UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
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Securities Exchange Act of 1934
(Amendment No. )
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Harsco Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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 WE
HELP BUILD THE WORLD Camp Hill, Pennsylvania
April 16, 2013
Additional Information to Inform
2013 Advisory Vote on
Named Executive Officer Compensation
Security holders of Harsco Corporation (the “Company”) should read the
Company’s definitive proxy statement for its 2013 Annual Meeting of
Stockholders because it contains important information. Security holders may
obtain the Company’s 2013 definitive proxy statement and 2012 Annual
Report for free at www.harsco.com. This document may be deemed “soliciting material”
within the meaning of the rules and regulations
of the Securities and Exchange Commission promulgated under the Securities Exchange
Act of 1934, as amended. |
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WE HELP BUILD THE WORLD
Compensation Highlights
Our compensation programs reflect our pay-for-performance (“P4P”)
philosophy: Our annual incentive program (“AIP”) ties annual cash
incentives to the achievement of pre-established Economic Value Added
(“EVA”®) performance goals, thereby linking pay directly to the creation of
stockholder value
In 2012, we increased the percentage of performance-based equity awards under
our long-term incentive program (“LTIP”) from 50% to
approximately 70% through the use of stock appreciation rights (“SARs”).
SARs are inherently performance-based awards as their value is directly tied
to the performance of the Company’s stock price
ISS,
Glass
Lewis
&
Co.
and
Egan-Jones
ALL
report
that,
for
2012,
the
Company’s
pay
was
aligned
with
corporate performance
Under our new CEO, our management team continues to focus our path toward
improved performance and stockholder returns
While we have taken reasonable steps to recruit and retain those
executives who we
believe will be key to the improved success of our Company, the average level of
total direct compensation for 2012 remained below market medians, further
reflecting the link between pay and performance |
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WE HELP BUILD THE WORLD
ISS and Egan-Jones
Recommend a Vote “FOR”
Say-on-Pay
Advisory Firm
Recommendation on
Proposal 3
P4P Comments
ISS
Yes
•
P4P quantitative screen resulted
in a “low”
level of concern
•
Overall, ISS found “no significant
issues
of
concern”
regarding
our
executive compensation programs
and practices
Egan-Jones
Yes
•
No significant comments
Glass Lewis
No
•
Report notes improved P4P score
and states “the Company has
adequately aligned executive pay
and corporate performance”
•
Specific issues raised with regard
to the change in control provisions
for certain equity awards,* certain
one-time payments to a departing
executive and changes made to
the Company’s LTIP
* See Slide 6 for a summary of the changes being made to the Company’s equity
awards in 2013 |
 Harsco
Pay and Performance are Aligned We have taken significant steps to ensure that
compensation is commensurate with
performance,
which
ALL
THREE
proxy
advisors
acknowledge
Realizable compensation in 2012 was below target levels, consistent with our
2012 corporate-level performance
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WE HELP BUILD THE WORLD |
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WE HELP BUILD THE WORLD
We Continue to Strengthen Our Executive
Leadership Team
As part of our renewed focus on optimizing financial and operational
performance, we have sought talented new executive officers to lead the
Company’s transformation
We experienced several executive officer transitions during 2012:
Sal Fazzolari departed from his position as Chairman, President and CEO in
February 2012 after serving the Company for more than 30 years
Patrick
Decker
commenced
serving
as
our
new
President
and
CEO
in
September
2012
Steve Schnoor departed from his position as SVP, CFO and Treasurer in November
2012 after serving the Company for more than 24 years
Separation pay packages for Messrs. Fazzolari and Schnoor reflect market
practices:
We do not maintain employment agreements with our executives
Separation pay packages were developed with the assistance of the Management
Development and Compensation Committee’s independent compensation
consultant (Pearl
Meyer
&
Partners)
to
ensure
alignment
with
current
market
practices
Cash severance amounts were established at or below market levels while still
recognizing each executive’s significant tenure with the Company
No payout for performance-based LTIP awards that were not earned
|
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WE HELP BUILD THE WORLD
New CIC Acceleration Approach Under
2013 Equity and Incentive Compensation Plan
Based on a strong recommendation from our new CEO, the Management
Development and Compensation Committee has determined that all executive
equity
awards
going
forward
will
contain
“double-trigger”
change
in
control
(“CIC”) accelerated vesting provisions, as permitted under the
Company’s new 2013 Equity and Incentive Compensation Plan and
in-line with current market practice
This new approach to equity awards aligns with the
“double-trigger” provisions already contained in CIC severance
agreements in place with each of our executive officers
A double-trigger provision generally functions so that, if equity awards are
continued, assumed
or
replaced
after
a
CIC,
a
participant
must
experience
a
qualifying
termination
of
employment
within
a
certain
period
of
time
after
the
CIC
to
vest
in
those
awards
on
an
accelerated basis
The use of double-trigger CIC provisions helps ensure that if a CIC were to be
contemplated, our executive officers involved in deliberations or
negotiations would be positioned to consider as objectively as possible
whether the CIC transaction would be in our
and
our
stockholders’
best
interests,
rather
than
being
motivated
solely
by
compensation interests |
 2012 SAR
Grants Link Executive Pay With Performance (Namely, Stock Price
Appreciation) Prior to 2012, only 50% of LTIP awards were
performance-based, and those awards most often utilized the same
performance metric as the AIP (EVA achievement) For 2012, approximately
70% of the LTIP award opportunity was granted in the form of SARs, which are
designed to deliver value to our executives only to the extent value is being created
for
stockholders,
as
hypothetically
illustrated
in
the
following
table:
This
focus
on
sustained
stock
price
improvement
aligns
well
with
our
stockholders’
interests
and complements the AIP’s focus on EVA achievement
Base Price = $23.73
Stock Price
Realized Value
Grant Date
(3/16/12)
12/31/12
4/03/13
Hypothetical Stock Price Point
$23.73
$23.50
$23.41
$23.73
$25.00
$30.00
$35.00
$0.00
$0.00
$0.00
$0.00
$1.27
$6.27
$11.27
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WE HELP BUILD THE WORLD |