UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a -101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
Ryerson Holding Corporation
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required. |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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☐ | Fee paid previously with preliminary materials: |
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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Ryerson 2020 Proxy Statement Notice of Annual Meeting of Stockholders
2019 PROXY STATEMENT
& NOTICE OF ANNUAL MEETING
227 W. Monroe St., 27th Floor
Chicago, Illinois 60606
NOTICE OF ANNUAL STOCKHOLDERS’ MEETINGNotice of Annual Stockholders’ Meeting
Wednesday, April 24, 201928, 2021 2:00 p.m. Central Daylight Time
JW Marriott Houston Downtown
806 Main Street
Houston, Texas 77002Virtual Meeting via a live audio-only webcast at www.proxydocs.com/RYI
March 13, 201912, 2021
To our Stockholders:
You are cordially invited to the 20192021 annual meeting of stockholders of Ryerson Holding Corporation scheduled to be held on Wednesday, April 24, 2019,28, 2021, at 2:00 p.m. Central Daylight Time via a live audio-only webcast at JW Marriott Houston Downtown, 806 Main Street, Houston, Texas 77002.www.proxydocs.com/RYI. There is no physical location for the 2021 annual meeting. At the meeting, we will consider:
The election of two directors;
Ο | The election of three directors; |
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019;
Ο | The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021; |
The approval of the Amended and Restated 2014 Omnibus Incentive Plan; and
Ο | The adoption, on a non-binding, advisory basis, of a resolution approving the compensation of our named executive officers described under the heading Executive Compensation in our proxy statement (“say-on-pay” vote); |
Ο | The selection, on a non-binding, advisory basis, of the resolution that a non-binding, advisory vote to approve the compensation of our named executive officers be held every THREE YEARS (“say-when-on-pay” vote); and |
Such other business as may properly come before the meeting.
Ο | Such other business as may properly come before the meeting. |
Stockholders who owned shares of our stock at the close of business on March 1, 20192021 can vote on these proposals.
Our 2021 annual meeting of stockholders will be a virtual meeting. In order to attend the annual meeting, you must register in advance at www.proxydocs.com/RYI. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to submit questions.
Your vote is important regardless of the number of shares of stock you own. Whether you plan to attend or not, please review our proxy materials and request a proxy card to sign, date and return, or submit your voting instructions by telephone or through the Internet.On or about the date of this letter, we began mailing a Notice of Internet Availability of Proxy Materials (the “Notice”). Instructions for each type of voting are included in the Notice of Internet Availability of Proxy Materials that you received and in this proxy statement. If you plan to attend the meeting and prefer to vote at that time, you may do so. If you hold your shares through a broker, bank, or other institution, please be sure to follow the voting instructions that you receive from the holder. The holder will not be able to vote your shares on any of the proposals except the ratification of the appointment of Ernst & Young LLP unless you have provided voting instructions.
Mark S. Silver
Executive Vice President, General Counsel & Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON APRIL 24, 2019: THIS PROXY STATEMENT AND THE
ANNUAL REPORT ARE AVAILABLE AT http://www.proxyvote.com.
TABLE OF CONTENTSChief Human Resources Officer
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON APRIL 28, 2021: THIS PROXY STATEMENT AND THE ANNUAL REPORT ARE AVAILABLE AT http://www.proxydocs.com/RYI. |
RYERSON HOLDING CORPORATION
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2021 Proxy StatementI |
RYERSON HOLDING CORPORATIONRyerson Holding Corporation
From its modest start in 1842, Ryerson has grown into an intelligent network of service centers with leading capabilities to serve customers’ industrial metal supply chain needs. Ryerson has survived the Great Chicago Fire, weathered economic downturns, and evolved with changing markets. Ryerson is passionate about profitably providing consistently great customer experiences. | |||
Ryerson Holding Corporation (“Ryerson,” the “Company,” “we,” “us” or “our”) is furnishing this proxy statement to the holders of our common stock in connection with the solicitation of proxies on behalf of our board of directors (the “Board”) for use at our 20192021 annual meeting of stockholders, which will be held on Wednesday, April 24, 2019,28, 2021, via a live audio-only webcast at JW Marriott Houston Downtown, 806 Main Street, Houston, Texas 77002.www.proxydocs.com/RYI. There is no physical location for the 2021 annual meeting. We will begin sending notice of the availability of these proxy materials on or about March 12, 2021.
Our common stock trades on the New York Stock Exchange (“NYSE”) under the ticker symbol ‘RYI’. The Company’s fiscal year ends on December 31 of each calendar year. Our corporate headquarters is located at 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606, and our website address is www.ryerson.com. Please note that the information on our website is not, and shall not be deemed to be, a part of this proxy statement nor, by reference or otherwise (except to the extent we specifically incorporate it by reference), incorporated into any other filings we make with the Securities and Exchange Commission (“SEC”).
On August 13, 2014, we completed an initial public offering of 11 million shares of our common stock (the “IPO”). Prior to that time, all of our common stock was held by affiliates of Platinum Equity, LLC (together with such affiliates, “Platinum”), which still own approximately 56%55% of Ryerson’s common stock. For additional information regarding Platinum’s ownership, see below under “Ownership of More Than 5% of Ryerson Stock,” on page 48.50.
As the context requires, “Ryerson,” the “Company,” “we,” “us” or “our” may also include the direct and indirect subsidiaries of Ryerson Holding Corporation.
2021 Proxy Statement1 |
ANNUAL MEETINGAnnual Meeting INFORMATIONInformation
This proxy statement contains information we must provide to you under the rules of the SEC and the NYSE in connection with the solicitation of proxies by our Board for the 20192021 annual meeting of stockholders. It is designed to assist you in voting your shares of our stock. We will begin sending notice of the availability of these proxy materials on or about March 13, 2019.
You may vote if you were the holder of record of shares of our common stock at the close of business on March 1, 2019.2021. You are entitled to one vote on each matter presented at the 20192021 annual meeting of stockholders for each share of our stock you owned at that time. If you held stock at that time in “street name” through a broker, bank or other institution, you must either provide voting instructions to the holder or obtain a proxy, executed in your favor, from the holder to be able to vote those shares at the meeting.
Each share of Ryerson common stock is entitled to one vote. As of the close of business on March 1, 20192021 (the record date for determining stockholders entitled to vote at the annual meeting), we had 37,444,00538,117,397 shares of common stock outstanding and entitled to vote.
You are entitled to attend our 20192021 annual meeting if you were the holder of record of shares of our common stock at the close of business on March 1, 20192021 or if you hold a valid proxy for the annual meeting. You should be prepared to present photo identification (a driver’s license or passport is preferred) for admittance. In addition, if you are a stockholder of record, your name is subject to verification against the list of stockholders of record on the record date prior to being admitted to the meeting. If you are not a stockholder of record but hold shares through a broker, bank or other nominee (i.e., in “street name”), you also may attend our 2019 annual meeting if you provide proof of beneficial ownership on the record date, such as your most recent account statement or similar evidence of ownership. If you do not provide photo identification or comply with the other procedures outlined above upon request, you may not be admitted to the meeting.
TheThis year’s annual meeting will occurbe accessible through the Internet via a live audio-only webcast. You are invited to attend the annual meeting via audio-only webcast to vote on the proposals described in this Proxy Statement so long as you register to attend the annual meeting at JW Marriott Houston Downtown, 806 Main Street, Houston, Texas 77002, and will begin promptly at 2:00 p.m. Central Time, and you should allow ample time for check-in procedures. No cameras, recording equipment, electronic devices, large bags, briefcases or packageswww.proxydocs.com/RYI. You will be permitted intoasked to provide the control number located inside the shaded gray box on your notice or proxy card (the “Control Number”) as described in the Notice of Internet Availability of Proxy Materials (the “Internet Availability Notice”) or proxy card. After completion of your registration, further instructions, including a unique link to access the annual meeting of stockholders, will be emailed to you. If you request a printed copy of our proxy materials by mail, your broker or nominee will provide a voting instruction card for you to use. This year’s stockholder question and answer session will include questions submitted in advance of the annual meeting. You may submit a question in advance of the meeting or adjacent areas. All items may be subject to search.at www.proxydocs.com/RYI after logging in with your Control Number.
You are voting on:
The election of two directors;
Ο | The election of three directors; |
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019;
Ο | The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021; |
The approval of the Amended and Restated 2014 Omnibus Incentive Plan; and
Ο | The adoption, on a non-binding, advisory basis, of a resolution approving the compensation of our named executive officers described under the heading Executive Compensation in our proxy statement (“say-on-pay” vote); |
Ο | The selection, on a non-binding, advisory basis, of the resolution that a non-binding, advisory vote to approve the compensation of our named executive officers be held every THREE YEARS (“say-when-on-pay” vote); and |
Such other business as may properly come before the meeting.
Ο | Such other business as may properly come before the meeting. |
If your shares of stock are registered directly in your name, you are considered a stockholder of record and you will receive your Notice of Internet Availability of Proxy Materials directly from us. Stockholders of record can vote in advance of our annual meeting by requesting a proxy card to sign, date and return or by submitting voting instructions by telephone or through the Internet. Please see the Notice of Internet Availability of Proxy Materials you received or this proxy statement for specific instructions on how to cast your vote by any of these methods. You may obtain directions
To vote during the annual meeting, you must do so through www.proxydocs.com/RYI. To be admitted to the location of our 2019 annual meeting by contacting us at Investor Relations, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606, email: investorinfo@ryerson.com,and vote your shares, you must register and provide the Control Number as described in the Internet Availability Notice or telephone: 312-292-5130.Proxy Card. After completion of your registration, further instructions, including a link a unique link to access the annual meeting, will be emailed to you.
If you hold your shares of stock through a broker, bank or other institution, you arefare considered the beneficial owner of stock held in “street name” and you will receive your notice from your broker, bank or other institution.
2 RYERSON HOLDING CORPORATION |
For stockholders of record, voting instructions submitted via mail, telephone or the Internet must be received by Broadridge, our independent tabulator, Mediant, by 11:59 p.m. Central Time on April 23, 2019.the closing of the polls at the annual meeting. Submitting your voting instructions prior to the annual meeting will not affect your right to vote in person should you decide to attend the meeting.
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Stockholders of record can vote by:Record Can Vote By:
Requesting and returning a completed proxy card by mail to our independent tabulator, Broadridge, by 11:59 p.m. Central Time on April 23, 2019;
Ο | Requesting and returning a completed proxy card by mail to our independent tabulator, Mediant, by the closing of the polls at the annual meeting; |
Submitting voting instructions via the Internet or telephone by 11:59 p.m. Central Time on April 23, 2019; or
Ο | Submitting voting instructions via the Internet or telephone by the closing of the polls at the annual meeting; or |
Completing a ballot and returning it to the inspector of election during the annual meeting.
Ο | Voting at the annual meeting after registering at www.proxydocs.com/RYI by providing the Control Number as described in the Internet Availability Notice or Proxy Card. |
Instructions and contact information for each of these voting options can be found in our Notice of Internet Availability of Proxy Materials.
The Internet and telephone voting procedures available to you are designed to authenticate stockholders’ identities, to allow stockholders to submit voting instructions and to confirm that stockholders’ voting instructions have been recorded properly. We have been advised that the Internet and telephone voting procedures are consistent with the requirements of applicable law. Stockholders voting via the Internet or telephone should understand that there may be costs associated with voting in this manner, such as usage charges from Internet access providers and telephone companies, which must be borne by the stockholder.
If you hold your stock in street name, you can vote by submitting a voting instruction card to your broker, bank or other institution that sent your Notice of Internet Availability of Proxy Materials to you in accordance with their procedures. Please note that if you hold your stock in street name, the broker, bank or other institution that holds the stock will not be able to vote your shares on any proposal other than the ratification of the appointment of Ernst & Young LLP unless you have provided voting instructions. If you hold your stock in street name and wish to vote at the meeting, you must obtain a proxy, executed in your favor, from the holder of record of the stock as of the record date.
What If I Do Not Provide Voting Instructions?
If you submit a valid proxy card, or validly submit voting instructions via the telephone or Internet, but you do not indicate your vote, your shares of stock will be voted FOR:
The election of the two directors named herein;
Ο | The election of the three directors named herein; |
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019; and
Ο | The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021; |
Ο | The adoption, on a non-binding, advisory basis, of a resolution approving the compensation of our named executive officers described under the heading Executive Compensation in our proxy statement (“say-on-pay” vote); and |
The approval of the Amended and Restated 2014 Omnibus Incentive Plan.
Ο | The selection, on a non-binding, advisory basis, of the resolution that a non-binding, advisory vote to approve the compensation of our named executive officers be held every THREE YEARS (“say-when-on-pay” vote). |
You also give the proxies discretionary authority to vote on any other business that may properly be presented at the annual meeting.
Can I Revoke or Change My Vote?
If you are a stockholder of record, you may revoke or change your proxy and voting instructions at any time prior to the vote at the annual meeting. To do so:
Submit a new proxy card or voting instructions to the independent tabulator by mail, telephone or through the Internet by 11:59 p.m. Central Time on April 23, 2019; or
Ο | Submit a new proxy card or voting instructions to the independent tabulator, Mediant, by mail, telephone or through the Internet by the closing of the polls at the annual meeting; or |
Attend the annual meeting and vote in person by ballot.
Ο | Attend the annual meeting and submit an electronic ballot. |
If you hold your stock in street name, you may revoke or change your proxy instructions prior to the vote at the annual meeting by submitting new voting instructions to your broker, bank or other institution in accordance with their procedures.
2021 Proxy Statement 3 |
Who Are the Proxies andand What Do They Do?
When you vote in advance of the annual meeting, you appoint Mr. Mark S. Silver, our Executive Vice President, General Counsel & Secretary,Chief Human Resources Officer, and Ms. Camilla R. Merrick, our Senior Counsel,Corporate Secretary, as proxies, each with the power to appoint a substitute. You direct them to vote all of the shares of stock you held on the record date at the annual meeting and at any adjournment or postponement of that meeting. If you submit a valid proxy card or validly submit voting instructions via the telephone or Internet, and you do not subsequently revoke your proxy or vote, the individuals named on the card as your proxies will vote your shares of stock in accordance with your instructions. If you submit a valid proxy card or voting instructions but you do not indicate your vote, your shares of stock will be voted as described above under “What If I Do Not Provide Voting Instructions?” on page 3.
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Is My Vote Confidential?Vote Confidential?
We have a confidential voting policy. Stockholders’ votes will not be disclosed to us other than in limited situations. The independent tabulator will collect, tabulate and retain all proxies and will forward any comments written on the proxy cards or otherwise received by the independent tabulator to management. Our confidential voting policy will not apply in the event of a contested solicitation.
What Is the Quorum Requirement for the Annual Meeting?
A quorum is necessary to hold a valid meeting. A quorum will exist if stockholders holding a majority of the shares of stock issued and outstanding and entitled to vote at the meeting are present in person or represented by proxy.
How Are Abstentions, Withheld Votes and Broker Non-Votes Treated?
The election inspector will treat abstentions, withholds and “broker non-votes” as shares of stock that are present and entitled to vote for purposes of determining the presence of a quorum. A “broker non-vote” occurs when a broker holding stock for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Brokers will have discretionary voting power with respect to proposal two (the ratification of the appointment of Ernst & Young LLP), but not with respect to any other proposal. Abstentions and broker non-votes do not count as votes cast either for or against any of the proposals. A “withhold” vote with respect to any director nominee will have the effect of a vote against such nominee.
What Vote Is Required to Approve a Proposal?
Proposal One: A director nominee will be elected to the Board if the number of votes cast “for” the nominee’s election exceeds the number of votes “withheld” from or cast “against” the nominee’s election.
Proposal Two: The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 20192021 will be approved if holders of a majority of the stock present in person at the meeting or represented by proxy vote in favor of the proposal.
Proposal ThreeThree:: The Amended and Restated 2014 Omnibus Incentive Planresolution approving the compensation of our named executive officers described under the heading “Executive Compensation” in our proxy statement will be approved on a non-binding, advisory basis, if holders of a majority of the stock present in person at the meeting or represented by proxy vote in favor of the proposal.
Proposal Four: A plurality of the affirmative votes cast will select, on a non-binding, advisory basis the frequency of the stockholder vote on the compensation of our named executive officers. We will consider stockholders to have expressed a non-binding preference for the frequency that receives the highest number of favorable votes.
Who Solicits Proxies and How Are They Paid?
The proxy accompanying this proxy statement is solicited on behalf of our Board for use at the annual meeting and Ryerson pays the expenses of soliciting the proxies. In addition to this solicitation by mail, our directors, officers and other employees may contact you by personal interview, telephone, electronic mail, facsimile, Internet or otherwise to obtain your proxy. These persons will not receive any additional compensation for these activities. Brokerage houses and other custodians, nominees and fiduciaries will be requested to forward solicitation material to the beneficial owners of stock. We will reimburse these entities and our transfer agent for their reasonable out-of-pocket expenses in forwarding solicitation material. We have not retained the services of a proxy solicitor.
How Do You Determine Whether I Get One or More Paper Copies of the Proxy Materials?
To reduce the costs of printing and distributing proxy materials we are taking advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. As a result, we send many stockholders a notice regarding the Internet availability of the proxy materials instead of a paper copy of our proxy materials. This notice explains how you can access the proxy materials over the Internet, and also describes how to request to receive a paper copy of the proxy materials. If you have requested paper copies of the proxy materials, you may have received one copy of our proxy statement, annual report or Notice of Internet Availability of Proxy Materials for multiple stockholders in your household. This is because we and some brokers,
4 RYERSON HOLDING CORPORATION |
banks and other record holders participate in the practice of “householding” proxy statements, annual reports and Notices of Internet Availability of Proxy Materials and deliver only one copy to stockholders at one address unless we or they receive other instructions from you.
If these materials were delivered to an address that you share with another stockholder, we will promptly deliver a separate copy if you make a written or verbal request to Ryerson Holding Corporation, Investor Relations, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606, email: investorinfo@ryerson.com, or telephone: 312-292-5130.
If you are receiving multiple copies and would like to receive only one copy for your household, you may make such request as follows:
If you are a stockholder of record, by contacting Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717 or call Broadridge toll free: 1-866-540-7095; and
Ο | If you are a stockholder of record, by contacting Ryerson Holding Corporation, c/o Mediant Communications, P.O. Box 8016, Cary, NC 27512-9903, or call Mediant at: 1-866-648-8133; and |
If you are a beneficial owner of stock, by contacting your broker, bank or other holder of record.
