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 No. )
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SPX Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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13320-A Ballantyne Corporate Place
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Fellow Stockholders:
On behalf of the Board of Directors, we invite you to attend the SPX Corporation 20172020 Annual Meeting of Stockholders on May 8, 2017,14, 2020, at 8:00 a.m. (Eastern Time), at the SPX Building, 13320 Ballantyne Corporate Place, Charlotte, North Carolina 28277.. This year’s meeting will be held by a virtual format, conducted via live webcast.
Significant AccomplishmentsAnother Milestone Year in 20162019
SPX had another milestone year in 2019. Following a solid prior year performance, we significantly exceeded our initial financial targets for 2019. We hope you will join usgrew adjusted earnings per share* by 22%, and cash generation from our core operations exceeded our adjusted net income for the third year in celebratinga row. Our project work in South Africa reached substantial completion; and, while disputes remain, we successfully achieved multipleend-of-project claims resolutions that reduced future risk.
Throughout the tremendous successyear, our businesses continued to position SPX for further growth with several new product introductions and channel initiatives that SPX Corporation has enjoyedbroadened our sales opportunities. We successfully completed three highly strategic acquisitions that accelerated and expanded our market opportunity; and, we continued to integrate acquisitions from the prior year. We also added several new leaders and expanded our board to ensure we have the right experience and expertise to keep our value creation journey moving forward.
Positioned to Continue Growth and Value Creation
The actions we have taken over the past year. 2016 markedfew years have positioned SPX for sustainable earnings growth and value creation; and we see multiple opportunities to further broaden this potential. We are making investments to standardize best practices for continuous operational improvement throughout the first full year of operations as the “new” SPXcompany, and was a transformative year for our company. We have accomplished many of the goals we outlinedto leverage technology to facilitate engagement and education in the value creation roadmap we presentedcustomer decision-making process. We also continue to investors immediately prior to the spin-off of SPX FLOW, Inc., in September 2015. SPX is now a stronger and more profitable company, which is reflected in the significant stockholder return we have delivered over the past year.
In our two growth platforms, HVAC and Detection & Measurement, we have seen the introduction of new products and expansion into new channels. We have also experienced margin expansion in the HVAC segment andinvest in our Transformer business. Furthermore,employees by launching education and development initiatives to ensure that the next generation of leaders has the skills to execute our vision and strategy effectively.
While the COVID-19 virus has created current economic uncertainty, we have significantly reduced our exposureare well positioned financially with a strong balance sheet and ample liquidity to support the power generation end marketcompany through the sales of the Global Dry Cooling and European Power Generation businesses. In addition to eliminating the ongoing earnings and liquidity implications, these disposals have allowed us to significantly change the business model and risk profile of SPX.
Introducing the Engineered Solutions Segment
In recognition of this shift in our end market exposureuncertain time as well as for further value creation initiatives. We also have a solid pipeline of prospects to strengthen our focus on engineered solutions for gridposition and process cooling applications, we have changed the name ofextend our Power segment to “Engineered Solutions.”
Enhancing our Focus on Growth and Operational Excellence
We are now positioned to pivot our focus towards growth opportunities. As we presented at our March 6, 2017 Investor Day, we believe that we will deliver significant organic and inorganic growth over the next few years. We expect to do this by leveraging our foundation of established brands and channels; strong technology and innovation; leading positions in growth markets; and large installed base, as well as through the implementation of the SPX Business System and a disciplined approach to identifying, executing, and integrating high-quality acquisitions inopportunities throughout our HVAC and Detection & Measurement segments. platforms.
Our Investor Day Presentation is availableteam’s achievements during 2019 were impressive and enabled us to enter this year a stronger and more profitable company. As we progress throughout this year, we are focused on broadening our website (www.spx.com), undermarket coverage within the heading “Investor Relations”—“Webcastskey growth areas of our portfolio, and Presentations.”
As you can see, the changes thaton extending our platforms into attractive adjacencies where we believe we have made over the past year have positioned SPX to pursue the growth opportunities aheada strategic advantage. Our goals for 2020 reflect a high level of us. We are proud ofexpectations for our team, and our commitment to delivering the companyhigh level of performance that we are building together.investors have come to expect from our company.
Meeting Attendance and Voting
All SPX stockholders of record at the close of business on March 13, 2017,19, 2020, are welcomeentitled to attendvote on the Annual Meeting. Whether or not you plan to attend, it is important that your shares are representedmatters listed at the Annual Meeting.To ensure that youyour shares will be represented, we ask you to vote by telephone, mail, or over the internet as soon as possible.
For stockholders planning to attend this year’s meeting, we and the other members of your Board of Directors look forward to personally greeting you. On behalf of the Board of Directors and our leadership team, we would like to express our appreciation for your continued interest in the business of SPX.
Sincerely,
Patrick O’Leary Chairman of the Board of Directors | Gene Lowe President and Chief Executive Officer |
*Non-GAAP financial measure. Reconciliations of amounts presented asnon-GAAP financial measures with the amounts of the most comparable measures calculated and presented in accordance with GAAP, and other important information regardingnon-GAAP financial measures, are presented in the appendix of this Proxy Statement.
SPX CORPORATION
13320-A Ballantyne Corporate Place
Charlotte, North Carolina 28277
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Monday,Thursday, May 8, 201714, 2020
8:00 a.m. (Eastern Time)
SPX Building, 13320 Ballantyne Corporate Place, Charlotte, North Carolina 28277Virtually via live webcast at www.meetingcenter.io/235805813.
The password for the meeting is SPXC2020. There is no physical location for the Annual Meeting. Further information regarding attendance, including how to access the virtual meeting, is set forth in the “Question and Answers” section of this proxy statement.
Agenda
The principal business of the Annual Meeting will be to:
1. | Elect the |
2. | Approve our named executive officers’ compensation, on anon-binding advisory basis; |
3. |
Ratify our Audit Committee’s appointment of our independent registered public accounting firm for |
Transact any other business properly brought before the meeting or any adjournment thereof. |
Record Date
March 13, 201719, 2020
You may vote atduring the virtual Annual Meeting in person or by proxy if you were a stockholder of record at the close of business on March 13, 2017.19, 2020. You may revoke your proxy at any time prior to its exercise at the Annual Meeting.
Proxy Materials
This year, we are again electronically disseminating Annual Meeting materials to some of our stockholders, as permitted under the “Notice and Access” rules approved by the Securities and Exchange Commission. Stockholders for whom Notice and Access applies will receive a Notice of Internet Availability of Proxy Materials containing instructions on how to access Annual Meeting materials via the internet. The Notice also provides instructions on how to obtain paper copies if preferred.
By Order of the Board of Directors,
John W. Nurkin
Vice President, SecretaryGeneral Counsel and General CounselSecretary
Approximate Date of Mailing of Proxy Materials or
Notice of Internet Availability:
March 27, 2017April 2, 2020
SPX CORPORATION
Proxy Statement
Annual Meeting of Stockholders
The Annual Meeting of our stockholders will be held at 8:00 a.m. (Eastern Time), on Monday,Thursday, May 8, 2017, at14, 2020, virtually on the SPX Building, 13320 Ballantyne Corporate Place, Charlotte, North Carolina 28277.internet.
You will be able to attend the Annual Meeting, vote and submit questions during the meeting by visiting www.meetingcenter.io/235805813.
We are furnishing this Proxy Statement to our stockholders of record as of March 19, 2020 in connection with the solicitation of proxies by our Board of Directors for the 20172020 Annual Meeting of Stockholders on that date and any adjournment or postponement of the meeting.
Our 20162019 Annual Report on Form 10-K,to Stockholders, without exhibits, accompanies this Proxy Statement. You may obtain a copy of the exhibits described in the Form10-K for a fee upon request. Please contact Paul Clegg, Vice President, Finance and Investor Relations and Communications, SPX Corporation,13320-A Ballantyne Corporate Place, Charlotte, North Carolina 28277.
Important Notice Regarding the Availability of Proxy Materials
for the 20172020 Annual Meeting of Stockholders:
The Notice of Annual Meeting, Proxy Statement, and our 20162019 Annual Report
to Stockholders are available electronically at
www.envisionreports.com/SPXC (for stockholders of record) or
www.edocumentview.com/SPXC (for all other stockholders).
Certain statements in this Proxy Statement are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. The words “believe,” “expect,” “anticipate,” “project” and similar expressions identify forward-looking statements. Please read these forward-looking statements in conjunction with the company’s annual report on Form10-K included in the accompanying 2019 Annual Report. These materials identify important risk factors and other uncertainties that could cause actual results to differ from those contained in the forward-looking statements. Actual results may differ materially from these statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. In addition, estimates of future operating results are based on the company’s current complement of businesses, which is subject to change.
MEETING AND VOTING HIGHLIGHTS | i | ||||||
CORPORATE GOVERNANCE | 1 | ||||||
DIRECTOR COMPENSATION | 8 | ||||||
9 | |||||||
PROPOSAL 1: ELECTION OF DIRECTORS | 10 | ||||||
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OWNERSHIP OF COMMON STOCK | |||||||
EXECUTIVE COMPENSATION | |||||||
30 | |||||||
31 | |||||||
32 | |||||||
32 | |||||||
PROPOSAL 2: APPROVAL OF NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON ANON-BINDING ADVISORY BASIS(“SAY-ON-PAY”) | |||||||
43 | |||||||
AUDIT MATTERS | 44 | ||||||
44 | |||||||
45 | |||||||
45 | |||||||
45 | |||||||
PROPOSAL | 46 | ||||||
QUESTIONS AND ANSWERS | 47 | ||||||
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48 | |||||||
50 | |||||||
APPENDIX A – RECONCILIATION OF GAAP ANDNON-GAAP FINANCIAL MEASURES | A-1 |
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This summary highlights information about SPX Corporation (“Company,” “SPX,” “we,” “our,” or “us”), vote recommendations of our Board of Directors (“Board”), and certain information contained elsewhere in this proxy statement (“Proxy Statement”) for the Company’s 20172020 Annual Meeting of Stockholders (the “Annual(“Annual Meeting” or the “meeting”). This summary does not contain all of the information that you should consider in voting your shares. YouBefore voting, you should carefully read the entire Proxy Statement and our 20162019 Annual Report on Form 10-K carefully before voting.to Stockholders.
As you read this Proxy Statement, keep in mind that 2016 was a transformative year for SPX. In 2015, we completed the spin-off of the Flow business (the “Spin-Off”) into a newly-formed, independent, publicly-owned company called SPX FLOW, Inc. (“FLOW”). The Spin-Off became effective on September 26, 2015, at which time our executive officers and directors assumed their new roles. As a result, 2016 was our first full year as the “new” SPX.
Annual Meeting
Time and Date: | 8:00 a.m. (Eastern Time), | |
Place: | Virtually via the internet at: | |
www.meetingcenter.io/235805813 | ||
Meeting Password: SPXC2020 | ||
Record Date: | March |
Purpose of Meeting and Board Recommendations
Proposals | Board Vote Recommendation | Votes Required for Approval | Page Reference | |||||
Proposal 1: | Election of Directors | FOR each nominee | Majority of votes cast | 10 | ||||
Proposal 2: | Approval of Named Executive Officers’ Compensation, on aNon-binding Advisory Basis(“Say-on-Pay”) | FOR | Majority of votes cast | |||||
| 43 | |||||||
Proposal | Ratification of Appointment of Independent Registered Public Accounting Firm | FOR | Majority of shares present or represented by proxy and entitled to vote | 46 |
The Board strongly encourages you to exercise your right to vote on these matters. Your vote is important.
Who May Vote
Holders of SPX common stock whose shares are recorded directly in their names in our stock register (“stockholders of record”) at the close of business on March 13, 2017,19, 2020, may vote their shares on the matters to be acted upon at the meeting. Stockholders who hold shares of our common stock in “street name,” that is, through an account with a broker, bank, trustee, or other holder of record, as of such date may direct the holder of record how to vote their shares at the meeting by following the instructions that they receive from the holder of record.
A list of stockholders entitled to vote at the meeting will be available for examination at our principal executive offices located at13320-A Ballantyne Corporate Place, Charlotte, North Carolina 28277, for a period of at least ten days prior to the Annual Meeting and during the meeting. The stock register will not be closed between the record date and the date of the meeting.
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How to Vote
How to Vote | Stockholders of Record* | Street Name Holders† | ||||
MOBILE DEVICE | Scan the QR Code to vote using your mobile device: |
| Refer to voting instruction form. | |||
INTERNET | Visit the applicable voting website: | www.envisionreports.com/ SPXC | www.proxyvote.com | |||
TELEPHONE | Within the United States, U.S. Territories, and Canada, on touch-tone telephone, call toll free: | 1-800-652-VOTE (8683) | Refer to voting instruction form. | |||
Complete, sign, and mail your proxy card or voting instruction form in the self-addressed envelope provided. | ||||||
MEETING | For instructions on attending and voting during the Annual Meeting |
* | You hold shares registered in your name with SPX’s transfer agent, Computershare, or you are an Employee Benefit Plan Participant. |
† | You hold shares held through a broker, bank, trustee, or other holder of record. |
To allow sufficient time for voting, your voting instructions must be received by 11:59 p.m. (Eastern Time) on May 7, 2017,13, 2020, if you are not voting in person at the meeting.
Admission to Meeting
If you areThe Annual Meeting will be held solely as a stockholder of record,virtual meeting live via the Internet. You will be able to attend the Annual Meeting via live webcast by visiting the Company’s virtual meeting website (www.meetingcenter.io/235805813) at the meeting time. Upon visiting the meeting website, you will needbe prompted to bring with you to the meeting either theenter your 15-digit control number provided on your Notice of Internet Availability of Proxy Materials or any proxy card that is sent to you. Otherwise, you will be admitted only upon other verification of record ownership at the admission counter.received with your proxy materials.
If you ownhold your shares held in street name, bring within order to join the virtual meeting as a stockholder and be able to vote and submit questions during the Annual Meeting, you will need to the meeting either (i) the Notice of Internet Availability of Proxy Materials or any voting instruction form that is sent to you, or (ii)contact your most recent brokerage statement or a letter from yourbroker, bank broker, or other holder of record indicating that you beneficially owned shares of our common stock on March 13, 2017. We can use that to verifyreceive proof of your beneficial ownership and submit such proof, along with your name and email information, to Computershare in advance of common stock and admitthe Annual Meeting no later than 5:00 pm ET on May 8, 2020, which may be submitted via email to legalproxy@computershare.com, or via mail to Computershare, SPX Corporation Legal Proxy, P.O. Box 43001, Providence, Rhode Island 02940-3001. Upon receipt of such beneficial ownership proof, Computershare will then register you to the meeting.If you intend to votefor attendance at the virtual meeting and provide you also will needwith registration information needed to bring tojoin the meeting as a legal proxy from your bank, broker, or other holder of record that authorizes you to vote the shares that the holder of record holds for you in its name.stockholder.
Additionally, all persons will need to bring a valid government-issued photo ID to gain admission to the meeting.
Additional Information
More detailed information about the Annual Meeting and voting can be found in “Questions and Answers” beginning on page 47.
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CODE OF ETHICS AND BUSINESS CONDUCT
We have adopted a Code of Ethics and Business Conduct that applies to all our directors, officers, and employees, including our CEOchief executive officer and senior financial and accounting officers. Our Code of Ethics and Business Conduct requires each director, officer, and employee to avoid conflicts of interest,interest; comply with all laws and other legal requirements,requirements; conduct business in an honest and ethical manner,manner; and otherwise act with integrity and in the best interest of our Company and our stockholders. In addition, our Code of Ethics and Business Conduct acknowledges special ethical obligations for financial reporting. The Code of Business Conduct also meets the requirements of a code of business conduct and ethics under the listing standards of the New York Stock Exchange (the “NYSE”) and the requirement of a “Code of Ethics” as defined in the rules of the Securities and Exchange Commission (the “SEC”). We maintain a current copy of our Code of Ethics and Business Conduct, and we will promptly post any amendments to or waivers of our Code of Ethics and Business Conduct regarding our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on our website (www.spx.com) under the heading “Investor Relations—Corporate Governance—Commitment to Ethics and Compliance.”
CORPORATE GOVERNANCE GUIDELINES
As part of its ongoing commitment to good corporate governance, the Board has codified its corporate governance practices into a set of Corporate Governance Guidelines. These guidelines assist the Board in the exercise of its responsibilities and may be amended by the Board from time to time. Our Corporate Governance Guidelines comply with the applicable requirements of the listing standards of the NYSE and are available on our website (www.spx.com) under the heading “Investor Relations—Corporate Governance.”
DIRECTOR INDEPENDENCE
Our Corporate Governance Guidelines require that a substantial majority of the Board meetsmeet the independence requirements of the listing standards of the NYSE.New York Stock Exchange (“NYSE”). At least annually, our Board reviews whether each of our directors is independent. The Board has adopted categorical Independence Standards to help guide it in this process. Our Independence Standards are available on our website (www.spx.com) under the heading “Investor Relations—Corporate Governance.” Members of the Audit Committee, Compensation Committee, and Nominating and Governance Committee must meet all applicable independence tests of the NYSE and SEC. Based on its most recent annual review, the Board has concluded that Mr.Patrick J. O’Leary, Mr.Ricky D. Puckett, Mr.David A. Roberts, Dr.Meenal A. Sethna, Ruth G. Shaw, Robert B. Toth, and Ms.Tana L. Utley are independent, as defined in our Independence Standards and the listing standards of the NYSE. The Board has concluded that Mr.Eugene J. Lowe, SPX’s President and Chief Executive Officer (“CEO”), is not independent as defined in our Independence Standards and the listing standards of the NYSE.
Thenon-employee members of the Board meet regularly in executive session without management. In addition, thenon-employee members of the Board meet in executive session on a regular basis with the CEO and such other management as the Board deems appropriate.
CHARITABLE CONTRIBUTIONS
It is the policy of the Board that no officer or director shall solicit contributions for charities from other officers or directors or directly from SPX if the director or officer soliciting the contributions personally controls the charity. In addition, no officer or director shall solicit contributions from other officers or directors for charities controlled by SPX.
From time to time, SPX may make contributions to charitable organizations for which a member of our Board or one of our executive officers serves as a director or officer. In the past three fiscal years, however, the amount of any of these contributions in any single fiscal year has not exceeded the greater of (a)(1) $1 million or (b)(2) 2% of the charitable organization’s consolidated gross revenues.
RISK OVERSIGHT
The Board exercises overall risk oversightgovernance at SPX. Committees of the Board takeSPX, with committees taking the lead in discrete areas of risk oversight when appropriate.oversight. For example, the Audit Committee is primarily responsible for risk oversight relating to financial statements,statements; the Compensation Committee is primarily responsible for risk oversight relating to executive compensation,compensation; and the Nominating and Governance Committee is primarily responsible for risk oversight relating to corporate governance. Committees report to the Board on risk management matters.
Management presents to the Audit Committee its view of the topprincipal risks facing SPX in a dedicated “enterprise risk management” presentation at least once a year. Matters such as risk tolerance and management of risk are also
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CORPORATE GOVERNANCE
discussed at this meeting. Further, management periodically reviews with the Audit Committee the Company’s major risk exposures, identified through the enterprise risk management process, as well as the steps management has taken to monitor and control such exposures.
We conduct an annualin-depth review of the risks associated with our incentive-based agreements and practices, and management presents to the Compensation Committee its view on such risks. In 2019, we again determined that the risks associated with these arrangements are appropriate. See “Risk Analysis,” on page 30, for further discussion.
In addition, risk isthe Board explicitly addressedaddresses risk in a wide range of Board discussions, including those relating to segment or business unit activities; specific corporate functions (such as treasury, intellectual property, tax, capital allocation, legal, etc.); legacy asbestos liabilities; cybersecurity; claims related to our South African operations, ongoing litigation, and consideration of extraordinary transactions. As part ofIn addition to the Board’s active role in these discussions, our directors ask questions, offer insights, and challenge management to continually improve its risk assessment and management. Thethe Board has full access to management, as well as the ability to engage advisors, in order to assist it in its risk oversight role.
We conductSTRATEGIC PLANNING
Our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our Company. Our Board has been instrumental in determining our next steps as we focus on growth with an annual in-depth reviewemphasis on strengthening our current complement of businesses.
• | Constant Focus on Strategy: Throughout the year, our Board provides guidance to management on strategy and helps to refine business plans to implement the strategy. |
• | Detailed Annual Review of Strategy: Each year, typically during the third quarter, the Board holds an extensive meeting with senior management dedicated to discussing and reviewing our long-term business plans and overall corporate strategy. As part of this meeting, our CEO leads a discussion of potential growth opportunities, key risks to the plans and strategy, and mitigation plans and activities. |
Furthermore, in setting our business strategy, the risks associated with our incentive-based agreementsBoard plays a critical role in determining the types and practices. In 2016, we again determined thatappropriate levels of risk undertaken by the risks were appropriate.
See “Risk Analysis,” on page 30, for further discussion.Company.
COMMUNICATIONS WITH DIRECTORS
Interested parties may communicate with any of ournon-employee directors by writing to the director in care of our Corporate Secretary at our address shown on the coverNotice of Annual Meeting of Stockholders accompanying this Proxy Statement. In accordance with the policy adopted by ournon-employee directors, our Corporate Secretary will promptly relay to the addressee all communications that he determines require prompt attention by anon-employee director and will regularly provide thenon-employee directors with a summary of all substantive communications.
BOARDDIRECTOR NOMINEES, QUALIFICATIONS, AND DIVERSITY
The Nominating and Governance Committee is responsible for proposing director nominees and will consider director nominee recommendations offered by stockholders in accordance with ourBy-laws.The Nominating and Governance Committee selects individuals as director nominees based on their businessthe following:
Business and professional accomplishments; integrity; demonstrated
Integrity;
Demonstrated ability to make independent analytical inquiries; ability
Ability to understand our business; absencebusinesses;
Absence of conflicts of interest; and willingness
Willingness to devote the necessary time to Board duties. Neitherduties; and
Alignment of skills with those identified by the Board as desirable for the advancement of the Company; for more details on such identified areas, see our skills matrix under “Director and Nominee Skills and Experience” on page 15.
The Board and the Nominating and Governance Committee require each director to have a proven record of success and leadership. In order to maintain appropriate flexibility to adjust to evolving needs, neither the Board nor the Nominating and Governance Committee has set minimum requirements with respect to age, education, or years of business experience or
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CORPORATE GOVERNANCE
has setdesignated specific expertise required skill sets for directors, but each does require each director to have a proven record of success and leadership. Thedirectors. Rather, the Nominating and Governance Committee seeks to structure the Board suchso that it consists of a diverse group of individuals, each with a unique combination of skills, experience, and background. The Nominating and Governance Committee has no set diversity policy or targets, but places what it believes to be appropriate emphasis on certain skills, experience, and background that it determines adds, or would add, value to our Board. Knowledge of our industryindustries and strategic perspective, as well as financial expertise and experience on other boards,with business development, mergers and acquisitions, are examples of attributes that our Board and the Nominating and Governance Committee consider to be key.important. The Nominating and Governance Committee also considers effective interaction among Board members and between the Board and management to be crucial factors in considering individuals for nomination.
We believe that each director should bring a wealth of experience and talent, and a diverse perspective that, individually and in the aggregate, adds value to our Company. As our Corporate Governance Guidelines state, our Nominating and Governance Committee, and ultimately our Board, selects individuals as director nominees based on the totality of their business and professional accomplishments; integrity; demonstrated ability to make independent analytical inquiries; ability to understand our business; absence of conflicts of interest; and willingness to devote the necessary time to Board duties. For a better understanding of the qualifications of each of our directors, we encourage you to read their biographies, beginning on page 10, as well as other publicly available documents discussing their careers and experiences.
DIRECTOR NOMINEES
The Nominating and Governance Committee considers the criteria listed above at least each time the director is responsiblere-nominated for proposing director nominees and will consider director nominee recommendations offered by stockholders in accordance with our by-laws.
Board membership. At such times as the Board and the Nominating and Governance Committee determine there is a need to add or replace a director, the Nominating and Governance Committee identifies director candidates through references from its members, other directors, management, or outside search firms, if appropriate.
In considering individuals for nomination, the The Nominating and Governance Committee consults with our Chairman and our President and CEO. A director’s qualifications in meeting the criteria discussed above under “Board Qualifications and Diversity” are considered at least each time the director is re-nominated for Board membership. The Nominating and
CORPORATE GOVERNANCE
Governance Committee applies the same process and standards to the evaluation of each potential director nominee, regardless of whether he or she is recommended by one or more stockholders or is identified by some other method.
Any stockholder who wishes to recommend an individual for consideration by the Nominating and Governance Committee should provide written notice of the recommendation to our Corporate Secretary at our address on the cover of this Proxy Statement. Such notice must be accompanied by certain disclosures, including written information about the recommended nominee’s business experience and background, and documentation required under ourBy-laws for stockholder nominations of directors, as well as a consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, that he or she will serve as a director. In addition, any director nominee must provide information we may reasonably request in order for us to determine the eligibility of such nominee to serve as an independent director.
