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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☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as Permitted by Rule14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to§240.14a-12 |
Monro, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):all boxes that apply)
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Notice of 20192022 Annual Meeting of
Shareholders and Proxy Statement
August 13, 201916, 2022
Rochester, N.Y.NY 14615
Dear Fellow Shareholders,
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ExecutingDelivering Sales Growth and Earnings Expansion Through Our Monro.Forward Strategy
Our Monro.Forward strategy centers around four pillars, supported by a number of investments in technology and data-analytics, to increase the overall lifetime value for our customers while driving increased consistency and productivity across all locations:
Improving Customer Experience
Enhancing Customer-Centric Engagement
Optimizing Product & Service Offering
Accelerating Productivity & Team Engagement
During Fiscal 2019, we achieved a number of important milestones, including completing our Monro playbook and store refresh pilot at 31 stores in Rochester, New York; broadening our online presence through our collaboration with Amazon.com; launching our data-driven CRM marketing platform and modernized websites; and optimizing our Good, Better, Best service and product packages and store staffing model.Critical Initiatives
We have also identified opportunities to consolidate our retail brand portfolio into five regional power brands. As part of our broader store refresh initiative, we will be leveraging customer data analytics to optimize local brand awareness and banner concentration in targeted markets, shifting selected stores to a tire-oriented banner where we see strong upside opportunity.
Additionally, we intend to continue to capitalize on highly accretive acquisition opportunities in our fragmented industry, with acquisitions announced and completed in Fiscal 2019 representing an expected $132 million in annualized sales. Importantly, we have made significant strides in diversifying and strengthening our store footprint with the recent acquisitions of 12 stores in Louisiana, as well as 40 stores and one distribution center in California, entering two new states. The expansion of our geographic footprint to the West Coast provides us with a strong platform for further expansion into a dynamic and attractive region.
Overall, the strategic initiatives we have accomplished this year have shown strong traction and position us well to capitalize on the opportunities that lie ahead.
Delivering on Our Growth Targets
Our solid financial performance in Fiscal 2019 demonstrates the strength of our growth strategy. We achieved our first full year ofdelivered double-digit comparable store sales growth sincein all of our regions and categories and expanded earnings through our critical staffing, scheduling, and training initiatives in fiscal 20122022. We recruited, trained and deployed 650 new technicians to our stores to meet robust customer demand for our products and services.
Responsibility Driving Monro.Forward
Over the past year, we made good progress on a52-week basis, as well as record salesan array of $1.2 billionESG initiatives and record diluted earnings per sharerecently published our second annual Corporate Responsibility Report on the https://corporate.monro.com/corporateresponsibility section of $2.37,our corporate website. Among our accomplishments, we continued to invest in lineTeammate training and development, advanced our diversity and inclusion efforts, created a long-term community engagement strategy, and enhanced our data privacy and security practices to help keep our Teammates’ and customers’ information safe. As our business grows, so does our commitment to further integrating ESG factors into our strategy and operations. I’m pleased to report that working collaboratively with our guidance. Importantly,Board of Directors, we established two specific ESG-related goals relating to employee safety and energy efficiency. These goals are a tangible example of how ESG factors are embedded in the strategic initiativeseveryday decisions we have implemented acrossare making.
Enhancing the Strength of Our Solid Financial Position
During fiscal 2022, we remained focused on strengthening our business havesolid financial position and liquidity. The tremendous efforts of our team to drive variable margin improvement and our disciplined cost control led to enhancedoperating cash flow generation of $174 million. We are firmly committed to driving strong cash flow that will provide us with ample flexibility to continue implementing our strategic growth initiatives, returning capital to shareholders and pursuing attractive acquisition opportunities to deliver long-term value.
Benefitting from Our in-storeNon-Core executionWholesale Tire and Distribution Assets Divestiture
The divestiture of our non-core wholesale and tire distribution assets to American Tire Distributors (ATD) for an estimated $105 million and our entry into a remarkable improvement in customer satisfaction,supply relationship for tire distribution directly to our stores is expected to give us better availability of tires, quicker delivery and better pricing. Our core strength as evidenced bya business is to provide retail customers with superior automotive products and services. Beyond the financial benefits, this transaction will allow us to focus all of our average4.7-star rating in Fiscal 2019. Building off this strong foundation, weenergies and resources on our Retail operations. In addition, it is also expected to expand our category management initiatives and improve our working capital.
Sharing Our Results Through Capital Return to Our Shareholders
Utilizing the proceeds from the transaction with ATD, along with the excess cash that our Retail operations are confidentexpected to generate will allow us to continue expanding our long-standing policy of sharing our results with our shareholders. Our Board of Directors has approved an increase in our ability to drive further growth incash dividend for the first quarter of fiscal 2020 and beyond to deliver sustainable, long-term value for our shareholders.2023.
EnhancingWe have increased our cash dividend 17 times during the 17 years since a cash dividend was first issued. In addition, our Board has authorized a share repurchase program for the repurchase of up to $150 million of Monro’s common stock.
Driving Long-term Shareholder Value
Returning cash to our shareholders isIn closing, fiscal 2022 was a top commitment for our Company and a key component of what we believe is a disciplined capital allocation strategy. We paid approximately $27 million in dividends in Fiscal 2019 and recently announced a 10% increase in our quarterly dividend, marking the 14th consecutive annual dividend increase since we first initiated a cash dividend 14 years ago.
Promoting Corporate Responsibility
Monro maintains an environmentally and socially conscious corporate culture, as demonstrated by our recycling policies at our offices, warehouses and stores, as well as our support of charitable organizations dedicated to caring for the communities and neighborhoods we serve.
In Fiscal 2019, as part of our commitment to protecting the environment, Monro recycled 3.3 million gallons of oil and 3.0 million tires, as well as approximately 81,000 vehicle batteries and 30 tons of cardboard.
Monro strives to proactively engage with the communities who have enabled our success over the past 62 years, giving back our time, talent and financial resources however possible. During Fiscal 2019, Monro and its teammates donated to a number of charities, including donating approximately $260,000 to the United Way.
Driving Future Growth
In summary, Fiscal 2019 marked a strongfantastic year for Monro as we achieved a number of key milestones in our effortMonro. The Company continued to build a scalable platform for sustainableaccelerate its strategic growth while continuinginitiatives, strengthened its financial position, and returned $35 million to execute on our disciplined acquisition strategy. As we enter fiscal 2020, we believe we are well positioned to carry our momentum forward and deliver another year of solid growth.shareholders. I am confident in our unique business model, coupled withpath forward and believe our strong focus on operational execution will drive long-term value for our shareholders.
Looking Ahead
Monro has made significant progress on our journey to transform this great organization during fiscal 2022, and I believe these accomplishments will be instrumental to our success in unleashing Monro’s full potential in the execution of our Monro.Forward strategy, will allow us to capitalize oncoming year and beyond. As we head into fiscal 2023, we remain encouraged by favorable industry tailwinds and drive long-term shareholder value.robust consumer demand for our products and services. We have a strong foundation to build upon and an exceptional team in place ensuring that we capitalize on the opportunities ahead. The continued dedication of our valued Teammates and our strong commitment to providing a five-star customer experience will remain critical to our success.
On behalf of the Board of Directors and the Monro leadership team,Senior Leadership Team, I would like to thank you for your continued support and confidence.of Monro. I look forward to welcomingspeaking with you at our annual meetingAnnual Meeting on August 13, 2019.16, 2022.
Sincerely,
BrettMichael T. PontonBroderick
President and Chief Executive Officer
July 7, 2022
Cautionary Note Regarding Forward-Looking Statements
This proxy statement contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments, and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by, or including words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “mission,” “plan,” “potential,” “strategy,” “will,” “would,” and variations thereof and similar expressions. Forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed. For example, our forward-looking statements include, without limitation, statements regarding our ability to generate cash flow; our growth and acquisition strategies; and whether we are able to achieve the expected benefits of the divestiture to ATD and supply agreement with ATD.
Any of these factors, as well as such other factors as discussed in our Annual Report on Form 10-K (“Form 10-K”), as well as in our periodic filings with the Securities and Exchange Commission (the “SEC”), could cause our actual results to differ materially from our anticipated results. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to update these forward-looking statements after the date of this proxy statement to reflect events or circumstances after such date, or to reflect the occurrence of unanticipated events.
THE 2019 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS NOTICE
Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholders Meeting to be Held on August 13, 2019: This Proxy Statement and the 2019 Annual Report are available on the Company’s website athttps://corporate.monro.com/investors/financial-information.The notice of meeting, proxy statement and form of proxy card are first being mailed to our shareholders on or about July 16, 2019.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: | Tuesday, August | |
Time: | ||
Location: |
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Record Date: | Monday, June |
Items of Business
1. | Elect |
2. | Approve, on anon-binding, advisory basis, the compensation paid to the Company’s named executive officers; |
3. | Ratify there-appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending March |
4. | Consider any other business as may properly be brought before the meeting or any adjournment or postponement thereof. |
The Board of Directors recommends that you vote “FOR” each of the director nominees included in Proposal No. 1 and “FOR” eachboth of Proposals No. 2 and No. 3.
How to Vote
Using the control number that appears on the Notice of Internet Availability (the “Notice”), you may vote your shares:
By Telephone: You may vote by calling | By Internet:
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By Mail: Mark, sign and date your proxy paid envelope we have provided |
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This communication is notImportant Notice Regarding the Availability of Proxy Materials for the Annual Shareholders’ Meeting to be Held on August 16, 2022: We are following the Securities and Exchange Commission’s “e-proxy” rules that allow public companies to furnish proxy materials to shareholders over the Internet. Instead of a formphysical copy, you have received a Notice of Internet Availability of Proxy Materials, which provides instructions on how to view our proxy materials for votingthe Annual Meeting over the Internet, how to vote, and presents only an overview
how to request a printed copy of the more complete proxy materials. The Company encourages you to review the complete
proxy materials before voting.
Below are the highlights of the important information you will find in this Proxy Statement. As this is only a summary, we request that you please review the full Proxy Statement before casting your vote.
