners within the company, as well as with members of the Audit Committee. The results of the annual risk assessment are presented to the Audit Committee. Additional review or reports on enterprise risks are conducted as needed by the Board or the committees. | | | | | | | OVERSIGHT OF CYBERSECURITY |
The company’s global reach and the ever-evolving threat landscape makes data security and privacy a critical priority for us and our Audit Committee receives regular reports on this topic. Our global cybersecurity team reports to our Chief Technology Officer and together, they are responsible for our network security, engineering processes, and business continuity. This team partners with leaders from all our global regions to align our strategic goals with our business priorities. We have processes and programs in place to meet our global compliance obligations and work with our employees and teams across the globe to ensure security and data protection principles are integrated into the way we do business every day. We utilize a set of controls that integrates guidance from the EU’s General Data Protection Regulations and alignment with the U.S. National Institute of Standards and Technology’s framework. In addition, we submit to independent assessments by external parties, including System and Organizational Controls (“SOC”) 2 Type 2 audit, to ensure all safeguards function as they should. Our Technology Continuity program is equally as robust and follows industry standards for disaster recovery practices, including close alignment with ISO 27031:2011 and the Disaster Recovery Institute International’s Professional Practices. Our program includes multiple components that act as an additional line of defense—among them are regular functional recovery and tabletop exercises, cybersecurity exercises, program audit and maintenance, awareness and training, business impact analysis, and risk evaluation and controls. | | | | | | | OVERSIGHT OF DATA PRIVACY |
Our global data privacy program aligns closely with our global cybersecurity team regarding the management of a framework that represents a harmonized set of privacy and data protection controls, encompassing our global and regional obligations to personal information. The program is evaluated within our enterprise risk management register. The director of our global data privacy program reports to our Chief Legal Officer and aligns closely with regional counsel in North and South America, Asia, and Europe. Our global data privacy program extends across our business and shared service organizations to embed privacy by design principles within our operations and in alignment and coordination with our information security program. This is done through both active data protection impact/privacy impact assessment (“DPIA/PIA”) engagements with business and technical partners, as well as through structured privacy by design checklists embedded into technical and business process development. Technical teams participate in regular and ongoing workshops that support security and privacy by design initiatives. All C.H. Robinson employees who process personal information must comply with privacy policies and processes designed to achieve compliance. Employees complete annual information protection and privacy training that supports our Code of Ethics and guides employees on their roles and responsibilities to collect, protect, use, and manage the personal information entrusted to them. Ongoing privacy policy compliance audits and risks identified during DPIA/PIA activities inform enterprise risk management processes and engagement from senior leaders, as well as visibility to the Audit Committee through internal audit processes on privacy risks. | | | | | | | OVERSIGHT OF TALENT & CULTURE |
Our Board of Directors and Talent & Compensation Committee have oversight of our Talent Management and DEI efforts. They receive regular updates from our Chief Human Resources and ESG Officer on our key strategic initiatives, success measurements, and other relevant matters pertaining to human resources and DEI including, but not limited to,
hiring and retention, culture, employee engagement, succession planning, compensation and benefits, and human resources or DEI-related risks. Evaluation of CEO and Management. Our Board has delegated primary oversight responsibility for the evaluation of our CEO to the Talent & Compensation Committee. The Talent & Compensation Committee, in collaboration with the Chair of the Governance Committee, reports its evaluation of the CEO’s performance at least annually. The Board reviews this report and any other updates from the Talent & Compensation Committee on this topic in executive sessions that usually occur at each regularly scheduled Board meeting. In addition, the Board provides inputs to the CEO, who conducts an annual assessment of the performance and development of other senior management. Succession Planning. Succession planning for our senior management positions is critical to the company’s long-term success. The Board annually reviews the company’s succession plans. The Board also identifies potential successors for the CEO position. The CEO participates in this process by providing the Board with recommendations or evaluations of potential successors and identifying and recommending development plans for such individuals. The CEO is expected to recommend to the Board on an ongoing basis one or more successors in the event of an unexpected inability of the CEO to continue to serve.
Other Corporate Governance Policies, Practices, and Processes Annual Board Evaluations Each year, the Board conducts a self-evaluation to determine whether it and its committees are functioning effectively. The Governance Committee is responsible for seeking comments from all directors and reporting its evaluation of Board and committee performance to the Board on an annual basis. As part of the self-evaluation process, the Chair of the Governance Committee may have individual conversations with each director to discuss individual and group dynamics and performance. The full Board reviews and discusses the evaluation report to determine what, if any, action could improve Board and Board committee performance. Shareholder Communications with the Board C.H. Robinson shareholders and other interested parties may send written communications to the Board of Directors or to any individual director by mailing it to C.H. Robinson Worldwide, Inc., Board of Directors, c/o C.H. Robinson Corporate Secretary, 14701 Charlson Road, Suite 1200, Eden Prairie, MN 55347. These communications will be compiled by the corporate secretary and periodically submitted to the Board of Directors or individual directors. Nominations
The Governance Committee considers director nominee recommendations from a wide variety of sources, including members of the Board of Directors, business contacts, community leaders, and members of management. The Governance Committee will also consider shareholder recommendations for director nominees using the same selection criteria and qualifications as nominees identified by other sources, as described below. The Governance Committee may also engage search firms to assist in the director recruitment process.
On March 1, 2022, the company entered into a cooperation agreement with Ancora Holdings Group, LLC, its investment advisor affiliates and other individuals and entities in its shareholder group (the"Ancora Group"), pursuant to which we appointed Mr. Maier and Mr. Winship to the Board of Directors, among other things. The cooperation agreement governs certain matters, such as the size of the Board of Directors and the composition of the Board’s committees. Effective upon execution of the cooperation agreement, the Ancora Group withdrew its notice of intent to nominate director candidates for election to the Board at the Annual Meeting.
The Governance Committee determines the selection criteria and qualifications of director nominees based upon the needs of the company. The Board of Directors believes that the directors should possess the highest personal and professional ethics and integrity and be committed to representing the long-term interests of the company’s shareholders. Preferred qualifications also include current or recent experience as a chief executive officer or senior leadership and expertise in a particular business discipline. Directors should be able to provide insights and practical wisdom based on their experience and expertise. The company is committed to diversity, equity, and inclusion, and as such, the Corporate Governance Guidelines provide, and the Governance Committee believes, that creating a Board of Directors with a diversity of gender, ethnicity, background, talent, experience, accomplishments, and perspectives is in the best interests of the company and its shareholders. The company is committed to considering candidates for the Board of Directors, regardless of gender, ethnicity, and national origin. Any search firm retained to assist the Governance Committee in seeking director candidates is instructed to consider these commitments.
Shareholders who would like to directly nominate a director candidate must give written notice to the company’s corporate secretary, either by personal delivery or by United States mail, at the following address: 14701 Charlson Road, Eden Prairie, MN 55347. The shareholder’s notice must be received by the corporate secretary no later than (a) 90 days before the anniversary date of the previous year’s Annual Meeting or (b) the close of business on the tenth day following the date on which notice of a special meeting of shareholders for election of directors is first given to shareholders. Accordingly, nominations for the 2023 Annual Meeting must be received by February 4, 2023, unless the alternative deadline is
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PROPOSAL ONE: ELECTION OF DIRECTORS
triggered. For each proposed nominee, the shareholder’s notice must comply with and include all information that is required to be disclosed under our Bylaws, any applicable Securities and Exchange Commission rules and regulations, and any applicable laws. The written notice must also include a written consent of the proposed nominee, agreeing to stand for election if nominated by the Governance Committee, and to serve as a director if appointed by the Board of Directors. The shareholder’s notice must also include:
(1)The name and address of the shareholder making the nomination;
(2)The number of C.H. Robinson shares entitled to vote at the meeting held by the shareholder;
(3)A representation that the shareholder is a holder of record of C.H. Robinson Common Stock entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person named in the notice; and
(4)A description of all arrangements or understandings between the shareholder and each nominee.
We also provide shareholders with a “proxy access” right that entitles shareholders meeting certain eligibility requirements to include nominees for director in our proxy statement. The proxy access right entitles a shareholder, or group of up to 20 shareholders, owning at least 3% of our outstanding shares of Common Stock continuously for at least three years to nominate and include in our proxy statement director nominees constituting up to the greater of two individuals or 20% of the Board of Directors. The shareholder’s notice must be delivered to the company’s corporate secretary as set forth above and must be received by the corporate secretary no earlier than 150 days, and no later than 120 days, before the anniversary date of the mailing of the previous year’s proxy statement, unless an alternative deadline under our Bylaws is triggered. Accordingly, nominations for inclusion in our proxy statement for the 2023 Annual Meeting must be received no earlier than October 23, 2022, and no later than November 22, 2022, unless an alternative deadline is triggered. In addition, the shareholder’s notice must comply with the information requirements described above for other direct nominations of director candidates, as well as the additional notice and information requirements described in our Bylaws.
The Governance Committee initially evaluates a prospective nominee based on his or her resume and other background information that has been provided to the committee. For further review, a member of the Governance Committee will contact those candidates whom the Governance Committee believes are qualified, may fulfill a specific need of the Board of Directors, and would otherwise best contribute to the Board of Directors. Based on the information the Governance Committee learns during this process, it determines which nominee(s) to recommend to the Board of Directors to submit for election. The Governance Committee uses the same process for evaluating all nominees, regardless of the source of the nomination.
Any shareholder interested in presenting a nomination for consideration by the Governance Committee prior to the 2023 Annual Meeting should do so as early as possible, to provide adequate time to consider the nominee and comply with our Bylaws.
Compensation of Directors Overview Every two to three years, the Governance Committee engages with Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”),an independent compensation consultant to review board compensation market data. As necessary, this data is used by the Governance Committee in preparation for determining and recommending changes to board compensation. The last review was completed in 2021 by Aon’s Human Capital Solutions practice, a division of Aon plc (“Aon”).
PROPOSAL ONE: ELECTION OF DIRECTORS
The table below outlines the current annual compensation program for our non-employee directors: | | | | | | | | | Compensation Element | Compensation Amount ($) | Non-Employee Director Compensation: | | Annual Cash Retainer | $110,000 | Annual Equity Award (RSUs) | 175,000(1) | Independent Chairman of the Board Additional Cash Retainer | 100,000 | Committee Service Compensation(2): | Chair | Member | Audit Committee | $30,000 | $12,500 | Governance Committee | 20,000 | 7,500 | Talent & Compensation Committee
| 20,000 | 7,500 |
| | | | | | | | | | | | | | | | | | Compensation Element | Compensation Amount ($) |
| Non-Employee Director Compensation: | | | | | | Annual Cash Retainer | | | | $110,000 | | | Annual Equity Award (RSUs) | | | | 175,000 | | | Independent Chair of the Board Additional Cash Retainer | | | | 100,000 | | | Committee Service Compensation: | | Chair | | Member | | Audit Committee | | $30,000 | | | $12,500 | | | Talent & Compensation Committee | | 20,000 | | | 7,500 | | | Governance Committee | | 20,000 | | | 7,500 | | | Capital Allocation and Planning Committee(1) | | 20,000 | | | 7,500 | | |
(1)After reviewing board compensation market data presented by Aon, the Governance Committee approved a $25,000 increase to the annual equity award (RSU) value in December 2021. The RSU value increased from $150,000 to $175,000, effective January 1, 2022. (2)Members of the Capital Allocation and Planning Committee, including non-employee directors, dodid not earn additional compensation for their participation.participation during 2022. On February 9, 2023, the Capital Allocation and Planning Committee was determined to be a standalone Committee with compensation, effective for 2023, commensurate with the Governance Committee and Talent & Compensation Committee.
Cash retainers are paid in quarterly installments, at the end of each calendar quarter. BeforeOn an annual basis before the retainers are earned,following year’s director compensation is determined, the directors may elect to receive all or a portion of their retainers in cash, stock, or restricted stock units (“RSUs”) that are immediately vested and are payable to the directors after their service on the Board of Directors has ended. The annual equity award is delivered in the form of fully vested restricted stock unitsRSUs that settle in shares of stock after the director leaves the Board of Directors. Directors are required to own a minimum of five times their annual cash retainer in company stock no later than five years after joining the Board of Directors. We base the stock ownership requirements on all shares of company stock deemed owned by a director, which includes vested stock options, vested and unvested restricted stock units,RSUs and stock beneficially owned by the director, including owned in a trust, by a spouse, or by dependent children for our directors. All directors are in compliance with the company stock ownership requirements. C.H. Robinson also reimburses non-employee directors for reasonable expenses incurred in attending Board of Directors meetings and for expenses incurred in obtaining continuing education related to service on our Board of Directors. Directors who are also employees of C.H. Robinson are not separately compensated for serving as a member of the Board of Directors.
PROPOSAL ONE: ELECTION OF DIRECTORS
Compensation of Directors
20212022 Director Compensation Table
| Name(1) | Name(1) | Fees Earned or Paid in Cash | Stock Awards(1) | Total | Aggregate Number of Shares Subject to Stock Awards Outstanding as of December 31, 2021(2) | Name(1) | Fees Earned or Paid in Cash | | Stock Awards(2) | Total | Aggregate Number of Shares Subject to Stock Awards Outstanding as of December 31, 2022(3) | Scott P. Anderson | Scott P. Anderson | $ | 242,500 | | | $ | 120,000 | | $ | 362,500 | | 21,904 | Scott P. Anderson | | $242,500 | | | $140,000 | | | $382,500 | | 23,672 | | James J. Barber, Jr.(4) | | James J. Barber, Jr.(4) | | 4,730 | | | 6,087 | | | 10,870 | | 83 | | Kermit R. Crawford | Kermit R. Crawford | 125,000 | | | 120,000 | | 245,000 | | 1,970 | Kermit R. Crawford | | 125,000 | | | 140,000 | | | 265,000 | | 3,738 | | Wayne M. Fortun | 125,000 | | | 120,000 | | 245,000 | | 18,663 | | Wayne M. Fortun(5) | | Wayne M. Fortun(5) | | 42,886 | | | 48,032 | | | 90,918 | | 19,229 | | Timothy C. Gokey | Timothy C. Gokey | 130,000 | | (3) | 120,000 | | 250,000 | | 12,515 | Timothy C. Gokey | | 130,000 | | (6) | | 140,000 | | | 270,000 | | 15,595 | | Mark A. Goodburn(7) | | Mark A. Goodburn(7) | | 79,828 | | (6) | | 91,223 | | | 171,051 | | 2,028 | | Mary J. Steele Guilfoile | Mary J. Steele Guilfoile | 125,000 | | | 120,000 | | 245,000 | | 13,620 | Mary J. Steele Guilfoile | | 125,000 | | | 140,000 | | | 265,000 | | 15,388 | | Jodee A. Kozlak | Jodee A. Kozlak | 137,500 | | | 120,000 | | 257,500 | | 17,645 | Jodee A. Kozlak | | 137,500 | | | 140,000 | | | 277,500 | | 19,413 | | Brian P. Short | 130,000 | | (3) | 120,000 | | 250,000 | | 44,626 | | Henry J. Maier(8) | | Henry J. Maier(8) | | 98,243 | | | 117,056 | | | 215,299 | | 1,501 | | Brian P. Short(5) | | Brian P. Short(5) | | 44,601 | | (6) | | 48,032 | | | 92,633 | | 45,612 | | James B. Stake | James B. Stake | 147,500 | |
| 120,000 | | 267,500 | | 25,189 | James B. Stake | | 147,500 | | | 140,000 | | | 287,500 | | 26,957 | | Paula C. Tolliver | Paula C. Tolliver | 130,000 | | | 120,000 | | 250,000 | | 8,443 | Paula C. Tolliver | | 130,000 | | | 140,000 | | | 270,000 | | 10,211 | | Henry W. “Jay” Winship(8) | | Henry W. “Jay” Winship(8) | | 98,243 | | | 117,056 | | | 215,299 | | 1,501 | |
(1)Robert Biesterfeld served as the company’s Chief Executive Officer in 2022 and did not receive any additional compensation for services provided as a director.
(1)(2)The dollar value reflected in this column was awarded as fully vested restricted stock units of the company. Shares equal to the number of restricted stock units will be distributed to the director after his or her board membership terminates. The number of units issued to a director is determined by dividing the $150,000 valueAnnual Equity Award Value of $175,000 by the closing price of a share of our common stock on the date of grant. In accordance with Accounting Standards Codification 718 ("(“ASC 718"718”), these awards are discounted to reflect the restrictions on the awardee'sawardee’s ability to sell or transfer vested awards until his or her board membership terminates. The fair value of these awards is established based on the market price on the date of grant, discounted for post-vesting holding restrictions.
(2)(3)Includes fully vested restricted stock units.
(3)(4)Mr. Barber was appointed to the Board of Directors on December 15, 2022.
(5)Mr. Fortun and Mr. Short retired from the board of directors following the company’s annual meeting on May 5, 2022. (6)The director has elected to receive the dollar value of these fees in restricted stock units of the company. Shares equal to the number of restricted stock units will be distributed after termination of board membership. Talent & Compensation Committee Interlocks(7)Mr. Goodburn was elected to the board of directors at the company’s annual meeting on May 5, 2022.
(8)Mr. Maier and Insider Participation The membersMr. Winship were appointed to the Board of the Talent & Compensation Committee are Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak (Chair), James B. Stake, Paula C. Tolliver, and Henry W. "Jay" Winship. The Talent & Compensation Committee members have no interlocking relationships requiring disclosure and are deemed independent under the rules of the Securities and Exchange Commission.
Directors on February 28, 2022.
| | | | | | | | | 18 | | | | | | | Proposal 2: Advisory Vote on the Compensation of Named Executive Officers (“Say-on-Pay”)C.H. Robinson is providing its shareholders the opportunity to cast a non-binding advisory vote on the compensation of its named executive officers (“NEOs”), as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion in this Proxy Statement. At the Annual Meeting, shareholders will vote on the following advisory resolution regarding the compensation of NEOs as described in this Proxy Statement: “RESOLVED, that the shareholders of C.H. Robinson Worldwide, Inc. approve, on an advisory basis, the compensation paid to the company’s named executive officers as disclosed in the ‘Compensation Discussion and Analysis’ section, and compensation tables and narrative discussion contained in the ‘Executive Compensation’ section in this Proxy Statement.” C.H. Robinson, with guidance and oversight from our Talent & Compensation Committee, has adopted an executive compensation philosophy that is intended to be consistent with our overall compensation approach and to achieve the following goals: 1.Pay incentive compensation aligned with company earnings performance; 2.Encourage executives to make long-term career commitments to C.H. Robinson and align executives’ interests with those of our shareholders; 3.Balance incentive compensation to achieve both annual and long-term profitability and growth; 4.Emphasize supporting both team and company goals, business transformation, and company culture; and 5.Provide a level of total compensation necessary to attract, retain, and motivate high quality executives. We believe that our executive compensation program is aligned with the long-term interests of our shareholders. In considering this proposal, we encourage you to review the 2022 Compensation Discussion and Analysis section of this Proxy Statement and related compensation tables and narrative discussion beginning on page 43. It provides detailed information on our executive compensation, including our compensation philosophy and objectives and the 2022 compensation of our NEOs. C.H. Robinson has requested shareholder approval of the compensation of our NEOs on an annual basis. Our compensation disclosures, including our Compensation Discussion and Analysis, compensation tables, and discussion in this Proxy Statement, are done in accordance with the Securities and Exchange Commission’s compensation disclosure rules. àAs an advisory vote, this Proposal 2 is non-binding. However, the Board of Directors and the Talent & Compensation Committee value the opinions of our shareholders and will consider the results of the vote when making future compensation decisions for our NEOs. | 2022 Proxy Statement | | | | | | | | BOARD VOTING RECOMMENDATION The Board of Directors recommends a vote FOR the advisory approval of the compensation of named executive officers. | | | | |
2021 EXECUTIVE COMPENSATION
2021Executive Compensation Discussion and Analysis The following Compensation Discussion & Analysis (“CD&A”) describes the background, objectives, and structure of our executive compensation programs. This CD&A is intended to be read in conjunction with the tables beginning on pages 33, which provide further historical compensation information for the following Named Executive Officers (“NEOs”):
•Robert C. Biesterfeld Jr. | | | | 2022 COMPENSATION DISCUSSION AND ANALYSIS The following Compensation Discussion & Analysis (“CD&A”) describes the background, objectives, and structure of our executive compensation programs. This CD&A is intended to be read in conjunction with the tables beginning on page 66, which provide further historical compensation information for the following named executive officers (“NEOs”): àRobert C. Biesterfeld Jr., Former President and Chief Executive Officer(1) àMichael P. Zechmeister, Chief Financial Officer àArun D. Rajan, Chief Operating Officer(2) àMac S. Pinkerton, President of North American Surface Transportation (“NAST”) àMichael J. Short, President of Global Forwarding | |
(1)Mr. Biesterfeld’s service as President and Chief Executive Officer ended on December 31, 2022. •Michael P. Zechmeister, Chief Financial Officer
•Mac S. Pinkerton, President(2)Mr. Rajan held the position of North American Surface Transportation ("NAST")
•Arun D. Rajan, Chief Product Officer
•Michael J. Short, President of Global Freight Forwarding and was appointed Chief Operating Officer on October 31, 2022.
