APi Group Corp
APG DEF 14A Report ended May 16, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
___________________
|
Filed by the
Registrant
|
x
|
Filed by a party other than the
Registrant
|
o
|
Check the appropriate box:
|
o
|
Preliminary Proxy Statement
|
|
|
o
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
|
|
x
|
Definitive Proxy Statement
|
|
|
o
|
Definitive Additional Materials
|
|
|
o
|
Soliciting Material Under Rule 240.14a-12
|
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
|
x
|
No fee required.
|
|
|
o
|
Fee paid previously with preliminary materials.
|
|
|
o
|
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1) and 0-11.
|
|
Notice of
2025 Annual Meeting
of Shareholders
|
It is my pleasure to invite you to attend APi Group Corporation’s 2025 Annual Meeting of
Shareholders (“2025 Annual Meeting”). The 2025 Annual Meeting will be held on May 16, 2025,
at 8:30 a.m. (Central Time) in virtual-only format conducted via live webcast at
www.virtualshareholdermeeting.com/APG2025. You will be able to participate, submit questions
and vote your shares electronically. The information for how to attend virtually and vote at the
2025 Annual Meeting is described below. At the 2025 Annual Meeting, you will be asked to:
1.
Elect nine directors for a one-year term expiring at the 2026 Annual Meeting of
Shareholders;
2.
Ratify the appointment of KPMG LLP as our independent registered public accounting firm
for the fiscal year ending December 31, 2025;
3.
Approve, on an advisory basis, the compensation of our named executive officers;
4
.
Approve the amendment of our certificate of incorporation to increase the number of
authorized shares of common stock; and
5.
Transact such other business as may properly come before the 2025 Annual Meeting and
any adjournment or postponement of the 2025 Annual Meeting.
Only shareholders of record as of the close of business on March 21, 2025, may vote at the
2025 Annual Meeting.
It is important that your shares be represented at the 2025 Annual Meeting, regardless of the
number of shares you may hold.
Whether or not you plan to attend, please vote using the
Internet, by telephone or by mail, in each case by following the instructions in our proxy
statement
. This will not prevent you from voting your shares in person if you are present
virtually at the 2025 Annual Meeting.
Louis B. Lambert
Senior Vice President, General Counsel and Secretary
April 4, 2025
We have elected to use the “Notice and Access” method of providing our proxy materials over
the Internet. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials
containing instructions on how to access our proxy statement and annual report on or about
April 4, 2025.
Our proxy statement and annual report are available online at
http://materials.proxyvote.com/00187Y.
APi Group Corporation, 1100 Old Highway 8 NW, New Brighton, MN 55112
Table of Contents
|
Shareholder Engagement
|
|
|
1
|
PROXY SUMMARY
Annual Meeting
Date and Time
May 16, 2025
8:30 a.m. (Central Time)
|
Location
Virtual-only at
www.virtualshareholdermeeting.com/APG2025
|
Record Date
March 21, 2025
|
Voting Matters and Board Recommendations
|
Matter
|
Board Recommendation
|
Page
|
||
|
Proposal 1
—Election of Directors
|
FOR each Director Nominee
|
15
|
||
|
Proposal 2
—Ratification of KPMG as Independent Auditor
|
FOR
|
45
|
||
|
Proposal 3
—Advisory Vote on Executive Compensation
|
FOR
|
47
|
||
|
Proposal 4
—Increase of Authorized Shares
|
FOR
|
48
|
How to Vote
|
Before the Meeting
|
During the Meeting
|
||
via the Internet
at www.proxyvote.com
|
by Mail
|
by Telephone
at 1-800-690-6903
|
www.virtualshareholdermeeting.com/APG2025
|
Board of Directors
|
Name
|
Director
Since
|
Independent
|
Audit
Committee
|
Compensation
Committee
|
Nominating
and
Corporate
Governance
Committee
|
|
Sir Martin E. Franklin, Board Co-Chair
|
2017
|
No
|
|||
|
James E. Lillie, Board Co-Chair
|
2017
|
Yes
|
|||
|
Ian G.H. Ashken
|
2019
|
Yes
|
✓*
|
✓
|
|
|
Russell A. Becker
|
2019
|
No
|
|||
|
Paula D. Loop
|
2022
|
Yes
|
✓
|
✓
|
|
|
Anthony E. Malkin
|
2019
|
Yes
|
✓
|
||
|
Thomas V. Milroy
|
2017
|
Yes
|
✓*
|
||
|
Cyrus D. Walker
|
2019
|
Yes
|
✓
|
✓*
|
|
|
Carrie A. Wheeler
|
2019
|
Yes
|
✓
|
|
|
✓ Member
* Chair
|
|
3
|
Proxy Summary
Financial Highlights
1
Refer to Appendix A for reconciliation of non-GAAP measures to most directly comparable
GAAP measures.
2024 Executive Compensation Key Elements
2024 CEO Pay Decisions
|
4
|
|
CORPORATE GOVERNANCE
Overview
We are committed to principles of effective corporate governance and to high ethical standards,
as well as compliance with all applicable governance standards of the SEC and the NYSE.
Highlights of our current governance framework are described below.
|
ü
|
Non-classified Board – annual election of all
directors
|
ü
|
Board oversight of risk management
|
|
ü
|
Independent Lead Director and Committees
|
ü
|
Executive Sessions during each Board
meeting with non-employee directors in
attendance
|
|
ü
|
Separate CEO and Board Co-Chairs
|
ü
|
Annual Board and Committee self-
evaluations
|
|
ü
|
Majority voting standard for uncontested
director elections
|
ü
|
Age limit for directors (75)
|
|
ü
|
Code of Conduct applicable to all directors
and executive officers
|
ü
|
Director and executive officer stock
ownership requirements
|
|
ü
|
Clawback policy for performance-based
compensation
|
ü
|
Open communication encouraged among
directors and management
|
Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines (the “Governance Guidelines”), which
set forth our governance principles and policies relating to, among other things:
•
director independence;
•
director qualifications and responsibilities;
•
mandatory retirement age for independent directors at 75;
•
Board structure and meetings;
•
leadership team succession; and
•
the performance evaluation of our Board.
Our Governance Guidelines are available in the Investor Relations section of our website at
www.apigroup.com. The Board reviews its Governance Guidelines from time to time to evaluate
evolving corporate governance practices and to ensure the guidelines continue to best serve the
Company.
Board Composition and Diversity
Our Board brings deep expertise and broad perspectives from a diversity of industry
experiences, backgrounds, nationalities, ages and other attributes. Our Board believes that this
diversity generates better ideas and perspectives, increases the Board’s overall effectiveness,
and puts it in a better position to make complex decisions and execute APi Group’s long-term
strategic objectives. Currently, our Board comprises 22% female, 11% BIPOC (black/
indigenous/people of color), and three different nationalities. Our Board is 78% independent.
The Nominating and Corporate Governance Committee considers the Board’s overall balance of
diversity of perspectives, backgrounds and experiences in areas relevant to the Company’s
strategy. We view diversity broadly and evaluate a wide range of criteria as we make
selections, including, among others, functional areas of experience, educational background,
employment experience, and industry-specific experience. When selecting Board nominees, the
Nominating and Corporate Governance Committee also assesses other factors it deems
|
|
5
|
Corporate Governance
necessary to develop an effective Board, including leadership, integrity, judgment, intelligence,
interpersonal skills, 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.
Board Leadership Structure
The Board has not adopted a formal policy regarding the need to separate or combine the
offices of Chief Executive Officer (“CEO”) and Co-Chairs of the Board. Instead, the Board
remains free to make this determination from time to time in a manner that seems most
appropriate for the Company. Currently, we separate the positions of our CEO and Co-Chairs of
the Board. The CEO is responsible for the day-to-day leadership and performance of the
Company, while the Co-Chairs of the Board provide strategic guidance to the CEO and set the
agenda for and preside over the Board meetings. We believe that the current separation
provides a more effective monitoring and objective evaluation of the CEO’s performance. The
separation also allows the Co-Chairs of the Board to strengthen the Board’s oversight of our
performance and governance standards.
Director Independence
The Board has affirmatively determined that each of Messrs. Lillie, Ashken, Milroy, Malkin and
Walker and Mses. Loop and Wheeler are “independent” as that term is defined under the
applicable rules and regulations of the SEC and the NYSE listing standards, as well as our
Governance Guidelines. Mr. Milroy serves as lead independent director. Because Sir Martin
controls the entity which receives advisory fees from us, he is not independent under NYSE
listing standards. As CEO of the Company, Mr. Becker is also not independent.
Board Role in Risk Oversight
Our full Board has responsibility for overseeing APi’s overall approach to risk management and
is actively engaged in addressing the most significant risks facing the company. While the Board
and its Committees oversee key risk areas, our leadership team is responsible for day-to-day
risk management, identification and mitigation, as well as bringing to the Board’s attention
emerging risks and highlighting the top enterprise risks. We engage in an Enterprise Risk
Management (“ERM”) process that evaluates risks over the short-term, medium-term and long-
term. The ERM process consists of periodic risk assessments performed by various functional
leader groups during the year. Our leadership team presents these assessments to the Audit
Committee to ensure that the process is sound and complete, oversight is appropriate, and the
risks and risk assessments are properly reviewed. The other Committees of the Board consider
the risks within their areas of responsibility. The Board satisfies its oversight responsibility
through reports by each Committee chair regarding the Committee’s considerations and actions
(including from the Audit Committee Chair related specifically to the ERM process), as well as
through regular reports directly from members of our leadership team responsible for oversight
of particular risks within the Company.
Oversight of Sustainability
The Board receives reports on sustainability and corporate responsibility matters across the
Company and both collaborates with APi’s leadership team and oversees the Company’s key
ESG priorities and strategies, goal-setting, and external reporting on ESG matters. The
leadership team is engaged in executing our sustainability strategy through the Sustainability
Committee, whose purpose is to lead on matters of significance to APi and our stakeholders
concerning sustainability and other matters of corporate social responsibility. It also assists the
Board of Directors in overseeing the impact of these matters on our business, strategies,
operations, performance and reputation. The Sustainability Committee members include the
|
6
|
|
Corporate Governance
CEO, Chief Financial Officer ("CFO"), General Counsel, and Chief Sustainability Officer and is
chaired by the Chief People Officer. It reflects the cross-functional nature of corporate
responsibility matters and leverages expertise across our leadership team related to our
business and functional expertise.
Oversight of Cybersecurity
Our cybersecurity risk oversight program is designed to identify and mitigate cybersecurity risk
for APi on a global basis to limit business interruption and protect our confidential and
proprietary information. Our program structure and governance are aligned with industry-
standard cybersecurity frameworks. The full Board and our Audit Committee also receive
regular reports on cybersecurity matters, including the Company’s incident response process.
Shareholder Engagement
The board is committed to ongoing engagement with our shareholders on executive
compensation, corporate governance, and other issues important to our shareholders. These
engagements include discussions on, among other things, Company strategy, compensation,
governance practices, sustainability and our board of directors. The feedback from these
meetings helps inform the Board and leadership team to develop the appropriate strategies for
APi.
Code of Business Conduct and Ethics
Our Code of Business Conduct and Ethics (“Code of Conduct”) supports our culture and
establishes the standards of ethical conduct applicable to all our directors, officers, and APi
team members. In addition, we have adopted a Code of Ethics for Senior Financial Officers
(“Code of Ethics”) applicable to our CEO and senior financial officers. Copies of our Code of
Conduct and Code of Ethics are publicly available in the Investor
Relations section of our
website at www.apigroupinc.com. We will also provide a copy of these documents to
shareholders upon request. We maintain an ethics helpline as set forth in our Code of Conduct
so that any suspected violation of our Code of Conduct can be reported confidentially, without
fear of retaliation. Any waiver of our Code of Conduct with respect to our directors or executive
officers may only be approved by our Board or the Audit Committee and will be disclosed on our
website, as may be required under applicable SEC and NYSE rules.
Meetings
During 2024, the Board held a total of seven meetings. Each incumbent director attended at
least seventy-five percent (75%) of the aggregate of (i) the total number of meetings of the
Board during the period for which he or she was a director and (ii) the total number of meetings
of all Board committees (the “Committees”) on which he or she served during the period for
which he or she was a director. It is the policy of the Board to encourage its members to attend
our Annual Meeting of Shareholders. A majority of our Board members attended the 2024
Annual Meeting of Shareholders.
During 2024, our Board generally held executive sessions, or meetings of non-employee
directors without members of our leadership team present, as part of regularly scheduled
Board, Audit Committee, Compensation Committee, and Nominating and Corporate Governance
Committee meetings. Our Board Co-Chairs preside over executive sessions of the Board.
Messrs. Ashken, Milroy, and Walker generally preside over the executive sessions of the Audit,
Compensation, and Nominating and Corporate Governance Committees, respectively.
Board Committees
Our Board has three standing Committees: an Audit Committee, a Compensation Committee,
and a Nominating and Corporate Governance Committee. Copies of the committee charters
setting forth the responsibilities of the Committees are available in the Investor Relations
|
|
7
|
Corporate Governance
section of our website at www.apigroupinc.com, and such information is also available in print
to any shareholder who requests it through our Investor Relations department. The Committees
will periodically review their respective charters and recommend any needed revisions to the
Board. The following is a summary of the composition of each Committee:
|
Audit Committee
|
|
Compensation
Committee
|
|
Nominating and Corporate
Governance Committee
|
|
Ian G.H. Ashken*
|
|
Paula D. Loop
|
|
Ian G.H. Ashken
|
|
Paula D. Loop
|
|
Thomas V. Milroy*
|
|
Anthony E. Malkin
|
|
Carrie A. Wheeler
|
|
Cyrus D. Walker
|
|
Cyrus D. Walker*
|
* Committee Chair
Audit Committee
Number of Meetings in 2024: Four
Responsibilities
. Our Audit Committee operates pursuant to a formal charter that governs the
responsibilities of the Audit Committee. Pursuant to the Audit Committee Charter, the Audit
Committee is responsible for, among other things:
•
overseeing preparation of our financial statements, the financial reporting process and
our compliance with legal and regulatory matters;
•
appointing and overseeing the work of our independent auditor;
•
preapproving all auditing services and permitted non-auditing services to be
performed for us by our independent auditor and approving the fees associated with
such work;
•
approving the scope of the annual audit;
•
reviewing interim and year-end financial statements;
•
overseeing our internal audit function, reviewing any significant reports to the
leadership team arising from such internal audit function and reporting to the Board;
•
approving the Audit Committee report required to be included in our annual proxy
statement; and
•
reviewing and pre-approving all related party transactions.
The Audit Committee has the power to investigate any matter brought to its attention within
the scope of its duties and to retain counsel for this purpose where appropriate.
Independence and Financial Expertise
. The Board has reviewed the background, experience and
independence of the Audit Committee members and based on this review, has determined that
each member of the Audit Committee:
•
meets the independence requirements of the NYSE governance listing standards;
•
meets the enhanced independence standards for Audit Committee members required
by the SEC; and
•
is financially literate, knowledgeable and qualified to review financial statements.
In addition, the Board has determined that each of Mr. Ashken, Ms. Loop and Ms. Wheeler
qualifies as an “audit committee financial expert” under SEC rules.
Compensation Committee
Number of Meetings in 2024: Three
Responsibilities
. Our Compensation Committee operates pursuant to a formal charter that
governs the responsibilities of the Compensation Committee. Pursuant to the Compensation
Committee Charter, last amended in December 2023, the Compensation Committee is
|
8
|
|
Corporate Governance
responsible for, among other things:
•
reviewing and approving corporate goals and objectives with respect to compensation
for the CEO, evaluating the CEO’s performance and approving the CEO’s
compensation based on such evaluation;
•
determining the compensation of other non-CEO Section 16 executive officers and all
equity awards to such executive officers and other team members;
•
reviewing and approving on a periodic basis compensation and benefits paid to
directors;
•
reviewing and approving our 401(k) profit-sharing plans, stock purchase plans, and
equity-based compensation plans and incentive compensation plans, including
reviewing and approving the target performance benchmarks, if any, and range of
aggregate value of our annual incentive program for the senior leadership team;
•
reviewing and approving our executive officer compensation-related plans and
policies; and
•
approving the Compensation Committee report on executive compensation required
to be included in our annual proxy statement.
Independence.
The Board has reviewed the background, experience and independence of the
Compensation Committee members and based on this review, has determined that each
member of the Compensation Committee:
•
meets the independence requirements of the NYSE governance listing standards;
•
is a “non-employee director” within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”); and
•
meets the enhanced independence standards for compensation committee members
established by the SEC.
Compensation Committee Interlocks and Insider Participation.
None of the members of the
Compensation Committee who presently serve or, in the past year, have served on the
Compensation Committee has interlocking relationships as defined by the SEC or had any
relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of
certain relationships and related party transactions.
The Compensation Committee has the authority to delegate any of its responsibilities to
subcommittees as it may deem appropriate in its sole discretion.
Use of Compensation Consultant
The Compensation Committee has the authority to retain compensation consultants, outside
counsel and other advisors as it may deem appropriate in its sole discretion. The Compensation
Committee has sole authority to approve related fees and retention terms.
Since 2020, the Compensation Committee has utilized the services of Willis Tower Watson
(“WTW”), a global human resources and risk management consulting firm, which acted as its
compensation consultant to assist in reviewing competitive market data and preparing
proposals for 2025 executive compensation. The total fees paid to WTW for these services in
2024 were approximately $52,508.
During 2024, our leadership team also retained separate business units of WTW (Corporate Risk
Broking and Retirement) to provide insurance brokerage and human-capital management
services to the Company. The total fees paid to WTW’s separate business units with respect to
services provided during 2024 (excluding services provided as compensation consultant as
discussed above) were approximately $3.8 million. The Compensation Committee was not
involved in our leadership team’s decision to retain these separate business units of WTW to
provide such services.
|
|
9
|
Corporate Governance
The Compensation Committee determined that the work of the separate business units of WTW
on matters other than executive compensation did not raise any conflict of interest with WTW’s
services as compensation consultant. It took into account, among other factors, WTW’s policies
and procedures relating to the prevention and mitigation of conflicts of interest, and the use of
separate teams for compensation consulting services and other services provided by WTW and
its business units, and it determined that WTW is independent.
Nominating and Corporate Governance Committee
Number of Meetings in 2024: Two
Responsibilities
. Our Nominating and Corporate Governance Committee operates pursuant to a
formal charter that governs the responsibilities of the Nominating and Corporate Governance
Committee. Pursuant to the Nominating and Corporate Governance Committee Charter, the
Nominating and Corporate Governance Committee is responsible for, among other things:
•
assisting our Board in identifying prospective director nominees and recommending
nominees for each annual meeting of shareholders to our Board;
•
leading the search for individuals qualified to become members of the Board and
selecting director nominees to be presented for shareholder approval at our annual
meetings;
•
reviewing the Board’s committee structure and recommending to the Board for
approval directors to serve as members of each committee;
•
developing and recommending to the Board for approval a set of corporate
governance guidelines and generally advising the Board on corporate governance
matters;
•
reviewing such corporate governance guidelines on a periodic basis and
recommending changes as necessary; and
•
reviewing director nominations submitted by shareholders.
The Nominating and Corporate Governance Committee may, when it deems appropriate,
delegate certain of its responsibilities to one or more Nominating and Corporate Governance
Committee members or subcommittees.
Independence.
The Board has reviewed the background, experience and independence of the
Nominating and Corporate Governance Committee members and based on this review, has
determined that each member of the Nominating and Corporate Governance Committee meets
the independence requirements of the NYSE governance standards and SEC rules and
regulations.
