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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment
(Amendment No.  )


Filed by the Registrant ☒   Filed by a Party other than the Registrant  ☐
Filed by the Registrantx
Filed by a party other than the Registranto

Check the appropriate box:

    o
☐
Preliminary Proxy Statement
    o
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
    x☒
Definitive Proxy Statement
    o
☐
Definitive Additional Materials
    o
☐
Soliciting Material Pursuant tounder §240.14a-12

Stoneridge, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

STONERIDGE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing proxy statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials:materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the formForm or scheduleSchedule and the date of its filing.
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Amount Previously Paid:
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Date Filed:
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Not Applicable
 

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[GRAPHIC MISSING] 

STONERIDGE, INC.
39675 MacKenzie Drive, Suite 400
Novi, Michigan 48377

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


Dear Shareholder:

We invite you to attend our 20192020 Annual Meeting of Shareholders (the “Annual Meeting”) on Tuesday, May 14, 2019,19, 2020, at 11:00 a.m. Eastern Daylight Savings Time (“EDT”). The Annual Meeting can be accessed by the Internet at our corporate headquarters, 39675 MacKenzie Drive, Suite 400, Novi, Michigan 48377.

www.virtualshareholdersmeeting.com/SRI2020. Because the Annual Meeting is virtual and being conducted electronically, shareholders cannot attend the meeting in person.

The purpose of the Annual Meeting is to consider and take action on the following matters:

items of business:
(1)1.Election ofTo elect eight directors, each for a term of one year;
(2)2.RatificationTo ratify of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019;2020;
(3)3.Advisory approval ofTo vote on an advisory resolution to approve executive compensation;
(4)To vote on a proposal to approve an amendment to the 2016 Long-Term Incentive Plan to increase common shares available for issuance; and
(5)4.AnyTo transact such other business as may be properly brought before the Annual Meeting.Meeting and any postponement or adjournment thereof.

Record Date. Only shareholders of record at the close of business on March 22, 2019,20, 2020, the record date, are entitled to notice of and to vote at the Annual Meeting.
We urge you to vote your shares on the Internet, by toll-free telephone call or, if you have requested a paper copy of our proxy materials, by signing, dating and returning the proxy card in the envelope provided.

By order of the Board of Directors,

[GRAPHIC MISSING] 

THOMAS M. DONO, Jr.,
Chief Legal Officer and Secretary

​​
By order of the Board of Directors,
​​

​​
THOMAS M. DONO, Jr.,
​​
Chief Legal Officer and Secretary
Dated: April 4, 2019

2, 2020

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 14, 2019:

19, 2020:

This Proxy Statement and the Company’s 20182019 Annual Report to Shareholders are also available atwww.envisionreports.com/sri.

www.proxyvote.com.

YOUR VOTE IS IMPORTANT.
PLEASE VOTE YOUR SHARES PROMPTLY ON THE INTERNET, BY TOLL-FREE TELEPHONE
CALL OR, IF YOU HAVE REQUESTED A PAPER COPY OF OUR PROXY MATERIALS, BY SIGNING,
DATING AND RETURNING THE PROXY CARD IN THE ENVELOPE PROVIDED.VOTE.

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20192020 Proxy Statement

Table of Contents

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Page
Page
20192020 Proxy Statement Summary
​​
i
Information About Annual Meeting and Voting
​​
1
Beneficial Ownership
​​
4
•
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Proposal 1 —One - Election of Directors
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5
 •

• 

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Proposal 2 — 

Two - Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2019

2020
​​
9
Audit Committee Report
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1110
•
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Proposal 3 —Three - Approve, on an advisory basis, the compensation of named executives
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1211
Corporate Governance
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1312
Compensation Discussion and Analysis
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1817
Compensation Committee Report
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2928
Executive Compensation Tables
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3029
 •
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Proposal Four - Amendment to 2016 Long-Term Incentive Plan to increase the number of authorized common shares available for issuance
​​
37
Other Information
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3741

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STONERIDGE, INC.
2019

2020 Proxy Statement Summary

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.

We are furnishing to our shareholders these proxy materials, which include this Proxy Statement and our 20182019 Annual Report to Shareholders, by providing access to them on the Internet atwww.envisionreports.com/sriwww.proxyvote.com. On or about April 4, 20192, 2020 we began mailing shareholders a Notice of InternetRegarding Availability of Proxy Materials (the “Notice”(“Notice of Internet Availability”) containing important information, including instructions on how to access the proxy materials online and how to vote your shares over the Internet. If you receive a Notice of Internet Availability, you will not receive a paper or e-mail copy of the proxy materials unless you request one in the manner set forth in the Notice.

Notice of Internet Availability.

The Board of Directors is soliciting proxies in connection with the 20192020 Annual Meeting of Shareholders and encourages you to read the Proxy Statement and vote your shares by Internet, by telephone or by mailing your proxy card or voting instruction form.

Stoneridge, Inc. 20192020 Annual Meeting Information

Date and Time:
​​
Tuesday, May 14, 2019,19, 2020, at 11:00 a.m. Eastern Time(EDT)
Location:
Virtual Meeting:
​Stoneridge, Inc., 39675 MacKenzie Drive, Suite 400, Novi, MI 48377​
Access the meeting at www.virtualshareholdersmeeting.com/SRI2020
Record Date:
​​
March 22, 201920, 2020
Voting:
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Shareholders as of the record date are entitled to vote. Each common share is entitled to one vote for each Director nominee and one vote for each of the other proposals presented for a vote.

Matters to be Considered:

Management Proposals
​​
Board Vote
Recommendation
​​
Page (for
more
information)
1.
​​
Elect eight directors named in this Proxy Statement
​​
FOR ALL
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5
2.
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Ratify the appointment of Ernst & Young LLP
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FOR
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9
3.
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Provide advisory vote on executive compensation
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FOR
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11
4.
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Amend 2016 Long-Term Incentive Plan to increase available shares
​​
FOR
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37
Management ProposalsBoard Vote
Recommendation		Page (for more
information)

1.

Elect eight directors named in this Proxy Statement

FOR ALL5

2.

Ratify the appointment of Ernst & Young LLP

FOR9

3.

Provide advisory vote on executive compensation

FOR12

Company Performance

We delivered strong financial performance in 20182019 as wedespite lower sales, the Company experienced higher salesoperating income and generated higher net income.income compared to prior year. The Company believes that focusing our portfolio on smart products, or products which contain embedded electronics or logic, will address industry megatrends and have a positive impact on both our top-line growth and underlying margins.

Net sales increaseddecreased by 5.1%$31.9 million, or 3.7%, compared to the prior year, due to higher sales in our Electronics segment, offset by lower sales in our Control Devices and PSTall segments. Our Electronics segment net sales increased primarily due to an increase in European and North American commercial vehicle and off-highway product sales. Our Control Devices segment net sales decreased primarily as a result of decreased sales volume in the North American automotive market, as a result of certain program volume reductions, partially offset by increased sales volume increases in our commercial vehicle and China automotive markets.and European automotive as well as the one-time sale of product lines and assets related to certain non-core switches and connectors. Our PSTElectronics segment net sales decreased primarily due to a decrease in sales volume in our European commercial vehicle market and unfavorable foreign currency translation offset by an increase in sales volume in our North American and China commercial vehicle markets and increased sales in our off-highway vehicle products. Our Stoneridge Brazil segment (previously referred to as well as“PST”) net sales decreased due to lower volumes for our audio products and our Argentina aftermarket channel.channel, audio and alarm products, tracking devices and monitoring service revenues offset by higher volumes for our OEM and factory authorized dealer installer products.
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Net income attributable to Stoneridge, Inc. in 2019 increased by $8.8$6.4 million compared to the prior year, which was primarily due to higher sales in our Electronics segmentthe gain on disposal of Control Devices’ product lines and assets related to certain non-core switches and connectors (“Non-core Products”) of $33.6 million and the recovery of Brazilian indirect taxes of $6.5 million which were offset by lowerdecreased sales in our Control Devices and PST segments, and gross margin expansion and improved operational efficiencyan increase in our Electronics and PST segments. The Company

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also experienced favorable selling, general and administrativerestructuring costs (“SG&A”) in 2018 compared to the prior year due to a reduction of expense for the fair value of the earn-out considerations$9.6 million mostly related to our Orlaco and PST acquisitions.

previously announced closure of our Canton facility (“Canton Restructuring”).
(in thousands, except earnings per share and share price)
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2019
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2018
Net sales
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$ 834,289
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$ 866,199
Operating income
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71,281
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67,004
Net income
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60,291
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53,848
Diluted earnings per share attributable to Stoneridge, Inc.
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$2.13
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$1.85
Share price at December 31
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$29.32
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$24.65
  
(in thousands, except earnings per share and share price) 2018 2017 
Net sales $866,199  $824,444 
Operating income  67,004   57,370 
Net income  53,848   45,049 
Net loss attributable to noncontrolling interest  —   (130) 
Net income attributable to Stoneridge, Inc.  53,848   45,179 
Diluted earnings per share attributable to Stoneridge, Inc. $1.85  $1.57 
Share Price at December 31 $24.65  $22.86 

Director Nominees

Below is a summary of the director nominees, who are elected for one-year terms. Additional information about each director nominee and his or her qualifications may be found beginning on page 65.

        
Name Age Director Since Primary Occupation Independent Committee Memberships
 AC CC NCGC CEC
Jonathan B. DeGaynor  52   2015   President and CEO of Stoneridge, Inc.                          
Jeffrey P. Draime  52   2005   Self-employed business consultant   ü        ü   ü      
Douglas C. Jacobs  79
  		   2004
  		   Chief Financial Officer and Treasurer,
Brownstone Services LLC		   ü
  		   C
  		   ü
  		           
Ira C. Kaplan  65
  		   2009
  		   Executive Chairman of Benesch,
Friedlander, Coplan & Aronoff LLP		   ü
  		   ü
  		        ü
  		   ü
  		 
Kim Korth  64   2006   President and CEO 6th Avenue Group   ü        C   ü   ü 
William M. Lasky  71
  		   2004
  		   Retired, Former President and
CEO of Accuride Corporation		   L
  		   ü
  		   ü
  		   C
  		      
George S. Mayes, Jr.  60   2012   Self-employed business consultant   ü   ü             C 
Paul J. Schlather  66   2009   Self-employed business consultant   ü   ü             ü 

 
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Committee Memberships
Name
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Age
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Director
Since
​​
Primary Occupation
​​
Independent
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AC
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CC
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NCGC
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CEC
Jonathan B. DeGaynor
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53
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2015
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President and CEO of Stoneridge, Inc.
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​​
 
​​
 
​​
 
​​
 
Jeffrey P. Draime
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53
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2005
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Self-employed business consultant
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✔
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✔
​​
✔
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Douglas C. Jacobs
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80
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2004
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Chief Financial Officer and Treasurer, Brownstone Services LLC
​​
✔
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C
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✔
​​
 
​​
 
Ira C. Kaplan
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66
​​
2009
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Executive Chairman of Benesch, Friedlander, Coplan & Aronoff LLP
​​
✔
​​
✔
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​​
✔
​​
✔
Kim Korth
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65
​​
2006
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President and CEO 6th Avenue Group
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✔
​​
 
​​
C
​​
✔
​​
✔
William M. Lasky
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72
​​
2004
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Retired, Former President and CEO of Accuride Corporation
​​
L
​​
✔
​​
✔
​​
C
​​
 
George S. Mayes, Jr.
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61
​​
2012
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Self-employed business consultant
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✔
​​
✔
​​
C
​​
 
​​
 
Paul J. Schlather
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67
​​
2009
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Self-employed business consultant
​​
✔
​​
✔
​​
 
​​
 
​​
✔
AC
​​
Audit Committee
​​
C
​​
Committee Chairperson
AC
CC
​Audit Committee​CCommittee Chairperson
CC
Compensation Committee
​L​
L
​​
Lead Independent Director
NCGC
​​
Nominating and Corporate Governance Committee
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​​
CEC
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Compliance and Ethics Committee
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​​

Ratification of the appointment of Ernst & Young LLP

We are asking our shareholders to ratify the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2019.2020. For more information, see page 9.

Executive Compensation Highlights

Our executive compensation program is designed to attract, retain, motivate and reward talented executives who advance our strategic, operational and financial objectives and, thereby, enhance shareholder value. The primary objectives of our compensation programs for executive officers are to:

•  Attract and retain talented executive officers by providing a compensation package that is competitive with that offered by similarly situated companies;
•  Create a compensation structure under which a substantial portion of total compensation is based on achievement of performance goals; and
•  Align total compensation with the objectives and strategies of our business and shareholders.
Attract and retain talented executive officers by providing a compensation package that is competitive with that offered by similarly situated companies;
Create a compensation structure under which a substantial portion of total compensation is based on achievement of performance goals; and

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Align total compensation with the objectives and strategies of our business and shareholders.

Key elements of our 20182019 compensation program were as follows:

••  
Base Salary. Base salary has been targeted at the 50th percentile of our comparator group.
••  
Annual Incentive Plan (AIP)(“AIP”). The 20182019 AIP was comprised of consolidated and, where appropriate, divisional financial performance metrics. In addition, there is an individual performance component.
••  
Long-Term Incentive Plan (LTIP)(“LTIP”). Long-term incentives were awarded under our Long-Term Incentive Plan for 20182019 and targeted at approximately the 50th percentile of our comparator group. These awards will vest in three years, weight performance-based share unitsperformance shares (“Performance Shares”) more heavily than time-based restricted share units (“RSUs”), and are allocated as follows: 25%10% Performance Shares that vest based on achievement of a three year return on invested capital (“ROIC”) target; 20% Performance Shares that vest based on achievement of a three year cumulative earnings per share (“EPS”) target; 30%25% Performance Shares that vest based on our Total Shareholder Return (“TSR”) over a three year period compared to a group of peer companies; and 45% RSUs that vest based on the passage of time.

For more information related to our executive compensation program, see page 1817.

Amendment to 2016 LTIP Incentive Plan
We are also asking for our shareholders to approval an amendment to our 2016 Long-Term Incentive Plan (the “2016 LTIP”) to add shares available for issuance under the 2016 LTIP to help the Company in achieving the goal of promoting long-term growth and profitability. The amendment to add shares will enable the Company to continue to attract, retain and reward key employees.

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STONERIDGE, INC.

PROXY STATEMENT


The Board of Directors (the “Board”) of Stoneridge, Inc. (the “Company”) is sending you this Proxy Statement to ask for your voteproxy as a StoneridgeCompany shareholder on certain matters to be voted on at our Annual Meeting of Shareholders (“Annual Meeting”) to be held on Tuesday, May 14, 2019,19, 2020, at 11:00 a.m. Eastern Time, at Stoneridge Inc.(EDT), 39675 MacKenzie Drive, Suite 400, Novi, Michigan 48377. for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Shareholders. This year’s meeting will be a completely “virtual” Annual Meeting. You can attend the Annual Meeting online, vote your shares electronically, and submit your questions during the Annual Meeting, by visiting www.virtualshareholdersmeeting.com/SRI2020. You will need to have your 16-digit Control Number included on your Notice Internet Availability or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting.
We are mailing shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access the proxy materials and how to vote online on or about April 4, 2019.

2, 2020.

Annual Report; Internet Availability

As permitted by U.S. Securities and Exchange Commission (“SEC”) rules, we are furnishing our proxy materials, which include this Proxy Statement, our Notice of Annual Meeting of Shareholders and our 20182019 Annual Report to Shareholders, to shareholders by providing access to the proxy materials on the Internet atwww.envisionreports.com/sri.

www.proxyvote.com. The Company anticipates that the Notice Internet Availability in connection with our proxy materials will first be mailed on or about April 2, 2020 to all shareholders entitled to vote at the Annual Meeting and we will post our proxy materials on the website referenced in the Notice of Internet Availability. As more fully described in the Notice of Internet Availability, all shareholders may choose to access our proxy materials on the website referred to in the Notice of Internet Availability or may request to receive, without charge, a printed set of our proxy materials.

Solicitation of Proxies

The Board is making this solicitation of proxies and we will pay the cost of the solicitation. We have retained Georgeson Inc., at an estimated cost of $9,300, to assist in the solicitation of proxies from brokers, nominees, institutions and individuals. In addition, to the solicitation of proxies by mail by Georgeson Inc., our employees may solicit proxies by telephone, facsimile or e-mail.

Proxies

The common shares represented by your proxy will be voted in accordance with the instructions as indicated on your proxy.proxy card. In the absence of any such instructions, they will be voted to (i) elect the director nominees set forth under “Election of Directors”; (ii) ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019; and2020; (iii) approve on an advisor basis the compensation of our Named Executive Officers.

Officers, and (iv) approve the amendment to the 2016 Long-Term Incentive Plan.

No business other than that set forth in the accompanying Notice of Annual Meeting of Shareholders expected to come before the Annual Meeting. Should any other matter requiring a vote of shareholders properly arise, the persons named in the enclosed form of proxy will vote such proxy in accordance with their judgment.
Revocation of Proxies

Your presenceparticipation at the Annual Meeting, without further action, will not revoke your proxy. However, if you are a registered shareholder you may revoke your proxy at any time before it has been exercised by:
signing and delivering a later-dated proxy;
voting again by Internet or telephone prior to 1:00 a.m. (EDT) on May 19, 2020 (only the latest vote you submit will be counted);
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•  signing and delivering a later-dated proxy;
•  voting again by Internet or telephone prior to 1:00 a.m. EDT on May 14, 2019 (only the latest vote you submit will be counted);
•  giving notice to the Company in writing at our address indicated on the attached Notice of Annual Meeting of Shareholders (the notification must be received by the close of business on May 13, 2019); or
•  by voting in person at the Annual Meeting after requesting that the earlier proxy be revoked.

giving notice to the Company in writing at our address indicated on the attached Notice of Annual Meeting of Shareholders (the notification must be received by the close of business on May 15, 2020); or
by voting at the Annual Meeting.
If you hold your common shares in “street name”, in order to change or revoke your voting instructions you must follow the specific voting directions provided to you by your bank, broker or other holder of record.

Virtual Shareholder Meeting

1

This year we are holding a virtual Annual Meeting instead of a physical Annual Meeting as we have done in the past to address the concerns and recent government orders related to the COVID-19 pandemic. In addition to concerns related to the COVID-19 pandemic, holding a virtual Annual Meeting should provide expanded access, improve communication and provide potential cost savings to our shareholders and our Company. We believe that holding a virtual Annual Meeting will enable more shareholders to attend and participate in the meeting because our shareholders can fully participate from any location with Internet access.

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The Annual Meeting will be conducted exclusively online via live, audio-only, webcast, allowing all of the Company’s shareholders the option to participate in the live, online shareholder meeting from any location convenient to them. Only shareholders at the close of business on the record date may attend, vote and ask questions at the Annual Meeting by following the instructions provided. The virtual Annual Meeting can be accessed by visiting:

www.virtualshareholdersmeeting.com/SRI2020

You will need to have your 16-digit Control Number included on our Notice of Internet Availability and/or your proxy card (if you received a printed copy of the proxy materials) to join and participate in the Annual Meeting.
We encourage you to access the Annual Meeting before the start time of 11:00 a.m. (EDT), on May 19, 2020. Please allow ample time for online check-in, which will begin at 10:30 a.m. (EDT) on May 19, 2020.
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting. If you encounter any difficulties accessing the meeting or during the meeting time, please call: 800-586-1548 (U.S.) and 303-562-9288 (international).
Shareholders who participate in the virtual Annual Meeting by means of the hyperlink above will be deemed to be “present in person,” as such term is used in this Proxy Statement, including for purpose of determining a quorum and counting votes.
Record Date and Voting Eligibility

Only shareholders of record at the close of business on the record date, March 22, 2019,20, 2020, are entitled to receive notice of the Annual Meeting and to vote the common shares held on the record date at the meeting. On the record date, our outstanding voting securities consisted of 28,694,65526,986,857 common shares, without par value, each of which is entitled to one vote on each matter properly brought before the meeting.