Ο | If you are a beneficial owner of stock, by contacting your broker, bank or other holder of record. |
The Company’s proxy materials are also available at ir.ryerson.com.
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2021 Proxy Statement 5 |
ITEMS YOUItems You MAY VOTE ONay Vote on
Our Board presently consists of seven directors, three of whom areour Board has determined to be independent under the NYSE Listed Company Manual and other NYSE rules and requirements (together, “NYSE rules”), and four. Four of whomour directors are affiliated with Platinum, which owns a majority of our outstanding common stock. Because Platinum owns more than 50% of the voting power of our common stock, we are considered to be a “controlled company” for purposes of the NYSE rules. As such, we are permitted, and have elected, to opt out of the NYSE rules that would otherwise require our Board to be comprised of a majority of independent directors.
The Board is divided into three separate classes, with one class being elected each year to serve a staggered three-year term. The terms of the Class III Directors expire at the 20192021 annual meeting, and twothree directors will be elected at the annual meeting to serve as Class III Directors for a three-year term expiring at the 20222024 annual meeting or until their successors are duly elected and qualified.
For the 20192021 annual meeting, the Board has proposed the following director nominees for election: Stephen P. LarsonEva M. Kalawski, Mary Ann Sigler, and Philip E. Norment.Court D. Carruthers.
Detailed information on each director nominee and continuing director is provided below under “Biographies” on page 14.11. If you submit valid voting instructions, the proxies will vote your shares of stock for the election of each of the nominees, unless you indicate that you wish to vote against a nominee or withhold your vote on a nominee. If at the time of the annual meeting any of the nominees is unable or declines to serve, the persons named in the proxy will, at the direction of the Board, either vote for the substitute nominee or nominees that the Board recommends, or the Board may reduce the number of directors to be elected at the meeting. The Board has no reason to believe that any nominee will be unable or will decline to serve as a director if elected.
Vote Required
Under our Bylaws, our directors are elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. In an uncontested election, a director is elected if the votes cast “for” the director’s election exceed the votes “withheld” from or cast “against” the director’s election.
Recommendation of the Board
OUR BOARD UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” the election of Stephen P. LarsonEva m. kalawski, mary ann sigler, and Philip E. Normentcourt d. carruthers to serve as directors of the Company.
6 RYERSON HOLDING CORPORATION |
Our Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for 2019.2021. Ernst & Young LLP has served as the independent registered public accounting firm for the Company since 2006. Representatives of Ernst & Young LLP will be present at the annual meeting to answer questions. They will also have the opportunity to make a statement if they desire to do so.
The Audit Committee is responsible for recommending, for stockholder approval, our independent registered public accounting firm. Should stockholders fail to approve the ratification of the appointment of Ernst & Young, LLP, the Audit Committee would undertake the task of reviewing the appointment. Nevertheless, given the difficulty and expense of changing independent accountants mid-way through the year, there is no assurance that a firm other than Ernst & Young LLP could be secured to deliver any or all of the Company’s independent auditing services required in 2019.2021. The Audit Committee, however, would take the lack of stockholder approval into account when recommending an independent registered public accounting firm for 2020.2021.
The following table sets out the various fees for services provided by Ernst & Young LLP for 20182020 and 2017.2019. The Audit Committee pre-approved all of these services. For additional information, see the description of the pre-approval policies and procedures of the Audit Committee under “Pre-approval Policies,” below on page 22.19.
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Annual Fees for 20182020 and 20172019
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Description |
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Audit Fees(1) |
| $ | 5,000,460 |
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| $ | 4,486,080 |
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Audit-related Fees(2) |
| $ | 1,995 |
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| $ | 1,995 |
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Tax Fees(3) |
| $ | 299,315 |
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| $ | 354,905 |
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Audit Fees(1) |
| $ | 3,896,583 |
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| $ | 4,282,240 |
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Audit-related Fees(2) |
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| — |
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| — |
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Tax Fees(3) |
| $ | 133,582 |
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| $ | 454,925 |
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Other Fees (4) |
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Total |
| $ | 5,301,770 |
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| $ | 4,842,980 |
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| $ | 4,030,165 |
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| $ | 4,737,165 |
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(1) | Audit fees related to professional services rendered in conjunction with the audit of our annual financial statements, the audit of our internal control over financial reporting, the review of our quarterly financial statements, comfort letters, consents, and the audit of our statutory filings, and other services pertaining to SEC matters. |
(2) | Audit-related fees related to professional services that are reasonably related to the performance of the audit or review of the Company’s financial statements, including compliance-related matters, which are not specifically classified as audit fees, including such fees related to subscription fees for the audit firm’s online research tool. |
(3) | Tax fees related to professional services performed by the independent auditor’s tax personnel and not included in audit fees or audit related fees, such as services related to tax audits, tax compliance and tax consulting and planning services. Tax fees primarily related to tax consulting and planning services related to international corporate structuring and transfer pricing relative to service charges from our U.S. operations to our Canadian subsidiary. |
(4) | For |
Ernst & Young LLP’s full-time, permanent employees conducted a majority of the audit of the Company’s 20182020 financial statements. Leased personnel were not employed with respect to the domestic audit engagement.
Vote Required
The approval of this proposal requires the affirmative vote of a majority of the votes cast in person or by proxy and entitled to vote thereon at the 20192021 annual meeting, assuming that a quorum is present.
Recommendation of the Board
OUR BOARD UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019.2021.
3.Approval3. Non-Binding, Advisory Vote on the Compensation of Our Named Executive Officers
Section 14A of the Amended and Restated 2014 Omnibus Incentive Plan
OverviewSecurities Exchange Act of Proposal
Our 2014 Omnibus Incentive Plan, or 2014 Plan, was originally adopted by1934 (“Section 14A”) requires that the Company provide its stockholders with the opportunity to vote to approve, on a non-binding advisory basis, the compensation of its named executive officers at least once every three years. At the 2018 annual meeting, the stockholders followed the recommendation of our Board of Directors to hold an advisory vote on August 6, 2014. On February 20, 2019, our Compensation Committee approved an amendmentexecutive compensation once every three years. In 2018, the stockholders voted, and restatementthe Board of Directors determined, that the stockholders should vote on a say-on-pay proposal once every three years to provide the Company with sufficient time to thoughtfully consider the results of the 2014 Omnibus Incentive Plan, which we refervote and implement any desired changes to asexecutive compensation policies and procedures. The last vote was held in 2018. Accordingly, the Amended and Restated 2014 Plan, subjectCompany is seeking your vote to approval by our stockholders. The 2014 Plan has been an important factor in attracting, retaining, motivating, and rewarding certain employees, officers, directors and consultants by closely aligningapprove, on a non-binding advisory basis, the interests of such individuals with thosecompensation of our stockholders. We are asking our stockholders to approve the Amended and Restated 2014 Plan at the 2019 annual meeting that would:
Increase the number of shares of common stock reserved for issuance from 1,695,000 to 3,495,000, subject to adjustment as provided in the plan and an equivalent increase to the number of shares of common stock available for grant pursuant to incentive stock options;
Extend the expiration date of the plan to February 20, 2029;
Remove certain performance and cash-based awards previously available for grant under the plan that were designed for compliance with the exception from deduction limit for performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), which was repealed by the Tax Cuts and Jobs Act, signed into law December 2017; and
6named executive
Allow the Company to withhold shares to cover tax withholding obligations based on either the applicable minimum statutorily required withholding rates or other applicable withholding rates in the applicable award holder’s jurisdiction, including maximum applicable rates that may be utilized without creating adverse accounting treatment under Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor pronouncement thereto) and is permitted under applicable withholding rules.
We believe that increasing the share reserve under the 2014 Plan and extending the expiration date to facilitate continued use of the 2014 Plan will allow us to further the purpose of the plan and our compensation philosophy.
If our stockholders approve this proposal, the amended and restated plan will become effective as of the date of stockholder approval. If our stockholders do not approve this proposal, the amendment and restatement of the 2014 Plan described in this proposal will not take effect and our 2014 plan will continue to be administered in its current form. Further, if stockholders do not approve this proposal, our ability to attract, reward and retain valuable employees will be restricted as we would not have a sufficient number of shares of common stock to make future equity grants.
Rationale for Approving the Amended and Restated 2014 Plan
Our Board believes that approval of the Amended and Restated 2014 Plan is essential to our continued success. The additional 1,800,000 shares of common stock our Compensation Committee has reserved for issuance under the Amended and Restated 2014 Plan represent approximately 4.8% of our outstanding shares of common stock on a fully diluted basis as of the record date, March 1, 2019. Our Board believes that compensation of the type available for grant under the Amended and Restated 2014 Plan, a stock-based incentive plan, furthers our goal of creating long-term value for our stockholders by fostering an ownership culture that encourages a focus on long-term performance, retention, and stockholder value-creation, and exposes participants to economic diminishment if our share performance lags.
Alignment of the Amended and Restated 2014 Plan with the Interests of the Company and our Stockholders
Our Board believes that using long-term incentive compensation, including equity compensation, to retain and motivate our key employees is critical to the achievement of our long-term goals and it considered the following factors, among other things, when adopting the Amended and Restated 2014 Plan:
our belief that the Amended and Restated 2014 Plan will serve a critical role in attracting, retaining and motivating high caliber employees, officers, directors and other service providers essential to our success and in motivating these individuals to enhance our growth and profitability;
our belief that share ownership by employees provides performance incentives and fosters long-term commitment to our benefit and to the benefit of our stockholders; and
our belief that equity compensation, by its very nature, is performance-based compensation, and that the Amended and Restated 2014 Plan reflects our pay-for-performance philosophy and motivates our employees to enhance our growth and profitability.
Key Features of the Amended and Restated 2014 Plan
The Amended and Restated 2014 Plan and our related governance practices and policies include many features that are designed to protect stockholder interests. A summary of these features follows, and a more detailed description of the features is included under the heading “Summary of the Amended and Restated 2014 Plan” below. The summaries in this proposal do not provide a complete description of all the provisions of the Amended and Restated 2014 Plan and are qualified in their entirety by reference to the full text of the Amended and Restated 2014 Plan, which is attached to this proxy statement as Appendix A.
Fixed Reserve of Shares. The number of shares of common stock available for grant under the Amended and Restated 2014 Plan is fixed and will not automatically increase because of an “evergreen” feature, meaning stockholder approval is required to issue any additional shares, allowing our stockholders to have direct input on our equity compensation program.
No Repricing. The Amended and Restated 2014 Plan prohibits the repricing of awards without stockholder approval.
No Liberal Definition of “Change in Control.” The change in control definition contained in the Amended and Restated 2014 Plan is not a “liberal” definition that would be triggered on stockholder approval of a transaction.
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Limitation on Term of Stock Options and Stock Appreciation Rights. The maximum term of a stock option or stock appreciation right under the Amended and Restated 2014 Plan is 10 years.
No Dividends or Dividend Equivalents on Unearned Awards. If the Company were to pay cash dividends and share dividends, such dividends paid on shares of restricted stock will be withheld by the Company and will be subject to vesting and forfeiture to the same degree as the shares of restricted stock to which such dividends relate.
Clawback. Awards granted under the Amended and Restated 2014 Plan will be subject to any Company’s clawback and/or recoupment policies in effect or as otherwise required by applicable law.
Limitation on Amendments. Amendments to the Amended and Restated 2014 Plan must be approved by our stockholders if stockholder approval is required by applicable law or the applicable rules of the national securities exchange on which our shares are principally listed or if the amendment would diminish the prohibitions on repricing stock options or stock appreciation rights.
No Automatic Grants. The Amended and Restated 2014 Plan does not provide for automatic grants to any participant.
No Tax Gross-Ups. The Amended and Restated 2014 Plan does not provide for any tax gross-ups.
Key Data
The following table includes information regarding our outstanding awards and shares of common stock available for future awards under the 2014 Plan as of February 28, 2019:
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The Compensation Committee carefully monitors our annual burn rate and total dilution by granting only the number of stock-based awards that it believes is necessary to attract, reward and retain key employees, officers and other service providers. Burn rate, or run rate, refers to how fast a company uses the supply of shares authorized for issuance under its stock incentive plan. Over the last three years, we have maintained an average burn rate of 0.96% of common stock outstanding per year. Dilution measures the degree to which our stockholders’ ownership has been diluted by stock-based compensation awarded under our stock plans. The following table shows our burn rate and dilution percentages over the past three years:
Key Equity Metrics |
| 2016 |
| 2017 |
| 2018 |
Burn Rate(1) |
| 1.00% |
| 0.90% |
| 0.96% |
Dilution(2) |
| 1.46% |
| 2.15% |
| 2.37% |
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Summary of the Amended and Restated 2014 Plan
The following is a summary of certain material features of the Amended and Restated 2014 Plan.
Purpose. The purpose of the Amended and Restated 2014 Plan is to give us the ability to attract, retain, motivate and reward certain officers, employees, directors and consultants and to provide a means whereby officers, employees, directors and/or consultants can acquire and maintain ownership of our common stock or be paid incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to our welfare and that of our affiliates and promoting an identity of interest
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between our stockholders and these persons and encouraging such eligible persons to expend maximum effortofficers as disclosed in the creation of stockholder value.
The following summary is not a complete description of all provisions of the Amended and Restated 2014 Plan and is qualified in its entirety by reference to the Amended and Restated 2014 Plan, the final version of which is attached to this proxy statement as Appendix A.
Plan Administration(the “Say-on-Pay Vote”). The Amended and Restated 2014 Plan will be administered by our Compensation Committee. Our Compensation Committee will have the authority, among other things, to select participants, grant awards, determine types of awards and terms and conditions of awards for participants, prescribe rules and regulations for the administration of the plan and make all decisions and determinations as deemed necessary or advisable for the administration of the Amended and Restated 2014 Plan. Our Compensation Committee may delegate certain of its authority as it deems appropriate, pursuant to the terms of the Amended and Restated 2014 Plan and to the extent permitted by applicable law, to our officers or employees, although any award granted to any person who is not our employee or who is subject to Section 16 of the Exchange Act, must be expressly approved by the Compensation Committee. Our Compensation Committee’s actions will be final, conclusive and binding.
Authorized Stock. A total of 3,495,000 shares of common stock will be reserved and available for issuance under the Amended and Restated 2014 Plan, subject to adjustment in accordance with the terms of the Amended and Restated 2014 Plan. The number of shares of common stock reserved and available for issuance under the Amended and Restated 2014 Plan is subject to adjustment, as described below. The maximum number of shares of common stock that may be issued in respect of incentive stock options will be 3,495,000. Common stock issued under the Amended and Restated 2014 Plan may consist of authorized but unissued stock or previously issued common stock. Common stock underlying awards that are settled in cash, expire or are canceled, forfeited, or otherwise terminated without delivery to a participant will again be available for issuance under the Amended and Restated 2014 Plan. Common stock withheld or surrendered in connection with the payment of an exercise price of an award or to satisfy tax withholding will again become available for issuance under the Amended and Restated 2014 Plan.
Individual Limits. The maximum number of shares of common stock that may be subject to awards granted to any non-employee director in any one calendar year may not exceed 20,000.
Types of Awards. The types of awards that may be available under the Amended and Restated 2014 Plan are described below. All of the awards described below will be subject to the terms and conditions determined by our Compensation Committee in its sole discretion, subject to certain limitations provided in the Amended and Restated 2014 Plan. Each award granted under the Amended and Restated 2014 Plan will be evidenced by an award agreement, which will govern that award’s terms and conditions.
Non-qualified Stock Options. A non-qualified stock option is an option thatThis vote is not intended to meetaddress any specific item of compensation, but rather the qualifications of an incentive stock option, as described below. An award of a non-qualified stock option grants a participant the right to purchase a certain number of sharesoverall compensation of our common stock during a specified termnamed executive officers and the philosophy, policies and practices described in this proxy statement.
Stockholders are urged to read the future, or upon“Executive Compensation” section of this proxy statement, beginning on page 26, which discusses how our executive compensation policies and procedures implement our compensation philosophy and contains tabular information and narrative discussion about the achievementcompensation of performance or other conditions, at an exercise price set by our named executive officers. The Compensation Committee and the Board believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving our goals.
As an advisory vote, the vote on this proposal is not binding. However, our Board and Compensation Committee, which is responsible for designing and administering our executive compensation program, value the opinions expressed by stockholders in their vote on this proposal, and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
Based on the grant date. The term of a non-qualified stock option will be setabove, we request that you indicate your support for our executive compensation practices by our Compensation Committee but may not exceed 10 years from the grant date. The exercise price may be paid using anyvoting in favor of the following payment methods: (i) immediately available fundsresolution:
“RESOLVED, that the Company’s stockholders approve the compensation of the Company’s named executive officers as described in U.S. dollars or by certified or bank cashier’s check, (ii) by delivery of stock having a value equal to the exercise price, (iii) a broker assisted cashless exercise, or (iv) by any other means approved by our Compensation Committee. The Amended and Restated 2014 Plan also provides that participants terminated for “cause” (as such term is definedthis Proxy Statement in the Amended“Executive Compensation” section, including the Compensation Discussion and Restated 2014 Plan) will forfeit all of their non-qualified stock options, whether or not vested. Participants terminated for any other reason will forfeit their unvested non-qualified stock options, retain their vested non-qualified stock options, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested non-qualified stock options, unless such non-qualified stock options expire sooner. The Amended and Restated 2014 Plan authorizes our Compensation Committee to provide for different treatment of non-qualified stock options upon termination than that described above, as determined in its discretion.
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Incentive Stock Options. An incentive stock option is a stock option that meets the requirements of Section 422 of the Code. Incentive stock options may be granted only to our employees or employees of certain of our subsidiaries and must have an exercise price of no less than 100% of the fair market value (or 110% with respect to a 10% stockholder) of a share of common stock on the grant date and a term of no more than 10 years (or 5 years with respect to a 10% stockholder). The aggregate fair market value, determined at the time of grant, of our common stock subject to incentive stock options that are exercisable for the first time by a participant during any calendar year may not exceed $100,000. The Amended and Restated 2014 Plan also provides that participants terminated for “cause” will forfeit all of their incentive stock options, whether or not vested. Participants terminated for any other reason will forfeit their unvested incentive stock options, retain their vested incentive stock options, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested incentive stock options, unless such incentive stock option expires sooner. The Amended and Restated 2014 Plan authorizes our Compensation Committee to provide for different treatment of incentive stock options upon termination than that described above, as determined in its discretion.
