SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant ☑ | Filed by a Party other than the Registrant ☐ |
|
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☑ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to § 240.14a-12 |
Saia, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☑ | No fee required. |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| 1) | Title of each class of securities to which transaction applies: |
| 2) | Aggregate number of securities to which transaction applies: |
| 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
| 4) | Proposed maximum aggregate value of transaction: |
| 5) | Total Fee paid: |
☐ | Fee paid previously with preliminary materials. |
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| 1) | Amount Previously Paid: |
| 2) | Form, Schedule or Registration Statement No.: |
| 3) | Filing Party: |
| 4) | Date Filed: |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 26, 201828, 2020
To Our Stockholders:
We cordially invite you to attend the 20182020 annual meeting of stockholders of Saia, Inc. The meeting will take place at the Renaissance Concourse Atlanta Airport Hotel, One Hartsfield CentreSaia, Inc. , 11465 Johns Creek Parkway, Atlanta, Georgia 30354First Floor, Johns Creek, GA 30097 on April 26, 201828, 2020 at 10:30 a.m. local time. We look forward to your attendance, either in person or by proxy.
The purpose of the meeting is to:
| 2. |
|
| Vote on an advisory basis to approve the compensation of Saia’s Named Executive Officers; |
|
| Ratify the appointment of KPMG LLP as Saia’s independent registered public accounting firm for fiscal year |
|
| Transact any other business that may properly come before the meeting and any postponement or adjournment of the meeting. |
Only stockholders of record at the close of business on March 7, 20184, 2020 may vote at the meeting or any postponements or adjournments of the meeting.
By order of the Board of Directors,
Frederick J. Holzgrefe, IIIDouglas L. Col
Secretary
March 20, 201817, 2020
Please complete, date, sign and return the accompanying proxy card or vote by telephone or the internet. The enclosed return envelope requires no additional postage if mailed in either the United States or Canada. Alternatively, you may vote electronically via the internet. Go to www.investorvote.com/saia and follow the steps outlined on the secure website.
If you are a registered stockholder, you may elect to have next year’s proxy statement and annual report made available to you via the internet. We strongly encourage you to enroll in this service. It is a cost-effective way for us to send you proxy materials and annual reports.
Your vote is very important. Please vote whether or not you plan to attend the meeting.
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement before voting. For more complete information regarding the 20172019 performance of Saia, Inc. (the “Company”), please review the Company’s Annual Report on Form 10-K.
20182020 Annual Meeting of Stockholders
Date and Time:
April 26, 2018,28, 2020, 10:30 a.m., local time
Place:
Renaissance Concourse Atlanta Airport HotelSaia, Inc.
One Hartsfield Centre11465 Johns Creek Parkway, First Floor
Atlanta,Johns Creek, Georgia 3035430097
Record Date:
March 7, 20184, 2020
Voting Matters and Board Recommendations
Our Board’s Recommendation | |
Election of | FOR each Director Nominee |
|
|
Advisory Vote to Approve Executive Compensation (page | FOR |
Ratification of Appointment of Independent Registered Public Accounting Firm (page | FOR |
20172019 Business Highlights
In 2017,2019, the Company continued to effectively execute its long-term strategic plan and delivered strong operating results. The following illustrates the three-year directional relationship between Company performance, based on four of the Company’s key operating metrics, and the compensation (as defined below) of Saia’s President and Chief Executive Officer.
i
Director Nominees (page 5)
The Board of Directors currently consists of tentwelve directors divided into three classes. Directors in each class are elected to serve for three-year terms that expire in successive years. The terms of the Class IIII directors will expire at the upcoming annual meeting. Mr. Björn E. Olsson (a Class III director) and Mr. Herbert A. Trucksess, III (a Class I director) are retiring at the annual meeting and, as a result, the number of directors to constitute the Board will be reduced to ten directors and the number of Class III directors and Class I directors will both be reduced to three at that time. Because of this reduction in the size of the Board, proxies cannot be voted for a greater number of persons than the number of nominees named herein. The Board of Directors has nominated the following persons for election as Class IIII directors for three-year terms expiring at the annual meeting of stockholders to be held in 2021.2023. Each nominee is currently a director of Saia.
Name |
| Age |
| Director Since |
| Primary Occupation |
| Committee Memberships |
Di-Ann Eisnor* |
| 45 |
| 2017 |
| Director of Growth of Waze Inc. |
| Compensation |
William F. Evans* |
| 70 |
| 2013 |
| Retired Chief Financial Officer of Witness Systems, Inc. |
| Audit |
Herbert A. Trucksess, III± |
| 68 |
| 2000 |
| Chairman of the Board and Retired Chief Executive Officer of Saia, Inc. |
| None |
Jeffrey C. Ward* |
| 59 |
| 2006 |
| Vice President of A.T. Kearney, Inc. |
| Compensation; Nominating and Governance |
Name |
| Age |
| Director Since |
| Primary Occupation |
| Committee Memberships |
Donna E. Epps* |
| 55 |
| 2019 |
| Retired Deloitte LLP partner |
| Audit, Nominating and Governance |
John P. Gainor, Jr.* |
| 63 |
| 2016 |
| Retired President and CEO of International Dairy Queen, Inc. |
| Audit, Nominating and Governance |
Randolph W. Melville*± |
| 61 |
| 2015 |
| Retired Senior VP and General Manager of Frito-Lay North America, Western Division |
| Compensation, Nominating and Governance |
* | Independent Director |
± |
|
Management Proposals (pages 59-71)63-65)
1. |
|
| Advisory Vote to Approve Executive Compensation. We are asking stockholders to approve on an advisory basis our Named Executive Officer compensation. The Board recommends a FOR vote because it believes that our compensation policies and practices are effective in attracting, motivating and retaining talented executive officers and aligning the executives’ long-term interests with those of our stockholders. |
| Ratification of Appointment of Independent Registered Public Accounting Firm. As a matter of good governance, we are asking our stockholders to ratify the selection of KPMG LLP as our auditors for |
ii
Corporate Governance (page 12)
Saia has the following corporate governance provisions and policies:
Separate Chief Executive Officer and Chairman of the Board. The Chief Executive Officer is responsible for implementing the strategic direction of the Company and managing the day-to-day operation and performance of the Company, while the Chairman provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full Board.
The Board has a Lead Independent Director. The Lead Independent Director position ensures the Board has a director in a leadership position that is “independent” under all applicable rules of the NASDAQNasdaq Global Select Market and the Securities and Exchange Commission. The Lead Independent Director is elected annually by the independent directors. For 2017,2019, the Lead Independent Director was Björn E. Olsson.Randolph W. Melville.
Majority Voting for Director Elections. Saia’s Bylaws require that, in an uncontested election, a nominee to the Board must receive more votes cast for than against his or her election in order to be elected to the Board. If an incumbent director fails to receive a majority of the vote for reelection, the Nominating and Governance Committee recommends to the full Board whether to accept or reject the nominee’s previously submitted resignation, and the full Board makes the final determination. We believe the ability of stockholders to vote for or against a director, as opposed to merely withholding a vote for a director, increases accountability to stockholders. The election of directors at the 20182020 annual meeting of stockholders is an uncontested election.
Three Standing Committees of the Board of Directors: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Saia’s Board committees are comprised entirely of independent directors. Saia’s committee charters are available free of charge on the Company’s website (www.saiacorp.com) under the investor relations section.
Stock Ownership Guidelines. The Company has adopted stock ownership guidelines that apply to all officers who are eligible to receive long-term incentives, including all Named Executive Officers, and to Saia’s directors.
Clawback Policy. The Company has a “clawback” policy for performance-basedthat authorizes the Company to seek to recover incentive compensation whereawarded to an officer or executive of Saia if the result of a performance measure upon which the award was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award. In addition, if an officer or executive of Saia engages in “Improper Conduct” (as defined under the policy), Saia may, within three years following the payment was predicated on the achievementor vesting of financial results that were subsequently the subjectincentive compensation, seek recovery of a material restatement and a lower payment would have been made based on the restated financial results.such incentive compensation.
Policy Against Hedging and Pledging of Saia Stock. Directors and employees subject to the Company’s insider trading policies may not engage in short sales of Saia common stock, in transactions involving puts, calls, or other derivative securities of the Company or in hedging transactions with respect to the Company. Additionally, directors and such employees are prohibited from holding Saia stock in a margin account and from pledging Saia common stock as collateral for indebtedness.
iii
Executive Compensation Highlights (page 21)22)
20172019 Say-on-Pay Results. In 2017,2019, holders of 96.5%97.7% of our stock voting on the question approved on an advisory basis the compensation paid to our Named Executive Officers as described in the 20172019 proxy statement. The chart below shows the Company’s “say-on-pay” results over the past five years:
iiiiv
3-Year CEO Total Direct Compensation(1) vs. 3-Year Stockholder Return(2)
| (1) | CEO total direct compensation reflects actual cash compensation earned for |
| (2) | The shaded |
ivv
Below is a summary of compensation awarded to, earned by or paid to the Named Executive Officers for services rendered in all capacities within Saia during the fiscal year ended December 31, 2017.2019.
Name & Principal Position |
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
|
| Salary ($) |
|
| Bonus ($) |
|
| Stock Awards ($) |
|
| Option Awards ($) |
|
| Non-Equity Incentive Plan Compensation ($) |
|
| All Other Compensation ($) |
|
| Total ($) |
| ||||||||||||||
Richard D. O'Dell, |
|
| 727,371 |
|
|
| — |
|
|
| 1,076,247 |
|
|
| 303,707 |
|
|
| 734,095 |
|
|
| 63,168 |
|
|
| 2,904,588 |
|
|
| 850,601 |
|
|
| — |
|
|
| 1,530,047 |
|
|
| 418,384 |
|
|
| 554,276 |
|
|
| 100,461 |
|
|
| 3,453,769 |
|
President & Chief Executive Officer (PEO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Chief Executive Officer (PEO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frederick J. Holzgrefe, III, |
|
| 434,492 |
|
|
| — |
|
|
| 614,478 |
|
|
| 95,867 |
|
|
| 329,959 |
|
|
| 46,178 |
|
|
| 1,520,974 |
|
|
| 556,118 |
|
|
| — |
|
|
| 742,507 |
|
|
| 203,063 |
|
|
| 256,244 |
|
|
| 68,232 |
|
|
| 1,826,164 |
|
Executive Vice President & Chief Financial Officer (PFO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
President & Chief Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Robert S. Chambers |
|
| 230,289 |
|
|
| 175,000 |
|
|
| 449,986 |
|
|
| — |
|
|
| — |
|
|
| 9,396 |
|
|
| 864,670 |
| ||||||||||||||||||||||||||||
Former Vice President & Chief Financial Officer (PFO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raymond R. Ramu, |
|
| 372,443 |
|
|
| — |
|
|
| 396,069 |
|
|
| 55,445 |
|
|
| 198,571 |
|
|
| 34,313 |
|
|
| 1,056,840 |
|
|
| 455,039 |
|
|
| — |
|
|
| 421,866 |
|
|
| 115,478 |
|
|
| 184,987 |
|
|
| 49,688 |
|
|
| 1,227,057 |
|
Executive Vice President & Chief Customer Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Michelle Richard |
|
| 264,981 |
|
|
| — |
|
|
| 107,810 |
|
|
| 30,510 |
|
|
| 133,716 |
|
|
| 28,934 |
|
|
| 565,951 |
| ||||||||||||||||||||||||||||
Vice President of Human Resources |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Craig A. Thompson |
|
| 278,275 |
|
|
| — |
|
|
| 255,024 |
|
|
| 26,948 |
|
|
| 141,174 |
|
|
| 17,297 |
|
|
| 718,718 |
| ||||||||||||||||||||||||||||
Paul C. Peck |
|
| 354,834 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 270,469 |
|
|
| 35,905 |
|
|
| 661,208 |
| ||||||||||||||||||||||||||||
Executive Vice President Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark H. Robinson |
|
| 305,048 |
|
|
| — |
|
|
| 169,224 |
|
|
| 47,856 |
|
|
| 170,580 |
|
|
| 39,780 |
|
|
| 732,488 |
| ||||||||||||||||||||||||||||
Retired Vice President & Chief Information Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
Karla J. Staver |
|
| 258,052 |
|
|
| — |
|
|
| 199,979 |
|
|
| — |
|
|
| 51,032 |
|
|
| 26,729 |
|
|
| 535,792 |
| ||||||||||||||||||||||||||||
Vice President of Safety & Human Resources |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
T. Michelle Richard |
|
| 328,818 |
|
|
| — |
|
|
| 146,256 |
|
|
| 40,151 |
|
|
| 125,543 |
|
|
| 40,259 |
|
|
| 681,028 |
| ||||||||||||||||||||||||||||
Former Vice President of Human Resources |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See also the narrative and footnotes accompanying the 2017 Summary Compensation Table on page 39.41.
Important Dates for 20192021 Annual Meeting of Stockholders (page 74)68)
Any stockholder who intends to present a proposal at the annual meeting in 20192021 must deliver such proposal to Saia’s corporate Secretary at 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097:
Not later than November 20, 2018,17, 2020, if the proposal is submitted for inclusion in our proxy materials for that meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934.
On or after December 27, 2018,29, 2020, and on or before January 26, 2019,28, 2021, if the proposal is submitted pursuant to Saia’s By-Laws, in which case we are not required to include the proposal in our proxy materials.
vvi
11465 Johns Creek Parkway, Suite 400
Johns Creek, Georgia 30097
|
|
|
The Board of Directors (the “Board”) of Saia, Inc. (“Saia” or the “Company”) is furnishing you this proxy statement in connection with the solicitation of proxies on its behalf for the 20182020 annual meeting of stockholders. The meeting will take place at the Renaissance Concourse Atlanta Airport Hotel, One Hartsfield CentreSaia, Inc., 11465 Johns Creek Parkway, Atlanta, Georgia 30354First Floor, Johns Creek, GA 30097 on April 26, 201828, 2020 at 10:30 a.m. local time. At the meeting, stockholders will vote on (a) the election of fourthree directors, (b) the Saia, Inc. 2018 Omnibus Incentive Plan, (c) an advisory basis to approve the compensation of Saia’s Named Executive Officers, (d)(c) the ratification of the appointment of KPMG LLP as Saia’s independent registered public accounting firm for fiscal year 2018,2020, and (e)(d) the transaction of any other business that may properly come before the meeting, and any postponement or adjournment of the meeting, although we know of no other business to be presented.
By submitting your proxy (either by signing and returning the enclosed proxy card or by voting electronically on the internet or by telephone), you authorize Bjorn E. Olsson, Lead Independent Director, Richard D. O’Dell, Saia’s President and Chief Executive Officer, and Frederick J. Holzgrefe, III, Saia’s Executive Vice President & Chief Financial OfficerRichard D. O’Dell and Secretary,Herbert A. Trucksess, III, and each of them to represent you and vote your shares at the meeting in accordance with your instructions. They also may vote your shares to adjourn the meeting and will be authorized to vote your shares at any postponements or adjournments of the meeting.
Saia’s Annual Report to Stockholders for the fiscal year ended December 31, 2017,2019, which includes Saia’s audited annual consolidated financial statements, accompanies this proxy statement. Although the Annual Report is being distributed with this proxy statement, it does not constitute a part of the proxy solicitation materials and is not incorporated by reference into this proxy statement.
We are first sending this proxy statement, form of proxy and accompanying materials to stockholders on or about March 20, 2018.17, 2020.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY SUBMIT YOUR PROXY EITHER IN THE ENCLOSED ENVELOPE, VIA THE INTERNET OR BY TELEPHONE. |
INFORMATION ABOUT THE ANNUAL MEETING
What is the purpose of the annual meeting?
At the annual meeting, the stockholders will be asked to:
| 2. |
|
| Vote on an advisory basis to approve the compensation of Saia’s Named Executive Officers; and |
|
| Ratify the appointment of KPMG LLP as Saia’s independent registered public accounting firm for fiscal year |
Stockholders also will transact any other business that may properly come before the meeting. Members of Saia’s management team and a representative of KPMG LLP, Saia’s independent registered public accounting firm, will be present at the annual meeting to respond to appropriate questions from stockholders.
1
You may vote if you owned shares of our common stock at the close of business on March 7, 2018,4, 2020, the record date for the annual meeting, provided such shares are held directly in your name as the stockholder of record or are held for you as the beneficial owner through a bank, broker or other nominee. Each outstanding share of common stock is entitled to one vote for all matters that properly come before the annual meeting for a vote. At the close of business on the record date, there were 25,676,45526,063,348 shares of Saia common stock outstanding and entitled to vote.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholders of Record. If your shares are registered directly with our transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and these proxy materials are being sent directly to you by us. As the stockholder of record, you have the right to grant your voting proxy directly to us through the enclosed proxy card or to vote in person at the annual meeting.
