POLARIS INC. - DEF 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Thank you for your investment in Polaris. It is a privilege to lead this team of 14,000 dedicated Polaris employees in creating sustainable value for our shareholders. We are committed to long-term progress for our customers, the environment and all stakeholders, and our focus on execution enabled us to drive key actions in 2019.

We refreshed the Polaris brand and launched Think Outside, framing our story in a way that respects our rich history and connects us with our current consumers while inviting new ones into the Polaris community. Over the next decade, we aim to grow our Polaris customer base by 50%. We will bring current powersports consumers over to the Polaris brand, use Polaris Adventures to introduce new customers to the sport, and, through our diversity outreach efforts, attract a new class of people to the industry for family fun, entertainment, and work. Our refreshed brand and Think Outside will help us accomplish that goal.

Winning the competitive battle requires the right leaders, which led us to promote Polaris veterans Steve Menneto and Mike Dougherty to lead Off Road Vehicles (ORV) and Motorcycles, respectively. I am confident these two seasoned executives will drive positive change for customers and shareholders.

We have invested substantially to support our businesses for long-term growth, partially financed by savings from our strategic sourcing initiatives. We invested to enhance our digital capabilities, which included hiring Vic Koelsch, our first Chief Digital Officer and advancing exciting customer solutions through our LaunchPad innovation lab. We continue to invest heavily in product quality and safety, while simultaneously increasing investment in R&D, which drives customer centric innovation like the Indian Challenger, Factory Choice vehicle customization, Ride Command Group Ride, and our new AutoDrive Slingshot.

I am proud of the work our team did in 2019, but more excited about the foundation they laid for better results going forward. By effectively countering tariffs, increased competition, regulatory complexity, and rapidly changing technology, we are well positioned for 2020 and I am confident that we can deliver on our goals and continue to drive strong returns over the long term.

We hope that we can count on your continued support as an investor or customer—ideally both—and invite you to attend our annual meeting on April 30^thor give us feedback any time of year.

On behalf of the entire Board of Directors, thank you for your investment in Polaris. As stewards of your capital, we take seriously our commitment to oversee the company’s strategy and to deliver long-term sustainable value for our shareholders. I want to highlight a few important steps we took in 2019 towards our strategic goals.

First, we heightened our focus on risk oversight as our business becomes more complex. In addition to stewarding the Company’s long-term strategy, the Board provides oversight of product quality and safety, cybersecurity, global trade, environmental, social and governance, and legal and regulatory matters. We also enhanced our Enterprise Risk Management process and charged Board committees and executive officers with accountability for key risks coming out of our ERM process. We encourage you to read about these changes in the pages that follow.

Second, we launched Geared for Good to provide centralized, strategic senior-level oversight of the Company’s corporate social responsibility efforts. Geared for Good is now managed by a team of senior executives, led by our General Counsel, Lucy Clark Dougherty. The team is focusing on the areas that are most important to our stakeholders—safety and ethics, our people, customer loyalty, and environmental sustainability. Our Corporate Governance and Nominating Committee is also taking an active role in guiding the company’s Geared for Good effort.

Third, with input from our ongoing engagement with shareholders, we continued to evolve our compensation practices. In consultation with the Compensation Committee, Scott and his team made significant adjustments to the Company’s equity compensation program to reduce the dilution this plan has on shareholders. We are confident that we are now appropriately calibrated for the longer term.

Finally, we continued to refresh our Board with the addition of Gwynne Shotwell, who contributes significant technical, product safety and operational expertise. Your Board is now 30% female, has an average age of only 58 years, and four of the nine independent directors were added in the past five years. More importantly, we have a highly dedicated and thoughtful Board, and with the diversity of backgrounds and the mix of fresh thinking and experience, we think we have the right Board to oversee the Company’s long-term strategy.

We know there is more work ahead, but we are proud of the progress in 2019. We remain confident that Scott and his team—together with your refreshed, highly engaged, and diverse Board—are positioning Polaris for long-term success.

We are sincerely grateful for your continued investment in Polaris and hope you will give us your voting support on the items described in this proxy. Your vote and your feedback are important to us. On behalf of our Board of Directors, thank you again for your confidence, support and investment in Polaris.

Polaris Inc. (Polaris or the Company) will hold its 2020 Annual Meeting of Shareholders (the Annual Meeting) on Thursday, April 30, 2020 at 9:00 a.m. Central Time. The Annual Meeting will be completely virtual. You may attend the meeting, submit questions, and vote your shares electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/PII2020. You will need the 16-digit control number that is printed in the box marked by the arrow on your Notice of Internet Availability of Proxy Materials or proxy card to enter the Annual Meeting. We recommend that you log in at least 15 minutes before the meeting to ensure you are logged in when the meeting starts. The proxy materials were either made available to you over the Internet or mailed to you beginning on or about March 13, 2020. At the meeting, our shareholders will be asked to:

Only shareholders of record at the close of business on March 2, 2020 may vote at the Annual Meeting or any adjournment thereof.

Our Proxy Statement for the 2020 Annual Meeting of Shareholders and our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 are available at https://materials.proxyvote.com/731068.

Proxy Statement Summary

2020 Annual Meeting of Shareholders


Date and Time	Place	Proxy Mailing Date	Record Date
Thursday, April 30, 2020	www.virtualshareholdermeeting.com/PII2020	March 13, 2020	March 2, 2020
9:00 a.m. Central Time

Voting Roadmap

	Proposals	Board Recommendation	Details
Proposal 1 –	Elect three Class II directors for three-year terms ending in 2023	FOR	Page 16
Proposal 2 –	Approve the Amended and Restated 2007 Omnibus Incentive Plan to increase the number of shares of our common stock authorized for awards from 24,325,000 to 27,775,000	FOR	Page 51
Proposal 3 –	Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2020	FOR	Page 57
Proposal 4 –	Advisory vote to approve the compensation of our Named Executive Officers	FOR	Page 60

HOW TO VOTE YOUR SHARES
	INTERNET Go to http://www.proxyvote.com and follow the instructions (have the proxy card or internet notice in hand when you access the website)	TELEPHONE Dial 1-800-690-6903 and follow the instructions (have the proxy card in hand when you call)	MAIL If you received paper copies of our proxy materials, mark your selection on the enclosed proxy card, date and sign your name, and promptly mail the proxy card in the postage-paid envelope provided

Please see page 65 for proxy voting deadlines.

Director Nominees and Continuing Directors

Name	Age	Director Since	Independent	Audit Committee	Compensation Committee	Corporate Governance and Nominating Committee	Technology Committee
Nominees for election at the 2020 Annual Meeting (Class II Term Ending 2023)
George W. Bilicic*	56	2017	Yes	X		X	X
Gary E. Hendrickson	63	2011	Yes			X
Gwenne A. Henricks	62	2015	Yes	X			X

Directors with terms expiring in 2022 (Class I)
Bernd F. Kessler	61	2010	Yes			X	X
Lawrence D. Kingsley	57	2016	Yes		X		X
Gwynne E. Shotwell	55	2019	Yes	X			X
Scott W. Wine	52	2008	No				X

Directors with terms expiring 2021 (Class III)
Annette K. Clayton	56	2003	Yes		X
Kevin M. Farr*	62	2013	Yes				X
John P. Wiehoff⁽¹⁾	58	2007	Yes		X

Member

Chair

Financial Experts

(1)

Lead Independent Director

Business and Strategic Overview

At Polaris, we remain committed to being a customer-centric highly efficient growth company. Our senior management team, with oversight from our Board of Directors, has developed a clear vision and strategy for our long-term growth.

2019 Performance Highlights

Our performance highlights from 2019 demonstrate how we continue to successfully execute against our strategy.

Corporate Governance Highlights

Our commitment to good corporate governance stems from our belief that a strong governance framework creates long-term value for our shareholders, strengthens Board and management accountability, and builds trust in Polaris and its brands.

Corporate Governance – What We Do

	Independent and diverse Board
	Majority voting standard
	Executive sessions of independent directors before and/or after each Board meeting
	Excellent meeting attendance
	Substantive annual Board and committee self-evaluations
	Active shareholder engagement program
	Board oversight of risk management
	Age limit for directors (72)
	Non-employee director stock ownership requirements
	Robust Code of Conduct applicable to all directors and executives
	“Clawback” policy for performance-based compensation

Directors Have a Diverse Range of Qualifications and Skills

•	Accounting/Financial Expertise	•	Industry Focus	•	Product Quality and Safety
•	Executive Leadership	•	Innovation/Technology	•	Regulatory/Compliance
•	Global Experience	•	Legal Expertise	•	Risk Management
•	Governance Expertise	•	Operational Expertise	•	Strategic/Corporate Development Experience

Active Shareholder Engagement Program

Our Board is committed to fostering direct and transparent engagements with our shareholders on many topics, including those related to executive compensation, corporate governance, and environmental and social issues. To that end, our Board has worked with management to develop an annual shareholder engagement process. These engagement efforts take place throughout the year involving members of our Board, senior management, and shareholder representatives. In 2019, Polaris reached out to shareholders representing approximately 60% of our outstanding shares, and members of our Board and management team met with shareholders owning approximately 27% of the Company. One of our directors participated in 90% of the shareholder calls.

Executive Compensation Highlights

Compensation Philosophy

Our executive compensation philosophy aligns executive compensation decisions with our desired business direction, strategy and performance. The strategy and priorities of our compensation philosophy are the following:

Compensation Program Design

Our executive compensation program is based upon our compensation philosophy and is designed to incent our executives to pursue strategies and execute priorities that promote growth and deliver strong returns to shareholders. Below we illustrate the key components of our compensation program and the target total direct compensation.

Corporate Responsibility


		Launched in 2019, Think Outside is our call for customers to experience the outdoors and discover new possibilities. Through our vehicles, products, services and experiences, we connect people to a world of adventure and awe. “Think Outside” inspires our employees, suppliers and dealers to continue to invent and improve outdoor work and play.

		Driven by innovation, integrity, and accountability, we continually tune to be good stewards for the industry, our riders, and the outdoors.

	To drive accountability and corporate-wide focus, in 2017, we publicly announced four key corporate responsibility goals:



	2019 was the inaugural year of our Geared for Good corporate responsibility framework. While we have always been driven by a desire to make a positive impact, this framework signals our most focused effort yet to do all we can to elevate the industries, the communities and the quality of life for stakeholders within our corporate ecosystem. Through this work we have established our pillar areas of focus:



	One of our largest efforts this year was the completion of a materiality assessment done in partnership with Business Social Responsibility. This effort was used to determine the areas of corporate responsibility most important to our business strategy as determined by internal and external stakeholders.

In 2019, Institutional Investor ranked us as the top ESG, Corporate Governance, and Investor Relations company in the Consumer Leisure category and Newsweek named us one of America’s Most Responsible Companies.

As stewards of your investment in Polaris, the Board of Directors takes seriously our commitment to good corporate governance. The Board believes that transparent disclosure of its governance practices helps shareholders assess the quality and value of our Company. The Board is committed to enhancing the long-term stability and value of the Company to the benefit of all stakeholders. These are just a few attributes of our corporate governance practices that demonstrate this commitment:

Our commitment to good corporate governance practices starts with our diverse, highly qualified, and engaged board.

In the last five years, the Company has added four new directors resulting in a Board with diverse skill sets and backgrounds. For 2019, we have refreshed the composition of the committees of the Board, and enhanced our director education program. Board refreshment and effectiveness is driven by a regular and effective Board and committee self-assessment process. As part of that self-assessment process, directors provide anonymous and confidential feedback on topics including:

To promote effectiveness of the Board, the results of the Board evaluation are reviewed and addressed by the Corporate Governance and Nominating Committee in executive session and then by the full Board in an executive session led by the Lead Independent Director. The results of each Committee’s evaluation are discussed at an executive session of the applicable Committee and further discussed by the full Board and senior management as appropriate.

These efforts demonstrate the Board’s focus on best corporate governance practices and effectiveness, enabling directors’ skills and expertise to reflect the changing needs of our business and support the execution of our long-term growth strategy.

We also recognize the value and strategic importance of Board diversity. Although the Company does not maintain a formal diversity policy, the Corporate Governance and Nominating Committee considers, as required by its charter as well as the Company’s Corporate Governance Guidelines, the Board’s overall balance of diversity of perspectives, backgrounds and experiences in areas relevant to the Company’s strategy when selecting Board nominees. The Corporate Governance and Nominating Committee views diversity broadly and evaluates a wide range of criteria as it makes its selections, including, among others, functional areas of experience, educational background, employment experience, and leadership performance. The Corporate Governance and Nominating Committee also assesses those intangible factors it deems necessary to develop a heterogeneous and cohesive Board, such as integrity, judgment, intelligence, and the willingness and ability of the candidate to devote adequate time to Board duties for a sustained period. We believe our Board has the right mix of diversity and experience to appropriately support the Company’s current long-term strategy and to oversee the most important risks to that strategy.

Finally, we are committed to having an independent Board. All members of our Board, other than the Chairman, are independent. To assure that the independent directors are not inappropriately influenced by management, the non-management members of the Board meet in executive session, without management, at the start and/or at the end of each regularly scheduled in-person meeting of the Board and each committee, and otherwise as deemed necessary. These executive sessions allow directors to speak candidly on any matter of interest, without the CEO or other members of management present, and are a key element to our high functioning Board.