Consideration of Director Nominees
. The Nominating and Corporate Governance Committee
considers possible candidates for nominees for directors from many sources, including
shareholders. The Nominating and Corporate Governance Committee evaluates the suitability of
potential candidates nominated by shareholders in the same manner as other candidates
recommended to the Nominating and Corporate Governance Committee. Shareholders who
wish to recommend individuals for consideration by the Nominating and Corporate Governance
Committee to become nominees for election to the Board at an annual meeting of shareholders
may do so by delivering a written recommendation to our Secretary at the following address:
APi Group Corporation, 1100 Old Highway 8 NW, New Brighton, Minnesota 55112, Attn: General
Counsel and Secretary, generally not less than 90 nor more than 120 calendar days prior to the
first anniversary of the date on which the Company held the preceding year’s annual meeting of
shareholders. Submissions must include, among other things, (i) all information relating to the
individual subject to such nomination that is required to be disclosed in solicitations of proxies
for election of directors in an election contest, or is otherwise required, in each case pursuant to
and in accordance with Regulation 14A under the Exchange Act, (ii) such individual’s written
consent to being named in a proxy statement as a nominee and to serving as director if elected
|
10
|
|
Corporate Governance
and (iii) such other information as may be required by our bylaws, including information with
respect to the shareholder giving notice of such nomination.
In making nominations, the Nominating and Corporate Governance Committee is required to
submit candidates who have the highest personal and professional integrity, who have
demonstrated exceptional ability and judgment and who will be most effective, in conjunction
with the other nominees to the Board, in collectively serving the long-term interests of the
shareholders. In evaluating nominees, the Nominating and Corporate Governance Committee
will consider the following attributes, which are desirable for a member of the Board:
leadership, independence, interpersonal skills, financial acumen, business experiences, industry
knowledge and diversity of viewpoints. As discussed above in "Board Composition and
Diversity," we also recognize the value and strategic importance of Board diversity.
Anti-Hedging Policy
Our Insider Trading Policy, which is applicable to all team members (including executive
officers) and directors of the Company, makes clear that no team members or director may
engage in hedging transactions or any other forms of monetization transactions that hedge or
offset, or are designed to hedge or offset, any decrease in the market value of our equity
securities granted as compensation, or held directly or indirectly by the team member or
director.
Communications with the Board
Under our 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 may communicate in writing to any Chair of the Board, c/o General
Counsel and Secretary, APi Group Corporation, 1100 Old Highway 8 NW, New Brighton, MN
55112.
The Board has approved a process for handling correspondence received by the Company and
addressed to non-employee directors. Under that process, any Chair or an officer delegated by
the Co-Chairs (“Delegated Officer”) reviews all such correspondence and maintains a log of all
such correspondence and forwards to the directors copies of all correspondence that, in the
opinion of any Chair or the Delegated Officer, deal with the functions of the Board or
Committees thereof or that any Chair or Delegated Officer otherwise determines requires their
attention. Any Chair or Delegated Officer may screen frivolous or unlawful communications and
commercial advertisements. Directors may at any time review the log.
Certain Relationships and Related Party Transactions
Since January 1, 2024, we did not enter into any related party transactions other than as set
forth below.
Advisory Services Agreement
On October 1, 2019, we entered into an Advisory Services Agreement with Mariposa Capital,
LLC, an affiliate of Sir Martin. Under this agreement, Mariposa Capital, LLC agreed to provide
certain services, including corporate development and advisory services, advisory services with
respect to mergers and acquisitions, investor relations services, strategic planning advisory
services, capital expenditure allocation advisory services, strategic treasury advisory services
and such other services relating to the Company as may from time to time be mutually agreed.
In connection with these services, Mariposa Capital, LLC is entitled to receive an annual fee
equal to $4,000,000, payable in quarterly installments. The initial term of this agreement was
through October 1, 2020 and has been and will in the future be automatically renewed for
successive one-year terms unless either party notifies the other party in writing of its intention
not to renew this agreement no later than 90 days prior to the expiration of the term. This
|
|
11
|
Corporate Governance
agreement may only be terminated by the Company upon a vote of a majority of our directors.
In the event that this agreement is terminated by the Company, the effective date of the
termination will be six months following the expiration of the initial term or a renewal term, as
the case may be.
Registration Rights
Viking Global Investors
Pursuant to the registration rights agreement dated March 24, 2020, with Viking Global
Opportunities Liquid Portfolio Sub-Master LP (“Viking”), the beneficial owner of approximately
7.8% of our outstanding shares of common stock as of March 21, 2025, we (i) filed a
registration statement on May 12, 2021 (that was declared effective by the SEC on May 21,
2021) to register the resale of common stock then held by Viking and (ii) agreed that, if we
propose to register any of our common stock under the Securities Act of 1933, as amended (the
“Securities Act”) in connection with the public offering of such securities solely for cash (other
than in certain excluded registrations), we will register all of the shares that the Viking
Opportunities Fund requests to be included in such registration (subject to customary cutbacks
if the underwriters determine that less than all of the shares requested to be registered can be
included in such offering).
The registration rights agreement contains customary indemnities. Our obligations under the
registration rights agreement will terminate on the earlier of (a) such time as all of the shares
that may be registered under the agreement have been sold and (b) such time as all of such
shares may be sold, transferred or otherwise disposed of in a single transaction without
limitation under Rule 144 under the Securities Act.
Series B Preferred Stock Transactions
On February 28, 2024, the Company entered into a Conversion and Repurchase Agreement (the
“Series B Conversion Agreement”) with Juno Lower Holdings L.P. (“Juno”) and FD Juno Holdings
L.P. (“FD Juno” and, together with Juno, the “Blackstone Purchasers”), which together with
other entities affiliated with Blackstone Inc. beneficially own greater than 5% of the Company’s
common stock, and Viking Global Equities Master Ltd. (“VGEM”) and Viking Global Equities II LP
(“VGE” and, together with VGEM, the “Viking Purchasers,” and together with the Blackstone
Purchasers, the “Series B Purchasers”), which together with other entities managed by Viking
Global Investors LP beneficially own greater than 5% of the Company’s common stock,
pursuant to which the Series B Purchasers agreed to convert all of the outstanding shares of the
Series B Preferred Stock that they hold, which represents all of the shares of Series B Preferred
Stock outstanding. The transactions contemplated by the agreement were also consummated
on February 28, 2024.
Under the terms of the Series B Conversion Agreement, (i) the Series B Holders each agreed to
exercise their respective right to convert all of their Series B Preferred Stock into common
stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into
approximately 32,803,519 shares of common stock of the Company (inclusive of approximately
283,196 shares attributable to accrued and unpaid dividends thereon, the “Conversion Shares”)
and (ii) upon issuance of the Conversion Shares, the Company agreed to immediately
repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders
for an aggregate purchase price of $600 million.
The repurchase price was financed by (i) an incremental term facility of $300 million funded
exclusively by the Blackstone Purchasers in the amount of $225 million and the Viking
Purchasers in the amount of $75 million, (ii) a drawdown under the Company’s existing
revolving credit facility and (iii) cash on hand. The interest rate applicable to the incremental
term facility is, at the Company’s option, either (a) a base rate plus an applicable margin equal
|
12
|
|
Corporate Governance
to 1.50% per annum or (b) a Term SOFR rate (adjusted for statutory reserves) plus an
applicable margin equal to 2.50% per annum plus a credit spread adjustment.
As a result of the consummation of the transactions, all dividends and distributions have ceased
to accrue on the Series B Preferred Stock, which have been converted and cancelled, the
repurchased Conversion Shares are no longer deemed to be outstanding, and all rights of the
Series B Purchasers with respect to the Series B Preferred Stock and the repurchased
Conversion Shares have been retired.
David S. Blitzer, who was previously nominated by the Blackstone Purchasers as a member of
the Company’s board of directors pursuant to the Blackstone Purchasers’ nomination right
under the securities purchase agreement for the Series B Preferred stock, resigned as a director
effective immediately prior to the execution of the Conversion and Repurchase Agreement
related to the Series B Preferred Stock.
In addition, on March 5, 2024, the Series B Purchasers consummated the underwritten
secondary public offering of a portion of the Conversion Shares, which offering was made
pursuant to a registration statement filed by the Company and effected pursuant to the
registration rights agreements with the Series B Purchasers.
Policy Regarding Related Party Transactions
The Board has determined that the Audit Committee is best suited to review and pre-approve
transactions with related persons, in accordance with the policy set forth in the Audit
Committee Charter. Such review will apply to any material transaction or series of related
transactions or any material amendment to any such transaction involving a related person and
the Company or any subsidiary of the Company. For purposes of the policy, “related persons”
consists of executive officers, directors, director nominees, any shareholder beneficially owning
more than 5% of the issued and outstanding common stock, and immediate family members of
any such persons. In reviewing related person transactions, the Audit Committee takes into
account all factors that it deems appropriate, including whether the transaction is on terms no
less favorable than terms generally available to an unaffiliated third party under the same or
similar circumstances and the extent of the related person’s interest in the transaction. No
member of the Audit Committee is permitted to participate in any review, consideration or
approval of any related person transaction in which the director or any of his or her immediate
family members is the related person.
Director Compensation
Our non-employee director compensation policy provides for the following compensation for our
non-employee directors:
•
Annual Cash Retainer
. Each non-employee director is entitled to an annual cash fee
of $85,000, payable quarterly.
•
Committee Fees
. Members of any of our Committees are entitled to an annual
$10,000 member fee. The chairs of our Nominating and Corporate Governance and
Compensation Committees is entitled to an annual $20,000 chair fee and the chair of
our Audit Committee is entitled to an annual $25,000 chair fee.
•
Annual Equity Award
. Each non-employee director will be granted annually a
number of restricted stock units with a value of $145,000 at the date of issue. The
restricted stock units will vest and settle into shares of common stock on the one-year
anniversary of the date of issuance.
•
Compensation Election.
Each non-employee director has the option to elect
receiving their annual cash retainer and committee fees within their annual equity
award instead of receiving cash.
|
|
13
|
Corporate Governance
In addition, all of our directors are entitled to be reimbursed by the Company for reasonable
expenses incurred by them in the course of their directors’ duties relating to the Company.
Sir Martin does not receive any additional compensation for services as a director in light of his
affiliation with Mariposa Capital, LLC, which provides advisory services to the Company in
exchange for a fee. In addition, Mr. Becker, who serves as our CEO, is not entitled to receive
any additional compensation for his services as a director.
The following table sets forth the non-employee director compensation for the year ended
December 31, 2024.
|
Name
|
Fees Earned
or
Paid in Cash
($)
|
Stock
Awards
($)(1)(2)
|
Total
($)
|
|
Sir Martin E. Franklin
|
—
|
—
|
—
|
|
James E. Lillie
|
$85,000
|
$145,009
|
$230,009
|
|
Ian G.H. Ashken
|
$120,000
|
$145,009
|
$265,009
|
|
Paula D. Loop
|
$105,000
|
$145,009
|
$250,009
|
|
Anthony E. Malkin
|
—
|
$240,006
|
$240,006
|
|
Thomas V. Milroy
|
$105,000
|
$145,009
|
$250,009
|
|
Cyrus D. Walker
|
$115,000
|
$145,009
|
$260,009
|
|
Carrie A. Wheeler
|
—
|
$240,006
|
$240,006
|
(1)
Represents the aggregate grant date fair values of restricted stock units granted during 2024,
computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used in
calculating the amounts for 2024, see Note 20 to our historical consolidated financial statements for
the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended
December 31, 2024.
(2)
The following table sets forth the aggregate number of restricted shares of our common stock at
December 31, 2024 for each of our non-employee directors:
|
Name
|
Aggregate Number
of Restricted Stock
Units Outstanding
at
December 31, 2024
|
|
|
Sir Martin E. Franklin
|
—
|
|
|
James E. Lillie
|
3,810
|
|
|
Ian G.H. Ashken
|
3,810
|
|
|
Paula D. Loop
|
3,810
|
|
|
Anthony E. Malkin
|
6,306
|
|
|
Thomas V. Milroy
|
3,810
|
|
|
Cyrus D. Walker
|
3,810
|
|
|
Carrie A. Wheeler
|
6,306
|
Director Stock Ownership Guidelines
In 2022, the Board adopted stock ownership guidelines which provide that each independent
director is expected to own, directly or indirectly, shares of our common stock having a value of
at least five times the amount of the annual Board member retainer within four years following
the date they are first elected to the Board. All directors are in compliance with the Stock
Ownership Guidelines.
|
14
|
|
Proposal 1—Election of Directors
Under our bylaws, directors are elected for a one-year term expiring at the next annual meeting of
shareholders. Upon the recommendation of the Nominating and Corporate Governance
Committee, our Board has nominated Sir Martin E. Franklin, James E. Lillie, Ian G.H. Ashken,
Russell A. Becker, Paula D. Loop, Anthony E. Malkin, Thomas V. Milroy, Cyrus D. Walker and Carrie
A. Wheeler for election or re-election, each for a one-year term that will expire at the 2026 Annual
Meeting of shareholders. Each of our directors consented to serve if elected.
Our bylaws provide that directors are elected by a majority of the votes cast with respect to the
nominee for election to the Board at any meeting of shareholders at which directors are to be
elected and a quorum is present, except in the case of a contested election. “A majority of the
votes cast” means that the number of shares voted “for” a nominee for election to the Board
exceeds the votes cast “against” such nominee and will not include abstentions. In the event of a
contested election, directors are elected by a plurality of the votes cast.
We believe that each of our directors possesses the experience, skills and qualities to fully perform
their duties as a director and contribute to our success. Our directors were nominated because we
believe each is of high ethical character, highly accomplished in their field with superior credentials
and recognition, has a personal and professional reputation that is consistent with our image and
reputation, has the ability to exercise sound business judgment, and is able to dedicate sufficient
time to fulfilling their obligations as a director. Our directors as a group complement each other
and each of their respective experiences, skills and qualities so that collectively the Board operates
in an effective, collegial and responsive manner. Below we have set out each director’s principal
occupation and other pertinent information about particular experience, qualifications, attributes
and skills that led the Board to conclude that such person should serve as a director.
Director Since 2017
Co-Chair Since 2019
Age: 60
Current Public Co.
Boards:
•
Nomad Foods Limited
•
Element Solutions Inc
•
Acuren Corporation
|
Sir Martin E. Franklin
Founder and CEO, Mariposa Capital, LLC
|
|
Key Experience and Qualifications
Sir Martin has served as a director of APi Group Corporation since September
2017 and has served as Co-Chair since October 2019. His extensive experience
as a CEO and Board Chairman across several multi-national, publicly-traded
organizations gives him a unique perspective on the critical issues facing
leadership teams and Board of Directors, including long-term growth
strategies, equity and debt market financing, the evaluation and execution of
large-scale MA transactions, capital allocation strategies, investor relations,
corporate governance, and executive leadership.
Key Roles
▪
Founder and CEO, Mariposa Capital, LLC, a private investment office (2013
- present)
▪
Co-Founder, CEO, and Chair, Jarden Corporation, a multi-national consumer
packaged goods company (2001-2016)
▪
Founder and Executive Chair, Element Solutions Inc, a specialty chemicals
company (2013 - present)
▪
Co-Founder and Co-Chair, Nomad Foods Limited, a leading European frozen
food company (2013 - present)
▪
Chair and controlling shareholder, Sweet Oak Parent, LLC, a consumer
products platform that includes Royal Oak Enterprises and Whole Earth
Brands (2024 - present)
▪
Co-Founder and Co-Chair, Acuren Corporation (formerly Admiral Acquisition
Limited), a provider of critical asset integrity services (2022 - present)
▪
Director, Restaurant Brands International, Inc., a fast-food holding
company (2014-2019)
▪
Chair and/or CEO of three public companies (between 1992-2000):
•
Benson Eyecare Corporation, an optical products and services company
•
Lumen Technologies, Inc., a manufacturer of lighting products
•
Bollé Inc., a manufacturer of sunglasses, goggles and helmets
|
|
|
|
15
|
Proposal 1—Election of Directors
Director Since 2017
Co-Chair Since 2019
Age: 63
Other Public Co. Boards:
•
Nomad Foods Limited
•
Acuren Corporation
Former Public Co. Boards
Within Past Five Years:
•
Tiffany and Co.
|
James E. Lillie
Former CEO, Jarden Corporation
|
|
Key Experience and Qualifications
Mr. Lillie has served as a director of APi Group Corporation since September
2017 and has served as Co-Chair since October 2019. His extensive experience
as a CEO and Board Chairman across several multi-national, publicly-traded
organizations gives him a unique perspective on the critical issues facing
leadership teams and Board of Directors, including long-term growth
strategies, equity and debt market financing, the evaluation and execution of
large-scale MA transactions, capital allocation strategies, investor relations,
corporate governance, and executive leadership.
Key Roles
▪
CEO, Jarden Corporation, a multi-national consumer packaged goods
company (2011-2016); Chief Operating Officer (2003-2011) and President
(2004-2011)
▪
Executive Vice President of Operations, Moore Corporation, Limited
(2000-2003)
▪
Executive Vice President of Operations, Walter Industries, Inc., a Kohlberg,
Kravis, Roberts Company (“KKR”) portfolio company (1999 to 2000)
▪
Senior level management positions including human resources,
manufacturing, finance and operations, World Color, Inc., a KKR portfolio
company (1990-1999)
|
|
Director Since 2019
Age: 64
Committees:
•
Audit (Chair)
•
Nominating and
Corporate Governance
Other Public Co. Boards:
•
Nomad Foods Limited
•
Element Solutions Inc
|
Ian G.H. Ashken
Co-Founder, Jarden Corporation
|
|
Key Experience and Qualifications
Mr. Ashken has served as a director of APi Group Corporation since October
2019. His extensive leadership experience board director across several multi-
national, publicly-traded organizations gives him a unique perspective on the
critical issues facing leadership teams and Board of Directors, including long-
term growth strategies, equity and debt market financing, the evaluation and
execution of large-scale MA transactions, capital allocation strategies,
financial expertise, investor relations, corporate governance, and executive
leadership.
Key Roles
▪
Co-founder, Jarden
Corporation, a multi-national consumer packaged
goods company (2001-2016);
served at various times as Vice Chairman,
President, Chief Financial Officer, Secretary
▪
Vice Chairman and/or Chief Financial Officer of three public companies
(between 1992 - 2000):
•
Benson Eyecare Corporation, an optical products and services company
•
Lumen Technologies, Inc., a manufacturer of lighting products
•
Bollé Inc., a manufacturer of sunglasses, goggles and helmets
|
|
|
16
|
|
Proposal 1—Election of Directors
(Chief Executive Officer)
Director Since 2019
Age: 59
Other Public Co. Boards:
•
None
|
Russell A. Becker
CEO, APi Group Corporation
|
|
Key Experience and Qualifications
Mr. Becker has served as a director of APi Group Corporation since October
2019. We believe Mr. Becker’s qualifications to serve on our Board include his
extensive knowledge of APi Group and the industries and end markets in which
it operates. Given his years of executive leadership with the Company, Mr.
Becker brings a unique perspective on the critical issues facing the Company,
including its long-term growth strategies, leadership development, financing,
the evaluation and execution of MA transactions, capital allocation strategies,
and investor relations.
Key Roles
•
CEO, APi Group Corporation, (2004-present); President and Chief
Operating Officer, APi Group, Inc. (2002-2004)
•
Various leadership roles, The Jamar Company, a subsidiary of APi Group,
Inc. (1995-2002)
•
Project Manager, Ryan Companies, a design-build contractor that develops,
designs, and constructs commercial real estate and facilities (1993-1995)
•
Director, Liberty Diversified Industries, a privately held paper, packaging,
and building products company (2017-2024)
•
Director, Marvin Companies, a privately held window and door
manufacturer (2019-present)
|
|
Director Since 2022
Age: 63
Committees:
•
Audit
•
Compensation
Other Public Co. Boards:
•
Fastly, Inc.
•
Robinhood Markets, Inc.
|
Paula D. Loop
Former Assurance Partner, PricewaterhouseCoopers
|
|
Key Experience and Qualifications
Ms. Loop has served as a director of APi Group Corporation since March 2022.
We believe Ms. Loop’s qualifications to serve on our Board include her public
company experience, specifically working with boards, audit committees across
multiple markets and industry sectors on governance, accounting, financial
reporting, sustainability, and SEC reporting matters.
Key Roles
▪
Assurance Partner, PricewaterhouseCoopers, an international professional
services accounting firm (1983 - 2021)
•
Leader of PwC’s Governance Insights Center
•
Board of Partners (2017-2021)
•
New York Metro Regional Assurance Leader
|
|
|
|
17
|
Proposal 1—Election of Directors
Director Since 2019
Age: 62
Committees:
•
Nominating and
Corporate Governance
Other Public Co. Boards:
•
Empire State Realty
Trust, Inc.
|
Anthony E. Malkin
Chairman and CEO, Empire State Realty Trust, Inc.
|
|
Key Experience and Qualifications
Mr. Malkin has served as a director of APi Group Corporation since October
2019. We believe Mr. Malkin’s qualifications to serve on our Board include his
real estate investment experience, energy efficiency initiatives, service on
other corporate boards and his knowledge of public companies.