General Meeting Information | |||
| Tuesday, August
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Record Date | Monday, June | ||
Voting | Shareholders of record as of the record date are entitled to vote |
Voting Matters and Board of | ||||||||||
Proposal | Voting Options | Vote Required for | Broker | Board of | ||||||
1. Election of Directors | “FOR” all nominees or “WITHHOLD” your vote for all or any of the nominees | Each nominee for director must receive a majority of the votes cast | No |
| FOR EACH NOMINEE | |||||
2. Advisory Vote to Approve Executive Compensation | “FOR,” “AGAINST” or “ABSTAIN” from voting | Majority of votes cast must vote in favor of this proposal | No | FOR | ||||||
3. Ratification of Appointment of Independent Registered Public Accounting Firm | “FOR,” “AGAINST” or “ABSTAIN” from voting | Majority of votes cast must vote in favor of this proposal | Yes | FOR |
Governance Highlights
We are committed to applying sound corporate governance principles. We believe soundthese governance practices are in the best interests of our shareholders and strengthen accountability within our organization.
Annual Elections | Yes |
| Stock Ownership Guidelines for Directors and Executives | Yes | ||||||||
Independent Board Chair | Yes |
| Anti-Hedging and Pledging Policy | Yes | ||||||||
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Audit, Compensation and Nominating Committee Independence | 100% |
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| Board Member Recruiting Guidelines | Yes | |||||||
Number of Financial Experts | One |
| Regular Executive Sessions of the Independent Board Members | Yes | ||||||||
Board Diversity
| 33% Diverse |
| Anonymous Reporting | Yes | ||||||||
Comprehensive Annual Board and Committee Evaluations | Yes |
| Executive Clawback Policy | Yes | ||||||||
Director Overboarding | No |
| Strategy and Risk Oversight by Board and Committees | Yes | ||||||||
Four New (Three Independent) Directors since 2017
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Our commitment to sound corporate governance practices has been illustrated through a number of actions taken in this past year, including:
Compensation Committee hiredretained Exequity, LLP as its independent compensation advisor;
Selected an enhanced peer groupIssued second annual Corporate Responsibility Report for executive compensation purposes;Fiscal 2022;
Made significant enhancements to the Company’s executive compensation program;
Adopted a DisclosureStrengthened Board oversight of Environmental, Social and External Communications Policy;Governance (ESG) matters, through standing ESG reports by management at every regularly-scheduled Board meeting; and
Launched aEnhanced Board’s self-reporting system to implement new corporate website, with greater transparency and breadthNasdaq rules requiring disclosure of investor information.Board diversity metrics.
Director Nominees
You are being asked to vote to elect the following fourfive director nominees to Class 21 of our Board of Directors. Detailed information about each of these nominees begins on page 6 of the Proxy Statement.
Name
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Age
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Director
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Independent
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Occupation
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Frederick M. Danziger
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79
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1984
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Yes
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Chairman of the Board of Directors of Griffin Industrial Realty, Inc.
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Stephen C. McCluski
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67
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2013
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Yes
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Former Senior Vice President and Chief Financial Officer of Bausch & Lomb Incorporated (Retired)
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Robert E. Mellor
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75
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2010
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Yes
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Chairman of the Board of Directors
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Peter J. Solomon
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80
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1984
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Yes
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Chairman of PJ Solomon, L.P.
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Name | Age | Director Since | Independent | Occupation | ||||||||
John L. Auerbach | 44 | 2017 | Yes | Chief Executive Officer of Uovo Art, LLC | ||||||||
Michael T. Broderick | 53 | 2021 | No | President and Chief Executive Officer of Monro, Inc. | ||||||||
Donald Glickman | 89 | 1984 | Yes | Member of J.F. Lehman & Company | ||||||||
Lindsay N. Hyde | 40 | 2017 | Yes | Entrepreneur in Residence, Moderne Ventures, Senior Lecturer in Residence, Entrepreneurial Management at Harvard Business School | ||||||||
Leah C. Johnson | 58 | 2020 | Yes | Executive Vice President, Chief Communications, Marketing & Advocacy Officer of Lincoln Center for the Performing Arts |
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Board of Directors Overview
Our Board of Directors is currently composed ofeight nine directors, seveneight of whom are independent. The charts below highlight the Board’s composition and experience:
Director Independence
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Gender Diversity
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Executive Compensation Overview
What We Do | What We Don’t Do | |
Pay for Performance – majority of compensation “at risk” | Permit Short Sales by Directors, Officers or Employees | |
Reasonable Post-Employment and Change in Control Provisions | Allow Hedging or Pledging of Company Stock | |
Stock Ownership Guidelines | Offer Change in Control TaxGross-Ups | |
Utilize Independent Compensation Advisor | Permit Repricing of Underwater Options without Shareholder Approval | |
Clawback Policy | Offer Unreasonable Perquisites | |
Annual shareholder “say on pay” vote | No single trigger cash severance based solely upon a change-in-control of the Company | |
Executive benchmarking |
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Elements of Compensation for Fiscal 2019
Monro’s executive compensation program, set forth by the Compensation Committee, is designed to implement our executive pay philosophy to:
Attract, reward and retain talented and experienced executives and other key employees
Motivate our executive officers to achieve short-term and long-term corporate goals that will enhance shareholder value
Support our core values and culture by promoting internal equity and external competitiveness
The objectives and key characteristics of each element of our Fiscal 2019 executive compensation are summarized below:
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GENERAL INFORMATION ABOUT THE MEETING AND VOTING
The Monro, Inc. Board of Directors (the “Board” or the “Board of Directors”) is using this Proxy Statement to solicit proxies from the holders of its common stock for use at the Monro, Inc. 20192022 annual meeting of shareholders and any adjournment or postponement thereof (the “Annual Meeting” or the “meeting”). The noticeNotice of meeting, thisInternet Availability of Proxy StatementMaterials (the “Notice”), which provides instructions on how to view our proxy materials for the Annual Meeting over the Internet, how to vote and how to request a printed copy of the proxy materials and the enclosed form of proxy cardProxy Card are first being mailed to our shareholders on or about July 16, 2019.7, 2022. In this Proxy Statement, we may also refer to Monro, Inc. and its subsidiaries as “Monro,” the “Company,” “we,” “our” or “us.”
Meeting Time and Applicable Dates | This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of Monro, Inc., a New York corporation, of the
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Attending the Annual Meeting | Monro will host the Annual Meeting solely by means of electronic communication via a virtual meeting at
• Instructions on how to attend the Annual Meeting are posted at the website provided above; and • A replay of the Annual Meeting will be available over the Internet for approximately 12 months following the date of the Annual Meeting at the website provided above.
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Matters to be Voted Upon at the Annual Meeting | At the Annual Meeting, holders of record of our common stock as of June
1. To elect
2. To approve, on anon-binding, advisory basis, the compensation paid to our named executive officers;
3. To ratify there-appointment of PricewaterhouseCoopers LLP (“PWC”) as our independent registered public accounting firm for the fiscal year ending March
4. To consider any other business as may properly be brought before the Annual Meeting or any adjournment or postponement thereof.
As of the date of this Proxy Statement, these are the only matters that the Board of Directors intends to present at the Annual Meeting. The Board does not know of any other business to be presented at the Annual Meeting. The Board of Directors recommends that you vote “FOR” proposal Nos. 1 – 3. |
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Participating in the Annual Meeting | Shareholders may ask a question pertaining to the business of the meeting using the web portal during the Annual Meeting. To allow us to answer questions from as many shareholders as possible, we will limit each If a shareholder or guest experiences technical or logistical issues with accessing the virtual web portal, they will be provided a technical support telephone number on the login page of our Virtual Shareholder Meeting site.
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Voting Rights of Holders of Common Stock | Shareholders of record as of the record date are entitled to vote
The voting rights of common shareholders are subject to the voting rights of the holders of the shares of our Class C Convertible Preferred Stock, par value $1.50 per share (“Class C Preferred Stock”).
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Rights of Holders of Class C Preferred Stock | At least 60% of the shares of Class C Preferred Stock must vote as a separate class or unanimously consent to effect or validate any action taken by our common shareholders. Therefore, the Class C Preferred Stock holders have an effective veto over all matters put to a vote of our common shareholders, and could use that veto power to block any matter that our common shareholders may approve at the Annual Meeting.
On the record date, there were
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Voting Instructions for Record Holders | If your shares are registered directly in your name with our transfer agent, then you are a shareholder of record with respect to those shares and you may vote by:
• Calling
• Visiting proxyvote.com before the meeting and inputting the control number shown on your Notice and proxy card;
• completing and returning
• attending the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/MNRO2022and using the electronic voting
Whether or not you plan to attend the Annual Meeting, you should vote as soon as possible. If you plan to vote before the Annual Meeting, your vote must be received by 11:59 p.m. Eastern Daylight Time on August 15, 2022.
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Voting Instructions for Beneficial Owners | If your shares are held in a brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name” and you must instruct the broker, bank or other nominee to vote on your behalf. Please refer to the voting
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BrokerNon-Votes | Brokernon-votes occur when beneficial owners do not give voting instructions to their brokers and the brokers lack the discretionary authority to vote on the proposal. If you are a beneficial owner and do not give instructions to your broker, the broker will determine if it has the discretionary authority to vote on the particular matter.
Under the rules of the New York Stock Exchange, which are also applicable to companies listed on the Nasdaq Stock Market (“Nasdaq”), brokers have the discretion to vote on routine matters such as ratifying the appointment of external auditors, but do not have discretion to vote onnon-routine matters such as electing directors and approving, on an advisory basis, the compensation of our named executive officers.
Brokernon-votes, if any, will be counted for purposes of calculating whether a quorum is present at the meeting, but will not be counted for purposes of determining the number of votes cast with respect to a particular proposal.
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Quorum | A quorum must be present in person or by proxy to hold the Annual Meeting and will exist if a majority of the issued and outstanding shares of our common stock are present in person or by proxy and are entitled to vote at the Annual Meeting.