I. Executive Summary
Compensation Philosophy and Structure The objectivePerformance-based compensation and alignment of individual, company, and shareholder goals are integral components of our pay for performanceC.H. Robinson culture and management approach. Performance-based compensation makes up a significant portion of our employees’ total compensation package.
C.H. Robinson, with guidance and oversight from our Talent & Compensation Committee, has adopted an executive officer compensation philosophy that is intended to attractbe consistent with our overall compensation approach and retain, across our entire employee base, top talent who will drive business growth and deliver long-term value for the company and our shareholders. Our philosophy is built onto achieve the following principles:goals: •1.Pay forincentive compensation aligned with company performance;
•2.Align theexecutives’ interests with those of managementour shareholders and encourage high-performing executives to our shareholders;make long-term career commitments to C.H. Robinson;
•Reward profitable3.Balance incentive compensation to achieve both annual and long-term profitability and growth;
•Support4.Emphasize supporting both team and company goals, business transformation, and company culture; and
•Pay5.Provide a level of total compensation necessary to attract, retain, and motivate highly qualified executives.
Compensation decisions regarding individual executive officers are based on several factors, including competitive market competitive compensation that attracts, retains, and motivates top talent and allows for upside opportunity to reward that talent for the company's top quartile performance. The company reviews market survey data provided by an independent compensation consultant to assess market competitivenesspractices, individual performance, level of responsibility, unique skills of the componentsexecutive, tenure, demands and complexity of NEO compensation, including appropriate mixthe position, and critical nature of cash and equity. The company also relies on broader survey data to assess market competitiveness of executive compensation components.the role.
2022 C.H. Robinson Performance Highlights and Incentive Payouts 2021 will be remembered2022 was another year of significant change for transportation markets as a year with somethe cost of purchased transportation declined rapidly from their pandemic peaks in the second half of the most significant supply chain disruptionsyear. Slowing consumer demand and improved capacity allowed many of the challenges shippers have faced since the industry has experienced in decades.beginning of the pandemic, including port congestion and equipment and labor shortages, to ease and transportation markets to operate more efficiently. Despite these challenges, theimprovements, shippers continue to navigate elevated inventory levels, macroeconomic uncertainty, and inflationary pressures. The C.H. Robinson team effectively helpedcontinued to help our customers and contract carriers navigate through the unprecedented levelchanging market cycle with best-in-class solutions provided by our global network of supply chain disruption, allowing us to provide the superior level of serviceexperts that global customers have come to expect from C.H. Robinson. The strength and resilience of our model and team were evident as we again generated record annual results in 2021, and demand for our global suite of services and for our digital freight platform continues to grow.2022.
Performance Overview The following summarizes C.H. Robinson'sRobinson financial, operational, and strategic achievements in 20212022 including year-over-year operating comparisons to 2020: •Total revenues increased 42.5% to $23.1 billion, driven by higher pricing and volumes across our global suite of services.
•Adjusted gross profits(1) ("AGP") increased 30.7% to $3.2 billion, driven by increased pricing and volumes in nearly all service lines, most notably ocean and truckload services, resulting in higher AGP per transaction.
•Income from operations totaled $1.1 billion, up 60.7% from last year primarily due to the increase in AGP, partially offset by the increase in operating expenses.
•Diluted earnings per share (EPS) increased 69.6% to $6.31.
•Delivered a 620-basis point favorable spread in our 2021 NAST productivity index, which represents the difference between the year-over-year change in NAST volume and the change in NAST headcount.
•Cash returned to shareholders increased 119% to $886 million.
•Increased our regular quarterly dividend 7.8% from $0.51 per share to $0.55 per share.
2021 EXECUTIVE COMPENSATION
•153% year-over-year increase in volume driven through our real-time, dynamic pricing tools in 2021. $875 million of revenue was generated through this digital channel, up 193% over 2020.
•Over 1.2 million fully automated bookings in our NAST truckload business, an increase of 65% compared to 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total revenues increased 6.9% to $24.7 billion, driven by higher pricing in nearly all of our service lines, most notably truckload, LTL, and ocean services. | 2.3 billion digital transactions with customers and carriers in 2022, a 30% year-over-year increase. | Income from operations totaled $1.3 billion, up 17.1% from last year primarily due to the increase in AGP, partially offset by the increase in operating expenses. | Adjusted gross profits(1) (“AGP”) increased 14.0% to $3.6 billion, driven by higher adjusted gross profit per transaction in truckload and LTL services. | | | | | | | | | | | | | Increased our regular quarterly dividend 10.9% from $0.55 per share to $0.61 per share. | Cash returned to shareholders increased 100.2% to $1.8 billion. | Diluted earnings per share (EPS) increased 11.4% to $7.40. | | | | | | | | | | | | | | | | | | | | | |
(1)Adjusted gross profit is a non-GAAP measure. Additional information about adjusted gross profit, including a reconciliation to gross profit, is available in our annual reportAnnual Report on Form 10-K for the year ended December 31, 2021.2022. The cost of purchased transportation in the North American surface transportation market experienceddeclined significantly over the course of 2022 as excess carrier capacity combined with slowing demand led to softening market conditions. This compared to extremely tight carrier capacitymarket conditions in 2021 as strong demand combined with ongoingchallenges due to driver availability and supply chain disruptions caused by port congestion and weather events drove the cost of purchased transportation costs to significantly higherhistoric levels. This comparedMany of these challenges subsided over the course of 2022, allowing routing guides to an extremely volatileperform more efficiently, which resulted in a comparatively soft market in 2020 resulting fromversus 2021. Despite the early stages of the COVID-19 pandemic and restrictions implemented to control the outbreak, which drove significant volatility in customerslowing demand and carrier capacity. Throughout the COVID-19 pandemic we have continued to work with our customers to meet our contractual commitments and reshape our portfolio by adapting our pricing to reflect the rising cost environment and participating to a greater extent in the spot market. The strength ofsoftening market conditions, our operating model resulted in consistentgenerated growth in our combined NASTboth truckload and less-than-truckload ("LTL"less than truckload (“LTL”) volume compared to the significant volatility seen adjusted gross profits and a modest increase in the industry.truckload volumes. The best-in-class solutions delivered by our network of supply chain experts resulted in strong financial results in 2021. 2022. NAST APTI (asadjusted pre-tax income (“APTI”; defined on page 21)51) finished well above target at $542,430$784,340 in 2021,2022, driven by higher AGP per shipment in truckload and LTL services and partially offset by a 5.5% increase1.0% decrease in our combined NAST truckload and LTL volumes. NAST APTI was one of the performance measures for our annual cash incentive plan for 20212022 for one of our NEOs.
The cost of purchased transportation fell significantly in the global forwarding market in the second half of 2022 as global demand slowed in most trade lanes. The peak shipping season historically experienced in the second half of each year, which would typically drive elevated rates and volumes, remained uncharacteristically soft. Shippers in the U.S. and Europe continued to struggle with elevated inventory levels as consumer demand has also been significantlynegatively impacted by supply chain disruptions causedinflation and macroeconomic uncertainty. In an effort to adapt to this slowing demand, steamship lines continue to rationalize services by ongoingreducing capacity where possible with blank sailings and slow steaming. All of these factors have allowed port congestion along with equipment and labor shortagesto ease in 2021. These disruptions combined with strong demand have continued to drive purchased transportation costs for both ocean and air freight to historic levels.many parts of the world. As with the North American surface transportation market, this compared to extremely tight market conditions in 2021 as strong demand combined with supply chain disruptions caused by port congestion along with equipment and labor shortages drove purchased transportation to historic levels in 2021 and the first half of 2022. The slowdown of global demand has also had a significant volatility seenimpact on the air freight market. Air freight pricing and volumes have significantly declined, driven by shippers maintaining higher inventory levels, declining consumer demand, and improving ocean schedule reliability, eliminating ocean freight to air freight conversions. Air freight capacity continues to improve and drive rates lower in 2020 resulting frommany trade lanes due to increased belly capacity as commercial flights become more frequent after being significantly reduced during the COVID-19 pandemic. Our network of supply chain experts helped our customers effectively manage this challengingthe volatile global freightforwarding market resulting in strongmodest growth in both AGP and volumes.compared to the historic results achieved in the prior year. Ocean volumes increased 17.0%decreased 0.5%, air freight tonnage increased 45.5%decreased 9.0%, and customs brokerage volumes increased 13.5% driven by higher award sizes from existing customers and new customer growth.3.5%. The strong execution by our Global Forwarding team resulted in record-breaking financial results and elevatedabove target incentive compensation achievement. Global Forwarding APTI growth finished at $504,623$463,071 in 2021. 2022. Global Forwarding APTI was one of the performance measures for one of our 20212022 NEOs. The strong financial results noted above resulted in an increase of diluted earnings per share from $3.72 in 2020 to $6.31 in 2021 to $7.40 in 2022 and translated into above-target incentive payouts under our annual cash incentive plan for our NEOs and earned vesting in our performance-based equity awards. Our enterprise APTI, which is one of the measures used to determine annual cash incentive payments for all of our NEOs in 2021,2022, finished at $1,029,675$1,211,294 in 20212022 and we achieved above-target incentive payouts for our NEOs. Incentive Payouts | | | | | | | | | | | | Element | Key Features | Result | | | | | | 2022 Annual Incentive Cash Plan | Based on adjusted pre-tax income (APTI) and, for NEOs other than CEO, MBOs, including one specific to DEI. | Above Target | h | | | | | | | | | Performance-Based Equity Awards(1) | Aligned to Diluted EPS Growth | At Target | n | | | | | | | | | Adjusted Gross Profit PSUs(2) | Aligned to AGP Growth | Above Target | h | | | | |
(1)Granted in 2018 and 2020. (2)Granted in 2021 and 2022.
Say-on-Pay and Response to Shareholder Feedback The Talent & Compensation Committee considers the results of the shareholders’ advisory vote on the compensation of NEOs. At our 2022 Annual Meeting, our say-on-pay proposals received “for” votes that represented approximately 92% of the shares voted on the proposals. The Talent & Compensation Committee considered the results of these say-on-pay votes and other shareholder feedback when evaluating our compensation practices and policies in 2022, and when setting the compensation of our NEOs for 2022. The Talent & Compensation Committee believes that our say-on-pay proposal results demonstrate shareholders’ support of our compensation practices. | | | | | | | 92% Voted in Favor of our Executive Compensation Program at our 2022 Annual Meeting of Shareholders |
Based on feedback received from our shareholders, as well as the Talent & Compensation Committee’s consideration of competitive market practices and its goal of linking executive pay and performance, the Talent & Compensation Committee approved the following changes to our compensation programs:
| | | | | | | | | | | | 20 | | | | | | | | | WHAT WE HEARD... | HOW WE RESPONDED... | | | | | | | àConsider, on a going-forward basis, having the treatment of equity awards that are assumed or converted following a change in control be double trigger | 2022àEffective January 1, 2023, C.H. Robinson has expanded its double trigger for all equity awards, including performance-based awards | | | | | | | àEnhance disclosure regarding holding requirements | àC.H. Robinson has enhanced our disclosure to our ownership guidelines and we have included the policy in this Proxy Statement | | | | | | | àConsider disclosing a peer group that can be used to make executive compensation decisions | àC.H. Robinson has selected and adopted a formal peer group for purposes of executive compensation | | | | | | | àConsider the metrics in the annual incentive plan | àIn 2023, C.H. Robinson introduced a new Annual Incentive Plan, which consists of blended volume growth, operating income margin and MBO/SBO scorecards | | | | | | | àConsider the performance period for the long term incentive plan | àIn 2023, C.H. Robinson introduced new performance stock unit (PSU) awards where 33.33% is measured on diluted earnings per share (EPS), 33.33% on adjusted gross profit (AGP), and 33.34% on average adjusted operating income margin; each of these measures has a cumulative 3-year performance period | | | | | | | àConsider removing the counting of vested stock options and unvested performance shares in the stock ownership guidelines | àIn 2023, C.H. Robinson removed the counting of vested stock options and unvested performance shares for stock ownership guidelines | | | | | | | | | |
2021 EXECUTIVE COMPENSATIONExecutive Compensation
Key Compensation Practices Our compensation framework and pay-for-performance practices provide appropriate incentives to our executive officers to achieve our financial goals and align our executives with our shareholders’ interests. | | | | | | | | | | | | | | | | | | | | | WHAT WE DO àWe Do require approval of our executive compensation and incentive payouts by our independent Talent & Compensation Committee àWe Do target pay opportunity that is generally aligned to the 50th percentile of general market data and a compensation peer group of companies that are of similar size, as well as aligned to our business model of a platform company and two-sided market place àWe Do have the majority of pay at risk and performance-based àWe Do have the majority of annual incentive compensation performance metrics directly tied to a key driver of shareholder value (APTI) àWe Do have appropriate caps on incentive plan payouts; two times target opportunity àWe Do have double trigger change of control provisions in time-based equity awards made after January 1, 2022, and performance stock unit awards made after January 1, 2023 àWe Do have long-term incentives that are performance-based to create alignment with shareholders àWe Do have long-term incentive plan performance metrics that reward management for scaling the business and creating profitable market share growth àWe Do have robust stock ownership guidelines and a minimum of a 1-year deferred delivery requirement for shares earned under equity awards àWe Do have a clawback policy àWe Do have our equity compensation subject to forfeiture and clawback if executive violates restrictive covenants àWe Do have an Executive Separation and Change in Control Plan àWe Do have a Talent & Compensation Committee comprised entirely of independent directors àWe Do have our Talent & Compensation Committee engage with an independent consultant àWe Do have our Talent & Compensation Committee regularly meet in executive session without management present | WHAT WE DON’T DO àWe Don’t have guaranteed bonuses àWe Don’t have supplemental pension or executive retirement plan (SERP) benefits àWe Don’t allow repricing of underwater options or stock appreciation rights without shareholder approval àWe Don’t allow hedging or pledging of company shares by our officers or directors àWe Don’t allow discounted options or SAR grants àWe Don’t allow transactions in company stock by our officers or directors without pre-clearance àWe Don’t pay dividends on unvested performance stock units and restricted stock units granted after January 1, 2021 | | | | | | | | | |
Executive Transitions Robert C. Biesterfeld Jr.’s last day of employment with the company was January 1, 2023. His last day as President and Chief Executive Officer of the company, as well as a member of the Board, was the end of the day on December 31, 2022. He received severance for a termination without cause as described under “Executive Separation and Change in Control Plan.” Scott P. Anderson, who previously served as independent Chair of the Board, was appointed as Interim Chief Executive Officer, effective January 1, 2023. Mr. Anderson resigned as Chair of the Board and from the Audit Committee and Governance Committee of the Board in connection with his service as Interim CEO. Mr. Anderson, in his role as Interim CEO, is receiving an annual base salary of $1,100,000, an annual target cash incentive of 155% of base salary (prorated for the portion of the year during which Mr. Anderson serves as Interim CEO), and restricted stock units having a grant date value equal to $2,500,000, which vest on the first anniversary of the date of grant, provided that Mr. Anderson is continuing to provide service to the company as Interim CEO or as a director. We also announced that we have commenced a search for a permanent CEO. The company promoted Arun D. Rajan to Chief Operating Officer on October 31, 2022. Prior to his promotion, Mr. Rajan held the position of Chief Product Officer. Effective January 1, 2023, to encourage Mr. Arun’s retention with the company, he received an additional annual base salary increase to $910,000 and his target annual cash incentive increased to 120% of base salary. The value of his annual grants of his long-term equity incentive increased to $4,000,000 for fiscal 2023. In addition, Mr. Rajan was granted a retention award in the form of restricted stock units having a grant date value of $3,500,000, which vest as to 50% of the shares on the 18-month anniversary of January 1, 2023 (the date of grant), and the remaining 50% of the shares on the third annual anniversary of the date of grant. The Talent & Compensation committee believes this retention award was warranted to ensure continuity of leadership during a period of significant transition and given Mr. Rajan’s critical role in supporting the digital and operational transformation of C.H. Robinson. 2022 Elements of Compensation Performance Evaluation and Compensation The NEOs are all paid the same compensation elements. The determination of the NEOs’ 2022 base salary, annual cash incentive compensation, and equity compensation (both PSUs and RSUs) followed the practices explained above for executive compensation. Each member of this group is evaluated, and the NEOs’ compensation is based on several different factors, including, but not limited to, the following: 1.Title, role, scope of responsibility, and relative experience; 2.Tenure in their position; 3.Subjective evaluation of individual performance; 4.Financial performance of the company as a whole; 5.Financial performance of the portion of the business the NEO leads, where applicable; and 6.Comparison to market practices information. The Talent & Compensation Committee annually conducts an evaluation of the Chief Executive Officer’s performance. Based on this evaluation, the Talent & Compensation Committee determines base salary, annual cash incentive compensation, and equity compensation of the Chief Executive Officer.
Mix of Executive Compensation Our CEO’s target total compensation includes a mix of pay that is heavily weighted to long-term, equity-based incentives (74%). On average, our NEOs other than our CEO have an average of 61% of total compensation targeted to be paid in long-term, equity-based incentives. These figures are based on annual equity compensation awards only. This is consistent with our philosophy of strong linkage between pay and performance. | | | | | | CEO 2022 Target Compensation(1) | Average Other NEO 2022 Target Compensation | | | | |
(1)CEO 2022 target compensation refers to former CEO Robert C. Biesterfeld Jr. (2)Equity compensation includes 50% PSUs and 50% RSUs.
