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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 | |
Columbus McKinnon Corporation
(Name of Registrant as specified in its charter)
Payment of filing fee (check the appropriate box):
| ☒ | No fee required. | |||
| ☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. | |||
| (1) | Title of each class of securities to which transaction applies:
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| (2) | Aggregate number of securities to which transaction applies:
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| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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| (4) | Proposed maximum aggregate value of transaction:
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| (5) | Total fee paid:
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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. | |||
| (1) | Amount previously paid:
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| (2) | Form, Schedule or Registration Statement No.:
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| (3) | Filing Party:
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| (4) | Date Filed:
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June 10, 2020
It is a pleasure to invite you to the 2020 Columbus McKinnon Corporation annual meeting of stockholders. The meeting will be held at 10:00 a.m., Chicago time, on Monday, July 20, 2020 at the Four Seasons Hotel Chicago, 120 East Delaware Place, Chicago, Illinois. The attached Notice of Annual Meeting of Stockholders and Proxy Statement discuss the items scheduled for a vote by stockholders at the meeting.
The Securities and Exchange Commission rules allow companies to furnish proxy materials to their stockholders over the Internet. As a result, most of our stockholders will receive in the mail a notice regarding availability of the proxy materials for the Annual Meeting on the Internet instead of paper copies of those materials. The notice contains instructions on how to access the proxy materials over the Internet and instructions on how stockholders can receive paper copies of the proxy materials, including a proxy or voting instruction form. This process expedites stockholders’ receipt of proxy materials and lowers the cost of our annual meeting.
The Board of Directors has fixed the close of business on June 1, 2020, as the record date for the determination of shareholders entitled to receive notice of and to vote at the Annual Meeting.
It is important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend, please sign, date and return the enclosed proxy card in the enclosed postage-paid envelope or vote by telephone or using the internet as instructed on the enclosed proxy card. If you attend the Annual Meeting, you may vote your shares in person if you wish.
Please vote your shares as soon as possible. This is your annual meeting, and your participation is important.
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David J. Wilson President & Chief Executive Officer |
Alan S. Korman Vice President, General Counsel & CHRO | |
Columbus McKinnon Corporation • 205 CrossPoint Parkway • Buffalo, New York 14068
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NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS
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When:
Monday, July 20, 2020 at 10:00 a.m., Chicago Time |
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Where:
Four Seasons Hotel Chicago, 120 East Delaware Place, Chicago, Illinois | |||
Items of Business:
| 1. | To elect nine Directors to hold office until the 2021 Annual Meeting and until their successors have been elected and qualified; |
| 2. | To ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending March 31, 2021; |
| 3. | To conduct a shareholder advisory vote on the compensation of our named executive officers; and |
| 4. | To take action upon and transact such other business as may be properly brought before the meeting or any adjournment or adjournments thereof. |
Who Can Vote?
Only stockholders of record at the close of business on June 1, 2020 will be entitled to vote at the annual meeting.
Virtual Meeting
Please note that, as part of our concern regarding the health and safety of our shareholders, directors, officers, employees, meeting attendees and the public in light of the current coronavirus (COVID-19) outbreak, we may elect to change the annual meeting location and hold a “virtual” meeting instead of a physical meeting. If we make such a change, we will provide you reasonable advance notice via a press release and SEC filing, as well as a posting on our Investor Relations website.
Important notice regarding the availability of proxy materials for the Annual Meeting of Shareholders. The Company’s Proxy Statement and Annual Report to shareholders for the fiscal year ended March 31, 2020 are available at http://www.columbusmckinnon.com/investors/proxy.
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Summary of Proxy Statement
This summary highlights selected information in this Proxy Statement and does not contain all of the information that you should consider in deciding how to vote. Please read the complete proxy statement carefully before voting.
Annual Meeting Information
| Time and Date | Location | Record Date | ||
| 10:00 a.m., Chicago time, on Monday, July 20, 2020 |
Four Seasons Hotel Chicago 120 East Delaware Place Chicago, Illinois 60611 |
June 1, 2020 |
This Proxy Statement and the accompanying form of proxy are being furnished in connection with the solicitation by the Board of Directors of Columbus McKinnon Corporation, a New York corporation (“our Company”, “we” or “us”), of proxies to be voted at the Annual Meeting of Shareholders (the “Annual Meeting”). At the close of business on June 1, 2020, we had 23,823,516 outstanding shares of our common stock, $.01 par value per share, the holders of which are entitled to one vote per share on each matter properly brought before the Annual Meeting.
The shares represented by all valid proxies in the enclosed form will be voted if received in time for the Annual Meeting in accordance with the specifications, if any, made on the proxy card. If no specification is made, the proxies will be voted (i) FOR the nominees for Director named in this Proxy Statement, (ii) FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year ending March 31, 2021, and (iii) FOR the advisory approval of the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the compensation tables and the related disclosure as contained elsewhere in this Proxy Statement.
In order for business to be conducted, a quorum must be present at the Annual Meeting. A quorum is a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting. Abstentions, broker non-votes and withheld votes will be counted in determining the existence of a quorum at the Annual Meeting. Votes may be cast FOR, AGAINST (withhold) or ABSTAIN on the approval of these proposals. Abstentions and broker non-votes are not counted in the number of votes cast and will have no effect on the results of the vote. Proxy cards that are executed and returned without any designated voting direction will be voted in the manner stated on the proxy card.
Brokers may not vote your shares on any matter in the absence of specific voting instructions from you. Please contact your broker directly if you have questions about how to provide such instructions. The execution of a proxy will not affect a shareholder’s right to attend the Annual Meeting and to vote in person. A shareholder who executes a proxy may revoke it at any time before it is exercised by giving written notice to the Secretary, by appearing at the Annual Meeting and so stating, or by submitting another duly executed proxy bearing a later date.
2020 PROXY STATEMENT |
1 |
Table of Contents
SUMMARY OF PROXY STATEMENT
Our Mission
We provide expert, professional-grade solutions and products, building the trust of customers by solving their high-value problems.
Our Vision
To become the leading industrial technology company in safe and productive motion control.
Our Values
We are raising expectations by Living Our Values through our daily behaviors.
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Connect safety to everything we do. Take personal responsibility. Care for our people. Build products that everyone can trust. | |
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Be easy to do business with. Focus on the customer. Listen. Simplify. | |
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Deliver on your commitments. Aim for greatness. Do your best. Hold yourself accountable. | |
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Think differently. Be proactive with new ideas. Ask questions. Be part of the solution. | |
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Win as a team. Work together. Respect each other. Celebrate success. | |
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Act with integrity. Do the right thing. Extend trust. Appreciate differences. |
| 2 | 2020 PROXY STATEMENT
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SUMMARY OF PROXY STATEMENT
Blueprint for Growth Strategy
Pivot from late stage cyclical industrial to growth oriented industrial technology
E-PASTM: Earnings Power Acceleration System
Our Business Operating System
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2020 PROXY STATEMENT |
3 |
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SUMMARY OF PROXY STATEMENT
Fiscal Year 2020 Business Highlights
| * | Adjusted Operating Income and Adjusted EBITDA are Non-GAAP measures the Company believes are useful in understanding its performance. Please see the Reconciliation of GAAP to Non-GAAP performance measures in the following page. |
| 4 | 2020 PROXY STATEMENT
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SUMMARY OF PROXY STATEMENT
Adjusted Income from Operations Reconciliation
| Year Ended March 31, | ||||||||||||||||
| ($ in thousands) |
2017 | 2018 | 2019 | 2020 | ||||||||||||
| Income from Operations |
$ | 23,725 | $ | 68,331 | $ | 69,442 | $ | 89,824 | ||||||||
| Add back (deduct): |
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| Business realignment costs and factory closures |
— | — | 3,379 | 7,540 | ||||||||||||
| Insurance recovery legal costs and insurance settlement |
1,359 | 586 | 1,282 | 203 | ||||||||||||
| Net (gain) loss on sales of businesses |
— | — | 25,672 | 176 | ||||||||||||
| Acquisition deal, integration, and severance costs |
8,815 | 8,763 | — | — | ||||||||||||
| Debt repricing fees |
— | 619 | — | — | ||||||||||||
| Magnetek litigation |
— | 400 | — | — | ||||||||||||
| Acquisition inventory step-up expense |
8,852 | — | — | — | ||||||||||||
| CEO retirement pay and search costs |
3,085 | — | — | — | ||||||||||||
| Impairment of intangible asset |
1,125 | — | — | — | ||||||||||||
| Canadian pension lump sum settlements |
247 | — | — | — | ||||||||||||
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| Non-GAAP adjusted income from operations |
$ | 47,208 | $ | 78,699 | $ | 99,775 | $ | 97,743 | ||||||||
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| Sales |
637,123 | 839,419 | 876,282 | 809,162 | ||||||||||||
| Adjusted operating margin |
7.4 | % | 9.4 | % | 11.4 | % | 12.1 | % | ||||||||
Adjusted EBITDA Reconciliation
| Year Ended March 31, | ||||||||||||||||
| ($ in thousands) |
2017 | 2018 | 2019 | 2020 | ||||||||||||
| Net Income |
$ | 8,984 | $ | 22,065 | $ | 42,577 | $ | 59,672 | ||||||||
| Add back (deduct): |
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| Income tax expense |
4,043 | 27,620 | 10,321 | 17,484 | ||||||||||||
| Interest and debt expense |
10,966 | 19,733 | 17,144 | 14,234 | ||||||||||||
| Cost of debt refinancing |
1,303 | — | — | — | ||||||||||||
| Investment (income) loss |
(462 | ) | (157 | ) | (727 | ) | (891 | ) | ||||||||
| Foreign currency exchange (gain) loss |
1,232 | 1,539 | 843 | (1,514 | ) | |||||||||||
| Other (income) expense, net |
(2,341 | ) | (2,469 | ) | (716 | ) | 839 | |||||||||
| Depreciation and amortization expense |
25,162 | 36,136 | 32,675 | 29,126 | ||||||||||||
| Business realignment costs and factory closures |
— | — | 3,379 | 7,540 | ||||||||||||
| Net (gain) loss on sales of businesses |
— | — | 25,672 | 176 | ||||||||||||
| Insurance recovery legal costs and insurance settlement |
1,359 | 586 | 1,282 | 203 | ||||||||||||
| Acquisition deal, integration, and severance costs |
8,815 | 8,763 | — | — | ||||||||||||
| Debt repricing fees |
— | 619 | — | — | ||||||||||||
| Magnetek litigation |
— | 400 | — | — | ||||||||||||
| Acquisition inventory step-up expense |
8,852 | — | — | — | ||||||||||||
| CEO retirement pay and search costs |
3,085 | — | — | — | ||||||||||||
| Impairment of intangible asset |
1,125 | — | — | — | ||||||||||||
| Canadian pension lump sum settlements |
247 | — | — | — | ||||||||||||
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| Non-GAAP adjusted EBITDA |
$ | 72,370 | $ | 114,835 | $ | 132,450 | $ | 126,869 | ||||||||
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| Sales |
637,123 | 839,419 | 876,282 | 809,162 | ||||||||||||
| Adjusted EBITDA margin |
11.4 | % | 13.7 | % | 15.1 | % | 15.7 | % | ||||||||
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2020 PROXY STATEMENT |
5 |
Table of Contents
PROPOSAL 1: ELECTION OF DIRECTORS
NEW BOARD DEVELOPMENTS
ELECTION OF DIRECTORS
The following information is provided concerning the nominees for Director:
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Name |
Age | Position | |||||
| Richard H. Fleming |
72 | Chairman of the Board | |||||
| David J. Wilson |
51 | Director | |||||
| Nicholas T. Pinchuk |
73 | Director | |||||
| Liam G. McCarthy |
64 | Director | |||||
| R. Scott Trumbull |
71 | Director | |||||
| Heath A. Mitts |
49 | Director | |||||
| Kathryn V. Roedel |
59 | Director | |||||
| Aziz S. Aghili |
61 | Director | |||||
| Jeanne Beliveau-Dunn |
60 | Director | |||||
| 6 | 2020 PROXY STATEMENT
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PROPOSAL 1: ELECTION OF DIRECTORS
| Richard H. Fleming
Director since 1999, Chairman of the Board July 2018, Interim President and CEO January 10, 2020 – June 1, 2020
Age: 72
Principal Occupation: • Retired from USG Corporation
Board Committees: • Chairman of the Board
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In February 1999, Mr. Fleming was appointed Executive Vice President and Chief Financial Officer of USG Corp. (NYSE:USG). Effective May 1, 2012 Mr. Fleming retired from the position of Chief Financial Officer at USG. Prior thereto, Mr. Fleming served USG Corp. in various executive financial capacities, including Senior Vice President and Chief Financial Officer from January 1995 to February 1999 and Vice President and Chief Financial Officer from January 1994 to January 1995. Mr. Fleming serves as a member of the Board of Directors of Boise Cascade Company (NYSE:BCC) and OE Holdings, LLC, a private company. He is also a director for several not-for-profit entities including UCAN and the University of the Pacific.
Qualifications
Mr. Fleming’s qualifications to serve on the Board include his senior leadership and public company board and governance experience in global manufacturing companies and his high level of expertise and background in finance and accounting matters and strategic planning. | |||
| David J. Wilson
Director since June 2020
Age: 51
Principal Occupation: • As of June 1, 2020 – Chief Executive Officer and President |
David Wilson joined Columbus McKinnon Corporation on June 1, 2020 as President and Chief Executive Officer. Prior to joining Columbus McKinnon, Mr. Wilson served as President of Flowserve Corporation’s Pumps Division from 2018 to 2020. Previous to Flowserve, Mr. Wilson was the President of the Industrial segment of SPX FLOW, Inc. He was with SPX Corporation, and subsequently SPX FLOW, between 1998 and 2017 and held senior leadership positions in each of the company’s operating segments, including six years in Asia while serving as the President of Asia Pacific. Prior to joining SPX, Mr. Wilson held operating and engineering leadership positions at Polaroid Corporation. He currently serves on the Board of Directors of the Hydraulic Institute and was previously a member of the Board of Trustees of the Maine College of Art (MECA).