We will include abstentions and brokernon-votes to determine whether a quorum is present at the Annual Meeting. John A. Heisman and Michael L. Boehme, our inspectors of election for the meeting, will determine whether a quorum is present and will tabulate votes cast by proxy or in person. If we do not have a quorum at the Annual Meeting, we expect to adjourn the meeting until we obtain a quorum.
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Vote Required to Elect Directors | You may either vote for or withhold authority to vote for all or any of the
To be elected, each nominee for director must receive a majority of the votes cast
Votes that are withheld from any nominee count as a vote cast against that nominee. Abstentions and brokernon-votes are not deemed to be votes cast and will therefore not affect this proposal.
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Vote Required to Approve Compensation of Named Executive Officers | You may cast your vote in favor of, against, or abstain from voting to approve, on anon-binding, advisory basis, the compensation paid to our named executive officers.
To be approved, a majority of the votes cast
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Vote Required to Ratify Appointment of PWC | You may cast your vote in favor of, against, or abstain from voting to ratify there-appointment of PWC as our independent registered public accounting firm for the year ending March
To be approved, a majority of the votes cast
There will be no brokernon-votes on this proposal because brokers have discretion to vote shares held in street name on this proposal without specific instructions from the beneficial owner of those shares.
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Revoking a Proxy | A shareholder who has given a proxy may revoke it at any time prior to its exercise by:
• executing and delivering a later-dated proxy;
• submitting a new vote by telephone or via the Internet prior to the Annual Meeting; • providing written notice of the revocation to the Secretary of the Company at the address
• attending the virtual Annual Meeting and voting
Please note that attending the Annual Meeting alone is not enough to revoke a proxy.
If you have instructed a broker, bank or other nominee to vote your shares, you may submit a new, later-dated voting
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Proxy Instructions | All shares of common stock represented by properly executed proxies returned and not revoked will be voted in accordance with instructions you give in the proxy.
If you return a signed proxy but do not indicate voting instructions, your proxy will be voted as recommended by the Board of Directors, or “FOR” the following proposals:
• the election of the
• approving the compensation paid to the Company’s named executive officers;
• ratifying the appointment of PWC as our independent registered public accounting firm for the fiscal year ending March
• in the proxy holder’s best judgment as to any other matters properly brought before the Annual Meeting or any adjournment or postponement thereof.
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Participants in the Proxy Solicitation | This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Monro in connection with the Annual Meeting. The Company will bear the cost of soliciting proxies.
We will reimburse brokers, banks or other nominees for their expenses in forwarding proxies and proxy materials to the beneficial owners of shares held in street name.
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Results of the Annual Meeting | We will report the voting results in a filing with the U.S. Securities and Exchange Commission (“SEC”) on a Current Report on Form8-K within four business days following the conclusion of the Annual Meeting.
If the official results are not available at that time, we will provide preliminary voting results and will provide the final results in an amendment to the Form8-K as soon as practicable after they become available.
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Availability of Proxy Materials | We are Our proxy materials, including the Notice, this proxy statement, your proxy card, and our Copies of this In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the environmental impact of the printed materials.
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Multiple Copies of Proxy Materials | You may receive more than one
For more information, see the section entitled, “Notice Regarding
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Contact for Questions | If you have any questions or need assistance in voting your shares, please contact us at the address and phone number below.
Secretary Monro, Inc. 200 Holleder Parkway Rochester, NY 14615 (585)647-6400
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BOARD RESPONSE TO SHAREHOLDER PROPOSAL REGARDING RECAPITALIZATION PLAN
At the 2021 annual meeting of shareholders, the shareholders voted on a proposal submitted by Ides Capital Management LP. That proposal requested that the Board take all practicable steps in its control to initiate and adopt a recapitalization plan for all outstanding stock to have one vote per share in each voting situation and eliminate any veto power held by one class of stock over the voting power of another class of stock. Shareholders submitted 26,301,725 votes in favor of that proposal, or approximately 88% of the shares voted on that proposal at the meeting. However, the holders of our Class C Preferred Stock did not vote in favor of the proposal, such that it could not be effected or validated.
Based on the overwhelming support of our common shareholders for the proposal, independent members of the Board of Directors and our management team engaged with shareholders who collectively owned in excess of 50% of our outstanding shares of common stock to discuss the vote and solicit their views on the 2021 shareholder proposal to eliminate the Class C Preferred Stock control rights.
The Company’s dual class capital structure consisting of common shares and the Class C Preferred Stock has been in place since 1984. Since its initial public offering in 1991, the Company has consistently provided full disclosure regarding the control rights of the Class C Preferred Stock to new and existing shareholders to inform their investment decisions regarding the Company’s common stock. The Board has carefully considered the results of the shareholder proposal, and continues to analyze both the costs and benefits of recapitalizing the Company’s dual class stock. The Company does not have the right or power to unilaterally “recapitalize” its equity capital structure to eliminate the Class C Preferred Stock whether by conversion, buyback, redemption or amendment of the Company’s Restated Certificate of Incorporation, but rather can only do so with the approval of the holders of the Class C Preferred Stock. Consequently, in weighing the costs and benefits of any such recapitalization, the Board has considered a number of factors, including the likely significant consideration required to be paid to obtain the requisite consent of the holders of the Class C Preferred Stock as well as the other risks that such a recapitalization and the attendant changes in governance could pose to the Company. Our Board of Directors will continue to monitor and consider shareholder concerns regarding our equity capital structure. At this time, the Board believes that it is in the best interests of all of its shareholders that the Company focus its financial and other resources in pursuit of its plans to maximize long-term shareholder value for all shareholders without the financial, legal and other risks that would result from a recapitalization.
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PROPOSAL NO. 1 — ELECTION OF CLASS 1 DIRECTORS
Our Board of Directors consists of eightnine directors, divided into two classes: fourfive directors in Class 1 and four directors in Class 2. The Class 21 directors will serve until the Annual Meeting and the Class 12 directors will serve until the 20202023 annual meeting of shareholders, or until their respective successors have been duly elected and qualified. FourFive directors are nominated for reelectionelection at the Annual Meeting. The Nominating and Corporate GovernanceResponsibility Committee has assessed and recommended each nominee for election to our Board of Directors.
Set forth below for each nominee for election as a director is a brief statement about the nominee’s age, principal occupation and business experience, including any directorships with any other public companies, describing the specific individual qualities and skills of each nominee that contribute to the overall effectiveness of the Board of Directors and its committees. Each nominee has consented to being named as a nominee and to serve as a director if elected. Although we do not anticipate that any of the nominees named will be unable to serve if elected, the votes will be cast for a substitute nominee selected by the Board of Directors unless the number of directors to be elected has been reduced to the number of nominees willing and able to serve on our Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THESE NOMINEES:NOMINEES TO CLASS 1:
Name
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Frederick M. Danziger | 79 | 1984 | Yes | Chairman of the Board of Directors of Griffin Industrial Realty, Inc.
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Stephen C. McCluski | 67 | 2013 | Yes | Former Senior Vice President and Chief Financial Officer of Bausch & Lomb Incorporated (Retired)
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Robert E. Mellor
| 75 | 2010 | Yes | Chairman of the Board of Directors | |||||||||||||
Peter J. Solomon
| 80 | 1984 | Yes | Chairman of PJ Solomon, L.P. |
Name
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John L. Auerbach | 44 | 2017 | Yes | Chief Executive Officer of Uovo Art, LLC
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Michael T. Broderick | 53 | 2021 | No | President and Chief Executive Officer of Monro, Inc.
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Donald Glickman | 89 | 1984 | Yes | Member of J.F. Lehman & Company
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Lindsay N. Hyde | 40 | 2017 | Yes | Entrepreneur in Residence, Moderne Ventures Senior Lecturer, Harvard Business School
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Leah C. Johnson | 58 | 2020 | Yes | Executive Vice President, Chief Communications, Marketing & Advocacy Officer of Lincoln Center for the Performing Arts
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Set forth below is a summary of the biographical information for each of the Class 21 director nominees:
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The Board of Directors recommends that you vote “FOR” each of the director nominees listed above.
Set forth below is a summary of the biographical information for each of the continuing Class 1 directors:
John L. Auerbach Age: Director since: 2017
Committees: Compensation | Principal Occupation: Chief Executive Officer of Uovo Art, LLC Business Experience:
•
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• Founder
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• Former senior vice president of Digital & Global eCommerce at Kate Spade & Company
• Former
Current and Former Directorships: •
• Former chairman, Eloquii Design, Inc. | ||||||
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Skills and Expertise:
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• Knowledge and extensive operational experience in |
7 |
Michael T. Broderick Age: 54 Director since: 2021 Committees: Executive | Principal Occupation: President and Chief Executive Officer of Monro, Inc. (Nasdaq: MNRO) Business Experience: • Former executive vice president of merchandising and store operations support at Advance Auto Parts (NYSE: AAP) • Former senior vice president of the automotive division of Canadian Tire Corporation (CTC-A.TO) • Former chief executive officer of Federal Mogul Corporation (Nasdaq: FDML) | |||||
Skills and Expertise: • Knowledge in store operations, category management, mergers and acquisitions, strategic development and execution and risk management • Leadership skills as a senior officer of several different companies • Experience in corporate governance best practices of other major corporations |
Donald Glickman Age: Director since: 1984
Committees: Finance (Chair) Executive | Principal Occupation: Member of J.F. Lehman & Company
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Business Experience:
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• Private investor
• Former trustee of Babson Corporate Investors and Babson Participation Investors
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Current and Former Directorships:
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• Former lead director of MSC Software Corporation | ||||||
Skills and Expertise:
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• Knowledge in banking and financial services, accounting and finance, capital markets, government regulations, mergers and acquisitions,
• Leadership skills as a senior officer in various investment banking firms
• Experience in corporate governance best practices of other major corporations |
Lindsay N. Hyde Age: Director since: 2017
Committees: Audit Nominating and Corporate Responsibility | Principal Occupation: Entrepreneur in
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Business Experience:
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• Founder and former
• Founder and former executive director of Strong Women, Strong Girls, a nationally recognized mentoring organization
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Current and Former Directorships:
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• Former elected director of the Harvard Alumni Association
• Former director of Coca-Cola Scholars Alumni Foundation | ||||||
Skills and Expertise:
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• Experience in service delivery, marketing, strategic development and execution
• Knowledge in risk management
• Entrepreneurial leadership and approach
• Community engagement and culture |
Brett T. Ponton
Age: 49
Director since: 2017
Committees:
Executive (Chair)
Principal Occupation: President and Chief Executive Officer of Monro, Inc.
