RATIFICATION OF APPOINTMENT OF
INDEPENDENT
AUDITORSREGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors intends to appoint Ernst & Young LLP (“EY”EY”) as the Company’s independent auditors,registered public accounting firm to audit the financial statements of the Company for the current fiscal year ending December 28, 2018.31, 2021. EY has been the Company’s independent auditorserved in this role since 1986. The Company anticipates that a representative of EY will be present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so, and willmay be available to answer any appropriate questions. Principal Accounting Fees and Services
Audit Fees andNon-Audit Fees
The following table presents fees billed by EY for
professional audit
services and other services rendered for the audit of the Company’s annual financial statements for the
last two fiscal years,
ended December 29, 2017 and December 30, 2016, and fees billed by EY for other services rendered during those periods (in thousands).
| | | | | | | | | | |
| | | Category | | Fiscal Year
Ended
December 29,
2017 | | | Fiscal Year
Ended
December 30,
2016 | |
| | Audit Fees | | $ | 6,256 | | | $ | 5,401 | |
| | Audit-Related Fees (1) | | $ | 25 | | | $ | 25 | |
| | Tax Fees (2) | | | | | | | | |
| | Tax Compliance | | $ | 422 | | | $ | 399 | |
| | Tax Planning & Tax Advice | | | 673 | | | | 537 | |
| | | | | | | | | | |
| | Total Tax Fees | | $ | 1,095 | | | $ | 936 | |
| | | | | | | | | | |
| | All Other Fees (3) | | $ | 2 | | | $ | 2 | |
| (1) | Represents compliance program assessment, accounting consultation and advisory services performed by the Company’s auditors. |
| (2) | Represents various tax compliance and filing services with respect to U.S. and international tax matters, as well as tax planning advice related to acquisitions, integration activities and general matters. |
| (3) | Represents conflict minerals advisory services and subscription to EY’s accounting research tool. |
| | | | | | | | | | | |
| Category | Fiscal Year Ended
January 1, 2021 | | Fiscal Year Ended
January 3, 2020 |
| Audit Fees (1) | $ | 5,161 | | | $ | 5,708 | |
| Audit-Related Fees | — | | | — | |
| Tax Fees (2) | | | |
| Tax Compliance | 426 | | | 440 | |
| Tax Planning & Tax Advice | 357 | | | 754 | |
| Total Tax Fees | $ | 783 | | | $ | 1,194 | |
| All Other Fees | — | | | — | |
| | | |
(1) Represents the audits of the Company’s annual financial statements and internal control over financial reporting; review of financial statements included in the Company’s Form 10-Q quarterly reports; accounting consultations; and services that are typically provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
(2) Represents various tax compliance and filing services with respect to U.S. and international tax matters, as well as tax planning advice related to acquisitions, integration activities and general matters.
Audit Committee
Pre-Approval of Policies and Procedures
The Audit Committee is responsible for appointing, approving the plan for audit and related services and fees, and overseeing the work of the independent
auditor.registered public accounting firm. The Audit Committee has established a
pre-approval procedure for all audit and permissible
non-audit other services to be performed by EY. The
pre-approval policy requires that requests for services by the independent
auditorregistered public accounting firm be submitted to the Company’s
chief financial officer (“CFO”)CFO for review and approval. Any requests that are approved by the CFO are then aggregated and submitted to the Audit Committee for approval of services at a meeting of the Audit Committee. Requests may be made with respect to either specific services or a type of service for predictable or recurring services. All
permissiblenon-auditservices performed by EY were approved by the Audit Committee.
The Audit Committee has concluded that the provision of thenon-audit services listed above is compatible with maintaining EY’s independence.
Ratification of the appointment of EY as the Company’s independent
auditorregistered public accounting firm for the current fiscal year will require the affirmative vote of the holders of a majority of the shares represented and voting at the Annual Meeting either
in personvia the internet or by proxy on this proposal. In the event that such ratification by the stockholders is not obtained, the Audit Committee and the Board of Directors will reconsider such selection.
Recommendation of the Board of
Directors:The Company’s Board of Directors recommends a vote FOR the ratification of the appointment of EY as the independent auditors
| | |
| The Board of Directors recommends that stockholders vote FOR the ratification of the appointment of EY as the independent registered public accounting firm of the Company for the current fiscal year ending December 31, 2021. |
Proxy Statement for the Company for the current fiscal year ending December 28, 2018.13
2021 Annual Meeting of Stockholders | Trimble 19
BOARD MEETINGS AND COMMITTEES; DIRECTOR INDEPENDENCE
The Board of Directors held
75 meetings during the
20172020 fiscal year. No director attended fewer than 75% of the aggregate of all the meetings of the Board of Directors and the meetings of the committees
if any, upon which such director
also served
duringin the
20172020 fiscal year
other than Mr. Wibergh who joined(during the
Board of Directorsperiods in
2018.which such director served in each such capacity). It is the Company’s policy to encourage directors to attend the Annual Meeting. All of the current members of the Board of Directors who were
existing directors at the time of the
20172020 annual meeting attended the annual
meeting.meeting, except for Mr. Nersesian.
As a result of its annual review and based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, the Board of Directors has determined that each of the directors
except forbesides Mr. Berglund
and Mr. Painter are independent directors as defined by Rule 5605(a)(2) of the NASDAQ Marketplace Rules. In making this determination, the Board
of Directors considered the current and prior relationships of each
non-employee director, or any of his or her family members, has with the Company, our senior management and our independent
auditors,registered public accounting firm, and all other facts and circumstances deemed relevant in determining their independence.
Stockholder Communications with Directors
The Board of Directors has established a process to receive communications from stockholders. Stockholders of the Company may communicate with one or more of the Company’s directors (including any board
committee or group of directors)committee) by mail in care of Board of Directors, Trimble Inc., 935 Stewart Drive, Sunnyvale, California 94085. Such communications should specify the intended recipient or recipients. The Corporate Secretary periodically will forward such communications or provide a summary to the Board of Directors or the relevant members of the
Board.Board of Directors.
Board Leadership Structure; Oversight and Risk Management
The Company currently separates the positions of chief executive officer, and chairman of the Board of Directors. Ourexecutive chairman of the Board of Directors is responsible for settingand Lead Independent Director. In connection with Mr. Peek’s appointment as Lead Independent Director, the agenda for each meetingBoard of Directors considered Mr. Peek’s demonstrated leadership during his tenure as a member of the Board of Directors and Audit Committee, and believes that Mr. Peek’s ability to act as a strong Lead Independent Director provides balance in consultation with the chiefCompany’s leadership structure and helps ensure a strong, independent and active Board.
Our executive
officer, and presiding at executive sessions. The chairman of the Board of Directors,
Steve Berglund, is
also responsible for
presiding and setting the agenda at full sessions of the Board of Directors, in consultation with our CEO, and recommending committee assignments to the Nominating and Corporate Governance Committee. Our
chiefLead Independent Director is elected by and from the independent directors and presides at executive
officersessions of the Board of Directors, in addition to coordinating the activities of the independent directors and committee chairpersons and facilitating communications between the other members of the Board of Directors. Our CEO is responsible for the
day-to-day operations of the Company. Separating the positions of
chiefCEO, executive
officer and chairman of the Board of Directors,
and Lead Independent Director allows our
chief executive officerCEO to focus on our
day-to-day business, while allowing the
executive chairman
ofand the
Board of DirectorsLead Independent Director to lead the Board of Directors in its fundamental role of providing independent advice to, and oversight of, management. The Board of Directors believes that
havingthis leadership structure with an
independent director serve asexecutive chairman
who is our former chief executive officer and a strong Lead Independent Director provides balance, is in the best interests of the Company and its stockholders, and is the appropriate leadership structure for the Company at this time.
The Board of Directors has overall responsibility for the oversight of risk management for the Company, and it exercises this oversight through committees and regular engagement with the Company’sCompany's senior management. The Board of Directors also directly oversees cybersecurity risk at the Company, including bywith the Audit Committee receiving regular updates on cybersecurity risk management and through escalation processes providingthat provide for timely notice with respect to the Audit Committee of any material developments. The Audit Committee has oversight of the Company’sCompany's financial matters, internal controls, financial reporting and internal investigations relating to financial misconduct. The Compensation Committee has oversight of our compensation policies and practices, and our Nominating and Corporate Governance Committee is responsible for the independence and qualification of the board members and the Company’sCompany's corporate governance principles. The committees report their activities back to the Board of Directors. In addition, members of the Company’sCompany's senior management attend meetings of the
20 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
Board of Directors to discuss strategic planning and risks and opportunities for the Company’sCompany's business areas, in addition to answering any questions that the Board of Directors may raise.raise
. Committee Membership
The composition of the committees of the Board of Directors is as set forth below:
| | | | | | | | | | | |
| Audit
Committee | Compensation Committee | Nominating and Corporate Governance Committee |
| James C. Dalton | | | |
| Börje Ekholm | | | |
| Kaigham (Ken) Gabriel | | | |
| Merit E. Janow * | | | |
| Meaghan Lloyd | | | |
| Sandra MacQuillan | | | |
| Ronald S. Nersesian * | | | |
| Mark S. Peek | | | |
| Johan Wibergh | | | |
= chair 
= member* Directors Janow and Nersesian are not seeking reelection and will be retiring from the Board of Directors effective as of the date of the Annual Meeting.
The Board of Directors has a separately-designated, standing Audit Committee, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The current members of the Audit Committee are directors Gabriel, MacQuillan, and Peek, and director Peek currently serves as the committee chair. The Audit Committee held 8 meetings during the 2020 fiscal year.
The Audit Committee is governed by a charter, a current copy of which is available on our corporate website athttp://investor.trimble.com/corporate-governance.cfmcorporate-governance.The current members of the Audit Committee are directors Gabriel, Johansson and Peek, and director Peek currently serves as the committee chairman. The Audit Committee held 9 meetings during the 2017 fiscal year. The purpose of the Audit Committee is to make such examinations as are necessary to monitor the corporate financial reporting and the internal and external audits of the Company, to provide to the Board of Directors the results of its
14
examinations and recommendations derived therefrom, to outline to the Board of Directors improvements made, or to be made, in internal accounting controls, to nominate the independent auditors,registered public accounting firm, and to provide such additional information as the committeeAudit Committee may deem necessary to make the Board of Directors aware of significant financial matters which require the Board of Directors’Directors' attention.
All Audit Committee members are independent directors as defined by applicable NASDAQ Marketplace Rules and listing standards.
All members of the Audit Committee are financially sophisticated and are able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement. The Board of Directors has determined that director Peek is a “financial expert” as that term is defined in the rules promulgated by the SEC. Mr. Peek has an extensive accounting and financial management
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 21
background, which includes holding positions as chief financial officer and chief accounting officer with several leading publicly-traded technology companies, and almost two decades of experience with Deloitte.
The Board of Directors has a standing Compensation Committee, comprised of directors Janow,Ekholm, Nersesian and Vande Steeg.Wibergh. Director Vande SteegNersesian currently serves as the committee chairman. Allchair. The Compensation Committee members are independent as defined by applicable NASDAQ Marketplace Rules and listing standards. held 6 meetings during the 2020 fiscal year.
The Compensation Committee is governed by a charter, a current copy of which is available on our corporate website athttp://investor.trimble.com/corporate-governance.cfmcorporate-governance. The Compensation Committee held 5 meetings during the 2017 fiscal year. The purpose of the Compensation Committee is to make decisions with respect to all forms of compensation to be paid or provided to the Company’s executive officers, in consultation with the full Board of Directors where appropriate. See “Compensation“Compensation Discussion and Analysis.”Analysis”
later in this proxy statement for a detailed discussion. All Compensation Committee members are independent as defined by applicable NASDAQ Marketplace Rules and listing standards. The Compensation Committee retains its own independent advisor to assist in committee matters and the Compensation Committee has the authority to hire and terminate this advisor at its discretion.
Compensation Committee Interlocks and Insider Participation
None of the Company’s executive officers serve on the board of directors or compensation committee of a company that has an executive officer that serves on our Board of Directors or the Compensation Committee.
In setting compensation, our Compensation Committee considers the risks to our stockholders, and the Company as a whole, arising out of our compensation programs. The Company’s management team has assessed the risk profile of our compensation programs. Their review considered risk-determining characteristics of the overall structure and individual components of our Company-wide compensation program, including our base salaries, cash incentive plans and equity plans. The management team provided its findings to the
Board of DirectorsCompensation Committee for review and consideration. Following this ongoing assessment, the
Board of DirectorsCompensation Committee concurred with management’s conclusions that the Company’s compensation policies were not reasonably likely to have a material adverse effect on the Company. For example:
Balance of Compensation: Across the Company, individual elements of our compensation program include base salaries, incentive compensation, and for certain of our employees, equity-based awards. By providing a mix of different elements of compensation that reward both short-term and long-term performance and that focus on varying performance metrics, the Company’s compensation programs as a whole provide a balanced approach to incentivizing and retaining employees, without placing an inappropriate emphasis on any particular form of compensation.
Objective Company Results andPre-established Performance Measures Dictate Annual Incentives: Under the Company’s cash incentive plans, payments are subject to the satisfaction of specific annual performance targets established by our Board of Directors.the Compensation Committee. These performance targets are directly and specifically tied to revenue and operating income performance for the Company and/or divisions for the applicable fiscal year. Payments are made based on actual achievement of Company performance goals, and not estimated performance.
Use of Long-Term Incentive Compensation: Equity-based long-term incentive compensation that vests over a period of years is a key component of total compensation of our executive employees. This vesting period encourages our executives to focus on sustaining the Company’s long-term performance. These grants are also made annually, so executives always have unvested awards that could decrease significantly in value if our business is not managed for the long-term. In addition, since 2015, a significant portion of equity awards granted to our executives includes performance-based vesting. These awards, for which vesting is based upon either our total stockholdershareholder return relative to15
the component stocks of the S&P 500 Index or S&P 400 Index, or upon the achievement of specific financial objectives by the Company, further align the compensation of our executives with the long-term interests of our stockholders.
Internal Processes Further Limit Risk: The Company has in place additional processes to limit risk to the Company from our compensation programs. Specifically, payroll programs and financial results upon which incentive compensation payments are based are subject to regular review and audit, and our human resources executives meet periodically with our internal audit personnel to review various controls in place
22 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
with respect to our compensation programs, including for our executives. In addition, the Company engages an external compensation consulting firm for design and review of our compensation programs, as well as external legal counsel to assist with the periodic review of our compensation plans to ensure compliance with applicable laws and regulations.
Nominating and Corporate Governance Committee
The Board of Directors has a standing Nominating and Corporate Governance Committee (“Nominating and Governance Committee”Committee”), comprised of directors Johansson, LloydDalton, Janow, and Nersesian.Lloyd. Director JohanssonJanow serves as committee chairman. chair. The Nominating and Governance Committee met 2 times during the 2020 fiscal year.
The Nominating and Governance Committee is governed by a charter that is posted on the Company’s website athttp://investor.trimble.com/corporate-governance.cfmcorporate-governance. The purpose of the Nominating and Governance Committee is to recommend to the Board of Directors individuals qualified to serve as directors of the Company, and on committees, and to advise the Board of Directors with respect to composition, procedures and committees. Additionally, the Nominating and Governance Committee develops and recommends to the Board of Directors corporate governance principles applicable to the Company, and oversees the implementation of these principals. The Nominating and Governance Committee met 2 times during the 2017 fiscal year. The Nominating and Governance Committee will consider director candidates recommended by stockholders. In considering candidates submitted by stockholders, the Nominating and Governance Committee will take into consideration the needs of the Board of Directors and the qualifications of the candidate. To have a candidate be considered by the Nominating and Governance Committee, a stockholder must submit the recommendation in writing and the recommendation must include the following information and otherwise comply with Section 6 of Article II of our Bylaws:
•The name of the stockholder and evidence of the stockholder’s ownership of Company shares, including the number of shares owned and the length of time of ownership, and information regarding all shares of stock of the Company owned by such stockholder’sstockholder's affiliates or associates;
•The stockholder’sstockholder's representation that he or she intends to appear in person or by proxy at the Annual Meeting to nominate the persons named in its notice;
•The name, age, business address and residence address of the candidate;
•The principal occupation or employment of the candidate, the candidate’s resume or a listing of his or her qualifications to be a director of the Company, and information regarding all shares of stock of the Company, which are owned by the candidate or his or her affiliates or associates;
•The candidate’scandidate's written representation and agreement that, if elected as a director of the Company, such person has not given any commitment or assurance to any person or entity as to how such person would act or vote on any issue or question and will not enter into any undisclosed agreement with any person or entity other than the Company with respect to any director or indirect compensation in connection with service or action as a director of the Company;
•The candidate’s consent to be named as a director if selected by the Nominating and Governance Committee and nominated by the Board of Directors; and
•An undertaking by both the nominating stockholder and the candidate to furnish promptly such other information as the Company may reasonably request.
The stockholder recommendation and information described above must be sent to the
Committee ChairmanNominating and Corporate Governance Committee's Chair in care of the Corporate Secretary at Trimble Inc., 935 Stewart Drive, Sunnyvale, California 94085 and must be received by the Corporate Secretary not earlier than January
1, 201912, 2022 and not later than
January 31, 2019,February 11, 2022, except if the annual meeting for
20192022 is called for a date earlier than April
6, 201917, 2022 or later than
May 26, 2019,June 6, 2022, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting for
20192022 is mailed or the date the Company announces the date of the annual meeting for
2019,2022, whichever occurs first.
16
The Nominating and Governance Committee believes that the minimum qualifications for serving as a director of the Company are that a nominee demonstrate possession of such knowledge, experience, skills, expertise, international background, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, potential conflicts of interest, and diversity, so as to enhance the Board of Directors’ ability to manage and direct the affairs and business of the Company, including, when applicable, to
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 23
enhance the ability of committees of the Board of Directors to fulfill their duties and/or to satisfy any independence requirements imposed by law, regulation or NASDAQ listing requirement.
The Nominating and Governance Committee identifies potential nominees by asking current directors and executive officers to notify the Nominating and Governance Committee if they become aware of persons, meeting the criteria described above, who have had a change in circumstances that might make them available to serve on the Board of Directors. The Nominating and Governance Committee also, from time to time, may engage firms that specialize in identifying director candidates and pay any corresponding fees for such services. As described above, the Nominating and Governance Committee will also consider candidates recommended by stockholders. In 2020, Mr. Dalton was identified as a candidate by the Nominating and Governance Committee based upon his qualifications described under
Item 1 – Election of Directors, above. Once a person has been identified by the Nominating and Governance Committee as a potential candidate, the
Nominating and Governance Committee may collect and review publicly available information regarding the candidate to assess whether the candidate should be considered further. If the Nominating and Governance Committee determines that the candidate warrants further consideration, the chairman or another member of the
Nominating and Governance Committee contacts the candidate. Generally, if the person expresses a willingness to be considered and to serve on the Board of Directors, the Nominating and Governance Committee requests information from the candidate, reviews the candidate’s accomplishments and qualifications, including in light of any other candidates that the Nominating and Governance Committee might be considering, and conducts one or more interviews with the candidate. In certain instances,
Nominating and Governance Committee members may contact one or more references provided by the candidate or may contact other members of the business community or other persons that may have greater first-hand knowledge of the candidate’s accomplishments. The Nominating and Governance Committee’s evaluation process does not vary based on whether or not a candidate is recommended by a stockholder.
17
24 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
NON-EMPLOYEE DIRECTOR COMPENSATION
Ournon-employee directors (“Outside Directors”) receive compensation according to the terms of the Board of Directors Compensation Policy (“Board Compensation Policy”). The description of the Board Compensation Policy below is qualified in its entirety by the text of the Board Compensation Policy, which was last amended August 24, 2020 and was filed as exhibitExhibit 10.1 to the Company’s CurrentCompany's Report on Form8-K 10-Q filed on May 11, 2015.The current Board Compensation Policy was adopted on May 7, 2015. November 6, 2020.
Under the
current Board Compensation Policy, each Outside Director receives:
•an annual cash retainer of $60,000, payable on a quarterly basis, for theeach one-year period starting July 1 and ending June 3030; and
•upon election or re-election at the annual meeting of each year; andstockholders, a restricted stock unit (“RSU”) award for that number of shares of the Company’s common stock determined by dividing the target dollar amount of $277,000 by the 20-day average of the Company’s closing stock price ending on the date of grant.
| • | | upon election orre-election at the annual meeting of stockholders, a restricted stock unit award (“RSU”) for that number of shares of the Company’s common stock determined by dividing the target dollar amount of $277,000 by the fair market value of a share of common stock on the date of grant. |
In addition, our Outside Directors are reimbursed for local travel expenses or paid a fixed travel allowance based on the distance to the meeting, and reimbursed for other necessary business expenses incurred in the performance of their services as directors of the Company. Our Outside Directors are also eligible to participate in the Company’s
Non-Qualified Deferred Compensation Plan.
The RSU grantsawards vest in full after one year. If an Outside Director is appointed or elected to the Board of Directors at a time other than the annual meeting, the initial RSU grantaward will bepro-rated prorated to account for the number of months that have already elapsed since the last annual meeting. If an Outside Director resigns or voluntarily terminates service as a member of the Board of Directors, any unvested RSU grantaward shall vest at such time on a pro rata basis based upon the number of months of service since the last annual meeting of stockholders divided by twelve. stockholders.
The target dollar amount for determining the number of RSU shares may be revised based upon appropriate compensation benchmarks presented to and approved by the Compensation Committee and the Board of Directors.
In 2017, The2020, the Compensation Committee, with the assistance of its external compensation consultant, performed a review of the Board Compensation Policy with benchmarking against peer group companies and determined, with concurrence from the Board of Directors, not to amend the policy.
Non-Employee Director Compensation Table
Except as noted below, the
The table below shows the compensation earned by each of the Outside DirectorsDirector in the fiscal year ending December 29, 2017. Mr. Wibergh was appointed afterended January 1, 2021. In March 2020, upon considering the enduncertainty and adverse global business impacts of fiscal 2017 and so is not includedthe COVID-19 pandemic, the Board implemented a temporary reduction of 50% of the annual cash fees payable to Outside Directors, although later in the table. | | | | | | | | | | | | |
| Director Compensation for the 2017 Fiscal Year (1) | |
| Name | | Fees Earned or
Paid in Cash (2) | | | Stock
Awards (3) | | | Total | |
Börje Ekholm (4) | | | $30,000 | | | | $— | | | | $30,000 | |
Kaigham (Ken) Gabriel | | | $60,000 | | | | $277,003 | | | | $337,003 | |
Merit E. Janow | | | $60,000 | | | | $277,003 | | | | $337,003 | |
Ulf J. Johansson | | | $60,000 | | | | $277,003 | | | | $337,003 | |
Meaghan Lloyd | | | $60,000 | | | | $277,003 | | | | $337,003 | |
Ronald S. Nersesian | | | $60,000 | | | | $277,003 | | | | $337,003 | |
Mark S. Peek | | | $60,000 | | | | $277,003 | | | | $337,003 | |
Nickolas W. Vande Steeg | | | $60,000 | | | | $277,003 | | | | $337,003 | |
|
year as the Company’s financial performance and outlook strengthened, the fee reductions were reversed and lost fees were repaid to the Outside Directors. Mr. Berglund and Mr. Painter are not Outside Directors and they receive no additional compensation for their service as directors. Their compensation from the Company is fully reflected in the “Summary Compensation Table” set forth later in this proxy statement. | | | | | | | | | | | | | | | | | | | Name | Fees Earned or Paid in Cash (1) ($) | Stock Awards (2)($) | Total($) | | James C. Dalton | 15,000 | | (3) | 184,667 | | (3) | 199,667 | | | Börje Ekholm | 60,000 | | | 392,371 | | (4) | 452,371 | | | Kaigham (Ken) Gabriel | 60,000 | | | 276,978 | | | 336,978 | | | Merit E. Janow | 60,000 | | | 276,978 | | | 336,978 | | | Meaghan Lloyd | 60,000 | | | 276,978 | | | 336,978 | | | Sandra MacQuillan | 60,000 | | | 276,978 | | | 336,978 | | | Ronald S. Nersesian | 60,000 | | | 276,978 | | | 336,978 | | | Mark S. Peek | 60,000 | | | 276,978 | | | 336,978 | | | Johan Wibergh | 60,000 | | | 276,978 | | | 336,978 | |
(1) Mr. Berglund, the Company’s president and chief executive officer, receives no additional compensation for his service on the Board of Directors. Mr. Berglund’s compensation for service as president and chief executive officer is reported in the Summary Compensation Table and described in the Compensation Discussion and Analysis.(2) For each Outside Director, the fees shown in this column represent a cash retainer, paid quarterly.
(3) Each Outside Director in the table was granted 7,686 RSUs of the Company’s common stock in connection with such director’sre-election or initial election at the 2017 annual meeting of stockholders (which excluded Mr. Ekholm), in accordance with the current Board Compensation Policy. The amounts in these columns represent the grant date fair value of the restricted stock unit awards, calculated pursuant to FASB ASC Topic 718. The grant date fair value for the time-based RSUs is estimated using the closing price of our common stock on the date of grant.
(4) Mr. Ekholm retired as a director of the Company on May 2, 2017.
|
18
The following table showsamounts in this column represent a cash retainer, paid quarterly. Amounts shown may include amounts earned during the numberfiscal year but paid after fiscal year end.
(2) The amounts in this column represent the grant date fair value of sharesRSU awards granted to each director re-elected at the 2020 annual meeting of stockholders. The grant date fair value, calculated pursuant to Topic 718 of the Company’s Financial Accounting Standard Board’s Accounting Standards Codification, was estimated based on the closing price of our
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 25
common stock subject to on the date of grant. At fiscal year end, Mr. Dalton had 3,778 outstanding unvested RSUs, and unexercised option awards andeach other Outside Director listed in the number of shares subject to table had 6,511 outstanding unvested RSUs held by each.
(3) Mr. Dalton, who became a member of the OutsideBoard of Directors effective October 1, 2020, received cash Board fees for one quarter of 2020, and received a grant of RSUs at the time of his appointment.
(4) Mr. Ekholm received a grant of RSUs upon rejoining the Board of Directors effective January 4, 2020, as
well as at the time of
December 29, 2017. Mr. Wibergh was appointed afterhis reelection at the
end2020 Annual Meeting of
fiscal 2017 and so is not included in the table. | | | | | | | | |
| Director | | Number of Shares
Subject to Outstanding
Options as of 12/29/2017 | | | Number of Shares
Subject to Outstanding
RSUs as of 12/29/2017 | |
Börje Ekholm (1) | | | — | | | | — | |
Kaigham (Ken) Gabriel | | | — | | | | 7,686 | |
Merit E. Janow | | | 80,000 | | | | 7,686 | |
Ulf J. Johansson | | | 160,000 | | | | 7,686 | |
Meaghan Lloyd | | | — | | | | 7,686 | |
Ronald S. Nersesian | | | 25,000 | | | | 7,686 | |
Mark S. Peek | | | 89,481 | | | | 7,686 | |
Nickolas W. Vande Steeg | | | 80,000 | | | | 7,686 | |
|
(1) Mr. Ekholm completed his service as a director as of the date of the 2017 stockholder meeting on May 2, 2017.
|
Stockholders.
