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Filed by a Party other than the Registrant ☐
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☑ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
| ☑ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and0-11. |
FROM OUR BOARD
FROM OUR BOARDDear Shareholders:
On behalf of our Board of Directors, we are pleased to invite you to Greenbrier’s 2024 Annual Meeting of Shareholders.
During fiscal 2023, under the leadership of CEO and President Lorie Tekorius, we advanced the operating initiatives announced at the inaugural Greenbrier Investor Day in April, strategically positioning us for further growth and solidifying our position as an established industry leader. Our strong performance in fiscal 2023 demonstrates the success of our executive transitions undertaken in fiscal 2022, and well positions our Company for the future. As a continuation of this transition, and as part of our ongoing commitment to Board refreshment, William “Bill” Furman and Charles “Butch” Swindells will conclude their Board service and not stand for re-election at the 2024 Annual Meeting of Shareholders. We sincerely thank Bill and Butch for their service to Greenbrier. Bill co-founded Greenbrier in 1981, and during his tenure as CEO, Greenbrier became a multi-billion-dollar global operation with a consistent history of delivering shareholder value. We continue to build on the legacy that Bill created.
We value feedback from our shareholders. Our commitment to good governance, driving growth, shareholder value, succession planning, and Board refreshment is informed by engagement with our shareholders. We also recognize our broader obligation to consider the interests of stakeholders, from customers to employees to our communities, in how we operate our business and execute on our strategy. We have engaged in many discussions with stakeholders to inform our priorities. We are confident in our ability to drive growth and increase shareholder returns while being a positive force in corporate governance, environmental sustainability, and social responsibility.
Along with the Board of Directors, our leadership team and more than 13,800 employees, we thank you for your continued support and investment. We look forward to your participation at the Annual Meeting on January 5, 2024.
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ADMIRAL THOMAS B. FARGO
Board Chair | LORIE L. TEKORIUS
CEO and President | |||
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
20232024 ANNUAL MEETING INFORMATION
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Meeting Date: Friday, January 5, 2024 | Meeting Access: www.virtualshareholder meeting.com/GBX2024 | Meeting Time:
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PROXY VOTING
Your vote is very important. Whether or not you plan to virtually attend the Annual Meeting, please promptly vote by telephone or over the internet, or by completing, signing, dating and returning your proxy card or voting instruction form so that your shares will be represented at the Annual Meeting.
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| ONLINE |   | BY PHONE |  |  | BY MAIL |
Our Notice of Annual Meeting, Proxy Statement and Annual Report for the fiscal year ended August 31, 2022,2023, are available at http://materials.proxyvote.com/393657
Our Board has determined and authorized that the Annual Meeting be conducted virtually solely by remote communication beginning at 2:12:00 p.m. Pacific Time on January 6, 2023,5, 2024, via webcast at www.virtualshareholdermeeting.com/GBX2023.GBX2024. You may notify the Company of your desire to participate in the meetingAnnual Meeting by logging into the online site in advanceadvance. Please see “Annual Meeting Information” on page 60 of the meeting.this Proxy Statement for details on how to access and participate in our virtual Annual Meeting. The Annual Meeting is being held for the purpose of voting on the items set forth below and to transact such other business as may properly come before the meeting.
ITEMS TO BE VOTED ON
Proposal 1 | — | Election of Directors | Page | ||||
Proposal 2 | — | Advisory Approval of Executive Compensation | Page | ||||
Proposal 3 | — | Advisory Approval of Frequency of Executive Compensation Vote | Page 49 | ||||
| Proposal 4 | — | Approve an Amendment and Restatement of the 2014 Employee Stock Purchase Plan, As Amended | Page 50 | ||||
| Proposal 5 | — | Ratification of Appointment of Independent Auditors | Page | ||||
As of the date of this Notice, the Company has not received notice of any matters, other than those set forth above, that may properly be presented at the Annual Meeting. If any other matters are properly presented for consideration at the meeting, the persons named as proxies on the proxy card, or their duly constituted substitutes, are authorized to vote the shares represented by proxy or otherwise act on those matters in accordance with their judgment.
Holders of record of our Common Stock at the close of business on November 3, 2022,2, 2023, are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.
By Order of the Board of Directors,
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TABLE OF CONTENTS
PROXY SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider. Please read this entire proxy statementProxy Statement carefully before voting. This Proxy Statement is first being released to shareholders on November 14, 2022.13, 2023.
PROPOSAL 1
Election of Directors
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Our Nominating and Corporate Governance Committee and our Board recommend that shareholders vote “FOR” all director nominees, as they have determined that each of the nominees possesses the right experience and qualifications to effectively oversee Greenbrier’s business strategy and risk management.
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See “Proposal 1, Election of Directors” on page | ||||||||
DIRECTOR NOMINEES
Director Nominees
The following table summarizes the qualifications of the director nominees.
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Mr. Ottensmeyer joined the Greenbrier Board in June 2023. Mr. Ottensmeyer is a rail industry leader, serving as President and CEO of | |
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| LORIE L. TEKORIUS
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| Ms. Tekorius joined the Greenbrier Board in March 2022. Ms. Tekorius was appointed as Greenbrier’s CEO in March 2022 and is a 25+ year employee of the Company. She provides significant | |
| KELLY M. WILLIAMS Ms. | |
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PROXY SUMMARY
DIRECTOR EXPERIENCE
The Nominating and Corporate Governance Committee considers a variety of factors, including professional experience, demonstrated skills, and diversity of background in evaluating candidates for membership on the Board. As demonstrated in the below matrix, which reflects certain categories of experience and expertise represented by the directors serving on the Board after the 2024 Annual Meeting, Greenbrier’s directors provide a diverse mix of skills, knowledge, attributes, and experiences that cover the spectrum of areas that affect the Company’s business and its stakeholders.
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of our nine-person Board as of January 2024. See “Corporate Governance—Board Experience” for more detail.) |
Our Board believes that shareholder interests are best represented by directors with the right mix of skills, experience, and expertise to actively oversee strategy, risk management, and governance at Greenbrier. An independent, engaged, and diverse Board enhances representation of shareholder and stakeholder interests and promotes thoughtful and effective Board deliberation. Our Board is focused on the independent oversight of Greenbrier, Board refreshment, and high governance standards through a variety of policies and practices, including an independent Chair of the Board, regular executive sessions of independent directors at Board and committee meetings, continuous Board refreshment, substantial director stock ownership guidelines, director engagement with shareholders and stakeholders, continuing education, consultations with highly-qualified independent external advisors, and annual evaluations of the Board, its committees and each director.
 | THE GREENBRIER COMPANIES | |||||||
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PROXY SUMMARY
In addition, the composition of the Board reflects its commitment to Board refreshment, independence, and diversity:
PROPOSAL 2
Advisory Approval
of Executive
Compensation
• | Two of our current directors, Bill Furman and Butch Swindells, will conclude their Board service at the Annual Meeting with over 65% of remaining directors having joined the Board since 2017.
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| • | If the nominated candidates are elected at the Annual Meeting, the number of women on our Board will increase from 30% in 2017 to 44% after the Annual Meeting, and one-third of our directors will be individuals who identify as racially or ethnically diverse. |
See “Corporate Governance” on page 6 of this Proxy Statement for more information about our governance profile, achievements and initiatives.
PROPOSAL 2
Advisory Approval of Executive Compensation
| THE BOARD RECOMMENDS A VOTE FOR
Our Board recommends that shareholders vote “FOR” the advisory approval of the compensation of our named executive officers for fiscal
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See “Proposal 2, Advisory Approval of Executive Compensation” on page |
Executive Compensation At-a-Glance
At our 2022 Annual Meeting, approximately 88% of shareholders who voted cast votes in favor of approving the compensation of our named executive officers. We continue to engage regularly with our shareholders and recognize the importance of shareholder feedback and compensation program alignment.
Performance Highlights
Below are the key financial metric results for our fiscal 2022 executive incentive programs. EBITDA and ROIC are non-GAAP financial measures that management believes are helpful in evaluating our financial performance. See Appendix B for a reconciliation of these measures to the most comparable GAAP measures.
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2024 PROXY STATEMENT | |
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PROXY SUMMARY
Executive Compensation Highlights
Our executive compensation program is designed to attract, motivate, and retain the key executives who drive our success. Pay that reflects performance and aligns with the interests of shareholders is key to our compensation philosophy. A key objective of that philosophy is to link a significant portion of the compensation of our executive officers to achievement of pre-established financial and strategic goals that are directly tied to our overall business strategy. In fiscal 2023, over 60% of the compensation of each of our “named executive officers” or “NEOs” (discussed later in this proxy statement) was conditioned on the achievement of pre-established financial and strategic goals, using grant date accounting fair values for fiscal 2023 equity awards and annual bonuses actually earned.
We believe our performance in fiscal 2023 is a testament to the strength and effectiveness of our compensation philosophy. As described later in this proxy statement, in fiscal 2023 we achieved record annual revenues of $3.9 billion, an increase of $966.3 million or 32.5% compared to fiscal 2022, and record deliveries, with railcar deliveries increasing 33.2% compared to fiscal 2022.
Listed below are highlights of our fiscal 2023 executive compensation policies and practices:
WHAT WE DO
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| ✔ | Ongoing engagement with our institutional shareholders regarding our executive compensation policies and practices
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| ✔ | Performance-based cash and equity incentive compensation
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| ✔ | Caps on performance-based cash and equity incentive compensation | |
| ✔ | Significant portion of executive compensation at risk based on company performance | |
Multi-year equity award vesting periods for equity awards, including three-year performance periods for performance-based equity awards | ||
| ✔ | One-year minimum vesting requirement under equity incentive plan, with limited exceptions | |
| ✔ | Annual review and approval of our executive compensation program | |
| ✔ | Annual compensation risk assessment | |
| ✔ | Annual “Say On Pay” vote | |
| ✔ | Clawback policy on cash and equity incentive compensation | |
| ✔ | Robust stock ownership and stock retention guidelines for executive officers | |
| ✔ | No employment agreements with executive officers | |
| ✔ | Independent compensation consultant engaged by the Compensation Committee | |
| ✔ | 100% independent directors on the Compensation Committee | |
| ✔ | Limited perquisites | |
Compensation Highlights
The Company’s incentive compensation payouts demonstrate the Compensation Committee’s rigor in setting performance targets and also reflect the cyclical nature of our business. When setting the short-term and long-term incentive metrics and ranges, the Compensation Committee considers the macro business environment, industry backlog, the Company’s backlog, production and delivery schedules, and other factors such as supply chain disruptions, that impact our industry and demand for our products.
The fiscal 2022 annual incentive program metrics set in August 2021 reflected many uncertainties including limited demand visibility, supply chain disruptions and uneven labor availability against a backdrop of emerging COVID-19 variants. We were able to successfully navigate these challenges by increasing production rates more than 50% and headcount by 35%, generating stronger than expected results for the year. No adjustments were made to our Annual Incentive metrics or payout levels.
The long-term incentive performance program that completed August 31, 2022, reflected metrics set in the Fall of 2019 when projected deliveries reflected a stable industry cycle and prior to the onset of the COVID-19 pandemic and resulting economic weakness. We experienced actual industry deliveries over 30% lower than expectations. No adjustments were made to our long-term incentive program performance metrics or payout levels, which resulted in no payout in 2022 under our long-term incentive program.
| SHORT-TERM INCENTIVE | 2022 AVERAGE PAYOUT FOR ALL NEOs | 2021 AVERAGE PAYOUT FOR ALL NEOs | 2020 AVERAGE PAYOUT FOR ALL NEOs | |||||||||||||||||||||||||||||||||
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| 164.6% | OF TARGET |
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| 94.1% | OF TARGET |
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| LONG-TERM INCENTIVE | 2022 AVERAGE PAYOUT FOR ALL NEOs | 2021 AVERAGE PAYOUT FOR ALL NEOs | 2020 AVERAGE PAYOUT FOR ALL NEOs | |||||||||||||||||||||||||||||||||
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| 0.0% | OF TARGET |
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| 39.8% | OF TARGET |
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| 28.6% | OF TARGET |
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| THE GREENBRIER COMPANIES |
4
PROXY SUMMARY
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| × | No “single trigger” change of control payments and benefits
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| × | No tax gross-ups, including for change of control related excise tax payments | |||||||||
| × | No short sales, hedging, pledging of stock ownership positions, or transactions involving derivatives of our common stock | |||||||||
| × | No strict benchmarking of executive compensation to a specific percentile of our compensation peer group | |||||||||
| × | No pension benefits | |||||||||
| × | No dividend payments on unvested awards | |||||||||
| × | No ‘repricing’ of out-of-the-money stock options without shareholder approval | |||||||||
| × | No incentivizing unnecessary or excessive risk taking | |||||||||
PROPOSAL 3
Advisory Approval of Frequency of Executive Compensation Vote
 | THE BOARD RECOMMENDS A VOTE OF EVERY “1 YEAR” FOR THIS PROPOSAL
Our Board recommends that shareholders vote every “1 YEAR” as the frequency of holding a vote
See “Proposal 3, Advisory Approval of Frequency of Executive Compensation Vote” on page 49 of this Proxy Statement. |
PROPOSAL 4
Approve an Amendment and Restatement of the 2014 Employee Stock Purchase Plan, As Amended
| THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL Our Board recommends that shareholders vote “FOR” approval of an amendment and restatement of our 2014 Employee Stock Purchase Plan, As Amended. See “Proposal 4, Approve an Amendment and Restatement of the 2014 Employee Stock Purchase Plan, As Amended” on page 50 of this Proxy Statement. |
PROPOSAL 5
Ratification of Appointment of Independent Auditors
| THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL Our Board recommends that shareholders vote “FOR” ratification of the appointment of KPMG LLP as auditors for fiscal
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See “Proposal | ||||||||
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CORPORATE
GOVERNANCE
Our Board of Directors (“Board”) is currently composed of 11 directors. Nine directors are independent and 10 directors are not employed by Greenbrier. The Company’s co-founder and former Executive Chairman, Each of our directors serves for a three year term, as follows:
| • | Thomas Fargo, Antonio Garza, and James Huffines currently serve as Class I directors, with terms expiring at our annual meeting of shareholders to be held in 2025; |
| • | Wanda Felton, Graeme Jack, Patrick Ottensmeyer, and Wendy Teramoto currently serve as Class II directors, with terms expiring at our annual meeting of shareholders to be held in 2026; and |
| • | Lorie Tekorius, Bill Furman, Butch Swindells, and Kelly Williams currently serve as Class III directors, with terms expiring at this Annual Meeting. |
Bill Furman retired from all executive offices on August 31, 2022. He will remain aand Butch Swindells are not standing for re-election at this Annual Meeting. The Board member untilsincerely thanks Mr. Furman and Ambassador Swindells for their many years of service to the end of his current term at the Annual Meeting of Shareholders in January 2024. As part of the Company’s succession plan, Lorie L. TekoriusCompany.
Patrick Ottensmeyer was appointed as CEO & President of Greenbrier in March 2022. She was subsequently appointed toa Class II director by the Board of Directorsin June 2023. Under Greenbrier’s Amended and willRestated Bylaws, directors appointed by the Board stand for election at the next Annual Meeting of ShareholdersShareholders. As a result, Mr. Ottensmeyer is standing for election at this Annual Meeting. Due to be held on January 6, 2023 (“2023 Annual Meeting”). Uponthe planned departures of Mr. Furman’s retirement as Executive Chairman,Furman and Ambassador Swindells from the Board elected Admiral Thomas Fargoat the Annual Meeting (each a Class III director), Mr. Ottensmeyer is standing for election as an independent Chair ofa Class III director in order that the Boardclasses remain as nearly equal in September 2022. number as possible.
In the following pages, we highlight key areas of experience that qualify each director to serve on the Board. The Board has determined it is in the best interests of the Company and its stakeholdersshareholders for each of the directors to continue serving on the Board.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
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 | Patrick J. Ottensmeyer (Director) | |||||||
Age: 66
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Experience
 Mr. Ottensmeyer has served as a member of the Board since June 2023. Prior to his service on the board, he was President and CEO of Kansas City Southern (KCS), a Class I railroad, from 2015 to 2023 until the completion of the merger creating Canadian Pacific Kansas City (CPKC). For more than a decade, Mr. Ottensmeyer held various senior executive positions at KCS, including: President of KCS from March 2015 through April 2023; Executive Vice President of Sales and Marketing of KCS from October 2008 through March 2015; Chief Executive Officer of The Kansas City Southern Railway Company (KCSR), a wholly-owned subsidiary of KCS, from July 2016 through April 2023; and President of KCSR from March 2015 through April 2023. He also has a very extensive understanding of financial matters, which helped him lead KCS’s finance department during his time as Executive Vice President and Chief Financial Officer from 2006 to 2008. Mr. Ottensmeyer is a rail industry leader, with experience as U.S. Chairman of the U.S. Chamber of Commerce’s U.S.-Mexico Economic Council (USMXECO), Co-Chair of the Brookings Institute USMCA Initiative, and Chair of the Truman Library Institute. He received the NARS Edward R. Hamberger Lifetime Achievement Award (2023), Ingram’s Executive of the Year Award (2022), Railway Age’s Co-Railroaders of the Year Award (2022), Railway Age Railroader of the Year (2020), and Progressive Railroading’s Railroad Innovator Award (2019). He is also a member of the Board of Watco LLC. He received his Bachelors in Science in Finance from Indiana University in 1979. Qualifications Mr. Ottensmeyer brings expertise in business strategy, the rail industry and financial matters to the Board. Additionally, Mr. Ottensmeyer is an “audit committee financial expert” under New York Stock Exchange (NYSE) and Securities and Exchange Commission (SEC) rules.
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| THE GREENBRIER COMPANIES |
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CORPORATE GOVERNANCE
 | Lorie L. Tekorius (Director and Chief Executive Officer) | |||
Age: 56 Director Since: 2022 | Current Term Expiration: 2024 | |||
Experience
In March 2022, Ms. Tekorius became Greenbrier’s Chief Executive Officer and President. Prior to this, she was Greenbrier’s President and Chief Operating Officer, leading strategic planning, maintenance services, management services and the accounting, finance, human resources, and other corporate functions. Ms. Tekorius joined Greenbrier in 1995 and since that time has served Greenbrier in a broad range of financial and operating roles. In 2016, she was appointed Executive Vice President, Chief Financial Officer, a role which gained her recognition as Oregon’s 2017 CFO of the Year by the Portland Business Journal. In 2018, Ms. Tekorius was recognized as one of 14 “Women in Rail” by Railway Age in recognition of her contributions to the industry. She is a member of the Board of Directors of the Alamo Group, Inc. and sits on its Audit and Nominating and Corporate Governance Committees. Ms. Tekorius is an active community member, serving as Past President of the Providence St. Vincent Medical Foundation Council of Trustees.
Qualifications
As a 25+ year employee of Greenbrier, Ms. Tekorius provides significant company-specific and industry knowledge, in addition to organizational leadership and financial and operational expertise.
 | Kelly M. Williams (Director and Chair of the Nominating and Corporate Governance Committee) | |||
Age: 59 Director Since: 2015 | Current Term Expiration: 2024 | |||
Experience
Ms. Williams has served as a member of the Board since 2015. Ms. Williams is the CEO of the Williams Legacy Foundation and is on the Board of Directors of KKR Private Equity Conglomerate LLC. Ms. Williams was a senior advisor of GCM Grosvenor Private Markets from June 2015 until January of 2019. Until June 1, 2015, Ms. Williams was President of GCM Grosvenor Private Markets, a member of its Management Committee and a member of its Investment Committee. Prior to joining GCM Grosvenor, Ms. Williams was a Managing Director, the Group Head and the chair of the compensation committee of the Customized Fund Investment Group of Credit Suisse Group AG from 2000 through 2014, after Credit Suisse acquired Donaldson, Lufkin and Jenrette, where Ms. Williams was director of the Customized Fund Investment Group. She was with the Prudential Insurance Company of America from 1993 to 2000, where she was an Executive Director and a founder of the Customized Fund Investment Group in 1999. Prior to joining Prudential, Ms. Williams was an attorney at Milbank, Tweed, Hadley & McCloy LLP, where she specialized in global project finance. She graduated magna cum laude from Union College in 1986 with a Bachelor of Arts degree in Political Science and Mathematics and received her Juris Doctor from New York University School of Law in 1989. Ms. Williams serves in leadership positions on the boards of several for profit and not-for profits and has won numerous awards for leadership and public service. In addition, Ms. Williams was named as one of the Most Powerful Women in Finance by American Banker Magazine from 2011-2014. Ms. Williams also serves as President of the Nantucket Historical Association, and as a board member of Union College.
Qualifications
Ms. Williams brings executive management and financial and investment expertise to the Board.
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CORPORATE GOVERNANCE
CONTINUING DIRECTORS
| Thomas B. Fargo |
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Experience
| Admiral Fargo has served as a member of the Board since 2015. He was Lead Director from January 2021 through August 2022. In September 2022, Admiral Fargo was elected Chair of the Board of Directors upon Mr. Furman’s retirement from executive offices. He is a retired military commander with subsequent private sector experience in maritime and other transportation industries. As commander of the U.S. Pacific Command from 2002 until 2005, Admiral Fargo led the world’s largest unified command while directing the joint operations of the Army, Navy, Marine Corps and Air Force in the Asia-Pacific Theater. He serves as the Board Chair of Hawaiian Electric Industries and is on the Board of Directors of Matson, Inc. Previously, Admiral Fargo served as the Board Chair of USAA and Huntington Ingalls Industries and served on the Boards of Northrop Grumman Corporation, Alexander & Baldwin, Inc. and Hawaiian Airlines. Qualifications Admiral Fargo brings executive leadership and operational, manufacturing and international expertise to the Board. |
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Age: 65
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Experience
 Ms. Felton has served as a member of the Board since 2017. Ms. Felton has over 30 years of financial industry experience in commercial and investment banking. Ms. Felton was a Presidential Appointee and was confirmed twice by the U.S. Senate to serve on the board of the Export Import Bank of the United States as Vice Chair of the Board and First Vice President from June 2011 to November 2016. In that role, she was on the team of economic deputies that advised the National Security Staff and the President’s Export Council on trade and investment. Ms. Felton was actively engaged in helping U.S. companies penetrate international markets and develop pragmatic financing solutions to win sales. Ms. Felton had oversight responsibility for the Office of the Chief Financial Officer and enterprise risk management functions, and served on the bank’s credit committee, which was responsible for approving debt financings over $10 million for a broad range of financing types across a range of industries. A significant portion of such financings supported the export of U.S.-manufactured transportation equipment, including rail equipment and aircraft, to emerging markets. She was also an ex officio member of the Enterprise Risk Management Committee. Until recently, Ms. Felton was a Senior Advisor to Spencer Stuart’s North American Board Practice focused on diversity. In September 2021, she joined Demopolis Equity Partners, a private equity fund that will invest in technology-enabled businesses (primarily fintech and e-commerce). She continues to serve as a Trustee of The Cooper Union for the Advancement of Science and Art. Qualifications Ms. Felton brings her significant prior experience with emerging markets business development and capital raising to the Board. Additionally, Ms. Felton is an “audit committee financial expert” under NYSE and SEC rules.
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| THE GREENBRIER COMPANIES |
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CORPORATE GOVERNANCE
 | Antonio O. Garza (Director) | |||
Age: 64 Director Since: 2021 | Current Term Expiration: 2025 | |||
Experience
Ambassador Garza has served as a member of the Board since 2021. He is Counsel in the Mexico City office of White & Case LLP, a global law firm. Prior to joining White & Case, Ambassador Garza served as the U.S. Ambassador to Mexico from 2002 to 2009. He has been a director of Canadian Pacific Kansas City Limited (CPCK), a Class 1 railroad, since 2023, and served as a director of Kansas City Southern, a Class 1 railroad, from 2010 until the completion of the merger creating CPKC in April 2023. Ambassador Garza also served on the Board of MoneyGram International, Inc. from 2012 through 2023, and on the Board of Americas Technology Acquisition Corp from 2021 to 2022. He was Chairman of the Railroad Commission of Texas, elected to that statewide office in 1998, and served through 2002. Ambassador Garza is a member of the Board of Trustees of Southern Methodist University. He also is a director of the Americas Society, the U.S. Chamber of Commerce in Mexico and is a member of the Council on Foreign Relations (CFR) and COMEXI, the CFR’s Mexican counterpart. From 1994 through 1997, he was the State of Texas Secretary of State, and Senior Policy Advisor to the Governor of Texas. He is a member of the State Bar of Texas, the District of Columbia Bar and is admitted to practice before the United States Supreme Court. Ambassador Garza is a past recipient of the Aguila Azteca (Aztec Eagle), the highest honor bestowed by the Mexican government on a foreign national.
Qualifications
Ambassador Garza brings international expertise and rail industry, legal and governmental experience to the Board.
 | James R. Huffines (Director) | |||
Age: 72 Director Since: 2021 | Current Term Expiration: 2025 | |||
Experience
Mr. Huffines has served as a member of the Board since 2021. Mr. Huffines has over 35 years of experience in banking and finance. He most recently served as Chief Operating Officer for subsidiaries of Hilltop Holdings, Inc., an NYSE publicly-traded financial company, and on the Board from 2012 to 2017. From 2007 to 2012, Mr. Huffines also served on the Board of Energy Future Holdings as an independent director and as the Board’s Audit Committee Chairman. Mr. Huffines presided as Chairman on the University of Texas System board of regents for four years during his seven years as a Regent. He also was on the Board and Audit Chair of the UTIMCO, a $35 billion endowment fund for higher education in Texas. Mr. Huffines currently serves on the holding company board of Susser Bank Holdings, a $1.9 billion privately owned financial institution.
Qualifications
Mr. Huffines brings banking and finance expertise, public company and governmental experience to the Board. Under NYSE and SEC rules, Mr. Huffines is an “audit committee financial expert.”
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2023 Proxy Statement
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CORPORATE GOVERNANCE
 | Graeme A. Jack (Director and Chair of the Audit Committee) | |||
Age: 72
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Current Term
Expiration: 2026
Experience
Mr. Jack has served as a member of the Board since 2006. He is a retired partner of PricewaterhouseCoopers LLP in Hong Kong. He also serves, since 2017, as an independent non-executive director of HUTCHMED (China) Limited. Mr. Jack was an independent non-executive director of Hutchison Port Holdings Management Pte. Limited, the trustee manager of Hutchison Port Holdings Trust from 2011 until April 2023, and COSCO SHIPPING Development Company Limited from 2015 to 2021.
Qualifications
Mr. Jack brings accounting and financial reporting expertise to the Board as well as extensive experience in international business transactions in Asia generally, and in China in particular. Under NYSE and SEC rules, Mr. Jack is an “audit committee financial expert.”
 | Wendy L. Teramoto (Director) | |||
| Current Term Expiration: 2026 | |||
Experience
Ms. Teramoto has served as a member of the Board since 2019. She has been a senior investment management professional with an affiliate of Fairfax Financial Holdings Limited since 2018. From 2017 to 2018, she served in a senior capacity at the United States Department of Commerce. Until 2017, Ms. Teramoto was a Managing Director and a senior investment management professional, and a founding partner, at a New York-based private equity firm affiliated with Invesco Ltd. Ms. Teramoto has served as a board member for several companies in the transportation sector. In addition to serving on many private boards, Ms. Teramoto previously served on the Greenbrier Board from 2009 to 2017, and on the board for Navigator Holdings Ltd. from 2014 to 2017.
Qualifications
Ms. Teramoto brings investment management and financial expertise, and experience with manufacturing and other heavy industry companies to the Board. Additionally, Ms. Teramoto is an “audit committee financial expert” under NYSE and SEC rules.
Thank You!
The Board of Directors would like to thank Mr. Furman and Ambassador Swindells for their service to Greenbrier and its stakeholders.
| THE GREENBRIER COMPANIES |
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CORPORATE GOVERNANCE
Governance Highlights
Independent Oversight | • 9 of the 11 members (over 80%) of our Board meet the independence criteria established by the New York Stock Exchange and the Securities and Exchange Commission. Lorie L. Tekorius (our CEO) and | |
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• 8 of the 9 independent directors of the Board, including all committee members, committee chairs, and the | ||
• Our independent directors regularly hold separate executive sessions at Board meetings and at committee meetings | ||
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• The Board actively oversees strategy, risk management, | ||
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Board Refreshment | • | |
• Average tenure of the Board, excluding the co-founder Mr. Furman and Ambassador Swindells is | ||
• The Board promotes refreshment through a policy that a director will not be nominated for election if such director’s age would be greater than 77 at the time of election | ||
• The Board promotes ongoing director education, including through our membership in the National Association of Corporate Directors | ||
• The Company received a “3+” rating (one of their highest ratings) from the 50/50 Women on Boards organization for having three or more female directors | ||
• Board succession planning is an ongoing process with a focus on integrity, experience, diversity and mix of tenure of directors | ||
• The Board regularly engages in identifying highly qualified candidates for future Board service | ||
High Governance Standards | • Demonstrated commitment to shareholder and stakeholder engagement, including through year-round shareholder outreach | |
• Our Code of Business Conduct and Ethics applies to all directors, officers, employees, and consultants | ||
• Average attendance of directors at Board and committee meetings exceeded 95% over the last | ||
• The Company maintains substantial | ||
• The Board reviews each director’s independence qualifications annually | ||
• Pledging or hedging of Company stock by directors and executives is prohibited | ||
Recent Accomplishments | • Successful execution of | |
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| (1) | For additional information, please see Greenbrier’s ESG Report, which can be found at www.gbrx.com/ESG. The information found on our website or in our 2023 ESG Report is not incorporated into, and does not form a part of, |
2024 PROXY STATEMENT | |
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CORPORATE GOVERNANCE
Board Independence
The Board makes all determinations with respect to director independence in accordance with New York Stock Exchange (NYSE)NYSE and Securities and Exchange Commission (SEC)SEC requirements. In addition, the Board established enhanced guidelines to assist in making determinations regarding director independence (the “Independence Guidelines”), which are set forth in our Corporate Governance Guidelines and are available on the Company’s website at http:https://www.gbrx.com/investors.gbrx.com/corporate-governance. Among other things, this heightened standard prohibits directors from serving on a committee if they receive any compensation from the Company in addition to their compensation for Board service. All of our directors who serve on Committees satisfy this heightened standard of independence, which further safeguards our Board’s autonomy and alignment with shareholders.
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Based on its annual assessment of director independence, the Board has determined affirmatively that 9 of its 11 directors meet the independence criteria established by NYSE and SEC rules as set forth in the table on page 12.16. In arriving at this determination, the Board thoroughly considered the Company’s consulting arrangement with Ambassador Swindells, pursuant to which he provides consulting services to the Company on international projects under an agreement with the Company entered into in January 2016, and confirmed his independence and ability to exercise independent judgment. The Board also thoroughly considered an advisory arrangement between Mr. SwindellsOttensmeyer and CPKC, a company that has ordinary course commercial dealings with the Company, pursuant to which Mr. Ottensmeyer will serve as an advisor to CPKC through the remainder of calendar year 2023, and confirmed his independence and ability to exercise independent judgment. Due to the Board’s voluntary application of athe heightened independence standard Mr.described above, Ambassador Swindells does not serve on any Board committees.
In fiscal 2022,2023, the independent directors met without Company management present at all regular meetings of the Board.
As part of the Board’s CEO succession plan, Bill Furman continued to lead the Board of Directors in the newly-created role of Executive Chairman until his retirement as an executive officer on August 31, 2022. Mr. Furman will remain as a director until January 2024. The Board maintained an independent Lead Director while the Chairman of the Board (and later Executive Chairman) was not an independent director. Admiral Thomas Fargo was elected Lead Director by the independent directors in 2021 and served until his election as independent Chair of the Board effective September 1, 2022, satisfying the Board’shas adopted a policy of only independent directors being eligible for the role.role of Chair of the Board. Admiral Thomas Fargo has served as independent Chair of the Board since September 1, 2022.
The independent Chair of the Board serves stakeholder interests by:
Presiding at all meetings of the Board
| • | Presiding at all meetings of the Board |
Providing stability and leadership during the CEO transition
| • | Providing stability and leadership during the Company’s recently completed CEO transition |
Leading regular executive sessions of the independent directors, which are held at every regularly scheduled Board meeting
| • | Leading regular executive sessions of the independent directors, which are held at every regularly scheduled Board meeting |
Approving Board schedules, meeting agendas and other Board matters
| • | Approving Board schedules, meeting agendas and other Board matters |
Making requests of the CEO and providing feedback regarding the Board’s requirements and observations
| • | Making requests of the CEO and providing feedback regarding the Board’s requirements and observations |
Consulting with the CEO on Company strategy and providing advice and feedback
| • | Consulting with the CEO on Company strategy and providing advice and feedback |
| • | With the Chair of the Nominating and Corporate Governance Committee, implementing and participating in the Board self-evaluations process |
| • | Acting as a liaison between the independent directors and the CEO and generally representing the independent directors on the Board |
| • | Engaging with shareholders and supporting committee chairs in engagements as appropriate |
Annual Evaluations
Our Board, through the Nominating and Corporate Governance Committee, implementing and participating in the Board self-assessment process
Acting as a liaison between the independent directors and the CEO and generally representing the independent directors on the Board
Engaging with shareholders and supporting committee chairs in engagements as appropriate
Our Board conducts an annual evaluation of itself, its committees, and each director, individually, to ensure effective functioning. In addition:
| • | The Chair of the Board |
| • | The Chair of the Board works with each committee chair to assess development opportunities and implement changes based on feedback received in the annual evaluations |
| • | The Board receives regular anti-bribery and Foreign Corrupt Practices Act training |
The Chair of the Board works with each committee chair to assess development opportunities and implement changes based on feedback received in the annual evaluations
In 2022 the Board conducted a survey of directors to evaluate areas of strength and opportunities to supplement the Board’s existing skills and experience
Directors certify each year that they understand and comply with the Company’s Code of Business Conduct and Ethics
The Board receives regular anti-bribery and Foreign Corrupt Practices Act training
| THE GREENBRIER COMPANIES | |||||||||||||
THE GREENBRIER COMPANIES
2023 Proxy Statement
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12
CORPORATE GOVERNANCE
Our Board best serves the Company and its stakeholders when there is a balance between new directors with fresh perspectives and longer serving directors who bring continuity in a cyclical business.
