| • | | Restated Certificate of Incorporation
Corporate Governance Guidelines Code of Ethics: CEO and Senior Financial Officers
Bribery and Anti-Corruption Policy (included in Code of Conduct)
Charters of the Audit, Compensation, Governance and Social Responsibility, and Health, Safety, Environmental and Technical Committees of the Board
Shareholders may also request a free copy of these documents from: Investor Relations, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408; (208) 769-4100.Secretary
Corporate Governance Guidelines and Code of Conduct
The Board has adopted Corporate Governance Guidelines and a Code of Conduct in accordance with the U.S. Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”) corporate governance standards. The Corporate Governance Guidelines were adopted by the Board to ensure the Board is independent from management, that the Board adequately performs its function as the overseer of management, and to help ensure that the interests of the Board and management align with the interests of our shareholders.
We believe that operating with honesty and integrity has earned trust from our shareholders, credibility within our communities and dedication from our employees. Our directors, officers and employees are required to abide by our Code of Conduct to promote the conduct of our business in a consistently legal and ethical manner. Our Code of Conduct covers many topics, including conflicts of interest, confidentiality, fair dealing, proper use of the Company’s assets, and compliance with laws, rules, and regulations. In addition to the Code of Conduct for directors, officers and employees, our CEO, and SVP – CFO are also bound by a separate Code of Ethics.
The Governance Committee has adopted procedures to receive, retain, and react to complaints received regarding possible violations of the Code of Conduct, and to allow for the confidential and anonymous submission by employees of concerns regarding possible violations of the Code of Conduct. Our employees may submit any concerns regarding apparent violations of the Code of Conduct to their supervisor, our Vice President and General Counsel, the Chair of the Governance Committee, or through our anonymous telephone hotline.
Whistleblower Policy
We have a Whistleblower Policy adopted by our Audit Committee that encourages our employees, suppliers, contractors, shareholders, customers, or other stakeholders (collectively, “stakeholders”) to report to appropriate Company representatives, without fear of retaliation, any information relating to possible fraud or questionable accounting, internal controls, or auditing matters. Stakeholders may confidentially submit any concerns to the Company’s Vice President and General Counsel, or through an anonymous third-party telephone hotline and online reporting system (ConfidenceLine). The goal of this policy is to discourage illegal activity and business conduct that damages Hecla’s reputation, business interests, and our relationship with stakeholders.
10 www.hecla.comApril 4, 2024
Corporate Governance
In 2022, we received three anonymous reports through
Proxy Statement Summary This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting. For more complete information regarding the Company’s 2023 performance, please review our secure online reporting system establishedAnnual Report on Form 10-K for the period ending December 31, 2023. Agenda and Voting Recommendations | | | | | | | | | Proposal 1 ELECTION OF THREE CLASS II DIRECTORS Board Vote Recommendation FOR Page 28 | | | | Proposal 2 RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS Board Vote Recommendation FOR Page 35 | | | | Proposal 3 APPROVE, ON AN ADVISORY BASIS, NAMED EXECUTIVE OFFICER COMPENSATION Board Vote Recommendation FOR Page 38 |
2023 Performance Highlights 
| | | | | | | | Operational Highlights | | Financial Highlights | | Positioning for Growth | • Silver reserves of 238 million ounces, second highest in Company history; and gold reserves of 2.2 million ounces. • Produced 14.3 million ounces of silver, Hecla’s second highest in the Company’s history, and 151,259 ounces of gold. • At Lucky Friday, constructed on time and budget, infrastructure that bypassed the fire damaged shaft. • Keno Hill began silver production in the second quarter of 2023. | | • Sales of $720.2 million, the second highest in history, with 39% from silver and 36% from gold. • Cash flow from operations of $75.5 million, with Greens Creek generating $157.3 million in cash flow from operations and free cash flow of $121.6 million(1). • Strong balance sheet with $106.4 million in cash and cash equivalents with approximately $121.5 million in available liquidity. • Returned $15.7 million to our common and preferred stock shareholders through dividends. • Adjusted EBITDA(2) for the year was $212.6 million, in line with the prior year. | | • 2024 production expected to be more than 16 million silver ounces and up to 20 million by 2026. • Restarted our Lucky Friday mine in January 2024. • In 2024, our Keno Hill mine is expected to approximately double its 2023 production. • Keno Hill reserves at year-end 2023 were 11% higher than year-end 2022. • Completed the acquisition of ATAC Resource Ltd., which consisted of a massive land package of over 700 square miles in the Yukon Territory, with identified gold, silver, and base metal mineralization. |
| (1) | Free cash flow is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
| (2) | Adjusted EBITDA is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
2023 ESG Highlights
| | | | | | | | Environmental/Safety | | Social | | Governance | • AIFR (including lost time, restricted work, and medical treatment) of 1.45, lower than the U.S. national average for metal and non-metal mines reported by MSHA. • Our Greens Creek and Lucky Friday mines recorded their lowest AIFR of 0.29 and 0.66, respectively. • Greens Creek mine received the annual Hard Hat Safety Award by Alaska Miners Association in recognition of the mine’s exemplary commitment to safety. • Recognition of Hecla’s culture of innovation with the issuance of a patent in the U.S. for the Underhand Closed Bench (UCB) mining method. • Received the 2023 National Institute for Occupational Safety and Health (NIOSH) Mine Safety and Health Metals Sector Technology Innovation Award. • For the second time in three years, Casa Berardi mine was awarded the John T. Ryan Safety Trophy for outstanding safety performance in the Quebec-Maritime Provinces Region. | | • Women comprise 10% of Hecla’s workforce, and 22% of our professional/managerial positions. • In 2023, the Hecla Charitable Foundation donated more than $377,206 toward education, youth activities, community programs, and health services activities in communities in which we operate. • Hecla has two operations and one exploration project in Canada that have benefit agreements in place with the First Nations – Abitibiwinni at our Casa Berardi Mine in Quebec, the First Nation Na-Cho Nyak Dun at our Keno Hill operation in the Yukon, and the Gitanyow at our Kinskuch property in British Columbia. • Our President and Chief Executive Officer (CEO) received the Selwyn Blaylock Canadian Mining Excellence Award, which recognizes an individual who has demonstrated distinguished service to Canada through exceptional achievement in mining, metallurgy, or geology. | | • Five of our seven directors joined the Board after 2016, including one in 2021 and another in 2024. • Average Board tenure is 9 years. • 29% of our directors are women. • Our Board appointed its first woman Board Chair in 2022. • Our Board Chair is independent of our CEO. • Directors who receive more “Against” votes than “For” votes must tender their resignation to the Board for consideration. |
Shareholder Engagement |  |
We have long believed that the delivery of long-term value requires regular dialogue with, and accountability to, our shareholders. As a result, our management team participates in numerous investor meetings throughout the year to discuss our business and strategic priorities. These meetings include in-person, telephonic, and webcast engagements, as part ofwell as investor conferences and can occur in a group or one-on-one settings. Our core shareholder engagement team includes our Whistleblower Policy. The reports were all similar in nature and dealt with an alleged “conflict of interest” at one of our operations. One of the reports also alleged a regulatory compliance issue. The Company’sSenior Vice President – Chief Administrative Officer, Vice President – General Counsel, investigatedVice President – Corporate Development & Sustainability, Vice President – Investor Relations and Treasurer, and Assistant Secretary. If requested by a shareholder, our chairpersons of each committee of the Board are available to join any shareholder engagement. 
| | | | | | | | Solicit and receive feedback from shareholders on governance practices and trends, board composition, executive compensation, sustainability, human capital management and other shareholder priorities. | | Hecla engagement team reports to Board to review shareholder feedback and use information gathered from the winter engagement to, when appropriate, enhance disclosures and revise governance practices, executive compensation program, sustainability practices or other programs and policies. | | Engage with institutional holders, analysts, and other investors during the year on other topics of interest. In 2023, management conducted approximately 20 presentations for analysts and investors, held approximately 110 one-on-one group meetings with investors, and hosted four quarterly conference calls with investors and analysts allowing for questions and answers with management. In addition, the Company responds to questions from investors and analysts by telephone and email throughout the year. | | Receive and publish voting results from annual meeting which help shape our ongoing improvements and developments in governance practices, executive compensation, sustainability, and other shareholder interest areas. |
In November 2023, we sought engagement with 36 of our largest shareholders (representing approximately 311.0 million shares, or 50.4% of shares outstanding) and the two proxy advisory firms. We had three shareholders request a meeting (representing approximately 21.2 million shares) and eight responded that they did not need to meet. The two proxy advisory firms did not respond to our invitation to engage.
During our 2023 winter engagement, we discussed: | • | | the Board’s continued search for additional directors; |
| • | | our sustainability initiatives; |
| • | | Indigenous relations; and |
| • | | corporate governance matters. |
Say-on-Pay In 2023, our Say-on-Pay proposal received 97% support of shares voted. During our outreach this year, no shareholders raised concerns about our executive compensation practices and programs. Environmental Matters Environmental topics discussed with shareholders focused on net zero carbon emission levels, and our gap and materiality analysis to reporting frameworks (Sustainability Accounting Standards Board – metals and mining standards, Task Force on Climate-Related Financial Disclosures, and Global Reporting Initiative, as well as our Canadian operations benchmarking against the Towards Sustainability Mining protocols). Shareholders did not raise a concern if we stop purchasing carbon emissions reduction credits. See Sustainability on page 5. Our 2023 Sustainability Report will be available on our website in mid-May 2024. Corporate Governance In our 2023 shareholder outreach, we discussed our board composition. Since 2016, we have added five new directors to our Board, including through several employee interviewsone in 2021 and reported backthe most recent in 2024, thereby reducing the average tenure of the Board to nine years. We had two long-term directors retire from the Board in 2022 after reaching our mandatory retirement threshold, which reduced the size of the Board to six at that time. We continue to actively seek additional members for our Board and, just recently, added one director, thereby increasing the Board to seven. We hope to add another new director in the next 12 months. We also discussed three of our corporate governance features that may have an anti-takeover effect on the Company: (i) the inability of shareholders to call special meetings; (ii) our classified Board structure; and (iii) supermajority voting provisions in our Restated Certificate of Incorporation and Bylaws. In prior years we have proposed amendments to our Restated Certificate of Incorporation and Bylaws to revise these three provisions, but the voting results have never been close to sufficient to implement change. The required vote is 80% of outstanding shares voted in favor of any such change, and we have never obtained higher than 56% of outstanding shares voted in favor. The shareholders we spoke with unanimously told us that due to the Governance Committee. His report concluded there was neither evidencerepeated failure of proposals to change these provisions at past annual meetings, and the desire to improve the format and readability of our Proxy Statement and the resources involved in printing and mailing a lengthier Proxy Statement, they would not object if we did not include these proposals at our Annual Meeting. The Board will continue to assess evolving best practices in corporate governance matters, including the subjects of the prior proposals discussed above. In future years, we may again include one or more of these proposals on the agenda for an actual conflict of interest nor of failureAnnual Meeting. Furthermore, the Board will continue to comply with applicable regulations. A response was also sentconsider any formal proposals and other feedback that we receive from shareholders. And, we will continue our shareholder outreach efforts so that we can understand and appropriately react to the reporting parties through the same secure third-party reporting service.evolving viewpoints of our shareholders on corporate governance and other matters.
Communications with the BoardSustainability
Stakeholders wishing
We are committed to communicatemeeting high standards of environmental stewardship across our operations, respecting human rights in all our business practices, and prioritizing the health, safety and well-being of our workforce and host communities where we operate. We recognize that the long-term success of the Company and sustainable value creation are dependent on integrating the ESG performance factors that are most important to our stakeholders and to our business into our business strategies. Thus, we measure our ESG performance against the following benchmarks: | • | | the Sustainability Accounting Standards Board – metals and mining standards; |
| • | | relevant aspects of the Task Force on Climate-Related Financial Disclosures, Global Reporting Initiative; and |
| • | | Mining Association of Canada’s Towards Sustainable Mining protocols. |
We have also prioritized the United Nations Foundation Sustainable Development Goals that most directly align with our Board Chair or with the independent directors as a group may do so by delivering or mailing the communicationbusiness, corporate strategy, and material sustainability issues. More information about our ESG efforts can be found in writing to: Board Chair, c/o Corporate Secretary, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our internal auditor and overseen in accordance with procedures established by the Audit Committee with respect to such matters. From time to time, the Board may change the process by which stakeholders may communicate with the Board or its members. Please refer toSustainability Reports (ESG Reports) on our website at https://www.hecla.com selecting the tab titled “Company” and then the tab titled “Governance and Ethics,under “Sustainability.” for any changesNote that this information is not incorporated by reference into this Proxy Statement. Forward-looking statements in this process.Proxy Statement and in our ESG Reports and disclosures are aspirational and not guarantees or promises that goals, targets, or projections will be met, and no assurance can be given that any commitment, expectation, initiative, or plan referenced in this Proxy Statement or in our ESG Reports and disclosures can or will be achieved or completed. You can view our 2022 Sustainability Report on our website. We expect our 2023 Sustainability Report to be available on our website in mid-May 2024. Board Leadership StructureOversight and Management of Sustainability Currently,Primarily, two committees of the positions of CEOBoard provide ESG oversight. The Health, Safety, Environmental and Board Chair are held by separate persons.Technical Committee (HSET Committee) is tasked with overseeing ESG risks, strategic plans, and progress on issues that may potentially adversely impact Hecla’s operations, activities, plans, strategies, or reputation. The Board believes this structurefocus is optimal for the Company at this time because it allows the CEO to focusprimarily on leading the Company’s business and operations,internal matters and the Board Chair to serve as a sounding boardtechnical requirements of ESG matters. The Governance and advisorSocial Responsibility Committee (Governance Committee) is tasked with reviewing and making recommendations to the CEO,Board for ESG matters that focus primarily on policy and to leadexternal matters. Each committee relies on the activities of the Board. The Board has also determined that having this structure ensuresother.
At the executive level, the Vice President and Chief Operating Officer (which position is currently unfilled due to a greater roleretirement in December 2023), Vice President – Operations, Vice President – Corporate Development and Sustainability, and Senior Vice President – Chief Administrative Officer report directly to our CEO and are responsible for implementing the independent directorsCompany’s ESG programs. At our operations, our Vice Presidents – General Managers, and other employees work toward achieving sustainability goals. Environment Our metals, especially silver and zinc, are critical components to green energy technologies and national security. Demand for responsibly sourced metals is growing. As the largest silver producer in the oversight ofUnited States, Hecla is proud to supply an essential metal used in critically important markets including renewable energy technology, medical products, and military defense technology. At the Company, and it enhances the Board’s independence and,same time, we believe, senior management’s accountability to the Board. In the future, if the individual elected as Board Chair also were to be the CEO, the independent directors would elect a Lead Independent Director for a one-year term. This would help ensure continued robust independent leadership of the Board.
Currently, our Board Chair oversees meetings of the Board, as well as the executive sessions with independent members of the Board. The Board Chair’s duties include:
chairing annual shareholder meetings;
overseeing the preparation of agendas for Board meetings;
preparing for executive sessions of the Board and providing feedback to the CEO;
staying current on developments to determine when it may be appropriate to alert the Board to significant pending developments; and
serving as a liaison between independent directors and the CEO with respect to sensitive issues.
Executive sessions of independent directors are included on the agenda for every regularly scheduled Board meeting and were held at each Board meeting in 2022. The executive sessions are chaired by the Board Chair. Our independent directors meet in executive sessions without management present unless the independent directors request their attendance. For the foregoing reasons, we have determined that our leadership structure is appropriate in the context of our specific circumstances.
Board Refreshment
In accordance with our Corporate Governance Guidelines, the Governance Committee reviews annually the composition and size of the Board, recognizingrecognize the importance of refreshmentresponsible mining to maintain a balanceensure that we minimize the impacts of tenure, diversity, skill setsour activities on the environment where we live and experience onwork. At each of our Board. Our Board currently consists of six members, five of whom the Board has affirmatively determined are independent. There are two Class I directors whose terms will expire at the Annual Meeting: Phillips S. Baker, Jr. and George R. Johnson.
Since 2016,sites, we have recruited four new Board members. These four additionsimplemented programs to reduce freshwater and energy consumption, reduce our Board are consistent withcarbon footprint, maintain local water quality backed by rigorous testing and monitoring, and reclaim the land once mining is complete.
We work to minimize the environmental impact of our objectiveoperations through improvement of our processes. We set reduction targets for greenhouse gas emissions and energy use capturing and tracking environmental data to have a Board with expansivebenchmark our operations against industry standards to provide accountability and diverse experience, a deep understanding of the challenges and opportunities associated withtransparency in our business and a focus on value and sustainability for the benefit of allprogress against our goals. 2023 Proxy Statement 11
Corporate Governance
stakeholders. With the retirement of two of our directors in 2022, our director recruitment efforts are ongoing and further additions to the Board are anticipated.
Identifying and Evaluating Nominees for Director
Director Selection Process
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | Candidate Recommendations | | |  | | | 2 | | Governance Committee | | | | | | 3 | | Board of Directors | | | | | | 4 | | Shareholders | | From shareholders, management, directors, and search firms | | • Evaluates the Board’s needs and screens and interviews candidates • Reviews qualifications and expertise, tenure, regulatory requirements, and diversity • Recommends nominees to the Board | | Discusses, analyzes independence, and selects nominees for election | | Vote on nominees at Annual Meeting |
The Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance Committee is responsible for ensuring that the composition of the Board accurately addresses the needs of our business. In the event vacancies are anticipated, or arise, the Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Governance Committee through current Board members, professional search firms, shareholders, or other persons. Consideration of new director nominee candidates typically involves a series of internal discussions, review of information concerning candidates and interviews with selected candidates. The Governance Committee then determines the best qualified candidates based on the established criteria and recommends those candidates to the Board for appointment until such time as they stand for election by our shareholders.
While the Governance Committee and our Board prioritize maintaining a board that is comprised of directors with a diverse set of skills, backgrounds, experiences, and perspectives, they also recognize the importance of balancing these qualifications with the overall tenure of directors in their long-term approach to board refreshment. The fresh viewpoints and philosophies newer directors bring, coupled with the valuable experience and institutional knowledge the longer-tenured directors possess, benefits the Board and its overall contribution to the Company and our shareholders.
The Board has appointed four highly qualified directors since 2016 who bring insight to areas such as mining, international business, acquisitions, operations, legal, risk management, geology, engineering, finance, and tax. To supplement our newer directors, our two longer-tenured directors have extensive knowledge of our operations and have the perspective of overseeing our business activities through economic cycles and across differing competitive environments.
We hold the view that the continuing service of qualified incumbents promotes stability and continuity in the boardroom, contributing to the Board’s ability to work as a collective body, while giving us the benefit of familiarity and insight into our affairs that our directors have accumulated during their tenure. Recent additions to the Board provide new perspectives and diversity, while directors who have served for a number of years bring experience, continuity, institutional knowledge, and insight into the Company’s business and industry. Directors with relevant business and leadership experience provide the Board with a useful perspective on business strategy and significant risks, and an understanding of the challenges facing the business. Accordingly, the process for identifying nominees reflects our practice of re-nominating incumbent directors who (i) continue to satisfy the Governance Committee’s criteria for membership on the Board, (ii) the Governance Committee believes continue to make important contributions to the Board, and (iii) consent to continue their service on the Board. Directors should also be able to commit the requisite time for preparation and attendance at regularly scheduled Board and committee meetings, as well as be able to participate in other matters necessary to ensure good corporate governance is practiced.
12 www.hecla.com
Corporate Governance
The Governance Committee reviews annually with the Board the composition of the Board as a whole and recommends, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise, and diversity required for the Board as a whole, and contains at least the minimum number of independent directors required by applicable laws and regulations. Board members should possess such attributes and experience as are necessary for the Board as a whole and contain a broad range of personal characteristics, including diversity of backgrounds, management skills, mining, accounting, finance, and business experience. Our current directors exhibit an effective mix of skills, experience, diversity, and perspective. Summarized below is a description of why each core competency is important for service on Hecla’s Board.
| | | | | | | | | | | | | Knowledge, Skills and Experience6 | 2024 Proxy Statement
| |  | |  | |  | |  | |  | |  | Audit Committee Financial Expert
| | | | | | | | ∎ | | | | | Board Service on Public Companies
We value individuals who understand public company reporting responsibilities and have experience with the issues commonly faced by public companies. Four of our directors have served on boards of other public companies.
| | ∎ | | ∎ | | ∎ | | | | ∎ | | | CEO Experience
These skills are important to gain a practical understanding of organizations and drivers of individual growth and development. Five of our directors have had some experience in the administration of a multijurisdictional company. Two of our directors have experience as a chief executive officer.
| | ∎ | | | | | | | | ∎ | | | Corporate Governance
Experience with governance principles and policies. All of our directors have had experience in corporate governance.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Environmental and Social Responsibility
Experience with environmental and social responsibility initiatives, including sustainability, diversity, and inclusion. All of our directors have experience in environmental and social responsibility.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Finance
We believe that an understanding of finance and financial reporting processes is important for our directors to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. It is important to have experience in capital markets, corporate finance, accounting, and financial reporting and several of our director’s satisfy the “accounting or related financial management experience” criteria set forth in the NYSE listing standards. Two of the six directors satisfy the “audit committee financial expert” criteria set forth in regulations of the SEC, but only one of those directors sits on the Audit Committee. All of our directors have financial knowledge and are financially literate.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Geology, Mining and Engineering
It is important that some of our directors have experience in open-pit and underground mines, as well as knowing the science and technology of extracting minerals, exploration, geology, metallurgy, and geotechnical engineering experience. Two of our directors have experience managing mining operations, and experience in geology, mining, and/or engineering.
| | | | | | ∎ | | | | ∎ | | | Industry Experience
Having experience in our industry or a similar industry contributes to a deeper understanding of our business strategy, operations, key performance indicators and competitive environment. All of our directors have experience in mining or a similar industry.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Industry Association Participation
Experience in organizations that support companies and employers in the mining industry and protect their rights. All of our directors have chaired an industry organization. All of our directors have a long and highly regarded reputation in the industry.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | International Business
With operations in Mexico and Canada and prospects for further expansion, international experience helps us understand opportunities and challenges. All of our directors have international business experience.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Senior Leadership
Experience serving as CEO or a senior business executive, as well as direct leadership experience in core management areas, such as strategic and operational planning, financial reporting, compliance, risk management and leadership development, provides a practical understanding of how organizations like Hecla function. All of our directors have senior business leadership experience.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Legal and Compliance
Hecla is subject to a broad array of government regulations. Mining is impacted by changes in law or regulation in areas such as safety, environmental and disclosure. Several of our directors have experience in regulated industries, providing them with insight and perspective in working constructively and proactively with governments and agencies. All of our directors have formal legal education or experience in government regulations and understand the legal risks and obligations of the Company.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ |
2023 Proxy Statement 13
Corporate Governance
| | | | | | | | | | | | | Knowledge, Skills and Experience
| | | | | | | | | | | | | Reputation in the Industry
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Risk Management
Considering the Board’s role in risk oversight, we seek directors who can contribute to the identification, assessment and prioritization of risks facing the Company. All of our directors have experience with our business to understand key areas of risk.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | Strategic Planning, Business Development, Business Operations
Experience defining and driving strategic direction and growth and managing the operations of a business or large organization. All of our directors have experience in setting and managing the strategic direction of a business.
| | ∎ | | ∎ | | ∎ | | ∎ | | ∎ | | ∎ |
| | | | | | | | | | | | | | Gender Diversity | | | | Racial/Ethnic Diversity | | | | Independence | 33%
2 Females
(1 of whom chairs a standing
committee, and the other is the
Board Chair)
| | | | |
Risk Management Environmental Policies, Management System, and Training Hecla’s Environmental Policy states our commitment to complying with all applicable environmental laws and regulations that govern our facilities and going beyond them when minimal compliance does not meet Hecla’s values. Employees and contractors are also expected to comply with all applicable internal policies, programs, standards, and procedures as outlined in our Code of Conduct, and we conduct structured environmental reviews and audits to assess compliance at least annually. We utilize our Environmental Management System (EMS) to provide consistency in our environmental programs company-wide and promote a culture of environmental awareness, innovation, and accountability across all our operations. The EMS is a 13-element program that promotes continuous improvement around issues including obligation registers, management of change, air quality, water and waste management, energy management, training, and reporting. The EMS program, which is benchmarked against ISO-14001 and complements Canada’s Towards Sustainable Mining program, is reviewed through internal audits and third-party reviews. We are in the process of implementing the EMS at our Keno Hill operations. As part of our environmental management programs, we are committed to ensuring that our employees receive training to raise awareness of environmental issues and our processes to reduce environmental impact. In 2023, employees’ company-wide received more than 1,200 hours, and contractors received 201 hours of environmental training, focusing on job-specific environmental awareness, hazardous material management, spill response, and reporting. Climate Change and Net Zero Targets Hecla recognizes that the impacts of climate change may create greater potential risks for our operations, including risks posed by frequent and extreme weather events such as droughts and intense rainfalls. Potential risks to our operations include higher volumes of mine contact water requiring storage and treatment, increased requirements for stormwater diversion and associated water management systems, and reduced availability of freshwater. As part of our enterprise risk management processes, we are committed to incorporating climate-related risks and opportunities into our risk management and strategic planning processes aligned with the Task Force on Climate-Related Financial Disclosures framework. At least every three years, we conduct structured high-level risk assessments (HLRAs) that include climate change considerations and appropriate materiality re-assessments. From these assessments, we develop site-specific management action plans that are assigned to the site management team for resolution. Each key risk identified in the HLRA response action plan is matched with an appropriate performance metric against which progress can be measured. Management and relevant employees meet quarterly with the HSET Committee of our Board to present project updates, including results from HLRAs and progress on material HLRA action plans. | | | | | | |  | | 16%
1 racial/ethnic minority
| | | | 5 of 6
Are independent
| | | | | | | | | | | | | | | Board RefreshmentEnvironmental Highlights | | | | Average Board Tenure | | | | Industry and
Operational Experience
| 4
New directors added since 2016
| | | | | | | Protecting the Environment: Hecla’s responsibilities expand beyond producing essential metals, and we recognize the importance of minimizing the impact on the environments of the communities where we live and work. We are committed to minimizing the environmental footprint of our operations through continuous improvement of our processes. Integrated Environmental Working Groups: Each of our sites has a Tailings, Waste and Water working group that considers, among other aspects, climate change-related impacts that could affect site operations which are then integrated into design of mine facility infrastructure. | | Renewable Energy: One of Hecla’s largest sources of electricity is renewable hydropower, and we use as much hydroelectricity as our power suppliers can provide. Currently, at our production sites: 10• Casa Berardi uses approximately 100% renewal hydropower to supply line power;
years• At Greens Creek, 84% of our electricity is sourced from the grid, of which 100% is renewable hydropower;
• The energy provider at our Lucky Friday location uses a mix of both hydropower and natural gas, with 60% of electricity sourced being renewable; and • 86% of Keno Hill’s power – our newest project – is hydropower. |
Safety and Health Hecla’s commitment to the safety and health of our workforce has been an essential part of our corporate culture for 133 years and has enabled us to build the highest reputation for safety with our employees, our communities, and within the industry. We work to operate our mines safely by promoting a deeply rooted, value-based culture, leveraging mining expertise developed over the Company’s long history, and innovating new practices that improve safety while increasing productivity. As an example, 2021 saw the development of the patented UCB mining method at the Lucky Friday mine. The UCB mining method has improved our ability to manage seismicity at the mine while it has also enabled us to increase production. | | | | | | |  | | Safety and Health Highlights | | | | | | | Safety: In 2023, our AIFR (including lost time, restricted work, and medical treatment) was 1.45, which is lower than the U.S. national average for metal and non-metal mines reported by MSHA. Safety and Health Training: 100%• Safety Meetings Held: 979
• Safety and Health Training Hours: 11,338 | | Safety Awards: Have industry• Three employees at our Nevada Operations each received 2023 Safety Awards from the Nevada Mining Association.
• NIOSH recognized Hecla with its 2023 NIOSH Mine Safety and operational experienceHealth Technology Metal Sector Innovation Award for developing the UCB mining method. Zero Fatalities: • In 2023, we had zero employee or contractor fatalities. |
| | | | | | | | | | | | | | | | | | Average Age of Directors | | | | | 8 | 2024 Proxy Statement | | | | |
Supporting and Developing Our People Hecla is dedicated to investing continuously in the technology, training, systems, and programs that help protect and support our people. We also strive to have our workforce at least mirror the local demographic diversity and try to be more diverse for gender, ethnicity, and local Indigenous people. At the executive level, the Senior Vice President – Chief Administrative Officer reports directly to the CEO and is responsible for the Company’s programs to support and develop our people. At the local level, each operating site has a human resource professional whose primary role is to support and develop our people at that site. As of December 31, 2023, Hecla employed approximately 1,775 people, of which approximately 990 were employed in the United States, 770 in Canada, and 20 in Mexico. The vast majority of Hecla’s employees are full-time, and approximately 260 of our employees are covered by a collective bargaining agreement. Creating greater gender diversity in a predominantly male industry is among the priorities of Hecla currently and in the coming years. | | | | | | |  | | 67Human Capital Management Highlights
| | | | | Gender Diversity: • 10% of our workforce are women, and women hold 22% of our professional/managerial positions. 29% of our Board is made up of women. • We have implemented programs to foster the hiring and retention of women including the creation of networking opportunities with senior executives and Board members. Promoting Diverse Cultures: • In 2023, approximately 114 First Nations workers worked at Casa Berardi. Hecla encourages its suppliers to hire Indigenous workers and remain committed to providing opportunities to the First Nation businesses. • Our Casa Berardi mine in Quebec provides annual cultural awareness training for all department heads. • We hold companywide diversity, equity and inclusion (DEI) training to foster an inclusive, welcoming workplace. Trainings are mandatory and employee participation is monitored and tracked by a third party to ensure actual completion. Discrimination & Harassment: We are committed to providing equal employment opportunities and complying with all applicable employment laws in the countries where we operate, as outlined in the “Employee Relations” section of our Code of Conduct. | | Protecting Human Rights: We support fundamental human rights in all our operations, including our supply chain, and in all jurisdictions in which it conducts business. We operate in countries where human rights laws are respected and promoted. Our Human Rights Statement discusses our commitment to conduct business in a manner consistent with the United Nations Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights. Education: • We offer a tuition reimbursement program to assist with educational expenses for employees who are interested in furthering their education. • At Lucky Friday, we provide on-line training through Caterpillar and Epiroc to ensure our miners continually expand their skill sets. • As part of our workforce training program, new hires in various entry-level professional fields including accounting, finance, geology, engineering, and metallurgy, can participate in a mentoring program where they are paired with retired Hecla employees or other professionals in the community. Awards: Our Greens Creek mine was awarded the Juneau Rotary Club’s 2023 Vocational Service Award, for creating career opportunities for the next generation of miners – and other technical trades. Greens Creek funds vocational scholarship programs, tours, class and coursework, internships, and externships. |
Community Engagement Over our 133-year history, Hecla has always been a strong partner in the communities where we operate. Through the continued growth of our responsible mining operations, we provide significant social and economic benefits to our local communities. We are the largest private-sector employer and taxpayer in Juneau, Alaska, near our Greens Creek mine, in Wallace/Mullan, Idaho, near our Lucky Friday mine, in La Sarre, Quebec, near our Casa Berardi mine, and in the Yukon Territory, where our Keno Hill mine is located. Some of these operations have been part of their communities for generations. We communicate information through a variety of methods including community meetings, local and social media, and flyers, with all materials available in the local language with translation provided if necessary. We disclose the results of environmental, economic, and social impact assessments and partner with local stakeholders. We also work with local stakeholders to identify opportunities for the Hecla Charitable Foundation to provide support for community initiatives. | | | | | | |  | | Community Engagement Highlights | | | | | Engaging with Community Stakeholders: We engage with stakeholders at all our sites during the mining life cycle to be a constructive partner in the communities where we operate and deepen our understanding of local concerns and issues. Indigenous Relations: With the purchase of Alexco Resources in 2022, Hecla has two operations and one exploration project in Canada that have benefit agreements in place with the First Nations. This includes the Abitibiwinni at the Casa Berardi Mine in Quebec, the First Nation Na-Cho Nyak Dun at Keno Hill in the Yukon, and the Gitanyow at the Kinskuch property in British Columbia. Community Partnerships: • In Montana, Hecla originated the Grizzly Corridor Project in collaboration with biologists, the U.S. Forest Service, U.S. Fish and Wildlife, and local logging contractors. On Hecla land, we strategically thinned tree density to open the canopy, thereby resulting in travel routes for bears while increased sunlight stimulates growth in the understory. • In Montana, we also partnered with the Confederated Salish and Kootenai Tribes to harvest and plant over 200,000 native shrubs and trees at our reclaimed Troy mine. | | Supporting Communities through the Hecla Charitable Foundation: In 2023, the Hecla Charitable Foundation donated more than $377,206 toward education, youth activities, community programs, and health services activities in communities in which we operate. Building a Skilled Workforce: • At our Greens Creek mine in Alaska, we have partnered with multiple entities to create a skilled local workforce. • At Prince William Sound College in Alaska, we created a Millwright program, including full scholarships. • At the Alaska Vocational Technical Center, we provided scholarships and internships to Diesel and Electrical Tech students. • We continue to use the Mining and Petroleum Training Service in Alaska to train employees new to mining. |
In general, and as more fully outlined in our Bylaws and Corporate Governance Guidelines, in evaluating director candidates for election to our Board, the Governance Committee will: (i) consider if the candidate satisfies the minimum qualifications for director candidates as set forth in the Corporate Governance Guidelines; (ii) consider factors that are in the best interests of the Company and its shareholders, including the knowledge, experience, integrity and judgment of each candidate; (iii) consider the contribution of each candidate to the diversity of backgrounds, experience and competencies which the Board desires to have represented, with such diversity being considered among the other desirable attributes of the Board; (iv) assess the performance of an incumbent director during the preceding term; (v) consider each candidate’s ability to devote sufficient time and effort to his or her duties as a director; (vi) consider a candidate’s independence and willingness to consider all strategic proposals; (vii) consider any other criteria established by the Board and any core competencies or technical expertise necessary to manage and direct the affairs and business of the Company, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties; and (viii) determine whether there exists any special, countervailing considerations against nomination of the candidate.
14 www.hecla.com
Corporate Governance
Director Qualifications, Evaluation, and NominationCorporate Governance
The Governance Committee believes nominees for election
We are committed to the Board should also possess certain minimum qualificationseffective corporate governance that reflects our values and attributes. The nominee must: (i) exhibit strong personal integrity, charactersupports our strategic and ethics,financial objectives and a commitment to ethical business and accounting practices; (ii) not be involvedperformance. Our corporate governance practices are generally reflected in ongoing litigation with the Company or be employed by an entity engaged in such litigation; and (iii) not be the subject of any ongoing criminal investigations in the jurisdiction of the United States, any state, or internationally, including investigations for fraud or financial misconduct. In connection with the director nominees who are up for election at the Annual Meeting, the Governance Committee also considered the nominee’s role in: (i) overseeing the Company’s efforts in complying with its SEC disclosure requirements; (ii) assisting in improving the Company’s internal controls and disclosure controls; (iii) assisting with the development of the strategic plan of the Company; and (iv) working with management to implement the Company’s strategic goals and plans. Directors are expected to exemplify high standards of personal and professional integrity and to constructively challenge management through their active participation and questioning. Ourour Bylaws, and Corporate Governance Guidelines, provide that a director will not be nominated for re-election after their 75th birthday.
In addition to fulfilling the above criteria, each nominee for election to the Board at the upcoming Annual Meeting brings a strong and unique background and setCode of skills to the Board, giving the Board competence and experience in a wide variety of areas, including corporate governance, senior leadership, legal, geology, accounting, finance, mining, exploration,Conduct, Whistleblower Policy, and board service. The Governance Committee has reviewed the nominees’ overall service to the Company during their terms, including the number of meetings attended, level of participation and quality of performance.committee charters.
Majority Voting for Directors and Director Resignation PolicyElectronic Access to Corporate Governance Documents
Our directors are elected by majority vote (plurality in the case of a contested election). Our Corporate Governance Guidelines include a director resignation policy. The policy provides that any director who is not elected by a majority of votes cast shall tender his or her resignation to the Governance Committee. The Governance Committee will recommend to the Board whether to accept or reject the resignation offer, or whether another action should be taken. In determining whether to recommend that the Board accept any resignation offer, the Governance Committee will consider all factors believed relevant by it. The Board will act on the Governance Committee’s recommendation within 90 days following certification of the election results. In deciding whether to accept the resignation offer, the Board will consider the factors considered by the Governance Committee and any additional information and factors that the Board finds relevant. If the Board accepts a director’s resignation offer pursuant to this process, the Governance Committee will recommend to the Board and the Board will thereafter determine whether to fill such vacancy or reduce the size of the Board. Any director who tenders their resignation pursuant to this provision will not participate in the proceedings of either the Governance Committee or the Board with respect to their own resignation offer. If a director’s resignation is not accepted by the Board, the director shall continue to serve until the next annual meeting of shareholders or until their successor is duly elected and qualified, or their earlier resignation or removal. Diversity
The Company’s Corporate Governance Guidelines provide the Board should include individuals with a diverse range of experiences to give the Board depth and breadth in the mix of skills represented. The Board seeks to include diversity in professional experience, skills, industry background, race/ethnicity, national origin, and gender, as well as the ability of directors (and candidates for director) to devote sufficient time to performing their duties in an effective manner.
Size of the Board of Directors
Our Bylaws require the Board to have not less than five nor more than nine members. The size of the Board may be increased or decreased within that range from time-to-time by resolution approved by the affirmative vote of a majority of the Board. On May 26, 2022, the Board decreased the size of the Board from eight members to six members due to the retirement of two directors.
2023 Proxy Statement 15
Corporate Governance
The retirement of the two directors in 2022 caused an imbalance in the number of directors on the Board’s three classes of directors. The Company’s Bylaws and Restated Certificate of Incorporation provide that the number of directors in each class of directors shall be as nearly equal in number as possible. In order to maintain balance among the classes, Ms. Wong stood for election at last year’s Annual Meeting as a Class III director, together with Charles B. Stanley, each with a term to expire at the 2025 annual meeting of shareholders. Each class of directors now has two members.
Board’s Role in Oversight of Strategy and Risk Management
Our Board is engaged and involved in overseeing our strategy and takes an active role in risk oversight.
The Board oversees the strategic direction of the Company, and in doing so considers the potential rewards and risks of our business opportunities and challenges and monitors the development and management of risks that impact our strategic goals.
The Board as a whole is responsible for risk oversight at the Company, with reviews of certain areas conducted by the relevant Board committees that regularly report to the full Board.
In its risk oversight role, the Board reviews, evaluates and discusses with appropriate members of management whether the risk management processes designed and implemented by management are adequate in identifying, assessing, managing, and mitigating material risks facing the Company, including financial, operational, social, and environmental risks.
The Board believes that full and open communication between senior management and the directors is essential to effective risk oversight. Our Board Chair regularly meets with our CEO on a variety of matters, including business strategies, opportunities, key challenges, and risks facing the Company, as well as management’s risk mitigation strategies. Senior management attends all regularly scheduled Board meetings where they conduct presentations on various matters involving our operations andcorporate governance documents are available to address any questions or concerns raisedon our website at https://www.hecla.com by the Board on risk management-related or other matters. Following consideration of the information presented by management, the Board provides feedback and makes recommendations, as needed, which is designed to help minimize the Company’s risk exposure. To the extent any risks identified by each standing committee of the Board are material or otherwise merit discussion by the whole Board, the respective committee chair will raise such risks at the next scheduled meeting of the Board, or sooner if merited.
For the foregoing reasons, we have determined that our risk oversight is appropriate in the context of our specific circumstances, risk management efforts, and the Board’s administration of its oversight function. The chart below provides an overview of the allocation of risk management responsibilities among the Board committees.
16 www.hecla.com
Corporate Governance
The Charters for each of these committees, can be found at www.hecla.com, and then selecting the tab titled “Company” and then selecting the tab titled “Governance and& Ethics.”
2023 Proxy Statement 17
Corporate Governance
Succession Planning
The Compensation Committee is responsible for overseeing the Company’s succession planning process for our CEO and other key senior executives, and annually reviews the Company’s succession plans for all key senior executives with input from the CEO and SVP – CAO. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational experience, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board.
Emergency Succession Plan
Our Corporate Governance Guidelines provide that in the event of the death, resignation, removal or incapacitation of the President and CEO, the Board Chair will act as the President and CEO until a successor is duly elected.
They also provide that in the event of the death, resignation, removal or incapacitation of our Board Chair, the President and CEO will act as Board Chair until a successor is duly elected.
In the event of an unexpected executive departure, the emergency succession plan provides for a transfer of responsibilities to an individual who may or may not be permanently appointed to the new role.
In the event of a senior executive’s departure, both internal and external candidates may be considered for permanent appointment to such role.
Long-Term Succession Plan
The long-term succession plan is intended to develop a pipeline of qualified talent for key roles.
The planning process includes a discussion of internal succession candidates, assessment of relevant skills and planning for professional development where necessary. Multiple internal succession candidates may be identified for an individual role and provided with relevant growth opportunities. The Board gains insight through direct exposure to internal succession candidates from their presentations to the Board, work with individual directors or Board committees, and participation in Board activities.
The Company’s short- and long-term business strategy will be considered when evaluating internal succession candidates and their skills.
Committees of the Board and Committee Assignments
The Board has six standing committees: Audit; Compensation; Governance and Social Responsibility; Health, Safety, Environmental and Technical; Executive; and Non-Executive Stock Award. Information regarding these committees is provided below. Except for the Executive Committee and Non-Executive Stock Award Committee, all committees are composed entirely of independent directors. The members of each committee are identified below, along with the number of meetings held in 2022. These include:
| | | Audit Committee• | | | Meetings in 2022: 5
| |    
Primary Responsibilities
• assist the Board in fulfilling its oversight responsibilities;
• review the integrity of our financial statements;
• review the independent auditor’s qualifications and independence;
• review the performance of our internal auditor and the independent auditor;
• review our compliance with laws and regulations, including disclosure controls and procedures;
• review financial risks;
• oversee the performance of the Company’s independent registered public accounting firm and internal auditor;
• review the qualifications and independence of the Company’s independent registered public accounting firm; and
• oversee the effectiveness of the Company’s internal control over financial reporting.
See Report of the Audit Committee on page 32 for additional information.
| 2022 Meeting Attendance: 100%
| Current Committee Members
Stephen F. Ralbovsky, Chair ∎
George R. Johnson
Catherine J. Boggs
Alice Wong
∎ = Financial Expert
All members of the Audit Committee are financially literate
No members on the Audit Committee serve on the audit committee of any other public companies
Committee consists of four independent directors
|
18 www.hecla.com
Corporate Governance
| | | Compensation Committee | | | Meetings in 2022: 4
| | 
Primary Responsibilities
• discharge the Board’s responsibilities relating to compensation of the Company’s executive officers;
• approve the design of our compensation program;
• approve compensation levels and programs for the executive officers, including the CEO;
• administer the Company’s cash-based and equity- based incentive compensation plans; and
• administer our stock-based plans.
See The Compensation Committee Process and the Role of Management and Human Resources Department on page 40 for more information.
| 2022 Meeting Attendance: 100%
| Current Committee Members
Charles B. Stanley, Chair
George R. Johnson
Catherine J. Boggs
Committee consists of three independent directors
Bylaws |
| | | Governance and Social•
Responsibility Committee
| | | | | Meetings in 2022: 4
| |  
Primary Responsibilities
• periodically review our Corporate Governance Guidelines, Code of Conduct, and other corporate procedures to ensure compliance with laws and regulations;
• review any director candidates, including those nominated or recommended by shareholders;
• identify individuals qualified to become directors consistent with criteria approved by the Board;
• recommend to the Board the director nominees for the next annual meeting of shareholders, any special meeting of shareholders, or to fill any vacancy on the Board;
• review the appropriateness of the size of the Board relative to its various responsibilities;
• recommend committee assignments and committee chairs for the standing committees for consideration by the Board;
• recommend policies, programs, practices, metrics, performance indicators and progress concerning ESG matters to the Board; and
• recommend to the Board any action on ESG and related matters that may be required or considered advisable.
See Sustainability and Corporate Governance on pages 5 and 10 for more information.
| 2022 Meeting Attendance: 100%
| Current Committee Members
Alice Wong, Chair
Stephen F. Ralbovsky
Catherine J. Boggs
Committee consists of three independent directors
|
2023 Proxy Statement 19
Corporate Governance
| | | Health, Safety, Environmental and Technical Committee
| | | | | Meetings in 2022: 4
| |  
Primary Responsibilities
• review operational and exploration performance;
• review operational, reserve, and other technical risks;
• review and monitor health, safety, and environmental policies;
• review the implementation and effectiveness of compliance systems;
• review the effectiveness of health, safety and environmental policies, systems, and monitoring processes;
• review audit results and updates from management with respect to health, safety, and environmental performance;
• review emerging health, safety and environmental trends in legislation and proposed regulations affecting the Company;
• review the technical activities of the Company; and
• make recommendations to the Board concerning the advisability of proceeding with the exploration, development, acquisition, or divestiture of mineral properties and/or operations.
| 2022 Meeting Attendance: 100%
| Current Committee Members
George R. Johnson, Chair
Stephen F. Ralbovsky
Charles B. Stanley
Alice Wong
|
| | | Executive Committee
| | | | | Meetings in 2022: None
| | 
Primary Responsibilities
• empowered with the same authority as the Board in the management of our business, except for certain matters enumerated in our Bylaws and Delaware law, which are specifically reserved to the whole Board.
| 2022 Meeting Attendance: N/A
| Current Committee Members
Phillips S. Baker, Jr., Chair
Catherine J. Boggs
|
| | | Non-Executive Stock Award Committee
| | | | | Meetings in 2022: 1*
| |
Primary Responsibilities
• empowered with the authority to make awards under the Hecla Mining Company 2010 Stock Incentive Plan to employees of the Company or any of its direct and indirect subsidiaries who are not executive officers of the Company or otherwise subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended.
| 2022 Meeting Attendance: N/A
| Current Committee Members
Phillips S. Baker, Jr., Chair
|
20 www.hecla.com
Corporate Governance
Board and Committee Independence; Audit Committee Financial Expert
Our Corporate Governance Guidelines provide that the Board will have a majority of directors who meet the criteria for independence as defined in the NYSE rules. Based on information solicited from each director, and upon the advice and recommendation of the Governance Committee, our Board annually determines the independence of each of our directors in connection with the nomination process. Further, in connection with the appointment of any new director to the Board during the year, our Board makes the same determination. In making its recommendation to the Board, the Governance Committee, with assistance from the Company’s Corporate Secretary, evaluates responses to a questionnaire completed by each director regarding relationships and possible conflicts of interest between such director, the Company, management, the independent registered public accounting firm, and the internal audit firm. In its review of director independence, the Governance Committee considers the commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the Company, management, the independent registered public accounting firm, and the internal auditor.
Our Board has affirmatively determined that all current directors (other than Mr. Baker) have no material relationship with the Company and are independent according to the NYSE listing standards. The Board has determined that each member of the Audit, Compensation, and Governance Committees has no material relationship with the Company and they each satisfy the independence criteria (including the enhanced qualifications with respect to members of the Audit Committee and Compensation Committee) set forth in the applicable NYSE listing standards and SEC rules. In addition, the Board has determined that Mr. Stephen F. Ralbovsky qualifies as an “Audit Committee financial expert,” as such term is defined by the rules of the SEC.
Directors are expected to immediately inform the Board of any material change in their circumstances or relationships that may impact their independence.
Compensation Committee Procedures
The Compensation Committee has the sole authority to set compensation for our executive officers, including annual compensation amounts and Short-term Incentive Plan and Long-term Incentive Plan criteria, evaluate the performance of our executive officers, and make awards to our executive officers under our stock incentive plans. The Compensation Committee also reviews and approves any proposed plan or arrangement providing for incentive, retirement or other compensation to our executive officers and oversees our assessment of whether our compensation practices are likely to expose the Company to material risks. In addition, the Compensation Committee annually recommends to the Board the slate of officers for the Company, periodically reviews the functions of our officers, and makes recommendations to the Board concerning those functions.
2022 Board Meetings and Attendance
Directors are expected to make every effort to attend the Annual Meeting, all Board meetings, and the meetings of the committees on which they serve. During 2022, there were seven meetings of the Board. In 2022, each director attended 100% of the Board meetings and the committee meetings in which they are a member. All members of the Board attended last year’s Annual Meeting of Shareholders, which was held in May 2022.
Director Orientation and Continuing Education
New directors undergo a comprehensive orientation program that introduces them to the Company, including our business operations, strategy, financial position, key members of management and governance structure. Directors also are encouraged to enroll in director education programs. Directors have contact with leaders throughout the organization and visit our mine sites, where they tour the facilities and interact directly with the personnel responsible for our day-to-day operations. These activities collectively help to ensure that new directors become, and existing directors remain, knowledgeable about the most important issues affecting our Company and our business.
