UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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☐ | Soliciting Material Pursuant to |
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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A NOTE FROM
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March 8, 2019June 1, 2020
Dear Superior Stockholder:
You are cordially invited to attend the Annual Meetingannual meeting of Stockholdersstockholders of Superior Industries International, Inc. (the “Annual Meeting”), which. The meeting will be held at Superior Industries International, Inc. (the “Company” or “Superior”) headquarters at 26600 Telegraph Road, Southfield, Michigan 48033 on April 23, 2019,June 22, 2020 at 10:00 a.m. Eastern Daylight Time. Due to health concerns related toCOVID-19, and to support the health and well-being of our stockholders, employees, and partners, the Annual Meeting will be a completely “virtual meeting,” conducted via live audio webcast on the Internet. You will be able to attend the Annual Meeting as well as vote and submit your questions during the live audio webcast of the meeting by visiting www.virtualshareholdermeeting.com/SUP2020 and entering the16-digit control number included in our notice of internet availability of the proxy materials, on your proxy card or in the instructions that accompanied your proxy materials.
During 2018, Superior continued to drive improvement2019, we executed on our portfolio of differentiating technologies, resulting in our financial and operational performance, return capital to our stockholders and engage with our stockholders on important topics such as executive compensation. With the announcement of Don Stebbins’ retirement at the end of the year, our Board of Directors (the “Board”) initiated a search for a permanent President and Chief Executive Officer, which we expect to conclude shortly. In the meantime,$1.4 billion in my interim role as Executive Chairman, I have worked with the management team to position Superior for future growth, accelerate the integration of best practices across the organization, and enhance the Company’s operational and financial performance.
Below are a few of the Company’s key 2018 highlights:
Increased volumes to 21.0 million units, net sales to $1.5 billion and $755 million of Value-Added Sales to $797.2 million;
Net Income(1), representing growth over market of $26.0 million2%(2) and Adjusted EBITDAcontent per wheel growth of $185.6 million;
Generated $156.1 million of Cash Flow from Operations;
Continued progress on integration of6%(3). We also operationalized market leading technologies and positioned the company for the future by rightsizing our European Operations; and
Returned capital to stockholders through common dividends totaling $9.0 million.
Furthercost structure. Additional highlights of our 20182019 performance can also be found in the “2018“2019 Performance & Business Highlights” and “Compensation, Discussion and Analysis” sections of the attached Proxy Statement. Information regarding Value-Added Sales
While the full impact ofCOVID-19 on the automotive industry is uncertain, I am confident we are taking the necessary actions to manage what is in our control, including ensuring the health and Adjusted EBITDA, non-GAAP financial measures, can be found in Appendix Asafety of our employees, aligning costs to this Proxy Statement.OEM production, enhancing our cash and liquidity position, and utilizing our production capacity efficiently.
Strategic PlanInvestor Engagement. We continueDuring 2019, we actively engaged with investors to pursue the strategic plan introduced in 2015, as well as our mission to deliver innovative wheel solutions that enhance value for our customers’ products and our stakeholders, generate profitable growth and deliver value to stockholders by, among other actions:
Capitalizing on industry trends toward larger diameter wheels, lightweighting, and more sophisticated designs and finishes;
Leveraging our diversified market presence, customer base, and market segments to expand customer opportunities;
Investing in new technologies and capabilities such as Alulite™, flow forming, laser etching, milling and pad printing;
Buildinghear your feedback, abest-in-class organization centered on our values significant priority of customer focus, integrity, teamwork and continuous improvement; and
Enhancing working capital management and driving marginsthe Board. Management participated in more than 14 investor conferences, investornon-deal roadshows, and cash flowother investor events in multiple cities during 2019. We also contacted our top shareholders to pay down debt.
Our management works closely withreceive feedback regarding the 2019 proxy and have implemented changes in response to that feedback. For example, in response to feedback from shareholders, we plan to appoint Raynard D. Benvenuti to the Board of Superior immediately following our 2020 Annual Meeting and will also appoint him to monitor the progress being made on our strategic plan. The Board reviews Superior’s strategic plan at least annuallyNominating and more frequently as significant opportunities or events arise.
Your Vote is Important. We,I, and the rest of the Board, invite you to attend the Annual Meeting.Meeting via the live audio webcast. If you are not able to attend in person,via the live audio webcast, we encourage you to vote by proxy. The Proxy Statementproxy statement contains detailed information about the matters on which we are asking you to vote.Whether or not you plan to attend the Annual Meeting via the live audio webcast, your vote is important, and we encourage you to vote promptly. You can vote your shares over the telephone, via the Internet or by completing, dating, signing and returning athe enclosed proxy card or voting instruction form provided by your broker, as described in the enclosed Proxy StatementStatement..
Thank you for your ongoing support of and continued interest in, Superior.
Timothy C. McQuay
Majdi Abulaban
President and Chief Executive Chairman of the BoardOfficer
(1) | Value-Added Sales is anon-GAAP financial measure. See Appendix A to this Proxy Statement for a reconciliation of net sales, the most comparable GAAP measure, to Value-Added Sales. |
(2) | Change in Value-Added Sales excluding impacts of foreign exchange compared to industry production volumes. |
(3) | Change in Value-Added Sales per wheel sold excluding impacts of foreign exchange. |
This Proxy Statement is dated March 8, 2019June 1, 2020 and is first being made available to stockholders via the Internet on or about March 8, 2019.June 1, 2020.
If you have any questions or require any assistance with voting your shares, or if you need additional copies of the proxy materials, please contact:
1212 Avenue of the Americas, 24th Floor
New York, N.Y. 10036
(212)297-0720
Call Toll-Free at:(877) 629-6356
E-mail:info@okapipartners.com
NOTICE OF OF STOCKHOLDERS
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Time and Date: | ||
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Record Date: |
Each holder of Superior Industries International, Inc. (“Superior” or the “Company”) common stock and Series A Preferred Stock as of the Record Date will be entitled to one vote on each matter for each share of common stock held, or into which such holder’s Series A Preferred Stock is convertible, on the Record Date. | |
Items to Be Voted On: | 1. To elect
2. To approve, in anon-binding advisory vote, the executive compensation of the Company’s named executive
3. To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
4. To act upon such other matters as may properly come before the Annual Meeting or any postponements or adjournments thereof. | |
How to Vote: | YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING VIA THE LIVE AUDIO WEBCAST, PLEASE VOTE YOUR SHARES PROMPTLY BY COMPLETING, DATING, SIGNING, AND RETURNING | |
Contact Information: | If you have any questions about the attached Proxy Statement or require assistance in voting your shares on the proxy card or voting instruction form, or need additional copies of Superior’s proxy materials, please contact Okapi Partners LLC, our proxy solicitor assisting us with the Annual Meeting, toll free at (877)629-6356. |
BY ORDER OF THE BOARD OF DIRECTORS, |
/s/ Joanne M. Finnorn |
Joanne M. Finnorn |
Senior Vice President, General Counsel and Corporate Secretary |
Southfield, Michigan
March 8, 2019June 1, 2020
Important Notice of ElectronicRegarding the Availability of
Proxy Materials for the Annual Meeting of Stockholders to be held on June 22, 2020
Our Proxy Statement is attached. Financial and other information concerning our Company is contained in our Annual Report
As permitted by to Stockholders for the year ended December 31, 2019. Pursuant to rules adoptedpromulgated by the United StatesU.S. Securities and Exchange Commission, (the “SEC”), we are makinghave elected to provide access to our proxy materials both by sending you this full set of proxy materials, including the Proxy Statement, annual report, letter to stockholders, and proxy card, and by notifying you of the availability of these proxy materials on the Internet. This Proxy Statement and our annual report are available at www.proxyvote.com. All stockholders are invited to attend the Annual Report available to stockholders electronicallyMeeting via the Internet. On or about March 8, 2019, we will mail to most of our stockholders a notice (the “Notice”) containing instructions on how to access this Proxy Statement and our Annual Report and to vote via the Internet or by telephone.
The Notice also contains instructions on how to request a printed copy of the proxy materials. In addition, you may elect to receive future proxy materials in printed form by mail or electronically bye-mail by following the instructions included in the Notice. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials viae-mail, unless you elect otherwise.live audio webcast
Superior Industries International, Inc. • Table of Contents
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Vote Required | 28 | |||
Recommendation of the Board of Directors | 28 |
20192020 Proxy Statement | i
Proxy Summary • 20192020 Annual Meeting of Stockholders
This summary highlights selected 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 carefully before voting. For more complete information regarding our 20182019 performance, please review our 20182019 Annual Report
on Form10-K for the year ended
December 31, 20182019 filed with the SEC on March 7, 2019.February 28, 2020, as amended by our Form10-K/A filed with the SEC on April 29, 2020.
The 20182019 annual report to stockholders, including financial statements, is being made available to stockholders together with these proxy materials on or about March 8, 2019.June 1, 2020.
20192020 Annual Meeting of Stockholders – Annual Meeting Information
Time and Date: |
June 22, 2020 at 10:00 a.m. Eastern Daylight Time, via a live audio webcast that is available at www.virtualshareholdermeeting.com/SUP2020. There will be no physical meeting location and the meeting will only be conducted via the live audio webcast. To participate in the meeting, you must have your16-digit control number that is shown on your proxy card. | |
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Record Date: | ||
Voting: | You are entitled to vote at the meeting if you were a stockholder of record of Superior’s common stock or Series A Preferred Stock at the close of business on the Record Date. Each holder of Superior common stock or Series A Preferred Stock as of the Record Date will be entitled to one vote on each matter for each share of common stock held, or into which such holder’s Series A Preferred Stock is convertible, on the Record Date. |
For more information regarding the Annual Meeting and voting, please see our “Information About the Annual Meeting and Voting” Section, found on page 59.64.
20192020 Annual Meeting of Stockholders – Agenda and Voting Recommendations
Proposals: | Proposals: | Board Voting Recommendation: | Page Reference for More Detail: | Proposals: | Board Voting Recommendation: | Page Reference for More Detail: | ||||||
1. | Election of Directors | “FOR” all nominees | 5 | Election of nine Directors | “FOR” all nominees | 5 | ||||||
2. | To approve, in anon-binding advisory vote, executive compensation of the Company’s named executive officers | “FOR” | 25 | To approve, in anon-binding advisory vote, executive compensation of the Company’s named executive officers for the fiscal year ended December 31, 2019 | “FOR” | 27 | ||||||
3. | Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2019 | “FOR” | 27 | Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020 | “FOR” | 29 |
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting via the live audio webcast, your vote is important, and we encourage you to vote promptly. You can vote your shares over the telephone, via the Internet or by completing, dating, signing and returning a proxy card or voting instruction form, as described in the Proxy Statement. Your prompt cooperation is greatly appreciated.
20192020 Proxy Statement | 1
Proxy Summary • 20182019 Performance & Business Highlights
20182019 Performance & Business Highlights
The following chart highlights key metrics of our financial and operating performance in 2018 as compared to 2017:and 2019:
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Key Metric ($ in Millions except per wheel data, Units in Thousands) | 2018 Results | 2019 Results | ||
Units Shipped | 20,991 | 19,246 | ||
Net Sales | $1,501.8 | $1,372.5 | ||
Value-Added Sales(1) | $797.2 | $755.3 | ||
Value-Added Sales per Wheel(1) | $37.98 | $39.24 | ||
Net Income (Loss)(2) | $26.0 | $(96.5) | ||
Adjusted EBITDA(3) | $185.6 | $168.8 | ||
Adjusted EBITDA(3) % of Value-Added Sales(1) | 23.3% | 22.3% | ||
Net Cash Provided by Operating Activities | $156.1 | $162.8 |
(1) | Value-Added Sales is a financial measure that is not calculated according to GAAP, and we are including our 2018 and 2019 results for this measure to show an aspect of our performance. See Appendix A to this Proxy Statement for a reconciliation of net sales, the most comparable GAAP measure, to Value-Added Sales. |
(2) | 2019 results include goodwill and intangible impairment of $102.2 million and Fayetteville facility restructuring costs of $13.0 million. |
(3) | Adjusted EBITDA is a key measure that is not calculated according to GAAP, and we are including our 2018 and 2019 results for this measure to show an aspect of our performance. See Appendix A to this Proxy Statement for a reconciliation of net income, the most comparable GAAP measure, to Adjusted EBITDA. |
2 | Superior Industries International, Inc.
Proxy Summary • Executive Compensation Highlights
Executive Compensation Highlights
Highlights of our 20182019 executive compensation program are summarized as follows.
Individual Performance Component of Annual Incentive. Our Annual Incentive Performance Plan (the “AIPP”) plays an important role in our approach to total compensation. We believe it motivates participants to focus on improving our performance on key financial measures during the year because it requires that we achieve defined, objectively determinable goals before participants become eligible for an incentive payout.
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• | Long-Term Incentive Plan (“LTIP”) Performance Measures. In |
Return on Invested Capital
weighting | Cumulative Earnings
(“Cumulative EPS”) 40% weighting | Relative Total Shareholder Return
(“Relative TSR”) 20% weighting |
As discussed in the “2018“2019 Executive Compensation Components – Long-Term Equity Incentive Compensation”Compensation” section of this Proxy Statement, these performance measurestargets were developed after a rigorousbottom-up financial analysis of our business.
(A) | Please see the “Annual Incentive Compensation and Bonuses” portion of the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion of how AIPP Adjusted EBITDA is calculated. |
(B) | Please see the “Long-Term Equity Incentive Compensation” portion of the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion of how each of these performance measures are calculated. |
Corporate Governance Highlights
Our Board is committed to having a sound governance structure that promotes the best interests of our stockholders. Highlights of our governance practices include:
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The charters of the Committees of the Board clearly establish the Committees’ respective
20192020 Proxy Statement | 3
Proxy Summary • Corporate Governance Highlights
roles and responsibilities, including the authority to hire outside advisors independently of management |
Name | Age | Director Since | Principal Occupation | Independent | Board Committees | Age | Director Since | Principal Occupation | Independent | Board Committees | ||||||||||
Majdi B. Abulaban | 56 | 2019 | President and Chief Executive Officer of the Company | |||||||||||||||||
Michael R. Bruynesteyn | 55 | 2015 | Treasurer & Vice President, Strategic Finance of Turner Construction Company | X | • Audit Committee • Nominating & Corporate Governance Committee (Chair) | 56 | 2015 | Chief Financial Officer of Raistone Capital | X | • Audit Committee • Nominating & Corporate Governance Committee | ||||||||||
Richard J. Giromini | 66 | 2019 | Executive Advisor and Director of Wabash National Corporation (NYSE: WNC) | X | • Audit Committee | 67 | 2018 | Retired Chief Executive Officer and Director of Wabash National Corporation (NYSE: WNC) | X | • Audit Committee • Compensation & Benefits Committee | ||||||||||
Paul J. Humphries | 64 | 2014 | President of High Reliability Solution (a business group of Flex LTD) | X | • Audit Committee • Compensation & Benefits Committee | 65 | 2014 | President of High Reliability Solution (a business group of Flex LTD) | X | • Audit Committee • Compensation & Benefits Committee (Chair) | ||||||||||
Ransom A. Langford | 47 | 2017 | Partner, TPG Growth | X | • Compensation & Benefits Committee | 48 | 2017 | Partner, TPG Growth | X | |||||||||||
James S. McElya | 71 | 2013 | Retired Chairman of the Board of Directors, Affinia Group Intermediate Holdings Inc. | X | • Compensation & Benefits Committee (Chair) • Nominating & Corporate Governance Committee | 72 | 2013 | Retired Chairman of the Board of Directors, Affinia Group Intermediate Holdings Inc. | X | • Compensation & Benefits Committee • Nominating & Corporate Governance Committee (Chair) | ||||||||||
Timothy C. McQuay | 67 | 2011 | Executive Chairman of the Board | 68 | 2011 | Retired Managing Director, Investment Banking, Noble Financial Markets | X | |||||||||||||
Ellen B. Richstone | 67 | 2016 | Retired Chief Financial Officer, Rohr Aerospace | X | • Audit Committee (Chair) • Nominating & Corporate Governance Committee | 68 | 2016 | Retired Chief Financial Officer, Rohr Aerospace | X | • Audit Committee (Chair) • Nominating & Corporate Governance Committee | ||||||||||
Francisco S. Uranga | 55 | 2007 | Corporate Vice President & Chief Business Operations Officer for Latin America, Foxconn | X | • Compensation & Benefits Committee • Nominating & Corporate Governance Committee | 57 | 2007 | Corporate Vice President & Chief Business Operations Officer for Latin America, Foxconn | X | • Compensation & Benefits Committee • Nominating & Corporate Governance Committee |
4 | Superior Industries International, Inc.
Proposal No. 1 • General
On August 27, 2018,March 22, 2019, the Board resolved to increase itsthe size of the Board from eight to nine directors and appointed Richard J. Giromini to fillMajdi Abulaban as a director on May 15, 2019, the newly-created vacancy oneffective date of his appointment as President and Chief Executive Officer of the Board. On December 31, 2018, Donald J. Stebbins retired from the Board and the Board resolved to reduce its size to eight directors, effective immediately.Company.
Upon the recommendation of our Nominating and Corporate Governance Committee, the Board has nominated the eightnine individuals listed below to stand for election at the Annual Meeting for aone-year term ending at the annual meeting of stockholders in 20202021 or until their successors, if any, are elected or
appointed. All of our nominees have consented to be named in this Proxy Statement and to serve as directors, if elected.elected by the Company’s stockholders. In
the event that any nomineeof our nominees is unable or declines to serve as a director at the time of the Annual Meeting, the proxies returned to us will be voted for the election of a substitute nominee(s) proposeddesignated by the Board upon the recommendation of its Nominating and Corporate Governance Committee of the Board.Committee. If any such substitute nominee(s) are designated, we will file an amended proxy statement and proxy card that, as applicable, identifies the substitute nominee(s), discloses that such nominees have consented to being named in the amended proxy statement and to serve as directors if elected, and provide information about such nominees required by the rules of the SEC. As of the date of this Proxy Statement, the Board is not aware that any nomineeof its nominees is unable or will decline to serve as a director.
The Board, through the Nominating and Corporate Governance Committee, considers the following experience, qualifications, attributes and skills of both potential director nominees as well as existing members of the Board:
For more information regarding director nominations and qualifications, see the sections titled “Information about Director Nominees” (beginning on page 6) and “Director Selection” (beginning on page 15)17).
20192020 Proxy Statement | 5
Proposal No. 1 • Information about Director Nominees
Information about Director Nominees
Set forth below is information about our nominees, including their names and ages, recent employment or principal occupation, their period of service as a Superior director, the names of other public companies for which they currently serve as a director or have served as a director within the last five years and a summary of their specific experience, qualifications, attributes or skills that led to the conclusion that they are qualified to serve as a director. Mr. Langford was appointed and is being nominated to the Board pursuant to the Investor Rights Agreement, dated as of May 22, 2017, by and between the Company and TPG Growth III Sidewall, L.P.
Each of the nominees for director has been nominated for election by the Board upon recommendation by the Nominating and Corporate Governance Committee and has consented to serve if elected. When a member of the Nominating and Corporate Governance Committee is under consideration for nomination, the nominee typically recuses himself or herself from the discussion and abstains from the voting on the recommendation.
MAJDI ABULABAN Superior Industries International, Inc. President and Chief Executive Officer Age: 56 Director since: 2019 Board Committees: None Education: Mr. Abulaban holds a Bachelor of Applied Science in Mechanical Engineering from the University of Pittsburgh and a Master of Business Administration from Weatherhead School of Management at Case Western Reserve University. Current Directorships: SPX Flow (NYSE: FLOW) Former Directorships: None | Qualifications: Mr. Abulaban has more than 30 years of leadership experience in global automotive supplier operations. Mr. Abulaban was appointed to the Board of Superior Industries International based on his experience and skills, including his significant experience in the automotive industry and strong operational background. He led three global product business units and over 120,000 employees to transfer Delphi into a world-class provider of electrical architecture. He has a proven track record of implementing successful strategies, operating systems and organizational structures that drive performance. In addition, he was instrumental in establishing Delphi as an automotive leader in China. Mr. Abulaban was appointed as the Company’s President and Chief Executive Officer effective May 15, 2019. He was Senior Vice President & Group President, Global Signal and Power Solutions at Aptiv PLC (formerly Delphi Automotive), a technology company that develops connected solutions from 2017 to 2019. He previously was Senior Vice President and Group President, Global Electrical and Electronic Architecture Segment and President of Aptiv Asia Pacific. He also held various business unit leadership positions with Delphi in China, Singapore and the United States, having joined the company in 1985. |
6 ��| Superior Industries International, Inc.
Proposal No. 1 • Information about Director Nominees
MICHAEL R. BRUYNESTEYN
Independent
Age:
Director since: 2015
Board Committees: Audit and Nominating and Corporate Governance
Education: Mr. Bruynesteyn holds a Bachelor of Applied Science in Mechanical Engineering from the University of British Columbia and a Master of Business Administration from the London Business School. Mr. Bruynesteyn is a National Association of Corporate Directors Governance Fellow.
Current Directorships: None
Former Directorships: None | Qualifications: Mr. Bruynesteyn has developed a deep understanding of capital markets fromhands-on experience over the last 20 years. He cultivated a firm grasp of the investor’s perspective from the vantage points of directing investor relations for General Motors Company (NYSE: GM), leading the award-winning sell-side research team covering the automotive industry for Prudential Securities, and investing on thebuy-side as part of a $6 billion hedge fund owned by Lehman Brothers. Mr. Bruynesteyn built on this knowledge base by providing deal-making advice to automotive and energy storage companies with boutique investment bank Strauss Capital.
Mr. Bruynesteyn is Chief Financial Officer of Raistone Capital, a leader in providing working capital solutions. Previously, he was Treasurer and Vice President, Strategic Finance of Turner Construction Company, the largestnon-residential commercial construction company in the United States, a position he |
2020 Proxy Statement 6 | Superior Industries International, Inc. 7
Proposal No. 1 • Information about Director Nominees
RICHARD J. GIROMINI
Retired Chief Executive
Independent
Age:
Director since: 2018
Board Audit and Compensation and Benefits
Education: Mr. Giromini holds a Master of Science degree in Industrial Management and a Bachelor of Science degree in Mechanical Engineering, both from Clarkson University. He is also a graduate of the Advanced Management Program at the Duke University Fuqua School of Management
Current Directorships:
Former Directorships: Wabash National Corporation (NYSE: WNC) Robbins & Myers (formerly traded NYSE: RBN) | Qualifications: Mr. Giromini brings over eleven years of experience as former Chief Executive Officer of a transportation equipment public company, providing key strategic growth, sales, and operational expertise that led to a doubling of revenues and record operating performance under his leadership. This, combined with his extensive automotive industry experience working as a Tier 1 supplier, including five years in leadership positions within the automotive aluminum wheel industry, make Mr. Giromini a key member of the Board.
Mr. Giromini |
8 | Superior Industries International, Inc.
Proposal No. 1 • Information about Director Nominees
PAUL J. HUMPHRIES
President of High Reliability Solutions, a business group at Flex LTD
Independent
Director since: 2014
Age:
Board Committees: Audit and Compensation and Benefits (Chair)
Education: Mr. Humphries has a B.A. in applied social studies from Lanchester Polytechnic (now Coventry University) and post-graduate certification in human resources management from West Glamorgan Institute of Higher Education.
Current Directorships:
Former Directorships: None | Qualifications: Mr. Humphries has extensive experience in the automotive supplier industry and senior level management experience with multinational public companies, providing valuable expertise in strategy, growth, human resources and global operations. Further, Mr. Humphries has extensive experience in planning, implementing and integrating mergers and acquisitions.
Mr. Humphries is the President of High Reliability Solutions, a business group at Flex LTD (NASDAQ: FLEX) (“Flex”), a globalend-to-end supply chain solutions company that serves the medical, automotive and aerospace and defense markets, a position he has held since 2011. From 2006 to 2011, Mr. Humphries served as Executive Vice President of Human Resources at Flex. In that capacity, he led Flex’s global human resources organization, programs and related functions including global loss prevention, environmental compliance and management systems. Mr. Humphries joined Flex with the acquisition of Chatham Technologies Incorporated in April 2000. While at Chatham Technologies, he served as Senior Vice President of Global Operations. Prior to that, Mr. Humphries held several senior management positions at Allied Signal, Inc. (NYSE: ALD) and its successor Honeywell Inc. (NYSE: HON), BorgWarner Inc. (NYSE: BWA) and Ford Motor Company (NYSE: F). |
20192020 Proxy Statement | 79
Proposal No. 1 • Information about Director Nominees
RANSOM A. LANGFORD
Partner, TPG Growth
Independent
Director since: 2017
Age:
Board Committee: None
Education: Mr. Langford earned a B.A. with Highest Distinction from University of North Carolina, Chapel Hill and an M.B.A. from the Wharton School at University of Pennsylvania.
Current Directorships: Frank Recruitment Group, Inc.,
Former Directorships: Apollo Towers Pte. Ltd., Novolex (f/k/a Hilex Poly Co., LLC), HotSchedules Holdings, Inc. (f/k/a Red Book Connect, LLC), Ride Group Parent, Inc., Ride Group, Inc., vRide Holdings, LLC, NVLX Holdings, LLC | Qualifications: Mr. Langford is a Partner of TPG Growth based in New York, where he leads the platform’s investments in industrial and business services. Mr. Langford has extensive experience as a board member, serving on boards of directors for several TPG portfolio companies, including Frank Recruitment Group,
Prior to joining TPG in 2009, Mr. Langford was a Managing Director and Partner with J.H. Whitney & Co., where he was a senior member of the investment team responsible for investing several private equity partnerships and was a member of the firm’s Investment Committee. Prior to his tenure at J.H. Whitney, Mr. Langford was an Associate at Brentwood Associates, representing a number of portfolio companies as a member of the investment team. Mr. Langford has also spent time as an analyst in the Mergers & Acquisitions group at New York-based investment bank Donaldson, Lufkin & Jenrette. |
810 | Superior Industries International, Inc.
Proposal No. 1 • Information about Director Nominees
JAMES S. MCELYA
Retired Chairman of the Board of Directors, Affinia Group Intermediate Holdings Inc.; Retired Chairman of the Board of Directors and Chief Executive Officer of Cooper Standard Holdings Inc.
