Dana Incorporated
Proxy Statement and Notice of
2018
2020 Annual Meeting of Shareholders
Our Proxy Statement and Annual Report
are Available at www.dana.com/proxy
Dana Incorporated
3939 Technology Drive
Maumee, Ohio 43537
March 22, 201812, 2020
Dear Fellow Shareholder:
It is our pleasure to invite you to attend the 20182020 Annual Meeting of Shareholders of Dana Incorporated at 8:30 a.m., Eastern Time, on Thursday,Wednesday, April 26, 201822, 2020 at our World Headquarters located at 3939 Technology Drive, Maumee, Ohio 43537. Registration will begin at 7:30 a.m., Eastern Time.
The annual report,2019 Annual Report, which is included in this package, summarizes Dana’s major developments and includes our consolidated financial statements.
Whether or not you plan to attend the 20182020 Annual Meeting of Shareholders, please either sign and return the accompanying proxy card in the postage-paid envelope or instruct us by telephone or via the Internet indicating how you would like your shares voted. Instructions on how to vote your shares by telephone or via the Internet are on the proxy card enclosed with this proxy statement.statement or the “Notice and Access” card we have provided.
Sincerely, | |
 | |
 | |
James K. Kamsickas Chairman of the Board of Directors |
Dana Incorporated
Notice of Annual Meeting of Shareholders
March 22, 201812, 2020
Date: | April 22, 2020 | ||
Time: | |||
8:30 a.m., Eastern Time | |||
Place: | Dana Incorporated
| ||
We invite you to attend the Dana Incorporated 20182020 Annual Meeting of Shareholders to:
1. Elect eight Directors for a one-year term expiring in 2019 or upon the election and qualification of their successors;
2. Act on an advisory vote to approve executive compensation;
3. Ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2018;
4. Approve amending the Second Restated Certificate of Incorporation to eliminate supermajority voting requirements;
5. Consider a shareholder proposal regarding special shareholder meetings, if properly presented at the Annual Meeting; and
6. Transact any other business that is properly submitted before the Annual Meeting or any adjournments or postponements of the Annual Meeting.
| 1. | Elect nine Directors for a one-year term expiring in 2021 or upon the election and qualification of their successors; |
| 2. | Act on an advisory vote to approve executive compensation; |
| 3. | Ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2020; |
| 4. | Consider a shareholder proposal regarding amending Dana’s Bylaws, if properly presented at the Annual Meeting; and |
| 5. | Transact any other business that is properly submitted before the Annual Meeting or any adjournments or postponements of the Annual Meeting. |
The record date for the Annual Meeting is February 26, 201824, 2020 (the Record Date). Only shareholders of record at the close of business on the Record Date can vote at the Annual Meeting. Dana mailed this Notice of Annual Meeting or a Notice of Availability of Proxy Materials to those shareholders. Action may be taken at the Annual Meeting on any of the foregoing proposals on the date specified above or any date or dates to which the Annual Meeting may be adjourned or postponed.
Dana will have a list of shareholders who can vote available for inspection by shareholders at the Annual Meeting, and for 10 days prior to the Annual Meeting, during regular business hours at Dana’s Law Department, 3939 Technology Drive, Maumee, Ohio 43537.
Whether or not you plan to attend the Annual Meeting and whether you own a few or many shares of stock, the Board of Directors urges you to vote promptly. Registered holders may vote by signing, dating and returning the enclosed proxy card, by using the automated telephone voting system, or by using the Internet voting system. You will find instructions for voting by telephone, and by the Internet on the proxy card, in the “Notice and Access” card we have provided and in the “Questions"Questions and Answers”Answers" section of the proxy statement. If you wish to attend the Annual Meeting in person, you must register in advance. Please vote your proxy, then follow the instructions in the “Questions and Answers” section below.
By Order of the Board of Directors,
By Order of the Board of Directors, | ||||
 | ||||
March 12, 2020 | Douglas H. Liedberg | |||
Senior Vice President, General Counsel, and Corporate Secretary |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on April 22, 2020.
Dana’s Proxy Statement and our 2019 Annual Report are available at www.dana.com/proxy.
Dana Incorporated
3939 Technology Drive
Maumee, Ohio 43537
20182020 PROXY STATEMENT
The Board of Directors is soliciting proxies to be used at the Annual Meeting of Shareholders to be held on Thursday,Wednesday, April 26, 2018,22, 2020, beginning at 8:30 a.m., Eastern Time, at our World Headquarters located at 3939 Technology Drive, Maumee, Ohio 43537. This proxy statement and the enclosed form of proxy are being made available to shareholders beginning March 22, 2018.12, 2020.
What is a proxy?
A proxy is your authorization for someone else to vote for you in the way that you want to vote. When you complete and submit a proxy card or use the automated telephone voting system or the Internet voting system, you are submitting a proxy. Dana’sDana's Board of Directors is soliciting this proxy. All references in this proxy statement to “you”"you" will mean you, the shareholder, and to “yours”"yours" will mean the shareholder’sshareholder's or shareholders’shareholders', as appropriate.
What is a proxy statement?
A proxy statement is a document the United States Securities and Exchange Commission (the SEC) requires to explain the matters on which you are asked to vote on by proxy and to disclose certain related information. This proxy statement and the accompanying proxy card were first mailed to the shareholders on or about March 22, 2018.12, 2020.
What is the purpose of the Annual Meeting?
At our Annual Meeting, shareholders will act upon the matters outlined in the notice of meeting, includingincluding: i) the election of directors; ii) an advisory vote on executive compensation; iii) ratification of the appointment of Dana’s independent registered public accounting firm; iv) amending the Second Restated Certificate of Incorporation (the Certificate of Incorporation) to eliminate supermajority voting requirements; and v)iv) a shareholder proposal, if properly presented at the Annual Meeting. Also, management will report on the state of Dana and respond to questions from shareholders.
What is the record date and what does it mean?
The record date for the Annual Meeting is February 26, 201824, 2020 (the Record Date). The Record Date was established by the Board of Directors as required by Delaware law. Holders of our common stock at the close of business on the Record Date are entitled to receive notice of the meeting and to vote at the meeting and any adjournments or postponements of the meeting.
Who is entitled to vote at the Annual Meeting?
Holders of our common stock at the close of business on the Record Date may vote at the meeting. On February 26, 2018, 145,233,66124, 2020, 144,449,797 shares of our common stock were outstanding, and accordingly, are eligible to be voted.
What are the voting rights of the holders of common stock?
Each outstanding share of common stock will be entitled to one vote on each matter to be voted upon.
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What is “Notice and Access” and why did Dana elect to use it?
We are making the proxy solicitation materials available to shareholders who hold shares electronically via the Internet under the Notice and Access rules and regulations of the SEC. On or about March 12, 2020, we mailed to such shareholders a Notice of Internet Availability of Proxy Materials (“Notice”) in lieu of mailing a full set of proxy materials. Accordingly, our proxy materials are first being made available to our shareholders on or about March 12, 2020. The Notice includes information on how to access and review the proxy materials and how to vote via the Internet. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We believe this method of delivery will decrease costs, expedite distribution of proxy materials to you and reduce our environmental impact. We encourage shareholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our Annual Meeting. Shareholders who received the Notice but would like to receive a printed copy of the proxy materials in the mail should follow the instructions in the Notice for requesting such materials.
What is the difference between a shareholder of record and a “street name” holder?
If your shares are registered directly in your name, you are considered the shareholder of record with respect to those shares.
If your shares are held in a stock brokerage account or by a bank or other nominee, then the brokerage firm, bank or other nominee is considered to be the shareholder of record with respect to those shares. However, you still are considered the beneficial owner of those shares, and your shares are said to be held in “street"street name.”" Street name holders generally cannot vote their shares directly and must instead instruct the brokerage firm, bank or other nominee how to vote their shares. See “How"How do I vote my shares?”" below.
I share an address with another shareholder. Why did we receive only one set of proxy materials?
Dana may satisfy SEC rules regarding delivery of our proxy materials, including our proxy statement, or delivery of the Notice by delivering a single copy of these documents to an address shared by two or more shareholders. This process is known as “householding.” To the extent we have done so, we have delivered only one set of proxy materials or one Notice, as applicable, to shareholders who share an address with another shareholder, unless contrary instructions were received prior to the mailing date.
We undertake to deliver promptly upon written or oral request a separate copy of our proxy statement, our 2019 Annual Report and/or our Notice, as requested, to a shareholder at a shared address to which a single copy of these documents was delivered. To make such a request, use the information provided below:
Internet www.proxyvote.com
Telephone 1-800-579-1639
Email sendmaterial@proxyvote.com
When requesting materials, the control number found in the box marked by an arrow on the Notice and Access card will need to be provided.
If your common stock is held by a brokerage firm or bank and you prefer to receive separate copies of our proxy statement, our 2019 Annual Report or the Notice, either now or in the future, please contact your brokerage firm or bank. If your brokerage or bank is unable or unwilling to assist you, please make such request using the contact information indicated above.
Shareholders sharing an address who are receiving multiple copies of proxy materials and who want to receive a single copy of our annual reports, proxy statements and/or our notices may do so by submitting a request using the contact information provided in this section.
How do I vote my shares?
If you are a registered shareholder of record as of February 26, 2018,24, 2020, as opposed to a street name holder, you will be able to vote in fourthe following ways: In person, by telephone, by the Internet,internet, by mail, or by proxy card.in person at the Annual Meeting.
To vote by proxy card, sign, date and return the enclosed proxy card. To vote by using the automated telephone voting system or the Internet voting system, the instructions for shareholders of record are as follows:
TO VOTE BY TELEPHONE: 866-883-3382Call toll-free 1-800-690-6903, 24 hours a day, seven days a week, until 11:59 p.m. (ET), on April 21, 2020.
Use any touch-tone telephone to vote your proxy.
| ► | Make sure you have your proxy card, notice document or email that you received and follow the simple instructions provided. |
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Have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available when you call.
Follow the simple instructions the system provides you.
You may dial this toll-free number at your convenience, 24 hours a day, 7 days a week. The deadline for telephone voting is 11:59 p.m. (ET) on April 25, 2018.
(OR)
TO VOTE BY THE INTERNET: www.proxypush.com/DAN
Use the Internet to vote your proxy.
Have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available when you access the website.
Follow the simple instructions to obtain your records and create an electronic ballot.
You may log on to this Internet site at your convenience, www.proxyvote.com, 24 hours a day, 7seven days a week. The deadline for Internet voting isweek, until 11:59 p.m. (ET), on April 25, 2018.21, 2020.
| ► | Make sure you have your proxy card, notice document or email that you received and follow the simple instructions provided. |
(OR)
TO VOTE BY MAIL:
| ► | If you received printed copies of the proxy materials by mail, you may mark, date and sign the enclosed proxy card and return it in the postage-paid envelope that was provided to you. You should sign your name exactly as it appears on the proxy card. |
| ► | If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity. |
(OR)
TO VOTE IN PERSON AT THE ANNUAL MEETING:
| ► | Bring the proxy card, notice document or email you received and bring other proof of identification and request a ballot at the meeting. |
If you submit a proxy to Dana before the Annual Meeting, the persons named as proxies will vote your shares as you directed. If no instructions are specified, the proxy will be voted: i) “FOR” all of the listed director nominees; ii) “FOR” approval of the advisory vote on executive compensation; iii) “FOR” ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm; iv) “FOR” amending the Certificate of Incorporation to eliminate supermajority voting requirements; and v)iv) “AGAINST” the shareholder proposal.
You may revoke a proxy at any time before the proxy is exercised by:
| (1) | delivering written notice of revocation to the Corporate Secretary of Dana at the Dana Law Department, 3939 Technology Drive, Maumee, Ohio 43537; |
| (2) | submitting another properly completed proxy card that is later dated; |
| (3) | voting by telephone at a subsequent time; |
| (4) | voting by |
| (5) | voting in person at the Annual Meeting. |
If you hold your shares in “street"street name,”" you must provide voting instructions for your shares in the manner prescribed by your brokerage firm, bank or other nominee. Your brokerage firm, bank or other nominee has enclosed or otherwise provided a voting instruction card for you to use in directing the brokerage firm, bank or other nominee how to vote your shares. If you hold your shares in street name and you want to vote in person at the Annual Meeting, you must obtain a legal proxy from your broker and present it at the Annual Meeting. You will also need to provide to us a brokerage statement if you intend to attend the Annual Meeting.
What is a quorum?
There were 145,233,661144,449,797 shares of Dana’sDana's common stock issued and outstanding on the Record Date. A majority of the issued and outstanding shares, or 72,616,83172,224,899 shares, present or represented by proxy, constitutes a quorum. A quorum must exist to conduct business at the Annual Meeting.
Will my shares be voted if I do not provide my proxy?
For shareholders of record: If you are the shareholder of record and you do not vote by proxy card, by telephone or via the Internet or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting.
For holders in street name: If your shares are held in street name, your shares may be voted even if you do not provide the brokerage firm with voting instructions. Under New York Stock Exchange (NYSE) rules, your broker may vote shares held in street name on certain “routine” matters. The NYSE rules consider the ratification of the appointment of our independent registered public accounting firm to be a routine matter. As a result, your broker is permitted to vote your shares on this matter at its discretion without instruction from you.
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When a proposal is not a routine matter, such as the election of directors, the advisory vote on executive compensation, amending the Certificate of Incorporation and the shareholder proposal, and you have not provided voting instructions to the brokerage firm with respect to that proposal, the brokerage firm cannot vote the shares on that proposal. The missing votes for these non-routine matters are called “broker non-votes.” Broker non-votes will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but not as shares present and voting on a specific proposal.
What vote iss are required?
Proposal I—I - Election of Directors: If a quorum exists, the election requires a plurality vote of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote, meaning that the director nominees with the most affirmative votes are elected to fill the available seats. As outlined in our Bylaws, regardless of this plurality vote any director who receives more “withheld” votes than “for” votes in an uncontested election is required to tender his or her resignation to the Board for consideration in accordance with the procedures set forth in the Bylaws. Our Nominating and Corporate Governance Committee will then evaluate the best interests of Dana and its shareholders and will recommend to the Board the action to be taken with respect to the tendered resignation. Following the Board’s determination, Dana will promptly publicly disclose the Board’s decision of whether or not to accept the resignation and an explanation of how the decision was reached, including, if applicable, the reasons for rejecting the resignation. Broker non-votes will not be counted as eligible to vote and, therefore, will have no effect on the outcome of the voting.
Proposal II—II - Advisory Vote on Executive Compensation: The proposal represents an advisory vote and the results will not be binding on the Board or Dana. If a quorum exists, the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter will constitute the shareholders’ non-binding approval with respect to our executive compensation programs. Therefore, abstentions will have the same effect as voting against the proposal. Broker non-votes will not be counted as eligible to vote on the proposal and, therefore, will have no effect on the outcome of the voting on the proposal. The Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.
Proposal III—III - Ratification of the Appointment of the Independent Registered Public Accounting Firm: If a quorum exists, the proposal to ratify the appointment of the independent registered public accounting firm must receive the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. Therefore, abstentions will have the same effect as voting against the proposal. Brokers will have discretionary voting power to vote this proposal so we do not anticipate any broker non-votes (described above).
Proposal IV—Amend the Certificate of Incorporation to Eliminate Supermajority Voting Requirements: If a quorum exists, the proposal must receive the affirmative vote of 66 2/3% of the outstanding capital stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. Therefore, abstentions will have the same effect as voting against the proposal. Broker non-votes will not be counted as eligible to vote on the proposal and, therefore, will have no effect on the outcome of the voting on the proposal.
Proposal V— - Shareholder Proposal: The shareholder proposal will be voted on at the Annual Meeting only if properly presented by or on behalf of the shareholder proponent. If a quorum exists, the shareholder proposal must receive the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. Therefore, abstentions will have the same effect as voting against the proposal. Broker non-votes will not be counted as eligible to vote on the proposal and, therefore, will have no effect on the outcome of the voting on the proposal.
Dana will vote properly completed proxies it receives prior to the Annual Meeting in the way you direct. If you do not specify how you want your shares voted, they will be voted in accordance with the Board’s recommendations. If you hold shares in more than one account, you must vote each proxy and/or voting instruction card you receive to ensure that all shares you own are voted. No other matters are currently scheduled to be presented at the Annual Meeting. An independent third party, Equiniti Trust Company (formerly Wells Fargo Bank, N.A.),Broadridge Financial Services, will act as the inspector of the Annual Meeting and the tabulator of votes.
How do I attend the annual meeting?Annual Meeting?
All shareholders as of the Record Date, or their duly appointed proxies, may attend the Annual Meeting. You must pre-register to attend. Please contact Dana Shareholder Services by email at InvestorRelations@dana.com or by telephone at 1-800-537-8823 providing your name, address, telephone number with area code, and note that you plan to attend the annual meeting. Dana will independently verify the status of shareholders of record as of the Record Date. Beneficial Shareholdersshareholders must provide evidence of share ownership to Dana Shareholder Services.
Beneficial Shareholders— – Those shareholders that hold their shares in “street name” must contact their brokerage firm, bank or other nominee and obtain a legal proxy in order to attend the meeting and vote their shares in person. Generally, there will be a box that you can check on the voting instruction card or website to indicate that you wish to attend and vote your shares at the annual meeting. You must provide a copy of the legal proxy to Dana Shareholder Services as definitive proof of ownership as of the Record Date in order to attend the meeting and to vote your shares in person.
If a beneficial shareholder does not obtain a legal proxy, but still wants to attend the annual meeting (and not vote their shares in person), you may provide other evidentiary material, such as broker statements, trade advices
or a letter from your broker proving ownership as of the Record Date. Dana reserves the right to restrict admission if evidentiary material is not definitive proof of proper and timely ownership.
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Dana will maintain a list of verified shareholders at the Annual Meeting of Shareholders. To gain admission at the meeting, you must present government-issued photo identification that matches the name on the pre-registration list.
Annual meeting pre-registration requests must be received by the end of business on Wednesday,Tuesday, April 25, 2018.21, 2020.
Seating is limited and admission is on a first-come basis.
Who pays for the costs of the Annual Meeting?
Dana pays the cost of preparing and printing the proxy statement and soliciting proxies. Dana will solicit proxies primarily by mail, but may also solicit proxies personally and by telephone, the Internet, facsimile or other means. Dana will use the services of D.F. King & Co., Inc., a proxy solicitation firm, at a cost of approximately $12,500 plus out-of-pocket expenses and fees for any special services. Officers and regular employees of Dana and its subsidiaries may also solicit proxies, but they will not receive additional compensation for soliciting proxies. Dana also will reimburse banks, brokerage housesfirms and other custodians, nominees and fiduciaries for their out-of-pocket expenses for forwarding solicitation materials to beneficial owners of Dana’sDana's common stock.
How can shareholders propose business (other than nominations) for consideration by shareholders at the 20192021 Annual Meeting of Shareholders?
Proposals to be Considered for Inclusion in Dana’s Proxy Materials—Materials – Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act), we must receive shareholder proposals by November 22, 201812, 2020 to consider them for inclusion in our proxy materials for the 20192021 Annual Meeting of Shareholders. A shareholder submitting a proposal for inclusion in our proxy materials must comply with Rule 14a-8.
Other Proposals for Consideration at the 20192021 Annual Meeting—Meeting – A shareholder who intends to propose an item of business at the 20192021 Annual Meeting of Shareholders (not for inclusion in our proxy materials) must comply with the requirements set forth in our Bylaws. Under Dana’sDana's Bylaws, our shareholders must provide advance notice to Dana in such cases. For the 20192021 Annual Meeting of Shareholders, notice must be received by Dana’sDana's Corporate Secretary no later than the close of business on January 26, 201922, 2021 and no earlier than the open of business on December 27, 2018.23, 2020.
If Dana moves the 20192021 Annual Meeting of Shareholders to a date that is more than 25 days before or after the date which is the one-year anniversary of this year’syear's Annual Meeting date (i.e.,April 26, 2018)22, 2021), Dana must receive your notice no later than the close of business on the 10th day following the day on which notice of the meeting date is first distributed to shareholders or Dana makes a public announcement of the meeting date, whichever occurs first.
Under Dana’s Bylaws, the notice of proposed business must include a description of the business and the reasons for bringing the proposed business to the meeting, any material interest of the shareholder in the business and certain other information about the shareholder. Dana’sDana's Bylaws specifying the advance notice and additional requirements for submission of shareholder proposals are available on Dana’sDana's website at www.dana.com.
How can shareholders nominate individuals for election as directors for consideration by shareholders at the 20192021 Annual Meeting of Shareholders?
Director Nominations for Inclusion in Dana’s Proxy Materials (Proxy Access)— – Pursuant to Dana’s Bylaws, a shareholder (or a group of up to 20 shareholders) who has continuously owned at least 3% of our shares for at least three years and has complied with the other requirements of our Bylaws may nominate and include in
Dana’s proxy materials director nominees constituting up to 25% of Dana’s Board. Notice of a proxy access nomination for consideration at the 20192021 Annual Meeting must be received no later than the close of business on November 22, 201812, 2020 and no earlier than the open of business on October 23, 2018.13, 2020.
Other Nominations for Consideration at the 20192021 Annual Meeting—Meeting – A shareholder who intends to nominate a person for election as a director at the 20192021 Annual Meeting of Shareholders (other than under proxy access) must comply with the requirements set forth in our Bylaws. Under Dana’sDana's Bylaws, our shareholders must provide advance notice to Dana in such cases. For the 20192021 Annual Meeting of Shareholders, notice must be received by Dana’sDana's Corporate Secretary no later than the close of business on January 26, 201922, 2021 and no earlier than the open of business on December 27, 2018.23, 2020.
If Dana moves the 20192021 Annual Meeting of Shareholders to a date that is more than 25 days before or after the date which is the one-year anniversary of this year’syear's Annual Meeting date (i.e.,April 26, 2018)22, 2021), Dana must receive your notice no later than the close of business on the 10th day following the day on which notice of the meeting date is first distributed to shareholders or Dana makes a public announcement of the meeting date, whichever occurs first.
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In All Cases—Cases – Whether a nomination is made under our proxy access bylaw or under our advance notice bylaw, a shareholder’s notice to nominate individuals for election to the Board of Directors must provide information about the shareholder and the nominee, as well as the written consent of the proposed nominee to being named in the proxy statement and to serve as a director if elected. Dana’sDana's Bylaws specifying the proxy access, advance notice and additional requirements for submission of nominations are available on Dana’sDana's website at www.dana.com.
Where should shareholders send proposals for business and director nominations for consideration at the 20192021 Annual Meeting of Shareholders?
All shareholder nominations of individuals for election as directors or proposals of other items of business to be considered by shareholders at the 20192021 Annual Meeting of Shareholders must be submitted in writing to our Corporate Secretary, Dana Incorporated, 3939 Technology Drive, Maumee, Ohio 43537.
How many of Dana’sDana's directors are independent?
Dana’sDana's Board of Directors has determined that eight of Dana's nine of Dana’s ten current directors are independent and seven out of the eight directors being nominated for election are independent. For a discussion of the Board of Directors’Directors' basis for this determination, see the section of this proxy statement entitled “Director"Director Independence and Transactions of Directors with Dana.”"
Does Dana have a Code of Ethics?
Yes, Dana hasStandards of Business Conduct for Employees, which applies to employees and agents of Dana and its subsidiaries and affiliates, as well asStandards of Business Conduct for Members of the Board of Directors. TheStandards of Business Conduct for Employees andStandards of Business Conduct for Members of the Board of Directorsare available on Dana’sDana's website at www.dana.com.
Is this year’syear's proxy statement available electronically?
Yes. You may view this proxy statement and the proxy card, as well as the 20172019 Annual Report, electronically by going to our website at www.dana.com/proxy and clicking on the document you wish to view, either the proxy statement and proxy card or annual report.
How can I find the results of the Annual Meeting?
Preliminary results will be announced at the Annual Meeting. Final results will be published in a Current Report on Form 8-K to be filed with the SEC within four business days after the Annual Meeting. If the official results are not available at that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available.
A copy of Dana’sDana's Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2019, as filed with the SEC, may be obtained without charge upon written request to the Corporate Secretary, Dana Incorporated, 3939 Technology Drive, Maumee, Ohio 43537.
The proxy statementDana’sProxy Statement and Dana’s annual report to shareholdersAnnual Report on Form 10-K are available on our website at www.dana.com/proxy.
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Following are the names and ages of the executive officers of Dana, their positions with Dana and summaries of their backgrounds and business experience. Our executive officers are those individuals who serve on Dana’s Executive Leadership Team. All executive officers are elected or appointed by the Board of Directors and hold office until the annual meeting of the Board of Directors following the annual meeting of shareholders in each year.