2023 Proxy Statement 21
Corporate Governance
Board and Committee Self-Evaluation Process
Our Board recognizes that a thorough, constructive evaluation process enhances our Board’s effectiveness and is an essential element of good corporate governance. Accordingly, every year, our Board and each committee of the Board conducts a self-evaluation of its performance and effectiveness. The Governance Committee oversees the annual self-evaluation process on behalf of the Board. Our Board and committee evaluations cover the following topics:
Board and committee composition, including skills, background, and experience;
review of key areas of focus for the Board and committees, and effectiveness in overseeing those responsibilities;
satisfaction of director performance, including that of the Board Chair;
Board and committee information needs, and quality of materials presented;
areas where the Board should increase its focus;
satisfaction with the Board and committee schedules, agendas, time allocated for topics and encouragement of open communication and discussion;
access to management, experts, and internal and external resources;
oversight of financial reporting process and internal control procedures;
Company’s strategic direction and annual operating plan;
selection and evaluation process of Board candidates; and
Evaluation Process
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1 | | Corporate
Governance Review | |  | | 2 | | Annual Board and
Committee
Evaluations | | | | | | 3 | | Summary of
Evaluations | | | | | | 4 | | Board and
Committee Review | | Our self-evaluation process is conducted on an anonymous basis, using our board portal. We have found by using an anonymous evaluation process, the Board and committee members have a level of comfort in being able to critique the Board and/or the committees. | | The Board and each committee conduct annual self-evaluations through the use of electronic questionnaires in the board portal that cover the topics discussed above. | | Hecla’s Corporate Secretary uses our board portal to generate a summarized report of our directors’ anonymous responses to the electronic questionnaires and submits the report to the appropriate chair of each committee of the Board for review before the next quarterly Board and/or committee meeting. | | Using the summaries of the self-evaluations as guides, our chair of the Governance Committee reviews the results of the Board evaluation, and each committee chair reviews the results of each committee evaluation. The self-evaluations and summaries are shared and discussed with the full Board and each committee. The objective is to allow the Board and each committee to share their perspectives and consider any necessary adjustments in response to the collective feedback from the self-evaluations. |
22 www.hecla.com
Corporate Governance
Shareholder Proposals for the 2024 Annual Shareholders’ Meeting
Our Bylaws establish procedures governing the nomination and eligibility of nominees for election to our Board, and the proposal of business to be considered by our shareholders at an annual meeting of shareholders. For nominations or other business to be properly brought before an annual meeting of shareholders by a shareholder, the shareholder must have given timely notice thereof in writing to our Corporate Secretary. To be timely, a shareholder’s notice must be delivered to our:
Corporate Secretary April 4, 2024
Proxy Statement Summary This summary highlights information contained elsewhere in this Proxy Statement. It does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting. For more complete information regarding the Company’s 2023 performance, please review our Annual Report on Form 10-K for the period ending December 31, 2023. Agenda and Voting Recommendations | | | | | | | | | Proposal 1 ELECTION OF THREE CLASS II DIRECTORS Board Vote Recommendation FOR Page 28 | | | | Proposal 2 RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS Board Vote Recommendation FOR Page 35 | | | | Proposal 3 APPROVE, ON AN ADVISORY BASIS, NAMED EXECUTIVE OFFICER COMPENSATION Board Vote Recommendation FOR Page 38 |
2023 Performance Highlights
| | | | | | | | Operational Highlights | | Financial Highlights | | Positioning for Growth | • Silver reserves of 238 million ounces, second highest in Company history; and gold reserves of 2.2 million ounces. • Produced 14.3 million ounces of silver, Hecla’s second highest in the Company’s history, and 151,259 ounces of gold. • At Lucky Friday, constructed on time and budget, infrastructure that bypassed the fire damaged shaft. • Keno Hill began silver production in the second quarter of 2023. | | • Sales of $720.2 million, the second highest in history, with 39% from silver and 36% from gold. • Cash flow from operations of $75.5 million, with Greens Creek generating $157.3 million in cash flow from operations and free cash flow of $121.6 million(1). • Strong balance sheet with $106.4 million in cash and cash equivalents with approximately $121.5 million in available liquidity. • Returned $15.7 million to our common and preferred stock shareholders through dividends. • Adjusted EBITDA(2) for the year was $212.6 million, in line with the prior year. | | • 2024 production expected to be more than 16 million silver ounces and up to 20 million by 2026. • Restarted our Lucky Friday mine in January 2024. • In 2024, our Keno Hill mine is expected to approximately double its 2023 production. • Keno Hill reserves at year-end 2023 were 11% higher than year-end 2022. • Completed the acquisition of ATAC Resource Ltd., which consisted of a massive land package of over 700 square miles in the Yukon Territory, with identified gold, silver, and base metal mineralization. |
| (1) | Free cash flow is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
| (2) | Adjusted EBITDA is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
2023 ESG Highlights
| | | | | | | | Environmental/Safety | | Social | | Governance | • AIFR (including lost time, restricted work, and medical treatment) of 1.45, lower than the U.S. national average for metal and non-metal mines reported by MSHA. • Our Greens Creek and Lucky Friday mines recorded their lowest AIFR of 0.29 and 0.66, respectively. • Greens Creek mine received the annual Hard Hat Safety Award by Alaska Miners Association in recognition of the mine’s exemplary commitment to safety. • Recognition of Hecla’s culture of innovation with the issuance of a patent in the U.S. for the Underhand Closed Bench (UCB) mining method. • Received the 2023 National Institute for Occupational Safety and Health (NIOSH) Mine Safety and Health Metals Sector Technology Innovation Award. • For the second time in three years, Casa Berardi mine was awarded the John T. Ryan Safety Trophy for outstanding safety performance in the Quebec-Maritime Provinces Region. | | • Women comprise 10% of Hecla’s workforce, and 22% of our professional/managerial positions. • In 2023, the Hecla Charitable Foundation donated more than $377,206 toward education, youth activities, community programs, and health services activities in communities in which we operate. • Hecla has two operations and one exploration project in Canada that have benefit agreements in place with the First Nations – Abitibiwinni at our Casa Berardi Mine in Quebec, the First Nation Na-Cho Nyak Dun at our Keno Hill operation in the Yukon, and the Gitanyow at our Kinskuch property in British Columbia. • Our President and Chief Executive Officer (CEO) received the Selwyn Blaylock Canadian Mining Excellence Award, which recognizes an individual who has demonstrated distinguished service to Canada through exceptional achievement in mining, metallurgy, or geology. | | • Five of our seven directors joined the Board after 2016, including one in 2021 and another in 2024. • Average Board tenure is 9 years. • 29% of our directors are women. • Our Board appointed its first woman Board Chair in 2022. • Our Board Chair is independent of our CEO. • Directors who receive more “Against” votes than “For” votes must tender their resignation to the Board for consideration. |
Shareholder Engagement We have long believed that the delivery of long-term value requires regular dialogue with, and accountability to, our shareholders. As a result, our management team participates in numerous investor meetings throughout the year to discuss our business and strategic priorities. These meetings include in-person, telephonic, and webcast engagements, as well as investor conferences and can occur in a group or one-on-one settings. Our core shareholder engagement team includes our Senior Vice President – Chief Administrative Officer, Vice President – General Counsel, Vice President – Corporate Development & Sustainability, Vice President – Investor Relations and Treasurer, and Assistant Secretary. If requested by a shareholder, our chairpersons of each committee of the Board are available to join any shareholder engagement.
| | | | | | | | Solicit and receive feedback from shareholders on governance practices and trends, board composition, executive compensation, sustainability, human capital management and other shareholder priorities. | | Hecla engagement team reports to Board to review shareholder feedback and use information gathered from the winter engagement to, when appropriate, enhance disclosures and revise governance practices, executive compensation program, sustainability practices or other programs and policies. | | Engage with institutional holders, analysts, and other investors during the year on other topics of interest. In 2023, management conducted approximately 20 presentations for analysts and investors, held approximately 110 one-on-one group meetings with investors, and hosted four quarterly conference calls with investors and analysts allowing for questions and answers with management. In addition, the Company responds to questions from investors and analysts by telephone and email throughout the year. | | Receive and publish voting results from annual meeting which help shape our ongoing improvements and developments in governance practices, executive compensation, sustainability, and other shareholder interest areas. |
In November 2023, we sought engagement with 36 of our largest shareholders (representing approximately 311.0 million shares, or 50.4% of shares outstanding) and the two proxy advisory firms. We had three shareholders request a meeting (representing approximately 21.2 million shares) and eight responded that they did not need to meet. The two proxy advisory firms did not respond to our invitation to engage.
During our 2023 winter engagement, we discussed: | • | | the Board’s continued search for additional directors; |
| • | | our sustainability initiatives; |
| • | | Indigenous relations; and |
| • | | corporate governance matters. |
Say-on-Pay In 2023, our Say-on-Pay proposal received 97% support of shares voted. During our outreach this year, no shareholders raised concerns about our executive compensation practices and programs. Environmental Matters Environmental topics discussed with shareholders focused on net zero carbon emission levels, and our gap and materiality analysis to reporting frameworks (Sustainability Accounting Standards Board – metals and mining standards, Task Force on Climate-Related Financial Disclosures, and Global Reporting Initiative, as well as our Canadian operations benchmarking against the Towards Sustainability Mining protocols). Shareholders did not raise a concern if we stop purchasing carbon emissions reduction credits. See Sustainability on page 5. Our 2023 Sustainability Report will be available on our website in mid-May 2024. Corporate Governance In our 2023 shareholder outreach, we discussed our board composition. Since 2016, we have added five new directors to our Board, including one in 2021 and the most recent in 2024, thereby reducing the average tenure of the Board to nine years. We had two long-term directors retire from the Board in 2022 after reaching our mandatory retirement threshold, which reduced the size of the Board to six at that time. We continue to actively seek additional members for our Board and, just recently, added one director, thereby increasing the Board to seven. We hope to add another new director in the next 12 months. We also discussed three of our corporate governance features that may have an anti-takeover effect on the Company: (i) the inability of shareholders to call special meetings; (ii) our classified Board structure; and (iii) supermajority voting provisions in our Restated Certificate of Incorporation and Bylaws. In prior years we have proposed amendments to our Restated Certificate of Incorporation and Bylaws to revise these three provisions, but the voting results have never been close to sufficient to implement change. The required vote is 80% of outstanding shares voted in favor of any such change, and we have never obtained higher than 56% of outstanding shares voted in favor. The shareholders we spoke with unanimously told us that due to the repeated failure of proposals to change these provisions at past annual meetings, and the desire to improve the format and readability of our Proxy Statement and the resources involved in printing and mailing a lengthier Proxy Statement, they would not object if we did not include these proposals at our Annual Meeting. The Board will continue to assess evolving best practices in corporate governance matters, including the subjects of the prior proposals discussed above. In future years, we may again include one or more of these proposals on the agenda for an Annual Meeting. Furthermore, the Board will continue to consider any formal proposals and other feedback that we receive from shareholders. And, we will continue our shareholder outreach efforts so that we can understand and appropriately react to the evolving viewpoints of our shareholders on corporate governance and other matters.
Sustainability We are committed to meeting high standards of environmental stewardship across our operations, respecting human rights in all our business practices, and prioritizing the health, safety and well-being of our workforce and host communities where we operate. We recognize that the long-term success of the Company and sustainable value creation are dependent on integrating the ESG performance factors that are most important to our stakeholders and to our business into our business strategies. Thus, we measure our ESG performance against the following benchmarks: | • | | the Sustainability Accounting Standards Board – metals and mining standards; |
| • | | relevant aspects of the Task Force on Climate-Related Financial Disclosures, Global Reporting Initiative; and |
| • | | Mining Association of Canada’s Towards Sustainable Mining protocols. |
We have also prioritized the United Nations Foundation Sustainable Development Goals that most directly align with our business, corporate strategy, and material sustainability issues. More information about our ESG efforts can be found in our Sustainability Reports (ESG Reports) on our website at https://www.hecla.com under “Sustainability.” Note that this information is not incorporated by reference into this Proxy Statement. Forward-looking statements in this Proxy Statement and in our ESG Reports and disclosures are aspirational and not guarantees or promises that goals, targets, or projections will be met, and no assurance can be given that any commitment, expectation, initiative, or plan referenced in this Proxy Statement or in our ESG Reports and disclosures can or will be achieved or completed. You can view our 2022 Sustainability Report on our website. We expect our 2023 Sustainability Report to be available on our website in mid-May 2024. Board Oversight and Management of Sustainability Primarily, two committees of the Board provide ESG oversight. The Health, Safety, Environmental and Technical Committee (HSET Committee) is tasked with overseeing ESG risks, strategic plans, and progress on issues that may potentially adversely impact Hecla’s operations, activities, plans, strategies, or reputation. The focus is primarily on internal matters and the technical requirements of ESG matters. The Governance and Social Responsibility Committee (Governance Committee) is tasked with reviewing and making recommendations to the Board for ESG matters that focus primarily on policy and external matters. Each committee relies on the activities of the other. At the executive level, the Vice President and Chief Operating Officer (which position is currently unfilled due to a retirement in December 2023), Vice President – Operations, Vice President – Corporate Development and Sustainability, and Senior Vice President – Chief Administrative Officer report directly to our CEO and are responsible for implementing the Company’s ESG programs. At our operations, our Vice Presidents – General Managers, and other employees work toward achieving sustainability goals. Environment Our metals, especially silver and zinc, are critical components to green energy technologies and national security. Demand for responsibly sourced metals is growing. As the largest silver producer in the United States, Hecla is proud to supply an essential metal used in critically important markets including renewable energy technology, medical products, and military defense technology. At the same time, we recognize the importance of responsible mining to ensure that we minimize the impacts of our activities on the environment where we live and work. At each of our sites, we have implemented programs to reduce freshwater and energy consumption, reduce our carbon footprint, maintain local water quality backed by rigorous testing and monitoring, and reclaim the land once mining is complete. We work to minimize the environmental impact of our operations through improvement of our processes. We set reduction targets for greenhouse gas emissions and energy use capturing and tracking environmental data to benchmark our operations against industry standards to provide accountability and transparency in our progress against our goals.
Risk Management Environmental Policies, Management System, and Training Hecla’s Environmental Policy states our commitment to complying with all applicable environmental laws and regulations that govern our facilities and going beyond them when minimal compliance does not meet Hecla’s values. Employees and contractors are also expected to comply with all applicable internal policies, programs, standards, and procedures as outlined in our Code of Conduct, and we conduct structured environmental reviews and audits to assess compliance at least annually. We utilize our Environmental Management System (EMS) to provide consistency in our environmental programs company-wide and promote a culture of environmental awareness, innovation, and accountability across all our operations. The EMS is a 13-element program that promotes continuous improvement around issues including obligation registers, management of change, air quality, water and waste management, energy management, training, and reporting. The EMS program, which is benchmarked against ISO-14001 and complements Canada’s Towards Sustainable Mining program, is reviewed through internal audits and third-party reviews. We are in the process of implementing the EMS at our Keno Hill operations. As part of our environmental management programs, we are committed to ensuring that our employees receive training to raise awareness of environmental issues and our processes to reduce environmental impact. In 2023, employees’ company-wide received more than 1,200 hours, and contractors received 201 hours of environmental training, focusing on job-specific environmental awareness, hazardous material management, spill response, and reporting. Climate Change and Net Zero Targets Hecla recognizes that the impacts of climate change may create greater potential risks for our operations, including risks posed by frequent and extreme weather events such as droughts and intense rainfalls. Potential risks to our operations include higher volumes of mine contact water requiring storage and treatment, increased requirements for stormwater diversion and associated water management systems, and reduced availability of freshwater. As part of our enterprise risk management processes, we are committed to incorporating climate-related risks and opportunities into our risk management and strategic planning processes aligned with the Task Force on Climate-Related Financial Disclosures framework. At least every three years, we conduct structured high-level risk assessments (HLRAs) that include climate change considerations and appropriate materiality re-assessments. From these assessments, we develop site-specific management action plans that are assigned to the site management team for resolution. Each key risk identified in the HLRA response action plan is matched with an appropriate performance metric against which progress can be measured. Management and relevant employees meet quarterly with the HSET Committee of our Board to present project updates, including results from HLRAs and progress on material HLRA action plans. | | | | | | | | | | Environmental Highlights | | | | | | | Protecting the Environment: Hecla’s responsibilities expand beyond producing essential metals, and we recognize the importance of minimizing the impact on the environments of the communities where we live and work. We are committed to minimizing the environmental footprint of our operations through continuous improvement of our processes. Integrated Environmental Working Groups: Each of our sites has a Tailings, Waste and Water working group that considers, among other aspects, climate change-related impacts that could affect site operations which are then integrated into design of mine facility infrastructure. | | Renewable Energy: One of Hecla’s largest sources of electricity is renewable hydropower, and we use as much hydroelectricity as our power suppliers can provide. Currently, at our production sites: • Casa Berardi uses approximately 100% renewal hydropower to supply line power; • At Greens Creek, 84% of our electricity is sourced from the grid, of which 100% is renewable hydropower; • The energy provider at our Lucky Friday location uses a mix of both hydropower and natural gas, with 60% of electricity sourced being renewable; and • 86% of Keno Hill’s power – our newest project – is hydropower. |
Safety and Health Hecla’s commitment to the safety and health of our workforce has been an essential part of our corporate culture for 133 years and has enabled us to build the highest reputation for safety with our employees, our communities, and within the industry. We work to operate our mines safely by promoting a deeply rooted, value-based culture, leveraging mining expertise developed over the Company’s long history, and innovating new practices that improve safety while increasing productivity. As an example, 2021 saw the development of the patented UCB mining method at the Lucky Friday mine. The UCB mining method has improved our ability to manage seismicity at the mine while it has also enabled us to increase production. | | | | | | | | | | Safety and Health Highlights | | | | | | | Safety: In 2023, our AIFR (including lost time, restricted work, and medical treatment) was 1.45, which is lower than the U.S. national average for metal and non-metal mines reported by MSHA. Safety and Health Training: • Safety Meetings Held: 979 • Safety and Health Training Hours: 11,338 | | Safety Awards: • Three employees at our Nevada Operations each received 2023 Safety Awards from the Nevada Mining Association. • NIOSH recognized Hecla with its 2023 NIOSH Mine Safety and Health Technology Metal Sector Innovation Award for developing the UCB mining method. Zero Fatalities: • In 2023, we had zero employee or contractor fatalities. |
Supporting and Developing Our People Hecla is dedicated to investing continuously in the technology, training, systems, and programs that help protect and support our people. We also strive to have our workforce at least mirror the local demographic diversity and try to be more diverse for gender, ethnicity, and local Indigenous people. At the executive level, the Senior Vice President – Chief Administrative Officer reports directly to the CEO and is responsible for the Company’s programs to support and develop our people. At the local level, each operating site has a human resource professional whose primary role is to support and develop our people at that site. As of December 31, 2023, Hecla employed approximately 1,775 people, of which approximately 990 were employed in the United States, 770 in Canada, and 20 in Mexico. The vast majority of Hecla’s employees are full-time, and approximately 260 of our employees are covered by a collective bargaining agreement. Creating greater gender diversity in a predominantly male industry is among the priorities of Hecla currently and in the coming years. | | | | | | | | | | Human Capital Management Highlights | | | | | Gender Diversity: • 10% of our workforce are women, and women hold 22% of our professional/managerial positions. 29% of our Board is made up of women. • We have implemented programs to foster the hiring and retention of women including the creation of networking opportunities with senior executives and Board members. Promoting Diverse Cultures: • In 2023, approximately 114 First Nations workers worked at Casa Berardi. Hecla encourages its suppliers to hire Indigenous workers and remain committed to providing opportunities to the First Nation businesses. • Our Casa Berardi mine in Quebec provides annual cultural awareness training for all department heads. • We hold companywide diversity, equity and inclusion (DEI) training to foster an inclusive, welcoming workplace. Trainings are mandatory and employee participation is monitored and tracked by a third party to ensure actual completion. Discrimination & Harassment: We are committed to providing equal employment opportunities and complying with all applicable employment laws in the countries where we operate, as outlined in the “Employee Relations” section of our Code of Conduct. | | Protecting Human Rights: We support fundamental human rights in all our operations, including our supply chain, and in all jurisdictions in which it conducts business. We operate in countries where human rights laws are respected and promoted. Our Human Rights Statement discusses our commitment to conduct business in a manner consistent with the United Nations Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights. Education: • We offer a tuition reimbursement program to assist with educational expenses for employees who are interested in furthering their education. • At Lucky Friday, we provide on-line training through Caterpillar and Epiroc to ensure our miners continually expand their skill sets. • As part of our workforce training program, new hires in various entry-level professional fields including accounting, finance, geology, engineering, and metallurgy, can participate in a mentoring program where they are paired with retired Hecla employees or other professionals in the community. Awards: Our Greens Creek mine was awarded the Juneau Rotary Club’s 2023 Vocational Service Award, for creating career opportunities for the next generation of miners – and other technical trades. Greens Creek funds vocational scholarship programs, tours, class and coursework, internships, and externships. |
Community Engagement Over our 133-year history, Hecla has always been a strong partner in the communities where we operate. Through the continued growth of our responsible mining operations, we provide significant social and economic benefits to our local communities. We are the largest private-sector employer and taxpayer in Juneau, Alaska, near our Greens Creek mine, in Wallace/Mullan, Idaho, near our Lucky Friday mine, in La Sarre, Quebec, near our Casa Berardi mine, and in the Yukon Territory, where our Keno Hill mine is located. Some of these operations have been part of their communities for generations. We communicate information through a variety of methods including community meetings, local and social media, and flyers, with all materials available in the local language with translation provided if necessary. We disclose the results of environmental, economic, and social impact assessments and partner with local stakeholders. We also work with local stakeholders to identify opportunities for the Hecla Charitable Foundation to provide support for community initiatives. | | | | | | | | | Community Engagement Highlights | | | | | Engaging with Community Stakeholders: We engage with stakeholders at all our sites during the mining life cycle to be a constructive partner in the communities where we operate and deepen our understanding of local concerns and issues. Indigenous Relations: With the purchase of Alexco Resources in 2022, Hecla has two operations and one exploration project in Canada that have benefit agreements in place with the First Nations. This includes the Abitibiwinni at the Casa Berardi Mine in Quebec, the First Nation Na-Cho Nyak Dun at Keno Hill in the Yukon, and the Gitanyow at the Kinskuch property in British Columbia. Community Partnerships: • In Montana, Hecla originated the Grizzly Corridor Project in collaboration with biologists, the U.S. Forest Service, U.S. Fish and Wildlife, and local logging contractors. On Hecla land, we strategically thinned tree density to open the canopy, thereby resulting in travel routes for bears while increased sunlight stimulates growth in the understory. • In Montana, we also partnered with the Confederated Salish and Kootenai Tribes to harvest and plant over 200,000 native shrubs and trees at our reclaimed Troy mine. | | Supporting Communities through the Hecla Charitable Foundation: In 2023, the Hecla Charitable Foundation donated more than $377,206 toward education, youth activities, community programs, and health services activities in communities in which we operate. Building a Skilled Workforce: • At our Greens Creek mine in Alaska, we have partnered with multiple entities to create a skilled local workforce. • At Prince William Sound College in Alaska, we created a Millwright program, including full scholarships. • At the Alaska Vocational Technical Center, we provided scholarships and internships to Diesel and Electrical Tech students. • We continue to use the Mining and Petroleum Training Service in Alaska to train employees new to mining. |
Corporate Governance We are committed to effective corporate governance that reflects our values and supports our strategic and financial objectives and performance. Our corporate governance practices are generally reflected in our Bylaws, Corporate Governance Guidelines, Code of Conduct, Whistleblower Policy, and board committee charters. Electronic Access to Corporate Governance Documents Our corporate governance documents are available on our website at https://www.hecla.com by selecting the tab titled “Company” and then selecting the tab titled “Governance & Ethics.” These include: | • | | Restated Certificate of Incorporation |
| • | | Corporate Governance Guidelines |
| • | | Code of Ethics: CEO and Senior Financial Officers |
| • | | Supplier Code of Conduct |
| • | | Safety and Health Policy |
| • | | Bribery and Anti-Corruption Policy (included in Code of Conduct) |
| • | | Charters of the Audit, Compensation, Governance, and HSET Committees of the Board |
Shareholders may also request a free copy of these documents from: Investor Relations, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408; (208) 769-4100. Corporate Governance Guidelines and Code of Conduct The Board has adopted Corporate Governance Guidelines and a Code of Conduct in accordance with the U.S. Securities and Exchange Commission (SEC) and the NYSE corporate governance standards. The Corporate Governance Guidelines were adopted by the Board to ensure the Board is independent from management, that the Board adequately performs its function as the overseer of management, and to help ensure that the interests of the Board and management align with the interests of our shareholders. We believe that operating with honesty and integrity has earned trust from our shareholders, credibility within our communities and dedication from our employees. Our directors, officers and employees are required to abide by our Code of Conduct to promote the conduct of our business in a consistently legal and ethical manner. Our Code of Conduct covers many topics, including conflicts of interest, confidentiality, fair dealing, proper use of the Company’s assets, and compliance with laws, rules, and regulations. In addition to the Code of Conduct for directors, officers and employees, our CEO, Senior Vice President Chief Financial Officer, Vice President – Controller, and site controllers are also bound by a separate Code of Ethics. The Governance Committee has adopted procedures to receive, retain, and react to complaints received regarding possible violations of the Code of Conduct, and to allow for the confidential and anonymous submission by employees of concerns regarding possible violations of the Code of Conduct. Our employees may submit any concerns regarding apparent violations of the Code of Conduct to their supervisor, our Vice President – General Counsel, the Chair of the Governance Committee, or through our website submission page or telephone hotline (both of which have the option to remain anonymous). In 2023, we did not receive any reports of misconduct through our website submission page or telephone hotline, established as part of our Code of Conduct. 
| | | | | | | | | 2024 Proxy Statement | 11 |
Whistleblower Policy We have a Whistleblower Policy adopted by our Audit Committee that encourages our employees, suppliers, contractors, shareholders, customers, or other stakeholders (collectively, stakeholders) to report to appropriate Company representatives, without fear of retaliation, any information relating to possible fraud or questionable accounting, internal controls, or auditing matters. Stakeholders may confidentially submit any concerns to the Company’s Vice President – General Counsel, or through a third-party telephone hotline and online reporting system (ConfidenceLine), both of which have the option of remaining anonymous. The goal of this policy is to discourage illegal activity and business conduct that damages Hecla’s reputation, business interests, and our relationship with stakeholders. In 2023, we did not receive any reports through our secure online reporting system established as part of our Whistleblower Policy. Communications with the Board Stakeholders wishing to communicate with our Board Chair or with the independent directors as a group may do so by delivering or mailing the communication in writing to: Board Chair, c/o Corporate Secretary, Hecla Mining Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of our internal auditor and overseen in accordance with procedures established by the Audit Committee with respect to such matters. From time to time, the Board may change the process by which stakeholders may communicate with the Board or its members. Please refer to our website at https://www.hecla.com, selecting the tab titled “Company” and then the tab titled “Governance & Ethics,” for any changes in this process. Board Leadership Structure Currently, the positions of CEO and Board Chair are held by separate persons. The Board believes this structure is optimal for the Company at this time because it allows the CEO to focus on leading the Company’s business and operations, and the Board Chair to serve as a sounding board and advisor to the CEO, and to lead the activities of the Board. The Board has also determined that having this structure ensures a greater role for the independent directors in the oversight of the Company, and it enhances the Board’s independence and, we believe, senior management’s accountability to the Board. In the future, if the individual elected as Board Chair also were to be the CEO, the independent directors would elect a Lead Independent Director for a one-year term. This would help ensure continued robust independent leadership of the Board. Executive sessions of independent directors are included on the agenda for every regularly scheduled Board meeting and were held at each Board meeting in 2023. The executive sessions are chaired by the Board Chair. Our independent directors meet in executive sessions without management present unless the independent directors request their attendance. For the foregoing reasons, we have determined that our leadership structure is appropriate in the context of our specific circumstances.
| | | | | 12 | 2024 Proxy Statement | | | | |
Board Refreshment In accordance with our Corporate Governance Guidelines, the Governance Committee reviews annually the composition and size of the Board, recognizing the importance of refreshment to maintain a balance of tenure, diversity, skill sets and experience on our Board. Our Board currently consists of seven members, six of whom the Board has affirmatively determined are independent. There are three current Class II directors whose terms will expire at the Annual Meeting: Stephen F. Ralbovsky, Catherine J. Boggs, and Mark P. Board (who was added to the Board in February 2024). Since 2016, we have recruited five new Board members, reflecting our continual process of board refreshment. These five additions to our Board are consistent with our objective to have a Board with expansive and diverse experience, a deep understanding of the challenges and opportunities associated with our business and a focus on value and sustainability for the benefit of all stakeholders. Our director recruitment efforts are ongoing and further additions to the Board are anticipated.
| | | | | | | | | 2024 Proxy Statement | 13 |
Identifying and Evaluating Nominees for Director Director Selection Process | | | | | | | | | | | | | 1 CANDIDATE RECOMMENDATIONS From shareholders, management, directors, and search firms | | | | 2 GOVERNANCE COMMITTEE Evaluates the Board’s needs and screens and interviews candidates Reviews qualifications and expertise, tenure, regulatory requirements, and diversity Recommends nominees to the Board | | | | 3 BOARD OF DIRECTORS Discusses, analyzes independence, and selects nominees for election | | | | 4 SHAREHOLDERS Vote on nominees at Annual Meeting |
The Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance Committee is responsible for ensuring that the composition of the Board accurately addresses the needs of our business. In the event vacancies are anticipated, or arise, the Governance Committee considers various potential candidates for director. Candidates may come to the attention of the Governance Committee through current Board members, professional search firms, shareholders, or other persons. Consideration of new director nominee candidates typically involves a series of internal discussions, review of information concerning candidates and interviews with selected candidates. The Governance Committee then determines the best qualified candidates based on the established criteria and recommends those candidates to the Board for appointment until such time as they stand for election by our shareholders. While the Governance Committee and our Board prioritize maintaining a board that is comprised of directors with a diverse set of skills, backgrounds, experiences, and perspectives, they also recognize the importance of balancing these qualifications with the overall tenure of directors in their long-term approach to board refreshment. The fresh viewpoints and philosophies newer directors bring, coupled with the valuable experience and institutional knowledge the longer-tenured directors possess, benefits the Board and its overall contribution to the Company and our shareholders. Since 2016, the Board has appointed five highly qualified directors who bring insight to areas such as mining, international business, acquisitions, operations, legal, risk management, geology, engineering, finance, and tax. To supplement our newer directors, our longer-tenured directors have extensive knowledge of our operations and have the perspective of overseeing our business activities through economic cycles and across differing competitive environments. We hold the view that the continuing service of qualified incumbents promotes stability and continuity in the boardroom, contributing to the Board’s ability to work as a collective body, while giving us the benefit of familiarity and insight into our affairs that our directors have accumulated during their tenure. Recent additions to the Board provide new perspectives and diversity, while directors who have served for a number of years bring experience, continuity, institutional knowledge, and insight into the Company’s business and industry. Directors with relevant business and leadership experience provide the Board with a useful perspective on business strategy and significant risks, and an understanding of the challenges facing the business. Accordingly, the process for identifying nominees reflects our practice of re-nominating incumbent directors who (i) continue to satisfy the Governance Committee’s criteria for membership on the Board, (ii) the Governance Committee believes continue to make important contributions to the Board, and (iii) consent to continue their service on the Board. Directors should also be able to commit the requisite time for preparation and attendance at regularly scheduled Board and committee meetings, as well as be able to participate in other matters necessary to ensure good corporate governance is practiced. The Governance Committee reviews annually with the Board the composition of the Board as a whole and recommends, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise, and diversity required for the Board as a whole, and contains at least the minimum number of independent directors required by applicable laws and regulations. Board members should possess such attributes and experience as are necessary for the Board as a whole and contain a broad range of personal characteristics, including diversity of backgrounds, management skills, mining, accounting, finance, and business experience. Our current directors exhibit an effective mix of skills, experience, diversity, and perspective. Summarized below is a description of why each core competency is important for service on Hecla’s Board.
| | | | | 14 | 2024 Proxy Statement | | | | |
| | | | | | | | | | | | | | | | | | Knowledge, Skills, and Experience | |  | |  | |  | |  | |  | |  | |  | | | | | | | | | |  | | Audit Committee Financial Expert | | | | | | | | | |  | | | | | | | | | | | | | |  | | Board Service on Public Companies We value individuals who understand public company reporting responsibilities and have experience with the issues commonly faced by public companies. | | | | | | | | | | | | | | | | | | | | | | | |  | | CEO Experience / Public Company Executive These skills are important to gain a practical understanding of organizations and drivers of individual growth and development. Two of our directors have experience as a CEO. | | | | | | | | | | | | | | | | | | | | | | | |  | | Corporate Governance Experience with governance principles and policies. | | | | | | | | | | | | | | | | | | | | | | | |  | | Environmental and Social Responsibility Experience with environmental and social responsibility initiatives, including sustainability, diversity, and inclusion. | | | | | | | | | | | | | | | | | | | | | | | |  | | Finance We believe that an understanding of finance and financial reporting processes is important for our directors to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. It is important to have experience in capital markets, corporate finance, accounting, and financial reporting and several of our director’s satisfy the “accounting or related financial management and experience” criteria set forth in the NYSE listing standards. Two of the seven directors satisfy the “audit committee financial expert” criteria set forth in regulations of the SEC. | | | | | | | | | | | | | | | | | | | | | | | |  | | Geology, Mining and Engineering It is important that some of our directors have experience in open-pit and underground mines, as well as knowing the science and technology of extracting minerals, exploration, geology, metallurgy, and geotechnical engineering experience. | | | | | | | | | | | | | | | | | | | | | | | |  | | Industry Knowledge and / or Experience Having experience in our industry or a similar industry contributes to a deeper understanding of our business strategy, operations, key performance indicators and competitive environment. | | | | | | | | | | | | | | | | | | | | | | | |  | | International Business With operations in Mexico and Canada and prospects for further expansion, international experience helps us understand opportunities and challenges. | | | | | | | | | | | | | | | | | | | | | | | |  | | Legal and Compliance Hecla is subject to a broad array of government regulations. Mining is impacted by changes in law or regulation in areas such as safety, environmental and disclosure. Several of our directors have experience in regulated industry, providing them with insight and perspective in working constructively and proactively with governments and agencies. | | | | | | | | | | | | | | | | | | | | | | | |  | | Risk Management Considering the Board’s role in risk oversight, we seek directors who can contribute to the identification, assessment and prioritization of risks facing the Company. | | | | | | | | | | | | | | | | | | | | | | | |  | | Strategic Planning, Business Development, Business Operations Expertise Experience defining and driving strategic direction and growth and managing the operations of a business or large organization. | | | | | | | | | | | | | | | | | | | | | | | |  | | Human Capital Management Oversight of the recruitment, retention and development of key talent is critical for execution of Company strategies and initiatives. | | | | | | | | | | | | | | | | | | | | | | | |  | | Cybersecurity and Technology Experience in providing perspectives on innovation and overseeing the physical and cyber threats against the security of our operations, assets and systems and response preparedness. | | | | | | | | | | | | | | |
| | | | | | | | | 2024 Proxy Statement | 15 |
| | | | | | | | | | | | | | | | | Gender Diversity 29% 2 Women (1 of whom chairs a standing committee, and the other is the Board Chair) | | | | 
| | | | Racial/Ethnic Diversity 14% 1 racial/ethnic minority | | | |
| | | | Independence 6 of 7 Are independent | | | | | | | | | | | | | | | | | | | | | | | | | | | Board Refreshment 5 New since 2016 | | | |
| | | | Average Board Tenure 9 years | | | |
| | | | Cybersecurity 57% Have experience with cybersecurity | | | | | | | | | | | | | | | | | | 83% Refreshment of independent board members since 2016 | | | | | | | | Average Age of Directors 68 | | | | | | | | Industry and Operational Experience/
Risk Management 100% Have industry and operational experience and risk management experience |
In general, and as more fully outlined in our Bylaws and Corporate Governance Guidelines, in evaluating director candidates for election to our Board, the Governance Committee will: (i) consider if the candidate satisfies the minimum qualifications for director candidates as set forth in the Corporate Governance Guidelines; (ii) consider factors that are in the best interests of the Company and its shareholders, including the knowledge, experience, integrity and judgment of each candidate; (iii) consider the contribution of each candidate to the diversity of backgrounds, experience and competencies which the Board desires to have represented, with such diversity being considered among the other desirable attributes of the Board; (iv) assess the performance of an incumbent director during the preceding term; (v) consider each candidate’s ability to devote sufficient time and effort to his or her duties as a director; (vi) consider a candidate’s independence and willingness to consider all strategic proposals; (vii) consider any other criteria established by the Board and any core competencies or technical expertise necessary to manage and direct the affairs and business of the Company, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties; and (viii) determine whether there exists any special, countervailing considerations against nomination of the candidate. Director Qualifications, Evaluation, and Nomination The Governance Committee believes nominees for election to the Board should also possess certain minimum qualifications and attributes. The nominee must: (i) exhibit strong personal integrity, character and ethics, and a commitment to ethical business and accounting practices; (ii) not be involved in ongoing litigation with the Company or be employed by an entity engaged in such litigation; and (iii) not be the subject of any ongoing criminal investigations in the jurisdiction of the United States, any state, or internationally, including investigations for fraud or financial misconduct. In connection with the director nominees who are up for election at the Annual Meeting, the Governance Committee also considered the nominee’s role in: (i) overseeing the Company’s efforts in complying with its SEC disclosure requirements; (ii) assisting in improving the Company’s internal controls and disclosure controls; (iii) assisting with the development of the strategic plan of the Company; and (iv) working with management to implement the Company’s strategic goals and plans. Directors are expected to exemplify high standards of personal and professional integrity and to constructively challenge management through their active participation and questioning. Our Bylaws and Corporate Governance Guidelines provide that a director will not be nominated for re-election after their 75th birthday.
| | | | | 16 | 2024 Proxy Statement | | | | |
In addition to fulfilling the above criteria, each nominee for election to the Board at the upcoming Annual Meeting brings a strong and unique background and set of skills to the Board, giving the Board competence and experience in a wide variety of areas, including corporate governance, senior leadership, legal, geology, accounting, finance, mining, exploration, and board service. The Governance Committee has reviewed the nominees’ overall service to the Company during their terms, including the number of meetings attended, level of participation and quality of performance. Majority Voting for Directors and Director Resignation Policy Our directors are elected by majority vote (plurality in the case of a contested election). Our Corporate Governance Guidelines include a director resignation policy. The policy provides that any director who is not elected by a majority of votes cast shall tender his or her resignation to the Governance Committee. The Governance Committee will recommend to the Board whether to accept or reject the resignation offer, or whether another action should be taken. In determining whether to recommend that the Board accept any resignation offer, the Governance Committee will consider all factors believed relevant by it. The Board will act on the Governance Committee’s recommendation within 90 days following certification of the election results. In deciding whether to accept the resignation offer, the Board will consider the factors considered by the Governance Committee and any additional information and factors that the Board finds relevant. If the Board accepts a director’s resignation offer pursuant to this process, the Governance Committee will recommend to the Board and the Board will thereafter determine whether to fill such vacancy or reduce the size of the Board. Any director who tenders their resignation pursuant to this provision will not participate in the proceedings of either the Governance Committee or the Board with respect to their own resignation offer. If a director’s resignation is not accepted by the Board, the director shall continue to serve until the next annual meeting of shareholders or until their successor is duly elected and qualified, or their earlier resignation or removal. Diversity The Company’s Corporate Governance Guidelines provide the Board should include individuals with a diverse range of experiences to give the Board depth and breadth in the mix of skills represented. The Board seeks to include diversity in professional experience, skills, industry background, race/ethnicity, national origin, and gender, as well as the ability of directors (and candidates for director) to devote sufficient time to performing their duties in an effective manner. Number of Board of Directors Our Bylaws require the Board to have not less than five nor more than nine members. The size of the Board may be increased or decreased within that range from time-to-time by resolution approved by the affirmative vote of a majority of the Board. On February 22, 2024, the Board increased the size of the Board from six members to seven members due to the addition of one new director. Board’s Role in Oversight of Strategy and Risk Management Our Board is engaged and involved in overseeing our strategy and takes an active role in risk oversight. The Governance Committee is responsible for overseeing corporate governance and ESG risks and opportunities. In addition, the HSET Committee supports the furtherance of Hecla’s commitment to adopt best practices in mining operations, promote a healthy and safe work environment and advance environmentally sound and socially responsible resource development. The Board: | • | | oversees the strategic direction of the Company, and in doing so considers the potential rewards and risks of our business opportunities and challenges and monitors the development and management of risks that impact our strategic goals; |
| • | | is responsible for risk oversight at the Company, with reviews of certain areas conducted by the relevant Board committees that regularly report to the full Board; and |
| • | | in its risk oversight role, reviews, evaluates, and discusses with appropriate members of management whether the risk management processes designed and implemented by management are adequate in identifying, assessing, managing, and mitigating material risks facing the Company, including financial, operational, social, and environmental risks. |
| | | | | | | | | 2024 Proxy Statement | 17 |
The Board believes that full and open communication between senior management and the directors is essential to effective risk oversight. Our Board Chair regularly meets with our CEO on a variety of matters, including business strategies, opportunities, key challenges, and risks facing the Company, as well as management’s risk mitigation strategies. Senior management attends all regularly scheduled Board meetings where they conduct presentations on various matters involving our operations and are available to address any questions or concerns raised by the Board on risk management-related or other matters. Following consideration of the information presented by management, the Board provides feedback and makes recommendations, as needed, which is designed to help minimize the Company’s risk exposure. To the extent any risks identified by each standing committee of the Board are material or otherwise merit discussion by the whole Board, the respective committee chair will raise such risks at the next scheduled meeting of the Board, or sooner if merited. For the foregoing reasons, we have determined that our risk oversight is appropriate in the context of our specific circumstances, risk management efforts, and the Board’s administration of its oversight function. The chart below provides an overview of the allocation of risk management responsibilities among the Board committees.
| | | | | 18 | 2024 Proxy Statement | | | | |
| | | Audit Committee | | • Reviews and discusses with management, our internal auditor and our independent registered public accounting firm, the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. | | • Oversees the effectiveness of the Company’s internal controls over financial reporting, and the Company’s compliance with legal and regulatory requirements. | | • Meets quarterly with internal auditor and independent registered public accounting firm in executive sessions without management present. | | • Discusses with the independent registered public accounting firm and internal auditor the results of their processes to assess risk in the context of their respective audit engagements. | | | | Compensation Committee | | • Assesses the Company’s compensation arrangements to determine if they create undesired or unintentional risks of a material nature. | | • Oversees, in consultation with management, the Company’s compliance with regulations governing executive and director compensation. | | • Approves compensation levels and programs for the executive officers, including the CEO. | | • Provides oversight of the Company’s culture and strategies relating to human capital management. | | | | Governance and Social Responsibility Committee | | • Oversees management of risks associated with the Company’s environmental and social policies and implementation programs. | | • Monitors ESG matters, including environmental, climate, health, safety, sustainability, social (including, but not limited to community relations, Indigenous people relations, and diversity and inclusion), and public policy trends, issues guidance, concerns and risks and other corporate responsibility matters. | | • Monitors governance structure, policies, and processes. | | • Oversees management of risks associated with the Company’s Board leadership structure and corporate governance matters. | | | | Health, Safety, Environmental and Technical Committee | | • Oversees operational and other technical risks, reserves, environmental, health and safety compliance, as well as risks relating to public policy initiatives. | | • Monitors the implementation and effectiveness of health, safety, environmental and sustainability policies, and systems. | | • Oversees strategy and efforts to protect and improve the quality of the environment, including climate change and sustainability policies and programs. | | • Monitors efforts to create a culture of continuous improvement related to health, safety, environmental and sustainability practices. |
| | | | | | | | | 2024 Proxy Statement | 19 |
The Charters for each of these committees, can be found at https://www.hecla.com, and then selecting the tab titled “Company” and then selecting “Governance & Ethics.” Succession Planning The Compensation Committee is responsible for overseeing the Company’s succession planning process for our CEO and other key senior executives, and annually reviews the Company’s succession plans for all key senior executives with input from the CEO and Senior Vice President – Chief Administrative Officer. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational experience, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board. Emergency Succession Plan | • | | Our Corporate Governance Guidelines provide that in the event of the death, resignation, removal or incapacitation of the CEO, the Board Chair will act as the CEO until a successor is duly elected. |
| • | | They also provide that in the event of the death, resignation, removal or incapacitation of our Board Chair, the CEO will act as Board Chair until a successor is duly elected. |
| • | | In the event of an unexpected executive departure, the emergency succession plan provides for a transfer of responsibilities to an individual who may or may not be permanently appointed to the new role. |
| • | | In the event of a senior executive’s departure, both internal and external candidates may be considered for permanent appointment to such role. |
Long-Term Succession Plan | • | | The long-term succession plan is intended to develop a pipeline of qualified talent for key roles. |
| • | | The planning process includes a discussion of internal succession candidates, assessment of relevant skills and planning for professional development where necessary. Multiple internal succession candidates may be identified for an individual role and provided with relevant growth opportunities. The Board gains insight through direct exposure to internal succession candidates from their presentations to the Board, work with individual directors or Board committees, and participation in Board activities. |
| • | | The Company’s short- and long-term business strategy will be considered when evaluating internal succession candidates and their skills. |
| | | | | 20 | 2024 Proxy Statement | | | | |
Committees of the Board and Committee Assignments The Board has six standing committees: Audit; Compensation; Governance; HSET; Executive; and Non-Executive Stock Award. Information regarding these committees is provided below. Except for the Executive Committee and Non-Executive Stock Award Committee, all committees are composed entirely of independent directors. The members of each committee are identified below, along with the number of meetings held in 2023. | |
| | | | | | | | | Current Committee Members | | | | Audit Committee Primary Responsibilities  assist the Board in fulfilling its oversight responsibilities;
review the integrity of our financial statements; review the independent auditor’s qualifications and independence; review the performance of our internal auditor and the independent auditor; review our compliance with laws and regulations, including disclosure controls and procedures; review financial risks; oversee the performance of the Company’s independent registered public accounting firm and internal auditor; review the qualifications and independence of the Company’s independent registered public accounting firm; and oversee the effectiveness of the Company’s internal control over financial reporting. All members of the Audit Committee are financially literate. No members on the Audit Committee serve on the audit committee of any other public companies. All members of the Audit Committee are independent. See Report of the Audit Committee on page 36 for additional information. |  | | | |  | | | Stephen F. Ralbovsky, Chair∎ | | | | Charles B. Stanley ∎ | | | | | | | | | |  | | | |  | | | | Catherine J. Boggs | | | | Alice Wong | | | | | | | | | | ∎ = Financial Expert Meetings in 2023 8 2023 Meeting Attendance 100% | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | 2024 Proxy Statement | 21 |
| | | | | | | | | Current Committee Members | | | | Compensation Committee Primary Responsibilities discharge the Board’s responsibilities relating to compensation of the Company’s executive officers; approve the design of our compensation program; approve compensation levels and programs for the executive officers, including the CEO; administer the Company’s cash-based and equity-based incentive compensation plans; and administer our stock-based plans. All members of the Compensation Committee are independent. See The Compensation Committee Process and the Role of Management and Human Resources Department on page45for more information. | | | | |  | | | Charles B. Stanley, Chair | | | | George R. Johnson | | | | | | | | | | | | | | Catherine J. Boggs | | | | | | | | | | Meetings in 2023 5 2023 Meeting Attendance 100% | | | | | | | | | |
| | | | | 22 | 2024 Proxy Statement | | | | |
| |
| | | | | | | | | Current Committee Members | | | | Governance and Social Responsibility Committee Primary Responsibilities periodically review our Corporate Governance Guidelines, Code of Conduct, and other corporate procedures to ensure compliance with laws and regulations; review any director candidates, including those nominated or recommended by shareholders; identify individuals qualified to become directors consistent with criteria approved by the Board; recommend to the Board the director nominees for the next annual meeting of shareholders, any special meeting of shareholders, or to fill any vacancy on the Board; review the appropriateness of the size of the Board relative to its various responsibilities; recommend committee assignments and committee chairs for the standing committees for consideration by the Board; recommend policies, programs, practices, metrics, performance indicators and progress concerning ESG matters to the Board; and recommend to the Board any action on ESG and related matters that may be required or considered advisable. All members of the Governance and Social Responsibility Committee are independent. See Sustainability and Corporate Governance on pages5and10for more information. | | | | | | | | Alice Wong, Chair | | | | Stephen F. Ralbovsky | | | | | | | | | | | | | | Catherine J. Boggs | | | | | | | | | | Meetings in 2023 3 2023 Meeting Attendance 100% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | 2024 Proxy Statement | 23 |
| |
| | | | | | | | | Current Committee Members | | | | Health, Safety, Environmental and Technical Committee Primary Responsibilities review operational and exploration performance; review operational, reserve, and other technical risks; review and monitor health, safety, and environmental policies; review the implementation and effectiveness of compliance systems; review the effectiveness of health, safety and environmental policies, systems, and monitoring processes; review audit results and updates from management with respect to health, safety, and environmental performance; review emerging health, safety and environmental trends in legislation and proposed regulations affecting the Company; review the technical activities of the Company; and make recommendations to the Board concerning the advisability of proceeding with the exploration, development, acquisition, or divestiture of mineral properties and/or operations. | | | | | | | | | George R. Johnson, Chair | | | | Stephen F. Ralbovsky | | | | | | | | | | | | | | | | | Charles B. Stanley | | | | Alice Wong | | | | | | | | | |  | | | | Mark P. Board | | | | | | | | | | Meetings in 2023 5 2023 Meeting Attendance 100% | | | | | | | | | | | |
| |
| | | | | | | | | Current Committee Members | | | | Executive Committee Primary Responsibilities empowered with the same authority as the Board in the management of our business, except for certain matters enumerated in our Bylaws and Delaware law, which are specifically reserved to the whole Board. |  | | | | | | | Phillips S. Baker, Jr., Chair | | | | Catherine J. Boggs | | | | | | | | | | Meetings in 2023 None 2023 Meeting Attendance N/A | | |
| | | | | 24 | 2024 Proxy Statement | | | | |
| | | | | | | | | Current Committee Members | | | | Non-Executive Stock Award Committee Primary Responsibilities empowered with the authority to make awards under the Hecla Mining Company 2010 Stock Incentive Plan to employees of the Company or any of its direct and indirect subsidiaries who are not executive officers of the Company or otherwise subject to the requirements of Section 16 of the Securities Exchange Act of 1934, as amended. | | | | Phillips S. Baker, Jr., Chair | | | | | | | | | | Meetings in 2023 None 2023 Meeting Attendance N/A | | |
| | | | | | | | | 2024 Proxy Statement | 25 |
Board and Committee Independence; Audit Committee Financial Expert Our Corporate Governance Guidelines provide that the Board will have a majority of directors who meet the criteria for independence as defined in the NYSE rules. Based on information solicited from each director, and upon the advice and recommendation of the Governance Committee, our Board annually determines the independence of each of our directors in connection with the nomination process. Further, in connection with the appointment of any new director to the Board during the year, our Board makes the same determination. In making its recommendation to the Board, the Governance Committee, with assistance from the Company’s Corporate Secretary, evaluates responses to a questionnaire completed by each director regarding relationships and possible conflicts of interest between such director, the Company, management, the independent registered public accounting firm, and the internal audit firm. In its review of director independence, the Governance Committee considers the commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the Company, management, the independent registered public accounting firm, and the internal auditor. Our Board has affirmatively determined that all current directors (other than Mr. Baker) have no material relationship with the Company and are independent according to the NYSE listing standards. The Board has determined that each member of the Audit, Compensation, and Governance Committees has no material relationship with the Company and they each satisfy the independence criteria (including the enhanced qualifications with respect to members of the Audit Committee and Compensation Committee) set forth in the applicable NYSE listing standards and SEC rules. In addition, the Board has determined that Messrs. Stephen F. Ralbovsky and Charles B. Stanley qualify as “Audit Committee Financial Experts,” as such term is defined by the rules of the SEC. Directors are expected to immediately inform the Board of any material change in their circumstances or relationships that may impact their independence. Compensation Committee Procedures The Compensation Committee has the sole authority to set compensation for our executive officers, including annual compensation amounts and Short-term Incentive Plan and Long-term Incentive Plan criteria, evaluate the performance of our executive officers, and make awards to our executive officers under our stock incentive plans. The Compensation Committee also reviews and approves any proposed plan or arrangement providing for incentive, retirement or other compensation to our executive officers and oversees our assessment of whether our compensation practices are likely to expose the Company to material risks. In addition, the Compensation Committee annually recommends to the Board the slate of officers for the Company, periodically reviews the functions of our officers, and makes recommendations to the Board concerning those functions. 2023 Board Meetings and Attendance Directors are expected to make every effort to attend the Annual Meeting, all Board meetings, and the meetings of the committees on which they serve. During 2023, there were six meetings of the Board. In 2023, each director attended 100% of the Board meetings and the committee meetings in which they are a member. All members of the Board attended last year’s Annual Meeting of Shareholders, which was held in May 2023. Director Orientation and Continuing Education New directors typically undergo a comprehensive orientation program that introduces them to the Company, including our business operations, strategy, financial position, key members of management and governance structure. Directors also are encouraged to enroll in director education programs. Directors have contact with leaders throughout the organization and visit our mine sites, where they tour the facilities and interact directly with the personnel responsible for our day-to-day operations. These activities collectively help to ensure that new directors become, and existing directors remain, knowledgeable about the most important issues affecting our Company and our business.
| | | | | 26 | 2024 Proxy Statement | | | | |
Board and Committee Self-Evaluation Process Our Board recognizes that a thorough, constructive evaluation process enhances the Board’s effectiveness and is an essential element of good corporate governance. Accordingly, every year, our Board and each committee of the Board conducts a self-evaluation of its performance and effectiveness. The Governance Committee oversees the annual self-evaluation process on behalf of the Board. The evaluations cover the following topics: | • | | Board and committee composition, including skills, background, and experience; |
| • | | review of key areas of focus for the Board and committees, and effectiveness in overseeing those responsibilities; |
| • | | satisfaction of director performance, including that of the Board Chair; |
| • | | Board and committee information needs, and quality of materials presented; |
| • | | areas where the Board should increase its focus; |
| • | | satisfaction with the Board and committee schedules, agendas, time allocated for topics and encouragement of open communication and discussion; |
| • | | access to management, experts, and internal and external resources; |
| • | | oversight of financial reporting process and internal control procedures; |
| • | | Company’s strategic direction and annual operating plan; |
| • | | selection and evaluation process of Board candidates; and |
Evaluation Process | |
| | | 
| | INFORMATION GATHERING Our self-evaluation process is conducted on an anonymous basis, using our board portal. We have found by using an anonymous evaluation process, the Board and committee members have a level of comfort in being able to critique the Board and/or the committees. | | | 
| | ANNUAL BOARD AND COMMITTEE EVALUATIONS The Board and each committee conduct annual self-evaluations through the use of electronic questionnaires in the board portal that cover the topics discussed above. | | | 
| | SUMMARY OF EVALUATIONS Hecla’s Corporate Secretary uses our board portal to generate a summarized report of our directors’ anonymous responses to the electronic questionnaires and submits the report to the appropriate chair of each committee of the Board for review before the next quarterly Board and/or committee meeting. | | | 
| | BOARD AND COMMITTEE REVIEW Using the summaries of the self-evaluations as guides, our chair of the Governance Committee reviews the results of the Board evaluation, and each committee chair reviews the results of each committee evaluation. The self-evaluations and summaries are shared and discussed with the full Board and each committee. The objective is to allow the Board and each committee to share their perspectives and consider any necessary adjustments in response to the collective feedback from the self-evaluations. |
| |
| | | | | | | | | 2024 Proxy Statement | 27 |
Shareholder Proposals for the 2025 Annual Shareholders’ Meeting Our Bylaws establish procedures governing the nomination and eligibility of nominees for election to our Board, and the proposal of business to be considered by our shareholders at an annual meeting of shareholders. For nominations or other business to be properly brought before an annual meeting of shareholders by a shareholder, the shareholder must have given timely notice thereof in writing to our Corporate Secretary. To be timely, a shareholder’s notice must be delivered to our: Corporate Secretary 6500 N. Mineral Drive, Suite 200 Coeur d’Alene, Idaho 83815-9408 | • | Ø | not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of shareholders; provided, however, that in the event the date of the annual meeting of shareholders is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be delivered not earlier than the 120th day prior to such annual meeting of shareholders and not later than the close of business on the later of the 90th day prior to such annual meeting of shareholders or the 10th day following the day on which public announcement of the date of such meeting is first made. Adjournment of a meeting shall not commence a new time period for giving shareholder’s notice as described above. Such shareholder’s notice must include the information specified in our Bylaws. |
| • | Ø | the deadline for providing notice to the Company under Rule 14a-19, the SEC’s universal proxy rule, of a shareholder’s intent to solicit proxies in support of nominees submitted under the Company’s advance notice Bylaws is March 27, 2024.18, 2025. |
| • | Ø | the applicable time period for timely shareholder submissions pursuant to the above provisions for the 20242025 Annual Meeting of Shareholders is January 24, 202417, 2025 (the 120th day preceding the anniversary of the 20232024 Annual Meeting) to February 23, 202416, 2025 (the 90th day preceding such anniversary). |
The Board Chair of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in the Bylaws and, if any proposed nomination or business is not in compliance with the Bylaws, to declare that such defective proposal shall be disregarded. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority. 2023 Proxy Statement 23
PROPOSAL 1 ELECTION OF CLASS I DIRECTORSElection Of Class II Directors
In accordance with our Restated Certificate of Incorporation, the Board is divided into three classes. The terms of office of the directors in each class expire at separate times. There are twothree Class III directors whose terms will expire at the Annual Meeting: Phillips S. Baker, Jr.Stephen F. Ralbovsky, Catherine J. Boggs, and George R. Johnson.Mark P. Board. TheAt a meeting held by the Governance Committee in February 2024, the committee determined that each ofthe directors whose terms are expiring – Mr. BakerRalbovsky, Ms. Boggs, and Mr. Johnson areBoard – were qualified candidates to stand for electionre-election at the Annual Meeting, and the Board designated themeach as nominees for electionre-election as directors of the Company, each for a three-year termsterm expiring in 2026.2027.