Qualifications
Mr. Wilson’s qualifications to serve on the Board include his senior leadership, operational excellence and customer-centric commercial experience, international and business development skills and demonstrated track record for delivering results. | |||
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2020 PROXY STATEMENT |
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PROPOSAL 1: ELECTION OF DIRECTORS
| Nicholas T. Pinchuk
Director since January 2007
Age: 73
Principal Occupation: • Chairman, President and CEO of Snap-on Incorporated
Board Committees: • Audit; Compensation and Succession
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Mr. Pinchuk is the Chairman and President and CEO of Snap-on Incorporated (NYSE:SNA), an S&P 500 company. Prior to that, Mr. Pinchuk served as Senior Vice President and President of Snap-on’s Worldwide Commercial and Industrial Group since June 2002. Prior to joining Snap-on, Mr. Pinchuk served in several executive operational and financial management positions at United Technologies Corporation, including President, Global Refrigeration Operations of its Carrier Corporation unit and President of Carrier’s Asia-Pacific Operations. He also served in financial and engineering managerial staff positions at the Ford Motor Company from 1972 to 1983. Mr. Pinchuk served as an officer in the United States Army in Vietnam.
Qualifications
Mr. Pinchuk’s qualifications to serve on the Board include his senior leadership and public company board and governance experience and his manufacturing and international operations expertise, especially in Asia-Pacific. | |||
| Liam G. McCarthy
Director since November 2008
Age: 64
Principal Occupation: • Retired from Molex Incorporated
Board Committees: • Chair Governance and Nomination; Audit, Compensation and Succession
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Mr. McCarthy retired in June 2017 from Molex LLC (previously NASDAQ:MOLX, acquired 2013 by Koch Industries, Inc.). Mr. McCarthy served Molex in various executive and management capacities, including President and Chief Supply Chain Officer through June 2017; President and Chief Operating Officer through December, 2015; Vice President, Operations, Europe from 2001 to 2005; President, Data Communications Division, Americas Region from 1998 to 2001; General Manager, Singapore from 1993 to 1998; Regional Marketing Manager, Far East South Region from 1991 to 1993; and Materials Director, Singapore from 1989 to 1991.
Qualifications
Mr. McCarthy’s qualifications to serve on the Board include his extensive global leadership experience, having held significant executive roles in Operations and Business development while living in Asia, Americas and Europe. He has served on several boards including the Molex board of Koch Industries, the Chicago Council on Global Affairs, the Singapore National Science and Technology Council and on Singapore’s Economic Development Board. | |||
| 8 | 2020 PROXY STATEMENT
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PROPOSAL 1: ELECTION OF DIRECTORS
| R. Scott Trumbull
Director since January 2014
Age: 71
Principal Occupation: • Retired from Franklin Electric Company, Inc.
Board Committees: • Chair Compensation and Succession; Audit
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Mr. Trumbull retired as Non-Executive Chairman of the Board of Franklin Electric Company, Inc. (NASDAQ:FELE) in May 2015. He joined the Board of Franklin Electric in 1998 and was elected Chief Executive Officer of the company in December 2002 until retiring in May, 2014. Prior to joining Franklin Electric, Mr. Trumbull began his career at Owens-Illinois in 1972, progressively advancing through various operational and leadership positions to the role of Executive Vice President and Chief Financial Officer. Mr. Trumbull serves on the Board of Directors of Welltower, Inc. (NYSE:HCN).
Qualifications
Mr. Trumbull’s qualifications to serve on the Board include his senior leadership and public company board and governance experience, his high level of finance and accounting background and extensive manufacturing and operations expertise. | |||
| Heath A. Mitts
Director since May 2015
Age: 49
Principal Occupation: • EVP and CFO at TE Connectivity
Board Committees: • Chair Audit; Governance and Nomination
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Mr. Mitts is Executive Vice President and CFO at TE Connectivity Ltd. (NYSE:TEL). Prior thereto, Mr. Mitts was Senior Vice President and Chief Financial Officer of IDEX Corporation (NYSE:IEX). Prior to joining IDEX Corporation, Mr. Mitts was at PerkinElmer, Inc. in various senior financial management roles in both North America and in Singapore. He went to PerkinElmer after five years at Honeywell where he gained world-class training in financial planning and analysis, progressing through various managerial roles including Director of Finance.
Qualifications
Mr. Mitt’s qualifications to serve on the Board include his senior leadership and governance experience, his high level of finance and accounting background and his international industrial experience. | |||
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2020 PROXY STATEMENT |
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PROPOSAL 1: ELECTION OF DIRECTORS
| Kathryn V. Roedel
Director since October 2017
Age: 59
Principal Occupation: • Retired from Sleep Number Corporation
Board Committees: • Audit; Compensation and Succession; Governance and Nomination
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Ms. Roedel retired in 2016 from her position of EVP, Chief Services and Fulfillment Officer at Sleep Number Corporation (NASDAQ:SCSS), a direct to consumer, vertically integrated mattress retailer and manufacturer. Prior to joining Sleep Number in 2005, Ms. Roedel held VP and General Management positions in operations, supply chain, services and continuous improvement, spanning 22 years with General Electric’s Healthcare and Information Services businesses. Ms. Roedel also serves on the Board of Directors of Generac Holdings, Inc. (NYSE:GNRC) and The Jones Family of Companies, a private company.
Qualifications
Ms. Roedel’s qualifications to serve on the Board include her senior leadership, public company board and governance experience and her international supply chain experience. | |||
| Aziz S. Aghili
Director since May 2018
Age: 61
Principal Occupation: • EVP, President, Off-
Board Committees: • Compensation and Succession; Governance and Nomination
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Mr. Aghili is Executive Vice President Dana, President Off-Highway Drive and Motion Technologies for Dana Incorporated and resides in Europe. Mr. Aghili joined Dana in 2009 as President of Dana Europe, before being named President of Dana Asia-Pacific in 2010. Prior thereto, he spent more than 20 years at ArvinMeritor, where he most recently served as Vice President and General Manager of Body Systems. Additionally, he held strategic leadership positions around the world, including Vice President and General Manager of Asia Pacific and Vice President of Global Procurement, Commercial Marketing, and Business Development Asia Pacific. Before joining ArvinMeritor, he worked for Nissan Motor Company and General Electric Plastics.
Qualifications
Mr. Aghili’s qualifications to serve on the Board include his senior leadership and governance experience and his global manufacturing and operations experience. | |||
| 10 | 2020 PROXY STATEMENT
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Table of Contents
PROPOSAL 1: ELECTION OF DIRECTORS
| Jeanne Beliveau-Dunn
Director since March 2020
Age: 60
Principal Occupation: • Chief Executive Officer and President of Claridad, LLC
Board Committees: • Compensation and Succession; Governance and Nomination
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Ms. Beliveau-Dunn, is the Chief Executive Officer and President of Claridad LLC. Prior to her tenure at Claridad, Ms. Beliveau-Dunn worked for twenty-two years in a variety of management positions at Cisco Systems Inc., which included eleven years as Vice President and General Manager of Services. Prior thereto, she ran business operations at Micronics Computers and the secure systems product lines for Wang Laboratories. Ms. Beliveau-Dunn served as President of the Board of the IoT Talent Consortium, a membership-driven non-profit organization from 2016 through March 2018, and serves on the Boards of Directors of Xylem Inc. (NYSE: XYL) and Edison International Inc. (NYSE: EIX) and its subsidiary Southern California Edison (SCE).
Qualifications
Ms. Beliveau-Dunn’s qualifications to serve on the Board include her senior leadership, public company board and governance experience. | |||
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THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES
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2020 PROXY STATEMENT |
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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING MARCH 31, 2021
General
Principal Accountant Fees and Services
The aggregate fees billed to us by Ernst & Young LLP for fiscal years 2020 and 2019 are as follows:
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Fiscal Year 2020 ($ in thousands) |
Fiscal Year 2019 ($ in thousands) | ||||||||
| Audit Fees(1) |
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2,054 |
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2,079 |
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| Audit Related Fees(2) |
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3 |
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4 |
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| Tax Fees(3) |
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467 |
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403 |
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| All Other Fees(4) |
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3 |
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3 |
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| Total |
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2,527 |
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2,489 |
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| (1) | Consists of fees billed for the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the auditors in connection with statutory and regulatory filings or engagements. |
| (2) | Consists of certain agreed upon procedures. |
| (3) | Consists of all tax related services. |
| (4) | Consists of all other products and services provided other than the services reported under audit fees and tax fees. |
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THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP TO SERVE AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING MARCH 31, 2021.
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| 12 | 2020 PROXY STATEMENT
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PROPOSAL 3: ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
| Proposal No. 1 Election of Directors |
If you do not provide voting instructions, your broker may not vote on this matter.
Each director nominee receiving the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote in the election of directors will be elected as a director. Abstentions and broker non-votes will have no effect on the results of this vote. A majority of votes cast means the number of votes cast “For” exceeds the number of votes cast “Withhold.”
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| Proposal No. 2 Ratification of Independent Registered Public Accounting Firm | If you do not provide voting instructions, your broker may not vote on this matter.
The proposal to appoint Ernst & Young LLP as our independent registered public accounting firm for the year ending March 31, 2021 will be ratified by the affirmative vote of a majority of shares present or represented by proxy and entitled to vote at the Annual Meeting. Abstentions and broker non-votes will have no effect on the results of this vote.
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| Proposal No. 3 Advisory Approval of Our Executive Compensation | If you do not provide voting instructions, your broker may not vote on this matter.
The advisory vote approving executive compensation will be determined by the affirmative vote of a majority of shares present or represented by proxy and entitled to vote at the Annual Meeting. Abstentions and broker non-votes will have no effect on the results of this vote.
Although this advisory vote is non-binding, the compensation committee and our board of directors will review the results of the vote. The compensation committee will consider our shareholders’ preferences and take them into account in making future determinations concerning the compensation of our executives.
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| 14 | 2020 PROXY STATEMENT
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Table of Contents
Our Company is committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability and helps build public trust.
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Independence |
• Eight of our nine directors are independent • Our Chairman is an independent director • Our CEO is the only management director • All of our Board committees are comprised of only independent directors and have the ability to hire third-party advisors | |
| Executive Sessions |
• The independent directors regularly meet in executive sessions • The Non-Executive Chairman presides at executive sessions of the independent directors | |
| Board Oversight of |
• Our Audit Committee annually reviews our guidelines and policies that govern the process by which we assess and manage our exposure to risk • Our Compensation and Succession Committee reviews the annual compensation risk assessment and retains an independent compensation consultant • We have recoupment or clawback provisions to recover certain executive pay | |
| Stock Ownership |
• Our Directors and Executives are subject to minimum stock ownership requirements designed to align their interests with those of stockholders | |
| Board Diversity |
• Our current Board has a rich mixture of educational, professional, experiential, age, gender and global diversity and maintain rigorous director qualification standards | |
| Vote Standard |
• Voluntarily adopted majority voting in uncontested election; plurality voting in contested election |
Environmental, Social and Governance Priorities
In fiscal year 2020, the Company continued its efforts to increase transparency and make meaningful progress with respect to our Environmental, Social and Governance (“ESG”) priorities. We believe that sound corporate citizenship is essential to our success. We are committed to operating with integrity, contributing to the local communities surrounding our offices and facilities, promoting diversity and inclusion, developing our employees, and focusing on being thoughtful environmental stewards. Our Board provides oversight of management’s efforts around these ESG topics and is committed to supporting the Company’s efforts to operate as a sound corporate citizen. We have also created and filled the position of Director of Corporate Social Responsibility to develop an integrated ESG strategy and help prioritize and drive material initiatives in this space. We believe that an integrated approach to business strategy, corporate governance and corporate citizenship creates long-term value.
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2020 PROXY STATEMENT |
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Table of Contents
CORPORATE GOVERNANCE POLICY
Environmental, Social and Governance Platform and Components
| ENVIRONMENTAL | ||||||||||||||
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Energy & Climate Change |
Resource Management |
Environmental Policies & Reporting | ||||||||||||
| Carbon/GHG Emissions | Energy | Materials Sourcing |
Waste Management | Water Management | Environmental Policy | Environmental Remediation/HAZMAT | Sustainability Report | |||||||
| SOCIAL | ||||||||||
| Employees |
Community | |||||||||
| Health & Safety |
Diversity & Inclusion |
Talent Management |
Employee Engagement |
Product Safety Our Products |
Community Outreach & Involvement | |||||
| GOVERNANCE | ||||||||||||||||
|
Policy & Ethics |
Risk Management | Corporate Governance & Reporting | ||||||||||||||
| Code of Conduct/ Business Ethics |
Supplier COC | Human Rights | Cybersecurity/ Data Privacy |
Enterprise Risk Management |
Shareholder Rights |
Majority Access | Policies: Clawback Policy Overboarding Policy |
Board Independence & Board Diversity | ||||||||
Environmental, Social and Governance Structure
| 16 | 2020 PROXY STATEMENT
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| Putting People First |
• Employee development and training opportunities
• Partnering with Cornell University for Leadership Training
• Implemented “Inspired to Lead” strategic plan
• Creation of a strong corporate culture that promotes the highest standards of ethics and compliance for our business, including a Code of Conduct and Global Legal Compliance and Business Ethics Manual translated in 13 languages, each of which set forth principles to guide employee, officer and director conduct
• Equal employment opportunity hiring practices and polices
• Anti-harassment policy that prohibits sexual harassment in any form, details how to report and respond to harassment issues, and strictly prohibits retaliation against any employee for reporting harassment
• Whistleblower hotline providing for confidential reporting
• Market competitive compensation and benefits packages
• Policies in place prohibiting use of child labor
• Tuition reimbursement plan
• Plant wide appreciation meals
• Discretionary bonus plans
|
|||
| Shareholder Engagement |
• Utilizing consultants for best practices on ESG, Compensation and Investor-Relations
• Investor road shows and conferences
|
|||
| Cultivating Strong Communities
|
• Corporate commitment to the local communities where our facilities are located, including supporting various non-profits, charities and other community programs
• Employee commitment to the local communities where we are located, including civic engagement, fundraising, board participation and volunteerism.
