A shareholder’s notice of recommendation must set forth: | (a) | as to each person whom the shareholder proposes be considered for nomination for election as a Director | |
| (i) | the name, age, business address and residence address, | |
| (ii) | his or her principal occupation or employment during the past five years, | |
| (iii) | the number of shares of Company common stock he or she beneficially owns, | |
| (iv) | any other information relating to the person that is required to be disclosed in solicitations for proxies for election of Directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and | |
| (v) | the consent of the person to serve as a Director, if so elected; and | |
| (b) | as to the shareholder giving the notice | |
| (i) | the name and record address of shareholder, | |
| (ii) | the number of shares of Company common stock beneficially owned by the shareholder, | |
| (iii) | a description of all arrangements or understandings between the shareholder and each proposed nominee and any other person pursuant to which the nominations are to be made, and | |
| (iv) | a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person(s) named. | |
Board and Committee Oversight Responsibilities The Board has adopted a Statement of Policy Regarding Director Nominations, setting forth qualifications of Directors, procedures for identification and evaluation of candidates for nomination, and procedures for recommendation of candidates by shareholders. | | | 14 |2021 ProxyAs set forth in the Statement of Policy, a candidate for Director should meet the following criteria:
| |  |
| Governance• must, above all, be of proven integrity with a record of substantial achievement.
• must have demonstrated ability and sound judgment that usually will be based on broad experience. • must be able and willing to devote the required amount of time to the Company’s affairs, including attendance at Board and Committee meetings and the annual shareholders’ meeting. • must possess a judicious and somewhat critical temperament that will enable objective appraisal of management’s plans and programs; and • must be committed to building sound, long-term Company growth. |
Director Participation and Relationships 2020 presented unprecedented challenges for the Company, necessitating an increased number of Board meetings. Consequently, theThe Board held fifteenfour meetings during 2020 (the majority were telephonic),2023, and all of the Directors who served in 20202023 were present at each meeting. Each Director also attended all of the meetings of each committeeCommittee of which he or she was a member in 2020.2023.
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| Governance of the Company |
The Board has adopted a policy stating that it is in the best interests of the Company that all Directors and nominees for Director attend each annual meeting of the shareholders of the Company. The policy provides that the Board, in selecting a date for the annual shareholders meeting, will use its best efforts to schedule the meeting at a time and place that will allow all Directors and nominees for election as Directors at such meeting to attend the meeting.attend. The policy further provides that an unexcused absence under the policy should be considered by the Governance and Nominating Committee in determining whether to nominate a Director for re-election at the end of his or her term of office. All of the Directors attended last year’s annual meeting of shareholders. No family relationships exist between any of the Company’s Directors and executive officers.Executive Officers. There are no arrangements or understandings between Directors and any other person concerning service as a Director. CompensationBoard Diversity and Tenure
Consistent with the Company’s Corporate Governance Guidelines, the Nominating Committee Interlocks and Insider Participation During fiscal 2020, Marc Bertoneche, Douglas M. Britt, Laura Dempsey Brown, Cary Chenanda, Kennon Guglielmo, Christine L. Koski, Alexander Schuetz and Gregory Yadley served on the Compensation Committee. None ofBoard seek diversity among the current members of the CompensationBoard. The Nominating Committee has been an officer or employeeand the Board believe that considering diversity in terms of our Company. Additionally, none of our executive officersgender, race, national origin, as well as geographic, cultural and subject matter experience, creates a Board that can best serve as a memberthe needs of the Company and its shareholders, and are important factors that are considered when identifying individuals for Board membership. In addition, diversity with respect to tenure is important to provide for both fresh perspectives and deep experience and knowledge of the Company. Therefore, we aim to maintain an appropriate balance of tenure across our Directors.
In furtherance of the Board’s active role in succession planning, the Board has appointed or nominated 4 new Directors since 2020. Our Directors reflect those efforts and the importance of diversity to the Board. The Board of Directors adheres to the “Rooney Rule” with respect to its consideration of board candidates, which requires the Board to consider female and minority candidates in connection with vacancies. The Board is committed to considering multiple diverse candidates in evaluating any vacancy on the Board to underscore Helios’s commitment to diversity. In 2022, following the retirement of former Director Marc Bertoneche, the Board was able to further enhance its gender diversity with the nomination and subsequent election of Diana Sacchi to the Board. Of the last three independent Board Members that have been appointed or nominated since 2020, the Company is proud to report that two-thirds or sixty-six percent (66%) have been female. The six independent directors or compensation committee of any other entity that has one or more executive officers serving as a member ofon our Board or Compensation Committee.are now composed of 33% female Directors (excluding our President & CEO Josef Matosevic). In furtherance of the Board’s active role in diversity, 50% of the Committee Chairs are women. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s Directors, officersOfficers and holders of more than 10% of the Company’s Common Stock to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and any other equity securities of the Company. ToExcept as disclosed below, to the Company’s knowledge, based solely upon a review of the forms, reports and certificates filed with the Company by such persons, all of the Company’s Directors, officers,Officers, and holders of more than 10% of the Company’s Common Stock complied with the Section 16(a) filing requirements in 2020, except for2023. In 2023, (i) each of Philippe Lemaitre, Doug Britt, Laura Dempsey Brown, Cary Chenanda, Diana Sacchi and Dr. Alexander Schuetz who filed onea late Form 4 late.that reported one late transaction. Communications with the Board of Directors Shareholders and other parties interested in communicating with our Board may do so by writing to the Board, Helios Technologies, Inc., 1500 West University Parkway,Attn: General Counsel & Secretary, 7456 16th Street East, Sarasota, Florida 34243. Under the process for such communications established by the Board, the Chairman of the Board reviews all such correspondence and regularly forwards it, or a summary of the correspondence, to all of the other members of the Board. Directors may at any time review a log of all correspondence received by the Company that is addressed to the Board or any member of the Board and request copies of any such correspondence. Additionally, correspondence that, in the opinion of the Chairman, relates to concerns or complaints regarding accounting, internal accounting controls and auditing matters is forwarded to the Chair of the Audit Committee.
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| Governance of the Company |
Independence and Committees of the Board of Directors | | | Current Members: Doug Britt (Chair) Laura Dempsey Brown Philippe Lemaitre The Audit Committee held 8 meetings in 2023. Each of the current members of the Audit Committee is financially literate and satisfies the heightened independence standards of Rule 10A-3 under the Exchange Act. | | The Board determined, under applicable SEC and NYSE rules, that all of the members of the Audit Committee are independent, and that Mr. Doug Britt meets the qualifications as an Audit Committee Financial Expert, and he has been so designated. The Audit Committee is responsible for, among other things: - Reviewing and approving the selection of the Company’s independent public accountants who will prepare and issue an audit report on the annual financial statements of the Company and a report on the Company’s internal controls over financial reporting; - Establishing the scope and fees for the prospective annual audit with the independent public accountants; - Reviewing the results thereof with the independent public accountants; - Reviewing and approving non-audit services of the independent public accountants; - Reviewing compliance with existing major accounting and financial policies of the Company; - Reviewing the adequacy of the financial organization of the Company; - Reviewing management’s procedures and policies relative to the adequacy of the Company’s internal accounting controls; - Reviewing areas of financial risk and providing fraud oversight; and - Reviewing compliance with federal and state laws relating to accounting practices and to review and approving any transactions with affiliated parties. The Audit Committee also invites and investigates reports regarding accounting, internal accounting controls or auditing irregularities or other matters as well as provides oversight for the Company’s compliance with its Code of Conduct, including its confidential ethics reporting hotline. The Code of Conduct is available on the Company’s website at: https://ir.heliostechnologies.com/governance-docs. No waivers of the Company’s Code of Conduct were requested or granted during the year ended December 30, 2023. The Code of Conduct is available on the Investors page of our website and from the Company upon written request sent to the Corporate Secretary, 7456 16th Street East, Sarasota, Florida 34243. |
| | | Current Members: Diana Sacchi (Chair) Cariappa Chenanda Alexander Schuetz (During 2023, Doug Britt served on the Compensation Committee) The Compensation Committee held 4 meetings in 2023. Each of the current members of the Compensation Committee satisfies the heightened independence standards of Rule 10C-1 under the Exchange Act. | | The Compensation Committee is responsible for, among other things: - Overseeing the Company’s compensation program, including executive officer and key management compensation; - Administering the Company’s equity incentive and non-employee Director fees plans; and - Carrying out the responsibilities required by the rules of the SEC and NYSE. The Compensation Committee may delegate any of its responsibilities to one or more subcommittees, each to be comprised of at least two of the Compensation Committee’s members. For information regarding the role of our executive officers and the Compensation Committee’s independent compensation consultant in determining or recommending the amount or form of executive compensation, see “Executive Compensation — Compensation Discussion and Analysis” below. None of the current members of the Compensation Committee have been an Officer or employee of the Company. Additionally, none of our executive officers serve as a member of the Board of Directors or Compensation Committee of any other entity that has one or more executive officers serving as a member of the Board or Compensation Committee. |
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| Governance of the Company |
| | | Current Members: Laura Dempsey Brown (Chair) Cary Chenanda Philippe Lemaitre (During 2023, Alexander Schuetz served on the ESG Committee) The ESG Committee held 4 meetings in 2023. | | The ESG Committee is responsible for, among other things: - Developing and recommending to the Board corporate governance guidelines and policies for the Company; - Overseeing the annual individual performance evaluation on all Board members; - Overseeing the enterprise-wide risk management policies of the Company; - Monitoring the Company’s compliance with good corporate governance standards; and - Overseeing the Company’s significant ESG and sustainability activities and practices. The ESG Committee is committed to ensuring the governance of the Company is in full compliance with the law, reflects generally accepted principles of corporate governance, encourages flexible and dynamic management and effectively manages the risks of the business and operations of the Company. |
| | | Current Members: Alexander Schuetz (Chair) Doug Britt Diana Sacchi (During 2023, Laura Dempsey Brown served on the Nominating Committee) The Nominating Committee held 4 meetings in 2023. | | The Nominating Committee is responsible for, among other things: - Developing and recommending to the Board for adoption, qualifications for members of the Board and its Committees and criteria for their selection; - Reviewing and recommending changes which the Committee determines advisable; - Identifying and reviewing the qualifications of potential candidates to fill Board positions; - Reviewing the suitability for continued service of each Board member prior to term expiration; and - Recommending to the Board the nominees to stand for election at each annual meeting of shareholders. The Nominating Committee will take whatever actions it deems necessary under the circumstances to identify qualified candidates for nomination for election as a member of the Board, including the use of professional search firms, recommendations from Directors, members of senior management and shareholders. All such candidates for any particular seat on the Board are evaluated based upon the same criteria, including those set forth above and such other criteria as the Committee deems suitable under the circumstances existing at the time of the election. |
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| Governance of the Company |
Our Purpose, Mission and Shared Values Shape our Culture 
The Helios Business System was developed through a transparent stakeholder process that included our employees, customers, and investors. Internally, we worked across the organization to look at our future—how we are going to win, and how we are going to design and build a business system to create a strong differentiation and separate ourselves from the competition. This continues to be the heart of what we do. Our purpose is to provide trusted global brands that deliver technology solutions that ensure safety, reliability, connectivity and control. Our Shared Values include accountability, integrity, inclusion, innovation, and leadership. We believe we embody our purpose and values in all that we do as an organization. This is the foundation for the Helios Business System. We learned that to be our best, we must achieve our mission which includes: | • | | Protecting the business by driving cash flow, developing innovative new products, and creating strong, customer-centric relationships |
| • | | Thinking and acting globally by leveraging global resources and assets, supporting diverse end markets, accelerating innovation, being “in the region for the region” |
| • | | Diversifying markets and revenue, by leading with new technology, and recognizing new opportunities |
| • | | Developing talent by embracing diversity, promoting our Shared Values, promoting a learning organization, instilling a customer- centric culture, and engaging global talent |
Our mission is inclusive of not only our strong emphasis on being financially responsible, but also recognizing the non-financial aspects of our business and strategy: the environmental, social and governance topics we must consider if we are to continue to grow and deliver on our purpose. | | | | | 2024 Proxy Statement| 15 |
| Governance of the Company |
As an organization, we use our Shared Values as a guide to ensure we act in everyone’s best interest to achieve our mission. We seek to implement our Shared Values throughout our approach, including the ability to recognize and manage Environmental, Social and Governance (ESG) Matters In 2020, Helios(“ESG”) risks and its Board affirmed its commitment to ESG matters as an integral part of the Company’s business strategy. To underscore its commitment, the Board recently created a new Committee entitled “Environmental, Social and Governance,” whose charter will be to assist the Company in its oversight of corporate social responsibilities, significant public policy issues, health and safety, and climate-change related trends and other global ESG matters in addition to overseeing all corporate governance matters pertaining to the Company.opportunities at Helios. These Shared Values are:
| | |  | | 2021We work to keep our promises We communicate openly and transparently to build trust and create strong relationships through clear expectations and collective goals. We seek to do the right thing We are honest, fair, transparent, and always act with the highest standards of ethics to create the trusting relationships that are the lifeblood of our business. We treat others with dignity and respect We believe we should treat others as we want to be treated by creating an inclusive, welcoming environment for our colleagues and their ideas. We cultivate intellectual curiosity to inspire creativity We create innovative solutions to solve real problems that delight our customers and set us apart from our competition. We passionately deliver excellence We are driven to exceed expectations and to motivate excellence in our organization. |
These Shared Values are for the entire organization and every employee, no matter their role or function. They are the foundation from which we work and drive our organization forward each day. | | | 16 |2024 Proxy Statement| 15 | | |
| Governance of the Company |
Aligning our Company’s Goals with our Culture Meeting our goal of becoming the leading provider of premier products and solutions in specialty niche markets through innovative product development and acquisition requires an overarching approach that addresses the core values of our entire business. Every component of our Purpose, the structures we are creating to reach our goal, and our clear step-by-step tactics reflect this goal. Our Shared Values and Mission seek to implement our goal, allowing and embedding that focus across our organization. Our end market performance illustrates the value of deploying these key ESG enablers throughout the Company as well. | | | 
| |  Building in the Region, for the Region
Being “in the region, for the region” is a direct reflection of the strength of the Helios Business System and our ability to use our Shared Values as a guide to create new and innovative approaches to our business. As part of our transformation to an integrated operating company, we have developed a unified operations strategy across the companies in our Electronics and Hydraulics segments. This strategy leverages the breadth of our global footprint and depth of our manufacturing capabilities. In support of our mission to “Think and Act Globally”, we are driving “in the region, for the region” manufacturing to better align supply chain and manufacturing value streams with customers geographically to shorten lead times, reduce inventory, optimize costs, and mitigate global supply risks. Established manufacturing centers provide scale in North America, and we continue to expand centers in both Asia and Europe to meet growing global demand. Manufacturing locations in the U.S., Canada, Mexico, Italy, Germany, South Korea, China and India provide a range of manufacturing options. We source and supply what we can from a regional perspective while staying true to our focus on delivering high-quality innovative products to our customers. This approach has helped us expand our engineering capacity, scale resources, and develop additional internal capabilities and allow us to produce and sell our solutions locally. This creates value for our customers and shareholders by significantly reducing sourcing and supply risks, avoiding freight costs, and reducing quality issues. The supply chain for electronics and hydraulic components is complex with many risks, but when viewed through an ESG lens, the opportunities are clear. Our approach to building “in the region, for the region”, as part of our manufacturing strategy, helps us not only address risks like material shortages, environmental footprint and adding diverse talent to our team, but enables us to positively impact the economies and communities in which we operate, all while protecting our margins. Environmentally, this approach has a significant impact on shipping-related emissions and mitigating weather-related risks and delays. From a social and economic perspective, we are positively impacting local economies. We can attract and retain local talent with diverse perspectives: those who help us create innovative new solutions as well as those in operational functions such as Finance and Human Resources.  Proven Merger and Acquisition Framework
We have a proven Merger and Acquisition framework around both flywheel and transformational acquisitions which adds value for our customers, partners and shareholders, as well as provides development opportunities for our employees. We seek companies with innovative cultures who will add capacity and capabilities, fit within our strategic imperatives, and actively prioritize environmental and social responsibility. Our recent acquisitions are examples of strong companies with strong cultures firmly aligned with our commitment to corporate responsibility. The clear priorities we have for companies we acquire are realized because our proven integration model focuses on the retention of employees, strong customer relationships, brand integrity, leveraging engineering expertise, and management culture. | | |
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| Governance of the Company |
 | Manufacturing and Operational Centers of Excellence (“CoE”) |
Our world-class manufacturing is a competitive tool and a key component of our long-term strategy. As part of our transformation to an integrated operating company, we have developed a unified operations strategy across the companies in our Electronics and Hydraulics segments. This strategy leverages the breadth of our global footprint and depth of our manufacturing capabilities. We completed key Capital Expenditure Projects including the creation of two Regional Operational Centers of Excellence for our Hydraulics segment in North America, the construction of a second facility in Tijuana, Mexico to meet demand and growth for our Electronics segment, as well as the construction of an automated warehouse at our Faster, Italy location. | 1. | The facility expansion in Mishawaka, Indiana from our acquisition of Daman Products Company (“Daman”) has become the Hydraulic Manifold Solutions CoE. Helios added 50,000 square feet to the existing 72,000 square foot facility and will combine the manifold machining and integrated package assembly operations from Sun Hydraulics in Sarasota, Florida, the integrated package business from Faster Inc. in Maumee, Ohio and expands Daman’s capacity for core organic growth. |
| 2. | Additionally, Faster’s North American quick release coupling manufacturing has been relocated from Maumee, Ohio to one of the Sun Hydraulics facilities in Sarasota, Florida as part of the ‘Hydraulic Valve and Coupling Solutions CoE’. We have transformed approximately 27,000 square feet of existing space to streamline operations, provide space for future coupling manufacturing, and facilitate technological advancements through our Robert E. Koski Center of Engineering Innovation, enabling the creation of cutting-edge hydraulic solutions for our valued customers. |
| 3. | In response to the growth opportunities for products from its Electronics segment, Helios has expanded into a newly constructed building in Tijuana, Mexico, adding 68,000 square feet of capacity to its existing 198,000 square foot facility. While water-based technology and software solutions remain at the core of Balboa’s expertise, the new facility supports the future growth of the Balboa business along with Helios’ overall Electronics segment, which also includes Enovation Controls and our recent acquisition, i3 Product Development (“i3”). As a part of Helios’ ‘in the region for the region’ manufacturing and operating strategy, several Enovation Controls products are already being manufactured at Balboa and this capacity expansion will enable further room for growth as Helios continues to become a global integrated operating company. The expanded space will also be leveraged for growth in intra- and inter-segment system sales, wire harnessing, and innovative product development. It showcases the Company’s dedication to strengthening its leadership positions in its respective end markets while leveraging those strengths to collectively advance its technological capabilities. This will enable Helios to offer even more innovative solutions to diversified end markets. |
| 4. | Our Faster location has been expanded with two additions. First, Faster has added an additional 3,200 square meters (34,400 square feet) of production shopfloor to increase its turning capacity on behalf of SUN and NEM with the aim of becoming a central production hub for the entire EMEA region. A new department of milling machines and cast-iron manifolds has been added for products intended for Faster’s Original Equipment Manufacturers (“OEM”). A prototype department has been created exclusively for R&D testing and sampling for customers as well. Second, our Faster location has been expanded with a newly constructed automated warehouse. The new innovative, flexible, and efficiently built automated warehouse expands our Regional Hydraulics capabilities in Europe and enables us to better service our customers while leveraging a best-in-class manufacturing and operating approach. Built over a nine-month period, the Faster Automated Warehouse is an advanced facility that measures 2,100 square meters (22,600 square feet) has capacity for 6,900 pallets and can service up to 190 pallets/hour. Its central location will allow service to customers globally and advances the Company strategy to support increased: |
| • | | Efficiency: The Faster Automated Warehouse means increased efficiencies — and opens 2,100 square meters (or 22,600 square feet) of floor space in the existing building that can be leveraged for manufacturing. |
| • | | Sustainability: The automated warehouse enables space optimization in the plant to be dedicated to new assembly and turning lines. Additionally, it minimizes the consumption of land by allowing for verticalization. |
| • | | Innovation: The automated processes provide for more accurate and timely service for customers. |
| • | | Flexibility: The layout of the automated warehouse is expandable and enables handling of multiple pallet sizes depending upon the requirements of customers globally. |
| • | | Growth: Together with space saving and flexibility comes the ability to grow production as well as space to allow employees to be trained on and develop new skills tied to new processes and technologies. |
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| Governance of the Company |
| 5. | Our Faster, India location has been doubled with the addition of 22,000 square feet. This expansion was carried out for the production of turned components for quick couplings, starting assemblies, and direct sales for the Indian local market. Additionally, the expansion of the production capacity for the milling of cast iron manifolds is underway which includes Faster, Sun Hydraulics and NEM, and will serve as a key production hub in India serving the Motion Control Technologies and Fluid Conveyance Technologies (“MCT-FCT”) Helios Hydraulics segment. |
| | |  | | AcceleratingInnovation |
Engaging diverse teams to create products, many of which keep end users and our environment safer, starts with a customer-centric culture of innovation, a system solution for our customers, and continues through our responsible approach to manufacturing. We believe the acquisition of i3 (as described below), will expedite the Company’s efforts to be the most innovative company in the Hydraulics and Electronics market with profitable engineering, consulting and product development services for customer specific solutions. In most cases, when we design products, especially electronics, we do so in co-development and co-design with the OEM. This allows us to understand and assess any environmental or social risks associated with the solution. Innovation also extends to the investments we make which results in more energy and materials efficient design and modification. Creating Components that use Less Energy Through testing and advanced simulation, we intend to improve the energy efficiency of the products we create, including reducing energy use and heat waste. Our brands have adopted this practice as an ongoing initiative for all product designs. As an example, Faster, in their development of a new quick release coupler, will design all components involved with oil flow to be hydrodynamic to improve total coupler flow rate capacity resulting in lower energy consumption. At Sun Hydraulics, testing is performed to determine leakage between the ports of the valve that could result in the valve failing due to pressure drop within the circuit. This approach is not only a critical safety step, but from an environmental standpoint there is also improved energy efficiency of a hydraulics system (less electric or mechanical power to power the system). The eSenseTM solution boasts 100% of the performance at 30% of the power consumption while the LoadMatchTM valve offers 30% or more energy savings from automatic control settings at reduced loads.  | Diversifying Markets and Products |
Helios continues to focus on providing systems and solutions that solve our customers most pressing requirements. With a differentiated product portfolio and through continuous innovations, we believe our team is in prime position to create aggressive go-to market approaches focused on system sales. Helios also has a responsibility to create products that are long-lasting, keep end-customers safe, and leave as little negative impact on the environment as possible. We regularly review our processes to determine where and how they can be improved to reduce our energy consumption and that of our customers. We also recognize this focus leads us to new markets and solutions that align with our own focus on social and environmental responsibility, for example, in 2023 our commercial strategy was enhanced by enabling our customers’ success with integrated electro-hydraulic and engineered solutions from across the “busbar” of technologies in our portfolio. One of the key drivers of future growth for both the Electronics and Hydraulics segments is our system sale approach that leverages electronic and hydraulic solutions from our trusted brands. While protecting our existing business, we will provide strategic OEM partners with “system solutions” that ensure the safety, reliability, connectivity and control of their applications. Our two segments are comprised of approximately 125 direct sales and application specialists serving our customers’ needs. We will continue to use this long successful approach while augmenting our strategy by pursuing system sales at key global OEM’s to drive growth. Our Hydraulics segment have critical components that identify ourselves in the architecture of the machines as well as creates alignment with stakeholders and expands the space and scope of our strategy. With a combination of Motion Control Technologies (“MCT”) which include the Sun Hydraulics, NEM, Daman, Schultes and CFP brand, with Fluid Conveyance Technologies (“FCT”), which include our Faster and Taimi brands, we are creating critical sealed parts for our customers who demand top performance. The conversations with our customers have now switched from providing great performing parts from our individual brands, to a value proposition which provides: Parts in body solutions which optimize space, flow & performance; Machine casting bodies which reduce weight and cost; | | | | | 2024 Proxy Statement| 19 |
| Governance of the Company |
Global supply capability – scalable based on manufacturing in region; and, Quick attach couplers which improve uptime and attachment accuracy. We will accelerate promotion of the Helios brand through system sales while remaining focused on our well-established operating brands. 
Our Electronics segment consists of leading international brands in custom-tailored solutions for many industrial and commercial applications, including engines, engine-driven equipment and specialty vehicles with a broad range of rugged and reliable instruments such as displays, controls and instrumentation products through our Enovation Controls, Zero Off, Murphy and HCT brands. With the Balboa and Joyonway brands, we are also an industry leader in the health and wellness market providing globally comprehensive electronic control systems with proprietary and patented technology for therapy bath and traditional and swim spas from a single source. Our focus is on creating customized systems that solve complex problems for our customers. This allows us to target customers or industries that see value in this level of integration, and as a result, our product list contains a wide variety of OEM applications. Product categories include traditional mechanical and electronic gauge instrumentation, plug and play CAN-based instruments, robust environmentally sealed controllers, hydraulic controllers, pumps and water flow systems, engineered panels, process monitoring instrumentation, printed circuit board assembly and wiring harness design. Our systems can be used in both mobile (DC power applications), as well as fixed (AC power applications). | | | 20 |2024 Proxy Statement | | |
| Governance of the Company |
2023 Product Highlights Diverted & Connected Solutions Diverter valves are very popular to make machines versatile and easily install hydraulic tools that require additional lines not originally available. The tilt cylinder flow is the function typically diverted to control for example grapple buckets for telehandlers, excavators or tractor front loader. Thanks to the ‘Diverted & Connected’ Faster solution, all the necessary elements to equip the machine are in a single and smart product, making the installation easier and increasing the reliability of the system. Installation will be fast and easy with an increased reliability of the hydraulics system with potential leak points being reduced due to the additional hoses and fittings. This solution also includes valves and manifolds from Sun Hydraulics, NEM and Daman. 
OpenPV | | | | OpenPVTM is a sophisticated set of tools that empowers software developers to create complex applications for rugged OpenPVTM | | displays offered by Enovation Controls. Offered as a free download and designed from the ground up to be a modular system, OpenPVTM enables developers to create the UI/UX on Company Linux-based OpenViewTM displays with tools such as Qt and Crank Storyboard software development tools. This platform offers experienced developers the freedom to design and implement their tailored applications using their preferred tools and contemporary programming languages. | | 
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Cygnus Remote Support Platform | | | | Cygnus Remote Support Platform allows manufacturers and distributors the ability to provide their technicians the tools to be anywhere | 
| | with a customer using video streaming and screen sharing features, as well as access equipment software to be able to remotely service the product real time in the field. Developed as a software as a service (SaaS) platform to address customers’ challenge of providing service and support to their end customers in a timely, cost-effective manner, service and support technicians can remotely access equipment, see everything a user sees, and identify a solution in record time. |
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| Governance of the Company |
Additionally, the Board adopted several new policies and procedures that underscore its commitment to ESG matters. Highlights include:Taimi Swivel Cartridge
| | | | The integration of the Taimi Swivel Cartridges through the distribution channel of its operating company, Sun Hydraulics provides the | ESG Policy & Procedure Highlights
| • Corporate Responsibility Policy (including Human Rights Policy)expansion of product offerings for Sun Hydraulics longstanding sales distribution channels around the globe.
• Code of Conduct for SuppliersThis complementary technology allows Taimi’s uniquely designed components to synergize with Sun’s conventional high quality hydraulic solutions to enter new end markets. These include forestry, marine, offshore, robotics, cranes, underground and Third-Party Vendors (including Policy Against Human Trafficking & Slaveryopen pit mining, construction and demolition, agriculture, railway construction and maintenance, solar power, drilling and material handling.
| | • Conflict Mineral Policy
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PowerViewTM P70 | | | | With its combination of advanced features, premium display quality, and rugged durability, the PowerViewTM P70 is the perfect solution | 
| | for both powersports and industrial customers who demand the best and another example of leveraging a new platform across more than one end market to achieve a multiplier effect. With a 7-inchedge-to-edge, all glass, full-color touchscreen format, the all-new P70 sets the industry standard for sunlight-readability from its optically bonded 1000 Nit glove-friendly display. It also boasts the full I/O (input/output) complement of the PV485, making it a powerful and versatile device. It is packed with features such as Bluetooth, CAN and an internal GPS receiver and 2.5 zone audio out, making it the best choice for powersports OEMs who demand top performance and functionality. 2.4GHz Wi-Fi will also be available in a future software release. For the industrial | | market, it offers the same core technology, rugged reliability and high-performance as the PV700 in a higher value format. Designed with all-weather durability, it features a rugged, IP67-rated housing that protects against water, dust, and shock, making it suitable for use in the harshest environments. |
How we Approach Environmental, Social and Governance (ESG): A key to our continued growth and innovation abilities is having a deep awareness and understanding of not only our own environmental and social impacts, but those that impact our entire value chain. This perspective is notably reflected in the integrated approach we use to design and manufacture the components we create: from solutions that reduce our customers’ impact on the environment all the way through to how we source materials and use efficient and safe manufacturing practices. This drives us to design and manufacture highly engineered motion control and electronic control technologies: to make the world better, safer, and even more fun. | 1. | Internally, our shared values of accountability, Integrity, Inclusion, Innovation and Leadership, are essential to our Helios Business System and guide us to ensure our ESG responsibilities are not managed in silos but connected holistically across every function of our organization. |
| 2. | Externally, investor and customer-centric engagement, as well as frameworks such as the United Nations Sustainable Development Goals (UN SDGs) and the Sustainability Accounting Standards Board (SASB), assist us in identifying ESG impacts that could potentially affect our business and provide insight to the environmental and social topics influencing the industries we serve. |
| 3. | The key characteristics of our augmented strategy – a scalable, relevant plan that guides us to make progress in a meaningful and achievable manner – is also reflective of how we embed ESG across our operations, including: |
Employing the Helios Business System to hold ourselves accountable; Establishing Board-level ESG oversight and ethical policies; | •Anti-Hedging Policy (Update) | | Managing non-financial and ESG topics to support our long-term business strategy; |
Recognizing and acting upon our own environmental impacts and how a changing climate could impact our business, the markets we serve and the products we design; | | | 22 |2024 Proxy Statement | | |
| Governance of the Company |
Attracting and developing a global, diverse team of innovators and providing safe, efficient manufacturing facilities; and Supporting our employees and the communities in which we operate. And just like the components we create that help make the world better, our comprehensive approach to ESG makes us better. We invite you to read about our progress in this proxy and follow our journey at: https://heliostechnologies.com/esg. Holding Ourselves Accountable through Strong ESG Governance | | |  | | Board Level ESG Governance |
ESG Committee Accountability starts with board-level oversight of ESG to address non-financial topics of interest to our investors, shareholders, and other stakeholders. In March 2021, the Board created the ESG Committee to oversee risks related to the Company’s environmental, social, corporate governance practices, as well as enterprise risk and other matters. In 2022, we added the Chairman of our Board to the ESG Committee. The purpose of the ESG Committee is to (a) develop and recommend to the Board corporate governance guidelines and policies for the Company, (b) monitor the Company’s compliance with good corporate governance standards and oversee the evaluation of the Board and management against these standards, and (c) oversee the Company’s significant ESG and sustainability activities and practices, which include, among other things, reviewing our ESG and sustainability strategy, initiatives and policies and updates from the Company’s management committee responsible for significant ESG and sustainability activities; charitable contributions by the Company; and community reinvestment activities and performance thereof. 2023 Board Evaluation Program | | | | SELF-EVALUATION | | The Board understands that honest and practical evaluations are crucial for good governance and Board effectiveness. Annual evaluations focus on two primary functions of a Board: oversight and decision-making, with an emphasis on Board process, and Board composition. The ESG Committee oversees the annual evaluations with the assistance from the General Counsel & Secretary, and conducts a multi-step process to disseminate, collect and review the results. The ESG Committee then discusses the results of the evaluations and other feedback in a closed session with the Board. | BOARD AND COMMITTEE EVALUATION PROCESS • Code of Business Conduct and Ethics (“Code”) (Update)
| | IMPLEMENTATION & RESULTS | | Confidential evaluations and subsequent discussions from the evaluations were instrumental in making enhancements to meeting materials, committee compositions, the Board evaluation process, and interactions with our business leaders, providing Directors with further opportunities for continuing education. |
As summarized below, 2020 was
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| Governance of the Company |
| | |  | | ESG Responsibility throughout the Organization |
2023 Risk Management Program A successful Risk Management program is critical for the Company to both understand the risks it faces as well as understand the significance of those risks. Effective risk management means attempting to control, as much as possible, future outcomes by acting proactively rather than reactively. An effective risk management program offers the potential to reduce both the possibility of a yearrisk occurring and its potential impact. In 2022, the Board charged the ESG Committee with oversight and responsibility of significant progress towardsthe Company’s Risk Management Program, and to work closely with management to ensure key controls and processes are in place. In response to this new oversight, the Company worked with the ESG goals for Helios acrossCommittee to create a strong internal process to effectively identify, analyze, and manage risks facing the globe.Company. Rather than an annual risk assessment at an enterprise level, the Company created an internal risk management structure administered by subsidiary sub-committees formed at Sun Hydraulics, Faster, Enovation Controls and Balboa, whereby representatives within each business unit, including Finance, Human Resources, Sales, Operations, Safety and Information Technology, meet on a quarterly basis to:  
GOVERNANCE/BUSINESS CONDUCTIn turn, these risks were reported up the General Counsel & Secretary and Chief Executive Officer, who then reported on a quarterly basis to the ESG Committee regarding risks facing the Company, mitigation factors that management has employed to address those risks, and other information relating to how risk analysis is incorporated into the Company’s corporate strategy and day-to-day business operations. The ESG Committee, in turn, reported out these risks to the full Board on a quarterly basis. In 2023, the Company organized presentations around top trends to consider and presented a Safety as well as Cybersecurity presentation for the Committee and Board. Additionally, the Sun Hydraulics sub-committee was expanded to include facilities in Mishawaka and Buffalo Grove and renamed ‘Helios Hydraulics Americas.’