To promote thoughtful Board refreshment, we have:
Appointed six of our current directors since 2017, to enhance diversity of experience, supplement the Board’s existing skills, prepare for future retirements, and respond to unexpected departures | Adopted a retirement policy, whereby a director will not be nominated for election if such director’s age would be greater than 77 at the time of election | Continued refreshment with the appointment of Patrick Ottensmeyer in June 2023 and the departure of Bill Furman and Butch Swindells from the Board in January 2024 | ||||||||||
Appointed a total of six new directors (55% refreshment) since 2017 to enhance diversity of experience, prepare for future retirements and supplement the Board’s existing skills
Elected an independent Chair of the Board, Admiral Thomas Fargo
Continued committee refreshment with the appointment of Ambassador Antonio Garza to the Nominating and Corporate Governance Committee and James Huffines to the Audit Committee
Required that directors must meet a heightened standard of independence to serve on a committee
The size of the Board is currently 11 directors. The Board has determined this is the appropriate size at this time. In accordance with our governing documents and in connection with our Board refreshment process, the size of the Board will periodically fluctuate as new directors are appointed to overlap with directors who are not standing for election, allowing for a robust onboarding process. Bill Furman and Butch Swindells are not standing for re-election at this Annual Meeting, and as a result, the size of the Board will be 9 directors as of January 2024.
Following are key metrics reflecting the balance of skills, qualifications and experience on our Board.Board (as it will be constituted following the Annual Meeting in January 2024).
To ensure the Board operates at the highest level, Greenbrier supports continuing education programs and performs annual evaluations, in addition to maintaining a comprehensive orientation program for all new directors. These programs, including a membership with the National Association of Corporate Directors, contribute to increased levels of Board skills and knowledge as well as a current understanding of the landscape of risks and opportunities, best practices, and current governance trends. The Company is continually seeking to improve Board performance, including through additional training, if needed, when a director assumes a new leadership role. The Company pays the reasonable expenses of directors who attend continuing education programs.
2024 PROXY STATEMENT | ||||||||
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CORPORATE GOVERNANCE
Board Experience
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The Nominating and Corporate Governance Committee considers a variety of factors including professional experience and demonstrated skills, diversity of gender, race, ethnicity, sexual orientation, age, as well as cultural and geographical background in evaluating candidates for membership on the Board. The Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a diverse mix of skills, knowledge, attributes, and experiences that cover the spectrum of areas that affect the Company’s business and its stakeholders. In general, the composition of the Board is diversified across financial, operational, accounting, legal, and corporate governance expertise, as well as expertise within the Company’s business and industry, including experience in global markets, public policy, manufacturing, finance, and rail. All candidates for director nominees, including self-nominated candidates, shareholder suggested candidates, and board-identified candidates, are thoroughly evaluated and considered in the context of current perceived needs of the Board as a whole. The Nominating and Corporate Governance Committee regularly assesses whether the mix of skills, experience, and background of our Board is appropriate for the Company, including conducting a surveythe Chair of directors in 2022 to evaluatethe Board and Chair of the Nominating and Corporate Governance Committee soliciting feedback from each director individually regarding areas of strength and opportunities to supplement the Board’s existing skills and experience.
| THE GREENBRIER COMPANIES |
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CORPORATE GOVERNANCE
Board Committees, Meetings, and Charters
Below is a general overview of the role of each committee.
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Board Committees, Meetings and Charters
Below is a general overview of the role of each committee.
Compensation Committee |
Audit Committee | Nominating and Corporate Governance Committee | ||||||
The Compensation Committee focuses on increasing shareholder value by setting compensation for senior management and is responsible for:
1) Oversight of compensation
2) Oversight of executive officer compensation, evaluating CEO performance and recommending CEO compensation to the Board
3) Reviewing policies relating to director compensation and stock ownership guidelines
4) Assessing the independence of any compensation consultants
5) Engaging with shareholders to solicit feedback and understand compensation priorities | The Audit Committee safeguards our shareholders’ investment in the Company by overseeing:
1) The integrity and public reporting of the Company’s financial statements
2) Company compliance with legal and regulatory requirements
3) Performance of the Company’s internal audit plan and functions and internal controls
4) Engagement and oversight of the Company’s independent registered public accounting firm
5) Cybersecurity,
6) Identification and evaluation of any related party transactions | The Nominating and Corporate Governance Committee works to ensure that stakeholders are effectively represented by overseeing:
1) Board refreshment, including the identification of director nominees
2) The process and protocols regarding CEO succession
3) The structure and composition of Board committees
4) Annual evaluations of the Board,
5) Risk monitoring, except
6) The Company’s Inclusion, Diversity, Equity, Access and Leadership (IDEAL) program
7) Environmental, social and governance (ESG) matters and reporting
8) Shareholder engagement to solicit feedback and understand governance priorities
9) Human capital management
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2024 PROXY STATEMENT | |
15
CORPORATE GOVERNANCE
During fiscal 2022,2023, the Board at large held fivesix meetings, the Audit Committee held four meetings, the Nominating and Corporate Governance Committee held four meetings, and the Compensation Committee held five meetings. Each of our current directors attended 75% or more of the total Board and Board committee meetings on which the director served in fiscal year 2022 although all2023. All directors are invited and encouraged to attend all committee meetings. The independent directors met regularly in executive sessions without Company management present throughout fiscal 2022.2023. The Chair of the Board (formerly the “Lead Director”) conducts and presides at each executive session. The Company’s policy is to encourage Board members to attend the Company’s Annual Meetings of Shareholders. All of the Company’s then-serving directors attended the Annual Meeting of Shareholders held on January 7, 2022 (except for one retiring director).6, 2023. The composition of each of the Board committees as of the date of this Proxy Statement is set out below.
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Independent 
Member F Audit Committee Financial Expert
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William A. Furman (former CEO and former Executive Chairman) (Retiring Jan. 2024) | ||||||||
Antonio O. Garza | | | | |||||
James R. Huffines | | F | | |||||
Graeme A. Jack | | Chair, F | | | ||||
Patrick J. Ottensmeyer | | F | | |||||
Charles J. Swindells(Retiring Jan. 2024) | | |||||||
Lorie L. Tekorius(CEO) | ||||||||
Wendy L. Teramoto | | F | | |||||
Kelly M. Williams | | | | Chair | ||||
Independent Member F Audit Committee Financial Expert
The Board has determined that each member of the Audit Committee is financially literate and that Mses.Directors Jack, Felton, Huffines, Ottensmeyer, and Teramoto and Messrs. Jack and Huffines qualify as “audit committee financial experts” under NYSE and SEC rules. Each of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee maintains a written charter. These charters, along with the Company’s Corporate Governance Guidelines, are available on the Company’s website at www.gbrx.com/https://investors.gbrx.com/corporate-governance.
Executive SuccessionEXECUTIVE SUCCESSION
The Board provides oversight of key executive officer transitions. Fiscal 2022 finalized aThe Board, together with the Nominating and Corporate Governance Committee, exercises this oversight role through regular review and implementation of the Company’s succession planning process for key leadership and operational positions. Our multi-year succession plan thathas resulted in the refreshment of several executives including the recent successful transitionsmajority of Brian Comstock’s appointmentour executive officers over the last three fiscal years, from 2021 to Chief Commercial & Leasing Officer in January 2021 and William Krueger to President of Greenbrier Manufacturing Operations in September 2022.2023.
Our CEO and our Chief Human Resources Officer oversee the talent pipeline initiative for other key positions. This includes creating talent profiles for potential succession candidates and implementing tailored development plans with specific actions.
The Board reviews our talent pipeline initiative quarterly,activities regularly, and meets formally and informally with our CEO, key executives, and other high-potential members of senior management.
CEO SuccessionSUCCESSION
As previously disclosed, Lorie L. Tekorius was appointedTekorius’ appointment as CEO in March 2022. Her accession to the office of CEO2022 was the result of a multi-year succession strategy led by the Board and the Nominating and Corporate Governance Committee, which focused on identifying the best candidate and implementing a smooth transition. As a continuation of this transition, and consistent with our commitment to Board refreshment, Bill Furman, the Company’s co-founder and former Chief Executive Officer, will not stand for re-election at the Annual Meeting.
| THE GREENBRIER COMPANIES |
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CORPORATE GOVERNANCE
Risk Oversight
The Board has delegated to the Nominating and Corporate Governance Committee primary responsibility for risk oversight management.management oversight. In order to ensure that Board expertise is dispatchedutilized most effectively in risk management, certain other standing committees are given primary risk management oversight management responsibility of certain categories of risks, such as the Compensation Committee’s oversight of compensation risk and the Audit Committee’s oversight of certain financial controls and
cybersecurity risks. Greenbrier has established an Enterprise Risk Management (ERM) program to ensure risks are addressed in a manner consistent with the Company’s overall corporate strategy, including a strong focus on railcar safety and cybersecurity. Key risk identification, evaluation, and mitigation actions are reviewed quarterly by the Nominating and Corporate Governance Committee, other committees, and, as appropriate, are considered by the entire Board. The entire Board remains actively engaged in the oversight and effective implementation of the ERM program. The Board as a whole is directly engaged in overseeing the management of all significant risks, especially risks that implicate public safety. See “Environmental and Social” below for more information regarding our strategy and Board oversight with respect to employee safety and human capital management.
The Audit Committee oversees the Company’s financial and accounting risk assessment and risk management policies, including monitoring and recommending to the Board any modifications regarding the Company’s Code of Business Conduct and Ethics and Policy Regarding Trading in Company Securities. The Audit Committee also reviews the policies and procedures of the Company with respect to maintaining information and data security. The Audit Committee reviews cybersecurity on a quarterly basis with all Board members present.
The Compensation Committee evaluates the Company’s compensation programs and has concluded that its risks are effectively mitigated by a variety of policies including clawback, hedginganti-hedging, and stock ownership policies. The compensation program balances between short-term and long-term incentives and establishes multiple and strategically weighted performance measures. Based on the results of its evaluation, the Compensation Committee concluded that any risks associated with the Company’s compensation programs are not reasonably likely to have a material adverse effect on the Company.
Our Code of Business Conduct and Ethics and FCPA Compliance
We strive for the highest ethical standards in all of our business dealings. Our Code of Business Conduct and Ethics guides our Board, executive officers, and employees in the work they do for the Company. We work diligently to ensure that all our employees fully understand and are empowered to implement ethical practices and promptly report any noncompliant or suspicious activity. The Company maintains the right to require any employee to supply a written statement certifying compliance with our Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics applies to all of the Company’s directors, officers, employees, and consultants, including its principal executive officer, principal financial officer, and principal accounting officer. The Company intends to post amendments to or waivers from our Code of Business Conduct and Ethics on the Company’s website at https://investors.gbrx.com/corporate-governance.
Our Code of Business Conduct and Ethics is closely tied to our FCPA and Anti-Corruption Policy. We are an international company, and as such, compliance with all anti-bribery and anti-corruption laws is a key component of our ethics focus.commitment. We conduct ongoing compliance training at all our locations across the globe.
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CORPORATE GOVERNANCE
2023 Non-Employee Director Compensation
Our non-employee director compensation program is designed to attract, retain, and reward qualified non-employee directors and align the financial interests of non-employee directors with those of our shareholders. Pursuant to this program, each non-employee member of our Board received the cash and equity compensation described below for fiscal 2023 Board service. We also reimbursed our non-employee directors for expenses incurred in connection with attending Board and committee meetings, assisting with other Company business, such as meeting with potential officer and director candidates, as well as continuing director education. Members of the Board who are our employees are not separately compensated for serving on the Board.
Our Compensation Committee has the primary responsibility for reviewing the compensation paid to our non-employee directors and making recommendations for adjustments, as appropriate, to the full Board. The Compensation Committee undertakes an annual review of the type and form of compensation paid to our non-employee directors, which includes a market assessment and analysis by its independent compensation consultant, Mercer, a national compensation consulting firm (“Mercer”). No changes were made in fiscal 2023 to our fiscal 2023 non-employee director compensation program, other than in connection with Admiral Fargo’s transition from Lead Director to Chair of the Board, as described below. The Board believes that the fiscal 2023 compensation program for our non-employee directors attracted, retained, and rewarded qualified non-employee directors, consistent with market practices and the demands placed on our Board.
FISCAL 2023 CASH COMPENSATION
In fiscal 2023, non-employee directors received an annual cash retainer of $80,000. The Audit Committee chair received an additional annual cash retainer of $20,000, and each other committee chair received an additional annual cash retainer of $15,000. The Chair of the Board, Admiral Fargo, received an additional cash retainer of $150,000 (increased from $70,000 in fiscal 2022 to reflect his transition from Lead Director to Chair of the Board). Members of the Audit Committee received an additional annual cash retainer of $10,000, and members of the Compensation and the Nominating and Corporate Governance Committees received an additional annual cash retainer of $7,500. All annual retainer fees were paid quarterly.
FISCAL 2023 EQUITY COMPENSATION
We maintain the Company Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan. Under the program, upon a director’s initial election to the Board, the director automatically receives an “initial” award of restricted stock units (RSUs) with a value of $145,000. If such initial election occurs prior to the next annual meeting of shareholders, this initial award is prorated. A director who is also an employee of the Company, and who subsequently ceases such employment status but remains a director, is not eligible for such an initial award. Immediately following each annual meeting of shareholders, each director automatically receives an “annual” award of RSUs with a value of $145,000. Both the initial award and the annual award vest on the earlier of(a)the one-year anniversary of grant and (b) the next annual meeting of shareholders (if such meeting is at least 50 weeks after the prior year’s annual meeting of shareholders). In the event of a director’s termination of service due to death, disability, or retirement, or because such director is not nominated or re-elected to serve an additional term as a director, any unvested portion of the director’s initial award or annual award will vest. In the event of a director’s termination of service due to such director’s removal or resignation, any unvested portion of the director’s initial award or annual award will be forfeited. Dividends on unvested RSUs are subject to the same vesting terms as the unvested RSUs to which they relate. Upon a Company change of control, all unvested initial and annual director awards will vest.
For fiscal 2023, pursuant to the program described above, Mr. Ottensmeyer received an initial award of RSUs covering 2,451 shares, determined by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the grant date, rounded up to the nearest whole share, and prorating for Mr. Ottensmeyer’s commencement of services with us. All our other non-employee directors received an award of RSUs covering 4,050 shares, determined by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the grant date, rounded up to the nearest whole share.
2023 Proxy Statement
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| THE GREENBRIER COMPANIES |
18
CORPORATE GOVERNANCE
FISCAL 2023 DIRECTOR COMPENSATION
The following table summarizes the compensation of the non-employee Board members for fiscal year 2023. Ms. Tekorius did not receive compensation for her service as a director in fiscal 2023. Ms. Tekorius’ compensation for her service as an employee is discussed in the executive compensation disclosures below.
FISCAL 2023 DIRECTOR COMPENSATION
Name | Fees Earned ($) | Stock Awards ($)(1) | All Other ($) | Total ($) | ||||||||||||
Thomas B. Fargo | 260,000 | 116,073 | — | 376,073 | ||||||||||||
Wanda F. Felton | 97,500 | 116,073 | — | 213,573 | ||||||||||||
William A. Furman | 80,000 | 116,073 | (2) | — | 196,073 | |||||||||||
Antonio O. Garza | 87,500 | 116,073 | — | 203,573 | ||||||||||||
James R. Huffines | 90,000 | 116,073 | — | 206,073 | ||||||||||||
Graeme A. Jack | 125,000 | 116,073 | — | 241,073 | ||||||||||||
Patrick J. Ottensmeyer | 13,333 | 104,952 | — | 118,285 | ||||||||||||
David L. Starling | 47,500 | 116,073 | 127,720 | (3) | 291,293 | |||||||||||
Charles J. Swindells | 80,000 | 116,073 | 120,000 | (4) | 316,073 | |||||||||||
Wendy L. Teramoto | 97,500 | 116,073 | — | 213,573 | ||||||||||||
Kelly M. Williams | 120,000 | 116,073 | — | 236,073 | ||||||||||||
| (1) | The amounts in the Stock Awards column reflect the aggregate grant date fair value of RSUs granted to directors in fiscal 2023 calculated in accordance with FASB ASC Topic 718 (Compensation – Stock Compensation), excluding estimated forfeitures. Such amounts may not correspond to the actual value that will be realized by them if and when the RSU awards vest. As of August 31, 2023, each director, except for Mr. Ottensmeyer and Mr. Starling, held 4,050 unvested RSUs and 103 corresponding dividend equivalent rights; Mr. Ottensmeyer held 2,451 unvested RSUs and 15 corresponding dividend equivalent rights; and Mr. Starling held no unvested equity awards. In addition, as of August 31, 2023, Mr. Furman held 89,443 unvested performance-based restricted stock units (PSUs) (assuming target achievement) granted to him in his role as Chief Executive Officer prior to his retirement. |
| (2) | In fiscal 2023, Mr. Furman received 121,752 shares pursuant to the vesting of a PSU award granted to him in his role as Chief Executive Officer prior to his retirement. Pursuant to its terms, the award remained outstanding following his retirement as Chief Executive Officer, subject to vesting upon achievement of performance metrics. |
| (3) | Mr. Starling unexpectedly passed away in February 2023. The amounts in the All Other Compensation column reflect the accelerated vesting of the RSUs, already reflected in the Stock Awards column, together with corresponding dividend equivalents rights, upon his death in accordance with the Company Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan. |
| (4) | Represents consulting fees paid to Mr. Swindells in fiscal 2023 pursuant to a consulting agreement with the Company entered into in January 2016. |
NONQUALIFIED DEFERRED COMPENSATION
We maintain an unfunded, voluntary non-qualified deferred compensation plan for our non-employee directors, which allows our non-employee directors to defer compensation received in exchange for their non-employee director services to us. We do not contribute to the plan. We do not guarantee any returns on participant contributions to the plan. The plan does not pay or provide for preferential or above-market earnings. Amounts deferred under the plan are credited with hypothetical and/or actual investment earnings based on participant investment elections made from among investment options available under the plan. Distributions may be made in lump-sum or in installments (subject to certain restrictions in the plan) upon the non-employee director’s death, disability, other termination of service, a change of control of us, and certain unforeseeable emergencies, each as defined in the plan.
FISCAL 2024 COMPENSATION
In late fiscal 2023, as a result of the Compensation Committee’s annual assessment and analysis, we increased compensation levels for non-employee directors effective fiscal 2024 in order to continue to attract, retain, and reward qualified non-employee directors. The last time we increased compensation levels for non-employee directors was fiscal 2019, other than as described above in connection with Admiral Fargo’s transition from Lead Director to Chair of the Board. The annual cash retainer fee for non-Chair non-employee directors was increased from $80,000 to $100,000, the cash retainer for the Chair of the Board was increased from $150,000 to $165,000, and the value of the initial and annual equity awards was increased from $145,000 to $160,000.
STOCK OWNERSHIP AND STOCK RETENTION
We believe that our non-employee directors should hold a meaningful financial stake in the Company to further align their interests with those of our shareholders. To promote this belief, the Company maintains stock ownership guidelines for its non-employee directors pursuant to which all non-employee directors of the Company are required to acquire and retain holdings of Company stock with a value equal to five times the annual cash retainer. As of the end of fiscal 2023, all of our non-employee directors met, exceeded, or are on track to meet, these guidelines.
2024 PROXY STATEMENT | |
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CORPORATE GOVERNANCE
We actively and regularly engage with shareholders to identify and understand matters important to them. Our independent Chair of the Board, (formerly the “Lead Director”), Board Committee Chairs and Management team are directly involved in these efforts, which are reported to the entire Board. In fiscal 2022,Following our 2023 Annual Meeting, we invitedcontacted institutional shareholders representing 75%approximately 74% of outstandingour shares including all(including 100% of our shares represented by our top 1020 shareholders) to, among other things, discuss our executive compensation program, policies, and practices, solicit feedback and ensure that we had insight into the issues that were most important to our shareholders to engageso that we could better understand their perspectives. We met with institutional shareholders representing 59% of our shares. These figures are based on a varietythe number of topics. We engagedshares outstanding as of the end of fiscal year 2023. In the course of 50 meetings with our institutional shareholders, holding over 40% of shares.we received valuable feedback.
WHAT WE DISCUSSED
CEO and other key executive succession planning and compensation
| • | Strong execution of executive succession strategy |
Best practices in corporate governance including Board refreshment and risk management
| • | Our compensation philosophy for our executive team |
Environmental, social and diversity reporting and priorities including human capital management and our IDEAL commitment
| • | The amount and form of our named executive officers’ pay, including performance metrics and related disclosures regarding such metrics |
Compensation plan design process and strategy (for details see Compensation Discussion and Analysis section)
| • | Board structure and composition, including our classified board structure and our ongoing Board refreshment initiatives |
Effective alignment of shareholder and executive interests including Total Shareholder Return alignment
| • | Business outlook and demand environment |
Shareholder rights and appropriate take-over protections for smaller cap companies
Depending on availability and specific shareholder requests, Greenbrier was represented at these engagements by the Chairs of our Compensation and Nominating and Corporate Governance Committees and by senior executives including our CEO, Chief Human Resources Officer, SVP External Affairs and Treasurer.VP Corporate Finance and Treasurer and Chief Legal Officer or General Counsel. Shareholder engagement activity and feedback is reported directly to the Board, either by the Committee Chairs, if they participated, or by Management.
BasedSee “Say-on-Pay Vote and Shareholder Engagement on shareholderCompensation” on page 26 of this Proxy Statement for further information regarding key feedback the TSR modifier element infrom shareholders related to our long-term performance equity plan was changed for the 2023 long-term performance awardexecutive compensation program and is now structured as a standalone metric, rather than as a modifier.our responses.
We strive to continually integrate our ESG values of Safety and Quality, People, Environmental Sustainability, Governance and Ethics, and Communities into our broader business strategy. Greenbrier’s 20222023 ESG report, was publishedprovides further detail about our priorities and the actions we took in November 2022fiscal 2023 and that we will take in the future, and can be found at www.gbrx.com/ESG/.
Environmental SustainabilityENVIRONMENTAL SUSTAINABILITY
Sustainability is central to Greenbrier. Our core product offerings are not only among the most fuel-efficient modes of transport globally, but freight railcars also maintainare designed for a 40-year useful life. We remain dedicated to traditional stewardship by reducing our environmental footprint and are committed to meeting or exceeding environmental regulations in the countries where we operate. Greenbrier continues to progress on our sustainability goals, which are informed by a materiality assessment completed in fiscal 2021. For example, we have expanded our waste management tracking to include what our facilities send to landfill and have implemented a formal Environmental, Health and Safety policy at each plant. Our first pilot project for site-level generation of renewable energy was implemented at our manufacturing facility in Tlaxcala, Mexico. To ensure sustained alignment, Greenbrier will continue to balance our environmental focus areas and goals with our overall corporate strategy. We plan to refresh our materiality assessment regularly, with a periodic review of the priority issues.
SafetySAFETY
Greenbrier knows ensuringthat promoting the health and safety of allour employees is vital to our success. We believe no one should be injured while working at Greenbrier. In addition to following strict U.S. and, E.U. and other applicable requirements, Greenbrier operates under a
| THE GREENBRIER COMPANIES |
20
CORPORATE GOVERNANCE
Health & Safety Management System that was developed consistent with ISO 45001. As part of our safety program, each
production shift begins with a safety briefing. Senior Management reviews monthly safety data, while the Board is updated each quarter. Our culture of safety evolves and works towards continuous improvement, as evidenced by an all-time low incident rate of 1.09, a 16% improvement from fiscal 2021’s previous record low of 1.29. This is against a backdrop of adding more than 4,200 employees, an increase of 35%, in fiscal 2022.improvement. Notably, several locations have achieved multiple years without a recordable incident.incident and one new railcar manufacturing facility had no recordable incidents in fiscal 2023. Greenbrier’s safety program is robust, effective, and is never takeningrained in our company culture.
HUMAN CAPITAL MANAGEMENT
Greenbrier manufactures, leases, and services a broad range of freight railcars and components on four continents which requires a large number of highly-skilled employees working in manufacturing facilities and plants to produce at scale consistently high-quality and safe products. We do not take our employees for granted. We have no higher priorities than ensuring our employees have a safe and inclusive working environment that promotes their health and well-being, and provides them opportunities for development.
Human Capital Management
With the oversight of our Board and Nominating and Corporate Governance Committee, Greenbrier’s approach to human capital management (HCM) is wide-reaching and encompasses many facets including business strategy alignment, talent pipeline planning, diversity and inclusion, training and development, employee well-being, workforce safety, and risk mitigation. Different aspects of human capital management are reviewed quarterly by the Nominating and Corporate Governance Committee and the Audit Committee with participation of all Board members.
Culture and work environment are increasingly vital in retaining talent. During theThis year, we developed andeployed a new onboarding framework that provides a consistentacross our U.S. operations, spanning each employee’s pre-hire period through the employee’s first 90 days of employment, designed to guide employees and inclusive experience for newly hired Greenbrier employees.managers through successful integration. We also conducted anconduct employee surveysurveys in the United States and Mexico to gain important insights to strengthen our Company and improve the employee experience. Based onMexico hosted the employee survey in fiscal 2023 and received a 95% participation rate. We use the results we have createdfrom these surveys to create actionable goals, to enhancesuch as enhancing communications, provide
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providing more robusttraining and development opportunities, and implementimplementing a formal recognition and reward program.
Our HCM strategy also supports our IDEAL (Inclusion, Diversity, Equity, Access and Leadership) commitment. In fiscal 2022, we created a framework for Employee Resource Groups (ERGs) at Greenbrier and were pleased by the formation of six ERGs during the year.that innaugural year and an additional two in fiscal 2023. ERGs are voluntary, employee-driven groups that are organized around a shared interest or dimension and provide an opportunity for employees to network as well as promote cultural diversity, education, and professional development of its members, contributing to the success of Greenbrier’s IDEAL mission. We hosted our first-ever Diversity, Equity and Inclusion (DEI) Summit in 2023 to celebrate our successes and develop new goals for the future of our IDEAL program.
EnsuringOur deep commitment to workplace safety and our people are healthy, securepromotion of employee health and engagedwell-being supports our overall emphasis on attracting a diverse talent base and fostering an inclusive culture for our global workforce.
Diversity of Our LeadershipDIVERSITY OF OUR LEADERSHIP
BOARD OF DIRECTORS
OurAfter the Annual Meeting, our Board is 36%will be 44% female, versus the Russell 3000 index average of 27%.29% as of June 30, 2023. Greenbrier was previously recognized by the nonprofit, 50/50 Women on Boards, as one of the few Oregon publicly-traded companies with over 20% female representation on the Board. In addition, 27%after the Annual Meeting, one third of our Board isself-identifies as racially or ethnically diverse.
NAMED EXECUTIVE OFFICERS (NEOs)
Our NEO group is 40% gender and racially or ethnically diverse.
For more information on these and other Company priorities, please see our 2022 Environmental, Social and Governance report available at https://www.gbrx.com/esg/.
Under Greenbrier’s written Related Transactions Policy, the Audit Committee of the Board has the responsibility to review and, if appropriate, approve (or, when applicable, ratify) all related person transactions. Standard procedure is for related person transactions to be submitted to the Audit Committee (or its designated representative) for consideration prior to consummation whenever practicable. If advance approval of a related person transaction is not practicable under the circumstances or if Greenbrier management becomes aware of a related person transaction that has not been previously approved or ratified, the transaction is submitted to the Committee at the Committee’s next meeting. The Committee is required to review and consider all relevant information available to it about each related person transaction, and a transaction is considered approved or ratified under the policy if the Committee authorizes it according to the terms of the policy. Related person transactions of an ongoing nature are reviewed annually by the Committee. The definition of “related person transactions” for purposes of the Policy covers the
transactions that are required to be disclosed under Item 404(a) of Regulation S-K under the Securities Exchange Act.
2024 PROXY STATEMENT | |
21
CORPORATE GOVERNANCE
Aircraft Usage. William A. Bill Furman, the retired Executive Chairmanone of the Board of Directors of the Company,our directors, is the ultimate owner of a private aircraft managed by a private independent management company. From time to time, the Company’s business requires charter use of privately owned aircraft, which may include the aircraft owned by Mr. Furman. During fiscal 2022,2023, charters of the aircraft owned by Mr. Furman were placed with or through the company that manages Mr. Furman’s aircraft aggregating approximately $906,995.$66,818. The approximate dollar value of the amount of Mr. Furman’s interest in the transactions was $352,376.$36,465. The fiscal 20222023 charters of the aircraft owned by Mr. Furman were reviewed and approved by the Audit Committee in accordance with Greenbrier’s Related Transactions Policy as described in the preceding paragraph.
Contents of Office. In August 2022, in connection with his retirement from all executive offices, Mr. Furman purchased certain pieces of art and office furniture owned by Greenbrier for a total of approximately $50,905. The company obtained an independent appraisal, and Mr. Furman purchased the artwork and furniture at the appraised value. The transaction and the related appraisal were reviewed and approved by the Audit Committee in accordance with Greenbrier’s Related Transactions Policy.
Indebtedness of Management. Since the beginning of fiscal 2022,2023, none of our directors or executive officers hashave been indebted to us.
The Company’s Corporate Governance Guidelines establish a majority voting procedurespolicy with respect to the election of directors. Pursuant to the policy, in an uncontested election of directors, any nominee who has received a greater number of votes withheld from his or her election than votes for his or her election will, within two weeks following certification of the shareholder vote by the Company, submit a written resignation offer to the Board for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will consider the resignation offer and, within 60 days following certification of the shareholder vote by the Company, make a recommendation to the Board concerning the acceptance or rejection of the resignation offer.
In determining its recommendation to the Board, the Nominating and Corporate Governance Committee will consider all factors its members deem relevant, which may include:
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The Nominating and Corporate Governance Committee will also consider a range of possible alternatives concerning the director’s resignation offer as the Committee deems appropriate, which may include:
Under the policy, the Board will take formal action on the recommendation within 90 days following certification of the shareholder vote by the Company. In considering the recommendation, the Board will consider the information, factors
and alternatives considered by the Nominating and Corporate Governance Committee and any additional information, factors and alternatives the Board deems relevant. Any director tendering a resignation offer will not participate in the Committee’s or Board’s consideration of whether to accept such resignation offer. The Company will publicly disclose, in a Current Report on Form 8-K filed with the SEC, the decision of the Board. The Board will also provide an explanation of the process by which the decision was made and, if applicable, its reasons for rejecting the tendered resignation.
Shareholders and other interested parties may communicate with members of the Board by mail addressed to the Chair of the Board, to any other individual member of the Board, to the full Board, to the non-management directors as a group, or to a particular committee of the Board. In each case, such correspondence should be sent to the Company’s headquarters at One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035 or via email to investorrelations@gbrx.com. Such communications are distributed as appropriate. Please note that communications with directors does not constitute service of process to the Company and that nominations and shareholder proposals must be submitted in accordance with the procedure set forth on pages 49-50.61 to 62.
| THE GREENBRIER COMPANIES |
22
| PROPOSAL
1 | ELECTION OF
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ELECTION OF DIRECTORS
The Board of Directors appointed Greenbrier’s new CEO (Lorie L. Tekorius) to the Board in March 2022. Under Greenbrier’s bylaws, directors appointed by the Board stand for election at the next Annual Meeting of Shareholders, which is in January 2023. Ms. Tekorius is standing for election as a Class III Director. The four other nominees recommended by ourOur Nominating and Corporate Governance Committee and by the Board of Directors have recommended the following three nominees for electionelection. Class III Directors Bill Furman and Butch Swindells are Wanda F. Felton, Graeme A. Jack, David L. Starlingnot standing for re-election and Wendy L. Teramoto as Class II Directors. are retiring.
| • | Lorie L. Tekorius, Kelly M. Williams, and Patrick J. Ottensmeyer as Class III Directors. |
| • | Patrick J. Ottensmeyer was appointed as a Class II director by the Board in June 2023. Under Greenbrier’s Amended and Restated Bylaws, directors appointed by the Board stand for election at the next Annual Meeting of Shareholders. As a result, Mr. Ottensmeyer is standing for election at this Annual Meeting. Due to the planned departures of Mr. Furman and Ambassador Swindells (each a Class III director), Mr. Ottensmeyer is standing for election as a Class III director in order that the classes remain as nearly equal in number as possible after the Annual Meeting. |
The Class IIIII candidates are nominated to serve a three-year term, until the Annual Meeting of Shareholders in 2026,2027, or until their respective successors are qualified and elected. Ms. Tekorius will serve a one-year term and is expected to stand for election in January 2024 with the other Class III Directors or until her successor is qualified and elected.
If a nominee is unable or unwilling to serve as a director at the date of the applicable Annual Meeting or any adjournment or postponement thereof, the proxies may be voted for a substitute nominee, designated by the proxy holders or by the present Board of Directors to fill such vacancy, or for the other nominees named without nomination of a substitute, or the number of directors may be reduced accordingly. The Board of Directors has no reason to believe that any of the nominees will be unwilling or unable to serve if elected a director.
Under Oregon law, the directors who receive the greatest number of votes cast will be elected directors. Abstentions and broker non-votes will have no effect on the results of the vote.
 | THE BOARD OF DIRECTORS RECOMMENDS A VOTE FORTHE ELECTION OF Mr. Ottensmeyer, Ms. Tekorius, and Ms. Williams. Unless marked otherwise, proxies received will be voted FOR the election of the three nominees. |
Directors are divided into three classes, with three directors in Class I and four directors each in Class II and Class III. Typically, one class is elected each year for a three-year term. The following table sets forth certain information about each nominee for election to the Board and each continuing director.