Components of Total Compensation Our compensation components are as follows: | | | | | | | | | | | | Element | Performance Period | Objective | Performance Measured/ Rewarded | | | | | Base Salary | Annual | Attracts, retains, and rewards top talent and reflects an NEO'seach NEO’s responsibilities, performance, leadership potential, succession planning, and relevant market data. | Provides NEOs with fixed compensation that serves as a vehicle to attract and retain. Rewards executives for key performance and contributions. Generally, we target the 50th percentile forof our defined market for talent. | Annual Cash Incentive | Annual | Motivates and rewards our executives for the achievement of financial performance and certain strategic goals for the company related to its transformation.company. | In 2021,2022, the annual cash incentive was based on the following: •CEO - Target opportunity was 150%155% of base salary and was based on enterprise adjusted pre-tax income ("APTI"(“APTI”). APTI is defineda non-GAAP financial measure calculated as pre-tax income before provision for income taxes adjusted to excludefor executive bonusesshort-term incentives and other unusual or extraordinary items.items including acquisitions. •Operating Executive Officers - Target opportunity varied from 50%55% to 80%85% of base salary and was based on the APTI of the business division and/or region of responsibility for the executive, enterprise APTI, and management business objectives ("MBOs"(“MBOs”), one specific to DEI. •AdministrativeShared Services Officers - Target opportunity varied from 70%75% to 85%100% of base salary and was based on enterprise APTI and MBOs, one specific to DEI. •For all executive officers the maximum annual incentive that may be paid is two times the planned annual incentive at target. •Threshold and maximum performance goals for NEOs were set at 70% and 120% of the relevant APTI targets, respectively. | Performance Stock Units (PSUs) | Long-Term | Aligns the interests of management and shareholders. | •Accounts for 50% of NEOs'NEOs’ equity grant value. •75% of PSUs are aligned to Diluted Earnings Per Share ("EPS"(“EPS”), whichaligns to business strategy for long-term performance, across varying market cycles and longer-term secular changes. EPS awards vest based on a cumulative 3-year measure. •25% of PSUs are aligned to budgeted adjusted gross profit, which aligns to our commitment to our customers and rewards management for profitable growth for each of three successive 1-year periods. •Both measures under the PSU plan have a vesting period of 3 years and a 1-year delayed distribution of shares. •To reward for driving high levels of performance, participants may earn up to two times the number of shares granted. | Restricted Stock Units (RSUs)
| Long-Term | Aligns the interests of management and shareholders.Supportsshareholders. Supports our desire to retain our critical talent to drive our long-term business transformation. | •Accounts for 50% of NEOs'NEOs’ equity grant value. •RSUs have a vesting period of 3 years and a 1-year delayed distribution of shares. |
Performance Metrics and Goal Rigor | | | | | | | | Annual Cash Incentive Compensation | ADJUSTED PRE-TAX INCOME (APTI) NEO annual incentive compensation amounts are set as a percentage of their base salary, to reflect the executive’s responsibilities, performance, and contribution to overall company goals. The measure used to determine the financial component of annual incentive compensation is APTI. APTI is a non-GAAP financial measure calculated as income before provision for income taxes adjusted for executive short-term incentives and other unusual items including acquisitions. See below for a reconciliation of APTI to income before provision for income taxes. We believe growth in APTI is the appropriate measure for our annual cash incentive compensation because it rewards profitable growth, which is aligned with the interests of our shareholders. Each year, the Talent & Compensation Committee establishes target APTI growth for the enterprise and the divisions at levels that are consistent with the company’s long-term expected results. Given the transactional nature of a significant portion of our business and our fluctuating adjusted gross profit margins due to market conditions, historically the company has found it difficult to forecast short-term performance. As such, we believe it is important to align targets more closely with our long-term growth goals, with some consideration given to shorter-term market trends and divisional business plans. MANAGEMENT BUSINESS OBJECTIVES (MBOS) The Talent & Compensation Committee included MBOs as part of our 2022 annual cash incentive compensation plan for each NEO, other than Mr. Biesterfeld, to incentivize the achievement of more individualized financial and operational objectives that are critical to our long-term strategy as well as our commitment to DEI. The MBOs were designed to recognize the initiatives that help the company navigate the large cyclical swings that affect the freight transportation environment, as well as our initiatives to continue driving operating margin expansion over the long-term, achieve overall market-share growth, and the successful implementation of our digital transformation efforts. The DEI MBO directly supports the company’s DEI goals and serves to hold leaders accountable for advancing the company’s DEI strategy. | | | | | Equity Compensation | DILUTED EARNINGS PER SHARE (EPS) AND ADJUSTED GROSS PROFIT (AGP) Equity compensation is a critical part of how we incentivize and reward our leadership for enterprise performance. As our strategy in the organization evolves to meet the changing needs of our marketplace, we adopted a new equity plan, which included changes to our equity plan to align with that strategy. In designing the changes to our equity plan and awards, we had several key objectives: to support our business transformation and our strong, performance-oriented culture, to ensure we are market competitive in order to attract and retain top talent, to have high perceived value amongst participants, and, of course, to be aligned with our shareholders’ interests. Our equity compensation philosophy is to pay for performance and reward profitable long-term growth. The metrics we use in our plan reward management for scaling the business and creating profitable market share growth. More specifically, EPS aligns to our business strategy for long-term performance, across varying market cycles and longer-term secular changes, and AGP aligns to our commitment to our customers and rewards management for profitable growth. |
2022 Named Executive Officer Compensation Base Salary Annual base salary is designed to compensate our executive officers as part of a total compensation package necessary to attract, retain, and motivate high quality executives. Our 2022 base salaries, which took effect March 6, 2022, generally reflect the 50th percentile of our defined market for talent. The Talent & Compensation Committee reviews base salaries annually and adjusts base salaries to reflect an NEO’s responsibilities, performance, leadership potential, succession planning, and relevant market data. | | | | | | | | | | | | | | | | | | | | | NEO | Title | 2021 Base Salary | 2022 Base Salary | % Change | Robert C. Biesterfeld Jr. | Former President and Chief Executive Officer | | $1,075,000 | | | $1,100,000 | | 2 | % | Michael P. Zechmeister | Chief Financial Officer | | 725,000 | | | 740,000 | | 2 | % | Arun D. Rajan(1) | Chief Operating Officer | | 800,000 | | | 840,000 | | 5 | % | Mac S. Pinkerton | President of NAST | | 610,000 | | | 625,000 | | 2 | % | Michael J. Short(2) | President of Global Forwarding |
| 550,000 | | | 625,000 | | 14 | % |
(1)Mr. Rajan held the position of Chief Product Officer and was appointed Chief Operating Officer on October 31, 2022; he did not receive a base salary adjustment at that time. (2)Mr. Short’s base salary was increased to position him more competitively to market. Annual Cash Incentive Compensation Introduction The Talent & Compensation Committee approves an individualized incentive compensation plan for each NEO in the first quarter of the calendar year. The primary objectives of our annual cash incentive compensation are to motivate our people to grow our company profits, align pay with annual company performance, and motivate and incent the company’s executive leaders for achievement of important goals aligned to their function or division MBOs (as described on page 55). 2022 Target Opportunities The table below describes the structure of the 2022 annual cash incentive compensation plan. Targets for NEOs 2022 Annual Cash Incentive Compensation Plan: | | | | | | | | | | | | | | | | | | | | | | | | NEO | Target Incentive as % of Base Salary | $ Target Incentive | % Tied to Enterprise APTI | % Tied to NAST APTI | % Tied to Global Forwarding APTI | % Tied to MBO | Robert C. Biesterfeld Jr. | 155 | % | | $1,705,000 | | 100 | % | 0 | % | 0 | % | 0 | % | Michael P. Zechmeister | 85 | % | | 629,000 | | 80 | % | 0 | % | 0 | % | 20 | % | Arun D. Rajan | 100 | % | | 840,000 | | 80 | % | 0 | % | 0 | % | 20 | % | Mac S. Pinkerton | 85 | % | | 531,250 | | 30 | % | 50 | % | 0 | % | 20 | % | Michael J. Short | 85 | % | | 531,250 | | 30 | % | 0 | % | 50 | % | 20 | % |
2021 EXECUTIVE COMPENSATIONExecutive Compensation
Other2022 Performance Levels and Achievement
Financial Metrics The threshold, target, and maximum levels of APTI are set each year with the following objectives: •The relative difficulty of achieving each level is consistent from year to year; •The target level is challenging, but achievable, and reflects planned company performance; and •A threshold payment is made to reward partial achievement of the target, and a maximum payment rewards attainment of an aggressive, but potentially achievable, level of performance. For performance between threshold and target or target and maximum, the achievement percentage is determined by linear interpolation. For financial metrics, the payout levels range from 0% to 200% of target. For the MBO metrics, the payout levels range from 90% to 110% of target. The NEO annual incentive compensation payout at maximum is capped at two times the target opportunity. In 2022, the Talent & Compensation considerationsCommittee established these APTI targets aligned with our long-term growth objectives and taking into consideration the volatility and uncertainty around supply chain and marketplace conditions at the time the metrics were set, which included uncertainty around the ongoing impact of the COVID-19 pandemic. For 2022, the target level of APTI represented 3% growth over 2021 APTI for the Enterprise, 18% growth over 2021 APTI for NAST, and a negative growth rate of 20% growth over 2021 APTI for Global Forwarding. The Talent & Compensation Committee certified the following actual performance levels of APTI for 2022, which represented 18% growth over 2021 APTI for the Enterprise, 45% growth for NAST, and a negative 8% growth for Global Forwarding: 2022 NEO Annual Incentive Compensation Financial Metrics ($ in 000’s) | | | | | | | | | | | | | | | | | | | | Threshold | Target | Maximum | | | | | | | | Enterprise APTI | | | | | | | | | | | | | | North American Surface Transportation APTI | | | | | | | | | | | | | | Global Forwarding APTI | | | | | | | |
| | | | | | | | | | | | | | | | | | Reconciliation of APTI to income before provision for income taxes ($ in 000’s) | Enterprise | | NAST | Global Forwarding | APTI | $1,211,294 | | | $784,340 | | | $463,071 | | Less: Executive bonuses | (7,846) | |
| (912) | |
| (840) | | Less: Impact of unusual or extraordinary items(1) | (36,684) | |
| (9,499) | |
| (7,005) | | Income before provision for income taxes | $1,166,765 | | | $773,929 | | | $455,227 | |
(1)In 2022, APTI was adjusted to exclude the impact of organizational changes to support our enterprise strategy of accelerating our digital transformation and productivity initiatives. These restructuring costs included $21.5 million of severance and related personnel expenses and $15.2 million related to the impairment of certain capitalized internally developed software projects.
For 2022, for Mr. Biesterfeld, APTI (as defined on page 51) growth represented 100% of the total annual incentive opportunity. APTI growth represented 80% of the total annual incentive opportunity with 20% tied to MBOs for the other NEOs. MBOs The Talent & Compensation Committee included MBOs as part of our fiscal 2022 annual cash incentive compensation plan for each NEO, other than Mr. Biesterfeld, to incentivize the achievement of more individualized financial and operational objectives that are critical to our long-term strategy as follows:well as our commitment to DEI. • | | | Michael P. Zechmeister,Chief Financial Officer | •MBO Achievement %: 100% •DEI: Year over year Finance team progress toward the company’s 2025 DEI goals, which include leadership representation, engagement, hiring, and retention. Demonstrated leadership contributions and action steps to support and advance the company’s strategy to become more a diverse and inclusive organization. •Lead the delivery of a company strategic initiative to strengthen enterprise investment prioritization and resource alignment. | | | Arun D. Rajan,Chief Operating Officer | •MBO Achievement %: 105% •DEI: Demonstrated leadership contributions and action steps to support and advance the company’s strategy to become more a diverse and inclusive organization. •Accelerate the pace of development and deployment of technology and product capabilities; design scalable solutions that position C.H. Robinson competitively with customers and carriers; and leverage data science and machine learning to drive scale in transactional components of the business while also enabling margin growth and differentiated, strategic services. | | | Mac S. Pinkerton,President of North American Surface Transportation (“NAST”) | •MBO Achievement %: 95% •DEI: Year over year NAST team progress toward the company’s 2025 DEI goals, which include leadership representation, engagement, hiring, and retention. Demonstrated leadership contributions and action steps to support and advance the company’s strategy to become more a diverse and inclusive organization. •Achieve NAST operating margin target of 40%. | | | Michael J. Short,President of Global Forwarding | •MBO Achievement %: 105% •DEI: Year over year Global Forwarding team progress toward the company’s 2025 DEI goals, which include leadership representation, engagement, hiring, and retention. Demonstrated leadership contributions and action steps to support and advance the company’s strategy to become more a diverse and inclusive organization. •Improve our customer experience index, delivery of technology enhancements to enable longer term goal of increased files per person, and improvement in billing timeliness. | |
Performance against the MBOs were evaluated after year end, with the Interim CEO, Scott Anderson, making recommendations to the Talent & Compensation Committee on the achievement of each NEO’s MBOs. The Talent & Compensation Committee then determined the level of achievement of the MBOs to determine the level of payout for this component of the plan. The actual target incentive opportunity and payouts, including each NEO’s MBOs, are described in more detail in the tables beginning on page 66. 2022 NEO Annual Cash Incentive Compensation The table below sets forth the weighted impact of actual performance against the financial metrics and MBOs in the calculation of each NEO’s percentage of target incentive achieved and the resulting payout. Performance for NEOs 2022 Annual Cash Incentive Compensation Plan: | | | | | | | | | | | | | | | | | | NEO | Achievement Tied to Financial Metrics (weighted) % | Achievement Tied to MBOs (weighted) % | Total Incentive Achievement % of Target | $ Total Payout Amount | Robert C. Biesterfeld Jr. | 172 | % | N/A | 172 | % | | $2,938,801 | | Michael P. Zechmeister | 172 | % | 100% | 158 | % | | 993,134 | | Arun D. Rajan | 172 | % | 105% | 159 | % | | 1,334,684 | | Mac S. Pinkerton | 190 | % | 95% | 172 | % | | 906,892 | | Michael J. Short | 173 | % | 105% | 159 | % | | 847,235 | |
Equity Compensation Introduction We use equity compensation as our primary tool for aligning our executives with long-term shareholder interests, rewarding them for the achievement of overall company performance, and retaining them at C.H. Robinson. Equity compensation represents approximately 74% of our CEO’s total target compensation and approximately 61% of target compensation for other NEOs. Our equity compensation philosophy is to pay for performance and reward profitable long-term growth. We believe equity compensation is an integral component of meeting our compensation goals as outlined in our compensation philosophy. Our shareholder-approved equity incentive plan is designed to give us flexibility to achieve these objectives. Equity Mix and Vesting Terms | | | | | | % of Target Compensation | | | CEO(1) | Other NEOs | | |
(1)CEO % of Executive Compensation: Our CEO’s target compensation refers to former CEO Robert C. Biesterfeld Jr. | | | | | | | | | | | | 50% | | 50% | | | | | | RESTRICTED STOCK UNITS (RSUs) àTime-based à3-year ratable | PERFORMANCE STOCK UNITS (PSUs) àPerformance-based à75% of PSUs tied to 3-year cumulative EPS growth à25% of PSUs tied to annual adjusted gross profit growth | | | | |
In 2022, equity awards made to our NEOs consisted of performance stock units (“PSUs”) and restricted stock units (“RSUs”) that vest over a three-year period, weighted equally by target value. PSUs vest based on the cumulative three-year diluted earnings per share growth and annual adjusted gross profit growth of the company. PSU grants are weighted as 75% aligned with the cumulative three-year diluted earnings per share growth metric while 25% are aligned with annual adjusted gross profit growth targets, as outlined in the chart above. Given the large percentage of their total compensation includes a mix of pay that is heavily weightedawarded in the form of equity and the long-term nature of the vesting and delivery, we believe these awards are an effective tool for creating long-term ownership, aligning our executives’ interests with those of our shareholders, and linking executive officer compensation to our long-term equity-based incentives (73%). On average,company growth strategy. We continue to monitor market trends and plan enhancements related to our NEOs other thanequity award design and continue to modernize our CEO havecompensation plans accordingly.
2022 PSUs Overview Our PSUs granted in 2022 vest based on company performance over a three-year period of time. Any PSUs that are unvested at the end of the three years are forfeited back to the company. 75% of the PSUs included an average three-year earnings per share growth target, with performance vesting from 0 to 200 percent of 60% of total compensation targeted to be paid in long-term, equity-based incentives. These figures arethe target award based on achievement of the target. 25% of the PSUs included an annual adjusted gross profit achievement target, which may be achieved over three separate performance periods under the award. Dividend equivalents accrued on the PSUs but are not paid until, and to the extent, vested. The fair value of each PSU award is established on the date of grant. For grants of PSUs, the fair value is established based on the market price of our common stock for the target number of shares on the date of the grant and is then discounted because employees have a one year deferred delivery following the completion of vesting. | | | | For all performance stock unit awards made to NEOs in 2022, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of one year after the three-year vesting period, or two years after termination of employment subject to the NEO’s compliance with a non-compete agreement and certain other arrangements in favor of C.H. Robinson. We believe a delayed delivery after vesting or termination strengthens our employment agreements, which contain certain covenants and restrictions as described below, and aligns with our shareholders’ interests. | |
EPS Growth The cumulative three-year diluted earnings per share growth target included a threshold, target, and maximum level for achievement over the period from 2021 through 2023 for the 2021 grants and from 2022 through 2024 for the 2022 grants. Adjusted Gross Profit Growth PSUs The annual adjusted gross profit target provided for three one-year long performance periods, with one-third of the PSUs eligible to vest in each of the three years based on achievement of adjusted gross profit for that year. For 2022, the threshold, target, and maximum were set at 0%, 5.1% and 7.1%, respectively. Based upon our adjusted gross profit growth of 14.0% in 2022, one-third of the PSUs tied to this measure vested at 200% of target. The calculation of adjusted gross profit is consistent with the same measure reported in our quarterly and annual SEC filings. 2022 AGP PERFORMANCE LEVELS AND ACHIEVEMENT(1) | | | | | | | | | | | | | Threshold | Target | Maximum | Adjusted Gross Profit | |
(1)2022 performance achievement applies to 1/3 of adjusted gross profit growth PSUs granted in 2021 and 2022. Time-Based Restricted Stock Units Restricted stock units granted in 2021 and 2022 represented 50% of the NEOs’ annual equity compensation awards only, including, in the casegrant value. | | | | For all time-based restricted stock units made to our NEOs in 2022, we have a post-vest holding period whereby the standard delivery of all vested shares occur on the earlier of one year after the three-year vesting period, or two years after termination of employment, subject to the NEO’s compliance with a non-compete agreement and certain other agreements in favor of C.H. Robinson. | |
The grant date fair value of Mr. Rajan, his annual equity award received upon hire, but not a restricted stock unit award is established on the date of grant. For grants of restricted stock unit awards, the fair value is established based on the market price of our common stock on the date of the grant for the number of shares granted and is discounted for post-vesting holding restrictions that restrict the awardees’ ability to sell or transfer vested awards for a specified period of time. Performance-Based Equity Granted Prior to 2022 2021 PSUs An overview of the 2021 PSU award design and 2022 performance outcomes can be found in the 2022 PSUs section. | | | | For all performance stock unit awards made to NEOs in 2021, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of one year after the three-year vesting period, or two years after termination of employment subject to the NEO’s compliance with a non-compete agreement and certain other arrangements in favor of C.H. Robinson. We believe a delayed delivery after vesting or termination strengthens our employment agreements, which contain certain covenants and restrictions as described below, and aligns with our shareholders’ interests. | |
The fair value of each PSU award is established on the date of grant. For grants of PSUs, the fair value is established based on the market price of our common stock on the date of the grant for the target number of shares and is discounted for post-vesting holding restrictions that restrict the awardees’ ability to sell or transfer vested awards for a specified period of time.
2016-2020 Performance-Based Restricted Share Awards For our performance-based restricted share awards granted through 2020, vesting may occur each year for up to five calendar years, based on company performance over that period of time. Any performance-based restricted shares that are unvested at the end of the five years are forfeited back to the company. Performance vesting is constructed in a manner as to vest 0 to 100 percent of the award based on the change in diluted earnings per share from the prior year’s achievement, over the five-year vesting period of the award. Additionally, an award will not vest when there is no year-over-year diluted earnings per share growth, as was experienced by participants in 2019 and 2020. The annual vesting percentage for performance-based restricted share awards is equal to the year-over-year percentage increase in diluted earnings per share, plus ten percentage points. As an example, in 2022, the year-over-year increase in diluted earnings per share was 17.3%, which rounds to 17%. Adding 10 percentage points to 17% equates to the sum of 27% earned vesting in 2022. 20% of these awards remained unvested; therefore all 20% vested in 2022. | | | | For all performance-based restricted share awards made to NEOs in 2016 through 2020, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of two years following the end of the five-year vesting period or two years after termination of employment. We believe a delayed delivery after vesting or termination strengthens our employment agreements and aligns with shareholders’ interests. | |
Performance-based restricted share annual vesting percentage information for our 2016 through 2020 awards is set forth in the following table: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Award Year(1) | Performance Vesting Year | | Total Cumulative Vesting | | Vesting Years Remaining | Post-Vest Holding Period Ends(2) | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | | 2016 Grant | 9% | 43% | 0% | 0% | 48% | — | | 100 | % | | 0 | February 2024 | 2017 Grant | — | 43% | 0% | 0% | 57% | — | | 100 | % | | 0 | February 2025 | 2018 Grant | — | — | 0% | 0% | 80% | 20% |
| 100 | % | (3) | 1 | February 2026 | 2020 Grant | — | — | — | 0% | 80% | 20% |
| 100 | % | (3) | 2 | February 2027 |
(1)Due to changes in the timing of the annual equity grant cycle, the annual performance-based restricted share grants that were historically granted in December were granted in February. (2)For all performance-based awards listed in this table, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of two years following the end of the five-year holding period or two years after termination of employment. (3)These awards achieved 100% vesting before the completion of their five-year vesting period.
Other Compensation Broad-Based Employee Benefits Our NEOs are eligible to participate in all the same benefit programs as other C.H. Robinson employees. These include: EMPLOYEE 401(K) RETIREMENT PLAN We believe that saving for retirement is important for our employees. C.H. Robinson maintains a 401(k) retirement plan that meets the requirements of ERISA and is a qualified plan under the Internal Revenue Code. Our U.S. employees are eligible to contribute up to 75% of their cash compensation to the 401(k) plan, subject to Internal Revenue Service limitations. To support our compensation objectives, in 2022, the company matched 100% of the first 6% of eligible compensation that employees contributed to the plan during the year. EMPLOYEE STOCK PURCHASE PLAN Because we believe in aligning employee interests with our shareholders and our long-term company performance, C.H. Robinson maintains an employee stock purchase plan (ESPP) with a 15% discount that meets the requirements of the Internal Revenue Code. EMPLOYEE HEALTH AND WELFARE BENEFITS To support our goal to provide competitive compensation and benefits, the company sponsors many health and welfare benefit plans for our employees, such as healthcare; an employee assistance program, which provides additional no-cost access to behavioral health benefits and counseling; and various voluntary benefits such as critical illness and accident insurance, short-term and long-term disability, life insurance, paid holidays, and other paid time off. Perquisites (Executive Officer Benefits) C.H. Robinson places a high value on all roles throughout our company and on consistency of culture and management approach. We do not provide our executives and managers with any unique perquisites or compensation plans except in certain circumstances such as relocation benefits. The Supplemental All Other Compensation table found on page 67 contains information about the benefits and perquisites for each of the NEOs, including the aggregate incremental cost of the perquisites. Compensation Process Role of Talent & Compensation Committee The Talent & Compensation Committee is responsible for assisting the Board of Directors in: 1.Reviewing the performance of the Chief Executive Officer; 2.Determining all elements of the compensation and benefits for the Chief Executive Officer and other executive officers of the company; 3.Reviewing and approving the company’s compensation program, including equity-based plans, for management employees generally; 4.Reviewing the company’s policies, practices, performance, disclosures, and progress toward goals with respect to significant issues of DEI and Human Capital Management, including the alignment of such efforts with the company’s overall strategy; 5.Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and 6.Reviewing executive officers’ employment agreements; separation and severance agreements; change in control agreements; and other compensatory contracts, arrangements, and benefits. The Talent & Compensation Committee Report on executive compensation is found on page 65 of this Proxy Statement.