• The Company and its employees have donated in excess of $400,000 and volunteered hundreds of hours to the following programs:
– Western New York: Children’s Hospital, Children’s Explore & More Museum, United Way, Big Brother Big Sisters, Ronald McDonald House, Paws in the Park, Beds for Buffalo, Child & Family Services, Ride for Roswell Cancer Institute
– Damascus, VA: Blood Bank, Local Schools, Shriners Circus, Rescue Mission
– Lexington, TN: CASA, Relay for Life, Schools, Food Bank, Homeless Shelter, United Way
– Charlotte, NC: Thompson Children’s Home, Second Harvest, Toys for Tots
– Salem/Lisbon, OH: Community Pantry, American Cancer Society, Salvation Army
– Milwaukie, WI: STEM Forward, Feeding America, Schools, Angel Tree, Red Nose Day
– Mexico: Local Schools Help & Safety Community Service, Brigades de Amistad
– Chester, United Kingdom: Lighthouse Club, Prostate Cancer, Circus Starr, Help for Heroes
– Wuppertal, Kissing, Kunzelsau, Germany: Innovations Region, Supporting Education, Local Fire Company Accident Prevention Fund, Youth Carnival Parade, Church Charity Events, Kindernothilfe, Red Cross
|
|||
|
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| Environmental Stewardship
|
• The corporate policy of the Company is to conduct its business in a manner that protects the environment and, in addition, in a manner that complies with all applicable environmental laws, legislation, regulations, and ordinances that apply to facilities owned or leased by the Company around the world:
– The Company’s Manager of Environmental Systems provides assistance to the facility EHS managers with the implementation of the Company’s Global Environmental Policy, as well as:
• Development and implementation of procedures to audit Company facilities for compliance with environmental laws;
• Inspection and monitoring of waste haulers and disposal facilities used or to be used by the Company;
• Identification and categorization of waste streams generated at the Company’s owned facilities; and
• Development and implementation of approaches for pollution prevention, source control and waste minimization.
• Tracking of emissions and energy to develop baselines for target setting and measuring progress
• Evaluation of current practices and policies against SASB standards
• Promotion of environmental awareness training and education via toolbox meetings
• Evaluating our materials for conflict minerals and holding our suppliers to the highest ethical and quality standards
• Environmental, Health and Safety (“EHS”) Managers located at our manufacturing facilities
• Commitment to minimizing adverse impacts to the environment, including ongoing program to convert our factory lighting to LED energy efficient lighting
• Continuous improvement and housekeeping initiatives leading to waste reduction and energy efficiency
|
|||
| Employee Diversity
|
• Commitment to fostering and promoting an inclusive and diverse work environment
• Prioritizing diversity in new hires for top graded management positions
• Diversity associates on succession plans for key leadership
• Formal process for presenting diverse candidate slate when hiring for management positions
|
|||
| Health & Safety
|
• Safety has always been our number one priority. In FY 2020 Columbus McKinnon made significant strides in the area of Health and Safety. In FY 2020 we launched a Global Safety Framework showcasing a 5-Point Safety Action Plan to ensure governance and consistency across the enterprise and deeply integrate Safety into every aspect of our organization.
• 5 Point Safety Action Plan & Progress to Date
1. Establish Core Structure of Corporate Programs
– Several Safety Program Modules have been created and rolled out to the organization in order of priority and overall risk
– Solid Governance Program instituted to ensure standardization and compliance to industry best practices
2. Enhanced Training Program
– Increased governance around safety training by implementation and tracking a standardized training program across our network
– Averaging 98% Completion Rate against established training matrix and schedule
3. Integration of the Safety Function
– Added Safety as our first Value to signify its importance
– Focused on integrating safety into day-to-day operations where front line supervisors and operators play a key role in owning safety & Safety Committees established at Tier 1 Plants, including front line associates |
|||
| 18 | 2020 PROXY STATEMENT
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|
– Gemba processes have standard safety components for Tier 1 Plants
4. Corporate Support & Engagement
– Establishment of Corporate EHS Program
– Safety Audits required on annual basis, semi-annual for Tier 1 Plants
– Increased reporting of safety metrics to corporate
– Increased corporate oversight of safety programs
5. Measuring and Demonstrating Success
– Reevaluated Safety Metrics to include more adequate and impactful leading and lagging indicators
– Created a Safety Scorecard and invested in Safety Reporting System for integrated reporting and visibility to safety metrics
– Significant improvement in rolling 12-month Total Recordable Injury Rate (TRIR) from 1.81 (May 2019) to .75 (May 2020)
– Averaging 255 safety opportunities identified and corrected per month
|
General Corporate Governance Policy
|
2020 PROXY STATEMENT |
19 |
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| Independent Members:
Heath A. Mitts, Chair
Liam G. McCarthy
Nicholas T. Pinchuk
R. Scott Trumbull
Kathryn V. Roedel
Meetings in 2019: Six (6) |
Primary Responsibilities
• Assist the Board in monitoring the integrity of our financial statements, our compliance with financial reporting and related legal and statutory requirements and the independence and performance of our internal and external auditors.
• Review our risk assessment and risk management policies.
• Select and employ a firm of independent registered public accountants to audit our financial statements and internal control over financial reporting each year, which firm is ultimately accountable to the Audit Committee and the Board.
Each member of our Audit Committee is independent as defined under the Securities Exchange Act of 1934, as amended and section 3 of the Sarbanes-Oxley Act of 2002, and under the NASDAQ Stock Market, Inc. rules. Pursuant to Section 407 of the Sarbanes-Oxley Act of 2002, our Board of Directors has determined that Messrs. Trumbull and Mitts qualify as “audit committee financial experts.” The duties of our Audit Committee consist of (i) appointing or replacing our independent auditors, (ii) pre-approving all auditing and permitted non-audit services provided to us by our independent auditors, (iii) reviewing with our independent auditors and our management the scope and results of our annual audited financial statements, our effectiveness of internal control over financial reporting, our quarterly financial statements and significant financial reporting issues and judgments made in connection with the preparation of our financial statements, (iv) reviewing our management’s assessment of the effectiveness of our internal controls, (v) reviewing insider and affiliated party transactions , (vi) establishing procedures for the receipt, retention and treatment of complaints received regarding accounting or internal controls , and (vii) overseeing the enterprise risk management system. The Audit Committee is governed by a written charter approved by the Board of Directors which is posted on the Investor Relations section of our website at www.columbusmckinnon.com. |
| 24 | 2020 PROXY STATEMENT
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Compensation and Succession Committee
| Independent Members:
R. Scott Trumbull, Chair
Aziz S. Aghili
Jeanne Beliveau-Dunn Liam G. McCarthy
Nicholas T. Pinchuk
Kathryn V. Roedel
Ernest R. Verebelyi
Meetings in 2019: Six (6) |
Primary Responsibilities
• Review and make recommendations to the Board regarding management organization, succession and development programs.
• Review and approve, or recommend for approval, the election of corporate officers and their salaries, incentive compensation and bonus awards.
• Make the decisions required by a committee of the Board under all stock and deferred compensation plans.
• Approve and report to the Board changes in salary ranges for all other major position categories and, as outlined in its charter, changes in our retirement, group insurance, investment, management incentive compensation and bonus and other benefit plans.
Each member of our Compensation and Succession Committee is an independent Director under the NASDAQ Stock Market, Inc., rules currently in effect. The principal functions of this Committee are to (i) review and make recommendations to the Board of Directors concerning our compensation strategy, (ii) establish corporate performance measures and goals under our performance-based incentive programs, (iii) determine individual compensation targets for our executive officers under our incentive programs, (iv) evaluate and certify whether performance goals have been met at the end of the performance period, (v) determine salary increases and award amounts for individual executive officers, (vi) review and approve (or recommend to the Board of Directors for approval) any material changes to our salary, incentive, and benefit programs and assure that these programs are administered in a manner consistent with the compensation strategy, (vii) review and make recommendations to the Board of Directors concerning equity grants, (viii) assess and evaluate risk in connection with our compensation plans and programs, (ix) review and make recommendations to the Board of Directors concerning compensation and bonus for the Chief Executive Officer and Chief Financial Officer, and (x) perform other functions as identified in the Compensation and Succession Committee charter.
The Compensation and Succession Committee is governed by a written charter approved by the Board of Directors which is posted on the Investor Relations section of our website at www.columbusmckinnon.com. Additional information on the Compensation and Succession Committee’s processes and procedures are addressed in the Compensation Discussion and Analysis section of this Proxy Statement.
|
|
2020 PROXY STATEMENT |
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Corporate Governance and Nomination Committee
| Independent members:
Liam G. McCarthy, Chair
Aziz S. Aghili
Jeanne Beliveau-Dunn
Heath A. Mitts
Kathryn V. Roedel
Ernest R. Verebelyi
Meetings in 2019: Five (5) |
Primary Responsibilities
• Make recommendations to the Board concerning the size, composition, skills of the Board and its committees.
• Recommend nominees for election or reelection as directors.
• Consider other matters pertaining to Board membership and governance.
• Evaluate Board performance and assess the adequacy of, and compliance with, our Corporate Governance Guidelines and Code of Business Conduct.
• Ensure governance and integration of material ESG initiatives into overall business strategy.
• Drive diversity in Board succession planning and hiring practices.
Our Corporate Governance and Nomination Committee is responsible for (i) evaluating the composition, skills, organization and governance of our Board of Directors and its committees, (ii) monitoring compliance with our system of corporate governance , and (iii) developing criteria, researching and making recommendations with respect to candidates for membership on our Board of Directors.
Each member of the Corporate Governance and Nomination Committee is an independent Director under the NASDAQ Stock Market, Inc., rules currently in effect. Our Corporate Governance and Nomination Committee does not solicit direct nominations from our shareholders but will give due consideration to written recommendations for nominees from our shareholders for election as directors that are submitted in accordance with our By-Laws. See the information contained in our By-Laws under the heading “Shareholders’ Proposals.”
The Corporate Governance and Nomination Committee is governed by a written charter approved by the Board of Directors which is posted on the Investor Relations section of our website at www.columbusmckinnon.com. |
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The following table sets forth the annual target compensation provided to the Company’s Directors during the fiscal year ended March 31, 2020:
|
Director |
Annual Retainer - Cash ($) |
Annual Retainer - Stock ($) |
Restricted Stock Units(1) ($) |
Chairman of the Board ($) |
Committee Chair Fees ($) |
Target Annual Compensation ($) | ||||||||||||||||||||||||
| Aziz S. Aghili |
65,000 | 60,000 | 37,500 | — | — | 162,500 | ||||||||||||||||||||||||
| Richard H . Fleming |
65,000 | 60,000 | 37,500 | 60,000 | — | 222,500 | ||||||||||||||||||||||||
| Liam G. McCarthy |
65,000 | 60,000 | 37,500 | — | 15,000 | 177,500 | ||||||||||||||||||||||||
| Heath A. Mitts |
65,000 | 60,000 | 37,500 | — | 20,000 | 182,500 | ||||||||||||||||||||||||
| Mark D. Morelli(2) |
— | — | — | — | — | — | ||||||||||||||||||||||||
| Nicholas T. Pinchuk |
65,000 | 60,000 | 37,500 | — | — | 162,500 | ||||||||||||||||||||||||
| Kathryn V. Roedel |
65,000 | 60,000 | 37,500 | — | — | 162,500 | ||||||||||||||||||||||||
| R . Scott Trumbull |
65,000 | 60,000 | 37,500 | — | 20,000 | 182,500 | ||||||||||||||||||||||||
| Ernest R. Verebelyi |
65,000 | 60,000 | 37,500 | — | — | 162,500 | ||||||||||||||||||||||||
| (1) | Each Director is granted 1,500 restricted stock units annually which vest over 3 years. Shares are valued based upon the March 31, 2020 closing price of $25.00 per share. |
| (2) | Mr. Morelli received no separate compensation as a Director of the Company. |
The following table provides the taxable compensation received by the Directors during the fiscal year ended March 31, 2020. Unless otherwise noted, “Other Compensation” represents the cash payment of fractional shares:
|
Director |
Annual Retainer (Cash) ($) |
Annual Retainer (Stock)(1) ($) |
Chairman ($) |
Committee ($) |
Other Compensation(3) ($) |
Total Annual Fees(2) ($) | ||||||||||||||||||||||||
| Aziz S. Aghili |
|
65,000 |
|
121,187 |
|
— |
|
— |
|
13 |
|
186,200 |
||||||||||||||||||
| Richard H. Fleming |
|
48,750 |
|
121,187 |
|
45,000 |
|
— |
|
79 |
|
215,016 |
||||||||||||||||||
| Liam G. McCarthy |
|
65,000 |
|
121,187 |
|
— |
|
15,000 |
|
79 |
|
201,266 |
||||||||||||||||||
| Heath A. Mitts |
|
65,000 |
|
121,187 |
|
— |
|
20,000 |
|
79 |
|
206,266 |
||||||||||||||||||
| Nicholas T. Pinchuk |
|
65,000 |
|
121,187 |
|
— |
|
— |
|
79 |
|
186,266 |
||||||||||||||||||
| Kathryn V. Roedel |
|
65,000 |
|
121,187 |
|
— |
|
— |
|
13 |
|
186,200 |
||||||||||||||||||
| R. Scott Trumbull |
|
65,000 |
|
121,187 |
|
— |
|
20,000 |
|
79 |
|
206,266 |
||||||||||||||||||
| Emest R. Verebelyi(4) |
|
65,000 |
|
121,187 |
|
— |
|
79 |
|
186,266 |
||||||||||||||||||||
| (1) | Reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of awards of restricted stock using the assumptions set forth in the footnotes to the financial statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020. This figure includes the 1,500 restricted stock units granted annually which vest over 3 years, as well as the $60,002 in shares that were granted with immediate vesting provisions. |
| (2) | No additional fees are paid for attendance at Board of Director or committee meetings. Our Directors are reimbursed for reasonable expenses incurred in attending such meetings. |
| (3) | Other compensation in cash in lieu of fractional shares. |
| (4) | Mr. Verebelyi has deferred 100% of the cash retainer into the Columbus McKinnon Nonqualified Deferred Compensation Plan. |
| 28 | 2020 PROXY STATEMENT
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|
Name |
Age |
Position | ||||
|
Richard H. Fleming |
|
72 |
|
Chairman and Interim President and Chief Executive Officer (1-10-20 to 6-1-20) | ||
|
David J. Wilson |
|
51 |
|
President and Chief Executive Officer Elect, Starting Date June 1, 2020 | ||
|
Bert A. Brant |
|
59 |
|
Vice President Global Manufacturing Operations | ||
|
Appal Chintapalli |
|
45 |
|
Vice President Engineered Products Group | ||
|
Alan S. Korman |
|
59 |
|
Vice President Corporate Development, General Counsel, CHRO & Secretary | ||
|
Mario Y. Ramos Lara |
|
47 |
|
Vice President Global Product Development | ||
|
Peter M. McCormick |
|
58 |
|
Vice President Crane Solutions Group | ||
|
Mark Paradowski |
|
50 |
|
Vice President Information Services | ||
|
Gregory P. Rustowicz |
|
60 |
|
Vice President Finance and Chief Financial Officer and Treasurer | ||
|
Kurt F. Wozniak |
|
56 |
|
Vice President Industrial Products Group | ||
All of our executive officers are elected annually at the first meeting of our Board of Directors following the Annual Meeting of Shareholders and serve at the discretion of our Board of Directors. There are no family relationships between any of our officers or Directors. Recent business experience of our executive officers who are not also Directors follows:
Bert A. Brant joined the Company in February 2018 as V.P. Global Manufacturing Operations. Prior to that he was SVP, Global Operations for Colfax Fluid Handling, a division of Colfax Corporation. Prior to joining Colfax in 2014, he led operations in the U.S., Mexico and Canada for Apex Tool Group. He held other manufacturing and operational leadership roles at Pergo LLC, Rexnord Corporation and Denso Manufacturing, where he was trained by Toyota in Japan on the Toyota Production System.