Our Board is led by Mr. Wine who holds the titles of Chairman of the Board and Chief Executive Officer (CEO) of Polaris. Mr. Wine has over ten years’ experience as CEO, a deep understanding of the Company’s business and markets, and drives the Company forward with a clear vision and strategy. Mr. Wine is well positioned to assess the Company’s industry dynamics and guide the Board’s discussion of strategy and business performance. Given Mr. Wine’s experience and vision, the Board believes that having a combined Chairman and CEO role serves the best interests of the Company and our shareholders at this time. The combined role effectively supports leadership, accountability, and execution of strategic priorities in a large, global organization. The combined role also enables alignment between the Board and management on issues of strategy, priorities and accountability. However, the Board routinely reassesses the leadership structure of the Board and has flexibility to choose a different Board leadership structure if and when it believes circumstances warrant.

Mr. Wiehoff is currently our Lead Independent Director. The Board believes that its independent Board committees and Lead Independent Director provide appropriate independent Board leadership and oversight. The duties and responsibilities of the Lead Independent Director, among others, include:

During 2019, the full Board met five times. Each of the meetings was preceded and/or followed by an executive session of the Board without management in attendance, chaired by Mr. Wiehoff. Each of our directors attended at least 75 percent of the meetings of the Board and any committee on which that director served in 2019. We do not maintain a formal policy regarding the Board’s attendance at annual shareholder meetings; however, Board members are expected to regularly attend all Board meetings and meetings of the committees on which they serve as well as the annual shareholder meetings. All members of the Board attended our 2019 Annual Meeting.

The Board has designated four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, and the Technology Committee. Each committee operates under a written charter which is available on our website at ir.polaris.com/investors/corporate-governance. The current membership of each committee and its principal functions, as well as the number of times it met during 2019, are described below.

Our full Board has responsibility for overseeing the Company’s overall approach to risk management and is actively engaged in addressing the most significant risks facing the Company. The risk management process consists of periodic risk assessments performed by various functional management groups during the year. While the Board and its committees oversee key risk areas, the Company’s management is responsible for day-to-day risk management identification and mitigation, as well as bringing to the Board emerging risks and highlighting the top enterprise risks.

Management identifies enterprise risks by engaging in an Enterprise Risk Management (ERM) process. Executive management presents the ERM conclusions initially to the Audit Committee. As appropriate, key risks are then discussed at the Board. The Company maintains regular internal risk management meetings, assigns operating risk owners with accountability for specific risk management activities, promulgates its Code of Conduct, maintains a strong legal department and ethics and compliance office and a comprehensive internal and external audit process. The Board believes that these processes and division of responsibilities is the most effective approach for addressing the risks facing our Company.

When the Board deems it appropriate, responsibility of oversight of a specific risk is assigned to another one of the Board’s committees. Risks reviewed by Board committees are escalated to the full Board as necessary. Risk oversight of the Company’s primary risks is implemented as follows:

Our Board has worked with management to develop an annual shareholder engagement process. These engagement efforts take place throughout the year involving members of our Board, senior management, and shareholder representatives. In 2019, Polaris reached out to shareholders representing approximately 60% of our outstanding shares, and members of our Board and management team met with shareholders owning approximately 27% of the Company. One of our directors participated in 90% of the shareholder calls. The meeting agendas included discussions on various topics, including company strategy, compensation, governance practices, sustainability and board refreshment and diversity. After the engagements, management summarizes the feedback we receive and then reviews the feedback with the Corporate Governance and Nominating Committee and, as appropriate, the Chair of the Corporate Governance and Nominating Committee reviews the concerns and recommendations identified by our shareholders with the full Board. The feedback from these meetings helps inform the Board and management on compensation, corporate governance, and environmental and social practices and trends. We listen carefully to our shareholder feedback and, when appropriate, we make changes to address concerns and/or align with best practices. For example, based in part on feedback from our shareholders and in consultation with the Compensation Committee, in 2019, the Company made the decision to adjust our equity compensation program for future grants to reduce the dilutive effect of our program on shareholders. We will continue to expand our shareholder engagements to determine what is in the best interests of Polaris and our stakeholders.

Our Board has adopted Corporate Governance Guidelines, which may be viewed online on our website at ir.polaris.com/investors/corporate-governance. Under our Corporate Governance Guidelines, which adopt the current standards for “independence” established by the NYSE, a majority of the members of the Board must be independent as determined by the Board. In making its determination of independence, among other things, the Board must have determined that the director has no material relationship with the Company either directly or indirectly as a partner, shareholder or officer of an organization that has a relationship with us. The Board of Directors has determined that directors Bilicic, Clayton, Farr, Hendrickson, Henricks, Kessler, Kingsley, Shotwell, and Wiehoff are independent. Mr. Wine, our Chairman and CEO, is the only director who is not independent. Accordingly, a majority of our Board is considered to be independent. Additionally, all current members of our Audit, Compensation, and Corporate Governance and Nominating Committees are considered to be independent.

The Board based its independence determinations, in part, upon a review by the Corporate Governance and Nominating Committee and the Board of certain transactions between the Company and companies with which certain of our directors have relationships, each of which was made in the ordinary course of business, at arm’s length, at prices and on terms customarily available to unrelated third party vendors or customers generally, in amounts that are not material to our business or the business of such unaffiliated corporation, and in which the director had no direct or indirect personal interest, nor received any personal benefit. Specifically, the Corporate Governance and Nominating Committee and the Board reviewed ordinary course of business purchases by us from C. H. Robinson Worldwide, where Mr. Wiehoff was the CEO for a portion of fiscal 2019. The payments were less than the greater of $1,000,000 or 2% of the recipient’s gross revenues in fiscal 2019.

We have adopted a Code of Business Conduct and Ethics applicable to all employees, including our CEO, our Chief Financial Officer (CFO) and all other executive officers, and the Board. A copy of the Polaris Code of Business Conduct and Ethics is available on our website at ir.polaris.com/investors/corporate-governance. If we waive any of the provisions of the Polaris Code of Business Conduct and Ethics with respect to the CEO, CFO, any executive officer or member of the Board that relates to any element of the definition of “code of ethics” enumerated in Item 406(b) of Regulation S-K under the Securities and Exchange Act of 1934, as amended (the Exchange Act), we intend to disclose such actions on our website at the same location.

We adopted a policy that prohibits directors and executive officers from engaging in speculative trading of the Company’s securities. Specifically, no officer or member of the Board of Directors may purchase any financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of securities of the Company held directly, or indirectly, by the officer or director. We also adopted a policy that prohibits directors and executive officers to pledge our common stock as collateral for a loan except where the transaction is pre-approved by the Company’s General Counsel and CFO. The director or executive officer must clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities. No directors or executive officers pledged shares of common stock during 2019.

Under our Corporate Governance Guidelines, a process has been established by which shareholders and other interested parties may communicate with members of the Board. Any shareholder or other interested party who desires to communicate with the Board, individually or as a group, may do so by writing to the intended member or members of the Board, c/o Corporate Secretary, Polaris Inc., 2100 Highway 55, Medina, Minnesota 55340.

All communications received in accordance with these procedures will be reviewed initially by the office of our Corporate Secretary to determine whether the communication is a message to one or more of our directors and then will be relayed to the appropriate director or directors unless the Corporate Secretary determines that the communication is an advertisement or other promotional material. The director or directors who receive any such communication will have discretion to determine whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees and whether any response to the person sending the communication is appropriate.

During 2019, we did not engage in any transactions with related persons that are required to be described in this Proxy Statement pursuant to applicable SEC regulations.

Our written Related-Person Transactions Policy, which is applicable to all of our directors, nominees for directors, executive officers and 5% shareholders and their respective immediate family members, prohibits “related-person transactions” unless approved or ratified by the Corporate Governance and Nominating Committee.

Matters considered to be a related-person transaction subject to the policy include any transaction in which we are directly or indirectly a participant and the amount involved exceeds or reasonably can be expected to exceed $120,000, and in which a director, nominee for director, executive officer or 5% shareholder, or any of their respective family members, has or will have a direct or indirect material interest.

Any potential related-person transaction that is raised will be analyzed by the General Counsel, in consultation with management and with outside counsel, as appropriate, to determine whether the transaction or relationship constitutes a related-person transaction requiring compliance with the policy. The potential related-person transaction and the General Counsel’s conclusion and the analysis thereof are also to be reported to the chair of the Corporate Governance and Nominating Committee.

The Corporate Governance and Nominating Committee reviews the material facts of all related-person transactions that require the committee’s approval and either approve or disapprove of the related person transaction. If advance committee approval of a related-person transaction is not feasible, then the related-person transaction is considered and, if the committee determines it to be appropriate, ratified at the committee’s next regularly scheduled meeting. Any related-person transaction that is not approved or ratified, as the case may be, is voided, terminated or amended, or such other actions shall be taken, in each case as determined by the committee, so as to avoid or otherwise address any resulting conflict of interest.

Our Board selected the three nominees based upon their diverse mix of skills, backgrounds, and perspectives, including their functional areas of experience, educational background, employment experience, and leadership performance. The nominees are also collegial, thoughtful and responsible leaders who consistently demonstrate their integrity, judgment and intelligence. Based upon these qualifications and the recommendation of the Corporate Governance and Nominating Committee, our Board proposes that George W. Bilicic, Gary E. Hendrickson, and Gwenne A. Henricks be elected as Class II directors for three-year terms expiring in 2023. All nominees are presently Polaris directors who were elected by shareholders at the 2017 Annual Meeting, except for George W. Bilicic, who joined the Board on August 22, 2017 and was elected by shareholders at the 2018 Annual Meeting. All nominees have terms expiring at the 2020 Annual Meeting.

Executed proxies will be voted for the election of each of the three nominees unless you indicate on the proxy that you vote to “abstain” or vote “against” any or all of the nominees. Our Articles of Incorporation require that a director nominee will be elected only if he or she receives a majority of the votes cast with respect to his or her election in an uncontested election, that is, the number of shares voted “for” that nominee exceeds the number of votes cast “against” that nominee. A vote to “abstain” will not have an effect in determining the election results. If you are voting by telephone or on the Internet, you will be told how to abstain your vote from some or all of the nominees. Each nominee elected as a director will continue in office until his or her successor has been elected, or until his or her death, resignation or retirement. The Board has ten members and is divided into three classes. The members of one class are elected at each annual meeting of shareholders to serve three-year terms.

We expect each nominee standing for election as a director to be able to serve if elected. If any nominee is not able to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees designated by the Board, unless an instruction to the contrary is indicated on the proxy. There are no family relationships between or among any of our executive officers, directors or director nominees.

The Board, upon recommendation of the Corporate Governance and Nominating Committee, unanimously recommends a vote FOR the election of these nominees as directors.

Our directors bring a broad range of leadership and experience to the boardroom and regularly contribute to the dialogue involved in effectively overseeing and guiding our business and affairs. Other than our CEO, all of the members of the Board are independent. Preparation, engagement and participation are expected from our directors. We insist on high personal and professional ethics, integrity and values. All of our current directors and the director nominees satisfy such requirements. The Board has adopted Corporate Governance Guidelines, which are observed by all directors. With a diverse mix of experience, backgrounds and skill sets that complement the Company’s long-term strategy, the Board believes it is well positioned to represent the best interests of the Company’s shareholders. The principal occupation, specific experience, qualifications, attributes or skills and certain other information about the nominees and other directors whose terms of office continue after the Annual Meeting are set forth on the following pages.

If a shareholder wishes to have the Corporate Governance and Nominating Committee consider a candidate for nomination as a director, the shareholder’s notice must include the information specified in our bylaws, including the shareholder’s name and address, the information required to be disclosed by the SEC’s proxy rules, a written consent of the candidate to be named in the proxy statement and to serve as a director if elected, specified information regarding the shareholder’s interests in our capital stock, and the representations specified in our bylaws. The Corporate Governance and Nominating Committee will evaluate recommended nominees based on the factors identified in the Corporate Governance and Nominating Committee Charter, a copy of which is available on our website at ir.polaris.com/investors/corporate-governance. Alternatively, shareholders may directly nominate a person for election to our Board by complying with the procedures set forth in our bylaws, any applicable rules and regulations of the SEC and any other applicable laws.

The Compensation Committee conducts an annual review of our non-employee director compensation and makes a recommendation for changes, as appropriate, to the Board. For 2019, the Compensation Committee’s outside consultant, Willis Towers Watson, assessed the compensation paid to our non-employee directors against director compensation trends and data from our 21-company peer group. In consultation with Willis Towers Watson, the Compensation Committee found the compensation program appropriate, and no changes were made for 2019. The principal features of the compensation received by our non-employee directors are described below.

Our CEO and Chairman receives no compensation for his service as a director. Compensation for non-employee directors is divided into cash and stock components. We currently pay each non-employee director an annual director’s retainer fee, and our Lead Independent Director and Committee chairs receive an additional fee. The annual director retainers have remained unchanged since 2013. In addition, we pay committee members an annual fee for committee membership. Any non-employee director may elect to defer the receipt of all or a specified portion of the retainer and fee payments under the Polaris Inc. Deferred Compensation Plan for Directors (the Director Deferred Compensation Plan) (as described below). The fees are paid according to the following schedule:

The Board has adopted stock ownership guidelines, which provide that each non-employee director is expected to own, directly or indirectly, shares of our common stock, common stock equivalents and deferred stock units having a value of at least five times the amount of the annual retainer ($425,000). All non-employee directors are expected to satisfy the stock ownership guidelines within four years following the date they are first elected to the Board. All directors are in compliance with the stock ownership guidelines.

Since 2007, we have granted our non-employee directors an annual award of deferred stock units in an amount determined by the Board. For 2019, the directors were each granted deferred stock units with a grant date fair value of $130,000. The deferred stock units are issued under our 2007 Omnibus Incentive Plan (as Amended and Restated April 25, 2019) (the Omnibus Plan) and are fully vested upon issuance. Upon termination of service as a director or upon an earlier change in control of our Company, each non-employee director will receive one share of common stock for every deferred stock unit credited to the non-employee director’s account. Dividend equivalents are credited to non-employee directors as if the deferred stock units are outstanding shares of common stock. Such dividend equivalents are deferred like the underlying deferred stock unit and are deemed invested in additional deferred stock units.