Role of Management Our management team partners very closely with the Talent & Compensation Committee and our independent compensation consultant to execute on our pay for performance strategy. The CEO assists the Talent & Compensation Committee in setting the strategic direction of our executive compensation programs, evaluates the performance of the NEOs (excluding himself), and makes recommendations to the Talent & Compensation Committee regarding their compensation in consultation with the Chief Human Resources and ESG Officer. Although it gives significant weight to the CEO’s recommendations, the Talent & Compensation Committee retains full discretion in making compensation decisions. The CEO is not present during the decisions on his pay. The CEO, the Chief Human Resources & ESG Officer, and the Chief Financial Officer also participate in developing and recommending performance criteria and measures for our NEOs under our annual and equity incentive plans for consideration by the Talent & Compensation Committee. No other executive officers participate in the compensation process for 2022. Our Human Resources team, under the management of the Chief Human Resources & ESG Officer, also supports the Talent & Compensation Committee in its work and implements executive compensation programs. Role of Independent Compensation Consultant At the beginning of 2022, the Talent & Compensation Committee retained Aon to serve as the independent compensation consultant. Aon advised the Talent & Compensation Committee on 2022 pay structure and decisions. During 2022, the Talent & Compensation Committee retained Semler Brossy to serve as the independent compensation consultant to provide information, analysis, and objective advice regarding our executive compensation programs. The Talent & Compensation Committee periodically meets with Semler Brossy to review our executive compensation programs and discuss compensation matters. For 2022, Semler Brossy performed the following functions at the Talent & Compensation Committee’s request: •Assisted the Talent & Compensation Committee in its review and selection of the peer group; •Compared each element of the NEOs' target total direct compensation opportunity with the corresponding compensation elements for the comparator groups to assess competitiveness; •Prepared presentations for the Talent & Compensation Committee on general market trends and practices in executive compensation; •Prepared an analysis of pay and performance relative to the peer group and other comparator groups used by proxy advisory firms to support the Talent & Compensation Committee's goal of aligning our executive compensation program with shareholders' interests; •Advised the Talent & Compensation Committee on the design of executive incentive programs and arrangements; •Supported the Talent & Compensation Committee in its review of the CD&A. The Talent & Compensation Committee reviews its relationship with its advisors annually. The process includes a review of the quality of services provided, the fee structure for the services, and the factors impacting its advisor’s independence under the rules of the Securities and Exchange Commission and the listing standards of Nasdaq. In February 2023, the Talent & Compensation Committee concluded that no conflict of interest exists that would prevent its advisor from independently advising the Talent & Compensation Committee.
Peer Group and Benchmarking The Talent & Compensation Committee considers many factors when setting compensation plans and awards, including company performance, NEOs’ responsibilities, officer performance, position tenure, experience, and survey information from independent experts. In 2022, with assistance from its independent compensation consultant, the Committee approved the development of a compensation peer group for 2023 pay decisions. The peer group is intended to replace equity he forfeited from his prior employer. This is consistentbe used as one input when evaluating and determining pay levels and practices for our executives. As the peer group was identified after decisions for 2022 compensation were made, the peer group was first used for 2023 compensation decisions. Going forward, the Committee will evaluate the peer group annually to determine if the companies included in the group continue to meet relevant criteria and are appropriate comparators. To determine the compensation peer group, the Talent & Compensation Committee considers companies that: •Are of reasonably similar size based on revenue and market capitalization (companies between one-fourth and four times that of C.H. Robinson’s revenue and between one-third and three times that of C.H. Robinson’s market cap). •Compete with our philosophyC.H. Robinson for executive talent and/or have similar skill needs at the executive level. •Operate in the transportation, logistics, or distribution industries. | | | | | | | | | | | | | | | | PEER GROUP | | | | CSX Corporation Expeditors International Fastenal Company FedEx Corporation Hub Group, Inc. | J.B. Hunt Transport Services Knight-Swift Transportation Landstar System, Inc. Norfolk Southern Corporation Old Dominion Freight | Performance Food Group Ryder Systems, Inc. Uber Technologies, Inc. United National Foods, Inc. United Parcel Services | US Foods Holding Corp. W.W. Grainger, Inc. | | | | |
C.H. Robinson positioning relative to compensation peer group(1) | | | | | | | | | | | | | | | | | | | | | | 25th percentile | | 50th percentile | | 75th percentile | | | |
(1)Amounts as of strong linkage between payDecember 31, 2022.
Additional Compensation Policies and performance.Practices Stock Ownership Guidelines1Equity compensation includes 50% PSUs and 50% RSUs.
1Equity compensation includes 50% PSUs and 50% RSUs.
•Stock ownership guidelines:To ensure alignment with our shareholders, the Talent & Compensation Committee has established stock ownership guidelines for our executive officers. The Talent & Compensation Committee believes that linking a significant portion of the executive officer’s personal holdings to the company’s success aligns our executive interests with that of our shareholders. Therefore, executive officers are expected to own a significant amount of C.H. Robinson stock. The Talent & Compensation Committee has established stock ownership guidelines for our executive officers based on all shares of company stock deemed owned by an executive officer, which includes vested stock options, stock held in the company 401(k) plan, vested and unvested performance shares, and restricted stock units. It also includes stock beneficially owned by the officer, including owned in a trust, by a spouse, or by dependent children. Equity ownership guidelines for executive officers are as follows:
•àCEO: Six times base salary
2021 EXECUTIVE COMPENSATION
•àOther NEOs: Three times base salary
•àOther direct reports to the CEO: Three times base salary
It is expected that new or recently promoted members of the executive team will achieve the appropriate level of ownership within five years of their appointment. All NEOs are in compliance with the company stock ownership requirements. •Clawback policy: Policy
We have an incentive compensation recovery policy pursuant to which the Talent & Compensation Committee may require the reimbursement or forfeiture of incentive compensation to the extent it, or a portion of it, was awarded, vested, or paid based on the achievement of financial results that were, within a year later, restated due to material non-compliance with any financial reporting requirement under securities laws that results from the executive'sexecutive’s misconduct or supervisory or other failure. The company expects to revise its compensation recovery policy in the next year to comply with new Nasdaq and Securities and Exchange Commission rules. •Prohibition against pledgingAgainst Pledging and hedging: Hedging
Our officers and directors are prohibited from pledging their company stock and from engaging in transactions in puts, calls, or other derivative securities or hedging their investments in company stock. Say-On-Pay
The Talent & Compensation Committee considers the results of the shareholders’ advisory vote on the compensation of NEOs. At our 2021 and 2020 Annual Meetings, our say-on-pay proposals received “for” votes that represented approximately 84% and 93%, respectively, of the shares voted on the proposals. The Talent & Compensation Committee considered the results of these say-on-pay votes and other shareholder feedback when evaluating our compensation practices and policies in 2021, and when setting the compensation of our NEOs for 2021. The Talent & Compensation Committee believes that our say-on-pay proposal results demonstrate shareholders’ support of our compensation practices.
As a result of the decline in the level of our say-on-pay support between 2020 and 2021, we leveraged feedback from both proxy advisory reports and C.H. Robinson's Investor Relations team. Based on this feedback received from our shareholders, as well as the Talent & Compensation Committee's consideration of competitive market practices, and its goal of linking executive pay and performance, the Talent & Compensation Committee approved the following changes to our compensation programs:
| | | | | | What We Heard.... | How We Responded.... | Consider linking the payment of dividends to the vesting of underlying shares
| Effective with our 2022 grant cycle, C.H. Robinson will no longer pay dividends on unvested shares | Consider, on a going-forward basis, having the treatment of equity awards that are assumed or converted following a change in control be double trigger
| Effective January 1, 2022, C.H. Robinson has included a double trigger for time-based awards made after that date | Enhance disclosure regarding the clawback policy to demonstrate coverage of all current and former Section 16 officers and both cash and equity incentive compensation
| C.H. Robinson currently has a clawback policy. We have included the language of this policy within our equity plan document and described the policy in this Proxy Statement | Consider disclosing a peer group that can be used to make executive compensation decisions
| C.H. Robinson continues to explore the use of a formal peer group and we are considering this change for 2023 | Consider having more than a single, absolute metric under the long term incentive plan | In 2021, C.H. Robinson introduced a new Long Term Incentive Plan that has two performance measures: EPS and budgeted Adjusted Gross Profit | Consider the performance period for the long term incentive plan | In 2021, C.H. Robinson introduced a new Long Term Incentive Plan where the measure for EPS has a cumulative 3-year performance period |
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II. Compensation Philosophy
Performance based compensation and alignment of individual, company, and shareholder goals are integral components of C.H. Robinson’s culture and management approach. Performance based compensation makes up a significant portion of our employees’ total compensation package. In addition, approximately 13% of our total employees hold equity they received through our current equity incentive plan.
C.H. Robinson, with guidance and oversight from our Talent & Compensation Committee, has adopted an executive officer compensation philosophy that is intended to be consistent with our overall compensation approach and to achieve the following goals:
(1)Pay incentive compensation aligned with company earnings performance;
(2)Encourage executives to make long-term career commitments to C.H. Robinson and aligns executives' interests with those of our shareholders;
(3)Balance incentive compensation to achieve both annual and long-term profitability and growth;
(4)Emphasize supporting both team and company goals, business transformation, and company culture; and
(5)Provide a level of total compensation necessary to attract, retain, and motivate high quality executives.
Compensation decisions regarding individual executive officers are based on several factors, including individual performance, level of responsibility, unique skills of the executive, tenure, demands and complexity of the position, and critical nature of the role.
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III. Key Compensation Practices
Our compensation framework and pay-for-performance practices provide appropriate incentives to our executive officers to achieve our financial goals and align our executives with our shareholders’ interests.
| | | | | | What We Do | What We Don’t Do | We Do require approval of our executive compensation and incentive payouts by our independent Talent & Compensation Committee
| We Don't have guaranteed bonuses
| We Do target pay opportunity that is generally aligned to the 50th percentile of general market data and a select group of industry companies that are of similar size, as well as aligned to our business model of a platform company and two-sided market place
| We Don't have supplemental pension or executive retirement plan (SERP) benefits
| We Do have the majority of pay at risk and performance based
| We Don't allow repricing of underwater options or stock appreciation rights without shareholder approval
| We Do have the majority of annual incentive compensation performance metrics directly tied to a key driver of shareholder value (APTI)
| We Don't allow hedging or pledging of company shares by our officers or directors
| We Do have appropriate caps on incentive plan payouts; two times target opportunity
| We Don't allow discounted options or SAR grants
| We Do have double trigger change of control provisions in time-based equity awards made after January 1, 2022
| We Don't have single trigger change of control provisions in time-based equity awards
| We Do have long-term incentives that are performance based to create alignment with shareholders
| We Don't have executive only perquisite benefits
| We Do have long term incentive plan performance metrics that, one of which is multi-year, that reward management for scaling the business and creating profitable market share growth
| We Don't allow transactions in company stock by our executive officers without pre-clearance
| We Do have robust stock ownership guidelines and a minimum of a 1-year deferred delivery requirement for shares earned under equity awards
|
| We Do have a clawback policy
|
| We Do have our equity compensation subject to forfeiture and clawback if executive violates company employment agreements
| | We Do have a Talent & Compensation Committee comprised entirely of independent directors
| | We Do have our Talent & Compensation Committee engage with an independent consultant
| | We Do have our Talent & Compensation Committee regularly meet in executive session without management present
| |
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IV. Elements of Executive Compensation
Base Salary
Annual base salary is designed to compensate our executive officers as part of a total compensation package necessary to attract, retain, and motivate high quality executives. Our 2021 base salaries, which took effect March 31, 2021, generally reflect the 50th percentile of our defined market for talent.
The Talent & Compensation Committee reviews base salaries annually and adjusts base salaries to reflect an NEO's responsibilities, performance, leadership potential, succession planning, and relevant market data.
| | | | | | | | | | | | | | | NEO | Title | 2020 Base Salary | 2021 Base Salary | % Change | Robert C. Biesterfeld Jr. | President and Chief Executive Officer | $ | 1,025,000 | | $ | 1,075,000 | | 5% | Michael P. Zechmeister | Chief Financial Officer | 710,000 | | 725,000 | | 2% | Mac S. Pinkerton | President of NAST | 600,000 | | 610,000 | | 2% | Arun D. Rajan(1) | Chief Product Officer | N/A | 800,000 | | N/A | Michael J. Short | President of Global Forwarding Freight | 540,000 | | 550,000 | | 2% | | | | | |
(1)Mr. Rajan was appointed Chief Product Officer on September 1, 2021.
Non-Equity Incentive Plan Compensation (“annual cash incentive compensation”)
The primary objectives of our annual cash incentive compensation are to motivate our people to grow our company profits, align pay with annual company performance, and motivate and incent the company's executive leaders for achievement of important goals aligned to their function or division MBOs (as defined on page 21). The Talent & Compensation Committee included MBOs as part of our fiscal 2021 annual cash incentive compensation plan for each NEO, other than Mr. Biesterfeld and Mr. Rajan, to incentivize the achievement of more individualized financial and operational objectives that are critical to our long-term strategy as well as our commitment to DEI (as defined on page 14). The MBOs were designed to recognize the initiatives that help the company navigate the large cyclical swings that affect the freight transportation environment, as well as our initiatives to continue driving operating margin expansion over the long-term, achieve overall market-share growth, and the successful implementation of our digital transformation efforts. The DEI MBO directly supports the company's DEI goals and serves to hold leaders accountable for advancing the company's DEI strategy. For 2021, for Mr. Biesterfeld and Mr. Rajan, APTI (as defined on page 21) growth represented 100% of the total annual incentive opportunity. APTI growth represented 80% of the total annual incentive opportunity with 20% tied to MBOs for the other NEOs.
The Talent & Compensation Committee approves an individualized incentive compensation plan for each NEO in the first quarter of the calendar year. NEO annual incentive compensation amounts are set as a percentage of their base salary, to reflect the executive’s responsibilities, performance, and contribution to overall company goals. The measure used to determine the financial component of annual incentive compensation is APTI. APTI is a non-GAAP financial measure calculated as pre-tax net income adjusted for executive short-term incentives and the impact of acquisitions. See below for a reconciliation of APTI to pre-tax net income. APTI in a non-GAAP financial measure calculated as income before provision for income taxes adjusted for executive bonuses and unusual or extraordinary items. See below for a reconciliation of APTI to income before provision for income taxes. We believe growth in APTI is the appropriate measure for our annual cash incentive compensation because it rewards profitable growth, which is aligned with the interests of our shareholders.
Each year, the Talent & Compensation Committee establishes target APTI growth for the enterprise and the divisions at levels that are consistent with the company’s long-term expected results. Given the transactional nature of a significant portion of our business and our fluctuating adjusted gross profit margins due to market conditions, historically the company has found it difficult to forecast short-term performance. As such, we believe it is important to align targets more closely with our long-term growth goals, with some consideration given to shorter-term market trends and divisional business plans. As a result, our annual APTI growth targets generally do not vary significantly year to year, except under unusual circumstances.
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The threshold, target, and maximum levels of APTI are set each year with the following objectives:
•The relative difficulty of achieving each level is consistent from year to year;
•The target level is challenging but achievable and reflects planned company performance. The performance ranges within which threshold and maximum incentive payouts can be earned are generally consistent with the range of financial results within which performance is expected to occur; and
•A threshold payment is made to reward partial achievement of the target, and a maximum payment rewards attainment of an aggressive, but potentially achievable, level of performance.
For performance between threshold and target or target and maximum, the achievement percentage is determined by linear interpolation. For financial metrics, the performance levels levels range from a threshold payment at 70% of target, to a maximum payment at 120% of target. For the MBO metrics, the performance levels levels range from 90% to 110% of target. The NEO annual incentive compensation payout at maximum is capped at two times the target opportunity.
In 2021, the Talent & Compensation Committee established these APTI targets aligned with our long-term growth objectives and taking into consideration the volatility and uncertainty around of the supply chain marketplace conditions at the time the metrics were set, which included uncertainty around the ongoing impact of the COVID-19 pandemic at the time the metrics were set, which included uncertainty around the ongoing impact of the COVID-19 pandemic. For 2021, the target level of APTI represented 7% growth over 2020 APTI for the Enterprise, 8% growth over 2020 APTI for NAST and 5% growth over 2020 APTI for Global Forwarding. The Talent & Compensation Committee certified the following actual performance levels of APTI for 2021, which represented 60% growth over 2020 APTI for the Enterprise, 14% growth for NAST and 178% growth for Global Forwarding:
| | | | | | | | | | | | | | | | | | 2021 NEO Annual Incentive Compensation Financial Metrics ($ in 000's) | Threshold | Target | Maximum | Actual | | Enterprise APTI(1) | $ | 480,705 | | $ | 686,722 | | $ | 824,066 | | $ | 1,029,675 | | (2) | North American Surface Transportation APTI(3) | 361,281 | | 516,116 | | 619,339 | | 542,430 | | | Global Forwarding APTI(4) | 133,449 | | 190,641 | | 228,769 | | 504,623 | | |
| | | | | | | | | | | | Reconciliation of APTI to income before provision for income taxes ($ in 000's) | Enterprise | NAST | Global Forwarding | APTI | $ | 1,029,675 | | $ | 542,430 | | $ | 504,623 | | Less: Executive bonuses(1)(3)(4) | 7,521 | | 692 | | 796 | | Less: Impact of unusual or extraordinary items (2) | (137) | | — | | — | | Income before provision for income taxes | $ | 1,022,291 | | $ | 541,738 | | $ | 503,827 | |
(1)In 2021, all NEOs had at least a portion of their financial metrics financial metrics aligned to Enterprise APTI.
(2)In 2021, APTI was adjusted to exclude the revenues and expenses of Combinex Holding B.V., which was acquired during 2021.
(3)In 2021, Mr. Pinkerton had 50% of his financial metrics aligned to Enterprise APTI and 50% aligned 50% of his financial metrics aligned to Enterprise APTI and 50% aligned to NAST APTI.
(4)In 2021, Mr. Short had 50% of his financial metrics aligned to Enterprise APTI and 50% aligned 50% of his financial metrics aligned to Enterprise APTI and 50% aligned to Global Forwarding APTI.
Performance against the MBOs were evaluated after year end, with the CEO making recommendations to the Talent & Compensation Committee on the achievement of each NEO’s MBOs. The Talent & Compensation Committee then determined the level of achievement of the MBOs to determine the level of payout for this component of the plan. The actual target incentive opportunity and payouts, including each NEO’s MBOs, are described in more detail in the tables beginning on page 33.
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Equity Compensation
We use equity compensation as our primary tool for aligning our executives with long-term shareholder interests, rewarding them for the achievement of overall company performance, and retaining them at C.H. Robinson. Equity compensation represents approximately 73% of our CEO's total target compensation and approximately 60% of target compensation for other NEOs. Our equity compensation philosophy is to pay for performance and rewards profitable long-term growth. We believe equity compensation is an integral component of meeting our compensation goals as outlined in our compensation philosophy. Our shareholder-approved equity incentive plan is designed to give us flexibility to achieve these objectives.
In 2021, we made changes to our equity compensation program components and vesting structure. Equity compensation is a critical part of how we incentivize and reward our leadership for enterprise performance. As our strategy in the organization evolves to meet the changing needs of our marketplace, we made changes to our equity plan to align with that strategy. In designing the changes to our equity plan, we had several key objectives: to support our business transformation and our strong, performance-oriented culture, to ensure we are market competitive in order to attract and retain top talent, to have high perceived value amongst participants, and, of course, to be aligned with our shareholders' interests. Our equity compensation philosophy is to pay for performance and reward profitable long-term growth. The metrics we use in our plan reward management for scaling the business and creating profitable market share growth. More specifically, EPS aligns to our business strategy for long-term performance, across varying market cycles and longer-term secular changes, and AGP aligns to our commitment to our customers and rewards management for profitable growth. We also shortened the vesting and delivery timeframes, which will make our program more attractive, retentive and market competitive.
In 2021, equity awards made to our NEOs consisted of performance based restricted stock units (“PSUs”) and restricted stock units that vest over a three-year period, weighted equally by fair value. As part of the changes for our 2021 equity compensation program, we did not grant stock options. PSUs vest based on the cumulative three-year earnings per share growth and annual adjusted gross profit growth of the company. PSU grants are weighted as 75% aligned with the cumulative three-year earnings per share growth metric while 25% are aligned with annual adjusted gross profit growth targets, as outlined in the chart below.
| | | | | | | | | | | | | Equity Mix | % of Award Value | Vesting | Vesting Indicator | | PSUs | 50% | Performance-based | 75% of PSUs tied to 3-year cumulative EPS growth | | 25% of PSUs tied to annual adjusted gross profit growth | | RSUs | 50% | Time-based | 3-year ratable | |
Given the large percentage of their total compensation that is awarded in the form of equity and the long-term nature of the vesting and delivery, we believe these awards are an effective tool for creating long-term ownership, aligning our executives’ interests with those of our shareholders, and linking executive officer compensation to our long-term company growth strategy. We continue to monitor market trends and plan enhancements related to our equity award design.
Performance Based Restricted Stock Units (“PSUs”)
For our PSU grants in 2021, vesting may occur each year for up to three calendar years, based on company performance over that period of time. Any PSU's that are unvested at the end of the three years are forfeited back to the company. Performance vesting is constructed as to vest 0 to 200 percent of the award based on the cumulative three-year earnings per share growth and annual adjusted gross profit achievement, over the three-year vesting period of the award. The calculation of adjusted gross profit is consistent with the same measure reported in our quarterly and annual SEC filings.
The cumulative three-year earnings per share growth target applicable to 75% of the PSUs included a threshold, target, and maximum level for achievement over the period from 2021 through 2023. The annual adjusted gross profit target for 25% of the PSUs included a threshold, target, and maximum level of achievement and one-third of these PSUs are eligible to vest in each of the three years within the three-year period based on achievement of adjusted gross profit. For 2021, the threshold, target, and maximum were set at 0%, 11.3% and 13.3%, respectively, with the threshold set to recognize the uncertainty that existed coming out of the COVID-19 pandemic at the time the metrics were set. Based upon our adjusted gross profit growth of 30.7% in 2021, one-third of the PSUs tied to this measure vested at 200% of target.