Beneficial Owners. Many of our stockholders hold their shares through a bank, broker or other nominee rather than directly in their own name. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials (including a voting instruction card) are being forwarded to you by your bank, broker or nominee who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your bank, broker or nominee on how to vote your shares. As the beneficial owner of shares, you are also invited to attend the annual meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the annual meeting unless you obtain a legal proxy from your bank, broker or nominee and present it at the 20182020 annual meeting. Your bank, broker or nominee has enclosed a voting instruction card for you to use in directing the bank, broker or nominee regarding how to vote your shares.
How do I vote?
Stockholders of Record.
1.You May Vote by Mail. If you properly complete and sign the accompanying proxy card and return it in the enclosed envelope, it will be voted in accordance with your instructions. The enclosed envelope requires no additional postage if mailed in either the United States or Canada.
2.You May Vote by Telephone or the Internet. You may vote by telephone or on the internet by following the instructions included on the proxy card. If you vote by telephone or on the internet, you do not have to mail in your proxy card. Internet and telephone voting are available 24 hours a day. Votes submitted through the internet (www.investorvote.com/SAIA) or by telephone (1-800-652-8683) must be received by 11:59 p.m. Eastern time on April 25, 2018.27, 2020.
| NOTE: | If you are a registered stockholder, you may elect to have next year’s proxy statement and annual report made available to you via the internet. We strongly encourage you to enroll in this service. It is a cost-effective way for us to send you proxy materials and annual reports. |
3.You May Vote in Person at the Meeting. You may deliver your completed proxy card in person. Additionally, we will pass out written ballots to registered stockholders who wish to vote in person at the meeting.
Beneficial Owners.
If you hold your shares in street name, follow the voting instruction card you receive from your bank, broker or other nominee. If you want to vote in person at the annual meeting, you must obtain a legal proxy from your bank, broker or nominee and present it at the annual meeting.
Can I change my vote?
Stockholders of Record. You may change your vote at any time before the proxy is exercised by voting in person at the annual meeting, giving written notice to Saia’s Secretary revoking your proxy, submitting a properly
2
signed proxy bearing a later date or voting again by telephone or on the internet (your latest telephone or internet vote is counted).
Beneficial Owners. If you hold your shares through a bank, broker or other nominee, you may change your vote by submitting new voting instructions following the instructions provided by your bank, broker or nominee.
What if I do not vote for some of the items listed on the proxy card or voting instruction card?
Stockholders of Record. If you indicate a choice with respect to any matter to be acted upon on your proxy card, the shares will be voted in accordance with your instructions. Proxy cards that are signed and returned, but do not contain voting instructions with respect to a proposal, will be voted in accordance with the recommendations of the Board with respect to that proposal.
Beneficial Owners. If you indicate a choice with respect to any matter to be acted upon on your voting instruction card, the shares will be voted in accordance with your instructions. If you do not indicate a choice with respect to a proposal or do not return your voting instruction card, the bank, broker or other nominee will determine if it has the discretionary authority to vote your shares. Regulations prohibit banks, brokers and other nominees from voting shares in elections of directors with respect to the Saia, Inc. 2018 Omnibus Incentive Plan or as to compensation of the Named Executive Officers, unless the beneficial owners indicate how the shares are to be voted. Therefore, unless you instruct your bank, broker or nominee on how to vote your shares with respect to the election of directors the Saia, Inc. 2018 Omnibus Incentive Plan or the compensation of Saia’s Named Executive Officers, your bank, broker or nominee will be prohibited from voting on your behalf on any such matter for which your instructions are not provided. As such, it is critical that you cast your vote if you want it to count for the proposals regarding the aforementioned matters. Your bank, broker or nominee will, however, continue to have discretionary authority to vote uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm.
How many shares must be present to hold the meeting?
A quorum must be present at the annual meeting for any business to be conducted. The presence at the annual meeting, in person or by proxy, of the holders of a majority of the shares of Saia common stock outstanding on the record date will constitute a quorum. Abstentions and broker non-votes (which occur when a bank, broker or other nominee holding shares for a beneficial owner does not have discretionary voting authority with respect to a proposal and has not received instructions with respect to that proposal from the beneficial owner) will be treated as shares present for purposes of determining whether a quorum is present.
What if a quorum is not present at the meeting?
If a quorum is not present at the start of the meeting, the stockholders who are represented may adjourn the meeting until a quorum is present. The time and place of the adjourned meeting will be announced at the time the adjournment is taken, and so long as the adjournment is not for longer than 30 days, no other notice will be given.
How does the Board of Directors recommend I vote on the proposals?
Your Board recommends that you vote:
FOR the election of the fourthree nominees to the Board of Directors;
FOR the Saia, Inc. 2018 Omnibus Incentive Plan;
FOR the compensation of Saia’s Named Executive Officers as presented in Proposal 3;2; and
FOR the ratification of KPMG LLP as Saia’s independent registered public accounting firm.
Will any other business be conducted at the meeting?
We know of no other business that will be presented at the meeting. If any other matter properly comes before the stockholders for a vote at the meeting, the proxy holders will vote your shares in accordance with their best judgment.
3
Saia’s transfer agent, Computershare Trust Company, N.A., will tabulate and certify the votes. Douglas L. Col, the Company’s TreasurerVice President of Finance, Chief Financial Officer and Assistant Secretary, will serve as the inspector of elections.
How many votes are required to elect the director nominees?
Because this is considered an uncontested election under the Company’s Bylaws, a nominee for director is elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions will not affect the election of directors. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted. If an incumbent director fails to receive a majority of the vote for re-election, the Nominating and Governance Committee of the Board will act on an expedited basis to determine whether to accept the director’s previously tendered irrevocable resignation and will submit such recommendation for prompt consideration by the Board. In considering whether to accept or reject the tendered resignation, the Nominating and Governance Committee and the Board will consider any factors they deem relevant. Any director who fails to receive a majority of the vote for re-election pursuant to this provision of the Corporate Governance Guidelines will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation.
What happens if a nominee is unable to stand for election?
If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee unless you have withheld authority.
How many votes are required to approve the proposals other than the director nomination proposal?
The approval of the Saia, Inc. 2018 Omnibus Incentive Plan, the advisory approval of the compensation of Saia’s Named Executive Officers and the ratification of the appointment of KPMG LLP as Saia’s independent registered public accounting firm each require the affirmative vote of a majority of the shares present at the meeting in person or by proxy and entitled to vote.
What effect will abstentions and broker non-votes have on the proposals?
Shares voting “ABSTAIN” with respect to any nominee for director will be excluded entirely from the vote and will have no effect on the proposal. Shares voting “ABSTAIN” on the approval of the Saia, Inc. 2018 Omnibus Incentive Plan, the advisory vote on executive compensation and the ratification of the appointment of the Company’s independent registered public accounting firm will be treated as shares present for quorum purposes and entitled to vote, so they will have the same practical effect as votes against the proposals. In tabulating the voting results for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of any matter being voted on at the meeting, assuming that a quorum is obtained.
When will the Company announce the voting results?
We will announce the preliminary voting results at the annual meeting. The Company will report the final results in a Current Report on Form 8-K filed with the Securities and Exchange Commission within four business days following the annual meeting.
4
ELECTION OF DIRECTORS
The Board of Directors currently consists of tentwelve directors divided into three classes (Class I, Class II and Class III). Mr. Björn E. Olsson (a Class III director) and Mr. Herbert A. Trucksess, III (a Class I director) are retiring at the annual meeting and, as a result, the number of directors to constitute the Board will be reduced to ten directors and the number of Class III directors and Class I directors will both reduced to three at that time. Because of this reduction in the size of the Board, proxies cannot be voted for a greater number of persons than the number of nominees named herein.
Directors in each class are elected to serve for three-year terms that expire in successive years. The terms of the Class IIII directors will expire at the upcoming annual meeting. The Board of Directors has nominated Di-Ann Eisnor, William F. Evans, Herbert A. Trucksess, IIIDonna E. Epps, John P. Gainor, Jr., and Jeffrey C. WardRandolph W. Melville for election as Class IIII directors for three-year terms expiring at the annual meeting of stockholders to be held in 20212023 and until their successors are elected and qualified. Ms. EisnorEpps and Messrs. Evans, TrucksessGainor and WardMelville currently serve as Class IIII directors.
Each nominee has consented to being named in this proxy statement and has agreed to serve if elected. If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you have withheld authority.
Because this is considered an uncontested election under the Company’s Bylaws, a nominee for director is elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions will not affect the election of directors. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted. If an incumbent director fails to receive a majority of the vote for re-election, the Nominating and Governance Committee of the Board will act on an expedited basis to determine whether to accept the director’s previously tendered irrevocable resignation and will submit such recommendation for prompt consideration by the Board. In considering whether to accept or reject the tendered resignation, the Nominating and Governance Committee and the Board will consider any factors they deem relevant. Any director who fails to receive a majority of the vote for re-election pursuant to this provision of the Corporate Governance Guidelines will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE FOURTHREE NOMINEES.
The following tables set forth certain information regarding each nominee for director and continuing director of the Company. The information presented includes information provided to the Company by each nominee and continuing director including such person’s name, age, principal occupation and business experience for at least the past five years, the names of other publicly-held companies of which such person currently serves as a director or has served as a director during the past five years and the year in which the nominee first became a director of Saia.
The Board of Directors has determined that the following directors are deemed “independent” pursuant to the NASDAQNasdaq Global Select Market’s (“NASDAQ”(���Nasdaq”) definition of independent director: Di-Ann Eisnor, Donna E. Epps, William F. Evans, John P. Gainor, Jr., John J. Holland, Randolph W. Melville, Björn E. Olsson, Douglas W. Rockel and Jeffrey C. Ward and Susan F. Ward. Mr. Olsson is retiring at the time of the upcoming annual meeting.
In addition to the information presented below regarding the specific experience, qualifications, attributes and skills of each nominee and continuing director that led the Board of Directors to the conclusion that such person should serve as a director, the Board also believes that all of the nominees and continuing directors have a reputation for high personal and professional ethics, integrity, values and character. Each nominee and continuing director brings a strong and unique background and set of skills to the Board of Directors giving the Board as a whole competence and experience in a wide variety of areas, including corporate governance and board service, executive management, sales and marketing, the less-than-truckload (“LTL”) and transportation industry, accounting and finance, and risk assessment. They have demonstrated business acumen and an ability to exercise sound judgment, as well as a
5
commitment of service to the Company and the Board. Each nominee and continuing director is committed to achieving, monitoring and improving on the Company’s business strategy.
The Board of Directors assesses diversity in its broadest sense and considers the backgrounds, experiences and viewpoints of its members and director candidates. When identifying candidates for director, the Board endeavors to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen.
6
Current NomineesCURRENT NOMINEES
NOMINEES FOR ELECTION AS
CLASS IIII DIRECTORS FOR A THREE-YEAR TERM
EXPIRING AT THE 20212023 ANNUAL MEETING
Director |
| Age |
| Principal Occupation, Business Experience and Directorships |
Donna E. Epps (1) Director since: 2019 | 55 | Ms. Epps was with Deloitte LLP for over 31 years. Ms. Epps served as an attest Partner of Deloitte LLP from 1998 through 2003 and as a Risk and Financial Advisory Partner of Deloitte LLP from 2004 until her retirement in 2017. Ms. Epps was originally identified to the Nominating and Governance Committee through a third party search. Ms Epps brings to the Board significant audit, governance, risk and compliance experience as a provider of attest and consulting services to private and public companies across multiple industries. Ms. Epps qualifies as an “audit committee financial expert.” | ||
John P. Gainor, Jr. Director since: 2016 | 63 | Mr. Gainor served as the President and CEO of International Dairy Queen, a subsidiary of Berkshire Hathaway from 2008 until his retirement in 2017. Mr. Gainor was with International Dairy Queen starting in 2003 and served as its Chief Supply Chain Officer prior to being named President and CEO. From 2000-2003, Mr. Gainor was President and Co-Founder of Supply Solutions, Inc., a company that focused on designing and implementing supply chain solutions and business expansion models for major restaurant chains and consumer products companies. Mr. Gainor has also held various executive positions focusing on logistics, supply chain and transportation with Consolidated Distribution Corporation, AmeriServe Distribution Corporation, and Warner Lambert Corporation. Mr. Gainor serves as an independent director and member of the compensation and nominating and governance committees of Jack in the Box, Inc. Mr. Gainor brings significant business experience to the Board as the former President and CEO of an internationally-known fast food restaurant chain, and based on over forty years of experience in logistics, supply chain and transportation. | ||
(1) Ms. Epps was appointed by the Board to fill a vacancy, so this is her first election. |
7
Director since: 2015 | 61 | Mr. Melville was the Senior Vice President and General Manager for the Western Division of PepsiCo’s Frito-Lay North America until his retirement in 2017. In that position, he was accountable for all aspects of the company’s western division performance, including sales, operations, supply chain, finance, human resources and strategic planning. Prior to his 20-plus years at Frito-Lay, Mr. Melville served as a Senior Vice President at Maytag Corporation from 1999-2001 and held various sales and marketing leadership positions with Procter & Gamble Distributing Company from 1981 to 1993. Mr. Melville serves on the Board of Trustees of The Northwestern Mutual Life Insurance Company and previously served as an independent director and member of the compensation committee of Interline Brands, Inc. Mr. Melville brings significant national sales, marketing and operations experience to the Board. Mr. Melville also has substantial expertise in the areas of distribution, international business and human resources and adds valuable perspectives complementing those of the current board members. Mr. Melville serves as Saia’s Lead Independent Director. | ||
8
CLASS I DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE AT THE 2021 ANNUAL MEETING
Director | Age | Principal Occupation, Business Experience and Directorships | ||||||||
Di-Ann Eisnor Director since: 2017 |
|
| 47 | Ms. Eisnor
Ms. Eisnor brings to the Board significant entrepreneurial experience with disruptive technologies focused on the transportation industry and in building and leading marketing services and geo-mapping businesses. | ||||||
William F. Evans Director since: 2013 |
|
| 72 | From May 2002 to June 2007, Mr. Evans was Executive Vice President and Chief Financial Officer of Witness Systems, Inc., a publicly-traded workforce optimization services and software provider. He was a director of ValueVision Media, Inc., a publicly-traded multichannel electronics retailer, from 2011 to 2014. From 1993 to 2011, he served as a director of SFN Group, Inc., a publicly-traded company that provided temporary and permanent staffing solutions to businesses. From 2008 to 2010, he served as a director of Wolverine Tube, Inc., a publicly-traded company in the tubing, fabricated products and metal joining products industry.
Mr. Evans brings to the Board professional experience as a Chief Financial Officer of multiple publicly-traded companies, significant finance and accounting expertise as a director of other public companies and experience as a partner in a public accounting firm. Mr. Evans qualifies as an “audit committee financial expert.” |
CLASS II DIRECTORS CONTINUING IN OFFICE
WHOSE TERMS EXPIRE AT THE 2019 ANNUAL MEETING
10
Director since: 2006 | 58 | Mr. O’Dell has been Chief Executive Officer of Saia, Inc. since January 2019 and served as President and Chief Executive Officer
As a long-time executive of the Company, Mr. O’Dell brings extensive knowledge and understanding of the Company and the LTL industry to the Board. Additionally, he has experience in public accounting as a certified public accountant. |
|
|
| ||||
an “audit committee financial expert.” |
11
The system of governance practices followed by the Company is memorialized in the Company’s Bylaws, in the chartersCharters of the three standing committees of the Board of Directors (the Audit Committee, the Compensation Committee and the Nominating and Governance Committee) and in the Company’s Corporate Governance Guidelines. The committee chartersCharters and Corporate Governance Guidelines are intended to provide the Board with the necessary authority and practices to review and evaluate the Company’s business and to make decisions independent of the influence of the Company’s management. The Corporate Governance Guidelines establish guidelines for the Board with respect to Board governance and meetings, Board composition and diversity, selection and election of directors, director responsibility, director access to management and independent advisors and non-employee director compensation. The committee chartersCharters and the Corporate Governance Guidelines are reviewed annually by the Board and updated as necessary to reflect evolving governance practices and changes in regulatory requirements.
The Company has adopted a Code of Business Conduct and Ethics applicable to all directors, officers and employees, including its principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct and Ethics is filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017,2019, filed with the Securities and Exchange Commission. The Code of Business Conduct and Ethics, the Corporate Governance Guidelines and each of the Board’s committee chartersCharters are available free of charge under the “Investor Relations – Governance” page of the Company’s website (www.saiacorp.com).
Board Leadership Structure
Saia’s Board structure provides for a Chief Executive Officer separate from the Chairman of the Board. The Board believes having a separate Chairman and Chief Executive Officer allows each to more fully focus on their applicable responsibilities. Further, maintaining separate roles allows the Chairman to oversee the Chief Executive Officer’s performance and remain more impartial when governing the Board. The Chief Executive Officer is responsible for implementing the strategic direction of the Company and managing the day-to-day operation and performance of the Company, while the Chairman provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full Board.