Key Roles
▪
Chairman and CEO of Empire State Realty Trust, Inc. (“ESRT”), a real
estate investment trust (2013-present); other leadership roles with ESRT’s
predecessor entities (1989-2013)
▪
Chair, Malkin Holdings L.L.C.
▪
Member of the Real Estate Roundtable and Chair of its Sustainability Policy
Advisory Committee, Urban Land Institute, the Board of Governors of the
Real Estate Board of New York
▪
Former member, Climate Mobilization Advisory Board of the New York City
Department of Buildings
▪
Director, Tacombi Holding, N.A., a privately-held quick service restaurant
company (2021-2024)
|
|
(Lead Independent
Director)
Director Since 2017
Age: 69
Committees:
•
Compensation (Chair)
Other Public Co. Boards:
•
Interfor Corporation
Former Public Co. Boards
Within Past Five Years:
•
Admiral Acquisition
Limited
|
Thomas V. Milroy
Former Senior Advisor, BMO Capital Markets
|
|
Key Experience and Qualifications
Mr. Milroy has served as a director of APi Group Corporation since September
2017. We believe Mr. Milroy’s qualifications to serve on our Board include his
experience as past Chief Executive Officer of a large financial services
company, service on other corporate boards and his knowledge of finance,
investment and corporate banking, mergers and acquisitions, risk assessment
and business development.
Key Roles
▪
CEO and Senior Advisor, BMO Capital Markets (“BMOCM”), an investment
banking firm (2008-2015); other leadership roles (1993-2008)
▪
Director, Generation Capital Limited, a private investment company (2015-
present)
▪
Former Director, Tim Hortons Inc. (2013-2014)
▪
Former Director, Restaurant Brands International Inc. (2014-2018)
|
|
|
18
|
|
Proposal 1—Election of Directors
D
irector Since 2019
Age: 57
Committees:
•
Nominating and Corporate
Governance (Chair)
•
Compensation
Other Public Co. Boards:
•
Houlihan Lokey, Inc.
Former Public Co. Boards
Within Past Five Years:
•
Arbor Ralpha Capital
Bioholdings Corp I
|
Cyrus D. Walker
Managing Director, Consello Group
|
|
Key Experience and Qualifications
Mr. Walker has served as a director of APi Group Corporation since October
2019. His experience as a CEO and board director for several organizations
gives him a unique perspective on the critical issues facing leadership teams
and Board of Directors, including real estate, private equity, insurance,
corporate governance, and executive leadership.
Key Roles
▪
Managing Director, Consello Group, an advisory and investing platform
(2025-present)
▪
Strategic Advisor, Fifth Down Capital, an investment firm (2023-2025)
▪
Director, Starwood Credit Income Real Estate Trust (2023-present)
▪
Principal, Discovery Land Company, a real estate developer and operator of
private communities and resorts (2022-2024)
▪
Operating partner, Vistria Group, a private equity investment firm (2022-
present)
▪
Director, The Mather Group, an investment advisory firm (2022-present)
▪
Director, Flores Associates LLC, a Vistria Group affiliated company (2022-
present)
▪
Director, Kendra Scott, a privately held jewelry company (2021-present)
▪
Founder and CEO, The Dibble Group, an insurance brokerage and consulting
firm (2018-2022)
▪
Co-CEO and other roles, Nemco Group, LLC, an insurance brokerage and
consulting firm (2000-2012)
▪
Founder and CEO, OSI Benefits, an insurance brokerage consulting firm
(1995-2000)
|
|
Director Since 2019
Age: 53
Committees:
•
Audit
Other Public Co. Boards:
•
Opendoor Technologies
Inc.
•
TKO Group Holdings, Inc.
Former Public Co. Boards
Within Past Five Years:
•
Dollar Tree, Inc.
|
Carrie A. Wheeler
CEO and Director, Opendoor Technologies, Inc.
|
|
Key Experience and Qualifications
Ms. Wheeler has served as a director of APi Group Corporation since October
2019. We believe Ms. Wheeler’s qualifications to serve on our Board include
her executive leadership, extensive experience in business assessment,
mergers and acquisitions, financing and guiding public market transactions, her
current experience as a Chief Executive Officer and former Chief Financial
Officer of a public company, and her substantial experience serving on other
corporate boards, including her previous service on other companies’ audit
committees.
Key Roles
▪
CEO, Opendoor Technologies Inc., a technology firm for residential real
estate (2022-present); CFO (2020-2022)
▪
Partner, Head of Consumer and Retail Investing, TPG Global, a private
equity firm (1996-2017)
▪
Former board member of other privately held companies, including J.
Crew, Neiman Marcus Group, and Petco Animal Supplies.
|
|
RECOMMENDATION OF THE BOARD OF DIRECTORS
|
✔
|
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “
FOR
” THE
ELECTION OF EACH OF THE DIRECTOR NOMINEES.
|
|
|
19
|
COMPENSATION DISCUSSION ANALYSIS
This Compensation Discussion and Analysis ("CDA") provides information regarding our
executive compensation philosophy, programs and decisions for 2024 for our named executive
officers (the “NEOs”). For 2024, our NEOs were:
|
Name
|
Title
|
|
|
Russell A. Becker
|
CEO and President
|
|
|
Glenn David Jackola
(1)
|
Interim CFO
|
|
|
Kevin S. Krumm
(1)
|
Former CFO
|
|
|
Louis B. Lambert
|
Senior Vice President, General Counsel and Secretary
|
|
|
Kristina M. Morton
|
Senior Vice President and Chief People Officer
|
(1)
Mr. Jackola was appointed as Interim CFO on December 13, 2024. Mr. Krumm ceased to be an executive officer on
December 13, 2024.
Compensation Strategy
Our executive compensation philosophy aligns executive compensation decisions with
shareholder interests, business strategy, and performance. Our compensation plans are
designed to drive long-term financial returns for our shareholders and reward our executives for
executing on the Company’s strategy and key initiatives. The strategy and priorities of our
compensation philosophy are the following:
|
Strategically
Aligned
|
Align with business strategies to deliver winning performance
|
|
Performance
Based
|
Tie significant portions of compensation to performance metrics that align
to our short- and long-term goals
|
|
Drives
Shareholder
Value Creation
|
Align each executive's interests with shareholder's interests
|
|
Market
Informed
|
Design programs and compensation levels competitive with the external
market
|
|
Motivates
Retains
Executives
|
Attract and retain key executives capable of leading the business forward
|
|
20
|
|
Compensation Discussion Analysis
Financial Highlights
In 2024, we delivered strong Adjusted EBITDA growth, up 14.2% from 2023. With our 2024
Adjusted EBITDA being a record high of $893 million. This was supported by a 140 basis point
improvement in EBITDA margin, ending the year at 12.7%, well on our way to meeting our
13% goal by 2025.
1
Refer to Appendix A for reconciliation of non-GAAP measures to most directly comparable GAAP measures.
Pay for Performance
The Compensation Committee creates a pay-for-performance culture with a significant portion
of executive compensation delivered through at-risk pay. Their compensation is appropriately
weighted between short- and long-term performance, balancing near- and long-term strategic
goals and shareholder value creation.
(1) Pay for performance charts include target total compensation for the following NEO roles:
Chief Executive Officer and President, Former Chief Financial Officer, General Counsel, and
Chief People Officer. They do not include the Interim Chief Financial Officer compensation.
|
|
21
|
Compensation Discussion Analysis
Compensation Governance Practices
Our executive compensation governance practices are intended to support the needs of the
business, drive performance, and ensure the leadership team's alignment with the short- and
long-term interests of our shareholders.
|
What We DO
|
||
|
ü
|
Pay for performance with a substantial majority of pay dependent on performance, not
guaranteed
|
|
|
ü
|
Use multi-year vesting terms for annual executive officer equity awards
|
|
|
ü
|
Balance short- and long-term incentives
|
|
|
ü
|
Require executive officers to place compensation at risk of “clawback” actions by the
Company in appropriate circumstances
|
|
|
ü
|
Engage an independent compensation consultant
|
|
|
ü
|
Benchmark compensation to peer and market data during compensation decision-making
process
|
|
|
ü
|
Maintain stock ownership guidelines for officers
|
|
|
What We DON’T DO
|
||
|
X
|
Maintain single trigger severance provisions upon a change in control in employment
agreements
|
|
|
X
|
Permit liberal share recycling
|
|
|
X
|
Stock option repricing or exchange without shareholder approval
|
|
|
X
|
Permit hedging or short sales of the Company’s stock
|
|
|
X
|
Provide excise tax gross-ups for change in control payments
|
|
|
X
|
Provide excessive severance to executive officers
|
|
|
X
|
Provide excessive perquisites
|
|
|
22
|
|
Compensation Discussion Analysis
Executive Compensation Setting Process
Roles and Responsibilities
|
Role
|
Responsibilities
|
Description
|
|||
|
Compensation
Committee
|
Oversees
Programs and
Decisions
|
Our Board has adopted a written Compensation Committee Charter
that governs the responsibilities of the Compensation Committee. The
Compensation Committee is responsible for, among other things:
•
reviewing and approving corporate goals and objectives with
respect to compensation for the CEO, evaluating the CEO’s
performance and approving the CEO’s compensation based on such
evaluation; and
•
determining compensation for the Company’s other executive
officers.
In reviewing and determining executive compensation, the
Compensation Committee generally considers: compensation levels at
peer companies and information derived from compensation surveys
provided by outside consultants, as further described below; the
Company’s past-year performance and growth; the results of any Say-
on-Pay votes by shareholders; achievement of specific pre-established
financial goals; a subjective determination of the executives’ past
performance and expected future contributions to the Company; past
equity awards granted to such executives; and the recommendation of
the CEO.
|
|||
|
Shareholders
|
Provide
Feedback
|
The Compensation Committee evaluates the most recent advisory
vote of the Company's shareholders on executive compensation,
known as the "Say-on-Pay" vote, as well as other feedback that it may
receive from the Company's largest shareholders in connection with
this vote. Our Say-on-Pay results consistently reflect strong support
for the linkage between pay and performance in our compensation
programs. Over the past three years our Say-on-Pay results have
been above 95%.
|
|||
|
2024
|
2023
|
2022
|
|||
|
Say on Pay
Results
|
98.5%
|
95.5%
|
96.5%
|
||
|
The Compensation Committee believes these voting results
demonstrate significant continuing support for our executive
compensation program. We seek input from our shareholders and
conduct shareholder engagement efforts throughout the year. The
Compensation Committee will continue to consider the views of our
shareholders in connection with executive pay practices and programs
and will make adjustments based on evolving best practices and
changing regulatory or other requirements.
|
|||||
|
Independent
Compensation
Consultant
|
Advises
Compensation
Committee
|
In 2024, the Compensation Committee used WTW to serve as the
independent compensation consultant. The information from WTW
regarding pay practices at peer companies is used by the
Compensation Committee as a resource in its deliberations regarding
executive compensation and will be useful in determining the
marketplace competitiveness as well as reasonableness and
appropriateness of our executive compensation programs.
|
|||
|
Executive
Officers
|
Provide Input
and Insights
|
The Compensation Committee considers input from our CEO, CFO, and
Chief People Officer when determining performance metrics and
objectives for our STI and LTI plans and evaluating performance
against such metrics and objectives. Our CEO and Chief People Officer
then evaluate the individual performance and the competitive pay
positioning of senior management members who report directly to the
CEO, including the NEOs, and then make recommendations to the
Compensation Committee regarding the target compensation for such
NEOs and other executive officers of the Company.
|
|||
|
|
23
|
Compensation Discussion Analysis
Compensation Peer Group
How we use peer group data
We compare our executive compensation programs to those of 16 companies that make up our
compensation peer group. The Compensation Committee uses peer group data to generally
inform:
•
compensation plan design,
•
compensation levels for our NEOs, including base salaries, annual incentive targets
and LTI award targets, and
•
form and mix of equity awards granted to our NEOs.
When making compensation decisions, the Compensation Committee generally analyzes data
relating to our peer group and considers the dynamics of operating in the safety services and
specialty services industries, the importance of rewarding and retaining talented and
experienced executives to continue to guide the Company, the alignment of our executive
compensation program with shareholders’ interests and the voting guidelines of certain proxy
advisory firms and shareholders. In addition, in connection with the 2024 executive
compensation program design, the Compensation Committee received analyses, guidance and
recommendations, including general information on executive compensation market trends and
practices of peer companies, provided by the Compensation Committee’s independent
compensation consultant. The Compensation Committee does not strictly benchmark executive
pay against this comparative compensation information, but instead uses this data as a market
check to inform its compensation decisions.
How our peer group was determined
In determining our 2024 peer group, the Compensation Committee considered factors such as
revenue, market capitalization, global scope of operations, and industry alignment. The
approach taken by the Compensation Committee in selecting the peer group excluded larger
companies from the market data review but included them as “reference peers” for the purpose
of providing qualitative data about program design for the Compensation Committee’s
reference. For 2024, one peer was removed given lack of operations and industry alignment.
|
2024 Peer Group
|
||||
|
ADT Inc.
|
Ecolab Inc.
|
AtkinsRealis Group Inc.
|
||
|
ABM Industries Incorporated
|
EMCOR Group, Inc.
|
The Brink's Company
|
||
|
Aramark
|
Jacobs Engineering Group Inc.
|
Waste Connections, Inc.
|
||
|
Cintas Corporation
|
Otis Worldwide Corporation
|
Xylem Inc.
|
||
|
Clean Harbors, Inc.
|
Republic Services, Inc.
|
|||
|
Comfort Systems USA, Inc.
|
Resideo Technologies, Inc.
|
|||
|
Reference Peer
|
||||
|
Johnson Controls International plc
|
|
|
||
|
Peer Group Changes Made for 2024
|
||||
|
Removed from peer group:
|
||||
|
ASGN Incorporated
|
||||
|
24
|
|
Compensation Discussion Analysis
Components of the Executive Compensation Program
Our NEOs receive a base salary, annual cash incentive compensation, and annual equity
incentive awards (each, an “LTI Award”) and participate in our employee benefits programs and
plans.
In the first quarter of 2024, the Compensation Committee approved, and the Company
implemented, the executive compensation program for 2024.
The following table summarizes the primary components of the 2024 executive compensation
programs. Each NEO's base salary and target incentives are determined based on peer group
market data by role, job scope and responsibilities, individual contributions to business
outcomes, pay equity, and future potential.
|
Component of Pay
|
Key Characteristics
|
|
Base Salary
Attract and retain top talent
|
•
Fixed compensation paid in cash
|
|
Short-Term Incentives (STI)
Align compensation with annual financial
performance on key financial metrics and
motivate the achievement of those results
|
•
Metric(s): 100% Adjusted EBITDA
•
Payout Range: 0-200% of target
•
Each NEO has a target % of base salary
•
Actual payouts 100% based on financial results
vs. targets
|
|
Long-Term Incentives (LTI)
Align the interests of our executives with
shareholders, encourage long-term value
creation and serve as a retention vehicle
|
•
Value tied to stock price performance
•
Mix: 60% PSUs and 40% RSUs
•
Vesting Timeframe: 3-years
•
PSU Metric(s): 100% Cumulative Adjusted
EBITDA
•
PSU Payout Range: 0-200% of target
•
Each NEO has a target % of base salary
•
Actual vested value based on stock price
performance and in some cases, achievement
of financial results vs. targets
|
|
|
25
|
Compensation Discussion Analysis
2024 Compensation Decisions
Consistent with our compensation philosophy of paying for performance, our compensation
decisions closely link pay and performance. Our performance during 2024 resulted in the
following compensation actions.
Base Salary
The Compensation Committee expects to annually review the NEOs’ base salaries and make
appropriate adjustments based on factors determined by the Compensation Committee,
including individual responsibilities and performance, internal pay equity, compensation history,
executive potential, and peer group and market-based data, as described above. During 2024,
the base salaries of our NEOs changed as set forth below:
|
Name
|
Base Salary
|
Increase
(%)
|
||
|
Russell A. Becker
|
$1,425,000
|
0.0%
|
||
|
Glenn David Jackola
(1)
|
$386,250
|
|||
|
Kevin S. Krumm
|
$832,000
|
5.1%
|
||
|
Louis B. Lambert
|
$550,000
|
10.0%
|
||
|
Kristina M. Morton
|
$530,000
|
11.6%
|
(1)
Mr. Jackola was appointed as Interim CFO on December 13, 2024 and has not received a base salary increase
since becoming an NEO.
Short-Term Incentive Compensation
In 2024, Company executives had an opportunity to earn cash incentive compensation based
on the achievement of annual performance goals developed in the annual budget process and
approved by the Compensation Committee. The Compensation Committee annually reviews,
and revises if necessary, the appropriateness of the performance metrics, their correlation to
the Company’s overall growth strategy and the impact of such performance metrics on long-
term shareholder value.
STI Opportunity
. For 2024, all our NEOs were eligible for an annual cash incentive opportunity
as outlined below, based on the achievement of a performance goal tied to annual Adjusted
EBITDA performance.
Amounts payable under the annual incentive portion of the executive compensation plan can
range from 0-200% of target, with a threshold payout at 40% of target and a maximum payout
of 200% of target based on achievement of the performance goal. If the performance goal was
achieved between the threshold level and target or between the target and maximum level, the
amount of the annual incentive payment with respect to that performance goal is calculated on
a linear basis from the target level.
Performance Metrics, Target, 2024 Performance and Payout.
For 2024, the Compensation
Committee determined that the annual incentive compensation paid to our NEOs would be
based on performance against adjusted EBITDA targets. Adjusted EBITDA is calculated based
on net income, adjusted as described in the Appendix and to eliminate the impact of foreign
currency fluctuations and significant acquisitions and divestitures. The Compensation
Committee believes that our NEOs can impact adjusted EBITDA and that it is one of the most
important performance metrics used by investors, shareholders and creditors as an indicator of
the performance of our core business.
|
26
|
|
Compensation Discussion Analysis
|
2024 Financial Targets
|
2024 Actual
Results
|
||||
|
Metric
|
Threshold
|
Threshold
|
Target
|
Maximum
|
|
|
Adjusted EBITDA
($ in millions)
|
$844.8
|
$844.8
|
$889.3
|
$933.8
|
$872.4
|
|
Payout %
|
0%
|
40%
|
100%
|
200%
|
77.1%
|
The Company’s adjusted EBITDA for 2024 was $893.1 million. Adjusted EBITDA for the
purposes of incentive calculations was then reduced to $872.4 million, resulting in an 77.1%
payout on the annual cash incentives plan. The reduction of $20.7 million reflected adjustments
based on policies previously adopted by the Compensation Committee for the impact of foreign
exchange and acquisitions and divestitures on short-term incentive payouts as described in
Appendix A. Glenn David Jackola, who serves as the Company's Interim Chief Financial Officer
effective December 13, 2024, participated in two plans for 2024. His incentive payout was
prorated based on the time spent in each role. The details relating to his incentive calculation
have been included in a footnote to the chart below.
The payouts for the NEOs were:
|
Named Executive Officer
|
2024 Earnings
|
Target STI
as a % of
Base Salary
|
Financial
Performance
Payout Factor
|
Payout
|
|
Russell A. Becker
|
$1,425,000
|
125%
|
77.1%
|
$1,373,344
|
|
Glenn David Jackola
(1)
|
$401,250
|
(1)
|
(1)
|
$442,756
|
|
Kevin S. Krumm
(2)
|
Not eligible
|
|||
|
Louis B. Lambert
|
$550,000
|
75%
|
77.1%
|
$318,038
|
|
Kristina M. Morton
(3)
|
$520,000
|
75%
|
77.1%
|
$300,690
|
(1)
Mr. Jackola's 2024 earnings for purposes of incentive calculations was $401,250, $386,250 from his base salary
and $15,000 from his cash stipend in his role as Interim Chief Financial Officer. Mr. Jackola's 2024 short-term
incentive payout was made up of three components, (1) $277,173 for his time as APi International, Chief Financial
Officer, (2) $15,583 for his time as Interim, Chief Financial Officer based on an incentive score of 77.1% and (3)
$150,000 approved by the Compensation Committee associated with his 2024 individual performance. Equating to
a total short-term incentive payout of $442,756.