Voting

The Board is asking for your proxy in advance of the Annual Meeting. Giving your proxy means you authorize the individuals designated as proxies to vote your common shares at the Annual Meeting in the manner you direct. You may give your proxy or otherwise vote your common shares in one of several ways, depending on how you hold your shares.
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Shareholders of Record

If your common shares are registered directly in your name with the Company’s transfer agent, you are considered the “shareholder of record” of those shares and you may:

•  By Telephone.  You may vote by telephone by calling toll-free 1-800-652-VOTE (8683) on a touch-tone phone until 1:00 a.m. Eastern Daylight Savings Time on May 14, 2019. Please have your Notice of Availability of Proxy Materials or proxy card in hand when you call. The telephone voting system has easy-to-follow instructions and provides confirmation that the system has properly recorded your vote.
•  By Internet.  You may vote your shares by proxy by visiting the websitewww.envisionreports.com/sri until 1:00 a.m. Eastern Daylight Savings Time on May 14, 2019. Please have your Notice of Availability of Proxy Materials or proxy card in hand when you access the website. The website has easy-to-follow instructions and provides confirmation that the system has properly recorded your vote.
•  By Mail.  If you have requested or receive paper copies of our proxy materials by mail, you may vote your shares by proxy by signing, dating and returning the proxy card in the postage-paid envelope provided. If you vote by telephone or over the Internet, you do not need to return your proxy card by mail.
•  In Person.  You may vote your shares by attending the Annual Meeting in person and submitting your proxy card as instructed (if you have requested paper copies of our proxy materials) or completing a ballot that will be distributed at the Annual Meeting. However, you are encouraged to vote by mail, telephone or Internet even if you plan to attend the meeting.

By Telephone. You may vote by telephone by calling toll-free 1-800-690-6903 on a touch-tone phone until 11:59 p.m. EDT on May 18, 2020. Please have your Notice of Internet Availability or proxy card in hand when you call. The telephone voting system has easy-to-follow instructions and provides confirmation that the system has properly recorded your vote.
By Internet. You may vote your shares by proxy by visiting the website www.proxyvote.com until 11:59 p.m. EDT on May 18, 2020. Please have your Notice Internet of Availability or proxy card in hand when you access the website. The website has easy-to-follow instructions and provides confirmation that the system has properly recorded your vote.
By Mail. If you have requested or receive paper copies of our proxy materials by mail, you may vote your shares by proxy by signing, dating and returning the proxy card in the postage-paid envelope provided. Mailed proxy cards with respect to shares held of record should be mailed to allow sufficient time for delivery and tabulation. If you vote by telephone or over the Internet, you do not need to return your proxy card by mail.
At the Annual Meeting. You may vote your shares by attending the Annual Meeting by accessing www.virtualshareholdersmeeting.com/SRI2020 and voting using the 16-digit control number included on your proxy card and/or on your Notice of Internet Availability. However, you are encouraged to vote in advance of the Annual Meeting by mail, telephone or Internet even if you plan to participate in the Annual Meeting via the Internet.
Street Name Holders
•  You must vote your common shares through the procedures established by your bank, broker, or other holder of record. Your bank, broker, or other holder of record has enclosed or otherwise provided a voting instruction card for you to use in directing the bank, broker, or other holder of record how to vote your common shares.
•  You may vote at the meeting, however, to do so you will first need to ask your bank, broker or other holder of record to furnish you with a legal proxy. You will need to bring the legal proxy with you to the meeting and hand it in with a signed ballot that you can request at the meeting. You will not be able to vote your common shares at the meeting without a legal proxy and signed ballot.

You must vote your common shares through the procedures established by your bank, broker, or other holder of record. Your bank, broker, or other holder of record has enclosed or otherwise provided a voting instruction card for you to use in directing the bank, broker, or other holder of record how to vote your common shares.

2

If you are a shareholder holding your shares in “street name” as of the close of business on March 20, 2020, you may gain access to the Annual Meeting at www.virtualshareholdersmeeting.com/SRI2020 by following the instructions in the voting instruction card provided by your bank, broker or other holder of record. You may not vote your shares electronically at the Annual Meeting unless you receive a valid proxy from your bank, broker dealer or other holder of record.

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If you do not instruct your broker, bank or other nominee on how to vote your shares, it will have discretionary authority, under New York Stock Exchange (“NYSE”) rules, to vote your shares on the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 20192020 (“Proposal 2”). However, your broker, bank or other nominee will not be permitted to vote your shares (a “broker non-vote”) on the election of directors (“Proposal 1”) or, the advisory vote to approve theour compensation of our Named Executive Officers (“Proposal 3”), or the proposal to amend the 2016 LTIP (“Proposal 4”).

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common shares as of February 28, 2019,29, 2020, by: (a) our directors and nominees for election as directors; (b) each other person who is known by us to own beneficially more than 5% of our outstanding common shares; (c) the executive officers named in the Summary Compensation Table; and (d) all of our executive officers and directors as a group.

Name of Beneficial Owner
​​
Number of
Shares
Beneficially
Owned(1)
​​
Percent
of Class
BlackRock, Inc.(2)
​​
1,996,482
​​
7.4%
Dimensional Fund Advisors LP(3)
​​
1,848,511
​​
6.8
T. Rowe Price Associates, Inc.(4)
​​
1,704,149
​​
6.3
Massachusetts Financial Services Company(5)
​​
1,634,138
​​
6.0
The Vanguard Group(6)
​​
1,608,314
​​
5.9
Silvercrest Asset Management Group LLC(7)
​​
1,565,554
​​
5.8
Jeffrey P. Draime(8)
​​
440,213
​​
1.6
Jonathan B. DeGaynor(9)
​​
225,113
​​
*
William M. Lasky(10)
​​
127,579
​​
*
Paul J. Schlather(11)
​​
116,536
​​
*
Ira C. Kaplan(12)
​​
62,551
​​
*
Douglas C. Jacobs(10)
​​
61,859
​​
*
Kim Korth(10)
​​
56,599
​​
*
Robert R. Krakowiak(13)
​​
53,486
​​
*
George S. Mayes, Jr.(10)
​​
45,619
​​
*
Robert R. Willig, Jr.
​​
1,100
​​
*
Thomas M. Dono, Jr.
​​
—
​​
*
Laurent P. Borne
​​
—
​​
*
All Executive Officers and Directors as a Group (17 persons)
​​
1,244,095
​​
4.6%
  
Name of Beneficial Owner Number of
Shares
Beneficially
Owned(1)		 Percent   
of Class   
Dimensional Fund Advisors(2)  1,932,443            6.8% 
BlackRock, Inc.(3)  1,918,808   6.7 
The Vanguard Group(4)  1,658,326   5.8 
Jeffrey P. Draime(5)  436,678   1.5 
Jonathan B. DeGaynor(6)  174,619   * 
William M. Lasky(7)  124,044   * 
Paul J. Schlather(8)  113,001   * 
Thomas A. Beaver(9)  82,691   * 
Ira C. Kaplan(10)  59,016   * 
Douglas C. Jacobs(11)  58,324   * 
Kim Korth(12)  53,064   * 
George S. Mayes, Jr.(13)  42,084   * 
Robert R. Willig, Jr.  1,100   * 
Robert R. Krakowiak  —   * 
Thomas M. Dono, Jr.  —   * 
All Executive Officers and Directors as a Group (17 persons)  1,207,392   4.2% 
* Less than 1%.
*Less than 1%.
(1)
Unless otherwise indicated, the beneficial owner has sole voting and investment power over such common shares.
(2)
(2)
According to a Schedule 13G/A filed with the SEC by BlackRock, Inc. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
(3)
According to a Schedule 13G/A filed with the SEC by Dimensional Fund Advisors LP, all securities reported are owned by commingled funds, group trusts and separate accounts to which it or its subsidiaries serve as investment advisor, sub-advisor and/or manager. Dimensional Fund Advisors LP has disclaimed beneficial ownership of all such securities. The address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746.
(4)
(3)According to a Schedule 13G filed with the SEC by T. Rowe Price Associates, Inc. The address of T. Rowe Price Associates Inc. is 100 E. Pratt Street, Baltimore, MD 21202.
(5)
According to a Schedule 13G filed with the SEC by Massachusetts Financial Services Company (“MFS”). The address of MFS is 111 Huntington Ave, Boston, MA 02199.
(6)
According to a Schedule 13G/A filed with the SEC by BlackRock, Inc. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
(4)According to a Schedule 13G filed with the SEC by The Vanguard Group. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(7)
(5)
According to a Schedule 13G filed with the SEC by Silvercrest Asset Management Group LLC. The address of Silvercrest Asset Management Group LLC is 1330 Avenue of the Americas, 38th Floor, New York, NY 10019.
(8)
Represents 347,714 common shares held in trust for the benefit of Draime family members, of which Mr. Draime is trustee, 84,68788,964 common shares owned by Mr. Draime directly and 4,2773,535 restricted common shares subject to forfeiture (which vested on March 7, 2019)5, 2020).
(6)(9)
Includes 100,49789,299 time-based restricted share units (“RSUs”) and performance-based share units (“Performance Shares”),performance shares, which vest and are payable in common shares on a one-for-one basis on March 4, 2019.6, 2020.
(7)(10)
Includes 4,2773,535 restricted common shares subject to forfeiture (which vested on March 7, 2019)5, 2020).
(8)(11)
Represents 47,500 common shares held in an investment retirement account for the benefit of Mr. Schlather, 61,22465,501 common shares owned by Mr. Schlather directly and 4,2773,535 restricted common shares subject to forfeiture (which vested on March 7, 2019)5, 2020).
(12)
(9)Represents 59,016 common shares held in a trust, of which Mr. Kaplan is trustee, and 3,535 restricted common shares subject to forfeiture (which vested on March 5, 2020).
(13)
Includes 29,69034,344 time-based RSUsshare units and Performance Shares,performance-based performance shares, which vest and are payable in common shares on a one-for-one basis on March 4, 2019.
(10)Represents 54,739 common shares held in a trust, of which Mr. Kaplan is trustee and 4,277 restricted common shares subject to forfeiture (which vested on March 7, 2019).
(11)Includes 4,277 restricted common shares subject to forfeiture (which vested on March 7, 2019).
(12)Includes 4,277 restricted common shares subject to forfeiture (which vested on March 7, 2019).
(13)Includes 4,277 restricted common shares subject to forfeiture (which vested on March 7, 2019).6, 2020.

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PROPOSAL ONE: ELECTION OF DIRECTORS

In accordance with the Company’s Amended and Restated Code of Regulations, the number of directors has been fixed at eight. At the Annual Meeting, shareholders will elect eight directors to hold office until our next Annual Meeting of Shareholders and until their successors are elected and qualified. The Board proposes that the nominees identified below be elected to the Board. Jonathan B. DeGaynor has an employment agreement with the Company which provides that during the term of the agreement he shall be entitled to be nominated for election to the Board. At our Annual Meeting, the common shares represented by proxies, unless otherwise specified, will be voted for the election of the eight nominees hereinafter named.

Directors are elected by a plurality of the votes cast at the Annual Meeting. Broker non-votes and abstaining votes will be counted as “Present” for purposes of determining whether a quorum has been achieved at the Annual Meeting, but will not be counted as “For” or “Withheld” from any nominee. “Plurality” means that the director nominees who receive the greatest number of votes cast are elected, up to the maximum number of directors to be elected at the meeting. The maximum number to be elected is eight. Shares not voted will have no impact on the election of directors. Unless proper voting instructions are to “Withhold” authority for any or all nominees, the proxy given will be voted “For” each of the nominees for director.

Majority Voting Principle. Under our Corporate Governance Guidelines, any nominee for director in an uncontested election who receives a greater number of votes “Withheld” from his or her election than votes “For” his or her election must promptly offer his or her resignation. The Board’s Nominating and Corporate Governance Committee will then consider the resignation and recommend to the Board whether to accept or reject it. The Board will act on the Committee’s recommendation within 90 days after the Annual Meeting, and the Board’s decision will be publicly disclosed on Form 8-K. Any director who offers his or her resignation may not participate in the Board’s discussion or vote.

The director nominees nominated by the Board are identified below. If for any reason any of the nominees is not a candidate when the election occurs (which is not expected), the Board expects that proxies will be voted for the election of a substitute nominee designated by the Board. The following information is furnished with respect to each person nominated for election as a director.

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The Board of Directors recommends that you vote FOR the following nominees.

Nominees to Serve for a One-Year Term Expiring in 2019

2020
Jonathan B. DeGaynor
[GRAPHIC MISSING] 
​​
Mr. DeGaynor, 52,53, is the President and Chief Executive Officer (“CEO”) of the Company and has served in this role since March 2015. Mr. DeGaynor served as the Vice President-Strategic Planning and Innovation of Guardian Industries Corp. (“Guardian”), a manufacturer of industrial glass and other building products for commercial, residential and automotive applications, from October 2014 until March 2015. Prior to that, Mr. DeGaynor served as Vice President-Business Development, Managing Director Asia for SRG Global, Inc., a Guardian company and manufacturer of chrome plated plastic parts for the automotive, commercial truck and consumer goods industries, from August 2008.

​
​
The Company believes that Mr. DeGaynor should serve as a director because he provides services as the Company’s President and Chief Executive Officer and because his extensive career in the automotive industry has spanned all phases of engineering, operations leadership, corporate strategy and business leadership. He brings expertise related to development and production of products and technologies. He provides valuable insight to the Board and strengthens the Board’s collective qualifications, skills and experience.

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Jeffrey P. Draime
[GRAPHIC MISSING] 
​​
Mr. Draime, 52,53, has served as a director since 2005. Since 2005 Mr. Draime has been a self-employed business consultant. Mr. Draime is a partner and the President of AeroMax Aviation Holdings LLC, a charter aircraft corporation.

​
​
Mr. Draime served in various roles with the Company from 1988 through 2001, including operations, sales, quality control, product costing, and marketing. From 1999 to 2011 he was the owner of QSL Columbus/QSL Dayton, a restaurant franchise. From 2017 to present Mr. Draime has served as the Chairman of the Board of Directors of Aeromics, Inc., a clinical stage biotech company. From 2012 through 2015, Mr. Draime has served as a director of Servantage Dixie Sales, Inc., an independent, full service, value added distributor serving consumer products markets. The Company believes Mr. Draime should serve as a director because he provides an historical as well as an internal perspective of our business to the Board and strengthens the Board’s collective qualifications, skills and experience.

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Douglas C. Jacobs[GRAPHIC MISSING] 

​​
Mr. Jacobs, 7980 has served as a director since 2004. Since 2015 he has served as the Chief Financial Officer and Treasurer of Brownstone Services LLC and several other privately held companies owned by the beneficiary of a marital trust. From 2005 to 2014, Mr. Jacobs was the Executive Vice President-Finance and Chief Financial Officer of Brooklyn NY Holdings LLC, a privately held investment advisory company established to manage the assets of a marital trust. Prior to serving in this position, from 1999 until 2005 Mr. Jacobs held various financial positions with the Cleveland Browns. Mr. Jacobs is a former partner of Arthur Andersen LLP.

​
​
Mr. Jacobs served as a director and member of the Audit Committee of the Board of CalAtlantic Group Inc., a national residential home builder, which was formed as a result of the merger of Standard Pacific Corporation and Ryland Homes in October 2015 until JanuaryFebruary 2018. Prior to the merger, Mr. Jacobs has served as a director of Standard Pacific Corporation, a national residential home builder in southern California, since 1998 and served as Chairman of the Audit Committee and a member of the Compensation, Executive and Nominating and Corporate Governance Committees.

​
​
Mr. Jacobs qualifies as an audit committee financial expert due to his extensive background in accounting and finance built through his career in public accounting. In addition to his professional and accounting experience described above, the Company believes that Mr. Jacobs should serve as a director because he provides valuable business experience and judgment to the Board, which strengthens the Board’s collective qualifications, skills and experience.

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Ira C. Kaplan
[GRAPHIC MISSING] 
​​
Mr. Kaplan, 65,66, has served as a director since 2009. Since January 2015 he has served as the Executive Chairman of Benesch, Friedlander, Coplan & Aronoff LLP, a national law firm, and served as the Managing Partner from 2008 until 2014. He is a member of the firm’s Executive Committee and has been a partner with the firm since 1987. Mr. Kaplan focuses his practice on mergers and acquisitions as well as public and private debt and equity financings.

​
​
Mr. Kaplan counsels clients in governance and business matters in his role at the law firm. In addition to his legal and management experience described above, the Company believes that Mr. Kaplan should serve as a director because he brings thoughtful analysis, sound judgment and insight to best practices to the Board, in addition to his professional experiences, which strengthens the Board’s collective qualifications, skills and experience.

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Kim Korth

​
Kim Korth
[GRAPHIC MISSING] ​
Ms. Korth, 64,65, has served as a director since 2006. Since May 2019, Ms. Korth has served as the Managing Director and board member of Engauge Workforce Solutions, and since July 2017, Ms. Korth has served as the President and Chief Executive Officer of 6th Avenue Consulting Group. From January 2018 to December 2019, Ms. Korth was the Chief Executive Officer and board member of bb7. Prior to that, from December 2012 until April 2017, Ms. Korth was the President and Chief Executive Officer of Dickten Masch Plastics, LLC, a thermoplastics and thermoset manufacturer, and as the President, Chief Executive Officer and director of TECHNIPLASTM, a privately held group of plastics-focused manufacturing businesses. Prior to that, she served as President, Chief Executive Officer and as a director of Supreme Corporation, a manufacturer of truck and van bodies, from 2011 to 2012. Ms. Korth is the founder and owner of IRN, Inc., an international automotive consulting firm. She founded the consulting firm in 1983 and is a recognized expert on automotive supplier strategy and issues.

​
​
Ms. Korth is a member of the board of Unique Fabricating, Inc., a niche supplier of acoustic parts for the automotive industry.

​
​
Ms. Korth has several decades of experience in corporate governance issues, organizational design, and development of strategies for growth and improved financial performance for automotive suppliers. In addition to the knowledge and experience described above, the Company believes that Ms. Korth should serve as a director because she provides insight to industry trends and expectations to the Board, which strengthens the Board’s collective qualifications, skills and experience.

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William M. Lasky
[GRAPHIC MISSING] 
​​
Mr. Lasky, 71,72, has served as a director since 2004. Mr. Lasky served as President and Chief Executive Officer of Accuride Corporation (“Accuride”), a manufacturer and supplier of commercial vehicle components, from 2008 until his retirement in 2011. He served as the Chairman of the Board of Accuride from 2009 to 2012. On October 8, 2009 Accuride filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code. On February 26, 2010, after successfully completing its plan of reorganization, Accuride emerged from Chapter 11 bankruptcy. Mr. Lasky served as President and Chief Executive Officer of JLG Industries, Inc., a diversified construction and industrial equipment manufacturer, from 1999 through 2006 and served as Chairman of the Board from 2001 through 2006.

​
​
From 2011 through May 2016, Mr. Lasky also served as a director of Affinia Group, Inc., a designer, manufacturer and distributor of industrial grade replacement parts and services for automotive and heavy-duty vehicles.

​
​
In addition to his professional experience described above, the Company believes that Mr. Lasky should serve as a director because he provides in-depth industry knowledge, business acumen and leadership to the Board, which strengthens the Board’s collective qualifications, skills and experience.

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George S. Mayes, Jr.
[GRAPHIC MISSING] 
​​
Mr. Mayes, 60,61, has served as a director since 2012. Mr. Mayes currently provides independent business consulting services. Previously, Mr. Mayes served as Executive Vice President and Chief Operating Officer of Diebold, Inc., a provider of integrated self-service delivery and security systems and services, from 2013 to 2015. Prior to that, he served as Executive Vice President of Operations from 2008, as Senior Vice President, Supply Chain Management from 2006 to 2008, and as Vice President, Global Manufacturing upon joining Diebold, Inc. in 2005.