The Lead Independent Director is “independent” under all applicable rules of the NASDAQNasdaq Global Select Market and the Securities and Exchange Commission and is elected annually by the independent directors. For 2017,2019, the Lead Independent Director was Björn E. Olsson.Randolph W. Melville. The primary responsibilities of the Lead Independent Director are to:
set jointly with the Chairman of the Board the schedule for Board meetings and provide input to the Chairman concerning the agenda for Board meetings;
advise the Chairman as to the quality, quantity and timeliness of the flow of information to the non-employee directors;
chair all meetings of the Board at which the Chairman is not present;
coordinate, develop the agenda for, chair and moderate meetings of independent directors, and generally act as principal liaison between the independent directors and the Chairman;
provide input to the Board concerning the Chief Executive Officer’s performance; and
provide input to the Nominating and Governance Committee regarding the appointment of chairs and members of the various committees.
In addition, the Lead Independent Director has the authority to call meetings of independent directors. If requested by major stockholders, the Lead Independent Director will make himself reasonably available for direct communication.
12
The Board of Directors held fiveseven meetings in 2017.2019. Each director attended at least 75% of the meetings convened by the Board and the applicable committees during such director’s service on the Board during 2017.2019.
Executive sessions of non-employee directors and separate executive sessions of independent directors are held as part of each regularly scheduled meeting of the Board. The sessions of the independent directors are chaired by the Lead Independent Director.
Board Committees
The Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee, each of which is comprised entirely of independent directors. Current Committee memberships are as follows:
Audit Committee |
| Compensation Committee |
|
|
|
|
| ||
Audit Committee
The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act of 1934”). The Audit Committee held five meetings in 2017. The functions of the Audit Committee are described in the Audit Committee charter and include, among others, the following:
review the adequacy and quality of Saia’s accounting and internal control systems;
review Saia’s financial reporting process on behalf of the Board of Directors;
oversee the entire audit function, both internal and independent, including the selection of the independent registered public accounting firm;
review the Company’s major financial reporting exposures concerning risk assessment and management and the steps management has taken to monitor and control such exposures; and
provide an effective communication link between the auditors (internal and independent) and the Board of Directors.
Each member of the Audit Committee meets the independence and experience requirements for audit committee members as established by The NASDAQ Global Select Market. The Board of Directors has determined that Mr. Evans, Mr. Holland and Mr. Rockel are “audit committee financial experts,” as defined by applicable rules of the Securities and Exchange Commission.
Compensation Committee
The Compensation Committee held seven meetings in 2017. The functions of the Compensation Committee are described in the Compensation Committee charter and include, among others, the following:
determine the salaries, bonuses and other remuneration and terms and conditions of employment of the Named Executive Officers of Saia, except as to the Chief Executive Officer, the Committee makes a recommendation as to salary, which is then finally determined by the Board;
supervise the administration of Saia’s incentive compensation and equity-based compensation plans and approve grants under those plans; and
|
|
Each member of the Compensation Committee qualifies as (i) an independent director under applicable NASDAQ rules and Rule 10C-1 of the Securities Exchange Act of 1934; (ii) an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986 (the “Internal Revenue Code”), as amended; and (iii) a “non-employee director” for purposes of Rule 16b-3 of the Securities Exchange Act of 1934.
Compensation Consultant
The Compensation Committee has retained Mercer US, Inc. (“Mercer”) as its executive compensation consultant to provide information, analysis and recommendations regarding executive and director compensation. While it is necessary for the Committee’s consultant to interact with management to gather information, the Committee has adopted protocols governing if and when the consultant’s advice and recommendations can be shared with management. The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Compensation Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
For 2017, the Company paid Mercer $93,472 for executive and director compensation services rendered to the Compensation Committee. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”). For the past few years, including during 2017, the Company has used Marsh USA, Inc., an affiliate of MMC, to provide insurance brokerage services, based on a determination made by management in consideration of the expertise of Marsh USA, Inc. in providing insurance brokerage services for the transportation industry. The Company paid Marsh USA, Inc. $663,320 in fees in 2017 for such insurance brokerage services (this amount does not include insurance premiums that are paid through Marsh USA, Inc. to insurance carriers on behalf of Saia).
In connection with the Committee’s consideration of the independence of Mercer, the Committee confirmed with Mercer that:
The Mercer consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates;
The consultant is not responsible for selling other Mercer or affiliate services to the Company;
Mercer’s professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering their advice and recommendations;
The Mercer consultant has no business or personal relationships with any members of Saia management or the Board other than providing executive compensation consulting; and
The individual consultant and his immediate family members own no shares of Saia’s common stock.
In its evaluation of the relationship with Mercer, the Committee also reviewed the protocols used by the Committee in its dealings with Mercer which include:
The Committee has sole authority to retain and terminate Mercer at any time;
The Mercer consultant has direct access to the Compensation Committee without management intervention;
The Committee has in place a process to formally evaluate the quality and objectivity of the services provided by Mercer each year and determine whether to continue to retain Mercer;
|
|
The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and ensure that Mercer receives from management the information required to perform its duties in a timely manner.
Following this assessment of the relationship of Mercer and its affiliates with the Company, the Compensation Committee concluded that Mercer’s work for the Committee does not raise any conflict of interest and that Mercer qualified as independent.
Nominating and Governance Committee
The Nominating and Governance Committee held two meetings in 2017. The functions of the Nominating and Governance Committee are described in the Nominating and Governance Committee charter and include, among others, the following:
review the size and composition of the Board and make recommendations to the Board as appropriate;
review criteria for election to the Board and recommend candidates for Board membership; In identifying candidates for the Board, the Committee is to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen;
review the structure and composition of Board committees and make recommendations to the Board as appropriate;
develop and oversee an annual self-evaluation process for the Board and its committees;
review the Company’s major enterprise risk assessment and management processes for matters other than financial reporting risk matters;
provide oversight of corporate ethics issues and at least annually assess the adequacy of the Company’s Code of Business Conduct and Ethics; and
provide oversight on management succession issues.
Each member of the Nominating and Governance Committee meets the definition of an independent director under applicable NASDAQ rules.William F. Evans, Chair
Risk OversightDonna E. Epps
The Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of Company objectives, improve long-term Company performance and create stockholder value. A fundamental part of risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the full Board of Directors in setting the Company’s business strategy and objectives is integral to the Board’s assessment of the Company’s risk and in determining what constitutes an appropriate level of risk for the Company. The full Board of Directors conducts an annual risk assessment of the Company’s financial risk, legal/compliance risk and operational/strategic risk. The Board typically reviews at least one risk element in detail at each regular Board meeting and addresses individual risk issues throughout the year as necessary.John P. Gainor, Jr.
John J. Holland
Susan F. Ward
John J. Holland, Chair
Di-Ann Eisnor
Randolph W. Melville
Jeffrey C. Ward
John P. Gainor, Jr., Chair
Donna E. Epps
Randolph W. Melville
Jeffrey C. Ward
Björn E. Olsson, who is retiring from the Board at the upcoming annual meeting, was a member of the Nominating and Governance Committee.
Audit Committee
The Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act of 1934”). The Audit Committee held five meetings in 2019. The functions of the Audit Committee are described in the Audit Committee Charter and include, among others, the following:
review the adequacy and quality of Saia’s accounting and internal control systems;
review Saia’s financial reporting process on behalf of the Board of Directors;
oversee the entire audit function, both internal and independent, including the selection of the independent registered public accounting firm;
review the Company’s major financial reporting exposures concerning risk assessment and management and the steps management has taken to monitor and control such exposures; and
provide an effective communication link between the auditors (internal and independent) and the Board of Directors.
Each member of the Audit Committee meets the independence and experience requirements for audit committee members as established by The Nasdaq Global Select Market. The Board of Directors has determined that Ms. Epps, Mr. Evans, Mr. Holland and Ms. Ward are “audit committee financial experts,” as defined by applicable rules of the Securities and Exchange Commission.
Compensation Committee
The Compensation Committee held six meetings in 2019. The functions of the Compensation Committee are described in the Compensation Committee Charter and include, among others, the following:
determine the salaries, bonuses and other remuneration and terms and conditions of employment of the Named Executive Officers of Saia, except as to the Chief Executive Officer, the Committee makes a recommendation as to salary and bonus, which is then finally determined by the Board;
supervise the administration of Saia’s incentive compensation and equity-based compensation plans and approve grants under those plans; and
13
Each member of the Compensation Committee qualifies as (i) an independent director under applicable Nasdaq rules and Rule 10C-1 of the Securities Exchange Act of 1934; (ii) an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986 (the “Internal Revenue Code”), as amended; and (iii) a “non-employee director” for purposes of Rule 16b-3 of the Securities Exchange Act of 1934.
Compensation Consultant
The Compensation Committee has retained Mercer US Inc. as its executive compensation consultant to provide information, analysis and recommendations regarding executive and director compensation. Mercer reports directly to the Compensation Committee and takes direction from the Committee. While it is necessary for Mercer to interact with management to gather information, the Committee has adopted protocols governing if and when the consultant’s advice and recommendations can be shared with management. The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Compensation Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
For 2019, the Company paid Mercer $101,833 for executive and director compensation services rendered to the Compensation Committee. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”). Since 2010, including during 2019, the Company has used Marsh USA, Inc., an affiliate of MMC, to provide insurance brokerage services, based on a determination made by management in consideration of the expertise of Marsh USA, Inc. in providing insurance brokerage services for the transportation industry. The Company paid Marsh USA, Inc. $685,117 in fees in 2019 for such insurance brokerage services (this amount does not include insurance premiums that are paid through Marsh USA, Inc. to insurance carriers on behalf of Saia).
In connection with the Compensation Committee’s consideration of the independence of Mercer, the Committee confirmed with Mercer that:
The Mercer consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates;
The Mercer consultant is not responsible for selling other Mercer or affiliate services to the Company;
Mercer’s professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering their advice and recommendations;
The Mercer consultant has no business or personal relationships with any members of Saia management or the Board other than providing executive compensation consulting; and
The Mercer consultant and his immediate family members own no shares of Saia’s common stock.
In its evaluation of the relationship with Mercer, the Compensation Committee also reviewed the protocols used by the Committee in its dealings with Mercer which include:
The Committee has sole authority to retain and terminate Mercer at any time;
The Mercer consultant has direct access to the Committee without management intervention;
The Committee has in place a process to formally evaluate the quality and objectivity of the services provided by Mercer each year and determine whether to continue to retain Mercer;
14
• | The Committee has in |
The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and ensure that Mercer receives from management the information required to perform its duties in a timely manner.
Following this assessment of the relationship of Mercer and its affiliates with the Company, the Compensation Committee concluded that Mercer’s work for the Committee does not raise any conflict of interest and that Mercer qualified as independent.
Nominating and Governance Committee
The Nominating and Governance Committee held four meetings in 2019. The functions of the Nominating and Governance Committee are described in the Nominating and Governance Committee Charter and include, among others, the following:
review the size and composition of the Board and make recommendations to the Board as appropriate;
advise and make recommendations to the Board on corporate governance matters;
review criteria for election to the Board and recommend candidates for Board membership. In identifying candidates for the Board, the Committee is to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen;
review the structure and composition of Board committees and make recommendations to the Board as appropriate;
develop and oversee an annual self-evaluation process for the Board and its committees;
review the Company’s major enterprise risk assessment and management processes for matters other than financial reporting risk matters;
provide oversight of corporate ethics issues and at least annually assess the adequacy of the Company’s Code of Business Conduct and Ethics; and
provide oversight on management succession issues.
Each member of the Nominating and Governance Committee meets the definition of an independent director under applicable Nasdaq rules.
Risk Oversight
The Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of Company objectives, improve long-term Company performance and create stockholder value. A fundamental part of risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the full Board of Directors in setting the Company’s business strategy and objectives is integral to the Board’s assessment of the Company’s risk and in determining what constitutes an appropriate level of risk for the Company. The full Board of Directors conducts an annual risk assessment of the Company’s financial risk, legal/compliance risk and operational/strategic risk. The Board typically reviews at least one risk element in detail at each regular Board meeting and addresses individual risk issues throughout the year as necessary.
While the Board of Directors has the ultimate oversight responsibility for the risk management process, the Board delegates responsibility for certain aspects of risk management to its committees. In particular, the Audit Committee focuses on key business and financial risks and related controls and processes. Per its Charter, the Audit Committee discusses with management the Company’s major financial reporting exposures concerning risk assessment and management and the steps management has taken to monitor and control such exposures. The Company’s Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy and objectives and helps ensure that the Company’s compensation
15
policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee structures the Company’s executive compensation program to reduce the possibility that Saia’s executive officers, either individually or as a group, make excessively risky business decisions that could maximize short-term results at the expense of long-term value.
Finally, the Company’s Nominating and Governance Committee is responsible for overseeing the Company’s major non-financial reporting enterprise risk assessment and management processes. The Chair of the Nominating and Governance Committee discusses with both the Audit Committee and the Compensation Committee the processes used in the oversight of the non-financial reporting enterprise risk assessment and management processes.
The Board believes its leadership structure enhances overall risk oversight. While the Board requires risk assessments from management, the combination of Board member experience, continuing education and independence of governance processes provide an effective basis for testing, overseeing and supplementing management assessments of risk.
Environmental, Social and Governance (ESG) Matters
The Company’s Board and management are responsible for overseeing the Company’s environmental, social and organizational sustainability, and understands that this sustainability is key to the overall success of the Company. The Board reviews and considers aspects of the Company’s corporate citizenship practices as it relates to ESG matters and makes necessary recommendations to management to propel the Company forward in this endeavor.For more information about the Company’s Environmental, Social and Governance (ESG) Matters please visit the Company’s website at https://www.saia.com/about-us/corporate-responsibility.
ELECTION OF DIRECTORS
Election to the Company’s Board of Directors in a contested election is by a plurality of the votes cast at any meeting of stockholders having a quorum. An election will be considered contested if (i) the Secretary of the Company receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder nominees for director set forth in the Company’s Bylaws and (ii) such nomination has not been withdrawn by such stockholder on or before the 10th day before the Company first mails its notice of meeting for such meeting to the stockholders. If directors are to be elected by a plurality of the votes cast, stockholders are not permitted to vote against a nominee.
In an uncontested election, directors are elected by a majority of the votes cast “FOR” and “AGAINST” at any meeting of stockholders having a quorum. If an incumbent director fails to receive a majority of the vote for re-election in an uncontested election, the Nominating and Governance Committee will act on an expedited basis to determine whether to accept the director’s previously tendered irrevocable resignation and will submit such recommendation for prompt consideration by the Board. In considering whether to accept or reject the tendered resignation, the Nominating and Governance Committee and the Board will consider any factors they deem relevant. Any director who fails to receive a majority of the vote for re-election pursuant to this provision of the Corporate Governance Guidelines will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation. The election of directors at the 2020 annual meeting of the Company’s stockholders is an uncontested election.
The Board will nominate for election or re-election as director only candidates who agree to tender irrevocable resignations that will be effective upon (i) the failure to receive the required vote at the next annual meeting at which they will face re-election and (ii) Board acceptance of such resignation. The Board will fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors in accordance with the Corporate Governance Guidelines.
16
CONSIDERATION OF DIRECTOR NOMINEES
Director Qualifications and Selection
The Nominating and Governance Committee is responsible for recommending director candidates to the Board of Directors. The Nominating and Governance Committee will apply the criteria set forth in the Corporate Governance Guidelines when considering whether to recommend any candidate as a director nominee, including candidates recommended by stockholders. The Nominating and Governance Committee seeks nominees with a broad range of experience, professions, skills, geographic representation and backgrounds. The Nominating and Governance Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.
The Board assesses diversity in its broadest sense and considers the backgrounds, experiences and viewpoints of its members and director candidates. When identifying candidates for director, the Board endeavors to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen.
The Corporate Governance Guidelines include director qualification standards that provide as follows:
A majority of the members of the Board of Directors must qualify as independent directors in accordance with the rules of The Nasdaq Global Select Market;
No member of the Board of Directors should serve on the Board of Directors of more than three other public companies;
No person may stand for election as a director of the Company after reaching age 72; and
No director shall serve as a director, officer or employee of a competitor of the Company.
While the selection of qualified directors is a complex, subjective process that requires consideration of many intangible factors, the Corporate Governance Guidelines provide that directors and candidates for director generally should, at a minimum, meet the following criteria:
Directors and candidates should have high personal and professional ethics, integrity, values and character and be committed to representing the best interests of the Company and its stockholders;
Directors and candidates should have experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law and/or administration;
Directors and candidates should have sufficient time to devote to the affairs of the Company and to enhance their knowledge of the Company’s business, operations and industry; and
Directors and candidates should have expertise or a breadth of knowledge about issues affecting the Company that is useful to the Company and complementary to the background and experience of other Board members.
If a vacancy arises or the Board decides to expand its membership, the Nominating and Governance Committee may seek recommendations of potential candidates from a variety of sources (including incumbent directors, stockholders, the Company’s management and professional recruitment firms). The Nominating and Governance Committee evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on the Board. The Nominating and Governance Committee seeks to identify and recruit the best available candidates and it evaluates qualified candidates recommended by stockholders on the same basis as those submitted by other sources.