We maintain the Director Deferred Compensation Plan for non-employee directors. A non-employee director can defer all or a portion of the retainer and fee payments that would otherwise be paid to him or her in cash. Prior to 2020, such deferred amounts were automatically converted into additional common stock equivalents (CSEs) based on the then fair market value of Polaris common stock. In 2019, the Board updated the Director Deferred Compensation Plan to permit non-employee directors to elect to defer their compensation into either CSEs or various investment options at Fidelity and to permit directors to diversify their current CSE balances into the investment options at Fidelity to facilitate estate and retirement planning. However, the directors are still expected to meet their stock ownership guidelines described above. Each CSE represents the economic equivalent of one share of our common stock. For CSE balances, dividend equivalents are credited to non-employee directors as if the CSEs are outstanding shares of common stock. Such dividend equivalents are deemed invested in additional CSEs.

As soon as practicable after a non-employee director’s service on the Board terminates, or such other later distribution date as elected by a non-employee director, he or she will receive a distribution of the deferred compensation then credited to him or her under the Director Deferred Compensation Plan. If a non-employee director has CSEs, then shares of our common stock equal to the number of CSEs will be distributed to the director per their deferral election. Upon separation of service from the Board, if a non-employee director has chosen an investment option at Fidelity, then cash will be distributed to the director per their deferral election. Upon the death of a non-employee director, either the shares and/or the cash will be issued to his or her beneficiary. Shares of common stock issued for CSEs and dividend equivalents are issued under the Omnibus Plan. Upon a change in control of our Company (as defined in the Director Deferred Compensation Plan), each non-employee director will receive a cash payment equal to the value of his or her accumulated deferred compensation.

We strongly encourage each of our non-employee directors to use up to ten Polaris products or services of his or her choice, at no charge to encourage a first-hand understanding of the riding experience of our customers and to provide the non-employee directors with an opportunity to evaluate product design and quality. The products used by the non-employee directors can be returned to the Company or purchased at a price greater than cost at the end of a defined usage period based upon months, miles or hours, depending upon the product line. We sell the returned products to dealers or through auction at an amount greater than the cost of such products to the Company. All non-employee directors also receive related parts, garments, accessories, and services at no cost because they are required to use appropriate safety equipment.

The following table sets forth the compensation earned by each of our non-employee directors for the year ended December 31, 2019.

The following table sets forth the number of shares of common stock underlying outstanding stock awards for each of the non-employee directors as of December 31, 2019.

The Compensation Discussion and Analysis (CD&A) describes our compensation objectives and policies and the compensation awarded to our Named Executive Officers (NEOs) during 2019. Our NEOs for 2019 are:

Our executive compensation is based on a pay for performance philosophy that aligns executive compensation decisions with our corporate strategy. The goal is to provide executives with competitive compensation opportunities and actual pay outcomes that reward superior company and individual executive performance. Our program is designed to attract, motivate, and retain highly qualified executives to achieve annual and long-term goals that create shareholder value and align with shareholder interests through a combination of base salary, annual incentives and long-term incentives with explicit financial metrics. We target market median for base salary and above market median for annual and long-term incentives because they are at-risk and tied to stretch targets. Our program, by design, places an emphasis on performance-based variable compensation as the largest percentage of total direct compensation for our executives. The primary objectives and priorities of the compensation program for our NEOs are the following:

We believe that our compensation policies and practices are designed to mitigate compensation-related risks to the Company’s long-term performance, ethical standards and reputation. The table below illustrates some of those policies and practices.

To achieve the primary objectives and priorities of our compensation philosophy, we have designed an executive compensation program that is significantly weighted towards long-term goals. This approach aids us in the retention of executive officers and assures that the interests of our executive officers and shareholders are aligned. Although the program emphasizes performance-based and equity-based compensation as a percentage of total direct compensation (base salary and annual and long-term incentives), we do not have specific policies governing the allocation of the total direct compensation opportunity among its various components. Below we illustrate the key tenets of our compensation program and percentage of the 2019 target total direct compensation opportunity for Mr. Wine and the other NEOs as a group represented by each compensation component:

Since a significant majority of our executive compensation is in the form of equity, actual compensation outcomes vary with Company and stock price performance, closely aligning pay and performance. At the beginning of 2017, our stock price was $82.61. We closed 2019 with a stock price of $101.70. However, over the three-year periods ending in 2017 and 2018, the ending stock price was lower than the beginning stock price. In addition, the Company’s 3-year Relative TSR percentile was 12% in 2017, 36% in 2018, and 61% in 2019. As a result, over those periods, our CEO’s pay was well below his targeted cash compensation and the grant date fair value of his equity awards in 2017 and 2018, but in line with his targeted cash compensation and the grant date fair value of his equity awards in 2019 to reflect the good performance of our stock over the three year period ending at the end of 2019.

Consistent with our compensation philosophy of paying for performance, our compensation programs closely link pay and performance. Our performance during 2019 resulted in the following compensation actions:

Because significant portions of our executive compensation program are equity-based, the amount of compensation (defined as base salary, annual incentive payment and grant date fair value of equity awards) ultimately realized by our NEOs is closely linked to the performance of our common stock, which is reflected in the following table that compares our annualized total shareholder return to that of the members of our 2019 Peer Group listed on page 29:

In making compensation decisions, the Compensation Committee considers the results of the Company’s annual shareholder advisory votes approving the Company’s executive compensation. Shareholders approved on an advisory basis the Company’s Say on Pay proposal at our 2019 Annual Meeting of Shareholders with 86.2% of the votes cast (excluding abstentions) in favor of the compensation paid to our NEOs. For a more detailed discussion of our active shareholder engagement, please refer to the section titled “Shareholder Engagement” on page 13.

The Compensation Committee is responsible for the review and approval of all aspects of our executive compensation program. The Compensation Committee meets in January or February of each year to: (i) establish the annual base salary and annual incentive compensation opportunity for each of the executive officers for the current year; (ii) determine the actual annual incentive compensation to be paid to each executive officer for services provided during the prior year; (iii) establish plan targets and performance measures for the three-year performance period beginning on January 1 of the current year for PRSUs; (iv) determine the number of PRSUs earned, if any, under the long-term incentive program for the three-year performance period ended on the immediately preceding December 31^st; and (v) determine stock option awards, RSU awards and any other equity-based awards to be granted to executive officers.

When making individual compensation decisions for the executive officers, the Compensation Committee takes many factors into account. These factors include subjective and objective considerations of each individual’s skills, performance and level of contribution towards desired business objectives, our overall performance, retention concerns, the individual’s tenure and experience with our Company and in his or her current position, the recommendations of management, the individual’s current and historical compensation, the Compensation Committee’s compensation philosophy, and comparisons to other comparably situated executive officers (both those of the Company and those of the peer group companies). The Compensation Committee’s process utilizes input, analysis and review from a number of sources, including our management, other independent directors of the Board, the Compensation Committee’s independent compensation consultant, and market studies and other comparative compensation information as discussed below.

The Compensation Committee uses this information in conjunction with its own review of the various components of our executive compensation program to determine the base salary and annual and long-term incentive targets and opportunities of the executive officers as a group and individually.

The Compensation Committee meets with our CEO annually to review the performance of our other executive officers. The meeting includes an in-depth review of each executive officer, achievement of individual performance objectives established at the beginning of the year and individual contributions towards achievement of our business goals.

The Compensation Committee considers input from our CEO, CFO, and Chief Human Resources Officer (CHRO) when developing and selecting metrics and performance objectives for our Senior Executive Plan and long-term incentive program, and evaluating performance against such pre-established metrics and objectives. The Compensation Committee also receives recommendations from our CEO, with the assistance of our CHRO (for executive officers other than himself), regarding base salary amounts, annual incentive award amounts and equity-based performance incentive awards for our other executive officers. In determining the CEO’s compensation, the Compensation Committee considers comparative compensation information, and input from its independent compensation consultant.

Willis Towers Watson provides the Compensation Committee with an annual compensation market analysis for the executive officers and directors; makes recommendations on the executive pay programs; reviews, participates and comments on executive and board compensation matters; and provides updates on regulatory changes in compensation related issues and other developments and trends in executive compensation.

The compensation consultant and the Compensation Committee periodically review the composition of the peer group of companies about which competitive compensation data is obtained. The peer group is established each July and is used for purposes of setting compensation for the following year.

In connection with the 2019 compensation planning, the Compensation Committee, with the guidance of Willis Towers Watson, reviewed the composition of the peer group and removed SPX Corporation due to its low revenue in relation to the Company, and added LKQ Corporation due to its larger revenue and market capitalization. The companies comprising the Peer Group used to establish the 2019 compensation of the executive officers are listed below:

Both management and the Compensation Committee believe that this peer group of 21 companies (the Peer Group) provided a robust statistical set of comparison data to serve as the basis for 2019 compensation decisions. In connection with the compensation decisions made for 2019, Willis Towers Watson utilized data from the Willis Towers Watson 2018 General Industry Executive Compensation Database and our Peer Group companies in the market review.

The following table summarizes our scale relative to our 2019 industry peer group as of December 31, 2019.

The reports furnished by Willis Towers Watson provide the Compensation Committee with market information at the median and 75^thpercentiles for each executive officer position and pay component, and for total direct compensation, and compare the actual and target compensation provided and intended to be provided to each executive officer to the market amounts, which consider both the peer group data and the data contained in the surveys. This market information is an important element reviewed by the Compensation Committee, which generally intends to target base salaries for our executive officers at the market median for comparable positions as set forth in the report. The elements of annual and long-term incentive opportunities of total direct compensation are based on responsibilities of position, expected level of contribution and consideration of market data. The Compensation Committee can and does, however, use discretion to adjust a component of pay, or total direct compensation generally, above or below these ranges to recognize the specific circumstances of individual executive officers.

The Summary Compensation Table on page 37 sets forth the actual base salary earned by each of our NEOs during 2019. Base salary increases in 2019 were based on individual performance and were generally implemented to maintain the NEO’s position with respect to market median.

The following table reflects the annualized base salaries as established by the Compensation Committee for our NEOs in 2019.

Our NEOs and other members of senior management selected by the Compensation Committee are eligible to earn annual cash incentive compensation under our SEP. Cash incentives to participants in the SEP are payable only if and to the degree we achieve annual financial performance objectives determined by the Compensation Committee. The performance objectives are to be based on one or more business criteria specified in the SEP. In establishing our performance goals, the Compensation Committee provides that adjustments will be made for specified unusual events such as acquisitions, dispositions, restructurings and certain legal settlements.

For 2019, the target payouts under the SEP expressed as a percentage of base salary were set by the Compensation Committee at 125% for Mr. Wine, 100% for Messrs. Speetzen, Pucel, and Musso, and 80% for Mr. Williams. The percentage utilized for each NEO was based on the respective NEO’s level of responsibility, expected level of contribution and the Compensation Committee’s general intention to target annual incentive compensation between the market median and the 75^thpercentile levels for comparable positions when financial targets are achieved.

In determining whether and to what degree to approve payments under the SEP, the Compensation Committee gives primary consideration to the level of achievement of performance metrics it selects for inclusion in a performance matrix. For 2019, the Compensation Committee selected adjusted earnings per diluted share (Adjusted EPS) as the sole performance metric for this purpose. The Adjusted EPS metric was chosen because it is a well-understood financial measure communicated in the public disclosure of our financial results, is used in determining payouts under our broad-based annual profit sharing plan, and is believed to significantly influence our stock price performance. In determining the Company’s 2019 performance for purposes of the performance matrix, the Compensation Committee adjusted for certain unusual events (such as acquisitions, dispositions, restructurings and legal settlements) which resulted in Adjusted EPS of $6.32⁽¹⁾as compared to GAAP EPS of $5.20.

The estimated threshold, target and maximum payments under the SEP for 2019 are reflected in the “Estimated Potential Payouts Under Non-Equity Incentive Plan Awards” column in the Grants of Plan-Based Awards in 2019 on page 39. The amounts actually paid in connection with the SEP during each of the years 2017-2019 are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 35.

Consistent with our pay-for-performance philosophy, the Compensation Committee sets challenging objectives for Adjusted EPS. In 2019, the target Adjusted EPS performance goal was set $.01 higher than the amount achieved in 2018. The 2019 performance levels that were incorporated into the matrix are summarized in the following table:

Our Adjusted EPS for 2019 was $6.32, which was 1% above target level performance of $6.25 in the performance matrix. The Compensation Committee considered a number of factors, primarily the payout amounts suggested by the performance matrix for the NEO as set forth in the table below, but also our financial and operating performance as compared to fiscal 2018, Mr. Wine’s assessment of the individual performance of the other NEOs, and the Compensation Committee’s assessment of Mr. Wine’s individual performance.

The following table shows the suggested payout as a percentage of earned salary derived from the performance matrix at an Adjusted EPS of $6.32, the actual payout as a percentage of eligible annual wages, and the actual amount paid in March 2020 under the SEP for each of our NEOs:

Long-term incentive compensation annually awarded by the Compensation Committee emphasizes performance-based equity vehicles, consisting of annual awards of stock options, RSUs, and PRSUs. From time to time, supplemental equity awards are granted on a selective and limited basis, generally in connection with promotions, individual outstanding performance and ability to effect desired performance results, hiring of new executives and retention situations. All equity-based awards are granted under our Omnibus Plan.