Stock Appreciation Rights. A stock appreciation right entitles the participant to receive an amount equal to the difference between the fair market value of our common stock on the exercise dateAnalysis and the base price of the stock appreciation right that is set by our Compensation Committee on the grant date, multiplied by the number of shares of common stock subject to the stock appreciation right. The term of a stock appreciation right will be set by our Compensation Committee but may not exceed 10 years from the grant date. Payment to a participant upon the exercise of a stock appreciation right may be either in cash, stock or property as specified in the award agreement or as determined by our Compensation Committee. The Amendedrelated compensation tables and Restated 2014 Plan provides that participants terminated for “cause” will forfeit all of their stock appreciation rights, whether or not vested. Participants terminated for any other reason will forfeit their unvested stock appreciation rights, retain their vested stock appreciation rights, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested stock appreciation rights, unless such appreciation rights expire sooner. The Amended and Restated 2014 Plan authorizes our Compensation Committee to provide for different treatment of stock appreciation rights upon termination than that described above, as determined in its discretion.narrative.”
Restricted Stock. A restricted stock award is an award of restricted common stock that does not vest until a specified period of time has elapsed, and/or upon the achievement of performance or other conditions determined by our Compensation Committee, and which will be forfeited if the conditions to vesting are not met. During the period that any restrictions apply, transfer of the restricted common stock is generally prohibited. Unless otherwise specified in their award agreement, participants generally have all of the rights of a stockholder as to the restricted common stock, including the right to vote such common stock, provided, that any cash or stock dividends with respect to the restricted common stock will be withheld by us and will be subject to forfeiture to the same degree as the restricted common stock to which such dividends relate. Except as otherwise provided by our Compensation Committee, in the event a participant is terminated for any reason, the vesting with respect to the participant’s restricted stock will cease, and as soon as practicable following the termination, we will repurchase all of such participant’s unvested restricted stock at a purchase price equal to the original purchase price paid for the restricted stock, or if the original purchase price is equal to $0, the unvested restricted stock will be forfeited by the participant to us for no consideration.
Restricted Stock Units. A restricted stock unit is an unfunded and unsecured obligation to issue common stock (or an equivalent cash amount) to the participant in the future. Restricted stock units become payable on terms and conditions determined by our Compensation Committee and will vest and be settled at such times in cash, common stock, or other specified property, as determined by our Compensation Committee. Participants have no rights of a stockholder as to the restricted stock units, including no voting rights or rights to dividends, until the underlying common stock is issued or becomes payable to the participant. Except as otherwise provided by our Compensation Committee, in the event a participant is terminated for any reason, the vesting with respect to the participant’s restricted stock units will cease, each of the participant’s outstanding unvested restricted stock units will be forfeited for no consideration as of the date of such termination, and any stock remaining undelivered with respect to the participant’s vested restricted stock units will be delivered on the delivery date specified in the applicable award agreement.
Other Stock-Based Compensation. Under the Amended and Restated 2014 Plan, our Compensation Committee may grant other types of equity-based awards subject to such terms and conditions that our Compensation Committee may determine. Such awards may include the grant of dividend equivalents, which generally entitle the participant to receive amounts equal to the dividends that are paid on the stock underlying the award.
Adjustments. The aggregate number of shares of common stock reserved and available for issuance under the Amended and Restated 2014 Plan, the individual limitations, the number of shares of common stock covered by each outstanding award, and the price per share of common stock underlying each outstanding award will be equitably and proportionally adjusted or substituted, as determined by our Compensation Committee in its sole discretion, as to the number, price or kind of stock or other consideration subject to such awards in connection with stock dividends, extraordinary cash dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations, exchanges, or other relevant changes in our capitalization affecting our common stock or our capital structure which occurs after the date of grant of any award, in connection with any extraordinary dividend declared and paid in respect of stock or in the event of any change in applicable law or circumstances that results
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in or could result in, as determined by the Compensation Committee in its sole discretion, any substantial dilution or enlargement of the rights intended to be granted to, or available for, participants in the Amended and Restated 2014 Plan.
Corporate Events. In the event of a merger, amalgamation, or consolidation involving us in which we are not the surviving corporation or in which we are the surviving corporation but the holders of our common stock receive securities of another corporation or other property or cash, a “change in control” (as defined in the Amended and Restated 2014 Plan), or a reorganization, or liquidation of us, our Compensation Committee may, in its discretion, provide for the assumption or substitution of outstanding awards, accelerate the vesting of outstanding awards, cash-out outstanding awards or replace outstanding awards with a cash incentive program that preserves the value of the awards so replaced.
Transferability. Unvested awards under the Amended and Restated 2014 Plan may not be sold, transferred, pledged, or assigned other than by will or by the applicable laws of descent and distribution, unless (for awards other than incentive stock options) otherwise provided in an award agreement or determined by our Compensation Committee.
Amendment. Our Board or our Compensation Committee may amend the Amended and Restated 2014 Plan or outstanding awards at any time. Our stockholders must approve any amendment if their approval is required pursuant to applicable law or the applicable rules of each national securities exchange on which our common stock is traded. No amendment to the Amended and Restated 2014 Plan or outstanding awards which materially impairs the right of a participant is permitted unless the participant consents in writing.
Termination. The Amended and Restated 2014 Plan will terminate on February 21, 2029. In addition, our Board or our Compensation Committee may suspend or terminate the Amended and Restated 2014 Plan at any time. Following any such suspension or termination, the Amended and Restated 2014 Plan will remain in effect to govern any then outstanding awards until such awards are forfeited, terminated or otherwise canceled or earned, exercised, settled or otherwise paid out, in accordance with their terms.
Clawback; Sub-Plans. All awards under the Amended and Restated 2014 Plan will be subject to any incentive compensation clawback or recoupment policy currently in effect, or as may be adopted by our Board (or any committee or subcommittee thereof) and, in each case, as may be amended from time to time. In addition, our Compensation Committee may adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Amended and Restated 2014 Plan by individuals who are non-U.S. nationals or are primarily employed or providing services outside the U.S., and may modify the terms of any awards granted to such participants in a manner deemed by our Compensation Committee to be necessary or appropriate in order that such awards conform with the laws of the country or countries where such participants are located.
No-Repricing of Awards. No awards under the Amended and Restated 2014 Plan may be repriced without stockholder approval. For purposes of the Amended and Restated 2014 Plan, “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of the award to lower its exercise price or base price (other than on account of capital adjustments resulting from stock splits), (ii) any other action that is treated as a repricing under generally accepted accounting principles, and (iii) repurchasing for cash or canceling an award in exchange for another award at a time when its exercise price or base price is greater than the fair market value of the underlying stock.
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Certain U.S. Federal Income Tax Consequences
The following is a brief discussion of certain U.S. federal income tax consequences for awards granted under the Amended and Restated 2014 Plan. The Amended and Restated 2014 Plan is not subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and it is not, nor is it intended to be, qualified under Section 401(a) of the Code. This discussion is based on current law, is not intended to constitute tax advice, and does not address all aspects of U.S. federal income taxation that may be relevant to a particular participant in light of his or her personal circumstances and does not describe foreign, state, or local tax consequences, which may be substantially different. Holders of awards under the Amended and Restated 2014 Plan are encouraged to consult with their own tax advisors.
Non-Qualified Stock Options and Stock Appreciation Rights. With respect to non-qualified stock options and stock appreciation rights, (i) no income is realized by a participant at the time the award is granted; (ii) generally, at exercise, ordinary income is realized by the participant in an amount equal to the difference between the exercise or base price paid for the shares and the fair market value of the shares on the date of exercise (or, in the case of a cash-settled stock appreciation right, the cash received), and the participant’s employer is generally entitled to a tax deduction in the same amount subject to applicable tax withholding requirements; and (iii) upon a subsequent sale of the stock received on exercise, appreciation (or depreciation) after the date of exercise is treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held, and no deduction will be allowed to such participant’s employer.
Incentive Stock Options. No income is realized by a participant upon the grant or exercise of an incentive stock option, however, such participant will generally be required to include the excess of the fair market value of the shares at exercise over the exercise price in his or her alternative minimum taxable income. If shares are issued to a participant pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such participant within two years after the date of grant or within one year after the transfer of such shares to such participant, then (i) upon sale of such shares, any amount realized in excess of the exercise price will be taxed to such participant as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) no deduction will be allowed to the participant’s employer for federal income tax purposes.
If shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of either holding period described above, generally (i) the participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at exercise (or, if less, the amount realized on the disposition of such shares) over the exercise price paid for such shares and (ii) the participant’s employer will generally be entitled to deduct such amount for federal income tax purposes. Any further gain (or loss) realized by the participant will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction by the employer.
Subject to certain exceptions for disability or death, if an incentive stock option is exercised more than three months following termination of employment, the exercise of the stock option will generally be taxed as the exercise of a non-qualified stock option.
Other Stock-Based Awards. The tax effects related to other stock-based awards under the Amended and Restated 2014 Plan are dependent upon the structure of the particular award.
Withholding. At the time a participant is required to recognize ordinary compensation income resulting from an award, such income will be subject to federal (including, except as described below, Social Security and Medicare tax) and applicable state and local income tax and applicable tax withholding requirements. If such participant’s year-to-date compensation on the date of exercise exceeds the Social Security wage base limit for such year ($128,400 in 2019), such participant will not have to pay Social Security taxes on such amounts. The Company is required to report to the appropriate taxing authorities the ordinary income received by the participant, together with the amount of taxes withheld to the Internal Revenue Service and the appropriate state and local taxing authorities.
Section 162(m). In general, Section 162(m) of the Code generally denies a publicly held corporation a deduction for federal income tax purposes for compensation in excess of $1 million per year paid per person paid to certain “covered employees.” The Compensation Committee is authorized to grant awards that are not qualified under Section 162(m) of the Code; however, the Compensation Committee will continue to monitor the applicability of Section 162(m) of the Code on our ongoing compensation arrangements and intends to continue to compensate our employees in a manner consistent with the best interests of the Company and its stockholders.
Section 409A. Certain awards under the Amended and Restated 2014 Plan may be subject to Section 409A of the Code, which regulates “nonqualified deferred compensation” (as defined in Section 409A of the Code). If an award under the Amended and Restated 2014 Plan (or any other Company plan) that is subject to Section 409A of the Code is not administered in compliance with Section 409A of the Code, then all compensation under the Amended and Restated 2014 Plan that is considered “nonqualified deferred compensation” (and awards under any other Company plan that are required pursuant to Section 409A of the Code to be aggregated with the award under the Amended and Restated 2014 Plan) will be taxable to the participant as ordinary income in the year of the violation, or if later, the year in which the compensation subject to the award is no longer subject to a substantial risk of forfeiture. In addition, the participant will be subject to an additional tax equal to 20% of the compensation that is required to be included in income as a result of the violation, plus interest from the date that the compensation subject to the award was required to be included in taxable income.
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Certain Rules Applicable to “Insiders.” As a result of the rules under Section 16(b) of the Exchange Act, depending upon the particular exemption from the provisions of Section 16(b) utilized, “insiders” (as defined in Section 16(b)) may not receive the same tax treatment as set forth above with respect to the grant and/or exercise or settlement of awards. Generally, insiders will not be subject to taxation until the expiration of any period during which they are subject to the liability provisions of Section 16(b) with respect to any particular award. Insiders should check with their own tax advisors to ascertain the appropriate tax treatment for any particular award.
New Plan Benefits
Because awards to be granted in the future under the Amended and Restated 2014 Plan are at the discretion of the Compensation Committee, it is not possible to determine the benefits or the amounts that have been or will be received by eligible participants under the Amended and Restated 2014 Plan.
Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2018
The following table sets forth, as of December 31, 2018, information concerning equity compensation plans under which our securities are authorized for issuance. The table does not reflect grants, awards, exercises, terminations or expirations since that date.
Plan Category |
| Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (2) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in first column) (3) | ||
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| (a) | (b) | (c) | ||
Equity compensation plans approved by security holders |
| 888,989 |
| — | 378,881 |
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Equity compensation plans not approved by security holders |
| — |
| — | — |
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Total |
| 888,989 |
| — | 378,881 |
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The approval of this proposal requires the affirmative vote of a majority of the votes cast in person or by proxy and entitled to vote thereon at the 20192021 annual meeting, assuming that a quorum is present.
OUR BOARD UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTEOur Board of Directors unanimously recommends a vote “FOR” APPROVAL OF THE AMENDED AND RESTATED 2014 OMNIBUS INCENTIVE PLAN.the adoption, on a non-binding, advisory basis, of the resolution approving the compensation of our named executive officers described under the heading “Executive Compensation” in our proxy statement.
4.4. Non-Binding, Advisory Vote on the Frequency of the Stockholder Vote on Executive Compensation
Section 14A also provides that we include in this proxy statement a separate, advisory, non-binding stockholder vote on whether the Say-on-Pay Vote should occur every one, two or three years (Say-When-on-Pay Vote). Stockholders have the option to vote for any one of the three options, or to abstain on the matter.
The Board has determined that an advisory vote on executive compensation every three years is the best approach for the Company based on a number of considerations, including the following:
● An advisory vote every three years would give the Board sufficient time to thoughtfully consider the results of the vote and to implement any desired changes to executive compensation policies and procedures; and
● A three-year cycle would provide investors sufficient time to evaluate the effectiveness of the short- and long-term compensation strategies and related business outcomes of the Company. We believe a short review cycle will not allow for a meaningful evaluation of our performance against our compensation practices, as any adjustment in pay practices would take time to implement and to be reflected in our financial performance and in the price of our common stock.
The stockholders also have the opportunity to provide additional feedback on important matters involving executive compensation even in years when a Say-on-Pay Vote does not occur. As discussed under “Communications with the
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Board” on page 17, the Company provides stockholders an opportunity to communicate directly with the Board on any issue, including executive compensation.
You may indicate your preferred voting frequency by voting for the option of three years, two years, or one year, or you may abstain from voting. We will consider stockholders to have expressed a non-binding preference for the frequency that receives the highest number of favorable votes.
Although this selection is non-binding in nature, our Board and Compensation Committee, which is responsible for designing and administering our executive compensation program, value the opinions expressed by stockholders in their vote on this proposal, and will consider the stockholders’ preference in determining the frequency of future votes on compensation program for our named executive officers. However, the Board may decide that it is in the best interests of our stockholders and the Company to hold a non-binding, advisory Say on Pay Vote more or less frequently than the option selected by our stockholders.
The Board of Directors unanimously recommends that a non-binding, advisory vote to approve the compensation of our named executive officers be held every THREE years.
Vote Required
The approval of this proposal requires the affirmative vote of a majority of the votes cast in person or by proxy and entitled to vote thereon at the 2021 annual meeting, assuming that a quorum is present.
Recommendation of the Board
Our Board of Directors unanimously recommends a vote “FOR” the adoption, on a non-binding, advisory basis, of the resolution approving the Non-Binding, Advisory Vote on the Frequency of the Stockholder Vote on Executive Compensation of our named executive officers described under the heading “Executive Compensation” in our proxy statement.
5. Such Other Business as May ProperlyProperly Come before the Annual Meeting
We do not know of any other matters to be voted on at the meeting. If, however, other matters are properly presented for a vote at the meeting, the persons named as proxies will vote your properly submitted proxy according to their judgment on those matters.
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2021 Proxy Statement 9 |
BOARD OF DBoard of IRECTORSDirectors
Composition of the Board of Directors
Our Amended and Restated Certificate of Incorporation and Bylaws provide that the authorized number of directors shall be fixed from time to time by a resolution of the majority of our Board. Our Board is currently comprised of the following seven members: Kirk K. Calhoun, Court D. Carruthers, Eva M. Kalawski, Jacob Kotzubei, Stephen P. Larson, Philip E. Norment and Mary Ann Sigler.
In connection with the IPO, the Company and Platinum entered into an amended and restated investor rights agreement (the “Investor Rights Agreement”) in August 2014 that provided, among other things, that for so long as Platinum collectively beneficially owns (i) at least 30% of the voting power of the outstanding capital stock of the Company, Platinum will have the right to nominate for election to the Board no fewer than that number of directors that would constitute a majority of the number of directors if there were no vacancies on the Board, (ii) at least 15% but less than 30% of the voting power of the outstanding capital stock of the Company, Platinum will have the right to nominate two directors and (iii) at least 5% but less than 15% of the voting power of the outstanding capital stock of the Company, Platinum will have the right to nominate one director. The agreement also provides that if the size of the Board is increased or decreased at any time, Platinum’s nomination rights will be proportionately increased or decreased, respectively, rounded up to the nearest whole number. Under the Investor Rights Agreement, Platinum has nominated Ms. Kalawski, Mr. Kotzubei, Mr. Norment and Ms. Sigler. Our Corporate Governance Guidelines provide that if an officer serving on our Board resigns or retires from his or her executive position with the Company or if a non-management director’s external job changes from the time such director was last elected, such individual shall offer his or her resignation from the Board at the same time; however, whether or not the individual shall continue to serve on the Board is a matter for determination on a case-by-case basis by the Board.
Our Board is divided into three staggered classes of directors of the same or nearly the same number. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the directors of the same class whose terms are then expiring. The terms of the directors will expire upon election and qualification of successor directors at the annual meeting of stockholders to be held during the years 20192021 for the Class I directors, 2022 for the Class II directors, 2020and 2023 for the Class III directors and 2021 for the Class I directors.
10 RYERSON HOLDING CORPORATION |
Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class shall consist of one-third of the directors. The following table sets forth information as of the date of this proxy statement regarding the nominees for directors and other directors who will serve as directors in the classes and for the terms specified below:
Name |
| Age |
|
| Independent (Yes/No) |
| Director Since |
| Expiration of Current Term | |
Nominees for Director |
|
|
|
|
|
|
|
|
|
|
Class II |
|
|
|
|
|
|
|
|
|
|
Stephen P. Larson |
|
| 62 |
|
| Yes |
| 2014 |
| 2019* |
Philip E. Norment |
|
| 59 |
|
| No |
| 2014 |
| 2019* |
Continuing Directors |
|
|
|
|
|
|
|
|
|
|
Class III |
|
|
|
|
|
|
|
|
|
|
Kirk K. Calhoun |
|
| 74 |
|
| Yes |
| 2014 |
| 2020 |
Jacob Kotzubei |
|
| 50 |
|
| No |
| 2010 |
| 2020 |
Class I |
|
|
|
|
|
|
|
|
|
|
Court D. Carruthers |
|
| 46 |
|
| Yes |
| 2015 |
| 2021 |
Eva M. Kalawski |
|
| 63 |
|
| No |
| 2007 |
| 2021 |
Mary Ann Sigler |
|
| 64 |
|
| No |
| 2010 |
| 2021 |
|
|
Additional information regarding the nominees and continuing directors is set forth below and is based on information furnished to us by the nominees and directors:
14
Nominees for Director
The Board has nominated Mr. Larson and Mr. Norment for election at the 2019 annual meeting, each to hold office until the annual meeting of stockholders in 2022 (subject to the election and qualification of their successors or the earlier of their death, resignation or removal). Each is currently a director.