(2)
Mr. Krumm's last day of employment with the Company was December 13, 2024, and therefore he is not eligible
for a 2024 annual incentive payout.
(3)
Ms. Morton's salary increased from $510,000 to $530,000 effective July 1, 2024. Therefore, her 2024 earnings for
purposes of incentive calculation were $520,000.
Long-Term Incentive (LTI) Compensation
2024 LTI Grants
The 2024 executive compensation program adopted by the Compensation Committee includes
the grant of LTI Awards under the Equity Incentive Plan. The Compensation Committee used a
percentage of each NEO’s base salary to determine the value of the LTI Award to be granted to
each NEO each year. The Compensation Committee also believes that the structure of LTI
Awards should correlate the value of any such award to the achievement by the Company of
long-term and strategic objectives. As such, the Compensation Committee expects that a
significant percentage of the amount of LTI Awards will be subject to the achievement of
Company performance goals. Time-based awards are awarded as part of a balanced approach
|
|
27
|
Compensation Discussion Analysis
to encourage retention and ensure that the Company’s compensation programs do not
encourage excessive risk-taking.
For 2024, the Compensation Committee approved the grant of a mix of PSUs and RSUs to the
NEOs. The RSUs represent 40% of the total target award amount and will vest ratably over
three years from the date of grant. The PSUs represent 60% of the total target award amount,
assuming performance and vesting at target levels. The performance metric for the 2024 PSU
LTI Awards were based on cumulative adjusted EBITDA dollars. The metric was chosen because
we believe it is a driver of sustained value creation over the long term for our shareholders. The
cumulative adjusted EBITDA dollar metric has a three-year performance period and a payout
range of 0-200% based on the achievement of the pre-established goals (below threshold
performance equating to 0%, threshold performance equating to 25%, target performance
equating to 100% and maximum performance equating to 200%), the achievement of which
will be determined by the Compensation Committee following the three-year performance
period ending December 31, 2026. In 2024, the Compensation Committee granted the following
LTI Awards to the NEOs:
|
Named Executive
Officer
|
Target LTI as a
% of Base Salary
|
Total Grant Date
Fair Value ($)
|
PSUs
|
RSUs
|
|
Russell A. Becker
|
420%
|
$5,985,054
|
$3,591,025
|
$2,394,029
|
|
Glenn David Jackola
|
n/a
|
$250,065
|
$150,032
|
$100,033
|
|
Kevin S. Krumm
|
250%
|
$2,080,043
|
$1,248,033
|
$832,010
|
|
Louis B. Lambert
|
175%
|
$962,536
|
$577,507
|
$385,029
|
|
Kristina M. Morton
|
155%
|
$790,530
|
$474,325
|
$316,205
|
The above PSU award represents the target grant amount; actual shares earned at vesting, if
any, may be higher or lower depending on the level of performance achieved.
Off-Cycle Equity Award for Mr. Jackola
In connection with Mr. Jackola's appointment to Interim Chief Financial Officer, the
Compensation Committee approved a special one-time RSU award with a fair market value of
$500,018 on December 1, 2024. This award will vest in three equal annual installments,
beginning in December 2025.
2022-2024 PSU Payout
In March 2022, Mr. Becker and Mr. Jackola were granted Adjusted EBITDA PSUs (50% of total
PSU grant value) and Target Share Price PSUs (50% of total PSU grant value). Mr. Becker and
Mr. Jackola received the vested shares for both awards in February and March 2025. Mr.
Lambert and Ms. Morton did not receive a 2022-2024 PSU award.
Adjusted EBITDA Dollar Award
These PSUs had a performance period of January 1, 2022 - December 31, 2024 and have a
payout range of 0 - 200% for Mr. Becker and 0 - 175% for Mr. Jackola based 100% on 3-year
Cumulative Adjusted EBITDA dollars for the three-year performance period.
|
2022 - 2024 Financial Targets
|
2022 - 2024
Actual Results
|
||||
|
Metric
|
Threshold
|
Threshold
|
Target
|
Maximum
|
|
|
3-year Cumulative
Adjusted EBITDA
($ in millions)
|
$2,112
|
$2,112
|
$2,224
|
$2,379
|
$2,417
|
|
Becker Payout %
|
0%
|
25%
|
100%
|
200%
|
200%
|
|
Jackola Payout %
|
0%
|
25%
|
100%
|
175%
|
175%
|
|
28
|
|
Compensation Discussion Analysis
The original PSU targets were increased to reflect the impact of acquisition and divestiture
activity during the performance period. The Company’s cumulative adjusted EBITDA dollar for
the three year performance period was $2,417 million, resulting in an 175% payout for Mr.
Jackola and a 200% payout for Mr. Becker. These results reflect adjustments based on policies
previously adopted by the Compensation Committee for the impact of foreign exchange
described in Appendix A.
Target Share Price Award
These PSUs vest at target and only in the event that the performance target was achieved. The
share price performance criteria was a $30+ per share price for 20 consecutive trading days.
This represented a 44% increase from the grant date share price. On December 27, 2023, that
performance criteria was met and 100% of the granted shares vested on March 9, 2025.
Benefits and Other Perquisites
We provide team members, including the NEOs, with a range of employee benefits including life
and health insurance, disability benefits and retirement benefits (as described below), that are
designed to assist in attracting and retaining skilled team members critical to our long-term
success, and to be competitive with market practice.
401(k) Profit Sharing Plan
Most of our domestic team members, including our NEOs, are eligible to participate in the
Company’s tax-qualified 401(k) Profit Sharing Plan (the “401(k) Plan”). Pursuant to the
401(k) Plan, team members may elect to contribute a portion of their current compensation to
the 401(k) Plan, in an amount up to the statutorily prescribed annual limit. The 401(k) Plan
provides the option for the Company to make matching contributions. Participants may also
direct the investment of their 401(k) Plan accounts into several investment alternatives. The
Profit Sharing Plan provides for an annual discretionary contribution of the Company's common
stock based on certain performance criteria reviewed and approved by the Compensation
Committee.
Other Benefits and Perquisites
We provide each of our NEOs with an executive term life insurance policy which provides a
death benefit of $550,000 and an executive disability insurance policy which covers up to 75%
of their base salary. We provide each of our NEOs with a car allowance. Certain NEOs receive
reimbursement of the cost of annual physicals.
Perquisites paid by the Company are reflected in the “All Other Compensation” column in the
Summary Compensation Table in the “Executive Compensation” section.
Employee Stock Purchase Plan
Most of our domestic team members, including our NEOs, are eligible to participate in the
Company’s Employee Stock Purchase Plan (the “ESPP”). Sales of shares of our common stock
under the ESPP are generally made pursuant to offerings that are intended to satisfy the
requirements of Section 423 of the Internal Revenue Code. The ESPP permits team members of
the Company, including our NEOs, to purchase common stock at a discount equal to 85% of the
lesser of (i) the market value of the common stock on the first day of the offering period, or (ii)
the market value of the common stock on the purchase date, whichever is lower. Participants
are subject to eligibility requirements and may not purchase more than 500 shares in any
offering period or more than $10,000 of common stock in a year under the ESPP.
Expatriate Assignments
Team members that go on an expatriate assignment are eligible for specific benefits. Expatriate
benefits offered to executives are consistent with benefits offered to other team members on
similar assignments. These benefits include housing allowance, relocation, goods and services
|
|
29
|
Compensation Discussion Analysis
allowance, home leave, spousal assistance, and tax equalization. Allowances paid by the
Company are reflected in the “All Other Compensation” column in the Summary Compensation
Table in the “Executive Compensation” section.
Other Compensation-Related Practices and Policies
Change in Control
The Employment Agreement with Mr. Becker provides that if he is terminated either without
“cause” (as defined in his Employment Agreement) or terminates his employment for “good
reason” (as defined in his Employment Agreement) during the two-year period immediately
following a “change in control” (as defined in the Equity Incentive Plan), he will be entitled to
certain payments and benefits. The Executive Severance Policy, effective January 1, 2023 and
applicable to Ms. Morton and Mr. Lambert, provides that if an Eligible Executive (as defined in
the policy) is terminated without “cause” (as defined in the policy) or terminates their
employment for “good reason” (as defined in the Equity Incentive Plan) during the one-year
period following a “change in control” (as defined in the Equity Incentive Plan), they will be
entitled to certain severance payments and benefits. See the “Potential Payments Upon
Termination or Change in Control” section below. We believe such change in control provisions
serve the best interests of the Company and our shareholders by allowing our executives to
exercise sound business judgement without fear of significant economic loss in the event they
lose their employment with the Company as a result of a change in control. We also believe that
such arrangements are competitive, reasonable and necessary to attract and retain key
executives. As Interim CFO, Mr. Jackola is not an "Eligible Executive" under the Executive
Severance Policy.
Executive Severance
Under his Employment Agreement, if Mr. Becker is involuntarily terminated without “cause” or
terminates his employment for “good reason” during a period outside the two-year period
immediately following a change in control, he will be entitled to: (i) all previously earned and
accrued but unpaid amounts of his base salary up to his termination date; and (ii) subject to
certain conditions, severance pay as described under the “Potential Payments Upon Termination
or Change in Control” section below. Under the Executive Severance Policy, effective January 1,
2023, Mr. Lambert and Ms. Morton are entitled to severance pay as described under the
“Potential Payments Upon Termination or Change in Control” section below.
Clawback Policy
Effective August 1, 2023, the Company amended its Executive Compensation Clawback Policy
to apply to excess incentive-based compensation received by any officers subject to Section 16
of the Exchange Act ("covered officers") in the event of a required accounting restatement. The
policy is intended to comply with the final rules regarding recovery of erroneously awarded
compensation as promulgated by the SEC and the NYSE in 2022 and 2023, respectively.
Subject to limited exceptions, the policy provides that the Company will recover the incentive-
based compensation received by each covered officer during the prior three fiscal years that
exceeds the amount that the covered officers otherwise would have received had the incentive-
based compensation been determined based on the restated financial statements.
Executive Stock Ownership Guidelines
The Compensation Committee believes that it is important to align the interests of our directors
and executive officers, including our NEOs, with the interests of our shareholders. In 2022, the
Compensation Committee adopted Stock Ownership Guidelines for Executive Officers and Non-
Employee Directors, which require non-employee directors and executive officers to hold shares
with a value equal to or exceeding a multiple of annual cash retainer or base salary, as
applicable. Each non-employee director and executive officer is expected to comply with the
guidelines within four years following the date he or she becomes subject to the requirements.
|
30
|
|
Compensation Discussion Analysis
Failure to satisfy these Guidelines will limit the ability of the relevant individual to sell shares of
our stock. The following table sets forth the Stock Ownership Guidelines:
|
Title
|
Stock Ownership Guidelines
|
|
|
CEO
|
5x Base Salary
|
|
|
Executive Vice Presidents Senior Vice Presidents
|
2x Base Salary
|
Shares included in this calculation are those directly or indirectly owned (including without
limitation unvested RSU awards not subject to achievement of performance goals) and shares
held in savings plans (including without limitation the 401(k) Plan) or acquired through the
ESPP. All NEOs are in compliance with the Stock Ownership Guidelines.
|
|
31
|
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes the compensation of our NEOs for the fiscal years presented.
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)(1)(2)
|
Non-Equity
Incentive
Plan
Compensation
($)(3)
|
All Other
Compensation
($)(4)
|
Total
($)
|
|||||
|
Russell A. Becker
|
2024
|
$
1,425,000
|
$
—
|
$
5,985,054
|
$
1,373,344
|
$
55,210
|
$
8,838,608
|
|||||
|
President and Chief
Executive Officer
|
2023
|
$
1,425,000
|
$
—
|
$
5,700,030
|
$
3,012,094
|
$
60,506
|
$
10,197,630
|
|||||
|
2022
|
$
1,350,000
|
$
—
|
$
5,400,052
|
$
1,898,100
|
$
53,705
|
$
8,701,857
|
||||||
|
Glenn David Jackola
(5)
|
2024
|
$
386,250
|
$
15,000
|
$
750,083
|
$
442,756
|
$
231,142
|
$
1,825,231
|
|||||
|
Interim Chief Financial
Officer
|
2023
|
$
375,000
|
$
—
|
$
250,009
|
$
259,930
|
$
246,286
|
$
1,131,225
|
|||||
|
2022
|
$
347,500
|
$
120,000
|
$
175,045
|
$
244,292
|
$
10,151
|
$
896,988
|
||||||
|
Kevin S. Krumm
|
2024
|
$
797,333
|
$
—
|
$
2,080,043
|
$
—
|
$
43,486
|
$
2,920,862
|
|||||
|
Former Executive Vice
President and Chief
Financial Officer
|
2023
|
$
792,315
|
$
—
|
$
1,980,020
|
$
1,339,272
|
$
39,732
|
$
4,151,339
|
|||||
|
2022
|
$
750,000
|
$
—
|
$
1,875,022
|
$
1,054,500
|
$
27,398
|
$
3,706,920
|
||||||
|
Louis B. Lambert
|
2024
|
$
550,000
|
$
—
|
$
962,536
|
$
318,038
|
$
43,688
|
$
1,874,262
|
|||||
|
Senior Vice
President,General
Counsel and Secretary
|
2023
|
$
500,000
|
$
—
|
$
875,018
|
$
634,125
|
$
22,127
|
$
2,031,270
|
|||||
|
2022
|
$
218,750
|
$
120,000
|
$
600,013
|
$
230,672
|
$
5,431
|
$
1,174,866
|
||||||
|
Kristina M. Morton
|
2024
|
$
520,000
|
$
—
|
$
790,530
|
$
300,690
|
$
43,995
|
$
1,655,215
|
|||||
|
Senior Vice President,
Chief People Officer
|
2023
|
$
475,000
|
$
—
|
$
712,530
|
$
602,419
|
$
32,061
|
$
1,822,010
|
|||||
|
2022
|
$
397,211
|
$
107,000
|
$
1,600,017
|
$
418,859
|
$
16,896
|
$
2,539,983
|
(1)
The amounts in this column do not reflect compensation actually received by the NEOs, nor do they reflect the
actual value that will be recognized by the NEOs. Instead, the amounts represent the aggregate grant date fair
value of awards computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions used
in calculating the amounts for 2024, see Note 20 to our historical consolidated financial statements for the year
ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024.
(2)
Amounts shown in this column represent the aggregate grant date fair value of PSUs granted to certain of our
NEOs, and the grant date fair value of time-based RSUs granted to each of our NEOs in the fiscal years indicated,
computed in accordance with FASB ASC Topic 718. The aggregate grant date fair value of the PSUs that have an
EBITDA performance condition was computed based on the probable outcome of the applicable performance target
as of the grant date and 100% achievement of such performance target. For 2024, the value of these PSUs at the
grant date assuming the highest level of performance achieved, earned at 200% of target would be $7,182,051 for
Mr. Becker; $300,063 for Mr. Jackola; $2,496,066 for Mr. Krumm; $1,155,015 for Mr. Lambert; and $948,650 for
Ms. Morton. The grant date fair value of the time-based RSUs was computed in accordance with FASB ASC Topic
718, based on the closing market price of our common stock on the grant date. Additional information regarding
the 2024 equity awards is set forth below in the
Grants of Plan-Based Awards During 2024
table.
(3)
The amounts reported reflect compensation earned for 2024 performance under our annual cash incentive
compensation program. We make payments under this program in the first quarter of the fiscal year following the
fiscal year in which they were earned after finalizing our annual audited financial statements.
(4)
These amounts represent Company matching contributions to the 401(k) Plan, Company profit-sharing
contributions of common stock to the 401(k) Plan, executive life and disability insurance benefits, annual executive
physicals, club fees and car allowance. Additional detail regarding the components of the amounts shown for 2024
for each of our NEOs is provided in the "All Other Compensation Table" below.
(5)
Mr. Jackola became a NEO in 2024.
|
32
|
|
Executive Compensation
All Other Compensation Table
The following table provides additional information on the amounts reported in the All Other
Compensation column of the Summary Compensation Table for 2024.
|
R. Becker
|
G.D. Jackola
|
K. Krumm
|
L. Lambert
|
K. Morton
|
|
|
401(k) Contributions by Company
|
|||||
|
Profit Sharing
|
$11,184
|
$11,184
|
$11,184
|
$11,184
|
$11,184
|
|
Cash Match
|
$10,150
|
$10,150
|
$10,150
|
$10,150
|
$10,150
|
|
Executive Life and Disability
|
$24,875
|
$739
|
$9,838
|
$11,454
|
$11,761
|
|
Annual Executive Physicals
|
$0
|
$0
|
$3,314
|
$1,900
|
$1,900
|
|
Expatriate Allowances Relocation
|
$0
|
$209,068
|
$0
|
$0
|
$0
|
|
Car Allowance
|
$9,000
|
$0
|
$9,000
|
$9,000
|
$9,000
|
|
Total
|
$55,209
|
$231,141
|
$43,486
|
$43,688
|
$43,995
|
Grants of Plan-Based Awards During 2024
The following table provides information about cash (non-equity) and equity incentive
compensation awarded to our NEOs in 2024. Information on the terms of these awards is
discussed in greater detail in this proxy statement under the caption “Compensation Discussion
and Analysis.” See “Potential Payments Upon Termination or Change in Control” for a discussion
of how equity awards are treated under various termination scenarios.
|
Name
|
Estimated Future Payouts
Under
Non-Equity Incentive Plan
Awards(1)
|
Grant
Date and
Approval
Date
|
Estimated Future Payouts
Under
Equity Incentive Plan
Awards(2)
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)(3)
|
Grant
Date Fair
Value of
Stock
Awards
($)(4)
|
||||
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
||||
|
Russell A. Becker
|
$712,500
|
$1,781,250
|
$3,562,500
|
2/26/2024
|
25,084
|
100,336
|
200,672
|
$3,591,025
|
|
|
2/26/2024
|
66,891
|
$2,394,029
|
|||||||
|
G. David Jackola
|
$
104,325
|
$
260,813
|
$
521,625
|
2/26/2024
|
1,048
|
4,192
|
8,384
|
$
150,032
|
|
|
2/26/2024
|
2,795
|
$
100,033
|
|||||||
|
12/1/2024
|
13,235
|
$
500,018
|
|||||||
|
Kevin S. Krumm
|
—
|
—
|
—
|
2/26/2024
|
8,718
|
34,871
|
69,742
|
$1,248,033
|
|
|
2/26/2024
|
23,247
|
$832,010
|
|||||||
|
Louis B. Lambert
|
$165,000
|
$412,500
|
$825,000
|
2/26/2024
|
4,034
|
16,136
|
32,272
|
$577,507
|
|
|
2/26/2024
|
10,758
|
$385,029
|
|||||||
|
Kristina M. Morton
|
$156,000
|
$390,000
|
$780,000
|
2/26/2024
|
3,313
|
13,253
|
26,506
|
$474,325
|
|
|
2/26/2024
|
8,835
|
$316,205
|
|||||||
(1)
The amounts in these columns reflect potential payments of annual cash incentive compensation based on 2024
performance. The 2024 annual cash incentive payments were made in March 2025. The actual amounts paid under
our annual cash incentive compensation program are the amounts reflected in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table.
(2)
This column represents the number of PSUs granted in 2024 to the NEOs. The threshold, target and maximum
amounts reflect the maximum number of shares that may be earned assuming that 25%, 100% and 200% of the
applicable performance target is achieved. See footnote 3 to the Summary Compensation Table and page 28 of the
CDA for additional information.
(3)
This amount represents the number of RSUs granted in 2024 to the NEOs. The RSUs vest in equal installments on
the first, second and third anniversaries of the grant date.