Independent
Director since: 2013
Age:
Board Committees: Compensation and Benefits
Education: Mr. McElya attended West Chester University.
Current Directorships: None.
Former Directorships: Cooper Standard Holdings Inc. (NYSE: CPS); Affinia Group Intermediate Holdings Inc. | Qualifications: Mr. McElya has expertise in the automotive industry as well as leadership experience, including his services as the former Chief Executive Officer of a public company. Mr. McElya also provides substantial experience with mergers and acquisitions in the automotive industry – Mr. McElya was instrumental in bringing Cooper Standard from a $1.5 billion business in 2004 to over $3.0 billion when he retired as CEO in 2012. This growth was predominantly a result of a comprehensive mergers and acquisitions strategy. He contributes leadership and strategy experience combined with operation and management expertise.
Mr. McElya was Chairman of the Board of Directors of Affinia Group Intermediate Holdings Inc. until August 2016, when the company was sold. Until 2013, Mr. McElya was Chairman of the Board of Directors and, until 2012, Chief Executive Officer of Cooper Standard Holdings Inc. Previously, he had served as President of Cooper-Standard Automotive (NYSE: CSA) (“Cooper Standard”), the principal operating company of Cooper Standard Holdings, and as corporate vice president of Cooper Tire & Rubber Company, the parent company of Cooper Standard, until 2004. Mr. McElya has also served as President of Siebe Automotive Worldwide and over a22-year period, held various senior management positions with Handy & Harman. Mr. McElya is a past chairman of the Motor Equipment Manufacturers Association (MEMA) and a past chairman of the board of directors of the Original Equipment Supplier Association (OESA). |
20192020 Proxy Statement | 911
Proposal No. 1 • Information about Director Nominees
TIMOTHY C. MCQUAY
Independent
Director since: 2011
Age:
Board Committees: None
Education: Mr. McQuay received an A.B. degree in economics from Princeton University and an M.B.A. degree in finance from the University of California at Los Angeles.
Current Directorships: None.
Former Directorships: Keystone Automotive Industries, Inc. (Chair, Audit Committee) (formerly NASDAQ: KEYS); Meade Instruments Corp. (NASDAQ: MEAD) (Chairman); Perseon Corp. (fka BSD Medical Corp.) (NASDAQ: PRSN) (Chairman) | Qualifications: Mr. McQuay provides, among other qualifications, his extensive business and financial experience and his public company board experience, which includes extensive experience on compensation and audit committees. In addition, having served on the Board since 2011 and as Interim Executive Chairman of the Board from December 2018 to January 2019, Mr. McQuay has a deep knowledge of Superior’s business, which he can utilize as our
Mr. McQuay brings with him nearly 40 years of financial advisory experience to the Board. From December 2018 to May 2019 he served as Superior’s Interim Executive Chairman of the Board. From November 2011 until his retirement in December 2015, he served as Managing Director, Investment Banking with Noble Financial Capital Markets, an investment banking firm. Previously, he served as Managing Director, Investment Banking with B. Riley & Co., an investment banking firm, from September 2008 to November 2011. From August 1997 to December 2007, he served as Managing Director – Investment Banking at A.G. Edwards & Sons, Inc. From May 1995 to August 1997, Mr. McQuay was a Partner at Crowell, Weedon & Co. and from October 1994 to August 1997, he also served as Managing Director of Corporate Finance. From May 1993 to October 1994, Mr. McQuay served as Vice President, Corporate Development with Kerr Group, Inc., a plastics manufacturing company. From May 1990 to May 1993, Mr. McQuay served as Managing Director of Merchant Banking with Union Bank. |
1012 | Superior Industries International, Inc.
Proposal No. 1 • Information about Director Nominees
ELLEN B. RICHSTONE
Retired Chief Financial Officer, Rohr Aerospace
Independent
Director since: 2016
Age:
Board Committees: Audit (Chair) and Nominating and Corporate Governance
Education: Ms. Richstone received a bachelor’s degree from Scripps College in Claremont California and holds graduate degrees from the Fletcher School of Law and Diplomacy at Tufts University. Ms. Richstone also completed the Advanced Professional Certificate in Finance at New York University’s Graduate School of Business Administration and attended the Executive Development program at Cornell University’s Business School. Ms. Richstone holds an Executive Master’s Certification in Director Governance from the American College of Corporate Directors – Gold Level and in 2018 was recognized as an NACD Board Leadership Fellow, the highest award given by the NACD for Corporate Governance.
Current Directorships: eMagin Corp. (NYSE: EMAN); Orion Energy Systems, Inc. (NASDAQ: OESX)
Former Directorships: Parnell Pharmaceutical Inc.; American Power Conversion (formerly traded NASDAQ: APCC); BioAmber Inc. (NYSE: BIOA); The Oneida Group (fka EveryWare Global) | Qualifications: Ms. Richstone provides, among other qualifications, her extensive business and financial experience as Chief Financial Officer of public and private companies ranging in size up to $4 billion in revenue over a24-year period and her public company board experience, which includes being awarded the first annual Distinguished Director Award from the American College of Corporate Directors.
Ms. Richstone has served as the Chief Financial Officer of several public and private companies between 1989 and 2012, including Rohr Aerospace, a Fortune 500 company. From 2002 to 2004, Ms. Richstone was the President and Chief Executive Officer of the Entrepreneurial Resources Group. From 2004 until its sale in 2007, Ms. Richstone served as the financial expert on the board of directors of American Power Conversion, an S&P 500 company. Ms. Richstone currently sits on the board of the National Association of Corporate Directors (NACD) in New England, as well as othernon-profit organizations. In January 2018, Ms. Richstone was named as an NACD Board Leadership Fellow, signifying that she has demonstrated her commitment to the highest level of leadership in the boardroom. |
20192020 Proxy Statement | 1113
Proposal No. 1 • Information about Director Nominees
FRANCISCO S. URANGA
Corporate Vice President and Chief Business Operations Officer for Latin America, Foxconn Electronics, Inc.
Independent
Director since: 2007
Age:
Board Committees: Compensation and Benefits and Nominating and Corporate Governance
Education: Mr. Uranga earned a B.B.A. in Marketing from the University of Texas at El Paso and a Diploma in English as a Second Language from Brigham Young University.
Current Directorships: Corporación Inmobiliaria Vesta; Tenet Hospitals, the Hospitals of Providence Transmountain Campus
Former Directorships: None | Qualifications: Given the Company’s significant operations in Mexico, Mr. Uranga’s expertise in developing and managing operations in that country is a valuable contribution to the Board.
Mr. Uranga is Corporate Vice President and Chief Business Operations Officer for Latin America at Taiwan-based Foxconn Electronics, Inc., the largest electronic manufacturing services company in the world, a position he has held since 2005. In this position, Mr. Uranga is responsible in Latin America for government relations, regulatory affairs, incentives, tax and duties, legal, customs, immigration and land and construction issues. From 1998 to 2004, he served as Secretary of Industrial Development for the state government of Chihuahua, Mexico. Previously, Mr. Uranga was Deputy Chief of Staff and then Chief of Staff for Mexican Commerce and Trade Secretary Herminio Blanco, where he actively participated in implementing the North American Free Trade Agreement and in negotiating key agreements for the Mexican government as part of the country’s trade liberalization. Earlier, Mr. Uranga was Sales and Marketing Manager for American Industries International Corporation. |
Each director nominee must receive the affirmative vote of a plurality of the votes cast to be elected, meaning that the eightnine persons receiving the largest number of “yes” votes will be elected as directors. You may vote in favor of any or all of the nominees or you may withhold your vote as to any or all of the nominees. The nominees receiving the highest number of affirmative votes of the shares entitled to vote at the meeting will be elected as directors. Proxies may not be voted for more than the eightnine directors and stockholders may not cumulate votes in the election of directors. In an uncontested election,
our Corporate Governance Guidelines provide that any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation following certification of the stockholder vote. The Nominating and Corporate Governance Committee and the Board must then decide whether or not to accept the tendered resignation, culminating with a public disclosure explaining the Board’s decision and decision-making process.
We believe each of our eightnine director nominees has the professional and leadership experience, industry knowledge, commitment, diversity of skills and ability to work in a collaborative manner necessary to execute our strategic plans. We believe the election of
the Company’s eightnine nominees named in Proposal No. 1 and on the proxy card best positions the Company to deliver value to and represent the interests of all Company stockholders.
The Board unanimously recommends a vote “FOR” its eightnine nominees for election as Director.Director named in this Proxy Statement and on the proxy card. Proxies solicited by the Board will be voted “FOR” all of Superior’s eightnine nominees unless stockholders specify a contrary vote.
1214 | Superior Industries International, Inc.
Board Structure and Committee Composition • Board Structure and Leadership
BOARD STRUCTURE AND COMMITTEE COMPOSITION
Board Structure and Leadership
The Board is currently led by Timothy C. McQuay, our interimFollowing the appointment of Majdi Abulaban as the President and Chief Executive ChairmanOfficer of the Board. AtCompany, the present time,Board separated the roles of Chairman and principal executive officer are combined. The Board believes that this combined role is in the best interest of the Company’s stockholders considering Mr. McQuay’s tenure as a director since 2011, his familiarity with the Company’s key businessesBoard and the temporary nature of the combined role until a permanent Chief Executive Officer, is identified. However, once the Company completes its search for a new Chief Executive Officer,with Timothy C. McQuay serving as Chairman of the Board expects to again separate the roles of Chairman and principal executive officer.since May 15, 2019. The Board believes separating the roles of Chairman and Chief Executive Officer allows our Chief Executive Officer to focus on developing and implementing the Company’s strategic business plans and managing the Company’sday-to-day business operations and allows our Chairman to lead the Board in its oversight and advisory roles. As a result of the many responsibilities of the Board and the significant amount of time and effort required by
each of the Chairman and Chief Executive Officer to perform their respective duties, the Company believes that having separate persons in these roles enhances the ability of each to
discharge those duties effectively and enhances the Company’s prospects for success.
Superior’s Corporate Governance Guidelines provide the Board with flexibility to select the appropriate leadership structure depending on then-current circumstances. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of Superior’s stockholders. Given the temporary nature of the Executive Chairman role,If the Board has not appointedappoints a Lead Director. However, if the Board determines to combine the roles of Chairman and Chief Executive Officer on a more permanent basis,Chairperson that is an independent director, pursuant to the terms of Superior’s Corporate Governance Guidelines, the Chairperson also serves as the “Lead Director.” If the Chairperson is not an independent director, on an annual basis, one of the independent directors willis designated by a majority of the independent directors to be named as the “LeadLead Director.”
On an annual basis, the Board, with the assistance of the Nominating and Corporate Governance Committee, makes a determination as to the independence of each director considering the current standards for “independence” established by the New York Stock Exchange (the “NYSE”), additional criteria set forth in Superior’s Corporate Governance Guidelines and consideration of any other material relationship a director may have with Superior as disclosed in annual director and officer questionnaires. Our Corporate Governance Guidelines provide that a majority of the Board and all members of the Audit, Compensation and Benefits and Nominating and Corporate Governance Committees of the Board will be independent.
On February 28, 2019, theThe Board has determined that all of its current directors are independent under these standards, except for Timothy C. McQuay,Majdi Abulaban, our interimChief Executive Chairman of the Board.Officer. All members of each of Superior’s Audit, Compensation and Benefits and Nominating and Corporate Governance Committees are independent directors. In addition, upon recommendation of the Nominating and Corporate Governance Committee, the Board has determined that the members of the Audit Committee and Compensation and Benefits Committee meet the additional independence criteria required for audit committee and compensation committee membership under the applicable NYSE listing standards.
20192020 Proxy Statement | 1315
Board Structure and Committee Composition • Board Composition
The following matrix provides information regarding the members of our Board, including certain types of knowledge, skills, experiences and attributes possessed by one or more of our directors which our Board believes are relevant to our business or industry. The matrix does not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not
mean that a director does not possess it. In addition, the absence of a particular type of knowledge, skill, experience, or attribute with respect to any of our directors does not mean the director in question is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill and experience listed below may vary among members of the Board.
M. Bruynesteyn | 55 | 4 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Giromini | 66 | 1 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
P. Humphries | 64 | 5 | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Langford | 47 | 2 | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. McElya | 71 | 5 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T. McQuay | 67 | 7 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
E. Richstone | 67 | 3 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F. Uranga | 55 | 12 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● |
M. Abulaban | 56 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||
M. Bruynesteyn | 56 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||
R. Giromini | 67 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||
P. Humphries | 65 | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||||||
R. Langford | 48 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||||||||||||
J. McElya | 72 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||
T. McQuay | 68 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||
E. Richstone | 68 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||||||||
F. Uranga | 57 | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● |
INDEPENDENCE | TENURE | |||
The board has determined that all director nominees, other than Mr. | The | |||
1416 | Superior Industries International, Inc.
Board Structure and Committee Composition • Meetings and Attendance
During 2018,2019, the Board held nine meetings. During this period, all of the incumbent directors attended at least 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by all Committees of the Board on which each such director served, during the period for which each such director served. All of Superior’s directors attended last year’s annual meeting of stockholders on May 7, 2018,April 23, 2019, with the exception of Mr. Giromini,Langford and Mr. Abulaban, who was not appointed to the Board until August 27, 2018.May 15, 2019. Superior’s
directors are not
required, but are invited, to attend the annual meeting of stockholders.
The Board and its Committees also consulted informally with management from time to time and acted at various times by written consent without a meeting during 2018.2019. Additionally, the independent directors met in executive session regularly without the presence of management. Mr. McQuay, in his capacity as Chairman of the Board, presided over executive sessions of the independent directors in 2018.2019.
Our Nominating and Corporate Governance Committee seeks to build and maintain an effective, well-rounded, financially literate and diverse Board that represents all of our stockholders.
Process for Identification and Review of Director Candidates to Join the Board
Identifying and recommending individuals for nomination, election orre-election to our Board is a principal responsibility of our Nominating and Corporate Governance Committee. This Committee carries out this function through an ongoing, year-round process, which includes the annual Board and Committee evaluation process. Each director and director candidate is evaluated by the Nominating and Corporate Governance Committee based on his or her individual merits, taking into account Superior’s needs and the composition of our Board.
To assist in its evaluation of directors and director candidates, the Nominating and Corporate Governance Committee looks for certain experiences, qualifications, attributes and skills that would be beneficial to have represented on the Board and on our committees at any particular point in time. Nominees for the Board should be committed to enhancing long-term stockholder value and must possess relevant experience and skills, good business judgment and personal and professional
integrity. Among the experiences, qualifications, attributes and skills considered by the Nominating and Corporate Governance Committee are senior executive experience, automotive industry experience, financial experience, public company board experience, operational management, international business, capital markets and/or banking experience, legal and regulatory compliance and diversity. The Nominating and Corporate Governance Committee seeks diversity of race, ethnicity, gender, age, education, cultural background, business experience, viewpoints and personal background,viewpoints, and diversity of skills in finance, marketing, international business, financial reporting and other areas that are expected to contribute to an effective Board.
In recommending candidates for election to the Board, the Nominating and Corporate Governance Committee considers nominees recommended by directors, officers, employees, stockholders and others, using the same criteria to evaluate all candidates. The Nominating and Corporate Governance Committee reviews each candidate’sStockholder recommendations of director
20192020 Proxy Statement | 1517
Board Structure and Committee Composition • Director Selection
nominees should be sent to the attention of our corporate secretary at the following address: Superior Industries International, Inc., Attention: Corporate Secretary, 26600 Telegraph Rd., Southfield, MI 48033. The Nominating and Corporate Governance Committee reviews each candidate’s qualifications, including whether a candidate possesses any of the specific qualities and skills desirable in certain members of the Board. The Nominating and Corporate Governance Committee
may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees.
Withdrawal of Nomination of Director Candidate by D.C. Capital Partners, L.P.
On May 5, 2020, the Company entered into a Nomination Withdrawal Agreement (the “Nomination Withdrawal Agreement”) with D.C. Capital Partners, L.P., a Delaware limited partnership (“D.C. Capital”), that contemplates the appointment of Raynard D. Benvenuti to the Board immediately following the Annual Meeting, but no later than July 10, 2020.
Pursuant to the Nomination Withdrawal Agreement and effective as of the Effective Time (as defined below), D.C. Capital agreed to irrevocably withdraw its notice of nomination dated January 24, 2020, as supplemented on February 3, 2020 (collectively, the “Nomination Letter”), notifying the Company as to D.C. Capital’s nomination of Mr. Benvenuti for election to the Board at the Annual Meeting, and, accordingly, its nomination of Mr. Benvenuti for election to the Board at the Annual Meeting and D.C. Capital further agreed, on behalf of itself and its affiliates, including D.C. Capital Partners, L.P., D.C. Capital Advisors, Limited, D.C.R. Partners, L.P., and Douglas L. Dethy, that (i) it will not submit any director nominations, stockholder proposals, and/or other business in connection with the Annual Meeting, and (ii) it will, subject to the satisfaction of the Voting Conditions (as defined below) as reasonably determined by D.C. Capital, cause all of its shares of the Company’s Common Stock beneficially owned, directly or indirectly, by it and/or its affiliates to be present at the Annual Meeting for quorum purposes and to be voted thereat on the Company’s proxy card or voting instruction form (A) in favor of the election to the Board of the director nominees recommended for election by the Board and against the removal of any directors whose removal is not recommended by the Board, and (B) against any nominees to serve on the Board that have not been recommended by the Board.
For purposes of the Nomination Withdrawal Agreement, the term “Effective Time” shall be deemed to occur immediately following (i) the Company’s issuance of a press release, substantially in the form previously reviewed by D.C. Capital, announcing the Board’s intention to appoint Mr. Benvenuti to the Board, and (ii) the execution of anon-disclosure agreement between the Company and Mr. Benvenuti (the “NDA”). For purposes of the Nomination Withdrawal Agreement, the term “Voting Conditions” shall mean (i) the Board immediately commences its onboarding process for Mr. Benvenuti, including to provide access to Mr. Benvenuti of all information typically shared with an incoming director during the onboarding process and information reasonably requested by him, but excluding any information to the extent required to preserve the attorney client privilege or attorney work product, and (ii) in this Proxy Statement, the Company discloses Mr. Benvenuti as a director to be appointed to the Board on the earlier of (A) immediately following the Annual Meeting or (B) July 10, 2020, and, subject to the Board’s customary review and confirmation of his independence to serve on the committee, indicating that Mr. Benvenuti will also be appointed to the Nominating and Corporate Governance Committee.
Pursuant to the Nomination Withdrawal Agreement, the Company agreed that, within ten (10) days of the Effective Time, it will reimburse D.C. Capital for its reasonable and documented fees and expenses incurred in connection with the matters related to the preparation of the Nomination Letter and related correspondence with the Company, D.C. Capital’s engagement with the Company, and the preparation of the Nomination Withdrawal Agreement in an amount not to exceed, in the aggregate, $75,000.
The foregoing description of the Nomination Withdrawal Agreement is qualified in its entirety by reference to the complete text of the Nomination Withdrawal Agreement which is filed as Exhibit 10.1 to the Company’s Current Report on Form8-K filed with the SEC on May 7, 2020 and incorporated herein by reference.
Withdrawal of Nomination of Director Candidate by GAMCO Asset Management Inc.
On May 6, 2020, the Company was informed by GAMCO Asset Management Inc. (“GAMCO”) that it had irrevocably withdrawn its notice of nomination dated January 23, 2020, notifying the Company as to GAMCO’s nomination of Walter M. Schenker for
Any stockholder entitled to vote in the election of directors generally may nominate one or more persons for election as director at a meeting by providing written notice of such stockholder’s intent to make such nomination or nominations to the Corporate Secretary of the Company not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to theone-year18 | anniversary of the date of the preceding year’s annual meeting. With respect to an election to be held at a special meeting of stockholders for the election of directors, stockholder nominations must be made not later than the close of business on the later of the 90th day prior to such special meeting nor earlier than the close of business on the 120th day prior to such special meeting, or no later than the close of business on the 10th day following the date a public announcement has been made of the date of the special meeting and of the nominees proposed by the Board to be elected or reelected at such meeting. When submitting candidates for nomination to be elected at Superior’s annual meeting of stockholders, the stockholder must follow the notice procedures and provide the information required by the Bylaws. The notice must be submitted in writing to the following address: Superior Industries International, Inc., Attn: Corporate Secretary, 26600 Telegraph Rd., Southfield, MI 48033. The recommendation must include the same information as is specified in the Bylaws for stockholder nominees to be considered at an annual meeting, including but not limited
Board Structure and Committee Composition • Director Selection
election to the following:
|
The chairperson of the meeting may refuse to acknowledge the nomination of any person not made in compliance with these procedures, and the nomination shall be void.Annual Meeting.
Proxy Access Bylaw
In October 2016, we adoptedOur Bylaws include a proxy access provision in our Bylaws. Itthat allows a stockholder, or group of no more than 20 eligible stockholders, that has maintained continuous ownership of 3% or more of our common stock for at least three years to include in our proxy materials for an annual meeting of stockholders a number of director nominees for up to 20% of the directors then in office as of the last day on which a notice of proxy access nomination may be delivered to the Company (if such an amount is not a
16 | Superior Industries International, Inc.
Board Structure and Committee Composition • Stockholder Nominations
whole number, then the closest whole number below 20%). An eligible stockholder must maintain the 3% ownership requirement at least until the annual meeting at which the proponent’s nominee will be considered. Proxy access nominees who withdraw, become ineligible or unavailable or who do not receive at least a 25% vote in favor of election will be ineligible as a nominee for the following two years. However, if any stockholder
notifies us of its intent to nominate one or more director nominees under the advance notice provision in our Bylaws, we are not required to include any such nominee in our proxy statement for the annual meeting.
The proponent is required to provide the information about itself and the proposed nominee(s) that is
specified in the proxy access provision of our Bylaws. The required information must be in writing and provided to the Corporate Secretary of the Company not less than 90 days nor more than 120 days prior to the anniversary of the date that the Company first distributed its proxy statement to stockholders for the immediately preceding annual meeting of stockholders. We are not required to include any proxy access nominee in our proxy statement if the nomination does not comply with the proxy access requirements of our Bylaws.
Any stockholder considering utilizing proxy access should refer to the specific requirements set forth in our Bylaws.
20192020 Proxy Statement | 1719
Board Structure and Committee Composition • Committees of the Board
Superior has three standing committees: the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation and Benefits Committee. Each of these Committees has a written charter approved by the Board. A copy of each charter can be found by clicking on “Corporate Governance” in the “Investor Relations” section of our website at www.supind.com. This website address is included for reference only. The information contained on the Company’s website is not incorporated by reference into this Proxy Statement. The information below includes the membership for each of the standing committees since January 1, 2019.
AUDIT COMMITTEE | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | |||
Members: Ellen B. Richstone, Chairperson Michael R. Bruynesteyn Richard J. Giromini Paul J. Humphries
Meetings in |
Michael R. Bruynesteyn, Chairperson James S. McElya Ellen B. Richstone Francisco S. Uranga
Members from May 15, 2019 to March 15, 2020: Timothy C. McQuay, Chairperson Michael R. Bruynesteyn James S. McElya Ellen B. Richstone Francisco S. Uranga Members as of March 15, 2020 James S. McElya, Chairperson Michael R. Bruynesteyn Ellen B. Richstone Francisco S. Uranga Meetings in
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Independence:
The Board has determined that each member of the Audit Committee is “independent” under the NYSE listing standards and satisfies the other requirements under the NYSE listing standards and SEC rules regarding audit committee membership, that each of Ms. Richstone and Messrs. Bruynesteyn and Giromini qualifies as an “audit committee financial expert” and that each member of the Audit Committee satisfies the “financial literacy” requirements of the NYSE listing standards.
Key Responsibilities:
The Audit Committee is responsible for reviewing the financial information that will be provided to stockholders and others, reviewing the system of internal controls which management and the Board have established, appointing, retaining and overseeing the performance of the independent registered public accounting firm, overseeing Superior’s accounting and financial reporting processes and the audits of Superior’s financial statements, andpre-approving audit and permissiblenon-audit services provided by the independent registered public accounting firm.
The report of the Audit Committee is on page | Independence:
Each member of this Committee is an independent director under applicable NYSE listing standards.
Key Responsibilities:
The Nominating and Corporate Governance Committee |
1820 | Superior Industries International, Inc.
Board Structure and Committee Composition • Committees of the Board
COMPENSATION AND BENEFITS COMMITTEE | and that it provides appropriate rewards and incentives for management and employees, including administration of the Company’s 2018 Equity Plan (as hereinafter defined) and review of compensation-related risk management. For 2019, the Compensation and Benefits Committee performed these oversight responsibilities and duties by, among other things, directing a review of our compensation practices and policies generally, including conducting an evaluation of the design of our executive compensation program, in light of our risk management policies and programs. Additional information regarding the Compensation and Benefits Committee’s risk management review appears in the “Compensation Philosophy and Objectives” portion of the “Compensation Discussion and Analysis” section of this Proxy Statement.
On an annual basis, the Compensation and Benefits Committee reviews and makes recommendations to the Board regarding the compensation ofnon-employee directors,non-employee chairpersons, lead directors and Board committee members. In
The Compensation and Benefits Committee reviews the Company’s CEO pay ratio disclosure, CEO succession planning and management development.
For additional description of the Compensation and Benefits Committee’s processes and procedures for consideration and determination of executive officer compensation, see the “Compensation Discussion and Analysis” section of this Proxy Statement. The report of the Compensation and Benefits Committee is on page | |||
James S. McElya, Chairperson Paul J. Humphries Ransom A. Langford Francisco S. Uranga
Members as of March 15, 2020: Paul J. Humphries, Chairperson Richard J. Giromini James S. McElya Francisco S. Uranga Meetings in
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Independence:
The Board has determined that each member of the Compensation and Benefits Committee is “independent” under the NYSE listing standards and is an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, referred to as the Internal Revenue Code, and is a“non-employee director” within the meaning of Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”).
Key Responsibilities:
The Compensation and Benefits Committee’s responsibility is to review the performance and development of Superior’s management in achieving corporate goals and objectives and to assure that Superior’s executive officers are compensated effectively in a manner consistent with Superior’s strategy, competitive practice, sound corporate governance principles and stockholder interests. The Compensation and Benefits Committee reviews and recommends to the Board the compensation of our Chief Executive Officer and reports annually to the Board on the Chief Executive Officer succession plan. It also reviews and approves Superior’s compensation to other officers and key employees based upon compensation and benefit proposals presented to the Compensation and Benefits Committee by the Chief Executive Officer and our Human Resources Department.