At the same February 2024 meeting, the size of the Board was increased from six persons to seven persons, and upon the recommendation of the Governance Committee, the Board appointed Mark P. Board as a Class II director (standing for election in 2024). Mr. Board is a mining and geotechnical engineer with over 45 years of mining experience. He is currently President of M Board Mining Consulting, LLC and provides engineering consulting services to the international mining industry. Until retirement in 2020, he was Vice President – Technical Services for Hecla Limited, a subsidiary of the Company. Prior to that, he acted as a consulting engineer for Itasca Consulting Group where he provided mine evaluation, mine design and stability assessments for underground and open pit mines worldwide. The Governance Committee and Board determined that Mr. Board was independent under the NYSE listing standards. The Board appointed Mr. Board to serve on the HSET Committee. It is intended that the proxies solicited hereby from our shareholders that do not provide voting instructions will be voted FOR the election of Phillips S. Baker, Jr.Stephen F. Ralbovsky, Catherine J. Boggs, and George R. Johnson.Mark P. Board. If Mr. BakerRalbovsky, Ms. Boggs, or Mr. Johnson becomeBoard becomes unable or is unwilling to accept election, the Board will either reduce the number of directors to be elected or select substitute nominees submitted by the Governance Committee. If substitute nominees are selected, proxies that do not provide voting instructions will be voted in favor of such nominees. Biographical Information Set forth below is biographical information for the director nominees, including the key qualifications, experience, attributes, and skills that led our Board to the conclusion that such nominees should serve as a director. There are no family relationships among any of our directors or executive officers. Our Board includes individuals with strong backgrounds in senior leadership and management, legal, geology, accounting, finance, and company and industry knowledge, and we believe that, as a group, they work effectively together in overseeing our business. 24 www.hecla.com
Proposal 1 — Election of Class I Directors
| | | | | | | | | 2024 Proxy Statement | 29 |
Current Class III Nominees for Election to the Board – Terms Ending at the 20232024 Annual Meeting If elected, the nominees will serve for a three-year term ending in 2026.2027. The nominees are as follows: | | | | | | |
 | | | Phillips S. Baker, Jr. | | President and Chief Executive Officer | | | Age: 63
Director since: 2001
Other Directorships: None
| | Hecla Committees:
• Executive (Chair)
• Non-Executive Stock Award Committee
| Mr. Baker has been our Chief Executive Officer since May 2003 and has served as our President and as a member of the Board of Directors since November 2001. Mr. Baker served as Chairman of the Board for the National Mining Association from October 2017 to October 2020 and has been a Board member since September 2010. He served as a Director of QEP Resources, Inc. from May 2010 to March 2021.
| Board Qualification and Skills: Mr. Baker began his career in the mining industry in 1986 and has been an officer or director of many public companies since 1990. He has substantial financial experience gained in his roles of President, Chief Executive Officer, and previously as Chief Financial Officer of the Company. He has served as Hecla’s President for 21 years, and as Chief Executive Officer for 20 years and has 26 years of executive and management experience in the mining industry. In addition to serving on the Board of Hecla, he served on the Board of QEP Resources, Inc., for 10 years, as well as serving as the chair of the audit committee and as a member of the governance committee.
|
| | | | |
| | George R. Johnson | | Former Senior Vice President of Operations with B2Gold Corporation | | Age: 74
Director since: 2016
Other Directorships: B2Gold Corporation
| | Hecla Committees:
• Health, Safety, Environmental and Technical (Chair)
• Audit
• Compensation
| Mr. Johnson served as Senior Vice President of Operations of B2Gold Corporation from August 2009 until his retirement in April 2015. He has served on the Board of Directors of B2Gold Corporation since March 2016.
| Board Qualification and Skills: Mr. Johnson has over 45 years of foreign and domestic experience in underground and open pit mine construction and operations management as a mining engineer.
|
Required Vote
Pursuant to our Bylaws, each director will be elected by the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What Votes are Required for the Proposals on page 88.
You may vote “FOR,” “AGAINST,” OR “ABSTAIN” on the nominees for election as directors.
| | | | | |  | | The Board recommends that shareholders vote “FOR” the election of Phillips S. Baker, Jr. and George R. Johnson.
| | | |
2023 Proxy Statement 25
Proposal 1 — Election of Class I Directors
Our directors whose terms are not expiring this year follow. They will continue to serve as directors for the remainder of their terms or until their respective successors are appointed or elected.
Continuing Class II Members of the Board – Terms Ending at the 2024 Annual Meeting
| | | | | 
| | Stephen F. Ralbovsky | | Founder and Principal of Wolf Sky Consulting LLC | | Age: 69
Director since: 2016
Other Directorships: None
| | Hecla Committees:
• Audit (Chair)
• Governance and Social Responsibility
• Health, Safety, Environmental and Technical
| Mr. Ralbovsky has been the Founder and Principal of Wolf Sky Consulting LLC since June 2014. Prior to that, he was a partner with PricewaterhouseCoopers LLP from February 1987 until his retirement in June 2014, where he concentrated his practice on public companies operating in the mining industry. He is a part-time Professor of Practice at the University of Arizona’s James E. Rogers College of Law. Mr. Ralbovsky is also a member of several organizations, including the Association of International Certified Professional Accountants, Arizona Society of CPAs, National Mining Association, and Society for Mining, Metallurgy and Exploration. | Board Qualification and Skills:Skills Mr. Ralbovsky is a CPA and has over 40 years’ experience in taxation, auditing, and accounting, where he was specifically heavily involved in the mining industry with an emphasis in global mining tax and royalty policy. He has held leadership positions, including U.S. Mining Leader, U.S. Mining Tax Leader, Global Mining Tax Leader, and Tax Partner while employed with PricewaterhouseCoopers LLP. Hecla Committees Audit (Chair) Governance and Social Responsibility Health, Safety, Environmental and Technical | Age 70 Director since 2016 Other Directorships: None | | | | |
| |
| | | | | | | 
 | | | | | | Catherine “Cassie” J. Boggs | | Former General Counsel at Resource Capital Funds | | Age: 68
Director since: 2017
Board Chair since: 2022
Other Directorships: Capital Limited
| | Hecla Committees:
• Governance and Social Responsibility
• Audit
• Compensation
• Executive
| Ms. Boggs served as the General Counsel at Resource Capital Funds from January 2011 until her retirement in February 2019. Since 2019, she has been serving as an Intermittent Expert in mining with the US Department of Commerce’s Commercial Law Development Program. She was a board member of Funzeleo from January 2016 to September 2021, as well as serving as President of the Foundation for Natural Resources and Energy Law (formerly known as the Rocky Mountain Mineral Law Foundation) from July 2012 to July 2013. She briefly servedserving on the board of USU.S. Energy Corp. from June 2019 to December 2019. She has also served as a board member of Capital Limited (a global drilling company, listed on the London Stock Exchange) since September 2021, and is an Adjunct Professor at the University of Denver, Sturm College of Law. | Board Qualification and Skills:Skills Ms. Boggs has over 3940+ years’ experience as an attorney in the mining and natural resources sectors, in both domestic and international mining. She has extensive experience in leadership in the mining industry, having worked for Barrick Gold Company, serving in a variety of leadership roles, including serving as the CEOChief Executive Officer of Tethyan Copper Company, interim President of the African Business Unit, and as interim General Counsel of African Barrick Gold. She also has experience in due diligence, country and political risk assessments, and the structuring and implementation of risk mitigation strategies. Hecla Committees Governance and Social Responsibility Audit Compensation Executive | Age 69 Director since 2017 Other Directorships: Capital Limited | | | | |
26 www.hecla.com
| | | | | 30 | 2024 Proxy Statement | | | | |
Proposal 1 — Election of Class III Directors | | | | | | |  | | | | | | Mark P. Board President of M Board Mining Consulting, LLC Mr. Board has been President of M Board Mining Consulting, LLC since 2020, where he provides engineering consulting services to the international mining industry. He served as Vice President – Innovation and Technical Services for Hecla Limited, a subsidiary of the Company, from June 2014 until his retirement in June 2020. Prior to that, he acted as a consulting engineer for Itasca Consulting Group where he provided mine evaluation, mine design and stability assessments for underground and open pit mines worldwide. Board Qualification and Skills Mr. Board has over 45 years of experience as a mining and geotechnical engineer. His particular specialty is design of deep underground mines and caving operations. He holds a PhD in Geological Engineering from the University of Minnesota and is an elected Member of the US National Academy of Engineering. Hecla Committees Health, Safety, Environmental and Technical | Age 71 Director since 2024 Other Directorships: None | | | | |
Required Vote Pursuant to our Bylaws, each director will be elected by the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What Votes are Required for the Proposals on page 95. You may vote “FOR,” “AGAINST,” OR “ABSTAIN” on the nominees for election as directors. | | | | | | |  | |  | | | | The Board recommends that shareholders vote “FOR” the election of Stephen F. Ralbovsky, Catherine J. Boggs, and Mark P. Board. |
Our directors whose terms are not expiring this year follow. They will continue to serve as directors for the remainder of their terms or until their respective successors are appointed or elected.
| | | | | | | | | 2024 Proxy Statement | 31 |
Continuing Class III Members of the Board – TermsTerm Ending at the 2025 Annual Meeting | | | | | | |
 | | | | | | Charles B. Stanley | | Managing Member of Cutthroat Energy, LLC | | Age: 64
Director since: 2007
Other Directorships: None
| | Hecla Committees:
• Compensation (Chair)
• Health, Safety, Environmental and Technical
| Mr. Stanley has been the Managing Member of Cutthroat Energy, LLC a private oil, and gas producer, since May 2019. Prior to that, Mr. Stanley served as Chief Executive Officer and President of QEP Resources, Inc., from May 2010 until his retirement in January 2019. He was also ChairmanChair of the Board of QEP Resources, Inc. from May 2012 until his retirement in January 2019. | Board Qualification and Skills:Skills Mr. Stanley has over 4041 years’ experience in the international and domestic upstream and midstream oil and gas industry. He is a geologist with an extensive background in natural resources. He gained his extensive financial experience from a lengthy career with QEP Resources, Inc., and prior companies. In addition to his former position at QEP Resources, Inc., Mr. Stanley served in numerous other senior leadership positions, including Chief Executive Officer and President of QEP Midstream Partners, LP, and Chief Operating Officer of Questar Corporation. He served on the board of QEP Resources, Inc., for eight8 years and as ChairmanChair of the Board from 2012 until his retirement in 2019. Prior to serving on QEP’s board, Mr. Stanley served on the board of Questar Corporation for eight8 years and has served on the boards of various oil and gas industry trade organizations. Hecla Committees Compensation (Chair) Audit Health, Safety, Environmental and Technical | Age 65 Director since 2007 Other Directorships: None | | | | |
| |
| | | | | | |
 | | | | | | Alice Wong, ICD.D | | Senior Vice President and Chief Corporate Officer Cameco Corporation | | Age: 63
Director since: 2021
Other Directorships: SaskEnergy Incorporated
| | Hecla Committees:
• Governance and Social Responsibility (Chair)
• Audit
• Health, Safety, Environmental and Technical
| Ms. Wong has served as Senior Vice President and Chief Corporate Officer of Cameco Corporation since 2011. She was Cameco’s Vice President of Safety, Health, Environment, Quality and Regulatory Relations from 2008 to 2011, and Vice President of Investor, Corporate and Government Relations from 2005 to 2008. She has been a board member of the following organizations: SaskEnergy Incorporated since 2016, Mining Association of Canada since 2016, Canadian Nuclear Association since 2013, and Saskatchewan Mining Association since 2013. She served on the Board of Sask Energy Corporation from 2016 to 2023. In 2021, Ms. Wong was named a Catalyst Honours Champion in recognition of her significant contributions to advancing women and championing inclusion in the workplace and being a role model for inclusive leadership in corporate Canada. | Board Qualification and Skills:Skills Ms. Wong has been with Cameco for more than 3531 years in increasingly senior leadership roles and has gained a wealth of experience from her diverse responsibilities. In her current role as Senior Vice President and Chief Corporate Officer, she provides executive oversight for human resources, safety, health, environment, quality, regulatory relations, business technology services, supply chain management, internal audit, and corporate ethics. She also has experience in digital transformation as well as oversight of IT and cyber risk management. She obtained her Corporate Directors Designation (ICD.D) from the Institute of Corporate Directors.ICD Rotman Director’s Education Program. Hecla Committees Governance and Social Responsibility (Chair) Audit Health, Safety, Environmental and Technical | Age 64 Director since 2021 Other Directorships: None | | | | |
2023 Proxy Statement 27
COMPENSATION OF NON-MANAGEMENT DIRECTORS
| | | | | 32 | 2024 Proxy Statement | | | | |
Continuing Class I Members of the Board – Term Ending at the 2026 Annual Meeting | | | | | | |  | | | | | | Phillips S. Baker, Jr. President and CEO Mr. Baker has been our CEO since May 2003 and has served as our President and as a member of the Board of Directors since November 2001. He was elected the Chair of The Silver Institute in August 2023. Mr. Baker served as Chair of the Board for the National Mining Association from 2017 to 2020 and has been a Board member since September 2010. He served as a Director of QEP Resources, Inc. from May 2010 to March 2021. Board Qualification and Skills Mr. Baker began his career in the mining industry in 1986 and has been an officer or director of many public companies since 1990. He has substantial financial experience gained in his roles of President, CEO, and previously as Chief Financial Officer of the Company. He has served as Hecla’s President for 22 years and as CEO for 21 years and has 27 years of executive and management experience in the mining industry. In addition to serving on the Board of Hecla, he served on the Board of QEP Resources, Inc. for 10 years, as well as serving as the chair of the audit committee and as a member of the governance committee. Hecla Committees Executive (Chair) Non-Executive Stock Award Committee | Age 64 Director since 2001 Other Directorships: None | | | | |
| |
| | | | | | |  | | | | | | George R. Johnson Former Senior Vice President of Operations with B2Gold Corporation Mr. Johnson served as Senior Vice President of Operations of B2Gold Corporation from August 2009 until his retirement in April 2015. He has served on the Board of Directors of B2Gold Corporation since March 2016. Board Qualification and Skills Mr. Johnson has over 45 years of foreign and domestic experience in underground and open pit mine construction and operations management as a mining engineer. Hecla Committees Health, Safety, Environmental and Technical (Chair) Compensation | Age 75 Director since 2016 Other Directorships: B2Gold Corporation | | | | |
Compensation of Non-Management Directors The Compensation Committee (“committee”)(committee) of the Board is responsible for recommending to the independent members of the Board the form and amount of compensation for our non-management directors. The independent members of the Board consider the committee’s recommendation and make the final determination of non-management director compensation. Compensation for non-management directors is designed to reflect current market trends and developments with respect to compensation of Board members. It consists of a combination of cash retainers and an equity award. Compensation Consultant and Peer Group Benchmarking In 2022,2023, the committee did not retain an independent compensation consultant to review director compensation. In 2022,2023, the Company’s human resources department analyzed our non-management director compensation against our peer group. The human resources department recommended no changes to the non-management director compensation, other than the Board Chair, based on its analysis as follows: (i) the annual cash retainer be increased from $98,000 to $105,000, (ii) the annual equity award be increased from $120,000 to $125,000, (iii) the cash retainer for chairing a committee (Audit, Compensation, and Health, Safety, Environment and Technical) be increased from $12,000 to $15,000, (iv) the cash retainer for chairing the Governance Committee be increased from $8,000 to $15,000. The changes to the non-management director compensation were made effective July 1, 2022. The human resources department also recommended that the Board Chair’s annual retainer be increased from $120,000 to $180,000, and the equity award increased from $120,000 to $125,000. The committee recommended and the Board approved the changes.compensation. Components of Non-Management Director Compensation | Compensation Element | | Current
Value | | | Current Value | | Annual Board Retainer | | $ | 105,000 | | Annual Board Retainer | | Annual Board Retainer | | Annual Board Retainer | | Annual Board Retainer | | | Annual Board Chair Retainer | | Annual Board Chair Retainer | | Annual Board Chair Retainer | | Annual Board Chair Retainer | | Annual Board Chair Retainer | | $ | 180,000 | | | Annual Committee Chair Retainer for: | | | Annual Committee Chair Retainer for: | | Annual Committee Chair Retainer for: | | Annual Committee Chair Retainer for: | | Annual Committee Chair Retainer for: | | | | | | • Health, Safety, Environmental & Technical Committee | | • Health, Safety, Environmental & Technical Committee | | • Health, Safety, Environmental & Technical Committee | | • Health, Safety, Environmental & Technical Committee | | • Health, Safety, Environmental & Technical Committee | | $ | 15,000 | | | • Audit Committee | | $ | 15,000 | | • Audit Committee | | • Audit Committee | | • Audit Committee | | • Audit Committee | | | • Compensation Committee | | • Compensation Committee | | • Compensation Committee | | • Compensation Committee | | • Compensation Committee | | $ | 15,000 | | | • Governance Committee | | $ | 15,000 | | • Governance Committee | | • Governance Committee | | • Governance Committee | | • Governance Committee | | | • Executive Committee | | • Executive Committee | | • Executive Committee | | • Executive Committee | | • Executive Committee | | $ | — | | | • Non-Executive Stock Award Committee | | $ | — | | • Non-Executive Stock Award Committee | | • Non-Executive Stock Award Committee | | • Non-Executive Stock Award Committee | | • Non-Executive Stock Award Committee | | | Annual Equity | | $ | 125,000 | | Annual Equity Grant (dollar equivalent) | | Annual Equity Grant (dollar equivalent) | | Annual Equity Grant (dollar equivalent) | | Annual Equity Grant (dollar equivalent) | | Annual Equity Grant (dollar equivalent) | |
Annual cash retainers are paid in quarterly installments. Other than annual cash retainers and equity, no other attendance fees are paid to the non-management directors. Equity Compensation We maintain the Hecla Mining Company Stock Plan for Nonemployee Directors (“Director(Director Stock Plan”Plan or “plan”)plan). The plan is currently scheduled to terminate on May 15, 2027 and is subject to termination by the Board at any time. Pursuant to the plan, before September 30 of each year, each non-management director is credited with a number of shares determined by dividing the annual equity retainer payable to each non-management director for service on the Board for the following year by the average closing price for Hecla’s common stock on the NYSE for the prior calendar year (the “Stock Retainer”)Stock Retainer). A minimum of 25% of the annual Stock Retainer under the Director Stock Plan is contributed to a grantor trust established by the Company. Each director may elect, prior to the first day of the applicable year, to have a greater percentage contributed to the grantor trust for that year. The remaining portion of the Stock Retainer will be transferred to the non-management director as soon as practicable. Non-management directors joining the Board after September 30 of any year will be credited with a pro rata grant of shares when they join the Board. 28 www.hecla.com
Compensation of Non-Management Directors
The shares held in the grantor trust are subject to the claims of our creditors until delivered under the terms of the Director Stock Plan. Delivery of the shares from the trust occurs upon the earliest of: (i) death or disability; (ii) retirement from the Board; (iii) a cessation of the director’s service for any other reason; (iv) a change in control of the Company (as defined in the Director Stock Plan); or (v) a time
| | | | | 34 | 2024 Proxy Statement | | | | |
elected by the director, except shares must be held in the trust for at least two years prior to delivery. As of December 31, 2022,2023, there were 2,170,9592,165,894 shares remaining available for issuance under the Director Stock Plan. The following chart summarizes the annual cash and equity compensation for our non-management directors during 2022.2023. Non-Management Director Compensation for 20222023 | Director | | Fees Earned or
Paid in Cash
($) | | Stock
Awards(1)
($) | | | All Other
Compensation(2)
($) | | Total
($) | | | Fees Earned or
Paid in Cash
($) | | Stock
Awards(1)
($) | | All Other
Compensation
($) | | Total ($) | | Catherine J. Boggs, Board Chair | | | 143,000 | | | | 83,367 | | | | — | | | | 226,367 | | Catherine J. Boggs, Board Chair | | Catherine J. Boggs, Board Chair | | Catherine J. Boggs, Board Chair | | Catherine J. Boggs, Board Chair | | | George R. Johnson | | George R. Johnson | | George R. Johnson | | George R. Johnson | | George R. Johnson | | | 115,000 | | | | 83,367 | | | | 7,500 | | | | 205,867 | | | Stephen F. Ralbovsky | | | 115,000 | | | | 83,367 | | | | — | | | | 198,367 | | Stephen F. Ralbovsky | | Stephen F. Ralbovsky | | Stephen F. Ralbovsky | | Stephen F. Ralbovsky | | | Charles B. Stanley | | Charles B. Stanley | | Charles B. Stanley | | Charles B. Stanley | | Charles B. Stanley | | | 109,000 | | | | 83,367 | | | | — | | | | 192,367 | | | Alice Wong | | | 109,000 | | | | 83,367 | | | | — | | | | 192,367 | | | Ted Crumley | | | 109,000 | (3) | | | — | | | | 90,000 | (4) | | | 199,000 | | | Terry V. Rogers | | | 55,000 | (3) | | | — | | | | 78,750 | (4) | | | 133,750 | | Alice Wong | | Alice Wong | | Alice Wong | | Alice Wong | |
| (1) | The amounts shown in this column represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board ASC Topic 718. For a description of the assumptions used in valuing the awards please see Note 12 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. The stock awards column represents the aggregate grant date fair value of the stock granted to each non-management director under the Director Stock Plan in 20222023 as computed in accordance with ASC Topic 718. For each director, the number of common shares granted was determined by dividing $125,000 by the average closing price for Hecla’s common stock on the NYSE for the prior calendar year ($6.3576)4.9975) ($125,000 ÷ $6.3576$4.9975 = 19,662)25,013). On June 28, 2022,July 13, 2023, each non-management director received 19,66225,013 shares of our common stock under the terms of the Director Stock Plan. Based on our closing stock price on the NYSE on the date of grant of June 28, 2022July 13, 2023 ($4.24)5.94), the grant date fair value for each grant of 19,66225,013 shares was $83,367.$148,577. (This amount does not reflect the actual amount that may be realized by each director). |
| (2) | IncludesThe Company made a matching contribution under its charitable matching gift program on the following:
|
| | | | | | | | | | | | | NEO | | Matching
Contribution under
Charitable Matching
Gift Program
($) | | | Consulting Fee
($) | | | Total
($) | | | | | | Crumley | | | — | | | | 90,000 | | | | 90,000 | | | | | | Johnson | | | 7,500 | | | | — | | | | 7,500 | | | | | | Rogers | | | 3,750 | | | | 75,000 | | | | 78,750 | |
(3) | Messrs. Crumley and Rogers retired from the Board in May 2022. They received no additional non-management director compensation after their retirement date.
|
(4) | After their retirement from the Board in May 2022, Messrs. Crumley and Rogers each entered into a consulting agreement with the Company to act as independent contractors for the Board.behalf of Mr. Crumley’s consulting fee is $180,000, to be paid in equal quarterly installments from July 2022 to May 2023. Mr. Roger’s consulting fee is $150,000, to be paid in equal quarterly installments from July 2022 to May 2023.Johnson.
|
Other The Company covers directors under its overall director and officer liability insurance policies, as well as reimbursing them for travel, lodging, and meal expenses incurred in connection with their attendance at Board and committee meetings, meetings of shareholders, and for traveling to visit our operations. Directors are eligible, on the same basis as Company employees, to participate in the Company’s matching gift program, pursuant to which the Hecla Charitable Foundation matches contributions made to qualifying nonprofit organizations. Beyond these items, no other compensation was paid to any non-management director. 2023 Proxy Statement 29
Compensation of Non-Management Directors
Non-Management Director Stock Ownership Guidelines To more closely align the Company’s independent directors’ financial interests with those of our shareholders, in June 2012, the committee and Board adopted stock ownership guidelines for our independent directors. Under these guidelines, each independent director is required to own shares of common stock (which includes shares held under the Hecla Mining Company Stock Plan for Nonemployee Directors) valued at three times their annual cash retainer within five years of their appointment to the Board. In the event an independent director’s cash retainer increases, they will have three years from the date of the increase to acquire any additional shares needed to meet these guidelines. Because of fluctuations in the Company’s stock price, in February 2016, the committee and the Board amended the stock ownership guidelines to provide a valuation methodology that consists of valuing the shares held by using the average closing price of the Company’s common stock on the NYSE for the previous calendar year. Because share prices of all companies are subject to market volatility, the Board believes that it would be unfair to require a director to buy more shares simply because Hecla’s stock price drops. In the event there is a significant decline in Hecla’s stock price that causes a director’s holdings to fall below the applicable threshold, the director will not be required to purchase additional shares to meet the threshold, but they generally may not sell or transfer any shares until the threshold has again been achieved. All As of December 31, 2023, all non-management directors metmeet the guidelines except for Ms. Wong, who has until February 2026(Mr. Board is not yet required to satisfymeet the requirements of the ownership guidelines.minimum share holdings).
Additional information regarding shares held by the non-management directors is included in the Security Ownership of Certain Beneficial Owners and Management table on page 82.88. 30 www.hecla.com
PROPOSAL 2 RATIFY THE APPOINTMENT OFRatify The Appointment Of BDO USA, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023P.C. As Our Independent
Registered Public Accounting Firm For 2024 The Audit Committee is solely responsible for the appointment, compensation, retention, evaluation, and termination, if necessary, of the independent registered public accounting firm retained to audit our financial statements. The Audit Committee appointed BDO USA, LLP (“BDO”)P.C. (BDO) as the independent registered public accounting firm for Hecla for the calendar year ending December 31, 2023.2024. BDO has been retained in that capacity since 2001. The Audit Committee is aware that some may believe a long-tenured auditor may be believed by some to poseposes an independence risk. To address these concerns, the Audit Committee: | • | | reviews all non-audit services and engagements provided by BDO, specifically with regard to the impact on the firm’s independence; |
conducts a quarterly assessment of BDO’s service quality, and its working relationship with our management;
| • | | conducts a quarterly assessment of BDO’s service quality, and its working relationship with our management; |
conducts regular private meetings separately with each of BDO and our management;
| • | | conducts regular private meetings separately with each of BDO and our management; |
interviews and approves the selection of BDO’s new lead engagement partner with each rotation;
| • | | interviews and approves the selection of BDO’s new lead engagement partner with each rotation; |
at least annually, obtains and reviews a report from BDO, describing all relationships between the independent auditor and Hecla; and
| • | | at least annually, obtains and reviews a report from BDO, describing all relationships between the independent auditor and Hecla; and |
reviews data relating to audit quality and performance, including the most recent Public Company Accounting Oversight Board (“PCAOB”) reports on BDO and its peer firms.
| • | | reviews data relating to audit quality and performance, including the most recent Public Company Accounting Oversight Board (PCAOB) reports on BDO and its peer firms. |
The members of the Audit Committee believe that the continued retention of BDO to serve as our independent registered public accounting firm is in the best interests of Hecla and our shareholders. Although ratification is not required, the Board and the Audit Committee are submitting the appointment of BDO to our shareholders for ratification because we value our shareholders’ views on our independent registered public accounting firm, and as a matter of good governance practice. In the event our shareholders fail to ratify the appointment, it will be considered as a direction to the Board and to the Audit Committee to consider the appointment of a different firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such change would be in the best interest of the Company and its shareholders. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make statements and respond to appropriate questions from shareholders present at the meeting. Required Vote Under the Sarbanes-Oxley Act of 2002, the Audit Committee has the sole authority to appoint the independent registered public accounting firm for the Company. However, the Board feels that it is important for the shareholders to ratify the selection of BDO USA, LLP.P.C. This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What Votes are Required for the Proposals on page 88.95. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to ratify the appointment of BDO USA, LLPP.C. as our independent registered public accounting firm for 2023.2024. | | | | | | | | | | | | | | | | The Audit Committee and Board recommend shareholders vote “FOR”“FOR” ratifying the appointment of BDO USA, LLPP.C. as our independent registered public accounting firm for 2023.2024. |
| | | | | 36 | 2024 Proxy Statement | | | | |
2023 Proxy Statement 31
Proposal 2 — Ratify the Appointment of BDO USA, LLP as Our Independent Registered Public Accounting Firm for 2023
Pre-Approval Process The Audit Committee is responsible for reviewing and, if appropriate, pre-approving all audit, audit-related and non-audit services to be performed by our independent registered public accounting firm. The Audit Committee charter authorizes the Audit Committee to establish a policy and related procedures regarding the pre-approval of audit, audit-related and non-audit services to be performed by our independent registered public accounting firm. The Audit Committee has delegated its pre-approval authority to the Chair of the Audit Committee, who is authorized to pre-approve services to be performed by our independent registered public accounting firm and the compensation to be paid for such services until the next regularly-scheduled meeting of the Audit Committee, provided that in such case, the Chair shall provide a report to the Audit Committee at its next regularly scheduled meeting of any services and compensation approved by the Chair pursuant to the delegated authority. On a periodic basis, management reports to the Audit Committee the actual spending for projects and services compared to the approved amounts. All audit-related services performed by our independent registered public accounting firm in the calendar year ended December 31, 2023, were approved by the Audit Committee. Audit and Non-Audit Fees The following table presents fees for professional audit services rendered by BDO for the audit of our annual financial statements for the calendar years ended December 31, 20222023 and 2021,2022, and fees for other services rendered by BDO during those periods. | | | | 2022 | | | 2021 | | | | | 2023 | | 2022 | Audit Fees(1) | | $ | 1,135,250 | | | $ | 975,800 | | | Audit Related Fees(2) | | $ | 98,000 | | | $ | 93,000 | | | Tax Fees | | | — | | | | — | | | All Other Fees | | | — | | | | — | | | | | | | | | All Other Fees | | All Other Fees | | All Other Fees | | All Other Fees | | | Total | | $ | 1,233,250 | | | $ | 1,068,800 | | | | | | | | | Total | | Total | | Total | | Total | | | | $ | 1,385,600 | | | | $ | 1,233,250 | |
| (1) | Relates to services rendered in connection with the annual audit of our consolidated financial statements, quarterly reviews of financial statements included in our quarterly reports on Form 10-Q, and fees related to the review of registration statements and prospectuses filed with the SEC. |
| (2) | Consists of fees for employee benefit plans financial statement audits. |
Report of the Audit Committee The Audit Committee acts under a written charter. You may obtain a copy of the charter in the “Company” section of https://www.hecla.com under “Governance and& Ethics.” In the performance of its oversight responsibilities, the Audit Committee (1) reviewed and discussed with management and the independent registered public accounting firm the Company’s audited financial statements for the calendar year ended December 31, 2022;2023; (2) discussed with the Company’s independent registered public accounting firmBDO the matters required to be discussed by the applicable requirements of the PCAOB and SEC; (3) received the written disclosures and the letter from the Company’s independent registered public accounting firmBDO required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee regarding independence; and (4) discussed with the Company’s independent registered public accounting firmBDO any relationships that may impact its objectivity and independence and satisfied itself as to the firm’s independence. During 2022,2023, the Audit Committee worked with management, our internal auditor, and our independent auditorBDO to address Sarbanes-Oxley Section 404 internal control requirements. The Audit Committee met fiveeight times in 2022.2023. Company management is responsible for the assessment and determination of risks associated with the Company’s business, financial reporting, operations, and contractual obligations. The Audit Committee, together with the Board of Directors, is responsible for oversight of the Company’s management of risks. As part of its responsibilities for oversight of the Company’s management of risks, the Audit Committee has reviewed and discussed the Company’s enterprise-wide risk assessment, and the Company’s policies with respect to risk assessment and risk management, including discussions of individual risk areas as well as an annual summary of the overall process. 32 www.hecla.com
Proposal 2 — Ratify the Appointment of BDO USA, LLP as Our Independent Registered Public Accounting Firm for 2023
| | | | | | | | | 2024 Proxy Statement | 37 |
The Audit Committee has discussed with both Hecla’s internal auditor and independent registered public accounting firmBDO the overall scope of the plans for their respective audits. The Audit Committee regularly meets with a representative of the firm hired to serve as Hecla’s internal auditor and representatives of the independent registered public accounting firm,BDO, in regular and executive sessions, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of Hecla’s financial reporting and compliance programs. Management is responsible for the Company’s financial reporting process, including establishing and maintaining adequate internal control over financial reporting and the preparation of the Company’s financial statements. The Company’s independent registered public accounting firmBDO is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles. The Company’s independent registered public accounting firmBDO is also is responsible for performing an independent audit of the effectiveness of the Company’s internal controls over financial reporting and issuing a report thereon. The Audit Committee relies, without independent verification, on the information provided to it and on the representations made by management and the Company’s independent registered public accounting firm.BDO. Based on the review and discussion and the representations made by management and the Company’s independent registered public accounting firm,BDO, the Audit Committee recommended to the Board that the audited consolidated financial statements for the calendar year ended December 31, 2022,2023, be included in the Company’s Annual Report on Form 10-K for the calendar year ended December 31, 2022,2023, and filed with the SEC. The material contained in this Audit Committee Report does not constitute soliciting material, is not deemed filed with the SEC, and is not incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (“Exchange Act”)(Exchange Act), whether made on, before, or after the date of this Proxy Statement and irrespective of any general incorporation language in such filing, except to the extent that the Company specifically incorporates this Audit Committee Report by reference therein. Respectfully submitted by The Audit Committee of the Board of Directors Stephen F. Ralbovsky, Chair Catherine J. Boggs George R. JohnsonCharles B. Stanley
Alice Wong 2023 Proxy Statement 33
PROPOSAL 3 APPROVAL, ON AN ADVISORY BASIS, OF OUR NAMED EXECUTIVE OFFICER COMPENSATION Approval, On An Advisory Basis, Of Our Named
Executive Officer Compensation | |
Our Board seeks your vote to approve, on an advisory basis, the compensation paid to our named executive officers (“NEOs”)(NEOs) for 20222023 as set forth under the heading Compensation Discussion and Analysis (“CD&A”)(CD&A) on page 36 and in the accompanying compensation tables starting on page 61,40, and related material. The Board believes that our current executive compensation program is right for the Company and our shareholders. Our executive compensation program is designed to attract, retain, and motivate talented individuals who possess the executive experience and the leadership skills needed by the Company to maintain and increase shareholder value. We seek to provide executive compensation that is competitive with that provided by companies in our peer group within the mining industry. We also seek to provide both short- and long-term financial incentives to our executives that reward them for superior performance, and achieving financial results and strategic objectives that are expected to contribute to increased long-term shareholder value. Underlying these incentives is a strong philosophy of “pay-for-performance” that forms the foundation of decisions regarding the compensation of our NEOs. This compensation philosophy, which has been consistent over many years, is designed to align the interests of our NEOs with the interests of our shareholders and is central to our ability to attract, retain and motivate executive leaders to guide the Company through market challenges over the long term. The primary methods we use to align the interests of our NEOs with our shareholders include: ✓• | | placing a vast majority (80.7%) of the CEO’s total compensation at-risk; |
✓• | | targeting total direct compensation of our NEOs at approximately the 50th percentile of peer compensation; |
✓• | | striking the right balance between short- and long-term results; and |
✓• | | selecting appropriate performance metrics, including market-based measures such as total shareholder return, annual financial and operational goals such as production and EBITDA, and individual performance goals that drive our long-term business strategy. |
Some highlights of our 20222023 executive compensation program include: ✓• | | our 20222023 Short-term Incentive Plan aligns 2023 payments to actual performance on pre-established targets, effectively linking the Company’s financial performance to NEO pay; and |
✓• | | we achieved above threshold, but below target levels for reserves and production under our 2020-2022 Long-term Incentive Plan and fell(LTIP) seeks to incentivize employees to achieve long-term performance goals. Our 2021-2023 LTIP achieved below threshold for the mine site operatingtarget on production and cash flow, less capital. However, we achieved a TSR ranking of second against the peer group, which resulted in a 250% multiplier,maximum levels for reserve additions, and the overall LTIP performanceTSR ranked 8th out of 23 peers. The resulting payout was $123.75$56.25 per unit out of a targeted payout of $90 per unit.
|
In 2022,2023, of our shareholders who voted, 98%97% voted in favor of our executive compensation program. In considering how to vote on this proposal, we urge you to review the relevant disclosures in this Proxy Statement, particularly the Compensation Discussion and AnalysisCD&A section, which contains detailed information about our executive compensation program. We have held our “Say-on-Pay” advisory vote annually since 2011, and our Board recommends shareholders continue2011. The next required shareholder vote to vote for Every Year forrecommend the frequency of holding our Say-on-Pay vote See Proposal 4 on page 81.such votes is expected to occur in 2029. The Board and the Compensation Committee value the opinions of our shareholders and to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program. 34 www.hecla.com
Proposal 3 — Approval, on an Advisory Basis, of Our Named Executive Officer Compensation
We are asking shareholders to approve the following resolution at the Annual Meeting: “RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed pursuant to Item 402 of Regulation S-K, described in the CD&A, Summary Compensation Table for 2022,2023, and the related compensation tables and narrative in the Proxy Statement for the Company’s 20232024 Annual Shareholders’ Meeting, is hereby APPROVED.”
| | | | | | | | | 2024 Proxy Statement | 39 |
Required Vote The advisory vote on executive compensation will require the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What Votes are Required for the Proposals on page 88.95. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to approve the compensation of our NEOs. | | | | | | | | | | | | | | | | The Board recommends that you vote “FOR”“FOR” approval of the compensation of our NEOs. | | | |
2023 Proxy Statement 35
COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion And Analysis
Table of Contents to Compensation Discussion and Analysis This CD&A describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last calendar year to our CEO, SVPSenior Vice President – CFO,Chief Financial Officer, and our three other most highly compensated executive officers during 2022,2023, and any additional individuals for whom disclosure would have been provided, but for the fact that the individuals were not serving as executive officers at the end of the last completed calendar year. 
| | | | | | | | | 2024 Proxy Statement | 41 |
Our Compensation Committee (“committee”)(committee) strives to design a fair and competitive compensation program for executive officers that will attract, motivate, and retain highly qualified and experienced executives, provide incentives based on our performance and reward performance, with an overall emphasis on maximizing our long-term shareholder value. Our executive compensation program consists of several components, including base salary, short- and long-term performance awards (paid in cash or equity), equity awards, a deferred compensation plan and retirement benefits. The NEOs who are discussed throughout this CD&A and in the compensation tables are: | | | | | | | | | | | | | | | Name
| | Age | | | Name | | Age | | Principal Position | | | | |  
| | Phillips S. Baker, Jr. | | 64 | | President and CEO | | | | | 
| | | 63Russell D. Lawlar | | | President and CEO (“CEO”) | | | | | 
44 | | Lauren M. Roberts
| | | 57 | | | Sr. Vice President and COO (“SVP – COO”)Chief Financial Officer | | | | |  
| | Russell D. Lawlar
| | | 43 | | | Sr. Vice President and CFO (“SVP – CFO”) | | | | | 
| | Michael L. Clary | | | 53 | 56 | | Sr. Vice President and Chief Administrative Officer (“SVP – CAO”) | | | | |  
| | Robert D. Brown | | | 5455 | | | Vice President – Corporate Development and Sustainability | | | | | 
| | David C. Sienko | | 55 | | Vice President – General Counsel | | | | | 
| | Lauren M. Roberts | | 58 | | Former Sr. Vice President and Chief Operating Officer |
36 www.hecla.com
Compensation Discussion and Analysis
| | | | | | | | | | | | | |
| | Glossary of CD&A Terms | | | | | committee | | | Compensation Committee | | committee2010 Stock Plan
| | Compensation Committee | | NEOs | | Named Executive Officers | | | | | | | | | | | STIP
| | Short-term Incentive Plan | | 2010 Stock Plan | | 2010 Stock Incentive Plan | | | | | | | | | STIP | | LTIPShort-term Incentive Plan
| | Long-term Incentive PlanKEDCP | | KEDCP | | Key Employee Deferred Compensation Plan | | | | | | | | | LTIP | | PSUsLong-term Incentive Plan
| | Performance-based UnitsRetirement Plan | | Retirement Plan | | Hecla Mining Company Retirement Plan, a defined benefit retirement plan | | | | | | | | | PSUs | | RSUsPerformance-based Units
| | Restricted Stock UnitsSERP | | SERP | | Supplemental Excess Retirement Plan | | | | | | | | | RSUs | | TSRRestricted Stock Units
| | Total Shareholder ReturnSEC | | SEC | | Securities and Exchange Commission | | | | | | | | | TSR | | GAAPTotal Shareholder Return
| | ESG | | Environmental, Social and Governance | | | | | GAAP | | Generally Accepted Accounting Principles in the United States | | ESG
UCB
| | Environmental, Social and GovernanceUCB
| | Underhand Closed Bench mining method | | | | | | | | | Dodd-Frank Act | | Dodd-Frank Act
| | Dodd-Frank Wall Street Reform and Consumer Protection Act | | NYSE | | New York Stock Exchange | | | | | | | | | AISC | | AISC
| | All-In Sustaining Cost After By-Product Credits | | AIFR | | All-Injury Frequency Rate | | | | | | | | | 401(k) Plan | | 401(k) Plan
| | Hecla’s Capital Accumulation Plan, a defined contribution retirement plan | | AEMA AgEq
| | American Exploration & Mining Association | | | | | Silver Equivalent OuncesSME
| | | | | | | | | | | SME
| | Society for Mining, Metallurgy & Exploration | | LTIAgEq | | Silver Equivalent Ounces | | | | | NEOs | | Named Executive Officers | | LTI | | Long-term Incentive Components (LTIP, RSUs and PSUs) |
| | | | | 42 | 2024 Proxy Statement | | | | |
Executive Summary We are the largest primary silver producer in the United States – and the oldest NYSE-listed precious metals mining company in North America. We produce more than 40% of all silver in the United States, and have operating mines in Alaska (Greens Creek), Idaho (Lucky Friday), Quebec, Canada (Casa Berardi), and our recently acquired operation in the Yukon Territory, Canada (Keno Hill), is expected to begin production in the third quarter.. We also own several exploration properties and pre-development projects in world-class silver and gold mining districts throughout North America. Overall, 20222023 was a strong year for Hecla.of mixed results. We had strongexperienced two abnormal events which were largely outside of our control: a fire at our Lucky Friday mine that resulted in an extended period of no production at the mine, and cash flow despite difficulties with a tight labor market, supply chain challenges, and inflation.an impoundment failure at our Casa Berardi mine that contributed to lower than expected production from the mine. Strategically, we completed the acquisition of AlexcoATAC Resource, Corp.which gave us a 700 square mile land package in the Yukon Territory. Our silver reserves were the second highest in Company history, and its Keno Hill project, adding nearly 50we produced 14.3 million ounces of silver, reserves, which are the highest-grade and largest primary silver reserves in Canada. Operationally, we produced 14.2 million ounces of silver, Hecla’swas our second highest and 175,807 ounces of gold. We also had record lead production of 49,000 tons and zinc production of 65,000 tons. The Lucky Friday Mine increased its silver production by 24% to 4.4 million ounces using the UCB mining method.in history. Our AIFR was 1.22, which was 42% below the U.S. average. We finished the year with record silver reserves of 241 million ounces, and gold reserves of 2.6 million ounces.
We had sales of $718.9 million with 67% from our Greens Creek and Lucky Friday mines. Ourmines recorded their lowest AIFR of 0.29 and 0.66, respectively.
In addition to the 14.3 million ounces of silver, we produced 151,259 ounces of gold, 60,579 tons of zinc and 40,347 tons of lead. We generated $75.5 million in net cash provided by operating activities after $32.5 million in exploration and pre-development and $76.3 million in ramp-up and suspension costs. We also had sales of $720.2 million, and our balance sheet was strong with $104.7$106.4 million in cash and cash equivalents, and with approximately $247$121.5 million in available liquidity. We also paid dividends to our common and preferred shareholders in the amount of $12.9 million, or 14% of cash flow from our operations.$15.7 million. Our ESG performance for the year hadIn 2023, we did have some notable highlights, including (i) our AIFR was 1.22, which was 42% belowthe issuance of a patent in the U.S. average; (ii)for our San Sebastian Mine received the 2022 Environmental and Sustainability Excellence Award given by AEMA; (iii) our Lucky Friday Mine received the SME Murray Innovation Award for 2023 for pioneering the UCB mining method; (ii) our Keno Hill mine began silver production in the second quarter of 2023; and (iv) we negotiated and signed a six-year agreement with(iii) in response to the unionthird quarter fire at our Lucky Friday Mine.mine, we executed the Lucky Friday mine restart plan on schedule and restarted production in January 2024.
Based onAfter considering the Company’s strong 2022positive and negative Company performance in 2023, the committee determined the STIP corporate performance was 135%80% of target. Our 2020-2022target, and our 2021-2023 LTIP performance was $123.75 per unit out63% of a targeted value of $90 per unit.
2023 Proxy Statement 37
Compensation Discussion and Analysis
target. Key Operating and Significant Financial Results The mining business requires long-term planning and implementation of operating strategies over several years to deliver successful operating and financial results. Accordingly, in the table below and summary that follows, we set forth our key operating and financial results for years 2023, 2022 2021 and 2020.2021. | | | | As of and for the Year Ended December 31, | | | As of and for the Year Ended December 31, | | Key Results | | 2022 | | 2021 | | | 2020 | | | 2023 | | | 2022 | | | 2021 | | | Silver (ounces) produced | | | 14,182,987 | | | | 12,887,240 | | | | 13,542,957 | | Silver (ounces) produced | | Silver (ounces) produced | | Silver (ounces) produced | | | | 14,342,863 | | | | 14,182,987 | | | | 12,887,240 | | | Gold (ounces) produced | | Gold (ounces) produced | | Gold (ounces) produced | | Gold (ounces) produced | | | 175,807 | | | | 201,327 | | | | 208,962 | | | | 151,259 | | | | 175,807 | | | | 201,327 | | | Lead (tons) produced | | | 48,713 | | | | 43,010 | | | | 34,127 | | Lead (tons) produced | | Lead (tons) produced | | Lead (tons) produced | | | | 40,347 | | | | 48,713 | | | | 43,010 | | | Zinc (tons) produced | | Zinc (tons) produced | | Zinc (tons) produced | | Zinc (tons) produced | | | 64,748 | | | | 63,617 | | | | 63,112 | | | | 60,579 | | | | 64,748 | | | | 63,617 | | | Sales (in millions) | | $ | 718.9 | | | $ | 807.5 | | | $ | 691.9 | | Sales (in millions) | | Sales (in millions) | | Sales (in millions) | | | $ | 720.2 | | | $ | 718.9 | | | $ | 807.5 | | | Net (loss) income (in millions) | | Net (loss) income (in millions) | | Net (loss) income (in millions) | | Net (loss) income (in millions) | | $ | (37.3 | ) | | $ | 35.1 | | | $ | (9.5 | ) | | $ | (84.2 | ) | | $ | (37.3 | ) | | $ | 35.1 | | | Basic (loss) income per common share | | $ | (0.07 | ) | | $ | 0.06 | | | $ | (0.02 | ) | Basic (loss) income per common share | | Basic (loss) income per common share | | Basic (loss) income per common share | | | $ | (0.14 | ) | | $ | (0.07 | ) | | $ | 0.06 | | | Adjusted EBITDA (in millions)2 | | $ | 217.5 | | | $ | 220.1 | | | $ | 203.3 | | Adjusted EBITDA (in millions)(3) | | Adjusted EBITDA (in millions)(3) | | Adjusted EBITDA (in millions)(3) | | Adjusted EBITDA (in millions)(3) | | | $ | 212.6 | | | $ | 217.5 | | | $ | 220.1 | | | Cash from operating activities (in millions) | | Cash from operating activities (in millions) | | Cash from operating activities (in millions) | | Cash from operating activities (in millions) | | $ | 89.9 | | | $ | 220.3 | | | $ | 180.8 | | | $ | 75.5 | | | $ | 89.9 | | | $ | 220.3 | | | Cash and cash equivalents (in millions) | | $ | 104.7 | | | $ | 210.0 | | | $ | 129.8 | | Cash and cash equivalents (in millions) | | Cash and cash equivalents (in millions) | | Cash and cash equivalents (in millions) | | | $ | 106.4 | | | $ | 104.7 | | | $ | 210.0 | |
| (3) | Adjusted EBITDA is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
| | | | | | | | | 2024 Proxy Statement | 43 |
Our overall operating and financial results are more fully described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K filed with the SEC on February 17, 2023.15, 2024. Some of our key achievements during 20222023 were as follows: Operational: | • | | silver reserves of 238 million ounces, second highest in Company history; |
record silver reserves of 241 million ounces;
| • | | gold reserves of 2.2 million ounces; |
gold reserves of 2.6 million ounces;
| • | | produced 14.3 million ounces of silver, Hecla’s second highest, and 151,259 ounces of gold; |
produced 14.2 million ounces of silver, Hecla’s second highest, and 175,807 ounces of gold;
| • | | zinc production of 61,000 tons and lead production of 40,000 tons; |
record lead production of 49,000 tons and zinc production of 65,000 tons;
| • | | our Lucky Friday mine mitigated the damages to the #2 Shaft and restarted production in January 2024; |
achieved silver cost guidance with total silver cost of sales of $349.3 million and AISC of $11.25 per silver ounce;
| • | | we achieved an AIFR of 1.45, which was lower than the national average, with our Greens Creek and Lucky Friday mines recording their lowest AIFR of 0.29 and 0.66, respectively; and |
increased Lucky Friday Mine silver production by 24% to 4.4 million ounces using the UCB mining method; and
achieved record mill throughput milestones at all three operations.
| • | | our Keno Hill mine began silver production in the second quarter of 2023. |
Financial: reported sales of $718.9 million with 67% from our Greens Creek Mine and Lucky Friday Mine;
| • | | reported sales of $720.2 million, the second highest in history, with 39% from silver and 36% from gold; |
| • | | cash flow from operations of $75.5 million, with Greens Creek generating $157.3 million in cash flow from operations and free cash flow of $121.6 million(4); |
| • | | balance sheet with $106.4 million in cash and cash equivalents with approximately $121.5 million in available liquidity; |
| • | | returned $15.7 million to our common and preferred stock shareholders through dividends; and |
| • | | adjusted EBITDA of $217.5(5) for the year was $212.6 million, net debt to adjusted EBITDA ratio of 1.92;which was in line with the prior year. |
| • | | loss applicable to common stockholders of $37.9 million or $0.07 per share, and adjusted net income3 of $27.8 million or $0.05 per share;
|
strong balance sheet with $104.7 million in cash and cash equivalents with approximately $247 million in available liquidity; and
dividends of $12.9 million, or 14% of cash flow from operations.
