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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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5
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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1
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Amount Previously Paid:
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2
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Form, Schedule or Registration Statement No.:
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Filing Party:
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4
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Date Filed:
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SEC 1913 (02-02)
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Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
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David C. Dauch
Chairman of the Board and
Chief Executive Officer
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The Board of Directors strengthened the governance of our sustainability program by assigning oversight responsibility to the Nominating/Corporate Governance Committee.
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In March 2020, we published our 2019 Sustainability Report – a comprehensive report that discloses for the first time our Top 10 Sustainability Topics and our goals to reduce energy use, greenhouse gas (GHG) emissions and water consumption across our global operations by the end of 2024.
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We publicly disclosed our CDP energy, GHG and water assessments to our investors for the first time in response to shareholder feedback.
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We received a Sustainability award from Ford Motor Company.
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We were named Supplier of the Year by General Motors for the third consecutive year and received a Gold Supplier Diversity award from GM.
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Samuel Valenti III
Lead Independent Director
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Board Governance. The Board's leadership structure and governance practices support independent views, robust deliberations and effective decision-making. The role of the Lead Independent Director, along with regular private sessions of independent directors, candid self-evaluation of Board and committee effectiveness, and the 9-1 ratio of independent directors, provides the necessary balance with the combined Chairman/CEO role. The Board believes that this leadership structure provides effective and independent oversight of the Company.
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Board Diversity. AAM's Board has made diversity a priority through recent Board refreshment and by adopting a policy of inclusion of diverse candidates in the Board selection process. Shareholders have expressed approval of the representation of women on our Board.
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Executive Compensation. The Board was pleased with the favorable outcome of the vote on our say-on-pay proposal in 2019 (96%), which we believe reflects the Board's ongoing responsiveness to shareholder. Shareholders have expressed support of the overall design of AAM's executive compensation program and generally defer to boards and compensation committees in the selection of incentive plan metrics that are aligned with business objectives. Our Compensation Committee continues to align the metrics and rigor of our incentive compensation programs to drive achievement of our business strategy.
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Sustainability. The Board holds itself and senior leadership accountable for sustainability performance and reporting. AAM's sustainability program has become more transparent and visible to our shareholders, customers, suppliers, associates and other stakeholders. This transparency is reflected in AAM's 2019 Sustainability Report, which is available at aam.com/sustainability.
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Notice of Annual Meeting
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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Meeting Information
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Voting Information
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Time and Date
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8:00 a.m., local time, on Thursday, May 7, 2020
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Please vote your shares as soon as possible, even if you plan to attend the annual meeting.
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Attend in Person
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AAM World Headquarters Auditorium
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Your broker will
not
be able to vote your shares on the election of directors and most of the other matters presented at the meeting unless you give your broker specific instructions to do so. We strongly encourage you to vote.
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One Dauch Drive
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Detroit, MI 48211
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Record Date
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March 12, 2020
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You may vote via the internet, by telephone, or by mail.
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You may vote if you owned shares on the record date.
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See "Voting and Meeting Information" beginning on page 69 of this proxy statement for more information.
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Annual Meeting Agenda / Items of Business
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1. Election of three members of the Board of Directors to serve until the Annual Meeting of Stockholders in 2023
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2. Advisory vote on named executive officer compensation
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3. Ratification of the appointment of Deloitte & Touche LLP as independent public accounting firm for 2020
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4. Other business properly presented at the meeting
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Attending in Person*
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You do not need to attend the annual meeting to vote if you submit your proxy in advance.
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To attend the annual meeting you will need to:
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- provide proof of your stock ownership as of the record date
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- provide government-issued photo identification (such as a driver's license) prior to entering the meeting
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Doors open at 7:30 a.m.
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Meeting starts at 8:00 a.m.