Our Operations function continues to have the main oversight responsibility to ensure Helios provides enhanced disclosure on environmental issues and continues a targeted approach to address risks and material concerns in the way we design, manufacture, and deliver our products. This approach will help eliminate risks to shareholders and their financial interests while promoting leadership accountability. | | |  | | Ethics and Compliance |
The Helios Legal function oversees the Ethics Hotline and Global Ethics Code, including ethics and discrimination training of all employees, and works with the Human Resources department to launch company-wide initiatives like our charitable giving platform through America’s Charities and the Helios Employee Assistance Fund. Our high ethical standards are the DNA that drive us as we protect the business, think and act globally, and diversify end markets. Our commitment to fundamental ethical principles, including diversity and respect for the dignity of every individual, is reflected in our ethical policies and compliance measures. Now more than ever, in such a rapidly changing world, we leverage and lean on our collective guiding principles and codes to provide clear guidelines towards ethical practices and decisions. Code of Ethics Helios is committed to conducting ourconducts business with the highest degree of ethics, integrity, and integrity.compliance with laws worldwide and our Code of Ethics and Business Conduct Code reflects this commitment. Our Codes include policies to protect our company’s reputation, one of our most valuable assets. Maintaining our reputation is critical to retaining our talented employees, loyal channel partners and supportive shareholders. This expectation is memorializedCode also exists in conjunction with both the policiesCorporate Responsibility Policy and procedures applicable to our employees, vendors, and partners across the globe. All our operating companies maintain their own individual ethics and code of conduct policies, the collective policies of which are also incorporated into our corporate policy, the Code. In 2020, every Helios employee across the globe was required to complete an ethics training course and to acknowledge the Code. In addition, Helios companies maintain ethical and conduct standards for their suppliers across the globe and require all suppliers to execute a Code of Conduct for Suppliers and Third-Party Vendors. In 2020, we Annually, our colleagues acknowledge receipt and understanding of this Code, and attend required ethics training courses in connection with the Code. Helios tracks compliance through a third-party organization who provides training on these topics as well as learning and development. Courses include such topics as: Workplace Harassment; Diversity and Inclusion; Non-Retaliation for Reporting; Information | | | 24 |2024 Proxy Statement | | |
| Governance of the Company |
Security; Conflicts of Interest; Fair Dealing; Confidential Information & Intellectual Property; Data Privacy; Creating a Respectful Workplace; Corporate Assets; Environmental; Health & Safety; Fair Employment Practices; Maintaining Books & Records; Anti-Bribery & Anti-Corruption; International Trade Controls; Antiboycott Laws; Antitrust & Fair Competition Laws; Compliance with Laws; Rules & Regulations; Communications & Public Affairs; and Contracts Compliance Policy. Anonymous Inquiries and Reporting: We provide an anonymous third-party incident management program, Navex, for all employees to report concerns and suspected violations of the Code. Navex is available to all employees via the internet or through a telephone hotline. The third-party employees who interact with third party suppliersanswer the Reporting Hotline are trained to attendlisten carefully, ask questions and document the situation accurately and anonymously. There is never any retaliation for making a training session on the prevention of human trafficking and slaveryreport in our supply chain. Helios maintains a confidential ethics and reporting hotline thatgood faith. Navex can be accessed by employees all over24 hours a day, seven days a week via the globe (heliostechnologies.ethicspoint.com). Both the Audit and ESG Committees of the Board oversee the ethics and compliance programs of the Company. Our Chief Legal and Compliance Officer oversees our ethics and compliance programs and provides advice and counsel on a regular basis to Helios and its employees on these topics.following web address: www.heliostechnologies.ethicspoint.com.
Information Security Disclosure
Our Board remains active in reviewing our information security exposure and risks. In 2020, our Governance and Nominating Committee, composed of all independent Directors, was responsible for reviewing our information security risks quarterly. Some of our Directors have information security experience and have the knowledge and skills to provide valuable guidance. Beginning in 2021, the same responsibility will move to the newly formed ESG committee. Our Board also receives a comprehensive review of information security measures annually.
In 2020, Helios bolstered its Cyber Security posture by implementing a three-tiered security strategy, focusing on user training, email hygiene, and real-time monitoring. This strategy also assists in identifying and mitigating information security risks. To address user training, Helios implemented a cyber security training platform to raise employee awareness across all its businesses. These trainings are delivered monthly and provide trainings ranging from password best practices to recognizing malicious links. Additionally, Helios has standardized a powerful email filter, protecting users and recipients from dangerous email attachments. Further, Helios implemented a powerful 24/7 security operations center (SOC) to monitor every Helios computer system in real-time and alert the IT team of any potential danger. The SOC also utilizes a preconfigured IT “playbook” to automatically neutralize threats based on predetermined criteria. Together, these tiers of security greatly reduce the Helios attack surface. Helios has not experienced a material information security breach in the last three years.
Responsible Corporate FundingPolitical Contributions
Consistent with the policies set forth in our Code, Helios does not use any corporate funds for the purposes of political advocacy. We recognize that using corporate funds for political advocacy is restricted in many territories. Helios identifies using corporate funds for political advocacy purposesWe define this as making donations or payments for lobbying or campaign contributions, or contributions to tax-exempt groups including trade associations. contributions. In 2020,2023, Helios did not use any corporate funds to engage in political advocacy with any individual, group, trade association, or political entity. Information Security Helios’s three-tiered security strategy, focusing on user training, email hygiene, and real-time monitoring continues to assist us in identifying and mitigating information security risks. We provide monthly cybersecurity training for employees and have also implemented multi-factor authentication (MFA), principles of Zero Trust and password complexity policies for all accounts to help prevent unauthorized access to our systems and data. We also employ a Security Operations Center (SOC) for real time end point protection monitoring. The SOC uses Artificial Intelligence (AI) as well as experienced security professionals to address information security threats. In 2023, the Company participated in penetration testing at the corporate level as well as Sun Hydraulics, Faster, Enovation Controls and Balboa. Penetration tests employ a battery of hacking tools used to map out our forward-facing assets and to find vulnerabilities that could be exploited. The Company’s IT Department uses this penetration testing to evaluate its current posture and to make adjustments as needed. These results are also reviewed with the executive leadership team and the Company’s Board of Directors. Testing continues to be an annual event and will include newly acquired companies as they go through our integration process. The methodology used for Penetration testing is as follows: 
| | | | | | | | | 16 |2021 Proxy Statement Pre-
Engagement | | Intelligence Gathering and Recon |
| Exploitation | | Post Exploitation | | Reporting | Governance of the Company Define goals and objectives
|
Environmental and Social Responsibilities Matters
Since its inception, Helios has developed business policies and practices that support our business model and philosophy of running an ethical organization that embraces its corporate citizenship responsibilities. During 2020, a highly unusual year, our business responded with both a socially responsible and environmental approach.
Our focus:
Giving back to our planet by becoming more energy efficient and environmentally friendly;
Giving back to our communities, supporting their causes during an eventful season of political, social and health unrest;
Giving back to our employees by driving inclusivity, diversity and equity in the workplace; and
Giving back to our shareholders, aligning our governance practices to their interests and vision.
Our commitment to sustainable, ever-evolving efforts in the areas of environmental and social responsibility is clearly outlined by the allocation of resources that we dedicate to ensure we can have a focused approach to planning, execution, continuous improvement, auditing and tracking of our environmental, social and governance (ESG) efforts.
ENVIRONMENTAL RESPONSIBILITY
| | | | | | | | | In 2020, Helios made several strides in its efforts to be responsible stewards of the environment. Our commitment was underscored by the creation of a new role, Senior Vice President of Global Manufacturing Operations. In this role, our senior VP will take a holistic approach to our operations as they relate to cost, quality, | |  Compile relevant information about target including DNS, public IP and employee usernames
| | 
Exploit any potential findings | | 
Inventory any new information gathered | | 
| safetyCompile vulnerabilities, exploit vectors and environmental stewardship. This position will have the main oversight responsibility to ensure Helios provides enhanced disclosure on environmental issues and that it continues its new direction of a targeted approach to address risk and material concerns in the way we design, manufacture and deliver our products while eliminating risks to shareholders and their financial interests and promoting leadership accountability. Further, as detailed below, Helios companies across the globe had tangible results in the elimination of waste, reducing our carbon footprint, and being good stewards to our environment. |
TALENT DEVELOPMENT, DIVERSITY, INCLUSION AND COMPENSATION
| | | | | | | We believe that human resource management’s material impact to our business cannot be overstated. From the increase of employee productivity through engagement and a positive work environment to the bottom line impact the reduction of turnover can have, it is our intention to continue self-assessing and developing our ability to thrive in how we manage this critical aspect of our operation. | | 
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exploits |
In 2020, Helios continuedThe Company also extended its commitmentscyber-training out to talent development, diversity, inclusion and fair compensation practices. As set forth in the Company’s Code of Conduct & Business Ethics and the Corporate Responsibility Policy, Helios is committedemployees who do not normally have access to workplaces free of discrimination or harassment of any kind and focused on increasing diversity. As highlighted below, the Helios companies demonstrated their commitment to these topicscomputer systems through policies and procedures, training, hiring practices, and corporate events.classroom instructor led trainings.
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| Governance of the Company |
SOCIAL RESPONSIBILITY AND JUSTICE, CORPORATE CITIZENSHIP & ECONOMIC GROWTH
| | | | | | | | | In 2020, we celebrated fifty years of our pioneer business unit. Fifty years of establishing a strong presence as a corporate citizen. Although our historical commitment to enrich our local communities has never faltered, this past year’s unique social, health and financial developments | |  | |  | |  | |  | tested our resolve to balance being active corporate citizens, delivering products to maintain lifesaving and food production applications and safeguarding our business profitability. Although we have much to celebrate, we believe that all our efforts in social matters deserve a special focus. |
ToA large part of our success is reflective of the positive impact we make on the world around us. Our Corporate Responsibility Policy represents a vision for how we can continue to support Helios inimprove our company, including its special focus on corporate giving, volunteerism, employee relief, and other giving, the Company has partnered with a third-party to continue guiding and expanding our efforts to take action on important social issues that allow us not only to serve our neighbors, but to tell the world where we stand on relevant ethicalfinancial performance, by incorporating environmental sustainability and social issues. This partner, with a long tenure administeringresponsibility both in our daily operations and long-term goals. Key components of the social responsibility efforts of other organizations, will support our efforts to provide relief to our own employees while also identifying service opportunities that allow us to address a variety of social needs within our communities. It will also help us to track our actions and investment to deliver these services, creating public confidence and goodwill and mitigating the risk that negative publicity and potentially costly litigation can have in instances where an organization fails to take action or fulfill their duty on important social issues. Inappropriately managed social risks can also be detrimental to the value of a business and a threat to shareholder value. Our new program will help us with the oversight of these risks, as well as the effective management of our resources and those of our employees who are committed to exercise their civic and social duty in a responsible, compassionate and conscientious manner.policy include:
ENVIRONMENTAL MATTERS – OUR PLANET
| | | We take great pride in protecting the environment, and we want to preserve the beauty of our planet for generations to come.
Our commitment to being good stewards of our environment has continued not only with isolated energy consumptions actions, but with a systematic approach to monitoring our operations from a functionality, energy and quality perspective. Our approach focuses not only on a change in operations, but also on product design, and extending our energy-efficiency efforts to our end users. We also established metrics and associated with industry auditing firms to certify our efforts, resulting in important designations.
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| Governance of
Sustainability and the Company |
Here are some of our most significant accomplishments:
| | | Environmental Stewardship – Energy EfficiencyEnvironment
• Energy efficient product design and modification: These snapshots (pictured right) are from CFD Simulation (Computational Fluid Dynamics). There are two efficiencies gained with simulation. First, we optimize pressure drop in the valve to reduce energy consumption when the valve is in use. Second, simulation allows virtual optimization so there are fewer iterations done with real hardware, thus reducing material usage, processing, etc. This is an excellent illustration of our new way to handle product design and modification to ensure energy efficiency for us and our end users.
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Electricity improvements: In Italy, we improved energy efficiency by changing LED lights in production areas from 6,000 to 16,800 lumens while maintaining the same consumption in Watts. In Korea, our efforts resulted in an increased electricity efficiency from 87% to 95%.
Facility updates: We improved our cooling efficiency by switching from a straight cool unit to a Variable Air Volume (VAV) system, removed an old fire suppression system and upgraded to an environmentally friendly system, upgraded all new motors to high efficiency (greater than 95%) and created electric vehicle charging stations in 2020 with more to be installed in 2021.
Energy use monitoring:Our process now includes ultrasonic checks for leak determination and replacement of various fittings to reduce compressed air losses.
Product design improvements: We established a new control scheme for test stand control, increasing efficiency, reducing energy and heat waste and resulting in lower energy consumption for our customers.
Environmental Stewardship – Recycling
Reusage: Our business units reused packaging (up to 98% reusage rate), logistics waste and shipping materials intra-company and third party, creating a highly efficient, cost-effective and environmentally friendly packing and shipping recycling program. This effort included the collection of plastic trays that were sent back to suppliers for reuse.
Paper use reduction: By inserting the Quick Response Code (QR) code on packaging, it allowed for elimination of the paper manual. Our new system of reference drawings also eliminates the need of printouts. We eliminated paper catalogs by establishing a web-enabled catalog that allows original equipment manufacturers (“OEM”) and distributors to order and submit modifications online. In addition, we introduced three new environmentally friendly models to our MultiFaster product family, reducing the use of chemical painting resulting in reduction of business cost and paper usage.
Waste reduction: We streamlined processes to drastically reduce solid scraps and oil waste. All in-house generated scraps are now sold to scrap vendors for recycling. We also redoubled recycling and scrap material management in our facilities.
Recyclable packaging: Helios business units changed packaging material for shipment from Sealed urethane foam and film to recyclable materials (paper and air cushion). Further use of urethane foam and film has been permanently discontinued as of 2020.
Facility recycling efforts: At one of our Florida facilities, we recycled 25 tons of steel, 20 tons of aluminum and 27 tons of cardboard in one year. In Italy, our “Green Together” initiative established organic food in vendor-only machines, avoiding the use of plastic, recycling and reusing material and exclusively utilizing a water dispenser to reduce paper consumption. In addition, we have fully transitioned from plastic to cardboard coffee cups in all vending machines.
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| Governance of the Company
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Environmental Stewardship – Emission & Waste Reduction
| | | | | | | • New technology: We received a John Deere Supplier Innovation Award for our industry-leading design that enabled a 75% reduction in leak points and purchased components on a combine harvester (pictured right).
• Process improvements: In Korea, we changed our washing method for integrated packages from a solvent/thinner product to a degreasing process. Compared to 2018, this change reduces the usage of methylene chloride from 3,000 liters to 0 liters annually.
| |  | We have eliminated the use of Freon 113 in manufacturing, we are converting our warehouse forklifts from propane to electric power to reduce C02 emissions and we are converting all hand soldering operations to lead free solder. In 2020, we installed spill protection and plastic reduction in our facilities.
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One of our Florida facilities successfully diverted 270,000 gallons of wastewater per year from the local sewer system.
Goals have been set for all new and revised product designs to reduce the probability of leaks, reducing environmental contamination. We maintain supplier relations ensuring vendors provide certification on an annual basis on their compliance with REACH (Registration, Evaluation, and Authorization and Restriction of Chemicals), to ensure our third-party associates are truly committed to the protection of human health and the environment from chemicals contained in our manufactured goods and as well as and not operating in conflict mineral regions. We also require our suppliers to ensure they are compliant with RoHS (Restriction of Hazardous Substance) Directive to ensure their products are “lead-free” and do not contain any of the 10 substances restricted by RoHS. This helps to ensure our suppliers are truly committed to the wellbeing of their associates, while protecting the environment from toxic chemicals.
| | | Social Matters
How do we serve others?
As reflected in our Corporate Responsibility Policy Helios is committed to giving back to the communitiescontains six areas in which we serve as well as encouraging positive social action. We strive for alignment with the recognized United Nations Sustainable Development Goals (SDGs). We believe these goals are the roadmap for businesseswe can make significant strides
in enhancing our processes to align their business objectives, strategybecome a more efficient and execution with the world in which they exist.
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Conflict Minerals; Carbon and Climate; Product Innovation; Recycling; and Environmental Accountability.
| | + | At Balboa Denmark, many team members make
Social Responsibility We believe that responsible business practices require mutual respect, a strong ethical code, and an investment
into improving the conscious choicelives of those within our community. In addition to rideupholding the values set forth in our
Code of Business Conduct and Ethics, we continue to enhance seven areas in which we strive to promote a
responsible corporate culture: Human Rights; Diversity and Inclusion; Employee Engagement;
Talent Development; Community Investment; Employee Safety, Health and Wellness; Product Safety,
Quality, and Brand. We recognize that the mission to build a better world for people, our planet, and our organization, begins with
each one of us. Therefore, all of our employees, no matter their bikesrole or area of responsibility, are expected to work instead of their cars (pictured right) to create less CO2 emissions
read and protectcomply with the environment.Corporate Responsibility Policy. |
Human Rights Policy Helios strives to operate with the highest ethical standards including upholding human rights. We believe all people should be treated with dignity and respect. We maintain a Human Rights Policy in addition to our Code of Business Conduct and Ethics, as well as our Code of Conduct for Suppliers and Third-Party Vendors. Guided by the United Nations Sustainable Development Goals, the policies cover specific subjects to ensure human rights are protected across our value chain and that we are creating a fair and ethical workplace, including: Fair Treatment; Diversity and Equal Opportunity; Stakeholders and Society; Fair Labor and Compensation Standards; Safe Work Environment; Natural Resources; and Reporting of Violations. Conflict Minerals Policy As a corporation with a global supply chain, we recognize we have a responsibility to improve our own business operations by identifying and mitigating, where practicable, any processes that may harm the planet or the people that live on it. Our Conflict Minerals Policy operates in conjunction with our Code of Conduct and Supplier Code. The policy also aligns with the goals set forth in the Organization for Economic Cooperation and Development Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. Helios strives to go beyond its obligations under Section 1502 of the Dodd-Frank Act and is working to improve our ability to trace and investigate any potential conflict mineral issues. Our goal is supply chain transparency and the promotion of high ethical standards among our suppliers. To do so, we have established a management system for compliance with conflict minerals regulations and a cross- functional team to implement the conflict minerals compliance strategy, consisting of members from supply chain, finance, legal & compliance, and operations, overseen by the General Counsel & Secretary. | | | 20 26 |20212024 Proxy Statement
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| Governance of the Company |
DIVERSITY, INCLUSION & EQUITYTo further strengthen our governance, we have partnered with a leading third-party provider of compliance management processes, tools, and expertise to augment our conflict minerals compliance processes and management system. Our reporting process with our provider ensures comprehensive coverage and brings subject matter expertise to complement our internal knowledge and experience.
Code of Conduct for Suppliers and Third-Party Vendors Helios’s culture emphasizes individualHelios’ reputation is based on not just our own conduct, but the conduct of those with whom we do business. This is most evident in the longevity of the relationships we have with many of our suppliers. We value our reputation for conducting business with integrity initiative and responsibility.respect. Our Code of Conduct for Suppliers and Third-Party Vendors (“Supplier Code”) provides a foundation for Helios and its Suppliers to build and maintain a strong business relationship based on trust, respect, integrity, and fairness.
Under the Helios Human Rights Policy, and Helios Policy Against Human Trafficking and Slavery for Suppliers, we require suppliers, business partners, contractors, and other third parties (collectively, “Suppliers”) to share our same commitment to ethical business practices as outlined in the Supplier Code including: Ethical Compliance; Integrity and Transparency; Compliance with the Law including the United Kingdom Modern Slavery Act of 2015, California Transparency in Supply Chains Act of 2010 and operational standards of the International Convention for the Safety of Life at Sea (SOLAS) and Countering America’s Adversaries Through Sanctions Act (CAATSA); Fair Labor Standards and Human Rights; Protection of Information, Assets and Interests; and Health, Safety, Environment, and Quality. We expect our Suppliers to adopt these standards throughout their supply chains by adopting efficient management policies, procedures, and training to uphold the standards set forth in the Supplier Code. Social Standards for Suppliers All Suppliers must treat their employees and those they conduct business with fairly and equally. As a Company, we require that all working hours are reasonable and fairly compensated in accordance with applicable laws and regulations. Suppliers shall ensure that all employees are paid living wages and operate in humane work conditions. Suppliers must also ensure that all labor is voluntary and that all employment contracts are freely entered into. We prohibit any usage of forced or child labor. Suppliers shall not engage in any action that utilizes forced or child labor in any aspect of their supply chain. Helios is committed to conducting our business ethically and with integrity. The Company’s commitment to diversity and inclusion is at the very core of our talent acquisition and overall employment practices. We define diversity and inclusion as: | | | | | | | • Diversity – a culture that values uniqueness
• Inclusion – an invitation for all individuals and groups to participate in every aspect of company life
• Belonging – the feeling each employee should have in bringing their authentic self to work and being accepted for who they are
• Echoing the words of our founder, Bob Koski, our commitment is to ensure that throughout our organization, we are fostering an environment that is harassment and discrimination free, that brings new and different perspectives and that attracts and retains a diverse workforce. We understand that it is our differences that bring us together to collectively achieve the same goals. We are determined to go beyond mere compliance with the law.
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Here are some of our recent accomplishments around diversity, inclusion and equity summarized in three main categories:
| | | | | | | | | ASPIRATIONAL GOALS
| | | | INCREASING REPRESENTATION
& ENGAGING CULTURE
| | | | LEARNING, DEVELOPMENT,
& AWARENESS
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ASPIRATIONAL GOALS
Strategy and execution at the board and senior leadership level was just the beginning. We regularly seek our employees’ input, thoughts, feedback and collaboration as we continue to buildensuring a safe work environment where our colleagues feel comfortable being themselves,for all affiliates, subsidiaries, employees, vendors, and where they feel valued, respectedsuppliers. Suppliers must comply with all applicable laws and have a real opportunity to excel within our company.
Employees were surveyed and given a voice to weigh in on a variety of issues from core values, mission, their history with the organization, etc. We accomplished this via a variety of awareness sessions, development opportunities and monthly round tables where senior leaders interact, exchange information and listen to each one of our employees. We take great pride in maintaining an open and direct communication that develops a sense of belonging.
Each one of our operating companies maintains their own individual ethics and code of conduct policies as well as being fully committed to the Code, which sits above each operating company policy. Our organization lives these policies and takes steps to prevent discrimination and harassment in our workplaces, promotes ethical behavior, and supports diversity and inclusion within our workforce and business partners.
As noted above, Helios’s confidential ethics and reporting hotline that can be accessed by employees all over the globe under the oversight of our Chief Legal and Compliance Officer. Reported violations against our diversity and inclusion philosophy and practices are thoroughly investigated, and corrective actions are swift and effective.
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| Governance of the Company
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INCREASING REPRESENTATION & ENGAGING CULTURE
Relationships with Third Parties
| | | | | | | | |  | | | | Increasing our commitment to the respect and dignity of all human life, we require all our third-party suppliers to execute a Code of Conduct for Suppliers and Third-Party Vendors which includes our Policy Against Human Trafficking and Slavery. |
Throughout the procurement process, we audit third party businessesregulations, including internal guidelines, to ensure they have receivedthat all employees are appropriately qualified and understand the policy. We issue questionnairesequipped to work safely.
Helios Policy Against Human Trafficking and require attestations that they agree to abide by it. We are committed to a zero-tolerance policy with respect to human trafficking and slavery. We train our internal procurement personnel to identify and report any behaviors inconsistent with our policy. We clearly communicate thatSlavery for usSuppliers For Helios to maintain a working relationship with any third parties, regardless of the country or type of cultural environment in which our vendors or associates operate, they must ensure that our commitment against any type of slavery or inhumane treatment is embedded in how they conduct business and how they hire, treat and maintain their own workers. No compromises. Internal EffortsHelios requires Suppliers to verify that their product supply chain standards do not utilize human trafficking or slavery. We train our internal procurement personnel to identify and report any behaviors inconsistent with our policy. Helios reserves the right in its contracts to audit Suppliers to ensure that standards related to human trafficking and slavery are upheld. Suppliers must be able to demonstrate compliance at the request and satisfaction of Helios.
| | |  | | Environmental |
Helios Sets Goal of Achieving Net Zero GHG Emissions By 2050 In 2022, the Company announced it has set a long-term commitment to achieve net zero greenhouse gas (“GHG”) emissions by 2050 for its operated assets. Initial efforts and steps are underway as the Company develops more detailed plans to reach this long-term commitment. The Company has already completed Scope 1 and Scope 2 greenhouse gas inventory, has begun gathering relevant Scope 3 data, and is working on detailed emission-reduction roadmaps for its major operated assets. Read more about the Company’s progress and follow its ESG journey at: https://www.heliostechnologies.com/esg. Energy We conducted our first Scope 1 and Scope 2 GHG emissions inventory in 2021 and continued this process in 2022 as well as 2023. This growing body of data will help us establish interim GHG emissions targets along our journey to achieving net zero GHG emissions by 2050. We advanced our “in the region, for the region” strategy and are establishing an operating footprint that will lead to reduced | | | | | | | | | Our | | 2024 Proxy Statement| 27 |
| Governance of the Company |
emissions. We implemented energy efficiency investments in our manufacturing operations, committed to measuring relevant Scope 3 GHG emissions, and outlined a plan with our third-party compliance partner to begin the process of gathering Scope 3 emissions data from our suppliers. You can find our most recent reported data within a fact sheet posted here: https://www.heliostechnologies.com/esg. Waste Helios has worked diligently across its subsidiaries to identify significant waste streams and reduce waste using production process redesigns, scrap reduction initiatives, electronic waste reduction, and elimination of hazardous materials. A recent example includes: investments in manufacturing technologies, such as a nitrogen blanket system to reduce solder dross in our PCBA wave solder process by as much as 70%. This reduces the wave solder by-product waste stream which is good for the environment and business. Water Water is a fundamental component of our business, especially for our hydraulics manufacturing operations, but an even more important commodity of the communities where we operate and live. In addition to water conservation efforts already at work across our companies, in 2021 we conducted our first water usage inventory companywide. We added a second year of data in 2022 and continued the process in 2023 and are establishing a baseline that will be used to measure future improvements. Examples include: Balboa retrofitted their water reclamation system and significantly reduced the amount of wastewater generated in their plastic injection molding process by recycling it through a cooling tower system. | • | | Sun Hydraulics has operationsinstalled two evaporators to greatly reduce the volume of wastewater sent to a municipal processing plant in twelve nationsour efforts to become a zero-discharge facility in the United States. |
 | Talent Development |
| “In alignment with our strategy, it is critical that we continue to cultivate, accelerate and elevate our talent across the globe: China, Korea, Germany, Italy, India, United Kingdom, Australia, Mexico, Denmark, Argentina, Brazil and the United Statesorganization.” - Josef Matosevic, President & CEO |
Staying true to our purpose and shared values underlies our focus on cultivating an environment that inspires our employees and encourages them to grow professionally. Helios engages in the development of employees through company-sponsored training and partnering with outside training and assistance programs. By encouraging team members to engage in training programs, our employees can acquire skills to support growth and development. Our workforce policies and programs not only improve the quality of life of our team members, but also attract talented people who want to contribute to our continued success. The majority of our subsidiaries have well-developed intern programs. Through strong partnerships with local universities and technical schools, we continually enhance our internship programs, and correspondingly, our community involvement. This allows us to increasingly attract and retain the skilled and diverse talent we need to reach our goals. It helps us to instill early in a colleague’s career a customer-centric culture and promote Helios as a learning organization.  | Helios Center of America. We can proudly report that 41% of our workforce is comprised of diverse, minority nationalities. Our organization isEngineering Excellence (HCEE) |
We continue to enhance both the Helios Center of Engineering Excellence (“HCEE”) in San Antonio, Texas and our customer experience center in Sarasota, Florida. This exemplifies our Shared Values and strategy to Lead with Technology and further demonstrates that our proven M&A strategy works. Together, they provide a living example of the Helios Business System to: Offer customers a competitive single-supplier solution that minimizes their risk and optimizes their applications; Accelerate development and create scalable platforms; Bridge the gap across our companies to capitalize synergies; Showcase our current and future innovations; Allow us to use our exclusive technology to quickly adjust customer-required design changes; | | | 28 |2024 Proxy Statement | | |
| Governance of the Company |
Benefit customers with cost savings, operating efficiencies, and other strategic benefits such as system packages that combine the very best of what Helios has to offer; and Drive market diversification and new product development activities, including third parties who augment our capabilities. | | | | | | | | | | committed to actively seek and support diversity and representation of minorities and women in the workplace.Social |
Our mission is reflective of the elements of our success: creating global diverse teams who work together to support our purpose. This includes embracing diversity and shared values, developing and engaging global talent, especially through a safe work environment, and promoting a learning organization. Diversity and Inclusion Diversity and inclusion, leadership development, and workforce equality are critical for the attraction and retention of top talent. At Helios, diversity extends beyond race and gender, to include disability, ethnicity, nationality, religion, sexual orientation, gender identity and expression. To increase awareness, among other organizational and talent development initiatives, Helios has a long history of devoting significant resources to supporting diversity and inclusion in our training sessions. One way we act on our convictions is by not only employing special needs employees, but also assigning a mentor to each one. We strive to create and develop opportunities for diversity throughout our organization. Notably, sixty percent (60%) of our executive officers are women. We While there remains work to be done, we have also made significant strides in increasing the representation of minorities within our workplace. Our global workforce is comprised of diverse, minority nationalities and our organization is committed to actively seeking and supporting diversity and representation of minorities and women in the workplace. As a diverse global organization headquartered in the United States, we are proud to have 43% of our colleagues located outside of the Americas. Training and Development 
Our employees align themselves with our shared values and Code of Business Conduct and Ethics. The Company, in conjunction with its workforce, is committed to the principle that respect for others involves recognizing the dignity of every individual and embracing global diversity. Helios is steadfast in its dedication to maintaining a workplace free from discrimination and harassment, actively advocating for diversity in both hiring and employment practices. Our leadership and employees are unwavering in their commitment to “doing the right thing by living with integrity,” which extends to caring for communities worldwide and the individuals within our employ. We shape our people strategy by prioritizing employee engagement to foster talent growth, enhance the overall employee experience, and leverage technology for the attraction, retention, and development of the future workforce. Our commitment to talent development is evident through various programs implemented across our business units. Among these initiatives is our launch of The 6 Types of Working Genius training rolled out across each of our segments. This program is aimed at identifying better ways for our colleagues to understand their gifts, challenges, and how to leverage their strengths within their own teams or projects they are on. We will continue to cascade this framework down throughout the organization, nurturing a common language across the globe. We remain steadfast in continually improving our Career Development Program (CDP), designed to target recent college graduates, and working students. The CDP offers genuine job rotations, strategically cultivating future leaders in essential business disciplines. Furthermore, both segments actively engage in summer internships, forge partnerships with local educational institutions, and provide ongoing training and upskilling opportunities. Throughout 2023, we successfully launched our global talent management system. This system encompasses Helios’ performance management, learning management, and career development initiatives. In accordance with our strategic objectives, it is imperative that we persist in cultivating, accelerating, and elevating talent throughout the entire organization. | | | 22 |2021 Proxy Statement
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Our commitment to a culture of learning extends to our M&A strategy. We acquire companies that value the development of employees and provide career opportunities in the communities where we operate. Our acquisition of Daman highlights this commitment. Daman’s training programs provide new and existing employees opportunities for career paths in manufacturing. This goal is achieved through curriculums that foster technical and team-based skills critical to success in the workplace. Safety Safety in the workplace is integral to our purpose, products and management system. The Helios Business System fosters a culture of safety through proactive awareness and prevention principles exercised within our safety management system. We are dedicated to ensuring the safety of our team members. Each entity upholds environmental, health, and safety policies aimed at fostering the operation of our business in a manner that safeguards the well-being of the public and our workforce. Many of our businesses feature onsite medical clinics, massage therapy, and occupational health treatment to mitigate industry musculoskeletal injuries. We provide a range of health and welfare programs to encourage employee fitness, wellness, and preventive healthcare. Additionally, our workforce has access to a confidential employee assistance program that offers professional counseling services to team members and their families. We are a company of innovators who work in a safety-first culture. We are also focused on designing machines and components that improve the end user’s experience and safety. Across companies, tools and methods are used to reduce risks and drive continuous improvement. Near miss reporting is a leading indicator to identify and mitigate risk factors in the work environment. Safety best practices are incorporated into team member communication to raise awareness and educate. Safety audits are performed to identify opportunities for further improvement. Our safety culture and system has allowed us to maintain our safety record even through growth and strategic acquisitions. This includes re-engineering workflows and adding dedicated safety staff. Additionally, we are continually establishing improvement efforts across all businesses to establish innovative solutions for the health and safety of the Helios Business System. We have further developed a Safety Timeline for Success to assess, implement, refine and optimize safety across our business. 
