Our directors party to a Director Stockholder’s Agreement have limited “piggyback” registration rights with respect to shares of our common stock, provided that in lieu of piggyback rights where such rights would otherwise be available, our Board of Directors, in its sole discretion, may elect to waive the transfer restrictions (other than any such restrictions contained in an underwriters’ lock-up or in connection with a public offering) on the number of shares of Common Stock that would have been subject to such piggyback rights.
Pursuant to the terms of the Director Stockholder’s Agreement, the directors party to such agreement are subject to covenants not to (1) disclose confidential information, (2) solicit customers and certain employees, consultants and independent contractors of the Company, (3) compete with the Company and (4) disparage the Company.
Mr. Humphrey
Mr. Humphrey, who joined our Board on February 7, 2018, will be entitled to receive the compensation described below under “Director Compensation in 2018.” However, while our directors who served prior to 2018 will not receive their first annual equity grant until 2019, in February 2018 Mr. Humphrey received an award of restricted stock units having a fair market value of $125,000 which vests on the anniversary of the grant date.
Stock Ownership and Retention Policy
Our directors are also subject to the stock ownership guidelines and retention policy described under “—Compensation“Compensation Discussion and Analysis—Analysis―Other Compensation Practices that Align Our NEOs to Our Stockholders―Stock Ownership and Retention Policy.”
Director Compensation in 2018
Following a competitive market assessment of non-employee director compensation conducted by Pearl Meyer, the Board adopted the following director compensation program for each of our non-employee directors not associated with KKR:
Cash retainer of $75,000, payable quarterly in arrears;
Additional cash retainer of $25,000 payable quarterly in arrears for serving as the chairperson of our Audit Committee or $12,500 payable quarterly in arrears for serving as the chairperson of our Compensation Committee; and
An annual equity award having a fair market value of $125,000 payable in restricted stock units which vests on the anniversary of the grant date.
Our directors will not be paid any fees for attending meetings, however, our directors will be reimbursed for reasonable travel and related expenses associated with attendance at Board or committee meetings. Because each of our non-employee directors not associated with KKR other than Mr. Humphrey was granted an equity award at or before our initial public offering, such directors will not receive their first equity awards under our newly-adopted director compensation program until 2019.
Compensation Committee Interlocks and Insider Participation
During 2017, none2018, our Compensation Committee was composed of Messrs. Stavros, Vande Steeg and Weisenbeck. None of the members of our Compensation Committee has at any time been one of our executive officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
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 (“Item 402(u)”), the Company is providing the following information regarding the relationship of the median of the annual total compensation of all of our employees (except Vicente Reynal, our Chief Executive Officer (“CEO”)), to the annual total compensation of Mr. Reynal, calculated in a manner consistent with Item 402(u). For 2018, our last completed fiscal year:
The median of the annual total compensation of all of our employees, excluding our CEO, was $61,278.
The annual total compensation of our CEO was $5,705,349.
Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees except our CEO was 93:1.
We are partiesdetermined that, as of November 30, 2018, our employee population consisted of 6,656 individuals, including full time, part time, and temporary employees.
To identify our “median employee” from this employee population, we obtained annual base salary and target annual bonus information as of November 30, 2018 from our internal payroll records for each employee in our employee population. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. Base salary amounts for employees located outside the United States and compensated in currencies other than U.S. dollars were converted to certain transactionsU.S. dollars based on the average annual exchange rate for 2018. We then ranked the resulting annual base salary plus target annual bonus amounts for all of the employees in the employee population other than our CEO to determine our median employee. Once we identified our median employee, who is an engineer in our Industrials Group, we combined all of the elements of such employee’s compensation for 2018 in accordance with KKR described below under “Item 13. Certain Relationshipsthe requirements of Item 402(c)(2)(x) of Regulation S-K for the Summary Compensation Table and Related Transactions, and Director Independence—Transactions with Related Persons”.converted amounts in Euros to U.S. dollars based on the average annual exchange rate for 2018. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our Summary Compensation Table set forth above in this proxy statement.