The Compensation and Benefits Committee’s responsibilities and duties include an annual review and approval of Superior’s compensation strategy to ensure that it promotes stockholder interests and supports Superior’s strategic and tactical objectives, |
20192020 Proxy Statement | 1921
Corporate Governance Principles and Board Matters • Corporate Governance Principles
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
Superior is committed to implementing and maintaining sound corporate governance principles. Key information regarding Superior’s corporate governance initiatives can be found on our website, including Superior’s Corporate Governance Guidelines, Superior’s Code of Conduct and the charter for each Committee of the Board. The
corporate governance pages can be found by clicking on “Corporate Governance” in the “Investor Relations” section of our website at www.supind.com. This website address is included for reference only. The information contained on the Company’s website is not incorporated by reference into this Proxy Statement.
Corporate Governance Principles
Superior is committed to excellence in corporate governance and maintains clear policies and practices that promote good corporate governance, including:
2022 | Superior Industries International, Inc.
Corporate Governance Principles and Board Matters • Annual Board and Committee Self-Assessments
Annual Board and Committee Self-Assessments
Each year, the directors undertake a self-assessment of the Board and each Committee on which they serve that elicits feedback on the performance and effectiveness of the Board and its Committees. As part of this self-assessment, the directors are asked to consider the Board’s role, relations with management, composition and meetings. Each Committee is asked to consider its role and the responsibilities articulated in the Committee charter,
the composition of the Committee and the Committee meetings. Each Committee and the full Board reviews such self-assessments and considers areas that can benefit from change. These opportunities, as well as proposed action plans, are shared with the full Board and, if supported, the plan is implemented andre-assessed at the time of the next annual self-assessment.
Our Board, in coordination with the Compensation and Benefits Committee, oversees and is actively engaged in Chief Executive Officer and senior management succession planning, which is reviewed at least annually. As part of its succession planning process, the Board reviews the senior management team’s experience, skills, competence and potential,
in order to assess which executives have the ability to develop the attributes that the Board believes are necessary to lead and achieve the Company’s goals. Directors personally assess candidates by engaging with potential successors at Board and Committee meetings, as well as less formal settings.
Following Mr. Stebbins’ retirement in December 2018, the Board appointed Timothy C. McQuay to serve as interim Executive Chairman of the Board. The Board
believes that Mr. McQuay, who has served on the Board since November 2011, is well-positioned to lead the Company while the Board actively searches for a new Chief Executive Officer. The Board has formed an interim CEO Succession Planning Committee (the “Special Committee”), comprised of Messrs. McQuay, McElya and Giromini, to address short-term and emergency succession planning. The Board is overseeing the search process and is working to find the individual with the right experience, vision and track record to serve as the next Chief Executive Officer. The Special Committee will remain in place until the next Chief Executive Officer is in place and an emergency succession plan has been developed, at which point the responsibility over succession planning will return to the Compensation and Benefits Committee.
The Role of the Board in Risk Oversight
Superior’s management is responsible forday-to-day risk management activities. The Board, acting directly and through its Committees, is responsible for the oversight of Superior’s risk management. Superior and the Board approach risk management by integrating and communicating strategic planning, operational decision-making and risk oversight. The Board commits extensive time and effort every year to discussing and agreeing upon Superior’s strategic plan, and it reconsiders key elements of the strategic plan as significant events and opportunities arise during the year. As part of the review of the strategic plan, as well as in evaluating events and opportunities that occur during the year, the Board and management focus on the primary success factors and risks for Superior. With such oversight of the Board, Superior has implemented practices and programs designed to help manage the risks to which
Superior is exposed in its business and to align risk-taking appropriately with its efforts to increase stockholder value. Superior’s internal audit department provides both management and the Audit Committee, which oversees our financial and risk management policies, with ongoing assessments of Superior’s risk management processes and system of internal control and the specific risks facing Superior.
While the Board has primary responsibility for oversight of the Company’s risk management, the Board’s standing Committees support the Board by regularly addressing various risks in their respective areas of oversight. Specifically, the Audit Committee identifies and requires reporting on areas perceived as potential risks to Superior’s business (including privacy and data security). As provided in its Committee charter, the Audit Committee reports
2019 Proxy Statement | 21
Corporate Governance Principles and Board Matters • The Role of the Board in Risk Oversight
regularly to the Board. As part of the overall risk oversight framework, other Committees of the Board also oversee certain categories of risk associated with their respective areas of responsibility. For example, the Compensation and Benefits Committee oversees compensation-related risk management, as discussed further under “Compensation and Benefits Committee” and in the “Compensation Philosophy and Objectives” portion of the “Compensation Discussion and Analysis” section of this proxy.
Each Committee reports regularly to the full Board on its activities. In addition, the Board participates in
regular discussions among the Board and with Superior’s senior management of many core subjects, including strategy, operations (such as information technology and cybersecurity), finance and legal and
2020 Proxy Statement | 23
Corporate Governance Principles and Board Matters • The Role of the Board in Risk Oversight
public policy matters, in which risk oversight is an inherent element. The Board believes that the leadership structure described above under “Board Leadership Structure” facilitates the Board’s oversight
of risk management because it allows the Board, working through its Committees, including the independent Audit Committee, to participate actively in the oversight of management’s actions.
Stockholder Communications with the Board
Stockholders and third parties may communicate with Superior’s Board, or any individual member or members of the Board, through Superior’s Corporate Secretary at Superior Industries International, Inc., 26600 Telegraph Rd., Southfield, MI 48033, with a request to forward the communication to the intended recipient or recipients. In general, any stockholder
communication delivered to Superior for forwarding to the Board or specified director or directors will be forwarded in accordance with the stockholder’s instructions. However, the Company reserves the right not to forward to directors any abusive, threatening or otherwise inappropriate materials.
Corporate Governance Guidelines
The Board believes in sound corporate governance practices and has adopted formal Corporate Governance Guidelines to enhance its effectiveness. Our Board has adopted these Corporate Governance Guidelines in order to ensure that it has the necessary authority and practices in place to fulfill its role of management oversight and monitoring for the benefit of our stockholders. The Corporate Governance Guidelines set forth the practices our Board will follow with respect to, among other areas, director qualification and independence, Board and
Committee meetings, involvement of and access to management, and Chief Executive Officer performance evaluation and succession planning. The Corporate Governance Guidelines can be found by clicking on “Corporate Governance” in the “Investor Relations” section of our website at www.supind.com. This website address is included for reference only. The information contained on the Company’s website is not incorporated by reference into this Proxy Statement.
Our Code of Conduct is included on our website, www.supind.com, under “Corporate Governance” in the “Investor Relations” tab, which, among others, applies to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. This website address is included for reference only. The
information contained on the Company’s website is not incorporated by reference into this Proxy Statement. Upon request to Superior Industries International, Inc., Investor Relations, 26600 Telegraph Rd., Southfield, MI 48033, copies of our Code of Conduct are available, without charge.
2224 | Superior Industries International, Inc.
Compensation of Directors • General
Superior uses a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on the Board. Superior does not provide any perquisites to itsnon-employee Board members. In setting the compensation ofnon-employee directors, Superior considers the significant amount of time that the Board members expend in fulfilling their duties to Superior as well as the experience level required to serve on the Board. The Board, through its Compensation and Benefits Committee, annually reviews the compensation arrangements and compensation policies fornon-employee directors,non-employee chairpersons, lead directors and Board Committee members. The
Compensation and Benefits Committee recently reviewed in April 20182019 market data compiled by Willis Towers Watson to assist in assessing totalnon-employee director compensation. Pursuant to our Corporate Governance Guidelines, in recommending director compensation, our Compensation and Benefits Committee is guided by three goals: (i) compensation should fairly pay directors for work required in a company of Superior’s size and scope; (ii) compensation should align directors’ interests with the long-term interests of Superior’s stockholders and (iii) the structure of the compensation should be clearly disclosed to Superior’s stockholders.
Ournon-employee director cash compensation program during 20182019 consisted of the following:
Under the Superior Industries International, Inc. 2018 Equity Incentive Plan (the “2018 Equity Plan”), members of the Board who were not also Superior employees were granted 6,87316,779 RSUs on April 19, 2018 (other than Mr. Hockema, who retired from23, 2019 which had a grant date fair value of $100,003. Pursuant to the Board asterms of the date of our 2018 annual meeting of stockholders, and Mr. Giromini, who began serving on the Board on August 27, 2018 and didEquity Plan,non-employee directors may not receive an RSU award at that time).more than 20,000 RSUs annually. All RSUs granted in 2018to
non-employee directors in 2019 vest in full on the first anniversary of the applicable grant date.
Non-employee directors typically do not receive additional forms of remuneration, including perquisites or benefits, but are reimbursed for their expenses in attending meetings. There are no cash fees payable for attendance at Board or Committee meetings.
20192020 Proxy Statement | 2325
Compensation of Directors • 20182019 Total Compensation
The following table provides information as to compensation for services of thenon-employee directors during 2018.2019, other than Mr. McQuay. Mr. McQuay served as anon-employee director and asnon-executive Chairman of the Board except from December 12, 2018 to May 15, 2019, when he served as interim Executive Chairman of the Board and assumed the duties of principal executive officer of the Company. The cash fees and 2019 RSU award paid to Mr. McQuay for his services as anon-employee director are reported in the Summary Compensation Table.
Director Compensation Table
Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | Total ($) | ||||||||||||||||||||||||
Michael R. Bruynesteyn | $ | 78,000 | $ | 100,002 | — | $ | 178,002 | $ | 78,625 | $ | 100,003 | — | $ | 178,628 | ||||||||||||||||||
Richard J. Giromini | $ | 22,806 | — | — | $ | 22,806 | $ | 72,000 | $ | 100,003 | — | $ | 172,003 | |||||||||||||||||||
Jack A. Hockema(5) | $ | 33,125 | — | — | $ | 33,125 | ||||||||||||||||||||||||||
Paul J. Humphries | $ | 80,000 | $ | 100,002 | — | $ | 180,002 | $ | 80,000 | $ | 100,003 | — | $ | 180,003 | ||||||||||||||||||
Ransom A. Langford(6) | — | — | — | — | ||||||||||||||||||||||||||||
Ransom A. Langford(4) | — | — | — | — | ||||||||||||||||||||||||||||
James S. McElya | $ | 76,000 | $ | 100,002 | — | $ | 176,002 | $ | 76,000 | $ | 100,003 | — | $ | 176,003 | ||||||||||||||||||
Timothy C. McQuay(7) | — | — | — | — | ||||||||||||||||||||||||||||
Ellen B. Richstone | $ | 81,000 | $ | 100,002 | — | $ | 181,002 | $ | 81,000 | $ | 100,003 | — | $ | 181,003 | ||||||||||||||||||
Francisco S. Uranga | $ | 74,000 | $ | 100,002 | — | $ | 174,002 | $ | 74,000 | $ | 100,003 | $ | 49,861 | $ | 174,003 |
(1) | For a description of the annualnon-employee director retainer fees and retainer fees for chair positions and for service as Chairperson of the Board, see the disclosure above under |
(2) | Reflects the aggregate grant date fair value of RSUs granted to eachnon-employee director computed in accordance with FASB ASC 718 and based on the fair market value of Superior’s common stock on the date of |
(3) | This value is the annualized change in the actuarial present value ofnon-employee director benefits under the Salary Continuation Plan, which is a frozen plan covering certain directors. The discount rate used in the present value calculation was |
(4) | Mr. |
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Non-Employee Director Stock Ownership
The Board has adopted aan amended and restated stock ownership policy (the “Stock Ownership Policy”) for members of the Board. The policyStock Ownership Policy requires eachnon-employee director to own shares of Superior’s common stock having a value equal to at least three times thenon-employee director’s regular annual cash retainer, with a three-year period to attain that ownership level. All of ourFor 2019, allnon-employee directors arewere in compliance with this stock ownership policy. As of the most recent measurement date (January 2, 2019), Messrs. Humphries, McElya, McQuay and Uranga
have met the required ownership level in accordance with the terms of this stock ownership policy.Stock Ownership Policy. Mr. Langford, who does not receive compensation from Superior for his service on the Board, is not subject to the stock ownership policy. As noted in the Voting Securities and Principal Ownership table below, Mr. Langford, a Partner in TPG, disclaims beneficial ownership of the shares of Series A Preferred Stock reported as beneficially owned by TPG Group Holdings (SBS) Advisors, Inc. Superior
Compensation Committee Interlocks and Insider Participation
Messrs. Humphries, Langford, McElya and Uranga served as members of our Compensation Committee in 2019. None of Messrs. Humphries, Langford, McElya and Uranga was an officer or employee of the Company, formerly an officer of the Company or an
executive officer of an entity for which an executive officer of the Company served as a member of the Compensation Committee or as a director during theone-year period ended December 31, 2019.
2426 | Superior Industries International, Inc.
Proposal No. 2 • Executive Compensation Program Best Practices
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Superior provides its stockholders with the opportunity to cast an annual advisory vote on executive compensation (a“Say-on-Pay” proposal). At Superior’s 20182019 annual meeting of stockholders, approximately 94%67% of the votes cast on theSay-on-Pay proposal were voted in favor of the compensation of Superior’s named
executive officers (“NEOs”). This result was lower than in previous years and we believe it was primarily due to a negative ISS recommendation on our NEO compensation following aone-time compensation package provided to our
former CEO upon his departure in 2018. Since this compensation package was aone-time occurrence and did not impact the compensation of our current NEOs, the Compensation and Benefits Committee did not implement any material changes to our executive compensation program as a direct result of the 2019 Say on Pay Vote. Our executive compensation program follows severalthe best practices that are discussed beginning on page 3641 in the “Compensation Discussion and Analysis,” some of which are summarized as follows:
Executive Compensation Program Best Practices
✓ |
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Significant Performance-Based Pay: Performance-based compensation comprised, on average, approximately 50% of the target total direct compensation of our NEOs (other than our former interim Executive Chairman of the Board and |
✓ | Alignment of Executive Pay with the Stockholder Experience: Our overall compensation design has a significant portion of executive pay in the form of equity, a large part of which is performance-related, so that our executives’ realized pay parallels the stockholder experience. |
✓ | Multiple Performance Measures: We use multiple performance measures that include short and long-term objectives to evaluate executive performance. |
✓ | Stock Ownership and Holding Requirements: We have stock ownership requirements for our directors and officers to ensure they are meaningfully invested in our stock and have personal financial interests strongly aligned with those of our stockholders. Until a person is in compliance with such requirements, they generally must hold 100% of shares already owned by them and 100% of shares acquired by them, including net shares acquired upon vesting or exercise of equity awards. |
✓ | No Repricing: Our outstanding stock options cannot be repriced, reset or exchanged for cash without stockholder approval. |
✓ | Anti-Pledging: Superior’s insider trading policy expressly prohibits Section 16 |
✓ | Double Trigger: We require a double trigger (change in control |
✓ | Clawback: |
equity compensation awards granted |
✓ | NoGross-Ups: We do not provide excise taxgross-up payments to our executives. |
✓ | Anti-Hedging Policy: Superior’s insider trading policy expressly prohibits Section 16 |
✓ | Limited Employment Agreements: None of the NEOs, other than our former interim Executive Chairman of the Board and |
✓ | Performance-Based Metrics: Our incentive plans are performance-based and have appropriate caps on payouts. |
2020 Proxy Statement | 27
Proposal No. 2 • Executive Compensation Program Best Practices
✓ | No “Liberal” Change in Control Definition: Our equity plan and change in control plan require the consummation of a change in control transaction to trigger any change in control benefits thereunder. |
✓ | Compensation Programs Designed to Reduce Risk: We have designed our compensation programs so that they do not encourage unreasonable risk taking. We monitor this by performing an annual compensation risk assessment. |
✓ | Regular Engagement with Stockholders: We regularly engage with our stockholders to strengthen our understanding of stockholder concerns, especially as it relates to executive compensation matters. |
2019 Proxy Statement | 25
Proposal No. 2 • Executive Compensation Program Best Practices
The Compensation and Benefits Committee will continue to consider the results of futureSay-on-Pay votes when making future compensation decisions for Superior’s named executive officers.
As shown above, the core of Superior’s executive compensation philosophy and practice continues to
be an emphasis on pay for performance, with approximately 2/3 of annual equity grants being subject to attainment of performance goals. Superior’s executive officers are compensated in a manner consistent with Superior’s strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. We believe our compensation program is strongly aligned with the long-term interests of our stockholders. We urge you
to read the “Compensation Discussion and Analysis,” the compensation tables and the narrative discussion set forth on pages 3334 to 5762 of this Proxy Statement for additional details on Superior’s executive compensation program.
We are asking stockholders to vote on the following resolution:
RESOLVED, that the stockholders approve the compensation of Superior’s named executive officers for the year ended December 31, 2019 as disclosed pursuant to the SEC’s compensation disclosure rules, including the “Compensation Discussion and Analysis,” the compensation tables and narrative discussion.
Approval of this proposal requires (i) a majority of the shares represented and voting at the Annual Meeting at which a quorum is present and (ii) that shares voting affirmatively also constitute at least a majority of the required quorum. If you own shares through a
bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on this proposal.
Recommendation of the Board of Directors
The Board unanimously recommends a vote “FOR” the approval of thenon-binding advisory resolution to approve executive compensation.compensation of the Company’s named executive officers for the year ended December 31, 2019.
2628 | Superior Industries International, Inc.
Proposal No. 3 • General
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Superior is asking the stockholders to ratify the Audit Committee’s appointment of Deloitte & Touche LLP (“Deloitte”) as Superior’s independent registered public accounting firm for the fiscal year ending December 31, 2019.2020. Neither the Company’s Articles of Incorporation nor the Bylaws require that stockholders ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm. However, we are requesting ratification because we believe it is a matter of good corporate practice. In the event the stockholders fail to ratify the appointment, the Audit Committee will reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its
discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in Superior’s and its stockholders’ best interests.
Deloitte has audited Superior’s consolidated financial statements annually since 2009. Representatives of Deloitte are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that those representatives will be available to respond to appropriate questions.
Principal Accountant Fees and Services
The following is a summary of the fees billed to Superior by its independent registered public accounting firm, Deloitte & Touche LLP, for professional services rendered for the years ended December 31, 20182019 and December 31, 2017:2018:
Fee Category (in Thousands) | Fiscal 2018 Fees | Fiscal 2017 Fees | Fiscal 2019 Fees | Fiscal 2018 Fees | ||||||||||||
Audit Fees | $ | 2,775 | $ | 1,810 | $ | 2,560 | $ | 2,775 | ||||||||
Audit-Related Fees | — | 520 | 30 | — | ||||||||||||
Tax Compliance/Preparation Fees | 790 | 423 | 740 | 790 | ||||||||||||
All Other Fees | — | 67 | — | — | ||||||||||||
Total Fees | $ | 3,565 | $ | 2,820 | $ | 3,330 | $ | 3,565 |
Audit Fees. Consist of fees billed for professional services rendered for the integrated audit of Superior’s consolidated financial statements and of its internal control over financial reporting, for review of the interim consolidated financial statements included in quarterly reports and for the statutory audits for certain subsidiaries.
Audit-Related Fees. Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of Superior’s consolidated financial statements and are not reported under “Audit Fees.” These services include accounting consultations in connection with
transactions, merger and acquisition due diligence, attest services that are not required to support the integrated audit of Superior’s consolidated financial statements and its internal controls over financial reporting and consultations concerning financial accounting and reporting standards.
Tax Compliance/Preparation Fees. Consist of fees billed for professional services for tax compliance and preparation as well as tax advice and tax planning. The services comprising tax compliance and preparation include the preparation of original and amended tax returns and refund claims and tax payment planning.
20192020 Proxy Statement | 2729
Proposal No. 3 • Principal Accountant Fees and Services
All Other Fees. Consist of fees for professional services other than the services reported above.
The Audit Committee determined that allnon-audit services provided by Deloitte were compatible with maintaining such firm’s audit independence.
Policy on Audit CommitteePre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm
The Audit Committee’s policy is topre-approve all audit and permissiblenon-audit services to be provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.Pre-approval is generally provided for up to one year and anypre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The
independent registered public accounting firm and management are required to report periodically to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with thispre-approval, and the fees for the services performed to date. The Audit Committee may alsopre-approve particular services on acase-by-case basis.
Approval of this proposal requires (i) a majority of the shares represented and voting at the Annual Meeting at which a quorum is present and (ii) that shares
voting affirmatively also constitute at least a majority of the required quorum. . If you own shares through a
bank, broker, or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on this proposal.
The Board unanimously recommends that you vote “FOR” the ratification of the appointment of Deloitte to serve as Superior’s independent registered public accounting firm for the fiscal year ending December 31, 2019.2020. Proxies solicited by the Board will be voted for the proposal unless stockholders specify a contrary vote.
2830 | Superior Industries International, Inc.
Voting Securities and Principal Ownership • Beneficial Ownership Table
VOTING SECURITIES AND PRINCIPAL OWNERSHIP
The following table sets forth certain information with respect to beneficial ownership of Superior common stock as of February 27, 2019May 26, 2020 for (i) the named executive officers (ii) each director and director
nominee, (iii) all
directors and executive officers as a group and (iv) all persons known to Superior to beneficially own 5% or more of Superior common stock.
Name and Address(1) of Beneficial Owner | Shares Beneficially Owned(1) | Percentage of Common | Percentage of Total Voting Power(1)(2) | |||||||||
5% Beneficial Stockholders: | ||||||||||||
TPG Group Holdings (SBS) Advisors, Inc.(3) | 5,326,326 | 17.6 | % | 17.6 | % | |||||||
BlackRock, Inc.(4) | 3,449,602 | 13.8 | % | 11.4 | % | |||||||
Dimensional Fund Advisors LP(5) | 2,106,156 | 8.4 | % | 6.9 | % | |||||||
GAMCO Asset Management, Inc.(6) | 1,950,101 | 7.8 | % | 6.4 | % | |||||||
Steven J. Borick(7)(8) | 1,538,101 | 6.1 | % | 5.1 | % | |||||||
The Louis L. Borick Foundation(7) | 1,500,100 | 6.0 | % | 4.9 | % | |||||||
Directors and Named Executive Officers: | ||||||||||||
Timothy C. McQuay(9) | 35,048 | * | * | |||||||||
Matti M. Masanovich(9) | 65,011 | * | * | |||||||||
Parveen Kakar(9)(10) | 60,310 | * | * | |||||||||
Robert Tykal(9) | 41,141 | * | * | |||||||||
James F. Sistek(11) | 25,430 | * | * | |||||||||
Donald J. Stebbins(12) | 184,838 | * | * | |||||||||
Nadeem Moiz(13) | 13,260 | * | * | |||||||||
Michael R. Bruynesteyn(9) | 19,078 | * | * | |||||||||
Richard J. Giromini | 2,500 | * | * | |||||||||
Paul Humphries(9) | 18,047 | * | * | |||||||||
Ransom A. Langford(14) | — | * | * | |||||||||
James S. McElya(9) | 76,630 | * | * | |||||||||
Ellen B. Richstone(9) | 21,132 | * | * | |||||||||
Francisco S. Uranga(9)(10) | 38,047 | * | * | |||||||||
Superior’s Directors and Executive Officers as a Group (16 persons)(9)(10) | 453,470 | 1.8 | % | 1.5 | % |
Name and Address(1) of Beneficial Owner | Shares Beneficially Owned(1) | Percentage of Common | Percentage of Total Voting Power(1)(2) | |||||||||
5% Beneficial Stockholders: | ||||||||||||
TPG Group Holdings (SBS) Advisors, Inc.(3) | 5,326,326 | 17.2 | % | 17.2 | % | |||||||
Dimensional Fund Advisors LP(4) | 2,092,438 | 8.2 | % | 6.8 | % | |||||||
Directors and Named Executive Officers: | ||||||||||||
Majdi B. Abulaban | 255,617 | 1.0 | % | * | ||||||||
Matti M. Masanovich | 82,337 | * | * | |||||||||
Parveen Kakar(5) | 64,203 | * | * | |||||||||
Joanne Finnorn | 19,829 | * | * | |||||||||
Kevin Burke | 6,683 | * | * | |||||||||
Robert Tykal(6) | 27,337 | * | * | |||||||||
Timothy C. McQuay | 51,827 | * | * | |||||||||
Michael R. Bruynesteyn | 35,857 | * | * | |||||||||
Richard J. Giromini | 59,279 | * | * | |||||||||
Paul Humphries | 34,826 | * | * | |||||||||
Ransom A. Langford(7) | — | * | * | |||||||||
James S. McElya | 93,409 | * | * | |||||||||
Ellen B. Richstone | 55,911 | * | * | |||||||||
Francisco S. Uranga(5) | 49,826 | * | * | |||||||||
Superior’s Directors and Executive Officers as a Group (17 persons)(5) | 862,443 | 3.4 | % | 2.8 | % |
* | Less than 1%. |
(1) | All persons have the Company’s principal office as their address, except as otherwise indicated. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons listed have sole voting and investment power with respect to all shares of Superior’s common stock beneficially owned by them. |
(2) | The percentage ownership of common stock is based on |
2019 Proxy Statement | 29
Voting Securities and Principal Ownership • Beneficial Ownership Table
(3) | Represents shares of common stock underlying the 150,000 shares of Series A Preferred Stock held by TPG Group Holdings (SBS) Advisors, Inc. (“Group Advisors”), which were convertible into common stock as of |
2020 Proxy Statement | 31
Voting Securities and Principal Ownership • Beneficial Ownership Table
liability company, which is the general partner of TPG Group Holdings (SBS), L.P., a Delaware limited partnership, which is the sole member of TPG HoldingsI-A, LLC, a Delaware limited liability company, which is the general partner of TPG Holdings I, L.P., a Delaware limited partnership, which is the sole member of TPG Growth GenPar III Advisors, LLC, a Delaware limited liability company, which is the general partner of TPG Growth GenPar III, L.P., a Delaware limited partnership, which is the general partner of TPG Growth III Sidewall, L.P., a Delaware limited partnership (“TPG Growth Sidewall”), which directly holds 150,000 shares of Series A Preferred Stock. David Bonderman is the President of Group Advisors and officer, director and/or manager of other affiliated entities. James G. Coulter is the Senior Vice President of Group Advisors and officer, director and/or manager of other affiliated entities. Group Advisors’ address is TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. |
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The information with respect to the holdings of Dimensional Fund Advisors LP (“Dimensional Fund”), a registered investment advisor, is based solely on Amendment No. |
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30 | Superior Industries International, Inc.