Name | ||||||||
| Age as of February |
| Executive Officer | |||||
Aziz S. Aghili | 61 | Executive Vice President and President, Off-Highway Drive and Motion Systems (since February 2020), Executive Vice President, President of Off-Highway Drive and Motion Systems | 2011 | |||||
Jonathan M. Collins | 40 | Executive Vice President and Chief Financial Officer (since January 2017), Senior Vice President and Chief Financial Officer (March 2016 to January 2017), Dana Incorporated; Senior Vice President and Chief Financial Officer (April 2013 to March 2016), Vice President, Finance (October 2010 to April 2013), ProQuest (a global information, content and technology company). | 2016 | |||||
James K. Kamsickas | 53 | Chairman of the Board (since December 2019), President and Chief Executive Officer (since August 2015), Dana Incorporated; President, Chief Executive Officer (April 2012 to August 2015), Global Co-Chief Executive Officer and President of North America and Asia (January 2011 to April 2012), President and Chief Executive Officer of North America and Asia (April 2007 to December 2010), International Automotive Components Group, S.A. (global supplier of automotive interior components and systems). Prior to IAC, Mr. Kamsickas held numerous domestic and international positions over 18 years with Lear Corporation (a leading global supplier of automotive seating and electrical systems). | 2015 | |||||
Douglas H. Liedberg | 52 | Senior Vice President, General Counsel and Secretary (since May 2017), Associate General Counsel (November 2008 to April 2017), Dana Incorporated. | 2017 | |||||
Dwayne E. Matthews | 60 | President, | 2011 | |||||
Robert D. Pyle | 53 | Executive Vice President | 2014 | |||||
Mark E. Wallace | 53 | Executive Vice President and President, Commercial Vehicle Drive and Motion Systems and Aftermarket (since February 2020), Executive Vice President, President, | 2008 | |||||
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Executive Compensation
Compensation Discussion and Analysis
Introduction
Our Compensation Discussion and Analysis (CD&A) describesprovides information about the executive compensation philosophy, key principles and approaches usedDana uses to determine the elements of compensation awarded to, earned by and paid to each of our named executive officers (NEOs) during 2017.2019. This discussion provides information andoffers context to the compensation disclosures included in the accompanying compensation tables and corresponding narrative discussion and footnotes below, and it should be read in conjunction with those disclosures.
The following Dana executives are ourOur NEOs for 2017:
2019 whose compensation is discussed in this CD&A and is included in the related tables are:
Name | Title | |
James K. Kamsickas | Chairman of the Board and Chief Executive Officer | |
Jonathan M. Collins | Executive Vice President and Chief Financial Officer | |
Mark E. Wallace | Executive Vice President | |
Aziz S. Aghili | Executive Vice President and President, Off-Highway Drive and Motion | |
Robert D. | President, Light Vehicle |
We first provide a brief executive overview of our compensation program*Mr. Pyle was named Executive Vice President and then discussPresident, Light Vehicle Drive Systems effective January 1, 2020
Executive Overview
Business Performance & Financial Results
Our key 2019 business and analyze the following topics:
financial highlights:
| ► | Experienced a record top-quartile year for safety performance with across-the-board improvements in lost-time and recordable incidents, and severity rates. | |
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| ► | Recognized as a top workplace employer at our facilities in the Asia-Pacific region, and in India, Italy, Mexico and the U.S. |
| ► | Successfully integrated strategic acquisitions including Oerlikon Drive Systems, SME and Nordresa, exceeding cost synergy targets and strengthening Dana’s e-Portfolio and broader electric vehicle position. |
| ► | Received more than 35 customer and industry honors across all business units, most notably, awarded the 2019 PACE Award for our Spicer AdvanTEK Ultra axle system, and named Supplier of the Year by both General Motors and FCA. |
| ► | Delivered $477 million year-over-year sales growth, up 6% to $8.6 billion, including an additional $350 million of organic sales backlog. |
| ► | Achieved $62 million of incremental Adjusted EBITDA, up 6% to $1.019 billion, for an Adjusted EBITDA margin of 11.8% and diluted adjusted earnings per share of $3.06. |
| ► | Produced a third consecutive year of Adjusted Free Cash Flow growth, increasing 12% to $272 million and yielding in excess of 3% of sales. |
| ► | Our shareholders enjoyed a 34% appreciation in the price of Dana shares over the course of 2019. |
Executive Overview8
Dana PerformanceTABLE OF CONTENTS
Dana’s financial performanceCompensation Philosophy
The objective of our executive compensation program is to retain, attract, motivate and reward our senior leaders in 2017 was very strong and we are well positioned for long term success. Continuedthe successful execution of our strategy. Our long-range enterprise strategy has rewarded shareholders withbuilds on our strong foundation of innovation and technology and leverages our operating model driven by cross functional resource sharing while maintaining a share price that reachedcustomer centric focus. Our strategy furthers the expansion of our global markets and accelerates the commercialization of new technology, enabling us to sustain our profitable growth trajectory while capitalizing on our position as a ten-year high. Below are some key results of Dana’s performanceleader in 2017:
Dana’s sales for 2017 were $7.2 billion, an increase of approximately $1.4 billion (24% from 2016), primarily due to strong end-market demand, acquisitions, conversion of sales backlog and favorable currency.
Adjusted EBITDA was $835 million, an increase of $175 million (27%) from 2016, and adjusted EBITDA margin was 11.6% of sales, an improvement of 30 bps over 2016.
Dana’s share price appreciated by 69% during 2017 and an increase inelectrified mobility. As such, the quarterly dividend from $0.06 to $0.10 per share beginning in 2018 was recently announced.
Dana’s Compensation Philosophy
Our compensation program is designed to balance short-term performance with long-term growth. Ourgrowth, offering compensation and benefits must bethat are competitive with executive compensation arrangements provided to executive officers at similar levels at comparably-sizedcomparably sized companies with whom we compete for talent. Dana’s executive compensation philosophy is reviewed annually by the Compensation Committee, and haswith a focus on the following key objectives:
goals:
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Compensation Alignment with Business Strategy
Our long-range enterprise strategy builds on our strong technology foundation and leverages our operating model driven by cross functional resource sharing while maintaining a customer centric focus. Our strategy furthers the expansion of our global markets while accelerating the commercialization of new technology as we evolve into the era of vehicle electrification and a broader definition of mobility.
Our executive pay program reflects our enterprise strategy by design and with the metrics used to evaluate performance in our incentive plans. These metrics are important financial measures that help provide sharp focus on critical results in running our business effectively and efficiently.
Enterprise Strategy
Dana’s Executive Compensation Practices
Dana’s executive compensation program features many best practices that serve shareholder interests.
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 | Base half of our long-term compensation on the achievement of objective, pre-established goals tied to financial, operational, and strategic measures. | ► |  | No excise tax gross ups. | ||
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| Award incentive compensation based on objective measures. | ► | | No excessive perquisites. | ||
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| Apply an accelerated schedule to meet minimum stock ownership guidelines. | ► | | No hedging or pledging of Dana stock. | ||
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| Maintain a clawback policy to recapture unearned incentive payments. | ► | | No excessive change-in-control or executive severance provisions. | ||
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| Retain an independent compensation consultant. | |||||
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| Include double trigger | |||||
Say on Pay and Shareholder Engagement
Last year’s advisory vote on executive compensation (Say on Pay) was stronglyagain firmly supported by our shareholders with 94%shareholders. 93% of the votes were cast in favor of our pay practices. Given the new Enterprise Strategy, the Compensation Committee decided to make some modifications to thepractices which we believe signals that our shareholders understand that our executive compensation program is appropriately aligned with their interests. We value feedback from our shareholders and throughout 2019 we were actively engaged with shareholders through participation in numerous investor meetings and conferences, many of which were attended by our Chairman and CEO. In addition, we hosted an investor day in March where we presented our refreshed enterprise strategy, Powering into e-Drive. The Compensation Committee considered the favorable Say on Pay vote and other factors explained in our CD&A and approved refinements to better align compensation withelements of our program to ensure the continued alignment of Dana’s strategy and business goals with shareholders’ long-term interests. Those changes are outlined in further detail later in this discussion and objectives and shareholder interests.analysis.
2017 Compensation Changes
For 2017, the Compensation Committee approved changes to incentive plan metrics for the 2017 annual incentive plan and long-term incentive plan. Below is a summary of the changes along with the rationale:
Annual Incentive Plan
Relationship between DanaBetween Dana’s Pay & Performance
Comparator Compensation DataPeer Group
One of the factors our Compensation Committee uses in setting executive compensation is an evaluation of how our target compensation and benefitbenefits levels compare towith those of similarly-situatedsimilarly situated executives at companies that comprise our executive compensation peer group (Peer Group). Dana’s philosophy for senior executive pay, including NEO pay, is to target a range of +/- 15% of the 50th percentile of our Peer Group and general industry market data as provided by the Compensation Committee’s independent compensation consultant. In addition to market data, other factors, such as an individual’s experience, responsibilities and long-term strategic value to Dana, are also considered when making recommendations and decisions on compensation.
The Peer Group used for benchmarking executive pay for all NEOs is made up of companies that are:
in similar industries where Dana competes for talent, customers and capital – auto components, industrial machinery, construction and farm machinery, heavy trucks, and other durable goods manufacturers,
| in similar industries where Dana competes for talent, customers and capital – auto components, high-tech industrial, construction and farm machinery, heavy trucks and other durable goods manufacturers; |
► | of similar size (as measured by annual revenue), with a range of about 1/3rd to 3x |
of similar complexity to Dana (e.g. multi-country and multi-segment)
| ► | of similar complexity to Dana (e.g. multi-country and multi-segment). |
The Peer Group is reviewed annually by the Compensation Committee every year and modifications are made to ensure each company in the group meets the above comparison criteria. The companies shown in the table below comprise our Peer Group:
American Axle & | Illinois Tool Works Inc. | |
BorgWarner Inc. | Ingersoll-Rand plc | |
Cooper-Standard Holdings Inc. | Lear Corporation | |
Cummins Inc. | Meritor, Inc. | |
Delphi Technologies PLC | Navistar International Corporation | |
Dover Corporation | OshKosh Corporation | |
Eaton Corporation plc | Parker-Hannifin | |
Emerson Electric Co. | Tenneco Inc. | |
Flowserve | Terex Corporation | |
Fortive | ||
The Timken Company |
In 2017,2019, the Compensation Committee, upon analysis andafter review with its executive compensation consultants,consultant, made the following changes to the Peer Group. Cummins, Inc., Fortive Corp., Parker-Hannifin Corp.Cooper Tire & Rubber Company and Rexnord Corp.Corporation were removed as both companies fall below the ideal revenue range. Eaton Corporation plc, Emerson Electric Co. and Illinois Tool Works Inc. were added to broaden the benchmarking of ouras compensation programs and practices and for purposes of evaluating pay for performance. Metaldyne Performance Group and Joy Global Inc. were withdrawn from the Peer Grouppeers due to being acquiredsimilarities to Dana in terms of industry and consolidated into other companies.geographic complexity, diversity of business segments and the varied global markets they each serve.
Pay for Performance
We believe it is important to look at how NEO realizable pay compares to Dana’s performance as the pay that NEOs actually or could potentially receive is designed to link to such performance. The Compensation Committee and management analyzed the alignment between the pay of our NEOs and Dana’s three-year (2014-2016)(2016-2018) performance relative to the Peer Group. A one-year period was considered for our CEO since Mr. Kamsickas was hired in 2015. The table below shows the characteristics that were used for the study:
study.
Realizable Pay & Performance Measurement | |||||
Realizable Pay includes base salary, actual bonus payouts and theoretical gains of long-term incentive grants from | Note that this differs from the summary compensation table pay, which represents the grant-date | For purposes of this analysis, the following financial metrics were used — free cash flow | |||
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The following graphs show the correlation between realizable pay and the financial performance measures indicated above:
Over a one-year period for Dana’s CEO, who was hired in 2015 and the CEOs in our Peer Group; and
Overabove over a three-year period for Dana’s CEO and other NEOs, and the CEOs and other NEOs in our Peer Group.
Alignment of Cash Compensation with Performance
Chief Executive Officer
Alignment of Realizable Pay with Performance
Named Executive Officers
NEO Pay Mix
To align pay levels for our NEOs with Dana’s performance, our pay mix places the greatest emphasis on performance-based incentives. A significant majority (84%(86% of our Chairman and CEO’s target compensation and 75% of the average target compensation of our other NEOs) is performance-based.
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Elements of 2017the 2019 Executive Compensation Program
Our annual executive compensation program has three primary pay components: base salary, annual performance-based cash bonuses and long-term equity incentives. We also offer retirement and additional benefits.
COST TO DANA | ELEMENT | KEY CHARACTERISTIC | WHY WE PAY THIS ELEMENT | DETERMINING FACTORS | |||||||||
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Base salary | ► | Fixed compensation payable in cash. Reviewed annually and adjusted when appropriate. | ► | Provide base level of competitive cash compensation for | ► | Experience, job scope, market data and individual performance. | |||||||
VARIABLE | |||||||||||||
Annual cash incentive award | ► | Variable compensation payable in cash based on performance-related financial and individual goals. | ► | Motivate high performance and reward short-term Dana-wide, | ► | Corporate funding pool is based on financial performance metrics | |||||||
Performance share awards (PSA) | ► | PSAs vest after | ► | Align the interests of shareholders with those of senior executives
| ► | Target awards based on job scope, market data and individual performance. | |||||||
► | Minimize risk-taking behaviors for positive long- term results. | ► | Payouts are based on our performance on financial metrics | ||||||||||
Restricted stock units (RSU) | ► | RSUs vest on the third anniversary of the grant date. | ► | Increase long-term equity ownership and focus executives on providing shareholders with superior investment returns. | ► | Target award based on job scope, market data and individual performance. | |||||||
► | Vesting terms and ownership guidelines promote retention and a strong linkage to the long-term interests of shareholders. | ||||||||||||
Base Salary
We provide base salaries to compensate our NEOs for their primary roles and responsibilities, and to provide a stable level of annual compensation. Actual NEO salary levels and increases vary based on the NEO’s role, level of responsibility, experience, individual performance, future potential, and market value. In addition, salary increases may be warranted because of a promotion or change in responsibilities.
Considering market-based positioning and each NEO’s individual performance, the Compensation Committee approved the 20172019 annualized base salary adjustments (effective April 1, 2017)2019) below:
NEO | 2018 Salary | 2019 Salary | Percent Increase | ||||||
James K. Kamsickas | $ | 1,152,600 | $ | 1,175,000 | 1.9 | % | |||
Jonathan M. Collins | $ | 615,000 | $ | 658,000 | 7.0 | % | |||
Mark E. Wallace | $ | 605,000 | $ | 611,000 | 1.0 | % | |||
Aziz S. Aghili | $ | 550,000 | $ | 565,000 | 2.7 | % | |||
Robert D. Pyle | $ | 540,000 | $ | 546,000 | 1.1 | % | |||
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| NEO | 2016 Salary | 2017 Salary | Percent Increase | |||||||
James K. Kamsickas | $ | 1,100,000 | $1,130,000 | 2.7 | % | |||||
Jonathan M. Collins | $ | 500,000 | $575,000 | 15.0 | % | |||||
Mark E. Wallace | $ | 580,000 | $590,000 | 1.7 | % | |||||
Aziz S. Aghili | $ | 515,000 | $530,000 | 2.9 | % | |||||
Robert D. Pyle | $ | 482,000 | $510,000 | 5.8 | % | |||||
Messrs. Collins’TABLE OF CONTENTS
Base salary increases consider performance, market movement and Pyle’s base salaries were adjustedother factors. A higher increase, as a percent of salary, was provided to Mr. Collins to align with base compensation comparable to executives in similar positions ofwithin Dana’s peer group.Peer Group.
Annual Performance-Based Cash Incentive
Our performance-based annual bonus program, the Dana Annual Incentive Plan (AIP), is a cash-based plan intended to motivate and reward employees based on Dana-wide, business unit and individual performance that drive shareholder value.
The AIP covers approximately 3,300 employees, including our NEOs. At the beginning of each year, the Compensation Committee reviews and approves an annual cash bonus target for each NEO as a percentage of base salary for the upcoming performance period. The NEOs may earn from 0% to 200% of their target incentive opportunity. 80% of the incentive opportunity is based on actual consolidated and/orand business unit financial performance compared to targets, and 20% is based on personalindividual performance goals focused on driving strategic, operational and other priorities of the business. All performance-related goals are approved by the Compensation Committee.
For our NEOs, the 20172019 AIP target payout opportunities and results weightings are shown in the table below:
NEO | ||||||
(% of Base | Consolidated and Business Unit Performance Results Weighting | Individual Performance Goals Results Weighting | ||||
James K. Kamsickas | 125 | % | 80% Consolidated | 20% Individual | ||
Jonathan M. Collins | 75 | % | 80% Consolidated | 20% Individual | ||
Mark E. Wallace | 75 | % | 40% Consolidated 40% Business Unit | 20% Individual | ||
Aziz S. Aghili | 75 | % | 40% 40% Business Unit | 20% Individual | ||
Robert D. Pyle | 70 | % | 40% 40% Business Unit | 20% Individual | ||
Following the review ofPeer Group compensation paid within our peer group,benchmarking review, the Compensation Committee determined that for 2017, Mr. Kamsickas’ AIP target opportunity would be increased (from 110% of base salary2019, no changes to 120%) in an effort to better align his AIP award with annual incentive compensation opportunities afforded to the chief executive officers of the companies in Dana’s peer group. No other changes were made to the AIP target opportunities were needed for any other NEO in 2017,of the NEOs, as the target opportunity levels were within the competitive pay range for each position. The performance results weightings for Messrs. Wallace, Aghili and Pyle remained at 40% business unit and 40% consolidated results to continue to incentivize and reward leveraging core capabilities, resources and knowledge across Dana.
The 20172019 AIP was based on four key performance metrics shown in the table below and was designed to reward the achievement of performance goals at the consolidated, business unit and individual levels. TheEffective with the 2019 AIP, the financial performance metrics were:
| Annual Incentive Plan Metrics | Weighting | |||||||||
Financial Performance Metrics | ||||||||||
Adjusted EBITDA | 60% | } | ||||||||
Adjusted EBITDA Margin | 20% | 80% | ||||||||
Free Cash Flow | 20% | |||||||||
Personal Performance Metric
| 20% | |||||||||
EBITDA is defined as net income before interest, taxes, depreciation,metric weightings were rebalanced so that each metric had an equal weighting, which was designed to enhance incentives related to, and amortization
Why adjust reported results (e.g. EBITDA), for purposesto better align with, profit margin expansion and free cash flow generation which are key value drivers of our incentive plans?business.
Annual Incentive Plan Metrics | 2019 Weighting | Prior Weighting | ||||||||||
Financial Performance Metrics | ||||||||||||
Adjusted EBITDA | 1/3rd | } | 80 | % | 60 | % | ||||||
Adjusted EBITDA Margin | 1/3rd | 20 | % | |||||||||
Adjusted Free Cash Flow | 1/3rd | 20 | % | |||||||||
Individual Performance Goals | 20 | % | 20 | % | ||||||||
Our incentive plans require thatmake certain adjustments be made to our reported results of operations for purposesthe purpose of calculating incentive awards. Such adjustments are designed to provide a comparable basis from year to year from which incentive awards are calculated so as to ensure that participants in the plan are incentivized and rewarded appropriately.properly.
Adjustments to EBITDA generally include equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits costs and other adjustments not related to our core operations (e.g. gain/loss, gains or losses on debt extinguishment, pension settlements, divestitures and impairments)impairments, etc.). With these adjustments for incentive plan purposes, there is alignment with the Adjusted EBITDA measure used in our public reporting.publicly reported financial results. Adjustments to Free Cash Flow include discretionary pension contributions. An additional adjustment for incentive compensation is made to remove the effecteffects of currency exchange rate fluctuations, which may have a significant impact on our financial results given our international footprint, and which is not within management’s control.
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Company Financial Metrics and Performance
Dana’s financial performance makes up 80% of the overall AIP awards for the NEOs and is measured by three equally weighted financial metrics: |  | |
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To determine whether annual incentive awards are paid, performance for the year is measured against specified target levels for each financial and individual performance goal. The target for 100% annual incentive achievement was based on achieving the levels of the three financial metrics from Dana’s (and each business unit’s) annual operating plan reflecting a level of performance which, at the time, was anticipated to be challenging but achievable. The threshold level was set to be reflective of performance at which the Compensation Committee believed a portion of the award opportunity should be earned. The maximum level was set well above the target, requiring significant achievements and reflecting performance at which the Compensation Committee believed a 200% target award was warranted.
Consolidated AIP Performance
The weighting, target performance, actual performance and payout of the 20172019 AIP metrics at the consolidated level are as follows:shown in the table below. In addition to the change to the weighting for the metrics in the 2019 AIP, the performance ranges associated with the Adjusted EBITDA and Adjusted EBITDA Margin metrics were modified to complement the rigor inherent in our target-setting processes by further incentivizing the attainment of superior performance outcomes.
AIP Performance Metrics | Weight | Threshold | Target | Maximum | Actual | Payout (% of Target) |
Adjusted EBITDA | 1/3rd | $956M | $1,125M | $1,294M | $1,031M | 58% |
Adjusted EBITDA Margin | 1/3rd | 11.7% | 12.3% | 12.9% | 11.8% | 38% |
Adjusted Free Cash Flow | 1/3rd | $234M | $275M | $316M | $272M | 95% |
Weighted Payout for Consolidated Metrics: | 64% | |||||
| AIP Performance Metrics | Weight | Threshold | Target | Maximum | Actual | Payout (% of Target) | ||||||
Adjusted EBITDA* | 60% | $616M | $725M | $798M | $801.1M | 200% | ||||||
Adjusted EBITDA Margin* | 20% | 9.7% | 11.4% | 12.5% | 11.6% | 116% | ||||||
Free Cash Flow | 20% | $15M | $45M | $75M | $161M | 200% | ||||||
Weighted Payout for Consolidated Metrics: | 183% | |||||||||||
Business Unit AIP Performance
For Mr. Wallace, 40% of his AIP award is based on the weighted payout of the three performance metrics described above for the Commercial Vehicle Driveline TechnologiesDrive and Motion Systems business unit for which he is responsible. The weighted payout for adjustedAdjusted EBITDA, adjustedAdjusted EBITDA Margin and Adjusted Free Cash Flow in the Commercial Vehicle Driveline TechnologiesDrive and Motion Systems business unit was 189%0% of Target.
For Mr. Aghili, 60%40% of his AIP award is based on the weighted payout of the three performance metrics described above for the Off-Highway Drive and Motion TechnologiesSystems business unit for which he is responsible. The weighted payout for adjustedAdjusted EBITDA, adjustedAdjusted EBITDA Margin and Adjusted Free Cash Flow in the Off-Highway Drive and Motion TechnologiesSystems business unit was 189%51% of Target.
For Mr. Pyle, 60%40% of his AIP award is based on the weighted payout of the three performance metrics described above for the Light Vehicle Driveline TechnologiesDrive Systems business unit for which he is responsible. The weighted payout for adjustedAdjusted EBITDA, adjustedAdjusted EBITDA Margin and Adjusted Free Cash Flow in the Light Vehicle Technologies DrivelineDrive Systems business unit was 150%96% of Target.
For all individual business units, goals are not disclosed due to competitive harm concerns.
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Individual Performance Goals
The NEOs’
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The Compensation Committee reviews the strategic, operational and other individual performance goals for the Chairman and CEO and other NEOs. The Chairman and CEO sets forth each of the other NEO’s individual goals (and the weighting of each goal), subject to approval by the Compensation Committee. The Compensation Committee sets the individual goals and weighting of each goal for the Chairman and CEO.
20172019 Annual Incentive Plan Results
The annual incentive payment for 2017,2019, based on the financial and personal performance metrics shown above, for the NEOs are shown in the table below:
| NEO | 2017 AIP Award | |||
James K. Kamsickas | $ | 2,522,160 | ||
Jonathan M. Collins | $ | 802,125 | ||
Mark E. Wallace | $ | 774,375 | ||
Aziz S. Aghili | $ | 704,900 | ||
Robert D. Pyle | $ | 606,900 | ||
NEO | 2019 AIP Award |
James K. Kamsickas | $1,045,750 |
Jonathan M. Collins | $354,333 |
Mark E. Wallace | $216,294 |
Aziz S. Aghili | $294,930 |
Robert D. Pyle | $317,226 |
The performance and payout range (threshold, target and maximum incentive opportunity) of annual cash incentives for reaching 20172019 performance goals under the 20172019 AIP for each of our NEOs is provided in the table titled “Grants of Plan-Based Awards.” The actual award paid, as shown in the table above, is also provided in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” below.
Long-Term Incentive Program (LTIP)
We believe that Dana’s long-term performance is driven through an ownership culture that rewards executives for creating and maximizing shareholder value. Our LTIPLong-Term Incentive Program (LTIP) provides participants, including our NEOs, with incentive awards that serve an important role by balancing short-term goals with long-term shareholder value creation while minimizing risk-taking behaviors that could negatively affect long-term results.
The Compensation Committee approves the amount of theeach long-term incentive award, which is based on a percentage of the NEO’s base salary. Each NEO’s award opportunity is based on a target dollar value (determined prior to the beginning of the performance period) assigned to his or her position based on market comparisons for similar positions, using both peer groupPeer Group and general industry market data. For 2017,2019, following its review of market data review, the Compensation Committee approved an increase in Mr. Collins’Kamsickas’ LTIP target opportunity in an effort to better align with long-term compensation opportunities afforded chief executive officers of the companies in Dana’s Peer Group. Mr. Aghili’s target opportunity increased as a result of his promotion to executives with similar positions of Dana’s peer group.Executive Vice President during the prior year. No other changes were made to the 20172019 target LTIP opportunities for any of our other NEOs which fallas the target opportunity levels were within the competitive pay range for our peer group.each of their positions.