If the process yields one or more desirable candidates, the Nominating and Governance Committee Chair, or another director designated by the Nominating and Governance Committee Chair, will then contact the candidate(s) to set up interviews with the Nominating and Governance Committee, other non-employee directors and members of senior management, as determined by the Nominating and Governance Committee. Based upon interview results, the candidate’s qualifications and customary background checks, the Nominating and Governance Committee then decides whether it will recommend the candidate’s nomination to the full Board.
17
Procedures for Recommendations and Nominations by Stockholders
Director Qualifications and Selection
The Nominating and Governance Committee is responsible for recommending director candidates to the Board of Directors. The Nominating and Governance Committee will apply the criteria set forth in the Corporate Governance Guidelines when considering whether to recommend any candidate as a director nominee, including candidates recommended by stockholders. The Nominating and Governance Committee seeks nominees with a broad range of experience, professions, skills, geographic representation and backgrounds. The Nominating and
Governance Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.
The Board assesses diversity in its broadest sense and considers the backgrounds, experiences and viewpoints of its members and director candidates. When identifying candidates for director, the Board endeavors to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen.
The Corporate Governance Guidelines include director qualification standards that provide as follows:
A majority of the members of the Board of Directors must qualify as independent directors in accordance with the rules of The NASDAQ Global Select Market;
No member of the Board of Directors should serve on the Board of Directors of more than three other public companies;
No person may stand for election as a director of the Company after reaching age 72; and
No director shall serve as a director, officer or employee of a competitor of the Company.
While the selection of qualified directors is a complex, subjective process that requires consideration of many intangible factors, the Corporate Governance Guidelines provide that directors and candidates for director generally should, at a minimum, meet the following criteria:
Directors and candidates should have high personal and professional ethics, integrity, values and character and be committed to representing the best interests of the Company and its stockholders;
Directors and candidates should have experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law and/or administration;
Directors and candidates should have sufficient time to devote to the affairs of the Company and to enhance their knowledge of the Company’s business, operations and industry; and
Directors and candidates should have expertise or a breadth of knowledge about issues affecting the Company that is useful to the Company and complementary to the background and experience of other Board members.
If a vacancy arises or the Board decides to expand its membership, the Nominating and Governance Committee may seek recommendations of potential candidates from a variety of sources (including incumbent directors, stockholders, the Company’s management and professional recruitment firms). The Nominating and Governance Committee evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on the Board. The Nominating and Governance Committee seeks to identify and recruit the best available candidates and it evaluates qualified candidates recommended by stockholders on the same basis as those submitted by other sources.
If the process yields one or more desirable candidates, the Nominating and Governance Committee Chair, or another director designated by the Nominating and Governance Committee Chair, will then contact the candidate(s) to set up interviews with the Nominating and Governance Committee, other non-employee directors and members of senior management, as determined by the Nominating and Governance Committee. Based upon interview results, the candidate’s qualifications and customary background checks, the Nominating and Governance Committee then decides whether it will recommend the candidate’s nomination to the full Board.
Procedures for Recommendations and Nominations by Stockholders
Stockholder Recommendations
The Nominating and Governance Committee has adopted policies concerning the process for the consideration of director candidates recommended by stockholders. Any stockholder wishing to recommend a
candidate for consideration should send the following information to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097:
The name and address of the recommending stockholder as it appears on the Company’s books;
The number of shares owned beneficially and of record by such stockholder, the length of period held and proof of ownership of such shares;
If the recommending stockholder is not a stockholder of record, a statement from the record holder of the shares (usually a broker or bank) verifying the holdings of the stockholder and a statement from the recommending stockholder of the length of time that the shares have been held (or a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the Securities and Exchange Commission reflecting the holdings of the stockholder, together with a statement of the length of time that the shares have been held); and
A statement whether the recommending stockholder has a good faith intention to continue to hold the reported shares through the date of the Company’s next annual meeting of stockholders.
The recommendation must be accompanied by the information concerning the candidate required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to the Securities Exchange Act of 1934 and rules adopted thereunder, generally providing for the disclosure of:
The name and address of the candidate, any arrangements or understanding regarding nomination, the candidate’s business experience and public company directorships during the past five years and information regarding certain types of legal proceedings within the past ten years involving the candidate and a statement of the particular experience, qualifications, attributes or skills that made the candidate appropriate for service on the Board;
The candidate’s ownership of securities in the Company; and
Transactions between the Company and the candidate valued in excess of $120,000 and certain other types of business relationships with the Company.
The recommendation must describe all relationships between the candidate and the recommending stockholder and any agreements or understandings between the recommending stockholder and the candidate regarding the recommendation. The nominating recommendation shall describe all relationships between the candidate and any of the Company’s competitors, customers, suppliers or other persons with special interests regarding the Company.
The recommending stockholder must furnish a statement supporting its view that the candidate possesses the minimum qualifications prescribed by the Nominating and Governance Committee for director nominees, and briefly describing the contributions that the nominee would be expected to make to the Board and to the governance of the Company. The recommending stockholder must state whether, in the view of the stockholder, the candidate, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of the Company.
The nominating recommendation must be accompanied by the consent of the candidate to be interviewed by the Nominating and Governance Committee, if the Committee chooses to do so in its discretion (and the recommending stockholder must furnish the candidate’s contact information for this purpose), and, if nominated and elected, to serve as a director of the Company.
If a recommendation is submitted by a group of two or more stockholders, the information regarding recommending stockholders must be submitted with respect to each stockholder in the group.
18
The Secretary of Saia will promptly forward such materials to the Nominating and Governance Committee Chair and the Chairman of the Board of Saia. The Secretary will also maintain copies of such materials for future reference by the Committee when filling Board positions.
Stockholder Nominations at Annual Meetings
To nominate a director candidate for election at an annual meeting, a stockholder must deliver timely notice of such nomination to the principal executive offices of the Company in accordance with, and containing the information required by, the Company’s Bylaws. To be timely, the notice must be received at the Company’s principal executive offices no later than the close of business on the 90th calendar day or earlier than the 120th calendar day prior to the first anniversary date of the immediately preceding year’s annual meeting. The process outlined in the Company’s Bylaws is the exclusive means for a stockholder to make director nominations at an annual meeting of stockholders.
The summary above is qualified entirely by reference to the applicable provisions of the Company’s Bylaws, which have been filed with the Securities and Exchange Commission and copies of which are available from the Company upon request. No stockholder nominations or proposals have been made in connection with the 20182020 annual meeting of stockholders.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has adopted procedures for stockholders to send communications to the Board or individual directors of the Company as follows:
Stockholders seeking to communicate with the Board of Directors should submit their written comments to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097. The Secretary of the Company will forward all such communications (excluding routine advertisements and business solicitations and communications which the Secretary of the Company, in his or her sole discretion, deems to be a security risk or for harassment purposes) to each member of the Board of Directors, or if applicable, to the individual director(s) named in the correspondence. Subject to the following, the Chairman of the Board and the Lead Independent Director will receive copies of all stockholder communications, including those addressed to individual directors, unless such communications address allegations of misconduct or mismanagement on the part of the Chairman or Lead Independent Director. In such event, the Secretary of the Company will first consult with and receive the approval of the Lead Independent Director or Chairman, as applicable, before disclosing or otherwise discussing the communication with the director subject to the allegation.
The Company reserves the right to screen materials sent to its directors for potential security risks and/or harassment purposes and the Company also reserves the right to verify ownership status before forwarding stockholder communications to the Board of Directors.
The Secretary of the Company will determine the appropriate timing for forwarding stockholder communications to the directors. The Secretary will consider each communication to determine whether it should be forwarded promptly or compiled and sent with other communications and other Board materials in advance of the next scheduled Board meeting.
Stockholders also have an opportunity to communicate with the Board of Directors at the Company’s annual meeting of stockholders. The Company’s Corporate Governance Guidelines provide that absent unusual circumstances, directors are expected to attend all annual meetings of stockholders. All members of the Board of Directors attended the 20172019 annual meeting of stockholders.
19
Directors and Executive Officers
The following table sets forth the amount of Saia’s common stock beneficially owned by each director and each executive officer named in the Summary Compensation Table on page 3941 and all directors and executive officers as a group, as of January 15, 2018.2020. Unless otherwise indicated, beneficial ownership is direct and the person indicated has sole voting and investment power.
|
| Common Stock Beneficially Owned |
|
|
|
|
|
|
|
|
|
| Common Stock Beneficially Owned |
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Name of Beneficial Owner |
| Shares Beneficially Owned(1) |
|
| Rights to Acquire Beneficial Ownership(2) |
|
| Total |
|
| Percent of Class(3) |
|
| Shares Held Under Deferral Plans(4) |
|
| Shares Beneficially Owned(1) |
|
| Rights to Acquire Beneficial Ownership(2) |
|
| Total |
|
| Percent of Class(3) |
|
| Shares Held Under Deferral Plans(4) |
| ||||||||||
Di-Ann Eisnor |
|
| 956 |
|
| — |
|
|
| 956 |
|
| * |
|
|
| — |
|
|
| 6,055 |
|
| — |
|
|
| 6,055 |
|
| * |
|
|
| — |
| ||||
Donna E. Epps |
|
| 520 |
|
| — |
|
|
| 520 |
|
| * |
|
|
| — |
| ||||||||||||||||||||||
William F. Evans |
|
| 669 |
|
| — |
|
|
| 669 |
|
| * |
|
|
| 11,418 |
|
|
| 669 |
|
| — |
|
|
| 669 |
|
| * |
|
|
| 14,295 |
| ||||
John P. Gainor, Jr. |
|
| 400 |
|
| — |
|
|
| 400 |
|
| * |
|
|
| 7,430 |
|
|
| 400 |
|
| — |
|
|
| 400 |
|
| * |
|
|
| 12,839 |
| ||||
John J. Holland |
|
| 1,028 |
|
| — |
|
|
| 1,028 |
|
| * |
|
|
| 56,765 |
|
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 59,642 |
| ||||
Frederick J. Holzgrefe, III |
|
| 2,178 |
|
|
| 6,190 |
|
|
| 8,368 |
|
| * |
|
|
| 3,967 |
| |||||||||||||||||||||
Randolph W. Melville |
|
| — |
|
| — |
|
| — |
|
| * |
|
|
| 11,866 |
|
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| 17,354 |
| ||||
Richard D. O’Dell |
|
| 194 |
|
|
| 41,950 |
|
|
| 42,144 |
|
| * |
|
|
| 59,362 |
|
|
| 13,049 |
|
|
| 77,350 |
|
|
| 90,399 |
|
| * |
|
|
| 60,103 |
| ||
Björn E. Olsson |
|
| 3,000 |
|
| — |
|
|
| 3,000 |
|
| * |
|
|
| 47,124 |
| ||||||||||||||||||||||
Douglas W. Rockel |
|
| 7,315 |
|
| — |
|
|
| 7,315 |
|
| * |
|
|
| 45,075 |
| ||||||||||||||||||||||
Herbert A. Trucksess, III |
|
| 158,442 |
|
| — |
|
|
| 158,442 |
|
| * |
|
|
| 2,199 |
| ||||||||||||||||||||||
Björn E. Olsson (5) |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 50,001 |
| ||||||||||||||||||||||
Herbert A. Trucksess, III (6) |
|
| 161,319 |
|
| — |
|
|
| 161,319 |
|
| * |
|
|
| 2,199 |
| ||||||||||||||||||||||
Jeffrey C. Ward |
|
| 9,279 |
|
| — |
|
|
| 9,279 |
|
| * |
|
|
| 46,549 |
|
|
| 8,279 |
|
|
| — |
|
|
| 8,279 |
|
| * |
|
|
| 51,802 |
| |||
Frederick J. Holzgrefe, III |
|
| — |
|
|
| 13,110 |
|
|
| 13,110 |
|
| * |
|
|
| 2,436 |
| |||||||||||||||||||||
Susan F. Ward |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 458 |
| ||||||||||||||||||||||
Douglas L. Col |
|
| 2,994 |
|
|
| 1,630 |
|
|
| 4,624 |
|
| * |
|
|
| 2,124 |
| |||||||||||||||||||||
Stephanie R. Maschmeier |
|
| 2,585 |
|
|
| 4,220 |
|
|
| 6,805 |
|
| * |
|
|
| 8,564 |
|
|
| — |
|
|
| 1,630 |
|
|
| 1,630 |
|
| * |
|
|
| 8,564 |
| ||
Paul C. Peck |
|
| — |
|
|
| 1,740 |
|
|
| 1,740 |
|
| * |
|
|
| 18,251 |
| |||||||||||||||||||||
Karla J. Staver |
|
| 1,709 |
|
|
| — |
|
|
| 1,709 |
|
| * |
|
|
| — |
| |||||||||||||||||||||
Raymond R. Ramu |
|
| 4,962 |
|
|
| 4,500 |
|
|
| 9,462 |
|
| * |
|
|
| 8,488 |
|
|
| 3,812 |
|
|
| 3,580 |
|
|
| 7,392 |
|
| * |
|
|
| 8,488 |
| ||
T. Michelle Richard |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| — |
| |||||||||||||||||||||
Craig A. Thompson |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| 372 |
| |||||||||||||||||||||
Mark H. Robinson |
|
| 6,042 |
|
|
| 21,100 |
|
|
| 27,142 |
|
| * |
|
|
| 16,183 |
| |||||||||||||||||||||
Robert S. Chambers (7) |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| — |
| |||||||||||||||||||||
T. Michelle Richard (8) |
|
| 3,561 |
|
|
| 9,360 |
|
|
| 12,921 |
|
| * |
|
|
| — |
| |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (16 persons) |
|
| 194,870 |
|
|
| 84,880 |
|
|
| 279,750 |
|
|
| 1.1 | % |
|
| 323,831 |
| ||||||||||||||||||||
All directors and executive officers as a group (19 persons) |
|
| 204,545 |
|
|
| 101,480 |
|
|
| 306,025 |
|
|
| 1.2 | % |
|
| 310,087 |
|
* | Denotes less than 1% |
(1) | Includes common stock owned directly and indirectly. |
(2) | Number of shares that can be acquired on January 15, |
(3) | Based on the number of shares outstanding on January 15, |
20
the phantom stock units are payable in stock upon the relevant beneficial owner’s termination of service as director or employee. |
(5) | Mr. Olsson will retire from the Board effective April 28, 2020. |
(6) | Mr. Trucksess will retire from the Board effective April 28, 2020. |
(7) | Mr. Chambers ceased serving as an executive officer and left the Company on January 2, 2020. |
(8) | Ms. Richard ceased serving as an executive officer on October 1, 2019 and left the Company in February 2020. |
21
COMPENSATIONCOMPENSATION DISCUSSION AND ANALYSIS
TheThis Compensation Discussion and Analysis describes our executive compensation philosophy and programs, the decisions the Compensation Committee has made under those programs and the factors considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our Named Executive Officers for 2019, who appear in the compensation tables of this proxy statement are:were:
Richard D. O’Dell, President & Chief Executive Officer
Frederick J. Holzgrefe, III, ExecutivePresident & Chief Operating Officer
Robert S. Chambers, Former Vice President & Chief Financial Officer
Raymond R. Ramu, Executive Vice President & Chief Customer Officer
Paul C. Peck, Executive Vice President Operations
Karla J. Staver, Vice President of Safety and Human Resources
T. Michelle Richard, Former Vice President of Human Resources
Craig A. Thompson, ExecutiveAs part of a corporate reorganization, Ms. Staver was promoted to Vice President Operationsof Safety and Human Resources in October 2019 and Ms. Richard’s position was eliminated. Prior to this change Ms. Staver was not an executive officer of Saia.
Mark H. Robinson, Retired Vice President & Chief Information Officer
Executive SummaryCompensation Consultant
The following provides an overviewCompensation Committee has retained Mercer US Inc. as its executive compensation consultant to provide information, analysis and recommendations regarding executive and director compensation. Mercer reports directly to the Compensation Committee and takes direction from the Committee. While it is necessary for Mercer to interact with management to gather information, the Committee has adopted protocols governing if and when the consultant’s advice and recommendations can be shared with management. The Committee regularly meets with the Mercer consultant outside the presence of Saia, Inc.’smanagement to discuss executive compensation philosophy and programs,specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Compensation Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
For 2019, the Company paid Mercer $101,833 for executive and director compensation services rendered to the Compensation Committee. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”). Since 2010, including during 2019, the focusCompany has used Marsh USA, Inc., an affiliate of MMC, to provide insurance brokerage services, based on pay for performance, best practice pay programs and alignmenta determination made by management in consideration of the interestsexpertise of Saia’s executives with those of Saia’s stockholders. Details aboutMarsh USA, Inc. in providing insurance brokerage services for the compensation awarded to Saia’s Named Executive Officers can be foundtransportation industry. The Company paid Marsh USA, Inc. $685,117 in the Summary Compensation Table and related compensation tables.