The Compensation Committee has chosen to provide a mix of stock options, PRSUs, and RSUs for its annual long-term incentive equity awards because it believes such a combination effectively aligns the financial interest of our executive officers with those of our shareholders. Stock options provide value only to the extent that the price of our common stock has appreciated over the option term. PRSUs provide performance-based compensation and value only if the minimum performance targets for net income, revenue, and relative TSR are met and in certain instances, then only if an adjusted ROIC floor is achieved for payouts under the net income and revenue metrics. RSUs provide stability to total compensation packages and a retention benefit, while maintaining a focus on stock growth. RSU awards are also provided occasionally for new hires, promotions, or special recognition and are subject to three-year cliff vesting. The Compensation Committee provides a variable blended ratio between the types of awards depending on the desired performance outcome. The 2019 long-term incentive awards granted to our NEOs was allocated 50% to stock options, 25% to PRSUs, and 25% to RSUs.

Stock option awards granted under the Omnibus Plan during 2019 to our employees, including NEOs, have an exercise price equal to 100% of the fair market value of a share of our common stock on the date of grant. Each stock option granted to our NEOs vests and becomes exercisable in three equal installments on each of the first, second and third anniversaries of the date of grant and has a 10-year term. If employment terminates for any reason other than diserally exercisable for 30 days after employment ends unless terminated for cause. If employment terminates due to disability or death (retirement is discussed below), then any unvested portion of the option will vest immediately and all exercisable options will remain exercisable for one year following termination of employment.

If employment terminates by reason of retirement, the vested option will be exercisable for the full term of the option and the unvested portion of the option will vest immediately and remain exercisable for the full term of the option, provided that the grant occurred at least 12 months prior to the retirement date and notice of retirement was given to the Company at least one-year in advance. Upon a change in control of our Company, each outstanding option will become immediately vested and exercisable in full only if the option is not continued, assumed or replaced or if the NEO is terminated without cause or terminates his employment for good reason within one year of the event.

Our stock option grant practices for executive officers are designed to ensure that the stock option awards approved by the Compensation Committee at its January meeting will have an effective date occurring after the release of year-end financial results. We do not engage in the backdating, cancellation or repricing of stock options and have not engaged in such practices in the past.

The 2019 awards for our NEOs vest in three equal installments on the first, second and third anniversaries of the January 30, 2019 grant date and have an exercise price of $84.58, which was the fair market value of a share of our common stock on the date of the grant. The number of shares subject to each NEO’s 2019 stock option award is as follows:

PRSU awards are made to each of our NEOs and other eligible employees pursuant to the Omnibus Plan. The PRSU awards will be earned to the degree that we achieve performance objectives specified by the Compensation Committee at the beginning of a three-year performance period. The performance objectives are based on one or more business criteria specified in the Omnibus Plan or other metrics approved by the Compensation Committee. In establishing our performance goals, the Compensation Committee may provide that adjustments will be made for specified unusual events such as acquisitions, dispositions, restructurings and certain legal settlements.

Each PRSU will be paid out in the form of one share for each PRSU determined by the Compensation Committee to have been earned and vested over the applicable performance period. Below is a discussion of the PRSU awards over the past three years.

PRSUs granted in 2019 may be earned for the 2019-2021 performance period based on level of achievement against the performance objectives specified at the beginning of the performance period. All earned PRSUs will either vest and be paid out in the form of one share for each earned and vested PRSU or, if elected by the executive officer, deferred pursuant to the SERP.

In 2019, the Compensation Committee selected total shareholder return relative to the Company’s peer group (Relative TSR), net income, and revenue growth as the metrics for the PRSU awards, with achievement of an adjusted ROIC percentile required before any payout under the net income or revenue metric is permitted. Relative TSR for the Company or any member of the Peer Group during the performance period means the cumulative total shareholder return during the performance period on the applicable company’s common stock as measured by the change in the company’s stock price from the beginning of the performance period to the end of the performance period and takes into account the assumed reinvestment of all dividends paid during the performance period. The beginning stock price for a company will be the average closing sales price as reported on the national securities exchange on which it trades during the period of November 1, 2018 through December 31, 2018. The ending stock price for a company will be the average closing sales price as reported on the national securities exchange on which it trades during the period of November 1, 2021 through December 31, 2021.

For the 2019 PRSU awards, the following tables summarize the PRSU threshold, target, and maximum (represents 200% of target) performance metrics and payouts for each NEO. Performance below each of these levels would result in no PRSUs vesting and consequently, no equity would be issued under this award:

PRSUs granted in 2018 may be earned during the course of the 2018-2020 performance period based on the level of achievement against the performance objectives specified at the beginning of the performance period. In 2018, the Compensation Committee selected net income, revenue, and total shareholder return relative to the Company’s peer group (relative TSR) as the metrics for the PRSU awards.

For the 2018 PRSU awards, the following tables summarize the PRSU threshold, target, and maximum (represents 200% of target) performance metrics and payouts for each NEO. Performance below each of these levels would result in no PRSUs vesting and consequently, no equity would be issued under this award:

For PRSUs granted in 2017 for the 2017-2019 performance period, we achieved 58.7 percentile of the relative total shareholder return, compared to our peer group, the sole metric selected by the Compensation Committee for the 2017 PRSU awards.

As a result of this performance, the Compensation Committee determined that the 2017 PRSU awards would be paid out at 108.7% of target for the 2017-2019 performance period, and the amounts received by the NEOs are summarized in the “Option Exercises and Stock Vested in 2019” table on page 42.

In 2018, we introduced RSUs to provide stability to total compensation and as a retention tool. RSUs provide stability to total compensation packages and a retention benefit, while maintaining a focus on stock growth. RSU awards are also provided occasionally for new hires, promotions, or special recognition and are subject to three-year cliff vesting to maximize the retention benefit. RSUs awarded to our NEOs during 2019 were granted under the Omnibus Plan and vest in full on January 30, 2022. No dividend equivalents are paid on the RSUs. Upon a change in control of our Company, each outstanding RSU will become immediately vested in full only if the RSU is not continued, assumed or replaced or if the NEO is terminated without cause or terminates his employment for good reason within one year of the event. The number of shares subject to each NEO’s 2019 RSU award is as follows:

We sponsor a qualified 401(k) Plan in which our NEOs may participate on the same general basis as our employees, and which allows participants to make plan contributions on a pre-tax basis and to which we make Company-matching contributions dollar-for-dollar with employee contributions up to 5% of covered compensation.

We have also adopted a SERP intended to increase contributions limited by the application of the IRS 401(k) annual compensation limit. Additionally, participation in the SERP offsets ESOP contributions generally provided to our non-executive employee population. The SERP provides executives who participate in the 401(k) Plan, including the NEOs, with the opportunity to defer up to 100% of their base salary, up to 100% of amounts payable under the SEP, and PRSU and RSU awards by making contributions to the SERP. Typically, base salary and SEP deferral contributions are matched by the Company as if they had been made under the 401(k) Plan on a dollar-for-dollar basis up to 5% of covered compensation. The SERP assists executives in accumulating funds on a tax-advantaged basis for retirement and is consistent with observed competitive practices of similarly situated companies.

We do not maintain a defined benefit pension plan or a defined benefit supplemental pension plan for our executive officers or non-executive employee population.

We do, however, provide certain benefits and perquisites to NEOs who are retirement-eligible. These benefits and perquisites include:

Mr. Pucel is also eligible for an additional payment equal to three times his annual base salary upon retirement on or after age 55 plus five years of service. Mr. Pucel received this benefit as part of an inducement to join Polaris and as a substitute to a comparable benefit he received from his prior employer.

To be eligible for full retirement-age benefits, the NEO must have attained the age of at least 65 (or who have attained the age of at least 55 and have a minimum of 10 years of service to our Company, or 5 years with respect to Mr. Pucel). None of the NEOs has attained the age of 55 and had at least 10 years of service (or 5 years with respect to Mr. Pucel) at the Company as of December 31, 2019.

We provide perquisites and personal benefits to our executive officers in an effort to attract and retain the best talent. These perquisites and personal benefits consist of:

We prohibit personal use of corporate aircraft by any executive officer unless the Company is reimbursed for the full incremental cost to the Company of such use. Occasionally, however, a guest may accompany an executive officer on business travel on a corporate jet if there is an empty seat, but there is no incremental cost to the Company. Unused tickets from business related sponsorship agreements are from time- to-time made available for personal use. Tickets are included in sponsorship agreements and result in no incremental cost to the Company.

We have entered into severance arrangements with our NEOs, which provide for certain benefits if an executive officer is involuntarily terminated without cause, terminated without cause in connection with a change in control, or if he terminates his employment for good reason following, in the case of the NEOs other than Mr. Wine, a change in control. The severance arrangements with our NEOs were established as part of the negotiations of their initial employment terms. The severance arrangements are intended to:

The severance arrangements are described in more detail beginning on page 44 under the caption entitled “Potential Payments Upon Termination or Change-in-Control.”

In January 2020, the Company revised and adopted its current clawback policy. Under the current policy, all performance-based compensation awarded on or after January 29, 2020 to any of our executive officers subject to Section 16 of the Securities Exchange Act or the Controller is subject to forfeiture and/ or recoupment in the event of a financial restatement due to material noncompliance of the Company with financial reporting requirements in which the performance-based compensation awarded would have been lower based upon the restated results or if the Compensation Committee determines that the executive officer has engaged in certain misconduct in accordance with the terms of the policy. Under our prior clawback policy, the Company may require reimbursement or cancellation of cash-based or equity-based incentive compensation awarded after November 1, 2010 to any of our executive officers subject to Section 16 of the Securities Exchange Act if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement, and if the award or payout was predicated upon the achievement of financial results that were restated.

The prior policy in effect for performance-based compensation awarded prior to January 29, 2020 calls for the reimbursement or cancellation of the amount of the award or payout, net of taxes, in excess of what would have been granted or paid based on the actual results unless the Compensation Committee determines in its discretion that a lesser amount to be reimbursed or canceled is appropriate under the circumstances.

The Compensation Committee believes that an important means of aligning the interests of our executive officers, including our NEOs, with the interests of our shareholders is to ensure that they own significant amounts of our common stock. The Compensation Committee adopted stock ownership guidelines which require executive officers to hold shares with a value equal to or exceeding a multiple of annual base salary as set forth in the table below. Each executive officer is expected to satisfy the stock ownership guidelines within four years following the date he or she becomes an executive officer. Executive officers are prohibited from entering into hedging transactions and are subject to restrictions on pledging Company stock as discussed on page 14.

Shares included in this calculation are those directly or indirectly owned, shares held in the SERP, outstanding PRSU awards at target levels and unvested RSU awards. The following table sets forth the stock ownership guidelines and whether the NEOs are in compliance with the guidelines:

Management conducts a risk assessment of our employee compensation policies and practices, including those that apply to our executive officers annually. Management reviewed our compensation plans, program design and existing practices as well as global and local compensation policies, programs and practices applicable to all employees. Management then analyzed the likelihood and magnitude of potential risks, focusing on whether any of our compensation policies and practices varied significantly from our overall risk and reward structure, whether any such policies and practices incentivized individuals to take risks that were inconsistent with our goals, and whether any such policies and practices have resulted in establishing an inappropriate balance between short-term and long-term incentive arrangements.

Management discussed the findings of the risk assessment with the Compensation Committee. Based on the assessment, we have concluded that our compensation policies and practices are aligned with the interests of shareholders, appropriately reward pay for performance, and do not create risks that are reasonably likely to have a material adverse effect on the Company.

The Compensation Committee assists the Board in establishing a philosophy and policies regarding executive and director compensation, provides oversight of the administration of our director and executive compensation programs; and administers our equity-based compensation plans, reviews the compensation of directors, Named Executive Officers and senior management, and prepares any report on executive compensation required by the rules and regulations of the SEC or other regulatory body, including this Compensation Committee Report.

In performing its oversight responsibilities, the Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on the review and discussions, we have recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement for the 2020 Annual Meeting of Shareholders.

The following table shows, for the fiscal years ended December 31, 2017, 2018, and 2019, the annual compensation paid to or earned by our NEOs.

The following table provides additional information on the amounts reported in the All Other Compensation column of the Summary Compensation Table for 2019.

The following table summarizes each grant of an equity or non-equity incentive award during 2019 to each of our NEOs. All equity awards were granted under the Omnibus Plan.

The following table sets forth information concerning unexercised stock option awards, unvested RSU awards, and unvested PRSU awards for each of the NEOs as of December 31, 2019, not including awards earned but not vested with a performance period ending December 31, 2019.

The following table provides information concerning the aggregate number of stock options exercised, PRSUs and RSUs that vested for each of our NEOs during 2019, and the aggregate dollar values realized by each of our NEOs upon such event.

We sponsor a 401(k) Plan that allows employees to make plan contributions on a pre-tax basis. Employees are automatically enrolled at 5% of covered compensation and can affirmatively elect to contribute 0-50% of covered compensation into the 401(k) Plan. We match employee contributions dollar-for-dollar up to 5% of base salary and SEP deferrals. Although NEOs are eligible to participate in the 401(k) Plan, the application of the annual compensation limit under Section 401(a)(17) of the Code significantly limits NEOs’ contributions under the 401(k) Plan. The SERP provides executives who participate in the 401(k) Plan with the opportunity to defer up to 100% of their base salary, up to 100% of amounts payable under the SEP, and PRSUs and RSUs, into the SERP. Typically, base salary and SEP deferral contributions are matched by the Company as if they had been made under the 401(k) Plan on a dollar-for-dollar basis up to 5% of covered compensation. The SERP is intended solely to increase contributions limited because of the application of the annual compensation limit under Section 401(a)(17) of the Code to the 401(k) Plan.

The following table sets forth information regarding the contributions by each NEO and the Company to the SERP, as well as information regarding earnings, aggregate withdrawals and distributions and balances under the SERP, for each NEO as of and for the fiscal year ended December 31, 2019.

The SERP account of each NEO is deemed to be invested in the fund(s) designated by the NEO. For this purpose, the NEOs may choose among the same funds that are available to our employees generally under the 401(k) Plan or self-direct all or any portion of their investments. Deemed investment earnings and losses are applied to each NEO’s SERP account based upon the performance of the applicable investment fund. At December 31, 2019, accounts of the NEOs were in self-directed investments or invested in the following funds:

The return on these available funds ranged from 2.09% to 35.37% in 2019. Under the SERP, the NEOs may elect to receive distributions (i) six months following separation of service or one year after separation of service; (ii) upon the attainment of a certain age, designated by the NEO, between 59 ½ and 70 ½, provided that the NEO will not attain the designated age for at least three years after his election; or (iii) the earlier or later of (i) or (ii). NEOs may elect to receive the distribution in a lump sum or in monthly, quarterly or annual installments over a period not to exceed 10 years. If the installment method is elected, the NEO’s account will continue to be credited with a prorated amount of deemed investment earnings and losses during the installment period.

Our NEOs are eligible to receive certain payments and benefits in the event of termination of their employment, including following a change in control pursuant to severance arrangements and equity award agreements with the Company.

We have entered into severance arrangements with our NEOs, which provide certain benefits to the NEOs upon their termination of employment under certain circumstances, including following a “change in control.” For this purpose, a “change in control” is deemed to occur if:

Under the severance arrangements, a NEO will be considered to have been terminated without cause if he is terminated other than for willful and continued nonperformance, conviction of a felony or other misconduct or detrimental actions as specified in the applicable agreement. A NEO will be considered to have terminated his employment for good reason if he terminates employment due to a material reduction in title, authority, responsibilities or base compensation, a material change in the location of his principal place of employment or nonperformance by the Company of any material obligations owed to him, all as specified in the applicable agreement. For Mr. Musso, good reason includes a material reduction in base compensation or benefits unless such reduction applies to all other executive officers of the Company.

We have entered into severance agreements with our NEOs which provide that if upon or within 24 months after a change in control, any of such NEOs terminates employment for good reason or if his employment is terminated by the Company without cause, then the NEO will be entitled to:

For all NEOs other than Mr. Wine, no cash incentive award will be paid for any part of the fiscal year in which the termination occurs. For Mr. Wine, if the termination occurs during the fiscal year after June 30, he will also receive a payment of the amount of the average cash incentive award under the SEP paid to him for the three fiscal years immediately preceding the change in control, prorated for the full number of months actually worked in the current fiscal year prior to the termination.

Under the severance agreements, a non-change in control termination is deemed to occur if the NEO is terminated by the Company without cause other than in connection with a change in control, or for Mr. Wine, if Mr. Wine terminates with good reason. In the event of a non-change in control termination, the NEO will be entitled to:

As a condition to receiving payments and benefits under the severance agreement, the NEOs must execute a general waiver and release of any claims against the Company. The Wine Severance Agreement also provides that during and for a period of (i) 60 months following termination, Mr. Wine is prohibited from using or disclosing our proprietary information, except as required by his duties to Polaris and (ii) two years following termination, Mr. Wine must refrain from working for or acquiring an ownership interest (other than an interest of up to 1% of publicly held securities) in our competitors, or soliciting our employees.

The amounts payable to each NEO under the severance agreements and PRSU awards are quantified in the tables appearing under the caption “Potential Payments to Our Named Executive Officers” on page 47.

Mr. Wine’s stock option award agreements provide for full, accelerated vesting of all unvested options if employment is terminated due to death or disability or after normal retirement age. For those stock options granted to him after May 2015, vesting will accelerate in full upon a change a control only if the options are not continued, assumed or replaced or if Mr. Wine experiences a termination of employment within one year for reasons other than cause or for good reason. Under Mr. Wine’s PRSU award agreements, vesting will accelerate as to the same percentages of units in connection with a change in control only if the PRSU awards are not continued, assumed or replaced or if Mr. Wine experiences a termination of employment within one year without cause or for good reason. In addition, if Mr. Wine is terminated by the Company without cause or he terminates his employment for good reason other than in connection with a change in control, he will be entitled to have vest, at the end of the performance period, a pro rata portion of the units that would otherwise be deemed to have been earned during the performance period. The prorated portion of the earned payout is based on the amount of the performance period that has elapsed as of the date of termination following the change in control. The balance of the award is forfeited.

The stock option award agreements for Messrs. Speetzen, Pucel, Musso, and Williams provide for full, accelerated vesting of options if employment is terminated due to death or disability or after retirement age. Stock options granted to Messrs. Speetzen, Pucel, Musso, and Williams provide for full, accelerated vesting in the event of a change in control only if the options are not continued, assumed or replaced or if they experience a termination of employment without cause or for good reason within one year. The PRSU award agreements for these NEOs provide for accelerated vesting of the awards under the same circumstances and to the same degree as described above for Mr. Wine. Time-based RSU awards are subject to accelerated vesting in the event of a change in control only if the awards are not continued or if the NEO is terminated within one year without cause or for good reason. For Mr. Musso, his time-based RSU award will vest if he experiences an involuntary termination of employment for reasons other than cause or if he terminates his employment for good reason not in connection with a change in control.

Under the equity award agreements, a NEO will be considered to have been terminated without cause or to have terminated his employment for good reason under the same circumstances as described above in connection with the NEOs’ severance arrangements.

The amounts payable to each NEO under the equity award agreements are quantified in the table appearing under the caption “Potential Payments to Our Named Executive Officers” on page 48.

As described in “Severance Agreements with Named Executive Officers” on page 44, Mr. Wine has agreed not to engage in competitive activities or solicit employees for a period of two years following his termination of employment. The other NEOs were required to enter into non-competition agreements as a condition to the receipt of certain equity grants, under which they agree to not engage in competitive activities or soliciting employees for a period of eighteen months following their termination of employment.

The following tables quantify the amounts and benefits payable to the NEOs upon termination under various scenarios. In calculating the payments set forth in such tables, we have assumed that (i) the date of termination was December 31, 2019, the last business day of fiscal year 2019, and (ii) the stock price was $101.70 per share, the closing market price of our common stock on such date. The tables do not reflect payments and benefits that are provided on a non-discriminatory basis to salaried employees generally upon termination, including:

The tables also do not reflect amounts attributable to vested, non-forfeitable equity-based awards (see “Outstanding Equity Awards at 2019 Fiscal Year-End” on page 40), or distributions of plan balances under the SERP (see “Nonqualified Deferred Compensation in 2019” on page 43). In addition, the tables do not reflect any applicable tax withholdings or other deductions by the Company from the amounts otherwise payable to the NEOs upon termination of employment. To the extent applicable, the present value of the payments presented in the tables below was calculated using a discount rate of 5%.

We provide a number of lifetime benefits and perquisites to our NEOs upon retirement or receipt of early retirement benefits. For purposes of quantifying the value of such benefits and perquisites in the tables below, we have used an average life expectancy age of 78 for such individuals. The costs of medical and dental coverage are based on current annual premiums multiplied by the number of years between the executive officer’s age and 78 for those that receive it until then. Company parts, garments and accessories coverage is based on the average spent for the NEOs in 2019 multiplied by the number of years between the executive officer’s age and 78 (for those who receive it).

As a result of rules adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), beginning for fiscal years starting January 1, 2017, the SEC requires disclosure of the ratio of the median employee’s annual total compensation to that our CEO. The Company’s CEO is Mr. Wine, our Chairman and CEO.

The Company selected October 1, 2019 as the date upon which the median employee would be identified to allow sufficient time to gather the data necessary to make the determination given the global scope of our operations. The Company maintains human resource systems with relevant payroll and other compensation data both within and outside of the United States. As of October 1, 2019, our employee population, including all full-time, part-time, seasonal and temporary workers, consisted of approximately 14,000 individuals, of which approximately 9,449 or 68% were working in the United States, 4,460 or 32% were working outside of the United States and approximately 4,268 or 31% were salaried. Given the logistical difficulties and significant difference in the composition of total compensation in our operations in India, China, Japan and Vietnam, we elected to exclude all of our employees in India (132 employees), China (130 employees), Japan (6 employees), and Vietnam (51 employees) from our determination of the median employee. This meant that we excluded a total of 319 employees, or 2.3% of our total employee population, from the calculation. The median employee was selected from an adjusted employee population of approximately 13,590 full-time, part-time, seasonal and temporary workers, consisting of 9,449 employees in the United States and 4,141 employees located outside of the United States.

The median employee was identified using gross wages including overtime, vacation, jury duty, and sick time paid during the nine-month period from January 1, 2019 to October 1, 2019, and excluded any variable compensation such as equity awards, bonuses, commissions, and allowances for items such as cell phones and cars for employees which are not widely distributed throughout the employee population. Wages paid in foreign currencies were converted into U.S. dollars using the exchange rate as of October 1, 2019.

The annual total compensation for the median employee was calculated using the same methodology used for our NEOs as set forth on the Summary Compensation Table on page 37. This resulted in the median employee’s annual total compensation in 2019 as shown below.

Based on this information for fiscal year 2019, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 205.7:1.

Our shareholders have approved our 1995 Stock Option Plan, Employee Stock Purchase Plan, Deferred Compensation Plan for Directors, and the Omnibus Plan. Awards may currently be made only under the Omnibus Plan and the Employee Stock Purchase Plan.

We do not have any equity compensation plans outstanding that have not been approved by shareholders.

The following table sets forth certain information as of December 31, 2019, with respect to compensation plans under which shares of our common stock may be issued.

Our Board, on the recommendation of our Compensation Committee, approved on February 28, 2020 an amendment and restatement of the Polaris Inc. 2007 Omnibus Incentive Plan (the Plan), subject to shareholder approval at the Annual Meeting. The proposed amendment and restatement would add an additional 3,450,000 shares to the Plan share reserve. As of February 25, 2020, there were approximately 1,835,545 shares of our common stock remaining available for future awards under the Plan, which is the Company’s only equity-based compensation plan under which awards may be made.

The Plan was originally approved by our shareholders on April 19, 2007, and replaced our 1995 Stock Option Plan, 1999 Broad-Based Stock Option Plan, Restricted Stock Plan and 2003 Nonemployee Director Stock Option Plan (the Prior Plans). No awards are outstanding under any of the Prior Plans, and no additional awards may be granted under any of the Prior Plans.

The table below shows, as of February 25, 2020, the shares reserved for issuance under awards outstanding under the Plan and the Prior Plans, shares available for future awards under the Plan, and shares to be added to the Plan if the amendment and restatement is approved by our shareholders.

Shareholder approval of the Plan is being sought in order to (i) satisfy the shareholder approval requirements of the NYSE and (ii) obtain shareholder approval of the number of shares that may be subject to incentive stock options under Internal Revenue Code (Code) Section 422.

The Board believes that it is both necessary and appropriate to further increase the maximum number of shares issuable under the Plan in order to enable the Company to continue offering meaningful equity-based incentives to key employees and non-employee directors. Therefore the Board recommends that our shareholders vote FOR the Plan. Unless a contrary choice is specified, proxies solicited by the Board will be voted FOR approval of the Plan. If the proposed amendment and restatement of the Plan is approved by the shareholders, it will take effect as of April 30, 2020. If the proposed amendment and restatement is not approved, the Plan will remain in effect as it existed immediately prior to the proposed amendment and restatement.

The only change to the existing Plan is to increase the aggregate number of shares that may be issued under the Plan by 3,450,000 shares, from a total of 24,325,000 shares to 27,775,000 shares.

In determining the number of shares by which to increase the pool of shares authorized for issuance under the Plan, we considered a number of factors, including the following:

The Plan includes a number of features that we believe are consistent with the interests of our shareholders and sound corporate governance practices, including the following:

The major features of the Plan are summarized below. The summary is qualified in its entirety by reference to the full text of the amended and restated Plan, which is attached to this Proxy Statement as Appendix A.

The Plan is intended to advance the interests of our Company and its shareholders by enabling the Company and our affiliated entities to attract and retain qualified individuals through opportunities for equity participation in our Company, and to reward those individuals who contribute to the achievement of our financial and strategic business goals through incentive compensation.

The Plan is administered by the Compensation Committee of our Board. The Compensation Committee has the authority to determine, within the limits of the express provisions of the Plan, the individuals to whom awards will be granted, the nature, amount and terms of such awards and the objectives and conditions for earning such awards. The Compensation Committee may also establish subplans and modify the terms of award agreements to the extent necessary to comply with local laws in connection with awards made to participants outside of the United States. To the extent consistent with applicable law, the Compensation Committee has discretion to delegate its authority under the Plan to a subcommittee, to executive officers (with respect to awards to participants who are not directors or executive officers) or, in connection with nondiscretionary administrative duties, to other parties as it deems appropriate.

Except in connection with equity restructurings and other situations in which share adjustments are specifically authorized, the Plan prohibits the Compensation Committee from repricing any outstanding “underwater” option or SAR without prior approval of our shareholders. For these purposes, “repricing” includes amending the terms of an underwater option or SAR to lower the exercise price, or canceling an underwater option or SAR in exchange for replacement options or SARs having a lower exercise price, for other forms of awards, or for cash or other property.

A maximum of 27,775,000 shares of our common stock are available for issuance under the Plan, plus the number of shares subject to outstanding awards under the Prior Plans as of the date the Plan was originally adopted that subsequently expire or are forfeited or settled in cash (the “forfeited award shares”). The pool of shares available for issuance under the Plan may be used for all types of equity awards available under the Plan, which include stock options, SARs, restricted stock awards, restricted stock unit awards and other stock-based awards, as described in more detail below. The shares of common stock covered by the Plan are authorized but unissued shares.

Shares of common stock that are issued under the Plan or that are potentially issuable pursuant to outstanding awards will reduce the maximum number of shares remaining available for issuance under the Plan by one share for each share issued or issuable pursuant to an option or SAR award, and by three shares for each share issued or issuable pursuant to a full-value award.

Any shares of common stock subject to an award under the Plan, or to an award under any of the Prior Plans that is outstanding on the date the Plan was originally adopted, that expires, is forfeited, or is settled or exchanged for cash will, to the extent of such expiration, forfeiture, settlement or exchange, automatically again become available for issuance under the Plan. Each share that again becomes available for issuance will increase the Plan’s share reserve by the same number of shares by which the share reserve was decreased when the award was first granted. However, any shares tendered or withheld to pay the exercise price or satisfy a tax withholding obligation in connection with any award, any shares we repurchase using option exercise proceeds and any shares subject to a SAR that are not issued in connection with the stock settlement of the SAR on its exercise may not be used again for new grants.

Awards granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity acquired by the Company or any of our affiliates (referred to as “substitute awards”) will not reduce the number of shares of common stock authorized for issuance under the Plan. Additionally, if a company acquired by the Company or any of our affiliates has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition, the shares available for grant pursuant to the terms of that pre-existing plan may be used for awards under the Plan and will not reduce the shares authorized for issuance under the Plan, but only if the shares are used for awards made to individuals who were not employed by or providing services to the Company or any of our affiliates immediately prior to such acquisition.

If certain transactions with our shareholders occur that cause the per share value of our common stock to change, such as stock splits, spin-offs, stock dividends or certain recapitalizations (referred to as “equity restructurings”), the Compensation Committee will equitably adjust (i) the class of shares issuable and the maximum number and kind of shares subject to the Plan, (ii) outstanding awards as to the class, number of shares and exercise price per share, and (iii) award limitations prescribed by the Plan. Other types of transactions may also affect the common stock, such as reorganizations, mergers or consolidations. If there is such a transaction and the Compensation Committee determines that adjustments of the type previously described in connection with equity restructurings would be appropriate to prevent any dilution or enlargement of benefits under the Plan, the Compensation Committee will make such adjustments as it deems equitable.

The Compensation Committee may grant awards to any employee, non-employee director, consultant or other person providing services to the Company or our affiliates. Currently, there are approximately 400 persons employed by or otherwise in the service of our Company and our affiliates, including nine non-employee directors, who would be eligible to receive awards under the Plan.

Awards under the Plan may include stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.

The Compensation Committee may grant to participants options to purchase our common stock that qualify as incentive stock options for purposes of Section 422 of the Code (incentive stock options), options that do not qualify as incentive stock options (non-qualified stock options) or a combination thereof. The terms and conditions of stock option grants, including the number of shares, exercise price, vesting periods, and other conditions on exercise, will be determined by the Compensation Committee. All of the 3,450,000 shares being added to the shares authorized for issuance under the Plan may be issued as incentive stock options.

The per share exercise price for stock options will be determined by the Compensation Committee in its discretion, but may not be less than 100% of the fair market value of one share of our common stock on the date when the stock option is granted (except in the case of substitute awards described above). Additionally, in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise price may not be less than 110% of the fair market value of one share of common stock on the date the stock option is granted. On February 25, 2020, the fair market value of a share of our common stock was $83.82 based on the closing sale price of our common stock on the NYSE on such date.

Stock options must be exercised within a period fixed by the Compensation Committee that may not exceed ten years from the date of grant, except that in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise period may not exceed five years. No dividends or dividend equivalents may be paid or credited with respect to shares subject to an option award.

At the Compensation Committee’s discretion, payment for shares of common stock on the exercise of stock options may be made in cash, in shares of our common stock held by the participant, by withholding a number of shares otherwise deliverable upon exercise of the option, or in any manner acceptable to the Compensation Committee (including one or more forms of broker-assisted “cashless” exercise).

The Compensation Committee may grant to a participant an award of SARs, which entitles the participant to receive, upon its exercise, a payment equal to (i) the excess of the fair market value of a share of common stock on the exercise date over the SAR exercise price, times (ii) the number of shares of common stock with respect to which the SAR is exercised. The payment upon exercise of a SAR may be in cash, shares of common stock, or any combination thereof, as approved by the Compensation Committee in its sole discretion.

The per share exercise price for a SAR will be determined by the Compensation Committee in its discretion, but may not be less than 100% of the fair market value of one share of our common stock on the date when the SAR is granted (except in the case of substitute awards described above). SARs must be exercised within a period fixed by the Compensation Committee that may not exceed ten years from the date of grant. No dividends or dividend equivalents may be paid or credited with respect to shares subject to a SAR award.

The Compensation Committee may award to a participant shares of common stock subject to specified restrictions (restricted stock). Shares of restricted stock are subject to forfeiture if specified vesting conditions, such as continued employment over a specified vesting period and/or the attainment of specified performance objectives over a specified performance period, are not satisfied. Any dividends or distributions payable with respect to shares that are subject to the unvested portion of a restricted stock award will be subject to the same restrictions and risk of forfeiture as the shares to which such dividends or distributions relate.

The Compensation Committee also may award to a participant restricted stock units, each representing the right to receive in the future, in cash and/or shares of our common stock as determined by the Compensation Committee, the fair market value of a share of common stock. Restricted stock units are subject to forfeiture if specified vesting conditions, such as continued employment over a specified vesting period and/or the attainment of specified performance objectives over a specified performance period, are not satisfied. The terms and conditions of restricted stock and restricted stock unit awards are determined by the Compensation Committee. The Compensation Committee may provide for the payment of dividend equivalents on restricted stock unit awards but any such dividend equivalents will be subject to the same restrictions and risk of forfeiture as the underlying units to which such dividend equivalents relate.

The Compensation Committee may grant equity-based or equity-related awards, referred to as “other stock-based awards,” other than options, SARs, restricted stock or restricted stock units. The terms and conditions of each other stock-based award will be determined by the Compensation Committee. Payment under any other stock-based awards will be made in common stock or cash, as determined by the Compensation Committee. The Compensation Committee may provide for the payment of dividend equivalents on other stock-based awards but any such dividend equivalents will be subject to the same restrictions and risk of forfeiture as the underlying share equivalents to which such dividend equivalents relate.

Awards that vest based solely on the satisfaction by the participant of service-based vesting conditions shall be subject to a vesting period of not less than one year from the applicable date of grant. Awards whose vesting is subject to the satisfaction of performance goals shall be subject to a performance period of not less than one year. These minimum vesting and performance periods will not apply, however, (i) upon a change in control, (ii) upon termination of employment due to death, disability or retirement, (iii) to a substitute award that does not reduce the vesting period of the award being replaced, and (iv) to awards involving an aggregate number of shares not in excess of 5% of the share reserve under the Plan.

The Compensation Committee may at any time amend, terminate or modify the Plan or any award agreement issued thereunder. No such action may be taken that adversely affects in any material way any award previously granted under the Plan without the consent of the participant, except for amendments necessary to comply with applicable laws or stock exchange rules. In addition, no material amendment of the Plan may be made without shareholder approval if shareholder approval is required by law, regulation, or stock exchange rules, and no “underwater” option or SAR may be repriced in any manner (except for anti-dilution adjustments) without shareholder approval (see “Administration” above). In no event may any awards be made under the Plan after April 25, 2029.

If a change in control of our Company that involves a corporate transaction occurs, then the consequences will be as described in this paragraph unless the Compensation Committee provides otherwise in an applicable award agreement. If any outstanding award is continued, assumed or replaced by the surviving or successor entity in connection with such corporate transaction, and if within one year after the change in control a participant’s employment or other service is involuntarily terminated without cause, then (i) each of the participant’s outstanding options and SARs will become exercisable in full and remain exercisable for one year, and (ii) each of the participant’s other unvested awards will fully vest. To the extent vesting of any award is subject to satisfaction of specified performance goals, such award shall be deemed “fully vested” if the performance goals are deemed to have been satisfied at the target level of performance. If any outstanding award is not continued, assumed or replaced in connection with a change in control involving a corporate transaction, then (i) all outstanding options and SARs will become fully exercisable for a period of time prior to the effective time of the corporate transaction and will then terminate at the effective time of the corporate transaction, and (ii) all other awards will fully vest immediately prior to the effective time of the corporate transaction (with awards subject to satisfaction of specified performance goals vesting at the target level of performance). Alternatively, the Compensation Committee may elect to terminate awards in exchange for a payment with respect to each award in an amount equal to the excess, if any, between the fair market value of the shares subject to the award immediately prior to the effective date of such corporate transaction (which may be the fair market value of the consideration to be received in the corporate transaction for the same number of shares) over the aggregate exercise price (if any) for the shares subject to such award (or, if there is no excess, such award may be terminated without payment).

If a change in control of our Company that does not involve a corporate transaction occurs, the Compensation Committee may, in its discretion, take such action as it deems appropriate with respect to outstanding awards, which may include providing for the cancellation of any award in exchange for payments in a manner similar to that provided above in connection with a corporate transaction, or making such adjustments to the awards then outstanding as the Committee deems appropriate to reflect such change in control, which may include the acceleration of vesting in full or in part. The Committee will not be required to treat all awards similarly in such circumstances. For purposes of the Plan, the following terms have the meanings indicated:

The Compensation Committee may permit or require the deferral by a participant of the receipt of shares or cash in settlement of any full-value award under the Plan, and will prescribe the terms, conditions and procedures for such deferrals.

The following is a summary of the principal United States federal income tax consequences to the Company and to participants subject to U.S. taxation with respect to awards granted under the Plan, based on current statutes, regulations and interpretations.

If a participant is granted a non-qualified stock option under the Plan, the participant will not recognize taxable income upon the grant of the option. Generally, the participant will recognize ordinary income at the time of exercise in an amount equal to the difference between the fair market value of the shares acquired at the time of exercise and the exercise price paid. The participant’s basis in the common stock for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our common stock on the date the option was exercised. Any subsequent gain or loss will be taxable as a capital gain or loss. The Company will generally be entitled to a federal income tax deduction at the time and for the same amount as the participant recognizes as ordinary income, subject to Code Section 162(m) with respect to covered employees.

If a participant is granted an incentive stock option under the Plan, the participant will not recognize taxable income upon grant of the option. Additionally, if applicable holding period requirements (a minimum of two years from the date of grant and one year from the date of exercise) are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of the shares acquired at the time of exercise over the aggregate exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If shares acquired upon exercise of an incentive stock option are held for the holding period described above, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the shares will be treated as a long-term capital gain or loss, and the Company will not be entitled to any deduction. Except in the event of death, if the holding period requirements are not met, the incentive stock option will be treated as one that

does not meet the requirements of the Code for incentive stock options and the tax consequences described for nonqualified stock options will generally apply.

The current federal income tax consequences of other awards authorized under the Plan generally follow certain basic patterns. An award of restricted stock results in income recognition by a participant in an amount equal to the fair market value of the shares received at the time the restrictions lapse and the shares vest, unless the participant elects under Code Section 83(b) to accelerate income recognition and the taxability of the award to the date of grant. Restricted stock unit awards generally result in income recognition by a participant at the time payment of such an award is made in an amount equal to the amount paid in cash or the then-current fair market value of the shares received, as applicable. SAR awards result in income recognition by a participant at the time such an award is exercised in an amount equal to the amount paid in cash or the then-current fair market value of the shares received by the participant, as applicable. In each of the foregoing cases, the Company will generally have a corresponding deduction at the time the participant recognizes ordinary income, subject to Code Section 162(m) with respect to covered employees.

Code Section 162(m) denies a deduction to any publicly-held corporation for compensation paid to certain “covered employees” in a taxable year to the extent that compensation to the covered employee exceeds $1,000,000.

The foregoing discussion of tax consequences of awards under the Plan assumes that the award discussed is either not considered a “deferred compensation arrangement” subject to Section 409A of the Code, or has been structured to comply with its requirements. If an award is considered a deferred compensation arrangement subject to Section 409A but fails to comply, in operation or form, with the requirements of Section 409A, the affected participant would generally be required to include in income when the award vests the amount deemed “deferred,” would be required to pay an additional 20% income tax on such amount, and would be required to pay interest on the tax that would have been paid but for the deferral.

No awards will be made under the Plan as proposed to be amended and restated until after it has been approved by our shareholders. Because all awards under the Plan are within the discretion of the Compensation Committee, neither the number nor types of future Plan awards to be received by or allocated to particular participants or groups of participants are presently determinable.

The Board, upon recommendation of the Compensation Committee, unanimously recommends a vote FOR the proposal to approve the Amended and Restated 2007 Omnibus Incentive Plan.

The Audit Committee has selected Ernst & Young LLP (EY) as our independent registered public accounting firm for fiscal 2020, and the Board is asking shareholders to ratify that selection. Although current law, rules and regulations, as well as the Audit Committee Charter require our independent registered public accounting firm to be engaged, retained, and supervised by the Audit Committee, the Board considers the selection of an independent registered public accounting firm to be an important matter of shareholder concern and considers a proposal for shareholders to ratify such selection to be an opportunity for shareholders to provide direct feedback to the Board on a significant issue of corporate governance.

If the selection of EY as our independent registered public accounting firm for fiscal 2020 is not ratified by our shareholders, the Audit Committee will review its future selection of an independent registered public accounting firm in the light of that vote result.

Representatives of EY will be present at the virtual Annual Meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.

The Board, upon recommendation of the Audit Committee, unanimously recommends a vote FOR the ratification of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2020.