Environmental, Social, Governance: strong safety performance with an AIFR of 1.22, which equals a prior Company record and is 42% below the U.S. Average;
the San Sebastian Mine received the 2022 Environmental and Sustainability Excellence Award given by AEMA;
the Lucky Friday Mine received the SME Murray Innovation Award for 2023 for pioneering the UCB mining method; and
| • | | negotiated and signed a six-year agreement withour Greens Creek mine received the union at our Lucky Friday Mine.annual Hard Hat Safety Award by Alaska Miners Association in recognition of the mine’s exemplary commitment to safety;
|
2• | | Adjusted EBITDA less capital isreceived the NIOSH Mine Safety and Health Technology Metals Sector Innovation Award, in recognition of Hecla’s culture of innovation with the issuance of a non-GAAP measurement. See Appendix Apatent in the U.S. for a reconciliation to GAAP.
|
3 | Adjusted net income is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP.the UCB mining method; and
|
38 www.hecla.com
Compensation Discussion and Analysis
| • | | five of our seven directors joined the Board after 2016, including one in 2021 and most recently, an additional director was added in the first quarter 2024. |
Benchmarking and Competitive Analyses We have adopted a pay-for-performance philosophy that incentivizes performance by targeting base salaries slightly below the median of our peer group but targeting incentives above the peer median. The total direct compensation of our NEOs is targeted at approximately the 50th percentile. The process of setting targeted compensation includes consideration of a NEO’s skills, experience, knowledge, and reputation in the industry, as well as Company needs. Central to the pay review process is the selection of a relevant peer group. Because we operate in a global business that is dominated by Canadian companies, our peer group includes only two U.S. companies. In addition, we have a corporate office in Vancouver, British Columbia, where one of our NEOs works. The committee reviews and determines the composition of our peer group on an annual basis. In May 2022,2023, the committee removed Equinox Gold, Oceana Gold, Yamana Gold, and Pretium Resources,approved the same peer group as these companies were no longer similar to Heclaused in total revenue, total assets and/or market capitalization.the previous year. | (4) | Free cash flow is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
| (5) | Adjusted EBITDA is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
| | | | | 44 | 2024 Proxy Statement | | | | |
In 2022,2023, our peer group was made up of the following 13 companies: | Company | | Annual Revenue(1) ($US millions) | | | Market Cap(1) ($US millions) | | | Total Assets(1) ($US millions) | | | Corporate Location | | Annual Revenue(1) ($US millions) | | Market Cap(1) ($US millions) | | Total Assets(1) ($US millions) | | Corporate Location | | | Alamos Gold Inc. (NYSE: AGI) | | | 824 | | | | 3,014 | | | | 3,622 | | | Canada | Alamos Gold Inc. (NYSE: AGI) | | Alamos Gold Inc. (NYSE: AGI) | | Alamos Gold Inc. (NYSE: AGI) | | | | 8,212 | | | | 3,985 | | | | 3,674 | | | | Canada | | | B2Gold Corporation (NYSE: BTG) | | B2Gold Corporation (NYSE: BTG) | | B2Gold Corporation (NYSE: BTG) | | B2Gold Corporation (NYSE: BTG) | | | 1,762 | | | | 4,151 | | | | 3,561 | | | Canada | | | 1,733 | | | | 3,821 | | | | 3,681 | | | | Canada | | | Centerra Gold Inc. (NYSE: CGAU) | | | 900 | | | | 2,282 | | | | 2,677 | | | Canada | Centerra Gold Inc. (NYSE: CGAU) | | Centerra Gold Inc. (NYSE: CGAU) | | Centerra Gold Inc. (NYSE: CGAU) | | | | 850 | | | | 1,132 | | | | 2,334 | | | | Canada | | | Coeur Mining Inc. (NYSE: CDE) | | Coeur Mining Inc. (NYSE: CDE) | | Coeur Mining Inc. (NYSE: CDE) | | Coeur Mining Inc. (NYSE: CDE) | | | 833 | | | | 1,295 | | | | 1,734 | | | United States | | | 786 | | | | 994 | | | | 1,846 | | | | United States | | | Eldorado Gold Corporation (NYSE: EGO) | | | 941 | | | | 1,708 | | | | 4,931 | | | Canada | Eldorado Gold Corporation (NYSE: EGO) | | Eldorado Gold Corporation (NYSE: EGO) | | Eldorado Gold Corporation (NYSE: EGO) | | | | 871 | | | | 1,548 | | | | 4,458 | | | | Canada | | | First Majestic Silver Corp. (NYSE: AG) | | First Majestic Silver Corp. (NYSE: AG) | | First Majestic Silver Corp. (NYSE: AG) | | First Majestic Silver Corp. (NYSE: AG) | | | 584 | | | | 2,890 | | | | 2,125 | | | Canada | | | 627 | | | | 2,273 | | | | 2,110 | | | | Canada | | | IAMGOLD Corporation (NYSE: IAG) | | | 876 | | | | 1,493 | | | | 3,972 | | | Canada | IAMGOLD Corporation (NYSE: IAG) | | IAMGOLD Corporation (NYSE: IAG) | | IAMGOLD Corporation (NYSE: IAG) | | | | 957 | | | | 1,229 | | | | 4,425 | | | | Canada | | | New Gold Inc. (NYSE: NGD) | | New Gold Inc. (NYSE: NGD) | | New Gold Inc. (NYSE: NGD) | | New Gold Inc. (NYSE: NGD) | | | 746 | | | | 1,022 | | | | 2,477 | | | Canada | | | 604 | | | | 671 | | | | 2,244 | | | | Canada | | | NOVAGOLD Resources Inc. (NYSE: NG) | | | — | | | | 2,282 | | | | 199 | | | Canada | NOVAGOLD Resources Inc. (NYSE: NG) | | NOVAGOLD Resources Inc. (NYSE: NG) | | NOVAGOLD Resources Inc. (NYSE: NG) | | | | 0 | | | | 1,392 | | | | 159 | | | | Canada | | | Pan American Silver Corporation (Nasdaq: PAAS) | | Pan American Silver Corporation (Nasdaq: PAAS) | | Pan American Silver Corporation (Nasdaq: PAAS) | | Pan American Silver Corporation (Nasdaq: PAAS) | | | 1,633 | | | | 5,256 | | | | 3,519 | | | Canada | | | 1,495 | | | | 3,441 | | | | 3,249 | | | | Canada | | | Royal Gold, Inc. (Nasdaq: RGLD) | | | 654 | | | | 6,902 | | | | 2,757 | | | United States | Royal Gold, Inc. (Nasdaq: RGLD) | | Royal Gold, Inc. (Nasdaq: RGLD) | | Royal Gold, Inc. (Nasdaq: RGLD) | | | | 603 | | | | 7,394 | | | | 3,535 | | | | United States | | | SSR Mining Inc. (Nasdaq: SSRM) | | SSR Mining Inc. (Nasdaq: SSRM) | | SSR Mining Inc. (Nasdaq: SSRM) | | SSR Mining Inc. (Nasdaq: SSRM) | | | 1,474 | | | | 3,751 | | | | 5,211 | | | Canada | | | 1,148 | | | | 3,237 | | | | 5,255 | | | | Canada | | | Torex Gold Resources Inc. (OTC: TORXF) | | | 856 | | | | 890 | | | | 1,359 | | | Canada | Torex Gold Resources Inc. (OTC: TORXF) | | Torex Gold Resources Inc. (OTC: TORXF) | | Torex Gold Resources Inc. (OTC: TORXF) | | | | 869 | | | | 987 | | | | 1,593 | | | | Canada | | | Median | | Median | | Median | | Median | | | 856 | | | | 2,282 | | | | 2,757 | | | | | | 869 | | | | 1,548 | | | | 3,249 | | | | | Hecla Mining Company (NYSE: HL) | | | 807 | | | | 2,808 | | | | 2,729 | | | United States | Hecla Mining Company (NYSE: HL) | | Hecla Mining Company (NYSE: HL) | | Hecla Mining Company (NYSE: HL) | | | | 719 | | | | 2,263 | | | | 2,927 | | | | United States | |
| (1) | In $US millions as of year-end 2021. 2022. |
The peer group is composed entirely of publicly held companies, mostall of which are engaged in the business of mining precious metals, with revenue, market capitalization and total assets within a reasonable range of Hecla’s. We believe these peer companies are appropriate because they are in the same industry, compete with us for executive talent, have executives in positions similar to ours, and are considered by the committee to be comparable to Hecla. During our shareholder outreach discussions, many of our largest shareholders have informed us that, compared to peer groups selected by proxy advisory firms, they consider the peer group chosen by us to be the mostmore relevant and appropriate for compensation and performance benchmarking purposes. The peer group selected last year by Glass Lewis included 108 of our 1713 selected peers. The peer group selected by Institutional Shareholder Services (“ISS”)(ISS) included only two3 of our 1713 selected peers. The rest of the peer group selected by ISS contained U.S.-based companies in the industrial and specialty chemicals, plastics, coatings, nickel and cobalt-based alloys, steel products and other industries – companies and industries whose market fundamentals are materially different from that of the precious metals mining industry. We understand that ISS’s internal policies prohibit its inclusion of Canadian companies (which account for 11 of our peers) and require that Hecla be 2023 Proxy Statement 39
Compensation Discussion and Analysis
compared to companies having only similar revenue instead of similar market capitalization or total assets. We believe that a fair compensation peer group, in terms of both industry profile and size, should not be selected for Hecla without including Canadian mining companies. The committee reviewed an analysis of executive compensation levels at the 25th, median, and 75th percentiles of the peer group for positions comparable to those held by each of our NEOs. The committee also compared the target total cash compensation (base salary plus target STIP) and target total direct compensation (base salary plus target STIP plus the value of LTIP target) for each of the NEOs against these benchmarks. For retention and competitive considerations, in comparison to the peer group data applicable to each NEO’s position, we generally target each NEO’s total direct compensation at the median level and deliver compensation above or below these levels when warranted by individual performance. In 2022,2023, total direct compensation for our NEOs was targeted approximately at the approximate median percentile of the peer group.
| | | | | | | | | 2024 Proxy Statement | 45 |
In 2022,2023, the committee approved a separate peer group to be used specifically with regard to TSR, for purposes of our performance-based equity awards (PSUs), discussed on page 54,59, which consisted of the following companies/funds: | | | | | | | | Alamos Gold Inc. (NYSE: AGI) | | Coeur Mining, Inc. (NYSE: CDE) | | New Gold Inc. (NYSE: NGD) | | | | B2Gold Corp. (NYSE: BTG) | | First Majestic Silver Corp. (NYSE: AG) | | Centerra Gold Inc. (NYSE: CGAU) | | | | IAMGOLD Corporation (NYSE: IAG) | | Van Eck Gold Miners ETF (ARCX: GDX) | | Pan American Silver Corp. (Nasdaq: PAAS) | | | | SSR Mining Inc. (Nasdaq: SSRM) | | Van Eck Junior Gold Miners ETF (ARCX: GDXJ) | | Eldorado Gold Corporation (NYSE: EGO) | | | | Equinox Gold Corp. (NYSE: EQX) | | Oceana Gold Corp. (OTCM: OCANF) | | iShares Silver Trust (ARCX: SLV) | | | | Fresnillo PLC (OTC: FNLPF) | | Hochschild Mining plc (OTCM: HCHDF) | | SPDR Gold Shares (ARCX: GLD) | | | | Torex Gold Resources Inc. (OTC: TORXF) | | Fortuna Silver Mines Inc. (NYSE: FSM) | | |
Our executive compensation peer group is different from our TSR peer group. When setting executive compensation, we use a peer group made up of those with whom we compete for talent. For the TSR peer group we use a set of companies and ETFs for which we compete for investment dollars. The Compensation Committee Process and the Role of Management and Human Resources Department Role of the Committee. The committee, consisting entirely of independent members (Stanley, Johnson, and Boggs), has primary responsibility for executive compensation decisions. The committee carries out its responsibilities under a charter approved by the Board. The committee has the authority to approve all executive compensation, including our CEO’s (but not that of our independent directors, which is decided by the full Board). In 2022,2023, the committee did not receive assistance from an independent executive compensation consultant. The committee assessedevaluated the Company’s compensation arrangements to determine if their provisions and operation created undesired or unintentional risks of a material nature. The committee found that our compensation policies and practices do not create inappropriate or unintended material risk to the Company as a whole. See Compensation Risk Analysis on page 59.64. Role of Human Resources Department. In 2022,2023, the committee determined the Company’s human resources department had the capacity to review and evaluate our executive compensation program and develop comparisons with the programs and NEO compensation levels of our peer companies. In 2022,2023, the human resources department performed the following services: | • | | evaluated the competitiveness of the total direct compensation package provided to Hecla’s executive officers; and specifically, compared Hecla’s current executive officer compensation with compensation provided to executives in similar roles at comparable peer group companies listed in the table on page 44; |
evaluated the competitiveness of the total direct compensation package provided to Hecla’s executive officers; and specifically, compared Hecla’s current executive officer compensation with compensation provided to executives in similar roles at comparable peer group companies listed in the table on page 39;
| • | | reviewed updated information regarding Hecla’s executive compensation program and the positions to be benchmarked, including organization charts, position descriptions, current total compensation, and other relevant data; |
reviewed updated information regarding Hecla’s executive compensation program and the positions to be benchmarked, including organization charts, position descriptions, current total compensation, and other relevant data;
| • | | reviewed last year’s peer group to determine if the included companies continue to be appropriate and if any additional companies should be considered for inclusion, or removed from the peer group due to a merger, acquisition, etc.; |
reviewed last year’s peer group to determine if the included companies continue to be appropriate and if any additional companies should be considered for inclusion, or removed from the peer group due to a merger, acquisition, etc.;
| • | | collected and analyzed compensation data from the most recent proxy filings of the peer group and summarized the market pay data and compared Hecla’s executive compensation levels to the peer group proxies; |
collected and analyzed compensation data from the most recent proxy filings of the peer group and summarized the market pay data and compared Hecla’s executive compensation levels to the peer group proxies;
| • | | analyzed the year-over-year change in compensation levels for Hecla compared to each market data source; |
analyzed the year-over-year change in compensation levels for Hecla compared to each market data source;
| • | | analyzed Hecla’s long-term incentive and equity practices compared to peers; |
analyzed Hecla’s long-term incentive and equity practices compared to peers;
| • | | prepared a report to the committee summarizing the methodology used and findings; and |
prepared a report to the committee summarizing the methodology used and findings; and
assisted the committee in meeting its obligation to issue a Compensation Committee Report recommending inclusion of the CD&A in the Proxy Statement.
| • | | assisted the committee in meeting its obligation to issue a Compensation Committee Report recommending inclusion of the CD&A in the Proxy Statement. |
In June 2022,2023, Hecla’s human resources department presented its competitive analysis findings and recommendations to the committee. The competitive analysis provided detailed comparative data for each executive officer position and assessed each component of pay, including base salary, short- and long-term 40 www.hecla.com
Compensation Discussion and Analysis
incentives and total target compensation, as well as the mix of compensation among these pay elements.elements across the Company’s peer group. The committee compared this information to the executives’ compensation by similarity of position. The committee also reviewed the Company’s performance and carefully evaluated each executive’s performance during the year against established goals, leadership qualities, operational performance, business responsibilities, career with Hecla, current compensation arrangements and long-term potential.
| | | | | 46 | 2024 Proxy Statement | | | | |
Role of Management. The committee considers input from the CEO in making determinations regarding our executive compensation program and the individual compensation of each NEO (other than the CEO). As part of our annual review process, the CEO reviews the performance of the other NEOs and their contribution to the overall performance of the Company. Approximately mid-year, the CEO presents recommendations to the committee regarding base salary adjustments, target STIP awards, stock-based grants, and LTIP unit grants, based on a thorough analysis of relevant market compensation data comparing Hecla with an applicable peer group within the mining industry. The CEO and SVPSenior Vice President – CAOChief Administrative Officer also make recommendations to the committee regarding the Company’s short-term quantitative and qualitative goals, and long-term goals for the NEOs (other than the CEO), as well as recommendations regarding the participation in the Company’s stock-based compensation plans and amendments to the plans, as necessary. Compensation Philosophy and Objectives Management and the Board recognize that the mining industry is cyclical, influenced by market factors, and can include wide swings in the prices for precious metals, which are beyond our management’s control, that can significantly influence our profitability and share price. Further, we operate in a competitive and challenging industry, and the supply of mining executives is very limited, particularly in the United States. As a result, having a viable compensation strategy is critical to our success. We expect top-level performance from our executive management team during downturns in our industry and during periods of Company expansion. Accordingly, the criteria the committee has established for our performance-based awards have sometimes been particularly challenging to achieve. Nevertheless, even in years for which we have incurred a net loss, we have often performed better than most of our industry peers in key respects (e.g., reserves and resources). The committee considers this and other factors in evaluating discretionary awards. Our compensation philosophy is to pay our NEOs competitive levels of compensation that best reflect their individual responsibilities and contributions to the Company, while providing incentives to achieve our business and financial objectives. While comparisons to compensation levels at companies in our peer group are helpful in assessing the overall competitiveness of our compensation program, we believe our executive compensation program must also be internally consistent and equitable to achieve our corporate objectives. The pay-for-performance philosophy of our executive compensation programs described in this Proxy Statement plays a significant role in our ability to produce strong operating, exploration, strategic, and financial results. It enables us to attract and retain a highly experienced and successful team to manage our business. The programs strongly support our business objectives and are aligned with the value provided to our shareholders. Further, as an executive’s level of responsibility within our organization increases, so does the percentage of total compensation we link to performance – through the short- and long-term incentive programs, as well as share price performance. In setting policies and practices regarding compensation, the guiding philosophy of the committee is to: | • | | have compensation that is primarily at-risk and based on strategic objectives and tactical activities; |
| • | | acquire, retain, and motivate talented executives; and |
acquire, retain, and motivate talented executives.
| • | | total direct compensation is set within a competitive range of our peer group to ensure that it is appropriate and is aligned with the level of position, experience, skills, and performance of the executive. |
The committee believes a mix of both cash and equity incentives is appropriate, as cash incentives reward executives for achieving both short- and long-term goals, while equity incentives align the interests of our executives with those of our shareholders. In determining the amount of the cash and equity incentives, the committee considers each officer’s total compensation on both a short- and long-term basis to assess the retention and incentive value of their overall compensation. 2023 Proxy Statement 41
Compensation Discussion and Analysis
We also maintain (or avoid) the following pay practices we believe enhance our pay-for-performance philosophy and further align our NEOs’ interests with those of shareholders: We DO Have thesePay for Performance – Best Practices
our shareholders have the opportunity annually to cast an advisory vote on our executive compensation;
incentive award metrics that are generally objective and tied to Company performance;
| • | | 80.7%our shareholders have the opportunity annually to cast an advisory vote on our executive compensation;
|
| • | | the compensation of identified peer companies based on industry and size criteria is considered to ensure that pay levels and program design for the NEOs are appropriate and competitive; |
| | | | | | | | | 2024 Proxy Statement | 47 |
| • | | incentive awards are heavily dependent upon our stock performance and are measured against objective financial metrics; |
| • | | the majority of total direct compensation for executives is performance-based as well as equity-based to align executives’ rewards with sustained shareholder value; |
| • | | total direct compensation is set within a competitive range of our peer group to ensure it is appropriate and aligned with the level of position, experience, skills, and performance of the CEO’s and 74.8% of the other NEOs’ pay is at-risk;executive; |
64% of total compensation for the CEO is performance-based;
59.1% of total compensation for the other NEOs is performance-based;
| • | | actual realized total direct compensation and pay positioning are designed to fluctuate with, and be commensurate with, actual annual and long-term performance, recognizing company-wide and individual results; |
| • | | we grant PSUs that have value based on our TSR rank within our selected peer group and have no value if the share performance does not achieve the 5025th percentile in the peer group; |
rigorous stock ownership requirements for our executive officers and directors;
our change in control agreements contain double trigger payments and upon a change of control there is no excise tax gross up;
all of the CEO’s target STIP compensation is tied solely to Company performance;
time-based equity awards that generally vest over a three-year period to promote retention;
our Insider Trading Policy provides that directors and officers are prohibited from hedging or pledging any securities of the Company;
each of the Company’s incentive plans (STIP, LTIP, KEDCP, and 2010 Stock Plan) have clawback provisions;
our NEOs, including our CEO, generally must remain employed with the Company through the payment date of their short- and long-term awards, or the awards are forfeited, except in the cases of death, disability, or in some cases retirement;
| • | | robust stock ownership requirements for our executive officers and directors; |
| • | | our change in control agreements contain a double trigger provision and upon a change of control there is no excise tax gross up; |
| • | | time-based equity awards vest over a three-year period to promote retention; |
| • | | our Insider Trading Policy provides that directors and officers are prohibited from hedging or pledging any securities of the Company; |
| • | | each of the Company’s incentive plans (STIP, LTIP, KEDCP, and 2010 Stock Plan) have clawback provisions; |
| • | | our NEOs, including our CEO, generally must remain employed with the Company through the payment date of their short- and long-term awards, or the awards are forfeited, except in the cases of death, disability, or in some cases retirement; |
| • | | our Insider Trading Policy prohibits all directors, executive officers, and certain other employees from purchasing or selling any Company securities three weeks before through two days after the public release of any of our periodic results, or at any other time during the year while in possession of material non-public information about the Company; |
compensation programs designed to discourage unnecessary or imprudent risk taking;
| • | | compensation programs designed to discourage unnecessary or imprudent risk taking; |
ongoing engagement with institutional shareholders regarding compensation policies and practices;
| • | | caps on performance-based cash and equity incentive compensation; and |
caps on performance-based cash and equity incentive compensation;
annual review and approval of executive compensation strategy; and
no strict benchmarking of compensation to a specific percentile of compensation peer group.
| • | | annual review and approval of executive compensation strategy. |
We DO NOT Have theseCompensation Program – Best Practices
ו | | repricing of stock options;we conduct an annual shareholder outreach program and use that input when considering our program decisions and pay practices;
|
ו | | perquisites;we disclose our corporate performance goals and achievements relative to these goals;
|
ו | | we devote considerable time to management succession planning and leadership development efforts; |
| • | | we have a clawback policy that enables the Board to recoup compensation in the event of a financial restatement or misconduct, which mitigates compensation-related risk and complies with applicable SEC rules and NYSE listing standards. See “Clawback Policy” on page 62 for additional information; |
| • | | we maintain robust stock ownership guidelines for executive officers and non-management directors. See “Non-Management Director Stock Ownership Guidelines” on page 34, and “Stock Ownership Guidelines for NEOs” on page 61 for additional information; |
| • | | we prohibit our executive officers and all non-management directors, from engaging in any form of hedging transaction involving Hecla securities, holding Hecla securities in margin accounts and pledging stock as collateral for loans in a manner that could create compensation-related risk for the Company; and |
| • | | we do not provide excise tax gross ups; and |
× | single-trigger change in control arrangements.ups.
|
42 www.hecla.com
Compensation Discussion and Analysis
| | | | | 48 | 2024 Proxy Statement | | | | |
Elements of Total Compensation We have a multifaceted compensation program. For the year ended December 31, 2022,2023, our executive compensation program consisted of the following elements: | | | | | | | | | | Pay ElementPAY ELEMENT | | | | MetricsMETRICS / ObjectivesOBJECTIVES | | | | | | | | | | | | | | | | | | Base Salary | | | | Objective:Provide a fixed level of cash compensation for performing day-to-day responsibilities.
Key Feature:Designed to be at approximatelybelow the 50th50th percentile.
Terms:Paid semi-monthly. | | | | | | | | | | | | |  | | | | | | 
| | Short-Term Incentive Pay (STIP) | | | | Objective: Focus executives on achieving the Company’s short-term goals, and the performance steps necessary to achieve longer-term objectives. | | | | | | | | | Key Features:The Company’s STIP pool is targeted at a fixed percentage of all salaried employees’ targeted STIPaward,STIP award, but the actual bonus pool is based on achievement of Company goals. Some goals are quantitative, such as EBITDA, production, and AIFR, while others are qualitative and reflect strategic objectives and tactical activities. Many qualitative goals have quantitative components, such as “improve mill recovery.recovery by X%.” Weighting of the corporate performance is targeted at 60%55% quantitative corporate performance goals, 20%30% qualitative, and 20%15% that is determined at the discretion of the committee. Except for the CEO, executive incentive pay is based on a combination of corporate and individual performance. | | | | | | | | | Terms: Determined by the committee and paid in a single payment following the performance period. Awarded in the first half of each year. Designed to be awarded in cash but may be paid in equity (in full or part). Any NEO receiving a STIP award must be employed with the Company at the time of payment, or their award is forfeited, exceptforfeited. If the participant meets these age and years of service requirements, their prorated portion for a termination due to death or disability.outstanding plan periods will be paid after the completion of those plan periods. | | | | | | | | | | | | | | | | | | Long-Term Incentive Pay (LTIP) | | | | Objective:Focus executives on longer-term value creation as determined by the specific targets of the plan. | | | | | | | | | Key Features: Based on corporate goals achieved over a three-year performance period. A new three-year performance period begins each calendar year and performance units are granted in the first half of each year. Each three-year plan identifies key long-term objectives that are expected to create long-term value for shareholders such as increasing reserves and production, generating cash flow and shareholder returns. | | | | | | | | | Terms:Determined by the committee and paid in a single payment following the three-year performance period. Awarded in the first half of each year. Designed to be awarded in cash but may be paid in equity (in full or part). Any NEO receiving a LTIP award must be employed with the Company at the time of payment, or their award is forfeited, except in the cases of death, disability, or in some cases retirement. At the time of an employee’s retirement, in order to receive any LTIP award that otherwise becomes payable, the employee must at least be age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have seven or more years of service with the Company; or (iii) 68. If the participant meets these age and years of service requirements, their prorated portion for outstanding plan periods will be paid after the completion of those plan periods. | | | | | | | |
2023 Proxy Statement 43
Compensation Discussion and Analysis
| | | | | | | | | Pay Element | | | | Metrics / Objectives | | | | | | | | |  | | | | | | 
| | RSUs | | | | Objective:Align management’s interests with those of shareholders and provide incentive for NEOs to remain with the Company for the long term. | | | | | | | | | Key Features:RSU awards are denominated in currency value and and delivered in shares with a vesting schedule of three years for NEOs. | | | | | | | | | Terms:RSUs are granted between May and August of each year. If a NEO leaves the Company for any reason, other than death, disability, or in some cases retirement, before the vesting date, they will forfeit their RSUs. Also, ifIf a NEO retires before their RSUs have vested, they must meet certain requirements in order for their RSUs to continue to vest based on the applicable vesting schedule. At the time of an employee’s retirement, in order to receive any unvested RSUs, the employee must at least be age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have seven or more years of service with the Company; or (iii) 68. | | | | | | | | | | | | | | | | | | PSUs | | | | Objective:Provide incentive for NEOs to remain with the Company for the long term and to align the NEO’s interests with those of shareholders. | | | | | | | | | Key Features:PSUs realize more value the higher the TSR ranks within the selected peer group and have no value if the share performance falls below the 5025th percentile among the peer group. | | | | | | | | | Terms:PSUs are granted to the NEOs in the second quarter of each year and are based on a three-year TSR. If a NEO leaves the Company for any reason, other than death, disability, or in some cases retirement, before the vesting date, they will forfeit their PSUs. Also, ifIf a NEO retires before his or her PSUs have vested, he or she must meet certain requirements in order for their PSUs to continue to vest based on the applicable vesting schedule. At the time of an employee’s retirement, in order to receive any unvested PSUs, the employee must at least be age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have seven or more years of service with the Company; or (iii) 68. |
| | | | | | | | | 2024 Proxy Statement | 49 |
| | | | | | | | | PAY ELEMENT | | | | METRICS / OBJECTIVES | | | | | | | | | | | | | | KED CPKEDCP
| | | | Objective:Increased exposure to the Company to the extent deferred compensation is tied to the value of Hecla stock, while also providing a tax deferral opportunity and encouraging financial planning. | | | | | | | | Key Features:Allows for the voluntary deferral of base salary, STIP pay, LTIP pay and equity award payouts. | | | | | | | | Terms:Employee must make election in the previous year to defer in the coming year. | | | | | | | | | | | | | | | | | | Benefits | | | | Objective:Attract and retain highly qualified executives. | | | | | | | | Key Features:Participation in retirement plans, partial company-paid health, dental and vision insurance, life insurance, and accidental death and dismemberment insurance. | | | | | | | | Terms:Same terms for all U.S.-based executives. Non-U.S. executives receive similar benefits. | | | | | | | | | | | |
Targeted Compensation Our executive compensation program – composed primarily of base salary, short- and long-term incentives, and equity awards – is intended to align the interests of our NEOs with the long-term interests of our shareholders. The program is designed to accomplish this by rewarding performance that results in an increase in the value of our shareholders’ investment in Hecla. We believe the proportion of at-risk, performance-based compensation should comprise a significant portion of executive pay. 20222023 Target Compensation Structure
The following table lists total 20222023 target compensation for the NEOs. | | | | | | | | | | | | | | | | | | | | | NEO | | Base
Salary
($) | | | STIP
Target Award
($) | | | LTIP
Target Award
($) | | | Equity(1)
($) | | | Total
($) | | | | | | | | Baker | | | 750,000 | | | | 937,500 | | | | 900,000 | | | | 1,300,000 | | | | 3,887,500 | | | | | | | | Roberts | | | 420,000 | | | | 420,000 | | | | 450,000 | | | | 500,000 | | | | 1,790,000 | | | | | | | | Lawlar | | | 330,000 | | | | 330,000 | | | | 315,000 | | | | 325,000 | | | | 1,300,000 | | | | | | | | Clary | | | 300,000 | | | | 300,000 | | | | 297,000 | | | | 300,000 | | | | 1,197,000 | | | | | | | | Brown | | | 300,000 | | | | 210,000 | | | | 283,500 | | | | 285,000 | | | | 1,078,500 | |
44 www.hecla.com
Compensation Discussion and Analysis
| | | | | | | | | | | | | | | | | | | | | NEO | | Base
Salary
($) | | | STIP
Target Award
($) | | | LTIP
Target Award
($) | | | Equity(1)
($) | | | Total
($) | | | | | | | | Baker | | | 825,000 | | | | 1,031,250 | | | | 990,000 | | | | 1,430,000 | | | | 4,276,250 | | | | | | | | Lawlar | | | 379,500 | | | | 379,500 | | | | 362,250 | | | | 373,750 | | | | 1,495,000 | | | | | | | | Clary | | | 345,000 | | | | 345,000 | | | | 341,550 | | | | 345,000 | | | | 1,376,550 | | | | | | | | Brown | | | 330,000 | | | | 231,000 | | | | 311,850 | | | | 313,500 | | | | 1,186,350 | | | | | | | | Sienko | | | 315,000 | | | | 220,500 | | | | 297,810 | | | | 299,115 | | | | 1,132,425 | | | | | | | | Roberts | | | 483,000 | | | | 483,000 | | | | 517,500 | | | | 575,000 | | | | 2,058,500 | |
| (1) | Consists of the target values for RSUs and PSUs as follows: |
| NEO | | RSUs
($) | | PSUs
($) | | Total Equity Award
Value
($) | | RSUs
($) | | | PSUs
($) | | | Total Equity Award
Value
($) | | | Baker | | | 650,000 | | | | 650,000 | | | | 1,300,000 | | Baker | | Baker | | Baker | | | | 715,000 | | | | 715,000 | | | | 1,430,000 | | | Lawlar | | Lawlar | | Lawlar | | Lawlar | | | | 224,225 | | | | 149,525 | | | | 373,750 | | | Clary | | Clary | | Clary | | Clary | | | | 207,000 | | | | 138,000 | | | | 345,000 | | | Brown | | Brown | | Brown | | Brown | | | | 187,000 | | | | 126,500 | | | | 313,500 | | | Sienko | | Sienko | | Sienko | | Sienko | | | | 178,515 | | | | 120,600 | | | | 299,115 | | | Roberts | | | 300,000 | | | | 200,000 | | | | 500,000 | | Lawlar | | | 195,000 | | | | 130,000 | | | | 325,000 | | Clary | | | 180,000 | | | | 120,000 | | | | 300,000 | | Brown | | | 170,000 | | | | 115,000 | | | | 285,000 | | Roberts | | Roberts | | Roberts | | | | 345,000 | | | | 230,000 | | | | 575,000 | |
| (2) | Number of shares awarded is determined by dividing the value of the RSUs and PSUs awarded by the closing price of our common stock on the NYSE on June 21, 20222023 ($4.43)5.05). |
| | | | | 50 | 2024 Proxy Statement | | | | |
Total Compensation Mix The mix of compensation for our CEO and other NEOs, which we believe is similar to our peer group, is shown below. | | | CEO Mix of Target Pay | | Other NEO Mix of Target Pay | | |  | |  |
Overview of our Compensation Decisions and Results for 20222023 Summary In 2022:2023: base salaries of our NEOs were increased an average of 12.1% in response to our peer group analysis;
the assessment of our STIP corporate performance was 135% of target with quantitative factors contributing 60% (target of 60%), qualitative factors contributing 35% (target of 20%) and discretionary factors contributing 40% (target of 20%);
the 2020-2022 LTIP resulted in a payout to the NEOs of $123.75 per unit; and
| • | | base salaries of our NEOs were increased an average of 11.6% in response to our peer group analysis; |
| • | | the assessment of our STIP corporate performance was 80% of target with quantitative factors contributing 17% (target of 55%), qualitative factors contributing 38% (target of 30%) and discretionary factors contributing 25% (target of 15%); |
| • | | the 2021-2023 LTIP resulted in a payout to the NEOs of $56.25 per unit compared to a target of $90 per unit, or 63% of target; and |
| • | | PSU performance against the peer group achieved above target results anddue to our TSR ranked 2ranking of 6ndth among the 21 peers in our group for the 2020-2022 period. As2021-2023 period earning a result,135% multiple. However, absolute TSR was negative, so the PSUs awarded in 2020 were issuedmultiple is limited to our NEOs.100%. See 2020-20222021-2023 PSU Results on page 5560 for further information. |
Base Salary Design. The committee targets NEO base salaries at approximatelyto be below the 50th percentile among Hecla’s peer group. An individual NEO’s base salary may be set above or below this range for that particular position, depending on the committee’s subjective assessment of the individual NEO’s experience, recent performance and expected future contribution, retention concerns, and the recommendation of our CEO (other than for himself). The committee does not use a quantitative formula to determine the base salary levels of any of the NEOs. The committee reviews NEO salaries at least annually as part of its overall competitive market assessment, as previously described. Typically, the committee makes annual salary adjustments in the middle of each calendar year, effective for the 12-month period from July 1 to June 30. 2023 Proxy Statement 45
Compensation Discussion and Analysis
Analysis and Decision. In June 2022,2023, the committee reviewed an analysis prepared by the Company’s human resources department. The Committee adjusted each of the NEOs’ compensation (increases from 5% to 15%) to better align their compensation levels to the current peer group medians for 2022.2023.
| | | | | | | | | 2024 Proxy Statement | 51 |
The following table shows annual base salaries for all NEOs from July 1, 20212022 through December 31, 2022:2023: Base Salary for NEOs July 1, 20212022 through December 31, 20222023 | NEO | | 7/1/21 thru 6/30/2022 Salary
($) | | 7/1/2022 thru 12/31/2022 Salary ($) | | 7/1/22 thru 6/30/2023 Salary
($) | | | 7/1/2023 thru 12/31/2023 Salary ($) | | | Baker | | | | 700,000 | | | | | 750,000 | | Baker | | Baker | | Baker | | | | 750,000 | | | | 825,000 | | | Roberts | | | | 380,000 | | | | | 420,000 | | | Lawlar | | Lawlar | | Lawlar | | Lawlar | | | | 265,000 | | | | | 330,000 | | | | 330,000 | | | | 379,500 | | | Clary | | | | 265,000 | | | | | 300,000 | | Clary | | Clary | | Clary | | | | 300,000 | | | | 345,000 | | | Brown | | | | 264,000 | | | | | 300,000 | | Brown | | Brown | | Brown | | | | 300,000 | | | | 330,000 | | | Sienko | | Sienko | | Sienko | | Sienko | | | | 300,000 | | | | 315,000 | | | Roberts* | | Roberts* | | Roberts* | | Roberts* | | | | 420,000 | | | | 483,000 | |
| * | Mr. Roberts retired from the Company on December 15, 2023. |
Incentive Plans STIP Consistent with Hecla’s pay-for-performance philosophy, substantially all salaried employees, including our NEOs, are eligible to participate in the STIP. In February 2022,2023, the committee reviewed and approved the proposed 20222023 STIP goals. In February 2023,2024, the committee reviewed the CompanyCompany’s 2023 performance, and approved a STIP pool based on the performance. Target Opportunities. Each NEO has a target STIP award expressed as a percentage of base salary. The target award is determined based on the following: market assessmentsanalysis and the committee’s market positioning policy;assessment; the individual NEO’s organization level, scope of responsibility and ability to impact Hecla’s overall performance; and internal equity among the NEOs. Actual awards are paid after the end of eachthe STIP performance period (usually end of March or beginning of April) and can range from 0% to 200% of the target awards, based on the committee’s assessment of the Company’s actual performance and the achievement of an individual NEO’s goals. Having a limit on our STIP awards reduces the likelihood of windfalls to executives and encourages financial discipline. It is also consistent with typical peer group practice. For 2022,2023, target STIP award opportunities for the NEOs were as follows: | | | | | | | | NEO | | Target STIP (% of base salary) | | | | Phillips S. Baker Jr.
| | | | 125 | % | | | Lauren M. RobertsLawlar
| | | | 100 | % | | | Russell D. LawlarClary
| | | | 100 | % | | | Michael L. ClaryBrown
| | | 70 | % | | | Sienko | | | 70 | % | | | Roberts* | | | 100 | % |
| * | | Robert D. BrownMr. Roberts retired from the Company on December 15, 2023.
| | | | 70 | % |
Performance Measures and Components. Our management develops proposed targets and goals for each Company performance measure based on a variety of factors, including historical corporate performance, internal budgets, forecasts and growth targets, market expectations and strategic objectives. The committee reviews the targets and goals, and then creates a performance-based compensation strategy consistent with shareholder interests. The committee also believes incentive compensation targets should be established to drive real and sustainable improvements in operating performance and the strategic position of the Company. 46 www.hecla.com
Compensation Discussion and Analysis
| | | | | 52 | 2024 Proxy Statement | | | | |
The STIP includes the following components and relative weights: | • | | quantitative corporate performance factors (measured from January to December) comprising 55% of the targeted award; |
quantitative corporate performance factors (measured from January to December) comprising 60% of the targeted award;
| • | | qualitative goals (measured from February 2023 to February 2024) comprising 30% of the targeted award; and |
qualitative goals (measured from February 2022 to February 2023) comprising 20% of the targeted award; and
a discretionary factor (measured from February 2022 to February 2023) as determined by the committee comprising 20% of the targeted award.
| • | | a discretionary factor (measured from February 2023 to February 2024) as determined by the committee comprising 15% of the targeted award. |
Each component can achieve two times the target percentage, with the maximum total payout limited to two times the total target award level (200%). Quantitative Corporate Performance Factors. For 2022,2023, the quantitative corporate performance factors under the STIP were divided into four factors (including weighting): production (15%(20%), Adjusted EBITDA less mine site capital (20%), Exploration (10%), and ESG (15%(5%). The quantitative goals comprise 55% of the targeted STIP and can reach a maximum of 110%. 20222023 Production Metrics
| | | | | | | | | | | | | 2022 Production in Silver Equivalent Ounces (includes all metals) | | | | | Production Result | | | | | Factor Value | | | | | | | | | 105% | | | Maximum | | | | 30 | % | | | | | | | | | 100% | | | Target | | | | 15 | % | | | | | | | | | <94.7% | | | Minimum | | | | 0 | % | | | | |
| | | | | | | | | | | Production Result | | 2023 Production in Silver Equivalent Ounces (includes all metals) | | | | | Factor Value | | | | | | 50M | | | | | Maximum | | | | 40 | % | | | | | 47.5M | | | | | Target | | | | 20 | % | | | | | <42.75M | | | | | Minimum | | | | 0 | % |
The production factor converts gold, lead, and zinc to silver equivalent at ratios of 82.5 oz. silver to 1 oz. gold, 22.022 lbs. lead, and 17.017 lbs. of zinc. We exceeded the budgeted production in silver, but fell slightly behind for gold, lead, and zinc. The combined metal production results were approximately 98% of budget. We converted gold, lead, and zinc to equivalent silver ounces at year-end actual prices. In summary, 2022 was a good year for Hecla. We had good production despite underperformancePartially because of the fire at our Casa Berardi Mine. Production at our Greens Creek Mine was strong, and the Lucky Friday Mine produced more silver ounces thanmine, fires in Quebec, and weather events at any time in the past 20 years. Both our Greens Creek, Minethe combined metal production results were approximately 79% of budget. Our 2023 production fell below the minimum at 37.4 AgEq ounces and the Lucky Friday Mine achieved record mill throughput in 2022. The 2022 production goals resulted in 98% of the target level, and a factor value of 10.5%0%. 20222023 Adjusted EBITDA Less Capital Metrics
| | | | | | | | | | | | | | | | | | | | | | | | | | | Factor Value | | | | | | | | | $180 mm130M | | | | | Maximum | | | | 40 | % | | | | | | | | | $90 mm70M | | | | | Target | | | | 20 | % | | | | | $55M | | | | | <$60 mm
| | | Minimum | | | | 0 | % | | | | |
The Adjusted EBITDA less capital goal measures the cash generation of the Company. The Adjusted EBITDA less capital target was $90 million.$70 million4(6) Maximum payout would have been achieved if Adjusted EBITDA less capital was at least $180$130 million. There would have been no payout if For the same reasons as production and less contribution from Keno Hill, Adjusted EBITDA was less than threshold. Adjusted EBITDA less capital was less than $60 million. Actual adjusted EBITDA less capital was $65.0($31) million, which is betweenbelow the minimum and target levels. The Adjusted EBITDA less capital metric resulted in a 3.5% factor value.value of 0%. Exploration Metrics The 20222023 exploration program was a three-parttwo-part goal: (1) adding reserves (5%), and (2) adding resources to non-operating properties, and (3) drilling new exploration targets.(5%). Minimum was set at maintaining both reserves at Greens Creek and Keno Hill and maintaining resources across the Company. Target was set at maintaining reserves across the Company and testing 16 drill targets. Targetadding 10M AgEq ounces to resources. Maximum was set at adding 15M AgEq ounces to reserves, 10Mand 20M AgEq ounces to resources,resources. During 2023, our reserves decreased 34.5M AgEq ounces, and testing 22 drill targets. Maximum was set at adding 45Mwe added 95M AgEq ounces to resources. We achieved threshold in reserves 30M AgEq ounces to resources, and testing 26 drill targets. If minimum was met for all three components, thenbut were below target at 4%. However, we exceeded the maximum payout can be earned.for additional resources, which resulted in 2X target or 10%. The individual component with the highest payout will be used to calculate overall payout. Thecombined exploration factor value is targeted at 10% and can go as high as 20%was 14%. Failure to achieve threshold results in zero payout.
4(6) | Adjusted EBITDA less capital is a non-GAAP measurement. See Appendix A for a reconciliation to GAAP. |
2023 Proxy Statement 47
Compensation Discussion and Analysis
In 2022, we added 41M AgEq ounces to reserves, which achieved between target and maximum; we added 54.5M AgEq ounces to the resources from non-operating properties, which exceeded the maximum threshold, and we tested 26 drill targets which achieves the maximum threshold.
| | | | | | | | | 2024 Proxy Statement | 53 |
As a result, the Exploration goal achieved 20% of target.ESG Metrics
Environmental, Social and Governance (“ESG”) MetricsAIFR
The final quantitative goals are related to ESG metrics with fourthree components. The first wasis a safety goal that focused on advancing an 8-year trend of reducing our AIFR. The second was an environmental goal focused on reducing our diesel fuel per silver ounce produced. The third goal was focused on increasing our ESG score, and the final goal related to diversity among our management and professional staff. Each of these four goals was targeted at 3.75% each. AIFR
The AIFR targetwhich was set at a 5%2% reduction from theour three-year3-year trailing average. Hecla’s year end 2021average, or an AIFR of 1.274%. Our three-yearyear-end 2023 3-year trailing average was 1.43. Minimum,1.30. Threshold, Target, and Maximum rates were 1.431.30 (0% reduction), 1.39 (2.5%1.274 (2% reduction), and 1.36 (5%1.25 (4% reduction), respectively. Hecla’s actual AIFR for 20222023 was 1.22%,1.45, which was a reductionan increase of 14.6%11.5% and resulted in a factor value of 7.5%0%.
| Reduction in AIFR | | | | | Factor Value | | | | Reduction in AIFR | | | | | Factor Value | | | 5% | | | Maximum | | | | 7.5 | % | | | 5% | | | | | | Maximum | | | | 7.5 | % | | 2.5% | | | Target | | | | 3.75 | % | | | 2.5% | | | | | | Target | | | | 3.75 | % | | 0% | | | Minimum | | | | 0 | % | | | 0% | | | | | | Minimum | | | | 0 | % |
DecreaseIncrease in GHG Emissions Per Revenue DollarESG Scores
The purpose of this goal iswas to maintain or improve Hecla’s Scope 1 and 2 Greenhouse Gas (“GHG”) equivalent emissions. The emissions were summarized at year-end 2022 on a GHG emissions intensity (total GHG tonnes*1000/US$ Revenue) basis. The targetthe ESG scores as provided by Sustainalytics. Target was set at the lowest quartile GHG intensity score amongstmaintaining our industry subgroups, while a GHG intensity score in the lowest2022 decile ranking as compared to our industry subgroupsubgroup. An increase of one decile would beresult in the maximum payout. Scoring below the median GHG intensity subgroup scoringFailing to maintain our existing decile ranking would result in zero payout. We achieved a ranking within the lowestmaintained our decile among peers in the industry subgroup. The result issubgroup, which resulted in a factor value of 7.5%1.5%. | | | | | | | | | | | | | | | | | | | Decrease in GHG Emissions ESG Score Improvement
| | | | | | | Factor Value | | | | | | | | | Lowest Decile | | | | | Maximum | | | | 7.53 | % | | | | | | | | | Lowest Quartile | | | | | Target | | | | 3.751.5 | % | | | | | Below Median | | | | | Minimum | | | | 0 | % | | | | |
Increase in ESG Scores
The purpose of this goal was to improve the ESG scores as provided by Sustainalytics. The scores were summarized at year-end 2022 and compared to the ESG scores of the Precious Metals Mining Peer Group. Target was set as an improvement in total ESG score by one quartile against our industry subgroup, an increase by two quartiles would be the maximum payout. Failing to climb at least one quartile would result in zero payout. We achieved a one quartile improvement in ESG scores, resulting in a factor value of 3.5%.
| | | | | | | | | | | | | ESG Score Improvement
| | | | | Factor Value | | | | | | | | | 2 Quartile improvement
| | | Maximum | | | | 7.5 | % | | | | | | | | | 1 Quartile improvement
| | | Target | | | | 3.75 | % | | | | | No improvement
| | | Minimum | | | | 0 | % | | | | |
48 www.hecla.com
Compensation Discussion and Analysis
Diversity of Management and Professional Staff The purpose of this goal is to increase the numberratio of femalewomen leaders within our management and senior professional staff. An increase of 5% was established as target and would result in a factor value of 1.5%, and an increase of 10% would be the maximum. Minimummaximum, or a factor value of 3%. The minimum was set at no increase and would result in a zero payout. In 2022,2023, we added 7 female leaders andincreased our ratio of women to men professionals to the 64 we had in 2021. Thisby 4.93%, which resulted in an increase of 10.9%, and a factor value of 7.5%1.5%. | Increase in Diversity | | | | | Factor Value | | | | | | | | | Factor Value | | | 10% | | | Maximum | | | | 7.5 | % | | | 10% | | | | | | Maximum | | | | 3 | % | | 5% | | | Target | | | | 3.75 | % | | | 5% | | | | | | Target | | | | 1.5 | % | | 0% | | | Minimum | | | | 0 | % | | | 0% | | | | | | Minimum | | | | 0 | % |
Qualitative Corporate Performance Factors. In addition to quantitative corporate performance factors, our STIP has a component that is based on qualitative goals relating not only to Hecla as a whole, but also to each NEO. This component is targeted to account for 20%30% of the overall potential STIP award but can account for 0% to 40%60% of the target award. Qualitative objectives for NEOs are over two hundred initiatives and tasks related to most aspects of Hecla’s business including, but not limited to: (i) safety and health, (ii) environmental, tailings, and permitting, (iii) sustainability, (iv) technical services, (v) operations, (vi) financial/treasury/accounting/tax, (vii) investor relations, (viii) human resources, (ix) information technology, (x) internal affairs, (xi) governmental affairs, (xii) closed operations, (xiii) mine life extension, exploration, and reserve growth, (xiv) corporate development, (xv) legal, and (xvi) board. We met or exceededA majority of the qualitative goals were reached, but more importantly, many of the key qualitativestrategic operational goals and made substantial progress towards others in 2022.were successful. The committee assessed qualitative performance at 35%38%. The committee based its assessment on more than two hundred goals and initiatives, and the following are some that were achieved:
| • | | negotiated and signed a six-year agreement with the United Steelworkers at our Lucky Friday Mine while maintaining a strong working relationship;Greens Creek successfully reduced power costs;
|
| • | | Greens Creek substantially reduced dust from the tailings facility; |
finalized plan for permit extensions at San Sebastian;
held an investor day, highlighting the Lucky Friday Mine’s new UCB mining method;
advanced work on the flotation recovery enhancement concept;
established effective ore production and modeling reconciliation procedures at the Lucky Friday Mine;
| | | | | 54 | 2024 Proxy Statement | | | | |
| • | | Completed the acquisition of ATAC Resources that has significant gold resources; |
published the 2021 Sustainability Report before our 2022 Annual Shareholder Meeting; and
| • | | Casa Berardi successfully insourced much of the surface mining at a lower cost than originally planned; |
acquired Alexco Resource Corp. and the Keno Hill operations in the Yukon.
| • | | Casa Berardi changed the drill and blast contract saving $13 million over three years; and |
| • | | Investor relations program resulted in 8 of 10 analysts having buys with 2 holds. |
Discretionary Factors. The final component of our STIP is at the discretion of the committee (based on Company and individual performance) and it is targeted to account for 20%15% of the total STIP award but can account for 0% to 40%30% of the target award. For 2022,2023, the committee determined the discretionary factor performance value to be at 40%25%. The committee based its assessment primarily on the following significant performance results by Hecla in 2022:2023: | • | | following the impoundment failure at our Casa Berardi mine, management recognized the operating plan was not achievable and immediately initiated a program to change the plan that was well implemented; |
achieved
| • | | the team from our Lucky Friday mine and corporate have exceeded expectations of effort and results with a significantly safer operation, improved production, and a platform for success in 2024 and beyond at our Keno Hill Mine; |
| • | | following the fire at the Lucky Friday mine, the reconstruction was managed well, and the mine was brought back into production in January 2024; |
| • | | generated $75.5 million in net cash provided by operating activities; |
| • | | our Keno Hill Mine produced 1.5 million ounces of silver, with the Bermingham deposit achieving the highest mined tonnage in December, while initiating a safety action plan to build a strong operational foundation at the mine; |
| • | | developed an improved process of reviewing reserves during the year; |
| • | | at all sites, deployed Cynet Extended Detection Response platform to monitor network and endpoint activity; |
| • | | conducted National Institute of Science and Technology cybersecurity self-score evaluation, which set the stage for the 2024 cybersecurity roadmap; |
| • | | successfully managed high gold grade in silver concentrate, and exportation of Keno Hill concentrate; |
| • | | created Absolute Humidity Forecast dashboard to reduce dust events at Greens Creek; |
| • | | received a patent for our UCB mining method; and |
| • | | insurance proceeds obtained for the Lucky Friday shaft fire. |
Summary of 2023 STIP Results In summary, 2023 was a difficult year for Hecla, due in large part to two abnormal events that occurred that were largely outside of Hecla’s control. The first event was the failure of the impoundment at Casa Berardi, and the second highest TSR amongwas the fire that occurred in the #2 shaft at our peersLucky Friday mine. The impoundment failure contributed to the earlier than planned closure of the East mine, which significantly impacted gold production, and increased costs. Casa Berardi used the event to make some positive operational changes to improve efficiency at the mine, but regardless, the event precluded Casa Berardi from achieving its 2023 budgeted production and operating cash flow. Through the first six months of the year, the Lucky Friday mine performed very well. However, the shaft fire caused a shutdown of production for the 2020-2022 period; successfully refinanced the credit agreement with less security and better overall terms;
completed a company-wide Suicide Awareness training campaign;
scaled down our Nevada operations, while successfully placing key staff members into vacancies within the organization;
recovered $4.2 million in insurance proceeds from insurers;
negotiated the eliminationsecond half of the Keno Hillyear and resulted in elevated costs and lower than budgeted silver stream;
achieved significant progress in ESG reporting;
strong say on pay results (98% in favor), and favorable shareholder outreach;
consolidated volumes of concentrates from the Greens Creek Mine andproduction. The Lucky Friday Mine on ships to save on shipping costs;
our Greens Creek Mine set new daily, monthly, quarterly,mine fell below target in both production and yearly tonnage records through the mill;operating cash flow in 2023.
our San Sebastian operation was awarded the Mine Environmental and Sustainability Excellence Award;
had two Nevada employees selected for individual safety awards by the Nevada Mining Association; and
successfully repaired a large landslide and road washouts at our Greens Creek Mine due to inclement weather.