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Community Helios is committed to making meaningful contributions to the local communities in which we operate. We have a responsibility to take care of and serve the communities that allow us to succeed. With unique subsidiaries around the world, we tailor our charitable and community efforts to address the specific needs of the communities in which we operate. Our subsidiaries social efforts are mostly driven by entity leadership and Human Resources teams. Helios also encourages employees to bring forward ideas for social and charitable effort for leadership review. | | |  | | Helios Engage — a platform for employee global giving and volunteering In 2021, Helios launched a global workplace philanthropy initiative in partnership with America’s Charities called Helios Engage. Helios Engage enables employees to make charitable contributions on a secure platform where their contributions are eligible for a 100% corporate match. Our Helios Engage platform is accessed through a website where employees can make donations by credit card or payroll deductions. Employees can also upload proof of offline donations and Helios will approve a corporate match. Charitable organizations in America’s Charities platform include tens of thousands of nonprofits addressing causes including education, human rights, hunger, poverty, research, animal welfare, veteran assistance, disaster relief, and health services. Helios Engage will not only allow Helios to provide its employees with a platform to support a wide variety of charitable organizations but will also offer opportunities to volunteer and give back to the communities in which we live and work. Helios Engage also includes a dollar-for-dollar matching gift program and Employee Assistance Fund (EAF) where employees around the globe can receive financial assistance in times of hardship. Helios employees can donate to the EAF to directly support their colleagues in need. This partnership allows the Company to maximize its positive social impact through global charitable giving efforts and to give back to our communities through volunteerism. |
| | | | | Diversity & Inclusion Strategy & Commitment to Board Diversity
As demonstrated above, Helios believes that diversity and inclusion, leadership development, and workforce equality are critical for the attraction and retention of top talent. Helios believes that diversity extends beyond race and gender, and also includes disability, ethnicity, nationality, religion, sexual orientation, gender identity and expression. To create a more inclusive company, we are committed to taking diversity into consideration when assessing director nominees, senior
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management positions, and the general workforce level. It is our belief that our Board of Directors and senior management should possess a combination of skills, experience, and diversity of background necessary to lead the Company. Helios is committed to maintaining a gender-diverse Board of Directors. In the event that our Board no longer has an acceptable level of gender-diversity, we will immediately seek to include a new Board member who not | only satisfies our gender-diversity obligations but is exceptionally qualified. | | | | | | | | | |
LEARNING, DEVELOPMENT & AWARENESS
| | | | | Helios has a long history of devoting significant resources to embed diversity and inclusion in all our training sessions to increase awareness, among other organizational and talent development initiatives.
The following are some of the awareness and development sessions that were delivered to our employees across the globe:
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Workplace harassment training (2020)
Code of Ethics and Conduct training (2020)
Equal Employment Opportunity/Workforce Diversity Training
Inclusion Training for Managers, Supervisors and Frontline Leadership
Equality Policy
Stress Management Policy
Bullying & Harassment Policy
Ethical Business Policy
Excel, Known Consignor
Performance Management
Koski Equation and Core Values
Technical Knowledge OTJ training
New Hire Orientation
Leadership Development Series-Performance Management
Leadership Development Series-Emotional Intelligence
Leadership Development Series-EQ-I &EQ-I 360 Assessments & Coaching
Leadership Development Series-Myers Briggs Type Indicator (MBTI) Assessment, Individual Debrief and Group Session
Behavioral Interviewing
What Makes a Team
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Our Social Responsibility in Challenging Times – COVID-19
As discussed more fully in our 10-K, the COVID-19 pandemic caused, and continues to cause, significant economic disruption globally, and substantial uncertainty exists regarding the magnitude and duration of the pandemic and its economic impact. Helios took important steps to ensure our facilities remained operational and took many measures to give back to the community during these challenging times.
Taking Care of Our Own – Keeping Our Employees Safe During COVID-19
As an essential business, we took strides to continue to operate seamlessly, preserving our ability to provide components to our life saving and sustaining product applications. We took significant steps to ensure that our employees could safely return to work.
��� | | COVID Risk Reduction Program: We deployed transmission risk-mitigation measures and communication efforts across all facilities, which including safety protocol training, social distancing, single entrances, monitoring and auditing, special cleaning protocols and tracing, regular communications, onsite nurses’ stations with daily questions and temperature checks and, whenever possible, conversion to working from home and, in at least one of our business units, the conversion to a 4-day work week to reduce exposure and to facilitate extraordinary cleaning measures and sanitizing during weekly closure.
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Whenever possible team members worked from home. Manufacturing employees and support personnel continued reporting to work without any major business or customer care disruption.
We created and ensured adherence to strict safety protocol across business units to protect our employees and trace COVID-19 cases to avoid spread.
Executives, senior leaders, and board members took a 20% pay cut, other employees took salary reductions in varying amounts, furloughs, voluntary retirements and small reductions in force to preserve a healthy balance sheet and business as well as employment stability.
Our COVID Risk Reduction Program deployed regular communications of risk-mitigation measures and written and videography communications providing business, health and overall pandemic status updates.
Our COVID Health Crisis Leave Policy provided paid leave for those negatively impacted by illness, contact tracing, high risk and child-care/schooling challenges.
We maintained employee morale despite furloughs, temporary pay reductions and times of uncertainly via regular communications and creating an open-door policy where team members enjoyed the support of a proactive, service-oriented human resources team who provided guidance on COVID-19-related questions, unemployment compensation and other employment-related aspects of the pandemic.
Faster employees joined forces to support one of their own who suffered a serious medical emergency. They collected generous monetary donations and even prepared special t-shirts to show their support.
Enovation has an Employee Assistance Fund that provides financial support to employees in need. The fund paid out over $10,000 in 2020.
Taking Care of Our Neighbors
In 2020, we celebrated fifty years of our subsidiary, Sun Hydraulics LLC, and highlighted our journey as a strong corporate citizen. Although our historical commitment to enrich our local communities has never faltered, this past year’s unique social, health and financial developments tested our resolve to balance being active corporate citizens, delivering products to maintain lifesaving and feeding applications and safeguarding our business profitability.
| | | In these difficult times, we knew that we could not stay inactive or inwardly focused; reaching out to our community did as much for the community as it did for us. Not only were we able to make a difference but focusing on the least fortunate better allowed our team to deal with our own personal, family and team challenges. | |  |
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Here are a few highlights of how we made and continue to make a difference in our communities across the globe:
| • | | We donated over 3,000 pounds of food to the neediest in Florida (pictured right). |
| • | | We fed and honored 255 first responders in two hospitals with nearly $6,000 raised in an employee-driven initiative to cater lunch during a time where “going out to lunch” was not an option for these workers (pictured below). |
Enovation Controls partnered with Food for Families and Night Light Tulsa in several fundraising efforts, participating in outreach and collecting clothing and blankets for the homeless.
Our employees volunteered their time working in COVID-19 testing stations, including one operating from our own parking lot.
We donated $10,800 to the Pascal Society, an annual giving society for the National Fluid Power Association (NFPA)’s Education and Technology Foundation, a charitable organization dedicated to meeting the workforce development needs of the U.S. fluid power industry.
We adopted over 50 children via the Salvation Army Angel Tree program in early December, donating presents, clothing, shoes and books.
We donated funds and materials to several technical universities to continue supporting youth education and development in their local communities.
We participated in the Treats for our Troops drive to collect baked goods for our military members. Colleagues were encouraged to either bake or purchase baked goods to send a “thank you” to our men and women in uniform.
Across all our business units, employees collected funds to feed at-risk families and individuals affected by the pandemic.
Faster US donated money and time to the Red Cross, facilitating the installation of smoke alarm replacements throughout disadvantaged Toledo neighborhoods.
We supported the United Way Suncoast’s relief efforts with a donation of $10,000.
Sun Hydraulics launched “The Power of One,” inspiring and recognizing individual acts of kindness towards the community by our employees and their families and friends.
Employees around the company offered their skills and connections to source PPE, produce 3D printed ear protectors and door holders and procure other safety tools to make the workplace safer.
In Germany, we facilitated the use of one of our facility parking lots to be used as a COVID-19 vaccination center.
In Italy, we partnered with the Fairy Children program, that raises funds to support families and children with autism.
In Australia, CFP raised over $5,000 to make a difference to men’s mental health & suicide prevention, prostate cancer and testicular cancer.
Another business unit donated $2,500 to COVID-19 response to include protective equipment and sanitation measures.
| • | | We donated $56,959 to a local hospital in Italy for the purchase of a COVID-19 intensive care station. |
Enovation Controls UK contributed the time and effort of employees who volunteered in different organizations for animals, children and youth, community, disaster relief/emergency/safety/crisis support, environment, faith-based, homeless and housing, seniors and veterans and military.
All our operating businesses donated funds and presents to several charitable organizations in their respective communities across the globe to provide a better 2020 holiday season to disadvantaged children and their families.
Enovation sponsors two scholarship programs (K-12 and postsecondary) and awarded five scholarships totaling $19,000 in 2020.
Board Memberships, Volunteerism & Monetary Donations
Our organization is well represented in every community by the presence and volunteer work of many of our employees. Employees sit in over twenty boards of directors, advisory boards and advocacy teams. Hundreds volunteer countless hours of personal time to enhance the quality of life of the citizens of our localities.Helios also supported the community by making charitable donations, sponsoring events, creating multi-year scholarships and contributions in support of youth development, charities, medical, special causes and emergency services, among other non-profit community care initiatives.
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| | | | | Non-Profit Organizations Supported by Helios Companies
| • Australian Cancer Council
• Boss Car Rally Queensland – Australia
• Boys and Girls Club
• British Fluid Power Association
• Multiple local and youth sports clubs
• Community Foodbank of Eastern Oklahoma
• Ganapathi Festival – India
• Hunter Manufacturing Awards
| | • Night Light Tulsa
• Red Cross International
• Rotary Club Australia
• Tulsa Chamber of Commerce
• The University of Newcastle
• University of Tulsa Catholic Center for Students
• Westpac Rescue Helicopter Service
• Williams Route 66 Marathon
• IDS Foundation
• HunterNet Cooperative
| | • Junior Achievement
• Lions Cancer Foundation
• MAKE UK
• Marine Toys for Tots Foundation
• Movember Foundation
• National Alliance for Mental Illness (NAMI)
• National Fluid Power Association
• National Marine Manufacturers Association/Boat PAC
• National Multiple Sclerosis Society
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Safety and Health
| | | | | | |  | | Helios is committed to a safe, secure, and healthy workplace for all of its employees worldwide. In addition to all of the safety related measures taken to protect our employees during the pandemic, Helios ensures its employees are safe in its day-to-day operations. We track and report all safety incidences and the total case incident rate (TCIR). Beyond reporting, we ensure there were appropriate measures taken not only after accidents, but also proactively via our program of safety system improvements. Our safety system improvements resulted in the implementation of changes across the organization to ensure a progressively safe operation. |
Sun Hydraulics established the Safety Training & Hearing Protection Program, rolling out a mandatory use of hearing protection throughout all our facilities. We also enforced the use of safety shoes across the board, including office personnel when visiting the manufacturing floor. As with any other safety measure, all team members are encouraged to self-audit and audit their co-workers respectfully and in a friendly manner. To promote safety while respecting social distancing restrictions, we offered regular safety e-training modules to maintain an informed workforce and safe workplace.
With the increase of racial and political tension, our business units rolled out new preventative e-sessions on violence in the workplace, stress management and unconscious bias.
Several of our business units have implemented wellness programs which reward healthy behaviors including, but not limited, to regular exercise, preventative medical care, nutrition and smoking cessation. On-site clinics are available in most of our work units. We have also implemented health passports or wellness sites that allow risk and health assessments and real-time, personalized health and nutrition information.
Flu shots were provided in most of our operating units at no cost to employees.
All of our businesses strive to be accident free, and one of our subsidiaries, Enovation Controls, had no recordable accidents in 2020.
| | | | | Talent Development and Employment Engagement |
| | | | | | | A core tenant of Helios’s values is our commitment to develop talent. Helios has robust programs to identify, assess, manage and develop talent globally. The process involves senior leadership and supervisors from its inception, but extends to all talent, facilitating and supporting individual professionals and personal development via focused and standardized individual development plans, career pathing, gap analysis and development & learning opportunities. | |
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Our key talent and leaders continue participating in the 3C Asian Leadership Institute Triad, a peer-driven, ten-module program geared to develop coaching, collaboration, leadership and communication skills and self-awareness. To date, 130 participants across the organization have participated, raising leadership quality and standard of performance for participants and their teams.
Our talent development tool, Helios Leadership Development Program (HDLP), which seeks to develop 24 vital leadership competencies to increase leadership and team effectiveness across the board, has been recently revamped and revised to tie into business needs for organizational renewal and continuous improvement. This multi-faceted, selective program includes assessments, peer support and practical high-level assignments that provide both individual formation and organizational development. In addition to the HDLP, each Helios operating company has multiple programs in place to support talent development. A few examples are below:
Our workforce has access to employee assistance programs at no cost to them. These wellness and support lines allow our workforce to speak to qualified professionals in real time about health, financial, emotional or mental health issues. These confidential counseling and support programs are available to all our employees and their direct family members free of charge.
Sun Hydraulics Korea employees created a club called The Voice of the Employee which organizes quarterly meetings with the overall workforce to engage in in-house recreational activities to increase satisfaction and inclusion. This employee-driven club reviews suggestions and plans implementation for the meeting. Awards are granted to those whose suggestions/ideas are implemented and materialized.
Our operating companies support talent development with tuition reimbursement programs and other training opportunities designed to enhance an employee’s skills, knowledge and abilities.
Conclusion
Helios is committed to operating an ethical and profitable business through a satisfied, engaged and healthy workforce. We are determined to provide our employees with the highest level of support to ensure they are safe, healthy, well-trained and aware not only of the role they play in the organization, but of their rights to work in an inclusive, diverse and respectful environment where everyone is celebrated, encouraged and appreciated.
We pledge to continue embracing our communities by supporting their mission via funding, volunteerism or other type of involvement. Finally, we are committed to the sustainability of our environment. We will leave this earth a healthy place for generations to come. We are driven by the desire to produce the type of impact that goes beyond financial results. We will deliver on our promises to maintain profitability and a healthy balance sheet, while making our communities a better place for all us to live in, share and cherish.
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AUDIT COMMITTEE REPORT The following report shall not be deemed to be incorporated by reference into any filings made by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference, or to be “soliciting material” or to be “filed” with the SEC or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934. Management is responsible for the Company’s internal controls, financial reporting process, compliance with laws and regulations and ethical business standards. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements and internal controls over financial reporting based on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The primary purpose of the Audit Committee is to oversee the Company’s financial reporting activities. The Audit Committee selects the Company’s independent accountants and meets regularly with them to review and approve the scope of their audit, report, recommendations and fees. The Audit Committee has reviewed and discussed the audited consolidated financial statements of the Company for the fiscal year ended January 2, 2021,December 30, 2023, with the Company’s management and with Grant Thornton LLP (“Grant Thornton”). Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee also reviewed and discussed with the Company’s management and Grant Thornton their respective reports on the effectiveness of the Company’s internal control over financial reporting in accordance with Section 404 of the Sarbanes-OxleySarbanes- Oxley Act as of January 2, 2021.December 30, 2023. The Audit Committee has discussed with Grant Thornton the matters required to be discussed by PCAOB Auditing Standard No. 16 (Communication Withwith Audit Committees). The Audit Committee has received from Grant Thornton written disclosures and the letter required by the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning independence and has discussed with Grant Thornton its independence. The Audit Committee has considered the provision of all non-audit services by Grant Thornton and has determined that such services are compatible with the firm maintaining its independence from the Company. Based on its review and discussions noted above, the Audit Committee recommended to the Board, and the Board has approved, the inclusion of the audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021,December 30, 2023, for filing with the SEC. AUDIT COMMITTEE Douglas Britt (Chair) Laura Dempsey Brown (Chair) Marc Bertoneche
Doug Britt
Cary ChenandaPhilippe Lemaitre
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS During 2020,2023, except as described below, the Company had no materialreportable relationships or transactions with any of the Directors or executive officers, or their affiliates. Under the Company’s Code of Conduct, all employees, including the CEO, the CFO and persons performing the functions of a controller, are instructed to avoid any personal activity, investment or association which could appear to interfere with their good judgment concerning the Company’s best interests. The Company’s policy is that if an employee or Director is related in any way to a vendor or customer, someone other than that employee or Director should be the one to decide whether the Company will do business with that person. The Audit Committee must approve all transactions in which an officerOfficer or Director, or any member of such person’s family, may have a personal interest. When the Company acquired Enovation in December 2016, its natural gas production controls and engine controls and fuel systems business segments were spun off to Genisys Controls, LLC (“Genisys”), which is owned by Kennon Guglielmo and Frank Murphy, III. Until April 5, 2019, Dr. Guglielmo served as the Company’s Global Co-Lead, Electronic Controls, and also as Co-General Manager of Enovation Controls, and was elected to be a member of the Board in June of 2019. In 2020, the Company sold approximately $732,000 of products to Genisys and purchased approximately $4,269,000 of products from Genisys.
As an owner of Genisys, Dr. Guglielmo received approximately $70 million from the Company for his equity ownership of Enovation Controls at closing and an additional $18 million in earn-out payments, including interest, for the 27 month earn-out period following the closing. In 2019, the final earnout payment of $16,680,000 plus interest was paid to the former owners, of which Dr. Guglielmo received $5,838,000.
Additionally, Mr. Gregory Yadley is a partner of Shumaker, Loop & Kendrick, LLP. The Company engages Shumaker, Loop & Kendrick, LLP for a variety of legal services. Since the beginning of fiscal year 2020 through March 31, 2021, the Company paid the firm fees of $257,147 for legal services.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following table sets forth information as of April 6, 2021,9, 2024, except as otherwise indicated, regarding the beneficial ownership of shares of our Company’s Common Stock by: | | • | | each shareholder known to us to be the beneficial owner of more than 5% of the outstanding shares of Common Stock; | |
| | • | | each of our named executive officers;Named Executive Officers; | |
| | • | | each director;Director; and | |
| | • | | all executive officers and directorsDirectors as a group. | |
Information in this table as to our directors, named executive officersDirectors, Named Executive Officers and all directorsDirectors and executive officers as a group is based upon information supplied by these individuals and Forms 3, 4, and 5 filed with the SEC. Information in this table as to our greater than 5% shareholders is based solely upon the Schedules 13G filed by these shareholders with the SEC. Where information regarding shareholders is based on Schedules 13G, the number of shares owned is as of the date for which information was provided in such schedules. | | | | | | | | | Name and Address (1) | | Amount and
Nature of
Beneficial
Ownership (2) | | | Percent of
Class | | | | | 5% Beneficial Owner | | | | | | | | | | | | Wasatch Advisors, Inc. (3) 505 Wakara Way Salt Lake City, UT 84108 | | | 4,811,401 | | | | 14.9 | % | | | | T. Rowe Price Associates, Inc. (4) 100 E. Pratt Street Baltimore, MD 21202 | | | 3,124,998 | | | | 9.7 | % | | | | Brown Capital Management, LLC (5) 1201 N. Calvert Street Baltimore, MD 21202 | | | 2,780,456 | | | | 8.6 | % | | | | The Vanguard Group (6) 100 Vanguard Blvd Malvern, PA 19355 | | | 2,638,087 | | | | 8.2 | % | | | | BlackRock, Inc. (7) 55 East 52nd Street New York, NY 10055 | | | 2,156,158 | | | | 6.7 | % | | | | Directors and Officers | | | | | | | | | | | | Philippe Lemaitre | | | 54,088 | | | | * | | | | | Tricia Fulton | | | 53,340 | | | | * | | | | | Marc Bertoneche | | | 22,449 | | | | * | | | | | Doug Britt | | | 14,600 | | | | * | | | | | Gregory C. Yadley | | | 9,948 | | | | * | | | | | Melanie Nealis (8) | | | 9,265 | | | | * | | | | | Alexander Schuetz | | | 7,675 | | | | * | | | | | Kennon H. Guglielmo | | | 5,850 | | | | * | |
| | | | | | | | | Name and Address (1) | | Amount and
Nature of
Beneficial
Ownership (2) | | | Percent of
Class | | | | | 5% Beneficial Owner | | | | | | | | | | | | Wasatch Advisors, LP (3) 505 Wakara Way Salt Lake City, UT 84108 | | | 3,835,129 | | | | 11.6 | % | | | | The Vanguard Group (4) 100 Vanguard Blvd. Malvern, PA 19355 | | | 3,218,839 | | | | 9.7 | % | | | | Brown Capital Management, LLC (5) 1201 N. Calvert Street Baltimore, MD 21202 | | | 3,114,144 | | | | 9.4 | % | | | | Wellington Management Group, LLP (6) 280 Congress Street Boston, MA 02210 | | | 2,524,041 | | | | 7.6 | % | | | | BlackRock Inc (7) 50 Hudson Yards New York, NY 10001 | | | 2,398,060 | | | | 7.2 | % | Conestoga Capital Advisors, LLC (8) 550 E. Swedesford Rd., Suite 120 Wayne, PA 19087 | | | 2,144,989 | | | | 6.5 | % | | | | T Rowe Price Investment Management, Inc (9) 101 E Pratt Street Baltimore, MD 21202 | | | 2,106,540 | | | | 6.4 | % | | | | Directors and Officers | | | | | | | | | | | | Josef Matosevic | | | 78,206 | | | | * | | | | | Philippe Lemaitre | | | 60,748 | | | | * | | | | | Matteo Arduini | | | 22,761 | | | | * | | | | | Doug Britt | | | 21,073 | | | | * | | | | | Alexander Schuetz | | | 12,112 | | | | * | | | | | Laura Brown | | | 9,845 | | | | * | |
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| Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |
| | | | | | | | | Name and Address (1) | | Amount and
Nature of
Beneficial
Ownership (2) | | | Percent of
Class | | | | | Jinger McPeak | | | 4,616 | | | | * | | | | | Laura Dempsey Brown | | | 3,300 | | | | * | | | | | Cary Chenanda | | | 2,550 | | | | * | | | | | Matteo Arduini | | | 1,525 | | | | * | | | | | Rajasekhar Menon | | | 1,360 | | | | * | | | | | Josef Matosevic | | | - | | | | * | | | | | Wolfgang Dangel | | | - | | | | * | | | | | All Directors and Executive Officers as a Group (15 persons) | | | 190,566 | | | | 0.6 | % |
| | | | | | | | | | | Name and Address (1) | | Amount and
Nature of
Beneficial
Ownership (2) | | Percent of
Class | | | | Cary Chenanda | | | | 8,892 | | | | | * | | | | | Marc Greenberg | | | | 5,608 | | | | | * | | | | | Sean Bagan | | | | 4,000 | | | | | * | | | | | Diana Sacchi | | | | 2,675 | | | | | * | | | | | Lee Wichlacz | | | | 1,455 | | | | | * | | | | | All Directors and Executive Officers as a Group (11 persons) | | |
| 227,375
|
| | | | 0.7 | % |
| (1) | Unless otherwise indicated, the address of each of the persons listed is 1500 West University Parkway,7456 16th Street East, Sarasota, Florida 34243. |
| (2) | This column sets forth shares of the Company’s Common Stock which are deemed to be “beneficially owned” by the persons named in the table under Rule 13d-3 of the SEC. Except as otherwise indicated, the persons listed have sole voting and investment power with respect to all shares of Common Stock owned by them, except to the extent such power may be shared with a spouse. As of the date of this proxy statement, none of the executive officers and Directors have any outstanding margin obligations under any such accounts. Amounts include RSUs that vest within 60 days of the record date. |
| (3) | According to Amendment No. 46 to Schedule 13G, filed February 11, 2021,9, 2024, by Wasatch Advisors, Inc., Wasatch Advisors, Inc. has sole voting and dispositive power with respect to 4,811,4013,835,129 shares. |
| (4) | According to Amendment No. 128 to Schedule 13G, filed February 16, 2021,13, 2024, by T. Rowe Price Associates, Inc., T. Rowe Price Associates, Inc.The Vanguard Group, The Vanguard Group has soleshared voting power with respect to 905,31661,366 shares, and sole dispositive power with respect to 3,124,9983,122,720 shares and shared dispositive power with respect to 96,119 shares. |
| (5) | According to Amendment No. 1416 to Schedule 13G, filed February 12, 2021,14, 2024, by Brown Capital Management, LLC, Brown Capital Management, LLC has sole voting power with respect to 1,708,2032,279,279 shares and sole dispositive power with respect to 2,780,4563,114,144 shares. Brown Capital Management, LLC’s client, the Brown Capital Management Small Company Fund, beneficially owns 1,942,951 of the shares, representing 5.88% ownership. |
| (6) | According to Amendment No. 6 to Schedule 13G, filed February 10, 2021,8, 2024, by The VanguardWellington Management Group, The VanguardLLP, Wellington Group hasHoldings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company, all filing parties have shared voting power with respect to 49,3281,725,489 shares and sole dispositive power with respect to 2,563,796 shares and shared dispositive power with respect to 74,2912,524,041 shares. |
| (7) | According to Amendment No. 1 to3 Schedule 13G, filed January 29, 2021,26, 2024, by BlackRock, Inc., BlackRock, Inc. has sole voting power with respect to 2,110,9252,357,899 shares and sole dispositive power with respect to 2,156,1582,398,060 shares. |
| (8) | Includes 2,000According to Amendment No. 2 to Schedule 13G, filed January 5, 2024, by Conestoga Capital Advisors, LLC, Conestoga Capital Advisors, LLC has sole voting power with respect to 2,077,758 shares of unvested restricted stock.and sole dispositive power with respect to 2,144,989 shares.
|
| (9) | According to Schedule 13G, filed February 14, 2024, by T. Rowe Price Investment Management, Inc., T. Rowe Price Investment Management, Inc. has sole voting power with respect to 690,552 shares and sole dispositive power with respect to 2,106,540 shares. |
| | | | | 20212024 Proxy Statement| 31 35 |
EXECUTIVE COMPENSATION Compensation Discussion and Analysis The Compensation Discussion and Analysis (CD&A) describes our general executive compensation approach, and specifically describes the compensation earned byfor our named executive officersNamed Executive Officers (“NEOs”) in 2020. This past year, Wolfgang Dangel stepped down as CEO, and the Board2023. During 2023, Sean Bagan was appointed Josef Matosevic as the new President and Chief ExecutiveFinancial Officer. Also, Rajasekhar Menon resigned from the Company in 2020. Our 20202023 NEOs and their titles wereare as follows: | | | | | | Named Executive Officer | | Position | | | | Josef Matosevic(1) | | President and Chief Executive Officer (“CEO”) | | | | Tricia Fulton (2)Sean Bagan
| | Chief Financial Officer (and Former Interim CEO)(“CFO”) | | | | Melanie NealisMarc Greenberg
| | Chief LegalGeneral Counsel & Compliance Officer & Secretary | | | Jinger McPeak
| | President, Electronic Controls (EC) | | | | Matteo Arduini | | President Quick Release Couplings (QRC)of Hydraulics, EMEA | | | | Wolfgang Dangel (3)Lee Wichlacz
| | Former President and CEOof Electronics | | | | Rajasekhar MenonTricia Fulton (4)(1)
| | Former CFO | | | Jason Morgan (2) | | Former President, Cartridge Valve Technology (CVT) |
| (1) | Mr. Matosevic assumed the role of President and CEOAs announced on June 1, 2020.
|
(2) | July 18, Ms. Fulton served as CFO and Interim CEO during the transition period of April 5, 2020 to May 31, 2020. |
(3) | Mr. Dangel stepped down as President and CEO and separatedresigned from the Company, effective April 5, 2020.
|
(4) | Mr. Menon resigned effective Sept. 25, 2020.August 8, 2023.
|
| (2) | As announced on March 20, Mr. Morgan resigned from the Company, effective March 30, 2023. |
Executive Summary ImpactWe continue to explore acquisition opportunities as a way to accelerate growth in line with our history of COVID-19
The COVID-19 pandemicacquiring companies with niche technologies, as well strong profitability. Our acquisition strategy includes bolt-on flywheel acquisitions and broad measures taken by governments, businessestransformational acquisitions. In addition to looking for strong management teams and others to limitgood cultural fits, the spread of the virus adversely affected the Company and its customers. Some of Helios’s global locations and production facilities had to close temporarily due to government mandates. Employees whose positions were amenable to remote work continued to work from their homes and provide support to our customers. Throughout 2020, Helios remained focused on the health, safety and welfareobjective of our global employees,acquisition strategy is to enhance Helios by:
Growing our current product portfolio or adding new technologies and capabilities that complement our current offerings; Expanding geographic presence; Bringing new customers or markets; Meeting growth and communities by adopting measures in allprofitability goals; and Leveraging operational synergies and earnings accretion. To support the execution of our facilitiesstrategy, our financial strategy is oriented around delivering industry leading operating margins, a strong balance sheet and sufficient financial flexibility to allow for social distancingsupport organic and additional cleaning protocolsacquisitive growth while remaining focused on meetingcontinuing to sustain our customers’ needs.longstanding history of over twenty-seven years of dividend payments. The pandemic impacted Helios’s financial results relativeWe align our internal key performance indicators with our strategy to ensure our performance-based incentive targets. Incoming order rates and sales declined duringshort-term actions will deliver long-term expectations.