The Audit Committee reports to and acts on behalf of the Board by providing oversight of (1) the integrity of our financial statements, (2) the effectiveness of the Company’s internal controls over financial reporting, (3) our compliance with legal and regulatory requirements, (4) the independent registered public accounting firm’s performance, qualifications and independence and (5) the responsibilities, performance, budget and staffing of our internal audit function. The Audit Committee is comprised of four directors, all of whom meet the standards of independence adopted by the SEC and the NYSE.

In performing the Audit Committee oversight responsibilities, we have reviewed and discussed our audited financial statements for the year ended December 31, 2019 with management and with representatives of EY, our independent registered public accounting firm. The Audit Committee also reviewed, and discussed with management and representatives of EY, management’s assessment and report and EY’s report and attestation on the effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.

The Audit Committee also discussed with the independent registered public accounting firm matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. The Audit Committee has received from our independent registered public accounting firm the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communication with the audit committee concerning independence, and the Audit Committee has discussed the independence of EY with representatives of such firm. The Audit Committee is satisfied that the non-audit services provided to us by the independent registered public accounting firm are compatible with maintaining their independence.

Management is responsible for our system of internal controls and the financial reporting process. EY is responsible for performing an audit of the consolidated financial statements in accordance with the standards of the PCAOB and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

Based on the reviews and discussions referred to in this Report, the Audit Committee recommends to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

The following table presents fees for professional audit services rendered by EY for the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2018 and December 31, 2019, and fees for other services rendered by EY.

The Audit Committee’s charter provides that it has the sole authority to review in advance and grant any pre-approvals of (i) all auditing services to be provided by the independent registered public accounting firm, (ii) all significant non-audit services to be provided by the independent registered public accounting firm as permitted by Section 10A of the Exchange Act and the PCAOB and (iii) all fees and the terms of engagement with respect to such services. All audit and non-audit services performed by EY during fiscal 2019 were pre-approved pursuant to the procedures outlined above.

We are providing our shareholders with the opportunity to vote to approve the compensation of our Named Executive Officers (NEOs) as disclosed in this Proxy Statement. As described in the Compensation Discussion and Analysis (CD&A), our executive compensation philosophy and programs align executive compensation decisions with our desired business direction, strategy and performance. The primary objectives and priorities of the compensation program include:

Our shareholders have a right to cast an advisory vote on our executive compensation program at the Annual Meeting. As a result, we are presenting this proposal, which gives you, as a shareholder, the opportunity to vote on the following resolution:

“RESOLVED, that the shareholders approve the compensation of Polaris Inc. NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in this Proxy Statement.”

The Board urges shareholders to endorse the compensation programs for our NEOs by voting “FOR” the resolution.

As discussed in the CD&A contained in this Proxy Statement, the Compensation Committee of the Board believes that the executive compensation provided for 2019 is reasonable and consistent with our pay for performance philosophy. Compensation for the year is established in January and is guided by the prior year performance as well as projections for the forthcoming year. In deciding how to vote on this proposal, the Board advises you to consider our pay for performance philosophy coupled with the factors related to the compensation of our NEOs in fiscal 2019, each of which is discussed in the CD&A.

Because your vote is advisory, it will not be binding on the Board and will not overrule any decision by the Board or require the Board to take any action. However, the Board and the Compensation Committee will carefully review the voting results. To the extent there is any significant negative vote on this proposal, we may consult directly with shareholders to better understand the concerns that influenced the vote. The Board and the Compensation Committee would consider constructive feedback obtained through this process in making future decisions about executive compensation programs.

The Board, upon recommendation of the Compensation Committee, unanimously recommends a vote FOR approval of the resolution to approve the compensation of our Named Executive Officers.

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of February 14, 2020 by each person known to us who then beneficially owned more than 5% of the outstanding shares of our common stock, each director, each nominee for director, each NEO and all current executive officers and directors as a group. As of February 14, 2020, there were 61,564,788 shares of common stock outstanding. Except as otherwise indicated, the named beneficial owner has sole voting and investment powers with respect to the shares held by such beneficial owner. The table also includes information with respect to CSEs and deferred stock units credited as of February 14, 2020 to the accounts of each director as described in this Proxy Statement under the heading “Director Compensation.”

If you are a “street name” shareholder (meaning that your shares are registered in the name of your bank or broker), you will receive instructions from your bank, broker or other nominee describing how to vote your shares.

Whichever method you use, the proxies identified on the proxy will vote the shares of which you are the shareholder of record in accordance with your instructions. If you submit a proxy without giving specific voting instructions, the proxies will vote those shares as recommended by the Board.

The Board is not aware of any matters that are expected to come before the Annual Meeting other than those referred to in this Proxy Statement. If any other matter should come before the Annual Meeting, the persons named in the accompanying proxy intend to vote the proxies in accordance with their best judgment.

Under the rules of the SEC, if a shareholder wants the Company to include a proposal in our Proxy Statement and form of proxy for presentation at our 2021 Annual Meeting of Shareholders, the proposal must be submitted in writing and received by our Corporate Secretary at our principal executive offices by November 13, 2020. The proposal must comply with the rules of the SEC and our bylaws, which are described below. If a shareholder intends to introduce an item of business or nominate a person as a director at the 2021 Annual Meeting, without including the proposal or nomination in the Proxy Statement, we must receive notice of that intention no later than January 30, 2021.

A shareholder’s notice to the Company must include the information required by our bylaws, including, if the item of business does not relate to the nomination of a person to serve as a director, a brief description of the business desired to be brought before the meeting and the reasons for conducting the business at the meeting, any material interest of the shareholder or any associated person of the shareholder in the business desired to be brought before the meeting, the name and address of the shareholder and any associated person of the shareholder as they appear on our books, and specified information regarding the shareholder’s interests in our capital stock. A shareholder’s notice to the Company of the nomination of a person to serve as a director must include, as applicable, similar information as required above, as well as the name of any director nominee, information about the nominee required by SEC rules and the director nominee’s consent to be named and serve if elected.

We have adopted a procedure approved by the SEC called householding, which allows us to deliver a single set of our Annual Report on Form 10-K, which includes the Annual Report to Shareholders (together, the Annual Report), Proxy Statement or Notice to shareholders who do not participate in electronic delivery and have the same last name and address. This process helps eliminate duplicate mailings and reduces our printing and mailing costs.

If your household would like to receive individual rather than multiple mailings in the future, please write to Broadridge Investor Communications Solutions, Householding Department, 51 Mercedes Way, Englewood, New York 11717, or call 800-542-1061. If a broker or other nominee holds your shares, you may continue to receive multiple mailings. Please contact your broker or other nominee directly to discontinue multiple mailings from them.

Your household may have received a single set of our Annual Report and Proxy Statement; if you would like another set, please write to Broadridge Investor Communications Solutions at the address above.

Our Annual Report is available on our website at www.polaris.com in the “Investors” section. You may also request a free copy of our Annual Report and Proxy Statement by writing to the Corporate Secretary, Polaris Inc., 2100 Highway 55, Medina, MN 55340, or by calling (763) 542-0500.

Whenever used in this Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized.

Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Plan is to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid or exercised by the Participant’s executor, administrator, or legal representative.

The Committee may grant Awards under the Plan in substitution for, or in connection with the assumption of, existing awards granted or issued by another entity and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to which the Company or an Affiliate is a party. The terms and conditions of the Substitute Awards may vary from the terms and conditions set forth in the Plan to the extent that the Committee at the time of the grant may deem appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted.

All obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

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How to Participate in the Virtual Meeting


PARTICIPATE VIA THE INTERNET To attend the virtual meeting, visit www.virtualshareholdermeeting.com/PII2020	VOTING DURING THE MEETING To vote your shares during the meeting, click on the vote button provided on the screen and follow the instructions provided	SUBMITTING QUESTIONS Questions may be submitted live during the meeting by typing them in the dialog box provided on the bottom corner of the screen

For technical assistance on the day of the Annual Meeting, call the support line at 800-586-1548 (Toll Free) or 303-562-9288 (International Toll)



Other Ways to Vote Your Shares


INTERNET Go to http://www.proxyvote.com and follow the instructions (have the proxy card or internet notice in hand when you access the website)	TELEPHONE Dial 1-800-690-6903 and follow the instructions (have the proxy card in hand when you call)	MAIL If you received paper copies of our proxy materials, mark your selection on the enclosed proxy card, date and sign your name, and promptly mail the proxy card in the postage-paid envelope provided

Please see page 65 for proxy voting deadlines.

LEAD INDEPENDENT DIRECTOR DUTIES AND RESPONSIBILITIES
• Presides over Board executive sessions of independent directors		• In consultation with the Chairman, approves: – Key information sent to the Board – Meeting agendas for the Board – Meeting schedules to ensure that there is sufficient time for discussion of all agenda items
• Serves as the liaison between the Chairman and independent directors		• Has authority to call meetings of independent directors
• If requested by major shareholders, ensure his/her availability for consultation and direct communication		• Conducts and facilitates annual Board self-evaluation
• Communicates with CEO about strategic business issues, government processes and board relationships		• Coordinates with the Compensation Committee on CEO evaluation

(2)	All members of the Compensation Committee have been determined to be “independent” by the Board in accordance with our Corporate Governance Guidelines and the applicable listing requirements of the NYSE.
(3)	All members of the Corporate Governance and Nominating Committee have been determined to be “independent” by the Board in accordance with our Corporate Governance Guidelines and the applicable listing requirements of the NYSE.

1.	Elect three Class II directors for three-year terms ending in 2023.
2.	Approve the Amended and Restated 2007 Omnibus Incentive Plan (the Plan) to increase the number of shares of our common stock authorized for awards from 24,325,000 to 27,775,000.
3.	Ratify the selection of Ernst &Young LLP as our independent registered public accounting firm for fiscal 2020.
4.	Submit an advisory vote to approve the compensation of our Named Executive Officers.
5.	Act on any other matters that may properly come before the meeting.

Table of Contents

Proxy Statement Summary	4

Corporate Governance	9

Effective, Diverse, and Independent Board	9
Board Leadership Structure	10
Board Meetings	10
Committees of the Board and Meetings	10
Risk Oversight	13
Shareholder Engagement	13
Corporate Governance Guidelines and Independence	14
Code of Business Conduct and Ethics	14
Hedging and Pledging Policy	14
Communications with the Board	14
Certain Relationships and Related Transactions	15

Proposal 1 — Election of Directors	16

General Information	16
Information Concerning Nominees and Directors	16

Director Compensation	20

2019 Director Compensation Table	21

Compensation Discussion and Analysis	23

Executive Summary	23
Executive Compensation Program Components	27
Determining Executive Compensation	28
2019 Compensation Decisions	30
Other Executive Compensation Arrangements, Policies and Practices	34

Compensation Risk Assessment	36

Compensation Committee Report	36

Executive Compensation	37

Summary Compensation Table	37
All Other Compensation Table	38
Grants of Plan-Based Awards in 2019	39
Outstanding Equity Awards at 2019 Fiscal Year-End	40
Option Exercises and Stock Vested in 2019	42
Nonqualified Deferred Compensation in 2019	43

Potential Payments Upon Termination or Change In Control	44

Severance Arrangements with Named Executive Officers	44
Equity Award Treatment Upon Termination	46
Non-Compete and Non-Solicitation Agreements	46
Potential Payments to Named Executive Officers Upon Termination	47
Potential Payments to Our Named Executive Officers	48

Pay Ratio Disclosure	49

Equity Compensation Plan Information	50

Proposal 2 — Approval of the Amended and Restated 2007 Omnibus Incentive Plan to Increase the Number of Shares of our Common Stock Authorized for Awards from 24,325,000 to 27,775,000	51

Proposal 3 — Ratification of Selection of Independent Registered Public Accounting Firm	57

Audit Committee Report	58

Fees Paid to Independent Registered Public Accounting Firm	59

Audit and Non-Audit Fees	59
Audit Committee Pre-Approval Requirements	59

Proposal 4 — Advisory Vote on Approval of the Compensation of the Company’s Named Executive Officers	60

Security Ownership of Certain Beneficial Owners and Management	61

Questions and Answers about the Annual Meeting and Voting	63

Other Matters	68

Submission of Shareholder Proposals and Nominations	68

Additional Information	69

Annex A — Polaris Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 30, 2020)	A-1

•	Independent and diverse Board
•	Majority voting standard
•	Robust Lead Independent Director responsibilities
•	Executive sessions of independent directors before and/or after each Board meeting
•	CEO and senior management succession planning
•	Substantive annual Board and committee self-evaluations
•	Active shareholder engagement program
•	Non-employee director stock ownership requirements
•	Robust Code of Conduct
•	“Clawback” policy for performance-based compensation

•	Board/Committee information and materials;
•	Board/Committee meeting mechanics;
•	Board/Committee composition and structure (including diversity and mix of skills, qualifications, viewpoints and experience);
•	Board/Committee responsibilities and accountability (including with respect to strategy, risk management, operating performance, CEO and management succession planning, corporate governance, sustainability, and corporate culture);
•	Board meeting conduct and culture; and
•	Overall performance of Board members.