One-half (50%)50% of the total value of the target long-term incentive opportunity is delivered through performance sharesshare awards (PSAs) and the other half (50%)50% through restricted stock units (RSUs). We believe both PSAs and RSUs are forms of performance-based incentive compensation because PSAs provide direct alignment with shareholder interests and the value of RSUs fluctuates based on stock price performance.
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In addition to requiring achievement of performance criteria in respect of the performance shares, PSAs and RSUs require the NEO to remain employed with Dana for three years from the grant date, unless the NEO attains retirement age (at least age(age 60 with at least 10 years of service, or at least age 65)65 regardless of service) whereby a prorated award is paid. The value of performance share awardsPSAs and RSUs granted to each of our NEOs in 20172019 is shown in the “Summary Compensation Table” below..
Performance Shares
The LTIP is designed to provide PSAs for a select group of senior executives, including our NEOs. PSAs are tied to the achievement of two performance measures each weighted equally: adjustedof equal weight, Adjusted EBITDA Margin and ROIC.Return on Invested Capital (ROIC). Each metric is based on a three-year performance period (2017-2019)(2019-2021) with a performance range that can result in PSAs offrom 0% to 200% of the target opportunity.
The inclusion of Adjusted EBITDA Margin drives theour long-term expansion commitments and continues focuswith an emphasis on shareholder return. It also drives profitable sales growth and optimizesthe optimization of our cost structure. ROIC ensuresincentivizes management usesto allocate Dana’s capital in an effective manner that further drives shareholder return. Furthermore, thereturns for our shareholders. The value of Performance Sharesperformance shares is also tied to Dana’s stock price performance, which aligns the executives’ interests with those of shareholders. The target opportunities of PSAs for the NEOs are shown in the table below:
NEO | PSA 2019 Target Award Opportunity (# shares) | |||
James K. Kamsickas | 168,311 | |||
Jonathan M. Collins | 44,903 | |||
Mark E. Wallace | 40,639 | |||
Aziz S. Aghili | 36,945 | |||
Robert D. Pyle | 31,542 | |||
Restricted Stock Units
The other 50% of the LTIP design consists of RSU awards. We use RSUs incentto incentivize and reward executives for improving long-term stock value and to serve as a retention tool. RSUs are generally granted in February to approximately 170160 senior management employees, including our NEOs, and cliff vest on the third anniversary of the grant, provided the recipient remains employed by Dana. The RSUs awarded in 2017, based on the target opportunities, for2019 to the NEOs are shown in the table below:
below, based on target opportunities:
NEO | Number of RSUs Awarded in 2019 | |||
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James K. Kamsickas | 168,311 | |||
Jonathan M. Collins | 44,903 | |||
Mark E. Wallace | 40,639 | |||
Aziz S. Aghili | 36,945 | |||
Robert D. Pyle | 31,542 | |||
Equity awards granted to each of our NEOs are shown in the “Grants of Plan-Based Awards” table and “Summary Compensation Table” below.
20152017 LTIP Performance (Three-year performance period ending December 31, 2017)2019)
December 31, 20172019 marks the end of the three-year performance period offor the 20152017 LTIP awards. The performance metrics, targets and performance-payout ranges for such awards were set and approved by the Compensation Committee in February 2015.2017.
AlthoughEffective with the 20142017 LTIP, Total Shareholder Return (TSR) was replaced with Adjusted EBITDA Margin and accordingly, the two metrics for the 2017 LTIP were Adjusted EBITDA Margin and Pre-Tax ROIC. The target levels of achievement for the new Adjusted EBITDA Margin metric and the Pre-Tax ROIC metric were set to align with aggressive financial goals established for the 2019 fiscal year. The 2017 LTIP awards (three-yearmaintained an equal weighting for the two performance period ending December 31, 2016) resulted in no payout of performance shares for thatmetrics.
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For the 2017-2019 performance period, the significant improvement of our stock price,Adjusted EBITDA Margin metric underperformed relative to target reflecting challenges in the TSR index (Dow Jones U.S. Industrial Index) during 2015-2017, resultedoperating environment, notably softening demand in a payout ofkey end-markets. With continued improvement in financial performance sharesresulting from the 2015 LTIP awards. Given challenging economic conditions in certain areas outside the U.S.profitable growth and currency fluctuations,effective capital allocation, our Pre-Tax ROIC during the performance period was below the threshold limit set in
2015.exceeded target levels. The table below showssummarizes the results of the 20152017 LTIP performance period relative to targetstarget and the actual achievement level forof the 20152017 LTIP awards.
Performance Measures (and weighting) for PSAs | 2015-2017 Goals | 2015-2017 Performance | 2017 Award | |||||||
| Threshold | Target | Maximum | Actual | |||||||
Total Shareholder Return (50%) | 25th Percentile | 50th Percentile | 80th Percentile | 63.3 Percentile | 144.30% | |||||
Pre-Tax ROIC (50%) | 18.3% | 20.1% | 21.1% | 16.5% | 0.00% | |||||
Weighted Payout: | 72.15% | |||||||||
Performance Measures for PSAs Equal Weighting | 2017-2019 Targets | 2017-2019 Performance Actual | 2019 Actual Award | ||||||||||||
Threshold | Target | Maximum | |||||||||||||
Adjusted EBITDA Margin (2019 Fiscal Year) | 11.3 | % | 12.5 | % | 13.8 | % | 11.8 | % | 55 | % | |||||
Pre-Tax ROIC (3-year average) | 12.2 | % | 15.2 | % | 17.5 | % | 16.2 | % | 142 | % | |||||
Weighted Payout: | 99 | % | |||||||||||||
The actual payout with respectof PSAs to the PSAs issuedNEOs, awarded as part of the 20152017 LTIP, award,was based on the financial metrics shown above for the three-year performance period ending December 31, 2017, for the NEOs2019, and is shownreflected in the table below. Note that Mr. Collins did not receive a LTIP award in 2015 as he was hired in March 2016.
NEO | 2017 LTIP Performance Shares Target Award | 2017 Performance Share Payout | ||||
James K. Kamsickas | 126,663 | 125,395 | ||||
Jonathan M. Collins | 31,985 | 31,665 | ||||
Mark E. Wallace | 34,135 | 33,793 | ||||
Aziz S. Aghili | 26,356 | 26,092 | ||||
Robert D. Pyle | 24,667 | 24,419 | ||||
| NEO | 2015 LTIP Performance Shares Target Award | 2015 Performance Share Payout | ||||||
James K. Kamsickas | 98,061 | 70,750 | ||||||
Mark E. Wallace | 29,189 | 21,059 | ||||||
Aziz S. Aghili | 23,135 | 16,691 | ||||||
Robert D. Pyle | 19,766 | 14,261 | ||||||
Other Elements of Compensation
To remain competitive with other companies and to retain, attract retain and motivate highly talented executives, we offerprovided perquisites to our NEOs in 2019, as well as health, wellness and a benefits package.retirement benefits.
Executive Perquisites Plan
We have adoptedadministered an Executive Perquisites Plan in 2019 that providesprovided an annual fixed cash allowance to eligible employees (including our NEOs) in lieu of individual executive perquisites. We provide a fixed cash allowanceThe program was designed as part of a competitive pay package to assist in recruitingretaining and retainingrecruiting talented executives. A cash-based program is preferred over programsWe do not offer individual perquisites to our NEOs such as car allowances, club memberships, and tax and financial planning typically provided in a company-managed executive perquisite program, which can be administratively burdensome and costly. In addition, ourplanning. Our cash perquisite program is a taxable benefit paid on a semi-monthly basis and unlike some managed perquisite programs, we do not provide tax gross-up payments to cover applicable taxes on the allowance. Our Chairman and CEO iswas entitled to and received $50,000 annuallyunder the plan, and the remaining NEOs arewere each entitled to $35,000 annually.and received $35,000. To better align with market practices, effective January 1, 2020, our NEOs will no longer participate in the Executive Perquisites Plan and will no longer receive any cash allowance, nor will individual perquisites be offered to our NEOs.
International Assignment Benefits
We maintain an International Assignment Policy for certain employees who accept an international assignment at the request of Dana. The benefits under this program generally include some or all of the following benefits as needed: cost of living allowance, location premium, relocation allowance, housing allowance, transportation allowance, tax preparation, assignment completion payment, repatriation allowance and annual home leave. Mr. Aghili received benefits under this program in 2017.2019.
For more information on the benefits provided to Mr. Aghili, see the “Summary Compensation Table” and related footnotes below.footnotes.
Health & Welfare—Welfare – Wellness Benefits
We also provide other benefits such as medical, dental, life insurance, accidental disability and dismemberment insurance, short-term disability and long-term disability to our NEOs, which are also provided to
all eligible U.S.-based salaried employees. Eligible employees can purchase additional life, dependent life and accidental death and dismemberment coverage as part of their employee benefits package. Our NEOs and certain other manager-level employees may also purchase supplemental long-term disability insurance.
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As part of our employee health and wellness benefit initiative,initiatives, we provide an executive physical program to certain executives, including Messrs. Kamsickas, Collins, Wallace, Aghili and Pyle.Pyle, an executive physical program in which we strongly encourage participation. The benefit provides an annual routine wellness examination and physical at a cost to Dana not to exceed $2,500of approximately $2,600 per executive.executive with a slightly higher cost for initial participation.
Retirement Benefits
We maintain a tax-qualified, “safe harbor” 401(k) plan for our employees, including the NEOs. Eligible participants may make voluntary contributions to the plan up to Internal Revenue Code limits. Dana makes both matching contributions and a discretionary fixed contribution to each eligible employee’s 401(k) plan account. We match 100% of the employee’s contributions up to 3% of compensation and 50% of the employee’s contributions from 3% to 5% of compensation, providing a maximum employer match of 4% of compensation to an employee. For 2017,We provide a company fixed contribution ofequal to 3.5% of an employee’s compensation was also made into theeach eligible employee’s 401(k) account.compensation.
We maintainprovide a non-qualified savings plan (restoration plan), to which we credit amounts to participants, including our NEOs, that we would have otherwise provided as matching and fixed contributions under the 401(k) plan if IRS statutory limits on 401(k) plan contributions had not been applicable.
We maintainalso provide a non-qualified defined contribution Supplemental Executive Retirement Plan (SERP) for certain executives, including our NEOs. We believe that the SERP enables us to provide our NEOs with a competitive retirement program in line with our peers. A portion of the SERP benefit is based on our performance.
We maintainoffer a non-qualified deferred compensation plan that allows eligible employees, including our NEOs, to defer base salary and/or incentive pay to be paid at a future date. For more information regarding our non-qualified retirement programs, see the narrative following the “Nonqualified Deferred Compensation” table.
How Compensation Decisions are Made
Role of the Compensation Committee and Chairman and CEO
The Compensation Committee of the Board of Directors assists the Board in fulfilling its obligations related to the compensation of Dana’s executive officers and, in general, with respect to compensation and benefits programs relating to all employees. Our current Compensation Committee consists of a chairmanchair and independent directors who are appointed annually by the Board. Under its Charter, the Compensation Committee must have a minimum of three members who meet the requirements for independence as set forth by the Securities and Exchange Commission (SEC), the New York Stock Exchange (NYSE) and our Standards of Director Independence. Members of the Compensation Committee must also qualify as “non-employee directors” within the meaning of Exchange Act Rule 16b-3 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code.
The Compensation Committee members during 2017 were: Keith E. Wandell (Chairman),served as Chair of the Compensation Committee for part of 2019 before stepping down as Chair and Committee member. Mr. Wandell was succeeded by Rachel A. Gonzalez who was named Chair and served in that capacity for the remainder of the year. Virginia A. Kamsky Terrencerelinquished her role as a member of the Compensation Committee during the year. The other members of the Compensation Committee serving in 2019 included Michael J. Keating, Raymond E. Mabus, Jr.,Mack, R. Bruce McDonald and Mark A. Schulz.Diarmuid B. O’Connell.
The Compensation Committee’s responsibilities include, but are not limited to, reviewing our executive compensation philosophy and strategy, participating in the performance evaluation process for our CEO, setting base salary and incentive opportunities for our CEO and other senior executives, establishing the overarching pay philosophy for Dana’s management team, establishing incentive compensation and performance goals and objectives for our executive officers and other eligible executives and management and determining whetherto:
| ► | Reviewing our executive compensation philosophy and strategy; |
| ► | Participating in the performance evaluation process for our Chairman and CEO; |
| ► | Setting base salary and incentive opportunities for our Chairman and CEO and other senior executives; |
| ► | Establishing the overarching pay philosophy for Dana’s management team; |
| ► | Establishing incentive compensation and performance goals and objectives for our executive officers and other eligible executives and management, and determining whether performance objectives have been achieved; and |
| ► | Recommending employment and severance agreements for our Chairman and CEO and other senior executives to the Board. |
performance objectives have been achieved. The Compensation Committee also recommends to the Board employment and severance agreements for our CEO and other senior executives. Executive sessions are held by the Compensation Committee without the participation of any member of executive management, including the NEOs.NEOs, typically to discuss compensation matters germane to the Chairman and CEO. Each year, the Compensation Committee reviews the performance and total compensation package of our NEOs. The Compensation CommitteeNEOs and reviews and establishes each NEO’s total target and actual compensation for the current year which includesincluding base salary, annual bonus opportunities and long-term incentive awards.
Our Chairman and CEO is responsible for making recommendations to the Compensation Committee regarding base salary and incentive opportunities for the NEOs other than with respect to his own compensation.
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Compensation decisions are made by the Compensation Committee using its sole judgment. The Compensation Committee focuses primarily on each NEO’s performance against his or her financial and strategic objectives, Dana’s overall performance, and a Business Unit’sbusiness unit’s performance where applicable, while reserving discretion to reflect the overall business performance. No discretion was used in 2019 to change pay outcomes.
Role of the Independent Compensation Consultant
The Compensation Committee’s charter states the Compensation Committee may retain outside compensation consultants, legal advisors or other advisors. The Compensation Committee retains an independent compensation consultant, Mercer (US) Inc. (Mercer), a wholly-ownedwholly owned subsidiary of Marsh & McLennan Companies, Inc. (MMC), to advise it on certain compensation matters. The Compensation Committee has the sole authority to retain, compensate and terminate any independent compensation consultants of its choosing.
In connection with the Compensation Committee’s engagement of Mercer, the Compensation Committee considered factors relevant to Mercer’s independence, including six factors specified by NYSE rules, and determined that Mercer’s work does not raise any conflict of interest. The Compensation Committee requested Mercer’s advice on a variety of issues, including compensation strategy, market comparisons, review of our peer group,Peer Group, pay and performance alignment versus industry peers, executive pay trends, stock ownership guidelines, compensation best practices and potential compensation plan designs and modifications.
Mercer provided the Peer Group and general industry compensation data to management and the Compensation Committee, and it was used as a frame of reference for establishing compensation targets for base salary, annual bonus and long-term incentives for all of the NEOs at the beginning of 2017.2019.
In addition to its services for the Compensation Committee, separate and distinct from executive and director compensation consulting services, Mercer provided select services for Dana in various other capacities in 2017.2019. Those services included other global compensation consulting where Mercer data was most relevant in a given country. Mercer’s fees for executive compensation consulting in fiscal year 20172019 were $204,697.$184,200. During the fiscal year, Dana retained Mercer (and its MMC affiliates) to provide services unrelated to executive compensation. The aggregate fees paid for these other services were $106,278.$30,845. These other services were not approved by our Board of Directors or the Compensation Committee because they relate to broad-based compensation and benefit plans. Our management used Pay Governance LLC (Pay Governance) for executive compensation advice.
Compensation Policies & Practices
Dana’s Stock Ownership Guidelines
The Compensation Committee adoptedapplies stock ownership guidelines for our NEOs to encourage executives to own a significant number of shares of our common stock. The stock ownership guidelines are calculated based on a multiple of the executive’s annual base salary and the average stock price during the prior calendar year.
We require the NEOs to achieve the required percentage of the targeted stock ownership levels on a schedule from two to five years of being promoted or named to the applicable executive position. In determining
if our NEOs have satisfied the ownership requirements, we generally include RSUs that have been granted and any shares owned outright by the NEO. Stock options and unearned performance shares are not counted in determining stock ownership for this purpose.
The table below shows the schedule for attaining the targeted amount of stock ownership:
| Percentage of Ownership Guideline to Satisfy | ||||||||||||||||||||||||||||
| Title | Minimum Investment | 2 Years | 4 Years | 5 Years | Minimum Investment | Percentage of Ownership Guideline to Satisfy | ||||||||||||||||||||||
President and Chief Executive Officer | 5 x Base Salary | 40 | % | 80 | % | 100 | % | |||||||||||||||||||||
Title | Minimum Investment | 2 Years | 4 Years | 5 Years | ||||||||||||||||||||||||
40 | % | 80 | % | 100 | % | |||||||||||||||||||||||
Other NEOs | 3 x Base Salary | 40 | % | 80 | % | 100 | % | 3 x Base Salary | 40 | % | 80 | % | 100 | % | ||||||||||||||
All NEOs other than Mr. Aghili, met or exceeded the ownership requirements according to the above schedule as established under our guidelines. During 2017, Mr. Aghili was not allowed to sell any Dana common stock until he met the ownership requirement level. Note that as of January 1, 2018, Mr. Aghili has satisfied the ownership guideline requirement.
Clawback Provisions
To mitigate risk to Dana of paying either annual or long-term incentives based on faulty financial results, we have a policy (Clawback Policy) regarding adjustment of performance-based compensation in the event of a restatement of our financial results. It provides that the Compensation Committee will review all bonuses and other compensation paid or awarded to our executive officers based on the achievement of corporate performance goals during the period covered by a restatement. If the amount of such compensation paid or payable to any executive officer based on the originally reported financial results differs from the amount that would have been paid or
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payable based on the restated financial results, the Compensation Committee will make a recommendation to the independent members of the Board as to whether to seek recovery from the executive officer of any compensation exceeding that to which he or she would have been entitled based on the restated results. In the case of Mr. Kamsickas, his executive employment agreement sets forth clawback provisions in addition to the Clawback Policy described above. These additional clawback provisions are described below under “CEO Employment Agreement.”
Hedging & Pledging of Dana Stock
Under the terms of our “Insider Trading Policy,” no employee, officer or director is permitted to engage in securities transactions that would allow them either to insulate themselves from, or profit from, a decline in Dana’s stock price. Similarly, no employee, officer or director may enter into hedging transactions in Dana’s stock. Such transactions include, but are not limited to, short sales as well as any hedging transactions in derivative securities (e.g.(i.e., puts, calls, options, swaps, forward contracts or collars) or other speculative transactions relating to Dana’s stock. Pledging of Dana’s stock is also prohibited.
Equity-Based Grant Practices
Under our equity-based grant practices, we make regular equity-based grants to eligible employees, including NEOs, in the first quarter of the calendar year at a regularly scheduled meeting of the Compensation Committee. Under our current practice, the exercise price, in the case of any stock options, is the closing price of our common stock on the NYSE on the daydate of the grant. We also may award equity-based grants during the year to newly-hirednewly hired executive officers as part of their compensation package or to executives based on a promotion during the year. In the case of equity-based grants to newly-hirednewly hired employees who may be covered employees within the meaning of Section 162(m) of the Internal Revenue Code, or officers subject to Section 16 of the Exchange Act, including NEOs, the grants are authorized by the Compensation Committee.
Mitigation of Potential Risk in Pay Programs
The Compensation Committee has reviewed our compensation policies and practices and determined that there are no risks arising from our compensation policies and practices for our employees that are reasonably likely to have a material adverse effect on Dana. To avoid excessive risk-taking behaviors, Dana has put in place several mechanisms, including, but not limited to:
| ► | Stock ownership guidelines; |
Stock ownership guidelines;
| ► | Caps on annual incentive payouts; |
| ► | Financial performance-based annual incentive program; |
| ► | Long-term incentive awards (which are delivered primarily in the form of equity); |
| ► | Mix of multiple types of awards and performance assessment periods; |
| ► | Use of multiple metrics to determine annual and long-term incentive payouts; and |
| ► | Clawback and anti-hedging and pledging policies. |
Caps on annual incentive payouts;
Financial performance-based annual incentive program;
Long-term incentive awards (which are delivered primarily in the form of equity);
Mix of multiple types of awards;
Use of multiple metrics to determine annual and long-term incentive payouts; and
Clawback and anti-hedging and pledging policies.
CEO Employment Agreement
Our Compensation Committee determined it is market practice to offer an executive employment agreement to the PresidentChairman and Chief Executive Officer. Terms of the employment agreement for Mr. Kamsickas can be found in the “CEO Employment Agreement” section below. No other NEO has an employment agreement.
Severance Arrangements
We have adopted both an executive severance plan (Executive Severance Plan) and a double-trigger change in control severance plan (Change in Control Severance Plan). Each of our current NEOs participates in these plans. The Change in Control Severance Plan provides severance benefits as a result of a qualifying termination of employment after a change in control. These arrangements provide certainty to both Dana and the former executive as to their rights and obligations to each other, including restrictive covenants and non-compete agreements.
Executive Severance Plan
The Executive Severance Plan provides severance compensation to eligible executives, including each of our NEOs (other than the CEO whose severance compensation is provided in his employment agreement) whose employment is involuntarily terminated other than by reason of death, disability or cause prior to a change in control.
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Change in Control Severance Plan
We have also adopted the Change in Control Severance Plan to provide severance benefits to eligible executives whose employment is involuntaryinvoluntarily terminated as a result of a change in control. Each of our current NEOs is eligible to participate in the plan. We believe that such a plan helps to both attractretain and retainattract executives by reducing the personal uncertainty that arises from the possibility of a future business combination or restructuring. Dana believes that the Change in Control Severance Plan helps to increase shareholder value by encouraging the executives to consider change in control transactions that are in the best interest of Dana and its shareholders, even if the transaction may ultimately result in termination of their employment. The plan contains a “double-trigger”double-trigger provision (i.e., termination of employment after a change in control) in vesting of equity awards and for distributing severance payments in the event of any change in control. No excise tax gross-up is provided under this plan.
Additional information on the terms and conditions of these plans as they relate to our NEOs is described in the section entitled “Potential Payments and Benefits upon Termination or Change in Control” below.
Impact of Accounting and Tax Treatments
Internal Revenue Code Section 162(m)
Subject to certain exceptions, Section 162(m) of the Internal Revenue Code limits Dana’s ability to deduct compensation in excess of $1 million per year paid to certain covered employees. The exemption from Section 162(m)’s deduction limit for performance-based compensation has beenwas repealed effective for taxable years beginning after December 31, 2017 such that compensation paid to our covered executive officers in excess of $1 million will not beis no longer deductible unless it qualifiesabsent qualification for transition relief applicable to certain arrangements entered prior to November 2, 2017 and which are not materially amended thereafter. Despite this change in the tax deductibility of executive compensation, Section 162(m) remains only one of a number of considerations by the Compensation Committee in evaluating Dana’s executive compensation program and its effectiveness in retaining, attracting, motivating and rewarding its senior leaders.
Accounting for Stock-Based Compensation
We account for stock-based payments under our equity-based plans in accordance with the requirements of FASB ASC Topic 718.718, Compensation – Stock Compensation. Further information about this accounting treatment can be found in Notes 1 and 1112 to the Consolidated Financial Statements in Dana’s Annual Report on Form 10-K for the year ended December 31, 2017.2019.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (CD&A) with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the CD&A be included in thisthe 2020 Proxy Statement and incorporated by reference into our Annual Report on Form 10-K.
Compensation Committee
Keith E. Wandell, Chairman
VirginiaRachel A. Kamsky
TerrenceGonzalez, Chair
Michael J. Keating
Raymond E. Mabus,Mack, Jr.
R. Bruce McDonald
Mark A. Schulz
Diarmuid B. O‘Connell
February 15, 201810, 2020
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EXECUTIVE COMPENSATION
The following table summarizes the compensation of our PresidentChairman and CEO, Executive Vice President and CFO, and our three other most highly compensated executive officers serving at the end of the fiscal year ended December 31, 20172019 (collectively, the named executive officers) for services rendered during the years stated in all capacities to Dana and our subsidiaries.