Our culture of innovation is at the year as the pandemic impacted our business, customers and end markets. During the month of April, we experienced a considerable impact on sales due to facility closures, customer shutdowns and regulatory restrictions imposed on shipments. Our production capabilities recovered throughout the second quarter, with the third quarter returning to more typical levels while order intake remained soft throughout the year. Towards the end of the year, we began to experience some recovery, with fourth quarter salescore of our legacy business exceeding secondbusiness. We have approximately 230 engineers in support of product innovation, as well as technical support and third quarter levels. Throughoutcustomer service. We believe our product innovation will aid organic growth and fill the year, we implemented multiple cost saving measuresexpected demand resulting from the megatrends of automation, digitalization, regionalization and supply chain security, productivity and technology advancements. All growth initiatives are intended to mitigate the effectspreserve Helios’ history of the downturn, including decreased use of consultantssuperior profitability and contractors, adjustments to our fixed cost labor base by implementing salary reductions, furloughs and layoffs, and reduced travel, marketing and other non-essential discretionary spending. We incurred costs related to the purchase of safety equipment, personal protective equipment and additional cleaning costs to ensure the safety of our employees. To further reduce costs due to the challenges of the COVID-19 pandemic, the NEOs agreed to a 20% salary reduction for the month of May, and the Board approved a 20% reduction in director compensation for the August, October and December meetings. Despite the challenges of the global pandemic, Helios achieved several significant financial and operational milestones in 2020, including a significant acquisition of Balboa Water Group (“BWG”) in November 2020.strength.
| | | 32 36 |20212024 Proxy Statement
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2020Objectives are Driven by the Helios Business System and our Purpose, Missions and Strategies
In addition to the two acquisitions we completed in 2022, including: Taimi and Daman, M&A transactions in 2023 as outlined below included the following: Schultes Precision Manufacturing, Inc. (“Schultes”), headquartered in Buffalo Grove, Illinois. Schultes is a specialist in manufacturing precision machined components and assemblies for customers requiring very tight tolerances, superior quality, and exceptional value-added manufacturing processes. Currently serving the hydraulic, aerospace, communication, food services, medical device, and dental industries, Schultes brings the manufacturing quality, reliability, and responsiveness critical to its customers’ success. A third-generation owned company, Schultes was founded in 1946 and has evolved and grown over the years because of its dedication to unparalleled customer service, and commitment to investing in the best machining technologies. The company currently operates in a newly expanded 110,000 square foot facility situated on seven acres that includes approximately 20,000 square feet of additional room for future capacity growth. Schultes serves its customers rapid growth applications from prototype through full rate production. | • | | i3 Product Development, Inc. (“i3”), headquartered in Sun Prairie, Wisconsin. i3 is a custom engineering services firm, with over 55 engineers, embodying expertise in electronics, mechanical, industrial, embedded and software engineering. Their solutions are used across many sectors, including medical, off-highway, recreational and commercial marine, power sports, health and wellness, agriculture, consumer goods, industrial, sports and fitness. They specialize in working to transform customer’s ideas into industrial design solutions through rapid prototyping and creating 3D models in-house. A Top Workplace award winner for multiple years in the state of Wisconsin, i3 has locations in both Sun Prairie and Middleton. i3 will complement existing internal engineering teams across all operating companies by providing profitable engineering, consulting, and product development services for customer-specific solutions that go beyond the current products and solutions offered by Helios. i3 has served more than 450 clients and completed over 4,000 projects in its 28-year history. |
2023 Performance Results and Pay Outcomes Increasing cash flowThe macro-economic and paying down debt were important goalsgeopolitical challenges in 2023 did not hinder the Company from its methodical investments for us this yeargrowth. We continue to build a strong foundation for sustainable success and we finished 2020drive solid margins and earnings for our shareholders. Our focus on creating long-term shareholder value remains a top priority. We will continue to build on our financial strength with strong cash generation and paid down nearly $50 million of debt. Other 2020 financial highlights for Helios are as follows:
Net Income of $14.2 million
Adjusted net income of $71.9 million
Adjusted EBITDA of $121.2 million
Adjusted free cash flow of $94 milliongeneration. In addition, our balance sheet remains very flexible, enabling us to be opportunistic on flywheel acquisitions.
Adjusted cash EPS of $2.24
As a result of our 20202023 performance, our short-term incentive (“STI”) program paid between 103%0% and 154%30% of the target percentage to our NEOs based on achievement of certain metrics as detailed below. All STI payouts were subject to a circuit breaker threshold of Helios net income that was met for 2020. The Compensation Committee made no adjustments toadjusted all metrics under the Helios STI | | | | | 2024 Proxy Statement| 37 |
plan due to the impacts of 1) continued supply chain and logistical constraints resulting in reduced sales, 2) impact of COVID-19.order push-outs on current year sales, and 3) increases in inventory levels on cash flow related to the new Hydraulics Manifold Solutions CoE. As a result of our performance from 2021 through 2023, performance-based restricted stock units granted to our Named Executive Officers pursuant to our 2021 long-term incentive (“LTI”) program were earned at between 148% and 190% of target. Our long-term incentive (“LTI”) program, which includes performance-based incentive metrics, is aligned with our Vision 2025revised long term financial performance measures.targets laid out as part of our augmented strategy. The 20202023 LTI performance-based awards will be measured over a three-year period (2020-2022)(2023-2025) and are tied to the financial metrics set for Helios and the subsidiariessegments as described below. Management Transition
Wolfgang Dangel separated from Helios as President, Chief Executive Officer and Director on April 5, 2020. The Company appointed Tricia Fulton, the Company’s Chief Financial Officer, to also serve as Interim President and Chief Executive Officer from April 5, 2020 until a new CEO was appointed (“Transition Period”). In addition, the Company appointed Philippe Lemaitre to the newly established position of Independent Executive Chairman during the Transition Period. Ms. Fulton and Mr. Lemaitre’s interim roles ceased on June 1, 2020 when Mr. Josef Matosevic assumed the role of President and Chief Executive Officer and joined the Board of Directors.
Compensation Philosophy and Objectives The goals of our executive compensation program are to attract, retain and motivate highly qualified leadership personnel. Our compensation philosophy is to provide executives with a competitive total compensation package that motivates superior job performance, the achievement of our business objectives, and the enhancement of shareholder value. Prior to 2019 ratherRather than basing compensation strictly on a series of specific financial metrics, we have encouragedencourage initiative, teamwork and innovation, and each executive was enabledexecutive’s strength to use his or her abilities and particular area of responsibility to strengthen our overall performance. We set total compensation at a level we believe to be fair, based on an objective review as well as a subjective analysis of theeach individual executive’s experience and past and potential contributions to the Company. An individual executive’s leadership and contribution to the accomplishment of the Company’s strategic goals has always been part of his or her performance evaluation. Shareholder Engagement and Say on Pay
In 2020,2023, the Company held a “say-on-pay” vote on the company’sCompany’s named executive officer compensation program as set forth in thelast year’s proxy statement, and 97.68%approximately 78% of votes cast supported the proposal. The Company subsequently engaged in substantial shareholder engagement with institutional investors representing over 52% of its combined votes and clarified its position and any concerns. The Compensation Committee was advised of this engagement which included Company Officers and Investor Relations. After discussions with its institutional investors, the Company confirms that it believes the results of the say-on-pay vote reflected a misunderstanding related to advisory services and not any metrics, compensation philosophy or long-term strategy of the Company. The Compensation Committee considered the results of the shareholder vote in finalizing 20212024 compensation and, understanding the discussions with its institutional investors and knowing that because a substantial majority of shareholders approved the compensation program, the Committee continued to apply the same principles in determining the amounts and types ofits executive compensation programs in 2023 and did not implement substantialany material changes as a result of the shareholder advisory vote. | | | 38 |2024 Proxy Statement | | 2021 Proxy Statement| 33 |
Shareholders have demonstrated strong support for our say-on-pay proposals in recent years, but we continue to seek shareholder feedback on our compensation program to ensure it alignsShareholder Engagement
Our relationship with shareholder interests and supports the long-term strategy of the Company. In 2020, we reached out to shareholders holding approximately 85%shareowners is a significant part of our outstanding sharesCompany’s success. Management understands, appreciates, and metwelcomes the opportunities to listen to its shareholders, engage in discussions, and participate in year-round conferences. Our Investor Relations program is designed to address questions and concerns from shareholders, provide a viewpoint from the Company’s perspective, and where appropriate, incorporate feedback into best practices. A variety of in-person as well as virtual meetings are conducted throughout the year. In 2023, we engaged with shareholders holding approximately 55%representing a majority of our outstanding shares. During these interactions, we discussed our executive compensationstock. Below is a sample of events that the Company participated in. |  |
Over the past few years, the Company has initiated an ESG related engagement program corporate governance and other issues. We gathered feedback from our investors and shared the feedback with management and the full Board.its top shareholders. 2020
2023 Compensation Program In connection with the Company’s desire to align pay for performance and to offer market-based compensation to attract and retain top talent, the Compensation Committee performed a comprehensive review of our compensation program in 2020. The following table describes the principal pay elements of our executive compensation program for 2020,2023, including their purpose, timeframe and performance measures:measures with the intent to tie each executive’s pay more closely with the corporate and segment financial and operational performance objectives over which they have the greatest impact. Short-term and long-term incentive plan metrics are tied to segment level goals rather than business unit goals to more fully align executive pay with performance.
| | | | | 2024 Proxy Statement| 39 |
| | | | 2020 Executive Compensation
|
| | | | | | | 2023 Compensation Elements | Pay Element | | Purpose | | Timeframe | | Performance MeasuresKey Features | Base Salary | | Attract and retain executive talent and compensate for performing day-to-day responsibilities | | Annual | | Fixed cash compensation reviewed annually based on market data, company performance, and executive’s experience and past and potential contributions to the Company | Short-term incentive (STI) | | Reward performance against principal short-term financial drivers to achieving our objectives under Vision 2025our augmented strategy | | Annual | | Metrics are based on corporate or subsidiary performance as follows:
Corporate executive metrics:
• Adjusted EBITDA (40%)
• Adjusted free cash flow (40%)
• Helios revenue (20%)
Subsidiary executive metrics:
• Helios adjusted EBITDA (25%)
• Subsidiary adjusted EBITDA (25%)
• Subsidiary adjusted free cash flow (25%)
• Subsidiary revenue (25%)
| Long-term incentive (LTI)
| • Performance-based restricted stock units (50%)
| | Motivate executives to achieve multi-year corporate financial objectives consistent with the Company’s long-term strategy
| | Vest in full after 3 years
| | Metrics are based on corporate or subsidiary performance as applicable: • Adjusted EBITDA margin (40%) • Adjusted EPS (40%Revenue Growth (30%) • Revenue compound annual growth rate (CAGR)Adjusted free cash flow margin (20%), (30% for subsidiary executives) • Personal Goals (10% for corporate) | • Performance-based restricted stock units (50% of regular LTI grant) | | Motivate executives to achieve multi-year corporate financial objectives consistent with the Company’s long-term strategy | | Vest after 3 years based on performance achievement | | Metrics are based on corporate or subsidiary performance as applicable: • Adjusted EBITDA margin (50%) • Adjusted EPS (50%) | • Time-vested restricted stock (25%)units (50% of regular LTI grant) | | Attract and retain executives and motivate support for our long-term strategy | | Vest annually pro rata over 3 years | | | • Stock options (25%)
| | Align executives’ interests with those of shareholders
| | Vest pro rata over 3 years; 10-year term
| | |
| | | 34 |2021 Proxy Statement
| | |
| Executive Compensation Ultimate value impacted by Company stock price
|
2021 Compensation Program Changes
To align pay with performance and to offer market-based compensation to attract and retain top talent, the Compensation Committee performed a comprehensive review of our compensation program in late 2020. The result of the review was recommendations for changes to our 2020 compensation plans intended to tie each executive’s pay more closely with the corporate and subsidiary financial and operational performance objectives over which they have the greatest impact. To more fully align executive pay with performance, the Compensation Committee modified the metrics and weightings in the short- and long-term incentive plans to link each executive’s compensation more closely with their individual and business unit goals (if applicable).
Short-term incentive plan.For 2021, to reward corporate executives for personal achievements related to their specific financial and operational goals, the Committee added an individual goal weighted at 10% and reduced the free cash measure. The revised corporate executives’ measures and weightings for 2021 are as follows:
| | | | | | | 2021 Changes to STI Measures and Weightings Corporate Executives | | | | Performance Measures | | 2020 Weightings | | 2021 Weightings | | | | Helios adjusted EBITDA | | 40% | | 40% | | | | Helios net sales | | 20% | | 20% | | | | Helios adjusted free cash flow | | 40% | | 30% | | | | Individual goals | | — | | 10% |
Also, to more directly align our subsidiary executives’ pay with the performance of their business unit and to reward them for meeting individual goals related to the success of their business unit, the Committee eliminated the corporate-level EBITDA measure and added a personal goal weighted at 10%. The revised subsidiary executives’ measures and weightings for 2021 are as follows:
| | | | | | | 2021 Changes to STI Measures and Weightings Subsidiary Executives | | | | Performance Measures | | 2020 Weightings | | 2021 Weightings | | | | Helios adjusted EBITDA | | 25% | | — | | | | Subsidiary adjusted EBITDA | | 25% | | 40% | | | | Subsidiary net sales | | 25% | | 20% | | | | Subsidiary adjusted free cash flow | | 25% | | 30% | | | | Individual Goals | | — | | 10% |
Long-term incentive plan.The Compensation Committee also revised the performance metrics for the performance-based restricted stock units to eliminate the Helios three-year compound annual growth in net sales to increase the focus on profitability over revenue. For 2021, the long-term incentive plan mix will remain the same: time-vested restricted stock units that vest pro rata over three years (25%), stock options (25%) and performance-based restricted stock units that vest in full after three years based on meeting certain performance goals (50%).
| | | | | 2021 Proxy Statement| 35 |
Compensation Policies and Practices The Company employs the following best pay practices that reflect the Company’s compensation philosophy: | | | | | What we do | | What we don’t do | | | | What we do
| | What we don’t do | | | ✓ Link executive pay to company performance through our annual and long-term incentive plansincentives | | × No single-trigger change-in-control provisions for future long-term incentive awards | | | | ✓ Balance among short- vs. long-term incentives, cash vs. equity and fixed vs. variable pay | | × No hedging or pledging by executivesExecutives or directorsDirectors of equity holdings | | | | ✓ Compare executive compensation and company performance to relevant peer group companies | | × No repricingsrepricing of underwater stock options | | | | ✓ Minimum stock ownership requirements for all Require executives and members of the Board to meet minimum stock ownership requirements | | × No tax gross-ups |
| | | 40 |2024 Proxy Statement | | |
| | | | | | ✓ Maintain a compensation clawback policy to recapture unearned incentivecertain incentive-based pay | | × No aspect of theour pay policies or practices pose material adverse risk to the Company | | | | ✓ Provide only limited perquisites | | |
Compensation Process and Approach Our compensation program is overseen by the Compensation Committee, comprised of independent directors,Directors, which operates under a charter that was approved by the Board on June 14, 2019.November 1, 2021, after the Company moved to the New York Stock Exchange. The Compensation Committee reviews the compensation of each individual executive officer annually. The Compensation Committee also makes equity awards under compensation plans approved by the Board and, where required, by the shareholders, to the chief executive officerChief Executive Officer and to other key management employees on the recommendation of the chief executive officer.Chief Executive Officer. Compensation Program & Peer Group Reviews While the Compensation Committee does consider comparative compensation information to gain a general understanding of current compensation practices in the market, it does not benchmark or ultimately target a specific percentile or data point in assessing competitiveness for our compensation programs. Individual opportunities vary based on length of time with the Company, individual performance and level of leadership responsibility within the Company, and other factors. The Company’s compensation program generally seeks to align executive pay with the market medians, as well as to executive and Company performance and business objectives in order to retain key talent and reward high-performing executives to maintain a strong management team. The Compensation Committee engages an independent compensation consultant, Mercer, to review our compensation philosophy and the competitiveness of the NEOs’ current compensation levels. In 2018, Mercer conducted a review focused on strengtheningSeptember 2022, the Company’s executive pay philosophy to provide market competitive pay and to link compensation to performance, includingCompensation Committee reviewed the contribution each executive makes to the overall business objectives and corporate success. Mercer’s 2018 review informed our 2019 and 2020 pay decisions. The 2018 review also assessed the methodology we use to set executive pay, and to ensure that our pay levels are consistent with the market. The review included a detailed evaluation of the compensation program, including base salary, STI opportunity, LTI opportunity, target total cash compensation, and target total direct compensation for the NEOs. The review found that base salaries, short-term incentives and target total cash compensation were below the 50th percentile for the CEO, CFO and other NEOs. Long-term incentives were slightly above market, which improves overall positioning of target total direct compensation compared to market. Based on this review, the Company will be moving to align executive pay more closely with the 50th percentile of its market peers over the next few years, both in the level and structure of its compensation.
Mercer’s 2018 review compared our executive compensation program to the market using Mercer’s proprietary survey database as well as public company proxy data, including publicly traded, similarly sized companies in our industry. Mercer evaluated peer company appropriateness by auditing the ISS peer group, companies provided by Helios, and S&P CapIQ’s database of publicly-traded U.S. Companies, based on their revenue size, industry, other financial and organizational measures, and business model/footprint to determine if they accurately describe the Company’s market for executive talent.
| | | 36 |2021 Proxy Statement
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In the fourth quarter of 2020, Mercer again reviewed our peer group and executive compensation levels for continued appropriateness as part of its executive pay market study. As part of their discussion, the Compensation Committee examined the 2021 Mercer executive compensation report to compare the Company, its executive compensation peer group as well as similarly sized companies within our survey databases. In addition, the Compensation Committee considered and assessed all relevant factors set forth in Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934, that could give rise to a potential conflict of interest with respect to Mercer. Based on this review, the Compensation Committee is not aware of any conflict of interest that has been raised by the work performed by Mercer. Given the Company’s growth trajectory, the 2021 executive compensation review targeted a larger size for the executive compensation peer group and recommended a revised peer group of companies with revenues of approximately $1B and market capitalization of approximately $4B. Mercer made changes to the peer group and executive pay levels for 20212022 to more closely align executive pay with the market median (see “2021median. Based on Mercer’s recommendations and to more appropriately reflect the Company’s size, the Compensation Committee added 11 new companies to reflect the larger size and removed two: AAON, Inc. and Actuant Corporation (later became Enerpac Tool Group) [given their relatively smaller size]. The peer group includes the 25 companies identified for purposes of 2023 executive pay determinations as the Compensation Committee did not make any changes to the Peer Group for 2023. (See “2023 Peer Group” below).
Peer Group
To assist the Compensation Committee in reviewing and setting executive compensation for 2020,2023, and ultimately confirming the existing Peer Group from 2022, the Compensation Committee considered data from annual reportsAnnual Reports and proxy statementsProxy Statements of selected “peer group”peer group companies. The scope of this evaluation included a detailed review of the compensation program including base salary, target short-term incentive opportunity, total cash compensation (salary & annual incentives), long-term incentive opportunity and total direct compensation (salary, annual incentives, & long-term incentive. The Compensation Committee reviewsreviewed information on revenues, income,Revenues, Income, and executive compensation for other U.S. public manufacturing companies and selected businesses of similar size and scope. The Compensation Committee also considered information on compensation practices, including employee benefits, from manufacturing companies in other countries in which we operate to help ensure we maintain competitiveness in the markets in which our executive officers reside. | | | | | 2024 Proxy Statement| 41 |
| | | | 2023 Peer Group Companies | Albany International Corp. | | Lindsay Corp. | Altra Industrial Motion Corp. | | Mueller Water Products, Inc. | Badger Meter, Inc. | | NV5 Global, Inc. | Barnes Group, Inc. | | Protolabs, Inc. | Chart Industries, Inc. | | RBC Bearings Incorporated | CIRCOR International, Inc. | | Rexnord Corporation | Dorman Products, Inc. | | SPX Flow, Inc. | Douglas Dynamics, Inc. | | Tennant Company | Enpro Industries, Inc. | | The Gorman-Rupp Company | ESCO Technologies Inc. | | Trimas Corp. | Franklin Electric Co., Inc. | | Watts Water Technologies, Inc. | John Bean Technologies, Inc. | | Woodward, Inc. | Kadant, Inc. | | |
The peer group used to set 2020 pay was comprised of companies with revenue between 0.5x to 2x that of the Company’s revenue, representing a similar industry or related industry that offer similar products, have a similar value chain, or operate within a similar geographic footprint. Data from these sources was individually matched to each executive based on title, job, functional responsibility, and business line scope where possible. The peer group is used to assess executive pay competitiveness, inform subsequent pay decisions, and shape the future design of the STI and LTI plans. The2023 peer group includes primarily companies in the industrial machinery industry that are similar in size to the Company based on revenue and market capitalization, and with which the Company competes for talent. At the time the peer group was set, the Company’s percentile ranks for revenue and market capitalization compared to the peer group were as follows:
| | | | | | | Peer Group Used to set 2020 Pay | | | | Percentile Rank | | Revenue (in millions) * | | Market Capitalization (in millions) * | | | | 25th Percentile | | $411 | | $1,115 | | | | Median | | $687 | | $1,719 | | | | 75th Percentile | | $918 | | $2,117 | | | | Helios Technologies | | $585 | | $1,800 | | | | Percentile Rank | | 47% | | 61% |
* | For trailing 12-month period as of Sept. 17, 2018 based on S&P CapIQ database.
|
The peer group includes the following 15 companies that were identified in late 2018 to set 2019 and 2020 pay:
| | | | Peer Group Companies
| | | AAON, Inc.
| | NV5 Global, Inc. | | | Actuant Corporation (later became Enerpac Tool Group)
| | Protolabs, Inc. | | | Altra Industrial Motion Corp.
| | Raven Industries, Inc. | | | Badger Meter, Inc.
| | RBC Bearings Incorporated | | | CIRCOR International, Inc.
| | Tennant Company | | | Dorman Products, Inc.
| | The Gorman-Rupp Company | | | ESCO Technologies Inc.
| | The KeyW Holding Corporation (was acquired in 2019 and removed from peer group)
| Mueller Water Products, Inc.
|
| | | | | 2021 Proxy Statement| 37 |
2021 Peer Group
In September 2020, the Committee asked its independent compensation consultant, Mercer, to review the 2018 peer group for continued appropriateness as part of its 2020 executive pay market study. The 2020 review found the total direct compensation of each of the CEO, President, Electronic Controls (EC) and Chief Legal & Compliance Officer & Secretary were below market median. Mercer recommended a revised peer group of companies with revenues between 0.5x and 2.0x Helios’s revenues that are in a similar industry or related industry that offer similar products, have a similar value chain, or that operate within a similar geographic footprint. Mercer also considered other financial metrics, such as market capitalization and EBITDA in its analysis. Based on Mercer’s recommendations and to more appropriately reflect the Company’s size, the Compensation Committee made the following changes to the 2018 peer group to set 2021 pay:
| | | | 2021 Peer Group Changes
| | | Deletions
| | Additions | | | Altra Industrial Motion Corp.
| | Douglas Dynamics, Inc. | | | The KeyW Holding Corporation
| | Kadant, Inc. | | | | | Lindsay Corp. | | | | | Trimas Corp. |
The 2021 peer group includes primarily companies in the industrial machinery industry that are similar in size to the Company based on revenue and market capitalization, and with which the Company competes for talent. At the time 20212023 compensation levels were set, the Company’s percentile rank for revenue and market capitalization compared to the 20212023 peer group were as follows:
| 2021 Peer Group | | | | | 2023 Peer Group | | 2023 Peer Group | | | | | | | Percentile Rank | | Revenue (in millions) * | | Market Capitalization (in millions) * | | Revenue (in millions) * | | Market Capitalization (in millions) * | | 25th Percentile | | $450 | | $882 | 25th Percentile | | | $762 | | $2,342 | | Median | | Median | | $592 | | $1,290 | | $1,189 | | $3,485 | | 75th Percentile | | $841 | | $2,519 | 75th Percentile | | | $1,731 | | $5,600 | | Helios Technologies | | $513 | | $1,350 | Helios Technologies | | | $1,000 | | $4,000 | | Percentile Rank | | 41% | | 55% | Helios Technologies Percentile Rank | | Helios Technologies Percentile Rank | | | 33% | | 61% |
| * | For trailing 12-month period as of AugustMay 19, 20202021, based on S&P Capital IQ database. |
CEO Total Compensation
In 2020, the Compensation Committee engaged Mercer to review Mr. Matosevic’s total compensation package. Based on Mercer’s assessment of peer group compensation and survey data, the Committee determined that Mr. Matosevic’s total compensation was below the market median, with some aspects of his pay significantly below the median, based on the updated peer group data and survey data Mercer used in its 2020 analysis. To bring his pay closer to the market median, the Committee approved a base salary increase for 2021 and increases to his target short- and long-term incentive plan opportunities, as noted in the table below.
| | | | | | | | | | | | | | | | | | | | | | | 2020 Base | | 2020 STI/LTI % | | Target Total 2020 Pay | | 2021 Base | | 2021 STI/LTI % | | Target Total 2021 Pay | Josef Matosevic | | $704,000 | | 100%/175% | | $2,455,2001 | | $786,000 | | 100%/258% | | $3,600,000 |
1 | Mr. Matosevic was given a sign-on equity award and his total target compensation rate on an annualized basis was $3,054,000.
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| | | 38 |2021 Proxy Statement
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Components of Executive Compensation Executive pay includes a mix of fixed compensation (base salary and benefits) and variable pay (annual and long-term incentives) that is based on meeting a combination of short- and long-term goals. A significant portion of executive pay is “at risk” or based on meeting performance goals to align executive pay with the long-term goals of the company.Company. The following charts illustrate the target total direct compensation mix for the CEO and the average for the other NEOs as a group.group for the 2023 year. | | | Company CEO Target Total Compensation Mix2 | | Company Average All Other NEOs Target Total Compensation Mix | 
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| | | 42 |2024 Proxy Statement | | |
On February 28, 2020,The Compensation Committee determines executive compensation with the following elements: base salary, STI, LTI, and benefits. For 2023, the Compensation Committee of the Board approved a new Executive Compensation Plan (“ECP”). The ECP sets forthconfirmed the elements of executive compensation: base salary, STI, LTI, and benefits. As described more fully below, the STI and LTI elementsweightings of the program are specifically designed topay elements which align pay directly towith Company performance. In February 2020, the Compensation Committee changedperformance by affirming the allocation of long-term compensation for the executive officers to 25% stock options, 25% time-basedNamed Executive Officers at 50% time- based restricted stock units and 50% performance-based restricted stock units. The revised ECP allows for straight line interpolation of payouts ranging from 0-200% based upon the achievement of the underlying metrics.
Base Salary Our approach to compensating executive officers is to pay salaries that are generally competitive with salaries paid to executives of other manufacturing companies, particularly in our geographic areas. The Compensation Committee approved salary increases for 20202023 as part of a plan to more closely align total compensation with the median of our peer group over the next five years.group. Our overall financial performance also influences the general level of salary increases. To reduce costs due to the challenges of the COVID-19 pandemic, the NEOs agreed to a 20% salary reduction for the month of May. 2 | For purposes of this chart, the mix represents Mr. Matosevic’s 2020 compensation as if earned as an annual representation.
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| | | | | 2021 Proxy Statement| 39 |
The Compensation Committee reviews salaries annually. The Chief Executive Officer, after seeking input from other key managers and reviewing selected market data, recommended increases for the other executive officersNamed Executive Officers based on his analysis of each individual executive’s experience and past and potential contributions to the Company. Any base salary increases are ultimately determined and approved by the Compensation Committee. Based on the foregoing factors, salary increases for 20202023 ranged from 3%6% to 10%17% for the NEOs, as set forth in the following table: | | | | | | | | | | | | | | Named Executive Officer | | 2019 Salary | | | 2020 Salary(1) | | | | | Josef Matosevic (2) | | | — | | | $ | 704,000 | | | | | Tricia Fulton | | $ | 400,000 | | | $ | 412,000 | | | | | Melanie Nealis | | $ | 319,000 | | | $ | 338,000 | | | | | Jinger McPeak | | $ | 265,000 | | | $ | 292,000 | | | | | Matteo Arduini (3) | | $ | 246,338 | | | $ | 278,000 | | Wolfgang Dangel (4) | | $ | 546,000 | | | $ | 590,000 | | Rajasekhar Menon (5) | | $ | 350,000 | | | $ | 386,000 | |
| | | | | | | | | | | | | | Named Executive Officer | | 2022 Annual
Salary Rate | | | 2023 Annual
Salary Rate | | | | | Josef Matosevic | | $ | 900,000 | | | $ | 950,000 | | | | | Sean Bagan | | $ | — | | | $ | 440,000 | | | | | Marc Greenberg | | $ | 290,000 | | | $ | 330,000 | | | | | Matteo Arduini (1) | | $ | 315,000 | | | $ | 350,000 | | | | | Lee Wichlacz | | $ | 265,000 | | | $ | 265,000 | | | | | Tricia Fulton (2) | | $ | 480,000 | | | $ | 530,000 | | | | | Jason Morgan (3) | | $ | 300,000 | | | $ | 350,000 | |
| (1) | All officers took a 20% pay cut during the month of May 2020 that is not reflected in the table above.
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(2) | Mr. Matosevic assumed the role of President and CEO on June 1, 2020.
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(3) | Mr. Arduini’s salary was paid in Euros based on an average conversion rate during the year. For purposes of this disclosure and to exchange rate, all cash amounts for Mr. Arduini have been converted to U.S. dollars usingat an average annual exchange ratesrate of $1.139184/Euro and $1.119719/Euro€1 to $1.081629 for the 2020 and 2019 years, respectively.2023. |
(4)(2) | Mr. Dangel stepped down as CEO and separatedMs. Fulton resigned from the Company, effective April 5, 2020.August 8, 2023.