Once the Nominating and Governance Committee identifies a director candidate, directors and members of management interview the candidate. Following that process, the Nominating and Governance Committee and the Board determine whether to nominate the candidate for election at an annual meeting of stockholders or, if applicable, to appoint the candidate as a director. Any such nomination or appointment is subject to acceptance by the candidate. Our by-lawsBy-laws require that any director appointed to the Board other than at an annual meeting of stockholders be submitted for election by our stockholders at the next annual meeting.
If you wish to recommend a nominee for director for the 2018 Annual Meeting, our Corporate Secretary must receive your written nomination on or before January 8, 2018. You should submit your proposal to our Corporate Secretary at our address on the cover of this Proxy Statement. As detailed in our by-laws, for a nomination to be properly brought before an annual meeting, your notice of nomination must include the following: (1) your name and address, as well as the name and address of any beneficial owner of SPX stock owned beneficially and of record by you and any beneficial owner as of the date of the notice, and the name and address of the nominee; (2) the class and number of the shares (which information must be supplemented as of the record date); (3) a description of certain agreements, arrangements, or understandings entered into by you or any beneficial owner with respect to the shares (which information must be supplemented as of the record date); (4) a statement that you are a record holder of SPX shares entitled to vote at the meeting and that you plan to appear in person or by proxy at the meeting to make the nomination; (5) a description of all arrangements or understandings between you and any other persons pursuant to which you are making the nomination; (6) any other information regarding you, any beneficial owner, or the nominee that the rules of the SEC require to be included in a proxy statement; (7) the nominee’s agreement to serve as a director if elected; and (8) a statement as to whether each nominee, if elected, intends to tender, promptly following his or her election or re-election, an irrevocable resignation effective upon his or her failure to receive the required vote for re-election at the next meeting at which he or she would face re-election and the acceptance of such resignation by the Board, in accordance with our Corporate Governance Guidelines. In addition, any director nominee must provide information we may reasonably request in order for us to determine the eligibility of such nominee to serve as an independent director.
DIRECTOR ELECTION
In uncontested elections, we elect directors by majority vote. Under this majority votevoting standard each director must be elected by a majority of the votes cast with respect to that director, meaning that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. In a contested election, directors are elected by a plurality of the votes represented in person or by proxy at the meeting. An election is contested if the number of nominees exceeds the number of directors to be elected. Whether or not an election is contested is determined ten days in advance of the date we file our definitive proxy statement with the SEC.Securities and Exchange Commission (“SEC”). This year’s election is uncontested. Accordingly, the majority vote standard will apply.
If a nominee already serving as a director is not elected at an annual meeting, then the law of the State of Delaware (SPX’s state of organization) provides that the director will continue to serve on the Board as a “holdover director” until his or her successor is elected. Our Nominating and Governance Committee, however, has established procedures in our Corporate Governance Guidelines requiring directors to tender to the Board advance resignations. As set forth in our Corporate Governance Guidelines, theThe Board will nominate for election orre-election as a director only those candidates who agree to tender, promptly following each annual meeting of stockholders at which they are elected or re-electedsubject tore-election as a director, irrevocable resignations that will be effective only if (1) the director fails to receive a sufficient number of votes forre-election at the next annual meeting of stockholders at which he or she facesre-election, and (2) the Board accepts the resignation. In addition, the Board will only fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors in accordance with this provision.
In the event a resignation is triggered as a result of a director not receiving a majority vote,failing to receive sufficient votes, the Nominating and Governance Committee will consider the resignation and make a recommendation to the Board on whether to accept or reject it, or whether other action should be taken. The Board will consider the Nominating and Governance Committee’s
2020 PROXY STATEMENT | 3 |
CORPORATE GOVERNANCE
recommendation and publicly disclose its decision and the rationale behind it in a Current Report on Form8-K filed with the SEC within 90 days from the date of certification of the election results. At the 2016 Annual Meeting, each director standing for election received a majority of the votes cast for his or her election or re-election.
CORPORATE GOVERNANCE
ATTENDANCE AT ANNUAL MEETING
It is our policy to invite all members of our Board to attend our Annual Meeting. While their attendance is not required, eachall but one of our directors serving at the time of our last Annual Meeting attended that meeting. We anticipate all our directors will attend the 2017 Annual Meeting.
INDEPENDENT COMPENSATION CONSULTANT
The Compensation Committee has retained Pearl Meyer as its sole independent compensation consultant. Pearl Meyer does not provide any services to our Company other than advice to and services for the Compensation Committee relating to compensation of all executives and the Nominating and Governance Committee relating to compensation of ournon-employee directors. The independent compensation consultant may provide other consulting services to SPX, on a limited basis and only with approval from the Compensation Committee or the Nominating and Governance Committee. The Compensation Committee reviews services provided by its independent compensation consultant on at least an annual basis.
The independent compensation consultant:
Assesses data relating to executive pay levels and structure;
Reviews design and recommendations for annual and long-term incentive plans;
Conducts risk assessment of the Company’s executive incentive plans;
Works with management onto develop management’s recommendations to the appropriate committee on compensation amounts and structure for all directors and executive officers and directors other than the President and CEO;
Presents to the Compensation Committee recommendations on compensation amounts and structure for the President and CEO;
Presents to the Nominating and Governance Committee recommendations on compensation amounts and structure for thenon-employee directors;
Reviews and commentsprovides analysis to the Compensation Committee on management’s recommendations relating to executive officer compensation;
Recommends the list of peer companies against which we benchmark our executive officer and director compensation for approval by the Compensation Committee;
Reviews and supports preparation of compensation-related proxy statement disclosures; and
Consults on CEO Pay Ratio process and disclosure; and
Advises the relevant committee on regulatory, best practice,market practices, and other trends and developments in the area of executive and director compensation.
The Compensation Committee has directed the independent compensation consultant to collaborate with management, including our human resources function, to obtain data, clarify information, and review preliminary recommendations prior to the time they are shared with the relevant committee.
The Compensation Committee has considered the independence of Pearl Meyer in light of SEC rules, NYSE listing standards, and the requirements of the Compensation Committee charter.Charter. The Compensation Committee requested and received a letter from Pearl Meyer addressing relationships with and the independence of Pearl Meyer and the Pearl Meyer senior advisor involved in the engagement, includingengagement. In addition to this information, the Compensation Committee noted the following factors: (1) other services provided to us; (2) fees paid by us as a percentage of Pearl Meyer’s total revenue; (3) policies or procedures maintained by Pearl Meyer that are designed to prevent a conflict of interest; (4) any business or personal relationships between the Pearl Meyer senior advisor and any member of the Compensation Committee; (5) any SPX stock owned by the Pearl Meyer senior advisor; and (6) any business or personal relationships between our executive officers and the Pearl Meyer senior advisor. The Compensation Committee discussed these considerations and concluded that the work performed by Pearl Meyer and Pearl Meyer’s senior advisor involved in the engagement did not raise any conflict of interest and that Pearl Meyer provides objective and competent advice. The following protocols are designed to help ensure objectivity:
The consultant reports directly to the Compensation Committee or, in the case of matters relating tonon-employee director compensation, to the Nominating and Governance Committee;
Only the Compensation Committee and the Nominating and Governance Committee have the authority to retain or terminate the consultant with respect to services provided to the relevant committee; and
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CORPORATE GOVERNANCE
The consultant meets as needed with committee members, without the presence of management.
The Compensation Committee concluded that the work performed by Pearl Meyer and Pearl Meyer’s senior advisor involved in the engagement did not raise any conflict of interest and that each was independent.
CONSIDERATION OF RELATED-PARTY TRANSACTIONS
Pursuant to its charter and a written related-party policy, the Audit Committee is charged with reviewing and approving any related-party transactions. A related-party transaction is a transaction involving SPX and any of the following persons: a director, director nominee, or executive officer of SPX; a holder of more than 5% of SPX common stock; or an immediate family member or person sharing the household of any of these persons. When considering a transaction, the Audit Committee is required to review all relevant factors, including whether the transaction is in the best interest of our Company; our Company’s rationale for entering into the transaction; alternatives to the transaction; whether the transaction is on terms at least as fair to our Company as would be the case were the transaction entered into with a third party; potential for an actual or apparent conflict of interest; and the extent of the related party’s interest in the transaction. Our legal staff is primarily responsible for the development and implementation of procedures and controls to obtain information from our directors and officers relating to related-party transactions and then for determining, based on the facts and circumstances, whether we or a related party has a direct or indirect material interest in the transaction.
In the course of the Board’s determination regarding the independence of each of the non-employee directors, the Nominating and Governance Committee and Audit Committee considered any relevant transactions, relationships, or arrangements. No member of our Board or management was aware of any transactions that would require disclosure.
BOARD LEADERSHIP STRUCTURE
Our governance documents provide the Board with flexibility to select the leadership structure that is most appropriate for the Company and its stockholders in consideration of then-current circumstances. The Board regularly evaluates the Company’s leadership structure and has concluded that the Company and its stockholders are best served by not having a formal policy regarding whether the same individual should serve as both Chairman of the Board and CEO. This approach allows the Board to elect the most qualified director as Chairman of the Board while also maintaining the ability to combine or separate the Chairman of the Board and CEO roles when necessary or appropriate. For example, as of September 26, 2015, we separatedWe currently separate the positions of Chairman of the Board and CEO in light of the fact that our then-elected CEO was both new to the role and had not previously served on a public company board of directors.CEO.
Currently, Eugene J. Lowe, III, serves as our President and CEO, a position he has held since September 26, 2015. In this role, Mr. Lowe is responsible for managing theday-to-day operations of the Company and for planning, formulating, and coordinating the development and execution of our corporate strategy, policies, goals, and objectives. Mr. Lowe is accountable for Company performance and reports directly to the Board.
Effective September 26, 2015, Patrick J. O’Leary was appointed to servehas served as ournon-employee Chairman of the Board.Board since September 26, 2015. In this role, Mr. O’Leary’s responsibilities include the following:
Serving as a resource to the President and CEO in connection with strategic planning and other matters of strategic importance to the Company;
Receiving reports from the President and CEO, organizing and facilitating the President and CEO evaluation process, and providing ongoing, constructive feedback to the President and CEO;
Consulting with the President and CEO regarding the Company’s relations and communications with stockholders of the Company, analysts, and the investor community;
Chairing meetings of the Board;
Setting the schedule and agenda for Board meetings in consultation with the President and CEO;
Determining the information that is sent to the Board in consultation with the President and CEO;
Presiding over the executive sessions and other meetings of thenon-employee directors; and
Communicating the results of meetings of thenon-employee directors to the President and CEO and other members of management, as appropriate.
InOur Corporate Governance Guidelines provide that in the event the Board determines that the same individual should again serve as both Chairman of the Board and CEO, the Board will establishappoint an independent director to serve as Lead Director position.Director. In such case,that circumstance, the Lead Director would be elected by and fromserve as the principal liaison between the independent directors and would have clearly delineated duties. These duties, as set forththe Chairman and CEO; chair meetings ofnon-employee directors; develop the Board’s agenda in our Corporate Governance Guidelines,collaboration with the Chairman and CEO; and review and advise on the quality of the information provided to the Board.
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CORPORATE GOVERNANCE
would include acting as principal liaison between the independent directors and the Chairman and CEO, chairing meetings of independent directors, developing the Board’s agendas in collaboration with the Chairman and CEO, and reviewing and advising on the quality of the information provided to the Board.
The small size of our Board and the relationship between management andnon-employee directors put each director in a position to influence agendas, the flow of information, and other matters. Ournon-employee directors meet regularly in private session, without management, as part of our Board meetings and can also call additional meetings of thenon-employee directors at their discretion.
The Board believes that its current leadership structure provides an appropriate balance among strategy development, operational execution, and independent oversight, and that this structure is thereforecurrently in the best interests of the Company and its stockholders.
BOARD COMMITTEES
The Board met sixfour times in 2016.2019. The Board currently has a standing Audit Committee, Compensation Committee, and Nominating and Governance Committee. Each director attended at least 75% of the meetings of the Board and of the committees on which he or she served in 2016.2019, during his or her period of service. Each committee has adopted a charter that specifies the composition and responsibilities of the committee. Each committee charter is posted on our website (www.spx.com) under the heading “Investor Relations—Corporate Governance—Board Committees.”
The table below provides 2019 membership and 2016 meeting information for each of the Board committees.
Directors | Audit Committee | Compensation Committee | Nominating and Governance Committee | Audit Committee | Compensation Committee | Nominating and Governance Committee | ||||||
Ricky D. Puckett | Chair | X | X | Chair | X | X | ||||||
David A. Roberts | X | Chair | X | X | Chair | X | ||||||
Meenal A. Sethna | X | |||||||||||
Ruth G. Shaw | X | X | Chair | X | X | Chair | ||||||
Robert B. Toth | X | |||||||||||
Tana L. Utley | X | X | ||||||||||
Number of Meetings | 7 | 6 | 4 | 6 | 5 | 4 |
AUDIT COMMITTEE
Membership
The Board has determined that each member of the Audit Committee is independent in accordance with our Audit Committee charter,Charter, Corporate Governance Guidelines, and Independence Standards, as well as with the rules of the SEC and the listing standards of the NYSE. In addition, the Board has determined that each member of the Audit Committee has a working familiarity with basic finance and accounting practices, including the ability to read and understand financial statements. Finally, the Board has determined that each of Mr. Puckett and Ms. Sethna is an “audit committee financial expert” under the rules of the SEC and has accounting and/or related financial management expertise, as required by the listing standards of the NYSE.
Function
The Audit Committee is responsible for ensuring the integrity of the financial information reported by our Company. The Audit Committee appoints the independent registered public accounting firm, approves the scope of audits performed by it and by the internal audit staff, and reviews the results of those audits. The Audit Committee also meets with management, the Company’s independent registered public accounting firm, and the internal audit staff to review audit andnon-audit results, as well as financial, cybersecurity, accounting, compliance, and internal control matters. In addition, the Board has delegated oversight of the Company’s enterprise risk management program to the Audit Committee.
Additional information on the Audit Committee and its activities is set forth in the “Audit Committee Report” on page 44.
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CORPORATE GOVERNANCE
COMPENSATION COMMITTEE
Membership
The Board has determined that each member of the Compensation Committee is independent in accordance with our Compensation Committee Charter, Corporate Governance Guidelines, and Independence Standards, as well as with the rules of the SEC and the listing standards of the NYSE. In addition, the Board has determined that each member of the Compensation Committee meets the “outside director” and “non-employee“non-employee director” requirements as defined respectively, under Section 162(m)16(a) of the Internal Revenue Code and Section 16 under the Securities Exchange Act of 1934, as amended.
Function
The Compensation Committee sets the compensation for our executive officers, including agreements with our executive officers, equity grants, and other awards, and makes recommendations to the Board on these same matters for our CEO. The Compensation Committee receives input regarding compensation for our executive officers, including proposed compensation, from its independent compensation consultant, as well as from our CEO for his direct reports. The Compensation Committee has delegated to our CEO the authority to issueone-time equity grants of up to $50,000 per individual and $250,000 in the aggregate annually tonon-officer employees.
The Compensation Committee has the authority under its charter to retain, terminate, and set fees and retention terms for suchits independent compensation consultant or such other outside advisors as it deems necessary or appropriate in its sole discretion. The Compensation Committee reviews outside advisorsconsultants and consultantsadvisors on at least an annual basis to determine objectivity and review performance, including a review of the total fees paid to such advisors or consultants. The Compensation Committee has retained Pearl Meyer as its independent compensation consultant.consultants and advisors.
Additional information on the Compensation Committee, its activities, and its relationship with its independent compensation consultant, and on management’s role in setting compensation, is set forth in “Compensation Discussion and Analysis,” beginning on page 18,19, and “Corporate Governance—Independent Compensation Consultant,” beginning on page 4.
NOMINATING AND GOVERNANCE COMMITTEE
Membership
The Board has determined that each member of the Nominating and Governance Committee is independent in accordance with our Nominating and Governance Committee Charter, Corporate Governance Guidelines, and Independence Standards, as well as with the rules of the SEC and the listing standards of the NYSE.
Function
The Nominating and Governance Committee assists the Board in identifying qualified individuals to become Board members and by recommending director nominees to the Board; develops and recommends to the Board our Corporate Governance Guidelines; leads the Board in its annual review of the Board’s performance; evaluates and recommends training topics for directors and the Board; and makes recommendations to the Board regarding the compensation ofnon-employee directors and the assignment of individual directors to various committees. The Nominating and Governance Committee also approves equity awards fornon-employee directors, subject to Board approval.
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Annual Compensation
Our director compensation program includesnon-employee directors receive the following compensation opportunities for our non-employee directors:compensation:
Annual Retainer of Cash | $ | 75,000 | ||
Annual Equity Grant of Time-Vested Restricted Stock | $ | 130,000 | ||
Additional Fees: | ||||
Chairman of the Board | $ | 125,000 | ||
Audit Committee Chair | $ | 20,000 | ||
Compensation Committee Chair | $ | 15,000 | ||
Nominating and Governance Committee Chair | $ | 10,000 |
Annual Cash Retainer | $ | 75,000 | ||
Annual Equity Grant of Restricted Stock Units | $ | 130,000 | ||
Additional Cash Fees: | ||||
Chairman of the Board | $ | 125,000 | ||
Audit Committee Chair | $ | 20,000 | ||
Compensation Committee Chair | $ | 15,000 | ||
Nominating and Governance Committee Chair | $ | 10,000 |
We pay the annual cash retainer and any applicable additional cash fees to ournon-employee directors in equal quarterly installments, paid in arrears. The cash portion of cash compensation for a director who has a partial quarter of service (due to joining or leaving the Board, or beginning or ending service as Chairman or a Committee Chair, during the quarter) ispro-rated. We do not pay meeting fees or additional compensation to directors for special meetings.
The annual equity grant is provided by grants of restricted stock units (“RSU”) is made under the SPX Corporation 2006 Non-Employee Directors’ Stock Incentive Plan (the “2006 Directors’ Plan”) and the SPX Corporation 20022019 Stock Compensation Plan (the “2002“2019 Stock Plan”). We award restricted shares to our non-employee directors based on the grant date valueThe number of the award (calculatedRSUs awarded is calculated by dividing the $130,000 annual equity retainer by the closing price of the Company’s stock on the date of grant).grant and rounding up to a full share. The restricted stockRSU award is granted on the date ofin connection with our Annual Meeting which restricted shares vestand vests the day before the following annual meeting. Vesting is subject to the director’s continued service on our Board through such vesting date. The annual equity grant for a director who has a partial year of service (due to joining the Board during the year) ispro-rated.
Ournon-employee directors have the option to defer settlement and payout of vested RSU grants until six months after separating from service on our Board (or, if earlier, a Change in Control as defined in the 2019 Stock Plan). Anon-employee director must generally make such deferral election in the year prior to the grant of the RSU award.
We do not currently pay dividends.dividends or dividend equivalents with respect to the RSUs.
Directors who are SPX employees receive no compensation for their service as directors.
The Nominating and Governance Committee reviews non-employee director compensation from time to time and makes recommendations to the Board. The Nominating and Governance Committee compares our non-employee director compensation to our peer companies and consults with our independent compensation consultant when reviewing compensation type and structure.
2016 COMPENSATION
As of the Spin-Off, our non-employee directors each received payments for the annual retainer and any applicable additional fees, with annualized values as listed above, pro-rated for his or her period of service beginning as of the Spin-Off, which was the date they each became a non-employee director of the Company, through the 2016 Annual Meeting. After the 2016 portions of the pro-rated annual retainer from the Spin-Off to the 2016 Annual Meeting and any applicable additional fees (described above) were paid to our non-employee directors, the third and fourth quarters of the 2016 payments were made in equal installments as described above. In addition, each received restricted stock of the Company in the amount of $130,000 (as described above) granted as of the 2016 Annual Meeting, which vests the day before the 2017 Annual Meeting, subject to the director’s continued service on our Board through such vesting date.
Mr. Lowe, our President and Chief Executive Officer,CEO, received no compensation for his service as a director.
CHANGES FOR 2017
Effective for 2017, the annual equity grant will be provided by grants of restricted stock units, which shall be subject to the same vesting schedule described above. Additionally, our non-employee directors will be given the option to defer settlement of such restricted stock unit grants that vest until six months after separating from service on our Board.
DIRECTOR COMPENSATION
director in 2019.
OTHER BENEFITS
Matching Gifts Program
The SPX FoundationWe will make matching donations for qualified charitable contributions for anynon-employee director up to a total of $10,000 per year.
Travel Reimbursements
We reimbursenon-employee directors for the reasonable expenses of attending Board and committee meetings and for expenses associated with director training and development. From time to time, a director’s spouse may accompany the director to certain business functions, and tax laws may require the incremental costs associated with the spouse’s attendance to be imputed as income to the director. On occasion, a director’s spouse may accompany a director when he or she travels on our corporate aircraft for Board-related business; in such instances, the value of the spouse’s travel is imputed as income to the director (determined under the U.S. Department of Transportation’s standard industry fare level (“SIFL”)).
COMPENSATION EVALUATION PRACTICES
The Nominating and Governance Committee periodically reviewsnon-employee director compensation and makes recommendations to the Board. The Nominating and Governance Committee evaluates ournon-employee director compensation against our peer companies and consults with our independent compensation consultant when reviewing compensation amounts and structure.
8 | 2020 PROXY STATEMENT |
DIRECTOR COMPENSATION
STOCK OWNERSHIP GUIDELINES
Our Stock Ownership Guidelines are designed to help ensure that our directors are engaged and have interests closely aligned with those of our long-term stockholders. We request that allnon-employee directors achieve holdings in Company stock of three times the annual cash retainer within five years of his or her date of appointment as a director. All of our directors were in compliance with these requirements as of March 13, 2017.19, 2020. For additional information on our Stock Ownership Guidelines, see “Stock Ownership Guidelines,” beginning on page 15.16.
The following table summarizes the compensation of ournon-employee directors who served during 2016. Mr. Lowe, our President and CEO, receives no compensation in connection with his service as a director and, accordingly, he is omitted from this table.2019.
Directors | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) |
Fees Earned or Paid in Cash ($)(1)
| Stock Awards ($)(2)
| All Other Compensation ($)(3)
| Total ($)
| ||||||||||||||||
Christopher J. Kearney | $ | 61,562 | $ | — | $ | — | $ | 61,562 | ||||||||||||||||
Patrick J. O’Leary | $ | 164,166 | (a) | $ | 130,000 | $ | — | $ | 294,166 | $200,000(a)
| $130,026
| $ 10,000
| $340,026
| |||||||||||
Ricky D. Puckett | $ | 77,979 | (b) | $ | 130,000 | $ | 7,500 | $ | 215,479 | $ 95,000(b)
| $130,026
| $ 10,000
| $235,026
| |||||||||||
David A. Roberts | $ | 73,875 | (c) | $ | 130,000 | $ | — | $ | 203,875 | $ 90,000(c)
| $130,026
| $ —
| $220,026
| |||||||||||
Meenal A. Sethna
| $ 18,750(d)
| $ 65,023
| $ 4,000
| $ 87,773
| ||||||||||||||||||||
Ruth G. Shaw | $ | 69,770 | (d) | $ | 130,000 | $ | — | $ | 199,770 | $ 85,000(e)
| $130,026
| $ 10,000
| $225,026
| |||||||||||
Robert B. Toth
| $ 75,000
| $130,026
| $ 3,000
| $208,026
| ||||||||||||||||||||
Tana L. Utley | $ | 61,562 | $ | 130,000 | $ | — | $ | 191,562 | $ 75,000
| $130,026
| $ —
| $205,026
|
(1) | Represents annual retainer of |
Mr. O’Leary’s fees include |
Mr. Puckett’s fees include |
Mr. Roberts’s fees include |
Ms. Sethna’s annual retainer ispro-rated for service beginning October 1, 2019. |
(e) | Dr. Shaw’s fees include |
(2) | On May 10, 2019, eachnon-employee director received a RSU grant with a grant date fair value of $130,026. As of December 31, 2019, Mr. O’Leary, Mr. Puckett, Mr. Roberts, Dr. Shaw, Mr. Toth, and Ms. Utley held 3,963 RSUs that vest the day before the next annual meeting following the grant date. |
(3) | Represents matching donations for qualified charitable contributions for Mr. |
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PROPOSAL 1: ELECTION OF DIRECTORS
Our Board currently consists of six directors and one vacancy.eight directors. The directors are divided into three classes. There are currently three directors in the first class, twothree directors in the second class, and one director and one vacancytwo directors in the third class.
At this Annual Meeting, you will be asked to elect twothree directors to the second class, Mr. Puckett, Ms. Sethna, and Ms. Utley. Dr. Shaw and Mr. Toth were elected to the third class by our stockholders at our 2018 Annual Meeting of Stockholders, and Mr. Lowe, Mr. O’Leary, and Mr. Roberts were elected to the first class and Dr. Shaw was elected to the third class by our stockholders at our 20162019 Annual Meeting of Stockholders, and they will continue to serve on the Board as described below.