Business Experience:
• Former president and chief executive officer of American Driveline Systems, Inc. (parent company of AAMCO Transmissions Inc., Cottman Transmission Systems, LLC and Global Powertrain Systems, Inc.)
• Former president and chief executive officer of Heartland Automotive Services, Inc., the largest operator of Jiffy Lube stores in North America
• Former executive at The Goodyear Tire & Rubber Company
Current and Former Directorships:
• None
Skills and Expertise:
• Knowledge in marketing, store operations, strategic planning, finance and accounting and risk management
• Leadership skills as a senior officer of several different companies
8 |
Leah C. Johnson Age: 58 Director since: 2020 Committees: None | Principal Occupation: Executive Vice President, Chief Communications, Marketing & Advocacy Officer of Lincoln Center for the Performing Arts, an internationally renowned performing arts institution Business Experience: • Founder and former chief executive officer of LCJ Solutions, LLC, a strategic communications consulting firm • Former senior vice president, Global Corporate Affairs at Citigroup, Inc. • Former vice president of corporate communications at S&P Global Ratings (previously, Standard & Poor’s) Current and Former Directorships: • Former director of Pluralsight, Inc. • Current trustee of The Trust for Cultural Resources of the City of New York • Current trustee of the Museum of the City of New York • Current vice chair of the Board of Trustees at New York Public Radio | |||||
Skills and Expertise: • Knowledge and operational experience in corporate strategy and communications, public affairs, marketing, change management, and diversity and inclusion • Entrepreneurial leadership and approach • Community engagement and culture |
The Board of Directors recommends that you vote “FOR” each of the director nominees listed above.
Set forth below is a summary of the biographical information for each of the continuing Class 2 directors:
Frederick M. Danziger Age: 82 Director since: 1984 Committees: Compensation (Chair) Audit Nominating and Corporate Responsibility | Principal Occupation: Retired. Director of Indus Realty Trust, Inc. (Nasdaq: GRIF), a publicly traded real estate firm and Bloomingdale Properties, Inc. Business Experience: • Former chief executive officer of Griffin Industrial Realty, Inc. • Formerly held Of Counsel position with Latham & Watkins LLP Current Directorships: • Current director of Bloomingdale Properties, Inc. • Current director of Indus Realty Trust, Inc. | |||||
Skills and Expertise: • Knowledge of legal and regulatory matters, risk management, strategic development and execution, accounting and finance • Leadership skills • Experience in corporate governance best practices of other major corporations |
9 |
Stephen C. McCluski Age: 70 Director since: 2013 Committees: Audit (Chair) Compensation Finance Nominating and Corporate Responsibility | Principal Occupation: Former senior vice president and chief financial officer of Bausch & Lomb Incorporated (Retired) Business Experience: • Former senior vice president and chief financial officer of Bausch & Lomb Incorporated • Former vice president and controller of Bausch & Lomb Incorporated Current and Former Directorships: • Current chairman of the Board of Directors and member of the audit committee of ImmunoGen, Inc. (Nasdaq: IMGN) • Former director of Standard Microsytems Corporation | |||||
Skills and Expertise: • Knowledge in finance, risk management, mergers and acquisitions, strategic planning, and financial reporting, accounting and controls |
Robert E. Mellor Age: 78 Director since: 2010 Committees: Nominating and Corporate Responsibility (Chair) Compensation Executive | Principal Occupation: Chairman of the Board of Directors Business Experience: • Interim chief executive officer of Monro, Inc. from August 2020 to April 2021 • Former director of Ryland Group, Inc. • Former lead independent director of Board of Monro, Inc. • Former chairman of the Board of Directors and chief executive officer of Building Materials Holding Corporation (“BMHC”), provider of the distribution, manufacturing and sale of building materials and component products Current and Former Directorships: • Current Non-Executive Chairman of the Board of Directors of Coeur Mining, Inc. (NYSE: CDE) • Former Director of CalAtlantic Group, Inc. • Former Chairman of the Board of Directors of BMHC Stock Holdings, Inc. | |||||
Skills and Expertise: • Knowledge in legal and regulatory matters, mergers and acquisitions, risk management, real estate, strategic development and execution, accounting and finance • Experience in corporate governance best practices of other major corporations |
Peter J. Solomon Age: 83 Director since: 1984 Committees: Finance Executive | Principal Occupation: Chairman of PJ Solomon, L.P., an investment banking firm, and independently operated affiliate of Natixis, part of Groupe BPCE, a top 10 European and a top 20 global bank Business Experience: • Chairman of PJ Solomon, L.P., an investment banking firm Current and Former Directorships: • Former member of Boards of Director of Associate Dry Goods Corporation, Culbro Corporation, Edison Brothers Stores, Inc., Esquire, Inc., Handyman Corporation, Lawfin International Limited, LIN Broadcasting Corporation (now known as LIN Media, LLC (NYSE: LIN)), Office Depot, Inc. (Nasdaq: ODP), Phillips-Van Heusen Corporation (now known as PVH Corp. (NYSE: PVH)), The Miller-Wohl Company and The Stop & Shop Supermarket Company. | |||||
Skills and Expertise: • Knowledge in banking and financial services, capital markets, government regulations, mergers and acquisitions, strategic development and execution and risk management • Leadership skills shown throughout business career and government service • Experience in corporate governance best practices of other major corporations |
10 |
CORPORATE GOVERNANCE PRACTICES AND POLICIES
Corporate Responsibility
Monro’s Corporate Responsibility (CR) efforts are an important lens through which we identify Environmental, Social and Governance (ESG) risks and opportunities that could meaningfully impact our business over the long term.
As part of our commitment to transparency and accountability, formalizing our CR strategy and objectives is a top priority for senior management and the Board. In furtherance of these objectives, we have published our second Corporate Responsibility Report located at https://corporate.monro.com/corporateresponsibility. Information available in the report and on our website is not a part of, and is not incorporated into, this proxy statement. The report highlights key areas of focus and progress during Fiscal 2022 within our priority ESG topic areas: Teammates, customers, communities and the environment.
Included in the report is a mapping to certain metrics of the Sustainability Accounting Standards Board’s (SASB) Multiline & Specialty Retailers and Auto Parts industries. We will continue to enhance our disclosures in order to better inform stakeholders on Monro’s ESG-related risks, opportunities, management strategies and performance throughout Fiscal 2022 and beyond.
Fiscal 2022 Highlights
ESG Oversight. The Company’s Executive Vice President — Chief Legal Officer leads management’s efforts to increase our focus and transparency in this area, with input from, and collaboration with, other members of the Senior Leadership Team. The Board’s Nominating and Corporate Responsibility Committee has primary oversight responsibility for ESG-related matters, including risks related to climate change, human capital management, diversity, stakeholder relations, and health, safety and the environment.
Teammate Development and Safety. We continued to enhance Teammate engagement and prioritize safety by conducting more robust and structured training. Through the Company’s Monro University online learning management system, in Fiscal 2022, employees logged approximately 52,000 hours of professional development and technical training. Our safety efforts have reduced workers’ compensation claims by an average of 32 percent. We’ve also set a 5-year safety goal of a 30% reduction in workers’ compensation frequency claim rate, using a base year of fiscal 2023.
Diversity, Equity and Inclusion. We continued to foster diversity, equity and inclusion at all levels of the company through our training and recruiting initiatives. Our objective is to have a workforce and leadership team that closely resembles our growing group of loyal customers we are working hard to attract and retain.
Communities. This year our internal Community Impact Committee derived a long-term roadmap, with a new strategy of bringing forth a vision that focuses on 3 pillars of community engagement: economic and food security, education of youth and family services, and veterans’ services. These three pillars, we feel, get to the heart of issues faced by our communities.
Environment. Being good stewards of the environment is important toMonro. The Company has implemented energy saving initiatives such as LED lighting and energy efficient signage as part of our store refresh plan and have set a 5-year goal of having 100% LED lighting in our company-owned stores. In Fiscal 2022, we recycled 2.6 million gallons of oil, 3.4 million tires, 78,000 vehicle batteries and 316 tons of cardboard.
We have a Code of Ethics that applies to all of our directors and executive officers, including our principal executive officer, principal financial officer and principal accounting officer or controller. The Code of Ethics is publicly available on our website at https://corporate.monro.com/investors/corporate-governance. We intend to post any amendments to or waivers from the Code of Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer on our website.
11 |
Board Matters
Board Meetings
The Board of Directors held four meetings during the year ended March 26, 2022 (“Fiscal 2022”). During the fiscal year, each director attended at least 75% of the aggregate number of all meetings of the Board of Directors and committees on which he or she served. All attended last year’s annual meeting of shareholders and we expect all directors and nominees to attend the Annual Meeting, as is our stated policy in our Corporate Governance Guidelines.
At least annually, the Board of Directors meets to review management succession planning, as well as our overall executive resources. In addition, our independent directors meet regularly in executive sessions, over which our Chairman, Robert E. Mellor, presides.
Board and Committee Independence
The Board of Directors determines whether each of our directors is considered independent. For a director to be considered independent, the director must meet the bright-line independence standards under the Nasdaq listing standards. The Board of Directors must also affirmatively determine that the director has no relationship with the Company that would interfere with the director’s exercise of independent judgment in carrying out the director’s responsibilities. In addition to the Nasdaq listing standards, the Board of Directors will consider all relevant facts and circumstances in determining whether a director is independent. The Board of Directors also considers all commercial, industrial, banking, consulting, legal, accounting, charitable, familial or other business relationships any director may have with the Company. There are no family relationships among any of our directors and executive officers. The Board has determined that the following nominees and directors satisfy the independence requirements of Nasdaq: John L. Auerbach, Frederick M. Danziger, Donald Glickman, Lindsay N. Hyde, Leah C. Johnson, Stephen C. McCluski, Robert E. Mellor, and Peter J. Solomon.