​
​
Mr. Mayes has extensive experience in lean manufacturing and Six Sigma processes and has managed manufacturing facilities in Canada, Mexico, France, Hungary, Brazil, China, Poland, Italy and the United States.

​
​
The Company believes that Mr. Mayes should serve as a director because he provides in-depth knowledge of manufacturing theories and operations, business acumen and leadership to the Board, which strengthens the Board’s collective qualifications, skills and experience.

Paul J. Schlather
[GRAPHIC MISSING] 
​​
Mr. Schlather, 66,67, has served as a director since 2009. Mr. Schlather currently provides independent business consulting services. Mr. Schlather was a partner at PricewaterhouseCoopers LLP, serving as co-head to the Private Client Service group from August 2002 until his retirement in 2008. Mr. Schlather also serves on the boards of four closely held businesses.

​
​
Mr. Schlather qualifies as an audit committee financial expert due to his extensive background in accounting and finance built through his career in public accounting. In addition to his professional and accounting experience described above, the Company believes that Mr. Schlather should serve as a director because he provides financial analysis and business acumen to the Board, which strengthens the Board’s collective qualifications, skills and experience.

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PROPOSAL TWO: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP

The Audit Committee of the Board currently anticipates appointing Ernst & Young LLP (“Ernst & Young”) as our independent registered public accounting firm for the year ending December 31, 2019.2020. For 2018,2019, Ernst & Young was engaged by us to audit our annual financial statements, assess our internal control over financial reporting and to perform audit-related and tax services. We expect that representatives of Ernst & Young will be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and are expected to be available to respond to appropriate questions from shareholders.

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent external audit firm retained to audit the Company’s financial statements. As a matter of good corporate governance, the Audit Committee requests that shareholders ratify its anticipated selection of Ernst & Young to serve as our independent registered public accounting firm for 2019.

2020.

Although ratification by shareholders is not legally required, the Board believes that the submission is an opportunity for the shareholders to provide feedback on an important issue of corporate governance. If our shareholders do not approve the appointment of Ernst & Young, the appointment of our independent registered public accounting firm will be re-evaluated by the Audit Committee, but will not require the Audit Committee to appoint a different accounting firm. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different

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independent registered public accounting firm at any time during 20192020 if it determines that such a change would be in the best interests of the Company and our shareholders.

Approval of this proposal requires the affirmative vote of a majority of the common shares present in person or by proxy and entitled to be voted on the proposal at our Annual Meeting. Abstentions will have the same effect as votes against the proposal. Broker non-votes will not be considered common shares present and entitled to vote on the proposal and will not have a positive or negative effect on the outcome of this proposal, however, there should be no broker non-votes on this proposal because brokers should have the discretion to vote uninstructed common shares on this proposal.

The Board of Directors recommends that you vote FOR Proposal Two.

Service Fees Paid to the Independent Registered Public Accounting Firm

For the fiscal years ended December 31, 20182019 and 20172018 we retained Ernst & Young to provide services in the following categories and amounts. The Audit Committee has considered the scope and fee arrangements for all services provided by Ernst & Young, taking into account whether the provision of non-audit-related services is compatible with maintaining Ernst & Young’s independence.

 
​​
2019
​​
2018
Audit Fees
​​
$2,380,600
​​
$2,291,400
Audit Related Fees
​​
5,400
​​
3,000
Tax Fees
​​
331,100
​​
357,000
Total Fees
​​
$2,717,100
​​
$2,651,800
  
  2018 2017
Audit Fees  $2,291,400   $2,339,100 
Audit Related Fees  3,000   75,900 
Tax Fees  357,400   437,800 
Total Fees  $2,651,800   $2,856,400 

Audit Fees.Audit fees include services associated with the annual audit of our consolidated financial statements, the audit of our internal control over financial reporting, the quarterly reviews of the financial statements included in our SEC Form 10-Q filings, international statutory audits and other services that are normally provided by the independent registered accountants in connection with regulatory filings.

Audit-related fees. Audit related fees include services associated with assurance and related services that are reasonably related to the performance of the audit of the Company’s financial statements which included the assistance in financial due diligence related to mergers and acquisitions in 2017.

statements.

Tax Fees.Tax fees relate to tax planning, domestic and international tax compliance and tax advice. The decrease in tax fees in 2018 primarily relates to tax due diligence for mergers and acquisitions incurred in 2017, but not incurred in 2018, offset by higher fees related to the 2018 tax reform.

Pre-Approval Policies and Procedures

The Audit Committee’s policy is to approve in advanceCommittee Charter requires pre-approval of all auditauditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent registered public accounting firm. Pre-approval is generally provided for up to one year, is detailed as to
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the particular service or category of services and is generally subject to a specific budget. The Audit Committee also pre-approves particular services on a case-by-case basis. In accordance with this policy, the Audit Committee has delegated pre-approval authority to the Chairman of the Audit Committee. The Chairman may pre-approve services and inform the Audit Committee at the next scheduled meeting.

All services provided by Ernst & Young during fiscal year 2018,2019, as noted in the previous table, were authorized and approved by the Audit Committee in compliance with the pre-approval policies and proceduresAudit Committee Charter as described above.

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Audit Committee Report

In accordance with its written charter, the Audit Committee assists the Board in fulfilling its responsibility relating to corporate accounting, our reporting practices, andoverseeing (a) the quality and integrity of the financial reportsstatements of the Company, (b) the effectiveness of internal controls over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, (c) the Company’s compliance with legal and other financial information provided by us to any governmental body or toregulatory requirements, (d) the public.Company’s independent registered public accounting firm’s qualifications and independence, and (e) the performance of the Company’s internal audit function and independent registered public accounting firm. Management is responsible for the financial statements and the financial reporting process, including assessing the effectiveness of the Company’s internal control over financial reporting. The independent registered public accounting firm is responsible for conducting audits and reviews of our financial statements in accordance with standards established by the Public Company Accounting Oversight Board, expressing an opinion on the conformity of the Company’s financial statements in accordance with generally accepted accounting principles, and auditing and reporting on the Company’s effectiveness of internal controls over financial reporting. The Audit Committee is comprised of five directors, each of whom is “independent” for audit committee purposes under the listing standards of the NYSE.

In discharging its oversight responsibility as to the audit process, the Audit Committee reviewed and discussed our audited financial statements for the year ended December 31, 2018,2019, with management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements. The Audit Committee also discussed with our independent registered public accounting firm, Ernst & Young, the matters required to be discussed under the Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees.and the Commission. The Audit Committee has received the written disclosures and letter from Ernst & Young required by the applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s communication with the Audit Committee concerning independence. The Audit Committee discussed Ernst & Young’s independence with Ernst & Young. The Audit Committee also considered whether the provision of non-audit services by Ernst & Young is compatible with maintaining Ernst & Young’s independence.

The Audit Committee discussed with our Vice President of Tax & Internal Audit and Internal Audit Director and Ernst & Young the overall scope and plans for their respective audits. The Audit Committee also met with the Internal Audit Director and Ernst & Young, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of the Company’s financial reporting.

Based on the above-referenced review and discussions with management, the Internal Audit Director and Ernst & Young, the Audit Committee recommended to the Board, and the Board approved, that the audited consolidated financial statements for fiscal 20182019 be included in the Company’s Annual Report on Form 10-K filed with the SEC.

The Audit Committee



Douglas C. Jacobs, Chairman
Ira C. Kaplan
William M. Lasky
George S. Mayes, Jr.
Paul J. Schlather

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PROPOSAL THREE: SAY-ON-PAY

As required by Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”) we provide our shareholders with the opportunity to cast an annual advisory non-binding vote to approve the compensation of our Named Executive Officers as disclosed pursuant to the SEC’s compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and the narrative disclosures that accompany the compensation tables)tables (a “Say-On-Pay” proposal)). We believe that it is appropriate to seek the views of shareholders on the design and effectiveness of the Company’s executive compensation program.

At the Company’s 20182019 Annual Meeting of Shareholders, 97.5%98.2% of the votes cast on the Say-On-Pay proposal voted in favor of the proposal. The Compensation Committee believes this affirmed shareholders’ support of the Company’s approach to executive compensation.

Our goal for the executive compensation program is to attract, motivate, and retain a talented, entrepreneurial and creative team of executives to provide operational and strategic leadership for the Company’s success in competitive markets. We seek to accomplish this goal in a way that rewards performance and is aligned with our shareholders’ long-term interests. We believe that our executive compensation program, which emphasizes performance-based compensation and long-term equity awards, satisfies this goal and is strongly aligned with the long-term interests of our shareholders.

Base compensation is aligned to be competitive in the industry in which we operate. Performance-based compensation (cash and equity) represents 44-53%45-53% of each executive officer’s target compensation opportunity, with long-term incentives representing the largest portion of compensation. Targets for incentive compensation are based on financial performance targets and increasing shareholder value. The Compensation Committee retains the services of an independent compensation consultant to advise the Compensation Committee on competitive compensation and compensation practices.

The Board recommends that shareholders vote FOR the following resolution:

“RESOLVED that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

Because the vote is advisory, it will not be binding upon the Board or the Compensation Committee. The Board and the Compensation Committee value the opinions of our shareholders and will take into account the outcome of the vote when considering future decisions regarding executive compensation.

The affirmative vote of a majority of the common shares present or represented by proxy and voting at the Annual Meeting will constitute approval of this non-binding resolution. If you own common shares through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your common shares so that your vote can be counted on this proposal. Abstentions will have the same effect as votes against the proposal. Broker non-votes will not be considered common shares present and entitled to vote on this proposal and will not have a positive or negative effect on the outcome of this proposal.

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CORPORATE GOVERNANCE

Corporate Governance Documents and Committee Charters

The Company’s Corporate Governance Guidelines, Code of Business Conduct, and Ethics, Code of Ethics for Senior Financial Officers and the charters of the Board of Directors’ Audit, Compensation, and Nominating and Corporate Governance and Compliance and Ethics committees are posted on our website atwww.stoneridge.com.
Written copies of these documents are available without charge to any shareholder upon request. Requests should be directed to Investor Relations at the address listed on the Notice of Annual Meeting of Shareholders.

Corporate Ethics Hotline

We established a corporate ethics hotline as part of our Whistleblower Policy and Procedures to allow persons to lodge complaints about accounting, auditing and internal control matters, and to allow an employee to lodge a concern, confidentially and anonymously, about any accounting and auditing matter. Information about lodging such complaints or making such concerns known is contained in our Whistleblower Policy and Procedures, which is posted on our website atwww.stoneridge.com.

Director Independence

The NYSE rules require listed companies to have a Board of Directors comprised of at least a majority of independent directors. Under the NYSE rules, a director qualifies as “independent” upon the affirmative determination by the Board of Directors that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). The Board has not adopted categorical standards of independence. The Board has determined that the following directors and nominees for election as a director are independent:

Jeffrey P. Draime
​​
Kim Korth
​​
George S. Mayes, Jr.
Douglas C. Jacobs
​​
William M. Lasky
​​
Paul J. Schlather
Ira C. Kaplan
​​
​​

Annual Board and Committee Self Evaluations

Our Corporate Governance guideline requires that the Board and each committee conduct an annual self-evaluation. The self-evaluations are intended to facilitate a candid assessment and discussion by the Board and each committee of its effectiveness as a group in fulfilling its responsibilities. Each year the Board and each committee conducts a self-evaluation/assessment using questionnaires to facilitate the evaluation. The Board and each Committee then reviews a summary of the questionnaires in connection with discussions to determine which areas the Board and Committee would like to focus on during the coming year to enhance its effectiveness.

The Board of Directors’ Role in Risk Oversight

It is management’s responsibility to manage risk and bring to the Board’s attention the most material risks to the Company. The Board has oversight responsibility of the processes established to report and monitor systems for material risks applicable to us. The Audit Committee regularly reviews enterprise-wide risk management, which includes treasury risks (foreign exchange rates, and credit and debt exposures), financial and accounting risks, legal and compliance risks, and other risk management functions.inherent risks to the Company. The Compensation Committee considers risks related to the attraction and retention of talent and related to the design of compensation programs and arrangements. The full Board considers strategic risks and opportunities and regularly receives reports from management on risk and from the committees regarding risk oversight in their areas of responsibility.

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The Board of Directors’ Role in Ethics and Compliance

The Company is committed to a culture of integrity and trust, to conducting all of its business dealings in compliance with applicable federal, state and foreign laws, rules and regulations and to operating with the highest standards of business ethics. To facilitate this, inIn 2017 the Board established the Compliance and Ethics
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Committee to assist the Board in overseeing (i) the Company’s activities in the areas of corporate responsibility, compliance and ethics, including oversight of the Company’s Code of Business Conduct and Stoneridge Integrity Program Charter, and (ii) the Company’s compliance with legal and regulatory requirements. Members of the Compliance and Ethics Committee are Ira C. Kaplan, Kim Korth, George S. Mayes, Jr. (chair) and Paul Schlather.

Anti-Hedging Policy

Our Insider Trading Policy prohibits Company directors, officers and key employees covered by the pre-clearance procedures of the Insider Trading Policy from engaging in hedging transactions designed to offset decreases in the market value of the Company’s securities, including transactions in prepaid variable forward contracts, equity swaps, collars, exchange funds, put options, call options or other derivative securities, on an exchange or in any other organized market, prepaid variable forwards, equity swaps, collars and exchange funds.

market.

Anti-Pledging Policy

Our Insider Trading Policy prohibits directors, officers and key employees covered by the pre-clearance provisions of the Insider Trading Policy from holding Company securities in a margin account or pledging Company securities as collateral for a loan.

The Board of Directors

In 20182019 the Board held six meetings.nine meetings and took action by unanimous written consent on two occasions. Each Board member attended at least 75% of the meetings of the Board and of the committees on which he or she serves. Our policy is that directors are required to attend the Annual Meeting of Shareholders. All of our directors attended the 20182019 Annual Meeting of Shareholders. Mr. Lasky has been appointed as the lead independent director by the independent directors to preside at the executive sessions of the independent directors. The Board’s independent directors meet regularly in executive session. All directors, except Mr. DeGaynor, the Company’s President and CEO, are independent.

Leadership of the Board

The Board does not have a formal policy regarding the separation of the roles of CEO and Chairman of the Board as the Board believes it is in the best interest of the Company and our shareholders to make that determination based on the position and direction of the Company and the membership of the Board. At this time, the Board has determined that having an independent director serve as Chairman is in the best interest of the Company and our shareholders. This structure ensures a greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing Board priorities and procedures. Further, this structure permits our President and CEO to devote more time focusing on the strategic direction and management of our day-to-day operations.
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Committees of the Board

The Board has four standing committees to facilitate and assist the Board in the execution of its responsibilities. These committees are the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Compliance and Ethics Committee. Each member of the Audit, Compensation, Nominating and Corporate Governance and Compliance and Ethics

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Committees is independent as defined under the listing standards of the NYSE. The table below shows the composition of the Board’s committees:

Audit
Committee
​​
Compensation
Committee
​​
Nominating
and Corporate
Governance Committee
​​
Compliance and
Ethics Committee
                  Audit Committee  Compensation 
Committee 		Nominating and 
Corporate Governance 
Committee 		Compliance and Ethics 
Committee 
Douglas C. Jacobs*
​​
Jeffrey P. Draime
​​
Jeffrey P. Draime
​​
Ira C. Kaplan
Ira C. Kaplan
​​
Douglas C. Jacobs
​​
Ira C. Kaplan
​​
Kim Korth
William M. Lasky
​​
Kim Korth*
​​
Kim Korth
​​
George S. Mayes, Jr.*
George S. Mayes, Jr.
​​
William M. Lasky
​​
William M. Lasky*
​​
Paul J. Schlather
Paul J. Schlather
​​
​​
​​

*
Committee Chairperson

Audit Committee

This committee held eight meetings in 2018.2019. Information regarding the functions performed by the Audit Committee is set forth in the “Audit Committee Report,” included in this Proxy Statement. The Board has determined that each Audit Committee member is financially literate under the listing standards of the NYSE. The Board also determined that Mr. Jacobs and Mr. Schlather each qualify as an “audit committee financial expert” as defined by the SEC rules adopted pursuant to the Sarbanes-Oxley Act of 2002. In addition, under the Sarbanes-Oxley Act of 2002 and the NYSE rules mandated by the SEC, members of the audit committee must have no affiliation with the issuer, other than their Board seat, and receive no compensation in any capacity other than as a director or committee member. Each member of the Audit Committee meets this additional independence standard applicable to audit committee members of NYSE listed companies.

Compensation Committee

This committee held four meetings in 2018.2019. Each member of our Compensation Committee meets the independence requirements of the NYSE, including the enhanced independence requirements applicable to Compensation Committee members under NYSE rules and is a non-employee director under Rule 16b-3 of the Exchange Act. The Compensation Committee is responsible for establishing and reviewing our compensation philosophy and programs with respect to our executive officers; approving executive officer compensation and benefits; recommending to the Board the approval, amendment and termination of incentive compensation and equity-based plans; and certain other compensation matters, including director compensation. Our CEO makes recommendations regarding compensation of other officers to the Compensation Committee. The Compensation Committee can exercise its discretion in modifying any amount presented by our CEO. The Compensation Committee regularly reviews the total compensation obligations to each of our executive officers. During 2018,2019, the Compensation Committee retained Total Rewards Strategies LLC to provide compensation related consulting services. Specifically, the compensation consultant provided relevant market data, current trends in executive and director compensation and advice on program design. In accordance with its charter, the Compensation Committee may delegate power and authority as it deems appropriate for any purpose to a subcommittee of not fewer than two members.

Nominating and Corporate Governance Committee

This committee held two meetings in 2018.2019. The purpose of the Nominating and Corporate Governance Committee is to evaluate the qualifications of director nominees, to recommend candidates for election as directors, to make recommendations concerning the size and composition of the Board, to develop and implement our corporate governance policies and to assess the effectiveness of the Board.
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Compliance and Ethics Committee

This committee established December 2017, held threefive meetings in 2018.2019. The purposes of the Compliance and Ethics Committee are to assist the Board in overseeing (a) the Company’s activities in the areas of corporate responsibility, compliance and ethics, including oversight of the Stoneridge Integrity Program,

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(b) in collaboration with the Audit Committee the Company’s compliance with legal and regulatory requirements, and (c) to oversee the Company’s commitment to establishing a culture of integrity and trust, to conducting all of its business dealings in compliance with applicable federal, state and foreign laws, rules and regulations and to operating with the highest standards of business ethics.

Nominations and Nomination Process

It is the policy of the Nominating and Corporate Governance Committee to consider individuals recommended by shareholders for membership on the Board. If a shareholder desires to recommend an individual for membership on the Board, then that shareholder must provide a written notice (the “Recommendation Notice”) to the Secretary of the Company at Stoneridge, Inc., 39675 MacKenzie Drive, Suite 400, Novi, Michigan 48377, on or before January 15 for consideration by this committee for that year’s election of directors at the Annual Meeting of Shareholders.