Saia focuses pay on performance to incent executives to achieve corporate objectives.
The Company’s executive compensation program is designed to link pay with performance by requiringfees in 2019 for such insurance brokerage services (this amount does not include insurance premiums that a significant portion of each executive’s target compensation is at risk and is earned based on achieving corporate financial and operating targets, total stockholder return and stock price appreciation.
Saia aligns executives’ interests with those of the stockholders.
All significant elements of long-term compensation are paid through equity awardsMarsh USA, Inc. to insurance carriers on behalf of Saia).
In connection with the Compensation Committee’s consideration of the independence of Mercer, the Committee confirmed with Mercer that:
The Mercer consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates;
The Mercer consultant is not responsible for selling other Mercer or affiliate services to the Company;
Mercer’s professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering their advice and recommendations;
The Mercer consultant has no business or personal relationships with any members of Saia management or the Board other than providing executive compensation consulting; and
The Mercer consultant and his immediate family members own no shares of Saia’s common stock.
In its evaluation of the relationship with Mercer, the Compensation Committee also reviewed the protocols used by the Committee in its dealings with Mercer which include:
The Committee has sole authority to retain and terminate Mercer at any time;
The Mercer consultant has direct access to the Committee without management intervention;
The Committee has in place a process to formally evaluate the quality and objectivity of the services provided by Mercer each year and determine whether to continue to retain Mercer;
14
• | The Committee has in place rules for the engagement which limit how the individual Mercer consultant may interact with management; and |
The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and ensure that Mercer receives from management the information required to perform its duties in a timely manner.
Following this assessment of the relationship of Mercer and its affiliates with the Company, the Compensation Committee concluded that Mercer’s work for the Committee does not raise any conflict of interest and that Mercer qualified as independent.
Nominating and Governance Committee
The Nominating and Governance Committee held four meetings in 2019. The functions of the Nominating and Governance Committee are described in the formNominating and Governance Committee Charter and include, among others, the following:
review the size and composition of performance shares, stock optionsthe Board and restricted stock. The Company maintains stock ownership guidelinesmake recommendations to the Board as appropriate;
advise and make recommendations to the Board on corporate governance matters;
review criteria for election to the Board and recommend candidates for Board membership. In identifying candidates for the executive officersBoard, the Committee is to further alignsearch for highly qualified women and individuals from minority groups to include in the interestspool from which directors are chosen;
review the structure and composition of our executive officers with our stockholders.Board committees and make recommendations to the Board as appropriate;
Saiadevelop and oversee an annual self-evaluation process for the Board and its committees;
review the Company’s major enterprise risk assessment and management processes for matters other than financial reporting risk matters;
provide oversight of corporate ethics issues and at least annually benchmarks its executive compensation programs.assess the adequacy of the Company’s Code of Business Conduct and Ethics; and
provide oversight on management succession issues.
Each member of the Nominating and Governance Committee meets the definition of an independent director under applicable Nasdaq rules.
Risk Oversight
The Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of Company objectives, improve long-term Company performance and create stockholder value. A fundamental part of risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the full Board of Directors in setting the Company’s business strategy and objectives is integral to the Board’s assessment of the Company’s risk and in determining what constitutes an appropriate level of risk for the Company. The full Board of Directors conducts an annual risk assessment of the Company’s financial risk, legal/compliance risk and operational/strategic risk. The Board typically reviews at least one risk element in detail at each regular Board meeting and addresses individual risk issues throughout the year as necessary.
While the Board of Directors has the ultimate oversight responsibility for the risk management process, the Board delegates responsibility for certain aspects of risk management to its committees. In particular, the Audit Committee focuses on key business and financial risks and related controls and processes. Per its Charter, the Audit Committee discusses with management the Company’s major financial reporting exposures concerning risk assessment and management and the steps management has taken to monitor and control such exposures. The Company’s Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy and objectives and helps ensure that the Company’s compensation
15
policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee designsstructures the Company’s executive compensation program to attract, motivate, rewardreduce the possibility that Saia’s executive officers, either individually or as a group, make excessively risky business decisions that could maximize short-term results at the expense of long-term value.
Finally, the Company’s Nominating and facilitateGovernance Committee is responsible for overseeing the retention of executive talent to achieve corporate objectives.Company’s major non-financial reporting enterprise risk assessment and management processes. The program is comprised of base salary, cash-based annual incentive awards, equity-based long-term incentive awards, customary benefits and perquisites and severance benefits. ElementsChair of the program are generally targeted to provide compensation opportunity aroundNominating and Governance Committee discusses with both the 50th percentileAudit Committee and the Compensation Committee the processes used in the oversight of the peer group, but cannon-financial reporting enterprise risk assessment and management processes.
The Board believes its leadership structure enhances overall risk oversight. While the Board requires risk assessments from management, the combination of Board member experience, continuing education and independence of governance processes provide an effective basis for testing, overseeing and supplementing management assessments of risk.
Environmental, Social and Governance (ESG) Matters
The Company’s Board and management are responsible for overseeing the Company’s environmental, social and organizational sustainability, and understands that this sustainability is key to the overall success of the Company. The Board reviews and considers aspects of the Company’s corporate citizenship practices as it relates to ESG matters and makes necessary recommendations to management to propel the Company forward in this endeavor.For more information about the Company’s Environmental, Social and Governance (ESG) Matters please visit the Company’s website at https://www.saia.com/about-us/corporate-responsibility.
ELECTION OF DIRECTORS
Election to the Company’s Board of Directors in a contested election is by a plurality of the votes cast at any meeting of stockholders having a quorum. An election will be higherconsidered contested if (i) the Secretary of the Company receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder nominees for director set forth in the Company’s Bylaws and (ii) such nomination has not been withdrawn by such stockholder on or lower basedbefore the 10th day before the Company first mails its notice of meeting for such meeting to the stockholders. If directors are to be elected by a plurality of the votes cast, stockholders are not permitted to vote against a nominee.
In an uncontested election, directors are elected by a majority of the votes cast “FOR” and “AGAINST” at any meeting of stockholders having a quorum. If an incumbent director fails to receive a majority of the vote for re-election in an uncontested election, the Nominating and Governance Committee will act on individual performance, tenurean expedited basis to determine whether to accept the director’s previously tendered irrevocable resignation and will submit such recommendation for executive retentionprompt consideration by the Board. In considering whether to accept or reject the tendered resignation, the Nominating and succession planning purposes.Governance Committee and the Board will consider any factors they deem relevant. Any director who fails to receive a majority of the vote for re-election pursuant to this provision of the Corporate Governance Guidelines will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation. The Committee workselection of directors at the 2020 annual meeting of the Company’s stockholders is an uncontested election.
The Board will nominate for election or re-election as director only candidates who agree to tender irrevocable resignations that will be effective upon (i) the failure to receive the required vote at the next annual meeting at which they will face re-election and (ii) Board acceptance of such resignation. The Board will fill director vacancies and new directorships only with Mercer US, Inc., its executive compensation consultant, each yearcandidates who agree to benchmark our program against our transportation industry peers and general industry.
2017 Say-on-Pay results affirmedtender, promptly following their appointment to the current compensation policies.
InBoard, the same form of resignation tendered by other directors in accordance with the recommendationsCorporate Governance Guidelines.
16
CONSIDERATION OF DIRECTOR NOMINEES
Director Qualifications and Selection
The Nominating and Governance Committee is responsible for recommending director candidates to the Board of our stockholders in 2011Directors. The Nominating and 2017, Saia holds a stockholder advisory “say-on-pay” vote on an annual basis. In 2017, holders of 96.5% of Saia’s stock voting onGovernance Committee will apply the matter approved, on an advisory basis, the compensation paid to Saia’s Named Executive Officers as describedcriteria set forth in the 2017 proxy statement.Corporate Governance Guidelines when considering whether to recommend any candidate as a director nominee, including candidates recommended by stockholders. The CompensationNominating and Governance Committee seeks nominees with a broad range of experience, professions, skills, geographic representation and backgrounds. The Nominating and Governance Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.
The Board assesses diversity in its broadest sense and considers the backgrounds, experiences and viewpoints of its members and director candidates. When identifying candidates for director, the Board endeavors to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen.
The Corporate Governance Guidelines include director qualification standards that provide as follows:
A majority of the members of the Board of Directors must qualify as independent directors in accordance with the rules of The Nasdaq Global Select Market;
No member of the Board of Directors should serve on the Board of Directors of more than three other public companies;
No person may stand for election as a director of the Company after reaching age 72; and
No director shall serve as a director, officer or employee of a competitor of the Company.
While the selection of qualified directors is a complex, subjective process that requires consideration of many intangible factors, the Corporate Governance Guidelines provide that directors and candidates for director generally should, at a minimum, meet the following criteria:
Directors and candidates should have high personal and professional ethics, integrity, values and character and be committed to representing the best interests of the Company and its stockholders;
Directors and candidates should have experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law and/or administration;
Directors and candidates should have sufficient time to devote to the affairs of the Company and to enhance their knowledge of the Company’s business, operations and industry; and
Directors and candidates should have expertise or a breadth of knowledge about issues affecting the Company that is useful to the Company and complementary to the background and experience of other Board members.
If a vacancy arises or the Board decides to expand its membership, the Nominating and Governance Committee may seek recommendations of potential candidates from a variety of sources (including incumbent directors, stockholders, the Company’s management and professional recruitment firms). The Nominating and Governance Committee evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on the Board. The Nominating and Governance Committee seeks to identify and recruit the best available candidates and it evaluates qualified candidates recommended by stockholders on the same basis as those submitted by other sources.
If the process yields one or more desirable candidates, the Nominating and Governance Committee Chair, or another director designated by the Nominating and Governance Committee Chair, will then contact the candidate(s) to set up interviews with the Nominating and Governance Committee, other non-employee directors and members of senior management, as determined by the Nominating and Governance Committee. Based upon interview results, the candidate’s qualifications and customary background checks, the Nominating and Governance Committee then decides whether it will recommend the candidate’s nomination to the full Board.
17
Procedures for Recommendations and Nominations by Stockholders
Stockholder Recommendations
The Nominating and Governance Committee has adopted policies concerning the process for the consideration of director candidates recommended by stockholders. Any stockholder wishing to recommend a candidate for consideration should send the following information to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097:
The name and address of the recommending stockholder as it appears on the Company’s books;
The number of shares owned beneficially and of record by such stockholder, the length of period held and proof of ownership of such shares;
If the recommending stockholder is not a stockholder of record, a statement from the record holder of the shares (usually a broker or bank) verifying the holdings of the stockholder and a statement from the recommending stockholder of the length of time that the shares have been held (or a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the Securities and Exchange Commission reflecting the holdings of the stockholder, together with a statement of the length of time that the shares have been held); and
A statement whether the recommending stockholder has a good faith intention to continue to hold the reported shares through the date of the Company’s next annual meeting of stockholders.
The recommendation must be accompanied by the information concerning the candidate required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to the Securities Exchange Act of 1934 and rules adopted thereunder, generally providing for the disclosure of:
The name and address of the candidate, any arrangements or understanding regarding nomination, the candidate’s business experience and public company directorships during the past five years and information regarding certain types of legal proceedings within the past ten years involving the candidate and a statement of the particular experience, qualifications, attributes or skills that made the candidate appropriate for service on the Board;
The candidate’s ownership of securities in the Company; and
Transactions between the Company and the candidate valued in excess of $120,000 and certain other types of business relationships with the Company.
The recommendation must describe all relationships between the candidate and the recommending stockholder and any agreements or understandings between the recommending stockholder and the candidate regarding the recommendation. The nominating recommendation shall describe all relationships between the candidate and any of the Company’s competitors, customers, suppliers or other persons with special interests regarding the Company.
The recommending stockholder must furnish a statement supporting its view that the candidate possesses the minimum qualifications prescribed by the Nominating and Governance Committee for director nominees, and briefly describing the contributions that the nominee would be expected to make to the Board and to the governance of the Company. The recommending stockholder must state whether, in the view of the stockholder, the candidate, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of the Company.
The nominating recommendation must be accompanied by the consent of the candidate to be interviewed by the Nominating and Governance Committee, if the Committee chooses to do so in its discretion (and the recommending stockholder must furnish the candidate’s contact information for this levelpurpose), and, if nominated and elected, to serve as a director of the Company.
If a recommendation is submitted by a group of two or more stockholders, the information regarding recommending stockholders must be submitted with respect to each stockholder in the group.
18
The Secretary of Saia will promptly forward such materials to the Nominating and Governance Committee Chair and the Chairman of the Board of Saia. The Secretary will also maintain copies of such materials for future reference by the Committee when filling Board positions.
Stockholder Nominations at Annual Meetings
To nominate a director candidate for election at an annual meeting, a stockholder must deliver timely notice of such nomination to the principal executive offices of the Company in accordance with, and containing the information required by, the Company’s Bylaws. To be timely, the notice must be received at the Company’s principal executive offices no later than the close of business on the 90th calendar day or earlier than the 120th calendar day prior to the first anniversary date of the immediately preceding year’s annual meeting. The process outlined in the Company’s Bylaws is the exclusive means for a stockholder to make director nominations at an annual meeting of stockholders.
The summary above is qualified entirely by reference to the applicable provisions of the Company’s Bylaws, which have been filed with the Securities and Exchange Commission and copies of which are available from the Company upon request. No stockholder nominations or proposals have been made in connection with the 2020 annual meeting of stockholders.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has adopted procedures for stockholders to send communications to the Board or individual directors of the Company as follows:
Stockholders seeking to communicate with the Board of Directors should submit their written comments to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097. The Secretary of the Company will forward all such communications (excluding routine advertisements and business solicitations and communications which the Secretary of the Company, in his or her sole discretion, deems to be a security risk or for harassment purposes) to each member of the Board of Directors, or if applicable, to the individual director(s) named in the correspondence. Subject to the following, the Chairman of the Board and the Lead Independent Director will receive copies of all stockholder communications, including those addressed to individual directors, unless such communications address allegations of misconduct or mismanagement on the part of the Chairman or Lead Independent Director. In such event, the Secretary of the Company will first consult with and receive the approval of our executive compensation program is indicative of our stockholders’ strong support of our compensation philosophy and goalsthe Lead Independent Director or Chairman, as applicable, before disclosing or otherwise discussing the communication with the director subject to the allegation.
The Company reserves the right to screen materials sent to its directors for potential security risks and/or harassment purposes and the decisions made byCompany also reserves the Committee. Based on these favorable results,right to verify ownership status before forwarding stockholder communications to the Committee reaffirmedBoard of Directors.
The Secretary of the Company will determine the appropriate timing for forwarding stockholder communications to the directors. The Secretary will consider each communication to determine whether it should be forwarded promptly or compiled and sent with other communications and other Board materials in advance of the next scheduled Board meeting.
Stockholders also have an opportunity to communicate with the Board of Directors at the Company’s executive compensation philosophy and programs.annual meeting of stockholders. The Company’s Corporate Governance Guidelines provide that absent unusual circumstances, directors are expected to attend all annual meetings of stockholders. All members of the Board of Directors attended the 2019 annual meeting of stockholders.