Lead Independent Director
The Board of Directors does not have a policy on whether or not the roles of Chief Executive Officer and Chairman of the Board should be separate and, if they are to be separate, whether the Chairman of the Board should be anon-employee director or an employee. The Board of Directors believes that it should be free to make a choice regarding its leadership structure from time to time in any manner that is in the best interests of the Company and its shareholders. Under the Company’s bylaws, the Board of Directors may elect a Chairperson of the Board to preside at all meetings of the shareholders and directors and to perform other duties as the Board may elect. Pursuant to our Corporate Governance Guidelines, if the Chairperson is not an independent director, the independent members of the Board of Directors will designate a lead independent director, responsible for conducting executive sessions of the independent directors. Robert E. Mellor, an independent director, currently serves as Chairman of the Board. As such, we do not have a lead independent director at this time.
Board Committees and MeetingsDiversity Matrix
The Board of Directors held five meetings during the year ended March 30, 2019 (“Fiscal 2019”). During the fiscal year, each director attended at least 75%table below provides certain highlights of the aggregate numbercomposition of all meetingsour Board as of June 27, 2022. Each of the Board of Directors and committees on which he or she served. All attended last year’s annual meeting of shareholders and we expect all directors and nominees to attendcategories listed in the Annual Meeting,table below has the meaning as it is our stated policyused in our Corporate Governance Guidelines.Nasdaq Rule 5605(f).
At least annually, the Board of Directors meets to review management succession planning, as well as our overall executive resources. In addition, ournon-management independent directors meet regularly in executive sessions. Our Chairman and former lead independent director, Mr. Mellor, has presided over these executive sessions since fiscal 2012.
Board Diversity Matrix (As of June 27, 2022) |
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Total Number of Directors | 9 | |||||||||||||||||||
Female | Male | Non-Binary | Did not Disclose Gender | |||||||||||||||||
Part I: Gender Identity |
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Part II: Demographic Background |
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LGBTQ+ | 1 | |||||||||||||||||||
Did not Disclose Demographic Background | 3 |
Board Committees
The of the Board of Directors has created five standing committees: a four-member Executive Committee, a four-member Audit Committee, a four-member Compensation Committee, a three-member Finance Committee and a three-member Nominating and Corporate Governance Committee. The Board has adopted a formal, written charter for each
Each of the Committees (exceptfollowing Board committees, except for the Executive Committee),Committee, functions under a written charter adopted by the Board, copies of which each committee operates. The charters can be found inare available on the Investor Information –— Corporate Governance sectionpage of the Company’sour website, atcurrently https://corporate.monro.com/investors/corporate-governance., and to any shareholder who requests them. As a matter of routine corporate governance, each committee, except for the Executive Committee, reviews its charter and practices on an annual basis. In Fiscal 2019,2022, each committee determined that its charter and practices were consistent with listing standards of Nasdaq.
The current members, responsibilities and the number of meetings held in Fiscal 2022 of each of these committees are shown below:
Audit Committee Committee Members Stephen C. McCluski* (Chair) Frederick M. Danziger Lindsay N. Hyde Number of meetings in 2022: 7 * Audit Committee Financial Expert | Key Responsibilities • Monitoring, and assisting the Board in its oversight of, the integrity of our financial accounting and reporting processes; • Selecting, retaining, determining the compensation for, and monitoring the independence, qualification and performance of our independent registered public accounting firm; • Reviewing the performance of our internal auditors; • Monitoring our systems of internal controls regarding finance, accounting, legal and regulatory compliance and compliance with our Code of Ethics; and • Providing an avenue of communication among the independent registered public accounting firm, management, internal auditors and the Board. Independence and Financial Literacy • The Board has determined that each member of the Audit Committee is independent as defined by the Nasdaq listing standards and SEC rules applicable to Audit Committee members. • All members of the Audit Committee satisfy the Nasdaq’s financial literacy requirement. • The Board has determined that Mr. McCluski is an audit committee financial expert (as defined by SEC rules) and qualifies as financially sophisticated under the Nasdaq rules as a result of his knowledge, abilities, education and experience. |
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C = Committee chairperson; X = Committee member
Audit Committee
The Audit Committee of the Board of Directors (the “Audit Committee”) is composed of four independent directors: Stephen C. McCluski, Chairman, Frederick M. Danziger, Lindsay N. Hyde and Robert E. Mellor. Each member of the Audit Committee is an independent director as defined by rules of the SEC and Nasdaq. In addition, the Board of Directors has determined that Stephen C. McCluski is an audit committee financial expert as defined by SEC rules. The Audit Committee held seven meetings in Fiscal 2019.
The Audit Committee has the sole power and authority to select and engage independent auditors for the Company. The Audit Committee reviews with the auditors and with the Company’s management all matters relating to the annual audit of the Company.
Compensation Committee
The Compensation
Committee Members
Frederick M. Danziger (Chair)
John L. Auerbach
Stephen C. McCluski
Robert E. Mellor
Number of meetings in 2022: 3
Key Responsibilities
• Reviewing and approving, together with the other independent members of the Board, the annual compensation for our CEO and non-CEO executive officers;
• Reviewing and approving the overall compensation strategy and program structure for employees;
• Reviewing and making recommendations to the Board with respect to the total compensation of Directors (the “Compensation Committee”) is composedthe non-employee directors, our incentive compensation plans and equity-based plans; and
• Overseeing risk management of four independent directors: Frederick M. Danziger, Chairman, John L. Auerbach, Robert E. Mellorour compensation programs.
Independence and Stephen C. McCluski. EachAuthority
• The Board has determined that each member of the Compensation Committee is an independent director as defined by the rules ofNasdaq listing standards and the SEC and Nasdaq.rules.
The Compensation Committee has the power and authority to review and approve the remuneration arrangements for the Company’s executive officers and certain employees. The Compensation Committee also interprets and administers our employee benefit plans, including by selecting participants and approving awards under those plans.
• The Compensation Committee has the power and authority to form, and delegate authority to, subcommittees. The Compensation
13 |
Nominating and Corporate Responsibility Committee Committee Members Robert E. Mellor (Chair) Frederick M. Danziger Lindsay N. Hyde Stephen C. McCluski Number of meetings in | Key Responsibilities • Identifying and recommending to the Board candidates for election and to serve on the Board; • Board and Key management succession planning; • Providing oversight with respect to corporate governance matters; and • Primary oversight of the Company’s corporate responsibility (ESG) programs and initiatives. Independence • The Board has determined that each member of the Nominating and Corporate Responsibility Committee is independent as defined by the Nasdaq listing standards and SEC rules. |
Finance Committee Committee Members Donald Glickman (Chair) Stephen C. McCluski Peter J. Solomon Number of meetings in 2022: 2 | Key Responsibilities • Reviewing and making recommendations to the Board regarding our short- and long-term financing plans and the financing of transactions that may have a material impact on our financial profile; • Reviewing management’s process for assessing the financial returns from acquisitions; • Considering and making recommendations to the Board on our dividend policy and practices and the issuance and repurchase of shares, if any; • Reviewing our use of financial instruments, hedging arrangements and strategies to manage and mitigate exposure to financial and market risks; and • Reviewing the financial performance and funding requirements of the defined benefit pension plan. |
Executive Committee
Committee Members Michael T. Broderick (Chair) Donald Glickman Robert E. Mellor Peter J. Solomon Number of meetings in 2022: 12 | Key Responsibilities • Acting in place of the Board
• approve any action requiring shareholder approval;
• fill vacancies on the Board of Directors;
• fix compensation of directors or executive officers;
• engage our independent registered public accounting firm; or
• repeal, amend or adopt new bylaws. |
14 |
Board of Directors’ Role in Risk Oversight
One of the most important functions of the Board is oversight of risks inherent in the operation of the Company’s business. Senior management is responsible for the day-to-day management of risks facing the Company. The Board implements its risk oversight function both as a whole and through delegation to Board committees. The Board is responsible for ensuring an appropriate culture of risk management exists within the Company, overseeing the Company’s aggregate risk profile and monitoring how the Company addresses specific risks. The Board receives regular reports from officers on particular risks to the Company, reviews the Company’s strategic plan, and regularly communicates with its committees. Each committee meets with key management personnel and representatives of outside advisors to oversee and manage these risks. For example, the Director of Internal Audit and the General Counsel meet with the Audit Committee to discuss financial, legal and regulatory risks. Management has designed reporting processes to provide visibility to the Board of Directors about identifying, assessing and managing critical risks to the Company and management’s risk mitigation strategies.
During Fiscal 2022, Company management, along with the Compensation Committee, considered whether any of the Company’s compensation policies and practices has the potential to create risks that are reasonably likely to have a material adverse effect on the Company. Management considered the risk profile of the Company’s business and the design and structure of its compensation policies and practices. The results of Management’s review were reported to the Compensation Committee. For Fiscal 2022, management concluded, and the Compensation Committee agreed, that the risks arising from its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
15 |
Certain Relationships and Related Party Transactions
Review and Approval of Related Person Transactions
We review all relationships and transactions in which we and any of our directors, executive officers or their immediate family members are participants to determine whether those persons have a direct or indirect material interest in the relevant transaction. Our finance and legal staff are primarily responsible for developing and implementing processes and controls to gather information about potential related party transactions from our directors and executive officers. This includes the utilization of a robust questionnaire process for all Board members and executive officers. Then, based on the facts and circumstances, that group determines whether any of the Company’s compensation policies and practices has the potential to create risks that are reasonably likely to have a material adverse effect on the Company. Management considered the risk profile of the Company’s business and the design and structure of its compensation policies and practices. The results of Management’s review were reported to the Compensation Committee. For Fiscal 2019, management concluded, and the Compensation Committee agreed, that the risks arising from its compensation policies and practices are not reasonably likely to have a material adverse effect on the Company or a related person has a direct or indirect material interest in the transaction. If our finance and legal staff determine that the Company or a related person has a direct or indirect material interest in a transaction, then the Audit Committee, or other board committee comprised solely of independent directors, must approve or ratify the transaction. There were no reportable related person transactions during Fiscal 2022.