In order for a recommendation to be considered by the Nominating and Corporate Governance Committee, the Recommendation Notice must contain, at a minimum, the following:

•  the name and address, as they appear on the Company’s books, and telephone number of the shareholder making the recommendation, including information on the number of common shares owned and date(s) acquired, and if such person is not a shareholder of record or if such common shares are owned by an entity, reasonable evidence of such person’s ownership of such shares or such person’s authority to act on behalf of such entity;
•  the full legal name, address and telephone number of the individual being recommended, together with a reasonably detailed description of the background, experience, and qualifications of that individual;
•  a written acknowledgment by the individual being recommended that he or she has consented to the recommendation and consents to the Company undertaking an investigation into that individual’s background, experience, and qualifications in the event that the Nominating and Corporate Governance Committee desires to do so;
•  any information not already provided about the person’s background, experience and qualifications necessary for us to prepare the disclosure required to be included in our proxy statement about the individual being recommended;
•  the disclosure of any relationship of the individual being recommended with us or any of our subsidiaries or affiliates, whether direct or indirect; and
•  the disclosure of any relationship of the individual being recommended with the shareholder, whether direct or indirect, and, if known to the shareholder, any material interest of such shareholder or individual being recommended in any proposals or other business to be presented at our Annual Meeting of Shareholders (or a statement to the effect that no material interest is known to such shareholder).

the name and address, as they appear on the Company’s books, and telephone number of the shareholder making the recommendation, including information on the number of common shares owned and date(s) acquired, and if such person is not a shareholder of record or if such common shares are owned by an entity, reasonable evidence of such person’s ownership of such shares or such person’s authority to act on behalf of such entity;
the full legal name, address and telephone number of the individual being recommended, together with a reasonably detailed description of the background, experience, and qualifications of that individual;
a written acknowledgment by the individual being recommended that he or she has consented to the recommendation and consents to the Company undertaking an investigation into that individual’s background, experience, and qualifications in the event that the Nominating and Corporate Governance Committee desires to do so;
any information not already provided about the person’s background, experience and qualifications necessary for us to prepare the disclosure required to be included in our proxy statement about the individual being recommended;
the disclosure of any relationship of the individual being recommended with us or any of our subsidiaries or affiliates, whether direct or indirect; and
the disclosure of any relationship of the individual being recommended with the shareholder, whether direct or indirect, and, if known to the shareholder, any material interest of such shareholder or individual being recommended in any proposals or other business to be presented at our Annual Meeting of Shareholders (or a statement to the effect that no material interest is known to such shareholder).
The Nominating and Corporate Governance Committee determines, and periodically reviews with the Board, the desired skills and characteristics for directors as well as the composition of the Board as a whole. This assessment considers the directors’ qualifications and independence, as well as diversity, age, skill, and experience in the context of the needs of the Board. Directors should share our values and should possess the following characteristics: high personal and professional integrity; the ability to exercise sound business judgment; an inquiring mind; and the time available to devote to Board activities and the willingness to do so. The Nominating and Corporate Governance Committee does not have a formal policy specifically focusing on the consideration of diversity; however, diversity is one of the factors that the Nominating and Corporate Governance Committee considers when identifying candidates and making its recommendations to the Board. In addition to the foregoing considerations, generally with

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respect to nominees recommended by shareholders, the Nominating and Corporate Governance

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Committee will evaluate such recommended nominees considering the additional information regarding them contained in the Recommendation Notices. When seeking candidates for the Board, the Nominating and Corporate Governance Committee may solicit suggestions from incumbent directors, management and third-party search firms. Ultimately, the Nominating and Corporate Governance Committee will recommend to the Board prospective nominees who the Nominating and Corporate Governance Committee believes will be effective, in conjunction with the other members of the Board, in collectively serving the long-term best interests of our shareholders.

The Nominating and Corporate Governance Committee recommended to the Board each of the nominees identified in “Election of Directors” beginning on page 5 of this Proxy Statement.

Compensation Committee Interlocks and Insider Participation

None of the members of the Board’s Compensation Committee served as an officer at any time or as an employee during 2018.2019. In addition, no Compensation Committee interlocks existed during 2018.

2019.

Communications with the Board of Directors

The Board believes that it is important for interested parties to have the ability to send communications to the Board. Persons wishing to communicate with the Board may do so by sending a letter to the Secretary of the Company at Stoneridge, Inc., 39675 MacKenzie Drive, Suite 400, Novi, Michigan 48377. The envelope must contain a clear notation indicating that the enclosed letter is a “Board Communication” or “Director Communication.” All such letters must identify the author and clearly state whether the intended recipients are all members of the Board or certain specified individual directors (such as the lead independent director or non-management directors as a group). The Secretary will make copies of all such letters and circulate them to the appropriate director or directors. The directors are not spokespeople for the Company and responses or replies to any communication should not be expected.

Transactions with Related Persons

There were no reportable transactions involving related persons in 2018.

2019.

Review and Approval of Transactions with Related Persons

The Board has adopted a written statement of policy with respect to related party transactions. Under the policy, a related party transaction is a transaction required to be disclosed pursuant to Item 404 of Regulation S-K or any other similar transaction involving the Company or the Company’s subsidiaries and any Company employee, officer, director, 5% shareholder or an immediate family member of any of the foregoing if the dollar amount of the transaction or series of transactions exceeds $25,000. A related party transaction will not be prohibited merely because it is required to be disclosed or because it involves related parties. Pursuant to the policy, such transactions are presented to the Nominating and Corporate Governance Committee for evaluation and approval by the committee, or if the committee elects, by the full Board. If the transaction is determined to involve a related party, the Nominating and Corporate Governance Committee will either approve or disapprove the proposed transaction. Under the policy, in order to be approved, the proposed transaction must be on terms that are fair to the Company and are comparable to market rates, where applicable.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

In this section we describe the compensation program for our Named Executive Officers (“NEOs”). We also discuss our compensation philosophy, policies and the decisions made by the Compensation Committee (the “Committee”) of the Board in 20182019 as it relates to the compensation of our NEOs.

Named Executive Officers for 2018

2019
Name
​​
Title
NameTitle
Jonathan B. DeGaynor
​​
President and& Chief Executive Officer
Robert R. Krakowiak
​​EVP,
Executive Vice President, Chief Financial Officer & Treasurer
Thomas M. Dono, Jr.
​​
Chief Legal Officer and& Secretary
Thomas A. Beaver
Laurent P. Borne
​​Vice
President and President of Global Sales
Electronics & Chief Technology Officer
Robert R. Willig, Jr.
​​
President Control Devices
Anthony L. Moore(1)
​​
Vice President Operations
(1)
Mr. Moore served as Vice President Operations until August 9, 2019 when he left the company.
2019 Overview

2018 Overview

We delivered strong financial performance in 20182019 as wedespite lower sales, the Company experienced higher salesoperating income and generated higher net income.income compared to prior year. The Company believes that focusing our portfolio on smart products, or products which contain embedded electronics or logic, will address industry megatrends and have a positive impact on both our top-line growth and underlying margins.

The actions of the Compensation Committee (the “Committee”) and our pay-for-performance philosophy functioned such that compensation earned by our executives was aligned with our financial performance for 2018.2019. Highlights from the year and our performance are as follows:

•  Our business units have continued to focus on profitable and sustainable top line growth by developing a clear current and future vision of our products, technologies and targeted customers.
•  Net sales increased by 5.1% due to higher sales to higher sales in our Electronics segment, offset by lower sales in our Control Devices and PST segments. Our Electronics segment net sales increased primarily due to an increase in European and North American commercial vehicle and off-highway product sales. Our Control Devices segment net sales decreased primarily as a result of decreased sales volume in the North American automotive market as a result of certain program volume reductions, partially offset by increased sales volume in our commercial vehicle and China automotive markets. Our PST segment net sales decreased primarily due to unfavorable foreign currency translation as well as lower volumes for our audio products and our Argentina aftermarket channel.
•  Net income increased by $8.8 million compared to the prior year, which was primarily due to higher sales in our Electronics segment offset by lower sales in our Control Devices and PST segments, and gross margin expansion and improved operational efficiency in our Electronics and PST segments, offset by slightly lower gross margin in our Control Devices segment. The Company also experienced favorable SG&A in 2018 compared to prior year due to a reduction of expense for fair value earn-out consideration related to our Orlaco and PST acquisitions.

Our business units have continued to focus on profitable and sustainable top line growth by developing a clear current and future vision of our products, technologies and targeted customers.

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Net sales decreased by 3.7% due to lower sales in each of our segments. Our Control Devices segment net sales decreased primarily as a result of decreased sales volume in the North American automotive market, partially offset by sales volume increases in our China automotive and European automotive as well as the one-time sale of product lines and assets related to certain non-core switches and connectors (“Non-core Products”). Our Electronics segment net sales decreased primarily due to a decrease in sales volume in our European commercial vehicle market and unfavorable foreign currency translation offset by an increase in sales volume in our North American and China commercial vehicle markets and increased sales in our off-highway vehicle products. Our Stoneridge Brazil segment (previously referred to as “PST”) net sales decreased due to lower volumes for our Argentina aftermarket channel, audio and alarm products, tracking devices and monitoring service revenues offset by higher volumes for our OEM and factory authorized dealer installer products.
Net income attributable to Stoneridge, Inc. in 2019 increased by $6.4 million compared to prior year, which was primarily due to the gain on disposal of Control Devices’ from the Non-core Products of $33.6 million and the recovery of Brazilian indirect taxes of $6.5 million which were offset by decreased sales and gross margin and an increase in restructuring costs of $9.6 million mostly related to our previously announced closure of our Canton facility.
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As a result:

Performance on our consolidated operating income, excluding the impact of two external events - the General Motors (“GM”) strike and tariffs on Chinese produced components (“China tariffs”), and free cash flow fell below the budgeted targets for our Annual Incentive Plan (AIP) and resulting in an overall weighted achievement of 35.4% of target for the consolidated portion of the AIP.
Our Control Devices segment achieved below budgeted targets for the divisional financial metrics and earned 30.3% of target for the AIP.
Our Electronics segment achieved below budgeted targets for the divisional financial metrics and earned 10.1% of target for the AIP.
Our PST segment exceeded the budgeted targets for the divisional financial metrics and earned 91.4% of target for the AIP.
••  Performance on our consolidated operating income, free cash flow and return on invested capital fell below the budgeted targets for our Annual Incentive Plan (AIP), resulting in an overall weighted achievement of 75.2% of target for the consolidated portion of the AIP.
•  Our Control Devices segment achieved below budgeted targets for the divisional financial metrics and earned 53.1% of target for the AIP.
•  Our Electronics segment met some of its targets for the divisional financial metrics and earned 102.2% of target for the AIP.
•  Our PST segment achieved below budgeted targets for the divisional financial metrics and earned 58.6% of target for the AIP.
•  
Under our long-term incentive plan, our earnings per share (“EPS”) for 2018the 2017-2019 performance period exceeded the 2018 EPS performance target. This, combined withthree-year cumulative target for the annual EPS performance from 2016 and 2017 resultedgrant, resulting in total EPS share awards at 130% of 134% of target being earned for the 2016-2018 performance period. Additionally, for the three yeartarget. Our total shareholder return (“TSR”) for the same performance component, our shareholder returnperiod was at the 7087th percentile of companies in our peer group, resulting in TSR awards beingshares earned at 140%174% of target for the 2016-2018 performance period.TSR metric.

Compensation Philosophy and Objectives

Our Company’s compensation programs for executive officers are designed to attract, retain, motivate, and reward talented executives who advance our strategic, operational and financial objectives and thereby enhance shareholder value. The primary objectives of our compensation programs for executive officers are to:

•  Attract and retain talented executive officers by providing a total compensation package that is competitive with that offered by similarly situated companies.
•  Create a compensation structure under which a substantial portion of total compensation is based on achievement of performance goals.
•  Align total compensation with the objectives and strategies of our shareholders and business.

Attract and retain talented executive officers by providing a total compensation package that is competitive with that offered by similarly situated companies.
Create a compensation structure under which a substantial portion of total compensation is based on achievement of performance goals.
Align total compensation with the objectives and strategies of our shareholders and business.
A substantial portion of our executive officers’ annual and long-term compensation is tied to quantifiable measures of the Company’s financial performance, and therefore will not be earned unless at least the minimum threshold performance is achieved.

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Elements of Compensation

Following are the elements of our executive compensation program and the objectives for including them.

Element
​​
Type
​​
Objective
ElementTypeObjective
Base Salary

​​
Cash –- fixed


​​
Attract and retain highly skilled executives by providing market competitive base salary that is aligned with the executive’sexecutive's responsibilities, experience & performance.

Annual Incentive Plan

​​
Cash –- variable


​​
Motivate and reward the achievement of individual, division and/or corporate financial and operational strategic objectives.

Long-Term Incentive Plan

​​
Equity and/or Cash –- variable

​​
Retain and reward key employees, and align the interests of employees with our shareholders and the long-term success of the Company.

Benefits & Perquisites

​​
Non-cash

​​
Retain key employees by providing market competitive health, welfare & retirement benefits, and limited perquisites that align with our compensation philosophy.

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Mix of Compensation

Our executive compensation is based on our pay-for-performance philosophy, which emphasizes executive performance measures that closely correlate with the achievement of both short-term performance objectives and long-term shareholder value. A significant portion of our executive officers’ annual and long-term performance-based compensation is at-risk, with the amount of risk increasing with the officer’s position level. This provides more upside potential as well as downside risk for more senior positions because they have greater influence on our overall performance.

There is no pre-established policy or target for the allocation between cash and non-cash or short-term and long-term incentive compensation. Rather, the Committee reviews competitive market compensation information provided by our compensation consultant and considers the Company’s historical compensation practices in determining the appropriate level and mix of incentive compensation for each executive position.

Total Target Compensation

Total target compensation is the value of the compensation package that is intended to be delivered if performance goals are met. Actual compensation depends on the annual and long-term incentive compensation payout levels based upon the applicable performance achievement and, for a significant percentage of long-term awards, the price of our common shares and total shareholder return to shareholders(“TSR”) measured against peer group TSR. The following charts show the weighting of each element of total target compensation for the CEO, and average for the other NEOs.

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These charts demonstrate This demonstrates our pay-for-performance philosophy, showing that annual and long-term incentive-based compensation comprises the majority of total target compensation.

[GRAPHIC MISSING] 



Compensation Policies & Best Practices

To achieve the goals of aligning executive compensation with Company performance while maintaining strong corporate governance and minimizing risk, the Committee and the Company review and adopt policies and best practices that they believe are in the best interest of the Company and our shareholders. Following are some of the practices that have been adopted over time that we believe help us to achieve these goals.
Significant emphasis on performance-based compensation
Use of an independent compensation consultant whose firm does no other work for the Company
Annual benchmarking of compensation mix and levels for executive officers to ensure competitiveness
Use of the TSR metric in the long-term incentive plan to align executive and shareholder interests
Include caps on both the annual incentive plan and the long-term incentive plan
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•  Significant emphasis on performance-based compensation
•  Use of an independent compensation consultant whose firm does no other work for the Company
•  Annual benchmarking of compensation mix and levels for executive officers to ensure competitiveness
•  Use of the Total Shareholder Return metric in the long-term incentive plan to align executive and shareholder interests
•  Include caps on both the annual incentive plan and the long-term incentive plan
•  Provide limited perquisites to executive officers
•  Maintain stock ownership guidelines for our executive officers and non-employee Directors
•  Established anti-hedging and anti-pledging policies
•  Recoupment of compensation (“clawback”) policy
•  Conduct an annual compensation risk assessment

Provide limited perquisites to executive officers
Maintain stock ownership guidelines for our executive officers and non-employee Directors
Established anti-hedging and anti-pledging policies
Recoupment of compensation (“clawback”) policy
Conduct an annual compensation risk assessment
The Compensation Committee

The Committee has the responsibility for determining the compensation paid to the Company’s executive officers. In carrying out its responsibilities, among other things, the Committee does the following:

•  Ensures there is a clear, reasonable and logical linkage between executive officer compensation programs and overall Company performance
•  Considers comparison to the Company’s established Comparator Group and the broader market to ensure appropriate mix and level of competitiveness of compensation

Ensures there is a clear, reasonable and logical linkage between executive officer compensation programs and overall Company performance

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Considers comparison to the Company’s established Comparator Group and the broader market to ensure appropriate mix and level of competitiveness of compensation

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Reviews and approves annual base salary levels, annual incentive plan targets, and long-term incentive plan targets, in alignment with the level and performance of each NEO as well as Company performance and market conditions
•  Reviews and approves annual base salary levels, annual incentive plan targets, and long-term incentive plan targets, in alignment with the level and performance of each NEO as well as Company performance and market conditions
•  Reviews, advises on and approves new or revised compensation plans

Reviews, advises on and approves new or revised compensation plans

Independent Compensation Consultant

The Committee retains the services of an independent compensation consultant to assist the Committee with the following:

•  Appraising of relevant trends and compensation developments in the market
•  Providing advice regarding issues such as long-term incentives and change in control arrangements and other topics as needed
•  Providing Comparator Group analysis
•  Providing market data for the CEO position and other executive officers

Appraising of relevant trends and compensation developments in the market
Providing advice regarding issues such as long-term incentives and change in control arrangements and other topics as needed
Providing Comparator Group analysis
Providing market data for the CEO position and other executive officers
In 2018,2019, the Committee’s compensation consultant was Total Rewards Strategies, LLC (“TRS”).

Management

The Committee considers the recommendations and evaluations of the CEO when setting the compensation of the other executive officers.
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Comparator Group

The Comparator Group is comprised of some of our direct competitors and a broader group of companies in the electronic and motor vehicle parts manufacturing industries that the Committee believes is representative of the labor market from which we recruit executive talent. Factors used to selectThe Committee reviews and approves the Comparator Group annually. In March 2019, the Committee’s review of the Comparator Group resulted in ten new companies being added and ten companies being removed. Factors considered by the Committee in selecting Comparator Group companies include, but are not limited to, industry segment, revenue, profitability, number of employees and market capitalization. The Committee reviews and approves the Comparator Group annually. The companies in the resulting Comparator Group in 20182019 were:

​
Allison Transmission
​​
Donaldson
​​
Methode Electronics
​
Actuant​EnPro IndustriesMethode Electronics
Altra Industrial Motion
​ESCO Technologies​
Dorman Products
​​
Modine Manufacturing Company
​
AVX​
CalAmp
​​
Franklin Electric
​OSI Systems​
Rogers
​
Barnes Group​
CIRCOR
Gentex​​Rogers
Gentex
​​
Shiloh Industries
​
Chart Industries​GenthermShiloh Industries
CIRCORGracoSpartan Motors
Columbus McKinnon
​KEMET​
Gentherm
​​
Standard Motor Products
​
​
Commercial Vehicle Group
​Littelfuse​
LCI Industries
Superior Industries​​
Strattec Security
​
CTS​
Cooper-Standard Holdings
Lydall​​Tower International
Littelfuse
​​
Superior Industries
​
Dorman Products​
CTS
Meritor​​
Lydall
​​
Tower International
​
​
Curtiss-Wright
​​
Martinrea International
​​
Visteon
​
​
Delphi Technologies
​​
Meritor
​​
Wabash National
​

Compensation Benchmarking

TRS provides the Committee with the 50th and 75th percentiles of the Comparator Group for base salary, cash bonus, long-term incentives and total overall compensation. The Committee uses as a primary reference point the 50th percentile when determining base salary, annual incentive and long-term incentive targets; each element of pay is adjusted to reflect competitive market conditions. The goal of the executive compensation program is to target overall compensation at the 50th percentile of pay practices of the Comparator Group of companies. Actual target pay for an individual may be more or less

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than the referenced percentiles based on the Committee’s evaluation of the individual’s performance and potential. Consistent with the Committee’s philosophy of pay-for-performance, incentive payments can exceed target levels only if overall Company financial targets are exceeded and will fall below target levels if overall financial goals are not achieved.

In 2019, the Committee approved an increase to Mr. DeGaynor’s total compensation to more closely align with the competitive market rate. The increase reflected CEO pay levels of our Comparator Group as well as Mr. DeGaynor’s performance, tenure and experience.
Consideration of Shareholder Advisory Vote on Executive Compensation

At our 20182019 Annual Meeting of Shareholders, our shareholders approved our compensation advisory resolution with 97.5%98.2% of the votes cast on the say-on-pay proposal voted for the proposal on the 20172018 executive compensation described in our 20182019 Proxy Statement. The Committee believes the shareholders vote affirms the Company’s approach to executive compensation.