19
Directors and Executive Officers
The following table sets forth the amount of Saia’s Executivecommon stock beneficially owned by each director and each executive officer named in the Summary Compensation ProgramTable on page 41 and all directors and executive officers as a group, as of January 15, 2020. Unless otherwise indicated, beneficial ownership is direct and the person indicated has sole voting and investment power.
|
| Common Stock Beneficially Owned |
|
|
|
|
|
|
|
|
| |||||||||
Name of Beneficial Owner |
| Shares Beneficially Owned(1) |
|
| Rights to Acquire Beneficial Ownership(2) |
|
| Total |
|
| Percent of Class(3) |
|
| Shares Held Under Deferral Plans(4) |
| |||||
Di-Ann Eisnor |
|
| 6,055 |
|
| — |
|
|
| 6,055 |
|
| * |
|
|
| — |
| ||
Donna E. Epps |
|
| 520 |
|
| — |
|
|
| 520 |
|
| * |
|
|
| — |
| ||
William F. Evans |
|
| 669 |
|
| — |
|
|
| 669 |
|
| * |
|
|
| 14,295 |
| ||
John P. Gainor, Jr. |
|
| 400 |
|
| — |
|
|
| 400 |
|
| * |
|
|
| 12,839 |
| ||
John J. Holland |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 59,642 |
| ||
Frederick J. Holzgrefe, III |
|
| 2,178 |
|
|
| 6,190 |
|
|
| 8,368 |
|
| * |
|
|
| 3,967 |
| |
Randolph W. Melville |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| 17,354 |
| |
Richard D. O’Dell |
|
| 13,049 |
|
|
| 77,350 |
|
|
| 90,399 |
|
| * |
|
|
| 60,103 |
| |
Björn E. Olsson (5) |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 50,001 |
| ||
Herbert A. Trucksess, III (6) |
|
| 161,319 |
|
| — |
|
|
| 161,319 |
|
| * |
|
|
| 2,199 |
| ||
Jeffrey C. Ward |
|
| 8,279 |
|
|
| — |
|
|
| 8,279 |
|
| * |
|
|
| 51,802 |
| |
Susan F. Ward |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 458 |
| ||
Douglas L. Col |
|
| 2,994 |
|
|
| 1,630 |
|
|
| 4,624 |
|
| * |
|
|
| 2,124 |
| |
Stephanie R. Maschmeier |
|
| — |
|
|
| 1,630 |
|
|
| 1,630 |
|
| * |
|
|
| 8,564 |
| |
Paul C. Peck |
|
| — |
|
|
| 1,740 |
|
|
| 1,740 |
|
| * |
|
|
| 18,251 |
| |
Karla J. Staver |
|
| 1,709 |
|
|
| — |
|
|
| 1,709 |
|
| * |
|
|
| — |
| |
Raymond R. Ramu |
|
| 3,812 |
|
|
| 3,580 |
|
|
| 7,392 |
|
| * |
|
|
| 8,488 |
| |
Robert S. Chambers (7) |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| — |
| |
T. Michelle Richard (8) |
|
| 3,561 |
|
|
| 9,360 |
|
|
| 12,921 |
|
| * |
|
|
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (19 persons) |
|
| 204,545 |
|
|
| 101,480 |
|
|
| 306,025 |
|
|
| 1.2 | % |
|
| 310,087 |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Financialand Operating Performance
The following tables highlight Saia’s financial performance for fiscal years 2015-2017:
|
|
(1) | Includes common stock owned directly and indirectly. |
(2) |
|
(3) | Based on the number of shares outstanding on January 15, 2020 (25,936,532) and includes the number of shares subject to acquisition by the relevant beneficial owner within 60 days thereafter. Including the number of shares subject to acquisition by the relevant beneficial owner pursuant to the Company’s Directors’ Deferred Fee Plan or Executive Capital Accumulation Plan upon such beneficial owner’s termination of services as a director or employee, the Percent of Class for all directors and executive officers as a group equals 2.37%. |
20
the phantom stock units are payable in stock upon the relevant beneficial owner’s termination of service as director or employee. |
(5) | Mr. Olsson will retire from the Board effective April 28, 2020. |
(6) | Mr. Trucksess will retire from the Board effective April 28, 2020. |
(7) | Mr. Chambers ceased serving as an executive officer and left the Company on January 2, 2020. |
(8) | Ms. Richard ceased serving as an executive officer on October 1, 2019 and left the Company in February 2020. |
21
ExecutiveCOMPENSATION DISCUSSION AND ANALYSIS
This Compensation Oversight
Compensation Committee
Saia’sDiscussion and Analysis describes our executive compensation program is administered byphilosophy and programs, the decisions the Compensation Committee which ishas made up entirely of independent directors. Theunder those programs and the factors considered in making those decisions. This Compensation Committee, with the assistance of Mercer US, Inc., as independent compensation consultant, annually reviews the Company’s compensation philosophy, the overall design ofDiscussion and Analysis focuses on the compensation program and the design elements of each component of compensation. In making decisions about compensation for theour Named Executive Officers as described in the compensation tables in this proxy statement, the Compensation Committee takes the following factors into consideration, among others, although none of these factors is determinative individually:for 2019, who were:
The competitive environment for recruiting and retaining senior executives, including compensation trends, best practices, and executive compensation paid by our industry peers;Richard D. O’Dell, Chief Executive Officer
The individual’s performance, experience and future advancement potential;Frederick J. Holzgrefe, III, President & Chief Operating Officer
The Company’s financial and operating performance in the last 12 to 24 months, as well as the strategic plan for future periods;Robert S. Chambers, Former Vice President & Chief Financial Officer
The current economic conditions and the competitive market environment in which the Company operates;Raymond R. Ramu, Executive Vice President & Chief Customer Officer
The Company’s stock ownership and retention policies;Paul C. Peck, Executive Vice President Operations
Each Named Executive Officer’s historical total compensation, including the valueKarla J. Staver, Vice President of all outstanding equity awards granted to the Named Executive Officer,Safety and future compensation opportunities based on tally sheets; andHuman Resources
Internal pay equity.T. Michelle Richard, Former Vice President of Human Resources
The Compensation Committee reviewsAs part of a corporate reorganization, Ms. Staver was promoted to Vice President of Safety and approves all elementsHuman Resources in October 2019 and Ms. Richard’s position was eliminated. Prior to this change Ms. Staver was not an executive officer of our executive compensation program, other than Mr. O’Dell’s base salary, which is approved by the Board, based on a formal assessment of his performance conducted by the Board and based on the recommendation of the Compensation Committee. Mr. O’Dell makes recommendations to the Compensation Committee as to elements of compensation for his direct reports and provides performance reviews to assist the Compensation Committee in setting executive compensation.Saia.
Compensation Consultant
The Compensation Committee has retained Mercer US Inc. as its executive compensation consultant to provide information, analysis and recommendations regarding executive and director compensation. Mercer reports directly to the Compensation Committee and takes direction from the Committee. While it is necessary for Mercer to interact with management to gather information, the Committee has adopted protocols governing if and when the consultant’s advice and recommendations can be shared with management. The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Compensation Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
For 2019, the Company paid Mercer $101,833 for executive and director compensation services rendered to the Compensation Committee. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”). Since 2010, including during 2019, the Company has used Marsh USA, Inc., an affiliate of MMC, to provide insurance brokerage services, based on a determination made by management in consideration of the expertise of Marsh USA, Inc. in providing insurance brokerage services for the transportation industry. The Company paid Marsh USA, Inc. $685,117 in fees in 2019 for such insurance brokerage services (this amount does not include insurance premiums that are paid through Marsh USA, Inc. to insurance carriers on behalf of Saia).
In connection with the Compensation Committee’s consideration of the independence of Mercer, the Committee confirmed with Mercer that:
The Mercer consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates;
The Mercer consultant is not responsible for selling other Mercer or affiliate services to the Company;
Mercer’s professional standards prohibit the individual consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering their advice and recommendations;
The Mercer consultant has no business or personal relationships with any members of Saia management or the Board other than providing executive compensation consulting; and
The Mercer consultant and his immediate family members own no shares of Saia’s common stock.
In its evaluation of the relationship with Mercer, the Compensation Committee also reviewed the protocols used by the Committee in its dealings with Mercer which include:
The Committee has sole authority to retain and terminate Mercer at any time;
The Mercer consultant has direct access to the Committee without management intervention;
The Committee has in place a process to formally evaluate the quality and objectivity of the services provided by Mercer each year and determine whether to continue to retain Mercer;
14
• | The Committee has in place rules for the engagement which limit how the individual Mercer consultant may interact with management; and |
The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and ensure that Mercer receives from management the information required to perform its duties in a timely manner.
Following this assessment of the relationship of Mercer and its affiliates with the Company, the Compensation Committee concluded that Mercer’s work for the Committee does not raise any conflict of interest and that Mercer qualified as independent.
Nominating and Governance Committee
The Nominating and Governance Committee held four meetings in 2019. The functions of the Nominating and Governance Committee are described in the Nominating and Governance Committee Charter and include, among others, the following:
review the size and composition of the Board and make recommendations to the Board as appropriate;
advise and make recommendations to the Board on corporate governance matters;
review criteria for election to the Board and recommend candidates for Board membership. In identifying candidates for the Board, the Committee is to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen;
review the structure and composition of Board committees and make recommendations to the Board as appropriate;
develop and oversee an annual self-evaluation process for the Board and its committees;
review the Company’s major enterprise risk assessment and management processes for matters other than financial reporting risk matters;
provide oversight of corporate ethics issues and at least annually assess the adequacy of the Company’s Code of Business Conduct and Ethics; and
provide oversight on management succession issues.
Each member of the Nominating and Governance Committee meets the definition of an independent director under applicable Nasdaq rules.
Risk Oversight
The Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of Company objectives, improve long-term Company performance and create stockholder value. A fundamental part of risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the full Board of Directors in setting the Company’s business strategy and objectives is integral to the Board’s assessment of the Company’s risk and in determining what constitutes an appropriate level of risk for the Company. The full Board of Directors conducts an annual risk assessment of the Company’s financial risk, legal/compliance risk and operational/strategic risk. The Board typically reviews at least one risk element in detail at each regular Board meeting and addresses individual risk issues throughout the year as necessary.
While the Board of Directors has the ultimate oversight responsibility for the risk management process, the Board delegates responsibility for certain aspects of risk management to its committees. In particular, the Audit Committee focuses on key business and financial risks and related controls and processes. Per its Charter, the Audit Committee discusses with management the Company’s major financial reporting exposures concerning risk assessment and management and the steps management has taken to monitor and control such exposures. The Company’s Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy and objectives and helps ensure that the Company’s compensation
15
policies and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee structures the Company’s executive compensation program to reduce the possibility that Saia’s executive officers, either individually or as a group, make excessively risky business decisions that could maximize short-term results at the expense of long-term value.
Finally, the Company’s Nominating and Governance Committee is responsible for overseeing the Company’s major non-financial reporting enterprise risk assessment and management processes. The Chair of the Nominating and Governance Committee discusses with both the Audit Committee and the Compensation Committee the processes used in the oversight of the non-financial reporting enterprise risk assessment and management processes.
The Board believes its leadership structure enhances overall risk oversight. While the Board requires risk assessments from management, the combination of Board member experience, continuing education and independence of governance processes provide an effective basis for testing, overseeing and supplementing management assessments of risk.
Environmental, Social and Governance (ESG) Matters
The Company’s Board and management are responsible for overseeing the Company’s environmental, social and organizational sustainability, and understands that this sustainability is key to the overall success of the Company. The Board reviews and considers aspects of the Company’s corporate citizenship practices as it relates to ESG matters and makes necessary recommendations to management to propel the Company forward in this endeavor.For more information about the Company’s Environmental, Social and Governance (ESG) Matters please visit the Company’s website at https://www.saia.com/about-us/corporate-responsibility.
ELECTION OF DIRECTORS
Election to the Company’s Board of Directors in a contested election is by a plurality of the votes cast at any meeting of stockholders having a quorum. An election will be considered contested if (i) the Secretary of the Company receives a notice that a stockholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder nominees for director set forth in the Company’s Bylaws and (ii) such nomination has not been withdrawn by such stockholder on or before the 10th day before the Company first mails its notice of meeting for such meeting to the stockholders. If directors are to be elected by a plurality of the votes cast, stockholders are not permitted to vote against a nominee.
In an uncontested election, directors are elected by a majority of the votes cast “FOR” and “AGAINST” at any meeting of stockholders having a quorum. If an incumbent director fails to receive a majority of the vote for re-election in an uncontested election, the Nominating and Governance Committee will act on an expedited basis to determine whether to accept the director’s previously tendered irrevocable resignation and will submit such recommendation for prompt consideration by the Board. In considering whether to accept or reject the tendered resignation, the Nominating and Governance Committee and the Board will consider any factors they deem relevant. Any director who fails to receive a majority of the vote for re-election pursuant to this provision of the Corporate Governance Guidelines will not participate in the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation. The election of directors at the 2020 annual meeting of the Company’s stockholders is an uncontested election.
The Board will nominate for election or re-election as director only candidates who agree to tender irrevocable resignations that will be effective upon (i) the failure to receive the required vote at the next annual meeting at which they will face re-election and (ii) Board acceptance of such resignation. The Board will fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors in accordance with the Corporate Governance Guidelines.
16
CONSIDERATION OF DIRECTOR NOMINEES
Director Qualifications and Selection
The Nominating and Governance Committee is responsible for recommending director candidates to the Board of Directors. The Nominating and Governance Committee will apply the criteria set forth in the Corporate Governance Guidelines when considering whether to recommend any candidate as a director nominee, including candidates recommended by stockholders. The Nominating and Governance Committee seeks nominees with a broad range of experience, professions, skills, geographic representation and backgrounds. The Nominating and Governance Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities.
The Board assesses diversity in its broadest sense and considers the backgrounds, experiences and viewpoints of its members and director candidates. When identifying candidates for director, the Board endeavors to search for highly qualified women and individuals from minority groups to include in the pool from which directors are chosen.
The Corporate Governance Guidelines include director qualification standards that provide as follows:
A majority of the members of the Board of Directors must qualify as independent directors in accordance with the rules of The Nasdaq Global Select Market;
No member of the Board of Directors should serve on the Board of Directors of more than three other public companies;
No person may stand for election as a director of the Company after reaching age 72; and
No director shall serve as a director, officer or employee of a competitor of the Company.
While the selection of qualified directors is a complex, subjective process that requires consideration of many intangible factors, the Corporate Governance Guidelines provide that directors and candidates for director generally should, at a minimum, meet the following criteria:
Directors and candidates should have high personal and professional ethics, integrity, values and character and be committed to representing the best interests of the Company and its stockholders;
Directors and candidates should have experience and a successful track record at senior policy-making levels in business, government, technology, accounting, law and/or administration;
Directors and candidates should have sufficient time to devote to the affairs of the Company and to enhance their knowledge of the Company’s business, operations and industry; and
Directors and candidates should have expertise or a breadth of knowledge about issues affecting the Company that is useful to the Company and complementary to the background and experience of other Board members.
If a vacancy arises or the Board decides to expand its membership, the Nominating and Governance Committee may seek recommendations of potential candidates from a variety of sources (including incumbent directors, stockholders, the Company’s management and professional recruitment firms). The Nominating and Governance Committee evaluates each potential candidate’s educational background, employment history, outside commitments and other relevant factors to determine whether he or she is potentially qualified to serve on the Board. The Nominating and Governance Committee seeks to identify and recruit the best available candidates and it evaluates qualified candidates recommended by stockholders on the same basis as those submitted by other sources.
If the process yields one or more desirable candidates, the Nominating and Governance Committee Chair, or another director designated by the Nominating and Governance Committee Chair, will then contact the candidate(s) to set up interviews with the Nominating and Governance Committee, other non-employee directors and members of senior management, as determined by the Nominating and Governance Committee. Based upon interview results, the candidate’s qualifications and customary background checks, the Nominating and Governance Committee then decides whether it will recommend the candidate’s nomination to the full Board.
17
Procedures for Recommendations and Nominations by Stockholders
Stockholder Recommendations
The Nominating and Governance Committee has adopted policies concerning the process for the consideration of director candidates recommended by stockholders. Any stockholder wishing to recommend a candidate for consideration should send the following information to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097:
The name and address of the recommending stockholder as it appears on the Company’s books;
The number of shares owned beneficially and of record by such stockholder, the length of period held and proof of ownership of such shares;
If the recommending stockholder is not a stockholder of record, a statement from the record holder of the shares (usually a broker or bank) verifying the holdings of the stockholder and a statement from the recommending stockholder of the length of time that the shares have been held (or a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the Securities and Exchange Commission reflecting the holdings of the stockholder, together with a statement of the length of time that the shares have been held); and
A statement whether the recommending stockholder has a good faith intention to continue to hold the reported shares through the date of the Company’s next annual meeting of stockholders.
The recommendation must be accompanied by the information concerning the candidate required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to the Securities Exchange Act of 1934 and rules adopted thereunder, generally providing for the disclosure of:
The name and address of the candidate, any arrangements or understanding regarding nomination, the candidate’s business experience and public company directorships during the past five years and information regarding certain types of legal proceedings within the past ten years involving the candidate and a statement of the particular experience, qualifications, attributes or skills that made the candidate appropriate for service on the Board;
The candidate’s ownership of securities in the Company; and
Transactions between the Company and the candidate valued in excess of $120,000 and certain other types of business relationships with the Company.
The recommendation must describe all relationships between the candidate and the recommending stockholder and any agreements or understandings between the recommending stockholder and the candidate regarding the recommendation. The nominating recommendation shall describe all relationships between the candidate and any of the Company’s competitors, customers, suppliers or other persons with special interests regarding the Company.
The recommending stockholder must furnish a statement supporting its view that the candidate possesses the minimum qualifications prescribed by the Nominating and Governance Committee for director nominees, and briefly describing the contributions that the nominee would be expected to make to the Board and to the governance of the Company. The recommending stockholder must state whether, in the view of the stockholder, the candidate, if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of the Company.
The nominating recommendation must be accompanied by the consent of the candidate to be interviewed by the Nominating and Governance Committee, if the Committee chooses to do so in its discretion (and the recommending stockholder must furnish the candidate’s contact information for this purpose), and, if nominated and elected, to serve as a director of the Company.
If a recommendation is submitted by a group of two or more stockholders, the information regarding recommending stockholders must be submitted with respect to each stockholder in the group.
18
The Secretary of Saia will promptly forward such materials to the Nominating and Governance Committee Chair and the Chairman of the Board of Saia. The Secretary will also maintain copies of such materials for future reference by the Committee when filling Board positions.