The Nominating and Corporate Responsibility Committee is responsible for identifying, screening and recommending candidates for membership on the Board of Directors pursuant to the Company’s Corporate Governance Guidelines, as approved by the Board of Directors. The Nominating and Corporate Responsibility Committee’s Charter includes an affirmative statement that the Committee’s will endeavor to include diverse candidates, including those who self-identify as female, underrepresented minorities or LGBTQ+, in each pool of Board candidates. The Committee’s goal is to nominate candidates from a broad range of experiences and backgrounds who can contribute to the Board of Directors’ overall effectiveness in meeting its responsibilities. In assessing potential new directors, the committee considers individuals from various disciplines and diverse backgrounds, taking into account gender, age and ethnicity. The Nominating and Corporate Responsibility Committee, at the direction of the Board of Directors, has taken meaningful steps to seek to identify one or more potential diverse nominees for director who, like any other nominee, satisfy the Company’s director qualification standards, including the appropriate experience and demonstrated commitment to the Company. The selection of qualified directors is complex and crucial to our long-term success. Candidates for nomination to the Board of Directors are considered based upon various criteria, such as their broad-based business skills and experiences, a global business perspective, concern for the long-term interests of our shareholders, and personal integrity and judgment. In addition, directors must have time available to devote to Board activities and to enhance their knowledge of Monro and the automotive service industry.
The Nominating and Corporate Responsibility Committee will consider recommendations from shareholders of potential candidates for the Board of Directors and will evaluate candidates recommended by shareholders in the same manner as it evaluates candidates recommended by Board members, senior officers or search firms. A shareholder wishing to recommend a potential candidate must submit the recommendation in writing, addressed to the Secretary, Monro, Inc., 200 Holleder Parkway, Rochester, NY 14615, Attention: Nominating and Corporate Responsibility Committee, so that the Secretary receives the recommendation not less than 120 days and not more than 180 days prior to the next annual meeting of shareholders. Each recommendation must include the information required by the Certificate of Incorporation for shareholders submitting a nomination. You may obtain additional information and a copy of the Certificate of Incorporation by submitting a written request to the Secretary of the Company at the address above.
In addition to satisfying the advance notice requirements in order to comply with the universal proxy rules (once effective) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to our Corporate Secretary that sets forth the information required by Rule 14a-19 under the Exchange Act no later than June 17, 2023.
Shareholders wishing to communicate with our non-management directors may send a letter to: Secretary, Monro, Inc., 200 Holleder Parkway, Rochester, NY 14615, Attention: Non-Management Directors. All correspondence sent to that address will be delivered to the appropriate directors on a quarterly basis, unless the Secretary otherwise determines that it should be delivered more promptly. The Secretary will promptly direct any concerns relating to accounting, internal controls, auditing or officer conduct to the Chair of the Audit Committee. All correspondence to non-management directors will be acknowledged by the Secretary and may also be forwarded within Monro to a subject matter expert for investigation. Alternatively, communication with non-management directors may occur as outlined in the section entitled “Administration — Reporting Violations” in our Code of Ethics, which is publicly available on our website at https://corporate.monro.com/investors/corporate-governance.
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The Company does not pay any director who is also an employee of Monro or its subsidiaries for his or her service as director. In Fiscal 2022, non-employee directors received the following compensation:
$40,000 annual retainer; a $30,000 annual retainer for the Board Chair, as well as the Chairs of the Audit Committee and the Finance Committee; a $15,000 annual retainer for the Compensation Committee Chair and a $10,000 annual retainer for the Nominating and Corporate Responsibility Committee Chair;
a grant of 2,351 shares of restricted stock on the date of the 2021 annual meeting of shareholders, determined by dividing $130,000 by $55.29, the closing price of a share of our common stock on the date of the 2021 annual meeting of shareholders;
$3,000 for each meeting of the Board of Directors and $1,000 for each committee meeting attended; and reasonable travel expenses to attend meetings, if applicable.
Director Stock Ownership Guidelines The Board of Directors adopted the Monro, Inc. Stock Ownership Guidelines to, among other things, further engage certain senior executives and the members of the Board in the long-term success of the Company. The Company’s stock guidelines for itsnon-employee directors are as follows:
As of March The following table summarizes the compensation that the Company’snon-employee directors earned for services as members of the Board of Directors and any committee of the Board of Directors during Fiscal Director Compensation Table
The restricted stock awarded to directors vests over a
Anti-Hedging and Pledging Policy We prohibit our directors from engaging in transactions in our securities involving publicly traded options, short sales and hedging transactions because they may create the appearance of unlawful insider trading and, in certain circumstances, present a conflict of interest. In addition, our insider trading policy prohibits directors from pledging our securities as collateral for a loan or holding our securities in a margin account unless the margin feature is not utilized or our securities are otherwise excluded from being pledged.
Elements of Compensation for Fiscal 2022 Monro’s executive compensation program, set forth by the Compensation Committee, is designed to implement our executive pay philosophy to: Attract, reward and retain talented and experienced executives and other key employees Motivate our executive officers to achieve short-term and long-term corporate goals that will enhance shareholder value Support our core values and culture by promoting internal equity and external competitiveness The objectives and key characteristics of direct elements of our Fiscal 2022 executive compensation are summarized below:
The table and biographies below identify our current executive officers, the term they have served with us and their business experience:
Brian J. D’Ambrosia was promoted to Executive Vice President — Finance, Chief Financial Officer and Treasurer in April 2018. Before that, since January 2017, Mr. D’Ambrosia served as Senior Vice President — Finance, Chief Financial Officer and Treasurer, and was appointed Assistant Secretary in May 2017. Mr. D’Ambrosia was Vice President — Finance from May 2016 to December 2016. From January 2013 to May 2016, Mr. D’Ambrosia was Vice President — Controller and was named Chief Accounting Officer in December 2015. From August 2010 to January 2013, Mr. D’Ambrosia, a certified public accountant, was Regional Controller — Americas Process Solutions Group at Robbins & Myers, Inc., a publicly held manufacturer of engineered equipment and systems in the global energy and industrial markets. From August 2005 to July 2010, Mr. D’Ambrosia held various accounting and finance positions with Birds Eye Foods, Inc., including Controller-Accounting, Reporting and Planning and Controller-Operations Accounting. From September 2003 to August 2005, Mr. D’Ambrosia was Chief Financial Officer at Rochester Sports Group, a company in the sports entertainment industry. Mr. D’Ambrosia was previously an Audit Manager with Deloitte & Touche, LLP, in Rochester, New York, and was affiliated with that firm from 1997 to 2003.
Maureen E. Mulholland was promoted to
business models. Prior to joining the Company, Mr. Rajkowski served as the Chief Operating Officer of AAMCO Transmission and Total Car Care since February 2014. He also previously served as Chief Marketing Officer at Heartland Automotive Services (Jiffy Lube) from July 2010 to January 2014 and as a General Manager — Retail Stores at The Goodyear Tire & Rubber Company.
PROPOSAL NO. 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
We urge shareholders to read the “Compensation Discussion and Analysis,” below, which details how our executive compensation programs and policies are designed to achieve our compensation objectives, as well as the 2022 Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of our
The Compensation Committee, along with the Board, believe that the policies, procedures and amounts of compensation discussed here, and described further in this Proxy Statement, are effective in achieving the desired goals of aligning our executive compensation structure with the interests of our shareholders. To indicate approval of our executive compensation, a majority of the votes cast must vote in favor of the proposal. This Say on Pay vote is advisory and therefore is not binding on the Company, the Compensation Committee or our Board.
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED on anon-binding basis.” We currently hold this vote on an annual basis. The next vote is expected to be held at the THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” APPROVING THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
Compensation Discussion and Analysis This compensation discussion and analysis (the “CD&A”) describes our executive compensation programs and explains how the Compensation Committee of the Board of Directors (the “Committee”) made its compensation decisions for our named executive officers for the fiscal year ended March
The list of Interim President and Chief Executive Officer (our “Interim CEO”), Robert E. Mellor;
President and Chief Executive Officer (our “CEO”),
Executive Vice President
The following discussion and analysis should be read in conjunction with the tabular disclosures regarding the compensation of our Named Executive Officers in Fiscal Executive Summary Compensation Philosophy and Objectives Our executive compensation program is overseen and administered by the Committee, which is comprised entirely of independent directors as determined in accordance with Our compensation program is intended to meet three principal objectives: (1) attract, reward and retain officers and other key employees; (2) motivate these individuals to achieve short-term and long-term corporate goals and enhance shareholder value; and (3) support our core values and culture by promoting internal equity and external competitiveness. To meet these objectives, the Committee has adopted the following overriding policies:
Pay compensation that is competitive with the practices of other leading automotive and retail companies; and
The above policies guide the Committee in determining the proper allocation between
Shareholder Engagement We believe that it is important for us to communicate with shareholders regularly regarding areas of interest or concern. Engagement with shareholders allows us to solicit input and respond to questions about Company matters, including our executive compensation program.