Each of the director nominees is a current SPX director and, if elected, will serve for the termsterm as described below until a qualified successor director has been elected or until he or she resigns, retires, or is removed by the stockholders for cause. Ms. Sethna was first elected as a director in October 2019 by the Board when the size of the Board was expanded from seven to eight. She was first identified to the Board and the Nominating and Governance Committee by a third-party search firm engaged by the Nominating and Governance Committee.
Each director nominee has agreed to tender, promptly following his or her election, an irrevocable resignation effective upon his or her failure to receive the required vote forre-election at the next meeting at which he or she would facere-election and the acceptance of such resignation by the Board, in accordance with our Corporate Governance Guidelines.
Your shares will be voted as you specify on the proxy card that accompanies this Proxy Statement. If you do not specify how you want your shares voted, then we will vote them FOR the election of each of Mr. Puckett, Ms. Sethna, and Ms. Utley. If unforeseen circumstances (such as death or disability)disability of the nominee) make it necessary for the Board to substitute another person for any of the nominees, then your shares will be voted FOR that other person. The Board does not anticipate that any of the nominees will be unable to serve.
Nominees for Election to Serve Until 20202023 Annual Meeting
Rick Puckett
Retired Executive Age: Director since: 2015 Committees: • Audit (Chair) • Compensation • Nom. & Gov. |
PROFESSIONAL HIGHLIGHTS
Ricky D. Puckett,
SKILLS AND QUALIFICATIONS
Mr. Puckett brings extensive accounting and financial experience, including financial strategy and governance to our Board. In addition, he offers a deep understanding of mergers and acquisitions; strategic planning and analysis; commodity risk management; strategic information technology; organizational development; human |
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PROPOSAL NO. 1: ELECTION OF DIRECTORS
Meenal Sethna Executive Vice President Age: 50 Director since: 2019 Committees: • Audit | PROFESSIONAL HIGHLIGHTS Meenal A. Sethna, 50, has served as Executive Vice President and Chief Financial Officer, for Littelfuse, a global manufacturer of leading technologies in circuit protection, power control and sensing since 2016, and joined the company in 2015. She currently leads the company’s finance organization, including all aspects of accounting and reporting, financial planning and analysis, treasury, tax, internal audit, and investor relations. She also has leadership for the company’s digital and information technology organization, enabling improved business performance and efficiency, with an ongoing focus on operational governance and security. Ms. Sethna served four years at Illinois Tool Works as Vice President and Corporate Controller. Previous to that, she worked at Motorola Inc., most recently as Vice President, Finance. She began her career at Baxter International, holding a variety of finance roles during her tenure. Ms. Sethna received her bachelors degree in Finance from the University of Illinois – Urbana and her MBA from the Kellogg Graduate School of Management at Northwestern University. She is a Certified Public Accountant in Illinois. SKILLS AND QUALIFICATIONS Ms. Sethna brings a rich background in accounting and finance to our Board. In addition, she has deep experience in strategic planning; business growth; investor relations; risk management; and information technology. |
Tana Utley
Vice President of Large Power Systems Division at Age: Director since: 2015 Committees: • Audit |
PROFESSIONAL HIGHLIGHTS
Tana L. Utley,
SKILLS AND QUALIFICATIONS
Ms. Utley brings a wealth of knowledge in engineering, operations, continuous improvement, and implementation of new programs to our Board. Ms. Utley also brings a depth of understanding of technology and cybersecurity, multi-industrial manufacturing, and how to minimize the environmental impact of manufacturing companies. |
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR |
2020 PROXY STATEMENT | 11 |
PROPOSAL NO. 1: ELECTION OF DIRECTORS
DirectorDirectors Continuing to Serve Until 20182021 Annual Meeting
Ruth Shaw
Retired Group Executive Age: Director since: 2015 Committees: • Nom. & Gov. (Chair) • Audit • Compensation |
PROFESSIONAL HIGHLIGHTS
Ruth G. Shaw,
SKILLS AND QUALIFICATIONS
Dr. Shaw contributes a deep understanding of the electric utility industry; corporate governance; human resources management; executive compensation; information technology; communications and public relations; environment, health and safety management; procurement; and diversity to our Board. |
Bob Toth Former Chairman, Chief Age: 59 Director since:2017 Committees: • Compensation | PROFESSIONAL HIGHLIGHTS Robert B. Toth, 59, has more than 30 years of experience in leadership roles at global industrial and manufacturing companies, as well as in private equity, most recently as a Managing Director at CCMP Capital Advisors, LLC from 2016 until 2019. Prior to CCMP, Bob served as the Chairman, Chief Executive Officer and President of Polypore International, Inc., a leading global high technology filtration company, where he optimized the business portfolio and positioned the company for accelerated growth, resulting in a substantial increase in enterprise value. Prior to Polypore, Bob served as President, Chief Executive Officer and Board Director of CP Kelco ApS, where he led the business through a comprehensive turnaround and successful sale. He also spent 19 years at Monsanto Company and itsspin-off, Solutia Inc., where he held a variety of executive and managerial roles. Bob is currently a Director at Materion Corporation. He earned a bachelor degree in Industrial Management from Purdue University and MBA from the John M. Olin School of Business at Washington University, St. Louis, Missouri. SKILLS AND QUALIFICATIONS Mr. Toth contributes significant insight on mergers and acquisitions and on strategic portfolio management and related strategic and operational issues. Mr. Toth also brings extensive experience leading companies in the manufacturing sector, including knowledge and skills in senior management, finance, and operations. |
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Directors Continuing to Serve Until 20192022 Annual Meeting
Gene Lowe
President and CEO of SPX Corporation Age: Director since: 2015 Committees: • None |
PROFESSIONAL HIGHLIGHTS
Eugene J. Lowe, III,
SKILLS AND QUALIFICATIONS
Mr. Lowe brings valuable operations, strategic planning, marketing, and business development experience to our Board. As the only member of SPX management to serve on the Board, Mr. Lowe also contributes a level of understanding of our Company not easily attained by an outside director. |
Patrick O’Leary
Retired Executive Treasurer and CFO of SPX Corporation Age: Director since: 2015 Committees: • None |
PROFESSIONAL HIGHLIGHTS
Patrick J. O’Leary,
SKILLS AND QUALIFICATIONS
Mr. O’Leary contributes a deep understanding of SPX history and businesses to our Board. In addition, he brings broad financial strategy |
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PROPOSAL NO. 1: ELECTION OF DIRECTORS
Dave Roberts
Chairman of the Board and Retired Executive Chairman, Carlisle Companies, Inc. Age: Director since: 2015 Committees: • Compensation (Chair) • Audit • Nom. & Gov. |
PROFESSIONAL HIGHLIGHTS
David A. Roberts,
SKILLS AND QUALIFICATIONS
Mr. Roberts brings extensive experience in senior management of multinational companies, including expertise in the industrial and manufacturing sectors, and mergers and acquisitions, to our Board. Mr. Roberts also contributes strong financial acumen and experience from his service on various public company boards. |
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Director and Nominee Skills and Experience
Under the leadership of our Nominating and Governance Committee, in 2016 our Board developed and maintains a director skills matrix that identifies expertise and experience that the Board believes contribute to an effective and well-functioning board and that the Board as a whole should possess.
The Nominating and Governance Committee and the Board use this matrix to identify areas for director training and as a tool to maintain a balanced and well-rounded board. In addition, the Nominating and Governance Committee considers these and other criteria as a guide, but not as a minimum set of requirements, when evaluating potential candidates for the Board. Together, this variety of skill sets, experiences, and personal backgrounds allows our directors to provide the diversity of thought that is critical to the Board’s decision-making and oversight process. For a better understanding of our Board qualifications and diversity, we encourage you to read “Board“Director Nominees, Qualifications, and Diversity” beginning on page 2.
15 |
We maintain Stock Ownership Guidelines to emphasize the importance of substantive, long-term share ownership by our directors and officers to align their financial interests with those of our stockholders.
The guidelines are:
Position | ||
| Target Value | |
Non-Employee Directors | 3x annual retainer | |
Chief Executive Officer | 5x annual salary | |
Chief Operating Officer* | 4x annual salary | |
Other Executive Officers | 3x annual salary | |
Other Designated Executives | 1x annual salary |
* SPX does not currently have the COO position. |
Shares held in family trusts and shares held in retirement plan accounts are deemed to be owned shares for purposes of these guidelines. Unvested time-based stock (and stock unit awards) are deemed to be owned shares for purposes of these guidelines. Unexercised stock options and unvested performance-based equity awardsstock (and stock unit awards) are excluded.excluded for purposes of these guidelines. We asknon-employee directors and executivesexecutive leaders to attain the desired level of stock ownership within five years of appointment to a director or officer position.
Once anon-employee director or executive leader attains the desired level of share ownership, he or she will continue to be in compliance with these guidelines even if he or she later falls below the guideline, as long as he or she retains at least 50% of the net shares acquired upon exercise of stock options and at least 50% of the net shares acquired pursuant to vested restricted equity awards and vested restricted stock unit grants until he or she again meets or exceeds the guidelines. “Net shares” means the shares remaining after disposition of shares necessary to pay the related tax liability and, if applicable, the stock option exercise price.
Eachnon-employee director and named executive officer was in compliance with these requirements as of March 13, 2017.
OWNERSHIP OF COMMON STOCK
DIRECTORS AND EXECUTIVE OFFICERS
The following table includes information about how much of our common stock (our only outstanding class of equity securities) is beneficially owned by:
Each director and nominee for director;
Each executive officer in the Summary Compensation Table on page 32; and
All directors and executive officers as a group.
Unless otherwise noted, amounts and percentages are as of March 13, 2017.10, 2020.
Number of Shares of Common Stock Beneficially Owned(1) | Right to Acquire Beneficial Ownership Under Options Exercisable/ Stock Units Distributable Within | Percent of Class | ||||||||||
DIRECTORS AND DIRECTOR NOMINEES WHO ARE NOT NAMED EXECUTIVE OFFICERS |
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Patrick J. O’Leary | 15,382 | — | * | |||||||||
Ricky D. Puckett | 15,382 | — | * | |||||||||
David A. Roberts | 15,382 | — | * | |||||||||
Ruth G. Shaw | 15,382 | — | * | |||||||||
Tana L. Utley | 15,382 | — | * | |||||||||
NAMED EXECUTIVE OFFICERS | ||||||||||||
Eugene J. Lowe, III | 49,830 | 92,820 | * | |||||||||
Scott W. Sproule | 37,157 | 15,576 | * | |||||||||
J Randall Data | 8,400 | 12,461 | * | |||||||||
John W. Nurkin | 25,161 | 10,342 | * | |||||||||
John W. Swann, III | 21,840 | 10,592 | * | |||||||||
All directors and executive officers as a group (12 persons) | 237,728 | 157,366 | * |
Number of
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RIGHT TO
| Percent
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DIRECTORS AND DIRECTOR NOMINEES WHO ARE NOT NAMED EXECUTIVE OFFICERS
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Patrick J. O’Leary
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15,382
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—
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*
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Ricky D. Puckett
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19,345
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3,963
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*
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David A. Roberts
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23,232
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3,963
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*
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Meenal A. Sethna
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—
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|
—
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*
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Ruth G. Shaw
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28,042
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3,963 |
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*
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Robert B. Toth
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12,341
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3,963
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|
*
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Tana L. Utley
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15,382 |
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— |
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* |
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NAMED EXECUTIVE OFFICERS
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Eugene J. Lowe, III
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953,611
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721,792
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2.10
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%
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Scott W. Sproule
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264,877
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167,043
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*
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J. Randall Data
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91,678
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34,734
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*
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| |||
John W. Nurkin
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159,268
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92,923
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|
*
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| |||
John W. Swann, III
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169,919
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124,283
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|
*
|
| |||
All directors and executive officers as a group (14 persons)
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|
1,973,525
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1,308,764
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4.39
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%
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* | Less than 1.0% |
(1) | Beneficial ownership is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. In general, beneficial ownership includes any shares a director or officer can vote or transfer, |
(2) | Represents shares of our common stock issuable under options that are exercisable or become exercisable within 60 days of March 19, 2020 and RSUs that vest within 60 days of March 19, 2020. Such shares are included in the number of shares of common stock beneficially owned as presented in the preceding column on this table. |
(3) | Includes shares beneficially owned through the 401(k) Plan on March 19, 2020 for each of the following: Mr. Lowe, 4,205 shares; Mr. Sproule, 3,748 shares; Mr. Data, 2,944 shares; Mr. Nurkin, 22,187 shares; Mr. Swann, 3,258 shares; and all directors and named executive officers as a group, 36,342 shares. Directors do not participate in our 401(k) Plan. |
17 |
OWNERSHIP OF COMMON STOCK
The following table includes certain information about each person or entity known to us to be the beneficial owner of more than five percent of the issued and outstanding shares of our common stock.
Name and Address | Shares of Common Stock Beneficially Owned | Percent of Class(1) | ||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 6,622,474(2) | |||||||
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 | ||||||||
| 4,606,787(3) |
(1) | Ownership percentages set forth in this column are based on the assumption that each of the principal shareowners continued to own, as of March |
(2) | Based on information provided in a Schedule 13G/A filed with the SEC on |
(3) | Based on information provided in a Schedule 13G/A filed with the SEC on February |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, officers, and beneficial owners of more than 10% of our outstanding common stock to file with the SEC reports of ownership and changes in ownership. SEC regulations require that directors, officers, and beneficial owners of more than 10% of our outstanding common stock furnish us with copies of all Section 16(a) reports they file.
Based solely upon a review of Forms 3 and 4 (including amendments to such forms) furnished to us during 2016 and Forms 5 furnishedfiled with respect to 2016,the SEC, no director, officer, or beneficial owner of more than 10% of our outstanding common stock failed to file on a timely basis during 20162019 any reports required by Section 16(a), except Mr. Michael A. Reilly—Corporate Controller and Chief Accounting Officer, inadvertently reported a grant of stock options under the 2002 Stock Plan as restricted stock in October 2015 and corrected the error in August 2016..
Compensation Discussion and Analysis
INTRODUCTION
As you read ourThis Compensation Discussion and Analysis (“CD&A”), keep in mind that 2016 was a transformative year for SPX given the Spin-Off at the end of September 2015. As a result, we believe that a focus on 2016, as the first full year of operations as the “new” SPX, is particularly relevant for evaluating provides information about our executive compensation.compensation program and the factors considered in making compensation decisions for the named executive officers named in our Summary Compensation Table set forth below (“NEOs”).
When assessing our pay-for-performance outcomes, it is necessary to separateOur NEOs for 2019 are listed in the pre-Spin-Off results from post-Spin-Off results. The Company’s business model, strategy, managed assets, executive officer team, and membership of the Compensation Committee (the “Committee”) of our Board were materially different in 2016 compared with pre-Spin-Off.
Here are just a few of the differences:table below:
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Eugene J. Lowe, III
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President and Chief Executive Officer | |||||
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John W. Swann, III |
President, Heating and Location & Inspection |
* For Committee members serving on the Committee at some point within the ten years preceding Spin-Off.
Summary of Key Business Accomplishments
Over the past year, we achieved several key milestones on our value creation roadmap. In late 2015, management rolled out its plans to create value for stockholders by driving operational excellence and growth across our strategic platforms in our HVAC, Detection & Measurement, and Transformer businesses, while reducing exposure to underperforming businesses in the power generation industry. SPX’s 2016 results reflect a significant reduction in risk and overall successful execution against both internally and externally communicated goals. We believe the following key 2016 accomplishments have had a meaningful impact on the current and future value of SPX:
* Non-GAAP financial measure. Reconciliation to the most comparable measures calculated and presented in accordance with GAAP is available in the appendix to this Proxy Statement.
For 2016, the SPX total stockholder return of 143.3% was 2.9 times greater than that of our peer group and 12.8 times greater than the S&P 500.
EXECUTIVE COMPENSATION
Three-Year Total Stockholder Return
Due to the significant difference between pre-Spin-Off SPX and post-Spin-Off SPX, we do not believe a three-year total stockholder return (“TSR”) is relevant. Therefore, we are presenting the total stockholder return from the point of the Spin-Off in September 2015.
From Spin-Off on September 26, 2015, through the end of 2016, the SPX total stockholder return of 99.3% was 2.4 times greater than that of our peer group and 5.2 times greater than the S&P 500.
EXECUTIVE SUMMARY
This CD&A provides information about2019 represented another year of impactful growth for SPX. Our executive officers and directors continued to lead the organization through the execution of our value creation roadmap and strategic objectives resulting in strong performance. We have demonstrated the ability to consistently deliver value for our stakeholders through a combination of improvements within our core businesses and the execution of strategic acquisitions.
Our executive compensation the factors that were considered in making compensation decisions for our NEOs (as defined on page 21), and how we have modified our program to meet SPX’s needs for the future.
Our Executive Compensation Design
Following the Spin-off, we redesigned our compensation programis designed to align to the “new” SPX. We worked to ensure our compensation practices aligned with stockholder interests while maintaining market competitiveness. As we committed to do for 2016, we implemented new base pay structures, short- and long-term incentive programs,rewards directly to business performance. We and the Compensation Committee of the Board (the “Committee”) benchmark our compensation governance practices.strategy against our peer group companies, which rewards performance that results in value generation for our stockholders.
Summary of Key Business Accomplishments
Execution in 2019 drove positive results in revenue, operating profit and cash flow conversion. Select accomplishments during 2019 include:
Significantly exceeded financial targets for 2019 including adjusted operating income* growth of approximately 18%;
Delivered 82% stockholder return in stock price for the year, first amongst our compensation Peer Group;
Exceeded target for cumulative adjusted segment income* over a three-year period by more than 13%, achieving $608.3M compared to target of $536.0M;
Completed three acquisitions, adding Sabik, SGS Refrigeration, and Patterson-Kelley to our family of businesses.
Increased earnings per share (“EPS”) on an adjusted basis* by 22%:
2018 | 2019 | |||||
GAAP EPS | $1.75 |
| $1.67 | |||
Adjusted EPS* | $2.27 |
| $2.76 |
*Non-GAAP financial measure. Reconciliations of amounts presented asnon-GAAP financial measures with the amounts of the most comparable measures calculated and presented in accordance with GAAP, and other important information regardingnon-GAAP financial measures, are presented in the appendix of this Proxy Statement.
| 19 |
EXECUTIVE COMPENSATION
Three-Year Total Stockholder Return
The following graph shows our three-year total stockholder return (“TSR”) as compared to our peer group, as defined on page 25, the S&P 600 Capital Goods Index, and the S&P 500 Index for the period December 31, 2016 to December 31, 2019.
Three-Year TSR from December 31, 2016 to December 31, 2019
2019 Compensation Highlights
Our executive compensation program has three primary elements: base salary, annual incentive, and long-term incentives. Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Annual incentives reward the achievement of short-term goals, while long-term incentives drive our NEOs to focus on stockholder value creation. Based on our performance, and consistent with the design of our program, the Committee made the following executive compensation decisions for 2019:
• | Base Salary. Annual salary increases ranged from 3.5% to 5%. These adjustments were a continuation of the effort to bring our NEOs’ base salaries in line with the market and to facilitate retention and reward for execution of responsibilities and delivery of performance. These adjustments also reflect the contributions made by our NEOs in connection with executing on key initiatives and the Company’s strategic priorities over the course of the year. For details, please see page 25. |
• | Annual Incentive. Based on our performance results, awards under our Executive Bonus Program were paid at 123.6% of target. This payout applied to all our NEOs, with the exception of Mr. Swann, whose payout was 82.6% based on both business unit and corporate results. For details, please see page 26. |
• | Long-Term Incentives. All of our NEOs received equity and equity-based awards in 2019. Target award amounts and the mix of vehicles used are described on page 27 of this CD&A. Performance for the measurement period of January 1, 2017 through December 31, 2019 exceeded maximum metric for both relative TSR and adjusted segment income* resulting in the maximum allowable payout capped at 150% for both performance based incentives. For details, please see page 27. |
20 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION PROGRAM
Reflecting the Voice of Our Stockholders
We carefully consider the results of our stockholderSay-on-Pay vote from the previous year. At our
At our 20162019 Annual Meeting, approximately 90%95% of votes cast approved our executive compensation. Our
We interpreted the results of thehave exceeded 90% approval each year since 2016, votewhich we interpret as an indication that we were moving in the right direction witha strong endorsement of
regard to our compensation practices forprogram’s design and direction. We continue to actively seek and highly value the “new” SPX. However, we continued to conduct outreach throughout
2016 and engage in dialogue withperspectives of our investors to monitor their perspectives. We haveinvestors. During the year, we reached out to stockholders owning approximately 75% of our
owning more than 70% of our common stock, of which the majority have provided us feedback on various topics, including
executive compensation practices and governance.stock. We have taken and will continue to take thisstockholder feedback into consideration
as we evolve our
compensation program. Most importantly, we are committed to ensuring that our ongoing program is designed in the
best interests of both our stockholders and executives.
Summary of Compensation Program
In summary, our executive compensation program:
• | Sets base salaries that are |
• | Emphasizes variable compensation programs, |
• | Provides that a majority of long-term incentives to NEOs are performance based; |
• |
• | Grants equity awards with double-trigger termination payments upon a change |
• | Includes a relative |
• | Freezes historic defined benefit pension plans, with no NEO participants; |
• | Eliminates historic perquisites, such as retiree medical benefits; and |
• | Prohibits NEO hedging or pledging of our common stock. |
Our Compensation Principles
After the Spin-Off, the Committee, in partnership with our management team and our independent compensation consultant, undertook a thorough review of our historic compensation practices. The result was a newly designedOur executive compensation program for 2016 that takes into account the feedback we received from stockholders and is centered around the following principles:
Alignment with Stockholders’ Interests | Executive officers’ interests should be directly aligned with those of | |
Link to Business Priorities and Performance | A significant portion of total compensation should be variable and subject | |
Competitiveness | Target total compensation should be competitive with that being offered | |
Governance | Maintaining best-practice executive compensation governance standards |
21 |
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION PROGRAM
Our Named Executive Officers
The compensation decisions that pertain to the named executive officers listed in the table below (“NEOs”) were made by the members of the Committee who were appointed effective as of the Spin-Off in September 2015.
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Components of Total Direct Compensation
For 2016,2019, we focusedcontinued to focus on aligningensuring alignment of pay practices with the external marketstockholder interests and creatingdriving apay-for-performance culture.
Design and philosophical characteristics of the SPX compensation program include:
• | Base |
• | Annual Incentive |
• |
|
Stock Options (“Options”) that vest ratably over a three-year period;
Performance Stock Units (“PSUs”) tied to relative TSR(“r-TSR”) and a peer group within the S&P 600 Capital Goods Index over a three-year performance measurement period, with potential payout range of 0% to 150% of target, and cannot exceed target if our TSR is negative;
Restricted Stock Units (“RSUs”) that vest ratably over a three-year period.
Beginning with compensation awards made in 2019, the Committee has decided to no longer grant cash performance unit (CPU) awards and to proportionately increase PSU awards. As a result, all of the 2019 LTI compensation grants are comprised of equity-based awards. The Committee evaluates the Company’s compensation programs annually and considers a number of factors when evaluating the components of LTI compensation, including equity use and dilution, compensation trends to attract and retain talent, and alignment of incentives with Company performance.
Mix of Compensation Elements
The following charts show that for 20162019 the mix of compensation elements targeted for our NEOs was heavily weighted toward variable performance-based compensation. The mix of LTI is based on the allocation value used in determining the number of units or options, as applicable, for each award.
22 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Our CEO’sPay-for-Performance Alignment
The following chart shows our CEO’s compensation relative to our TSR and compared with our peer group of companies listed on page 25, demonstrating how our executive compensation program aligns with performance. This chart is based on our three-year TSR; the average of our CEO’s total compensation for 2017, 2018, and 2019 by percentile; and the average total compensation for CEOs at our peer companies, from their most recent three proxy statement filings.
* | Peer company compensation based on 2016, 2017 and 2018 compensation data from each company’s three most recent proxy statement filings. |
While our CEO’s relative pay rank falls below the median of our peer companies, our philosophy is to align executive compensation with that of our peers and provide variable incentive compensation that rewards executives at higher levels when superior performance is achieved.
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EXECUTIVE COMPENSATION
HOW DECISIONS FOR OUR NAMED EXECUTIVE OFFICERS WERE MADE
Executive Compensation Practices
What We Do | ||
✓ | Heavy emphasis on variable compensation | |
✓ | Majority of long-term incentive awards are performance based | |
✓ | Stock ownership guidelines | |
✓ | Clawback provisions | |
✓ | “Double-trigger” termination payments upon a change in control | |
✓ | Use of independent compensation consultant | |
✓ | Regular risk assessments | |
✓ | Annual reviews of share utilization | |
✓ | Stockholder outreach | |
✓ | Regular market assessments against our peer group |
What We Do Not Do | ||||
û | No multi-year guarantees of salary increases | |||
û | No taxgross-ups on termination payments following a change in control | |||
û | No hedging of Company stock | |||
û | No pledging of Company stock | |||
û | No significant perquisites or defined benefit pension plans | |||
û | No “single-trigger” termination payments upon a change in control | |||
û | No repricing or backdating stock options without stockholder approval | |||
û | No cash buyout of underwater stock options without stockholder approval |
The Role of the Compensation Committee
The Committee is responsible for overseeing the design and administration of the executive compensation program so that the program is consistent with our compensation philosophy. The Committee reviews compensation levels for all of our executive officers, including our NEOs. The Committee also makes all final compensation decisions regarding our NEOs and officers, except for the CEO, whose compensation is reviewed and approved by the full Board, excluding Mr. Lowe, based upon recommendations of the Committee.