Voting Securities and Principal Ownership • Beneficial Ownership Table
Includes stock options in the amount of 23,000 for Mr. Kakar and |
On |
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Does not include shares of common stock underlying the Series A Preferred Stock held by Group Advisors as described in footnote 3 above. Mr. Langford is a partner of TPG, an affiliate of Group Advisors. Mr. Langford disclaims beneficial ownership of the shares of common stock beneficially owned by Group Advisors. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, as well as those persons who own more than 10% of our common stock, to file reports of ownership and changes in ownership with the SEC. These persons are required by SEC rule to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of copies of reports filed with the SEC and submitted to us and on written representations by certain of our directors and executive officers, we are not aware of any failure to file reports on a timely
basis during the year ended December 31, 2018 under the reporting requirements of Section 16(a) of the Exchange Act, except that the initial Form 3 filing by Nadeem Moiz on July 7, 2017 inadvertently omitted 8,843 shares of32 | Superior common stock (as previously reported in the proxy statement for the 2018 annual meeting of stockholders). Upon learning of his omission, Mr. Moiz promptly reported ownership of these shares in an amendment to the Form 3 on March 3, 2018.
2019 Proxy Statement | 31Industries International, Inc.
Certain Relationships and Related Transactions • Transactions with Related Persons
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Related Persons
In the first quarter of 2015, we entered into an agreement to purchase a subscription to online software provided by NGS, Inc. (“NGS”). Our former Senior Vice President, Business Operations and our Vice President of Information Technology are passive
investors in NGS. We made payments to NGS of $479,520$479,520.00 during the 20182019 fiscal year. The transaction was entered into in the ordinary course of business and on an arms-length basis.
Review, Approval or Ratification of Transactions with Related Persons
As provided in its Committee charter, the Audit Committee is primarily responsible for the review, approval and ratification of related party transactions. As mandated by the Company’s Related Party Transactions Policy, Superior’s management is required to refer all related party transactions to the Audit Committee, including relationships and dollar values, for review and approval or ratification. Additionally, the Nominating and Corporate Governance Committee annually reviews any related party transactions involving a director when determining director independence.
The Related Party Transaction Policy defines “Related Party Transactions” as transactions between Superior and related parties in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has
or will have a direct or indirect material interest and any material amendment or modification to an existing Related Party Transaction regardless of whether such transaction has previously been approved in accordance with the policy. A “Related Party” is a director, executive officer, nominee for director or a person known to Superior to beneficially own 5% or more of Superior common stock, in each case since the beginning of the last fiscal year, and their immediate family members.
Also see Note 17,22, “Related Parties” in Notes to the Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data” of the 2019 Annual Report on Form10-K for the year ended December 31, 20182019 filed with the SEC on March 7, 2019.February 28, 2020, as amended by our Form10-K/A filed with the SEC on April 29, 2020.
Superior’s insider trading policy expressly prohibits Section 16 persons and designated insiders from engaging in hedging activities involving Superior Industries International, Inc.common stock, such as collars, forward sales, equity swaps exchange funds or other similar arrangements. Superior does not prohibit employees other than Section 16 persons and designated insiders from
engaging in hedging activities involving Superior common stock, such as collars, forward sales, equity swaps exchange funds or other similar arrangements. Therefore, Superior’s employees who are not Section 16 persons or designated insiders are free to enter into such arrangements.
2020 Proxy Statement | 33
Executive Compensation and Related Information • Compensation Discussion and Analysis
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis discussesprovides insight into Superior’s executive compensation structure, philosophy, decisions and results primarily for 20182019 (and other relevant periods) and is organized into the following sections:
Our senior management team has been assembled to drive our performance and accomplish the performance results discussed below. This discussion focuses on the compensation structure in effect for the named executive officers (who will be referred to as the “NEOs”) in 2018.2019. The tenure of each NEO with Superior is noted in the following table:
Name and Title | With Superior Since | |||
| (1) | |||
Matti Masanovich, Executive Vice President and Chief Financial Officer | September 2018 | |||
Parveen Kakar, Senior Vice President, Sales, Marketing and Product Development | June 1989 | |||
Joanne M. Finnorn, Senior Vice President, General Counsel and Corporate Secretary | September 2017 | |||
Kevin Burke, Senior Vice President, Chief Human Resources Officer | October 2019 | |||
Timothy C. McQuay, Former Interim Executive Chairman of the Board (former Principal Executive Officer) | November 2011 | (2) | ||
Robert M. Tykal, Former Senior Vice President, Operations – North America | June 2017 | |||
| (3) | |||
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(1) |
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(2) | Mr. McQuay, who has served on the Board of Directors since November 10, 2011, assumed the role of interim Executive Chairman of the Board and the duties of principal executive |
officer |
|
(3) | Mr. |
2019 Proxy Statement | 33
Executive Compensation and Related Information • Compensation Discussion and Analysis
Executive Summary
We areSuperior is one of the largest suppliers of cast aluminum wheels to the world’s leading automobile and light truck manufacturers, with employees
supporting our wheel manufacturing operations in the United States, Germany, Mexico, and Poland. Our products are sold to global automotive manufacturers’ assembly operations, and to the aftermarket, in North America and Europe.
Company Evolution
Since 2014, we have focused our strategic priorities on improving our financial and operating performance and increasing value for our stockholders. In 2017, we purchased Uniwheels AG, significantly increasing our production capacity, unit sales, and Adjusted EBITDA. Overall, we continued seeing positive results in 2018 as compared to 2017.
34 | Superior Industries International, Inc.
Executive Compensation and Related Information • Compensation Discussion and Analysis
Recent Business Highlights/Company Performance
The following chart highlights key metrics of our financial and operating performance in 2018 as compared to 2017:and 2019:
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Key Metric ($ in Millions except per wheel data, Units in Thousands) | 2018 Results | 2019 Results | ||
Units Shipped | 20,991 | 19,246 | ||
Net Sales | $1,501.8 | $1,372.5 | ||
Value-Added Sales(1) | $797.2 | $755.3 | ||
Value-Added Sales per Wheel(1) | $37.98 | $39.24 | ||
Net Income (Loss)(2) | $26.0 | $(96.5) | ||
Adjusted EBITDA(3) | $185.6 | $168.8 | ||
Adjusted EBITDA(3) % of Value-Added Sales(1) | 23.3% | 22.3% | ||
Net Cash Provided by Operating Activities | $156.1 | $162.8 |
(1) | Value-Added Sales is a financial measure that is not calculated according to GAAP, and we are including our 2018 and 2019 results for this measure to show an aspect of our performance. See Appendix A to this Proxy Statement for a reconciliation of net sales, the most comparable GAAP measure, to Value-Added Sales. |
(2) | 2019 results include goodwill and intangible impairment of $102.2 million and Fayetteville facility restructuring costs of $13.0 million. |
(3) | Adjusted EBITDA is a key measure that is not calculated according to GAAP, and we are including our 2018 and 2019 results for this measure to show an aspect of our performance. See Appendix A to this Proxy Statement for a reconciliation of net income, the most comparable GAAP measure, to Adjusted EBITDA. |
2020 Proxy Statement | 35
Executive Compensation and Related Information • Compensation Discussion and Analysis
Executive Compensation Highlights
Highlights of our 20182019 executive compensation program are summarized as follows.follows:
Individual Performance Component of Annual Incentive. The AIPP plays an important role in our approach to total compensation. We believe it motivates participants to focus on improving our performance on key financial measures during the year because it requires that we achieve defined, objectively determinable goals before participants become eligible for an incentive payout.
34 | Superior Industries International, Inc.
Executive Compensation and Related Information • Compensation Discussion and Analysis
20182019 AIPP Payouts. The Company achieved Adjusted EBITDA of $185.6$168.8 million in 2018,2019, which was slightly below92.7% of the $195$182 million target, resulting in the funding of the 20182019 AIPP bonus pool for our NEOs at 84%85.5% of target.
LTIP Performance Measures. In 2018,2019, we granted PRSUs that can be earned based on our achievement of the following three performance measures as calculated over a three-year period:
Return on Invested Capital
weighting | Cumulative Earnings
(“Cumulative EPS”) 40% weighting | Relative Total Shareholder Return
(“Relative TSR”) 20% weighting |
As discussed in the “2018“2019 Executive Compensation Components – Long-Term Equity Incentive Compensation” section on page 4247 of this Proxy Statement, these performance measurestargets were developed after a rigorousbottom-up financial analysis of our business.
LTIP Heavily Performance-Based. Approximately 2/3 of the target annual LTIP awards consist of PRSUs and 1/3 consist of time-based restricted stock units (“RSUs”). Consequently, the target total direct compensation for our NEOs is heavily performance-based as shown in the following charts (information for our former CEO, Mr. Stebbins,Abulaban, is shown in the chart on the left):
20182019 Total Direct Compensation Allocation
(assuming performance-based components earned at target)
Role of 2018Say-on-Pay36 | Vote in the Compensation Setting Process
Our Compensation and Benefits Committee reviewed the results of our 2018 stockholder advisory approval of NEO compensation and incorporated the results as one of many factors considered with the discharge of its responsibilities. At our 2018 annual meeting,
approximately 94% of our stockholders provided support for Superior’s NEO compensation through theSay-on-Pay Vote. The Compensation and Benefits Committee did not implement any material changes to our executive compensation program as a direct result of the 2018Say-on-Pay Vote.
2019 Proxy Statement | 35 Superior Industries International, Inc.
Executive Compensation and Related Information • Compensation Discussion and Analysis
Employment Agreement with Timothy C. McQuay, Former Interim Executive Chairman of the Board
As previously disclosed, we entered into an employment agreement with Mr. McQuay with respect to his employment as interim Executive Chairman of the Board, which began on December 12, 2018. As interim Executive Chairman of the Board, Mr. McQuay performed services for the Company and had the duties that are customarily associated with the role of principal executive officer. In such position, Mr. McQuay received a base salary of $50,000 per month, and the Company reimbursed Mr. McQuay for all reasonable expenses incurred by him in connection with the performance of his duties under the Agreement. Mr. McQuay’s employment as interim Executive Chairman of the Board terminated on May 15, 2019 in connection with the appointment of Mr. Abulaban as the President and Chief Executive Officer of the Company. Upon the termination of his employment, Mr. McQuay received accrued compensation and benefits through his termination date and reimbursement of outstanding but unreimbursed expenses and his employment agreement was terminated.
Employment Agreement with Majdi B. Abulaban, President and Chief Executive Officer
On April 1, 2019, the Company announced the appointment of Majdi B. Abulaban, as its President and Chief Executive Officer. The Company entered into an employment agreement with Mr. Abulaban, effective May 15, 2019, and Mr. Abulaban was appointed to the Board of Directors of the Company, effective that same date.
The employment agreement is subject to an initialtwo-year term, withone-year automatic renewals thereafter. The employment agreement provides Mr. Abulaban with an initial annual base salary of $800,000 and eligibility to receive annual cash performance bonuses with target and maximum opportunities of 125% and 250% of his annual base salary, respectively, subject to a minimum amount for the 2019 fiscal year of $625,000. In addition, Mr. Abulaban is eligible to receive severance payments and benefits upon certain terminations of his employment with the Company pursuant to the terms of the employment agreement as discussed in the “2019 Executive Compensation Components—Severance / Termination / Change in Control Benefits” section of this Proxy Statement.
In connection with the commencement of Mr. Abulaban’s employment with the Company, Mr. Abulaban received the following equity awards pursuant to the Company’s 2019 Inducement Grant Plan (the “2019 Inducement Plan”): (i) the Inducement Award consisting of (A) 666,667 PRSUs at target, vesting in three approximately equal installments to the extent that the performance metrics are satisfied during each of three performance periods and (B) 333,333 time-based RSUs, vesting in approximately equal installments on February 28, 2020, 2021 and 2022; (ii) a regular 2019-2021 PRSU grant, with the target number of PRSUs to be equal to 316,832 which will vest to the extent that the performance metrics are satisfied; and (iii) a regular 2019 time-based RSU grant, with the number of RSUs to be equal to 158,416 vesting in approximately equal installments on February 28, 2020, 2021 and 2022. The Inducement Award is intended to replace certain equity awards that were forfeited by Mr. Abulaban upon his resignation from his former employer. The PRSU awards may be earned at up to 200% of target depending on the level of achievement of the performance metrics.
Retention Agreements
As a result of changes in leadership and the desire to retain key executives, the Company entered into a Retention Bonus Agreement with each of Mr. Masanovich and Ms. Finnorn on August 8, 2019 and with Mr. Kakar on December 13, 2019 (the “Retention Bonus Agreements”). Pursuant to the terms of their respective Retention Bonus Agreement, Mr. Masanovich received a retention award consisting of a cash award of $583,495 payable August 8, 2021 and a grant of 35,000 time-based RSUs with a vesting date of August 8, 2021, Ms. Finnorn received a retention award consisting of a cash award of $118,650 payable August 8, 2021 and a grant of 20,000 time-based RSUs with a vesting date of August 8, 2021, and Mr. Kakar received a retention award consisting of a cash award of $216,300 payable October 1, 2021 and a grant of 20,000 time-based RSUs with a vesting date of October 1, 2021. Messrs. Masanovich and Kakar, and Ms. Finnorn are required to be employed at the time of vesting to receive the retention awards, except that the Company is required to pay the full amount of the cash award and the time-based RSUs become fully vested if the Company terminates the employment of Mr. Masanovich, Mr. Kakar, or Ms. Finnorn, as applicable, other than for cause.
2020 Proxy Statement | 37
Executive Compensation and Related Information • Compensation Discussion and Analysis
Role of 2019Say-on-Pay Vote in the Compensation Setting Process and Shareholder Outreach
At our 2019 annual meeting, stockholders representing approximately 67% of our outstanding shares supported Superior’s NEO compensation through thesay-on-pay vote. This result was significantly lower than in 2017 and 2018 when we received 91% support and 94% support, respectively. In response to the lower level of support for oursay-on-pay vote at our 2019 annual meeting, and at the request of the Board and the Compensation and Benefits Committee, our Chairman, Mr. McQuay, and the former Chair of the Compensation and Benefits Committee, Mr. McElya, led a stockholder outreach initiative during 2019 and early 2020. This outreach initiative was designed to assist us in fully understanding the perspectives of our stockholders, including those who did not support oursay-on-pay vote in 2019, with respect to our executive compensation program and corporate governance.
During late 2019 and early 2020, the Company contacted its top 30 stockholders beneficially owning more than 43% of the outstanding shares of our common stock as of December 31, 2019. Mr. McQuay, Mr. McElya, Ms. Finnorn and our VP of Corporate Finance, engaged with stockholders representing 23% of outstanding shares, including our largest stockholders. We provided an open forum to each stockholder to discuss and comment on any aspects of the Company’s executive compensation program. Discussions covered matters such as our executive compensation program structure, severance payments, retention and inducement awards, board composition and refreshment processes, and environmental, social and governance integration. We outlined the Compensation Committee’spay-for-performance philosophy, and the importance of shareholder feedback in the compensation design and approval process. The Board remains committed to building performance-based compensation programs for all executives and to continue to respond to ongoing shareholder feedback and concerns. We also consulted the publicly available policies of our major stockholders to better understand their views on executive compensation. After this engagement with stockholders, we agreed to maintain open dialogue
with them regarding ongoing feedback they may have on our corporate governance and executive compensation program. This effort supplemented the ongoing communications between our management and stockholders, as well as the outreach to stockholders prior to and in connection with our 2020 annual meeting, through various engagement channels including direct meetings, analyst conferences and road shows.
This engagement provided the Board and the Compensation and Benefits Committee with valuable insights into our stockholders’ perspectives on our executive compensation program and corporate governance. We understood that the primary reason stockholders voted against our NEO compensation in 2019 was due to aone-time compensation package provided to our former CEO upon his retirement in late-2018. Going forward, the Board will not administer discretionary payouts to NEOs, which are not contractually obligated, in connection with a voluntary retirement. Previously, in response to other shareholder feedback in recent years, the Board eliminated duplicative metrics from the AIPP and LTI programs, updated compensation peer selection methodology to eliminate outsized peers, benchmarked executive compensation at the 50th percentile, and committed to majority performance-based equity grants. Superior’s overall executive compensation program is based on rigorous,pre-established annual and long-term performance goals, accompanied by appropriate risk mitigation policies, which resulted in support in excess of 90% in previous years as noted above. Therefore, the Compensation and Benefits Committee retained the overall structure of our compensation program for 2019, adhering strictly to apay-for-performance philosophy that will continue to evolve with shareholder feedback.
Our Compensation and Benefits Committee considered the results of our 2019 stockholder advisory approval of NEO compensation as one of many factors in connection with the discharge of its responsibilities. We believe that we have updated our compensation practices in a manner appropriate for a company of our size and stage of growth. We intend to continue engaging with our shareholders and reviewing our compensation and governance practices in the future.
38 | Superior Industries International, Inc.
Executive Compensation and Related Information • Compensation Discussion and Analysis
The table below is a summary of feedback we heard from our investors on our executive compensation and governance strategy.
Topic | Stockholder Feedback | Board Response& Actions | ||
Incentive Compensation Metrics | Investors expressed interest in Board’s rationale for metric selection, specifically cumulative EPS in the LTI program. | Consistent with our long-term strategy, the Boardre-authorized the use of cumulative EPS as a metric in the LTI program in order incentivize management toward deleveraging and increasing cash flow generation. | ||
LTI Performance Targets Disclosure | Investors inquired about the disclosure of LTI performance targets. | In our discussions with investors, we highlighted that our primary competitors are private companies. By disclosing long-term performance targets, our company would be placing itself at a competitive disadvantage to companies that are not required to disclose this information. Investors did not express concerns with the Board’s rationale that performance targets represent competitively sensitive information. | ||
2018 Separation Arrangements | Investors expressed concerns about the CEO cash severance payment despite voluntary retirement in 2018. | The Board will not administer discretionary payouts tied to voluntary retirement of our NEOs in the future, which are not contractually obligated; this includes significant cash severances or payments that cover years not worked, lifetime benefits, or perquisites. | ||
2019 CEO Inducement Award | Investors inquired about the structure of theone-time 2019 CEO inducement award. | The Board only expects to administer inducement awards on anon-routine,one-time basis, for strategic retention or recruitment purposes. The Board explained that thetwo-thirds performance-based equity grant was necessary to attract key talent during critical transition period. This make-whole grant was necessary to compensate the CEO for forfeited equity from his previous company. |
2020 Proxy Statement | 39
Executive Compensation and Related Information • Compensation Discussion and Analysis
Topic | Stockholder Feedback | Board Response& Actions | ||
2019 Retention Awards | Investors inquired about the NEO retention awards in 2019. | The Board only expects to administer retention awards on anon-routine,one-time basis, for strategic retention or recruitment purposes. The Board explained thatone-time retention awards were selectively authorized to incentivize key leadership to remain with the company during the uncertainty surrounding the CEO transition. | ||
Board Composition and Diversity | Investors expressed interest in the Board’s composition and diversity strategy. | Board confirmed the importance of gender diversity, as board composition and diversity remain top of mind for the Board and its director recruitment process. Consistent with this process, the Board currently has one female director and one director of Mexican descent. The Board remains committed to adding new independent, highly qualified directors who have perspectives, insights, experiences, and competencies that would not only expand the depth and breadth of our Board, but also its diversity. | ||
Board Refreshment | Investors confirmed that the Board maintains adequate refreshment practices with a steady refresh of perspectives on the Board. | The Board reviewed current processes for board refreshment and board composition in the context of shareholder feedback. The Board maintained governance practices including declassified board structure, annual director elections, separated Chair/CEO positions, annual board and committee evaluations, board independence requirements, and5-year average director tenure. Additionally, in response to investor feedback, the Board plans to appoint Ray Benvenuti to the Board following the Company’s Annual Meeting. | ||
ESG Integration | Investors expressed interest in ESG integration and ESG oversight on the Board. | The Board remains committed to promoting development of the Company’s ESG initiatives. The Board regularly reviews information related to employee safety and health, corporate culture, and supplier practices. |
40 | Superior Industries International, Inc.
Executive Compensation and Related Information • Compensation Discussion and Analysis
Compensation Governance
Philosophy
The Compensation and Benefits Committee believes that Superior’s NEOs should be paid in a manner that attracts, motivates and retains the best-available talent and rewards them for driving successful results. This philosophy is achieved through the base salary, AIPP and LTIP being targeted at the 50th percentile of the benchmark for each position, with adjustments made to reflect the relative skills, experience and past performance of the NEOs and their respective roles and responsibilities within the organization, and judgments about the extent to which the NEOs can impact the company-wide performance and creation of stockholder value. Within this overall philosophy, the Compensation and Benefits Committee’s ongoing objectives are:
Superior’s executive officers are compensated in a manner consistent with Superior’s strategy, competitive practice, sound compensation governance principles and stockholder interests and concerns. In 2015, the Company implemented its current AIPP and LTIP compensation program, which emphasizes performance-based compensation and which was developed after obtaining guidance from our independent compensation consultant and seeking and receiving feedback from some of our stockholders regarding desired plan design features.
Best Practices
The core of Superior’s executive compensation philosophy enables the company to continue to attract and retain talent while driving performance. The Compensation and Benefits Committee has made significant overhauls to our executive compensation
program since 2014. The Compensation and Benefits Committee continues to monitor and review the
compensation program against our financial performance and continues to monitor the market to ensure competitive and performance driven plans.
Our programs continue to have many features that our stockholders widely consider best practices and that we view as consistent with our compensation and governance philosophy, including:
BEST PRACTICES
✓ | Significant Performance-Based Pay: Performance-based compensation comprised, on average, approximately 50% of the target total direct compensation of our NEOs (other than our former interim Executive Chairman of the Board and |
✓ | Alignment of Executive Pay with the Stockholder Experience: Our overall compensation design has a significant portion of executive pay in the form of equity, a large part of which is performance-related, so that our executives’ realized pay parallels the stockholder experience. |
✓ | Multiple Performance Measures: We use multiple performance measures that include short and long-term objectives to evaluate executive performance. |
✓ | Stock Ownership and Holding Requirements: We have stock ownership requirements for our directors and officers to ensure they are meaningfully invested in our stock and have personal financial interests strongly aligned with those of our stockholders. Until a person is in compliance with |
✓ | No Repricing: Our outstanding stock options cannot be repriced, reset or exchanged for cash without stockholder approval. |
✓ | Anti-Pledging: Superior’s insider trading policy expressly prohibits Section 16 |
✓ | Double Trigger: We require a double trigger (change in control and termination of employment) for accelerated vesting of equity upon a change in control. |
2020 Proxy Statement 36 | Superior Industries International, Inc. 41
Executive Compensation and Related Information • Compensation Discussion and Analysis
✓ | Clawback: |
✓ | NoGross-Ups: We do not provide excise taxgross-up payments to our executives. |
✓ | Anti-Hedging Policy: Superior’s insider trading policy expressly prohibits Section 16 |
✓ | Limited Employment Agreements: None of the NEOs, other than our former interim Executive Chairman of the Board and |
✓ | Performance-Based Metrics: Our incentive plans are performance-based and have appropriate caps on payouts. |
✓ | No “Liberal” Change in Control Definition: Our equity plan and change in control plan require the consummation of a change in control transaction to trigger any change in control benefits thereunder. |
✓ | Compensation Programs Designed to Reduce Risk: We have designed our compensation programs so that they do not encourage unreasonable risk taking. We monitor this by performing an annual compensation risk assessment. |
✓ | Regular Engagement with Stockholders: We regularly engage with our stockholders to strengthen our understanding of stockholder concerns, especially as it relates to executive compensation matters. |
Compensation Risk Oversight
The Compensation and Benefits Committee’s annual review and approval of Superior’s compensation philosophy and strategy includes the review of compensation-related risk management. The Compensation and Benefits Committee believes that the following risk oversight and compensation design
features described in greater detail elsewhere herein safeguard against excessive risk taking:
Superior’s common stock, like hedging, and prohibitions on pledging Superior securities in margin accounts or as collateral for a loan applicable to Section 16 persons and designated insiders; |
Methodology for Establishing Compensation
In designing and administering the NEO compensation programs, the Compensation and Benefits Committee attempts to strike a balance among the above elements, which are discussed in more detail below. The Compensation and Benefits Committee considers the pay practices of comparable companies to determine the appropriate pay mix and compensation levels, as well as Superior’s own specific short and long-term strategic objectives. The following section describes the various methods the Compensation and Benefits Committee uses in its design, administration and oversight of the compensation programs for the NEOs.
The Compensation and Benefits Committee has direct responsibility for making recommendations to the independent members of the Board regarding the approval, amendment or termination of Superior’s executive compensation plans and programs, the annual compensation of Superior’s CEO,President and Chief Executive Officer, and the compensation for other executive officers.
Consistent with its charter, the Compensation and Benefits Committee is composed of four directors. Each member of the Committee is independent, as determined by the Board and based on the NYSENew York Stock Exchange listing standards. Their independence from management allows the Compensation and Benefits Committee members to apply independent judgment when designing and overseeing our compensation program and in making pay decisions.
2019 Proxy Statement 42 | 37 Superior Industries International, Inc.
Executive Compensation and Related Information • Compensation Discussion and Analysis
when designing and overseeing our compensation program and in making pay decisions.
The Compensation and Benefits Committee from time to time engages independent compensation consultants to provide advice and ongoing recommendations regarding executive compensation programs and principles that are consistent with Superior’s business goals and pay philosophy. The Compensation and Benefits Committee has the final authority to hire and terminate any consultant, as well as the responsibility to consider the independence of the consultant. The Compensation and Benefits Committee continued to retain Willis Towers Watson in 20182019 to assist with specific assignments. The Compensation and Benefits Committee has assessed the independence of Willis Towers Watson, and concluded that Willis Towers Watson’s work does not raise any conflict of interest under applicable SEC and NYSENew York Stock Exchange rules.