Name | Age | Independent | Positions | Director Since | Committee Memberships | Expiration of Current Term | ||||||||||||||||||
Class I Directors |
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Thomas B. Fargo | 74 |  | Chair of the Board | 2015 | C Chair, G | 2025 | ||||||||||||||||||
Antonio O. Garza | 63 | | Director | 2021 | G | 2025 | ||||||||||||||||||
James R. Huffines | 71 | | Director | 2021 | A, F | 2025 | ||||||||||||||||||
Class II Directors |
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*Wanda F. Felton | 64 | | Director | 2017 | A, F, G | 2023 | ||||||||||||||||||
*Graeme A. Jack | 71 | | Director | 2006 | A Chair, F, C, G | 2023 | ||||||||||||||||||
*David L. Starling | 72 | | Director | 2017 | C, G | 2023 | ||||||||||||||||||
*Wendy L. Teramoto | 48 | | Director | 2019 | A, C, F | 2023 | ||||||||||||||||||
Class III Directors |
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William A. Furman | 78 | | Director and former Executive Chairman | | 1994 | 2024 | ||||||||||||||||||
Charles J. Swindells | 80 | | Director | 2005 | 2024 | |||||||||||||||||||
*Lorie L. Tekorius | 55 | Director and Chief Executive Officer | 2022 | 2023 | ||||||||||||||||||||
Kelly M. Williams | 58 | | Director | 2015 | A, C, G Chair | 2024 | ||||||||||||||||||
| Committee Memberships | ||||||||||||||||
Name | Independent | Director Since | Audit | Compensation | Nominating/ Corp. Gov. | Expiration of Current Term | ||||||||||
Class I Directors | ||||||||||||||||
Thomas B. Fargo Age: 75 Chair of the Board | l | 2015 | Chair | l | 2025 | |||||||||||
Antonio O. Garza Age: 64 Director | l | 2021 | l | l | 2025 | |||||||||||
James R. Huffines Age: 72 Director | l | 2021 | Financial Expert | l | 2025 | |||||||||||
Class II Directors | ||||||||||||||||
Wanda F. Felton Age: 65 Director | l | 2017 | Financial Expert | l | 2026 | |||||||||||
Graeme A. Jack Age: 72 Director | l | 2006 | Chair, Financial Expert | l | l | 2026 | ||||||||||
Patrick J. Ottensmeyer(1),(2) Age: 66 Director | l | 2023 | Financial Expert | l | 2026 | |||||||||||
Wendy L. Teramoto Age: 49 Director | l | 2019 | Financial Expert | l | 2026 | |||||||||||
Class III Directors | ||||||||||||||||
William A. Furman (Retiring Jan. 2024) Age: 79 Director | 1994 | 2024 | ||||||||||||||
Charles J. Swindells (Retiring Jan. 2024) Age: 81 Director | l | 2005 | 2024 | |||||||||||||
Lorie L. Tekorius(1) Age: 56 Director and CEO | 2022 | 2024 | ||||||||||||||
Kelly M. Williams(1) Age: 59 Director | l | 2015 | l | l | Chair | 2024 | ||||||||||
| (1) | Nominees for Election |
IndependentA Audit Committee C Compensation CommitteeF Audit Committee Financial ExpertG Nominating and Corporate Governance Committee *Nominees for Election
| (2) | If elected, Mr. Ottensmeyer will serve as a Class III director in order that the classes remain as nearly equal in number as possible. |
2024 PROXY STATEMENT | |
23
FISCAL 2023 EXECUTIVE
COMPENSATION
Compensation Discussion and Analysis
This section discusses material information relating to the compensation of our named executive officers for fiscal 2023 (“NEOs”):
Lorie L. Tekorius,
Chief Executive Officer and President
Adrian J. Downes,
Senior Vice President, Chief Financial Officer
Brian J. Comstock,
Executive Vice President, Chief Commercial and Leasing Officer
William Krueger,
Senior Vice President, President Greenbrier Manufacturing Operations
Martin R. Baker,
Senior Vice President, Chief Legal and Compliance Officer
EXECUTIVE SUMMARY
Our executive compensation program is designed to attract, motivate and retain the key executives who drive our success. Pay that reflects performance and aligns with the interests of shareholders is key to our compensation program design and decisions. We structure our executive compensation program to include significant performance metrics that are aligned with our business strategy and shareholder value creation. As described in more detail below, in response to shareholder feedback, in fiscal 2023 we added a relative total stockholder return (rTSR) performance metric to our performance-based restricted stock unit (PSU or performance-based RSU) program. In previous fiscal years the program utilized a rTSR modifier. Our fiscal 2023 PSU program is described in more detail on pages 31-32. Listed below are highlights of our fiscal 2023 executive compensation policies and practices:
WHAT WE DO | ||
| ✔ | Ongoing engagement with our institutional shareholders regarding our executive compensation policies and practices | |
| ✔ | Performance-based cash and equity incentive compensation | |
| ✔ | Caps on performance-based cash and equity incentive compensation | |
| ✔ | Significant portion of executive compensation at risk based on company performance | |
| ✔ | Multi-year equity award vesting periods for equity awards, including three-year performance periods for performance-based equity awards | |
| ✔ | One-year minimum vesting requirement under equity incentive plan, with limited exceptions | |
| ✔ | Annual review and approval of our executive compensation program | |
| ✔ | Annual compensation risk assessment | |
| ✔ | Annual “Say On Pay” vote | |
| ✔ | Clawback policy on cash and equity incentive compensation | |
| ✔ | Robust stock ownership and stock retention guidelines for executive officers | |
| ✔ | No employment agreements with executive officers | |
| ✔ | Independent compensation consultant engaged by the Compensation Committee | |
| ✔ | 100% independent directors on the Compensation Committee | |
| ✔ | Limited perquisites | |
| THE GREENBRIER COMPANIES |
24
FISCAL 2023 EXECUTIVE COMPENSATION
WHAT WE DON’T DO | ||
| × | No “single trigger” change of control payments and benefits | |
| × | No tax gross-ups, including for change of control related excise tax payments | |
| × | No short sales, hedging, pledging of stock ownership positions, or transactions involving derivatives of our common stock | |
| × | No strict benchmarking of executive compensation to a specific percentile of our compensation peer group | |
| × | No pension benefits | |
| × | No dividend payments on unvested awards | |
| × | No ‘repricing’ of out-of-the-money stock options without shareholder approval | |
| × | No incentivizing unnecessary or excessive risk taking | |
FISCAL 2023 FOCUS AND ACCOMPLISHMENTS
Fiscal 2023 was another year of transformation. We delivered strong results despite challenges that impacted our business throughout the year. While demand in the marketplace remained strong, supply chain challenges, inflation, rising interest rates, rail service congestion, and labor shortages impacted and continue to impact our business and require focused attention from our management. We were able to navigate these trends and exceed key financial goals in fiscal 2023, including achieving record annual revenues of $3.9 billion, an increase of $966.3 million or 32.5% compared to fiscal 2022, and record deliveries, with railcar deliveries increasing 33.2% compared to fiscal 2022.
ADDITIONAL ACCOMPLISHMENTS
| • | Launched a multi-year strategy during fiscal 2023 that we outlined at our first-ever Investor Day in April 2023. The strategy has three basic tenets: |
| • | Maintain our manufacturing leadership position across geographies; |
| • | Optimize our industrial footprint for efficiency and margin enhancement while addressing the needs of our customers; and |
| • | Grow our recurring revenue to reduce the impact of manufacturing cyclicality. |
| • | Conducted a strategic review of our global business capacity, and took actions during the fiscal year to: |
| • | Sell the Gunderson Marine business and close our Portland railcar manufacturing facility; |
| • | Sell Southwest Steel, a foundry business in Longview, Texas; and |
| • | Divest our interest in Rayvag, a manufacturing facility located in Turkey. |
| • | Acquired the minority interest in GBX Leasing and now wholly own our lease fleet. |
| • | Launched European leasing and syndication business to add another channel to the market. |
| • | Ended fiscal year 2023 with strong backlog value and units. Our railcar backlog was 30,900 units with an estimated value of $3.81 billion as of August 31, 2023, with deliveries that extend into 2026. |
| • | Increased our quarterly dividend by 11%, to $0.30 per share, starting in July 2023. Fiscal 2023 marks nine consecutive years of dividend payments by the Company. |
| • | Repurchased 1.9 million shares for $56.9 million under our share repurchase program. |
2024 PROXY STATEMENT | |
25
FISCAL 2023 EXECUTIVE COMPENSATION
SAY-ON-PAY VOTE AND SHAREHOLDER ENGAGEMENT ON COMPENSATION
At our 2023 Annual Meeting, we held a Say-on-Pay vote on the compensation of our NEOs for fiscal 2022, which received the support of approximately 80% of the votes cast. This was lower than the Say-on-Pay vote support of approximately 88% of the votes cast at our 2022 Annual Meeting for the compensation of our NEOs for fiscal 2021. The Compensation Committee and our full Board took the Say-on-Pay vote outcome seriously. Following our 2023 Annual Meeting, we contacted institutional shareholders representing approximately 74% of our shares (including 100% of our shares represented by our top 20 shareholders) to, among other things, discuss our executive compensation program, policies, and practices, solicit feedback and ensure that we had insight into the issues that were most important to our shareholders so that we could better understand their perspectives. We met with institutional shareholders representing 59% of our shares. These figures are based on the number of shares outstanding as of the end of fiscal year 2023. We value our shareholders’ opinions and feedback and are committed to maintaining an active dialogue to understand the priorities and concerns of our shareholders. We believe that ongoing engagement builds mutual trust and alignment with our shareholders and is essential to our long-term success.
In the course of 50 meetings with our institutional shareholders, we received valuable feedback on our executive compensation program, policies and practices. These shareholders generally viewed the evolution of our executive compensation program as consistent with what we previously communicated in our outreach over the past several years and consistent with our strategy and pay-for-performance philosophy. The key feedback from our shareholders related to our executive compensation program and our responses are shown in the chart below.
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Members of the Board who are our employees are not separately compensated for serving on the Board. Non-employee directors receive an annual cash retainer fee of $80,000. The Audit Committee chair receives an additional annual cash retainer of $20,000, and each other committee chair receives an additional annual cash retainer of $15,000. The Chair of the Board (formerly the “Lead Director”), Admiral Fargo, receives an additional cash retainer of $70,000. Members of the Audit Committee receive an additional annual cash retainer of $10,000, and Members of the Compensation and Governance Committees receive an additional annual cash retainer of $7,500. All annual retainer fees are paid quarterly in arrears.
For fiscal 2022, under the terms of the Company’s Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan, our non-employee directors received an award of restricted stock units for a number of shares of the Company’s Common Stock calculated by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the grant date, rounded up to the nearest whole share. The awards are made annually, immediately after the close of each annual meeting, with such shares vesting on the date of the next annual meeting of shareholders or, if a director is
not re-elected, on the one-year anniversary of the date of grant (if earlier). If a non-employee director is appointed between annual meetings of shareholders, then cash retainer fees and grants of restricted stock units occur on a pro rata basis. No such initial award was made in fiscal 2022.
The Company has stock ownership guidelines for its non-employee directors, under which all non-employee directors of the Company are required to acquire and retain holdings of Company stock with a value equal to five times the annual cash retainer fee. All of our nine non-employee directors have satisfied the director share ownership expectation.
In the event a non-employee director ceases to be a director due to death or disability, or because he or she is not re-elected to serve an additional term as a director, any unvested restricted stock units shall immediately become fully vested. If a non-employee director ceases to be a director by reason of removal or resignation as a member of the Board, any unvested restricted stock units shall automatically be forfeited, and the shares subject to such award shall be available for grant under the 2021 Stock Incentive Plan.
The following table summarizes the compensation of the non-employee Board members for fiscal year 2022.
Name | Fees Earned ($) | Stock Awards ($)(1) | All Other ($) | Total ($) | ||||
Thomas B. Fargo | 180,000 | 148,684 | — | 328,684 | ||||
Wanda F. Felton | 97,500 | 148,684 | — | 246,184 | ||||
Antonio O. Garza | 86,250 | 148,684 | — | 234,934 | ||||
James R. Huffines | 88,333 | 148,684 | — | 237,017 | ||||
Graeme A. Jack | 125,000 | 148,684 | — | 273,684 | ||||
Duane C. McDougall (Retired January 2022) | 52,500 | — | — | 52,500 | ||||
David L. Starling | 95,000 | 148,684 | — | 243,684 | ||||
Charles J. Swindells | 80,000 | 148,684 | 120,000(2) | 348,684 | ||||
Wendy L. Teramoto | 97,500 | 148,684 | — | 246,184 | ||||
Donald A. Washburn (Retired January 2022) | 40,000 | — | — | 40,000 | ||||
Kelly M. Williams | 120,000 | 148,684 | — | 268,684 | ||||
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Compensation Discussion and Analysis
While we regularly engage with shareholders throughout the year, there is a very short window between the publication of proxy advisor reports and the Annual Meeting. We encourage shareholders to reach out to us as early as possible at investorrelations@gbrx.com if you would like a meeting with our Board or Management to discuss this Proxy Statement.
This section discusses material information relating to our executive compensation program and plans for our named executive officers or “NEOs” for fiscal 2022:
William A. Furman,
Executive Chairman
(Principal Executive Officer until August 31, 2022)
Lorie L. Tekorius,
Chief Executive Officer and President
Alejandro Centurion,
Executive Vice President and President of Global Manufacturing Operations
Brian J. Comstock,
Executive Vice President, Chief Commercial & Leasing Officer
Adrian J. Downes,
Senior Vice President, Chief Financial Officer and Chief Accounting Officer
Say-on-Pay Vote and Shareholder Engagement on Compensation
We continued our consistent practice of shareholder engagement and summarized the topics discussed on page 14. We were pleased that 88% of voting shareholders approved, on an advisory basis, the compensation of the named executive officers as reported in the 2022 proxy statement. The Compensation Committee believes the voting result reflects strong and continuing support for the Company’s executive compensation program and considers the outcome of the annual advisory vote in our evolving compensation practices.
An outcome of our engagement since the filing of our last proxy statement was to change the TSR modifier element in our long-term performance equity program to be a standalone metric.
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Fiscal 2022 Focus and Accomplishments
Fiscal 2022 was a year of significant transition. Our business began to emerge from the COVID-19-related downturn, navigated supply chain disruptions and managed through labor shortages while increasing production to meet the improving demand environment. We increased production rates by 50% globally, including a production increase of 75% in our core North American market, which required a headcount increase of 35%.
The safety and well-being of our employees remains Greenbrier’s primary focus and responsibility. We are proud that our safety results in fiscal 2022 set a new record – even with the significant increase in headcount and labor hours.
Against this backdrop, the Board guided Greenbrier through the retirement of our co-founder, William A. Furman. The appointment of Lorie L. Tekorius as CEO in March 2022 and William Krueger as the President of Manufacturing Operations in September 2022 completes a multi-year process resulting in a new senior management team and positions the company to grow shareholder value.
Additional accomplishments:
Maintained a strong market share to improve profitability and support future growth
Grew new railcar backlog by 2,900 units and $670 million of value from prior year
Fixed the interest rate of the majority of Greenbrier’s long-term debt to minimize risk in the rising rate environment
Continued an annual dividend of $1.08 per share. Greenbrier has returned $169.7 million to shareholders through dividends over the last five fiscal years and sustained a strong balance sheet and profitability in a highly cyclical business. Fiscal 2022 marks eight consecutive years of dividend payments by the Company and saw record dividend payments of $35.8 million.
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Payouts and Pay-for-Performance Alignment
SHORT-TERM INCENTIVE AWARD GOALS AND PAYOUTS
|  | We no longer provide any NEO employment agreements | ||
In 2022, EBITDA was set higher than the prior year achievement. When setting the goal for 2022 EPS, the Compensation Committee considered the fact that 2021 Adjusted EPS included debt extinguishment adjustments and tax benefits from the CARES Act that benefited EPS but had no impact on EBITDA. Excluding these items, the EPS target in 2022 was set higher than 2021.
Fiscal 2022 EBITDA was $231.3 million, resulting in a payout of 142.8%, and EPS was $1.40, resulting in a payout of 200.0%. These account for 80% of the payout determination. The Strategic Goals payout was 137.5%, which account for 20% of the payout determination. See below for discussion of the Strategic Goals. This resulted in a blended payout of 164.6% of the target award level to the NEOs. Management achieved this financial performance through a 50% increase to new railcar production, including a production increase of more than 75% in our core North American market, enabled by a 35% increase in headcount and a stronger-than-anticipated demand environment for leased railcars. Greenbrier will sell (“syndicate”) new railcars with leases attached to financial partners, generating more profit than selling a railcar without a lease attached.
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The Compensation Committee made no adjustments to EBITDA and EPS in 2022. EBITDA, Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures that management believes are helpful in evaluating our financial performance. See Appendix B for a reconciliation of these measures to the most comparable GAAP measures.
 Clearer Disclosure of PSU metrics |  | |||
| This proxy statement includes enhanced narrative and graphic disclosures regarding PSU metrics. Our fiscal 2023 PSU program is described in |
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STRATEGIC GOALS
For fiscal 2022, the strategic goals set for NEOs in the annual incentive program were tied to successful execution of succession plans for the CEO, Manufacturing President, key talent development and to execute to Inclusion, Diversity, Equity, Access and Inclusion (IDEAL) goals. The NEOs could have earned between 0% and 150% payout based on achievement of the strategic goals. The Compensation Committee determined that a 137.5% payout was appropriate for the successful completion of these goals.
Strategic Achievements for fiscal 2022:
| more detail on pages 31-32 |
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Amount and Form of NEO Pay |
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| As in previous fiscal years, we continued to assess executive compensation in the context of our business strategy, as well as against market practices in consultation with our independent compensation consultant, and maintained significant weighting towards equity |
LONG-TERM PERFORMANCE EQUITY AWARDS: GOALS AND VESTING
The Compensation Committee sets rigorous targets for our long-term performance equity awards as demonstrated in vesting percentages over the last three years. Targets are set based on Greenbrier’s new railcar backlog and production schedules, current industry demand forecasts derived from external and internal projections and business unit-specific growth initiatives for the upcoming three-year measurement period.
The 2022 long-term performance equity awards vested over a three-year performance period that began in September 2019. The Compensation Committee’s targets for these awards were EBITDA and ROIC with a TSR modifier. The EBITDA targets were set higher than in any previous year with the anticipation of industry recovery and growth resulting from acquisitions. Targets were set pre-COVID and based on expected industry deliveries at the time. Further, the Threshold ROIC was set at Target to encourage management to execute on synergies and de-lever after the largest acquisition in Company history, which was completed in July 2019. EBITDA and ROIC are non-GAAP financial measures that mana
gement believes are helpful in evaluating our financial performance. See Appendix B for an explanation of how these measures are calculated.
Fiscal 2020—2022 Long-Term Performance Equity Goals ($ in millions)
EBITDA (80% Weighting) | ROIC (20% Weighting) | Payout | ||||||
Threshold (Minimum) | $ | 770 | 11% | 50% | ||||
Target (Goal) | $ | 1,100 | 11% | 100% | ||||
Maximum | $ | 1,463 | 15% | 200% | ||||
Actual | $ | 658 | 5% | 0% | ||||
Actual industry deliveries were over 30% lower than expectations when the metrics were established in October 2019 due to the COVID-19 pandemic and resulting market pressures. No payout was achieved for long-term performance awards for the fiscal 2020 to 2022 performance period as the actual results did not exceed the threshold performance goal for either metric. No adjustments were made to our performance goals or payout levels even though the COVID-19 pandemic impacted the majority of the vesting period.
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COMPARATIVE PERFORMANCE
The Compensation Committee and full Board regularly review our performance compared to Trinity Industries, Inc. (ticker: TRN), our primary direct competitor in the railcar manufacturing industry. We have not included Freightcar America, Inc. (ticker: RAIL) in this analysis due to the small size of their company and position in the competitive landscape. Greenbrier has consistently generated higher returns than Trinity on a one-, three- and five-year basis. ROIC is a non-GAAP financial measure that management believes is helpful in evaluating our financial performance. See Appendix B for a reconciliation of this measure to the most comparable GAAP measure.
1-Year Metrics*
(in percent)
Company | ROE | ROA | ROIC | ||||||||||||
The Greenbrier Companies | 4.1 | 1.7 | 2.3 | ||||||||||||
Trinity Industries | 5.2 | 0.9 | 1.9 | ||||||||||||
Source: S&P Capital IQ and public company filings.
3-Year Metrics*
(in percent)
Company | ROE | ROA | ROIC | ||||||||||||
The Greenbrier Companies | 4.5 | 2.1 | 3.4 | ||||||||||||
Trinity Industries | (1.3) | (0.4) | 2.6 | ||||||||||||
Source: S&P Capital IQ and public company filings
5-Year Metrics*
(in percent)
Company | ROE | ROA | ROIC | ||||||||||||
The Greenbrier Companies | 6.7 | 3.4 | 4.7 | ||||||||||||
Trinity Industries | 2.4 | 1.2 | 2.6 | ||||||||||||
Source: S&P Capital IQ and public company filings. Trinity completed the spin-off of Arcosa, Inc. in November 2018.
*Greenbrier operates on a fiscal year ending August 31 while our direct competitor, Trinity Industries, operates on a calendar year ending December 31. For the purpose of providing a similar comparison to our direct competitor, our performance metrics were based on the last twelve months ending May 31st. At the time of the drafting of this proxy, Trinity Industries’ latest available reported financials were as of June 30, 2022. For reconciliation see appendix B.
Over the three-year period from September 1, 2019, to August 31, 2022, Greenbrier’s Total Shareholder Return has performed in-line with the Russell 3000 and S&P 600 Small Cap indices, and below Trinity performance. Since Greenbrier operates in a cyclical industry, we believe that Greenbrier’s share price was impacted and amplified by the global economic turmoil of the COVID-19 pandemic and war in Ukraine. Stock market fluctuations that are disconnected from company fundamentals can inappropriately discount or ignore the long-term trends at Greenbrier, including substantial long-term revenue and market share growth and consistent returns of capital to shareholders through dividends. We believe Greenbrier’s one-year TSR reflects an amplification of this cyclicality while Trinity benefits from the stability of their significant railcar lease fleet.
Company / Index | One-Year TSR (9/1/21 – 8/31/22) | Three-Year TSR (9/1/19 – 8/31/22) | ||
The Greenbrier Companies, Inc. | (25.1%) | 12.4% | ||
Russell 3000 | (13.3%) | 11.9% | ||
S&P 600 Small Cap | (12.1%) | 10.4% | ||
Trinity Industries, Inc. | (3.8%) | 17.6% | ||
Source: Compustat and IBES, Equilar.
Overlapping Performance Metrics |
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FISCAL 2023 NEO COMPENSATION PROGRAM
PRINCIPLES
Fiscal 2022 CEO and Executive Chairman Pay
Lorie L. Tekorius became Greenbrier’s CEO on March 1, 2022. Ms. Tekorius is a long-tenured leader within Greenbrier and a recognized leader within the industry, bringing significant industry and company-specific knowledge. The Board believes that appropriately incenting Ms. Tekorius is key for stability during this leadership transition, which comes at a pivotal moment in our business operations. Our compensation program is designed to align the CEO’s compensation with Company performance. Stock-based compensation provides a direct incentive for improved share price performance. Ms. Tekorius’ equity risk, including unvested restricted stock units, as of August 31, 2022, was over 246,000 shares, valued at approximately $7.0 million. The Board and Ms. Tekorius are equally aware of the impact market volatility in our share price has had on total shareholder return performance. The Board believes that Ms. Tekorius’s compensation is clearly aligned with the interests with shareholders.
William A. Furman was Greenbrier’s Executive Chairman until his retirement from all executive offices on August 31, 2022. His compensation was primarily based on an employment agreement entered into before 2010. Upon the outbreak of COVID-19, Mr. Furman voluntarily reduced his base salary by nearly 25% and opted to receive payment of his fiscal 2020 and 2021 annual incentive awards in stock, not cash, to support Greenbrier’s liquidity goals. Mr. Furman worked closely with the Board and executive management team over the past two years to position the Company for long-term success and for a smooth transition following his retirement. Mr. Furman remains a top 20 shareholder and as of September 1, 2022, his total equity risk, including unvested restricted stock units, is over 522,000 shares valued at approximately $14.9 million.
As shown by the below-Target long-term performance payouts for multiple years in the Long-Term Performance Vesting Percentage chart on page 23, including no payout in fiscal 2022, there is a strong link between pay and performance.
Executive Compensation Program for Fiscal 2022
EXECUTIVE COMPENSATION PRINCIPLES
The Compensation Committee designed the Company’s executive compensation program to be consistent with the goals of its executive compensation philosophy: to drive performance and increase shareholder value. In evaluating and determining executive compensation, the Compensation Committee also considers the results of our most recent Say-on-Pay vote and other feedback from our shareholders. For additional information about the Compensation Committee, see “Corporate Governance—Board Committees, Meetings and Charters—Compensation Committee” in this Proxy Statement. The current compensation strategyprogram is designed to strengthen and continually reinforce the link between pay and performance.
The objectives of our executive compensation program are to:
Align the interests of key executives with the long-term success of the business, our shareholders and other stakeholders
| • | Align the interests of key executives with the long-term success of the business, our shareholders, and other stakeholders |
Attract, develop, retain and motivate key executives to drive our business and financial performance
| • | Attract, develop, retain, and motivate key executives to drive our business and financial performance |
Link a significant amount of executive compensation to achievement of pre-established financial metrics and business goals that are directly tied to our overall business strategy
| • | Link a significant amount of executive compensation to achievement of pre-established financial metrics and business goals that are directly tied to our overall business strategy |
| • | Incentivize the management team to create shareholder value by balancing growth and return on capital at all points in the business cycle |
Incent the management team to create long-term shareholder value by balancing growth and return on capital at all points in the business cycle
Our compensation principles state that:
| • | A significant portion of compensation should be performance-based |
| • | Total direct compensation should be competitive with the market and based on the complexity of an executive’s assignment, years and depth of experience, and readiness for leadership in the CEO and key executive succession plan |
Total direct compensation is competitive with the market and based on the complexity of an executive’s assignment, years and depth of experience, and readiness for leadership in the CEO and key executive succession plan
Annual incentive awards should be aligned with the Company’s operating, financial and strategic objectives while considering the cyclical nature of our business
Long-term incentive plans should promote retention and reward absolute performance as well as relative performance to appropriate peers
A meaningful equity stake helps ensure that executive and shareholder interests are aligned
| THE GREENBRIER COMPANIES |
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FISCAL 2023 EXECUTIVE COMPENSATION
| • | Annual incentive awards should be aligned with the Company’s operating, financial, and strategic objectives while considering the cyclical nature of our business |
| • | Long-term incentive plans should promote retention and reward absolute performance as well as relative performance to appropriate peers |
| • | A meaningful equity stake helps ensure that executive and shareholder interests are aligned |
In evaluating the competitiveness of our compensation program, we compare it against the programs of peers in related industries at a similar stage of development and comparable financial profile. We also evaluate broader size-appropriate comparisons in related industries. More information about our use of peer group data is provided below. We also assess pay levels and pay mix of our aggregate executive and non-executive compensation programs through compensation positioning, and review realizable pay analysis to inform our decisions. Our compensation philosophy also recognizes the need for flexibility based on experience, scope of position, critical skills, and individual/corporate performance. We consider compensation data from our compensation peer group as one of several factors that informs our judgment of appropriate parameters for compensation levels. We do not strictly benchmark compensation to a specific percentile of our compensation peer group, nor do we apply a formula or assign relative weightings to specific compensation elements. We believe that over-reliance on benchmarking can result in compensation that is unrelated to the value delivered by our executive officers because it does not take into account the specific performance of the executive officers, the relative size, growth, and performance of the Company, or any unique circumstances or strategic considerations of the Company.
ROLE OF THE COMPENSATION COMMITTEE
Pursuant to its charter, the Compensation Committee assists the Board in its oversight of the performance and compensation of the Company’s senior executive management team, including the NEOs. In making executive compensation decisions, the Compensation Committee seeks the assistance of its independent compensation consultant, Mercer, as well as our CEO and our management team (except with respect to their own compensation). The Compensation Committee reviews the cash and equity compensation of our executive officers to properly incentivize and reward them for their performance. The role of the Compensation Committee includes:
| • | Establishing compensation policies for executive officers and directors of the Company |
| • | Reviewing, determining, and approving the compensation of the Company’s CEO |
| • | Approving compensation of non-CEO executive officers |
| • | Reviewing and approving executive officer change of control agreements and other special benefits, including supplemental retirement benefits |
| • | Regularly reviewing, administering, and recommending changes to equity-based and other incentive compensation plans |
| • | Annually reviewing the Company’s compensation policies and practices as they relate to risk management and evaluating potential risks |
ROLE OF THE COMPENSATION CONSULTANT
The Compensation Committee has sole authority to retain and terminate independent consultants, counsel, experts, and other personnel the Compensation Committee deems necessary to enable it to fully perform its duties and fulfill its responsibilities, and to determine the compensation and other terms of engagement for such independent consultants, counsel, experts, and other personnel.
The Compensation Committee directly engaged Mercer as independent consultant for fiscal 2023 to provide information, analysis, and advice regarding executive and director compensation. The Compensation Committee has evaluated the independence of Mercer and concluded that there are no conflicts of interest. Mercer provided the following services for the Compensation Committee during fiscal 2023: (i) advice on 2023 executive officer bonus program structure, performance goals and targets, and bonus amounts; (ii) advice on 2023 executive officer equity grant award sizes and performance goals and targets; (iii) market data and recommendations on executive officer compensation; (iv) advice on equity retention policies and holding requirements after vesting; (v) advice on updating the Company’s peer group companies; and (vi) ongoing advice regarding the Company’s executive compensation practices to advise whether any such practices should be modified to improve effectiveness or to implement “best practices.”
ROLE OF MANAGEMENT
The Compensation Committee consults with our CEO and our Chief Human Resources Officer (CHRO) when making compensation decisions. Typically, our CEO and CHRO engage with other members of our management team to gather information on corporate and
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FISCAL 2023 EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION individual performance and their perspective and recommendations on compensation matters. Our CEO makes recommendations to the Compensation Committee regarding compensation matters, including the compensation of our other executive officers. The Compensation Committee uses these recommendations as one of several factors in making compensation decisions, and those decisions do not necessarily follow the CEO’s recommendations.
PROGRAM DESIGN
The following table provides a snapshotdescribes the material elements of the elements offiscal 2023 pay for NEOs and explains why each element iswas provided.
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Rationale for Selection of Performance Metrics
The Compensation Committee considers a variety of factors including annual input generated from shareholder engagement, the macro business environment, backlog of Company and industry orders, expected delivery schedules and data related to the railroad industry that affects demand including velocity of the railroads, available railcar supply, and railcar loading trends and forecasts by commodity and railcar type.
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EXECUTIVE COMPENSATION PRACTICES
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Fixed | Base Salary | Individual performance while considering market pay levels, specific responsibilities and experience of each NEO | • Attract and retain talent • Provide financial certainty | Cash | ||||||||||
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Performance-Based | Long-Term Equity | Achievement of specific financial goals including relative financial performance | • Reward achievement of long-term objectives over a three-year performance period
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Time-Based | Long-Term Equity | Creation of shareholder value | • Retain talent
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PEER GROUP
Astec Industries (ASTE) Crane (CR) GATX Corp (GATX) H&E Equipment Services (HEES) Hub Group (HUBG) Hyster-Yale Materials Handling (HY) | Manitowoc (MTW) Oshkosh (OSK) REV Group (REVG) Terex (TEX) Timken (TKR) | Trinity Industries (TRN) Triton International (TRTN) Wabash National (WNC) Westinghouse Air Brake (WAB) |
Peer group companies are chosen based on whether they are in a comparable industry, have comparable revenue or market capitalization, or compete with Greenbrier for executive talent. The current peer group includes companies in the following sectors: railcar manufacturing; heavy manufacturing; other related manufacturing; after-market products; transportation services; and high-value equipment leasing. Annual revenues of the peer group companies range from approximately one-third to three times Greenbrier’s annual revenue, with Greenbrier approximating the peer group median revenue size.
SPECIFIC ELEMENTS OF FISCAL 2023 COMPENSATION
The charts below show the pay mix of our CEO and other NEOs and the components of their pay for fiscal 2023, specifically the base salary at fiscal end 2023, cash bonus amounts earned for fiscal 2023, and the grant date fair value of equity awards granted in fiscal 2023.
| THE GREENBRIER COMPANIES |
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Executive Compensation Paid for Fiscal 2022
Our executive compensation program elements consist of base salary, annual incentive and long-term equity incentive, which has performance-based and time-based components. In fiscal 2022, 62% of actual total direct compensation for our CEO, 71% for our Executive Chairman and 64% for our other NEOs was performance based. Our other NEOs performance percentage of total direct compensation was higher than our CEO’s due to the additional incentive compensation for Mr. Centurion in fiscal 2022.
BASE SALARY
In establishing salary levels, we consider market pay levels, the specific responsibilities and experience of each NEO, and his or her individual performance. As part of its annual review, the Compensation Committee may adjust base salaries, including for:
| • | Annual merit increases |
| • | Changes in role, such as promotions or added responsibilities |
| • | Market adjustments to promote retention |
Base salary for Mr. Comstock was adjusted in role, suchearly fiscal 2023 to align with market pay levels for executives with similar duties and responsibilities. Base salary for Mr. Krueger was adjusted effective fiscal 2023 in connection with his appointment as promotions or added responsibilities
Named Executive Officer | Fiscal 2022 Base Salary | Fiscal 2023 Base Salary | Percentage Increase from Fiscal 2022 Base Salary | |||||||||
Lorie L. Tekorius | $ | 900,000 | $ | 900,000 | N/A | |||||||
Adrian J. Downes | $ | 525,000 | $ | 525,000 | N/A | |||||||
Brian J. Comstock | $ | 575,000 | $ | 600,000 | 4.4% | |||||||
William Krueger | $ | 535,000 | $ | 560,000 | 4.7% | |||||||
Martin R. Baker | $ | 465,000 | $ | 465,000 | N/A | |||||||
ANNUAL CASH BONUS
A key objective of our compensation philosophy is to promote retention
Mr. Furman,tie a significant portion of each NEO’s total direct compensation to company performance. To help accomplish this objective, we provide annual performance-based cash bonus opportunities (“annual bonuses”) for our former Executive Chairman, voluntarily reducedNEOs, which are earned based on the amount of his base salary from $1,050,000 per year to $800,000 per year in April 2020 in response to market conditions andCompany’s achievement against performance objectives established at the impactbeginning of the COVID-19 pandemic on our business. The reduced salary remained in effect during fiscal 2022. Base salaries for Ms. Tekorius, Mr. Comstock and Mr. Downes were adjusted in January 2022 to reflect changes in their respective roles and responsibilities in conjunction with succession plan transitions that are predominantly complete as of the end of fiscal 2022. Mr. Centurion received a last and final base salary adjustment to compensate him through the transition period and because he had not received an adjustment to base salary in the prior two fiscal years.