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(5)(3) | Mr. Menon joinedMorgan resigned from the Company, in April 2019 and resigned effective Sept. 25, 2020.March 30, 2023. |
| | | | | 2024 Proxy Statement| 43 |
Short-Term Incentives In 2020,2023, our STI program aimed to harmonize the bonus structure across corporate and subsidiarysegment functions, and to enhance our pay-for-performance relationship by increasing the program’s alignment with our communicated financial goals and improving the clarity of our plan’s objectives for our employees and shareholders. Cash STI awards for 20202023 were based on an objective formula with preset financial targets designed to drive our overall Company and subsidiarysegment financial results. The primary financial performance goals arefor 2023 were adjusted EBITDA margin (40%), revenue growth (30%), adjusted free cash flow (FCF) margin (20%) and personal goals (10%). The primary financial performance goals for segment level executives are adjusted EBITDA Margin (40%), revenue growth (30%) and revenue (20%adjusted FCF (30%). TheseThe financial measures were selected because they are the principal financial drivers to achieving our objectives under Vision 2025.our stated strategy. The STI awards for subsidiary-levelsegment-level NEOs (Matteo Arduini, Jinger McPeak, and Rajasekhar Menon) were based on similar metrics as the same metricscorporate-wide goals, but with specific goals and results measured at the subsidiary level (except for Heliossegment level. For purposes of these awards, adjusted EBITDA margin is calculated as earnings before net interest expense, income taxes, depreciation, amortization and certain other charges as a percentage of sales. Adjusted EBITDA). Due to exceptional performance in 2020, the STI plan allowed for bonus payouts. All STI payouts were subject tofree cash flow margin is calculated as adjusted net cash provided by operating activities less capital expenditures as a circuit breaker thresholdpercentage of Helios net income that was met for 2020.sales. The Committee made no adjustments to the STI plan due to the impact of COVID-19. TheCompensation Committee determines STI payouts based on an objective formula with target and maximum performance levels. As updated, the ECP provides forlevels (with a maximum STI payout ofequal to 200% of target. In February 2020, theThe Compensation Committee setsets STI targets for each of the NEOs consistent with the recommendations set forth by the Mercer study. For 2023, the STI targets for each NEO were as follows:
| | | | | | | | | | | | | | | Named Executive Officer | | 2023 STI Target
(as a Percentage of
Base Salary) | | 2023 STI Target (Expressed in Dollars) | | | | Josef Matosevic | | | | 100% | | | | $ | 950,000 | | Sean Bagan | | | | 65% | | | | $ | 286,000 | | Marc Greenberg | | | | 60% | | | | $ | 198,000 | | | | | Matteo Arduini | | | | 60% | | | | $ | 210,000 | | | | | Lee Wichlacz | | | | 50% | | | | $ | 132,500 | | | | | Tricia Fulton | | | | 75% | | | | $ | 397,500 | | | | | Jason Morgan | | | | 60% | | | | $ | 210,000 | |
Annual cash incentive awards for the NEOs in 20202023 were contingent on the attainment of corporate and subsidiarysegment performance metrics established by management and approved by the Board. TargetsCompensation Committee. Target goals were set using the anticipated 20202023 budget of the Company and external financial guidance range to determine target and maximum payments. STI increases were determined by the Compensation Committee after engagement with Mercer to review peer group compensation and survey data to bring compensation closer to the market median. Corporate executives.Executives.For 2020,2023, the Compensation Committee set annual incentive cash targets for corporate-level NEOs (Josef Matosevic, Sean Bagan, Marc Greenberg and Tricia Fulton and Melanie Nealis)Fulton) based on meeting the following performance goals:3 | | | | | | | | | | | | Measure | | Weighting | | Results | | Payout | | | | | Adjusted EBITDA Margin (1) | | 40% | | 19.4% | | 0% | | | | | Revenue Growth (1) | | 30% | | -6.3% | | 0% | | | | | Adjusted Free Cash Flow Margin (1) | | 20% | | 10.3%(2) | | 50% | | | | | Personal Goal | | 10% | | | | Max | | | | | Overall Payout Percentage (Corporate Measures) | | | | | | 30% |
| | | | | | | | Measure
| | Weighting | | Actual/Actual as a
Percent of Target ** | | | | Adjusted EBITDA Margin*
| | 40% | | 23.1%/154% | | | | Adjusted Free Cash Flow (as a % of Sales)*
| | 40% | | 18.8%/200% | | | | Net Sales *
| | 20% | | (10.4%)/0% |
3(1) | Mr. Dangel did not receive a 2020 incentive cash bonus under the STI plan. He was paid the value2023 results excluded our acquisitions of his target bonus pursuant to the terms of his Separation Agreement as discussed below.Schultes Precision Manufacturing and i3 Product Development that occurred in January and May 2023, respectively.
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| (2) | | | 40 |2021 Proxy Statement
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| ExecutiveFigure presented includes adjustments made by the Compensation Committee as previously discussed. Actual result was 6.4%.
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| * | | 44 |2024 Proxy Statement | | |
| 2020 results excluded our acquisition of Balboa Water Group that occurred in November 2020.
Executive Compensation |
** | The Company does not disclose the specific corporate level goals because it believes disclosing these goals would reveal confidential and proprietary information and could result in competitive harm to the Company.
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Subsidiary executives.Segment Executives.For 2020,2023, the Compensation Committee set annual incentive cash targets for subsidiary-levelsegment-level NEOs (Matteo Arduini, (QRC)Lee Wichlacz and Jinger McPeak (EC)Jason Morgan) based on meeting subsidiarysegment performance goals as follows:4
| | | | | | | | | | | | | | | Measure | | Weighting | | Hydraulics Segment
Results | | Electronics Segment
Results | | Hydraulics Electronics
Segment Payout | | | | | | Segment Adjusted EBITDA Margin (1) | | 40% | | 25.2% | | 16.9% | | 0% | | | | | | Segment Revenue Growth (1) | | 30% | | 2.6% | | -20.6% | | 0% | | | | | | Segment Adjusted Free Cash Flow Margin (1) | | 30% | | 13.9% | | 8.1% | | | | | | | | Overall Payout Percentage (Segment Measures) | | | | | | | | 0% |
| | | | | | | | | | | Measure
| | Weighting | | EC % of Goal
Achieved Actual/
Actual as Percent of
Target ** | | QRC % of Goal Achieved
Actual/Actual as Percent
of Target ** | | | | | Helios Adjusted EBITDA Margin*
| | 25% | | 23.1%/154% | | 23.1%/154% | | | | | Subsidiary Adjusted EBITDA Margin
| | 25% | | 16.7%/125% | | 25.1%/127% | | | | | Subsidiary Adjusted Free Cash Flow (as a % of Sales)
| | 25% | | 15.8%/131% | | 16.9%/200% | | | | | Subsidiary Net Sales
| | 25% | | (20.1%)/0% | | 3.2%/134% |
*(1) | 20202023 results excluded our acquisitionacquisitions of Balboa Water GroupSchultes Precision Manufacturing and i3 Product Development that occurred in November 2020.
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** | The Company does not disclose the specific subsidiary level goals because it believes disclosing these goals would reveal confidentialJanuary and proprietary information and could result in competitive harm to the Company.May 2023, respectively.
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The disclosure of the underlying goals for the measures above would reveal competitively sensitive, proprietary and confidential information that the Company does not disclose publicly. Disclosing these metricsgoals could potentially reveal insights about our business plans and strategic objectives that our competitors could use against us in the marketplace. Achieving target-level goals is reasonably anticipated but uncertain and would be considered “strong performance” based on historical performance. Threshold goals are more likely to be achieved and maximum goals are considered aggressive. Award payouts.Payouts. After year-end, the Compensation Committee determined the extent to what extentwhich the goals were satisfied, with partial or full satisfaction warranting partial or full payout of the cash incentive awards. The award opportunity as a percentage of each NEO’s base salary, target and maximum award levels and actual awardsaward payouts are set forth in the table below. Linear interpolation is used to determine STI payouts for performance between achievement levels. | | | | | | | | | | | | | | | | | | Executive | | Target as a %
of Base
Salary | | Target | | Maximum | | Actual
Award as a %
of Base
Salary | | Actual
Award | | | | | | | Josef Matosevic (1) | | 100% | | 100% | | 200% | | 142% | | $583,147 | | | | | | | Tricia Fulton | | 60% | | 100% | | 200% | | 85% | | $351,024 | | | | | | | Melanie Nealis | | 40% | | 100% | | 200% | | 57% | | $191,984 | | | | | | | Jinger McPeak | | 40% | | 100% | | 200% | | 41% | | $120,304 | | | | | | | Matteo Arduini (2) | | 30% | | 100% | | 200% | | 46% | | $127,159 | | | | | | | Wolfgang Dangel (3) | | 70% | | 100% | | 200% | | 70% | | $413,000 | | | | | | | Rajasekhar Menon (4) | | 50% | | 100% | | 200% | | 50% | | $193,000 |
| | | | | | | | | | | | | | | | | | Named Executive Officer | | Target as a %
of Base
Salary | | Target | | Maximum | | Actual Award as a %
of Base
Salary | | Actual
Payout | | | | | | | Josef Matosevic | | 100% | | 100% | | 200% | | 30% | | $285,000 | | | | | | | Sean Bagan (1) | | 65% | | 100% | | 200% | | 30% | | $35,965 | | | | | | | Marc Greenberg | | 60% | | 100% | | 200% | | 30% | | $59,400 | | | | | | | Matteo Arduini | | 60% | | 100% | | 200% | | 0% | | $0 | | | | | | | Lee Wichlacz | | 50% | | 100% | | 200% | | 0% | | $0 | | | | | | | Tricia Fulton (2) | | 75% | | 100% | | 200% | | — | | — | | | | | | | Jason Morgan (2) | | 60% | | 100% | | 200% | | — | | — |
| (1) | Mr. Matosevic’s awardBagan was prorated since he assumedappointed CFO on August 9, 2023. His STI payout was pro-rated for the role of President and CEO on June 1, 2020.partial year. |
| (2) | Mr. Arduini’s annual incentive awardAward payout was paid in Euros and converted to U.S. dollars using an average exchange rate for 2020 of $1.139184/Euro
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(3) | Mr. Dangel stepped downforfeited with departure, as CEO and separated from the Company effective April 5, 2020 and under the terms of his Separation Agreement, the Company paid him a lump-sum cash payment of $413,000, representing his short-term incentive bonus paid at target, which was less than he would have received based on actual performance.
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(4) | Mr. Menon resigned effective Sept. 25, 2020 and under the terms of his Separation Agreement, the Company paid him a lump-sum cash payment of $193,000, representing his short-term incentive bonus paid at target, which was less than he would have received based on actual performance.
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4 | Mr. Menon did not receive a 2020 incentive cash bonus under the STI plan. He was paid the value of his target bonus pursuant to the terms of his Separation Agreement as discussedfurther described below.
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| | | | | 2021 Proxy Statement| 41 |
Special one-time cash awards. Due to their extraordinary efforts during 2020 to manage through the COVID-19 global pandemic, CEO transition, and significant acquisition of Balboa Water Group, the Compensation Committee awarded special one-time discretionary awards to Ms. Fulton ($66,093), Ms. Nealis ($66,093) and Ms. McPeak ($50,750). Also, Mr. Matosevic received a one-time cash sign-on bonus of $42,644 intended to offset the cost of temporary housing expenses for a period of six months under the terms of his offer of employment.
Long-Term Incentives We use equity awards as long-term incentives for executive officersExecutive Officers and other key managers. TheIn January 2023, the Compensation Committee determined that the long-term compensation program would be related to Company performance but, historically, it did not move automatically in lockstep with such performance. To better align with long-term value creationinitially granted our NEOs performance-based restricted stock units (weighted 50%) and the Company’s Vision 2025, in 2020, the Committee reintroduced stock options, which make up 25% of the equity awards, along with 25% time-based restricted stock units (weighted 50%). For 2023, the Compensation Committee revised the equity award mix in our LTI program to align both officers and 50% performance-basednon-officers by eliminating stock options (previously weighted 25%) for Company officers. Performance-based restricted stock units.units generally vest in full after three years based on meeting certain performance goals, and time-vested restricted stock units generally vest annually pro rata over three years. The purpose of the new planLTI awards is to attract, retain, and motivate executives, consistent with the Company’s long-term strategy, and to align more fully the interests of executives with those of shareholders by giving them a personal interest in the value of the Company’s Common Stock over the long term. Stock options vest pro rata over three years and have a 10-year term. The time-based restricted stock awards vest pro rata over three years and the performance-based restricted stock units vest in full after three years based on meeting certain performance goals. | | | | | 2024 Proxy Statement| 45 |
All time-based and performance-based restricted stock units are settled in Company common stock. Mr. Menon forfeited all equity received under the 2020 annual equity award when he resigned from the Company effective Sept. 25, 2020, and Mr. Dangel forfeited all equity received under the 2020 annual equity award when he stepped down as CEO and separated from the Company effective April 5, 2020. LTI awards will be forfeited if a recipient violates applicable non-solicitation or non-competition agreements.
In setting LTI award levels as a percentage of base salary, the Compensation Committee considered the results of Mercer’s competitive market analysis in an effort to better align executives’ award levels with the median of peer company award levels. For 2020,2023, our NEOs were awarded the following:following restricted stock units and performance-based restricted stock units: | | | | | | | | | | | | | | | Executive | | Target as a % of Base
Salary | | Number of Time-based
Restricted Stock Units Awarded | | Number of Performance-based
Restricted Stock Units Awarded | | Number of Stock
Options Awarded | | | | | | Josef Matosevic (1) | | 175% | | 5,127 | | 10,255 | | 5,127 | | | | | | Tricia Fulton | | 106% | | 3,239 | | 6,478 | | 3,239 | | | | | | Melanie Nealis | | 106% | | 2,657 | | 5,314 | | 2,657 | | | | | | Jinger McPeak | | 64% | | 1,377 | | 2,755 | | 1,377 | | | | | | Matteo Arduini | | 64% | | 1,311 | | 2,623 | | 1,311 | | | | | | Wolfgang Dangel (2) | | 159% | | 6,958 | | 13,915 | | 6,958 | | | | | | Rajasekhar Menon (3) | | 90% | | 2,579 | | 5,159 | | 2,579 |
| | | | | | | | | | | | Named Executive Officer | | Target as a % of Base
Salary | | Number of Time-based
Restricted Stock Units Awarded | | Number of Performance-based
Restricted Stock Units Awarded | | | | | Josef Matosevic | | 475% | | 39,737 | | 39,737 | | | | | Sean Bagan (1) | | 140% | | 2,312 | | 2,312 | | | | | Marc Greenberg | | 100% | | 2,906 | | 2,906 | | | | | Matteo Arduini | | 100% | | 3,082 | | 3,083 | | | | | Lee Wichlacz | | 60% | | 1,400 | | 1,401 | | | | | Tricia Fulton (2) | | 170% | | 7,934 | | 7,935 | | | | | Jason Morgan (3) | | 125% | | 3,853 | | 3,853 |
| (1) | Mr. MatosevicBagan was hiredappointed CFO on June 1, 2020.August 9, 2023. His 20202023 awards were pro-rated for the partial year. Additionally, the number of time-based awardsrestricted stock units included in the table above does not include the 17,5004,000 restricted stock units issued for his sign on bonus.granted as a sign-on award. |
| (2) | Ms. Fulton forfeited her 2023 annual equity award when she stepped down as CFO and separated from the Company effective August 9, 2023. |
| (3) | Mr. DangelMorgan forfeited all equity received under the 2020his 2023 annual equity award when he stepped down as CEOPresident, CVT and separated from the Company effective April 5, 2020.March 20, 2023. |
(3) | Mr. Menon forfeited all equity received under the 2020 annual equity award when he resigned from the Company effective Sept. 25, 2020.
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Performance-Based Restricted Stock Units. Half of the 2020 equity awards were in the form ofThe performance-based restricted stock units thatgenerally vest in full after three years based on performance against threshold, target and maximum levels achievedgoals with respect to certain metrics over a three-year performance period. Provided minimum threshold performance is met with respect toPayout for each performance metric, payout for that metric may be from 0% to 200% of the performance-based restricted stock units allocated to that metric. For 2020,2023, the measures for corporate executives were adjusted EBITDA margin (40%(50%), and adjusted EPS (40%) and revenue compound annual growth rate (CAGR) (20%(50%). Adjusted EBITDA margin and adjusted earnings per shareEPS are driven by revenue growth, partially offset by items such as freight, seasonality, foreign currency exchange, one-time operational items, and the impact of acquisitions. Helios believes that adjusted EBITDA margin and adjusted EPS, which are non-GAAP measures, are good measures of the Company’s operating performance. For Matteo Arduini, Lee Wichlacz and Jinger McPeakJason Morgan who are employed withinby a subsidiary, LTI measures are tied to the same metrics but for subsidiarysegment level performance. | | | 42 |2021 Proxy Statement
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Given the impact of the COVID-19 pandemic on the economy and the Company, which negatively affected the ability of our officers to realistically achieve awards under the 2019-2021 LTI, the Compensation Committee adjusted certain targets. The Committee determined that the adjustments were appropriate to maintain a LTI program that aligns pay for performance with the Company’s desire to attract and retain top talent, as well as the Company’s migration to market-based compensation at the 50th percentile over time.
In February 2020, the Committee reviewed our actual results for 2019 against the 2019 long-term incentive plan targets established at the beginning of the three-year performance period during Q1 of 2019 and covering the performance period of 2019-2021. The Committee determined that the performance levels that had been established at the beginning of the year were based on the then-current business environment (without consideration of unknown extraordinary events such as the tariffs imposed by China) and our internal projections were no longer reasonably attainable, and as such the plan would likely result in little to no payout to plan participants. As a result, the Committee determined that the plan would not effectively serve its goal of incentivizing the performance and retention of our executive officers and other plan participants. In light For purposes of these findings, and after reviewing our 2020 forecast and projections for 2021 performance, the Committee decided to adjust the underlying performance levels for each of the three measures. The Committee retained the structure and weighting of each metric as originally designed. In making these adjustments, the Committee wanted to ensure that the 2019 LTI plan continued to incentivize our executive officers and other participating employees. The Committee believes that the adjusted target levels remain difficult to achieve and would continue to encourage dedicated corporate and individual performance.
In January 2021, the Compensation Committee assessed the impact of the pandemic on the LTI plan awards, for the 2019-2021 and 2020-2022 performance periods. In part to address the challenges presented by Covid-19 and to continue to incentivize and retain the executive team, after considering various alternatives, the Compensation Committee decided to adjust the LTI plan targets for the 2019-2021 and 2020-2022 performance periods. In making this decision, the Compensation Committee considered that these awards would not be effective to motivate and retain our executives without adjustment. The Compensation Committee adjusted the targets for the 2019-2021 and 2020-2022 performance periods to raise the target revenue CAGR and adjusted EPS metrics and lower the EBITDA metric. The revised revenue CAGR, adjusted EPS, and adjusted EBITDA margin includeis calculated in substantially the forecasted results of our 2020 acquisition of Balboa Water Group. In revisingsame manner as under the targets, the Committee also considered the investments into the business that would be needed that will impact the EBITDA margins.STI program (as described above). Adjusted EPS is calculated as net income adjusted for amortization and certain other charges divided by diluted weighted average common shares outstanding.
Time-basedTime-Based Restricted Stock Units. In 2020, 25% of the LTI was awarded in The time-based restricted stock units thatunit generally vest one-third each yearannually pro rata over three years. The Committee determined that this form of long-termlong- term compensation, tied to value creation for the Company, aligns the interests of officers with those of shareholders. The objectives of the programtime-based restricted stock unit awards are to reward officersOfficers for long-term performance,service, encourage retention, and promote equity ownership in the Company.
Stock Options.In 2020,2022, the Company reintroduced stock options, which make up 25%Compensation Committee assessed the impact of the equity awards.pandemic on the LTI plan awards for the 2020-2022 performance periods, and, in an effort to continue to incentivize and retain the executive team, after considering various alternatives, decided to adjust the LTI plan targets for the 2021-2023 performance period. The stock option awards will vest pro rata over three yearsCompensation Committee adjusted the targets for the 2021-2023 performance period to eliminate the target revenue compound annual growth rate (“CAGR”) goals and have a 10-year term. Exercise price is equalincrease both the adjusted EPS as well as the adjusted EBITDA goal. In revising the targets, the Committee also considered the investments into the business needed to impact EBITDA margins.
Prior Year Equity Awards. Payout of 2021-2023 Performance-Based Restricted Stock Unit Awards Corporate Executives. The below table presents the fair market valueresults of the Company’s stock on the date of grant. Special Retention Awards. In April 2020, the Board granted special restricted stock unit awards designed to retain executives throughout the CEO leadership transition. Mr. Arduini, Ms. McPeak, Ms. Nealis and Mr. Menon each received an award of 5,418performance-based restricted stock units with an equivalent value of $175,000. Ms. Fulton received an award of 7,740 restricted stockgranted in 2021 to corporate executives Josef Matosevic and Tricia Fulton. The units with an equivalent value of $250,000 to compensate her for serving as interim President and Chief Executive Officer. Award values were calculated based onvested following the closing price on April 27, 2020, and each award will fully vest in 24 months provided the executive remains with the Company through April 26, 2022. The Board granted the awards to ensure stability in the leadership team in the wake of an unexpected CEO departure. Separately, Mr. Menon resigned3-year performance period that ran from the Company effective September 25, 2020. According to his Separation Agreement, the 5,418 special retention restricted stock units awarded to Mr. Menon in April 2020 will vest one year from his date of separation.2021 – 2023.
CEO Sign-On Award.Mr. Matosevic received an award of 17,500 time-based restricted stock units, which will vest in one-third increments per year over a three-year time frame and were awarded on the first day of the quarter following June 1, 2020 under the terms of his employment agreement.
| | | | | | | | | | | | Measure | | Weighting | | Actual | | Payout | | | | | Adjusted EBITDA Margin (1) | | 50% | | 22.5% | | 100% | | | | | Adjusted EPS (1) | | 50% | | $10.37 | | 196% |
| (1) | Results excluded our acquisitions of NEM, Joyonway, Taimi, Daman, Schultes & i3 that occurred July 2021, October 2021, July 2022, September 2022, January 2023 & May 2023 respectively. |
| | | 46 |2024 Proxy Statement | | 2021 Proxy Statement| 43 |
Equity Awards Prior to 2020.Subsidiary Executives. The 2019 LTI plan consistedbelow table presents the results of 50% time-vested restricted stock units that vest pro rata over three years and 50%the performance-based restricted stock units that vestgranted in full after three years2021 to subsidiary-level NEOs (Jason Morgan and Matteo Arduini) based on meeting certain performance goals. PriorThe units vested following the 3-year performance period from 2021 – 2023.
| | | | | | | | | | | Measure | | Weighting | | CVT Results /
Payout | | QRC Results /
Payout | | | | | Subsidiary Adjusted EBITDA Margin (1) | | 50% | | 26.6%/71% | | 28.7%/180% | | | | | Subsidiary Adjusted EPS (1) | | 50% | | $5.48/109% | | $3.31/200% |
| (1) | Results excluded our acquisitions of NEM, Taimi, Daman and Schultes that occurred July 2021, July 2022, September 2022 and January 2023 respectively. |
Update on 2022 Performance-Based Stock Option Awards On October 1, 2022, the Compensation Committee approved a performance-based stock option award to 2019,each of Mr. Matosevic, Ms. Fulton, Mr. Arduini. Mr. Morgan and Mr. Greenberg. In approving these awards, the principal elementCompensation Committee considered the extraordinary contributions of our long-term compensation program was restricted shares. Historically,the Company’s executive team in connection with the acquisitions completed during 2022. The awards will be earned based on Company stock price appreciation performance and cover shares of the Company’s common stock at an exercise price of $50.60 per share. Initially, from 0% to 100% the Award will be earned and exercisable after the second anniversary of the grant date based on the highest closing price of the Company’s common stock during the period beginning on October 1, 2022, and ending on October 1, 2024 as follows: no specific weight was given to any specific criterion although leadershipportion of the award will become exercisable if stock price achievement is below $70; one-third of the award will become exercisable if stock price achievement is at least $70 but less than $80; two-thirds will become exercisable if stock price achievement is at least $80 but less than $90; and performance wereall of particular importance. Equity awardsthe award will become exercisable if stock price achievement is $90 or greater. To the extent the award is not fully earned based on stock price achievement as of October 1, 2024, the unearned portion of the award will be earned if the stock price achievement hurdle for such unvested portion is achieved prior to 2019 were primarily made under the Company’s 2011 Equity Incentive Plan (“2011 Equity Plan”), an omnibus plan designed to provide great flexibility in making a varietyexpiration of equity or equity-based awards. These equity awards, as hasthe award. The award will expire on October 1, 2032. As of April 25, 2024, one-third of the stock price achievement hurdles have been the case historically, were “time-based” so that, to earn the full award, the NEO must remain employed for three years. Until 2020, the Committee had not granted stock options since 2005.met. Other Compensation Retirement Plan.All U.S.-based employees, of Helios Technologies, Inc. and Sun Hydraulics LLC, including executive officers,the Named Executive Officers, are eligible to participate in the Helios Technologies, Inc. 401(k) (the “Plan”). Under the tax-qualified Plan, employees are able to contribute the lesser of up to 100% of their annual salary or the limit prescribed by the Internal Revenue Service to the Plan on a before-taxbefore or after tax basis. Based on years of service, we match 100% of up to the first 6% of pay that is contributed to the Plan. All employee contributions are fully vested upon contribution. Our matching contributions vest over a five-year period—20% after one year, 40% after two years, 60% after three years, 80% after four years and 100% after five years. Ms. McPeak, who is employed by Enovation Controls, participates in the same 401(k) plan, but has a different match schedule applicable to employees of Enovation Controls. Based on employee contributions, the Enovation match schedule provides up to 4.5% of the employee’s pay as an employer match and vesting of the match is based on years of service from one to three years: 33% after one year, 67% after two years and 100% after three years. Mr. Arduini, who is located in Italy, is eligible for certain retirement benefits under plans specific to Italian-based employees. Mr. Arduini is a participant in a state retirement pension plan. His employer, Faster S.r.l., contributes $27,953$26,341 per year for the benefit of Mr. Arduini’s retirement in the state plan. Additionally, Mr. Arduini is a participant in the Previndai, a supplemental pension plan. In this plan, Mr. Arduini contributes a portion of his salary into the plan and the Company makes a contribution in the amount of $8,202.12$7,585 per year. These amounts are paid in Euros and converted to U.S. dollars (for purposes of this disclosure) using an average exchange rate for 20202023 of $1.139184/$1.081629/Euro. Under the terms of the Previndai, Mr. Arduini’s family members are also eligible to participate at their discretion. At retirement, Mr. Arduini will be able to access the Previndai funds in the form of an annuity, lump sum or combination of both whileand the state plan is paid out in the form of monthly payment. Perquisites and Other Benefits.WeTo provide onlya market competitive total compensation package, we provide a limited amount of perquisites and other personal benefits. Senior management participatessupplemental benefits to our Named Executive Officers. In 2023, we provided the following: supplemental life and long- term disability insurance, car allowance, limited recognition rewards and housing as well as Italian statutory severance plan contributions. Any aggregate incremental cost to us of perquisites and supplemental benefits provided in our benefit plans on the same terms as other employees. These plans include medical and dental insurance, and group life insurance. Under our employee stock purchase plan (ESPP), approved by the shareholders in 2001, U.S. employees, including executive officers, may purchase shares of Company common stock at a discount of 15% from the market price on the first or last day of the quarterly purchase period, whichever2023 is lower, on a tax-favored basis under Section 423 of the U.S. Internal Revenue Code. Mr. Arduini, who is located in Italy, received $9,313 in a housing allowance and a company vehicle allowancepresented in the amount of $20,038 in 2020, which are paid in EurosSummary Compensation Table and converted to U.S. dollars using an average exchange rate for 2020 of $1.139184/Euro.footnotes.
Because of the broad responsibilities given to employees and the encouragement of individual initiative, we have educational assistance policies for all employees, including executive officers.
Risks Arising from Compensation Policies and Practices The Board has determined that its compensation policies and practices do not motivate imprudent risk-taking or encourage Company leaders to make decisions that might be beneficial in the short term at the expense of creating long-term Company value. The Company’s long-term compensation program, as described above, relies on general criteria that are not primarily focused on the achievement of short-term | | | | | 2024 Proxy Statement| 47 |
objectives but, rather, what is in the long-term best interest of the Company. The equity awards granted under the program are generally determined in the first quarter of the year. For 2020,2023, awards were granted at a special meeting of the Compensation Committee convened on February 28, 2020.January 3, 2023. | | | 44 |2021 Proxy Statement
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The Company’s compensation programs are designed with an appropriate balance of risk and reward so they will not encourage excessive or unnecessary risk-taking behavior. To assess compensation risk, the Compensation Committee reviewed the policies and practices of the Company and determined they do not create risks reasonably likely to have a material adverse effect on the Company. In conducting this review, the Committee noted the following risk-mitigating features of the compensation policies and practices:
Balance among short- and long-term incentives, cash and equity and fixed and variable pay Multiple performance measures Stock ownership and holding guidelines | • | | Limited change-in-control (CIC) benefits |
Limited change-in-control (CIC) benefits
Stock Ownership Guidelines To better link management’s interests with those of shareholders, the Board of Directors has implemented stock ownership guidelines for the Company’s NEOs. The ownership guidelines specify a number of shares that Company executives must acquire and hold within five years of appointment as an executive officer. In determining whether an executive has met the stock ownership guidelines, all shares and units (vested or unvested) held by him or her will be counted, including those held jointly or in common with a spouse or dependent children or held in his or her individual retirement account, or 401(k) plan or similar benefit plan. Each executive agrees to hold any equity awards or grants until the required level is met. Each of the Company’s continuing NEOs had either satisfied the ownership guidelineswho have held their positions for more than five years, or hadhave time remaining to do so, as of December 31, 2020,are in compliance with the stock ownership guidelines, as set forth in the following table: | | | | | | | Executive | | Ownership requirement as
a multiple of salary | | | Josef Matosevic | | 5x | | | Tricia FultonSean Bagan
| | 3x | | | Melanie NealisMarc Greenberg
| | 2x | | | Jinger McPeak
| | 2x | | | Matteo Arduini | | 2x | | | Lee Wichlacz | | 2x |
Hedging Policy Our Confidentiality and Insider Trading Policy prohibits our directors,Directors, officers and employees and their designees from entering into hedging transactions or other financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of the Company’s securities. The policy also prohibits directors, officersDirectors, Officers and employeesEmployees and their designees from selling company securities short, engaging in short-term trading, trading company securities on margin or pledging company securities as collateral for a loan. Clawback Policy The Company maintainsDuring 2023, we adopted a new Clawback Policy that allowsto comply with new rules promulgated by the Company to recover certain forms of compensation paid to executive officers in certain situations.NYSE and the SEC (the “Clawback Policy”). The Clawback Policy generally applies to certain of the Company’s current and former executive officers, including all of the NEOs. The Board adopted this policy, whichand it provides for the recoupmentrecovery of certain executiveincentive-based compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws or from material misconduct or fraud. If the Company isreceived during a three-year recovery period if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirements,requirement under the Board will require reimbursement or forfeituresecurities laws. The incentive-based compensation recoverable under the Clawback Policy generally includes the amount of any excess incentiveincentive-based compensation received by an executive during(on or after September 29, 2023) that exceeds the three completed fiscal years immediately precedingamount that would have been received had it been determined based on the daterestated amounts (without regard to any taxes paid). The Clawback Policy does not condition clawback on which the Company is required to prepare the accounting restatement. If the Board determines that an NEO has committed any actfault of fraud or willful misconduct and the act of fraud or willful misconduct directly or indirectly caused a material adverse effect, the Board will require the executive who committedofficer, but the actrequired clawback under the Clawback Policy is subject to forfeit or reimbursecertain limited exceptions in accordance with the Company for some or all (as determined by the Board) of the incentive compensation awarded to or received during the three years following the commission of the act.SEC and NYSE rules.
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Employment Agreements and Change-in-Control Provisions The Company typically does not enter into employment agreements with its executives. However, the Company has entered into employment arrangements with Mr. Matosevic to serve as President and Chief Executive Officer and, as customary in Italy, an employment agreement was entered into with Mr. Arduini in connection with his promotion to the role of General Manager and Managing Director of Faster (known internally as “President, QRC”). The Company also has entered into continuity and severance agreements with each of the NEOs to protect them from loss of income in the case of change of control and to provide protections for the companyCompany and the NEOs covering employment related issues as well as confidentiality. Matosevic Offer of Employment
Josef Matosevic was appointed President and Chief Executive Officer of the Company and to the Board of Directors effective June 1, 2020. Pursuant to his offer of employment, as President and Chief Executive Officer, Mr. Matosevic is entitled to an annual base salary of $704,000. In addition, under the Company’s incentive plans, his STI target is 100% of his base salary and his LTI target is 175% of his base salary, with 25% allocated to nonqualified stock options, 25% allocated to time-based restricted stock units, and 50% allocated to performance-based restricted stock units. For the fiscal year 2020, all of the above compensation elements, with the exception of the performance-based restricted stock unit component of the LTI award, were fully guaranteed and prorated based on his June 1, 2020 date of appointment. Additionally, Mr. Matosevic was entitled to a one-time cash sign-on bonus of $42,644 and 17,500 time-based restricted stock units, which will vest in one-third increments per year over a three-year time frame and were awarded on the first day of the quarter following June 1, 2020. Mr. Matosevic’s cash sign-on award was intended to offset the cost of temporary housing expenses for a period of six months. Mr. Matosevic is eligible to participate in the standard health, welfare and retirement benefit plans that are applicable to employees of the Company. Mr. Matosevic is not entitled to any compensation for his service as a director on the Company’s Board.