Non-Employee Director Stock Ownership Guidelines
In February 2013, we adopted a policy that requires each Outside Director to own a minimum number of shares of the Company’s common stock equal to a value of $200,000 to help align the personal interests of the directors with the interests of stockholders. The shares counted toward the ownership guidelines include shares owned directly and indirectly, provided there is an economic interest in the shares. New directors have five years from appointment to meet the minimum stock ownership level. All of the Outside Directors to whom the minimum ownership levels apply have met the requirement.
19
26 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
Executive Compensation
The executive compensation sectionsections of the proxy statement containscontain information about the Company’s compensation policies and practices, and the application of those policies and practices with respect to our Named Executive Officers. Under the SEC rules, the Company’s“Named Executive Officers”Officers” are the Company’s chief executive officer (“CEO”), chief financial officer (“CFO”), and the three other executive officers who received the highest amounts of compensation during the 2017 fiscal year.year, which for 2020 included our Executive Chairman of the Board and two of our Senior Vice Presidents. The following is a brief description of each part of ourthe Executive Compensation section:sections:
Compensation Discussion and Analysis. This section describes the elements of the Company’sour compensation policies and the application of those policies to our Named Executive Officers.
Compensation Committee Report. This section contains a report of the Compensation Committee of our Board of Directors regarding the Compensation Discussion and Analysis section of the proxy statement.section.
Executive Compensation Tables. This section describes the amounts or values and types of compensation earned by our Named Executive Officers.
Post-Employment Compensation. This section describes certain benefits and payments that our Named Executive Officers would be eligible for in the event of termination of employment, a change in control event, upon death,retirement, or indeath.
CEO Pay Ratio. This section discloses the casemedian of ourNon-Qualified Deferred Compensation Plan, payments that a Named Executive Officer may receive following terminationthe annual total compensation of employment.20
Compensation Discussionall our employees, the annual total compensation of our President and Analysis
CEO, and the ratio of these two amounts.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes the compensation program for our Named Executive Officers. During
2017,2020, these individuals were:
| • | | Steven W. Berglund, our President and Chief Executive Officer (our“CEO”) |
| • | | Robert Painter, our Senior Vice President and Chief Financial Officer (our“CFO”) |
James A. Kirkland,•Robert G. Painter, our President and CEO *
•David G. Barnes, our Senior Vice President General Counseland CFO *
•Steven W. Berglund, our Executive Chairman of the Board *
•James Langley, our Senior Vice President
•Darryl R. Matthews, our Senior Vice President
* Mr. Berglund, who previously served as the Company’s President and CEO, became Executive Chairman of the Board; Mr. Painter, who previously served as our Senior ViceCFO, became President and CEO; and Mr. Barnes became CFO; all effective on January 4, 2020.
This Compensation Discussion and Analysis describes the material elements of our executive compensation program during 2017.fiscal 2020. It also provides an overview of our executive compensation philosophy and objectives. Finally, it analyzes how and why the Compensation Committee of our Board of DirectorDirectors (the“Compensation Committee”Committee”) arrived at the specific compensation decisions for our executive officers, including our Named Executive Officers, for 2017,fiscal 2020, including the key factors that the Compensation Committee considered in determining their compensation.Executive Summary
Business Highlights
2017 Performance
2017 marked
Fiscal 2020
Fiscal 2020 was a year that presented many unique challenges. The global pandemic caused by COVID-19 impacted almost all of significant improvementthe markets that we serve. Despite the macroeconomic challenges, we achieved record levels of annualized recurring revenue, profit, operating cash flow and strong resultsearnings per share. We continued to advance our Connect and Scale 2025 strategy, investing in people, process and technology. We also continued to develop the competitive strength of our core businesses, while focusing on a healthy balance for Trimble. Financial highlightsour business portfolio with respect to end market exposure, geographic diversity and business model mix. Our strategy is to connect stakeholders across industry lifecycles and to transform customer workflows.
We continued to increase the level of software centricity of our offerings and revenue streams. We finished 2020 with software, services, and recurring revenues representing approximately 58 percent of total Company revenue.
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 27
We reached $1.3 billion in annualized recurring revenue at the end of the year, included:Revenue increased 12up 9 percent as comparedon a year-over-year basis. Additional financial highlights are presented in the “Executive Overview” section earlier in this proxy statement.
Long-Term Growth Strategy
At the outset of 2020, Mr. Painter, the Company’s newly appointed CEO, initiated Trimble Connect and Scale 2025, an ambitious long-term growth strategy. In support of this strategy, we also articulated a new framework, the Trimble Operating System, which calls on us to fiscal 2016 with significantly higher revenuecontinually focus on the three dimensions of
•breakout growth strategy,
•extraordinary people, and
•execution excellence.
These build on, and reinforce, each other to create a high-performing organization. Shortly into 2020, the COVID‑19 pandemic changed how we work and resulted in the vast majority of our employees working remotely. Under the leadership of our new CEO, CFO and executive team, though, Trimble’s people continued to inspire purpose and vision, engage to draw out the best from each other, and achieve meaningful results.
Response to COVID-19; Recent Developments
In response to the COVID-19 global pandemic, we endeavored to be thoughtful and cautious in our compensation actions. After considering the uncertainty and adverse global business impacts of the COVID-19 pandemic, the Company determined in March 2020 to proactively implement a temporary reduction in the base salaries of most of its employees, including a reduction of up to 50% for its executive officers. We also determined to suspend our Management Incentive Plan (“MIP”) for cash bonuses. In the second half of 2020, as our financial performance and outlook strengthened, the year.salary reductions were reversed, and lost wages repaid to employees, but due to the continuing uncertainties of the effects of the pandemic on the business, we determined to cancel the MIP for 2020.
Revenue grewFollowing the conclusion of 2020, in light of the strength of overall company performance and reflective of the loss of the MIP and other cash bonus programs in 2020, the Board of Directors approved, in February 2021, a discretionary cash bonus pool to reward all segments, bothnon-executive employees for their resilience and significant work during an unprecedented and challenging year. As discussed below under “Executive Compensation – Individual Compensation Elements – Annual Cash Bonuses,” the bonus pool generally resulted in employees receiving an amount approximately equal to 69% of their respective target bonus amounts under the United States and overseas.
GAAP operating income of $246 million was up 36 percent as compared to fiscal 2016. GAAP operating income asCompany’s cash bonus programs, or a percentage of revenuesalary for those not normally part of a bonus plan. However, in order to prioritize cash payments to our broader employee population, our executives, including our Named Executive Officers, did not participate in the bonus pool. Instead, for reasons similar to the adoption of the discretionary bonus program for non-executive employees, in February 2021, executives received special one-time RSU equity grants. The equity grant value of each executive’s RSU award was 9.3 percentsimilarly calculated based on an amount approximately equal to 69% of revenue as comparedthe executive’s applicable target bonus under the MIP. These one-time RSU grants, which were also granted in part to 7.7 percentretain our key executives during an uncertain, rapidly-changing environment, vest over a one-year period.
Overview of revenue in fiscal 2016.Executive Compensation
| • | | Non-GAAP operating income was $480 million in 2017, up 18 percent as compared to fiscal 2016.Non-GAAP operating income as a percentage of revenue was 18.1 percent as compared to 17.2 percent in 2016.See Appendix A to this Proxy Statement for a reconciliation of GAAP tonon-GAAP financial measures. |
Operating cash flow for fiscal 2017 was $412 million. During fiscal 2017, Trimble repurchased $288 million of its common stockCompensation Practices
We endeavor to maintain sound governance standards consistent with our executive compensation policies and spent $293 millionpractices, while also considering market best practices. The Compensation Committee evaluates our executive compensation program on acquisitions.
During 2017 Trimble’s stock price increased by 35 percenta regular basis to ensure that it is consistent with our short-term and is up 53 percent overlong-term goals given the past three years.
2017 was also a year of significant strategic development, with major product announcements, eight announced acquisitions, and significant channel development initiatives. Highlights included:
In construction, we released the latest generation of machine control automation, which represents another step towards complete machine autonomy. We also announced advances in severaldynamic nature of our building information modeling (BIM) solutionsbusiness and project management capabilities,the market in which are enabling new and more efficient work processes.
In agriculture, we acquired Müller Elektronik, which will be a central element in our variable rate application strategy, and we believe iscompete for executive talent.
28 Trimble | Proxy Statement for the next evolutionary step in using2021 Annual Meeting of Stockholders
The following summarizes the combination of position and agricultural data to provide tangible benefits in the field. We also continued the developmentkey features of our comprehensive agriculture software solution,executive compensation and related policies and practices:
| | | | | |
 What we do |  What we don’t do |
Use a pay-for-performance philosophy. The majority of our executive officers’ compensation is directly linked to corporate performance. A substantial portion of each executive officer’s target total direct compensation is dependent upon our stock price and/or total shareholder return. Maintain an independent compensation committee. The Compensation Committee consists solely of independent directors. Retain an independent compensation advisor. The Compensation Committee engages its own compensation advisor. This consultant performed no consulting or other services for us in 2020. Review executive compensation annually. The Compensation Committee conducts an annual review and approval of our compensation strategy, and an annual compensation-related risk profile review to ensure that our compensation programs do not encourage excessive or inappropriate risk-taking. Place compensation “at risk.” Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on our performance, as well as short-term cash and long-term equity incentives to align the interests of our executive officers and stockholders. Maintain a stock ownership policy. We maintain a stock ownership policy that requires our CEO, CFO, Named Executive Officers and other key executives to maintain a significant ownership level of our common stock. Maintain a compensation recovery (“clawback”) policy. In the event of a material restatement of our financial results, this policy allows for the recovery of certain compensation from our executive officers. Hold an annual stockholder advisory vote on executive compensation. We conduct an annual stockholder advisory vote on the compensation of our CEO and Named Executive Officers. | No executive retirement plans. We do not offer executive-only pension arrangements or retirement plans to our executive officers. No significant perquisites. We do not provide substantial perquisites or other personal benefits to our executive officers. No tax reimbursements. We do not provide any tax reimbursement payments (including “gross-ups”) on any benefits, other than related to standard relocation benefits. No special health or welfare benefits. Our executive officers participate in broad-based Company-sponsored health and welfare benefits programs on the same basis as our other full-time, salaried employees. No hedging or pledging of our equity securities. We prohibit our executive officers, the members of our Board of Directors and other employees from hedging or pledging our equity securities. No stock option re-pricing. Our employee equity plan does not permit options or stock appreciation rights to be repriced to a lower exercise or strike price without the approval of our stockholders. No single trigger on change in control. An executive must experience a termination of employment in order for change-in-control benefits to occur. |
Executive Compensation Philosophy
Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the expansion of the Vantage global distribution channel.following primary objectives:
In transportation, we continued the development of the company’s comprehensive set of mobile and enterprise solutions. Since the acquisition of PeopleNet and TMW Systems in prior years, a key focus has been to expand the solution sets we offer and to provide transportation companies with complete workflow functionality. During the year, we acquired10-4• Systems, a provider of advanced multimodal shipment visibility solutions, which enhances Trimble’s ability to help the transportation industry to align demand and capacity.
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In our geospatial business, we continued to innovate and introduce new products to help drive growth. We launched a new series of total stations intended to address developing markets, and we continued to bring innovative inertial technologies to georeferencing applications such as autonomy and mobile mapping.
Long-term performance
Trimble has an excellent record ofestablish compensation opportunities that are competitive, reward performance and creating stockholder value over an extended periodmaintain internal equity;
•attract, motivate and retain highly-talented executive officers by providing compensation opportunities that are competitive and reward for performance; and
•align the interests of time. Trimble’s compound average annual stockholder return has outperformedour executive officers with the S&P 500 Total Return index over eachinterests of our stockholders to drive the last 1, 2, 3, 10, 15 and 20 year periods ending 2017. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 1 year | | 2 years | | 3 years | | 5 years | | 10 years | | 15 years | | 20 years |
Trimble | | 34.9% | | 37.7% | | 15.3% | | 6.3% | | 10.4% | | 21.9% | | 12.8% |
S&P 500 (TR) | | 21.9% | | 16.8% | | 11.4% | | 15.8% | | 8.5% | | 9.9% | | 7.2% |
Trimble underperformed only in the 5 year period. In 2014 and 2015, our business was negatively impacted by weakness in our agriculture and geospatial businesses largely due to weakness in the agriculture market and the effectscreation of significant declines in the price of oil. Trimble’s stock price declined during that timeframe, along with many companies with meaningful exposure to those markets. In recent years, Trimble’s stock price has rebounded, driven by improved market conditions and management actions to increase growth and improve profitability.
Trimble’s significant outperformance over the 10, 15, and 20 year time horizons illustrates well thesustainable long-term outperformance through economic cycles. As shown in the graph below, Trimble has more than tripled the S&P 500 cumulative total return over the twenty-year time horizon.
2017value.
2020 Executive Compensation Highlights
Following are highlights regarding the compensation of our Named Executive Officers for
2017,2020, including key actions taken by the Compensation Committee and
by theour Board of Directors, in light of our overall operating environment and the results described
above: | • | | CEO Compensation: modest salary increase, with emphasis on performance-based pay. |
Ourabove.
•Leadership Transition: we began 2020 with a new CEO, a new role for our former CEO, and a new CFO
Rob Painter, who previously served as CFO, was appointed the Company’s new President and CEO effective January 4, 2020. Concurrently, Steve Berglund, who previously served as President and CEO since 1999, was appointed Executive Chairman of Trimble’s Board of Directors. David Barnes joined Trimble in December 2019 and replaced Mr. Painter as our CFO, effective January 4, 2020. In connection with these leadership transitions, the Compensation Committee approved the following executive compensation packages:
Mr. Painter as CEO.Mr. Painter’s original target compensation package as CEO, as established early in 2020, was made up of base pay, short-term cash incentive, and long-term equity incentive awards. This package reflected a discount to market median rates given Mr. Painter’s first-time appointment as CEO. As originally established, Mr. Painter’s target total compensation package was comprised of approximately 77% equity incentive awards, of which approximately 50% were to be performance-based equity incentive awards (excluding his promotional equity grants at the beginning of 2020).
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 29
Mr. Berglund as Executive Chairman. As Executive Chairman of the Board, Mr. Berglund continued to receive an annual base salary but was no longer eligible to participate in Trimble’s cash-bonus incentive plan. Mr. Berglund’s base salary was reduced significantly from his salary while CEO (from $1,035,000 to $800,000) given the change in his position. He received a 3% increasestock grant in base salarythe form of restricted stock units, in 2017, which waspart for his partnership role with Mr. Painter in the first increaseCEO transition and in part to retain Mr. Berglund for a period beyond the transition.
Mr. Barnes as CFO. Mr. Barnes received a compensation package made up of base pay, short-term cash incentive, and long-term equity incentive awards. This compensation package reflected a discount to market median rates, given his newly-hired position as CFO.
•Base Salary of Named Executive Officers: general pay was temporarily reduced but later restored; base salaries remained flat for our CEO since May 2014.the year
Due to the unprecedented economic uncertainty resulting from COVID-19 pandemic, and in an effort to preserve as many jobs as possible, in March 2020, the Company implemented general base pay decreases across a large portion of its employee base, including up to 50% reductions for executive officers. The pay decreases were temporary and as the economic outlook improved pay was restored later in the year. No changes were made to base salary levels during the year.
•Annual Cash Bonuses: management incentive cash bonus plan was canceled for 2020
Although the MIP design and targets for 2020 were approved by the Compensation Committee in February 2020, the target annual cash incentive opportunity (as a percentage of salary), nor inMIP was suspended before the target value of equity awards. As to long-term incentive equity awards, 75%rollout of the target value isplan to the plan participants and subsequently canceled, due to the COVID-19 pandemic.
•Long-Term Incentive Compensation: continued emphasis on performance-based pay, with changes in the form and mix of performance-based equity, which the Compensation Committee determined through peer group analysis is a greater weighting on performance-based compensation than is common among our peer companies. | • | | Base Salary of Other Named Executive Officers: general market increase to base pay. |
Our other Named Executive Officers received base salary increases of 3%, except for our CFO who receivedawards to address an increase of 11%. The increase for our CFO reflected an additional adjustment for the assumption of greater responsibilities associated with the CFO position and closer alignment of his compensation with the
22
unprecedented environment
market for CFO compensation. The remaining increases maintained alignment of our other NEOs with the market, and we believe they were appropriate given our improved business performance ending 2016 and moving into 2017.
| • | | Annual Cash Bonuses: higher incentive payments driven by better operating income results. |
The 2017 management incentive program (“MIP”) required an 8.5% increase in operating income for targetpay-out of cash bonuses. The Company achieved an 18.4% increase in operating income, and accordingly our Named Executive Officers received annual cash bonuses ranging from 155% to 250% of their target annual cash bonus opportunities, including an annual cash bonus for our CEO in the amount of $2,223,000, equal to 201% of his target annual cash bonus opportunity. 2017 bonus payments aligned with our strong 2017 business performance, which aligns to our pay for performance compensation program strategy.
| • | | Changes to the Management Incentive Plan for Cash Bonus: moved to annual scoring. |
We moved our MIP plan for cash bonuses for our CEO, Named Executive Officers and other key executives from a combination of quarterly and annual scoring to exclusively annual scoring and payment.
| • | | Long-Term Incentive Compensation: continued emphasis on performance-based pay. |
A substantialsignificant portion of our long-term incentive (“LTI”compensation program iscontinues to be in the form of performance-based restricted stock unit (“PRSU”PRSU”) awards, with the balance delivered in the form of time-basedtime‑based restricted stock unit (time-based“RSU”RSU”) awards. The PRSUs are measured partly against
◦In 2020, faced with the rapidly-changing environment of the COVID-19 pandemic, the Compensation Committee determined that the optimal form of PRSU awards for issuance to our relativeNamed Executive Officers were total shareholder return (TSR) as compared to(“TSR”)-based awards. These awards allowed for multi-year, relative performance measurement without the componentschallenge and uncertainty of the S&P 500 index, and partly against achievement of specific Trimblesetting long-term, absolute financial performance objectives. Approximately 50%targets in an unpredictable and unprecedented economic environment.
◦The balance of the 2017 target long-term incentive valueannual LTI equity awarded to our Named Executive Officers (or 75% in the case of our CEO)2020 was awarded in the form of PRSUs, which directly alignstime-based RSUs. This aligned with our goal of retaining our key executives and ensuring leadership stability during a time of extreme challenges and uncertainty. As a result of these factors, the percentage of LTI awards that were time-based as opposed to our pay for performanceperformance-based shifted slightly higher in 2020, based on target compensation strategy. | • | | Stock Ownership Guidelines: extended beyond CEO. |
Our stock ownership guidelines were extendedpackages (approximately 50%, compared to the CFO and other key executives.
| • | | Clawback Policy: newly implemented. |
We implemented a “claw back” policy for the potential forfeiture and return of incentive-based compensationapproximately 45% in the eventprior year). This mix of certain matters resulting inequity awards also reflected a material restatementrecognition, at the time of our financial results.
2017grant, that prior annual grants of financial‑based performance PRSUs could be significantly affected by the impact of COVID-19.
2020 Pay-for-Performance Philosophy
We believe our executive compensation program is competitive relative to the market and our peer group, and appropriately balances the goals of attracting, motivating, rewarding and retaining our executive officers with the goal of aligning their interests with those of our stockholders. To ensure this alignment, and to motivate and reward individual initiative and success, a substantial portion of our executive officers’ target annual total direct compensation opportunity is both performance-based and “at-risk.”
Due to the unprecedented and unique circumstances resulting from the global COVID-19 pandemic and faced with the uncertainty of its impact on the economy and our business, we adopted a cautious approach to compensation in 2020. In March 2020, we temporarily decreased annual salaries in an effort to prevent the need for widespread layoffs; we suspended our annual bonus programs and did not increase salaries; and we ultimately terminated our 2020 cash bonus programs including our 2020 MIP, given the unknown year-end outlook. As Trimble’s performance improved and resulted in better-than-anticipated results, we reinstated base
“at-risk.”30 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
salary levels for all employees by September 2020. We emphasizewere also able to repay foregone salaries to employees in December of 2020. Our general Pay-for-Performance philosophy still holds true; however, in 2020, we emphasized retention and performance-based compensation that appropriately rewardsbalanced the goals of incentivizing and rewarding our executive officers includingfor long-term performance with the need to ensure stable and strong leadership during a time of transition and unprecedented global economic uncertainty (percentages below are based on the grant date values as shown in the “Executive Compensation Tables” later in this proxy statement):
•First, approximately 40% (35% for Mr. Painter if you include his promotional grants at the beginning of the year, 100% for Mr. Berglund), of long-term equity incentives were granted through time-based RSUs that vest annually over a 3-year period. This vehicle was important to us to ensure retention of our key executives during a period of unprecedented uncertainty.
•Second, we granted TSR-based PRSU awards that reward our executives based on driving relative shareholder return. The PRSU awards generally comprised approximately 60% of the grant date value of LTI equity awards granted to our Named Executive Officers through two separate compensation elements:in 2020 (approximately 65% for Mr. Painter if you include his promotional grants at the beginning of the year; 0% for Mr. Berglund). First, our NamedSummary of 2020 Executive Officers participate in ourPay Mix
Our performance-based annual cash bonus plan which provides cash payments if Trimble produces financial results that meet or exceed specified objectives tied to our annual operating plan.
| • | | Second, we grant PRSU awards that reward our executives based on two components: (1) driving total shareholder return (TSR) relative to an established stock price index, and (2) achieving or exceeding Trimblepre-established revenue and profitability goals over a multi-year period. We believe having two discrete measurements in our long-term incentive (“LTI”) equity program creates an effective balance by aligning performance both to a broad market index with a TSR target and to our own absolute financial performance, which collectively aligns directly to stockholder interests. As noted above the PRSU awards comprise 50% of the value of LTI equity awards granted to our Named Executive Officers, or 75% in the case of our CEO. |
These performance based variable pay elements ensure that, each year, a substantial portion of our executive officers’ total compensation is variable in nature, with the amounts ultimately payable subject to variability above or below target levels commensurate with our actual performance.
These pay elements are tied to both Company and individual performance in a typical plan year. In making compensation decisions with respect to our CEO, the Compensation Committee considered many factors, including Mr. Painter’s leadership in implementing the Company’s strategy and new operating model, while navigating a period of unprecedented and unforeseen changes as a result of the ongoing COVID-19 pandemic.
The pay mix for our CEO and our other Named Executive Officers during
20172020 reflected
thisour “pay-for-performance”
design, with 70% of our CEO’s target total compensation delivered in the form of PRSUs and target23
design.
bonus, and an additional 19% in the form of time-based RSUs with multi-year vesting that directly align our CEO’s interests with those of stockholders.
| | | | | |
 | Non-CEO Named Executive Officers (averaged) |
|  |
Total target compensation
Compensation in the pie charts above representrepresents the sum of actual 20172020 base salary the target annual cash incentive under the MIP, and the grant date target value of time-based RSUs and PRSUsequity granted during the year. The grant date target values of the PRSUs reflect the stock price of the shares on the grant date and,year, as set forth in the case of relative TSR PRSUs, differ from“Executive Compensation Tables” later in this proxy statement. As the Summary Compensation Table reported value below.MIP was cancelled for 2020, no amounts are included for cash bonus incentive.
We believe that this design provides balanced incentives for our
executive officersNamed Executive Officers to drive financial performance and long-term growth. To ensure consistency with our compensation philosophy, the Compensation Committee regularly evaluates the relationship between the reported values of the equity awards granted to our executive officers, the amount of realizable compensation from such awards in subsequent years and our total shareholder return over this period.
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 31
Summary of 2020 CEO Total Compensation Package
Our executive compensation programs are periodically refined so that they support Trimble’s business goals of both near- and long-term profitable growth. As shownillustrated below, our Compensation Committee determined to keep base pay, target bonus, and target LTI equityapproximately 90% of the original targeted total direct compensation for our Chief Executive Officer relatively flat from 2015 through 2017. Changes included a 3% base salary increaseCEO in 2017, while target LTI2020 was “at risk,” consisting of approximately 77% equity value was between $6.1 million and $6.2 million each year during this period. The target bonus, expressed as a percent13% incentive cash. Only 10% of his compensation, in the form of base salary, was unchangedfixed, ensuring a strong link between his targeted total cash compensation and business results.
| | | | | | | | | | | |
| Chief Executive Officer Target Total Compensation |
| Annual Base Salary Rate (1) | Target Bonus (2) | Target LTI Value (3) | Target Total Compensation |
| $850,000 | $1,062,500 | $6,200,000 | $ | 8,112,500 | |
(1) Represents the base salary rate effective as of January 2020.
(2) Represents bonus paid at
125% during all three years.Chief Executive Officer Target Total Compensation
| | | | | | | | | | | | | | | | | | | | |
Fiscal
Year | | Annual Base
Salary Rate (1) | | Target Bonus (2) | | Target LTI Value (3) | | Target Total
Compensation |
2017 | | $886,000 | | $1,107,500 | | $6,116,173 | | $8,109,673 |
2016 | | $860,000 | | $1,075,000 | | $6,081,152 | | $8,016,152 |
2015 | | $860,000 | | $1,075,000 | | $6,172,158 | | $8,107,158 |
| (1) | Represents the base salary rate approved as of May of each fiscal year. |
| (2) | Represents bonus paid at 100% achievement of MIP targets generally approved by the Board of Directors as of May of each fiscal year. Actual bonus paid depends on performance against targets, and ranges from 0% if minimum thresholds are not achieved up to 300% of target if there is substantial overachievement relative to target. Actual bonuses paid were $2,222,837 in 2017, $333,901 in 2016 and $173,654 in 2015. |
| (3) | Reflects the grant date target value of equity. In the case of Relative TSR PRSU awards, this value is different than the grant values provided in the Summary Compensation Table, which represent the accounting value using a Monte Carlo analysis as required by FASB ASC Topic 718. |
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The Compensation Committee’s decision to keep200% of target if there is substantial overachievement relative to target. However, the overall structure of pay generally flat2020 MIP was madecancelled mid-year and no amounts were paid to Mr. Painter with consideration given to:
the heavy weighting on performance-based compensation in our CEO’s target pay program, including 75% of the target long-term incentive value awarded in the form of PRSUs;
market data from companies included in our compensation peer group;
our weaker financial performance during 2014 and 2015; and
our CEO’s strong long-term track record at increasing stockholder value;
The Compensation Committee’s decision regarding CEO compensation also recognized the role of our annual incentive plan in aligning Trimble performance and actual total compensation. As shown in the table below, the increase in actual compensation during 2017 was attributable primarilyrespect to the increased annual cash incentive bonus payment, which was a function of our demonstrably improved operating performance and correlated with our strong stockholder return during the year. In 2015 and 2016, CEO compensation reflected weaker financial performance in the form of bonus payments that were significantly lower than the target bonuses established for those years.