Setting Executive Pay (Benchmarking)
The Compensation and Benefits Committee is responsible for recommending to the Board the annual compensation of Superior’s CEO. For the remaining NEOs and other executives, Superior’s CEO recommends compensation levels and specific components of compensation. The Compensation and Benefits Committee reviews these recommendations and adjusts them as it deems appropriate before approving or recommending any changes to either the CEO or Board.
The Compensation and Benefits Committee typically reviews broad-based third-party compensation surveys covering a wide array of public companies, some larger and some smaller than we are, to obtain a general understanding of current compensation practices. These compensation surveys provide valuable data for subjective review and confirmation of the equanimity of the salaries paid to the NEOs. The data also gives the Compensation and Benefits Committee information concerning market pay practices regarding the pay mix among base salary,
annual bonus and long-term incentives of companies in the industry that compete with us for executive talent. The Compensation and Benefits Committee targets the compensation components at the 50th
percentile range of the peermarket data while taking into consideration the experience level and performance of each named executive officer.
For 2018, the Compensation and Benefits Committee relied upon the studies performed bySince 2016, Willis Towers Watson in 2016, 2017, and 2018. Willis Towers Watson washas been engaged starting in 2016, to assist the Compensation and Benefits Committee in evaluating the competitiveness of Superior’s executive compensation program. In February 2019, the Compensation and Benefits Committee relied upon the studies performed by Willis Towers Watson, based itsutilizing competitive pay assessment on survey data of a company with $1.5 billion in revenue. In addition, for the CEOrevenue and CFO position, Willis Towers Watson utilized proxy data from ourthe previously approved peer group consisting of the following sixteen automotive part and equipment manufacturers with medianto evaluate the compensation positioning of the NEO’s. In April 2019 and mean revenues of approximately $1.89 billionbased on recommendations from Willis Towers Watson, two companies were removed from the previously approved peer group (Meritor, Inc and $1.92 billion, respectively:Dorman Products, Inc) and two companies were added (Horizon Global Corporation and Cooper-Standard Holdings Inc.) as replacements.
Company Name | Market | Symbol | ||
Actuant Corporation | NYSE | ATU | ||
Cooper-Standard Holdings Inc. | NYSE | CPS | ||
Cooper Tire & Rubber Company | NYSE | CTB | ||
| NASDAQ | GNTX | ||
Gentherm, Inc. | NASDAQ | THRM | ||
Horizon Global Corporation | NYSE | HZN | ||
LCI Industries, Inc. (f/k/a Drew Industries, Inc.) | NYSE | |||
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Modine Manufacturing Corp | NYSE | MOD | ||
Park-Ohio Holdings Corp. | NASDAQ | PKOH | ||
Shiloh Industries, Inc. | NASDAQ | SHLO | ||
SPX FLOW, Inc. | NYSE | FLOW | ||
Standard Motor Products, Inc. | NYSE | SMP | ||
Stoneridge Inc. | NYSE | SRI | ||
The Timken Company | NYSE | TKR | ||
Tower International Inc.* | NYSE | TOWR | ||
Visteon Corporation | NYSE | VC |
* | Tower International Inc. was acquired by Autokiniton Global group in September 2019 |
2020 Proxy Statement 38 | Superior Industries International, Inc. 43
Executive Compensation and Related Information • 20182019 Executive Compensation Components
20182019 Executive Compensation Components
Introduction – Elements of Pay
The following is a summary of the 20182019 direct core compensation elements (base salary, annual incentives and long-term incentives)incentives, retention and inducement awards) of our executive compensation program.
Element | Purpose | Performance Measure(s) | Fixed vs. Variable | Cash vs. Equity | Payout Range | |||||
Base Salary | Provide a competitive rate of pay to attract, motivate and retain executive officers of the Company | Individual performance, experience, time in position and critical skills | Fixed | Cash | n/a | |||||
AIPP | Align a portion of annual pay to a key element of performance for the year | AIPP Adjusted EBITDA | Variable | Cash | 0-250% of target for our President and CEO* and0-200% of target | |||||
Performance- | Align executive pay with long-term stockholder interests through equity-based compensation tied to key performance metrics of the Company | Cumulative EPS (40%) ROIC (40%) Relative TSR (20%) | Variable | Equity | 0-200% of target number of shares; PRSU value fluctuates with stock price movement | |||||
Time-Based RSUs | Directly align executive pay with long-term stockholder interests through equity-based compensation | Stock price alignment (3 yr. ratable vesting) | Variable | Equity | Fluctuates with stock price movement | |||||
Retention Awards | Maintain key leader stability to ensure an effective transition following the appointment of our new CEO in May 2019 and directly align with long-term stockholder interests through cash awards or time-based RSUs | Timing requirement | Fixed and Variable | Cash or Equity | n/a | |||||
Inducement Awards** | Attract our new CEO to join the Company and replace certain equity awards that were forfeited upon his resignation from his former employer through a combination of time-based and Performance Based RSUs | Stock price alignment (3 yr. ratable vesting) | Variable | Equity | Fluctuates with stock price movement |
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** | For more information regarding Mr. Abulaban’s employment agreement, refer to the summary in the Compensation Discussion and Analysis under the caption, “Employment Agreement with Majdi B. Abulaban, President and Chief Executive Officer.” |
44 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2019 Executive Compensation Components
In addition, Superior’s NEOs were provided with retirement benefits and certain other benefits. Narrative descriptions of the individual elements of compensation are set forth below.
The Compensation and Benefits Committee does not use a specific formula for allocating compensation among the various components. Instead, the Compensation and Benefits Committee considers market pay practices and whether the total compensation package is fair, reasonable and in accordance with the interests of our stockholders.
Base Salary
Base salary provides a fixed element of compensation that competitively rewards the executive’s skills, experience and contributions to Superior. The base salary ofIn 2019, Mr. Stebbins, our former CEO, was established when he was appointedMcQuay served as our CEO in May of 2014 and remained the same through fiscal year 2018. In connection with his assumption of the duties of principal executive officer, as the interim Executive Chairman of the Board until
May 15, 2019. During that time, Mr. McQuay began receivingreceived a base salary equal to $50,000 per month ($600,000 on an annualized basis).
The base salary of Mr. Abulaban, our current CEO, was established when he was appointed in May of 2019 Proxy Statement | 39
Executive Compensation and Related Information • 2018 Executive Compensation Componentsremained the same through fiscal year 2019.
For NEOs other than the CEO, base salary adjustments are based on recommendations of the CEO to the Compensation and Benefits Committee, taking into account the executive’s performance, scope of work, competitive benchmarks and Company performance. In setting 20182019 salaries, the former CEO and the Compensation and Benefits Committee reviewed the analysis and findings of our independent
compensation consultant. Base salaries for NEOs other than the CEO are generally adjusted when deemed necessary to meet market competition or when appropriate to recognize increased responsibilities. In 2018,2019, certain of our NEOs received merit and market based increases, as shown in the following table:
20182019 NEO Base Salary Rates
Officer Name | Date | Reason | Increase | Salary | ||||
Timothy McQuay* | 12/12/18 | n/a | 0.00% | $600,000.00 | ||||
Matti Masanovich* | 9/16/18 | n/a | 0.00% | $515,000.00 | ||||
Parveen Kakar | 4/01/18 | Merit** | 3.50% | $420,000.00 | ||||
Robert Tykal | 4/01/18 | Merit** | 5.00% | $420,000.00 | ||||
James Sistek | 4/01/18 | Merit** | 3.50% | $420,000.00 | ||||
Don Stebbins | n/a | n/a | 0.00% | $900,000.00 | ||||
Nadeem Moiz | 4/01/18 | Merit** | 3.00% | $417,000.00 |
Officer Name | Date | Reason | Increase | Salary | ||||
Timothy McQuay(1) | 12/12/2018 | n/a | 0.00% | $600,000 | ||||
Majdi Abulaban(1) | 7/1/2019 | n/a | 0.00% | $800,000 | ||||
Matti Masanovich(2) | 7/1/2019 | Merit | 3.00% | $530,450 | ||||
Parveen Kakar(3) | 7/1/2019 | Merit | 3.00% | $432,600 | ||||
Joanne Finnorn(4) | 7/1/2019 | Merit | 3.99% | $339,000 | ||||
Kevin Burke(5) | n/a | n/a | n/a | $335,000 | ||||
Robert Tykal(6) | 7/1/2019 | n/a | 0.00% | $420,000 |
Mr. |
|
(3) | Mr. Kakar achieved his performance objectives due to his leadership implementing a global engineering operating model, and providing support to the interim and permanent CEO position. |
(4) | Ms. Finnorn achieved her performance objectives and provided support to both the interim and permanent CEO position. |
(5) | Mr. Burke joined Superior as the new Senior Vice President, Chief Human Resources Officer on October 7, 2019. |
(6) | Mr. Tykal voluntarily resigned from his employment with Superior effective July 12, 2019. |
20192020 Update. AsIn response to theCOVID-19 pandemic, our CEO voluntarily agreed to forego 100% of March 1, 2019, our NEOs’his base salary rates remain unchanged from April 1, 2020 until May 31, 2020 and all of our other NEOs agreed to a 20% reduction in their base salary from April 1, 2020 to May 31, 2020. Although on March 3, 2020 the 2018 rates set forthBoard approved increases in the table above.salaries of Messrs. Abulaban and Masanovich and Ms. Finnorn in the amounts of 3.0%, 2.9% and 4.1%, respectively, in response to theCOVID-19 pandemic, the executives have decided to defer these merit increases.
2020 Proxy Statement | 45
Executive Compensation and Related Information • 2019 Executive Compensation Components
Annual Incentive Compensation and Bonuses
We grantuse annual incentive awards to motivate our CEO and other NEOs to achieve annual business results and create value for our stockholders. Annual incentive awards granted pursuant to the AIPP. In 2018, the AIPP continues the program implemented in 2011, which provides a correlation to Company performance by using AIPP Adjusted EBITDAare expressed as a payout metric, coupled withpercentage of base salary and are designed to recognize and reward targeted financial performance. Attainment of the financial target may be adjusted based on an individual performance component for our NEOs other than the CEO based onmodifier that considers the individual’s performance rating under the Annual Performance Management Program. “AIPP Adjusted EBITDA” isProgram, annual objectives and accomplishments. The Compensation and Benefits Committee believes that this design, combining an objective measurable financial goal with adjustments for individual performance, reinforces a performance measureCompany culture that is equal to our earnings before interest incomerecognizes both team achievement and expense, income taxes, depreciation, amortization and M&A activity costs.individual contributions.
The Compensation and Benefits Committee selected AIPP Adjusted EBITDA for 2019 as the financial performance component of the AIPP for 2018 because it is an objective measure of core Company performance, without considering matters such as interest income or expense, taxes, or depreciation amortization and amortization,M&A activity costs, which generally do not impact operational efficiencies. The Compensation
and Benefits Committee believes that this type of program, which combines objectively measurable financial goals with adjustments for individual performance for certain NEOs, reinforces a Company culture based on team contribution towards results and provides a clear line of sight for participants to understand individual rewards.
The AIPP Adjusted EBITDA
target for this programthe AIPP was adopted after we conducted a rigorousbottom-up full range comprehensive business and financial planning analysis in several layers of the Company from middle management up through our Board. As a result of this comprehensive process, the Compensation and Benefits Committee approved a performance goal level that is designed to be achieved if we meet our business plan.
The 2018Under the AIPP provided annual cash incentivesfor 2019, the target bonus percentages for the NEOs, with the exception of our CEO, ranged from 50% to our NEOs, including our former CEO, and other high ranking executives along the same basic structure as was used in 2017, with fixed and discretionary
40 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2018 Executive Compensation Components
components. A fixed amount, expressed as a percentage70% of base salary,salary. The target bonus percentage for our CEO was payable if125% of base salary. For the Company achieved a set levelNEOs, with the exception of AIPP Adjusted EBITDA. For all NEOs other than our former CEO, the Compensation and Benefits Committee couldcan exercise its business judgment to increase or decrease the fixed portion of thenon-equity incentive bonus a NEO otherwise earned within a range of 0%
to 200% depending on the NEO’s annual performance rating (againstandpre-specified individual performance goals). Undergoals. Rather than an individual performance multiplier, our CEO has increased leverage for achievement of financial performance in excess of the financial performance target. For 2019, our CEO has a minimum guaranteed payment under the AIPP for 2018,of $625,000 pursuant to the target bonus percentages for the NEOs ranged from 55% to 70%terms of base salary, and 100% for our former CEO, if the target AIPP Adjusted EBITDA was attained.his employment agreement.
The following table illustrates the payout opportunities under the AIPP Adjusted EBITDA and individual performance components of the AIPP for 2018:2019.
AIPP Adjusted EBITDA Goal ($) | % of AIPP Adjusted EBITDA Target | Incentive % of Target | % of Salary Payable to Mr. Stebbins | % of Salary Payable to Other NEOs | Individual Performance Multiplier* | |||||
<136,500,000 | <70.0% | 0% | 0% | 0% | n/a | |||||
136,500,000 | 70.0% | 0% | 0% | 0% | n/a | |||||
156,000,000 | 80.0% | 33.0% | 33.0% | 18.2% - 23.1% | 0-200% | |||||
175,500,000 | 90.0% | 67.0% | 67.0% | 36.3% - 46.2% | 0-200% | |||||
185,600,000** | 95.2%** | 84.0% | 100.0%** | 46.2 - 58.8%** | 0-200% | |||||
195,000,000 | 100.0% | 100.0% | 100.0% | 55.0% - 70.0% | 0-200% | |||||
214,500,000 | 110.0% | 120.0% | 120.0% | 66.0% - 84.0% | 0-200% | |||||
234,000,000 | 120.0% | 160.0% | 160.0% | 88.0% - 112.0% | 0-200% | |||||
253,500,000 | 130.0% | 200.0% | 200.0% | 110.0% - 140.0% | 0-200% | |||||
>253,500,000 | 130.0% | 200.0% | 200.0% | 110.0% - 140.0% | 0-200% |
2019 AIPP Adjusted EBITDA ($) | % of AIPP Adjusted EBITDA Target | NEOs* Incentive Target | NEOs* Individual Performance Multiplier | CEO* Incentive Target | ||||
<154,700,000 | <85.0% | 0.0% | n/a | 0.0% | ||||
154,700,000 | 85.0% | 70.0% | 0-200% | 70.0% | ||||
163,800,000 | 90.0% | 80.0% | 0-200% | 80.0% | ||||
168,800,000** | 92.7% | 85.5% | 0-200% | 85.5% | ||||
172,900,000 | 95.0% | 90.0% | 0-200% | 90.0% | ||||
182,000,000 | 100.0% | 100.0% | 0-200% | 100.0% | ||||
191,110,000 | 105.0% | 120.0% | 0-200% | 130.0% | ||||
200,200,000 | 110.0% | 140.0% | 0-200% | 160.0% | ||||
209,300,000 | 115.0% | 160.0% | 0-200% | 190.0% | ||||
218,400,000 | 120.0% | 180.0% | 0-200% | 220.0% | ||||
227,500,000 | 125.0% | 200.0% | 0-200% | 250.0% | ||||
>227,500,000 | >125% | 200.0% | 0-200% | 250.0% |
* | The individual performance multiplier |
** | 2019 Actual |
46 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2019 Executive Compensation Components
In 2018,2019, the Company achieved Adjusted EBITDA of $185.6$168.8 million, which was slightly below the AIPP Adjusted EBITDA target of $195$182 million. As a result, the 20182019 AIPP bonus pool was funded at 84%85.5% of the target bonus pool amount. The following table shows the target award, AIPP Adjusted EBITDA performance multiplier, individual performance multiplier (if applicable), and amounts paid to the NEOs under the AIPP for 20182019 (other than Mr. McQuay, who was not eligible to participate in the 20182019 AIPP):
Name | AIPP Target (% of Base Salary) | Target Award | AIPP Adjusted EBITDA Performance Multiplier | Individual Performance Multiplier | Total Amount Earned | |||||
M. Masanovich(1) | 70% | $360,500 | 84% | 115% | $102,526 | |||||
P. Kakar(2) | 55% | $231,000 | 84% | 100% | $194,040 | |||||
R. Tykal(3) | 55% | $231,000 | 84% | 90% | $174,636 | |||||
J. Sistek(4) | 55% | $231,000 | 84% | 100% | $194,040 | |||||
D. Stebbins(5) | 100% | $900,000 | N/A | N/A | $850,685 | |||||
N. Moiz(6) | 65% | $271,050 | — | — | — |
Name | AIPP Target (% of Base Salary) | Target Award | AIPP Adjusted EBITDA Performance Multiplier | AIPP Adjusted EBITDA | Individual Performance Multiplier | Total Amount Earned | ||||||
M. Abulaban(1) | 125% | $1,000,000 | 85.5% | 92.7% | N/A | $625,000 | ||||||
M. Masanovich(2) | 70% | $371,315 | 85.5% | 92.7% | 140% | $444,464 | ||||||
P. Kakar(3) | 55% | $237,930 | 85.5% | 92.7% | 95% | $193,259 | ||||||
J. Finnorn(4) | 55% | $186,450 | 85.5% | 92.7% | 100% | $159,415 | ||||||
K. Burke(5) | 50% | $170,000 | 85.5% | 92.7% | 100% | $72,675 | ||||||
R. Tykal(6) | 55% | $231,000 | — | — | — | — |
(1) | Mr. |
(2) | Mr. Masanovich achieved his performance objectives |
Mr. Kakar achieved his performance objectives |
2019 Proxy Statement | 41
Executive Compensation and Related Information • 2018 Executive Compensation Components
|
(4) |
|
(5) |
|
(6) | Mr. |
These decisions and the 2019 AIPP payments were made before the full global extent ofCOVID-19 became apparent. The Compensation and Benefits Committee will consider the business and financial impact to Superior, our stockholders and our employees, in evaluating 2020 performance early in 2021.
20192020 Update.The Compensation and Benefits Committee has approved the following target values for the 20192020 AIPP awards for our NEOs, as a percentage of base salary, which are unchanged from 2018:2019: Mr. Abulaban – 125%; Mr. Masanovich – 70%; Mr. Kakar – 55%;, Ms. Finnorn – 55% and Mr. TykalBurke – 55%50%. Mr. McQuay will not be eligible to receive a 2019 AIPP award.
Long-Term Equity Incentive Compensation
20182019 Long-Term Equity Incentive Awards. Since 2015, the Compensation and Benefits Committee has approved the grants of regular long-term equity incentive awards to all of our NEOs, including our former CEO, that place a strong emphasis on pay for performance. In 2018,2019, the total value of ourannual LTIP awards which were granted on March 1, 2018, wasFebruary 28, 2019, with 2/3 of value allocated 2/3 to PRSU awards and 1/3 to time-based RSU awards. The PRSU awards provided Mr. Stebbins the opportunity to earn up to 200% of the target award value in Company stock (Mr. Stebbins forfeited all unvested awards on December 12, 2018, when he ceased to serve as President and Chief Executive Officer) and provide our other NEOs the opportunity to earn up to 200% of the target award value in Company stock.
Performance criteria for the 20182019 PRSU awards to all of our NEOs were as followsinclude the following (weighting in parentheses): (i) Cumulative EPS (40%), (ii) ROIC (40%) and (iii) Relative TSR (20%). The PRSU awards provide all the NEOs the opportunity to earn up to 200% of the target award value in Company stock.
Each of these three performance criteria are calculated as follows:
• | Cumulative EPS: “Cumulative EPS” is a performance measure that is equal to the sum of our net income divided by the weighted average of our common stock, issued and outstanding, for each of the fiscal years during the three-year period ending December 31, |
• | ROIC: “ROIC” is a performance measure that is equal to our yearly average of ourpre-tax net income divided by Invested Capital during the Performance Period. “Invested Capital” is equal to our accounts receivable, inventory, prepaid aluminum, net fixed assets and accounts payable. |
2020 Proxy Statement | 47
Executive Compensation and Related Information • 2019 Executive Compensation Components
• | Relative TSR: “Relative TSR” is a performance measure that is equal to the |
The Compensation and Benefits Committee choose each criterion for the following reasons:
• | Cumulative EPS: The Compensation and Benefits Committee |
• | ROIC: The Compensation and Benefits Committee |
• | Relative TSR: The Compensation and Benefits Committee |
The target levels of these performance criteria were designed after a rigorous bottom up full range comprehensive business and financial planning analysis in several layers of the Company from middle management up through our Board. Because of this process, the Compensation and Benefits Committee approved performance goal levels that are designed to be met if we meet our business plan.
The annual RSU awards for all NEOs, including our former CEO, vest in equal annual installments over a three-year period. Mr. McQuay did not receive any LTIP awards in connection with his appointment to the role of interim Executive Chairman of the Board.
42 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2018 Executive Compensation Components
For 2018,2019, the total target award opportunities for our NEOs, expressed as a percentage of each NEO’s annual base salary (at date of grant), is as follows: Mr. Abulaban – 300%, Mr. Masanovich – 125%150%,
Mr. Kakar – 110%, Ms. Finnorn – 90%, Mr. Burke – 75%, and Mr. Tykal – 110%,. In 2019, Mr. Sistek – 110%,Masanovich received an increase in the target award from 125% to 150% based on his continued support during the CEO transition.
Inducement Awards.In connection with the commencement of Mr. Stebbins – 300%,Abulaban’s employment with the Company, Mr. Moiz – 110%. Abulaban received the following equity awards pursuant to the 2019 Inducement Plan: (i) an inducement award (the “Inducement Award”) consisting of (A) 666,667 PRSUs at target, vesting in three approximately equal installments to the extent that the performance metrics are satisfied during each of three performance periods and (B) 333,333 time-based RSUs, vesting in approximately equal installments on February 28, 2020, 2021 and 2022; (ii) a regular 2019-2021 PRSU grant, with the target number of PRSUs to be equal to 316,832, which will vest to the extent that the performance metrics are satisfied; and (iii) a regular 2019 time-based RSU grant, with the number of time-based RSUs equal to 158,416, vesting in approximately equal installments on February 28, 2020, 2021 and 2022. The Inducement Award was intended to replace certain equity awards that were forfeited by Mr. Abulaban upon his resignation from his former employer. The PRSU awards may be earned at up to 200% of target depending on the level of achievement of the performance metrics.
Retention Agreements.As a result of changes in leadership and the desire to retain key executives, a retention award was granted to each of Messrs. Masanovich, and Kakar and Ms. Finnorn in 2019. The retention awards included a cash component and a time-based RSU component. The number of time-based RSUs granted to Messrs. Masanovich, and Kakar and Ms. Finnorn were 35,000 RSUs, 20,000 RSUs and 20,000 RSUs, respectively. The time-based RSUs granted to Mr. Masanovich and Ms. Finnorn vest on August 8, 2021 and the time-based RSUs granted to Mr. Kakar vest on October 1, 2021.
48 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2019 Executive Compensation Components
The numbers of unitstime-based RSUs and PRSUs awarded to our NEOs in 20182019 are set forth in the following chart:
20182019 NEO Long-Term Incentive Awards
Name | 2017-2019 PRSUs | 2018-2020 PRSUs | RSUs (#) | |||||||||
Timothy C. McQuay* | — | — | — | |||||||||
Matti Masanovich** | 7,505 | 22,517 | 15,011 | |||||||||
Parveen Kakar | — | 19,359 | 9,680 | |||||||||
Robert Tykal | — | 19,359 | 9,680 | |||||||||
James Sistek | — | 19,267 | 9,634 | |||||||||
Don Stebbins*** | — | 113,136 | 56,569 | |||||||||
Nadeem Moiz | — | 19,221 | 9,610 |
Name | 2019-2021 PRSUs (at target) (#) | 2019 RSUs (#) | CEO PRSUs (#) | CEO RSUs (#) | Retention RSUs (#) | |||||||||||||||
Timothy C. McQuay(1) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||
Majdi Abulaban(2) |
| 316,832 |
|
| 158,416 |
|
| 666,667 |
|
| 333,333 |
|
| — |
| |||||
Matti Masanovich(3) |
| 95,194 |
|
| 97,597 |
|
| — |
|
| — |
|
| 35,000 |
| |||||
Parveen Kakar(3) |
| 56,931 |
|
| 28,466 |
|
| — |
|
| — |
|
| 20,000 |
| |||||
Joanne Finnorn(3) |
| 36,155 |
|
| 18,078 |
|
| — |
|
| — |
|
| 20,000 |
| |||||
Kevin Burke |
| 55,463 |
|
| 27,732 |
|
| — |
|
| — |
|
| — |
| |||||
Robert Tykal(4) |
| 56,931 |
|
| 28,466 |
|
| — |
|
| — |
|
| — |
|
Mr. McQuay did not receive a |
|
Ms. Finnorn and Messrs. Masanovich and Kakar received time-based RSU awards pursuant to their retention bonus agreements. The awards received by Ms. Finnorn and Mr. Masanovich fully vest on August 8, 2021 and the award received by Mr. Kakar fully vests on October 1, 2021. |
(4) | Mr. |
Vesting of 2016-20182019 PRSUs. Each of our NEOs (other than Messrs. Moiz, Masanovich, and McQuay, whose employment with Superior did not commence until July 1, 2017, September 16, 2018 and December 12, 2018, respectively) received grants of PRSUs for the 2016 to 2018 performance period. The 2016-2018 PRSUs could be earned based on the Company’s achievement over the three-year performance period with respect to certain performance metrics (Cumulative EPS, ROIC and Relative TSR). For the grants issued to Ms. Finnorn and Messrs. Kakar and Masanovich for the 2017-2019 performance period, the Company did not achieve metrics that met the required targets, yielding a 0% attainment level. Mr. Abulaban received a 2019-2021 PRSU award in connection with the commencement of his employment in May 2019 that vests in three tranches. The metrics, which were adjusted by the Compensation and Benefits Committee in July 2018 following the acquisitionfirst tranche vested on December 31, 2019 at an attainment level of Uniwheels AG, were satisfied at 67.6% of the overall target, and the111%. The resulting shares earned by the NEOsMr. Abulaban are set forth in the table below:below.