In connection with Mr. Matosevic’s appointment, he entered into the Company’s standard form Indemnification Agreement and Continuity Agreement and Executive Officer Severance Agreement. His Severance Agreement is similar to the Severance Agreements discussed below, however, Mr. Matosevic is entitled to a continuation of his annual base salary for 18 months, a payment equal to 150% of the target value at the time of grant of his current year STI award, and continuing medical benefits for Mr. Matosevic and his family for 12 months. To receive the payment and benefits under his Severance Agreement, Mr. Matosevic must, among other things, execute a customary release and comply with customary restrictive covenants set forth in his agreements with the Company. Further, Mr. Matosevic also entered into certain restrictive covenants consistent with the Company’s standard form that are contained in the Restricted Stock Unit and Stock Option Agreement.
Arduini Employment Agreement The Company entered into an employment agreement with Mr. Arduini effective January 1, 2019 in connection with his promotion to the role of General Manager and Managing Director of Faster (known internally as “President, QRC”).Faster. Mr. Arduini’s employment agreement sets forth an annual gross base salary, target cash bonus (short-term incentive or “STI”), and participation in the Helios Long-Term Incentive (LTI) Plan. Mr. Arduini’s employment agreement also provides for an annual amount as consideration for entering into the non-competition agreement, as required by Italian law for the enforcement of certain restrictive covenants. The amount is included in his base salary. Mr. Arduini’s employment agreement was amended in 2020 and 2021 to reflect increases in his compensation package. For 2020,2023, Mr. Arduini’s base salary was increased to Euro 242,000 ($278,000 USD),$378,570, his target STI percentage was 30%60% of his base salary, and the total value of his LTI was 75%100% of his base salary (approximately $174,000).salary. Mr. Arduini’s 20202023 LTI award consisted of 25%50% time-based restricted stock options, 25% time-based RSUs,units (“RSUs”), and 50% performance based RSUs.RSUs (“PRSUs”). Mr. Arduini has an opportunity to earn up to 200% of his target STI award and up to 200% of the portion of his LTI award that consists of performance based RSUs for exceptional achievement of predetermined metrics. In addition, Mr. Arduini received $9,313$8,701 per year in a housing allowance and a company vehicle allowance in the amount of $20,038,$25,125, which are paid in Euros and converted to U.S. dollars (for purposes of this disclosure) using an average exchange rate for 20202023 of $1.139184/$1.081629/Euro. Executive Officer Continuity AgreementAgreements The Company has entered into Executive Officer Continuity Agreements (“Continuity Agreements”) with each of the Company’s NEOs: Josef Matosevic, Sean Bagan, Marc Greenberg, Matteo Arduini, Lee Wichlacz, Tricia Fulton Matteo Arduini, Jinger McPeak, and Melanie Nealis.Jason Morgan. The Continuity Agreements provide for certain benefits to be paid to the executive in connection with a termination of employment that takes place in connection with a “Change of Control” (as defined in the Continuity Agreements). The Continuity Agreements supersede and replace any prior agreements. | | | 46 |2021 Proxy Statement
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The Continuity Agreements provide that on termination of the executive’s employment or other triggering event during the two-year period immediately following, or within 90 days prior to, a change in control, as defined in the Continuity Agreements, he or she is entitled to a lump-sum payment equal to twice the amount of his or her annual salary, plus the cash value at the time of grant of the executive’s current year short-term compensation award, and continuing medical benefits, at the Company’s expense, for the executive and his or her family, for a period of 24 months. The executive also is entitled to immediate vesting of, and an extended period following termination, to exercise all unvested and unexercised stock options and immediate vesting and lapse of all forfeiture provisions relating to, and restrictions upon transfer of, all previously issued shares ofand restricted stock.stock units. To receive the payment and benefits under the Continuity Agreement, the executive must execute a general release and comply with the restrictive covenants set forth in his or her other agreements with the Company during the 24-month period following termination of employment. Executive Officer Severance Agreement On June 14, 2019, theThe Company entered into Executive Officer Severance Agreements (“Severance Agreements”) with Wolfgang Dangel,each of the Company’s NEOs: Josef Matosevic, Sean Bagan, Marc Greenberg, Matteo Arduini, Lee Wichlacz, Tricia Fulton Matteo Arduini, Jinger McPeak, Melanie Nealis and Rajasekhar Menon.Jason Morgan. The Severance Agreements provide for certain benefits to be paid to the executive in connection with a termination of employment that does not occur in connection with a change in ownership or control of the Company. Mr. Arduini is based in Italy and his Italian employment contract would supersede the Severance Agreement where the provisions are more favorable. Mr. Dangel’s and Mr. Menon’s severance agreements were superseded and replaced by the Dangel Separation Agreement and Menon Separation Agreement, respectively, as discussed below.
The Severance Agreements provide that on an “Involuntary Termination of Employment” (as defined in the Severance Agreement), the executive is entitled to a continuation of his or her annual base salary for 12twelve months, a payment equal to the target value at the time of grant of the executive’s current year short-term compensation award, and continuing medical benefits, at Company expense, for the executive and his or her family for a period of 12twelve months. To receive the payment and benefits under the Severance Agreement, the executive must comply with a number of conditions including, executing a general release and complying with the restrictive covenants set forth in his or her agreement(s) with the Company for a period of 12twelve months following termination of employment. | | | | | 2024 Proxy Statement| 49 |
Mr. Arduini is entitled to certain additional severance components pursuant to his employment contract and Italian law in the event of an Involuntary Termination. In the event a benefit is higher under Italian law that provided for under his Severance Agreement, Italian law will govern with the higher term. Based on the events and reasons for the termination, Mr. Arduini may receive, based on his current seniority with the Company, 6six months of notice period compensation plus up to 8eight months of supplemental indemnity, the average amount of his short-term incentive award (based on the last three years), an amount, for the duration of his notice period for continued coverage on his health and welfare plans, his car and housing allowances, and contributions to his pension schemes. In addition, Mr. Arduini will receive consideration for the value of his non-competition clause (the difference between 50% of his annual salary for three years less payments already made). Dangel Separation Agreement
On April 5, 2020,June 4, 2021, the Company entered into a Separationan Amended and Restated Executive Officer Severance Agreement (the “Dangel Separation(“Amended CEO Agreement”) with Mr. Dangel that superseded and replaced any prior compensation and employment agreements between the Company and Mr. Dangel. UnderJosef Matosevic. The Amended CEO Agreement modified the terms of the Separation Agreement, the Company paid Mr. Dangel the same compensation to which he was entitled under hisMatosevic’s original Executive Severance Agreement which included(“Original CEO Agreement”). The Amended CEO Agreement provides for certain benefits to be paid to Mr. Matosevic in connection with a lump-sum cash paymenttermination of $413,000, representing Mr. Dangel’s short-term incentive bonus paid at target. In lieuemployment that does not occur in connection with a change in ownership or control of continuing medical and healthcare benefits initially provided under histhe Company. The Amended CEO Agreement provides that on an “Involuntary Termination of Employment” (as defined in the Severance Agreement, Mr. Dangel received a cash amount equal to $73,048 that included reimbursement forAgreement), the cost of his German health insurance and the cost of U.S. health insurance under COBRA for a period of 12 months. Additionally, Mr. Dangelexecutive is entitled to thea continuation of his annual base salary ($590,000)for 24 months, a payment equal to 200% of the target value at the time of grant of the executive’s current year short-term compensation award, immediate vesting of all stock options, RSUs and PRSUs (at 100% of target, except for PRSUs granted in the year of termination, which will only vest if the termination date occurs at least six months after the beginning of the performance period, and which will vest (if at all) at target on a pro-rata basis) which are outstanding on the date of termination, an extended exercise period of up to one year for vested stock options, and continuing medical benefits, at Company expense, for the executive and his family for a period of 1224 months, fromamong other benefits. To receive the datepayment and benefits under the Amended CEO Agreement, the executive must comply with a number of termination. Mr. Dangel is subject to confidentiality restrictionsconditions including, executing a general release and complying with the restrictive covenants under previously executed equity award and other agreementsset forth in his or her agreement(s) with the Company for a 12-month period.term in effect until all payments and benefits have been made or provided to executive. | | | | | 2021 Proxy Statement| 47 |
Menon Separation Agreement
On September 9, 2020,As previously disclosed, Ms. Fulton departed the Company effective August 8, 2023. In connection with her departure and to effectuate a smooth transition of her duties, the Company entered into a Separation Agreement (the “Menon Separation Agreement”)an advisory and transition services agreement with Mr. Menon that superseded and replaced any prior compensation and employment agreements between the Company and Mr. Menon. Under the terms of the Separation Agreement, the Company paid Mr. Menon the same compensationMs. Fulton, pursuant to which he was entitled under his Severance Agreement, which includedMs. Fulton will provide advisory and transition services during the period of twelve months following her departure, in exchange for a lump-sum cash paymentbi-weekly fee of $193,000, representing Mr. Menon’s short-term incentive bonus paid at target. In lieu of continuing medical and healthcare benefits initially provided under his Severance Agreement, Mr. Menon received a cash amount equal to $24,169 that included reimbursement for the cost of health insurance under COBRA$40,000 for a period of 12twelve months. Additionally,
Departure of President of CVT As previously disclosed, Mr. Menon was entitledMorgan departed the Company effective March 30, 2023. In connection with his departure and to the continuationeffectuate a smooth transition of his annual base salary ($386,000) forduties, as well as provide advisory services with the Company’s regional structure change, the Company entered into an advisory and transition services agreement with Mr. Morgan, pursuant to which Mr. Morgan provided transition and advisory services during a period of 12six months fromfollowing his departure, in exchange for continuation of Mr. Morgan’s base salary and COBRA-eligible benefits for twelve months following March 30, 2023; as well as a lump-sum payment of $419,113 and payment of his target 2023 STI award at the date of termination. Mr. Menon is subject to confidentiality restrictions and restrictive covenants under previously executed equity award and other agreements for a 12-month period. Also, the 5,418 special recognition restricted stock units awarded to Mr. Menon in April 2020 will vest one year from his September 25, 2020 date of separation. Deductibility of Compensation
Section 162(m) of the U.S. Internal Revenue Code places a limit on the tax deductibility of compensation in excess of $1 million paid to certain “covered employees” of a publicly held corporation (generally, the corporation’s principal executive officer, principal financial officer and its next three most highly compensated executive officers in the year that the compensation is paid). Prior to the adoption of the Tax Cuts and Jobs Act (the “Tax Reform”), this limitation applied only to compensation that was not considered performance-based under the Section 162(m) rules. The Tax Reform repealed this exception for performance-based compensation. We generally structure our compensation programs, where feasible, to minimize or eliminate the impact of the limitations of Section 162(m) when we believe such payments are appropriate, after taking into consideration changing business conditions or the officer’s performance. However, nondeductible compensation in excess of this limitation may be paid.target level.
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COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023. COMPENSATION COMMITTEE Douglas M. Britt,Diana Sacchi, Chair
Marc BertonecheCariappa Chenanda
Alexander Schuetz Gregory C. Yadley
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Summary Compensation Table The table below summarizes the total compensation paid or earned by each of the named executive officersNamed Executive Officers serving as such for the fiscal years ended December 30, 2023, December 31, 2022, and January 2, 2021, December 28, 2019, and December 29, 2018.1, 2022 as applicable. When setting total compensation for each of the named executive officers,Named Executive Officers, the Compensation Committee reviews the executive’s current compensation, including equity and non-equity-based compensation, compensation history, performance and other information it deems relevant. FISCAL 2023 SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($) | | | Bonus ($) | | | Stock
Awards
($) (1) | | | Option
Awards
($) (1) | | | Non-Equity
Incentive Plan
Compensation
($) | | | All Other
Compensation
($) (2) | | | Total ($) | | | | | | | | | | | Josef Matosevic(3) | | | 2020 | | | | 406,154 | | | | — | | | | 1,124,819 | | | | 63,729 | | | | 583,147 | | | | 49,651 | | | | 2,227,500 | | President and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Tricia Fulton | | | 2020 | | | | 405,662 | | | | 66,093 | | | | 652,622 | | | | 41,490 | | | | 351,024 | | | | 17,100 | | | | 1,533,991 | | Chief Financial Officer | | | 2019 | | | | 397,116 | | | | — | | | | 390,956 | | | | — | | | | 144,000 | | | | 16,800 | | | | 948,872 | | | | | 2018 | | | | 322,817 | | | | 5,448 | | | | 710,292 | | | | — | | | | — | | | | 34,301 | | | | 1,072,858 | | | | | | | | | | | Melanie Nealis | | | 2020 | | | | 332,800 | | | | 66,093 | | | | 505,238 | | | | 34,034 | | | | 191,984 | | | | 7,446 | | | | 1,137,595 | | Chief Legal and Compliance | | | 2019 | | | | 318,654 | | | | — | | | | 311,780 | | | | — | | | | 76,560 | | | | — | | | | 706,994 | | Officer and Secretary | | | 2018 | | | | 147,846 | | | | 102,039 | | | | 311,700 | | | | — | | | | — | | | | — | | | | 561,585 | | | | | | | | | | | Jinger McPeak | | | 2020 | | | | 278,041 | | | | 50,750 | | | | 341,749 | | | | 17,638 | | | | 120,304 | | | | 12,600 | | | | 821,082 | | President, | | | 2019 | | | | 260,286 | | | | — | | | | 129,498 | | | | — | | | | 58,156 | | | | 12,600 | | | | 460,540 | | Electronic Controls | | | 2018 | | | | 240,663 | | | | 93,406 | | | | 134,525 | | | | — | | | | — | | | | 13,658 | | | | 482,252 | | | | | | | | | | | Matteo Arduini | | | 2020 | | | | 271,419 | | | | — | | | | 333,595 | | | | 16,793 | | | | 127,159 | | | | 85,676 | | | | 834,642 | | President, QRC | | | 2019 | | | | 246,338 | | | | — | | | | 123,629 | | | | — | | | | 37,950 | | | | 51,026 | | | | 458,943 | | | | | 2018 | | | | 217,787 | | | | 41,341 | | | | — | | | | — | | | | — | | | | 25,571 | | | | 284,699 | | | | | | | | | | | Wolfgang Dangel (4) | | | 2020 | | | | 161,115 | | | | — | | | | 860,938 | | | | 89,128 | | | | — | | | | 1,076,869 | | | | 2,188,050 | | (Former) President and | | | 2019 | | | | 545,402 | | | | — | | | | 640,411 | | | | — | | | | 196,560 | | | | 35,053 | | | | 1,417,426 | | Chief Executive Officer | | | 2018 | | | | 529,856 | | | | 8,425 | | | | 968,580 | | | | — | | | | — | | | | 32,246 | | | | 1,539,107 | | | | | | | | | | | Rajasekhar Menon (5) | | | 2020 | | | | 278,692 | | | | — | | | | 489,995 | | | | 33,035 | | | | — | | | | 698,503 | | | | 1,500,225 | | President, CVT | | | 2019 | | | | 261,154 | | | | 106,610 | | | | 292,083 | | | | — | | | | 54,688 | | | | 97,195 | | | | 811,730 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Named Executive Officer | | Year | | | Salary ($) | | | Bonus ($) | | | Stock
Awards ($) (1) | | | Option
Awards ($) (1) | | | Non-Equity
Incentive Plan
Compensation
($) | | | All Other
Compensation
($) (2) | | | Total ($) | | | | | | | | | | | Josef Matosevic | | | 2023 | | | | 950,000 | | | | | | | | 4,445,378 | | | | | | | | 285,000 | | | | 34,900 | | | | 5,715,278 | | President and | | | 2022 | | | | 900,000 | | | | | | | | 3,292,414 | | | | 1,697,200 | | | | 621,000 | | | | 33,667 | | | | 6,544,281 | | Chief Executive Officer | | | 2021 | | | | 786,000 | | | | 813,450 | | | | 1,909,543 | | | | 225,483 | | | | 1,572,000 | | | | 25,500 | | | | 5,331,976 | | | | | | | | | | | Sean Bagan (3) | | | 2023 | | | | 176,000 | | | | 113,920 | | | | 506,655 | | | | | | | | 35,965 | | | | 2,031 | | | | 834,571 | | Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Marc Greenberg | | | 2023 | | | | 330,000 | | | | | | | | 494,384 | | | | | | | | 59,400 | | | | 9,900 | | | | 893,684 | | General Counsel and | | | 2022 | | | | 290,000 | | | | — | | | | 201,325 | | | | 113,147 | | | | 100,050 | | | | 5,689 | | | | 710,211 | | Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Matteo Arduini (4) | | | 2023 | | | | 350,000 | | | | | | | | 514,129 | | | | | | | | | | | | 98,992 | | | | 963,121 | | President, Hydraulics EMEA | | | 2022 | | | | 315,000 | | | | | | | | 265,512 | | | | 113,147 | | | | 90,720 | | | | 89,479 | | | | 873,857 | | | | | 2021 | | | | 306,000 | | | | 108,460 | | | | 276,150 | | | | 23,821 | | | | 230,028 | | | | 98,484 | | | | 1,042,942 | | | | | | | | | | | Lee Wichlacz (5) | | | 2023 | | | | 265,000 | | | | | | | | 156,674 | | | | | | | | | | | | 43,444 | | | | 465,118 | | President Electronics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Tricia Fulton (6) | | | 2023 | | | | 319,452 | | | | | | | | 1,169,782 | | | | | | | | | | | | 419,463 | | | | 1,908,697 | | Former Chief Financial Officer | | | 2022 | | | | 480,000 | | | | | | | | 713,806 | | | | 297,010 | | | | 231,840 | | | | 18,300 | | | | 1,740,956 | | | | | 2021 | | | | 435,000 | | | | 325,380 | | | | 731,935 | | | | 60,451 | | | | 565,500 | | | | 17,400 | | | | 2,135,666 | | | | | | | | | | | Jason Morgan (7) | | | 2023 | | | | 350,000 | | | | | | | | 628,540 | | | | | | | | | | | | 632,953 | | | | 1,611,493 | | Former President, CVT | | | 2022 | | | | 300,000 | | | | — | | | | 297,504 | | | | 113,147 | | | | 96,000 | | | | 11,846 | | | | 818,497 | | | | | 2021 | | | | 237,000 | | | | 162,690 | | | | 127,635 | | | | | | | | 154,430 | | | | 7,573 | | | | 689,327 | |
| | | 50 52 |20212024 Proxy Statement
| | |
| (1) | The dollar values shown represent the grant date fair values for time-based and performance-based restricted stock unit awards and options calculated in accordance with ASCFinancial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. Also included is the incremental expense incurred for the modification of the performance based goals associated with the 2019 grant. A portion of thePerformance-based restricted stock unit awards are subject to performance-based vesting criteria. Reported values are based on the probable outcome of the performance conditions as of the grant date. The values of the awards at the grant date and incremental expense incurred on modification of 2019 grants, assuming that the highest level of performance conditions will be achieved, are as follows: |
| | | | | | | | | | | | | | Year | | | Stock Awards, Assuming
Highest Level of Performance
Conditions are Achieved ($) | | | | Josef Matosevic | | | 2020 | | | 1,473,079 | | | | Tricia Fulton | | | 2020 | | | 918,778 | | | | Melanie Nealis | | | 2020 | | | 723,215 | | | | Jinger McPeak | | | 2020 | | | 453,476 | | | | Matteo Arduini | | | 2020 | | | 439,981 | | | | Wolfgang Dangel | | | 2020 | | | 1,424,703 | | | | Rajasekhar Menon | | | 2020 | | | 698,875 |
| | | | | | | | | | | Named Executive Officer | | Year | | | Stock Awards, Assuming
Highest Level of Performance
Conditions are Achieved
($) | | | | Josef Matosevic | | | 2023 | | | $6,661,511 | | | | Sean Bagan | | | 2023 | | | $632,613 | | | | Marc Greenberg | | | 2023 | | | $656,452 | | | | Matteo Arduini | | | 2023 | | | $686,068 | | | | Lee Wichlacz | | | 2023 | | | $234,808 | | | | Tricia Fulton | | | 2023 | | | $1,612,317 | | | | Jason Morgan | | | 2023 | | | |
| (2) | 2018 amounts include dividends received on unvested restricted stock shares. Those amounts have been excluded for 2019 and 2020 reporting. All Other Compensation amounts for 20202023 are as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Year | | | Perquisites
and Other
Personal
Benefits
($) | | | Company
Contributions to
Retirement and
401(k) Plans ($) | | | Severance Payments / Accruals ($) | | | Total
($) | | | | | | | | Josef Matosevic | | | 2020 | | | | 42,644 | (a) | | | 7,007 | | | | — | | | | 49,651 | | | | | | | | Tricia Fulton | | | 2020 | | | | — | | | | 17,100 | | | | — | | | | 17,100 | | | | | | | | Melanie Nealis | | | 2020 | | | | — | | | | 7,446 | | | | — | | | | 7,446 | | | | | | | | Jinger McPeak | | | 2020 | | | | — | | | | 12,600 | | | | — | | | | 12,600 | | | | | | | | Matteo Arduini | | | 2020 | | | | 49,521 | (b) | | | 36,155 | | | | — | | | | 85,676 | | | | | | | | Wolfgang Dangel | | | 2020 | | | | — | | | | 4,782 | | | | 1,072,087 | | | | 1,076,869 | | | | | | | | Rajasekhar Menon | | | 2020 | | | | 94,325 | (a) | | | 1,751 | | | | 602,427 | | | | 698,503 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Named Executive Officer | | Year | | | Perquisites
and Other
Personal
Benefits ($) | | | Company
Contributions to
Retirement and 401(k) Plans ($) | | | Payment of
Consulting
Fees ($) | | | Total ($) | | | | | | | | Josef Matosevic | | | 2023 | | | $ | 25,000(a) | | | | $9,900 | | | | | | | | $34,900 | | | | | | | | Sean Bagan | | | 2023 | | | | | | | | $2,031 | | | | | | | | $2,031 | | | | | | | | Marc Greenberg | | | 2023 | | | | | | | | $9,900 | | | | | | | | $9,900 | | | | | | | | Matteo Arduini | | | 2023 | | | $ | 61,969(b) | | | | $37,023 | | | | | | | | $98,992 | | | | | | | | Lee Wichlacz | | | 2023 | | | $ | 35,800(c) | | | | $7,644 | | | | | | | | $43,444 | | | | | | | | Tricia Fulton | | | 2023 | | | | | | | | $19,800 | | | | $399,663 | (d) | | | $419,463 | | | | | | | | Jason Morgan | | | 2023 | | | | | | | | $3,840 | | | | $629,113 | (d) | | $ | 632,953 | |
| | (a) | Represents one-time relocation bonus.car allowance of $25,000. |
| | (b) | Represents car andallowance of $25,125, housing allowancesallowance of $8,701, and amounts contributed to employee’s Trattamento di Fine Rapporto (TFR) (Italian statutory severance plan)., $28,143. |
| (c) | Represents allowance for moving expenses. |
| (d) | Represents amounts paid for consulting services provided post employment. |
| (3) | Josef MatosevicSean Bagan joined the Company as CFO in June 2020.August 2023.
|
| (4) | Wolfgang DangelCash amounts for Mr. Arduini are paid in Euros, and for 2023 such amounts have been converted into U.S. dollars based on an average conversion rate of €1 to $1.081629 during 2023.
|
| (5) | Lee Wichlacz assumed the role President Electronics in December 2022. |
| (6) | Tricia Fulton separated from the companyCompany in April 2020.August 2023. Stock and option awards were forfeited upon termination. |
(5)(7) | Raj MenonJason Morgan separated from the Company in September 2020.March 2023. Stock options and option awards were forfeited upon termination, except $171,100 per the terms of the separation agreement.termination.
|
| | | | | 20212024 Proxy Statement| 51 53 |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS | Name | | Grant Date | | | Estimated future payouts
under non-equity incentive
plan awards | | | | | Estimated future payouts
under equity incentive plan
awards (2) | | | All Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | | Exercise
or base
price of
option
awards
($/Sh) | | Grant Date Fair Value of
Stock and
Option
Awards ($) (3) | | | GRANTS OF PLAN-BASED AWARDS | | Estimated future payouts
under non-equity incentive
plan awards | | | | Estimated future payouts
under equity incentive plan
awards (2) | | | All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | | Exercise
or base
price of
option
awards
($/Sh) | | Grant Date
Fair Value
of Stock and
Option
Awards
($) (3) | | Name | | Grant Date | | | Threshold ($) (1) | | Target ($) | | Maximum ($) | | | | Threshold (#) | | Target (#) | | Maximum (#) | | | All Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | | Exercise
or base
price of
option
awards
($/Sh) | | Grant Date Fair Value of
Stock and
Option
Awards ($) (3) | | | Grant Date | | Threshold
($) (1) | | Target ($) | | Maximum
($) | | | | Threshold
(#) (1) | | Target
(#) | | Maximum
(#) | | | | | — | | | | — | | | | — | | | | | 5,127 | | | 15,382 | | | 25,637 | | | January 6, 2023 | | | | | | | | | | — | | | 39,737 | | | 79,474 | | | | | | | | 2,216,132 | | | | July 1, 2020 | (4) | | | — | | | 410,667 | | | 821,333 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | January 6, 2023 | | | | | | | | | | | | | | 39,737 | | | | | | | | 2,229,246 | | Tricia Fulton | | February 28, 2020 | | | | — | | | | — | | | | — | | | | | 3,239 | | | 9,717 | | | 16,195 | | | 7,740 | (10) | | 3,239 | | | 39.75 | | | 662,938 | | | | | Sean Bagan | | | October 1, 2023 | | | | | | | | | | — | | | 2,312 | | | 4,624 | | | | | | | | 125,958 | | | | February 28, 2020 | | | | — | | | 247,200 | | | 494,400 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | October 1, 2023 | | | | | | | | | | | | |
| 2,312
|
| | | | | | | 126,698 | | | | February 22, 2019 | (5) | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 31,174 | | | August 9, 2023 | | | | | | | | | | | | | | 4,000 | | | | | | | | 254,000 | | Melanie Nealis | | February 28, 2020 | | | | — | | | | — | | | | — | | | | | 2,657 | | | 7,971 | | | 13,285 | | | 5,418 | (10) | | 2,657 | | | 39.75 | | | 514,410 | | | | February 28, 2020 | | | | — | | | 135,200 | | | 270,400 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | February 22, 2019 | (5) | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 24,862 | | Jinger McPeak | | February 28, 2020 | | | | — | | | | — | | | | — | | | | | 1,377 | | | 4,132 | | | 6,887 | | | 5,418 | (10) | | 1,377 | | | 39.75 | | | 349,060 | | Marc Greenberg | | | January 6, 2023 | | | | | | | | | | — | | | 2,906 | | | 5,812 | | | | | | | | 162,068 | | | | February 28, 2020 | | | | — | | | 116,800 | | | 233,600 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | January 6, 2023 | | | | | | | | | | | | | | 5,906 | | | | | | | | 332,317 | | | | February 22, 2019 | (5) | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 10,327 | | Matteo Arduini | | February 28, 2020 | | | | — | | | | — | | | | — | | | | | 1,311 | | | 3,934 | | | 6,557 | | | 5,418 | (10) | | 1,311 | | | 39.75 | | | 340,533 | | | January 6, 2023 | | | | | | | | | | — | | | 3,803 | | | 6,166 | | | | | | | | 171,939 | | | | February 28, 2020 | | | | — | | | 83,400 | | | 166,800 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | January 6, 2023 | | | | | | | | | | | | | | 6,082 | | | | | | | | 342,190 | | | | February 22, 2019 | (5) | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 9,855 | | Wolfgang Dangel | | February 28, 2020 | (6) | | | — | | | | — | | | | — | | | | | 6,985 | | | 20,873 | | | 34,788 | | | | — | | | 6,958 | | | 39.75 | | | 899,000 | | Lee Wichlacz | | | January 6, 2023 | | | | | | | | | | — | | | 1,401 | | | 2,802 | | | | | | | | 78,134 | | | | February 28, 2020 | (7) | | | — | | | 413,000 | | | 826,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | January 6, 2023 | | | | | | | | | | | | | | 1,400 | | | | | | | | 78,540 | | | | February 22, 2019 | (5) | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 51,066 | | Rajasekhar Menon | | February 28, 2020 | (8) | | | — | | | | — | | | | — | | | | | 2,579 | | | 7,738 | | | 12,897 | | | 5,418 | (10) | | 2,579 | | | 39.75 | | | 504,370 | | Tricia Fulton | | | January 6, 2023 | | | | | | | | | | — | | | 7,935 | | | 15,870 | | | | | | | | 442,535 | | | | February 28, 2020 | (7) | | | — | | | 193,000 | | | 386,000 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | January 6, 2023 | | | | | | | | | | | | | | 12,934 | | | | | | | | 727,247 | | | | April 1, 2019 | (5) | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 18,660 | | Jason Morgan | | | January 6, 2023 | | | | | | | | | | — | | | 3,853 | | | 7,706 | | | | | | | | 214,882 | | | | | | January 6, 2023 | | | | | | | | | | | | | | 7,353 | | | | | | | | 413,658 | | | | |
| (1) | There are no thresholds for the awards. |
| (2) | Represents the number of performance-based restricted stock units and options granted under the 2019 Equity Incentive Plan. Dividends were not paid on the restricted stock units. |
| (3) | Grant date fair value of awards computed in accordance with FASB ASC Topic 718.718, with reported values for performance-based awards based on the probable outcome of the performance conditions as of the grant date. |
| (4) | Committee actionStock options are subject to a one-year service requirement from the date of May 12, 2020.grant and will generally vest on or after the second anniversary of the grant date upon the Company’s achievement of the following stock price hurdles :1/3 vested at $70/share; 2/3 vested at $80/share; and 100% vested at $90/share.
|
| (5) | Represents the incremental expense incurred for the modification of the performance based goals associated with the 2019 grant.
| (6)Stock and option awards were forfeited upon termination in accordance with the terms of the separation agreement.
|
(7) | Amount was paid at target in accordance with the terms of the separation agreement.
|
(8) | Stock options and awards were forfeited upon termination, except 5,418 special retention shares, in accordance with the terms of the separation agreement.
|
(9) | Restricted units were granted as a one-time sign on equity award.
|
(10) | Restricted units were granted under the Special Retention Restricted Stock Unit Agreements dated April 27, 2020.