Base Salary

Base salary is the foundation of our compensation program for our executive officers. The annual cash incentive compensation awards and long-term incentive awards are typically based on a percentage of base compensation. The base salary is set at competitive market levels to attract and retain our executive officers. Base salary levels for our executive officers are set on the basis of the executive’s responsibilities, the current general industry, and competitive market data, as discussed above. In each case, due consideration is given to individual factors, such as the officer’s experience, competencies, performance and contributions, and to external factors, such as salaries paid to similarly situated executive officers by like-sized companies and in particular our comparator group.Comparator Group. The Committee
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considers the evaluation and recommendation of the CEO in determining the base salary of the other executive officers. The Committee generally approves all executive officer base salaries at its December meeting, which become effective January 1 of the following year.

Executive officers’ base salaries remain fixed throughout the year unless a promotion, change in responsibilities, or special circumstances occur. In 2018, in recognition of his performance, Mr. Krakowiak was awarded a 5% base salary increase on October 1, 2018.

Annual Incentive Awards

Our executive officers participate in our Annual Incentive Plan (“AIP”) which provides for annual cash payments based on the achievement of specific financial goals. As described above, the Company believes that a substantial portion of each executive’s overall compensation should be directly tied to quantifiable measures of financial performance. At the March 20182019 Compensation Committee meeting, the Committee approved the Company’s 20182019 AIP targets and performance metrics. The AIP targets are expressed as a percentage of the executive officer’s base salary.

For 2018,2019, the structure of our AIP included both consolidated financial performance metrics and, where appropriate, divisional metrics to incentivize specific performance. In addition, there is an individual performance metric for executive officers (excluding Mr. DeGaynor) and other leaders in the Company as a way to incentivize and reward specific strategic and measurable activities that are particular to each leader’s area of responsibility. The individual metrics are considered critical to the achievement of the overall financial and operational metrics. The individual performance metric functions as a multiplier to the Overalloverall Weighted Achievement, and can range from 90% to 110%.

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The AIP metrics, weighting, metric performance targets, and achievement for 2018 are summarized as follows:

   
Mr. DeGaynor, Mr. Krakowiak, Mr. Dono, Mr. Beaver  Weight   Metric Target   Achievement 
Consolidated Metrics:
               
Operating profit  60%   $79.9 million   72% 
Free cash flow  20%   $63.0 million   68% 
Return on invested capital  20%   13.2%   91% 
Overall Weighted Achievement            75.2% 

   
Mr. Willig  Weight   Metric Target   Achievement 
Consolidated Metrics:
               
Operating profit  40%   $79.9 million   72% 
Free cash flow  20%   $63.0 million   68% 
Return on invested capital  20%   13.2%   91% 
Divisional Metrics:
               
Operating income  10%   $77.7 million   57% 
Free cash flow  5%   $50.0 million   0% 
Return on invested capital  5%   32.3%   57% 
Overall Weighted Achievement            69.3% 

The consolidated and divisional financial performance metric targets were established based on our 20182019 business plan andplan. The targets were intended to be challenging but achievable based on industry conditions known at the time they were established. Under the 20182019 AIP, the minimumthreshold level for achievement foron the consolidated and divisional financial metrics was based on 80% of target while the maximum level was based on 130% of target.

The following table provides the 2018 AIP targets and achievement as a percent of base salary and as a dollar amount for our NEOs.

    
Executive Officer  Percent of
Base Salary
Target		   Percent of
Target Bonus
Achieved		   Target
Bonus		   Achieved
Bonus		 
Jonathan B. DeGaynor        100%         75.2%   $750,000   $564,000 
Robert R. Krakowiak  70%   75.2%   303,660   228,352 
Thomas M. Dono, Jr.  55%   75.2%   200,750   150,964 
Thomas A. Beaver  55%   75.2%   184,968   139,096 
Robert R. Willig, Jr.  40%   69.3%   130,000   90,090 

For each performance metric, specific levels of achievement for minimum,threshold, target, and maximum were set as described above.established. At target, 100% payout is achieved for each element of the plan; at maximum, 200% payout is achieved; and at minimum,threshold, 50% payout is achieved. Below the minimum,threshold, no incentive is earned under the plan. Minimumon that metric. Threshold achievement underon the Operating Income metric is required for the other metrics to payoutpay out above their minimumthreshold levels. The AIP incentive compensation payout earned between the minimumthreshold and maximum levels is prorated.

The stated objectives of the AIP include retaining key employees and rewarding them for performance aligned with the growth and profitability of Stoneridge. In 2019, there were two external events that impacted Consolidated Operating Income – the General Motors (“GM”) strike and tariffs on Chinese produced components (“China tariffs”). Mr. DeGaynor requested that the Committee consider adjustments to Consolidated Operating Income to exclude the impact of these external events, for the employees other than himself who participate in AIP. The rationale was that these events were outside of management’s control, and the intent was to drive continued motivation and retention of key team members.
The Committee considered the request and used its discretion to approve the adjustments to the 2019 Consolidated Operating Income results to exclude the impact of the GM strike and China tariffs, which were external factors beyond management’s control. Mr. DeGaynor did not receive a payment under the 2019 AIP as the Company’s unadjusted results did not achieve the threshold Consolidated Operating Income.
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The AIP metrics, weighting, metric performance targets, and achievement for 2019 are summarized as follows:
Mr. Krakowiak, Mr. Dono:
​​
Weight
​​
Metric Target
​​
Achievement
(1),(2)
Consolidated Metrics:
​​
 
​​
 
​​
 
Operating Income
​​
70%
​​
$67.7 million
​​
51%
Free Cash Flow
​​
30%
​​
$51.0 million
​​
0%
Overall Weighted Achievement
​​
 
​​
 
​​
35.4%
 
​​
 
​​
 
​​
 
Mr. Borne:
​​
Weight
​​
Metric Target
​​
Achievement
(1),(2)
Consolidated Metrics:
​​
 
​​
 
​​
 
Operating Income
​​
45%
​​
$67.7 million
​​
51%
Free Cash Flow
​​
30%
​​
$51.0 million
​​
0%
Divisional Metrics:
​​
 
​​
 
​​
 
Operating Income
​​
15%
​​
$41.1 million
​​
0%
Free Cash Flow
​​
10%
​​
$8.9 million
​​
0%
Overall Weighted Achievement
​​
 
​​
 
​​
22.7%
 
​​
 
​​
 
​​
 
Mr. Willig:
​​
Weight
​​
Metric Target
​​
Achievement
(1),(2)
Consolidated Metrics:
​​
 
​​
 
​​
 
Operating Income
​​
45%
​​
$67.7 million
​​
51%
Free Cash Flow
​​
30%
​​
$51.0 million
​​
0%
Divisional Metrics:
​​
 
​​
 
​​
 
Operating Income
​​
15%
​​
$65.0 million
​​
51%
Free Cash Flow
​​
10%
​​
$39.2 million
​​
0%
Overall Weighted Achievement
​​
 
​​
 
​​
30.3%
(1)
Results exclude the impact of the divestiture of our Control Devices’ non-core switches and connectors product lines, restructuring costs, business realignment costs and fair value adjustments which occurred in Q3 2019.
(2)
The Committee approved adjustments to Consolidated Operating Income results for the GM strike and China tariffs as external events that were outside of management’s control.
The following table provides the 2019 AIP targets and achievement as a percent of base salary and as a dollar amount for our NEOs.
Executive Officer
​​
Percent of
Base Salary
Target
​​
Percent of
Target Bonus
Achieved
​​
Target
Bonus
​​
Achieved
Bonus(1)
Jonathan B. DeGaynor
​​
103%
​​
0.0%
​​
$ 850,000
​​
$—
Robert R. Krakowiak
​​
75%
​​
35.4%
​​
349,313
​​
123,657
Thomas M. Dono, Jr.
​​
60%
​​
35.4%
​​
232,140
​​
82,178
Laurent P. Borne
​​
50%
​​
22.7%
​​
169,000
​​
38,363
Robert R. Willig, Jr.
​​
50%
​​
30.3%
​​
169,000
​​
51,207
Anthony L. Moore(1)
​​
50%
​​
0.0%
​​
122,859
​​
—
(1)
Mr. Moore did not receive a bonus because he was not employed at the time of payout as required under the plan.
The payment of compensation under the 20182019 AIP plan was subject to our overall performance and is included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

In addition to AIP, Mr. WilligBorne received a sign-on bonus in the amount of $85,000, which is included in the “Bonus” column of the Summary Compensation Table.

$80,000.

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Long-Term Incentive Awards

We believe that long-term incentive awards are a valuable motivation and retention tool and provide a long-term performance incentive to management. Under our Long-Term Incentive Plan (“LTIP”), executive officers may be granted share options, restricted common shares and other equity-based awards. Under our Long-Term Cash Incentive Plan (“LTCIP”), which was not used in 2019, executive officers may be granted awards payable in cash. The long-term awards are calculated based on the fair value of the shares, shares equivalent or cash at the time of grant. In 2018,2019, we used the following long-term incentive vehicles to provide grants to our executive officers.

Time-Based Restricted Share Units (“RSUs”): RSUs provide strong retention value by granting the recipients the right to receive common shares (on a one-for-one basis for the number of RSUs granted) after a three-year vesting period, provided that the executive officer is still employed by the Company.
Performance-Based Share Units (“Performance Shares”) - Total Shareholder Return: These awards may be earned based on our TSR over a three-year period relative to the TSR of our 2019 Peer Group, which is comprised of our 2019 Comparator Group of companies. The following table shows the payout levels associated with TSR percentile ranking. We believe the use of the TSR metric effectively aligns executive and shareholder interests. The Performance Shares earned based on the TSR metric will be paid after a three-year vesting period by the issuance on a one-for-one basis of common shares.
•  Time-Based Restricted Share Units (RSUs):  RSUs provide strong retention value by granting the recipients the right to receive common shares (on a one-for-one basis for the number of RSUs granted) after a three year vesting period, provided that the executive officer is still employed by the Company.
•  Performance-Based Share Units (Performance Shares) — Total Shareholder Return:  These awards may be earned based on our TSR over a three year period relative to the TSR of our 2018 Peer Group, which is comprised of our 2018 Comparator Group of companies. The following table shows the payout levels associated with TSR percentile ranking. We believe the use of the TSR metric effectively aligns executive and shareholder interests. The Performance Shares earned based on the TSR metric will be paid after a three year vesting period by the issuance on a one-for-one basis of common shares.

SRI TSR v. Peer Group​​
Calculation of # of Shares
​​
Shares Earned as a
a % of Target Shares
50th – 100th
50th - 100th percentile
​​
SRI percentile x 2.0
​​
100% –- 200%
30th – 49th
30th - 49th percentile
​​
50% + {2.5 ×x (SRI percentile – 30)percentile-30)}
​​
50% –- 99%
< 30th30th percentile
​​
n/a
​​
0%
Performance Shares - Earnings Per Share: In 2019, we granted Performance Shares that may be earned after three years based on performance relative to a pre-determined threshold, target and maximum cumulative EPS metric over a three-year period. Below the threshold, no shares will be earned. The maximum shares that may be earned is 200% of target. The target EPS for 2019 was set using the Board-approved budget, with an additional 10% added for each of the next two years in the vesting period. The threshold is set at 70% of target and the maximum is set at 130%. Provided the executive officer remains employed, and depending on performance relative to the EPS target, the number of Performance Shares vested prorates between minimum and maximum amounts. The Performance Shares earned based on the EPS metric will be paid after a three-year vesting period by the issuance on a one-for-one basis of common shares.
•  Performance-Based Share Units (Performance Shares) — Earnings Per Share:  In 2018, we granted Performance Shares that may be earned after three years based on performance relative to a pre-determined threshold, target and maximum cumulative EPS metric over a three year period. Below the threshold, no shares will be earned. The maximum shares that may be earned is 150% of target. The target EPS for 2018 was set using the Board-approved budget, with an additional 10% added for each of the next two years in the vesting period. The threshold is set at 70% of target and the maximum is set at 130%. Provided the executive officer remains employed, and depending on annual EPS performance, the number of Performance Shares vested prorates between minimum and maximum amounts. Actual EPS performance below the minimum level results in no vested Performance Shares for the annual performance period. The Performance Shares earned based on the EPS metric will be paid after a three year vesting period by the issuance on a one-for-one basis of common shares.

 
​​
Threshold
​​
Target
​​
Maximum
Cumulative EPS
​​
$3.89
​​
$5.56
​​
$7.23
   
  Threshold Target Maximum
Cumulative EPS      $4.21       $6.02       $7.83 
Performance Shares – Return on Invested Capital (ROIC): In 2019, we granted Performance Shares that may be earned after three years based on performance relative to a pre-determined threshold, target and maximum average ROIC metric over a three-year period. Below the threshold, no shares will be earned. The maximum shares that may be earned is 200% of target. The target ROIC for 2019 was set using the Board-approved budget, with an additional 10% added for each of the next two years in the vesting period, and then taking an average of the three years. The threshold is set at 70% of target and the maximum is set at 130%. Provided the executive officer remains employed, and depending on performance relative to the ROIC target, the number of Performance Shares vested prorates between minimum and maximum amounts. The Performance Shares earned based on the ROIC metric will be paid after a three-year vesting period by the issuance on a one-for-one basis of common shares.

 
​​
Threshold
​​
Target
​​
Maximum
Average ROIC
​​
13.2%
​​
18.9%
​​
24.6%

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The following chart shows the allocation of the LTIP awards that were granted in 2018:

[GRAPHIC MISSING] 

2019:


The Committee determines the value of the annual grant to the executive officers by considering the comparison to our Comparator Group obtained during the annual compensation review process, as well as the executives’ responsibilities, performance and potential contributions. The targeted value of 20182019 LTIP grants were established as listed in the table below.

Executive Officer
​​
Targeted Value
2019 Grant
Executive OfficerTargeted Value
2018 Grant
Jonathan B. DeGaynor
​​
$1,800,000
 2,450,000
Robert R. Krakowiak
​​536,000
698,625
Thomas M. Dono, Jr.
​​365,000
425,590
Thomas A. Beaver
Laurent P. Borne
​​346,000
338,000
Robert R. Willig, Jr.
​​325,000
338,000
Anthony L. Moore
​​
347,069

The grant date fair value of the RSUs and Performance Shares awarded in 20182019 are included in the “Stock Awards” column of the Summary Compensation Table. The RSUs awarded in 20182019 are included in the “All Other Stock Awards” column of the Grants of Plan-Based Awards table, and the grant date fair value of the Performance Shares awarded are included in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns of the Grants of Plan-Based Awards table.

The Committee’s practice has been to approve the long-term incentive awards at the first regular meeting of the calendar year. As a general practice, awards under the long-term incentive plans are approved once a year unless a situation arises whereby a compensation package is approved for a newly hired or promoted executive officer and equity-based compensation is a component.

2016

In addition to his LTIP grant at the targeted value shown above, Mr. Krakowiak received an additional grant of 16,644 time-based shares with a grant value of $500,000 that vest in three years. This grant was in recognition of performance and for retention purposes. This grant is included in the Grants of Plan-Based Awards table.
2017 Grant of RSUs and Performance Shares

The performance period for the Performance Shares that were granted in 20162017 ended on December 31, 2018.2019. The shares vested on March 4, 2019,6, 2020, as shown below. These shares are included for the NEOs, as applicable, in the “Outstanding Equity Awards at Year-End” table.

     
2016 LTIP Grant — Performance Period Results
Award Type & Metric Grant
Date		 Vest Date Allocation   
of Shares   		 Performance Results
(2016 – 2018)		 Payout % of   
Target Shares   
Time-Based RSU  3/4/2016   3/4/2019              45%   n/a   100% 
Performance Shares – EPS  3/4/2016   3/4/2019   25%   120% of target   134% of target 
Performance Shares – TSR  3/4/2016   3/4/2019   30%   70th percentile of Peer Group   140% of target 

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2017 LTIP Grant - Performance Period Results
Award Type & Metric
​​
Grant
Date
​​
Vest
Date
​​
Allocation
of Shares
​​
Performance Results
(2017-2019)
​​
Payout % of
Target Shares
Time-Based RSUs
​​
3/6/2017
​​
3/6/2020
​​
45%
​​
n/a
​​
100%
Performance Shares - TSR
​​
3/6/2017
​​
3/6/2020
​​
30%
​​
87th %ile of Peer Group
​​
174% of target
Performance Shares - EPS
​​
3/6/2017
​​
3/6/2020
​​
25%
​​
118% of target
​​
130% of target

The TSR Peer Group for the 20162017 grant consisted of the following companies.

companies(1):
​
ActuantEnPro IndustriesMethode Electronics
Altra Industrial Motion
​​
EnPro Industries
​​
Methode Electronics
​
​
AVX
​​
ESCO Technologies
​​
Modine Manufacturing Company
​
AVX​
Barnes Group
​​
Franklin Electric
​​
OSI Systems
​
Barnes Group​
Chart Industries
Gentex​​
Gentex
​​
Rogers
​
Chart Industries​
CIRCOR
Gentherm​​
Gentherm
​​
Shiloh Industries
​
CIRCOR​
Columbus McKinnon
Graco​​
Graco
​​
Spartan Motors
​
Columbus McKinnon​
Commercial Vehicle Group
KEMET​​
KEMET
​​
Standard Motor Products
​
Commercial Vehicle Group​
CTS
Littelfuse​​
Littelfuse
​​
Superior Industries
​
CTS​
Dorman Products
Lydall​​
Lydall
​​
Wabash National
​
​
Enerpac Tool Group(2)
​​
Meritor
​​
​
(1)
Tower International
Dorman ProductsMeritorWabash National was in the original Comparator Group but has since been excluded because it was acquired on September 30, 2019.
(2)
Enerpac Tool Group was previously known as Actuant.
Perquisites

Perquisites

We provide executive officers with limited perquisites that we and the Committee believe are reasonable and consistent with the overall compensation program to better enable us to attract and retain superior employees for key positions. The Committee periodically reviews the levels of perquisites provided to executive officers.

Perquisites that are provided to executive officers are different by individual and might include an auto allowance or spousal travel. The incremental costs of the perquisites listed above for the NEOs are included in the “All Other Compensation” column of the Summary Compensation Table.

Employment Agreements

We use employment agreements in limited situations. In 2015, we entered into a negotiated employment agreement with Mr. DeGaynor which remains in effect. This agreement provides for a minimum base salary of $500,000; participation in the annual incentive plan at a target of 100% of base salary; a monthly auto allowance, participation in the Company’s customary benefit plans including an annual executive physical; and participation in the long-term incentive plan. In addition, if Mr. DeGaynor is terminated without cause, we will be obligated to pay him the sum of his annual base salary and target annual incentive as well as health and welfare benefits for one year, and if the termination occurs in the last six months of the fiscal year, he would be paid a prorated annual incentive.

The Company has not entered into an employment agreement with any other NEO.

Severance Plan

The Company provides executive severance through the Officers’ and Key Employees’ Severance Plan (the “Severance Plan”). The NEOs covered under the Severance Plan include Mr. Krakowiak, Mr. Beaver,Dono, Mr. DonoBorne, Mr. Willig and Mr. Willig.Moore. If a covered executive is terminated by us without cause, we will be obligated under the Severance Plan to pay the executive’s salary for 12 months and continue health and welfare benefits coverage over the same period of time. Mr. DeGaynor’s severance protection is provided in his employment agreement as described above.
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Termination and Change in Control Payments

We have entered into change in control agreements with Mr. DeGaynor, Mr. Krakowiak, Mr. Dono, Mr. BeaverBorne, Mr. Willig and Mr. Willig,Moore, and certain other senior management employees. These agreements are designed to promote stability and continuity of senior management, both of which are in the best interest of Stoneridge and our shareholders. Our termination and change in controlchange-in-control provisions for the NEOs are summarized below under “Potential Change in Control and Other Post-Employment Payments.”