2016-20182019 PRSU NEO Payouts
Name | PRSUs (at target) | Actual Performance (%) | Actual Shares Earned (#) | |||||||||
Parveen Kakar | 8,216 | 67.6% | 5,554 | |||||||||
Robert Tykal* | 7,824 | 67.6% | 5,289 | |||||||||
James Sistek | 8,216 | 67.6% | 5,554 | |||||||||
Don Stebbins** | 64,103 | 67.6% | — |
Name | PRSUs (at target) | Actual Performance (%) | Actual Shares Earned (#) | |||||||||
Majdi Abulaban |
| 222,222 |
|
| 111% |
|
| 245,713 |
| |||
Joanne Finnorn |
| 10,034 |
|
| 0% |
|
| — |
| |||
Parveen Kakar |
| 9,791 |
|
| 0% |
|
| — |
| |||
Matti Masanovich |
| 7,505 |
|
| 0% |
|
| — |
| |||
Robert Tykal(1) |
| 11,736 |
|
| 0 |
|
| — |
|
Mr. Tykal |
|
20192020 Proxy Statement | 4349
Executive Compensation and Related Information • 20182019 Executive Compensation Components
20192020 Update. The Compensation and Benefits Committee, in connection with the aforementioned study by Willis Towers Watson, has approved the use of the same performance criteria (and weighting) that was used for the 20182019 LTIP awards for the 20192020 LTIP awards (Cumulative EPS, ROIC and Relative TSR). The target value for the 20192020 LTIP awards for our NEOs as a percentage of base salary are as follows: Mr. Abulaban – 300%; Mr. Masanovich – 150%; Mr. Kakar – 110%;, Ms. Finnorn – 90% and Mr. TykalBurke – 110%. In addition, in February 2019, to ensure leadership stability during the CEO transition, Mr. Masanovich was awarded a retention equity award consisting of 50,000 time-based RSUs with a three-year ratable vesting period. Mr. McQuay is not eligible to receive a 2019 LTIP award.75%
Retirement and Similar Benefits
Mr. Kakar is a participant in Superior’s Salary Continuation Plan, which provides a retirement benefit for participants who terminate employment after having reached specified vesting dates and after reaching the age of 65 (or in the event of death while in our employ prior to separation from service). Upon a qualifying termination, Superior will pay to the participant a benefit equal to 30% of his or her final average compensation over the preceding 36 months. For employee participants, final average compensation includes only base salary. The benefit is paidbi-weekly twice per month and continues for the longer of 10 years or until death, provided death occurs more than 10 years after the employee’s retirement date. Mr. Kakar’s rights have vested under the Salary Continuation Plan. The Salary Continuation Plan was closed to new participants in 2011 and, as a result, Messrs. McQuay, Masanovich, Tykal, Sistek, Stebbins, and Moiznone of our NEOs other than Mr. Kakar are not participants.
All employees may participate in Superior’stax-qualified Savings and Retirement Plan which is a 401(k) plan. For fiscal year 2018,2019, Superior matched 100% of the first 1% ofbefore-tax contributions made to the plan and 50% of such contributions over 1% and up to 6%. However, Superior did not match employee contributions in excess of the legal limit of $18,500$19,000 ($24,00025,000 for individuals older than 50 years of age) in 2018.2019. All Company contributions are vested 100% after two years of service.
Other Benefits
Superior provides NEOs with incidental benefits that the Compensation and Benefits Committee believes are reasonable and consistent with the competitive
market. For example, the NEOs, other than Mr. McQuay,our former interim Executive Chairman of the Board, receive an automobile allowance (which is a similar benefit provided to some of our other employees). In
addition, the NEOs may participate in Superior’s health and welfare benefit plans that are available to other executives and employees.
Severance / Termination / Change in Control Benefits
If Mr. Abulaban’s employment is terminated because of his death or “disability,” Mr. Abulaban’s Employment Agreement, provides him with severance compensation of a prorated amount of his current year annual bonus based on actual performance and the Inducement Award becomes vested in full, with the payout level under the performance-based portion of the Inducement Award determined and deemed to have been earned based upon an assumed achievement of all relevant performance goals at the “target” level. If Mr. Abulaban’s employment is terminated without “cause” or Mr. Abulaban resigns for “good reason,” other than within two years of a change of control of Superior, Mr. Abulaban’s Employment Agreement provides him with severance compensation of eighteen months’ base salary, a prorated amount of his current year annual bonus based on actual performance, and health care continuation ending on the earlier of (i) the eighteen (18) month anniversary of the termination date and (ii) the date as of which Mr. Abulaban becomes eligible to receive comparable benefits from a subsequent employer. If Mr. Abulaban’s employment is terminated by the Company other than for “cause” or “disability” or Mr. Abulaban resigns for “good reason,” in each case, within two years of a change of control of Superior, Mr. Abulaban’s Employment Agreement provides him with severance compensation of alump-sum payment of two times his base salary, health care continuation ending on the earlier of (i) the eighteen (18) month anniversary of the termination date and (ii) the date as of which Mr. Abulaban becomes eligible to receive comparable benefits from a subsequent employer, and all time-based equity awards become vested in full, and the performance-based equity awards are deemed earned based upon an assumed achievement of all relevant performance goals at the “target” level.
Mr. McQuay’s Employment Agreement doesdid not provide for severance upon a termination of his employment, and Mr. McQuay is not eligible to participate in the Executive Change in Control Severance Plan. Mr. Stebbins’ Employment Agreement provided him with a lump sum severance paymentTykal resigned from his position as Senior Vice President Operations, North America, effective July 2019 and was not entitled any severance.
50 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2019 Executive Compensation Components
Pursuant to the terms of one year’s base salary plus a proratedthe Retention Bonus Agreements, the Company is required to pay the full amount of his current year annual bonus at target level,the cash award and 12 months’ health care continuation,the time-based RSUs become fully vested if histhe Company terminates the employment was terminated without “cause”of Mr. Masanovich, Mr. Kakar, or if he resigned for “good reason”Ms. Finnorn, as applicable, other than within one year following a change in control of Superior. The severance payment would have been two years’ base salary and two times current year annual bonus at target level, and health care continuation would have been 24 months, if Mr. Stebbins’ employment had terminated without “cause” or if he had resigned for “good reason” within one year following a change in control of Superior. Mr. Stebbins entered into a separation agreement with the Company in connection with his retirement on December 31, 2018. In addition, Mr. Sistek entered into a separation agreement with the Company in connection with his termination of employment in January 2019. Messrs. Sistek’s and Stebbins’ separation agreements are summarized in greater detail below in the narrative discussion preceding the Potential Payments Upon Termination or Change in Control Table.cause.
Messrs. Masanovich, Kakar and TykalBurke and Ms. Finnorn currently participate in the Executive Change in Control Severance Plan. The plan is intended to encourage executive officers to remain employed with the Company during an importanta time when prospects for continued employment are often uncertain and to provide some measure of financial security prior to and after a change of control. The amounts to be paid under the plan help ensure that the interests of Superior’s executives will be materially consistent with the interests of Superior’s stockholders when considering corporate transactions. Under the plan, if the employment of a participant is terminated by the Company without “cause” (other than by reason of the Participant’s death or “disability”) or the participant resigns for “good reason,” in either case within two years following a change in control, the participant will
receive atwo-times multiple of the sum of both the participant’s annual base salary and the
44 | Superior Industries International, Inc.
Executive Compensation and Related Information • 2018 Executive Compensation Components
participant’s target annual bonus, paid in a lump sum within 60 days after termination. The Compensation and Benefits Committee considers these protections to be an important part of the NEOs’ compensation and consistent with competitive market practices.
Other Termination or Change in Control Benefits
Upon a change of control of Superior, participants will fully vest in the benefits provided under the Salary Continuation Plan (Mr. Kakar is the only NEO who
participates in this plan and is already fully vested in his benefits thereunder). Moreover, the 2018 Equity Plan providesand the 2019 Inducement Plan provide that all outstanding equity awards will become fully vested upon the occurrence of a change in control unless the award agreement provides otherwise or the award is assumed by the successor entity. If the awards are assumed by the successor entity, a “double-trigger” vesting applies, so that a participant’s awards vest if he or she incurs a qualifying termination within two years after the change of control.
Risk Mitigation, Regulatory, and Other Considerations
Executive Stock Ownership Guidelines
The Board has approved stock ownership guidelinesStock Ownership Guidelines under the Company’s Stock Ownership Policy for its executive officers, including the NEOs. The Chief Executive OfficerCEO is required to own shares equal to 5 times his annual base salary and all other executive officers are required to own shares equal to 2 times his or her annual base salary. The applicable level of stock ownership must be attained within 5 years of becoming subject to the Stock Ownership Guidelines.Policy. In addition, participants must retain 100% of the net shares received upon exercise or vesting until in compliance with the required ownership level.
All of our NEOs (otherMessrs. Abulaban, Masanovich and Burke and Ms. Finnorn are subject to the Stock Ownership Policy but are not required to meet the Stock Ownership Guidelines set forth in the Stock Ownership Policy because they have been employed by Superior for less than Messrs. Stebbins and Moiz, who ceased serving as executive officers in 2018,5 years. Mr. Sistek, whose employment terminated in January 2019, and Mr. McQuay, who is not subject to the executive officer guidelinesStock Ownership Guidelines given his service as Executive Chairman of the Board was on an interim basis only) areonly. Mr. Tykal, whose employment terminated in compliance with these stock ownership guidelines.
July 2019, is not subject to the Stock Ownership levels as of January 2, 2019Policy. Mr. Kakar is
subject to the most recent measurement date, are shown inStock Ownership Policy and has satisfied the following table.applicable Stock Ownership Guidelines.
Name | Share Guideline ($ value) | Total Shares Held ($ value)* | ||||||
Timothy C. McQuay** | N/A | N/A | ||||||
Matti Masanovich | $ | 1,030,000 | $ | 480,867 | ||||
Parveen Kakar | $ | 840,000 | $ | 436,051 | ||||
Robert Tykal | $ | 840,000 | $ | 405,104 | ||||
Jim Sistek*** | $ | 840,000 | $ | 389,402 | ||||
Don Stebbins**** | N/A | N/A | ||||||
Nadeem Moiz***** | N/A | N/A |
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Clawback Policy
The Company has adopted a formal clawback policy (the “Clawback Policy”) that applies to all incentive-based cash and equity compensation awards granted on or after the effective date (“Incentive Compensation”) to any current or former executive officer of the Company (collectively, the “Covered Recipients”). In the event that the Company is required by applicable U.S. federal securities laws to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under such securities laws where such accounting restatement was caused or substantially caused by the intentional misconduct of the Covered Recipient, the Company will recover from such Covered Recipient who received Incentive Compensation during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, based on the erroneous
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Executive Compensation and Related Information • Risk Mitigation, Regulatory, and Other Considerations
data, the amount, if any, in excess of what would have been paid to the Covered Recipient under the accounting restatement.
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Executive Compensation and Related Information • Risk Mitigation, Regulatory, and Other Considerations
Tax Deductibility of Executive Compensation
One of the factors that the Compensation and Benefits Committee considers when determining compensation is the anticipated tax treatment to Superior and to the executives of the various payments and benefits. Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”) generally places a limit of $1 million on the amount of compensation that Superior may deduct in any one year with respect to its certain covered executive officers. While the Compensation and Benefits Committee generally considers this limit when determining compensation, the Compensation and Benefits Committee reserves the right to use its business judgment to authorize compensation payments that may exceed the limitation on deductibility under Section 162(m) when the Compensation and Benefits Committee believes that such payments are appropriate. Furthermore, interpretations of and changes in the tax laws, and other factors beyond the Compensation and Benefit Committee’s control, also affect the deductibility of compensation.
Our compensation program, including the AIPP and the 2018 Equity Plan, was designed to allow the
Compensation and Benefits Committee to grant
certain incentive awards that were intended to be fully deductible for federal income tax purposes pursuant to the performance-based compensation exemption to the limit on deductibility under Section 162(m). However, the Section 162(m) exemption from the deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
Because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing Section 162(m)’s exception to the deduction limit for performance-based compensation, no assurance can be given that compensation intended to satisfy the requirements for exception from the Section 162(m) deduction limit will in fact satisfy the exception. Further, the Compensation and Benefits Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with Superior’s business needs.
4652 | Superior Industries International, Inc.
Compensation Committee Report
The following Compensation Committee Report is not considered proxy solicitation material and is not deemed filed with the SEC. Notwithstanding anything to the contrary set forth in any of our previous filings made under the Securities Act of 1933, as amended, or under the Exchange Act that might incorporate future filings made by Superior under those statutes, the Compensation Committee Report will not be incorporated by reference into any such prior filings or into any future filings made by Superior under those statutes.
The Compensation and Benefits Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation and Benefits Committee recommended to the Board that the Compensation Discussion and Analysis be included in thethis proxy statement for the 20192020 Annual Meeting of stockholders.
Submitted by the Compensation and Benefits Committee of the Board of Directors
Paul J. Humphries, Chairperson
Richard J. Giromini
James S. McElya Chairperson
Paul J. Humphries
Ransom A. Langford
Francisco S. Uranga
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Compensation Tables • 20182019 Summary Compensation Table
20182019 Summary Compensation Table
The following table provides summary information concerning the compensation earned for services rendered in all capacities to Superior by (i) all individuals serving as principal executive officer or acting in a similar capacity in 2018,2019, (ii) all individuals serving as principal financial officer or acting in a similar capacity in 2018, and2019, (iii) each of its other three most highly compensated executive officers whose total compensation for 20182019 was in excess of $100,000 and who were serving as executive officers at the end of 2018.2019 and (iv) persons serving as executive officers at any time in 2019, who were not serving as executive officers as of December 31, 2019, but would have been one of the three most highly compensated executive officers at the end of 2019 had they been serving as executive officers at such time.
Name and Principal Position | Year | Salary $ | Bonus $ | Stock $ | Option $ | Non-Equity $ | Change in $ | All Other $ | Total $ | |||||||||||||||||||||||||||
Timothy C. McQuay(4) | 2018 | 32,500 | — | — | — | — | — | 250,002 | 282,502 | |||||||||||||||||||||||||||
Interim Executive Chairman of | ||||||||||||||||||||||||||||||||||||
Matti Masanovich(5) | 2018 | 150,208 | — | 867,575 | — | 102,526 | — | 2,931 | 1,123,241 | |||||||||||||||||||||||||||
Executive Vice President and | ||||||||||||||||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
Parveen Kakar | 2018 | 416,412 | — | 480,170 | — | 194,040 | — | 22,456 | 1,113,078 | |||||||||||||||||||||||||||
Senior Vice President – Sales, | 2017 | 401,714 | — | 350,995 | — | 182,000 | 300,153 | 23,749 | 1,258,611 | |||||||||||||||||||||||||||
Marketing and Product Development | 2016 | 385,962 | — | 281,234 | — | 193,850 | 132,675 | 24,135 | 1,017,856 | |||||||||||||||||||||||||||
Robert M. Tykal | 2018 | 415,013 | — | 480,170 | — | 174,636 | — | 25,698 | 1,095,516 | |||||||||||||||||||||||||||
Senior Vice President – Operations – North America | 2017 | 222,735 | — | 1,120,005 | — | 180,000 | — | 13,772 | 1,536,512 | |||||||||||||||||||||||||||
James F. Sistek(6) | 2018 | 416,411 | — | 477,885 | — | 194,040 | — | 23,149 | 1,111,486 | |||||||||||||||||||||||||||
Former Senior Vice President – | 2017 | 401,714 | — | 350,995 | — | 182,000 | — | 23,114 | 957,823 | |||||||||||||||||||||||||||
Business Operations | 2016 | 385,962 | — | 281,234 | — | 222,913 | — | 21,998 | 912,107 | |||||||||||||||||||||||||||
Donald J. Stebbins(7) | 2018 | 900,024 | — | 2,806,127 | — | — | — | 1,791,257 | 5,497,409 | |||||||||||||||||||||||||||
Former President and Chief | 2017 | 900,000 | — | 1,800,005 | — | 720,000 | — | 25,234 | 3,445,239 | |||||||||||||||||||||||||||
Executive Officer; Former Interim Chief Financial Officer | 2016 | 900,000 | — | 2,194,234 | — | 894,690 | — | 29,751 | 4,018,675 | |||||||||||||||||||||||||||
Nadeem Moiz(8) | 2018 | 231,570 | — | 476,730 | — | — | — | 14,367 | 722,667 | |||||||||||||||||||||||||||
Former Executive Vice President and Chief Financial Officer | 2017 | 202,506 | — | 364,509 | — | 189,000 | — | 52,752 | 808,767 |
Name and Principal Position | Year | Salary $ | Bonus $ | Stock $ | Option $ | Non-Equity $ | Change in $ | All Other $ | Total $ | |||||||||||||||||||||||||||
Timothy C. McQuay(3)(4) | 2019 | 225,000 | — | — | — | — | — | 250,003 | 475,003 | |||||||||||||||||||||||||||
Former Interim Executive Chairman of the Board | 2018 | 32,500 | — | — | — | — | — | 250,002 | 282,502 | |||||||||||||||||||||||||||
Majdi Abulaban(5) | 2019 | 503,031 | — | 8,380,385 | — | 625,000 | — | 6,460 | 9,514,876 | |||||||||||||||||||||||||||
President and Chief Executive | ||||||||||||||||||||||||||||||||||||
Officer | ||||||||||||||||||||||||||||||||||||
Matti Masanovich | 2019 | 522,725 | — | 1,216,850 | — | 444,464 | — | 10,050 | 2,194,089 | |||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2018 | 150,208 | — | 867,575 | — | 102,526 | — | 2,931 | 1,123,240 | |||||||||||||||||||||||||||
Parveen Kakar | 2019 | 426,303 | — | 577,355 | — | 193,259 | 364,177 | 17,290 | 1,578,384 | |||||||||||||||||||||||||||
Senior Vice President – Sales, | 2018 | 416,412 | — | 480,170 | — | 194,040 | — | 22,456 | 1,113,078 | |||||||||||||||||||||||||||
Marketing and Product Development | 2017 | 401,714 | — | 350,995 | — | 182,000 | 300,153 | 23,749 | 1,258,611 | |||||||||||||||||||||||||||
Joanne Finnorn | 2019 | 332,502 | — | 376,800 | — | 159,415 | — | 10,890 | 879,607 | |||||||||||||||||||||||||||
Senior Vice President, General Counsel and Corporate Secretary | ||||||||||||||||||||||||||||||||||||
Kevin Burke(6) | 2019 | 78,811 | 35,000 | 326,238 | — | 72,675 | — | 2,601 | 515,325 | |||||||||||||||||||||||||||
Senior Vice President and Chief Human Resources Officer | ||||||||||||||||||||||||||||||||||||
Robert M. Tykal(7) | 2019 | 225,911 | — | 511,755 | — | — | — | 5,899 | 743,565 | |||||||||||||||||||||||||||
Former Senior Vice President – | 2018 | 415,013 | — | 480,170 | — | 174,636 | — | 25,698 | 1,095,517 | |||||||||||||||||||||||||||
Operations, North America | 2017 | 222,735 | — | 1,120,005 | — | 180,000 | — | 13,772 | 1,536,512 |
(1) | For |
Name | RSU ($) | PRSU At Target ($) | PRSU At Maximum ($) | Time-Based RSUs $ | PRSUs (at Target) $ | PRSUs (at Maximum) $ | ||||||||||||||||||
Mr. McQuay | — | — | — | — | — | — | ||||||||||||||||||
Mr. Abulaban | 2,483,332 | 5,897,051 | 11,794,103 | |||||||||||||||||||||
Mr. Masanovich | 286,110 | 581,465 | 1,162,931 | 618,650 | 598,200 | 1,196,400 | ||||||||||||||||||
Mr. Kakar | 154,009 | 326,161 | 652,323 | 219,601 | 357,754 | 715,507 | ||||||||||||||||||
Ms. Finnorn | 149,602 | 227,198 | 454,396 | |||||||||||||||||||||
Mr. Burke | 83,751 | 242,487 | 484,974 | |||||||||||||||||||||
Mr. Tykal | 154,009 | 326,161 | 652,323 | 154,001 | 357,754 | 715,507 | ||||||||||||||||||
Mr. Sistek | 153,277 | 324,609 | 649,217 | |||||||||||||||||||||
Mr. Stebbins | 900,013 | 1,906,114 | 3,812,229 | |||||||||||||||||||||
Mr. Moiz | 152,895 | 323,834 | 647,669 |
(2) | Reflects the annualized change in the actuarial present value of Mr. Kakar’s benefits under Superior’s Salary Continuation Plan, determined using the same assumptions used for financial statement reporting purposes, as reflected in Note |
4854 | Superior Industries International, Inc.
Compensation Tables • 20182019 Summary Compensation Table
statements included in Superior’s Annual Report on Form10-K for the year ended December 31, |
(3) | The amounts shown generally include matching contributions allocated by Superior to each NEO pursuant to the Savings and Retirement Plan, the value attributable to life insurance premiums paid by Superior on behalf of the NEOs, and a car allowance for each of the NEOs. |
The amount shown for Mr. McQuay includes the following amounts paid to him in 2018 with respect to his service asnon-executive Chairman of the Board through December 12, 2018: (i) $150,000 in cash fees, and (ii) a 2018 RSU award with a grant date fair value of $100,002, computed in accordance with FASB ASC 718 and based on the fair market value of Superior’s common stock on the date of grant.
The amount shown for Mr. Stebbins includes, in connection with his retirement, (i) alump-sum severance payment totaling $1,750,685 in the aggregate, including $850,685 paid at 100% of target on a prorated basis in respect of the 2018 AIPP, and (ii) premiums for COBRA coverage totaling $14,384 in the aggregate. For more information regarding Mr. Stebbins’ separation agreement, please see the summary below under the heading, “Separation Agreement with Donald J. Stebbins, Former President and CEO.”
(4) | Mr. McQuay assumed the duties of principal executive officer and |
(5) | Mr. |
(6) | Mr. |
(7) | Mr. |
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Employment Agreement with Timothy C. McQuay, Interim Executive Chairman of the Board
As previously disclosed, on February 1, 2019, we entered into an employment agreement with Mr. McQuay with respect to his employment as interim Executive Chairman of the Board, which began on December 12, 2018. As Executive Chairman of the Board and until the Company hires a new Chief Executive Officer, Mr. McQuay will perform services for the Company and have the duties that are customarily associated with the role of principal executive officer. In such position, Mr. McQuay will receive a base salary of $50,000 per month, and the Company will reimburse Mr. McQuay for all reasonable expenses incurred by him in connection with the performance of his duties under the Agreement.
Mr. McQuay’s employment as Executive Chairman of the Board will terminate upon his termination from the Board, 30 days following Mr. McQuay’s provision of notice to the Company of his resignation, or upon his death. Upon a termination of his employment for any reason, Mr. McQuay will be entitled solely to receive any accrued compensation and benefits through his termination date and reimbursement of any outstanding but unreimbursed expenses.
Separation Agreement with Donald J. Stebbins, Former President and CEO
As previously disclosed, we entered into a separation agreement with Mr. Stebbins with respect to the
termination of his service as President and Chief Executive Officer, effective December 12, 2018, and with respect to his retirement from employment with the Company effective December 31, 2018 (the “Separation Date”). In exchange for a waiver and release of claims, Mr. Stebbins received as severance a lump sum payment equal to $1,750,685, less applicable withholdings (inclusive of Mr. Stebbins’ 2018 AIPP payout), and payment of his premiums for COBRA continuation coverage for a period of 12 months following the Separation Date. The separation agreement provided that no equity awards held by Mr. Stebbins would vest after December 12, 2018 and that all unvested equity awards would be forfeited in connection with his termination of employment. Pursuant to his employment agreement, Mr. Stebbins remains subject to an indefinite confidentiality obligation andone-year post-employmentnon-solicitation andnon-disparagement obligations.
Separation Agreement with James F. Sistek, Former Senior Vice President, Business Operations
As previously disclosed, we entered into a separation agreement with Mr. Sistek with respect to the termination of his employment effective January 29, 2019. In exchange for a waiver and general release of claims and an agreement to remain available to answer questions from the Company until the end of the severance pay period, Mr. Sistek received as severance payments in the aggregate equal to $210,000, less applicable withholdings, payable in
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Compensation Tables • 2018 Summary Compensation Table
substantially equal installments over the six months following his termination date. To the extent that Mr. Sistek does not obtain full-time employment within suchsix-month period, Mr. Sistek is eligible to receive additional severance payments equal to $35,000 per month for the period ending on the12-month anniversary of his termination date or the date on which he commences full-time employment, if earlier. In addition, Mr. Sistek is eligible for the following benefits under the separation agreement:
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Mr. Sistek’s service as a member of the Management Board of Superior Industries International AG also ceased on January 29, 2019. Mr. Sistek remains subject to indefinite confidentiality andnon-disparagement obligations andsix-month post-employmentnon-solicitation andnon-competition obligations.
50 | Superior Industries International, Inc.
Compensation Tables • 20182019 Grants of Plan-Based Awards
20182019 Grants of Plan-Based Awards
The following table sets forth summary information regarding all grants of plan-based awards made to our NEOs during the year ended December 31, 2018.2019.
Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Number | Grant Date $ | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Number | Grant Date $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Type | Grant Date | Threshold $ | Target $ | Maximum $ | Threshold # | Target # | Maximum # | or Units # | Grant Type | Grant Date | Threshold $ | Target $ | Maximum $ | Threshold # | Target # | Maximum # | or Units # | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timothy C. McQuay | Annual Incentive | N/A | — | — | — | — | — | — | — | — | Annual Incentive | N/A | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | N/A | — | — | — | — | — | — | — | — | RSU | N/A | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | N/A | — | — | — | — | — | — | — | — | PRSU | N/A | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Majdi Abulaban | Annual Incentive | N/A | 625,000 | 1,000,000 | 2,500,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 5/16/2019 | 158,416 | 800,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Inducement | 5/16/2019 | — | — | — | — | — | — | 333,333 | 1,683,332 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 5/16/2019 | — | — | — | 158,416 | 316,832 | 633,664 | — | 1,899,723 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU Inducement | 5/16/2019 | — | — | — | 333,334 | 666,667 | 1,333,334 | — | 3,997,329 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matti Masanovich | Annual Incentive | N/A | 0 | 360,500 | 721,000 | — | — | — | — | — | Annual Incentive | N/A | 0 | 371,315 | 742,630 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 10/12/2018 | — | — | — | — | — | — | 3,753 | 71,532 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 10/12/2018 | — | — | — | — | — | — | 11,258 | 214,577 | RSU | 2/28/2019 | — | — | — | — | — | — | 97,597 | 528,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 10/12/2018 | — | — | — | 3,753 | 7,505 | 15,010 | — | 145,357 | RSU Retention | 8/8/2019 | — | — | — | — | — | — | 35,000 | 90,650 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 10/12/2018 | — | — | — | 11,259 | 22,517 | 45,034 | — | 436,109 | PRSU | 2/28/2019 | — | — | — | 47,597 | 95,194 | 190,388 | — | 598,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parveen Kakar | Annual Incentive | N/A | 0 | 231,000 | 462,000 | — | — | — | — | — | Annual Incentive | N/A | 0 | 237,930 | 475,860 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 3/8/2018 | — | — | — | — | — | — | 9,680 | 154,009 | RSU | 2/28/2019 | — | — | — | — | — | — | 28,466 | 154,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 3/8/2018 | — | — | — | 9,680 | 19,359 | 38,718 | — | 326,161 | RSU Retention | 12/13/2019 | — | — | — | — | — | — | 20,000 | 65,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert M. Tykal | Annual Incentive | N/A | 0 | 231,000 | 462,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 3/8/2018 | — | — | — | — | — | — | 9,680 | 154,009 | PRSU | 2/28/2019 | — | — | — | 28,466 | 56,931 | 113,862 | — | 357,754 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 3/8/2018 | — | — | — | 9,680 | 19,359 | 38,718 | — | 326,161 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James Sistek | Annual Incentive | N/A | 0 | 231,000 | 462,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joanne Finnorn | Annual Incentive | N/A | 0 | 186,450 | 372,900 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 3/8/2018 | — | — | — | — | — | — | 7,882 | 125,403 | RSU | 2/28/2019 | — | — | — | — | — | — | 18,078 | 97,802 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 3/12/2018 | — | — | — | — | — | — | 1,752 | 27,874 | RSU Retention | 8/8/2019 | — | — | — | — | — | — | 20,000 | 51,800 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 3/8/2018 | — | — | — | 7,882 | 15,764 | 31,528 | — | 265,593 | PRSU | 2/28/2019 | — | — | — | 18,078 | 36,155 | 72,310 | — | 227,198 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 3/12/2018 | — | — | — | 1,752 | 3,503 | 7,006 | 59,016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Donald J. Stebbins | Annual Incentive | N/A | 0 | 900,000 | 1,800,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Burke | Annual Incentive | N/A | 0 | 170,000 | 340,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 3/8/2018 | — | — | — | — | — | — | 56,569 | 900,013 | RSU | 11/6/2019 | — | — | — | — | — | — | 27,732 | 83,751 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 3/8/2018 | — | — | — | 56,568 | 113,136 | 226,272 | — | 1,906,114 | PRSU | 11/6/2019 | — | — | — | 27,732 | 55,463 | 110,926 | — | 242,487 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nadeem Moiz | Annual Incentive | N/A | 0 | 271,050 | 542,100 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert M. Tykal(4) | Annual Incentive | N/A | 0 | 231,000 | 462,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU | 3/8/2018 | — | — | — | — | — | — | 9,610 | 152,895 | RSU | 2/28/2019 | — | — | — | — | — | — | 28,466 | 154,001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRSU | 3/8/2018 | — | — | — | 9,611 | 19,221 | 38,442 | — | 323,834 | PRSU | 2/28/2019 | — | — | — | 28,466 | 56,931 | 113,862 | — | 357,754 |
(1) | Represents threshold, target and maximum payout opportunities under the AIPP. Actual amounts earned by the NEOs under these programs are set forth in the“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For purposes of the amounts provided above, calculations are based on the AIPP Adjusted EBITDA target and do not reflect the application of any Individual Performance Multiplier. Detailed information on the AIPP can be found under the “Compensation Discussion and Analysis – |
(2) | Reflects the grant date fair value of time-based restricted stock units and performance-based restricted stock units granted pursuant to the 2018 Equity Plan computed in accordance with FASB ASC Topic 718. Grant date fair value is based on the fair market value of Superior’s common stock on the date of grant. Assumptions used in the calculation of these amounts are included in Note |
(3) | Mr. McQuay did not receive a |
(4) | Mr. Tykal forfeited all unvested equity awards as of the termination of his employment on July 12, 2019. |
2019 Proxy Statement 56 | 51 Superior Industries International, Inc.
Compensation Tables • Outstanding Equity Awards at 20182019 Fiscal Year End
Outstanding Equity Awards at 20182019 Fiscal Year End
The following table sets forth summary information regarding the outstanding equity awards held by the NEOs at December 31, 2018.2019.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option ($) | Option Expiration Date | Number of (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: number of unearned shares, units or other rights that have not vested(3) (#) | Equity Incentive Plan Awards: market or payout value of unearned shares, units or other rights that have not vested(4) ($) | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option ($) | Option Expiration Date | Number of (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: number of unearned shares, units or other rights that have not vested(3) (#) | Equity Incentive Plan Awards: market or payout value of unearned shares, units or other rights that have not vested(4) ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
Timothy C. McQuay | — | — | — | — | 6,873 | 33,059 | — | — | — | — | — | — | 16,779 | 61,915 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Majdi Abulaban | — | — | — | — | 158,416 | 584,555 | 316,832 | 1,169,110 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 333,333 | 1,229,999 | 444,444 | 1,639,998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | 222,223 | 820,003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matti Masanovich | — | — | — | — | 3,753 | 18,052 | 11,259 | 54,156 | — | — | — | — | 35,000 | 129,150 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 97,597 | 360,133 | 95,194 | 351,266 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 7,505 | 27,693 | 11,259 | 41,546 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 11,258 | 54,151 | 3,753 | 18,052 | — | — | — | — | 3,753 | 13,849 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Parveen Kakar | 9,000 | — | 16.76 | 4-May-2022 | — | — | — | — | 9,000 | — | 16.76 | 5/4/2022 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
9,000 | — | 22.57 | 13-May-2021 | — | — | — | — | 9,000 | — | 22.57 | 5/13/2021 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
5,000 | — | 16.32 | 14-May-2020 | — | — | — | — | 5,000 | — | 16.32 | 5/14/2020 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 9,680 | 46,561 | 9,680 | 46,561 | — | — | — | — | 20,000 | 73,800 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 3,263 | 15,695 | 4,896 | 23,550 | — | — | — | — | 28,466 | 105,040 | 56,931 | 210,075 | |||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 1,356 | 6,522 | — | — | — | — | — | — | 6,453 | 23,812 | 9,680 | 35,719 | |||||||||||||||||||||||||||||||||||||||||||||||||
Robert M. Tykal | — | — | — | — | 9,680 | 46,561 | 9,680 | 46,561 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 1,632 | 6,022 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joanne Finnorn | — | — | — | — | 20,000 | 73,800 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 19,560 | 94,084 | 5,868 | 28,225 | — | — | — | — | 18,078 | 66,708 | 36,155 | 133,412 | |||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 3,932 | 18,913 | — | — | — | — | — | — | 4,098 | 15,122 | 6,148 | 22,686 | |||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 1,956 | 9,408 | — | — | — | — | — | — | 1,656 | 6,111 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
James Sistek | — | — | — | — | 1,752 | 8,427 | 1,752 | 8,427 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 7,882 | 37,912 | 7,882 | 37,912 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 3,263 | 15,695 | 4,896 | 23,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | 1,356 | 6,522 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Donald J. Stebbins(5) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nadeem Moiz(6) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin Burke | — | — | — | — | 27,732 | 102,331 | 55,463 | 204,658 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert M. Tykal(5) | — | — | — | — | — | — | — | — |
(1) | All RSU awards |
(2) | Reflects the value calculated by multiplying the number of shares or units (RSUs) by |
(3) | The amounts reported in this column represent PRSU awards granted to our NEOs in |
(4) | Reflects the value calculated by multiplying the number of shares or units (PRSUs) by |
(5) | Mr. |
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2020 Proxy Statement 52 | Superior Industries International, Inc. 57
Compensation Tables • Option Exercises and Stock Vested in Fiscal Year 20182019
Option Exercises and Stock Vested in Fiscal Year 20182019
The following table summarizes the exercising of options and vesting of restricted stock unit awards for the NEOs for the fiscal year ended December 31, 2018.2019.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Name | Number of | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | Number of | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||||||||||||||||||
Timothy C. McQuay | — | — | 4,259 | 61,921 | — | — | 6,873 | 42,269 | ||||||||||||||||||||||||
Majdi Abulaban | — | — | 245,713 | 597,083 | ||||||||||||||||||||||||||||
Matti Masanovich | — | — | — | — | — | — | 3,753 | 20,416 | ||||||||||||||||||||||||
Parveen Kakar | 4,500 | 19,003 | 9,691 | 91,873 | — | — | 6,214 | 34,883 | ||||||||||||||||||||||||
Joanne Finnorn | — | — | 3,754 | 21,479 | ||||||||||||||||||||||||||||
Kevin Burke | — | — | — | — | ||||||||||||||||||||||||||||
Robert M. Tykal | — | — | 11,137 | 115,985 | — | — | 26,739 | 110,609 | ||||||||||||||||||||||||
James Sistek | — | — | 9,691 | 91,873 | ||||||||||||||||||||||||||||
Donald J. Stebbins | — | — | 8,368 | 120,918 | ||||||||||||||||||||||||||||
Nadeem Moiz | — | — | 2,000 | 28,900 |
(1) | The value realized was computed by multiplying the number of time-based RSUs or PRSUs vesting by the closing stock price of Superior’s common stock on the date of vesting. |
The following table summarizes the present value of benefits under Superior’s Salary Continuation Plan for each of the NEOs as of December 31, 2018.2019.
Name | Plan Name(1) | Number of Years Credited Service(2) (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | ||||||||||||
Timothy C. McQuay | — | — | — | — | ||||||||||||
Matti Masanovich | — | — | — | — | ||||||||||||
Parveen Kakar | Salary Continuation Plan | — | — | |||||||||||||
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(1) | Pursuant to the Salary Continuation Plan, after having reached specified vesting dates and after reaching the age of 65 (or in the event of death while employed by Superior), the Salary Continuation Plan provides for Superior to pay to the individual, upon ceasing to be employed by Superior for any reason, a benefit equal to 30% of the employee’s final average compensation over the preceding 36 months. Final average compensation only includes base salary for employees. The benefit is paid |
(2) | “Years of credited service” does not apply to the Salary Continuation Plan. Mr. Kakar’s rights have vested under the Salary Continuation Plan. The Salary Continuation Plan was closed to new participants in 2011 and as a result, |
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Nonqualified Deferred Compensation
Superior does not have any nonqualified deferred compensation plans other than the Salary Continuation Plan.
2019 Proxy Statement | 53
Compensation Tables • Potential Payments upon Termination of Employment or Change in Control
Potential Payments upon Termination of Employment or Change in Control
Other than Mr. McQuay, our former interim Executive Chairman of the Board, and Mr. Stebbins,Abulaban, our formercurrent President and CEO,Chief Executive Officer, none of Superior’s NEOs hashave an employment agreement specifying a term of employment, and their employment may be terminated at any time. However, Superior does provide severance benefits upon the termination of an NEO’s employment under certain prescribed circumstances.
58 | Superior Industries International, Inc.
Compensation Tables • Potential Payments upon Termination of Employment or Change in Control
For a description of benefits upon termination of employment or change of control, see the “2018“2019 Executive Compensation Components – Severance / Termination / Change in Control Severance Benefits” portion of the “Compensation Discussion and Analysis” section of this Proxy Statement.
Other Arrangements. Mr. Kakar is a participant in Superior’s Salary Continuation Plan, which provides a retirement benefit for participants who terminate their employment after having reached specified vesting dates and after reaching the age of 65. For a description of the benefits payable under the Salary Continuation Plan, see the “2018“2019 Executive Compensation Components – Retirement and Similar Benefits” portion of the “Compensation Discussion and Analysis” section of this Proxy Statement.
Separation Agreement with Donald J. Stebbins, Former President and CEO. As previously disclosed, we entered into a separation agreement with Mr. Stebbins with respect to the termination of his service as President and Chief Executive Officer, effective December 12, 2018, and with respect to his retirement from employment with the Company effective December 31, 2018. For a summary of the separation payments and benefits provided thereunder, please see the narrative discussion above following the Summary Compensation Table.
Separation Agreement with James F. Sistek, Former Senior Vice President, Business Operations. As previously disclosed, we entered into a separation agreement with Mr. Sistek with respect to the termination of his employment effective January 29, 2019. For a summary of the separation payments and benefits provided thereunder, please see the narrative discussion above following the Summary Compensation Table.
Summary of Potential Termination Payments and Benefits. The following table summarizes the value of the termination payments and benefits that each of our NEOs (other than Mr. McQuay, who was not entitled to any special benefits upon a termination of his employment, Mr. Stebbins, who retired from employment with the Company December 31, 2018 and received the benefits summarized in the narrative following the Summary Compensation Table, and Mr. Moiz,Tykal, who voluntarily resigned effective July 20, 2018)12, 2019 and did not receive any termination payments or benefits in connection with his resignation) would have received if he or she had terminated employment on December 31, 20182019 under the circumstances shown. The amounts shown in this table do not include accrued but unpaid salary, earned annual bonus for 2018,2019, or payments and benefits to the extent they are provided on anon-discriminatory basis to salaried employees generally upon termination of employment, such as distributions of plan balances under ourtax-qualified 401(k) plan and death or disability benefits under our generally available welfare programs.
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54 | Superior Industries International, Inc.
Compensation Tables • Potential Payments upon Termination of Employment or Change in Control
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Name | Termination for Cause or Voluntary Resignation | Termination without Cause | Resignation for Good Reason | Retirement | Death | Disability | Termination without Cause or Resignation For Good Reason in Connection with a Change in Control(1) | |||||||||||||||||||||
Majdi Abulaban | ||||||||||||||||||||||||||||
Cash Severance | — | 1,200,000 | 1,200,000 | — | — | — | 1,600,000 | |||||||||||||||||||||
Target 2019 Bonus | — | 1,000,000 | 1,000,000 | — | 1,000,000 | 1,000,000 | 2,000,000 | |||||||||||||||||||||
Equity Acceleration | — | — | — | — | 3,690,000 | (2) | 3,690,000 | (2) | 5,443,665 | (3) | ||||||||||||||||||
Total | — | 2,200,000 | 2,200,000 | — | 4,690,000 | 4,690,000 | 9,043,665 | |||||||||||||||||||||
Matti Masanovich | ||||||||||||||||||||||||||||
Cash Severance | — | — | — | — | — | — | 1,060,900 | |||||||||||||||||||||
Target 2019 Bonus | — | — | — | — | — | — | 742,630 | |||||||||||||||||||||
Retention Bonus(4) | — | 583,495 | — | — | — | — | 583,495 | |||||||||||||||||||||
Equity Acceleration | — | 129,150 | (5) | — | — | — | — | 992,872 | (3) | |||||||||||||||||||
Total | — | 712,645 | — | — | — | — | 3,379,897 | |||||||||||||||||||||
Parveen Kakar(6) | ||||||||||||||||||||||||||||
Cash Severance | — | — | — | — | — | — | 865,200 | |||||||||||||||||||||
Target 2019 Bonus | — | — | — | — | — | — | 475,860 | |||||||||||||||||||||
Retention Bonus(4) | — | 216,300 | — | — | — | — | 216,300 | |||||||||||||||||||||
Equity Acceleration | — | 73,800 | (5) | — | — | — | — | 526,313 | (3) | |||||||||||||||||||
Total | — | 290,100 | — | — | — | — | 2,083,673 | |||||||||||||||||||||
Joanne Finnorn | ||||||||||||||||||||||||||||
Cash Severance | — | — | — | — | — | — | 678,000 | |||||||||||||||||||||
Target 2019 Bonus | — | — | — | — | — | — | 372,900 | |||||||||||||||||||||
Retention Bonus(4) | — | 118,650 | — | — | — | — | 118,650 | |||||||||||||||||||||
Equity Acceleration | — | 73,800 | (5) | — | — | — | — | 377,547 | (3) | |||||||||||||||||||
Total | — | 192,450 | — | — | — | — | 1,547,097 | |||||||||||||||||||||
Kevin Burke | ||||||||||||||||||||||||||||
Cash Severance | — | — | — | — | — | — | 670,000 | |||||||||||||||||||||
Target 2019 Bonus | — | — | — | — | — | — | 340,000 | |||||||||||||||||||||
Equity Acceleration | — | — | — | — | — | — | 306,989 | (3) | ||||||||||||||||||||
Total | — | — | — | — | — | — | 1,316,989 |
(1) | Under the Executive Change in Control Severance Plan, if the employment of a participant is terminated within two years following a change in control, |
2020 Proxy Statement | 59
Compensation Tables • Potential Payments upon Termination of Employment or Change in Control
(2) | Represents the aggregate value of the acceleration of the Inducement Award. Awards of time-based restricted stock units and performance awards (at target) are valued based upon the closing price of our common stock on the New York Stock Exchange on December 31, 2019, the last trading day in our 2019 fiscal year, of $3.69. |
(3) | Represents the aggregate value of the acceleration of unvested equity awards that would be payable to each of the NEOs who were employed as of December 31, |
As a result of changes in leadership and the desire to retain key executives, a retention award was granted to Ms. Finnorn and Messrs. Masanovich and Kakar. The cash portion of the retention award for Ms. Finnorn and Messrs. Masanovich and Kakar are $118,650, $583,495, and $216,300, respectively. |
(5) | As a result of changes in leadership and the desire to retain key executives, a retention award was granted to Ms. Finnorn and Messrs. Masanovich and Kakar. The restricted stock unit portion of the retention award for Ms. Finnorn and Messrs. Masanovich and Kakar are 20,000, 35,000 and 20,000, respectively. Awards of time-based restricted stock units are valued based upon the closing price of our common stock on the New York Stock Exchange on December 31, 2019, the last trading day in our 2019 fiscal year, of $3.69. |
(6) | Mr. Kakar’s rights have vested under the Salary Continuation Plan and, thus, he is entitled to receive payments under the Salary Continuation Plan upon the later of age 65 or his separation from service for any reason, as disclosed in the “Pension Benefits” table above. Such amounts are not quantified in this table. |
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Change in Control Provisions under Other Agreements. The 2018 Equity Plan and 2019 Inducement Plan provides that a change in control occurs upon the occurrence of any of the following: (1) any person becomes the beneficial owner of securities representing 50% or more of the total voting power of Superior’s outstanding voting securities; (2) consummation of a sale or disposition by Superior of all or substantially all of its assets; (3) consummation of a merger or consolidation of Superior with any other corporation, unless Superior’s stockholders continue to control at least 50% of the total voting power of the successor entity; or (4) Superior’sthe following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board: individuals who, during any period of two consecutive years, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders approvewas approved or recommended by a planvote of complete liquidationat leasttwo-thirds of the directors then still in office who either were directors at the beginning of the two year period or whose appointment, election or nomination for election was previously so approved or recommended, cease for any reason to constitute a majority of the number of directors of the Company.
The 2018 Equity Plan providesand the 2019 Inducement Plan provide that, unless otherwise provided in an applicable award agreement, all outstanding equity awards will immediately vest (at target for PRSUs) if (i) the participant is terminated without cause or resigns with good reason within two years following a change in control (“Double Trigger”) or (ii) upon a change in control if the awards are not assumed by the successor company.
Risk Assessment of Overall Compensation Program
The Compensation and Benefits Committee has designed Superior’s compensation programs to avoid excessive risk-taking. The following are some of the features that are designed to help Superior appropriately manage compensation-related business risk:
Diversification of incentive-related risk by employing a variety of performance measures, including financial performance;
Fixed maximum award levels for performance-based awards; and
2019 Proxy Statement | 55
Compensation Tables • Risk Assessment of Overall Compensation Program
An assortment of vehicles for delivering compensation, including cash and equity based incentives with different time horizons, to focus our executives on specific objectives that help us achieve Superior’s business plan and create an alignment with long-term stockholder interests.
The Compensation and Benefits Committee has reviewed with management the design and operation of Superior’s incentive compensation arrangements for all managers and executive officers, including the performance objectives and target levels used in connection with incentive awards, for the purpose of assuring that these arrangements do not encourage inappropriate risk taking that could impose unnecessary or excessive
60 | Superior Industries International, Inc.
Compensation Tables • Risk Assessment of Overall Compensation Program
risk to the value of Superior or the investments of Superior’s stockholders. In connection with such review, the Compensation and Benefits Committee identified certain internal and external factors that comprise Superior’s primary business risks, and then reviewed Superior’s incentive compensation arrangements for the purpose of identifying any aspects of such programs that might encourage behaviors that could exacerbate the identified business risks.
In conducting this assessment, the Compensation and Benefits Committee considered the performance objectives and target levels used in connection with these incentive awards and also the features of Superior’s compensation program that are designed to mitigate compensation-related risk, including those discussed above. Based on such assessment, the Compensation and Benefits Committee concluded that Superior’s compensation policies and practices for its employees are not reasonably likely to have a material adverse effect on Superior.
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Donald J. Stebbins,Majdi B. Abulaban, our President and CEO until December 12, 2018.CEO. The pay ratio included in this information is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of RegulationS-K.
For 2018,2019, our last completed fiscal year:
The median of the annual total compensation of all employees of the Company (other than our former CEO) was $13,299; and
The annual total compensation of our formercurrent CEO was $5,497,409,is $10,046,361, which total includes $900,000 in cash severance paid with respectone-time equity awards provided to our CEO in connection with the commencement of his employment to replace certain equity awards that he had forfeited upon his resignation from his former CEO’s retirement in December 2018.employer.
Based on this information, for 2018,2019, our formercurrent CEO’s annual total compensation was approximately 413755 times that of the median of the annual total compensation of all employees. To determine the annual total compensation of our current CEO, we adjusted the amount reported in the “Total” column of our 2019 Summary Compensation Table by annualizing Mr. Abulaban’s base salary, AIPP payout and the amount of the of “All Other Compensation” column of the 2019 Summary Compensation Table to account for the fact that he commenced employment with the Company on May 15, 2019.
In light of the Inducement Award that we paid to our CEO in 2019 in order to successfully attract him to join the Company and to replace certain equity awards that were forfeited upon his resignation from his former employer, we expect the CEO pay ratio for 2019 to be significantly higher than the CEO pay ratio in future years when we are not providing compensation to recruit a new CEO. We understand that the CEO pay ratio is intended to provide greater transparency to annual CEO pay and how it compares to the pay of the median employee. As such, we are providing a supplemental ratio that compares the CEO’s regular annual pay, excluding the specialone-time Inducement Award (see the “Long-Term Equity Incentive Compensation – Inducement Awards” section of this Proxy Statement), to the pay of the median-paid employee as we believe that this supplemental ratio reflects a more representative comparison. If we were to exclude the Inducement Award, our CEO’s annual compensation would have been approximately 328 times that of the median of the annual total compensation of all employees.
This pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of RegulationS-K, based on our payroll and employment records and the methodology described below. The SEC rules for identifying the “median employee” and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratios reported by other companies may not be comparable to the pay ratio set forth above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
2020 Proxy Statement 56 | Superior Industries International, Inc. 61
Compensation Tables • CEO Pay Ratio
To identify the median of the annual total compensation of all of our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used were as follows:
1. | In accordance with Instruction 2 to Item 402(u) of RegulationS-K, because there has been no change in our employee population or employee compensation arrangements in the past fiscal year that we reasonably believe would result in a significant change to our pay ratio disclosure, we elected to utilize the same median employee that we had identified in 2017 to calculate our |
(a) | We determined that, as of December 31, 2017, our employee population consisted of approximately 7,807 individuals working at the Company and its consolidated subsidiaries, with 6% of these individuals located in the United States and Canada, 43% located in Europe and 51% located in Mexico (as reported in Item 1, Business, in our 2017 Annual Report on Form10-K filed with the SEC on March 15, 2018). |
(b) | To identify the “median employee” from our employee population, we considered the “total direct compensation” payable to each employee in our total employee population as of December 31, 2017. For this purpose, “total direct compensation” consists of the following elements of pay, as applicable: (a) base salary, (b) target annual incentive award, (c) target long-term incentive award, (d) punctuality and attendance bonus, (e) special bonuses, (f) vacation premiums, (g) Christmas bonus, (h) profit sharing, (i) productivity bonus, (j) transportation bonus, (k) quantity and quality bonus, (l) 401(k) match and (m) Company paid life insurance. |
(c) | Using this methodology, we estimated that the “median employee” was a full-time, hourly employee located outside of the United States. |
2. | The median employee’s total direct compensation for the12-month period ending December 31, |
|
2019 Proxy Statement 62 | 57 Superior Industries International, Inc.
Audit Committee Report
The information contained in this report shall not be deemed to be “soliciting material,” to be “filed” with the SEC or be subject to Regulation 14A or Regulation 14C (other than as provided in Item 407 of RegulationS-K) or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed to be incorporated by reference in future filings with the SEC except to the extent that Superior specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
The Audit Committee has reviewed and discussed with Superior’s management and Deloitte & Touche LLP the audited consolidated financial statements of Superior contained in Superior’s Annual Report on Form10-K for the 20182019 fiscal year. The Audit Committee has also discussed with Deloitte & Touche LLP the matters required to be discussed pursuant to applicable auditing standards.
The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with Deloitte & Touche LLP its independence from Superior.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in Superior’s Annual Report on Form10-K for its 20182019 fiscal year for filing with the SEC.
Submitted by the Audit Committee
Ellen B. Richstone, Chairperson
Michael R. Bruynesteyn
Richard J. Giromini
Paul J. Humphries
2020 Proxy Statement 58 | Superior Industries International, Inc. 63
Information About the Annual Meeting and Voting
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
Why did you send me this proxy statement?
We sent you this Proxy Statement and the proxy card because the Board is soliciting your proxy to vote at the Annual Meeting to be held on April 23, 2019,June 22, 2020, at 10:00 a.m. Eastern Daylight Time via live audio webcast, and at any postponements or adjournments of the Annual Meeting. This Proxy Statement summarizes information that is intended to assist you in making an informed vote on the proposals described in this proxy statement.Proxy Statement.
What is the purpose of the Annual Meeting?
The Annual Meeting will be held for the following purposes:
To elect the following eight nominees to the Board: Michael R. Bruynesteyn, Richard J. Giromini, Paul J. Humphries, Ransom A. Langford, James S. McElya, Timothy C. McQuay, Ellen B. Richstone and Francisco S. Uranga (Proposal No. 1);
• | �� | To elect nine nominees to the Board; |
To approve, in anon-binding advisory vote, executive compensation of the Company’s named executive officers for the year ended December 31, 2019 (Proposal No. 2);
To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 20192020 (Proposal No. 3); and
To act upon such other matters as may properly come before the Annual Meeting or any postponements or adjournments thereof.