|
| | | 52 54 |20212024 Proxy Statement
| | |
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END | | | | Option Awards | | | | Stock Awards | Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option 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 ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) (6) | | 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
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout
Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($) | | | Josef Matosevic | | | — | | | | 5,127 | | | $ | 35.04 | | | | 7/1/2030 | | | | | | 22,627 | (1) | | | 1,205,793 | | | | 10,255 | (1) | | | 546,489 | | Josef Matosevic | | Josef Matosevic | | Josef Matosevic | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 54,147 | (1) | | | 2,455,566 | | | | 55,895 | (1) | | | 2,534,838 | | | Sean Bagan | | Sean Bagan | | Sean Bagan | | Sean Bagan | | | | | | | | 6,312 | (2) | | | 286,249 | | | | 2,312 | (2) | | | 104,849 | | | Marc Greenberg | | Marc Greenberg | | Marc Greenberg | | Marc Greenberg | | | | | | | | | | | | | | | | | | | | 6,747 | (3) | | | 305,976 | | | | 3,894 | (3) | | | 176,593 | | | Matteo Arduini | | Matteo Arduini | | Matteo Arduini | | Matteo Arduini | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,336 | (4) | | | 332,688 | | | | 4,386 | (4) | | | 198,905 | | | Lee Wichlacz | | Lee Wichlacz | | Lee Wichlacz | | Lee Wichlacz | | | | | | | | 1,400 | (5) | | | 63,490 | | | | 1,401 | (5) | | | 63,535 | | | Tricia Fulton | | | — | | | | 3,239 | | | $ | 39.75 | | | | 2/28/2030 | | | | | | 18,821 | (2) | | | 1,002,971 | | | | 11,640 | (2) | | | 620,296 | | Tricia Fulton | | Tricia Fulton | | Tricia Fulton | | | Melanie Nealis | | | — | | | | 2,657 | | | $ | 39.75 | | | | 2/28/2030 | | | | | | 12,820 | (3) | | | 683,178 | | | | 9,431 | (3) | | | 502,578 | | | Jinger McPeak | | | — | | | | 1,377 | | | $ | 39.75 | | | | 2/28/2030 | | | | | | 8,769 | (4) | | | 467,300 | | | | 4,465 | (4) | | | 237,940 | | | Matteo Arduini | | | — | | | | 1,311 | | | $ | 39.75 | | | | 2/28/2030 | | | | | | 7,818 | (5) | | | 416,621 | | | | 4,255 | (5) | | | 226,749 | | | Wolfgang Dangel | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | Rajasekhar Menon | | | — | | | | — | | | | — | | | | — | | | | | | 5,418 | (6) | | | 288,725 | | | | — | | | | — | | | | | | | | | | | | | | | | Jason Morgan | | Jason Morgan | | Jason Morgan | | Jason Morgan | |
| (1) | Unexerciseable options vest as follows: 3,638 on January 28, 2024. Unvested earnedtime-based stock awards represent restricted stock that will vest as follows: 7,5425,386 on July 1, 2021, 7,542January 3, 2024, 13,245 on July 1, 2022January 6, 2024, 3,638 on January 28, 2024, and 7,5435,386 on July 1, 2023.January 3, 2025, 13,246 on January 6, 2025 and 13,246 on January 6, 2026. Unvested unearned stock awards represent restricted units that are contingent upon the achievement of pre-established performance metrics and vest as follows: up to 200% of 10,25521,827 shares on December 31, 2022.30, 2023 (included in the table at the maximum payout of 200% as the level of performance is tracking above target) up to 200% of 16,158 shares on December 28, 2024 (included in the table at the target payout of 100%) and up to 200% of 39,737 shares on March 15, 2026 (included in the table at the target payout of 100%). |
| (2) | Unvested earnedtime-based stock awards represent restricted stock that will vest as follows: 1,7214,000 on February 22, 2021, 1,079January 2, 2024, 770 on February 28, 2021, 4,400October 1, 2024, 771 on March 6, 2021, 1,721October 1, 2025 and 771 on February 22, 2022, 1,080 on February 28, 2022, 7,740 on April 27, 2022, and 1,080 on February 28, 2023.October 1, 2026. Unvested unearned stock awards represent restricted units that are contingent upon the achievement of pre-established performance metrics and vest as follows: up to 150%200% of 5,1622,312 shares on January 1, 2022 and up to 200%March 15, 2026 (included in the table at the target payout of 6,478 shares on December 31, 2022.100%). |
| (3) | Unvested earnedtime-based stock awards represent restricted stock that will vest as follows: 1,372329 on February 22, 2021, 885January 3, 2024, 3,968 on FebruaryJanuary 6, 2024, 182 on January 28, 2021, 2,0002024, 330 on July 9, 2021, 1,373January 3, 2025, 969 on February 22, 2022, 886January 6, 2025 and 969 on February 28, 2022, 5,418 on April 27, 2022 and 886 on February 28, 2023.January 6, 2026. Unvested unearned stock awards represent restricted units that are contingent upon the achievement of pre-established performance metrics and vest as follows: up to 150% of 4,117 shares on January 1, 2022 and up to 200% of 5,314988 shares on December 31, 2022.28, 2024 (included in the table at the target payout of 100%) and 2,906 shares on March 15, 2026 (included in the table at the target payout of 100%). |
| (4) | Unexerciseable options vest as follows: 385 on January 28, 2024. Unvested earnedtime-based stock awards represent restricted stock that will vest as follows: 570434 on February 22, 2021, 459January 3, 2024, 4,027 on FebruaryJanuary 6, 2024, 385 on January 28, 2021, 8342024, 435 on MarchJanuary 3, 2025, 1,027 on January 6, 2021, 5702025 and 1,028 on February 22, 2022, 459 on February 28, 2022, 5,418 on April 27, 2022 and 459 on February 28, 2023.January 6, 2026. Unvested unearned stock awards represent restricted units that are contingent upon the achievement of pre-established performance metrics and vest as follows: up to 150%200% of 1,7102,306 shares on January 1, 2022December 30, 2024 (included in the table at the maximum payout of 200% as the level of performance is tracking above target), up to 200% of 1,303 shares on December 28, 2024 (included in the table at the target payout of 100%) and up to 200% of 2,7553,083 shares on December 31, 2022.March 15, 2026 (included in the table at the target payout of 100%). |
| (5) | Unvested earnedtime-based stock awards represent restricted stock that will vest as follows: 544466 on February 22, 2021, 437January 6, 2024, 467 on February 28, 2021, 545January 6, 2025 and 467 on February 22, 2022, 437 on February 28, 2022, 5,418 on April 27, 2022 and 437 on February 28, 2023.January 6, 2026. Unvested unearned stock awards represent restricted units that are contingent upon the achievement of pre-established performance metrics and vest as follows: up to 150%200% of 1,6321,401 shares on January 1, 2022 and up to 200%March 15, 2026 (included in the table at the target payout of 2,623 shares on December 31, 2022.100%). |
| (6) | AwardsUnexerciseable options vest as follows: 976 on January 28, 2024. Unvested time-based stock awards represent restricted stock that will vest as follows: 1,168 on September 25, 2021; one year from the former executive’s separation date as stated in the separation agreement.January 3, 2024, 7,644 on January 6, 2024 and 976 on January 28, 2024.
|
| | | | | 20212024 Proxy Statement| 53 55 |
FISCAL 2023 OPTION EXERCISES AND STOCK VESTED | | | | Option Awards | | | | Stock Awards | | Option Awards | | | | Stock Awards | | Name | | Number of Shares
Acquired on Exercise (#) | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | | Number of Shares
Acquired on Exercise (#) | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | | Josef Matosevic | | — | | — | | | | — | | — | | — | | — | | | | | 48,871 | | | | 2,497,346 | | | Sean Bagan | | Marc Greenberg | | | — | | — | | | | | 511 | | | | 29,947 | | Matteo Arduini | | | — | | — | | | | | 5,637 | | | | 277,357 | | Lee Wichlacz | | Tricia Fulton | | — | | — | | | | 10,121 | | 417,860 | | | | | | | | | 11,885 | | | | 594,058 | | | Melanie Nealis | | — | | — | | | | 3,373 | | 124,699 | | Jinger McPeak | | — | | — | | | | 2,153 | | 89,020 | | Matteo Arduini | | — | | — | | | | 545 | | 22,792 | | Wolfgang Dangel | | — | | — | | | | 12,819 | | 529,571 | | Rajasekhar Menon | | — | | — | | | | 1,031 | | 35,570 | Jason Morgan | | | — | | — | | | | | 1,085 | | | | 66,630 | |
Pension Benefits The Company does not maintain a pension plan for any of its U.S.-based executive officers,United States based Executive Officers, other than its 401(k) Plans. Through December 31, 2018, the Sun Hydraulics Corporation 401(k) Plan contained an employee stock ownership plan (ESOP) feature. Effective January 1, 2019, the ESOP feature was replaced by the inclusion of Company common stock as an investment option under the 401(k) Plan (and the plan was renamed to the Helios Technologies 401(k) Plan). As described above, Mr. Arduini is a participant in both a state and supplemental pension schemes consistent with Italian law. The Company contributes to both pension schemes on behalf of Mr. Arduini. Nonqualified Deferred Compensation The Company does not maintain a nonqualified deferred compensation program. Employment Agreements
During 2020, the Company entered into two agreements with former NEOs as summarized below.
Dangel Separation Agreement
On April 5, 2020, the Company entered into a Separation Agreement (the “Dangel Separation Agreement”) with Mr. Dangel that superseded and replaced any prior compensation and employment agreements between the Company and Mr. Dangel. Under the terms of the Separation Agreement, the Company paid Mr. Dangel the same compensation to which he was entitled under his Severance Agreement, which included a lump-sum cash payment of $413,000, representing Mr. Dangel’s short-term incentive bonus paid at target. In lieu of continuing medical and healthcare benefits initially provided under his Severance Agreement, Mr. Dangel received a cash amount equal to $73,048 that included reimbursement for the cost of his German health insurance and the cost of U.S. health insurance under COBRA for a period of 12 months. Additionally, Mr. Dangel is entitled to the continuation of his annual base salary ($590,000) for a period of 12 months from the date of termination. Mr. Dangel is subject to confidentiality restrictions and restrictive covenants under previously executed equity award and other agreements for a 12-month period.
Menon Separation Agreement
On September 9, 2020, the Company entered into a Separation Agreement (the “Menon Separation Agreement”) with Mr. Menon that superseded and replaced any prior compensation and employment agreements between the Company and Mr. Menon. Under the terms of the Separation Agreement, the Company paid Mr. Menon the same compensation to which he was entitled under his Severance Agreement, which included a lump-sum cash payment of $193,000, representing Mr. Menon’s short-term incentive bonus paid at target. In lieu of continuing medical and healthcare benefits initially
| | | 54 |2021 Proxy Statement
| | |
provided under his Severance Agreement, Mr. Menon received a cash amount equal to $24,169 that included reimbursement for the cost of health insurance under COBRA for a period of 12 months. Additionally, Mr. Menon was entitled to the continuation of his annual base salary ($386,000) for a period of 12 months from the date of termination. Mr. Menon is subject to confidentiality restrictions and restrictive covenants under previously executed equity award and other agreements for a 12-month period. Also, the 5,418 special recognition restricted stock units awarded to Mr. Menon in April 2020 will vest one year from his September 25, 2020 date of separation.
Potential Payments Upon Termination or Change of Control On June 14, 2019, the Board approved the Continuity Agreement for all ofto be entered into with its executive officers.Executive Officers. The Continuity Agreement provides that upon termination of the executive’s employment or other triggering event during the two-year period immediately following, or within 90 days prior to, a change in control, as defined in the Continuity Agreement, he or she is entitled to a lump-sum payment equal to twice the amount of his or her annual salary, plus the cash value at the time of grant of the executive’s current year short-term compensation award, and continuing medical, dental, life, disability and hospitalization benefits, at the Company’s expense, for the executive and his or her family, for a period of 24 months. The executive also is entitled to immediate vesting of and an extended period following termination in which to exercise all unvested and unexercised stock options and immediate vesting and lapse of all forfeiture provisions relating to, and restrictions upon transfer of, all previously issued shares of restricted stock.stock units. To receive the payment and benefits under the Continuity Agreement, the executive must execute a general release and comply with the restrictive covenants set forth in his or her other agreements with the Company during the 24-month period following termination of employment. Additionally, on June 14, 2019, the Compensation Committee adopted, and the Board endorsed, a form of Severance Agreement to be entered into with each of the Company’s executive officers.Executive Officers. The Severance Agreement provides for certain benefits to be paid to the executive in connection with a termination of employment that does not occur in connection with a change in ownership or control of the Company. The Severance Agreement provides that upon an “Involuntary Termination of Employment” (as defined in the Severance Agreement), he or she is entitled to a continuation of his or her annual base salary for 12twelve months, a payment equal to the cash value at the time of grant of the executive’s current year short-term compensation award, and continuing medical, dental, life, disability and hospitalization benefits, at Company expense, for the executive and his or her family for a period of 12twelve months. To receive the payment and benefits under the Severance Agreement, the executive must comply with a number of conditions including, executing a general release and complying with the restrictive covenants set forth in his or her agreements with the Company for a period of 12twelve months following termination of employment. Mr. Dangel’s Continuity Agreement and Severance Agreement were superseded and replaced in their entirety by the Dangel Separation Agreement on April 5, 2020. Mr. Menon’s Continuity Agreement and Severance Agreement were superseded and replaced in their entirety by the Menon Separation Agreement on Sept. 25, 2020.
Mr. Arduini is entitled to certain additional severance components pursuant to his employment contract and Italian law in the event of an Involuntary Termination. In the event a benefit is higher under Italian law that provided for under his Severance Agreement, Italian law will govern with the higher term. Based on the events and reasons for the termination, Mr. Arduini may receive, based on his current seniority with the Company, 6six months of notice period compensation plus up to 8eight months of supplemental indemnity, the average amount of his short-term incentive award (based on the last three years), an amount, for the duration of his notice period for continued coverage on his health and welfare plans, his car and housing allowances, and contributions to his pension schemes. In addition, Mr. Arduini will receive consideration for the value of his non-competition clause (the difference between 50% of his annual salary for three years less payments already made). Mr. Matosevic’s entered into the Company’s standard form Continuity Agreement on the Effective Date. In addition, the
| | | 56 |2024 Proxy Statement | | |
The Company and Mr. Matosevic entered into an executive officer severance agreementAmended Executive Officer Severance Agreement on the Effective Date. Mr. Matosevic’s severance agreement is similar to the Severance Agreements discussed above, however,June 4, 2021. Mr. Matosevic is entitled to a continuation of his annual base salary for 1824 months, a payment equal to 150%200% of the target value at the time of grant of his current year STI award, and continuing medical benefits, at the Company expense, for Mr. Matosevic and his family for a period of 12 months.24 months, immediate vesting of all stock options, RSUs and PRSUs (at 100% of target, except for PRSUs granted in the year of termination, which will only vest if the termination date occurs at least six months after the beginning of the performance period, and which will vest (if at all) at target on a pro-rata basis) which are outstanding on the date of termination, and an extended exercise period of up to one year for vested stock options. To receive the payment and benefits under his severance agreement, Mr. Matosevic must, among other things, execute a customary release and comply with customary restrictive covenants set forth in his agreements with the Company. | | | | | 2021 Proxy Statement| 55 |
The following table shows the potential payments for continuing NEOs upon termination following a change of control, as if termination had occurred on January 2, 2021:December 30, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary ($) | | STI ($) | | Accelerated
Restricted
Stock
Vesting ($) | | Accelerated Stock
Option
Vesting ($)(1) | | Welfare
Benefits ($) | | Other Benefits ($) | | Total ($) | | | | | | | | | Josef Matosevic | | | | 1,408,000 | | | | | 1,408,000 | | | | | 1,752,282 | | | | | 93,568 | | | | | 50,031 | | | | | — | | | | | 4,711,881 | | | | | | | | | | Tricia Fulton | | | | 824,000 | | | | | 494,400 | | | | | 1,623,267 | | | | | 43,856 | | | | | 27,812 | | | | | — | | | | | 3,013,335 | | | | | | | | | | Melanie Nealis | | | | 676,000 | | | | | 270,400 | | | | | 1,185,756 | | | | | 35,976 | | | | | 52,671 | | | | | — | | | | | 2,220,803 | | | | | | | | | | Jinger McPeak | | | | 584,000 | | | | | 233,600 | | | | | 705,240 | | | | | 18,645 | | | | | 13,888 | | | | | — | | | | | 1,555,373 | | | | | | | | | | Matteo Arduini | | | | 556,000 | | | | | 166,800 | | | | | 643,370 | | | | | 17,751 | | | | | 15,222 | | | | | 194,960 | (2) | | | | 1,594,103 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary ($) | | | STI ($) | | | Accelerated
Restricted
Stock
Vesting ($) | | | Accelerated Stock
Option
Vesting ($)(1) | | | Welfare
Benefits ($) | | | Other Benefits ($) | | | Total ($) | | | | | | | | | | Josef Matosevic | | | 1,900,000 | | | | 1,900,000 | | | | 4,990,405 | | | | | | | | 126,562 | | | | | | | | 8,916,966 | | | | | | | | | | Sean Bagan | | | 880,000 | | | | 572,000 | | | | 391,098 | | | | | | | | 44,991 | | | | | | | | 1,888,089 | | | | | | | | | | Marc Greenberg | | | 660,000 | | | | 366,000 | | | | 482,569 | | | | | | | | 73,024 | | | | | | | | 1,611,593 | | | | | | | | | | Matteo Arduini | | | 700,000 | | | | 420,000 | | | | 531,593 | | | | | | | | 15,440 | | | | 43,242 | (2) | | | 1,710,275 | | | | | | | | | | Lee Wichlacz | | | 530,000 | | | | 265,000 | | | | 127,025 | | | | | | | | 74,956 | | | | | | | | 996,981 | |
| (1) | Amounts assume all unvested options vest and in the money options are transactedexercised immediately upon termination. All options at the end of 2023 were out of the money. |
| (2) | Amount relates to car and housing allowances of $7,337$11,275 required under Italian statutory regulations, $18,078$22,416 in pension contributions, and $169,545$9,551 of consideration for non-competition obligations. |
The following table shows the potential payments for continuing NEOs following an involuntary termination, other than in connection with a change in control, as if termination had occurred on January 2, 2021:December 30, 2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary ($) | | STI ($) | | Welfare
Benefits ($) | | Other Benefits ($) (1) | | Total ($) | | | | | | | Josef Matosevic | | | | 1,056,000 | | | | | 1,056,000 | | | | | 25,016 | | | | | — | | | | | 2,137,016 | | | | | | | | Tricia Fulton | | | | 412,000 | | | | | 247,200 | | | | | 13,906 | | | | | — | | | | | 673,106 | | | | | | | | Melanie Nealis | | | | 338,000 | | | | | 135,200 | | | | | 26,336 | | | | | — | | | | | 499,536 | | | | | | | | Jinger McPeak | | | | 292,000 | | | | | 116,800 | | | | | 6,944 | | | | | — | | | | | 415,744 | | | | | | | | Matteo Arduini | | | | 258,257 | | | | | 83,400 | | | | | 7,611 | | | | | 194,960 | | | | | 544,228 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary ($) | | | STI ($) | | | Accelerated
Restricted
Stock
Vesting ($) | | | Accelerated Stock
Option
Vesting ($)(1) | | | Welfare
Benefits ($) | | | Other Benefits ($) | | | Total ($) | | | | | | | | | | Josef Matosevic | | | 1,900,000 | | | | 1,900,000 | | | | 4,990,405 | | | | | | | | 126,562 | | | | | | | | 8,916,966 | | | | | | | | | Sean Bagan | | | 440,000 | | | | 286,000 | | | | | | | | 22,495 | | | | | | | | 748,495 | | | | | | | | | | Marc Greenberg | | | 330,000 | | | | 198,000 | | | | | | | | | | | | 36,512 | | | | | | | | 564,512 | | | | | | | | | Matteo Arduini | | | 350,000 | | | | 210,000 | | | | | | | | 7,720 | | | | 43,242 | (2) | | | 610,962 | | | | | | | | | | Lee Wichlacz | | | 265,000 | | | | 132,500 | | | | | | | | | | | | 37,478 | | | | | | | | 434,978 | |
| (1) | Amounts assume all unvested options vest and in the money options are exercised immediately upon termination. All options at the end of 2023 were out of the money. |
| (2) | Amount relates to car and housing allowances of $7,337$11,275 required under Italian statutory regulations, $18,078$22,416 in pension contributions, and $169,545$9,551 of consideration for non-competition obligations. |
As previously disclosed, Ms. Fulton departed the Company effective August 8, 2023. In connection with her departure and to effectuate a smooth transition of her duties, the Company entered into an advisory and transition services agreement with Ms. Fulton, pursuant to which Ms. Fulton will provide advisory and transition services following her departure, in exchange for a bi-weekly fee of $40,000 for a period of twelve months. As previously disclosed, Mr. Morgan departed the Company effective March 30, 2023. In connection with his departure and to effectuate a smooth transition of his duties, as well as provide advisory services with the Company’s regional structure change, the Company entered into an advisory and transition services agreement, pursuant to which Mr. Morgan provided transition and advisory services during a period of six months following his departure, in exchange for continuation of Mr. Morgan’s base salary and COBRA-eligible benefits for twelve months following March 30, 2023; as well as a lump-sum payment of $419,113 and payment of his target 2023 STI award at the target level. | | | | | 2024 Proxy Statement| 57 |
CEO to Median Employee Pay Ratio As required under and calculated in accordance with Item 402(u) of Regulation S-K, we have determined a reasonable estimate of the ratio of the annualizedannual total compensation of our three CEOs during 2020 (our former President and Chief Executive Officer Wolfgang Dangel, our former Interim President and CEO Tricia Fulton and our President and CEO Josef Matosevic)Matosevic to the median of the annual total compensation of all employees excluding the CEOsCEO was 71:124:1. This ratio was calculated as described below using the median of annual total compensation of all employees, other than the CEOsCEO of $41,639,$45,863, and the annualizedannual total compensation of the CEOsCEO of $2,972,281. Compensation for the CEOs was based on amounts earned during the periods they served in the role.$5,703,647. The SEC rules for identifying the median compensated employee (“Median Employee”) and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. | | | 56 |2021 Proxy Statement
| | |
ThePer SEC rules, the Company is permitted to use the same median employee as was used in fiscal 2021 and disclosed in our 2020 pay ratio calculation is the same employee we used for the 2019 fiscal year2022 pay ratio disclosure. The annual total compensation for this employeeHowever, since we believe there has been updated to reflect 2020 compensation. We calculated total compensationa change in our employee population through our recent acquisition history, a new median employee was identified for 2020 for this employeeour 2023 pay ratio disclosure using the same methodology used forand calculations to confirm the CEOs in the Summary Compensation Table. We determined that duringmedian employee from fiscal year 2020 there had been no changes2021 and used in our employee population or employee compensation arrangements that would result in significant change to our2022 pay ratio disclosure. Therefore, we are permitted to identify this employee only once every three years. For purposes of this 2020 disclosure, we used December 28, 2019 (the same date as the prior year),30, 2023 as the date used to identify the Median Employee (the “Determination Date”).
On the Determination Date, the Company employed a total of 1,9292,577 employees (including 1,0701,403 employees based in the United States). The Company determined the Median Employee as of the Determination Date by identifying total compensation for the period beginning on December 29, 2018January 1, 2023, and ending on December 28, 201930, 2023, for 1,875 employees who were employed by the Company on the Determination Date. This group of employees included all full- and part-time employees but excluded Mr. Dangel and 54 non-U.S. employees (consisting of 46 employees in India, seven employees in Brazil and one employee in Argentina), who were excluded under the de minimis exception, which allows exclusion of up to 5% of the total employee population. Balboa Water Group was acquired during the 2020 fiscal year. Approximately 80 employees of Balboa Water Group have been omitted from this analysis as permitted by Item 402(u) of Regulation S-K.Matosevic. The group of employees used to determine the median employeeMedian Employee does not include any independent contractors or “leased” workers. Further, we did not use any statistical sampling or cost-of-living adjustments for purposes of this CEO pay ratio disclosure. Total compensation used to determine the median employeeMedian Employee included base wages, overtime, bonus payments, and the grant date fair value of restricted stock awardscompensation granted during the year. A portion of our employee workforce (full-time and part-time) identified above worked for less than the full fiscal year due to commencing employment after December 29, 2018.January 1, 2023. In determining the Median Employee, we annualized the total compensation for such individuals (but avoided creating full-time equivalencies) based on reasonable assumptions and estimates. Compensation paid in currencies other than U.S. dollars was converted to U.S. dollars based on average exchange rates for the 12-monthtwelve month period ending December 28, 2019.30, 2023. After identifying the median employee,Median Employee, we calculated the annual total compensation for 20202023 for this employee using the same methodology used for the CEOsCEO in the Summary Compensation Table. | | | 58 |2024 Proxy Statement | | |
Pay vs. Performance Disclosure As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of RegulationS-K, we are providing the following information about the relationship between compensation actually paid (as calculated in accordance with applicable SEC rules) and certain financial performance of our Company, as well as certain other information. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of initial fixed $100
investment based on: | | | | | | | | | | Summary
Compensation
Table Total for
first PEO (1) | | | Summary
Compensation
Table Total for
second PEO (2) | | | Summary
Compensation
Table Total for
third PEO | | | Compensation
Actually
Paid to first
PEO (4) | | | Compensation
Actually Paid
to second
PEO (4) | | | Compensation
Actually Paid
to third
PEO (4) | | | Average Summary Compensation Table Total for Non-PEO NEOs (5) | | | Average Compensation Actually Paid to Non-PEO NEOs (4) | | | | | | Peer Group
Total
Shareholder
Return (6) | | | | | | | | | 2023 | | | 5,715,278 | | | | N/A | | | | N/A | | | | 4,384,579 | | | | N/A | | | | N/A | | | | 1,112,781 | | | | 1,000,437 | | | | 101.62 | | | | 147.20 | | | | 37.5 | | | | 19.3 | % | | 2022 | | | 6,544,281 | | | | N/A | | | | N/A | | | | 1,486,682 | | | | N/A | | | | N/A | | | | 1,035,880 | | | | 283,340 | | | | 122.03 | | | | 113.39 | | | | 98.4 | | | | 23.2 | % | | 2021 | | | 5,331,977 | | | | N/A | | | | N/A | | | | 10,074,669 | | | | N/A | | | | N/A | | | | 1,223,075 | | | | 2,387,841 | | | | 234.54 | | | | 123.43 | | | | 104.6 | | | | 24.6 | % | | 2020 | | | 2,227,500 | | | | 2,188,050 | | | | 1,533,991 | | | | 2,923,629 | | | | 597,049 | | | | 2,078,775 | | | | 1,165,507 | | | | 1,323,008 | | | | 118.23 | | | | 112.22 | | | | 14.2 | | | | 23.2 | % |
| (1) | Josef Matosevic joined the Company in June 2020. |
| (2) | Wolfgang Dangel separated from the Company in April 2020. |
| (3) | Tricia Fulton was interim CEO for the period from April 2020 to June 2020. |
| (4) | The charts below detail the additions to and deductions from the Summary Compensation Table Totals to calculate the Compensation Actually Paid amounts. |
| (5) | TheNon-PEO NEOs are comprised of: 2023 – Sean Bagan, Tricia Fulton (resigned in August 2023), Matteo Arduini, Lee Wichlacz, Jason Morgan (resigned in March 2023) and Marc Greenberg; 2022 – Tricia Fulton, Matteo Arduini, Jason Morgan and Marc Greenberg; 2021 – Tricia Fulton, Matteo Arduini, Jason Morgan, Melanie Nealis (resigned in March 2022) and Jinger McPeak (separated in April 2021); 2020 - Matteo Arduini, Melanie Nealis (resigned in March 2022), Jinger McPeak (separated in April 2021) and Raj Menon (separated in September 2020). |
| (6) | The Company utilized the Dow Jones US Diversified Industries Index, for the peer group. This index has been utilized historically in our Annual Reports on Form10-K in connection with the performance graph and most closely aligns with our line of business. |
| (7) | Adjusted EBITDA margin was selected as the Company-Selected Measure. A detailed adjusted EBITDA margin description and reconciliation can be found within our Q4 2023 earnings release included as Exhibit 99.1 to the Company’s Current Report on Form 8-K furnished with the SEC on February 27, 2024. |
The following table reconciles the Summary Compensation Table (“SCT”) totals to Compensation Actually Paid (“CAP”). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table Total | | | 5,715,278 | | | | 1,112,781 | | | | | | | | 6,544,281 | | | | 1,035,880 | | | | | | | | 5,331,977 | | | | 1,223,075 | | | | | | | | 2,227,500 | | | | 2,188,050 | | | | 1,165,507 | | | | | | | | | | | | | | | | Deduction for value reported in the Stock Awards and Option Awards columns of the SCT | | | (4,445,378 | ) | | | (578,361 | ) | | | | | | | (4,989,614 | ) | | | (528,649 | ) | | | | | | | (2,135,026 | ) | | | (426,655 | ) | | | | | | | (1,188,548 | ) | | | (950,066 | ) | | | (493,238 | ) | | | | | | | | | | | | | | Addition for year-end fair value of equity awards granted in the current year | | | 3,604,146 | | | | 464,664 | | | | | | | | 3,517,429 | | | | 362,285 | | | | | | | | 4,104,868 | | | | 503,846 | | | | | | | | 1,884,677 | | | | — | | | | 571,465 | | | | | | | | | | | | | | | | Addition / (Deduction) for the change in fair value of equity awards granted in prior years and unvested as of the end of the current year | | | (745,509 | ) | | | (21,906 | ) | | | | | | | (1,918,378 | ) | | | (194,346 | ) | | | | | | | 2,555,350 | | | | 827,017 | | | | | | | | — | | | | — | | | | 122,384 | | | | | | | | | | | | | | | | Addition / (Deduction) for the change in fair value of equity awards granted in prior years and vested during the current year | | | 256,042 | | | | 23,259 | | | | | | | | (1,667,036 | ) | | | (391,830 | ) | | | | | | | 217,500 | | | | 326,594 | | | | | | | | — | | | | (53,694 | ) | | | (18,740 | ) | | | | | | | | | | | | | | | Deduction for the fair value as of the prior year end of equity awards deemed to fail to meet the applicable vesting conditions in the current year | | | — | | | | — | | | | | | | | — | | | | — | | | | | | | | — | | | | (66,036 | ) | | | | | | | — | | | | (587,241 | ) | | | (24,370 | ) | | | | | | | | | | | | | | | Compensation Actually Paid | | | 4,384,579 | | | | 1,000,437 | | | | | | | | 1,486,682 | | | | 283,340 | | | | | | | | 10,074,669 | | | | 2,387,841 | | | | | | | | 2,923,629 | | | | 597,049 | | | | 1,323,008 | |
| | | | | 2024 Proxy Statement | 57 59 |
DIRECTOR COMPENSATION
Since June 2012,
The charts below present the relationship between the PEOs and average other NEOs’ CAP to the Company and peer group total shareholder return, net income, and adjusted EBITDA margin for the previous four years. The graphical representations demonstrate that both the PEOs and average other NEOs CAP is aligned with shareholder and Company performance. Compensation actually paid to PEOs presented in the charts combine the full year compensation of our three PEOs for the 2020 year even though they only served a partial year. Average compensation paid to other NEOs is impacted by the composition of our NEOs each year. The Company’s TSR has outperformed its peer group over the past four years. The relationshipbetween CAP and Company TSR is influenced by equity compensation. The Company’s stock price has a significant impact on compensation actually paid to our NEOs as a large portion of NEO compensation is equity based. Ouryear-end stock price has fluctuated over the pastf ou r years as follows: $53.29 in 2020, $105.17 in 2021, $54.44 in 2022, and $45.35 in 2023. Net income in 2020 was lower due to an impairment loss recognized on our goodwill as a result of the economic uncertainty caused by the COVID-19 pandemic, while net income in the 2021 and 2022 years benefited from acquisitions. 2023 net income was negatively impacted by macroeconomic factors causing swift shifts to the markets we serve.