2021 EXECUTIVE COMPENSATION
For all performance based restricted stock awards made to NEOs in 2021, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of one year after the three-year vesting period, or two years after termination of employment subject to the NEO's compliance with a non-compete agreement and certain other arrangements in favor of C.H. Robinson. We believe a delayed delivery after vesting or termination strengthens our employment agreements, which contain certain covenants and restrictions as described below, and aligns with our shareholders’ interests.
Dividend equivalents were awarded on PSUs made in 2021 and are paid in cash on all PSUs, vested and unvested. The Committee has reviewed its practices in this regard and beginning with PSUs granted in 2022, dividend equivalents will be paid only if and when the underlying PSU award vests. Dividend equivalents provide an important link between the executives’ stake in the company and its long-term health. It also better aligns them with our shareholders, who receive a significant portion of company earnings in the form of dividends.
The fair value of each PSU award is established on the date of grant. For grants of PSU's, the fair value is established based on the market price of our common stock on the date of the grant and is then discounted because employees have a one year deferred delivery following the completion of vesting.
Performance Based Restricted Shares Granted Between 2016 and 2020 Earned or Outstanding in 2021
For our performance based restricted share awards granted through 2020, vesting may occur each year for up to five calendar years, based on company performance over that period of time. Any performance based restricted shares that are unvested at the end of the five years are forfeited back to the company. Performance vesting is constructed in a manner as to vest 0 to 100 percent of the award based on the change in diluted earnings per share from the prior year’s achievement, over the five-year vesting period of the award. Additionally, an award will not vest when there is no year-over-year diluted earnings per share growth, as was experienced by participants in 2019 and 2020.
The annual vesting percentage for performance based restricted share awards is equal to the year-over-year percentage increase (or decrease) in diluted earnings per share, plus ten percentage points. As an example, in 2021, the year-over-year increase in diluted earnings per share was 69.6%, which rounds up to 70%. Adding 10 percentage points to 70% equates to the sum of 80% earned vesting in 2021.
For all performance based restricted share awards made to NEOs in 2016 through 2020, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of two years following the end of the five-year vesting period or two years after termination of employment. We believe a delayed delivery after vesting or termination strengthens our employment agreements and aligns with shareholders’ interests.
Performance based restricted share annual vesting percentage information for our 2016 through 2020 awards is set forth in the following table:
| | | | | | | | | | | | | | | | Performance Vesting Year | 2016 Grant | 2017 Grant | 2018 Grant | 2020 Grant (1) | | 2017 | 9% | — | — | — | | 2018 | 43% | 43% | — | — | | 2019 | 0% | 0% | 0% | — | | 2020 | 0% | 0% | 0% | 0% | | 2021 | 48% | 57% | 80% | 80% | | Total Cumulative Vesting | 100% | 100%(2) | 80% | 80% | | Vesting Years Remaining | 0 | 1 | 2 | 3 | |
(1)Due to changes in the timing of the annual equity grant cycle, the annual performance based restricted share grants that were historically granted in December were granted in February.
(2)For the 2017 grant, although one year of time-based vesting remains, the awards were earned as to 100% of the shares in year four based on performance.
Time-Based Restricted Stock Units and Stock Options
Restricted stock units granted in 2021 represented 50% of the NEOs’ annual equity grant value.As with our performance based restricted stock units, we have a post-vest holding period whereby the standard delivery of all vested shares occur on the earlier of one year after the three-year vesting period, or two years after termination of employment, subject to the
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NEO’s compliance with a non-compete agreement and certain other agreements in favor of C.H. Robinson.A portion of Mr. Rajan’s time-based restricted stock units that were intended to replace equity he forfeited from his prior employer vested upon his commencement of employment with us and was immediately delivered to him, as described in the Grants of Plan-Based Awards table, as there is no deferred delivery of the shares under this award. The grant date fair value of a restricted stock unit award is established using the Black-Scholes option pricing model-protective put method.
Prior to 2021, a portion of the long-term equity value was delivered in the form of stock option awards that vested ratably vested over five years. The grant date fair value of a stock option award is established using the Black-Scholes option pricing model.
V. Additional Compensation Policies and Practices
Equity Plan Acceleration and Post-Employment Vesting Our equity award agreements with our NEOs for grants made in 20212022 include provisions accelerating vesting in certain circumstances. RSUs are vested in full if a change in control occurs and awards are not assumed, although for awards granted prior to May 5, 2022,(1) the Board has discretion to fully vest RSUs even if they are assumed. RSUs will also be fully vested if they are assumed and an NEO is terminated without cause within 12 months after the change in control. PSUs were changed to double trigger going forward, and will accelerate upon a change in control andcontrol. PSUs will vest at the greater of the number of PSUs that would be earned and vest as if the date of the change in control were the end of the performance period, or target level. This treatment for equity awards has been adopted primarily because it is seen to effectively create incentives for our executive team to obtain the highest value possible should we be acquired in the future, because it is expected to provide a powerful retention device during the uncertain times preceding a change in control transaction, and because it provides employees the same opportunity as shareholders to participate in the change in control event. (1)In the case of equity awards granted prior to May 5, 2022, if a change in control of our company occurs, the Talent & Compensation Committee may take such actions with respect to outstanding equity awards as it deems appropriate under the circumstances, which may include (i) providing for the continuation, assumption, or replacement of outstanding awards by the surviving or successor entity; (ii) providing that outstanding awards will terminate upon or immediately prior to the consummation of such change in control; (iii) providing that outstanding awards will vest and become exercisable or payable, in whole or in part, prior to or upon consummation of such change in control, or upon termination of an NEO’s employment; or (iv) providing for the cancellation of any outstanding award in exchange for a payment equal to the intrinsic value of the award at the time of the change in control. The Talent & Compensation Committee may specify the action to be taken in an award agreement or take the action prior to or coincident with the change in control and is not required to treat all awards or all NEOs similarly.
All types of awards will become fully vested if employment ends due to death or disability. Post-employment vesting for reasons other than death, disability, and change in control, is tied to non-compete agreements and provides protections to the company and our relationships with our employees, customers, and service providers. For PSUs that vest based on cumulative EPS growth, a one-year service requirement must be met before being eligible for prorated vesting based on the service provided during the performance period, if the NEO complies with the non-compete agreement and certain other agreements in favor of the company, for two years of continued post-employment vesting. For PSUs that vest based on AGP growth and restricted stock unit grants, if the NEO complies with the non-compete agreement and certain other agreements in favor of the company, the awards will continue to vest post-employment for two additional years. Employment Agreements C.H. Robinson uses employment agreements to protect against former employees soliciting our employees, customers, and service providers. All employees sign agreements acknowledging their understanding of company policies and committing to certain confidentiality obligations. Certain employees, including all NEOs, sign an employment agreement that includes more restrictive non-competition and non-solicitation covenants. Typically, theseThese agreements do not commit to post-termination compensation. Other than Mr. Rajan(2) Executive Separation and Mr. Zechmeister(3),Change in Control Plan The company adopted an executive separation and change in control plan (the “Severance Plan”) in July 2022. Severance Plan benefits may be payable in connection with a termination without cause which involves a layoff or position elimination, termination due to restructuring, or other circumstances determined by the company does not haveTalent and Compensation Committee, or a resignation by an executive for good reason. Additional severance plan commitmentsbenefits may be provided in the case of a termination within 24 months after a change in control. The Severance Plan provides benefits in addition to any NEOs except for the continued vesting provision listed above in the Equity Plan Acceleration and Post Employment Vesting section. (1)In Severance benefits include 24 months of continued base pay and 24 months of COBRA premiums for the caseCEO and 18 months of equity awards granted prior to 2021, if acontinued base pay and 18 months of COBRA premiums for executive officers. Termination in connection with change in control of our company occurs, the Talent & Compensation Committee may take such actions with respect to outstanding equity awards as it deems appropriate under the circumstances, which may include (i) providing for the continuation, assumption, or replacement of outstanding awards by the surviving or successor entity; (ii) providing that outstanding awards will terminate upon or immediately prior to the consummation of such change in control; (iii) providing that outstanding awards will vest and become exercisable or payable, in whole or in part, prior to or upon consummation of such change in control, or upon termination of an NEO’s employment; or (iv) providing for the cancellation of any outstanding award in exchange for a payment equal to the intrinsic value of the award at the time of the change in control. The Talent & Compensation Committee may specify the action to be taken in an award agreement or take the action prior to or coincident with the change in control and is not required to treat all awards or all NEOs similarly.
(2)If Mr. Rajan’s employment is involuntarily terminated other than for documented performance or misconduct issues, or if his role and associated compensation is substantially changed without his consent, and he enters into a separation agreement with the company, he will be entitled to severance equal to his annual base salary, one-half of which will be paid within 30 days after execution of the separation agreement and one-half of which will be paid 26 weeks after his termination date.
(3)If Mr. Zechmeister’s employment is involuntarily terminated other than for documented performance or misconduct issues, or if his role and associated compensation is substantially changed without his consent, and he enters into a separation agreement with the company, he will be entitled to severance equal to his annual base salary, one-half of which will be paid within 30 days after execution of the separation agreement and one-half of which will be paid 26 weeks after his termination date.
2021 EXECUTIVE COMPENSATION
Officer-Only Benefits
C.H. Robinson places a high value on all roles throughout our company and on consistency of culture and management approach. We do not provide our executives and managers with any unique perquisites or compensation plans.
The Supplemental All Other Compensation table found on page 37 contains information about the benefits and perquisites for each of the NEOs, including the aggregate incremental cost of the perquisites.
Other Broad-Based Employee Benefits
Our NEOs are eligible to participate in all the same benefit programs as other C.H. Robinson employees. These include:
Employee 401(k) Retirement Plan
We believe that saving for retirement is important for our employees. C.H. Robinson maintains a 401(k) retirement plan that meets the requirements of an ERISA qualified plan and the Internal Revenue Code. Our U.S. employees are eligible to contribute up to 75% of their cash compensation to the 401(k) plan, subject to Internal Revenue Service limitations. To support our compensation objectives, in 2021, the company matched 100% of the first 6% of eligible compensation that employees contributed to the plan during the year.
Employee Stock Purchase Plan
Because we believe in aligning employee interests with our shareholders and our long-term company performance, C.H. Robinson maintains an employee stock purchase plan (ESPP) that meets the requirements of the Internal Revenue Code.
Employee Health and Welfare Benefits
To support our goal to provide competitive compensation and benefits, the company sponsors several health and welfare benefit plans for our employees: health, dental, vision, flexible medical and dependent care spending, short-term disability and long-term disability, life insurance, and holiday and other paid time off.
VI. Compensation Process
The Talent & Compensation Committee
The Talent & Compensation Committee is responsible for assisting the Board of Directors in:
(1)Reviewing the performance of the chief executive officer;
(2)Determining all elements of the compensation and benefits for the chief executive officerCEO include 30 months of base pay, 30 months of COBRA premiums, two and othera half times annual target bonus paid in a lump sum, and full vesting of equity awards. Change in control severance benefits for executive officers include 24 months of the company;
(3)Reviewingbase pay, 24 months of COBRA premiums, two times annual target bonus paid in a lump sum, and approving the company’s compensation program, including equity-based plans, for management employees generally;
(4)Reviewing the company’s policies, practices, performance, disclosures and progress toward goals with respect to significant issuesfull vesting of DEI and Human Capital Management, including the alignment of such efforts with the Company’s overall strategy.
(5)Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and
(6)Reviewing executive officers’ employment agreements; separation and severance agreements; change in control agreements; and other compensatory contracts, arrangements, and benefits.
The Talent & Compensation Committee Report on executive compensation is found on page 42 of this Proxy Statement.
2021 EXECUTIVE COMPENSATION
Cash Compensation
At every February Talent & Compensation Committee meeting, our chief executive officer presents to the Talent & Compensation Committee his recommendations on base salary compensation for the company’s executive leaders, including each of the NEOs. The chief executive officer does not make a recommendation on his own compensation. The Talent & Compensation Committee determines the chief executive officer’s compensation, as well as approves the compensation for the other NEOs.
Additionally, at this same meeting, after the financial results of the previous year have been finalized, our chief executive officer presents to the Talent & Compensation Committee his recommendation on annual cash incentive compensation plans for the company’s executive leaders, including each of the NEOs. During this meeting, the Talent & Compensation Committee certifies the APTI results and corresponding incentive compensation for the executive officers for the prior year and approves recommended annual cash incentive targets for the current year.
Equity Compensation
In 2021, our NEOs were awarded performance shares and time-based restricted stock units. Our chief executive officer presents equity recommendations to the Talent & Compensation Committee for our executive officers, excluding himself. The Talent & Compensation Committee determines the chief executive officer’s equity compensation award. The Talent & Compensation Committee approves the awards for each of the executive officers and approves the equity grants to all other recipients through the Non-Executive Stock Award Committee. The grant date of awards for all employees, including the NEOs, is the date of Talent & Compensation Committee approval.
The Talent & Compensation Committee considers many factors when setting compensation plans and awards, including company performance, NEOs’ responsibilities, officer performance, position tenure, experience, and survey information from independent experts. For the past eight years, the Talent & Compensation Committee engaged Aon’s Human Capital Solutions practice a division of Aon plc (“Aon”)to present executive compensation market data and practices information to the Talent & Compensation Committee in preparation for determining and approving executive compensation. Given the digital transformation underway at the company, the Talent & Compensation Committee is continually assessing best practices related to the core components, general principles, and compensation philosophy needed to support its business strategies and to enhance long-term shareholder value creation. We will continue to seek independent consultative input on these matters going forward.
2021 EXECUTIVE COMPENSATION
VII. Named Executive Officer Compensation
Performance Evaluation and Compensation
The NEOs are all paid the same compensation elements. The determination of the NEOs’ 2021 base salary, annual cash incentive compensation, and equity compensation (both PSUs and RSUs) followed the practices explained above for executive compensation. Each member of this group is evaluated, and and the NEOs' compensation is based on several different factors, including, but not limited to, the following:
(1)Title, role, scope of responsibility, and relative experience;
(2)Tenure in their position;
(3)Subjective evaluation of individual performance;
(4)Financial performance of the company as a whole;
(5)Financial performance of the portion of the business the NEO leads, where applicable; and
(6)Comparison to market survey information.
The Talent & Compensation Committee annually conducts an evaluation of the Chief Executive Officer’s performance. Based on this evaluation, the Talent & Compensation Committee determines base salary, annual cash incentive compensation, and equity compensation of the Chief Executive Officer.
The tables below describe the structure of the 2021 annual cash incentive compensation plan and the individual awards for the NEOs, including actual performance against the incentive metrics. The actual payouts resulting from these awards are set forth below under the Cash Incentive Compensation column of the Total 2021 Realized Compensation table below.
Targets for NEOs 2021 Annual Cash Incentive Compensation Plan:
| | | | | | | | | | | | | | | | | | NEO | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | Robert C. Biesterfeld Jr. | 150 | % | 300 | % | 100 | % | 0 | % | 0 | % | Michael P. Zechmeister | 85 | % | 170 | % | 80 | % | 0 | % | 20 | % | Mac S. Pinkerton | 80 | % | 160 | % | 30 | % | 50 | % | 20 | % | Arun D. Rajan | 85 | % | 170 | % | 100 | % | 0 | % | 0 | % | Michael J. Short | 80 | % | 160 | % | 30 | % | 50 | % | 20 | % |
2021 EXECUTIVE COMPENSATION
Performance for NEOs 2021 Annual Cash Incentive Compensation Plan:
| | | | | | | | | | | | | | | | | | | | | NEO | % of Target Incentive Achieved(1) | Actual Enterprise APTI Growth % (2) | Actual Division APTI Growth % | MBO Achievement % | Robert C. Biesterfeld Jr. | 200 | % | | 60 | % | N/A | N/A | | Michael P. Zechmeister | 180 | % | | 60 | % | N/A | 97.5 | % | (3) | Mac S. Pinkerton | 142 | % | | 60 | % | 14 | % | 95 | % | (4) | Arun D. Rajan | 200 | % | (5) | 60 | % | N/A | N/A | | Michael J. Short | 181 | % | | 60 | % | 178 | % | 105 | % | (6) |
See the disclosures made under the heading Non-Equity Incentive Plan Compensation, beginning on page 26, pertaining to the impact of company APTI in the calculation of the NEO's percentage of target incentive payout achieved.(1)The target enterprise APTI growth percentage as noted above was 7%.
(2)The target division APTI growth percentage as noted above was 8% for North American Surface Transportation (which is the applicable division for Mr. Pinkerton) and was 5% for Global Forwarding (which is the applicable division for Mr. Short).
(3)Mr. Zechmeister’s MBOs were tied to delivery of value and stated goals around back office automation inclusive of indexing and collections, delivering on a formalized process that is fully adopted to prioritize and evaluate project level investments in technology with a clear measure of value, and DEI.
(4)Mr. Pinkerton’s MBOs were tied to achievement of the delivery of commercial value through the reorganization of the commercial teams into segmented groups based on customer size and opportunity, progress on digitalization of processes inclusive of booking automation and in-transit visibility, and DEI.
(5)Mr. Rajan was hired as the Chief Product Officer on September 1, 2021. Based on his time in this position, he earned pro-rated annual cash incentive compensation for 2021.
(6)Mr. Short’s MBOs were tied to achievement of initiatives to drive standardization of business processes and efficiencies, and DEI.
Realized Annual Compensation
C.H. Robinson views total realized annual compensation as total cash (base salary and annual cash incentive compensation) plus equity vested during that calendar year. As described in the Equity Compensation section beginning on page 28, the equity compensation of our executive officers is performance based and has significant variability based on company earnings growth. Because performance equity may not vest, we think it is most appropriate to measure total compensation in this way. In the Total 2021 Realized Annual Compensation table for each NEO below, the values in the “Equity Earned” column reflect the actual percentage vested during the calendar year multiplied by the grant date fair value for the PSUs, performance based restricted shares, restricted stock units, and the time based stock options vesting during each year.
Total 2021 Realized Compensation:
| | | | | | | | | | | | | | | | | | NEO | Base Salary Paid | Cash Incentive Compensation | Total Cash | Equity Earned(1) | Total Realized Compensation | Robert C. Biesterfeld Jr. | $ | 1,066,346 | | $ | 3,225,000 | | $ | 4,291,346 | | $ | 7,080,920 | | $ | 11,372,266 | | Michael P. Zechmeister | 722,404 | | 1,106,169 | | 1,828,573 | | 2,099,349 | | 3,927,922 | | Mac S. Pinkerton | 608,269 | | 691,732 | | 1,300,001 | | 1,495,842 | | 2,795,843 | | Arun D. Rajan(2) | 261,539 | | 462,027 | | 723,566 | | 1,192,530 | | 1,916,096 | | Michael J. Short | 548,269 | | 796,400 | | 1,344,669 | | 1,594,200 | | 2,938,869 | |
(1)See the disclosures made under the headings Performance Based Restricted Stock Units ("PSUs"), Performance Based Restricted Shares and Time-Based Restricted Stock Units and Stock Options beginning on page 28 pertaining to the actual vesting percentages earned.
(2)Mr. Rajan was awarded initial target grants of 12,157 PSUs and 14,590 RSUs upon his hire in 2021. Each of these equity grants began vesting in 2021. In addition, Mr. Rajan received 22,380 RSUs upon his hire that were 1/3 vested and the remaining 2/3 vest ratably over two calendar years beginning in 2022.
2021 EXECUTIVE COMPENSATION
Related to our NEO's realized compensation, 2021 will be remembered as a year with some of the greatest supply chain disruptions and capacity challenges the industry has ever seen, however, we generated record annual results in 2021 resulting in maximum payouts for enterprise APTI, higher earned vesting on our performance based restricted shares tied to EPS growth compared to the previous two years, and maximum vesting for our adjusted gross profit aligned PSUs.awards.
Section 162(m) Disclosure Section 162(m) of the Internal Revenue Code precludes us from taking a federal income tax deduction for compensation paid in excess of $1 million to our “covered employees”. Despite the limits on the deductibility of compensation, the Talent & Compensation Committee continues to believe that a significant portion of our executives’ compensation should be tied to the company’s performance and that shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not restricted even though some compensation awards may have resulted in the past, and are expected to result in the future, in non-deductible compensation expense to us.