Total compensation in the chart above represent the sum of base salary at the annual rate, the actual annual cash incentive earned under the MIP (which differs from the target bonus amount), and2020 MIP.
(3) Reflects the grant date target value of time-based RSUs and PRSUs granted during each fiscal year. The target LTI value of equity depicted in the chart represents the value of the awarded equity incentivesawards based on the closingstock price of our Common Stock on the date of grant, date. In the case of Relative TSR PRSU awards, this valuewhich is different thanfrom the grant values provided in the “Summary Compensation Table,Table”, which represent the accounting value using a Monte Carlo analysis as required by FASB ASC Topic 718.Executive These amounts exclude the one-time promotional grants (RSU award and option award) issued in connection with promotion from CFO to CEO effective January 4, 2020. Those awards are included in the
“Summary Compensation Policies and PracticesWe endeavor to maintain sound governance standards consistentTable”
set forth later in this proxy statement. Mr. Painter’s original compensation package for fiscal 2020, as shown in the table above consisted of annual base salary, short-term incentive pay in the form of an annual bonus with our executive compensation policies and practices, while also considering market best practices. The Compensation Committee evaluates our executive compensation program on a regular basis to ensure that it is consistent with our short-termtarget of 125% of base salary, and long-term goals givenincentive awards made up of both time-based RSUs and PRSUs. In connection with Mr. Painter's appointment to CEO, Mr. Painter was granted a promotion award of $1,000,000 in RSUs, 100% of which will vest on the dynamic naturethird anniversary of the grant date, and was granted performance-based options to purchase shares of common stock of the Company with a grant date value of $3,000,000, calculated using Trimble’s normal stock option valuation methodology for performance awards, which is a Monte Carlo analysis as required by FASB ASC Topic 718. These options vest after three years and upon attainment of specific stock price threshold hurdles, which were met as of the end of fiscal year 2020, such that the award is subject only to time-based vesting as of the end of fiscal 2020.
We believe that the compensation of our
CEO and other executives should be largely influenced by our overall business and
the market in which we compete for executive talent.25
The following summarizes the key featuresfinancial performance and total shareholder return, and this combination of our executive compensationelements yields a balanced focus on short-term goals and related policies and practices:
| | |
WHAT WE DO | | WHAT WE DON’T DO |
☑ Use aPay-for-Performance Philosophy. The majority of our executive officers’ compensation is directly linked to corporate performance. A substantial portion of each executive officer’s target total is direct compensation dependent upon our stock price and/or total stockholder return.
☑ Maintain an Independent Compensation Committee. The Compensation Committee consists solely of independent directors.
☑ Retain an Independent Compensation Advisor. The Compensation Committee engages its own compensation advisor. This consultant performed no consulting or other services for us in 2017.
☑ Review Executive Compensation Annually. The Compensation Committee conducts an annual review and approval of our compensation strategy, and an annual compensation-related risk profile review to ensure that our compensation programs do not encourage excessive or inappropriate risk-taking.
☑ Place CompensationAt-Risk. Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on our performance, as well as short-term cash and long-term equity incentives to align the interests of our executive officers and stockholders.
☑ Maintain aStock Ownership Policy. We maintain a stock ownership policy that requires our CEO, CFO, Named Executive Officers and other key executives to maintain a minimum ownership level of our common stock.
☑ Implemented aCompensation Recovery (“Clawback”) Policy. In the event of a material restatement of our financial results, our executive officers are subject to this policy.
☑ Hold anAnnual Stockholder Advisory Vote on Named Executive Officer Compensation. We conduct an annual stockholder advisory vote on the compensation of our CEO and Named Executive Officers.
| | ☒ No Executive Retirement Plans. We do not offer pension arrangements or retirement plans to our executive officers, although in February 2017, we introduced the Trimble Age & Service Equity Vesting Program for certain eligible executive officers.
☒ No SignificantPerquisites. We do not provide substantial perquisites or other personal benefits to our executive officers.
☒ No Tax Reimbursements. We do not provide any tax reimbursement payments (including“gross-ups”) on any benefits, other than related to standard relocation benefits.
☒ No Special Welfare or Health Benefits. Our executive officers participate in broad-based company-sponsored health and welfare benefits programs on the same basis as our other full-time, salaried employees.
☒ No Hedging or Pledging of Our Equity Securities. We prohibit our executive officers, the members of our Board of Directors and other employees from hedging or pledging our equity securities.
☒ No Stock OptionRe-pricing. Our employee equity plan does not permit options or stock appreciation rights to be repriced to a lower exercise or strike price without the approval of our stockholders.
|
long-term sustainable performance that aligns with stockholder interests.
Results of 2020 Say on Pay Vote
At our
20172020 Annual Meeting of Stockholders, we conducted a
non-binding stockholder advisory vote on the compensation of our named executive officers (commonly known as a “Say on Pay” vote). Our stockholders approved the Say on Pay proposal with
79.8%95.5% of the votes cast in favor of the proposal.
This was below our historical level of We believe this reflects stockholder support and during the year we became aware of concerns regarding our compensation program. As part of our ongoing stockholder engagement efforts, we contacted stockholders representing ownership of a majority of our common stock to discuss our compensation policies and practices.
Our stockholders were generally supportive ofconfidence in our approach to pay, the decisions made by our Compensation Committee in response to a period of weaker operating performance during 2016, and features of our programs that align Trimble with best practices in incentive plan design and compensation governance. Our engagement efforts highlighted several questions regardingmanaging our executive compensation program, including:
the presence of1-,2- and3-year scoring windows onprograms. Our alignment with stockholder interests continues to be supported by our relative TSR performance share plan;
Trimble’s lack of a clawback policy; and
the use of quarterly performance periods inpay-for-performance philosophy that drives our annual incentive plan.
As the Compensation Committee has reviewed our executive compensation policies and practices since the 2017 Say on Pay vote, it has been mindful of the level of support our stockholders have expressedplan designs for our approach to executive compensation. variable bonus and equity plans.
The Compensation Committee determined to maintain the same generalmaintained a measured and balanced approach to our compensation program during 2017. This includes2020 and applied our pay-for-performance philosophy to the unique challenges of the COVID-19 pandemic and resulting global impacts. Although the general mix of financial and relative TSR performance shares andcompensation elements remained consistent at the focusoutset of 2020, the MIP on operating income as the primary funding metric. The Compensation Committee also maintained the26
design of the relative TSR performance shares, believing that multiple performance periods reliably measure our performance while mitigating the risk that the full value of an award will be influenced by a short-term fluctuation in our stock price relative to a larger more stable index. The shorter performance period is also balancedrapidly changing circumstances caused by the global pandemic required us to adapt to unprecedented uncertainty, as discussed throughout these 3-year vesting time horizon on all shares earned.
Based in part on input from stockholders, the2020 Executive Compensation Committee determined to approve a clawback policy in 2017 that is applicable to both cash and equity compensation, and eliminated quarterly performance periods in the MIP in place for fiscal 2017.
Highlights.
We value the opinions of our stockholders and will continue to consider the outcome of future Say on Pay votes, as well as feedback received throughout the year, when making compensation decisions for our executive officers.
At our 2017
32 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders we also conducted a
non-binding
stockholder advisory vote on the frequency of future Say on Pay votes (commonly known as a “Say When on Pay” vote). Our stockholders expressed a preference for holding future Say on Pay votes on an annual, rather than a biennial or triennial, basis. In recognition of this preference and other factors considered, our Board of Directors determined that we should continue to hold annual Say on Pay votes.Executive Compensation Philosophy
Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives:
establish compensation opportunities that are competitive, reward performance and maintain internal equity;
attract, motivate and retain highly-talented executive officers by providing compensation opportunities that are competitive and reward for performance; and
align the interests of our executive officers with the interests of our stockholders to drive the creation of sustainable long-term value.
Executive Compensation Program Design
Our current practice is to combine a mixture of compensation elements that balance achievement of our short-term goals with our long-term performance. We provide short-term incentive compensation opportunities in the form of an annual cash bonus plan, which focuses on our yearly operating results, and we provide long-term incentive compensation opportunities in the form of equity awards, including:
PRSU awards that are earned only if we deliver meaningful results over a multi-year period relative to the performance of the S&P 500 over that same time period;
PRSU awards that are earned only if we achieve targeted levels of operating income and revenue growth; and
time-based RSU awards that derive additional value from increases in our stock price over time and that are subject to multi-year vesting requirements.
We do not have a specific policy on the percentage allocation between short-term and long-term compensation elements.
We also believe that the compensation of our CEO should be primarily influenced by our overall financial performance and total stockholder return. The Compensation Committee sets the compensation of our CEO within a range of compensation provided to similarly-situated chief executive officers of the companies in our compensation peer group, as adjusted by its consideration of the particular factors influencing our performance.
Governance of Executive Compensation Program
Role of the Compensation Committee
The Compensation Committee discharges many of the responsibilities of our Board of Directors relating to the compensation of our executive officers, including our Named Executive Officers, and the
non-employee members of our Board of
Directors.TheDirectors. The Compensation Committee has overall responsibility for overseeing our compensation and benefits policies generally, and overseeing and evaluating the compensation plans, policies, and practices applicable to our CEO and our other executive officers.
Historically, the Compensation Committee has made recommendations to our27
full Board of Directors regarding executive compensation, including the compensation of our CEO and our other executive officers, and our full Board of Directors (excluding our CEO) made all final decisions regarding executive compensation. As of November 2017, theThe Compensation Committee itself sets compensation for and makes equity awards to our CEO and our other executive officers. The Compensation Committee retains a compensation consultant (described below) to provide support to the Compensation Committee in its review and assessment of our executive compensation program.
Compensation-Setting Process
The Compensation Committee determines the target total direct compensation opportunities for our executive officers, including our Named Executive Officers. The Compensation Committee does not use a single method or measure in
developingmaking its
recommendations,determinations, nor does it establish specific targets for the total direct compensation opportunities of our executive officers.
When
formulating its recommendations fordetermining the amount of
each compensation element and approving each compensation element and the target total direct compensation opportunity for our executive officers, the Compensation Committee considered the following factors:
•our performance against the financial and operational objectives established by the Compensation Committee and our Board of Directors;
•each individual executive officer’s skills, experience and qualifications relative to other similarly-situated executives at the companies in our compensation peer group;
•the scope of each executive officer’s role compared to other similarly-situated executives at the companies in our compensation peer group;
•the performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function and work as part of a team, all of which reflect our core values;
•compensation consistency among our executive officers;
•our financial performance relative to our peers;
•the compensation practices of our compensation peer group and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels; and
•the recommendations provided by our CEO with respect to the compensation of our other executive officers.
These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each executive officer. No single factor is determinative in setting pay levels, nor was the impact of any factor on the determination of pay levels quantifiable.
Compensation Review Cycle
The Compensation Committee reviews the base salary levels, annual cash bonus opportunities and long-term incentive compensation opportunities of our executive officers, including our Named Executive Officers, at the beginning of each fiscal year. Any changes in base salary are generally effective in May of each year. We grant
performance basedtime-based and performance-based equity in May
each year, though in 2020 50% of the total performance-based equity for executives was granted later in October due to the global pandemic and
time-based RSUs in November of each year.uncertain economic outlook. Our compensation peer group is reviewed and finalized by the Compensation Committee during the
fourth quartersecond half of the year, before the upcoming fiscal year. Other adjustments to executive pay are made during the year as circumstances warrant.
Role of Chief Executive Officer
In discharging its responsibilities, the Compensation Committee works with members of our management, including our CEO. Our management assists the Compensation Committee by providing information on corporate and individual performance, market compensation data, and management’s perspective on compensation matters. The Compensation Committee solicits and reviews our CEO’s recommendations and proposals with respect to adjustments to annual cash compensation, long-term incentive compensation opportunities, program
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 33
structures, and other compensation-related matters for our executive officers (other than with respect to his own compensation).
The Compensation Committee reviews and discusses these recommendations and proposals with our CEO and considers them as one factor in
formulating the recommendations fordetermining the compensation for our executive officers, including our other Named Executive Officers (other than our CEO). Our CEO recuses himself from all discussions
and recommendations regarding his own compensation.
28
Role of Compensation Consultant
The Compensation Committee engages an external compensation consultant to assist in providing information, analysis, and other advice relating to our executive compensation program and the decisions resulting from its annual executive compensation review. For 2017,2020, the Compensation Committee engaged Compensia, Inc.,Exequity LLP, a nationalnationally recognized compensation consulting firm (“Compensia”Exequity”), as its compensation consultant to advise on executive compensation matters, including competitive market pay practices for senior executives, and with the data analysis and selection of the compensation peer group. For 2017,2020, the scope of Compensia’sExequity’s engagement included: •the review and analysis of the compensation for our executive officers, including our Named Executive Officers;
•supporting the design and implementation of changes to the executive long termlong-term incentive strategy;
reviewing and providing input on the Compensation Discussion and Analysis section of our proxy statement for our 2018 Annual Meeting of Stockholders;
•providing analysis of market practice and support in the consideration and finalization of changes to thechange-in-control and severance arrangements for our Named Executive Officers and certain other executive officers;
•supporting finalization of our compensation peer group; and
| • | | support on otherad hoc matters throughout the year. |
•support on other ad hoc matters throughout the year.
The terms of
Compensia’sExequity’s engagement include reporting directly to the Compensation Committee and to the Compensation Committee Chairman.
CompensiaExequity also coordinates with our management for data collection and job matching for our executive officers. In
2017, Compensia2020, Exequity did not provide any other services to us. The Compensation Committee has evaluated
Compensia’sExequity’s independence pursuant to the listing standards of the NASDAQ and the relevant SEC rules and has determined that no conflict of interest has arisen as a result of the work performed by
Compensia.Exequity in 2020.
For purposes of comparing our executive compensation against the competitive market, the Compensation Committee reviews and considers the compensation levels and practices of a group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, geographical location and number of employees. Our selection of peers also accounts for industry, targeting companies that are competitors and those with which we compete for talent. Within the technology sector, our peer group includes a relevant profile of companies across a range of technology
sub-industries in order to match the diversity of our businesses. Specific Global Industry Classification Standard (GICS)
sub-industries represented by companies included in our peer group include communications equipment, applications software, systems software, and electronic equipment and instruments. We compete for executive talent across many lines of business and therefore this diversity in our peer group keeps us informed and better aligned with pay practices across multiple relevant
sub-industries.In developing the compensation peer group for 2017,2020, the following targetgeneral screening criteria were observedutilized to identify comparable companies:
•competitors and other businesses in identifying comparable companies:related industries; similar industry and competitive market for talent;
within a range•revenue of approximately 0.5x to 2.0x of our revenue; and
within •a rangemarket capitalization of approximately 0.3x to 3.0x of our market capitalization.
The Compensation Committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and that of the companies in the peer group.
29
34 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
At the beginning of
2017,2020, the Compensation Committee used the following compensation peer group to assist with the determination of compensation for our executive officers.
TheIn August 2020, the Compensation Committee approved
maintaining this peer group
in November 2016 following a review that included input from its compensation consultant.
| | | | | | | | |
ARRIS GroupAutodesk | | Cadence DesignFLIR Systems | PTC |
| ANSYS | Keysight Technologies | Juniper Networks | Roper Technologies |
Autodesk | | CitrixCadence Design Systems | | Motorola Solutions | Keysight Technologies | Synopsys |
Brocade Communications * | | FLIRCitrix Systems | | Nuance Communications | Motorola Solutions | Teledyne Technologies |
CA TechnologiesCommscope | | Juniper Networks | | PTC | Nuance Communications | Zebra Technologies |
| * | In November 2017, the Compensation Committee approved the removal of Brocade Communications due to their recent acquisition by Broadcom and the addition of Commscope Holding. This change did not have an impact on our executive compensation decisions for 2017. |
The Compensation Committee uses data drawn from our compensation peer group, as well as data from the Radford Global Technology executive compensation survey, to evaluate the competitive market when
formulating its recommendation to the Board of Directors fordetermining the total direct compensation packages for our executive officers, including base salary, target annual cash bonus opportunities and long-term incentive compensation opportunities.
In addition, subsets of the Radford Global Technology executive compensation survey were incorporated into the competitive assessment prepared by
CompensiaExequity and used by the Compensation Committee to evaluate the compensation of our executive officers. Radford Survey data incorporated in the analysis provided by
CompensiaExequity were tailored to reflect companies from our compensation peer group as well as other companies identified on the basis of comparable industry, revenue, and market capitalization profiles. The executive compensation survey data supplements the compensation peer group data and provides additional information for our Named Executive Officers and other vice president positions for which there is less public comparable data available.
It is important to note that the companies in our
Company peer group, as well as the peer groups selected by proxy advisory services, consist of technology companies generally focused in the Electronics & Equipment, Application Software and Communications Equipment industries that are similar to Trimble in size, industry classification, and organizational scope. As such, the peers represent the group of companies with which we compete for talented employees, and therefore provide a reasonable basis for competitive market benchmarking in managing our executive compensation program. However, the stockholder returns for the peer group may provide an imperfect comparison at particular points in time because
Trimble’sour mix of businesses creates concentrated exposure to specific sectors such as agriculture, construction, and oil and gas, and negative developments in those markets may affect
Trimble’sour business performance in ways that differ from that of other technology companies in our peer group.
30
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 35
Details of 2020 Executive Compensation
Individual Compensation Elements
In
2017,fiscal 2020, the principal elements of our executive compensation program, and the purposes for each element, were as follows:
| | | | | | | | | | | |
| Compensation Component | | | |
Compensation
Component
| | | | How We Determine the Amount? | | What is the Intended Outcome? |
| | | |
| Base Salary | | • Consistent with competitive practice and provided in cash. | | • Use of compensation peer group and other market compensation data within a competitive market median range, also factoring in responsibilities and performance. | | • Designed to attract and retain highly talented executives by providing market competitive pay aligned to business and leadership experience, responsibilities and performance. |
| | | |
Annual Short
Term Bonus Plan (“MIP”- Management Incentive Plan) * | | • Establish direct pay for performancepay-for-performance link. • Drive focus on annual business targets and objectives. • Reflect market competitive practice; provided in cash. | | • Use of compensation peer group and other market compensation data within a competitive market median range for a target bonus percentage. • Payments are performance-based and calculated as a percentage of base salary. | | • Within our pay for performancepay-for-performance framework, we want to motivate our executives to achieve and exceed our annual business goals through the financial structure of the MIP plan. |
| Long-term Incentives (including PRSUs and RSUs) | | | |
Long-term
Incentives
(including
performance
units and
restricted
units)
| | • Establish direct pay for performancepay-for-performance link. • Drive focus on the achievement of critical long-term business objectives and total shareholder return. • Align management’s interests with those of our stockholders. • Foster long-term retention of key executives. • Reflect market competitive practice; provided through equity awards. | | • Use of compensation peer group and other market compensation data within a competitive market median range for annual equity award determination. • Amount of target annual equity awards also considers executive performance and responsibilities. • In fiscal 2017, the total long-term equity opportunity was allocated between performance units (75%) and restricted stock units (25%) for our CEO. For Named Executive Officers the split was 50% performance and 50% restricted stock units.
| | • Delivering market competitive equity awards that drive a longer term view of our business and targeted results that align with the interests of our stockholders. • Creating an effective mix of relativeabsolute and absoluterelative performance by awarding both PRSUs that are aligned to Company financial results and/or total shareholder return (TSR) and PRSUs that are aligned to company operating income results.. • Create increased executive retention and focus on long-term share price appreciation through grants of time-based RSUs. |
| | | |
Executive
Benefits and Perquisite Allowance | | • CEO and other executives participate in the standard health & welfare and retirements benefits as all regular employees. Certain eligible executives may participate in the Age & Service Equity Vesting Program. • Little to no special perquisites provided to executives. | | | | |
* Note: the annual short-term bonus plan (MIP) was canceled for fiscal 2020.
Base salary represents the fixed portion of the compensation of our executive officers, including our Named Executive Officers, and is an important element of compensation intended to attract and retain highly-talented individuals.
Using the competitive market data provided by its compensation consultant, the Compensation Committee reviews and adjusts the base salaries for each of our executive officers, including our Named Executive Officers, as part of its annual executive compensation review. In addition, the base salaries of our executive officers may be adjusted by the Compensation Committee in the event of a promotion or significant change in responsibilities.
31
Generally, the Compensation Committee sets base salaries with reference to the competitive range of the market median of our compensation peer group and applicable executive compensation survey data. Although we set base salaries within a competitive range of the market median, the actual positioning will also be based on the Compensation Committee’s assessment of the factors described above.
In May 2017, consistent with
At the recommendationend of our CEO, our Board of Directors determined to increase the base salaries of our executive officers, including our Named Executive Officers (other than our CEO). The increase to the base salary of our CEO was recommended by2019, the Compensation Committee, in consultation with its compensation consultant and approved bywith reference to peer-group data, determined new compensation packages, including base salary levels, for
36 Trimble | Proxy Statement for the independent members2021 Annual Meeting of our BoardStockholders
Mr. Painter and Mr. Berglund in their new roles effective as of Directors,the beginning of fiscal 2020. The Compensation Committee determined an appropriate discount from the market median rate for Mr. Painter in consideration of his status as a newly appointed CEO. Mr. Berglund’s new salary was set at a significant discount from his prior salary ($1,035,000), given his change in roles and responsibilities. Mr. Barnes’ base salary, which had been determined at the time of his announced hire in November 2019, was also set below peer-group market median levels based on the practice in place prior to November 2017. his newly-hired position as CFO.
In making these decisions,February 2020, the Compensation Committee performed its annual review and our Boardadjustment of Directors consideredbase salaries, taking into account the factors described earlier in “Governance“Overview of Executive Compensation – Governance of Executive Compensation Program – Compensation-Setting Process” above. Our CEO received a 3% increase inProcess.” Given the developing situation with COVID-19 worldwide and the unknown potential impacts on our business at the time, it was determined not to adjust base salary in 2017, which was the first increase in base paysalaries for our CEO since May 2014. The increase for our CFO reflected an additional adjustment for the assumption of greater responsibilities associated with the CFO position and closer alignment of his compensation with the market for CFO compensation. The remaining increases maintained alignment of our other NEOs with the market, and we believe they were appropriate given our improved business performance ending 2016 and moving into 2017. 2020.
The base salaries of our Named Executive Officers for
20172020 were as follows:
| | | | | | | | | | | | |
| Named Executive Officer | | Fiscal 2016 Base
Salary Rate (1) | | | Fiscal 2017 Base
Salary Rate (1) | | | Percentage
Adjustment | |
Mr. Berglund | | | $860,000 | | | | $886,000 | | | | 3% | |
Mr. Painter | | | $375,000 | | | | $415,000 | | | | 11% | |
Mr. Kirkland | | | $387,229 | | | | $400,000 | | | | 3% | |
Mr. Matthews | | | $401,700 | | | | $414,000 | | | | 3% | |
Mr. Sankpal | | | $386,250 | | | | $398,000 | | | | 3% | |
| (1) | Reflects the annual salary rate approved by the Compensation Committee. Annual changes to base salaries, if any, are generally effective in May of each fiscal year. The actual amounts paid to our | | | |
Named Executive Officers as salary in 2017 are set forth in the “Summary Compensation Table” below.Officer | Fiscal 2020 Base Salary Rate (1) |
| Mr. Painter | $850,000 |
| Mr. Berglund | $800,000 |
| Mr. Barnes | $500,000 |
| Mr. Langley | $410,000 |
| Mr. Matthews | $439,213 |
(1) Reflects the annual salary rate approved by the Compensation Committee. Annual changes to base salaries, if any, are generally effective in May of each fiscal year. The actual amounts paid to our Named Executive Officers as salary in 2020 are set forth in the “Summary Compensation Table” later in this proxy statement.
We use an annual cash bonus plan to motivate our executive officers and other key employees to achieve our annual business goals. In 2017,2020, our Board of DirectorsCompensation Committee adopted the Annual Management Incentive Plan for 20172020 (the “2017 MIP”“2020 MIP”) to provide financial incentives for the Company as a whole and our individual business sectors and divisions to meet or exceed the annual target levels established under our 20172020 annual operating plan. Senior-level managers, our executive officers, including our Named Executive Officers, and certain other individual employees were eligible to participate, upon approval by our CEO, or by our Board of Directorsthe Compensation Committee with respect to our CEO, in the 20172020 MIP.2017 MIP Plan
Modifications
In 2017, the Compensation Committee approved a change to the 2017 MIP plan, under which the CEO, Named Executive Officers and other key executives would be eligible only for annual MIP bonus payment instead of our past practice of quarterly payments based on performance.
Target Annual Cash Bonus Opportunities
For purposes of the 20172020 MIP, cash bonuses were based upon a percentage of each participant’s fiscal 2020 base salary.salary rate. The target annual cash bonus opportunities for our executive officers, including our Named Executive Officers (other than our CEO) were recommended to the Compensation Committee by our CEO, and approved by our Board of Directors.the Compensation Committee. The target annual cash bonus opportunity for our CEO was recommendedreviewed and approved by the Compensation Committee and approved by the independent membersat 125% of our Board of Directors.base pay. The determination of annual cash bonus opportunities is based on the factors described earlier in “Governance“Overview of Executive Compensation Program—– Governance of Executive Compensation Program – Compensation-Setting Process” above.32
Process.”
For 2017, the target annual cash bonus opportunities for our CEO and our Named Executive Officers were maintained at their 2016 levels. Specifically, the target annual cash bonus opportunities for 20172020 were as follows:
| | | | | | | | |
| Named Executive Officer | | 2017 Target Annual Cash
Bonus Opportunity2020 target annual cash bonus opportunity (as a
percentage of base salary) |
| Mr. Painter | 125 | % |
Mr. Berglund | 0 | | 125% | % |
Mr. Painter Barnes | 80 | | 80% | % |
Mr. Kirkland Langley | 80 | | 60% | % |
Mr. Matthews | 80 | | 80% | |
Mr. Sankpal
| | | 80% | % |
Potential annual cash bonuses for our executive officers, including our Named Executive Officers, under the
20172020 MIP could range from zero to
300%200% of their target annual cash bonus opportunity.
Performance Measure
For purposes of the 20172020 MIP, our Board of DirectorsCompensation Committee selected revenue (20% weighting), Adjusted EBITDA (40% weighting) and adjusted operating incomeannualized recurring revenue (“ARR”) (40% weighting) as the corporate financial
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 37
performance measures.
For this purpose, “adjusted operating income”These measures were selected and weighted to reflect an optimal balance of key Company metrics that measure recurring, sustainable performance and growth. Each measure was
determined as follows:designed to be scored independently. Both Adjusted EBITDA and ARR are non-GAAP measures, which the Company reports in its annual report on Form 10-K, together with respecta reconciliation of GAAP to a sector or division, operating incomenon-GAAP financial measures.
The 2020 MIP was initially suspended in March and later canceled for that sector or division; and
with respectthe 2020 fiscal year due to the Company as a whole, our operating income,
adjusted for restructuring costs, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventorystep-up, acquisition/divestiture costs associated with externalCOVID-19 pandemic and incremental costs resulting directly from mergerimpacts and acquisition activities such as legal, due diligence, integration costs and litigation expenses. For purposes ofuncertainties. When the 2017 MIP, a “sector” is a grouping of divisions within the Company.