ANNUAL INCENTIVE AWARDS
year. Target incentive opportunities under the annual incentivebonus plan for NEOs are expressed as a percentage of base salary. The target incentive opportunity for Ms. Tekorius was increased in early fiscal 2023 to align with market pay levels for executives with similar duties and responsibilities. The target incentive opportunity for Mr. Krueger was increased effective fiscal 2023 in connection with his appointment as President of Greenbrier Manufacturing Operations. The table below shows the target annual bonus opportunity for each NEO as a percentage of his or her base salary at fiscal end 2022 and are intended to be competitive with the market.2023.
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Named Executive Officer | Fiscal 2022 Target | Fiscal 2023 Target | ||||||
Lorie L. Tekorius | 105 | % | 110 | % | ||||
Adrian J. Downes | 85 | % | 85 | % | ||||
Brian J. Comstock | 95 | % | 95 | % | ||||
William Krueger | 90 | % | 95 | % | ||||
Martin R. Baker | 90 | % | 90 | % | ||||
Our NEO’sAs in fiscal 2022, our NEOs’ fiscal 2023 annual incentive awards arebonus opportunities were based 40% on the achievement of pre-establishedearnings per share (EPS) goals, 40% on the achievement of EBITDA goals, and 20% on the achievement of strategic goals. The Compensation Committee believes that EPS reflects key financial and operational performance goals for 80%objectives, aligns the interests of the award potentialshareholders with management, and strategic goals for 20%encourages management to focus on all aspects of the award potential. Awardsperformance, including top line growth in revenue, expense control, and bottom line results. The annual bonus ultimately earned can rangecould have ranged from 0% to 200% of an individual’s target incentive opportunity for the financial goals based on actual financial results (withEPS and EBITDA portions of the threshold payout level set at 50% for each respective financial metric)annual bonus, and 0% to 150% for Strategic goals. Although not used in fiscal 2022, the strategic goal portion of the annual bonus. Our CEO has discretion to recommend to the Compensation Committee (and the Compensation Committee has discretion in the case of the CEO) to make a downward (but not upward) adjustment of any metrically calculated award ofby up to 20% to reflect individual performance. The actualNo such adjustments were made in fiscal 2022 payouts for the NEOs are presented in the Summary Compensation Table under Non-Equity Incentive Plan Compensation.2023.
The performance metrics, their weighting, targets, and payout levels arewere established at the beginning of each fiscal year2023 by the Compensation Committee with input from management and the Compensation Committee’s independent compensation consultant. This process includesincluded a thorough review and discussion of the risks and variables ofin management’s financial plan for the upcoming fiscal year 2023,
2024 PROXY STATEMENT | |
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FISCAL 2023 EXECUTIVE COMPENSATION
including existing backlog, production schedules and forecasts of industry demand. The level of financial performance required for the maximum payout isfor the EPS and EBITDA portions of the annual bonus was established based on the Compensation Committee’s assessment of the level of performance that shareholders would likely consider superior in view of the economic outlook for Greenbrier and its industryindustry. EBITDA and EPS targets for fiscal 2023 were set higher than the level of EBITDA and EPS achievement in particular.fiscal 2022. A comparable process is usedwas carried out to establish the threshold or minimum performance level, defined as the level of financial performance below which no incentive payment is appropriate.
In fiscal 2021, the Compensation Committee established a retirement date of September 1, 2023, and a transition arrangement with Mr. Centurion. The arrangement included an incentive to accomplish specific pre-determined goals, covering the transition period, to ensure a seamless manufacturing leadership transition while also navigating the ongoing effects of COVID-19, ramping up production activity in North America and managing through supply chain issues and talent shortages. As part of this agreement, Mr. Centurion had the opportunity to earn
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additional short-term incentive compensation in fiscal 2022 tied to specific, pre-established performance milestones that addressed operational improvements in North America, implementations of the North American manufacturing system in Europe and talent pipeline and succession placements. The threshold payout is 75% of the target bonus of 105% and a maximum payout of 200% of target. Mr. Centurion’s performance resulted in achievement of 101.1% of the target bonus amount.
Target Setting for Financial Metrics (80%)
For fiscal 2022, achievement of Earnings Per Share (EPS) comprised 40% of each NEO’s total annual incentive and EBITDA made up 40%. Our philosophy is to incentincentivize management in both strong and weak markets. Our fiscal 2023 EBITDA and EPS goals are reflective ofreflected how our business cycle was impacted by emerging the ongoing recovery from COVID-19 variants and the related supply chain disruptions, continuedas well as from the economic uncertainty amidst aand the backdrop of slowly improving demand in the freight rail market. Threshold goals continue to reflect a reduced payout percentage of 50%, down from 75% in prior years.
The Compensation Committee balances annual incentive target setting with the need for retention of talent across the organization especially as the long-term incentive plan metrics were not adjusted to reflect the impact of the COVID-19 pandemic and resulting economic volatility. The following table sets forth the financial metricsEPS and EBITDA goals under the fiscal 20222023 annual incentive plan.
2022 Annual Incentive Goals
($ in millions except per share amounts)
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Threshold (Minimum)
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Achievement below threshold results in no payout.cash bonus opportunity. Payout amounts are interpolated between threshold and target, orand between target and maximum, as appropriate.maximum.
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Threshold (Minimum) | $175 | $ | 1.33 | 50 | % | |||||||
Target (Goal) | $250 | $ | 1.90 | 100 | % | |||||||
Maximum | $375 | $ | 3.00 | 200 | % | |||||||
Achievement below threshold results in no payout. After the conclusion of fiscal 2023, the Compensation Committee evaluated our performance against the EPS and EBITDA is a non-GAAP financial measuretargets and determined that management believes is helpful in evaluating our financial performance. See Appendix Bwe achieved $2.97 for a reconciliation of this measure to the most comparable GAAP measure.EPS and approximately $340.3 million for EBITDA.
Strategic Goals (20%)
For fiscal 2022,2023, achievement of strategic goals made up 20% of each NEO’s total annual incentive award opportunity as detailed on page 22. The Compensation Committee determines the level of achievement of strategic goals for all executive officers (including NEOs) as a group, on a scale of 0 – 150%.
LONG-TERM PERFORMANCE EQUITY AWARDS
Process for Granting Awards
Grants are made in October following the close of the priorannual bonus opportunity, and the goals were focused on three primary areas: strategic evaluation of our global business capacity footprint, successful launch and management of a European leasing business, and development and implementation of a short-term energy and greenhouse gas reduction strategy. After the conclusion of fiscal year, approval of the program for the coming fiscal year and approval by2023, the Compensation Committee evaluated our performance against the strategic goals, and determined that the strategic goals were achieved at 137.5% of the equity pool for grants. We grant RSUs to NEOs at the same time we grant them to other members of management.
The value of the annual long-term incentive awards to each NEO is divided between two types of equity-based awards: time-based RSUs and performance-based RSUs. The weighting of RSU grants is 60% performance-based, measured over a three-year measurement period and 40% time-based, vesting ratably over three years for all NEOs with the exception of Mr. Furman’s award, which was 70% performance-based and 30% time-based. Of Mr. Furman’s 70% performance-based RSUs, 75% are tied to Company financial metrics and the remaining 25% are tied to CEO succession objectives. The 30% time-based RSUs and the performance-based RSUs that vested based on achievement of CEO succession objectives vested September 1, 2022, the date on which Mr. Furman’s employment ended following his retirement as an executive officer on August 31, 2022.
We may make off-cycle or one-time grants to newly hired executives or to NEOs in connection with significant increases in responsibilities, promotions or special circumstances as approved by the Compensation Committee.target. In fiscal 2022 there were no off-cycle or one-time grants made to NEOs.
To ensure responsible use of shares under our equity program,reaching its determination, the Compensation Committee approvestook note of, among other things, the following fiscal 2023 achievements: execution of a pool for each annual RSU grant with assistance from Mercer, our independent compensation consultant. We consider our actual burn rate, a reasonable multiplier based on share price volatilitycost and current availabilitycapacity restructuring plan in Romania; reduction of shares under our stock incentive plan.
In determining the specific number of RSUs to be granted to individuals, the intended valueseveral thousand euros per wagon in production costs; significant mitigation impact of the award was convertedUkrainian war through renegotiation of existing contracts; strategic evaluation of our North America production capacity and optimal production structure; origination and syndication of several hundred leases for railcars in Europe for fiscal 2023 and into fiscal 2024; continued progress toward new leasing and management infrastructure launch in early fiscal 2024; and completion of a numberpilot renewable energy project in Central Mexico with average monthly production of shares by dividingjust over 67,000 kW hours.
In accordance with the value bypayout multiples described above, the prior 30 trading day average closing market price of the Company’s Common Stock as reported on the NYSE measured from the day prior to the date of grant of the award. Grants awardedCompensation Committee approved bonus payments to the NEOs in an amount that resulted in a total fiscal 20222023 bonus payment for each NEO equaling 175.3% of the NEO’s respective fiscal 2023 target annual cash bonus opportunity. The actual fiscal 2023 annual bonus payments for the NEOs are detailedpresented in the GrantsSummary Compensation Table under the “Non-Equity Incentive Plan Compensation” column.
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Threshold (Minimum) | $ | 175 | $ | 1.33 | 50 | % | ||||||
Target (Goal) | $ | 250 | $ | 1.90 | 100 | % | ||||||
Actual | $ | 340.3 | $ | 2.97 | 175.3 | %(1) | ||||||
Maximum | $ | 375 | $ | 3.00 | 200 | % | ||||||
| (1) | Includes 137.5% of target for the strategic goal portion (weighted 20%) of the annual bonus opportunity. |
EBITDA for purposes of Plan-Based Awards in Fiscal 2022 table on page 36.
Dividends Paid Only on Vesting
the annual cash bonus plan is a non-GAAP financial measure. We defined it as net earnings before interest and foreign exchange, income tax expense, depreciation and amortization, and the impact associated with items we do not paydividends on unearned time-basedbelieve are indicative of our core business or performance-based RSUs.which affect comparability, such as asset disposal and exit related costs.
Award TypesEPS for purposes of the annual cash bonus plan is a non-GAAP financial measure. We defined it as diluted earnings per common share before the impact associated with items we do not believe are indicative of our core business or which affect comparability, such as asset disposal and How Each Fits our Programexit related costs.
Time-Based RSUs
Time-based RSUs are designed to create long-term shareholder value and to retain highly qualified leaders. Time-based RSUs
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THE GREENBRIER COMPANIES
2023 Proxy Statement
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generally vest annually inLONG-TERM EQUITY AWARDS
The most significant component of our NEO compensation program is long-term equity awards. These equity awards focus the formefforts of Company common stock over a three-year period beginningour NEOs on the first anniversary followingachievement of long-term objectives and align the dateinterests of our executive officers with those of our shareholders. The value delivered by the grant.equity awards is dependent on our stock price performance, and it is maximized when the Company achieves strong long-term performance. In fiscal 2022, we made two exceptions to vesting2023, these equity awards consisted of time-based RSUs in the grants to Mr. Furman and Mr. Centurion in conjunction with their planned retirements as detailed in the Executive Compensation Tables. Mr. Furman’s time-based RSUs vested in full on September 1, 2022, the date on which Mr. Furman’s employment following his retirement as an executive officer on August 31, 2022. Mr. Centurion’s time-based RSUs will vest in full on September 1, 2023, the date on which Mr. Centurion’s employment will end following his retirement as an executive officer on August 31, 2022.PSUs.
Performance-Based RSUs
Performance-based RSUs are designed to focus attention on, and to reward the achievement of, our long-term financial objectives and sustained appreciation in shareholder value. As described in more detail below, in response to shareholder feedback, in fiscal 2023 we transitioned to a PSU program with a rTSR performance metric (as opposed to a rTSR modifier). We believe that the fiscal 2023 PSUs directly link a significant portion of our NEOs’ target total direct compensation to our stock price performance. At the end of thea three-year performance period, a percentage ranging from 0% to 200% of the target number of sharesPSUs initially awarded will be earned based on the extent to which the three-year goals are achieved. For awards granted through fiscal 2022, the resulting payout may be increased or decreased by 10% based on relative TSR performance (i.e., a 100% achievement could become 110% or 90%). The TSR modifier is used if Greenbrier is in the top three or bottom three performers at the end of the three-year measurement period amongbegins on September 1 and ends on August 31.
The Compensation Committee approved the compensation peer group for the yearfiscal 2023 awards in which the award is granted. There was no Performance-Based payout in fiscal 2022 and therefore no TSR modifier was applied.
The valueOctober 2022. Approximately 60% of each performance RSU equals the price of one share of our common stock on the date of grant, with payment of earned performance RSUs madeNEO’s target fiscal 2023 equity awards was in the form of Greenbrier common stock.PSUs and approximately 40% was in the form of RSUs.
We do not pay dividends on unearned RSUs or PSUs. The three-year measurement period beginningtarget value of the awards intended to be delivered to each NEO was converted into a number of RSUs and target PSUs based on September 1the trailing 30-day average price of a share of our Common Stock. The amount of RSUs and ending on August 31 was chosenPSUs (including minimum, target and maximum potential payouts) granted to coincide with our fiscal year.
Based on shareholder feedback, we have restructured the program forNEOs in fiscal 2023 are disclosed in the Grants of Plan-Based Awards in fiscal 2023 table on page 37.
Together, RSUs and PSUs are important tools to includemotivate and retain our highly valuable executive officers, since the value of the awards is delivered to our executive officers over three-year periods, generally subject to their continued service. We may modify our equity award program from one fiscal year to the next, including performance targets, for our executive officers, including our NEOs, to continue to maintain a weighted relative TSR metric rather than a modifier.strong alignment of their interests with the interests of our shareholders.
Target Setting of FinancialFiscal 2023 PSU Performance Metrics
Our targetprocess for setting process,performance metrics, conducted at the beginning of each three-year performance period, includes goals related to profitability and return on invested capital while taking into account the cyclical nature of our business. Our targets are designed to incent behavior that enhances long-term shareholder value at all points in the business cycle.
The Compensation Committee typically grants equity awards to NEOs during its regularly scheduled meeting early in the fiscal year. However, the timing of this approval may be changed in the event of extraordinary circumstances, including in connection with mid-year promotions and new-hires. The Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information. Similarly, the Compensation Committee does not time the release of material nonpublic information based on equity award grant dates.
We generally establish our objectives depending on where we are in the business cycle. When backlog and demand are high and asset
prices strong, we generally emphasize earning a higher return. When the market is weak and prices are under pressure, we generally emphasize making prudent decisions related to production capacity and other considerations, as well as investments at attractive prices, over attempting to earn unrealistic short-term returns. Making intelligent decisions at the right points in the cycle allows us to increase shareholder value over the long term by protecting our core business and market share. When appropriate and supported by the underlying economic conditions and market demand, the Compensation Committee will increase or decrease targets year-over-year to properly incent management.
The Compensation Committee selected EBITDA, ROIC and ROICrTSR as the metrics for performance RSUs granted in fiscal 2022 for the 2022 – 2024 performance period with a relative TSR modifier to continue to focus on alignment of total shareholder return and executive compensation. As noted above, the Committee has modified the program for fiscal 2023 to include aPSUs, weighted relative TSR metric, rather than a modifier, as a result of shareholder feedback.
Weighting of the metrics for the fiscal 2022-2024 award is 80% for EBITDA,60%, 20% and 20% for ROIC to emphasize cash flow generation and earnings. Achievement below threshold results in no payout for the respective metric.respectively, as follows:
Target EBITDA was set at $850 million and target ROIC at 10% for the fiscal 2022 – 2024 performance period. The EBITDA target was set higher than the previous year target, while the ROIC target was unchanged. Both targets reflect an anticipated, but slow, recovery from the lingering effects of the COVID-19 pandemic, supply chain disruptions, talent shortages and the war in Ukraine.
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| EBITDA (in millions) | ROIC | rTSR | Payout | ||||||||||||
Threshold (Minimum) | $ | 600 | 6 | % | 25th %tile | 50 | % | |||||||||
Target (Goal) | $ | 900 | 10 | % | 50th %tile | 100 | % | |||||||||
Maximum | $ | 1,200 | 15 | % | 75th %tile | 200 | % | |||||||||
Achievement below threshold results in no payout for the respective metric. Payout amounts are interpolated between threshold and target, orand between target and maximum performance levels, as appropriate. Vesting is independent for each performance criteria.
TheAs in previous fiscal years, the Compensation Committee reviewed the use of EBITDA as a metric in both short-the annual bonus and long-term compensation awards.performance equity programs. We continue to believe that EBITDA is an important measure for incenting both short-termindicator of our operating performance and long-term performance results and correlates with increased shareholder value. This coupled with the ROIC and a relative TSR metric provide alignment with stakeholders.
Mr. Furman’s performance award granted in fiscal 2022 was structured such that 75% of the performance RSUs are subject to the financial performance metrics noted above and 25% are tied to CEO succession objectives.
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correlates with increased shareholder value. We believe that ROIC is a meaningful overall measure of our business performance because it reflects our performance relative to our investments. In response to shareholder feedback, the fiscal 2023 PSU program includes an rTSR performance metric (as opposed to an rTSR modifier). We continue to believe that rTSR is a meaningful measure of shareholder value creation.
The Compensation Committee selected the S&P 600 Index for the rTSR metric given its representation of our industry peers and that it is challenging relative to other potential benchmark indices. The Compensation Committee further believes that the S&P 600 Index is a proxy to measuring a broad and consistent group of companies that will experience similar market influences as the Company over the cycle of the PSU performance period.
Fiscal 2021 PSU Program Payout
As disclosed in our proxy statement for our 2021 Annual Meeting and shown in the table below, the fiscal 2021 PSU program included EBITDA and ROIC goals over a 3-year performance period. The Compensation Committee selected EBITDA and ROIC as the metrics for performance grants in the fiscal 2021 annual PSU program with a relative TSR modifier to continue to focus on alignment of total shareholder return and executive compensation. Weighting of the metrics for the fiscal 2021 award was 80% for EBITDA, and 20% for ROIC to emphasize cash flow generation and earnings. Achievement below threshold would have resulted in no payout for the respective metric. The payout could have been increased or decreased by 10% based on relative TSR performance. The relative TSR modifier would have been used if the Company was in the top three or bottom three among the peers at the end of the 3-year measurement period. The target EBITDA and ROIC goals, and actual performance results, are set forth in the table below:
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| EBITDA (in millions) | ROIC | Payout | |||||||||
Threshold (Minimum) | $ | 500 | 6 | % | 50 | % | ||||||
Actual | $ | 716.8 | 6.1 | % | 79.2 | % | ||||||
Target (Goal) | $ | 800 | 10 | % | 100 | % | ||||||
Maximum | $ | 1,200 | 15 | % | 200 | % | ||||||
At the end of fiscal 2023, the Compensation Committee determined that actual achievement of EBITDA was equal to 86.1% of target and actual achievement of ROIC was 51.3% of target. The TSR modifier was not applicable. Payout amounts were interpolated between threshold and target.
EBITDA for purposes of the PSUs is a non-GAAP financial measure. We defined it as net earnings before interest and foreign exchange, income tax expense, depreciation and amortization, and the impact associated with items we do not believe are indicative of our core business or which affect comparability, such as asset disposal and exit related costs.
ROIC for purposes of the PSUs is a non-GAAP financial measure. We defined it as the average annual net operating profit after cash taxes for the measurement period divided by the average invested capital for the four annual periods beginning from the last day of the prior fiscal year through the last day of the measurement period, excluding the impact associated with items we do not believe are indicative of our core business or which affect comparability, such as asset disposal and exit related costs.
EMPLOYEE BENEFITS
Executive Retirement and Insurance BenefitsNonqualified Deferred Compensation Plan
Supplemental Retirement Benefits
The Company maintains a Nonqualified Deferred Compensation (NQDC) Plan that permits participants, including our NEOs, to elect to defer a portion of their compensation, in excess of amounts that may be deferred under the Company’s tax-qualified 401(k) plan, and to defer receipt ofincluding shares of stock or cash awarded under the Company’s long-term incentive plan.cash. The NQDC Plan does not pay or provide for preferential or above-market earnings. Participants may directAmounts deferred under the plan are credited with hypothetical and/or actual earnings based on participant investment of deferred cash compensation credited to their accountselections made from among a range of investment options similar to those available under the Company’s 401(k) Plan; shares of Company stock deferred under the NQDC Plan may be diversified into other investments. The Company’s executive officers, including its NEOs, are eligible to defer a portion of their compensation under the NQDC Plan. Mr.plan. Messrs. Downes, Comstock and Mr. DownesKrueger elected to participate in the NQDC Plan in fiscal 2022;2023; none of the other NEOs elected to defer any portion of their fiscal 20222023 cash or equity compensation under the NQDC Plan.
The Company has made discretionary employer contributions on behalf of Mr. Centurion under the target benefit component of its NQDC Plan, which has been discontinued for new participants. Target benefit contributions were designed to provide supplemental retirement benefits to the participating executives in an amount equal to 50% of the executive’s base salary as of age 65 for 15 years. Mr. Centurion has reached age 65 and is no longer eligible to receive employer contributions under the target benefit plan.
The Company makes discretionary contributions under the supplemental retirement program component ofto the NQDC Plan on behalf of executives who do not participate in the target benefit program, including Messrs. Furman, Comstock and Downes and Ms. Tekorius. Such contributions are credited to a Supplemental Retirement Program account on their behalf under the NQDC Plan.participants. In January 2022,2023, the Compensation Committee approved discretionary contributions equal to 6% of participants’ annual base salary earned plus actual bonus earned, in each case for the prior calendar year.
Executive Life Insurance
The Company provides an executive life insurance program to its executive officers and certain other management employees. The Company owns life insurance policies ensuring the executives’ lives and has endorsed the rights to the death benefits to the
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participating executives. Upon termination of the executive’s employment, the Company will transfer ownership of the policy to the executive, resulting in taxable income to the executive at
the time of transfer. Each NEO other than Mr. Furman, participates in the executive life insurance program, and each has an aggregate death benefit amount of $1 million (including previous executive-owned life insurance policies for which no further Company funding is provided) and a target aggregate after-tax cash surrender at age 62. Mr. Centurion’s policy has a value of $200,000 and Ms. Tekorius has a target aggregate after-tax cash surrender value of $125,000. Mr. Comstock and Mr. Downes have no target after-tax cash surrender value.million.
Perquisites and Other Personal Benefits
The Company maintains a program of certain perquisites for NEOs includingNEOs. In early fiscal 2023, the useCompany discontinued the provision of Company-owned automobiles or automobile allowances, payment of club membership dues, spousal travel benefits, security for international travel, executive medical benefits, and, if applicable, relocation services for executives. Under his employment contract, Mr. Furman received additional retirement-related perquisites that include the use of a remote office near his primary residence in Nevada for an additional two years, the transfer to him of title of a company-owned automobile, and payment of executive medical insurance and benefits for an additional two years. The aggregate value of total perquisites and other benefits for NEOs in fiscal 2022 was $570,594. Excluding Mr. Furman’s retirement benefits, perquisites were $244,646. Please see the Perquisites and Personal Benefits for Fiscal 2022 table and William A. Furman – Retirement Perquisites and Personal Benefits table on page 36 for additional detail. allowances. The Company continues to not provide tax gross-ups for perquisites or personal benefits and no longer entersmaintains employment agreements.agreements with NEOs. We regularly evaluate our perquisite program balancing employment retention challenges and our own industry practices.
Change-of-Control Agreements—Double TriggersThe Company provides employee benefits to all eligible employees in the United States, including our NEOs, which the Compensation Committee believes are reasonable and consistent with its overall compensation objective to better enable us to attract and retain highly talented employees. Our NEOs are eligible to participate in these benefit plans and programs, including, medical, dental, vision, group life, disability and accidental death and dismemberment insurance and a 401(k) plan with a matching contribution component, on the same basis as other full-time employees.
Termination and Change of Control Provisions
We have entered into agreements with our NEOs that provide certain benefits if employment is terminated followingin connection with or within 24 months after a change of control (“COC”). This protectionThe COC agreements are “double-trigger” agreements, meaning that benefits are payable only if a COC occurs and an executive’s employment is providedinvoluntarily terminated (including due to ensuredeath, disability and a resignation by the NEO for “good reason”).
In addition, our 2017 Amended and Restated Stock Incentive Plan (“2017 A&R Plan”) and 2021 Stock Incentive Plan and the related award agreements provide for full accelerated vesting of restricted stock and RSU awards upon termination of an NEO’s employment due to death or disability (with performance-based awards vesting at the target level). In the event of a COC in which equity awards are not converted, assumed, substituted or replaced, all restricted stock and RSU awards will vest in full (with performance-based awards vesting based on actual achievement and, for performance-based awards granted after 2020, prorated for the duration of the performance period prior to such COC).
NEOs who have deferred a portion of their compensation under our NQDC Plan may be entitled to payment of deferred amounts upon a termination of employment or a COC, depending on the NEO’s deferral elections and payment triggering events.
We believe that these protections serve our retention objectives by permitting our NEOs to maintain continued focus and dedication to their responsibilities in order to maximize shareholder value, including in the event of a transaction that could result in a COC of the Company. We believe that these protections promote the stability, continuity and impartiality of our executives in a COC situation. The level of protection is intended to be similar to that provided by similarly sized organizations.
The COC agreements are “double-trigger” agreements, meaning that benefits are payable only if a COC occurs and an executive’s employment is terminated, or constructively terminated.
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GOAL SETTING FOR FISCAL 2023
Looking forward to fiscal 2023,2024, we continue to focus on shareholder alignment and our commitment to pay-for-performance.
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• Continuing an EBITDA metric, which accounts for 40% of the payout weighting
• Strategic goals,
• EBITDA and EPS targets were set higher than
| • For PSUs, EBITDA, ROIC, and rTSR performance metrics, with 60%, 20% and 20%, respectively of the payout weighting
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• Utilizing EBITDA and ROIC to
• EBITDA target is higher and ROIC is the same as the prior targets set in fiscal | ||
PEER GROUP
Greenbrier’s fiscal 2022 compensation program referred to the 16 companies listed below. The Compensation Committee relies on Mercer, our independent compensation consultant, to periodically review and recommend changes to our peer group for approval. Mercer performs this review and makes recommendations annually, providing substantial detail and support to the Compensation Committee for consideration. For fiscal 2023, the Compensation Committee removed Meritor, as it was acquired by Cummins Inc. Our fiscal 2022 peer group is:
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Peer group companies are chosen based on whether they are in a comparable industry, have comparable revenue or market capitalization or compete with Greenbrier for executive talent. The current peer group includes companies in the following sectors: railcar manufacturing; heavy manufacturing; other related manufacturing; after-market products; transportation services; and high-value equipment leasing. Annual revenues of the peer group companies range from approximately one-third to three times Greenbrier’s annual revenue, with Greenbrier approximating the peer group median revenue size.
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COMPENSATION GOVERNANCE
Stock Ownership and Stock RetentionSTOCK OWNERSHIP AND STOCK RETENTION
The Company has stock ownership guidelines for its executive officers, including the NEOs, under which all executive officers of the Company are expected to retain holdings of Company stock with(with a value equal to a multiple of base salary ranging from onethree to six times base salary. The guidelines are 6.0xsalary for CEO and 3.0x for NEOs.NEOs). The applicable multiple depends on the executive officer’s position with the Company, as set forth below.
Named Executive Officer | Stock Ownership Target as a Multiple of Salary | In
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EVP, | 3.0x | Yes | ||||||||
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SVP, | 3.0x | Yes | ||||||||
Executive officers are expected to achieve compliance with the applicable guidelines within five years of the date of adoption of the guidelines or appointment as an executive officer, whichever is later. They are encouraged to retain ownership of shares representing at least 50% of the after-tax value acquired through compensatory stock awards until the guidelines are met. Shares that count towards satisfaction of the guidelines include shares covered by unvested RSUs. Shares subject to unexercised options, unvested PSUs and shares subject to future sales in a 10b5-1 plan do not count towards satisfaction of the guidelines. All of our executive officersNEOs have satisfied, or are on track to meet, the executive stock ownership expectation.
Incentive Compensation Claw-Back PolicyINCENTIVE COMPENSATION CLAWBACK POLICY
The Company has adopted a stand-alone incentive compensation claw-back policy intended to comply with the requirements ofAs required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Theof 2010 (Dodd-Frank Act), we maintain a clawback policy, applies to all executive officers designated as such by the Board and to all incentive-based compensation granted or paid by the Company, including cash and stock. The Dodd-Frank Actwhich requires companies to adopt a policy that will recapture (“claw-back”) excesscertain incentive compensation paid to any current or former executive officer, including our NEOs, will be subject to recoupment if (x) the incentive compensation was calculated based on financial statements that were required to be restated due to material noncompliance with financial reporting requirements, without regard to any fault or misconduct, and (y) that noncompliance resulted in overpayment of the incentive compensation within the three fiscal years preceding the fiscal year in which the restatement was required. Incentive compensation subject to the clawback policy consists of compensation that is paid to certain executivesgranted, earned or vested based on erroneouswholly or in part upon the attainment of a financial statements and mandatesreporting measure (as defined in the SEC to issue rules implementing the claw-back requirements. Although the SEC has not yet promulgated final rules implementing the Dodd-Frank claw-back requirements, in 2013 the Company determined to adopt a claw-back policy in light of concerns expressed by shareholders about the lack of a claw-back policy,such requirement), including stock price and the SEC’s delay in adopting final rules.
Policies Regarding Hedgingtotal shareholder return, on and Pledging of Company Stockafter October 2, 2023.
HEDGING AND PLEDGING OF COMPANY STOCK
The Company’s Policy Regarding Trading in Company Securities prohibits its directors, executive officers, including the NEOs, and employees from hedging the economic risk of owning shares of Company stock (including engaging in short sales, trading in or writing options on Company securities, or entering into other hedging transactions, including, but not limited to, prepaid variable forward contracts, zero-cost collars, equity swaps or exchange funds). The policy also restricts directors and executive officers from holding Company stock in a margin account, or pledging Company stock as collateral for a loan, except in very limited circumstances (not including margin debt) with advance approval of the Board Chair and CEO. No such approvals have been given to date.
Compensation Committee’s Independent ConsultantREGULATORY CONSIDERATIONS
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Generally, Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), disallows a tax deduction to certain publicly-held corporations for any remuneration in excess of $1 million paid in any taxable year to their chief executive officer, chief financial officer, and Compensation Consultant’s Role
certain other current and former highly compensated officers that qualify as covered employees within the meaning of Section 162(m) of the Code. The Compensation Committee has sole authority to retainpreviously considered tax deductibility when structuring our executive compensation arrangements for our current and terminate independent consultants, counsel, experts and other personnel the Committee deems necessary to enable it to fully perform its duties and fulfill its responsibilities, and to determine the compensation and other terms of engagement for such consultants and experts. Pursuant to the Compensation Committee’s Charter,former executive officers. However, the Compensation Committee may, delegatein its judgment, pay compensation that is not fully tax deductible to its chairthe extent it determines that doing so is appropriate to attract and retain executive talent or to one or more of its members the responsibility for performing routine functions. There are nomeet other express provisions in the Charter delegating Compensation Committee authority to any other person.
business needs. The Compensation Committee engaged Mercerintends to provide information, analysiscontinue to compensate our current and advice regardingformer executive officers, including the NEOs, in a manner consistent with our best interests and director compensation. Mercer provided the following services for the Compensation Committee during fiscal 2022: (i) advice on 2022 executive officer bonus program structure, performance goals and targets, and bonus amounts; (ii) advice on 2022 executive officer equity grant award sizes and performance goals and targets; (iii) market data and recommendations on executive officer compensation; (iv) advice on equity retention policies and holding requirements after vesting; (v) advice on updating the Company’s peer group companies; and (vi) ongoing advice regarding the Company’s executive compensation practices to advise whether any such practices should be modified to improve effectiveness or to implement “best practices.”best interests of our shareholders.
During fiscal 2022, aggregate fees paid to Mercer for executive compensation services to the Company were approximately $235,000. In addition, Mercer or its affiliates provided services to the Company for casualty consulting, general insurance, actuarial analysis of workers compensation, retirement consulting and salary studies. The aggregate fees for such additional services were approximately $440,325. The decision to engage Mercer or its affiliates to provide these other services was made by management and was reported to the Compensation Committee.
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TAXATION OF “PARACHUTE” PAYMENTS AND DEFERRED COMPENSATION
We do not provide our NEOs with a “gross-up” or other reimbursement payment for any tax liability that the NEO might owe as a result of the application of Sections 280G, 4999, or 409A of the Code. Sections 280G and 4999 of the Code provide that executive officers, directors who hold significant equity interests in our Company, and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change of control of our Company that exceeds certain prescribed limits, and that the Company, or a successor, may forfeit a deduction on the amounts subject to this additional tax. Section 409A of the Code also imposes additional significant taxes on an executive officer, director or other service provider to the Company in the event that he or she receives “deferred compensation” that does not meet certain requirements of Section 409A of the Code.
ACCOUNTING FOR STOCK-BASED COMPENSATION
We follow the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 for our stock-based awards. FASB ASC Topic 718 generally requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options, restricted stock unit awards and performance unit awards (including PSUs), based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below for equity awards to our NEOs as required by the applicable SEC rules. FASB ASC Topic 718 also generally requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that the recipient of such compensation is required to render service in exchange for the option or other award. For performance unit awards (including PSUs), stock-based compensation expense recognized may be adjusted over the performance period based on interim estimates of performance against pre-set objectives.
COMPENSATION RISK ASSESSMENT
The Compensation Committee, with the assistance of Mercer, assesses and considers potential risks when reviewing and approving our compensation programs, policies and practices for our executive officers, including our NEOs, and our employees. We designed our compensation programs, including our incentive compensation plans, with features to address potential risks while rewarding employees for achieving financial and strategic objectives through prudent business judgment and appropriate risk taking. Based on its assessment, the Compensation Committee believes that any risks arising from our compensation programs do not create risks that are reasonably likely to have a material adverse effect on us.
COMPENSATION COMMITTEE REPORT
As required by Item 407(e)(5) of Regulation S-K, the Compensation Committee reviewed and discussed with the Company’s management the above section entitled “Compensation Discussion and Analysis” prepared by the Company’s management as required by Item 402(b) of Regulation S-K. Based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended August 31, 2023.