	Board	Audit	Compensation	Corporate Governance and Nominating	Technology
George W. Bilicic*	X	X		X	X
Annette K. Clayton	X		X
Kevin M. Farr*	X				X
Gary E. Hendrickson	X			X
Gwenne A. Henricks	X	X			X
Bernd F. Kessler	X			X	X
Lawrence D. Kingsley	X		X		X
Gwynne E. Shotwell	X	X			X
John P. Wiehoff⁽¹⁾	X		X
Scott W. Wine					X
Number of fiscal year 2019 meetings	5	9	5	2	2

Director Fees
Board Member	$	85,000
Lead Independent Director	$	30,000
Audit Committee Chair	$	20,000
Compensation Committee Chair	$	15,000
Corporate Governance and Nominating Committee Chair	$	10,000
Technology Committee Chair	$	15,000
Audit Committee Member	$	10,000
Compensation Committee Member	$	7,500
Corporate Governance and Nominating Committee Member	$	5,000
Technology Committee Member	$	2,500

Name	Fees Earned or Paid in Cash ($)⁽¹⁾	Stock Awards ($)⁽²⁾	All Other Compensation ($)⁽³⁾	Total ($)
George W. Bilicic	102,500	130,052	7,681	240,233
Annette K. Clayton	110,000	130,052	31,643	271,695
Kevin M. Farr	117,500	130,052	31,282	278,834
Gary E. Hendrickson	112,500	130,052	52	242,604
Gwenne A. Henricks	97,500	130,052	4,999	232,551
Bernd F. Kessler	100,000	130,052	281	230,333
Lawrence D. Kingsley	96,875	130,052	10,690	237,617
Gwynne E. Shotwell⁽⁴⁾	81,521	130,052	15,864	227,437
John P. Wiehoff	137,500	130,052	0	267,552

(1)	Directors may defer all or a portion of the fees otherwise payable to them in accordance with our Director Deferred Compensation Plan. Each of the current directors deferred all fees otherwise payable to him or her in 2019 in accordance with the Director Deferred Compensation Plan. The deferred amounts were converted into CSEs at the then current market price per share of our common stock. The aggregate number of CSEs held by each non-employee director as of December 31, 2019 is reflected in the “Stock Awards” column of the “Non-Employee Directors - Outstanding Equity Awards at Fiscal Year-End” table appearing below.
(2)	On April 25, 2019, the continuing non-employee directors were each awarded under the Omnibus Plan 1,372 deferred stock units, each with a value equal to one share of our common stock. The grant date fair value for these deferred stock units was $94.79 per unit and is calculated in accordance with FASB ASC Topic 718 based on the closing market price of our common stock on the award date. The aggregate number of deferred stock units and CSEs held by each non-employee director as of December 31, 2019 is reflected in the “Stock Awards” column of the “Non-Employee Directors - Outstanding Equity Awards at Fiscal Year-End” table appearing below.
(3)	The following table provides more information on the type and amount of benefits included in the All Other Compensation column.

Name	Perquisites ($)^(a)	Gross Up on Perquisites ($)^(b)	Total ($)
George W. Bilicic	4,132	3,549	7,681
Annette K. Clayton	18,309	13,334	31,643
Kevin M. Farr	16,888	14,394	31,282
Gary E. Hendrickson	52	0	52
Gwenne A. Henricks	2,837	2,162	4,999
Bernd F. Kessler	281	0	281
Lawrence D. Kingsley	5,902	4,788	10,690
Gwynne E. Shotwell	9,003	6,861	15,864
John P. Wiehoff	0	0	0

Name	Stock Awards⁽¹⁾
George W. Bilicic	5,186
Annette K. Clayton	66,674
Kevin M. Farr	15,127
Gary E. Hendrickson	22,871
Gwenne A. Henricks	10,542
Bernd F. Kessler	28,911
Lawrence D. Kingsley	10,131
Gwynne E. Shotwell	2,340
John P. Wiehoff	52,557

Name	Title
Scott W. Wine	Chairman of the Board and Chief Executive Officer (CEO)
Michael T. Speetzen	Executive Vice President – Chief Financial Officer (CFO)
Kenneth J. Pucel	Executive Vice President – Global Operations, Engineering and Lean
Christopher S. Musso	Senior Vice President – Electrification Strategy⁽¹⁾
James P. Williams	Senior Vice President – Chief Human Resources Officer (CHRO)

What We Do		What We Don’t Do
	Majority of executive pay is performance-based and not guaranteed		No hedging of stock by directors or executives, limited ability to pledge
	Appropriate balance between short-term and long-term compensation to discourage short-term risk taking		No excise tax gross-ups upon a change in control
	“Double trigger” change in control and termination of employment provisions		No payment of dividends or dividend equivalents on unearned or unvested restricted stock units
	Rigorous stock ownership guidelines: CEO must own 7x his base salary; CFO must own 4x his base salary		No repricing of underwater of stock options
	Clawback policy allows recovery of cash- or equity-based incentive compensation payments upon occurrence of certain financial restatements or certain misconduct in accordance with the terms of the policy
	Varied quantitative performance measures
	Executive sessions following each Compensation Committee meeting

*	For each year includes annual non-equity incentive compensation at target along with the grant date fair value of RSUs, PRSUs (at target) and options granted in such years.
**	For each year includes: (i) actual annual non-equity incentive compensation earned for such year (ii) the fiscal year end value of RSUs granted during such year, (iii) the actual vested value of PRSUs earned during such year, and (iv) the in-the-money value of options granted during such year as of December 31, 2019.

Base Salary:		Increases were made for all NEOs based on individual performance, with consideration given to applicable market data.
Annual Incentive Plan:		The Company achieved adjusted earnings per share of $6.32 under the Senior Executive Annual Incentive Compensation Plan (SEP) warranting payouts of an annual cash incentive to each of our NEOs.
Stock Options		Consistent with our compensation philosophy of linking pay and performance, stock options were granted to NEOs which vest in three equal installments on the first, second and third anniversaries of the January 30, 2019 grant date and have an exercise price of $84.58, which was the fair market value of a share of our common stock on the date of grant.
Performance Restricted Stock Units (PRSUs)		2017-2019 PRSU Awards: The Company’s PRSU awards for the 2017–2019 performance period paid out at 108.7% of target. The 2017–2019 LTIP was based on relative TSR performance compared to peer companies and placed the Company at the 58.7 percentile of the peer group resulting in a slightly above target payout. 2019-2021 PRSU Awards: The Compensation Committee granted NEOs PRSU awards for the 2019-2021 performance period with target performance objectives established at net income of $515 million, revenue of $7,042 million, and a relative TSR rank in the 50^thpercentile, subject to achievement of an adjusted ROIC of 12% before any payout under the Net Income or Revenue metrics is permitted under the PRSU.
Restricted Stock Units (RSUs)		To provide stability to the total compensation package and a retention benefit, while maintaining a focus on stock growth, RSU awards were granted to our NEOs that vest in full on January 30, 2022.

	Annualized Total Shareholder Return⁽¹⁾
Percentile		1-Year			3-Year			5-Year
25^thPercentile⁽²⁾			24	%		3%			2	%
Median⁽²⁾			35	%		8%			6	%
75^thPercentile⁽²⁾			44	%		14%			12	%
Polaris Inc.			36	%		10%			(5	)%
Polaris Percentile			57	%		61%	⁽³⁾		8	%

(1)	1-Year, 3-Year and 5-Year Total Shareholder Return are annualized total shareholder rates of return reflecting the stock price appreciation plus reinvestment of dividends, as of December 31, 2019.
(2)	These percentiles represent Total Shareholder Return of the members of our 2019 Peer Group listed on page 29.
(3)	The 3-Year annualized Total Shareholder Return of 61% in this table differs from the 58.7% in the table above due to a change in the peer groups and different measurement dates for the performance periods.

Compensation Type	Compensation Component	Purpose	Key Features
Fixed	Base Salary	• Provide a fixed level of compensation on which executive officers can rely	• Salary levels set based on an assessment of: – Level of responsibility – Experience and time in position – Individual performance – Future potential – Salary level relative to market median for most applicable comparator job – Internal pay equity considerations • Salary levels are reviewed annually by the Compensation Committee and adjusted as appropriate based on market data
	Annual Cash Incentive	• Provide explicit incentives to achieve or exceed annual budgeted earnings per share objectives • Link pay to performance • Align performance objectives with interests of our shareholders	• Target incentive opportunity expressed as a percentage of executive officer’s base salary, based on responsibilities of position, expected level of contribution and consideration of market data • Maximum potential payouts based on attainment of specified levels of financial performance • For 2019 awards, actual payouts may vary based on the degree to which financial performance objectives are achieved and on consideration of other Company, business unit and individual performance factors, as determined by the Compensation Committee
Variable	Long-Term Incentives (Including Stock Options, PRSUs and RSUs)	• Provide executive officers with incentives to achieve multi-year financial and operational objectives • Link pay to financial, operational and stock price performance • Align executive officers’ interests with the interests of our shareholders	• PRSUs are earned based on the degree to which specified financial objectives are attained over a three-year performance period • Target incentive opportunity based on responsibilities of position, expected level of contribution and consideration of market data • Stock options provide value to executive officers only if stock price increases over the stock option term, generally ten years • RSUs may vest upon completion of a specified period of employment • All grants are approved by the Compensation Committee • Actual earned PRSUs are determined by the Compensation Committee
Other	Benefits and Perquisites	• Provide an overall compensation package that is competitive with those offered by companies with whom we compete for executive talent • Provide a level of retirement income and promote retirement savings in a tax-efficient manner	• Participation in 401(k) plan and health and welfare plans generally made available to our employees as well as supplemental medical and dental coverage through Ultimate Health. • Executive officers may participate in a non-qualified supplemental retirement savings plan and will receive an employer match up to 5% on base salary and Senior Executive Plan deferral contributions when their 401(k) participation has been limited by IRS annual contribution rules • Perquisites described on page 35
	Post- Employment Compensation (Severance and Change in Control Arrangements)	• Enable executive officers to evaluate potential transactions focused on shareholder interests • Provide continuity of management • Provide a bridge to next professional opportunity in the event of an involuntary termination	• Double-trigger change in control severance arrangements • Double-trigger accelerated vesting of equity awards upon change in control • Severance for termination by the Company without cause or for good reason resignation • Non-compete and non-solicitation restrictions following termination of employment

BorgWarner Inc.	Hasbro Inc.	Parker-Hannifin Corporation	The Timken Company
Brunswick Corporation	IDEX Corporation	Pentair, plc	The Toro Company
Donaldson Company, Inc.	Kennametal Inc.	Regal Beloit Corporation	Thor Industries, Inc.
Dover Corporation	Leggett & Platt, Incorporated	Snap-On, Inc.
Flowserve Corporation	LKQ Corporation	Stanley-Black & Decker, Inc.
Harley-Davidson, Inc.	Mattel, Inc.	Terex Corporation

	Revenue ($)⁽¹⁾		Market Cap ($)⁽²⁾			Employees (#)
25th Percentile	$3,240		$	4,700		9,500
Median	$4,355		$	7,290		17,000
75th Percentile	$7,135		$	10,940		24,000
Polaris	$6,783		$	6,221		14,000
Polaris Percentile	74	%	38		%	45	%

(1)	Revenue reflected the most recent fiscal year end.
(2)	As of December 31, 2019.

Name	Annualized Base Salary in 2019	Percentage Increase (%)
Scott W. Wine	1,035,000	2.0
Michael T. Speetzen	630,000	5.0
Kenneth J. Pucel	675,000	2.3
Christopher S. Musso	557,000	3.1
James P. Williams	470,000	3.8

	Adjusted EPS
Threshold	$5.00
Target	$6.25
Maximum	$7.56
Actual	$6.32

Name	Suggested Payout as % of Base Salary⁽¹⁾	Actual Incentive Payout as a % of Base Salary	Actual Incentive Amount Paid ($)
Scott W. Wine	128.1	129	1,325,835
Michael T. Speetzen	102.5	106	660,000
Kenneth J. Pucel	102.5	105	705,000
Christopher S. Musso	102.5	81	450,000
James P. Williams	82.0	91	425,000

Named Executive Officer	Number of Shares Subject to Stock Option
Scott W. Wine	183,728
Michael T. Speetzen	45,932
Kenneth J. Pucel	60,368
Christopher S. Musso	44,620
James P. Williams	32,809

	Weight of Metric	Threshold		Target		Maximum
Net Income Growth* (in millions)	50%	$	149	$	515	$	639
Revenue Growth* (in millions)	25%	$	5,162	$	7,042	$	7,452
Relative TSR (percentile)	25%		25^th		50^th		≥90^th

Name	Threshold Stock Units (#)	Target Stock Units (#)	Maximum Stock Units (#)
Scott W. Wine	10,346	20,691	41,382
Michael T. Speetzen	2,587	5,173	10,346
Kenneth J. Pucel	3,400	6,799	13,598
Christopher S. Musso	2,513	5,025	10,050
James P. Williams	1,848	3,695	7,390

	Actual 2019 TSR Percentile	Percent of Target Earned (%)
Threshold⁽¹⁾	25	50.0
Target⁽¹⁾	50	100.0
Maximum⁽¹⁾	>90	150.0
Actual	58.7	108.7

Named Executive Officer	2019 RSUs Granted
Scott W. Wine	20,691
Michael T. Speetzen	5,173
Kenneth J. Pucel	6,799
Christopher S. Musso	5,025
James P. Williams	3,695

•	Medical insurance coverage or cash equivalent for retirees and their spouses from age 55 to 64 with coverage coinciding with Medicare Part B on and after age 65;

•	Dental insurance coverage for retirees and their spouses at the same coverage level with the same provider as an active employee;

•	Continued annual physical exams at the Mayo Clinic for retirees and their spouses in accordance with the active officer benefit;

•	Continued use of Polaris products in accordance with the active NEO benefits, including related parts, garments and accessories;

•	For SEP participants, a possible prorated payout under the plan based on the time worked during the incentive compensation award period payable in accordance with the normal payment schedule; and

•	For vested stock options, an exercise period of 36 months or the full term of the option for options issued after May 2015; for outstanding stock options that have not vested as of the retirement date, the option will immediately vest and remain exercisable for 36 months or the full term of the option for all options issued after May 2015, provided the grant occurred at least 12 months prior to the retirement date and notice of retirement was given to the Company at least one-year in advance.