Oversight of the Executive Compensation Program The Committee administers In determining the appropriate compensation packages for our executives, the Committee reviews, on an annual basis, each executive’s past and present compensation, including equity andnon-equity based compensation. In addition, our CEO annually reviews the performance of each of the executives (other than himself, whose performance is reviewed annually by the Committee). The conclusions reached and recommendations made based on these reviews for base salary levels and annual bonus amounts are presented to the Committee in May each year. The Committee relies to a large extent on our CEO’s evaluations of each executive’s performance. However, it is the Committee which makes all final compensation decisions regarding our executives. The Role of the Compensation Consultant As outlined in its charter, the Committee has the authority to retain consultants and advisers, at the Company’s expense, to assist in the discharge of the Committee’s duties. The Committee has retained the services of Exequity, LLP (“Exequity”) as its independent compensation consultant. Exequity has not provided any other services to the
Company prior to or subsequent to being retained as the compensation consultant to the Committee. The Committee was solely responsible for the decision to retain Exequity as its consultant. Exequity advises the Committee on matters of Named Executive Officer compensation, assists with analysis and research, and provides updates on evolving best practices in compensation. While Exequity may express an opinion on compensation matters, the Committee is solely responsible for setting the type and amount of compensation for our Named Executive Officers. Exequity reports directly to the Committee and has direct access to the Committee through the Committee’s Chair. The Committee requires that any compensation consultant it retains cannot be utilized by management for other purposes. Although management may work closely with the consultant, the consultant is ultimately accountable to the Committee on matters related to executive compensation.
that the compensation consultant reports directly to the Committee, and the Committee has the sole power to terminate or replace its compensation consultant at any time; the compensation consultant does not provide any other services to the Company; the compensation consultant’s policies and procedures are designed to prevent conflicts of interest; whether the compensation consultant’s advisor to the Company owns stock in the Company; and any business or personal relationships between the compensation consultant’s advisor to the Company, on one hand, and any member of the Committee or any executive officer, on the other hand. Benchmarking In addition to many other factors that affect compensation determinations, the Committee
This peer group was used by Exequity to conduct executive compensation benchmarking for the named executive officers in Fiscal 2022. The peer group served as the primary reference, with survey data utilized as a secondary reference. Results of the benchmarking indicated that, on an aggregate basis, all components of pay (base salary, target bonus, and long-term incentives) lagged the 25th percentile of both the peer group and survey data. Base Salary We provide our Named Executive Officers with a base salary to compensate them for services rendered during the fiscal year. The amount of base salary is meant to reflect the primary responsibilities of
Salaries for executive officers are reviewed annually or when there is a change in position or responsibilities, such as a promotion. Annual salary planning begins with a percentage guideline for increases, based upon our annual budget, which is adjusted upward or downward for individual performance based on recommendations from our CEO. The guidelines are set after considering competitive market factors as previously described, affordability and current salary levels, as appropriate. The performance of each executive officer is evaluated annually following the close of the fiscal year so that each executive’s performance can be assessed within the context of our performance against its financial and strategic goals for the year. Individual performance is evaluated based on the specific responsibilities and accountabilities of the executive, the value of the services provided, the executive’s management skills and experience, and the individual’s contribution to our performance and profitability.
Due to the continuing impact of the pandemic on our business and operations, the Committee
Annual Incentive The Committee has the authority to award annual
The incentive plan for Fiscal
The
The table below provides the Fiscal
The Committee’s practice is to pay cash awards based upon the achievement of our annual financial performance
would not receive a payout under the pre-tax income measurement for Fiscal Under the executive bonus plan for Fiscal 2022, the target bonus amounts and maximum payout amounts for our
The total incentive earned for Fiscal 2022 are shown in the table below.
Long-Term Incentive Compensation
We believe our three-pronged approach to long-term incentives PSUs issued for Fiscal 2022 (the “Fiscal 2022 PSUs”) will vest on a sliding scale based on our attainment of a pre-tax return on invested capital goal calculated at the end of fiscal year 2024 (“Fiscal 2022 PSU ROIC”). Fifty percent of the Fiscal 2022 PSUs will vest upon the attainment of a threshold calculation of 10% Fiscal 2022 PSU ROIC, up to the entirety of the Fiscal 2022 PSUs vesting based on the attainment of a 12% Fiscal 2022 PSU ROIC. ROIC was identified as an important measure for the Company to focus management on the efficient deployment of capital over the long-term. We believe ROIC in the long-term plan, coupled with the short-term metrics in the annual bonus of profit and organic growth, ensures a balanced approach of both income and capital management. The Committee considered the following factors in evaluating the Executive Officer Stock Ownership Guidelines
Each covered executive is required to achieve his or her required ownership level within four years of Clawback Policy
Anti-Hedging and Pledging Policy Under our insider trading policy, we prohibit employees from engaging in transactions in our securities involving publicly traded options, short sales and hedging transactions because they may create the appearance of unlawful insider
trading and, in certain circumstances, present a conflict of interest. In addition, our insider trading policy prohibits employees from pledging our securities as collateral for a loan or holding our securities in a margin account unless the margin feature is not utilized or our securities are otherwise excluded from being pledged. Retirement Benefits under the 401(k) Plan, Executive Perquisites and Generally Available Benefit Programs
executive compensation philosophy, as well as the Committee’s objective better to enable us to attract and retain the most talented and dedicated executives possible. The Committee periodically reviews the levels of perquisites and other personal benefits provided to our Named Executive Officers. We sponsor, for all employees, a The Our other benefit plans primarily include medical and other health care benefits, group life insurance, disability and an employee stock purchase plan which allows eligible employees to utilize a percentage of their base salary to purchase shares of our common stock. Our Named Executive Officers are provided with the use of a company-owned vehicle or a car allowance, as well as participation in the plans and programs described above. The Committee may, in its discretion, revise, amend or add to an executive officer’s perquisites and benefits as, when and if it deems advisable or appropriate. The Committee believes, based upon publicly available information, that the benefits described above are typical for senior executives at comparable companies. Attributed costs of the perquisites and personal benefits described above for our Named Executive Officers for Fiscal Other Matters Employment Agreements The Company The employment agreement for each executive generally addresses: role and responsibilities; rights to compensation and benefits during active employment; resignation by the employee with or without “Good Reason”, as defined in the agreement; termination in the event of death, disability or retirement; and termination for “Cause” and termination
without “Cause”, as defined in the agreement. Further, the
material diminution of his
In Under the In consideration of Mr. Broderick’s execution of the Broderick Agreement, the Company granted Mr. Broderick 40,000 restricted stock units (“RSUs”) pursuant to the Company’s 2007 Stock Incentive Plan. The RSUs vest in four equal increments upon the following dates or events: (a) April 5, 2022; (b) April 5, 2023; (c) the date that the average closing price of the Company’s common stock equals or exceeds $75 for 30 consecutive trading days, provided this event occurs before December 31, 2023; and (d) the date that the average closing price of the Company’s common stock equals or exceeds $85 for 30 consecutive trading days, provided this event occurs before December 31, 2023. In addition, under the Broderick Agreement, Mr. Broderick is entitled to certain payments upon termination without Cause (as defined therein), a resignation by Mr. Broderick for Good Reason (as defined therein), or a termination in the event of a Change in Control of the Company (as defined therein), all set forth in detail in the Broderick Agreement and described in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement. D’Ambrosia Agreement In December 2020, we entered into an employment agreement (the “D’Ambrosia Agreement”) with Mr. D’Ambrosia, with a term of January 1, 2021 through December 31, 2021. The D’Ambrosia Agreement automatically renewed for successive one-year terms, unless either party gives notice of its intention not to renew. During the term of the D’Ambrosia Agreement, Mr. D’Ambrosia serves as our Executive Vice President – Finance and Chief Financial Officer of the Company. Under the D’Ambrosia Agreement, as amended, Mr. D’Ambrosia (i) is paid a base salary of $400,000; (ii) is eligible to earn an annual bonus, pursuant to the terms of our bonus plan, of up to
In Under the In consideration of Mr. Henson’s execution of the Henson Agreement, the Company granted Mr. Henson RSUs with a grant date fair value of $100,000 and nonqualified stock options valued at $100,000. In addition, Mr. Henson was granted additional RSUs on July 6, 2021 with a grant date fair value of $262,500 and will be granted other additional RSUs on July 6, 2022 with a grant date fair value of $262,500. All equity awards granted to Mr. Henson will vest in four equal increments on each of the first four anniversaries of the applicable grant date, subject to his continued employment with the Company through the applicable vesting date. In addition, under the
The provisions described above and other material provisions of our employment agreements with Messrs. At this time, the Committee has not determined that it is necessary to enter into employment agreements with any other executive positions. However, Vice President-level employees and above, including Zone Managers, are entitled to between one and six months’ base salary, depending on an individual’s length of service, as severance pay should they be terminated by the Company for reasons other than cause or poor performance. Further Mr. Rajkowski and Ms. Mulholland are entitled to one year’s base salary upon an involuntary termination without cause or a resignation for good reason (which is Impact of Accounting and Tax Treatment of Compensation The accounting and tax treatment of compensation generally has not been a significant factor in determining the amounts of compensation for our executive officers. However, the Committee and management have considered the accounting and tax impact of various program designs to balance the potential cost to us with the benefit/value to the executive.
The table below sets forth the compensation paid to or earned by our “Named Executive Officers” listed in the table for the three-year period ended March
Grants of Plan–Based Awards The following
The material terms of our Named Executive Officers’ employment agreements and letter agreements, annual incentive bonuses, long-term compensation and perquisites and other personal benefits and retirement benefits are described more fully in the CD&A above. We encourage you to read the tables above and the related footnotes in conjunction with such information. The material terms of our Named Executive Officers’ equity plan awards are described more fully in the
Outstanding Equity Awards at Fiscal The following table provides information about the number of outstanding equity awards held by our Named Executive Officers at March
2022 Option Exercises and Stock Vested The following table shows all stock options exercised and value realized upon exercise by our Named Executive Officers during Fiscal
Monro, Inc. 401(k) Plan The Company sponsors a Each employee who has attained age 18 becomes a participant as of the first day of employment. Participants may elect to reduce their compensation by up to the lesser of 50% of their annual compensation or the statutorily prescribed annual limit and to have the amount of the reduction contributed to their account in the 401(k) Plan. One of the investment options available to participants is the Company’s common stock. The Company matches certain employee contributions to the matching accounts of those employees who are contributing to the 401(k) Plan. Matching contributions are made on a per pay period basis. Deferred Compensation Plan The Company
of the Company to the extent of their Plan benefits.