As a result of the consideration of the adjustments describedCompany’s performance significantly exceeded expectations in the preceding paragraph,second and third quarters of 2020, the 2017 MIP usedCompensation Committee approved anon-GAAP measure of operating income. References discretionary bonus pool to operating income in the context of the 2017 MIP targets refer to thisnon-GAAP measure, unless otherwise noted.
MIP Bonus Plan Formula
For our CEO, CFO,reward non-executive Trimble employees for their resilience and Mr. Kirkland, 2017 MIP payments were dependent upon achievement ofpre-established revenuesignificant work during an unprecedented and operating income goals for the Company as a whole. For Mr. Matthews and Mr. Sankpal, their 2017 MIP payments were dependent partly uponchallenging year. The bonus pool was based on the achievement of thepre-established revenue andoperating income goals forincreased operating margins over the Company as a whole, constituting 50%prior year. The size of their target annual cashthe bonus opportunities, and partly uponpool was determined by the performance of their respective business sectors, including achievement of revenue and operating goals. For Mr. Sankpal, a limited portion of his sector bonus was based on achievement of other specific goals for his business sector.
Revenue andamount by which operating income increased, such that when the bonus pool was taken into account in the Company’s operating results, there remained a meaningful improvement in operating margin over the prior year. This bonus pool, which was capped at a maximum of $40 million, paid out a portion (approximately 69%) of what a recipient’s annual short-term incentive target levelswould have been under MIP or other non-executive Company bonus program in which they participated. In order to prioritize cash payments to our broader employee population, the Company’s executives, including our Named Executive Officers, did not participate in the bonus pool. Rather, following the end of the 2020 fiscal year, in February 2021, the Compensation Committee approved a special one-time RSU grant to each of our Named Executive Officers in recognition of strong performance during a challenging year in which MIP had been canceled. The value of these equity awards was determined in the same manner as how cash payments were establisheddetermined for non-executive employees under the Company andbonus pool, i.e., the equity grant value for each business sector for the full fiscal year. Each Named Executive Officer was eligible to receive his full target annual cash bonus opportunity if full year revenue andoperating income goals were achieved, except as to the limited portionapproximately 69% of Mr. Sankpal’s sector bonus.
At the end of the year, an annual cash bonus amount for each executive was determined based on full year revenue and operating income results, and, in the case of Mr. Matthews and Mr. Sankpal, on the annual revenue and operating income results of their respective business sector. Additionally, threshold levels of revenue andoperating income for the Company and for the sectors applicable to each Named Executive Officer were to be met before any bonus payment to be made based upon annual results. The amount of this annual cash bonus amount could vary from zero to 300% of eachwhat such Named Executive Officer’s short-term incentive target annual cash bonus opportunity for the full fiscal year, calculated on a sliding scale, as described below. A Named Executive Officer was required to remain continuously employed through the last day of the fiscal year to be entitled to a payment for the applicable period.
33
The following table sets forth the 2017 MIP revenue and operating income target levels and the operating income results applicable to the bonus payment for each of the Named Executive Officers (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Revenue | | Revenue | | | Operating Income | | | Operating
Income | | | Annual
Threshold |
| | | Threshold | | | Target | | | Maximum | | Actual | | | Threshold | | | Target | | | Maximum | | | Actual | | | Achieved?
(1) |
Corporate | | | $2,278 | | | | $2,489 | | | N/A | | | $2,654 | | | | $400 | | | | $440 | | | | $530 | | | | $480 | | | Y |
Sector (Matthews) | | | $373 | | | | $406 | | | N/A | | | $444 | | | | $117 | | | | $127 | | | | $143 | | | | $146 | | | Y |
Sector (Sankpal) | | | $227 | | | | $253 | | | N/A | | | $247 | | | | $62 | | | | $68 | | | | $79 | | | | $70 | | | Y |
| (1) | Payment of the annual portion of the bonus is contingent upon achievement of threshold revenue and operating income levels for the full fiscal year. For Mr. Sankpal, a limited portion his sector bonus was based on achievement of other specific goals for his sector. |
The relationship between the minimum operating income threshold, target and maximum performance levels, and the bonus payment earnedwould have been under the 2017 MIP is set forth below. The target level of corporate operating incomeMIP. These one-time RSU grants in the 2017 MIP of $440 million represented approximately 8.5% growth relative2021, which were also granted in part to retain our 2016 actual results. The target levels of operating income for Mr. Matthews’ and Mr. Sankpal’s sectors also each represented significant growth relative to our 2016 actual results. The design of the MIP and performance goals established for 2017 ensurekey executives during an uncertain, rapidly-changing environment, vest over a rigorous relationship between pay and performance and an expectation of sustained positive operating performance in our Named Executive Officer compensation program. The level of performance required to achieve a 300% of targetpay-out represents substantial overachievement relative to our expected range of results.
The formula provides for payments based upon partial achievement of revenue and operating income goals above the minimum threshold shown below on a linear interpolated basis between zero and 100% achievement of the goals, and on an upward sloping linear interpolated basis between 100% and 300% achievement of the goals.
| | | | | | | | | | | | |
| | | Operating Income Goals (in millions) | |
Incentive Payout as a % of
Target | | Company | | | Sector
(Matthews) | | | Sector
(Sankpal) | |
0% | | | $400 | | | | $117 | | | | $62 | |
100% | | | $440 | | | | $127 | | | | $68 | |
200% | | | $480 | | | | $135 | | | | $75 | |
300% | | | $530 | | | | $143 | | | | $79 | |
Bonus Payments
The actual cash bonus payments earned by our Named Executive Officers under the 2017 MIP ranged from 155% to 250% of their target annual cash bonus opportunities. The following table sets forth the target annual cash bonus opportunities, weighting of corporate and sector revenue and operating income target levels, the actual achievement level relative to these target levels, and the actual cash bonus payments made to our Named Executive Officers for 2017 (for Mr. Sankpal, a portion his sector bonus is based on achievement of other specific goals for his sector.):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Target Bonus | | | Bonus Weighting | | | % Achievement | | | Actual Bonus | |
Named Executive Officer | | % of
Base | | | Value
($K) | | | Corporate | | | Sector | | | Corporate | | | Sector | | | % of
Target
Bonus | | | Earned
Value ($K) | |
Steven W. Berglund | | | 125% | | | | $1,108 | | | | 100% | | | | —% | | | | 201% | | | | N/A | | | | 201% | | | | $2,223 | |
Robert Painter | | | 80% | | | | $332 | | | | 100% | | | | —% | | | | 201% | | | | N/A | | | | 201% | | | | $667 | |
James A. Kirkland | | | 60% | | | | $240 | | | | 100% | | | | —% | | | | 201% | | | | N/A | | | | 201% | | | | $482 | |
Darryl Matthews | | | 80% | | | | $331 | | | | 50% | | | | 50% | | | | 201% | | | | 300% | | | | 250% | | | | $830 | |
Sachin Sankpal | | | 80% | | | | $318 | | | | 50% | | | | 50% | | | | 201% | | | | 137% | | | | 155% | | | | $494 | |
34
one-year period.
The cash bonus payments made to our Named Executive Officers for 2017 are set forth in the “Summary Compensation Table” below.
Long-Term Incentive Compensation
We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our executive officers, including our Named Executive Officers, to create value for our stockholders. Equity awards also help us retain qualified executive officers in a competitive market.
Long-term incentive compensation opportunities in the form of equity awards are determined and since November 2017, granted by the Compensation Committee. The amount and forms of such equity awards are determined by the Compensation Committee after considering the factors described in “Governanceearlier under “Overview of Executive Compensation Program—Compensation-Setting Process” above..” The amounts of the equity awards are also intended to providecompetitively-sized awards and resulting target total direct compensation opportunities within a competitive range of the market median relative to our compensation peer group and Radford survey data for similar roles and positions for each of our executive officers, taking into consideration business results, internal equity, experience and individual performance. At the end of 2019, in connection with the appointment of Mr. Painter and Mr. Berglund to their new roles effective as of the start of fiscal 2020, the Compensation Committee considered appropriate equity awards as part of their new compensation packages, in consultation with the Compensation Committee’s compensation consultant and with reference to peer-group data. In May 2017,connection with his appointment to CEO, Mr. Painter was granted a promotion award of $1,000,000 in RSUs and performance-based options to purchase shares of common stock of the Company with a grant date value of $3,000,000. The RSUs vest on the third anniversary of the grant date and the options vest after three years and upon attainment of specific stock price threshold hurdles (which were met as of the end of fiscal year 2020, such that the award is subject only to time-based vesting as of the end of fiscal 2020). These awards were intended to create a strong drive for Company growth and to provide the new CEO with increased ownership opportunities. The awards were structured so as to ensure that they only become valuable to the extent that significant shareholder value is created, and to further retention objectives by requiring at least three years of service. In connection with his new role as Executive Chairman, Mr. Berglund was granted $3,200,000 in RSUs, in part for his partnership role with Mr. Painter in the CEO transition and in part to retain Mr. Berglund for a period beyond the transition. The RSUs, which are directly aligned with stockholder interests, vest in equal increments over three years. In connection with his hiring as CFO in 2019, Mr. Barnes was granted $800,000 in RSUs vesting on the third anniversary of the grant date, and options with a grant date value of $400,000 vesting over five years, for long-term incentive and retention.
In 2020, faced with the rapidly-changing environment of the COVID-19 pandemic, the Compensation Committee determined that the long-term incentive equity awards to be granted to our executive officers shouldover the annual
38 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
cycle would be in the form of a combination of TSR-based PRSU awards and time-based RSU awards for shares of our common stock. In 2017, our
•The Compensation Committee determined that the optimal form of PRSU awards for issuance in 2020 would be TSR-based PRSUs and not include PRSUs based on specific operating metrics as in recent prior years, given the challenge and uncertainty of setting long-term, absolute financial performance targets (based on revenue, profitability and ARR) in an unpredictable and unprecedented economic environment. The TSR-based PRSU awards granted are tied to relative total shareholder return over various performance periods as measured against the S&P 400 index. These generally comprised approximately 60% of the total annual LTI equity value granted to each Named Executive OfficersOfficer (65% for Mr. Painter, our CEO, if you include the awards granted in connection with his promotion to CEO, and 0% for Mr. Berglund, our Executive Chairman, who received PRSU awards with two differentno performance-based awards). The TSR-based PRSUs granted in May measure performance over 3 separate measurement designs, as well as time-based RSU awards, as summarized hereperiods of 1, 2 and described3 year terms, and the TSR-based PRSUs granted in greater detail below: | • | | A portion of the PRSU awards granted are to be earned based on our TSR relative to the components of the S&P 500 Index over a three-year performance period with annual scoring windows (the“Relative TSRPRSU Awards”). This portion comprised approximately 25% of the total long-term incentive equity value granted (or 50% in the case of our CEO). |
| • | | The remaining portion of the PRSU awards granted are to be earned to the extent that we achieveOctober are scored over a single period of 2 ½ years.•pre-established target levels of revenue and operating income growth as of the end of our fiscal 2019 (the“Financial Performance PRSU Awards”). This portion comprised approximately 25% of the total long-term incentive equity value granted to each Named Executive Officer, including our CEO. |
The remaining long-term incentive compensation value granted to our executive officers was delivered in the form of time-based RSU awards, which were granted in November 2017.May 2020. These grants generally comprised approximately 50%40% of the total long-term incentiveLTI annual equity value granted to each Named Executive Officer (or 25%(35% in the case of our CEO)CEO if you include his promotional awards, and 100% in the case of our Executive Chairman).This aligned with our goal of retaining our key executives and ensuring leadership stability during a time of extreme challenges and uncertainty. This mix of equity awards also reflected a recognition, at the time of grant, that prior annual grants of financial‑based performance PRSUs could be significantly affected by the impact of COVID-19.
The Compensation Committee approved the mix of
20172020 long-term incentive equity awards based on an assessment of our compensation objectives and historical practice, input from the Compensation Committee’s independent compensation consultant,
and market practice among companies in our peer
group.group, and the unique circumstances facing the Company and global economy in 2020 as a result of the COVID-19 pandemic. The mix of time and performance-based vesting equity awards is competitive with market practice for our Named Executive Officers. The Compensation Committee determined through peer group analysis that the equity awards to our CEO
for which 75% of target value was in the form of performance-based awards, included a greater weighting on performance-based compensation than is common among peer companies. This weighting was established to reinforce our strong
pay-for-performance culture.
35
The Compensation Committee recommended, and our Board of Directors approved the following aggregate equity awards for our Named Executive Officers in 2017:
| | | | | | | | | | | | | | | | |
| Named Executive Officer | | Restricted Stock
Unit Awards (#
of shares) | | | Performance Stock
Unit Awards (#
of shares at target) | | | Grant Date Target
Value of Equity ($)
(1) | | | Aggregate Grant
Date Fair Value of
Equity Awards ($) | |
Mr. Berglund | | | 37,599 | | | | 126,942 | | | | $6,116,173 | | | | $7,537,924 | |
Mr. Painter | | | 16,451 | | | | 21,000 | | | | $1,424,093 | | | | $1,600,493 | |
Mr. Kirkland | | | 14,884 | | | | 19,000 | | | | $1,288,455 | | | | $1,448,055 | |
Mr. Matthews | | | 14,884 | | | | 19,000 | | | | $1,288,455 | | | | $1,448,055 | |
Mr. Sankpal | | | 14,884 | | | | 19,000 | | | | $1,288,455 | | | | $1,448,055 | |
(1) The grant date target value of equity represents awards valued based on the closing price of our Common Stock on the grant date. In the case of Relative TSR PRSU awards, this value is different than the grant values provided in the Summary Compensation Table, which represent the accounting value using a Monte Carlo analysis as required by FASB ASC Topic 718.
Relative TSR PRSU Awards
The Relative TSR PRSU Awards may become earned based on our TSR compared to components of the S&P 500 Index as measured overone-year,two-year and three-year performance periods beginning on May 2, 2017 (the“Performance Periods”), with equal portions eligible to become earned at the end of each of the Performance Periods, although no shares will actually vest until the end of the three-year period. The number of shares of our common stock for which these awards may be settled varies based on our TSR relative to the TSR of components of the S&P 500 Index over the Performance Periods.
The Compensation Committee selected the S&P 500 Index as the most appropriate reference from which to evaluate our performance because it represents a reliable indicator of the general economy and reflects the unique and diverse nature of our operations. The formula used to measure TSR for the Company and for the components of the S&P 500 Index is the60-trading day average stock price through the final day of the Performance Period and the60-trading day average stock price prior to the commencement of the Performance Period, including the reinvestment of dividends where applicable.
For purposes of the Relative TSR PRSU Awards, the payment range based on our TSR relative to the S&P 500 Index over the Performance Periods is as follows:
| | |
Relative TSR Compared to Percentile Ranking across
S&P 500 Member Companies
| | Pay-out Percentage of Target
(number of shares)
|
Maximum: 80th percentile or above
| | 200% |
Target: 50th percentile
| | 100% |
Threshold: 25th percentile
| | 50% |
Below threshold
| | 0% |
36
2020:
Financial Performance PRSU Awards
In addition to the Relative TSR PRSU Awards, our Board of Directors approved the grant of PRSU awards to be earned based on our revenue and adjusted operating income performance during 2019. For purposes of the Financial Performance PRSU Awards, the adjustments to operating income reflected the samenon-GAAP measure of operating income as used for purposes of the 2017 MIP.
The number of shares of our common stock that could be earned under the Financial Performance PRSU Awards will vary from 0% to 200% of the target number of units granted, with the earned shares (if any) to vest at the end of fiscal 2019. The levels of performance required to earn the target number of units was based on a matrix reviewed and recommended by the Compensation Committee and approved by the Board of Directorsat the time of the grant, and were viewed to be achievable but also challenging. In addition, the threshold levels of revenue and adjusted operating income required to earn any pay out under the terms of the Financial Performance PRSU Awards exceed our performance during fiscal 2016, ensuring that no compensation will be earned under the awards for performance that does not represent growth over time and significant progress toward achieving the objectives established in our long-term strategic plan. In addition, no shares will be earned if the threshold levels of both revenue andnon-GAAP operating income are not achieved.
The decision to link these awards to our revenue growth and operating income performance was aligned with our long-term strategic plan and reflected our focus on profitable growth as a key driver of stockholder value. The Compensation Committee believes that the use of a3-year performance and vesting period ensures a long-term view of performance that is aligned with the interests of our stockholders. In addition, this approach is competitive with market practice among companies in the Trimble compensation peer group and supports the retention of our executive team.
Time-Based RSU Awards
| | | | | | | | | | | | | | |
| Named Executive Officer | Restricted Stock Unit Awards (# of shares) | Performance Stock Unit Awards (# of shares at target) | Stock option award (# of shares) | Aggregate Grant Date Fair Value (as shown in Summary Compensation Table) ($) |
| Mr. Painter | 96,962 | 67,072 | 208,847 | 11,713,202 |
| Mr. Barnes | 27,374 | 23,569 | — | | 2,784,888 |
| Mr. Berglund | 77,089 | — | | — | | 3,199,964 |
| Mr. Langley | 16,424 | 14,141 | — | | 1,670,888 |
| Mr. Matthews | 16,424 | 14,141 | — | | 1,670,888 |
The time-based RSU awards vest in
equal annual installments over
a three-year period (except a portion of Mr. Painter's time-based RSUs, which vest only at the end of the three-year
period, with the first installment vesting after one year (approximately one year from the date of grant)period), contingent upon
an executive officer remaining continuously employed by uscontinuous employment through each applicable vesting date.
Upon vesting, the RSU awards may be settled by issuing the number of shares of our common stock, or by a cash payment equal to the fair market value of the shares on the vesting date, or a combination of shares and cash, as determined in the discretion of our Board of Directors.The equity awards granted to our Named Executive Officers in 20172020 are set forth in the “Summary“Summary Compensation Table” and the “Grants“Grants of Plan-Based Awards Table” below.Awards”
table, later in this proxy statement. Welfare and Health Benefits
Our executive officers, including our Named Executive Officers, are eligible to receive the same employee benefits that are generally available to all of our full-time employees, subject to the satisfaction of certain eligibility requirements. These benefits include health and welfare benefits generally available to all U.S. employees.
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 39
In addition, our employees, including our executive officers, are eligible to participate in our Section 401(k) retirement plan. Participants in the Section 401(k) plan in general may receive up to $3,000 per year in matching Company contributions.
Also, commencing in 2017, a new post-employment arrangement was adopted for certain eligible executive officers, including each of the Named Executive Officers, participate in a post-employment equity vesting arrangement (see the description under “Post-Employment Compensation—“Post-Employment Compensation – Trimble Age & Service Equity Vesting Program”Program” later in this Proxy Statement)proxy statement).In structuring these benefit programs, we seek to provide an aggregate level of benefits that are comparable to those provided by similar companies. Certain of our Named Executive Officers participatehave also participated in ourNon-Qualified Deferred Compensation Plan, further discussed later in “Post-Employment Compensation” below. this proxy statement.
In addition, we pay basic life insurance premiums on behalf of our Named Executive Officers, as part of our general death benefits for full time employees.
Perquisites and Other Personal Benefits
Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide significant perquisites or other personal benefits to our executive officers, including our Named Executive Officers, except as generally made available to our employees. During
2017,2020, none of our Named Executive Officers received perquisites or other personal benefits that were, in the aggregate, $10,000 or more for each individual.
37
In the future, we may provide perquisites or other personal benefits, subject to review and approval by the Compensation Committee.
We have entered into
a written employment agreement with our CEO and have written employment offer letters with each of our
other executive officers, including our
other Named Executive Officers. In filling each of our executive positions, we
recognizedrecognize the need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, in formulating these compensation packages, we were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations. Each of these arrangements provides for “at will” employment.
Executive Severance and Change-in-Control Compensation Arrangements
We have entered into executive severance and change in control severance agreements (the “Severance Agreements”“Severance Agreements”) with each of our executive officers, including our CEO and our other Named Executive Officers. Thepost-employment compensation arrangements provided under the Severance Agreements are intended to supersede any post-employment arrangements provided to the Named Executive Officers in their employment agreements or offer letters. We believe that having in place reasonable and competitive post-employment compensation arrangements are essential to attracting and retaining highly-qualified executive officers. The Severance Agreements are designed to provide reasonable compensation to executive officers who leave our employ under certain circumstances to facilitate their transition to new employment. Further, in some instances, we seek to mitigate any potential employer liability and avoid future disputes or litigation by requiring a departing executive officer to sign a separation and release agreement acceptable to us as a condition to receiving post-employment compensation payments or benefits.On February 2, 2017, as recommended by the Compensation Committee, our Board of Directors approved amended and restated executive severance andchange-in-control severance arrangements with our CEO, CFO and our other Named Executive Officers, as well as certain other executive officers. When approving the amended arrangements, the Compensation Committee considered an analysis of market practice among the companies in our compensation peer group as well as input from its compensation consultant. The terms and conditions of these arrangements are described in “Post-Employment
“Post-Employment Compensation” below. later in this proxy statement. The Compensation Committee does not consider the specific amounts payable under the executive severance and
change-in-control severance arrangements when establishing annual compensation. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive.
We believe that these arrangements are designed to align the interests of our executive officers and our stockholders when considering our long-term future. The primary purpose of these arrangements is to keep our most senior executive officers focused on pursuing all corporate transaction activity that is in the best interests of our stockholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the executive officer and our stockholders.
For detailed descriptions of the post-employment compensation arrangements we maintained with our Named Executive Officers for 2017,2020, as well as an estimate of the potential payments and benefits payable under these arrangements, see “Post-Employment“Post-Employment Compensation” below. later in this proxy statement. 40 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
Other Compensation Policies and Practices
Equity Awards Grant Policy
The Board of Directors has delegated to the Compensation Committee the authority to grant equity awards (although it has not relinquished such authority for itself). Due to the fact that our Compensation Committee’s and Board of Directors’ regular meetings are
typically timed to coincide with the preparation of our quarterly financial results, equity awards have and will be granted shortly before an earnings release. The Compensation Committee or our Board of Directors may also grant equity awards at a special meeting, or by unanimous written consent, in special circumstances, such as to facilitate the hiring of a key executive officer.
In addition, the Compensation Committee has delegated the authority to the Chief Executive Officer of the Company to grant certain types of standard, routine equity awards to non-officer employees, subject also to individual and aggregate annual limitations. Accordingly, our Compensation Committee,
or Board of Directors
or Chief Executive Officer may grant equity awards while the directors
or Chief Executive Officer are in possession of material,
non-public information.
We
have historically maintainedmaintain a stock ownership policy for our
CEO andexecutives, as well as the
non-employee members of our Board of Directors, to further align their respective interests with the interests of our stockholders, and to further promote
38
our commitment to sound corporate governance.
This policy requires our
CEOexecutive officers (as defined under SEC rules), including our Named Executive Officers, to
each own a minimum number of shares of our common stock equal to a
valuemultiple of
five times his or her annualized base
salary.The number of shares necessary to meet the minimum ownership level may be accumulated during the first five years after becoming chief executive officer or a member of our Board of Directors,salary, as applicable. set forth below:
| | | | | |
| Position | Multiple of Base Salary |
| CEO | 5x |
| Other executive officers | 2x |
| Chief Accounting Officer | 1x |
The shares of our common stock counted toward the ownership guidelines include shares owned directly and indirectly, provided there is an economic interest in the shares.
For our CEO, this ownership level must be attained within five years from the date the policy was adopted. Mr. Berglund has achieved his required ownership level.As of May 1, 2017, we expanded our stock ownership policy to include our CFO, Named Executive Officers and Section 16 officers. The updated policy requires these executives to own a minimum number of shares of our common stock equal to a value of two times his or her annualized base salary. In addition, our Chief Accounting Officer also is required to own a minimum number of shares of our common stock equal to a value of one times his or her annualized base salary. The number of shares necessary for an executive to meet the minimum ownership level may be accumulated during the first five years afterfrom the May 1, 2017 effective date. The sharesdate they assume one of the roles listed. As of the Record Date, each of our common stock counted towardexecutive officers, including the Named Executive Officers, has achieved their respective required ownership guidelines include shares owned directly and indirectly, provided there is an economic interest in the shares.
levels.
Compensation Recovery (“Clawback”) Policy
In May 2017, our Board of Directors adopted
We also maintain a policy providing that in the event of a material restatement of our financial results, we may require that incentive-based compensation paid to our executive officers who were subject to Section 16 of the Securities Exchange Act of 1934 during the three fiscal years prior to the restatement be forfeited and repaid to us. In addition, if material dishonesty, fraud or misconduct by any such executive officer directly caused or materially contributed to the need for the restatement, the full amount of incentive-based compensation paid to him or her during the prior three fiscal years may be subject to forfeiture or reimbursement. If any such executive officer did not engage in any misconduct, the amount subject to forfeiture or reimbursement will be based on the difference between the amount of incentive-based compensation that was paid based on the results as originally reported and the amount of incentive-based compensation that would have been paid based on the results as restated, calculated without regard to any taxes paid.
Our Board of Directors will determine the amount, form, and timing of any recovery in its discretion, based on the circumstances. Each of our executive officers who is subject to Section 16 of the Securities Exchange Act of 1934 is required to sign an acknowledgment making them subject to the policy.
Policy Prohibiting Hedging or Pledging of Company Securities
We have a policy that prohibits all hedging or monetization transactions, which could result in an employee, including an executive officer, or a member of our Board of Directors to continue to own the covered securities at issue, but without the full risks and rewards of ownership. If that were to occur, the employee or director may no longer have the same objectives as our other stockholders. We consider it improper and inappropriate for our employees, including our Named Executive Officers, to engage in such transactions, and have expressly prohibited such activitydirectors, employees and their designees from purchasing financial instruments, or otherwise engaging
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 41
in transactions, that hedge or offset any decrease in the market value of our equity securities, under our Insider Trading Policy.
While use of
companyCompany securities as collateral for margin accounts or other transactions does not directly create a misalignment with stockholders’ interests, it raises potential risks to stockholder value, particularly if the pledge is significant. Based on these potential risks, we have prohibited pledging transactions as well.
Tax and Accounting Considerations
Deductibility of Executive Compensation
Generally,
Section 162(m) of the Internal Revenue Code disallows public companies a tax deduction for federal income tax purposes of remuneration in excess of $1 million paid to their chief executive officer and each of the three other most highly-compensated executive officers (other than the chief financial officer) whose compensation is required to be disclosed to our stockholders under the Exchange Act in any taxable year. Historically, remuneration in excess of $1 million(the “Code”) was only deductible if it was “performance-based compensation” within the meaning of Section 162(m) or qualifies for one of the other exemptions from the deduction limit. However,amended on December 22, 2017 by the Tax Cuts and Jobs Act (the“Tax Act”Act”) became law, significantly amending. Under the Tax Act, Section 162(m). applies to each employee who serves as the Company’s principal executive officer or principal financial officer during the taxable year, each other employee of the Company who is among the three most highly compensated officers during such taxable year, and any other employee who was a covered employee of the Company for any preceding taxable year beginning after December 31, 2016. The Tax Act eliminated the performance-based compensation exception with respect to tax years beginning January 1, 2018, but included a transition rule with respect to compensation that is provided pursuant to a written binding contract in effect on November 2, 2017 and not39
materially modified after that date. Accordingly, commencing in 2018, the Company’s tax deduction with regard tofor compensation of covered employees is generally will be limited to $1 million per taxable year for each officer.