Talent & Compensation Committee Report The Talent & Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section with C.H. Robinson management and concurs that it accurately represents the compensation philosophy of the company. Based on its review and discussion with management, the Talent & Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement. The Talent & Compensation Committee Charter is posted under the Governance section of the Investors page of our website at investor.chrobinson.com. Jodee A. Kozlak, Chair Kermit R. Crawford Timothy C. Gokey Mary J. Steele Guilfoile Henry W. “Jay” Winship The Members of the Talent & Compensation Committee of the Board of Directors | | | | | | | | | 20222023 Proxy Statement | | 3565 |
2021 EXECUTIVE COMPENSATIONExecutive Compensation
Executive Compensation Tables
Summary Compensation Table | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name of Executive Officer and Principal Position | Year | | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | Robert C. Biesterfeld Jr | 2021 | | $ | 1,066,346 | | | $ | — | | | $ | 5,924,530 | | (5) | $ | — | | | $ | 3,225,000 | | | $ | 17,400 | | $ | 10,233,276 | | President and Chief Executive Officer | 2020 | | 878,750 | | | — | | | 2,053,817 | | | 2,021,132 | | | 467,577 | | | 11,394 | | 5,432,670 | | 2019 | | 870,833 | | (6) | — | | | 1,879,415 | | (6) | 1,869,985 | | (6) | 428,895 | | (6) | 16,800 | | 5,065,928 | | Michael P. Zechmeister | 2021 | | 722,404 | | | — | | | 1,521,488 | | (7) | — | | | 1,106,169 | | | 17,400 | | 3,367,461 | | Chief Financial Officer | 2020 | | 666,839 | | | — | | | 698,550 | | | 687,200 | | | 290,084 | | | 24,325 | | 2,366,998 | | | 2019 | | 235,985 | | (8) | 200,000 | | (9) | 1,681,567 | | (8)(10) | 726,328 | | (8) | 83,945 | | (8) | 57,637 | | 2,985,462 | | Mac S. Pinkerton | 2021 | | 608,269 | | | — | | | 1,321,813 | | (11) | — | | | 691,732 | | | 17,400 | 2,639,214 | President of North America | 2020 | | 544,250 | | | — | | | 555,719 | | | 514,213 | | | 196,681 | | | 17,100 | | 1,827,964 | | 2019 | | 475,000 | | | — | | | 50,250 | | (12) | 50,027 | | (12) | 212,943 | |
| 16,800 | | 805,020 | | Arun D. Rajan | 2021 | | 261,539 | | (15) | — | | | 4,129,752 | | (13)(14) | — | |
| 462,027 | | (15) | 52,773 | | 4,906,090 | | Chief Product Officer | | | | | | | | | | | | | | | Michael J. Short | 2021 | | 548,269 | | | — | | | 1,040,865 | | (16) | — | | | 796,400 | | | 17,400 | | 2,402,934 | | President of Global Freight Forwarding | 2020 | | 505,950 | | | — | | | 429,622 | | | 397,432 | | | 464,090 | | | 17,100 | | 1,814,194 | | 2019 | | 520,833 | | | — | | | — | |
| — | |
| 192,398 | | | 16,800 | | 730,031 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name of Executive Officer and Principal Position | Year | Salary | Bonus | | Stock Awards(1) | | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | | All Other Compensation(3) | Total | Robert C. Biesterfeld Jr.(4) Former President and Chief Executive Officer | 2022 | $1,095,193 | |
| $— | | | $6,477,576 | | (5) | $— | |
| $2,938,801 | |
|
| $18,300 | | $10,529,870 | | 2021 | 1,066,346 | |
| — | |
| 5,924,530 | |
| — | |
| 3,225,000 | |
|
| 17,400 | | 10,233,276 | | 2020 | 878,750 | | | — | | | 2,053,817 | | | 2,021,132 | | | 467,577 | | | | 11,394 | | 5,432,670 | | | | | | | | | | | | | | | | | | Michael P. Zechmeister Chief Financial Officer | 2022 | 737,115 | |
| — | |
| 1,544,010 | | (6) | — | |
| 993,134 | |
|
| 18,300 | | 3,292,559 | | 2021 | 722,404 | |
| — | |
| 1,521,488 | |
| — | |
| 1,106,169 | |
|
| 17,400 | | 3,367,461 | | 2020 | 666,839 | | | — | | | 698,550 | | | 687,200 | | | 290,084 | | | | 24,325 | | 2,366,998 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Arun D. Rajan(7) Chief Operating Officer | 2022 | 832,308 | |
| — | |
| 2,265,705 | | (8) | — | |
| 1,334,684 | |
|
| 49,308 | | 4,482,005 | | 2021 | 261,539 | | (9) | — | |
| 4,129,752 | |
| — | |
| 462,027 |
|
| 52,773 | | 4,906,090 | | | | | | | | | | | | | | | | | | Mac S. Pinkerton President of North America | 2022 | 622,116 | |
| — | |
| 1,535,517 | | (10) | — | |
| 906,892 | |
|
| 18,300 | | 3,082,825 | | 2021 | 608,269 | |
| — | |
| 1,321,813 | |
| — | |
| 691,732 | |
|
| 17,400 | | 2,639,214 | | 2020 | 544,250 | | | — | | | 555,719 | | | 514,213 | | | 196,681 | | | | 17,100 | | 1,827,964 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael J. Short President of Global Forwarding | 2022 | 610,577 | |
| — | |
| 1,368,268 | | (11) | — | |
| 847,235 | |
|
| 18,300 | | 2,844,380 | | 2021 | 548,269 | |
| — | |
| 1,040,865 | |
| — | |
| 796,400 |
|
| 17,400 | | 2,402,934 | | 2020 | 505,950 | | | — | | | 429,622 | | | 397,432 | | | 464,090 | | | 17,100 | | 1,814,194 | |
(1)The 2021 restricted stock unit grants vest pro-rata over the three calendar years beginning in the year of grant. The 2021 PSU grants are available to vest over a three-year period based on the company's cumulative three-year earnings per share growth and annual adjusted gross profit growth. The 2020 and 2019 performance based restricted share grants are available to vest over a five-year period based on the earnings per share growth of the company plus ten percentage points. Any shares unvested after the vesting period are forfeited back to the company. The actual vesting percentage on the annual adjusted gross profit PSU was 200% in 2021. The actual vesting percentage on the 2020 and 2019 performance based restricted share grants was 80% in 2021. Assumptions used in the calculation of the amounts reported in this tablecolumn are included in Note 6 to the financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. (2)The 2020 and 2019 stock option grants vest pro-rata over the five calendar years beginning in the year of grant. Assumptions used in the calculation of the amounts reported in this table are included in Note 6 to the financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. (3)The dollar amountAmounts shown in this column represents the amount the NEOrepresent amounts earned under our annual incentive program during theeach respective year under their non-equity annual incentive plan; these amounts correspond to and are referred as "annual cash incentive compensation"paid early in the Performance Evaluation and Compensation subsection of Section VII beginning on page 33. These figures include payouts for MBOs related to strategic goals for the company transformation.following year.
(4)(3)All other compensation for our NEOs is summarized in the Supplemental All Other Compensation table.
(4)Mr. Biesterfeld’s last day as the President and CEO of the company was on December 31, 2022. (5)If the PSU awards were to vest at maximum, the value of Mr. Biesterfeld'sBiesterfeld’s stock awards would increase by $3,365,414.be $9,612,923. (6)These figures include compensation adjustments as a result of Mr. Biesterfeld's appointment to President and Chief Executive Officer effective May 9, 2019. (7)If the PSU awards were to vest at maximum, the value of Mr. Zechmeister'sZechmeister’s stock awards would increase by $742,398.be $2,294,278.
(8)This figure includes prorated compensation as a result(7)Mr. Rajan held the position of Mr. Zechmeister's hire as Chief FinancialProduct Officer from September 21, 2021 until he was appointed Chief Operating Officer on August 30, 2019.October 31, 2022.
(9)This figure includes a cash sign-on bonus paid to Mr. Zechmeister.
(10)This figure includes 12,190 RSUs with a grant value of $1,000,190, which vest pro-rata over three years.
(11)(8)If the PSU awards were to vest at maximum, the value of Mr. Pinkerton'sRajan’s stock awards would increase by $750,820.be $3,361,332.
(12)These figures include performance based restricted share and time based stock option grants made to (9)Mr. PinkertonRajan’s salary reported for 2021 is for a partial year; Mr. Rajan joined the company as a result of his appointment to president of NAST effective JanuaryChief Product Officer on September 1, 2019.2021.
(13)This figure includes 22,380 RSUs with a grant value of $1,995,401, of which 1/3 was vested upon grant, and the remaining 2/3 vest pro-rata over two years.
(14)(10)If the PSU awards were to vest at maximum, the value of Mr. Rajan'sPinkerton’s stock awards would increase by $1,215,323.be $2,277,292.
(15)This figure includes prorated compensation as a result of Mr. Rajan's hire as Chief Product Officer on September 1, 2021.
(16)(11)If the PSU awards were to vest at maximum, the value of Mr. Short'sShort’s stock awards would increase by $591,098.be $2,025,676.
2021 EXECUTIVE COMPENSATIONExecutive Compensation
Supplemental All Other Compensation Table | Name of Executive Officer | Name of Executive Officer | Year | Perks and Personal Benefits | Tax Reim-bursements | Registrant Contributions to Defined Contributions(1) | Other | Total | Name of Executive Officer | Year | Perks and Personal Benefits | | Tax Reimbursements | | Registrant Contributions to Defined Contributions(1) | Other | Total | Robert C. Biesterfeld Jr | 2021 | $ | — | | | $ | — | | $ | 17,400 | | $ | — | | $ | 17,400 | | | Robert C. Biesterfeld Jr. | | Robert C. Biesterfeld Jr. | 2022 | | $— | | | $— | | | $18,300 | | | $— | | | $18,300 | | Michael P. Zechmeister | Michael P. Zechmeister | 2021 | — | | | — | | 17,400 | | — | | 17,400 | | Michael P. Zechmeister | 2022 | | — | | | — | | | 18,300 | | | — | | | 18,300 | | Arun D. Rajan | | Arun D. Rajan | 2022 | | 21,519 | | (2) | | 9,488 | | (3) | | 18,300 | | | — | | | 49,308 | | Mac S. Pinkerton | Mac S. Pinkerton | 2021 | — | | | — | | 17,400 | | — | | 17,400 | | Mac S. Pinkerton | 2022 | | — | | | 0 | | 18,300 | | | — | | | 18,300 | | Arun D. Rajan | 2021 | 27,655 | | (2) | 12,194 | | 12,923 | | — | | 52,772 | | | Michael J. Short | Michael J. Short | 2021 | — | | | — | | 17,400 | | — | | 17,400 | | Michael J. Short | 2022 | | — | | | — | | | 18,300 | | | — | | | 18,300 | |
(1)Represents matching contributions under the company’s qualified 401(k) plan. (2)Represents the value of relocation expenses reimbursed by the company.
(3)Represents reimbursement of taxes paid by Mr. Rajan on relocation expense reimbursement. Grants of Plan-Based Awards in 20212022 | Name of Executive Officer | Name of Executive Officer | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | | | Grant Date Fair Value of Stock Awards(2) | Name of Executive Officer |
Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units | | Grant Date Fair Value of Stock Awards(2) | Threshold | Target | | Maximum | Threshold | Target | Maximum | | Grant Date Fair Value of Stock Awards(2) | Threshold | Target | | Maximum | | | Threshold | Target | Maximum | | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock Awards(2) | Robert C. Biesterfeld Jr. | Robert C. Biesterfeld Jr. | 2/3/2021 | $ | — | | $ | — | | | $ | — | | | 7,983 | | 31,930 | | 63,860 | | (3) | — | | | $ | 2,414,866 | | Robert C. Biesterfeld Jr. | 2/3/2021 | | $— | | $— | | | $— | | | 888 | | 3,550 | | 7,100 | | — | | td53,364 | | | 2/3/2021 | — | | — | | | — | | | 888 | | 3,550 | | 7,100 | | (4) | — | | | | 237,637 | | | Robert C. Biesterfeld Jr. | | 2/9/2022 | | — | | — | | | — | | | 8,393 | | 33,570 | | 67,140 | | (4) | — | | | 2,615,774 | | | 2/9/2022 | | — | | — | | | — | | | 933 | | 3,730 | | 7,460 | | (5) | — | | | 266,210 | | | 2/9/2022 | | — | | — | | | — | | | — | | — | | — | | | 44,760 | | (6) | 3,342,228 | | | Robert C. Biesterfeld Jr. | | — | | 1,705,000 | | | 3,410,000 | | | — | | — | | — | | | — | | | — | | | 2/3/2021 | — | | — | | | — | | | — | | — | | — | | | 42,570 | | (5) | | 3,034,390 | | | | | — | | 1,612,500 | | | 3,225,000 | | | — | | — | | — | | | — | | | | — | | | Michael P. Zechmeister | Michael P. Zechmeister | 2/3/2021 | — | | — | | | — | | | 2,050 | | 8,200 | | 16,400 | | (3) | — | | | | 620,166 | | 2/3/2021 | | — | | — | | | — | | | 228 | | 913 | | 1,826 | | (3) | — | | | 65,161 | | Michael P. Zechmeister | | 2/9/2022 | | 1,995 | | 7,980 | | 15,960 | | (4) | — | | | 621,802 | | | Michael P. Zechmeister | 2/9/2022 | | — | | — | | | — | | | 222 | | 887 | | 1,774 | | (5) | — | | | 63,305 | | | 2/9/2022 | | — | | — | | | — | | | — | | — | | — | | | 10,630 | | (6) | 793,742 | | | | — | | 629,000 | | | 1,258,000 | | | — | | — | | — | | | — | | | — | | | 2/3/2021 | — | | — | | | — | | | 228 | | 913 | | 1,826 | | (4) | — | | | | 61,116 | | | | Arun D. Rajan | | Arun D. Rajan | 9/1/2021 | | — | | — | | | — | | | 304 | | 1,216 | | 2,432 | | (3) | — | | | 86,786 | | | 2/9/2022 | | — | | — | | | — | | | 2,938 | | 11,750 | | 23,500 | | (4) | — | | | 915,560 | | | 2/9/2022 | | — | | — | | | — | | | 327 | | 1,307 | | 2,614 | | (5) | — | | | 93,281 | | | 2/9/2022 | | — | | — | | | — | | | — | | — | | — | | | 15,670 | | (6) | 1,170,078 | | | | — | | 840,000 | | | 1,680,000 | | | — | | — | | — | | | — | | | — | | | | 2/3/2021 | — | | — | | | — | | | — | | — | | — | | | 10,930 | | (5) | | 779,090 | | | | | — | | 616,250 | | | 1,232,500 | | | — | | — | | — | | | — | | | | — | | | Mac S. Pinkerton | Mac S. Pinkerton | 2/3/2021 | — | | — | | | — | | | 1,780 | | 7,120 | | 14,240 | | (3) | — | | | | 538,486 | | Mac S. Pinkerton | 2/3/2021 | | — | | — | | | — | | | 198 | | 794 | | 1,588 | | (3) | — | | | 56,668 | | | 2/3/2021 | — | | — | | | — | | | 198 | | 793 | | 1,586 | | (4) | — | | | | 53,083 | | | | 2/3/2021 | — | | — | | | — | | | — | | — | | — | | | 9,500 | | (5) | | 677,160 | | | | — | | 488,000 | | | 976,000 | | | — | | — | | — | | | — | | | | — | | | Arun D. Rajan | 9/1/2021 | — | | — | | | — | | | 2,735 | | 10,940 | | 21,880 | | (3) | — | | | | 868,089 | | | | 9/1/2021 | — | | — | | | — | | | 304 | | 1,217 | | 2,434 | | (4) | — | | | | 86,809 | | | | 9/1/2021 | — | | — | | | — | | | — | | — | | — | | | 14,590 | | (5) | | 1,092,645 | | | Mac S. Pinkerton | | Mac S. Pinkerton | 2/9/2022 | | 1,995 | | 7,980 | | 15,960 | | (4) | — | | | 621,802 | | | 2/9/2022 | | — | | — | | | — | | | 222 | | 887 | | 1,774 | | (5) | — | | | 63,305 | | | 2/9/2022 | | — | | — | | | — | | | — | | — | | — | | | 10,630 | | (6) | 793,742 | | | | — | | 531,250 | | | 1,062,500 | | | — | | — | | — | | | — | | | — | | | 9/1/2021 | — | | — | | | — | | | — | | — | | — | | | 22,380 | | (6) | | 1,995,401 | | | | | — | | 231,014 | | (7) | 462,027 | | (7) | — | | — | | — | | | — | | | | — | | | Michael J. Short | Michael J. Short | 2/3/2021 | — | | — | | | — | | | 1,403 | | 5,610 | | 11,220 | | (3) | — | | | | 424,284 | | Michael J. Short | 2/3/2021 | | — | | — | | | — | | | 156 | | 623 | | 1,246 | | (3) | — | | | 44,464 | | | 2/3/2021 | — | | — | | | — | | | 156 | | 623 | | 1,246 | | (4) | — | | | | 41,704 | | | | 2/3/2021 | — | | — | | | — | | | — | | — | | — | | | 7,480 | | (5) | | 533,174 | | | | — | | 440,000 | | | 880,000 | | | — | | — | | — | | | — | | | | — | | | Michael J. Short | | 2/9/2022 | | 1,785 | | 7,140 | | 14,280 | | (4) | — | | | 556,349 | | | Michael J. Short | 2/9/2022 | | — | | — | | | — | | | 198 | | 793 | | 1,586 | | (5) | — | | | 56,596 | | | 2/9/2022 | | — | | — | | | — | | | — | | — | | — | | | 9,520 | | (6) | 710,859 | | | | — | | 531,250 | | | 1,062,500 | | | — | | — | | — | | | — | | | — | |
(1)Under the terms of the award and as further explained in the Non-EquityAnnual Cash Incentive Plan Compensation subsectionsection of Section IV Elements of2022 Named Executive Officer Compensation, beginning onon page 26,53, the amountamount earned by each NEO will bewas based upon on the company’s or the appropriate business division'sdivision’s APTI, along with MBO achievement for 20212022 and was paid to the executive in early 2022.2023.
(2)The amounts in this column represent the grant date fair value for the respective awards. The performance basedvested performance-based restricted stock units and time based restricted stock units vested and unvested, earn dividends at the same rate as Common Stock.common stock. Because these dividends are considered compensation under the Internal Revenue Code, the dividends are paid to each NEO through the company’s payroll system. (3)Represents 1/3 of the total number of performance basedperformance-based restricted stock units granted during the reported year to the NEO. Due to separate one-year performance periods with annual performance targets set at the start of each performance period, each 1/3 of the grant is reported as granted when such performance target is set. The first 1/3 was disclosed when reporting 2021 compensation and the remaining 1/3 will be disclosed when reporting 2023 compensation, respectively. The grant date fair value is determined when the annual performance targets are set during the following February. These performance basedperformance-based restricted stock units are available to vest over three calendar years beginning in 2021, based on the company'scompany’s annual adjusted gross profit growth. Any shares unvested after the vesting period are forfeited back to the company. The standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment. (4)Represents the number of performance-based restricted stock units granted during the reported year to the NEO. These performance-based restricted stock units are available to vest over three calendar years beginning in 2022, based on the company’s cumulative three-year diluted earnings per share growth. Any shares unvested after the vesting period are forfeited back to the company. The standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment. (4)(5)Represents 1/3 of the total number of performance basedperformance-based restricted stock units granted during the reported year to the NEO. The remaining 2/3 will be disclosed when reporting 20222023 and 20232024 compensation, respectively. The grant date fair value is determined when the annual performance targets are set during the following February. These performance basedperformance-based restricted stock units are available to vest over three calendar years beginning in 2021,2022, based on the company'scompany’s annual adjusted gross profit growth. Any shares unvested after the vesting period are forfeited back to
2021 EXECUTIVE COMPENSATION
the company. Reference disclosure under Performance Based Restricted Stock Units (“PSUs”) in the CD&A, theactual vesting percentage on the annual adjusted gross profit PSU was 200% in 2021. The standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment. (5)(6)Represents the number of time based restricted stock units granted during the reported year to the NEO.TheseNEO. These restricted stock units vest ratably over three calendar years beginning in 2021.2022. The standard delivery of all vested restricted stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
(6)Represents the number of time based restricted stock units granted during the reported year to the NEO. These restricted stock units vested 1/3 upon grant, and the remaining 2/3 vest pro-rata over two years. Delivery of this award occurs immediately upon vesting.
(7)2021 Non-Equity Incentive Plan payout prorated based on hire date.