2023 Proxy Statement 49
Compensation Discussion and Analysis
Summary
| | | | | | | | | 2024 Proxy Statement | 55 |
In addition to these two events, our Keno Hill mine did not achieve budget levels for production or cash flow, and the safety performance was unacceptable. Changes to mine management were made in December, and operating results are improving, but overall performance for 2023 was below expectations. Our Greens Creek mine performed well over the course of 2022 STIP Results2023. Both Greens Creek and Lucky Friday had excellent safety results during 2023. | | | | | | | | | | | | | 2023 STIP Results | | Performance Value | | | | | | Quantitative | | | | | | | | | | | | | | Production | | | | 10.50 | % | | | | | | | | | Adjusted EBITDA less capital | | | | 3.50 | % | | | | | | | | | Exploration | | | | 20.014 | % | | | | | | | | | Environmental, Social & Governance | | | | 26.03 | % | | | | | | | | | • AIFR (7.5%(0%) | | | | | | | | | | | | | | • Decrease in GHG Emissions (7.5%) | | | | | | | | | | | • Increase in ESG Scores (3.5%(1.5%)
| | | | | | | | | | | | | • Diversity of Management and Professional Staff (7.5%(1.5%) | | | | | | | | | | | Qualitative | | | | 35.038 | % | | | | | | Discretionary | | | | 40.025 | % | | | | | | Total Performance Value | | | | 135.080 | % | | | | | |
NEO Year-end 20222023 Individual Performance. The STIP qualitative, quantitative, and discretionary factors resulted in a corporate performance that the committee concluded to be 135%80% of target. NEOs’ performance is based on a combination of corporate performance, individual goals, and the impact they have on shareholder value. The committee believes that our NEOs’ performance goals should support and help achieve the Company’s strategic objectives and be tied to their areas of responsibility. Individual performance goals for each NEO, except the CEO, were proposed by the CEO and reviewed and approved by the committee. After the end of the year, our CEO reviews each of the other NEO’s progress against their individual performance goals and makes a recommendation to the committee. When making its award determinations, the committee did not assign a specific weighting to any of the individual’s goals, but instead reviewed each NEO’s progress against their individual goals in the aggregate. The following is a summary description of the performance goal results for each of the NEOs for 2022,2023, except our CEO, who is discussed separately on the following page. | | | | | Mr. RobertsLawlar | | Year-end 20222023 Performance Results | | | | | • matched best Company AIFR; • achieved record mill throughput rates managed the insurance program and successfully worked to obtain insurance proceeds related to the 2023 fire at each operatingthe Lucky Friday mine;
• led an optimization program to position our managed working capital and debt facilities during the investment at Keno Hill and 6-month shutdown at the Lucky Friday Mine for record silver production in 2023;mine; and • successfully integrated the Keno Hill Mine into Hecla’s portfolio. worked with management at mine sites to ensure concentrate quality was within customer specifications. | | | Mr. LawlarClary | | Year-end 20222023 Performance Results | | | | | • refinanced improved network service and security at all operations; • increased the credit agreement and added new trading counterparties; • added new customers for Lucky Friday Mine concentrates;
• held analyst tour at the Lucky Friday Mine;ratio of female to male professionals; and
• structured the Alexco Resource purchase transaction to preserve tax attributes totaling approximately $297 million. enhanced recruiting programs at targeted universities. | | | Mr. ClaryBrown | | Year-end 20222023 Performance Results | | | | | • negotiated and signed a six-year labor agreement with the United Steel Workers; • created an improved college recruiting program;
• led a successful human capital integration following the acquisition of Alexco Resources; and
• streamlined the administrative process for the Hecla Charitable Foundation.
| | | Mr. Brown | | Year-end 2022 Performance Results | | | • managed the acquisition of Alexco Resources;ATAC Resources in the Yukon, Canada;
• negotiated the buyout of the silver stream previously encumbering the Keno Hill Mine; • instrumental in developing and advancing our ESG program; and
• successfully led the effort to achievemaintain net zero Scope 1 and Scope 2 CO2eCO2e emissions. | | | Mr. Sienko | | Year-end 2023 Performance Results | | | | | • resolved several regulator/litigation matters; • assisted in obtaining insurance proceeds; and • assisted in obtaining a U.S. patent on the UCB mining method. |
50 www.hecla.com
Compensation Discussion and Analysis
| | | | | 56 | 2024 Proxy Statement | | | | |
CEO Year-end 20222023 Performance. Under Mr. Baker’s leadership in 2022,2023, we achieved goodovercame significant operational challenges. Hecla reported the second largest silver reserves, largest gold resource, and second highest silver production results. Silverand revenues in our history despite the Lucky Friday mine losing five months of production atdue to a fire. An underground fire in an active mine is one of the most serious and potentially consequential challenges a mining company can face. Mr. Baker exhibited strong leadership during the event, combining both caution and urgency during extinguishment of the fire and subsequent rehabilitation of affected infrastructure. The mine returned to production in early January 2024. During 2023, our Greens Creek Mine was strong, and the Lucky Friday Mine produced more silver ounces than at any time in the past 20 years, while both Greens Creek and the Lucky Friday minesmine achieved record mill throughput in 2022. Hecla also acquired Alexco Resource in September 2022, putting the Company in a position to be the largest silver producer in Canada in upcoming years. The Company ended the year with a strong balance sheet with over $100and generated $157.3 million in cash flow from operations and added significantlyfree cash flow of $121.6 million. At Keno Hill, Mr. Baker responded to our reserves, endingunacceptable safety performance during mine ramp-up by instituting significant personnel changes to assure Hecla’s standard safety systems and practices were fully implemented. At Casa Berardi, results from the year withinitial transition to surface-only mining operations are exceeding expectations. Outside of Hecla, Mr. Baker continued his contributions to the highestindustry as Chairman of The Silver Institute, a non-profit international industry association representing companies across the breadth of the silver reserves in the Company’s history. Most importantly, Hecla achieved the third highest TSR among its peers in 2022.industry. The committee awarded Mr. Baker 175%90% of his targeted STIP award due to his leadership and the overall strong performance of the Company. The committee evaluated each NEO’s performance in managing his or hertheir functions, the progress he or she made towards his or hertheir individual goals and the Company’s goals as discussed above, andas well as the overall success of the Company in 2022.2023. The NEOs completed various goals during the year, andbut the overall performance of the Company exceeded expectations during 2022.2023. As a result, the committee determined each of the NEO’s performance under the STIP to be between 127%78% and 186%93% of target. 20222023 STIP Award Summary
Set forth in the table below is each NEO’s target award and actual award, which was paid in cash.cash or common stock at the election of the NEO. | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Base Salary
($) | | Base Salary
Factor
(%) | | Target
STIP
($) | | % to
Target(1)
(%) | | Actual
Award(2)
($) | | | | | | | Phillips S. Baker, Jr. | | | | 750,000 | | | | | 125 | | | | | 937,500 | | | | | 175 | | | | | 1,640,625 | | | | | | | | Lauren M. Roberts | | | | 420,000 | | | | | 100 | | | | | 420,000 | | | | | 130 | | | | | 546,000 | | | | | | | | Russell D. Lawlar | | | | 330,000 | | | | | 100 | | | | | 330,000 | | | | | 127 | | | | | 419,100 | | | | | | | | Michael L. Clary | | | | 300,000 | | | | | 100 | | | | | 300,000 | | | | | 175 | | | | | 525,000 | | | | | | | | Robert D. Brown | | | | 300,000 | | | | | 70 | | | | | 210,000 | | | | | 186 | * | | | | 390,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Name | | Base Salary
($) | | | Base Salary
Factor
(%) | | | Target
STIP
($) | | | % of
Target(1)
(%) | | | Cash
Award(2)
($) | | | Shares
Received
in Lieu of
Cash(3) (#) | | | | | | | | | Baker | | | 825,000 | | | | 125 | | | | 1,031,250 | | | | 90 | | | | 928,125 | | | | — | | | | | | | | | Lawlar | | | 379,500 | | | | 100 | | | | 379,500 | | | | 80 | | | | 303,600 | | | | 68,378 | | | | | | | | | Clary | | | 345,000 | | | | 100 | | | | 345,000 | | | | 85 | | | | 293,250 | | | | — | | | | | | | | | Brown | | | 330,000 | | | | 70 | | | | 231,000 | | | | 92.86 | | | | 214,500 | | | | 48,311 | | | | | | | | | Sienko | | | 315,000 | | | | 70 | | | | 220,500 | | | | 78.57 | | | | 173,250 | | | | 39,020 | | | | | | | | | Roberts(4) | | | 483,000 | | | | 100 | | | | 483,000 | | | | — | | | | — | | | | — | |
* | Rounded (actual = Brown, 185.71%)
|
| (1) | The percentages listed for each of the NEOs (other than Mr. Baker), generally include corporate achievement of goals and individual performance. |
| (2) | The amount reported in this column was paid in cash toor Hecla common stock, at the election of the NEO, and is included in the Summary Compensation Table for 20222023 on page 6167 under Non-Equity Incentive Plan Compensation. Messrs. Baker and Clary opted to take cash in lieu of common stock for their STIP awards. All other NEO’s took the common stock option. |
| (3) | Except for Messrs. Baker and Clary, all 2023 STIP awards were paid in Hecla common stock. Messrs. Baker and Clary elected to take the cash instead of common stock. The amount of shares was determined by dividing the cash value of the award by the closing price of the Company’s common stock on the NYSE on March 13, 2024 ($4.44). |
| (4) | Mr. Roberts retired on December 15, 2023, and was not eligible for the 2023 STIP. |
LTIP We use the LTIP to focus employees on meeting long-term (three-year) corporate performance goals. The LTIP is also designed to attract and retain employees in a highly competitive talent market.market for talent. The committee considers mining and general industry market practices, as well as the long-term objectives of the Company, when determining the terms and conditions of long-term incentive goals, such as resource additions, production, and cash flow generation. Under the LTIP, a new performance period begins each calendar year and runs for three years. The three-year performance period recognizes that some value-creating activities require a significant period of time to be implemented and for measurable results to accrue. Starting a new performance period each year also gives the committee flexibility to adjust for new business conditions, circumstances, or priorities in setting the performance metrics and goals for each three-year cycle. Performance units are assigned to each NEO at the beginning of each three-year period and provide the basis for the amount of awards made to each NEO under the LTIP. Performance units are designed to encourage management to deliver long-term value. Performance units reinforce Hecla’s
| | | | | | | | | 2024 Proxy Statement | 57 |
business strategy by clearly establishing our key performance elements (e.g., reserve growth, production growth, and cash flow) and the associated long-term performance objectives that must be met for us to be successful and create value for shareholders. LTIP awards are paid out in the first half of the year following the end of each performance period, upon approval by the committee. At the discretion of the committee, the payouts may be in the form of cash, common stock, or a combination of both. Summary of 2020-20222021-2023 LTIP. In March 2020,February 2021, the committee approved the 2020-20222021-2023 LTIP, which has a target value of $90 per unit and a maximum potential value of $525 per unit. The 2020-20222021-2023 LTIP consists of three performance goals, plus a TSR multiplier. Payout under the LTIP takes place in late March or early April of the year 2023 Proxy Statement 51
Compensation Discussion and Analysis
following the three-year LTIP period, upon approval by the committee. At the discretion of the committee, the payouts may be in the form of cash, equity, or a combination of both. The measured performance goals for the 2020-20222021-2023 LTIP were silver-equivalent reserve growth, production growth, and mine site operating cash flow.flow generation – as well as a positive or negative multiplier based on TSR. The committee concluded these goals were important for the following reasons: | • | | Silver equivalent reserve growth. Silver-equivalent reserve growth remains a fundamental value creator. We need to replace and add reserves to extend mine lives and grow production. This is critical to the achievement of our long-term success. In the context of this plan, reserves include the silver equivalent of gold but not base metals. Silver equivalent reserve and resource growth included gold converted to silver equivalent at a ratio of one ounce of gold to 87.570.0 ounces of silver. |
| • | | Production growth. One of the most important components of value creation is demonstrable production growth (includes silver and gold, but not base metals). The gold to silver ratio is set at 87.5.70.0. In order to incentivize consistent and sustained production growth, the performance value will be reduced by 10% for any year, within the three-year LTIP period when the production for the current year is lower than the production for the prior year. |
| • | | Mine site operating cash flow less capital. We endeavor to ensure that each operating site generates free cash flow, and this net cash contribution goal reflects that operating philosophy. The silver and gold costs per ounce, production and capital expenditures at each mine site were those contained in our long-range plan for the three-year period. This goal also includes the impact associated with any acquisitions (or dispositions) of operating mine sites. |
TSR is a key element of the LTIP because it provides a relative performance metric to our peers. This component of the LTIP is different than the other components in that the TSR serves as a multiplier (either positive or negative). This component insures alignment of the results of the other components with share performance. If our relative TSR performance is in the mid-range (7(9th – 914th), the multiplier is 100% of the value achieved by the other three components, and thus has no positive or negative affect on the unit value earned. If our relative TSR is in the top 6,8, the multiplier is positive, and thus would enhance the unit value because the relative TSR was strong. If our relative TSR is in the bottom six,9, the multiplier is negative. Ifnegative and would reduce the relative TSR is inoverall value earned through the top three, the TSR multiplier is 250%.three-unit value factors. Regardless of the unit value earned by the unit value factors, in the event the absolute TSR is negative, the multiplier is limited to no greater than 100% of the value earned by the unit value factors. In order to achieve maximum levels, we must maintain a positive TSR on an absolute basis. 2020-20222021-2023 LTIP Targets and Results
| | | | | | | | | | | | | Measured Performance Goal | | | | | Target Amount | | | | | Actual Amount | | | | Silver-equivalent reserve growth (includes only gold) | | | | | | 304 million AgEq | | | | | | 15.733.0 million AgEq | | | | Production growth | | | | | | 9084 million AgEq | | | | | | 91.978.0 million AgEq | | | | Mine site operating cash flow less capital | | | | | | $273775 million | | | | | | ($16.9)483) million | | | | TSR | | | | | | Median | | | | | | 90th percentileAbove Median |
Reserve Growth. GrowthDuring the first two years of the 2021-2023 Plan period, we had strong growth in the reserves, sufferedbut experienced a decrease in 2020 duereserves in part to an adjustment to the cutoff grade at our Greens Creek Mine, as well as the inability to engage in exploration drilling as a result of COVID-19 restrictions.third year. In 2021, reserves increased 40 million AgEq.35M AgEq ounces, largely due to drilling results. In 2022, reserves grew 27 million29M AgEq ounces primarily due to the acquisition of Keno Hill in the third quarter of 2022.Hill. In 2023, reserves decreased 30M AgEq ounces primarily due to operational changes at Casa Berardi. Over the three years, we replaced both production (92 million(78M AgEq) and reserves losses and increased our total reserve by 15.7 million33M AgEq ounces from the beginning reserve.balance. The reserve growth program added about 1 year of mine life. The additional 15.733 million AgEq ounces resulted in a payout of $20.50$56.25 per unit.
| | | | | 58 | 2024 Proxy Statement | | | | |
Production Growth. Production growth was abovelargely on target during 20202021 and 2021,2022, but below target in 2022, resulting2023 due to the underperformance at Keno Hill, fire at Lucky Friday, and East Mine closure at Casa Berardi. The 3-year summary resulted in 92the production of 78 million AgEq or 2% above target for the three-year term of the LTIP. However, because annual production decreased from 2020 to 2021, and from 2021 to 2022, by approximately one million AgEq ounces in each year, the unit value was reduced by 10% in each respective year.7% below target. The unit value after deductingfor the annual production declinecomponent was $29 per unit.$0. Cash Flow. Cash flows for each year of the three-year LTIP period were far below threshold. The reason for the below threshold result was primarily due to the fact that we useda combination of using fixed metals prices andbut actual expenditures in measuring performance during the LTIP period. Therefore, the plan was harmed by the effects of COVIDperiod, under producing at Casa Berardi, Lucky Friday, and inflation but did not recognize the benefits of increased metals prices.Keno Hill. The three-year mine site cash flow less capital was ($16.9 million).$483 million for the three-year period, but $292 million below target. The payoutunit value for the cash flow component was $0 per unit.$0. 52 www.hecla.com
Compensation Discussion and Analysis
TSR. Hecla’s relative TSR over the 3-yearthree-year LTIP period ranked 28ndth among the 2223 peer companies (inclusive of Hecla) orand earned a 250%135% multiple. However, because the absolute TSR over the three-year period was negative, according to the terms of the Plan, the multiplier is capped at 100% of the underlying unit value. The total unit value of $49.50, multiplied by 250% results in a total unit value of $123.75.for the 2021-2023 LTIP is $56.25 per unit. 2020-20222021-2023 LTIP Award Summary
The 2021-2023 LTIP achieved a payout of $56.25 per unit, which was $33.75, or 37% below target for the performance period. The following chart shows the number of performance units awarded in 20202021 to each NEO, the unit value achieved, the total amount of the award (number of units x $123.75$56.25 = total award value), and. The committee approved the amount2021-2023 LTIP awards be paid in the form of cash received.Hecla common stock. | | | | | | | | | | | | | | | | Name | | 2020-2022
Performance
Units
(#) | | Unit
Value
($) | | Total
Amount of Award ($) | | | | | Phillips S. Baker, Jr. | | | | 8,000 | | | | | 123.75 | | | | | 990,000 | | | | | | Lauren M. Roberts | | | | 4,000 | | | | | 123.75 | | | | | 495,000 | | | | | | Russell D. Lawlar | | | | 2,067 | (1) | | | | 123.75 | | | | | 255,791 | | | | | | Michael L. Clary | | | | 2,050 | | | | | 123.75 | | | | | 253,688 | | | | | | Robert D. Brown | | | | 3,000 | | | | | 123.75 | | | | | 371,250 | |
| | | | | | | | | | | | | | | | | Name | | 2021-2023
Performance
Units
(#) | | | Unit
Value
($) | | | Total
Amount of Award(1) ($) | | | Number of
Shares Received(2) (#) | | | | | | | Baker | | | 9,000 | | | | 56.25 | | | | 506,250 | | | | 114,020 | | | | | | | Lawlar | | | 3,000 | | | | 56.25 | | | | 168,750 | | | | 38,007 | | | | | | | Clary | | | 3,000 | | | | 56.25 | | | | 168,750 | | | | 38,007 | | | | | | | Brown | | | 3,000 | | | | 56.25 | | | | 168,750 | | | | 38,007 | | | | | | | Sienko | | | 3,000 | | | | 56.25 | | | | 168,750 | | | | 38,007 | | | | | | | Roberts(3) | | | 4,000 | | | | — | | | | — | | | | — | |
| (1) | The amount reported in this column was paid in equity to the NEO and is also reported (in its dollar value) in the Summary Compensation Table for 2023 on page 67 under “Non-Equity Incentive Plan Compensation.” |
| (2) | The equity of the 2021-2023 LTIP award was determined by dividing the cash value of the award by the closing price of the Company’s common stock on the NYSE on March 13, 2024 ($4.44). |
| (3) | Mr. Lawlar’s 2020-2022 LTIP units were prorated because heRoberts retired from the Company on December 15, 2023 and was not promoted to SVP – CFO until March 2021.eligible for the 2021-2023 LTIP award. |
Equity We have no program, plan, or practice to time the grant of stock-based awards relative to the release of material non-public information or other corporate events. All equity grants to executive officers are approved by the committee at regularly scheduled meetings or, in limited cases involving key recruits or promotions, by a special meeting or unanimous written consent. The grant date is the meeting date, or a fixed, future date specified at the time of the grant. Under the terms of our 2010 Stock Plan, the fair market value of any award is determined by the closing price of our common stock on the NYSE on the date of grant or a fixed, future date specified at the time of grant. In addition, the committee typically makes equity grants to NEOs in the first half of the year. RSUs RSUs are granted to the NEOs under the 2010 Stock Plan. RSUs are used to (i) retain our NEOs, and (ii) to align their interests with the long-term interests of our shareholders. The committee awarded RSUs to each NEO in June 2022.2023. The RSUs vest in three equal amounts with vesting dates of June 21, 2023,2024, June 21, 2024,2025, and June 21, 2025.2026. See Grants of Plan-Based Awards for 20222023 on page 63.69.
| | | | | | | | | 2024 Proxy Statement | 59 |
In December 2014, the committee amended the 2010 Stock Plan and KEDCP so that any RSUs vesting after 2014 would no longer be credited with dividend equivalents. In order to incentivize RSU recipients to continue working for the Company, RSU awards require both an age and years of service trigger in order to qualify for vesting of the RSUs as of the employee’s retirement. The 2010 Stock Plan provides that for purposes of the RSU awards, RSU recipients who retire under the Retirement Plan must be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have seven or more years of service with the Company; or (iii) 68, in order to receive their unvested RSUs after retirement. If one of the above requirements is met, the recipients will receive their RSUs on the applicable vesting dates. 2023 Proxy Statement 53
Compensation Discussion and Analysis
In 2022,2023, we granted RSUs to approximately 123162 employees under the 2010 Stock Plan, including the NEOs as follows: | | | | | | | | | | | NEO | | Value of RSUs
Units ($) | | Number of Shares(1) (#) | | | | Phillips S. Baker, Jr. | | | | 650,000 | | | | | 146,726 | | | | | Lauren M. Roberts | | | | 300,000 | | | | | 67,720 | | | | | Russell D. Lawlar | | | | 195,000 | | | | | 44,018 | | | | | Michael L. Clary | | | | 180,000 | | | | | 40,632 | | | | | Robert D. Brown | | | | 170,000 | | | | | 38,374 | |
| | | | | | | | | NEO | | Value of RSUs
Units ($) | | | Number of Shares(1) (#) | | | | | Baker | | | 715,000 | | | | 141,584 | | | | | Lawlar | | | 224,225 | | | | 44,401 | | | | | Clary | | | 207,000 | | | | 40,990 | | | | | Brown | | | 187,000 | | | | 37,030 | | | | | Sienko | | | 178,515 | | | | 35,350 | | | | | Roberts(2) | | | 345,000 | | | | 68,317 | |
| (1) | Number of shares was determined by dividing the value of the RSUs awarded by the closing price of our common stock on the NYSE on June 21, 20222023 ($4.43)5.05). |
| (2) | Mr. Roberts retired on December 15, 2023, and as a result, any remaining unvested restricted stock units were forfeited. |
PSUs We grant PSUs to certain executive officers, including our NEOs. The value of the awards is based on the ranking of the TSR performance of our common stock relative to the TSR performance of the common stock of a group of peer companies over a three-year measurement period. The number of shares to be issued is based on the target value of the awards divided by the share price at grant date. The compensation cost is measured using a Monte Carlo simulation to estimate their value at grant date. In June 2022,2023, the committee granted PSUs to our NEOs with the target values listed below. The value of these PSUs will be based on the TSR of our common stock for the three-year period from January 1, 2022,2023, through December 31, 2024,2025, based on the percentile rank listed below within a group of peer companies. | | | | | | | | | | | NEO | | Target Value of
PSUs ($) | | Number of Shares(1) (#) | | | | Phillips S. Baker, Jr. | | | | 650,000 | | | | | 146,726 | | | | | Lauren M. Roberts | | | | 200,000 | | | | | 45,146 | | | | | Russell D. Lawlar | | | | 130,000 | | | | | 29,345 | | | | | Michael L. Clary | | | | 120,000 | | | | | 27,088 | | | | | Robert D. Brown | | | | 115,000 | | | | | 25,959 | |
| | | | | | | | | NEO | | Target Value of
PSUs ($) | | | Number of Shares(1) (#) | | | | | Baker | | | 715,000 | | | | 141,584 | | | | | Lawlar | | | 149,525 | | | | 29,609 | | | | | Clary | | | 138,000 | | | | 27,327 | | | | | Brown | | | 126,500 | | | | 25,050 | | | | | Sienko | | | 120,600 | | | | 23,881 | | | | | Roberts(2) | | | 230,000 | | | | 45,545 | |
| (1) | Number of shares was determined by dividing the target value of the PSUs by the closing price of our common stock on the NYSE on June 21, 20222023 ($4.43)5.05). |
| (2) | Mr. Roberts retired on December 15, 2023 and as a result, any unvested PSUs were forfeited. |
| | | | Company TSR Rank Among Peers | | TSR Performance Multiplier | | | 5025th percentile
| | | | Threshold award at 50%25% of target | | | | 40th - 60th percentile | | | | Target award at grant value | | | | 100th percentile | | | | Maximum award at 200% of target |
| | | | | 60 | 2024 Proxy Statement | | | | |
If Hecla’s performance is below the 5025th percentile, the award is zero. If Hecla’s performance is between the 5040th and 10060th percentile, the award is at target. If Hecla’s performance is between the 60th and 100th percentiles, the award is prorated. For any award, the number of shares issued at the conclusion of the three-year performance period (December 31, 2024)2025), will be determined by using the share price on the date of original grant (June 21, 2022)2023) of $4.43.$5.05. Hecla’s TSR performance versus that of our peer group will be based on a comparison of the average closing share price over the last sixty (60) calendar days prior to January 1, 20222023 (the base price) with the average closing share price over the last sixty (60) calendar days of the three-year performance period to determine relative share value performance and ranking among peers. The industry peer group used for purposes of the 2022-20242023-2025 TSR PSUs discussed above is listed on page 39. 45. 54 www.hecla.com
Compensation Discussion and Analysis
2020-20222021-2023 PSU Results
In February 2023,2024, the committee certified the results of the PSUs granted in 20202021 to our executive officers. These PSUs had a three-year performance period ended December 31, 2022,2023, with vesting and payout based on the Company’s TSR compared to our TSR peer group (consisting of 21 companies)companies and funds) from January 1, 20202021 through December 31, 2022.2023. The following table shows the calculation of the PSU results at the end of the three-year performance period on December 31, 2022.2023. During this three-year performance period, Hecla ranked first6th among the 21 peer group companies based on TSR from 20202021 through 2022,2023, which resulted in a payout percentage of 200%175% of the executives’ targeted PSU award values. To determine the relative share performance, Hecla’s TSR performance versus that of TSR peer group companies was based on a comparison of the average closing share price over the last sixty (60) calendar days prior to January 1, 20202021 (the base price) with the average closing share price over the last sixty (60) calendar days of the three-year performance period (ended December 31, 2022)2023). The table below details the value of the PSUs based on the estimated outcome as of the date of grant. These values for the 20202021 PSUs are reflected in the applicable Grants of Plan-Based Awards for 20202021 table from our 20212022 Proxy Statement, and the realized value of the common stock received upon settlement of the awards on February 24, 2023.26, 2024. | Executive | | Target Number of
PSUs Granted in 2020 (#) | | Value of Awards
Reported as
Compensation in Year
of Grant (1) ($) | | Number of 2020 PSUs
Earned (#) | | Realized Value of
Awards (2) ($) | | Target Number of
PSUs Granted in 2021 (#) | | | Value of Awards
Reported as
Compensation in Year
of Grant(1) ($) | | Number of 2021 PSUs Earned (#) | | Realized Value of
Awards(2) ($) | | | Baker | | | 132,013 | | | | 81,848 | | | | 264,026 | | | | 1,314,849 | | Baker | | Baker | | Baker | | | | 63,452 | | | | 869,292 | | | | 111,041 | | | | 393,085 | | | Lawlar | | Lawlar | | Lawlar | | Lawlar | | | | 13,959 | | | | 191,238 | | | | 24,428 | | | | 86,475 | | | Clary | | Clary | | Clary | | Clary | | | | 13,959 | | | | — | (3) | | | 24,428 | | | | 86,475 | | | Brown | | Brown | | Brown | | Brown | | | | 13,325 | | | | 182,553 | | | | 23,319 | | | | 82,549 | | | Sienko | | Sienko | | Sienko | | Sienko | | | | 12,690 | | | | 173,853 | | | | 22,208 | | | | 78,616 | | | Roberts | | | 49,505 | | | | 30,693 | | | | 99,010 | | | | 493,070 | | Lawlar(3) | | | — | | | | — | | | | — | | | | — | | Clary(3) | | | — | | | | — | | | | — | | | | — | | Brown | | | 34,653 | | | | 21,485 | | | | 69,306 | | | | 345,144 | | Roberts | | Roberts | | Roberts | | | | 19,036 | | | | 260,793 | | | | — | (4) | | | — | |
| (1) | Consistent with the requirements of FASB ASC Topic 718, the value of PSUs is based on the estimated outcome as of the date of grant. In accordance with FASB ASC Topic 718, this result is based on a relative TSR result modeled using a Monte Carlo simulation. The amounts in this column reflect the aggregate grant date fair value of the PSUs for accounting purposes determined in accordance with SEC rules, and do not reflect the actual economic value that was realized by the NEO at the end of the relevant three-year performance period. |
| (2) | Reflects the closing price of our common stock on February 24, 202326, 2024 ($4.98)3.54), the date on which the executive’s received the shares underlying their 20202021-2023 PSUs. |
| (3) | Messrs. LawlarMr. Clary was not listed as an NEO in our 2022 Proxy Statement, so his PSU grant was not previously reported.
|
| (4) | Mr. Roberts retired on December 15, 2023, and Clary did not receive anyas a result, his 2021-2023 PSUs in 2020.were forfeited. |
Other Nonqualified Deferred Compensation Plan. We maintain the KEDCP, a nonqualified deferred compensation plan, under which participants may defer all or a portion of their annual base salary, performance-based compensation awarded under our STIP and LTIP, RSUs and PSUs granted under the 2010 Stock Plan. Participants may elect to have their deferred base salary, STIP (cash or common stock) or LTIP (cash or common stock) awards credited to an investment (cash award) or stock account (for stock awards only).
| | | | | | | | | 2024 Proxy Statement | 61 |
Deferred RSUs and PSUs may also be credited to a stock account. The deferral features promote alignment of the interests of participants with those of our shareholders. Investment accounts are credited monthly with an amount based on the prime rate for corporate borrowers. Participants receive distributions from their accounts only upon separation from service with us, a fixed date or schedule selected by the participant, death, disability, an unforeseeable emergency, or a change in control, as these events are defined under Section 409A of the Internal Revenue Code. The amounts deferred are unfunded and unsecured obligations of Hecla, receive no preferential standing, and are subject to the same risks as any of our other general obligations. Additional details about the KEDCP are described in the narrative accompanying the Nonqualified Deferred Compensation for 20222023 table on page 69.75. Benefits. We provide our employees with a benefits package that is designed to attract and retain the talent needed to manage Hecla. As part of that benefits package, most U.SU.S. salaried employees, including the U.S. NEOs, are eligible to participate in the Retirement Plan, health, vision, dental plans, PTO plans such as vacations and holidays, and our 401(k) plan, which includes matching contributions by Hecla of up to 6%, health, vision, dental coverage, and paid time off, including vacations and holidays.. Canadian 2023 Proxy Statement 55
Compensation Discussion and Analysis
NEOs are eligible to participate in a similar benefits package. NEOs are eligible to receive certain additional benefits, as described below. The committee intends for the type and value of such benefits offered to be competitive with general market practices. Other Qualified and Nonqualified Benefit Plans. Under the Final Average Salary Retirement Plan, which is a defined benefit plan, upon normal retirement, participants are eligible to receive a monthly benefit equal to a certain percentage of their final eligible Average Annual Earnings for each year of credited service. Participants in the Cash Balance Retirement Plan, which is a defined benefit plan, are eligible to take a lump sum distribution of their benefits. Additional details about the Retirement Plans are in the narrative accompanying the Pension Benefits table on page 67.73. Under the SERP, the amount of any benefits not payable under the Retirement Plan because of the limitations imposed by the Internal Revenue Code and/or the Employee Retirement Income Security Act (“ERISA”), and certain reductions of benefits, if any, due to a deferral of salary made under our KEDCP, may be paid out of our general funds, or a rabbi trust,Rabbi Trust, to employees who are adversely affected. The Retirement Plan and SERP definedefined eligible earnings for purposes of the plans to include base salary plus any other cash incentives up until July 1, 2013, after which only base salary plus one-half of STIP compensation is included (no LTIP compensation is included). Personal Benefits. We do not provide company-paid cars, country club memberships, or other similar perquisites to our executives. The only material personal benefit provided by Hecla is a relocation benefit, which is offered as needed to meet specific recruitment needs. Stock Ownership Guidelines for NEOs We believe that it is important to encourage our executive officers to hold a material amount of our common stock and to link their long-term economic interest directly to that of our shareholders. To achieve this goal, in June 2012, the committee and Board established stock ownership guidelines for the Company’s senior management. The guidelines for the CEO are six times base salary, and for the other executive officers, two times base salary. These guidelines must be achieved by the later of (i) June 2017 or (ii) five5 years after the executive officer is hired or promoted to such position. Unvested RSUs and shares held directly are considered owned for purposes of the guidelines. If an executive officer becomes subject to a greater ownership amount due to a promotion or an increase in base salary, they must meet the higher ownership requirement within three years. Because of fluctuations in the Company’s stock price, in February 2016, the committee and the Board amended the stock ownership guidelines to provide a valuation methodology that consists of valuing the shares held by using the average closing price of the Company’s common stock on the NYSE for the previous calendar year. Because share prices of all companies are subject to market volatility, the Board believes that it would be unfair to require an executive to buy more shares simply because Hecla’s stock price drops. In the event there is a significant decline in Hecla’s stock price that causes an executive’s holdings to fall below the applicable threshold, the executive will not be required to purchase additional shares to meet the threshold, but they generally may not sell or transfer any shares until the threshold has again been achieved. With the exception of Mr. Lawlar, who was appointed SVP – CFO onis not yet required to meet the minimum shareholding requirements due to assuming his current role in March 1, 2021, as of December 31, 2022,2023, all other NEOs metmeet the guidelines. In the calculations for our NEOs, we include shares directly held, shares held in their 401(k) account, and unvested RSUs. We do not include unexercised stock options or unvested performance-based shares. Additional information regarding shares held by our NEOs is included in the Security Ownership of Certain Beneficial Owners and Management table on page 82.88.
| | | | | 62 | 2024 Proxy Statement | | | | |
Clawback Policy In February 2013, the committee adopted aAugust 2023, we amended our clawback policy to comply with respectthe new SEC and NYSE rules. Under our clawback policy, in the event of an accounting restatement, the Company will reasonably promptly seek to recover erroneously awarded incentive awards tocompensation from executive officers. The policy provides that inA finding of misconduct by such executive officers, or a finding of responsibility for any accounting error leading to an accounting restatement, shall not be a requirement for seeking recovery of the erroneously awarded compensation. In the event of a restatement of our financial results as a result of material non-compliance with financial reporting requirements, the Board will review incentive compensation that was paid to our current and former executive officers under the Company’s STIP and LTIP (or any successor plans), based solely on the achievement of specific corporate financial goals (“Incentive Award”) during the period ofthree completed fiscal years immediately preceding the restatement.accounting restatement date. If any Incentive Award would have been lower had it been calculated based on the Company’s restated financial results, the Board will, as andunless determined to the extent it deems appropriate, including with respect to intent 56 www.hecla.com
Compensation Discussion and Analysis
or level of culpability of the relevant individual(s),be impracticable, seek to recover from any executive officer, any portion of an Incentive Award paid in excess of what would have been paid based on the restated financial results.
The policy does not apply in any situation where a restatement is not the result of material non-compliance with financial reporting requirements, such as any restatement due to a change in applicable accounting rules, standards or interpretations, a change in segment designations or the discontinuance of an operation. In December 2015, the committee amended each of our incentive plans (STIP, LTIP, KEDCP, and 2010 Stock Plan) to include a clawback provision consistent with the clawback policy described above.
We intend to amend the clawback policy in 2023 to comply with new SEC and NYSE rules.
Insider Trading Policy Our insider trading policy prohibits the Company, all directors, executive officers (as defined under Section 16 of the Exchange Act) and certain other employees designated as insiders from purchasing or selling any Company securities three weeks before through two days after the public release of any of our periodic results (including the filing of any Form 10-Q or Form 10-K),. That same group, including all, not just certain employees are prohibited by the same policy, from purchasing or selling any Company securities at any other time during the year while in possession of material non-public information about the Company. In addition, directors and officers are prohibited from short-term trading, short sales, options trading, trading on margin, hedging or pledging any securities of the Company. We believe our insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to Hecla. Change in Control Agreements We have entered into change in control agreements (“CIC Agreements”) with each of our NEOs. Under the terms of our CIC Agreements, the CEO and the other NEOs are entitled to payments and benefits upon the occurrence of specified events, including termination of employment (with or without cause) following a change in control of the Company. The specific terms of these arrangements, as well as an estimate of the compensation that would have been payable had they been triggered as of calendar year-end, are described in detail in the section titled Potential Payments Upon Termination or Change in Control on page 70.76. The committee believes that these CIC Agreements are important for a number of reasons, including providing reasonable compensation opportunities in the unique circumstances of a change in control that are not provided by other elements of our compensation program. Further, change in control benefits, if structured appropriately, serve to minimize the distraction caused by a potential transaction and reduce the risk that key executives will leave Hecla before a transaction closes. The committee also believes that these agreements motivate the executives to make decisions that are in the best interests of our shareholders in the event of a pending change in control. These agreements provide executives with the necessary job stability and financial security during a change in control transaction and the subsequent period of uncertainty to help them stay focused on managing Hecla rather than on their own personal employment situation. The committee believes that all these objectives (i) serve our shareholders’ interests, (ii) are an essential component of the executive compensation program and, (iii) are necessary to attract and retain senior talent in the highly competitive talent market in which we compete. The change in control provisions were developed by the Company and the committee based on market and industry competitive practices. The Company and the committee periodically review the benefits provided under the CIC Agreements to ensure that they serve our interests in retaining our key executives, are consistent with market and industry practice, and are reasonable.
| | | | | | | | | 2024 Proxy Statement | 63 |
Tax and Accounting Considerations Our compensation programs are affected by each of the following: Accounting for Stock-Based Compensation. We consider certain requirements of GAAP in determining changes to policies and practices for our stock-based compensation programs. Section 162(m) of the Internal Revenue Code. Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code Section 162(m)”), generally provides that compensation in excess of $1 million paid to the CEO, Chief Financial Officer, and certain other employees, including NEOs (“covered employees”), of a public company will not be deductible for U.S. federal income tax purposes. 2023 Proxy Statement 57
Compensation Discussion and Analysis
Our primary objective in designing and administering our compensation policies is to support and encourage the achievement of our strategic goals and to enhance long-term shareholder value. We also believe that it is important to preserve flexibility in administering compensation programs. For these and other reasons, the committee has determined that it will not necessarily seek to limit executive compensation to the amount that would be fully deductible under Code Section 162(m). The committee will continue to monitor developments and assess alternatives for managing the deductibility of compensation payments and benefits to the extent reasonably practicable, as determined by the committee to be consistent with our compensation policies and in the best interests of the Company and our shareholders. Section 409A of the Internal Revenue Code. Section 409A imposes additional significant taxes in the event that an executive officer or director receives “deferred compensation” that does not satisfy the requirements of Section 409A. Our plans are intended to be exempt from, or comply with, Section 409A. 58 www.hecla.com
COMPENSATION RISK ANALYSISCompensation Risk Analysis
The committee has engaged in a thorough risk analysis of our compensation plans, programs, policies, and practices for all employees. This includes advice from the Company’s SVPSenior Vice President – CAOChief Administrative Officer describing the executive compensation program, and describing risk mitigation characteristics, if any, of the Company’s short- and long-term incentive programs. For the following reasons, the committee believes that the design of our compensation programs, the governance of our programs, and our risk oversight process guard against imprudent risk taking that could have a material adverse effect on the Company. Compensation Program Design Protections | • | | our base pay programs consist of competitive salaries that provide a fixed level of income on a regular basis. This mitigates incentives on the part of our executives and employees to take unnecessary or imprudent risks; |
Our base pay programs consist of competitive salaries that provide a fixed level of income on a regular basis. This mitigates incentives on the part of our executives and employees to take unnecessary or imprudent risks.
| • | | the Board reviews the Company’s strategic plan and long-term financial and operational plans, and approves the capital budget, which serve as the basis for setting short- and long-term incentive goals. Goals are intended to drive shareholder value and are set relative to the approved budget, historical and future expected performance, and a reasonable amount of stretch so they do not encourage imprudent risk taking; |
The Board reviews the Company’s strategic plan and long-term financial and operational plans, and approves the capital budget, that serve as the basis for setting short- and long-term incentive goals. Goals are intended to drive shareholder value and are set relative to the approved budget, historical and future expected performance, and a reasonable amount of stretch so they do not encourage imprudent risk taking.
| • | | our short-term incentive program provides variable pay opportunities for certain position levels based on achievement of multiple short-term performance goals. Goals are set at reasonable levels and payouts are managed as a percentage of pay; |
Our short-term incentive program provides variable pay opportunities for certain position levels based on achievement of multiple short-term performance goals. Goals are set at reasonable levels and payouts are managed as a percentage of pay.
| • | | the maximum awards that may be paid to executive officers under the short- and long-term incentive programs are capped, and the committee retains the discretion to reduce payouts under the plans; |
The maximum awards that may be paid to executive officers under the short- and long-term incentive programs are capped, and the committee retains the discretion to reduce payouts under the plans.
| • | | the largest amount of executive incentive compensation opportunity is generally tied to long-term incentive compensation that emphasizes sustained Company performance over time. This reduces the incentive for executives and other employees to take risks that might increase short-term compensation at the expense of longer-term Company results; and |
The largest amount of executive incentive compensation opportunity is generally tied to long-term incentive compensation that emphasizes sustained Company performance over time. This reduces the incentive for executives and other employees to take risks that might increase short-term compensation at the expense of longer-term Company results.
Equity awards have multi-year vesting, and RSU awards for executives are counted towards their stock ownership guidelines. This aligns the long-term interests of our NEOs and other executives with those of our shareholders and discourages taking short-term risks at the expense of longer-term performance.
| • | | equity awards have multi-year vesting, and RSU awards for executives are counted towards their stock ownership guidelines. This aligns the long-term interests of our NEOs and other executives with those of our shareholders and discourages taking short-term risks at the expense of longer-term performance. |
2023 Proxy Statement 59
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCompensation Committee Interlocks and Insider Participation
The members of the committee are set forth in the Compensation Committee Report. There are no members of the committee who were officers or employees of Hecla or any of our subsidiaries during the calendar year, formerly were officersyear. Mr. Johnson was an executive officer of Hecla or anyfrom 1983 to 1999, as well as for Hecla’s subsidiary, Hecla Limited. Mr. Johnson currently receives a monthly retirement and SERP payment from the Company for his years of our subsidiaries or had any relationship otherwiseservice. There are no other relationships requiring disclosure under the proxy rules promulgated by the SEC or the NYSE.
COMPENSATION COMMITTEE REPORTCompensation Committee Report
The committee has reviewed and discussed the CD&A with Hecla’s CEO and SVPSenior Vice President – CAO,Chief Administrative Officer, and based on its review and discussions, the committee recommended to the Board, and the Board has approved, the CD&A included in this Proxy Statement and incorporated by reference in Hecla’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. Respectfully submitted by The Compensation Committee of the Board of Directors Charles B. Stanley, Chair Catherine J. Boggs George R. Johnson 60 www.hecla.com
COMPENSATION OF NAMED EXECUTIVE OFFICERSCompensation Of Named
Executive Officers Summary Compensation Table for 20222023 The following compensation tables provide information regarding the compensation of our CEO, SVPSenior Vice President – CFO,Chief Financial Officer, and three other most highly compensated officers for the calendar year ended December 31, 2022,2023, determined in accordance with SEC rules. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary(1)
($) | | | Stock
Awards(2)
($) | | | Non-Equity
Incentive Plan
Compensation(3)
($) | | | Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(4)
($) | | | All Other
Compensation
($) | | | Total
($) | | .Phillips S. Baker, Jr. President and CEO | | | 2022 | | | | 722,917 | | | | 1,205,255 | (5) | | | 2,630,625 | | | | — | | | | 21,069 | (8) | | | 4,579,866 | | | | | 2021 | | | | 664,792 | | | | 1,370,005 | | | | 885,500 | | | | 824,973 | | | | 19,830 | | | | 3,765,100 | | | | | 2020 | | | | 635,000 | | | | 937,292 | | | | 1,970,300 | | | | 1,628,345 | | | | 19,571 | | | | 5,190,508 | | Lauren M. Roberts(6) Sr. Vice President and COO | | | 2022 | | | | 398,336 | | | | 470,849 | (5) | | | 1,041,000 | | | | 133,033 | | | | 21,069 | (8) | | | 2,064,287 | | | | | 2021 | | | | 380,000 | | | | 486,004 | | | | 418,000 | | | | 314,706 | | | | 19,830 | | | | 1,618,540 | | | | | 2020 | | | | 380,000 | | | | 511,878 | | | | 829,563 | | | | 275,046 | | | | 9,151 | | | | 2,005,638 | | Russell D. Lawlar Sr. Vice President and CFO | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | | | 294,792 | | | | 306,052 | (5) | | | 674,891 | | |
| —
|
| | | 20,818 | (8) | | | 1,296,553 | | | | | 2021 | | | | 245,209 | | | | 361,398 | | | | 185,500 | | | | 39,682 | | | | 19,270 | | | | 851,059 | | Michael L. Clary(9) Sr. Vice President and CAO | | | 2022 | | | | 281,042 | | | | 282,509 | (5) | | | 778,688 | | | | — | | | | 20,711 | (8) | | | 1,362,950 | | Robert D. Brown(10) Vice President – Corporate Develop. & Sustainability | | | 2022 | | | | 282,000 | | | | 268,235 | (5) | | | 761,250 | | | | — | (7) | | | 20,415 | (8) | | | 1,331,900 | | | | | 2021 | | | | 264,000 | | | | 342,705 | | | | 237,600 | | | | 73,393 | | | | 19,440 | | | | 937,138 | | | | | 2020 | | | | 264,000 | | | | 363,661 | | | | 404,280 | | | | 111,007 | | | | 19,065 | | | | 1,162,013 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary(1)
($) | | Stock
Awards(2)
($) | | Non-Equity
Incentive Plan
Compensation(3)
($) | | Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(4)
($) | | All Other
Compensation
($) | | Total ($) | | | | | | | | | Phillips S. Baker, Jr. CEO | | | | 2023 | | | | | 784,375 | | | | | 1,216,206 | (5) | | | | 1,434,375 | | | | | 685,029 | | | | | 22,569 | (8) | | | | 4,142,554 | | | | | | 2022 | | | | | 722,917 | | | | | 1,205,255 | | | | | 2,630,625 | | | | | — | | | | | 21,069 | | | | | 4,579,866 | | | | | | 2021 | | | | | 664,792 | | | | | 1,370,005 | | | | | 885,500 | | | | | 824,973 | | | | | 19,830 | | | | | 3,765,100 | | | | | | | | | | Russell D. Lawlar Senior Vice President – Chief Financial Officer | | | | 2023 | | | | | 352,688 | | | | | 329,041 | (5) | | | | 472,350 | | | | | 38,428 | | | | | 22,569 | (8) | | | | 1,215,076 | | | | | | 2022 | | | | | 294,792 | | | | | 306,052 | | | | | 674,891 | | | | | — | | | | | 20,818 | | | | | 1,296,553 | | | | | | 2021 | | | | | 245,209 | | | | | 361,398 | | | | | 185,500 | | | | | 39,682 | | | | | 19,270 | | | | | 851,059 | | | | | | | | | | Michael L. Clary(9) Senior Vice President – Chief Administrative Officer | | | | 2023 | | | | | 320,625 | | | | | 303,738 | (5) | | | | 462,000 | | | | | 1,353,530 | | | | | 22,463 | (8) | | | | 2,462,356 | | | | | | 2022 | | | | | 281,042 | | | | | 282,509 | | | | | 778,688 | | | | | — | | | | | 20,711 | | | | | 1,362,950 | | | | | | | | | | Robert D. Brown(10) Vice President – Corporate Development & Sustainability | | | | 2023 | | | | | 315,000 | | | | | 275,679 | (5) | | | | 383,250 | | | | | 86,114 | (6) | | | | 8,066 | (8) | | | | 1,068,109 | | | | | | 2022 | | | | | 282,000 | | | | | 268,235 | | | | | 761,250 | | | | | — | | | | | 20,415 | | | | | 1,331,900 | | | | | | 2021 | | | | | 264,000 | | | | | 342,705 | | | | | 237,600 | | | | | 73,393 | | | | | 19,440 | | | | | 937,138 | | | | | | | | | | David C. Sienko Vice President – General Counsel | | | | 2023 | | | | | 306,875 | | | | | 263,057 | (5) | | | | 342,000 | | | | | — | (7) | | | | 22,420 | (8) | | | | 934,352 | | | | | | 2022 | | | | | 281,042 | | | | | 268,235 | | | | | 671,250 | | | | | — | | | | | 20,711 | | | | | 1,241,238 | | | | | | 2021 | | | | | 265,000 | | | | | 323,999 | | | | | 214,650 | | | | | 43,798 | | | | | 19,389 | | | | | 866,836 | | | | | | | | | | Lauren M. Roberts Former Senior Vice President – Chief Operating Officer | | | | 2023 | | | | | 448,875 | | | | | 506,230 | (5) | | | | — | | | | | 287,623 | | | | | 29,999 | (8) | | | | 1,272,727 | | | | | | 2022 | | | | | 398,336 | | | | | 470,849 | | | | | 1,041,000 | | | | | 133,033 | | | | | 21,069 | | | | | 2,064,287 | | | | | | 2021 | | | | | 380,000 | | | | | 486,004 | | | | | 418,000 | | | | | 314,706 | | | | | 19,830 | | | | | 1,618,540 | |
| (1) | Salary amounts include base salary both earned and paid in cash during the calendar year listed. |
| (2) | Represents RSUs awarded, and PSUs granted in each of the calendar years for 2023, 2022 2021 and 2020.2021. The amounts represent the aggregate grant date fair value of the awards granted to each NEO computed in accordance with stock-based accounting rules (FASB ASC Topic 718). Assumptions used in the calculation of these amounts are included in Note 12 – Stockholders’ Equity to our calendar year 20212023 consolidated financial statements, which is included in our Annual Report on Form 10-K filed with the SEC on February 17, 2023 (the “Form 10-K”).15, 2024 RSUs generally vest in three substantially equal annual installments beginning on June 21 of the year following the date of grant. Consistent with the requirements of FASB ASC Topic 718, the value of PSUs is based on the estimated outcome as of the date of grant. In accordance with FASB ASC Topic 718, this result is based on a relative TSR result modeled using a Monte Carlo simulation. Please see the Grants of Plan-Based Awards for 20222023 table on page 6369 for more information about the awards granted in 2022.2023. The amounts in this column reflect the aggregate grant date fair value of the PSUs for accounting purposes determined in accordance with SEC rules and do not reflect the actual economic value that may be realized by the NEO at the end of a relevant three-year performance period. |
2023 Proxy Statement 61
Compensation of Named Executive Officers
| (3) | This column represents the performance payments awarded and earned by the NEOs for the calendar years 2023, 2022 2021 and 20202021 under our STIP and for the LTIP plan periods 2021-2023, 2020-2022, 2019-2021 and 2018-2020. All2019-2021. The 2021 STIP and 2022 STIP awards were paid in cash. The 2020-2022 LTIP awards were paid in cash. There was no payout for the 2019-2021 LTIP. At the election of the NEO, the award for the 2023 STIP was paid |
| | | | | 68 | 2024 Proxy Statement | | | | |
| either in cash or in common stock of the Company, and the 2021-2023 LTIP award was paid 100% in common stock of the Company. See 2023 STIP Award Summary table on page 56 for the amount of shares received by each NEO. The awards for each of the plan years are as follows: |
| Name | | Year | | | STIP
Award
($) | | | LTIP Plan
Period | | | LTIP
Units
(#) | | Unit
Value
($) | | | LTIP
Award
($) | | | Total STIP
and LTIP
($) | | | Year | | STIP
Award
($) | | LTIP Plan
Period | | LTIP
Units
(#) | | Unit
Value
($) | | LTIP
Award
($) | | Total STIP and LTIP
($) | | Baker | | Baker | | Baker | | Baker | | Baker | | | 2022 | | | | 1,640,625 | | | | 2020-2022 | | | | 8,000 | | | 123.75 | | | | 990,000 | | | | 2,630,625 | | | | | 2021 | | | | 885,500 | | | | 2019-2021 | | | | 10,000 | | | | — | | | | — | | | | 885,500 | | | | | 2020 | | | | 1,206,500 | | | | 2018-2020 | | | | 11,400 | | | 67.00 | | | | 763,800 | | | | 1,970,300 | | Roberts | | | 2022 | | | | 546,000 | | | | 2020-2022 | | | | 4,000 | | | 123.75 | | | | 495,000 | | | | 1,041,000 | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | | | 418,000 | | | | 2019-2021 | | | | 3,222 | (i) | | | — | | | | — | | | | 418,000 | | | | | 2020 | | | | 703,000 | | | | 2018-2020 | | | | 1,889 | (i) | | 67.00 | | | | 126,563 | | | | 829,563 | | Lawlar | | | 2022 | | | | 419,100 | | | | 2020-2022 | | | | 2,067 | (ii) | | 123.75 | | | | 255,791 | | | | 674,891 | | Lawlar | | Lawlar | | Lawlar | | Lawlar | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | | | 185,500 | | | | 2019-2021 | | | | 1,267 | (ii) | | | — | | | | — | | | | 185,500 | | Clary | | | 2022 | | | | 525,000 | | | | 2020-2022 | | | | 2,050 | | | 123.75 | | | | 253,688 | | | | 778,688 | | Clary | | Clary | | Clary | | Clary | | | | | | | | | | | | | | | | | | | Brown | | Brown | | Brown | | Brown | | Brown | | | 2022 | | | | 390,000 | | | | 2020-2022 | | | | 3,000 | | | 123.75 | | | | 371,250 | | | | 761,250 | | | | | 2021 | | | | 237,600 | | | | 2019-2021 | | | | 3,000 | | | | — | | | | — | | | | 237,600 | | | | | 2020 | | | | 203,280 | | | | 2018-2020 | | | | 3,000 | | | 67.00 | | | | 201,000 | | | | 404,280 | | | | | | | | | | | | | | | | | | | | | | | | | | | Sienko | | Sienko | | Sienko | | Sienko | | Sienko | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Roberts* | | Roberts* | | Roberts* | | Roberts* | | Roberts* | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (i)* | Mr. Robert’s 2018-2020Roberts retired on December 15, 2023, and 2019-2021 LTIP units were prorated because he joined the Company in August 2019. |
| (ii) | Mr. Lawlar’s 2019-2021 and 2020-2022 LTIP units were prorated becauseas a result, he was not appointed SVP – CFO until March 2021.eligible for the 2023 STIP or 2021-2023 LTIP awards.