Stephen P. Larson has been a director since October 2014. Mr. Larson completed a 35-year career with Caterpillar Inc. in 2014 after holding multiple positions in the areas of accounting, finance, marketing and logistics. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. His senior leadership positions for Caterpillar included roles as Product Manager; Regional Manager for Canada and the Eastern United States; Vice President, Caterpillar Financial Services - Asia Pacific; Caterpillar Logistics President - Americas region; and from 2007 until his retirement, Vice President, Caterpillar Inc. and President and Chairman of Caterpillar Logistics Services, a wholly-owned subsidiary of Caterpillar Inc. From November 2015 to August 2016, Mr. Larson served as Interim Chief Executive Officer and was already a member of the board of directors of Neovia Logistics Services, LLC (formerly Caterpillar Logistics Services), a global industrial contract logistics company. Mr. Larson previously served for six years as a Commissioner on the board of the Metropolitan Airport Authority of Peoria, Illinois. He earned a Bachelor of Business Administration and a Master of Business Administration, both from Western Illinois University. Mr. Larson’s experience in accounting, finance and other areas for a large international manufacturer has led the Board to conclude that he has the background and skills necessary to serve as a director of the Company.
Philip E. Norment has been a director since April 2014. Mr. Norment is a Partner at Platinum. He is a member of Platinum’s Investment Committee, and the President, Portfolio Operations, responsible for evaluating acquisition opportunities and integrating new acquisitions into the portfolio. Prior to joining Platinum in 1997, Mr. Norment served in a variety of management positions at Pilot Software, Inc., achieving the position of Chief Operating Officer. Over the course of 12 years, he worked in the areas of global support, operations, consultative services and sales support. Mr. Norment currently serves as the chairman of the board of directors and on the audit committee of Key Energy Services, Inc (NYSE: KEG). Mr. Norment earned a Bachelor’s degree in Economics and a Master of Business Administration from the University of Massachusetts Amherst. Mr. Norment’s experience in executive management oversight, private equity, and transactional matters has led the Board to conclude that he has the varied expertise necessary to serve as a director of the Company.
* | Current term expires at this annual meeting. Our Board has determined that Messrs. Calhoun, Carruthers and Larson are independent under the NYSE rules. |
Additional information regarding the nominees and continuing directors is set forth below and is based on information furnished to us by the nominees and directors:
The Board has nominated Mses. Kalawski and Sigler, and Mr. Carruthers for election at the 2021 annual meeting, each to hold office until the annual meeting of stockholders in 2024 (subject to the election and qualification of their successors or the earlier of their death, resignation or removal). Each is currently a director.
EVA M. KALAWSKI Director since: July 2014 | Eva M. Kalawski joined Platinum in 1997, is a former Partner at Platinum and served as the firm’s General Counsel until July 2018. She currently serves as Special Counsel and Assistant Secretary of Platinum, and serves or has served as an officer and/or director of many of the firm’s portfolio companies. Prior to joining Platinum in 1997, Ms. Kalawski was Vice President of Human Resources, General Counsel and Secretary for Pilot Software, Inc. Ms. Kalawski earned a Bachelor of Political Science and French from Mount Holyoke College, Massachusetts, and a Juris Doctor from Georgetown University Law Center, Washington, D.C. Ms. Kalawski’s expertise and experience managing the legal operations of many portfolio companies has led the Board to conclude that she has the background and skills necessary to serve as a director of the Company. |
MARY ANN SIGLER Director since: January 2014
Public Company Directorships: Key Energy Services, Inc. (NYSE: KEG) | Mary Ann Sigler serves as Platinum’s Chief Financial Officer and Chief Compliance Officer. Ms. Sigler joined Platinum in 2004 and is responsible for overall accounting, tax and financial reporting as well as managing strategic planning projects for the firm. Prior to joining Platinum, Ms. Sigler was with Ernst & Young LLP for 25 years where she was a Partner. Ms. Sigler holds a Master of Business Taxation from the University of Southern California and a Bachelor of Arts in Accounting from the California State University at Fullerton. Ms. Sigler is a Certified Public Accountant in California, as well as a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants. She currently serves on the board of directors of Key Energy Services, Inc. Ms. Sigler’s experience in accounting and strategic planning matters has led the Board to conclude that she has the requisite qualifications to serve as a director of the Company and facilitate its continued growth. |
2021 Proxy Statement 11 |
COURT D. CARRUTHERS Director since: August 2015 Public Company Directorships: US Foods Holding Corp. (NYSE: USFD) | Court D. Carruthers serves as President and CEO of TricorBraun, Inc., a global packaging solutions company, where he is also a director. He is the founder and principal of CKAL Advisory Partners, LLC. He previously served as Senior Vice President and Group President, Americas, of W.W. Grainger, Inc., a broad-line supplier of maintenance, repair and operating (MRO) products, from 2013 until July 2015. Prior to that time, he had served as President, Grainger U.S., from 2012 until 2013; President, Grainger International, from 2009 until 2012; and President, Acklands-Grainger, from 2006 until 2009. He was appointed a Senior Vice President of Grainger in 2007. Mr. Carruthers serves as a director of US Foods Holding Corp. He is a past director of a number of private and public companies including Monotaro, PSS Companies, Shoes for Crews, Follett Corp., and Foundation Building Materials. Mr. Carruthers currently serves on the boards of WC Hockey NFP and the Gorton Community Center. He is a Chartered Professional Accountant (Canada, nonpracticing), and holds a Bachelor of Commerce degree from the University of Alberta in Edmonton, Alberta, Canada, and a Master of Business Administration from Queens University in Kingston, Ontario, Canada. His substantial prior experience as a senior executive for a large international distribution company has led the Board to conclude that Mr. Carruthers has the background and skills necessary to serve as a director of the Company. |
12 RYERSON HOLDING CORPORATION |
Continuing Directors
Messrs. Calhoun, Kotzubei, Larson and Norment will remain directors after the annual meeting.
JACOB KOTZUBEI Director since: January 2014 Public Company Directorships: KEMET Corp. (NYSE: KEM) Key Energy Services, Inc. (NYSE: KEG) | Jacob Kotzubei joined Platinum in 2002 and is a Partner at the firm. Mr. Kotzubei serves as a director of a number of Platinum’s portfolio companies. Prior to joining Platinum in 2002, Mr. Kotzubei was a Vice President of the Goldman Sachs Investment Banking Division – High Tech Group in New York City, and the head of the East Coast Semiconductor Group. Previously, he was an attorney at Sullivan & Cromwell LLP in New York City, specializing in mergers and acquisitions. Mr. Kotzubei received a Bachelor’s degree from Wesleyan University and holds a Juris Doctor from Columbia University School of Law. Mr. Kotzubei serves on the board of directors of KEMET Corp., and Key Energy Services, Inc. Mr. Kotzubei’s experience in executive management oversight, private equity, capital markets and transactional matters has led the Board of Directors to conclude that he has the varied expertise necessary to serve as a director of the Company. |
STEPHEN P. LARSON Director since: October 2014 | Stephen P. Larson completed a 35-year career with Caterpillar Inc. in 2014 after holding multiple positions in the areas of accounting, finance, marketing and logistics. Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. His senior leadership positions for Caterpillar included roles as Product Manager; Regional Manager for Canada and the Eastern United States; Vice President, Caterpillar Financial Services - Asia Pacific; Caterpillar Logistics President - Americas region; and from 2007 until his retirement, Vice President, Caterpillar Inc. and President and Chairman of Caterpillar Logistics Services, a wholly-owned subsidiary of Caterpillar Inc. From November 2015 to August 2016, Mr. Larson served as Interim Chief Executive Officer and was already a member of the board of directors of Neovia Logistics Services, LLC (formerly Caterpillar Logistics Services), a global industrial contract logistics company. Mr. Larson previously served for six years as a Commissioner on the board of the Metropolitan Airport Authority of Peoria, Illinois. He earned a Bachelor of Business Administration and a Master of Business Administration, both from Western Illinois University. Mr. Larson’s experience in accounting, finance and other areas for a large international manufacturer has led the Board to conclude that he has the background and skills necessary to serve as a director of the Company. |
PHILIP E. NORMENT Director since: April 2014 Public Company Directorships: Key Energy Services, Inc. (NYSE: KEG) | Philip E. Norment is a Partner at Platinum. He is a member of Platinum’s Investment Committee, and the President, Portfolio Operations, responsible for evaluating acquisition opportunities and integrating new acquisitions into the portfolio. Prior to joining Platinum in 1997, Mr. Norment served in a variety of management positions at Pilot Software, Inc., achieving the position of Chief Operating Officer. Over the course of 12 years, he worked in the areas of global support, operations, consultative services and sales support. Mr. Norment currently serves as the chairman of the board of directors and on the audit committee of Key Energy Services Inc. Mr. Norment earned a Bachelor of Economics and a Master of Business Administration from the University of Massachusetts Amherst. Mr. Norment’s experience in executive management oversight, private equity, and transactional matters has led the Board to conclude that he has the varied expertise necessary to serve as a director of the Company. |
Meetings of the Board and Board Committees
During 2020, our Board met six times. To monitor COVID-19’s impact on our business, our directors held a special meeting with management in April 2020. In addition to the meeting of the full Board, directors also attended meetings of Board committees on which they served. All of the directors attended at least 89% of the meetings of the Board and the committees on which they served. While we do not have a formal policy requiring them to do so, we encourage our
2021 Proxy Statement 13 |
directors to attend our annual meeting of stockholders. All of our seven directors attended our 2020 annual meeting of stockholders, which we held virtually due to the COVID-19 pandemic.
The standing committees of the Board, with the membership indicated as of February 28, 2021, are set forth in the table below. The Board has an Executive Committee, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The Board also appoints an ad hoc Pricing Committee from time to time as needed. In July 2020, the Pricing Committee comprise of Messrs. Kotzubei, Norment, and Larson met to approve the refinancing of the Company’s senior secured notes.
Executive Committee | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | |||||
Kirk K. Calhoun* | X(C)(F) | X | ||||||
Court D. Carruthers* | X | |||||||
Eva M. Kalawski | X | |||||||
Jacob Kotzubei | X(C) | X(C) | ||||||
Stephen P. Larson* | X | X | ||||||
Philip E. Norment | X | X | ||||||
Mary Ann Sigler | X | X(C) |
* | Determined by our Board to be independent under the NYSE rules. |
(C) | Committee Chair. |
(F) | Audit Committee Financial Expert |
Our policies and practices reflect corporate governance standards that comply with the NYSE rules and the corporate governance requirements of the Sarbanes-Oxley Act, including:
O | Our Board adopted clear corporate governance policies, including standards for determining director independence; |
O | Our Board committee charters clearly establish their respective roles and responsibilities; |
O | Our directors meet regularly in executive session without management present; |
O | We have a code of ethics and business conduct that applies to all Ryerson directors, officers and associates; |
O | Our chief executive officer, chief financial officer and other senior financial officers are subject to an additional code of ethics to promote (i) honest and ethical conduct; (ii) full, fair, accurate, timely and understandable disclosure in SEC filings; and (iii) compliance with applicable laws, rules and regulations; |
O | Our internal audit function maintains critical oversight over the key areas of our business, compliance processes and controls, and reports regularly to the Audit Committee; |
O | We have a compliance hotline service that permits employees to report violations of our code of ethics or other issues of significant concern on a confidential basis, via a toll-free telephone number or the Internet; and |
O | Concerns related to the Company’s financial statements, accounting practices, or internal controls may be communicated in writing to the Company’s Audit Committee. |
Under our Bylaws, the Board may appoint one of the directors as Chairman of the Board. The Chairman of the Board may be a management or a non-management director and may or may not be the same individual as our CEO (if our CEO is a director), at the option of the Board. The Board believes it should be free to make this determination depending on what it believes is best for the Company in light of all the circumstances. The Company’s CEO is currently not a member of the Board and the Board currently does not have a Chairman of the Board. This leadership structure also allows our CEO to focus his time and energy on operating and managing the Company, and leverages the experiences and perspectives of all of the Company’s directors.
Our directors meet at regularly scheduled executive sessions without management present, usually in conjunction with regularly scheduled Board meetings. In addition, at least once each year the independent directors meet in executive session without any other persons present. One of our independent directors is chosen by the directors at each such session of independent directors to preside over the session.
14 RYERSON HOLDING CORPORATION |
Controlled Company Status and Director Independence
As stated above, because Platinum owns more than 50% of the voting power of our common stock, we are considered to be a “controlled company” for purposes of the NYSE rules. As such, we are permitted, and have elected, to opt out of the NYSE rules that would otherwise require our Board to be comprised of a majority of independent directors and require our Compensation Committee and Nominating and Corporate Governance Committee to be comprised entirely of independent directors.
For a director to be considered independent under the NYSE rules, our Board must determine that the director nominee (or director) does not have any material relationship with the Company. To assist in making this determination, our Board adopted a policy on director independence based on the NYSE’s independence standards. A copy of the policy is available on the corporate governance page on our website, which can be found at ir.ryerson.com by clicking on “Governance.”
Under our policy on director independence, a director will be considered independent only if the Board has affirmatively determined that the director has no material relationship with the Company that would impair the director’s independent judgment. In the process of making such determinations, the Board will consider the nature, extent and materiality of the director’s relationships with the Company. When assessing the materiality of a director’s relationship with the Company, the Board should consider the issue not only from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation. The Board will consider all relevant facts and circumstances in rendering its “independence” determinations. Material relationships can include commercial, banking, consulting, legal, accounting, charitable and familial relationships, among others. In addition, a director will not be deemed “independent” for purposes of service on the Board if such director:
1. | is, or has been within the last three years, an employee of the Company, or an immediate family member of such director is, or has been within the last three years, an executive officer of the Company; |
2. | has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); |
3. | (A) is a current partner or employee of a firm that is the Company’s internal or external auditor; (B) has an immediate family member who is a current partner of such a firm; (C) has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (D) was, or has an immediate family member who was, within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time; |
4. | is, or an immediate family member of such director is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee; or |
5. | is a current employee, or has an immediate family member who is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1,000,000, or 2% of such other company’s consolidated gross revenues. |
For purposes of the Company’s policy on director independence, “immediate family member” means any of the person’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers-and sisters-in-law and anyone (other than domestic employees) who shares the person’s home.
The Board has determined that Messrs. Calhoun, Carruthers and Larson are, or during 2020 were, independent within the meaning of the NYSE rules or our policy on director independence.
As stated above, our Board of Directors unanimously recommends a vote “FOR” the election of the Board’s nominees identified above.
Our Board as a whole has responsibility for overseeing our risk management. The Board and the Audit Committee assess whether management has an appropriate framework to manage risks and whether that framework is operating effectively. On a regular basis, the Board and its committees engage with management on risk as part of broad strategic and operational discussions which encompass ongoing risks, as well as on a risk-by-risk basis. The Board exercises its oversight responsibility directly and through its committees.
2021 Proxy Statement 15 |
As a general matter, the Board and its committees are informed by reports from our management team and from our internal audit department that are designed to provide visibility to the Board about the identification and assessment of key risks and our risk mitigation strategies. In carrying out this critical responsibility, the Board has designated the Audit Committee with primary responsibility for overseeing certain enterprise risk management, including financial, cybersecurity, legal, and market risks. The Audit Committee reviews the steps management has taken to monitor and mitigate these risks. With respect to financial, cybersecurity and market risks, the Audit Committee reviews quarterly reports from Ryerson’s internal audit department, General Counsel, and Chief Information Officer.
The Board’s consideration of risk is not limited to discussions during Board and committee meetings. Rather, the Board may communicate with management as a group, or individually, concerning our most significant risks whenever it deems such communications to be appropriate. In addition, each Director has complete access to all of our employees to the extent the Director may have questions concerning a particular risk.
To monitor COVID-19’s initial impact on our business, our Board held a special meeting with management in April 2020, which included presentations and discussion on the evolving risk environment for our employees, operations and financial position. Since then, our Board continues to receive regular updates on COVID-19’s continued impact and risk to our employees, operations and financial position.
Our Compensation Committee is responsible for evaluating risk arising from our compensation policies and practices, management development and succession planning, and employment benefits and policies. Our Nominating and Governance Committee manages risks related to Board composition and succession planning, Director independence, governance, and corporate compliance and reporting obligations. In addition to overseeing certain enterprise risk management, our Audit Committee assists the Board in monitoring the Company’s compliance with legal and regulatory requirements as well as its ethical standards and policies. It also oversees our internal audit function. The committees provide reports to the full Board regarding these and other matters.
Under its charter, the internal audit department is tasked to help the Company accomplish its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of the Company’s risk management, control and governance processes. To promote independence of the department and ensure appropriate internal audit coverage, the internal audit director is responsible for leading the department and reports functionally to the Audit Committee, and administratively (i.e., day-to-day operations) to the chief financial officer. The internal audit services personnel have unrestricted access to all functions, records, property and personnel of the Company, and full and free access to the Audit Committee. The internal audit department is currently staffed entirely by a third-party auditing firm.
The scope of the department’s internal auditing encompasses, but is not limited to, the examination and evaluation of the adequacy and effectiveness of the Company’s governance, risk management and internal controls, as well as the quality of performance in carrying out assigned responsibilities to achieve the Company’s stated goals and objectives. This includes, among other things:
Ο | partnering with other governance and monitoring groups to evaluate risk exposure relating to achievement of the Company’s strategic objectives; |
Ο | monitoring and evaluating the effectiveness of the Company’s risk management processes; |
Ο | performing consulting and advisory services related to governance, risk management and control as appropriate for the Company; and |
Ο | reporting significant risk exposures and control issues, including fraud risks, governance issues, cybersecurity risks, and other matters needed or requested by the Audit Committee. |
The internal audit department provides reports on these items to the Audit Committee at each regularly scheduled Audit Committee meeting. In addition, the internal audit department is responsible for conducting an annual risk assessment and developing a corresponding annual audit plan using a risk-based approach to monitor and report on the adequacy and effectiveness of the Company’s processes for controlling its activities and managing its risks.