The Committee also works very closely with its independent compensation consultant and with management to examine the effectiveness of the Company’s executive compensation program. Details of the Committee’s authority and responsibilities are specified in the Committee’s charter, which is available on our website (www.spx.com) under the heading “Investor Relations—Corporate Governance—Board Committees.”
The Role of Management
In general, certainCertain members of our senior management team help prepare for and attend meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated. However, only the Committee members are allowed to vote on decisions regarding executive compensation. The Committee also receives recommendations from the CEO regarding the compensation of our other officers, including the other NEOs. The CEO does not participate in the deliberations of the Committee and Board regarding his own compensation.
The Role of the Independent Compensation Consultant
The Committee engages an independent compensation consultant to provide expertise on competitive pay practices and compensation program design and an objective assessment of any inherent risks of any compensation programs. Pursuant to the authority granted to it under its charter, the Committee has retained Pearl Meyer as its independent consultant. Pearl Meyer reports directly to the Committee and does not provide additional services to management. The Committee has conducted an independence assessment of Pearl Meyer in accordance with SEC rules, NYSE listing standards, and the requirements of the Compensation Committee charter,Charter, and has determined that work performed by Pearl Meyer does not create a conflict of interest.
The Role of the Peer Group
After the Spin-Off, the Committee, with the assistance of its independent compensation consultant, refined SPX’s peer group to better reflect the Company’s new structure. In 2016, additional modifications were made, adding the following four companies to the existing twelve peers from 2015:
The SPX peer group now includes the following:
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EXECUTIVE COMPENSATION
The Role of the Peer Group
Our executive compensation program takes into account the compensation practices of companies with which we compete or could compete for executive talent. In 2019, the Board approved a change to our Peer Group to ensure continued consistency with this philosophy. Peer companies are selected based on a number of factors including size, industry, and markets served. Based on changes to organization structure and market caps in 2019, Babcock and Wilcox was substituted by NN, Inc. whom we believe is more closely aligned with the SPX peer company strategy.
For purposes of setting 2019 executive compensation, the Committee used the following peer companies (“peer group”):
SPX Peer Companies | ||
Altra Industrial Motion Corp. (AIMC) | Graco Inc. (GGG) | |
Barnes Group Inc. (B) | Harsco Corporation (HSC) | |
Chart Industries, Inc. (GLTS) | IDEX Corp. (IEX) | |
CIRCOR International, Inc. (CIR) | NN, Inc. (NNBR) | |
Colfax Corp. (CFX) | Nordson Corporation (NDSN) | |
Crane Co. (CR) | Regal Beloit Corporation (RBC) | |
Curtiss-Wright Corporation (CW) | Rexnord Corporation (RXN) | |
Enerpac Tool Group Corp (EPAC) | SPX FLOW, Inc. (FLOW) | |
EnPro Industries, Inc. (NPO) | TriMas Corporation (TRS) |
Our peer companies were drawn from a pool of potential companies identified by our management either as key competitors for senior talent or as having businesses or serving end markets similar to our Company. These companies were further reviewed for appropriateness as peers by Pearl Meyer prior to Committee approval. The primary factors used to generate the group were as follows:
Similar business mix similar to that of SPX;
Similar end markets;markets to SPX;
Competitors for executive talent;
Market capitalization; and
Revenue of approximately 0.4 to 2.5 times SPX’s revenue.
SPX annual revenues for 2016 rank slightly below that of2019 are approximately at the median peer company.
The Committee reviews the peer group regularly to assure alignment and adds or removes companies as peers as it deems appropriate and necessary to maintain competitive and balanced alignment. The Committee uses the peer group data to assist in compensation decisions around base pay,salary, short-term incentives, and long-term incentives, as well as in benchmarking other executive compensation matters.
2016 COMPENSATION DESIGN AND DECISIONSBase Salary
Executive Compensation PracticesBase salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain talent. Base salary levels are reviewed annually. When making adjustments, the Committee considers the Company’s overall performance; the NEO’s individual performance, experience, career potential, and tenure with the Company; and competitive market practices. The Committee approved increases in annual base salary, effective March 28, 2019, as reflected in the table below, to continue to improve the competitive market position of our NEO’s base salaries relative to our peer group.
Named Executive Officer | Base Salary (From 3/19/2018) | Base Salary (From 3/18/2019) | % Adjustment | |||||||||
Eugene J. Lowe, III | $ | 850,735 | $ | 884,764 | 4.0 | % | ||||||
Scott W. Sproule | $ | 458,639 | $ | 476,985 | 4.0 | % | ||||||
J. Randall Data | $ | 445,506 | $ | 463,326 | 4.0 | % | ||||||
John W. Nurkin | $ | 369,249 | $ | 382,173 | 3.5 | % | ||||||
John W. Swann, III | $ | 430,726 | $ | 452,262 | 5.0 | % |
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EXECUTIVE COMPENSATION
Our CEO’s Pay-for-Performance Alignment
Because 2016 was our first full year, post-Spin-Off, as a materially different company, a three-year TSR does not provide a meaningful comparison to our current peer group. The following chart shows our CEO’s 2016 compensation relative to our one-year TSR and compared with our peers, demonstrating how our new executive compensation program aligns with performance. This chart is based on our TSR, our CEO’s total compensation for 2016 by percentile, as well as the total compensation for CEOs at our peer companies, from their most recent proxy statement filings.
While our CEO’s relative pay rank falls below the median of our peer companies for 2016, our philosophy is to align executive compensation with that of our peers and provide variable incentive compensation that rewards executives at higher levels when superior performance is achieved.
EXECUTIVE COMPENSATION
Base Salary
SPX promoted all of its NEOs from positions they held within the pre-Spin-Off organization, with the exception of Mr. Data, who was hired on August 18, 2015, in anticipation of the Spin-Off. This was a significant factor in setting the initial post-Spin-Off base salaries for our NEOs, in addition to the benchmarking data that was provided by the Committee’s independent compensation consultant. First year adjustments were made to set base pay between the 25th percentile and median pay of our peer group. Since each of the NEOs, with the exception of Mr. Data, received an increase as of the Spin-Off in September 2015, the Committee approved only modest increases in base pay, effective March 21, 2016, as reflected in the table below.
Named Executive Officer | Title | Base Salary (01/01/2016) | Base Salary (From 3/21/2016) | % Increase | ||||||||||
Eugene J. Lowe, III | President and Chief Executive Officer | $ | 775,000 | $ | 786,625 | 1.5 | % | |||||||
Scott W. Sproule | Vice President, Chief Financial Officer | $ | 410,000 | $ | 416,150 | 1.5 | % | |||||||
J Randall Data | President, South Africa and Global Operations | $ | 400,000 | $ | 408,000 | 2.0 | % | |||||||
John W. Nurkin | Vice President, Secretary and General Counsel | $ | 330,000 | $ | 334,950 | 1.5 | % | |||||||
John W. Swann, III | President, Weil-McLain, Marley Engineered Products and Radiodetection | $ | 400,000 | $ | 406,000 | 1.5 | % |
For Mr. Lowe, Mr. Sproule, Mr. Nurkin, and Mr. Swann, the increase to base salary was set at 1.5%, while the increase for Mr. Data was 2.0% based on the length of time since his hire date.
Executive BonusAnnual Incentive
Executive Bonus Program
Our Executive Bonus Program pays annual bonuses ranging from 0% to 200% of target bonus by reference to three key metrics: Coreadjusted operating income,* Coreadjusted free cash flow,* and Coreadjusted revenue.*
The Committee selected these metrics to be transparent and to provide clarity and consistency in calculating bonuses. In setting short-term incentive goals, SPX management and the Committee used external earnings guidanceutilized a number of data points to assist withfocus targets on driving the Company’s strategic priorities, including setting goals to align executive pay with stockholder return.that incentivize delivery of annual objectives. Further, the use of Core* resultsadjusted* metrics is intended to incentivize the executivesdrive management to focus on the performance of assets that make up our strategic focus going forward.go forward businesses, which excludes the South African projects and our Heat Transfer business.
2019 targets were set to drive continued growth in revenue, operating income, and to deliver adjusted free cash flow* in excess of 100% conversion of adjusted net income from continuing operations.*
The Committee adjusted the 2019 targets to account for increased operating income, cash, and revenues resulting from the acquisition of Sabik early in 2019. Acquisitions of SGS Refrigeration and Patterson-Kelley, completed in the latter half of 2019, were excluded from the 2019 targets and results for bonus calculation purposes, but will be included in targets for the 2020 plan year.
We achieved year-over-year growth in each metric, with 5% on adjusted revenue*, 8% on adjusted free cash flow and 16% on adjusted operating income. This performance, among other things, drove total shareholder return for the year of 82% and an increase in EPS of 22%.
The table below shows the 20162019 threshold, target, and maximum goals for each of the relevant metrics under our Executive Bonus Program, as well as the actual performance results.
Level of Performance ($ Millions) | Payout | |||||||||||||||||||
Performance Metric and Weighting | Threshold ($) | Target ($) | Maximum ($) | Actual ($) | % | |||||||||||||||
Core Operating Income* (50%) | $ | 93.8 | $ | 106.3 | $ | 121.3 | $ | 102.0 | 82.8 | % | ||||||||||
Core Cash Flow* (30%) | $ | 65.6 | $ | 75.6 | $ | 85.6 | $ | 74.8 | 95.6 | % | ||||||||||
Core Revenue* (20%) | $ | 1,359.0 | $ | 1,459.0 | $ | 1,559.0 | $ | 1,389.0 | 65.1 | % | ||||||||||
Total Corporate Results | 83.2 | % |
The use of Core* metrics are intended to incentivize executives to focus on the performance of assets that make up our strategic focus going forward.
EXECUTIVE COMPENSATION
Level of Performance ($ Millions) | Payout % | |||||||||||||||||||
Performance Metric and Weighting | Threshold ($) | Target ($) | Maximum ($) | Actual ($) | ||||||||||||||||
Adjusted Operating Income* (50%) | $ | 155.0 | $ | 170.0 | $ | 185.0 | $ | 170.9 | 106.3 | % | ||||||||||
Adjusted Free Cash Flow* (25%) | $ | 110.0 | $ | 125.0 | $ | 140.0 | $ | 139.3 | 195.3 | % | ||||||||||
Adjusted Revenue* (25%) | $ | 1,490.0 | $ | 1,525.0 | $ | 1,560.0 | $ | 1,515.5 | 86.4 | % | ||||||||||
Total Corporate Results | 123.6 | % |
For 2016, Core2019, adjusted operating income* of $102.0M$170.9M resulted in an 82.8%106.3% payout, with a weighting of 50%. CoreAdjusted free cash flow* of $74.8M$139.3M resulted in a 95.6%195.3% payout, with a weighting of 30%25%. CoreAdjusted revenue* of $1,389.1M$1,515.5M resulted in a 65.1%86.4% payout, with a weighting of 20%25%. The cumulative payout for 20162019 results was 83.2%123.6% of target for those NEOs with 100% of their bonus tied to corporate metrics.
Mr. Lowe, Mr. Sproule, Mr. Data, and Mr. Nurkin had bonus payouts based solely on corporate results, generating an overall payout of 83.2%123.6%. Mr. Swann, however, has a target incentive that includes both business unit and corporate results: 75% of his incentive is based on his role as President, Heating and Location & Inspection, including our Weil-McLain, Marley Engineered Products, Radiodetection and Radiodetection,Cues businesses, and 25% is based on corporate metrics. For 2016,2019, business unit performance achievement metric achievement was 0%68.8%, generating an overall payout of 20.8% to82.6% for Mr. Swann.
*Non-GAAP financial measure. Reconciliation toReconciliations of amounts presented asnon-GAAP financial measures with the amounts of the most comparable measures calculated and presented in accordance with GAAP, is availableand other important information regardingnon-GAAP financial measures, are presented in the appendix toof this Proxy Statement.
26 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Executive Bonus Results for 20162019
The table below shows the total annual bonuses earned by our NEOs for 2016.2019.
Named Executive Officer | Base Salary as of 12/31/2016 | Target Payout (as a % of Base Salary) | Bonus Achieved (%) | Total Bonus | Base Salary as of 12/31/2019
|
Target Payout (as a % of Base Salary)
| Bonus Achieved (% of Target
| Total Bonus
| ||||||||||||||||||||||||
Eugene J. Lowe, III | $ | 786,625 | 100 | % | 83.2 | % | $ | 654,472 |
$
|
884,764
|
|
|
100
|
%
|
|
123.6
|
%
|
$
|
1,093,568
|
| ||||||||||||
Scott W. Sproule | $ | 416,150 | 70 | % | 83.2 | % | $ | 242,366 |
$
|
476,985
|
|
|
70
|
%
|
|
123.6
|
%
|
$
|
412,688
|
| ||||||||||||
J Randall Data | $ | 408,000 | 60 | % | 83.2 | % | $ | 203,674 | ||||||||||||||||||||||||
J. Randall Data
|
$
|
463,326
|
|
|
65
|
%
|
|
123.6
|
%
|
$
|
372,236
|
| ||||||||||||||||||||
John W. Nurkin | $ | 334,950 | 60 | % | 83.2 | % | $ | 167,207 |
$
|
382,173
|
|
|
60
|
%
|
|
123.6
|
%
|
$
|
283,420
|
| ||||||||||||
John W. Swann, III | $ | 406,000 | 60 | % | 20.8 | % | $ | 50,669 |
$
|
452,262
|
|
|
60
|
%
|
|
82.6
|
%
|
$
|
224,023
|
|
SPX Corporation Executive Annual Bonus Plan
Bonuses to NEOs are paid under the 162(m) Plan (as defined in “Tax Matters” on page 29). Under the 162(m) Plan, the threshold for at least one metric must be met in order for any bonus to be paid. For 2016, at least one performance metric applicable to the NEOs under the 162(m) Plan was met, and therefore the maximum payment amount permitted under the 162(m) Plan was achieved. However, after reviewing overall Company results for 2016, the Committee exercised its negative discretion and reduced the payout under the 162(m) Plan to 83.2%. This payout applied to all our NEOs, with the exception of Mr. Swann, whose payout was 20.8% based on both business unit and corporate results. The preceding percentages were determined by reference to metrics under the Executive Bonus Program—for a more detailed description of bonus payment determinations, see “Executive Bonus Program” on page 25.
Equity-Based AwardsLong-Term Incentives
Long-term incentives are an integral part of our executive compensation program. They are designed to align the financial interests of our NEOs with those of our stockholders through performance-based compensation that correlates with the creation of long-term stockholder value. Our long-term incentive awards also support our executive retention strategy.
For 2016,2019, the Committee approved the following mix of long-term equity incentiveLTI awards, which awards were granted in March 2016February 2019 under our stockholder approved 2002 Stock Plan:plans:
Options (“Options”);that vest ratably over a three-year period;
PSUs tied tor-TSR and a peer group within the S&P 600 Capital Goods Index over a three-year performance measurement period, capped atwith potential payout range of 0% to 150% of target, and cannot exceed target if our TSR is negative;
RSUs that vest ratably over a three-year performance measurement period that is alignedperiod.
50% of the award value was allocated to PSUs with external commitments;the remaining 50% divided equally between Options and
EXECUTIVE COMPENSATION
RSUs.
Our NEOs received the following long-term equityincentive award opportunities in 2016:2019:
Named Executive Officer | Target LTI Value | Units | ||||||||||||||||||||||||||||||||||
Target LTI
| Units
| |||||||||||||||||||||||||||||||||||
Named Executive Officer | Target LTI Value | Options | PSUs | CPUs | RSUs | Options
| PSUs
| RSUs
| ||||||||||||||||||||||||||||
186,919 | 62,300 | 629,126 | 62,300 |
$
|
3,600,000
|
|
|
77,463
|
|
|
56,409
|
|
|
28,204
|
| |||||||||||||||||||||
Scott W. Sproule | $ | 625,000 | 46,729 | 15,575 | 157,281 | 15,575 |
$
|
780,000
|
|
|
16,784
|
|
|
12,222
|
|
|
6,111
|
| ||||||||||||||||||
J Randall Data | $ | 500,000 | 37,383 | 12,460 | 125,825 | 12,460 | ||||||||||||||||||||||||||||||
J. Randall Data
|
$
|
750,000
|
|
|
16,138
|
|
|
11,752
|
|
|
5,876
|
| ||||||||||||||||||||||||
John W. Nurkin | $ | 415,000 | 31,028 | 10,341 | 104,435 | 10,341 |
$
|
520,000
|
|
|
11,189
|
|
|
8,148
|
|
|
4,074
|
| ||||||||||||||||||
John W. Swann, III | $ | 425,000 | 31,776 | 10,591 | 106,951 | 10,591 |
$
|
630,000
|
|
|
13,556
|
|
|
9,872
|
|
|
4,936
|
|
The allocation of Options were based on the SPX Black-Scholes valuation.valuation and RSUs and PSUs were based off ofon the average closing fair market value of SPX stock for the 15 trading days immediately preceding the date of grant; and CPUs were valued at $1.00 per unit, with assumed payment at the 100% target amount.grant.
Stock Options
The 2016In 2019, awards of Options were granted to eligible participants, including each of the NEOs under the terms of our stockholder-approved 2002 Stock Plan.NEOs. The Committee approved the 20162019 Option grants to the NEOs in March 2016.February 2019. The 20162019 Options grant agreement provides for time-based ratable vesting (of 331⁄/3 percent per year) over a three-year period (generally subject to continued employment during the period) with a maximum term of ten years. The Committee approves all grants allof Options to be issued by the Company pursuant to approved equity grant guidelines.
2020 PROXY STATEMENT | 27 |
EXECUTIVE COMPENSATION
Performance ShareStock Units
The 20162019 awards of PSUs providedprovide eligible participants, including each of the NEOs, the opportunity to receive shares of common stock based onpre-established financial performance targets over a specified three-year period (and generally subject to continued employment during the performance period). The performance criteria for the PSUs are based on ther-TSR of SPX as compared to the results of a peer group within the S&P 600 Capital Goods Index. At grant date, this peer group was comprised of 5961 companies that compete in similar markets. Payouts under the program are made in shares of our common stock and range from 0% to 150% based on our TSR achievement versus the peer group. Payout is capped atcannot exceed target if our TSR return is negative.
Cash Performance Units
As part of the 2016 long-term incentive program, participants, including each of the NEOs, have the opportunity to receive cash incentive payments based on SPX’s performance over a specified three-year period in the form of CPUs (and generally subject to continued employment during the performance period). CPU payments are based on SPX’s actual performance over the three-year performance cycle beginning with the fiscal year in which the CPU is granted. In March 2016, the Committee granted three-year CPUs with a performance period ending December 31, 2018. Payouts under the program range from 0% to 150% based on achievement of cumulative segment income targets, and each unit has a par value of $1.00.
Restricted Stock Units
As part of the 20162019 long-term incentive program, participants, including each of the NEOs, received RSUs under our stockholder-approved 2002 Stock Plan.RSUs. The Committee approved the 20162019 RSU grants to the NEOs in March 2016.February 2019. The 20162019 RSU grant agreement provides for time-based ratable vesting (of 33 1⁄/3 percent per year) over a three-year period (generally subject to continued employment during the period). The Committee approves all grants allof RSUs to be issued by the Company pursuant to approved equity grant guidelines.
Outstanding equity awards are more fully described in the “Outstanding Equity Awards at FiscalYear-End” table in “Executive Compensation,” beginning on page 35.36.
Equity ConversionPerformance Based Incentive Results for Pre Spin-Off Grants2017-2019
Equity granted prior
• | Performance Stock Units. The performance metric for PSUs measuresr-TSR compared to a peer group within the S&P 600 Capital Goods Index. The grant of PSUs made in February 2017 covered the measurement period of January 1, 2017 through December 31, 2019. Total stockholder return delivered in the measurement period was 105%, which ranked in the 91st percentile, compared to threshold of 30th percentile, target of 50th percentile, and maximum of 75th percentile. The resulting performance achievement of the February 2017 grant exceeded the maximum allowable and, therefore, is capped at 150% payout of the PSUs. The final amount of the payout accounts for both the appreciation of the value of stock since the time of the grant and the 150% performance award. |
• | Cash Performance Units. As part of the 2017 long-term incentive program, participants, including each of the NEOs, received cash performance units with the opportunity to receive cash incentive payments based on SPX’s performance over a specified three-year period (and generally subject to continued employment during the performance period). CPU payments are based on SPX’s actual performance over the three-year performance cycle beginning with the fiscal year in which the CPU is granted. In February 2017, the Committee granted three-year CPUs with a performance period ending December 31, 2019. Payouts under the program range from 0% to 150% based on achievement of three-year cumulative adjusted segment income* targets, and each unit has a par value of $1.00. The performance metric for CPUs measures three-year cumulative adjusted segment income.* The grant of CPUs made in February 2017 covered the measurement period of January 1, 2017 through December 31, 2019. Adjusted segment income* achieved in the measurement period was $608.3M, compared to threshold of $512.0M, target of $536.0M, and maximum of $560.7M. The resulting performance achievement of the February 2017 grant exceeded the maximum allowable and, therefore, is capped at 150% payout of the CPUs. As noted above, CPUs were discontinued in 2019. |
*Non-GAAP financial measure. Reconciliations of amounts presented asnon-GAAP financial measures with the Spin-Off was converted to post-Spin-Off SPX equity based on a conversion factor. Prior toamounts of the Spin-Off,most comparable measures calculated and presented in accordance with GAAP, and other important information regardingnon-GAAP financial measures, are presented in the three-day simple average was used in comparison to the post-Spin-Off six-day simple average to determine the share ratioappendix of 4.0589 and the price ratio of 0.25.this Proxy Statement.
EXECUTIVE COMPENSATION
Individuals holding pre-Spin-Off unvested shares who continued their employment with SPX after the Spin-Off received 4.0589 unvested shares for each share of pre-Spin-Off SPX unvested equity. However, the value of the post-Spin-Off shares was 25% of the value of the pre-Spin-Off shares. With regard to vested shares of Company stock, employees were treated the same as other stockholders and each received one share of FLOW and one share of post-Spin-Off SPX stock (SPXC) for each share of pre-Spin-Off SPX stock (SPW) owned as of the Spin-Off transaction record date.
For example, pre-Spin-Off, Mr. Lowe was granted 3,554 RSUs in January 2015. At Spin-Off, using the average three-day share price of $49.60, the fair market value of this award was $176,278 (3,554 RSUs x $49.60). Application of the share conversion factor of 4.0589 resulted in the number of shares converted to post-Spin-Off shares of SPX totaling 14,425 (3,554 RSUs x 4.0589). Based on the average six-day share price of post-Spin-Off SPX stock of $12.22, the converted fair market value of this grant was virtually the same post-Spin-Off as it was pre-Spin-Off at $176,274 (14,425 RSUs x $12.22).
The increase in the number of shares to participants is offset by the reduction in the underlying value of the equity.
Results of 2014-2016 Performance Cycle
Prior to the Spin-Off, on August 20, 2015, the former members of the Committee approved a 50% floor on the vesting of the performance-based equity awards that were granted as part of the long-term incentive awards provided to non-officers in 2014 (for the 2014-2016 performance cycle, based on r-TSR vs. the S&P Composite 1500 Industrials Index). Accordingly, in 2016, each of Mr. Lowe’s, Mr. Sproule’s, Mr. Nurkin’s, and Mr. Swann’s PSUs, awarded when each was not an officer, vested at 50% for the performance period of post-Spin-Off converted target shares (6,021, 5,100, 3,399, and 3,897, respectively). This vesting in 2016 was the last year affected by this floor put into place prior to the Spin-Off.
OTHER PRACTICES, POLICIES, AND GUIDELINES
Policy on Hedging
No SPX director or employee may trade in derivative securities relating to SPX securities, such as put and call options or forward transactions.
Policy on Pledging
No SPX director or officer may pledge SPX securities. This policy was instituted in 2016.
Stock Ownership Guidelines
Our Stock Ownership Guidelines are designed to help ensure our officers’ interests are closely aligned with those of our long-term stockholders. Additional detail can be found in “Ownership of Common Stock”Stock—Stock Ownership Guidelines” on page 15.16.
Impact on Compensation from Misconduct–Clawbacks
If the Board were to determine that a NEO had engaged in fraudulent or intentional misconduct, it would take action to remedy the misconduct and impose appropriate discipline. Discipline would vary based on the facts and circumstances, but may include termination of employment and/or other appropriate actions.
We retroactively adjust compensation in the event of a restatement of financial or other performance results to the extent required by the Sarbanes-Oxley Act of 2002. The 162(m) Plan (defined in “Tax Matters” on page 29)Our executive bonus program provides for repayment or forfeiture of awards under specified circumstances if the Company, as a result of misconduct, is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. Any awards earned or accrued during the12-month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document that failed to materially comply with a financial reporting requirement must be paid back to the Company. To the extent that the affected award was deferred under a nonqualified deferred compensation plan maintained by the Company rather than paid to the executive officer, the deferred amount (and any earnings from it) must be forfeited. Beginning in 2013, our equity award agreements have provided that awards are subject to any compensation recovery policy adopted by the Company, as amended from time to time.
Other Benefits and Perquisites
We provide perquisites to attract and retain executives in a competitive marketplace, and we believe these benefits are generally consistent with market practices of our peer group and other comparable public industrial manufacturing companies. For a full listing of benefits and perquisites, see the “Summary Compensation Table” and accompanying footnotes beginning on page 32. We do not provide taxgross-up payments for perquisites.
EXECUTIVE COMPENSATION
Our CEO may utilize our aircraft for personal travel for himself and his family. Other executive officers may be permitted personal use of our aircraft for themselves and their families if approved by our CEO. We report the value of any personal use of our corporate aircraft by NEOs as ordinary taxable income based on Standard Industry Fare Levels and as compensation in the Summary Compensation Table on page 32.32 based on our incremental costs.
Retirement and Deferred Compensation Plans
None of our NEOs participate in aan SPX defined benefit pension plan.
Our executives, along with the majority of our U.S.-based employee population, are eligible to receive matching contributions into the SPX Corporation Retirement Savings and Stock Ownership Plan (the “401(k) Plan”), atax-qualified retirement savings plan. Matching contributions are immediately vested and are invested initially in the SPX Common Stock Fund in the form of units. The units consistThis fund under the 401(k) Plan is primarily ofinvested in SPX common stock, with a small portion of the fund in cash, for purposes of administrative convenience.
Executive officers and other senior-level management employees are also eligible to participate in the SPX Corporation Supplemental Retirement Savings Plan (the “SRSP”), anon-qualified deferred compensation plan that permits voluntary deferrals of base salary and annual bonuses.
For more information regarding these plans, see the Nonqualified Deferred Compensation table and accompanying narrative and footnotes, beginning on page 37.38.
2020 PROXY STATEMENT | 29 |
EXECUTIVE COMPENSATION
Termination andChange-in-Control Provisions
We design termination and change-in-control contractual provisions to be competitive at the time we enter into an agreement. As a result, our agreements have changed over time, with newer agreements generally offering reduced payments and increased vesting obligations. As described below, all our NEOs, except our Chief Executive Officer,CEO, have entered into the most current form of ourchange-in-control agreement as filed with the SEC.
On September 28, 2015, the Committee recommended, and the Board approved, an employment agreement and achange-in-control agreement for Mr. Lowe, President and Chief Executive Officer, and severance benefit agreements andchange-in-control agreements for all other executive officers. The Committee reviews these agreements annually considering stakeholder interests and market competitiveness and will address adjustments as it deems appropriate.
Our severance arrangements are designed to protect stockholder interests by stabilizing management during periods of uncertainty. Executives often assign significant value to severance agreements because these agreements provide compensation for lost professional opportunities in the event of a negative qualifying event following achange-in-control.
Severance agreements can also be a powerful tool to discourage entrenchment of management, in that these agreements can offset the risk of financial and professional loss that management may face when recommending a sale to or merger with another company. Our severance arrangements are structured to serve the above functions, which differ, and are perceived by recipients to differ, from pay for performance. Accordingly, decisions relating to other elements of compensation have minimal effect on decisions relating to existing severance agreements. As described above, all our NEOs, except our Chief Executive Officer,CEO, have entered into the most current form of our severance benefit agreement as filed with the SEC.
Post-Spin-Off, SPX utilizesWe utilize a double-trigger in the event of achange-in-control. If the executive officer experiences a qualifying negative employment action following achange-in-control, then the executive officer becomes immediately vested in all previously-granted unvested SPX equity, including shares subject to performance vesting, at the target level of vesting. This feature is designed to be equitable in the event of dismissal without cause or resignation for good reason, and we believe it is appropriate in the event of termination following achange-in-control.
Severance andchange-in-control terms are further discussed and quantified in “Potential Payments Upon Termination orChange-in-Control,” beginning on page 38.
Tax Matters
We seek to structure executive compensation in a tax-efficient manner and review compensation plans in light of applicable tax provisions, including Section 162(m) of the Internal Revenue Code. To maintain flexibility in structuring executive compensation to achieve its goals consistent with its compensation philosophy, the Committee has not adopted a policy
EXECUTIVE COMPENSATION
requiring all compensation to be tax deductible. We generally structure our executive officer bonuses to be tax deductible, and therefore a separate plan, the SPX Corporation Executive Annual Bonus Plan (the “162(m) Plan”), determines whether each executive officer qualifies for the payment of bonuses described above and sets a cap on the amount of bonus that may be awarded and treated as tax deductible.
The Committee may set the amounts payable under the 162(m) Plan (subject to the maximum amount permitted under the 162(m) Plan and applicable performance metrics being met). While the Committee can exercise its discretion to reduce any bonus payable under the 162(m) Plan, the Committee does not have discretion to increase the bonus payable under the 162(m) Plan.39.
Notes
The discussion of performance targets in this CD&A is exclusively in the context of executive compensation and should not be used for any other purpose or regarded as an indication of management’s expectations of future results.
References to “bonus” or “bonuses” in this CD&A and the compensation tables are to our annual performance-based payments reflected as “Non-Equity“Non-Equity Incentive Plan Compensation” in the “Summary Compensation Table” on page 32 and “Estimated Future Payouts underNon-Equity Incentive Plan Awards” in the “Grants of Plan BasedPlan-Based Awards” table on page 34.35.
Management regularly monitors and reviews our compensation program and the related risks and reports its findings to the Committee.
We do not believe our compensation policies and practices give rise to risks that are reasonably likely to have a material adverse effect on our Company. In reaching this conclusion, we considered the following factors:
Our compensation program is designed to provide a mix of both fixed and variable incentive compensation.
The variable portions of compensation (cash incentive and equity awards) are designed to reward both annual performance and longer-term performance. We believe this design mitigates any incentive for short-term risk-taking that could be detrimental to our Company’s long-term best interests.
For business unit level executives, a significant percentage of our executives’their compensation is based on the performance of our Company as a whole. This is designed to mitigate any incentive to pursue strategies that might maximize the performance of a single operating divisionbusiness unit to the detriment of our Company as a whole.
30 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
Our executive officers are subject to stock ownership guidelines that we believe incentivize our executives to consider the long-term interests of our Company and our stockholders and discourage excessive risk-taking that could negatively impact our stock price.
The Compensation Committee exercises risk oversight of our executive compensation program.
A qualitative risk assessment concluded that our plans do not have an unreasonable ratio between fixed and variable compensation. The annual bonus plans are capped at specified maximum percentages, which limits incentives to undertake excessive risk.
The executive and management annual bonus plans also have clawback provisions relating to any fraud, manipulation, or negligence in connection with computation of performance measures or payments under the plans.
Incentive plans are primarily determined by a formula tied directly to Company performance.
Sales incentive plans are regularly reviewed.
In addition to the structure of our plans, we mitigate any risk that may be generated by compensation plans through management oversight, compliance training and enforcement, and periodic reviews.
No single SPX business unit carries a significant portion of the Company’s risk profile, or has compensation structured in a significantly different manner than other business units within the Company, regardless of relative business unit profitability or compensation expense as a percentage of revenues.
Management does not believe that any of the design features pose a significant concern. Based upon this analysis, we determined that the compensation programs do not present a material risk.
EXECUTIVE COMPENSATION
The Compensation Committee of the SPX Board of Directors consists of threefour directors. Each of the Committee members is independent, as defined under SEC rules and the listing standards of the NYSE. Additionally, each member of the Committee is an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code. The Committee reviews SPX’s “Compensation Discussion and Analysis” on behalf of the Board.
The Committee has reviewed and discussed the “Compensation Discussion and Analysis” with management, and based on the review and discussions, the Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and SPX’s Annual Report on Form10-K for the year ended December 31, 2016.2019.
Compensation Committee,
David A. Roberts, Chairman
Ricky D. Puckett
Ruth G. Shaw
Robert B. Toth
| 31 |
EXECUTIVE COMPENSATION
The following table summarizes the compensation for our named executive officers during 2016.2019. The “named executive officers” or “NEOs” are our Chief Executive Officer, our Chief Financial Officer, and our next three most highly compensated officers who were serving as officers as of December 31, 2016.officers.
Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(5) | Total ($) | |||||||||||||||||||||||||||
Eugene J. Lowe, III President and Chief |
|
2016 |
|
$ |
784,084 |
|
$ |
— |
|
$ |
1,844,703 |
|
$ |
768,237 |
|
$ |
654,472 |
|
$ |
— |
|
$ |
53,494 |
|
$ |
4,104,990 |
| |||||||||
|
2015 |
|
$ |
511,692 |
|
$ |
— |
|
$ |
1,742,982 |
|
$ |
1,555,156 |
|
$ |
513,246 |
|
$ |
— |
|
$ |
48,047 |
|
$ |
4,371,123 |
| ||||||||||
Scott W. Sproule Vice President, Chief |
|
2016 |
|
$ |
414,806 |
|
$ |
— |
|
$ |
461,176 |
|
$ |
192,056 |
|
$ |
242,366 |
|
$ |
— |
|
$ |
49,623 |
|
$ |
1,360,027 |
| |||||||||
|
2015 |
|
$ |
358,861 |
|
$ |
— |
|
$ |
1,007,677 |
|
$ |
312,495 |
|
$ |
192,633 |
|
$ |
— |
|
$ |
29,281 |
|
$ |
1,900,947 |
| ||||||||||
J Randall Data President, South Africa and | 2016 | $ | 406,251 | $ | — | $ | 368,941 | $ | 153,644 | $ | 203,674 | $ | — | $ | 32,532 | $ | 1,165,042 | |||||||||||||||||||
John W. Nurkin Vice President, Secretary |
|
2016 |
|
$ |
333,868 |
|
$ |
— |
|
$ |
306,197 |
|
$ |
127,525 |
|
$ |
167,207 |
|
$ |
— |
|
$ |
18,862 |
|
$ |
953,659 |
| |||||||||
|
2015 |
|
$ |
296,827 |
|
$ |
— |
|
$ |
731,711 |
|
$ |
207,499 |
|
$ |
137,322 |
|
$ |
— |
|
$ |
22,896 |
|
$ |
1,396,255 |
| ||||||||||
John W. Swann, III President, Weil-McLain, |
|
2016 |
|
$ |
404,689 |
|
$ |
— |
|
$ |
313,600 |
|
$ |
130,599 |
|
$ |
50,669 |
|
$ |
— |
|
$ |
35,110 |
|
$ |
934,667 |
| |||||||||
|
2015
|
|
$
|
357,768
|
|
$
|
—
|
|
$
|
694,548
|
|
$
|
249,999
|
|
$
|
140,953
|
|
$
|
—
|
|
$
|
28,753
|
|
$
|
1,472,021
|
|
Name and Principal Position
| Year
| Salary ($)(1)
| Bonus ($)
| Stock Awards ($)(2)
| Option Awards ($)(3)
| Non-Equity Incentive Plan Compensation ($)(4a) (4b)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)
| All Other Compensation ($)(5)
| Total ($)
| ||||||||||||||||||||||||||||||||||||
Eugene J. Lowe, III President and Chief Executive Officer
|
|
2019
|
|
$
|
877,679
|
|
$
|
—
|
|
$
|
3,457,007
|
|
$
|
1,031,033
|
|
$
|
2,181,068
|
|
$
|
—
|
|
$
|
61,881
|
|
$
|
7,608,668
|
| ||||||||||||||||||
|
2018
|
|
$
|
845,508
|
|
$
|
—
|
|
$
|
1,725,579
|
|
$
|
842,995
|
|
$
|
1,750,186
|
|
$
|
—
|
|
$
|
130,254
|
|
$
|
5,294,522
|
| |||||||||||||||||||
|
2017
|
|
$
|
817,551
|
|
$
|
—
|
|
$
|
1,654,860
|
|
$
|
791,088
|
|
$
|
1,548,723
|
|
$
|
—
|
|
$
|
79,241
|
|
$
|
4,891,463
|
| |||||||||||||||||||
Scott W. Sproule Vice President, Chief FinancialOfficer and Treasurer |
|
2019
|
|
$
|
473,165
|
|
$
|
—
|
|
$
|
749,026
|
|
$
|
223,395
|
|
$
|
675,188
|
|
$
|
—
|
|
$
|
58,936
|
|
$
|
2,179,710
|
| ||||||||||||||||||
|
2018
|
|
$
|
455,821
|
|
$
|
—
|
|
$
|
417,510
|
|
$
|
203,957
|
|
$
|
540,275
|
|
$
|
—
|
|
$
|
24,882
|
|
$
|
1,642,445
|
| |||||||||||||||||||
|
2017
|
|
$
|
439,055
|
| $
| —
|
| $
| 399,501
|
| $
| 190,954
|
| $
| 584,452
|
| $
| —
|
| $
| 46,892
|
| $
| 1,660,854
|
| |||||||||||||||||||
J. Randall Data President, South Africaand Global Operations
|
|
2019
|
|
$
|
459,615
|
|
$
|
—
|
|
$
|
720,222
|
|
$
|
214,797
|
|
$
|
615,986
|
|
$
|
—
|
|
$
|
46,556
|
|
$
|
2,057,176
|
| ||||||||||||||||||
|
2018
|
|
$
|
442,327
|
|
$
|
—
|
|
$
|
389,708
|
|
$
|
190,361
|
|
$
|
463,259
|
|
$
|
—
|
|
$
|
44,326
|
|
$
|
1,529,981
|
| |||||||||||||||||||
|
2017
|
|
$
|
425,645
|
|
$
|
—
|
|
$
|
370,928
|
|
$
|
177,322
|
|
$
|
524,618
|
|
$
|
—
|
|
$
|
33,566
|
|
$
|
1,532,079
|
| |||||||||||||||||||
John W. Nurkin Vice President, General Counseland Secretary |
|
2019
|
|
$
|
379,482
|
|
$
|
—
|
|
$
|
499,350
|
|
$
|
148,926
|
|
$
|
461,545
|
|
$
|
—
|
|
$
|
21,918
|
|
$
|
1,511,221
|
| ||||||||||||||||||
|
2018
|
|
$
|
366,253
|
|
$
|
—
|
|
$
|
281,164
|
|
$
|
137,331
|
|
$
|
366,681
|
|
$
|
—
|
|
$
|
43,735
|
|
$
|
1,195,164
|
| |||||||||||||||||||
| 2017
|
| $
| 350,752
|
| $
| —
|
| $
| 271,096
|
| $
| 129,581
|
| $
| 399,442
|
| $
| —
|
| $
| 32,558
|
| $
| 1,183,429
|
| |||||||||||||||||||
John W. Swann, III President, Heating and Location& Inspection |
|
2019
|
|
$
|
447,778
|
|
$
|
—
|
|
$
|
605,005
|
|
$
|
180,430
|
|
$
|
398,398
|
|
$
|
—
|
|
$
|
48,850
|
|
$
|
1,680,461
|
| ||||||||||||||||||
|
2018
|
|
$
|
428,079
|
|
$
|
—
|
|
$
|
295,031
|
|
$
|
144,129
|
|
$
|
500,255
|
|
$
|
—
|
|
$
|
37,957
|
|
$
|
1,405,451
|
| |||||||||||||||||||
|
2017
|
|
$
|
415,577
|
|
$
|
—
|
|
$
|
265,370
|
|
$
|
126,854
|
|
$
|
233,344
|
|
$
|
—
|
|
$
|
36,919
|
|
$
|
1,078,064
|
|
(1) | NEOs are eligible to defer up to 50% of their salaries into the |
Name | Deferred into 401(k) Plan | Deferred into SRSP | ||||||
Eugene J. Lowe, III | $ | 11,923 | $ | 38,094 | ||||
Scott W. Sproule | $ | 9,462 | $ | 40,306 | ||||
J Randall Data | $ | 12,704 | $ | 13,009 | ||||
John W. Nurkin | $ | 7,014 | $ | — | ||||
John W. Swann, III | $ | 11,538 | $ | 42,084 |
Name
|
Deferred into 401(k) Plan
|
Deferred into SRSP
| ||||||||||||
|
Eugene J. Lowe, III
|
$
|
13,088
|
|
$
|
—
|
| |||||||
Scott W. Sproule
|
$
|
10,584
|
|
$
|
38,455
|
| ||||||||
J. Randall Data
|
$
|
8,567
|
|
$
|
22,412
|
| ||||||||
John W. Nurkin
|
$
|
5,681
|
|
$
|
—
|
| ||||||||
John W. Swann, III
|
$
|
12,425
|
|
$
|
54,669
|
|
(2) | Stock Award grants are generally subject to performance or time-vesting conditions. The amounts reported in the above table were calculated in accordance with FASB Accounting Standard Codification Topic 718 (“Topic 718”) to reflect their grant date |
(3) | Option Awards reflect the fair-value at time of grant in accordance with Topic 718 to reflect their grant date fair value given vesting requirements. See note |
32 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
(4a) | In |
Name | Deferred into 401(k) Plan | Deferred into SRSP | ||||||
Eugene J. Lowe, III | $ | 5,898 | $ | 32,145 | ||||
Scott W. Sproule | $ | 8,397 | $ | — | ||||
J Randall Data | $ | 12,508 | $ | — | ||||
John W. Nurkin | $ | 12,847 | $ | — | ||||
John W. Swann, III | $ | 6,288 | $ | — |
Name
|
Deferred into 401(k) Plan
|
Deferred into SRSP
| ||||||||||||
|
Eugene J. Lowe, III
|
$
|
5,888
|
|
$
|
—
|
| |||||||
Scott W. Sproule
|
$
|
8,493
|
|
$
|
—
|
| ||||||||
J. Randall Data
|
$
|
17,090
|
|
$
|
—
|
| ||||||||
John W. Nurkin
|
$
|
14,241
|
|
$
|
—
|
| ||||||||
John W. Swann, III
|
$
|
6,454
|
|
$
|
3,899
|
|
(4b) | Includes the following CPU payouts for the 2017-2019 performance period, based on 150% maximum performance achieved: |
Name |
EXECUTIVE COMPENSATION
Cash Performance
Unit
Eugene J. Lowe, III
$
1,087,500
Scott W. Sproule
$
262,500
J. Randall Data
$
243,750
John W. Nurkin
$
178,125
John W. Swann, III
$
174,375
(5) | All Other Compensation for |
All Other Compensation | Eugene J. Lowe, III | Scott W. Sproule | J Randall Data | John W. Nurkin | John W. Swann, III | Eugene J. Lowe, III | Scott W. Sproule | J. Randall Data | John W. Nurkin | John W. Swann, III | ||||||||||||||||||||||||||||||
Relocation—Taxable(a) | — | — | $ | 6,920 | — | — | ||||||||||||||||||||||||||||||||||
Financial Planning | $ | 700 | $ | 8,560 | — | $ | 475 | $ | 4,807 |
$
|
—
|
|
$
|
13,947
|
|
$
|
12,171
|
|
$
|
985
|
|
$
|
2,876
|
| ||||||||||||||||
Executive Physical | — | — | — | $ | 644 | $ | 591 |
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,013
|
| ||||||||||||||||||
SPX Foundation Matching Gift(b) | $ | 150 | $ | 10,000 | — | $ | 2,500 | — | ||||||||||||||||||||||||||||||||
Company Aircraft Personal Use(c) | $ | 5,939 | — | — | — | — | ||||||||||||||||||||||||||||||||||
Group Term Life (>$50,000) | $ | 1,710 | $ | 1,019 | $ | 1,521 | $ | 1,993 | $ | 2,434 | ||||||||||||||||||||||||||||||
SPX Foundation Matching Gift(a)
|
$
|
10,000
|
|
$
|
10,000
|
|
$
|
—
|
|
$
|
3,450
|
| $
| 2,730
|
| |||||||||||||||||||||||||
Company Aircraft Personal Use(b)
|
$
|
754
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
| |||||||||||||||||||||||||
Group Term Life (>50k)
|
$
|
2,622
|
|
$
|
1,761
|
|
$
|
1,708
|
|
$
|
3,431
|
|
$
|
2,875
|
| |||||||||||||||||||||||||
Retirement Savings Plan Match | $ | 13,250 | $ | 13,250 | $ | 13,250 | $ | 13,250 | $ | 13,250 |
$
|
14,000
|
|
$
|
14,000
|
|
$
|
14,000
|
|
$
|
14,000
|
|
$
|
14,000
|
| |||||||||||||||
Supplemental Retirement Savings Plan Match | $ | 31,745 | $ | 16,794 | $ | 10,841 | — | $ | 14,028 |
$
|
34,505
|
|
$
|
19,228
|
|
$
|
18,677
|
|
$
|
52
|
|
$
|
25,356
|
| ||||||||||||||||
Total | $ | 53,494 | $ | 49,623 | $ | 32,532 | $ | 18,862 | $ | 35,110 |
$
|
61,881
|
|
$
|
58,936
|
|
$
|
46,556
|
|
$
|
21,918
|
|
$
|
48,850
|
|
(a) |
We will make matching donations for charitable contributions made by employees up to a total of $5,000 per annum. |
Represents |
CEO Employment Agreement
The above benefits for Mr. Lowe are provided pursuant to the terms of his employment agreement. His employment agreement provides for annual base salary levels, annual incentive compensation opportunity, severance entitlements, and allowance amounts for annual income tax return preparation and financial planning. The initial term of Mr. Lowe’s employment agreement expiresexpired on December 31, 2017, and the term willagreement automatically renewrenews in additional subsequent one year-long terms unless at least 180 days prior to the expiration of the initial or any subsequent extended term one of the parties provides the other party with a written notice ofnon-renewal.
See “Compensation Discussion and Analysis,” beginning on page 18, for further discussion and explanation of each element of compensation.
CEO Pay Ratio
We have calculated the CEO pay ratio in accordance with the rules of the SEC, which rules do not prescribe a particular method for identifying the median-compensated employee and permit companies to use reasonable methodologies for determining the median-compensated employee for the basis of presenting this ratio. SEC rules require a company to identify the median-compensated employee only once every three years, absent changes during the most recent year to the employee population or in the employee compensation arrangements with the median-compensated that would reasonably result in a significant change to the reported pay ratio. Because there were no such changes in 2019, we elected to use the median-compensated employee identified in 2018 and use that employee’s total compensation in 2019 in calculating the ratio.
| 33 |
EXECUTIVE COMPENSATION
The 2019 annual total compensation for the identified median employee was $62,953 and the annual total compensation of our CEO was $7,608,668. Based on this information, for 2019 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 121 to 1.
To identify the median-compensated employee in 2018, we conducted a full analysis of our total employee population as of December 31, 2018, without the use of statistical sampling. We determined our median-compensated employee using “total compensation” paid during the full year 2018. Total compensation consisted of gross wages to include base wages, overtime, shift differential, incentives, paid time off, and perquisites, as applicable. We did not annualize gross wages for employees who were not employed for the full year in 2018. For those employees located outside of the US, currencies were converted to US Dollars using the posted Bloomberg market rates as of December 27, 2018. We had an even number of employees when not including the CEO, therefore there are two employees for whom the number of employees with greater “total compensation” equals the number of employees with less “total compensation.” From those two employees, we selected as the median-compensated employee the one with lower “total compensation.” In determining the pay ratio for 2019, we calculated the total compensation of the median-compensated employee using the same methodology used in calculating the total compensation of our CEO, as reported in the Summary Compensation Table on page 32.
This pay ratio is a reasonable estimate calculated in a manner consistent with item 402(u) of RegulationS-K of the SEC using the data and methodology summarized above. As noted above, SEC rules for identifying the median-compensated employee allow companies to adopt a variety of methodologies to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the median employee compensation amount and CEO pay ratio reported by other companies may not be comparable to the amount and ration reported above.
34 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
The following table provides information regarding equity andnon-equity awards granted to the NEOs in 2016.2019.
Estimated Future Payouts Under Non-Equity Incentive Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | Estimated Future Payouts UnderNon-Equity Incentive | Estimated Future Payouts Under Equity Incentive Plan Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date(1) | Threshold (#)(2) | Target (#)(2) | Maximum (#)(2) | Threshold (#)(3) | Target (#)(3) | Maximum (#)(3) | All (#)(4) | Stock Option Awards (#)(5) | Exercise Price of Stock Option Awards ($) | Grant Date Fair Value of Stock and Option Awards ($)(6) | Grant Date(1) | Threshold ($)(2) | Target ($)(2) | Maximum ($)(2) | Threshold (#)(3) | Target (#)(3) | Maximum (#)(3) | All Other (#)(4) | Stock Option Awards (#)(5) | Exercise Price of Stock Option Awards ($) | Grant Date Fair Value Stock and Option Awards ($)(6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eugene J. Lowe, III | 3/2/2016 | 31,150 | 62,300 | 93,450 | $ | 1,044,148 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 314,563 | 629,126 | 943,689 |
|
2/11/2019
|
|
|
442,382
|
|
|
884,764
|
|
|
1,769,528
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 62,300 | $ | 800,555 |
|
2/21/2019
|
|
|
28,205
|
|
|
56,409
|
|
|
84,614
|
|
$
|
2,427,279
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 186,919 | $ | 12.85 | $ | 768,237 |
|
2/21/2019
|
|
|
28,204
|
|
$
|
1,029,728
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/8/2016 | 393,313 | 786,625 | 1,573,250 |
|
2/21/2019
|
|
|
77,463
|
|
$
|
36.51
|
|
$
|
1,031,033
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott W. Sproule | 3/2/2016 | 7,788 | 15,575 | 23,363 | $ | 261,037 |
|
2/11/2019
|
|
|
166,945
|
|
|
333,890
|
|
|
667,780
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 78,641 | 157,281 | 235,922 |
|
2/21/2019
|
|
|
6,111
|
|
|
12,222
|
|
|
18,333
|
|
$
|
525,913
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 15,575 | $ | 200,139 |
|
2/21/2019
|
|
|
6,111
|
|
$
|
223,113
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 46,729 | $ | 12.85 | $ | 192,056 |
|
2/21/2019
|
|
|
16,784
|
|
$
|
36.51
|
|
$
|
223,395
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/8/2016 | 145,653 | 291,305 | 582,610 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J Randall Data | 3/2/2016 | 6,230 | 12,460 | 18,690 | $ | 208,830 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 62,913 | 125,825 | 188,738 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 12,460 | $ | 160,111 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 37,383 | $ | 12.85 | $ | 153,644 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/8/2016 | 122,400 | 244,800 | 489,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 5,171 | 10,341 | 15,512 | $ | 173,315 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 52,218 | 104,435 | 156,653 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Randall Data |
|
2/11/2019
|
|
|
150,581
|
|
|
301,162
|
|
|
602,324
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
5,876
|
|
|
11,752
|
|
|
17,628
|
|
$
|
505,689
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
5,876
|
|
$
|
214,533
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
16,138
|
|
$
|
36.51
|
|
$
|
214,797
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Nurkin | 3/2/2016 | 10,341 | $ | 132,882 |
|
2/11/2019
|
|
|
114,652
|
|
|
229,304
|
|
|
458,608
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 31,028 | $ | 12.85 | $ | 127,525 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/8/2016 | 100,485 | 200,970 | 401,940 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Nurkin |
|
2/21/2019
|
|
|
4,074
|
|
|
8,148
|
|
|
12,222
|
|
$
|
350,608
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
4,074
|
|
$
|
148,742
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
11,189
|
|
$
|
36.51
|
|
$
|
148,926
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 5,296 | 10,591 | 15,887 | $ | 177,506 |
|
2/11/2019
|
|
|
135,679
|
|
|
271,357
|
|
|
542,714
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Swann, III | 3/2/2016 | 53,476 | 106,951 | 160,427 |
|
2/21/2019
|
|
|
4,936
|
|
|
9,872
|
|
|
14,808
|
|
$
|
424,792
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 10,591 | $ | 136,094 |
|
2/21/2019
|
|
|
4,936
|
|
$
|
180,213
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 31,776 | $ | 12.85 | $ | 130,599 |
|
2/21/2019
|
|
|
13,556
|
|
$
|
36.51
|
|
$
|
180,430
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/8/2016 | 121,800 | 243,600 | 487,200 |
(1) | The Committee approved the |
(2) | Represents the potential payout for |
(3) | Represents the potential payout for the PSUs granted on |
(4) | Represents the RSU awards for |
(5) | Represents the number of Options awarded on the grant date, and vest 331 |
(6) | Represents the grant date fair value, based on the closing price of our stock on the date of grant for RSUs. PSU grant date fair value is based on the Monte-Carlo simulation and Option valuation is based on the Black-Scholes valuation on the date of grant. Fair value is based on Topic 718. See the consolidated financial statements contained in our Annual Report on Form10-K for the year ended December 31, |
35 |
EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END
The following table details the outstanding equity awards held by each of our NEOs at December 31, 2016.2019.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Award Date | Number of Securities Underlying Unexercised Option Unexercisable (#)(1) | Number of Securities Underlying Unexercised Option Exercisable (#)(1) | Option Exercise Price ($)(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market or Payout Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | Equity Plan Number Shares, Other Have Not (#) | Equity Plan or Payout Unearned Shares, Other Have Not ($)(3) | Award Date | Number of Securities Underlying Unexercised Option Unexercisable (#)(1) | Number of Securities Underlying Unexercised Option Exercisable (#)(1) | Option Exercise Price ($)(2) | Option Expiration Date | Number of Shares or | Market or Payout Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | Equity Plan Number of Shares, Other Have Not | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eugene J. Lowe, III |
|
1/2/2015
|
|
|
45,776
|
|
$
|
21.16
|
|
|
1/2/2025
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
10/13/2015
|
|
|
332,673
|
|
$
|
12.36
|
|
|
10/13/2025
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
3/2/2016
|
|
|
186,919
|
|
$
|
12.85
|
|
|
3/2/2026
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 3,013 | (4a) | $ | 71,468 |
|
3/1/2017
|
|
|
9,537
|
(4a)
|
$
|
485,243
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 6,021 | (4b) | $ | 142,818 |
|
3/1/2017
|
|
|
42,917
|
(4b)
|
$
|
2,183,592
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2015 | 9,620 | (5a) | $ | 228,186 |
|
3/1/2017
|
|
|
27,469
|
|
|
54,936
|
|
$
|
27.40
|
|
|
3/1/2027
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2015 | 30,519 | 15,257 | $ | 21.16 | 1/2/2025 |
|
2/22/2018
|
|
|
16,841
|
(5a)
|
$
|
856,870
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 101,133 | (5d) | $ | 2,398,875 |
|
2/22/2018
|
|
|
37,892
|
(5b)
|
$
|
1,927,920
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 332,673 | $ | 12.36 | 10/13/2025 |
|
2/22/2018
|
|
|
48,199
|
|
|
24,099
|
|
$
|
32.69
|
|
|
2/22/2028
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 62,300 | (6a) | $ | 1,477,756 |
|
2/21/2019
|
|
|
28,204
|
(6a)
|
$
|
1,435,020
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 62,300 | (6b) | $ | 1,477,756 |
|
2/21/2019
|
|
|
84,614
|
(6b)
|
$
|
4,305,135
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 186,919 | $ | 12.85 | 3/2/2026 |
|
2/21/2019
|
|
|
77,463
|
|
$
|
36.51
|
|
|
2/21/2029
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott W. Sproule | 1/2/2014 | 2,553 | (4a) | $ | 60,557 |
|
10/13/2015
|
|
|
83,168
|
|
$
|
12.36
|
|
|
10/13/2025
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 5,100 | (4b) | $ | 120,972 |
|
3/2/2016
|
|
|
46,729
|
|
$
|
12.85
|
|
|
3/2/2026
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2015 | 11,540 | (5b) | $ | 273,729 |
|
3/1/2017
|
|
|
2,303
|
(4a)
| �� $
|
117,177
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/20/2015 | 6,766 | (5c) | $ | 160,490 |
|
3/1/2017
|
|
|
10,361
|
(4b)
|
$
|
527,142
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 25,283 | (5d) | $ | 599,713 |
|
3/1/2017
|
|
|
6,631
|
|
|
13,260
|
|
$
|
27.40
|
|
|
3/1/2027
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 83,168 | $ | 12.36 | 10/13/2025 |
|
2/22/2018
|
|
|
4,075
|
(5a)
|
$
|
207,336
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 15,575 | (6a) | $ | 369,439 |
|
2/22/2018
|
|
|
9,168
|
(5b)
|
$
|
466,468
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 15,575 | (6b) | $ | 369,439 |
|
2/22/2018
|
|
|
11,662
|
|
|
5,830
|
|
$
|
32.69
|
|
|
2/22/2028
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 46,729 | $ | 12.85 | 3/2/2026 |
|
2/21/2019
|
|
|
6,111
|
(6a)
|
$
|
310,928
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J Randall Data | 10/13/2015 | 20,227 | (5d) | $ | 479,784 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 13,485 | (5e) | $ | 319,864 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 66,535 | $ | 12.36 | 10/13/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 12,460 | (6a) | $ | 295,551 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 12,460 | (6b) | $ | 295,551 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 37,383 | $ | 12.85 | 3/2/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott W. Sproule |
|
2/21/2019
|
|
|
18,333
|
(6b)
|
$
|
932,783
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
16,784
|
|
$
|
36.51
|
|
|
2/21/2029
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
10/13/2015
|
|
|
66,535
|
|
$
|
12.36
|
|
|
10/13/2025
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
3/2/2016
|
|
|
37,383
|
|
$
|
12.85
|
|
|
3/2/2026
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
3/1/2017
|
|
|
2,138
|
(4a)
|
$
|
108,781
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
3/1/2017
|
|
|
9,620
|
(4b)
|
$
|
489,440
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
3/1/2017
|
|
|
6,157
|
|
|
12,314
|
|
$
|
27.40
|
|
|
3/1/2027
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/22/2018
|
|
|
3,804
|
(5a)
|
$
|
193,548
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/22/2018
|
|
|
8,558
|
(5b)
|
$
|
435,406
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/22/2018
|
|
|
10,884
|
|
|
5,442
|
|
$
|
32.69
|
|
|
2/22/2028
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
5,876
|
(6a)
|
$
|
298,971
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Randall Data |
|
2/21/2019
|
|
|
17,628
|
(6b)
|
$
|
896,913
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
16,138
|
|
$
|
36.51
|
|
|
2/21/2029
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
10/13/2015
|
|
|
55,224
|
|
$
|
12.36
|
|
|
10/13/2025
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
3/2/2016
|
|
|
31,028
|
|
$
|
12.85
|
|
|
3/2/2026
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 1,702 | (4a) | $ | 40,371 |
|
3/1/2017
|
|
|
1,563
|
(4a)
|
$
|
79,525
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 3,399 | (4b) | $ | 80,624 |
|
3/1/2017
|
|
|
7,031
|
(4b)
|
$
|
357,712
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2015 | 8,012 | (5b) | $ | 190,045 |
|
3/1/2017
|
|
|
4,500
|
|
|
8,998
|
|
$
|
27.40
|
|
|
3/1/2027
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
8/20/2015 | 6,766 | (5c) | $ | 160,490 |
|
2/22/2018
|
|
|
2,744
|
(5a)
|
$
|
139,615
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 16,788 | (5d) | $ | 398,211 |
|
2/22/2018
|
|
|
6,174
|
(5b)
|
$
|
314,133
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 55,224 | $ | 12.36 | 10/13/2025 |
|
2/22/2018
|
|
|
7,852
|
|
|
3,926
|
|
$
|
32.69
|
|
|
2/22/2028
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 10,341 | (6a) | $ | 245,289 |
|
2/21/2019
|
|
|
4,074
|
(6a)
|
$
|
207,285
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Nurkin | 3/2/2016 | 10,341 | (6b) | $ | 245,289 |
|
2/21/2019
|
|
|
12,222
|
(6b)
|
$
|
621,855
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 31,028 | $ | 12.85 | 3/2/2026 |
|
2/21/2019
|
|
|
11,189
|
|
$
|
36.51
|
|
|
2/21/2029
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 1,948 | (4a) | $ | 46,207 |
|
10/13/2015
|
|
|
66,535
|
|
$
|
12.36
|
|
|
10/13/2025
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2014 | 3,897 | (4b) | $ | 92,437 |
|
3/2/2016
|
|
|
31,776
|
|
$
|
12.85
|
|
|
3/2/2026
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/2/2015 | 10,419 | (5b) | $ | 247,139 |
|
3/1/2017
|
|
|
1,530
|
(4a)
|
$
|
77,846
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 20,227 | (5d) | $ | 479,784 |
|
3/1/2017
|
|
|
6,882
|
(4b)
|
$
|
350,156
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/13/2015 | 66,535 | $ | 12.36 | 10/13/2025 |
|
3/1/2017
|
|
|
4,405
|
|
|
8,809
|
|
$
|
27.40
|
|
|
3/1/2027
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 10,591 | (6a) | $ | 251,219 |
|
2/22/2018
|
|
|
2,880
|
(5a)
|
$
|
146,534
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3/2/2016 | 10,591 | (6b) | $ | 251,219 |
|
2/22/2018
|
|
|
6,479
|
(5b)
|
$
|
329,626
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Swann, III | 3/2/2016 | 31,776 | $ | 12.85 | 3/2/2026 |
|
2/22/2018
|
|
|
8,241
|
|
|
4,120
|
|
$
|
32.69
|
|
|
2/22/2028
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
4,936
|
(6a)
|
$
|
251,144
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
14,808
|
(6b)
|
$
|
753,431
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/21/2019
|
|
|
13,556
|
|
$
|
36.51
|
|
|
2/21/2029
|
|
EXECUTIVE COMPENSATION
(1) | Unvested Options |
(2) | Based on the closing price of our common stock on the award date adjusted when applicable for theSpin-Off. |
(3) | Based on the closing price of our common stock of |
(4a) | RSUs awarded on |
PSUs awarded on March |
(5a) | RSUs awarded on February 22, 2018, vest at the rate of 33 1/3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of February 22, 2019, February 22, 2020, and February 22, 2021. LTI awards are generally subject to continued employment through the applicable vesting period. |
(5b) | PSUs awarded on February 22, 2018, become eligible to vest upon Committee certification of achievement, subject to satisfaction of external performance criteria for the three-year performance period. LTI awards are generally subject to continued employment through the applicable vesting period. PSUs are capped at target if our TSR is negative. Amount presented assumes achievement at the maximum performance level. |
(6a) | RSUs awarded on February 21, 2019, vest at the rate of 33 1/3 percent per year, subject to satisfaction of vesting criteria for the applicable year, with vesting dates of February 21, 2020, February 21, 2021, and February 21, 2022. LTI awards are generally subject to continued employment through the applicable vesting period. |
(6b) | PSUs awarded on February 21, 2019, become eligible to vest upon Committee certification of achievement, subject to satisfaction of external performance criteria for the three-year performance period. LTI awards are generally subject to continued employment through the applicable vesting period. PSUs are capped at target if our TSR is negative. Amount presented assumes achievement at the maximum performance level. |
OPTION EXERCISES AND STOCK VESTED IN 20162019
The following table sets forth stock vested for each of our NEOs in 2016.2019. Our NEOs did not exercise any Options in 2016.2019.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||||||||||||||||||
Eugene J. Lowe, III | — | $ | — | 17,722 | $ | 165,347 | — | $ | — | 132,174 | $ | 4,823,619 | ||||||||||||||||||||
Scott W. Sproule | — | $ | — | 21,887 | $ | 235,615 | — | $ | — | 32,894 | $ | 1,200,459 | ||||||||||||||||||||
J Randall Data | — | $ | — | 6,742 | $ | 137,469 | ||||||||||||||||||||||||||
J. Randall Data | — | $ | — | 26,883 | $ | 981,054 | ||||||||||||||||||||||||||
John W. Nurkin | — | $ | — | 15,880 | $ | 179,570 | — | $ | — | 21,893 | $ | 798,976 | ||||||||||||||||||||
John W. Swann, III | — | $ | — | 12,813 | $ | 119,546 | — | $ | — | 22,386 | $ | 816,977 |
(1) | The value realized on vesting of stock awards includes RSUs that vested on |
No SPX officer participates in a defined benefit pension plan.
37 |
EXECUTIVE COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
The following table sets forth information relating to the SPX Corporation Supplemental Retirement Savings Plan (“SRSP”) for NEOs in 2016.2019. Other members of senior-level management are also eligible to participate in the SRSP, a nonqualified deferred compensation plan that allows them to makepre-tax deferrals in excess of those permitted by the 401(k) Plan. Eligible executives may defer up to 50% of their base compensation (excluding annual bonuses) and up to 100% of their annual bonuses into the SRSP. Both base compensation and annual bonus deferral elections are made prior to the beginning of the year to which they relate.
A company match is made to the SRSP after the maximum company match has been made under the 401(k) Plan, and the deferrals and match are allocated to the fund(s) under the SRSP as selected by the participant.
In general, “eligible compensation” for purposes of the SRSP is the amount reported as wages on a participant’sForm W-2, (1) increased by (i)(a) amounts contributed by the participant to the 401(k) Plan and the SPX Corporation Flexible Spending Account Plans, and (ii)(b) vacation and holiday pay paid after termination of employment; and (2) decreased by (i)(a) reimbursements or other expense allowances, (ii)(b) fringe benefits (cash andnon-cash), (iii) (c) moving expenses, (iv)(d) welfare benefits (provided that short-term disability payments are included and long-term disability payments are excluded), (v)(e) employer-provided automobiles, mileage reimbursements, and car allowances for which no documentation is required, taxable andnon-taxable tuition reimbursements, the taxable value of physical examinations, and group term life insurance coverage in excess of $50,000, (vi)(f) pay in lieu of notice, (vii)(g) deferred compensation, (viii)(h) the value of restricted shares and other equity awards, and (ix)(i) severance pay paid after termination of employment.
All matching contributions into the SRSP are made in cash and invested according to the participant’s elections. All participant and matching contributions vest immediately. There is no minimum holding period. The SRSP is unfunded and earnings are credited on account balances based on participant direction within the samesimilar investment choices available in the 401(k) Plan, except that the SPX Company Stock Fund and a stable value fund are not available under the SRSP.Plan. All returns in the SRSP and the 401(k) Plan are at market rates.In-service distributions are not allowed under the SRSP. All amounts deferred under the SRSP after 2009 will be paid in alump-sum payment six months following termination of employment. Participants may elect to receive theirpre-2009 accounts in a lump sum, annual installments (two to ten years), or monthly installments (up to 120 months) upon separation from service, on a date that is a specified number of months after retirement or separation from service, or on a specified date following separation from service (no later than attainment of age 701⁄/2).
Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2)
| Aggregate Earnings in Last FY ($)(3) |
Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | ||||||||||||||||||||||||||||||
Eugene J. Lowe, III | $ | 38,094 | $ | 31,745 | $ | 18,246 | $ | — | $ | 221,347 | $ | 41,406 | $ | 34,505 | $ | 201,232 | $ | — | $ | 891,200 | ||||||||||||||||||||
Scott W. Sproule | $ | 40,306 | $ | 16,794 | $ | 36,499 | $ | — | $ | 387,979 | $ | 38,455 | $ | 19,228 | $ | 142,110 | $ | — | $ | 686,327 | ||||||||||||||||||||
J Randall Data | $ | 13,009 | $ | 10,841 | $ | 871 | $ | — | $ | 24,721 | ||||||||||||||||||||||||||||||
J. Randall Data | $ | 22,412 | $ | 18,677 | $ | 36,937 | $ | — | $ | 182,787 | ||||||||||||||||||||||||||||||
John W. Nurkin | $ | — | $ | — | $ | 6,412 | $ | — | $ | 103,869 | $ | 83 | $ | 52 | $ | 54,396 | $ | — | $ | 260,717 | ||||||||||||||||||||
John W. Swann, III | $ | 42,084 | $ | 14,028 | $ | 20,893 | $ | — | $ | 309,882 | $ | 76,068 | $ | 25,356 | $ | 133,555 | $ | — | $ | 683,416 |
(1) | Contributions to the SRSP consisted of the following amounts reported in the Summary Compensation Table. |
Name | 2016 Salary | 2015 Non-Equity Incentive Plan Compensation | ||||||
Eugene J. Lowe, III | $ | 38,094 | $ | — | ||||
Scott W. Sproule | $ | 40,306 | $ | — | ||||
J Randall Data | $ | 13,009 | $ | — | ||||
John W. Nurkin | $ | — | $ | — | ||||
John W. Swann, III | $ | 42,084 | $ | — |
Name | 2019 Salary | 2018 Non-Equity Incentive Plan Compensation | ||||||||
Eugene J. Lowe, III | $ | — | $ | 41,406 | ||||||
Scott W. Sproule | $ | 38,455 | $ | — | ||||||
J. Randall Data | $ | 22,412 | $ | — | ||||||
John W. Nurkin | $ | — | $ | 83 | ||||||
John W. Swann, III | $ | 54,669 | $ | 21,399 |
(2) | Represents matching amounts contributed by SPX to the SRSP. These amounts have been included in the All Other Compensation column of the Summary Compensation Table. |
(3) | Aggregate earnings under the SRSP are not above market and, accordingly, are not included in the Summary Compensation Table. |
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION ORCHANGE-IN-CONTROL
Our NEOs are covered bychange-in-control agreements, severance agreements, and stock plan award agreements governing compensation in the event of a termination of employment or a change in control of our Company. In addition, we have entered into an employment agreement with Mr. Lowe in lieu of a severance agreement. The following tables set forth the expected benefits to be received by each NEO in the event of histheir termination resulting from various scenarios, assuming a termination date of December 30, 2016, the last business day of fiscal 2016,31, 2019 and a stock price of $23.72,$50.88, our closing stock price on December 30, 2016.31, 2019 the last trading day of fiscal 2019. Assumptions and explanations of the numbers set forth in the tables below are set forth in the footnotes to, and in additional text following, the tables.