To maintain flexibility in compensating our Named Executive Officers in a manner designed
The Company has awarded, and will continue to
promote varying corporate goals, the Compensation Committee hadaward, compensation that it considers appropriate which does not
adopted a policy that all compensation payable to our Named Executive Officers that is subject toqualify for deductibility under Section 162(m)
had to be deductible for federal income tax purposes. In accordance with the transition rule applicable to binding contracts in effect on November 2, 2017, to the extent practicable and in the best interests of the Company and its stockholders, the Company will generally seek to preserve the deductibility ofperformance-based compensation by meeting the requirements of Section 162(m), as amended by the Tax Act..
Accounting for Stock-Based Compensation
We follow
the Financial Accounting Standard Board’s Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”)718 for our stock-based compensation awards. FASB ASC Topic 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and
non-employee members of our Board of Directors, including options to purchase shares of our common stock and other stock awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
Compensation Committee Report
COMPENSATION COMMITTEE REPORT
The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that it is specifically incorporated by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with the Company’s management, and, based on this review and discussion, has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement.
Submitted by the Compensation Committee of the Company’s Board of Directors,
| | | | | | | | |
Merit E. Janow,
Börje Ekholm, Member | | Ronald S. Nersesian, MemberChair | | Nickolas W. Vande Steeg,Chairman
Johan Wibergh, Member |
Compensation Committee | | Compensation Committee | | Compensation Committee |
Also submitted by the Company’s Board of Directors other than with respect to the Tax and Accounting Treatment section of the Compensation Discussion and Analysis,
Steven W. Berglund Kaigham (Ken) Gabriel Ulf J. Johansson Meaghan Lloyd Mark S. Peek Johan Wibergh
40
Executive Compensation Tables
This section includes
| | | | | | | | | | | |
| Steven W. Berglund | James C. Dalton | Merit E. Janow | Kaigham (Ken) Gabriel |
| Meaghan Lloyd | Sandra MacQuillan | Robert G. Painter | Mark S. Peek |
42 Trimble | Proxy Statement for the executive compensation tables required by Item 4022021 Annual Meeting of RegulationStockholders
S-K,
promulgated under the Securities Act of 1933, as amended.
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table sets forth the compensation information for the
2017, 20162020, 2019 and
20152018 fiscal years, respectively,
by:by each of the Named Executive Officers, which includes: (i) all persons who served as the Company’s chief executive officer during the last completed fiscal year; (ii) all persons who served as the Company’s chief financial officer during the last completed fiscal year; and (iii) the three other most highly compensated executive officers of the Company serving at the end of the last completed fiscal year.
| | SUMMARY COMPENSATION TABLE | SUMMARY COMPENSATION TABLE | | SUMMARY COMPENSATION TABLE |
| Name and Principal Position | | Year | | | Salary (1) | | | Stock
Awards (2) | | | Option
Awards (3) | | | Non-Equity
Incentive
Plan
Compensation (1)(4) | | | All Other
Compensation
(5) | | | Total | | Name and Principal Position | Year | Salary (1)(2) ($) | Stock
Awards (3) ($) | Option
Awards ($) | Non-Equity Incentive Plan Compensation (2)(4) ($) | All Other
Compensation (5) ($) | Total ($) |
| Robert G. Painter | | Robert G. Painter | 2020 | 870,950 | | 8,713,219 | | 2,999,982 | | (6) | — | | 6,386 | | 12,590,537 | |
| President and Chief Executive Officer (6) | | President and Chief Executive Officer (6) | 2019 | 535,211 | | 2,165,987 | | — | | | 87,150 | | 9,005 | | 2,797,353 | |
| 2018 | 482,437 | | 1,529,688 | | — | | | 914,660 | | 8,211 | | 2,934,996 | |
| David G. Barnes | | David G. Barnes | 2020 | 519,231 | | 2,784,888 | | — | | | — | | 2,221 | | 3,306,340 | |
Chief Financial Officer | | |
| Steven W. Berglund | | | 2017 | | | | $876,900 | | | | $7,537,924 | | | | $— | | | | $2,222,837 | | | | $— | | | $10,637,661 | | Steven W. Berglund | 2020 | 839,808 | | 3,199,964 | | — | | | — | | 916 | | 4,040,688 | |
President & Chief | | | 2016 | | | | $860,000 | | | | $6,506,882 | | | | $— | | | | $333,901 | | | | $— | | | $7,700,783 | | |
Executive Officer | | | 2015 | | | | $860,000 | | | | $7,721,770 | | | | $— | | | | $173,654 | | | | $— | | | $8,755,424 | | |
Robert Painter | | | 2017 | | | | $401,000 | | | | $1,600,493 | | | | $— | | | | $666,625 | | | | $3,000 | | | $2,671,118 | | |
Chief Financial Officer | | | 2016 | | | | $365,428 | | | | $1,811,101 | | | | $271,350 | | | | $90,803 | | | | $3,000 | | | $2,541,682 | | |
James A. Kirkland (6) | | | 2017 | | | | $395,530 | | | | $1,448,055 | | | | $— | | | | $482,007 | | | | $1,500 | | | $2,327,092 | | |
Senior Vice President, General Counsel | | | | | | | | | | | | | | | | | | | | | | |
| Executive Chairman (8) | | Executive Chairman (8) | 2019 | 1,022,942 | | 8,383,661 | | — | | | 258,750 | | 15,141 | | 9,680,494 | |
| 2018 | 961,400 | | 7,452,939 | | — | | | 2,760,510 | | 2,323 | | 11,177,172 | |
| James Langley | | James Langley | 2020 | 425,769 | | 1,670,888 | | — | | | — | | 750 | | 2,097,407 | |
| Senior Vice President (9) | | Senior Vice President (9) | |
| Darryl Matthews | | | 2017 | | | | $409,695 | | | | $1,448,055 | | | | $— | | | | $829,507 | | | | $1,500 | | | $2,688,757 | | Darryl Matthews | 2020 | 456,106 | | 1,670,888 | | — | | | — | | 3,000 | | 2,129,994 | |
Senior Vice President | | | 2016 | | | | $397,605 | | | | $1,160,060 | | | | $— | | | | $167,321 | | | | $3,000 | | | $1,727,986 | | Senior Vice President | 2019 | 434,539 | | 1,290,242 | | — | | | 35,137 | | 4,466 | | 1,764,384 | |
Sachin Sankpal (6) | | | 2017 | | | | $393,887 | | | | $1,448,055 | | | | $— | | | | $494,157 | | | | $3,000 | | | $2,339,099 | | |
Senior Vice President | | | | | | | | | | | | | | | | | | | | | | |
| | | 2018 | 422,073 | | 1,105,630 | | — | | | 587,771 | | 750 | | 2,116,224 | |
| (1) | The Salary amounts shown are for actual amounts paid in each fiscal year. These may differ from the annual base salaries that are established for such year, which are typically set in May. The amounts shown in the columns for Salary andNon-Equity Incentive Plan Compensation may include amounts earned in the applicable year but deferred at the election of the Named Executive Officer pursuant to the Company’sNon-Qualified Deferred Compensation Plan. |
| (2) | The amounts in these columns represent the grant date fair value of restricted stock unit (RSU) awards. The fair value of performance-based restricted stock units with vesting tied to our total shareholder return are valued as of the grant date using a Monte Carlo simulation, which results in a value greater than the price of Trimble’s stock at the date of grant. The fair value of time-based and other performance-based restricted stock units is determined using the closing price of our common stock on the date of grant and the total expense associated with the performance-based awards is based upon the probable achievement of the underlying revenue and operating income performance goals as of the grant date. Assuming the highest level of performance is achieved under the applicable performance conditions, the maximum possible value of these performance-based RSUs, using the grant date fair value is $18.9 million. Maximum achievement value assuming highest level of performance is achieved per Named Executive officer is as follows: Mr. Berglund $12.0 million, Mr. Painter $1.8 million, Messrs. Kirkland, Matthews, and Sankpal $1.7 million. The fair value of the restricted stock awards was calculated pursuant to FASB ASC Topic 718 and does not necessarily represent actual value that may be realized. For a description of the assumptions used in determining the values described in this column, please refer to “Note 13: Employee Stock Benefit Plans” of the Company’s Annual Report on Form10-K filed on February 26, 2018. |
| (3) | The amounts in this column represent the grant date fair value of stock options for the year in which the stock option was granted. The fair value was calculated pursuant to FASB ASC Topic 718, using the binomial valuation model. For a description of the assumptions used in determining the values, please refer to “Note 13: Employee Stock Benefit Plans” of the Company’s Annual Report on Form10-K filed on February 26, 2018. These amounts do not necessarily represent actual value that may be realized. |
| (4) | The amounts shown consist of cash bonuses earned under the Management Incentive Plan for 2017. |
| (5) | The amounts represent the Company matching contributions under the Company’s 401(k) plan for the periods in which they accrued. All full-time employees are eligible to participate in the Company’s 401(k) plan. |
| (6) | Messrs. Kirkland and Sankpal became named executive officers in 2017 and therefore only fiscal 2017 compensation is provided. |
41
(1) The amounts shown are for amounts earned in each year, which may differ from annual salaries that are typically adjusted in May and in 2020 included an extra pay period as a result of the calendar and the Company's biweekly pay periods.
(2) The amounts shown may include amounts earned in the applicable year but deferred at the election of the Named Executive Officer pursuant to the Company’s Non-Qualified Deferred Compensation Plan.
(3) Represents the grant date fair value of the stock awards in accordance with FASB ASC Topic 718. The fair values of time-based awards and financial results-driven performance-based awards are determined using the closing price of our common stock on the date of grant; with the number of such results-driven performance-based awards determined by the probable achievement of the underlying performance goals as of the grant date, generally at target amounts. A Monte Carlo valuation model is used for performance-based awards that include a factor based on total shareholder return, which results in a fair value greater than the price of Trimble's stock at the date of grant. For a description of the assumptions used in determining the fair values described in this column, please refer to “Note 13: Employee Stock Benefit Plans” of the Company’s Annual Report on Form 10-K filed on February 26, 2021.
The maximum value of the performance-based 2020 stock awards shown in this column (determined as of the grant date), assuming the highest level of performance is achieved, is as follows: Mr. Painter $9,226,538, Mr. Barnes $3,240,796, Mr. Langley $1,944,422, and Mr. Matthews, $1,944,422. See also the footnotes to the following table.
(4) Consists of cash bonuses earned under the Management Incentive Plan (MIP). No awards were earned under the MIP in fiscal 2020, as the 2020 MIP was initially suspended in March 2020 and then cancelled later in the year.
(5) Consists of various items not reportable in other columns of the table.
(6) Mr. Painter became President and Chief Executive Officer at the beginning of fiscal 2020. The option award shown for Mr. Painter in 2020 is the performance-based option granted to Mr. Painter in connection with his appointment to serve as our CEO and President. The amount included in the above table reflects the grant date fair value of this option award. The grant date fair value of Mr. Painter’s option award was determined by the probable achievement of the underlying performance goals as of the grant date and by using a Monte Carlo valuation model. For a description of the assumptions used in determining the value described in this column, please refer to “Note 13: Employee Stock Benefit Plans” of the Company’s Annual Report on Form 10-K filed on February 26, 2021. Assuming the highest level of performance is
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 43
achieved, the maximum value of Mr. Painter’s option award (determined as of the grant date) is the same as shown in the table.
(7) Mr. Barnes first became a Named Executive Officer in fiscal 2020.
(8) Mr. Berglund became Executive Chairman of the Board at the beginning of fiscal 2020.
(9) Mr. Langley first became a Named Executive Officer in fiscal 2020.
Grants of Plan-Based Awards
The table below lists the
cash bonus incentive opportunities, stock option grants, and restricted stock unitplan-based awards for each of the Named Executive Officers during the fiscal year ended
December 29, 2017. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| GRANTS OF PLAN-BASED AWARDS | |
| | | | | | | Estimated Future Payouts Under Non-Equity
Incentive Plan Awards (1) | | | Estimated Possible Payout Under Equity
Incentive Plan Awards | | | | | | | | | | | | | |
| Name | | Award Type | | Grant Date | | Threshold | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#) | | | All Other
Option
Awards:
Number
of
Underlying
Options (#) | | | Exercise
or Base
Price of
Option
Awards ($/
Share) | | | Grant
Date Fair
Value of
Stock and
Option
Awards
(2) | |
| Steven W. Berglund | | Cash Incentive | | | | | | | | | $1,107,500 | | | | $3,322,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Relative TSR
PRSU Award | | 5/2/17 (3) | | | | | | | | | | | | | | | 42,314 | | | | 84,628 | | | | 169,256 | | | | | | | | | | | | | | | | $4,471,744 | |
| | | Financial Performance
PRSU Award | | 5/2/17 (4) | | | | | | | | | | | | | | | 21,157 | | | | 42,314 | | | | 84,628 | | | | | | | | | | | | | | | | $1,524,997 | |
| | | RSU Award | | 11/13/17 (5) (6) | | | | | | | | | | | | | | | | | | | | | | | | | | | 37,599 | | | | | | | | | | | | $1,541,183 | |
| Robert Painter | | Cash Incentive | | | | | | | | | $332,000 | | | | $996,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Relative TSR
PRSU Award | | 5/2/17 (3) | | | | | | | | | | | | | | | 5,250 | | | | 10,500 | | | | 21,000 | | | | | | | | | | | | | | | | $554,820 | |
| | | Financial Performance
PRSU Award | | 5/2/17 (4) | | | | | | | | | | | | | | | 5,250 | | | | 10,500 | | | | 21,000 | | | | | | | | | | | | | | | | $378,420 | |
| | | RSU Award | | 11/09/17 (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,451 | | | | | | | | | | | | $667,253 | |
| James A. Kirkland | | Cash Incentive | | | | | | | | | $240,000 | | | | $720,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Relative TSR
PRSU Award | | 5/2/17 (3) | | | | | | | | | | | | | | | 4,750 | | | | 9,500 | | | | 19,000 | | | | | | | | | | | | | | | | $501,980 | |
| | | Financial Performance
PRSU Award | | 5/2/17 (4) | | | | | | | | | | | | | | | 4,750 | | | | 9,500 | | | | 19,000 | | | | | | | | | | | | | | | | $342,380 | |
| | | RSU Award | | 11/09/17 (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,884 | | | | | | | | | | | | $603,695 | |
| Darryl Matthews | | Cash Incentive | | | | | | | | | $331,200 | | | | $993,600 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Relative TSR
PRSU Award | | 5/2/17 (3) | | | | | | | | | | | | | | | 4,750 | | | | 9,500 | | | | 19,000 | | | | | | | | | | | | | | | | $501,980 | |
| | | Financial Performance
PRSU Award | | 5/2/17 (4) | | | | | | | | | | | | | | | 4,750 | | | | 9,500 | | | | 19,000 | | | | | | | | | | | | | | | | $342,380 | |
| | | RSU Award | | 11/09/17 (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,884 | | | | | | | | | | | | $603,695 | |
| Sachin Sankpal | | Cash Incentive | | | | | | | | | $318,400 | | | | $955,200 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Relative TSR
PRSU Award | | 5/2/17 (3) | | | | | | | | | | | | | | | 4,750 | | | | 9,500 | | | | 19,000 | | | | | | | | | | | | | | | | $501,980 | |
| | | Financial Performance
PRSU Award | | 5/2/17 (4) | | | | | | | | | | | | | | | 4,750 | | | | 9,500 | | | | 19,000 | | | | | | | | | | | | | | | | $342,380 | |
| | | RSU Award | | 11/09/17 (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,884 | | | | | | | | | | | | $603,695 | |
| (1) | The annual target cash incentive opportunities under the MIP for the 2017 fiscal year were as follows: Mr. Berglund, 125% of his annual base salary; Mr. Kirkland, 60% of his annual base salary; and Messrs. Painter, Matthews, and Sankpal, 80% of each of their respective annual base salaries. |
| (2) | The fair value of performance-based restricted stock units with vesting tied to our total shareholder return are valued as of the grant date using a Monte Carlo simulation, which results in a value greater than the price of Trimble’s stock at the date of grant. The fair value of time-based and other performance-based restricted stock units is determined using the closing price of our
|
42
January 1, 2021. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| GRANTS OF PLAN-BASED AWARDS |
| Name | Award Type | Grant Date | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1) | | Estimated Possible Payout Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards
($/Share) | Grant Date Fair Value of Stock and Option Awards (2) ($) |
| Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) |
| Robert G. Painter | Option Award | 1/4/2020 (3) | | | | | 69,616 | | 208,847 | | 208,847 | | | | 41.51 | | 2,999,982 | |
| RSU Award | 1/4/2020 (4) | | | | | | | | 24,090 | | | | 999,976 | |
| RSU Award | 5/27/2020 (5) | | | | | | | | 72,872 | | | | 3,099,975 | |
| Performance RSU Award | 5/27/2020 (6) | | | | | — | | 36,436 | | 72,872 | | | | | 2,492,951 | |
| Performance RSU Award | 10/30/2020 (6) | | | | | — | | 30,636 | | 61,272 | | | | | 2,120,318 | |
| David G. Barnes | RSU Award | 5/27/2020 (5) | | | | | | | | 27,374 | | | | 1,164,490 | |
| Performance RSU Award | 5/27/2020 (6) | | | | | — | | 13,687 | | 27,374 | | | | | 936,465 | |
| Performance RSU Award | 10/30/2020 (6) | | | | | — | | 9,882 | | 19,764 | | | | | 683,933 | |
| Steven W. Berglund | RSU Award | 1/4/2020 (7) | | | | | | | | 77,089 | | | | 3,199,964 | |
| James Langley | RSU Award | 5/27/2020 (5) | | | | | | | | 16,424 | | | | 698,677 | |
| Performance RSU Award | 5/27/2020 (6) | | | | | — | | 8,212 | | 16,424 | | | | | 561,865 | |
| Performance RSU Award | 10/30/2020 (6) | | | | | — | | 5,929 | | 11,858 | | | | | 410,346 | |
| Darryl Matthews | RSU Award | 5/27/2020 (5) | | | | | | | | 16,424 | | | | 698,677 | |
| Performance RSU Award | 5/27/2020 (6) | | | | | — | | 8,212 | | 16,424 | | | | | 561,865 | |
| Performance RSU Award | 10/30/2020 (6) | | | | | — | | 5,929 | | 11,858 | | | | | 410,346 | |
(1) No non-equity incentive plan awards were earned in fiscal 2020, as the 2020 Management Incentive Plan was suspended in March before performance goals were formally set and then cancelled later in the year.
(2) The fair values of stock awards were calculated in accordance with FASB ASC Topic 718. The fair value of time-based awards is determined using the closing price of our common stock on the date of grant. The fair value of 2020 performance-based awards is determined by the probable achievement of the underlying performance goals as of the grant date and by using a Monte Carlo valuation model for the factor based on total shareholder return, which results in a value greater than the price of Trimble's stock at the date of grant, except for the performance stock option granted to Mr. Painter which requires the payment of an exercise price at the time of exercise. For a description of the assumptions used in determining the values described in these columns, please refer to “Note 13: Employee Stock Benefit Plans” of the Company’s Annual Report on Form 10-K filed on February 26, 2021.
The aggregate maximum value, per Named Executive Officer, of the performance RSU awards (determined as of the grant date), assuming the highest level of performance is achieved, is as follows: Mr. Painter $9,226,538, Mr. Barnes $3,240,796, Mr. Langley $1,944,422, and Mr. Matthews, $1,944,422. The maximum value of Mr. Painter’s option award, assuming the highest level of performance is achieved, is the same as the fair value calculated as set forth in the prior paragraph and shown in the table.
44 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
| common stock on the date of grant and the total expense associated with the performance-based awards is based upon the probable achievement of the underlying revenue and operating income performance goals as of the grant date. Assuming the highest level of performance is achieved under the applicable performance conditions, the maximum possible value of these performance-based RSUs, using the grant date fair value is $18.9 million. Maximum achievement value assuming highest level of performance is achieved per Named Executive officer is as follows: Mr. Berglund $12.0 million, Mr. Painter $1.8 million, Messrs. Kirkland, Matthews, and Sankpal $1.7 million. The fair value of stock options are valued as of the grant date using the binomial valuation model. The fair values were calculated in accordance with FASB ASC 718. For a description of the assumptions used in determining the values described in these columns, please refer to “Note 13: Employee Stock Benefit Plans” of the Company’s Annual Report on Form 10-K filed on February 26, 2018. These amounts do not necessarily represent actual value that may be realized. |
| (3) | These Relative TSR PRSU awards granted on May 2, 2017 will vest after the completion of the performance period which ends May 15, 2020, with an annual scoring window on May 15, 2018, May 15, 2019 and May 15, 2020, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period beginning on May 2, 2017 and ending on May 15, 2020. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSUs vest depending on the Company’s relative TSR of its common stock as compared to the TSR of the other companies included in the S&P 500 Index over the performance period, with 100% of the target PRSUs vesting if the Company’s TSR is at the 50th percentile. |
| (4) | These Financial Performance PRSU awards granted on May 2, 2017 will vest after the completion of the performance period which ends January 3, 2020, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period as of the end of January 3, 2020. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSUs vest depending on the Company’s revenue and operating income percentage performance. |
| (5) | These time-based RSU grants vests with the first installment vesting after one year (more specifically, one year from the designated “vesting start date”, which is generally set at the 15th of the month in which the grant is made if the grant is made by the 15th day of a month, or the 15th of the following month if the grant is made after the 15th day of a month) such that the RSUs become fully vested three years from the vesting start date, subject to each officer’s continued employment with the Company through such anniversary date. Upon vesting, the RSUs may be settled by issuing the number of shares shown in the table, or by making a cash payment equal to the fair market value of the shares on the vesting date, or a combination of shares and cash, at the discretion of the Company. |
| (6) | These time-based RSUs will vest upon retirement under Trimble’s Age & Service program. |
43
(3) This performance stock option will vest in 1/3 increments upon achievement stock appreciation goals reflecting increases of 10%, 20% and 30% above the exercise price at any time within five years from the date of grant, subject to continued service by Mr. Painter for at least three years from the date of grant.
(4) This time-based RSU grant will vest on January 15, 2023, which is approximately three years from the date of grant.
(5) These time-based RSU awards vest over three years, with one third vesting on each anniversary of the designated “vesting start date”, which is generally set at the 15th of the month in which the grant is made if the grant is made by the 15th day of a month, or the 15th of the following month if the grant is made after the 15th day of a month.
(6) These PRSU awards will vest after the completion of the performance period which ends on May 15, 2023, subject to each officer's continued employment. The PRSUs granted on May 27, 2020 measure performance over 3 separate measurement periods of 1, 2 and 3 year terms beginning May 15, 2020, and the PRSUs granted October 30, 2020 are scored over a single measurement period of approximately 2 ½ years. A multiplier of between 0%-200% of the target number of awards vest based on the Company's TSR as compared to the TSR of all companies included in the S&P 400 at the beginning of the Performance Period, with a multiplier of 1.0 if the Company’s TSR is at the 50th percentile.
(7) If not already vested, these time-based RSU awards will vest upon retirement under the Trimble Age & Service Program.
Outstanding Equity Awards at Fiscal
Year-EndThe table below shows the stock options and stock awards outstanding for each of the Named Executive Officers as of the fiscal year ended January 1, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END |
| Name | Grant Date | Option Awards | | Stock Awards |
Number of securities underlying unexercised options exercisable
(#) | Number of securities underlying unexercised options unexercisable
(#) | Option exercise price ($) | Option expiration date | | Number of shares or units of stock that have not vested
(#) | Market value of shares or units of stock that have not vested
(1) ($) | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested
(#) (2) | Equity Incentive Plan Awards:
market or payout value of unearned shares, units or other rights that have not vested
(2) ($) |
| Robert G. Painter | 5/7/2015 | (3) | 2,660 | — | | 25.29 | 5/7/2022 | | | | | |
| 2/1/2016 | (3) | 45,000 | — | | 19.28 | 2/1/2023 | | | | | |
| 5/1/2018 | (4) | | | | | | | | 10,592 | 707,228 | |
| 11/8/2018 | (5) | | | | | | 6,747 | 450,497 | | | |
| 5/7/2019 | (6) | | | | | | | | 26,737 | 1,785,229 |
| 12/17/2019 | (5) | | | | | | 22,449 | 1,498,920 | | | |
| 1/4/2020 | (7) | | | | | | 24,090 | 1,608,489 | | | |
| 1/4/2020 | (8) | — | | 208,847 | | 41.51 | 1/4/2030 | | | | | |
| 5/27/2020 | (5) | | | | | | 72,872 | 4,865,663 | | | |
| 5/27/2020 | (9) | | | | | | | | 36,436 | 2,432,832 |
| 10/30/2020 | (9) | | | | | | | | 30,636 | 2,045,566 |
| David G. Barnes | 12/2/2019 | (10) | — | | 29,455 | | 40.40 | 12/2/2029 | | | | | |
| 12/2/2019 | (11) | | | | | | 20,000 | 1,335,400 | | | |
| 5/27/2020 | (5) | | | | | | 27,374 | 1,827,762 | | | |
| 5/27/2020 | (9) | | | | | | | | 13,687 | 913,881 |
| 10/30/2020 | (9) | | | | | | | | 9,882 | 659,821 |
| Steven W. Berglund | 5/1/2018 | (4) | | | | | | | | 96,821 | | 6,464,738 |
| 11/8/2018 | (5)(12) | | | | | | 17,995 | 1,201,526 | | | |
| 5/7/2019 | (6) | | | | | | | | 136,283 | | 9,099,616 |
| 11/12/2019 | (5)(12) | | | | | | 33,124 | 2,211,689 | | | |
| 1/4/2020 | (5)(12) | | | | | | 77,089 | 5,147,233 | | | |
| James Langley | 4/17/2019 | (13) | | | | | | 5,556 | 370,974 | | | |
| 5/7/2019 | (6) | | | | | | | | 972 | 64,900 |
| 11/12/2019 | (5) | | | | | | 18,172 | 1,213,344 | | | |
| 5/27/2020 | (5) | | | | | | 16,424 | 1,096,630 | | | |
| 5/27/2020 | (9) | | | | | | | | 8,212 | 548,315 |
| 10/30/2020 | (9) | | | | | | | | 5,929 | 395,879 |
| Darryl Matthews | 5/1/2018 | (4) | | | | | | | | 7,766 | 518,536 | |
| 11/8/2018 | (5) | | | | | | 4,804 | 320,763 | | | |
| 5/7/2019 | (6) | | | | | | | | 16,042 | 1,071,124 |
| 11/12/2019 | (5) | | | | | | 9,086 | 606,672 | | | |
| 5/27/2020 | (5) | | | | | | 16,424 | 1,096,630 | | | |
| 5/27/2020 | (9) | | | | | | | | 8,212 | 548,315 |
| 10/30/2020 | (9) | | | | | | | | 5,929 | 395,879 |
(1) The market value of the unvested portion of these RSU awards was calculated using the closing price of the Company’s Common Stock at fiscal year end, which was $66.77. This table excludes a number of PRSU awards that vested on the last day of the fiscal year but were not settled until February 19, 2021.
(2) Between 0% and 200% (or 250% in the case of awards granted in 2019, which have a TSR multiplier) of the PRSU awards vest depending on satisfaction of the applicable performance conditions, in each case based upon linear
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 45
interpolation between threshold and maximum achievement. In accordance with SEC rules, the number and value shown for these awards reflect either (x) target achievement in the case of awards tracking at or below target level, which is the case for the all the awards shown, or (y) maximum achievement in the case of awards tracking above target level. The value is based on the closing price of the Company’s Common Stock at fiscal year end, which was $66.77.
(3) These stock options vest 50% on the second anniversary of the date of the grant and 1/48th each month thereafter such that the stock options become fully vested four years from the date of grant.
(4) These TSR PRSU awards granted on May 1, 2018 will vest depending on our TSR relative to the TSRs of the component stocks of the S&P 500 Index over the performance period which ends May 15, 2021, with an annual scoring window on May 15, 2019, May 15, 2020 and May 15, 2021, subject to satisfaction of the performance conditions as well as continued employment with the Company through the vesting date.
(5) These time-based RSU awards vest over three years, with one third vesting on each anniversary of the designated “vesting start date”, which is generally set at the 15th of the month in which the grant is made if the grant is made by the 15th day of a month, or the 15th of the following month if the grant is made after the 15th day of a month.
(6) These PRSU awards granted on May 7, 2019, which have multiple performance factors, will vest after the completion of the performance period which began on December 29,
2017. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OUTSTANDING EQUITY AWARDS | |
| Name | | | | Option Awards | | | Stock Awards | |
| | Grant Date | | Number of
securities
underlying
unexercised
options
exercisable
(#) | | | Number of
securities
underlying
unexercised
options
unexercisable
(#) | | | Option
exercise
price | | | Option
expiration
date | | | Number
of shares
or units
of stock
that
have not
vested
(#) | | | Market value
of shares or
units of stock
that have not
vested
(11) | | | Equity Incentive plan
awards: number of
unearned shares, units or
other rights that
have not vested
(#) (12) | | | Equity Incentive
plan awards:
market or payout value of
unearned shares, units or
other rights that
have not vested
(11) | |
Steven W. Berglund | | 10/28/2011 (1) | | | 400,000 | | | | — | | | | $20.64 | | | | 10/28/2018 | | | | | | | | | | | | | | | | | |
| | | 5/1/2012 (1) | | | 250,000 | | | | — | | | | $26.98 | | | | 5/1/2019 | | | | | | | | | | | | | | | | | |
| | | 10/29/2012 (1) | | | 200,000 | | | | — | | | | $23.53 | | | | 10/29/2019 | | | | | | | | | | | | | | | | | |
| | | 5/7/2013 (2) | | | 166,675 | | | | — | | | | $28.08 | | | | 5/7/2020 | | | | | | | | | | | | | | | | | |
| | | 10/29/2013 (2) | | | 215,000 | | | | — | | | | $28.20 | | | | 10/29/2020 | | | | | | | | | | | | | | | | | |
| | | 5/9/2014 (2) | | | 115,181 | | | | 13,394 | | | | $35.02 | | | | 5/9/2021 | | | | | | | | | | | | | | | | | |
| | | 11/6/2014 (2) | | | 138,750 | | | | 41,250 | | | | $27.48 | | | | 11/6/2021 | | | | | | | | | | | | | | | | | |
| | | 7/8/2015 (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 100,000 | | | | $4,064,000 | |
| | | 11/6/2015 (6) | | | | | | | | | | | | | | | | | | | | | | | | | | | 75,370 | | | | $3,063,037 | |
| | | 11/6/2015 (4) | | | | | | | | | | | | | | | | | | | 32,107 | | | | $1,304,828 | | | | | | | | | |
| | | 5/3/2016 (7) | | | | | | | | | | | | | | | | | | | | | | | | | | | 123,400 | | | | $5,014,976 | |
| | | 6/29/2016 (8) | | | | | | | | | | | | | | | | | | | | | | | | | | | 61,700 | | | | $2,507,488 | |
| | | 11/10/2016 (4) | | | | | | | | | | | | | | | | | | | 41,339 | | | | $1,680,017 | | | | | | | | | |
| | | 5/2/2017 (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | 84,628 | | | | $3,439,282 | |
| | | 5/2/2017 (10) | | | | | | | | | | | | | | | | | | | | | | | | | | | 42,314 | | | | $1,719,641 | |
| | | 11/13/2017 (4) (13) | | | | | | | | | | | | | | | | | | | 37,599 | | | | $1,528,023 | | | | | | | | | |
Robert Painter | | 5/1/2012 (1) | | | 8,000 | | | | — | | | | $26.98 | | | | 5/1/2019 | | | | | | | | | | | | | | | | | |
| | | 5/7/2013 (2) | | | 5,300 | | | | — | | | | $28.08 | | | | 5/7/2020 | | | | | | | | | | | | | | | | | |
| | | 10/29/2013 (2) | | | 6,000 | | | | — | | | | $28.20 | | | | 10/29/2020 | | | | | | | | | | | | | | | | | |
| | | 5/9/2014 (2) | | | 3,135 | | | | 365 | | | | $35.02 | | | | 5/9/2021 | | | | | | | | | | | | | | | | | |
| | | 11/6/2014 (2) | | | 4,046 | | | | 1,204 | | | | $27.48 | | | | 11/6/2021 | | | | | | | | | | | | | | | | | |
| | | 5/7/2015 (2) (3) | | | 1,717 | | | | 943 | | | | $25.29 | | | | 5/7/2022 | | | | 1,770 | | | | $71,933 | | | | | | | | | |
| | | 11/6/2015 (3) | | | | | | | | | | | | | | | | | | | 5,000 | | | | $203,200 | | | | | | | | | |
| | | 2/1/2016 (2) (4) | | | | | | | 45,000 | | | | $19.28 | | | | 2/1/2023 | | | | 20,100 | | | | $816,864 | | | | | | | | | |
| | | 5/3/2016 (7) | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,750 | | | | $1,005,840 | |
| | | 6/29/2016 (8) | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,750 | | | | $518,160 | |
| | | 11/10/2016 (4) | | | | | | | | | | | | | | | | | | | 6,282 | | | | $255,300 | | | | | | | | | |
| | | 5/2/2017 (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,500 | | | | $426,720 | |
| | | 5/2/2017 (10) | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,500 | | | | $426,720 | |
| | | 11/9/2017 (4) | | | | | | | | | | | | | | | | | | | 16,451 | | | | $668,569 | | | | | | | | | |
James A. Kirkland | | 5/1/2012 (1) | | | 40,000 | | | | — | | | | $26.98 | | | | 5/1/2019 | | | | | | | | | | | | | | | | | |
| | | 10/29/2012 (1) | | | 430 | | | | — | | | | $23.53 | | | | 10/29/2019 | | | | | | | | | | | | | | | | | |
| | | 5/7/2013 (2) | | | 25,400 | | | | — | | | | $28.08 | | | | 5/7/2020 | | | | | | | | | | | | | | | | | |
| | | 10/29/2013 (2) | | | 26,000 | | | | — | | | | $28.20 | | | | 10/29/2020 | | | | | | | | | | | | | | | | | |
| | | 5/9/2014 (2) | | | 11,197 | | | | 1,303 | | | | $35.02 | | | | 5/9/2021 | | | | | | | | | | | | | | | | | |
| | | 11/6/2014 (2) | | | 23,125 | | | | 6,875 | | | | $27.48 | | | | 11/6/2021 | | | | | | | | | | | | | | | | | |
| | | 7/8/2015 (5) | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,500 | | | | $508,000 | |
| | | 11/6/2015 (6) | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,250 | | | | $457,200 | |
| | | 11/6/2015 (4) | | | | | | | | | | | | | | | | | | | 8,075 | | | | $328,168 | | | | | | | | | |
| | | 5/3/2016 (7) | | | | | | | | | | | | | | | | | | | | | | | | | | | 23,600 | | | | $959,104 | |
| | | 6/29/2016 (8) | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,800 | | | | $479,552 | |
| | | 11/10/2016 (4) | | | | | | | | | | | | | | | | | | | 7,906 | | | | $321,300 | | | | | | | | | |
| | | 5/2/2017 (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,500 | | | | $386,080 | |
| | | 5/2/2017 (10) | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,500 | | | | $386,080 | |
| | | 11/9/2017 (4) | | | | | | | | | | | | | | | | | | | 14,884 | | | | $604,886 | | | | | | | | | |
Darryl Matthews | | 9/1/2015 (4) | | | | | | | | | | | | | | | | | | | 8,656 | | | | $351,780 | | | | | | | | | |
| | | 11/6/2015 (4) (6) | | | | | | | | | | | | | | | | | | | 2,550 | | | | $103,632 | | | | 7,500 | | | | $304,800 | |
| | | 5/3/2016 (7) | | | | | | | | | | | | | | | | | | | | | | | | | | | 22,000 | | | | $894,080 | |
| | | 6/29/2016 (8) | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,000 | | | | $447,040 | |
| | | 11/10/2016 (4) | | | | | | | | | | | | | | | | | | | 7,370 | | | | $299,517 | | | | | | | | | |
| | | 5/2/2017 (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,500 | | | | $386,080 | |
| | | 5/2/2017 (10) | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,500 | | | | $386,080 | |
| | | 11/9/2017 (4) | | | | | | | | | | | | | | | | | | | 14,884 | | | | $604,886 | | | | | | | | | |
Sachin Sankpal | | 11/6/2015 (4) (6) | | | | | | | | | | | | | | | | | | | 850 | | | | $34,544 | | | | 2,500 | | | | $101,600 | |
| | | 11/6/2015 (4) | | | | | | | | | | | | | | | | | | | 9,866 | | | | $400,954 | | | | | | | | | |
| | | 5/3/2016 (7) | | | | | | | | | | | | | | | | | | | | | | | | | | | 22,000 | | | | $894,080 | |
| | | 6/29/2016 (8) | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,000 | | | | $447,040 | |
| | | 11/10/2016 (4) | | | | | | | | | | | | | | | | | | | 7,370 | | | | $299,517 | | | | | | | | | |
| | | 5/2/2017 (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,500 | | | | $386,080 | |
| | | 5/2/2017 (10) | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,500 | | | | $386,080 | |
| | | 11/9/2017 (4) | | | | | | | | | | | | | | | | | | | 14,884 | | | | $604,886 | | | | | | | | | |
44
2018 and ends December 31, 2021, subject to each officer's continued employment. A base of between 0%-200% of the target number of shares vest depending on the Company's revenue and EBITDA predetermined goals. An additional multiplier of between 75% and 125% is then applied based on the Company's TSR as compared to the TSR of all companies included in the S&P 400 at the beginning of the Performance Period, with a multiplier of 1.1 if the Company’s TSR is at the 50th percentile.
| (1) | The stock options vest 40% on the second anniversary of the date of the grant and 1/60th each month thereafter such that the stock options become fully vested five(7) This time-based RSU award will vest on January 15, 2023, which is approximately three years from the date of grant. |
| (2) | These stock options vest 50% on the second anniversary of the date of the grant and 1/48th each month thereafter such that the stock options become fully vested four years from the date of grant. |
| (3) | These RSU awards vest in full on the third anniversary of the grant date, subject to each Named Executive Officer’s continued employment with the Company through such anniversary date. Upon vesting, the restricted stock units may be settled by issuing the number of shares shown in the table, or by making a cash payment equal to the fair market value of the shares on the vesting date, or a combination of shares and cash, at the discretion of the Company. |
| (4) | One third of these RSU awards vest on the designated “vesting start date”, which is generally set at the 15th of the month in which the grant is made if the grant is made by the 15th day of a month, or the 15th of the following month if the grant is made after the 15th day of a month such that these RSU awards become fully vested three years from the date of grant, subject to each Named Executive Officer’s continued employment with the Company through such anniversary date. Upon vesting, these RSUs may be settled by issuing the number of shares shown in the table, or by making a cash payment equal to the fair market value of the shares on the vesting date, or a combination of shares and cash, at the discretion of the Company. |
| (5) | These Relative TSR PRSU awards granted on July 8, 2015 will vest after the completion of the performance period which ends March 31, 2018, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period beginning on July 8, 2015 and ending on March 31, 2018. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSU awards vest depending on the Company’s relative TSR of its common stock as compared to the TSR of the component stocks of the S&P 500 Index over the performance period, with 100% of the target PRSU awards vesting if the Company’s TSR is at the 50th percentile. |
| (6) | These Relative TSR PRSU awards granted on November 6, 2015 will vest after the completion of the performance period which ends March 31, 2018, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period beginning on November 6, 2015 and ending on March 31, 2018. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSU awards vest depending on the Company’s relative TSR of its common stock as compared to the TSR of the component stocks of the S&P 500 Index over the performance period, with 100% of the target PRSU awards vesting if the Company’s TSR is at the 50th percentile. |
| (7) | These Relative TSR PRSU awards granted on May 3, 2016 will vest after the completion of the performance period which ends May 30, 2019, subject to each officer’s continued employment with the Company through the vesting date of the third and final tranche and satisfaction of performance conditions for the performance period beginning on May 30, 2016 and ending on May 30, 2019. The award is divided into equally weighted tranches withone-,two- and three-year measurement periods, with vesting occurring on May 30, 2019 for all PRSU awards based on continued employment. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSU awards vest depending on the Company’s relative TSR of its common stock as compared to the TSR of the component stocks of the S&P 500 Index over the performance period, with 100% of the target PRSUs vesting if the Company’s TSR is at the 50th percentile. |
| (8) | These Financial Performance PRSU awards granted on June 29, 2016 will vest after the completion of the performance period which ends December 28, 2018, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period beginning on December 30, 2017 and ending on December 28, 2018. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSU awards vest depending on the Company’s revenue andnon-GAAP operating income margin performance during fiscal 2018. |
| (9) | These Relative TSR PRSU awards granted on May 2, 2017 will vest after the completion of the performance period which ends May 15, 2020, with an annual scoring window on May 15, 2018, May 15, 2019 and May 15, 2020, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period beginning on May 2, 2017 and ending on May 15, 2020. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSU awards vest depending on the Company’s relative TSR of its common stock as compared to the TSR of the other companies included in the S&P 500 Index over the performance period, with 100% of the target PRSU awards vesting if the Company’s TSR is at the 50th percentile. |
| (10) | These Financial Performance PRSU awards granted on May 2, 2017 will vest after the completion of the performance period which ends January 3, 2020, subject to each officer’s continued employment with the Company through the vesting date and satisfaction of performance conditions for the performance period as of the end of January 3, 2020. As described under “Compensation Discussion and Analysis”, in each case, between 0% and 200% of the target number of PRSU awards vest depending on the Company’s revenue and operating income percentage performance. |
45
| (11) | The market value of the unvested portion of these RSU and PRSU awards for each Named Executive Officer was calculated by multiplying the number of unvested shares by the closing price of the Company’s Common Stock on December 29, 2017, which was $40.64. |
| (12) | The number and value of PRSU awards shown reflect the target number of shares. As described under “Executive Compensation—Compensation Discussion and Analysis,” in each case, between 0% and 200% of the PRSU awards vest depending on: (i) our TSR relative to the TSRs of the component stocks of the S&P 500 Index over the relevant performance period or (ii) the Company’s attainment of certain 2018 and 2019 operating income and revenue performance. |
| (13) | These time-based RSU awards will vest upon retirement under Trimble’s Age & Service program. |
(8) This performance stock option vests in 1/3 increments upon achievement stock appreciation goals reflecting increases of 10%, 20% and 30% above the exercise price at any time within five years from the date of grant, subject to continued service by Mr. Painter for three years from the date of grant. All of the stock appreciation goals had been reached as of the end of fiscal 2020, such that this award remains subject only to time-based vesting.
(9) These PRSU awards will vest after the completion of the performance period, subject to each officer's continued employment. The PRSUs granted on May 27, 2020 measure performance over 3 separate measurement periods of 1, 2 and 3 year terms, with performance start date of May 15, 2020 and ends on May 15, 2023. The PRSUs granted October 30, 2020 are scored over a single measurement period of approximately 2 ½ years, with performance start date of October 15, 2020 and ends on May 15, 2023. A multiplier of between 0%-200% of the target number of awards vest based on the Company's TSR as compared to the TSR of all companies included in the S&P 400 at the beginning of the Performance Period, with a multiplier of 1.0 if the Company’s TSR is at the 50th percentile.
(10) These options will vest over five years, with 40% vesting on the second anniversary of the grant date and the remaining 60% vesting equally on a monthly basis thereafter.
(11) This time-based RSU award will vest on December 15, 2022, which is approximately three years from the date of grant.
(12) If not already vested, these time-based RSU awards will vest upon retirement under the Trimble Age & Service Program.
(13) These time-based RSU awards vest over four years, with one fourth vesting each year.
Option Exercises and Stock Vested
The table below shows the aggregate number of shares subject to stock options that were exercised by each of the Named Executive Officers and the aggregate number of shares acquired through vesting of RSU awards, during the fiscal year ended
December 29, 2017. | | | | | | | | | | | | | | | | | | | | |
| OPTION EXERCISES AND STOCK VESTED |
| | | Option Awards | | Stock Awards |
| Name | | Number of shares
acquired on
exercise (#) | | Value realized
on exercise (1) | | Number of shares
acquired on
vesting (#) | | Value realized
on vesting (2) |
Steven W. Berglund | | | | 200,000 | | | | | $3,784,343 | | | | | 154,381 | | | | | $6,056,454 | |
Robert Painter | | | | 39,000 | | | | | $702,033 | | | | | 15,910 | | | | | $530,867 | |
James A. Kirkland | | | | 115,570 | | | | | $1,552,571 | | | | | 25,899 | | | | | $1,030,952 | |
Darryl Matthews | | | | — | | | | | $— | | | | | 14,506 | | | | | $572,103 | |
Sachin Sankpal | | | | — | | | | | $— | | | | | 14,030 | | | | | $574,665 | |
| (1) | The value realized on exercise of stock option awards is determined by multiplying the difference between the closing price of a share of our Common Stock on the NASDAQ on the exercise date and the option exercise price by the number of shares exercised. |
| (2) | The value realized on vesting of stock awards is determined by multiplying the closing price of a share of our Common Stock on the date of vesting by the number of shares vesting. |
January 1, 2021.
| | | | | | | | | | | | | | | | | |
| OPTION EXERCISES AND STOCK VESTED |
| Option Awards | | Stock Awards |
| Name | Number of shares acquired on exercise (#) | Value realized
on exercise (1) ($) | | Number of shares acquired on vesting (#) | Value realized
on vesting (2) ($) |
| Robert G. Painter | 14,750 | 298,937 | | 58,051 | 3,107,022 |
| David G. Barnes | | | | | |
| Steven W. Berglund | | | | 284,874 | 14,734,324 |
| James Langley | | | | 10,801 | 580,168 |
| Darryl Matthews | | | | 53,419 | 2,828,765 |
(1) Determined by multiplying the difference between the closing price of a share of our Common Stock on the exercise date and the option exercise price by the number of shares exercised.
(2) Determined by multiplying the closing price of a share of our Common Stock on the distribution date of vesting by the number of shares vesting. Includes PRSU awards vested on January 1, 2021 and settled on February 19, 2021.
Non-Qualified46 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
The Company has adopted aNon-Qualified Deferred Compensation Plan (“DCP”DCP”) in which certain employees, officers and members of the Board of Directors may participate. The Company has not made any contributions to the DCP on behalf of the members of the Board of Directors or the Named Executive Officers, even though the Company has the ability to do so under the terms of the DCP. The Company determined to suspend the DCP as of the beginning of fiscal 2021, although prior contributions will continue to be held in the DCP in accordance with its terms.
The terms of the DCP while in effect were as follows: Participants in the DCP may elect to defer a portion of their salary, bonus or director fees in accordance with the terms of the DCP. Participation in the DCP is voluntary. A participant in the DCP may defer a minimum of 5% of the participant’s base salary and a maximum of: 90% of base salary, 85% of bonus or 100% of
director’sdirector fees.
The Company has not made any contributions to the DCP on behalf of the members of the Board of Directors or the Named Executive Officers, even though the Company has the ability to do so under the terms of the DCP.
Contributions by participants are held in an irrevocable grantor trust for the benefit of the participants, and are subject to claims by the Company’s general creditors. Upon enrollment in the DCP, participants may choose from a selection of measurement funds in which to place their contributions. The DCP’s measurement funds are similar to the funds available to employees who participate in the Company’s 401(k) retirement plan. Participants may elect to receive withdrawals from the DCP in the form of scheduled distributions, retirement benefits, or in the event of a change in control, as defined in the DCP. The DCP also provides for distributions in the event of a participant’s termination of employment, disability or death. In addition, participants may request withdrawals from the DCP in the event of a severe financial hardship.
46
The table below shows contributions toactivity under the DCP by, or on behalf of, each ofinvolving the Named Executive Officers during the fiscal year ended December 29, 2017.
| | | | | | | | | | | | | | | | | | | | |
| NON-QUALIFIED DEFERRED COMPENSATION | |
| Name | | Executive
Contributions
in 2017 (1) | | | Company
Contributions
in 2017 (2) | | | Aggregate
Earnings
in 2017 (3) | | | Aggregate
Withdrawals/
Distributions in
2017 | | | Aggregate
Balance at
12/29/2017 | |
| Steven W. Berglund | | | $— | | | | $— | | | | $— | | | | $— | | | | $— | |
| Robert Painter | | | $— | | | | $— | | | | $8,037 | | | | $— | | | | $37,354 | |
| James A. Kirkland | | | $— | | | | $— | | | | $— | | | | $— | | | | $— | |
| Darryl Matthews | | | $— | | | | $— | | | | $— | | | | $— | | | | $— | |
| Sachin Sankpal | | | $— | | | | $— | | | | $— | | | | $— | | | | $— | |
| (1) | The amount of each Named Executive Officer’s contribution to the DCP, if any, is included in the “Salary” column of the Summary Compensation Table for each respective officer for the fiscal year in which such compensation was earned. |
| (2) | The amount of the Company’s contribution to the DCP for each Named Executive Officer, if any, has been included in the “All Other Compensation” column of the Summary Compensation Table. |
| (3) | Amounts included in this column are not reported as compensation in the Summary Compensation Table. |
January 1, 2021. There were no contributions by or on behalf of any of the Named Executive Officers in the last three fiscal years.
| | | | | | | | |
| Name | Aggregate
earnings
in last FY (1) ($) | Aggregate
balance at
last FYE ($) |
| Robert G. Painter | 17,064 | | 62,730 | |
| David G. Barnes | — | | — | |
| Steven W. Berglund | — | | — | |
| James Langley | — | | — | |
| Darryl Matthews | — | | — | |
(1) These amounts are not reported as compensation in the Summary Compensation Table.
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble47
Post-Employment Compensation
POST-EMPLOYMENT COMPENSATION
Potential Payments upon Termination or a Change in Control
The Company’s Board of Directors approved a standard form of
change in control“Change In Control” and
severance agreement“Executive Severance” Agreements for executive officers in
2003, and modified this form in 2008 to comply with Section 409A of the Code. In 2017
in order to align
the terms with
current market practices,
and the Company concurrently entered into these agreements
were superseded by new “Executive Severance Agreements” and “Change In Control Severance Agreements,” entered into with the Named Executive
Officers.Officers, other than Mr. Painter and Mr. Berglund. As described below, Mr. Berglund entered into a new Executive Severance Agreement and Change in Control Severance Agreement on February 20, 2019 and Mr. Painter entered into a new Executive Severance Agreement and Change in Control Severance Agreement effective January 4, 2020. The post-employment compensation arrangements provided under these agreements are intended to supersede any post-employment arrangements provided to the Named Executive Officers in their
prior employment agreements or offer letters.
Under the Executive Severance Agreements, if the executive’s employment is terminated by the Company other than for “cause” or if the executive terminates his employment for “good reason” (as such terms are defined in the agreements), and such termination is not covered by the
change-in-control provisions described below
and provided the executive has executed a release of any claims against the Company, the executive will receive:
•100% (200% in the case of Mr. Painter and Mr. Berglund) of the sum of (A) the executive’s annual base salary and (B) the amount of the executive’s target bonus under the Company’sCompany's management incentive plan, which is an amount equal to a percentage of the executive’s annual base salary;
•a prorated portion (based on the number of days of service completed during the performance period) of the actual bonus amount payable for the year in which the termination occurs;
•alump-sum cash payment approximating the cost of COBRA premiums for 14 months (18 months in the case of Mr. Painter and Mr. Berglund) of continued health coverage; and
•pro rata vesting of outstanding equity awards based on the length of time from the date of the grant to the date of termination, with the pro rata portion of any performance basedperformance-based awards settled after the end of the applicable performance period and based additionally on actual attainment of the performance goals. For Mr. Painter and Mr. Berglund, any time-based equity awards (stock options or time-based restricted stock units) would be subject to an additional 12 months service credit toward vesting of the awards in addition to the pro rata vesting described in the prior sentence.
In addition to these severance provisions, certain past equity awards that were granted subject to terms providing for acceleration upon termination without cause or with good reason are grandfathered.
For Mr. Matthews, his initial restricted stock unit award granted on September 1, 2015 would vest in full. For Mr. Painter, 50% of the awards granted to him upon his promotion to CFO on February 1, 2016 would vest.Under the Change in Control Severance Agreements, if the executive’s employment is terminated as described above and the termination occurs within 12 months following a change in control, or within three months prior to the change in control if such termination is in connection with the change in control (collectively referred to as “double trigger” provisions), the executive will instead receive:
•150% (200% in the case of Mr. Painter and Mr. Berglund) of the sum of (A) the executive’s annual base salary and (B) the amount of the executive’s target bonus;
•a prorated portion (based on the number of days of service completed during the performance period) of the actual bonus amount payable for the year in which the termination occurs;
•alump-sum cash payment approximating the cost of COBRA premiums for 14 months (18 months in the case of Mr. Painter and Mr. Berglund) of continued health coverage; and
•accelerated vesting of outstanding equity awards, with settlement and/or conversion of performance basedperformance-based awards based on performance to date at the time of the change of control (to the extent the performance-based vesting condition is satisfied, performance stock unitsperformance-based awards will vest on a pro rata basis based on the length of time since the date of the grant, with vested units being paid out and any remaining unvested units to be converted into time-based restricted stock units of the acquirer).