What are the Board’s voting recommendations?
The Board recommends that you vote your shares:
“FOR” all nine nominees to the Board (Proposal No. 1) named in this Proxy Statement;
“FOR” the approval of Superior’s executive compensation for the year ended December 31, 2019 (Proposal No. 2); and
“FOR” ratification of the appointment of Deloitte & Touche LLP as Superior’s independent registered public accounting firm for the fiscal year ending December 31, 20192020 (Proposal No. 3).
Why is the Annual Meeting being webcast?
In light of public health and travel concerns our shareholders, employees, and directors may have, and the protocols that federal, state, and local governments may impose in response to theCOVID-19 crisis, this year, we will be hosting our Annual Meeting live via a webcast. You will not be able to attend the Annual Meeting in person.
How do I access the virtual Annual Meeting?
Any shareholder can listen and participate in the Annual Meeting via a live audio webcast at www.virtualshareholdermeeting.com/SUP2020. The webcast will start at 10:00 a.m. Eastern Daylight Time. You will need your16-digit control number that is shown on your proxy card or voting instruction form to vote and submit questions while attending the meeting online. Shareholders who attend the virtual meeting with their16-digit control number will have the same rights and opportunities to participate as they would at anin-person meeting. If your voting instruction form does not include a16-digit control number, you must contact your brokerage firm, bank, or other financial institution (“broker”) for instructions to access the meeting. If you do not have your16-digit control number, you will still be able to attend the Annual Meeting as a “guest” and listen to the proceedings, but you will not be able to vote, ask questions, or otherwise participate.
The virtual meeting will be fully supported across browsers (Internet Explorer, Firefox, Chrome, Microsoft Edge, and Safari) and devices (desktops, laptops, tablets, and other mobile devices) running the most updated version of applicable software and plugins. We strongly recommend that you ensure that you have a strongWi-Fi or cell phone connection wherever you intend to participate in the virtual Annual Meeting.
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You may log in 30 minutes before the start of the Annual Meeting. Shareholders are encouraged to log into the webcast 15 minutes prior to the start of the meeting to provide time to register, test their internet or cell phone connectivity, and download the required software, if needed. We encourage you to access the meeting prior to the start time.
How do I submit questions at the Annual Meeting?
Once online access to the Annual Meeting is open, shareholders may submit questions, if any, on www.virtualshareholdermeeting.com/SUP2020.You will need your16-digit control number included on your proxy card or voting information form. Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Such answers will be posted on our website as soon as practicable after the Annual Meeting.
What if I have technical or other “IT” problems logging into or participating in the Annual Meeting webcast?
A toll-free technical support “help line” will be available on the morning of the Annual Meeting for any shareholder who is having challenges logging into or participating in the meeting. If you encounter technical difficulties, please call the technical support line number that will be posted on the virtual Annual Meeting login page at www.virtualshareholdermeeting.com/SUP2020. The technical support will not be able to provide you with your16-digit control number, however, so ensure that you have that number available prior to accessing the virtual Annual Meeting.
What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials?proxy card or voting instruction form?
You may receive more than one Notice, more than onee-mail or multiple proxy cardscard or voting instruction cards.form. For example, if you hold your shares in more than one brokerage account, you may receive a separate Notice, a separatee-mail or a separate voting instruction cardform for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one Notice, more than onee-mail or more than one proxy card. To voteensure that all of your shares by proxy, you must complete, sign, date and returnare voted, please vote using each proxy card and voting instruction card that you receive and vote over the Internet the shares represented by each Notice that you receive (unless you have requested and received a proxy card or voting instruction card for the shares represented by one or more of those Notices).form that you receive.
I share an address with another stockholder, and we received only one notice.proxy card or voting instruction form. How may I obtain an additional copy of the proxy materials?
Superior has adopted a procedure approved by the Securities and Exchange Commission (the “SEC”) called “householding.” Under this procedure, Superior delivers one set of proxy materials to multiple stockholders who share the same address unless Superior has received contrary instructions from one or more of the stockholders.
This procedure potentially means extra convenience for stockholders and reduces Superior’s printing and mailing costs as well as the environmental impact of its Annual Meetings. Stockholders who participate in householding
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will continue to be able to access and receive separate proxy cards. Upon written or oral request, Superior will deliver promptly a separate copy of the proxy statement and annual report to any stockholder at a shared address to which Superior delivered a single copy of the proxy materials. If you are a stockholder who shares an address with another stockholder and would like only one copy of future notices and proxy materials for your household, you may notify your broker if your shares are held in a brokerage account or notify us if you are the stockholder of records.record.
To receive free of charge a separate copy of the proxy materials, stockholders may contact Superior’s Corporate SecretaryOkapi Partners LLC, toll free at 26600 Telegraph Rd., Southfield, MI 48033 or(877)248-352-7300.629-6356.
Stockholders who hold shares in “street name” (as described below) may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
How can I get electronic access to the proxy materials?
Superior’s proxy materials also are available at www.proxyvote.com. This website address is included for reference only. The information contained on this website is not incorporated by reference into this Proxy Statement.
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Who is entitled to vote?
The record holders of the 25,019,23725,591,930 shares of the Company’s common stock and 150,000 shares of Series A Preferred Stock outstanding on the close of business on February 27, 2019May 29, 2020 are entitled to vote at the Annual Meeting.
How many votes do I have?
Each holder of Superior common stock and Series A Preferred Stock as of the Record Date will be entitled to one vote on each matter for each share of common stock held, or into which such holder’s Series A Preferred Stock is convertible, on the Record Date. As of the Record Date, there were 25,019,23725,591,930 shares of common stock outstanding and the 150,000 shares of Series A Preferred Stock outstanding that would be convertible into 5,326,326 shares of common stock.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholder of Record. If your shares are registered directly in your name with Superior’s transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares, and the proxy materials were sent directly to you by Superior.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the “beneficial owner” of shares held in “street name,” and the proxy materials were forwarded to you by that organization. As a beneficial owner, you have the right to instruct your broker, bank, trustee or nominee how to vote your shares.
If I am a stockholder of record of Superior’s shares, how do I vote?
If you are a stockholder of record, there are four ways to vote:
• |
|
• | Via the Internet. You may vote by proxy via the Internet by following the instructions included on the proxy card or voting instruction form included with your materials. |
• | By Telephone. You may vote by proxy by calling the toll free number found on the proxy card or voting instruction form included with your materials. |
• | By Mail. You may vote by proxy by filling out the proxy card or voting instruction form and returning it in the envelope provided. |
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If I am a beneficial owner of shares held in street name, how do I vote?
If you are a beneficial owner of shares held in street name, there are two ways to vote:
• |
|
|
• | By Proxy. If you are a beneficial owner of shares held in street name, this Proxy Statement and accompanying materials have been forwarded to you by the organization that holds your shares. Such organization will vote your shares in accordance with your instructions using the methods set forth in the information provided to you by such organization. See “What is a brokernon-vote?” below. |
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Information About the Annual Meeting and Voting
What is a quorum?
For business to be conducted at the Annual Meeting, a quorum must be present. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum. Each holder of Superior common stock and Series A Preferred Stock as of the Record Date will be entitled to one vote on each matter for each share of common stock held, or into which such holder’s Series A Preferred Stock is convertible, on the Record Date. As of the Record Date, there were 30,345,56330,918,256 votes representing 25,019,23725,591,930 common shares outstanding and the 150,000 shares of Series A Preferred Stock outstanding that would be convertible into 5,326,326 shares of common stock. Accordingly, shares representing 15,203,12715,459,129 votes must be present in person or by proxy at the Annual Meeting to constitute a quorum. Abstentions and “brokernon-votes” will be counted for the purpose of determining whether a quorum is present for the transaction of business.
An independent inspector of elections appointed for the Annual Meeting will determine whether a quorum is present and will tabulate votes cast by proxy or in person at the Annual Meeting. If a quorum is determined to not be present, the Annual Meeting will be adjourned until a quorum is obtained.
What happens if I do not give specific voting instructions?
Stockholders of Record. If you are a stockholder of record and you:
Indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board; or
Sign and return athe proxy card without giving specific voting instructions,
then the persons named as proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and, in accordance with applicable law, as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.
Beneficial Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters but cannot vote on“non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on anon-routine matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “brokernon-vote.”
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Which ballot measures are considered “routine” or“non-routine”?
Typically,“non-routine” matters include the election of directors (Proposal No. 1) and thenon-binding advisory vote on executive compensation (Proposal No. 2) and “routine” matters include ratification of the appointment of independent auditors (Proposal No. 3).
What is a brokernon-vote?
The term brokernon-vote refers to shares held by a brokerage firm or other nominee (for the benefit of its client) that are represented at the Annual Meeting, but with respect to which such broker or nominee is not instructed to vote on a particular proposal and does not have discretionary authority to vote on that proposal. Brokers and nominees do not have discretionary voting authority on the election of directors and on other certainnon-routine matters, and accordingly may not vote on such matters absent instructions from the beneficial holder. If you hold your shares in “street name” or through a broker, it is important that you give your broker your voting instructions.
In order to minimize the number of brokernon-votes, Superior encourages you to vote or to provide voting instructions with respect to each proposal to the organization that holds your shares by carefully following the instructions provided in the voting instruction form.
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What is the voting requirement to approve each of the proposals and how are brokernon-votes and abstentions treated?
The following chart describes the proposals to be considered at the meeting, the vote required to elect directors and to adopt each other proposal, and the manner in which votes will be counted. Brokernon-votes and abstentions are counted for purposes of determining whether a quorum is present.
Proposal | Voting Options | Vote Required to Adopt the Proposal | Effect of Abstentions | Effect of “BrokerNon-Votes” | ||||
Election of directors | For or withhold with respect to each nominee. | Plurality voting; the | No effect. | No effect; no broker discretion to vote. | ||||
Advisory vote to approve Superior’s executive compensation | For, against, or abstain. | Shares voted “for” the proposal must exceed the number of shares voted “against” the proposal.
Shares voting affirmatively must equal at least a majority of the quorum that is required to conduct business at the Annual Meeting (the “Quorum Majority”).** | No effect. An abstention does not count as a vote cast, provided that the votes cast equal a Quorum Majority. | No effect; no broker discretion to vote. | ||||
Ratification of selection of Deloitte & Touche LLP | For, against, or abstain. | Shares voted “for” the proposal must exceed the number of shares voted “against” the proposal.
Shares voting affirmatively must equal a Quorum Majority.** | No effect. An abstention does not count as a vote cast, provided that the votes cast equal a Quorum Majority. | No effect; no broker |
* | In an uncontested election, our Corporate Governance Guidelines provide that any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation following certification of the stockholder vote. The Nominating and Corporate Governance Committee and the Board must then decide whether or not to accept the tendered resignation, culminating with a public disclosure explaining the Board’s decision and decision-making process. |
** | This means that the shares voting affirmatively must be greater than 25 percent of the outstanding shares entitled to vote. |
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Can I change my vote after I have voted?
You may revoke your proxy and change your vote at any time before the taking of the vote at the Annual Meeting. Prior to the applicable cutoff time, you may change your vote using the Internet or telephone methods described above, in which case only your latest Internet or telephone proxy submitted prior to the Annual Meeting will be counted. You may also revoke your proxy and change your vote by signing and returning a new proxy card or voting instruction form dated as of a later date, or by attendingvoting online at the Annual Meeting and voting in person.Meeting. However, your virtual attendance at the Annual Meeting will not automatically revoke your proxy unless you properly vote online at the Annual Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation to Superior’s Corporate Secretary at 26600 Telegraph Rd., Southfield, MI 48033 prior to the Annual Meeting.
Who will serve as the inspector of election?
Broadridge will serve as the independent inspector of election.
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Where can I find the voting results?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be tallied by the independent inspector of election after the taking of the vote at the Annual Meeting. Superior will publish the final voting results in a Current Report on Form8-K, which Superior is required to file with the SEC within four business days following the Annual Meeting. If the final results are not available at that time, we will provide preliminary voting results in the Current Report on Form8-K and will provide the final results in an amendment to the Current Report on Form8-K as soon as practicable after they become available.
Who is paying the costs of this proxy solicitation?
Superior is paying the costs of the solicitation of proxies. Superior has retained Okapi Partners LLC to assist in obtaining proxies by mail, facsimile, telephone or email from brokerage firms, banks, broker-dealers or other similar organizations representing beneficial owners of shares for the Annual Meeting. We have agreed to pay such firm a fee of approximately $7,500 plusout-of-pocket expenses. Okapi Partners LLC may be contacted toll-free at (877)629-6356. Superior may also reimburse brokerage firms, banks, broker-dealers or other similar organizations for the cost of forwarding proxy materials to beneficial owners. In addition, certain of Superior’s directors, officers and regular employees, without additional compensation, may solicit proxies on Superior’s behalf in person, by telephone, by fax or by electronic mail. See “Proxy Solicitation and Costs” in this Proxy Statement for further information.
How can I attend the Annual Meeting?
Only stockholders asWho will solicit proxies on behalf of the Record Date are entitled to attendBoard?
The Company has retained Okapi Partners LLC, a proxy solicitation firm, that may solicit proxies on the Annual Meeting. Each stockholder must present valid picture identification such as a driver’s license or passportBoard’s behalf.
The original solicitation of proxies by mail may be supplemented by telephone, telegram, facsimile, electronic mail, text message, internet, and provide proof of stock ownership as of the Record Date. The use of mobile phones, pagers, recording or photographic equipment, tablets and/or computers is not permitted at the Annual Meeting.other electronic means and by personal solicitation by Okapi Partners LLC.
What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the 20202021 Annual Meeting of stockholders?
Requirements for Stockholder Proposals to Be Considered for Inclusion in Superior’s Proxy Materials. Proposals that a stockholder intends to present at the 20202021 Annual Meeting of stockholders and wishes to be considered for inclusion in Superior’s proxy statement and form of proxy relating to the 20202021 Annual Meeting of stockholders must be received no later than November 9, 2019February 1, 2021 (the date that is 120 calendar days before theone-year anniversary date of when Superior’s proxy statement was released to stockholders for this Annual Meeting). However, if the 20202021 Annual Meeting date has changed more than 30 calendar days from this year’s meeting, then the deadline is a reasonable time before we begin to print and send out proxy materials. All proposals must comply with Rule14a-8 under the Exchange Act, which lists the requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals must be delivered to Superior’s Corporate Secretary by mail at 26600 Telegraph Rd., Southfield, MI 48033.
Requirements for Other Stockholder Proposals to Be Brought Before the 20202021 Annual Meeting of Stockholders and Director Nominations. Our Amended and Restated Bylaws (the “Bylaws”) provide that any stockholder proposals (other than those made under Rule14a-8 of the Exchange Act) and any nomination of one or more persons for election as a director be made not later than the close of business on the 90th calendar day nor earlier than the close of business on the 120th calendar day prior to theone-year anniversary of the date of the preceding year’s annual
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meeting. Accordingly, in order for a stockholder proposal or director nomination to be considered at the 20202021 Annual Meeting, a written notice of the proposal or the nomination must be received by the Corporate Secretary of Superior no later than JanuaryMarch 24, 2020 (assuming that the 2019 Annual Meeting is held on April 23, 2020, the anniversary of the 2019 Annual Meeting).2021. However, if the date of the 20202021 Annual Meeting is advanced by more than 30 calendar days prior to or delayed by more than 60 calendar days after theone-year anniversary of the date of the 20192020 Annual Meeting, then, for notice by the stockholder to be timely, it must be received by the Corporate Secretary of Superior not earlier than the 120th day prior to the date of the 20202021 Annual Meeting and not later than the close of business on the later of (i) the 90th calendar day prior to the 20202021 Annual Meeting, or (ii) the tenth calendar day following the day on which public announcement of the date of the 20202021 Annual Meeting is first made.made by Superior. In order for stockholder proposals that are submitted outside
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of SEC Rule14a-8 and are intended to be considered by the stockholders at the 20202021 Annual Meeting to be considered “timely” for purposes of SEC Rule14a-4(c) under the Exchange Act, the proposal must be received by the Corporate Secretary of Superior no later than November 9, 2019.February 1, 2021. The notice must set forth the information required by the Bylaws with respect to each director nomination and stockholder proposal that the stockholder intends to present at the 20202021 Annual Meeting. The proxy solicited by the Board for the 20202021 Annual Meeting will confer discretionary voting authority with respect to any proposal presented by a stockholder at that meeting for which Superior has not been provided with timely notice, or, even if there is timely notice, the stockholder does not comply with the requirements of Rule14a-4(c)(2) promulgated under the Exchange Act. Notices must be delivered to Superior’s Corporate Secretary by mail at 26600 Telegraph Rd., Southfield, MI 48033.
Who can answer my questions?
Your vote at this year’s Annual Meeting is especially important, no matter how many or how few shares you own. Please sign and date the enclosed proxy card and return it in the enclosed postage-paid envelope promptly or vote by Internet or telephone. If you have questions or require assistance in the voting of your shares, please call Okapi Partners LLC, the firm assisting the Company in its solicitation of proxies:
Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, N.Y. 10036
(212)297-0720
Call Toll-Free at:(877) 629-6356
64E-mail: info@okapipartners.com
How can I obtain additional copies of these materials or copies of other documents?
Complete copies of this Proxy Statement and the 2019 Annual Report, which includes our Annual Report on
Form10-K for the year ended December 31, 2019, are also available on our website at www.supind.com.
You may also contact Okapi Partners LLC for additional copies.
70 | Superior Industries International, Inc.
Proxy Solicitation and Costs
Superior will bear the entire cost of thisits solicitation of proxies on behalf of the Superior Board of Directors, including the preparation, assembly, printing, and mailing of this Proxy Statement, the proxy card and any additional solicitation material that Superior may provide to stockholders. Copies of solicitation material will be provided to brokerage firms, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward the solicitation material to such beneficial owners. If asked, Superior will reimburse these persons for their reasonable expenses in forwarding these materials to the beneficial owners. Further, the original solicitation of proxies by mail may be supplemented by solicitation by personal interview, mail, telephone, telegram, facsimile, email, text message, social media, postings on internet websites, advertisements in periodicals, and other means by directors, executive officers, and other employees of Superior. No additional compensation will be paid to these individuals for any such services. Superior may also solicit stockholders by advertisements in periodicals, press releases issued by us and postings on our corporate website or other websites. The Company will also post its proxy materials to its website under “Investor Relations.” Unless expressly indicated otherwise, information contained on Superior’s corporate website is not part of this Proxy Statement. In addition, none of the information on the other websites listed herein is part of this Proxy Statement. These website addresses are intended to be inactive textual references only.
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Stockholders Sharing the Same Address
STOCKHOLDERS SHARING THE SAME ADDRESS
The SEC has adopted rules that permit companies and intermediaries (such as brokers) to implement a delivery procedure called “householding.” Under this procedure, multiple stockholders who reside at the same address may receive a single copy of our annual report and proxy materials, unless the affected stockholder has provided contrary instructions. This procedure reduces printing costs and postage fees.
Once again this year, a number of brokers with account holders who beneficially own our common stock will be “householding” our annual report and proxy materials. A single set of our annual report and other proxy materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. Stockholders may revoke their consent at any time by contacting Broadridge Financial Solutions, either by calling toll-free (866)540-7095, or by writing to Broadridge Financial Solutions, Householding Department, 51 Mercedes Way, Edgewood, New York, 11717.
Upon written or oral request, Superior will promptly deliver a separate set of the annual report and other proxy materials to any beneficial owner at a shared address to which a single copy of any of those documents was delivered. To receive a separate set of the annual report and other proxy materials, you may write or call Superior’s Corporate Secretary at Superior Industries International, Inc., 26600 Telegraph Rd., Southfield, MI 48033, telephone (248)352-7300.
Stockholders who share the same address and currently receive multiple copies of our annual report and other proxy materials, who wish to receive only one set in the future, can contact their bank, broker or other holder of record to request information about householding.
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Form10-K
SUPERIOR WILL MAIL WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF SUPERIOR’S ANNUAL REPORT ON FORM10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018,2019, AS AMENDED BY OUR FORM10-K/A FILED ON APRIL 29, 2020, INCLUDING THE CONSOLIDATED FINANCIAL STATEMENTS, SCHEDULES AND LIST OF EXHIBITS, AND ANY PARTICULAR EXHIBIT SPECIFICALLY REQUESTED. REQUESTS SHOULD BE SENT TO: SUPERIOR INDUSTRIES INTERNATIONAL, INC., 26600 TELEGRAPH RD., SOUTHFIELD, MICHIGAN, ATTN: CORPORATE SECRETARY, OR CALL (248)352-7300. THE ANNUAL REPORT ON FORM10-K IS ALSO AVAILABLE AT WWW.SUPIND.COM. THIS PROXY STATEMENT AND THE 20182019 ANNUAL REPORT TO STOCKHOLDERS ARE AVAILABLE ON WWW.PROXYVOTE.COM.
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Other Matters
The Board knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting or any adjournments or postponements thereof, the Board intends that the persons named in the proxies will vote upon such matters in their discretion and in accordance with their best judgment.judgment, subject to compliance with Rule14a-4(c) of the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS |
/s/ Joanne M. Finnorn |
Joanne M. Finnorn |
Senior Vice President, General Counsel and Corporate Secretary |
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APPENDIX A
RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
In this Proxy Statement under “A Letter From Timothy C. McQuay,Majdi Abulaban,” the “2018“2019 Performance & Business Highlights — Recent Business Highlights/Company Performance” and the “Compensation Discussion and Analysis — Recent Business Highlights/Company Performance” we provide information regarding Value-Added Sales and Adjusted EBITDA. These measures used in this section are key measures that are not calculated in accordance with GAAP. Management believes thenon-GAAP financial measures used in this Proxy Statement are useful to management and may be useful to investors in their analysis of the Company’s financial position and results of operations. Further, management uses thesenon-GAAP financial measures for planning and forecasting future periods. Thisnon-GAAP financial information is provided as additional information for investors and is not in accordance with or an alternative to GAAP. Thesenon-GAAP measures may be different from similar measures used by other companies.
Adjusted EBITDA is defined as earnings before interest income and expense, income taxes, depreciation, amortization, restructuring charges and other closure costs and impairments of long-lived assets and investments, changes in fair value of redeemable preferred stock embedded derivative liability, acquisition and integration costs, CEOcertain hiring and separation related costs, gains associated with early extinguishment of debt and Accounts Receivable factoring fees. The following table reconciles our net income, the most directly comparable GAAP financial measure, to our Adjusted EBITDA:
Fiscal Year Ended December 31, (Millions of dollars) | 2018 | 2017 | 2019 | 2018 | ||||||||||||
Net Income (Loss) Attributable to Superior | $ | 26.0 | $ | (6.0 | ) | $ | (96.5 | ) | $ | 26.0 | ||||||
Interest Expense, net | 50.1 | 40.0 | 47.0 | 50.1 | ||||||||||||
Income Tax Provision | 6.3 | 6.9 | 3.4 | 6.3 | ||||||||||||
Depreciation | 68.7 | 54.2 | 75.8 | 68.7 | ||||||||||||
Amortization | 26.3 | 15.2 | 24.9 | 26.3 | ||||||||||||
M&A, Integration and CEO Separation Costs and Factoring Fees | 11.7 | 35.9 | ||||||||||||||
Impairment, Hiring/Separation Costs, Restructuring, Acquisition/Integration, Gain on Early Debt Extinguishment and Accounts Receivable Factoring Fees | 108.0 | 11.7 | ||||||||||||||
Change in Fair Value of Preferred Derivative | (3.5 | ) | (6.2 | ) | 0.8 | (3.5 | ) | |||||||||
Closure costs (Excluding Accelerated Depreciation) | — | 0.1 | 5.4 | — | ||||||||||||
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Adjusted EBITDA | $ | 185.6 | $ | 140.1 | $ | 168.8 | $ | 185.6 | ||||||||
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Value-Added Sales represents net sales less the value of aluminum and services provided by outside service providers that are included in net sales. The following table reconciles our net sales, the most directly comparable GAAP financial measure, to our Value-Added Sales:
Fiscal Year Ended December 31, (Millions of dollars) | 2018 | 2017 | 2019 | 2018 | ||||||||||||
Net Sales | $ | 1,501.8 | $ | 1,108.1 | $ | 1,372.5 | $ | 1,501.8 | ||||||||
Less: Aluminum Value and Outside Service Provider Costs | (704.6 | ) | (491.3 | ) | (617.2 | ) | (704.6 | ) | ||||||||
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Value-Added Sales | $ | 797.2 | $ | 616.8 | $ | 755.3 | $ | 797.2 | ||||||||
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VIRTUAL ANNUAL MEETING OF SHAREHOLDERS | ||
The Annual Meeting of Shareholders will be held via live webcast only. There will be no physical location for the meeting. You will be able to attend the Virtual Annual Meeting, vote and submit your questions by visitingwww.virtualshareholdermeeting.com/SUP2020. Have your proxy card available when you access the web cast and follow the instructions to participate. You may log in 30 minutes prior to the start of the Annual Meeting. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||||
D18335-P41544 | KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY | ||||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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SUPERIOR INDUSTRIES INTERNATIONAL, INC. | For All
☐ | Withhold All
☐ | For All Except
☐ |
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The Board of Directors recommends you vote FOR the following: |
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1. |
Election of Directors |
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Nominees
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03) Richard J. Giromini 08) Ellen B. Richstone | ||||||||||||||||||||||||||||||||||||||||||||||||
04) Paul J. Humphries 09) Francisco S. Uranga | ||||||||||||||||||||||||||||||||||||||||||||||||
05) Ransom A. Langford | ||||||||||||||||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals |
| For | Against | Abstain | ||||||||||||||||||||||||||||||||||||||||||||
2. | To approve, in anon-binding advisory vote, the executive compensation of the Company’s named |
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3. | To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, |
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To act upon such other matters as may properly come before the Annual Meeting or any postponements or |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||||||||||||||||
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Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
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D18336-P41544
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS INDICATED, THE PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS AND FOR THE APPROVAL OF PROPOSALS 2
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Continued and to be signed on reverse side
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