Eugene J. Lowe, III | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability | Death Pre-retirement | Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability
| Death Pre-retirement |
Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | ||||||||||||||||||||||||||||||
Salary | $ | — | $ | — | $ | — | $ | 1,573,250 | (1) | $ | 2,359,875 | (3) | $ | — | $ | — | $ | — | $ | 1,769,528 | (1) | $ | 2,654,292 | (2) | ||||||||||||||||
Bonus | $ | — | $ | 786,625 | (4) | $ | 786,625 | (4) | $ | 1,573,250 | (5) | $ | 2,359,875 | (7) | $ | — | $ | 884,764 | (3) | $ | 884,764 | (3) | $ | 2,187,136 | (4) | $ | 3,280,704 | (5) | ||||||||||||
Value of Accelerated Equity | $ | — | $ | 11,685,963 | (9) | $ | 11,685,963 | (9) | $ | 9,038,352 | (10) | $ | 11,685,963 | (9) | $ | — | $ | 11,023,086 | (6) | $ | 11,023,086 | (6) | $ | 7,303,534 | (7) | $ | 11,023,086 | (6) | ||||||||||||
Value of Accelerated CPUs | $ | — | $ | 629,126 | (11) | $ | 629,126 | (11) | $ | 629,126 | (11) | $ | 629,126 | (11) | $ | — | $ | 1,500,000 | (8) | $ | 1,500,000 | (8) | $ | 1,500,000 | (8) | $ | 1,500,000 | (8) | ||||||||||||
All Other Compensation | $ | 75,637 | (12) | $ | 75,637 | (12) | $ | 75,637 | (12) | $ | 165,893 | (13) | $ | 220,138 | (14) | $ | 85,073 | (9) | $ | 85,073 | (9) | $ | 85,073 | (9) | $ | 187,740 | (10) | $ | 259,217 | (11) | ||||||||||
TOTAL | $ | 75,637 | $ | 13,177,351 | $ | 13,177,351 | $ | 12,979,871 | $ | 17,254,977 | $ | 85,073 | $ | 13,492,923 | $ | 13,492,923 | $ | 12,947,938 | $ | 18,717,299 |
Scott W. Sproule | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability | Death Pre-retirement | Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability
| Death Pre-retirement |
Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | ||||||||||||||||||||||||||||||
Salary | $ | — | $ | — | $ | — | $ | 416,150 | (2) | $ | 832,300 | (1) | $ | — | $ | — | $ | — | $ | 476,985 | (12) | $ | 953,970 | (1) | ||||||||||||||||
Bonus | $ | — | $ | 291,305 | (4) | $ | 291,305 | (4) | $ | 291,305 | (6) | $ | 582,610 | (8) | $ | — | $ | 333,890 | (3) | $ | 333,890 | (3) | $ | 412,688 | (13) | $ | 825,376 | (4) | ||||||||||||
Value of Accelerated Equity | $ | — | $ | 3,407,071 | (9) | $ | 3,407,071 | (9) | $ | 691,099 | (10) | $ | 3,407,071 | (9) | $ | — | $ | 2,528,717 | (6) | $ | 2,528,717 | (6) | $ | 1,017,978 | (7) | $ | 2,528,717 | (6) | ||||||||||||
Value of Accelerated CPUs | $ | — | $ | 157,281 | (11) | $ | 157,281 | (11) | $ | 157,281 | (11) | $ | 157,281 | (11) | $ | — | $ | 362,500 | (8) | $ | 362,500 | (8) | $ | 362,500 | (8) | $ | 362,500 | (8) | ||||||||||||
All Other Compensation | $ | 40,014 | (15) | $ | 40,014 | (15) | $ | 40,014 | (15) | $ | 95,936 | (16) | $ | 128,216 | (17) | $ | 45,864 | (9) | $ | 45,864 | (9) | $ | 45,864 | (9) | $ | 109,226 | (14) | $ | 150,234 | (15) | ||||||||||
TOTAL | $ | 40,014 | $ | 3,895,671 | $ | 3,895,671 | $ | 1,651,771 | $ | 5,107,478 | $ | 45,864 | $ | 3,270,971 | $ | 3,270,971 | $ | 2,379,377 | $ | 4,820,797 |
J Randall Data | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability | Death Pre-retirement | Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability
| Death Pre-retirement |
Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | ||||||||||||||||||||||||||||||
Salary | $ | — | $ | — | $ | — | $ | 408,000 | (2) | $ | 816,000 | (1) | $ | — | $ | — | $ | — | $ | 463,326 | (12) | $ | 926,652 | (1) | ||||||||||||||||
Bonus | $ | — | $ | 244,800 | (4) | $ | 244,800 | (4) | $ | 244,800 | (6) | $ | 489,600 | (8) | $ | — | $ | 301,162 | (3) | $ | 301,162 | (3) | $ | 372,236 | (13) | $ | 744,472 | (4) | ||||||||||||
Value of Accelerated Equity | $ | — | $ | 2,552,942 | (9) | $ | 2,552,942 | (9) | $ | 393,900 | (10) | $ | 2,552,942 | (9) | $ | — | $ | 2,390,254 | (6) | $ | 2,390,254 | (6) | $ | 952,339 | (7) | $ | 2,390,254 | (6) | ||||||||||||
Value of Accelerated CPUs | $ | — | $ | 125,825 | (11) | $ | 125,825 | (11) | $ | 125,825 | (11) | $ | 125,825 | (11) | $ | — | $ | 337,500 | (8) | $ | 337,500 | (8) | $ | 337,500 | (8) | $ | 337,500 | (8) | ||||||||||||
All Other Compensation | $ | 34,664 | (15) | $ | 34,664 | (15) | $ | 34,664 | (15) | $ | 82,528 | (16) | $ | 106,750 | (17) | $ | 44,551 | (9) | $ | 44,551 | (9) | $ | 44,551 | (9) | $ | 106,084 | (14) | $ | 145,264 | (15) | ||||||||||
TOTAL | $ | 34,664 | $ | 2,958,231 | $ | 2,958,231 | $ | 1,255,053 | $ | 4,091,117 | $ | 44,551 | $ | 3,073,467 | $ | 3,073,467 | $ | 2,231,485 | $ | 4,544,142 |
39 |
EXECUTIVE COMPENSATION
John W. Nurkin
| (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability
| Death Pre-retirement |
Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | |||||||||||||||
Salary | $ | — | $ | — | $ | — | $ | 382,173 | (12) | $ | 764,346 | (1) | ||||||||
Bonus | $ | — | $ | 229,304 | (3) | $ | 229,304 | (3) | $ | 283,420 | (13) | $ | 566,840 | (4) | ||||||
Value of Accelerated Equity | $ | — | $ | 1,698,166 | (6) | $ | 1,698,166 | (6) | $ | 687,503 | (7) | $ | 1,698,166 | (6) | ||||||
Value of Accelerated CPUs | $ | — | $ | 245,000 | (8) | $ | 245,000 | (8) | $ | 245,000 | (8) | $ | 245,000 | (8) | ||||||
All Other Compensation | $ | 36,747 | (9) | $ | 36,747 | (9) | $ | 36,747 | (9) | $ | 88,817 | (14) | $ | 119,051 | (15) | |||||
TOTAL | $ | 36,747 | $ | 2,209,217 | $ | 2,209,217 | $ | 1,686,913 | $ | 3,393,403 |
John W. Nurkin | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability | Death Pre-retirement | Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | |||||||||||||||
Salary | $ | — | $ | — | $ | — | $ | 334,950 | (2) | $ | 669,900 | (1) | ||||||||
Bonus | $ | — | $ | 200,970 | (4) | $ | 200,970 | (4) | $ | 200,970 | (6) | $ | 401,940 | (8) | ||||||
Value of Accelerated Equity | $ | — | $ | 2,324,937 | (9) | $ | 2,324,937 | (9) | $ | 490,450 | (10) | $ | 2,324,937 | (9) | ||||||
Value of Accelerated CPUs | $ | — | $ | 104,435 | (11) | $ | 104,435 | (11) | $ | 104,435 | (11) | $ | 104,435 | (11) | ||||||
All Other Compensation | $ | 32,207 | (15) | $ | 32,207 | (15) | $ | 32,207 | (15) | $ | 81,661 | (16) | $ | 108,194 | (17) | |||||
TOTAL | $ | 32,207 | $ | 2,662,549 | $ | 2,662,549 | $ | 1,212,466 | $ | 3,609,406 |
John W. Swann, III | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability | Death Pre-retirement | Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | (a) Voluntary Resignation or (b) Involuntary Termination For Cause | Disability
| Death Pre-retirement |
Involuntary Without Cause/ Voluntary Resignation for Good Reason | Termination Following Change in Control | ||||||||||||||||||||||||||||||
Salary | $ | — | $ | — | $ | — | $ | 406,000 | (2) | $ | 812,000 | (1) | $ | — | $ | — | $ | — | $ | 452,262 | (12) | $ | 904,524 | (1) | ||||||||||||||||
Bonus | $ | — | $ | 243,600 | (4) | $ | 243,600 | (4) | $ | 243,600 | (6) | $ | 487,200 | (8) | $ | — | $ | 271,357 | (3) | $ | 271,357 | (3) | $ | 339,828 | (13) | $ | 679,656 | (4) | ||||||||||||
Value of Accelerated Equity | $ | — | $ | 2,469,246 | (9) | $ | 2,469,246 | (9) | $ | 461,087 | (10) | $ | 2,469,246 | (9) | $ | — | $ | 1,879,132 | (6) | $ | 1,879,132 | (6) | $ | 711,535 | (7) | $ | 1,879,132 | (6) | ||||||||||||
Value of Accelerated CPUs | $ | — | $ | 106,951 | (11) | $ | 106,951 | (11) | $ | 106,951 | (11) | $ | 106,951 | (11) | $ | — | $ | 248,750 | (8) | $ | 248,750 | (8) | $ | 248,750 | (8) | $ | 248,750 | (8) | ||||||||||||
All Other Compensation | $ | 39,038 | (15) | $ | 39,038 | (15) | $ | 39,038 | (15) | $ | 93,682 | (16) | $ | 128,446 | (17) | $ | 43,487 | (9) | $ | 43,487 | (9) | $ | 43,487 | (9) | $ | 93,687 | (14) | $ | 118,127 | (15) | ||||||||||
TOTAL | $ | 39,038 | $ | 2,858,835 | $ | 2,858,835 | $ | 1,311,320 | $ | 4,003,843 | $ | 43,487 | $ | 2,442,726 | $ | 2,442,726 | $ | 1,846,062 | $ | 3,830,189 |
(1) | Two times current base salary. |
(2) | Three times current base salary. |
(3) | Reflects annual bonus, which is equal to apro-rated portion of the highest of actual bonus for year preceding termination or current-year target bonus. |
(4) |
Two times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current-year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(5) | Three times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
(6) | Represents the accelerated vesting of all unvested PSUs (at assumed target performance level), RSUs, and Options. |
(7) | Represents the accelerated vesting of all unvested PSUs (at assumed target performance level), RSUs, and Options, which would have otherwise vested within two years of termination for Mr. Lowe and within one year for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann. |
(8) | Represents the accelerated vesting of all unvested CPUs at assumed target performance level. |
(9) | Other compensation includes payout of accrued vacation (up to five weeks of base salary). |
(10) | Sum of other compensation for Mr. Lowe includes: |
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $50,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
The Company cost of health and welfare benefit continuation for 2 years.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 2 years.
(11) | Sum of other compensation for Mr. Lowe includes: |
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $50,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
40 | 2020 PROXY STATEMENT |
EXECUTIVE COMPENSATION
The full cost of health and welfare and vision benefit continuation for 3 years.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 3 years.
(12) | One times current base salary. |
(13) | One times annual bonus, which is equal to the highest of actual bonus for year preceding termination or current year target bonus plus the amount, if any, that the bonus that would have been paid to the executive for the bonus plan year in which such termination of employment occurs, based on the performance level actually attained, exceeds the amount payable under the highest of prior actual or current target bonus. |
Sum of |
Swann includes:
EXECUTIVE COMPENSATION
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $50,000.$35,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
The Company cost of health and welfare benefit continuation for 2 years.1 year.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 1 year.
(15) | Sum of other compensation for Mr. Sproule, Mr. Data, Mr. Nurkin, and Mr. Swann includes: |
Payout of accrued vacation (up to five weeks of base salary).
Maximum outplacement benefit for involuntary termination of $35,000.
The Company will reimburse premiums paid over benefit continuation period. Value shown represents group term life imputed income in year preceding termination.
The full cost of health and welfare and vision benefit continuation for 2 years.
The value of perquisites (annual physical, financial planning, and tax preparation) on the same basis as the executive was receiving in the year preceding termination for 2 years.
41 |
EXECUTIVE COMPENSATION
Equity Compensation Plan Information
The following table provides information as of December 31, 2016,2019, about SPX common stock that may be issued upon the exercise of options and rights under all our existing equity compensation plans, each of which was approved by our stockholders. These plans include 2002the 2019 Stock Compensation Plan (and its predecessor plan, the 1992 Stock Compensation Plan) and the 2006Non-Employee Directors’ Stock Incentive Plan.
Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)(1) | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b)(2) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)(1) | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b)(2) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) | ||||||
Equity Compensation Plans | 3,253,482 | $13.45 | 2,096,945 | 4,943,874 | 19.05 | 2,296,954 | ||||||
Total | 3,253,482 | $13.45 | 2,096,945 | 4,943,874 | 19.05 | 2,296,954 |
(1) | Comprised of |
(2) | Excludes |
(3) | All these shares were available for issuance under the |
PROPOSAL 2: APPROVAL OF NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON ANON-BINDING ADVISORY BASIS(“SAY-ON-PAY”)
We are asking our stockholders to cast an advisory vote at our Annual Meeting to approve the compensation of our named executive officers (“NEOs”),NEOs, as disclosed in this Proxy Statement.
Although the vote isnon-binding, the Committee and the Board value your opinion and will consider the outcome of the vote in revising our compensation philosophy and making future compensation decisions.
Pending the outcome of the Say-On-Frequency (defined in “Proposal 3,” on page 43) vote, weWe intend to seek approval of our executive compensation program on an annual basis.
WHY YOU SHOULD APPROVE OUR EXECUTIVENEO COMPENSATION PROGRAM
As disclosed inDuring 2019, we continued to focus on our last year’s proxy statement, for 2016 we committedcommitment to implementing new base pay structures and a redesign of short- and long-term incentive programs, while improving our practices around corporate governance, and we have fulfilledhaving an executive compensation program that commitment. These plan design changes are market competitive andis aligned with stockholder interests.interests and our goal of sustaining our meaningfulpay-for-performance culture. At our 2019 Annual Meeting, approximately 95% of votes cast approved our executive compensation. The approval vote remains strong year-over-year, which we interpret as a strong endorsement of our executive compensation program design and direction — further validating that our program is structured in the best interests of both our stockholders and executives.
Our executive compensation and executive compensation program are more fully described in the “Compensation Discussion and Analysis,” beginning on page 18,19, and in the “Summary Compensation Table” and subsequent tables, beginning on page 32.
OVERVIEW
Key Components of Our Compensation ProgramsProgram
Base CompensationSalary
We target base paysalary for NEOs betweenin line with the 25thmarket median and 50th percentiles ofour peer companies.companies for established performers.
Short-term IncentivesAnnual Incentive
We implemented plan design changes that focus annual bonus pay based on earnings,operating income, cash flow, and revenue growth.goals.
Long-term Incentives
We instituted a 2016 LTI plan design that targets LTItarget long-term pay based 50% on performance units, 25% on stock options, and 25% on restricted stock units.
Change in Control Provisions
We have double-triggerdouble trigger provisions in the event of a change ofin control.
Updated Peer GroupNo Pledging or Hedging
We refineddo not permit officer or director hedging or pledging of our post-Spin-Off peer group to better reflect our industry, size, and competition.common stock.
Benefits and Perquisites
We have no NEO participation in defined benefit pension plans or retiree medical benefits.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE“FOR” THE APPROVAL OF NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON A NON-BINDING ADVISORY BASIS (“SAY-ON-PAY”). |
PROPOSAL 3: RECOMMENDATION ON FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON A NON-BINDING ADVISORY BASIS (“SAY-ON-FREQUENCY”)
At this Annual Meeting, we are also asking our stockholders to cast an advisory vote to recommend the frequency of our future advisory votes on our named executive officers’ compensation.
This non-binding advisory vote, commonly referred to as a “Say-on-Frequency” vote, gives stockholders the opportunity to express their views about how frequently we conduct a Say-on-Pay vote. At our 2011 Annual Meeting, our stockholders recommended that we hold our Say-on-Pay votes annually. You may vote for Say-on-Pay votes to be held every “1 YEAR,” “2 YEARS,” or “3 YEARS” or you may abstain from voting on this proposal.
After careful consideration of input from stockholders, the preference derived from voting results at other companies similar to ours, and practical commentary that has become widely available with respect to the Say-on-Frequency vote since its implementation, the Board is recommending that the Say-on-Pay vote continue to be held on an annual basis.
The results of the Say-on-Frequency vote will be advisory and will not be binding upon the Company or our Board. However, we will take into account the outcome of the Say-on-Frequency vote when determining how frequently the Company will conduct future Say-on-Pay votes and will disclose our frequency decision as required by the SEC. Unless and until the Board determines otherwise, the next Say-on-Frequency vote will occur at our 2023 Annual Meeting, in accordance with the requirement that a Say-on-Frequency vote occur at least every six years.
|
| 43 |
The Audit Committee of the SPX Board of Directors consists of fourfive directors. Each Audit Committee member is independent, as defined under SEC rules and the listing standards of the NYSE. The Audit Committee reviews SPX’s financial reporting process on behalf of the Board and is responsible for ensuring the integrity of the financial information reported by SPX.
Management is responsible for SPX’s financial reporting process, including its systems of internal and disclosure controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”). SPX’s independent registered public accounting firm, which is appointed by the Audit Committee, is responsible for auditing those financial statements. The Audit Committee’s responsibility is to monitor and review these processes. The Audit Committee has relied, without independent verification, on management’s representation that the financial statements have been prepared with integrity and objectivity and in conformity with US GAAP and on the representations of the independent registered public accounting firm included in the firm’s report on SPX’s financial statements.
In this context, the Audit Committee has met and held discussions with management and Deloitte & Touche LLP (“Deloitte”), SPX’s independent registered public accounting firm.firm since 2002. Management represented to the Audit Committee that SPX’s consolidated financial statements were prepared in accordance with US GAAP, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by the Standards of the Public Company Accounting Oversight Board (“PCAOB”) for communication with audit committees, under which Deloitte must provide us with additional information regarding the scope and results of its audit of SPX’s consolidated financial statements.
In addition, we have discussed with Deloitte its independence from SPX and SPX management, including matters in the written disclosures required by PCAOB Rule 3526,Communication with Audit Committees Concerning Independence.
The Audit Committee discussed with SPX’s internal auditors and independent registered public accounting firm the overall scope and plans for its respective audits. The Audit Committee met with the independent registered public accounting firm, with and without management present, to discuss the results of its examinations, the evaluations of SPX’s internal controls, and the overall quality of SPX’s financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited consolidated financial statements be included in SPX’s Annual Report onForm 10-K for the year ended December 31, 2016,2019, filed with the SEC.
The Audit Committee has reviewed and discussed with management its assertion and opinion regarding internal controls included in the 20162019 Annual Report on Form10-K to Stockholders as required by Section 404 of the Sarbanes-Oxley Act of 2002. Management has confirmed to the Audit Committee that at December 31, 2019 internal controls over financial reporting have beenwere appropriately designed and are operating effectively to provide reasonable assurance regarding the reliability of financial reporting and the preparation of SPX’s consolidated financial statements for external purposes in accordance with US GAAP. The Audit Committee has also reviewed and discussed with Deloitte its audit and opinion regarding SPX’s internal control over financial reporting as required by Section 404, which opinion is included in the 20162019 Annual Report onForm 10-K.
Audit Committee,
Ricky D. Puckett, Chairman
David A. Roberts
Meenal A. Sethna
Ruth G. Shaw
Tana L. Utley
44 | |
AUDIT MATTERS
During fiscal years 20152018 and 2016,2019, we retained our principal auditor,independent registered public accounting firm, Deloitte, & Touche LLP (“Deloitte”), to perform services in the following categories and amounts:
2015 | 2016 |
2018
|
2019
| |||||||||||||
Audit Fees(1) | $ | 11,258,000 | $ | 4,733,000 | $
| 3,960,000
|
| $
| 3,570,000
|
| ||||||
Audit-Related Fees(2) | $ | 121,000 | $ | 29,000 | $
| 34,000
|
| $
| 19,000
|
| ||||||
Tax Fees(3) | $ | 1,813,000 | $ | 404,000 | $
| 210,000
|
| $
| 125,000
|
| ||||||
All Other Fees | N/A | N/A |
| N/A
|
|
| N/A
|
|
(1) | Fees for audit services billed or expected to be billed relate to |
(2) | Fees for audit-related services include |
(3) | Fees for tax services |
PRE-APPROVAL BY AUDIT COMMITTEE
Our Audit Committee has adopted a policy that requires all audit andnon-audit services performed by Deloitte to bepre-approved. The Audit Committee annually approves the fees and expenses for audit services performed by Deloitte, as well as for any regularly recurringnon-audit services of the type covered by our annual engagement of Deloitte. In addition, ourpre-approval policy requirespre-approval by the Chair of the Audit Committee of fees and expenses for othernon-audit services that may arise during the year. The policy requires the Chair to report anynon-audit services that he haspre-approved to the Audit Committee at each regularly scheduled meeting of the Audit Committee. In no event may Deloitte perform any of the following services for us: (1) bookkeeping or other services related to our accounting records or financial statements; (2) financial information systems design and implementation; (3) appraisal or valuation services, fairness opinions, orcontribution-in-kind reports; (4) actuarial services; (5) internal audit outsourcing services; (6) management functions or human resources services; (7) broker-dealer, investment advisor, or investment banking services; (8) legal services; or (9) expert services. The Audit Committee regularly considers whether specific projects or expenditures could potentially affect Deloitte’s independence.
| 45 |
PROPOSAL 4:3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP (“Deloitte”) has been our independent registered public accounting firm since 2002. The Audit Committee has engaged Deloitte to perform reviews, in accordance with the Standards of the Public Company Accounting Oversight Board, of our financial statements to be filed on Form10-Q in 2017.2020. Consistent with past practice, on February 20, 2017,10, 2020, the Audit Committee approved the engagement of Deloitte to perform the audit of the financial statements and internal controls over financial reporting included in SPX’s Annual Report on Form10-K for the fiscal year ending December 31, 2017.2020. Representatives of Deloitte will be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and to respond to appropriate questions.
Although we are not required to do so, we believe that it is appropriate for us to request stockholder ratification of the appointment of Deloitte as our independent registered public accounting firm. If stockholders do not ratify the appointment, the Audit Committee will investigate the reasons for the stockholders’ rejection and reconsider the appointment.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR |
46 | |
Why am I receiving these materials?
We are mailing or making these materials available to you because we are soliciting your proxy to vote your shares in connection with our Annual Meeting, scheduled to take place on May 8, 2017,14, 2020, or at any adjournments or postponements of this meeting. We are first mailing or making available to stockholders this Proxy Statement, our Annual Report to Stockholders for the year ended December 31, 2016,2019, and related materials on or about March 27, 2017.April 2, 2020.
Why did I receive aone-page notice of internet availability of proxy materials rather than a full set of proxy materials?
SEC rules allow companies to provide stockholders access to Proxy Materials over the internet rather than mailing the materials to stockholders. Accordingly, to conserve natural resources and reduce costs, we are sending many of our stockholders a Notice of Internet Availability of Proxy Materials. The Notice provides instructions for accessing the Proxy Materials on the website referred to in the Notice or for requesting printed copies of the Proxy Materials. The Notice also provides instructions for requesting the delivery of the Proxy Materials for future Annual Meetings in printed form.
Are the proxy materials available electronically?
Our Proxy Statement and our 20162019 Annual Report to Stockholders are available on our website (www.spx.com) under the heading “Investor Relations—Financial Information—Proxy and 10K.Annual Reports.” Additionally, and in accordance with SEC rules, you may access our Proxy Statement at www.envisionreports.com/SPXC (for stockholders of record) or www.edocumentview.com/SPXC (for all other stockholders), which do not have “cookies” that identify visitors to the sites.
What is the purpose of this meeting?
This is the Annual Meeting of the Company’s stockholders. At the meeting, we will be voting on:
The election of directors;the three nominees named in this Proxy Statement to serve as directors until our 2023 Annual Meeting;
The approval of our named executive officers’ compensation, on anon-binding advisory basis;
Any other business properly brought before the meeting.
How does the Board recommend that I vote?
Proposal 1: | FOR the election of each of Mr. Puckett, Ms. Sethna, and Ms. Utley. | |
Proposal 2: | FOR the approval of our named executive officers’ compensation. | |
Proposal 3: | FOR | |
How can I attend the Annual Meeting?
The Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively virtually on the internet. You may attendare entitled to participate in the Annual Meeting only if you were an SPXa stockholder of recordthe Company as of the close of business on March 13, 2017,19, 2020, or if you hold a valid proxy for the Annual Meeting. No physical meeting will be held.
You shouldwill be preparedable to present photo identification for admittance. If you are a stockholder of record or holdattend the Annual Meeting online and submit your questions during the meeting by visiting www.meetingcenter.io/235805813. You also will be able to vote your shares throughonline by attending the SPX 401(k) Plan or FLOW 401(k) Plan, then your name will be verified against the list of stockholders of record or plan participantsAnnual Meeting virtually on the record date prior to your being admitted tointernet.
To participate in the Annual Meeting. IfMeeting, you are not a stockholder of record, but hold shares through a broker, bank, trustee,will need to review the information included on your Notice, or other holder of record, you should provide proof of beneficial ownership onproxy card. The password for the record date, such as a recent account statement showing your ownership; a copy of the voting instruction card provided by your broker, bank, trustee, or other holder of record; or other similar evidence of ownership.
| 47 |
QUESTIONS AND ANSWERS
If you hold your shares through an intermediary, such as a bank or broker, you must register in advance using the instructions below.
The online meeting will begin promptly at 8.00 a.m., Eastern Time. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this proxy statement.
How do I register to attend the Annual Meeting virtually on the Internet?
If you are a registered stockholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Annual Meeting virtually on the internet. Please follow the instructions on the Notice of Internet Availability of Proxy Materials or proxy card that you received.
If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting virtually on the Internet. To register to attend the Annual Meeting, you must submit proof of your proxy power (legal proxy) reflecting your SPX Corporation holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 8, 2020. You will receive a confirmation of your registration by email after we receive your registration materials.
Requests for registration should be directed to us at the following:
By email
Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com
By mail
Computershare
SPX Corporation Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
Upon receipt of your confirmation of registration to participate in the meeting from Computershare go to www.meetingcenter.io/235805813 and enter your control number and meeting password, SPXC2020 to log into the meeting.
How do I vote or ask a question during the meeting?
When you log onto the meeting website (www.meetingplace.io/235805813) you will see instructions on how to vote and ask questions during the meeting.
What is a proxy?
Our Board of Directors is asking for your proxy, which is a legal designation of another person to vote the shares you own. We have designated two officers of the Company, Eugene J. Lowe, III, and Scott W. Sproule, to vote your shares at the meeting in the way you instruct and, with regard to any other business that may properly come before the meeting, as they think best.
Who is entitled to vote?
Stockholders at the close of business on March 13, 201719, 2020 (the record date), are entitled to vote. On that date there were 42,787,05844,577,613 shares of SPX common stock outstanding.
How many votes do I have?
Each share of SPX common stock that you own entitles you to one vote.
How do I vote if I don’tdo not attend the Annual Meeting?
If your shares are held in your name as a stockholder of record, then you may vote your shares before the meeting over the internet by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card you received for that account.
48 | 2020 PROXY STATEMENT |
QUESTIONS AND ANSWERS
If your shares are held through a broker, bank, trustee, or other holder of record, then you may vote your shares before the meeting over the internet by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card you received or, if you received a voting instruction form from your brokerage firm, bank, trustee, or other similar entity by mail, then by completing, signing, and returning the form you received. You should check your voting instruction form to see if telephone or internet voting is available to you.
If your shares are held in your name, then you may vote your shares before the meeting over the internet by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card you received for that account.
If you received more than one Notice of Internet Availability of Proxy Materials or proxy card, then this means you hold shares of our common stock in more than one account. You should complete, sign, date, and return each proxy card or vote all shares over the internet or by telephone for each of your accounts. If you vote over the internet or by telephone, then you should not mail back the related proxy card.
Can I vote atduring the Annual Meeting?
Yes. If you were a stockholder on the record date, then you can vote your shares of common stock in person atduring the Annual Meeting. If your shares are held through a broker, bank, trustee, or other holder of record, then you may vote your shares in person only if you have a legal proxy from the entity that holds your shares giving you the right to vote the shares. A legal proxy is a written document from your brokerage firm, bank, trustee, or other holder of record authorizing you to vote the shares it holds for you in its name. If youPlease refer to “How do I register to attend the meeting and vote your shares by ballot, then your vote atAnnual Meeting virtually on the meeting will revoke any vote you submitted previously.internet?” section above for further instructions.