Thomas B. Fargo, Chairman
Graeme A. Jack
Wendy L. Teramoto
Kelly M. Williams
Mr. Huffines and Mr. Ottensmeyer each joined the Compensation Committee in October 2023 and thus did not contribute to this Compensation Committee Report or the matters discussed herein.
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The Compensation Committee has analyzed whether our compensation consultant, Mercer, is independent, and whether Mercer’s work as a compensation consultant has raised any conflicts of interest, taking into consideration the following factors: (i) the provision of other services to the Company by Mercer; (ii) the amount of fees from the Company paid to Mercer as a percentage of Mercer’s total revenue; (iii) the policies and procedures of Mercer that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Mercer or the individual compensation advisors employed by Mercer with an executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors employed by Mercer with any member of the Compensation Committee; and (vi) any stock of the Company owned by Mercer or the individual compensation advisors employed by Mercer. The Compensation Committee has determined, based on its analysis in light of the factors listed above, that Mercer is independent, and the work of Mercer and the individual compensation advisors employed by Mercer as compensation consultants to the Company has not created any conflicts of interest.
ROLE OF MANAGEMENT
The Compensation Committee consults with our CEO and our Chief Human Resources Officer (CHRO), when making compensation decisions. Typically, our CEO and CHRO engage with other members of our management team to gather information on corporate and individual performance and their
perspective and recommendations on compensation matters. Our CEO makes recommendations to the Compensation Committee regarding compensation matters, including the compensation of our other executive officers. The Compensation Committee uses these recommendations as one of several factors in making compensation decisions, and those decisions do not necessarily follow the CEO’s recommendations.
REGULATORY CONSIDERATIONS
The Compensation Committee considered the tax and accounting consequences of using various forms of compensation and retains the discretion to pay compensation that is not tax deductible or could have adverse accounting consequences for Greenbrier.
Tax Deductibility of Executive Compensation
Our incentive compensation programs have been designed and administered in a manner generally intended to preserve income tax deductions. Section 162(m) generally limits to $1 million per person the amount that the Company can deduct for compensation paid to certain “covered employees” (as defined in Section 162[m]). Although the Company generally considers tax deductibility when structuring our executive compensation arrangements, we may pay compensation that is not tax deductible to the extent we determine that doing so is appropriate based upon business needs.
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SUMMARY COMPENSATION TABLE FOR FISCAL 20222023
Name and Principal Position | Year | Salary ($) | Bonus | Stock Awards(1) ($) | Non-equity Incentive Plan Compensation(2) ($) | All Other Compensation(3)(6) ($) | Total ($) | ||||||||||||||||||||||||||||||||
William A. Furman | 2022 | 800,000 | — | 3,257,308 | (4) | 1,987,545 | 588,822 | 6,633,675 | |||||||||||||||||||||||||||||||
Executive Chairman | 2021 2020 | | 800,000 945,833 | | — — | | 3,421,997 4,827,285 | | 1,136,016 808,266 | | 222,216 263,402 | 5,580,229 6,844,786 | |||||||||||||||||||||||||||
Lorie L. Tekorius | 2022 | 800,000 | — | 1,666,024 | 1,382,640 | 127,742 | 3,976,406 | ||||||||||||||||||||||||||||||||
Chief Executive Officer and | 2021 2020 | | 675,000 625,000 | | — — | | 1,638,078 2,749,066 | | 666,792 549,094 | | 116,218 130,790 | 3,096,088 4,053,950 | |||||||||||||||||||||||||||
Alejandro Centurion | 2022 | 633,333 | — | 1,325,480 | 1,714,782 | (5) | 102,128 | 3,775,723 | |||||||||||||||||||||||||||||||
Executive Vice President | 2021 2020 | | 620,000 620,000 | | — — | | 1,228,576 1,110,269 | | 1,286,376 492,825 | (5) | | 328,051 368,132 | 3,463,003 2,591,226 | ||||||||||||||||||||||||||
Brian J. Comstock | 2022 | 562,500 | — | 1,110,684 | 879,582 | 115,041 | 2,667,807 | ||||||||||||||||||||||||||||||||
Executive Vice President, | 2021 2020 | | 506,667 445,000 | | — — | | 982,847 832,719 | | 452,839 335,104 | | 85,756 90,099 | 2,028,109 1,702,922 | |||||||||||||||||||||||||||
Adrian J. Downes | 2022 | 508,333 | — | 527,594 | 711,209 | 66,221 | 1,813,357 | ||||||||||||||||||||||||||||||||
Senior Vice President, | 2021 2020 | | 458,333 425,000 | | — — | | 491,424 416,343 | | 366,520 284,483 | | 58,630 56,738 | 1,374,907 1,182,564 | |||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Stock Awards(1) ($) | Non-equity Incentive Plan Compensation(2) ($) | All Other Compensation(3) ($) | Total ($) | ||||||||||||||||||
LORIE L. TEKORIUS Chief Executive Officer and President | 2023 | 900,000 | 2,819,190 | 1,735,470 | 184,821 | 5,639,481 | ||||||||||||||||||
| 2022 | 800,000 | 1,666,024 | 1,382,640 | 127,742 | 3,976,406 | |||||||||||||||||||
| 2021 | 675,000 | 1,638,078 | 666,792 | 116,218 | 3,096,088 | |||||||||||||||||||
ADRIAN J. DOWNES Senior Vice President, Chief Financial Officer | 2023 | 525,000 | 702,254 | 782,276 | 90,503 | 2,100,033 | ||||||||||||||||||
| 2022 | 508,333 | 527,594 | 711,209 | 66,221 | 1,813,357 | |||||||||||||||||||
| 2021 | 458,333 | 491,424 | 366,520 | 58,630 | 1,374,907 | |||||||||||||||||||
BRIAN J. COMSTOCK Executive Vice President, | 2023 | 591,667 | (4) | 1,230,202 | 985,332 | 103,975 | 2,911,176 | |||||||||||||||||
| 2022 | 562,500 | 1,110,684 | 879,582 | 115,041 | 2,667,807 | |||||||||||||||||||
| 2021 | 506,667 | 982,847 | 452,839 | 85,756 | 2,028,109 | |||||||||||||||||||
WILLIAM KRUEGER Senior Vice President, | 2023 | 560,000 | 861,138 | 932,596 | 104,917 | 2,458,651 | ||||||||||||||||||
MARTIN R. BAKER Senior Vice President, | 2023 | 465,000 | 645,875 | 733,631 | 87,894 | 1,932,400 | ||||||||||||||||||
| (1) |
|
| (2) | The amounts reported in the |
| (3) | The amounts reported in the |
|
|
|
|
|
ALL OTHER COMPENSATION TABLE FOR FISCAL 2022
Name | Perquisites Personal Benefits ($)(1) | NQ Deferred Compensation Plan Contributions ($)(2) | 401(k) Matching Contributions ($)(3) | Life Insurance ($) | Total ($) | ||||||||||||||||||||
William A. Furman | 457,661 | 131,161 | — | — | 588,822 | ||||||||||||||||||||
Lorie L. Tekorius | 19,234 | 82,008 | 11,600 | 14,900 | 127,742 | ||||||||||||||||||||
Alejandro Centurion | 54,178 | — | 11,600 | 36,350 | 102,128 | ||||||||||||||||||||
Brian J. Comstock | 39,521 | 59,420 | 11,600 | 4,500 | 115,041 | ||||||||||||||||||||
Adrian J. Downes | — | 50,491 | 11,600 | 4,130 | 66,221 | ||||||||||||||||||||
|
|
|
| THE GREENBRIER COMPANIES |
36
FISCAL 2023 EXECUTIVE COMPENSATION
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2023
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
| Estimated Future Payouts Under Equity Incentive Plan Awards(2)
| All Other (#)
| Grant Value of
| |||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||
LORIE L. TEKORIUS | 10-18-22 |
|
|
|
|
|
|
|
|
| 30,705 | 61,407 | 122,814 |
|
|
| 1,751,937 | |||||||||||||||||||
| 10-18-22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 40,938 | 1,067,253 | |||||||||||||||
|
|
|
|
| 396,000 | 990,000 | 1,881,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
ADRIAN J. DOWNES | 10-18-22 |
|
|
|
|
|
|
|
|
| 7,649 | 15,296 | 30,592 |
|
|
| 436,392 | |||||||||||||||||||
| 10-18-22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,198 | 265,862 | |||||||||||||||
|
|
|
|
| 178,500 | 446,250 | 847,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
BRIAN J. COMSTOCK | 10-18-22 |
|
|
|
|
|
|
|
|
| 13,399 | 26,796 | 53,592 |
|
|
| 764,487 | |||||||||||||||||||
| 10-18-22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,864 | 465,715 | |||||||||||||||
|
|
|
|
| 228,000 | 570,000 | 1,083,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
WILLIAM KRUEGER | 10-18-22 |
|
|
|
|
|
|
|
|
| 9,380 | 18,757 | 37,514 |
|
|
| 535,133 | |||||||||||||||||||
| 10-18-22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12,505 | 326,005 | |||||||||||||||
|
|
|
|
| 212,800 | 532,000 | 1,010,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
MARTIN R. BAKER | 10-18-22 |
|
|
|
|
|
|
|
|
| 7,034 | 14,068 | 28,136 |
|
|
| 401,364 | |||||||||||||||||||
| 10-18-22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,379 | 244,511 | |||||||||||||||
|
|
|
|
| 167,400 | 418,500 | 794,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
| (1) | The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards columns reflect potential payments under the annual cash bonus opportunity for NEOs, if performance had been achieved at the threshold, target or maximum performance levels. Actual payments under the annual cash bonus opportunity earned for fiscal 2023 are reported in the Summary Compensation Table. See Compensation Discussion and Analysis above for additional details regarding the annual cash bonus opportunity. |
| (2) | The amounts reported in the Estimated Future Payouts Under Equity Incentive Plan Awards columns reflect payout opportunities of the performance-based RSUs granted under the 2021 Stock Incentive Plan. The performance-based RSUs generally vest at the end of the three-year performance period upon achieving set performance metrics, generally subject to the NEO’s continued service to us. See Compensation Discussion and Analysisabove for additional details regarding the performance-based RSUs. |
| (3) | The amounts reported in this column reflect time-based RSUs granted under the 2021 Stock Incentive Plan, which, other than the time-based RSUs granted to Mr. Baker, generally vest annually over three years in equal installments, subject to the NEO’s continued service to us. Mr. Baker’s time-based RSUs generally vest annually over two years, subject to Mr. Baker’s continued service to us. See Compensation Discussion and Analysisabove for additional details regarding the time-based RSUs. |
| (4) | The amounts reported in the Grant Date Fair Value of Stock Awards column reflect the aggregate grant date fair value of the time-based RSUs granted to our NEOs in fiscal 2023 and the performance-based RSUs granted to our NEOs in fiscal 2023, as computed in accordance with ASC Topic 718, excluding estimated forfeitures. The estimated fair value of performance-based RSUs is calculated based on the probable outcome of the performance measures for the applicable performance period as of the date on which the performance-based RSUs were granted for accounting purposes. Performance-based RSUs include both corporate performance and market-related goals. Consistent with the applicable accounting standards, the grant date fair value of the market-related goal component has been determined using a Monte Carlo simulation model. The assumptions used in the valuation of these awards are consistent with the valuation methodologies specified in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2023. |
|
|
| |||||||||
37
FISCAL 2023 EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AS OF 2023 FISCAL YEAR-END
| Stock Awards
| ||||||||||||||||
Name | Number of Shares that Have Not Vested (#) | Market Value of Shares that Have Not Vested ($)(1) | Equity Incentive Plan or Other Rights (#) | Equity Incentive Plan ($)(1) | ||||||||||||
LORIE L. TEKORIUS | 6,574 | (2) | 279,789 |
|
|
|
|
|
| |||||||
| 9,126 | (3) | 388,403 |
|
|
|
|
|
| |||||||
| 40,938 | (4) | 1,742,321 |
|
|
|
|
|
| |||||||
|
|
|
|
|
|
| 29,586 | (7) | 1,259,180 | |||||||
|
|
|
|
|
|
| 18,481 | (8) | 786,551 | |||||||
|
|
|
|
|
|
|
| 30,705 | (9) | 1,306,805 | |||||||
ADRIAN J. DOWNES | 1,972 | (2) | 83,928 |
|
|
|
|
|
| |||||||
| 2,890 | (3) | 122,998 |
|
|
|
|
|
| |||||||
| 10,198 | (4) | 434,027 |
|
|
|
|
|
| |||||||
|
|
|
|
|
|
| 8,876 | (7) | 377,763 | |||||||
|
|
|
|
|
|
| 5,853 | (8) | 249,104 | |||||||
|
|
|
|
|
|
|
| 7,649 | (9) | 325,541 | |||||||
BRIAN J. COMSTOCK | 3,944 | (2) | 167,857 |
|
|
|
|
|
| |||||||
| 6,084 | (3) | 258,935 |
|
|
|
|
|
| |||||||
| 17,864 | (4) | 760,292 |
|
|
|
|
|
| |||||||
|
|
|
|
|
|
| 17,752 | (7) | 755,525 | |||||||
|
|
|
|
|
|
| 12,321 | (8) | 524,382 | |||||||
|
|
|
|
|
|
|
| 13,399 | (9) | 570,261 | |||||||
WILLIAM KRUEGER | 2,404 | (5) | 102,314 |
|
|
|
|
|
| |||||||
| 4,639 | (3) | 197,436 |
|
|
|
|
|
| |||||||
| 12,505 | (4) | 532,213 |
|
|
|
|
|
| |||||||
|
|
|
|
|
|
| 9,615 | (7) | 409,214 | |||||||
|
|
|
|
|
|
| 6,263 | (8) | 266,553 | |||||||
|
|
|
|
|
|
|
| 9,380 | (9) | 399,213 | |||||||
MARTIN R. BAKER | 2,739 | (2) | 116,572 |
|
|
|
|
|
| |||||||
| 3,802 | (3) | 161,813 |
|
|
|
|
|
| |||||||
| 9,379 | (6) | 399,170 |
|
|
|
|
|
| |||||||
|
|
|
|
|
|
| 12,328 | (7) | 524,680 | |||||||
|
|
|
|
|
|
| 7,701 | (8) | 327,755 | |||||||
|
|
|
|
|
|
|
| 7,034 | (9) | 299,367 | |||||||
| (1) |
Amounts calculated based on the closing price of our common stock on NYSE on August 31, 2023 (the last trading day of our fiscal year), which was $42.56. |
PERQUISITES AND PERSONAL BENEFITS TABLE FOR FISCAL 2022
Name | Vehicle Use or Car Allowance ($) | Spousal Travel ($) | Club Dues ($) | Remote Office Benefit ($) | Other ($)(1) | Retirement Benefits ($)(2) | Total ($) | ||||||||||||||||||||||||||||
William A. Furman | 15,347 | 16,749 | 6,873 | 76,596 | 16,148 | 325,948 | 457,661 | ||||||||||||||||||||||||||||
Lorie L. Tekorius | 13,200 | 990 | 5,044 | — | — | — | 19,234 | ||||||||||||||||||||||||||||
Alejandro Centurion | 13,200 | 36,320 | 4,148 | — | 510 | — | 54,178 | ||||||||||||||||||||||||||||
Brian J. Comstock | 13,200 | 3,151 | 16,682 | — | 6,488 | — | 39,521 | ||||||||||||||||||||||||||||
Adrian J. Downes | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Total: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 570,594 | ||||||||||||||||
|
|
WILLIAM A. FURMAN—RETIREMENT PERQUISITES AND PERSONAL BENEFITS
| Remote Office Benefit Continuation for Fiscal 2023 and 2024 ($) | Transfer of Remote Office Contents ($) | Transfer of Vehicle Title ($) | Executive Medical Benefit Continuation for Fiscal 2023 and 2024 ($) | Medical Insurance Continuation for Fiscal 2023 and 2024 ($) | Total ($) | |||||
| 109,746 | 104,320 | 58,990 | 22,292 | 30,600 | 325,948 | |||||
GRANTS OF PLAN-BASED AWARDS IN FISCAL 2022
|
| Grant |
Possible Future Payouts Under |
| Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other RSUs(2) (#) | Grant RSU | ||||||||||||||
Name | Threshold ($) | Target ($) | Maximum ($) |
| Threshold (#) | Target (#) | Maximum (#) | |||||||||||||
William A. Furman | 10-20-21 | 23,478 | 46,955 | 93,910 | 2,297,038 | |||||||||||||||
10-20-21 | 20,123(4) | 960,270 | ||||||||||||||||||
483,000 | 1,207,500 | 2,294,250 | ||||||||||||||||||
Lorie L. Tekorius | 10-20-21 | 10,267 | 20,534 | 41,068 | 1,012,737 | |||||||||||||||
10-20-21 | 13,690 | 653,287 | ||||||||||||||||||
294,000 | 735,000 | 1,396,500 | ||||||||||||||||||
Alejandro Centurion | 10-21-21 | 8,488 | 16,975 | 33,950 | 785,433 | |||||||||||||||
10-20-21 | 11,317(6) | 540,047 | ||||||||||||||||||
736,250(5) | 1,271,000(5) | 2,480,000(5) | ||||||||||||||||||
Brian J. Comstock | 10-20-21 | 6,845 | 13,690 | 27,380 | 675,191 | |||||||||||||||
10-20-21 | 9,126 | 435,493 | ||||||||||||||||||
204,250 | 510,625 | 970,188 | ||||||||||||||||||
Adrian J. Downes | 10-20-21 | 3,252 | 6,503 | 13,006 | 320,728 | |||||||||||||||
10-20-21 | 4,335 | 206,866 | ||||||||||||||||||
161,500 | 403,750 | 767,125 | ||||||||||||||||||
|
|
|
| (3) |
|
| |||||
|
|
|
Material Terms of Executive Employment Agreements and Other Arrangements
EMPLOYMENT AGREEMENTS
The Company has employment agreements with Messrs. Furman and Centurion. The employment agreements with these NEOs provide for certain payments and benefits in the event the executive’s employment is terminated by the Company without cause. The employment agreements also provide for payments and benefits in the event that the executive is terminated following a change of control of the Company. Details of the payments and benefits triggered by different termination events are discussed and disclosed in tabular format under the heading “Potential Post-Termination Payments,” following the Equity Compensation Plan Information table.
In fiscal 2020, the Board and Mr. Furman amended Mr. Furman’s employment agreement and set a retirement date of September 1, 2022. In fiscal 2021, the Board and Mr. Centurion amended his employment agreement and set a retirement date from his executive officer position of September 1, 2022, and retirement from the Company on September 1, 2023. In fiscal 2022, the Board amended both employment agreements to adjust the effective date of retirement from all executive offices to be August 31, 2022. None of the terms of these agreements was amended to allow multi-year guarantees for salary increases, non-performance-based bonuses or equity compensation, tax gross-ups, single-trigger change of control payments or liberal change of control definitions.
RSU AWARDS
Each RSU represents the right to receive one share of Company stock upon vesting. Except for the award granted in fiscal 2022 to Mr. Furman, 60% of the total RSUs granted are subject to performance-based vesting and 40% are subject to time-based vesting, as described more fully in the Compensation Discussion and Analysis. 70% of Mr. Furman’s RSU award is subject to performance-based vesting and 30% is subject to time-based vesting. Vesting of unvested RSUs will accelerate in the event of termination of the NEO’s employment under certain circumstances, as described below.
ACCELERATION OF RSUS SUBJECT TO TIME VESTING PROVISIONS
All unvested RSUs subject to time vesting provisions (“time-based RSUs”) held by Messrs. Furman, Centurion, Comstock, and Downes and Ms. Tekorius will automatically vest upon death or disability. In addition, all time-based RSUs held by Messrs. Furman and Centurion will immediately vest upon the Company’s termination of the executive other than for “cause” pursuant to
such executives’ individual agreements. RSUs do not accelerate upon COC if they are assumed or continued by the acquiring company. Any time-based RSUs that are not assumed or continued will accelerate and become fully vested upon COC. In the event of a termination of employment during the two-year period following the COC, time-based RSUs held by the executives that were assumed or continued by the acquiring company will accelerate upon the executive’s termination pursuant to the terms of the executive’s employment agreement or change of control agreement, as applicable, as described above.
ACCELERATION OF RSUS SUBJECT TO PERFORMANCE VESTING PROVISIONS
RSUs do not accelerate upon COC if they are assumed or continued by the acquiring company. Any unvested RSUs subject to performance vesting provisions (“performance-based RSUs”) that are not assumed or continued would accelerate and become vested based on actual results measured against performance goals as of the COC. In the event of a termination of employment during the two-year period following the COC, performance-based RSUs held by the executives that were assumed or continued by the acquiring company would accelerate and become vested at target upon the executive’s termination pursuant to the terms of the executive’s employment agreement or COC agreement, as applicable.
The Compensation Committee will determine the level of performance against performance goals through the date of the COC, and if such performance exceeds the target level, the recipient will be entitled to receive additional shares, based on the level of performance in excess of target, which shares will be time-vested and will vest in full at the end of the measurement period, provided the recipient remains employed by the Company. In the event that the executive’s employment is terminated without cause or the executive resigns for good reason within two years following the COC, vesting of the converted time-based shares would accelerate, pursuant to the terms of the executive’s employment agreement or COC agreement, as applicable. All performance-based RSUs held by Messrs. Furman, Centurion, Comstock, and Downes and Ms. Tekorius will automatically vest upon death or disability at target levels of performance pursuant to the terms of the RSU award agreements. For the grants made to Mr. Furman in fiscal 2020, 2021 and 2022, in the event Mr. Furman had retired before the end of the performance period, 100% of his performance-based shares earned over the performance period would have vested at the end of the performance period with no prorated adjustment. Under the terms of the employment agreements with Messrs. Furman and Centurion, upon
| (4) |
|
|
| |||||||||||
termination of the executive’s employment by the Company without cause or termination by the executive for good reason, all performance-based RSUs will continue to vest based on performance during the applicable performance period and the
executive will become entitled to receive the number of shares issuable under the RSUs, if any, based upon the level of performance achieved during the entire performance period.
OUTSTANDING EQUITY AWARDS ON AUGUST 31, 2022
Stock Awards | ||||||||||||||||||||||
Name | Number of Not Vested | Market Value of Shares of Stock or RSUs that Have Not Vested | Equity Incentive Plan Unearned Shares, RSUs (#) |
Equity Incentive Plan Unearned Shares, RSUs or Other Rights that Have Not Vested ($) |
| |||||||||||||||||
William A. Furman | 30,987 | (1) | 883,439 | |||||||||||||||||||
| 20,123 | (1) | 573,707 | ||||||||||||||||||||
| 25,919 | (1) | 738,951 | ||||||||||||||||||||
| 85,540 | (2) | 2,438,745 | ||||||||||||||||||||
| 18,076 | (3) | 515,347 | ||||||||||||||||||||
| 54,227 | (4) | 1,546,012 | ||||||||||||||||||||
| 11,739 | (3) | 334,679 | ||||||||||||||||||||
| 35,216 | (5) | 1,004,008 | ||||||||||||||||||||
Lorie L. Tekorius | 4,918 | (6) | 140,212 | |||||||||||||||||||
| 22,925 | (7) | 653,592 | ||||||||||||||||||||
| 13,149 | (8) | 374,878 | ||||||||||||||||||||
| 13,690 | (9) | 390,302 | ||||||||||||||||||||
| 22,133 | (2) | 631,012 | ||||||||||||||||||||
| 29,586 | (4) | 843,497 | ||||||||||||||||||||
| 20,534 | (5) | 585,424 | ||||||||||||||||||||
Alejandro Centurion | 4,372 | (6) | 124,646 | |||||||||||||||||||
| 9,862 | (8) | 281,166 | ||||||||||||||||||||
| 11,317 | (10) | 322,648 | ||||||||||||||||||||
| 19,674 | (2) | 560,906 | ||||||||||||||||||||
| 22,190 | (4) | 632,637 | ||||||||||||||||||||
| 16,975 | (11) | 483,957 | ||||||||||||||||||||
Brian J. Comstock | 3,279 | (6) | 93,484 | |||||||||||||||||||
| 7,889 | (8) | 224,915 | ||||||||||||||||||||
| 9,126 | (9) | 260,182 | ||||||||||||||||||||
| 14,756 | (2) | 420,694 | ||||||||||||||||||||
| 17,752 | (4) | 506,110 | ||||||||||||||||||||
| 13,690 | (5) | 390,302 | ||||||||||||||||||||
Adrian J. Downes | 1,639 | (6) | 46,728 | |||||||||||||||||||
| 3,944 | (8) | 112,443 | ||||||||||||||||||||
| 4,335 | (9) | 123,591 | ||||||||||||||||||||
| 7,378 | (2) | 210,347 | ||||||||||||||||||||
| 8,876 | (4) | 253,055 | ||||||||||||||||||||
| 6,503 | (5) | 185,401 | ||||||||||||||||||||
|
| (5) |
|
| |||||
|
|
| (6) | Time-based RSUs granted on October 18, 2022, vesting |
Performance-based |
Performance-based |
|
|
|
|
|
|
| THE GREENBRIER COMPANIES |
38
FISCAL 2023 EXECUTIVE COMPENSATION
STOCK VESTED DURING FISCAL YEAR 20222023
Stock Awards | ||||||||||||||||||||
Name | Number of Shares Acquired on Vesting (#) |
|
Value Realized On Vesting of Shares During the Year Ended ($) |
| ||||||||||||||||
William A. Furman | 46,840 | 2,151,950 | ||||||||||||||||||
Lorie L. Tekorius | 41,006 | 1,600,828 | ||||||||||||||||||
Alejandro Centurion | 31,957 | 1,471,940 | ||||||||||||||||||
Brian J. Comstock | 11,615 | 535,146 | ||||||||||||||||||
Adrian J. Downes | 5,808 | 267,597 | ||||||||||||||||||
NONQUALIFIED DEFERRED COMPENSATION
Name |
Executive | Registrant Contributions in Last Fiscal Year(1) ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate ($) | ||||||||||||||||||||
William A. Furman | — | 131,161 | (329,535 | ) | — | 1,700,486 | |||||||||||||||||||
Lorie L. Tekorius | — | 82,008 | (87,460 | ) | — | 599,908 | |||||||||||||||||||
Alejandro Centurion | — | — | (753,031 | ) | — | 3,277,469 | |||||||||||||||||||
Brian J. Comstock | 226,420 | 59,420 | (330,039 | ) | — | 2,450,338 | |||||||||||||||||||
Adrian J. Downes | 30,500 | 50,491 | (763,327 | ) | — | 2,007,113 | |||||||||||||||||||
|
| Stock Awards
| |||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized On Vesting ($)(1) | ||||||
LORIE L. TEKORIUS | 38,982 | 1,388,479 | ||||||
ADRIAN J. DOWNES | 5,056 | 129,458 | ||||||
BRIAN J. COMSTOCK | 10,266 | 262,868 | ||||||
WILLIAM KRUEGER | 4,724 | 121,218 | ||||||
MARTIN R. BAKER | 7,455 | 190,817 | ||||||
| (1) | The Value Realized on Vesting is calculated by multiplying the number of shares vested by the closing price on the day immediately preceding the relevant vesting date. |
NONQUALIFIED DEFERRED COMPENSATION IN FISCAL YEAR 2023
This table provides information about the NEOs’ earnings and balances under our NQDC Plan in fiscal year 2023 as well as Company contributions made in fiscal year 2023.
Name | Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(1) ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate ($)(3) | |||||||||||||||
LORIE L. TEKORIUS | 0 | 134,958 | 65,315 | 0 | 800,181 | |||||||||||||||
ADRIAN J. DOWNES | 31,500 | 74,173 | 722,427 | 0 | 2,835,213 | |||||||||||||||
BRIAN J. COMSTOCK | 439,791 | 87,275 | 190,723 | 0 | 3,168,127 | |||||||||||||||
WILLIAM KRUEGER | 667,633 | 79,116 | 107,576 | 0 | 1,496,978 | |||||||||||||||
MARTIN R. BAKER | 0 | 68,194 | 67,834 | 0 | 669,485 | |||||||||||||||
| (1) | All |
| (2) | The |
POTENTIAL POST-TERMINATION PAYMENTS
The following descriptions and tables show the benefits that each of the NEO’s, other than Mr. Furman, would be entitled to upon their termination of employment under each of the described scenarios. Because Mr. Furman retired as an executive officer on August 31, 2022, the Benefits Triggered on
Retirement table and description below discloses the amounts that Mr. Furman became entitled to upon his retirement, and the remaining tables show that he was no longer entitled to benefits under any of the other described scenarios because for him they were no longer possible.
| (3) |
|
|
The following amounts were reported in prior fiscal year summary compensation tables: $435,142, $303,274, and $1,015,966 for Ms. Tekorius and Messrs. Downes and Comstock, respectively. | |||||||||||
The NQDC Plan permits participants, including the NEOs, to elect to defer a portion of their compensation, including shares of stock awarded under the Company’s long-term incentive plan.
In January 2023, the Compensation Committee approved discretionary contributions equal to 6% of participants’ annual base salary earned plus actual bonus earned, in each case for the prior calendar year. See Compensation Discussion and Analysis above for more details regarding the NQDC Plan.
TERMINATION AND CHANGE OF CONTROL PROVISIONS
Benefits Triggered on Termination Following a Change of ControlCHANGE OF CONTROL AGREEMENTS
The amended and restated employment agreementsWe have entered into effective August 28, 2012change of control agreements with Mr. Centurion, as later amended with respect to Mr. Centurion, providesour NEOs, which provide for certain benefits if the officer’san NEO’s employment is terminated (x) by us without “cause” or due to the NEO’s “disability,” (y) by the officerNEO for “good reason” or (z) due to death, in each case in connection with or within 24 months after a “change of control” of the Company. Ms. Tekorius and Messrs. Comstock and Downes
The following table shows the estimated benefits that would have been payable to the NEOs under the change of control agreements if a COC had occurred on August 31, 2023, and each NEO’s employment had been terminated on that providedate by us without “cause” or by the NEO for “good reason”.
2024 PROXY STATEMENT | |
39
FISCAL 2023 EXECUTIVE COMPENSATION
Name | Cash Severance Benefit(1) ($) | Continued ($) | Equity Award Acceleration(3) ($) | Total ($)(4) | ||||||||||||
LORIE L. TEKORIUS | 4,811,790 | 19,034 | 7,157,102 | 11,987,926 | ||||||||||||
ADRIAN J. DOWNES | 1,595,797 | 29,127 | 1,946,482 | 3,571,405 | ||||||||||||
BRIAN J. COMSTOCK | 2,532,421 | 25,378 | 3,665,693 | 6,223,492 | ||||||||||||
WILLIAM KRUEGER | 2,295,106 | 0 | 2,335,650 | 4,630,756 | ||||||||||||
MARTIN R. BAKER | 1,474,244 | 26,981 | 2,165,112 | 3,666,336 | ||||||||||||
| (1) | The change of control agreement with each NEO provides for a payment equal to one and one half times (or two and one half times for Ms. Tekorius and two times for Messrs. Comstock and Krueger) the sum of (x) the NEO’s current base salary plus (y) the average of the two most recent annual bonuses received by the NEO prior to the year in which the COC occurs. All payments are to be made in a single lump sum. |
| (2) | The change of control agreements with each of our NEOs provide that the Company will pay the cost of continued benefits for up to 18 months (or 24 months for Mr. Comstock) following the termination of employment except to the extent similar benefits are provided by a subsequent employer. The amounts in this column are based on the average monthly cost of benefits during fiscal 2023. As of fiscal end 2023, Mr. Krueger did not participate in the relevant benefit plans. |
| (3) | The change of control agreements with each of our NEOs provide that time-based awards will accelerate and become fully vested, and performance-based awards will accelerate and become fully vested at target levels. The amounts in the table are based on the closing price of a share of our common stock on August 31, 2023, which was $42.56. |
| (4) | The change of control agreements with each of our NEOs provide that the Company may reduce these amounts in order to prevent any payments from being non-deductible under section 280G of the Code or subject to excise tax under Code section 4999. |
The following table shows the estimated benefits upon their terminationthat would have been payable to the NEOs under the change of control agreements if a COC had occurred on August 31, 2023, and each NEO’s employment under
these scenarios. Inhad been terminated on that date due to death or by us due to the above-described agreements, the definitionNEO’s disability.
Name | Continued ($) | |||
LORIE L. TEKORIUS | 19,034 | |||
ADRIAN J. DOWNES | 29,127 | |||
BRIAN J. COMSTOCK | 25,378 | |||
WILLIAM KRUEGER | 0 | |||
MARTIN R. BAKER | 26,981 | |||
| (1) | The change of control agreements with each of our NEOs provide that the Company will pay the cost of continued benefits up to 18 months (or 24 months for Mr. Comstock) following the termination of employment except to the extent similar benefits are provided by a subsequent employer. As of fiscal end 2023, Mr. Krueger did not participate in the relevant benefit plans. |
A “change of control” generally is defined to includeincludes (1) the acquisition by any individual, entity or group of 30% or more of our stock having by the terms thereof ordinary voting power to elect a majority of the Board, (2) the consummation of a merger or consolidation that results in 50% or more of our stock being owned by persons who were not shareholders prior to the transaction, (3) a sale of all or substantially all of our assets, (4) the dissolution or liquidation of the Company, or (5) a replacement of a majority of the members of the Board by individuals whose nomination, election or appointment was not approved by the incumbent Board.
The following table shows“Cause” generally means (1) the estimatedNEO’s willful and continued failure to substantially perform the NEO’s duties with the Company (subject to certain exceptions) or (2) the conviction of the NEO (including a plea of nolo contendere) of a felony or gross misdemeanor under federal or state law which is materially and demonstrably injurious to the Company or which impairs the NEO’s ability to substantially perform the NEO’s duties for the Company.
“Good reason” generally means (1) a material change in the NEO’s status, positions, duties or responsibility which may reasonably be considered to be an adverse change, (2) a reduction by the Company of the NEO’s base salary exceeding 5% (or an adverse change in the form or timing of the payment), (3) a reduction by the Company of the NEO’s annual bonus exceeding 20%, (4) relocation of the NEO’s work place by more than 35 miles, (5) any purported termination by the Company of the NEO’s employment except as otherwise expressly permitted by the change of control benefits that would have been payableagreement, or (6) any failure by the Company to require any Company successor to assume the NEOs, excluding Mr. Furman, if a change of control (as defined inagreement.