2021 EXECUTIVE COMPENSATIONExecutive Compensation
Outstanding Equity Awards at Fiscal Year-End 20212022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | Name of Executive Officer | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | 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 | Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested | Robert C. Biesterfeld Jr. | 11,644 | | (1) | 0 | | (1) | $ | 58.25 | | 12/4/2023 | | | | 2,168 | | (4) | $ | 233,342 | | | 9,748 | | (1) | 0 | | (1) | 74.57 | | 12/3/2024 | | | | 1,816 | | (4) | 195,456 | | | 30,150 | | (2) | 0 | | (2) | 63.58 | | 12/2/2025 | | | | 3,630 | | (4) | 390,697 | | | 28,110 | | (2) | 0 | | (2) | 76.72 | | 12/7/2026 | | | | 6,922 | | (4) | 745,036 | | | 25,376 | | (2) | 6,344 | | (2) | 87.15 | | 12/6/2027 | | | | 31,930 | | (5) | 3,436,626 | | | 16,512 | | (3) | 4,128 | | (3) | 89.70 | | 3/1/2028 | | | | 3,550 | | (6) | 382,087 | | | 22,782 | | (2) | 15,188 | | (2) | 88.87 | | 12/5/2028 | | | | 3,550 | | (6) | 382,087 | | | 63,822 | | (3) | 42,548 | | (3) | 82.68 | | 5/9/2029 | | | | 28,381 | | (7) | 3,054,647 | | | 64,728 | | (3) | 97,092 | | (3) | 72.74 | | 2/5/2030 | | | | | | | Michael P. Zechmeister | 25,176 | | (3) | 16,784 | | (3) | 82.05 | | 9/3/2029 | 4,064 | | (8) | 437,408 | | 2,072 | | (4) | 223,009 | | | 22,008 | | (3) | 33,012 | | (3) | 72.74 | | 2/5/2030 | | | | 2,354 | | (4) | 253,404 | | | | | | | | | | | | 8,200 | | (5) | 882,566 | | | | | | | | | | | | 913 | | (6) | 98,266 | | | | | | | | | | | | 914 | | (6) | 98,374 | | | | | | | | | | | | 7,287 | | (7) | 784,300 | | Mac S. Pinkerton | 956 | | (1) | 0 | | (1) | 61.91 | | 12/5/2022 | | | | 732 | | (4) | 78,742 | | | 11,865 | | (1) | 0 | | (1) | 58.25 | | 12/4/2023 | | | | 150 | | (4) | 16,145 | | | 11,576 | | (1) | 0 | | (1) | 74.57 | | 12/3/2024 | | | | 1,873 | | (4) | 201,591 | | | 15,606 | | (2) | 0 | | (2) | 63.58 | | 12/2/2025 | | | | 7,120 | | (5) | 766,326 | | | 12,934 | | (2) | 0 | | (2) | 76.72 | | 12/7/2026 | | | | 793 | | (6) | 85,351 | | | 11,955 | | (2) | 2,989 | | (2) | 87.15 | | 12/6/2027 | | | | 794 | | (6) | 85,458 | | | 7,692 | | (2) | 5,129 | | (2) | 88.87 | | 12/5/2028 | | | | 6,334 | | (7) | 681,728 | | | 1,626 | | (3) | 1,084 | | (3) | 79.92 | | 1/3/2029 | | | | | | | | 16,468 | | (3) | 24,702 | | (3) | 72.74 | | 2/5/2030 | | | | | | | Arun D. Rajan | | | | | | | 14,920 | | (9) | 1,605,840 | | 10,940 | | (5) | 1,177,472 | | | | | | | | | | | | 1,217 | | (6) | 130,986 | | | | | | | | | | | | 1,216 | | (6) | 130,878 | | | | | | | | | | | | 9,727 | | (7) | 1,046,917 | | Michael J. Short | 4,998 | | (2) | 0 | | (2) | 76.72 | | 12/7/2026 | | | | 1,136 | | (4) | 122,268 | | | 5,638 | | (2) | 5,638 | | (2) | 87.15 | | 12/6/2027 | | | | 1,448 | | (4) | 155,848 | | | 12,132 | | (2) | 8,088 | | (2) | 88.87 | | 12/5/2028 | | | | 5,610 | | (5) | 603,804 | | | 12,728 | | (3) | 19,092 | | (3) | 72.74 | | 2/5/2030 | | | | 623 | | (6) | 67,053 | | | | | | | | | | | | 624 | | (6) | 67,161 | | | | | | | | | | | | 4,987 | | (7) | 536,751 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name of Executive Officer | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Exercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options Unexercisable | | Option Exercise Price | 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 | Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested | | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested | Robert C. Biesterfeld Jr. | 9,748 | | (1) | 0 | | (1) | $74.57 | | 12/3/2024 | | | | | 31,930 | | (4) | | $2,923,511 | | 20,100 | | (2) | 0 | | (2) | 63.58 | | 12/2/2025 | | | | | 3,550 | | (5) | | 325,038 | | 28,110 | | (2) | 0 | | (2) | 76.72 | | 12/7/2026 | | | | | 14,191 | | (6) | | 1,299,328 | | 31,720 | | (2) | 0 | | (2) | 87.15 | | 12/6/2027 | | | | | 33,570 | | (7) | | 3,073,669 | | 20,640 | | (3) | 0 | | (3) | 89.70 | | 3/1/2028 | | | | | 3,730 | | (8) | | 341,519 | | 30,376 | | (2) | 7,594 | | (2) | 88.87 | | 12/5/2028 | | | | | 3,730 | | (8) | | 341,519 | | 85,096 | | (3) | 21,274 | | (3) | 82.68 | | 5/9/2029 | | | | | 29,840 | | (9) | | 2,732,150 | | 97,092 | | (3) | 64,728 | | (3) | 72.74 | | 2/5/2030 | | | | | | | | | Michael P. Zechmeister | 33,568 | | (3) | 8,392 | | (3) | 82.05 | | 9/3/2029 | | | | | 8,200 | | (4) | | 750,792 | | 33,012 | | (3) | 22,008 | | (3) | 72.74 | | 2/5/2030 | | | | | 914 | | (5) | | 83,686 | | | | | | | | | | | | 3,644 | | (6) | | 333,645 | | | | | | | | | | | | 7,980 | | (7) | | 730,649 | | | | | | | | | | | | 887 | | (8) | | 81,214 | | | | | | | | | | | | 886 | | (8) | | 81,122 | | | | | | | | | | | | 7,087 | | (9) | | 648,886 | | Arun D. Rajan | | | | | | | | 7,460 | | (10) | 683,038 | | 10,940 | | (4) | | 1,001,666 | | | | | | | | | | | | 1,217 | | (5) | | 111,429 | | | | | | | | | | | | 4,864 | | (6) | | 445,348 | | | | | | | | | | | | 11,750 | | (7) | | 1,075,830 | | | | | | | | | | | | 1,307 | | (8) | | 119,669 | | | | | | | | | | | | 1,306 | | (8) | | 119,577 | | | | | | | | | | | | 10,447 | | (9) | | 956,527 | | Mac S. Pinkerton | 7,624 | | (1) | 0 | | (1) | 58.25 | | 12/4/2023 | | | | | 7,120 | | (4) | | 651,907 | | 11,576 | | (1) | 0 | | (1) | 74.57 | | 12/3/2024 | | | | | 793 | | (5) | | 72,607 | | 15,606 | | (2) | 0 | | (2) | 63.58 | | 12/2/2025 | | | | | 3,167 | | (6) | | 289,971 | | 12,934 | | (2) | 0 | | (2) | 76.72 | | 12/7/2026 | | | | | 7,980 | | (7) | | 730,649 | | 14,944 | | (2) | 0 | | (2) | 87.15 | | 12/6/2027 | | | | | 887 | | (8) | | 81,214 | | 10,256 | | (2) | 2,565 | | (2) | 88.87 | | 12/5/2028 | | | | | 886 | | (8) | | 81,122 | | 2,168 | | (3) | 542 | | (3) | 79.92 | | 1/3/2029 | | | | | 7,087 | | (9) | | 648,886 | | 24,702 | | (3) | 16,468 | | (3) | 72.74 | | 2/5/2030 | | | | | | | | | Michael J. Short | 5,638 | | (2) | 0 | | (2) | 87.15 | | 12/6/2027 | | | | | 5,610 | | (4) | | 513,652 | | 4,044 | | (2) | 4,044 | | (2) | 88.87 | | 12/5/2028 | | | | | 624 | | (5) | | 57,133 | | 6,364 | | (3) | 12,728 | | (3) | 72.74 | | 2/5/2030 | | | | | 2,494 | | (6) | | 228,351 | | | | | | | | | | | | 7,140 | | (7) | | 653,738 | | | | | | | | | | | | 793 | | (8) | | 72,607 | | | | | | | | | | | | 794 | | (8) | | 72,699 | | | | | | | | | | | | 6,347 | | (9) | | 581,131 | |
(1)The 2012-2014 performance based2013-2014 performance-based stock option grants were available to vest over a five year period based on the financial performance of the company. The actual vesting percentage for the 2012 award is determined by the following formula: year-over-year growth rates in income from operations and diluted net income per share are averaged, and then five percentage points are added to that number. The vesting formula for the 2013-2014 awards is based on the year-over-year percentage growth in diluted earnings per share, plus ten percentage points. Any performance basedperformance-based stock options unvested after five years were forfeited back to the company. Once the options vested,vest, they are exercisable for a period of ten years from the date of grant under the option award agreement. (2)Represents the number of time based stock options granted during the reported year to the NEO. These stock options vest ratably over five calendar years beginning in the calendar year after the year of grant. Once vested, they are exercisable for a period of ten years from the date of grant under the option award agreement. (3)Represents the number of time based stock options granted during the reported year to the NEO. These stock options vest ratably over five calendar years beginning in the year of grant. Once vested, they are exercisable for a period of ten years from the date of grant under the option award agreement. (4)The 2015-2018 performance based restricted share grants vest over a five year period based on the financial performance of the company. The vesting formula for the 2015-2018 awards are based on the year-over-year percentage growth in diluted earnings per share, plus ten percentage points. Any performance based restricted shares unvested after five years are forfeited back to the company. The standard delivery of all vested shares occurs the earlier of two years after termination of employment or two years following the end of the five-year vesting period.
2021 EXECUTIVE COMPENSATION
(5)The 2021 performance basedperformance-based restricted stock units are available to vest over three calendar years beginning in 2021, based on the company'scompany’s cumulative three-year diluted earnings per share growth. Any shares unvested after the vesting period are forfeited back to the company. The standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
(6)(5)The 2021 performance basedperformance-based restricted stock units are available to vest over three calendar years beginning in 2021, based on the company'scompany’s annual adjusted gross profit growth. Any shares unvested after the vesting period are forfeited back to the company. The actual vesting percentage on the annual adjusted gross profit PSU was 200% in 2021.2021 and 2022. The standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
(7)(6)The 2021 time based restricted stock units vest ratably over three calendar years beginning in 2021. The standard delivery of all vested restricted stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
(8)Upon Mr. Zechmeister's hire as Chief Financial Officer in August 2019, C.H. Robinson awarded him a special one-time based restricted stock unit award. This one-time award vests ratably on the anniversary of the grant date over three years, with no delayed delivery, contingent on Mr. Zechmeister's continued service and was intended to serve as a replacement of equity awards Mr. Zechmeister forfeited from his previous employer. If Mr. Zechmeister separates from service other than due to death, disability, or change in control prior to September 3,(7)The 2022 the unvestedperformance-based restricted stock units will beare available to vest over three calendar years beginning in 2022, based on the company’s cumulative three-year diluted earnings per share growth. Any shares unvested after the vesting period are forfeited back to the company. One-thirdThe standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
(8)The 2022 performance-based restricted stock units are available to vest over three calendar years beginning in 2022, based on the company’s annual adjusted gross profit growth. Any shares unvested after the vesting period are forfeited back to the company. The actual vesting percentage on the annual adjusted gross profit PSU was 200% in 2021 and 2022. The standard delivery of all vested performance stock units occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment. (9)The 2022 time based restricted stock units vest ratably over three calendar years beginning in 2022. The standard delivery of all vested restricted stock units will be delivered annually to Mr. Zechmeister on September 3 inoccurs the earlier of one year following the end of the three-year vesting period or two years 2020-2022. The fair value was established on the market priceafter termination of our common stock on the date of grant.employment. (9)(10)Upon Mr. Rajan'sRajan’s hire as Chief Product Officer in August 2021, C.H. Robinson awarded him a special one-time basedtime-based restricted stock unit award. This one-time award vests ratably on the anniversary of the grant date over two years, with no delayed delivery, contingent on Mr. Rajan'sRajan’s continued service and was intended to serve as a replacement of equity awards Mr. Rajan forfeited from his previous employer. If Mr. Rajan separates from service other than due to death, disability, or change in control prior to September 1, 2023, the unvested restricted stock units will be forfeited back to the company. One-half of the vested restricted stock units will bewere delivered annually to Mr. Rajan on September 1, in2022, and the years 2022 andother half will be delivered to Mr. Rajan on September 1, 2023. The fair value was established based on the market price of our common stock on the date of grant.
Option Exercises and Stock Vested During 2021
| | | | | | | | | | | | | | | | | | Name of Executive Officer | Option Awards | Stock Awards | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | Robert C. Biesterfeld Jr. | 0 | | $ | 0 | | 88,642 | | $ | 9,540,538 | | (1) | Michael P. Zechmeister | 0 | | 0 | | 27,238 | | 2,860,361 | | (2) | Mac S. Pinkerton | 20,365 | | 709,658 | | 18,970 | | 2,041,741 | | (3) | Arun D. Rajan | 0 | | 0 | | 14,757 | | 1,450,510 | | (4) | Michael J. Short | 32,940 | | 626,437 | | 20,244 | | 2,178,862 | | (5) |
Option Exercises and Stock Vested During 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name of Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Robert C. Biesterfeld Jr. | 21,694 | | | $1,100,842 | | | 58,206 | | | $5,329,341 | | (1) | Michael P. Zechmeister | 0 | | | 0 | | | 19,276 | | | 1,861,634 | | (2) | Arun D. Rajan | 0 | | | 0 | | | 22,592 | | | 2,237,045 | | (3) | Mac S. Pinkerton | 5,197 | | | 244,243 | | | 12,827 | | | 1,174,440 | | (4) | Michael J. Short | 35,496 | | | 1,022,769 | | | 11,082 | | | 1,014,668 | | (5) |
(1)$7,249,2031,330,916 is deferred until the earlier of two years after termination of employment or two years following the end of the five-year vesting period. $2,291,355$3,998,425 is deferred until the earlier of one year following the end of the three-year vesting period or two years after termination of employment. (2)$1,905,697405,245 is deferred until the earlier of two years after termination of employment or two years following the end of the five-year vesting period. $588,628$987,566 is deferred until the earlier of one year following the end of the three-year vesting period or two years after termination of employment. $366,036$468,823 was not deferred. (3)$1,385,486 is deferred until the earlier of one year following the end of the three-year vesting period or two years after termination of employment. $851,559 was not deferred. (3)(4)$1,530,283252,248 is deferred until the earlier of two years after termination of employment or two years following the end of the five-year vesting period. $511,458$922,192 is deferred until the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
(4)(5)$785,376 is deferred until the earlier of one year following the end of the three-year vesting period or two years after termination of employment. $665,134 is not deferred.
(5)$1,776,433236,591 is deferred until the earlier of two years after termination of employment or two years following the end of the five-year vesting period. $402,249$778,077 deferral occurs the earlier of one year following the end of the three-year vesting period or two years after termination of employment.
2021 EXECUTIVE COMPENSATION
Nonqualified Deferred Compensation(1) | Name of Executive Officer | Name of Executive Officer | Executive Contributions in 2021 | Registrant Contributions in 2021 | Aggregate Earnings in 2021 | Aggregate Withdrawals/ Distributions | Aggregate Balance at December 31, 2021(2) | Name of Executive Officer | Executive Contributions in 2022 | Registrant Contributions in 2022(2) | Aggregate Earnings (Loss) in 2022 | Aggregate Withdrawals/ Distributions | Aggregate Balance at December 31, 2022(2) | Robert C. Biesterfeld Jr. | Robert C. Biesterfeld Jr. | $ | 0 | | $ | 12,595,185 | | $ | 246,273 | | $ | (274,357) | | $ | 14,581,928 | | Robert C. Biesterfeld Jr. | | $0 | | | $6,664,231 | |
| ($2,084,783) | |
| ($213,034) | | | $18,948,342 | | Michael P. Zechmeister | Michael P. Zechmeister | 0 | | 3,278,625 | | — | | — | | 3,278,625 | | Michael P. Zechmeister | | — | | | 1,684,864 | | | (466,245) | | | — | | | 4,497,244 | | Arun D. Rajan | | Arun D. Rajan | | — | | | 1,862,440 | |
| (239,258) | |
| — | | | 3,428,006 | | Mac S. Pinkerton | Mac S. Pinkerton | 0 | | 2,723,470 | | 170,818 | | (423,267) | | 4,152,796 | | Mac S. Pinkerton | | — | | | 1,510,076 | |
| (603,428) | |
| (252,910) | | | 4,806,534 | | Arun D. Rajan | 0 | | 1,832,293 | | — | | — | 1,832,293 | | | Michael J. Short | Michael J. Short | 0 | | 2,715,613 | | 180,313 | | (647,267) | | 4,054,530 | | Michael J. Short | | — | | | 1,346,691 | |
| (588,731) | |
| (159,686) | | | 4,652,805 | |
(1)All awards referred to in this table are in the form of performance basedperformance-based restricted shares, performance stock units, and restricted stock units, except Mr. Short's 2015 time based restricted shares award.units. (2)All values in this column are based on the closing market price of the company stock as of December 31, 2021.
2022. Potential Payments Upon Termination or Change in Control See the disclosure madedescription of the Severance Plan under the heading Employment Agreements,Executive Separation and Change in Control Plan, page 3065, for further information related to Mr. Rajan's and Mr. Zechmeister's 2021 employment agreements, including the terms and timing for the potential severance paymentpayments and equity acceleration described in the charttable below. The following table lists the potential value of severance and bonus payments, and accelerated vesting of unvested performance basedPSU and performance-based restricted share awards and time based stock optionsoption awards upon a change in control, or a termination of employment without cause or good reason, or in the case of change in control, death, or disability of our NEOs. For this purpose, change in control is defined as (i) the ownership by a person or entity of more than 50% of the Common Stockcommon stock of the company, (ii) the completion of a merger or consolidation or sale of all or substantially all of the company’s assets where the company’s directors and shareholders prior to the transaction do not comprise at least 60% of the board of the surviving entity and 60% of its shareholder base, respectively, or (iii) a majority of the Board of Directors are no longer “continuing directors”. The amounts listed are calculated based on the assumption that the NEOs’ employment was terminated or that a change in control occurred on December 31, 2021,2022, the last day of our reporting year. C.H. Robinson does not gross up payments to executive officers due to a change in control. | | | | | | | | | Name of Executive Officer2023 Proxy Statement | Benefits and Payments Upon Termination | Change in Control, Death, or Disability | Robert C. Biesterfeld Jr. | Vesting of nonvested stock options | $ | 4,937,980 | | | Vesting of nonvested restricted shares and units | 11,868,360 | | Michael P. Zechmeister | Vesting of nonvested stock options | 1,581,123 | | | Vesting of nonvested restricted shares and units | 3,603,775 | | | Severance | 725,000 | | Mac S. Pinkerton | Vesting of nonvested stock options | 1,049,329 | | | Vesting of nonvested restricted shares and units | 2,508,532 | | Arun D. Rajan | Vesting of nonvested stock options | 0 | | | Vesting of nonvested restricted shares and units | 3,399,278 | | | Severance | 800,000 | | Michael J. Short | Vesting of nonvested stock options | 933,317 | | | Vesting of nonvested restricted shares and units | 2,591,300 | 71 |
| | | | | | | | | | | | | | | | | | | | | | | | Name of Executive Officer | Benefits and Payments Upon Termination | Death or Disability(2) | Termination Without Cause or For Good Reason in Connection with CIC(3) | Termination Without Cause or For Good Reason Not in Connection with CIC(4) | Robert C. Biesterfeld Jr.(1) | Vesting of nonvested stock options | | $– | | | $– | | | $1,427,522 | | | Vesting of nonvested restricted shares and units | | — | | | — | | | 12,367,650 | |
| Severance | | — | | | — | | | 2,242,816 | | | Annual target bonus |
| — | | | — | |
| — | | Michael P. Zechmeister | Vesting of nonvested stock options | | 493,998 | | | — | | | 493,998 | | | Vesting of nonvested restricted shares and units | | 3,115,237 | | | — | | | 3,115,237 | |
| Severance | | — | | | 1,520,044 | | | 1,150,044 | | | Annual target bonus |
| — | | | 1,258,000 | |
| — | | Arun D. Rajan | Vesting of nonvested stock options | | — | | | — | | | — | | | Vesting of nonvested restricted shares and units | | 4,513,804 | | | — | | | 4,513,804 | | | Severance |
| — | | | 1,722,816 | |
| 1,302,816 | | | Annual target bonus |
| — | | | 1,680,000 | |
| — | | Mac S. Pinkerton | Vesting of nonvested stock options | | 323,136 | | | — | | | 323,136 | | | Vesting of nonvested restricted shares and units |
| 2,808,603 | | | — | |
| 2,808,603 | | | Severance | | — | | | 1,292,816 | | | 980,316 | | | Annual target bonus | | — | | | 1,062,500 | | | — | | Michael J. Short | Vesting of nonvested stock options | | 250,419 | | | — | | | 250,419 | | | Vesting of nonvested restricted shares and units |
| 2,415,902 | | | — | |
| 2,415,902 | | | Severance |
| — | | | 1,292,816 | |
| 980,316 | | | Annual target bonus |
| — | | | 1,062,500 | |
| — | |
(1)Mr. Biesterfeld’s service with the company ended on January 1, 2023 due to an involuntary termination without cause. Therefore, only those payments and benefits that are tied to an involuntary termination without cause not in connection with a change in control are included in this table for Mr. Biesterfeld. (2)PSUs vest at target for death/disability. (3)PSUs vest at better of actual or target upon a CIC; includes 24 months of COBRA premiums. (4)Includes 24 months of COBRA premiums.