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Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code (“Code”) generally limits tax deductibility of compensation paid by a public company to its chief executive officer and certain other executive officers in any year to $1 million in the year compensation becomes taxable to the executive. Prior to the 2017 Tax Cuts and Jobs Act, certain compensation was exempt from the deduction limit to the extent it met the requirements to be considered “qualified performance-based compensation” as previously defined in Section 162(m). The 2017 Tax Cuts and Jobs Act eliminated that exemption. Certain arrangements entered into prior to November 2, 2017 are considered “grandfathered” and compensation paid under such arrangements will continue to be deductible until the arrangements are materially modified.

The Compensation Committee has historically considered Section 162(m) in the design of incentive plans to preserve the corporate tax deductibility of compensation. However, in light of the changes to Section 162(m), the Committee anticipates that a larger portion of future compensation paid to the Company’s NEOs will be subject to a tax deduction disallowance under Section 162(m). The Compensation Committee recognizes that factors other than tax deductibility should be considered in determining the forms and levels of executive compensation most appropriate and in the best interests of the Company and its stockholders. Annually, the Compensation Committee reviews all compensation programs and payments, including the tax impact on the Company.

Accounting Treatment of Compensation

As one of many factors, the Committee considers the financial impact in determining the amount of and allocation of the different pay elements, including Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 Stock Compensation.

Share Ownership Guidelines

The Committee has established share ownership guidelines for our executive officers to enhance the linkage between the interests of our executive officers and those of our shareholders. These guidelines provide that the CEO, CFO and other executive officers must retain Company common shares equal in market value to five, four and three times, respectively, of their annual base salaries. The executive officers have a five year accumulation period to achieve compliance and are restricted from selling any common shares earned under a Company equity-based compensation plan until their ownership guideline has been reached. The accumulation period begins on the date of their first grant following their date of hire or promotion which subjects them to the guidelines.

Clawback Policy

The Company adopted a clawback policy which provides for recoupment of performance-based executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under federal securities laws. The policy applies to current and former executives and requires reimbursement or forfeiture of any excess performance-based compensation received by an executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement.

Compensation Risk Assessment

The Compensation Committee reviews the Company’s incentive compensation structure practices for all employees to evaluate any risks associated with the Company’s compensation programs.

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As part of the evaluation, the Compensation Committee reviews a compensation risk assessment that was prepared by Company management and its independent compensation consultant. The compensation risk assessment analyzes all Company compensation programs for various categories of compensation related risk.

The Compensation Committee considers, among other factors, the design of the incentive compensation programs, which are closely aligned to corporate performance, the mix of short term and long term compensation, the maximum payout levels for short term and long term incentives, the distribution of compensation between equity and cash, and other factors that mitigate risk.

The Compensation Committee determined that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Compensation Committee Report

We have reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and, based on that review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

The Compensation Committee



Kim Korth, ChairwomanChairperson
Jeffrey P. Draime
Douglas C. Jacobs
William M. Lasky

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Summary Compensation Table

The following table provides information regarding the compensation of our NEOs for 2018.

       
Name and Principal Position Year Salary
($)		 Bonus
($)(1)		 Stock
Awards
($)(2)		 Non-Equity
Incentive Plan
Compensation
($)(3)		 All Other
Compensation
($)(4)		 Total
($)
Jonathan B. DeGaynor
President & Chief
Executive Officer
  		  2018   $750,000   $         —   $1,800,013   $564,000   $28,022   $3,142,035 
  2017   615,000   —   1,299,862   832,095   26,408   2,773,365 
  2016   550,000   —   1,095,793   720,720   25,864   2,392,377 
                                   
Robert R. Krakowiak
EVP, Chief Financial
Officer & Treasurer
 		  2018   433,800        535,648   228,352   12,472   1,210,273 
  2017   408,333   275,250   499,904   395,020   9,480   1,587,987 
  2016   137,949   2,500   509,626   115,275   1,450   766,799 
                                   
Thomas M. Dono, Jr.
Chief Legal Officer
 		  2018   359,853   —   364,848   150,964   10,066   885,730 
                                   
                                   
                                   
Thomas A. Beaver
Vice President &
President of Global Sales		 
  2018   336,305   —   346,495   139,096   34,895   856,791 
  2017   326,510   —   336,391   267,270   27,264   957,434 
  2016   317,000   5,000   323,745   224,144   26,975   896,865 
                                   
Robert R. Willig, Jr.
President Control Devices		  2018   325,000   85,000   324,962   90,090   12,032   837,084 
                                   
                                   
                                     
2019.
Name and Principal
Position
​​
Year
​​
Salary
($)
​​
Bonus
($)(1)
​​
Stock Awards
($)(2)
​​
Non-Equity
Incentive Plan
Compensation
($)(3)
​​
All Other
Compensation
($)(4)
​​
Total
($)
Jonathan B. DeGaynor
President & Chief
Executive Officer
​​
2019
​​
$825,000
​​
$—
​​
$2,449,942
​​
$—
​​
$28,222
​​
$3,303,164
​
2018
​​
750,000
​​
—
​​
1,800,013
​​
564,000
​​
28,022
​​
3,142,035
​
2017
​​
615,000
​​
—
​​
1,299,862
​​
832,095
​​
26,408
​​
2,773,365
​​
​​
​​
​​
​​
​​
​​
Robert R. Krakowiak
EVP, Chief Financial
Officer & Treasurer
​​
2019
​​
465,750
​​
—
​​
1,198,566
​​
123,657
​​
12,787
​​
1,800,760
​
2018
​​
433,800
​​
—
​​
535,648
​​
228,352
​​
12,472
​​
1,210,273
​
2017
​​
408,333
​​
275,250
​​
499,904
​​
395,020
​​
9,480
​​
1,587,987
​​
​​
​​
​​
​​
​​
​​
Thomas M. Dono, Jr.
Chief Legal Officer &
Secretary
​​
2019
​​
386,900
​​
—
​​
425,517
​​
82,178
​​
11,560
​​
906,154
​
2018
​​
359,853
​​
—
​​
364,848
​​
150,964
​​
10,066
​​
885,730
​​
​​
​​
​​
​​
​​
​​
Laurent P. Borne
President Electronics
& Chief Technology
Officer
​​
2019
​​
338,000
​​
80,000
​​
337,950
​​
38,363
​​
176,824
​​
971,137
​​
​​
​​
​​
​​
​​
​​
Robert R. Willig, Jr.
​​
2019
​​
338,000
​​
—
​​
337,950
​​
51,207
​​
12,232
​​
739,389
​​
2018
​​
325,000
​​
85,000
​​
324,962
​​
90,090
​​
12,032
​​
837,084
​​
​​
​​
​​
​​
​​
​​
Anthony L. Moore
​​
2019
​​
245,719
​​
—
​​
347,022
​​
—
​​
415,678
​​
1,008,419
​​
2018
​​
321,360
​​
—
​​
321,291
​​
120,831
​​
36,756
​​
800,238
​​
2017
​​
309,000
​​
25,000
​​
308,858
​​
229,384
​​
1,518
​​
873,760
(1)
(1)The amount shown in the “Bonus” columnOther Bonus for Mr. Willig is attributable to aBorne consisted of an $80,000 sign-on bonus paid six months after his hire date.hire.
(2)
The amounts included in the “Stock Awards” column represent the grant date fair value of time-based RSUs and Performance Shares computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 87 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.2019. In 2018,2019, RSUs and Performance Share awards were granted to our NEOs. The Performance Share awards were expected to be earned at the target level when granted; the maximum value of the Performance Share awards on the date of grant for Mr. DeGaynor, Mr. Krakowiak, Mr. Dono, Mr. BeaverBorne, Mr. Willig, and Mr. Willig,Moore are, respectively, $1,755,111, $522,321, $355,671, $337,931$2,694,888, $768,423, $468,023, $371,714, $371,714, and $316,642.$381,688. Please see the “Grants of Plan-Based Awards for 2018”2019” table for more information regarding the RSUs and Performance Shares granted in 2018.2019.
(3)
The amount shown for each NEO in the “Non-Equity Incentive Plan Compensation” column is attributable to an annual incentive award earned under the AIP in the fiscal year listed.
(4)
The amounts shown for 20182019 in the “All Other Compensation” column are comprised of the following:

    
Executive Officer Auto
  Allowance		 401(k)
    Match		 Group
Term Life Insurance		     Total​
Auto
Allowance
​
401(k)
Match
​
Group Term
Life Ins
​
Tax Paid to
Foreign
Govt
​
Other(1)
​
Total
Jonathan B. DeGaynor  $14,400   $11,000   $2,622   $28,022 ​
$14,400
​
$11,200
​
$2,622
​
$—
​
$—
​
$28,222
Robert R. Krakowiak  —   11,000   1,472   12,472 ​
—
​
11,200
​
1,587
​
—
​
—
​
12,787
Thomas M. Dono, Jr.  —   9,706   360   10,066 ​
—
​
11,200
​
360
​
—
​
—
​
11,560
Thomas A. Beaver  14,400   11,000   9,495   34,895 
Laurent P. Borne
​
—
​
8,208
​
240
​
34,357
​
134,019
​
176,824
Robert R. Willig, Jr.  —   11,000   1,032   12,032 ​
—
​
11,200
​
1,032
​
—
​
—
​
12,232
Anthony L. Moore
​
—
​
—
​
1,892
​
—
​
413,786
​
415,678
(1)
For Mr. Borne, these are costs related to his company-initiated relocation to Sweden, including housing, transportation, education for dependents, relocation expenses, and tax reimbursements. For Mr. Moore, 400,000 represents a separation payment and 13,786 represents tax reimbursement for commuting expenses.

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Grants of Plan-Based Awards in 2018

2019

         
        
  
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)		   
  
Estimated Future Payouts
Under Equity Incentive Plan Awards(2)		 All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)(3)		 Grant Date
Fair Value
of Stock
and Option
Awards
($)(4)
Executive Officer Grant
Date		 Threshold
($)		 Target
($)		 Maximum
($)		 Threshold
(#)		 Target
(#)		 Maximum
(#)
Jonathan B. DeGaynor       $375,000   $750,000   $1,500,000                          
    3/6/2018                  20,230   40,460   71,725   33,100   $1,800,013 
Robert R. Krakowiak       151,830   303,660   607,320                          
    3/6/2018                  6,020   12,040   21,345   9,850   535,648 
Thomas M. Dono, Jr.       100,375   200,750   401,500                          
    3/6/2018                  4,100   8,200   14,535   6,710   364,848 
Thomas A. Beaver       92,484   184,968   369,936                          
  3/6/2018                  3,895   7,790   13,810   6,370   346,495 
Robert R. Willig, Jr.     65,000   130,000   260,000                
    3/6/2018                  3,650   7,300   12,940   5,980   324,962 

 
​​
All Other
Stock
Awards:
Number of
Shares of
Units
(#)(3),(4)
​​
Grant Date
Fair Value of
Stock and
Option
Awards
($)(5)
 
​​
 
​​
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1)
​​
Estimated Future Payouts Under
Equity Incentive Plan Awards(2)
​
Executive Officer
​​
Grant Date
​​
Threshold
($)
​​
Target
($)
​​
Maximum
($)
​​
Threshold
(#)
​​
Target
(#)
​​
Maximum
(#)
​
Jonathan B. DeGaynor
​​
 
​​
$ 425,000
​​
$ 850,000
​​
$1,700,000
​​
 
​​
 
​​
 
​​
 
​​
 
 
​​
3/4/2019
​​
 
​​
 
​​
 
​​
22,426
​​
44,855
​​
89,710
​​
36,701
​​
$2,449,942
Robert R. Krakowiak
​​
 
​​
174,656
​​
349,313
​​
698,625
​​
 
​​
 
​​
 
​​
 
​​
 
 
​​
3/4/2019
​​
 
​​
 
​​
 
​​
6,394
​​
12,790
​​
25,580
​​
27,109
​​
1,198,566
Thomas M. Dono, Jr.
​​
 
​​
116,070
​​
232,140
​​
464,280
​​
 
​​
 
​​
 
​​
 
​​
 
 
​​
3/4/2019
​​
 
​​
 
​​
 
​​
3,894
​​
7,790
​​
15,580
​​
6,375
​​
425,517
Laurent P. Borne
​​
 
​​
84,500
​​
169,000
​​
338,000
​​
 
​​
 
​​
 
​​
 
​​
 
 
​​
3/4/2019
​​
 
​​
 
​​
 
​​
3,093
​​
6,187
​​
12,374
​​
5,063
​​
337,950
Robert R. Willig, Jr.
​​
 
​​
84,500
​​
169,000
​​
338,000
​​
 
​​
 
​​
 
​​
 
​​
 
 
​​
3/4/2019
​​
 
​​
 
​​
 
​​
3,093
​​
6,187
​​
12,374
​​
5,063
​​
337,950
Anthony L. Moore
​​
 
​​
61,430
​​
122,859
​​
245,719
​​
 
​​
 
​​
 
​​
 
​​
 
 
​​
3/4/2019
​​
 
​​
 
​​
 
​​
3,176
​​
6,353
​​
12,706
​​
5,199
​​
347,022
(1)
The amounts shown reflect awards granted under our 20182019 AIP. In March 2018,2019, the Compensation Committee approved the 20182019 target AIP awards expressed as a percentage of the executive officer’s 20182019 approved base salary, and Company and individual performance measures for the purpose of determining the amount paid out under the AIP for each executive officer for the year ended December 31, 2018.2019. Please see “Compensation Discussion and Analysis —– Annual Incentive Awards” for more information regarding the Company’s 20182019 awards and performance measures.
(2)
The amounts shown reflect grants of Performance Share awards made under our LTIP on March 6, 2018.4, 2019. The amount of the Performance Shares that will be earned will be determined based on our total shareholder return compared to that of a defined peer group for 30%25% of the awards, and based on our EPS performance for 25%20% of the awards, and based on our ROIC performance for 10% of the awards for the performance period January 1, 20182019 through December 31, 2020.2021. The shares will vest on March 6, 2021,4, 2022, assuming the grantee is still employed on that date.
(3)
The amounts shown reflect grants of time-based RSUs made under our LTIP. These RSUs were granted on March 6, 2018.4, 2019. The time-based grant comprises 45% of the total LTIP award, and will be earned on March 6, 2021,4, 2022, assuming the grantee is still employed on that date.
(4)
(4)The amount shown for Mr. Krakowiak includes a grant of 16,644 time-based shares with a grant value of $500,000 received in recognition of performance on March 4, 2019. These shares will be earned on March 4, 2022, assuming Mr. Krakowiak is still employed on that date.
(5)
The amounts included in “Fair Value of Awards” column represent the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.2019.

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Outstanding Equity Awards at Year-End

    
 STOCK AWARDS​​
STOCK AWARDS
Executive Officer Number of   
Shares or Units of   
Stock That Have   
Not Vested   
(#)   		 Market Value of
Shares or Units of
Stock That Have
Not Vested
($)(1)		 Equity Incentive   
Plan Awards:    Number of   
Unearned Shares,   
Units or   
Other Rights   
That Have   
Not Vested   
(#)   		 Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not Vested
($)(1)		​
Number of Shares
or Units of Stock
That Have Not
Vested (#)
​
Market Value of
Shares or Units of
Stock That Have
Not Vested ($)(1)
​
Equity Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested (#)
​
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not Vested ($)(1)
Jonathan B. DeGaynor              37,530(2)   $925,115               62,967(6)   td,552,137 ​​
31,230(2)
​
$915,664
​
58,365(7)
​
$1,711,262
 31,230(3)   769,820   67,665(7)   1,667,942 ​
33,100(3)
​
970,492
​
62,530(8)
​
1,833,380
 33,100(4)   815,915   71,725(8)   1,768,021 ​
36,701(4)
​
1,076,073
​
65,244(9)
​
1,912,954
​
​
​
​
Robert R. Krakowiak  12,669(5)   312,291   21,255(9)   523,944 ​​
12,010(2)
​
352,133
​
22,448(7)
​
658,175
 12,010(3)   296,047   26,025(7)   641,516 ​
9,850(3)
​
288,802
​
18,610(8)
​
545,645
 9,850(4)   242,803   21,345(8)   526,154 ​
27,109(4)
​
794,836
​
18,604(9)
​
545,469
​
​
​
​
Thomas M. Dono, Jr.  6,710(4)   165,402   14,535(8)   358,288 ​​
6,710(3)
​
196,737
​
12,670(8)
​
371,484
Thomas A. Beaver  11,090(2)   273,369   18,600(6)   458,500 
 8,080(3)   199,172   17,515(7)   431,745 
 6,370(4)   157,021   13,810(8)   340,417 
Thomas M. Dono, Jr.
​​
6,375(4)
​
186,915
​
11,331(9)
​
332,225
​
​
​
​
Laurent P. Borne
​​
5,460(4)
​
160,087
​
10,313(10)
​
302,377
​
5,063(5)
​
148,447
​
8,999(9)
​
263,851
​
3,517(6)
​
103,118
​
​
​
​
​
​
Robert R. Willig, Jr.
​​
5,980(3)
​
175,334
​
11,280(8)
​
330,730
  5,980(4)   147,407   12,940(8)   318,971 ​
5,063(5)
​
148,447
​
8,999(9)
​
263,851
                    ​
​
​
​
Anthony L. Moore
​​
7,420(2)
​
217,554
​
13,870(7)
​
406,668
​
5,910(3)
​
173,281
​
11,160(8)
​
327,211
​
5,199(5)
​
152,435
​
9,241(9)
​
270,946
(1)
Time-based RSUsrestricted share units (RSUs) and Performance Shares are paid after the end of the performance period and on the vesting dates shown in the following footnotes. With regard to Performance Shares the actual number of common shares paid out is dependent upon the achievement of the related performance objectives. In this column, the theoretical value of the number of outstanding time-based RSUs and Performance Shares, as applicable, reported in the column to the immediate left is based on the price of our common shares on December 31, 20182019 ($24.64)29.32). In calculating the number of Performance Shares and their value, we compare the Company’s performance through 20182019 under each outstanding Performance Shareperformance share grant against the threshold, target, and maximum performance levels for the grant and report in this column the applicable potential payout amount. If the performance is between levels, we report the potential payout at the next highest level.
(2)These time-based RSUs vest on March 4, 2019.
(3)
These time-based RSUs vest on March 6, 2020.
(4)(3)
These time-based RSUs vest on March 6, 2021.
(5)(4)
These time-based RSUs vest on August 29, 2019.March 10, 2021
(5)
These time-based RSUs vest on March 4, 2022.
(6)
These time-based RSUs vest on September 10, 2020.
(7)
These Performance Shares are scheduled to vest on March 4, 20196, 2020 subject to actual performance on specified financial performance metrics. Performance on TSR and EPS was between target and maximum for the performance period that ended December 31, 2018.2019.
(7)These Performance Shares are scheduled to vest on March 6, 2020 subject to achievement of specified financial performance metrics. Performance is currently projected to be between Target and Maximum for both TSR and EPS (maximum is shown).
(8)
These Performance Shares are scheduled to vest on March 6, 2021 subject to achievement of specified financial performance metrics. Performance is currently projectedforecasted to be above target for TSR (maximum is shown) and between Targetthreshold and Maximumtarget for both TSR and EPS (maximum(target is shown).
(9)
These Performance Shares are scheduled to vest on August 29, 2019March 4, 2022 subject to actual performance onachievement of specified financial performance metrics. Performance is currently forecasted to be at target for EPS and ROIC (target is shown), and above target for TSR (maximum is shown).
(10)
These Performance Shares are scheduled to vest on March 10, 2021 subject to achievement of specified financial performance metrics. Performance is currently forecasted to be above target for TSR (maximum is shown) and between threshold and target for EPS was between target and maximum for the performance period that ended December 31, 2018.(target is shown).