Appal Chintapalli joined the Company in March 2018 as the VP of Engineered Products. Prior thereto, he was General Manager and Vice President of IT & Edge Infrastructure EMEA in Germany for Vertiv. Previously, he worked in a number of positions for Emerson including Vice President of Marketing for Emerson Network Power EMEA in London, UK, and in the U.S., Vice President of Enterprise Services for the Emerson Climate Division, and Corporate Marketing Manager. Appal holds an MBA from Harvard Business School, and a Bachelor and Master of Science in Chemical Engineering.
Alan S. Korman joined the Company in January 2011 as General Counsel and Assistant Secretary. In July 2011, he was elected V.P., General Counsel and Corporate Secretary. In 2015 he assumed the role of Corporate Development and in November 2017 the role of Chief Human Resources Officer. From 1994 until January 2011, he served in various senior executive positions of responsibility at Ivoclar Vivadent, Inc., including Vice President, General Counsel and Secretary, and President of Pentron Ceramics, Inc.
Mario Y. Ramos Lara joined the Company in June 2018 as Vice President, Global Product Development. Prior thereto, he spent 18 years in various roles at Schneider Electric, most recently Vice President, Strategic Marketing, Product Management and Partnerships for Schneider’s Final Distribution line of business. Other positions at Schneider included Vice President, Global Engineering, Director of Engineering for Low and Medium Voltage Equipment and Director, Global Technology Center in Monterrey, Mexico. Mario holds an MBA from Vanderbilt, and a Bachelor and Master of Science in Mechanical Engineering.
|
2020 PROXY STATEMENT |
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OUR EXECUTIVE OFFICERS
Peter M. McCormick joined the Company in 2015 with the acquisition of Magnetek. He served as President/CEO of Magnetek from 2008 until 2016. From 2006 to 2008 he was Executive VP and COO of Magnetek. In 2016 he assumed the role of Integration Manager STAHL. In 2017 he was appointed Vice President Crane Solutions Group.
Mark Paradowski joined the Company in 1997 as a Technical Manager. In August 2013, he was named Vice President—Information Services. Prior to that, he served as Director—Global Information Systems after having served as Director Information Services. Before joining the company, Mr. Paradowski held various positions with Oracle Corporation and Electronic Data Systems (EDS).
Gregory P. Rustowicz joined the Company in August 2011 as Vice President—Finance and Chief Financial Officer. From 2007, he was Vice President Finance and Corporate Treasurer at Momentive Performance Materials Inc. Prior thereto, he spent 20 years in various financial management positions for PPG Industries, Inc., including Group CFO for the Glass, Fiber Glass and Chemicals Businesses, CFO for Transitions Optical, Inc., and Assistant Treasurer and Global Credit Director. Prior to PPG, he worked as a CPA for KPMG.
Kurt F. Wozniak joined Columbus McKinnon in 1999. He was named V.P. Industrial Products Group in 2017. Prior thereto, he was Vice President—Americas on April 1, 2014. Since July 2012, he served as the Vice President—Latin America. Prior to that, he had been Managing Director – Latin America since July 2010. He has also served as Director, Corporate Development and Director, Materials Management. Previously, Mr. Wozniak was a management consultant with Ernst & Young LLP.
| 30 | 2020 PROXY STATEMENT
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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of March 31, 2020 regarding the beneficial ownership of our common stock by (i) each person who is known by us to own beneficially more than 5% of our common stock; (ii) by each Director; (iii) by each of our executive officers named in the Summary Compensation Table; and (iv) by all of our executive officers and Directors as a group. The business address of each of the executive officers and Directors is 205 Crosspoint Parkway, Buffalo, New York 14068.
| Directors, Officers and Shareholders |
Number Of Shares(1) |
Percentage Of Class | ||||||||
| Richard H. Fleming(2) |
|
53,202 |
|
* |
||||||
| Mark D. Morelli |
|
14,813 |
|
* |
||||||
| Emest R. Verebelyi (2) |
|
47.698 |
|
* |
||||||
| Nicholas T. Pinchuk(2) |
|
45.233 |
|
* |
||||||
| Liam G. McCarthy(2) |
|
41,806 |
|
* |
||||||
| R. Scott Trumbull(2) |
|
19,804 |
|
* |
||||||
| Heath A. Mitts(2) |
|
16,124 |
|
* |
||||||
| Kathryn V. Roedel(3) |
|
3.658 |
|
* |
||||||
| Aziz S. Aghili(3) |
|
3.658 |
|
* |
||||||
| Peter M. McCormick(4) |
|
50,267 |
|
* |
||||||
| Alan S. Korman(5) |
|
37,893 |
|
* |
||||||
| Gregory P. Rustowicz(6) |
|
73.603 |
|
* |
||||||
| Kunt F. Wozniak(7) |
|
51,442 |
|
* |
||||||
| All Directors and Executive Officers as Group (17 persons)(8) |
|
524.467 |
|
2.18 |
% | |||||
| Columbus McKinnon Corporation Employee Stock Ownership Plan |
|
233,531 |
|
* |
||||||
| Dimensional Fund Advisors LP(9) |
|
1,546,711 |
|
6.53 |
% | |||||
| BlackRock. Inc(10) |
|
1,687,403 |
|
7.10 |
% | |||||
| Macquarie Group Ltd(11) |
|
1,435,750 |
|
6.07 |
% | |||||
| * | Less than 1% |
| (1) | Rounded to the nearest whole share. Unless otherwise indicated in the footnotes, each of the shareholders named in this table has sole voting and investment power with respect to the shares shown as beneficially owned by such shareholder, except to the extent that authority is shared by spouses under applicable law |
| (2) | Does not include 2,646 Restricted Stock Units held by each of Messrs, Fleming, Verebelyi, Pinchuk, McCarthy, Trumbull and Mitts. |
| (3) | Does not include 2,265 Restricted Stock Units held by each of Ms. Roedel and Mr. Aghili. |
| (4) | Includes (i) 18,153 shares of common stock owned directly; (ii) 18,437 shares of restricted stock units which are subject to forfeiture, of which 10,376 shares of restricted stock units vest within 60 days, and (iii) 13,677 shares of common stock issuable under options granted to Mr. McCormick which are exercisable within 60 days Excludes 15,564 shares of common stock issuable under options granted to Mr. McCormick which are not exercisable within 60 days |
| (5) | Includes (i) 9,244 shares of common stock owned directly; (ii) 302 shares of common stock allocated to Mr. Korman’s ESOP account; 16,725 shares of restricted stock units which are subject to forfeiture, of which 8,763 shares of restricted stock units vest within 60 days; and (iv) 11,622 shares of common stock issuable under options granted to Mr., Korman which are exercisable within 60 days Excludes 13,312 shares of common stock issuable under options granted to Mr. Korman which are not exercisable within 60 days. |
| (6) | Includes (i) 30,918 shares of common stock owned directly; (ii) 242 shares of common stock allocated to Mr. Rustowicz’s ESOP account; (iii) 24,154 Shares of restricted stock units which are subject to forfeiture, of which 13,241 shares of |
|
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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
| restricted stock units vest within 60 days, and (iv) 18,289 shares of common stock issuable under options granted to Mr. Rustowicz which are exercisable within 60 days Excludes 20,889 shares of common stock issuable under options granted to Mr. Rustowicz which are not exercisable within 60 days |
| (7) | Includes (i) 21,119 shares of common stock owned directly; (ii) 1,609 shares of common stock allocated to Mr. Wozniak’s ESOP account (iii) 16,989 shares of restricted stock units which are subject to forfeiture, of which 8,713 shares of restricted stock units vest within 60 days and (iv) 11,725 shares of common stock issuable under options granted to Mr. Wozniak which are exercisable within 60 days Excludes 13,887 shares of common stock issuable under options granted to Mr. Wozniak which are not exercisable within 60 days |
| (8) | Includes options to purchase an aggregate of 67,356 shares of common stock issuable to certain executive officers which are exercisable within 60 days Excludes (i) the shares of common stock owned by the ESOP, except for an aggregate of 3.655 shares allocated to the respective ESOP accounts of our executive officers; and (ii) options to purchase an aggregate of 88,810 shares of common stock issued to certain executive officers which are not exercisable within 60 days |
| (9) | Information with respect to Dimensional Fund Advisors LP is based on a Schedule 13G/A filed with the Securities and exchange Commission on February 12, 2020. Based solely upon information in this Schedule 13G/A, Dimensional Fund Advisors LP sole dispositive power with respect to all of such shares of common stock. The stated business address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746. |
| (10) | Information with respect to BlackRock, Inc. is based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 5, 2020. Based solely upon information in this schedule 13G/A, BlackRock, Inc. has sole dispositive power with respect to all of such shares of common stock. The stated business address of BlackRock, Inc. is 55 East 52 nd Street, New York, New York 10055. |
| (11) | Information with respect to Macquarie Group Limited is a based on a Schedule 13G/A jointly filed by Macquarie Group Limited, Macquarie Bank Limited, Macquarie Investment Management Holdings Inc. Macquarie Investment management Business Trust, and Macquarie Funds Management Austria Kapitalanlage AG with the Securities and Exchange Commission February 13, 2020. Based solely upon information in this Schedule 13G/A, Macquarie Investment Management Holdings Inc. and Macquarie Investment Management Business Trust have sole dispositive power with respect to 1,427,638 shares of common stock, and Macquaire Fund Management Austria Kapitalanlage AG has sole dispositive power respect to 2,229 shares of common stock. The stated business address of Macquarie Group Limited is 50 Martin Place, New South Wales, Australia. |
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Table of Contents
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our Directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the Securities and Exchange Commission and NASDAQ initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Our executive officers, Directors and greater than 10% shareholders are required to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on our review of the copies of such reports furnished to us and written representations that no other reports were required, we are in compliance with all Section 16(a) filing requirements applicable to our executive officers, Directors and greater than 10% beneficial owners during the fiscal year ended March 31, 2020, except for the Form 4’s in connection with the restricted stock units and options issued to Messrs. Morelli, Wozniak, Brant, Korman, Ramos Lara and Paradowski on May 20, 2019, which were amended to correct inadvertent errors.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Audit Committee reviews and makes recommendations where appropriate to the Board of Directors with respect to all related party transactions and relationships. Pursuant to Regulation S-K 404, Code of Conduct and Legal Ethics and Business Compliance Manual and the annual directors’ and officers’ questionnaires that require disclosure of transactions or relationships that may constitute conflicts of interest or require disclosures or affect an independence determination under applicable SEC rules.
The cost of solicitation of proxies will be borne by us, including expenses in connection with preparing and mailing this Proxy Statement. In addition to the use of the mail, proxies may be solicited by personal interviews or by telephone, telecommunications or other electronic means by our Directors, officers and employees at no additional compensation. Arrangements will be made with brokerage houses, banks and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of our common stock, and we will reimburse them for reasonable out-of-pocket expenses incurred by them in connection therewith.
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, some shareholder proposals may be eligible for inclusion in our 2020 proxy statement. These shareholder proposals must be submitted, along with proof of ownership of our stock in accordance with Rule 14a-8, by U.S. mail, postage prepaid, to our Corporate Secretary, Alan S. Korman, at Columbus McKinnon Corporation, 205 Crosspoint Parkway, Buffalo, New York 14068. Failure to deliver a proposal in accordance with this procedure may result in the proposal not being deemed timely received.
In addition, under our By-laws, any shareholder who intends to nominate a candidate for election to the Board or to propose any business at our 2020 annual meeting (other than precatory (non-binding) proposals presented under Rule 14a-8) pursuant to the advance notice provisions of the By-Laws, must give notice to our Corporate Secretary not less 90 days nor more than 120 days prior to the first anniversary of the 2019 Annual Meeting. In each case, the notice must include information specified in our By-Laws, including information concerning the nominee or proposal, as the case may be, and
|
2020 PROXY STATEMENT |
33 |
Table of Contents
SHAREHOLDERS’ PROPOSAL
information about the shareholder’s ownership of and agreements related to our stock. In the event the date of the 2020 Annual Meeting is advanced by more than thirty (30) days, or delayed by more than sixty (60) days, from such anniversary date, notice by the shareholder, to be timely, must be so delivered, or mailed and received, not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such annual meeting is first made by the Corporation. In no event shall any adjournment or the announcement thereof commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.