Name and Principal Position(1) | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||||||
James K. Kamsickas Chairman and Chief Executive Officer | 2019 | 1,169,400 | 0 | 5,940,761 | 0 | 1,045,750 | 0 | 489,789 | 8,654,700 | ||||||||||||||||||
2018 | 1,146,950 | 0 | 7,299,357 | 0 | 1,339,898 | 0 | 563,735 | 10,349,940 | |||||||||||||||||||
2017 | 1,122,500 | 0 | 6,797,401 | (3) | 0 | 2,522,160 | 0 | 419,810 | 10,861,871 | ||||||||||||||||||
Jonathan M. Collins Executive Vice President and Chief Financial Officer | 2019 | 647,250 | 0 | 1,580,663 | 0 | 354,333 | 0 | 222,844 | 2,805,091 | ||||||||||||||||||
2018 | 605,000 | 0 | 1,816,376 | 0 | 433,575 | 0 | 230,936 | 3,085,887 | |||||||||||||||||||
2017 | 556,250 | 0 | 1,561,586 | (3) | 0 | 802,125 | 0 | 163,805 | 3,083,766 | ||||||||||||||||||
Aziz S. Aghili Executive Vice President and President, Off-Highway Drive and Motion Systems | 2019 | 561,250 | 0 | 1,302,494 | 0 | 294,930 | 0 | 1,360,201 | 3,518,875 | ||||||||||||||||||
2018 | 545,000 | 0 | 1,093,986 | 0 | 457,875 | 0 | 1,009,521 | 3,106,382 | |||||||||||||||||||
2017 | 526,250 | 0 | 1,051,369 | (3) | 0 | 704,900 | 0 | 1,006,789 | 3,289,308 | ||||||||||||||||||
Mark E. Wallace Executive Vice President and President, Commercial Vehicle Drive and Motion Systems and Aftermarket | 2019 | 609,500 | 0 | 1,437,064 | 0 | 216,294 | 0 | 234,646 | 2,497,505 | ||||||||||||||||||
2018 | 601,250 | 0 | 1,400,933 | 0 | 381,150 | 0 | 238,826 | 2,622,159 | |||||||||||||||||||
2017 | 587,500 | 0 | 1,361,522 | (3) | 0 | 774,375 | 0 | 209,782 | 2,933,179 | ||||||||||||||||||
Robert D. Pyle President, Light Vehicle Drive Systems | 2019 | 544,500 | 0 | 1,113,919 | 0 | 317,226 | 0 | 205,403 | 2,181,048 | ||||||||||||||||||
2018 | 532,500 | 0 | 1,051,393 | 0 | 253,260 | 0 | 188,653 | 2,025,806 | |||||||||||||||||||
2017 | 503,000 | 0 | 983,124 | (3) | 0 | 606,900 | 0 | 179,171 | 2,272,195 | ||||||||||||||||||
Name and Principal Position(1) | Year(2) | Salary ($) | Bonus ($)(3) | Stock Awards ($)(4) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(8) | Change in Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(9) | Total ($) | |||||||||||||||||||||||||||
James K. Kamsickas | 2017 | 1,122,500 | 0 | 6,797,401 | (5) | 0 | 2,522,160 | 0 | 419,810 | 10,861,871 | ||||||||||||||||||||||||||
President and Chief Executive | 2016 | 1,100,000 | 500,000 | 6,230,479 | 0 | 1,222,100 | 0 | 312,760 | 9,365,339 | |||||||||||||||||||||||||||
Officer | 2015 | 430,833 | 500,000 | 3,647,879 | (7) | 0 | 612,000 | 0 | 82,970 | 5,273,682 | ||||||||||||||||||||||||||
Jonathan M. Collins | 2017 | 556,250 | 0 | 1,561,586 | (6) | 0 | 802,125 | 0 | 163,805 | 3,083,766 | ||||||||||||||||||||||||||
Executive Vice President and Chief | 2016 | 381,944 | 0 | 253,307 | 0 | 277,285 | 0 | 83,061 | 995,597 | |||||||||||||||||||||||||||
Financial Officer | ||||||||||||||||||||||||||||||||||||
Aziz S. Aghili | 2017 | 526,250 | 0 | 1,051,369 | 0 | 704,900 | 0 | 954,700 | 3,237,219 | |||||||||||||||||||||||||||
President, Off-Highway Drive and | 2016 | 515,000 | 0 | 1,047,908 | 0 | 252,350 | 0 | 1,570,386 | 3,385,644 | |||||||||||||||||||||||||||
Motion Technologies | 2015 | 508,125 | 0 | 1,044,691 | (7) | 0 | 694,552 | 0 | 1,103,260 | 3,350,628 | ||||||||||||||||||||||||||
Mark E. Wallace | 2017 | 587,500 | 0 | 1,361,522 | 0 | 774,375 | 0 | 209,782 | 2,933,179 | |||||||||||||||||||||||||||
Executive Vice President Dana, | 2016 | 580,000 | 0 | 1,357,697 | 0 | 421,950 | 0 | 191,277 | 2,550,924 | |||||||||||||||||||||||||||
President, Commercial Vehicle | 2015 | 576,250 | 0 | 1,321,625 | (7) | 0 | 781,324 | 0 | 190,166 | 2,869,365 | ||||||||||||||||||||||||||
Driveline Technologies, Op. Ex., | ||||||||||||||||||||||||||||||||||||
Heavy Mfg, and Aftermarket | ||||||||||||||||||||||||||||||||||||
Robert D. Pyle | 2017 | 503,000 | 0 | 983,124 | 0 | 606,900 | 0 | 179,171 | 2,272,195 | |||||||||||||||||||||||||||
President, Light Vehicle Driveline | 2016 | 477,000 | 0 | 939,503 | (7) | 0 | 364,392 | 0 | 186,589 | 1,967,484 | ||||||||||||||||||||||||||
Technologies | ||||||||||||||||||||||||||||||||||||
Footnotes:
| (1) | The latest position held by the named executive officer as of December 31, |
| With respect to the |
| Based upon the financial performance for the three-year period ending December 31, |
Name | Total 2017 LTIP Grant Value | Value of RSUs | Value of PSAs | Value of Actual Payout of PSAs | ||||||||
James K. Kamsickas | $ | 5,091,850 | $ | 2,616,855 | $ | 2,474,995 | $ | 1,938,607 | ||||
Jonathan M. Collins | $ | 1,285,712 | $ | 660,726 | $ | 624,987 | $ | 489,541 | ||||
Aziz S. Aghili | $ | 1,021,512 | $ | 506,516 | $ | 514,996 | $ | 403,382 | ||||
Mark E. Wallace | $ | 1,372,138 | $ | 705,140 | $ | 666,998 | $ | 522,440 | ||||
Robert D. Pyle | $ | 991,538 | $ | 509,545 | $ | 481,993 | $ | 377,518 | ||||
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| Name | Total 2015 LTIP Grant Value | Value of RSUs | Value of PSAs | Value of Actual Payout of PSAs | ||||||||||||
James K. Kamsickas | $ | 3,700,584 | $ | 1,882,533 | $ | 1,818,051 | $ | 2,010,008 | ||||||||
Aziz S. Aghili | $ | 1,050,872 | $ | 535,887 | $ | 514,985 | $ | 474,191 | ||||||||
Mark E. Wallace | $ | 1,325,895 | $ | 676,148 | $ | 649,747 | $ | 598,286 | ||||||||
Robert D. Pyle | $ | 897,813 | $ | 457,821 | $ | 439,991 | $ | 405,155 | ||||||||
Mr. Collins did not receive a 2015 LTIP award since he was hired after the grant date. TABLE OF CONTENTS
The 20152017 LTIP was comprised of 50% RSUs and 50% PSAs. Pre-Tax Return on Invested Capital (ROIC) and Total Shareholder Return (TSR)Adjusted EBITDA Margin (Margin) are the performance metrics relativeapplicable to the 20152017 PSAs. The weighted payout was 72.15%99%, resulting from a 0%142% ROIC result and 144.3% result for TSR.
a 55% Margin result.
| (4) | This column shows the cash incentive awards earned for performance under our |
| (5) | The total values shown for the individuals during |
| a. | James K. |
| e. | Robert D. Pyle—$35,000 for perquisite allowance; $21,000 for contributions to Dana Retirement Savings Plan (401(k)); $38,832 for credits to Dana Restoration Plan; $104,702 representing the change in value of the supplemental executive retirement plan; $1,439 for life benefits (including AD&D and group variable universal life insurance); |
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The following table contains information on grants of awards to named executive officers in the fiscal year ended December 31, 20172019 under the 2017 Dana Incorporated Omnibus Incentive Plan.Plan (the “2017 Plan”).
Grants of Plan-Based Awards at Fiscal Year-End
Name | Type of Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(4) | ||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
James K. Kamsickas | Performance Share Award | 2/12/2019 | 42,078 | 168,311 | 336,622 | 2,881,484 | ||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/12/2019 | 179,451 | 3,059,277 | |||||||||||||||||||||||||||||
Annual Incentive Plan | 367,188 | 1,468,750 | 2,937,500 | |||||||||||||||||||||||||||||
Jonathan M. Collins | Performance Share Award | 2/12/2019 | 11,266 | 44,903 | 89,806 | 768,739 | ||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/12/2019 | 47,617 | 811,924 | |||||||||||||||||||||||||||||
Annual Incentive Plan | 123,375 | 493,500 | 987,000 | |||||||||||||||||||||||||||||
Aziz S. Aghili | Performance Share Award | 2/12/2019 | 9,236 | 36,945 | 73,890 | 632,498 | ||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/12/2019 | 39,294 | 669,995 | |||||||||||||||||||||||||||||
Annual Incentive Plan | 105,938 | 423,750 | 847,500 | |||||||||||||||||||||||||||||
Mark E. Wallace | Performance Share Award | 2/12/2019 | 10,160 | 40,639 | 81,278 | 695,740 | ||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/12/2019 | 43,494 | 741,325 | |||||||||||||||||||||||||||||
Annual Incentive Plan | 114,563 | 458,250 | 916,500 | |||||||||||||||||||||||||||||
Robert D. Pyle | Performance Share Award | 2/12/2019 | 7,886 | 31,542 | 63,084 | 539,999 | ||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/12/2019 | 33,667 | 573,920 | |||||||||||||||||||||||||||||
Annual Incentive Plan | 95,550 | 382,200 | 764,400 | |||||||||||||||||||||||||||||
Name | Type of Award | Grant Date |
Estimated Future Payouts Under |
Estimated Future Payouts Under Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(4) | ||||||||||||||||||||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||||||||||||||||||||||||||
James K. Kamsickas | Performance Share Award | 2/15/2017 | 31,666 | 126,663 | 253,326 | 2,474,995 | ||||||||||||||||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/15/2017 | 205,369 | 4,322,406 | |||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan | 339,000 | 1,356,000 | 2,712,000 | 624,987 | ||||||||||||||||||||||||||||||||||||||||||
Jonathan M. Collins | Performance Share Award | 2/15/2017 | 7,996 | 31,985 | 63,970 | |||||||||||||||||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/15/2017 | 48,574 | 936,599 | |||||||||||||||||||||||||||||||||||||||||||
| Annual Incentive Award | 107,813 | 431,250 | 862,500 | |||||||||||||||||||||||||||||||||||||||||||
Aziz S. Aghili | Performance Share Award | 2/15/2017 | 6,589 | 26,356 | 52,712 | 514,996 | ||||||||||||||||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/15/2017 | 27,279 | 536,373 | |||||||||||||||||||||||||||||||||||||||||||
| Annual Incentive Plan | 92,750 | 371,000 | 742,000 | |||||||||||||||||||||||||||||||||||||||||||
Mark E. Wallace | Performance Share Award | 2/15/2017 | 8,534 | 34,135 | 68,270 | 666,998 | ||||||||||||||||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/15/2017 | 35,324 | 694,524 | |||||||||||||||||||||||||||||||||||||||||||
| Annual Incentive Plan | 110,625 | 442,500 | 885,000 | |||||||||||||||||||||||||||||||||||||||||||
Robert D. Pyle | Performance Share Award | 2/15/2017 | 6,167 | 24,667 | 49,334 | 481,993 | ||||||||||||||||||||||||||||||||||||||||
Restricted Stock Unit Award | 2/15/2017 | 25,494 | 501,131 | |||||||||||||||||||||||||||||||||||||||||||
| Annual Incentive Plan | 89,250 | 357,000 | 714,000 | |||||||||||||||||||||||||||||||||||||||||||
Footnotes:
| (1) | These columns reflect the potential payments for each of the named executive officers under our |
| (2) | These columns reflect the potential issuance of shares for each of the NEOs under the PSA component of the |
| (3) | This amount represents the number of RSUs granted as a component of the |
| (4) | This column represents the fair value (at grant date) of PSAs, RSUs and dividend equivalents granted to each of the NEOs in |
24
The following table provides information on stock option,options, PSAs and RSUs awarded pursuant to the 2017 Plan and the 2012 Dana Holding Corp. Omnibus Incentive Plan for each named executive officer that were outstanding as of December 31, 2017.2019.
Each outstanding award is shown separately. The market value of the stock awards is based on the closing market price of Dana common stock on December 29, 201731, 2019 of $32.01$18.20 per share.
Outstanding Equity Awards at Fiscal Year-End
Option Awards | Stock Awards | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Exercise Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(7) ($) | ||||||||||||||||
James K. Kamsickas | 172,585 | (1) | 3,141,047 | 336,622 | (4) | 6,126,520 | ||||||||||||||||||
98,851 | (2) | 1,799,088 | 188,928 | (5) | 3,438,490 | |||||||||||||||||||
133,923 | (3) | 2,437,399 | 125,396 | (6) | 2,282,207 | |||||||||||||||||||
Jonathan M. Collins | 46,042 | (1) | 837,964 | 89,806 | (4) | 1,634,469 | ||||||||||||||||||
26,471 | (2) | 481,772 | 50,598 | (5) | 920,884 | |||||||||||||||||||
33,814 | (3) | 615,415 | 31,665 | (6) | 576,303 | |||||||||||||||||||
Aziz S. Aghili | 37,882 | (1) | 689,452 | 73,890 | (4) | 1,344,798 | ||||||||||||||||||
19,518 | (2) | 355,228 | 37,310 | (5) | 679,042 | |||||||||||||||||||
25,922 | (3) | 471,780 | 26,092 | (6) | 474,874 | |||||||||||||||||||
Mark E. Wallace | 41,670 | (1) | 758,394 | 81,278 | (4) | 1,479,260 | ||||||||||||||||||
24,988 | (2) | 454,782 | 47,764 | (5) | 869,305 | |||||||||||||||||||
36,087 | (3) | 656,783 | 33,793 | (6) | 615,033 | |||||||||||||||||||
Robert D. Pyle | 32,342 | (1) | 588,624 | 63,084 | (4) | 1,148,129 | ||||||||||||||||||
18,782 | (2) | 341,832 | 35,902 | (5) | 653,416 | |||||||||||||||||||
26,077 | (3) | 474,601 | 24,420 | (6) | 444,444 | |||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Exercise Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(10) ($) | ||||||||||||||||||||||||
James K. Kamsickas | 127,980 | (1) | 4,096,640 | 253,326 | (6) | 8,108,965 | ||||||||||||||||||||||||||
| 179,312 | (2) | 5,739,777 | 350,448 | (7) | 11,217,840 | |||||||||||||||||||||||||||
| 101,539 | (3) | 3,250,263 | 70,750 | (8) | 2,264,708 | |||||||||||||||||||||||||||
Jonathan M. Collins | 48,513 | (1)(4) | 1,552,901 | 63,970 | (6) | 2,047,680 | ||||||||||||||||||||||||||
Aziz S. Aghili | 26,628 | (1) | 852,362 | 52,712 | (6) | 1,687,311 | ||||||||||||||||||||||||||
| 39,502 | (2) | 1,264,459 | 77,210 | (7) | 2,471,492 | |||||||||||||||||||||||||||
| 24,074 | (5) | 770,609 | 16,691 | (9) | 534,279 | |||||||||||||||||||||||||||
Mark E. Wallace | 34,488 | (1) | 1,103,961 | 68,270 | (6) | 2,185,323 | ||||||||||||||||||||||||||
| 51,164 | (2) | 1,637,760 | 100,000 | (7) | 3,201,000 | |||||||||||||||||||||||||||
| 30,375 | (5) | 972,304 | 21,059 | (9) | 674,099 | |||||||||||||||||||||||||||
Robert D. Pyle | 24,922 | (1) | 797,752 | 49,334 | (6) | 1,579,181 | ||||||||||||||||||||||||||
| 35,436 | (2) | 1,134,306 | 69,264 | (7) | 2,217,141 | |||||||||||||||||||||||||||
| 20,567 | (5) | 658,350 | 14,261 | (9) | 456,495 | |||||||||||||||||||||||||||
Footnotes:
| (1) | RSUs granted on February 12, 2019 cliff vest on February 12, 2022. |
| (2) | RSUs granted on February 15, 2018 cliff vest on February 15, 2021. |
| (3) | RSUs granted on February 15, 2017 cliff vest on February 15, 2020. |
| (4) |
| PSAs granted on February |
| (5) | PSAs granted on |
| This reflects the shares earned from the PSA component of the LTIP award issued on February |
| (7) | For the PSAs granted in |
25
The following table provides information concerning the exercise of stock options, stock appreciation rights and the vesting of PSAs and RSUs during the fiscal year ended December 31, 2017,2019, for each of the named executive officers.
Options Exercised and Stock Vested During Fiscal Year
Option Awards | Stock Awards | |||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||
James K. Kamsickas | 297,922 | $ | 5,005,893 | |||||||||
Jonathan M. Collins | 14,319 | $ | 251,871 | |||||||||
Aziz S. Aghili | 67,586 | $ | 1,136,644 | |||||||||
Mark E. Wallace | 85,027 | $ | 1,428,348 | |||||||||
Robert D. Pyle | 58,889 | $ | 989,263 | |||||||||
| Option Awards | Stock Awards | |||||||||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||||||
James K. Kamsickas | 74,999 | $ | 1,749,982 | |||||||||||||
Jonathan M. Collins | 18,732 | $ | 349,352 | |||||||||||||
Aziz S. Aghili(2) | 68,924 | $ | 928,351 | 22,600 | $ | 429,626 | ||||||||||
Mark E. Wallace | 53,984 | $ | 182,685 | 31,926 | $ | 606,913 | ||||||||||
Robert D. Pyle(2) | 41,029 | $ | 617,115 | 18,916 | $ | 359,593 | ||||||||||
Footnotes:
| (1) | These values represent the vesting of RSUs and were determined by using the closing prices of our common stock on the New York Stock Exchange on such vesting dates. |
The following table provides information on the nonqualified deferred compensation of the named executive officers with respect to the fiscal year ended December 31, 2017.2019.
Nonqualified Deferred Compensation at Fiscal Year-End
Name | Dana Credits in 2019 ($) | Aggregate Earnings in 2019 ($) | Aggregate Withdrawals / Distributions in 2019 ($) | Aggregate Balance on 12/31/19 ($) | |||||||||||
James K. Kamsickas | $ | 315,245 | (1) | $ | 232,881 | (2) | $ | 0 | $ | 2,545,530 | (3) | ||||
Jonathan M. Collins | 123,831 | (1) | 59,661 | 0 | 498,390 | ||||||||||
Aziz S. Aghili | 115,562 | (1) | 201,565 | (2) | 0 | 1,388,341 | (3) | ||||||||
Mark E. Wallace | 111,748 | (1) | 497,407 | (2) | 0 | 3,683,102 | (3) | ||||||||
Robert D. Pyle | 85,900 | (1) | 171,932 | 0 | 1,159,745 | ||||||||||
| Name | Dana Credits in 2017 ($) | Aggregate Earnings in 2017 ($) | Aggregate Withdrawals / Distributions in 2017 ($) | Aggregate Balance on 12/31/17 ($) | ||||||||||||
James K. Kamsickas | $ | 331,440 | (1) | $ | 29,243 | (2) | 0 | $ | 880,104 | (3) | ||||||
Jonathan M. Collins | $ | 104,780 | (1) | $ | 2,677 | 0 | $ | 143,303 | ||||||||
Aziz S. Aghili | $ | 96,681 | (1) | $ | 58,409 | 0 | $ | 726,920 | ||||||||
Mark E. Wallace. | $ | 131,168 | (1) | $ | 218,453 | (2) | 0 | $ | 1,919,088 | (3) | ||||||
Robert D. Pyle | $ | 109,859 | (1) | $ | 83,032 | 0 | $ | 796,337 | ||||||||
Footnotes:
| (1) | Includes credit for employer fixed and matching contributions that exceed the IRS limits for our qualified 401(k) plan and credit for the supplemental executive retirement plan described below. This credit is also reflected in Footnote |
| Restoration Plan Company Credits |
| Supplemental Executive Retirement Plan Credits | ||||||||||||
James K. Kamsickas | $ | 155,595 | James K. Kamsickas | $ | 175,845 | |||||||||
Jonathan M. Collins | $ | 42,265 | Jonathan M. Collins | $ | 62,515 | |||||||||
Aziz S. Aghili | $ | 38,145 | Aziz S. Aghili | $ | 58,536 | |||||||||
Mark E. Wallace | $ | 55,459 | Mark E. Wallace | $ | 75,709 | |||||||||
Robert D. Pyle | $ | 44,804 | Robert D. Pyle | $ | 65,055 | |||||||||
Restoration Plan Company Credits ($ value) | Supplemental Executive Retirement Plan Company Credits ($ value) | ||||||
James K. Kamsickas | 167,197 | James K. Kamsickas | 148,048 | ||||
Jonathan M. Collins | 60,062 | Jonathan M. Collins | 63,769 | ||||
Aziz S. Aghili | 55,434 | Aziz S. Aghili | 60,128 | ||||
Mark E. Wallace | 53,299 | Mark E. Wallace | 58,449 | ||||
Robert D. Pyle | 38,832 | Robert D. Pyle | 47,068 | ||||
| (2) | Includes earnings on employee deferrals in the deferred compensation plan. |
| (3) | Includes deferred compensation plan balance. |
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Dana maintains a non-qualified supplemental executive retirement plan for certain executives, including the named executive officers. Under the terms of the supplemental executive retirement plan, Dana established unfunded notional defined contribution accounts subject to the claims of Dana’s general creditors. Each participant account will beis credited on an annual basis as follows: (a) fixed employer credits—credits – equal to 3.5% of compensation; and (b) discretionary employer credits—credits – based on Dana’s sole discretion and company performance not to exceed 4% of compensation. Dana creditsThe earnings rate for each participant is based on the accumulated balance of each account with an annualized compounded raterates of return (positive or negative) earned by the measurement funds selected by the participant as offered for the purposes of 5%.the plan. Participants are fully vested after five (5) years of service or upon death, disability or Change in Control.
Dana also maintains a non-qualified deferred compensation plan that allows certain executives to defer base pay and/or incentive pay into unfunded notional accounts subject to the claims of Dana’s general creditors.
Mr. Kamsickas became President and Chief Executive Officer and a member of the Board of Directors of Dana effective August 11, 2015. Under the terms of thehis employment agreement, in connection with his appointment as President and Chief Executive Officer, Mr. Kamsickas is entitled to the following:
| ► | Annual base salary; |
Annual base salary;
| ► | Upon the achievement of target-level performance, an annual bonus; |
| ► | Annual grants pursuant to the long-term incentive program under Dana’s 2017 Omnibus Incentive Plan; and |
| ► | All of Dana’s benefit plans or arrangements in effect from time to time with respect generally to senior executives. |
Upon the achievement of target-level performance, an annual bonus;
Annual grants pursuant to the long-term incentive program under Dana’s 2017 Omnibus Incentive Plan;
A special grant of common stock valued at $5,000,000 granted thirty percent (30%) on the first anniversary of his effective date of hire, thirty-five percent (35%) to be granted on the second anniversary of his effective date of hire, and thirty-five percent (35%) to be granted on the third anniversary of his effective date of hire; and
All of Dana’s benefit plans or arrangements in effect from time to time with respect generally to senior executives.
Mr. Kamsickas’ employment agreement is for an initial term of three (3) years, subject to extension at the end of the term for additional one-year terms. Pursuant to his employment agreement and in lieu of his participation in the Executive Severance Plan, if Dana involuntarily terminates Mr. Kamsickas’ employment without cause (as defined below) (andand not due to disability)disability, or he voluntarily terminates his employment for good reason (as defined below), subject to his execution and non-revocation of a release of claims, he would be entitled to (i) severance in an amount equal to twenty-four (24) months of base salary, payable in regular payroll installments over the twenty-four (24) month period commencing on the date of termination, (ii) a bonus for the year of termination based on actual performance under the annual incentive program and a bonus for the calendar year after termination at the target amount, both payable when annual bonuses are paid to other senior executives, (iii) medical, dental, prescription drug, basic life insurance and employee assistance program benefits for twenty-four (24) months following the date of his termination subject to his payment of any required employee contributions consistent with those contributions required of active employees of Dana (and which benefits shall be coterminous with his entitlement to COBRA health benefits continuation), and (iv) outplacement benefits (having a cost not exceeding $50,000).
Pursuant to Mr. Kamsickas’ employment agreement, “cause” generally means (i) a willful and material misappropriation of any monies or assets or properties of Dana;Dana; (ii) a willful and material breach by him of the terms of his employment agreement that is demonstrably injurious to Dana and that, if capable of cure, has not been cured within thirty (30) days after written notice to him; or (iii) the conviction of, or plea of guilty or nolo contendere by him to, a felony or to any criminal offense involving his moral turpitude.