Even if you currently plan to attend the meeting, we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to attend the meeting.
May I revoke my proxy?
You may revoke your proxy in one of four ways at any time before it is exercised:
Notify our Corporate Secretary in writing before the Annual Meeting that you are revoking your proxy;
Submit another proxy with a later date;
Vote by telephone or internet after you have given your proxy; or
Vote in person at the Annual Meeting.
What constitutes a quorum?
The presence, in persondirectly or by proxy, of the holders ofone-third of the total number of shares of SPX stock issued and outstanding and entitled to vote at the Annual Meeting constitutes a quorum. You will be considered part of the quorum if you return a signed and dated proxy card, if you vote by telephone or internet, or if you attend the Annual Meeting.
QUESTIONS AND ANSWERS
Abstentions are counted as “shares present” at the Annual Meeting for purposes of determining whether a quorum exists. Proxies submitted by brokers, banks, trustees, or other holders of record holding shares for you as a beneficial owner that do not indicate a vote for some of or all of the proposals because that holder does not have voting authority and has not received voting instructions from you (so-called(so-called “brokernon-votes”) are also considered “shares present” for purposes of determining whether a quorum exists. If you are a beneficial owner, then these holdersBrokers are permitted to vote your shares on the ratification of the appointment of our independent public accountants, even if they do not receive voting instructions from you.
What vote is required to approve each proposal?
Proposal | Vote Required | Broker Discretionary
| |||||
Election of Directors | Majority of Votes Cast | No | |||||
Approval of Named Executive Officers’ Compensation, on aNon-binding Advisory Basis | Majority of Votes Cast | No | |||||
|
| ||||||
Ratification of Appointment of Independent Registered Public Accounting Firm | Majority of Shares Present or Represented by | Yes | |||||
Other Proposals | Majority of Shares Present or Represented by | No |
A majority of votes cast means that the number of shares voted for a director or proposal must exceed the number of shares voted against that director or proposal.
2020 PROXY STATEMENT | 49 |
QUESTIONS AND ANSWERS
What is the Impactimpact of Abstentionsabstentions or Broker Non-Votes?brokernon-votes?
An abstention is not considered as a share voted and will not impact the election of directors or the Say-on-Paynon-binding advisory vote or the Say-on-Frequency vote. However,to approve our named executive officers’ compensation.
In addition, since an abstention is considered a share present or represented by proxy and entitled to vote, as one less vote for approval it will have the effect of a vote against the ratification of our independent public accountants and other proposals that may be brought before the Annual Meeting.
A “brokernon-vote” occurs when a broker, trustee, bank, or other nominee that holds shares on your behalf does not receive instructions from you on how to vote such shares and does not otherwise have discretion to vote because the matter is not considered routine. A brokernon-vote is not considered as a share voted or entitled to vote and will not impact the vote on any of the proposals.
The New York Stock ExchangeNYSE does not consider the election of directors or matters relating to compensation to be routine. Unless the broker has received instructions from you, any broker holding shares for you will not have the ability to cast votes with respect to the election of directors or the approval of named executive officers’ compensation, or the frequency of future advisory votes onour named executive officers’ compensation. It is important, therefore, that you provide instructions to your broker if your shares are held by a broker so that your vote with respect to these matters is counted.
How does discretionary voting authority apply?
If you sign, date, and return your proxy card, then your vote will be cast as you direct. If your proxy card does not indicate how you want to vote, then you give authority to Eugene J. Lowe, III, and Scott W. Sproule to vote on the items discussed in these proxy materials and any other matter properly brought at the Annual Meeting. In such a case, your vote will be cast:
FOR the election of the director nominees;
FOR the approval of our named executive officers’ compensation;
FOR or AGAINST any other properly raised matters at the discretion of Eugene J. Lowe, III, and Scott W. Sproule.
QUESTIONS AND ANSWERS
Who pays to prepare, mail, and solicit the proxies?
We will pay all the costs of preparing, mailing, and soliciting the proxies. We will ask brokers, banks, trustees, and other nominees and fiduciaries to forward the Proxy Materials to the beneficial owners of SPX common stock and to obtain the authority to execute proxies. We will reimburse them for their reasonable expenses upon request. In addition to mailing Proxy Materials, our directors, officers, and employees may solicit proxies in person, by telephone, or otherwise. These individuals will not be specially compensated. We have retained Georgeson LLC, a Computershare company, to assist us with inquiries of brokerage houses and other custodians and nominees whether other persons are beneficial owners of SPX common stock. We will supply them with additional copies of the Proxy Materials for distribution to the beneficial owners. We will pay Georgeson LLC an estimated fee of $1,800 plus reasonableout-of-pocket expenses. We have not retained a proxy solicitor for this Annual Meeting to assist us in soliciting your proxy; however, as proxy returns are counted we may determine it is necessary to retain a proxy solicitor, in which case we will pay an estimated fee of $12,500 plus reasonableout-of-pocket expenses. We will also reimburse brokers, banks, trustees, and other nominees, fiduciaries, and other custodians for their costs of sending the Proxy Materials to the beneficial owners of SPX common stock.
Communications and Stockholder Proposals
How do I submit a stockholder proposal?
To bring a proposal other than the nomination of a director before an annual meeting, your notice of proposal must comply with the requirements of ourBy-laws and include any other information regarding you or any beneficial owner that would be required under the SEC’s proxy rules and regulations.
For a proposal to be included in our Proxy Statement for the 20182021 Annual Meeting, you must submit it no later than November 27, 2017.December 3, 2020. Your proposal must be in writing and comply with the proxy rules of the SEC. You should send your proposal to our Corporate Secretary at our address on the cover of this Proxy Statement.
50 | 2020 PROXY STATEMENT |
QUESTIONS AND ANSWERS
You also may submit a proposal that you do not want included in the Proxy Statement, but that you want to raise at the 20182021 Annual Meeting. We must receive this type of proposal in writing on or after December 9, 2017,15, 2020, but no later than January 8, 2018.
As detailed in our by-laws, to bring a proposal other than the nomination of a director before an annual meeting, your notice of proposal must include the following: (1) a brief description of the business you want to bring before the meeting; (2) the reasons for conducting such business at the meeting; (3) your name and address as they appear on our stock records, as well as the name and address of any beneficial owner of the shares; (4) the class and number of shares of SPX stock owned beneficially and of record by you and any beneficial owner as of the date of the notice (which information must be supplemented as of the record date); (5) a description of certain agreements, arrangements, or understandings entered into by you or any beneficial owner with respect to the shares (which information must be supplemented as of the record date); (6) any material interest you or any beneficial owner may have in the business you want to bring before the meeting; (7) a description of all agreements, arrangements, and understandings between you or any beneficial owner and any other persons (including their names) in connection with the proposal of the business; and (8) any other information regarding you or any beneficial owner that would be required under the SEC’s proxy rules and regulations.14, 2021.
How do I recommendsubmit a director nominee?
If you wish to recommendsubmit a nominee for director for the 20182021 Annual Meeting, our Corporate Secretary must receive written notice of your writtenintended nomination on or before January 8, 2018.14, 2021. You should submitsend your proposalnomination to our Corporate Secretary at our address on the cover of this Proxy Statement. As detailed in our by-laws, for
For a nomination to be properly brought before an annual meeting, your notice of nomination must includecomply with the following: (1) your name and address, as well as the name and addressrequirements of any beneficial owner of the shares, and the name and address of the nominee; (2) the class and number of shares of SPX stock owned beneficially and of record by you and any beneficial owner as of the date of the notice (which information must be supplemented as of the record date); (3) a description of certain agreements, arrangements, or understandings entered into by you or any beneficial owner with respect to the shares (which information must be supplemented as of the record date); (4) a statement that you are a record holder of SPX shares entitled to vote at the meeting and that you plan to appear in person or by proxy at the meeting to make the nomination; (5) a description of all arrangements or understandings between you and any other persons pursuant to which you are making the nomination; (6) any other information regarding you, any beneficial owner, or the nominee that the rules of the SEC require to be included in a proxy statement; (7) the nominee’s agreement to serve as a director if elected; and (8) a statement as to whether each nominee, if elected, intends to tender, promptly following his or her election or re-election, an irrevocable resignation effective upon his or her failure to receive the required vote for re-election at the next meeting at which he or she would face re-election and the acceptance of such resignation by the Board of Directors, in accordance with our Corporate Governance Guidelines.By-laws. In addition, any director nominee must provide information we may reasonably request in order for us to determine the eligibility of such nominee to serve as an independent director.
You may also make recommendations for director nominees to the Nominating and Governance Committee. Director nominations made to the Nominating and Governance Committee is more fully described in the “Director Nominees, Qualifications, and Diversity” section, beginning on page 2.
51 |
APPENDIX A – RECONCILIATION OF GAAP WITHNON-GAAP FINANCIAL MEASURES
Adjusted results arenon-GAAP financial measures that exclude, among other items, the effect of the South African and Heat Transfer operations, categorized as “All Other” in the company’s segment reporting structure. Additionally, we have made adjustments for items that arenon-cash, annual incentive related, and/or unusual in nature. Lastly, and as previously discussed, the results of SGS Refrigeration and Patterson-Kelley have been excluded from the annual incentive targets and the results for annual incentive purposes in 2019. This appendix to the Proxy Statement includes reconciliations of the amounts ofnon-GAAP financial measures with the most comparable measures determined in accordance with accounting principles generally accepted in the United States (“GAAP”) and other important information regardingnon-GAAP financial measures.
Adjusted Revenue
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED REVENUE (Unaudited; in millions)
| ||||||||||||
2019 | 2018 |
%
| ||||||||||
Consolidated revenue
|
$
|
1,525.4
|
|
$
|
1,538.6
|
| ||||||
Adjustments:
| ||||||||||||
Exclude aggregate revenue for South Africa and Heat Transfer
|
|
(1.6)
|
|
|
98.6
|
| ||||||
Adjustment for acquired deferred revenue
|
|
—
|
|
|
0.5
|
| ||||||
Adjusted revenue, as reported
|
|
1,527.0
|
|
|
1,440.5
|
| ||||||
Exclude currency impacts and aggregate revenue for SGS & Patterson-Kelley
|
|
11.5
|
| — | ||||||||
Adjusted revenue for annual incentive purposes |
$
|
1,515.5
|
|
$
|
1,440.5
|
|
|
5
|
%
|
Adjusted revenue is defined as consolidated revenue for the Company excluding the “All Other” group of operating segments, with “All Other” comprised of the results of the South African and Heat Transfer operations. Due, in part, to certain wind-down activities, and the related decline in volumes, the South African and Heat Transfer operations have a diminishing impact on the Company’s operating results over the long term. As such, the Company’s management believes it is useful to investors to present revenues without the results of the “All Other” group of operating segments to provide investors with metrics that the Company’s management uses to measure the overall performance of its businesses. In addition, adjusted revenue for 2018 includes an adjustment for deferred revenue acquired in the Cues acquisition. Lastly, and as previously discussed, the results of SGS Refrigeration and Patterson-Kelley have been excluded from the annual incentive targets and the results for annual incentive purposes in 2019.
2020 PROXY STATEMENT | A-1 |
APPENDIX A
Adjusted Segment Income
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED SEGMENT INCOME (Unaudited; in millions)
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2019
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2018
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2017
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Consolidated segment income
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$
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174.0
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$
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178.5
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$
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124.9
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Adjustments – Exclude
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South Africa and Heat Transfer
|
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46.1
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|
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18.9
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56.8
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Acquisition-related items
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2.4
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|
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5.9
|
|
|
—
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| |||
SGS & Patterson-Kelley
|
|
(0.2)
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|
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—
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|
|
—
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| |||
Other
|
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—
|
|
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—
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|
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1.0
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| |||
Adjusted segment income for purposes of 2017 CPU’s
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$
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222.3
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$
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203.3
|
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$
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182.7
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| |||
Cumulative adjusted segment income – 2017 to 2019
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$
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608.3
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|
Adjusted segment income is defined as consolidated segment income for the Company, excluding the “All Other” group of operating segments andnon-recurring charges related to acquisitions. In addition, and as previously discussed, the results of SGS Refrigeration and Patterson-Kelley have been excluded from the compensation targets and the results for compensation purposes in 2019.
Adjusted Operating Income
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED OPERATING INCOME (Unaudited; in millions) | ||||||||||||
2019 | 2018 | % Change | ||||||||||
Operating income
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$
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107.9
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$
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107.6
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Adjustments – Exclude
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Aggregate operating losses for South Africa and Heat Transfer
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(48.9)
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(23.2)
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Acquisition-related items
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(5.4)
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(11.5)
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Loss on sale of dry cooling
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(1.8)
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|
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(0.6)
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Amortization expense
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(8.3)
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|
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(3.3)
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Adjusted operating income, as reported
|
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172.3
|
|
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146.2
|
|
|
18
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%
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Less: Amortization expense
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(8.3)
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|
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(3.3)
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Exclude:
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Aggregate operating income for SGS & Patterson-Kelley
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(0.2)
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|
|
—
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Corporate annual incentive expense
|
|
7.1
|
|
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5.0
|
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Adjusted operating income for annual incentive purposes
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$
|
170.9
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$
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147.9
|
|
|
16
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%
|
A-2 | |
APPENDIX A - RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES
CORE OPERATING INCOME
Adjusted Earnings Per Share
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - CORE OPERATING INCOME (Unaudited; in millions) | ||||
Twelve months ended December 31, 2016 | ||||
Operating income (loss) | $ | 55.0 | ||
Adjustments: | ||||
South African projects | 14.5 | |||
Non-service pension and postretirement items | 16.0 | |||
Gain on sale of Dry Cooling | (18.4) | |||
Non-cash impairment of intangible assets | 30.1 | |||
Corporate-bonus expense | 4.8 | |||
Core operating income | $ | 102.0 |
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTED EARNINGS PER SHARE (Unaudited; in millions)
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2019 | 2018 | % Change | ||||||||||
Diluted earnings per share from continuing operations
|
$
|
1.67
|
|
$
|
1.75
|
| ||||||
Adjustments – Exclude
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South Africa and Heat Transfer operations
|
|
0.80
|
|
|
0.26
|
| ||||||
Acquisition-related items
|
|
0.24
|
|
|
0.29
|
| ||||||
Non-service pension & other
|
|
0.05
|
|
|
(0.03)
|
| ||||||
Adjusted earnings per share
|
$
|
2.76
|
|
$
|
2.27
|
|
|
22
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%
|
“CoreAdjusted operating income (loss)” isand adjusted earnings per share, are defined as operating income (loss)and diluted net income per share from continuing operations excluding the following items:items, as applicable: (a) results of the South African projects, “All Other” group of operating segments,(b) non-service pension and postretirement expense (income), (c) gain (loss)acquisition related charges, (d) charges related to acquisitions/divestitures, (d)the prior sale of the Company’s Dry Cooling business,(e) non-cash intangible impairment charges and (e) bonusassociated with the amendment/refinancing of our senior credit agreement, (f) amortization expense associated with employees at our corporate headquarters.acquired intangible assets, (g) gains on an equity security associated with a fair value adjustment, and (h) certain discrete income tax charges and benefits, as applicable, as well as (i) the income tax impact of items (a) through (g). In addition to the Company’s South African projects,“All Other” group of operating segments, as described above, the Company’s management views the impact related to each of the other items with the exception of (e), as not indicative of the Company’s ongoing performance. The Company believes that inclusion of only the service cost and prior service cost components of pension and postretirement expense better reflects the ongoing costs of providing pension and postretirement benefits to its employees. Other components of GAAP pension and postretirement expense (income) are mainly driven by market performance, and the Company manages these separately from the operational performance of its business. Corporate bonus expense is excluded from Coreadjusted operating income because corporate bonus expense is calculated based on Core operating income, among other metrics. The Company believes Core operating income (loss), when read in conjunction with operating income (loss) from continuing operations,and adjusted earnings per share gives investors a useful tool to assess and understand the Company’s overall financial performance, because they exclude items of income or expense that the Company believes are not reflective of its ongoing operating performance, allowing for a betterperiod-to-period comparison of operations of the Company. Additionally, the Company’s management uses Coreadjusted operating income (loss)and adjusted earnings per share as measures of the Company’s performance. The Coreadjusted operating income (loss) measure doesand adjusted earning per share measures do not provide investors with an accurate measure of the actual operating income (loss) from continuing operationsand earnings per share reported by the Company and should not be considered as substitutes for operating income (loss)and diluted net income per share from continuing operations as determined in accordance with accounting principles generally accepted in the United States (“GAAP”), and may not be comparable to similarly titled measures reported by other companies.
APPENDIX A
CORE CASH FLOW
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - CORECASH FLOW (Unaudited; in millions) | ||||
Twelve months ended | ||||
Net cash from continuing operations | $ | 53.4 | ||
Capital expenditures - continuing operations | (11.7) | |||
Adjustment for South African projects | 33.1 | |||
Core cash flow | $ | 74.8 |
“Core cash flow” is defined as net cash from (used in) continuing operations less capital expenditures of continuing operations, excluding cash used in operations by our South African projects. The Company’s management believes that Core cash flow is a useful financial measure for investors in evaluating the cash flow performance of multi-industrial companies, since it provides insight into the cash flow available to fund such things as mandatory and discretionary debt reduction, equity repurchases, and acquisitions or other strategic investments. The South African projects have a finite life and, thus, are expected to have a diminishing impact on the Company’s cash flows over the long-term. Core cash flow is not a measure of financial performance under GAAP. This measure should not be considered a substitute for net cash flow from (used in) continuing operations, as determined in accordance with GAAP, but rather should be used in combination with cash flows from (used in) operating activities, as determined in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. In addition, and as previously discussed, the results of SGS Refrigeration and Patterson-Kelley have been excluded from the annual incentive targets and the results for annual incentive purposes in 2019.
CORE REVENUEAdjusted Free Cash Flow
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - COREREVENUE (Unaudited; in millions) | ||||
Twelve months ended December 31, 2016 | ||||
Consolidated revenue | $ | 1,472.3 | ||
Exclude: South African projects | 83.3 | |||
Core revenue | $ | 1,389.0 |
SPX CORPORATION AND SUBSIDIARIES NON-GAAP RECONCILIATION - ADJUSTEDCASH FLOW (Unaudited; in millions)
| ||||||||||||
2019
|
2018
|
%
| ||||||||||
Net operating cash flows from continuing operations
|
$
|
152.9
|
|
$
|
112.9
|
| ||||||
Less: Capital expenditures
|
|
17.8
|
|
|
12.4
|
| ||||||
Free cash flow
|
|
135.1
|
|
|
100.5
|
| ||||||
Adjustments – Exclude
| ||||||||||||
Negative cash flows for South Africa and Heat Transfer
|
|
3.8
|
|
|
22.3
|
| ||||||
Annual incentive adjustments & other
|
|
0.4
|
|
|
5.8
|
| ||||||
Adjusted free cash flow for annual incentive purposes
|
$
|
139.3
|
|
$
|
128.6
|
|
|
8
|
%
|
“Core revenues” are
2020 PROXY STATEMENT | A-3 |
APPENDIX A
Adjusted free cash flow is defined as revenues for the Companynet operating cash flows from continuing operations less capital expenditures of continuing operations, excluding cash used in operations by our South Africa (which is net of a tax benefit) and Heat Transfer businesses. In addition, and as previously discussed, the results of SGS Refrigeration and Patterson-Kelley have been excluded from the South African projects. The South African projects have a finite lifeannual incentive targets and thus, are expected to have a diminishing impact on the Company’s operating results over the long-term. The Company’s management believes it is useful to disclose consolidated revenue without the results of its South African projects to provide investors with metrics that the Company’s management uses to measure the overall performance of its businesses. Core revenues do not provide investors with an accurate measure of, and should not be used as a substitute for the Company’s revenues as determinedannual incentive purposes in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.2019.
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13320-A Ballantyne Corporate Place • Charlotte, NC 28277 • USA
980-474-3700 • www.spx.com
For Against Abstain For Against Abstain For Against Abstain 3 2 B M 01 - Rick D. Puckett (Term will expire in 2023) 02 - Tana L. Utley (Term will expire in 2023) 03 - Meenal A. Sethna (Term will expire in 2023) Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 037UZA + + Proposals — The Board of Directors recommend a |
Electronic Voting Instructions
You can vote by Internet or telephone!
Available 24 hours a day, 7 days a week!
InsteadFOR all the nominees listed A and FOR Proposals 2 and 3. 2. Approval of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on May 7, 2017.
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Vote by telephone
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
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Company’s Independent Registered Public Accounting Firm for 2020. 1. Election of Directors: For Against Abstain Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title.
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Dear Stockholder:
The Annual Meeting of Stockholders of SPX Corporation will Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. B Authorized Signatures — This section must be held at 8:00 a.m. (Eastern Time) on Monday, May 8, 2017 at the SPX Building, 13320 Ballantyne Corporate Place, Charlotte, North Carolina 28277,completed for the following purposes:
1. Election of Directors: 01 - Ricky D. Puckett (Term will expire in 2020), 02 - Tana L. Utley (Term will expire in 2020).
2. Approval of Named Executive Officers’ Compensation, on aNon-binding Advisory Basis.
3. Recommendation on Frequency of Future Advisory Votes on Named Executive Officers’ Compensation, on aNon-binding Advisory Basis.
your vote to count. Please date and sign below. 4. Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for the 2017 fiscal year.
5. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q 2020 Annual Meeting Proxy Card For Against Abstain 000004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 ENDORSEMENT_LINE SACKPACK 1234 5678 9012 345 MMMMMMMMM MMMMMMMMMMMMMMM 4 5 2 3 9 8 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND C 1234567890 J N T C123456789 MMMMMMMMMMMM MMMMMMM 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext If no electronic voting, delete QR code and control # Ä You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/SPXC or scan the QR code — login details are located in the shaded bar below. Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/SPXC Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Votes submitted electronically must be received by 11:59 p.m. (Eastern Time), on May 13, 2020. Your vote matters – here’s how to vote!
Only holders
Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/SPXC Notice of Common Stock2020 Annual Meeting of Stockholders Proxy Solicited by Board of Directors for Annual Meeting — May 14, 2020 Eugene J. Lowe, III and Scott W. Sproule, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of SPX Corporation of recordto be held on May 14, 2020 or at the close of business on March 13, 2017any postponement or adjournment thereof. Shares represented by this proxy will be entitledvoted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote atFOR the meeting or any adjournment thereof.
election of the Board of Directors and FOR items 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) SPX Corporation qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Change of Address — Please print new address below. Comments — Please print your comments below. C Non-Voting Items To be sure that your vote is counted, we urge you to vote by telephone or by Internet. By giving your proxy, you do not affect your right to vote in person ifof you attend the meeting. Your prompt vote will aid the company in reducing the expense of additional proxy solicitation.
Dear Stockholder: The Annual Meeting of Stockholders of SPX Corporation will be held at 8:00 a.m. (Eastern Time) on Thursday, May 14, 2020 at the SPX Building, 13320 Ballantyne Corporate Place, Charlotte, North Carolina, 28277, for the following purposes: 1. Election of Directors: 01 - Rick D. Puckett (Term will expire in 2023), 02 - Tana L. Utley (Term will expire in 2023), 03 - Meenal A. Sethna (Term will expire in 2023). 2. Approval of Named Executive Officers’ Compensation, on a Non-binding Advisory Basis. 3. Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2020. 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. Only holders of Common Stock of SPX Corporation of record at the close of business on March 19, 2020 will be entitled to vote at the meeting or any adjournment thereof. For stockholders with common shares held in the company’sCompany’s KSOP Trust: It is important to remember that your specific voting directions to the Trustee are strictly confidential and may not be divulged by the Trustee to anyone, including the company or any director, officer, employee, or agent of the company. The Trustee will vote the shares being held by the Trust and not yet allocated to participants’ accounts in the same manner and proportion as the shares for which the Trustee has received timely voting instructions. Shares in participants’ accounts for which no timely voting instructions are received by the Trustee will be voted in the same manner.
BY ORDER OF |
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. qBOARD OF DIRECTORS John W. Nurkin Vice President, General Counsel and Secretary
Proxy — SPX Corporation
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 8, 2017
Charlotte, North Carolina
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned stockholder of SPX Corporation, a Delaware corporation, hereby appoints Eugene J. Lowe, III and Scott W. Sproule, or either one of them, with full power of substitution, to act as his or her agents and proxies at the Annual Meeting of Stockholders of SPX Corporation to be held in Charlotte, North Carolina on May 8, 2017 at 8:00 a.m. (Eastern Time) with authority to vote at said meeting, and adjournments thereof, as indicated below, all shares of stock of the company standing in the name of the undersigned on the books of the company.
This proxy when properly executed will be voted in the manner directed by the undersigned stockholder.If no direction is made, this proxy will be voted FOR ALL NOMINEES in Proposal 1, FOR Proposal 2, 1 YEAR on Proposal 3, FOR Proposal 4, and as the proxies deem advisable on all other matters that may properly come before the meeting.
PLEASE VOTE, DATE, AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.