In addition to the information required in a notice of a proposal, a notice to our Corporate Secretary with respect to nominations must contain certain information regarding each proposed nominee for director. Further information regarding proposals or nominations by shareholders can be found in Section 1.11 of the Company’s By-Laws. If our Board of Directors or a designated committee determines that any proposal or nomination was not made in a timely fashion or fails to meet the information requirements of Section 1.11, such proposal or nomination will not be considered.
As of the date of this Proxy Statement, the Board of Directors does not intend to present, and has not been informed that any other person intends to present, any matter for action at this meeting other than those specifically referred to in this Proxy Statement. If other matters properly come before the meeting, it is intended that the holders of the proxies will act with respect thereto in accordance with their best judgment.
CONTACTING THE BOARD OF DIRECTORS
Our Board of Directors has adopted a written policy regarding communications with our Board of Directors. A copy of this policy is posted on the Investor Relations section of the Company’s website at www.columbusmckinnon.com.
DIRECTOR ORIENTATION AND CONTINUING EDUCATION
Our orientation programs familiarize new directors with our Company’s businesses, strategies, and policies, and assist new directors in developing the skills and knowledge required for their service on the Board. Throughout the year we also present educational materials including a membership to the National Association of Corporate Directors to the Board to assist our directors in maintaining skills and knowledge necessary or appropriate for the performance of their responsibilities.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between any member of our Compensation and Succession Committee or any of our executive officers and any member of any other company’s board of directors or compensation committee (or equivalent), nor has any such relationship existed in the past. No member of our Compensation and Succession Committee was, during fiscal year 2020 or prior thereto, an officer or employee of our Company or any of our subsidiaries.
| 34 | 2020 PROXY STATEMENT
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Table of Contents
Review of Our Audited Financial Statements
Our Audit Committee is comprised of the Directors named below, each of whom is independent as defined under Section 10A(m) of the Securities Exchange Act of 1934 and Section 3 of the Sarbanes-Oxley Act of 2002 and under Rule 5605 of the NASDAQ Stock Market, Inc., listing standards as currently in effect. In addition, pursuant to the requirements of Section 407 of the Sarbanes-Oxley Act of 2002, our Board of Directors has determined that Messrs. Mitts and Trumbull qualify as “Audit Committee financial experts.”
The Audit Committee operates under a written charter which includes provisions requiring Audit Committee advance approval of all audit and non-audit services to be provided by the Company’s independent registered public accounting firm. However, as a matter of course, we will not engage any outside accountants to perform any significant audit or non-audit services without the prior approval of the Audit Committee.
The Audit Committee has reviewed and discussed with our management our audited financial statements for the fiscal year ended March 31, 2020. The Audit Committee has also discussed with Ernst & Young LLP, our independent auditors, the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16, “Communications with Audit Committees.”
The Audit Committee has also received and reviewed the written disclosures and the letter from Ernst & Young LLP, pursuant to applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit Committee concerning independence and has discussed the independence of Ernst & Young LLP with that firm.
Based on the review and the discussions noted above, the Audit Committee recommended to our Board of Directors that our audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 for filing with the Securities and Exchange Commission.
Heath A. Mitts, Chair
Liam G. McCarthy
Nicholas T. Pinchuk
Kathryn V. Roedel
R. Scott Trumbull
May 17, 2020
|
2020 PROXY STATEMENT |
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COMPENSATION OF EXECUTIVE OFFICERS
Report on Executive Compensation
The Compensation and Succession Committee of the Board of Directors recommends the compensation for our President and Chief Executive Officer and Chief Financial Officer to the full Board of Directors for approval and approves the compensation for our other executive officers. This Committee is composed entirely of Directors who are neither executive officers nor employees (“associates”) of our Company. In addition, the Compensation and Succession Committee recommends grants under our 2016 Long Term Incentive Plan and oversees the administration of other compensation plans and programs.
The Compensation and Succession Committee has reviewed the Compensation Discussion and Analysis set forth below and has discussed it with management. In reliance on the reviews and discussions referred to above, the Compensation and Succession Committee recommended to the Board of Directors (and the Board has approved) that the Compensation Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K for the year ended March 31, 2020 for filing with the Securities and Exchange Commission.
| R. Scott Trumbull, Chair Aziz S. Aghili Jeanne Beliveau-Dunn Liam G. McCarthy Nicholas T. Pinchuk Kathryn V. Roedel Ernest R. Verebelyi | ||
May 17, 2020
| 36 | 2020 PROXY STATEMENT
|
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Practices
|
What We Do
|
What We Don’t Do
| |
|
Pay for Performance Philosophy
|
No Excise Tax Gross Ups Upon Change-in-Control
| |
|
Minimum Stock Ownership Policy for NEOs
|
No Excessive Executive Perquisites
| |
|
Double Trigger Equity Acceleration Upon a
|
No Tax Gross Ups on Perquisites or Benefits
| |
|
Independent Consultant Retained by Compensation & Succession Committee
|
No Repricing of Underwater Stock Options Without Stockholder Approval
| |
|
Regular Review of Share Utilization
|
No Inclusion of Long-term Incentive Awards in Severance or Retirement Benefit Calculations
| |
|
Maintain a Clawback Policy
|
No Permitted Hedging, Short Sales or Derivative Transactions in Company stock
| |
|
Review Compensation Related Risks
|
No Guaranteed Salary Increases or Guaranteed Annual Incentive Bonuses for NEOs
|
Overview, Philosophy and Objectives
|
2020 PROXY STATEMENT |
37 |
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COMPENSATION DISCUSSION AND ANALYSIS
Management’s Role in the Compensation-Setting Process
Elements of Our Compensation Program for NEOs
Our compensation philosophy and objectives are achieved by using the following elements in our compensation program for NEOs:
|
Element
|
Description
|
Key Objective
| ||
|
Base Salary
|
Provide a fixed level of current cash compensation consonant with the executive’s primary duties and responsibilities
|
Designed to be market competitive and enable us to attract and retain talented executives
| ||
|
Short-Term Incentives—Annual Incentive
|
Provide “at risk” compensation directly tied to attainment of annual key business objectives
|
Designed to motivate and reward achievement of financial, operational and strategic goals
| ||
|
Long-Term Incentives—Stock Options
|
Align executives with shareholders and offer retention with gradual vesting schedule. Provide motivation for long-term goals and overall growth
|
Designed to be market competitive, motivate and reward achievement of stock price growth and align executive’s interests with those of the shareholder
| ||
|
Long-Term Incentives—Restricted Stock Units (Time-based)
|
Align executives with shareholders and offer retention with gradual vesting schedule. Provide motivation for long-term goals and overall growth
|
Designed to retain executives and align their interests with those of our shareholders
| ||
|
Long-Term Incentives—Restricted Stock Units (Performance-based)
|
Provide variable compensation based on performance achieved against pre-established goals
|
Designed to retain executives and align their interests with those of our shareholders
| ||
|
Retirement Benefits
|
Provide comprehensive retirement savings vehicles through qualified and non-qualified plans. Supports retention with gradual vesting schedule
|
Market-based retirement programs targeted to attract and retain talented executives while encouraging retirement savings
| ||
|
Severance
|
Provide severance protection equal to one week of salary for every year of service
|
Designed to be competitive in the market and allow for the attraction of talented candidates
|
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COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Policies and Practices
|
Fiscal Year 2020 Peer Group
|
||||
|
Alamo Group Inc.
|
Albany International Corp.
|
Altra Industrial Motion Corp.
| ||
|
Astec Industries Inc.
|
Barnes Group Inc.
|
Chart Industries, Inc.
| ||
|
CIRCOR International, Inc.
|
Commercial Vehicle Group, Inc.
|
Enerpac Tool Group Corp.
| ||
|
EnPro Industries, Inc.
|
ESCO Technologies Inc.
|
Federal Signal Corporation
| ||
|
L.B. Foster Company
|
Franklin Electric Co., Inc.
|
Graco Inc.
| ||
|
Haynes International, Inc.
|
Kadant Inc.
|
Lindsay Corporation
| ||
|
Lydall, Inc.
|
The Manitowoc Company, Inc.
|
NN, Inc.
| ||
|
Powell Industries, Inc.
|
RBC Bearings Incorporated
|
Standex International Corporation
| ||
|
Tennant Company
|
|
2020 PROXY STATEMENT |
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COMPENSATION DISCUSSION AND ANALYSIS
The following table shows the dollar values and pay mix percentages of our fiscal year 2020 target direct pay opportunities for our NEOs:
|
Executive Officer
|
Base Salary
|
Annual Target Opportunity
|
Total Cash Compensation Opportunity
|
Long-Term
|
Total Target Pay Opportunity
|
|||||||||||||||
|
Richard H. Fleming |
|
92,742 |
|
|
— |
|
|
92,742 |
|
|
— |
|
|
92,742 |
| |||||
| Chairman of the Board and Interim President and Chief Executive Officer
|
|
100
|
%
|
|
—
|
|
|
100
|
%
|
|
—
|
|
|
100
|
%
| |||||
|
Mark D. Morelli |
|
775,000 |
|
|
775,000 |
|
|
1,550,000 |
|
|
1,900,000 |
|
|
3,450,000 |
| |||||
| President and Chief Executive Officer
|
|
22
|
%
|
|
22
|
%
|
|
45
|
%
|
|
55
|
%
|
|
100
|
%
| |||||
|
Gregory P. Rustowicz |
|
415,403 |
|
|
270,012 |
|
|
685,415 |
|
|
498,484 |
|
|
1,183,899 |
| |||||
| Vice President Finance and Chief Financial Officer
|
|
35
|
%
|
|
23
|
%
|
|
58
|
%
|
|
42
|
%
|
|
100
|
%
| |||||
|
Peter M. McCormick |
|
373,320 |
|
|
186,660 |
|
|
559,980 |
|
|
373,320 |
|
|
933,300 |
| |||||
| Vice President—Crane Solutions
|
|
40
|
%
|
|
20
|
%
|
|
60
|
%
|
|
40
|
%
|
|
100
|
%
| |||||
|
Kurt F. Wozniak |
|
355,103 |
|
|
195,306 |
|
|
550,409 |
|
|
355,103 |
|
|
905,512 |
| |||||
| Vice President—Industrial Products
|
|
39
|
%
|
|
22
|
%
|
|
61
|
%
|
|
39
|
%
|
|
100
|
%
| |||||
|
Alan S. Korman |
|
357,958 |
|
|
196,877 |
|
|
554,835 |
|
|
322,162 |
|
|
876,997 |
| |||||
| Vice President Corporate Development, General Counsel and CHRO
|
|
41
|
%
|
|
22
|
%
|
|
63
|
%
|
|
37
|
%
|
|
100
|
%
| |||||
| 42 | 2020 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS
The Committee approved the following base salary adjustments effective July 1, 2019 for our NEOs:
|
Executive Officer |
FY
2019 Adjustments |
FY 2020 Base Salary |
Percentage Change | ||||||||||||
|
Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer |
— | 92,742 | — | ||||||||||||
|
Mark D. Morelli President and Chief Executive Officer |
59,500 | 775,000 | 8 | % | |||||||||||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
12,099 | 415,403 | 3 | % | |||||||||||
|
Peter M. McCormick Vice President—Crane Solutions |
7,320 | 373,320 | 2 | % | |||||||||||
|
Kurt F. Wozniak Vice President—Industrial Products |
16,910 | 355,103 | 5 | % | |||||||||||
|
Alan S. Korman Vice President Corporate Development, General Counsel and CHRO |
17,046 | 357,958 | 5 | % | |||||||||||
|
Driver Performance Level |
Percentage of Target (to be multiplied by weight for each Driver) | ||||
| Maximum Performance Level (or higher) |
|
200 |
% | ||
| Target Performance Level |
|
100 |
% | ||
| Threshold Performance Level |
|
50 |
% | ||
| Below Threshold Performance Level |
|
0 |
% | ||
| 44 | 2020 PROXY STATEMENT
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Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Fiscal Year 2020 Annual Incentive Plan Design
Financial Measures and Weights—80% of Plan and Strategic Goals 20% of Plan
|
Fiscal 2020 Drivers (April 1, 2019 to March 31, 2020) |
Richard H. Fleming |
Mark D. Morelli |
Gregory P. Rustowicz |
Peter M. McCormick |
Kurt F. Wozniak |
Alan S. Korman | ||||||||||||||||||||||||
| Consolidated EBIT |
|
— |
|
40 |
% |
|
40 |
% |
|
40 |
% |
|
40 |
% |
|
40 |
% | |||||||||||||
| Consolidated Free Cash Flow |
|
— |
|
40 |
% |
|
40 |
% |
|
40 |
% |
|
40 |
% |
|
40 |
% | |||||||||||||
| Strategic Goals (Key Business Objectives) |
|
— |
|
20 |
% |
|
20 |
% |
|
20 |
% |
|
20 |
% |
|
20 |
% | |||||||||||||
Results
The fiscal year 2020 financial targets, performance achieved as a percent of target, and the fiscal year 2020 payout percentages under each Driver are shown below:
| Fiscal 2020 Annual Incentive Plan— EBIT and Free Cash Flow (Dollars in Millions) |
Fiscal 2020 | |||||||||
| Fiscal 2020 Drivers (April 1, 2019—March 31, 2020) |
Threshold ($) |
Target ($) |
Maximum ($) |
Result ($) | ||||||
| Consolidated EBIT(1) |
91.8 |
108.0 |
124.2 |
95.1 |
60% | |||||
| Consolidated Free Cash Flow(1) |
67.9 |
75.4 |
82.9 |
97.4 |
200% | |||||
| Strategic Goals (Key Business Objectives)(2) |
0% to 200% |
136% | ||||||||
| (1) | Fiscal year 2020 EBIT and Free Cash Flow were adjusted to eliminate the impact of divestitures, foreign exchange and certain other one-time items. |
| (2) | Strategic Goals percentage payout could range from 0% to 200%. Average NEOs Strategic payout was 136% |
|
2020 PROXY STATEMENT |
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Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Annual incentive targets, strategic and overall achievement percentages, as well as, the overall incentive payment as a percentage of base salary awarded for fiscal year 2020 are shown below:
|
Executive Officer |
Annual Incentive Target (% of Base |
Overall Annual Plan Rating (% of Target |
Actual Payout Based on Performance Achieved (% of Base | ||||||||||||
|
Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer |
— | — | — | ||||||||||||
|
Mark D. Morelli President and Chief Executive Officer |
100 | % | — | — | |||||||||||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
65 | % | 139 | % | 90 | % | |||||||||
|
Peter M. McCormick Vice President—Crane Solutions |
50 | % | 124 | % | 62 | % | |||||||||
|
Kurt F. Wozniak Vice President—Industrial Products |
55 | % | 123 | % | 68 | % | |||||||||
|
Alan S. Korman Vice President Corporate Development, General Counsel and CHRO |
55 | % | 139 | % | 77 | % | |||||||||
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Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
|
Executive Officer |
Long Term Incentive (% of Base Salary) | ||||
|
Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer |
— | ||||
|
Mark D. Morelli President and Chief Executive Officer |
245 | % | |||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
120 | % | |||
|
Peter M. McCormick Vice President—Crane Solutions |
100 | % | |||
|
Kurt F. Wozniak Vice President—Industrial Products |
100 | % | |||
|
Alan S. Korman Vice President Corporate Development, General Counsel & CHRO |
90 | % | |||
The target long term incentive mix for our NEOs consists of non-qualified stock options (one-third of target value), restricted stock or RSUs (one-third of target value), and performance RSUs (one-third of target value). Dollar values are converted to share numbers based on an estimate of expected value at initial grant.