“Disability” means the applicable agreement) had occurredabsence of the NEO from the NEO’s duties with the Company on August 31, 2022,a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and except as noted, each officer’s employment had been terminated on that date eitherpermanent by us without “cause” ora physician selected by the officer with “good reason,” each as defined inCompany or its insurers and reasonably acceptable to the applicable agreement.NEO or the NEO’s legal representative.
Name |
Cash Severance Benefit(1) ($) | Annual Insurance Continuation(2) ($) | Restricted Stock/RSU Acceleration(3) ($) | Supplemental Retirement Benefits(4) ($) | Other(5) ($) | Total ($) | 280G Capped Amount(6) ($) | ||||||||||||||||||||||||||||
William A. Furman | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Lorie L. Tekorius | 3,769,858 | 9,625 | 1,558,984 | — | — | 5,338,467 | 6,766,294 | ||||||||||||||||||||||||||||
Alejandro Centurion | 2,945,152 | 49,651 | 1,212,416 | — | 26,400 | 4,233,619 | 7,343,450 | ||||||||||||||||||||||||||||
Brian J. Comstock | 1,937,943 | 9,625 | 578,582 | — | — | 2,526,150 | 4,009,759 | ||||||||||||||||||||||||||||
Adrian J. Downes | 1,275,752 | 11,457 | 282,762 | — | — | 1,569,971 | 2,475,517 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
| THE GREENBRIER COMPANIES | |||||||
40
2023 Proxy Statement
THE GREENBRIER COMPANIES
40
FISCAL 2023 EXECUTIVE COMPENSATION
Benefits Triggered on Involuntary Termination of Employment without CauseEQUITY AWARDS
The following table shows the estimated benefits that would have been paidpayable to Mr. Centurionthe NEOs pursuant to their equity awards if hiseach NEO’s employment had been terminated on August 31, 2022, either2023 due to death or by us other than for “cause” or by the officer with “good reason,” pursuantdue to the terms of his employment agreement with the Company. Messrs. Comstock and Downes and Ms. Tekorius do not have employment agreements with the Company.NEO’s disability.
Name |
Cash | Annual Insurance Continuation(2) ($) | Restricted Stock/RSU Acceleration(3) ($) | Supplemental ($) | Other(5) ($) | Total ($) | ||||||||||||||||||||||||
William A. Furman | — | — | — | — | — | — | ||||||||||||||||||||||||
Lorie L. Tekorius | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||
Alejandro Centurion | 2,894,182 | 49,651 | 1,845,053 | — | 26,400 | 4,815,286 | ||||||||||||||||||||||||
Brian J. Comstock | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||
Adrian J. Downes | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||
|
|
|
|
|
The Company’s obligation to pay severance benefits is, in all cases, contingent upon the officer executing a release of claims in favor of the Company. The Company’s obligation to pay severance benefits to Mr. Centurion is contingent upon Mr. Centurion’s compliance with the terms of a covenant not to compete in favor of the Company for one year following termination of employment.
Benefits Triggered on Retirement
The following table shows estimated benefits that were earned by Mr. Furman with respect to his retirement as an executive officer on August 31, 2022 (after which Mr. Furman ceased serving as an employee effective on September 1, 2022) and the estimated benefits that would have been payable by the Company to the other NEOs if each officer’s employment had terminated on August 31, 2022, by reason of retirement, excluding amounts payable under the Company’s 401(k) Plan.
Name |
Retirement ($) | Restricted Stock/RSU Acceleration ($) | Annual ($) | Total ($) | ||||||||||||||||
William A. Furman | 325,948 | (1) | 5,901,312 | (2) | N/A | 6,227,260 | ||||||||||||||
Lorie L. Tekorius | N/A | N/A | N/A | N/A | ||||||||||||||||
Alejandro Centurion | N/A | N/A | N/A | N/A | ||||||||||||||||
Brian J. Comstock | N/A | N/A | N/A | N/A | ||||||||||||||||
Adrian J. Downes | N/A | N/A | N/A | N/A | ||||||||||||||||
Name | Equity Award | |||||||||||||
LORIE L. TEKORIUS | 7,157,102 | |||||||||||||
| 1,946,482 | |||||||||||||
| 3,665,693 | |||||||||||||
WILLIAM KRUEGER | 2,335,650 | |||||||||||||
| 2,165,112 | |||||||||||||
| (1) |
|
|
Benefits Triggered on Disability or Death
The following table shows estimated benefits that would have been payable by the Company to the NEOs, excluding Mr. Furman, if each officer’s employment terminated on August 31, 2022, by reason of death or disability.
Name |
Estimated ($) | Annual Continuation ($) | Restricted Acceleration(1) ($) | Annual Retirement Benefit ($) | Total ($) | ||||||||||||||||||||
William A. Furman | — | — | — | N/A | — | ||||||||||||||||||||
Lorie L. Tekorius | N/A | N/A | 3,618,917 | N/A | 3,618,917 | ||||||||||||||||||||
Alejandro Centurion | N/A | N/A | 2,405,959 | N/A | 2,405,959 | ||||||||||||||||||||
Brian J. Comstock | N/A | N/A | 1,895,687 | N/A | 1,895,687 | ||||||||||||||||||||
Adrian J. Downes | N/A | N/A | 931,564 | N/A | 931,564 | ||||||||||||||||||||
Under the terms of the Company’s standard forms of award agreements, all unvested shares of restricted stock and RSUs become fully vested upon termination due to death or by us due to the NEO’s disability, with performance-based |
The following table shows the estimated benefits that would have been payable to the NEOs pursuant to their equity awards if a COC had occurred on August 31, 2023, and the NEO’s equity awards were not converted, assumed, substituted for or replaced by the acquiring entity in such COC. See Compensation Discussion and Analysis above for additional details regarding equity award treatment in connection with a COC.
Name | Equity Award | |||
LORIE L. TEKORIUS | 5,123,472 | |||
ADRIAN J. DOWNES | 1,231,389 | |||
BRIAN J. COMSTOCK | 2,333,423 | |||
WILLIAM KRUEGER | 1,704,727 | |||
MARTIN R. BAKER | 1,644,575 | |||
| (1) | The |
PAY RATIOMr. Baker’s fiscal 2023 PSUs provide that, in the event of his termination of service due to retirement on or after November 30, 2024, the PSUs will remain outstanding and performance-vest based on actual performance at the end of the performance period.
LIFE INSURANCE
Each NEO participates in the executive life insurance program, and each has an aggregate death benefit amount of $1 million. See Compensation Discussion and Analysis above for additional details regarding the Company’s executive life insurance program.
2024 PROXY STATEMENT | |
41
FISCAL 2023 EXECUTIVE COMPENSATION
Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information regarding the ratio ofrelationship between the annual total compensation of our Executive Chairman, William A. Furman, toCEO, Lorie L. Tekorius, and the annual total compensation of our median employee for fiscal 2022.
Fiscal 2022 annual total compensation(excluding our CEO) for our Executive Chairman was $6,633,675. The annual total compensation of our median employee was $11,510. The resulting ratio of our Executive Chairman’s annual total compensation to the annual total compensation of our median employee was approximately 576 to 1.last completed fiscal year, which ended August 31, 2023.
We identified our median employee by examining compensation information derived from payroll records for all employees, excluding the Executive Chairman,CEO, respectively, who were employed by us on August 31, 2022.2023. As of such date, over 80% of employees were located outside the United States. In identifying our median employee, we selected actual base salary (for salaried employees) and wages (for hourly employees), including any applicable bonus or profit sharing, respectively, for the 12-month period ended August 31, 2022,2023, as the most appropriate measure of compensation and consistently applied that measure to all employees included in the calculation. In addition, in accordance with the “de minimis” exception set forth in Item 402(u)(4)(ii), we have chosen to exclude 198 employees in Turkey and 3 employees in Canada from the employee numbers noted below in determining of the median employee.
| • | The median of the annual total compensation of all of our employees (other than Ms. Tekorius), including our consolidated subsidiaries, was approximately $15,572. |
| • | Ms. Tekorius’ annual total compensation, as reported in the Summary Compensation Table included in this proxy statement, was $5,639,481. |
| • | Based on the above, for fiscal 2023, the ratio of Ms. Tekorius’ annual total compensation to the median of the annual total compensation of all employees (other than Ms. Tekorius) was approximately 362 to 1. |
| • | We determined the median of the annual total compensation of our employees as of August 31, 2023, at which time we (including our consolidated subsidiaries) had approximately 13,756 full-time and part-time employees, including interns, of which approximately 2,346 were U.S. employees, and approximately 11,410 (or approximately 83% of our total employee population as of August 31, 2023, excluding acquired employees) were located outside of the United States. |
| • | We compared the actual base salary (for salaried employees) and wages (for hourly employees), including any applicable bonus or profit sharing, respectively, for the 12-month period ended August 31, 2023, to determine the median employee. Compensation paid in foreign currency was converted to U.S. dollars using a spot exchange rate on August 31, 2023. In determining the median total compensation of all employees, we did not make any cost-of-living adjustments to the compensation paid to any employee outside of the U.S. |
Once we identified our median employee, we estimated the median employee’s annual total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, yielding the median annual total compensation disclosed above.
The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Act of 1933, as amended, and based upon our reasonable judgment and assumptions. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by us in calculating their pay ratio. Accordingly, the pay ratio disclosed by other companies may not be comparable to our pay ratio as disclosed above.
| THE GREENBRIER COMPANIES | |||||||
42
2023 Proxy Statement
THE GREENBRIER COMPANIES
42
FISCAL 2023 EXECUTIVE |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information as of August 31, 2022, with respect to our equity compensation plans under which our equity securities are authorized for issuance.
Plan Category |
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 | ||||||||||||||
Equity compensation plans approved by security holders | 1,041,582 | (1) | N/A | 1,971,796 | (2) | ||||||||||||
Equity compensation plans not approved by security holders | None | N/A | None | ||||||||||||||
|
|
Thomas B. Fargo, Chairman
Graeme A. Jack
David L. Starling
Wendy L. Teramoto
Kelly M. Williams
Average Summary Compensation Table Total for Non-PEO NEOs (5) (d) | Average Compensation Actually Paid to Non-PEO NEOs (6) (e) | Value of Initial Fixed $100 Investment Based On: | ||||||||||||||||||||||||||||||||||||||||||||||||
Fiscal Year (a) | Summary Compensation Table Total for First PEO (1) (b) | Summary Compensation table Total for Second PEO (2) (b) | Compensation Actually Paid to First PEO (3) (c) | Compensation Actually Paid to Second PEO (4) (c) | Total Shareholder Return (7) (f) | Peer Group Total Shareholder Return (8) (g) | Net Income ($MM) (9) (h) | EBITDA ($MM) (10) (i) | ||||||||||||||||||||||||||||||||||||||||||
2023 | N/A | $ | 5,639,481 | N/A | $ | 8,638,530 | $ | 2,350,565 | $ | 3,229,980 | $ | 171.31 | $ | 142.79 | $ | 62.5 | $ | 340.3 | ||||||||||||||||||||||||||||||||
2022 | $ | 6,633,675 | N/A | $ | 2,293,623 | N/A | $ | 3,058,323 | $ | 1,618,067 | $ | 111.03 | $ | 135.31 | $ | 46.9 | $ | 231.3 | ||||||||||||||||||||||||||||||||
2021 | $ | 5,580,229 | N/A | $ | 9,401,783 | N/A | $ | 2,487,885 | $ | 3,769,096 | $ | 167.05 | $ | 153.97 | $ | 32.4 | $ | 150.3 | ||||||||||||||||||||||||||||||||
(1) | This column represents the amount of total compensation reported for Bill Furman (our former Chief Executive Officer and former Executive Chairman) for each corresponding fiscal year in the “Total” column of the Summary Compensation Table in each applicable fiscal year (such total for the applicable executive, “total compensation”). Please refer to the Summary Compensation Table in the Company’s Proxy Statement for the applicable fiscal year. |
(2) | This column represents the amount of total compensation reported for Lorie L. Tekorius (our Chief Executive Officer and President) for each corresponding fiscal year in the “Total” column of the Summary Compensation Table. Please refer to the Summary Compensation Table in this Proxy Statement. |
(3) | This column represents the amount of “compensation actually paid” to Mr. Furman, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Furman during the applicable fiscal year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to Mr. Furman’s total compensation for each fiscal year to determine the “compensation actually paid”: |
Fiscal Year | Reported Summary Compensation Table Total for First PEO (a) | Reported Summary Compensation Table Value of First PEO Equity Awards (b) | Adjusted Value of First PEO Equity Awards (c) | Compensation Actually Paid to First PEO | ||||||||||||
2023 | N/A | N/A | N/A | N/A | ||||||||||||
2022 | $ | 6,633,675 | $ | 3,257,308 | ($1,082,744 | ) | $ | 2,293,623 | ||||||||
2021 | $ | 5,580,229 | $ | 3,421,997 | $7,243,551 | $ | 9,401,783 | |||||||||
(a) | This column represents the amount of total compensation reported for Mr. Furman for each corresponding fiscal year in the “Total” column of the Summary Compensation Table in each applicable fiscal year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement for the applicable fiscal year. |
(b) | This column represents the grant date fair value of equity awards reported in the “Stock Awards” column in the Summary Compensation Table for the applicable fiscal year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement for the applicable fiscal year. The amount in this column for each fiscal year is replaced with the corresponding amount reported under the Adjusted Value of First PEO Equity Awards column in order to arrive at compensation actually paid. |
(c) | This column represents an adjustment to the amounts in the “Stock Awards” column in the Summary Compensation Table for the applicable fiscal year (a “Subject Year”). For a Subject Year, the adjusted amount replaces the “Stock Awards” column in the Summary Compensation Table for Mr. Furman to arrive at “compensation actually paid” to Mr. Furman for such Subject Year. The adjusted amount is determined by adding (or subtracting, as applicable) the following for that Subject Year: (i) the fiscal year-end fair value of any equity awards granted in the Subject Year that are outstanding and unvested as of the end of the Subject Year; (ii) the amount of change as of the end of the Subject Year (from the end of the prior fiscal year) in the fair value of any awards granted in prior fiscal years that are outstanding and unvested as of the end of the Subject Year; (iii) for awards that are granted and vest in the Subject Year, the fair value as of the vesting date; (iv) for awards granted in prior fiscal years that vest in the Subject Year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in the fair value; (v) for awards granted in prior fiscal years that are determined to fail to meet the applicable vesting conditions during the Subject Year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock awards in the Subject Year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the Subject Year. The amounts added or subtracted to determine the adjusted amount are as follows: |
Fiscal Year | Fiscal Year End Fair Value of Equity Awards Granted in the Fiscal Year | Fiscal Year over Fiscal Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted in Prior Fiscal Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Fiscal Year | Change in Fair Value of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | Fair Value at the End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year | Value of Dividends or Other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Fiscal Year | Adjusted Value of Equity Awards | ||||||||||||||||||||||||||||
2023 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
2022 | $ | 2,645,006 | ($3,661,878 | ) | $ | 0 | $ | 87,108 | $ | 271,545 | $ | 118,565 | ($1,082,744 | ) | |||||||||||||||||||||
2021 | $ | 4,619,077 | $1,335,943 | $ | 863,558 | $ | 286,784 | $ | 18,637 | $ | 156,826 | $7,243,551 | |||||||||||||||||||||||
The fair value or change in fair value, as applicable, of stock awards was determined by reference to (x) for RSU awards, the closing price of our common stock on the applicable measurement date, (y) for performance-based RSUs (excluding market-conditioned (relative TSR-based) performance-based RSUs), the closing price of our common stock on the applicable measurement date multiplied by the probability of achievement as of such date and (z) for market-conditioned performance-based RSUs, a Monte Carlo simulation with reference to the risk free rate, dividend yield and volatility assumptions as of the applicable measurement date. |
2024 PROXY STATEMENT |
|
(4) | This column represents the amount of “compensation actually paid” to Ms. Tekorius, as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Ms. Tekorius during the applicable fiscal year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to Ms. Tekorius’ total compensation for each fiscal year to determine the “compensation actually paid”: |
Fiscal Year | Reported Summary Compensation Table Total for Second PEO (a) | Reported Summary Compensation Table Value of Second PEO Equity Awards (b) | Adjusted Value of Second PEO Equity Awards (c) | Compensation Actually Paid to Second PEO | ||||||||||||
2023 | $ | 5,639,481 | $ | 2,819,190 | $ | 5,818,240 | $ | 8,638,530 | * | |||||||
2022 | N/A | N/A | N/A | N/A | ||||||||||||
2021 | N/A | N/A | N/A | N/A | ||||||||||||
| * | Any differences in total values are due to rounding. |
(a) | This column represents the amount of total compensation reported for Ms. Tekorius for each corresponding fiscal year in the “Total” column of the Summary Compensation Table. Please refer to the Summary Compensation Table in this Proxy Statement. |
(b) | This column represents the grant date fair value of equity awards reported in the “Stock Awards” column in the Summary Compensation Table for the applicable fiscal year. Please refer to the Summary Compensation Table in this Proxy Statement. The amount in this column for each fiscal year is replaced with the corresponding amount reported under the Adjusted Value of Second PEO Equity Awards column in order to arrive at compensation actually paid. |
(c) | This column represents an adjustment to the amounts in the “Stock Awards” column in the Summary Compensation Table for the Subject Year. For a Subject Year, the adjusted amount replaces the “Stock Awards” column in the Summary Compensation Table for Ms. Tekorius to arrive at “compensation actually paid” to Ms. Tekorius for such Subject Year. The adjusted amount is determined by adding (or subtracting, as applicable) the following for that Subject Year: (i) the fiscal year-end fair value of any equity awards granted in the Subject Year that are outstanding and unvested as of the end of the Subject Year; (ii) the amount of change as of the end of the Subject Year (from the end of the prior fiscal year) in the fair value of any awards granted in prior fiscal years that are outstanding and unvested as of the end of the Subject Year; (iii) for awards that are granted and vest in the Subject Year, the fair value as of the vesting date; (iv) for awards granted in prior fiscal years that vest in the Subject Year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in the fair value; (v) for awards granted in prior fiscal years that are determined to fail to meet the applicable vesting conditions during the Subject Year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock awards in the Subject Year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the Subject Year. The amounts added or subtracted to determine the adjusted amount are as follows: |
Fiscal Year | Fiscal Year End Fair Value of Equity Awards Granted in the Fiscal Year | Fiscal Year over Fiscal Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted in Prior Fiscal Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Fiscal Year | Change in Fair Value of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | Fair Value at the End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year | Value of Dividends or other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Fiscal Year | Adjusted Value of Equity Awards | ||||||||||||||||||||||||||||
2023 | $ | 4,758,620 | $ | 681,771 | $ | 0 | $ | 268,605 | $ | 0 | $ | 109,244 | $ | 5,818,240 | |||||||||||||||||||||
2022 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
2021 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
The fair value or change in fair value, as applicable, of stock awards was determined by reference to (x) for RSU awards, the closing price of our common stock on the applicable measurement date, (y) for performance-based RSUs (excluding market-conditioned (relative TSR-based) performance-based RSUs), the closing price of our common stock on the applicable measurement date multiplied by the probability of achievement as of such date and (z) for market-conditioned performance-based RSUs, a Monte Carlo simulation with reference to the risk free rate, dividend yield and volatility assumptions as of the applicable measurement date. |
(5) | This column represents the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius) in the “Total” column of the Summary Compensation Table in each applicable fiscal year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement for the applicable fiscal year. The names of each of the NEOs (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius) included for purposes of calculating the average amounts in each applicable fiscal year are as follows: (i) for fiscal 2023, Adrian J. Downes, Brian J. Comstock, William Krueger and Martin R. Baker; (ii) for fiscal 2022, Lorie L. Tekorius, Alejandro Centurion, Brian J. Comstock and Adrian J. Downes; and (iii) for fiscal 2021, Lorie L. Tekorius, Mark J. Rittenbaum, Alejandro Centurion, Brian J. Comstock and Adrian J. Downes. |
(6) | This column represents the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius) during the applicable fiscal year. In accordance with the requirements of Item 402(v) of RegulationS-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius) for each fiscal year to determine the “compensation actually paid”, using the same adjustment methodology described above in Note 2(c): |
Fiscal Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs (a) | Average Reported Summary Compensation Table Value of Non-PEO NEO Equity Awards (b) | Average Non- PEO NEO Adjusted Value of Equity Awards (c) | Average Compensation Actually Paid to Non-PEO NEOs | ||||||||||||
2023 | $ | 2,350,565 | $ | 859,867 | $ | 1,739,282 | $ | 3,229,980 | ||||||||
2022 | $ | 3,058,323 | $ | 1,157,446 | ($ | 282,810 | ) | $ | 1,618,067 | |||||||
2021 | $ | 2,487,885 | $ | 1,113,900 | $ | 2,395,110 | $ | 3,769,096 | * | |||||||
(a) | This column represents the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius) in the “Total” column of the Summary Compensation Table in each applicable fiscal year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement for the applicable fiscal year. |
(b) | This column represents the average of the total amounts reported for the NEOs as a group (excluding Mr. Furman and, for fiscal 2023, Ms. Tekorius) in the “Stock Awards” column in the Summary Compensation Table in each applicable fiscal year. Please refer to the Executive Compensation Tables section of the Company’s Proxy Statement for the applicable fiscal year. The amount in this column for each fiscal year is replaced with the corresponding amount reported under the Average Non-PEO NEO Adjusted Value of Equity Awards column in order to arrive at compensation actually paid. |
| THE GREENBRIER COMPANIES |
(c) | This column represents an adjustment to the average of the amounts reported for the NEOs as a group (excluding Mr. Furman and, for fiscal 2023, |
Fiscal Year | Average Fiscal Year End Fair Value of Equity Awards Granted in the Fiscal Year | Average Fiscal Year over Fiscal Year Change in Fair Value of Outstanding and Unvested Equity Awards at FYE Granted in Prior Fiscal Years | Average Fair Value as of Vesting Date of Equity Awards Granted in the Fiscal Year and Vested in the Fiscal Year | Average Change in Fair Value of Equity Awards Granted in Prior Fiscal Years that Vested in the Fiscal Year | Average Fair Value at the End of the Prior Fiscal Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year | Average Value of Dividends or other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Fiscal Year | Adjusted Average Value of Equity Awards | ||||||||||||||||||||||||||||
2023 | $ | 1,451,403 | $ | 296,516 | $ | 0 | ($ | 23,185 | ) | $ | 0 | $ | 14,548 | $ | 1,739,282 | ||||||||||||||||||||
2022 | $ | 683,619 | ($ | 984,268 | ) | $ | 0 | $ | 3,390 | $ | 38,362 | $ | 52,811 | ($ | 282,810 | ) | |||||||||||||||||||
2021 | $ | 1,502,457 | $ | 562,020 | $ | 0 | $ | 305,706 | $ | 2,423 | $ | 27,350 | $ | 2,395,110 | |||||||||||||||||||||
(7) | This column represents cumulative Company total shareholder return (“TSR”) and is calculated by assuming that a $100 investment was made on the day prior to the first fiscal year reported and reinvesting all dividends until the last day of each reported fiscal year. |
(8) | This column represents cumulative peer group TSR computed in accordance with Note 7. The peer group used for this purpose is the following published industry index: S&P 600 Index. |
(9) | This column represents the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year. |
(10) | This column represents EBITDA, a non-GAAP financial measure. See Compensation Discussion and Analysis above for additional information regarding the use of this metric and a reconciliation to GAAP. |
| ||||
2024 PROXY STATEMENT | |
| THE GREENBRIER COMPANIES |
2024 PROXY STATEMENT | |
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
| PROPOSAL 2 | ADVISORY APPROVAL OF EXECUTIVE COMPENSATION |
Pursuant toAs required by Section 14A of the Exchange Act, we are seeking approvalasking our shareholders to approve, on a nonbinding,an advisory, non-binding basis, of the compensation of our named executive officersNEOs as disclosed in this Proxy Statement. We providethe “Compensation Discussion and Analysis” section beginning on page 24, and the related compensation tables and narratives that follow such section. This proposal, commonly known as a “Say-on-Pay” proposal, gives our shareholders with the opportunity to express their views on our NEOs’ compensation as a whole. This vote on an advisory basisis not intended to address any specific item of compensation or any specific NEO, but rather the overall compensation of all of our NEOs and the philosophy, policies and practices described in this proxy statement. We currently hold our Say-on-Pay vote every year.
At our 2023 Annual Meeting, we held a Say-on-Pay vote on the compensation of our named executive officers annually. While this vote is non-binding, consistent withNEOs for fiscal 2022, which received the value we assign to shareholder engagement, we consider the outcomesupport of approximately 80% of the votes cast. This was lower than the Say-on-Pay vote when making future compensation decisions.
Atsupport of approximately 88% of the votes cast at our 2022 Annual Meeting for the compensation of our advisoryNEOs for fiscal 2021. The Compensation Committee and our full Board took the Say-on-Pay vote onoutcome seriously. Following our 2023 Annual Meeting, we contacted institutional shareholders representing approximately 74% of our shares (including 100% of our shares represented by our top 20 shareholders) to, among other things, discuss our executive compensation passed by a vote of approximately 88% of votes cast. We believe this favorable result reflectsprogram, policies, and practices, solicit feedback and ensure that we had insight into the alignment between executive pay and performance,issues that were most important to our shareholders so that we could better understand their perspectives, as well as regular shareholder engagement efforts and incorporation of feedback.
As discussedset out in more detail in the Compensation“Compensation Discussion and Analysis beginning on page 19Analysis” section of this Proxy Statement, we believe that Greenbrier’s executive compensation programs effectively align the interests of our executive officers with those of our shareholders by linking a significant portion of their compensation to Greenbrier’s performance and by providing a
competitive level of compensation designed to recruit, develop, retain and motivate talented executives critical to Greenbrier’s long-term success.Statement.
This Proposal 2 allows our shareholders to express their opinions regarding the decisions of the Compensation Committee on the compensation paid to the named executive officers through a vote on the following resolution:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in accordance with the rules of the SEC, which disclosures include the disclosures in the Compensation Discussion and Analysis and the accompanying compensation tables and narrative disclosures.”
In order for this Proposal 2 to be approved, the number of votes cast “FOR” approval must exceed the number of votes cast “AGAINST” approval. Broker discretionary voting of uninstructed shares is not permitted on this Proposal 2. Abstentions and broker non-votes of uninstructed shares will not affect the outcome of voting on this Proposal 2. If no instructions are given on your proxy, the proxy will be voted “FOR” approval. The Say-on-Pay vote is advisory, and therefore is not binding on us, our Compensation Committee or our Board. The Say-on-Pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will consider when determining executive compensation for the remainder of the current fiscal year and beyond.
We believe that our executive compensation program is effective in achieving the Company’s objectives of:
| • | Aligning the interests of key executives with the success of the business, our shareholders and other stakeholders |
| • | Attracting, developing, retaining and motivating key executives to drive our business and financial performance |
| • | Linking a significant amount of executive compensation to achievement of pre-established financial metrics and business goals that are directly tied to our overall business strategy |
| • | Incentivizing the management team to create shareholder value by balancing growth and return on capital at all points in the business cycle |
Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting on January 5, 2024:
“RESOLVED, that the shareholders approve, on an advisory basis, the compensation paid to the named executive officers, as disclosed in the proxy statement for the 2024 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussion, and other related disclosure.”
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RESOLUTION set forth in proposal 2 above, on an advisory basis. Unless marked otherwise, proxies received will be voted FOR this proposal. |
| THE GREENBRIER COMPANIES
|
48
| PROPOSAL 3 | ADVISORY APPROVAL OF FREQUENCY OF EXECUTIVE COMPENSATION VOTE |
Section 14A of the Exchange Act provides that shareholders must be given the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently we should seek future advisory approval of the compensation of our named executive officers as disclosed in accordance with the compensation disclosure rules of the SEC, which we refer to as an “advisory approval of the compensation of our named executive officers”. By voting with respect to this Proposal 3, shareholders may indicate whether they would prefer that we conduct future advisory approval of the compensation of our named executive officers once every one, two, or three years. Shareholders also may, if they wish, abstain from casting a vote on this proposal.
Our Board has determined that an annual advisory approval of the compensation of our named executive officers will allow our shareholders to provide timely, direct input on the Company’s executive compensation philosophy, policies and practices as disclosed in the proxy statement each year. The Board believes that an annual vote is therefore consistent with the Company’s efforts to engage in an ongoing dialogue with our shareholders on executive compensation and corporate governance matters. Our shareholders voted on a similar proposal in 2018, and we currently hold the Say-on-Pay vote every year.
The Company recognizes that the shareholders may have different views as to the best approach for the Company, and therefore we look forward to hearing from our shareholders as to their preferences on the frequency of an advisory approval of the compensation of our named executive officers.
This vote is advisory and not binding on the Company, our Board, or our Compensation Committee in any way. The Board and the Compensation Committee will take into account the outcome of the vote, however, when considering the frequency of future advisory approvals of the compensation of our named executive officers. The Board may decide that it is in the best interests of our shareholders and the Company to hold an advisory approval of the compensation of our named executive officers more frequently than the frequency receiving the most votes cast by our shareholders. It is expected that the next Say-on-Pay frequency vote will occur at the 2030 Annual Meeting of Shareholders.
The proxy card provides shareholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, shareholders will not be voting to approve or disapprove the recommendation of the Board.
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, for the option of once every “1 YEAR” as the preferred frequency for advisory approval of the compensation of our named executive officers.”
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE |
2024 PROXY STATEMENT | |
49
PROPOSAL 4
| APPROVE AN AMENDMENT AND |
The Board has approved an amendment and restatement of the 2014 Employee Stock Purchase Plan, as amended (the “2014 Plan,” and as amended and restated, The Greenbrier Companies, Inc. Employee Stock Purchase Plan or the “ESPP”). Among other things, the ESPP extends the expiration date of the 2014 Plan, which would have otherwise expired on February 29, 2024. The expiration date of the ESPP is February 28, 2029, unless terminated earlier pursuant to its terms. The ESPP also includes clarifications and updates related to foreign participants, company trading restrictions, and plan administration. The amendment and restatement of the 2014 Plan as the ESPP is contingent upon shareholder approval. As of August 31, 2023, 545,514 shares remained available for issuance under the 2014 Plan, and would continue to be available under the ESPP if approved by shareholders.
The ESPP provides a convenient way for employees to purchase shares of the Company’s Common Stock through payroll deductions and a method by which the Company may assist and encourage its employees to become shareholders.
The following summary of the material provisions of the ESPP does not purport to be complete, and is subject to and qualified in its entirety by the complete text of the ESPP. A complete copy of the ESPP is available in this Proxy Statement attached as Appendix B.
Summary of The Greenbrier Companies, Inc.
Employee Stock Purchase Plan
PURPOSE OF THE ESPP
The Company believes that ownership of shares of its Common Stock, without par value (“shares”), by employees of the Company and each subsidiary of the Company that is designated by the Board as a participant in the ESPP (a “participating subsidiary”) is desirable as an incentive to continuation and enhancement of Company profits and as a means by which employees may share in the rewards of growth and success of the Company. The Company intends that the ESPP will qualify as an “employee stock purchase plan” under Section 423 of the Code.
ADMINISTRATION OF THE ESPP
The ESPP will be administered by the Board. The Board may promulgate rules and regulations for operation of the ESPP, adopt forms for use in connection with the ESPP, and decide any question of interpretation of the ESPP or rights arising under the ESPP. The Board may consult with counsel for the Company on any matter arising under the ESPP. All determinations and decisions of the Board will be binding and conclusive on all persons.
Notwithstanding any other provisions in the ESPP, the Board may delegate authority to administer the ESPP to the Compensation Committee.
ELIGIBLE EMPLOYEES
Except as otherwise indicated in the ESPP, all permanent employees of the Company, and all permanent employees of each participating subsidiary, are eligible to participate in the ESPP. The Board may designate additional participating subsidiaries from time to time. A permanent employee is an employee who has been employed by the Company or any of its participating subsidiaries for at least three consecutive months (or such other employment period less than two years determined by the Company) and who is in the active service of the Company or any of its participating subsidiaries on the date a purchase of shares is made under the ESPP. The foregoing notwithstanding, any employee whose customary employment is 20 hours or less per week or whose customary employment is for not more than five months per calendar year is not considered a permanent employee (unless the Company determines a lesser standard applied uniformly). As of September 30, 2023, we had approximately 2,076 permanent employees that would be eligible to participate in the ESPP.
Any employee who would, after a purchase of shares under the ESPP, own or be deemed to own stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or its subsidiaries will be ineligible to participate in the ESPP.
| THE GREENBRIER COMPANIES |
50
PROPOSAL 4—APPROVE AN AMENDMENT AND RESTATEMENT OF THE
2014 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
PARTICIPATION IN THE ESPP
A subscription and payroll deduction authorization filed by an eligible employee will authorize the Company (or participating subsidiary, as the case may be) to make payroll deductions from the employee’s compensation.
If required under Section 423 of the Code, no employee will be allowed to subscribe for a number of shares under the ESPP which would permit his or her rights to purchase shares under all stock purchase or option plans of the Company and its subsidiaries to accrue at a rate which exceeds $25,000 of fair market value of such shares (determined at the time such shares are offered) for each calendar year in which such right to subscribe or a subscription is outstanding at any time.
The amount deducted from a participant’s compensation with respect to participation in the ESPP will not exceed 5% of the gross amount of base pay for the pay period to which the deduction relates or such other amount determined by the Company in a uniform manner.
Participation in the ESPP will terminate (1) when an employee gives written or electronic notice to the Company that he or she terminates his or her participation in the ESPP, or (2) when an employee ceases to be an eligible employee for any reason, including death or retirement.
OFFER TO SELL STOCK
Upon receipt and acceptance by the Company of a valid subscription and payroll deduction authorization from a participant, the Company will offer to sell shares to such participant. Each date of purchase of shares under the ESPP will be deemed to be the grant date with respect to the shares purchased on such date.