|
| (4) | The amounts in this column for 20222023 are changes between December 31, 20212023 and December 31, 2022 in the actuarial present value of the accumulated pension benefits. Due to an increase in the discount rate used to value pension plan liabilities, the actuarial present value of these benefits declined in calendar year 2022 compared to 2021, except for Mr. Roberts. The aggregate decline in the present value of the accumulated pension benefit for the participating NEOs during calendar year 2022 was: Mr. Baker, ($1,851,675); Mr. Lawlar, ($39,556); Mr. Clary, ($406,485); and Mr. Brown, ($186,863). Mr. Roberts’ change in the actuarial present value of his accumulated pension benefits is offset due to the increased interest rate being less than the increase in his present value. Per SEC rules, we have shown zeroes in this column of the Summary Compensation Table for each of the NEOs (except for Mr. Roberts) for calendar year-end 2022 rather than negative amounts. |
| (5) | Includes: (i) RSUs granted to each NEO on June 21, 2022,2023, and (ii) PSUs awarded to each NEO on June 21, 2022.2023. See Grants of Plan-Based Awards for 20222023 table on page 6369 and PSUs on page 5459 for a description of the PSUs. |
| (6) | Mr. Roberts deferred the amount of $491,400 to the KEDCP in 2022. The amount reported in this table is the total amount of base salary and/or STIP and LTIP cash compensation he received before his deferrals. See Nonqualified Deferred Compensation for 2022 on page 69 for further information.
|
(7) | As a non-U.S. citizen, Mr. Brown is not a participant in the Retirement Plan, but he does participate in the SERP. In lieu of participation in the Retirement Plan, Mr. Brown is expected to receive a similar supplemental benefit as if he had participated in this plan. See Retirement Plan on page 6773 for a description of non-U.S. employee’s retirement benefits. |
| (7) | During 2023, Mr. Sienko became eligible for an early retirement under the Pension Plan. While Mr. Sienko earned more service time in 2023, the present value of his accumulated pension benefit decreased ($18,803) due to calculating the value of an early retirement as opposed to the value of an ordinary retirement at age 65. Per SEC rules, we have shown zero in this column of the Summary Compensation Table for Mr. Sienko for calendar year-end 2023 rather than his negative change in pension value. |
| (8) | Includes the following: |
| NEO | | Matching
401(k)
Contribution
($) | | Annual
Life
Insurance
Premium
($) | | Total
($) | | | Matching
401(k)
Contribution
($) | | Annual Life Insurance
Premium
($) | | Unused Vacation ($) | | | Total
($) | | | Baker | | | 18,300 | | | 2,769 | | | 21,069 | | Baker | | Baker | | Baker | | | | 19,800 | | | | 2,769 | | | | — | | | | 22,569 | | | Lawlar | | Lawlar | | Lawlar | | Lawlar | | | | 19,800 | | | | 2,769 | | | | — | | | | 22,569 | | | Clary | | Clary | | Clary | | Clary | | | | 19,800 | | | | 2,663 | | | | — | | | | 22,463 | | | Brown | | Brown | | Brown | | Brown | | | | 6,600 | (i) | | | 1,466 | (ii) | | | — | | | | 8,066 | | | Sienko | | Sienko | | Sienko | | Sienko | | | | 19,800 | | | | 2,620 | | | | — | | | | 22,420 | | | Roberts | | | 18,300 | | | 2,769 | | | 21,069 | | Lawlar | | | 18,300 | | | 2,518 | | | 20,818 | | Clary | | | 18,300 | | | 2,411 | | | 20,711 | | Brown | | | 18,300 | (i) | | 2,115 | (ii) | | 20,415 | | Roberts | | Roberts | | Roberts | | | | 19,800 | | | | 2,769 | | | | 7,430 | | | | 29,999 | |
| | (i) | This amount was paid to Mr. Brown in lieu of the 401(k) match. Canadian employees are excluded from participation in the 401(k) Plan. Mr. Brown is paid in Canadian funds. The amounts reported are in U.S. dollars based on the applicable exchange rates as reported by the Bank of Canada from time-to-time. |
| | (ii) | Life insurance premium is paid in Canadian funds. |
| | | | | | | | | 2024 Proxy Statement | 69 |
| (9) | Mr. Clary was appointed SVPSenior Vice President – CAOChief Administrative Officer in July 2021, but was not an NEO for calendar year-end2021. |
| (10) | Mr. Brown receives his compensation in Canadian funds. The amount reported for Mr. Brown is in U.S. dollars based on the applicable exchange rates as reported by the Bank of Canada from time-to-time during this time period. |
62 www.hecla.com
Compensation of Named Executive Officers
The following table shows all plan-based awards granted to the NEOs during 2022.2023. Grants of Plan-Based Awards for 20222023 | | | | | | Estimated Future Payouts
Under
Non-Equity Incentive Plan
Awards | | Estimated Future Payouts
Under Equity Incentive Plan
Awards | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) | | Grant
Date
Fair Value
of Stock
and
Option
Awards(1)
($) | | | | | Estimated Future Payouts
Under
Non-Equity Incentive Plan
Awards | | Estimated Future Payouts
Under Equity Incentive Plan
Awards | | All Other Stock
Awards:
Number of
Shares of
Stock or Units
(#) | | Grant Date
Fair Value of Stock and
Option
Awards(1)
($) | Name | | Grant
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | Grant
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | Phillips S. Baker, Jr. | | | | | | | | | | | | | | | | | | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | | | | | | | | | | | | | | | | | | | | RSUs(2) | | 6/21/22 | | | | | | | | | | | | | | | 146,726 | | | 649,996 | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | | PSUs(3) | | 6/21/22 | | | | | | | | | 73,363 | | | 146,726 | | | 293,452 | | | 146,726 | | | 555,259 | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | | LTIP(4) | | | | | — | | | 900,000 | | | 5,250,000 | | | | | | | | | | | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | | | | | — | | | | 990,000 | | | | 6,930,000 | | | | | | | | | | | | | STIP(5) | | | | | — | | | 937,500 | | | 1,875,000 | | | | | | | | | | | | Lauren M. Roberts | | | | | | | | | | | | | | | | | | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | | | | | — | | | | 1,031,250 | | | | 2,062,500 | | | | | | | | | | | | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | | | | | | | | | | | | | | | | | | | | RSUs(2) | | 6/21/22 | | | | | | | | | | | | | | | 67,720 | | | 300,000 | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | | PSUs(3) | | 6/21/22 | | | | | | | | | 22,573 | | | 45,146 | | | 90,292 | | | 45,146 | | | 170,849 | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | | LTIP(4) | | | | | — | | | 450,000 | | | 2,625,000 | | | | | | | | | | | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | | | | | — | | | | 362,250 | | | | 2,535,750 | | | | | | | | | | | | | STIP(5) | | | | | — | | | 420,000 | | | 840,000 | | | | | | | | | | | | Russell D. Lawlar | | | | | | | | | | | | | | | | | | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | | | | | — | | | | 379,500 | | | | 759,000 | | | | | | | | | | | | | Michael L. Clary | | Michael L. Clary | | Michael L. Clary | | Michael L. Clary | | Michael L. Clary | | | | | | | | | | | | | | | | | | | | | RSUs(2) | | 6/21/22 | | | | | | | | | | | | | | | 44,018 | | | 195,000 | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | | PSUs(3) | | 6/21/22 | | | | | | | | | 14,673 | | | 29,345 | | | 58,690 | | | 29,345 | | | 111,052 | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | | LTIP(4) | | | | | — | | | 315,000 | | | 1,837,500 | | | | | | | | | | | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | | | | | — | | | | 341,550 | | | | 2,390,850 | | | | | | | | | | | | | STIP(5) | | | | | — | | | 330,000 | | | 660,000 | | | | | | | | | | | | Michael L. Clary | | | | | | | | | | | | | | | | | | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | | | | | — | | | | 345,000 | | | | 690,000 | | | | | | | | | | | | | Robert D. Brown | | Robert D. Brown | | Robert D. Brown | | Robert D. Brown | | Robert D. Brown | | | | | | | | | | | | | | | | | | | | | RSUs(2) | | 6/21/22 | | | | | | | | | | | | | | | 40,632 | | | 180,000 | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | | PSUs(3) | | 6/21/22 | | | | | | | | | 13,544 | | | 27,088 | | | 54,176 | | | 27,088 | | | 102,509 | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | | LTIP(4) | | | | | — | | | 297,000 | | | 1,732,500 | | | | | | | | | | | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | | | | | — | | | | 311,850 | | | | 2,182,950 | | | | | | | | | | | | | STIP(5) | | | | | — | | | 300,000 | | | 600,000 | | | | | | | | | | | | Robert D. Brown | | | | | | | | | | | | | | | | | | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | | | | | — | | | | 231,000 | | | | 462,000 | | | | | | | | | | | | | David C. Sienko | | David C. Sienko | | David C. Sienko | | David C. Sienko | | David C. Sienko | | | | | | | | | | | | | | | | | | | | | RSUs(2) | | 6/21/22 | | | | | | | | | | | | | | | 38,374 | | | 169,997 | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | | PSUs(3) | | 6/21/22 | | | | | | | | | 12,980 | | | 25,959 | | | 51,918 | | | 25,959 | | | 98,238 | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | | LTIP(4) | | | | | — | | | 283,500 | | | 1,653,750 | | | | | | | | | | | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | | | | | — | | | | 297,810 | | | | 2,084,670 | | | | | | | | | | | | | STIP(5) | | | | | — | | | 210,000 | | | 420,000 | | | | | | | | | | | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | | | | | — | | | | 220,500 | | | | 441,000 | | | | | | | | | | | | | Lauren M. Roberts* | | Lauren M. Roberts* | | Lauren M. Roberts* | | Lauren M. Roberts* | | Lauren M. Roberts* | | | | | | | | | | | | | | | | | | | | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | RSUs(2) | | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | PSUs(3) | | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | LTIP(4) | | | | | | — | | | | 517,500 | | | | 3,622,500 | | | | | | | | | | | | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | STIP(5) | | | | | | — | | | | 483,000 | | | | 966,000 | | | | | | | | | | | |
| * | Mr. Roberts retired from Hecla on December 15, 2023. He is not eligible to receive any RSUs, PSUs, LTIP or STIP awards. |
| (1) | The RSU amounts represent the aggregate grant date fair value of the awards granted to each NEO computed in accordance with stock-based accounting rules (FASB ASC Topic 718). Assumptions used in the calculation of these amounts are included in Note 1112 – Stockholders’ Equity to our calendar year 20222023 consolidated financial statements, which isare included in our Annual Report on Form 10-K filed with the SEC on February 17, 202315, 2024 (the “Form 10-K”). RSUs generally vest in three substantially equal annual installments beginning on June 21 in the year following the date of |
| | | | | 70 | 2024 Proxy Statement | | | | |
| grant. Consistent with the requirements of FASB ASC Topic 718, the value of PSUs is based on the estimated outcome as of the date of grant. In accordance with FASB ASC Topic 718, this result is based on a relative TSR result modeled using a Monte Carlo simulation. The amounts in this column reflect the aggregate grant date fair value of the PSUs for accounting purposes determined in accordance with SEC rules and do not reflect the actual economic value that may be realized by the NEO at the end of the relevant three-year performance period. |
| (2) | Represents the number of RSUs granted on June 21, 20222023 to the NEOs under the terms of the 2010 Stock Plan. The restrictions generally lapse for one-third of the RSUs on June 21, 2023, June 21, 2024, 2025, and June 21, 2025,2026, at which time the units are converted into shares of our common stock. The grant date fair value of the RSUs is the number of RSUs multiplied by the closing price of the Company common stock on the grant date of June 21, 20222023 ($4.43)5.05). |
2023 Proxy Statement 63
Compensation of Named Executive Officers
| (3) | Represents the number of PSUs granted under the 2010 Stock Plan, having a target value for each NEO of: Mr. Baker, $650,000;$715,000; Mr. Lawlar, $149,525; Mr. Clary, $138,000, Mr. Brown, $126,500, Mr. Sienko, $120,600, and Mr. Roberts, $200,000, Mr. Lawlar, $130,000; Mr. Clary, $120,000, and Mr. Brown, $115,000,$230,000, with the potential of up to 200% of this target value (subject to specific performance terms and conditions established for these PSUs) awarded to the NEOs under the 2010 Stock Plan. Determination of the actual number of shares to be received in settlement of these PSUs will be based on the TSR of Hecla common stock for the three-year period from January 1, 20222023 through December 31, 2024,2025, based on the following percentile rank within peer group companies: |
| | • | | 100th percentile rank = maximum award at 200% of target; |
| | • | | 40th - 60th percentile rank = target award at grant value; |
| | • | | 5025th percentile rank = threshold award at 50%25% of target.
|
| | Hecla’s TSR performance versus that of TSR peer group companies will be based on a comparison of the average share price over the last 60 calendar days prior to January 1, 20222023 (as the base price) with the average share price the last 60 calendar days of the three-year performance period, plus dividends, to determine relative share value performance and ranking among peers. |
| (4) | Represents the potential value of the payout for each NEO under the 2022-20242023-2025 LTIP period if the threshold, target, or maximum goals are satisfied for all performance measures. The potential payouts are performance-driven and therefore completely at-risk. The business measurements and performance goals for determining the payout are described in the CD&A starting on page 36.56. Dollar amounts shown are valued as follows on a per unit basis: Threshold, $0; Target, $90; and Maximum, $525.$630. The number of units awarded to each NEO for the 2022-20242023-2025 LTIP period are as follows: |
| | | | | | | NEO | | 2022-2024 2023-2025 LTIP
Units
(#) | | | Baker | | | 10,000 | 11,000 | | | | Lawlar | | | | 4,025 | | | | Clary | | | | 3,795 | | | | Brown | | | | 3,465 | | | | Sienko | | | | 3,309 | | | | Roberts | | | 5,000 | | Lawlar
— | | | 3,500 | | Clary
| | | 3,300 | | Brown
| | | 3,150 | |
| (5) | Represents the potential value of the payout for each NEO under the 20222023 STIP described in the CD&A starting on page 36.51. The total payout to each NEO under the 20222023 STIP is described in footnote 3 to the Summary Compensation Table for 20222023 on page 61.67. |
64 www.hecla.com
Compensation of Named Executive Officers
| | | | | | | | | 2024 Proxy Statement | 71 |
The following table provides information on the current holdings of stock awards by the NEOs. This table includes unvested RSUs and unvested PSUs. Outstanding Equity Awards at Calendar Year-End for 20222023 | | | | Stock Awards | | | Stock Awards | | Name | | Number of
Shares or
Units
of Stock
That
Have Not
Vested(1)
(#) | | | Market
Value of
Shares or
Units of
Stock That
Have
Not
Vested(2)
($) | | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or Other
Rights That
Have
Not Vested
(#) | | Equity Incentive Plan Awards:
Market or
Payout
Value of
Unearned
Shares, Units
or
Other Rights
That
Have Not
Vested(3)
($) | | | Number of
Shares or
Units of Stock
That Have Not
Vested(1) (#) | | | Market Value of Shares or
Units of Stock
That Have Not
Vested(2)
($) | | | Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have Not Vested
(#) | | Equity Incentive Plan Awards:
Market or
Payout Value of
Unearned Shares, Units or Other Rights
That Have Not
Vested(3)
($) | | | Phillips S. Baker, Jr. | | | 233,032 | | | | 1,295,658 | | | | | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | | | 260,552 | | | | 1,253,255 | | | | | | | | | | | | | 63,452 | (4) | | | 352,793 | | | | | | | 146,726 | (4) | | | 705,752 | | | | | | | | | 146,726 | (5) | | | 815,797 | | | | | | | | 141,584 | (5) | | | 681,019 | | | Lauren M. Roberts | | | 111,507 | | | | 619,979 | | | | | | | | | | | | | 19,036 | (4) | | | 105,840 | | | | | | | | | 45,146 | (5) | | | 251,012 | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | | 65,000 | | | | 361,400 | | | | | | | | 80,937 | | | | 389,307 | | | | | | | | | | | | | 13,959 | (4) | | | 77,612 | | | | | | | 29,345 | (4) | | | 141,149 | | | | | | | | | 29,345 | (5) | | | 163,158 | | | | | | | | 29,609 | (5) | | | 142,419 | | Michael L. Clary | | | 77,016 | | | | 428,209 | | | | | | | | | | | | | 13,959 | (4) | | | 77,612 | | | | | | | 27,088 | (4) | | | 130,293 | | | | | | | | | 27,088 | (5) | | | 150,609 | | | | | | | | 27,327 | (5) | | | 131,443 | | Robert D. Brown | | | 69,511 | | | | 386,481 | | | | | | | | | | | | | 13,325 | (4) | | | 74,087 | | | | | | | 25,959 | (4) | | | 124,863 | | | | | | | | | 25,959 | (5) | | | 144,332 | | | | | | | | 25,050 | (5) | | | 120,491 | | David C. Sienko | | | | | | | | | | 25,959 | (4) | | | 124,863 | | | | | | | | | | | 23,881 | (5) | | | 114,868 | | Lauren M. Roberts* | | | | — | | | | — | | | | — | | | | — | |
| * | Mr. Roberts retired on December 15, 2023, and as a result, he is not eligible for any of these awards. |
| (1) | The following table shows the dates on which the RSUs in the outstanding equity awards table vest and the corresponding number of shares, subject generally to continued employment through the vest date. |
| | | | Number of Unvested Restricted Stock Units | | | Number of Unvested Restricted Stock Units | | Vesting Date | | Baker | | | Roberts | | | Lawlar | | | Clary | | | Brown | | | Baker | | | Roberts | | | Lawlar | | | Clary | | | Brown | | | Sienko | | | June 21, 2023 | | | 114,063 | | | | 56,843 | | | | 28,463 | | | | 42,737 | | | | 37,160 | | | June 21, 2024 | | June 21, 2024 | | June 21, 2024 | | June 21, 2024 | | | 70,060 | | | | 32,090 | | | | 21,864 | | | | 20,735 | | | | 19,559 | | | | 117,255 | | | | — | | | | 36,665 | | | | 34,399 | | | | 31,903 | | | | 30,920 | | | June 21, 2025 | | | 48,909 | | | | 22,574 | | | | 14,673 | | | | 13,544 | | | | 12,792 | | June 21, 2025 | | June 21, 2025 | | June 21, 2025 | | | | 96,103 | | | | — | | | | 29,472 | | | | 27,207 | | | | 25,134 | | | | 24,574 | | | | | | | | | | | | | | | | | | June 21, 2026 | | June 21, 2026 | | June 21, 2026 | | June 21, 2026 | | | | 47,194 | | | | — | | | | 14,800 | | | | 13,663 | | | | 12,343 | | | | 11,783 | | | Total | | | 233,032 | | | | 111,507 | | | | 65,000 | | | | 77,016 | | | | 69,511 | | | | | | | | | | | | | | | | | | Total | | Total | | Total | | | | 260,552 | | | | — | | | | 80,937 | | | | 75,269 | | | | 69,380 | | | | 67,277 | |
| (2) | The market value of the RSUs is based on the closing market price of our common stock on the NYSE as of December 30, 2022,29, 2023, which was $5.56.$4.81. |
| (3) | The market value of the PSUs is based on the closing market price of our common stock on the NYSE as of December 30, 2022,29, 2023, which was $5.56.$4.81. |
| (4) | Award of PSUs, the value of which will be determined based on the TSR of Hecla common stock for the three-year period from January 1, 2021 through December 31, 2023. For purposes of determining the amounts reflected in this column, it is assumed that threshold performance was achieved as of the calendar year ended December 31, 2022.
|
(5) | Award of PSUs, the value of which will be determined based on the TSR of Hecla common stock for the three-year period from January 1, 2022 through December 31, 2024. For purposes of determining the amounts reflected in this column, it is assumed that threshold performance was achieved as of the calendar year ended December 31, 2022.2023. |
2023 Proxy Statement 65
Compensation of Named Executive Officers
| | | | | 72 | 2024 Proxy Statement | | | | |
| (5) | Award of PSUs, the value of which will be determined based on the TSR of Hecla common stock for the three-year period from January 1, 2023 through December 31, 2025. For purposes of determining the amounts reflected in this column, it is assumed that threshold performance was achieved as of the calendar year ended December 31, 2023. |
The following table shows the number of stock awards that vested during calendar year 20222023 for each of the NEOs, and the value realized on the vesting of stock awards during calendar year 2022.2023. Stock Vested in 20222023 | | | | Stock Awards | | | Stock Awards | | Name | | Number of
Shares
Acquired
on Vesting
(#) | | Value Realized on Vesting ($) | | | Number of
Shares
Acquired
on Vesting
(#) | | Value Realized on Vesting ($) | | | Phillips S. Baker, Jr. | | | 72,463 | (1) | | | 321,011 | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | Phillips S. Baker, Jr. | | | | 44,004 | (1) | | | 222,220 | | | | | | | | | | | | | 21,151 | (2) | | | 106,813 | | | | | | | | | | | | | 48,909 | (3) | | | 246,990 | | | | | | | | | | | | | | | | | 111,041 | (4) | | | 393,085 | | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | Russell D. Lawlar | | | | 6,600 | (1) | | | 33,330 | | | | | | | | | | | | | 7,191 | (2) | | | 36,315 | | | | | | | | | | | | | 14,673 | (3) | | | 74,099 | | | | | | | | | | | | | | | | | 24,428 | (4) | | | 86,475 | | | Michael L. Clary | | Michael L. Clary | | Michael L. Clary | | Michael L. Clary | | | | 22,002 | (1) | | | 111,110 | | | | | | | | | | | | | 7,191 | (2) | | | 36,315 | | | | | | | | | | | | | 13,544 | (3) | | | 68,397 | | | | | | | | | | | | | | | | | 24,428 | (4) | | | 86,475 | | | Robert D. Brown | | Robert D. Brown | | Robert D. Brown | | Robert D. Brown | | | | 17,601 | (1) | | | 88,885 | | | | | | | | | | | | | 6,768 | (2) | | | 34,178 | | | | | | | | | | | | | 12,792 | (3) | | | 64,600 | | | | | | | | | | | | | | | | | 23,319 | (4) | | | 82,549 | | | David C. Sienko | | David C. Sienko | | David C. Sienko | | David C. Sienko | | | | 16,501 | (1) | | | 83,330 | | | | | | | | | | | | | 6,345 | (2) | | | 32,042 | | | | | | | | | | | | | 12,792 | (3) | | | 64,600 | | | | | | | | | 44,004 | (2) | | | 194,938 | | | | | 21,151 | (3) | | | 93,699 | | | | | 264,026 | (4) | | | 1,314,849 | | | | 22,208 | (4) | | | 78,616 | | | Lauren M. Roberts | | | 37,313 | (1) | | | 165,297 | | Lauren M. Roberts | | Lauren M. Roberts | | Lauren M. Roberts | | | | 24,752 | (1) | | | 124,998 | | | | | 24,752 | (2) | | | 109,651 | | | | | 9,518 | (3) | | | 42,165 | | | | | 99,010 | (4) | | | 493,070 | | Russell D. Lawlar | | | 9,058 | (1) | | | 40,127 | | | | | 6,601 | (2) | | | 29,242 | | | | | 7,192 | (3) | | | 31,861 | | Michael L. Clary | | | 14,492 | (1) | | | 64,200 | | | | | 22,002 | (2) | | | 97,469 | | | | | 7,192 | (3) | | | 31,861 | | | | 9,518 | (2) | | | 48,066 | | | Robert D. Brown | | | 27,174 | (1) | | | 120,381 | | | | | 17,602 | (2) | | | 77,977 | | | | | 6,769 | (3) | | | 29,987 | | | | | 69,306 | (4) | | | 345,144 | | | | | | 22,574 | (3) | | | 113,999 | | | | | | | | | | | | | | | | | 0 | (4) | | | 0 | |
| (1) | Messrs. Baker, Lawlar, Clary and BrownThe NEOs were granted these RSUs on June 19, 2019. Mr. Roberts was granted his RSUs on August 5, 2019, the date of his appointment as SVP – COO.22, 2020. On June 21, 2022,2023, the restrictions lapsed, and each NEO received his units in the form of shares of our common stock. The value realized was based on the closing sales price of our common stock on the NYSE on June 21, 2022,2023, which was $4.43.$5.05.
|
| (2) | The NEOs were granted these RSUs on June 22, 2020.21, 2021. On JulyJune 21, 2022,2023, the restrictions lapsed, and each NEO received his units in the form of shares of our common stock. The value realized was based on the closing sales price of our common stock on the NYSE on June 21, 2022,2023, which was $4.43.$5.05. |
| (3) | The NEOs were granted these RSUs on June 21, 2021.2022. On June 21, 2022,2023, the restrictions lapsed, and each NEO received his units in the form of shares of our common stock. The value realized was based on the closing sales price of our common stock on the NYSE on June 21, 2022,2023, which was $4.43.$5.05. |
| (4) | For Messrs. Baker, Roberts,Lawlar, Clary, Brown, and Brown,Sienko, reflects the PSUs earned for the 2020-20222021-2023 performance period that ended on December 31, 2022,2023, because performance targets were met. Messrs. Lawlar and ClaryMr. Roberts retired from the Company on December 15, 2023, therefore, his 2021-2023 PSUs were not awarded PSUs for the 2020-2022 performance period.forfeited. The value shown as realized on vesting is based on the closing price of our common stock on the NYSE on February 24, 202326, 2024 ($4.98)3.54), which was the date on which the executive’s received the shares underlying their PSUs. See 2020-20222021-2023 PSU Results on page 5560 for further information. |
66 www.hecla.com
OTHER BENEFITS
Other Benefits
Pension Benefits The following table shows pension information under the Retirement Plan and the SERP for the NEOs as of December 31, 2022.2023. The terms and conditions for participation in, and payments from, these plans are described below. The actuarial present value of the accumulated benefit is determined using the same assumptions used for financial reporting purposes except that retirement age is assumed to be the normal retirement age of 65, or the current age if eligible for early retirement. These assumptions are in Note 6 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. | Name | | Plan Name | | Number
of Years
Credited
Service
(#) | | | Present
Value of
Accumulated
Benefit
($) | | Payments During Last Calendar Year ($) | | | Plan Name | | Number
of Years
Credited
Service
(#) | | Present
Value of
Accumulated
Benefit
($) | | Payments During Last Calendar Year ($) | | Phillips S. Baker, Jr. | | Retirement Plan | | | 21 | | | | 1,084,117 | | | | — | | Phillips S. Baker, Jr. | | | | | | | | | | Michael L. Clary | | Michael L. Clary | | | | | | | | | | Russell D. Lawlar | | Russell D. Lawlar | | | | | | | | | | Robert D. Brown | | Robert D. Brown | | | | | | | | | | David C. Sienko | | David C. Sienko | | | Retirement Plan | | | | | | | 369,226 | | | | | | | | | | SERP | | | | | 8,360,461 | | | | — | | | Lauren M. Roberts | | Retirement Plan | | | 11 | | | | 251,662 | | | | — | | Lauren M. Roberts | | | | SERP | | | | | 554,955 | | | | — | | | Russell D. Lawlar | | Retirement Plan | | | 12 | | | | 123,229 | | | | — | | | | SERP | | | | | 6,067 | | | | — | | | Michael L. Clary | | Retirement Plan | | | 28 | | | | 682,827 | | | | — | | | | SERP | | | | | 162,526 | | | | — | | | Robert D. Brown | | Retirement Plan | | | | | N/A | | | | N/A | | | | SERP | | | 5 | | | | 274,584 | (1) | | | — | |
| (1) | As a non-U.S. citizen, Mr. Brown is not a participant in the Retirement Plan; however, he does participate in the SERP, which is shown in Canadian dollars. |
Retirement Plan Our NEOs, except for those who are not U.S. citizens, participate in the Retirement Plan, which is a defined benefit plan. Canadian NEOs participate in Canada’s public retirement income system, which includes the following components: (i) the Canada (or Quebec) Pension Plan, which is a contributory, earnings-related social insurance program, and (ii) the Old Age Security program. In addition, the Registered Retirement Savings Plan is a tax-deferred individual savings plan available to Canadian employees. Mexican employees participate in Mexico’s public retirement income system, which is based on contributions the employee, employer and the government submit to the retirement savings system. The system is administered through savings accounts managed by private fund managers selected by the participant. Contributions to the Retirement Plan, and the related expense or income, are based on general actuarial calculations and, accordingly, no portion of our contributions, and related expenses or income, is specifically attributable to our officers. The CompanyHecla also offers the SERPSupplemental Excess Retirement Plan (SERP) under which the amount of any benefits not payable under the Retirement Plan by reason of the limitations imposed by the Internal Revenue Code and/or the Employee Retirement Income Security Act, as amended (the “Acts”)Acts), and the loss, if any, due to a deferral of salary made under our KEDCP will be paid out of our general funds to any employee covered by the SERP who may be adversely affected. Under the Acts, the current maximum annual pension benefit payable by the Retirement Plan to any employee is $245,000 (for 2022)2023), subject to specified adjustments, and is calculated using earnings not more than $305,000. Upon$330,000.
| | | | | 74 | 2024 Proxy Statement | | | | |
A participant in the Traditional Pension Plan, upon reaching the normal retirement age of 65, each participant is eligible to receive annual retirement benefits in monthly installments for life equal to, for each year of credited service, 1% of final average annual earnings (defined as the highest average earnings of such employee for any 36 consecutive calendar months for participants hired on or before June 30, 2013, and as the highest average earnings of such employee for any 60 consecutive calendar months, for participants hired after June 30, 2013, during the final 120 calendar months of service) up to the applicable covered compensation level (which level is based on the Social Security maximum taxable wage base) and 1.75% of the difference, if any, between final average annual earnings and the 2023 Proxy Statement 67
Other Benefits
applicable covered compensation level. A participant in the Cash Balance Plan, upon reaching the normal retirement age of 65, is eligible to receive their account balance, or alternatively, an actuarially equivalent monthly benefit for life. The participant’s account balance is credited each quarter with pay credits equal to 3% to 6% of their eligible earnings, depending on years of service, and interest credits, as a rate equal to the quarterly rate of change in the consumer price index plus three-quarters of one percent (3/4%). The Retirement Plan and SERP define earnings for purposes of the plans to be “a wage or salary for services of employees inclusive of any bonus or special pay including gain-sharing programs, contract miners’ bonus pay and the equivalent,” except that on or after July 1, 2013, earnings are defined as “base salary or wages for personal services and elective deferrals plus (i) elective deferrals not includable in the gross income of the employee under Code Sections 125, 132(f)(4), 402(e)(3), 402(h), 403(b) and 457, (ii) one-half (1/2) of any performance-based or STIP bonus, (iii) one-half (1/2) of any safety incentive award, (iv) paid time off, other than pay while on disability leave, (v) any post-employment payment for services performed during the course of employment that would have been paid to the employee prior to the severance from employment if the employee had continued in employment with Hecla, and (vi) compensation for overtime at the employee’s regular rate of pay.” The following table shows estimated aggregate annual benefits under the Retirement Plan and the SERP payable upon retirement to a participant who retires in 20222023 at age 65 having the years of service and final average annual earnings as specified. The table assumes Social Security covered compensation levels in effect on January 1, 2022.2023. Estimated Annual Retirement Benefits | Final Average Annual Earnings | | Years of Credited Service | | | | 5 | | | 10 | | | 15 | | | 20 | | | 25 | | | 30 | | | 35 | | | Final Average | | | Years of Credited Service | | | Annual Earnings | | | 5 | | | 10 | | | 15 | | | 20 | | | 25 | | | 30 | | | 35 | | | $ 100,000 | | $ | 5,089 | | | $ | 10,179 | | | $ | 15,268 | | | $ | 20,357 | | | $ | 25,446 | | | $ | 30,536 | | | $ | 35,625 | | $ 100,000 | | $ 100,000 | | $ 100,000 | | | $ | 5,000 | | | $ | 10,000 | | | $ | 15,000 | | | $ | 20,000 | | | $ | 25,000 | | | $ | 30,000 | | | $ | 35,000 | | | 150,000 | | | 9,464 | | | | 18,929 | | | | 28,393 | | | | 37,857 | | | | 47,321 | | | | 56,786 | | | | 66,250 | | 150,000 | | 150,000 | | 150,000 | | | | 9,319 | | | | 18,639 | | | | 27,958 | | | | 37,277 | | | | 46,597 | | | | 55,916 | | | | 65,235 | | | 200,000 | | | 13,839 | | | | 27,679 | | | | 41,518 | | | | 55,357 | | | | 69,196 | | | | 83,036 | | | | 96,875 | | 200,000 | | 200,000 | | 200,000 | | | | 13,694 | | | | 27,389 | | | | 41,083 | | | | 54,777 | | | | 68,472 | | | | 82,166 | | | | 95,860 | | | 250,000 | | | 18,214 | | | | 36,429 | | | | 54,643 | | | | 72,857 | | | | 91,071 | | | | 109,286 | | | | 127,500 | | 250,000 | | 250,000 | | 250,000 | | | | 18,069 | | | | 36,139 | | | | 54,208 | | | | 72,277 | | | | 90,347 | | | | 108,416 | | | | 126,485 | | | 300,000 | | | 22,589 | | | | 45,179 | | | | 67,768 | | | | 90,357 | | | | 112,946 | | | | 135,536 | | | | 158,125 | | 300,000 | | 300,000 | | 300,000 | | | | 22,444 | | | | 44,889 | | | | 67,333 | | | | 89,777 | | | | 112,222 | | | | 134,666 | | | | 157,110 | | | 350,000 | | | 26,964 | | | | 53,929 | | | | 80,893 | | | | 107,857 | | | | 134,821 | | | | 161,786 | | | | 188,750 | | 350,000 | | 350,000 | | 350,000 | | | | 26,819 | | | | 53,639 | | | | 80,458 | | | | 107,277 | | | | 134,097 | | | | 160,916 | | | | 187,735 | | | 400,000 | | | 31,339 | | | | 62,679 | | | | 94,018 | | | | 125,357 | | | | 156,696 | | | | 188,036 | | | | 219,375 | | 400,000 | | 400,000 | | 400,000 | | | | 31,194 | | | | 62,389 | | | | 93,583 | | | | 124,777 | | | | 155,972 | | | | 187,166 | | | | 218,360 | | | 450,000 | | | 35,714 | | | | 71,429 | | | | 107,143 | | | | 142,857 | | | | 178,571 | | | | 214,286 | | | | 250,000 | | 450,000 | | 450,000 | | 450,000 | | | | 35,569 | | | | 71,139 | | | | 106,708 | | | | 142,277 | | | | 177,847 | | | | 213,416 | | | | 248,985 | | | 500,000 | | | 40,089 | | | | 80,179 | | | | 120,268 | | | | 160,357 | | | | 200,446 | | | | 240,536 | | | | 280,625 | | 500,000 | | 500,000 | | 500,000 | | | | 39,944 | | | | 79,889 | | | | 119,833 | | | | 159,777 | | | | 199,722 | | | | 239,666 | | | | 279,610 | | | 550,000 | | | 44,464 | | | | 88,929 | | | | 133,393 | | | | 177,857 | | | | 222,321 | | | | 266,786 | | | | 311,250 | | 550,000 | | 550,000 | | 550,000 | | | | 44,319 | | | | 88,639 | | | | 132,958 | | | | 177,277 | | | | 221,597 | | | | 265,916 | | | | 310,235 | | | 600,000 | | | 48,839 | | | | 97,679 | | | | 146,518 | | | | 195,357 | | | | 244,196 | | | | 293,036 | | | | 341,875 | | 600,000 | | 600,000 | | 600,000 | | | | 48,694 | | | | 97,389 | | | | 146,083 | | | | 194,777 | | | | 243,472 | | | | 292,166 | | | | 340,860 | | | 650,000 | | | 53,214 | | | | 106,429 | | | | 159,643 | | | | 212,857 | | | | 266,071 | | | | 319,286 | | | | 372,500 | | 650,000 | | 650,000 | | 650,000 | | | | 53,069 | | | | 106,139 | | | | 159,208 | | | | 212,277 | | | | 265,347 | | | | 318,416 | | | | 371,485 | | | 700,000 | | | 57,589 | | | | 115,179 | | | | 172,768 | | | | 230,357 | | | | 287,946 | | | | 345,536 | | | | 403,125 | | 700,000 | | 700,000 | | 700,000 | | | | 57,444 | | | | 114,889 | | | | 172,333 | | | | 229,777 | | | | 287,222 | | | | 344,666 | | | | 402,110 | | | 750,000 | | | 61,964 | | | | 123,929 | | | | 185,893 | | | | 247,857 | | | | 309,821 | | | | 371,786 | | | | 433,750 | | 750,000 | | 750,000 | | 750,000 | | | | 61,819 | | | | 123,639 | | | | 185,458 | | | | 247,277 | | | | 309,097 | | | | 370,916 | | | | 432,735 | | | 800,000 | | | 66,339 | | | | 132,679 | | | | 199,018 | | | | 265,357 | | | | 331,696 | | | | 398,036 | | | | 464,375 | | 800,000 | | 800,000 | | 800,000 | | | | 66,194 | | | | 132,389 | | | | 198,583 | | | | 264,777 | | | | 330,972 | | | | 397,166 | | | | 463,360 | | | 850,000 | | | 70,714 | | | | 141,429 | | | | 212,143 | | | | 282,857 | | | | 353,571 | | | | 424,286 | | | | 495,000 | | 850,000 | | 850,000 | | 850,000 | | | | 70,569 | | | | 141,139 | | | | 211,708 | | | | 282,277 | | | | 352,847 | | | | 423,416 | | | | 493,985 | | | 900,000 | | | 75,089 | | | | 150,179 | | | | 225,268 | | | | 300,357 | | | | 375,446 | | | | 450,536 | | | | 525,625 | | 900,000 | | 900,000 | | 900,000 | | | | 74,944 | | | | 149,889 | | | | 224,833 | | | | 299,777 | | | | 374,722 | | | | 449,666 | | | | 524,610 | | | 950,000 | | | 79,464 | | | | 158,929 | | | | 238,393 | | | | 317,857 | | | | 397,321 | | | | 476,786 | | | | 556,250 | | 950,000 | | 950,000 | | 950,000 | | | | 79,319 | | | | 158,639 | | | | 237,958 | | | | 317,277 | | | | 396,597 | | | | 475,916 | | | | 555,235 | | | 1,000,000 | | | 83,839 | | | | 167,679 | | | | 251,518 | | | | 335,357 | | | | 419,196 | | | | 503,036 | | | | 586,875 | | 1,000,000 | | 1,000,000 | | 1,000,000 | | | | 83,694 | | | | 167,389 | | | | 251,083 | | | | 334,777 | | | | 418,472 | | | | 502,166 | | | | 585,860 | |
| | | | | | | | | 2024 Proxy Statement | 75 |
Benefits listed in the pension table are not subject to any deduction for Social Security or other offset amounts. As of December 31, 2022,2023, the following NEOs have completed the indicated number of full years of credited service: Mr. Baker, 2122 years; Mr. Roberts, 11Clary, 29 years; Mr. Lawlar, 1213 years; Mr. Clary, 28Brown, 6 years; Mr. Sienko 13 years; and Mr. Brown, 5Roberts, 12 years. 68 www.hecla.com
Other Benefits
The table below provides information on the nonqualified deferred compensation of the NEOs in 2022.2023. Nonqualified Deferred Compensation for 20222023 | | | | | | | | | | | | | | | | | | | | | Name | | Executive
Contributions
in Last FY
($) | | | Registrant
Contributions in
Last FY
($) | | | Aggregate
Earnings in
Last FY
($) | | | Aggregate
Withdrawals/
Distributions
($) | | | Aggregate Balance of Stock At Last FYE ($)(1) | | | | | | | Phillips S. Baker, Jr. | | | — | | | | — | | | | — | | | | — | | | | 9,985,560 | | | | | | | | Lauren M. Roberts | | | 491,400 | (2) | | | | | | | — | | | | — | | | | 1,885,502 | | | | | | | | Russell D. Lawlar | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Michael L. Clary | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Robert D. Brown(3) | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Executive
Contributions
in Last FY
($) | | Registrant
Contributions in
Last FY
($) | | Aggregate
Earnings in
Last FY
($) | | Aggregate
Withdrawals/
Distributions
($) | | Aggregate Balance of Stock At Last FYE ($)(1) | | | | | | | Phillips S. Baker, Jr. | | | | — | | | | | — | | | | | — | | | | | — | | | | | 8,638,587 | | | | | | | | Russell D. Lawlar | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | Michael L. Clary | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | Robert D. Brown(2) | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | David C. Sienko | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | | | Lauren M. Roberts* | | | | — | | | | | — | | | | | — | | | | | — | | | | | 1,631,162 | |
| * | Mr. Roberts retired from Hecla on December 15, 2023. Under the terms of the KEDCP, he will receive any shares he deferred under the KEDCP 6 months after he leaves the Company. He will receive the 339,119 shares held under the KEDCP in June 2024. |
| (1) | Total amount of deferred shares held under the KEDCP as of December 31, 2022.2023. The value shown in this column is the value of the total amount of shares held in the KEDCP multiplied by our closing stock price on the NYSE on December 30, 202229, 2023 ($5.56)4.81). The number of shares so held is as follows: Baker, 1,795,964 shares; and Roberts, 339,119 shares. The total amount of shares held by Messrs. Baker and Roberts under the KEDCP is also reported in the Security Ownership of Certain Beneficial Owners and Management Table on page 82.88. |
| (2) | Mr. Roberts deferred a portion of his 2022 STIP cash award to the KEDCP (90% of $546,000 = $491,400). The deferred executive contribution cash amount is reported in the Summary Compensation Table for 2022 on page 61 as part of Mr. Roberts total 2022 compensation.