Stockholder Nominations at Annual Meetings
To nominate a director candidate for election at an annual meeting, a stockholder must deliver timely notice of such nomination to the principal executive offices of the Company in accordance with, and containing the information required by, the Company’s Bylaws. To be timely, the notice must be received at the Company’s principal executive offices no later than the close of business on the 90th calendar day or earlier than the 120th calendar day prior to the first anniversary date of the immediately preceding year’s annual meeting. The process outlined in the Company’s Bylaws is the exclusive means for a stockholder to make director nominations at an annual meeting of stockholders.
The summary above is qualified entirely by reference to the applicable provisions of the Company’s Bylaws, which have been filed with the Securities and Exchange Commission and copies of which are available from the Company upon request. No stockholder nominations or proposals have been made in connection with the 2020 annual meeting of stockholders.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has adopted procedures for stockholders to send communications to the Board or individual directors of the Company as follows:
Stockholders seeking to communicate with the Board of Directors should submit their written comments to the Secretary of the Company, Saia, Inc., 11465 Johns Creek Parkway, Suite 400, Johns Creek, Georgia 30097. The Secretary of the Company will forward all such communications (excluding routine advertisements and business solicitations and communications which the Secretary of the Company, in his or her sole discretion, deems to be a security risk or for harassment purposes) to each member of the Board of Directors, or if applicable, to the individual director(s) named in the correspondence. Subject to the following, the Chairman of the Board and the Lead Independent Director will receive copies of all stockholder communications, including those addressed to individual directors, unless such communications address allegations of misconduct or mismanagement on the part of the Chairman or Lead Independent Director. In such event, the Secretary of the Company will first consult with and receive the approval of the Lead Independent Director or Chairman, as applicable, before disclosing or otherwise discussing the communication with the director subject to the allegation.
The Company reserves the right to screen materials sent to its directors for potential security risks and/or harassment purposes and the Company also reserves the right to verify ownership status before forwarding stockholder communications to the Board of Directors.
The Secretary of the Company will determine the appropriate timing for forwarding stockholder communications to the directors. The Secretary will consider each communication to determine whether it should be forwarded promptly or compiled and sent with other communications and other Board materials in advance of the next scheduled Board meeting.
Stockholders also have an opportunity to communicate with the Board of Directors at the Company’s annual meeting of stockholders. The Company’s Corporate Governance Guidelines provide that absent unusual circumstances, directors are expected to attend all annual meetings of stockholders. All members of the Board of Directors attended the 2019 annual meeting of stockholders.
19
Directors and Executive Officers
The following table sets forth the amount of Saia’s common stock beneficially owned by each director and each executive officer named in the Summary Compensation Table on page 41 and all directors and executive officers as a group, as of January 15, 2020. Unless otherwise indicated, beneficial ownership is direct and the person indicated has sole voting and investment power.
|
| Common Stock Beneficially Owned |
|
|
|
|
|
|
|
|
| |||||||||
Name of Beneficial Owner |
| Shares Beneficially Owned(1) |
|
| Rights to Acquire Beneficial Ownership(2) |
|
| Total |
|
| Percent of Class(3) |
|
| Shares Held Under Deferral Plans(4) |
| |||||
Di-Ann Eisnor |
|
| 6,055 |
|
| — |
|
|
| 6,055 |
|
| * |
|
|
| — |
| ||
Donna E. Epps |
|
| 520 |
|
| — |
|
|
| 520 |
|
| * |
|
|
| — |
| ||
William F. Evans |
|
| 669 |
|
| — |
|
|
| 669 |
|
| * |
|
|
| 14,295 |
| ||
John P. Gainor, Jr. |
|
| 400 |
|
| — |
|
|
| 400 |
|
| * |
|
|
| 12,839 |
| ||
John J. Holland |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 59,642 |
| ||
Frederick J. Holzgrefe, III |
|
| 2,178 |
|
|
| 6,190 |
|
|
| 8,368 |
|
| * |
|
|
| 3,967 |
| |
Randolph W. Melville |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| 17,354 |
| |
Richard D. O’Dell |
|
| 13,049 |
|
|
| 77,350 |
|
|
| 90,399 |
|
| * |
|
|
| 60,103 |
| |
Björn E. Olsson (5) |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 50,001 |
| ||
Herbert A. Trucksess, III (6) |
|
| 161,319 |
|
| — |
|
|
| 161,319 |
|
| * |
|
|
| 2,199 |
| ||
Jeffrey C. Ward |
|
| 8,279 |
|
|
| — |
|
|
| 8,279 |
|
| * |
|
|
| 51,802 |
| |
Susan F. Ward |
|
| — |
|
| — |
|
|
| — |
|
| * |
|
|
| 458 |
| ||
Douglas L. Col |
|
| 2,994 |
|
|
| 1,630 |
|
|
| 4,624 |
|
| * |
|
|
| 2,124 |
| |
Stephanie R. Maschmeier |
|
| — |
|
|
| 1,630 |
|
|
| 1,630 |
|
| * |
|
|
| 8,564 |
| |
Paul C. Peck |
|
| — |
|
|
| 1,740 |
|
|
| 1,740 |
|
| * |
|
|
| 18,251 |
| |
Karla J. Staver |
|
| 1,709 |
|
|
| — |
|
|
| 1,709 |
|
| * |
|
|
| — |
| |
Raymond R. Ramu |
|
| 3,812 |
|
|
| 3,580 |
|
|
| 7,392 |
|
| * |
|
|
| 8,488 |
| |
Robert S. Chambers (7) |
|
| — |
|
|
| — |
|
|
| — |
|
| * |
|
|
| — |
| |
T. Michelle Richard (8) |
|
| 3,561 |
|
|
| 9,360 |
|
|
| 12,921 |
|
| * |
|
|
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (19 persons) |
|
| 204,545 |
|
|
| 101,480 |
|
|
| 306,025 |
|
|
| 1.2 | % |
|
| 310,087 |
|
* | Denotes less than 1% |
(1) | Includes common stock owned directly and indirectly. |
(2) | Number of shares that can be acquired on January 15, 2020 or within 60 days thereafter through the exercise of stock options or vesting of restricted stock. These shares are excluded from the “Shares Beneficially Owned” column. |
(3) | Based on the number of shares outstanding on January 15, 2020 (25,936,532) and includes the number of shares subject to acquisition by the relevant beneficial owner within 60 days thereafter. Including the number of shares subject to acquisition by the relevant beneficial owner pursuant to the Company’s Directors’ Deferred Fee Plan or Executive Capital Accumulation Plan upon such beneficial owner’s termination of services as a director or employee, the Percent of Class for all directors and executive officers as a group equals 2.37%. |
20
the phantom stock units are payable in stock upon the relevant beneficial owner’s termination of service as director or employee. |
(5) | Mr. Olsson will retire from the Board effective April 28, 2020. |
(6) | Mr. Trucksess will retire from the Board effective April 28, 2020. |
(7) | Mr. Chambers ceased serving as an executive officer and left the Company on January 2, 2020. |
(8) | Ms. Richard ceased serving as an executive officer on October 1, 2019 and left the Company in February 2020. |
21
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes our executive compensation philosophy and programs, the decisions the Compensation Committee has made under those programs and the factors considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our Named Executive Officers for 2019, who were:
Richard D. O’Dell, Chief Executive Officer
Frederick J. Holzgrefe, III, President & Chief Operating Officer
Robert S. Chambers, Former Vice President & Chief Financial Officer
Raymond R. Ramu, Executive Vice President & Chief Customer Officer
Paul C. Peck, Executive Vice President Operations
Karla J. Staver, Vice President of Safety and Human Resources
T. Michelle Richard, Former Vice President of Human Resources
As part of a corporate reorganization, Ms. Staver was promoted to Vice President of Safety and Human Resources in October 2019 and Ms. Richard’s position was eliminated. Prior to this change Ms. Staver was not an executive officer of Saia.
Executive Summary
The following provides an overview of our compensation philosophy and programs, including the focus on pay for performance, best practice pay programs and alignment of the interests of Saia’s executives with those of Saia’s stockholders. Details about the compensation awarded to Saia’s Named Executive Officers can be found in the Summary Compensation Table and related compensation tables in this proxy statement.
Saia relates pay to performance to incent executives to achieve corporate objectives.
The Company’s executive compensation program is designed to link pay with performance by requiring that a significant portion of each executive’s target compensation is at risk and is earned based on achieving corporate financial and operating targets, total stockholder return and stock price appreciation.
Saia aligns executives’ interests with those of the stockholders.
All significant elements of long-term compensation are paid through equity awards in the form of performance shares, stock options and restricted stock. The Company maintains stock ownership guidelines for the executive officers to further align the interests of our executive officers with our stockholders.
Saia annually benchmarks its executive compensation programs.
The Compensation Committee designs the Company’s executive compensation program to attract, motivate, reward and facilitate the retention of executive talent to achieve corporate objectives. The program is comprised of base salary, cash-based annual incentive awards, equity-based long-term incentive awards, customary benefits and perquisites and severance benefits. Elements of the program are generally designed to provide target compensation opportunity around the 50th percentile of the peer group, but can be higher or lower based on individual performance, tenure, additional responsibility and for executive retention and succession planning purposes. The Committee works with Mercer US Inc., its executive compensation consultant, each year to benchmark our program against our transportation industry peers and general industry.
2019 Say-on-Pay results support our current compensation policies and practices.
In accordance with the recommendations of our stockholders in 2011 and 2017, Saia holds a stockholder advisory “say-on-pay” vote on an annual basis. In 2019, holders of 97.7% of Saia’s stock voting on the
22
matter approved, on an advisory basis, the compensation paid to Saia’s Named Executive Officers as described in the 2019 proxy statement. The Compensation Committee believes that this vote demonstrates strong support by our stockholders of our compensation philosophy and goals and the compensation decisions made by the Committee. Based on these favorable results, the Compensation Committee was encouraged to continue its practices in determining executive compensation.
Key Features of Saia’s Executive Compensation Program
What Saia Does | What Saia Doesn’t Do | |
✓ Links a significant portion of pay to Company performance | ✘ No “single-trigger” change-of-control cash payments | |
✓ Encourages stock ownership by using stock ownership guidelines for all officers at two to five times their base salary | ✘ No stock option repricing or option grants below market value | |
✓ Mitigates risk taking by emphasizing long-term equity incentives, placing caps on potential payments, and maintaining clawback provisions | ✘ No hedging transactions, pledges or margin accounts with respect to Company stock | |
✓ Benchmarks against a representative and relevant peer group to assist in setting compensation | ✘ No excessive perquisites | |
✓ Uses an independent compensation consultant | ✘ No significant Company cash payments upon death or disability ✘ No tax gross-up provisions for our Named Executive Officers, after April 28, 2020 |
Financialand Operating Performance
The following graphs highlight Saia’s financial and operating performance for fiscal years 2017-2019:
(1) | Operating ratio is the calculation of operating expenses divided by operating revenue. |
(2) | $100 invested on December 31, 2016 in the Company’s common stock. |
23
As previously announced, on April 28, 2020, the date of the annual meeting, Mr. O’Dell will retire as Chief Executive Officer and Mr. Trucksess will retire as Chairman of the Board. On March 5, 2020, the Board appointed Mr. Holzgrefe as President and Chief Executive Officer and Mr. O’Dell as Chairman of the Board, effective on April 28, 2020.
The Company entered into an Employment Agreement with Mr. Holzgrefe, effective on April 28, 2020 that provides for a minimum base salary of $723,000 and participation in the Company’s annual and long-term incentive compensation plans and other benefit plans of Saia. Mr. Holzgrefe’s target annual incentive was set at 100% of base salary and his target long-term incentive was set at 200% of base salary. Mr. Holzgrefe’s base salary and target annual incentive approximates the 25th percentile of compensation paid to peer group company CEOs and his target long-term incentive is between the 25th and 50th percentiles. The Board established these compensation levels based on the recommendation of the Compensation Committee and the review of peer group data provided by Mercer.
Mr. Holzgrefe’s Employment Agreement provides that if he is terminated without Cause or leaves for Good Reason, he is entitled to severance benefits, including a cash payment equal to two times his annual rate of base salary, and he (and his spouse, as applicable) would remain covered for 24 months following such termination by certain employee benefit plans and programs. In addition, all stock options held by Mr. Holzgrefe would become fully exercisable for a period of two years following his termination (but not beyond the term of the option) and shares of restricted stock held for one year or more would vest pro rata over three years. The severance benefits are contingent on the execution by Mr. Holzgrefe of a release in favor of the Company and the compliance with non-disclosure, non-competition and non-solicitation provisions contained in the Employment Agreement.
In addition, Mr. Holzgrefe entered into a new double trigger Executive Severance Agreement that provides him with certain severance benefits in the event of a Change of Control of the Company followed within two years by (i) the termination by the Company of Mr. Holzgrefe’s employment for any reason other than death, disability, retirement or “cause” or (ii) the resignation of Mr. Holzgrefe due to an adverse change in title, authority or duties, a transfer to a new location more than 50 miles from the location where he was employed immediately prior to the Change of Control, a reduction in salary, or a reduction in fringe benefits or annual bonus below a level consistent with Saia’s practice prior to the Change of Control. The severance benefits in such event include a lump sum payment equal to three times the highest base salary and annual cash bonuses paid or payable to him in any consecutive 12 month period during the three years prior to termination and the immediate vesting of all outstanding stock options, which options remain exercisable for one year. In addition, for three years following the employment termination Mr. Holzgrefe is deemed to remain an employee of the Company for purposes of applicable medical, life insurance and long-term disability plans and programs covering him.
Following his retirement as Chief Executive Officer, Mr. O’Dell will become non-executive Chairman of the Board on April 28, 2020. In that role, he will receive a compensation package comprised of an annual cash payment of $165,000 and a stock grant of 1,098 shares of restricted stock. See “Director Compensation” for additional information on compensation paid to non-employee directors. Mr. O’Dell’s Employment Agreement and Executive Severance Agreement as described below in Compensation Discussion and Analysis and in “Potential Payments Upon Termination or Change in Control” will both terminate as of April 28, 2020, except the restrictive covenants included in the Employment Agreement survive the termination. Mr. O’Dell will be reimbursed for the cost of health insurance coverage for himself and his spouse for 24 months following his retirement as CEO.
Executive Compensation Oversight
Role of Compensation Committee
Saia’s executive compensation program is designed and administered by the Compensation Committee, which is made up entirely of independent directors. The Compensation Committee, with the assistance of Mercer, as independent compensation consultant to the Compensation Committee, annually reviews the Company’s compensation philosophy, the overall design of the compensation program and the elements of each component of compensation. In making decisions about compensation for the Named Executive Officers as described in the compensation tables in this proxy statement, the Compensation Committee takes the following factors into consideration, among others, although none of these factors is determinative individually:
24
• | The competitive environment for recruiting and retaining senior executives, including compensation trends, best practices, and executive compensation paid by our industry peers; |
The individual’s performance, experience and future advancement potential;
The Company’s past financial and operating performance, as well as the strategic plan for future periods;
The current economic conditions and the competitive market environment in which the Company operates;
The Company’s stock ownership and retention policies;
Each Named Executive Officer’s historical total compensation, including the value of all outstanding equity awards granted to the Named Executive Officer, and future compensation opportunities based on tally sheets; and
Internal pay equity.
The Compensation Committee reviews and approves all elements of our executive compensation program, other than Mr. O’Dell’s base salary, which is approved by the Board, based on a formal assessment of his performance conducted by the Board and based on the recommendation of the Compensation Committee. Mr. O’Dell makes recommendations to the Compensation Committee as to elements of compensation for his direct reports and provides performance reviews to assist the Compensation Committee in setting executive compensation.
Role of Compensation Consultant
The Compensation Committee enters into a consulting agreement with theits outside consultant on an annual basis. The Compensation Committee has retained Mercer US, Inc. (“Mercer”) as its executive compensation consultant to provide information, market analysis and recommendations regarding executive and director compensation. Mercer reports directly to the Compensation Committee and takes direction from the Committee. While it is necessary for the Committee’s consultantMercer to interact with management to gather information, the Committee has adopted protocols governing if and when the consultant’s advice and recommendations can be shared with management. The Committee regularly meets with the Mercer consultant outside the presence of management to discuss executive compensation philosophy and specific levels of compensation and to ensure that Mercer receives from management the information required to perform its duties on a timely basis. The Committee formally evaluates the performance of Mercer on an annual basis and may terminate the services of Mercer at any time.
Additional Information
Additional information about the structure and practices of the Compensation Committee and role of the compensation consultant is presented under the heading Corporate Governance – Compensation Committee in this proxy statement.
25
Executive Compensation Philosophy
The Compensation Committee believes the executive compensation program should link pay with performance and should attract, motivate, reward and facilitate the retention of the executive talent required to achieve corporate objectives and to create value for the Company’s stockholders. To this end, Saia integrates several keyWe align the interests of our executives with those of our stockholders through an annual incentive plan that uses annual metrics that we believe are important in determining our stock price and through long-term equity incentives in the form of performance shares, stock options and restricted stock. We seek to ensure internal and external pay equity by assessing the compensation components that are designedof our CEO relative to align rewardsother Named Executive Officers and salaried employees generally and by reviewing compensation paid by industry peers and in general industry. Our compensation program has achieved strong support from our stockholders with the short- and long-term performanceover 97.7% of the Company andshares voting on the matter at the 2019 annual stockholders meeting having voted in favor of each executive. Theseapproval of the compensation of our Named Executive Officers, as disclosed in the 2019 proxy statement.