The following tables summarize the equity granted as part of the NEOs’ annual compensation for fiscal year 2020:
|
Executive Officer |
Target Performance |
Options Granted |
RSUs Granted(2) | ||||||||||||
|
Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer |
— | — | — | ||||||||||||
|
Mark D. Morelli President and Chief Executive Officer |
16,813 | 51,158 | 16,813 | ||||||||||||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
4,411 | 13,422 | 8,255 | ||||||||||||
|
Peter M. McCormick Vice President—Crane Solutions |
3,303 | 10,052 | 6,122 | ||||||||||||
|
Kurt F. Wozniak Vice President—Industrial Products |
3,142 | 9,561 | 7,160 | ||||||||||||
|
Alan S. Korman Vice President Corporate Development, General Counsel & CHRO |
2,851 | 8,674 | 6,741 | ||||||||||||
| (1) | Grant represents target value for fiscal year 2020 and was granted on May 20, 2019. |
| (2) | Includes additional RSUs granted as part of a retention plan. |
|
2020 PROXY STATEMENT |
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COMPENSATION DISCUSSION AND ANALYSIS
Performance Restricted Stock Units
For fiscal year 2020, performance shares are subject to adjustment based on the performance and payout relationship as illustrated in the table below:
|
Driver Performance Level |
FY 21 EBITDA Margin Targets |
Percentage of Award(1) | ||
| Meet or Exceed Maximum EBITDA Margin for full FY2021 |
18.0% |
150% | ||
| Meet or Exceed Target EBITDA Margin for full FY2021 |
16.0% |
100% | ||
| Meet or Exceed Threshold EBITDA Margin for full FY2021 |
14.0% |
50% | ||
| Threshold not achieved |
0% |
| (1) | Award will be interpolated based upon achievement between levels. |
Stock Option Granting Practices
Retirement and Deferred Compensation
| 48 | 2020 PROXY STATEMENT
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Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
The following table sets forth the cash compensation, as well as certain other compensation earned during the fiscal years ended March 31, 2020, 2019 and 2018, for the Company’s Chief Executive Officer, Chief Financial Officer and each of its three other most highly compensated executive officers who received annual compensation in excess of $100,000:
| Name and Principal Position |
Fiscal Year |
Salary ($) |
Bonus ($) |
Stock Award(1) ($) |
Option Awards(2) ($) |
Non-Equity Incentive Plan Compensation(3) ($) |
Change in Pension Value and Non-Qualified Deferred Compensation Earnings(4) ($) |
All Other Compensation(5) ($) |
Total Compensation ($) | ||||||||||||||||||||||||||||||||||||
|
Richard H. Fleming
|
|
2020
|
|
|
92,742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,742
|
| ||||||||||||||||||
|
|
2019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||
|
|
2018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
| |||||||||||||||||||
|
Mark D. Morelli, President and Chief Executive Officer
|
|
2020
|
|
|
730,288
|
|
|
—
|
|
|
1,266,691
|
|
|
633,336
|
|
|
—
|
|
|
8,575
|
|
|
8,625
|
|
|
2,647,516
|
| ||||||||||||||||||
|
|
2019
|
|
|
715,500
|
|
|
—
|
|
|
954,029
|
|
|
477,000
|
|
|
1,431,000
|
|
|
5,283
|
|
|
16,866
|
|
|
3,599,678
|
| |||||||||||||||||||
|
|
2018
|
|
|
675,000
|
|
|
—
|
|
|
787,523
|
|
|
393,747
|
|
|
1,326,510
|
|
|
74
|
|
|
20,220
|
|
|
3,203,074
|
| |||||||||||||||||||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer
|
|
2020
|
|
|
415,403
|
|
|
—
|
|
|
482,356
|
|
|
166,164
|
|
|
375,641
|
|
|
4,525
|
|
|
16,995
|
|
|
1,461,085
|
| ||||||||||||||||||
|
|
2019
|
|
|
403,304
|
|
|
—
|
|
|
322,624
|
|
|
161,323
|
|
|
471,866
|
|
|
6,368
|
|
|
16,983
|
|
|
1,382,468
|
| |||||||||||||||||||
|
|
2018
|
|
|
373,430
|
|
|
—
|
|
|
298,759
|
|
|
149,370
|
|
|
366,932
|
|
|
3,905
|
|
|
14,841
|
|
|
1,207,237
|
| |||||||||||||||||||
|
Peter M. McCormick Vice President—Crane Solutions
|
|
2020
|
|
|
374,529
|
|
|
—
|
|
|
358,874
|
|
|
124,424
|
|
|
231,682
|
|
|
2,003
|
|
|
22,753
|
|
|
1,114,265
|
| ||||||||||||||||||
|
|
2019
|
|
|
366,000
|
|
|
—
|
|
|
219,600
|
|
|
109,795
|
|
|
340,380
|
|
|
24,997
|
|
|
15,786
|
|
|
1,076,558
|
| |||||||||||||||||||
|
|
2018
|
|
|
366,000
|
|
|
—
|
|
|
443,731
|
|
|
121,871
|
|
|
359,632
|
|
|
1,793
|
|
|
10,731
|
|
|
1,303,758
|
| |||||||||||||||||||
|
Kurt F. Wozniak Vice President—Industrial Products
|
|
2020
|
|
|
355,103
|
|
|
—
|
|
|
391,736
|
|
|
118,365
|
|
|
240,461
|
|
|
55,624
|
|
|
17,073
|
|
|
1,178,362
|
| ||||||||||||||||||
|
|
2019
|
|
|
338,193
|
|
|
—
|
|
|
202,915
|
|
|
101,456
|
|
|
372,012
|
|
|
13,221
|
|
|
16,809
|
|
|
1,044,606
|
| |||||||||||||||||||
|
|
2018
|
|
|
319,050
|
|
|
—
|
|
|
182,319
|
|
|
91,154
|
|
|
313,499
|
|
|
23,873
|
|
|
20,411
|
|
|
950,306
|
| |||||||||||||||||||
|
Alan S. Korman Vice President, Corporate Development, General Counsel & CHRO
|
|
2020
|
|
|
357,958
|
|
|
—
|
|
|
364,816
|
|
|
107,384
|
|
|
273,895
|
|
|
3,682
|
|
|
8,642
|
|
|
1,116,377
|
| ||||||||||||||||||
|
|
2019
|
|
|
340,912
|
|
|
—
|
|
|
204,518
|
|
|
102,270
|
|
|
365,628
|
|
|
1,925
|
|
|
7,228
|
|
|
1,022,481
|
| |||||||||||||||||||
|
|
2018
|
|
|
309,920
|
|
|
—
|
|
|
385,969
|
|
|
92,997
|
|
|
304,527
|
|
|
1,757
|
|
|
8,566
|
|
|
1,103,716
|
| |||||||||||||||||||
| (1) | The amounts shown in this column reflect the aggregate grant date fair value for restricted stock units and performance shares granted in the year indicated under our Long Term Incentive Plan. However, for purposes of this table, estimates of forfeitures have been removed. The grant date fair value for each restricted stock unit is equal to the market price of our common stock on the date of grant. The assumptions used in valuing the performance shares are described in Note 15 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2020 filed with the Securities and Exchange Commission on May 27, 2020. The maximum amount that may be earned is equal to target. |
| (2) | The amounts shown in this column reflect the aggregate grant date fair value for non-qualified stock options to purchase our common stock granted in the year indicated under our Long Term Incentive Plan. However, for purposes of this table, estimates of forfeitures have been removed. A Black-Scholes valuation approach has been chosen for these calculations. The assumptions used in valuing these grants are described in Note 15 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2020 filed with the Securities and Exchange Commission on May 27, 2020. |
| (3) | Represents amounts earned under the Annual Incentive Plan. |
| (4) | Represents the aggregate change in actuarial value under the Columbus McKinnon Corporation Monthly Retirement Benefit Plan from April 1, 2019 to March 31, 2020 for Messrs. Wozniak and Korman. Messrs. Fleming, Morelli and Rustowicz are not covered by a Company-sponsored pension plan. Also represents the aggregate change in actuarial value under the Magnetek Flexcare Plus Retirement Pension Plan from April 1, 2019 to March 31, 2020 for Mr. McCormick In addition, the Company sponsors a non-qualified defined contribution plan of deferred compensation. Participation is detailed in the Non-Qualified Deferred Contribution Plan table. |
| (5) | Consists of matching contributions under the Columbus McKinnon Thrift 401(k) plan. For Mr. McCormick, represents matching contributions under the Magnetek 401(k) plan. |
|
2020 PROXY STATEMENT |
51 |
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
The following table sets forth information with respect to plan-based awards granted in fiscal year 2020 to the executives named in the summary compensation table, including awards under the Annual Incentive Plan, and equity awards of stock options, performance shares and restricted stock units:
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2)
|
Estimated Future Payouts Under Equity Incentive Plan Awards(3)
|
All Other Stock Awards: Number of Shares of |
Awards: Number of |
Exercise or Base Price Awards |
Grant Date Fair Value of Stock and |
|||||||||||||||||||||||||||||||||||||||
| Name
|
Grant Date(1)
|
Threshold (#) |
Target (#) |
Maximum (#) |
Threshold (#) |
Target (#) |
Maximum (#)
|
Stock or Units |
Underlying Options |
Share(4) ($) |
Awards(5) ($) |
|||||||||||||||||||||||||||||||||
|
Richard H. Fleming
|
||||||||||||||||||||||||||||||||||||||||||||
|
Mark D. Morelli President and Chief Executive Officer
|
|
387,500
|
|
|
775,000
|
|
|
1,550,000
|
|
|||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
8,407
|
|
|
16,813
|
|
|
25,220
|
|
|
633,346
|
| ||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
16,813
|
(6)
|
|
633,346
|
| ||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
51,158
|
(7)
|
|
35.16
|
|
|
633,336
|
| |||||||||||||||||||||||||||||||||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer
|
|
135,006 |
|
|
270,012 |
|
|
540,024 |
|
|||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
2,206
|
|
|
4,411
|
|
|
6,617
|
|
|
166,162
|
| ||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
4,411
|
(6)
|
|
166,162
|
| ||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
13,422
|
(7)
|
|
35.16
|
|
|
166,164
|
| |||||||||||||||||||||||||||||||||
| 1/20/2020 | 3,844 | (9) | 150,031 | |||||||||||||||||||||||||||||||||||||||||
|
Peter M. McCormick Vice President— Crane Solutions
|
|
93,330
|
|
|
186,660
|
|
|
373,320
|
|
|||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
1,652
|
|
|
3,303
|
|
|
4,955
|
|
|
124,424
|
| ||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
3,303
|
(6)
|
|
124,424
|
| ||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
10,052
|
(7)
|
|
35.16
|
|
|
124,444
|
| |||||||||||||||||||||||||||||||||
|
|
1/20/2020
|
|
|
2,819
|
(9)
|
|
110,026
|
| ||||||||||||||||||||||||||||||||||||
|
Kurt F. Wozniak Vice President— Industrial Products
|
|
97,654
|
|
|
195,307
|
|
|
390,614
|
|
|||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
1,571
|
|
|
3,142
|
|
|
4,713
|
|
|
118,359
|
| ||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
3,142
|
(6)
|
|
118,359
|
| ||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
1,327
|
(8)
|
|
49,988
|
| ||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
9,561
|
(7)
|
|
35.16
|
|
|
118,365
|
| |||||||||||||||||||||||||||||||||
|
|
1/20/2020
|
|
|
2,691
|
(9)
|
|
105,030
|
| ||||||||||||||||||||||||||||||||||||
|
Alan S. Korman Vice President Corporate Development, General Counsel &
CHRO |
|
98,439
|
|
|
196,877
|
|
|
393,754
|
|
|||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
1,426
|
|
|
2,851
|
|
|
4,277
|
|
|
107,397
|
| ||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
2,851
|
(6)
|
|
107,397
|
| ||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
1,327
|
(8)
|
49,988 | ||||||||||||||||||||||||||||||||||||||
|
|
5/20/2019
|
|
|
8,674
|
(7)
|
|
35.16
|
|
|
107,384
|
| |||||||||||||||||||||||||||||||||
|
|
1/20/2020
|
|
|
2,563
|
(9)
|
|
100,034
|
| ||||||||||||||||||||||||||||||||||||
| (1) | The grant date is the date on which the equity awards were approved by our Board of Directors. |
| (2) | Represents the potential payout range under the Annual Incentive Plan discussed above. The final fiscal year 2020 payout can be found in the Summary Compensation Table in the column entitled “Non-Equity Incentive Plan Compensation.” |
| (3) | Represents the potential payout range related to performance shares awarded to NEOs on the grant date, subject to achievement of performance targets. The performance shares are earned based upon the EBITDA margin for the period beginning April 1, 2019 and ended March 31, 2021. Each performance share will be settled in a share of our common stock. |
| (4) | Represents per-share exercise price of the options and is equal to the average of the high and low price on the grant date. |
| (5) | Amounts in this column reflect the aggregate grant date fair value of the equity awards. The grant date fair value for each performance share and restricted stock unit is equal to the average of the high and low market price of our common stock on the date of grant. A Black-Scholes valuation approach has been utilized for valuing the options. The assumptions used in valuing these awards are described in Note 15 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2020 filed with the Securities and Exchange Commission on May 27, 2020. |
| 52 | 2020 PROXY STATEMENT
|
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
| (6) | Represents RSUs granted under the fiscal year 2020 long-term incentive program which vest at a rate of 25% per year beginning one year from the date of grant, except that RSUs may vest earlier in the event of death, disability, retirement, or change-in-control. |
| (7) | Represents the number of shares of our common stock underlying options awarded to the NEOs on the grant date. The options vest at a rate of 25% per year beginning one year from the date of grant, except that options may vest earlier in the event of death, disability, retirement or change-in-control. They expire 10 years from the date of grant, or earlier in the event of death, disability or retirement. The grant date fair value of option awards is $12.38 per share based on the Black Scholes valuation as described in Note 15 to our consolidated financial statements included in our Annual Report in Form 10-K for the year ended March 31, 2020 filed with the Securities and Exchange Commission on May 27, 2020. |
| (8) | Represents RSUs granted under the fiscal year 2020 long-term incentive program which vest at a rate of 33% per year beginning on year from the date of grant, except that RSUs may vest earlier in the event of death, disability, retirement or change-in-control. |
| (9) | Represents RSUs granted under the fiscal year 2020 long-term incentive program that vest 100% on the two year anniversary of the grant date, except that RSUs may vest earlier in the event of death, disability, retirement or change-in-control. |
|
2020 PROXY STATEMENT |
53 |
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information with respect to the executives named in the summary compensation table relating to unexercised stock options, stock that has not vested, and equity incentive plan awards outstanding as of March 31, 2020.