|
(3) | Canadian employees are not eligible to participate in our deferred compensation plan. |
Pursuant to the Company’s KEDCP, executives and key employees, including the NEOs, may defer all or a portion of their base salary, cash or equity awards earned under the LTIP and STIP, and any vested RSUs or vested PSUs granted under the 2010 Stock Plan. Deferral elections are made by the individual generally in the year prior to the beginning of the plan year for amounts to be earned or granted in the following year. Base salary, STIP and LTIP amounts deferred under the KEDCP are credited to either an investment account or a stock account at the participant’s election. Amounts credited to an investment account are valued in cash, credited with deemed interest, and distributed with deemed interest in cash upon a distributable event. RSUs and other common stock awarded (PSUs) under the 2010 Stock Plan and deferred by a participant are credited to a stock account. Amounts credited to the stock account of a participant are valued based upon our common stock and are delivered to the participant in shares of our common stock upon a distributable event. The KEDCP also provides for corporate matching amounts where the participants elect to have their base salary, STIP or LTIP cash awards credited to a stock account. Matching contributions are also valued based on our common stock and distributed upon a distributable event in stock. The ability to defer compensation into a company stock account promotes alignment of the interests of participants with those of our common shareholders. It also provides for corporate discretionary allocations of amounts valued based upon our common stock and credited to a stock account. As of the end of the last day of each calendar month, an additional amount is credited to the investment account of the participant equal to the product of (i) the average daily balance of the investment account for the month, multiplied by (ii) the annual prime rate for corporate borrowers quoted at the beginning of the quarter by The Wall Street Journal (or such other comparable interest rate as the committee may designate from time to time). The amounts credited to the investment or stock account of a participant under the KEDCP are distributable or payable within 75 days of the earliest to occur of the following distribution events: (i) the date on which the participant separates from service with us, with the distribution delayed for six months for certain “specified employees;” (ii) “disability” as defined in Section 409A of the Internal Revenue Code; (iii) the participant’s death; (iv) a fixed date or fixed schedule selected by the participant at the time the deferral election was made; (v) an “unforeseeable emergency,” as defined in Section 409A of the Internal Revenue Code; (vi) a “change in control” of the Company, as defined in regulations issued by the Internal Revenue Service under Section 409A of the Internal Revenue Code; and (vii) termination of the KEDCP. The KEDCP is at all times considered to be entirely unfunded both for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended, and no provision will at any time be made with respect to segregating our
| | | | | 76 | 2024 Proxy Statement | | | | |
assets for the payment of any amounts under the KEDCP. Any funds that may be 2023 Proxy Statement 69
Other Benefits
invested for purposes of fulfilling our promises under the KEDCP are for all purposes to be part of our general assets and available to general creditors in the event of a bankruptcy or insolvency of the Company. Nothing contained in the KEDCP will constitute a guarantee by us that any funds or assets will be sufficient to pay any benefit under the KEDCP. Potential Payments Upon Termination or Change in Control We have a change in control agreement (“CIC Agreement”) with each of our NEOs (Messrs. Baker, Roberts, Lawlar, Clary, Brown and Brown)Sienko). The CIC Agreement expired for Mr. Roberts upon his retirement from the Company on December 15, 2023. The CIC Agreements provide that each of the NEOs will serve in such executive position as the Board may direct. The CIC Agreements become effective only upon a change in control of the Company (the date of such change in control is referred to as the “Effective Date”). The term of employment under the CIC Agreements is two years from the Effective Date (except for Mr. Baker and Mr. Sienko, who has a termhave terms of three years from the Effective Date). Any CIC Agreements entered into with newly hired executives will contain an employment term of two years from the Effective Date. The CIC Agreements automatically extend for an additional year on each anniversary date of the agreements unless we give notice of nonrenewal 60 days prior to the anniversary date. Under the CIC Agreements, a change in control is, with certain limitations, deemed to occur if: (i) an individual or entity (including a “group” under Section 13(d) (3) of the Exchange Act) becomes the beneficial owner of 20% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; (ii) as the result of a tender offer, merger, proxy fight or similar transaction, the persons who were previously directors of the Company cease to constitute a majority of the Board; (iii) consummation of the sale of all, or substantially all, of the assets of the Company (with certain limitations) occurs; or (iv) the approval of a plan of dissolution or liquidation. The CIC Agreements are intended to ensure, among other things, that in the event of a change in control, each NEO will continue to focus on adding shareholder value. We seek to accomplish this by assuring that each NEO continues to receive payments and other benefits equivalent to those being received at the time of a change in control for the duration of the employment term under of the CIC Agreement. The CIC Agreements also provide that should an NEO’s employment be terminated either (i) by the NEO for good reason, or (ii) by the Company (other than for cause or disability) after the Effective Date of the CIC Agreement, the NEO would receive from us a lump-sum defined amount generally equivalent to three times the aggregate of the annual base salary rate, the highest STIP and the prorated LTIP during the three-year period, prior to the Effective Date. For Messrs. Roberts, Lawlar, Clary, and Brown, and any other CIC Agreements entered into hereafter, the lump-sum defined amount is generally equivalent to two times. The NEOs would also be entitled to lump-sum payments representing the difference in pension and supplemental retirement benefits to which they would be entitled on (i) the date of actual termination, and (ii) the end of the three-year (or two-year where applicable) employment period under the CIC Agreements. We would also maintain such NEO’s participation in all benefit plans and programs (or provide equivalent benefits if such continued participation were not possible under the terms of such plans and programs). A NEO whose employment has terminated would not be required to seek other employment to receive the defined benefits. 70 www.hecla.com
Other Benefits
| | | | | | | | | 2024 Proxy Statement | 77 |
The following table summarizes the circumstances under which our NEOs would receive severance benefits upon termination or a change in control. | | | | | | | | | | | | | Compensation Element | | Termination
Following a
Change in Control(1) | | Termination due to
Death or Disability | | Involuntary
Not
For Cause
or
Voluntary
Termination | | For Cause
Termination | | Retirement | | | | | | | Base Salary | | Mr.Messrs. Baker receivesand Sienko receive three times histheir annual base salary. Messrs. Roberts, Lawlar, Clary, and Brown receive two times their annual base salary. | | N/A | | N/A | | N/A | | N/A | | | | | | | STIP | | Mr.Messrs. Baker receivesand Sienko receive three times the highest STIP paid in the last three years. Messrs. Roberts, Lawlar, Clary, and Brown receive two times the highest STIP paid in the last three years. | | N/A | | N/A | | N/A | | N/A | | | | | | | LTIP | | Mr.Messrs. Baker receivesand Sienko receive three times the highest LTIP paid in the last three years. Messrs. Roberts, Lawlar, Clary, and Brown receive two times the highest LTIP paid in the last three years. | | Each NEO would receive a prorated portion of any LTIP plan in which the NEO was a participant. The surviving spouse or other beneficiary would receive the payment based on actual performance. | | N/A | | N/A | | To qualify for vesting of long-term award benefits, the employee must retire under the Retirement Plan and be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have 7 or more years of service with the Company; or (iii) 68. If the participant meets these age and years of service requirements, their prorated portion for outstanding plan periods will be paid after the completion of those plan periods based on actual performance. |
2023 Proxy Statement 71
Other Benefits
| | | | | | | | | | | CompensationRSUs
Element
| | Termination
Following a
Change in Control(1) | | Termination due to
Death or Disability | | Involuntary
Not
For Cause
or
Voluntary
Termination | | For Cause
Termination | | Retirement | | | | | | | RSUs | | All unvested RSUs will vest upon a change in control.(2) | | All unvested RSUs would vest immediately as of the date of such disability or death and would be delivered to the NEO, spouse, or beneficiary. | | N/A | | N/A | | If an employee retires before their RSUs have vested, they must meet certain requirements for their RSUs to continue to vest based on the applicable vesting schedule. To qualify for vesting of RSUs, the employee must retire under the Retirement Plan and be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have 7 or more years of service with the Company; or (iii) 68. |
| | | | | 78 | 2024 Proxy Statement | | | | |
| | | | | | | | | | | Compensation Element | | Termination
Following a
Change in Control(1) | | Termination due to
Death or Disability | | Involuntary
Not
For Cause
or
Voluntary
Termination | | For Cause
Termination | | Retirement | | | | | | | PSUs | | All unearned PSUs will immediately become earned and vested at 100% of target level as of the date of the change in control.(2) | | The TSR performance goal would be deemed achieved at 100% of target level as of the date of such disability or death and would be delivered to the NEO, spouse, or beneficiary. | | N/A | | N/A | | To qualify for vesting of unearned PSUs, the employee must retire under the Retirement Plan and be at least age: (i) 60 and have 15 or more years of service with the Company; (ii) 65 and have 7 or more years of service with the Company; or (iii) 68. | | | | | | | Health and
Welfare Benefits | | Mr.Messrs. Baker and Sienko would receive three years of health and welfare benefits and disability and life insurance premiums would be paid for such three-year period. For Messrs. Roberts, Lawlar, Clary, and Brown the same would apply, but for two years. In addition to any earned, but unused vacation, all NEOs would be eligible for up to $20,000 in outplacement assistance and the 401(k) match would be deposited in their accounts. | | Unused vacation and the 401(k) match would be deposited in their account. | | N/A | | N/A | | Unused vacation and the 401(k) match would be deposited in their accounts. |
| (1) | This means an involuntary termination without cause or voluntary termination for good reason within the stated period (three or two years) after the change in control. |
| (2) | Our 2010 Stock Plan provides for a double-trigger vesting. |
72 www.hecla.com
Other Benefits
| | | | | | | | | 2024 Proxy Statement | 79 |
The following tables reflect the amount of compensation that would be paid to each of our NEOs in the event of a termination of the NEO’s employment under the scenarios listed in the tables and should be read in conjunction with the disclosure above. The amounts shown assume that such termination was effective as of December 31, 20222023 and include estimates of the amounts that would be paid to each NEO upon such NEO’s termination. The tables only include additional benefits that result from the termination and do not include any amounts or benefits earned, vested, accrued, or owing under any plan for any other reason. Please see Grants of Plan-Based Awards for 20222023 on page 63,69, Outstanding Equity Awards at Calendar Year-End for 20222023 on page 65,71, Pension Benefits table on page 67,73, and the section titled Nonqualified Deferred Compensation for 20222023 on page 6975 for additional information. The actual amounts to be paid can only be determined at the time of such NEO’s separation from Hecla. | Termination Payments and Benefits for Phillips S. Baker, Jr. | | Termination Following
a Change in Control
($) | | | Death or
Disability
($) | | | Termination Following
a Change in Control
($) | | Death or
Disability
($) | | Base Salary(1) | | | 2,250,000 | | | | — | | Base Salary(1) | | Base Salary(1) | | Base Salary(1) | | Base Salary(1) | | | STIP(2) | | | 4,921,875 | | | | — | | STIP(2) | | STIP(2) | | STIP(2) | | STIP(2) | | | Unvested RSUs(3) | | | 1,295,658 | | | | 1,295,658 | | Unvested RSUs(3) | | Unvested RSUs(3) | | Unvested RSUs(3) | | Unvested RSUs(3) | | | Unearned PSUs(4) | | | 1,168,590 | | | | 1,168,590 | | Unearned PSUs(4) | | Unearned PSUs(4) | | Unearned PSUs(4) | | Unearned PSUs(4) | | | LTIP | | | 2,970,000 | (5) | | | 1,829,997 | (6) | LTIP | | LTIP | | LTIP | | LTIP | | | | | 2,970,000 | (5) | | | 1,436,247 | (6) | | | | | Benefits: | | | | | | | | | | | Health and Welfare Benefits(7) | | | 61,350 | | | | — | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | | Life Insurance Benefits(8) | | | 13,166 | | | | — | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | | Outplacement | | Outplacement | | Outplacement | | Outplacement | | Outplacement | | | 20,000 | | | | — | | | | | | | | | Total | | | 12,700,639 | | | | 4,294,245 | | | | | | | | | Total | | Total | | Total | | Total | |
| Termination Payments and Benefits for Lauren M. Roberts | | Termination Following
a Change in Control
($) | | | Death or Disability
($) | | Termination Payments and Benefits for Russell D. Lawlar | | | Termination Following
a Change in Control
($) | | Death or Disability
($) | | Base Salary(1) | | | 840,000 | | | | — | | Base Salary(1) | | Base Salary(1) | | Base Salary(1) | | Base Salary(1) | | | STIP(2) | | | 1,406,000 | | | | — | | STIP(2) | | STIP(2) | | STIP(2) | | STIP(2) | | | Unvested RSUs(3) | | | 619,979 | | | | 619,979 | | Unvested RSUs(3) | | Unvested RSUs(3) | | Unvested RSUs(3) | | Unvested RSUs(3) | | | Unearned PSUs(4) | | | 356,852 | | | | 356,852 | | Unearned PSUs(4) | | Unearned PSUs(4) | | Unearned PSUs(4) | | Unearned PSUs(4) | | | LTIP | | | 990,000 | (5) | | | 884,997 | (6) | LTIP | | LTIP | | LTIP | | LTIP | | | | | 511,582 | (5) | | | 499,498 | (6) | | | | | Benefits: | | | | | | | | | | | Health and Welfare Benefits(7) | | | 35,089 | | | | — | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | | Life Insurance Benefits(8) | | | 8,777 | | | | — | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | | Outplacement | | Outplacement | | Outplacement | | Outplacement | | Outplacement | | | 20,000 | | | | — | | | | | | | | | Total | | | 4,276,697 | | | | 1,861,828 | | | | | | | | | Total | | Total | | Total | | Total | |
| | | | | | | | | | | Termination Payments and Benefits for Michael L. Clary | | Termination Following
a Change in Control
($) | | Death or Disability
($) | | | | Base Salary(1) | | | | 690,000 | | | | | — | | | | | STIP(2) | | | | 1,050,000 | | | | | — | | | | | Unvested RSUs(3) | | | | 362,044 | | | | | 362,044 | | | | | Unearned PSUs(4) | | | | 328,879 | | | | | 328,879 | | | | | LTIP | | | | 507,376 | (5) | | | | 480,599 | (6) | | | | | Benefits: | | | | | | | | | | | | | | Health and Welfare Benefits(7) | | | | 60,552 | | | | | — | | | | | Life Insurance Benefits(8) | | | | 8,777 | | | | | — | | | | | Outplacement | | | | 20,000 | | | | | — | | | | | Total | | | | 3,027,628 | | | | | 1,171,522 | |
2023 Proxy Statement 73
Other Benefits
| | | | | | | | | Termination Payments and Benefits for Russell D. Lawlar | | Termination Following
a Change in Control
($) | | | Death or Disability
($) | | Base Salary(1) | | | 660,000 | | | | — | | STIP(2) | | | 838,200 | | | | — | | Unvested RSUs(3) | | | 361,400 | | | | 361,400 | | Unearned PSUs(4) | | | 240,770 | | | | 240,770 | | LTIP | | | 511,582 | (5) | | | 540,790 | (6) | Benefits: | | | | | | | | | Health and Welfare Benefits(7) | | | 45,986 | | | | — | | Life Insurance Benefits(8) | | | 8,777 | | | | — | | Outplacement | | | 20,000 | | | | — | | | | | | | | | | | Total | | | 2,686,715 | | | | 1,142,960 | | | | | | | | | | |
| | | | | 80 | 2024 Proxy Statement | | | | |
| | | | | | | | | | | Termination Payments and Benefits for Robert D. Brown | | Termination Following
a Change in Control
($) | | Death or Disability
($) | | | | Base Salary(1) | | | | 660,000 | | | | | — | | | | | STIP(2) | | | | 780,000 | | | | | — | | | | | Unvested RSUs(3) | | | | 333,718 | | | | | 333,718 | | | | | Unearned PSUs(4) | | | | 309,447 | | | | | 309,447 | | | | | LTIP | | | | 742,500 | (5) | | | | 461,699 | (6) | | | | | Benefits: | | | | | | | | | | | | | | Health and Welfare Benefits(7) | | | | 9,530 | | | | | — | | | | | Life Insurance Benefits(8) | | | | 11,107 | | | | | — | | | | | Outplacement | | | | 20,000 | | | | | — | | | | | Total | | | | 2,866,302 | | | | | 1,104,864 | |
| | | | | | | | | Termination Payments and Benefits for Michael L. Clary | | Termination Following
a Change in Control
($) | | | Death or Disability
($) | | Base Salary(1) | | | 600,000 | | | | — | | STIP(2) | | | 1,050,000 | | | | — | | Unvested RSUs(3) | | | 428,209 | | | | 428,209 | | Unearned PSUs(4) | | | 228,221 | | | | 228,221 | | LTIP | | | 507,376 | (5) | | | 532,687 | (6) | Benefits: | | | | | | | | | Health and Welfare Benefits(7) | | | 58,895 | | | | — | | Life Insurance Benefits(8) | | | 8,323 | | | | — | | Outplacement | | | 20,000 | | | | — | | | | | | | | | | | Total | | | 2,901,024 | | | | 1,189,117 | | | | | | | | | | |
| Termination Payments and Benefits for Robert D. Brown | | Termination Following
a Change in Control
($) | | | Death or Disability
($) | | Termination Payments and Benefits for David C. Sienko | | | Termination Following
a Change in Control
($) | | Death or Disability
($) | | Base Salary(1) | | | 600,000 | | | | — | | Base Salary(1) | | Base Salary(1) | | Base Salary(1) | | Base Salary(1) | | | STIP(2) | | | 780,000 | | | | — | | STIP(2) | | STIP(2) | | STIP(2) | | STIP(2) | | | Unvested RSUs(3) | | | 386,481 | | | | 386,481 | | Unvested RSUs(3) | | Unvested RSUs(3) | | Unvested RSUs(3) | | Unvested RSUs(3) | | | Unearned PSUs(4) | | | 218,419 | | | | 218,419 | | Unearned PSUs(4) | | Unearned PSUs(4) | | Unearned PSUs(4) | | Unearned PSUs(4) | | | LTIP | | | 742,500 | (5) | | | 645,750 | (6) | LTIP | | LTIP | | LTIP | | LTIP | | | | | 1,113,750 | (5) | | | 457,020 | (6) | | | | | Benefits: | | | | | | | | | | | Health and Welfare Benefits(7) | | | 5,406 | | | | — | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | Health and Welfare Benefits(7) | | | Life Insurance Benefits(8) | | | 7,033 | | | | — | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | Life Insurance Benefits(8) | | | Outplacement | | Outplacement | | Outplacement | | Outplacement | | Outplacement | | | 20,000 | | | | — | | | | | | | | | Total | | | 2,759,839 | | | | 1,250,650 | | | | | | | | | Total | | Total | | Total | | Total | |
| (1) | Represents three times annual base salary for Mr. Baker.Messrs. Baker and Sienko. Represents two times annual base salary for Messrs. Roberts, Lawlar, Clary, and Brown. |
| (2) | Represents three times the highest STIP payment paid in the last three years for Mr. Baker.Messrs. Baker and Sienko. Represents two times the highest STIP payment paid in the last three years to Messrs. Roberts, Lawlar, Clary, and Brown. |
74 www.hecla.com
Other Benefits
| (3) | In the event of a qualifying termination following a change in control, any unvested RSUs will become immediately earned and vested as of the date of the change in control termination. In the event of termination by reason of disability or death, the unvested RSUs will become immediately earned and vested as of the date of disability or death. The value is based on the closing price of Hecla’s common stock on the NYSE on December 30, 202229, 2023 ($5.56)4.81). Please see the Outstanding Equity Awards at Calendar Year-End for 20222023 table on page 6571 for more information. |
| (4) | For unearned PSUs, the values included in the table are based on the number of unearned PSUs that would have vested if termination occurred on the last business day of 2022,2023, assuming target performance (210,178(351,762 shares for Mr. Baker, 64,182 shares for Mr. Roberts, 43,30472,913 shares for Mr. Lawlar, 41,04768,374 shares for Mr. Clary, and 39,28464,334 shares for Mr. Brown, and 62,530 shares for Mr. Sienko, multiplied by the closing price of our common stock on the NYSE on December 30, 202229, 2023 ($5.56)4.81). In the event of a change in control, any unearned performance-based shares will become immediately earned and vested as of the date of the change in control. In the event of termination by reason of disability or death, the unearned performance-based shares will become immediately earned and vested as of the date of disability or death. The totals listed in the disability and death columns are based on the number of performance-based shares that would have vested if disability or death would have occurred on the last business day of 20222023 assuming target performance for each of the NEOs, multiplied by the closing price of our common stock on the NYSE on December 30, 202229, 2023 ($5.56)4.81). |
| (5) | Represents three times the highest LTIP payment paid in the last three years for Mr. Baker.Messrs. Baker and Sienko. Represents two times the highest LTIP payment paid in the last three years for Messrs. Roberts, Lawlar, Clary, and Brown. |
| (6) | Represents the prorated portion of outstanding LTIP plans for 2021-20232022-2024 and 2022-2024.2023-2025. |
| (7) | Reflects the estimated lump-sum value of all future premiums, which will be paid by the Company on behalf of Mr.Messrs. Baker and Sienko under our health and welfare benefit plans for three years upon a termination following a change in control. Reflects the estimated lump-sum value of all future premiums, which will be paid by the Company on behalf of Messrs. Roberts, Lawlar, Clary, and Brown under our health and welfare benefit plans for two years upon a termination following a change in control. |
| (8) | Reflects the estimated lump-sum value of the cost of coverage for life insurance provided by us to each NEO. |
| | | | | | | | | 2024 Proxy Statement | 81 |
CEO Pay Ratio We believe our executive compensation program should be internally consistent and equitable to motivate our employees to create shareholder value. Our committee strives to design a fair and competitive compensation program that will attract, motivate, and retain employees, reward performance, and provide incentives based on our performance. As required by SEC rules, the committee reviewed a comparison of CEO pay to the pay of our “median employee.” As permitted by SEC rules we can use the same median employee in 2022 that we identified in 2021 for calculating our CEO pay ratio unless there have been changes in the employee population or employee compensation arrangements that we reasonably believe would result in a significant change in our pay ratio disclosure. The total compensation for the median employee was calculated in the same manner as our CEO for 2022.2023. Below is (i) the calendar year 20222023 annual total compensation of our CEO, Mr. Baker; (ii) the calendar year 20222023 annual total compensation of our median employee; and (iii) the ratio of the annual total compensation of our CEO to that of our median employee. | CEO PAY RATIO | CEO PAY RATIO | | | | | 2022 CEO Annual Total Compensation | | $ | 5,239,132 | | 2022 Median Employee Annual Total Compensation | | $ | 100,870 | | | 2023 CEO Annual Total Compensation | | 2023 CEO Annual Total Compensation | | 2023 CEO Annual Total Compensation | | 2023 CEO Annual Total Compensation | | | $ | 6,013,471 | | | 2023 Median Employee Annual Total Compensation | | 2023 Median Employee Annual Total Compensation | | 2023 Median Employee Annual Total Compensation | | 2023 Median Employee Annual Total Compensation | | | $ | 100,579 | | | CEO to Median Employee Pay Ratio | | | 52 to 1 | | CEO to Median Employee Pay Ratio | | CEO to Median Employee Pay Ratio | | CEO to Median Employee Pay Ratio | | | | 60:1 | |
2023 Proxy Statement 75
Other Benefits
| | | | | 82 | 2024 Proxy Statement | | | | |
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the followingcertain information about the relationship between executive compensation actually paid to certain individuals by the Company and certain financial performance of the Company. For further information concerning the Company’s philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis section of this Proxy Statement. Any differences in total values are due to rounding. | | | | | | | | | | Average Summary Compensation Table Total for Non-PEO NEOs (3) | | | Average Compensation Actually Paid to Non-PEO NEOs (4) | | | Value of Initial Fixed td00
Investment Based On: | | | | | | | | | | | | | Average Summary Compensation Table Total for Non-PEO | | Average Compensation Actually Paid to Non-PEO | | | Value of Initial Fixed td00
Investment Based On: | | | | | | | | Summary Compensation Table Total for PEO (1) | | | Compensation Actually Paid to PEO (2) | | | Total Shareholder Return (5) | | | Peer Group Total Shareholder Return (6) | | | Net (Loss) Income (millions) (7) | | Adjusted EBITDA Less Capital (thousands) (8) | | | Summary
Compensation
Table Total for
PEO (1) | | Compensation
Actually Paid
to PEO (2) | | | | Peer Group
Total
Shareholder
Return (6) | | Net (Loss)
Income
(millions) (7) | | Adjusted
EBITDA Less
Capital
(thousands) (8) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | | 2023 | | | 2023 | | | 2023 | | | | 4,142,554 | | | | 2,922,539 | | | | 1,390,524 | | | | 682,571 | | | | 144.62 | | | | 125.65 | | | | (84.2 | ) | | | (11.3 | ) | | | 2022 | | | 4,579,866 | | | | 6,145,949 | | | | 1,459,386 | | | | 1,725,457 | | | | 166.27 | | | | 117.47 | | | | (37.3 | ) | | 69,841 | | | 2022 | | | 2022 | | | 2022 | | | | 4,579,866 | | | | 6,145,949 | | | | 1,408,227 | | | | 1,674,298 | | | | 166.27 | | | | 118.52 | | | | (37.3 | ) | | | 69.8 | | | | 2021 | | | 3,765,100 | | | | 3,177,762 | | | | 915,927 | | | | 305,615 | | | | 155.48 | | | | 135.75 | | | | 35.1 | | | 169,925 | | | 2021 | | | 2021 | | | 2021 | | | | 3,765,100 | | | | 3,177,762 | | | | 915,927 | | | | 305,615 | | | | 155.48 | | | | 127.24 | | | | 35.1 | | | | 169.9 | | | | 2020 | | | 5,190,508 | | | | 7,046,358 | | | | 1,631,356 | | | | 2,457,104 | | | | 191.63 | | | | 132.26 | | | | (9.5 | ) | | 130,745 | | | 2020 | | | 2020 | | | 2020 | | | | 5,190,508 | | | | 7,046,358 | | | | 1,631,356 | | | | 2,457,104 | | | | 191.63 | | | | 136.04 | | | | (9.5 | ) | | | 130.7 | |
| (1) | This column represents the amount of total compensation reported for Mr. Baker, our Principal Executive Officer (“PEO”), for each corresponding year in the “Total” column of the Summary Compensation Table (“total compensation”). Please refer to the Summary Compensation Table in this Proxy Statement on page 61.67. |
| (2) | This column represents the amount of “compensation actually paid” to Mr. Baker, 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. Baker during the applicable calendar year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Baker’s total compensation for each year 2023 to determine the “compensation actually paid” : in calendar year 2023: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table Total for PEO (a) | | | Summary Compensation Table Value of PEO Equity Awards (b) | | | Adjusted Value of Equity Awards (c) | | | Reported
Summary
Compensation
Table Change
in Value | | | Pension Benefits Adjustments (e) | | | Compensation
Actually Paid
to PEO | | | 2022 | | | 4,579,866 | | | | (1,205,255 | ) | | | 2,455,862 | | | | — | | | | 315,476 | | | | 6,145,949 | | | 2021 | | | 3,765,100 | | | | (1,370,005 | ) | | | 1,153,661 | | | | (824,973 | ) | | | 453,979 | | | | 3,177,762 | | | 2020 | | | 5,190,508 | | | | (937,292 | ) | | | 3,967,769 | | | | (1,628,345 | ) | | | 453,718 | | | | 7,046,358 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Summary
Compensation
Table Total for
PEO (a) | | | Summary
Compensation
Table Value of
PEO Equity
Awards (b) | | | Adjusted Value
of Equity
Awards (c) | | | Reported
Summary
Compensation
Table Change
in Value | | | Pension Benefits
Adjustments (e) | | | Compensation
Actually Paid
to PEO | | | | | | | | | | 2023 | | | 4,142,554 | | | | (1,216,206 | ) | | | 386,110 | | | | (685,029 | ) | | | 295,110 | | | | 2,922,539 | |
| | (a) | This column represents the amount of total compensation reported for Mr. Baker for each correspondingcalendar year 2023 in the “Total” column of the Summary Compensation Table. Please refer to the Summary Compensation Table in this Proxy Statement on page 61.67. |
| | (b) | This column represents the aggregate grant date fair value of equity awards reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year.calendar year 2023. Please refer to the Summary Compensation Table in this Proxy Statement on page 61.67. The amount in this column is replaced with the amount reported under the Adjusted Value of 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 in this Proxy Statement for the applicablecalendar year (a “Subject Year”). For a Subject Year, the2023. The adjusted amount replaces the “Stock Awards” column in the Summary Compensation Table for Mr. Baker for that Subject Year.calendar year 2023. The adjusted amount is determined by adding (or subtracting, as applicable) the following for that Subject Year: (i)calendar year 2023: the calendaryear-end fair value of any equity awards granted in the Subject Yearcalendar year 2023 that are outstanding and unvested as of the end of the Subject Year;calendar year 2023; (ii) the amount of change as of the end of the Subject Yearcalendar year 2023 (from the end of the prior calendar year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the Subject Year;calendar year 2023; (iii) for awards that are granted and vest in the Subject Year,calendar year 2023, the fair value as of the vesting date; (iv) for awards granted in prior calendar years that vest in the Subject Year,calendar year 2023, the amount equal to the change as of the vesting date (from the end of the prior calendar year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the Subject Year,calendar year 2023, a deduction for the amount equal to the fair value at the end of the prior calendar year; and (vi) the dollar value of any dividends or other earnings paid on stock awards in the Subject Yearcalendar year |
| | | | | | | | | 2024 Proxy Statement | 83 |
| 2023 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.calendar year 2023. The amounts added or subtracted to determine the adjusted amount for calendar year 2023 are as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year End
Fair Value
of Equity
Awards
Granted in
the Year | | | Year over
Year
Change in
Fair Value
of
Outstanding
and
Unvested
Equity
Awards at
FYE
Granted in
Prior Years | | | Fair
Value as
of
Vesting
Date of
Equity
Awards
Granted
and
Vested in
the Year | | | Change
in Fair
Value of
Equity
Awards
Granted
in Prior
Years
that
Vested in
the Year | | | Fair Value
at the End
of the
Prior Year
of Equity
Awards
that Failed
to Meet
Vesting
Conditions
in the Year | | | | | | | | | 2022 | | | 1,822,337 | | | | 460,994 | | | | — | | | | 172,531 | | | | — | | | | — | | | | 2,455,862 | | | 2021 | | | 751,905 | | | | 177,778 | | | | — | | | | 223,978 | | | | — | | | | — | | | | 1,153,661 | | | 2020 | | | 2,194,058 | | | | 1,851,672 | | | | — | | | | (77,961 | ) | | | — | | | | — | | | | 3,967,769 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year End
Fair Value
of Equity
Awards
Granted in
the Year | | | Year over
Year
Change in
Fair Value
of
Outstanding
and
Unvested
Equity
Awards at
FYE
Granted in
Prior Years | | | Fair
Value as
of
Vesting
Date of
Equity
Awards
Granted
and
Vested in
the Year | | | Change
in Fair
Value of
Equity
Awards
Granted
in Prior
Years
that
Vested
in
the
Year | | | Fair Value
at the End
of the
Prior Year
of Equity
Awards
that Failed
to Meet
Vesting
Conditions
in the Year | | | | | | | | | | | | | | | | | 2023 | | | 1,129,841 | | | | (577,306 | ) | | | — | | | | (166,425 | ) | | | — | | | | — | | | | 386,110 | |
The fair value or change in fair value, as applicable, of equity awards was determined by reference to (1) for RSU awards, the closing price of our common stock on the applicable measurement date and (2) for PSU awards, a Monte Carlo simulation as of the applicable measurement date. | | (d) | The amounts included in this column are the amounts reported in the “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for each applicable year.calendar year 2023 corresponding to the aggregate change in the actuarial present value of Mr. Baker’s accumulated benefit under all defined benefit and actuarial pension plans. Please refer to the Summary Compensation Table in this Proxy Statement on page 61.67. |
| | (e) | The total pension benefit adjustments for each applicablecalendar year 2023 include the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Baker during the applicablecalendar year 2023 (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicablecalendar year 2023 that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments for calendar year 2023 are as follows: |
| | | | | | | | | | | | | | | | | | 2022 | | 315,476 | | — | | | 315,476 | | | 2021 | | 453,979 | | — | | | 453,979 | | | 2020 | | 453,718 | | — | | | 453,718 | |
| (3) | This column represents the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Baker) in the “Total” column of the Summary Compensation Table in each applicable year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 6167 for the applicable calendar year. The names of each of the NEOs (excluding Mr. Baker) included for purposes of calculating the average amounts in each applicable calendar year are as follows: (i) for 2023, Messrs. Roberts, Lawlar, Brown, Sienko and Clary; (ii) for 2022, Messrs. Roberts, Lawlar, Brown, Sienko and Clary; (ii)and (iii) for 2021, Messrs. Roberts, Lawlar, Brown, Sienko and Hall; and (iii) for 2020, Messrs. Roberts, Lawlar, Brown, Sienko and Hall. |
| (4) | This column represents the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Baker), 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. Baker) during the applicable calendar year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Baker) for eachcalendar year to determine the “compensation actually paid” , in calendar year 2023, using the same adjustment methodology described above in Note 2(c): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Reported Summary Compensation Table Total for Non-PEO NEOs (a) | | | Summary Compensation Table Value of Non-PEO NEO Equity Awards (b) | | | PEO NEO
Adjusted Value
of Equity | | | Average Reported
Summary
Compensation
Table Change in
Value of Pension Benefits for Non- | | | Pension Benefits Adjustments for Non-PEO NEOs | | | Average Compensation Actually Paid to Non-PEO NEOs | | | 2022 | | | 1,459,386 | | | | (319,176 | ) | | | 561,672 | | | | (26,607 | ) | | | 50,182 | | | | 1,725,457 | | | 2021 | | | 915,927 | | | | (302,821 | ) | | | (248,745 | ) | | | (130,636 | ) | | | 71,890 | | | | 305,615 | | | 2020 | | | 1,631,356 | | | | (432,168 | ) | | | 1,381,713 | | | | (200,467 | ) | | | 76,670 | | | | 2,457,104 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Reported Summary Compensation Table Total for Non-PEO NEOs (a) | | Summary Compensation Table Value of Non-PEO NEO Equity Awards (b) | | PEO NEO
Adjusted Value
of Equity | | Average Reported
Summary
Compensation
Table Change in
Value of Pension
Benefits for Non- | | Pension Benefits Adjustments for Non-PEO NEOs | | Average
Compensation
Actually Paid to | | | | | | | | | 2023 | | | | 1,390,524 | | | | | (335,549 | ) | | | | (69,460 | ) | | | | (353,139 | ) | | | | 50,195 | | | | | 682,571 | |
Other Benefits
| | | | | 84 | 2024 Proxy Statement | | | | |
| | (a) | This column represents the average of the amounts reported for the Company’s NEOs as a group (excluding (excluding Mr. Baker) in the “Total” column of the Summary Compensation Table in each applicable year.for calendar year 2023. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 6167 for the applicable year. |
| | (b) | This column represents the average of the total amounts reported for the NEOs as a group (excluding Mr. Baker) in the “Stock Awards” column in the Summary Compensation Table in each applicable year.calendar year 2023. Please refer to the Summary Compensation Table in the Company’s Proxy Statement on page 6167 for the applicable calendar year. The amount in this column is replaced with the amount reported under the Averagenon-PEO NEO Adjusted Value of Equity Awards column in order to arrive at compensation actually paid. |
| | (c) | This column represents an adjustment to the average of the amounts reported for the NEOs as a group (excluding Mr. Baker) in the “Stock Awards” column in the Summary Compensation Table in each applicablefor calendar year 2023 determined using the same methodology described above in Note 2(c). For eachcalendar year 2023, the adjusted amount replaces the “Stock Awards” column in the Summary Compensation Table for each NEO (excluding Mr. Baker) for that year. The amounts added or subtracted to determine the adjusted average amount for calendar year 2023 are as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average Year End Fair Value of Equity Awards Granted in the Year to Non-PEO NEOs | | | Average
Year over
Year
Change in
Fair Value
of
Outstanding
and
Unvested
Equity
Awards at
FYE
Granted in
Prior Years | | | Average
Fair
Value as
of
Vesting
Date of
Equity
Awards
Granted
in the
Year and
Vested
in the
Year | | | Average
Change
in Fair
Value of
Equity
Awards
Granted
in Prior
Years
that
Vested
in the
Year | | | Average
Fair Value
at the End
of the
Prior Year
of Equity
Awards
that Failed
to Meet
Vesting
Conditions
in the | | | Value of
Dividends or
other
Earnings Paid
on Stock or
Option
Awards not
Otherwise
Reflected in
Fair Value or
Total
Compensation
in the
Summary
Compensation
Table for the
Year | | | Adjusted
Average
Value of
Equity | | | 2022 | | | 465,379 | | | | 94,528 | | | | — | | | | 1,765 | | | | — | | | | — | | | | 561,672 | | | 2021 | | | 171,652 | | | | (11,051 | ) | | | — | | | | 56,886 | | | | (466,232 | ) | | | — | | | | (248,745 | ) | | 2020 | | | 828,835 | | | | 584,044 | | | | — | | | | (31,166 | ) | | | — | | | | — | | | | 1,381,713 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Average Year End Fair Value of Equity Awards Granted in the Year to Non-PEO NEOs | | Average
Year over
Year
Change in
Fair Value
of
Outstanding
and
Unvested
Equity
Awards at
FYE
Granted in
Prior Years | | Average
Fair
Value as
of
Vesting
Date of
Equity
Awards
Granted
in the
Year and
Vested
in the
Year | | Average
Change
in Fair
Value of
Equity
Awards
Granted
in Prior
Years
that
Vested
in the
Year | | Average
Fair Value
at the End
of the
Prior Year
of Equity
Awards
that Failed
to Meet
Vesting
Conditions
in the | | Value of
Dividends or
other
Earnings Paid
on Stock or
Option
Awards not
Otherwise
Reflected in
Fair Value or
Total
Compensation
in the
Summary
Compensation
Table for the
Year | | | | | | | | | | | | 2023 | | | | 218,895 | | | | | (92,765 | ) | | | | — | | | | | (39,702 | ) | | | | (155,888 | ) | | | | — | | | | | (69,460 | ) |
The fair value or change in fair value, as applicable, of equity awards was determined by reference to (1) for RSU awards, the closing price of our common stock on the applicable measurement date, and (2) for PSU awards, a Monte Carlos simulation as of the applicable measurement date. | | (d) | The amounts included in this column represent the average of the amounts reported in “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for the NEOs as a group (excluding Mr. Baker) in each applicable year.calendar year 2023 corresponding to the aggregate change in the actuarial present value of the NEOs’ as a group (excluding Mr. Baker) accumulated benefit under all defined benefit and actuarial pension plans.. Please refer to the Summary Compensation Table in the Company’sthis Proxy Statement on page 61 for the applicable year.67. |
| | (e) | The total pension benefit adjustments for each applicablecalendar year 2023 are the aggregate of two components, averaged for the NEOs as a group (excluding Mr. Baker) in each applicable year:calendar year 2023: (i) the actuarially determined service cost for services rendered by the applicable NEO during the applicablecalendar year 2023 (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicablecalendar year 2023 that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments for calendar year 2023 are as follows: |
| | | | | | | | | | | | | | | | | | Total Pension
Benefit
Adjustments | | | 2022 | | | 50,182 | | | — | | | 50,182 | | | 2021 | | | 71,890 | | | — | | | 71,890 | | | 2020 | | | 76,670 | | | — | | | 76,670 | |
| | | | | | | | | | | | | | | | | | Pension
Benefit
Adjustments | | | | | | | 2023 | | | 50,195 | | | — | | | 50,195 | |
| (5) | This column represents cumulative Company TSR. TSR is calculated by dividing the sum of the cumulative amount of dividends for each measurement period (2020, 2020-2021(2020-2021, 2020-2022 and 2020-2022)2020-2023), assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
| (6) | (6) | This column represents cumulative peer group TSR computed in accordance with Note 5. The peer group used for this purpose is the following published industry index: Philadelphia Gold and Silver Index. We selected the Philadelphia Gold and Silver Index as the peer group TSR for fiscal 2023 because it is the same index that is used by the Company in the performance graph in the Company’s Form10-K for calendar year 2023. The peer group is different than the peer group used in this disclosure in the Proxy Statement filed for calendar year 2022, which was the S&P 500 Gold Index. The cumulative peer group TSR of the S&P 500 Gold Index (computed in accordance with Note 5), our peer group for calendar year 2022, was $76.58, $117.47, $135.75, and $132.26 for 2020-2023, 2020-2022, 2020-2021 and 2020, respectively. |
| (7) | This column represents the amount of net income reflected in the Company’s audited financial statements for the applicable year. |
| | | | | | | | | 2024 Proxy Statement | 85 |
| (8) | Adjusted EBITDA Less Capital is calculated as net (loss) income before the following items: interest expense, income tax benefit, depreciation, depletion, and amortization expense, ramp-up and suspension costs, loss on disposition of properties, plants, equipment and mineral interests, , foreign exchange gain, unrealized (gain) loss on derivative contracts, provisional price loss gain)(gain), provision for closed operations and environmental matters, stock-based compensation, unrealized loss on investments, adjustment of inventory to net realizable value, monetization of zinc and lead hedges and other income (“adjusted EBITDA”) less capital expenditures at the Company’s operations. |
| (9) | Due to an administrative error, the calendar year 2022 entries under the “Average Summary Compensation Table Total forNon-PEO NEOs” and the “Average Compensation Actually Paid to Non-PEO NEOs” were overreported. The adjusted values are reflected in this table. Due to the administrative error, the previously reported amounts were $1,459,386 and $1,725,457, respectively. |
Financial Performance Measures As described in greater detail in the Compensation Discussion and AnalysisCD&A section of this Proxy Statement, the Company’s executive compensation program reflects a philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed calendar year, to the Company’s performance are as follows: Adjusted EBITDA Less Capital Expenditures atCapital; Silver Equivalent Production Growth; Exploration Metrics (adding reserves and resources); All-Injury Frequency Rate;Sustainalytics ESG Rating; Mine Site Operating MinesCash Flow Less Capital; and TSR relative to the peer group described on page 40
Adjusted EBITDA Less Capital; Relative Total Shareholder Return. Description of the Information Presented in the Pay versus Performance Table As described in greater detail in the CD&A section of this Proxy Statement, the Company’s executive compensation program reflects a philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance (as described in greater detail in the CD&A section of this Proxy Statement), not all of those Company measures are presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. Compensation actually paid is influenced by numerous factors, including but not limited to the timing of new grant issuances and outstanding grant vesting, share price volatility during the calendar year, our mix of short andshort-and long-term metrics, and many other factors. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The TSR of the Company, assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $144.62, $166.27, $155.48, and $191.63 for 2020-2023, 2020-2022 , 2020-2021 and 2020, respectively. The TSR of the Company’s peer group selected for this fiscal year (the Philadelphia Gold and silver Index), assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of RegulationS-K, was $125.65, $118.52, $127.24, and $136.04 for 2020-2023, 2020-2022, 2020-2021 and 2020, respectively. The TSR of the Company’s peer group selected for the immediately preceding calendar year (the S&P 500 Gold Index), assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $76.58, $117.47, $135.75, and $132.26 for 2020-2023, 2020-2022, 2020-2021 and 2020, respectively. Please see Note 5 and Note 6, above, for additional information related to the computation of Company TSR and peer group TSR, respectively. Compensation Actually Paid and Cumulative Company TSR The compensation actually paid to our CEO, as computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $2,922,539, $6,145,949, $3,177,762, and $7,046,358 for 2023, 2022, 2021 and 2020, respectively. The avera
ge average amount of
| | | | | 86 | 2024 Proxy Statement | | | | |
compensation actually paid to the other NEOs as a group (excluding Mr. Baker), as computed in accordance with Item 402(v) of Regulation S-K, was $1,725,457,$682,571, $1,674,298, $305,615, and $2,457,104 for 2023, 2022, 2021 and 2020, respectively. The TSR of the Company, assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $144.62, $166.27, $155.48, and $191.63 for$191.63 f or 2020-2023, 2020-2022, 2020-2021 and 2020, respectively. Please see Note 5 above for additional information related to the computation of Company TSR. Compensation Actually Paid and Company Net (Loss) Income The compensation actually paid to our CEO, as computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $2,922,539, $6,145,949, $3,177,762, and $7,046,358 for 2023, 2022, 2021 and 2020, respectively. The average amount of compensation actually paid to the other NEOs as a group (excluding Mr. Baker), as computed in accordance with Item 402(v) of Regulation S-K, was $1,725,457,$682,571, $1,674,298, $305,615, and $2,457,104 for 2023, 2022, 2021 and 2020, respectively. The Company’s net (loss) income, as computed in accordance with Item 402(v) of Regulation S-K and reflected in the Company’s audited financial statements for the applicable year, was ($ 84.2) million, ($37.3) million, $35.1 million, and ($9.5) million for 2023, 2022, 2021 and 2020, respectively.
Compensation Actually Paid and Company Adjusted EBITDA Less Capital The compensation actually paid to our CEO, as computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $2,922,539, $6,145,949, $3,177,762, and $7,046,358 for 2023, 2022, 2021 and 2020, respectively. The average amount of compensation actually paid to the other NEOs as a group (excluding Mr. Baker), as computed in accordance with Item 402(v) of Regulation S-K, was $1,725,457,$682,571, $1674,298, $305,615, and $2,457,104 for 2023, 2022, 2021 and 2020, respectively. The Company’s Adjusted EBITDA Less Capital, computed as described in Note 8 above, was ($11.3) million, $69.8 million, $169.9 million, and $130.7 million, for 2023, 2022, 2021 and 2020, respectively.
PROPOSAL 4Other Matters
APPROVAL, ON AN ADVISORY BASIS, OF THE FREQUENCY OF OUR SAY-ON-PAY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION
Pursuant to Section 14A of the Exchange Act and the Dodd-Frank Act, we are required to provide shareholders with the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently to vote on future advisory votes on the compensation of our NEOs (commonly referred to as “Say-on-Pay”). Shareholders may indicate whether they would prefer that the Company conduct future advisory votes on executive compensation once every one, two or three years (commonly referred to as “Say-on-Frequency”).
At our 2011 and 2017 annual meetings, shareholders voted for annual Say-on-Pay advisory votes on NEO compensation. The Company has held advisory Say-on-Pay votes on the compensation of our NEOs at every subsequent annual meeting. We are required to hold a Say-on-Frequency vote every six years.
The Board has determined that an advisory vote on NEO compensation that occurs every year is the most appropriate alternative for the Company and recommends shareholders vote for that option. In determining the recommendation that shareholders vote for a frequency of every year, the Board considered that it would allow for frequent input from our shareholders on our compensation philosophy, policies, and practices. Similarly, any shareholder concerns about our NEO compensation program can be expressed through a vote without having to wait two or three years.
The vote on the frequency of Say-on-Pay is advisory only. This means that the Say-on-Frequency vote is not binding on the Company, the Board, or the Compensation Committee. The Company recognizes shareholders may have different views as to the best approach for the Company. The Board and the Compensation Committee will take into account the outcome of the vote; however, when considering the frequency of future advisory votes on executive compensation, the Board may decide it is in the best interests of our shareholders and the Company to hold an advisory vote on executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders.
Shareholders may cast a vote on the preferred voting frequency by selecting the option of one year, two years, or three years (or abstain) when voting.
The frequency option – one year, two years, or three years – that receives the most votes “FOR” of all votes cast on the proposal will be the frequency option approved by the shareholders.
Required Vote
The advisory vote on the frequency of our Say-on-Pay votes for NEO compensation requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in person or by proxy. See What votes are required for the Proposals on page 88. In the event that none of the frequency options – one year, two years, or three years – receives a majority of votes cast on the proposal at the Annual Meeting, whether in person or by proxy, we will deem the frequency option that receives the most affirmative votes of all votes cast on the proposal to be the frequency option preferred by the shareholders.
You may vote “ONE YEAR,” “TWO YEARS,” “THREE YEARS,” or “ABSTAIN” on the proposal.
| | | | | | | | The Board recommends that you vote for the option of “ONE YEAR” as the preferred frequency for advisory votes on the frequency of our Say-on-Pay votes on NEO compensation.
| | | |
2023 Proxy Statement 81
OTHER MATTERS
Certain Relationships and Related Party Transactions Transactions with related persons are those that involve our directors, executive officers, director nominees, greater than 5% shareholders, immediate family members of these persons, or entities in which one of these persons has a direct or indirect material interest. Transactions that are reviewed as related party transactions by us are transactions that involve amounts that would exceed $120,000 (the current threshold required to be disclosed in the Proxy Statement under SEC and NYSE rules) and certain other transactions. Pursuant to our Code of Conduct, employees and directors have a duty to report any potential conflicts of interest to the appropriate level of management or to the Governance Committee. Our Board and NEOs respond to a quarterly related party transaction questionnaire prepared by our corporate legal department. We then evaluate these quarterly reports along with responses to our annual director and officer questionnaires for any indication of possible related party transactions. Our legal staff is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related party transactions. If a transaction is deemed by us to be a related party transaction, the information regarding the transaction is discussed with the Board. As required under the SEC rules, transactions that are determined to be directly or indirectly material to Hecla or a related party are disclosed in our Proxy Statement. In 2022,2023, we had no related party transactions and, as of the date of this Proxy Statement, no related party transactions are proposed. Political Contributions and Engagement Government policy is one of the most powerful external forces affecting Hecla today. New laws and changes to existing laws can fundamentally impact the Company’s operations and the markets where we do business – and in turn, our bottom line, thereby affecting us and our employees, retirees, communities, and shareholders. It is important for government leaders to understand the impact of such actions. Because the impact of government policy is so critical to our survival and success, we participate in the political process and advocate in a responsible and constructive manner on issues that advance the Company’s goals and protect shareholder value. We are committed to the highest standard of ethical conduct in our involvement in policymaking and political process. We maintain the Hecla Mining Company Political Action Committee (“Hecla PAC”), which is a forum for our employees and directors to voluntarily contribute to a fund that supports the election of candidates to Congress that support a regulatory and legislative environment constructive to the operation and development of our mines. The Hecla PAC is organized under the provisions of the Federal Election Campaign Act of 1971, as amended. Decisions about contributions to specific federal candidates are made by members of the Hecla PAC. In total, our employees contributed approximately $27,650,$5,525, and our directors $7,500$5,000, to the Hecla PAC in 2022.2023. The Hecla PAC then contributed those funds to federal candidates, state and local parties, and associations who are advocates for the natural resources industry. We file all required Hecla PAC contribution reports with the Federal Election Commission. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors, executive officers, and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership and changes in the ownership of our common stock. These persons are required by the SEC to furnish us with copies of all Section 16(a) forms they file. The SEC has designated specific due dates for these reports, and we must identify in this Proxy Statement those persons who did not file these reports when due. To our knowledge, and based solely on our review of copies of such forms, or written representations from certain reporting persons that no such forms were required, we believe that during the calendar year ended December 31, 2023, all filing requirements applicable to our officers, directors and greater than 10% owners of our common stock were timely satisfied, with the exception of Carlos Aguiar, our Vice President – Operations filing a late Form 3 on February 5, 2024, to report shares directly held, unvested PSUs, and unvested RSUs which were held by him as of December 15, 2023, when he became a reporting officer of Hecla under Rule 16a-1(f) under the Exchange Act when he was appointed as Vice President – Operations. Shareholder proposals to be included in next year’s Proxy Statement We will comply with Rule 14a-8 under the Exchange Act with respect to any shareholder proposals that meet that rule’s requirements. We will review shareholder proposals intended to be included in our Proxy Statement for the 2024 Annual Meeting of Shareholders which are received by us at our principal executive offices located at 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho 83815-9408, no later than December 13, 2023.5, 2024. Such proposals must be submitted in writing and should be sent to the attention of our Corporate Secretary. 
| | | | | 88 | 2024 Proxy Statement | | | | |
You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making shareholder proposals and nominating director candidates. Security Ownership of Certain Beneficial Owners and Management The following table shows the number and percentage of shares of common stock each director and each executive officer named in the Summary Compensation Table for 20222023 beneficially owned as of March 24, 2023,18, 2024, our record date for the Annual Meeting, as well as the number owned by all directors and executive officers as a group. On the record date, all such persons together beneficially owned an aggregate of 1.3%1.4% of the outstanding shares of our common stock. Except as otherwise indicated, the directors, nominees and officers have sole voting and investment power with respect to the shares listed, including shares which the individual has the right to acquire, but has not done so. | | | | | | | | | | | | | | | | | | | | | | | Title of
Class | | | Shares Beneficially Owned | | | Percent of
Class | | | | | Name of Beneficial Owner | | Number | | | Nature | | | | | Phillips S. Baker, Jr. President and CEO | | | | | | | 3,361,288 | | | | Direct | (1) | | | | | | | | | | | | | | | 52,022 | | | | 401(k) Plan | | | | | | | | | | | | | | | | | 260,552 | | | | RSU | (2) | | | | | | | | | | | | | | | | 1,795,964 | | | | Deferred | (3) | | | | | | | | | | | | | | | | 288,310 | | | | PSU | (4) | | | | | | | | | | | | | | | | | | Common | | | | 5,758,136 | | | | | | | | * | | | | | | Robert D. Brown Vice President – Corporate Development & Sustainability | | | | | | | 391,394 | | | | Direct | (1) | | | | | | | | | | | | | | | — | | | | 401(k) Plan | | | | | | | | | | | | | | | | 69,380 | | | | RSU | (2) | | | | | | | | | | | | | | | | 51,009 | | | | PSU | (4) | | | | | | | | | | | | | | | | | | Common | | | | 511,783 | | | | | | | | * | | | | | | Michael L. Clary Senior Vice President – Chief Administrative Officer | | | | | | | 120,128 | (6) | | | Direct | (1) | | | | | | | | | | | | | | | 8,097 | | | | 401(k) Plan | | | | | | | | | | | | | | | | | 75,269 | | | | RSU | (2) | | | | | | | | | | | | | | | | 54,415 | | | | PSU | (4) | | | | | | | | | | | | | | | | | | Common | | | | 257,909 | | | | | | | | * | | | | | | Russell D. Lawlar Senior Vice President – Chief Financial Officer | | | | | | | 123,322 | | | | Direct | (1) | | | | | | | | | | | | | | | 12,313 | | | | 401(k) Plan | | | | | | | | | | | | | | | | | 80,937 | | | | RSU | (2) | | | | | | | | | | | | | | | | 58,954 | | | | PSU | (4) | | | | | | | | | | | | | | | | | | Common | | | | 275,526 | | | | | | | | * | | | | | | David C. Sienko Vice President – General Counsel | | | | | | | 772,607 | | | | Direct | (1) | | | | | | | | | | | | | | | 11,435 | | | | 401(k) Plan | | | | | | | | | | | | | | | | | 67,277 | | | | RSU | (2) | | | | | | | | | | | | | | | | 49,840 | | | | PSU | (4) | | | | | | | | | | | | | | | | | | Common | | | | 901,159 | | | | | | | | * | | | | | | Catherine J. Boggs Director | | | | | | | 138,185 | | | | Direct | (1) | | | | | | | | | | | | | | | 117,214 | | | | Indirect | (5) | | | | | | | | | | | | | | | | | | Common | | | | 255,399 | | | | | | | | * | | | | | | George R. Johnson Director | | | | | | | 25,773 | | | | Direct | (1) | | | | | | | | | | | | | | | 222,392 | | | | Indirect | (5) | | | | | | | | | | | | | | | | | | Common | | | | 248,165 | | | | | | | | * | | | | | | Stephen F. Ralbovsky Director | | | | | | | 39,630 | | | | Direct | (1) | | | | | | | | | | | | | | | 188,885 | | | | Indirect | (5) | | | | | | | | | | | | | | | | | | Common | | | | 228,515 | | | | | | | | * | | | | | |
82 www.hecla.com
Other Matters
| | | | | | | | | | | | | | | | | | Title of
Class | | | Shares Beneficially Owned | | Percent of
Class | | Name of Beneficial Owner | | Number | | | Nature | Phillips S. Baker, Jr. President and CEO | | | | | | | 3,022,163 | (1) | | Direct(2) | | | | | | | | | | | | 48,373 | | | 401(k) Plan | | | | | | | | | | | | 233,032 | | | RSU(3) | | | | | | | | | | | | 1,795,964 | | | Deferred(4) | | | | | | | | | | | | 210,178 | | | PSU(5) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 5,309,710 | | | | | | * | | Robert D. Brown | | | | | | | 323,134 | | | Direct(2) | | | | | Vice President – Corporate Development & Sustainability | | | | | | | — | | | 401(k) Plan | | | | | | | | | | | | 69,511 | | | RSU(3) | | | | | | | | | | | | 39,284 | | | PSU(5) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 431,929 | | | | | | * | | Michael L. Clary Sr. Vice President and CAO | | | | | | | 64,468 | (6) | | Direct(2) | | | | | | | | | | | | 4,401 | | | 401(k) Plan | | | | | | | | | | | | 77,016 | | | RSU(3) | | | | | | | | | | | | 41,047 | | | PSU(5) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 186,932 | | | | | | * | | Russell D. Lawlar Sr. Vice President and CFO | | | | | | | 19,801 | | | Direct(2) | | | | | | | | | | | | 8,614 | | | 401(k) Plan | | | | | | | | | | | | 65,000 | | | RSU(3) | | | | | | | | | | | | 43,304 | | | PSU(5) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 136,719 | | | | | | * | | Lauren M. Roberts Sr. Vice President and COO | | | | | | | 317,717 | | | Direct(2) | | | | | | | | | | | | 8,450 | | | 401(k) Plan | | | | | | | | | | | | 111,507 | | | RSU(3) | | | | | | | | | | | | 339,119 | | | Deferred(4) | | | | | | | | | | | | 64,182 | | | PSU(5) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 840,975 | | | | | | * | | Catherine J. Boggs Director | | | | | | | 119,425 | | | Direct(2) | | | | | | | | | | | | 110,961 | | | Indirect(7) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 230,386 | | | | | | * | | George R. Johnson Director | | | | | | | 17,273 | | | Direct(2) | | | | | | | | | | | | 197,379 | | | Indirect(7) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 214,652 | | | | | | * | | Stephen F. Ralbovsky Director | | | | | | | 20,870 | | | Direct(2) | | | | | | | | | | | | 182,632 | | | Indirect(7) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 203,502 | | | | | | * | | Charles B. Stanley Director | | | | | | | — | | | Direct(2) | | | | | | | | | | | | 238,765 | | | Indirect(7) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 238,765 | | | | | | * | | Alice Wong Director | | | | | | | | | | Direct(2) | | | | | | | | | | | | 49,287 | | | Indirect(7) | | | | | | | | | | | | | | | | | | | | | | | Common | | | | 49,287 | | | | | | * | | All current directors, director nominees and executive officers as a group (10 individuals) | | | Common | | | | 7,842,857 | | | | | | 1.3 | % |
| | | | | | | | | 2024 Proxy Statement | 89 |
| | | | | | | | | | | | | | | | | | | | | | | | Title of
Class | | | Shares Beneficially Owned | | | Percent of
Class | | | | | Name of Beneficial Owner | | Number | | | Nature | | | | | Charles B. Stanley Director | | | | | | | — | | | | Direct | (1) | | | | | | | | | | | | | | | | 263,778 | | | | Indirect | (5) | | | | | | | | | | | | | | | | | | | Common | | | | 263,778 | | | | | | | | * | | | | | | Alice Wong Director | | | | | | | — | | | | Direct | (1) | | | | | | | | | | | | | | | | 74,300 | | | | Indirect | (5) | | | | | | | | | | | | | | | | | | | Common | | | | 74,300 | | | | | | | | * | | | | | | Mark P. Board Director | | | | | | | 16,950 | | | | Direct | (1) | | | | | | | | | | | | | | | | — | | | | Indirect | (5) | | | | | | | | | | | | | | | | | | | Common | | | | 16,950 | | | | | | | | * | | | | | | | | | | | | All current directors, director nominees and executive officers as a group (11 individuals) | | | Common | | | | 8,791,620 | | | | | | | | 1.4 | % | | | | |
| * | Represents beneficial ownership of less than one percent, based upon 602,191,096616,792,499 shares of our common stock issued and outstanding as of March 24, 2023. |
(1) | Includes 2,581,384 shares held jointly with Mr. Baker’s spouse, as to which Mr. Baker shares voting and investment power.18, 2024.