(4)
Each amount reported in this column represents the grant date fair value of the applicable award which was
determined pursuant to FASB ASC Topic 718. The actual amounts that will be received by our NEOs with respect to
these performance-based awards will be determined at the end of the performance period based upon our actual
stock price performance, which may differ from the performance that was deemed probable at the date of the
grant.
|
|
33
|
Executive Compensation
Outstanding Equity Awards at 2024 Year End
The following table provides information concerning unvested RSUs and PSUs held by each of
our NEOs as of December 31, 2024. Mr. Krumm forfeited all of his outstanding equity prior to
December 31, 2024; therefore, he is not included in the table below.
|
Name
|
Stock Awards
|
|||||
|
Grant Date
|
Number of Shares
or Units of Stock
That Have Not
Vested
(#)(1)
|
Market Value of
Shares or Units of
Stock That Have
Not Vested
($)(2)
|
Equity Incentive
Plan Awards: # of
Unearned Shares
Not Vested
(#)
|
Equity Incentive
Plan Awards: Value
Unearned Shares
Not Vested
($)(2)
|
||
|
Russell A. Becker
|
2/26/2024
|
66,891
|
$2,406,069
|
|||
|
2/26/2024
|
(3)
|
25,084
|
$902,271
|
|||
|
2/27/2023
|
64,902
|
$2,334,525
|
||||
|
2/27/2023
|
(4)
|
36,508
|
$1,313,175
|
|||
|
3/9/2022
|
17,333
|
$623,468
|
||||
|
3/9/2022
|
(5)
|
143,618
|
$5,165,939
|
|||
|
3/9/2022
|
(6)
|
207,994
|
$7,481,544
|
|||
|
G. David Jackola
|
12/1/2024
|
13,235
|
$476,063
|
|||
|
2/26/2024
|
2,795
|
$100,536
|
||||
|
2/26/2024
|
(3)
|
1,048
|
$37,697
|
|||
|
2/27/2023
|
2,846
|
$102,371
|
||||
|
2/27/2023
|
(4)
|
1,601
|
$57,597
|
|||
|
3/9/2022
|
562
|
$20,215
|
||||
|
3/9/2022
|
(5)
|
4,655
|
$167,440
|
|||
|
3/9/2022
|
(6)
|
5,900
|
$212,223
|
|||
|
Louis B. Lambert
|
2/26/2024
|
10,758
|
$386,965
|
|||
|
2/26/2024
|
(3)
|
4,034
|
$145,103
|
|||
|
2/27/2023
|
9,963
|
$358,369
|
||||
|
2/27/2023
|
(4)
|
5,604
|
$201,585
|
|||
|
8/2/2022
|
11,179
|
$402,109
|
||||
|
Kristina M. Morton
|
2/26/2024
|
8,835
|
$317,795
|
|||
|
2/26/2024
|
(3)
|
3,313
|
$119,178
|
|||
|
2/27/2023
|
8,113
|
$291,825
|
||||
|
2/27/2023
|
(4)
|
4,564
|
$164,149
|
|||
|
3/9/2022
|
25,678
|
$923,638
|
||||
(1)
The RSUs vest in equal installments on the first, second and third anniversaries of the grant date.
(2)
These amounts are calculated by multiplying the closing price of the underlying shares of common stock on
December 31, 2024, or $35.97 per share, by the number of units. The actual value realized could be different
based upon the stock price at the time of settlement.
(3)
These PSUs are subject to a three-year performance period beginning January 1, 2024 and ending December 31,
2026, and may be earned and vested at the end of the three-year performance period. The amount shown
represents the number of units assuming threshold level performance. There is no assurance that the target
amount will be the actual amount ultimately paid.
(4)
These PSUs are subject to a three-year performance period beginning January 1, 2023 and ending December 31,
2025, and may be earned and vested at the end of the three-year performance period. The amount shown
represents the number of units assuming threshold level performance. There is no assurance that the target
amount will be the actual amount ultimately paid.
(5)
These PSUs vest at the later of the third anniversary of the grant date and the date the performance target is
achieved on or prior to the fifth anniversary of the grant date.
(6)
These PSUs are subject to a three-year performance period beginning January 1, 2022 and ending December 31,
2024, and may be earned and vested at the end of the three-year performance period. The amount shown
represents the number of units assuming maximum level performance, as that is the level of performance actually
achieved under these PSUs.
|
34
|
|
Executive Compensation
Stock Vested During 2024
The following table provides information regarding vesting of RSUs and the value realized on
vesting of RSUs on an aggregated basis during the fiscal year ended December 31, 2024 for
each of the NEOs.
|
Name
|
Stock Awards(1)
|
|||
|
# of Shares Acquired
on Vesting (#)
|
Value Realized on
Vesting ($)(2)
|
|||
|
Russell A. Becker
|
276,661
|
$9,938,668
|
||
|
G. David Jackola
|
1,986
|
$72,744
|
||
|
Kevin S. Krumm
|
37,439
|
$1,353,214
|
||
|
Louis B. Lambert
|
16,162
|
$561,766
|
||
|
Kristina M. Morton
|
29,735
|
$1,144,561
|
||
(1)
These columns reflect RSUs previously awarded to the NEOs that vested during 2024 and represents gross
amounts before withholding for tax purposes.
(2)
Calculated based on the closing price of a share of common stock on the applicable vesting dates.
Potential Payments Upon Termination or Change in Control
Our Employment Agreement with Mr. Becker as in effect in 2025 provides for severance
payments under certain circumstances. Under his Employment Agreement, the Company may
terminate Mr. Becker’s employment at any time with or without “cause” (as defined in his
Employment Agreement), and Mr. Becker may terminate employment at any time for “good
reason” (as defined in his Employment Agreement). If the Company terminates the
employment of Mr. Becker without cause or if he terminates employment for good reason, he
would be entitled to receive (i) his base salary for two years from the date of termination, (ii)
an amount equal to two times his target annual bonus, paid in two annual installments, (iii) any
earned and accrued but unpaid base salary up to the date of termination, (iv) his prorated
annual bonus for the year in which the termination occurs, (v) any unpaid annual bonus with
respect to any completed fiscal year and (vi) his vested employee benefits. Mr. Becker would
not be entitled to any unearned salary, bonus or other benefits if the Company were to
terminates him for cause or if he were to terminate employment voluntarily without good
reason.
Also pursuant to Mr. Becker's Employment Agreement, if employment should terminate as a
result of death or disability, Mr. Becker, or his estate, would be entitled to receive (i) all
previously earned and accrued but unpaid base salary up to the date of termination and (ii) his
prorated annual bonus for the year in which termination occurs. The Company’s obligation
under Mr. Becker's Employment Agreement terminates on the last day of the month in which
his death occurs or on the date of termination of employment on account of his disability.
With respect to Mr. Lambert and Ms. Morton, as provided under the Executive Severance Policy
(i) if, during the one-year period immediately following a “change in control,” the Company
terminates the executive without “cause” (as defined in the policy) or if the executive
terminates employment for “good reason” (as defined in the Equity Incentive Plan), the
executive would be entitled to receive, subject to satisfaction of certain conditions, (a) an
amount equal to 1.5x base salary, (b) an annual bonus amount based on target performance,
(c) continued insurance coverage for twelve months following the date of termination, and (d)
accelerated vesting of his or her unvested RSUs and PSUs at the greater of actual or target
performance; and (ii) if the Company should terminate the executive without cause at any
other time, the executive would be entitled to receive, subject to satisfaction of certain
conditions, (a) an amount equal to 1.0x or 1.5x base salary, determined by length of
employment, (b) an annual bonus amount based on target performance, and (c) continued
|
|
35
|
Executive Compensation
COBRA insurance coverage for twelve months following the date of termination. Neither Mr.
Lambert nor Ms. Morton would be entitled to any unearned salary, bonus or other benefits if the
Company were to terminate them for cause or if they were to terminate employment voluntarily
without good reason. Mr. Jackola is not entitled to the Executive Severance Policy or any other
Severance Policy.
The following table shows the estimated benefits payable to each NEO in the event of
termination of employment and/or change in control of the Company, as described above. The
amounts shown assume that a termination of employment or a change in control occurs on
December 31, 2024. The amounts do not include payments or benefits provided under
insurance or other plans that are generally available to all full-time team members.
|
Name
|
Termination
without Cause or for
Good Reason not in
connection with a
Change in Control ($)
|
Death or
Disability ($)
|
Termination
without Cause or for
Good Reason in
connection with a
Change in Control ($)
|
Change in
Control ($)
|
||||
|
Russell A. Becker
|
||||||||
|
Cash Severance
|
$8,193,750
|
$1,781,250
|
$8,193,750
|
—
|
||||
|
Intrinsic Value of Equity
(1)
|
—
|
17,343,151
|
$23,132,559
|
$5,364,062
|
||||
|
Insurance Benefits
(2)
|
—
|
—
|
$40,093
|
—
|
||||
|
Total
|
$8,193,750
|
$19,124,401
|
$31,366,402
|
$5,364,062
|
||||
|
G. David Jackola
|
||||||||
|
Cash Severance
|
—
|
—
|
—
|
—
|
||||
|
Intrinsic Value of Equity
(1)
|
—
|
1,181,399
|
$1,369,054
|
$699,185
|
||||
|
Insurance Benefits
(2)
|
—
|
—
|
—
|
—
|
||||
|
Total
|
—
|
1,181,399
|
$1,369,054
|
$699,185
|
||||
|
Louis B. Lambert
|
||||||||
|
Cash Severance
|
$1,237,500
|
—
|
$1,237,500
|
—
|
||||
|
Intrinsic Value of Equity
(1)
|
—
|
2,132,086
|
$2,534,194
|
$1,147,443
|
||||
|
Insurance Benefits
(2)
|
$17,125
|
—
|
$17,125
|
—
|
||||
|
Total
|
$1,254,625
|
2,132,086
|
$3,788,819
|
$1,147,443
|
||||
|
Kristina M. Morton
|
||||||||
|
Cash Severance
|
$1,192,500
|
—
|
$1,192,500
|
—
|
||||
|
Intrinsic Value of Equity
(1)
|
—
|
1,742,926
|
$2,666,564
|
$1,533,257
|
||||
|
Insurance Benefits
(2)
|
$25,835
|
—
|
$25,835
|
—
|
||||
|
Total
|
$1,218,335
|
1,742,926
|
$3,884,899
|
$1,533,257
|
(1)
The Intrinsic Value of Equity represents the value of the acceleration of vesting of the executive’s RSUs and PSUs in
the event of termination without cause or for good reason during the applicable period immediately following a
change in control or upon a change in control pursuant to the applicable PSU agreement. The value is calculated by
multiplying the closing price of a share of common stock on December 31, 2024, or $35.97 per share, by the
number of units, which, in the case of PSUs, assumes target performance.
(2)
Amount includes the cost of benefits continuation for the applicable period.
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Act, and Item 402(u) of Regulation S-K, we
are providing the following information about the relationship of the median annual total
compensation of our employees and the annual total compensation of our CEO, Mr. Becker.
For fiscal 2024:
•
The total compensation of our
median employee
, calculated in accordance with the rules
applicable to the Summary Compensation Table, was $75,771;
•
The total compensation of our CEO, as reported in the Summary Compensation Table, was
$8,838,608; and
•
The ratio of our CEO's total compensation to the median employee's total compensation
|
36
|
|
Executive Compensation
was 117
to 1.
To identify our median employee:
•
We included all Company employees (excluding the CEO) as of December 31, 2022,
located in 10 countries in which we have operations; our employees in those 10 countries
represent approximately 95% of employees on that date.
•
We excluded 1,402 employees from 13 countries under the SEC’s de minimis exemption.
(1)
•
We used the gross cash compensation paid during calendar year 2022; we did not make
any cost-of-living or other adjustments in identifying the median employee, and we did
not annualize the pay of any employees who were not employed for the full year. As of
December 31, 2022, our employee population consisted of approximately 27,400
individuals working at the Company and its subsidiaries, of which approximately 13,500
were based in the United States and approximately 13,900 were based outside of the
United States.
There has not been a material change in our team member population or compensation
arrangements that would result in a significant change in the disclosure. The median employee
determined for fiscal 2022 and included in fiscal 2023 is no longer employed at the Company.
Accordingly, as permitted by SEC Rules, an employee whose compensation was substantially
similar to that of the fiscal 2022 median employee (and also an
hourly
employee located in the
United States) was selected as the median employee for fiscal 2024.
The SEC rules for identifying the median employee and calculating the pay ratio based on that
employee’s annual total compensation allow companies to adopt a variety of methodologies, to
apply certain exclusions and to make reasonable estimates and assumptions that reflect their
employee populations and compensation practices. As a result, the pay ratio reported by other
companies may not be comparable to the pay ratio reported above, as other companies have
different employee populations and compensation practices, and may utilize different
methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
This information is being provided in response to SEC disclosure requirements. Neither the
Compensation Committee nor the leadership team of the Company uses the pay ratio measure
in making any compensation decisions.
(1)
The countries and approximate number of employees excluded from the calculation are as follows:
Austria (73), Belgium (279), China (75), Ireland (167), Macau (114), Monaco (3), New Zealand (205),
Norway (88), Portugal (5), Singapore (157), Sweden (51), Switzerland (136), and Thailand (49).
|
|
37
|
Executive Compensation
Pay Versus Performance
As required by pay versus performance rules adopted by the SEC in 2022 (“PVP Rules”), the
below Pay Versus Performance table (“PVP Table”) provides information about compensation for
this proxy statement’s NEOs, as well as NEOs from our 2024, 2023, 2022, and 2021 proxy
statements (each of 2020, 2021, 2022, 2023, and 2024, a “Covered Year”). The PVP Table also
provides information about the results for certain financial performance measures during those
same Covered Years. In reviewing this information, there are a few important things to
consider:
•
The information in columns (b) and (d) comes directly from this and prior years’ Summary
Compensation Tables, without adjustment;
•
As required by the PVP Rules, we describe the information in columns (c) and (e) as
“compensation actually paid” (or “CAP”) to the applicable NEOs, but these CAP amounts
may not necessarily reflect compensation that our NEOs actually earned for their service in
the Covered Years;
•
The PVP Rules require that we choose a peer group or index for purposes of TSR
comparisons, and we have chosen the same peer group reflected in our Annual Report on
Form 10-K for the year ended December 31, 2024, which group consists of: Cintas
Corporation, Comfort Systems USA, Inc., Dycom Industries, Inc., EMCOR Group Inc., First
Service Corporation, Johnson Controls International plc, MasTec Inc., Otis Worldwide, and
Quanta Services, Inc (the “PVP Peer Group”); and
•
As required by the PVP Rules, we provide information about our cumulative TSR,
cumulative PVP Peer Group TSR results and U.S. GAAP net income results (the “External
Measures”) during the Covered Years in the PVP Table, but we did not actually base any
compensation decisions for the NEOs on, or link any NEO pay to, these particular External
Measures.
Pursuant to the PVP Rules, the Company is required to designate one financial metric as the
“Company-Selected Measure,” or the most important financial measure that demonstrates how
the Company sought to link 2024 executive pay to performance. For 2024, the Company has
selected adjusted EBITDA. Please refer to Appendix A for reconciliation of non-GAAP measures
to most directly comparable GAAP measures.
|
Year
|
Summary
Compensation
Table Total
for PEO (1)
|
Compensation
Actually Paid
to PEO (1)(2)
|
Average
Summary
Compensation
Table
Total for
Non-PEO
NEOs (1)
|
Average
Compensation
Actually
Paid to
Non-PEO
NEOs (1)(3)
|
Value of Initial Fixed
$100 Investment Based
On:
|
Net
Income
(Loss)
(millions)
|
Adjusted
EBITDA
(millions)
|
|
|
Total
Shareholder
Return
|
Peer
Group
Total
Shareholder
Return (4)
|
|||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
|
2024
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2023
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2022
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2021
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2020
|
$
|
$
|
$
|
$
|
$
|
$
|
($
|
$
|
(1)
Mr.
Becker
was the principal executive officer (“PEO”) for each of the Covered Years. The names of each of the
other NEOs included for purposes of calculating the average amounts in each Covered Year are as follows: (i) for
2024, Mr. Krumm, Mr. Lambert, Mr. Jackola, and Ms. Morton, (ii) for 2023, Mr. Krumm, Mr. Lambert, and Ms.
Morton; (iii) for 2022, Mr. Krumm, Mr. Lambert, Ms. Morton, Mr. Jackola, and Ms. Fike; (iv) for 2021, Mr. Krumm,
Ms. Fike, Mr. Grunau, Mr. Lydon, and Mr. Cebulla; and (v) for 2020, Mr. Lydon, Mr. Chepey, Ms. Fike, Mr. Grunau,
and Mr. Polovitz.
(
2)
In accordance with the PVP Rules, the following adjustments were made to Mr. Becker’s total compensation for
each Covered Year to determine the PEO CAP. The equity award adjustments for each applicable Covered Year
include those adjustments required by Item 402(v) of Regulation S-K. The valuation assumptions used to calculate
fair values did not materially differ from those disclosed at the time of grant.
|
38
|
|
Executive Compensation
|
Year
|
Stock
Awards
Value
Reported
for the
Covered
Year (a)
|
Year End
Fair Value
of Equity
Awards
Granted in
the Covered
Year
|
Year over
Year Change
in Fair Value
of Equity
Awards
Outstanding
and
Unvested at
Year End
|
Change in
Fair Value
From Prior
Year-End to
Vesting Date
of Equity
Awards
Granted in
Prior Years
that Vested in
the Covered
Year
|
Fair Value
as of
Vesting
Date of
Equity
Awards
Granted
and Vested
in the
Covered
Year
|
Fair Value at
the End of
the Prior
Year of
Equity
Awards that
Failed to
Meet Vesting
Conditions in
the Covered
Year
|
Value of
Dividends or
Other Earnings
Paid on Stock
Awards not
Otherwise
Reflected in
Fair Value or
Total
Compensation
|
Total
Equity
Award
Adjustments
|
|
2024
|
($
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2023
|
($
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2022
|
($
|
$
|
($
|
($
|
$
|
$
|
$
|
($
|
|
2021
|
($
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2020
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
(a)
The grant date fair value of equity awards represents the amount reported in the “Stock Awards” column in
the Summary Compensation Table and subtracted for the applicable Covered Year.
compensation for the NEOs as a group (excluding Mr. Becker) for each Covered Year to determine the
compensation actually paid, using the same methodology described above in Note 2. The amounts deducted or
added in calculating the total average equity award adjustments are as follows. The equity award adjustments for
each applicable Covered Year include those adjustments required by Item 402(v) of Regulation S-K. The valuation
assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.
|
Year
|
Average
Stock
Awards
Value
Reported for
the Covered
Year (a)
|
Average
Year End
Fair Value
of Equity
Awards
Granted in
the
Covered
Year
|
Year over
Year
Average
Change in
Fair Value of
Equity
Awards
Outstanding
and
Unvested at
Year End
|
Average
Change in
Fair Value
From Prior
Year-End to
Vesting Date
of Equity
Awards
Granted in
Prior Years
that Vested
in the
Covered Year
|
Average
Fair Value
as of
Vesting
Date of
Equity
Awards
Granted
and Vested
in the
Covered
Year
|
Average Fair
Value at the
End of the
Prior Year of
Equity Awards
that Failed to
Meet Vesting
Conditions in
the Covered
Year (b)
|
Average Value
of Dividends or
Other Earnings
Paid on Stock
Awards not
Otherwise
Reflected in
Fair Value or
Total
Compensation
|
Total
Average
Equity
Award
Adjustments
|
|
2024
|
($
|
$
|
$
|
$
|
$
|
$
(
|
$
|
($
|
|
2023
|
($
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2022
|
($
|
$
|
($
|
($
|
$
|
$
|
$
|
($
|
|
2021
|
($
|
$
|
$
|
$
|
$
|
($
|
$
|
($
|
|
2020
|
$
(
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
(a)
The grant date fair value of equity awards represents the amount reported in the “Stock Awards” column in
the Summary Compensation Table and subtracted for the applicable Covered Year.
(b)
Consists of prior-year equity awards held by the Company’s former CFO that were forfeited prior to fiscal
year end, with a fair value at the end of the prior fiscal year of $7,729,121. No prior-year awards held by
other NEOs failed to meet vesting conditions during the current fiscal year.
(4)
Peer Group TSR represents the weighted peer group TSR, weighted according to the respective companies’ stock
market capitalization at the beginning of each period for which a return is indicated.