| Option Awards | Restricted Stock Awards | Performance Share Awards | ||||||||||||||||||||||||||||||||||
| Name |
Number of Securities Underlying Unexercised Options Exercisable |
Option Awards Number of Securities Underlying Unexercised Options Unexercisable |
Equity Incentive Plan Number of Securities Underlying Unexercised Unearned Options |
Option Exercise Price ($) |
Option Expiration Date |
Number of or Units of Stock That Have Not Vested |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Units or Other Rights That Not Vested |
Equity Incentive Plan Awards: Market or Payout Value of Units or Other Rights that Not Vested ($) |
|||||||||||||||||||||||||||
|
Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer
|
|
375
|
(1)
|
|
9,375
|
|
||||||||||||||||||||||||||||||
|
|
750
|
(18)
|
|
18,750
|
|
|||||||||||||||||||||||||||||||
|
|
1,500
|
(19)
|
|
37,500
|
|
|||||||||||||||||||||||||||||||
| Mark D. Morelli
President and Chief Executive Officer
|
||||||||||||||||||||||||||||||||||||
|
Gregory P. Rustowicz Vice President Finance and Chief Financial Officer
|
|
10,181
|
(5)
|
|
N/A |
|
|
18.95
|
|
|
5/20/2023
|
|
|
2,266
|
(13)
|
|
56,650
|
|
|
5,909
|
(15)
|
|
147,725
|
| ||||||||||||
|
|
9,330
|
(6)
|
|
27.12
|
|
|
5/19/2024
|
|
|
2,955
|
(10)
|
|
73,875
|
|
|
4,428
|
(17)
|
|
110,700
|
| ||||||||||||||||
|
|
11,716
|
(7)
|
|
24.94
|
|
|
5/18/2025
|
|
|
3,321
|
(11)
|
|
83,025
|
|
|
4,411
|
(16)
|
|
110,275
|
| ||||||||||||||||
|
|
21,249
|
(8)
|
|
7,084
|
(8)
|
|
15.16
|
|
|
5/23/2026
|
|
|
4,411
|
(9)
|
|
110,275
|
|
|||||||||||||||||||
|
|
9,750
|
(2)
|
|
9,750
|
(2)
|
|
24.33
|
|
|
5/22/2027
|
|
|
3,844
|
(12)
|
|
96,100
|
|
|||||||||||||||||||
|
|
2,974
|
(3)
|
|
8,923
|
(3)
|
|
38.70
|
|
|
5/22/2028
|
|
|||||||||||||||||||||||||
|
|
13,422
|
(4)
|
|
35.16
|
|
|
5/20/2029
|
|
||||||||||||||||||||||||||||
|
Peter M. McCormick Vice President— Crane Solutions
|
|
5,161
|
(8)
|
|
N/A |
|
|
15.16
|
|
|
5/23/2026
|
|
|
1,651
|
(13)
|
|
41,275
|
|
|
4,821
|
(15)
|
|
120,525
|
| ||||||||||||
|
|
7,955
|
(2)
|
|
7,955
|
(2)
|
|
24.33
|
|
|
5/22/2027
|
|
|
2,411
|
(10)
|
|
60,275
|
|
|
3,014
|
(17)
|
|
75,350
|
| |||||||||||||
|
|
2,024
|
(3)
|
|
6,073
|
(3)
|
|
38.70
|
|
|
5/22/2028
|
|
|
2,261
|
(11)
|
|
56,525
|
|
|
3,303
|
(16)
|
|
82,575
|
| |||||||||||||
|
|
10,052
|
(4)
|
|
35.16
|
|
|
5/20/2029
|
|
|
3,303
|
(9)
|
|
82,575
|
|
||||||||||||||||||||||
|
|
2,819
|
(12)
|
|
70,475
|
|
|||||||||||||||||||||||||||||||
|
Kurt F. Wozniak Vice President— Industrial Products
|
|
4,490
|
(8)
|
|
N/A |
|
|
15.16
|
|
|
5/23/2026
|
|
|
1,436
|
(13)
|
|
35,900
|
|
|
3,606
|
(15)
|
|
90,150
|
| ||||||||||||
|
|
5,950
|
(2)
|
|
5,950
|
(2)
|
|
24.33
|
|
|
5/22/2027
|
|
|
1,803
|
(10)
|
|
45,075
|
|
|
2,785
|
(17)
|
|
69,625
|
| |||||||||||||
|
|
1,870
|
(3)
|
|
5,612
|
(3)
|
|
38.70
|
|
|
5/22/2028
|
|
|
2,089
|
(11)
|
|
52,225
|
|
|
3,142
|
(16)
|
|
78,550
|
| |||||||||||||
|
|
9,561
|
(4)
|
|
35.16
|
|
|
5/20/2029
|
|
|
3,142
|
(9)
|
|
78,550
|
|
||||||||||||||||||||||
|
|
1,327
|
(14)
|
|
33,175
|
|
|||||||||||||||||||||||||||||||
|
|
2,691
|
(12)
|
|
67,275
|
|
|||||||||||||||||||||||||||||||
|
Alan S. Korman Vice President— Corporate Development, General Counsel & CHRO
|
|
4,386
|
(6)
|
|
N/A |
|
|
27.12
|
|
|
5/19/2024
|
|
|
1,451
|
(13)
|
|
36,275
|
|
|
3,678
|
(15)
|
|
91,950
|
| ||||||||||||
|
|
5,609
|
(7)
|
|
24.94
|
|
|
5/18/2025
|
|
|
1,839
|
(10)
|
|
45,975
|
|
|
2,807
|
(17)
|
|
70,175
|
| ||||||||||||||||
|
|
11,605
|
(8)
|
|
4,535
|
(8)
|
|
15.16
|
|
|
5/23/2026
|
|
|
2,106
|
(11)
|
|
52,650
|
|
|
2,851
|
(16)
|
|
71,275
|
| |||||||||||||
|
|
6,069
|
(2)
|
|
6,069
|
(2)
|
|
24.33
|
|
|
5/22/2027
|
|
|
2,851
|
(9)
|
|
71,275
|
|
|||||||||||||||||||
|
|
1,885
|
(3)
|
|
5,657
|
(3)
|
|
38.70
|
|
|
5/22/2028
|
|
|
1,327
|
(14)
|
|
33,175
|
|
|||||||||||||||||||
|
|
8,674
|
(4)
|
|
35.16
|
|
|
5/20/2029
|
|
|
2,563
|
(12)
|
|
64,075
|
|
||||||||||||||||||||||
| (1) | These RSUs were granted July 24, 2017 and vest 50% on the first anniversary of the grant date, and 25% per year on the second and third anniversaries of the grant date. |
| (2) | These options were granted May 22, 2017 and vest 25% per year beginning May 22, 2018. |
| (3) | These options were granted May 22, 2018 and vest 25% per year beginning May 22, 2019. |
| (4) | These options were granted May 20, 2019 and vest 25% per year beginning May 20, 2020. |
| (5) | These options were granted on May 20, 2013 and vest 25% per year beginning May 20, 2014. |
| (6) | These options were granted on May 19, 2014 and vest 25% per year beginning May 19, 2015. |
| 54 | 2020 PROXY STATEMENT
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| (7) | These options were granted on May 18, 2015 and vest 25% per year beginning May 18, 2016. |
| (8) | These options were granted on May 23, 2016 and vest 25% per year beginning May 23, 2017. |
| (9) | These RSUs were granted May 20, 2019 and vest 25% per year beginning May 20, 2020. |
| (10) | These RSUs were granted May 22, 2017 and vest 25% per year beginning May 22, 2018. |
| (11) | These RSUs were granted May 22, 2018 and vest 25% per year beginning May 22, 2019. |
| (12) | These RSUs were granted January 20, 2020 and vest 100% on the second anniversary of the grant date. |
| (13) | These RSUs were granted July 18, 2016 and vest 25% per year beginning May 18, 2017. |
| (14) | These RSUs were granted May 20, 2019 and vest 33% per year beginning May 20, 2020. |
| (15) | These performance RSUs were granted May 22, 2017 and vest 100% on the third anniversary of the grant, May 22, 2020. The award earned will be adjusted effective March 31, 2019 based upon our consolidated revenue performance for the two year period ended March 31, 2019. |
| (16) | These performance RSUs were granted May 20, 2019 and vest 100% on the third anniversary of the grant, May 20, 2022. The actual award earned will be adjusted effective March 31, 2021 based upon our EBITDA margin for the full year ended March 31, 2021. |
| (17) | These performance RSUs were granted May 22, 2018 and vest 100% on the second anniversary of the grant, May 22, 2020. The award earned will be adjusted effective March 31, 2020 based upon our EBITDA margin for the full year ended March 31, 2020. |
| (18) | These RSUs were granted July 23, 2018 and vest 50% on the first anniversary of the grant date, and 25% per year on the second and third anniversaries of the grant date. |
| (19) | These RSUs were granted July 22, 2019 and vest 50% on the first anniversary of the grant date, and 25% per year on the second and third anniversaries of the grant date. |
Options Exercised and Stock Vested
The following table sets forth information with respect to the executives named in the summary compensation table relating to the exercise of stock options, stock appreciation rights and similar rights, and the vesting of stock in connection therewith, in fiscal year 2020:
| Option Awards | Stock Awards | |||||||||||||||||||||
| Name |
Number of Shares on Exercise |
Value on Exercise(1) ($) |
Number of Shares on Vesting |
Value on Vesting(2) ($) | ||||||||||||||||||
| Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer |
— | — |
|
— | — | |||||||||||||||||
| Mark D. Morelli President and Chief Executive Officer |
59,753 | 731,116 |
|
7,226 | 172,067 | |||||||||||||||||
| Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
11,942 | 305,789 |
|
5,956 | 139,685 | |||||||||||||||||
| Peter M. McCormick Vice President—Crane Solutions |
15,481 | 367,706 |
|
6,345 | 162,168 | |||||||||||||||||
| Kurt F. Wozniak Vice President—Industrial Products |
6,989 | 146,668 |
|
3,963 | 93,063 | |||||||||||||||||
| Alan S. Korman Vice President Corporate Development, General Counsel & CHRO |
7,325 | 161,786 |
|
6,304 | 155,698 | |||||||||||||||||
| (1) | Represents the difference between the option exercise price and the average of the high and low market prices of our common stock on the date of exercise as quoted on Nasdaq multiplied by the number of shares acquired. |
| (2) | Represents the average of the high and low market price of our common stock on the vesting date multiplied by the number of shares acquired. |
|
2020 PROXY STATEMENT |
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COMPENSATION DISCUSSION AND ANALYSIS
The following table sets forth with respect to each of our plans that provide retirement benefits to our NEOs, (i) the years of credited service of each of the executives named in the summary compensation table, (ii) the present value of his or her accumulated benefit, and (iii) payments received by him or her during fiscal year 2020:
|
Name |
Plan Name |
Number of Years of Credited Service(1) |
Present ($) |
Payments During Last Fiscal Year ($) | |||||||||||||
| Richard H. Fleming Chairman of the Board and Interim President and Chief Executive Officer |
N/A(3) | — | — | — | |||||||||||||
| Mark D. Morelli President and Chief Executive Officer |
N/A(3) | — | — | — | |||||||||||||
| Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
N/A(3) | — | — | — | |||||||||||||
| Peter M. McCormick Vice President—Crane Solutions |
Magnetek FlexCare Plus Retirement Pension Plan | 10.04 | (4) | 133,593 | — | ||||||||||||
| Kurt F. Wozniak, Vice President—Industrial Products |
Columbus McKinnon Corporation Monthly Retirement Benefit Plan | 11.58 | (4) | 337,197 | — | ||||||||||||
| Alan S. Korman Vice President Corporate Development, General Counsel & CHRO |
Columbus McKinnon Corporation Monthly Retirement Benefit Plan | 0.17 | (4) | 9,164 | — | ||||||||||||
| (1) | Years of credited service determined as of March 31, 2020. For more information about our retirement program see “Elements of Our Compensation Program for Named Executive Officers” in this document. |
| (2) | The present value of accumulated benefit under the Columbus McKinnon Corporation Monthly Benefit Plan is calculated as of March 31, 2020 using (i) a discount rate of 3.24% for the Columbus McKinnon Corporation Monthly Retirement Plan and 3.25% for the Magnetek Retirement Plan, (ii) the Pri-2012 mortality tables and generational projection using Scale MP-2019. |
| (3) | Messrs. Fleming, Morelli and Rustowicz were not covered by a Company sponsored Pension Plan. |
| (4) | Mr. Wozniak and Mr. Korman have an accrued benefit under the Columbus McKinnon Corporation Monthly Retirement Benefit Plan that was frozen at March 31, 2012. Mr. McCormick has an accrued benefit under the Magnetek Retirement Plan that was frozen at June 30, 2003. |
| 56 | 2020 PROXY STATEMENT
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Non-Qualified Deferred Compensation
The Company maintains a Non-Qualified Deferred Compensation Plan (the “NQDC”) under which eligible participants (including our Directors and U.S.-based NEOs) may elect to defer a portion of their cash compensation. Payment of balances will occur in accordance with Internal Revenue Code Section 409A requirements. For more information about our retirement program see “Elements of Our Compensation Program for Named Executive Officers” in this document.