The Plan permits participants to defer all or any portion of the compensation that would otherwise be payable to them for the calendar Benefits are payable at a participant’s election in a single cash sum or in annual installments for a period not to exceed 10 years at the date designated by the participant upon his or her Nonqualified Deferred Compensation Table
Potential Payments Upon Termination Or Change In Control The following is a summary setting forth potential payments payable to our Named Executive Officers (other than Mr. Mellor) upon termination of employment or a change in control of the Company under their employment arrangements or letter agreements and
distributed may be different. Factors that could affect these amounts include the timing during the year of any such event, the price of For Mr. Mellor, he ceased serving as our interim CEO in April 2021, and was not entitled to receive any compensation payable upon voluntary termination, involuntary termination without cause, retirement, termination following a change in control, and in the Payments Made Upon Any Termination Regardless of the manner in which our Named Executive Officer’s employment terminates, the executive is entitled to receive amounts earned during his or her term of employment. Such amounts include:
earned but unpaid salary through the date of termination;
non-equity incentive compensation earned and payable prior to the date of termination;
option grants received which have already vested and are exercisable prior to the date of termination (subject to the terms of the applicable option agreement);
amounts accrued and vested under the Company’s 401(k) and Nonqualified Deferred Compensation Plans. Payments Made Upon Involuntary Termination Without Cause As a result of their employment agreements or letter agreements entered into by event that
Table of Payments Upon Involuntary Termination Without Cause The following table includes the intrinsic value (that is, the value based upon the price of
Payments Made Upon Retirement None of our Named Executive Officers were eligible to receive retirement benefits as of March Payments Made Upon Death or Permanent Disability In the event of the death or permanent disability of our Named Executive Officers on March 26, 2022, in addition to the items listed under the heading “Payments Made Upon Any Termination” above:
the executive will receive benefits under any performance vesting awards (PSUs) shall be eligible to vest on a pro-rata basis provided the performance goals have been achieved in the case of death;
in the case of the disability of Messrs.
Table of Payments Upon Death The following table includes the intrinsic value (that is, the value based upon the price of
Table of Payments Upon Permanent Disability The following table includes the intrinsic value (that is, the value based upon the price of
Payments Made Upon a Change in Control No benefits are provided solely upon a change in control. As discussed in detail in the CD&A above, the employment agreements and letter agreements that the Company entered into with
two years’ base salary;
all
Table of Potential Payments Upon Change in Control The following table includes the intrinsic value (that is, the value based upon the price of the Company’s common stock, and in the case of options, minus the exercise price) of equity awards that would be exercisable or vested if the Named Executive Officer had been involuntarily terminated without cause or resigned for good reason on March 26, 2022 within two years following a change in control.
Equity Compensation Plan Information As of March
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 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 For Fiscal
Board compensation received after serving as our To identify the median employee, we used the following methodology and material assumptions, adjustments and estimates:
We selected March
We chose gross pay for the period of
As permitted by the SEC rules, we annualized the compensation of employees (other than seasonal and temporary employees) who were employed with us on March
Applying this methodology, we determined that our median employee was a full-time hourly employee, working as a store-level technician. After we identified our median employee, we calculated the median employee’s annual total compensation for Fiscal To calculate the pay ratio, we divided We believe that our pay ratio for fiscal 2022 was impacted by our hiring Mr. Broderick as our CEO during such fiscal year. As described in the CD&A, in addition to the compensation granted to and earned by Mr. Broderick during fiscal 2022 for his services as CEO, his annual total compensation for fiscal 2022 reflects a special time-vesting RSU sign-on grant, which was in addition to our usual RSU grant. The inclusion of these one-time additional items for Mr. Broderick significantly increased his annual total compensation for fiscal 2022, and, consequently, our pay ratio for fiscal 2022. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Compensation Committee Interlocks and Insider Participation In Fiscal
The Compensation Committee oversees the Company’s executive compensation program on behalf of the Board of Directors. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed with Company management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors the inclusion of the Compensation Discussion and Analysis in this Proxy Statement and its incorporation by reference into the Company’s The Compensation Committee Frederick M. Danziger, Chairman John L. Auerbach Stephen C. McCluski Robert E. Mellor
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table shows the number of shares of our common stock and common stock equivalents beneficially owned as of
Each person, who, to our knowledge beneficially owns more than 5% of our common stock or common stock equivalents;
Each director and nominee;
Our
All directors and executive officers, as a group. A beneficial owner of stock is a person who has sole or shared voting power, meaning the power to control voting decisions, or sole or shared investment power, meaning the power to cause the sale of the stock. All individuals listed in the table have sole voting and investment power over the shares unless otherwise indicated. Unless otherwise indicated, the address for each of the named beneficial owners is 200 Holleder Parkway, Rochester, NY 14615. Percentages are based on
DELINQUENT SECTION 16(a) Section 16(a) of the Exchange Act requires our directors and executive officers and those who beneficially own more than ten percent of our common stock to file initial reports of ownership and reports of changes in ownership of our common stock with the SEC. You can view these reports on the SEC’s website atwww.sec.gov. To our knowledge, based solely on a review of these reports and representations that no other reports were required during the year ended March
PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM While shareholder ratification of the Company’s independent public accountants is not required by our Certificate of Incorporation, bylaws or otherwise, the Audit Committee and management believe that it is desirable and a matter of good corporate practice for shareholders to ratify the Company’s selection of the independent public accountants. Therefore, the Audit Committee is requesting that shareholders approve the proposal to ratify there-appointment of PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm for the Company for the fiscal year ending March The Audit Committee values the input of our shareholders. In the event that shareholders do not approve this proposal, the Audit Committee will consider that fact when it selects the independent public accountants for the following year. The Audit Committee may, in its discretion, replace PWC as the independent registered public accounting firm at a later date without shareholder approval. We have engaged PWC as our independent public accountants since at least 1984. A representative of PWC will THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” RATIFYING THE APPOINTMENT OF PWC TO SERVE AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING MARCH Matters Relating to the Independent Registered Public Accounting Firm Pre-Approval Policy In addition to retaining PWC to audit our consolidated financial statements for Fiscal The Audit Committee has also adopted policies and procedures forpre-approving allnon-audit work performed by PWC. Specifically, the Audit Committee haspre-approved the use of PWC for the following categories ofnon-audit services: merger and acquisition due diligence and audit services; tax services; internal control reviews; and reviews and procedures that the Company requests PWC to undertake to provide assurances on matters not required by laws or regulations. In each case, the Audit Committee requires management to report the specific engagements to the Audit Committee on a regular basis, and also obtain specificpre-approval on any engagement over $50,000. Fees Aggregate fees billed to the Company for services rendered by PWC for Fiscal
Other than the fees reported above, PWC did not bill the Company for other services rendered during Fiscal 2022 and 2021. The Audit Committee has considered whether thenon-audit services provided by PWC are compatible with PWC maintaining its independence and has determined that they are compatible. Management is responsible for the Company’s internal controls and the financial reporting process. Our external auditors are responsible for performing an independent audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with standards of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee’s responsibility is to In this context, the Audit Committee has met and held discussions with management and the external auditors. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the external auditors. The Audit Committee discussed with the external auditors matters required to be discussed by PCAOB Auditing Standard No. 1301 (Communications with Audit Committees), as amended. The Company’s external auditors also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding the external auditor’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with the external auditors that firm’s independence. Based on the Audit Committee’s discussion with management and the external auditors and the Audit Committee’s review of the representation of management and the report of the external auditors to the Audit Committee, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited consolidated financial statements be included in the Company’s Annual Report on Form10-K for the year ended March Audit Committee Stephen C. McCluski, Chairman Frederick M. Danziger Lindsay N. Hyde
Shareholder Proposals for the Any shareholder who intends to present a proposal at our Monro, Inc. 200 Holleder Parkway Rochester, New York 14615 We must receive any shareholder proposals by the dates below for those proposals to be considered timely:
March
No earlier than February If less than 50 days’ notice or prior public disclosure is given of the date the Each notice of business or nomination must set forth the information required by the Certificate of Incorporation. Submitting a notice does not ensure that the proposal will be raised at our annual meeting of shareholders. The chair of the meeting has discretion to determine whether the notice of business or nomination was made according to the procedures provided in our Certificate of Incorporation and may determine to disregard the proposal or nominee. You may obtain additional information and a copy of the Certificate of Incorporation by submitting a written request to the Secretary of the Company at the address above. Notice Regarding Delivery of Shareholder Documents The SEC now permits us to send a single set of annual disclosure documents to shareholders who share an address, unless you have instructed us otherwise. This “householding” process reduces the volume of duplicate information you receive and reduces our printing and mailing expenses. If you share an address with another shareholder and have received only one set of proxy materials, but you would prefer to continue receiving a separate set of proxy materials, you may request a separate copy of these materials at no cost to you by writing to the Secretary of the Company at 200 Holleder Parkway, Rochester, New York 14615 or by calling585-647-6400. Alternatively, if you are currently receiving multiple copies of the proxy materials at the same address and wish to receive a single copy in the future, you may contact us by calling or writing to us at the telephone number or address given above. If you are a beneficial owner (i.e., your shares are held in the name of a bank, broker or other holder of record), the bank, broker or other holder of record may deliver only one copy of the proxy materials to shareholders who have the same address unless the bank, broker or other holder of record has received contrary instructions from one or more of the shareholders. If you wish to receive a separate copy of the proxy materials, now or in the future, you may contact us at the address or telephone number above and we will promptly deliver a separate copy. Beneficial owners sharing an address who are currently receiving multiple copies of the proxy materials and wish to receive a single copy in the future should contact their bank, broker or other holder of record to request that only a single copy be delivered to all shareholders at the shared address in the future. Notice Pursuant to Section 726(d) of the New York Business Corporation Law As of August 1,
excess policy layer is carried with Upon written request by any shareholder, we will furnish a copy of our Annual Report on Form10-K for the fiscal year ended March Monro, Inc. 200 Holleder Parkway Rochester, New York 14615 Attention: Secretary Shareholders may also view our Annual Report on Form10-K in the Investor Information subsection of the Corporate section of our website:https://corporate.monro.com/investors/financial-information.
Rochester, New York July
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
ANNUAL MEETING OF SHAREHOLDERS OF MONRO, INC. August 16, 2022 IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON AUGUST 16, 2022: The Notice, Proxy Statement and the 2022 Annual Report are available at www.proxyvote.com.
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