In addition to these “double trigger” provisions, any past stock options that were granted subject to terms providing for acceleration upon a change in control regardless of termination or continued employment are grandfathered. Further, vesting of any stock options held by Mr. Berglund, and any stock options granted to Mr. Kirkland prior to the date of his Change in Control Severance Agreement (June 5, 2017), will accelerate upon a change in control and, to the extent assumed or substituted by the acquirer, will remain outstanding for one year following the change in control.
48
In the event that the benefits payable under these arrangements constitute “parachute payments” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code (the“Excise Tax”Tax”), then the executive’s benefits under the change in control and severance agreement shall be either: (i) delivered in full, or (ii) delivered as to such lesser extent as would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts results in the receipt by the executive on anafter-tax basis, of the greatest amount of benefits. The foregoing shall take into account the applicable federal, state and local income taxes and the Excise Tax, notwithstanding that all or some portion of
48 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
such benefits may be taxable under Section 4999 of the Code. None of the Executive Severance Agreements or Change
Inin Control Severance Agreements provide for a tax
“gross-up” “gross-up” obligation by the Company in the event that any excise tax becomes payable by a Named Executive Officer.
The foregoing description is qualified in its entirety by the description of
these agreements reported on Form8-K filed by the
Company on February 7, 2017, and by thestandard forms of
Executive Severance Agreement and Change in Control Severance Agreementthese agreements filed as exhibits 10.1 and 10.2 to the Company’s
Report on Form 10-Q filed
August 8, 2017, the agreements with Mr. Painter filed as Exhibits 10.15 and 10.16 to the Company's Report on
June 30, 2017.Form 10-K filed February 26, 2021, and the agreements with Mr. Berglund filed as exhibits 10.1 and 10.2 to the Company’s Report on Form 10-K filed February 22, 2019.
Termination without a Change in Control
The table below sets forth the estimated cash benefits that each respective Named Executive Officer would receive under the Executive Severance Agreements based upon the assumption that a qualifying termination event occurred on
December 29, 2017 (except as otherwise indicated)the last day of the fiscal year ended January 1, 2021, and such termination was not in connection with a change in control.
| | | | | | | | | | | | | | | | | | | | |
POTENTIAL PAYMENTS UPON A QUALIFYING TERMINATION | |
| Name | | Multiple of Salary
and Target Bonus (1) | | | Bonus
accrued
but
unpaid as
of
12/29/2017
(2) | | | Health Benefits (3) | | | Accrued
vacation | | | Total | |
Steven W. Berglund | | | $3,987,000 | | | | $2,222,837 | | | | $40,000 | | | | $— | | | | $6,249,837 | |
Robert Painter | | | $747,000 | | | | $666,625 | | | | $35,000 | | | | $63,846 | | | | $1,512,471 | |
James A. Kirkland | | | $640,000 | | | | $482,007 | | | | $35,000 | | | | $14,727 | | | | $1,171,734 | |
Darryl Matthews | | | $745,200 | | | | $829,507 | | | | $35,000 | | | | $— | | | | $1,609,707 | |
Sachin Sankpal | | | $716,400 | | | | $494,157 | | | | $35,000 | | | | $— | | | | $1,245,557 | |
| (1) | The multiple for Mr. Berglund is 200%. The multiple for the other Named Executive Officers is 100%. |
| (2) | The bonus amount represents the amount of incentive bonus accrued under the MIP as of December 29, 2017. |
| (3) | Reflects alump-sum cash payment approximating the cost of COBRA premiums for 14 months (18 months in the case of Mr. Berglund) of continued health coverage. |
| | | | | | | | | | | | | | |
| POTENTIAL PAYMENTS UPON A QUALIFYING TERMINATION |
| Name | Multiple of Salary and Target Bonus (1) | Bonus accrued but unpaid as of fiscal year end (2) | Health Benefits (3) | Total |
| Robert G. Painter | $1,700,000 | | — | | $41,856 | | $1,741,856 | |
| David G. Barnes | $500,000 | | — | | $21,946 | | $521,946 | |
| Steven W. Berglund | $1,600,000 | | — | | $27,623 | | $1,627,623 | |
| James Langley | $410,000 | | — | | $32,554 | | $442,554 | |
| Darryl Matthews | $439,213 | | — | | $32,554 | | $471,767 | |
(1) The multiple for Mr. Painter and Mr. Berglund is 200%. The multiple for the other Named Executive Officers is 100%. No amount is included for target bonus, since the MIP was cancelled for fiscal 2020.
(2) No cash bonus plan was in effect at fiscal year end.
(3) Reflects a lump-sum cash payment approximating the cost of COBRA premiums for continued health coverage for 14 months (18 months in the case of Mr. Painter and Mr. Berglund).
The amounts shown below reflect
an estimate of the aggregate number of shares underlying each executive’s unvested equity awards that would have vested if a qualifying termination event had occurred on
December 29, 2017January 1, 2021 and such termination was not in connection with a change in control.
| | | | | | | | | | | | | | | | | | | | | | | | |
POTENTIAL ACCELERATION OF EQUITY UPON A QUALIFYING TERMINATION | |
| | | | | |
| Name | | Accelerated Vesting of (1) | | | Aggregate market
value of
accelerated
in-the-money
options as of
12/29/2017
(3) | | | Aggregate market
value of accelerated
restricted stock
units as of
12/29/2017
(3) | | | Total | |
| | Options
(#) | | | Time-Based
RSUs
(#) | | | Performance-Based
RSUs
(#) (2) | | | | |
| Steven W. Berglund (4) | | | 54,644 | | | | 64,875 | | | | 493,913 | | | | $618,124 | | | | $22,709,130 | | | | $23,327,254 | |
| Robert Painter (5) | | | 23,371 | | | | 22,624 | | | | 65,961 | | | | $482,469 | | | | $3,600,097 | | | | $4,082,566 | |
| James A. Kirkland | | | 6,593 | | | | 9,783 | | | | 104,710 | | | | $77,820 | | | | $4,653,033 | | | | $4,730,853 | |
| Darryl Matthews (6) | | | — | | | | 15,011 | | | | 71,849 | | | | $— | | | | $3,529,957 | | | | $3,529,957 | |
| Sachin Sankpal | | | — | | | | 11,470 | | | | 62,899 | | | | $— | | | | $3,022,351 | | | | $3,022,351 | |
| (1) | Reflects accelerated | | | | | | | | | | | | | | | | | | | POTENTIAL ACCELERATION OF EQUITY UPON A QUALIFYING TERMINATION | | Name | Accelerated Vesting of (1) | Aggregate market value of accelerated in-the-money options as of fiscal year end ($) | Aggregate market value of accelerated RSUs and PRSUs as of fiscal year end ($) | Total ($) | Options
(#) | RSUs and PRSUs
(#) | | Robert G. Painter | 208,847 | | 62,847 | | 5,275,475 | | 4,196,275 | | 9,471,750 | | | David G. Barnes | 29,455 | | 16,096 | | 776,728 | | 1,074,741 | | 1,851,470 | | | Steven W. Berglund | — | | 156,611 | | — | | 10,456,888 | | 10,456,888 | | | James Langley | — | | 8,019 | | — | | 535,448 | | 535,448 | | | Darryl Matthews | — | | 15,052 | | — | | 1,005,039 | | 1,005,039 | |
(1) Reflects pro rata vesting based on a pro rata portion of each award. |
| (2) | Based on actual attainment of performance goals at the end of applicable performance period (December 29, 2017). |
49
| (3) | Aggregate market value is calculated using the closing price of the Company’s common stock on December 29, 2017, which was $40.64. |
| (4) | Mr. Berglund’s accelerated vesting upon a qualifying termination is based on the number of shares that would have vested had Mr. Berglund continued in service for an additional twelve months following the date of termination. |
| (5) | Under Mr. Painter’s executive severance agreement dated February 1, 2016, 50% of the RSUs and stock options granted to him upon his promotion to CFO on the same date shall vest upon termination without cause or with good reason. Mr. Painter was granted 30,000 RSUs and 45,000 stock options on such date. |
| (6) | In addition to the standard provisions in his executive severance agreement, Mr. Matthews’ initial restricted stock unit award granted on September 1, 2015 would vest in full. |
Change in Control without Termination
Under the terms of the Change In Control Severance Agreements for Messrs. Berglundeach stock option and Kirkland, any unvested stock options held by them would accelerate upon a change in controltime-based RSU award, and pro rata vesting of PRSU awards with adjustment based on estimated attainment of performance to the extent assumed or substituted by the acquirer, will remain outstanding for one year following the change in control. If such change in control occurred on December 29, 2017, the number of options accelerated and the aggregate marketin-the-money value thereof on such date (based on the closing price of $40.64) for Mr. Berglund would be 54,644 options with a value of $618,124, and for Mr. Kirkland would be 8,178 options with a value of $97,798.
date.
Termination in Connection with a Change in Control
The table below sets forth the estimated cash benefits that each respective Named Executive Officer would receive under the Change
Inin Control Severance Agreements based upon the assumption that a change in control event occurred on
December 29, 2017January 1, 2021 (except as otherwise indicated)
, and the Named Executive Officer’s employment terminated upon or immediately following such event.
| | | | | | | | | | | | | | | | | | | | |
POTENTIAL PAYMENTS UPON ACHANGE-IN-CONTROL AND QUALIFYING TERMINATION | |
| Name | | Multiple of
Salary and
Target
Bonus (1) | | | Bonus accrued
but unpaid as of
12/29/2017
(2) | | | Health
Benefits (3) | | | Accrued
vacation | | | Total | |
| Steven W. Berglund | | | $3,987,000 | | | | $2,222,837 | | | | $40,000 | | | | $— | | | | $6,249,837 | |
| Robert Painter | | | $1,120,500 | | | | $666,625 | | | | $35,000 | | | | $63,846 | | | | $1,885,971 | |
| James A. Kirkland | | | $960,000 | | | | $482,007 | | | | $35,000 | | | | $14,727 | | | | $1,491,734 | |
| Darryl Matthews | | | $1,117,800 | | | | $829,507 | | | | $35,000 | | | | $— | | | | $1,982,307 | |
| Sachin Sankpal | | | $1,074,600 | | | | $494,157 | | | | $35,000 | | | | $— | | | | $1,603,757 | |
| (1) | The multiple for Mr. Berglund is 200%. The multiple for the other Named Executive Officers is 150%. |
| (2) | The bonus amount represents the amount of incentive bonus accrued under the MIP as of December 29, 2017. |
| (3) | Reflects alump-sum cash payment approximating the cost of COBRA premiums for 14 months (18 months in the case of Mr. Berglund) of continued health coverage. |
50
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 49
| | | | | | | | | | | | | | |
| POTENTIAL PAYMENTS UPON A CHANGE-IN-CONTROL AND QUALIFYING TERMINATION |
| Name | Multiple of Salary and Target Bonus (1) | Bonus accrued but unpaid as of fiscal year end (2) | Health Benefits (3) | Total |
| Robert G. Painter | $1,700,000 | | $— | | $32,554 | | $1,732,554 | |
| David G. Barnes | $750,000 | | $— | | $21,946 | | $771,946 | |
| Steven W. Berglund | $1,600,000 | | $— | | $27,623 | | $1,627,623 | |
| James Langley | $615,000 | | $— | | $32,554 | | $647,554 | |
| Darryl Matthews | $658,820 | | $— | | $32,554 | | $691,374 | |
(1) The multiple for Mr. Painter and Mr. Berglund is 200%. The multiple for the other Named Executive Officers is 150%. No amount is included for target bonus, since the MIP was cancelled for fiscal 2020.
(2) No cash bonus plan was in effect at fiscal year end.
(3) Reflects a lump-sum cash payment approximating the cost of COBRA premiums for continued health coverage for 14 months (18 months in the case of Mr. Painter and Mr. Berglund).
The amounts shown below reflect
an estimate of the aggregate number of shares underlying each executive’s unvested equity awards that would have vested if a change in control event had occurred on
December 29, 2017,January 1, 2021 and the Named Executive Officer’s employment terminated upon or immediately following such event.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
POTENTIAL ACCELERATION OF EQUITY UPON ACHANGE-IN-CONTROL AND QUALIFYING TERMINATION | |
| | | | | | |
| Name | | Accelerated Vesting of | | | Aggregate
market value of
accelerated
in-the-money
options as of
12/29/2017
(2) | | | Aggregate
market value of
accelerated
PRSUs as of
12/29/2017
(3) | | | Aggregate
market value of
accelerated
RSUs as of
12/29/2017
| | | Total | |
| | Options (#) | | | Time-Based
RSUs
(#) | | | Performance-
Based
RSUs
(#) (1) | | | | | |
Steven W. Berglund | | | 54,644 (4) | | | | 111,045 | | | | 664,450 | | | | $618,124 | | | | $27,003,264 | | | | $4,512,867 | | | | $32,134,255 | |
Robert Painter | | | 47,512 | | | | 26,870 | | | | 65,961 | | | | $993,571 | | | | $2,680,674 | | | | $2,015,866 | | | | $5,690,111 | |
James A. Kirkland | | | 8,178 (4) | | | | 14,884 | | | | 104,710 | | | | $97,798 | | | | $4,255,433 | | | | $1,254,354 | | | | $5,607,585 | |
Darryl Matthews | | | — | | | | 33,460 | | | | 71,849 | | | | $— | | | | $2,919,929 | | | | $1,359,815 | | | | $4,279,744 | |
Sachin Sankpal | | | — | | | | 32,970 | | | | 62,899 | | | | $— | | | | $2,556,211 | | | | $1,339,901 | | | | $3,896,112 | |
| (1) | Reflects accelerated vesting based on a pro rata portion of each award. |
| (2) | The amounts shown in this column represent the market value of the unvested options on December 29, 2017, less the exercise price of such options. The market value is the closing price of the Company’s common stock on December 29, 2017, which was $40.64. |
| (3) | Based on actual attainment of performance goals at the end of the applicable performance period (December 29, 2017). |
| (4) | These shares would accelerate upon a change in control, regardless of termination or continued employment. |
| | | | | | | | | | | | | | | | | |
| POTENTIAL ACCELERATION OF EQUITY UPON A CHANGE-IN-CONTROL AND QUALIFYING TERMINATION |
| Name | Accelerated Vesting of (1) | Aggregate market value of accelerated in-the-money options as of fiscal year end ($) | Aggregate market value of accelerated RSUs and PRSUs as of fiscal year end ($) | Total ($) |
Options
(#) | RSUs and PRSUs
(#) |
| Robert G. Painter | 208,847 | | 207,917 | | 5,275,475 | | 13,882,617 | | 19,158,092 | |
| David G. Barnes | 29,455 | | 70,943 | | 776,728 | | 4,736,864 | | 5,513,592 | |
| Steven W. Berglund | — | | 291,557 | | — | | 19,467,249 | | 19,467,249 | |
| James Langley | — | | 54,442 | | — | | 3,635,084 | | 3,635,084 | |
| Darryl Matthews | — | | 54,678 | | — | | 3,650,847 | | 3,650,847 | |
(1) Reflects accelerated vesting of each option and time-based RSU award and pro-rata vesting of PRSU awards based on performance to date, with the balance converted to time-based RSUs.
Under the terms of the Company’s 2002 Stock Plan, (i) if, in connection with a change in control, the then-unvested restricted stock units
or then-unvested stock options for the Named Executive Officers are not assumed by an acquiring company, the restricted stock units
and options would immediately vest or (ii) if the restricted stock units
and options are assumed by an acquiring company, and a Named Executive Officer is terminated for certain qualifying reasons following a change in control (or prior to a change in control if such termination was at the request of the potential acquirer), the then-unvested restricted stock units
and options would immediately vest.
Trimble Age & Service Equity Vesting Program
Commencing in 2017, a new post-employment arrangement was adopted for certain eligible executive officers, including each of the Named Executive Officers. The Trimble Age & Service Equity Vesting Program (the “Vesting Program”) provides for the vesting of certain equity awards, as well as certain medical benefit payments, to eligible participants upon retirement. Program eligibility requires a minimum age of 55, a minimum of 10 years of total service, and a “combined 70” requirement that the sum of the participant’s years of age and years of service combines to total at least 70 years. Participants must also agree to a general release of claims and tonon-solicitation andnon-competition obligations. Under the plan,Vesting Program, eligible equity awards, which are equity awards granted after the time a participant is selected by the Compensation Committee to participate in the Vesting Program, will vest upon retirement of an eligible participant. Time-based restricted stock units and other time-based equity will fully vest, and performance stock units will vest on a pro rata basis, subject to the satisfaction of any performance-based vesting conditions. In addition, upon a qualifying retirement of a participating executive, the executive will receive a lump sum medical and dental benefit in the amount of $50,000. Mr. Berglund currently meets the criteria for a qualifying retirement and Mr. Kirkland will meetretirement.
50 Trimble | Proxy Statement for the criteria later in 2018.2021 Annual Meeting of Stockholders
The Company provides certain death benefits generally to its full time employees, including to the Named Executive Officers. In the event of the death of a Named Executive Officer, the following payments and benefits would become payable in a lump sum to, or provided to, such Named Executive Officer’s estate (unless otherwise noted): (i) payment of six months’ base salary to the surviving spouse/dependents of the Named Executive Officer, (ii) with respect to equity awards granted on or after July 30, 2012, vesting of a portion of those awards that would have vested within the two years following the death of the Named Executive Officer but for such death, (iii) payout under the life insurance
51
policy (with base coverage of 2 times base salary) pertaining to the Named Executive Officer, (iv) 12 months’ of continued health insurance coverage for the surviving spouse/dependents of the Named Executive Officer, and (v) a pro rata payment under the MIP based on the date of the Named Executive Officer’s death. The table below sets forth the value of the foregoing, assuming that the triggering event occurred on December 29, 2017January 1, 2021 (except as otherwise indicated):
| | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Six
Months
Base
Salary | | | Aggregate Market
Value of
Accelerated
Vesting of Options
and RSUs
(# of Shares) (1) | | | Life
Insurance (2) | | | Health
Benefits (3) | | | Pro Rata
Bonus (4) | | | Total (5) | |
Steven W. Berglund | | | $443,000 | | | | $31,624,916 | | | | $1,100,000 | | | | $11,306 | | | | $2,222,837 | | | | $35,402,059 | |
Robert Painter | | | $207,500 | | | | $5,482,536 | | | | $750,000 | | | | $19,446 | | | | $666,625 | | | | $7,126,107 | |
James A. Kirkland | | | $200,000 | | | | $5,405,956 | | | | $775,000 | | | | $16,503 | | | | $482,007 | | | | $6,879,466 | |
Darryl Matthews | | | $207,000 | | | | $4,024,544 | | | | $804,000 | | | | $16,530 | | | | $829,507 | | | | $5,881,581 | |
Sachin Sankpal | | | $199,000 | | | | $3,710,000 | | | | $773,000 | | | | $19,468 | | | | $494,157 | | | | $5,195,625 | |
| (1) | The market value of the accelerated portion of the restricted stock units was calculated by using the closing price of the Company’s common stock. The market value of the accelerated portion of options was calculated by using the closing price of the Company’s common stock, less the exercise price of such options. The closing price of the Company’s common stock on December 29, 2017 was $40.64. |
| (2) | Life insurance payouts are based on the Named Executive Officer’s “benefit salary” which is defined as his or her base salary as of September 1st of the previous fiscal year. Mr. Berglund’s life insurance payout is capped at $1,100,000. |
| (3) | Health benefits reflect twelve months of COBRA premiums for the Named Executive Officer’s spouse and/or dependents, and are calculated as of December 29, 2017 to reflect 2017 health plan rates. |
| (4) | The incentive bonus amount represents the amount of bonus accrued but unpaid under the MIP as of December 29, 2017. |
| (5) | Named Executive Officers are also entitled to additional death benefits due to a death caused by an accident while working for the Company or while traveling on Company business. Officers and vice presidents of the Company are entitled to an additional $500,000 if they die while traveling on Company business. An employee of the Company who dies in an accident while working for the Company will be entitled to receive an additional 2x his or her base salary. |
52
| | | | | | | | | | | | | | | | | | | | | | | |
| Name | Six Months
Base
Salary | Aggregate Market Value of Accelerated Vesting of Options, PRSUs and RSUs
(1) | Life
Insurance (2) | Health
Benefits (3) | Pro Rata
Bonus (4) | Total (5) |
| Robert G. Painter | $425,000 | $17,844,072 | | $1,090,000 | $17,205 | $— | | $19,376,277 |
| David G. Barnes | $250,000 | $4,777,376 | | $1,000,000 | $8,900 | $— | | $6,036,276 |
| Steven W. Berglund | $400,000 | $16,353,710 | | $715,000 | $8,635 | $— | | $17,477,345 |
| James Langley | $205,000 | $3,338,292 | | $750,000 | $17,205 | $— | | $4,310,497 |
| Darryl Matthews | $219,607 | $3,389,967 | | $879,000 | $17,205 | $— | | $4,505,779 |
(1) The market value of the accelerated portion of the restricted stock units was calculated by using the closing price of the Company’s Common Stock. The market value of the accelerated portion of options was calculated by using the closing price of the Company's Common Stock, less the exercise price of such options. The closing price of the Company's Common Stock at fiscal year end was $66.77.
(2) Life insurance payouts are based on the Named Executive Officer’s “benefit salary” which is defined as his or her base salary as of September 1st of the previous fiscal year. Mr. Berglund’s life insurance payout is capped at $1,100,000.
(3) Health benefits reflect twelve months of COBRA premiums for the Named Executive Officer’s spouse and/or dependents, and are calculated as of fiscal year end using 2020 health plan rates.
(4) The bonus amount represents the amount of bonus accrued but unpaid under the Company's bonus plans at fiscal year end. The Company canceled its bonus programs for 2020, so there were no such amounts.
(5) Named Executive Officers are also entitled to additional death benefits due to a death caused by an accident while working for the Company or while traveling on Company business. Officers and vice presidents of the Company are entitled to an additional $500,000 if they die while traveling on Company business. An employee of the Company who dies in an accident while working for the Company will be entitled to receive an additional 2 times his or her base salary. Such amounts are not included in the table above.
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 51
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to disclose the median of the annual total compensation of all our employees, the annual total compensation of our President and Chief Executive Officer,
Steven W. Berglund,Robert G. Painter, and the ratio of these two amounts.
We have determined the median of the annual total compensation of all our employees, excluding Mr.
Berglund,Painter, for
20172020 to be
$83,151.$71,242. The annual total compensation of Mr.
��Berglund Painter, our CEO, was $12,590,537 for
2017 was $10,637,661.2020, as reported in our Summary Compensation Table. The ratio of the annual total compensation of Mr.
BerglundPainter to the median of the annual total compensation of all our employees was
128176.7 to 1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation
S-K under the Securities Exchange Act of 1934.
As permitted by SEC rules, for purposes of calculating the pay ratio set forth above, we used the same median employee that we identified for purposes of our prior year’s pay ratio disclosure, based on our determination that there was no change in our employee population or employee compensation arrangements that we believe would significantly impact the pay ratio.
The process that we used in 2019 to identify our median employee weis set forth below:
•We selected the base salaries in effect as of October 1, 20172019 and profit-sharing amounts for the period from October 1, 20162018 through September 30, 20172019 as the compensation measure to be used to compare the compensation of our employees.
•We selected October 1, 2017,2019, which is within the last three months of 2017,2019, as the date upon which we would identify the “median employee,” because it enabled us to make such identification in a reasonably efficient and economical manner. We also used October 1 as our measuring date in 2018.
•As of October 1, 2017,2019, our employee population consisted of approximately 9,22811,362 individuals, with approximately 3,9245,155 employees in the United States and approximately 5,3046,207 employees outside the United States. In determining this population, we considered the employees of our subsidiaries and all of our worldwide employees other than the CEO, whether employed on a full-time, part-time, or seasonal basis, except for our employees in Peru (1 employee), Qatar (1 employee), RomaniaArgentina (1 employee), Bulgaria (2 employees), Ghana (1 employee), Kenya (2 employees), Saudi Arabia (2 employees), Austria (4 employees), Chile (2 employees), Ukraine (3(5 employees), Estonia (4 employees), Saudi Arabia (4 employees), Argentina (4 employees), Chile (5 employees), Denmark (5 employees), Austria (6 employees), Indonesia (8 employees), Italy (8 employees), Poland (10(3 employees) and Japan (12Poland (7 employees) (a total of 7642 individuals, and less than 1% of our employee population) who were excluded pursuant to thede minimis exemption provided under Item 402(u). Thede minimisexception permits a company to exclude up to 5% of its total employees who are located in countries outside the United States. We did not include any contractors or othernon-employee workers in our employee population.
•We annualized the compensation for any full-time and part-time employees who commenced work during 2017.2019. We did not make any cost of livingcost-of-living adjustments.Using
Confirming that the median employee used for this approach,purpose in 2019 was still employed in the same job, we selected thethat individual atas the median of our employee population whofor fiscal 2020. The median employee was a Customer Support RepresentativeSuccess Manager based in the United States. Once we
Having identified this median employee, we totaled all of the elements of the employee’s annual total compensation for
20172020 in accordance with the requirements of the applicable SEC rules, using the same methodology we use for our named executive officers as set forth in our Summary Compensation Table.
We determined that such individual’s annual total compensation for the fiscal year ended December 31, 2017 was $83,151 (excluding any estimated retirement and health benefits).During 2017, Mr. Berglund served as our President and Chief Executive Officer. We determined his annual total compensation for the fiscal year ended December 31, 2017 was $10,637,661, as reported in our 2017 Summary Compensation Table.
Because the SEC rules for identifying the median of the annual total compensation of all our employees and calculating the pay ratio based on that employee’s annual total compensation allow companies to use a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio we are reporting, as those companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
53
52 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
The information contained in this Audit Committee Report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that it is specifically incorporated by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The Audit Committee is a separately-designated standing committee of the Board of Directors, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, and operates under a written charter adopted by the Board of Directors. Among its other functions, the Audit Committee recommends to the Board of Directors, subject to stockholder ratification, the selection of the Company’s independent
auditor.registered public accounting firm.
The Audit Committee has reviewed and discussed the Company’s consolidated financial statements and financial reporting process with the Company’s management, which has the primary responsibility for the Company’s consolidated financial statements and financial reporting processes, including establishing and maintaining adequate internal controls over financial reporting and evaluating the effectiveness of such internal controls. EY, the Company’s current independent
auditor,registered public accounting firm, is responsible for performing an audit and expressing an opinion on the conformity of the Company’s audited financial statements to U.S. generally accepted accounting principles and performing an audit and expressing an opinion on the effectiveness of internal control over financial reporting. The Audit Committee has reviewed and candidly discussed with EY the overall scope and plans of its audits, its evaluation of the Company’s internal controls, the overall quality of the Company’s financial reporting processes and accounting principles and judgment, and the clarity of disclosures in the Company’s consolidated financial statements.