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Shares Vested in 2018

  
  Stock Awards(1)
Executive Officer Number of
Shares Acquired
on Vesting
(#)		 Value Realized
on Vesting
($)
Jonathan B. DeGaynor  160,431   $4,427,896 
Robert R. Krakowiak  —   — 
Thomas M. Dono, Jr.  —   — 
Thomas A. Beaver  34,248   945,245 
Robert R. Willig, Jr.  —   — 
2019
 
​​
 
​​
 
​​
Stock Awards(1)
Executive Officer
​​
Number of Time-Based
RSUs Acquired on
Vesting (#)
​​
Number of Performance
Shares Acquired on
Vesting (#)
​​
Value Realized on
Vesting ($)
Jonathan B. DeGaynor
​​
37,530
​​
62,967
​​
$ 3,018,930
Robert R. Krakowiak
​​
12,669
​​
21,254
​​
1,034,312
Anthony L. Moore
​​
9,171
​​
15,386
​​
699,875
(1)
For Mr. DeGaynor, and Mr. Beaver, the number of shares includes time-based RSUs and Performance Sharesare from the 20152016 LTIP grantsgrant that vested on March 30, 2018.4, 2019. For Mr. Krakowiak, the shares are from a grant received at his time of hire in 2016 which vested on August 29, 2019. For Mr. Moore, the shares are from a grant received at his time of hire in 2016 which vested on May 10, 2019.

Non-Qualified Deferred Compensation Plan

The Compensation Committee approved implementation of a non-qualified deferred compensation plan for our executive officers and certain other leaders in the organization, effective June 1, 2017. The plan provides the opportunity to defer current compensation and taxes until a future date, and to receive tax deferred investment returns on deferred amounts. The Company will provide matching contributions to the extent that participants are unable to receive a full match in the 401(k) plan, due to contribution and/or compensation limits. The plan allows eligible employees to defer up to 80% of their base salary, up to 100% of AIP and up to 100% of LTIP. The minimum deferral period is three years. No NEO participated in the Company’s non-qualified deferred compensation plan in 2018.

Executive Officer
​​
Executive
contributions
in last FY ($)
​​
Registrant
contributions
in last FY ($)
​​
Aggregate
earnings in last FY
($)
​​
Aggregate
balance at last
FYE ($)
Laurent P. Borne
​​
$ 3,380
​​
—
​​
$237
​​
$3,617
Potential Change in Control and Other Post-Employment Payments

We have entered into a Change in Control Agreement (the “CIC Agreement”) with certain executive officers. There is no excise tax gross-up payment under the CIC Agreements. Our change in control agreements were designed to provide for continuity of management in the event of change in control of the Company. We think it is important for our executives to be able to react neutrally to a potential change in control and not be influenced by personal financial concerns. We believe our arrangements are consistent with market practice. For our NEOs covered under a CIC Agreement we set the level of benefits, as described below, to remain competitive with our select peer group. All payments under the CIC Agreement are conditioned on a non-compete, non-solicitation and non-disparagement agreement.

We believe that the CIC Agreements should compensate executives displaced by a change in control and not serve as an incentive to increase personal wealth. Therefore, our CIC Agreements are “double trigger” arrangements. In order for the executives to receive the payments and benefits set forth in the agreement, both of the following must occur:

•  a change in control of the Company; and
•  a triggering event:
•  the Company separates NEO from service, other than in the case of a termination for cause, within two years of the change in control; or
•  NEO separates from service for good reason (defined as material reduction in NEO’s title, responsibilities, power or authority, or assignment of duties that are materially inconsistent to previous duties, or material reduction in NEO’s compensation and benefits) within two years of the change in control.

a change in control of the Company; and

33

a triggering event:
the Company separates NEO from service, other than in the case of a termination for cause, within two years of the change in control; or
NEO separates from service for good reason (defined as material reduction in NEO’s title, responsibilities, power or authority, or assignment of duties that are materially inconsistent to previous duties, or material reduction in NEO’s compensation and benefits) within two years of the change in control.
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In March 2015, we entered into a CIC Agreement with Mr. DeGaynor as part of his employment agreement. The terms of this CIC Agreement are substantially similar to that described above. If the events listed above occur and the executive delivers a release to the Company, we will be obligated to provide the following to Mr. DeGaynor:

•  two times the greater of Mr. DeGaynor’s annual base salary at the time of a triggering event or at the time of the occurrence of a change in control;
•  two times the greater of Mr. DeGaynor’s target annual incentive award at the time of termination or the actual incentive award received for the fiscal year prior to termination;
•  an amount equal to the pro rata amount of annual incentive compensation Mr. DeGaynor would have been entitled to at the time of a triggering event calculated based on the personal and performance goals that were achieved in the year in which the triggering event occurred; and
•  continued life and health insurance benefits for twenty-four months following termination.

two times the greater of Mr. DeGaynor’s annual base salary at the time of a triggering event or at the time of the occurrence of a change in control;
two times the greater of Mr. DeGaynor’s target annual incentive award at the time of termination or the actual incentive award received for the fiscal year prior to termination;
an amount equal to the pro rata amount of annual incentive compensation Mr. DeGaynor would have been entitled to at the time of a triggering event calculated based on the personal and performance goals that were achieved in the year in which the triggering event occurred; and
continued life and health insurance benefits for twenty-four months following termination.
If the events listed above occur and the executive delivers a release to the Company, we will be obligated to provide the following to Mr. Krakowiak, Mr. Dono, Mr. Beaver,Borne, Mr. Willig and Mr. Willig:

•  two times the greater of the NEO’s annual base salary at the time of a triggering event or at the time of the occurrence of a change in control;
•  two times the greater of the NEO’s average annual incentive award over the last three completed fiscal years or the last five completed fiscal years;
•  an amount equal to the pro rata amount of annual incentive compensation the NEO would have been entitled to at the time of a triggering event calculated based on the performance goals that were achieved in the year in which the triggering event occurred; and
•  continued life and health insurance benefits for twenty-four months following termination.

Moore:

two times the greater of the NEO’s annual base salary at the time of a triggering event or at the time of the occurrence of a change in control;
two times the greater of the NEO’s average annual incentive award over the last three completed fiscal years or the last five completed fiscal years;
an amount equal to the pro rata amount of annual incentive compensation the NEO would have been entitled to at the time of a triggering event calculated based on the performance goals that were achieved in the year in which the triggering event occurred; and
continued life and health insurance benefits for twenty-four months following termination.
Upon a change in control as defined by the Amended and Restated Long-Term Incentive Plan (“2016 LTIP”), time-based RSUs and Performance Shares granted under that plan vest immediately and are no longer subject to forfeiture. Upon a change in control as defined by the 2016 LTIP, time-based RSUs and Performance Shares granted under that plan remain subject to forfeiture under the original terms of the grant unless a triggering event, as described above, occurs within two years of the effective date of the change in control.

We have a Severance Plan. The NEOs covered under the Severance Plan include Mr. Krakowiak, Mr. Dono, Mr. Beaver,Borne, Mr. Willig, and Mr. Willig.Moore. If we terminate a covered executive without cause, we will be obligated under the Severance Plan to pay the executive’s salary for one year and continue health and welfare benefits coverage over the same period of time. Mr. DeGaynor’s severance protection is provided in his employment agreement as described above. No severance is payable if the NEO’s employment is terminated for “cause,” if they resign, or upon death or disability.

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Value of Payment Presuming Hypothetical December 31, 20182019 Termination Date

Upon resignation, no payments are due to any NEO in the table below. Assuming the events described in the table below occurred on December 31, 2018,2019, each NEO would be eligible for the following payments and benefits:

     
  Termination
Without Cause		 Non-Termination
Change in Control		 Change in Control
and NEO Resigns
for Good Reason
or is Terminated
Without Cause		 Disability Death
Jonathan B. DeGaynor
                         
Base Salary  $   750,000   $            —   $1,500,000   $    187,500   $            — 
Annual Incentive Award  750,000   —   1,664,190   —   — 
Unvested and Accelerated Restricted Common Shares and Share Units  1,570,797   925,115   2,510,849   2,510,849   2,510,849 
Unvested and Accelerated Performance Shares, Restricted Common Shares
  1,919,915   1,130,696   3,068,925   1,919,915   1,919,915 
Health and Welfare Benefits  35,268   —   70,536   —   — 
Total  $5,025,979   $2,055,811   $8,814,500   $4,618,264   $4,430,764 
Robert R. Krakowiak
                         
Base Salary  $   450,000   $            —   $   900,000   $            —   $            — 
Annual Incentive Award  —   —   623,372   —   — 
Unvested and Accelerated Restricted Common Shares and Share Units  499,927   312,291   851,140   499,927   499,927 
Unvested and Accelerated Performance Shares, Restricted Common Shares  611,024   381,681   1,040,329   611,024   611,024 
Health and Welfare Benefits  32,260   —   64,519   —   — 
Total  $1,593,210   $   693,972   $3,479,360   $1,110,951   $1,110,951 
Thomas M. Dono, Jr.
                         
Base Salary  $   365,000   $            —   $   730,000   $            —   $            — 
Annual Incentive Award  —   —   301,928   —   — 
Unvested and Accelerated Restricted Common Shares and Share Units  45,948   —   165,402   45,948   45,948 
Unvested and Accelerated Performance Shares, Restricted Common Shares  56,153   —   202,130   56,153   56,153 
Health and Welfare Benefits  30,962   —   61,925   —   — 
Total  $   498,063   $            —   $1,461,385   $   102,100   $   102,100 
Thomas A. Beaver
                         
Base Salary  $   336,305   $            —   $   672,610   $            —   $            — 
Annual Incentive Award  —   —   420,340   —   — 
Unvested and Accelerated Restricted Common Shares and Share Units  423,512   273,369   629,561   423,512   423,512 
Unvested and Accelerated Performance Shares, Restricted Common Shares  517,625   334,008   769,573   517,625   517,625 
Health and Welfare Benefits  32,058   —   64,115   —   — 
Total  $1,309,500   $   607,377   $2,556,199   $   941,137   $   941,137 

 
​​
Termination
Without Cause
​​
Change in
Control and
NEO Resigns for
Good Reason or
is Terminated
Without Cause
​​
Disability
​​
Death
Jonathan B. DeGaynor
​​
 
​​
 
​​
 
​​
 
Base Salary
​​
$825,000
​​
$1,650,000
​​
$206,250
​​
$—
Annual Incentive Award
​​
850,000
​​
1,700,000
​​
—
​​
—
Unvested and Accelerated Restricted Common Shares and Share Units
​​
1,756,796
​​
2,962,229
​​
2,962,229
​​
2,962,229
Unvested and Accelerated Performance Shares, Restricted Common Shares
​​
2,147,250
​​
3,620,580
​​
2,147,250
​​
2,147,250
Health and Welfare Benefits
​​
36,654
​​
73,308
​​
—
​​
—
Total
​​
$5,615,700
​​
$10,006,117
​​
$5,315,729
​​
$5,109,479
Robert R. Krakowiak
​​
 
​​
 
​​
 
​​
 
Base Salary
​​
$465,750
​​
$931,500
​​
$—
​​
$—
Annual Incentive Award
​​
—
​​
498,019
​​
—
​​
—
Unvested and Accelerated Restricted Common Shares and Share Units
​​
729,863
​​
1,435,771
​​
729,863
​​
729,863
Unvested and Accelerated Performance Shares, Restricted Common Shares
​​
726,403
​​
1,158,433
​​
726,403
​​
726,403
Health and Welfare Benefits
​​
33,829
​​
67,658
​​
—
​​
—
280G Reduction or Excise Tax(1)
​​
 
​​
(456,857)
​​
 
​​
 
Total
​​
$1,955,845
​​
$3,634,525
​​
$1,456,266
​​
$1,456,266
Thomas M. Dono, Jr.
​​
 
​​
 
​​
 
​​
 
Base Salary
​​
$386,900
​​
$773,800
​​
$—
​​
$—
Annual Incentive Award
​​
—
​​
233,142
​​
—
​​
—
Unvested and Accelerated Restricted Common Shares and Share Units
​​
172,138
​​
383,652
​​
172,138
​​
172,138
Unvested and Accelerated Performance Shares, Restricted Common Shares
​​
210,371
​​
468,827
​​
210,371
​​
210,371
Health and Welfare Benefits
​​
32,581
​​
65,162
​​
—
​​
—
280G Reduction or Excise Tax(1)
​​
 
​​
(96,819)
​​
 
​​
 
Total
​​
$801,990
​​
$1,827,764
​​
$382,509
​​
$382,509
Laurent P. Borne
​​
 
​​
 
​​
 
​​
 
Base Salary
​​
$338,000
​​
$676,000
​​
$—
​​
$—
Annual Incentive Award
​​
—
​​
94,371
​​
—
​​
—
Unvested and Accelerated Restricted Common Shares and Share Units
​​
195,359
​​
411,653
​​
195,359
​​
195,359
Unvested and Accelerated Performance Shares, Restricted Common Shares
​​
154,751
​​
377,055
​​
154,751
​​
154,751
Health and Welfare Benefits
​​
32,064
​​
64,127
​​
—
​​
—
Total
​​
$720,174
​​
$1,623,206
​​
$350,110
​​
$350,110
Robert R. Willig, Jr.
​​
 
​​
 
​​
 
​​
 
Base Salary
​​
$338,000
​​
$676,000
​​
$—
​​
$—
Annual Incentive Award
​​
—
​​
141,297
​​
—
​​
—
Unvested and Accelerated Restricted Common Shares and Share Units
​​
148,389
​​
323,781
​​
148,389
​​
148,389
Unvested and Accelerated Performance Shares, Restricted Common Shares
​​
181,198
​​
395,439
​​
181,198
​​
181,198
Health and Welfare Benefits
​​
30,034
​​
60,068
​​
—
​​
—
Total
​​
$697,621
​​
$1,596,585
​​
$329,587
​​
$329,587
(1)
Code Section 280G provides guidelines that govern payments triggered by a change in control, known as parachute payments. If such payment exceeds 2.99 times the average annual compensation (safe harbor limit) for certain individuals, the payments may result in adverse tax consequences and excise taxes. The CIC Agreements provide if a parachute payment exceeds the safe harbor limit by 10% or less, then the payment amounts will be reduced to the safe harbor limit. If the parachute payment exceeds the safe harbor limit by more than 10%, then the payment is not reduced and the executive will

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be subject to an excise tax of 20%. Mr. Krakowiak would be subject to an excise tax of $456,857 as of December 31, 2019. Mr. Dono’s CIC compensation would be reduced by $96,819 as of December 31, 2019 to equal the Code Section 280G safe harbor limit. No reduction or excise tax would be required for Mr. DeGaynor, Mr. Borne or Mr. Willig as of December 31, 2019.

     
  Termination
Without Cause		 Non-Termination
Change in Control		 Change in Control
and NEO Resigns
for Good Reason
or is Terminated
Without Cause		 Disability Death
Robert R. Willig, Jr.
                         
Base Salary  $325,000   $         —   $   650,000   $        —   $        — 
Annual Incentive Award  —   —   180,180   —   — 
Unvested and Accelerated Restricted Common Shares and Share Units  40,944   —   147,407   40,944   40,944 
Unvested and Accelerated Performance Shares, Restricted Common Shares  49,990   —   179,945   49,990   49,990 
Health and Welfare Benefits  28,935   —   57,870   —   — 
Total  $444,869   $         —   $1,215,402   $90,934   $90,934 

CEO Pay Ratio

In compliance with Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we undertook activities to calculate the ratio of our CEO’s total annual compensation to that of our median employee. For 2018,2019, as permitted, we used the employee who was identified in 2017 as our median paid employee as that individual is still employed and there have been no significant changes to our global employee population.

We calculated the 20182019 total compensation data for both the CEO and the median employee. Our median employee’s total annual compensation in 20182019 was $22,714.$24,135. Our CEO’s total annual compensation in 20182019 for purposes of calculating the CEO pay ratio was $3,142,035.$3,303,164. The ratio of our CEO’s total annual compensation to the total annual compensation of our median employee was 138137 to 1.

Director Compensation

Non-employee directors are compensated for their services as directors as shown in the chart below.

Schedule of Director Fees

2019 Schedule of Director Fees
Cash Compensation
​​
Cash Compensation
Annual Retainer-Director
​​
$80,000
Annual Retainer – DirectorRetainer-Chairman
​​$  80,000
150,000
Annual Retainer – Chairman
Additional Compensation:
​​150,000
Additional Compensation:
Audit Committee Chair
​​12,500
15,000
Compensation Committee Chair
​​
10,000
Nominating & Corporate Governance Committee Chair
​​7,500
10,000
Equity Compensation
Compliance & Ethics Committee Chair
​​
10,000
Equity Compensation
​​
Date of grant value
​​
105,000

The Compensation Committee annually reviews director compensation annually relative to data of the Company’s Comparator Group provided by TRS, its independent consultant, and recommends changes to the full Board for approval, as appropriate. For 2018,2019, the Committee recommended and the Board approved an annual Chairperson fee of $10,000 for the Compliance & Ethics Committee, and a $5,000$2,500 increase to the Annual Cash RetainerChairperson fees for the Nominating & Corporate Governance Committee and a $10,000 increase to the Equity Annual Retainer for directors.

Audit Committee.

Pursuant to the Directors’ Restricted Shares Plan, non-employee directors are eligible to receive awards of restricted common shares. In 2018, all directors wereOn March 5, 2019, each director was granted 4,2773,535 restricted common shares. The restrictions foron those common shares lapsed on March 7, 2019.

5, 2020.

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Director Compensation Table

   
Non-Employee Director Fees
Earned or
Paid in Cash		 Stock
Awards
($)(1)		 Total
Compensation
($)		​
Fees Earned or
Paid in Cash
​
Stock
Awards
($)(1)
​
Total
Compensation
($)
Jeff Draime  $  80,000   $105,000   $185,000 ​
$80,000
​
$105,000
​
$185,000
Doug Jacobs  92,500   105,000   197,500 ​
95,000
​
105,000
​
200,000
Ira Kaplan  80,000   105,000   185,000 ​
80,000
​
105,000
​
185,000
Kim Korth  90,000   105,000   195,000 ​
90,000
​
105,000
​
195,000
Bill Lasky  157,500   105,000   262,500 ​
160,000
​
105,000
​
265,000
George Mayes, Jr.  80,000   105,000   185,000 ​
90,000
​
105,000
​
195,000
Paul Schlather  80,000   105,000   185,000 ​
80,000
​
105,000
​
185,000
(1)
The amounts included in the “Stock Awards” column represent fair value at grant date of restricted common share awards to directors, computed in accordance with FASB ASC Topic 718. For a discussion of the valuation assumptions, see Note 87 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.2019.