Governance Guidelines and Committee Charters
We maintain a corporate governance page on our website that includes our Corporate Governance Guidelines, Code of Ethics and Business Conduct and the charters for our Audit, Compensation and Nominating and Corporate Governance Committees. The corporate governance page can be found at ir.ryerson.com by clicking on “Governance.” Stockholders also may obtain copies of these materials by contacting us at Investor Relations, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606, email: investorinfo@ryerson.com, or telephone: 312-292-5130.
16 RYERSON HOLDING CORPORATION |
Our Board has adopted a code of ethics (“Code of Ethics”) that contains the ethical principles by which our chief executive officer and chief financial officer, among others, are expected to conduct themselves when carrying out their duties and responsibilities. A copy of the Code of Ethics may be found at the end of our general code of ethics and business conduct, available on our corporate governance webpage located at ir.ryerson.com. We will provide a copy of our general code of ethics and business conduct, which includes the Code of Ethics, to any person, without charge, upon request, by writing to the Chief Compliance Officer, Ryerson Holding Corporation, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606 (telephone number: 312-292-5000). We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Ethics by posting such information on the corporate governance page on our website, which can be found at ir.ryerson.com by clicking on “Governance.”
An employee, officer or other interested party who has an interest in communicating with the Board may do so by directing the communication to the General Counsel of the Company. Persons who desire to communicate with the directors should send their correspondence addressed to the attention of the General Counsel, c/o Ryerson Holding Corporation, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606. The General Counsel will provide a summary of all appropriate communications to the addressed directors.
Board Committees
In December 2014, the Board established an Executive Committee in accordance with our Bylaws. The Executive Committee has and may exercise all powers that the Board legally delegates to it. In addition, during the intervals between meetings of the Board, the Executive Committee has and may exercise all of the powers of the Board, other than such powers as are granted to the Audit Committee, the Compensation Committee or the Nominating and Corporate Governance Committee, in the management of the business and affairs of the Corporation, unless otherwise limited by a resolution of the Board, the Company’s Amended and Restated Certificate of Incorporation or Bylaws, or applicable law. The Executive Committee is convened when circumstances do not allow the time, or when it is otherwise not practicable, for the entire Board to meet. The Executive Committee consists of Messrs. Kotzubei, Larson and Norment. In 2020, the Executive Committee did not meet.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee (the “Governance Committee”) considers and oversees all corporate governance issues as they arise and develops appropriate recommendations for the Board regarding those issues. It is also responsible for reviewing the requisite skills and characteristics of the members of the Board. In 2020, the Governance Committee met twice. The Governance Committee consists of Mr. Norment and Mses. Kalawski and Sigler. Because Platinum owns more than 50% of the voting power of our common stock, we are considered to be a “controlled company” for the purposes of the NYSE rules. As such, we are permitted, and have elected, to opt out of the NYSE rules that would otherwise require our Governance Committee to be comprised entirely of independent directors.
Our Board has adopted a written charter for the Governance Committee, pursuant to which the Governance Committee has, among others, the following responsibilities:
Ο | Oversee and assist our Board in identifying, reviewing and recommending nominees for election as directors and for appointment to Board committees; |
Ο | Review and evaluate the overall effectiveness and functioning of the management and the Board and the compliance of the Board with applicable legal requirements; |
Ο | Review and evaluate the composition and performance of the other Board committees, and recommend any changes to the composition, size and functions of each committee; |
Ο | Develop, review and recommend corporate governance guidelines; and |
Ο | Generally advise our Board on corporate governance and related matters. |
In selecting or recommending candidates to serve as directors, the Governance Committee takes into consideration the following criteria as approved by the Board, and as modified by the Board from time to time, and such other factors as it deems appropriate:
2021 Proxy Statement 17 |
(i) | high personal and professional ethics, values and integrity; |
(ii) | education, skill and experience that the Board deems relevant and useful, including whether such attributes or background would contribute to the diversity of the Board as a whole; |
(iii) | ability and willingness to serve on any committees of the Board; and |
(iv) | ability and willingness to commit adequate time to the proper functioning of the Board and its committees. |
The Governance Committee will consider all candidates recommended by the Company’s stockholders in accordance with the procedures set forth in the Company’s annual proxy statement. The Governance Committee may also consider candidates proposed by management. For additional information, see “Stockholder Nominations for Directors,” below on page 53.
Our Audit Committee oversees a broad range of issues surrounding our accounting and financial reporting processes and audits of our financial statements. In 2020, the Audit Committee met four times. The Audit Committee consists of Messrs. Calhoun, Carruthers and Larson. Each of Messrs. Calhoun, Carruthers and Larson are “independent” as such term is defined in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and under the applicable NYSE rules. Each is “financially literate,” and Mr. Calhoun, the chair of the Audit Committee, is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.
Our Board has adopted a written charter for the Audit Committee, pursuant to which the Audit Committee has, among others, the following responsibilities:
Ο | Review and recommend to the Board the independent auditors to be selected to audit the financial statements; |
Ο | Inquire as to the independence of the independent auditors and obtain from the independent auditors, on a periodic basis, a formal written statement delineating all relationships between the independent auditors and the Company; in addition, review the extent of non-audit services provided by the independent auditors in relation to the objectivity needed in the independent audit and recommend that the Board take appropriate action in response to the independent auditors’ written statement to satisfy the Board as to the independent auditors’ independence; |
Ο | Pre-approve all services provided by the independent auditors to the Company; |
Ο | Pre-approve appropriate funding for payment of (a) compensation to the Company’s independent auditors for preparing or issuing an audit report or performing other audit, review or attest services for the Company, (b) compensation to any advisors employed by the Committee and (c) ordinary administrative expenses necessary or appropriate to carry out its duties; |
Ο | Ensure proper audit partner rotation; |
Ο | Meet with the independent auditors and the financial management to review the scope of the audit proposed for the current year and the audit procedures to be utilized and at its conclusion review the audit with the Committee; upon completion of the audit and following each interim review of the Company’s financial statements, discuss with the independent auditors all matters required to be communicated to the Committee under generally accepted auditing standards, including the judgments of the independent auditors with respect to the quality, not just the acceptability, of the Company’s accounting principles and underlying estimates in the financial statements; |
Ο | Review with the independent auditors, the internal auditor (if any) and the financial and accounting personnel, the adequacy of the accounting and financial controls and elicits any recommendations for improvement or particular areas where augmented controls are desirable; |
Ο | Review the internal audit function of the Company including the independence and authority of its reporting obligations, the audit plans proposed for the coming year and the coordination of such plans with the work of the independent auditors; |
Ο | Receive before each meeting a summary of findings from completed internal audits and a progress report on the proposed internal audit plan with explanations for any deviations from the original plan; |
Ο | Review the financial statements contained in the annual and quarterly reports with management and the independent auditors; |
Ο | Review any year-to-year changes in accounting principles or practices; |
Ο | Provide sufficient opportunity at each meeting for the internal and independent auditors to meet with the Committee without management present; among the items to be discussed in these meetings are the independent auditors’ evaluation of the financial, accounting and auditing personnel, and their cooperation during the audit; |
18 RYERSON HOLDING CORPORATION |
Ο | Review with the independent auditors any problems or difficulties the auditors may have encountered, including any disagreements with management; |
Ο | Review accounting and financial personnel and succession planning; |
Ο | Oversee the cybersecurity program, including mitigation efforts related to cybersecurity risks; |
Ο | Investigate any matter brought to its attention within the scope of its duties, with the power to retain professional advice (at the expense of the Company) for this purpose if, in its judgment, that is appropriate; and |
Ο | Establish, as necessary, detailed pre-approval policies and procedures for engaging audit and non-audit services. |
The Audit Committee also reviews related party transactions. For additional information regarding our related party policy, see “Related Party Transactions,” below on page 51.
Audit, Audit-related and Other Non-Audit Services
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation for and overseeing the work of Ernst & Young, our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by Ernst & Young. For additional information regarding the services provided by Ernst & Young and the fees for such services, see “Ratification of Appointment of Independent Registered Public Accounting Firm,” above on page 7.
The Audit Committee must pre-approve any audit or any permissible non-audit services to be provided by the independent registered public accounting firm. The Audit Committee has established pre-approval policies and procedures. Permissible non-audit services are services allowed under SEC regulations. The Audit Committee may pre-approve certain specific categories of permissible non-audit services up to an annual budgeted dollar limit. If any permissible non-audit services do not fall within a pre-approved category, or exceed the approved fees or budgeted amount, the services and the additional fees have to be pre-approved by the Audit Committee on a project-by-project basis. The Audit Committee may delegate to any member of the Committee the duty to pre-approve any payments of compensation to the independent registered public accounting firm, provided that the decisions of such member to grant pre-approvals shall be presented to the full Committee for ratification.
No required pre-approvals were waived or approved after the services commenced. Before approving the non-audit services described as “Tax Fees” under “Ratification of Appointment of Independent Registered Public Accounting Firm,” above on page 7, the Audit Committee reviewed whether the independent registered public accounting firm could provide those services and maintain its independence. The Audit Committee approved 100% of the audit-related and tax fees for 2020 and 2019.
The Audit Committee has adopted policies to ensure the independence of the Company’s independent registered public accounting firm, including policies on employment of audit firm employees and audit partner rotation.
2021 Proxy Statement 19 |
Audit Committee Report – Financial Statements Recommendation1
Management is responsible for the preparation, presentation and integrity of Ryerson’s consolidated financial statements and the reporting process including Ryerson’s internal controls over financial reporting and their effectiveness. The independent registered public accounting firm of Ernst & Young LLP (“EY”) is responsible for performing an independent audit of Ryerson’s consolidated financial statements. The Audit Committee’s responsibility is to monitor and oversee these activities and processes. In this context, the Audit Committee reports as follows:
1. | The Audit Committee has reviewed and discussed with management Ryerson’s audited consolidated financial statements as of and for the year ended December 31, 2020 and management has represented that the consolidated financial statements were prepared in accordance with generally accepted accounting principles; |
2. | The Audit Committee has discussed with EY the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301 (Communications with Audit Committees); and |
3. | The Audit Committee received the written disclosures and the letter from EY required by applicable requirements of the PCAOB regarding EY’s communications with the Audit Committee concerning independence and has discussed with EY its independence. |
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the Securities and Exchange Commission.
Respectfully submitted by the Audit Committee:
Kirk K. Calhoun, Chair
Court D. Carruthers
Stephen P. Larson
1 | The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the Commission, nor shall such information or report be incorporated by reference into any future filing by us under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference in such filing. |
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Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our officers and employees, including reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer and other named executive officers, evaluating the performance of those officers in light of those goals and objectives and setting compensation of those officers based on such evaluations. In 2020, the Compensation Committee met two times. The Compensation Committee consists of Messrs. Calhoun and Kotzubei and Ms. Sigler. Because Platinum owns more than 50% of the voting power of our common stock, we are considered to be a “controlled company” for the purposes of the NYSE rules. As such, we are permitted, and have elected, to opt out of the NYSE rules that would otherwise require our Compensation Committee to be comprised entirely of independent directors.
Our Board has adopted a written charter for the Compensation Committee, pursuant to which the Compensation Committee has, among others, the following authority to fulfill its duties and responsibilities:
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Ο | Review and approve annually the corporate goals and objectives applicable to the compensation of |
Ο | Review and approve the compensation for executive officers, including the review and approval of the design and implementation of any incentive arrangements, equity compensation and supplemental retirement programs; |
Ο | Review and approve grants and awards to officers and other participants under the Company’s compensation and participation plans, including the Company’s management incentive plans; |
Ο | Review and make recommendations to the Board regarding the amount and types of compensation that should be paid to the Company’s outside directors, to ensure that such pay levels remain competitive; |
Ο | Review and approve any employment, severance or termination arrangements to be made with any executive officer of the Company; |
Ο | Review all equity compensation plans under the listing standards of the NYSE or such other national securities exchange or stock market on which the Company’s securities may be listed and approve such plans in the Committee’s sole discretion; |
Ο | Annually assist management in drafting the Company’s Compensation Discussion and Analysis (“CD&A”) to be included in the Company’s public filings with the Securities and Exchange Commission by (i) articulating the discussion and analysis to be included in the CD&A, (ii) participating in or overseeing the drafting of the CD&A and (iii) reviewing the CD&A with management and determining whether to recommend to the Board that the CD&A be included in the Company’s annual report on Form 10-K or proxy statement, as applicable; |
Ο | Prepare a report annually to be filed with the Company’s annual report on Form 10-K or proxy statement, as applicable, to state whether the Committee has reviewed and discussed the CD&A with management and, based on such review and discussions, whether the Committee has recommended to the Board that the CD&A be included in the Company’s annual report on Form 10-K or proxy statement, as applicable; and |
Ο | Submit a report to the Board periodically, which shall include a review of any determinations, recommendations or issues that arise with respect to Company compensation philosophy, policies and objectives, executive compensation, management succession planning and any other matters that the Committee deems appropriate or is requested to be included by the Board. |
In addition, the Compensation Committee reviews the results of the stockholder advisory votes on (i) executive compensation, and (ii) the frequency of the stockholder votes on executive compensation.
Committee Resources and Authority
Under the Compensation Committee’s charter, the Committee also has the resources and authority to:
Ο | Retain compensation consultants, independent counsel and other advisors; |
2021 Proxy Statement 21 |
Ο | Terminate any consulting firms and such other advisors; |
Ο | Approve the consulting firms’ and other advisors’ fees and other retention terms; and |
Ο | Determine the appropriate funding (at the expense of the Company) for (i) payment of compensation to any independent counsel and other advisers employed by the Committee and (ii) ordinary administrative expenses of the Committee. |
In addition, the Committee may form and delegate its authority to subcommittees or to the Committee Chair when it deems appropriate and in the best interests of the Company, although it did not do so in 2020. Since 2016, Ryerson management, at the Compensation Committee’s request, has engaged Compensation Advisory Partners, (“CAP”) (formerly known as Vivient Consulting LLC prior to its acquisition by CAP), an independent executive compensation consultant, to assist in planning for the Company’s executive compensation program.
Compensation Committee Interlocks and Insider Participation
Mr. Kotzubei, Mr. Calhoun and Ms. Sigler served on our Compensation Committee during all of the last completed fiscal year. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or our Compensation Committee. None of the members of the Compensation Committee is now an employee of the Company. Prior to the IPO, Ms. Sigler served as the Company’s Vice President. She resigned her position as an officer in August 2014 in connection with the IPO and has not served as an officer of the Company since that time.
Compensation Committee Report1
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section of this Proxy Statement, set forth below. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and be incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Respectfully submitted by the Compensation Committee:
Jacob Kotzubei, Chair
Kirk K. Calhoun
Mary Ann Sigler
1 | The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the Commission, nor shall such information or report be incorporated by reference into any future filing by us under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference in such filing. |
22 RYERSON HOLDING CORPORATION |
Our Board has adopted a compensation program for our directors. Under the program, only directors who have been determined by the Board to be independent are eligible to receive compensation for their service as Board members. The program provides for an annual cash retainer, additional annual cash retainers for committee chairs and fees for meeting attendance, as follows:
Annual retainer |
| $ | 165,000 |
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Audit Committee chair |
| $ | 15,000 |
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Compensation Committee chair |
| $ | 10,000 |
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Nominating and Corporate Governance Committee chair |
| $ | 10,000 |
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Meeting Attendance Fees |
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Each Board meeting |
| $ | 2,000 |
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Each committee meeting |
| $ | 1,500 |
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While the annual retainer in 2020 was initially increased from $130,000 to $165,000, our directors who have been determined by the Board to be independent subsequently elected to reduce their cash retainers and meeting fees for six months by 30%. See “Impact of COVID-19 on Compensation Matters” below on page 28. The following table presents information for compensation earned by them for their service as Board members during 2020.
Director Compensation Table
Name | Fees Earned or Paid in Cash(1) | Total | ||||||||
| $ | 171,300 |
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| $ | 171,300 |
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Court D. Carruthers(3) |
| $ | 155,550 |
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| $ | 155,550 |
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Stephen P. Larson(4) |
| $ | 156,600 |
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| $ | 156,600 |
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Eva M. Kalawski |
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| — |
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| — |
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Jacob Kotzubei |
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| — |
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| — |
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Philip E. Norment |
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| — |
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| — |
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Mary Ann Sigler |
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| — |
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| — |
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(1) | In 2020, our independent directors elected to reduce cash retainers and meeting fees for six months by 30%. See “Impact of COVID-19 on Compensation Matters” below on page 28. |
(2) Consists of the annual retainer, Audit Committee chair retainer and meeting attendance fees.
(3) | Consists of the annual retainer and meeting attendance fees. |
(4) | Consists of the annual retainer and meeting attendance fees. |
We reimburse each member of our Board for out-of-pocket expenses incurred by them in connection with attending meetings of the Board and its committees. Cash compensation and reimbursements are paid in arrears on a quarterly basis. There is currently no formal policy in place relating to the granting of equity awards to our directors.
Our executive officers are elected by the Board of Directors and hold office until a successor is chosen or qualified or until their earlier resignation or removal. The following lists our executive officers and gives a brief description of their business experience as of February 28, 2021:
Edward J. Lehner, 55, has been our President & Chief Executive Officer since June 2015. Previously, he had served as our Executive Vice President and Chief Financial Officer since August 2012. Prior to joining the Company, he served as chief financial officer and chief administrative officer for PSC Metals, Inc. from 2009 to 2012. PSC Metals is a North American ferrous and non-ferrous scrap processor. Mr. Lehner earned a bachelor’s degree in accounting from the University of Cincinnati.
James J. Claussen, 48, has been the Company’s Executive Vice President & Chief Financial Officer (CFO) since January 2021. From July 2018 until that time, he had served as the president of Central Steel & Wire Co. (CS&W). Previously, he had served as the CFO of the Company's North-West Region and general manager of corporate development, and held several various leadership positions within the Company. Mr. Claussen has a bachelor's degree in
2021 Proxy Statement 23 |
accounting from Minnesota State University, Mankato, and a MBA from the University of Minnesota Carlson School of Management.
Molly D. Kannan, 39, has served as Chief Accounting Officer and Corporate Controller of the Company since January 2020. Previously, she served as our Corporate Controller since 2015, and held several various leadership positions within the Company. Ms. Kannan earned both a bachelor’s degree and a master’s degree in accounting from the University of Illinois at Urbana-Champaign.
Michael J. Burbach, 60, has been our President, North-West Region since October 2013 and effective as of April 2, 2021, Mr. Burbach will be the Chief Operating Officer of the Company. Prior to his service as President, North-West Region, he had served the Company as its President, Midwest Region since 2007. Mr. Burbach began his metals career as an inside sales representative at Vincent Metals in 1984 and has held procurement, sales and product management roles in the metals industry as well as roles in operations and senior management. Mr. Burbach received his Bachelor of Science degree from the University of Wisconsin-La Crosse.