The Audit Committee has discussed with EY those matters required to be discussed, by the SEC and by Auditing Standard No. 16,1301, “Communications with Audit Committees” issued by the Public Company Accounting Oversight Board (“PCAOB”PCAOB”). EY has provided the Audit Committee with the written disclosures and the letter required by the PCAOB. The Audit Committee has also discussed with EY its independence from management, and the Company and has also determined that EY’s provision ofnon-audit services (such astax-related services) to the Company and its affiliates is compatible with maintaining the independence of EY with respect to the Company and its management. Based on the Audit Committee’s discussion with management and the independent
auditors,registered public accounting firm, and the Audit Committee’s review of the representation of management and the report of the independent
auditorregistered public accounting firm to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s annual report on Form
10-K for the fiscal year ended
December 29, 2017.January 1, 2021.
Submitted by the Audit Committee of the Company’s Board of Directors,
| | | | | | | | |
Kaigham (Ken) Gabriel,Member | Sandra MacQuillan, Member | Ulf J. Johansson,Member | | Mark S. Peek,Chair |
| Audit Committee | | Audit Committee | | Audit Committee |
54
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 53
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Certain Beneficial Owners
The following table sets forth the shares of the Company’s Common Stock beneficially owned as of March
5, 2018,15, 2021, the Record Date, by the persons known to the Company to be the beneficial owners of more than five percent of the Company’s outstanding Common Stock. The applicable percentage of share ownership in the table is based on
248,592,825251,342,672 shares of the Company’s Common Stock outstanding at the Record Date.
We have computed beneficial ownership in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options or warrants held by that person that are exercisable within 60 days of the Record Date are deemed outstanding. Such shares, however, are not deemed outstanding for purposes of computing the ownership of any other person. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder’s name.
| | | | | | | | |
| Name and Address | | Amount and Nature of
Beneficial Ownership | | | Percent of
Class | |
BlackRock, Inc.
55 East 52nd Street, New York, New York, 10055 (1) | | | 23,195,889 | | | | 9.3% | |
The Vanguard Group
100 Vanguard Boulevard, Malvern, Pennsylvania 19355 (2) | | | 21,837,517 | | | | 8.8% | |
Capital Research Global Investors
335 South Hope Street, Los Angeles, California 90071 (3) | | | 16,463,351 | | | | 6.6% | |
| (1) | The information is based upon, and is included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A as filed with the SEC on January 23, 2018. BlackRock, Inc. has sole voting power over 21,433,025 shares of the Company’s Common Stock and sole dispositive power over all of the shares listed in the table above. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the Company’s Common Stock beneficially owned by BlackRock, Inc., but. no one person’s interest in these shares of the Company’s Common Stock is more than five percent of the total outstanding shares of the Company’s Common Stock. |
| (2) | The information is based upon, and is included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A as filed with the SEC on February 9, 2018. The Vanguard Group has sole voting power over 198,541 shares of the Company’s Common Stock, shared voting power over 46,782 shares of the Company’s Common Stock, sole dispositive power over 21,607,036 shares of the Company’s Common Stock and shared dispositive power over 230,481 shares of the Company’s Common Stock. |
| (3) | The information is based upon, and is included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A as filed with the SEC on February 14, 2018. Capital Research Global Investors, which is a division of Capital Research and Management Company (“CRMC”), is deemed to be the beneficial owner of the listed shares of the Company’s Common Stock as a result of CRMC acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. |
| | | | | | | | | | | |
| Name and Address | Amount and Nature of
Beneficial Ownership | Percent of
Class |
The Vanguard Group
100 Vanguard Boulevard, Malvern, Pennsylvania 19355 | 27,212,197 | (1) | 10.8% |
BlackRock, Inc. 55 East 52nd Street, New York, New York, 10055 | 25,108,869 | (2) | 10.0% |
Capital International Investors
333 South Hope Street, 55th Fl, Los Angeles, CA 90071 | 24,247,426 | (3) | 9.6% |
(1) The information is based upon, and is included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A filed with the SEC on February 10, 2021 regarding ownership as of January 29, 2021. The Vanguard Group has shared voting power over 406,395 shares, sole dispositive power over 26,141,106 shares, and shared dispositive power over 1,071,091 shares.
(2) The information is based upon, and is included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A filed with the SEC on January 27, 2021. BlackRock, Inc. has sole voting power over 23,126,689 shares and sole dispositive power over all of the shares listed. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the shares but no one person’s interest in the shares is more than five percent of the total outstanding shares of the Company's Common Stock.
(3) The information is based upon, and is included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A filing with the SEC on February 16, 2021 by Capital International Investors (CII). CII is a division of Capital Research and Management Company (CRMC). CII divisions of CRMC and Capital Bank and Trust Company, along with certain CRMC subsidiaries, collectively provide investment management services under the name “Capital International Investors.” CII has sole voting power over 23,406,761 shares and sole dispositive power over all of the shares listed.
Security Ownership of Management
The following table sets forth the shares of the Company’s Common Stock beneficially owned as of March
5, 2018,15, 2021, the Record Date, (unless otherwise noted below) by: (i) all directors and nominees; (ii) all executive officers of the Company named in the Summary Compensation Table presented in this
Proxy Statement;proxy statement; and (iii) all directors and executive officers of the Company, as a group. The applicable percentage share ownership is based on shares of the Company’s Common Stock outstanding at March
5, 2018.55
15, 2021.
We have computed beneficial ownership in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, all shares of Common Stock subject to options, restricted stock units, or warrants held by that person that are exercisable within 60 days of the Record Date are deemed outstanding. Suchcounted as outstanding (but such shares however, are not deemedcounted as outstanding for purposes of computing the percentage ownership of any other person.person). To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder’s name.
| | | | | | |
Name and Address (1) | | Amount and Nature of
Beneficial Ownership | | | Percent of
Class (%)
|
Berglund, Steven (2)
| | | 502,676 | | | * |
Fosburgh, Bryn (3)
| | | 36,592 | | | * |
Gabriel, Kaigham (Ken) (4)
| | | 18,356 | | | * |
Gibson, Chris (5)
| | | 54,347 | | | * |
Janow, Merit (6)
| | | 30,356 | | | * |
Johansson, Ulf (7)
| | | 30,356 | | | * |
Kirkland, James (8)
| | | 48,275 | | | * |
Lloyd, Meaghan (9)
| | | 19,403 | | | * |
Matthews, Darryl (10)
| | | 10,953 | | | * |
Nersesian, Ronald (11)
| | | 24,506 | | | * |
Painter, Robert (12)
| | | 17,885 | | | * |
Peek, Mark (13)
| | | 37,686 | | | * |
Sankpal, Sachin (14)
| | | 20,497 | | | * |
Shepard, Julie (15)
| | | 23,582 | | | * |
Vande Steeg, Nickolas (16)
| | | 22,339 | | | * |
Wibergh, Johan (17)
| | | 1,558 | | | * |
All directors and executive officers, as a group (16 persons) (18)
| | | 899,367 | | | * |
54 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
| (1) | The business address of each of the persons named in this table is: c/o Trimble Inc, 935 Stewart Drive, Sunnyvale, California 94085. |
| (2) | Includes 181,798 shares subject to options exercisable or shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (3) | Includes 33,272 shares subject to options exercisable or shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (4) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (5) | Includes 25,537 shares subject to options exercisable or shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (6) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (7) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (8) | Includes 24,635 shares subject to options exercisable or shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (9) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (10) | Includes 7,500 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (11) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (12) | Includes 2,112 shares subject to options exercisable on or prior to May 4, 2018. |
| (13) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (14) | Includes 2,500 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (15) | Includes 9,333 shares subject to options exercisable or shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (16) | Includes 7,686 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (17) | Includes 1,558 shares subject to shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
| (18) | Includes 342,047 shares subject to options exercisable or shares issuable upon vesting of RSUs on or prior to May 4, 2018. |
56
| | | | | | | | | | | |
| Name and Address (1) | Amount and Nature of Beneficial Ownership | Percent of Class (%) |
| David G. Barnes | 30,305 | | | * |
| Steven W. Berglund | 542,118 | | | * |
| James C. Dalton | — | | | * |
| Börje Ekholm | 36,368 | | | * |
| Kaigham (Ken) Gabriel | 8,500 | | | * |
| Merit E. Janow | 30,856 | | | * |
| James Langley | 38,064 | | | * |
| Meaghan Lloyd | 33,903 | | | * |
| Sandra MacQuillan | 10,380 | | | * |
| Darryl Matthews | 23,246 | | | * |
| Ronald S. Nersesian | 9,006 | | | * |
| Robert G. Painter | 113,938 | | (2) | * |
| Mark S. Peek | 57,251 | | | * |
| Johan Wibergh | 13,514 | | | * |
| All directors and executive officers as a group (18 persons) | 1,208,193 | | (3) | * |
* Indicates less than 1%.
(1) The business address of each of the persons named in this table is: c/o Trimble Inc, 935 Stewart Drive, Sunnyvale, California 94085.
(2) Includes 47,660 shares subject to options exercisable or shares issuable upon vesting of RSUs or PRSUs on or prior to May 14, 2021.
(3) Includes 102,174 shares subject to options exercisable or shares issuable upon vesting of RSUs or PRSUs on or prior to May 14, 2021.
Equity Compensation Plan Information
The following table sets forth, as of
December 29, 2017, the total number of securities outstanding underJanuary 1, 2021, certain information regarding the Company’s equity
compensation plans. The Company does not have any equity compensation plans
the weighted average exercise price of such options, and the number of options available for grant under such plans.that were not approved by security holders. For a complete description of the Company’s equity compensation plans, please see Note 13 to the Company’s audited consolidated financial statements for the fiscal year ended
December 29, 2017,January 1, 2021, included in the Company’s annual report on
Form 10-K filed with the SEC on February 26,
2018.2021. | | | | | | | | | | | | |
| Equity Compensation Plan Information | |
| Plan Category | | Number of securities to be issued
upon exercise of outstanding options, warrants and rights (a)(1) | | | Weighted-average exercise price of outstanding options, warrants and rights (2) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |
Equity compensation plans
approved by security holders | | | 11,528,958 | | | | $26.07 | | | | 23,467,615 (3) | |
| | | | | | | | | | | | | | | | | | | | |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)) |
| Plan Category | (Column A) | (Column B) | (Column C) |
| Equity compensation plans approved by security holders | 5,985,593 | | (1) | $35.42 | | (2) | 27,804,444 | (3) |
| (1) | The amount in this column reflects the number of shares underlying outstanding stock options (4,395,358 shares), shares issuable upon the vesting of RSUs (3,376,615 shares), and shares issuable upon the vesting of PSUs assuming the maximum performance was achieved (3,756,985 shares). |
| (2) | The weighted-average exercise price in this column relates to the outstanding stock options included in column (a). |
| (3) | This number includes 14,466,798 shares available for issuance under the 2002 Plan and 9,000,817 shares available for issuance under the Employee Stock Purchase Plan. |
(1) Reflects the number of shares underlying outstanding stock options (593,665 shares), shares issuable upon the vesting of RSUs (4,061,327 shares), and shares issuable upon the vesting of PRSUs based on the target number of shares to be issued under the awards (1,330,601 shares). If the PRSUs were to vest at the maximum payout, an additional 1,287,233 shares would be issued at the date of vest.
(2) The weighted-average exercise price relates to the outstanding stock options included in column (A).
(3) Consists of 21,149,326 shares available for issuance under the 2002 Stock Plan and 6,655,118 shares available for issuance under the Employee Stock Purchase Plan.
Delinquent Section 16(a)
Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that the Company’s executive officers and directors, as well as persons who beneficially own more than 10% of a registered class of the
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 55
Company’s equity securities during the fiscal year ended
December 29, 2017,January 1, 2021, file reports of initial ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. Such officers, directors and 10% stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file.
To the Company’s knowledge, based solely on its review of the copies of such forms received by the Company, all Section 16(a) filing requirements applicable to its officers, directors and 10% stockholders were complied with on a timely basis during the fiscal year ended
December 29, 2017.57
January 1, 2021, except that two reports on Form 4 (Statement of Changes in Beneficial Ownership) for James Langley, an executive officer of the Company, each reflecting the acquisition of shares upon vesting of restricted stock units and the disposition of a portion of such shares to meet tax withholding obligations, were filed late.56 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company reviews all relationships and transactions between the Company, on the one hand, and our directors, executive officers or their immediate family members, on the other hand, to determine whether such persons have a direct or indirect material interest. The Company’s legal staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether a related person has a direct or indirect material interest in the transaction with the Company. On an annual basis, all directors and executive officers must respond to a questionnaire requiring disclosure about any related person transactions, arrangements or relationships (including indebtedness). As required under SEC rules, any transactions with the Company that are determined to be directly or indirectly material to a related person are disclosed in the Company’s applicable SEC filings.
In addition, certain aspects of such types of transactions are the subject of the Company’s Business Ethics and Conduct Policy (the“Policy”). The Policy applies to all of the Company’s employees, directors and officers and is available in the “Investors” section ofon the Company’s website athttp://investor.trimble.com under the heading “Corporate Governance—Governance Documents.”investor.trimble.com/corporate-governance. Pursuant to the Policy all employees must seek a waiver or approval from the Company’s Compliance Officer for all actual or apparent conflicts of interests. Waivers affecting the Company’s officers or members of the Board of Directors must be approved by the Board of Directors. The Company’s officers must report any violations of the Policy to the Company’s Compliance Officer or the Chairman of the Board of Directors. The Company’s compliance officer is the Company’s general counsel, the chairman of the Audit Committee in the general counsel’s absence, or such other person as the Board of Directors may designate. In determining whether to approve or ratify a related party transaction, the compliance officer may consider all relevant facts and circumstances, including the following factors:
•the nature of the related person’s interest in the transaction;
•the material terms of the transaction, including the amount involved and type of transaction and whether the terms are at least as favorable to the Company as those available from non-related parties;
non-related• parties;
the importance of the transaction to the related person and to the Company;
•whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the Company and its stockholders; and
•any other matters the Audit Committee or other committee, as applicable, deems appropriate.
Certain Disclosures Related to Determination of Director Independence for Fiscal
20172020
The Board of Directors has determined that each of the directors
except forbesides Mr. Berglund
and Mr. Painter are independent directors as defined by Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
In making such determination for Ms. Lloyd, the Board of Directors considered the following:In September 2014, the Company purchased Gehry Technologies, Inc., a provider of construction related professional services and solutions (“GT”), from various selling stockholders, including Gehry Partners, LLP, in which Meaghan Lloyd is a partner. Prior to the acquisition closing, the Digital Project software business of GT was divested into a separate company, Digital Project, Inc. (“DPI”), which continued to be owned by the selling stockholders. Ms. Lloyd is a director, President and CEO of DPI, but does not receive compensation for such roles. DPI licenses and supports the Digital Project software, which is utilized by Gehry Partners, as well as GT. DPI receives annual license fees from GT for use of the Digital Project software. GT also provides professional services to Gehry Partners, LLP.
The foregoing disclosure reflects information that the Board considered in determining director independence, and is not intended to constitute disclosure of transactions with related persons.
58
As permitted by the Securities Exchange Act of 1934, we may deliver only one Notice or one paper copy of this proxy statement to stockholders residing at the same address, unless such stockholders have notified the Company of their desire to receive multiple copies of the Notice or the paper version of the proxy statement, respectively, as applicable. Stockholders that reside at the same address and receive multiple copies of the Notice of the paper version of the proxy statement may request delivery of only one copy of the Notice or proxy statement, as applicable, by directing a notice to the Company’s Investor Relations department at the address below.
The Company will promptly deliver, upon oral or written request, a separate copy of the Notice or this proxy statement to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to the Company at its principal executive offices, Attention: Investor Relations, at 935 Stewart Drive, Sunnyvale, California 94085,
(408) 481-8000.The Company knows of no other matters to be submitted for consideration at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the enclosed proxy
Proxy Statement for the 2021 Annual Meeting of Stockholders | Trimble 57
to vote the shares they represent as the Board of Directors may recommend. Discretionary authority with respect to such other matters is granted by the execution of the enclosed proxy.
It is important that your shares be represented at the meeting, regardless of the number of shares which you hold. You are, therefore, urged to vote electronically via the internet or by telephone or, if you have requested a paper copy of the proxy materials, complete and return the accompanying proxy in accordance with the detailed instructions on your individual proxy card.
|
For the Board of Directors |
ULF J. JOHANSSON
|
Chairman of the Board
|
Executive Chairman of the Board
Dated: March
21, 201859
30, 202158 Trimble | Proxy Statement for the 2021 Annual Meeting of Stockholders
Reconciliation of GAAP
to non-GAAP financial
measure tonon-GAAP financial measuremeasures
This
Proxy Statementproxy statement contains information regarding
a financial
measure,non-GAAP operating income,measures that
isare not calculated in accordance with GAAP.
We believe our investors benefit by understanding ourOur non-GAAP operating income trends which are driven by revenue, gross margin, and spending.Non-GAAP operating income excludes restructuring charges, amortization of purchased intangible assets, stock-based compensation, amortization of acquisition-related inventorystep-up, acquisition/divestiture items associated with external and incremental costs resulting directly from merger and acquisition activities such as legal, due diligence, integration, and other required closing costs, and executive transition costs. We believe that these exclusions offer an alternative means for our investors to evaluate current operating performance compared to results of other periods. We believe that thisnon-GAAP financial measure also helps investors enhance their overall understanding of our fiscal 2017 performance in relation to the principal elements of our annual executive compensation as described in this Proxy Statement.Ournon-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures. Thenon-GAAP financial measures included in this Proxy Statement,proxy statement, and the adjustments to comparable GAAP measures, are set forth below:
GAAP TONON-GAAP RECONCILIATION
(dollars
Non-GAAP revenue
We believe this measure helps investors understand the performance of our business, as non-GAAP revenue excludes the effects of certain acquired deferred revenue that was written down to fair value in
millions)(unaudited)
| | | | | | | | | | | | | | | | |
| | | Fiscal Year | |
| | | 2017 | | | 2016 | |
| | | Dollar
Amount | | | % of
Revenue | | | Dollar
Amount | | | % of
Revenue | |
OPERATING INCOME: | | | | | | | | | | | | | | | | |
| | | | |
GAAP operating income: | | | $ 246.0 | | | | 9.3% | | | | $ 181.0 | | | | 7.7% | |
| | | | |
Restructuring charges | | | 10.5 | | | | 0.3% | | | | 13.3 | | | | 0.6% | |
| | | | |
Amortization of purchased intangible assets | | | 148.8 | | | | 5.6% | | | | 150.8 | | | | 6.4% | |
| | | | |
Stock-based compensation | | | 64.8 | | | | 2.5% | | | | 52.6 | | | | 2.2% | |
| | | | |
Amortization of acquisition-related inventorystep-up | | | 2.8 | | | | 0.1% | | | | — | | | | —% | |
| | | | |
Acquisition / divestiture items | | | 7.4 | | | | 0.3% | | | | 6.8 | | | | 0.3% | |
| | | | |
Executive transition costs | | | — | | | | —% | | | | 1.0 | | | | —% | |
| | | | | | | | |
Non-GAAP operating income: | | | $ 480.3 | | | | 18.1% | | | | $ 405.5 | | | | 17.2% | |
| | | | | | | | |
60
TRIMBLE INC. 935 Stewart Drive Sunnyvale, CA 94085 VOTE BY INTERNET - www.proxyvote.com Usepurchase accounting. Management believes that excluding fair value purchase accounting adjustments more closely correlates with the Internetordinary and ongoing course of the acquired company’s operations and facilitates analysis of revenue growth and business trends.Non-GAAP gross margin
We believe our investors benefit by understanding our non-GAAP gross margin as a way of understanding how product mix, pricing decisions, and manufacturing costs influence our business. Non-GAAP gross margin excludes the effects of certain acquired deferred revenue, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, restructuring charges, and COVID-19 expenses. We believe that these adjustments offer investors additional information that may be useful to transmit your voting instructionsview trends in our gross margin performance.
Non-GAAP operating income
We believe our investors benefit by understanding our non-GAAP operating income trends, which are driven by revenue, gross margin, and spending. Non-GAAP operating income excludes the effects of purchase accounting adjustments to certain acquired deferred revenue and acquired capitalized commissions, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, deferred compensation, restructuring charges, executive transition costs, and COVID-19 expenses. We believe that these adjustments offer a supplemental means for electronic deliveryour investors to evaluate current operating performance compared to prior results and trends.
Non-GAAP diluted net income per share
We believe our investors benefit by understanding our non-GAAP operating performance as reflected in a per share calculation as a way of information. Votemeasuring non-GAAP operating performance by 11:59 P.M. ET on 04/30/2018. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 04/30/2018. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return itownership in the postage-paid envelope we have provided or return itcompany. Non-GAAP diluted net income per share excludes the effects of purchase accounting adjustments to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. For Withhold For All To withhold authoritycertain acquired deferred revenue and acquired capitalized commissions, amortization of purchased intangible assets, acquisition/divestiture items, stock-based compensation, restructuring charges, executive transition costs, COVID-19 expenses, and non-GAAP tax adjustments. We believe that these adjustments offer investors a useful view of our diluted net income per share as compared to voteour prior periods and trends.
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| GAAP TO NON-GAAP RECONCILIATION |
| (dollars in millions, except per share data) |
| (unaudited) |
| | | | | | | |
| | | Fiscal Years |
| | | 2020 | | 2019 |
| | | Dollar | % of | | Dollar | % of |
| | | Amount | Revenue | | Amount | Revenue |
| REVENUE: | | | | | |
| GAAP revenue: | $ | 3,147.7 | | | | $ | 3,264.3 | | |
| | Acquired deferred revenue adjustment | 4.3 | | | | 7.0 | | |
| Non-GAAP Revenue: | $ | 3,152.0 | | | | $ | 3,271.3 | | |
| | | | | | | |
| GROSS MARGIN: | | | | | |
| GAAP gross margin: | $ | 1,754.9 | | 55.8 | % | | $ | 1,780.9 | | 54.6 | % |
| | Acquired deferred revenue adjustment | 4.3 | | | | 7.0 | | |
| | Amortization of purchased intangible assets | 92.3 | | | | 94.1 | | |
| | Acquisition / divestiture items | 1.7 | | | | — | | |
| | Stock-based compensation / deferred compensation | 7.2 | | | | 5.9 | | |
| | Restructuring charges | 0.8 | | | | 1.1 | | |
| | COVID-19 expenses | 0.4 | | | | — | | |
| Non-GAAP gross margin: | $ | 1,861.6 | | 59.1 | % | | $ | 1,889.0 | | 57.7 | % |
| | | | | | | |
| OPERATING INCOME: | | | | | |
| GAAP operating income: | $ | 419.8 | | 13.3 | % | | $ | 375.9 | | 11.5 | % |
| | Acquired deferred revenue adjustment | 4.3 | | | | 7.0 | | |
| | Amortization of acquired capitalized commissions | (5.5) | | | | (6.3) | | |
| | Amortization of purchased intangible assets | 157.8 | | | | 167.8 | | |
| | Acquisition / divestiture items | 21.4 | | | | 20.5 | | |
| | Stock-based compensation / deferred compensation | 90.4 | | | | 81.2 | | |
| | Restructuring charges / executive transition costs | 28.2 | | | | 27.9 | | |
| | COVID-19 expenses | 3.2 | | | | — | | |
| Non-GAAP operating income: | $ | 719.6 | | 22.8 | % | | $ | 674.0 | | 20.6 | % |
| | | | | | | |
| DILUTED NET INCOME PER SHARE: | | | | | |
| GAAP diluted net income per share attributable to Trimble Inc.: | $ | 1.55 | | | | $ | 2.03 | | |
| | Acquired deferred revenue adjustment | 0.02 | | | | 0.03 | | |
| | Amortization of acquired capitalized commissions | (0.02) | | | | (0.02) | | |
| | Amortization of purchased intangible assets | 0.62 | | | | 0.66 | | |
| | Acquisition / divestiture items | 0.04 | | | | 0.03 | | |
| | Stock-based compensation / deferred compensation | 0.33 | | | | 0.30 | | |
| | Restructuring charges / executive transition costs | 0.11 | | | | 0.11 | | |
| | COVID-19 expenses | 0.01 | | | | — | | |
| | Non-GAAP tax adjustments | (0.43) | | | | (1.15) | | |
| Non-GAAP diluted net income per share attributable to Trimble Inc.: | $ | 2.23 | | | | $ | 1.99 | | |
Annualized Recurring Revenue
ARR represents the estimated annualized value of recurring revenue, including subscription, maintenance and software revenue, and term license contracts for any All All Except individual nominee(s), mark “For All Except” and write the number(s)quarter. ARR is calculated by adding the portion of the The Boardcontract value of Directors recommends you vote FOR all of our term licenses attributable to the nominees listed in proposal 1. nominee(s) on the line below. 0 0 0 1. Election of Directors Nominees 01 Steven W. Berglund 02 Kaigham (Ken) Gabriel 03 Merit E. Janow 04 Ulf J. Johansson 05 Meaghan Lloyd 06 Ronald S. Nersesian 07 Mark S. Peek 08 Johan Wibergh The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. To hold an advisory vote on approving the compensation forcurrent quarter to our Named Executive Officers. 0 0 0 3. To ratify the appointment of Ernst & Young LLP as the independent auditor of the Companynon-GAAP recurring revenue for the current 0 0 0 fiscal year ending December 28, 2018. NOTE: This proxy, when properly executed, will be votedquarter and dividing that sum by the number of days in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations,quarter and in the discretion of the persons named above as proxies upon such other matters as may properly come before the meeting. . 17 Yes No . 1 . 0 Please indicate if you plan to attend this meeting 0 0 R1 _ 1 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or 0000364390 partnership, please sign in full corporate or partnership name,then multiplying that quotient by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000364390_1 R1.0.1.17365.
| | | | | | | | | | | | | | |
| Dollars in Millions | Fourth quarter of fiscal |
| | 2020 | | 2019 |
| GAAP Recurring Revenue | $ | 300.2 | | | $ | 303.0 | |
| Add: Elimination of deferred revenue adjustment in connection with acquisitions | 0.3 | | 0.8 |
| Non-GAAP Recurring Revenue | 300.5 | | 303.8 |
| Add: Term licenses contract value | 22.5 | | 16.6 |
| Non-GAAP Recurring Revenue and Term Licenses Contract Value | 323.0 | | 320.4 |
| Divided by: Number of Days in Quarter | 91 | | 98 |
| Daily Non-GAAP Recurring Revenue and Term Licenses Contract Value | 3.5 | | 3.3 |
| Multiplied by: 365 | 365 | | 365 |
| Annualized Recurring Revenue | $ | 1,295.8 | | | $ | 1,193.2 | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, 10K/Annual Report is/are available at www.proxyvote.com . TRIMBLE INC. Annual Meeting of Stockholders May 1, 2018 5:30 PM This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Steven W. Berglund and James Kirkland, or each of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of TRIMBLE INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 5:30 PM, Pacific Time on May 1, 2018, at Sunnyvale Theatre, Sunnyvale Community Center, 550 E. Remington Drive, Sunnyvale, California, 94087 and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on reverse side 0000364390_2 R1.0.1.17