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Director Share Ownership Guidelines

The Board has established share ownership guidelines for all non-employee directors. These guidelines provide that each director should own Company common shares equal in market value to four times the cash portion of the Board’s annual retainer. The Directors have a five year accumulation period from implementation of the guideline or appointment to the Board to achieve compliance and are restricted from selling any common shares earned under a Company equity-based compensation plan until their ownership guideline has been reached.
Maximum Annual Director Compensation Policy
The Directors’ Restricted Shares Plan has a current maximum annual limit for equity grants to any non-employee director of 10,000 shares.
The Board has adopted an annual limit for total compensation paid to a non-employee director of $350,000 in 2020.
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PROPOSAL FOUR: APPROVAL OF AN AMENDMENT TO 2016 LONG-TERM INCENTIVE PLAN TO INCREASE BY 1,100,000 THE NUMBER OF COMMON SHARES AUTHORIZED FOR ISSUANCE
The 2016 Long-Term Incentive Plan (“2016 LTIP”) was, upon the approval and recommendation of the Board of Directors, in accordance with applicable law and listing rules of the NYSE, approved by the Company’s shareholders at the 2016 Annual Meeting of Shareholders. On March 10, 2020, the Board of Directors approved an amendment (subject to shareholder approval) to the 2016 LTIP to increase by an additional 1,100,000 common shares the number of common shares available for issuance.
Description of Amendment
The amendment to the 2016 LTIP will increase the number of common shares available for issuance by 1,100,000 to bring the total common shares available for issuance to 2,900,000.
The Company is seeking shareholder approval of the amendment to the 2016 LTIP because additional shares available for issuance under the it will assist the Company in achieving its goal of promoting long-term growth and profitability by enabling the Company to attract, retain and reward key employees and, therefore, align the interests of those employees with those of the Company’s shareholders. Without the additional shares for the 2016 LTIP, the Company would not have the ability to make equity-based awards to its key employees and would be greatly disadvantaged in attracting and retaining key employees. As described under the section heading “Executive Compensation,” the Company has made annual grants of equity-based awards under the 2016 LTIP.
By aligning compensation with performance, the Company believes that the use of share-based benefits as part of the Company’s compensation package is of great importance in promoting the Company’s growth and continued success and is thus a substantial benefit to the Company’s shareholders and the Company. The description of the 2016 LTIP, as amended, is subject to and qualified by (i) Appendix A to this Proxy Statement (which contains a copy of the 2016 LTIP amendment that increases the number of common shares authorized for issuance) and (ii) a copy of the 2016 LTIP (prior to the amendment), which is available at www.sec.gov as an appendix to our Proxy Statement dated and filed with the SEC on April 8, 2016 and is also available as Exhibit 4.3 to our Form S-8 Registration Statement filed with the SEC on August 3, 2016. These files are also available on our website at www.stoneridge.com (see “Investors”, “SEC Filings”).
Under the 2016 LTIP plan, 1,800,000 common shares were reserved for issuance pursuant to grants or awards. At the end of 2019, grants for 1,200,753 common shares had been made, 180,437 of those common shares have been forfeited and therefore again available for grants under the 2016 LTIP. In March 2020, grants for 653,407 common shares were made and, in the first quarter of 2020 through March 20, 2020, 27,035 common shares were forfeited, leaving a total of 153,312 common shares available for issuance as grants under the 2016 LTIP. The proposed amendment would add 1,100,000 to the number of common shares available for issuance under the 2016 LTIP.
Summary of the 2016 Long-Term Incentive Plan:
The purpose of the LTIP is to promote the Company’s long-term growth and profitability by enabling the Company to attract, retain and reward key employees and officers and to strengthen the common interests of such employees and officers and the Company’s shareholders by offering key employees and officers equity or equity-based incentives. Key employees and officers of the Company and its subsidiaries or affiliates will be eligible to participate in the LTIP. As of March 31, 2020, approximately 45 key employees and officers were eligible to participate in the LTIP.
The Compensation Committee administers the LTIP and determines who receives awards, the type and amount of awards, the consideration, if any, to be paid for awards, the timing of awards and the terms and conditions of awards. Under the LTIP, the Compensation Committee may delegate its responsibilities as to the selection of and grant of awards to employees who are not executive officers of the Company or, subject to Section 16 of the Exchange Act, to the
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Company’s management in a manner consistent with applicable law. The Compensation Committee will have the authority to adopt, alter and repeal such rules, guidelines and practices governing the LTIP as it considers advisable and to interpret the terms and provisions of the LTIP and any award issued under the LTIP.
The Compensation Committee may grant stock options that (i) qualify as incentive stock options under Section 422A of the Internal Revenue Code of 1986, (ii) do not qualify as incentive stock options, or (iii) both. To qualify as an incentive stock option, an option must meet certain requirements set forth in the Internal Revenue Code. Under the LTIP the maximum number of common shares which may be issued subject to incentive stock options is 250,000. Options are evidenced by a stock option agreement in the form approved by the Compensation Committee.
In addition, the Compensation Committee may make grants of restricted shares, restricted share units, deferred shares, share purchase rights, share appreciation rights in tandem with stock options, performance shares, performance share units, share units, other share-based awards or any combination thereof.
Stock options will be exercisable and grants of restricted shares, restricted share units, performance units or performance shares, etc. will vest at such time or times as the Compensation Committee determines at the time of grant. In general, restricted shares are non-transferable prior to vesting. Additionally, if any stock option or grant of restricted shares or restricted share units is exercisable or becomes vested only in installments or after specified exercise dates, the Compensation Committee may waive such exercise provisions and accelerate any exercise date based on such factors as the Compensation Committee shall determine in its sole discretion. No consideration will be received by the Company for the granting of awards under the LTIP.
The exercise price of a stock option granted under the LTIP may not be less than 100% of the fair market value of the Company’s common shares on the date the stock option is granted, except that with respect to an incentive stock option, the exercise price may not be less than 110% of the fair market value of the Company’s common shares on the date of grant for participants who, on the date of grant, own more than 10% of the total combined voting power of all classes of shares of the Company or its parent or subsidiaries.
The term of each stock option will be fixed by the Compensation Committee and may not exceed ten years from the date the stock option is granted, except that the term for incentive stock options may not exceed five years for participants who, on the date of grant, own more than 10% of the total combined voting power of all classes of shares of the Company or its parent or subsidiaries.
No participant in the LTIP may be granted stock options, share appreciation rights or other awards, including any performance shares, in any calendar year for more than 400,000 common shares.
In the event of any dividend (other than a regular cash dividend) or other distribution (whether in the form of cash, shares, other securities, or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, acquisition, split-up, spinoff, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company, or other similar corporate transaction or event, and such event affects shares such that the Committee determines an adjustment is appropriate to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the LTIP, the Committee may adjust (i) the number of shares with respect to which awards may be granted or awarded, (ii) the number of shares subject to outstanding awards, (iii) the grant or exercise price with respect to any award, and (iv) the applicable limitations for grants to a participant.
The LTIP will not be qualified under Section 401(a) of the Internal Revenue Code and will not be subject to the provisions of the Employee Retirement Income Security Act of 1974.
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The LTIP is intended to comply with Section 409A of the Internal Revenue Code. If it is determined that any amount to be paid to a “specified employee” (as such term is defined in Section 409A of the Internal Revenue Code) under the LTIP is considered “nonqualified deferred compensation” subject to Section 409A of the Internal Revenue Code, then such payment if made upon “separation from service”, as defined in Section 409A of the Internal Revenue Code, shall be delayed for six months and one day following the specified employee’s separation from service.
The Board of Directors may amend, alter or discontinue the LTIP as long as it does not impair the rights thereunder of any participant. The Board of Directors must submit to the Company’s shareholders for approval any amendments to the LTIP which require shareholder approval under Section 16 of the Exchange Act or the rules and regulations thereunder or NYSE listing standards.
In the event there is a change in control (as defined in the LTIP) and a grantee’s termination of service within two years of a change in control, then (i) any stock options awarded under the LTIP not previously exercisable and vested shall become fully exercisable and vested upon the termination of the employment of the participant by the Company other than for cause or by the participant for good reason; (ii) any share appreciation rights shall become immediately exercisable upon the termination of employment of the participant by the Company other than for cause or by the participant for good reason; (iii) the restrictions applicable to any restricted shares or restricted share units, performance shares or performance share units, deferred shares, share purchase rights and other share-based awards shall lapse and such shares and awards shall be deemed fully vested upon the termination of employment of the participant by the Company other than for cause or by the participant for good reason (provided that any award subject to Section 409A of the Internal Revenue Code shall be settled in accordance with the terms of the grant and without regard to the change of control unless the change in control also constitutes a “change in control event” within the meaning of Section 409A of the Internal Revenue Code and such termination of employment occurs within two years); and (iv) unless otherwise determined by the Committee, the payout of performance shares and performance share units shall be determined exclusively by the attainment of the performance goals established by the Committee, which may not be modified after the change in control, and the Company shall not have the right to reduce the awards after the change in control for any other reason.
Performance objectives established by the Committee may be based on one or more of the following criteria applicable to the Company, one or more of its subsidiaries, units, divisions or the participant: increase in net sales, pretax income before allocation of corporate overhead and bonus; operating profit; net working capital; earnings per share; net income; revenue growth; attainment of division, group or corporate financial goals; return on shareholders’ equity; return on assets; other return measures (including, but not limited to, return on capital, invested capital, or average equity); cash flow (including, but not limited to, operating cash flow, free cash flow, cash generation, cash flow return on equity, and cash flow return on investment); capital and liquidity ratios; attainment of strategic and operational initiatives; attainment of one or more specific and measurable individual strategic goals; appreciation in or maintenance of the price of the Company’s common shares; increase in market share; gross profits; total return to shareholders; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; comparisons with various stock market indices or peer performance; achievement of safety, succession planning, sustainability, share price or talent development objectives or reductions in labor or material costs.
•
See Executive Compensation on page 17, including Compensation Discussion and Analysis (page 17), Summary Compensation Table (page 29) and Grants of Plan-Based Awards (page 30) for information about awards made under the 2016 LTIP to the Company’s Named Executive Officers.
On March 20, 2020, the closing price of common shares of the Company on the New York Stock Exchange was $15.69.
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Federal Income Tax Consequences
The following summary of the federal income tax consequences applicable to options awarded under the 2016 LTIP is only a general summary of the applicable provisions of the Internal Revenue Code and regulations promulgated thereunder as in effect on the date of this proxy statement. The actual federal, state, local and foreign tax consequences to the participant may vary depending upon his or her particular circumstances.
Incentive Stock Options
An incentive stock option results in no taxable income to the participant or a deduction to the Company at the time it is granted or exercised. However, the excess of the fair market value of the shares acquired over the option price is an item of adjustment in computing the alternative minimum taxable income of the participant. If the participant holds the shares received as a result of an exercise of an incentive stock option for at least two years from the date of the grant and one year from the date of exercise, then the gain realized on disposition of the shares (generally the amount received in excess of the option price) is treated as a long-term capital gain. If the shares are disposed of during this period, however (i.e., a “disqualifying disposition”), then the participant will include in income, as compensation for the year of the disposition, an amount equal to the excess, if any, of the fair market value of the shares on the date of exercise of the option over the option price (or, if less, the excess of the amount realized upon disposition over the option price). The excess, if any, of the sale price over the fair market value on the date of exercise will be either a long-term or a short-term capital gain depending on whether the participant has held the shares for more than one year. In such case, the Company will be entitled to a deduction, in the year of such a disposition, for the amount includible in the participant’s income as compensation. The participant’s basis in the shares acquired upon exercise of an incentive stock option is equal to the option price paid, plus any amount includible in his or her income as a result of a disqualifying disposition.
If an incentive stock option is exercised by tendering previously owned common shares, the following generally will apply: a number of new shares equal to the number of previously owned common shares tendered will be considered to have been received in a tax-free exchange; the participant’s basis and holding period (except for the disqualifying disposition period) for such number of new common shares will be equal to the basis and holding period of the previously owned common shares exchanged. To the extent that the number of common shares received exceeds the number of common shares surrendered, no taxable income will be realized by the participant at that time; such excess common shares will be considered incentive stock option stock with a zero basis; and the holding period of the participant in such common shares will begin on the date such common shares are transferred to the participant. If the common shares surrendered were acquired as the result of the exercise of an incentive stock option and the surrender takes place within two years from the date the incentive stock option relating to the surrendered common shares was granted or within one year from the date of such exercise, the surrender will result in a disqualifying disposition and the participant will realize ordinary income at that time in the amount of the excess, if any, of the fair market value at the time of exercise of the common shares surrendered over the basis of such common shares. If any of the common shares received are disposed of in a disqualifying disposition, the participant will be treated as first disposing of the common shares with a zero basis.
Non-qualified Stock Options
Provided that the exercise price is not less than the market value of a share at grant, a non-qualified stock option results in no taxable income to the participant or deduction to the Company at the time it is granted. A participant exercising such an option will, at that time, realize taxable compensation in the amount of the difference between the option price and the then market value of the shares. Subject to the applicable provisions of the Internal Revenue Code, the Company will be allowed a deduction for federal income tax purposes in the year of exercise in an amount equal to the taxable compensation recognized by the participant.
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The participant’s basis in such common shares is equal to the sum of the option price plus the amount includible in his or her income as compensation upon exercise. Any gain (or loss) upon subsequent disposition of the common shares will be a long-term or short-term gain (or loss), depending upon the holding period of the common shares. The holding period for shares received upon the exercise of an option begins on the date of exercise of the option.
If a non-qualified option is exercised by tendering previously owned common shares, the following generally will apply: a number of new common shares equal to the number of previously owned shares tendered will be considered to have been received in a tax-free exchange; the participant’s basis and holding period for such number of new common shares will be equal to the basis and holding period of the previously owned common shares exchanged. The participant will have compensation income equal to the fair market value on the date of exercise of the number of new common shares received in excess of such number of exchanged common shares; the participant’s basis in such excess common shares will be equal to the amount of such compensation income; and the holding period in such common shares will begin on the date of exercise.
Restricted Shares
A participant will not recognize any taxable income upon the grant of restricted shares unless the participant makes a voluntary election to recognize income at grant under Section 83(b) of the Internal Revenue Code. If a participant did not make an election under Section 83(b) of the Internal Revenue Code, then upon the expiration of a restriction period for restricted shares, whether such period lapses due to the satisfaction of certain pre-established performance criteria or due solely to the lapse of time, the participant will recognize compensation income and the Company will be entitled to a deduction equal to the value of the shares that the participant receives.
Vote Required for Approval
The affirmative vote of a majority of the votes cast in person or by proxy by shareholders represented and entitled to vote at the Annual Meeting is required for approval of the amendment to the 2016 LTIP. Broker non-votes will not be treated as votes cast and will not have a positive or negative effect on the outcome of the proposal. Abstentions will be treated as votes cast and, consequently, will have the same effect as votes against the proposal.
The Board of Directors recommends that you vote FOR Proposal Four.
OTHER INFORMATION

Shareholder’s Proposals for 20202021 Annual Meeting of Shareholders

Matters for Inclusion in the Proxy Materials for the 2021 Annual Meeting of Shareholders
Proposals of shareholders intended to be presented, pursuant to Rule 14a-8 under the Exchange Act, at our 20192021 Annual Meeting of Shareholders must be received by the Company at Stoneridge, Inc., 39675 MacKenzie Drive, Suite 400, Novi, Michigan 48377, on or before the close of business on December 7, 2019,3, 2020, for inclusion in our proxy statement and form of proxy relating to the 20192020 Annual Meeting of Shareholders. In orderShareholders
Matters for a shareholder’s proposal outsideConsideration at the 2021 Annual Meeting of Rule 14a-8 underShareholders, but not for Inclusion in the Exchange Act to be considered timely withinProxy Materials
Matters for consideration at the meaning2021 Annual Meeting of Rule 14a-4(c) ofShareholders, but not for inclusion in the Exchange Act, such proposalproxy materials, must be received by the Company at the address listed in the immediately preceding sentence notStoneridge, Inc., 39675 MacKenzie Drive, Suite 400, Novi, Michigan 48377 no later than the close of business on February 18, 2020.

16, 2021.

Delinquent Section 16(a) Beneficial Ownership Reporting Compliance

Reports

Section 16(a) of the Exchange Act requires our officers and directors and executive officers, and ownersholders of more than 10% of our common shares to file with the SEC and the NYSE initial reports of ownership and reports of changes in ownership of our common shares and other equity securities. Executive officers, directors and owners of more than 10% of the common sharesshares. Such persons are required by regulations of the SEC regulations to furnish us with copies of all forms they file pursuant to Section 16(a). Tosuch filings. As a matter of practice, our knowledge, based solelystaff and legal advisors assists our officers and directors in
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preparing initial reports of ownership and reports of changes in ownership and files those reports on their behalf. Based on our review of the copies of such reports furnishedforms we have received, as well as information provided and representations made by the reporting persons, we believe that all required Section 16(a) filing requirements were met with respect to us and written representations that no other reports were required during the fiscal year ended December 31, 2018, all Section 16(a) filing requirements applicable to our executive officers, directors and more than 10% beneficial owners were complied with.

2019.

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Other Matters

If the enclosed proxy is executed and returned to us via mail, telephone or Internet, the persons named in it will vote the common shares represented by that proxy at the meeting. The form of proxy permits specification of a vote for the election of directors as set forth under “Election of Directors,” the withholding of authority to vote in the election of directors, or the withholding of authority to vote for one or more specified nominees. When a choice has been specified in the proxy, the common shares represented will be voted in accordance with that specification. If no specification is made, those common shares will be voted at the meeting to elect directors as set forth under “Election of Directors”, FOR the proposals to (i) ratify the appointment of Ernst & Young as our independent registered public accounting firm for the year ending December 31, 2019; and2020; (ii) approve of the advisory resolution on executive compensation.

compensation, and (iii) the amendment to the 2016 LTIP increasing the number of common shares authorized for issuance.

The holders of shares of a majority of the common shares outstanding on the record date, present in person or by proxy, shall constitute a quorum for the transaction of business to be considered at the Annual Meeting of Shareholders.

If any other matter properly comes before the meeting, the persons named in the proxy will vote thereon in accordance with their judgment. We do not know of any other matter that may be presented for action at the meeting and we have not received any timely notice that any of our shareholders intend to present a proposal at the meeting.

By order of the Board of Directors,

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​​
By order of the Board of Directors,
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​​

​​
Thomas M. Dono, Jr.
Dated: April 4, 20192, 2020
​​
Chief Legal Officer and Secretary

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Appendix A

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FIRST AMENDMENT
TO THE
STONERIDGE, INC.
2016 LONG-TERM INCENTIVE PLAN
This First Amendment to the Stoneridge, Inc. 2016 Long-Term Incentive Plan (the “Amendment”), is made as of March 10, 2020 by the Board of Directors (the “Board”) of Stoneridge, Inc., an Ohio corporation (the “Company”). The Amendment will be effective for all Awards granted under the Stoneridge, Inc. 2016 Long-Term Incentive Plan (the “LTIP”), only after the effective date of this Amendment as described herein.
WHEREAS, the current LTIP, as previously approved by the Company’s Board of Directors and the Company’s shareholders, authorizes the issuance of 1,800,000 Company Common Shares under the LTIP;
WHEREAS, it is the desire of the Company to amend the LTIP, effective as of the date on which the Company’s shareholders approve this Amendment, to increase the maximum number of Common Shares that may be issued and available for Awards under the LTIP; and
WHEREAS, the Board approved the Amendment on March 10, 2020, subject to approval by the Company’s shareholders.
NOW, THEREFORE, effective as of the date on which this Amendment is approved by the Company’s shareholders, the LTIP is amended as follows:
1.
Amendment to Section 3(a) of the LTIP.
Section 3(a) of the LTIP is hereby amended and restated in its entirety as follows:
“Aggregate Shares Subject to the Plan. Subject to adjustment as provided in Section 3(c), the total number of Shares reserved and available for Awards under the Plan is 2,900,000, pursuant to which the maximum number of Shares which may be issued subject to Incentive Stock Options is 250,000. Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares or treasury shares.”
2.
Amendment to Section 18 of the LTIP.
Section 18 of the LTIP is hereby amended and restated in its entirety as follows:
This 2016 Long-Term Incentive Plan was adopted by the Board of Directors on March 28, 2016 and approved the Company’s shareholders on May 10, 2016 in accordance with applicable law and the listing standards of the New York Stock Exchange. On March 10, 2020, the Board of Directors approved an amendment to the 2016 Long-Term Incentive Plan to increase the number of Shares available for issuance and Awards thereunder by 1,100,000 Shares bringing the total to 2,900,000 Shares. The March 10, 2020 amendment is subject to the approval by the holders of the Company’s outstanding Shares, in accordance with applicable law and the listing standards of the New York Stock Exchange. This 2016 Long-Term Incentive Plan, as amended, will become effective on the date of such shareholder approval.”
3.
Miscellaneous.
(a)
Except as amended by this Amendment, the LTIP shall remain in full force and effect.
(b)
Capitalized terms used but not defined in this Amendment have the respective meanings ascribed thereto in the LTIP.

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