PURCHASE OF STOCK
On or before the 10th business day of each month, the Company will remit to the custodian the total of all deductions made under the ESPP during the previous month. The custodian will forthwith apply such funds, together with company contributions as provided for under the ESPP to the purchase of shares in open market transactions through brokers or dealers at prevailing market prices. Purchases will be completed on or before the 25th day following the date of the remittance. Any funds remaining with the custodian, after the purchase of the maximum number of shares which can be purchased with the remittance, will be applied to the next month’s purchase. Each month, the custodian will credit each participant’s account with his or her pro rata share of purchases of shares under the ESPP, including fractional shares to at least the third decimal (or in such other manner determined by the Company in a uniform manner).
Notwithstanding any other provision of the ESPP to the contrary, the maximum number of shares which will be issuable pursuant to the ESPP, or purchasable by the custodian pursuant hereto, will be 750,000 shares. As of September 29, 2023, the closing sale price of a share reported on the New York Stock Exchange was $40. Participants may purchase shares under the ESPP at a discount price of 85% of the market price per share as of the date of purchase (or such higher price determined by the Company in a uniform manner).
Notwithstanding any other provision of the ESPP to the contrary, the Company may determine to sell newly issued shares under the ESPP in place of open market purchases. In such event, the Compensation Committee will adopt such forms, procedures and rules as it deems appropriate to implement sales of newly issued shares under the ESPP.
COMPANY CONTRIBUTIONS
The Company will contribute to the ESPP and remit to the custodian funds to be added to the funds contributed by participants for the purchase of shares under the ESPP, in the amount of the difference between the discount price at which participants are permitted to purchase shares, and the market price of the shares as of the date of purchase. The custodian may co-mingle any company contribution with other funds held under the ESPP and will apply any company contribution to the purchase of shares in the same manner and under the same terms as described in the ESPP.
EXPENSES OF THE ESPP
The Company will pay all expenses incident to operation of the ESPP, including costs of record keeping, accounting fees, legal fees, fees of the custodian, commissions and issue or transfer taxes on purchases pursuant to the ESPP and on delivery of shares to a participant or into his or her brokerage account. The Company will not pay expenses, commissions or taxes incurred in connection with sales of shares by the custodian at the request of a participant. Expenses to be paid by a participant will be deducted from the proceeds of sale prior to remittance.
2024 PROXY STATEMENT | |
51
PROPOSAL 4—APPROVE AN AMENDMENT AND RESTATEMENT OF THE
2014 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
NON-U.S. EMPLOYEES
Without amending the ESPP, the Company may grant offers to sell stock or establish other procedures to provide benefits to non-U.S. employees of the Company and its subsidiaries under the ESPP on such terms and conditions different from those specified in the ESPP as may, in the judgment of the Company, be necessary or desirable to foster and promote achievement of the purposes of the ESPP and will have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable (1) to comply with provisions of applicable laws or regulations or conform to the requirements to operate the ESPP in a qualified or tax or accounting advantageous manner, (2) to ensure the viability of the benefits under the ESPP for eligible non-U.S. employees, or (3) to meet the objectives of the ESPP. Notwithstanding anything to the contrary herein, any such actions taken by the Company with respect to eligible non-U.S. employees of any participating subsidiary may be treated as a subplan outside of an “employee stock purchase plan” under Section 423 of the Code and not subject to the requirements of Section 423 set forth in the Code and the ESPP.
RIGHTS NOT TRANSFERABLE
The right to purchase shares under the ESPP is not transferable by a participant, and such right is exercisable during the participant’s lifetime only by the participant. Upon the death of a participant, any shares held by the custodian for the participant’s account will be transferred to the deceased participant’s estate.
DIVIDENDS AND OTHER DISTRIBUTIONS
All cash dividends, if any, in respect of shares held by the custodian will be automatically reinvested in the purchase of additional shares or will be paid to the participants entitled thereto or treated in such other manner as determined by the Company in a uniform manner. Stock dividends and other distributions in shares of the Company or other property in respect of shares held by the custodian will be issued to the custodian and held by it for the account of the respective participants entitled thereto.
VOTING AND SHAREHOLDER COMMUNICATIONS
In connection with voting on any matter submitted to the shareholders of the Company, the custodian will furnish to each participant a proxy authorizing the participant to vote the shares held by the custodian for his or her account.
RESPONSIBILITY AND INDEMNITY
Neither the Company, its Board, the Compensation Committee, the custodian, any participating subsidiary, nor any member, officer, agent, or employee of any of them, will be liable to any participant under the ESPP for any mistake of judgment nor for any omission or wrongful act unless resulting from gross negligence, willful misconduct or intentional misfeasance. The Company will indemnify and save harmless its Board, the Compensation Committee, the custodian and any such member, officer, agent or employee against any claim, loss, liability or expense arising out of the ESPP, except such as may result from the gross negligence, willful misconduct or intentional misfeasance of such entity or person.
AMENDMENT OF THE ESPP
The Compensation Committee may from time to time amend the ESPP in any and all respects, except that without approval of the Board and the affirmative vote of a majority of the outstanding shares of the Company, within 12 months prior to or subsequent to such Board approval, the Compensation Committee may not extend the term of the ESPP or increase the number of shares issuable or purchasable pursuant to the ESPP.
TERMINATION OF THE ESPP
The ESPP will terminate on February 28, 2029 unless terminated earlier pursuant to the ESPP. The Board may, in its sole discretion, terminate the ESPP at any time without any obligation on account of such termination, except as otherwise provided in the ESPP. Upon termination of the ESPP, the cash and shares, if any, held in the account of each participant will be distributed to the participant. The foregoing notwithstanding, if, prior to the termination of the ESPP, the Board will have adopted a substantially similar plan, the Board may in its discretion determine that the account of each participant under the ESPP will be carried forward and continued as the account of such participant under such other plan, subject to the right of any participant to request distribution of the cash and shares, if any, held for his or her account.
| THE GREENBRIER COMPANIES |
52
PROPOSAL 4—APPROVE AN AMENDMENT AND RESTATEMENT OF THE
2014 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
RESTRICTIONS ON DIRECTORS AND EXECUTIVE OFFICERS
Notwithstanding any provision of the ESPP or of any subscription, payroll deduction authorization or other document or instrument to the contrary, directors of the Company and each person who will have been designated by the Board as an “executive officer” for purposes of Section 16 of the Securities Exchange Act will be bound by the provisions in the Company’s insider trading policy as may be amended from time to time.
EFFECTIVE DATE OF THE ESPP
If approved by shareholders of the Company, the ESPP will become effective upon the date of the Annual Meeting.
Summary of Material Federal Income Tax Consequences
The following is a general, brief summary of the principal federal income tax consequences of certain awards and transactions under the ESPP. The following summary is based upon an interpretation of present federal tax laws and regulations and may be inapplicable if such laws and regulations are changed. This summary is not intended to be exhaustive or constitute tax advice and does not describe state, local or foreign tax consequences, nor does it describe the consequences to any particular participant.
It is the intention of the Company that the ESPP will qualify as an employee stock purchase plan under Section 423 of the Code. The provisions of the ESPP, accordingly, will be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Code. The Company believes that the following federal income tax consequences normally will apply with respect to the ESPP.
The payroll deductions withheld from a participant’s pay under the ESPP will be taxable income to the participant and must be included in the participant’s gross income for federal income tax purposes in the year which such amounts otherwise would have been received.
A participant will not be required to recognize any income for federal income tax purposes either at the time the participant is granted an option (which will be on the first day of the offering period) or by virtue of the exercise of the option (which will take place on the last day of such offering period). The federal income tax consequences of a sale or disposition of shares acquired under the ESPP depend in part on the length of time the shares are held by a participant before such sale or disposition. If a participant sells or otherwise disposes of shares acquired under the ESPP (other than any transfer resulting from death) within two years after the first day of the applicable offering period or one year after the shares are acquired (the “Holding Period”), the participant must recognize ordinary compensation income in the year of such disposition in an amount equal to the excess of (i) the fair market value of the shares on the date such shares were acquired over (ii) the price paid for the shares by the participant. If the first day of the applicable offering period is the same date as the date that the shares are acquired, the Holding Period will be two years after such date. The amount of “ordinary” compensation income recognized by the participant will be added to the participant’s basis in such shares for purposes of determining any additional gain or loss realized by the participant on the sale of the shares. Any such additional gain or loss will be taxed as capital gain or loss, long or short, depending on how long the participant held the shares.
If a participant sells shares acquired under the ESPP after the Holding Period or if the participant dies, the participant or the participant’s estate must include as ordinary compensation income in the year of sale (or the taxable year ending upon death) an amount equal to the lesser of (1) the excess of the fair market value of the shares on the first day of the offering period over the option price (determined as if the option had been exercised on the first day of the offering period), or (2) the excess of the fair market value of the shares at the time of sale of the shares or on the date of death over the price paid for the shares by the participant. Except in the case of a transfer as a result of death, the amount of ordinary income recognized by the participant will be added to the participant’s basis in such shares. Any gain realized upon the sale in excess of such basis will be taxed as a long-term capital gain. Any loss realized will be treated as long-term capital loss.
The Company will not receive any income tax deduction as a result of issuing shares pursuant to the ESPP, except to the extent that a participant is required to include as ordinary income amounts arising upon the sale or disposition of such shares as discussed above.
2024 PROXY STATEMENT | |
53
PROPOSAL 4—APPROVE AN AMENDMENT AND RESTATEMENT OF THE
2014 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
Participants under the ESPP do not receive a fixed option grant. Instead, purchases under the ESPP are determined by the contribution levels of participating employees, our stock price at the time of any purchases, and regulatory limits. The following table shows the number of shares purchased under the 2014 Plan since its inception in 2014 for the specified individuals and groups:
Name and position | Dollar value ($) | Number of units | |||||||
LORIE L. TEKORIUS
|
| 5,812 | |||||||
ADRIAN J. DOWNES
|
|
|
| 0 | |||||
BRIAN J. COMSTOCK Executive Vice President, | 0 | ||||||||
WILLIAM KRUEGER Senior Vice President, President Greenbrier Manufacturing Operations | 0 | ||||||||
MARTIN R. BAKER Senior Vice President, Chief Legal and Compliance Officer | 0 | ||||||||
EXECUTIVE GROUP | 9,836 | ||||||||
NON-EXECUTIVE DIRECTOR GROUP | 0 | ||||||||
NON-EXECUTIVE DIRECTOR NOMINEE GROUP | 0 | ||||||||
EACH ASSOCIATE OF ANY DIRECTOR, EXECUTIVE OFFICER OR NOMINEE | 0 | ||||||||
EACH OTHER PERSON WHO RECEIVED 5 PERCENT OF SHARES | 0 | ||||||||
NON-EXECUTIVE OFFICER EMPLOYEE GROUP | 194,650 | ||||||||
Equity Compensation Plan Information
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted Average Warrants, and Rights(1) | (c) Number of Securities Equity Compensation Plans | |||||||||
Equity compensation plans approved by security holders(2) | 972,279 | (3) | N/A | 1,778,791 | (4) | |||||||
Equity compensation plans not approved by security holders | None | N/A | None | |||||||||
| (1) | Does not include shares issuable upon vesting of outstanding RSUs and PSUs, which have no exercise price and are included in column (a). |
| (2) | Includes the 2017 A&R Plan and the 2021 Stock Incentive Plan. |
| (3) | Represents 301,869 shares to be issued upon settlement of RSUs and PSUs under our 2017 A&R Plan and 670,410 shares to be issued upon settlement of RSUs and PSUs under our 2021 Stock Incentive Plan. For performance-based awards, represents number of shares issuable at target levels of performance. |
| (4) | Represents 1,233,277 shares available for grant under the 2021 Stock Incentive Plan and 545,514 shares available to purchase under the 2014 Plan. Our 2017 A&R Plan was terminated on January 6, 2021 with respect to future awards. |
| THE GREENBRIER COMPANIES |
54
PROPOSAL 4—APPROVE AN AMENDMENT AND RESTATEMENT OF THE
2014 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
The ESPP is being submitted to shareholders in order for the ESPP to continue to qualify for tax-favored treatment under Section 423 of the Code. In order for this Proposal 4 to be approved, the number of votes cast “FOR” approval must exceed the number of votes cast “AGAINST” approval. Broker discretionary voting of uninstructed shares is not permitted on this Proposal 4. Abstentions will not affect the outcome of voting on this Proposal 4. If no instructions are given on your proxy, the proxy will be voted “FOR” approval.
| THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF the amendment and restatement of the 2014 Employee Stock Purchase Plan, as amended. Unless marked otherwise, proxies received will be voted FOR this proposal. |
2024 PROXY STATEMENT | |
55
OWNERSHIP OF GREENBRIER
COMMON STOCK
Stock Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to beneficial ownership of the Company’s Common Stock (the only outstanding class of voting securities of the Company) by each of our directors or nominees for director, by each of our Named Executive Officers, by all of our current directors and executive officers as a group, and by each person who is known to the Company to be the beneficial owner of more than five percent of the Company’s outstanding Common Stock. We believe the persons and entities named below hold sole voting and investment power with respect to the shares shown opposite their respective names, unless otherwise indicated in the footnotes. Unless otherwise indicated in the table or footnotes below, the address for each beneficial owner is c/o The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035. The information with respect to each person or entity specified is as supplied or confirmed by such person or entity, is based upon statements filed with the SEC or is based upon our knowledge, and is as of September 30, 2022,2023, unless otherwise indicated in the footnotes.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) |
| Percent of Class(2) |
| ||||||||||||||||
William A. Furman | 317,369 | (4) | ||||||||||||||||||
One Centerpointe Drive, Suite 200 Lake Oswego, Oregon 97035 | ||||||||||||||||||||
Thomas B. Fargo | 17,467 | (3)(5) | (4) | |||||||||||||||||
Wanda F. Felton | 11,081 | (3)(6) | (4) | |||||||||||||||||
Antonio O. Garza | 9,604 | (4) | ||||||||||||||||||
James R. Huffines | 11,409 | (4) | ||||||||||||||||||
Graeme A. Jack | 57,736 | (3) | (4) | |||||||||||||||||
David L. Starling | 13,030 | (3)(7) | (4) | |||||||||||||||||
Charles J. Swindells | 38,298 | (4) | ||||||||||||||||||
Wendy L. Teramoto | 22,577 | (4) | ||||||||||||||||||
Kelly M. Williams | 15,770 | (3)(8) | (4) | |||||||||||||||||
Lorie L. Tekorius | 135,909 | (3) | (4) | |||||||||||||||||
Alejandro Centurion | 47,274 | (3) | (4) | |||||||||||||||||
Brian J. Comstock | 35,946 | (3) | (4) | |||||||||||||||||
Adrian J. Downes | 21,533 | (3)(9) | (4) | |||||||||||||||||
All directors and executive officers as a group (15 persons)(11) | 761,475 | (10) | 2.32 | % | ||||||||||||||||
BlackRock, Inc. | 5,256,077 | (12) | 16.10 | % | ||||||||||||||||
55 East 52nd Street New York, NY 10055 | ||||||||||||||||||||
The Vanguard Group | 3,566,967 | (13) | 10.92 | % | ||||||||||||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||||||||||
Dimensional Fund Advisors LP | 2,342,167 | (14) | 7.17 | % | ||||||||||||||||
Building One 6300 Bee Cave Road Austin, TX 78746 | ||||||||||||||||||||
Franklin Mutual Advisors | 1,873,641 | (15) | 5.74 | % | ||||||||||||||||
101 John F. Kennedy Parkway Short Hills, NJ 07078 | ||||||||||||||||||||
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class(2) | ||||||||
WILLIAM A. FURMAN | 253,018 | (4) | ||||||||
THOMAS B. FARGO | 25,669 | (3) | (4) | |||||||
WANDA F. FELTON | 8,239 | (3)(5) | (4) | |||||||
ANTONIO O. GARZA | 13,022 | (4) | ||||||||
JAMES R. HUFFINES | 11,409 | (6) | (4) | |||||||
GRAEME A. JACK | 61,154 | (3) | (4) | |||||||
PATRICK J. OTTENSMEYER | — | — | ||||||||
CHARLES J. SWINDELLS | 32,445 | (4) | ||||||||
WENDY L. TERAMOTO | 24,710 | (4) | ||||||||
KELLY M. WILLIAMS | 19,188 | (3)(7) | (4) | |||||||
LORIE L. TEKORIUS | 170,465 | (3) | (4) | |||||||
MARTIN R. BAKER | 52,294 | (3) | (4) | |||||||
BRIAN J. COMSTOCK | 45,582 | (3) | (4) | |||||||
ADRIAN J. DOWNES | 26,709 | (3)(8) | (4) | |||||||
WILLIAM KRUEGER | 16,103 | (3) | (4) | |||||||
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (18 PERSONS)(10) | 788,848 | (9) | 2.54 | % | ||||||
BLACKROCK, INC. 55 East 52nd Street | 5,660,072 | (11) | 18.32 | % | ||||||
THE VANGUARD GROUP 100 Vanguard Blvd. | 3,716,088 | (12) | 12.03 | % | ||||||
DIMENSIONAL FUND ADVISORS LP Building One | 2,383,129 | (13) | 7.72 | % | ||||||
FRANKLIN MUTUAL ADVISORS 101 John F. Kennedy Parkway | 2,320,037 | (14) | 7.51 | % | ||||||
BARROW HANLEY GLOBAL INVESTORS 2200 Ross Avenue, 31st Floor | 1,677,811 | (15) | 5.43 | % | ||||||
| THE GREENBRIER COMPANIES |
56
OWNERSHIP OF GREENBRIER COMMON STOCK
| (1) | More than one person may be deemed to be a beneficial owner of the same securities as determined in accordance with the rules of the SEC. In certain cases, voting and investment power may be shared by spouses under applicable law. The inclusion of shares in this table shall not be deemed an admission of beneficial ownership of any of the reported shares for purposes of Sections 13(d) or 13(g) of the Exchange Act or for any other purpose. |
| (2) | Calculated based on number of outstanding shares as of September 30, |
| (3) | Includes: (a) time-vesting RSUs that vest within 60 days after September 30, |
| (4) | Less than 1%. |
| (5) |
|
|
| |||||||||||
|
Excludes |
| (6) | Excludes |
| (7) |
|
Excludes 6,481 shares held in the Nonqualified Deferred Compensation Plan that are not acquirable within 60 days after September 30, |
Excludes 39,518 shares held in the Nonqualified Deferred Compensation Plan that will be settled solely in cash. |
Includes |
A portion of these shares for certain of the individuals is subject to certain vesting requirements. Excludes 740 shares held by Ricardo Galvan in the Nonqualified Deferred Compensation Plan that will be settled solely in cash. |
As reported in Amendment No. 4 to Schedule 13G dated December 31, |
As reported in Amendment No. |
As reported in Amendment No. |
As reported in Amendment No. |
| (15) | As reported in Schedule 13G dated December 31, 2022, and filed with the SEC on February 15, 2023. Barrow Hanley Global Investors has sole voting power over 1,665,410 shares reported, shared voting power over 12,401 shares reported and sole dispositive power over all 1,677,811 shares reported. Barrow Hanley Global Investors does not have shared dispositive power over any of the shares reported. |
2024 PROXY STATEMENT | |
57
| PROPOSAL
5 |
|
| RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS |
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
For fiscal years2023 and 2022, and 2021, KPMG LLP (“KPMG”) performed professional services for the Company.
The Audit Committee has appointed, and recommends the approval of the appointment of, KPMG to audit the consolidated financial statements of the Company for fiscal 2023.2024. Shareholder ratification of the Audit Committee’s selection of KPMG as the Company’s independent registered public accounting firm is not required by the Company’s Amended and Restated Bylaws or otherwise. The Board of Directors, however, is submitting the selection of KPMG to the shareholders for ratification. In the event the shareholders do not ratify the appointment of KPMG, the selection of an independent registered public accounting firm will be determined by the Audit
Committee after careful consideration of any information submitted by the shareholders.
A representative of KPMG is expected to be present at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions.
In order for this Proposal 35 to be approved, the number of votes cast “FOR” approval must exceed the number of votes cast “AGAINST” approval. Broker discretionary voting of uninstructed shares is permitted on this Proposal 3.5. Abstentions will not affect the outcome of voting on this Proposal 3.5.
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF | this proposal. |
The Audit Committee pre-approved 100% of the audit services, audit-related services, tax services and other services provided by KPMG in fiscal 20222023 and 2021.2022.
Audit, audit-related, tax and all other fees paid to KPMG for fiscal 2023 and 2022 aggregated $5,561,633 and 2021 aggregated $5,200,533 and $3,906,120 and were composed of the following:
|
| 2022 | 2021 | 2023 | 2022 | ||||||||||||||
Audit Fees | $ | 4,206,257 | $ | 3,167,074 | $ | 4,352,445 | $ | 4,206,257 | ||||||||||
Audit-Related Fees |
| 435,913 |
| 155,320 | 336,742 | 435,913 | ||||||||||||
|
| |||||||||||||||||
Total Audit and Audit-Related Fees | $ | 4,642,170 | $ | 3,322,394 | $ | 4,689,187 | $ | 4,642,170 | ||||||||||
Tax Fees |
| 558,362 |
| 555,166 | 872,445 | 558,362 | ||||||||||||
All Other Fees |
| — |
| 28,599 | — | — | ||||||||||||
|
| |||||||||||||||||
Total Audit, Audit-Related and Tax Fees | $ | 5,200,533 | $ | 3,906,120 | $ | 5,561,633 | $ | 5,200,533 | ||||||||||
Audit Fees. This category consists of fees billed for the audit of the Company’s annual financial statements and international statutory audits for fiscal 20222023 and 20212022 and for consents, comfort letters, reviews of registration statements and similar
services that include or incorporate the audited financial statements and for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q and Sarbanes-Oxley Section 404 review.
Audit-Related Fees. This category consists of fees billed for Statement on Standards for Attestation Engagements 16 audits and other attest services related to financial reporting for fiscal 20222023 and 2021.2022.
Tax Fees. This category consists of fees billed for tax return preparation and for services associated with routine tax advice concerning federal, state, local and foreign tax matters.
All Other Fees. This category consists of fees billed for professional services other than the services reported in the categories above, including permissible business process advisory and consulting services.
The Audit Committee has adopted a policy for the pre-approval of services provided by the independent auditors. A copy of the Policy Regarding the Approval of Audit and Non-Audit Services Provided by the Independent Auditor is attached as Appendix A. The Audit Committee has considered whether the provision by KPMG of non-audit services is compatible with maintaining KPMG’s independence.
| THE GREENBRIER COMPANIES | |||||||||||||
THE GREENBRIER COMPANIES
2023 Proxy Statement
47
58
PROPOSAL 5—RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Board of Directors
The Greenbrier Companies, Inc.
The Audit Committee of the Board of Directors is established pursuant to the Company’s Amended and Restated Bylaws, as amended, and the Audit Committee Charter adopted by the Board of Directors. A copy of the Charter, as amended, is available to shareholders without charge upon request to: Investor Relations, The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035 or on the Company’s website at www.gbrx.com.https://investors.gbrx.com/corporate-governance.
Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and for issuing a report thereon. The Audit Committee’s responsibility is generally to monitor and oversee these processes, as described in the Charter.
For fiscal 2022,2023, the members of the Audit Committee of the Board of Directors were Graeme A. Jack (Chairman), Wanda F. Felton, James R. Huffines, Wendy L. Teramoto and Kelly M. Williams. Each member of the Audit Committee who served during fiscal 20222023 is, or during the time of their service was, an independent director as defined under the rules of the New York Stock Exchange (NYSE). The Board annually reviews applicable standards and definitions of independence for Audit Committee members and has determined that each member of the Audit Committee meets such standards.
With respect to the year ended August 31, 2022,2023, in addition to its other work, the Audit Committee:
Reviewed and discussed with the Company’s management and independent auditors the effectiveness of the Company’s internal controls and the audited financial statements of the Company as of August 31, 2022, and for the year then ended;
| • | Reviewed and discussed with the Company’s management and independent auditors the effectiveness of the Company’s internal controls and the audited financial statements of the Company as of August 31, 2023, and for the year then ended; |
Discussed with the independent auditors the matters required to be discussed by the applicable requirements of the PCAOB and the Commission; and
| • | Discussed with the independent auditors the matters required to be discussed by the applicable requirements of the PCAOB and the Commission; and |
| • | Received from the independent auditors written disclosures and a letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and discussed with the auditors the firm’s independence. |
Received from the independent auditors written disclosures and a letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence and discussed with the auditors the firm’s independence.
Based upon the review and discussions summarized above, together with the Committee’s other deliberations and Item 8 of SEC Form 10-K, and subject to the limitations on the Audit Committee’s role and responsibilities referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements of the Company, as of August 31, 2022,2023, and for the year then ended, be included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2022,2023, for filing with the SEC.
Graeme A. Jack, Chairman
Wanda F. Felton
James R. Huffines
Wendy L. Teramoto
Kelly M. Williams
The above shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
Mr. Garza and Mr. Ottensmeyer each joined the Audit Committee in October 2023 and thus did not contribute to this Audit Committee Report or the matters discussed herein.
2024 PROXY STATEMENT | ||||||||
|
|
| |
59
ANNUAL MEETING
INFORMATION
Our Board of Directors has authorized us to conduct the Annual Meeting solely online via the internet through an online shareholder tools.meeting platform. This format empowers shareholders to participate fully from any location around the world, at no cost.
To participate in our virtual Annual Meeting, including to vote, ask questions and to view the list of registered shareholders as of the record date during the meeting, visit www.virtualshareholdermeeting.com/GBX2024 with your 16-digit control number included in the notice, on your proxy card, or in the instructions that accompanied your proxy materials. If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, follow the instructions from your broker or bank. We welcome questions and comments from our shareholders. Beginning 21 days before the date of the Annual Meeting, on December 15, 2023, shareholders entitled to vote at the Annual Meeting will have the opportunity to submit written questions to the Company through the virtual meeting website. We encourage you to submit your questions as early as possible, though questions can also been submitted online once the Annual Meeting has begun.
The Annual Meeting will begin promptly at 12:00 p.m. Pacific Time on January 5, 2024. We encourage you to access the virtual meeting website prior to the start time. Online check-in will begin at 11:45 a.m. Pacific Time, and you should allow reasonable time for the check-in procedures. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting log-in page.
Voting Securities and Solicitation of Proxies
This Proxy Statement is furnished in connection with the solicitation by our Board of proxies to be voted at the 20232024 Annual Meeting of Shareholders of the Company. Any proxy may be revoked by a shareholder at any time prior to its exercisethe shares being voted by the proxy during the Annual Meeting. A shareholder may revoke a proxy upon written notice to the Secretary of the Company, by delivering by internet, telephone or mail a duly executed proxy bearing a later date, or by voting online during the meeting. Shareholders can vote via the internet in advance of or during the meeting. The voting procedures are designed to comply with Oregon law, to authenticate the shareholder’s identity and to allow shareholders to vote their shares and confirm that their voting instructions have been properly recorded. Shareholders who attend the virtual Annual Meeting should follow the instructions at www.virtualshareholdermeeting.com/GBX2023 to vote or submit questions during the meeting. As of November 3, 2022,2, 2023, there were 32,782,69231,102,468 shares of Common Stock outstanding and entitled to vote, and a majority, or 16,391,34715,551,235 of these shares present by proxy or in person, will constitute a quorum for the transaction of business. Each share of Common Stock entitles the holder to one vote on each matter that may properly come before the meeting.
The cost of soliciting proxies will be borne by us.the Company. In addition to solicitation by mail, proxies may be solicited personally by our officers and regular employees orby any lawful mode of communication, including by telephone, facsimile, electronic transmission or express mail.mail, among others. We have also engaged Innisfree M&A Incorporated to assist in the distribution of proxy materials and the solicitation of votes as described below. We will pay Innisfree a fee of $12,500$15,000 plus customary costs and expenses for these services. The Company has agreed to indemnify Innisfree against certain liabilities arising out of or in connection with its engagement. We will reimburse brokerage houses, banks and other custodians, nominees and fiduciaries for their reasonable expenses incurred in forwarding proxies and proxy material to their principals.
If you requested a print version of our proxy materials and share an address with another shareholder, you may receive only one set of proxy materials (including our annual report to shareholders and proxy statement) unless you have provided
contrary instructions. If you wish to receive a separate set of our proxy materials now or in the future, we will promptly deliver a separate copy of these materials to you upon written or oral request made to us at: Investor Relations, The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035, Phone: (503) 684-7000, Fax: (503) 684-7553. Similarly, if you share an address with another shareholder and have received multiple copies of our proxy materials, you may write to us at the above address or fax number to request delivery of a single copy of these materials.
| THE GREENBRIER COMPANIES |
60
ANNUAL MEETING INFORMATION
Other Business
To have been eligible for inclusion in the Company’s proxy materials for this Annual Meeting, a proposal intended to be presented by a shareholder for action at that meeting, in addition to complying with the shareholder eligibility and other requirements of the SEC’s rules and our Amended and Restated Bylaws governing such proposals, must have been received not later than July 17, 2023, by the Secretary of the Company at the Company’s principal executive offices, One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.
Management knows of no other matters, beyond those proposals included in this Proxy Statement, that will be presented for action at the Annual Meeting. However, the proxy givesproxies validly executed by shareholders give discretionary authority to the persons named in the proxy to represent and to vote the shares subject to such proxies that are entitled to vote in the event that any other matters should be properly presented to the meeting or any adjournments or postponements thereof.
We file annual, quarterly, and specialcurrent reports, proxy statements and other information with the SEC. Shareholders may inspect and copy these materials at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the operation of the Public Reference Room. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov. Copies of our annual, quarterly and specialcurrent reports Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter and the Company’s Corporate Governance Guidelines are available to shareholders without charge upon request to: Investor Relations, The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035 or on the Company’s website at www.gbrx.com.
To be eligible for inclusion in the Company’s proxy materials for the 2023 Annual Meeting, a proposal intended to be presented by a shareholder for action at that meeting, in addition to complying with the shareholder eligibility and other requirements of the SEC’s rules governing such proposals, must have been received not later than July 13, 2022, by the Secretary of the Company at the Company’s principal executive offices, One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.
|
|
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Shareholders may bring business before an annual meeting only in compliance with the Company’s Amended and Restated Bylaws. For business to be properly brought before the 20242025 Annual Meeting by a shareholder other than in accordance with Rule 14a-8 under the Exchange Act, written notice must be givendelivered to, or mailed and received by, the Secretary of the Company in writing on or before the close of business on July 17, 2023.16, 2024. As to each proposal, the notice must set forth:forth, among other things as described in the Company’s Amended and Restated Bylaws: (A) as to the proposing shareholder, (i) the shareholder’s name and address; (ii) the class or series and number of shares beneficially owned by the shareholder; (iii) the dates on which such shares were acquired; (iv) the investment intent of such acquisition; (v) the material terms of any derivative or synthetic arrangement in respect of any series or class of shares of the Company held by such shareholder; (vi) certain other material relationships between the Company and the shareholder; and (vii) any other information relating to the shareholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for such matter pursuant to Section 14 of the Exchange Act; and (B) as to the proposal, (i) a brief description of the business and reasons for conducting such business at the annual meeting; (ii) the shareholder’s name and address as they appear on the Company’s books; (iii) the class and number of shares beneficially owned by the shareholder; (iv)(ii) any material interest of the shareholder in the proposed business and a description of all arrangements between the shareholder and any other personentity (including their names) in connection with the proposal; and (v) a representation that theproposal. The shareholder intends to appearmust be present in person at the annual meeting2025 Annual Meeting to properly bring the proposed business before the meeting.any such proposal. The presiding officer at an annual meeting will determine whether a matter is properly brought before the meeting and, if not properly brought, the matter will not be considered or acted upon.
Shareholders may nominate a candidate for election as a director only in compliance with the Company’s Amended and Restated Bylaws. For a director candidate to be nominated by a shareholder for the 20242025 Annual Meeting, written notice of the nomination must be delivered to, or mailed and received by, the Secretary of the Company in writing on or before the close of business on July 17, 2023.16, 2024. The notice must (i) set forth, among other things as described in the Company’s Amended and Restated Bylaws, (A) as to each director nominee, (A) the name, age, business address and residence address of the nominee, (B) the principal occupation or employment of the nominee, (C) the class or series and number of shares of capital stock of the Company owned beneficially or of record by the nominee or in which the nominee has an economic interest through derivative instruments, and (D) any other(i) all information relating to the nomineesuch candidate that wouldis required to be requireddisclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for director elections in a contested election pursuant to Section 14 of the Exchange Act (including such candidate’s signed written consent to being named in the proxy statement and accompanying proxy card and to serving as a director for a full term if elected); (ii) certain material relationships between the shareholder and the rulescandidate; (iii) a completed and regulations thereunder;signed questionnaire, representation and (ii) set forthagreement as provided for in the Company’s Amended and Restated Bylaws; and (iv) such other information in order for the Board to determine the eligibility of such candidate to be an independent director or to comply with the qualification standards and additional selection criteria in accordance with the Company’s Corporate Governance Guidelines; and (B) as to the shareholder giving the notice, (A)(i) the shareholder’s name and record address of the shareholder, (B)address; (ii) the class or series and number of shares beneficially owned by the shareholder; (iii) the dates on which such shares were acquired; (iv) the investment intent of capital stocksuch acquisition; (v) the material terms of any derivative or synthetic arrangement in respect of any series or class of shares of the Company owned beneficially or of recordheld by the shareholder or in which the shareholder has an economic interest through derivative instruments, (C) a description of all arrangementssuch shareholder; (vi) certain other material relationships between the shareholderCompany and
each proposed nominee the shareholder; and any other person (including their names) pursuant to which the nomination is made by the shareholder, (D) a representation that the shareholder intends to appear in person or by proxy at the annual meeting to nominate the candidate named in the notice, and (E)(vii) any other information relating to the shareholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for director electionssuch matter pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder.Act. The foregoing noticeshareholder must be accompanied bypresent in person at the 2025 Annual Meeting to properly bring any such nomination. The presiding officer at an annual meeting will determine whether a signed written consentnominee is properly brought before the meeting and, if not properly brought, such nominee will not be considered or acted upon.
2024 PROXY STATEMENT | |
61
ANNUAL MEETING INFORMATION
The description of each proposed nominee named to servecertain provisions of the Company’s Amended and Restated Bylaws above is intended as a summary and is qualified in its entirety by reference to the relevant provisions therein regarding the requirements for making shareholder proposals and nominating director if elected.candidates.