A significant portion of compensation paid to NEOs is based on Company performance. Adjusted EBITDA margin is a performance metric used sharesin both STI and LTI performance payout. Since compensation is directly tied to this measure there is a high degree of its commoncorrelation between it and compensation. However, CAP is also highly influenced by the Company’s stock price due to the level of equity compensation. The following table liststhe four unranked financial performance measures that we believe represent the most important financial performance measures we used to link compensation actually paid to ourNEOs to our performance: | | Most Important Performance Measures | | | Adjusted EBITDA Margin | | | Revenue Growth | | | Adjusted Free Cash Flow Margin | | AdjustedNon-GAAP Diluted EPS |
| | | | | 2024 Proxy Statement | 61 |
DIRECTOR COMPENSATION The Compensation Committee is responsible for reviewing and making recommendations to the Board regarding all matters pertaining to compensation paid to Directors. Compensation to Directors is provided under the Company Non-Employee Director Compensation Policy (the Director Policy). Directors who also serve as employees of the sole compensationCompany do not receive payment for members of its Board. Since 2015,their services as Director. Effective January 1, 2022, the Board approved after Compensation Committee recommendation, the Director Policy, in which each nonemployee Director is paid an annuala quarterly cash retainer of 2,000 shares of Company common stock. The retainer for committee chairs is 1.5 times the regular Director rate and thefollowing each regularly scheduled quarterly Board Chair’s retainer is 2.25 times the regular Director rate. Each nonemployee Director also receives 250 shares for attendance at each Board meeting and each in-person committee meeting on which he or she serves. No additional compensation is paid for meetings that are held within one day ofMeeting as well as a Board meeting or for separate meetings of less than four hours. The shares of Company common stock are issued under the Sun Hydraulics Corporation 2012 Nonemployee Director Fees Plan (the “2012 Directors Plan”). quarterly Restricted Stock Unit award as detailed below. The Board believes that compensation of Directors entirely in Company common stock with a specified number of shares, rather than calculatingunder the number based on a stated dollar amount,Directors Policy aligns the interests of Directors with those of the shareholders in the long-term growth and profitability of the Company. The Compensation Committee reviews the Director compensation program and adjusts compensation periodically so that it remains fair and competitive. As with executive compensation, industry data is used periodically as reference points. Directors also are reimbursed for their expenses incurred in connection with their attendance at such meetings. Directors who are employees of the Company do not receive any additional compensation for their service as Directors. Additionally, Directors are subject to Stock Ownership Guidelines where non-management members of the Board should own and hold shares with a value equal to two times (2x) the number of shares award to them annually as directors’ fees. 2020 Board Pay Decisions
DueNo changes were made to the challenges of the COVID-19 pandemic and to manage costs, at its April 2020 meeting, the Board approved a 20% reductionDirector Policy in director compensation for the August, October and December meetings. The Board also granted special assignment equity awards to four directors for various roles serving on the CEO selection committee in 2020: Laura Dempsey Brown, Kennon Guglielmo, Doug Britt and Philippe Lemaitre. Also, Mr. Lemaitre received an additional equity award for serving as the temporary Executive Chairman during the 2020 CEO transition.2023.
2020 Director Compensation2023 ANNUAL DIRECTOR COMPENSATION
| | | | | | | | | | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($) (1) | | All Other Compensation ($) (2) | | Total ($) | | | | | | Marc Bertoneche | | — | | 109,568 | | — | | 109,568 | | | | | | Douglas M. Britt (3) | | — | | 182,413 | | — | | 182,413 | | | | | | Laura Dempsey Brown (4) | | — | | 105,475 | | — | | 105,475 | | | | | | Cariappa (Cary) M. Chenanda | | — | | 79,530 | | — | | 79,530 | | | | | | Kennon H. Guglielmo(4) | | — | | 125,135 | | — | | 125,135 | | | | | | Christine L. Koski | | — | | 30,038 | | — | | 30,038 | | | | | | Philippe Lemaitre (5) | | — | | 294,276 | | — | | 294,276 | | | | | | Josef Matosevic (6) | | — | | — | | — | | — | | | | | | Alexander Schuetz | | — | | 172,235 | | — | | 172,235 | | | | | | Gregory C. Yadley | | — | | 79,530 | | — | | 79,530 |
| | | | | ANNUAL CASH COMPENSATION: ANNUAL EQUITY COMPENSATION: ADDITIONAL EQUITY COMPENSATION Chairman Chair of Audit & Compensation Committees Chairs of all other Committees | | $88,750 $155,000 $106,000 $20,000 $10,000 | | Directors are paid a quarterly cash retainer following each regularly scheduled quarterly Board Meeting in the amount of $22,187.50 as well as a quarterly Restricted Stock Unit award with a target value equal to $38,750.00. An additional quarterly Restricted Stock Unit award will be granted to Committee chairs with a target value equal to $5,000 for the Audit Committee Chair; $5,000 for the Compensation Committee Chair; $2,500 for the ESG Committee Chair; and $2,500 for the Nominating Committee Chair. The person serving as the Non-Employee Director Chair of the Board will be granted an additional quarterly Restricted Stock Unit award with a target value equal to $26,500. Directors are subject to Stock Ownership Guidelines where non-management members of the Board should own and hold shares with a value equal to two times (2x) the number of shares awarded to them annually as Directors’ fees. |
2023 Director Compensation | | | | | | | | | | | | | | | | | | | | | | Name (1) | | Fees Earned or
Paid in Cash
($) | | Stock Awards ($)(2) | | All Other
Compensation
($) | | Total ($) | | | | | | Douglas Britt | | | | 88,750 | | | | | 154,072 | (3) | | | | — | | | | | 242,822 | | | | | | | Laura Dempsey Brown | | | | 88,750 | | | | | 173,985 | (4) | | | | — | | | | | 262,735 | | | | | | | Cariappa (Cary) Chenanda | | | | 88,750 | | | | | 164,028 | (5) | | | | — | | | | | 252,778 | | | | | | | Philippe Lemaitre | | | | 88,750 | | | | | 259,401 | (6) | | | | — | | | | | 348,151 | | | | | | | Diana Sacchi | | | | 66,563 | | | | | 173,985 | (5) | | | | — | | | | | 240,548 | | | | | | | Alexander Schuetz | | | | 88,750 | | | | | 164,028 | (7) | | | | — | | | | | 252,778 | |
| (1) | The stock awards represent aggregate grant date fair market value, based on the average of the high and low market price as of the date of grant. The common stock was issued during 2020 for their service as directors and for attendance at Board meetings. Please see the Security Ownership of Certain Beneficial Owners and Management schedule under Item 12 regarding the number of shares beneficially owned by each of the Directors.
|
(2) | We have a travel and reimbursement policy under which we reimburse the expenses of a director’s spouse for travel costs incurred in connection with business of the Board when appropriate. The cost to the Company for providing these perquisites was less than $10,000 for each Director.
|
(3) | Includes 700 special assignment equity awards for various roles serving on the CEO selection committee in 2020.
|
(4) | Includes 300 special assignment equity awards for various roles serving on the CEO selection committee in 2020.
|
(5) | Includes 1,800 special assignment equity awards for various roles serving on the CEO selection committee and serving as Executive Chairman in 2020.
|
(6) | Although Mr. Matosevic was appointed President and CEO of the Company as of June 1, 2020. Although he is a member of the Board,board, as President and CEO he does not receive any stock awards or other fees for his service as a Director of the Company.Company and his compensation for 2023 is disclosed in the Fiscal 2023 Summary Compensation Table above. |
| (2) | The stock awards represent the aggregate grant date fair value of restricted stock units granted. The RSUs are granted quarterly for service as a Director and for attendance at Board meetings and vest one year from the date of the grant. Quarterly grants occurred on March 8, 2023, June 7, 2023, September 29, 2023, and December 11, 2023. |
| (3) | The grant date fair value of RSUs issued each quarter totaled approximately $38,800. As of December 31, 2023, 2,908 RSUs were unvested. |
| (4) | The grant date fair value of RSUs issued each quarter totaled approximately $43,500. As of December 31, 2023, 3,284 RSUs were unvested. |
| (5) | The grant date fair value of RSUs issued each quarter totaled approximately $43,800. As of December 31, 2023, 3,284 RSUs were unvested. |
| (6) | The grant date fair value of RSUs issued each quarter totaled approximately $65,300. As of December 31, 2023, 4,896 RSUs were unvested. |
| (7) | The grant date fair value of RSUs issued each subsequent quarter totaled approximately $41,300. As of December 31, 2023, 3,096 RSUs were unvested. |
| | | 58 62 |20212024 Proxy Statement
| | |
Equity Compensation Plan Information The following table summarizes the Company’s equity compensation plan information as of January 2, 2021.December 31, 2023. Information is included for both equity compensation plans approved by the Company’s shareholders and equity compensation plans not approved by the shareholders. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants, and
rights | | | | Weighted-
average
exercise
price of
outstanding
options,
warrants,
and rights | | | | Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding
securities
reflected in
column (a)) | Plan category
| | (a) | | | | (b) | | | | (c) | | | | | | | Equity compensation plans approved by shareholders
| | —
| | | | —
| | | | | | | | | 1,451,844
| | | | | | | | Equity compensation plans not approved by shareholders
| | —
| | | | —
| | | | | | | | | —
| | | | | | | | Total
| | —
| | | | —
| | | | | | | | | 1,451,844
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants, and
rights | | | | Weighted-
average
exercise
price of
outstanding
options,
warrants,
and rights | | | | Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding
securities
reflected in
column (a)) | | Plan category | | (a) | | | | (b) | | | | (c) | | | | | | | Equity compensation plans approved by security holders | | | | 524,017 | (1) | | | | | | | | | 50.92 | (2) | | | | | | | | | 749,059 | (3) | | | | | | | | Equity compensation plans not approved by security holders | | | | — | | | | | | | | | | — | | | | | | | | | | — | | | | | | | | Total | | | | 524,017 | | | | | | | | | | 50.92 | | | | | | | | | | 749,059 | |
Equity compensation plans approved by the shareholders include the Employee Stock Purchase Plan and the 20192023 Equity Incentive Plan and the 2012 Nonemployee Director Fees Plan. The number of securities available for future issuance in column (c) as of January 2, 2021, were 363,458 shares under the Employee Stock Purchase Plan, 48,171 shares under the Sun Hydraulics Limited Share Incentive Plan, 968,666 shares under the 2019 Equity Incentive Plan, and 71,549 shares under the 2012 Nonemployee Director Fees Plan.
| (1) | Consists of 92,233 stock options, 174,156 RSUs and 257,628 PRSUs. Maximum payout of 200% per units is assumed for the PRSUs which may overstate actual dilution that could occur. |
| (2) | Reflects the weighted average exercise price of stock options outstanding. RSUs and PRSUs are not included in this column as they have no exercise price. |
| (3) | The number of securities available for future issuance as of December 30, 2023, were 253,853 shares under the Employee Stock Purchase Plan, 46,380 shares under the Sun Hydraulics Limited Share Incentive Plan and 448,826 shares under the 2023 Equity Incentive Plan. Shares available under the 2023 Equity Incentive Plan may be issued with respect to awards other than options, warrants and rights, such as restricted stock. |
| | | | | 20212024 Proxy Statement| 59 63 |
PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee engaged Grant Thornton LLP (“Grant Thornton”) to report upon the financial statements of the Company for the years ended December 29, 2019 and January 2, 2021, and the effectiveness of the Company’s internal control over financial reporting as of December 28, 2019 and January 2, 2021, respectively. Those audited financial statements are provided in conjunction with the Company’s annual report to shareholders that has been provided to the shareholders along with this Proxy Statement.
Fees
The Company incurred the following fees to Grant Thornton LLP during fiscal years 2020 and 2019.
| | | | | | | | | | | | 2020 | | | 2019 | | | | | Audit Fees: | | | | | | | | | | | | Grant Thornton (principal auditor) | | $ | 1,505,520 | | | $ | 1,419,384 | | | | | Other Auditors | | | — | | | | — | | | | | Subtotal | | | 1,505,520 | | | | 1,419,384 | | | | | Audit Related Fees | | | 48,555 | | | | 50,083 | | | | | Tax Fees | | | 41,305 | | | | 53,500 | | | | | All Other Fees | | | — | | | | — | |
Audit Fees were for professional services rendered for the audit of the Company’s consolidated financial statements included in Form 10-K, reviews of the consolidated financial statements included in Forms 10-Q, and statutory audits of the Company’s wholly-owned subsidiaries for the fiscal years 2020 and 2019, respectively.
Audit Related Fees were incurred for employee benefit plan audit services.
The Audit Committee has not adopted any pre-approval policies and approves all engagements with the Company’s auditors prior to the performance of services by them.
A representative from Grant Thornton will be in attendance at the Meeting, will have the opportunity to make a statement if desired, and will be available to respond to any questions from those in attendance.
The Audit Committee has appointed Grant Thornton to report upon the financial statements of the Company for the year ended January 1, 2022, and the effectiveness of the Company’s internal control over financial reporting as of January 1, 2022.
| | | | | | | 2 | | 
| | | | The Board of Directors recommends a vote “FOR” the ratification of Grant Thornton LLP as Independent Auditors. | | The Audit Committee has appointed Grant Thornton to report upon the financial statements of the Company for the year ending December 28, 2024, and the effectiveness of the Company’s internal control over financial reporting as of December 28, 2024. Although the Company is not required to seek shareholder ratification of this appointment by the Company’s Bylaws or otherwise, the Board believes it to be sound corporate governance to do so. If the shareholders do not ratify this appointment, the Audit Committee will reconsider the appointment and consider that vote in the review of its future selection of accountants but will not be required to engage a different auditing firm. |
The Audit Committee engaged Grant Thornton LLP (“Grant Thornton”) to report upon the financial statements of the Company for the years ended December 30, 2023, and December 31, 2022, and the effectiveness of the Company’s internal control over financial reporting as of December 30, 2023, and December 31, 2022, respectively. Those audited financial statements are provided in conjunction with the Company’s annual report to shareholders that has been provided to the shareholders along with this Proxy Statement. Fees The Company incurred the following fees to Grant Thornton LLP during fiscal years 2023 and 2022. | | | | | | | | | | | | 2023 | | | 2022 | | | | | Audit Fees: | | | | | | | | | | | | Grant Thornton (principal auditor) | | $ | 1,877,483 | | | $ | 1,761,043 | | | | | Other Auditors | | | — | | | | — | | | | | Subtotal | | | 1,877,483 | | | | 1,761,043 | | | | | Audit Related Fees | | | 40,000 | | | | 257,500 | | | | | Tax Fees | | | 145,408 | | | | 65,590 | | | | | All Other Fees | | | — | | | | — | |
Audit Fees were for professional services rendered for the audit of the Company’s consolidated financial statements included in Form 10-K, reviews of the consolidated financial statements included in Forms 10-Q, and statutory audits of the Company’s wholly owned subsidiaries for the fiscal years 2023 and 2022, respectively. Audit Related Fees were incurred for employee benefit plan audit services and due diligence services provided by Grant Thornton’s transaction advisory services group in connection with the Company’s acquisition activity. The Audit Committee has not adopted any pre-approval policies and approves all engagements with the Company’s auditors prior to the performance of services by them. A representative from Grant Thornton will attend the Annual Meeting, will have the opportunity to make a statement if desired, and will be available to respond to any questions from those in attendance. If a quorum is present at the meeting, Proposal 2 will be approved if votes cast favoring the action exceed the votes cast opposing the action. | | | 64 |2024 Proxy Statement | | |
PROPOSAL — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | | | | | | | 
| | | | | | The Board of Directors recommends a vote “FOR” the advisory vote to approve named executive officer compensation. | | Shareholders are being asked to approve, on an advisory basis, the compensation of our Named Executive Officers as a matter of good corporate practice, has elected to seek ratification of Grant Thornton LLP asdescribed in the independent registered public accounting firm to report onCompensation Discussion and Analysis and the financial statements of the Company for the year ended January 1, 2022,related compensation tables and recommends that you vote “FOR” Proposal 2.narrative disclosure. |
| | | 60 |2021 Proxy Statement
| | |
PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION
At our 20212024 Annual Meeting of Shareholders, as provided in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) and as required by Section 14A of the Securities Exchange Act of 1934, as amended, we providedare providing our shareholders the opportunity to advise our Compensation Committee and Board regarding the compensation of our named executive officersNamed Executive Officers as described in our proxy statementProxy Statement pursuant to the compensation disclosure rules of the SEC (“say on pay”). At our 20172023 Annual Meeting of Shareholders, as provided in the Dodd-Frank Act, our shareholders were asked to indicate how frequently we should seek a “say on pay” advisory vote. The shareholders were able to indicate whether they would prefer an advisory vote on named executive officerto approve Named Executive Officer compensation once everyevery: one, two, or three years. At the 20172023 Annual Meeting, 89.95%approximately 96% of shareholders voting or who abstained from voting endorsed our Board’s recommendation that the advisory “say on pay” vote be held every year. Therefore, we are providing our shareholders the opportunity to advise our Compensation Committee and Board regarding the compensation of our named executive officersNamed Executive Officers as described in this Proxy Statement. As set forth in detail under the heading “Executive Compensation — Compensation Discussion and Analysis,” the goals of our compensation program are to attract, retain, motivate and reward highly qualified leadership personnel and to provide them with attractive long-term career opportunities. Our compensation philosophy is to provide executives with a competitive total compensation package which motivates superior job performance, the achievement of our business objectives, and the enhancement of shareholder value. The Company’s objective is to attract, retain, and motivate excellent employees, in alignment with the Company’s Vision 2025 and long-termaugmented strategy, and to align the interests of employees with those of the shareholders by giving them a personal interest in the value of the Company’s Common Stock. Please see the Compensation Discussion and Analysis beginning on page 32 for a detailed description and analysis of our executive compensation programs, including information about the fiscal year 2019 and 20202023 compensation of our named executive officers.Named Executive Officers. The advisory “say on pay” vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officersNamed Executive Officers and the philosophy, policies and practices described in this Proxy Statement. We will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting: “RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers,Named Executive Officers, as disclosed in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure set forth in the Company’s 20212024 Proxy Statement.” This say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board. However, we value the opinions of our shareholders, and our Board and Compensation Committee will consider the outcome of the vote when making future executive compensation decisions. We expect that our next “say on pay” vote will be held at our 2025 Annual Meeting of shareholders. If a quorum is present at the meeting,Annual Meeting, Proposal 3 will be approved if votes cast favoring the action exceed the votes cast opposing the action. | | | | |
| | | | The Board of Directors recommends that you vote “FOR” Proposal 3, the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this2024 Proxy Statement.
Statement| 65 |
OTHER BUSINESS Management of the Company does not know of any other business that may be presented at the Annual Meeting. If any matter not described herein should be presented for shareholder action at the Meeting, the persons named in the enclosed Proxy will vote the shares represented thereby in accordance with their best judgment. | | | 66 |2024 Proxy Statement | | 2021 Proxy Statement| 61 |
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS AND NOMINATION OF DIRECTORS BY SHAREHOLDERS FOR THE 20222025 PROXY STATEMENT AND PRESENTATION AT THE 20222025 ANNUAL MEETING Our Bylaws govern the submission of nominations for Director or other business proposals that a shareholder wishes to have considered at a meeting of shareholders, but which are not included in the Company’s proxy statementProxy Statement for that meeting. Under our Bylaws, if a shareholder, at our 20222025 Annual Meeting, wants to: (i) nominate a person to stand for election as a Director, the nomination must be received at our principal executive offices no earlier than January 8, 2022,6, 2025, and no later than February 7, 2022. Therefore, notice5, 2025. Notice to the Company of a shareholder nomination submitted before January 8, 2022,6, 2025, or after February 7, 2021,5, 2025, will be considered untimely and will not be considered at the 20222025 Annual Meeting; or (ii) introduce an item of business, the proposal must be received at our principal executive offices no later than December 23, 2021.26, 2024. Accordingly, notice to the Company of a shareholder proposal received after December 23, 2021,22, 2024, will be considered untimely and will not be considered at the 20222025 Annual Meeting. These advance notice provisions are in addition to, and separate from, the SEC requirements that a shareholder must meet to have a proposal included in our Proxy Statement and form of proxy for presentation at our Annual Meetings. Under SEC Rule 14a-8, if a shareholder wants to introduce an item of business at our 2025 Annual Meeting and have us include such proposal in our proxy statement and form of proxy for presentation, the proposal must comply with SEC Rule 14a-8 and be received at our annual meetings. We expectprincipal executive offices no later than December 26, 2024 and otherwise comply with the requirements of SEC Rule 14a-8. In addition to holdsatisfying the requirements under our 2022by-laws, if a shareholder intends to comply with the SEC’s universal proxy rules and to solicit proxies in support of Director nominees other than the Company’s nominees, the shareholder must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to us at our principal executive offices no later than 60 calendar days prior to the one-year anniversary date of the Annual Meeting (for the 2025 Annual Meeting of Shareholders, no later than April 7, 2025). If the date of the 2025 Annual Meeting is changed by more than 30 calendar days from such anniversary date, however, then the shareholder must provide notice by the later of 60 calendar days prior to the date of the 2025 Annual Meeting and the 10th calendar day following the date on or about June 7, 2022.which public announcement of the date of the 2025 Annual Meeting is first made. Under our Bylaws, a shareholder must follow certain procedures to nominate persons for election as Directors or to introduce an item of business at an Annual Meeting of Shareholders. The procedures for nominating a Director are described above in “Governance of the Company — Independence and Committees of the Board of Directors” under the headings “Governance and Nominating Committee” and“Shareholder Recommendations for Nomination as a Director.” The procedures for introducing an item of business at the 20222025 Annual Meeting require providing a written notice of each proposed item of business that must include: | (i) | a brief description of the business desired to be brought before the meeting, |
| (ii) | the reasons for conducting such business at the meeting, |
| (iii) | the name and record address of the shareholder proposing such business, |
| (iv) | the number of shares of stock owned beneficially or of record by the shareholder, |
| (v) | a description of all arrangements or understandings between the shareholder and any other person or persons (including their names) in connection with the proposal of such business by the shareholder and any material interest of the shareholder in such business, and |
| (vi) | a representation that the shareholder intends to appear in person or by proxy to bring such business before the meeting. |
Shareholder proposals and nominations for Director should be submitted in writing to the Corporate Secretary, at 1500 West University Parkway,7456 16th Street East, Sarasota, Florida 34243. A copy of the Company’s Bylaws will be provided upon request in writing to the Secretary. By Order of the Board of Directors, 
MELANIE M. NEALIS
General Counsel & Secretary Dated: April 23, 202125, 2024 | | | | | 2024 Proxy Statement| 67 |
APPENDIX A NON-GAAP RECONCILIATION | | | | | | 62 |2021 Proxy StatementNon-GAAP Adjusted Net Income Reconciliation
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Dec 30, 2023 | | | GAAP net income | | | | $ 37.5 | | | | Acquisition and financing-related expenses1 | | | | 4.0 | | | | Restructuring charges2 | | | | 12.1 | | | | Officer transition costs | | | | 1.2 | | | | Acquisition integration costs3 | | | | 0.3 | | | | Change in fair value of contingent consideration | | | | (0.1 | ) | | | Amortization of intangible assets4 | | | | 33.6 | | | | Other | | | | (0.3 | ) | | | Tax effect of above | | | | (11.2 | ) | | | Non-GAAP Adjusted net income* | | | | $77.1 | | | | Non-GAAP Adjusted net income per diluted share* | | | | $ 2.34 | |
| | | | | | Non-GAAP Adjusted EBITDA Reconciliation | | Year Ended
Dec 30, 2023 | | | Net Income | | | | $ 37.5 | | | | Interest expense, net | | | | 31.2 | | | | Income tax provision | | | | 11.7 | | | | Depreciation and amortization | | | | 63.8 | | | | EBITDA* | | | | 144.2 | | | | Acquisition and financing-related expenses1 | | | | 4.0 | | | | Restructuring charges2 | | | | 12.1 | | | | Officer transition costs | | | | 1.2 | | | | Acquisition integration costs3 | | | | 0.3 | | | | Change in fair value of contingent consideration | | | | (0.1 | ) | | | Other | | | | (0.3 | ) | | | Adjusted EBITDA* | | | | $161.4 | | | | Adjusted EBITDA margin* | | | | 19.3 | % |
| | | | | | Non-GAAP Adjusted Free Cash Flow | | Year Ended
Dec 30, 2023 | | | Net Cash provided by operating activities | | | | $83.9 | | | | Contingent consideration payment in excess of acquisition date fair value | | | | 2.7 | | | | Adjusted net cash provided by operating activities* | | | | $86.6 | | | | Less: capital expenditures | | | | 34.3 | | | | Adjusted free cash flow* | | | | $ 52.3 | |
| | | 68 |2024 Proxy Statement | | |
| | | | | | Net Debt-to-Non GAAP Adjusted EBITDA Reconciliation | | As of
December 30, 2023 | | | Current portion of long-term non-revolving debt, net | | | | 23.2 | | | | Revolving lines of credit | | | | 203.3 | | | | Long-term non-revolving debt, net | | | | 298.3 | | | | Total debt | | | | 524.8 | | | | Less: Cash and cash equivalents | | | | 32.4 | | | | Net debt | | | | 492.4 | | | | TTM Pro forma adjusted EBITDA5 | | | | 163.6 | | | | Ratio of net debt to TTM pro forma adjusted EBITDA* | | | | 3.01 | |
| * | Adjusted numbers are not measures determined in accordance with generally accepted accounting principles (“GAAP”) in the United States, commonly known as GAAP. Nevertheless, Helios believes that providing these specific non-GAAP figures are important for investors and other readers of Helios financial statements, as they are used as analytical indicators by Helios management to better understand operating performance. These Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for GAAP. Please carefully review the Non-GAAP reconciliations to the most directly comparable GAAP measures and the related additional information provided throughout. Because these metrics are non-GAAP measures and are thus susceptible to varying calculations, these figures, as presented, may not be directly comparable to other similarly titled measures used by other companies. |
| 1 | Acquisition and financing-related expenses include costs associated with our M&A activities. These activities include all phases of the M&A process from analyzing targets, to raising funding, to due diligence and transaction costs at closing. We utilize internal resources for a significant amount of time spent on our acquisition activities and have chosen not to staff a full M&A department or use significant outside services. We believe these costs are not representative of the Company’s operational performance and it is therefore more meaningful to analyze results with the costs excluded. For the year ended Dec 30, 2023, the charges include recurring labor costs of $0.7 million, professional fees of $2.2 million, and other M&A related costs of $1.1 million. |
| 2 | Restructuring activities include costs associated with our actions to improve operating efficiencies and rationalize our cost structure including the creation of our two new Regional Operating Centers of Excellence. We believe these costs are not representative of the Company’s operational performance and it therefore more meaningful to analyze results with the costs excluded. For the year ended Dec 30, 2023, the charges include non-recurring labor costs of $7.8 million, travel costs of $0.9 million and manufacturing relocation and other costs of $3.4 million. |
| 3 | Acquisition integration activities include costs associated with integrating our recently acquired businesses, which can occur up to 18 months after acquisition date. We believe these costs are not representative of the Company’s operational performance and it is therefore more meaningful to analyze results with the costs excluded. For the year ended Dec 30, 2023, the charges totaled $0.3 million. |
| 4 | Amortization of intangible assets presented here includes $0.2 million and $0.7 million of amortization for capitalized software development costs included within cost of sales in the income statement for the three months and twelve months ended December 30, 2023, respectively. |
| 5 | On a pro-forma basis for Schultes and i3. |
| | | | | 2024 Proxy Statement| 69 |
HELIOS TECHNOLOGIES, INC. ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS TO BE HELD ON JUNE 3, 2021 6, 2024 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby makes, constitutes and appoints Alexander SchuetzDiana Sacchi and PhillippePhilippe Lemaitre and each of them (with the power of substitution) proxies for the undersigned to represent and to vote, as designated below, all shares of Common Stock of Helios Technologies, Inc. held of record by the undersigned on April 6, 20219, 2024 at the Annual Meeting of StockholdersShareholders to be held on June 3, 20216, 2024 at 10:9:00 AMA.M. EDT at Helios Technologies, Inc., 7456 16th Street East, Sarasota, FL 34243The Liberty, 215 Charles St, Boston, MA 02114 or any adjournment or postponement thereof. This proxy, when properly executed, will be voted as directed herein. If no direction is made, this proxy will be voted “FOR” the Election of Directors, and “FOR” Proposals 2 and 3. The proxy holders named above also will vote in their discretion upon such other business as may properly come before the meeting or any adjournment thereof, including procedural matters and matters relating to the conduct of the meeting. You are encouraged to specify your choices by marking the appropriate boxes on the reverse side. The proxies cannot vote your shares unless you sign and return this card or vote by telephone or Internet as described below before the Annual Meeting. Voting by telephone or Internet eliminates the need to return this proxy card. Your vote authorizes the proxies named above to vote your shares to the same extent as if you had marked, signed, dated and returned the proxy card. Before voting, read the Proxy Statement and Proxy Voting Instructions. Thank you for voting. CONTINUED AND TO BE SIGNED ON REVERSE SIDE t PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. PROVIDED t Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of StockholdersShareholders to be held June 3, 2021 6, 2024 The Proxy Statement and our 20202023 Annual Report are available at: http://www.viewproxy.com/HeliosTechnologies/20212024
Please mark your votes like this ☒ x THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS, AND “FOR” PROPOSALS 2 and 3. | | | | | | | 1. Nominees to serve until the Company’s 2024 annual meeting: | | | | | | | FOR | | AGAINST | | ABSTAIN | | | | | 01 Josef Matosevic
| | ☐ | | ☐ | | ☐ | 02 Gregory C. Yadley
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | Address Change/Comments: (If you noted | | Please indicate if you | any Address Changes and/or Comments | above, please mark box.) ☐ | | plan to attend this meeting ☐ |
| 2. Proposal to ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ended January 1, 2022.
| | ☐ FOR ☐ AGAINST ☐ ABSTAIN | | 3. Approval, on an advisory basis, of the compensation of our named executive officers.
| | ☐ FOR ☐ AGAINST ☐ ABSTAIN | | In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof, including procedural matters and matters relating to the conduct of the meeting. | | Date | | Signature | | Signature | (Joint Owners) | | | 1. To elect one Director to serve until the Annual Meeting in 2027, who shall serve until his 2. Proposal to ratify the appointment of Grant Thornton LLP as our independent successor is elected and qualified or until his earlier resignation, removal from office or registered public accounting firm for the 2024 year. death; o☐ FOR☐ AGAINST☐ ABSTAIN FOR AGAINST ABSTAIN 01 Josef Matosevic 3. Approval, on an advisory basis, of the compensation of our named executive o o o officers. ☐ FOR☐ AGAINST☐ ABSTAIN Date ___________________________________________________________________ Signature _______________________________________________________________ Signature _______________________________________________________________ (Joint Owners) DO NOT PRINT IN THIS AREA Note: Please sign exactly as your name or names appear on this card. Joint owners (Shareholder Name & Address Data) should each sign personally. If signing as a fiduciary or attorney, please give your exact title. |
CONTROL NUMBER 
Address Change/Comments: (If you noted Please indicate if you any Address Changes and/or Comments plan to attend this meeting o above, please mark box.) o t PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED. t CONTROL NUMBER
PROXY VOTING INSTRUCTIONS Please have your 11 digit control number ready when voting by Internet or Telephone INTERNET TELEPHONE MAIL Vote Your Proxy on the Internet: Vote Your Proxy by Phone: Vote Your Proxy by Mail: Go to www.FCRvote.com/HLIO Call 1 (866) 402-3905 Have your proxy card available Use any touch-tone telephone to Mark, sign, and date your proxy when you access the above vote your proxy. Have your proxy card, then detach it, and return website. Follow the prompts to card available when you call. it in the postage-paid envelope vote your shares. Follow the voting instructions to provided. vote your shares. | | | | | | | | | | | | | | 
INTERNET
Vote Your Proxy on the Internet: Go to www.FCRvote.com/HLIO
Have your proxy card available when you access the above website. Follow the prompts to vote your shares.
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TELEPHONE
Vote Your Proxy by
Phone: Call 1 (866) 402-3905
Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call.
Follow the voting instructions to vote your shares.
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MAIL
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