Descriptions of Relationships Between CAP and Certain Financial Performance
Measure Results
The PVP Rules require that comparisons be made between certain columns in the PVP Table.
Such comparisons are provided graphically below. In accordance with that approach, the
following charts show the relationships across the Covered Years between (1) our cumulative
TSR and the cumulative TSR for the PVP Peer Group reflected in the PVP Table above, (2) our
cumulative TSR and Mr. Becker’s CAP and the non-PEO NEOs’ average CAP, (3) our GAAP Net
Income reflected in the PVP Table above and Mr. Becker’s CAP and the non-PEO NEOs’ average
CAP, and (4) our adjusted EBITDA reflected in the PVP Table above and Mr. Becker’s CAP and
|
|
39
|
Executive Compensation
the non-PEO NEOs’ average CAP.
compensation for 2024 as further described in our CDA.
|
40
|
|
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the disclosure set forth above under
the heading “Compensation Discussion and Analysis” with the Company's leadership team and,
based on such review and discussions, it has recommended to the Board that the
“Compensation Discussion and Analysis” be included in this proxy statement.
The Compensation Committee
Thomas V. Milroy, Chair
Paula D. Loop
Cyrus D. Walker
|
|
41
|
SECURITY OWNERSHIP
The following table sets forth certain information regarding (i) all shareholders known by the
Company to be the beneficial owner of more than 5% of the Company’s issued and outstanding
shares of common stock and (ii) each director, each NEO and all directors and executive officers
as a group, together with the approximate percentages of issued and outstanding shares of
common stock owned by each of them. Percentages are calculated based upon shares of
common stock issued and outstanding plus shares of common stock which the holder has the
right to acquire under share options, restricted stock units, or Series A Preferred Stock
exercisable for, or convertible into, common stock within 60 days of March 21, 2025. Unless
otherwise indicated, amounts are as of March 21, 2025, and each of the shareholders has sole
voting and investment power with respect to the common stock beneficially owned, subject to
community property laws where applicable. As of March 21, 2025, we had 276,220,967 shares
of common stock issued and outstanding, and 4,000,000 shares of Series A Preferred Stock
issued and outstanding. Each share of common stock and Series A Preferred Stock is entitled to
one vote per share.
Unless otherwise indicated, the address of each person named in the table below is c/o APi
Group, Inc., 1100 Old Highway 8 NW, New Brighton, MN 55112.
|
Beneficial Owner
|
Shares Beneficially
Owned
|
||
|
Number
|
% of
Common
Stock
|
||
|
More than 5% Shareholders:
|
|||
|
Sir Martin E. Franklin
|
30,754,803
|
(1)
|
11.1%
|
|
T. Rowe Price Associates, Inc.
|
15,627,444
|
(2)
|
5.7%
|
|
Entities managed by Viking Global Investors LP
|
21,537,518
|
(3)
|
7.8%
|
|
The Vanguard Group
|
20,790,443
|
(4)
|
7.5%
|
|
Named Executive Officers and Directors:
|
|||
|
Sir Martin E. Franklin
|
30,754,803
|
(1)
|
11.1%
|
|
James E. Lillie
|
6,334,937
|
(5)
|
2.3%
|
|
Ian G.H. Ashken
|
5,994,112
|
(6)
|
2.2%
|
|
Russell A. Becker
|
3,362,905
|
(7)
|
1.2%
|
|
G. David Jackola
|
9,435
|
(8)
|
*
|
|
Kevin S. Krumm
|
48,584
|
(9)
|
*
|
|
Louis B. Lambert
|
7,719
|
(10)
|
*
|
|
Paula D. Loop
|
10,214
|
*
|
|
|
Anthony E. Malkin
|
198,810
|
(11)
|
*
|
|
Thomas V. Milroy
|
51,243
|
*
|
|
|
Kristina M. Morton
|
51,751
|
(12)
|
*
|
|
Cyrus D. Walker
|
32,010
|
*
|
|
|
Carrie A. Wheeler
|
32,010
|
*
|
|
|
All Current Executive Officers and Directors as a group (12 persons):
|
46,839,949
|
(13)
|
17.0%
|
*
Represents beneficial ownership of less than one percent (1%) of our outstanding common stock or total voting
power, as applicable.
(1)
This amount consists of (i) 14,045,860 shares of common stock held by MEF Holdings, LLLP; (ii) 4,017,653 shares
of common stock (which includes 4,000,000 shares of common stock issuable upon conversion of Series A
Preferred Stock which are convertible at any time at the option of the holder into common stock on a one-for-one
basis) held by Mariposa Acquisition IV, LLC; (iii) 5,288,734 shares of common stock held by JTOO (as defined
below), which Sir Martin has the sole power to vote pursuant to an Irrevocable Proxy Agreement, dated January
|
42
|
|
Security Ownership
5, 2021, between himself and each of Ian G. H. Ashken and James E. Lillie, pursuant to which each of them
granted Sir Martin an irrevocable proxy to vote, for so long as Sir Martin serves as a director of the Company, all
shares of common stock owned, directly or indirectly, by each of them (the “2021 Proxy Agreement”); (iv)
1,046,203 shares of common stock held by James E. Lillie, which Sir Martin has the sole power to vote pursuant
to the 2021 Proxy Agreement; (v) 5,762,102 shares of common stock held by IGHA (as defined below), which Sir
Martin has the sole power to vote pursuant to the 2021 Proxy Agreement; (vi) 232,010 shares of common stock
held by The Ian G. H. Ashken Living Trust (including 200,000 shares of common stock held jointly by the Ian G.H.
Ashken Living Trust and the Nancy K. Ashken Living Trust), which Sir Martin has the sole power to vote pursuant
to the 2021 Proxy Agreement; (vii) and 362,241 shares of common stock held by Brimstone Investments LLC, of
which Sir Martin is the manager. MEF Holdings, LLLP, the general partner of which is wholly-owned by the Martin
E. Franklin Revocable Trust of which Sir Martin is the sole settlor and trustee, holds a limited liability company
interest in Mariposa Acquisition IV, LLC and, as a result, Sir Martin may be deemed to have a pecuniary interest in
2,304,000 shares of common stock issuable upon conversion of Series A Preferred Stock held by Mariposa
Acquisition IV, LLC.
(2)
Based on a Schedule 13G/A filed with the SEC on February 14, 2025. As of December 31, 2024, T. Rowe Price
Associates, Inc. has sole voting power over 15,373,494 shares of common stock and sole dispositive power over
15,627,444 shares of common stock. The address of the principal business office of T. Rowe Price Associates, Inc.
is 100 E. Pratt Street, Baltimore, Maryland 21202.
(3)
Based on a Schedule 13G/A filed with the SEC on February 14, 2025. As of December 31, 2024, (i) 21,537,518
shares of common stock are held by Viking Global Opportunities Illiquid Investments Sub-Master LP (“VGOP”),
which has the power to dispose of and vote the shares directly owned by it, which power may be exercised by its
general partner, Viking Global Opportunities Portfolio GP LLC (“Opportunities Portfolio GP”), Viking Global
Investors LP (“VGI”), an affiliate of Opportunities Portfolio GP, which provides managerial services to VGOP, and
Viking Global Opportunities GP LLC, the sole member of Opportunities Portfolio GP. O. Andreas Halvorsen, David
C. Ott and Rose Shabet, as Executive Committee members of Viking Global Partners LLC (general partner of VGI),
VGP and Viking Global Opportunities Parent GP LLC (“Opportunities Parent”), have shared power to direct the
voting and disposition of the shares of common stock beneficially owned by VGI, VGP and Opportunities Parent.
The address for each of the above entities is c/o Viking Global Investors LP, 600 Washington Boulevard, Floor 11,
Stamford, Connecticut 06901.
(4)
Based on a Schedule 13G/A filed with the SEC on February 13, 2024. As of December 29, 2023, The Vanguard
Group, Inc. has shared voting power over 294,592 shares of common stock; sole dispositive power over
20,297,989 shares of common stock and shared dispositive power over 492,454 shares of common stock. The
address of the principal business office of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.
(5)
This amount consists of (i) 5,288,734 shares of common stock held directly by JTOO LLC (“JTOO”); and (ii)
1,046,203 shares of common stock held directly by Mr. Lillie (which are subject to the 2021 Proxy Agreement but
over which Mr. Lillie retains direct or indirect investment power). In addition, JTOO, which is owned by the Lillie
2015 Dynasty Trust of which Mr. Lillie is the grantor, holds a limited liability company interest in Mariposa
Acquisition IV, LLC and, as a result, Mr. Lillie may be deemed to have a pecuniary interest in 3,389 shares of
common stock held by Mariposa Acquisition IV, LLC and 768,000 shares of common stock issuable upon
conversion of Series A Preferred Stock held by Mariposa Acquisition IV, LLC.
(6)
This amount consists of (i) 5,762,102 shares of common stock held by IGHA (which are subject to the 2021 Proxy
Agreement), the general partner of which is The Ian G.H. Ashken Living Trust (the “Ashken Trust”), of which Mr.
Ashken is the trustee and beneficiary; (ii) 32,010 shares of common stock held directly by the Ashken Trust
(which are subject to the 2021 Proxy Agreement but over which Mr. Ashken has retained direct or indirect
investment power); and (iii) 200,000 shares of common stock directly held by the Ashken Trust and the Nancy K.
Ashken Living Trust as tenants in common. In addition, IGHA Holdings, LLLP (“IGHA”), the general partner of
which is wholly-owned by Ashken Trust, holds a limited liability company interest in Mariposa Acquisition IV, LLC
and, as a result, Mr. Ashken may be deemed to have a pecuniary interest in 3,389 shares of common stock held
by Mariposa Acquisition IV, LLC and 768,000 shares of common stock issuable upon conversion of Series A
Preferred Stock held by Mariposa Acquisition IV, LLC.
(7)
This amount consists of (i) 1,479,225 shares of common stock held directly by Mr. Becker; (ii) 130,950 shares of
common stock held directly by Mr. Becker’s spouse; (iii) 572,993 shares of common stock held by The Russell A.
Becker 2016 Family Trust, of which Mr. Becker’s spouse is the trustee and over which she has sole voting and
investment power; (iv) 644,050 shares of common stock held by The Patricia L. Becker Legacy Trust, of which Mr.
Becker is the trustee and over which he has sole voting and investment power; (v) 531,680 shares of common
stock held by The Russell A. Becker GST Trust, of which Mr. Becker’s spouse is the trustee and over which she has
sole voting and investment power; (vi) 2,212 shares of common stock held by Mr. Becker’s children, whose
principal residence is the same as Mr. Becker’s; and (vii) 1,795 shares of common stock held in a 401(k)
retirement account for the benefit of Mr. Becker. This amount does not include any pro rata ownership interest Mr.
Becker may have in any of the shares of common stock held in an indemnification escrow account in connection
with the APi Acquisition (the “ESOP Escrow Shares”), of which shares the Company has the power to direct the
vote, to the extent any remain following the termination of the indemnification escrow.
(8)
This amount includes 686 shares of common stock held in a 401(k) retirement account for the benefit of Mr.
Jackola.
(9)
Mr. Krumm’s information is as of December 31, 2024, and included 686 shares of common stock held in a 401(k)
retirement account for the benefit of Mr. Krumm.
|
|
43
|
Security Ownership
(10)
This amount includes 283 shares of common stock held in a 401(k) retirement account for the benefit of Mr.
Lambert.
(11)
This amount consists of (i) 87,610 shares of common stock held directly; (ii) 83,400 shares of common Stock held
by a limited liability company of which Mr. Malkin is the manager; and (iii) 27,800 shares of common Stock held
by a limited liability company of which Mr. Malkin is the manager.
(12)
This amount includes 283 shares of common stock held in a 401(k) retirement account for the benefit of Ms.
Morton.
(13)
This amount includes 4,000,000 shares of common stock issuable upon conversion of Series A Preferred Stock.
|
44
|
|
PROPOSAL 2—RATIFICATION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS FOR 2025 FISCAL
YEAR
The Audit Committee of the Board has appointed KPMG to continue to serve as our independent
registered public accounting firm for the 2025 fiscal year. KPMG has been our independent
registered public accounting firm since 2019.
In the event our shareholders do not ratify the appointment of KPMG, such appointment may be
reconsidered by the Audit Committee. Ratification of the appointment of KPMG to serve as our
independent registered public accounting firm for the 2025 fiscal year will in no way limit the
Audit Committee’s authority to terminate or otherwise change the engagement of KPMG for the
2025 fiscal year. We expect representatives of KPMG to attend the 2025 Annual Meeting, where
they will have an opportunity to make a statement, if they so desire, and will also be available
to respond to appropriate questions.
Fees Billed to the Company by its Independent Registered Public Accounting
Firms
The following table presents fees billed for audit and other services rendered by KPMG and in
2024 and 2023:
|
Services Provided
|
2024
(KPMG)
($)
|
2023
(KPMG)
($)
|
||
|
Audit Fees
(1)
|
$
11,076,000
|
$
10,285,000
|
||
|
Audit Related Fees
(2)
|
$
25,000
|
$
279,000
|
||
|
Tax Fees
(3)
|
$
281,000
|
$
30,000
|
||
|
All Other Fees
|
$
—
|
$
—
|
||
|
Total
|
$
11,382,000
|
$
10,594,000
|
(1)
Audit fees for 2024 and 2023 were for professional services rendered in connection with the audit of our
consolidated financial statements, including quarterly reviews, statutory audits, and comfort letter in connection
with a securities offering.
(2)
The 2024 and 2023 audit-related fees were for professional services associated with other audit and attestation
services.
(3)
Tax fees for 2024 and 2023 were for professional services associated with tax compliance and tax consultation.
Pre-Approval Policies and Procedures for Audit and Permitted Non-Audit
Services
The Audit Committee requires that it preapprove all auditing services and permitted non-audit
services to be performed by its independent auditor, subject to the de minimis exceptions for
non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, which are approved
by the Audit Committee prior to the completion of the audit. Either the Chair of the Audit
Committee acting alone or the other two members acting jointly may grant preapprovals of
audit and permitted non-audit services, provided that decisions of such subcommittee to grant
preapprovals will be presented to the full Audit Committee or the Board at its next scheduled
meeting.
Consistent with these policies and procedures, the Audit Committee has approved all of the
services rendered by KPMG during fiscal year 2024, as described above.
|
|
45
|
Proposal 2—Ratification of Independent Registered Public Accountants For 2025 Fiscal Year
Audit Committee Report
The Audit Committee oversees the accounting and financial reporting processes of the Company
on behalf of the Board. The Company's leadership team has primary responsibility for the
Company’s financial statements, financial reporting process and internal controls over financial
reporting. The independent auditors are responsible for performing an independent audit of the
Company’s financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (“PCAOB”) and evaluating the effectiveness of
internal controls and issuing reports thereon. The Audit Committee’s responsibility is to select
the independent auditors and monitor and oversee the accounting and financial reporting
processes of the Company, including the Company’s internal controls over financial reporting
and the audits of the financial statements of the Company.
During 2024 and the first quarter of 2025, the Audit Committee regularly met and held
discussions with the Company's leadership team and the independent auditors. In the
discussions related to the Company’s financial statements for fiscal year 2024, the Company's
leadership team represented to the Audit Committee that such financial statements were
prepared in accordance with U.S. generally accepted accounting principles. The Audit
Committee reviewed and discussed with the Company's leadership team and the independent
auditors the audited financial statements for fiscal year 2024 and leadership’s evaluation of the
effectiveness of the design and operation of disclosure controls and procedures.
In fulfilling its responsibilities, the Audit Committee discussed with the independent auditors
those matters required to be discussed by the auditors with the Audit Committee under the
applicable rules adopted by the PCAOB and the SEC. In addition, the Audit Committee received
from the independent auditors the written disclosures and letter required by applicable
requirements of the PCAOB regarding the independent auditor’s communications with the Audit
Committee concerning independence, and the Audit Committee discussed with the independent
auditors that firm’s independence. In connection with this discussion, the Audit Committee also
considered also whether the provision of services by the independent auditors not related to the
audit of the Company’s financial statements for fiscal year 2024 was compatible with
maintaining the independent auditors’ independence. The Audit Committee’s policy requires
that the Audit Committee approve any audit or permitted non-audit service proposed to be
performed by its independent auditors in advance of the performance of such service.
Based upon the Audit Committee’s discussions with management and the independent auditors
and the Audit Committee’s review of the representations of the Company's leadership team and
the written disclosures and letter of the independent auditors provided to the Audit Committee,
the Audit Committee recommended to the Board that the audited financial statements for the
year ended December 31, 2024 be included in the Company’s Annual Report.
See the portion of this proxy statement titled “Sustainability and Corporate Governance—Audit
Committee” for information on the Audit Committee’s meetings in 2024.
The Audit Committee
Ian G.H. Ashken, Chair
Paula D. Loop
Carrie A. Wheeler
RECOMMENDATION OF THE BOARD OF DIRECTORS
|
✔
|
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “
FOR
”
THE RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS FOR THE 2025 FISCAL YEAR.
|
|
46
|
|
PROPOSAL 3—ADVISORY VOTE ON EXECUTIVE
COMPENSATION
Section 14A of the Exchange Act requires us to provide our shareholders with the opportunity to
approve, on a nonbinding, advisory basis, the compensation of our NEOs, often referred to as
“Say-on-Pay.”
At the 2024 Annual Meeting, approximately 98.5% of the votes cast supported our executive
compensation program. We believe that our executive compensation program continues to be
consistent with our core compensation principles and is structured to assure that those
principles are implemented. We encourage you to read the entire CDA to learn more about our
executive compensation program and the impact that our financial performance has on the
short-term and long-term incentive compensation earned by our executives in 2024. As
described in the CDA, our executive compensation philosophy and programs align executive
compensation decisions with our desired business direction, strategy and performance and to
attract and retain the key executives necessary to support the Company’s growth and success,
both operationally and strategically, and to motivate executives to achieve short- and long-term
goals with the ultimate objective of creating sustainable shareholder value.
The Board recommends that you vote for the compensation paid to our NEOs in 2024 and is
submitting to shareholders the following resolution for their consideration and approval at the
2025 Annual Meeting:
“RESOLVED, that, the compensation paid to the Company’s NEOs in 2024, as disclosed in this
proxy statement for our 2025 Annual Meeting pursuant to the compensation disclosure rules of
the SEC, including the Compensation Discussion and Analysis, the compensation tables and
related narrative disclosure, is hereby approved.”
Shareholders’ vote on this proposal is advisory, and therefore not binding on the Company, the
Compensation Committee or the Board. However, we value the opinions of our shareholders
and, accordingly, the Board and the Compensation Committee will consider the outcome of this
advisory vote in connection with future executive compensation decisions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
|
✔
|
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “
FOR
”
THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS IN
2024.
|
|
|
47
|
PROPOSAL 4—CHARTER AMENDMENT TO INCREASE
AUTHORIZED COMMON SHARES
Summary
On February 24, 2025, our Board approved an amendment to the Company’s Certificate of
Incorporation to increase our authorized common stock from 500,000,000 shares to
1,000,000,000 shares (the “Amendment”) to increase each of the total number of authorized
shares of capital stock and the number of authorized shares of common stock by 500,000,000
shares. By approving this Proposal, you are voting to increase our authorized capital stock to a
total number of 1,007,000,000 authorized shares of capital stock and 1,000,000,000 authorized
shares of common stock. The following discussion is qualified by the text of the Amendment,
which is set forth in Appendix B attached to this proxy statement.
The additional authorized shares of common stock to be authorized by the Amendment would
have rights identical to our current issued and outstanding shares of common stock. Issuance of
the additional shares of common stock would not affect the rights of the holders of our issued
and outstanding shares of common stock, except for effects incidental to any increase in the
number of shares of common stock issued and outstanding, such as dilution of earnings per
share and voting rights.
If the Amendment is approved by shareholders at the annual meeting, then it will become
effective upon filing of a certificate of amendment setting forth the Amendment with the
Delaware Secretary of State, which filing is expected to occur promptly following the annual
meeting. The Board reserves the right, notwithstanding shareholder approval and without
further action by shareholders, to abandon and elect not to proceed with the Amendment if the
Board determines that the Amendment is no longer in our best interests and the best interests
of our shareholders.
Capitalization
Our existing Certificate of Incorporation authorizes up to 507,000,000 shares of capital stock, of
which 500,000,000 shares are designated common stock, par value $0.0001 per share, and
7,000,000 shares are designated preferred stock, par value $0.0001 per share, of which
4,000,000 are designated as Series A preferred stock. As of March 21, 2025, we had 4,000,000
shares of Series A preferred stock issued and outstanding.
We estimate that on March 21, 2025, the following shares of common stock were issued,
outstanding or reserved for issuance:
|
Issued and outstanding:
|
276,220,967
|
|
Reserved for issuance under 2019 Equity Incentive Plan, 401K, and ESPP:
|
20,073,692
|
|
Reserved for issuance upon conversion of Series A preferred stock:
|
4,000,000
|
|
Shares of common stock remaining for future issuance:
|
199,705,341
|
|
% of authorized shares of common stock remaining for future issuance:
|
39.94
%
|
In consideration of the foregoing, our Board approved the Amendment in the form set forth in
Appendix B and has recommended that our shareholders do the same.
Reasons for the Amendment
We believe that the additional shares of authorized common stock are necessary to provide us
with appropriate flexibility to utilize equity for business and financial purposes that our Board
determines to be in our company’s best interests on a timely basis without the expense and
delay of a shareholders’ meeting. Our Board believes that the remaining authorized common
stock—which represents less than 40% of our total authorized common shares—is not sufficient
|
48
|
|
Proposal 4 - Charter Amendment to Increase Authorized Common Shares
to permit us to respond to potential business opportunities or to pursue important objectives
designed to enhance shareholder value.
The additional authorized shares of common stock will provide us with flexibility to use our
common stock, without further shareholder approval (except to the extent such approval may
be required by law or by applicable NYSE listing standards) for any proper corporate purposes,
including, without limitation, raising capital through one or more future public offerings or
private placements of equity securities, expanding our business or acquiring assets through
future transactions, entering into strategic relationships, providing equity-based compensation
and/or incentives to team members, officer or directors, effecting stock dividends or for other
general corporate purposes.
As a general matter, the Company would be able to issue the additional authorized shares of
Common Stock in the discretion of its Board from time to time and without further action or
approval of the Company's shareholders, subject to and as limited by, rules or listing
requirements of the NYSE. The discretion of the Board, however, would be subject to any other
applicable rules and regulations in the case of any particular issuance or reservation for
issuance that might require the Company’s shareholders to approve such transaction.
As of the date of this Proxy Statement, we have no immediate plans, proposals,
understandings, agreements or commitments to issue the additional shares of Common Stock,
other than the shares of Common Stock issuable upon conversion of the Series A Preferred
Stock. However, we have an effective shelf registration statement that would allow us to sell an
indeterminate amount of equity and debt securities, assuming we had a sufficient number of
authorized but unissued shares to issue in any such offering. Furthermore, we review and
evaluate potential capital raising activities, strategic transactions and other corporate actions on
an ongoing basis to determine if such actions would be in our best interest and the best interest
of our shareholders. The Board does not intend to issue any shares except on terms that it
considers to be in the best interests of the Company and its shareholders.
Possible Effects of the Amendment
The increase in authorized shares of our common stock will not have any immediate effect on
the rights of existing shareholders. Because the holders of our common stock do not have any
preemptive rights, future issuance of shares of common stock or securities exercisable for or
convertible into shares of common stock could have a dilutive effect on our earnings per share,
book value per share, voting rights of shareholders and could have a negative effect on the
price of our common stock.
We are not proposing the increase in the number of authorized shares of common stock with
the intent of using the additional shares to prevent or discourage any actual or threatened
takeover of our company. Under certain circumstances, however, the additional authorized
shares could be used in a manner that has anti-takeover effect. For example, the additional
shares could be used to dilute the stock ownership or voting rights of persons seeking to obtain
control of our company or could be issued to persons allied with the Board or management and
thereby have the effect of making it more difficult to remove directors or members of
management by diluting the stock ownership or voting rights of persons seeking to effect such
a removal. Accordingly, if the Amendment is approved by shareholders, the additional shares of
authorized common stock may render more difficult or discourage a merger, tender offer or
proxy contest, the assumption of control by a holder or group of holders of a large block of
common stock, or the replacement or removal of one or more directors or members of
management.
The following other provisions of our Certificate of Incorporation and Bylaws, in combination
with the additional authorized shares may also have an anti-takeover effect of preventing or
discouraging a change in control of our company: (i) ability of the Board to designate the terms
of and issue shares of preferred stock without further shareholder approval; (ii) prohibiting the
|
|
49
|
Proposal 4 - Charter Amendment to Increase Authorized Common Shares
ability of shareholders to act by written consent without a meeting; and (iii) the absence of
cumulative voting rights in the election of directors.
Our shareholders should recognize that, as a result of the Amendment, they will own a lower
percentage of shares with respect to our total authorized shares than they presently own. Our
shareholders should also recognize that their ownership of outstanding shares will be diluted if
the shares of of Common Stock authorized by the Amendment are issued by us in the future.
Vote Required for this Proposal
Approval of this Proposal requires that at the meeting, (1) the votes cast by holders of our
outstanding capital stock exceed the votes cast by such shareholders against this Proposal and
(2) the votes cast for this Proposal by the holders of our outstanding common stock exceed the
votes cast by such shareholders against this Proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
|
✔
|
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “
FOR
”
APPROVAL OF THE AMENDMENT TO OUR CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK.
|
|
50
|
|
OTHER MATTERS
Requirements, including Deadlines, for Submission of Proxy Proposals,
Nomination of Directors and Other Business of Shareholders
In order to submit shareholder proposals to be considered for inclusion in the Company’s proxy
statement, notice of annual meeting and proxy for our 2026 Annual Meeting of Shareholders
pursuant to SEC Rule 14a-8, materials must be received by the Corporate Secretary at the
Company’s principal office in New Brighton, MN, no later than December 5, 2025.
The proposals must comply with all of the requirements of SEC Rule 14a-8. Proposals should be
addressed to: Corporate Secretary, APi Group Corporation, 1100 Old Highway 8 NW, New
Brighton, Minnesota 55112, United States. As the rules of the SEC make clear, simply
submitting a proposal does not guarantee its inclusion.
The Company’s bylaws also establish an advance notice procedure with regard to director
nominations and shareholder proposals that are not submitted for inclusion in the Company’s
proxy statement, but that a shareholder instead wishes to present directly at an annual
meeting. To be properly brought before our 2026 Annual Meeting of Shareholders, a notice of
the director nomination or the matter the shareholder wishes to present at the meeting
complying with the Company’s bylaws must be delivered to the Corporate Secretary at the
Company’s principal office in New Brighton, MN (see above), not less than 90 or more than 120
days prior to the first anniversary of the date of the 2025 Annual Meeting, except that if the
2026 Annual Meeting of Shareholders is more than 30 days before or more than 70 days after
such anniversary date, such notice must be delivered not earlier than 120 days prior to such
anniversary date or the 10
th
day following our public announcement of the date of the 2026
Annual Meeting of Shareholders. As a result, and assuming that the 2026 Annual Meeting of
Shareholders is not more than 30 days before or more than 70 days after the first anniversary
of the date of the 2025 Annual Meeting, any notice given by or on behalf of a shareholder
pursuant to these provisions of the Company’s bylaws (and not pursuant to Exchange Act Rule
14a-8) must be delivered no earlier than January 16, 2026, and no later than February 15,
2026. All director nominations and shareholder proposals must comply with the requirements of
the Company’s bylaws, a copy of which may be obtained at no cost from the Corporate
Secretary of the Company.
Shareholders providing notice to the Company under the SEC’s Rule 14a-19 who intend to
solicit proxies in support of nominees submitted under the advance notice provision of the
Company’s bylaws for the 2026 Annual Meeting of Shareholders must comply with the advance
notice deadline set forth above, the requirements of the Company’s bylaws and the additional
requirements of Rule 14a-19(b).
Other than the items of business described in this proxy statement, the Company does not
expect any matters to be presented for a vote at the 2025 Annual Meeting. If you grant a
proxy, the persons named as proxy holders on the proxy card or voting instruction form will
have the discretion to vote your shares on any additional matters properly presented for a vote
at the 2025 Annual Meeting. If, for any unforeseen reason, any one or more of the Company’s
nominees is not available as a candidate for director, the persons named as proxy holders will
vote your proxy for such other candidate or candidates as may be nominated by the Board.
Our Board or the chair of the Annual Meeting may refuse to allow the transaction of any
business or the consideration of any director nomination not made in compliance with the
Company’s bylaws.
List of Shareholders Entitled to Vote at the 2025 Annual Meeting
The names of shareholders of record entitled to vote at the 2025 Annual Meeting will be
|
|
51
|
Other Matters
available at the Company’s principal office in New Brighton, MN, for a period of ten (10) days
prior to the 2025 Annual Meeting and continuing through the 2025 Annual Meeting. The list will
also be made available during the 2025 Annual Meeting.
Expenses Relating to this Proxy Solicitation
This proxy solicitation is being made by the Company, and we will pay all expenses relating to
this proxy solicitation. In addition to this solicitation, our officers, directors and team members
may solicit proxies by telephone, personal call or electronic transmission without extra
compensation for that activity. We also expect to reimburse our transfer agent, banks, brokers
and other persons for reasonable out-of-pocket expenses in forwarding proxy materials to
beneficial owners of our common stock and obtaining the proxies of those owners. We have
engaged Morrow Sodali LLC (“Morrow Sodali”) as our proxy solicitor at an anticipated cost of
approximate
ly $12,000
plus reasonable out-of-pocket expenses and fees for optional services.
This estimate is subject to the final solicitation campaign approved by us and Morrow Sodali.
Communication with Our Board of Directors
Any shareholder or other interested party who desires to contact any member of the Board (or
our Board as a group) may do so in writing to the following address:
Co-Chairs of the Board
APi Group Corporation
c/o Corporate Secretary
1100 Old Highway 8 NW
New Brighton, MN 55112
United States
Communications are distributed to the Board, or to any individual directors as appropriate,
depending on the facts and circumstances outlined in the communication.
Householding
Some brokers, banks or other intermediaries may be participating in the practice of
“householding” our proxy materials. Under this procedure, which has been approved by the
SEC, shareholders who have the same address and last name will receive only one copy of our
Notice of Internet Availability of Proxy Materials (the “Notice”) or proxy statement and annual
report, as applicable, unless contrary instructions have been received from the affected
shareholders. This procedure will reduce our printing costs and postage fees. We do not
household for our shareholders of record.
Once you have received notice from your broker, bank or other intermediary that it will be
householding materials to your address, householding will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate copy of our Notice or proxy statement and
annual report, as applicable, or if you are receiving multiple copies of any of these documents
and wish to receive only one, please notify your broker, bank or other intermediary.
We will deliver promptly upon written or oral request a separate copy of our Notice, proxy
statement and/or annual report to a shareholder at a shared address to which a single copy was
delivered. For copies of any of these documents, shareholders should contact us using the
contact information set forth below under “Available Information.”
Available Information
We will deliver without charge to each person whose proxy is being solicited, upon request of
any such person, a copy of the Notice, this proxy statement and our Annual Report. A request
|
52
|
|
Other Matters
for a copy of any of these documents should be directed to APi Group Corporation, 1100 Old
Highway 8 NW, New Brighton, MN 55112, Attention: Secretary, Telephone: (651) 636-4320.
In addition, copies of the charters of each of the Audit Committee, Compensation Committee
and Nominating and Corporate Governance Committee, together with certain other corporate
governance materials, including our Business Conduct and Ethics Policy and Code of Ethics for
Senior Financial Officers, can be found under the Investor Relations—Corporate Governance
section of our website at www.apigroup.com and such information is also available in print to
any shareholder who requests it through the methods listed above.
|
|
53
|
QUESTIONS AND ANSWERS ABOUT VOTING AT THE
2025 ANNUAL MEETING AND RELATED MATTERS
|
Q:
|
Who can attend the 2025 Annual Meeting?
|
||
|
A:
|
Shareholders of record as of the Record Date (March 21, 2025), beneficial owners with
control numbers or legal proxies obtained from the shareholders of record as of the
Record Date, and guests may attend the 2025 Annual Meeting virtually. See the Notice
of 2025 Annual Meeting for additional information on how to gain access to the 2025
Annual Meeting.
If your shares are registered directly in your name with our transfer agent,
Computershare, you are a “registered holder,” which means you are the shareholder of
record with respect to those shares.
If your shares are held by a bank or broker, the bank or broker is the shareholder of
record. You are the “beneficial owner” (and hold your shares in “street name”) and the
bank or broker is your “nominee.”
If you hold shares as a participant in the (1) APi Group, Inc. Employee Stock
Ownership Plan (“ESOP”), (2) APi Group 401(k) Profit Sharing Plan, (3) APi Group
Safe Harbor 401(k) Profit Sharing Plan, and/or (4) the Vipond Inc. Employees’ Profit
Sharing Plan (collectively, “employee benefit plans”), the plan trustee of the applicable
plan is the shareholder of record and your nominee.
|
||
|
Q:
|
Who may vote at the 2025 Annual Meeting?
|
||
|
A:
|
You are receiving this proxy statement, the accompanying proxy card or voting
instruction form and our annual report to shareholders because you own shares of
common stock or shares of Series A Preferred Stock, (the “Series A Preferred Stock”)
of APi Group Corporation that entitle you to vote at the 2025 Annual Meeting.
If you are a participant in an employee benefit plan, you may vote in advance of the
2025 Annual Meeting (as described below under “How do I Vote?”) and, if you do, your
vote will be counted at that meeting; however, except as otherwise described below,
you will not be able to vote
at
the 2025 Annual Meeting.
With that exception, anyone owning shares of common stock or Series A Preferred
Stock at the close of business on the Record Date may vote electronically at the 2025
Annual Meeting. You may cast at or prior to the 2025 Annual Meeting (1) one vote for
each share of common stock held by you on the Record Date and (2) one vote for each
share of Series A Preferred Stock held by you on the Record Date, on all items of
business presented in this proxy statement and at the 2025 Annual Meeting. Each
share of Series A Preferred Stock will entitle the holder thereof to vote together with
the holders of common stock as a single class. As of the close of business on the
Record Date, we had (a) 276,220,967 shares of common stock issued and outstanding,
and (b) 4,000,000 shares of Series A Preferred Stock issued and outstanding. Each
share of common stock and Series A Preferred Stock is entitled to one vote per share.
|
||
|
54
|
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q:
|
How do I vote?
|
||
|
A:
|
Registered Holder
: If you are a registered holder, there are four ways to vote:
•
Via the Internet
. You may vote by proxy via the Internet by following the
instructions provided on the proxy card or voting instruction form mailed to you.
•
By Telephone.
You may vote by proxy by calling the toll-free number found on the
proxy card or voting instruction form.
•
By Mail.
You may vote by proxy by filling out the proxy card or voting instruction
form and returning it in the envelope provided.
•
During the Meeting.
You must attend the 2025 Annual Meeting virtually as a
shareholder to vote during the meeting. Please see the information below for how to
attend the 2025 Annual Meeting. If you attend the 2025 Annual Meeting as a
shareholder, you can follow the online instructions to vote your shares during the
meeting.
Beneficial Owners
: If you are a beneficial owner of shares held in “street name,” a
proxy card or voting instruction form has been forwarded to you by your broker or
other nominee. You have the right to direct your broker or other nominee on how to
vote your shares by following the instructions on the proxy card or voting instruction
form, which generally provides four ways to vote:
•
Via the Internet.
You may vote by proxy via the Internet by visiting
www.proxyvote.com and entering the control number found on the proxy card or
voting instruction form provided by your broker or other nominee. The availability of
Internet voting may depend on the voting process of your broker or other nominee.
•
By Mail.
You may vote by proxy by filling out the proxy card or voting instruction
form provided by your broker or other nominee and returning it in the envelope
provided.
•
By Telephone.
You may vote by proxy by calling the toll-free number found on the
proxy card or voting instruction form.
•
During the Annual Meeting.
To vote your shares during the 2025 Annual Meeting,
you must follow the instructions provided by your broker or other nominee and
attend the meeting as a shareholder. Please see “How can I attend the 2025 Annual
Meeting” below for information on how to attend the meeting as a shareholder to
vote your shares during the meeting.
If you attend the 2025 Annual Meeting as a guest, you will not be able to vote your
shares during the meeting.
If you vote over the Internet or by telephone, you do not need to return your
proxy card or voting instruction form. Internet and telephone voting for
shareholders will be available 24 hours a day, and will close at 10:59 p.m.,
Central Time, on May 15, 2025. Even if you plan to attend the 2025 Annual
Meeting virtually, the Company recommends that you vote your shares in
advance as described above so that your vote will be counted if you later
decide not to attend the 2025 Annual Meeting.
|
||
|
|
55
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q:
|
How do I vote? (Continued)
|
||
|
A:
|
Participants in the employee benefit plans
:
•
Shares Held in Your Account under the ESOP.
If you are a participant or
beneficiary with an account in the ESOP, you are entitled to direct the ESOP’s
trustee as to how any shares that have been allocated to your ESOP account and
that remained in your ESOP account as of the Record Date should be voted at the
2025 Annual Meeting.
•
Shares Held in Your Account under the APi Group 401(k) Profit Sharing
Plan, the APi Group Safe Harbor 401(k) Profit Sharing Plan or the Vipond
Inc. Employees’ Profit Sharing Plan
. If you are a participant or beneficiary with
an account in one or more of (1) the APi Group 401(k) Profit Sharing Plan, (2) the
APi Group Safe Harbor 401(k) Profit Sharing Plan and/or (3) the Vipond Inc.
Employees’ Profit Sharing Plan, you will be permitted to direct the applicable plan
trustee(s) or other intermediary as to how any shares held in your plan account as
of the Record Date should be voted at the 2025 Annual Meeting.
You have the right to direct your nominee(s) or other intermediary on how to vote your
shares by following the instructions on the proxy card or voting instruction form
forwarded to you by your nominee(s), which generally provides three ways to vote:
•
Via the Internet
. You may vote by proxy via the Internet by visiting
www.proxyvote.com and entering the control number found on the proxy card or
voting instruction form provided by your nominee. The availability of Internet voting
may depend on the voting process of your nominee.
•
By Telephone
. You may vote by proxy by calling the toll-free number found on the
proxy card or voting instruction form.
•
By Mail
. You may vote by proxy by filling out the proxy card or voting instruction
form provided by your nominee and returning it in the envelope provided.
Earlier Voting Deadlines for Participants in Certain Employee Benefit Plans
.
Because the ESOP’s trustee and the other employee benefits plans’ trustee(s) or other
intermediary will vote on your behalf, and in accordance with your directions, except as
noted below, you will not be able to vote during the 2025 Annual Meeting and must
vote by following deadlines:
•
Votes of shares held in an ESOP account must be made by
10:59 p.m. (Central
Time) on May 7, 2025
.
•
Votes of shares held in a APi Group 401(k) Profit Sharing Plan or APi Group Safe
Harbor 401(k) Profit Sharing Plan account must be made by
10:59 p.m. (Central
Time) on May 13, 2025.
•
Votes of shares held in a Vipond Inc. Employees’ Profit Sharing Plan account must
be made by
10:59 p.m. (Central Time) on May 15, 2025
in order to vote prior to
the 2025 Annual Meeting, or you may vote during the meeting. See “How can I
attend the 2025 Annual Meeting” below for information on how to attend the
meeting as a shareholder to vote your shares during the meeting.
|
||
|
56
|
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q.
|
How can I attend the 2025 Annual Meeting?
|
||
|
A.
|
The 2025 Annual Meeting will be held in a virtual-only format via live webcast. No
physical meeting will be held.
To access the 2025 Annual Meeting, please visit www.virtualshareholdermeeting.com/
APG2025. You may begin logging into the 2025 Annual Meeting on the day of the
meeting at 8:15 a.m., Central Time, 15 minutes in advance of the start of the meeting.
We encourage you to access the meeting prior to the start time and allow ample time
for the check-in procedures.