To be eligible for inclusion in the Company’s proxy materials for the 20242025 Annual Meeting pursuant to Rule 14a-8 under the Exchange Act, a proposal to be presented by a shareholder at that meeting, in addition to complying with the shareholder eligibility and other requirements of the SEC’s rules governing such proposals, must be received not later than July 17, 2023,16, 2024, by the Secretary of the Company at the Company’s principal executive offices, One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035.
In addition to satisfying the foregoing requirements under the Company’s Amended and Restated Bylaws, in order to comply with the SEC’s universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s Board’s nominees must provide notice to the Secretary of the Company that sets forth the information required by Rule 14a-19 under the Exchange Act no later than November 7, 2023.6, 2024.
According to the provisions of Schedule 14A under the Securities Exchange Act of 1934, the information set forth in the following section of our annual report on Form 10-K is incorporated into this Proxy Statement by reference: “Information about our Executive Officers” from Part I of the Company’s Annual Report on Form 10-K for the year ended August 31, 2022,2023, as filed with the SEC on October 31, 2022.25, 2023.
A copy of the Company’s 20222023 Annual Report on Form 10-K will be availableprovided to shareholders without charge upon oral or written request to: Investor Relations, The Greenbrier Companies, Inc., One Centerpointe Drive, Suite 200, Lake Oswego, Oregon 97035, orPhone: (503) 684-7000 and is also available on the Company’s website at www.gbrx.com.
| THE GREENBRIER COMPANIES | |||||||
50
2023 Proxy Statement
THE GREENBRIER COMPANIES
62
POLICY REGARDING THE
APPROVAL OF AUDIT AND NON-AUDIT
SERVICES PROVIDED BY THE
INDEPENDENT AUDITOR
Purpose and Applicability
We recognize the importance of maintaining the independent and objective viewpoint of our independent auditors.auditor. We believe that maintaining independence, both in fact and in appearance, is a shared responsibility involving management, the Audit Committee, and the independent auditors.auditor.
The CompanyGreenbrier Companies, Inc. (the “Company”) (which includes consolidated subsidiaries as used herein) recognizes that the Company’s independent registered public accounting firm (the “Audit Firm”) possesses a unique knowledge of the Company, and, as a worldwide firm, can provide necessary and valuable services to the Company in addition to the annual audit. Consequently, this policy sets forth guidelines and procedures to be followed by the Company when retaining the Audit Firm to perform audit and non-audit services.
Policy Statement
All services provided by the Audit Firm, both audit, audit-related and non-audit, must be pre-approved by the Audit Committee or a Designated Member (as defined below). Although the Sarbanes-Oxley Act of 2002 permits de minimisexceptions, our policy is to pre-approve all audit, audit-related and non-audit services. Examples of audit, audit-related and permitted non-audit services include:
| • | Audits of the Company’s financial statements required by SEC rules, lenders, statutory requirements, regulators, and others, including quarterly review procedures. |
| • | Consents, comfort letters, reviews of registration statements, periodic reports and other documents filed with the SEC that incorporate or include the audited financial statements of the Company, including responding to the SEC or other regulators regarding such financial statements. |
| • | Attestation services. |
| • | Employee benefit plan audits. |
| • | Consultations as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of new or proposed rules, standards or interpretations by the SEC, FASB or other regulatory or standard setting bodies. |
| • | Tax compliance and related support for any tax returns filed by the Company, including returns filed by any executive or expatriate under a company-sponsored program. |
| • | Tax advice, planning and support. |
| • | Merger and acquisition due diligence services. |
The Audit Committee or a Designated Member may pre-approve at any time up to one year in advance the provision of particular types of permissible routine and recurring audit-related, tax and other non-audit services, in each case described in reasonable detail and subject to any specific annual monetary limit also approved by the Audit Committee or a Designated Member. The Audit Committee must be informed about each such service that is actually provided.
For each proposed service, the independent auditorsAudit Firm shall provide detailed back-up documentation at the time of approval to permit the Audit Committee or a Designated Member to make a determination whether the provision of such services would impair the auditor’sAudit Firm’s independence. Such documentation should be detailed enough so detailed that there should never be anyno doubt as to whether any particular service was brought to the attention of, considered and pre-approved by the Audit Committee or a Designated Member. At a minimum, in connection with seeking pre-approval for a proposed service or class of services, the Company’s independent auditorAudit Firm shall (i) provide the Audit Committee or a Designated Member with a written description of the nature and scope of the service, including the fee structure for the engagement; (ii) describe and discuss with the Audit Committee or a Designated Member the potential effects of the service on the firm’sAudit Firm’s independence; and (iii) document the substance of its discussion with the Audit Committee or a Designated Member. As an example of
2024 PROXY STATEMENT | |
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APPENDIX A—POLICY REGARDING THE APPROVAL OF AUDIT AND NON-AUDIT SERVICES
the level of detail required for pre-approval, in connection with pre-approval of the preparation of the Company’s federal, state and local corporate tax returns, the back-up documentation provided should identify clearly each return, including information on each jurisdiction where a return is to be filed, the type or types of tax return, and how often each return is to be prepared and filed.
When considering whether to grant an approval, the Audit Committee or a Designated Member should consider the nature, scope and fees of the service to be provided to the Company as well as the principles and guidance established by the SEC and PCAOB with respect to auditor independence, including the fact that an auditor cannot (i) function in the role of management; (ii) audit his or herits own work; or (iii) serve in an advocacy role for the Company.
Delegation of Pre-Approval
The Audit Committee may delegate to one or more designated member(s)is also mindful of the relationship between fees for audit and non-audit services in deciding to pre-approve any such services and may choose to determine, for a particular fiscal year, the appropriate ratio between the total amount of fees for Audit, Committee (a “Designated Member”), who is independentAudit-Related and Tax services and the total amount of fees for certain permissible non-audit services as defined under the standards of the NYSE, the authority to grant pre-approvals of permitted services
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(defined below), or classes of permitted services, to be provided by the Audit Firm. The decisions of a Designated Member to pre-approve a permitted service shall be reported to the Audit Committee at each of its regularly scheduled meetings. The Audit Committee Chair shall be a Designated Member with the authority to grant pre-approvals when such pre-approvals, in the judgement of the Audit Committee Chair, are appropriate to be granted prior to an Audit Committee meeting.
All Other services. All fees paid to the Audit Firm will be disclosed in the Company’s annual proxy statement in accordance with applicable SEC rules, including disclosure of the amount of Audit Fees, Audit RelatedAudit-Related Fees, Tax Fees and All Other Fees.
Delegation of Pre-Approval
The Audit Committee may delegate to one or more designated member(s) of the Audit Committee (a “Designated Member”), who is independent as defined under the standards of the New York Stock Exchange, the authority to grant pre-approvals of permitted services (defined below), or classes of permitted services, to be provided by the Audit Firm. The decisions of a Designated Member to pre-approve a permitted service shall be reported, for informational purposes only, to the Audit Committee at each of its regularly scheduled meetings. The Audit Committee Chair shall be a Designated Member with the authority to grant pre-approvals when such pre-approvals, in the judgment of the Audit Committee Chair, are appropriate to be granted prior to an Audit Committee meeting.
Prohibited Services
The Company may not engage the Audit Firm to provide the non-audit services described below to the Company, unless it is reasonable to conclude that the results of these services will not be subject to audit procedures during an audit of the Company’s financial statements:Company:
| 1. | Bookkeeping or Other Services Related to the Company’s Accounting Records or Financial Statements. The Audit Firm may not maintain or prepare the Company’s accounting records or prepare the Company’s financial statements that are either filed with the SEC or form the basis of financial statements filed with the |
| 2. | Appraisal or Valuation Services, Fairness Opinions or Contribution-in-Kind Reports. The Audit Firm may not provide appraisal or valuation services when it is reasonably likely that the results of any valuation or appraisal would be material to the Company’s financial statements, or where the Audit Firm would audit the |
| 3. | Actuarial Services. The Audit Firm may not provide |
| 4. | Management Functions or Human Resources. Partners and employees of the Audit Firm may not act temporarily or permanently as a director, officer, or employee of the Company, or perform any decision-making, supervisory, or ongoing monitoring function for the Company. The Audit Firm |
| 5. | Broker-Dealer, Investment Adviser, or Investment Banking Services. The Audit Firm may not serve as a broker-dealer, promoter or underwriter of the Company’s |
| THE GREENBRIER COMPANIES |
A-2
APPENDIX A—POLICY REGARDING THE APPROVAL OF AUDIT AND NON-AUDIT SERVICES
| 6. | Legal Services and Expert Services Unrelated to the Audit. The Audit Firm may not provide any service in which the person providing the service must be admitted to practice before the courts of a U.S. jurisdiction. |
| 7. | Internal Audit Outsourcing. The Audit Firm may not provide any internal audit services relating to the Company’s accounting controls, financial systems, or financial statements, unless it is reasonable to conclude that the results of these services will not be subject to audit procedures during an audit of the Company’s financial statements. |
| 8. | Financial Information Systems Design and Implementation. The Audit Firm may not directly or indirectly operate or supervise the operation of the Company’s information system, or design or implement a hardware or software system that aggregates source data underlying the financial statements or generates information that is significant to the Company’s financial statements, taken as a |
| 9. | Contingent Fee Arrangements. The Audit Firm may not provide services for a contingent fee or a commission. |
| 10. | Other Services. The Audit Firm may not provide any other |
Non-prohibited services shall be deemed “permitted services services” and may be provided to the Company with the pre-approval of a Designated Member or by the full Audit Committee, as described herein.
Audit Committee Review of Services
At each regularly scheduled Audit Committee meeting, the Audit Committee shall review the following:
| • | A report summarizing the services, or grouping of related services, provided by the Audit Firm. |
| • | A listing of newly pre-approved services since its last regularly scheduled meeting. |
At least annually, the Audit Committee shall review, in addition to the fee disclosure in the proxy statement:
| • | An updated projection for the current fiscal year, presented in a manner consistent with the proxy disclosure requirements, of the estimated annual fees to be paid to the Audit Firm. |
Amendments
The Audit Firm.
Effective Date
This policy shall be effective immediately upon approval by the Audit Committee.
Policy last amended by the Audit Committee July 2022.
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
We define EBITDA as Net earnings (loss) before Interest and foreign exchange, Income tax expense (benefit). Depreciation and amortization and Net loss on extinguishment of debt. We believe the presentation of EBITDA provides useful information as it excludes the impact of financing, foreign exchange, income taxes and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s core business. We believe this assists in comparing our performance across reporting periods.
Reconciliation of Net Earnings to Adjusted EBITDA and EPS to Adjusted EPS
(in millions except per share amounts)
EBITDA
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Net Earnings | $ | 46.9 | $ | 35.1 | ||||||
Interest and Foreign Exchange | 57.4 | 43.3 | ||||||||
Loss from Debt Extinguishment | — | 6.3 | ||||||||
Income Tax Expense (Benefit) | 18.1 | (40.2 | ) | |||||||
Depreciation and Amortization | 102.0 | 100.7 | ||||||||
EBITDA | $ | 231.3 | $ | 145.2 | ||||||
COVID-Related Expense Higher than Expectations | — | 5.1 | ||||||||
Adjusted EBITDA | $ | 231.3 | $ | 150.3 | ||||||
EPS
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GAAP EPS | $ | 1.40 | $ | 0.96 | ||||||
Loss from Debt Extinguishment & Incremental Interest Expense from New Convertible Notes | — | 0.20 | ||||||||
COVID-Related Expense Higher than Expectations | — | 0.12 | ||||||||
Adjusted EPS | $ | 1.40 | $ | 1.28 | ||||||
There were no adjustments in Fiscal 2022 to EBITDA and EPS. Fiscal 2021 EBITDA and EPS were adjusted for expenses related to debt refinancing to extend maturities of Greenbrier’s long-term debt by an average of nearly three years and for pandemic-related costs above what was planned.
Long-Term Performance Metrics
EBITDA is defined as net earnings before interest and foreign exchange, income tax expense, depreciation and amortization, excluding significant non-cash charges such as goodwill impairment (to the extent consistent with other public reporting) and may be adjusted for special items as the Compensation Committee deems appropriate.
ROIC is defined as the average annual NOPAT for the measurement period dividedPolicy last reviewed by the average invested capital for the four annual periods beginning from the last day of the prior fiscal year through the last day of the measurement period and may be adjusted for special items as the CompensationAudit Committee deems appropriate. NOPAT is calculated as Earnings from Operations + Earnings (Loss) from unconsolidated affiliates – cash paid during the period for Income taxes.
The tables below provide reconciliations for return on average shareholders’ equity, return on total assets and return on invested capital, which can be found on page 24.
Greenbrier operates on a fiscal year ending August 31 while our direct competitor, Trinity Industries, operates on a calendar year ending December 31. For the purpose of providing a similar comparison to our direct competitor, our performance metrics were based on the last twelve months ending May 31st. At the time of the drafting of this proxy, Trinity Industries’ latest available reported financials were as ofin June 30, 2022.
We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate our efficiency and effectiveness of long-term capital investments and returns to our shareholders on a period-to-period comparison.2023.
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A-3
APPENDIX B
THE GREENBRIER COMPANIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
ReturnThe Greenbrier Companies, Inc.
Employee Stock Purchase Plan
1. Purpose of the Plan. The Greenbrier Companies, Inc. (the “Company”) believes that ownership of shares of its Common Stock, without par value (“Shares”), by employees of the Company and its participating subsidiaries (as defined below) is desirable as an incentive to continuation and enhancement of Company profits and as a means by which employees may share in the rewards of growth and success of the Company. The Company first adopted an Employee Stock Purchase Plan in 1995 (the “1995 Plan”), in order to encourage such employees to become stockholders and to provide a convenient way for employees of the Company and its participating subsidiaries to purchase Shares through payroll deductions. At the termination of the 1995 Plan, the Company adopted the 2004 Employee Stock Purchase Plan (the “2004 Plan”), and at the termination of the 2004 Plan the Company adopted a 2009 Employee Stock Purchase Plan (the “2009 Plan”). At the termination of the 2009 Plan, the Company adopted a 2014 Employee Stock Purchase Plan (the “2014 Plan”). The 2014 Plan, which was scheduled to terminate on Average Shareholders’ Equity (ROE)February 28, 2019, was extended for an additional five years effective as of January 9, 2019 and Returneffective upon approval of shareholders at the Company’s 2024 Annual Meeting of Shareholders is further extended for an additional five years and renamed the “The Greenbrier Companies, Inc. Employee Stock Purchase Plan” (the “Plan”). As extended, the termination date of the Plan is February 28, 2029. The Company intends that the Plan shall qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Administration of the Plan.
2.1 The Plan shall be administered by the Board of Directors. The Board of Directors may promulgate rules and regulations for operation of the Plan, adopt forms for use in connection with the Plan, and decide any question of interpretation of the Plan or rights arising under the Plan. The Board of Directors may consult with counsel for the Company on Average Total Assets (ROA)*any matter arising under the Plan. All determinations and decisions of the Board of Directors shall be binding and conclusive on all persons.
In millions, except percentages2.2 Section 2.1 notwithstanding, the Board of Directors may delegate authority to administer the Plan to the Compensation Committee of the Board of Directors (the “Committee”).
3. Eligible Employees.
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Greenbrier Return on Average Shareholders’ Equity | 2022 | 2021 | 2020 | 2019 | 2018 |
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Earnings from Continuing Operations** | $ | 60.0 | $ | 7.2 | $ | 130.7 | $ | 92.2 | $ | 167.2 | ||||||||||||||
Average Equity*** | $ | 1,461.4 | $ | 1,490.0 | $ | 1,487.4 | $ | 1,419.5 | $ | 1,246.2 |
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Annual Return on average shareholders’ equity | 4.1 | % | 0.5 | % | 8.8 | % | 6.5 | % | 13.4 | % |
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Return on average shareholders’ equity metrics — 1 year, 3 years and 5 years (ROE) | 4.1 | % | 4.5 | % | 6.7 | % | ||||||||||||||||||
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Average Total Assets*** | $ | 3,477.9 | $ | 3,153.7 | $ | 2,935.9 | $ | 2,491.5 | $ | 2,369.4 |
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Annual Return on average total assets | 1.7 | % | 0.2 | % | 4.5 | % | 3.7 | % | 7.1 | % |
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Return on average total assets metrics — 1 year, 3 years and 5 years (ROA) | 1.7 | % |
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Trinity Industries Return on Average Shareholders’ Equity | 2022 | 2021 | 2020 | 2019 | 2018 |
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Earnings from Continuing Operations** | $ | 73.5 | ($ | 133.0 | ) | ($ | 54.9 | ) | $ | 125.3 | $ | 557.0 | ||||||||||||
Average Equity*** | $ | 1,420.6 | $ | 1,979.2 | $ | 2,398.9 | $ | 3,392.8 | $ | 4,604.4 |
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Annual Return on average shareholders’ equity | 5.2 | % | (6.7 | %) | (2.3 | %) | 3.7 | % | 12.1 | % |
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Return on average shareholders’ equity metrics — 1 year, 3 years and 5 years (ROE) | 5.2 | % | (1.3 | %) | 2.4 | % | ||||||||||||||||||
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Average Total Assets*** | $ | 8,452.9 | $ | 8,696.6 | $ | 8,717.7 | $ | 8,747.7 | $ | 9,478.4 |
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Annual Return on average total assets | 0.9 | % | (1.5 | %) | (0.6 | %) | 1.4 | % | 5.9 | % | ||||||||||||||
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Return on average total assets metrics — 1 year, 3 years and 5 years (ROA) | 0.9 | % |
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3.1 Except as indicated in Section 3.2 or Section 3.3, all permanent employees of the Company, and all permanent employees of each subsidiary of the Company that is designated by the Board of Directors of the Company as a participant in the Plan (a “Participating Subsidiary”), are eligible to participate in the Plan. Each subsidiary of the Company that is designated as a Participating Subsidiary under the 2004 Plan as of the date of adoption of this Plan was deemed a Participating Subsidiary under this Plan. The Board of Directors may designate additional Participating Subsidiaries from time to time.
3.2 Any employee who would, after a purchase of Shares under the Plan, own or be deemed to own stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or its subsidiaries shall be ineligible to participate in the Plan. 3.3 A permanent employee is an employee who has been employed by the Company or any of its Participating Subsidiaries for at least three consecutive months (or such other employment period less than two years determined by the Company) and who is in the active service of the Company or any of its Participating Subsidiaries on the date a purchase of Shares is made under the Plan. The foregoing notwithstanding, any employee whose customary employment is 20 hours or less per week or whose customary employment is for not more than five months per calendar year is not considered a permanent employee (unless the Company determines a lesser standard applied uniformly). 4. Participation in the Plan. 4.1 An eligible employee may participate in the Plan by filing with the Company, on forms furnished by the Company, a subscription and payroll deduction authorization. The subscription and payroll deduction authorization shall authorize the Company (or Participating Subsidiary, as the case may be) to make payroll deductions from the employee’s compensation. |
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2024 PROXY STATEMENT | ||||||||
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B-1
APPENDIX B—EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
Return4.2 If payroll deductions are made by a Participating Subsidiary, that subsidiary shall promptly remit the amount of the deduction to the Company or to such bank, trust company, or investment or financial firm (the “Custodian”) as shall be appointed by the Board of Directors.
4.3 No employee shall be allowed to subscribe for a number of Shares under the Plan which would permit his or her rights to purchase Shares under all stock purchase or option plans of the Company and its subsidiaries intended to qualify as an “employee stock purchase plans” under Section 423 of the Code to accrue at a rate which exceeds $25,000 of fair market value of such Shares (determined at the time such shares are offered) for each calendar year in which such right to subscribe or a subscription is outstanding at any time.
4.4 The amount deducted from a participant’s compensation with respect to participation in the Plan shall not exceed five percent of the gross amount of base pay for the pay period to which the deduction relates or such other amount determined by the Company in a uniform manner. A participant may change the amount of his or her payroll deduction only once during any calendar quarter (unless otherwise determined by the Company applied in a uniform manner). A change in payroll deduction may be made for a subsequent pay period only by giving advance written notice to the Company.
4.5 Participation in the Plan shall terminate (a) when an employee gives written or electronic notice to the Company that he or she terminates his or her participation in the Plan, or (b) when an employee ceases to be an eligible employee for any reason, including death or retirement. An eligible employee may reinstate his or her participation in the Plan after termination only once during any calendar year (unless otherwise determined by the Company applied in a uniform manner).
5. Offer to Sell Stock.
Upon receipt and acceptance by the Company of a valid subscription and payroll deduction authorization from a participant, the Company shall offer to sell Shares to such participant. Each date of purchase of Shares under the Plan will be deemed to be the Grant Date with respect to the Shares purchased on Invested Capital (ROIC)*such date.
6. Purchase of Stock.
6.1 On or before the tenth business day of each month, the Company shall remit to the Custodian the total of all deductions made under the Plan during the previous month. The Custodian shall forthwith apply such funds, together with Company Contributions as provided for under Section 7.1 to the purchase of Shares in open market transactions through brokers or dealers at prevailing market prices. Purchases shall be completed on or before the 25th day following the date of the remittance (the “Purchase Date”). Any funds remaining with the Custodian, after the purchase of the maximum number of shares which can be purchased with the remittance, shall be applied to the next month’s purchase.
6.2 Purchases shall be made in the name of the Custodian for the account of The Greenbrier Employee Stock Purchase Plan. Each month, the Custodian shall credit each participant’s account with his or her pro rata share of purchases of Shares under the Plan, including fractional shares to at least the third decimal (or in such other manner determined by the Company in a uniform manner).
6.3 Notwithstanding any other provision of this Plan to the contrary, the maximum number of Shares which shall be issuable pursuant to the Plan, or purchasable by the Custodian pursuant hereto, shall be 750,000 Shares.
6.4 Participants may purchase Shares under the Plan at a discount price of 85% of the market price per Share as of the date of purchase (or such higher price determined by the Company in a uniform manner).
6.5 Notwithstanding any other provision of this Plan to the contrary, the Company may determine to sell newly issued Shares under the Plan in place of open market purchases. In such event, the Committee shall adopt such forms, procedures and rules as it deems appropriate to implement sales of newly issued Shares under the Plan.
7. Company Contributions.
7.1 The Company will contribute to the Plan and remit to the Custodian funds to be added to the funds contributed by participants (via payroll deductions) for the purchase of Shares under the Plan, in the amount of the difference between the discount price at which participants are permitted to purchase Shares (for example, a 15% discount), and the market price of the Shares as of the date of purchase.
7.2 The Company shall remit to the Custodian any Company Contribution concurrently with its remittance to the Custodian of the total of all payroll deductions made under the Plan during the preceding month pursuant to Section 6.1 of the Plan. The Custodian may co-mingle any Company Contribution with other funds held under the Plan and shall apply any Company Contribution to the purchase of Shares in the same manner and under the same terms as described in Section 6.1 of the Plan.
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Greenbrier Return on Invested Capital (ROIC) | 2022 | 2021 | 2020 | 2019 | 2018 |
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Operating Income (EBIT)** | $ | 65.0 | $ | 17.9 | $ | 213.4 | 140.626 | 206.871 | ||||||||||||||||
Taxes Expense (at federal tax rate of 21%) | (13.6 | ) | (3.8 | ) | (44.8 | ) | (29.5 | ) | (43.4 | ) |
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Earnings from unconsolidated subsidiaries | 12.2 | 0.5 | 2.8 | (8.0 | ) | (22.1 | ) |
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Net operating profit after taxes | $ | 63.5 | $ | 14.7 | $ | 171.5 | $ | 103.1 | $ | 141.3 |
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Average Invested Capital*** | $ | 2,817.0 | $ | 2,626.3 | $ | 2,343.4 | $ | 1,909.6 | $ | 1,783.6 |
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Annual Return on average invested capital (ROIC) | 2.3 | % | 0.6 | % | 7.3 | % | 5.4 | % | 7.9 | % |
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Return on average invested capital (ROIC) metrics — 1 year, 3 years and 5 years | 2.3 | % |
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| 3.4 | % |
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Trinity Industries Return on Invested Capital (ROIC) | 2022 | 2021 | 2020 | 2019 | 2018 |
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Operating Income (EBIT)** | $ | 165.3 | $ | 191.8 | $ | 330.4 | 312.7 | 194.5 | ||||||||||||||||
Taxes Expense (at federal tax rate of 21%) | (34.7 | ) | (40.3 | ) | (69.4 | ) | (65.7 | ) | (40.8 | ) |
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Net operating profit after taxes | $ | 130.6 | $ | 151.5 | $ | 261.0 | $ | 247.0 | $ | 153.7 |
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Average Invested Capital*** | $ | 6,701.0 | $ | 7,025.3 | $ | 7,174.6 | $ | 7,315.7 | $ | 7,363.9 | ||||||||||||||
Annual Return on average invested capital (ROIC) | 1.9 | % | 2.2 | % | 3.6 | % | 3.4 | % | 2.1 | % |
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Return on average invested capital (ROIC) metrics — 1 year, 3 years and 5 years | 1.9 | % |
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| 2.6 | % |
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| THE GREENBRIER COMPANIES |
B-2
APPENDIX B—EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
8. Delivery of Shares.
8.1 By appropriate instructions to the Custodian on forms to be provided by the Custodian for such purpose or by following electronic or other procedures prescribed by the Custodian, a participant may from time to time, and subject to applicable law, direct the Custodian to (a) transfer into the participant’s own name all or part of the whole Shares held by the Custodian for the participant’s account and deliver such Shares to the participant; (b) transfer all or part of the whole Shares held for the participant’s account by the Custodian to a regular individual brokerage account in the participant’s own name, either with the firm then acting as Custodian or with another firm, or (c) sell all or part of the whole Shares held by the Custodian for the participant’s account at the market price at the time the order is executed and remit to the participant the net proceeds of sale.
8.2 Upon termination of participation in the Plan, the participant may, subject to applicable law, elect to have the whole Shares held by the Custodian for the account of the participant transferred and delivered in accordance with (a) above, transferred to a brokerage account in accordance with (b) above, or sold in accordance with (c), above. A participant may only obtain cash with respect to a fractional Share reflected in his or her account by sale of the fractional Share to the Custodian or such other manner determined by the Company in a uniform manner. Upon termination of participation in the Plan, the cash balance remaining in a former participant’s account shall be refunded to him or her.
9. Records and Statements. The Custodian shall maintain the records of the Plan. Each participant shall periodically receive a statement showing the current balance of his or her account and the activity of his or her account since the preceding statement date. Participants shall be furnished such other reports and statements as the Board of Directors shall from time to time determine.
10. Expenses of the Plan. The Company shall pay all expenses incident to operation of the Plan, including costs of record keeping, accounting fees, legal fees, fees of the Custodian, commissions and issue or transfer taxes on purchases pursuant to the Plan and on delivery of shares to a participant or into his or her brokerage account. The Company shall not pay expenses, commissions or taxes incurred in connection with sales of Shares by the Custodian at the request of a participant. Expenses to be paid by a participant shall be deducted from the proceeds of sale prior to remittance.
11.Non-U.S. Employees.Without amending the Plan, the Company may grant offers to sell stock or establish other procedures to provide benefits to non-U.S. employees of the Company and its subsidiaries under the Plan on such terms and conditions different from those specified in the Plan as may, in the judgment of the Company, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable (a) to comply with provisions of applicable laws or regulations or conform to the requirements to operate the Plan in a qualified or tax or accounting advantageous manner, (b) to ensure the viability of the benefits under the Plan for eligible non-U.S. employees, or (c) to meet the objectives of the Plan. Without limiting the generality of the foregoing, the Board or its committee is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of base pay, handling of payroll deductions, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold payroll deductions, payment of interest, conversion of local currency, obligations to pay taxes, determination and change of offering periods, establishment of separate offerings, payment procedures, requirement that shares of the Company’s Common Stock acquired through the Plan be held by a specific broker, withholding procedures and handling of stock certificates. Notwithstanding anything to the contrary herein, any such actions taken by the Company with respect to eligible non-U.S. employees of any Participating Subsidiary may be treated as a subplan outside of an “employee stock purchase plan” under Section 423 of the Code and not subject to the requirements of Section 423 set forth in the Code and the Plan.
12. Rights Not Transferable. The right to purchase Shares under this Plan is not transferable by a participant, and such right is exercisable during the participant’s lifetime only by the participant. Upon the death of a participant, any Shares held by the Custodian for the participant’s account shall be transferred to the deceased participant’s estate.
13. Dividends and Other Distributions. All cash dividends, if any, in respect of Shares held by the Custodian shall be automatically reinvested in the purchase of additional Shares or shall be paid to the participants entitled thereto. Stock dividends and other distributions in Shares of the Company or other property in respect of Shares held by the Custodian shall be issued to the Custodian and held by it for the account of the respective participants entitled thereto or treated in such other manner as determined by the Company in a uniform manner.
14. Voting and Stockholder Communications. In connection with voting on any matter submitted to the stockholders of the Company, the Custodian shall furnish to each participant a proxy authorizing the participant to vote the Shares held by the Custodian for his or her account. Copies of all general communications to stockholders of the Company shall be sent to participants in the Plan.
15. Responsibility and Indemnity. Neither the Company, its Board of Directors, the Committee, the Custodian, any Participating Subsidiary, nor any member, officer, agent, or employee of any of them, shall be liable to any participant under the Plan for any mistake of judgment nor for any omission or wrongful act unless resulting from gross negligence, willful misconduct or intentional misfeasance.
2024 PROXY STATEMENT | |
B-3
APPENDIX B—EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
The Company shall indemnify and save harmless its Board of Directors, the Committee, the Custodian and any such member, officer, agent or employee against any claim, loss, liability or expense arising out of the Plan, except such as may result from the gross negligence, willful misconduct or intentional misfeasance of such entity or person.
16. Conditions and Approvals. The obligations of the Company under the Plan shall be subject to compliance with all applicable state and federal laws and regulations, the rules of any stock exchange on which the Company’s securities may be listed, and to the approval of such federal and state authorities or agencies as may have jurisdiction in the premises. The Company shall use its best efforts to comply with such laws, regulations and rules and to obtain such approvals.
17. Amendment of the Plan. The Committee may from time to time amend the Plan in any and all respects, except that without approval of the Board of Directors and the affirmative vote of a majority of the outstanding Shares of the Company, within twelve months prior to or subsequent to such Board approval, the Committee may not extend the term of the Plan or increase the number of Shares issuable or purchasable pursuant to Section 6.3 of the Plan.
18. Termination of the Plan. The Plan shall terminate on February 28, 2029 unless terminated earlier pursuant to this Section 8. The Board of Directors may, in its sole discretion, terminate the Plan at any time without any obligation on account of such termination, except as otherwise provided in this Section 8. Upon termination of the Plan, the cash and Shares, if any, held in the account of each participant shall be distributed to the participant. The foregoing notwithstanding, if, prior to the termination of the Plan, the Board of Directors of the Company shall have adopted a substantially similar plan, the Board of Directors may in its discretion determine that the account of each participant under this Plan shall be carried forward and continued as the account of such participant under such other plan, subject to the right of any participant to request distribution of the cash and Shares, if any, held for his or her account.
19. Restrictions on Directors and Executive Officers. Notwithstanding any provision of this Plan or of any subscription, payroll deduction authorization or other document or instrument to the contrary, directors of the Company and each person who shall have been designated by the Board of Directors of the Company as an “executive officer” for purposes of Section 16 of the Securities Exchange Act shall be bound by the provisions in the Company’s insider trading policy as may be amended from time to time.
20. Effective Date of the Plan. The Plan became effective March 1, 2014. The extension of the term of the Plan is effective upon approval of shareholders at the Company’s 2024 Annual Meeting of Shareholders.
| THE GREENBRIER COMPANIES |
B-4
 | The Greenbrier Companies
Lake Oswego, Oregon 97035 E info@gbrx.com www.gbrx.com | |
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SCAN TO VIEW MATERIALS & VOTE w THE GREENBRIER COMPANIES, INC. ONE CENTERPOINTE DRIVE, STE 200 VOTE BY INTERNET -LAKE OSWEGO, OR 97035 Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote byinformation up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During the Meeting The Meeting—Go to www.virtualshareholdermeeting.com/GBX2023GBX2024 You may attend the meeting via the internetInternet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote byinstructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. THE GREENBRIER COMPANIES, INC. ONE CENTERPOINTE DRIVE, STE 200 LAKE OSWEGO, OR 97035 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V24976-P99541 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THE GREENBRIER COMPANIES, INC. The Board of Directors recommends you vote FOR all the nominees listed: 1. Election of Directors: NomineesNominees: For Withhold 1a. Wanda F. Felton 1b. Graeme A. Jack 1c. David L. Starling 1d. Lorie L. Tekorius 1e. Wendy L. Teramoto For WithholdPatrick J. Ottensmeyer ! ! The Board of Directors recommends you vote FOR For Against Abstain proposals 24 and 3: 2. Advisory approval5: 1b. Lorie L. Tekorius ! ! 4. Approve an amendment and restatement of the compensation of the Company's named executive officers. 3.2014 ! ! ! Employee Stock Purchase Plan, as amended. 1c. Kelly M. Williams ! ! ! ! ! 5. Ratification of the appointment of KPMG LLP as the Company'sCompany’s independent auditors for 2023.fiscal 2024. The Board of Directors recommends you vote FOR For Against Abstain proposal 2: NOTE: Such other business as may properly come before the meeting or any adjournment thereof. For Against2. Advisory approval of the compensation of the Company’s ! ! ! named executive officers. The Board of Directors recommends you vote 1 Year 2 Years 3 Years Abstain every “1 YEAR” for proposal 3: 3. Advisory approval of the frequency of executive ! ! ! ! compensation vote. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000584073_1 R1.0.0.3
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report/10-K are available at www.proxyvote.comwww.proxyvote.com. V24977-P99541 THE GREENBRIER COMPANIES, INC. Annual Meeting of Shareholders January 6, 2023 2:5, 2024 12:00 PM PST This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Lorie L. Tekorius, Thomas B. Fargo and Kelly M. Williams, or any of them, as proxies, each with the power to appoint a substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of (Common/Preferred)common stock of THE GREENBRIER COMPANIES, INC. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 2:12:00 PM, PST on January 6, 2023,5, 2024, virtually at www.virtualshareholdermeeting.com/GBX2023,GBX2024, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the recommendations of the Board of Directors. Continued and to be signed on reverse side 0000584073_2 R1.0.0.3