Pursuant to Mr. Kamsickas’ employment agreement, “good reason” generally means the occurrence of any of the following without his consent: (i) any material adverse change by Dana in his title, position, authority or reporting relationships with Dana;Dana; (ii) Dana’s requirement that he relocate to a location in excess of fifty (50) miles from Dana’s current office location or from any future office location acceptable to him;him; or (iii) any material breach by Dana of the employment agreement which is not cured within thirty (30) days after written notice by Mr. Kamsickas to Dana, which notice shall specify the breach and the nature of conduct necessary to cure such breach.
For a period of twenty-four (24) months following his termination of employment, Mr. Kamsickas is prohibited from competing against Dana, soliciting its customers or employees, and working for a competitor. Mr. Kamsickas has also agreed that he will not disclose Dana’s confidential information.
27
POTENTIAL PAYMENTS AND BENEFITS
UPON TERMINATION OR CHANGE IN CONTROL
As discussed in the “Compensation Discussion and Analysis” section above, Dana maintains both an Executive Severance Plan and Change in Control Severance Plan that apply to certain senior executives, including our named executive officers.
Set forth below is a description of each plan (applicable to eligible executive officers, including named executive officers). This is followed by tables relating to Messrs. Kamsickas, Collins, Aghili, Wallace and Pyle.
Executive Severance Plan
In the event any eligible executive officer, except our CEO (as he is entitled to payments under his employment agreement), is involuntarily terminated by Dana without cause (as defined below) and other than due to death or disability and such termination occurs prior to a Change in Control, Dana will pay the executive an amount equal to twelve (12) months of base salary, plus the cost of COBRA premiums for twelve (12) months.
months, and an annual incentive plan (AIP) payment equal to a full year, subject to actual performance results. Additionally, the executive will receive payment or receive reimbursement for reasonable costs of outplacement services, subject to a maximum amount of $25,000.
For purposes of the ExecutiveChange in Control Severance Plan and the
The Change in Control Severance Plan described below, “cause” generally means an executive’s (i) continued failure(CIC Plan) is designed to perform substantially the duties owedprovide severance benefits to Dana after a written demand for substantial performance is delivered specifically identifying the nature of such unacceptable performance; (ii) conviction of, or plea of guilty or nolo contendere to the charge of having committed, a felony or any other criminal charge involving fraud, moral turpitude, embezzlement or theft; (iii) material violation of Dana’s standards of business conduct or other Company policies applicable to Company employees that warrants termination; (iv) abuse of alcohol or either prescription or illegal drugs substantially affecting work performance; (v) conduct that constitutes gross misconduct in the performance of his employment duties, including, but not limited to, any act of dishonesty or knowing or willful breach of fiduciary duty that is intended to result in personal enrichment or gain at the expense of Dana; or (vi) deliberate, willful or intentional act that causes substantial harm, loss or injury to Dana.
Change in Control Severance Plan
Under our Change in Control Severance Plan in effect during 2017, all eligible executive officers whose employment is terminated as a result of a change in control of Dana. Each of Dana’s current named executive officers is eligible to participate in the CIC Plan. Under the CIC Plan, any participant who incurredincurs a qualifying termination (as defined below) werewill be entitled to receive two (2) yearstimes the sum of the individual’s salary and twicetarget bonus (three times the sum of his or her target bonus (three (3) years of salary and three (3) times his or her target bonus, in the case of the CEO)CEO and CFO) for the year in which termination occurred. In addition,occurs. As of the termination date, each named executive officer waswill be entitled to: (1)(i) the full amount of any earned but unpaid base salary through the date of termination plus a cash payment for all unused vacation time accrued as of the termination date; (2)accrued; (ii) a pro rata portion of his or her annual target bonus for the year in which termination occurred, based on actual performance as of the date of termination; (3)occurs; (iii) all equity awards vesting in full (target(with the target number of performance shares)shares, if applicable) and becoming fully exercisable as of the termination date; (4)exercisable; (iv) a lump sum cash amount to allow, but not require, the employee to purchase additional coverage equal to a total of two (2) years (three (3) years for ourthe CEO) of subsidized COBRA; and (5)(v) reasonable costs of outplacement services not to exceed $25,000 ($50,000 for ourthe CEO).
The plan didCIC Plan does not provide for any excise tax gross-up payments to executive officers in connection with a change in control.control and instead includes provisions requiring a cutback of the benefits payable under the plan if it would result in the executive receiving a greater payment on an after-tax basis (after accounting for any excise taxes that would otherwise be triggered). Payments under the CIC Plan are payable in a lump-sum subject to execution of a release of claims against Dana.
For purposes of the Change in Control SeveranceCIC Plan, “qualifying termination” generally meantmeans (i) an executive’s involuntary termination of employment with Dana during the 24-month period following a change in control (36-month period for the CEO) other than a termination by reason of death, disability or for cause or (ii) an executive’s resignation of employment with Dana during such period for good reason (as defined below).reason.
For purposes of the Change in Control Severance Plan, “good reason” generally meant an executive’s resignation of employment without the express written consent of the executive as a result of any one of the following: (a) a meaningful and detrimental alteration in such executive’s position, titles, or the nature or status of responsibilities from those in effect immediately prior to the change in control date; (b) a reduction by Dana in such executive’s base salary as in effect immediately prior to the change in control date or as the same may be increased from time to time thereafter; a failure by Dana to increase such executive’s salary at a rate commensurate with that of other similarly situated key executives of Dana; or a reduction in the target incentive opportunity percentage used to determine such executive’s target bonus below the percentage in effect immediately prior to the change in control date; (c) the failure by Dana to continue to provide such executive with benefits at least as favorable in the aggregate to those enjoyed by such executive under Dana’s retirement, savings, life insurance, medical, health and accident, disability, and fringe benefit plans and programs in which such executive participated in immediately prior to the change in control date; or the failure by Dana to provide such executive with the number of paid vacation days to which he or she was entitled on the basis of years of service with Dana in accordance with Dana’s normal vacation policy in effect immediately prior to the change in control; (d) the failure by Dana to pay to or provide such executive with any material item of compensation or benefits promptly when due; (e) the failure of Dana to obtain an express written agreement from any successor to assume and agree to perform the obligations of the Change in Control Severance Plan or, if the business for which such executive’s services were principally performed is sold at any time after a change in control, the
failure of Dana to obtain such an agreement from the purchaser of such business; (f) if the employee has a separate severance agreement, then the occurrence of any event that constitutes good reason under such agreement; and (g) any other action or inaction that constitutes a material breach by Dana of the Change in Control Severance Plan or of an employment agreement between Dana and the executive. If the executive reasonably demonstrated that an event described in clauses (a) through (g) above was at the request of a third party who had indicated an intention or taken steps reasonably calculated to effect a change in control and who effectuates a change in control within six (6) months following such event, such event was deemed to constitute good reason occurring on the date of the change in control.
Equity Award Provisions
Pursuant to the award agreements for the RSUs, vesting accelerates if the recipient’s employment is terminated without cause or by reason of death, disability or normal retirement, on aall outstanding RSU awards are prorated basis based on the number of full months of employment inon the termination date within each vesting period. In the event of a change in control and the recipient is still employed with Dana, RSUs become nonforfeitable and payable to the recipient. Pursuant to the award agreements for the performance shares, vesting accelerates if the recipient’s employment is terminated without cause or by reason of death, disability or normal retirement, on athe outstanding performance awards shall remain eligible to vest, prorated basis based on the number of full months of employment infrom the vesting periodgrant date through the termination date, and based on actual performance during the performance period. If, during the performance period, a change in control occurs and the recipient is still employed with Dana, then the recipient shall automatically vest in a prorated portion of the performance shares (based on the number of full months the recipient is employed by Dana from the grant date and ending on the date of the change in control), assuming target performance for such purpose, subject to eligibility for full vesting in accordance with the CIC Plan described above.
28
The following tables set forth the potential payments that would have been due to our named executive officers upon termination or a change of control as of December 31, 2017.2019.
James K. Kamsickas
The following table describes the potential termination and change in control payments to Mr. Kamsickas, Dana’s PresidentChairman and Chief Executive Officer, under a variety of circumstances.
Pay Element | Change in Control and Termination Without Cause or Voluntary Termination with Good Reason | Death / Disability | Termination Without Cause or Voluntary Termination with Good Reason (No Change in Control) | ||||||
Cash Compensation | |||||||||
Separation Payment | $ | 7,931,251 | (1) | $ | 2,350,000 | (2) | |||
Annual Incentive Award | $ | 1,468,750 | (3) | $ | 1,045,750 | $ | 2,514,500 | (4) | |
Long-Term Incentive | |||||||||
Performance Shares | $ | 4,782,505 | (5) | $ | 4,449,445 | (6) | $ | 4,449,445 | (6) |
Restricted Stock Units | $ | 7,377,534 | (7) | $ | 4,273,906 | (8) | $ | 4,273,906 | (8) |
Benefits and Perquisites | |||||||||
Health insurance, etc. | $ | 49,572 | (9) | $ | 33,048 | (10) | |||
Restoration Plan(11) | $ | 783,662 | $ | 783,662 | $ | 783,662 | |||
SERP(12) | $ | 822,691 | $ | 822,691 | $ | 822,691 | |||
Accrued Vacation(13) | $ | 97,917 | $ | 97,917 | $ | 97,917 | |||
Other | |||||||||
Outplacement | $ | 50,000 | $ | 50,000 | |||||
Total | $ | 23,363,882 | $ | 11,473,371 | $ | 15,375,169 | |||
Pay Element | Change in Control and Termination Without Cause or Voluntary Termination with Good Reason | Death / Disability | Termination Without Cause or Voluntary Termination with Good Reason (No Change in Control) | |||||||||
Cash Compensation | ||||||||||||
Separation Payment | $ | 7,458,000 | (1) | $ | 2,260,000 | (2) | ||||||
Annual Incentive Award(3) | $ | 2,522,160 | $ | 2,522,160 | $ | 1,356,000 | ||||||
Long-Term Incentive | ||||||||||||
Performance Shares | $ | 9,663,403 | (4) | $ | 8,229,707 | (5) | $ | 8,229,707 | (5) | |||
Restricted Stock Units | $ | 13,086,680 | (6) | $ | 7,014,095 | (7) | $ | 7,014,095 | (7) | |||
Benefits and Perquisites | ||||||||||||
Health insurance, etc | $ | 44,572 | (8) | $ | 29,714 | (9) | ||||||
Restoration Plan(10) | $ | 293,410 | $ | 293,410 | $ | 293,410 | ||||||
SERP(11) | $ | 333,919 | $ | 333,919 | $ | 333,919 | ||||||
Accrued Vacation(12) | $ | 94,167 | $ | 94,167 | $ | 94,167 | ||||||
Other | ||||||||||||
Outplacement | $ | 50,000 | $ | 50,000 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 33,546,311 | $ | 18,487,458 | $ | 19,661,012 | ||||||
Footnotes:
| (1) | Mr. Kamsickas would have been eligible for a separation payment equal to the sum of his annual base salary and the target bonus multiplied by three (3) pursuant to the terms of our Change in Control Plan. Under 280G and the best net approach, it was determined appropriate to cutback Mr. Kamsickas’s payment amount to the 280G limits. |
| (2) | Mr. Kamsickas is entitled to receive an amount equal to 24 months of his annual base salary pursuant to the terms of his executive employment agreement. |
| (3) |
| (4) | Upon a termination without cause or for good reason in the absence of a change in control, Mr. Kamsickas |
| (5) | Performance shares vest in full assuming target performance. |
| (6) | Performance shares vest on apro ratabasis assuming target |
| (7) | Restricted stock units vest in full. |
| (8) | Restricted stock units vest on apro ratabasis. |
| (9) | Mr. Kamsickas would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on his date of termination for a period of three (3) years. |
| (10) | Mr. Kamsickas would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on his date of termination for a period of two (2) years. |
| (11) | Mr. Kamsickas is eligible to receive his Restoration Plan benefit effective December 31, |
| (12) | Mr. Kamsickas is eligible to receive his supplemental executive retirement plan benefit effective December 31, |
| (13) | For purposes of this table, we assumed Mr. Kamsickas did not take any vacation in |
29
Jonathan M. Collins
The following table describes the potential termination and change in control payments to Mr. Collins, Dana’s Executive Vice President and Chief Financial Officer, under a variety of circumstances.
Pay Element | Change in Control and Termination Without Cause or Voluntary Termination with Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | ||||||
Cash Compensation | |||||||||
Separation Payment | $ | 3,454,502 | (1) | $ | 658,000 | (2) | |||
Annual Incentive Award | $ | 493,500 | (3) | $ | 354,333 | $ | 354,333 | (4) | |
Long-Term Incentive | |||||||||
Performance Shares | $ | 1,277,676 | (5) | $ | 1,155,664 | (6) | $ | 1,155,664 | (6) |
Restricted Stock Units | $ | 1,935,151 | (7) | $ | 1,108,380 | (8) | $ | 1,108,380 | (8) |
Benefits and Perquisites | |||||||||
Health insurance, etc. | $ | 33,051 | (9) | $ | 16,526 | (10) | |||
Restoration Plan(11) | $ | 215,508 | $ | 215,508 | $ | 215,508 | |||
SERP(12) | $ | 282,882 | $ | 282,882 | $ | 282,882 | |||
Accrued Vacation(13) | $ | 54,833 | $ | 54,833 | $ | 54,833 | |||
Other | |||||||||
Outplacement | $ | 25,000 | $ | 25,000 | |||||
Total | $ | 7,772,104 | $ | 3,171,599 | $ | 3,871,125 | |||
Pay Element | Change in Control and Termination Without Cause or for Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | |||||||||
Cash Compensation | ||||||||||||
Separation Payment | $ | 2,012,500 | (1) | $ | 575,000 | (2) | ||||||
Annual Incentive Award(3) | $ | 802,125 | $ | 802,125 | ||||||||
Long-Term Incentive | ||||||||||||
Performance Shares | $ | 1,023,840 | (4) | $ | 341,259 | (5) | $ | 341,259 | (5) | |||
Restricted Stock Units | $ | 1,552,901 | (6) | $ | 676,147 | (7) | $ | 676,147 | (7) | |||
Benefits and Perquisites | ||||||||||||
Health insurance, etc | $ | 29,820 | (8) | $ | 14,910 | (9) | ||||||
Restoration Plan(10) | $ | 52,359 | $ | 52,359 | $ | 52,359 | ||||||
SERP(11) | $ | 90,944 | $ | 90,944 | $ | 90,944 | ||||||
Accrued Vacation(12) | $ | 47,917 | $ | 47,917 | $ | 47,917 | ||||||
Other | ||||||||||||
Outplacement | $ | 25,000 | $ | 25,000 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 5,637,406 | $ | 2,010,751 | $ | 1,823,536 | ||||||
Footnotes:
| (1) | Mr. Collins would have been eligible for a separation payment equal to the sum of his annual base salary and the target bonus multiplied by |
| (2) | Mr. Collins is entitled to receive an amount equal to 12 months of his annual base salary pursuant to the terms of our Executive Severance Plan. |
| (3) |
| (4) | Upon a termination without cause in the absence of a change in control Mr. Collins is entitled to receive an amount equal to his bonus based on actual |
| (5) | Performance shares vest in full assuming target performance. |
| (6) | Performance shares vest on apro ratabasis assuming target |
| (7) | Restricted stock units vest in full. |
| (8) | Restricted stock units vest on apro ratabasis. |
| (9) | Mr. Collins would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on his date of termination for a period of two (2) years. |
| (10) | Mr. Collins would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on his date of termination for a period of one (1) year. |
| (11) | Mr. Collins is eligible to receive his Restoration Plan benefit effective December 31, |
| (12) | Mr. Collins is eligible to receive his supplemental executive retirement plan benefit effective December 31, |
| (13) | For purposes of this table, we assumed Mr. Collins did not take any vacation in |
30
Aziz S. Aghili
The following table describes the potential termination and change in control payments to Mr. Aghili, Executive Vice President and President of Dana’s President, Off-Highway Drive and Motion Technologies,Systems, under a variety of circumstances.
Pay Element | Change in Control and Termination Without Cause or Voluntary Termination with Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | ||||||
Cash Compensation | |||||||||
Separation Payment | $ | 1,977,500 | (1) | $ | 565,000 | (2) | |||
Annual Incentive Award | $ | 423,750 | (3) | $ | 294,930 | $ | 294,930 | (4) | |
Long-Term Incentive | |||||||||
Performance Shares | $ | 1,011,920 | (5) | $ | 925,343 | (6) | $ | 925,343 | (6) |
Restricted Stock Units | $ | 1,516,460 | (7) | $ | 854,126 | (8) | $ | 854,126 | (8) |
Benefits and Perquisites | |||||||||
Health insurance, etc. | $ | 25,317 | (9) | $ | 12,658 | (10) | |||
Restoration Plan(11) | $ | 513,276 | $ | 513,276 | $ | 513,276 | |||
SERP(12) | $ | 616,857 | $ | 616,857 | $ | 616,857 | |||
Accrued Vacation(13) | $ | 47,083 | $ | 47,083 | $ | 47,083 | |||
Other | |||||||||
Outplacement | $ | 25,000 | $ | 25,000 | |||||
Total | $ | 6,157,163 | $ | 3,251,615 | $ | 3,854,273 | |||
Pay Element | Change in Control and Termination Without Cause or for Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | |||||||||
Cash Compensation | ||||||||||||
Separation Payment | $ | 1,802,000 | (1) | $ | 530,000 | (2) | ||||||
Annual Incentive Award(3) | $ | 704,900 | $ | 704,900 | ||||||||
Long-Term Incentive | ||||||||||||
Performance Shares | $ | 2,079,402 | (4) | $ | 1,845,569 | (5) | $ | 1,845,569 | (5) | |||
Restricted Stock Units | $ | 2,887,430 | (6) | $ | 1,702,100 | (7) | $ | 1,702,100 | (7) | |||
Benefits and Perquisites | ||||||||||||
Health insurance, etc | $ | 23,435 | (8) | $ | 11,718 | (9) | ||||||
Restoration Plan(10) | $ | 330,061 | $ | 330,061 | $ | 330,061 | ||||||
SERP(11) | $ | 396,859 | $ | 396,859 | $ | 396,859 | ||||||
Accrued Vacation(12) | $ | 44,167 | $ | 44,167 | $ | 44,167 | ||||||
Other | ||||||||||||
Outplacement | $ | 25,000 | $ | 25,000 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 8,293,254 | $ | 5,023,656 | $ | 4,885,474 | ||||||
Footnotes:
| (1) | Mr. Aghili would have been eligible for a separation payment equal to the sum of his annual base salary and the target bonus multiplied by two (2) pursuant to the terms of our Change in Control Plan. |
| (2) | Mr. Aghili is entitled to receive an amount equal to 12 months of his annual base salary pursuant to the terms of our Executive Severance Plan. |
| (3) |
| (4) | Upon a termination without cause in the absence of a change in control Mr. Aghili is entitled to receive an amount equal to his bonus based on actual |
| (5) | Performance shares vest in full assuming target performance. |
| (6) | Performance shares vest on apro ratabasis assuming target |
| (7) | Restricted stock units vest in full. |
| (8) | Restricted stock units vest on apro ratabasis. |
| (9) | Mr. Aghili would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on the date of termination for a period of two (2) years. |
| (10) | Mr. Aghili would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on the date of termination for a period of one (1) year. |
| (11) | Mr. Aghili is eligible to receive his Restoration Plan benefit effective December 31, |
| (12) | Mr. Aghili is eligible to receive his supplemental executive retirement plan benefit effective December 31, |
| (13) | For purposes of this table, we assumed Mr. Aghili did not take any vacation in |
31
Mark E. Wallace
The following table describes the potential termination and change in control payments to Mr. Wallace, Executive Vice President Dana and President of Dana’s Commercial Vehicle Driveline Technologies, Operational Excellence, Heavy ManufacturingDrive and Motion Systems and Aftermarket, under a variety of circumstances.
Pay Element | Change in Control and Termination Without Cause or Voluntary Termination with Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | ||||||
Cash Compensation | |||||||||
Separation Payment | $ | 2,138,500 | (1) | $ | 611,000 | (2) | |||
Annual Incentive Award. | $ | 458,250 | (3) | $ | 216,294 | $ | 216,294 | (4) | |
Long-Term Incentive | |||||||||
Performance Shares | $ | 1,174,282 | (5) | $ | 1,151,332 | (6) | $ | 1,151,332 | (6) |
Restricted Stock Units | $ | 1,869,959 | (7) | $ | 1,108,871 | (8) | $ | 1,108,871 | (8) |
Benefits and Perquisites | |||||||||
Health insurance, etc. | $ | 23,821 | (9) | $ | 11,910 | (10) | |||
Restoration Plan(11) | $ | 598,339 | $ | 598,339 | $ | 598,339 | |||
SERP(12) | $ | 722,381 | $ | 722,381 | $ | 722,381 | |||
Accrued Vacation(13) | $ | 50,917 | $ | 50,917 | $ | 50,917 | |||
Other | |||||||||
Outplacement | $ | 25,000 | $ | 25,000 | |||||
Total | $ | 7,061,449 | $ | 3,848,134 | $ | 4,496,043 | |||
Pay Element | Change in Control and Termination Without Cause or for Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | |||||||||
Cash Compensation | ||||||||||||
Separation Payment | $ | 2,065,000 | (1) | $ | 590,000 | (2) | ||||||
Annual Incentive Award(3) | $ | 774,375 | $ | 774,375 | ||||||||
Long-Term Incentive | ||||||||||||
Performance Shares | $ | 2,693,161 | (4) | $ | 2,365,539 | (5) | $ | 2,365,539 | (5) | |||
Restricted Stock Units | $ | 3,714,024 | (6) | $ | 2,180,265 | (7) | $ | 2,180,265 | (7) | |||
Benefits and Perquisites | ||||||||||||
Health insurance, etc | $ | 21,481 | (8) | $ | 10,741 | (9) | ||||||
Restoration Plan(10) | $ | 400,909 | $ | 400,909 | $ | 400,909 | ||||||
SERP(11) | $ | 490,597 | $ | 490,597 | $ | 490,597 | ||||||
Accrued Vacation(12) | $ | 49,167 | $ | 49,167 | $ | 49,167 | ||||||
Other | ||||||||||||
Outplacement | $ | 25,000 | $ | 25,000 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 10,233,714 | $ | 6,260,852 | $ | 6,112,218 | ||||||
Footnotes:
| (1) | Mr. Wallace would have been eligible for a separation payment equal to the sum of his annual base salary and the target bonus multiplied by two (2) pursuant to the terms of our Change in Control Plan. |
| (2) | Mr. Wallace is entitled to receive an amount equal to 12 months of his annual base salary pursuant to the terms of our Executive Severance Plan. |
| (3) |
| (4) | Upon a termination without cause in the absence of a change in control Mr. Wallace is entitled to receive an amount equal to his bonus based on actual |
| (5) | Performance shares vest in full assuming target performance. |
| (6) | Performance shares vest on apro ratabasis assuming target |
| (7) | Restricted stock units vest in full. |
| (8) | Restricted stock units vest on apro ratabasis. |
| (9) | Mr. Wallace would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on the date of termination for a period of two (2) years. |
| (10) | Mr. Wallace would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on the date of termination for a period of one (1) year. |
| (11) | Mr. Wallace is eligible to receive his Restoration Plan benefit effective December 31, |
| (12) | Mr. Wallace is eligible to receive his supplemental executive retirement plan benefit effective December 31, |
| (13) | For purposes of this table, we assumed Mr. Wallace did not take any vacation in |
32
Robert D. Pyle
The following table describes potential termination and change in control payments to Mr. Pyle, President of Dana’s President, Light Vehicle Driveline Technologies,Drive Systems, under a variety of circumstances.
Pay Element | Change in Control and Termination Without Cause or Voluntary Termination with Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | ||||||
Cash Compensation | |||||||||
Separation Payment | $ | 1,856,400 | (1) | $ | 546,000 | (2) | |||
Annual Incentive Award | $ | 382,200 | (3) | $ | 317,226 | 317,226 | (4) | ||
Long-Term Incentive | |||||||||
Performance Shares | $ | 900,773 | (5) | $ | 853,598 | (6) | $ | 853,598 | (6) |
Restricted Stock Units | $ | 1,405,058 | (7) | $ | 820,602 | (8) | $ | 820,602 | (8) |
Benefits and Perquisites | |||||||||
Health insurance, etc. | $ | 33,048 | (9) | $ | 16,524 | (10) | |||
Restoration Plan(11) | $ | 751,148 | $ | 751,148 | $ | 751,148 | |||
SERP(12) | $ | 408,598 | $ | 408,598 | $ | 408,598 | |||
Accrued Vacation(13) | $ | 45,500 | $ | 45,500 | $ | 45,500 | |||
Other | |||||||||
Outplacement | $ | 25,000 | $ | 25,000 | |||||
Total | $ | 5,807,725 | $ | 3,196,672 | $ | 3,784,195 | |||
| Pay Element | Change in Control and Termination Without Cause or for Good Reason | Death / Disability | Termination Without Cause (No Change in Control) | |||||||||
Cash Compensation | ||||||||||||
Separation Payment | $ | 1,734,000 | (1) | $ | 510,000 | (2) | ||||||
Annual Incentive Award(3) | $ | 606,900 | $ | 606,900 | ||||||||
Long-Term Incentive | ||||||||||||
Performance Shares | $ | 1,898,161 | (4) | $ | 1,634,943 | (5) | $ | 1,634,943 | (5) | |||
Restricted Stock Units | $ | 2,590,409 | (6) | $ | 1,505,014 | (7) | $ | 1,505,014 | (7) | |||
Benefits and Perquisites | ||||||||||||
Health insurance, etc | $ | 29,820 | (8) | $ | 14,910 | (9) | ||||||
Restoration Plan(10) | $ | 561,993 | $ | 561,993 | $ | 561,993 | ||||||
SERP(11) | $ | 234,344 | $ | 234,344 | $ | 234,344 | ||||||
Accrued Vacation(12) | $ | 42,500 | $ | 42,500 | $ | 42,500 | ||||||
Other | ||||||||||||
Outplacement | $ | 25,000 | $ | 25,000 | ||||||||
|
|
|
|
|
| |||||||
Total | $ | 7,723,127 | $ | 4,585,694 | $ | 4,528,704 | ||||||
Footnotes:
| (1) | Mr. Pyle would have been eligible for a separation payment equal to the sum of his annual base salary and the target bonus multiplied by two (2) pursuant to the terms of our Change in Control Plan. |
| (2) | Mr. Pyle is entitled to receive an amount equal to 12 months of his annual base salary pursuant to the terms of our Executive Severance Plan. |
| (3) |
| (4) | Upon a termination without cause in the absence of a change in control Mr. Pyle is entitled to receive an amount equal to his bonus based on actual |
| (5) | Performance shares vest in full assuming target performance. |
| (6) | Performance shares vest on apro ratabasis assuming target |
| (7) | Restricted stock units vest in full. |
| (8) | Restricted stock units vest on apro ratabasis. |
| (9) | Mr. Pyle would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on the date of termination for a period of two (2) years. |
| (10) | Mr. Pyle would receive a lump sum cash payment in the amount of the difference of his employee premium share and COBRA costs as determined on the date of termination for a period of one (1) year. |
| (11) | Mr. Pyle is eligible to receive his Restoration Plan benefit effective December 31, |
| (12) | Mr. Pyle is eligible to receive his supplemental executive retirement plan benefit effective December 31, |
| (13) | For purposes of this table, we assumed Mr. Pyle did not take any vacation in |
33
In accordance with the Dodd-Frank Act (“the Act”) disclosure requirement of the ratio of the CEO’s annual total compensation to that of Dana’s global median employee, Dana has determined that the pay ratio for 20172019 is 246:221:1. This is based on the annual total compensation (determined in accordance with the Summary Compensation Table definition) of $44,171$39,234 which Dana paid in 20172019 to its median employee, serving in a plant production line role in Guiscard, France (COLA not applied) and the CEO’s total compensation for 20172019 of $10,861,871$8,654,700 (in accordance with the same definition). IfWe have converted the one-time new hire equity grant awardedmedian employee’s salary to U.S. dollars using the applicable exchange rate as of December 31, 2019.
Consistent with our disclosure for 2018, we elected to use the same median employee that we identified in 2017 to calculate our 2019 CEO pay ratio. In accordance with the rules defined within the Act, we determined that we had no changes to our CEOcompensation practices or employee demographics in 2019 that we reasonably believe would result in a significant change to our pay ratio disclosure.
In 2017, identification of the median employee was originally based on our global employee population of approximately 21,928, of which 15,661 were employed outside of the U.S. We excluded non-U.S. locations reflecting approximately 1,103 employees in China and 51 employees in Ecuador, and such exclusions reflected 5% of our total employee population. Further, we excluded employees from such totalacquisitions completed in 2017 including the acquisition of 80% ownership interests in Brevini Fluid Power S.p.A. and Brevini Power Transmission S.p.A. from Brevini Group, S.p.A. (2,050 employees) and all of the company units of Warren Manufacturing LLC (738 employees). Such employee population was evaluated as of October 31, 2017. We established a compensation measure inclusive of base salary, bonuses, incentives, vacation and holiday pay and estimates of such components of pay for the resulting revised ratio is 206:1. remainder of the year. For new hires that did not provide services to Dana during the entire measurement period, compensation was annualized. All non-U.S. compensation was converted to U.S. dollars based on applicable exchange rates as of December 31, 2017.
This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the rule’s flexibility, the method Dana used to determine the median employee and compensation measure may be different from its peers such that the pay ratio of its peers may not be comparable.
Identification of the median employee was based on reference to our global employee population of approximately 21,928, of which 15,661 are employed outside of the U.S. We excluded non-U.S. locations
reflecting approximately 1,103 employees in China and 51 employees in Ecuador, and such exclusions reflect 5% of our total employee population. Further, we excluded employees from acquisitions completed in 2017 including the acquisition of 80% ownership interests in Brevini Fluid Power S.p.A. and Brevini Power Transmission S.p.A. from Brevini Group, S.p.A. (2,050 employees) and all of the company units of Warren Manufacturing LLC, the owner of certain assets and liabilities related to the former Warren, Michigan production unit of U.S. Manufacturing Corporation (738 employees). Such employee population was evaluated as of October 31, 2017.
We established a compensation measure that was applied consistently across such employee population comprised of actual compensation paid from January 1, 2017 through October 31, 2017, inclusive of base salary, bonuses, incentives, vacation and holiday pay and estimates of such components of pay for the remainder of the year. For new hires that did not provide services to Dana during the entire measurement period, compensation was annualized. Our compensation measure was then analyzed and tested at year end based on year-end compensation data. All non-U.S. compensation was converted to U.S. dollars based on applicable exchange rates as of December 31, 2017.
TRANSACTIONS OF EXECUTIVE OFFICERS WITH DANA
None of the executive officers of Dana or members of their immediate families or entities with which they have a position or relationship had any transactions with Dana since January 1, 2017.2019.
For information on procedures and policies for reviewing transactions between Dana and its executive officers, their immediate family members and entities with which they have a position or relationship, see “Director Independence and Transactions of Directors with Dana—Review of Transactions with Related Persons.”
34
PROPOSAL I SUBMITTED FOR YOUR VOTE
ELECTION OF DIRECTORS
Under our Bylaws, each director will hold office on the Board until the election and qualification of a successor at an annual meeting of shareholders or until his or her earlier resignation, disqualification, removal, death or other cause.
The members of our Board are elected by the holders of shares of common stock at each meeting of shareholders held for the purpose of electing directors. Our Board currently consists of tennine directors. Terrence J. Keating and Mark A. Schulz, who both joined our Board in 2008, have indicated they will not stand for reelection at the 2018 Annual Meeting of Shareholders. The Board does not plan to replace these two open seats and will reduce our Board size to eight members. As a result, this year you are voting on eight candidates for the Board of Directors. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following current Directors for election: Rachel A. Gonzalez, James K. Kamsickas, Virginia A. Kamsky, Bridget E. Karlin, Raymond E. Mabus, Jr., Michael J. Mack, Jr., R. Bruce McDonald, Diarmuid B. O’Connell, and Keith E. Wandell. Each of the nominees has consented to his or her nomination and has agreed to serve as a director of Dana, if elected.
The Board has adoptedDirector Selection and Retention Guidelines. Under these Guidelines, the Board identifies individuals qualified to become members of the Board and elects candidates to fill new or vacant positions. Potential candidates for Board positions are identified through a variety of means, including individuals identified by the Nominating and Corporate Governance Committee, the use of search firms, recommendations of Board members, recommendations of executive officers and properly submitted shareholder recommendations. Potential candidates for nomination as director candidates must provide written information about their qualifications and participate in interviews conducted by individual Board members. Candidates are evaluated using the guidelines described below to determine their qualifications based on the information supplied by the candidates and information obtained from other sources.
The Board will consider shareholder recommendations for directors that meet the criteria set forth below. The Board makes no distinctions in evaluating nominees for positions on the Board based on whether or not a nominee is recommended by a shareholder. Shareholders who wish Dana to consider their recommendations for nominees for the position of director should submit their recommendations in writing to Dana Incorporated, 3939 Technology Drive, Maumee, Ohio 43537, Attention: Corporate Secretary, using the same deadline for nominations under our advance notice bylaw set forth in the ‘Questions and Answers’ section above.
Neither Dana’s Board nor the Nominating and Corporate Governance Committee has adopted a specific diversity policy with respect to identifying nominees for director. However, Dana has established criteria it considers when it is evaluating a potential candidate. Criteria for assessing nominees include a potential nominee’snominee's ability to represent the long-term interests of Dana. Minimum qualifications for a director nominee are experience in those areas that the Board determines are necessary and appropriate to meet the needs of Dana, including leadership positions in public companies, large or middle market businesses, or not-for-profit, governmental, professional or educational organizations. For those proposed director nominees who meet the minimum qualifications, the Board assesses the proposed nominee’snominee's specific qualifications, evaluates his or her independence (including, but not limited to, independence related to Dana, other Board members and shareholders), and considers other factors, including skills, business segment representation, geographic location, diversity, standards of integrity, memberships on other boards (with a special focus on director interlocks), and ability and willingness to commit to serving on the Board for an extended period of time and to dedicate adequate time and attention to the affairs of Dana as necessary to properly discharge his or her duties. Additionally, the Board considers whether each nominee would be considered a “financial expert”"financial expert" or “financially literate”"financially literate" as described in applicable listing standards, legislation and our Audit Committee guidelines.
Additionally, ourCorporate Governance Guidelines, Standards of Business Conduct for Members of the Board of Directors, Related-PartyRelated-Party Transactions Policyand the Director Independence Standardsare considered prior to making a recommendation to the Board for approval of a nominee. Each of these documents is available on Dana’s website at www.dana.com.
DANA’S BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE NOMINEES FOR DIRECTOR.
35
INFORMATION ABOUT THE NOMINEES
Our Board currently has nineeight non-management directors and one management director. All of our directors are elected annually serving a one-year term expiring at the next annual meeting of shareholders. The following section provides information as of February 26, 201824, 2020 about each nominee for election as a Director.director. The information provided includes the age of each individual; the individual’s principal occupation and special qualifications; employment and business experience during the past five years, including employment with Dana; other public company or registered investment company directorships held during the past five years; and the year in which the director became a director of Dana.
RACHEL A. GONZALEZ | Director since 2017 | |
Ms. Gonzalez,
| ||
JAMES K. KAMSICKAS | Director since 2015 | |
Mr. Kamsickas,
| ||
VIRGINIA A. KAMSKY | Director since 2011 | ||
Ms. Kamsky,
| |||
BRIDGET E. KARLIN | Director since 2019 | ||
Ms. Karlin, 63, has been Chief Technology Officer and Vice President, Global Technology Services, IBM Corporation, a global technology company that creates, develops and manufactures technologies, including computer systems, software, networking systems, storage devices and microelectronics since 2017. Prior to her current position, Ms. Karlin served as Managing Director, Internet of Things, Intel Corporation from 2014 to 2017. Ms. Karlin has over twenty-five years of technology experience as well as executive, financial and business operations management experience, which provides the Board with insights to strategic growth areas in guiding Dana to be successful in global markets. | |||
RAYMOND E. MABUS, JR. | Director since 2017 | ||
Mr. Mabus,
| |||
MICHAEL J. MACK, JR. | Director since 2018 | ||
Mr. Mack, | |||
| ||
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R. BRUCE MCDONALD | Director since 2014 | |
Mr. McDonald,
| ||
DIARMUID B. O’CONNELL | Director since 2018 | |
Mr. O’Connell, Mr. O’Connell is currently a board member of Albemarle Corporation and The Mobility House GmbH. | ||
KEITH E. WANDELL | Director since 2008 | |
Mr. Wandell, | ||
| ||
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Our Board of Directors has established guidelines that it follows in matters of corporate governance. OurCorporate Governance Guidelinesdescribe our corporate governance practices and address corporate governance issues such as Board composition and responsibilities, compensation of directors and executive succession planning. The following summary provides highlights of those guidelines. A complete copy of ourCorporate Governance Guidelines is available online at http://www.dana.com.
Role of Board
The business of Dana is conducted by its employees, managers and corporate officers led by our CEO, with oversight from the Board. The Board selects the CEO and works with the CEO to elect/appoint other corporate officers who are charged with managing the business of Dana. The Board has the responsibility of overseeing, counseling and directing the corporate officers to ensure that the long-term interests of Dana and its shareholders are being served. The Board and the corporate officers recognize that the long-term interests of Dana and its shareholders are advanced when they take into account the concerns of employees, customers, suppliers and communities.
Responsibilities of the Board
The basic responsibility of our directors is to exercise their reasonable business judgment on behalf of Dana. In discharging this obligation, directors rely on, among other things, Dana’s corporate officers, outside advisors and auditors.
Pursuant to the Board’s general oversight responsibilities, among other things, the Board:
| ► | Evaluates the CEO’s performance and reviews Dana’s succession plan for the CEO and other officers; |
Evaluates the CEO’s performance and reviews Dana’s succession plan for the CEO and other officers;
| ► | Reviews the long-range business plans of Dana and monitors performance relative to achievement of those plans; |
| ► | Considers long-range strategic issues and risks to Dana; and |
| ► | Approves policies of corporate conduct that continue to promote and maintain the integrity of Dana. |
Reviews the long-range business plans of Dana and monitors performance relative to achievement of those plans;
Considers long-range strategic issues and risks to Dana; and
Approves policies of corporate conduct that continue to promote and maintain the integrity of Dana.
Executive Sessions of the Board
Executive sessions of our non-management directors are held, without Dana management, in conjunction with each regularly scheduled Board meeting and between such Board meetings as requested, from time to time, by our ChairmanLead Independent Director or other non-management directors. These sessions are chaired by our Chairman.Lead Independent Director.
Access to Management and the Independent Registered Public Accounting Firm
Our non-management directors may meet with senior management, other employees and the independent registered public accounting firm at any time, either separately or jointly, as they deem appropriate. Senior personnel of Dana and of the registered public accounting firm regularly attend portions of our Board and Committee meetings, and other personnel may be invited to attend particular meetings where appropriate.
Board Performance Assessment
The Board conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. Our Nominating and Corporate Governance Committee reviews the self-evaluation process. An annual report is made to the Board on the assessment of the performance of the Board and its committees. The assessment evaluates the contribution of the Board and its committees to Dana and specifically focuses on areas in which the Board believes it or its committees could improve.
Board Leadership Structure
Our Board has separatedUnder Dana’s Bylaws, the rolepositions of Chairman of the Board and the CEO may each be held separately, or together by one person. The Board’s analysis as to whether the two positions should be combined or held separately takes into account many factors including the strong role of the Lead Independent Director and the best interests of Dana’s shareholders. While the Board had maintained a separation of the Chairman and CEO positions since 2011, the Board determined, after careful consideration during its annual evaluation of its leadership structure, that combining the two positions would enhance Dana’s governance structure and best serve Dana’s strategic objectives.
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Mr. Kamsickas has served as Dana’s President and CEO since 2011. Currently,August 2015 and has served in leadership roles in the automotive industry for over 30 years, including a collective 13 years as CEO of large multinational companies in the mobility sector. Mr. Wandell has served as our independentone of Dana’s directors since July 2008, and had served as Non-Executive Chairman sincefrom October 2016.2016 through December 2019. Appointing Mr. Kamsickas has servedto the additional position of Chairman in December 2019 reflects the Board’s confidence in his ability to provide oversight and to most effectively drive Dana to achieve its strategic objectives through unified leadership. The Board determined that combining the two positions provides Dana with distinct advantages, including:
| ► | Leveraging Mr. Kamsickas’s deep institutional knowledge and industry experience from his service as CEO; |
| ► | Providing critical leadership, organizational stability, and a strong bridge between the Board and the management team; and |
| ► | Driving efficient decision making and enhanced accountability. |
Importantly, the Board also determined that having Mr. Wandell serve as our PresidentLead Independent Director establishes an effective balance to the combined role of Chairman and Chief Executive Officer since August 2015. The Board’s current view isCEO.
Dana’s Bylaws and Corporate Governance Guidelines provide that separatingwhen the Board determines that the Chairman and CEO positions provides an efficientshould be combined, the Board should also have a Lead Independent Director to complement the Chairman’s role. The duties and effective leadership model for Dana. Separatingresponsibilities of the Lead Independent Director include: (i) presiding at all meetings of the Board at which the Chairman is not present, including any executive sessions of the independent directors; (ii) serving as the liaison between the Chairman and CEO positions has i) allowed Mr. Kamsickas to devote his full attention to focusing on Dana’s business, leveraging his vast business and industry experience, without the additional responsibilities of Chairman, ii) created mentoring opportunities, and iii) takes advantageindependent directors; (iii) coordinating the activities of the business synergies created by two dynamic leaders.
Our Board recognizes no single leadership model is rightindependent directors; (iv) developing the agenda for all companiesthe executive sessions and at all times. Our Board believes that depending on the circumstances, other leadership models, such as a combined Chairmanmeetings of the independent directors; (v) advising the Chairman regarding the timing, scheduling, structuring, and the agenda of Board meetings; (vi) consulting with and CEO role, mightproviding feedback to the Chairman regarding matters discussed in executive sessions and regarding other Board matters as appropriate; and (vii) advising the Chairman regarding the flow of information from management to the Board. The duties of the Lead Independent Director help ensure the effective and independent leadership of our Board. Dana’s Bylaws and Corporate Governance Guidelines require that the Lead Independent Director be appropriate. It is our Board’s intentionelected annually, which helps to periodically review ourensure that the Board evaluates Dana’s Board leadership structure.structure at least annually.
Succession Planning
A key responsibility of our Board is ensuring that an effective process is in place to provide continuity of leadership over the long term at all levels of Dana. Each year, succession planning reviews are held at every significant organizational level of Dana, culminating in a full review of senior leadership talent. During this review, the Board discusses future candidates for senior leadership positions, succession timing for those positions and development plans for the highest-potential candidates. This process ensures continuity of leadership over the long term, and it forms the basis on which Dana makes ongoing leadership assignments.
Dana maintains a risk management program overseen by our Executive Leadership Team. In particular, our Executive Vice President and Chief Financial Officer as well as Senior Vice President, General Counsel and Secretary have responsibility for this area. In addition, our Business Unit Presidents and functional leads oversee strategic and operational risks. Risks are identified and prioritized by our management, and each of these risks is reviewed by the Audit Committee or the entire Board. For example, strategic risks are overseen by the entire Board and financial risks are overseen by our Audit Committee. Management regularly reports on each such risk to our entire Board or Audit Committee. Additional review or reporting on risks is conducted as needed or as requested by the Board or any committee. Also, our Compensation Committee periodically reviews the most important risks to ensure that compensation programs do not encourage excessive risk-taking and has implemented several mechanisms to avoid such risk-taking behavior, as detailed in the “Mitigation of Potential Risk in Pay Programs” and “Clawback Provisions” sections above.
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COMMITTEES AND MEETINGS OF DIRECTORS
The Board has several committees, as set forth in the following chart and described below. The names of the directors serving on the committees and the committee chairs are also set forth in the chart. The current terms of the various committee members expire at the 20182020 Annual Meeting. Upon being appointed to the Board in February 2018, Mr. Mack became a member of both the Audit and Compensation Committees and Mr. O’Connell became a member of the Nominating and Corporate Governance Committee as well as the Compensation Committee.
Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | ||||
|
|
| ||||
R. Bruce McDonald(1) | Rachel A. Gonzalez(1) | Virginia A. Kamsky(1) | ||||
Virginia A. Kamsky | Michael J. Mack, Jr. | Rachel A. Gonzalez | ||||
Bridget E. Karlin | R. Bruce McDonald | Bridget E. Karlin | ||||
Raymond E. Mabus, Jr. | ||||||
Diarmuid B. O’Connell | Raymond E. Mabus, Jr. | |||||
Michael J. Mack, Jr. | Diarmuid B. O’Connell |
| (1) | Chair |
Audit Committee. As provided in its Board-adopted written charter, thisThis committee consists solely of members who are outside directors and who meet the independence and experience requirements of applicable rules of the NYSE and the SEC with respect to audit committee members. This committee is responsible, among other things, for providing assistance to the Board by overseeing: (i) the integrity of Dana’sDana's financial statements; (ii) Dana’sDana's compliance with legal and regulatory requirements; (iii) the independent registered public accounting firm’sfirm's qualifications and independence; (iv) the performance of Dana’sDana's internal audit function and independent registered public accounting firm; and (v) the preparation of the “Audit"Audit Committee Report”Report" found in this proxy statement. The Board of Directors has determined that all of the members of the Audit Committee are independent within the meaning of those independence requirements established from time to time by the Board and the SEC and the listing standards of the NYSE (see “Director"Director Independence and Transactions of Directors with Dana”Dana" section in this proxy statement). Our Board has determined that Messrs. Mack and McDonald are each an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act. A current copy of the charter of the Audit Committee is available to security holdersshareholders on Dana’sDana's website at www.dana.com. The Audit Committee met sixfive times in 2017.2019.
Compensation Committee.This committee establishes and evaluates Dana’sDana's executive compensation policies and programs, administers Dana’sDana's 401(k), stock, incentive and retirement plans and monitors compliance with laws and regulations applicable to the documentation and administration of Dana’sDana's employee benefit plans, among other things. The Board of Directors has determined that all of the members of the Compensation Committee are independent, pursuant to independence requirements established from time to time by the Board and the listing standards of the NYSE (see the “Director"Director Independence and Transactions of Directors with Dana”Dana" section in this proxy statement). A current copy of the charter of the Compensation Committee is available to security holdersshareholders on Dana’sDana's website at www.dana.com. The Compensation Committee met sixfive times in 2017.2019. See the “Compensation Discussion and Analysis” section above for more information.
Nominating and Corporate Governance Committee. This committee monitors the effectiveness of the Board and oversees corporate governance issues. Among its various other duties, this committee reviews and recommends to the full Board candidates to become Board members, develops and administers performance criteria for members of the Board, and oversees matters relating to the size of the Board, its committee structure and assignments and the conduct and frequency of Board meetings. The Board of Directors has determined that all of the members of the Nominating and Corporate Governance Committee are independent, pursuant to independence requirements established from time to time by the Board and the listing standards of the NYSE (see the “Director"Director Independence and Transactions of Directors with Dana”Dana" section in this proxy statement). A current copy of the charter of the Nominating and Corporate Governance Committee is available to security
holdersshareholders on Dana’sDana's website at www.dana.com. The Nominating and Corporate Governance Committee met tenfive times in 2017.2019.
Board and Committee Meetings. There were five regular meetings of the Board and twenty-twofifteen meetings of the various committees of the Board. All directors attended at least seventy-five percent (75%) of the aggregate number of meetings held by the Board and all the committees of the Board on which the respective directors served. Dana expects all of its directors to attend the Annual Meeting except in cases of illness, emergency or other reasonable grounds for non-attendance. All members of our Board of Directors attended our Annual Meeting last year.
NON-MANAGEMENT DIRECTORS AND COMMUNICATION WITH THE BOARD
The non-management directors meet at regularly scheduled executive sessions without management. Mr. Wandell is the ChairmanLead Independent Director at such sessions. Interested parties may communicate directly with Mr. Wandell or with the non-management directors as a group by sending written correspondence, delivered via United States mail or courier service, to: Corporate Secretary,
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Dana Incorporated, 3939 Technology Drive, Maumee, Ohio, 43537, Attn: Non-Management Directors. Alternatively, shareholders may send communications to the full Board by sending written correspondence, delivered via United States mail or courier service, to: Corporate Secretary, Dana Incorporated, 3939 Technology Drive, Maumee, Ohio, 43537, Attn: Full Board of Directors. The Board of Directors’ current practice is that the Corporate Secretary may relay proper communications received to the Chairman of the Board.
DIRECTOR INDEPENDENCE AND TRANSACTIONS OF DIRECTORS WITH DANA
Independence and Transactions of Directors
The Board of Directors has determined that the nineeight non-management directors are independent within the meaning of the listing standards of the NYSE. Our Board determines whether each director qualifies as an “independent director”director" when first elected to the Board and annually thereafter. To assist in making these determinations of independence, Dana adopted categorical standards set forth in ourDirector Independence Standards, a current copy of which is available to security holdersshareholders on Dana’sDana's website at www.dana.com.
Under ourDirector Independence Standards, if a director has a relationship with Dana (either directly or as a partner, shareholder, or officer of an organization that has a relationship with Dana), the Board considers all relevant facts and circumstances in determining whether the relationship will interfere with the exercise of the director’s independence from Dana and our management, taking into account, among other things, the significance of the relationship to Dana, to the director, and to the persons or organizations with which the director is affiliated.
In connection with making its director independence determinations, the Board specifically considered the following relationships and transactions:
Mr. Schulz is a member of the Board of Directors of PACCAR, Inc. PACCAR is one of our largest customers. Based on Dana’s strong Board governance practices and procedures, the Board determined that Mr. Schulz’s role at PACCAR does not impair his independence.
The Board has affirmatively determined that the following directors, constituting a majority of our Board of Directors, meet the categorical standards for independence and that such directors have no material relationship with Dana (either directly or as a partner, shareholder or officer of an organization that has a relationship with Dana) other than as a director: Rachel A. Gonzalez, Virginia A. Kamsky, Terrence J. Keating,Bridget E. Karlin, Raymond E. Mabus, Jr., Michael J. Mack, Jr., R. Bruce McDonald, Diarmuid B. O’Connell, Mark A. Schulz, and Keith E. Wandell.
Review of Transactions with Related Persons
Dana has procedures and policies for reviewing transactions between Dana and its directors and executive officers, their immediate family members and entities with which they have a position or relationship. These procedures are intended to determine whether any such transaction impairs the independence of a director or presents a conflict of interest on the part of a director or executive officer.
Annually, each director and executive officer is required to complete a director, director nominee and executive officer questionnaire, and each non-management director is required to complete an independence certification. Both of these documents elicit information about related person transactions. The Nominating and Corporate Governance Committee and the Board of Directors annually review the transactions and relationships disclosed in the questionnaire and certification, prior to the Board of Directors making a formal determination regarding the directors’directors' independence. To assist them in their review, the Nominating and Corporate Governance Committee and the Board of Directors use the categorical standards found in Dana’sDana's Director Independence Standards, as discussed above.
In order to monitor transactions that occur between the annual reviews, the independence certification also obligates the directors to immediately notify our General Counsel in writing if they discover that any statement in the certification was untrue or incomplete when made, or if any statement in the certification becomes subsequently untrue or incomplete. Likewise, under ourStandards of Business Conduct for the Board of Directors, any situation that involves, or may involve, a conflict of interest with Dana is required to be promptly disclosed to the Chairman of the Board, who will consult with the Chairman of the Nominating and Corporate Governance Committee. Executive officers are bound by theStandards of Business Conduct for Employees.
Our Board has adopted aRelated-Party Transactions Policy that sets forth standards with respect to related party transactions with Dana or our subsidiaries. A current copy of this policy is available to shareholders on Dana’s website at www.dana.com.
Under theRelated-Party Transactions Policy, (i) a director, nominee for director or executive officer of Dana (since the beginning of the last fiscal year), (ii) any beneficial holder of greater than five percent (5%) of Dana’s voting securities or (iii) any immediate family member of any of the foregoing, are required to seek the prior approval of the Audit Committee of any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (i)(a) the aggregate amount involved will or may reasonably be expected to exceed $120,000 in any calendar year, (ii)(b) Dana, or any of its subsidiaries is a participant, and (iii)(c) any related party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).
In making its determination, the Audit Committee considers such factors as (i) the extent of the related party’s interest in the interested transaction, (ii) if applicable, the availability of other sources of comparable products or services, (iii) whether the terms of the interested
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transaction are fair to Dana and no less favorable than terms generally available in unaffiliated third-party transactions under like circumstances, (iv) whether the interested transaction would impair the independence of an outside director, (v) the benefit to Dana, and (vi) whether the interested transaction is material, taking into account: (a) the importance of the interest to the related party, (b) the relationship of the related party to the interested transaction and of the related parties to each other, (c) the dollar amount involved, and (d) the significance of the transaction to Dana’s investors in light of all the circumstances.
Notwithstanding the foregoing, our Board may determine certain interested transactions deemed to be pre-approved, even if the aggregate amount involved will exceed $120,000. Those pre-approved transactions are described in theRelated-Party Transactions Policy.
All interested transactions, except certain pre-approved transactions, must be disclosed in Dana’s applicable SEC filings as, and to the extent, required by applicable SEC rules and regulations.
The questionnaire, certification,Standards of Director Independence Standards,Standards of Business Conduct for the Board of Directors,Standards of Business Conduct for Employees, andRelated-Party Transactions Policy are all in writing.
The Board specifically considered the following relationships and transactions in 2017:
Mark A. Schulz is a Board member of PACCAR, Inc. PACCAR is one of our largest customers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Wandell, Keating, Mabus, McDonald, SchulzMs. Gonzalez, as well as Ms. Kamsky,Messrs. Mack, McDonald and O’Connell, served as members of the Compensation Committee.Committee, as did Mr. Wandell and Ms. Kamsky for part of the year. No such member of the Compensation Committee is, or was during 2017,2019, an officer or employee of Dana or any of its subsidiaries, nor was any such member formerly an officer of Dana or any of its subsidiaries. Moreover, no such member is an officer of a company in which an executive officer of Dana is a member of its compensation committee.
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Our Compensation Committee is responsible for making recommendations to our Board of Directors regarding the form and amount of non-employee director compensation. In determining the recommendation for director compensation, the Compensation Committee considers the recommendations of our Chairman and CEO and Senior Vice President, Human Resources, as well as information provided by Mercer.
The table below illustrates the compensation structure for non-employee directors in 2017.2019. Employee directors receive no additional compensation for their Board service. In addition to the compensation described below, each director is reimbursed for reasonable out-of-pocket expenses incurred for travel and attendance related to meetings of the Board of Directors or its committees.
Non-Employee Directors Annual Retainer Compensation (cash) | |||
Director | $ | 100,000 | |
Chairman of the Board (premium) | $ | 100,000 | |
Audit Committee Chair | $ | 25,000 | |
Audit Committee Member | $ | 10,000 | |
Compensation Committee Chair | $ | 20,000 | |
Compensation Committee Member | $ | 10,000 | |
Governance Committee Chair | $ | 20,000 | |
Governance Committee Member | $ | 10,000 | |
Restricted Stock Units(1) | $ | 120,000 |
Annual Retainer (cash) | $ | 90,000 | ||
Annual Retainer for Chairman of the Board (cash) | $ | 100,000 | ||
Annual Retainer for Audit Committee Chair (cash) | $ | 15,000 | ||
Annual Committee Chair Retainer – (except Audit) (cash) | $ | 10,000 | ||
Board or Committee Meeting Fees – per meeting (cash) | $ | 1,500 | ||
Restricted Stock Units(1) | $ | 115,000 |
Footnotes:
| (1) | This annual grant of RSUs was made pursuant to the Plan on February |
Deferred Compensation.Each non-employee director has the opportunity to elect to defer a percentage of the annual cash retainer into restricted stock units. The RSUs are credited as of the last day of each quarter based on the quotient obtained by dividing (i) the dollar amount of the retainer for that quarter which is being deferred by (ii) the closing price per share on the last trading day of that quarter (with the result being rounded down to the nearest whole number of RSUs). The RSUs are fully vested on the date of grant and each RSU represents the right to receive one share of our common stock (or, at our election, an equivalent cash amount) on the earlier of (i) the first business day of the calendar month coincident with or next following the date that the director terminates service as a non-employee director or (ii) the date on which a change in control occurs.
The following table provides information on the compensation of our non-employee directors for 2017.2019.
Director Compensation
Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(4) | Total ($) | ||||||
Rachel A. Gonzalez | 127,500 | 122,796 | 250,296 | ||||||
Virginia A. Kamsky | 130,000 | 122,796 | 252,796 | ||||||
Bridget E. Karlin (3) | — | — | — | ||||||
Raymond E. Mabus, Jr. | 120,000 | 122,796 | 242,796 | ||||||
Michael J. Mack, Jr. | 120,000 | 122,796 | 242,796 | ||||||
R. Bruce McDonald | 135,000 | 122,796 | 257,796 | ||||||
Diarmuid O’Connell | 120,000 | 122,796 | 242,796 | ||||||
Keith E. Wandell | 215,000 | 122,796 | 337,796 | ||||||
Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Total ($) | |||||||||
Rachel A. Gonzalez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . | 105,259 | 116,358 | 221,617 | |||||||||
Virginia A. Kamsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . | 130,000 | 116,358 | 246,358 | |||||||||
Terrence J. Keating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . | 114,045 | 128,596 | 242,641 | |||||||||
Raymond E. Mabus, Jr. | 104,045 | 116,358 | 220,403 | |||||||||
R. Bruce McDonald . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . | 130,545 | 116,358 | 246,903 | |||||||||
Mark A. Schulz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . | 114,969 | 116,358 | 231,327 | |||||||||
Keith E. Wandell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . | 230,478 | 116,358 | 346,836 | |||||||||
Footnotes:
| (1) | Employee directors do not receive any compensation with respect to their service on the Board; accordingly, Mr. Kamsickas is not included in this table. |
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| (2) | This column reports the amount of cash compensation earned in |
| (3) | Ms. Karlin joined Dana’s Board of Directors in December and received no compensation for board service in 2019. |
| (4) | This column reflects the full grant date fair values determined in accordance with FASB ASC Topic 718 (and dividend equivalent units earned in |
Name(1) | Outstanding Stock Awards (#) | |||||
| ||||||
Rachel A. Gonzalez | 7,210 | |||||
Virginia A. Kamsky | 7,210 | |||||
Bridget E. Karlin | — | |||||
Raymond E. Mabus, Jr. | 7,210 | |||||
Michael J. Mack, Jr. | 7,210 | |||||
R. Bruce McDonald | 7,210 | |||||
Diarmuid O’Connell | 7,210 | |||||
Keith E. Wandell | 7,210 | |||||
For additional information regarding Dana’s equity compensation plan, please refer to Note 1 and Note 1112 to our audited financial statements in Dana’s Annual Report on Form 10-K for the year ended December 31, 2017.2019.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows information about beneficial ownership of our securities as of February 26, 2018,24, 2020, by persons who have either filed reports with the SEC indicating that they beneficially own more than 5% of our securities and/or a review of our shareholder records as of February 26, 2018.24, 2020. Unless otherwise stated, to report this information Dana relied solely on reports filed with the SEC.
Name and Address of Beneficial Owner | Title of Class | Number of Shares Beneficially Owned | Percent of Class | ||||
BlackRock, Inc.(1) 55 East 52nd Street New York, NY 10055 | Common Stock | 18,189,180 | 12.6 | % | |||
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, PA 19355 | Common Stock | 13,364,768 | 9.28 | % | |||
Name and Address of Beneficial Owner | Title of Class | Number of Shares Beneficially Owned | Percent of Class | |||||||||
BlackRock, Inc.(1) | Common Stock | 15,675,484 | 10.8 | % | ||||||||
40 East 52nd Street New York, NY 10022 | ||||||||||||
The Vanguard Group(2) | Common Stock | 12,078,192 | 8.49 | % | ||||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||
WEDGE Capital Management L.L.P(3) | Common Stock | 5,619,127 | 3.9 | % | ||||||||
301 S. College Street, Suite 2920 Charlotte, NC 28202-6002 | ||||||||||||
Footnotes:
| (1) | BlackRock, Inc. and related entities (collectively, BlackRock) reported on a Form 13G/A filed with the SEC on |
| (2) | The Vanguard Group reported on a Form 13G/A filed with the SEC on February |
The following tables show the amount of Dana common stock beneficially owned as of February 26, 201824, 2020 by our current Directors and named executive officers and by our Directors and executive officers as a group.
Name of Beneficial Owner | Shares(1) | Shares Acquirable within 60 Days | Percent of Class | ||||||
Aziz S. Aghili | 99,316 | 0 | * | ||||||
Jonathan M. Collins | 37,554 | 0 | * | ||||||
Rachel A. Gonzalez | 17,579 | 0 | * | ||||||
James K. Kamsickas | 507,492 | 0 | * | ||||||
Virginia A. Kamsky | 28,377 | 0 | * | ||||||
Bridget E. Karlin | 0 | 0 | * | ||||||
Raymond E. Mabus, Jr. | 17,579 | 0 | * | ||||||
Michael J. Mack, Jr. | 11,580 | 0 | * | ||||||
R. Bruce McDonald | 38,204 | 0 | * | ||||||
Diarmuid B. O’Connell | 11,580 | 0 | * | ||||||
Robert D. Pyle | 67,070 | 0 | * | ||||||
Mark E. Wallace | 141,755 | 0 | * | ||||||
Keith E. Wandell | 45,467 | 0 | * | ||||||
All Directors and executive officers as a group (16 persons) | 1,152,661 | 0 | *% | ||||||
Name of Beneficial Owner | Shares(1) | Restricted Stock Units(2) | Shares Acquirable within 60 Days(3) | Percent of Class | ||||||||||||
Aziz S. Aghili | 29,376 | 0 | * | |||||||||||||
Jonathan M. Collins | 12,531 | 16,197 | * | |||||||||||||
Rachel A. Gonzalez | 5,999 | 0 | * | |||||||||||||
James K. Kamsickas | 83,973 | 0 | * | |||||||||||||
Virginia A. Kamsky | 32,649 | 0 | * | |||||||||||||
Terrence J. Keating | 55,818 | 55,234 | 0 | * | ||||||||||||
Raymond E. Mabus, Jr. | 5,999 | 0 | * | |||||||||||||
Michael J. Mack, Jr. | 0 | 0 | * | |||||||||||||
R. Bruce McDonald | 26,624 | 0 | * | |||||||||||||
Diarmuid B. O’Connell | 0 | 0 | * | |||||||||||||
Robert D. Pyle | 32,851 | 0 | * | |||||||||||||
Mark A. Schulz | 30,979 | 0 | * | |||||||||||||
Mark E. Wallace | 102,401 | 0 | * | |||||||||||||
Keith E. Wandell | 33,887 | 58,263 | * | |||||||||||||
All Directors and executive officers as a group (17 persons) | 531,628 | 55,234 | 145,593 | * | % | |||||||||||
| * | Represents holdings of less than one percent of Dana’s common stock |
Footnotes:
| (1) | The number of shares shown includes shares that are individually or jointly owned, as well as shares over which the individual has either sole or shared investment or voting authority. None of the persons listed above has pledged his or her shares of common stock. |
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that Dana’sDana's directors, executive officers and persons who own more than ten percent (10%) of a registered class of Dana’sDana's equity securities file reports of stock ownership and any subsequent changes in stock ownership with the SEC and the NYSE not later than specified deadlines. Based solely on its review of the copies of such reports received by it, or written representations from certain reporting persons, (except for late Form 4s related to Messrs. Wandell, Keating, Schulz, McDonald, Filcek, Levin as well as Ms. Kamsky due to administrative errors by Dana), Dana believes that, during the year ended December 31, 2017,2019, each of its executive officers, directors and greater than ten percent (10%) shareholders complied with all such applicable filing requirements.
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PROPOSAL II SUBMITTED FOR YOUR VOTE
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 enables our shareholders to vote on an advisory (non-binding) basis on our compensation policies and practices and the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. Since 2011, our Board of Directors, upon the recommendation of Dana’s shareholders, has elected to hold an annual advisory vote on Dana’s executive compensation practices.
As discussed in Compensation Discussion and Analysis (CD&A) above, the overall objectives of Dana’s executive compensation program are to attract, motivate, reward and retain talent. We believe that in order to achieve our objectives, our compensation and benefits must be competitive with executive compensation arrangements generally provided to other executive officers at similar levels at other companies where we compete for talent. The various components of Dana’s executive compensation program are designed to:
| ► | Align management incentives and shareholder interests; |
Align management incentives and shareholder interests;
| ► | Motivate executive management and employees to focus on business goals over short and long-term horizons; and |
Motivate executive management and employees to focus on business goals over short and long-term horizons; and
| ► | Attract and retain executive talent. |
Attract and retain executive talent.
We believe that Dana’s executive compensation programs have been effective at incentivizing the achievement of positive results, appropriately aligning pay and performance and in enabling Dana to attract and retain very talented executives within our industry. We encourage you to read our CD&A contained within this proxy statement for more detailed discussion of our compensation policies, practices and procedures.
As required by Section 14A of the Exchange Act, we are asking our shareholders to indicate their support for our executive compensation policies and practices as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives you as a shareholder the opportunity to express your views on our fiscal year 20172019 executive compensation policies and procedures for our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and procedures described in this proxy statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
RESOLVED, that the shareholders of Dana Incorporated (Dana) approve, on an advisory basis, the compensation of Dana’s named executive officers, as disclosed in Dana’s Proxy Statement for the 20182020 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission as set forth in Item 402 of Regulation S-K (including the Compensation Discussion & Analysis, the compensation tables and narrative discussion).
Although this is an advisory vote which will not be binding on the Compensation Committee or the Board, we will carefully review the results of the vote. The Compensation Committee will consider our shareholders’ concerns and take them into account when designing future executive compensation programs.
DANA’SDANA'S BOARD OF DIRECTORS RECOMMENDS A VOTE “"FOR”" THIS ADVISORY VOTE ON EXECUTIVE COMPENSATION.
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PROPOSAL III SUBMITTED FOR YOUR VOTE
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of Dana has selected PricewaterhouseCoopers LLP (PwC), an independent registered public accounting firm, to audit our financial statements for the fiscal year ending December 31, 2018,2020, and recommends that the shareholders vote for ratification of such appointment. PwC has served as our independent registered public accounting firm since 1915.
As a matter of good corporate governance, the selection of PwC is being submitted to the shareholders for ratification. In the event of a negative vote on such ratification, the Audit Committee will reconsider its selection. Even if PwC is ratified as the independent registered public accounting firm by the shareholders, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Dana and its shareholders. Representatives of PwC are expected to be present at the Annual Meeting of Shareholders and will have the opportunity to make a statement if they so desire. The representatives also are expected to be available to respond to appropriate questions from shareholders.
DANA’SDANA'S BOARD OF DIRECTORS RECOMMENDS A VOTE “"FOR”" THIS PROPOSAL TO RATIFY THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fees
PwC’s aggregate fees for professional services rendered to Dana worldwide were approximately $9.4$11.2 million and $10.1$9.7 million in the fiscal years ended December 31, 20172019 and 2016,2018, respectively. The following table shows details of these fees (in millions), all of which were pre-approved by our Audit Committee.
Service | 2019 Fees | 2018 Fees | ||||
Audit Fees | ||||||
Audit and review of consolidated financial statements and statutory financial statements of international subsidiaries. | $ | 10.5 | $ | 8.7 | ||
Total Audit Fees | $ | 10.5 | $ | 8.7 | ||
Audit-Related Fees | ||||||
Other audit services relating to statutory attestation services, acquisition due diligence, and new accounting standards. | $ | 0.3 | $ | 0.9 | ||
Total Audit-Related Fees | $ | 0.3 | $ | 0.9 | ||
Tax Fees | ||||||
Assistance with tax compliance, tax audits, and tax advice. | $ | 0.4 | $ | 0.1 | ||
Total All Other Fees | $ | 0.4 | $ | 0.1 | ||
Service | 2017 Fees | 2016 Fees | ||||||
Audit Fees | ||||||||
Audit and review of consolidated financial statements and statutory financial statements of international subsidiaries | $ | 8.8 | $ | 7.8 | ||||
Total Audit Fees | $ | 8.8 | $ | 7.8 | ||||
Audit-Related Fees | ||||||||
Other audit services, including statutory attestation services and internal control assistance in connection with systems implementation initiatives | $ | .6 | $ | .4 | ||||
Total Audit-Related Fees | $ | .6 | $ | .4 | ||||
All Other Fees | ||||||||
Manufacturing optimization advisory services | - | $ | 1.7 | |||||
Acquisition due diligence | - | $ | .2 | |||||
Total All Other Fees | - | $ | 1.9 | |||||
Audit Committee Pre-Approval Policy
Our Audit Committee pre-approves the audit and non-audit services performed by our independent registered public accounting firm, PwC, in order to assure that the provision of such services does not impair PwC’s independence. The Audit Committee annually determines which audit services, audit-related services, tax services and other permissible non-audit services to pre-approve and creates a list of the pre-approved services and pre-approved cost levels. Unless a type of service to be provided by PwC has received general pre-approval, it requires specific pre-approval by the Audit Committee or the Audit Committee Chairman or a member whom he or she has designated. Any services exceeding pre-approved cost levels also require specific pre-approval by the Audit Committee. Management monitors the services rendered by PwC and the fees paid for the audit, audit-related, tax and other pre-approved services and reports to the Audit Committee on these matters at least quarterly. We did not approve the incurrence of any fees pursuant to the exceptions to the pre-approval requirements set forth in applicable SEC disclosure rules.
The information contained in the Audit Committee Report is not deemed to be soliciting material or to be filed for purposes of the Exchange Act, will not be deemed incorporated by reference by any general statement incorporating the document by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent that Dana specifically incorporates such information by reference, and will not be otherwise deemed filed under such acts.
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The Audit Committee oversees Dana’sDana's financial reporting process on behalf of the Board of Directors and is comprised of all outside directors who are independent within the meaning of, and meet the experience requirements of, the applicable rules of the NYSE and the SEC. In addition to its duties regarding oversight of Dana’sDana's financial reporting process, including as it relates to the integrity of the financial statements, the independent auditors’auditors' qualifications and independence and the performance of the independent auditors and Dana’sDana's internal audit function, the Audit Committee also has sole authority to appoint or replace the independent auditors and is directly responsible for the compensation and oversight of the work of the independent auditors as provided in Rule 10A-3 under the Exchange Act. In conducting its annual evaluation of the independent auditors and deciding to re-appoint the independent auditors, the Audit Committee considered, in addition to the firm’s independence and integrity:
| ► | The independent auditors’ competence and its compliance with regulations; |
The independent auditors’ competence and its compliance with regulations;
| ► | The business acumen, value-added benefit, continuity and consistency, and technical and core competency provided by the engagement team; |
The business acumen, value-added benefit, continuity and consistency, and technical and core competency provided by the engagement team;
| ► | The effectiveness of the independent auditors’ processes, including its quality control, timeliness and responsiveness, and communication and interaction with management; and |
The effectiveness of the independent auditors’ processes, including its quality control, timeliness and responsiveness, and communication and interaction with management; and
| ► | The firm’s efforts toward efficiency, including with respect to process improvements and fees. |
The firm’s efforts toward efficiency, including with respect to process improvements and fees.
The Audit Committee periodically considers whether an independent auditor change would be advisable. Pursuant to this review, the Audit Committee believes that PwC’s continuous relationship with Dana provides PwC with valuable institutional knowledge about Dana’s operations, policies, and practices and that changing audit firms would require significant time commitments and potentially distract Dana’s management from its focus on financial reporting and internal controls. Because of PwC’s lead audit partner rotating every five years, as presently required, along with other customary auditor staffing changes, the Audit Committee believes that PwC provides fresh audit perspective without the incremental costs associated with a change in audit firms.
The Audit Committee is involved in the selection of the independent auditor’s lead audit partner every five years, including in identification of candidates, review of qualifications, candidate interviews and review of plans for successor partner transition.
The Audit Committee Charter, which was adopted and approved by the Board, specifies the scope of the Audit Committee’sCommittee's responsibilities and the manner in which it carries out those responsibilities. Management has primary responsibility for the financial statements, reporting processes, and system of internal controls. In fulfilling its oversight responsibilities, among other things, the Audit Committee reviewed the audited financial statements included in Dana’s annual reportDana's Annual Report on Form 10-K with management and the independent auditors, including a discussion of the quality, not just the acceptability, of the accounting principles, reasonableness of significant judgments, and clarity of disclosures in the financial statements and a discussion of related controls, procedures, compliance, and other matters.
Audit Committee discussions with the independent auditors included those required under auditing standards generally accepted in the United States, including Statement on Auditing Standards No. 1301, Communications With Audit Committees. Further, the Audit Committee has received and reviewed the written disclosures and the letter from the independent accountants required by applicable requirements of the PCAOB
for independent auditor communications with Audit Committees concerning independence. The Audit Committee discussed with the independent auditors their independence from management and Dana, and reviewed and considered whether the provision of non-audit services and receipt of certain compensation by the independent auditors are compatible with maintaining the auditors’auditors' independence. In addition, the Audit Committee reviewed with the independent auditors all critical accounting policies and practices to be used.
In reliance on the reviews and discussions referred to above and such other considerations as the Audit Committee determined to be appropriate, the Audit Committee has recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in Dana’s annual reportDana's Annual Report on Form 10-K for the year ended December 31, 20172019 for filing with the SEC.
The Audit Committee
R. Bruce McDonald, Chairman
Rachel
Virginia A. Gonzalez
TerrenceKamsky
Bridget E. Karlin
Raymond E. Mabus, Jr.
Michael J. Keating
Mark A. SchulzMack, Jr.
February 15, 201810, 2020
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PROPOSAL IV SUBMITTED FOR YOUR VOTE
AMEND CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS
We are proposing amendments to our Certificate of Incorporation to eliminate the supermajority voting provisions contained therein. The Board has also approved amendments to our Bylaws to eliminate the supermajority voting provisions contained therein, contingent upon the approval of the Certificate of Incorporation amendments.
Our Certificate of Incorporation and Bylaws currently include certain supermajority voting provisions. Our Board evaluates the implementation of appropriate corporate governance measures on an ongoing basis. In the past, the Board has determined that the retention of a supermajority vote standard for a select few fundamental changes to Dana’s governing documents and corporate governance structure was the best way to ensure that the interests of all stockholders are fully protected.
As part of this ongoing consideration of appropriate corporate governance structures and after taking into consideration the approval of a stockholder proposal to remove our supermajority vote requirements at the 2017 annual meeting, the Board has now determined that it is appropriate to remove the current supermajority voting requirements in our Certificate of Incorporation and Bylaws and replace them with majority voting standards. The Board believes that such standards will continue to provide protection against proposals that could be harmful to stockholders and might otherwise be driven by special interests, and as a result balances the Board’s prior concerns with removal of the supermajority vote requirements and stockholder input.
For these reasons, we are asking our stockholders to approve an Amended and Restated Certificate of Incorporation that eliminates the supermajority voting provisions contained therein, with the result that approval of future amendments to our Amended and Restated Certificate of Incorporation will require a majority of the outstanding stock entitled to vote thereon, consistent with the requirements of Section 242 of the Delaware General Corporation Law. Conditioned upon stockholder approval of these amendments to our Certificate of Incorporation, our Board has approved conforming amendments to remove all supermajority voting provisions from our Bylaws, with the result that the majority standard for stockholder action currently specified in our Bylaws will apply to all stockholder action (unless a higher standard is required by law). Our Board approved and recommends that our stockholders approve the proposed Amended and Restated Certificate of Incorporation as set out below and in Appendix A. If stockholders approve this Proposal IV, the conforming amendments to our Bylaws will become effective.
Approval of this Proposal IV will result in the following changes to our current Certificate of Incorporation and conforming amendments to the Bylaws.
In the Certificate of Incorporation:
Article VI will be amended to eliminate the supermajority requirement to amend or repeal Bylaws 3, 6, 8, 12, 14, 15, 18, 19, and 37.
Article VII, Section 3 will be deleted in its entirety. It previously provided that 66 2/3% of the voting power of the outstanding capital stock entitled to vote generally in the election of directors was required to amend or repeal, or adopt any provision inconsistent with, Article VII.
Article VII, Section 4 will be amended to eliminate the supermajority requirement to remove directors.
Article VIII, Section 5 will be deleted in its entirety. It previously provided that 66 2/3% of the voting power of the outstanding capital stock entitled to vote generally in the election of directors was required to amend or repeal, or adopt any provision inconsistent with, Article VIII.
In the Bylaws:
Bylaw 41 will be amended to eliminate the supermajority requirement to amend Bylaws 3, 6, 8, 9, 13, 15, 18, 19, 22, 23, and 41.
In addition, our Board approved a non-material deletion of Article V and certain other non-material changes to conform to the above changes.
The affirmative vote of a 66 2/3% of the outstanding capital stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. For purposes of determining approval of this proposal, abstentions and broker non-votes will have the same effect as an “AGAINST” vote.
DANA’S BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THIS PROPOSAL TO ELIMINATE SUPERMAJORITY VOTING REQUIREMENTS.
PROPOSAL V SUBMITTED FOR YOUR VOTE
SHAREHOLDER PROPOSAL
The following shareholder proposal will be voted on at the Annual Meeting if properly presented by or on behalf of the shareholder proponent. Approval of this proposal would require the affirmative vote of a majority of shares present in person or by proxy and entitled to vote at the Annual Meeting. John Chevedden of 2215 Nelson Ave., No. 205, Redondo Beach, California 90278, who indicated he holds at least 200300 shares of Dana stock, submitted this proposal.
The Board unanimously recommends a vote “AGAINSTAGAINST” this proposal.
Proposal [4]—User-Friendly Shareholder Ability - Let Shareholders Vote on Bylaw Amendments
Shareholders request that the Board of Directors amend the bylaws to Callrequire that any amendment to bylaws that is approved by the board shall be subject to a Special Shareholder Meetingnon-binding shareholder vote as soon as practical unless such amendment is already subject to a binding shareholder vote.
RESOLVED, Shareowners askIt is important that bylaw amendments take into consideration the impact that such amendments can have on reducing the accountability of directors and managers and/or on limiting the rights of shareholders. For example, Directors could adopt a narrowly crafted exclusive forum bylaw to suit the unique circumstances of the company.
A proxy advisor recently adopted a policy to vote against directors who unilaterally adopt bylaw provisions or amendments to the articles of incorporation that materially diminish shareholder rights.
It is important to improve our boardcorporate governance after our stock price fell from $21 to take$13 in 5-years. This lack of performance is all the steps necessary (unilaterallyworse since this was during the 2018 authorization of increasing the share repurchase program to $200 Million. Share repurchases are supposed to increase the price of the stock even if possible)there is no increase in company performance.
Meanwhile our Chairman, Keith Wandell, received our highest negative votes in 2019. Mr. Wandell also chaired our Executive Pay Committee.
Our directors could be neutral on this proposal to amendobtain feedback from shareholders without interference. However if our bylaws and each appropriate governing documentdirectors oppose this proposal then it would be useful for our directors to give holders inrecent examples of companies whose directors took the aggregate of 10% of our outstanding common stock the power to call a special shareowner meeting. This proposal does not impact our board’s current power to call a special meeting.
Scores of Fortune 500 companies allow a more reasonable 10% of shares to call a special meeting compared to Dana. Special meetings allow shareowners to vote on important matters, such as electing new directorsinitiative and adopted bylaws that can arise between annual meetings.
This proposal topic won more than 70%-support at Edwards Lifesciences and SunEdison in 2013. A shareholder right to call a special meeting and to act by written consent and are 2 complimentary ways to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle.
A more user-friendly ability of shareholders to call a special meeting would give shareholders more opportunity to positively impact our company. For instance Dana shareholder gave 80% support to a 2017 shareholder proposal toreverse an outdated company rule that could make a majority vote of shareholder meaningless.
Any claim that a shareholder right to call a special meeting can be costly—may be largely moot. When shareholders have a good reason to call a special meeting—our board should be able to take positive responding action to make a special meeting unnecessary.primarily benefitted shareholders.
Please vote to improve the corporate governance of our company:yes:
User-Friendly Shareholder Ability to Call a Special Shareholder Meeting—ProposalLet Shareholders Vote on Bylaw Amendments-Proposal [4]
Board of Directors’ Statement in Opposition to the Shareholder Proposal
After careful consideration, our Board believes that the existing Bylaw approval procedure is appropriate for the reasons stated below. We areremain committed to corporate governance policies and practices that enhance returns and that protect and are in the best interests of all shareholders. After careful consideration, our Board believesshareholders; and we believe that the existing special meeting threshold requirement is appropriate for the reasons stated below.proposed resolution would run counter to those goals. Our Board therefore opposes the proposed resolution to reduce our special meeting threshold requirementrequire that all Board-adopted Bylaw amendments be subject to non-binding shareholder vote and recommends that shareholders vote “AGAINST” this proposal:
Dana provides shareholders with a meaningful right to call a special meeting while also protecting the interests of Dana and all of our shareholders.
After careful consideration, our Board believes that the shareholder proposal to lower the threshold for holders of our common stock to call a special meeting is not in the best interests of Dana and its shareholders.
Dana already permits shareholders holding in the aggregate 20% or more of Dana’s capital stock entitled to vote generally in the election of directors to call special meetings, with procedural safeguards designed to protect the best interests of Dana and all of our shareholders, but which in our view are not overly restrictive and allow shareholders to exercise this right in a meaningful way. By way of comparison to market practices, approximately 84% of the S&P 500 companies that allow shareholders to call special meetings have a threshold that is equal to or higher than that of Dana. In addition, approximately 36% of S&P 500 companies do not permit shareholders to call special meetings at all. In sum, Dana’s shareholders have a right that is more expansive than most S&P 500 companies.
The Board believes that a 20% ownership threshold for the right to call special meetings strikes a reasonable and appropriate balance between enhancing shareholder rights and protecting against the risk that a small minority of shareholders, including shareholders with special interests, could call special meetings. Allowing a small minority of shareholders to call special meetings for any reason could be detrimental to the interest of a majority of our shareholders and other stakeholders. Special meetings of shareholders should be extraordinary events that only occur when fiduciary obligations or strategic concerns require that the matters to be addressed cannot wait until the next annual meeting.below reasons:
Dana’s ownership threshold avoids wastingOur corporate resources to address narrowly supported, special interests.
Our company and our Board take shareholder meetings seriously. As a result, our Board, officers and employees devote significant attention and resources whenever a shareholder meeting is called. If the shareholder meeting is devoted to issues that are not supported by a significant portion of our shareholder base, this meansgovernance policies already ensure that the Board is held accountable and that the shareholders can act if the Board takes actions with which they disagree.
Our Board is composed of active and effective directors. Eight of our officerscurrent nine directors are independent. We have an active shareholder engagement program that provides open channels of communication between company management, directors and employees must divert their focus from meeting our business objectives and enhancing shareholder valueshareholders.
Our commitment to these other issues. Our special meeting ownership threshold seeks to ensure that shareholders who have limited support for the action intended to be proposed do not disadvantage other shareholders by causing Dana to incur the unnecessary expense or disruption that can be associated with a special meeting, especially as there are other avenues for shareholders to communicate with the Board and the company outside of calling a special meeting.
Dana has an excellent record ingood corporate governance and responsiveness to shareholder concerns.concerns is exemplified by numerous shareholder-friendly structures designed to ensure that the Board is held accountable for its actions, and that shareholders may act and effect change if they so desire. As described in more detail in Dana’s governing documents, such structures include:
| ► | Annual director elections; |
| ► | The availability of proxy access for shareholder director nominations; |
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| ► | The ability for shareholders to amend Bylaws by majority approval; |
| ► | The ability of shareholders to call special meetings; and |
| ► | The lack of any supermajority vote requirements. |
Under the current regime, the shareholders would already be able to take any number of actions if the Board adopts a Bylaw provision that they disapprove, including submitting a proposal at an annual meeting (or calling a special meeting) and seeking approval to repeal or modify any Board-adopted Bylaw or holding directors responsible at annual elections of directors. We believe that these provisions ensure that the Board remains accountable to shareholders and gives shareholders impressive oversight over the Board while also giving the Board the ability and flexibility to act quickly if needed and balancing costs and benefits.
WeRequiring shareholder approval of every amendment to the Bylaws would be administratively burdensome and expensive.
Dana is a widely held public company. Therefore, it would be highly costly from an administrative standpoint if the Board were required to call a shareholder meeting as soon as practical after every Bylaw amendment. A non-binding vote would also generate little new value for shareholders. As stated above, if shareholders strongly disagree with a Bylaw amendment then they already have other avenues to express their dissatisfaction. However, this proposal would require a shareholder meeting to be called as soon as practical after any Bylaw amendment, even administrative amendments that are committed to sound corporate governance principles and long-term shareholder value as shown by:
The strong shareholder support for Dana’s directors in eachnot strongly opposed, creating a drain on company resources. This would not only be monetarily taxing on the company, but would also take up the time of the past 9 years.Board and distract it from effectively leading the company.
The proposal is inconsistent with Delaware law.
Our Board’s decisionThe vast majority of larger, public companies give their boards the ability to implement proxy accessamend Bylaws. Under Delaware law, in 2016.
Our Board’s decision to implement clawback provisionsparticular Section 109 of the Delaware General Corporation Law (the “DGCL”), a Delaware corporation may, in its compensation plans in 2008.
Our Board believes that Dana’s existing special meetingcertificate of incorporation, give its board of directors the ability to adopt, amend or repeal bylaws without shareholder right should be considered in the contextapproval. Pursuant to this provision, Article V of Dana’s overall corporate governance, including the shareholder rights available under its Bylawsour Third Amended and Restated Certificate of Incorporation applicable(the “Certificate of Incorporation”) so grants such ability to amend the Bylaws unilaterally to our Board without caveat, although as with all Board actions, the decision to adopt a Bylaw would continue to be subject to the Board’s fiduciary obligations under Delaware law.
As stated above, forcing the Board to call a non-binding shareholder vote could be time-consuming and expensive, which would significantly limit and undermine the Board’s ability to amend the Bylaws. Further, the requirement to submit all Board-adopted Bylaws to a precatory vote could impose a practical limitation on the ability of the company to rely on or otherwise utilize the Bylaw until the vote has occurred.
As stated above, any Bylaw that is inconsistent with law or the Certificate of Incorporation would be invalid under Section 109 of the DGCL. Because the proposal would impose significant restrictions on the Board’s ability to adopt Bylaws, which are not authorized by, and conflict with, Dana’s Certificate of Incorporation, it would be improper under Delaware law for the Board to adopt the Bylaw as mandated by the proposal.
For the foregoing reasons, it is our Board’s demonstrated commitment to shareholder engagement and responsiveness to shareholder concerns.belief that the proposal would not be in the best interest of shareholders or Dana.
DANA’S BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THIS SHAREHOLDER PROPOSAL.
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Dana mailedWe are pleased to take advantage of SEC rules that permit issuers to furnish their proxy materials to shareholders on the 2017internet. Shareholders may request a paper copy of this proxy statement and the 2019 Annual Report by:
Internet www.proxyvote.com
Telephone 1-800-579-1639
Email sendmaterial@proxyvote.com
When requesting materials, the control number found in the box marked by an arrow on the Notice and Access card will need to be provided.
A copy of Dana’s Annual Report on Form 10-K to shareholders, containingfor the year-ended December 31, 2019, including the consolidated financial statements, as filed with the Securities and other information about the operations ofExchange Commission, may be obtained without charge by sending a written request to Dana for the year ended December 31, 2017, to you with this Proxy Statement on or about March 22, 2018.Incorporated, Attention: Investor Relations, 3939 Technology Drive, Maumee, Ohio 43537.
The Board is not aware of any other additional matters to be presented at the 20182020 Annual Meeting of Shareholders. The Board does not currently intend to submit any additional matters for a vote at the 20182020 Annual Meeting of Shareholders, and no other shareholder has provided the required notice of the shareholder’sshareholder's intention to propose any matter at the 20182020 Annual Meeting of Shareholders. However, under Dana’sDana's Bylaws, the Board may, without notice, properly submit additional matters for a vote at the 20182020 Annual Meeting of Shareholders. If the Board does so, the shares represented by proxies in the accompanying form will be voted with respect to the matter in accordance with the judgment of the person or persons voting the shares.
By Order of the Board of Directors | |
| | |
| |
Douglas H. Liedberg | |
Senior Vice President, General Counsel, and Corporate Secretary |
March 22, 201812, 2020
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TABLE OF DANA INCORPORATEDCONTENTS
[Marked to show changes contemplated by Proposal IV]
ARTICLE I
The name of the corporation is DanaHoldingCorporationIncorporated(the “Company”).
ARTICLE II
The address of the Company’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of the Company’s registered agent at such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Company is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as amended (the “DGCL”).
ARTICLE IV
Section 1. Authorized Capital Stock. The total number of shares of capital stock that the Company is authorized to issue is 500,000,000 shares, consisting of (i) 450,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”), and (ii) 50,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”). Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of the Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of outstanding Voting Stock(as defined below)entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of the Common Stock or Preferred Stock voting separately as a class shall be required therefor.For the purposes of this Certificate of Incorporation, “Voting Stock” means capital stock of the Company of any class or series entitled to vote generally in the election of directors of the Company (each, a “Director”).
Section 2. Preferred Stock. The Preferred Stock may be issued in one or moreadditionalseries. The Board of Directors of the Company (the “Board”) is hereby authorized, by resolution or resolutions thereof, to issue the shares of Preferred Stock in such series and to fix from time to time before issuance the number of shares to be included in any such series and the designation, powers, preferences, and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, of such series. The authority of the Board with respect to each such series will include, without limiting the generality of the foregoing, the determination of any or all of the following:
(a) the number of shares of any series and the designation to distinguish the shares of such series from the shares of all other series;
(b) the voting powers, if any, and whether such voting powers are full or limited in such series;
(c) the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid;
(d) whether dividends, if any, will be cumulative or noncumulative, the dividend rate of such series, and the dates, conditions and preferences of dividends on such series;
(e) the rights of such series upon the voluntary or involuntary dissolution of, or upon any distribution of the assets of, the Company;
(f) the provisions, if any, pursuant to which the shares of such series are convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Company, at such price or prices or at such rate or rates of exchange and with such adjustments applicable thereto;
(g) the right, if any, to subscribe for or to purchase any securities of the Company;
(h) the provisions, if any, of a sinking fund applicable to such series; and
(i) any other designations, powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof;
all as may be determined from time to time by the Board and stated or expressed in the resolution or resolutions providing for the issuance of such Preferred Stock (collectively, a “Preferred Stock Designation”).Notwithstanding the foregoing, the Company shall be prohibited from issuingnon-voting equity securities to the extent, and only to the extent, required by Section 1123(a)(6) of the United States Bankruptcy Reform Act of 1978, as codified in Title 11 of the United States Code, 11 U.S.C. Sections101-1330, as in effect on the date hereof.
Section 3. Common Stock. Subject to the rights, if any, of the holders of any series of Preferred Stock to vote as a class without any other vote, the holders of Common Stock will be entitled to one vote on each matter submitted to a vote at a meeting of stockholders for each share of Common Stock held of record by such holder as of the record date for such meeting. Except as may be provided in a Preferred Stock Designation, to the fullest extent permitted by law, holders of Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to this Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any Preferred Stock Designation) or pursuant to the DGCL.
ARTICLE V
[RESERVED].
ARTICLE VI
The Board may make, adopt, amend, and repeal the Bylaws of the Company (the “Bylaws”).Notwithstanding anything contained in this Certificate of Incorporation or the Bylaws to the contrary, Bylaws 3, 6, 8, 12, 13, 14, 15, 18, 19 and 37 may not be amended or repealed by the stockholders, and no provision inconsistent therewith may be adopted by the stockholders, without the affirmative vote ofthe holders of at least 66 2/3% of the voting power of the outstanding Voting Stock(as defined below), voting together as a single class.For the purposes of this Certificate of Incorporation,“Voting Stock” means capital stock of the Company of any class or series entitled to vote generally in the election of directors of the Company (each, a“Director”).Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 66 2/3% of the Voting Stock, voting together as a single class, is required to amend or repeal, or to adopt any provision inconsistent with, this Article VI.
ARTICLEVIIVI
Section 1. Stockholder Action by Written Consent. Any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of stockholders of the Company and may not be effected by any consent in writing of such stockholders;provided,however, that any action required or permitted to be taken, to the extent expressly permitted by any Preferred Stock Designation, by the holders of such series of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares of the relevant class or series having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Preferred Stock entitled to vote thereon were present and voted and shall be delivered to the Company by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the Company’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by law, be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Company.
Section 2. Business to be Conducted at Stockholder Meetings. At any annual meeting or special meeting of stockholders of the Company, only such business will be conducted or considered as has been brought before such meeting in the manner provided in the Bylaws.
Section 3.Certain Amendments. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding Voting Stock, voting together as a single class, will be required to amend or repeal, or adopt any provision inconsistent with, this Article VII.
ARTICLEVIIIVII
Section 1. Number, Election and Term of Directors. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, the number of Directors comprising the Board will not be less than three nor more than 15 and will be fixed from time to time in the manner provided in the Bylaws. Directors will be elected at each annual meeting of stockholders, and each Director will hold office until the next annual meeting of stockholders and until such Director’s successor has been duly elected and qualified or until such Director’s earlier resignation, disqualification, removal or death. Election of Directors need not be by written ballot unless requested by the Chairman of the Board or by the holders of a majority of the Voting Stock present in person or represented by proxy at a meeting of the stockholders at which Directors are to be elected, or as otherwise provided in the Bylaws. If authorized by the Board, such requirement of written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.
Section 2. Nomination of Director Candidates. Advance notice of stockholder nominations for the election of Directors must be given in the manner provided in the Bylaws.
Section 3. Newly Created Directorships and Vacancies. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, newly created directorships resulting from any increase in the authorized number of Directors and any vacancies on the Board resulting from resignation, disqualification, removal, death or other cause will be filled solely by the affirmative vote of a majority of the remaining Directors then in office, even though less than
a quorum of the Board, or by a sole remaining Director. Any Director elected in accordance with the preceding sentence will hold office until such Director’s successor has been duly elected and qualified, or until such Director’s earlier resignation, disqualification, removal or death. No decrease in the number of Directors constituting the Board may shorten the term of any Director.
Section 4. Removal. Subject to the rights, if any, of the holders of any series of Preferred Stock to elect additional Directors under circumstances specified in a Preferred Stock Designation, any Director may be removed from office by the stockholders with or without cause and onlyin the manner provided in this Article VIII, Section 4. Atanyby stockholder action taken at anannual meeting or special meeting of the stockholders, the notice of which states that the removal of a Director or Directors is among the purposes of the meeting, the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding Voting Stock, voting together as a single class, may remove such Director or Directors.
Section 5.Amendment, Repeal, Etc. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding Voting Stock, voting together as a single class, is required to amend or repeal, or adopt any provision inconsistent with, this Article VIII.
ARTICLEIXVIII
No Director will be personally liable to the Company or its stockholders for monetary damages for a breach of fiduciary duty as a Director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended. Any repeal or modification of this ArticleIXVIIIwill not adversely affect any right or protection of a Director existing prior to such repeal or modification.
ARTICLEXIX
Section 1. Rule to Indemnification. Each person who was or is a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that the person is or was a Director or an officer of the Company, or such person, whether or not a Director or officer of the Company, is or was serving at the request of the Company as a director or officer of any other corporation, partnership, joint venture, trust or other enterprise, including, without limitation, any subsidiary or affiliate of the Company (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Company to the fullest extent permitted or required by the DGCL, as the same exists or may hereafter be amended, against all expenses (including attorneys’ fees), judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement actually and reasonably incurred by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 3 of this ArticleXIXwith respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.
Section 2. Right to Advancement of Expenses. The right to indemnification conferred in Section 1 of this ArticleXIXshall include the right to be paid by the Company the expenses (including, without limitation, attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an“Advancement of Expenses”); provided, however, that, if the DGCL so requires, an Advancement of Expenses shall be made only upon delivery to the Company of an undertaking (an“Undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a“Final Adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 2 or otherwise. The rights to indemnification and to the Advancement of Expenses conferred in Sections 1 and 2 of this ArticleXIXshall
be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director or officer and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.
Section 3. Right ofIndemnitee to Bring Suit. If a claim under Section 1 or 2 of this ArticleXIXis not paid in full by the Company within 60 calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be 20 calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit to the fullest extent permitted by law. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Company (including the Board, a Board committee, independent legal counsel or stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Company (including the Board, a Board committee, independent legal counsel or stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, under this ArticleXIXor otherwise shall be on the Company.
Section 4. Non-Exclusivity of Rights. The rights to indemnification and to the Advancement of Expenses conferred in this ArticleXIXshall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Company’s Certificate of Incorporation, Bylaws, any agreement, vote of stockholders or disinterested Directors or otherwise.
Section 5. Insurance. The Company may maintain insurance, at its expense, to protect itself and any person who is or was a Director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Company would have the power to indemnify such person against such liability under the DGCL.
Section 6. Indemnification of Employees and Agents of the Company. The Company may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the Advancement of Expenses to any employee or agent of the Company to the fullest extent of the provisions of this ArticleXIXwith respect to the indemnification and Advancement of Expenses of Directors and officers of the Company.
IN WITNESS WHEREOF, the undersigned, being a duly authorized officer of the Corporation named above, does hereby execute this Second Restated Certificate of Incorporation as of the29thdayofOctober, 2014 , 201 .
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THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR ALL OF THE NOMINEES FOR DIRECTOR IN PROPOSAL 1,FOR PROPOSALS 2, 3 AND 4 ANDAGAINST PROPOSAL 5.
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IN THEIR DISCRETION, PROXIES ARE AUTHORIZED TO VOTE FOR THE ELECTION OF A PERSON TO THE BOARD OF DIRECTORS IF ANY NOMINEE NAMED BECOMES UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, UPON ALL MATTERS INCIDENT TO THE CONDUCT OF THE MEETING, AND UPON SUCH OTHER BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER SPECIFIED BY THE UNDERSIGNED SHAREHOLDER. IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTEDFOR PROPOSALS 1, 2, 3 AND 4 ANDAGAINST PROPOSAL 5.
DANA INCORPORATED
2018 ANNUAL MEETING OF SHAREHOLDERS
Thursday, April 26, 2018
8:30 a.m., Eastern Time
Dana Incorporated World Headquarters
3939 Technology Drive
Maumee, Ohio 43537
The proxy statement and annual report to security holders
are available electronically atwww.dana.com/proxy.
If you plan to attend the Annual Meeting of Shareholders, you must pre-register.Please contact Dana’s Shareholder Services by e-mail at InvestorRelations@dana.com or by telephone at 1-800-537-8823 providing your name, address, telephone number. In addition to ownership confirmation, you must also present government-issued photo identification showing your name, address and signature for admission. Annual meeting pre-registration requests must be received by the end of business on Wednesday, April 25, 2018.
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This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned appoints Douglas H. Liedberg and Robert W. Spencer, Jr., or either of them, as Proxies, each with the power to appoint his substitute, as the case may be, and authorizes them to represent and vote, as designated on the reverse side, all the shares of common stock of Dana Incorporated held of record by the undersigned on February 26, 2018, at the Annual Meeting of Shareholders to be held on April 26, 2018, and at any adjournments or postponements of the meeting. In their discretion, the Proxies are authorized to vote for the election of a person to the Board of Directors if any nominee named becomes unable to serve or for good cause will not serve, upon all matters incident to the conduct of the meeting, and upon any other business that may properly come before the meeting.
DANA INCORPORATED
2018 ANNUAL MEETING OF SHAREHOLDERS
April 26, 2018
8:30 a.m., Eastern Time
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
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If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.