2021 EXECUTIVE COMPENSATION
TALENT & COMPENSATION COMMITTEE REPORT
The Talent &Executive Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section with C.H. Robinson management and concurs that it accurately represents the compensation philosophy of the company. Based on its review and discussion with management, the Talent & Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement. The Talent & Compensation Committee Charter is posted on the Investor Relations page of the C.H. Robinson website at www.chrobinson.com.
| | | | | | | Jodee A. Kozlak, Chair
Kermit R. Crawford
Wayne M. Fortun
Timothy C. Gokey Mary J. Steele Guilfoile
James B. Stake Paula C. Tolliver Henry W. "Jay" Winship | | | | The Members of the Talent & Compensation Committee of the Board of Directors |
2021 EXECUTIVE COMPENSATION
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 about the relationship of the annual total compensation of our median employee and the annual total compensation of Robert C. Biesterfeld Jr., our presidentformer President and CEO. For 2021,2022, our last completed fiscal year: •àthe annual total compensation, calculated in accordance with the rules applicable to the Summary Compensation Table included on page 3666 of this proxy statement,Proxy Statement, of our median employee was $57,391;$62,752; and•àthe annual total compensation ofof our former CEO, as reported in the Summary Compensation Table, was $10,233,276.$10,529,870.
Based on this information, for 2021,2022, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 178:168:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K. While conducting our 20212022 pay ratio analysis, the company determined that we could use the same median employee that we identified last year in our 20202021 pay ratio analysis. That median employee was identified on December 31, 2021. We do not believe there has been any change in either our employee population or our employee compensation arrangements or practices that we believe would significantly impact our 20212022 pay ratio disclosure. Similarly, there has been no change in our original median employee’s circumstances that we reasonably believe would result in a significant change in our pay ratio disclosure; rather,disclosure.
Pay Versus Performance As discussed in the increaseCD&A above, our compensation framework and pay-for-performance practices provide appropriate incentives to our executive officers to achieve our financial goals and align our executives with our shareholders’ interests. A substantial portion of our NEOs’ realized compensation is linked to the achievement of our financial, operational, and strategic objectives, and to align our executive pay with changes in the value of our pay ratio was driven by an increaseshareholders’ return. The following tables provide additional compensation information for our NEOs, calculated in our CEO's annualaccordance with SEC regulations, for the years ended December 31, 2022, 2021, and 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table Total for CEO(1) | Compensation Actually Paid to CEO(2) | Average Summary Compensation Table Total for Non-CEO NEOs(3) | Average Compensation Actually Paid to Non-CEO NEOs(2)(3) | Value of Initial Fixed $100 Investment (4) based on: | Net Income ($ in 000’s) | Adjusted Operating Margin(6) | Year | Total Shareholder Return | Peer Group Total Shareholder Return(5) | 2022 | | $10,529,870 | | $9,724,702 | | $3,425,442 | | $3,231,790 | | $125 | | $101 | | $940,524 | | 35.3 | % | 2021 | | 10,233,276 | | 13,016,105 | | 3,328,925 | | 4,066,077 | | 144.14 | | 126.45 | | 844,245 | | 34.3 | % | 2020 | | 5,432,670 | | 7,581,756 | | 1,891,881 | | 2,370,415 | | 123.02 | | 104.41 | | 506,421 | | 27.9 | % | | | | | | | | | | |
(1)Amounts reported are the total compensation based on strong financial results yielding higher incentive compensation payouts. RELATED PARTY TRANSACTIONS
Our Audit Committee, pursuant to the company’s written policy and procedures regarding transactions with related parties, is responsiblereported for reviewing, approving, and/or ratifying any transaction involving the company with related persons. As definedRobert C. Biesterfeld Jr. in the policy, (i) a “related person” includes all directors and executive officersSummary Compensation Table. Robert C. Biesterfeld Jr. served as our CEO for each of the company, any nomineeyears presented.
(2)Amounts reported represent the amount of “Compensation Actually Paid”, as computed in accordance with SEC rules. Our CEO does not participate in a pension plan; therefore, we did not report a change in pension value for director, and any immediate family members of any of the foregoing persons,years reflected in this table, and a deduction from the Summary Compensation Table total related to pension value is not needed. Compensation Actually Paid to CEO reflects the following adjustments from Total Compensation reported in the Summary Compensation Table: | | | | | | | | | | | | | 2022 | 2021 | 2020 | Compensation Reported in Summary Compensation Table | $10,529,870 | | $10,233,276 | | $5,432,670 | | Less: Value of awards reported in Summary Compensation Table | (6,477,576) | | (5,924,530) | | (4,074,949) | | Plus: Year-end value of awards granted during the period that are unvested and outstanding | 4,962,627 | | 5,494,531 | | 4,737,018 | | Plus: Year-end value of awards granted during the period that vested in the period | 2,220,560 | | 1,840,763 | | 521,649 | | Plus: Increase (decrease) in fair value of equity awards that were granted during a prior period that vested | (597,907) | | 780,905 | | 158,698 | | Plus: Increase (decrease) in fair value of equity awards that were granted during a prior period that remain unvested and outstanding | (912,872) | | 591,160 | | 985,472 | | Less: Prior year fair value of awards that were granted during a prior period that failed to vest | — | | — | | (178,802) | | Total Adjustments | (805,168) | | 2,782,829 | | 2,149,086 | | Compensation Actually Paid | $9,724,702 | | $13,016,105 | | $7,581,756 | | | | | |
(3)Amounts reported are the total compensation reported for Michael P. Zechmeister, Arun D. Rajan, Mac S. Pinkerton, and Michael J. Short for 2022 and 2021. Amounts reported are the total compensation reported for Michael P. Zechmeister, Christopher J. O’Brien, Mac S. Pinkerton, and Michael J. Short for 2020. Average Compensation Actually Paid to Non-CEO NEOs reflects the following adjustments from Average Total Compensation reported in the Summary Compensation Table: | | | | | | | | | | | | | 2022 | 2021 | 2020 | Compensation Reported in Summary Compensation Table | $3,425,442 | | $3,328,925 | | $1,891,881 | | Less: Value of awards reported in Summary Compensation Table | (1,678,375) | | (2,003,480) | | (1,039,562) | | Plus: Year-end value of awards granted during the period that are unvested and outstanding | 1,287,775 | | 1,717,221 | | 1,211,225 | | Plus: Year-end value of awards granted during the period that vested in the period | 569,859 | | 731,361 | | 130,315 | | Plus: Increase (decrease) in fair value of equity awards that were granted during a prior period that vested | (150,241) | | 183,273 | | 54,967 | | Plus: Increase (decrease) in fair value of equity awards that were granted during a prior period that remain unvested and outstanding | (222,670) | | 108,777 | | 225,452 | | Less: Prior year fair value of awards that were granted during a prior period that failed to vest | — | | — | | (103,863) | | Total Adjustments | (193,652) | | 737,152 | | 478,534 | | Compensation Actually Paid | $3,231,790 | | $4,066,077 | | $2,370,415 | | | | | |
(4)Total shareholder return as well as shareholders who beneficially own greater than 5%calculated based on a fixed investment of one hundred dollars measured from the market close on December 31, 2019 (the last trading day of 2019) through and including the end of the fiscal year for each year reported in the table. (5)Our peer group used for the TSR calculation is the NASDAQ Transportation Index, which is the industry index used to show our performance in our Form 10-K. (6)Our company-selected measure, which is the measure we believe represents the most important financial performance not otherwise presented in the table above that we use to link Compensation Actually Paid to our NEOs for fiscal 2022 to our company’s Common Stockperformance, is adjusted operating margin. Tabular List of Important Financial Performance Measures The following table lists the most important financial performance measures we used to link Compensation Actually Paid to the NEOs for fiscal 2022 to our performance: Financial Performance Measures | | | | Adjusted Pre-tax Income (APTI)(1) | Diluted Earnings Per Share | Adjusted Gross Profit(2) | Adjusted Operating Margin(2) |
(1)Adjusted pre-tax income is a non-GAAP financial measure. Refer to page 54 for further discussion of APTI including a reconciliation to Income before provision for income taxes. (2)Additional information about adjusted gross profit and their immediate family members;adjusted operating margin, including a reconciliation to gross profit and (ii) a “transaction” includes butoperating margin, is not limited to any financial transaction, arrangement, or relationship. A transaction does not include any compensation arrangement with an executive officer or directoravailable in our annual report on Form 10-K for the year ended December 31, 2022. Relationship Between Pay and Performance We believe the “Compensation Actually Paid” in each of the company that has been approved or authorized byyears reported above and over the three-year cumulative period are reflective of the Talent & Compensation Committee. In determining whetherCommittee’s emphasis on “pay-for-performance” as the “Compensation Actually Paid” fluctuated year-over-year, primarily due to approve or ratify a related party transaction, the Audit Committee will consider, among other things, the business purposeresult of our stock performance and termsour varying levels of the transaction, the process usedachievement against pre-established performance goals under our Annual Cash Incentive Program and our Equity Compensation Program. The charts below reflect that Compensation Actually Paid aligns to evaluate the transaction,trends in ours and the significance ofNASDAQ Transportation Index total shareholder return, net income, and adjusted operating margin results over the interests and amounts involvedsame periods.
Company Actually Paid versus Total Shareholder Return (1)Total shareholder return in the transaction.above chart, reflects the cumulative return of $100 as if invested on December 31, 2019, including reinvestment of any dividends. One of our directors, Brian P. Short, is the president, chief executive officer and, with a number of his family members, holds a controlling interest in AMMF, a privately held trucking and transportation services company. In 2021, C.H. Robinson engaged AMMF in the ordinary course of business as a contracted motor carrier to haul approximately 282 truckloads. The company paid approximately $831,000 to AMMF for these services, which represented just under 1% of AMMF’s revenues for 2021. Management reported to the Audit Committee that the prices paid for the transportation services provided by AMMF were negotiated by 12 separate offices and were consistent with similar loads carried by other third-party vendors using comparable equipment. The transaction with Mr. Short was approved by the Audit Committee in accordance with the policy described above.
The Board of Directors and the Governance Committee also considered C.H. Robinson’s transactions with AMMF in its assessment of Mr. Short’s independence.Company Actually Paid versus Total Net Income
Company Actually Paid versus Adjusted Operating Margin %
| | | | | | | | | 2022 Proxy Statement | | | | | | | Proposal 3: Advisory Vote on the Frequency of Future Advisory Votes on the Compensation of Named Executive OfficersAs described in Proposal 2 above, C.H. Robinson’s shareholders are being provided with the opportunity to vote on a non-binding proposal to approve the compensation of the company’s NEOs. Proposal 3 offers shareholders the opportunity to cast a non-binding advisory vote on the frequency with which C.H. Robinson’s shareholders will vote to approve the compensation of the company’s NEOs. We are required to hold an advisory vote on the frequency of future advisory votes on executive compensation at least once every six years. When we last held this advisory vote in 2017, shareholders voted for every one year as the frequency of future advisory votes to approve executive compensation, and the Board implemented this standard. The Board continues to agree that an annual advisory vote on the compensation of its NEOs is the most appropriate policy at this time. We believe that annual advisory votes will allow our shareholders to more directly respond to the compensation philosophies and programs disclosed in each proxy statement, which will make the results of the vote more relevant and meaningful to the Board of Directors. While the Board recommends an annual advisory vote to approve executive compensation, shareholders may vote to hold the advisory vote every one year, two years, or three years. Shareholders may also abstain from voting on this proposal. As an advisory vote, Proposal 3 is not binding upon C.H. Robinson. However, the Board of Directors values the opinions expressed by shareholders in their vote on this matter and will consider the outcome of the vote when making decisions regarding the frequency of future advisory votes on executive compensation. The frequency (every 1 Year, 2 Years, or 3 Years) that receives the highest number of votes will be deemed the choice of the shareholders. | 43 | | | | | | | | BOARD VOTING RECOMMENDATION The Board of Directors recommends that shareholders vote for “1 YEAR” as the frequency for future advisory votes on the compensation of named executive officers. | | | | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information regarding beneficial ownership of C.H. Robinson’s Common Stock as of Monday, March 14, 2022, by (i) each person who is known by the company to own beneficially more than 5% of the Common Stock, (ii) each director or nominee, and each NEO of the company named in the Summary Compensation Table and (iii) all current company directors and executive officers as a group. Unless otherwise noted, the shareholders listed in the table have sole voting and investment powers with respect to the shares of Common Stock owned by them. Percentage ownership of our management is based on 126,564,638 shares of our Common Stock issued and outstanding on March 14, 2022. Percentage ownership of our largest shareholders is based on the percentages set forth in the Schedule 13G/As referenced below.
| | | | | | | | | | | | | Number of Shares Beneficially Owned(1) | Percentage of Outstanding Shares
| Number of Performance Shares Granted(2)
| BlackRock Inc.(3) 55 East 52nd Street New York, NY 10055 | 18,078,740 | | 13.90% | | The Vanguard Group(4) 100 Vanguard Blvd. Malver, PA 19355 | 15,612,088 | | 12.01% | | First Eagle Investment Management, LLC(5) 1345 Avenue of the Americas New York, NY 10105 | 10,588,958 | | 8.15% | | State Street Corporation State(6) Street Financial Center One Lincoln Street Boston, MA 02111 | 9,339,701 | | 7.19% | | Robert C. Biesterfeld Jr.(7) | 458,659 | | 0.36% | 188,850 | | Michael P. Zechmeister(8) | 98,101 | | 0.08% | 44,625 | | Mac S. Pinkerton(9) | 152,311 | | 0.12% | 48,351 | | Arun D. Rajan | 52,720 | | 0.04% | 31,477 | | Michael J. Short(10) | 80,897 | | 0.06% | 47,632 | | Scott P. Anderson | 21,904 | | 0.02% | | Kermit R. Crawford | 2,970 | | 0.00% | | Wayne M. Fortun | 43,321 | | 0.03% | | Timothy C. Gokey | 12,515 | | 0.01% | | Mark A. Goodburn | 0 | | 0.00% | | Mary J. Steele Guilfoile | 16,718 | | 0.01% | | Jodee A. Kozlak | 17,645 | | 0.01% | | Henry J. Maier | 0 | | 0.00% | | Brian P. Short | 66,577 | | 0.05% | | James B. Stake | 22,589 | | 0.02% | | Paula C. Tolliver | 8,443 | | 0.01% | | Henry W. "Jay" Winship(11) | 269,462 | | 0.21% | | All current executive officers and directors as a group (24 people) | 2,071,034 | | 1.64% | 660,172 | |
(1)Beneficial ownership is determined in accordance with rules of the Securities and Exchange Commission and generally includes voting power and/or investment power with respect to securities. Shares of Common Stock subject to options currently exercisable within 60 days of March 1, 2022, are deemed outstanding for computing the percentage beneficially owned by the person holding such options but are not deemed outstanding for computing the percentage beneficially owned by any other person.
(2)The figures in this column represent the performance based restricted shares and units granted to the NEOs and the other executive officers of the company.
(3)Disclosure is made in reliance upon a statement on Schedule 13G filed with the Securities and Exchange Commission on January 27, 2022. BlackRock, Inc., filing as a parent holding company or control person in accordance with Rule 240.13d-1(b)(1)(ii)(G), has sole voting power over 15,790,151 shares and sole dispositive power over 18,078,740 shares. BlackRock, Inc., reported that various persons have the right to receive or the power to direct to receive the proceeds for the sale of Common Stock, but that no single person’s interests in the Common Stock is more than 5% of the total outstanding Common Stock.
(4)Disclosure is made in reliance upon a statement on Schedule 13G filed with the Securities and Exchange Commission on February 9, 2022. The Vanguard Group, Inc., filing as an investment adviser in accordance with Rule 240.13d-1(b)(ii)(E), has shared voting power over 213,761 shares, sole dispositive power over 15,069,622 shares, and shared dispositive power over 542,466 shares.
(5)Disclosure is made in reliance upon a statement on Schedule 13G/A filed with the Securities and Exchange Commission on February 10, 2022, by First Eagle Investment Management, LLC, filing as an investment adviser in accordance with Rule 240.13d-1(b)(ii)(E), has sole voting power over 9,873,822 shares and sole dispositive power over 10,588,958 shares.
(6)Disclosure is made in reliance upon a statement on Schedule 13G filed with the Securities and Exchange Commission on February 10, 2022, by State Street Corporation, filing as a parent holding company or control person in accordance with Rule 240.13d-1(b)(1)(ii)(G), has shared voting power over 7,653,059 shares and shared dispositive power over 9,315,625 shares.
(7)Includes 272,872 shares underlying performance-based and time-based stock options exercisable within 60 days.
(8)Includes 47,184 shares underlying time-based stock options exercisable within 60 days.
(9)Includes 90,678 shares underlying performance-based and time-based stock options exercisable within 60 days.
(10)Includes 35,496 shares underlying performance-based and time-based stock options exercisable within 60 days.
(11)Includes 269,462 shares beneficially owned by Pacific Point Wealth Management LLC. Mr. Winship disclaims beneficial ownership of the shares held by Pacific Point except to the extent of his actual pecuniary interest in such shares.
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the company’s executive officers and directors and persons who beneficially own more than 10% of the company’s Common Stock to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. Such executive officers, directors, and greater than 10% beneficial owners are required by the regulations of the Securities and Exchange Commission to furnish the company with copies of all Section 16(a) reports they file.
Based solely on a review of the copies of such reports furnished to the company and written representations from the executive officers and directors, we believe that all Section 16(a) filing requirements applicable to our executive officers and directors and greater than 10% beneficial owners were complied with within 2021.
AUDIT COMMITTEE REPORT
The Audit Committee operates under a written charter adopted by the Board of Directors. A copy of the charter can be found on the Investor Relations page of the C.H. Robinson website at www.chrobinson.com. The Audit Committee of the company’s Board of Directors is comprised of the following independent directors: Scott P. Anderson, Timothy C. Gokey, Brian P. Short, James B. Stake (Chair), and Paula C. Tolliver. The Board of Directors has reviewed the status of each of the members of its Audit Committee and has confirmed that each meets the independence requirements of the current Nasdaq listing standards that apply to Audit Committee members, and that Messrs. Anderson, Gokey, Short, and Stake, and Ms. Tolliver each qualifies as an “Audit Committee Financial Expert,” as defined by the Securities and Exchange Commission.
Management is responsible for the company’s internal controls and the financial reporting process. C.H. Robinson’s independent registered public accounting firm is responsible for performing an independent audit of our financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to hire, monitor, and oversee the independent auditors.
In this context, the Audit Committee has met and held discussions with management and Deloitte & Touche LLP, the company’s independent accountant for the fiscal year ended December 31, 2021. Management represented to the Audit Committee that the company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountant. The Audit Committee discussed with the independent accountant matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission.
Our independent accountant also provided to the Audit Committee the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding our independent accountant communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent accountant the independent accountant’s independence. The Audit Committee also considered whether the provision of any non-audit services was compatible with maintaining the independence of Deloitte & Touche LLP as the company’s independent auditor.
Based upon the Audit Committee’s discussions with management and the independent accountant, the Audit Committee’s review of the representation of management, and the report of the independent accountant to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission.
| | | | | | | James B. Stake, Chair
Scott P. Anderson
Timothy C. Gokey
Brian P. Short Paula C. Tolliver
| | | | The MembersProposal 4: Ratification of the Selection of Independent Auditors
The Audit Committee of has selected Deloitte & Touche LLP as the Board of Directors
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PROPOSAL TWO: ADVISORY VOTE ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)
independent registered public accountant firm for C.H. Robinson is providing its shareholders the opportunity to cast a non-binding advisory vote on the compensation of its NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion in this Proxy Statement. This advisory vote is provided as required by section 14A of the Securities Exchange Act of 1934, as amended. C.H. Robinson, with guidance and oversight from our Talent & Compensation Committee, has adopted an executive compensation philosophy that is intended to be consistent with our overall compensation approach and to achieve the following goals: 1)provide a level of total compensation necessary to attract, retain, and motivate high quality executives;
2)pay incentive compensation aligned with company earnings at various levels;
3)emphasize both team and company performance;
4)balance incentive compensation to achieve both short-term and long-term profitability and growth; and
5)encourage executives to make long-term career commitments to C.H. Robinson and our shareholders.
We believe that our executive compensation program is aligned with the long-term interests of our shareholders. In considering this proposal, we encourage you to review the 2021 Compensation Discussion and Analysis section of this Proxy Statement and related compensation tables and narrative discussion beginning on page 19. It provides detailed information on our executive compensation, including our compensation philosophy and objectives and the 2021 compensation of our NEOs.
C.H. Robinson has requested shareholder approval of the compensation of our NEOs on an annual basis. Our compensation disclosures, including our Compensation Discussion and Analysis, compensation tables, and discussion in this Proxy Statement, are done in accordance with the Securities and Exchange Commission’s compensation disclosure rules.
As an advisory vote, this Proposal Two is non-binding. However, the Board of Directors and the Talent & Compensation Committee value the opinions of our shareholders and will consider the results of the vote when making future compensation decisions for our NEOs.
BOARD VOTING RECOMMENDATION
| | | The Board of Directors recommends a vote FOR the approval of the compensation of our NEOs. |
PROPOSAL THREE: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Audit Committee has selected Deloitte & Touche LLP as the independent registered public accountant firm for C.H. Robinson for the fiscal year ending December 31, 2022.fiscal year ending December 31, 2023. Representatives of Deloitte & Touche LLP will be present at our Annual Meeting, will have an opportunity to make a statement if they desire to do so, and will be available to answer shareholder questions. If the appointment of Deloitte & Touche LLP is not ratified by the shareholders, the Audit Committee is not obligated to appoint other accountants, but the Audit Committee will give consideration to such unfavorable vote.
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