Use these links to rapidly review the document
TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒ Filed by a party other than the Registrant ☐
Check the appropriate box:
Filed by a Party other than the Registranto | ||
Check the appropriate box: | ||
o | Preliminary Proxy Statement | |
o | ||
Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | ||
ý | ||
Definitive Proxy Statement | ||
o | ||
Definitive Additional Materials | ||
o | ||
Soliciting Material |
ALEXANDER & BALDWIN, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
Alexander & Baldwin, Inc. | ||||||||
(Name of Registrant as Specified In Its Charter) | ||||||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||||||
Payment of Filing Fee (Check the appropriate box): | ||||||||
ý | No fee | |||||||
o | ||||||||
Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11. | ||||||||
(1) | Title of each class of securities to which transaction applies: | |||||||
(2) | Aggregate number of securities to which transaction applies: | |||||||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||||||
(4) | Proposed maximum aggregate value of transaction: | |||||||
(5) | Total fee paid: | |||||||
o | ||||||||
Fee paid previously with preliminary materials. | ||||||||
o | ||||||||
Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing | ||||||||
(1) | Amount Previously Paid: | |||||||
| ||||||||
(2) | Form, Schedule or Registration Statement No.: | |||||||
(3) | Filing | |||||||
(4) | Date Filed: |
LETTER TO OUR SHAREHOLDERS |
|
To the Shareholders of Alexander & Baldwin, Inc.:
You are invited to attend the 20182019 Annual Meeting of Shareholders of Alexander & Baldwin, Inc., to be held in the HokuleiPiilani Ballroom, Dole Cannery, 735 Iwilei Road, Honolulu, Hawaii, on Tuesday,Friday, April 24, 201826, 2019 at 8:00 a.m. HST. We look forward to the opportunity to meet with you.
Whether or not you now plan to attend the Annual Meeting, please vote as soon as possible.You may vote via the Internet, by telephone or by requesting a paper proxy card to complete and return by mail. Specific instructions for shareholders are included in the enclosed proxy or on a Notice of Internet Availability of Proxy Materials being distributed to shareholders on or around March 12, 2018.11, 2019.
Your vote is important and your shares should be represented. Thank you for your continued support of A&B.
Sincerely, | ||
CHRISTOPHER J. BENJAMIN | ||
| ||
March |
NOTICE OF ANNUAL MEETING |
|
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date:
| Meeting Agenda: | ||||||||
Friday, April 26, 2019 | 1. | Elect ten directors to serve until the next Annual Meeting of Shareholders and until their successors are duly elected and qualified; | |||||||
Time: | |||||||||
8:00 a.m., HST | 2. | Conduct an advisory vote on executive compensation; | |||||||
Place: | 3. | Conduct an advisory vote on the frequency of future advisory votes on | |||||||
Piilani Ballroom, Dole Cannery | | executive compensation; | |||||||
735 Iwilei Road | |||||||||
Honolulu, Hawaii | 4. | Ratify the appointment of the independent registered public accounting firm for the ensuing year; and | |||||||
5. | Transact such other business as properly may be brought before the meeting or any adjournment or postponement thereof. |
The Board of Directors has set the close of business on February 15, 20182019 as the record date for the meeting. Owners of Alexander & Baldwin, Inc. stock at the close of business on that date are entitled to receive notice of and to vote at the meeting. Shareholders will be asked at the meeting to present valid photo identification. Shareholders holding stock in brokerage accounts must present a copy of a brokerage statement reflecting stock ownership as of the record date.
By Order of the Board of Directors, | ||
ALYSON J. NAKAMURA | ||
| ||
March |
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE PROMPTLY VOTE VIA
THE INTERNET OR BY TELEPHONE, OR REQUEST A PAPER PROXY CARD TO COMPLETE AND RETURN BY MAIL.
| | |||||
| ||||||
| | PAGEi | ||||
|
To assist you in reviewing this Proxy Statement, we would like to call your attention to key elements of this document. The following description is only a summary. For more information, please read the complete Proxy Statement.
Annual Meeting of Shareholders
| | |||||||
| | | | | | |||
| Friday, April 26, 2019, 8:00 a.m. HST | | ||||||
| | | | | | | | |
Place: | | Piilani Ballroom Dole Cannery 735 Iwilei Road Honolulu, Hawaii | | |||||
| | | | | | | | |
Record Date: | | February 15, | | |||||
| | | | | | | | |
Voting: | | Shareholders as of the record date are entitled to vote. | | |||||
| | | | | | | | |
Admission: | | Shareholders will be asked to present valid photo identification. Shareholders holding stock in brokerage accounts must present a copy of a brokerage statement reflecting stock ownership as of the record date. | | |||||
| | | | | | | | |
| | | | | | | | | | | | |
Agenda Item | | Board Recommendation | | Page Reference | | |||||||
Election of ten directors | | FOR each director nominee | | 3 | | |||||||
Advisory vote on executive compensation | FOR | 45 | ||||||||||
| Advisory vote on frequency of future advisory votes on executive compensation | | ANNUAL | | 46 | | ||||||
Ratification of appointment of Deloitte & Touche LLP as our independent registered public accounting firm | FOR | |||||||||||
| | | | | | | | | | | | |
The following table provides summary information about each director nominee. Each director nominee is elected until the next Annual Meeting of Shareholders.
| Name |
| Director Since | | Occupation | | Committees | | ||||||||
| ||||||||||||||||
Christopher J. Benjamin | | 2016 | | President & Chief Executive Officer, Alexander & Baldwin, Inc. | | — | | |||||||||
W. Allen Doane | 2012 | Retired Chairman of the Board and CEO of A&B Predecessor | • Audit | |||||||||||||
| Robert S. Harrison | | 2012 | | Chairman | | • Nominating & | | ||||||||
David C. Hulihee | ||||||||||||||||
| 2013 | Chairman of the Board and President, Royal Contracting Co., Ltd.
|
| |||||||||||||
| — | |||||||||||||||
| 2012 | | Chairman of the Board of A&B Retired CEO of A&B | | — | | ||||||||||
Diana M. Laing | ||||||||||||||||
| Interim Executive Vice President and Interim Chief Financial Officer of A&B |
|
| |||||||||||||
| | | | | | | | | | | | | | | | |
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGEii | | |
| SUMMARY INFORMATION |
| Name |
| Director Since | | Occupation | | Committees | | |||||||||
| Thomas A. Lewis, Jr. | | 2017 | | Retired CEO, Realty Income Corporation | | • Compensation | | |||||||||
Douglas M. Pasquale | 2012 | Founder & CEO of Capstone Enterprises Corporation | • Audit, Chair • Nominating & Corporate Governance | ||||||||||||||
| Michele K. Saito | | 2012 | | President, DTRIC Insurance Company | | • Compensation, Chair • Nominating & Corporate Governance | | |||||||||
2012 | President and Chief Operating Officer, First Hawaiian, | • Audit | |||||||||||||||
| | | | | | | | | | | | | | | | |
Executive Compensation Linked to Performance
The Company firmly believes in pay for performance and aligning pay with shareholder interests and the Company’sCompany's business objectives. Accordingly, the majority of executive compensation is tied to performance. In 2017,2018, our Chief Executive Officer (“CEO”("CEO"), Christopher Benjamin, received 76%79% of his target compensation in the form of performance-based pay, consisting of annual incentives (cash) and long-term incentives (equity), with the remaining 24%21% set as salary.fixed pay. For our other Named Executive Officers, 62%65% of their target compensation was performance-based with the remaining 38%35% set as salary*fixed pay*. All elements of executive compensation are generally targeted at the 50th percentile of market pay data. In 2017,2018, our executive compensation program received strong support from shareholders with overapproximately 97% of say on pay votes cast in approval of the program.
We encourage you to read our Compensation Discussion and Analysis (“("CD&A”&A"), which begins on page 1920 and describes our pay for performance philosophy and each element of compensation. Our Board of Directors recommends approval, on an advisory basis, of the compensation of our Named Executive Officers, as further described in the CD&A and “Proposal"Proposal No. 2: Advisory Vote on Executive Compensation”Compensation" beginning on page 45.
ALEXANDER & BALDWIN, INC. ◾
PROXY STATEMENTequity award. It does not include the compensation for Diana Laing, the Interim Executive Vice President and Interim Chief Financial Officer.
| | | ||
| | | ||
ALEXANDER & BALDWIN, INC. | 2019 PROXY STATEMENT |
Table of Contents
Page | |||||||
---|---|---|---|---|---|---|---|
NOTICE OF 2019 ANNUAL MEETING OF SHAREHOLDERS | i | ||||||
i | |||||||
1 | |||||||
PROPOSAL NO. 1: Election of Directors | 3 | ||||||
3 | |||||||
9 | |||||||
| 9 | ||||||
| 9 | ||||||
| 9 | ||||||
Board Leadership Structure | 9 | ||||||
The Board's Role in Strategy and Risk Oversight | 10 | ||||||
Pay Risk Assessment | 10 | ||||||
Board of Directors and Committees of the Board | 11 | ||||||
12 | |||||||
| 13 | ||||||
| 13 | ||||||
Code of | 13 | ||||||
| 13 | ||||||
13 | |||||||
15 | |||||||
15 | |||||||
16 | |||||||
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS | 17 | ||||||
17 | |||||||
17 | |||||||
17 | |||||||
20 | |||||||
20 | |||||||
32 | |||||||
32 | |||||||
33 | |||||||
34 | |||||||
35 | |||||||
36 | |||||||
37 | |||||||
37 | |||||||
39 | |||||||
39 | |||||||
42 | |||||||
PROPOSAL NO. 2: Advisory Vote on Executive Compensation | 45 | ||||||
PROPOSAL NO. 3: Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation | |||||||
46 | |||||||
47 | |||||||
PROPOSAL NO. | 48 | ||||||
49 |
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE1 |
|
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Why am I receiving these materials?
The Board of Directors of Alexander & Baldwin, Inc. (“("A&B”&B" or the “Company”"Company") is soliciting proxies for the Annual Meeting of Shareholders to be held on April 24, 201826, 2019 and at any adjournment or postponement of the meeting (the “Annual Meeting”"Annual Meeting").
Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the full set of proxy materials?
On or around March 12, 2018,11, 2019, we mailed to our shareholders (other than to certain street name shareholders or those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials, which contains instructions for accessing and reviewing on the Internet all of our proxy materials, including this Proxy Statement and our 20172018 Annual Report to Shareholders. In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (“SEC”("SEC"), instead of mailing a printed copy of our proxy materials to each shareholder of record, we are furnishing proxy materials on the Internet. This process is designed to expedite shareholders’shareholders' receipt of proxy materials, lower the cost of the Annual Meeting and help conserve natural resources.
How can I request a paper copy of these materials?
You will not receive a printed copy of the proxy materials unless you request it. If you would prefer to receive printed proxy materials, please follow the instructions for requesting such materials contained in the Notice of Internet Availability of Proxy Materials. This process is designed to expedite shareholders’shareholders' receipt of proxy materials, lower the cost of the Annual Meeting and help conserve natural resources.
Can I vote using the Internet?
The Notice of Internet Availability of Proxy Materials also provides instructions for voting your shares using the Internet.
Who is entitled to vote at the Annual Meeting?
Shareholders of record at the close of business on February 15, 20182019 are entitled to notice of and to vote at the Annual Meeting. On that date, there were 71,952,94472,092,013 shares of common stock outstanding, each of which is entitled to one vote.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE2 | | |
| GENERAL INFORMATION ABOUT THE ANNUAL MEETING |
What is the voting requirement to approve each of the proposals?
Provided a quorum is present, a majority of the votes cast will be necessary for the election of directors, the ratification of the appointment of the independent registered public accounting firm, and the approval, on an advisory basis, of our executive compensation. Shareholders are being asked to express a preference on the frequency of future advisory votes on executive compensation, and the frequency receiving a plurality of votes cast will be considered the preference of shareholders.
What effect do abstentions and brokernon-votes have on the proposals?
Abstentions and brokernon-votes will be included for purposes of establishing a quorum at the Annual Meeting. However, abstentions and brokernon-votes will have no effect on the voting results for any matter, as they are not considered to be votes cast.
|
|
Who will bear the cost of soliciting votes for the Annual Meeting?
Officers, employees and directors of A&B and its subsidiaries may, without additional compensation, solicit proxies by telephone or by other appropriate means. Arrangements also will be made with brokerage firms and other persons that are record holders of A&B’s&B's common stock to forward proxy soliciting material to the beneficial owners of the stock, and A&B will reimburse those record holders for their reasonable expenses. A&B has retained the firm of D.F. King & Co., Inc. to assist in the solicitation of proxies at a cost of $9,500$10,000 plus reasonableout-of-pocket expenses.
May I change my vote or revoke my proxy?
You may revoke your proxy or change your vote any time before it is voted at the Annual Meeting by:
When were the Proxy Statement materials made publicly available?
This Proxy Statement and the enclosed proxy are being mailed to shareholders and are being made available on the Internet at www.alexanderbaldwin.com on or about March 12, 2018.11, 2019.
Who can I contact to obtain directions to the Annual Meeting site?
You may contact Stacy MercadoDawn Furutani at (808)525-6661 525-6634 to obtain directions to the site of the Annual Meeting, the HokuleiPiilani Ballroom at Dole Cannery, 735 Iwilei Road, Honolulu, Hawaii.
What do the references to the term “A"A&B Predecessor”Predecessor" mean in this document?
References in this Proxy Statement to “A"A&B Predecessor”Predecessor" mean Alexander & Baldwin, Inc. prior to its separation from Matson, Inc. on June 29, 2012.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE3 |
|
PROPOSAL NO. 1: ELECTION OF DIRECTORS
As part of adopting new corporate documents in connection with our conversion to a real estate investment trust (“REIT”("REIT"), A&B took the opportunity to enhance its governance practices by declassifying its board, adopting a majority voting standard in uncontested elections and eliminating the super-majoritysupermajority voting requirement to amend its articles of incorporation. These actions are in response to investor feedback we received during our ongoing shareholder engagement initiatives and are in line with best practices. Ten Directorsdirectors will be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their successors are duly elected and qualified.
Director Nominees and QualificationsQualification of Directors.The nominees of the Board of Directors are the ten persons named below. All nominees except for Diana M. Laing are current members of the Board of Directors. The Board of Directors believes that all nominees will be able to serve. However, if any nominee should decline or become unable to serve for any reason, shares represented by the accompanying proxy will be voted for the replacement person nominated by the Board of Directors, or the Board may choose to reduce the number of directors serving on the Board. Each director nominee identified below was unanimously nominated by the Board at the recommendation of the Nominating and Corporate Governance Committee.
Under A&B’s retirement policy for directors, Charles G. King,Jenai S. Wall, who has served as a director of A&B or A&B Predecessor since 1989,2015, is retiring from the Board at the Annual Meeting. In addition to his service as a director, Mr. King served as the Lead Independent Director of A&B since April 2015, served on the Nominating and Corporate Governance Committee since 2011, served on the Audit Committee from 1989 to 1993, and served on the Compensation Committee from 1993 through 2018 and as its Chair since 2004.not standing for re-election. The Board and management thank Mr. KingMs. Wall for his years ofher service and valued advice.
Below are the names, ages (as of March 31, 2018)2019), and principal occupations of each person nominated by the A&B Board, their business experience during at least the last five years, the year each first was elected or appointed a director and qualifications of each director.
Our Nominating Committee is focused on creating a Board that consists of members that have a diversity of professional experience and a combined skill set to help oversee our business effectively. The Board weighs the alignment of Board capabilities with the needs of A&B as part of the Board’sBoard's self-assessment process. The Nominating Committee’sCommittee's processes for selecting director nominees are described in greater detail in “Certain"Certain Information Concerning the Board of Directors—Nominating Committee Processes”Processes" below. In 2017, as the Board determined to evaluate a REIT conversion, it also decided that additional REIT expertise would be valuable. With the assistance of an executive search firm, Mr. Lewis, a seasoned REIT executive, was appointed to the Board.
Our Board members have a diverse range of perspectives and are knowledgeable about our businesses. Each director contributes in establishing a board climate of trust and respect, where deliberations are open and constructive. A&B’s&B's business strategy is Hawaii-focused and, accordingly, the Board believes it is valuable to shareholders that the greata significant majority of our directors be Hawaii-based executives who can provide extensive local knowledge and insight.
Skills Aligned with Board Needs
Strong combined skillset* and local Hawaii expertise effectively position the Board to navigate Hawaii’sHawaii's unique business environment:
Commercial Real Estate | 6 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
Real Estate Development/Construction | 6 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
Executive Leadership | 11 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
Finance/Accounting | 7 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
Public Board | 6 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
Agricultural Operations | 4 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
Hawaii Market and Community Knowledge | 10 of 11 Directors | |||||||||||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 |
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE4 | | |
| PROPOSAL NO. 1 |
In selecting nominees, the Board has considered the factors noted previously;above; the current mix of skills and experience represented by our directors; and the qualifications of each nominated director, which includes the factors reflected as follows.
| | |
Christopher J. Benjamin Age: 55 |
Director Qualifications: As a member of A&B’s&B's and A&B Predecessor’sPredecessor's senior management team for over a decade, Mr. Benjamin, who is President and Chief Executive Officer of A&B, brings to the Board anin-depth knowledge of all aspects of the Company’sCompany's real estate operations, including commercial real estate and real estate development, and its agribusiness operations.development. Having served for more than seven years as Chief Financial Officer, he has thorough knowledge of the financial management of the Company, including accounting, treasury and investor relations activities. He is knowledgeable about Hawaii and A&B’s&B's operating markets through his involvement in the Hawaii business community and local community organizations.
| | |
W. Allen Doane Age: 71 |
Director Qualifications: As a member of A&B Predecessor’sPredecessor's senior management team for almost two decades, Mr. Doane, who was Chief Executive Officer and Chairman of the Board of A&B Predecessor until his retirement from those positions in 2009, brings to the Board anin-depth knowledge of all aspects of the Company’sCompany's real estate operations, including commercial real estate and real estate development, and its agribusiness operations.development. Mr. Doane’sDoane's experience managing a complex business organization has provided him with financial expertise and he has been designated by the Board of Directors as an Audit Committee Financial Expert. He also has board experience, including his service on various corporate andnon-profit boards, and is knowledgeable about Hawaii and A&B’s&B's operating markets through his involvement in the Hawaii business community and local community organizations.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | | ||
| | | ||
ALEXANDER & BALDWIN, INC. | 2019 PROXY STATEMENT |
| | |
| | PAGE5 |
PROPOSAL NO. 1 |
|
| | |
58 |
Director Qualifications: As Chairman and Chief Executive Officer of FHB, Hawaii’sHawaii's largest financial institution, Mr. Harrison brings to the Board experience in managing complex business organizations. He also has banking and financial expertise. Mr. Harrison has board experience through his service on various corporate andnon-profit boards and is knowledgeable about Hawaii and A&B’s&B's operating markets through his involvement in the Hawaii business community and local community organizations.
| | |
David C. Hulihee Age: 70 |
Director Qualifications: As former President and Chief Executive Officer of Grace Pacific and Chairman of the Board and President of Royal Contracting Co., Ltd., both major Hawaii infrastructure and construction companies, Mr. Hulihee brings to the Board construction and development expertise and experience in managing complex business organizations. Mr. Hulihee has board experience, including his service on various corporate andnon-profit boards, and is knowledgeable about Hawaii and A&B’s&B's operating markets through his involvement in the Hawaii business community and local community organizations. Mr. Hulihee also is A&B’s&B's largest individual shareholder, owning or controlling approximately 4.5%3,200,000 (4.4%) of our outstanding shares, and as such his interests are well-aligned with those of shareholders.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENTTable of Contents
| | | |
| PAGE6 | | |
| PROPOSAL NO. 1 |
|
| ||
|
65 |
Director Qualifications: As a member of A&B’s&B's and A&B Predecessor’sPredecessor's senior management team for two decades, Mr. Kuriyama, who is Chairman of the Board and former Chief Executive Officer of A&B, brings to the Board anin-depth knowledge of all aspects of the Company’sCompany's real estate operations, including commercial real estate and real estate development, and its agribusiness operations.development. He is knowledgeable about Hawaii and A&B’s&B's operating markets through his involvement in the Hawaii business community and local community organizations.
| | |
Diana M. Laing Age: 64 Director Nominee |
Director Qualifications: As former Chief Financial Officer of American Homes 4 Rent, a REIT focused on the acquisition, renovation, leasing and operation of single-family homes as rental properties, Ms. Laing contributes in-depth REIT experience, as well as experience in finance, accounting and managing a complex business organization. She also has board experience, including her service on the boards of other publicly traded companies.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE7 |
PROPOSAL NO. 1 |
| | |
Thomas A. Lewis, Jr. Age: 66 |
Director Qualifications: As former Chief Executive Officer and Vice Chairman of Realty Income, one of the nation’snation's largest and most successful REITs, Mr. Lewis contributesin-depth REIT experience, as well as experience in finance, accounting and managing a complex business organization. He also has board experience, including his service on the boards of other publicly traded companies. He is knowledgeable about Hawaii, having spent his teen and collegiate years on Oahu, and is a part-time resident.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
| | |
64 |
Director Qualifications: As Chief Executive Officer of Capstone Enterprises and as former President, Chief Executive Officer and Chairman of the Board of Nationwide Health Properties, Inc. prior to its merger in July 2011 with Ventas, Mr. Pasquale contributesin-depth REIT experience, as well as experience in finance, accounting and managing a complex business organization. This experience has provided Mr. Pasquale with financial expertise, and he has been designated by the Board of Directors as an Audit Committee Financial Expert. He also has board experience, including his service on the boards of other publicly traded companies.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE8 | | |
| PROPOSAL NO. 1 |
| | |
Michele K. Saito Age: 59 |
Director Qualifications: As President of DTRIC Insurance Company and former President of Farmers, two of Hawaii’sHawaii's largest insurance companies, Ms. Saito brings to the Board experience in managing a complex business organization and financial and accounting expertise. Ms. Saito also has board experience, including her service on various corporate andnon-profit boards, and is knowledgeable about Hawaii and A&B’s&B's operating markets through her involvement in the Hawaii business community and local community organizations.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
| ||
|
|
Director Qualifications: As Chairman and Chief Executive Officer of Foodland, the largest locally-owned grocery retailer in Hawaii, and other entities in its family of companies, Ms. Wall brings to the Board experience in managing complex business organizations and has commercial real estate and retail expertise. She also has board experience, through her service on various corporate andnon-profit boards, and is knowledgeable about Hawaii and A&B’s operating markets through her involvement in the Hawaii business community and local community organizations.