John E. Orth, 54, has been our Executive Vice President-Operations since January 2019. Prior to that, Mr. Orth served as Senior Vice President – Operations of the Company since January 2018. Prior to joining the Corporation, since December 2011, Mr. Orth had served in various capacities for Morgan Advanced Materials, a global-materials engineering company, including as Global Managing Director (Advanced Ceramics and Metals) from March 2016 to August 2017, and as a Vice President from February 2013 to March 2016. Mr. Orth earned his bachelor’s degree in electrical engineering from Vanderbilt University, and his master’s degree in materials science and engineering and doctorate’s degree in materials science and engineering from the University of Texas at Austin.
Mark S. Silver, 50, has served as our Executive Vice President, General Counsel & Chief Human Resources Officer since February 2020. Previously, he served as our Executive Vice President, General Counsel & Secretary from February 2016 to January 2020, and as Vice President & Managing Counsel from January 2013 until February 2016. Prior to his time at the Company, from 2006 until 2012, Mr. Silver served as Vice President and Assistant General Counsel of Sara Lee Corporation, a consumer goods company. Mr. Silver earned a bachelor’s degree in political science from the University of Illinois and a Juris Doctor from Harvard University.
Srini Sundarrajan, 49, has served as our Chief Information Officer since February 2019. Prior to joining the Company, Mr. Sundarrajan was Chief Information Officer for BlueLine Rental, one of the ten largest equipment rental companies in North America. Prior to joining BlueLine in 2014 as Director of Business Applications, Mr. Sundarrajan served in executive positions at IBM and RSC Equipment Rental, where he managed outsourcing contracts and led the development of rental applications. Mr. Sundarrajan earned a bachelor’s degree in computer science from Madurai Kamaraj University and a master’s in computer applications from Bharathiar University.
24 RYERSON HOLDING CORPORATION |
Compensation Discussion and Analysis
This section explains our executive compensation philosophy, objectives and design; our compensation-setting process; our executive compensation program components; and the decisions made in 2020 with respect to the compensation of each of our named executive officers. The Company’s named executive officers for 2020 are:
Ο | Edward J. Lehner, President & Chief Executive Officer (“CEO”); |
| Ο | Molly D. Kannan, Interim Principal Financial Officer, Chief Accounting Officer & Controller (“ |
Ο | Michael J. Burbach, President, North-West |
Ο | Kevin D. Richardson, President, South-East |
| Ο | Mark S. Silver, Executive Vice
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| Ο | Erich S. Schnaufer, Former Chief Financial Officer (“former CFO”)(4). |
(1) | Effective as of January 11, 2021, the Board of Directors of the Company appointed James Claussen as Executive Vice President & Chief Financial Officer of the Company. As a result of Mr. |
(2) | Effective as of April 2, 2021, Mr. Burbach will be the Chief Operating Officer of the Company. |
(3) | On February 17, 2021, Mr. Richardson notified the Company of his intent to retire from his position as |
(4) | Mr. Schnaufer stepped down from all positions with the |
Executive Compensation Philosophy
The Company’s compensation decisions are based on the goals of recruiting, retaining and motivating individuals who could help us meet and exceed our financial and operational goals, for the purpose of providing meaningful returns to our stockholders.
Objectives. Ryerson’s executive compensation program is designed to:
Ο | align the interests of executive management with stockholders; |
Ο | provide market competitive compensation; |
Ο | attract and retain talented executives; |
Ο | differentiate rewards based on individual performance; |
Ο | encourage long-term value creation; and |
Ο | avoid incentivizing excessive risk-taking. |
Principles. Ryerson seeks to promote a high-performance culture and create a compensation program that recognizes and rewards superior individual and Company performance. The following key principles are applied by the Board and our Compensation Committee when determining the compensation approach for the Company’s executives:
Ο | Accountability – Performance-based compensation is tied to metrics for annual corporate results, applicable business unit results, and individual performance metrics. This ensures executives are held accountable through their compensation for the performance of the business and for achieving the Company performance objectives, thereby enhancing stockholder value. |
Ο | Competitive Positioning – Ryerson seeks to provide competitive total compensation that includes significant upside and downside potential for executives, with actual pay determined based on performance. For compensation decisions made based on peer group data, target compensation will be based upon a range around the median of the defined peer group. |
Ο | Market Compensation Elements – The compensation components reflect the competitive marketplace so that we can attract, motivate, reward and retain talented executives through business cycles. |
Consideration of Results of Advisory Vote on Executive Compensation
In accordance with the advisory vote on the frequency of the stockholder advisory vote on executive compensation submitted to stockholders at the Company’s annual meeting of stockholders held in 2018, the Company will hold a stockholder advisory vote on executive compensation every three years. The most recent executive compensation advisory vote was held at the Company’s 2018 annual meeting of stockholders. Accordingly, the Company is seeking
your vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement.
In connection with our 2018 stockholder vote on executive compensation, our stockholders approved, by more than 99% of the shares voted, the compensation of our named executive officers as disclosed in the proxy statement for that meeting. This level of support was a factor in the Compensation Committee’s continued application of the same principles when making compensation decisions for our named executive officers for 2019, 2020, and 2021.
Determination of Results of Advisory Vote on Executive Compensation
The Board established the Compensation Committee to oversee various compensation-related matters, including executive compensation. Since that time, the Compensation Committee has been responsible for executive compensation matters as further described above under “Compensation Committee,” beginning on page 22, and has the authority to make decisions regarding the named executive officers’ compensation. In determining the levels and mix of compensation, our Compensation Committee has not generally relied on formulaic guidelines but rather has sought to maintain a flexible compensation program that allows it to adapt components and levels of compensation to motivate and reward individual executives within the context of our desire to maximize stockholder value. Subjective factors considered in compensation determinations included an executive’s tenure with the Company, skills and capabilities, contributions as a member of the executive management team, contributions to our overall performance, and whether the total compensation potential and structure were sufficient to ensure the retention of an executive when considering the compensation potential that may be available elsewhere.
Use of Peer Groups for Compensation Matters
Since 2016, Ryerson management, at the Compensation Committee’s request, has annually engaged an independent executive compensation consultant, currently Compensation Advisory Partners (“CAP,” and formerly Vivient Consulting prior to its acquisition by CAP), to assist in planning for the Company’s executive compensation program. As an outside advisor, CAP has assisted in evaluating executive compensation programs, providing general executive compensation consulting support including a review of Ryerson’s compensation philosophy and compensation for Ryerson’s named executive officers. Specifically, CAP has completed competitive market positioning reviews of Ryerson’s named executive officers, based upon an assessment of relevant total compensation comparative data obtained from surveys and publicly reported proxy statements. The comparative reviews assessed the named executive officers’ base salaries, target annual bonuses (as a percentage of salary), total cash compensation and total direct compensation against the compensation paid to comparable positions reported in the surveys and comparable executives of the companies listed below, as reported by those companies. The companies (the “Peer Group”) generally are competitors of Ryerson or conduct business in industries similar to Ryerson’s and, as a group, have annual sales comparable to Ryerson’s. Overall, Ryerson’s executive salaries and target annual cash compensations are below market median relative to our Peer Group.
Allegheny Technologies Inc. |
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Applied Industrial Tech Inc. |
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| Schnitzer Steel Industries Inc. |
Commercial Metals Co. | Steel Dynamics Inc. | |
Haynes International Inc. | Timkensteel Corp. | |
Kaiser Aluminum Corp. | Worthington Industries Inc. | |
Kaman Corp. |
During 2020, our Compensation Committee removed from our Peer Group AK Steel Holding Corp. and Aleris Corporation following their acquisitions and removals from the public markets.
At the Compensation Committee’s request, CAP regularly attends Compensation Committee meetings. CAP presented its report on the competitiveness of the executive compensation program for 2020 to the Compensation Committee in December 2020. The Compensation Committee and the Board considered the report and Peer Group information in making some of its 2020 compensation decisions, as further described below.
The compensation provided to our named executive officers in 2020 consisted of the same elements generally available to our non-executive employees, including base salary, annual bonuses, and retirement and other benefits, each of which is described in more detail below. In addition, each of our named executive officers has the opportunity to participate in an equity-based long-term incentive program (other than Mr. Schnaufer, whose employment terminated effective January 3,
26 RYERSON HOLDING CORPORATION |
2020). Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide perquisites or other personal benefits to our executive officers, including the named executive officers, and do not have a formal perquisites policy, but may provide perquisites and other personal benefits in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes.
Our named executive officers may also receive compensation in connection with the termination of their employment in some circumstances, as further described below under “Narrative Relating to Summary Compensation Table and Grants of Plan-Based Awards,” on page 41, and under “Potential Payments Upon Termination or Change in Control,” on page 48.
Relationship Among the Different Components of Compensation
In order to ensure that named executive officers are held most accountable for our performance and changes in stockholder value, management and the committee generally allocate total compensation such that the portion of compensation attributable to fixed elements, such as salary and benefits, decreases with increasingly higher levels of responsibility, and the portion attributable to variable, performance-based elements increases with increasingly higher levels of responsibility. The value of the named executive officers’ 2020 base salaries, and target annual bonus opportunities for 2020 and long-term incentive plan awards granted in 2020, as a percentage of those three components, are set forth below. Each component is discussed in more detail in the sections below.
Named Executive Officer Base Salary(1) Target Annual Bonus Long-Term Incentive(2) Edward J. Lehner 34.84% 43.54% 21.62% Molly D. Kannan 58.34% 29.17% 12.50% Michael J. Burbach 48.55% 36.41% 15.03% Kevin D. Richardson 48.55% 36.41% 15.03% Mark S. Silver 52.11% 31.26% 16.63% Erich S. Schnaufer(3) — — —
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| The value of the long-term incentive award (time-vesting restricted stock units (“RSUs”) and performance-vesting restricted stock units (“PSUs”)) is determined as the grant date fair value of the awards as described in footnote |
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Impact of COVID-19 on Compensation Matters
Following the emergence of the COVID-19 pandemic for the remainder of the year, the Compensation Committee and the Board received regular updates from the Company’s leadership team regarding the impact of COVID-19 on the Company’s business, as well as the safety and well-being of the Company’s employees.
Although the pandemic very much continues, the most immediate and significant impact of COVID-19 on the Company’s business was during the second and third fiscal quarters of 2020, as federal, state and local public health officials and governmental authorities implemented quarantines, “stay-at-home” orders, social distancing measures, travel restrictions, school closures and similar mandates to combat the spread of COVID-19. Given the impacts of COVID-19 on the market and the uncertainty around potential impacts, the Company implemented several policies and procedures to protect the health and welfare of our employees first and foremost while operating as an essential business and maintaining our liquidity. While the Compensation Committee and the Board prior to the emergence of the COVID-19 pandemic had approved increased base salary levels effective July 1, 2020, the Company’s executive management team in April 2020 requested effective immediately to have their annual base salaries reduced for a period of approximately six months, and to postpone their scheduled annual salary increases. Accordingly, the named executive officers’ base salaries were not increased in 2020. The Company also suspended its matching program for the Company’s 401-k plan offered to our employees, including our named executive officers. Additionally, our independent directors elected to reduce their cash retainers and meeting fees for a period of six months by 30%.
The Compensation Committee reviewed the Company’s financial performance against the original performance target set in February 2020 and did not make any adjustments to the metrics, goals or final performance calculations under the Annual Incentive Plan. However, the Compensation Committee believes that the Company’s failure to meet the performance targets does not reflect the Company’s performance given the extraordinarily challenging circumstances due to the COVID-19 pandemic. Further, the Compensation Committee believes the Company’s ability to succeed, including in times of extraordinary challenge, depends in large measure on our ability to attract and retain executive talent. As such, the Compensation Committee, in its discretion, approved a one-time discretionary bonus, taking into consideration the
2021 Proxy Statement 27 |
Company’s performance during 2020, the impacts of the COVID-19 pandemic on the Company’s business, and the response of the Company’s executives to the pandemic, as described in more detail under the heading “Discretionary Bonuses” below. In addition, for awards under our LTIP (as described in additional detail under the heading “Long-Term Incentive Plan” below) granted in 2018 for the three-year performance period ended December 31, 2020, participants were eligible to earn PSUs based on meeting performance objectives tied to a target level of Managerial Controllable Free Cash Flow and cumulative Adjusted EBITDA, excluding LIFO, with equal weighting given to each metric. The Managerial Controllable Free Cash Flow targets for such 2018 awards were achieved at 121% whereas Adjusted EBITDA excluding LIFO expenses was achieved at 74% of target. In consideration of the Managerial Controllable Free Cash Flow exceeding the target set, which management and the Compensation Committee viewed as strongly accretive to equity, and the degree to which EBTIDA performance was hampered by the pandemic, the Compensation Committee determined that the performance metrics for the 2018 PSUs should be adjusted to provide that such PSUs were deemed achieved at 100%.
The Compensation Committee believes that these decisions take into account the uncontrollable and unforeseeable consequences of the COVID-19 pandemic, as well as the unprecedented changes in the Company’s business and industry, as well as the general economic environment, and enhances the alignment of the interests of our executives and employees with shareholder value.
The base salary payable to each named executive officer was intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities, as well as to recruit well-qualified executives. Salary is paid to ensure that we are able to attract and retain the talent necessary to lead our Company and to ensure that sufficient fixed income is provided even when variable compensation programs pay out below target (or not at all), intending to help mitigate incentive for executives to assume overly risky business strategies.
The named executive officers’ initial base salaries are generally determined in connection with the negotiation of their employment terms upon their hiring or promotion. The salary levels are then reviewed annually in connection with the Company’s salary review for all management employees. Each year, the head of the Company’s human resources department (currently our Executive Vice President, General Counsel & Chief Human Resources Officer) recommends to the CEO a salary adjustment for each officer reporting to the CEO (other than with respect to the Executive Vice President, General Counsel & Chief Human Resources Officer). This recommendation is based on a review of competitive market factors, Company budget considerations, retention considerations and the officer’s performance during the prior year, including his performance against his personal goals determined at the beginning of the prior year. After reviewing this recommendation, the CEO may make modifications based on his own assessment of individual performance and then prepares salary recommendations for the officers reporting to him. The CEO then makes his recommendations to the Compensation Committee for each officer (other than himself); the Executive Vice President, General Counsel & Chief Human Resources Officer makes a recommendation directly to the Compensation Committee regarding the CEO’s salary, which recommendation is determined in the same manner as his recommendations to the CEO regarding the other officers’ salaries. The Compensation Committee members then review the salary recommendations and, after any adjustments, determine the officers’ base salaries on behalf of the Company. In determining base salaries for our named executive officers for any particular year, the Committee generally considers, among other factors, competitive market practice, individual performance for the prior year and the mix of fixed compensation to overall compensation.
28 RYERSON HOLDING CORPORATION |
2020 Base Salaries
In February 2020, in accordance with the process described above, the Compensation Committee considered the recommendations from Mr. Silver and Mr. Lehner, the Peer Group information and other factors, including market competitiveness, and approved new base salaries of the other named executive officers effective July 2020.
However, in light of the COVID-19 pandemic and its impact on the Company’s business, the Company’s executive management team in April 2020 requested effective immediately to have their annual base salaries reduced for a period of approximately six months, and to postpone their scheduled annual salary increases. Accordingly, the named executive officers’ base salaries were not increased, but for 2020 were as follows:
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| 2020 Reduced Base Salary per COVID-19 Response(2) |
| 2020 Base Salary(3) | ||||||||||||
Named Executive Officer | Previous Base Salary(1) | Base Salary |
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| % Reduction |
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| Effective Date |
| Base Salary |
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| Effective Date | ||||||
Edward J. Lehner |
| $ | 900,000 |
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| $ | 630,000 |
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| 30% |
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| 4/20/2020 |
| $ | 900,000 |
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| 11/2/2020 |
Molly D. Kannan |
| $ | 248,325 |
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| $ | 198,660 |
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| 20% |
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| 4/20/2020 |
| $ | 248,325 |
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| 11/2/2020 |
Michael J. Burbach |
| $ | 429,510 |
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| $ | 322,132 |
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| 25% |
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| 4/20/2020 |
| $ | 429,510 |
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| 11/2/2020 |
Kevin D. Richardson |
| $ | 429,510 |
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| $ | 322,132 |
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| 25% |
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| 4/20/2020 |
| $ | 429,510 |
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| 11/2/2020 |
Mark S. Silver |
| $ | 375,100 |
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| $ | 281,325 |
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| 25% |
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| 4/20/2020 |
| $ | 375,100 |
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| 11/2/2020 |
Erich S. Schnaufer(4) |
| - |
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| - |
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| - |
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| - |
| - |
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| - |
(1) | As of July 1, 2019. |
(2) | Reflects the named executive officers’ base salaries |
(3) | As of the |
(4) | Mr. Schnaufer’s employment terminated effective |
The Company has historically maintained an annual incentive plan (“AIP”), pursuant to which its key managers (including our named executive officers) are eligible to receive performance-based cash bonuses tied to the Company’s achievement of specified financial performance targets for each year. Each year the Compensation Committee or the Board establishes objective financial performance criteria that must be met by the Company in order for bonuses to be paid (usually establishing threshold, target and maximum payout levels for each type of performance criterion), and other terms and conditions of awards under the AIP. It also approves any changes to the bonus targets for the named executive officers, which are expressed as a percentage of annual salary base rates in effect at July 1 of the applicable AIP plan year. No cash AIP bonuses are payable unless we achieve the performance thresholds set for the performance period. The Compensation Committee and our Board generally view the use of cash AIP bonuses as an effective means to compensate our named executive officers for achieving our annual financial goals. In general, a participant must be employed by the Company or its subsidiaries through the end of the AIP plan year in order to receive an AIP bonus payment, although some exceptions exist for circumstances such as retirement, death or position elimination. Additional information regarding AIP bonus payments in these circumstances is included below under “Potential Payments Upon Termination or Change in Control,” below on page 48.