You may log in using one of two options: (1) join as a guest or (2) join as a
shareholder. To join as a guest, you will need to enter the information requested on
the screen to register as a guest. If you enter the meeting as a guest, you will not be
able to vote your shares or submit questions during the meeting.
If you were a registered holder or a beneficial owner as of the Record Date, you may
join the 2025 Annual Meeting as a shareholder by entering the 16-digit control number
found on the proxy card or voting instruction form previously received in connection
with the 2025 Annual Meeting. If you are a beneficial owner as of the Record Date and
you do not have a 16-digit control number, you should contact your bank, broker or
other nominee (preferably at least 5 days before the meeting) and obtain a “legal
proxy” in order to be able to attend and participate in the meeting. You must join the
meeting as a shareholder to vote your shares or submit questions during the meeting.
If you were a participant in an employee benefit plan and you have a control number,
you may join the 2025 Annual Meeting as a shareholder using that control number.
Otherwise, you may join the meeting as a guest.
|
||
|
Q.
|
What if I need technical assistance accessing the virtual-only meeting?
|
||
|
A.
|
The virtual meeting platform is fully supported across browsers (Microsoft Edge,
Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones)
running the most updated version of applicable software and plugins. Beginning 15
minutes prior to the meeting start, technicians will be available to assist you with any
technical difficulties you may have accessing the virtual meeting webcast. If you
encounter any difficulties accessing the webcast, please call the technical support
number that will be posted on the annual meeting website log-in page located at
www.virtualshareholdermeeting.com/APG2025.
|
||
|
Q.
|
How do I ask questions at the 2025 Annual Meeting?
|
||
|
A.
|
Shareholders will have the ability to submit questions during the 2025 Annual Meeting
via the meeting website at www.virtualshareholdermeeting.com/APG2025 by following
the instructions available on the meeting page. Questions relevant to 2025 Annual
Meeting matters will be answered during the meeting, subject to time constraints. To
ensure that as many shareholders as possible are able to ask questions during the
2025 Annual Meeting, each shareholder will be permitted no more than two questions.
Questions from multiple shareholders on the same topic or that are otherwise related
may be grouped, summarized and answered together. If you join the meeting as a
guest, you will not be able to ask questions.
Responses to questions relevant to 2025 Annual Meeting matters that are not
answered during the meeting will be posted on the Company’s Investor Relations
webpage.
|
||
|
|
57
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q.
|
How do I obtain electronic access to the proxy materials?
|
||
|
A.
|
This proxy statement and our Annual Report are available to shareholders free of
charge at http://materials.proxyvote.com/00187Y.
If you are a beneficial owner or a participant in an employee benefit plan, you may be
able to elect to receive future annual reports or proxy statements by email. For
information regarding electronic delivery of proxy materials for shares held in “street
name” or in an employee benefit plan, you should contact your broker or other
nominee.
|
||
|
Q.
|
What constitutes a quorum, and why is a quorum required?
|
||
|
A.
|
State law requires that we have a quorum of shareholders present in person or by
proxy for all items of business to be voted at the 2025 Annual Meeting. The presence
at the 2025 Annual Meeting, in person or by proxy, of the holders of a majority in
voting power of the shares of common stock and Series A Preferred Stock issued and
outstanding and entitled to vote on the Record Date will constitute a quorum,
permitting us to conduct the business of the 2025 Annual Meeting. Proxies received but
marked as abstentions, if any, and broker non-votes (described below) will be included
in the calculation of the number of shares considered to be present at the 2025 Annual
Meeting for quorum purposes. If we do not have a quorum, then the person presiding
over the 2025 Annual Meeting or the shareholders present at the 2025 Annual Meeting
may, by a majority in voting power thereof, adjourn the meeting from time to time, as
authorized by our bylaws, until a quorum is present.
|
||
|
Q.
|
What am I voting on?
|
||
|
A.
|
Those entitled to vote are asked to vote on the following three proposals. Our Board’s
recommendation for each of these proposals is set forth below:
|
||
|
Proposal
|
Board
Recommendation
|
||
|
1.
To elect nine directors for a one-year term expiring at the
2026 Annual Meeting of Shareholders
|
FOR each Director
Nominee
|
||
|
2. To ratify the appointment of KPMG LLP ("KPMG") as our
independent registered public accounting firm for the 2025
fiscal year.
|
FOR
|
||
|
3. To approve, on an advisory basis, the compensation of our
NEOs
|
FOR
|
||
|
4. To approve the amendment of our certificate of
incorporation to increase the number of authorized shares
of common stock.
|
FOR
|
||
|
We will also consider other proposals that properly come before the 2025 Annual
Meeting in accordance with our bylaws.
|
|||
|
58
|
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q.
|
Is my vote confidential?
|
||
|
A.
|
Yes. We encourage shareholder participation in corporate governance by ensuring the
confidentiality of shareholder votes. We have designated Broadridge Financial
Solutions, Inc. as inspector to receive and tabulate shareholder votes. Your vote on
any particular proposal will be kept confidential and will not be disclosed to us or any of
our officers or employees except (1) where disclosure is required by applicable law, (2)
where disclosure of your vote is expressly requested by you or (3) where we conclude
in good faith that a bona fide dispute exists as to the authenticity of one or more
proxies, ballots or votes, or as to the accuracy of any tabulation of such proxies, ballots
or votes. Aggregate vote totals will be disclosed to us from time to time and publicly
announced following the 2025 Annual Meeting.
|
||
|
Q.
|
What happens if additional matters are presented at the 2025 Annual
Meeting?
|
||
|
A.
|
Our bylaws provide that items of business may be brought before the 2025 Annual
Meeting only (1) pursuant to the Notice of 2025 Annual Meeting (or any supplement
thereto) included in this proxy statement, (2) by or at the direction of the Board, or (3)
by a shareholder of the Company who was a shareholder at the time proper notice of
such business is delivered to our Corporate Secretary, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in our bylaws. Other
than the three items of business described in this proxy statement, we are not aware
of any other business to be acted upon at the 2025 Annual Meeting as of the date of
this proxy statement. If you grant a proxy, the persons named as proxy holders,
Russell A. Becker, G. David Jackola and Louis B. Lambert, will have the discretion to
vote your shares on any additional matters properly presented for a vote at the 2025
Annual Meeting in accordance with Delaware law and our bylaws.
|
||
|
Q.
|
How many votes are needed to approve each proposal?
|
||
|
A.
|
The table below sets forth, for each proposal described in this proxy statement, the
vote required for approval of the proposal, assuming a quorum is present:
|
||
|
Proposal
|
Vote Required
|
||
|
1.
To elect nine directors for a one-year term expiring at the
2026 Annual Meeting of Shareholders
|
The majority of votes
cast
|
||
|
2. To ratify the appointment of KPMG LLP ("KPMG") as our
independent registered public accounting firm for the 2025
fiscal year.
|
The majority of votes
cast
|
||
|
3. To approve, on an advisory basis, the compensation of our
NEOs
|
The majority of votes
cast
|
||
|
4. To approve the amendment of our certificate of
incorporation to increase the number of authorized shares
of common stock.
|
The majority of votes
cast
|
||
|
|
59
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q.
|
What if I am a registered holder and I return my proxy without making any
selections?
|
||
|
A.
|
If you are a registered holder and sign and return your proxy card or voting instruction
form without making any selections, your shares will be voted “FOR” all director
nominees and “FOR” proposals 2 and 3. If other matters properly come before the
2025 Annual Meeting, Russell A. Becker, G. David Jackola and Louis B. Lambert will
have the authority to vote on those matters for you at their discretion. As of the date
of this proxy statement, we are not aware of any matters that will come before the
2025 Annual Meeting other than those disclosed in this proxy statement.
|
||
|
Q.
|
What if I am a beneficial owner and I do not give the broker or other nominee
voting instructions?
|
||
|
A.
|
If you are a beneficial owner and your shares are held in the name of a broker or other
nominee, such nominee is bound by the rules of the NYSE regarding whether or not it
can exercise discretionary voting power for any particular proposal if the broker has
not received voting instructions from you. Brokers have the authority to vote shares for
which their customers do not provide voting instructions on certain “routine” matters. A
broker non-vote occurs when a broker or other nominee who holds shares for another
does not vote on a particular item because the nominee does not have discretionary
voting authority for that item and has not received voting instructions from the
beneficial owner of the shares. Broker non-votes are included in the calculation of the
number of votes considered to be present at the 2025 Annual Meeting for purposes of
determining the presence of a quorum but are not considered a vote cast.
The table below sets forth, for each proposal described in this proxy statement,
whether a broker can exercise discretion and vote your shares absent your instructions
and if not, the impact of such broker non-vote on the approval of the applicable
proposal
|
||
|
Proposal
|
Can Brokers
Vote Absent
Instructions?
|
Impact of
Broker
Non-Vote
|
|
|
1.
To elect nine directors for a one-year term expiring at the
2026 Annual Meeting of Shareholders
|
No
|
None
|
|
|
2. To ratify the appointment of KPMG LLP ("KPMG") as our
independent registered public accounting firm for the 2025
fiscal year.
|
Yes
|
Not
Applicable
|
|
|
3. To approve, on an advisory basis, the compensation of our
NEOs
|
No
|
None
|
|
|
4. To approve the amendment of our certificate of
incorporation to increase the number of authorized shares
of common stock.
|
No
|
None
|
|
|
60
|
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q.
|
What if I am a participant in an employee benefit plan and I do not give the
nominee voting instructions?
|
||
|
A.
|
If you are a participant in an employee benefit plan and you do not provide voting
instructions (or your instructions are incomplete or unclear) as to one or more of the
matters to be voted on, the unvoted shares in your account will be treated as follows:
•
The ESOP. The ESOP’s trustee will vote shares in your account with respect to each
applicable proposal in the same proportion for which the trustee received timely,
complete and clear voting instructions.
•
The APi Group 401(k) Profit Sharing Plan and APi Group Safe Harbor 401(k)
Profit Sharing Plan. The trustee will vote shares in your account with respect to each
applicable proposal in the same proportion for which the trustee received timely,
complete and clear voting instructions.
•
The Vipond Inc. Employees’ Profit Sharing Plan. The intermediary will vote only those
shares for which it received timely, complete and clear voting instructions. The
intermediary will not vote unvoted shares in your account.
|
||
|
Q.
|
What if I abstain on a proposal?
|
||
|
A.
|
If you sign and return your proxy card or voting instruction form marked “Abstain” on
any proposal, your shares will not be voted on that proposal. Marking “Abstain” with
respect to any of the proposals described in this proxy statement will not have any
impact on the approval of the applicable proposal.
|
||
|
Q.
|
Can I change my vote or revoke my proxy after I have delivered my proxy
card or voting instruction form?
|
||
|
A.
|
Yes.
If you are a registered holder, you may change your vote or revoke your proxy by (1)
voting in person at the 2025 Annual Meeting, (2) delivering to the Corporate Secretary
(at the address indicated below) a revocation of proxy or (3) executing a new proxy
bearing a later date.
Corporate Secretary
APi Group Corporation
1100 Old Highway 8 NW
New Brighton, MN 55112
United States
If you are a beneficial owner, you must follow the instructions provided by your broker
or other nominee to change your vote or revoke your proxy.
If you are a participant in an employee benefit plan, you may change your vote or
revoke your proxy by executing a new proxy bearing a later date, prior to the voting
cutoff date for the applicable plan.
|
||
|
Q.
|
If I am a registered holder or a beneficial owner and I plan to attend the 2025
Annual Meeting, should I still vote by proxy?
|
||
|
A.
|
Yes. Casting your vote in advance does not affect your right to attend the 2025 Annual
Meeting.
If you vote in advance and also attend the 2025 Annual Meeting, you do not need to
vote again at the 2025 Annual Meeting unless you want to change your vote. Please
see the information above under “How do I vote?” for information on how to vote.
|
||
|
Q.
|
Am I entitled to dissenter’s rights?
|
||
|
A.
|
No. Delaware General Corporation Law does not provide for dissenter’s rights in
connection with the matters being voted on at the 2025 Annual Meeting.
|
||
|
|
61
|
Questions and Answers About Voting at the 2025 Annual Meeting and Related Matters
|
Q.
|
Where can I find voting results of the 2025 Annual Meeting?
|
||
|
A.
|
We will announce the voting results for the proposals at the 2025 Annual Meeting and
publish final detailed voting results in a Form 8-K filed with the SEC within four
business days after the 2025 Annual Meeting.
|
||
|
Q.
|
Who should I call with other questions?
|
||
|
A.
|
If you have any questions about this proxy statement or the 2025 Annual Meeting, or
need assistance voting your shares, please contact our proxy solicitor, Morrow Sodali
LLC at 1-800-662-5200.
|
||
|
|
A-1
|
||||
Appendix A
APi Group Corporation
Reconciliations of GAAP to Non-GAAP Financial Measures
EBITDA and adjusted EBITDA (non-GAAP)
(Amounts in millions)
(Unaudited)
The Company supplements the reporting of its consolidated financial information with certain
financial measures including adjusted EBITDA, a non-GAAP financial measure, which is defined
as earnings before interest, taxes, depreciation and amortization, excluding the impact of
certain non-cash and other specifically identified items, and including corporate costs and
eliminations. Adjusted EBITDA margin is calculated as adjusted EBITDA divided by net
revenues. The Company believes these measures provide meaningful information and help
investors understand the Company’s financial results and assess its prospects for future
performance. The Company uses adjusted EBITDA to evaluate its performance, both internally
and as compared with its peers, because these measures exclude certain items that may not be
indicative of the Company’s core operating results.
|
For the Year Ended December 31,
|
||||||||
|
2024
|
2023
|
2022
|
||||||
|
Net income (as reported)
|
$
250
|
$
153
|
$
73
|
|||||
|
Adjustments to reconcile net income to EBITDA:
|
||||||||
|
Interest expense, net
|
146
|
145
|
125
|
|||||
|
Income tax provision
|
80
|
79
|
20
|
|||||
|
Depreciation and amortization
|
302
|
303
|
304
|
|||||
|
EBITDA
|
$
778
|
$
680
|
$
522
|
|||||
|
Adjustments to reconcile EBITDA to adjusted EBITDA:
|
||||||||
|
Contingent consideration and compensation
|
(a)
|
3
|
14
|
9
|
||||
|
Non-service pension expense (benefit)
|
(b)
|
22
|
(12)
|
(42)
|
||||
|
Inventory step-up
|
(c)
|
—
|
—
|
9
|
||||
|
Business process transformation expenses
|
(d)
|
52
|
30
|
31
|
||||
|
Acquisition related expenses
|
(e)
|
13
|
7
|
121
|
||||
|
Loss on extinguishment of debt, net
|
(f)
|
1
|
7
|
(5)
|
||||
|
Restructuring program related costs
|
(g)
|
32
|
46
|
30
|
||||
|
Other
|
(h)
|
(8)
|
10
|
(2)
|
||||
|
Adjusted EBITDA
|
$
893
|
$
782
|
$
673
|
|||||
|
Net revenues
|
$
7,018
|
$
6,928
|
$
6,558
|
|||||
|
Adjusted EBITDA as a % of net revenues
|
12.7%
|
11.3%
|
10.3%
|
|||||
|
2022-2024 PSU Reconciliation
|
||||||||
|
Adjusted EBITDA
|
$
893
|
$
782
|
$
673
|
|||||
|
Constant Currency Adjustment
|
(i)
|
25
|
23
|
21
|
||||
|
2022-2024 PSU Adjusted EBITDA
|
$
918
|
$
805
|
$
694
|
|
|
A-2
|
||||
Appendix A
|
2024 Short-Term Incentive Reconciliation
|
||||
|
Adjusted EBITDA
|
$
893
|
|||
|
Acquisition Divestiture Adjustment
|
(j)
|
$
(24)
|
||
|
Constant Currency Adjustment
|
(k)
|
3
|
||
|
2024 Incentive Adjusted EBITDA
|
$
872
|
Notes:
(a)
Adjustment to reflect the elimination of the expense attributable to deferred consideration to prior owners of
acquired businesses not expected to continue or recur.
(b)
Adjustment to reflect the elimination of non-service pension expense (benefit), which consists of interest cost,
expected return on plan assets and amortization of actuarial gains/losses of the pension programs assumed as part
of the Chubb acquisition.
(c)
Adjustment to reflect the elimination of costs related to the fair value step-up of acquired inventory.
(d)
Adjustment to reflect the elimination of expenses associated with the integration and reorganization of newly
acquired businesses and non-operational costs related to business process transformation, including system and
process development costs and implementation of processes and compliance programs related to the Sarbanes-
Oxley Act of 2002.
(e)
Adjustment to reflect the elimination of transaction costs related to potential and completed acquisitions and
expenses associated with the transition of newly acquired businesses from prior ownership into APi Group.
(f)
Adjustment to reflect the elimination of (gain) loss on extinguishment of debt resulting from early repayments and
repurchases of long-term debt.
(g)
Adjustment to reflect the elimination of expenses associated with restructuring programs and related costs.
(h)
Adjustment includes various miscellaneous non-recurring items, such as eliminations of changes in fair value
estimates to acquired liabilities and impairment recorded on assets held-for-sale.
(i)
Adjustment to exclude the impacts of fluctuations in foreign currency translation over the three-year performance
period. When the Compensation Committee established the 2022-2024 PSU program design it was decided that for
purposes of determining PSU results the adjusted EBITDA should be calculated at constant currency to show
financial results without giving effect to currency fluctuations. This constant currency adjustment was calculated
utilizing year-end results translated into US dollars at the 2022 management exchange rates.
(j)
Adjustment for significant acquisitions and divestitures during the year, which was pre-approved as an adjustment
by the Compensation Committee.
(k)
Adjustment to exclude the impact of fluctuations in foreign currency translation for the year. When the
Compensation Committee established the 2024 STI program design it was decided that for purposes of determining
STI results the adjusted EBITDA should be calculated at constant currency to show financial results without giving
effect to currency fluctuations. This constant currency adjustment was calculated utilizing year-end results
translated into US dollars at the 2024 management exchange rates.
|
|
A-3
|
||||
Appendix B
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
API GROUP CORPORATION
APi Group Corporation, a Delaware corporation (the “Corporation”), does hereby certify
that:
FIRST: The certificate of incorporation of the Corporation is hereby amended by deleting
Article FOURTH, Part A, Section 1 in its entirety and inserting the following in lieu thereof:
“
Capital Stock
. The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is One Billion Seven Million (1,007,000,000)
shares, divided into: (i) One Billion (1,000,000,000) shares, par value $0.0001 per
share, of common stock (the “
Common Stock
”); and (ii) Seven Million (7,000,000)
shares, par value $0.0001 per share, of preferred stock (the “
Preferred Stock
”), of
which Four Million (4,000,000) shares are designated as “
Series A Preferred
Stock
” (the “
Series A Preferred Stock
”).”
SECOND: The amendment set forth in this Certificate of Amendment was duly adopted
in accordance with Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF,
the Corporation has caused this Certificate of Amendment to
be signed by its duly authorized officer on ________ __, 2025.
By:
Name: Louis Lambert
Title: Senior Vice President, General
Counsel and Secretary
TABLE OF CONTENTS
Proxy SummaryAnnual MeetingVoting Matters and Board RecommendationsHow to VoteBoard of DirectorsWho We AreFinancial HighlightsCorporate GovernanceOverviewBoard Composition and DiversityBoard Leadership StructureDirector IndependenceBoard Role in Risk OversightShareholder EngagementCode of Business Conduct and EthicsMeetingsBoard CommitteesAudit CommitteeCompensation CommitteeNominating and Corporate Governance CommitteeAnti-Hedging PolicyCommunications with the BoardCertain Relationships and Related Party TransactionsDirector CompensationProposal 1Election of DirectorsCompensation Discussion AnalysisCompensation StrategyFinancial HighlightsPay for PerformanceCompensation Governance PracticesExecutive Compensation Setting ProcessComponents of the Executive Compensation Program2024 Compensation DecisionsOther Compensation-Related Practices and PoliciesExecutive CompensationSummary Compensation TableGrants of Plan-Based Awards During 2024Outstanding Equity Awards at 2024 Year EndStock Vested During 2024Potential Payments Upon Termination or Change in ControlCEO Pay RatioPay Versus Performance