|
Name |
Executive Contributions in fiscal year 2020 |
Company Contributions in fiscal year 2020 |
Aggregate earnings in fiscal year 2020 |
Aggregate withdrawals / |
Aggregate balance at 3/31/2020 | ||||||||||||||||||||
| Richard H. Fleming(1) Chairman of the Board and Interim President and Chief Executive Officer |
— | — | — | — | — | ||||||||||||||||||||
| Mark D. Morelli President and Chief Executive Officer |
93,817 | 28,389 | 541 | 115,085 | 123,962 | ||||||||||||||||||||
| Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
15,592 | 13,430 | (2,674 | ) | 21,040 | 99,819 | |||||||||||||||||||
| Peter M. McCormick(1) Vice President—Crane Solutions |
— | — | — | — | — | ||||||||||||||||||||
| Kurt F. Wozniak Vice President—Industrial Products |
11,395 | 11,486 | 1,173 | 18,721 | 39,005 | ||||||||||||||||||||
| Alan S. Korman Vice President Corporate Development, General Counsel & CHRO |
— | 3,920 | (4,913 | ) | — | 18,498 | |||||||||||||||||||
| (1) | Not a participant in the NQDC plan. |
|
2020 PROXY STATEMENT |
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Other Potential Post-Employment Payments
It is our policy to provide severance benefits to each of our U.S.-based full-time salaried associates and hourly associates not covered by a collective bargaining agreement who involuntarily lose their positions without cause. Eligible associates who sign a release generally receive one week of base salary at the rate then in effect for each full year of continuous service (with any fractions being rounded up). The following table sets forth the gross amount each NEO would receive under various termination scenarios described above using the following assumptions:
| • | Termination of employment on March 31, 2020 |
| • | Exercise of all options and vesting of all restricted stock based on the closing market price of $25.00 per share of our common stock on March 31, 2020 |
|
Name |
Voluntary Termination ($) |
Retirement ($) |
Involuntary Termination($) |
Termination in with Change in Control ($) |
Death ($) |
Change in Control ($) | ||||||||||||||||||||||||
| Richard H. Fleming |
— | — | — | — | — | — | ||||||||||||||||||||||||
| Mark D. Morelli President and Chief Executive Officer |
— | — | — | — | — | — | ||||||||||||||||||||||||
| Gregory P. Rustowicz Vice President Finance and Chief Financial Officer |
685,098 | (1) | 1,736,831 | (2) | 756,994 | (3) | 3,955,725 | (4) | 2,152,831 | (5) | — | (6) | ||||||||||||||||||
| Peter M. McCormick Vice President—Crane Solutions |
1,066,831 | (1) | 1,812,732 | (2) | 1,260,670 | (3) | 3,780,682 | (4) | 2,118,000 | (5) | — | (6) | ||||||||||||||||||
| Kurt F. Wozniak Vice President—Industrial Products |
1,508,556 | (1) | 2,219,188 | (2) | 1,651,963 | (3) | 4,352,580 | (4) | 2,395,670 | (5) | — | (6) | ||||||||||||||||||
| Alan S. Korman Vice President Corporate Development, General Counsel & CHRO |
288,654 | (1) | 1,026,660 | (2) | 357,492 | (3) | 2,856,228 | (4) | 1,380,165 | (5) | — | (6) | ||||||||||||||||||
| (1) | Includes (i) the value of vested stock options, (ii) accrued vacation through the date of termination, (iii) the vested portion of his 401(k) Plan account, (iv) any vested benefits under our Pension Plan and (v) any vested benefits under our ESOP. In addition, each NEO would be entitled to receive accrued salary through the date of termination. |
| (2) | Includes (i) the value of vested stock options, (ii) accrued vacation through the date of termination, (iii) the vested portion of his 401(k) Plan account, (iv) any vested benefits under our Pension Plan and (v) any vested benefits under our ESOP, (vi) unless otherwise provided in an equity award agreement, the value of all options, restricted shares or units and performance shares or units which become fully vested and (vii) awards under the Annual Incentive Plan earned in fiscal year 2020 and paid in fiscal year 2021. In addition, each NEO would be entitled to receive accrued salary through the date of termination. |
| (3) | Includes (i) severance, (ii) the value of vested stock options, (iii) accrued vacation through the date of termination, (iv) the vested portion of his 401(k) Plan account, (v) any vested benefits under our Pension Plan and (vi) any vested benefits under our ESOP. In addition, each NEO would be entitled to receive accrued salary through the date of termination. |
| (4) | Includes (i) termination payments under the change-in-control agreements (up to the maximum permitted), (ii) the value of vested stock options, (iii) accrued vacation through the date of termination, (iv) the vested portion of his or her 401(k) Plan account, (v) any vested benefits under our Pension Plan and (vi) any vested benefits under our ESOP, (vii) awards under the Annual Incentive Plan earned in fiscal year 2020 and paid in fiscal year 2021. Termination payments under the change-in-control agreements include (i) a lump sum severance payment equal to three times the sum of (a) annual salary and (b) the greater of (1) the annual target bonus under the Annual Incentive Plan in effect on the date of termination and (2) the annual target bonus under the Annual Incentive Plan in effect immediately prior to the change-in-control, (ii) a lump sum payment, in cash, equal to thirty-six (36) times the monthly cost of continued coverage if COBRA is elected under the |
| 58 | 2020 PROXY STATEMENT
|
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| company group health plans, (iii) a lump sum payment equal to the actuarial equivalent of the pension payment which would have accrued under our tax-qualified retirement plans had he continued to be employed by us for three additional years, (iv) unless otherwise provided in an equity award agreement, the value of all options, restricted shares or units and performance shares or units which become fully vested. In addition, each NEO would be entitled to receive accrued salary through the date of termination. |
| (5) | Includes (i) Company provided group term life insurance benefits, (ii) the value of vested stock options, (iii) accrued vacation through the date of termination, (iv) the vested portion of his or her 401(k) Plan account, (v) any vested benefits under our Pension Plan (vi) any vested benefits under our ESOP, (vii) unless otherwise provided in an equity award agreement, the value of all stock options not previously vested, restricted shares or units and earned performance shares or units which become fully vested and (viii) awards under the Annual Incentive Plan earned in fiscal year 2020 and paid in fiscal year 2021. In addition, accrued salary through the date of termination would be paid out. |
| (6) | No payments or awards are provided unless restricted shares and options held by the NEOs are not assumed by the successor entity. In the event that the successor entity does not assume the restricted shares and options, all options and earned restricted shares would be vested and payable to the NEOs. |
Equity Compensation Plan Information
The following table provides information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of March 31, 2020, including the Restricted Stock Plan, Omnibus Plan, Non-Qualified Plan and ISO Plan:
|
Plan Category |
Number of Securities to be Issued upon Exercise of Outstanding Warrants and Rights |
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($) |
Number of Securities Remaining for Future Issuance under Equity Compensation Plans (excluding securities | ||||||||||||
| Equity compensation plans approved by security holders |
526,794 | 26.53 | 3,030,951 | ||||||||||||
| Equity compensation plans not approved by security holders |
— | — | — | ||||||||||||
| Total |
526,794 | 26.53 | 3,030,951 | ||||||||||||
|
2020 PROXY STATEMENT |
59 |
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WE WILL PROVIDE WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS SOLICITED, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF OUR ANNUAL REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED MARCH 31, 2020, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO.
Such written request should be directed to Columbus McKinnon Corporation, 205 Crosspoint Parkway, Buffalo, New York 14068, Attention: Secretary. Each such request must set forth a good faith representation that, as of June 1, 2020 the person making the request was a beneficial owner of securities entitled to vote at the Annual Meeting. The accompanying Notice and this Proxy Statement are sent by order of our Board of Directors.
ALAN S. KORMAN
Secretary
Dated: June 10, 2020
| 60 | 2020 PROXY STATEMENT
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ANNUAL MEETING OF COLUMBUS MCKINNON CORPORATION Date: July 20, 2020 Time: 10:00 a.m., Central Time Place: Four Seasons Hotel Chicago, 120 East Delaware Place, Chicago, Illinois Please make your marks like this: Use dark black pencil or pen only Board of Directors Recommends a Vote FOR proposals 1, 2, and 3. 1: To elect nine Directors to hold ofce until the 2021 Annual Meeting and until their successors have been elected and qualied. For Withhold Directors Recommend 01 Richard H. Fleming 02 David J. Wilson 03 Nicholas T. Pinchuk 04 Liam G. McCarthy 05 R. Scott Trumbull 06 Heath A. Mitts 07 Kathryn V. Roedel 08 Aziz Aghili 09 Jeanne Beliveau-Dunn For For Against Abstain 2: To ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending March 31, 2021. For 3: To conduct a shareholder advisory vote on the compensation of our named executive officers. 4: To consider and act upon any other matters which may properly come before the meeting or any adjournment thereof. Authorized Signatures - This section must be completed for your Instructions to be executed. Please Sign Here Please Date Above Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy. Please separate carefully at the perforation and return just this portion in the envelope provided. Annual Meeting of Columbus McKinnon Corporation to be held on Monday, July 20, 2020 for Holders as of June 1, 2020 This proxy is being solicited on behalf of the Board of Directors INTERNET TELEPHONE 844-926-2035 VOTED BY: Go To www.proxypush.com/CMCO Cast your vote online. View Meeting Documents. OR Use any touch-tone telephone. Have your Proxy Card/Voting Instruction Form ready. Follow the simple recorded instructions. MAIL OR Mark, sign and date your Proxy Card/Voting Instruction Form. Detach your Proxy Card/Voting Instruction Form. Return your Proxy Card/Voting Instruction Form in the postage-paid envelope provided. The undersigned hereby appoints David J. Wilson and Gregory P. Rustowicz, and each or either of them, Proxies, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Columbus McKinnon Corporation which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN ITEM 1 AND FOR THE PROPOSALS IN ITEMS 2 AND 3 AND AUTHORITY WILL BE DEEMED GRANTED UNDER ITEM 4. All votes for ESOP participants must be received by 11:59 P.M., Eastern Time July 15, 2020. PROXY TABULATOR FOR COLUMBUS MCKINNON CORPORATION P.O. BOX 8016 CARY, NC 27512-9903
Table of Contents
Proxy Columbus McKinnon Corporation Annual Meeting of Stockholders July 20, 2020 at 10:00 a.m. Central Time This Proxy is Solicited on Behalf of the Board of Directors The undersigned appoints David J. Wilson and Gregory P. Rustowicz (the Named Proxies) and each of them as proxies for the undersigned, with full power of substitution, to vote the shares of common stock of Columbus McKinnon Corporation, a New York corporation (the Company), the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company to be held at the Four Seasons Hotel Chicago, 120 East Delaware Place, Chicago, Illinois, on Monday, July 20, 2020 at 10:00 a.m. CDT and all adjournments thereof. The purpose of the Annual Meeting is to take action on the following: 1. To elect nine Directors to hold office until the 2021 Annual Meeting and until their successors have been elected and qualified. 2. To ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending March 31, 2021. 3. To conduct a shareholder advisory vote on the compensation of our named executive officers. The nine directors up for re-election are: Richard H. Fleming, David J. Wilson, Nicholas T. Pinchuk, Liam G. McCarthy, R. Scott Trumbull, Heath A. Mitts, Kathryn V. Roedel, Aziz Aghili and Jeanne Beliveau-Dunn. The Board of Directors of the Company recommends a vote FOR all nominees for director and FOR each proposal. This proxy, when properly executed, will be voted in the manner directed herein. If no direction is made, this proxy will be voted FOR all nominees for director and FOR each proposal. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the Annual Meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors recommendation. The Named Proxies cannot vote your shares unless you sign and return this card. To attend the meeting and vote your shares in person, please mark this box. IMPORTANT INFORMATION REGARDING MEETING LOCATION We intend to hold our annual meeting in person, however, we are actively monitoring the COVID-19 pandemic and are sensitive to the public health and travel concerns of our shareholders, employees and directors and the restrictions in protocols that federal, state and local governments may impose on in-person meetings. In the event it is not possible or advisable to hold our annual meeting in person, we will issue a press release, which will also be filed with the Securities and Exchange Commission announcing alternative arrangements for the meeting, which may include holding the meeting solely by means of remote communication as promptly as practicable. Please monitor our website at investors.columbusmckinnon.com and check the website in the days leading up to the meeting date. Please separate carefully at the perforation and return just this portion in the envelope provided.