|
2023 Proxy Statement 83
Other Matters
(2)(1) | “Direct” means shares held of record and any shares beneficially owned through a trust, broker, financial institution, or other nominee, and with respect to which the officer or director has sole or shared voting power. |
(3)(2) | “RSU” means restricted stock units awarded under the 2010 Stock Plan that have not vested. See footnote 1 of the Outstanding Equity Awards at Calendar Year-End for 20222023 on page 65.71. |
(4)(3) | “Deferred Shares” means stock that has vested or been awarded but is deferred until a distributable event under the terms of the KEDCP. See Nonqualified Deferred Compensation for 20222023 on page 69.75. |
(5)(4) | “PSUs” means performance-based equity, based on a three-year TSR. See PSUs on page 5459 and Outstanding Equity Awards at Calendar Year-End for 20222023 table on page 65.71. |
(6) | Includes 7,566 shares held in trust for Mr. Clary’s minor children, as to which Mr. Clary has voting and investment power.
|
(7)(5) | “Indirect” means shares credited to each independent director, all of which are held indirectly in trust pursuant to our Stock Plan for Nonemployee Directors. Each director disclaims beneficial ownership of all shares held in trust under the stock plan. See Compensation of Non-Management Directors on page 28.33. |
To our knowledge, as of March 24, 2023,18, 2024, the only “beneficial owners” (as such term is defined in Rule 13d-3 under the Exchange Act) of more than 5% of our common stock entitled to vote at the Annual Meeting are shown in the table below: | Title of Class | | Name & Address of Beneficial Owner | | Amount & Nature of
Beneficial Ownership | | | Percent of
Class | | | Name & Address of Beneficial Owner | | Amount & Nature of
Beneficial Ownership | | | Percent of Class | | | Common | | The Vanguard Group, Inc.(1) 100 Vanguard Blvd. Malvern, PA 19355 | | | 56,328,352 | | | | 9.4 | % | Common | | Van Eck Associates Corporation(2) 666 Third Ave. – 9th Floor New York, NY 10017 | | | 55,225,222 | | | | 9.2 | % | | The Vanguard Group, Inc.(1) 100 Vanguard Blvd. Malvern, PA 19355 | | | 57,913,541 | | | | 9.4 | % | | Common | | BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | | | 42,687,071 | | | | 7.1 | % | Common | | Wheaton Precious Metals Corp.(4) Suite 3500 – 1021 Hastings St. Vancouver, British Columbia V6E 0C3 Canada | | | 34,800,989 | | | | 5.8 | % | | Van Eck Associates Corporation(2) 666 Third Ave. – 9th Floor New York, NY 10017 | | | 55,225,222 | | | | 9.0 | % | | Common | | Dimensional Fund Advisors LP(5) Building One 6300 Bee Cave Rd. Austin, TX 78746 | | | 32,853,571 | | | | 5.5 | % | Common | | | BlackRock, Inc.(3) 50 Hudson Yards New York, NY 10001 | | | 48,601,203 | | | | 7.9 | % | | Common | | Common | | | Wheaton Precious Metals Corp.(4) Suite 3500 – 1021 West Hastings St. Vancouver, British Columbia V6E 0C3 Canada | | | 34,980,209 | | | | 5.7 | % | | Common | | Common | | | Dimensional Fund Advisors LP(5) Building One 6300 Bee Cave Rd. Austin, TX 78746 | | | 34,919,760 | | | | 5.7 | % |
| (1) | Based solely on a Schedule 13G/A filed on February 9, 2023,13, 2024, with the SEC by The Vanguard Group, Inc. The Vanguard Group, Inc. has shared voting power with respect to 381,224548,439 shares, sole dispositive power with respect to 55,398,40456,736,003 shares, and shared dispositive power with respect to 929,9481,177,538 shares. The aggregate amount of shares beneficially owned is 57,913,541 shares. |
| (2) | Based solely on a Schedule 13G/A filed on February 14, 2023,2024, with the SEC by Van Eck Associates Corporation. Van Eck Associates Corporation has sole voting and dispositive power with respect to all shares. |
| | | | | 90 | 2024 Proxy Statement | | | | |
| (3) | Based solely on a Schedule 13G/A filed on January 31, 2023,26, 2024, with the SEC by BlackRock, Inc. BlackRock, Inc. has sole voting power with respect to 41,505,595 shares47,467,250 and sole dispositive power with respect to 42,687,07148,601,203 shares. |
| (4) | On July 4, 2022, Wheaton Precious Metals Corp. (“Wheaton”) entered into a Stream Termination Agreement (the “Stream Termination Agreement”) with the Company, pursuant to which Wheaton agreed to terminate its silver streaming interest in the Keno Hill silver mine owned by Alexco Resource Corp. (“Alexco”), in connection with the acquisition of Alexco by the Company. Pursuant to the terms of the Stream Termination Agreement, the Company issued 34,800,989 shares of common stock to Wheaton Precious Metals Corp. upon the closing of the Company’s acquisition of Alexco on September 7, 2022. Wheaton filed a Schedule 13G on September 13, 2022, with the SEC. Wheaton has sole voting power and sole dispositive power with respect to the 34,800,989 shares.
|
(5) | Based solely on a Schedule 13G/A filed on February 10, 2023,13, 2024, with the SEC by Wheaton Precious Metals Corp. Wheaton Precious Metals Corp. has sole voting and dispositive power with respect to the 34,980,209 shares. |
| (5) | Based solely on a Schedule 13G/A filed on February 9, 2024, with the SEC by Dimensional Fund Advisors LP. Dimensional Fund Advisors LP has sole voting power with respect to 32,472,43234,266,646 shares and sole dispositive power with respect to 32,853,57134,919,760 shares. |
84 www.hecla.com
FREQUENTLY ASKED QUESTIONSFrequently Asked Questions
How can I attend the Annual Meeting? Attending the Annual Meeting in Person | | | | | | When: | | | When: Tuesday,Friday, May 23, 2023,17, 2024, at 10:00 a.m. PDT
| | | Where:Eric A. Johnston Auditorium at the Northwest Museum of Arts & Culture, | | Hecla Mining Company’s Corporate Office, located at 2316 W. 1st Avenue, Spokane, Washington | | 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, Idaho |
This year, the Annual Meeting will be conducted in-person and virtually via live webcast. All shareholders are invited to participate either in person or online. If participating in person we look forward to seeing you at Hecla’s corporate office in Spokane, Washington.Coeur d’Alene, Idaho. To participate in the Annual Meeting, please arrive at the Eric A. Johnson Auditorium bycorporate office 9:45 a.m. Pacific Daylight Time and present yourself at the registration desk.Time. Shareholders wishing to vote in-person during the Annual Meeting may pick up a ballot when they check in to the Annual Meeting. Attending the Virtual Meeting | | | | | | When: | | | When:Tuesday,Friday, May 23, 2023,17, 2024, at 10:00 a.m. PDT
| | | | Where: | | Live webcast online at http://www.virtualshareholdermeeting.com/HL2023HL2024 | | |
If participating virtually, participants are encouraged to submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/HL2023.HL2024. Your attendance at the Annual Meeting does not automatically revoke a proxy previously submitted by you and we encourage shareholders to cast their votes by proxy even if they intend to participate in the Annual Meeting. Shareholders wishing to vote electronically during the Annual Meeting must follow the instructions for voting by logging in to www.virtualshareholdermeeting.com/HL2023HL2024. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or your voting instruction form. The Annual Meeting will begin promptly at 10:00 a.m. PDT and we encourage you to access the website prior to the start time. Online access will be available beginning at 9:45 a.m. PDT. The virtual Annual Meeting platform is fully supported across web browsers (Microsoft Edge, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure they have a strong Internet connection wherever they intend to participate in the virtual Annual Meeting. Participants should also allow plenty of time to login to ensure that they can hear streaming audio prior to the start of the Annual Meeting. How can I ask questions during the Annual Meeting? As part of the Annual Meeting, we will hold a live and online Q&A session, during which we intend to answer questions submitted before or during the Annual Meeting which are pertinent to the Company and the matters to be voted on, as time permits. Consistent with our prior annual meetings, we kindly ask shareholders not to ask more than one question in order to allow us to answer questions from as many shareholders as possible. If you wish to submit a question, you may do so in two ways. If you want to ask a question before the meeting, then beginning at 10:00 a.m. PDT on May 19, 2023,15, 2024, and until 11:59 p.m. PDT on May 22, 2023,16, 2024, you may log into www.proxyvote.com and enter your 16-digit control number. Once past the login screen, click on “Question for Management,” type in your question, and click “Submit.” Alternatively, if you want to submit your question during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/HL2023,HL2024, type your question into the “Ask a Question” field, and click “Submit.” We want to be sure that all shareholders are afforded the same rights and opportunities to participate as they would at an in-person meeting. If you want to participate in our Annual Meeting but cannot submit your question using www.proxyvote.com or the Annual
| | | | | 92 | 2024 Proxy Statement | | | | |
Meeting website, please contact our Investor Relations Department via email at hmc-info@hecla-mining.com for accommodations. Please include “Annual Meeting Question” in the subject line and provide your name and proof of stock ownership or the control number found on your Notice of Internet Availability, proxy card, or voting instruction form. Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Questions regarding personal matters, including those related to other matters that are not pertinent to the meeting, may not be answered. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints can be sent to our Company email address at hmc-info@hecla-mining.com. We will answer your questions as soon as practical after the meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log-in page. 2023 Proxy Statement 85
Frequently Asked Questions
What is a “shareholder of record”? A shareholder of record or registered shareholder (“record owner”) is a shareholder whose ownership of Hecla stock is reflected directly on the books and records of our transfer agent, American Stock Transfer &Equiniti Trust Company.Company, LLC. If you hold Hecla stock through a bank, broker, or other intermediary, you are not a shareholder of record. Instead, you hold your stock in “street name,” and the record owner of your shares is usually your bank, broker, or other intermediary. If you are not a record owner, please understand that Hecla does not know that you are a shareholder, or how many shares you own. I want to attend the 20232024 Annual Meeting. What procedures must I follow? The Annual Meeting will be conducted in-person and virtually. All shareholders will be able to attend the Annual Meeting via webcast by entering the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, on your proxy card, or on the instructions that accompanied your proxy materials at www.virtualshareholdermeeting.com/HL2023HL2024 (“Annual Meeting Website”). If you do not have a control number, you will be able to register as a guest; however, you will not be able to vote or submit questions before or during the meeting. No recording of the Annual Meeting is allowed, including audio and video recording. What can I do if I need technical assistance during the Annual Meeting? If you encounter any difficulties accessing the annual Meeting webcast, please call the technical support number that will be posted on the Annual Meeting Website log-in page. Are there Rules of Conduct for the Annual Meeting? Yes, the Rules of Conduct for the Annual Meeting will be available on the Annual Meeting Website on the date of the Annual Meeting, and at the place of the in-person Annual Meeting. The Rules of Conduct will provide information regarding the rules and procedures for participating in the Annual Meeting. What is the “record date” for the Annual Meeting? March 24, 202318, 2024 How many shares of Hecla stock are outstanding? As of March 24, 2023,18, 2024, there were 602,191,096616,792,499 shares of common stock outstanding and entitled to be voted. Shares of our common stock that are held by us in our treasury are not counted as shares outstanding and will not be voted. Each shareholder has one vote for each share of common stock held as of the Record Date. I understand that a “quorum” of shareholders is required for Hecla to transact business at the Annual Meeting. What constitutes a quorum? A quorum must be present for business to be conducted at the Annual Meeting. A quorum consists of the presence at the Annual Meeting, in-person or represented by proxy, of a majority of the outstanding shares of our common stock as of the Record Date. Shares represented by proxies marked “Abstain” and “broker non-votes” are counted in determining whether a quorum is present for the transaction of business at the Annual Meeting.
| | | | | | | | | 2024 Proxy Statement | 93 |
Which Hecla shares will be entitled to vote at the Annual Meeting? Hecla’s common stock ($0.25 par value capital stock) is the only class of security entitled to vote at the Annual Meeting. Each record owner and each shareholder who holds stock in street name at the close of business as of the record date is entitled to one vote for each share held at the meeting, or any adjournment or postponement. How can I vote my shares? If your shares are held in your name, you have the right to vote your shares at the Annual Meeting by following the instructions listed below. If your shares are held in a brokerage account or by another nominee, you are 86 www.hecla.com
Frequently Asked Questions
considered the beneficial owner of shares held in street name. Since a beneficial owner is not the shareholder of record, you may not vote your shares at the Annual Meeting unless you obtain a “legal proxy” from your broker or nominee that holds your shares, giving you the right to vote the shares at the Annual Meeting. Whether you hold shares directly as a shareholder of record or beneficially in street name, you may vote without participating in the Annual Meeting. You may vote by granting a proxy or, for shares held beneficially in street name, by submitting voting instructions to your broker or nominee. In most cases, you will be able to do this by using the Internet, by telephone, or by mail if you received a printed set of the Proxy Materials. To vote by mail: | • | | Mark, sign, and date your proxy card; and |
Mark, sign, and date your proxy card; and
Return your proxy card in the enclosed postage-paid envelope.
| • | | Return your proxy card in the enclosed postage-paid envelope. |
To vote by proxy over the Internet: | • | | Have your proxy card or Notice available; |
Have your proxy card or Notice available;
| • | | Log on to the Internet and visit the website noted on your proxy card or Notice (www.proxyvote.com); |
Log on to the Internet and visit the website noted on your proxy card or Notice (www.proxyvote.com);
| • | | Follow the instructions provided; and |
Follow the instructions provided; and
Do not mail your proxy card.
| • | | Do not mail your proxy card. |
To vote by proxy by telephone: Have your proxy card available;
| • | | Have your proxy card available; |
| • | | Call the toll-free number listed on your proxy card (1-800-690-6903); |
Follow the recorded instructions; and
| • | | Follow the recorded instructions; and |
Do not mail your proxy card.
| • | | Do not mail your proxy card. |
To vote during the Annual Meeting: Shares may be voted at the meeting by completing a ballot online during the meeting at www.virtualshareholdermeeting.com/HL2023;and
| • | | Shares may be voted at the meeting by completing a ballot online during the meeting at www.virtualshareholdermeeting.com/HL2024;and |
| • | | Shares may be voted in-person at the meeting by completing a ballot during the meeting. |
To vote your 401(k) Plan shares: If you participate in the Hecla Mining Company Capital Accumulation Plan (“401(k) Plan”) and hold shares of our common stock in your 401(k) Plan account as of the Record Date, you will receive a request for voting instructions from the plan trustee (“Vanguard”) with respect to your 401(k) Plan shares. You are entitled to direct Vanguard how to vote your 401(k) Plan shares. If you do not provide voting instructions to Vanguard by 11:59 p.m., Eastern Daylight Time, on May 18, 2023,16, 2024, the Hecla shares in your 401(k) Plan account will be voted by Vanguard in the same proportion as the shares held by Vanguard for which voting instructions have been received from other participants in the 401(k) Plan.
| | | | | 94 | 2024 Proxy Statement | | | | |
May I change or revoke my proxy? Yes. If you are a shareholder of record, you may revoke your proxy and change your vote at any time before your proxy is voted at the Annual Meeting, in any of the following ways: By sending a written notice of revocation to our Corporate Secretary, if such notice is received prior to the vote at the Annual Meeting, at our principal executive offices: Hecla Mining Company, Attn: Corporate Secretary, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, ID 83815-9408;
By submitting a later-dated proxy to our Corporate Secretary prior to the vote at the Annual Meeting; or
| • | | By sending a written notice of revocation to our Corporate Secretary, if such notice is received prior to the vote at the Annual Meeting, at our principal executive offices: Hecla Mining Company, Attn: Corporate Secretary, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, ID 83815-9408; |
| • | | By submitting a later-dated proxy to our Corporate Secretary prior to the vote at the Annual Meeting; or |
| • | | By voting online during the meeting if you are a “shareholder of record” or a “beneficial owner.” |
If you hold your shares in street name, you should contact your broker for information on how to revoke your voting instructions and provide new voting instructions. If you hold your shares in the 401(k) Plan, you may revoke your previously provided voting instructions by filing with Vanguard either a written notice of revocation or a properly executed proxy bearing a later date prior to the deadline for voting your 401(k) Plan shares. If you hold your Hecla shares outside of the 401(k) Plan, you may vote those shares separately. 2023 Proxy Statement 87
Frequently Asked Questions
Will my votes be confidential? Yes. All shareholder meeting proxies, ballots, and tabulations that identify individual shareholders are kept confidential and are not available for examination. In addition, the identity or the vote of any shareholder is not disclosed except as required by law. What is “broker discretionary voting”? This refers to the NYSE rule allowing brokers to vote their customers’ shares on certain “routine” matters in the Proxy Statement at the brokers’ discretion when they have not received timely voting instructions from their customers. The NYSE rules on broker discretionary voting prohibit banks, brokers, and other intermediaries from voting uninstructed shares on certain “routine” matters, including the election of directors. Therefore, if you hold your stock in street name and you do not instruct your bank, broker, or other intermediary how to vote on any proposal that is considered a “routine “ matter, no votes will be cast on your behalf with respect to such proposals. It is important that you cast your vote. Are abstentions and broker non-votes counted as votes cast? No. Abstentions and broker non-votes are not counted as votes cast and will have no effect on the outcome of the vote. How can I contact Hecla’s transfer agent? Contact our transfer agent either by writing American Stock Transfer &Equiniti Trust Company, 6201 15th Avenue, Brooklyn,LLC, 48 Wall Street, Floor 23, New York, 11219,New York 10005, or by telephoning 1-800-937-5449.1-800-468,9716. What happens if I do not vote on a proposal on the proxy card? If you properly sign and return your proxy card or complete your proxy via the telephone or Internet, your shares will be voted as you direct. If you sign and return your proxy card but do not specify how you want your shares voted they will be voted FOR (i) the election of the nominees for Director as set forth under Election of Class III Directors; (ii) ratification of the appointment of the independent registered public accountants; and (iii) approval, on an advisory basis, of our executive compensation; and (iv) approval, on an advisory basis, of the frequency of our Say-on-Pay votes for executive officer compensation (One-Year).compensation. What is a Proxy? A “proxy” is your legal appointment in a written document of another person to vote the shares that you own in accordance with your instructions. The persons you appoint to vote your shares are also called proxies. We have designated Phillips S. Baker, Jr., our President and CEO, and Michael B. White, our Corporate Secretary, as proxies for the Annual Meeting. When you sign the proxy card, you appoint each of Messrs. Baker and White as your representatives at the Annual Meeting. As your representatives, they will vote your shares at the Annual Meeting (including any adjournment or postponement) as you have instructed them on your proxy card.
| | | | | | | | | 2024 Proxy Statement | 95 |
What Votes are Required for the Proposals? Under NYSE rules, if your shares are held in street name and you do not indicate how you wish to vote, your broker is only permitted to exercise its discretion to vote your shares on certain “routine” matters. Proposal 2 (Ratification of the Appointment of BDO USA, LLP)P.C. is a “routine” matter. Proposal 1 (Election of Class III Directors), and Proposal 3 (Approval, on an advisory basis, of our named executive officer compensation), and Proposal 4 (Approval, on an advisory basis, of the frequency of our Say-on-Pay votes for named executive officer compensation) are “non-routine” matters. Accordingly, if you do not direct your broker how to vote for Proposals 1 3, or 4,3, your broker is not permitted to exercise discretion and is not permitted to vote your shares on such matters. This is called a “broker non-vote.” Proposal 1 – Election of two Class III Directors. Pursuant to our Bylaws, each director will be elected by the affirmative vote of a majority of votes cast at the Annual Meeting, whether in-person or by proxy. Under a majority of votes cast standard, the shares voted “for” a nominee must exceed the number voted “against” that nominee. Shareholders may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to this proposal. Abstentions and broker non-votes are not counted as votes cast, and thus will have no effect on the outcome of the vote. A properly 88 www.hecla.com
Frequently Asked Questions
executed proxy card marked “AGAINST” with respect to the election of directors will have an effect on the outcome of the vote. If the votes cast “against”“AGAINST” an incumbent director exceed the number of votes cast “FOR” the director, the director will not be elected, will remain on the board as a holdover director and must stand for election at the next annual meeting of shareholders, absent his or her earlier resignation or removal. See Majority Voting for Directors and Director Resignation Policy on page 1516 for a description of our director resignation policy. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on each nominee for election as a director. Proposal 2 – Ratify the Appointment of BDO USA, LLPP.C. as our Independent Registered Public Accounting Firm for 20232024. Under the Sarbanes-Oxley Act of 2002, the Audit Committee has the sole authority to appoint the independent registered public accounting firm for the Company. However, the Board feels that it is important for the shareholders to approve the selection of BDO USA, LLP.P.C. This proposal requires the affirmative vote of a majority of votes cast at the Annual Meeting, whether in-person or by proxy. Abstentions and broker non-votes are not counted as votes cast, and thus will have no effect on the outcome of the vote. Votes marked “AGAINST” will have an effect on the outcome of the vote. The appointment of our independent registered public accounting firm for calendar year 20232024 is considered a “routine” matter and brokers that are not directed how to vote are permitted to vote shares held in street name for their customers on this proposal. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to ratify the appointment of BDO USA, LLPP.C. as our independent registered public accounting firm for 2023.2024. Proposal 3 – Approval, on an Advisory Basis, of our Named Executive Officer Compensation. For more information on approval of our executive compensation see “Proposal 3 – Approval, on an Advisory Basis, of our Named Executive Officer Compensation” beginning on page 34.38. The advisory vote on name executive officer compensation will require the affirmative vote of a majority of votes cast at the Annual Meeting, whether in-person or by proxy. Under a majority of votes cast standard, the shares voted “FOR” Proposal 3 must exceed the number voted “AGAINST” Proposal 3 for the proposal to be approved. Abstentions and broker non-votes are not counted as votes cast for this purpose and will have no effect on the outcome of the vote. Votes marked “AGAINST” will have an effect on the outcome of the vote. Even though your vote is advisory and therefore will not be binding on the Company, the Board’s Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the proposal to approve the compensation of our NEOs. Proposal 4 – Approval, on an Advisory Basis, of the Frequency of our Say-on-Pay Votes on Named Executive Officer Compensation. For more information on approval of our advisory vote on frequency of our Say-on-Pay vote for named executive officer compensation, see “Proposal 4 – Approval, on an Advisory Basis, of the Frequency of our Say-on-Pay Votes for Named Executive Officer Compensation” beginning on page 81. Proposal 4 will require the affirmative vote of a majority of votes cast at the Annual Meeting, whether in-person or by proxy. Abstentions and broker non-votes are not counted as votes cast for this purpose and will have no effect on the outcome of the vote. In the event that none of the frequency options – one year, two years, or three years – receives a majority of votes cast on the proposal at the Annual Meeting, whether in-person or by proxy, we will deem the frequency option that receives the most affirmative votes of all votes cast on the proposal to be the frequency option preferred by the shareholders. Brokers will not be able to cast votes if clients do not provide voting instructions on this proposal. Even though your vote is advisory and therefore will not be binding on the Company, the Board’s Compensation Committee will review the voting results and take them into consideration when making future decisions regarding the frequency of advisory votes on named executive officer compensation.
You may vote for “ONE YEAR,” TWO YEARS,” or “THREE YEARS” on the proposal.
Discretionary voting by proxies on other matters. Aside from the proposals discussed above, no other proposals have been timely submitted in accordance with our Bylaws, and we do not know of any other proposal that may be presented at the Annual Meeting. However, if any other business is properly presented at the Annual Meeting, your proxy gives authority to Phillips S. Baker, Jr., and Michael B. White to vote on such matters at their discretion. 2023 Proxy Statement 89
Frequently Asked Questions
| | | | | 96 | 2024 Proxy Statement | | | | |
Assuming there is a proper quorum of shares represented at the Annual Meeting, how many shares are required to approve the proposals being voted upon in this Proxy Statement? | | | | | | | Proposal | | Vote Required | | Do abstentions count
as votes cast?
| | Vote Required | | Do abstentions count
as votes cast? | | Is broker discretionary
voting allowed? | Election of Class III Directors | | Majority of votes cast | | No | | No | Ratify the Appointment of BDO LLPUSA, P.C. | | Majority of votes cast | | No | | Yes | | | | | Advisory Vote on Executive Compensation * | | Majority of votes cast | | No | | No | Advisory Vote on Frequency of Say-on-Pay Votes on Named Executive Officer * | | Majority of votes cast | | No | | No |
| * | Advisory and non-binding |
Where can I find the voting results of the Annual Meeting? Preliminary voting results will be announced at the Annual Meeting. We will publish the results in a Current Report on Form 8-K that we expect to file with the SEC within four business days of the Annual Meeting. After the Form 8-K is filed, you may obtain a copy by visiting the SEC’s website at www.sec.gov/edgar, visiting our website at https://www.hecla.com under “Investors,” and then selecting “Annual Reports & Filings,” or contacting our Investor Relations Department by writing to Investor Relations Department, Hecla Mining Company, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, ID 83815-9408 or by sending an email to hmc-info@hecla-mining.com. I received a Notice of Internet Availability of Proxy Materials. What does this mean? Consistent with widespread practice and in accordance with SEC rules, Hecla is distributing proxy materials to some shareholders over the Internet by sending a Notice of Internet Availability of Proxy Materials (“Notice”) that explains how to access our Proxy Materials and vote online. If you received a Notice and would like a printed copy of the proxy materials (including the Annual Report, Proxy Statement, and a proxy card in the case of record owners, or a voting instruction form in the case of shareholders holding shares in street name), please follow the instructions included in your Notice. I received my proxy materials in hard copy. How may I arrange to receive electronic delivery of Proxy Materials, Annual Reports, News Releases, and documents filed with the SEC? We want to communicate with you in the way that is most convenient for you. Our Proxy Materials are available on our website at https://www.hecla.com. Instead of receiving paper copies of next year’s Proxy Materials by mail, you can elect to receive an email message that will provide a link to those documents online. By opting to access your Proxy Materials online, you will: | • | | gain faster access to your Proxy Materials; |
gain faster access to your Proxy Materials;
| • | | save us the cost of producing and mailing documents to you; and |
save us the cost of producing and mailing documents to you; and
help preserve environmental resources.
| • | | help preserve environmental resources. |
If you are a shareholder of record, you may request and consent to electronic delivery of future Proxy Materials by following the instructions on your proxy card or by visiting our website at https://www.hecla.com under “Investors,” and then selecting “Electronic Proxy Request.” If your shares are held in street name, please contact your broker, and ask about the availability of electronic delivery. If you select electronic delivery, we will discontinue mailing the Proxy Materials to you beginning next year and you will be sent an email message notifying you of the Internet address or addresses where you may access the Proxy Materials. You can receive a free paper or email copy of this year’s Proxy Materials by requesting prior to May 9, 2023.3, 2024. If you would like to request a copy of the Proxy Materials for this and/or future shareholder meetings, you may (i) visit www.proxyvote.com, (ii) call 1-800-1-800-579-1639,579-1639, or (3) send an 90 www.hecla.com
Frequently Asked Questions
email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated on your Notice) in the subject line. Your consent to electronic delivery will remain in effect until you revoke it. If you selected electronic delivery last year, we would not mail the Proxy Materials to you this year and you will receive an email message with the Internet address where you may access the Proxy Materials for the current year. Shareholders may also elect to receive notice of our filings with the SEC, annual reports, and news releases by email. You may sign up for this service by visiting our website at https://www.hecla.com under “News & Media” and selecting “Subscribe.”
| | | | | | | | | 2024 Proxy Statement | 97 |
What is “householding” and does Hecla do this? Many brokerage firms, financial institutions and transfer agents have instituted “householding” procedures for beneficial owners and shareholders of record. Householding is when a single copy of our Proxy Materials is sent to a household in which two or more shareholders reside if they appear to be members of the same family. This practice is designed to reduce duplicate mailings and save significant printing and postage costs, as well as natural resources. If you are a beneficial owner, you may have received householding information from your broker, financial institution, or other nominee shareholder in the past. Please contact the shareholder of record directly if you have questions, require additional copies of our Proxy Materials, or wish to revoke your decision to household and thereby receive multiple copies. You should also contact the shareholder of record if you wish to institute householding. These options are available to you at any time. Shareholders of record who share an address and would like to receive a separate copy of our Proxy Materials for future annual meetings, or have questions regarding the householding process, may contact our transfer agent, American Stock Transfer &Equiniti Trust Company, LLC, either by written request or by telephone at: American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn,48 Wall Street, Floor 23, New York, 11219New York 10005 – Telephone: 1-800-937-5449.1-800-468,9716. By contacting American Stock Transfer &Equiniti Trust Company, LLC, shareholders of record sharing an address can also request delivery of multiple copies of our Proxy Materials in the future. Who is making this proxy solicitation and approximately how much will these solicitation activities cost? We will bear all costs and expenses relating to the solicitation of proxies, including the costs of preparing, assembling, printing, mailing, and distributing these Proxy Materials. We have hired Broadridge to assist us in mailing these Proxy Materials. Additionally, we have retained Morrow Sodali LLC, 333 Ludlow Street, Fifth Floor, South tower,Tower, Stamford, Connecticut to assist in the solicitation of votes for an estimated fee of $9,000,$10,000, plus reimbursement of certain out-of-pocket expenses. Solicitations may be made personally or by mail, facsimile, telephone, or via the Internet. However, if you choose to access the Proxy Materials over the Internet, you are responsible for any Internet access charges you may incur. Arrangements will be made with brokerage firms and other custodians, nominees, and fiduciaries for forwarding solicitation materials to the beneficial owners of the shares of common stock held by such persons, and we will reimburse such brokerage firms, custodians, nominees, and fiduciaries for reasonable out-of-pocket expenses incurred by them in connection with such activities. Where can I get a copy of Hecla’s Annual Report? Our Annual Report to Shareholders, consisting of our Form 10-K for the year ended December 31, 2022, and other information,2023, is being made available to shareholders with this Proxy Statement. Shareholders may obtain a copy of our Annual Report for the calendar year ended December 31, 2022,2023, without cost, by written or oral request to: Hecla Mining Company, Attention: Investor Relations, 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, Idaho 83815-9408 – Telephone: 208-769-4100. You can also access our SEC filings, including our Annual ReportsReport on Form 10-K, and all amendments thereto, on the SEC website at www.sec.gov/edgar or on our website at https://www.hecla.com under “Investors,” and then selecting “Annual Reports & Filings.” 2023 Proxy Statement 91
Frequently Asked Questions
Where can I find additional information about Hecla? The principal executive office of our Company is located at 6500 N. Mineral Dr., Suite 200, Coeur d’Alene, Idaho 83815. Our telephone number at this address is 208-769-4100. Our common stock is traded on the NYSE under the symbol “HL.” We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other information with the SEC. As an electronic filer, our public filings are maintained on the SEC’s Internet site that contains reports, proxy statements, and other information regarding issuers that file electronically with the SEC. The address of that website is www.sec.gov/edgar. Our annual reportAnnual Report to Shareholders for the year ended December 31, 2022,2023, including financial statements and schedules, is included with this Proxy Statement. We maintain a company website at https://www.hecla.com from which you can alternatively access the reports we file with the SEC. Our committee charters and other important corporate governance documents are also available on our website.
| | | | | 98 | 2024 Proxy Statement | | | | |
Other than the items in the Proxy Statement, what other items of business will be addressed at the Annual Meeting? As of the date of this Proxy Statement, the Board is not aware of any matters that will be presented for action at the Annual Meeting other than those described above. However, should other business properly be brought before the Annual Meeting, the proxies will be voted thereon at the discretion of the persons acting thereunder. | | By Order of the Board of Directors | |  | |  Michael B. White Corporate Secretary |
April 11, 20234, 2024 To the extent that this proxy statement is incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, the sections of this proxy statement titled Compensation Committee Report and Audit Committee Report (to the extent permitted by SEC rules) will not be deemed incorporated, unless specifically provided otherwise in such filing. 92 www.hecla.com
APPENDIXAppendix A
Reconciliation of Non-GAAP Measures to GAAP Reconciliation of Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP) The non-GAAP measure of free cash flow is calculated as net cash provided by operating activities (GAAP) less additions to properties, plants, equipment, and mineral interests (GAAP). Management believes that, when presented in conjunction with comparable GAAP measures, free cash flow is useful to investors in evaluating our operating performance. The following table reconciles net cash provided by operating activities to free cash flow: | Dollars are in thousands | | December 31,
2022 | | in thousands | | | December 31,
2023 | | | Net cash provided by operating activities (GAAP) | | $ | 89,890 | | Net cash provided by operating activities (GAAP) | | Net cash provided by operating activities (GAAP) | | Net cash provided by operating activities (GAAP) | | | $ | 75,499 | | | Less: Additions to properties, plants, equipment, and mineral interests (GAAP) | | Less: Additions to properties, plants, equipment, and mineral interests (GAAP) | | Less: Additions to properties, plants, equipment, and mineral interests (GAAP) | | Less: Additions to properties, plants, equipment, and mineral interests (GAAP) | | | (149,378 | ) | | | (223,887 | ) | | | | | Free cash flow5 | | $ | (59,488 | ) | | | | | Free cash flow(7) | | Free cash flow(7) | | Free cash flow(7) | | Free cash flow(7) | | | $ | (148,388 | ) |
Reconciliation of Mine Site Cash Provided by Operating Activities (GAAP) to Mine Site Operating Cash Flow Less Capital (non-GAAP) The non-GAAP measure of mine site operating cash flow less capital, which is a performance measure for our LTIP, is calculated as mine site cash provided by operating activities, less additions to properties, plants, equipment, and mineral interests. Management believes that, when presented in conjunction with comparable GAAP measures, mine site operating cash flow less capital is useful to investors in evaluating our operating performance. The following table reconciles mine site cash provided by operating activities to mine site operating cash flow less capital: | Dollars are in thousands | | December 31,
2022 | | in thousands | | | December 31,
2023 | | | Mine site cash provided by operating activities | | $ | 350,241 | | Mine site cash provided by operating activities | | Mine site cash provided by operating activities | | Mine site cash provided by operating activities | | | $ | 192,821 | | | Additions to properties, plants equipment and mineral interests | | Additions to properties, plants equipment and mineral interests | | Additions to properties, plants equipment and mineral interests | | Additions to properties, plants equipment and mineral interests | | | (367,145 | ) | | | (223,607 | ) | | | | | Mine site operating cash flow less capital | | $ | (16,904 | ) | | | | | Mine site operating cash flow less capital | | Mine site operating cash flow less capital | | Mine site operating cash flow less capital | | | $ | (30,786 | ) |
Reconciliation of (Loss) Net Income (Loss) (GAAP) to Earnings Before Interest, Taxes, Depreciation, and Amortization (non-GAAP) The non-GAAP measure of earnings before interest, taxes, depreciation, and amortization (“EBITDA”)(EBITDA) is calculated as net income (loss) before the following items: interest expense, income tax benefit provision, and depreciation, depletion, and amortization expense. Management believes that, when presented in conjunction with comparable GAAP measures, EBITDA is useful to investors in evaluating our operating performance. The table below presents reconciliations between the GAAP measure of net loss to the non-GAAP measure EBITDA for the years ended December 31, 2023, 2022 2021 and 2020 (in thousands).2021. | | | | Year ended December 31, | | | Year ended December 31, | | in thousands | | | 2023 | | | 2022 | | 2021 | | | | | 2022 | | 2021 | | 2020 | | Net income (loss) (GAAP) | | $ | (37,348 | ) | | $ | 35,095 | | | $ | (9,457 | ) | Net (loss) income (GAAP) | | Net (loss) income (GAAP) | | Net (loss) income (GAAP) | | Net (loss) income (GAAP) | | | $ | (84,217 | ) | | $ | (37,348 | ) | | $ | 35,095 | | | Interest expense | | | 42,793 | | | | 41,945 | | | | 49,569 | | Income tax (benefit) provision | | | (7,566 | ) | | | (29,569 | ) | | | 8,199 | | Interest expense | | Interest expense | | Interest expense | | | | 43,319 | | | | 42,793 | | | 41,945 | | | Income and mining tax provision (benefit) | | Income and mining tax provision (benefit) | | Income and mining tax provision (benefit) | | Income and mining tax provision (benefit) | | | | 1,222 | | | | (7,566 | ) | | (29,569 | ) | | Depreciation, depletion, and amortization | | Depreciation, depletion, and amortization | | Depreciation, depletion, and amortization | | Depreciation, depletion, and amortization | | | 143,938 | | | | 171,793 | | | | 155,006 | | | | 163,672 | | | | 143,938 | | | 171,793 | | | | | | | | | | | | EBITDA | | $ | 141,817 | | | $ | 219,264 | | | $ | 203,317 | | | | | | | | | | | | EBITDA | | EBITDA | | EBITDA | | | $ | 123,996 | | | $ | 141,817 | | | $ | 219,264 | |
5(7) | Free cash flow is calculated as cash provided by operating activities (GAAP) less additions to properties, plans and equipment. Free cash flow is a measure used by management to evaluate the Company’s operating performance but should not be considered as an alternative to cash flow from operations, as that term is defined by GAAP. |
2023 Proxy Statement A-1
Appendix A
| | | | | A-2 | 2024 Proxy Statement | | | | |
Reconciliation of Net (Loss) Income (Loss) (GAAP) to Adjusted EBITDA Less Capital (non-GAAP) The non-GAAP measure of Adjusted EBITDA less capital for use in STIP performance measurement is calculated as net (loss) income (loss) before the following items: interest expense, income tax benefit, depreciation, depletion, and amortization expense, acquisition costs, loss (gain) on disposition of properties, plants, equipment and mineral interests, suspension costs, foreign exchange loss (gain), unrealized loss (gain) on derivative contracts, provisional price (gains) losses, provisions for closed operations expense, stock-based compensation, unrealized losses on investments, interest and other income/expense, gain on sale of investments (“adjusted EBITDA”)(adjusted EBITDA) less capital expenditures at our operations. The following table reconciles net loss(loss) income to adjusted EBITDA less capital (in thousands):capital: | | | | Year Ended
December 31, | | | Year Ended
December 31, | | in thousands | | | 2023 | | 2022 | | 2021 | | | | | 2022 | | 2021 | | | 2020 | | Net (loss) income | | $ | (37,348 | ) | | $ | 35,095 | | | $ | (9,457 | ) | Interest expense, net of amount capitalized | | | 42,793 | | | | 41,945 | | | | 49,569 | | Income and mining taxes | | | (7,566 | ) | | | (29,569 | ) | | | 8,199 | | Net (loss) income | | Net (loss) income | | Net (loss) income | | | $ | (84,217 | ) | | $ | (37,348 | ) | | $ | 35,095 | | | Interest expense | | Interest expense | | Interest expense | | Interest expense | | | | 43,319 | | | 42,793 | | | 41,945 | | | Income and mining tax provision (benefit) | | Income and mining tax provision (benefit) | | Income and mining tax provision (benefit) | | Income and mining tax provision (benefit) | | | | 1,222 | | | (7,566 | ) | | (29,569 | ) | | Depreciation, depletion, and amortization | | Depreciation, depletion, and amortization | | Depreciation, depletion, and amortization | | Depreciation, depletion, and amortization | | | 143,938 | | | | 171,793 | | | | 155,006 | | | | 163,672 | | | 143,938 | | | 171,793 | | | | | | | | | | | | EBITDA | | | 141,817 | | | | 219,264 | | | | 203,317 | | EBITDA | | EBITDA | | EBITDA | | | | 123,996 | | | 141,817 | | | 219,264 | | | Ramp-up and suspension costs | | | 24,114 | | | 23,012 | | | | 24,911 | | Ramp-up and suspension costs | | Ramp-up and suspension costs | | Ramp-up and suspension costs | | | | 76,252 | | | 24,114 | | | 23,012 | | | Loss on disposition of properties, plants, equipment, and mineral interests | | | 16 | | | 87 | | | | 572 | | Foreign exchange (gain) loss | | | (7,211 | ) | | (417 | ) | | | 4,605 | | Loss on disposition of properties, plants, equipment, and mineral interests | | Loss on disposition of properties, plants, equipment, and mineral interests | | Loss on disposition of properties, plants, equipment, and mineral interests | | | | 849 | | | 16 | | | 87 | | | Foreign exchange loss (gain) | | Foreign exchange loss (gain) | | Foreign exchange loss (gain) | | Foreign exchange loss (gain) | | | | 3,810 | | | (7,211 | ) | | (417 | ) | | Unrealized (gain) loss on derivative contracts | | | (844 | ) | | 11,903 | | | | 5,578 | | Provisional price loss (gain) | | | 20,839 | | | (9,349 | ) | | | (8,008 | ) | Unrealized (gain) loss on derivative contracts | | Unrealized (gain) loss on derivative contracts | | Unrealized (gain) loss on derivative contracts | | | | (3,168 | ) | | (844 | ) | | 11,903 | | | Provisional price (gain) loss | | Provisional price (gain) loss | | Provisional price (gain) loss | | Provisional price (gain) loss | | | | (18,230 | ) | | 20,839 | | | (9,349 | ) | | Provision for closed operations and environmental matters | | | 8,793 | | | 17,964 | | | | 6,189 | | Provision for closed operations and environmental matters | | Provision for closed operations and environmental matters | | Provision for closed operations and environmental matters | | | | 7,575 | | | 8,793 | | | 17,964 | | | Stock-based compensation | | | 6,012 | | | 6,081 | | | | 6,458 | | Unrealized loss (gain) on investments | | | 5,632 | | | 4,295 | | | | (10,272 | ) | Stock-based compensation | | Stock-based compensation | | Stock-based compensation | | | | 6,598 | | | 6,012 | | | 6,081 | | | Unrealized loss on investments | | Unrealized loss on investments | | Unrealized loss on investments | | Unrealized loss on investments | | | | 243 | | | 5,632 | | | 4,295 | | | Adjustments of inventory to net realizable value | | | 2,646 | | | 6,524 | | | | — | | Monetization of zinc hedges | | | 16,664 | | | | — | | | | — | | Adjustments of inventory to net realizable value | | Adjustments of inventory to net realizable value | | Adjustments of inventory to net realizable value | | | | 20,819 | | | 2,646 | | | 6,524 | | | Monetization of zinc and lead hedges | | Monetization of zinc and lead hedges | | Monetization of zinc and lead hedges | | Monetization of zinc and lead hedges | | | | (4,447 | ) | | 16,664 | | | | — | | | Other | | Other | | Other | | Other | | | (986 | ) | | | (584 | ) | | | (2,666 | ) | | | (1,744 | ) | | (986 | ) | | (584 | ) | | | | | | | | | | | Adjusted EBITDA6 | | | (217,492 | ) | | | 278,780 | | | | 230,684 | | Adjusted EBITDA(8) | | Adjusted EBITDA(8) | | Adjusted EBITDA(8) | | Adjusted EBITDA(8) | | | | 212,553 | | | 217,492 | | | 278,780 | | | Capital expenditures at operating mines | | Capital expenditures at operating mines | | Capital expenditures at operating mines | | Capital expenditures at operating mines | | | (147,651 | ) | | | (108,855 | ) | | | (99,939 | ) | | | (223,607 | ) | | (147,651 | ) | | (108,855 | ) | | | | | | | | | | | Adjusted EBITDA less capital expenditures | | $ | 69,841 | | | $ | 169,925 | | | $ | 130,745 | | | | | | | | | | | | Adjusted EBITDA less capital expenditures | | Adjusted EBITDA less capital expenditures | | Adjusted EBITDA less capital expenditures | | | $ | (11,054 | ) | | $ | 69,841 | | | $ | 169,925 | |
6(8) | Adjusted EBITDA is a measure used by management to evaluate the Company’s operating performance but should not be considered an alternative to net (loss) income or cash provided by operating activities as those terms are defined by GAAP and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program. |
A-2 www.hecla.com
| | | | | | | | | 2024 Proxy Statement | A-3 |
Reconciliation of IncomeLoss Applicable to Common Stockholders to Adjusted Net Income (Loss)Loss (GAAP) Adjusted net incomeloss and adjusted net income (loss) per share, are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss)loss per common share provides investors with the ability to better evaluate our underlying operating performance. The following table reconciles adjusted net income (loss) (in thousands):loss: | | | | | | | | Year Endd
December 31,
2022 | | Net loss applicable to common shareholders (GAAP) | | $ | (37,900 | ) | Adjusted for items below: | | | | | Derivative contracts gains | | | (844 | ) | Provisional pricing losses | | | 20,839 | | Unrealized losses on equity investments | | | 5,632 | | Environmental accruals | | | 2,874 | | Foreign exchange gain | | | (7,211 | ) | Ramp-up and suspension costs | | | 24,114 | | Loss on disposition of properties, plants, equipment and mineral interests | | | 16 | | Adjustments of inventory to net realizable value | | | 2,646 | | Monetization of Zinc Hedges | | | 16,664 | | Other | | | 939 | | | | | | | Adjusted net income | | | 27,769 | | | | | | | Weighted average shares – basic | | | 557,344 | | Adjusted net income (loss) per common stock (in cents) | | | 0.05 | |
| | | | | in thousands | | Year Ended
December 31,
2023 | | | | Net loss applicable to common shareholders (GAAP) | | $ | (84,769 | ) | | | Adjusted for items below: | | | | | | | Fair value adjustments, net | | | (2,925 | ) | | | Provisional pricing gains | | | (18,230 | ) | | | Environmental accruals | | | 2,952 | | | | Foreign exchange loss | | | 3,810 | | | | Ramp-up and suspension costs | | | 76,252 | | | | Loss on disposition of properties, plants, equipment, and mineral interests | | | 849 | | | | Adjustments of inventory to net realizable value | | | 20,819 | | | | Monetization of zinc and lead hedges | | | (4,447 | ) | | | Adjusted net loss | | | (5,689 | ) | | | Weighted average shares – basic | | | 605,668 | | | | Adjusted net loss per common stock (in cents) | | | (0.01 | ) |
2023 Proxy Statement A-3
| | | HECLA MINING COMPANY
6500 N. MINERAL DRIVE
SUITE 200
COEUR D'ALENE, ID 83815-9408
| | 
VOTE BY INTERNET
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 by 11:59 p.m. Eastern Time on May 22, 2023 for shares held directly and by 11:59 p.m. Eastern Time on May 18, 2023 for shares held in a Plan. 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 - Go to www.virtualshareholdermeeting.com/HL2023
You may attend the meeting via the Internet 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 - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 22, 2023 for shares held directly and by 11:59 p.m. Eastern Time on May 18, 2023 for shares held in a Plan. 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.
|
HECLA MINING COMPANY 6500 N. MINERAL DRIVE SUITE 200 COEUR D’ALENE, ID 83815-9408 VOTE Before BY The INTERNET 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 by 11:59 p.m. Eastern Time on May 16, 2024 for shares held directly and by 11:59 p.m. Eastern Time on May 14, 2024 for shares held in a Plan. 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 - Go to www.virtualshareholdermeeting.com/HL2024 You may attend the meeting via the Internet 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 - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 16, 2024 for shares held directly and by 11:59 p.m. Eastern Time on May 14, 2024 for shares held in a Plan. 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. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V01674-P88944 V41168-P05705 KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY HECLA MINING COMPANY THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED IN ITEM 1 AND “FOR” PROPOSALS 2 AND 3. 1. ELECTION OF CLASS II DIRECTORS Nominees: For Against Abstain 1a. Stephen F. Ralbovsky 1b. Catherine J. Boggs 1c. Mark P. Board 2. Proposal to ratify and approve the selection of BDO USA, P.C., as our independent registered public accounting firm for the calendar year ending December 31, 2024. 3. Advisory resolution to approve named executive officer compensation. 4. In their discretion, on all other business that may properly come before the meeting or any adjournment or adjournments thereof. This Proxy will be voted as specified. If no specification is made, this Proxy will be voted “FOR” the election of the three nominees for Director and “FOR” the approval of Proposals 2 and 3. This proxy also delegates discretionary authority to vote with respect to any other business which may properly come before the meeting or any adjournment or postponement thereof. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE PLEASE MARK, SIGN, DATE, AND PROMPTLY RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE. NOTE: The Proxy must be signed exactly as your name or names appear on this card. Executors, administrators, trustees, partners, etc., should give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer(s), who should specify the title(s) of such officer(s). For Against Abstain Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date | | | | | | | | | | | | | | | | | | | | | | | | | | | | | HECLA MINING COMPANY
| | | | | | | | | | | | | | | | | | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSALS 2 AND 3, AND FOR
| | | | | | | | | | | | | | | | | | | "1 YEAR" ON PROPOSAL 4
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. ELECTION OF CLASS I DIRECTORS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees:
| | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | | | 1a. Phillips S. Baker, Jr.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | 1b. George R. Johnson
| | ☐ | | ☐ | | ☐ | | | | | | For | | Against | | Abstain | | | | | 2. Proposal to ratify and approve the selection of BDO USA, LLP, as our independent auditors of the Company for the calendar year ending December 31, 2023.
| | ☐ | | ☐ | | ☐ | | | | | | | 3. Advisory resolution to approve named executive officer compensation.
| | | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | 1 Year | | 2 Years | | 3 Years | | Abstain | | | | | | 4. Advisory vote on the frequency of our say-on-pay votes for named executive officer compensation.
| | ☐ | | ☐ | | ☐ | | ☐ | | | | | | 5. In their discretion on all other business that may properly come before the meeting or any adjournment or adjournments thereof.
| | | | | | | | | | | | | This Proxy will be voted as specifed. If no specification is made, this Proxy will be voted "FOR" the election of the two nominees for Director and "FOR" the approval of Proposals 2 and 3, and FOR "1 Year" in Proposal 4. This proxy also delegates discretionary authority to vote with respect to any other business which may properly come before the meeting or any adjournment or postponement thereof.
| | | | | | | | | | | IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE PLEASE MARK, SIGN, DATE, AND PROMPTLY RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.
| | | | | | | | | | | NOTE: The Proxy must be signed exactly as your name or names appear on this card. Executors, administrators, trustees, partners, etc., should give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer(s), who should specify the title(s) of such officer(s).
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | Signature (Joint Owners) | | Date | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. V41169-P05705 HECLA MINING COMPANY ANNUAL MEETING OF SHAREHOLDERS May 17, 2024 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE NOMINEES FOR CLASS II DIRECTOR LISTED IN ITEM 1 AND “FOR” PROPOSALS 2 AND 3 The undersigned, revoking any previous proxies, hereby appoints PHILLIPS S. BAKER, JR. and MICHAEL B. WHITE, and each of them, proxies of the undersigned, with full power of substitution, to attend the Company’s Annual Meeting of Shareholders on May 17, 2024, and any adjournments or postponements thereof, and there to vote the undersigned’s shares of Common Stock of the Company on the following matters as described in the Board of Directors Proxy Statement for such meeting, a copy of which has been received by the undersigned. You may attend the meeting in person or via the Internet and vote electronically during the meeting. Have the information that is printed on the box marked by the arrow available and follow the instructions. Shares represented by this Proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote “FOR” each of the nominees for Class II director, “FOR” Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. Continued and to be signed on reverse side — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
V01675-P88944
| | HECLA MINING COMPANY | | ANNUAL MEETING OF SHAREHOLDERS | May 23, 2023 | | PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES FOR CLASS I DIRECTOR LISTED IN ITEM 1 AND "FOR" PROPOSALS 2 AND 3, AND FOR "1 YEAR" ON PROPOSAL 4 | | The undersigned, revoking any previous proxies, hereby appoints PHILLIPS S. BAKER, JR. and MICHAEL B. WHITE, and each of them, proxies of the undersigned, with full power of substitution, to attend the Company's Annual Meeting of Shareholders on May 23, 2023, and any adjournments or postponements thereof, and there to vote the undersigned's shares of Common Stock of the Company on the following matters as described in the Board of Directors Proxy Statement for such meeting, a copy of which has been received by the undersigned.
| | You may attend the meeting in person or via the Internet and vote electronically during the meeting. Have the information that is printed on the box marked by the arrow available and follow the instructions.
| | Shares represented by this Proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote "FOR" each of the nominees for Class I director, "FOR" Proposals 2 and 3, and "1 Year" on Proposal 4.
| | In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
| | Continued and to be signed on reverse side
|
|