Executive Compensation Components
The specific components of Saia’s executive compensation program are:
Component | Key Characteristics | Objective |
Base Salary — Cash | Fixed compensation component. Reviewed annually and adjusted if and when appropriate. | Provide a fixed form of executive compensation for performing daily responsibilities. |
Annual Incentives — Cash | Variable compensation component. Performance-based award opportunity, payable upon attaining specific annual targets. | Motivate and reward executives for achieving specific annual corporate performance objectives. |
Long-Term Incentives — Stock and Stock Options | Variable compensation component. Performance-based award opportunity, generally granted annually as a combination of performance shares, restricted stock and stock options. Amounts actually earned will vary based on stock price appreciation and corporate performance. | Motivate and reward executives for achieving over a three- to seven-year period increased stockholder value and superior performance in the industry. Also used for executive retention. |
Other Benefits and Perquisites — Various Forms | Fixed compensation component. | Provide employee benefits consistent with those provided by the peer group and for executive retention. |
Post-Employment Compensation — Cash and Benefits | Fixed compensation component. | Promote recruitment and retention and support non-competition, non-disclosure and non-solicitation agreements. |
Pay equity
To create stockholder value and motivate its employees, the Company is committed to internal and external pay equity. With respect toTo assess internal pay equity, the Compensation Committee annually reviews each year the relationship between the compensation of the Chief Executive Officer to that of other Named Executive Officers and salaried employees generally.
The Company does not have a policy regarding the target ratio of total compensation of the Chief Executive Officer to that of the other Named Executive Officers or salaried personnel, but the Committee does review compensation levels to ensure that appropriate equity exists. During the past three years, the Chief Executive Officer’s total direct compensation (salary and short- and long-term incentive awards) has been approximately two1.67 times the total direct compensation of the next highest paid Named Executive Officer, which the Committee believes is an appropriate multiple.multiple based on the additional responsibilities of the Chief Executive Officer. See also CEO Pay Ratio, elsewhere in this proxy statement.
To test external pay equity, the Committee annually reviews compensation data for similar positions at peer group companies, described below, in the transportation industry with revenue levels comparable to Saia’s.Saia’s and data from general industry surveys.
26
Compensation Review Peer Group
To assist the Compensation Committee in determining the appropriate design, components and levels of compensation for the Company’s executive officers, the Committee annually reviews compensation data for similar positions at comparable, like-sized companies in the transportation industry. The peer group companies are selected with input from Mercer and are comprised of U.S. publicly-traded transportation companies with annual revenues of approximately one-half to two and one-halfthree times Saia’s revenues. The Committee focuses on these transportation peers because it believes transportation companies with a scale comparable to Saia’s are our primary competitors for executive talent and provide a sound basis to assess Saia’s executive compensation. This peer group was used to review base salary, annual incentives and long-term incentives. The Committee generally uses the market 50th percentile or market median (using the peer group) as the targeted positioning for compensation of the Company’s executives, but will adjust compensation above or below that level based on individual performance, tenure and, in some cases, for executive retention and succession planning purposes.
The peer group used in the review for 2017 and 2018during 2019 was:
Company |
| Transportation Business |
| 2016 Revenues (in millions) |
| |
Air Transport Services Group, Inc. |
| Air Freight & Logistics |
| $ | 769 |
|
ArcBest Corporation |
| Trucking |
| $ | 2,700 |
|
Celadon Group, Inc. |
| Trucking |
| $ | 1,065 |
|
Covenant Transportation Group, Inc. |
| Trucking |
| $ | 671 |
|
Echo Global Logistics, Inc. |
| Air Freight & Logistics |
| $ | 1,716 |
|
Forward Air Corporation |
| Air Freight & Logistics |
| $ | 983 |
|
Genesee & Wyoming, Inc. |
| Railroad |
| $ | 2,002 |
|
Heartland Express, Inc. |
| Trucking |
| $ | 613 |
|
Hub Group, Inc. |
| Trucking |
| $ | 3,573 |
|
Kansas City Southern |
| Railroad |
| $ | 2,334 |
|
Knight Transportation, Inc. |
| Trucking |
| $ | 1,118 |
|
Landstar System, Inc. |
| Trucking |
| $ | 3,168 |
|
Marten Transport, Ltd. |
| Trucking |
| $ | 671 |
|
Old Dominion Freight Line, Inc. |
| Trucking |
| $ | 2,992 |
|
Roadrunner Transportation Systems, Inc. |
| Trucking |
| $ | 2,033 |
|
Universal Logistics Holdings |
| Trucking |
| $ | 1,073 |
|
USA Truck, Inc. |
| Trucking |
| $ | 429 |
|
Werner Enterprises, Inc. |
| Trucking |
| $ | 2,009 |
|
Saia, Inc. |
| Trucking |
| $ | 1,218 |
|
Some of the peer group companies have substantial stock ownership by executives. If the ownership amounts were disclosed by the peer group company to have a material impact on executive compensation levels, the specific compensation element is excluded from the competitive data and associated analysis.
Executive Compensation Decisions for 2017
Based on the Committee’s annual executive compensation reviews conducted in 2016 and 2017, the Committee believes that the compensation awarded to the Named Executive Officers for 2017 is reasonable given then-current Company financial performance and meets the objectives of attracting, retaining, motivating, and rewarding talented executives who can contribute to Saia’s long-term success and thereby build value for Saia stockholders. Decisions with respect to each component of executive compensation are described below.
The following graph sets forth the key components of compensation and pay mix for the Named Executive Officers based on target payout levels for 2017:
|
|
Base Salary
The Committee sets base salary for all executive officers based on an annual review of several factors, including base salaries paid by the peer group companies, individual and Company performance, pay mix, internal pay equity, executive retention and succession planning. In July 2017, the Company implemented salary and wage increases of approximately 3% for all of its employees, including each of the Named Executive Officers. In February 2018, the Board approved a Company-wide salary and wage increase of 3%, effective July 1, 2018, that also includes each of the Named Executive Officers.
In August 2017, the Company made changes involving several members of its senior executive group. As part of the changes, Mr. Holzgrefe was named Executive Vice President & Chief Financial Officer, and he assumed additional oversight for the Company’s pricing, information technology and maintenance and property functions. The Compensation Committee increased his base salary from $406,000 to $500,000. Mr. Ramu’s title was changed to Executive Vice President & Chief Customer Officer and his base salary was increased from $359,000 to $410,000. As part of the executive changes and as a result of the retirement of Brian Balius as Vice President of Transportation and Engineering, Mr. Thompson was promoted from Vice President Operations East to Executive Vice President Operations for which he is responsible for operations, industrial engineering and transportation functions. Mr. Thompson’s base salary in the new position was set at $320,000. In determining the base salaries for Mr. Holzgrefe, Mr. Ramu and Mr. Thompson, the Compensation Committee reviewed data provided by Mercer of base salaries of comparable executives of the peer group firms and considered other factors, including job performance, additional responsibilities, executive retention and succession planning.
Over the past several years, the Committee has made adjustments to the base salaries of the Named Executive Officers as part of a continuing, multi-year process to better align their base salaries with the market median, provide for executive retention and recognize individual performance. Effective January 1, 2018, the Committee increased Ms. Richard’s base salary from $269,000 to $300,000 to align her salary with market median.
The following sets forth the annual salaries for the Named Executive Officers for 2017 and 2018:
Named Executive Officer |
| Title |
| Annual Salary 2017 |
|
| Annual Salary 2018 |
| ||
Richard D. O’Dell |
| President & Chief Executive Officer |
| $ | 727,371 |
|
| $ | 739,032 |
|
Frederick J. Holzgrefe, III |
| Executive Vice President & Chief Financial Officer |
| $ | 434,492 |
|
| $ | 500,000 |
|
Raymond R. Ramu |
| Executive Vice President & Chief Customer Officer |
| $ | 372,443 |
|
| $ | 410,000 |
|
T. Michelle Richard |
| Vice President of Human Resources |
| $ | 264,981 |
|
| $ | 300,000 |
|
Craig A. Thompson |
| Executive Vice President Operations |
| $ | 278,275 |
|
| $ | 320,000 |
|
Mark H. Robinson |
| Retired Vice President & Chief Information Officer |
| $ | 305,048 |
|
| $ | — |
|
Annual Cash Incentives
Annual cash incentive awards are used to reward executives for achievement of corporate financial and operating targets for the year. For 2017, the annual incentive awards for the Named Executive Officers were based 50% on achieving the Company’s annual operating income target and 50% on achieving the Company’s operating ratio target.
The Committee believes using an operating income target rather than an earnings-per-share target more closely reflects actual performance of management for the year by eliminating the impact of changes to the effective tax rate. Saia uses operating ratio as a performance goal because it is an objective measure of profitability of Saia’s business, is a common measure of profitability within the industry and has a direct impact on Saia’s stock price. Operating ratio is defined as operating expenses divided by operating revenue.
The annual incentive awards include a threshold, target and maximum payout level for each executive based on an evaluation of annual incentive compensation at peer group companies. As part of the executive changes in August 2017, the Committee approved increases to the target annual incentive plan for Mr. Holzgrefe, Mr. Ramu and Mr. Thompson. Mr. Holzgrefe’s target annual incentive increased from 60% to 75% of base salary; Mr. Ramu’s target annual incentive increased from 45% to 50% of base salary; and Mr. Thompson’s target annual incentive increased from 40% to 50% of base salary. In each instance, the increases were based in part on an analysis conducted by Mercer of annual incentive compensation paid to comparable executives at peer group firms and other factors, including job performance, additional responsibilities, executive retention and succession planning.
Other than as related to the August 2017 executive changes, the Committee made no other changes to the annual cash incentive plan for the Named Executive Officers in 2017 or 2018. For 2017 and 2018, the potential payout levels under the annual incentive awards for the Named Executive Officers are as follows:
Potential Payouts of Annual Incentives for 2017 and 2018
|
|
|
| Payout as a % of Base Salary |
| |||||||||||
Named Executive Officer |
| Title |
| Threshold |
|
|
| Target |
|
|
| Maximum |
| |||
Richard D. O’Dell |
| President & Chief Executive Officer |
|
| 22.5 | % |
|
|
| 90 | % |
|
|
| 180 | % |
Frederick J. Holzgrefe, III |
| Executive Vice President & Chief Financial Officer |
|
| 18.75 | % |
|
|
| 75 | % |
|
|
| 150 | % |
Raymond R. Ramu |
| Executive Vice President & Chief Customer Officer |
|
| 12.5 | % |
|
|
| 50 | % |
|
|
| 100 | % |
T. Michelle Richard |
| Vice President of Human Resources |
|
| 11.25 | % |
|
|
| 45 | % |
|
|
| 90 | % |
Craig A. Thompson |
| Executive Vice President Operations |
|
| 12.5 | % |
|
|
| 50 | % |
|
|
| 100 | % |
Mark H. Robinson |
| Retired Vice President & Chief Information Officer |
|
| 11.25 | % |
|
|
| 45 | % |
|
|
| 90 | % |
Performance Targets and Actual Performance for 2017
The operating income and operating ratio performance goals for 2017 were set by the Compensation Committee considering past performance, the strategic plan, current economic conditions and other forecasts of future results. The performance targets and actual performance for 2017 were as follows:
|
| Threshold |
|
| Target |
|
| Maximum |
|
| Actual |
|
| ||||
Operating income (in millions) (50% weighting) |
| $ | 59.8 |
|
| $ | 88.2 |
|
| $ | 126.1 |
|
| $ | 94.7 |
|
|
Operating ratio (50% weighting) (1) |
|
| 95.5 | % |
|
| 93.3 | % |
|
| 90.4 | % |
|
| 93.1 | % |
|
|
|
The Committee strives to set the threshold, target and maximum performance goals at levels such that the relative likelihood that Saia will achieve such goals remains consistent from year to year. It is the intent of the Committee that the threshold goals should be attainable a majority of the time, target goals should, on average, be reasonably expected to be achieved and maximum goals should be attained a minority of the time. These levels of expected performance are taken into consideration based on the compensation philosophy and evaluation of compensation previously discussed. Establishing the expected performance goals relative to these criteria is inherently subject to considerable judgment on the part of the Committee.
The annual incentive awards granted in 2017 were made pursuant to the Saia, Inc. Annual Cash Bonus Plan (the “Bonus Plan”), which was approved by Saia stockholders in April 2015. The awards granted under the Bonus Plan for 2017 were designed to be tax-deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended. Please see “Tax Policies” below on page 37 for a discussion of the Committee’s approach to Section 162(m) deductibility.
The Committee provides long-term equity incentives to the executive officers to reward executives for achieving stockholder valuation increases over a multi-year period, to tie compensation to stockholder value creation and to encourage executive retention. All executive officers are eligible to participate in the long-term equity incentive program. All equity grants are awarded under the Second Amended and Restated Saia, Inc. 2011 Omnibus Incentive Plan, which was approved by our stockholders in 2016.
For 2016, 50% of a Named Executive Officer’s long-term equity incentive opportunity was granted in performance stock units and 50% in stock options (valued using the Black-Scholes option pricing model). For 2017 and 2018, 50% of a Named Executive Officer’s long-term equity incentive opportunity was granted in performance stock units, 25% in stock options (valued using the Black-Scholes option pricing model), and 25% in restricted stock (valued using the intrinsic-value pricing model). The Committee began using restricted stock as part of long-term equity incentives in 2017 to conform to common peer group practice and for executive retention. The Committee believes this mix of awards balances the focus between relative and absolute stock performance and reflects competitive practices.
For existing participants in the plan, long-term equity incentives are typically granted in early February each year on the third trading day following the release of the Company’s financial results for the prior fiscal year. For new hires, the grant date is typically on or around their hire date.
|
|
| |||||
|
|
| |||||
|
|
| |||||
|
|
| |||||
| |||||||
|
Long-Term Equity Incentive Plan Targets
The Committee determines the target value of the long-term equity incentives granted to each Named Executive Officer, based on a number of factors, including market data prepared by Mercer of long-term equity incentives granted to comparable officers at the peer group companies, individual performance, pay mix, internal equity, and executive retention. The specific equity grants for each executive officer are based on the last sale price of Company stock on the grant date for restricted stock and performance stock units, and on the Black-Scholes option pricing model for stock option grants.
As part of the executive changes in August 2017, the Committee approved increases in target long-term equity incentives for Mr. Holzgrefe, Mr. Ramu and Mr. Thompson for 2018. Mr. Holzgrefe’s target increased from 115% to 170% of base salary; Mr. Ramu’s target increased from 75% to 100% of base salary; and Mr. Thompson’s target increased from 50% to 75% of base salary. In each case, the Compensation Committee approved the increases based in part on an evaluation conducted by Mercer of long-term equity incentive grants to comparable officers of the Company’s peer group firms and other factors, including job performance, additional responsibilities, executive retention and succession planning.
Other than as described above for the August 2017 executive changes, no other changes were made to the long-term equity incentive plan for the Named Executive Officers for 2017 and 2018. For 2017 and 2018, the target long-term equity incentive as a percentage of base salary for the Named Executive Officers was as follows:
|
|
| Target as a % of Base Salary |
| ||||||
Named Executive Officer |
| Title |
| 2017 |
|
| 2018 |
| ||
Richard D. O’Dell |
| President & Chief Executive Officer |
|
| 200 | % |
|
| 200 | % |
Frederick J. Holzgrefe, III |
| Executive Vice President & Chief Financial Officer |
|
| 115 | % |
|
| 170 | % |
Raymond R. Ramu |
| Executive Vice President & Chief Customer Officer |
|
| 75 | % |
|
| 100 | % |
T. Michelle Richard |
| Vice President of Human Resources |
|
| 55 | % |
|
| 55 | % |
Craig A. Thompson |
| Executive Vice President Operations |
|
| 50 | % |
|
| 75 | % |
Mark H. Robinson |
| Retired Vice President & Chief Information Officer |
|
| 75 | % |
|
| — |
|
The key elements of the awards were established, as described below.
Performance Stock Units
Fifty percent of the Named Executive Officers’ long-term incentive opportunity is awarded in performance stock units. The role of performance stock units is to reward executives for long-term value creation relative to peer companies. Since the size of the peer companies is not critical in assessing relative total stockholder returns, the peer group used for performance stock unit comparison (“PSU Peer Group”) is broader than the peer group used for determining base salaries, annual incentives and long-term incentives. The PSU Peer Group includes public companies in the broader transportation industry, regardless of revenues, because this provides a wider spectrum from which to assess management performance. The companies included in the PSU Peer Group for open performance periods are as follows: