If you submit your vote before the Annual Meeting using any of the following methods, your shares of Common Stock will be voted as you have instructed:
| • | | By Internet: You can vote your shares using the internet atwww.proxyvote.com. You may access this website 24 hours a day, and voting is available through 11:59 p.m. Eastern Time on Wednesday, May 9, 2018. You will need the control number that was included in the notice that was mailed to you. The internet voting website has easy to follow instructions and allows you to confirm that the system has properly recorded your votes. If you hold shares in street name, please follow the internet voting instruction in the notice you received from your bank, broker, trustee, or other record holder. |
| • | | By Telephone: You can vote your shares by telephone. In order to vote your shares by telephone, please go towww.proxyvote.com and log in using the control number provided on your notice. At that site, you will be provided with a telephone number for voting. Alternatively, if you request paper copies of the proxy materials, your proxy card or voting instruction form will have a toll-free telephone number that you may use to vote your shares. Telephone voting is available through 11:59 p.m. Eastern Time on Wednesday, May 9, 2018.•Online: You can vote your shares at www.proxyvote.com. You may access this website 24 hours a day, and voting is available through 11:59 p.m. Eastern Time on Wednesday, May 5, 2021. You will need your 16-digit control number that was included in the notice that was mailed to you. The voting website has easy-to-follow instructions and allows you to confirm that the system has properly recorded your votes. If your shares are held beneficially, please follow the internet voting instructions in the notice you received from your bank, broker, trustee, or other record holder. •By Telephone: You can vote your shares by telephone. To vote your shares by telephone, please go to www.proxyvote.com and log in using your 16-digit control number provided on your notice. At that site, you will be provided with a telephone number for voting. Alternatively, if you request paper copies of the proxy materials, your proxy card or voting instruction form will have a toll-free telephone number that you may use to vote your shares. Telephone voting is available through 11:59 p.m. Eastern Time on Wednesday, May 5, 2021. When you vote by telephone, you will be required to enter your 16-digit control number, so please have it available when you call. As with internet voting, you will be able to confirm that the system has properly recorded your votes. •12-digit control number, so please have it available when you call. As with internet voting, you will be able to confirm that the system has properly recorded your votes. |
By Mail: If you choose to receive paper copies of the proxy materials by mail and you are a holder of record, you can vote by marking, dating, and signing your proxy card and returning it by mail in the postage-paid envelope provided to you. If you choose to receive paper copies of the proxy materials by mail, and you hold your shares in street name,beneficially, you can vote by completing and mailing the voting instruction form provided by your bank, broker, trustee, or holder of record.
Your vote is important, and we encourage you to vote promptly.
InternetOnline and telephone voting are available through 11:59 p.m. Eastern Time on Wednesday, May
9, 2018,5, 2021, for all shares entitled to vote.
You may also attend and vote your shares at the Annual Meeting. The company will be hosting the Annual Meeting
live via the Internetvirtually this
year.year, which we believe allows C.H. Robinson to be more inclusive and reach a greater number of our shareholders. To attend the
virtual meeting
via the Internet please visit www.virtualshareholdermeeting.com/
CHRW2018CHRW2021 and be sure to have the
16-digit control number provided to you on your Notice of Internet Availability of Proxy Materials or Proxy Card. If you are a beneficial shareholder (you hold your shares through a nominee, such as a broker), your nominee can advise you whether you will be able to submit voting instructions by telephone or via the internet. Submitting your proxy will not affect your right to vote
in person,electronically, if you decide to
login with your 16-digit control number and attend
the virtual only Annual Meeting. Shareholders logging into the Annual Meeting with their 16-digit control number will receive the same rights and opportunities to participate in the Annual Meeting as they would if the meeting was an in-person meeting. This includes having the ability to ask questions throughout the Annual Meeting and having those questions answered during the question and answer period at the end of the Annual Meeting, to the extent such questions are related to the business being conducted at the Annual Meeting.
Shareholders logging in with their 16-digit control number will be able to ask questions at any time during the Annual Meeting. Relevant questions related to business being conducted at the Annual Meeting will be answered following the adjournment of the Annual Meeting, and the company will prioritize questions that relate to the proposals considered at the Annual Meeting. If a shareholder asks general questions about C.H. Robinson, a representative of the company will respond to the shareholder following the adjournment of the Annual Meeting. Shareholders can learn more information about how to access the Annual Meeting by visiting www.virtualshareholdermeeting.com/CHRW2021.
What happens if I return my proxy without voting instructions?
If you do not return voting instructions with your proxy, your proxy will be voted:
•FOR the election of the ten director nominees named in this Proxy Statement;
•FOR approval of the compensation of our named executive officers; and
•FOR the ratification of Deloitte & Touche LLP, the member firm of Deloitte Touche Tohmatsu Limited, and their respective affiliates (collectively, “Deloitte & Touche”) as our independent registered public accounting firm for the fiscal year ending December 31, 2018; and2021.
AGAINST the shareholder proposal requesting the issuance of a report on assessing the feasibility of total greenhouse gas emissions disclosure and management.
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Generally, a shareholder who does not vote
in personthemselves or by proxy on a
director nominee or a proposal is not considered present for
the purpose of determining whether the
director nominee is elected, or
whether the proposal has been approved. Brokers cannot vote shares on their customers’ behalf on
“non-routine” “non-routine” proposals without receiving voting instructions from a customer but may vote shares on “routine” proposals without such instructions. The only routine proposal among the
fourthree listed above is the proposal to ratify the selection of Deloitte & Touche. If a broker does not receive voting instructions from its customer with respect to the other
non-routine proposals and is precluded from voting on those proposals, then a “broker
non-vote” occurs. If a broker returns a proxy indicating a lack of authority to vote on
non-routine proposals, the shares represented by the proxy will be deemed present at the meeting for purposes of determining a quorum, but not present for purposes of calculating the vote on the
non-routine proposals.
What is the effect of an abstention or broker
non-vote on each proposal?
With regard to
Regarding the proposals involving the election of directors
(proposal one) and the ratification of Deloitte & Touche
and the shareholder proposal:(proposal three): •If you abstain from voting on a director nominee or a proposal three, your shares will be considered present at the Annual Meeting for purposes of determining a quorum and calculating the shares present and entitled to vote on the director nominee or the proposal three and, accordingly, will have the same effect as a vote against the director nominee or proposal.proposal three.
•If you do not vote (or a brokernon-vote occurs) on a director nominee or a proposal three, your shares will not be deemed present for the purposes of calculating the vote on that nominee or proposal and will generally have no impact on determining whether the director nominee is elected, or the proposal three is approved.
With regard to
Regarding the advisory proposal on the compensation of our named executive
officers:officers (proposal two): •If you abstain or do not vote (or a brokernon-vote occurs) on this proposal two, the abstention or failure to vote will not have any impact on the outcome of this proposal.proposal two.
What is the required vote on each matter?
Pursuant to our Bylaws, each of the proposals in this Proxy Statement (other than the advisory vote on the compensation of our named executive officers) requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock
present in personvoted directly by the shareholder or by proxy at the Annual Meeting and entitled to vote, provided that a quorum is present at the Annual Meeting. Regarding the advisory vote on the compensation of our named executive officers, we will consider shareholders to have approved this proposal if the votes cast FOR the proposal exceed the votes cast AGAINST the proposal.
How do I revoke my proxy?
You may revoke your proxy and change your vote at any time before the voting closes at the Annual Meeting. You may do this by submitting a properly executed proxy with a later date, or by delivering a written revocation to the corporate secretary’s attention at the company’s address listed above, or during the Annual Meeting.
Shareholder Proposals and Other Matters
In November 2017, we received
C.H. Robinson did not receive written notice of
aany shareholder proposal and,
that shareholder proposal is described in detail within this Proxy Statement. Asas of the date of this Proxy Statement,
except for the shareholder proposal and the other matters described in this Proxy Statement, neither the company nor the Board of Directors knows of
any otherno business that will be presented for consideration at the Annual
Meeting.Meeting other than the matters described in this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the persons named in the proxy card will have discretionary authority to vote on such matters and will vote according to their best judgment.
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PROPOSAL ONE: ELECTION OF DIRECTORS
The director
There are ten nominees
offor election to the C.H. Robinson Board of Directors
for a one-year term, all of whom are
each running to be elected to serveone-year terms.current directors. The Board of Directors has set the number of directors constituting the Board of Directors at
nine.ten.
Scott P. Anderson, Robert
Ezrilov,C. Biesterfeld Jr., Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak, Brian P. Short, James B. Stake, and
John P. WiehoffPaula C. Tolliver are directors whose terms expire at the
20182021 Annual Meeting. On the recommendation of our Governance Committee, the Board of Directors has nominated
Ms.Directors Anderson, Biesterfeld, Crawford, Fortun, Gokey, Guilfoile,
and Ms. Kozlak,
and Messrs. Anderson, Ezrilov, Fortun, Gokey, Short, Stake, and
WiehoffTolliver for election to the Board of Directors at the Annual Meeting for terms of one year each. Each has indicated a willingness to serve. Mr.
GokeyCrawford is standing for election by the shareholders for the first time at
thethis Annual Meeting.
HeMr. Crawford was identified as a potential candidate for the Board of Directors by a third-party search firm and appointed by the Board of Directors on
October 17, 2017.John P. WiehoffSeptember 23, 2020.
Robert C. Biesterfeld Jr. and Ben G. Campbell will vote the proxies received by them for the election of
Ms.Directors Anderson, Biesterfeld, Crawford, Fortun, Gokey, Guilfoile,
and Ms. Kozlak,
and Messrs. Anderson, Ezrilov, Fortun, Gokey, Short, Stake, and
WiehoffTolliver unless otherwise directed. If any nominee becomes unavailable for election at the Annual Meeting,
John P. WiehoffMr. Biesterfeld and
Ben G.Mr. Campbell may vote for a substitute nominee at their discretion as recommended by the Board of Directors.
The Board of Directors has determined that all
of the
director nominees,directors, except for
John P. Wiehoff,Mr. Biesterfeld, are independent under the current standards for “independence” established by the Nasdaq Stock Market, on which C.H. Robinson’s stock is
listed.listed under the symbol “CHRW”. In connection with its evaluation of director independence, the Board of Directors considered the following transactions, all of which were entered into in the ordinary course of business:
For Mr. Anderson, goods and services provided in the ordinary course of business by the company to Patterson Companies, Inc., where Mr. Anderson was employed during 2017, and which were immaterial to either companies’ revenues or operations in the last three fiscal years.
•For Mr. Gokey, services provided in the ordinary course of business on behalf of the company by Broadridge Financial Solutions where Mr. Gokey is employed, and which were immaterial to either companies’the companies' revenues or operations in the last three fiscal years.
•For Mr. Short, services provided in the ordinary course of business by Admiral Merchants Motor Freight, Inc., (“AMMF”), an entity in which, together with a number of his family members, Mr. Short holds a controlling interest. In 2017,2020, AMMF provided services to C.H. Robinson as a contracted motor carrier. In addition, we receive health plan administration services and health claim stop loss insurance products from UnitedHealth Group Incorporated, of which Marianne D. Short, a sister of Mr. Short, was the chief legal officer during 2017. The amounts paid to UnitedHealth Group for such services and products were immaterial to either companies’ revenue or operations in the last three fiscal years.
The Board considered these relationships and their significance in determining that these directors are independent. Information concerning the nominees is below.
PROPOSAL ONE: ELECTION OF DIRECTORS
Director
Nominee Biographies and Qualifications
Scott P. Anderson
| | | | | |
Scott P. Anderson 51(Director Nominee) | Scott P. Anderson, 54 years old, has been a director of the company since 2012. He is2012, and currently serves as chairman of our Board of Directors. Mr. Anderson was a specialsenior advisor to Patterson Companies, Inc., (Nasdaq: PDCO) from June 2017 to June 2019 when he retired. He served as president and chief executive officer of Patterson Companies Inc. from 2010 to 2017. In April 2013, he was elected to the additional responsibility of chairman of the board. Mr. Anderson has worked with Patterson Companies since 1993. Prior to June 2006, when he became president of Patterson Dental Supply, Inc., Mr. Anderson held senior management positions in the dental unit, including vice president, sales and vice president, marketing. Mr. Anderson became a director of Patterson in June 2010. Mr. Anderson is a past chairman of the Dental Trade Alliance. |
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| Alliance, and has served on the board of the directors of the Ordway Theater. Mr. Anderson is a trustee of Gustavus Adolphus College. HeCollege, where he serves on the board of directorsas chairman of the Ordway Theater.board. Mr. Anderson earned his MBA from Northwestern University, Kellogg School of Management and a Bachelor of Artshis bachelor’s degree from Gustavus Adolphus College. |
| Mr. Anderson has significant public company senior management and executive experience through his service in several senior leadership positions at Patterson Companies. He also has public company board experience, having served as a member of Patterson’s Boardboard of Directors since 2010.directors from 2010 to 2017. Mr. Anderson also brings substantial sales and marketing expertise to the company, having served as Patterson’s vice president, sales and vice president, marketing. MrMr. Anderson meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
Robert Ezrilov
| | | | | |
Robert Ezrilov, 73C. Biesterfeld Jr. (Director Nominee) | Robert C. Biesterfeld Jr., 45 years old, has been the president and the chief executive officer of C.H. Robinson since May 2019 and has served as a director of the company since 1995.May 2019. Prior to becoming chief executive officer in May 2019, he held the positions of chief operating officer from March 2018 to May 2019, president of North American Surface Transportation from January 2016 to December 2018, vice president of Truckload from January 2014 to December 2015, and vice president of Temperature Controlled Transportation and Sourcing Services from January 2013 to December 2013. He began his career with Robinson Fresh in 1999. Currently, Mr. Ezrilov isBiesterfeld serves as a trustee of the Winona State University Foundation. Mr. Biesterfeld served on the Board of Directors for the Transportation Intermediaries Association (TIA) from June 2015 to May 2020. He graduated from Winona State University with a Bachelor of Arts. |
| Mr. Biesterfeld has over 20 years of experience with C.H. Robinson, including roles in North American Surface Transportation and Robinson Fresh and executive experience as chief operating officer and various other executive positions within the company. He has an employeeextensive and thorough understanding of BNG Management Company (an investment management company). From July 1997C.H. Robinson’s operations and the transportation industry in general. |
PROPOSAL ONE: ELECTION OF DIRECTORS
| | | | | |
Kermit R. Crawford (Director Nominee) | Kermit R. Crawford, 61 years old, joined C.H. Robinson as a director in 2020. Mr. Crawford previously served as president and chief operating officer at Rite Aid Corporation from October 2017 to April 2001,March 2019. Prior to joining Rite Aid, Mr. Crawford was an operating partner and advisor with the private equity firm Sycamore Partners from 2015 to 2017. He previously worked for Walgreens Co. from 1983 to 2014 where he wasserved in multiple roles of increasing responsibility, including executive vice president and president of Metacom, Inc. From April 1995 to July 1997,Pharmacy, Health, and Wellness and executive vice president and senior vice president of Pharmacy Services. Mr. Ezrilov was self-employed asCrawford is a business consultant. Prior to that,member of the board of directors at TransUnion (NYSE: TRU) and The Allstate Corporation (NYSE: ALL), where he was a partner with Arthur Andersen LLP, which he joined in 1966 after obtainingchairs the audit committee. He also serves on the Board of Directors of Northwestern Medicine North/Northwest Region and the Board of Trustees for The Field Museum. Mr. Crawford holds a Bachelor of Science in Business degreefrom The College of Pharmacy and Health Sciences at the University of Minnesota.Texas Southern University. |
| Mr. Ezrilov is our longest serving director and has developed a deep knowledge of our business. He alsoCrawford has significant managementexecutive and leadership experience as a former chief executive officerbased on his senior roles with Rite Aid Corporation and by trainingWalgreens. He has also developed expertise in the areas of strategic investment and digital transformation. Mr. Crawford has relevant public company board experience through his yearsmembership on the boards of service with Arthur Andersen LLP, he has extensive accounting experienceTransUnion and insight. Mr. Ezrilov meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. Mr. Ezrilov also has experience from previous service as a director of other public companies.The Allstate Corporation. |
| | | | | |
Wayne M. Fortun (Director Nominee) | Wayne M. Fortun, 6972 years old, has been a director of C.H. Robinson since 2001. Mr. Fortun joined Hutchinson Technology Inc. (NASDAQ: HTCH), a global technology manufacturer, in 1975 and until 1983, he held various positions in engineering, marketing, and operations. In 1983, he was elected director, president and chief operating officer of Hutchinson, Technology Inc., and in May 1996, he was appointed its chief executive officer and was appointed to the Board of Directors.officer. In October 2012, he was appointed chairman of the board and retired as CEO.chief executive officer. In October 2016, he retired as chairman of the board. |
| Through Mr. Fortun’s long tenure with Hutchinson, including as chief executive officer and member of the board, he possesses significant leadership and strategic planning skills. Because of Hutchinson’s worldwide footprint, Mr. Fortun has broad international business experience relevant to the company’s operations. He also has public company board experience through his former membership on the boards of Hutchinson and G&K Services, Inc. |
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| | | | | |
Timothy C. Gokey (Director Nominee) | Timothy C. Gokey, 5659 years old, joined C.H. Robinson as a director in 2017. Mr. Gokey currently serves as Presidentchief executive officer and Chief Operating Officera member of the board of directors at Broadridge Financial Solutions.Solutions (NYSE: BR), a corporate services company. He joined Broadridge Financial Solutions in 2010 as Chief Corporate Development Officer.chief corporate development officer. Mr. Gokey was promoted to Corporate Senior Vice Presidentcorporate senior vice president and Chief Operating Officerchief operating officer in 2012. He was appointed to Presidentpresident of Broadridge in September 2017. Prior to Broadridge, Mr. Gokey served as President,president, Retail Tax for H&R Block (NYSE: HRB) from 2004-20092004 to 2009 and also as a Partnerpartner at McKinsey & Company. Mr. Gokey earned a Doctorate in Finance and an undergraduate degree in Philosophy, Politics, and Economics from the University of Oxford, where he studied as a Rhodes Scholar. He is a graduate of Princeton University, where he earned a Bachelor of ArtsBA in Public Affairs and Management Engineering. |
| Through his service as president and chief operating officer of Broadridge Financial Solutions, Mr. Gokey has developed exceptional leadership and execution skills and has broad public company knowledge and expertise. He is also deeply involved in Broadridge’s international operations and technology organization. In his prior roles with Broadridge, as well as H&R Block and McKinsey & Company, Mr. Gokey has demonstrated expertise in the areas of mergers and acquisitions, sales and marketing, and other growth relatedgrowth-related activities. Mr. Gokey meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
PROPOSAL ONE: ELECTION OF DIRECTORS
| | | | | |
Mary J. Steele Guilfoile (Director Nominee) | Mary J. Steele Guilfoile, 6466 years old, joined C.H. Robinson as a director in 2012. Ms. Guilfoile is chairman of MG Advisors, Inc., a privately owned financial services merger and acquisition advisory and consulting services firm. Prior to joining MG Advisors in 2002, Ms. Guilfoile spent twelve years with JP Morgan Chase (NYSE: JPM) and its predecessor companies, Chase Manhattan Corporation and Chemical Banking Corporation, as executive vice president, corporate treasurer, and chief administrative officer for its investment bank, and various merger integration, executive management, and strategic planning positions. Ms. Guilfoile currently serves on the boards of The Interpublic Group of Companies (NYSE: IPG), where she is chairman of the Audit Committee, as well as Dufry AG (Six Swiss Exchange: DUFN) and Valley National BancorpPitney Bowes Inc. (NYSE: VLY), and Hudson, Ltd (NYSE: HUD)PBI), where, on each board, she serves as chairmanis a member of the Audit Committee. Ms. Guilfoile earned her Master of Business Administration from Columbia University Graduate School of Business, and a Bachelor of Scienceher bachelor’s degree from Boston College. |
| Ms. Guilfoile has significant experience and expertise in the areas of corporate mergers and acquisitions, business integration, and financing through her association with the investment banks of several large financial institutions. She also has public board experience through her membership on the boards of Interpublic, Hudson, and Valley National. Ms. Guilfoile meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission.Pitney Bowes. |
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| | | | | |
Jodee A. Kozlak (Director Nominee) | Jodee A. Kozlak, 5557 years old, joined C.H. Robinson as a director in 2013. Ms. Kozlak is the founder and CEO of Kozlak Capital Partners, LLC, a private consulting firm. Prior to this role, Ms. Kozlak served as the global senior vice president of human resources of Alibaba Group (NYSE: BABA) from February 2016 to November 2017. Prior to joining Alibaba Group, Ms. Kozlak was at Target Corporation (NYSE: TGT) beginning in January 2001, where she served in a variety of legal and leadership roles, including as the executive vice president and chief human resources officer of Target Corporation from March 2007 untilthrough February 2016. Prior to joining Target in 2001, Kozlak was a partner in the litigation practice of Greene Espel, PLLP, a Minnesota law firm. She also previously served as a senior associate at Oppenheimer Wolff & Donnellyfirm, and a senior auditor at Arthur Andersen & Co.,Co, both in Minneapolis. Ms. Kozlak serves as a board member of K.B. Home (NYSE: KBH), MGIC Investment Corp. (NYSE: MTG), and Leslies, Inc. (Nasdaq: LESL). She is a past presidentfellow of the board of directors of The Guthrie Theater, and a member of the board of overseers for the Carlson School of Management and theDistinguished Careers Institute (DCI) at Stanford Advisory Board on Longevity. SheUniversity, received a Bachelor of ArtsB.A. degree in Accounting from the College of St. Thomas and earned her Juris Doctor degree from the University of Minnesota. |
| Through her service as Target’shuman resources executive vice president of human resources,leadership at Target and Alibaba Group, Ms. Kozlak has developed significant knowledge and expertise in the area of human capital development. Ms. Kozlak’sstrategy, global operations, and digital transformation. Her experience with Target has also given her a deep understanding of executive compensation within a public company. |
PROPOSAL ONE: ELECTION OF DIRECTORS
| | | | | |
Brian P. Short (Director Nominee) | Brian P. Short, 6871 years old, has been a director of the company since 2002. He is chief executive officer of Leamington Co., a holding company with interests in transportation, community banking, agricultural production, and real estate. Leamington operates Admiral Merchants Motor Freight, Inc.,AMMF, St. Paul Flight Center, Inc., First Farmers & Merchants Banks, and Benson Parking Services, Inc. Mr. Short also serves as a legal mediator and previously served as a United States Magistrate. His community service has included service on the Board of Directors of Catholic Charities, St. Joseph’sJoseph's Home for Children, Saint Thomas Academy, Allina Hospitals and Clinics, and William Mitchell College of Law.Law, and the St. Francis Mission Foundation. He also serves on the Board of Directors of the Archdiocese of St. Francis Mission Foundation,Paul and Minneapolis, the Advisory Council to the Law School of the University of Notre Dame and the Board of Governors of the Law School of the University of St. Thomas. Mr. Short has an undergraduate degree in economics from the University of Notre Dame and is also a graduate of its law school. |
| Mr. Short has significant executive experience and, in particular, has experience in the trucking industry through his leadership position at Admiral Merchants Motor Freight,AMMF, a trucking and transportation services company. In addition, with Mr. Short’s legal background and experience, he provides valuable insight into the company’s enterprise risk management areas. Mr. Short meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
| | | | | |
James B. Stake (Director Nominee) | James B. Stake, 6568 years old, joined C.H. Robinson as a director in 2009. Mr. Stake retired from 3M CorporationCompany (NYSE: MMM) in 2008, serving most |
7
| recentlywhere he last served as executive vice president of 3M’s3M's Enterprise Services.Services, a shared services organization. He served in a variety of leadership positions at 3M, Company, leading global health care, industrial, and commercial businesses ranging in size from $100 million to over $3 billion. During his career he served over 12 years of foreign assignments in Europe and South America. In addition to his career at 3M, Mr. Stake serves as a board member and chairs the compensation committee for Otter Tail Corporation (NASDAQ:(Nasdaq: OTTR), is chairman of the board for privately held Ativa Medical Corp., and has taught as an adjunct professor at the University of Minnesota’s Carlson School of Management. Mr. Stake holds a Bachelor of Science in Chemical Engineering from Purdue University and a Master of Business Administration from the Wharton School at the University of Pennsylvania.
|
| Throughout his career at 3M Company, Mr. Stake gained extensive public company senior management experience at a large company that operates worldwide. In particular, Mr. Stake’s foreign leadership positions and his position with Enterprise Services, a shared services organization, provide valuable perspective for the company’sC.H. Robinson's international operations and its information technology systems. Mr. Stake also has prior public company board experience with Otter Tail. Mr. Stake meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
John P. Wiehoff
| John P. Wiehoff, | | | | | | | |
| 8 | | 2021 Proxy Statement |
PROPOSAL ONE: ELECTION OF DIRECTORS
| | | | | |
Paula C. Tolliver (Director Nominee) | Paula C. Tolliver, 56 years old, joined C.H. Robinson as a director in 2018. Ms. Tolliver previously served as corporate vice president and chief information officer at Intel Corporation (Nasdaq: INTC), a technology company, from August 2016 to September 2019. Prior to joining Intel in 2016, Ms. Tolliver served as corporate vice president of Business Services and chief information officer at The Dow Chemical Company (a wholly owned subsidiary of Dow, Inc. (NYSE: DOW)) from 2012 to 2016. Ms. Tolliver also led a services business for Dow Chemical, in addition to holding a variety of other roles in her 20 plus years with the company. She earned a bachelor’s degree in Business Information Systems and Computer Science from Ohio University. |
| Ms. Tolliver has been chief executive officersignificant experience and expertise in the areas of information technology and innovation. She also has demonstrated the ability to successfully lead a service business. Ms. Tolliver meets the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. |
BOARD VOTING RECOMMENDATION
| | |
The Board of Directors recommends a vote FOR the election of Scott P. Anderson, Robert C. Biesterfeld Jr., Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak, Brian P. Short, James B. Stake, and Paula C. Tolliver as directors of C.H. Robinson since May 2002, president of the company since December 1999, a director since 2001, and became the chairman in January 2007. Previous positions with the company include senior vice president from October 1998, chief financial officer from July 1998 to December 1999, treasurer from August 1997 to June 1998, and corporate controller from 1992 to June 1998. Prior to that, Mr. Wiehoff was employed by Arthur Andersen LLP. Mr. Wiehoff also serves on the Board of Directors of Polaris IndustriesWorldwide, Inc. (NYSE: PII) and Donaldson Company, Inc., (NYSE: DCI). He holds a Bachelor of Science degree from St. John’s University. |
| Mr. Wiehoff has more than 24 years with the company, including as its chief financial officer and as chief executive officer since 2002. He has deep and direct knowledge of the company’s business and operations. He also has significant public company board experience with Polaris and Donaldson. | | | | | | | |
| 2021 Proxy Statement | | 9 |
BOARD VOTING RECOMMENDATION
The Board of Directors recommends a vote FOR the election of Scott P. Anderson, Robert Ezrilov, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak, Brian P. Short, James B. Stake, and John P. Wiehoff as directors of C.H. Robinson Worldwide, Inc.
PROPOSAL ONE: ELECTION OF DIRECTORS
BOARD OF DIRECTORS GOVERNANCE MATTERS
The Board of Directors (or the “Board”) has a policy that all directors
and nominees nominated for election at the Annual Meeting are expected to attend the Annual Meeting. In
2017,2020, all of the director nominees
who were directors at that time attended the Annual Meeting.
8
During 2017,2020, the Board of Directors held foureight meetings. Each director holding office during the year attended at least 75 percent of the aggregate of the meetings of the Board of Directors (held during the period for which he or she had been a director) and the meetings of the Committeescommittees of the Board on which he or she served (held during the period for which he or she served)served on a committee).
Our Board of Directors has three committees: the Audit Committee, the Compensation Committee, and the Governance Committee. Currently, members and chairs of these committees are:
| | | | | | | | | | | |
Independent Directors | | Audit | | Compensation | | Governance |
Scott P. Anderson | | x | | | | Chair |
Robert Ezrilov
| | x | | x | | |
Wayne M. Fortun
| Kermit R. Crawford | | | Chair | x | x |
Timothy C. Gokey
| | x | Wayne M. Fortun | | x | x |
Timothy C. Gokey | x | x | |
| Mary J. Steele Guilfoile | | | | x | | x |
Jodee A. Kozlak | | | | x | Chair | x |
Brian P. Short | | x | | | | x |
James B. Stake | | Chair | x | |
| Paula C. Tolliver | x | x | |
Board Leadership Structure
Our
In 2019, the Board
amended our Corporate Governance Guidelines to provide that the Board will appoint a lead independent director any time that the chairman of
Directorsthe board is
led bynot independent, and it described the duties of the lead independent director. The Board appointed Scott P. Anderson to serve as lead independent director beginning in May 2019. In May 2020, Mr. John P. Wiehoff
who has been our president since 1999 and our chief executive officer since 2002. Mr. Wiehoff joinedretired from the Board of Directors
in 2001 and
was appointedMr. Anderson began serving as the chairman of the
board in 2007.As stated in our Corporate Governance Guidelines, the Board believes it is beneficial to have flexibility in allocating the responsibilities of the offices of chairman and of chief executive officer in the manner the Board determines to be in the best interests of the company. When the Board appointed Mr. WiehoffDirectors, as chairman, it considered numerous factors, including the benefits to the decision-making process with a leader who fills both offices, the significant operating experience and qualifications of Mr. Wiehoff, the importance ofin-depth C.H. Robinson knowledge to optimize board leadership, the size and complexity of our business, and the significant business experience and tenure of many of our directors.
The Board does not have a “lead director.” However, under our Corporate Governance Guidelines, the Chair of the Governance Committee is expected to preside at the executive sessions of the independent directors, coordinate and develop the agenda for those executive sessions, act as a liaison between the independent directors and management, and handle responses to shareholder inquiries that are directed to the independent directors. Mr. Anderson serveswell as the Chair of the Governance Committee.
Our Corporate Governance Guidelines provide that the chairman, in consultation with other Board members, sets the agenda for regular meetings of the Board, and the chair of each committee is responsible for the agendas for the meetings of the applicable committee. Directors and committee members are encouraged to suggest agenda items and may raise other matters at meetings.
We believe that our leadership structure supports the Board’s risk oversight function. Strong independent directors with significant tenure on the Board chair the committees most directly involved in the risk oversight function, there is open communication between management and the Board, and all directors are involved in the risk oversight function.
The Board is actively involved in the oversight of risks that could affect the company. This oversight is conducted primarily through the Audit Committee. The Audit Committee Charter establishes that one of the responsibilities of the Audit Committee is to review the
riskkey risks or exposures and assess the steps management
of the companyhas taken to minimize such risk on an annual basis.
To9
assist it in this oversight function,Management is responsible for our Enterprise Risk Management ("ERM") program, which includes key risk identification, mitigation efforts, day-to-day management, and communication to the vice president of risk ofAudit Committee. The ERM program allows the company presents ato evaluate risks and their potential impact to the company based on multiple factors, including but not limited to business conditions, company capabilities, and risk management update at eachtolerance. The ERM program is facilitated by the company's Internal Audit Department and consists of the quarterly Audit Committee meetings. In addition,identifying and classifying risks, enlisting risk owners, facilitating risk mitigation efforts, and communicating results to senior management and the Audit Committee. Changes in the company’s risk profile may also be identified through routine internal audit group conduct an annual enterprise risk assessmentaudits and ongoing discussions with members of the company, whichcompany's operational staff and management. A significant component of the ERM program is the annual risk assessment. The annual assessment includes interviews of various key personnel and risk owners within the company, andas well as with members of the Audit Committee. The results of the annual risk assessment are presented to the Audit
PROPOSAL ONE: ELECTION OF DIRECTORS
Committee. The Audit Committee provides periodic risk assessment updates to the Board and solicits input from the Board regarding the company’s risk management practices. In addition, the Compensation Committee periodically reviews the company’s compensation programs to ensure that they do not encourage excessive risk-taking. Additional review or reports on enterprise risks are conducted as needed by the Board or the committees.
All of our Audit Committee members are “independent” under applicable Nasdaq listing standards and Securities and Exchange Commission rules and regulations. Our Board of Directors has determined that all five members of the Audit Committee, Messrs. Anderson,
Ezrilov, Gokey, Short, and Stake,
and Ms. Tolliver, meet the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to the quality and integrity of the financial reports of the company. The Audit Committee has the sole authority to appoint, review, and discharge our independent auditors, and has established procedures for the receipt, retention, and response to complaints regarding accounting, internal controls, or audit matters. In addition, among other responsibilities in the Audit Committee Charter, the Audit Committee is responsible for:
| (1) | Reviewing the scope, results, timing, and costs of the audit with the company’s independent auditors and reviewing the results of the annual audit examination; |
| (2) | Assessing the independence of the outside auditors on an annual basis, including receipt and review of a written report from the independent auditors regarding their independence consistent with applicable rules of the Public Accounting Oversight Board; |
| (3) | Reviewing and approving in advance the services provided by the independent auditors; |
| (4) | Overseeing the internal audit function; |
| (5) | Reviewing the company’s significant accounting policies, financial results, and earnings releases and the adequacy of our internal controls and procedures; |
| (6) | Reviewing the risk management status of the company; and |
| (7) | Reviewing and approving related-party transactions. |
(1)Reviewing the scope, timing, and costs of the audit with the company's independent registered public accounting firm and reviewing the results of the annual audit;
(2)Assessing the independence of the outside auditors on an annual basis, including receipt and review of a written report from the independent auditors regarding their independence consistent with applicable rules of the Public Company Accounting Oversight Board;
(3)Reviewing and approving in advance the services provided by the independent auditors;
(4)Overseeing the internal audit function;
(5)Reviewing the company’s significant accounting policies, financial results, and earnings releases and the adequacy of our internal controls and procedures;
(6)Reviewing the risk management status of the company, including cybersecurity risks; and
(7)Reviewing and approving related-party transactions.
The Audit Committee held eight meetings during 2017.2020. The Audit Committee has engaged Deloitte & Touche LLP as the independent auditor for fiscal year 20182021 and is recommending that the company’s shareholders ratify this appointment at the Annual Meeting. The report of the Audit Committee is found on page 3844 of this Proxy Statement.
The Compensation Committee
All of our Compensation Committee members are “independent” under applicable Nasdaq listing standards and Internal Revenue Service and Securities and Exchange Commission rules and regulations. The Compensation Committee has oversight responsibilities relating to executive compensation, employee compensation and benefits programs and plans, and
succession and leadership development. In addition, among other responsibilities in the Compensation Committee Charter, the Compensation Committee is responsible for:
| (1) | Reviewing the performance of the chief executive officer; |
| (2) | Determining all elements of the compensation and benefits for the chief executive officer and other executive officers of the company; |
| (3) | Reviewing and approving the company’s compensation program, including equity-based plans, for management employees generally; |
10
| (4) | Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and |
| (5) | Reviewing executive officers’ employment agreements, separation and severance agreements, change in control agreements, and other compensatory contracts, arrangements, and benefits. |
(1)Reviewing the performance of the chief executive officer;
(2)Determining all elements of the compensation and benefits for the chief executive officer and other executive officers of the company;
(3)Reviewing and approving the company’s compensation program, including equity-based plans, for management employees generally;
(4)Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and
(5)Reviewing executive officers’ employment agreements; separation and severance agreements; change in control agreements; and other compensatory contracts, arrangements, and benefits.
The Compensation Committee held foureight meetings during 2017.2020. See 20172020 Compensation Discussion and Analysis beginning on page 14 including16 including Section VI, Compensation Process, beginning on page 22,26, for a discussion of the role
PROPOSAL ONE: ELECTION OF DIRECTORS
played by our chief executive officer in compensation decisions. The Compensation Committee report on executive compensation is found on page 34 page 39 of this Proxy Statement.
All members of our Governance Committee are “independent” under applicable Nasdaq listing standards. The Governance Committee serves in an advisory capacity to the Board of Directors on matters of organization and the conduct of Board activities. Among other responsibilities in the Governance Committee Charter, the Governance Committee is responsible for:
| (1) | Periodically reviewing and making recommendations to the Board as to the size and composition of the Board and criteria for director nominees; |
| (2) | Identifying and recommending candidates for service on the Board; |
| (3) | Reviewing and revising the company’s Corporate Governance Guidelines, including recommending any necessary changes to the Corporate Governance Guidelines to the Board; |
| (4) | Leading the Board in an annual review of the performance of the Board and the Board committees; |
| (5) | Making recommendations to the Board regarding Board committee assignments; |
| (6) | Making recommendations to the Board on whether each director is independent under all applicable requirements; |
| (7) | Making recommendations to the Board with respect to the compensation ofnon-employee directors; and |
| (8) | Periodically reviewing with the company’s chief legal officer developments that may have a material impact on the company’s corporate governance programs, including related compliance policies. |
(1)Periodically reviewing and making recommendations to the Board as to the size, diversity, and composition of the Board and criteria for director nominees;
(2)Identifying and recommending candidates for service on the Board;
(3)Reviewing and revising the company’s Corporate Governance Guidelines, including recommending any necessary changes to the Corporate Governance Guidelines to the Board;
(4)Leading the Board in an annual review of the performance of the Board and the Board committees;
(5)Making recommendations to the Board regarding Board committee assignments;
(6)Making recommendations to the Board on whether each director is independent under all applicable requirements;
(7)Making recommendations to the Board with respect to the compensation of non-employee directors;
(8)Periodically reviewing with the company’s chief legal officer developments that may have a material impact on the company’s corporate governance programs, including related compliance policies; and
(9)Reviewing, at least annually, the company’s policies, practices, performance, disclosures, and progress toward goals with respect to significant issues of Environmental, Social, and Governance, including the alignment of such efforts with the Company’s overall strategy.
The Governance Committee considers Board of Director nominees recommended by shareholders. The process for receiving and evaluating these nominations from shareholders is described below under the caption “Nominations.”
The Governance Committee held
fivethree meetings during
2017.2020.
The charters for each of the Committees of the Board of Directors, our Corporate Governance Guidelines, and our company’s Code of Ethics, which are all a part of our Corporate Compliance Program, are posted under the Governance section of the Investors page of our website at
www.chrobinson.com. www.chrobinson.com.
Shareholder Communications with Board
C.H. Robinson shareholders and other interested parties may send written communications to the Board of Directors or to any individual director by mailing it to
the C.H. Robinson Worldwide, Inc., Board of Directors, c/o C.H. Robinson
corporate secretary,Corporate Secretary, 14701 Charlson Road,
Suite 1200, Eden Prairie, MN 55347. These communications will be compiled by the corporate secretary and periodically submitted to the Board or individual director.
The Governance Committee considers director nominee recommendations from a wide variety of sources, including members of the Board of Directors, business contacts, community leaders, and members of
11
management. The Governance Committee will also consider shareholder recommendations for director nominees using the same selection criteria and qualifications as nominees identified by other sources, as described below. The Governance Committee may also engage search firms to assist in the director recruitment process.
The Governance Committee determines the selection criteria and qualifications of director nominees based upon the needs of the company. The Board of Directors believes that the directors should possess the highest personal and professional ethics and integrity and be committed to representing the long-term interests of the company’s shareholders. Preferred qualifications also include current or recent experience as a chief executive officer or senior leadership and expertise in a particular business discipline. Directors should be able to provide insights and practical wisdom based on their experience and expertise. While theThe company does not have a policy regarding the consideration ofis committed to diversity in identifying director nominees, the company’sand inclusion. Corporate Governance Guidelines
PROPOSAL ONE: ELECTION OF DIRECTORS
provide, and the Governance Committee believes, that creating a board with a diversity of
gender, ethnicity, background, talent, experience, accomplishments, and perspectives is in the best interests of the company and our shareholders. The company is committed to considering candidates for the Board, regardless of gender, ethnicity, and national origin. Any search firm retained to assist the Governance Committee in seeking director candidates
will beis instructed to consider these commitments.
Shareholders who would like to directly nominate a director candidate must give written notice to the company’s corporate secretary, either by personal delivery or by United States mail, at the following address: 14701 Charlson Road, Eden Prairie, MN 55347. The shareholder’s notice must be received by the corporate secretary no later than (a) 90 days before the anniversary date of the previous year’s Annual Meeting or (b) the close of business on the tenth day following the date on which notice of a special meeting of shareholders for election of directors is first given to shareholders.
Accordingly, nominations for the 2022 Annual Meeting must be received by February 5, 2022, unless the alternative deadline is triggered. For each proposed nominee, the shareholder’s notice must comply with and include all information that is required to be disclosed under our Bylaws, any applicable Securities and Exchange Commission rules and regulations, and any applicable laws. The written notice must also include a written consent of the proposed nominee, agreeing to stand for election if nominated by the Governance Committee, and to serve as a director if appointed by the Board of Directors. The shareholder’s notice must also include:
| (1) | The name and address of the shareholder making the nomination; |
| (2) | The number of C.H. Robinson shares entitled to vote at the meeting held by the shareholder; |
| (3) | A representation that the shareholder is a holder of record of C.H. Robinson Common Stock entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person named in the notice; and |
| (4) | A description of all arrangements or understandings between the shareholder and each nominee. |
(1)The name and address of the shareholder making the nomination;
(2)The number of C.H. Robinson shares entitled to vote at the meeting held by the shareholder;
(3)A representation that the shareholder is a holder of record of C.H. Robinson Common Stock entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person named in the notice; and
(4)A description of all arrangements or understandings between the shareholder and each nominee.
We also provide shareholders with a “proxy access” right that entitles shareholders meeting certain eligibility requirements to include nominees for director in our proxy statement. The proxy access right entitles a shareholder, or group of up to 20 shareholders, owning at least 3 percent of our outstanding shares of Common Stock continuously for at least three years to nominate and include in our proxy statement director nominees constituting up to the greater of two individuals or 20 percent of the Board of Directors. The shareholder’s notice must be delivered to the company’s corporate secretary as set forth above and must be received by the corporate secretary no earlier than 150 days, and no later than 120 days, before the anniversary date of the mailing of the previous year’s proxy statement, unless an alternative deadline under our Bylaws is triggered. Accordingly, nominations for inclusion in our proxy statement for the 2022 Annual Meeting must be received no earlier than October 24, 2021, and no later than November 23, 2021, unless an alternative deadline is triggered. In addition, the shareholder’s notice must comply with the information requirements described above for other direct nominations of director candidates, as well as the additional notice and information requirements described in our Bylaws.
The Governance Committee initially evaluates a prospective nominee based on his or her resume and other background information that has been provided to the committee. A member of the committee will contact for further review those candidates whom the committee believes are qualified, who may fulfill a specific need of the Board of Directors, and who would otherwise best
make a contributioncontribute to the Board of Directors. Based on the information the Governance Committee learns during this process, it determines which nominee(s) to recommend to the Board of Directors to submit for election. The Governance Committee uses the same process for evaluating all nominees, regardless of the source of the nomination.
No candidates for director nominations were submitted to the Governance Committee by any shareholder for the
20182021 Annual Meeting. Any shareholder interested in presenting a nomination for consideration by the Governance Committee prior to the
20192022 Annual Meeting should do so as early as possible, to provide adequate time to consider the nominee and comply with our Bylaws.
Compensation of Directors
In
2017,2020, each independent director of C.H. Robinson was
paideligible to receive an annual retainer of
$80,000 and no$100,000. The Board of Directors approved a 50% reduction in base annual retainer payments from May 1, 2020 through July 31, 2020; these reductions were realized between April 1, 2020 through June 30, 2020. These changes were enacted as part of cost savings measures in response to the COVID-19 pandemic. Directors do not receive additional compensation for each meeting
fees.they attend. The Audit Committee chair received an additional annual retainer of $30,000, and the chairs of the
12
Governance and Compensation Committees each received an additional annual retainer of $20,000. Other members of the Audit Committee received an additional annual retainer of $10,000,$12,500, and other members of the Governance and
PROPOSAL ONE: ELECTION OF DIRECTORS
Compensation Committees received additional annual retainers of $5,000.$7,500. The lead independent director received an additional annual retainer of $25,000 and the independent chairman of the Board received an additional annual retainer of $100,000. Retainers are paid in quarterly installments, at the end of each calendar quarter. Before the retainers are earned, the directors may elect to receive all or a portion of their retainers in cash, stock, or restricted stock units that are immediately vested and are payable to the directors after their service on the Board of Directors has ended. Directors are required to own a minimum of five times their annual Board retainer in company stock no later than five years after joining the Board of Directors. We base the stock ownership requirements on all shares of company stock deemed owned by a director, which includes vested stock options, vested and unvested restricted stock units, and stock beneficially owned by the director, including owned in a trust, by a spouse, or by dependent children for our directors.
All directors are in compliance with the company stock ownership requirements.
In 2017,2020, the Board of Directors granted each director a fully vested restricted stock unit award valued at $135,000,$150,000, deliverable after leaving the Board of Directors. Restricted stock unit awards are granted in quarterly installments, at the end of each calendar quarter.C.H. Robinson also reimbursesnon-employee directors for reasonable expenses incurred in attending Board of Directors meetings and for expenses incurred in obtaining continuing education related to service on our Board of Directors.Directors who are also employees of C.H. Robinson are not separately compensated for beingserving as a member of the Board of Directors.
2017
2020 Director Compensation Table
| | | | | | | | | | | | |
Name | | Fees
Earned
or
Paid in
Cash | | | Stock
Awards
(1) | | | Total | |
Scott P. Anderson | | $ | 105,000 | | | $ | 135,000 | | | $ | 240,000 | |
Robert Ezrilov | | | 95,000 | | | | 135,000 | | | | 230,000 | |
Wayne M. Fortun | | | 105,000 | | | | 135,000 | | | | 240,000 | |
Timothy C. Gokey | | | 23,750 | (2) | | | 33,750 | | | | 57,500 | |
Mary J. Steele Guilfoile | | | 95,000 | (3) | | | 135,000 | | | | 230,000 | |
Jodee A. Kozlak | | | 90,000 | (2) | | | 135,000 | | | | 225,000 | |
Brian P. Short | | | 95,000 | (2) | | | 135,000 | | | | 230,000 | |
James B. Stake | | | 115,000 | (4) | | | 135,000 | | | | 250,000 | |
| | | | | | | | | | | | | | | | | |
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | Aggregate Number of Shares Outstanding as of December 31, 2020(3) |
| Scott P. Anderson | $ | 193,790 | | | $ | 150,000 | | $ | 343,790 | | 20,333 |
| Kermit R. Crawford | 28,750 | | (4) | 37,500 | | 66,250 | | 399 |
| Wayne M. Fortun | 106,868 | | (5) | 150,000 | | 256,868 | | 41,750 |
| Timothy C. Gokey | 107,500 | | (7) | 150,000 | | 257,500 | | 9,584 |
| Mary J. Steele Guilfoile | 102,500 | | | 150,000 | | 252,500 | | 15,147 |
| Jodee A. Kozlak | 110,632 | | (6) | 150,000 | | 260,632 | | 16,074 |
| Brian P. Short | 107,500 | | (7) | 150,000 | | 257,500 | | 63,538 |
| James B. Stake | 125,000 | | (8) | 150,000 | | 275,000 | | 24,018 |
| Paula C. Tolliver | 107,500 | | (7) | 150,000 | | 257,500 | | 6,872 |
| John P. Wiehoff | 176,923 | | (9) | — | | 176,923 | | 0 |
(1) | The dollar value reflected in this column was awarded as fully vested restricted stock units of the company. Shares equal to the of number restricted stock units will be distributed to the director after his or her board membership terminates. | | | | |
| |
(1)The Board of Directors approved a 50% reduction in base cash retainer payments from May 1, 2020 through July 31, 2020; these reductions were realized between April 1, 2020 through June 30, 2020.
(2)The dollar value reflected in this column was awarded as fully vested restricted stock units of the company. Shares equal to the number of restricted stock units will be distributed to the director after his or her board membership terminates.
(3)Includes fully vested restricted stock units and directly owned shares.
(4)Mr. Crawford was appointed to the Board of Directors on September 23, 2020.
(5)Mr. Fortun served as chair of the Compensation Committee until the Annual Meeting on May 7, 2020.
(6)Ms. Kozlak was appointed chair of the Compensation Committee following the Annual Meeting on May 7, 2020.
(7)The director has elected to receive the dollar value of these fees in restricted stock units of the company. Shares equal to the number of restricted stock units will be distributed after termination of board membership.
(8)Mr. Stake has elected to receive one half of the dollar value of these fees in restricted stock units of the company and the balance of his fees paid in cash for 2020. Shares equal to the number of restricted stock units will be distributed after termination of board membership.
(9)Mr. Wiehoff, who held the position of chairman of the Board of Directors until May 7, 2020, received director compensation paid in cash related to his service as chairman in 2020.
(2) | The director has elected to receive the dollar value of these fees in restricted stock units of the company. Shares equal to the number of restricted stock units will be distributed after termination of Board membership. | | | | | | | |
| 14 | | 2021 Proxy Statement |
(3) | The director has elected to receive one half of their Board retainer in fully taxable unrestricted shares of company stock and the balance of his or her Board and committee retainers in cash. |
(4) | The director has elected to receive one half of the dollar value of these fees in restricted stock units of the company. Shares equal to the number of restricted stock units will be distributed after termination of Board membership. |
PROPOSAL ONE: ELECTION OF DIRECTORS
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are
Kermit R. Crawford, Wayne M. Fortun,
Robert Ezrilov,Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak
and(Chair), James B.
Stake.Stake, and Paula C. Tolliver. The Compensation Committee members have no interlocking relationships requiring disclosure and are deemed independent under the rules of the Securities and Exchange Commission.
13
2017
2020 EXECUTIVE COMPENSATION
DISCUSSION AND ANALYSIS 2020 Compensation Discussion and AnalysisThe following Compensation Discussion & Analysis (“CD&A”) describes the background, objectives, and structure of our executive compensation programs. This CD&A is intended to be read in conjunction with the tables beginning on page 27, which pages 28 and 33, which provide further historical compensation information for the following Named Executive Officers (“NEOs”): John P. Wiehoff,•Robert C. Biesterfeld Jr., President and Chief Executive Officer
Andrew C. Clarke,•Michael P. Zechmeister, Chief Financial Officer
| • | | Robert C. Biesterfeld, Chief Operating Officer and President of North America Surface Transportation1 |
Chad M. Lindbloom,•Christopher J. O’Brien, Chief InformationCommercial Officer
•Mac S. Pinkerton, President of North American Surface Transportation ("NAST")
•Michael J. Short, President of Global Freight Forwarding
Compensation Philosophy and Structure
Our overall
We believe our compensation philosophy
remainsand design are well aligned with
the interests of our shareholders, as well as our performance culture, growth strategy, and desire
and ability to attract and retain high-quality executives.
•Pay for performance;
•Reward profitable long-term growth; and
•Align the interests of management with our shareholders.
The company reviews general industry survey data
preparedprovided by an independent compensation consultant to assess market competitiveness of the components of NEO compensation, including
the appropriate mix of cash and equity. The company also relies on broader survey data to assess market competitiveness of executive compensation components.
Internal equity is an important and necessary consideration in valuing jobs. Individual pay decisions are made based on a variety of factors, such as company, business unit and individual performance, scope of responsibility, critical needs and skills, leadership potential, and succession planning.Compensation component considerations
2020 EXECUTIVE COMPENSATION
Our compensation components are as follows:
| • | | | | | | | | | | |
| Element | Performance Period | Objective | Performance Measured/
Rewarded |
Base salaries: Base salaries are market-based, generally reflectingSalary (Fixed) | Annual | Attracts, retains, and rewards top talent and reflects a NEOs responsibilities, performance, leadership potential, succession planning, and relevant market data. | Provides NEOs with fixed compensation that acts as a vehicle to attract and retain. Rewards executives for key performance and contributions. Generally reflects the 25th-50th25th to 50th percentile offor our defined market for talent. |
| Annual Cash Incentive (Variable) | •Annual | Motivates and rewards our executives for the achievement of financial performance and certain strategic goals for the company related to its transformation. | AnnualIn 2020, the annual cash incentive compensation: Annual incentive compensation for 2017 was based on the following: •CEO - Target opportunity was 140 percent of base salary and was based on enterprise adjusted pre-tax income ("APTI"). APTI is defined as pre-tax income, adjusted to exclude executive bonuses and unusual or extraordinary items. •Operating Executive Officers - Target opportunity varied from 40 percent to 80 percent of base salary and was based on the APTI of the business division and/or region of responsibility for the executive, enterprise APTI, and management business objectives (MBOs). •Administrative Officers - Target opportunity varied from 65 percent to 85 percent of base salary and was based on enterprise APTI and MBOs. •For all executive officers the maximum annual incentive that may be paid is two times the planned annual incentive at target. •Threshold and maximum performance goals for NEOs were set at 70 percent and 120 percent of the relevant APTI targets, respectively. |
For our CEO, the annual incentive was 100 percent of base salary at target, and was based on enterprise adjustedpre-tax income (“APTI”). APTI is defined aspre-tax income, adjusted to exclude executive bonuses and unusual or extraordinary items.
For operating executive officers, the annual incentive varied from 25 percent to 80 percent of base salary at target, and is tied to the APTI of the business division and/or region of responsibility for the executive.
For administrative executive officers, the annual incentive at target varied between 50 percent and 70 percent of base salary, and is based on enterprise APTI.
1Performance Based
Restricted Stock (Variable) | Robert C. Biesterfeld was appointedLong-Term | Aligns the interests of management and shareholders. | •Accounts for 50% of NEOs' equity grant value. •Performance shares vest over five years based on company performance. •Performance vesting is constructed in a manner as to Chief Operating Officer asvest 0 to 100 percent of March 1, 2018.the award based on year-over-year percentage increase (or decrease) in diluted earnings per share, plus ten percentage points. •The performance shares have a two year delayed delivery following the five year vesting period. |
14
The maximum annual incentive that may be paid is two times the executive’s planned annual incentive at target.
Threshold and maximum performance goals for NEOs were set at 70 percent and 120 percent of the relevant APTI targets, respectively.
| Stock Options (Variable) | •Long-Term | Supports the achievement of strong share price growth. | Equity compensation: Restricted stock awards continue to be performance-based. Beginning with grants issued in 2015, incentive stock options now•Accounts for 50% of NEOs' equity grant value. •Options vest ratably over five years. We believe options are an inherently performance-based instrument because stock price appreciation must occur for the value to be delivered. Time-based vesting allows flexibility and liquidity for our executives not present in our performance-based share awards. It is also more consistent with market-based practices and therefore, supports our philosophy of providing compensation that is necessary to attract, retain, and motivate high-quality executives. |
Equity
Other Compensation considerations are as follows:
•Mix of fixed and variable compensation:The mix of pay between fixed and variable compensation, is approximately 50and the portion of variable compensation linked to performance vesting and the value of company common stock, are consistent with our philosophy of strong linkage between pay and performance. It also puts a substantial percentage of our executives’ compensation at risk. As reflected in the gray components on the following charts, 85 percent of Mr. Biesterfeld’s 2020 target total compensation was variable or “at-risk,” and 72 percent of the value of2020 target total direct compensation (salary plus target annual incentive plus grant date fair value of equity awards) for our executives, and 62 percent of target total direct compensation for our CEO. Because equity compensation is a significant component, it is important that our equity compensation instruments are consistent with market practices and viewed as competitive for top executive talent.other NEOs was variable or “at-risk.” | • | | Mix of fixed and variable compensation: The mix of pay between fixed and variable compensation, and the portion of variable compensation linked to performance vesting and the value of company common stock, are consistent with our philosophy of strong linkage between pay and performance. It also puts a substantial percentage of our executives’ compensation at risk. As reflected in the following charts, 83 percent of Mr. Wiehoff’s 2017 target total direct compensation was variable or“at-risk,” and 69 percent of the 2017 target compensation for our other NEOs was variable or“at-risk.” |
| | | | |
 | |  |
| • | | Stock ownership guidelines: As noted above, equity is a significant portion of total executive compensation, and our robust stock ownership guidelines reinforce our performance-based culture and the alignment of management and shareholder interests. Equity ownership guidelines for executive officers are as follows: |
2020 EXECUTIVE COMPENSATION
•Stock ownership guidelines:To ensure alignment with our shareholders, the Compensation Committee has established stock ownership guidelines for our executive officers. The Compensation Committee believes that linking a significant portion of the executive officer’s personal holdings to the company’s success aligns our executive interests with that of our shareholders. Therefore, executive officers are expected to own a significant amount of C.H. Robinson stock. The Compensation Committee has established stock ownership guidelines for our executive officers based on all shares of company stock deemed owned by an executive officer, which includes vested stock options, stock held in the company 401(k) plan, vested and unvested performance shares and restricted stock units. It also includes stock beneficially owned by the officer, including owned in a trust, by a spouse, or by dependent children. Equity ownership guidelines for executive officers are as follows:
•CEO: 6Six times base salary
•Other NEOs: 3Three times base salary
•Other direct reports to the CEO: 3Three times base salary
It is expected that new or recently promoted members of the executive team will achieve the appropriate level of ownership within five years of their appointment.
2017 All NEOs are in compliance with the company stock ownership requirements.
2020 EXECUTIVE COMPENSATION
2020 C.H. Robinson Performance Highlights and Incentive Payouts
In 2017, challenging
The following summarizes C.H. Robinson's performance and select 2020 year-over-year operating comparisons to 2019:
•Total revenues increased 5.9 percent to $16.2 billion, driven by higher pricing in ocean and air freight services and contributions from the acquisition of Prime Distribution Services ("Prime Distribution").
•Adjusted gross profits(1) decreased 6.7 percent to $2.4 billion, primarily driven by lower adjusted gross profit margins in truckload services, partially offset by contributions from the Prime Distribution acquisition and higher adjusted gross profits in air freight and ocean services.
•Personnel expenses decreased 4.3 percent to $1.2 billion, driven primarily by cost saving initiatives, including a 2.8 percent decrease in average headcount, the elimination of non-essential travel, and the temporary suspension of the company match to retirement plans for U.S. and Canadian employees, in addition to lower incentive compensation.
•Selling, general, and administrative (“SG&A”) expenses decreased 0.3 percent to $496.1 million, primarily due to significantly lower travel expenses, partially offset by the ongoing expenses from the Prime Distribution acquisition.
•Income from operations totaled $673.3 million, down 14.8 percent from last year due to a decline in adjusted gross profits. Adjusted gross profit margin of 27.9 percent decreased 260 basis points.
•Diluted earnings per share (EPS) decreased 11.2 percent to $3.72.
•Cash flow from operations decreased 40.2 percent to $499.2 million.
(1)Adjusted gross profit is a non-GAAP measure. Additional information about adjusted gross profit, including a reconciliation to gross profit, is available in our annual report on Form 10-K for the year ended December 31, 2020.
The North American surface transportation market conditions impacted our results. We had volumeexperienced significant volatility in freight volumes and costs over the duration of 2020 as a result of the COVID-19 pandemic. The impact on the market varied significantly depending on the customer size, the industry, and the severity of the restrictions in place to control the outbreak. Certain industries, such as retail, saw periods of elevated demand while other industries, especially smaller customers in those industries, experienced extended periods of demand, and production well below historical levels. The impact of reduced consumer demand and production, in addition to driver shortages, resulted in reduced carrier capacity, most notably in truckload, as many carriers either reduced lanes or exited the market entirely. This reduced carrier capacity caused routing guides to rapidly degrade and more loads moved to the spot market, driving sharp increases in alltransportation costs, most significantly in the second half of our service lines, but2020.
The global forwarding market also experienced
decreased transportation net revenue margins, driven by increasessignificant volatility resulting from the COVID-19 pandemic. The air freight market experienced a significant decline in
transportationCEO 2017 TARGET COMPENSATION Base Salary 17% Non-Equity Incentive 21% Equity Incentive 62% ISOs 50% Performance Shares 50% At-Risk Pay At-Risk Pay 83% NEO 2017 TARGET COMPENSATION Base Salary 31%Non-Equity Incentive 21% Equity Incentive 48% ISOs 50% Performance Shares 50% 31% At-Risk Pay 69%
15
costs. Margin compressioncapacity due to a reduction in our North American Surface Transportation (“NAST”) business negatively impacted our net revenues. As a result, our NAST and enterprise performance was below our target performance goals. Thiscommercial flights from COVID-19 restrictions, which resulted in sharp pricing increases. The impact of the COVID-19 pandemic on the ocean freight market varied significantly over the course of 2020 depending on the severity of the outbreak in regions in which we operate. Many industries experienced temporary volume reductions and factory closures due to efforts to contain the spread of the virus, which initially resulted in excess capacity and decreased pricing early in 2020. In the second half of 2020, most industries had resumed production and companies began to replenish low inventory levels amidst continued market uncertainty from the ongoing COVID-19 pandemic. As demand accelerated, it outpaced carrier capacity returning to the market, which resulted in significant pricing increases for the cost of ocean freight.
These market pressures resulted in a decrease of diluted earnings per share from $4.19 in 2019 to $3.72 in 2020 and translated into below-target incentive payouts under our annual cash incentive plan for fourmost of our NEOs, and lowerzero earned vesting in our performance-based equity awards for all NEOs. awards.
Our enterprise APTI, which is
one of the
measure wemeasures used to determine annual
non-equity incentive payments for
threeall of our NEOs in
2017, decreased 102020, finished at -15 percent in
2017.2020.
NAST APTI decreased 8finished -33 percent in 2017. This2020, driven by lower adjusted gross profit per shipment in truckload and less-than-truckload ("LTL") services. The lower adjusted gross profit per shipment in truckload was primarilydriven by the tight carrier capacity in the marketplace and the significant transportation cost volatility resulting from the impact of the COVID-19 pandemic relative to our contractual customer pricing. We continued to meet our customer commitments despite
2020 EXECUTIVE COMPENSATION
increases for the cost of capacity, which has resulted in adjusted gross profit margin compression. NAST APTI was one of the performance measures for one of our 2020 NEOs.
Global Forwarding APTI finished at +111 percent in 2020, driven by the significant increase in air freight and ocean pricing due to
margin compression,the impact of the COVID-19 pandemic. The air freight market has been significantly impacted by reduced cargo capacity due to fewer commercial flights, an increase in charter flights, and larger than normal shipment sizes which has created an environment with unusually high pricing. The price for ocean services has also increased significantly due to tight ocean carrier capacity. These increases were partially offset by
increased volumes. NAST APTI is the performance measure for Mr. Biesterfeld, one of our 2017 NEOs.2017 Global Forwarding APTI increased 13 percent. This was primarily due to an increasevolume declines in net revenues driven by higher volumes, partially offset by increased operating expenses.air freight. Global Forwarding APTI was one of the annual incentive compensation performance measuremeasures for one of our 2017 NEOs, Mr. Short.
Say On Pay
2020 NEOs.
Say-On-Pay
The Compensation Committee also considers the results of the shareholders’ advisory vote on the compensation of NEOs. At our
2017, 2016,2020 and
20152019 Annual Meetings, our
say-on-pay proposals received “for” votes that represented approximately
90 percent, 8493 percent and
8490 percent, respectively, of the shares voted on the proposals. The Compensation Committee considered the results of these
say-on-pay votes and other shareholder feedback when evaluating our compensation practices and policies in
2017,2020, and when setting the compensation of our NEOs for
2017.2020. The Compensation Committee believes that our
say-on-pay proposal results demonstrate shareholders’ support of our compensation practices.
II. Compensation Philosophy
Performance-based
Performance based compensation and alignment of individual, company, and shareholder goals are integral components of C.H. Robinson’s
company culture and management approach.
Within our office network, a significant portion of the cash compensation of our managers is based on the growth and profitability of their office. Performance based compensation makes up a significant portion of our employees’ total compensation package. In addition, approximately
2,617 employees, or over 1716 percent of our total employees hold equity they received through our
2013current equity incentive
plans and our predecessor plans (collectively “Equity Plans”).plan.
C.H. Robinson, with guidance and oversight from our Compensation Committee, has adopted an executive officer compensation philosophy that is intended to be consistent with our overall compensation approach and to achieve the following
basic goals:
| (1) | Provide a level of total compensation necessary to attract, retain, and motivate high quality executives; |
| (2) | Pay incentive compensation aligned with company earnings growth at various levels; |
| (3) | Emphasize both team and company performance; |
| (4) | Balance incentive compensation to achieve both short-term and long-term profitability and growth; and |
| (5) | Encourage executives to make long-term career commitments to C.H. Robinson and our shareholders. |
(1)Provide a level of total compensation necessary to attract, retain, and motivate high quality executives;
(2)Pay incentive compensation aligned with company earnings performance;
(3)Emphasize both team and company performance;
(4)Balance incentive compensation to achieve both annual and long-term profitability and growth; and
(5)Encourage executives to make long-term career commitments to C.H. Robinson and our shareholders.
Compensation decisions regarding individual executive officers are based on several factors, including individual performance, level of responsibility, unique skills of the executive, tenure,
demands and
demandscomplexity of the
position.16
position, and critical nature of the role.
2020 EXECUTIVE COMPENSATION
III. Key Compensation Practices
Our compensation framework and
pay-for-performance practices provide appropriate incentives to our executive officers to achieve our financial goals and
better align our executives with our shareholders’ interests.
| | | | | |
PracticesWhat We Employ
Do | | PracticesWhat We Avoid
|
| Don’t Do |
| Executive compensation and incentive payouts are subject to the approval of our independent Compensation Committee | | No guaranteed bonuses |
| |
Pay opportunity is competitive withgenerally targeted to be within the 25th-50th percentile of general market data ofsimilarly-sized companies. Performance determines a majority of actual earned pay and can be above or below the pay opportunity | companies | No supplemental pension or executive retirement plan (SERP) benefits |
| |
A significant portionmajority of pay is at risk and performance based | | No repricing of underwater options or stock appreciation rights without shareholder approval |
| |
PerformanceMajority of annual incentive compensation performance metrics are directly tied to the driver of shareholder value (APTI) | | No hedging or pledging of company shares |
| |
Appropriate caps on incentive plan payouts | payouts; two times target opportunity | No discounted option or SAR grants |
| |
| Performance based restricted stock and stock option grants to create alignment with shareholders | | No executive only severance plan |
| |
| Executives are subject to robust stock ownership guidelines and a minimum of a two-year post-vest holding requirement on all performance shares | | No automatic vesting and delivery of equity upon a change in control |
| Incentive compensation, including cash incentives and equity subject to claw-back for material misconduct and restatement | No executive only perquisite benefits |
| Equity compensation subject to forfeiture and claw-back if executive violates company employment agreements | | |
| No favorable adjustments were made to our compensation practices as a result of the COVID-19 pandemic |
| Our Compensation Committee is comprised entirely of independent directors | | |
| |
| Our Compensation Committee engages an independent consultant | | |
| |
| Our Compensation Committee regularly meets in executive session without management present | |
2020 EXECUTIVE COMPENSATION
IV. Elements of Executive Compensation
Annual base salary is designed to compensate our executive officers as part of a total compensation package necessary to attract, retain, and motivate high quality executives. Our
20172020 base salaries generally reflect the 25th to 50th percentile of our defined market for talent.
Base salary payments were reduced by 50% for the chief executive officer and 20% for the other named executive officers for the period from May 1, 2020 through July 31, 2020. These changes were enacted as part of our cost savings initiatives related to the COVID-19 pandemic.
Base salaries are reviewed annually. The Salary columnannually and are adjusted to reflect a NEO's responsibilities, performance, leadership potential, succession planning, and relevant market data. A market salary adjustment was made for Mr. Pinkerton to move his salary closer to market median for his role.
| | | | | | | | | | | | | | |
| NEO | Title | 2019 Base Salary | 2020 Base Salary(1) | % Change |
Robert C. Biesterfeld Jr.(2) | President and Chief Executive Officer | $ | 975,000 | | $ | 1,025,000 | | 5 | % |
Michael P. Zechmeister(3) | Chief Financial Officer | 700,000 | | 710,000 | | 1 | % |
| Christopher J. O’Brien | Chief Commercial Officer | 500,000 | | 515,000 | | 3 | % |
Mac S. Pinkerton(4) | President of NAST | 475,000 | | 600,000 | | 26 | % |
| Michael J. Short | President of Global Forwarding Freight | 525,000 | | 540,000 | | 3 | % |
| | | | |
(1)Base salary payments were reduced by 50% for the chief executive officer and 20% for the other named executive officers for the period from May 1, 2020 through July 31, 2020.
(2)Mr. Biesterfeld was appointed CEO on May 9, 2019.
(3)Mr. Zechmeister was hired as chief financial officer on August 30, 2019.
(4)Mr. Pinkerton was appointed president of the Summary Compensation TableNAST on page 27 contains the annual base salary earned for 2017 for each of the NEOs.January 1, 2019.
Non-Equity Incentive Plan Compensation (“annual
cash incentive compensation”)
The primary objectives of our annualnon-equity cash incentive plan compensation (“annual incentive compensation”) are to motivate our people to grow our company profits, and align pay with annual company performance.17
performance, and motivate and incent the company's executive leaders for achievement of important goals aligned to their function or division MBOs. The Compensation Committee included MBOs as part of our fiscal 2020 annual cash incentive compensation plan for each NEO, other than our CEO, to incentivize the achievement of more individualized financial and operational objectives that are critical to our long-term strategy.The MBOs were designed to recognize the initiatives that help the company navigate the large cyclical swings that affect the freight transportation environment, as well as our initiatives to continue driving operating margin expansion over the long-term, achieve overall market-share growth, and the successful implementation of our digital transformation efforts.
The Compensation Committee approves an individualized incentive compensation plan for each NEO early in the first quarter of the calendar year. NEO annual incentive compensation amounts are set as a percentage of their base salary, to reflect the executive’s responsibilities, performance, and contribution to overall company goals. The financial measure used to determine the financial component of annual incentive compensation is APTI.
Each year, the Compensation Committee establishes target APTI growth for the enterprise and the divisions at levels that are consistent with the company’s
long-term expected results. Given the transactional nature of a significant portion of our business and our fluctuating
net revenueadjusted gross profit margins due to market conditions, historically the company has found it difficult to forecast short-term performance. As such, we believe it is important to align targets more closely with our long-term growth goals, with some consideration given to shorter-term market trends and divisional business plans. Our annual targets should not vary significantly year to year, except under unusual circumstances.
The threshold, target, and maximum levels of APTI growth are set each year with the following objectives:
•The relative difficulty of achieving each level is consistent from year to year;
2020 EXECUTIVE COMPENSATION
•The target level is challenging but achievable and reflects planned company performance. The performance ranges within which threshold and maximum incentive payouts can be earned are generally consistent with the range of financial results within which performance is expected to occur; and
•A threshold payment is made to reward partial achievement of the target, and a maximum payment rewards attainment of an aggressive, but potentially achievable, level of performance.
For performance between threshold and target or target and maximum, the achievement percentage is determined by linear interpolation. The performance range for the financial metrics of the annual incentive compensation target for NEOs ranges from 70%70 percent of target at threshold and 120%120 percent of target at maximum. The performance range for the MBO metric of the annual incentive plan for NEOs is 90 percent to 110 percent of target. The NEO annual incentive compensation plan is capped at 2two times the target opportunity.
In 2020, the Compensation Committee established these APTI targets based on the expectation that our stated long-term growth objective is to grow earnings per share by at least 10 percent annually. As noted below, the Compensation Committee aligned our shorter term targets more closely with anticipated outcomes that will drive our longer term goals. The Compensation Committee certified the following actual performance levels and percentage of target payout for each of the NEOs.
In 2017, the Compensation Committee established these APTI targets based on the expectation that our stated long-term diluted earnings per share growth rate for the company will be in the range of 7 to 12 percent. The 2017 NEO annual incentive compensation targets and actual results are shown in the following table:
| | | | | | | | |
2017 NEO Annual Incentive Compensation Metrics | | Target | | | Actual | |
Enterprise APTI growth (1) | | | 7 | % | | | -10 | % |
North America Surface Transportation APTI growth (2) | | | 7 | % | | | -8 | % |
Global Forwarding APTI growth (3) | | | 10 | % | | | 13 | % |
(1) | In 2017, Mr. Wiehoff, Mr. Clarke, and Mr. Lindbloom were paid based on Enterprise APTI. |
(2) | In 2017, Mr. Biesterfeld was paid based on NAST APTI. |
(3) | In 2017, Mr. Short was paid based on Global Forwarding APTI. |
Incentive compensation plans are reviewed annually. The
| | | | | | | | | | | |
| 2020 NEO Annual Incentive Compensation Metrics | Target | Actual | |
Enterprise APTI growth(1) | 7% | -15 | % | (2) |
North American Surface Transportation APTI growth(3) | 7% | -33 | % | |
Global Forwarding APTI growth(4) | 10% | 111 | % | |
Non-Equity
Incentive Plan Compensation column
(1)In 2020, all NEOs had at least a portion of the Summary Compensation Tabletheir incentive compensation plan aligned to Enterprise APTI.
(2)APTI included an adjustment related to a loss on page 27 containsa sale-leaseback of a company-owned data center and adjustments related to M&A activity.
(3)In 2020, Mr. Pinkerton had additional alignment to NAST APTI.
(4)In 2020, Mr. Short had additional alignment to Global Forwarding APTI.
As discussed above, for fiscal 2020, a portion of the annual incentive compensation earned for 2017plan for each NEO, other than the CEO, was tied to achievement of personal MBOs that were set at the beginning of the NEOs.year. Performance against these MBOs was evaluated after year end, with the CEO making recommendations to the Compensation Committee on the achievement of each NEO’s MBO.
The Compensation Committee then determined the level of achievement of the MBOs to determine the level of payout for this component of the plan. Each NEO’s MBOs are described in more detail in the tables beginning on page 28.
We use equity compensation as our primary tool for aligning our executives with long-term shareholder interests, rewarding them for the achievement of overall company performance, and retaining them at C.H. Robinson. Equity compensation
represents approximately 63 percent of our CEO's total target compensation and approximately 51 percent of target compensation for other NEOs. Equity compensation for our executive officers is performance based and highly variable based on growth in company earnings and stock price appreciation. We believe equity compensation is an integral
18
component of meeting our compensation goals as outlined in our compensation philosophy above.philosophy. Our shareholder-approved 2013 Equity Incentive Planequity incentive plan is designed to give us flexibility to achieve these objectives. It allows us to grant performance based restricted shares and stock units; time based stock options, restricted shares, and stock stock units,units; and other types of equity compensation. Executive officers, other employees, directors, consultants, and eligible independent contractors of C.H. Robinsondirectors may receive equity compensation.
NEO Awards
Equity awards made to our NEOs in 2017 wereare generally granted in the form of performance based restricted shares and time-based incentivetime based stock options, weighted equally by fair value. Both the performance based restricted shares and time-based incentivetime based stock optionsoption awards vest over five calendar years. Given the large percentage of their total compensation that is equity, the performance vesting formula that is based solely on growth in company profitability, and the long-term nature of the vesting and delivery, we believe these awards are an effective tool for creating long-term ownership, aligning our executives’ interests
2020 EXECUTIVE COMPENSATION
with those of our shareholders, and linking executive officer compensation to
our long-term company
performance. While the five year vesting for both performance sharesgrowth strategy. We continue to monitor market trends and
incentive options is a longer period than most companies use, this was done purposefully,plan enhancements related to
reinforce the long-term retentive intent of these awards.Equity awards are reviewed and granted annually. The Stock Awards and Option Awards columns of the Summary Compensation Table on page 27 contain the grant date fair value of theour equity awards granted during 2017 to each of the NEOs.
award design.
Performance
Based Restricted Shares
For our performance
based restricted share awards, vesting may occur each year for up to five calendar years, based on company
performance.performance over that period of time. Any performance
based restricted shares that are unvested at the end of the five years are forfeited back to the company. Performance vesting is constructed in a manner as to vest 0 to 100 percent of the award based on the change in
diluted earnings per share from the prior year’s achievement, over the
five yearfive-year vesting period of the award.
However, in no case may an award vest more than 100 percent. Additionally, an award may vest
0 percentzero when there is
negativenot year-over-year
diluted earnings per share growth, as was experienced by participants in
2013.For performance share awards granted prior to 2013, the annual vesting percentage is equal to the average of the year–over–year percentage growth in income from operations2019 and diluted net income per share, plus 5 percentage points. In 2013, the Compensation Committee adjusted the equity vesting formula to better align it with the company’s long-range growth plan. 2020.
The annual vesting percentage for performance
based restricted share awards
granted since 2013 is equal to the
year-over–yearyear-over-year percentage increase (or decrease) in diluted
net incomeearnings per share, plus
10ten percentage points.
Performance
For all performance based restricted share
and performance-based incentive stock option annual vesting percentage information is set forth in the following table: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performance Vesting Year | | 2011
Award | | | 2012
Award | | | 2013
Award | | | 2014
Award | | | 2015
Award | | | 2016
Award | | | 2017
Award | |
2012 | | | 24 | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
2013 | | | 0 | % | | | 0% | | | | — | | | | — | | | | — | | | | — | | | | — | |
2014 | | | 17 | % | | | 17% | | | | 25% | | | | — | | | | — | | | | — | | | | — | |
2015 | | | 20 | % | | | 20% | | | | 25% | | | | 25% | | | | — | | | | — | | | | — | |
2016 | | | 5 | % | | | 5% | | | | 12% | | | | 12% | | | | 12% | | | | — | | | | — | |
2017 | | | 0 | % | | | 1% | | | | 9% | | | | 9% | | | | 9% | | | | 9% | | | | — | |
Total Cumulative Vesting | | | 66 | % | | | 43% | | | | 71% | | | | 46% | | | | 21% | | | | 9% | | | | 0% | |
Years Left Available to Vest | | | 0 | | | | 0 | | | | 1 | | | | 2 | | | | 3 | | | | 4 | | | | 5 | |
19
For awards made to NEOs in 20102015 through 2017,2020, we have a post-vest holding period whereby the standard delivery of theall vested shares occurs on the earlier of two years after termination of employment or after two years following the end of the five yearfive-year vesting period. We believe thea delayed delivery two years after vesting or termination strengthens our employment agreements and aligns with shareholders’ interests.
For awards made prior to 2015, NEOs were allowed to elect a different time for the delivery of the vested shares before the vesting period began. However, that delivery cannot be less than two years after termination or the five year vesting period.
Dividend equivalents are paid to participants in cash on all performance
based restricted shares, vested or unvested. Dividend equivalents provide an important link between the executives’ stake in the company and its long-term health. It also better aligns them with our shareholders, who receive
between 40 andapproximately 50
percent to 55 percent of company earnings in the form of dividends.
The fair value of each
share-basedperformance based restricted share award is established on the date of grant. For grants of performance
based restricted shares and
restricted stock units, the fair value is established based on the market price of our common stock on the date of the grant, discounted for post-vesting holding restrictions.
Stock Options
C.H. Robinson awarded performance-based incentive stock options
Performance based restricted share annual vesting percentage information is set forth in the following table:
| | | | | | | | | | | | | | | | | |
| Performance Vesting Year | 2015
Grant | 2016
Grant | 2017
Grant | 2018
Grant | 2020 Grant (1) |
| 2016 | 12% | — | — | — | — |
| 2017 | 9% | 9% | — | — | — |
| 2018 | 43% | 43% | 43% | — | — |
| 2019 | 0% | 0% | 0% | 0% | — |
| 2020 | 0% | 0% | 0% | 0% | 0% |
| Total Cumulative Vesting | 64% | 52% | 43% | 0% | 0% |
| Vesting Years Remaining | 0 | 1 | 2 | 3 | 4 |
(1)Due to executives, includingchanges in the NEOs, in 2014. These awards contain performance-based vesting terms and conditions identical totiming of the annual equity grant cycle, the annual performance based restricted share grants made to our executives. As noted above, beginningthat were historically granted in 2015, incentive stock optionsDecember were granted were time-based, vestingin February.
Stock Options
Stock option awards vest ratably over five
years beginning in 2016 and 2017, respectively.years. For grants of
incentivetime based stock options, the fair value is established using the Black-Scholes option pricing model.
Incentive stock option annual vesting percentage information is set forth in the following table:
2020 EXECUTIVE COMPENSATION
| | | | | | | | | | | | | | | | | |
| Vesting Year | 2015
Grant | 2016
Grant | 2017
Grant | 2018
Grant | 2020 Grant (1) |
| 2016 | 20% | — | — | — | — |
| 2017 | 20% | 20% | — | — | — |
| 2018 | 20% | 20% | 20% | — | — |
| 2019 | 20% | 20% | 20% | 20% | — |
| 2020 | 20% | 20% | 20% | 20% | 20% |
| Total Cumulative Vesting | 100% | 80% | 60% | 40% | 20% |
| Vesting Years Remaining | 0 | 1 | 2 | 3 | 4 |
(1)Due to changes in the timing of the annual equity grant cycle, the annual time based stock option grants that were historically granted in December were granted in February.
V. Additional Compensation Policies and Practices
Equity Plan Acceleration and
Post EmploymentPost-Employment Vesting
We do not have a separate severance pay plan for NEOs.
Our performance shareequity award agreements with our NEOs include provisions that allow Board discretion to accelerate vesting, in full, if a change in control occurs(1), or if employment ends due to death or disability. Incentive stockStock options granted to our NEOs will fully vest and become exercisable immediately in connection with the same events. This treatment for performance based restricted share awards and time based stock option awards has been adopted primarily because it is seen to effectively create incentives for our executive team to obtain the highest value possible should we be acquired in the future, because it is expected to provide a powerful retention device during the uncertain times preceding a change in control transaction, and because it provides employees the same opportunity as shareholders to participate in the change in control event. Post-employment vesting
of both performance based restricted share and time based stock option grants (for reasons other than death, disability, and change in control) is tied to
non-compete agreements and provides protections to the company and our relationships with our employees, customers, and
suppliers.service providers. For
performance share and time-based incentive stock optionboth types of equity grants, the following post-employment vesting
rules,is available, based on age and tenure with the company
were established:following a minimum of five years of service: | | | | | |
Sum of Age and Tenure at Termination of Employment | | Post-Employment
Additional Vesting |
Less than 50 | | 2 Years |
At least 50 but less than 60 | | 3 Years |
At least 60 but less than 70 | | 4 Years |
70 and greater | | 5 Years |
20
Executive Stock Ownership Guidelines
In order to ensure alignment with our shareholders, the Compensation Committee has established stock ownership guidelines for our executive officers. The Compensation Committee believes that linking a significant portion of the executive officer’s personal holdings to the company’s success aligns our executive interests with that of our shareholders. Therefore, executive officers are expected to acquire and hold a significant amount of C.H. Robinson stock. The Compensation Committee has established stock ownership guidelines based on all shares of company stock deemed owned by an executive officer, which includes vested stock options, stock held in the company 401(k) plan, vested and unvested performance shares and restricted stock units, and stock beneficially owned by the officer, including owned in a trust, by a spouse, or by dependent children, for our executive officers.
Our equity ownership guidelines for executive officers are as follows:
CEO: 6 times base salary
Other NEOs: 3 times base salary
Other direct reports to the CEO: 3 times base salary
It is expected that new or recently promoted members of the executive team will achieve the appropriate level of ownership within five years of their appointment. As of the end of 2017, all the executive officers had met these ownership guidelines.
Employment Agreements
C.H. Robinson uses employment agreements to protect against former employees soliciting our employees, customers, and suppliers.service providers. All employees sign agreements acknowledging their understanding of company policies and committing to confidentiality.certain confidentiality obligations. Certain employees, including all executives,NEOs, sign a managementan employment agreement that includes more restrictivenon-competition andnon-solicitation covenants. TheseTypically, these agreements do not commit to post-termination compensation. TheOther than Mr. Zechmeister(2), the company does not have severance plan commitments to any NEOs except for the continued vesting provision listed above in the Equity Plan Acceleration and Post Employment Vesting section.
2020 EXECUTIVE COMPENSATION
(1)If a change in control of our company occurs, the Compensation Committee may take such actions with respect to outstanding equity awards as it deems appropriate under the circumstances, which may include (i) providing for the continuation, assumption, or replacement of outstanding awards by the surviving or successor entity; (ii) providing that outstanding awards will terminate upon or immediately prior to the consummation of such change in control; (iii) providing that outstanding awards will vest and become exercisable or payable, in whole or in part, prior to or upon consummation of such change in control, or upon termination of a NEO’s employment; or (iv) providing for the cancellation of any outstanding award in exchange for a payment equal to the intrinsic value of the award at the time of the change in control. The Compensation Committee may specify the action to be taken in an award agreement or take the action prior to or coincident with the change in control and is not required to treat all awards or all NEOs similarly.
(2)If Mr. Zechmeister’s employment is involuntarily terminated other than for documented performance or misconduct issues, or if his role and associated compensation is substantially changed without his consent, and he enters into a separation agreement with the company, he will be entitled to severance equal to his annual base salary, one-half of which will be paid within 30 days after execution of the separation agreement and one-half of which will be paid 26 weeks after his termination date.
C.H. Robinson places a high value on all roles throughout our company and on consistency of culture and management approach.
For that reason, we onlyWe do not provide our executives and managers with
any unique perquisites
andor compensation
plans when it is essential to our goal to attract and retain high quality executives and managers. The only executive-specific benefit arrangement and perquisite in 2017 was the personal use of the corporate aircraft by the chief executive officer for up to 30 hours per year. During 2017, Mr. Wiehoff had 6.2 hours of personal use of the corporate aircraft. The value of this benefit has been treated as ordinary income and included on Mr. Wiehoff’s 2017 W2.plans.
The Supplemental All Other Compensation table found on page 28 containspage 34 contains information about the benefits and prequisitesperquisites for each of the NEOs.NEOs, including the aggregate incremental cost of the perquisites.
Other Broad-Based Employee Benefits
Our NEOs are eligible to participate in all
of the same benefit programs as other C.H. Robinson employees. These include:
Employee 401(k) Retirement Plan
We believe that saving for retirement is important for our employees. C.H. Robinson maintains a 401(k) retirement plan that meets the requirements of an ERISA qualified plan and the Internal Revenue Code. Our U.S.
21
employees are eligible to contribute up to 5075 percent of their cash compensation to the 401(k) plan, subject to Internal Revenue Service limitations. To support our compensation objectives, in 2020, the company currently matchesmatched 100 percent of the first 46 percent of eligible compensation that employees contributecontributed to the plan during the year.
However, C.H. Robinson suspended the match on the 401(k) plan from May 22, 2020, through the end of the year, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. The match was reinstated on January 1, 2021.
Employee Stock Purchase Plan
Because we believe in aligning employee interests with our shareholders and our long-term company performance, C.H. Robinson maintains an employee stock purchase plan (ESPP) that meets the requirements of the Internal Revenue Code.
Employee Health and Welfare Benefits
To support our goal to provide competitive compensation and benefits, the company sponsors
a number ofseveral health and welfare benefit plans for our employees: health, dental, vision, flexible medical and dependent care spending,
short termshort-term disability and
long termlong-term disability, life insurance, and holiday and other paid time off.
The Compensation Committee
The Compensation Committee is responsible for assisting the Board of Directors in:
(1)Reviewing the performance of the chief executive officer;
(2)Determining all elements of the compensation and benefits for the chief executive officer and other executive officers of the company;
(3)Reviewing and approving the company’s compensation program, including equity-based plans, for management employees generally;
| (1) | Reviewing the performance of the chief executive officer; | | | | | | |
| 26 | | 2021 Proxy Statement |
| (2) | Determining all elements of the compensation and benefits for the chief executive officer and other executive officers of the company; |
| (3) | Reviewing and approving the company’s compensation program, including equity-based plans, for management employees generally; |
| (4) | Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and |
| (5) | Reviewing the executive officers’ employment agreements, separation and severance agreements, change in control agreements, and other compensatory contracts, arrangements, and benefits. |
2020 EXECUTIVE COMPENSATION
(4)Overseeing the company’s process of conducting advisory shareholder votes on executive compensation; and
(5)Reviewing the executive officers’ employment agreements; separation and severance agreements; change in control agreements; and other compensatory contracts, arrangements, and benefits.
The Compensation Committee Report on executive compensation is found on page
3439 of this Proxy Statement.
Cash Compensation
Prior to the beginning of each calendar year,
At every February Compensation Committee meeting, our chief executive officer presents to the Compensation Committee his recommendations on base salary compensation for the company’s executive leaders, including each of the NEOs.
Mr. WiehoffThe chief executive officer does not make a recommendation on his own compensation. The Compensation Committee determines the chief executive officer’s compensation, as well as approves the compensation for the other NEOs.
At the February Compensation Committee
Additionally, at this same meeting, after the financial results of the previous year have been finalized, our chief executive officer presents to the Compensation Committee his recommendation on annual
cash incentive compensation plans for the company’s executive leaders, including each of the NEOs. During this meeting, the Compensation Committee certifies the APTI results and corresponding incentive compensation for the executive officers for the prior year and approves recommended
non-equity annual cash incentive targets for the current year.
The Compensation Committee considers many factors when setting compensation plans and awards, including company performance, NEOs’ responsibilities, officer performance, position tenure, experience, and
22
survey information from independent experts. For the past fourseven years, the Compensation Committee engaged Aon Hewitt to present executive compensation market data and practices information to the Compensation Committee in preparation for determining and approving executive compensation. Typically,Given the digital transformation underway at the company, the Compensation Committee reviewsis continually assessing best practices related to the core components, general industry benchmark data every oneprinciples, and compensation philosophy needed to two years as provided by Aon Hewitt. The Compensation Committee does periodically plansupport its business strategies and to enhance long-term shareholder value creation. We will continue to seek independent consultative input and consideration of the company’s executive compensation as it continues to assess the company’s executive officer compensation practices.
on these matters going forward.
In
2017,2020, our NEOs were awarded performance shares and time-based stock options. Our chief executive officer presents equity recommendations to the Compensation Committee for our executive officers, excluding himself. The Compensation Committee determines the chief executive officer’s equity compensation award. The Compensation Committee approves the awards for each of the executive officers and approves the equity grants to all other recipients through the
Non-Executive Stock Award Committee. The grant date of awards for all employees, including the NEOs, is the date of Compensation Committee approval.
2020 EXECUTIVE COMPENSATION
VII. Named Executive Officer Compensation
Realized Annual Compensation
C.H. Robinson views total realized annual compensation as total cash (base salary and annual cash incentive compensation) plus equity vested during that calendar year. As described in the equity compensationEquity Compensation section above, thebeginning on page 23, the equity compensation of our executive officers is performance based and has significant variability based on company earnings growth. Because performance equity may not vest, we think it is most appropriate to measure total compensation in this way. In the Total 20172020 Realized Annual Compensation table for each NEO below, the values in the “Equity Earned” column reflect the actual percentage vested during the calendar year multiplied by the grant date fair value for the performance based awardsrestricted shares and the time based stock options vesting during each year.Named Executive Officers
Performance Evaluation and Compensation
The NEOs are all paid the same compensation elements. The determination of the
other NEOs’
20172020 base salary, annual
cash incentive compensation,
award, and equity compensation
(both performance based restricted shares and time based stock options) followed the practices explained above for executive compensation. Each member of this group is evaluated, and his
or her compensation is based on
a number ofseveral different factors, including, but not limited to, the following:
| (1) | title,(1)Title, role, scope of responsibility, and relative experience; |
| (2) | tenure in their position; |
| (3) | subjective evaluation of individual performance; |
| (4) | financial performance of the company as a whole; |
| (5) | financial performance of the portion of the business the NEO leads, where applicable; and |
| (6) | comparison to market survey information. |
Chairman and Chief Executive Officer Performance Evaluationrelative experience;
(2)Tenure in their position;
(3)Subjective evaluation of individual performance;
(4)Financial performance of the company as a whole;
(5)Financial performance of the portion of the business the NEO leads, where applicable; and CompensationJohn P. Wiehoff, Chairman, President, and Chief Executive Officer
(6)Comparison to market survey information.
The Compensation Committee annually conducts an evaluation of the
chairman and chief executive officer’s performance. Based on this evaluation, the Compensation Committee determines base salary, annual
cash incentive compensation, and equity compensation of the
chairman and chief executive officer.
23
The Compensation Committee set John P. Wiehoff’s
Robert C. Biesterfeld Jr., President and Chief Executive Officer
Mr. Biesterfeld started 2020 at a base salary
at $1,167,000 in 2017. In 2017, Mr. Wiehoffof $975,000 and on March 1, 2020, as part of our annual compensation review cycle, moved to a base salary of $1,025,000. He earned annual
cash incentive compensation of
$871,475, which was$467,577 for 2020 paid
in cash on February
28, 2018. The amount was calculated based on his26, 2021. Mr. Biesterfeld's annual
incentive compensation agreement, as described in Section IV above. Mr. Wiehoff’s annualcash incentive compensation plan awarded compensation for the
company’scompany's achievement of APTI in certain ranges.
In February 2020 as part of our annual grant cycle, Mr.
Wiehoff’s 2017 incentive compensation decreased compared to 2016. This was primarily due to enterpriseBiesterfeld received 34,611 performance
not attaining our 2017 target performance goal, which resultedbased restricted shares and 161,820 time based stock options. Both of these equity awards began vesting in
a below-target incentive payout.John P. Wiehoff 20172020.
Robert C. Biesterfeld Jr. 2020 Annual Cash Incentive Compensation Plan
| | | | | | | | |
Base Salary | | Target
Incentive as %
of Base Salary | | Maximum
Incentive as
% of Base
Salary | | Enterprise
Target
Growth % | | Enterprise
Actual
Growth % |
$1,167,000 | | 100% | | 200% | | 7% | | -10% |
| | | | | | | | | | | | | | |
| Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % |
| $1,025,000 | 140 | % | 280 | % | 7 | % | -15 | % |
Total
20172020 Realized Annual Compensation: The
following table
below illustrates Mr. Wiehoff’s total realized compensation in 2017 of $3,790,502, an increase of 1.1 percent from 2016. | | | | | | | | | | | | | | | | | | | | |
| | | Salary | | | Nonequity Incentive | | | Total Cash | | | Equity Earned | | | Total Realized Compensation | |
2017 | | | $1,167,000 | | | | $ 871,475 | | | | $2,038,475 | | | | $1,752,027 | | | | $3,790,502 | |
2016 | | | 1,167,000 | | | | 937,270 | | | | 2,104,270 | | | | 1,645,457 | | | | 3,749,727 | |
2015 | | | 410,000 | | | | 1,767,315 | | | | 2,177,315 | | | | 3,295,592 | | | | 5,472,907 | |
In December 2017 and pursuant to the 2013 Equity Incentive Plan, Mr. Wiehoff was granted 32,130 performance shares and 167,370 time-based incentive stock options with a combined grant date fair value of approximately $4.8 million, which is an increase of 13.7 percent over his 2016 grant date fair value. These shares and options are available to begin vesting in 2018.
Andrew C. Clarke, Chief Financial Officer
Andrew C. Clarke joined the company on June 1, 2015. His 2017 annual base salary was $550,000. He earned annual incentive compensation of $230,004 for 2017 paid in cash on February 28, 2018. The increase in 2017 incentive compensation compared to 2016 was primarily the result of Mr. Clarke’s base salary increase, andnon-equity incentive target as a percent of base salary increase. This was offset by the fact that our company APTI growth did not obtain our target performance goal, which resulted in a below-target incentive payout.
Andrew C. Clarke 2017 Incentive Compensation Plan
| | | | | | | | |
Base Salary | | Target
Incentive as %
of Base Salary | | Maximum
Incentive as
% of Base
Salary | | Enterprise
Target
Growth % | | Enterprise
Actual
Growth % |
$550,000 | | 70% | | 140% | | 7% | | -10% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Clarke’s total realized compensation in 2017 of $1,072,084, an increase of 13 percent over 2016.
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Salary | | | Nonequity Incentive | | | Bonus | | | Total Cash | | | Equity Earned | | | Total Realized Compensation | |
2017 | | $ | 550,000 | | | $ | 230,004 | | | $ | 0 | | | $ | 780,004 | | | $ | 292,080 | | | $ | 1,072,084 | |
2016 | | | 525,000 | | | | 210,826 | | | | 0 | | | | 735,826 | | | | 213,071 | | | | 948,897 | |
2015 | | | 291,667 | | | | 150,208 | | | | 196,063 | | | | 637,938 | | | | 183,951 | | | | 821,889 | |
Mr. Clarke was awarded 6,080 performance shares and 31,720 time-based incentive stock options in 2017 pursuant to the 2013 Equity Incentive Plan. The grant date fair value of these awards was approximately
24
19.5 percent greater than those he received in 2016. These shares and options are available to begin vesting in 2018.
Robert C. Biesterfeld, Chief Operating Officer and President of North America Surface Transportation
The base salary for Robert C. Biesterfeld was $475,000 in 2017. He earned annual incentive compensation for 2017 of $245,848 paid in cash on February 28, 2018. The 2017 annual incentive compensation award decreased compared to 2016 award due to NAST APTI growth not attaining our target performance goal, which resulted in a below-target incentive payout.
Robert C. Biesterfeld 2017 Incentive Compensation Plan
| | | | | | | | |
Base Salary | | Target
Incentive as %
of Base Salary | | Maximum
Incentive as
% of Base
Salary | | North America
Surface
Transportation
Target
Growth % | | North America
Surface
Transportation
Actual
Growth % |
$475,000 | | 80% | | 160% | | 7% | | -8% |
Total 2017 Realized Annual Compensation: The table below illustrates Mr. Biesterfeld’s total realized compensation in 20172020 of $1,002,450,$2,578,411, an increase of 9.821 percent from 2016.
| | | | | | | | | | | | | | | | | | | | |
| | | Salary | | | Nonequity Incentive | | | Total Cash | | | Equity Earned | | | Total Realized Compensation | |
2017 | | | $475,000 | | | | $245,848 | | | | $720,848 | | | | $281,602 | | | | $1,002,450 | |
2016 | | | 450,000 | | | | 250,378 | | | | 700,378 | | | | 212,795 | | | | 913,173 | |
2015 | | | 210,000 | | | | 236,379 | | | | 446,379 | | | | 239,747 | | | | 686,125 | |
In 2017,2019. Mr. Biesterfeld received 6,080 performance shareswas appointed CEO in May 2019 and 31,720 time-based incentive stock options pursuanthis 2020 compensation is reflective of this change in role. For the period from May 1, 2020 through July 31, 2020, Mr. Biesterfeld's base salary payments were reduced by 50%, which was enacted as part of our cost savings initiatives related to the 2013 EquityCOVID-19 pandemic. Our business results in 2020 led to a decline in enterprise APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares.
2020 EXECUTIVE COMPENSATION
| | | | | | | | | | | | | | | | | | | | |
| Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation |
| 2020 | $ | 878,750 | | $ | 467,577 | | $ | 1,346,327 | | 33 | % | $ | 1,232,084 | | $ | 2,578,411 | |
| 2019 | 870,833 | | 428,895 | | 1,299,728 | | 42 | % | 827,858 | | 2,127,586 | |
| 2018 | 600,000 | | 849,620 | | 1,449,620 | | 136 | % | 1,217,312 | | 2,666,932 | |
(1)See the disclosures made under the heading Non-Equity Incentive Plan. The grant date fair valuePlan Compensation, beginning on page 22, pertaining to the impact of these awards representedcompany APTI in the calculation of the NEO's percentage of target incentive payout achieved.
(2)See the disclosures made under the headings Performance Based Restricted Shares and Stock Options on page 24 pertaining to the actual vesting percentages earned.
Michael P. Zechmeister, Chief Financial Officer
Mr. Zechmeister started 2020 at a
9.5 percent increase in award value year-over-year. These shares and options are available to begin vesting in 2018.Chad M. Lindbloom, Chief Information Officer
Chad M. Lindbloom’s base salary was $590,000of $700,000 and on March 1, 2020, as part of our annual compensation review cycle, moved to a base salary of $710,000. Mr. Zechmeister's annual cash incentive compensation plan awarded compensation for the company's achievement of APTI in 2017. He earnedcertain ranges, as well as MBOs. Mr. Zechmeister’s MBOs were tied to achievement of global market share growth, improvements in financial capabilities, as well as achievement of enterprise cost savings. Mr. Zechmeister's annual cash incentive compensation of $211,484$290,084 for 2017, which was2020 paid in cash on February 28, 2018.26, 2021. In February 2020 as part of our annual grant cycle, Mr. Lindbloom’s annual incentive compensation agreement compensated him for the company achieving APTIZechmeister was awarded 11,772 performance based restricted shares and 55,020 time based stock options. Both of these equity awards began vesting in certain ranges. The decrease in 2017 incentive compensation compared to 2016 was primarily the result of company APTI growth not attaining our target performance goal, which resulted in a below-target incentive payout.
Chad M. Lindbloom 20172020.
Michael P. Zechmeister 2020 Annual Cash Incentive Compensation Plan
| | | | | | | | |
Base Salary | | Target
Incentive as %
of Base Salary | | Maximum
Incentive as
% of Base
Salary | | Enterprise
Target
Growth % | | Enterprise
Actual
Growth % |
$590,000 | | 60% | | 120% | | 7% | | -10% |
| | | | | | | | | | | | | | | | | |
| Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO |
| $710,000 | 85 | % | 170 | % | 80 | % | 0 | % | 20 | % |
| | | | | | | | | | | | | | |
| Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % |
| 7 | % | -15 | % | N/A | N/A | 110 | % |
Total
20172020 Realized Annual Compensation: The
following table
below illustrates Mr.
Lindbloom’sZechmeister’s total realized compensation in
20172020 of
$1,184,899, a decrease$1,572,998, an increase of
2.6136 percent from
2016. | | | | | | | | | | | | | | | | | | | | |
| | | Salary | | | Nonequity Incentive | | | Total Cash | | | Equity Earned | | | Total Realized Compensation | |
2017 | | | $590,000 | | | | $211,484 | | | | $801,484 | | | | $383,415 | | | | $1,184,899 | |
2016 | | | 590,000 | | | | 236,928 | | | | 826,928 | | | | 390,183 | | | | 1,217,111 | |
2015 | | | 270,000 | | | | 592,195 | | | | 862,195 | | | | 774,633 | | | | 1,636,828 | |
25
2019. Mr. LindbloomZechmeister was hired as CFO on August 30, 2019, resulting in pro-rated compensation for that year. For the period from May 1, 2020 through July 31, 2020, Mr. Zechmeister's base salary payments were reduced by 20%, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. Our business results in 2020 led to a decline in enterprise APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares.
| | | | | | | | | | | | | | | | | | | | |
| Base Salary Paid | Cash Incentive Compensation(1) | Total Cash | % of Target Incentive Achieved(2) | Equity Earned(3) | Total Realized Compensation |
| 2020 | $ | 666,839 | | $ | 290,084 | | $ | 956,923 | | 48 | % | $ | 616,075 | | $ | 1,572,998 | |
| 2019 | 235,985 | | 283,945 | | 519,930 | | 42 | % | 145,266 | | 665,196 | |
(1)2019 figure includes $200,000 sign-on bonus.
(2)See the disclosures made under the heading Non-Equity Incentive Plan Compensation, beginning on page 22, pertaining to the impact of company APTI in the calculation of the NEO's percentage of target incentive payout achieved.
(3)See the disclosures made under the headings Performance Based Restricted Shares and Stock Options on page 24 pertaining to the actual vesting percentages earned.
2020 EXECUTIVE COMPENSATION
Christopher J. O’Brien, Chief Commercial Officer
Mr. O’Brien started 2020 at a base $500,000 and on March 1, 2020, as part of our annual compensation review cycle, moved to a base salary of $515,000. Mr. O'Brien's annual cash incentive compensation plan awarded compensation for the company's achievement of APTI in certain ranges, as well as MBOs. Mr. O’Brien’s MBOs were tied to achievement of global market share growth and key metrics aligned to customer engagement. Mr. O'Brien's annual cash incentive compensation of $184,811 for 2020 paid on February 26, 2021. In February 2020 as part of our annual grant cycle, Mr. O'Brien was awarded 6,0807,663 performance based restricted shares and 31,720 time-based incentive33,690 time based stock optionsoptions. Both of these equity awards began vesting in 2017 pursuant2020.
Christopher J. O’Brien 2020 Annual Cash Incentive Compensation Plan
| | | | | | | | | | | | | | | | | | | |
| Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO | | |
| $515,000 | 65 | % | 130 | % | 70 | % | 0 | % | 30 | % | | |
| | | | | | | | | | | | | | |
| Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % |
| 7 | % | -15 | % | N/A | N/A | 108 | % |
Total 2020 Realized Annual Compensation: The following table illustrates Mr. O’Brien’s total realized compensation in 2020 of $1,067,819, an increase of 13 percent from 2019. For the period from May 1, 2020 through July 31, 2020, Mr. O'Brien's base salary payments were reduced by 20%, which was enacted as part of our cost savings initiatives related to the 2013 EquityCOVID-19 pandemic. Our business results in 2020 led to a decline in enterprise APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares.
| | | | | | | | | | | | | | | | | | | | |
| Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation |
| 2020 | $ | 482,412 | | $ | 184,811 | | $ | 667,223 | | 55 | % | $ | 400,596 | | $ | 1,067,819 | |
| 2019 | 500,000 | | 126,975 | | 626,975 | | 42 | % | 316,439 | | 943,414 | |
| 2018 | 500,000 | | 499,201 | | 999,201 | | 166 | % | 1,283,716 | | 2,282,917 | |
(1)See the disclosures made under the heading Non-Equity Incentive Plan. ThePlan Compensation, beginning on page 22, pertaining to the impact of company APTI in the calculation of the NEO's percentage of target incentive payout achieved.
(2)See the disclosures made under the headings Performance Based Restricted Shares and Stock Options on page 24 pertaining to the actual vesting percentages earned.
2020 EXECUTIVE COMPENSATION
Mac S. Pinkerton, President of North American Surface Transportation
Mr. Pinkerton started 2020 at a base $475,000 and on March 1, 2020, as part of our annual compensation review cycle, moved to a base salary of $600,000. Mr. Pinkerton's annual cash incentive compensation plan awarded compensation for NAST’s achievement of API in certain ranges, the company's achievement of APTI in certain ranges, as well as MBOs. Mr. Pinkerton’s MBOs were tied to achievement of global market share growth and key metrics aligned to business transformation. Mr. Pinkerton's annual cash incentive compensation of $196,681 for 2020 paid on February 26, 2021. In February 2020 as part of our annual grant
date fair valuecycle, Mr. Pinkerton received 9,365 performance based restricted shares and 41,170 time based stock options. Both of these
equity awards
was approximately 9.5 percent greater than those he received in 2016. These shares and options are available to beginbegan vesting in
2018.2020.
Mac S. Pinkerton 2020 Annual Cash Incentive Compensation Plan
| | | | | | | | | | | | | | | | | |
| Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO |
| $600,000 | 80 | % | 160 | % | 30 | % | 40 | % | 30 | % |
| | | | | | | | | | | | | | |
| Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % |
| 7 | % | -15 | % | 7 | % | -33 | % | 104 | % |
Total 2020 Realized Annual Compensation: The following table illustrates Mr. Pinkerton’s total realized compensation in 2020 of $1,021,065, an increase of 18 percent from 2019. For the period from May 1, 2020 through July 31, 2020, Mr. Pinkerton's base salary payments were reduced by 20%, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. Our business results in 2020 led to a decline in enterprise and NAST APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares.
| | | | | | | | | | | | | | | | | | | | |
| Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation |
| 2020 | $ | 544,250 | | $ | 196,681 | | $ | 740,931 | | 41 | % | $ | 280,134 | | $ | 1,021,065 | |
| 2019 | 475,000 | | 212,943 | | 687,943 | | 56 | % | 177,291 | | 865,234 | |
(1)See the disclosures made under the heading Non-Equity Incentive Plan Compensation, beginning on page 22, pertaining to the impact of company APTI in the calculation of the NEO's percentage of target incentive payout achieved.
(2)See the disclosures made under the headings Performance Based Restricted Shares and Stock Options on page 24 pertaining to the actual vesting percentages earned.
2020 EXECUTIVE COMPENSATION
Michael J. Short, President of Global Freight Forwarding
Mr. Short started 2020 at a base salary of $525,000 and on March 1, 2019, as part of our annual compensation review cycle, moved to a base salary of $540,000. Mr. Short's annual cash incentive compensation plan awarded compensation for Global Forwarding's achievement of APTI in certain ranges, the company's achievement of APTI in certain ranges, as well as MBOs. Mr. Short’s MBOs were tied to achievement of global market share growth and initiatives to drive standardization of business processes. Mr. Short's annual cash incentive compensation of $464,090 for 2020 paid on February 26, 2021. In MayFebruary 2020 as part of 2015, our annual grant cycle, Mr. Short received 7,240 performance based restricted shares and 31,820 time based stock options. Both of these equity awards began vesting in 2020.
Michael J. Short
was promoted to the role of president, Global Freight Forwarding. Mr. Short’s base salary in 2017 was $500,000. He earned $393,549 annual incentive compensation for 2017. The 2017 award increased 30 percent compared to 2016 due to Global Forwarding APTI surpassing target performance of 10 percent growth over 2016.Michael J. Short 20172020 Annual Cash Incentive Compensation Plan
| | | | | | | | |
Base Salary | | Target
Incentive as %
of Base Salary | | Maximum
Incentive as
% of Base
Salary | | Global
Forwarding
Target Growth % | | Global
Forwarding
Actual Growth % |
$500,000 | | 70% | | 140% | | 10% | | 13% |
| | | | | | | | | | | | | | | | | |
| Annual Base Salary | Target Incentive as % of Base Salary | Maximum Incentive as % of Base Salary | % Tied to Enterprise APTI | % Tied to Division APTI | % Tied to MBO |
| $540,000 | 70 | % | 140 | % | 30 | % | 40 | % | 30 | % |
| | | | | | | | | | | | | | |
| Target Enterprise APTI Growth % | Actual Enterprise APTI Growth % | Target Division APTI Growth % | Actual Division APTI Growth % | MBO Achievement % |
| 7 | % | -15 | % | 10 | % | 111 | % | 110 | % |
Total
20172020 Realized Annual Compensation: The
following table below illustrates Mr. Short’s total realized compensation in
20172020 of
$1,244,782, a 15.4$1,448,871, an increase of 30 percent
increase over 2016. | | | | | | | | | | | | | | | | | | | | |
| | | Salary | | | Nonequity
Incentive | | | Total Cash | | | Equity Earned | | | Total Realized Compensation | |
2017 | | | $500,000 | | | | $393,549 | | | | $893,549 | | | | $351,233 | | | | $1,244,782 | |
2016 | | | 500,000 | | | | 302,724 | | | | 802,724 | | | | 275,940 | | | | 1,078,664 | |
2015 | | | 458,750 | | | | 159,397 | | | | 618,147 | | | | 109,961 | | | | 728,108 | |
In 2017,from 2019. For the period from May 1, 2020 through July 31, 2020, Mr. Short received 5,400 performance shares and 28,190 time-based incentive stock options pursuantShort's base salary payments were reduced by 20%, which was enacted as part of our cost savings initiatives related to the 2013 Equity Incentive Plan. TheseCOVID-19 pandemic. Our business results in 2020 led to a decline in enterprise APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares, and options are available to begin vesting in 2018. The grant date fair value of these awards representedhowever Global Forwarding had a 9.4 percentsignificant increase in award value year-over-year.APTI resulting in this portion of Mr. Short received an additional time-based awardShort's annual cash incentive compensation having a higher payout.
| | | | | | | | | | | | | | | | | | | | |
| Base Salary Paid | Cash Incentive Compensation | Total Cash | % of Target Incentive Achieved(1) | Equity Earned(2) | Total Realized Compensation |
| 2020 | $ | 505,950 | | $ | 464,090 | | $ | 970,040 | | 123 | % | $ | 478,831 | | $ | 1,448,871 | |
| 2019 | 520,833 | | 192,398 | | 713,231 | | 52 | % | 399,344 | | 1,112,575 | |
| 2018 | 500,000 | | 316,464 | | 816,464 | | 90 | % | 1,003,326 | | 1,819,790 | |
(1)See the disclosures made under the heading Non-Equity Incentive Plan Compensation, beginning on page 22, pertaining to the impact of 9,460 restricted shares upon his promotioncompany APTI in May 2015, which vest ratably over five years.the calculation of the NEO's percentage of target incentive payout achieved.
(2)See the disclosures made under the headings Performance Based Restricted Shares and Stock Options on page 24 pertaining to the actual vesting percentages earned.
Section 162(m) Disclosure
Section 162(m) of the Internal Revenue Code
limits the corporateprecludes us from taking a federal income tax deduction for compensation paid
in excess of $1 million to
eachour “covered
employee” to $1.0 million. Prior toemployees”. Our covered employees include all employees who have been a covered employee in any year since 2017. As of 2018, a covered employee includes any employee who has been the
enactment of tax reform legislation in December 2017, this limitation applied to compensation paid to “covered employees,” which included a company’s chief executive officer,
itsthe chief financial officer,
and itsor one of our three other most highly compensated executive
officers. Also priorofficers in a year. Prior to
the enactment of tax reform, certain performance-based2018, this deduction limitation did not apply to qualified “performance-based” compensation
was exempt from this limitation if a company met specified requirements.Recent tax reform legislation retained the $1.0 million deduction limit, but repealed the performance-based compensation exemption and expanded the definition of covered employees, effective for taxable years beginning after December 31, 2017, to include any person who served as a company’s chief executive officer or chief financial officer at any time during a taxable year, as well as any person who was ever identified asnot considered to be a covered employee in 2017 or any subsequent year.employee. Consequently, compensation paid in 2018 and later years to these covered employees in excess of $1.0$1 million will not be deductible unless it qualifies for transitional relief
2020 EXECUTIVE COMPENSATION
applicable to certain binding, written performance-based compensation arrangements that were in place as of November 2, 2017. The
Despite these new limits on the deductibility of performance-based compensation, the Compensation Committee continues to believe
that a significant portion of our executives’ compensation should be tied to the company’s performance and that shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation
can be used to achieve its compensation objectives described above,is not restricted even though some compensation awards may have resulted in the past, and are expected to result in the future, in
non-deductible compensation expense to us.
26
Therefore, it is not anticipated that the changes to Section 162(m) will significantly impact the design of our compensation program going forward.
Summary Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | (1)
Salary ($) | | | Bonus
($) | | | (2)
Stock
Awards
($) | | | (3)
Option
Awards
($) | | | (4)
Non-Equity
Incentive Plan
Compensation
($) | | | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($) | | (5)
All Other
Compensation
($) | | | Total ($) | |
John P. Wiehoff | | | 2017 | | | | $1,167,000 | | | | $ 0 | | | | $2,383,725 | | | | $2,383,349 | | | | $ 871,475 | | | $0 | | | $28,638 | | | | $6,834,187 | |
President and Chief Executive Officer | |
| 2016
2015 |
| |
| 1,167,000
410,000 |
| |
| 0
0 |
| |
| 2,369,215
2,016,057 |
| |
| 1,825,236
1,908,115 |
| |
| 937,270
1,767,315 |
| | 0
0 | |
| 23,344
34,102 |
| |
| 6,322,065
6,135,589 |
|
| | | | | | | | | |
Andrew C. Clarke | | | 2017 | | | | 550,000 | | | | 0 | | | | 451,075 | | | | 451,693 | | | | 230,004 | | | 0 | | | 10,800 | | | | 1,693,572 | |
Chief Financial Officer | |
| 2016
2015 |
| |
| 525,000
291,667 |
| |
| 0
196,063 |
| |
| 470,598
777,458 |
| |
| 354,186
743,672 |
| |
| 210,826
150,208 |
| | 0
0 | |
| 10,600
21,200 |
| |
| 1,571,210
2,180,268 |
|
| | | | | | | | | |
Robert C. Biesterfeld | | | 2017 | | | | 475,000 | | | | 0 | | | | 451,075 | | | | 451,693 | | | | 245,848 | | | 0 | | | 10,800 | | | | 1,634,416 | |
Chief Operating Officer and President- NAST | |
| 2016
2015 |
| |
| 450,000
210,000 |
| |
| 0
40,600 |
| |
| 470,598
403,626 |
| |
| 314,874
381,699 |
| |
| 250,378
236,379 |
| | 0
0 | |
| 10,600
21,200 |
| |
| 1,496,450
1,293,504 |
|
| | | | | | | | | |
Chad M. Lindbloom | | | 2017 | | | | 590,000 | | | | 0 | | | | 451,075 | | | | 451,693 | | | | 211,484 | | | 0 | | | 10,800 | | | | 1,715,052 | |
Chief Information Officer | |
| 2016
2015 |
| |
| 590,000
270,000 |
| |
| 0
0 |
| |
| 470,598
429,048 |
| |
| 354,186
405,626 |
| |
| 236,928
592,195 |
| | 0
0 | |
| 10,600
21,200 |
| |
| 1,662,312
1,718,069 |
|
| | | | | | | | | |
Michael J. Short | | | 2017 | | | | 500,000 | | | | 0 | | | | 400,626 | | | | 401,426 | | | | 393,549 | | | 0 | | | 10,800 | | | | 1,706,401 | |
President-Global Freight Forwarding | |
| 2016
2015 |
| |
| 500,000
458,750 |
| |
| 0
0 |
| |
| 418,020
895,546 |
(6) | |
| 314,874
381,699 |
| |
| 302,724
159,397 |
| | 0
0 | |
| 10,600
21,200 |
| |
| 1,546,218
1,916,592 |
|
(1) | Prior to 2016, the executive annual incentive compensation agreements allowed executives to receive a portion of their annual incentive compensation in semi-monthly prepayments. Upon the change to our new executive compensation plan in 2016, we increased the base salaries to align with market based salaries and eliminated the prepayments. |
(2) | The 2015, 2016, and 2017 restricted stock grants are available to vest over a five year period based on the financial performance of the company. The actual vesting percentage for each year is determined by the following formula: year-over-year growth rate in diluted net income per share plus ten percentage points. Any shares unvested after five years are forfeited back to the company. The actual vesting percentage was 25 percent in 2015, 12 percent in 2016, and 9 percent in 2017. |
(3) | The 2015, 2016, and 2017 stock option grants are time based awards that vestpro-rata over the five calendar years after the year of grant. |
(4) | The dollar amount in this column represents the amount the NEO earned during the respective year under thenon-equity annual incentive plan. The amount earned is paid out as cash compensation early in the following year. |
(5) | All other compensation for our NEOs is summarized in the Supplemental All Other Compensation table. |
(6) | This figure includes 9,460 time based restricted shares with a grant date value of $491,920.00, which vestpro-rata over five years. |
27
Supplemental All Other Compensation Table
| | | | | | | | | | | | | | | | | | | | | | |
Name | | Year | | | Perks
and
Other
Personal
Benefits | | Tax
Reimbursements | | (1)
Registrant
Contributions
to Defined
Contributions | | | Insurance
Premiums | | Other | | | Total | |
John P. Wiehoff | | | 2017 | | | $0 | | $0 | | | $10,800 | | | $0 | | | $17,838 | (2) | | | $28,638 | |
Andrew C. Clarke | | | 2017 | | | 0 | | 0 | | | 10,800 | | | 0 | | | 0 | | | | 10,800 | |
Robert C. Biesterfeld | | | 2017 | | | 0 | | 0 | | | 10,800 | | | 0 | | | 0 | | | | 10,800 | |
Chad M. Lindbloom | | | 2017 | | | 0 | | 0 | | | 10,800 | | | 0 | | | 0 | | | | 10,800 | |
Michael J. Short | | | 2017 | | | 0 | | 0 | | | 10,800 | | | 0 | | | 0 | | | | 10,800 | |
(1) | Represents matching contributions under the company’s qualified 401(k) plan. |
(2) | Represents the value of Mr. Wiehoff’s personal use of the corporate aircraft as required under applicable IRS rules. |
Dividend Equivalents Paid on Unvested Performance Shares
| | | | | | |
Name | | Year | | (1)
Performance Shares | |
| | | Unvested Shares | |
John P. Wiehoff | | 2017 | | | $162,989 | |
| | 2016 | | | 195,417 | |
| | 2015 | | | 175,719 | |
| | |
Andrew C. Clarke | | 2017 | | | 36,624 | |
| | 2016 | | | 26,313 | |
| | 2015 | | | 12,021 | |
| | |
Robert C. Biesterfeld | | 2017 | | | 26,652 | |
| | 2016 | | | 25,845 | |
| | 2015 | | | 16,112 | |
| | |
Chad M. Lindbloom | | 2017 | | | 35,064 | |
| | 2016 | | | 45,879 | |
| | 2015 | | | 44,734 | |
| | |
Michael J. Short | | 2017 | | | 35,046 | |
| | 2016 | | | 34,910 | |
| | 2015 | | | 20,289 | |
(1) | Dividends paid on these performance shares were paid directly to the NEO through the company’s payroll system. |
28
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name of Executive Officer and Principal Position | Year | | Salary | | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total |
| Robert C. Biesterfeld Jr | 2020 | | $ | 878,750 | | | $ | — | | | $ | 2,053,817 | | | $ | 2,021,132 | | | $ | 467,577 | | | $ | 11,394 | | | $ | 5,432,670 | |
| President and Chief Executive Officer | 2019 | | 870,833 | | (5) | — | | | 1,879,415 | | (5) | 1,869,985 | | (5) | 428,895 | | (5) | 16,800 | | | 5,065,928 | |
| 2018 | | 600,000 | | (6) | — | | | 1,110,877 | | (6) | 1,081,727 | | (6) | 849,620 | | (6) | 11,000 | | | 3,653,224 | |
| Michael P. Zechmeister | 2020 | | 666,839 | | | — | | | 698,550 | | | 687,200 | | | 290,084 | | | 24,325 | | | 2,366,998 | |
| Chief Financial Officer | 2019 | | 235,985 | | (7) | 200,000 | | (8) | 1,681,567 | | (7)(9) | 726,328 | | (7) | 83,945 | | (7) | 57,637 | | | 2,985,462 | |
| Christopher J. O'Brien | 2020 | | 482,412 | | | — | | | 454,722 | | | 420,788 | | | 184,811 | | | 15,633 | | | 1,558,366 | |
| Chief Commercial Officer | 2019 | | 500,000 | | | — | | | — | | (10) | — | | (10) | 126,975 | | | 16,800 | | | 643,775 | |
| 2018 | | 500,000 | | | — | | | 447,805 | | | 439,333 | | | 499,201 | | | 11,000 | | | 1,897,339 | |
| Mac S. Pinkerton | 2020 | | 544,250 | | | — | | | 555,719 | | | 514,213 | | | 196,681 | | | 17,100 | | | 1,827,964 | |
| President of North America | 2019 | | 475,000 | | | — | | | 50,250 | | (11) | 50,027 | | (11) | 212,943 | |
| 16,800 | | | 805,020 | |
| Surface Transportation | | | | | | | | | | | | | | | |
| Michael J. Short | 2020 | | 505,950 | | | — | | | 429,622 | | | 397,432 | | | 464,090 | | | 17,100 | | | 1,814,194 | |
| President of Global Freight Forwarding | 2019 | | 520,833 | | | — | | | — | | (10) | — | | (10) | 192,398 | | | 16,800 | | | 730,031 | |
| 2018 | | 500,000 | | | — | | | 423,217 | | | 414,914 | | | 316,464 | | | 11,000 | | | 1,665,595 | |
Grants of Plan-Based Awards in 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name of Executive | | Grant
Date | | | (1)
Estimated Future Payouts
UnderNon-Equity Incentive
Plan Awards ($) | | Estimated Future Payouts
Under Equity Incentive
Plan Awards (#) | | | All Other
Option
Awards:
Number of
Securities
Underlying
Options (#) | | | Exercise or
Base Price
of Option
Awards
($/Sh) | | | (2)
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($) |
| | | Threshold | | Target | | Maximum | | Threshold | | | Target | | | Maximum | | | | |
| | | | | | | | | | |
John P. Wiehoff | | | 12/6/17 | | | — | | $ — | | — | | | — | | | | — | | | | 32,130 | (3) | | | — | | | $ | — | | | $2,383,725 |
| | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | — | | | | 167,370 | (4) | | | 87.15 | | | 2,383,349 |
| | | | | | 0 | | 1,167,000 | | 2,334,000 | | | — | | | | — | | | | — | | | | — | | | | — | | | — |
| | | | | | | | | | |
Andrew C. Clarke | | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | 6,080 | (3) | | | — | | | | — | | | 451,075 |
| | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | — | | | | 31,720 | (4) | | | 87.15 | | | 451,693 |
| | | | | | 0 | | 385,000 | | 770,000 | | | — | | | | — | | | | — | | | | — | | | | — | | | — |
| | | | | | | | | | |
Robert C. Biesterfeld | | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | 6,080 | (3) | | | — | | | | — | | | 451,075 |
| | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | — | | | | 31,720 | (4) | | | 87.15 | | | 451,693 |
| | | | | | 0 | | 380,000 | | 760,000 | | | — | | | | — | | | | — | | | | — | | | | — | | | — |
| | | | | | | | | | |
Chad M. Lindbloom | | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | 6,080 | (3) | | | — | | | | — | | | 451,075 |
| | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | — | | | | 31,720 | (4) | | | 87.15 | | | 451,693 |
| | | | | | 0 | | 354,000 | | 708,000 | | | — | | | | — | | | | — | | | | — | | | | — | | | — |
| | | | | | | | | | |
Michael J. Short | | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | 5,400 | (3) | | | — | | | | — | | | 400,626 |
| | | 12/6/17 | | | — | | — | | — | | | — | | | | — | | | | — | | | | 28,190 | (4) | | | 87.15 | | | 401,426 |
| | | | | | 0 | | 350,000 | | 700,000 | | | — | | | | — | | | | — | | | | — | | | | — | | | — |
(1) | Under the terms of the award, the amount earned by each executive will be based upon on the company’s or the appropriate business line’s APTI for 2018 and will be paid to the executive in early 2019. |
(2) | The amounts in this column represent the grant date fair value for the respective awards. The performance-based restricted shares, vested and unvested, earn dividends at the same rate as common stock. Because these dividends are considered compensation under the Internal Revenue Code, the dividends are paid to each NEO through the company’s payroll system. |
(3) | Represents the number of performance shares granted during the reported year to the NEO. These performance-based restricted shares are available to vest over five calendar years beginning in 2018. The actual vesting percentage for each year is the year-over-year growth rate in diluted net income per share plus ten percentage points. Because the shares vest based on a formula of growth rates, the awards do not have a specific payout based on a target or a threshold. Once vested, the participant may exercise the options approximately seven years after the grant date. Any restricted shares unvested after five years are forfeited back to the company. |
(4) | Represents the number of time-based stock options granted during the reported year to the NEO. These stock options are available to vest over five calendar years beginning in 2018. Once vested, the participant may exercise the options for a period of ten years. Any options unvested after five years are forfeited back to the company. |
29
Outstanding Equity Awards at FiscalYear-End 2017
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Stock Option Awards | | | Stock Awards | |
Name | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | | Option
Exercise
Price ($) | | | Option
Expiration
Date | | | (1)
Equity
Incentive Plan
Awards:
Number of
Shares or
Units of Stock
That
Have Not
Vested (#) | | | (1)
Equity
Incentive Plan
Awards:
Market Value
of Shares or
Units of Stock
Held That
Have Not
Vested ($) | |
John P. Wiehoff | | | 41,830 | (1) | | | 0 | (1) | | $ | 68.81 | | | | 12/7/2021 | | | | 120,694 | | | $ | 10,752,593 | |
| | | 47,257 | (1) | | | 0 | (1) | | | 61.91 | | | | 12/5/2022 | | | | | | | | | |
| | | 90,028 | (1) | | | 36,772 | (1) | | | 58.25 | | | | 12/4/2023 | | | | | | | | | |
| | | 55,025 | (1) | | | 64,595 | (1) | | | 74.57 | | | | 12/3/2024 | | | | | | | | | |
| | | 60,288 | (2) | | | 90,432 | (2) | | | 63.58 | | | | 12/2/2025 | | | | | | | | | |
| | | 28,972 | (2) | | | 115,888 | (2) | | | 76.72 | | | | 12/7/2026 | | | | | | | | | |
| | | 0 | (2) | | | 167,370 | (2) | | | 87.15 | | | | 12/6/2027 | | | | | | | | | |
Andrew C. Clarke | | | 14,158 | (1) | | | 16,622 | (1) | | | 62.11 | | | | 6/2/2025 | | | | 22,759 | | | | 2,027,626 | |
| | | 12,060 | (2) | | | 18,090 | (2) | | | 63.58 | | | | 12/2/2025 | | | | | | | | | |
| | | 5,622 | (2) | | | 22,488 | (2) | | | 76.72 | | | | 12/7/2026 | | | | | | | | | |
| | | 0 | | | | 31,720 | (2) | | | 87.15 | | | | 12/6/2027 | | | | | | | | | |
Robert C. Biesterfeld | | | 3,071 | (1) | | | 0 | (1) | | | 68.81 | | | | 12/7/2021 | | | | 21,144 | | | | 1,883,716 | |
| | | 2,897 | (1) | | | 0 | (1) | | | 61.91 | | | | 12/5/2022 | | | | | | | | | |
| | | 8,267 | (1) | | | 3,377 | (1) | | | 58.25 | | | | 12/4/2023 | | | | | | | | | |
| | | 5,038 | (1) | | | 5,915 | (1) | | | 74.57 | | | | 12/3/2024 | | | | | | | | | |
| | | 12,060 | (2) | | | 18,090 | (2) | | | 63.58 | | | | 12/2/2025 | | | | | | | | | |
| | | 5,622 | (2) | | | 22,488 | (2) | | | 76.72 | | | | 12/7/2026 | | | | | | | | | |
| | | 0 | (2) | | | 31,720 | (2) | | | 87.15 | | | | 12/6/2027 | | | | | | | | | |
| | | | | | |
Chad M. Lindbloom | | | 12,553 | (1) | | | 0 | (1) | | | 68.81 | | | | 12/7/2021 | | | | 25,265 | | | | 2,250,886 | |
| | | 11,816 | (1) | | | 0 | (1) | | | 61.91 | | | | 12/5/2022 | | | | | | | | | |
| | | 22,507 | (1) | | | 9,193 | (1) | | | 58.25 | | | | 12/4/2023 | | | | | | | | | |
| | | 13,364 | (1) | | | 15,686 | (1) | | | 74.57 | | | | 12/3/2024 | | | | | | | | | |
| | | 12,060 | (1) | | | 18,090 | (2) | | | 63.58 | | | | 12/2/2025 | | | | | | | | | |
| | | 756 | (2) | | | 1,134 | (2) | | | 63.58 | | | | 12/24/2025 | | | | | | | | | |
| | | 5,622 | (2) | | | 22,488 | (2) | | | 76.72 | | | | 12/7/2026 | | | | | | | | | |
| | | 0 | (2) | | | 31,720 | (2) | | | 87.15 | | | | 12/6/2027 | | | | | | | | | |
Michael J. Short | | | 749 | (1) | | | 2,412 | (1) | | | 58.25 | | | | 12/4/2023 | | | | 24,790 | | | | 2,208,579 | |
| | | 3,778 | (1) | | | 4,437 | (1) | | | 74.57 | | | | 12/3/2024 | | | | | | | | | |
| | | 6,030 | (2) | | | 18,090 | (2) | | | 63.58 | | | | 12/2/2025 | | | | | | | | | |
| | | 4,998 | (2) | | | 19,992 | (2) | | | 76.72 | | | | 12/7/2026 | | | | | | | | | |
| | | 0 | (2) | | | 28,190 | (2) | | | 87.15 | | | | 12/6/2027 | | | | | | | | | |
1) | The 2011-2014 performance-incentive stock option and 2011-2017 performance share grants are available to vest over a five year period based on the financial performance of the company. The actual vesting percentage for the 2011 and 2012 award is determined by the following formula: year-over-year growth rates in income from operations and diluted net income per share are averaged, and then five percentage points are added to that number. The vesting formula for the 2013-2017 awards are based on the year-over-year percentage growth in diluted net income per share plus ten percentage points. Any performance-incentive stock options and/or performance shares unvested after five years are forfeited back to the company. Once the options are vested, they are exercisable for a period of ten years from the date of grant under the option award agreement. The vested performance shares are deliverable to the NEO according to their prior-made election. The discounts on the performance shares and restricted stock unit grants, calculated using the Black-Scholes option pricing model were, 22% in 2011, 21% in 2012, 21% in 2013, 17% in 2014, 18% in 2015, 15% in 2016, and 15% in 2017. |
(2) | Represents the number of time-based stock options granted during the reported year to the NEO. These stock options are available to vest over five calendar years beginning in the calendar year after the year of grant. Once vested, the participant may exercise the options for ten years from the grant date. |
30
Option Exercises and Stock Vested During 2017
(1)The 2018, 2019, and 2020 performance based restricted share grants are available to vest over a five-year period based on the financial performance of the company. The actual vesting percentage for each year is determined by the following formula: year-over-year growth rate in diluted earnings per share, plus ten percentage points. Any shares unvested after five years are forfeited back to the company. The actual vesting percentage was 43 percent in 2018, 0 percent in 2019, and 0 percent in 2020. Assumptions used in the calculation of the amounts reported in this table are included in Note 6 to the financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(2)The 2018, 2019, and 2020 stock option grants vest pro-rata over the five calendar years beginning in the year of grant. Assumptions used in the calculation of the amounts reported in this table are included in Note 6 to the financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(3)The dollar amount in this column represents the amount the NEO earned during the respective year under their non-equity annual incentive plan; these amounts correspond to and are referred as "annual cash incentive compensation" in the Performance Evaluation and Compensation subsection of Section VII beginning on page 28. These figures include payouts for MBOs related to strategic goals for the company transformation.
(4)All other compensation for our NEOs is summarized in the Supplemental All Other Compensation table.
(5)These figures include compensation adjustments as a result of Mr. Biesterfeld's appointment to president and chief executive officer effective May 9, 2019.
(6)These figures include compensation adjustments as a result of Mr. Biesterfeld's appointment to chief operating officer effective March 1, 2018.
(7)This figure includes prorated compensation as a result of Mr. Zechmeister's hire as chief financial officer on August 30, 2019.
(8)This figure includes a cash sign-on bonus paid to Mr. Zechmeister.
(9)This figure includes 12,190 restricted stock units with a grant value of $1,000,190, which vest pro-rata over three years.
(10)Due to changes in the timing of the annual equity grant cycle, the annual performance based restricted share and time based stock option grants that would have historically been granted in December 2019 were moved to February 2020.
(11)These figures include performance based restricted share and time based stock option grants made to Mr. Pinkerton as a result of his appointment to president of NAST effective January 1, 2019.
2020 EXECUTIVE COMPENSATION
Supplemental All Other Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | |
| Name of Executive Officer | Year | Perks and Personal Benefits | Tax Reim-bursements | Registrant Contributions to Defined Contributions(1) | Other | Total |
| Robert C. Biesterfeld Jr | 2020 | $ | — | | | $ | — | | $ | 11,394 | | $ | — | | $ | 11,394 | |
| Michael P. Zechmeister | 2020 | 12,925 | | (2) | — | | 11,400 | | — | | 24,325 | |
| Christopher J. O'Brien | 2020 | — | | | — | | 15,633 | | — | | 15,633 | |
| Mac S. Pinkerton | 2020 | — | | | — | | 17,100 | | — | | 17,100 | |
| Michael J. Short | 2020 | — | | | — | | 17,100 | | — | | 17,100 | |
| | Stock Awards | | | |
Name of Executive Officer
| |
(1)Represents matching contributions under the company’s qualified 401(k) plan.
(2)Represents the value of relocation expenses reimbursed by the company.
Dividend Equivalents Paid on Unvested Shares
| | | | | | | | | | | |
| Name of Executive Officer | Year | Dividend Equivalents(1) |
| Robert C. Biesterfeld Jr | 2020 | $ | 129,576 | | (2) |
| 2019 | 87,638 | | (2) |
| 2018 | 52,634 | | (2) |
| Michael P. Zechmeister | 2020 | 52,513 | | (3) |
| 2019 | 22,776 | | (3) |
| Christopher J. O'Brien | 2020 | 35,241 | | (2) |
| 2019 | 32,237 | | (2) |
| 2018 | 47,043 | | (2) |
| Mac S. Pinkerton | 2020 | 28,134 | | (2) |
| 2019 | 18,841 | | (2) |
| Michael J. Short | 2020 | 34,442 | | (4) |
| 2019 | 34,564 | | (4) |
| 2018 | 46,701 | | (4) |
| | | Number of Shares
Acquired on
Exercise or
Vesting (#) | | | Value
Realized Upon
Exercise or
Vesting ($) | | | Grant Date
Fair Value
Previously
Reported in
Summary
Compensation
Table ($) | |
John P. Wiehoff
| |
(1)Dividends paid on these shares were paid directly to the NEO through the company's payroll system.
(2)Represents performance based restricted shares.
(3)Represents both performance based restricted shares and time based restricted stock units.
(4)Represents both performance based restricted shares and time based restricted shares.
| Options
Stock
| |
| 0
12,542
|
| |
$
| 0
1,117,394
|
| |
$
| 0
702,691
|
|
Andrew C. Clarke
34 | | Options
Stock
2021 Proxy Statement |
2020 EXECUTIVE COMPENSATION
Grants of Plan-Based Awards in 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name of Executive Officer | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | 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(2) |
| Threshold | Target | Maximum | Threshold | Target | Maximum |
| Robert C. Biesterfeld Jr. | 2/5/2020 | $ | — | | $ | — | | $ | — | | — | | — | | 34,611 | | (3) | — | | | $ | — | | $ | 2,053,817 | |
| 2/5/2020 | — | | — | | — | | — | | — | | — | | | 161,820 | | (4) | 72.74 | | 2,021,132 | |
| | 0 | | 1,435,000 | | 2,870,000 | | — | | — | | — | | | — | | | — | | — | |
| Michael P. Zechmeister | 2/5/2020 | — | | — | | — | | — | | — | | 11,772 | | (3) | — | | | — | | 698,550 | |
| 2/5/2020 | — | | — | | — | | — | | — | | — | | | 55,020 | | (4) | 72.74 | | 687,200 | |
| | 0 | | 603,500 | | 1,207,000 | | — | | — | | — | | | — | | | — | | — | |
| Christopher J. O’Brien | 2/5/2020 | — | | — | | — | | — | | — | | 7,663 | | (3) | — | | | — | | 454,722 | |
| 2/5/2020 | — | | — | | — | | — | | — | | — | | | 33,690 | | (4) | 72.74 | | 420,788 | |
| | 0 | | 334,750 | | 669,500 | | — | | — | | — | | | — | | | — | | — | |
| Mac S. Pinkerton | 2/5/2020 | — | | — | | — | | — | | — | | 9,365 | | (3) | — | | | — | | 555,719 | |
| 2/5/2020 | — | | — | | — | | — | | — | | — | | | 41,170 | | (4) | 72.74 | | 514,213 | |
| | 0 | | 480,000 | | 960,000 | | — | | — | | — | | | — | | | — | | — | |
| Michael J. Short | 2/5/2020 | — | | — | | — | | — | | — | | 7,240 | | (3) | — | | | — | | 429,622 | |
| 2/5/2020 | — | | — | | — | | — | | — | | — | | | 31,820 | | (4) | 72.74 | | 397,432 | |
| | 0 | | 378,000 | | 756,000 | | — | | — | | — | | | — | | | — | | — | |
| |
| 0
2,009
|
| |
| 0
178,982
|
| |
| 0
112,342
|
|
Robert C. Biesterfeld
| |
(1)Under the terms of the award and as further explained in the Non-Equity Incentive Plan Compensation subsection of Section IV Elements of Executive Compensation, beginning on page 22, the amount earned by each NEO will be based upon on the company’s or the appropriate business division's APTI, along with MBO achievement for 2020 and was paid to the executive in early 2021.
(2)The amounts in this column represent the grant date fair value for the respective awards. The performance based restricted shares, vested and unvested, earn dividends at the same rate as Common Stock. Because these dividends are considered compensation under the Internal Revenue Code, the dividends are paid to each NEO through the company’s payroll system.
(3)Represents the number of performance based restricted shares granted during the reported year to the NEO. These performance based restricted shares are available to vest over five calendar years beginning in 2020. The actual vesting percentage for each year is the year-over-year growth rate in diluted earnings per share, plus ten percentage points. Because the shares vest based on a formula of growth rates, the awards do not have a specific payout based on a target or a threshold. The standard delivery of all vested shares occurs the earlier of two years after termination of employment or two years following the end of the five-year vesting period.
(4)Represents the number of time based stock options granted during the reported year to the NEO. These stock options vest ratably over five calendar years beginning in 2020. Once vested, the participant may exercise the options for a period of ten years from the grant date. Any options unvested after five years are forfeited back to the company.
| Options
Stock
| |
| 0
1,882
|
| |
| 0
167,667
|
| |
| 0
107,077
|
|
Chad M. Lindbloom
2021 Proxy Statement | | Options
Stock
35 |
2020 EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-End 2020
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | Stock Awards |
| Name of Executive Officer | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Options
Exercisable | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Options
Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Shares or Units of Stock That Have Not Vested(1) | Equity Incentive Plan Awards: Market Value of Shares or Units of Stock That Have Not Vested(1) |
| Robert C. Biesterfeld Jr. | 11,644 | | (2) | 0 | | (2) | $ | 58.25 | | 12/4/2023 | | | | 81,889 | | $ | 7,686,920 | |
| 9,748 | | (2) | 0 | | (2) | 74.57 | | 12/3/2024 | | | | | |
| 30,150 | | (3) | 0 | | (3) | 63.58 | | 12/2/2025 | | | | | |
| 22,488 | | (3) | 5,622 | | (3) | 76.72 | | 12/7/2026 | | | | | |
| 19,032 | | (3) | 12,688 | | (3) | 87.15 | | 12/6/2027 | | | | | |
| 12,384 | | (4) | 8,256 | | (4) | 89.70 | | 3/1/2028 | | | | | |
| 15,188 | | (3) | 22,782 | | (3) | 88.87 | | 12/5/2028 | | | | | |
| 42,548 | | (4) | 63,822 | | (4) | 82.68 | | 5/9/2029 | | | | | |
| 32,364 | | (4) | 129,456 | | (4) | 72.74 | | 2/5/2030 | | | | | |
| Michael P. Zechmeister | 16,784 | | (4) | 25,176 | | (4) | 82.05 | | 9/3/2029 | 8,127 | | (5) | 762,881 | | 22,132 | | 2,077,531 | |
| 11,004 | | (4) | 44,016 | | (4) | 72.74 | | 2/5/2030 | | | | | |
| Christopher J. O’Brien | 7,676 | | (2) | 0 | | (2) | 58.25 | | 12/4/2023 | | | | 20,232 | | 1,899,178 | |
| 22,819 | | (2) | 0 | | (2) | 74.57 | | 12/3/2024 | | | | | |
| 30,150 | | (3) | 0 | | (3) | 63.58 | | 12/2/2025 | | | | | |
| 21,240 | | (3) | 5,310 | | (3) | 76.72 | | 12/7/2026 | | | | | |
| 17,976 | | (3) | 11,984 | | (3) | 87.15 | | 12/6/2027 | | | | | |
| 8,564 | | (3) | 12,846 | | (3) | 88.87 | | 12/5/2028 | | | | | |
| 6,738 | | (4) | 26,952 | | (4) | 72.74 | | 2/5/2030 | | | | | |
| Mac S. Pinkerton | 8,368 | | (2) | 0 | | (2) | 68.81 | | 12/7/2021 | | | | 16,973 | | 1,593,256 | |
| 6,853 | | (2) | 0 | | (2) | 61.91 | | 12/5/2022 | | | | | |
| 17,965 | | (2) | 0 | | (2) | 58.25 | | 12/4/2023 | | | | | |
| 11,576 | | (2) | 0 | | (2) | 74.57 | | 12/3/2024 | | | | | |
| 15,606 | | (3) | 0 | | (3) | 63.58 | | 12/2/2025 | | | | | |
| 10,348 | | (3) | 2,586 | | (3) | 76.72 | | 12/7/2026 | | | | | |
| 8,966 | | (3) | 5,978 | | (3) | 87.15 | | 12/6/2027 | | | | | |
| 5,128 | | (3) | 7,693 | | (3) | 88.87 | | 12/5/2028 | | | | | |
| 1,084 | | (4) | 1,626 | | (4) | 79.92 | | 1/3/2029 | | | | | |
| 8,234 | | (4) | 32,936 | | (4) | 72.74 | | 2/5/2030 | | | | | |
| Michael J. Short | 6,030 | | (3) | 0 | | (3) | 63.58 | | 12/2/2025 | | | | 19,089 | | 1,791,884 | |
| 9,996 | | (3) | 4,998 | | (3) | 76.72 | | 12/7/2026 | | | | | |
| 16,914 | | (3) | 11,276 | | (3) | 87.15 | | 12/6/2027 | | | | | |
| 8,088 | | (3) | 12,132 | | (3) | 88.87 | | 12/5/2028 | | | | | |
| 6,364 | | (4) | 25,456 | | (4) | 72.74 | | 2/5/2030 | | | | | |
| |
| 0
2,819
|
| |
| 0
251,145
|
| |
| 0
156,874
|
|
Michael J. Short
| | Options
Stock
| |
| 11,186
3,546
|
(1)
| |
| 217,520
274,195
|
| |
| 137,335
192,546
|
|
(1)The 2015-2018 performance based restricted share grants are available to vest over a five year period based on the financial performance of the company. The vesting formula for the 2015-2018 awards are based on the year-over-year percentage growth in diluted earnings per share, plus ten percentage points. Any performance based restricted shares unvested after five years are forfeited back to the company. The standard delivery of all vested shares occurs the earlier of two years after termination of employment or two years following the end of the five-year vesting period.
(2)The 2011-2014 performance based stock option grants were available to vest over a five year period based on the financial performance of the company. The actual vesting percentage for the 2011 and 2012 award is determined by the following formula: year-over-year growth rates in income from operations and diluted net income per share are averaged, and then five percentage points are added to that number. The vesting formula for the 2013-2014 awards is based on the year-over-year percentage growth in diluted earnings per share, plus ten percentage points. Any performance based stock options unvested after five years were forfeited back to the company. Once the options vested, they are exercisable for a period of ten years from the date of grant under the option award agreement.
(3)Represents the number of time based stock options granted during the reported year to the NEO. These stock options are available to vest ratably over five calendar years beginning in the calendar year after the year of grant. Once vested, the participant may exercise the options for ten years from the grant date.
(4)Represents the number of time based stock options granted during the reported year to the NEO. These stock options are available to vest ratably over five calendar years beginning in the year of grant. Once vested, the participant may exercise the options for ten years from the grant date.
(5)Upon Mr. Zechmeister's hire as chief financial officer in August 2019, C.H. Robinson awarded him a special one-time based restricted stock unit award. This one-time award vests ratably on the anniversary of the grant date over three years, contingent on Mr. Zechmeister's continued service and was intended to serve as a replacement of equity awards Mr. Zechmeister forfeited from his previous employer. If Mr. Zechmeister separates from service other than due to death, disability, or change in control prior to September 3, 2022, the unvested restricted stock units will be forfeited back to the company. One-third of the vested restricted stock units will be delivered annually to Mr. Zechmeister on September 3 in the years 2020-2022. The fair value is established on the market price of our common stock on the date of grant.
(1) | 1,892 of these shares are under a time-based vesting award and the balance vest based on the financial performance of the company. | | | | | | | |
| 36 | | 2021 Proxy Statement |
2020 EXECUTIVE COMPENSATION
Option Exercises and Stock Vested During 2020
| | | | | | | | | | | | | | | | | |
| Name of Executive Officer | No. of Shares Acquired on Exercise or Vesting | | Value Realized Upon Exercise or Vesting | Grant Date Fair Value Previously Reported in Summary Compensation Table |
| Robert C. Biesterfeld Jr. | Options | 0 | | | $ | 0 | | $ | 0 | |
| Stock | 0 | | | 0 | | 0 | |
| Michael P. Zechmeister | Options | 0 | | | 0 | | 0 | |
| Stock | 4,063 | | (1) | 404,959 | | 333,369 | |
| Christopher J. O’Brien | Options | 40,501 | | | 1,355,215 | | 533,329 | |
| Stock | 0 | | | 0 | | 0 | |
| Mac S. Pinkerton | Options | 0 | | | 0 | | 0 | |
| Stock | 0 | | | 0 | | 0 | |
| Michael J. Short | Options | 31,618 | | | 800,257 | | 405,229 | |
| Stock | 1,861 | | (1) | 150,983 | | 96,762 | |
(1)These shares vested pursuant to a time based shares award.
Nonqualified Deferred Compensation(1) | | | | | | | | | | | | | | | | | | | | |
Name of Executive | | Executive
Contributions
in Last Fiscal
Year ($) | | | (2)
Registrant
Contributions
in Last Fiscal
Year ($) | | | Aggregate
Earnings in
Last
Fiscal Year
($) | | | Aggregate
Withdrawals/
Distributions ($) | | | (3)
Aggregate
Balance at
last
Fiscal Year
($) | |
John P. Wiehoff | | $ | 0 | | | $ | 2,800,130 | | | $ | 10,560,188 | | | $ | 3,310,129 | | | $ | 66,070,008 | |
Andrew C. Clarke | | | 0 | | | | 529,872 | | | | 365,121 | | | | 0 | | | | 2,530,156 | |
Robert C. Biesterfeld | | | 0 | | | | 529,872 | | | | 30,662 | | | | 130,985 | | | | 2,949,763 | |
Chad M. Lindbloom | | | 0 | | | | 529,872 | | | | 1,051,410 | | | | 562,731 | | | | 8,202,374 | |
Michael J. Short | | | 0 | | | | 470,610 | | | | 451,151 | | | | 0 | | | | 2,961,173 | |
| | | | | | | | | | | | | | | | | |
| Name of Executive Officer | Executive Contributions in 2020 | Registrant Contributions in 2020(2) | Aggregate Earnings in 2020 | Aggregate Withdrawals/ Distributions | Aggregate Balance at December 31, 2020(3) |
| Robert C. Biesterfeld Jr. | $ | 0 | | $ | 2,517,604 | | $ | 1,908,721 | | $ | (56,312) | | $ | 9,964,676 | |
| Michael P. Zechmeister | 0 | | 856,295 | | 220,707 | | 0 | | 2,840,412 | |
| Christopher J. O’Brien | 0 | | 557,407 | | 1,393,935 | | (206,597) | | 7,174,953 | |
| Mac S. Pinkerton | 0 | | 681,210 | | 580,758 | | (138,475) | | 3,407,950 | |
| Michael J. Short | 0 | | 526,638 | | 529,293 | | (226,434) | | 3,860,685 | |
(1) | All awards referred to in this table are in the form of performance based restricted shares. | | | | |
| |
(1)All awards referred to in this table are in the form of performance based restricted shares, except Mr. Short's 2015 time based restricted share award and Mr. Zechmeister's 2019 time based restricted stock units award.
(2)All values in this column represent the closing market price of the company stock on the grant date of the restricted share award.
(3)All values in this column are based on the closing market price of the company stock as of December 31, 2020.
(2) | All values in this column represent the closing market price of the company stock on the grant date of the restricted share award. | | | | | | | |
| 2021 Proxy Statement | | 37 |
(3) | All values in this column are based on the closing market price of the company stock as of December 31, 2017. |
31
2020 EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
The company does not have a separate severance pay plan for NEOs. As part of Mr. Zechmeister's employment agreement, he would have received a payment of $710,000 if his employment was terminated other than for documented performance or misconduct issues, or if his role and associated compensation was substantially changed without his consent, on December 31, 2020. See the disclosure made under the heading Employment Agreements, page 25 for further information related to Mr. Zechmeister's employment agreement, including the terms and timing for the potential severance payment described above.
The following table lists the potential value of accelerated vesting of unvested performance
sharesbased restricted share awards and
performance-basedtime based stock options upon termination of employment in the case of change in control, death, or disability of our NEOs. For this purpose, change in control is defined as (i) the ownership by a person or entity of more than 50 percent of the Common Stock of the company, (ii) the completion of a merger or consolidation or sale of all or substantially all of the company’s assets where the company’s directors and shareholders prior to the transaction do not comprise at least 60 percent of the board of the surviving entity and 60 percent of its shareholder base, respectively, or (iii) a majority of the Board of Directors are no longer “continuing
directors.”directors”. The amounts listed are calculated based on the assumption that the NEOs’ employment was terminated or that a change in control occurred on December 31,
2017,2020, the last day of our reporting year. C.H. Robinson does not gross up payments to executive officers due to a change in control.
| | | | | | |
Name of Executive | | Benefit and Payments Upon Termination | | Change in Control,
Death or
Disability | |
John P. Wiehoff | | Vesting of nonvested stock options | | $ | 6,137,118 | |
| | Vesting of nonvested restricted shares | | | 10,752,593 | |
Andrew C. Clarke | | Vesting of nonvested stock options | | | 1,249,656 | |
| | Vesting of nonvested restricted shares | | | 2,027,626 | |
Robert C. Biesterfeld | | Vesting of nonvested stock options | | | 991,209 | |
| | Vesting of nonvested restricted shares | | | 1,883,716 | |
Chad M. Lindbloom | | Vesting of nonvested stock options | | | 1,341,390 | |
| | Vesting of nonvested restricted shares | | | 2,250,886 | |
Michael J. Short | | Vesting of nonvested stock options | | | 902,276 | |
| | Vesting of nonvested restricted shares | | | 2,208,579 | |
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation
| | | | | | | | |
| Name of Executive Officer | Benefits and Payments Upon Termination | Change in Control, Death, or Disability |
| Robert C. Biesterfeld Jr. | Vesting of nonvested stock options | $ | 3,779,592 | |
| Vesting of nonvested restricted shares | 7,686,920 | |
| Michael P. Zechmeister | Vesting of nonvested stock options | 1,227,638 | |
| Vesting of nonvested restricted shares | 2,077,531 | |
| Christopher J. O’Brien | Vesting of nonvested stock options | 805,325 | |
| Vesting of nonvested restricted shares | 1,899,178 | |
| Mac S. Pinkerton | Vesting of nonvested stock options | 841,599 | |
| Vesting of nonvested restricted shares | 1,593,256 | |
| Michael J. Short | Vesting of nonvested stock options | 760,036 | |
| Vesting of nonvested restricted shares | 1,791,884 | |
2020 EXECUTIVE COMPENSATION
S-K,
we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of John P. Wiehoff, our President, Chairman, and Chief Executive Officer (the “CEO”):For 2017, our last completed fiscal year:
the annual total compensation of our median employee was $52,606; and
the annual total compensation of our CEO, as reported in the Summary Compensation Table included on page 27 of this proxy statement, was $6,834,187.
Based on this information, for 2017, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 130:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of RegulationS-K.
We identified our median employee based on the base salary plus overtime actually paid during fiscal year 2017 to all members of our workforce (including full-time, part-time and temporary employees), other than our CEO and Milgram & Company Ltd. employees, who were employed on October 1, 2017.
In determining the employee population from which we identified the median employee, we excluded the approximately 333 employees who were employed by Milgram & Company Ltd., a company we acquired in 2017.
For purposes of determining the base salary plus overtime actually paid, we included the amount of base salary the employee received during the year, and the amount of overtime the employee received during the year. We included adjustments for annualizing the pay for any permanent employees who were employed by us for only part of the year.
32