Eric K. Yeaman
51 |
Director Qualifications: As President and Chief Operating Officer of FHB and former Chief Executive Officer of Hawaiian Telecom, the state’sstate's leading integrated communications company, Mr. Yeaman brings to the Board experience in managing complex business organizations. He also has financial and accounting expertise and has been designated by the Board of Directors as an Audit Committee Financial Expert. Mr. Yeaman has board experience, including his service on the boards of other publicly traded companies. He is knowledgeable about Hawaii and A&B’s&B's operating markets through his involvement in the Hawaii business community and local community organizations.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE9 |
|
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Corporate Governance Profile. Sound principles of corporate governance are a priority for A&B's Board of Directors. Governance highlights include:
Shareholder Engagement. A&B values the views of its shareholders. During 2018, members of our management team met or offered to meet with shareholders who cumulatively owned approximately 73 percent of our stock to discuss our operations, corporate governance, environmental and social initiatives, and executive compensation, and to solicit feedback on these and a variety of other topics. Shareholder perspectives are shared with the Board.
Director Independence.The Board has reviewed each of its current directors and nominees and has determined that all such persons, with the exception of Mr. Benjamin, Mr. Kuriyama (who retired as an employee of A&B on December 31, 2016)Messrs. Doane, Harrison, Lewis, Pasquale and Mr. Hulihee (who retired as an employee of A&B on December 31, 2015),Yeaman and Ms. Saito and Ms. Wall are independent under New York Stock Exchange (“NYSE”("NYSE") rules. In making its independence determinations, the Board considered the transactions, relationships or arrangements in “Certain"Certain Information Regarding Directors and Executive Officers – Certain Relationships and Transactions”Transactions" below, as well as the following: Mr. Doane – his status as a former executive officer of A&B Predecessor and banking relationships with FHB, an entity of which Mr. Doane is a director; Mr. Harrison – A&B’s&B's banking relationships with FHB, an entity of which Mr. Harrison is Chairman of the Board and Chief Executive Officer; Mr. Yeaman – A&B’s&B's banking relationships with FHB, an entity of which Mr. Yeaman is President and Chief Operating Officer; and Ms. Wall – A&B’s&B's banking relationships with FHB, an entity of which Ms. Wall is a director.
In light of Ms. Laing's current service as Interim Executive Vice President and Interim Chief Financial Officer, the Board does not view Ms. Laing as independent at this time. Due to the interim nature of her role (which will not last beyond April 10, 2019, with a one-time possible extension of no more than 90 days), it is expected that the Board will determine that Ms. Laing is independent under NYSE rules once her interim service as an A&B officer ceases. It is anticipated that Ms. Laing's interim service will be concluded prior to the Annual Meeting.
Board Leadership Structure.The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. It understands that there is no single approach to providing Board leadership and that the right Board leadership structure may vary as circumstances warrant.
Mr. Kuriyama transitioned from executive Chairman of the Board (“Chairman”) tonon-executive Chairman, effective January 1, 2017. The Board currently has a separatenon-executive Chairman, a CEO and a Lead Independent Director (currently Charles G. King, to be succeeded by Douglas(Douglas M. Pasquale upon Mr. King’s retirement from the board at the Annual Meeting.Pasquale). At this time, the Board believes that a separate Chairman is beneficial in providing oversight and leadership in handling board responsibilities. This also allows our CEO to focus on Company strategy and business operations. A Lead Independent Director allows the Board to function independently from management and provide objective judgment regarding management’smanagement's performance. The Board has determined that its leadership structure is appropriate for A&B at this time.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE10 | | |
| CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Lead Independent Director Duties Include
The Board’sBoard's Role in Strategy and Risk Oversight.The Board oversees the strategic direction of the Company. It has provided leadership on critical strategic issues, including the migration of the commercial real estate portfolio to Hawaii and the simplification of the Company's business model with the bulk sale of Maui agricultural lands. It receives regular strategic presentations from management and reviews and evaluates the Company's strategic and operating plans, as appropriate.
The Board also has oversight of the risk management process, which it administers in part through the Audit Committee. One of the Audit Committee’sCommittee's responsibilities involves discussing policies regarding risk assessment and risk management. Risk oversight plays a role in all major Board decisions and the evaluation of risk is a key part of the decision-making process. For example, the identification of risks and the development of sensitivity analyses are key requirements for capital requests that are presented to, and evaluated by, the Board.
This risk management process occurs throughout all levels of the organization but is also facilitated through a formal process in which the Company identifies significant risks through regular discussions with all levels of management. Risk management is reflected in the Company’sCompany's compliance, auditing and risk management functions, and its risk-risk based approach to strategic and operating decision-making. Management reviews its risk management activities with the Audit Committee and the full Board of Directors on a regular basis. In addition, risk management perspectives from each of A&B’s&B's business segments are included in the Company’sCompany's operating and strategic plans. Cybersecurity and information security risks are among the risks discussed with the Audit Committee and reported to the full Board. The Board believes that its current leadership structure is conducive to the risk oversight process.
Pay Risk Assessment.The Compensation Committee has a formal review process to consider and discuss the compensation policies, plans and structure for all of the Company’sCompany's employees, including the Company’sCompany's executive group, to ascertain whether any of the compensation programs and practices create excessive risks or motivate risky behaviors that are reasonably likely to have a material adverse effect on the Company. Management has worked with the Compensation Committee to review all Company incentive plans and related policies and practices, and the overall structure and positioning of total pay, pay mix, the risk management process and related internal controls.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Based on its formal review process, the Compensation Committee concluded that there continues to be no material adverse effects due to pay risk. Management and the Compensation Committee concluded that A&B’s&B's employee compensation programs represent an appropriate balance of fixed and variable pay, cash and equity, short-term and long-term compensation, financial andnon-financial performance, and an appropriate level of enterprise-wide risk oversight.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE11 |
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Strong Compensation Risk Management
Board of Directors and Committees of the Board.The Board of Directors held eightnine meetings during 2017. In conjunction with seven of these2018. At all regularly scheduled meetings, the independentnon-management directors of A&B met in formally-scheduled executive sessionssessions. The independent directors of A&B also met in executive session in 2018, led by the Lead Independent Director (Charles G. King)(Douglas M. Pasquale). Mr. King will be retiring from the Board effective as of the Annual Meeting; Douglas M. Pasquale has been appointed as Lead Independent Director upon Mr. King’s retirement. In 2017,2018, all directors were present at 100%75% or greater of the meetings of the A&B Board of Directors and Committees of the Board on which they serve. The Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each of which is governed by a charter, which is available on the corporate governance page of A&B’s&B's website, www.alexanderbaldwin.com.
Name | | Audit | | Compensation Committee | | Nominating and Corporate Governance Committee | ||||||
Christopher J. Benjamin | | | | | | | ||||||
W. Allen Doane |
| |||||||||||
| | | | | ||||||||
| ||||||||||||
| | chair | ||||||||||
David C. Hulihee | ||||||||||||
| ||||||||||||
| ||||||||||||
| ||||||||||||
| ||||||||||||
| ||||||||||||
| ||||||||||||
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
Stanley M. Kuriyama | | | | | | | ||||||
Thomas A. Lewis, Jr. | member | |||||||||||
Douglas M. Pasquale | | chair | | | | member | ||||||
Michele K. Saito | chair | member | ||||||||||
Jenai S. Wall | | | | member | | | ||||||
Eric K. Yeaman | member | |||||||||||
| | | | | | | | | | | | |
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE12 | | |
| CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Audit CommitteeCommittee::The current members of the Audit Committee are:
The Board has determined that each member is independent under the applicable NYSE listing standards and SEC rules. In addition, the Board has determined that Messrs. Pasquale, Doane and Yeaman are “audit"audit committee financial experts”experts" under SEC rules. The duties and responsibilities of the Audit Committee are set forth in a written charter adopted by the Board of Directors and are summarized in the Audit Committee Report, which appears in this Proxy Statement. The Audit Committee met seven times during 2017.2018.
Compensation Committee:Committee: The current members of the Compensation Committee are:
Mr. King will be retiring from the Board effective as of the Annual Meeting;
The Board has determined that each member is independent under the applicable NYSE listing standards. The Compensation Committee has general responsibility for management and other salaried employee compensation and benefits, including incentive compensation and stock incentive plans, and for making recommendations to the Board on director compensation. The Compensation Committee may form subcommittees and delegate such authority as the Committee deems appropriate, subject to any restrictions by law or listing standard. For further information on the processes and procedures for consideration of executive compensation, see the “Compensation"Compensation Discussion and Analysis”Analysis" section below. The Compensation Committee met five times during 2017.2018.
Nominating and Corporate Governance CommitteeCommittee::The current members of the Nominating and Corporate Governance Committee (the “Nominating Committee”"Nominating Committee") are:
The Board has determined that each member is independent under the applicable NYSE listing standards. The functions of the Nominating Committee include recommending to the Board individuals qualified to serve as directors; recommending to the Board the size and composition of committees of the Board and monitoring the functioning of the committees; advising on Board composition and procedures; reviewing corporate governance issues; overseeing the annual evaluation of the Board; and ensuring that an evaluation of management is occurring. The Nominating Committee met four timestwice during 2017.2018.
Nominating Committee Processes.The Nominating Committee is responsible for recommending to the Board individuals qualified to serve as directors of the Company. The Nominating Committee believes that the minimum qualifications for serving as a director are high ethical standards, a commitment to shareholders, a genuine interest in A&B and a willingness and ability to devote adequate time to a director’sdirector's duties. The Nominating Committee also may consider other factors it deems to be in the best interests of A&B and its shareholders, such as business experience, financial expertise and knowledge and involvement in Hawaii communities and businesses. While the Nominating Committee does not have a written diversity policy, it considers diversity ofwith respect to gender, ethnicity, knowledge, skills, professional experience, education and expertise, and representation in industries and geographies relevant to the Company as important factors in its evaluation of candidates.
The Nominating Committee identifies potential nominees through various methods, including engaging, when appropriate, firms that specialize in identifying director candidates and by asking current directors to notify the Nominating Committee of qualified persons who might be available to serve on the Board.
The Nominating Committee will consider director candidates recommended by shareholders. In considering such candidates, the Nominating Committee will take into consideration the needs of the Board and the qualifications of the candidate. To have a
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
candidate considered by the Nominating Committee, a shareholder must submit a written recommendation that includes the name of the shareholder, evidence of the shareholder’sshareholder's ownership of A&B stock (including the number of shares owned and the
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE13 |
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
length of time of ownership), the name of the candidate, the candidate’scandidate's qualifications to be a director and the candidate’scandidate's consent for such consideration.
The shareholder recommendation and information described above must be sent to the Corporate Secretary at 822 Bishop Street, Honolulu, Hawaii, 96813 and must be received not less than 120 days before the anniversary of the date on which A&B’s&B's Proxy Statement was released to shareholders in connection with the previous year’syear's annual meeting.
Once a potential candidate has been identified by the Nominating Committee, the Nominating Committee reviews information regarding the person to determine whether the person should be considered further. If appropriate, the Nominating Committee may request information from the candidate, review the person’sperson's accomplishments, qualifications and references, and conduct interviews with the candidate. The Nominating Committee’sCommittee's evaluation process does not vary based on whether or not a candidate is recommended by a shareholder.
Mr. LewisMs. Laing was recommended as a director candidate to the Nominating Committee by a third-partythird party search firm.
Board and Committee Self-Evaluation Process. The Board of Directors conducts annual board and committee evaluations to assess its performance and effectiveness. As part of this process, each board member responds to a questionnaire that includes areas for comments. A separate Board meeting is held for the purpose of discussing the responses and evaluating both board and committee performance.
Corporate Governance Guidelines.The Board of Directors has adopted Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities and to promote the more effective functioning of the Board and its committees. The guidelines provide details on matters such as:
Select Corporate Governance Guideline Topics
The full text of the A&B Corporate Governance Guidelines is available on the corporate governance page of A&B’s&B's corporate website, www.alexanderbaldwin.com.
Code of Ethics.A&B has adopted a Code of Ethics (the “Code”"Code") that applies to the CEO, Chief Financial Officer and Controller. A copy of the Code is posted on the corporate governance page of A&B’s&B's corporate website, www. alexanderbaldwin.com.www.alexanderbaldwin.com. A&B intends to disclose any changes in or waivers from its Code by posting such information on its website.
Code of Conduct.A&B has adopted a Code of Conduct, which is applicable to all directors, officers and employees, and is posted on the corporate governance page of A&B’s&B's corporate website, www.alexanderbaldwin.com.
Shareholder Engagement.A&B values the views of its shareholders. During 2017, members of our management team met with shareholders who cumulatively owned 71 percent of our stock to discuss our operations, corporate governance, executive compensation and environmental initiatives and to solicit feedback on these and a variety of other topics. Shareholder perspectives are shared with the Board. Shareholder feedback was taken into account in the decision to eliminate the classified board structure and adopt a majority voting standard for director elections.
Compensation of Directors.The CompanyCompensation Committee periodically reviews the compensation of itsA&B's non-employee Directors with the assistance of its executive compensation consultant, Willis Towers Watson (“WTW”("WTW"). The compensation levels and components were last reviewed in July of 2016October 2018 and the share-ownership guidelines are reviewed annually and, in each case, were deemed to be well aligned with market competitive practices with the exception of the vesting period for annual equity grants. The 2018 annual grants will vest in their entirety a year after grant date.practices. The following table summarizes the compensation earned by or paid to our directors (other than Mr. Benjamin, A&B CEO, whose compensation is included in the Summary
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE14 | | |
| CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Compensation Table)Table and receives no compensation for serving on the Board) for services as a member of our Board of Directors for the period from January 1, 20172018 through December 31, 2017.2018.
ALEXANDER & BALDWIN, INC. ◾2018 PROXY STATEMENTDIRECTOR COMPENSATION
Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Option Awards ($)(2) | | Non-Equity Incentive Plan Compen- sation ($) | | Change in Pension Value and Nonqualified Deferred Compen- sation Earnings ($)(3) | | All Other Compen- sation ($) | | Total ($) | ||||||||
| | | | | | | | | | | | | | | | | | | | | | |
(a) | | (b) | ��� | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | ||||||||
W. Allen Doane | | 67,250 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 157,250 | ||||||||
Robert S. Harrison | 70,250 | 90,000 | 0 | 0 | N/A | 0 | 160,250 | |||||||||||||||
David C. Hulihee | | 56,000 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 146,000 | ||||||||
Charles G. King(4) | 33,015 | — | 0 | 0 | N/A | 0 | 33,015 | |||||||||||||||
Stanley M. Kuriyama | | 86,500 | (5) | | 135,000 | (5) | | 0 | | 0 | | N/A | | 0 | | 221,500 | ||||||
Thomas A. Lewis, Jr. | 64,250 | (6) | 90,000 | 0 | 0 | N/A | 0 | 154,250 | ||||||||||||||
Douglas M. Pasquale | | 103,601 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 193,601 | ||||||||
Michele K. Saito | 75,945 | 90,000 | 0 | 0 | N/A | 0 | 165,945 | |||||||||||||||
Jenai S. Wall | | 65,000 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 155,000 | ||||||||
Eric K. Yeaman | 67,250 | 90,000 | 0 | 0 | N/A | 0 | 157,250 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE15 |
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
2017 Director Compensation
Name
| Fees ($)
| Stock
| Option
| Non-Equity
|
Change in ($)
| All Other
| Total
| |||||||||||||||||||||||||||||||||
(a)
| (b)
| (c)
| (d)
| (e)
| (f)
| (g)
| (h)
| |||||||||||||||||||||||||||||||||
W. Allen Doane
|
| 67,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 2,000
| (5)
|
| 159,265
|
| |||||||||||||||||||
Robert S. Harrison
|
| 70,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 0
|
|
| 160,265
|
| |||||||||||||||||||
David C. Hulihee
|
| 56,750
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 2,000
| (5)
|
| 148,765
|
| |||||||||||||||||||
Charles G. King
|
| 105,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| 0
| (3)
|
| 0
|
|
| 195,265
|
| |||||||||||||||||||
Stanley M. Kuriyama
|
| 85,750
| (4)
|
| 135,023
| (4)
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 2,000
| (5)
|
| 222,773
|
| |||||||||||||||||||
Thomas A. Lewis, Jr.
|
| 30,024
|
|
| 75,021
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 0
|
|
| 105,045
|
| |||||||||||||||||||
Douglas M. Pasquale
|
| 87,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 0
|
|
| 177,265
|
| |||||||||||||||||||
Michele K. Saito
|
| 64,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 0
|
|
| 154,265
|
| |||||||||||||||||||
Jenai S. Wall
|
| 64,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 0
|
|
| 154,265
|
| |||||||||||||||||||
Eric K. Yeaman
|
| 67,250
|
|
| 90,015
|
|
| 0
|
|
| 0
|
|
| N/A
|
|
| 0
|
|
| 157,265
|
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Our Board of Directors approved the followingnon-employee director compensation schedule of annual fees, which was developed with the assistance of WTW.
Pay Element | | Amount | ||||||||
Annual Board Retainer | | $56,000 | ||||||||
Chairman of the Board Annual Retainer |
| $85,000 | ||||||||
|
|
| ||||||||
|
|
| ||||||||
Lead Director Retainer (in addition to Board Retainer) |
|
| | $25,000 | ||||||
|
|
|
| |||||||
|
|
| ||||||||
|
|
| ||||||||
Committee Member Retainers (in addition to Board Retainer) |
| •
|
| Compensation • Nominating and Corporate Governance | $9,000 $7,500 $6,000 | |||||
| •
|
| ||||||||
• Compensation • Nominating and Corporate Governance | $14,000 $10,000 $ 7,500 | |||||||||
| Annual Equity Award | |||||||||
| $ | 90,000 | ||||||||
Chairman of the Board Equity Award |
|
| | $135,000 | ||||||
| | | | |
Directors are provided an additional per meeting fee of $750 if the number of board or committee meetings they attend exceeds an annual predefined number, which is currently set at:
Under the terms of the Alexander & Baldwin, Inc. 2012 Incentive Compensation Plan (“("2012 Plan”Plan"), an automatic annual grant of approximately $90,000 in restricted stock units (“RSUs”("RSUs") is made to each director and approximately $135,000 in RSUs is granted to the Chairman of the Board at each Annual Meeting of Shareholders. A prorated grant is made upon appointment as a director at any time between Annual Meetings. Awards made prior to April 2018 vest in equal increments ofone-third each over three years. Starting with annual grants made inthe April 2018 annual grant, awards will vest in their entirety on theirone-year grant date anniversary.Non-employee directors may defer all or a portion of their vested shares until cessation of board service or the fifth anniversary of the award date.Non-employee directors may defer half or all of their annual cash retainer and meeting fees until retirement or until a later date they may select. Directors who are employees of A&B or its subsidiaries do not receive compensation for serving as directors.
Under A&B Predecessor’sPredecessor's retirement plan for directors, which was frozen effective December 31, 2004, a director with five or more years of service will receive alump-sum payment upon retirement or attainment of age 65, whichever is later, that is actuarially equivalent to a payment stream for the life of the director consisting of 50 percent of the amount of the annual retainer fee in effect on December 31, 2004, plus 10 percent of that amount for each year of service as a director over five years (up to an additional 50 percent). Only Mr. King hashad an accrued benefit under the retirement plan for directors.
Director Business Travel Accident Coverage.Directors Non-management directors have coverage of $200,000 for themselves and $50,000 for their accompanying spouses while traveling on A&B business.
Matching Gift Program.Directors may participate in A&B’s&B's matching gifts program for employees, in which A&B matches contributions to qualified cultural and educational organizations up to aan aggregate maximum of $3,000 annually.
Director Share Ownership Guidelines.The Board has adopted guidelines that encourage eachnon-employee director to own A&B common stock (including RSUs) with a value of $280,000, which is five times the current cashannual board retainer of $56,000, within five years of becoming a director. All current directors have met or are on track to meet the established guidelines.guidelines within the required timeframe.
Communications with Directors.Shareholders and other interested parties may contact any of the directors by mailing correspondence “c/"c/o A&B Law Department”Department" to A&B’s&B's headquarters at 822 Bishop Street, Honolulu, Hawaii 96813. The Law Department will forward such correspondence to the appropriate director(s). However, the Law Department reserves the right not to forward any offensive or otherwise inappropriate materials.
In addition, A&B’s&B's directors are encouraged to attend the Annual Meeting of Shareholders. All of the current A&B directors then in office attended the 20172018 Annual Meeting.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE16 | | |
| |
SECURITY OWNERSHIP OF CERTAIN SHAREHOLDERS
The following table lists the names and addresses of the only shareholders known by A&B on February 15, 20182019 to have owned beneficially more than five percent of A&B’s&B's common stock outstanding, the number of shares they beneficially own, and the percentage of outstanding shares such ownership represents, based upon the most recent reports filed with the SEC. Except as indicated in the footnotes, such shareholders have sole voting and dispositive power over shares they beneficially own.
Name and Address of Beneficial Owner
|
Amount of
|
Percent of
| |||||||||||||
BlackRock, Inc. 40 East 52nd Street New York, NY 10022
|
| 7,549,860
| (a)
|
| 15.31
| %
| |||||||||
The Vanguard Group 100 Vanguard Blvd. Malvin, PA 19355
|
| 7,545,339
| (b)
|
| 15.30
| %
| |||||||||
T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202
|
| 3,523,890
| (c)
|
| 7.1
| %
|
|
ALEXANDER & BALDWIN, INC. ◾ 2018, PROXY STATEMENTThe Vanguard Group has sole voting power over 65,779 shares and sole dispositive power over 9,843,746 shares, has shared voting power over 14,262 shares, and has shared dispositive power over 74,219 shares.
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE17 |
|
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
Security Ownership of Directors and Executive Officers.The following table shows the number of shares of A&B common stock beneficially owned as of February 15, 20182019 by each director and nominee, by each executive officer named in the “Summary"Summary Compensation Table”Table" below, and by directors and executive officers as a group and, if at leastone-tenth of one percent, the percentage of outstanding shares such ownership represents. Except as indicated in the footnotes, directors, nominees and executive officers have sole voting and dispositive power over shares they beneficially own.
Name or Number in Group | | Number of Shares Owned (a)(b) | | Stock Options (c) | | Total | | Percent of Class | |||||
W. Allen Doane | | 58,902 | | 0 | | 58,902 | | 0.1 | |||||
Robert S. Harrison | 19,984 | 0 | 19,984 | — | |||||||||
David C. Hulihee | | 3,194,353 | | 0 | | 3,194,353 | | 4.4 | |||||
Stanley M. Kuriyama | 325,414 | 218,810 | 544,224 | 0.8 | |||||||||
Thomas A. Lewis, Jr. | | 968 | | 0 | | 968 | | — | |||||
Douglas M. Pasquale | 57,961 | 0 | 57,961 | 0.1 | |||||||||
Michele K. Saito | | 18,360 | | 0 | | 18,360 | | — | |||||
Jenai S. Wall | 5,836 | 0 | 5,836 | — | |||||||||
Eric K. Yeaman | | 18,360 | | 0 | | 18,360 | | — | |||||
Christopher J. Benjamin | 164,378 | 177,551 | 341,929 | 0.5 | |||||||||
Diana M. Laing | | 0 | | 0 | | 0 | | — | |||||
Meredith J. Ching | 95,968 | 70,934 | 166,902 | 0.2 | |||||||||
Nelson N. S. Chun | | 121,302 | | 68,932 | | 190,234 | | 0.3 | |||||
Lance K. Parker | 12,904 | 1,740 | 14,644 | — | |||||||||
James E. Mead | | 3,494 | | 0 | | 3,494 | | — | |||||
16 Directors and Executive Officers as a Group | 4,102,302 | 537,967 | 4,640,269 | 6.4 | |||||||||
| | | | | | | | | | | | | |
Name or Number in Group
|
Number of Shares
| Stock Options (c)
| Total
| Percent of Class
| |||||||||||||||||||||
W. Allen Doane
|
| 66,776
|
|
| 0
|
|
| 66,776
|
|
| 0.1
|
| |||||||||||||
Robert S. Harrison
|
| 16,608
|
|
| 0
|
|
| 16,608
|
|
| —
|
| |||||||||||||
David C. Hulihee
|
| 3,202,718
|
|
| 0
|
|
| 3,202,718
|
|
| 4.5
|
| |||||||||||||
Charles G. King
|
| 73,297
|
|
| 0
|
|
| 73,297
|
|
| 0.1
|
| |||||||||||||
Stanley M. Kuriyama
|
| 399,779
|
|
| 218,810
|
|
| 618,589
|
|
| 0.9
|
| |||||||||||||
Thomas A. Lewis, Jr.
|
| 0
| (d)
|
| 0
|
|
| 0
|
|
| —
|
| |||||||||||||
Douglas M. Pasquale
|
| 54,585
|
|
| 0
|
|
| 54,585
|
|
| 0.1
|
| |||||||||||||
Michele K. Saito
|
| 14,984
|
|
| 0
|
|
| 14,984
|
|
| —
|
| |||||||||||||
Jenai S. Wall
|
| 3,486
|
|
| 0
|
|
| 3,486
|
|
| —
|
| |||||||||||||
Eric K. Yeaman
|
| 16,608
|
|
| 0
|
|
| 16,608
|
|
| —
|
| |||||||||||||
Christopher J. Benjamin
|
| 147,567
|
|
| 190,319
|
|
| 337,886
|
|
| 0.5
|
| |||||||||||||
James E. Mead
|
| 0
| (d)
|
| 0
|
|
| 0
|
|
| —
|
| |||||||||||||
Nelson N. S. Chun
|
| 117,606
|
|
| 68,932
|
|
| 186,538
|
|
| 0.3
|
| |||||||||||||
Meredith J. Ching
|
| 82,626
|
|
| 95,657
|
|
| 178,283
|
|
| 0.2
|
| |||||||||||||
Lance K. Parker
|
| 9,486
|
|
| 1,740
|
|
| 11,226
|
|
| —
|
| |||||||||||||
Paul K. Ito
|
| 66,571
|
|
| 0
|
|
| 66,571
|
|
| 0.1
|
| |||||||||||||
17 Directors and Executive Officers as a Group
|
| 4,275,694
|
|
| 575,458
|
|
| 4,851,152
|
|
| 6.7
|
|
Section16(a) Beneficial Ownership Reporting Compliance.Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”"Exchange Act") requires A&B’s&B's directors and executive officers, and persons who own more than 10 percent of A&B’s&B's common stock, to file reports of ownership and changes in ownership with the SEC. A&B believes that, during fiscal 2017,2018, its directors and executive officers filed all reports required to be filed under Section 16(a) on a timely basis.
Certain Relationships and Transactions.A&B has adopted a written policy under which the Audit Committee mustpre-approve all related person transactions that are disclosable under Item 404(a) of SEC RegulationS-K. Prior to entering into a transaction
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE18 | | |
| CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS |
with A&B, directors and executive officers (and their family members) must make full disclosure of all facts and circumstances to the Law Department. The Law Department then determines whether such transaction requires the approval of the Audit Committee. The Audit Committee considers all of the relevant facts available, including (if applicable) but not limited to: the benefits to the Company; the impact on a director’sdirector's or executive’sexecutive's independence, including with respect to an immediate family member of a director or executive or an entity in which a director or executive is a partner, shareholder or executive officer; the availability of other
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
sources for comparable products or services; the terms of the transaction; and the terms available to unrelated third parties or to employees generally. The Audit Committee will approve only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its shareholders. If a related person transaction involves a member of the Audit Committee, that member recuses himself or herself from the process of review and approval.
The Audit Committee has established written procedures to address situations when approvals need to be sought between meetings. Whenever possible, proposed related person transactions will be included as an agenda item at the next scheduled Audit Committee meeting for review and approval. However, if it appears that a proposed related person transaction will occur prior to the next scheduled Audit Committee meeting, approval will be sought from Audit Committee members between meetings. Approval by a majority of the Committee members will be sufficient to approve the related person transaction. If a related person transaction is approved in this manner, the action will be reported at the next Audit Committee meeting.
A&B’s&B's business strategy is Hawaii-focused and, accordingly, a number of our directors are Hawaii-based executives who provide extensive local knowledge and insight. Hawaii’sHawaii's business community is relatively small and isolated. Given A&B’s&B's position as Hawaii’s fourth largest privatea major landowner in the state, the largest owner of grocery-anchored retail assets, the largest materials and construction company in the state, and as one of the state’sstate's premier real estate developers, it is to be expected that relationships will exist between the Company and key business leaders and their companies, as disclosed below. The transactions described were made in the ordinary course of business and on substantially the same terms as those made with persons not related to A&B.
Related Person Relationships with First Hawaiian Bank:Robert S. Harrison and Eric K. Yeaman, directors of A&B, are Chairman and Chief Executive Officer, and President and Chief Operating Officer, respectively, of FHB.
FHB (i) has a 15.6 percent participation in A&B’s&B's $450 million revolving credit and term loan agreement (the “Revolver”"Revolver"), of which, in 2017,2018, the largest aggregate amount of principal outstanding was $146,000,000; $137,000,000$318,000,000; $427,600,000 and $2,229,487$5,253,000 were paid in principal and interest, respectively, to Revolver lenders that include FHB; and $158,000,000$110,800,000 was outstanding on February 15, 2018,2019, with interest payable on a sliding scale at rates between 1.25 percent to 2.05 percent (based on A&B’s&B's Total Debt to Total Adjusted Asset Value Ratio, as defined in the loan agreement) plus LIBOR, (ii) has a $5,000,000 loan made to a limited liability company in which a subsidiary of A&B is a member, of which, in 2017,2018, the largest aggregate amount of principal outstanding was $4,300,000; $227,000 and $162,000 were$4,068,000; $235,000 was paid in principal with an interest rate hedge fixed to 3.835 percent of which net interest paid was $153,000; and interest, respectively; and $4,000,000$3,792,000 was outstanding on February 15, 2018, with interest payable at a rate of LIBOR plus 2 percent,2019, and of which a subsidiary of A&B is a guarantor in the amount of the lesser of $3.15 million or the outstanding indebtedness, (iii) has a $11,700,000 loan made to a limited liability company in which a subsidiary of A&B is a member, of which, in 2017,2018, the largest aggregate amount of principal outstanding was $11,700,000; $0 and $475,000$580,000 were paid in principal and interest, respectively; and $11,700,000 was outstanding on February 15, 2018,2019, with interest payable at a rate of LIBOR plus 3.0 percent, (iv) has a $60,000,000 loan made to a limited liability company in which a subsidiary of A&B is a member, of which, in 2018, the largest aggregate amount of principal outstanding was $60,000,000; $0 was paid in principal with an interest rate hedge fixed to 3.135 percent of which net interest paid was $1,918,000; and $60,000,000 was outstanding on February 15, 2019; (v) has a $25,000,000 loan made to a limited liability company in which a subsidiary of A&B is a member, of which, in 2017,2018 the largest aggregate amount of principal outstanding was $23,000,000; $600,000$22,621,000 $31,406,000 and $700,000$396,000 were paid in principal and interest, respectively; and $12,600,000there was no balance outstanding onat February 15, 2018, with interest payable at a rate of LIBOR plus 3.0 percent,2019, and of which a subsidiary of A&B is a guarantor in the amount of the lesser of $2,500,000 or the outstanding indebtedness, and (v)(vi) is a commercial tenant in three properties owned by A&B subsidiaries, under leases with terms that
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE19 |
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS |
expire between 2022 and 2063, with aggregate gross rents in 20172018 of $831,000$990,000 and aggregate net rent from and after January 1, 20182019 to the expiration date of the leases of $9,128,000.$8,806,000.
In addition, after the acquisition of Grace Pacific on October 1, 2013, FHB has the following loans or lines of credit with the Company or its subsidiaries/affiliates: (i) Aa line of credit totaling $2,000,000 with a limited liability company in which a subsidiary of A&B is a 50 percent member expired in December 2018 and was renewed in January 2019, of which, in 2017,2018, there was no principal balance outstanding; and no amount was outstanding
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
on February 15, 2018,2019, with interest payable at rates between 1.82 percent to 2.25 percent plus LIBOR; (ii) an $18,000,000 loan, of which, in 2017,2018, the largest aggregate amount of principal outstanding was $6,450,000; $1,847,000$4,604,000; $2,301,000 and $271,000$202,000 were paid in principal and interest, respectively; and $4,258,000$2,121,000 was outstanding on February 15, 2018,2019, with interest payable at a rate of 5.19 percent; and (iii) a $13,500,000 loan, of which, in 2017, the largest aggregate amount of principal outstanding was $2,575,000; $2,575,000 and $24,000 were paid in principal and interest, respectively; and no amount was outstanding on February 15, 2018,percent.
Related Person Relationships with interest payable at a rate of 1.85 percent.
Foodland:Jenai S. Wall, a director of A&B, is Chairman and Chief Executive Officer of Foodland. Foodland or its subsidiariessister companies are commercial tenants in eightten properties owned by A&B subsidiaries, under leases with terms that expire between 2018 and 2031, with aggregate gross rents in 20172018 of $4,062,000$4,271,000 and aggregate net rent from and after January 1, 20182019 to the expiration date of the leases of $10,913,000.$9,068,000. These leases were entered into in the ordinary course of business, on commercially reasonable, prevailing terms and all but four were in effect prior to the election of Ms. Wall as a director.
rates.
ALEXANDER & BALDWIN, INC. Letter Agreement with Diana M. Laing◾: 2018 PROXY STATEMENT The Company entered into an agreement with Diana M. Laing to serve as Interim Executive Vice President and Interim Chief Executive Officer, as described on page 29.
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE20 | | |
| |
Compensation Discussion and Analysis (“("CD&A”&A")
The CD&A addresses A&B’s&B's compensation practices for 20172018 for the six executive officers named in the Summary Compensation Table on page 33 (collectively, the “Named"Named Executive Officers”Officers" or “NEOs”"NEOs"). On July 10, 2017 the Company hired James E. Mead asNovember 15, 2018, Diana M. Laing was appointed interim Chief Financial Officer, andreplacing James E. Mead. Ms. Laing entered into an Employmenta Letter Agreement with Mr. MeadA&B as described on page 29. In order to facilitate a smooth transition, with the former Chief Financial Officer, Mr. Paul K. Ito, the Company also executed a retention agreement as amended, with Mr. ItoMead, as described on page 29. The compensation for the following NEOs is addressed in the CD&A:
Executive Summary
In 2017,2018, our executive compensation program received strong support from shareholders, with overapproximately 97% of theSay-on-Pay votes cast in favor of the program. We believe this is because our pay program links pay with performance, aligns pay with shareholder interests and follows good governance practices. The vote on executive compensation is just one source of insight regarding shareholder views on our compensation practices. A&B also has an extensive shareholder outreach program that incorporates discussion of various governance topics, including compensation. In 20172018, we met on environmental, social and governance-focused matters with shareholders owning a significant percentage of our stock. The feedback we received regarding our compensation practices was very positive. The Compensation Committee welcomes shareholder perspectives on our program and is informed regarding feedback gathered in discussions with shareholders.
Approach to Compensation GovernanceGovernance..The Compensation Committee consistently evaluates the Company’sCompany's executive compensation practices and modifies or adopts programs or practices to provide an appropriate balance of risk and reward. A&B firmly believes in pay for performance and alignment with shareholder interests. Thus, a majority of NEO compensation is tied to performance to ensure alignment with shareholders. 76%79% of CEO and 63%65% of other NEO target total direct compensation (“TDC”("TDC") (excluding the Interim CFO) is performance-based pay aligned with shareholder interests. A&B adheres to good governance practices, as listed below, to ensure that it adopts the best practices to the extent that they are best aligned to the business goals and strategy of the Company as well as shareholder interests.
| | |
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |
| ||
|
| | |
| | PAGE |
|
Performance Accomplishments in 2017. In2018.2017, 2018 results reflected both the Company achieved a majorcontinued success of our core business and our ongoing strategic milestone as it completed all necessary steps to allow the Company to elect REIT status for the 2017 tax year. The REIT structure is essential to the Company’s Hawaii growth strategy and its ability to create value for shareholders, with benefits that include enhancing the Company’s ability to compete for the acquisition of Hawaii assets (including the ability to issue operating partnership units to acquire assets), lowering the cost of capital (via improved liquidity of the Company’s stock and reduced net asset value discount), increasing the return of capital to shareholders (via increased regular dividends), providing access to a broader investor base, and allowing continued ownership ofnon-REIT eligible businesses. Additionally, during the year, the Company continued to make significant progress toward the Company’s strategic objectives to simplify its business model, focus on growing the cash flow and portfolio value of itstransformation. Our commercial real estate assets, accelerateportfolio continued to generate strong results, buoyed in part by successful asset repositioning efforts. Our broader strategic agenda and simplification efforts were noteworthy, most prominently with the monetizationbulk sale of the development pipeline,majority of our agricultural land on Maui. Efforts to improve Materials and adhere to disciplinedConstruction operating performance are advancing, but progress trailed expectations and prudent financial management.resulted in lower-than-projected earnings from the segment.
Commercial Real Estate ("CRE") Segment
In 2017,2018, A&B continued to concentrate on its Hawaii-focused commercial real estate strategy to increase its recurring earnings and cash flows. Notable highlights for 20172018 are as follows:
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE22 | | |
| EXECUTIVE COMPENSATION |
Upon cessation of the Company’sCompany's sugar operations, the Company realigned its operations pursuant to which its diversified agricultural activities were combined with its development for sale activities for financial reporting purposes. The Land Operations segment is focused on managing activities conducted on the Company’sCompany's landholdings (historical and acquired), including diversified agriculture,land stewardship, renewable energy, and development for sale.sale and diversified agriculture. Significant accomplishments in 20172018 included:
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Grace Pacific continued to generate solid cash flows in 2017, although its results were significantly impacted by competitive pressures that impacted margins, as well as fewer bids offered in 2017lowered margins.
Other
Compensation Overview
The Company’sCompany's executive compensation programs are administered by its Compensation Committee. The Compensation Committee has retained WTW to provide advice and analysis on the design, structure and level of executive compensation for A&B.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Compensation Philosophy and Objectives.The Company seeks to align its objectives with shareholder interests through a compensation program that attracts, motivates and retains qualified and effective executives, and rewards performance and
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE23 |
EXECUTIVE COMPENSATION |
results. To achieve this, the Company uses the following pay elements, which are described more fully under the “Pay Elements”"Pay Elements" section of the CD&A:
Element of Pay | | Composition | | Metrics | | Rationale | ||||||||||
Base Salary | | |||||||||||||||
| Cash | | — | |
|
| •
| |||||||||
Annual Cash Incentives | ||||||||||||||||
| Cash
| 65.50% to 80% Financial Operating Goals |
|
| •
• Reinforces | |||||||||||
| 20% to 34.5%Value Creation Goals | |||||||||||||||
Long-Term Incentives | | 50% Performance Share Units | | Relative 3-year TSR (FTSE NAREIT All Equity REIT Index & Selected Peer Group) | |
|
|
| ||||||||
| | 50% Restricted Stock Units | | 3-year vesting period | | •
• Reinforces | ||||||||||
|
| |||||||||||||||
| — | •
| ||||||||||||||
Retirement Benefits | ||||||||||||||||
| | — | | •
| ||||||||||||
Severance Benefits | ||||||||||||||||
| — | •
| ||||||||||||||
| | | | | | | | | | | | |
Pay for Performance.The Company’sCompany's overall performance in 20172018 was reflected in elements of compensation earned by executivesNEOs (excluding the Interim CFO) for 2017.2018.
Pay Mix.The Company’sCompany's combination of pay elements is designed to place greater emphasis on performance-based compensation, while at the same time focusing on long-term talent retention and ensuring an appropriate balance between pay and risk. The Committee believes this is consistent with one of its key compensation objectives, which is to align management and shareholder interests. For 2017,2018, the TDC mix was generally within the same range as competitive practices based on survey data for each element of pay, as shown by the following table.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE24 | | |
| EXECUTIVE COMPENSATION |
Percentage of Target Total Direct Compensation
Provided by Each Pay Element for 20172018
Assessment of Total Compensation.In evaluating and making pay decisions, the Compensation Committee utilizes the following tools, resources and information:
• Company and individual performance | • Say-on-Pay vote results • Competitive market data • Economic environment • Job responsibilities and experience • Positioning within the executive's salary range • Tally sheets covering the past 5 years • Accrued benefits balances • Positioning in relation to the pay philosophy | |||||
• |
| |||||
• |
| |||||
• | Alignment to pay-for-performance principles • | |||||
|
| |||||
• |
| |||||
• |
| |||||
• |
• Investor feedback |
Internal Pay Equity. The Compensation Committee considers internal pay equity as a factor in establishing compensation for executives. While the Compensation Committee has not established a specific policy regarding the ratio of total compensation of the CEO to that of the other executive officers, it does review compensation levels to ensure that appropriate internal equity exists. In 2017,2018, it reviewed the ratio of the CEO’sCEO's salary, TCCTTC and TDC relative to the average compensation for the other NEOs, as reflected in the following table.NEOs. These ratios also were compared to benchmark survey data to determine whether compensation relationships are consistent with market practices. The Company’sCompany's target and actual ratios were within a reasonable range and reflect a lower ratio between the CEO and other NEOs than that of companies of similar size in general industry.
2017 Ratio of Target and Actual CEO Pay to Other NEOs*
Salary
|
Total Cash
|
Total Direct
| ||||||||||||||
A&B Target
|
| 1.87
|
|
| 2.41
|
|
| 3.10
|
| |||||||
A&B Actual
|
| 1.87
|
|
| 2.36
|
|
| 3.11
|
| |||||||
Benchmark Data (target)
|
| 2.13
|
|
| 2.56
|
|
| 3.31
|
|
ALEXANDER & BALDWIN, INC. ◾Elements 2018 PROXY STATEMENT
|
Pay Elements
The Company provides the following pay elements to its executive officers in varying combinations to accomplish its compensation objectives.
Salary:Salary:Salary is intended to provide a competitive fixed rate of pay based upon an executive’sexecutive's responsibilities. The Company believes that salary is less impactful than performance-based compensation in achieving the overall objectives of the Company’s Company's
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE25 |
EXECUTIVE COMPENSATION |
executive compensation program. Accordingly, at target, less than half (between 24% to 42%)43%, excluding the Interim CFO) of an NEO’sNEO's total compensation is paid as salary.
Generally, the Board of Directors determines the CEO’sCEO's annual salary change on the basis of the factors listed previously in theAssessment of Total Compensationsection. The Board has a formal performance review process for the CEO that includes categories such as, but not limited to: company goals, financial performance results, strategic effectiveness and innovation,leadership, business management, and talent management, and personal effectiveness. None of themanagement. Although performance categories isare not formally weighted, and there is no overall rating score. Eachscore, each Board member has an opportunity to provide specific input on the CEO’s performance.CEO's performance across key categories. The resultresults of this process isare carefully considered by the Board in determining the CEO’sCEO's annual salary.
The CEO recommends annual salary changes for the other NEOs. Salary adjustments for NEOs are generally considered by the Compensation Committee in February of each year for implementation on April 1. Any base salary increases for NEOs in 20172018 reflected increases based on performance and the factors listed in theAssessment of Total Compensationsection above.
Salary Information for 20162017 – 20172018
NEO | Base Salary as of 12/31/17 | % Change | Base Salary as of 12/31/18 | | |||||||||
Mr. Benjamin | | | $ | 650,000 | | | 3% | | | $ | 670,000 | | |
Ms. Laing* | | | N/A | | | N/A | | | $ | 50,000/mo. | | | |
Ms. Ching | | | $ | 288,371 | | | 3% | | | $ | 297,022 | | |
Mr. Chun | | | $ | 341,979 | | | 3% | | | $ | 352,238 | | |
Mr. Parker | | | $ | 375,000 | | | 3% | | | $ | 386,250 | | |
Mr. Mead** | | | $ | 500,000 | | | N/A | | | N/A | | | |
| | | | | | | |
NEO
| Base Salary as
| % Change
| Base Salary
|
Estimated
| ||||||||||||||||
Mr. Benjamin
| $
| 618,000
|
|
| 5.18
| %
| $
| 650,000
|
|
| 50th
|
| ||||||||
Mr. Mead
|
| N/A
| *
|
| N/A
|
| $
| 500,000
|
|
| 50th
|
| ||||||||
Mr. Chun
| $
| 332,018
|
|
| 3
| %
| $
| 341,979
|
|
| 50th
|
| ||||||||
Ms. Ching
| $
| 279,972
|
|
| 3
| %
| $
| 288,371
|
|
| 50th
|
| ||||||||
Mr. Parker
| $
| 309,000
|
|
| 20.82
| %**
| $
| 375,000
|
|
| 50th
|
| ||||||||
Mr. Ito
| $
| 371,500
|
|
| 3
| %
| $
| 382,645
|
|
| 50th
|
|
Annual Incentives:For 2017,2018, annual incentives for NEOs were provided through the Alexander & Baldwin, Inc. Performance Improvement Incentive Plan (“PIIP”("PIIP") to motivate executives and reward them if they achieve specificexecutives for achievement of pre-established corporate andgoals, business unit goals, and for creatingstrategic value creation for the Company. The financially orientedEach plan year, a bonus pool is funded for all plan participants (except for the CEO), based on attainment level of goals for that year, as determined by the Compensation Committee. Financial goals were established in February 2017. After receiving2018. To determine award levels for the NEOs other than the CEO, Value Creation ratings were recommended by the CEO, based on input from senior management and on business actions and outcomes in support of the CEO provided a recommended rating for “Value Creation”Company's strategic direction (as described below). Recommended ratings for the 20172018 performance period were considered in determining incentive awards for all other participants in the Company’s incentive plans other than the CEO. The recommendation wasthis group. Recommendations were reviewed and approved by the Compensation Committee.
For 2017, the incentive pool2018, funding of the PIIP awards for the Company’s NEO’s (other thanMs. Ching and Mr. Parker) wereChun was derived from the following performance measures: Real Estate Development & Sales Gross Margin, Commercial Real EstateCRE Same-Store NOI, aggregate NOI of the TRC Properties and Total Commercial Real Estate NOI for its real estate operations; Adjusted EBITDA for itsHonokohau Industrial Property (collectively, "CRE Non-Same-Store NOI"); Materials & Construction segment;EBITDA Attributable to A&B, Consolidated AdjustedPre-Tax Pre-tax Income (Loss) and a Value Creation ratingratings for Real Estate, Diversified Agribusiness, Materials & Construction and overall Company performance. These factors were selected because the Company believes they best reflect the results of business execution and profitability levels of the respective segments,operations, and Value Creation reflects accomplishments of the
Company that create long-term value for shareholders that are not necessarily reflected in annual financial results.
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE26 | | |
| EXECUTIVE COMPENSATION |
|
Bonus for the CEO was determined by the Compensation Committee, separate from other plan participants. While the Committee considers the funding level resulting from overall company results, the Committee may exercise its discretion to award at higher or lower levels for the CEO depending on how individual performance and contributions are assessed. The CEO's target is determined by incentive market data and an evaluation of performance determines the CEO's bonus award as a percentage of target. The Compensation Committee conducted an overall evaluation of the Company's and CEO's 2018 performance and awarded an incentive payout at 105.6% of target.
The Company believes that the annual incentive structure drives the following objectives:
Company and Business Unit Performance.The annual corporate and business unit targets are based on the Company’sCompany's Board-approved operating plan and adjusted in certain instances to exclude the effect of certain items. When establishing the operating plan, management and the Board of Directors consider the historical performance of the Company, external elements such as economic conditions and competitive factors, Company capabilities, performance objectives, and the Company’sCompany's strategic plan. The maximum and threshold performance ranges were determined on the basis of the level of difficulty in achieving the objective and are intended to ensure an enduring standard of performance.
For determination of award pool funding for 2017,2018, the Company’sCompany's operating performance was compared to the performance goals and value creation in support of strategic direction, as approved by the Compensation Committee.
Corporate Goal ($ in millions)
|
Threshold
|
Target
|
Maximum
|
Actual
| |||||||||||||||||||||
Commercial Real Estate Same-store NOI(4)
| $
| 76.2
|
| $
| 78.6
|
| $
| 80.9
|
| $
| 79.7
|
| |||||||||||||
Total Commercial Real Estate NOI(4)
| $
| 83.3
|
| $
| 87.7
|
| $
| 92.1
|
| $
| 89.4
|
| |||||||||||||
Real Estate Development & Sales Gross Margin
| $
| 33.0
|
| $
| 38.8
|
| $
| 44.6
|
| $
| 33.2
|
| |||||||||||||
Adjusted EBITDA4 – Materials & Construction
| $
| 34.2
|
| $
| 40.2
|
| $
| 46.3
|
| $
| 31.9
|
| |||||||||||||
Consolidated AdjustedPre-tax Income4
| $
| 58.2
|
| $
| 64.7
|
| $
| 74.4
|
| $
| 42.1
|
| |||||||||||||
Value Creation – Blended
|
| 1.0
|
|
| 2.0
|
|
| 3.0
|
|
| 2.2
|
|
Goal ($ in millions) | Threshold | Target | Maximum | Actual | | ||||||||||||||||
CRE Same-Store NOI Increase(2) | | | 1.8 | % | | | 3.9 | % | | | 5.0 | % | | | 3.6 | % | | ||||
CRE Non-Same-Store NOI(2) | | | $ | 9.8 | | | | $ | 10.3 | | | | $ | 10.6 | | | | $ | 10.6 | | |
Real Estate Development & Sales Gross Margin | | | $ | 38.6 | | | | $ | 51.5 | | | | $ | 64.4 | | | | $ | 175.7 | | |
Materials & Construction EBITDA Attributable to A&B(2) | | | $ | 24.8 | | | | $ | 29.2 | | | | $ | 33.6 | | | | $ | (63.3 | ) | |
Value Creation – Materials & Construction | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 0 | | | ||||
Value Creation – Diversified Agribusiness | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 3.0 | | | ||||
Value Creation – Real Estate | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 2.25 | | | ||||
Consolidated Adjusted Pre-tax Income (Loss)(2) | | | $ | 94.5 | | | | $ | 105.0 | | | | $ | 115.5 | | | | $ | (49.0 | ) | |
Value Creation – Consolidated | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 2.5 | | | ||||
| | | | | | | | | |
The incentive compensation for Mr. Chun and Ms. Ching was based on a weighted mix of (a) the level of achievement of the financial and operating goals set forth in the table above and (b) the scores awarded for Value Creation accomplishments achieved by each of the operating segments and the Company on a consolidated basis. The incentive compensation for Mr. Parker was based on Real Estate Development & Sales Gross Margin, Commercial Real Estate Same-store NOI, Total Commercial Real EstateNon-Same-Store NOI, and Value Creation rating for real estate operations, only.adjusted to reflect a non-cash impairment. Mr. Mead hadreceived a guaranteed annual bonus of $150,000$360,500 for 20172018 (his annual PIIP target) per his employmentretention agreement as described on page 29. Beginning with the 2018 calendar year, Mr. Mead is eligibleMs. Laing
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE27 |
EXECUTIVE COMPENSATION |
was not eligible to participate in the PIIP for 2017.2018. As described earlier, Mr. Benjamin’sBenjamin's annual incentive award is determined by the Compensation Committee based on its assessment of his individual performance and contributions, taking into account overall Company results.
The levels of achievement for financial and operating goals and value creation are rated on a scale from 0 to 3, as follows: 0 for below threshold performance, 1.0 for threshold performance, 2.0 for target performance and to 3.0 for maximum performance, with proration between threshold, target and maximum. Based on 20172018 performance shown above, the NEOs received scores for financial and operating goals ranging from 0 to 3.0 on the various metrics, and a blended score of 2.2 for Value Creation accomplishments.metrics. The financial and operating goals account for 63%65.5% of four of the NEO’sMr. Chun's and Ms. Ching's total incentive award, and Value
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Creation accounts for the remaining 37% as the result for Corporate takes into account performance against business unit goals.34.5%. Mr. Parker’sParker's award is based on Propertiesreal estate goals, which are comprised of 80% real estate financial goals and 20% real estate Value Creation (score: 2.5).Creation.
The term “Value Creation”"Value Creation" reflects performance and accomplishments of the Company that advance value creation for shareholders. The Company has two primary goals forAccordingly, Value Creation: increasing net asset value (“NAV”) and enhancing the market’s appreciation of NAV. Accordingly, value creationCreation may or may not be included in earnings for the current year. Examples of ways to create value include identifying and pursuing redevelopment andbuild-for-hold projects, converting non- to minimal-earning assets into commercial properties with a stable or growing income stream and structural changes, such as evaluating and effecting a REIT conversion. With input from the CEO, the Compensation Committee reviews and approves the Value Creation ratings.
Individual Performance.In addition to corporate and business unit performance goals, each NEO’s 2017NEO's 2018 award could be modified between 0% – 150% based on individual performance. The CEO’sCEO evaluated the other NEOs' performance and did not apply any modifiers for 2018. The Compensation Committee approved each NEO's award. The CEO's performance is reviewed and approved by the Compensation Committee each year. The Committee reviewed the CEO’sCEO's performance at its January meeting and approved an incentive award of $694,327$778,272 as determined by the Committee’sCommittee's assessment of the Company’sCompany's overall performance and the CEO’sCEO's performance and contributions in 2017.2018. The Committee determined the CEO’sCEO's award to be 106.8%105.6% of target.
Individual performance of the other NEOs is reviewed and assessed by the CEO. The CEO did not apply any individual modifiers.
Actual awards earned in total by the NEOs were slightly higher*higher than the overall targeted goal payouts and were as follows:
Target Bonus
|
Actual Bonus
| Actual as a % of Target
| ||||||||||||||||||||||||||||||||||||||
NEO
|
% of Base Salary
|
$
|
% of Base Salary
|
$
| ||||||||||||||||||||||||||||||||||||
Mr. Benjamin
|
|
100
|
%
|
$
|
650,000
|
|
|
106.8
|
%
|
$
|
694,327
|
|
|
106.8
|
%
| |||||||||||||||||||||||||
Mr. Mead**
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
$
|
150,000
|
|
|
N/A
|
| |||||||||||||||||||||||||
Mr. Chun |
|
50
|
%
|
$
|
170,989
|
|
|
53.4
|
%
|
$
|
182,650
|
|
|
106.8
|
%
| |||||||||||||||||||||||||
Ms. Ching
|
|
50
|
%
|
$
|
144,185
|
|
|
53.4
|
%
|
$
|
154,018
|
|
|
106.8
|
%
| |||||||||||||||||||||||||
Mr. Parker
|
|
60
|
%
|
$
|
205,145
|
|
|
70.0
|
%
|
$
|
262,652
|
|
|
128
|
%
| |||||||||||||||||||||||||
Mr. Ito***
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
N/A
|
|
| Target PIIP Award | Actual PIIP Award | Actual as a % of | | ||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
NEO | % of Base Salary | $ | % of Base Salary | $ | Target | | ||||||||||||||||||||
Mr. Benjamin | | | 110% | | | | $ | 737,000 | | | | 116.2% | | | | $ | 778,272 | | | | 105.6 | | | |||
Ms. Laing* | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | |||||
Ms. Ching | | | 55% | | | | $ | 163,362 | | | | 58.1% | | | | $ | 172,475 | | | | 105.6 | | | |||
Mr. Chun | | | 55% | | | | $ | 193,731 | | | | 58.1% | | | | $ | 204,538 | | | | 105.6 | | | |||
Mr. Parker | | | 70% | | | | $ | 270,375 | | | | 76% | | | | $ | 293,672 | | | | 108.6 | | | |||
Mr. Mead** | | | 70% | | | | $ | 360,500 | | | | N/A | | | | $ | 360,500 | | | | 100 | | | |||
| | | | | | | | | | | |
Equity-Based Compensation:
Equity grants are generally considered and granted annually in January by the Compensation Committee. Based on current market data provided by WTW, the CEO makes recommendations for each executive officer other than the CEO to the Compensation Committee, which retains full authority to set the actual grant amount. In determining the type and size of a grant to an executive officer, the Compensation Committee generally considers, among other things, the items mentioned above in theAssessment of Total Compensationsection.
As a result of the Company’s conversion to a REIT (retroactive to January 1, 2017), outstanding option awards, unvested RSUs, and unvested PSUs were adjusted according to anti-dilution provisions in the equity award agreements.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Each restricted stock unit award was adjusted on the dividend payment date to increase the number of units subject to the award in a manner identical to the additional shares issued to external shareholders who received payment of the distribution in the form of a stock dividend. Employees did not receive any portion of the adjustment for the Special Distribution in cash.
Wherever options, RSUs, and/or PSUs are shown in subsequent tables, footnotes will indicate if they are shown on apre- or post-adjusted basis.
In 2017,2018, the Company issued equity awards with a mix of 50% PSUs and 50% RSUs.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE28 | | |
| EXECUTIVE COMPENSATION |
Performance Ranges for 20172018 PSUs
Performance | Earnout* | |||||||||||
Threshold | 35th Percentile | 35% of Target | ||||||||||
| ||||||||||||
|
| 55th Percentile |
| |||||||||
|
|
|
| |||||||||
|
|
|
|
The actual performance level attained for the 2015 PSU grants covering the three-year performance period of 2015 to 2017 was at approximately the 42nd percentile on a blended basis relative to the Standard & Poor’s Midcap 400 and Russell 2000 indices. This resulted in an earnout of 56.1% of the portion of 2015 PSU grants for that three-year period.
Performance Ranges for 2018 PSUs
|
| |||||||||||
|
|
|
| |||||||||
|
|
|
| |||||||||
|
|
|
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
100% of Target | ||||
| 75th Percentile | 200% of Target | ||
| | | | |
Beginning with grants of PSUs made in 2018,2016 PSUs: With TSR at the Dow Jones US Real Estate Index will be replaced with17.1 percentile for the FTSE NAREIT All REITs Index and the Standard & Poor’sS&P Midcap 400 Index will be replaced with a select group of peer REITs that are a subsetindex and at the 29.5 percentile for the Russell 2000 index, none of the FTSE NAREIT All REITs Index focused on shopping centerPSUs granted in 2016 were earned. Amounts forfeited were as follows: Mr. Benjamin – 23,416 PSUs, Ms. Ching and diversified companies, with market capitalization between $500 millionMr. Chun – 7,154 PSUs, and $6 billion.
Beginning with the 2018 PSU grants, the earnout at the maximum level will be 200%.Mr. Parker – 5,202 PSUs.
LTI and Total Direct Compensation Positioning for 20172018
NEO
| Base Salary as of
| 2017 LTI Grant
|
Target Total Direct (Including Base
| Estimated
| ||||||||||||
Mr. Benjamin
|
$
|
650,000
|
| $
| 1,400,000
|
|
$
|
2,700,000
|
|
|
50th
|
| ||||
Mr. Mead
|
$
|
500,000
|
|
$
|
800,000
|
*
|
$
|
1,600,000
|
|
|
75th
|
| ||||
Mr. Chun
|
$
|
341,979
|
|
$
|
300,000
|
|
$
|
812,968
|
|
|
50th
|
| ||||
Ms. Ching
|
$
|
288,371
|
|
$
|
275,000
|
|
$
|
732,556
|
|
|
50th
|
| ||||
Mr. Parker
|
$
|
375,000
|
|
$
|
330,000
|
|
$
|
930,000
|
|
|
50th
|
| ||||
Mr. Ito
|
$
|
382,645
|
|
$
|
400,000
|
|
$
|
1,182,645
|
|
|
50th
|
|
NEO | | Base Salary as of 12/31/18 | 2018 LTI Grant | Target Total Direct Compensation 12/31/18 (Including Base Salary) | | |||||||||
Mr. Benjamin | | | $ | 670,000 | | | $ | 1,800,000 | | | $ | 3,207,000 | | |
Ms. Laing | | | $ | 600,000 | | | N/A | | | N/A | | | ||
Ms. Ching | | | $ | 297,022 | | | $ | 275,000 | | | $ | 735,384 | | |
Mr. Chun | | | $ | 352,239 | | | $ | 275,000 | | | $ | 820,969 | | |
Mr. Parker | | | $ | 386,250 | | | $ | 600,000 | | | $ | 1,256,625 | | |
Mr. Mead | | | N/A | | | $ | 800,000 | | | $ | 1,675,500 | * | | |
| | | | | | | |
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE29 |
EXECUTIVE COMPENSATION |
Retirement Plans:The Company provides various retirement plans to assist its employees with retirement income savings and to attract and retain its employees. The Committee periodically reviews the value of benefits from the retirement plans in conjunction with all other forms of pay in making compensation decisions.
A&B Retirement Plan for Salaried Employees (Frozen since 2012):The A&B Retirement Plan for Salaried Employees (the “Qualified"Qualified Retirement Plan”Plan"), which is atax-qualified defined benefit pension plan, provides pension benefits to the Company’sCompany's salariednon-bargaining unit employees. The Pension Benefits table of this Proxy Statement provides further information regarding the Qualified Retirement Plan. In 2007, A&B Predecessor closed participation in its traditional defined pension plan for newnon-bargaining unit employees hired after January 1, 2008. Effective January 1, 2012, the Company froze benefit accruals under its traditional defined benefit plans for allnon-bargaining unit employees hired before January 1, 2008 and replaced the benefit with a cash balance formula in which participants accrue 5% of their eligible annual compensation.
A&B Individual Deferred Compensation and Profit Sharing Plan:The Company has atax-qualified defined contribution retirement plan (the “A"A&B Profit Sharing Retirement Plan”Plan") available to all salariednon-bargaining unit employees, with at least one year of service, that provides for performance-based discretionary contributions to participants based on the degree of achievement ofpre- tax income goal specific goals similar to 2018 PIIP goals (excluding the profit sharing planimpact of the Kukui'ula impairment) as determined by the Compensation Committee. In 2017,2018, available contributions were set between zero and five percent of each employee’semployee's base salary. There was noa 3.62% profit-sharing contribution for 2017.2018. The plan also provides a discretionary match under the Individual Deferred Compensation (401(k)) component of the plan for all salariednon-bargaining unit employees. In 2017,2018, that plan provided for a match of up to three percent of the compensation deferred by a participant during the fiscal year, subject to IRS maximum compensation limitations. The value of the Company’s 2017Company's 2018 profit sharing contribution and Individual Deferred Compensation matches for NEOs are included in the Summary Compensation Table of this Proxy Statement.
A&B Excess Benefits Plan:Thisnon-qualified benefit plan (the “Excess"Excess Benefits Plan”Plan") for executives is designed to meet the retirement plan objectives described above. Certain executives, including all NEOs, are eligible to participate in the Excess Benefits Plan. It complements the Qualified Retirement Plan and A&B Profit Sharing Retirement Plan by providing benefits and contributions in amounts that could not be provided by those plan’splan's formulas due to the limits imposed by tax law. The Pension Benefits table of this Proxy Statement provides further information regarding the A&B Excess Benefits Plan.
Employment and Other Agreements: Except as set forth below, the Company does not provide employment or similar agreements for any of the NEOs. The Company believes in a policy of “at will”"at will" employment.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
On July 10, 2017,September 6, 2018, A&B announced the resignation of Mr. Ito resignedMead as the Company’s CFO but continued to serve as SeniorExecutive Vice President and Treasurer through January 31,CFO, effective as of November 15, 2018. To provide for an orderly transition, the Company entered into a retention agreement with Mr. Ito inMead under which he received $300,000, an additional $175,000 and an additional $195,000, respectively,$360,500 (his annual PIIP target) if he remained employed with A&B through August 31, 2017, October 31, 2017 and December 31, 2017, respectively.November 15, 2018. During this period, Mr. ItoMead continued to receive his current base salary and remained eligible to participate in A&B’s&B's benefit plans, but he received no performance, incentive or equity awards under the PIIP.plans.
Also on JulyEffective October 10, 2017, Mr. Mead2018, Ms. Laing was appointed CFO.Interim Executive Vice President; she became Interim CFO, effective November 15, 2018. The Company entered into ana letter agreement with Mr. Mead,Ms. Laing dated September 28, 2018, under which Mr. MeadMs. Laing was (i) paid an annuala base salary of $500,000, (ii) received$50,000 per month. Ms. Laing's interim role will not last beyond April 10, 2019, with a 2017 cash incentiveone-time possible extension of $150,000 (an amount equal to a prorated annual cash incentive of 60% of base salary), and (iii) received a long-term incentive grant of $800,000, split equally between time-based restricted stock units and performance share units under the 2012 Plan.no more than 90 days.
Severance Plan and Change in Control Agreements:The Company provides severance benefits pursuant to the Severance Plan and change in control agreements to certain executives, including the NEOs, to retain talent during transitions due to a Change in Control or other covered event and to provide a competitive pay package. The Compensation Committee designed the change in control agreement to provide a competitively structured program, and yet be conservative overall in the amounts of potential award payouts. The Compensation Committee’sCommittee's decisions regarding other compensation elements are affected by the potential payouts under these arrangements, as the Committee considers how the terms of these arrangements and the other pay components interrelate. These agreements are described in further detail in the “Other"Other Potential Post-Employment Payments”Payments" section of this Proxy Statement.
Retiree Health and Medical Plan:The Company provides NEOs with the same retiree medical and life insurance benefits as are provided in general to all salariednon-bargaining unit employees who joined A&B Predecessor prior to January 1, 2008. These benefits aid in retaining long-term service employees and provide for health care costs in retirement. The Company limits itsCompany's contribution towards the monthly medical premium is based on the employee’semployee's age and years of service.service and is capped at $136 per month. The benefits from this planthese plans are reflected in the “Other"Other Potential Post-Employment Payments”Payments" section of this Proxy Statement.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE30 | | |
| EXECUTIVE COMPENSATION |
The Role of Compensation Survey Data
The Company uses published compensation survey data as a reference, but does not benchmark against specific companies within such surveys. The Company operates in a number of different industries and there are no companies that are considered directly comparable in business mix, size and geographic relevance. Accordingly, the Company does not use data that are specific to any individual segment of the Company’sCompany's business but instead, based on the recommendation of WTW, uses data from fivethree national and highly recognized published surveys representing a broad group of general industry and real estate companies similar in size to the Company to assess the Company’sCompany's pay practices. WTW uses data subsets in each survey that represent companies of similar size with revenues between $250 million and $1 billion. The survey sources provide only one of the tools that the Committee uses to assess appropriate pay levels. Internal equity, Company performance, business unit performance, compensation philosophy, performance consistency, historical pay movement, pay mix, pay risk, economic environment and individual performance are also reviewed.
The surveys used by WTW in its assessment of total direct compensation and CEO pay ratio as compared to other NEOs include:
The Role of the Compensation Consultant
After conducting a search, the Compensation Committee selected and has since directly retained WTW, an independent executive compensation consulting firm, to assist the Committee in:
ALEXANDER & BALDWIN, INC.
|
The executive compensation consultant reports directly to the Committee and takes instructions from the Committee. The Committee approves all WTW engagements, including the nature, scope and fees of assignments.
In selecting WTW, the Compensation Committee considered, among other factors, the following:
WTW takes the following safeguards to ensure that its services and advice are objective:
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE31 |
EXECUTIVE COMPENSATION |
The Compensation Committee has reviewed WTW’sWTW's work, policies and procedures and determined that no conflicts of interest exist. In accordance with the New York Stock Exchange (“NYSE”("NYSE") requirements, the Compensation Committee annually assesses the independence of its compensation consultant, outside legal counsel, and other advisers who will provide services with respect to executive compensation matters. In assessing independence, the Compensation Committee considers the following factors, among others:
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
The Role of Management
Management assists the Compensation Committee in its role of determining executive compensation in a number of ways, including:
Tax and Accounting Considerations
In evaluating the Company’sCompany's executive compensation structure, the Compensation Committee considers tax and accounting treatment, balancing the effects on the individual and the Company. Until the adoption of the Tax Cuts and Jobs Act (the “Tax Act”"Tax Act") on December 22, 2017, Section 162(m) of the Internal Revenue Code limited the tax deductibility of certain executive compensation in excess of $1,000,000 for any fiscal year, except for certain “performance-based"performance-based compensation.”" With the passage of the Tax Act, only qualifying performance-based compensation paid pursuant to a written binding contract in effect on November 2, 2017 (and not modified in any material respect on or after November 2, 2017) as set forth under the Tax Act will be eligible for this deduction exception. The Tax Act also expanded the executive officers covered by Section 162(m) to include the chief financial officer position as well as any person who ever was a covered executive for any prior taxable year, beginning after December 31, 2016. As a result of these changes, starting in 2018, most compensation in excess of $1,000,000 payable to any person who was a named executive officer of the Company since fiscal year 2016 will not be deductible, regardless of whether the compensation is performance-based.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE32 | | |
| EXECUTIVE COMPENSATION |
The Compensation Committee believes that the potential deductibility of the compensation payable under those programs should be only one of a number of relevant factors taken into consideration, and not the sole or primary factor, in establishing the cash and equity compensation programs for the executive officers. The Compensation Committee believes that cash and equity incentive compensation must be maintained at the requisite level to attract and retain the executive officers essential to the Company’sCompany's financial success, even if all or part of that compensation may not be deductible by reason of the Section 162(m) limitation. The Compensation Committee will continue to maintain flexibility and the ability to pay competitive compensation by not requiring all compensation to be deductible.
Stock Ownership Guidelines
To enhance shareholder alignment and ensure commitment to value-enhancing, longer-term decision-making, the Company has established stock ownership guidelines. Executives are required to own a value of stock equal to the salary multiple below within a five year-period from commencement of employment or within a five-year period after a change in salary based on promotion:
Position | Salary Multiple | |||||||
CEO | 5X | |||||||
Other NEOs | 3X | |||||||
| |
| ||||||
|
| |
All NEOs, other than the Interim CFO, have met or are on track to meet the ownership guidelines.
Equity Granting Policy
Equity awards are expected to be granted for current employees at the January Compensation Committee meeting each year. Equity grants for new hires or promoted employees are approved at regularly scheduled Compensation Committee meetings. The timing of these grants is made without regard to anticipated earnings or other major announcements by the Company.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Policy Regarding Speculative Transactions and Hedging
The Company has adopted a formal policy prohibiting directors, officers and employees from (i) entering into speculative transactions, such as trading in options, warrants, puts and calls or similar instruments, involving A&B stock, or (ii) hedging or monetization transactions, such aszero-cost collars and forward sale contracts, involving A&B stock.
Policy Regarding Recoupment of Certain Compensation
The Company has adopted a formal “clawback”"clawback" policy for senior management, including all NEOs. Pursuant to the policy, the Company will seek to recoup certain incentive compensation, including cash and equity bonuses based upon the achievement of financial performance metrics, from executives in the event that the Company is required to restate its financial statements due to a material noncompliance with any financial reporting requirement.
The Compensation Committee has reviewed and discussed the CD&A section of this Proxy Statement with management and, based on these discussions and review, it has recommended to the Board of Directors that the CD&A disclosure be included in this Proxy Statement.
The foregoing report is submitted by Mr. King (Chairman)Ms. Saito (Chair), Mr. Lewis Ms. Saito and Ms. Wall.
Compensation Committee Interlocks and Insider Participation
During 2017,2018, the members of the Compensation Committee were Mr. King Chairman,(through April 24. 2018), Mr. Lewis, Ms. Saito and Ms. Wall. As set forth above under the subsection “Certain"Certain Relationships and Transactions,”" Ms. Wall is an executive officer in a corporation that is a tenant in several properties owned by A&B subsidiaries with leases established at market rates. Because of this related person transaction, Ms. Wall did not participate in any equity compensation decisions.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE33 |
EXECUTIVE COMPENSATION |
Summary Compensation Table.The following table summarizes the compensation paid by A&B to its NEOs in 2018, 2017 2016 and 2015.2016.
20172018 Summary Compensation Table
Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($) (1) (d) | Stock Awards ($) (2) (e) | Option Awards ($) (f) | Non-Equity Incentive Plan ($) (3) (g) | Change in Pension Value and Deferred Compensation Earnings ($) (4) (h) | All Other ($) (5) (i) | Total ($) (j) | |||||||||||||||||||||||||||
Christopher J. Benjamin President and Chief Executive Officer |
| 2017
|
|
| 642,000
|
|
| 312,000
|
|
| 1,351,879
|
|
| N/A
|
|
| 382,327
|
|
| 229,870
|
|
| 8,100
|
|
| 2,926,176
|
| |||||||||
|
2016
|
|
|
613,500
|
|
|
363,075
|
|
|
886,684
|
|
|
N/A
|
|
|
159,600
|
|
|
194,648
|
|
|
7,950
|
|
|
2,225,457
|
| ||||||||||
|
2015
|
|
|
462,438
|
|
|
74,067
|
|
|
460,422
|
|
|
N/A
|
|
|
146,115
|
|
| 0
| (6)
|
|
7,950
|
|
|
1,150,992
|
| ||||||||||
James E. Mead Executive Vice President and Chief Financial Officer | 2017 | 238,782 | 150,000 | 681,706 | N/A | — | — | 23,811 | (7) | 1,094,299 | ||||||||||||||||||||||||||
Nelson N. S. Chun Executive Vice President and Chief Legal Officer |
| 2017
|
|
| 339,489
|
|
| 82,075
|
|
| 289,608
|
|
| N/A
|
|
| 100,575
|
|
| 38,926
|
|
| 8,100
|
|
| 858,773
|
| |||||||||
|
2016
|
|
|
329,601
|
|
|
97,531
|
|
|
270,904
|
|
|
N/A
|
|
|
42,873
|
|
|
31,051
|
|
|
7,950
|
|
|
779,910
|
| ||||||||||
|
2015
|
|
|
320,001
|
|
|
42,713
|
|
|
255,817
|
|
|
N/A
|
|
|
84,257
|
|
|
0
|
(8)
|
|
7,950
|
|
|
710,738
|
| ||||||||||
Meredith J. Ching Executive Vice President, External Affairs |
| 2017
|
|
| 264,088
|
|
| 69,209
|
|
| 289,608
|
|
| N/A
|
|
| 84,809
|
|
| 222,678
|
|
| 7,923
|
|
| 938,315
|
| |||||||||
|
2016
|
|
|
253,229
|
|
|
82,242
|
|
|
270,904
|
|
|
N/A
|
|
|
36,152
|
|
|
176,230
|
|
|
7,597
|
|
|
826,354
|
| ||||||||||
|
2015
|
|
|
254,156
|
|
|
36,017
|
|
|
255,817
|
|
|
N/A
|
|
|
71,049
|
|
|
0
|
(9)
|
|
7,625
|
|
| 624,664
|
| ||||||||||
Lance K. Parker Executive Vice President and Chief Real Estate Officer |
| 2017
|
|
| 340,863
|
|
| 61,543
|
|
| 318,612
|
|
| N/A
|
|
| 201,109
|
|
| 65,842
|
|
| 8,100
|
|
| 996,069
|
| |||||||||
|
2016 |
|
|
306,750 |
|
|
69,525 |
|
|
196,994 |
|
|
N/A |
|
|
78,980 |
|
|
32,575 |
|
|
7,950 |
|
|
692,774 |
| ||||||||||
Paul K. Ito Former Senior Vice President, CFO and Treasurer
|
| 2017
|
|
| 379,859
|
|
| —
|
|
| 386,201
|
|
| N/A
|
|
| —
|
|
| 50,306
|
|
| 678,100
| (10)
|
| 1,494,466
|
| |||||||||
|
2016
|
|
|
368,795
|
|
|
130,955
|
|
|
394,049
|
|
|
N/A
|
|
|
57,565
|
|
|
55,892
|
|
|
7,813
|
|
|
1,015,069
|
| ||||||||||
|
2015
|
|
|
358,054
|
|
|
57,350
|
|
|
409,291
|
|
|
N/A
|
|
|
113,132
|
|
|
0
|
(11)
|
|
7,161
|
|
|
944,988
|
| ||||||||||
|
ALEXANDER&B to the NEO's account under the A&B Individual Deferred Compensation and Profit Sharing Plan and Alexander & BALDWIN, INC. Baldwin, Inc. Excess Benefits Plan.
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE34 | | |
| EXECUTIVE COMPENSATION |
CEO to Median Employee Pay Ratio Information
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K.
In determining the summary compensation table amount of pay for our CEO and the median employee, management employed the same methodology used for NEOs as set forth in the 2018 Summary Compensation Table. The Company's contribution to employee health plans was also included. As illustrated below, using the Total Pay amounts, A&B's 2018 CEO to median employee pay ratio is 45:1.
CEO to Median Pay Ratio
| Summary Compensation Table Amount | + | Company Contribution to Health Plans | = | Total Pay | | ||||||||||||
CEO | | | $ | 3,479,433 | | | | | | $ | 16,479 | | | | | $ | 3,495,912 | |
Median Employee | | | $ | 68,843 | | | | | $ | 8,510 | | | | $ | 77,353 | |
As allowed under applicable rules, allow companieswe used the same median employee that was identified in the 2018 proxy statement using the following steps:
For 2017, our last completed fiscal year:
Based on this information, for 2017 the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee was 43 to 1.
To identify the median employee and the annual total compensation of our median employee and our CEO, we took the following steps:
The pay ratio is a reasonable estimate calculated based on rules and guidance provided by the SEC. The SEC rules allow for varying methodologies for companies to identify their median employee; and other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Consequently, the pay ratios reported by other companies are unlikely to be relevant or meaningful for purposes of comparison to our pay ratio as reported here.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE35 |
EXECUTIVE COMPENSATION |
Grants of Plan-Based Awards.The following table contains information concerning thenon-equity and equity grants under A&B’s&B's incentive plans during 20172018 to the NEOs.
20172018 Grants of Plan-Based Awards
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Stock (#)(3) (i) | All Other of (j) | Exercise or Base ($/Sh) (k) | Grant Date Fair Option ($)(5) (l) | |||||||||||||||||||||||||||||||||||||||||||
Name (a) | Grant Date (b) | Threshold (c) | Target (d) | Maximum (e) | Threshold (f) | Target (g) | Maximum (h) | |||||||||||||||||||||||||||||||||||||||||
Christopher J. Benjamin
|
|
1/23/17
|
|
|
204,750
|
|
|
409,500
|
|
|
819,000
|
|
|
8,551
|
|
|
24,432
|
|
|
36,648
|
|
|
24,432
|
|
|
N/A
|
|
|
N/A
|
|
|
1,351,879
|
| |||||||||||||||
James E. Mead
|
|
7/10/17
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
5,422
|
|
|
15,492
|
|
|
23,238
|
|
|
15,492
|
|
|
N/A
|
|
|
N/A
|
|
|
681,755
|
| |||||||||||||||
Nelson N. S. Chun
|
|
1/23/17
|
|
|
53,862
|
|
|
107,723
|
|
|
215,446
|
|
|
1,832
|
|
|
5,233
|
|
|
7,850
|
|
|
5,233
|
|
|
N/A
|
|
|
N/A
|
|
|
289,608
|
| |||||||||||||||
Meredith J. Ching
|
|
1/23/17
|
|
|
45,419
|
|
|
90,837
|
|
|
181,674
|
|
|
1,832
|
|
|
5,233
|
|
|
7,850
|
|
|
5,233
|
|
|
N/A
|
|
|
N/A
|
|
|
289,608
|
| |||||||||||||||
Lance K. Parker
|
|
1/23/17
|
|
|
76,385
|
|
|
152,770
|
|
|
305,540
|
|
|
2,015
|
|
|
5,758
|
|
|
8,637
|
|
|
5,758
|
|
|
N/A
|
|
|
N/A
|
|
|
318,612
|
| |||||||||||||||
Paul K. Ito
|
|
1/23/17
|
|
|
72,320
|
|
|
144,640
|
|
|
289,280
|
|
|
2,443
|
|
|
6,979
|
|
|
10,469
|
|
|
6,979
|
|
|
N/A
|
|
|
N/A
|
|
|
386,201
|
|
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | All Other Stock Awards: Number of Shares of Stock | | All Other Option Awards: Number of Securities Underlying | | Exercise or Base Price of Option | | Grant Date Fair Value of Stock and Option | |||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name (a) | | Grant Date (b) | | Threshold ($) (c) | | Target ($) (d) | | Maximum ($) (e) | | Threshold (#) (f) | | Target (#) (g) | | Maximum (#) (h) | | or Units (#)(3) (i) | | Options (#)(4) (j) | | Awards ($/Sh) (k) | | Awards ($)(5) (l) | ||||||||||||||
| Christopher J. Benjamin | | 1/29/18 | | 241,368 | | 482,735 | | 965,470 | | 11,380 | | 32,514 | | 65,028 | | 32,514 | | N/A | | N/A | | 2,003,838 | ||||||||||||||
Diana M. Laing (6) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
| Meredith J. Ching | | 1/29/18 | | 53,501 | | 107,002 | | 214,004 | | 1,738 | | 4,967 | | 9,934 | | 4,967 | | N/A | | N/A | | 306,116 | ||||||||||||||
Nelson N. S. Chun | 1/29/18 | 63,447 | 126,894 | 253,788 | 1,738 | 4,967 | 9,934 | 4,967 | N/A | N/A | 306,116 | ||||||||||||||||||||||||||
| Lance K. Parker | | 1/29/18 | | 108,150 | | 216,300 | | 432,600 | | 3,793 | | 10,838 | | 21,676 | | 10,838 | | N/A | | N/A | | 667,946 | ||||||||||||||
James E. Mead (7) | 1/29/18 | 62,187 | 124,373 | 248,745 | 5,058 | 14,450 | 28,900 | N/A | N/A | N/A | 890,554 | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The PIIP is based on financial, operating, and value creation goals, depending on the executive’sexecutive's job responsibilities and individual performance. Performance measures, weighting of goals and target opportunities are discussed in the CD&A section of this Proxy Statement. Information on equity grants is provided in the CD&A section of this Proxy Statement.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE36 | | |
| EXECUTIVE COMPENSATION |
Outstanding Equity Awards at FiscalYear-End.The following table contains information concerning the outstanding equity awards held by the NEOs.
20172018 Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | Stock Awards | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | | Option Exercise Price ($) (e) | | Option Expiration Date (f) | | Number of Shares or Units of Stock that Have Not Vested (#) (g) | | Market Value of Shares or Units of Stock that Have Not Vested ($)(4) (h) | | Equity In- centive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) (i) | | Equity In- centive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(4) (j) | ||||||||||
Christopher J. Benjamin | | 74,184 | | — | | — | | 10.66 | | 1/26/2020 | | 56,608 | (1) | | 1,040,455 | | 80,362 | (5) | | 1,477,054 | ||||||||
52,690 | — | — | 13.11 | 1/25/2021 | ||||||||||||||||||||||||
| 50,677 | | — | | — | | 14.92 | | 1/24/2022 | | | | | | | | | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diana M. Laing | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Meredith J. Ching | | 29,929 | | — | | — | | 10.66 | | 1/26/2020 | | 10,841 | (2) | | 199,258 | | 17,354 | (6) | | 318,967 | ||||||||
23,466 | — | — | 13.11 | 1/25/2021 | ||||||||||||||||||||||||
| 17,539 | | — | | — | | 14.92 | | 1/24/2022 | | | | | | | | | |||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nelson N.S. Chun | 14,252 | — | — | 10.66 | 1/26/2020 | 10,841 | (2) | 199,258 | 17,354 | (6) | 318,967 | |||||||||||||||||
| 31,291 | | — | | — | | 13.11 | | 1/25/2021 | | | | | | | | | |||||||||||
23,389 | — | — | 14.92 | 1/24/2022 | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lance K. Parker | | 1,740 | | — | | — | | 13.11 | | 1/25/2021 | | 16,412 | (3) | | 301,653 | | 21,798 | (7) | | 400,647 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
James E. Mead | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of (#) Exercisable (b) (11) | Number of (#) Unexercisable (c) | Equity (#) (d) | Option ($) (e) (11) | Option (f) | Number Have Not Vested (#) (g) (12) | Market (h) | EquityIn- (#) (i) (12) | Equity In- (j) | |||||||||||||||||||||||||||||||||||
Christopher J. Benjamin
|
|
12,768
|
|
|
—
|
|
|
—
|
|
|
7.53
|
|
|
1/27/2019
|
|
|
42,992
|
(1)
|
|
1,192,598
|
|
|
18,294
|
(6)
|
|
507,476
|
| |||||||||||||||||
|
74,184
|
|
|
—
|
|
|
—
|
|
|
10.66
|
|
|
1/26/2020
|
| ||||||||||||||||||||||||||||||
|
52,690
|
|
|
—
|
|
|
—
|
|
|
13.11
|
|
|
1/25/2021
|
| ||||||||||||||||||||||||||||||
|
50,677
|
|
|
—
|
|
|
—
|
|
|
14.92
|
|
|
1/24/2022
|
| ||||||||||||||||||||||||||||||
James E. Mead
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,492
|
(2)
|
|
429,748
|
|
|
5,422
|
(7)
|
|
150,406
|
| |||||||||||||||||
Nelson N. S. Chun
|
|
14,252
|
|
|
—
|
|
|
—
|
|
|
10.66
|
|
|
1/26/2020
|
|
|
11,640
|
(3)
|
|
322,894
|
|
|
5,193
|
(8)
|
|
144,054
|
| |||||||||||||||||
|
31,291
|
|
|
—
|
|
|
—
|
|
|
13.11
|
|
|
1/25/2021
|
| ||||||||||||||||||||||||||||||
|
23,389
|
|
|
—
|
|
|
—
|
|
|
14.92
|
|
|
1/24/2022
|
| ||||||||||||||||||||||||||||||
Meredith J. Ching
|
|
24,723
|
|
|
—
|
|
|
—
|
|
|
7.53
|
|
|
1/27/2019
|
|
|
11,640
|
(3)
|
|
322,894
|
|
|
5,193
|
(8)
|
|
144,054
|
| |||||||||||||||||
|
29,929
|
|
|
—
|
|
|
—
|
|
|
10.66
|
|
|
1/26/2020
|
| ||||||||||||||||||||||||||||||
|
23,466
|
|
|
—
|
|
|
—
|
|
|
13.11
|
|
|
1/25/2021
|
| ||||||||||||||||||||||||||||||
|
17,539
|
|
|
—
|
|
|
—
|
|
|
14.92
|
|
|
1/24/2022
|
| ||||||||||||||||||||||||||||||
Lance K. Parker
|
|
1,740
|
|
|
—
|
|
|
—
|
|
|
13.11
|
|
|
1/25/2021
|
|
|
9,751
|
(4)
|
|
270,493
|
|
|
4,110
|
(9)
|
|
114,011
|
| |||||||||||||||||
Paul K. Ito
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,537
|
(5)
|
|
458,736
|
|
|
7,460
|
(10)
|
|
206,940
|
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE37 |
EXECUTIVE COMPENSATION |
Option Exercises and Stock Vested.The following table contains information concerning option exercises and the vesting of stock awards for the NEOs during 2017.2018.
Option Exercises and Stock Vested for 20172018
Name (a)
|
OPTION AWARDS
|
STOCK AWARDS
| ||||||||||||||||||||||||||||
Number of Shares (#) (b)
|
Value Realized (c)
|
Number of Shares (#) (d) (4)
|
Value Realized ($) (e)
| |||||||||||||||||||||||||||
Christopher J. Benjamin
|
|
28,933
|
(1)
|
|
616,924
|
|
|
11,131
|
|
|
498,032
|
| ||||||||||||||||||
James E. Mead
|
| —
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||||||||||
Nelson N. S. Chun
|
| 31,788
| (2)
|
|
440,608
|
|
|
4,946
|
|
|
221,115
|
| ||||||||||||||||||
Meredith J. Ching
|
| 13,021
| (3)
|
|
283,467
|
|
|
4,946
|
|
|
221,115
|
| ||||||||||||||||||
Lance K. Parker
|
| —
|
|
|
—
|
|
|
2,198
|
|
|
98,377
|
| ||||||||||||||||||
Paul K. Ito
|
| 104,768
| (3)
|
|
1,693,141
|
|
|
7,690
|
|
|
343,747
|
|
| | OPTION AWARDS | STOCK AWARDS | | |||||||||||||||||
| | | | | | | | | | ||||||||||||
Name | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting (#) (d)(4) | Value Realized on Vesting ($) (e) | | ||||||||||||||||
Christopher J. Benjamin | | | 12,768 | | | | 137,767 | | | | 21,379 | | | | 607,751 | | | ||||
Diana M. Laing | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | ||||
Meredith J. Ching | | | 24,723 | | | | 329,558 | | | | 7,144 | | | | 201,814 | | | ||||
Nelson N. S. Chun | | | — | | | | — | | | | 7,144 | | | | 201,814 | | | ||||
Lance K. Parker | | | — | | | | — | | | | 4,618 | | | | 131,488 | | | ||||
James E. Mead | | | N/A | | | | N/A | | | | 5,164 | | | | 129,771 | | | ||||
| | | | | | | | | |
The value realized in column (e) was calculated based on the market value of A&B common stock on the vesting date. No amounts realized upon exercise of options or vesting of stock have been deferred.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
Pension Benefits.The following table contains information concerning pension benefits for the NEOs at the end of 2017.2018.
Name (a)
| Plan Name (b)
| Number of (#) (c)
|
Present ($) (d)
| Payments (e)
| ||||||||||
Christopher J. Benjamin
|
A&B Retirement Plan for Salaried Employees
|
|
16.4
|
|
|
556,428
|
|
|
—
|
| ||||
A&B Excess Benefits Plan |
|
16.4
|
|
|
1,275,883
|
|
|
—
|
| |||||
James E. Mead
|
A&B Retirement Plan for Salaried Employees
|
|
0 |
|
|
—
|
|
|
—
|
| ||||
A&B Excess Benefits Plan |
|
0
|
|
|
—
|
|
|
—
|
| |||||
Nelson N. S. Chun
|
A&B Retirement Plan for Salaried Employees |
|
14.2
|
|
|
535,792
|
|
|
—
|
| ||||
A&B Excess Benefits Plan
|
| 14.2
|
|
| 616,276
|
|
| —
|
| |||||
Meredith J. Ching
|
A&B Retirement Plan for Salaried Employees
|
|
35.6
|
|
|
1,792,155
|
|
|
—
|
| ||||
A&B Excess Benefits Plan
|
|
35.6
|
|
|
612,922
|
|
|
— |
| |||||
Lance K. Parker
|
A&B Retirement Plan for Salaried Employees |
|
13.3 |
|
|
243,917 |
|
|
— |
| ||||
A&B Excess Benefits Plan
|
| 13.3
|
|
| 29,550
|
|
| —
|
| |||||
Paul K. Ito
|
A&B Retirement Plan for Salaried Employees |
|
12.8 |
|
|
285,375 |
|
|
— |
| ||||
A&B Excess Benefits Plan
|
| 12.8
|
|
| 163,606
|
|
| —
|
|
Name | Plan Name (b) | Number of Years Credited Service(1) (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) | | |||||||||||||
Christopher J. Benjamin | | A&B Retirement Plan for Salaried Employees | | | 17.4 | | | | 533,419 | | | | — | | | |||
| A&B Excess Benefits Plan | | | 17.4 | | | | 1,298,637 | | | | — | | | ||||
| | | | | | | | | | |||||||||
Diana M. Laing | | A&B Retirement Plan for Salaried Employees | | | 0 | | | | — | | | | — | | | |||
| A&B Excess Benefits Plan | | | 0 | | | | — | | | | — | | | ||||
| | | | | | | | | | |||||||||
Meredith J. Ching | | A&B Retirement Plan for Salaried Employees | | | 36.6 | | | | 1,690,577 | | | | — | | | |||
| A&B Excess Benefits Plan | | | 36.6 | | | | 597,227 | | | | — | | | ||||
| | | | | | | | | | |||||||||
Nelson N. S. Chun | | A&B Retirement Plan for Salaried Employees | | | 15.2 | | | | 510,467 | | | | — | | | |||
| A&B Excess Benefits Plan | | | 15.2 | | | | 592,124 | | | | — | | | ||||
| | | | | | | | | | |||||||||
Lance K. Parker | | A&B Retirement Plan for Salaried Employees | | | 14.3 | | | | 231,324 | | | | — | | | |||
| A&B Excess Benefits Plan | | | 14.3 | | | | 47,751 | | | | — | | | ||||
| | | | | | | | | | |||||||||
James E. Mead | | A&B Retirement Plan for Salaried Employees | | | 0 | | | | — | | | | — | | | |||
| A&B Excess Benefits Plan | | | 0 | | | | — | | | | — | | | ||||
| | | | | | | | | |
Actuarial assumptions used to determine the present values of the pension benefits include: Discount rates for qualified andnon-qualified retirement plans of 3.70%4.36% and 3.20%3.78%, respectively. Age 62 with 5 years of service (or current age, if greater) is the
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE38 | | |
| EXECUTIVE COMPENSATION |
assumed retirement age. Qualified plan benefits (traditional defined benefit and cash balance) are assumed to be paid on a life annuity basis (however, cash balance portion could be paid in a lump sum). The cash balance accounts are projected to the assumed retirement age using 2.26%3.01% interest per year (the rate in effect for 2018)2019) with no future pay credits. The projected qualified plan cash balance accounts were converted to life annuities at the assumed retirement age using the annuity conversion interest assumptions and mortality used in our financial disclosures, i.e., 1.96%3.21% (for the first 5 years), 3.58%4.26% (next 15 years) and 4.35%4.55% (years in excess of 20) applied on a rolling basis, and the Applicable Mortality Table, as defined for lump sum calculations under Section 417(e) of the Internal Revenue Code.
The Excess Benefits Plan benefits are paid as a lump sum equal to the present value of the traditional defined benefit assumed to be paid on a life annuity basis plus the cash balance account. The present value was determined based on interest rates (with 39% marginal tax rate adjustment) and mortality used in our financial disclosures, i.e., 1.20%1.96% (for the first 5 years), 2.18%2.6% (next 15 years) and 2.65%2.78% (years in excess of 20) applied on a rolling basis, and the Applicable Mortality Table, as defined for lump sum calculations under Section 417(e) of the Internal Revenue Code. The cash balance accounts are projected to the assumed retirement age using 2.26%3.01% interest per year (the rate in effect for 2018)2019) with no future pay credits.
A&B Retirement Plan for Salaried Employees:
The A&B Retirement Plan for Salaried Employees (the “Qualified"Qualified Retirement Plan”Plan") provides pension benefits to the Company’sCompany's salaried employees who are not subject to collective bargaining agreements. In 2007, A&B Predecessor closed participation in its traditional defined pension plan and established a cash balance plan for newnon-bargaining unit employees hired after January 1, 2008. A&B Predecessor subsequently froze the traditional plan on January 1, 2012, transitioning all employees to the cash balance plan and lowering the vesting period from five years to three years.
The traditional defined benefit formula was based on participants’participants' service and average monthly compensation in the five highest consecutive years of their final 10 years of serviceservice. For participants in the plan who remained employed after its freezing, this measurement period goes only through December 31, 2011. Compensation included base salary, overtime pay andone-year bonuses. The amounts were expressed as a single life annuity payable at the normal retirement age of 65. An employee
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
became vested after five years of service with A&B Predecessor or the Company. An employee may take early retirement at age 55 or older, if the employee has already completed at least five years of service with A&B Predecessor or the Company. If an employee retires early, the same formula for normal retirement is used, although the benefit will be reduced for commencement before age 62 because the employee will receive payment early and over a longer period of time.
Effective January 1, 2012, aThe replacement cash balance formula provides a retirement account equal to 5 percent of an employee’semployee's eligible cash compensation, for each year worked, while covered by the cash balance formula, plus interest. The vesting period was reduced from five years to three years for an employee with a cash balance account. At retirement or other separation from service, the employee may elect to receive the vested cash balance portion of the Qualified Retirement Plan benefits as a lump sum or an actuarially equivalent annuity.
A&B Excess Benefits Plan:The A&B Excess Benefits Plan is discussed in the CD&A section of this Proxy Statement. Under the pension portion of the Excess Benefits Plan associated with the Qualified Retirement Plan, benefits under the traditional defined benefit formula are payable after the executive’sexecutive's separation from service in a lump sum that is actuarially equivalent to the annuity form of payment, and the cash balance account is paid as a lump sum. Under the profit sharing portion of the Excess Benefits Plan associated with the A&B Profit Sharing Retirement Plan, amounts are credited to executives’executives' accounts, to be payable after the executive’sexecutive's separation from service. All NEOs are eligible to participate in the Excess Benefits Plan.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE39 |
EXECUTIVE COMPENSATION |
Non-Qualified Deferred Compensation.The following table contains information concerningnon-qualified deferred compensation for the NEOs.
2018 Non-Qualified Deferred Compensation
Name | Executive Contributions in Last FY ($) (b) | Registrant Contributions in Last FY ($)(1) (c) | Aggregate Earnings in Last FY ($)(2) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | | ||||||||||||||||||||
Christopher J. Benjamin | | | — | | | | — | | | | 978 | | | | — | | | | 25,433 | | | |||||
Diana M. Laing | | | — | | | | — | | | | — | | | | — | | | | — | | | |||||
Meredith J. Ching | | | — | | | | — | | | | — | | | | — | | | | — | | | |||||
Nelson N. S. Chun | | | — | | | | — | | | | 418 | | | | — | | | | 10,878 | | | |||||
Lance K. Parker | | | — | | | | — | | | | — | | | | — | | | | — | | | |||||
James E. Mead | | | — | | | | — | | | | — | | | | — | | | | — | | | |||||
| | | | | | | | | | | |
2017Non-Qualified Deferred Compensation
Name (a)
|
Executive ($) (b)
|
Registrant ($)(1) (c)
|
Aggregate ($)(2) (d)
|
Aggregate (e)
|
Aggregate ($) (f)
| ||||||||||||||||||||
Christopher J. Benjamin
|
|
—
|
|
|
—
|
|
|
712
|
|
|
—
|
|
|
24,455
|
| ||||||||||
James E. Mead
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||
Nelson N. S. Chun
|
|
—
|
|
|
—
|
|
|
305
|
|
|
—
|
|
|
10,460
|
| ||||||||||
Meredith J. Ching
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||
Lance K. Parker
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| ||||||||||
Paul K. Ito
|
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
5,076
|
|
Other Potential Post-Employment Payments.
Change in Control Agreements:A&B has entered into Change in Control Agreements with each of the NEOs other than Ms. Laing, which are intended to encourage their continued employment with A&B by providing them with greater security in the event of termination of their employment following a change in control of A&B. The Company has adopted a participation policy that extends these agreements to those senior level executives whose employment would be most likely at risk upon a change in control. Each Change in Control Agreement has an initialone-year term and is automatically extended at the end of each term for a successiveone-year period, unless terminated by A&B. The Change in Control Agreements provide for certain severance benefits if the executive’sexecutive's employment is terminated by A&B without “cause”"cause" or by the executive for “good"good reason,”" in each case as defined in the agreement, following a “Change"Change in Control Event”Event" of A&B, as defined by Internal Revenue Code Section 409A, as follows: Upon a termination of employment under the above circumstances, the executive will be entitled to receive (i) alump-sum severance payment equal to two times the sum of the executive’sexecutive's base salary and target bonus, (ii) pro rata payment at target with respect to outstanding contingent awards for uncompleted performance periods, (iii) a lump sum payment of amounts due the executive under deferred compensation plans, and (iv) an amount equal to the positive spread between the
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
exercise price of outstanding options held by the executive and the fair market value of the underlying shares at the time of termination. In addition, A&B will maintain all (or provide similar) health and welfare benefit plans for the executive’sexecutive's continued benefit for a period of two years after termination. A&B will also reimburse executives for individual outplacement counseling services up to $10,000. These are “double trigger”"double trigger" agreements under which no payments are made and long-term incentives do not accelerate unless both a change in control and a qualifying termination of employment occurs.
In the event that any amount payable to the executive is deemed under the Internal Revenue Code to be made in connection with a change in control of the Company, and such payments would result in the excise tax imposed on “excess"excess parachute payments”payments" under the Internal Revenue Code, the Change in Control Agreements provide that the executive’sexecutive's payments will be reduced to an amount that would not result in the imposition of the excise tax, to the extent that such reduction would result in a greaterafter-tax benefit to the executive. No taxgross-up payments are provided by the Change in Control Agreements.
If there is a potential change in control of the Company, the executive agrees to remain in the employ of the Company until the earliest of (1) a date six months after the occurrence of the potential change in control, (2) the termination of the executive’sexecutive's employment by reason of disability or retirement, or (3) the occurrence of a change in control of the Company.
Executive Severance Plan:The Company also maintains the Executive Severance Plan (“("Severance Plan”Plan") that covers the NEOs. The Severance Plan continues from year to year, subject to a periodic review by the Board of Directors. The Severance Plan provides certain severance benefits if a designated executive is involuntarily terminated without “cause,”"cause," as defined in the
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE40 | | |
| EXECUTIVE COMPENSATION |
Severance Plan, or laid off from employment as part of a job elimination/restructuring or reduction in force. Upon such termination of employment, the executive will be entitled to receive an amount equal to six months’months' base salary, payable in equal installments over a period of one year, and continued payment by the Company of life and disability insurance premiums and COBRA premiums for continued group health plan coverage. If the executive executes a release agreement acceptable to the Company, the executive will be entitled to receive additional benefits, including an additional six months of base salary and designated benefits, reimbursement for outplacement counseling services and a prorated share of incentive plan awards at target levels under the PIIP that would have been payable to the executive had he or she remained employed until the end of the applicable performance period.
Voluntary Resignation:If the executive voluntarily resigns from the Company, no amounts are payable under the Severance Plan or the PIIP. The executive may be entitled to receive retirement and retiree health and welfare benefits to the extent those benefits have been earned or vested under the provisions of the plans. The executive may have up to three to six months after termination to exercise vested stock options at the time of termination. In addition, the executive would be entitled to any amounts voluntarily deferred (and the earnings accrued) under the A&B Profit Sharing Retirement Plan.
Other benefits, as described in the CD&A section of this Proxy Statement, may include accrued, vested benefits under the Qualified Retirement Plan and the Excess Benefits Plan.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
The following tables show the potential value to each executive other than Mr. Mead and Ms. Laing under various termination-related scenarios, assuming that the termination of employment or other circumstances resulting in payment occurred on December 31, 2017.2018. Ms. Laing is not eligible for the Severance Plan or retirement benefits, was not granted any cash or equity incentive awards and does not have a change in control agreement. In connection with his transition from his position as Executive Vice President and Chief Financial Officer as of November 15, 2018 (the "Resignation Date"), Mr. Mead received a payment of $360,500 (subject to applicable withholding), equivalent to his target bonus under the PIIP based on his continued employment through the Resignation Date. This amount is shown in the Summary Compensation Table of this Proxy Statement.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE41 |
EXECUTIVE COMPENSATION |
Executive Termination Scenarios
Christopher J. Benjamin | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components | Change in Control w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance | | | $ | 2,814,000 | | | | $ | 670,000 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Retirement Benefits(4) | | | $ | 60,286 | | | | $ | 14,577 | | | | $ | 14,577 | | | | $ | 14,577 | | | $ | 14,577 | | | — | | | | $ | 14,577 | | | |
| | $ | 2,174 | (5) | | | $ | 2,174 | (5) | | | $ | 2,174 | (5) | | | $ | 2,174 | (5) | | ($ | 106,291 | )(5)(6) | | — | | | | $ | 2,174 | (5) | | ||
Health & Welfare Benefits | | | $ | 44,208 | | | | $ | 18,698 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Outplacement Counseling | | | $ | 10,000 | | | | $ | 10,000 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Long-Term Incentives(7) | | | $ | 2,087,123 | | | | — | | | | — | | | | — | | | $ | 1,539,031 | | | $ | 1,539,031 | | | | $ | 1,539,031 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) | | | $ | 5,015,617 | | | | $ | 713,275 | | | | $ | 14,577 | | | | $ | 14,577 | | | $ | 1,553,608 | | | $ | 1,539,031 | | | | $ | 1,553,608 | | |
Total (Annuity) | | | $ | 2,174 | | | | $ | 2,174 | | | | $ | 2,174 | | | | $ | 2,174 | | | ($ | 106,291 | )(6) | | — | | | | $ | 2,174 | | | |
| | | | | | | | | | | | | | | |
CHRISTOPHER J. BENJAMIN | ||||||||||||||||||||||||||||||||
Components | Change in w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||
Cash Severance | $ | 2,600,000 | $ | 650,000 | — | — | — | — | — | |||||||||||||||||||||||
Retirement Benefits(4) | $ | 74,489 | ($ | 262,848 | )(6) | ($ | 262,848 | )(6) | ($ | 262,848 | )(6) | ($ | 262,848 | )(6) | — | Not Yet Eligible | ||||||||||||||||
($ | 81,292 | )(5)(6) | ($ | 81,292 | )(5)(6) | ($ | 81,292 | )(5)(6) | ($ | 81,292 | )(5)(6) | ($ | 295,199 | )(5)(6) | — | Not Yet Eligible | ||||||||||||||||
Health & Welfare Benefits | $ | 52,422 | $ | 23,295 | — | — | — | — | — | |||||||||||||||||||||||
Outplacement Counseling | $ | 10,000 | $ | 10,000 | — | — | — | — | — | |||||||||||||||||||||||
Long-Term Incentives(7) | $ | 1,628,590 | — | — | — | $ | 1,187,248 | $ | 1,187,248 | Not Yet Eligible | ||||||||||||||||||||||
Total(Lump-sum) | $ | 4,365,502 | $ | 420,447 | ($ | 262,848 | )(6) | ($ | 262,848 | )(6) | $ | 924,400 | $ | 1,187,248 | — | |||||||||||||||||
Total (Annuity) | ($ | 81,292 | )(6) | ($ | 81,292 | )(6) | ($ | 81,292 | )(6) | ($ | 81,292 | )(6) | ($ | 295,199 | )(6) | — | Not Yet Eligible |
Meredith J. Ching(8) | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components | Change in Control w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance | | | $ | 920,768 | | | | $ | 297,022 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Retirement Benefits(4) | | | $ | 23,578 | | | | — | | | | — | | | | — | | | — | | | — | | | | — | | | ||||||
| | — | | | | — | | | | — | | | | — | | | ($ | 993,255 | )(5)(6) | | — | | | | — | | | |||||||
Health & Welfare Benefits | | | $ | 34,190 | | | | $ | 15,685 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Outplacement Counseling | | | $ | 10,000 | | | | $ | 10,000 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Long-Term Incentives(7) | | | $ | 386,734 | | | | — | | | | — | | | | — | | | $ | 293,810 | | | $ | 293,810 | | | | $ | 293,810 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) | | | $ | 1,375,270 | | | | $ | 322,707 | | | | $ | 0 | | | | $ | 0 | | | $ | 293,810 | | | $ | 293,810 | | | | $ | 293,810 | | |
Total (Annuity) | | | — | | | | — | | | | — | | | | — | | | ($ | 993,255 | )(6) | | — | | | | — | | | ||||||
| | | | | | | | | | | | | | | |
JAMES E. MEAD | ||||||||||||||||||||||||||||||||
Components | Change in w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||
Cash Severance | $ | 1,177,197 | $ | 500,000 | — | — | — | — | — | |||||||||||||||||||||||
Retirement Benefits(4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||||||||
Health & Welfare Benefits | $ | 38,454 | $ | 22,824 | — | — | — | — | — | |||||||||||||||||||||||
Outplacement Counseling | $ | 10,000 | $ | 10,000 | — | — | — | — | — | |||||||||||||||||||||||
Long-Term Incentives(7) | $ | 549,480 | — | — | — | $ | 365,402 | $ | 365,402 | — | ||||||||||||||||||||||
Total(Lump-sum) | $ | 1,775,132 | $ | 532,824 | $ | 0 | $ | 0 | $ | 365,402 | $ | 365,402 | — | |||||||||||||||||||
Total (Annuity) | — | — | — | — | — | — | — |
Nelson N. S. Chun(8) | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components | Change in Control w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance | | | $ | 1,091,938 | | | | $ | 352,238 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Retirement Benefits(4) | | | $ | 21,859 | | | | — | | | | — | | | | — | | | — | | | — | | | | — | | | ||||||
| | — | | | | — | | | | — | | | | — | | | ($ | 185,031 | )(5)(6) | | — | | | | — | | | |||||||
Health & Welfare Benefits | | | $ | 37,416 | | | | $ | 16,789 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Outplacement Counseling | | | $ | 10,000 | | | | $ | 10,000 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Long-Term Incentives(7) | | | $ | 386,734 | | | | — | | | | — | | | | — | | | $ | 293,810 | | | $ | 293,810 | | | | $ | 293,810 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) | | | $ | 1,547,946 | | | | $ | 379,027 | | | | $ | 0 | | | | $ | 0 | | | $ | 293,810 | | | $ | 293,810 | | | | $ | 293,810 | | |
Total (Annuity) | | | — | | | | — | | | | — | | | | — | | | ($ | 185,031 | )(6) | | — | | | | — | | | ||||||
| | | | | | | | | | | | | | | |
NELSON N. S. CHUN(8) | ||||||||||||||||||||||||||||||||
Components | Change in w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||
Cash Severance | $ | 1,025,937 | $ | 341,979 | — | — | — | — | — | |||||||||||||||||||||||
Retirement Benefits(4) | ($ | 18,138 | )(6) | — | — | — | — | — | — | |||||||||||||||||||||||
— | — | — | — | ($ | 203,905 | )(5)(6) | — | — | ||||||||||||||||||||||||
Health & Welfare Benefits | $ | 36,253 | $ | 16,187 | — | — | — | — | — | |||||||||||||||||||||||
Outplacement Counseling | $ | 10,000 | $ | 10,000 | — | — | — | — | — | |||||||||||||||||||||||
Long-Term Incentives(7) | $ | 431,374 | — | — | — | $ | 323,270 | $ | 323,270 | $ | 323,270 | |||||||||||||||||||||
Total(Lump-sum) | $ | 1,485,426 | $ | 368,166 | $ | 0 | $ | 0 | $ | 323,270 | $ | 323,270 | $ | 323,270 | ||||||||||||||||||
Total (Annuity) | — | — | — | — | ($ | 203,905 | )(6) | — | — |
MEREDITH J. CHING | ||||||||||||||||||||||||||||||||
Components | Change in w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||
Cash Severance | $ | 865,113 | $ | 288,371 | — | — | — | — | — | |||||||||||||||||||||||
Retirement Benefits(4) | ($ | 7,569 | )(6) | $ | 7,738 | $ | 7,738 | $ | 7,738 | $ | 7,738 | — | $ | 7,738 | ||||||||||||||||||
$ | 19,780 | (5) | $ | 19,780 | (5) | $ | 19,780 | (5) | $ | 19,780 | (5) | ($ | 1,053,306 | )(5)(6) | — | $ | 19,780 | (5) | ||||||||||||||
Health & Welfare Benefits | $ | 33,300 | $ | 15,017 | — | — | — | — | — | |||||||||||||||||||||||
Outplacement Counseling | $ | 10,000 | $ | 10,000 | — | — | — | — | — | |||||||||||||||||||||||
Long-Term Incentives(7) | $ | 431,374 | — | — | — | $ | 323,270 | $ | 323,270 | $ | 323,270 | |||||||||||||||||||||
Total(Lump-sum) | $ | 1,332,217 | $ | 321,126 | $ | 7,738 | $ | 7,738 | $ | 331,008 | $ | 323,270 | $ | 331,008 | ||||||||||||||||||
Total (Annuity) | $ | 19,780 | $ | 19,780 | $ | 19,780 | $ | 19,780 | ($ | 1,053,306 | )(6) | — | $ | 19,780 |
Lance K. Parker | ||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components | Change in Control w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance | | | $ | 987,683 | | | | $ | 386,250 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Retirement Benefits(4) | | | $ | 56,172 | | | | $ | 6,378 | | | | $ | 6,378 | | | | $ | 6,378 | | | $ | 6,378 | | | — | | | | Not yet eligible | | | ||
| | ($ | 29,472 | )(5)(6) | | | ($ | 29,472 | )(5)(6) | | | ($ | 29,472 | )(5)(6) | | | ($ | 29,472 | )(5)(6) | | ($ | 90,199 | )(5)(6) | | — | | | | Not yet eligible | | | |||
Health & Welfare Benefits | | | $ | 46,383 | | | | $ | 21,539 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Outplacement Counseling | | | $ | 10,000 | | | | $ | 10,000 | | | | — | | | | — | | | — | | | — | | | | — | | | |||||
Long-Term Incentives(7) | | | $ | 606,687 | | | | — | | | | — | | | | — | | | $ | 438,608 | | | $ | 438,608 | | | | $ | 438,608 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) | | | $ | 1,706,925 | | | | $ | 424,167 | | | | $ | 6,378 | | | | $ | 6,378 | | | $ | 444,986 | | | $ | 438,608 | | | | $ | 438,608 | | |
Total (Annuity) | | | ($ | 29,472 | )(6) | | | ($ | 29,472 | )(6) | | | ($ | 29,472 | )(6) | | | ($ | 29,472 | )(6) | | ($ | 90,199 | )(6) | | — | | | | Not yet eligible | | | ||
| | | | | | | | | | | | | | | |
| | |
| ||
|
LANCE K. PARKER | ||||||||||||||||||||||||||||||||
Components | Change in w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||
Cash Severance | $ | 921,714 | $ | 375,000 | — | — | — | — | — | |||||||||||||||||||||||
Retirement Benefits(4) | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | ($ | 103,863 | )(6) | — | Not Yet Eligible | |||||||||||||||
($ | 31,563 | )(5)(6) | ($ | 31,563 | )(5)(6) | ($ | 31,563 | )(5)(6) | ($ | 31,563 | )(5)(6) | ($ | 103,863 | )(5)(6) | — | Not Yet Eligible | ||||||||||||||||
Health & Welfare Benefits | $ | 46,041 | $ | 21,189 | — | — | — | — | — | |||||||||||||||||||||||
Outplacement Counseling | $ | 10,000 | $ | 10,000 | — | — | — | — | — | |||||||||||||||||||||||
Long-Term Incentives(7) | $ | 371,243 | — | — | — | $ | 269,233 | $ | 269,233 | $ | 269,233 | |||||||||||||||||||||
Total(Lump-sum) | $ | 1,317,435 | $ | 374,626 | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | $ | 165,370 | $ | 269,233 | $ | 269,233 | ||||||||||||||||
Total (Annuity) | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | ($ | 31,563 | )(6) | ($ | 103,863 | )(6) | — | Not Yet Eligible |
PAUL K. ITO | ||||||||||||||||||||||||||||||||
Components | Change in w/Termination | Termination w/o Cause(1) | Termination w/Cause | Voluntary Resignation | Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||
Cash Severance | $ | 1,224,464 | $ | 382,645 | — | — | — | — | — | |||||||||||||||||||||||
Retirement Benefits(4) | $ | 86,311 | $ | 110 | $ | 110 | $ | 110 | $ | 110 | — | Not Yet Eligible | ||||||||||||||||||||
($ | 13,760 | )(5)(6) | ($ | 13,760 | )(5)(6) | ($ | 13,760 | )(5)(6) | ($ | 13,760 | )(5)(6) | ($ | 111,411 | )(5)(6) | — | Not Yet Eligible | ||||||||||||||||
Health & Welfare Benefits | $ | 45,378 | $ | 20,518 | — | — | — | — | — | |||||||||||||||||||||||
Outplacement Counseling | $ | 10,000 | $ | 10,000 | — | — | — | — | — | |||||||||||||||||||||||
Long-Term Incentives(7) | $ | 609,184 | — | — | — | $ | 459,533 | $ | 459,533 | Not Yet Eligible | ||||||||||||||||||||||
Total(Lump-sum) | $ | 1,975,337 | $ | 413,273 | $ | 110 | $ | 110 | $ | 459,643 | $ | 459,533 | $ | 0 | ||||||||||||||||||
Total (Annuity) | ($ | 13,760 | )(6) | ($ | 13,760 | )(6) | ($ | 13,760 | )(6) | ($ | 13,760 | )(6) | ($ | 111,411 | )(6) | — | Not Yet Eligible |
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| ||
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE42 | | |
| EXECUTIVE COMPENSATION |
All amounts shown arelump-sum payments, unless otherwise noted. Assumptions used in the tables above are set forth in the Pension Benefits section.
The Excess Benefits Plan benefits are paid, upon termination, as a lump sum equal to the present value of the traditional defined benefit assumed to be paid on a life annuity basis plus the cash balance account. The lump sum conversion was based on interest rates (with 39% marginal tax rate adjustment) and mortality used in our financial disclosures and included in the Pension Benefits section.
Use ofNon-GAAP Financial Measures
Cash Net Operating Income (“("Cash NOI”NOI") is calculated as total propertyCommercial Real Estate operating revenues less direct property-related operating expenses. Cash NOI excludes straight-line rentlease adjustments, amortization of favorable/unfavorable leases, amortization of tenantlease incentives, selling, general and administrative expenses, impairmentsimpairment of commercial real estate assets, lease termination income, and depreciation and amortization (including amortization of maintenance capital, tenant improvements and leasing commissions).
The Company’sCompany's methods of calculatingnon-GAAP measures may differ from methods employed by other companies and thus may not be comparable to such other companies.
Cash NOI is anon-GAAP measure used by the Company in evaluating the CRE segment’ssegment's operating performance as it is an indicator of the return on property investment and provides a method of comparing performance of operations, on an unlevered basis, over time. Cash NOI should be not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE43 |
EXECUTIVE COMPENSATION |
A reconciliation of Commercial Real Estate operating profit to Commercial Real Estate Cash NOI and Same-storeSame-Store Cash NOI follows:
Year Ended
| ||||||||||||
(In millions)
| 2017
| 2016
| ||||||||||
Commercial Real Estate segment operating profit
| $
| 34.4
|
| $
| 54.8
|
| ||||||
Adjustments:
| ||||||||||||
Depreciation and amortization
|
| 26.0
|
|
| 28.4
|
| ||||||
Straight-line lease adjustments
|
| (1.6
| )
|
| (2.1
| )
| ||||||
Lease incentive amortization
|
| —
|
|
| 0.1
|
| ||||||
Favorable/(unfavorable) lease amortization
|
| (2.9
| )
|
| (3.3
| )
| ||||||
Termination income
|
| (1.7
| )
|
| (0.1
| )
| ||||||
Other (income)/expense, net
|
| 0.3
|
|
| 0.4
|
| ||||||
Impairment of real estate assets
|
| 22.4
|
|
| —
|
| ||||||
Selling, general, administrative and other expenses
|
| 7.9
|
|
| 4.8
|
| ||||||
Commercial Real Estate segment Cash NOI
|
| 84.8
|
|
| 83.0
|
| ||||||
Acquisitions / dispositions and other adjustments
|
| (9.2
| )
|
| (10.8
| )
| ||||||
Same-store Cash NOI
| $
| 75.6
|
| $
| 72.2
|
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
|
A reconciliation of Commercial Real Estate Cash NOI to Commercial Real Estate NOI and Same-store NOI used in the determination of incentive compensation follows:
|
| |||||||
|
|
| ||||||
| ||||||||
|
| |||||||
|
| |||||||
|
| |||||||
|
|
| ||||||
|
|
| ||||||
|
|
|
| Year Ended | ||||||
| | | | | | | |
(In millions) | | 2018 | | 2017 | |||
Commercial Real Estate segment operating profit | $ | 58.5 | $ | 34.4 | |||
Adjustments: | |||||||
Depreciation and amortization | | 28.0 | | 26.0 | |||
Straight-line lease adjustments | (4.0 | ) | (1.6 | ) | |||
Favorable/(unfavorable) lease amortization | | (1.9 | ) | | (2.9 | ) | |
Termination income | (1.1 | ) | (1.7 | ) | |||
Other (income)/expense, net | | 0.3 | | 0.3 | |||
Impairment of real estate assets | — | 22.4 | |||||
Selling, general, administrative and other expenses | | 6.9 | | 7.9 | |||
| | | | | | | |
Commercial Real Estate segment Cash NOI | 86.7 | 84.8 | |||||
Acquisitions / dispositions and other adjustments | | (12.5 | ) | | (13.2 | ) | |
| | | | | | | |
Same-Store Cash NOI | $ | 74.2 | $ | 71.6 | |||
| | | | | | | |
The Company presents thenon-GAAP measure of Adjusted EBITDA for the Materials & Construction segment,EBITDA Attributable to A&B, which contain the results of Grace Pacific. The Company uses thisnon-GAAP financial measure when evaluating operating performance for the Materials & Construction segment because management believes that AdjustedMaterials & Construction EBITDA Attributable to A&B provides insight into the segment’s coresegment's operating results attributable to A&B, future cash flow generation attributable to A&B, and the underlying business trends affecting performance on a consistent and comparable basis from period to period.the underlying business. The Company provides this information as an additional means of evaluating the segment’ssegment's ongoing core operations. Thenon-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Materials & Construction operating profit is the most directly comparable GAAP measurement to the segment’sMaterials & Construction EBITDA Attributable to A&B. A reconciliation of segment operating profit to Materials & Construction EBITDA Attributable to A&B follows:
| Year Ended December 31 | |||
| | | | |
(In Millions) | | 2018 | ||
Materials & Construction Operating Profit | $ | (73.2 | ) | |
Depreciation & amortization expense | 12.1 | |||
Income attributable to non-controlling interest | | (2.2 | ) | |
| | | | |
Materials & Construction EBITDA Attributable to A&B | $ | (63.3 | ) | |
| | | | |
The Company presents the non-GAAP measure of M&C Adjusted EBITDA, which contain the results of Grace Pacific. The Company uses this non-GAAP financial measure when evaluating operating performance for the Materials & Construction segment because management believes that M&C Adjusted EBITDA provides insight into the segment's core operating results, future cash flow generation, and the underlying business trends affecting performance on a consistent and comparable basis from period to period. The Company provides this information as an additional means of evaluating the segment's ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Materials & Construction
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE44 | | |
| EXECUTIVE COMPENSATION |
operating profit is the most directly comparable GAAP measurement to the M&C Adjusted EBITDA. A reconciliation of segment operating profit to M&C Adjusted EBITDA follows:
Year Ended
| ||||||||||||
(In Millions)
|
2017
|
2016
| ||||||||||
Materials & Construction Operating Profit
|
$
|
22.0
|
|
$
|
23.3
|
| ||||||
Depreciation & amortization expense
|
|
12.2
|
|
|
11.7
|
| ||||||
Income attributable to non-controlling interest
|
| (2.2
| )
|
|
(1.8
|
)
| ||||||
Adjusted EBITDA
|
$
|
32.0
|
|
$
|
33.2
|
|
| Year Ended December 31 | ||||||
| | | | | | | |
(In Millions) | | 2018 | | 2017 | |||
Materials & Construction Operating Profit | $ | (73.2 | ) | $ | 22.0 | ||
Depreciation & amortization expense | 12.1 | 12.2 | |||||
Impairment of assets | | 77.8 | | — | |||
Income attributable to non-controlling interest | (2.2 | ) | (2.2 | ) | |||
| | | | | | | |
M&C Adjusted EBITDA | $ | 14.5 | $ | 32.0 | |||
| | | | | | | |
Consolidated AdjustedPre-tax Income (Loss) was an operating performance measure for the Company for the year ended December 31, 2017,2018, as management believes that the measure provided insight into the operating results of the Company’sCompany's core businesses and the underlying business trends affecting performance on a consistent and comparable basis from period to period. Thenon-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Income (Loss) From Continuing Operations Before Income Taxes and Net Gain on Sale of Improved Properties is the most directly comparable GAAP measurement to Consolidated AdjustedPre-tax Income. Income (Loss). A reconciliation of Income (Loss) From Continuing Operations Before Income Taxes and Net Gain on Sale of Improved Properties to Consolidated AdjustedPre-tax Income (Loss) follows:
(In Millions) | | 2018 | ||
Income (Loss) From Continuing Operations Before Income Taxes | $ | (52.9 | ) | |
Adjustments: | ||||
Non-cash amortization of actuarial pension expense | | 3.4 | ||
Non-cash reduction in solar investment | 0.5 | |||
| | | | |
Consolidated Adjusted Pre-tax Income (Loss) | $ | (49.0 | ) | |
| | | | |
| | | ||||||
| |
| | |||||
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
|
|
| ||||||||
| | PAGE45 | ||||||||
|
| |||||||||
|
| |||||||||
|
| |||||||||
| ||||||||||
|
|
|
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Shareholders are being asked to vote to approve, on anon-binding, advisory basis, the compensation of our NEOs.
A&B’s&B's compensation philosophy is to drive the Company’sCompany's performance and further shareholder interests through a compensation program that attracts, motivates and retains outstanding executives, and rewards outstanding performance. The CD&A section of this Proxy Statement beginning on page 19, discusses our policies and procedures that implement our compensation philosophy. Highlights of our compensation program include the following:
The following resolution is being submitted for a shareholder advisory vote at the Annual Meeting:
“"RESOLVED, that the Company’sCompany's shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’sCompany's Proxy Statement for the 20182019 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 20172018 Summary Compensation Table and the other related tables and disclosure.”"
Although the advisory vote isnon-binding, the Compensation Committee and the Board will review the results of the vote and consider them in future determinations concerning our executive compensation program. As announced previously, we will provide shareholders the opportunity to cast an advisory vote on executive compensation on an annual basis.
The Board of Directors recommends that shareholders vote FOR the approval of the resolution relating to executive compensation.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE46 | | |
| |
PROPOSAL NO. 3: ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
Shareholders are being asked to vote on the frequency they prefer for future advisory votes on executive compensation. Shareholders may choose from the following four options: whether they want an advisory vote on executive compensation every one, two or three years, or to abstain from voting on the matter.
Our Board of Directors has determined that an annual advisory vote on executive compensation will allow our shareholders to provide timely, direct input on the Company's executive compensation philosophy, policies and practices as disclosed in the proxy statement each year. The Board believes that an annual vote is consistent with the Company's efforts to engage in an ongoing dialogue with shareholders on executive compensation and corporate governance matters.
Although the advisory vote is non-binding, the Compensation Committee and the Board will review the results of the vote and consider them in future determinations concerning the frequency of advisory votes on our executive compensation.
The Board of Directors recommends that shareholders vote for an annual vote as the preferred frequency for advisory votes on executive compensation. Please note that your vote as a shareholder on this item is not a vote to approve or disapprove the Board's recommendation.
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE47 |
|
The Audit Committee provides assistance to the Board of Directors in fulfilling its obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of A&B, including the review and approval of all related person transactions required to be disclosed in this Proxy Statement. Among other things, the Audit Committee reviews and discusses with management and Deloitte & Touche LLP, A&B’s&B's independent registered public accounting firm, the results of theyear-end audit of A&B, including the auditors’auditors' report and audited financial statements. In this context, the Audit Committee has reviewed and discussed A&B’s&B's audited financial statements with management, has discussed with Deloitte & Touche LLP the matters required to be discussed by applicable Public Company Accounting Oversight Board rules and, with and without management present, has discussed and reviewed the results of the independent registered public accounting firm’sfirm's audit of the financial statements.
The Audit Committee has received the written communication regarding independence from Deloitte & Touche LLP required under the rules of the Public Company Accounting Oversight Board, and has discussed with Deloitte & Touche LLP its independence from A&B. The Audit Committee has determined that the provision ofnon-audit services rendered by Deloitte & Touche LLP to A&B is compatible with maintaining the independence of Deloitte & Touche LLP from A&B in the conduct of its auditing function.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that A&B’s&B's audited consolidated financial statements be included in A&B’s&B's Annual Report on Form10-K for the fiscal year ended December 31, 20172018 for filing with the SEC. The Audit Committee also has appointed, subject to shareholder ratification, Deloitte & Touche LLP as A&B’s&B's independent registered public accounting firm for 2018.2019.
The foregoing report is submitted by Mr. Pasquale (Chairman), Mr. Doane and Mr. Yeaman.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |||
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | | |
| PAGE48 | | |
| |
PROPOSAL NO. 3:4: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as the independent registered public accounting firm of A&B for the ensuing year, and the Audit Committee recommends that shareholders vote in favor of ratifying such appointment. Although ratification of this appointment is not required by law, the Board believes that it is desirable as a matter of corporate governance. If shareholders do not ratify the appointment of Deloitte & Touche LLP, it will be considered as a recommendation to the Board and the Audit Committee to consider the retention of a different firm. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting, where they will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from shareholders.
In compliance with the Sarbanes Oxley Act of 2002 and applicable SEC rules, the Audit Committee has adopted policies and procedures for Audit Committee approval of audit andnon-audit services. Under such policies and procedures, the Audit Committeepre-approves or has delegated to the Chairman of the Audit Committee authority topre-approve all audit andnon-prohibited,non-audit services performed by the independent registered public accounting firm in order to assure that such services do not impair the auditor’sauditor's independence. Any additional proposed services or costs exceedingpre-approved cost levels require additionalpre-approval as described above. The Audit Committee may delegatepre-approval authority to one or more of its members for services not to exceed a specific dollar amount per engagement. Requests forpre-approval include a description of the services to be performed, the fees to be charged and the expected dates that the services will be performed. All services provided by Deloitte & Touche LLP during 20172018 werepre-approved in accordance with these policies.
For the years ended December 31, 20172018 and 2016,2017, professional services were performed by Deloitte & Touche LLP (including affiliates) for A&B as follows:
Audit Fees.The aggregate fees billed for the audit of the Company’sCompany's annual consolidated financial statements, including Sarbanes-Oxley Section 404 attestation-related work, for the fiscal years ended December 31, 20172018 and 2016,2017, the reviews of the interim financial statements included in the Company’sCompany's Quarterly Reports on Form10-Q and consents for SEC registration statements were approximately $1,803,000$2,335,000 and $1,974,000,$1,803,000, respectively.
Audit-Related Fees.The aggregate fees billed for Audit-Related services for the fiscal years ended December 31, 20172018 and 20162017 were approximately $0 and $1,105,000, and $407,000, respectively, and wererespectively. The 2017 fees are related primarily to consultation on financial accounting and reporting standards including those related to a potential REIT conversion and audit procedures for the Company’sCompany's standalone subsidiaries and other SEC filings in 2017 and 2016.filings.
Tax Fees. The The aggregate fees billed for professional tax services for fiscal years ended December 31, 20172018 and 20162017 were approximately $16,000 and $110,000, respectively,each in both years, and were related primarily to tax compliance services in 20172018 and to an Earnings and Profit study in 2016.2017.
All Other Fees.There were no The aggregate fees billed for other services not included above for the fiscal years ended December 31, 2018 and 2017 were approximately $27,000 and 2016.$0, respectively, and were related primarily to certain advisory services in 2018.
SHAREHOLDERS WITH THE SAME ADDRESS
Individual shareholders sharing an address with one or more other shareholders may elect to “household”"household" the mailing of the Notice of Internet Availability of Proxy Materials or our annual report and proxy statement. This means that only one Notice of Internet Availability of Proxy Materials or our annual report and proxy statement will be sent to that address unless one or more shareholders at that address specifically elect to receive separate mailings. Shareholders who participate in householding will continue to receive separate proxy cards. We will promptly send a separate Notice of Internet Availability of Proxy Materials or our annual report and proxy statement to a shareholder at a shared address on request. Shareholders with a shared address may also request us to send separate Notices of Internet Availability of Proxy Materials or our annual reports and proxy statements in the future, or to send a single copy in the future if we are currently sending multiple copies to the same address.
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |
| ||
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
| | |
| | PAGE49 |
PROPOSAL NO. |
Requests related to householding should be mailed to Alexander & Baldwin, Inc., P.O. Box 3440, Honolulu, HI 96801- 3440,96801-3440, Attn: Alyson J. Nakamura, Corporate Secretary or by calling (808)525-8450. If you are a shareholder whose shares are held by a bank, broker or other nominee, you can request information about householding from your bank, broker or other nominee.
The Board of Directors of A&B knows of no other business to be presented for shareholder action at the Annual Meeting. However, should matters other than those included in this Proxy Statement properly come before the Annual Meeting, the proxy holders named in the accompanying proxy will use their best judgment in voting upon them.
SHAREHOLDER PROPOSALS FOR 20192020
Proposals of shareholders intended to be presented pursuant to Rule14a-8 under the Exchange Act at the 20192020 Annual Meeting of A&B must be received at the headquarters of A&B on or before November 12, 20182019 in order to be considered for inclusion in the year 20192020 Proxy Statement and proxy.
In order for proposals of shareholders made outside of Rule14a-8 under the Exchange Act to be considered “timely”"timely" within the meaning of Rule14a-4(c) under the Exchange Act, such proposals must be received at the headquarters of A&B not later than December 25, 2018.28, 2019. A&B’s&B's Bylaws require that shareholder proposals made outside of Rule14a- 8 under the Exchange Act must be submitted, in accordance with the requirements of the Bylaws, not later than December 25, 201828, 2019 and not earlier than November 25, 2018.28, 2019.
The Company’sCompany's Bylaws provide that no person (other than a person nominated by the Board) will be eligible to be elected a director at an annual meeting of shareholders unless the Corporate Secretary has received, not less than 120 days nor more than 150 days before the anniversary date of the prior annual meeting, a written shareholder’sshareholder's notice in proper form that the person’sperson's name be placed in nomination. If the annual meeting is not called for a date which is within 25 days of the anniversary date of the prior annual meeting, a shareholder’sshareholder's notice must be given not later than 10 days after the date on which notice of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever occurs first. To be in proper written form, a shareholder’sshareholder's notice must include information about each nominee and the shareholder making the nomination. The notice also must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
By Order of the Board of Directors | ||
ALYSON J. NAKAMURA | ||
Vice President and Corporate Secretary |
ALEXANDER & BALDWIN, INC. ◾ 2018 PROXY STATEMENT
| | |
| | |
ALEXANDER & BALDWIN, INC.§2019 PROXY STATEMENT |
IMPORTANT ANNUAL MEETING INFORMATION |
Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the 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 11:00 PM, HST, on April 25, 2019. Vote by Internet ·Go to www.envisionreports.com/ALEX ·Or scan the QR code with your smartphone ·Follow the steps outlined on the secure website | ||
Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas. | Vote by telephone ·Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone ·Follow the instructions provided by the recorded message |
Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the 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 11:00 PM, HST, on April 23, 2018.
Annual Meeting Proxy Card |
|
|
|
| |
|
Vote by telephone
qIF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
A | Proposals — THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 4, AND FOR “ONE YEAR” FOR PROPOSAL 3. |
1. Election of Directors: | 01 - | Christopher J. Benjamin | 02 - | W. Allen Doane | 03 - | Robert S. Harrison | 04 - | David C. Hulihee | + | |||||||||
Nominees: | 05 - | Stanley M. Kuriyama | 06 - | Thomas A. Lewis, Jr. | 07 - | Douglas M. Pasquale | 08 - | Michele K. Saito | ||||||||||
09 - | Jenai S. Wall | 10 - | Eric K. Yeaman | |||||||||||||||
1. Election of Directors: | 01 - Christopher J. Benjamin | 02 - W. Allen Doane | 03 - Robert S. Harrison | 04 - David C. Hulihee | ||||||||||||
Nominees: | 05 - Stanley M. Kuriyama | 06 - Diana M. Laing | 07 - Thomas A. Lewis, Jr. | 08 - Douglas M. Pasquale | ||||||||||||
09 - Michele K. Saito | 10 - Eric K. Yeaman |
o | Mark here to voteFOR all nominees | o | Mark here toWITHHOLD vote from all nominees | o | For AllEXCEPT- To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below. | ||||||||||||||
|
For | Against | Abstain | For | Against | Abstain | ||
2.PROPOSAL TO APPROVE THE ADVISORY RESOLUTION RELATING TO EXECUTIVE COMPENSATION | o | o | o |
| o | o | o |
1 Year | 2 Years | 3 Years | Abstain | |||||
3.ADVISORY VOTE ON THE FREQUENCY OF THE FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION | o | o | o | o |
NOTE:Such other business as may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, AND 4, AND FOR “1 YEAR” FOR PROPOSAL 3, AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS PROPERLY MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
B | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below |
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
Date (mm/dd/yyyy) — Please print date below. | Signature 1 — Please keep signature within the box. | Signature 2 — Please keep signature within the box. | |||||||
// | |||||||||
1 P C F |
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of shareholders.The Proxy Statement and the 20172018 Annual Report to Stockholders are available at:www.envisionreports.com/www.envisionreports.com/ALEX
qIF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
Proxy — ALEXANDER & BALDWIN, INC. | |
Proxy — ALEXANDER & BALDWIN, INC.
822 Bishop Street, Honolulu, Hawaii 96813
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 24, 2018
26, 2019
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C.J. Benjamin, S.M. Kuriyama and D.M. Pasquale, and each of them, proxies with full power of substitution, to vote the shares of stock of Alexander & Baldwin, Inc., which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Corporation to be held on Tuesday,Friday, April 24, 2018,26, 2019, and at any adjournments or postponements thereof, on the matters set forth in the Notice of Meeting and Proxy Statement, as stated on the reverse side.
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, AND 4, AND FOR “1 YEAR” FOR PROPOSAL 3, AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS PROPERLY MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
(continued and to be marked, dated and signed, on other side)