The named executive officers’ target AIP bonus percentages are generally determined in connection with the negotiation of their employment terms upon their hiring or promotion. The target bonus percentages are then reviewed annually by the head of the Company’s human resources department (currently our Executive Vice President, General Counsel & Chief Human Resources Officer) who makes a recommendation to the CEO regarding any percentage adjustments for each officer reporting to the CEO (other than himself, which the CEO determines). This recommendation is based on a review of competitive market factors, Peer Group information and retention considerations. After reviewing this recommendation, the CEO may make modifications based on his own assessment, and then prepares recommendations for the officers reporting to him. The CEO then makes his recommendations to the Compensation Committee for each officer (other than himself); the Executive Vice President, General Counsel & Chief Human Resources Officer makes a recommendation directly to the Compensation Committee regarding the CEO’s percentage, which recommendation is determined in the same manner as his recommendations to the CEO regarding the other officers’ bonus opportunities. The Compensation Committee members then review the target bonus percentage recommendations and, after any adjustments, determine each officer’s target bonus percentage on behalf of the Company. In determining target bonus percentages for our named executive officers for any particular year, the Committee generally considers the same factors it uses in determining base salary rate adjustments. The Compensation Committee may make the target bonus percentage change effective for the full year or make it effective on some date later in the plan year. If a participant’s target bonus percentage is changed effective during a plan year, then the effective target bonus percentage for the plan year is a weighted average of the two percentages, based on the time during the year that each of the two percentages was in effect unless determined otherwise by the Compensation Committee.
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| 2018 Base Salary | ||||
Named Executive Officer |
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| Previous Base Salary |
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| Base Salary |
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| Effective Date | ||
Edward J. Lehner |
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| $ | 850,000 |
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| $ | 875,500 |
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| 7/2/2018 |
Erich S. Schnaufer |
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| $ | 310,000 |
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| $ | 325,500 |
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| 7/2/2018 |
Michael J. Burbach |
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| $ | 405,000 |
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| $ | 417,000 |
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| 7/2/2018 |
Kevin D. Richardson |
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| $ | 405,000 |
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|
| $ | 417,000 |
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| 7/2/2018 |
See Leong Fang |
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| $ | 300,000 |
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|
| $ | 315,000 |
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| 7/2/2018 |
| 2021 Proxy Statement29 |
2020 Annual Incentive Plan
In 2020, the Company’s 2020 annual incentive plan (the “2020 AIP��) was approved by our Compensation Committee, and the target 2020 AIP bonuses for our named executive officers were expressed as a percentage of their annual base salary rates in effect on November 30, 2020. Each such percentage was determined in accordance with the process involving our CEO and Executive Vice President, General Counsel & Chief Human Resources Officer described above.
In February 2020, the Compensation Committee considered the recommendations of Messrs. Lehner and Silver, the Peer Group information and other factors, including the factors it considered in making base salary rate adjustments, and it set the target bonus percentages of the other named executive officers as set forth in the below table, effective January 2020. The target AIP bonus levels were set to reflect the relative responsibility for our performance and to allocate appropriately the total cash opportunity between base salary and incentive-based compensation.
Named Executive Officer |
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(1)Mr. Schnaufer’s employment with the Company terminated effective January 3, 2020. For the 2020 AIP, it was determined that a combination of earnings before interest, taxes, depreciation, amortization, and other adjustments (“Adj. EBITDA, excl. LIFO”), and “economic value added” (“EVA”) should be used as the performance measures for determining the cash AIP bonus payable to our named executive officers. Adj. EBITDA, excl. LIFO and EVA were chosen as the appropriate performance measures to motivate our key executives, including the named executive officers, to both maximize earnings and increase our enterprise value. Adj. EBITDA, excl. LIFO is calculated as our net income excluding interest and other expense on debt, provision for income taxes, depreciation, amortization, reorganization, net last-in first-out inventory expenses or income, asset impairment expenses, and other charges (as reported in the Company’s annual audited financial statements included in the Company’s Form 10-K and other SEC filings). EVA is the amount by which Adj. EBITDA, excl. LIFO exceeded a carrying cost of capital applied to certain of our assets (“Cost of Capital”). Cost of Capital is equal to our net operating assets (accounts receivable plus average cost inventory plus property, plant & equipment, plus prepaid expenses & other assets, minus accounts payable, minus salaries & wages payable, and minus other current liabilities) (as reported in the Company’s annual audited financial statements included in the Company’s Form 10-K and other SEC filings) multiplied by the “cost of capital rate” of 15%. In summary, EVA is calculated as Adj. EBITDA, excl. LIFO minus the Cost of Capital. For Ms. Kannan, Messrs. Lehner, and Silver, 50% of their bonus opportunity for 2020 was based on Company (“corporate”) Adj. EBITDA, excl. LIFO and the remaining 50% was based on corporate EVA for 2020. For Mr. Richardson, 30% of his bonus opportunity for 2020 was split equally between corporate 2020 Adj. EBITDA, excl. LIFO and EVA, and the remaining 70% was split equally between his region’s 2020 Adj. EBITDA, excl. LIFO and EVA. For Mr. Burbach, 60% of his AIP bonus opportunity was split equally between corporate 2020 Adj. EBITDA, excl. LIFO and EVA, 30% was split equally between the North-West region’s Adj. EBITDA, excl. LIFO and EVA, and the remaining 10% was split equally between the Canadian Adj. EBITDA, excl. LIFO and EVA.
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Actual Payouts under the 2020 AIP
In 2020, the Company’s financial performance fell below the threshold payout level under the 2020 AIP for corporate performance for certain named executive officers. The Company’s financial performance resulted in a payout under the 2020 AIP for Mr. Burbach. Information on the achievement of the targets applicable to the named executive officers for 2020 AIP purposes is shown in the table below.
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| Performance Criteria (Corporate) Threshold (50% payout) Target (100% payout) Maximum (200% payout) 2020 Performance* Payout Percentage Performance 2020 EBITDA excl. LIFO Company Group(1) 170.0 215.0 275.0 125.7 0.0% North-West Region(2) 108.2 126.1 151.5 90.2 0.0% South-East Region(3) 106.2 123.8 148.7 73.2 0.0% Canada(2) 14.4 16.7 20.1 13.1 0.0% 2020 EVA Company Group(1) (35.0) 5.0 50.0 (55.4) 0.0% North-West Region(2) 15.7 33.6 54.5 15.2 0.0% South-East Region(3) (0.8) 16.8 36.5 (8.1) 0.0% Canada(2) (0.8) 1.5 4.2 (0.7) 52.8%
Discretionary Bonuses Given Covid-19’s unforeseeable impact on the business of the Company caused the financial performance to fall below the payout threshold set for the 2020 AIP, and recognizing that the performance metrics were established before the onset of Covid-19 and the Company’s extraordinary efforts against this extremely challenging backdrop as well as the need to address employee retention as it pertains to our named executive officers, the Compensation Committee approved one-time discretionary bonuses, including for our named executive officers (other than Mr. Schnaufer, whose employment with the Company terminated effective January 3, 2020) in the following amounts: Mr. Lehner, $506,250; Ms. Kannan, $56,323; Mr. Burbach, $144,960.13; Mr. Richardson, $144,960; and Mr. Silver, $101,277. See “Impact of COVID-19 on Compensation Matters” above on page 28. Long-Term Incentive Plan (“LTIP”) In March 2020, the Company granted equity awards to some of its employees, including its named executive officers. The Compensation Committee expects that the Company will grant equity awards to select employees on an annual basis under an LTIP, in order to serve several compensation objectives. First, the Compensation Committee believes that equity awards, in tandem with our executive stock ownership guidelines described below under “Executive Stock Ownership Guidelines,” on page 37, encourage ownership of our common stock by our executive officers, which aligns the interests of those officers with those of our stockholders. In addition, the vesting provisions applicable to the awards help retain executive officers and reward the achievement of long-term business objectives that benefit our stockholders. The Compensation Committee believes that performance metrics applicable to long-term incentive awards are particularly critical to encourage forward planning for our success. The Compensation Committee intends to continue to align the metrics for future long-term incentive compensation programs with the Company’s strategic goals as they evolve. The equity awards are issued under the Company’s Omnibus Incentive Plan, which was approved in its amended and restated form by our stockholders at the Company’s 2019 annual meeting (the “Amended and Restated Omnibus Plan”). The Amended and Restated Omnibus Plan permits the grant of various types of awards which allows the Compensation Committee to choose awards it believes will provide competitive long-term incentive compensation. The Compensation Committee expects to approve annually the design of the LTIP for the upcoming year and to make LTIP equity awards to named executive officers on an annual basis. Management, including the President & CEO, the CFO and the head of the Company’s human resources department, currently our Executive Vice President, General Counsel & Chief Human Resources Officer, discuss and determine the initial LTIP program elements for recommendation to the Compensation Committee. This includes the type of equity award to be granted as well as the aggregate size of the awards for all selected employees. After considering management’s recommendation and other factors, the Compensation Committee then determines the design of the LTIP for the upcoming year, as well as the types and sizes of awards to the named executive officers. In determining the type and aggregate size of all awards to be provided and the type and size of awards to the named executive officers, as well as the performance metrics that may apply, the Compensation Committee may consider factors including the strategic goals of the Company, trends in corporate governance, accounting impact, the Company’s aggregate budget for long-term incentive compensation, cash flow, the impact on the Company’s earnings per share and the number of shares of common stock that would be required to be allocated. The Compensation Committee may also consider some or all of the following: the officer’s original terms of hire, performance against annual performance goals, and considerations of fairness and comparability within the Company. The Compensation Committee also reviews and may adjust the target long-term incentive award at the time of promotions or other significant increases in executive responsibilities. 2020 LTIP – Type of Equity Granted and Performance Metrics Ryerson management presented Peer Group data and other general survey data from CAP regarding long-term incentive awards to the Compensation Committee. This data included information regarding award types, mix of awards and award vesting periods. After consideration of the information and management’s recommendations, in February 2020 the Board approved the 2020 LTIP and the named executive officers’ LTIP awards. Under the 2020 LTIP, our named executive officers received a combination of RSUs and PSUs. Each of our named executive officer’s 2020 LTIP award was allocated such that two-thirds of the total number of awards consisted of PSUs and one-third of the total number consisted of RSUs. More PSUs were granted than RSUs in order to place greater emphasis on successful financial performance. The RSUs and PSUs awarded under the 2020 LTIP were granted in March 2020. All of the RSU and PSU awards were subject to award agreements and the terms of the Amended and Restated Omnibus Plan.
Restricted Stock Units (“RSUs”) A restricted stock unit is a right to receive a share of Ryerson common stock (or cash based on the value of a share of stock) on a specified vesting date in the future. The RSUs will vest on each of the first three anniversaries of the RSU grant date, provided that the recipient remains employed by the Company through the applicable vesting date (unless otherwise determined by the Compensation Committee). RSUs granted to our named executive officers accrue dividend equivalents in the event the Company declares a cash dividend on its common stock, but the holders of the RSUs have no other rights as stockholders with respect to the RSUs (e.g., no voting rights). Holders of the RSUs may not sell, assign or otherwise transfer the RSUs, and any unvested RSUs
Performance Units (“PSUs”) A performance unit is a right to receive a share of Ryerson common stock (or cash based on the value of a share of stock) on a specified vesting date in the future, subject to the level of achievement of predetermined organizational performance goals over a specified period of time. The PSUs awarded under the 2020 LTIP will vest, if at all, on the later to occur of (x) the third anniversary of the PSU grant date, and (y) the date the Compensation Committee certifies the Company’s achievement of applicable performance objectives. Vesting of the PSUs is subject to the recipient remaining employed by the Company through the vesting date (unless otherwise determined by the Compensation Committee), and the portion of the PSUs that vest will depend on the level of the Company’s performance over the three-year period from 2020 through 2022 (the “PSU Performance Period”) against certain performance objectives. The actual number of shares of Ryerson common stock (or cash based on the value of such number of shares) received with respect to a PSU award might not equal the targeted number of shares, depending on the Company’s performance. The three-year performance period was chosen to emphasize the importance of achieving longer-term goals in creating value for stockholders, and to diminish the effect of short-term macroeconomic volatility on achievement of longer-term objectives of the 2020 LTIP. PSUs granted to our named executive officers under the 2020 LTIP do not provide the holder with any rights as stockholders with respect to the PSUs (e.g., no voting rights) and do not accrue any dividend equivalent rights. Holders of the PSUs may not sell, assign or otherwise transfer the PSUs, and any unvested PSUs are forfeited if the holder’s employment is terminated for any reason (unless otherwise determined by the Compensation Committee). PSU Performance Objectives Payment under the PSUs granted to our named executive officers under the For these purposes, “Cumulative Adjusted EBITDA” means the sum of Adjusted EBITDA and net last-in first-out inventory expense or income (as reported in the Company’s SEC filings for the applicable period) over the entire PSU Performance Period. In addition, for these purposes, “Cumulative Managerial Controllable Free Cash Flow” means the sum of Adjusted EBITDA, net last-in first-out inventory expense or income (as reported in the Company’s SEC filings for the applicable period), plus or minus changes in the Consolidated Statements of Cash Flows for inventory, accounts receivable, accounts payable, capital expenditures, and proceeds from asset sales, for the PSU Performance Period (as reported in the Company’s Forms 10-K) combined. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure is included in Appendix
Determining PSUs Earned and Award Range The actual number of PSUs granted to our named executive officers under the
The level of difficulty of attaining the Cumulative Adjusted EBITDA and Cumulative Managerial Controllable Free Cash Flow performance objectives is moderate, based on projected results over the performance period. When granted, the company expects that performance results will be in the range between threshold and target levels. Named Executive Officer In March
The Board approved Additional information regarding the
In connection with the Compensation Committee’s review of our executive officers’ compensation for 2020, in addition to awards granted during the Company’s regular grant cycle, the Compensation Committee recommended to the Board, and the Board approved, a special LTIP grant of performance-vesting stock options in March 2021 to the Company’s key employees, including each of its named executive officers, who received 7,500 such options, other than Mr. Lehner, who received 12,500 and Mr. Schnaufer (whose employment with the Company terminated effective January 3, 2020). The stock options will be eligible to vest over a period following the grant date, with 10%, 20%, 30% and 40% of the stock options eligible to vest on each of the first, second, third and fourth anniversaries of the date of grant, respectively, subject to the Company achieving a 45-day average share price during each vesting year equal to the target share price set for the applicable vesting period. Any options that do not vest on a specified vesting date will remain eligible to vest during the fifth year following the grant date, and in all events, subject to the option holder’s continued employment with the Company through the applicable vesting date. In addition to the performance vesting criteria, the Compensation Committee believes stock options provide an effective performance incentive because our executive officers derive value from their options only if our stock price increases (which benefits all stockholders) and they remain employed with us beyond the date that their options “vest” (that is, become exercisable). In addition, in February 2021, our Compensation Committee approved an increase to the base salary for Mr. Burbach in connection with his appointment as Chief Operating Officer by approximately 5% to $450,000, with his target annual bonus opportunity remaining at 75% of his base salary. The Compensation Committee recommended the stock option grants and approved the increase to Mr. Burbach’s base salary in order to better align our named executive officers’ target compensation with those holding similar positions within our Peer Group. Defined Contribution Plans Our tax-qualified employee savings and retirement plan (the “401(k) Plan”) covers certain full- and part-time non-union employees, including our named executive officers. Under the 401(k) Plan, employees may elect to reduce their current compensation up to the statutorily prescribed annual limits and have the amount of such reduction contributed to the 401(k) Plan. Our Board believes that the 401(k) Plan provides an important and highly valued means for employees to save for retirement.
We also maintain a nonqualified savings plan, which is an unfunded, nonqualified plan that allows a select group of management and highly compensated employees who make the maximum annual contributions allowed by applicable law to the 401(k) Plan to make additional deferrals in excess of the statutory limits. Under this plan, participants may contribute from 1% to 10% of their base salary. Just as we do for the 401(k) Plan, under this plan we match 100% of the first 4% of each participant’s contributed base salary contributed and 50% of the contributions from 4% to 6% of the participant’s contributed base salary. Our Board believes that our nonqualified savings plan provides an enhanced opportunity for our eligible employees, including our named executive officers, to plan for and meet their retirement savings needs. In Pension Plans We currently sponsor the Ryerson Pension Plan, a qualified defined benefit pension plan. Of our named executive officers, only Messrs. Burbach and Richardson were eligible to participate in the Ryerson Pension Plan. Mr. Burbach was eligible to participate in the Ryerson Pension Plan under the Ryerson Pension Plan Supplement for Former Participants in the Integris Metals, Inc. Pension Plan, which was frozen as of December 31, 2005, and Mr. Richardson was eligible to participate in the Ryerson Pension Plan under the Ryerson Pension Plan Supplement for Salaried Employees of Ryerson Inc. and Certain Subsidiaries, which was frozen as of December 31, 1997.
We also sponsor the Integris Metals, Inc. Excess Retirement Benefit Plan, a nonqualified supplemental pension plan, in which only Mr. Burbach Mr. Burbach’s combined frozen pension benefit from these pension plans is approximately $74,949 annually upon his retirement upon reaching retirement age under the plans, which is 62 years. Mr. Richardson’s Perquisites and Other Benefits All of our named executive officers were eligible for coverage under our health insurance programs, as well as group life insurance, short-term disability and long-term disability benefits, on the same terms as our other Our Compensation Committee believes that employment agreements with our named executive officers are valuable tools to both enhance our efforts to retain these executives and protect our competitive and confidential information. We are party to agreements with each of our named executive officers that govern their employment with the Company.
In accordance with the terms of Mr. Schnaufer’s employment agreement and in connection with the termination of his employment, he was eligible to receive severance benefits equal to (i) 12 months of base salary payment, (ii) a payment equal to the average of the AIP awards paid to him in the three years immediately preceding his termination date, and (iii) 12 months of medical and dental benefits continuation subsidized at the active employee rate. In addition, in recognition of his years of service with the Company, in January 2020, the Compensation Committee agreed to allow Mr. Schnaufer to retain his outstanding LTIP grants, with each of the RSU and PSU awards subject to his LTIP grants as of his last date of employment settling on such dates as such awards would have vested and settled had no termination of employment occurred, subject, with respect to any PSUs, the Company’s achievement of the applicable performance objectives. Compensation The Company’s management conducts a risk-assessment annually related to the Company’s compensation programs and presents to the Compensation Committee its assessment of the related risks. The Company’s assessment included a review and assessment of risks related to Company’s AIP and LTIP discussed in this proxy statement as well as sales incentive plans applicable to the Company’s sales employees. We have reviewed our compensation policies and practices and have determined that those policies and practices are not reasonably likely to have a material adverse effect on the Company. Tax Considerations and Deductibility of Compensation In general, Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) generally denies a publicly held corporation a deduction for federal income purposes for compensation in excess of $1 million per year paid to certain “covered employees.” The Compensation Committee may, from time to time, design programs that are intended to further our success, including by enabling us to continue to attract, retain, reward and motivate highly-qualified executives that may not be deductible as a result of the limitations on deductibility under Section 162(m) Executive Stock Ownership Guidelines
Executive officers have five years to achieve the above ownership requirements from the date the ownership guidelines were adopted. Newly hired and promoted executive officers will have five years from the date they are appointed to achieve their ownership requirements. Shares purchased by the executive officer and vested RSUs and PSUs are included in the calculation of stock ownership levels.
Prohibition on Speculative Stock Transactions The Company considers it improper and inappropriate for our officers and directors to engage in speculative transactions in Ryerson securities. Therefore, our insider trading policy prohibits such persons from engaging in short sales of our securities and certain other inherently speculative transactions in our securities. As set forth in the “Compensation Committee Report” above on page
The following table presents compensation information for Mr. Lehner, our President & CEO; For Fiscal Year Ended December 31,
(2) Represents a discretionary cash bonus awarded by the Compensation Committee to certain named executive officers.
Mr. Lehner. Ms. Kannan. $5,352 of matching contributions under our 401(k) Plan and $305 for life insurance premiums for coverage in excess of $50,000. Mr. Burbach. $9,084 of matching contributions under our 401(k) Plan, $2,623 for life insurance premiums for coverage in excess of $50,000 and $100 for an annual physical Mr. Richardson. $9,084 of matching contributions under our 401(k) Plan, $2,623 for life insurance premiums for coverage in excess of $50,000 and $50 for an annual physical. Mr. Silver. $7,932 of matching contributions under our 401(k) Plan, $1,206 for life insurance premiums for coverage in excess of $50,000 and $50 for an annual physical. Mr. Schnaufer.
For The median employee for
As of December 31, 2020, we had 3,878 employees globally. As noted above, in determining the employee population to be
For Fiscal Year Ended December 31,
Narrative Relating to Summary Compensation Table and Grants of Plan-Based Awards In
Mr. Lehner Mr. Lehner’s
In connection with the execution of Mr. Lehner’s Employment Agreement, Mr. Lehner and the Company also entered into a confidentiality, non-competition and non-solicitation agreement (“Non-Competition Agreement”) effective on the date of his appointment as our President & CEO. Its confidentiality provisions require Mr. Lehner to keep confidential and not disclose confidential information relating to the Company, its subsidiaries and affiliates, its customers and/or vendors and suppliers. Under the agreement’s non-competition and non-solicitation provisions, during Mr. Lehner’s employment and for a period of 18 months after the termination of his employment for any reason, Mr. Lehner may not (a) own, operate, manage, control, participate, consult with, advise or have any financial interest in any a person or entity engaged in the metal service center processing and/or distribution business, (b) engage in the start-up of a business in competition with the Company’s business, (c) call upon, solicit business from or sell any products sold or distributed by the Company to any customer or prospective customer of the Company with whom employees of the Company had contact during Mr. Lehner’s employment with the Company, (d) encourage any employees of the Company to seek or accept an employment or business relationship with a person or entity other than the Company, or in any way interfere with the relationship of the Company and any of its employees, or (e) encourage any supplier, distributor, franchisee, licensee or other business relation of the Company to cease or curtail doing business with the Company, or in any way interfere with the relationship between any such customer, supplier, distributor, franchisee, licensee or business relation and the Company. The Non-Competition Agreement also contains provisions regarding Mr. Lehner’s rights and payments owed to him upon his termination. In the event that Mr. Lehner’s employment is terminated by the Company without “cause” or by him for “good reason” (each as defined in the Non-Competition Agreement), he will, subject to his execution of a release in favor of the Company and certain other conditions, be entitled to an amount equal to eighteen months of his then current base salary and subsidized COBRA continuation of his medical and dental benefits coverage.
Messrs. We entered into employment agreements with Messrs. Each employment agreement provides that the Company and the officer may each terminate the agreement for any or no reason on 30 days’ prior notice. In the event that the officer’s employment is terminated by us without “cause” or by Each employment agreement contains confidentiality, non-compete and non-solicitation provisions. The confidentiality provisions require the officer to keep confidential and not disclose confidential information relating to the Company, its subsidiaries and affiliates, its customers and/or vendors and suppliers. Under the non-solicitation and non-competition
provisions, beginning on the date of the employment agreement and ending twelve months after
In Ms. Kannan and Mr. Silver In October 2008, we entered into an employment In January 2013, we entered into an employment agreement with Mr. Silver in connection with his initial employment as Vice President and Managing Counsel. The agreement has remained in effect since that time, although provisions regarding position title, and duties and compensation provisions such as annual base salary and other compensation items have been modified. The agreement provides that either Mr. Silver or the Company may terminate his employment at any time, with or without cause.
Outstanding Equity Awards at Fiscal Year-End
(1)Performance between the above referenced threshold and target levels will (1) be interpolated on a straight-line basis.
(2)None of the corresponding PSUs vest if performance for the applicable target is below threshold. On February 17, we determined that the 2018 PSUs would be deemed earned at 100%. For additional information on the adjustments applied in determining such payout, please see “Impact of COVID-19 on Compensation Matters” above.
(1)Performance between the above referenced threshold and target levels will (1) be interpolated on a straight-line basis. (2)None of the corresponding PSUs vest if performance for the applicable target is below threshold.
(1)Performance between the above referenced threshold and target levels will (1) be interpolated on a straight-line basis. (2)None of the corresponding PSUs vest if performance for the applicable target is below threshold.
The number of unearned PSUs is reported in the “Equity
2020 Option Exercises and Stock Vested The following table presents, for each of the named executive officers, the number of shares of our common stock acquired upon the exercise of any stock options and the vesting and settlement of RSUs during 2020 and the aggregate value realized upon the exercise of any stock options and the vesting and settlement of RSUs.
The following table reflects the pension benefits of Messrs. Burbach and Richardson.
Of our named executive officers, only Messrs. Burbach and Richardson were eligible to participate in the Ryerson Pension Plan and only Mr. Burbach was eligible to participate in the Integris Excess Benefit Retirement Plan, in each case, by virtue of their service with the Company prior to the applicable plan supplements being frozen. Our named executive officers no longer accrue any benefit under the plan. For additional information regarding their participation, see “Pension Plans,” above on page Mr. Burbach participates in the Ryerson Pension Plan under the Ryerson Pension Plan Supplement for Former Participants in the Integris Metals, Inc. Pension Plan, under which full pension benefits are payable to eligible employees who, as of the date of separation from employment, are at least age 62 with 10 years of vesting service. Reduced benefits are payable to eligible employees who, as of the date of separation from employment, are at least age 55 but less than age 62 with 10 years of vesting service. Accrued benefits are reduced by 7% for each year benefits commencement precedes age 62. Under this supplement, in general, benefits for eligible employees are based on two factors: (i) years of benefit service prior to the December 31, 2005 freeze date of this supplement, and (ii) the average annual earnings in the highest five consecutive paid calendar years during the ten-year period prior to December 31, 2005. Mr. Richardson participates in the Ryerson Pension Plan under the Ryerson Pension Plan Supplement for Salaried Employees of Ryerson Inc. and Certain Subsidiaries, under which pension benefits are payable to eligible employees who, as of the date of separation from employment, are (i) age 65 or older with at least 5 years of vesting service, (ii) age 55 or older with at least 10 years of vesting service, or (iii) any age with at least 30 years of vesting service. Benefits may be reduced depending on age and the type of benefit for which the participant qualifies when an individual retires and/or chooses to have benefit payments begin. Benefits are reduced under (ii) above if voluntary retirement commences prior to the employee reaching age 62 with at least 15 years of vesting service. Benefits are not reduced if the age and vesting service conditions under (i) or (iii) above are met. Under this supplement, in general, benefits for salaried employees are based on two factors: (i) years of benefit service prior to the December 31, 1997 freeze date of the pension benefit, and (ii) average monthly earnings, based on the highest consecutive 36 months of earnings during the participant’s last ten years of benefit service prior to the December 31, 1997 freeze date.
The Code imposes annual limits on contributions to and benefits payable from our qualified pension plan. Our nonqualified supplemental pension plans provide benefits to highly compensated employees (including our named executive officers) in excess of the limits imposed by the Code. Mr. Burbach is eligible for the Integris Excess Benefit Retirement Plan. Under this plan, payments are made on a monthly basis following retirement, along with the qualified plan monthly payments. The amount of benefit payable is an amount equal to the excess of the amount of pension plan benefit to which he would be entitled if such benefit were computed without giving any effect to the limitations imposed from time to time by Sections 401(a)(17) and 415 of the Code, less the amount of the qualified pension plan benefit to which he is entitled. Participants are fully vested in this supplemental plan after the earlier of attaining (i) age 65, or (ii) five years of vesting service, as defined in the qualified pension plan. If a participant’s termination occurs for reasons of cause, the participant’s or beneficiary’s supplemental benefit from this plan is permanently forfeited.
Nonqualified The following table reflects information regarding our named executive officers’ participation in our nonqualified savings plan. Nonqualified Deferred Compensation
The Code imposes annual limits on employee contributions to our 401(k) Plan. Our nonqualified savings plan is an unfunded, nonqualified plan that allows highly compensated employees who make the maximum annual 401(k) contributions to defer, on a pre-tax basis, amounts in excess of the limits applicable to deferrals under our 401(k) Plan. Participants may contribute up to a maximum of 10% of their base compensation to our nonqualified savings plan when eligible. Our nonqualified savings plan allows deferred amounts to be notionally invested in the Managed Income Portfolio Fund II (or any successor fund) that is available to the participants in our 401(k) Plan. Generally, each of our named executive officers is eligible for our nonqualified savings plan. Our named executive officers will be entitled to the vested balance of their respective accounts when they retire or otherwise terminate employment. Participants are generally permitted to choose whether the benefits paid following their retirement will be paid in a lump sum or installments, with all amounts to be paid by the end of the calendar year in which the employee reaches age 75. For participants terminating employment for reasons other than retirement, the account balance is payable in a lump sum by no later than 60 days after the 1-year anniversary of the termination of employment. None of our named executive officers made contributions to the nonqualified savings plan during
Potential Payments Upon Termination or Change in Control Each of our named executive officers has entered into employment agreements, the material terms of which have been summarized under “Narrative Relating to Summary Compensation Table and Grants of Plan-Based Awards,” above on page Since the Compensation Committee has discretion as to whether or not to accelerate the vesting of unvested equity awards granted under the Amended and Restated Omnibus Plan upon a change in control of the Company, the financial effect of such event has not been included in this table.
Directors and Executive Officers The
Ownership of More Than 5% of Ryerson Stock The table below describes each person or entity that we know (based on filings on Schedule 13G or 13D with the SEC) to be the beneficial owner of more than 5% of Ryerson common stock as of February 28,
According to the Schedule 13G/A, of these 21,037,500 shares, (i) RYPS had sole voting and dispositive power with respect to 21,037,500 shares, (ii) PECP had shared voting and dispositive power with respect to 3,022,756.57 shares, (iii) PECP-PF had shared voting and dispositive power with respect to 564,690.79 shares, (iv) PECP-A had shared voting and dispositive power with respect to 830,427.65 shares, (v) PECP II had shared voting and dispositive power with respect to 9,399,614.5 shares, (vi) PECP-PF II had shared voting and dispositive power with respect to 1,523,055.5 shares, (vii) PECP-A II had shared voting and dispositive power with respect to 1,489,455 shares, (viii) PRP had shared voting and dispositive power with respect to 4,207,500 shares, (ix) PEP had shared voting and dispositive power with respect to 4,417,875 shares, (x) PEIH had shared voting and dispositive power with respect to 4,417,875 shares, (xi) PEP II had shared voting and dispositive power with respect to 12,412,125 shares, (xii) PEIH II had shared voting and dispositive power with respect to 16,619,625 shares, (xiii) Platinum Equity had shared voting and dispositive power with respect to 21,037,500 shares, and (xiv) Tom Gores had shared voting and dispositive power with respect to 21,037,500 shares. According to a Form 4 filed by Tom Gores on August 15, 2014, an additional 50,000 shares not reflected in the above table are held by a trust for his benefit and such shares may be deemed to be beneficially owned by him.
Ryerson Holding Corporation and Platinum entered into an investor rights agreement (the “Investor Rights Agreement”) in connection with the IPO that provides for, among other things, demand, piggyback and Form S-3 registration rights and board nomination rights. The Investor Rights Agreement provides that Platinum may make written demands of us to require us to register the shares of our common stock owned by Platinum; provided, however that we will not be obligated to effect more than two such demand registrations. In addition, Platinum has piggyback registration rights entitling them to require us to register shares of our common stock owned by them in connection with any registration statements filed by us after the completion of the IPO, subject to certain exceptions. We have also agreed to use commercially reasonable efforts to qualify for registration on Form S-3 for secondary sales. After we have qualified for the use of Form S-3, Platinum will, subject to certain exceptions, have the right to request an unlimited number of registrations on Form S-3. We are not obligated to effect a registration unless certain pricing or timing conditions are first satisfied. On
The Investor Rights Agreement provides that we will indemnify Platinum against losses suffered by it in connection with any untrue or alleged untrue statement of a material fact contained in any prospectus, offering circular, or other document delivered or made available to investors (or in any related registration statement or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein not misleading, except insofar as the same may be caused by or contained in any information furnished in writing to us by Platinum for use therein. The Investor Rights Agreement provides that for so long as Platinum collectively beneficially owns at least (i) 30% of the voting power of the outstanding capital stock of the Company, Platinum will have the right to nominate for election to the Board no fewer than that number of directors that would constitute a majority of the number of directors if there were no vacancies on the Board, (ii) at least 15% but less than 30% of the voting power of the outstanding capital stock of the Company, Platinum will have the right to nominate two directors, and (iii) at least 5% but less than 15% of the voting power of the outstanding capital stock of the Company, Platinum will have the right to nominate one director. The agreement also provides that if the size of the Board is increased or decreased at any time, Platinum’s nomination rights will be proportionately increased or decreased, respectively, rounded up to the nearest whole number. The Investor Rights Agreement was negotiated among management and Platinum, and we believe the Investor Rights Agreement is on arm’s-length terms. Policies and Procedures Regarding Transactions with Related Persons Our Board has adopted a written policy regarding related person transactions that contains procedures for the review and approval/disapproval of such transactions. Related person transactions are transactions between the Company and/or its subsidiaries and affiliates on the one hand and “related persons” on the other hand. The policy provides that if advance approval of a transaction subject to the policy is not feasible or obtained, (a) if the transaction
A director who is a related person with respect to a transaction under review may not participate in any discussion or vote on the approval or ratification of the If a related party transaction will be ongoing, the Audit Committee or the Board may establish guidelines for the Company’s management to follow in its ongoing dealings with the related person.
Stockholder Proposals and Director Nominations for the Stockholders may present proposals for action at a future meeting or submit nominations for election of directors only if they comply with the requirements of the proxy rules established by the SEC and our amended and restated Bylaws, as applicable. Each proposal submitted must be a proper subject for stockholder action at the meeting. In order for a stockholder proposal or nomination for director to be considered for inclusion in our proxy statement and form of proxy relating to our annual meeting of stockholders to be held in
The chairperson of the meeting may disregard (i) any business not properly brought before the meeting according to our Bylaws and other applicable requirements, and (ii) any nomination not made in accordance with the above procedures. Stockholder Nominations for Directors If a stockholder wishes to suggest a director nominee for the Nominating and Corporate Governance Committee’s consideration, it may do so in writing by mailing the suggestion to Ryerson Holding Corporation, Attention: Secretary, 227 W. Monroe St., 27th Floor, Chicago, Illinois 60606. The Nominating and Corporate Governance Committee will consider director nominees suggested by stockholders for election at the annual stockholders meeting if our corporate secretary receives the suggestion not less than 90 days nor more than 120 days in advance of the anniversary of the prior year’s meeting. The suggestion must describe in detail the proposed director nominee’s qualifications and other relevant biographical information. It also must include:
The Nominating and Corporate Governance Committee may disregard any nomination not made in accordance with the above procedures. Ryerson’s Annual Report on Form 10-K We made our Annual Report on Form 10-K for the year ended December 31, We request that you promptly request a proxy card to sign, date, and return or provide voting instructions over the telephone or through the Internet so that your vote will be included at the meeting.
Appendix A Non-GAAP Financial Information for Compensation Discussion and Analysis The following table sets forth the reconciliation of Adjusted EBITDA and Managerial Controllable Free Cash Flow to the most comparable GAAP measures for the year ended December 31, Reconciliation of Net income to Adjusted EBITDA, excluding LIFO and Managerial Controllable Free Cash Flow, non-GAAP measures
ation 227 w. Monroe st., 27th floor Chicago, il 60606 investor address line 1 investor address line 2 investor address line 3 investor address line 4 investor address line 5 john sample 1234 anywhere street any city, on a1a 1a1 1of 2 1 1 vote by internet-www.proxyvote.com use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 Central Time on April 23, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our Company in mailing proxy materials, you can consent to receiving all future notices, proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 Central Time on April 23, 2019. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.the company name inc. – common the company name inc. – class a the company name inc. – class b the company name inc. – class c the company name inc. – class d the company name inc. – class d the company name inc. – class e the company name inc. – class f the company name inc. – 401k CONTROL # 0000000000000000 SHARES 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 page 1 of 2 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. The Board of Directors recommends you vote FOR the following: For Withhold For All All All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 1. Election of Directors Nominees 01 Stephen P. Larson 02 Philip E. Norment The Board of Directors recommends you vote FOR proposals 2. and 3. 2. Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2019. 3. Approval of the Amended and Restated 2014 Omnibus Incentive Plan. NOTE: Such other business as may properly come before the Annual Meeting For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date JOB # Signature (Joint Owners) Date SHARES CUSIP # SEQUENCE # 0000400432_1 R1.0.1.18 02 0000000000
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, 10K Wrap are available at www.proxyvote.com RYERSON HOLDING CORPORATION Annual Meeting of Stockholders April 24, 2019 2:00 PM Central Time This proxy is solicited by the Board of Directors. The stockholder(s) hereby appoint(s) Mark S. Silver and Camilla R. Merrick, or either of them, as proxies, each with the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of RYERSON HOLDING CORPORATION that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 2:00 p.m., Central Daylight Time on April 24, 2019, at 2:00 p.m. Central Time, JW Marriott Houston Downtown, 806 Main Street, Houston, Texas 77002, and at any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. 0000400432 2 R1.0.1.18 Continued and to be signed on reverse side
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