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Important Notice Regarding the Availability of Proxy Materials for the May 7, 2020 Stockholder Meeting: Our 2020 proxy statement and 2019 annual report and Form 10-K are available free of charge at
www.envisionreports.com/axl
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Proxy Summary
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Ratification of Independent Registered Public Accounting Firm
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Proxy Summary
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Proposal 3 - Ratification of Independent Registered Public Accounting Firm
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Policy for Pre-Approval of Audit and Non-Audit Services
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Election of Directors
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Independent Registered Public Accounting Firm's Fees
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Proposal 1 - Election of Directors
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Report of the Audit Committee
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Corporate Governance
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Compensation of Directors
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Additional Information
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Beneficial Stock Ownership
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Voting and Meeting Information
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Related Person Transactions Policy
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Annual Report
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Electronic Delivery of Proxy Materials
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2021 Stockholder Proposals and Nominations
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Advisory Vote on Executive Compensation
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Cost of Solicitation
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Proposal 2 - Advisory Vote on Executive Compensation
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Compensation Discussion and Analysis
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Named Executive Officers
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Appendix
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Executive Summary
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Appendix A - Non-GAAP Reconciliation
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Compensation of Executive Officers
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Direct Compensation Elements
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Indirect Compensation Elements
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Other Compensation Matters
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Compensation Committee Report
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Executive Compensation Tables
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CEO Pay Ratio
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2020 AAM Proxy Statement |
1
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Proxy Summary
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Your Vote is Important
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Voting Matters and Board Recommendations:
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Votes Required
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Board Vote Recommendation
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More Information
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Proposal 1
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Election of three members of the Board of Directors to serve until the Annual Meeting of Stockholders in 2023
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Majority of votes cast
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FOR each nominee
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Page 13
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Each nominee brings a strong and diverse background and set of skills to the Board and has demonstrated sound judgment and integrity.
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Proposal 2
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Advisory vote on named executive officer compensation
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Majority of votes cast
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FOR
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Page 31
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AAM's executive compensation program is market-based, performance driven and aligns with shareholder interests.
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Proposal 3
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Ratification of the appointment of Deloitte & Touche LLP as independent public accounting firm for the year ending December 31, 2020
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Majority of votes cast
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FOR
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Page 66
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All independence standards have been met and sound practices are employed to ensure independent financial governance.
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By Internet
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By Telephone
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By Mail
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In Person
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Go to
www.envisionreports.com/axl
and follow the instructions. You will need the control number on your proxy card or voter instruction form.
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Call the number shown on your proxy card or voter instruction form. You will need the control number on your proxy card or voting instruction form.
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Complete, sign and date the proxy card or voting instruction form and return it in the envelope provided.
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Attend the annual meeting and cast your ballot.
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2020 AAM Proxy Statement |
2
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Proxy Summary
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Governance Highlights
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Independence
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Tenure
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Age
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Diversity
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89%
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8
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64
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33%
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Independent
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Average
Years of Service
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Average
Age
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Women or Minority
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2020 AAM Proxy Statement |
3
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Proxy Summary
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Business & Financial Highlights
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2020 AAM Proxy Statement |
4
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Proxy Summary
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2019 AAM Highlights
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Delivered on our
key strategic objectives
of profitable growth, diversification, solid financial performance and technology leadership
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Completed 50 global product and program launches
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Continued strong free cash flow generation and debt reduction
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Completed sale of U.S. iron casting business
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Celebrated 25 years of world-class quality, technology leadership and operational excellence
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3rd e-Drive Unit new business award – AAM’s first in
China market
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Received 3rd Supplier of the Year Award and Gold Diversity Award from GM
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Published 1st Sustainability Review in 2019 and Sustainability Report in March 2020
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Received Sustainability Award from Ford Motor Company
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2020 AAM Proxy Statement |
5
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Proxy Summary
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Shareholder Engagement
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Why we engage
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Provide transparency into our business strategy, corporate governance practices and executive compensation programs
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Determine which issues are important to our shareholders and communicate each others' views on those topics
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Identify emerging issues that may impact our business and influence our practices
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How we engage
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Investor Communication Program
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We provide institutional investors with many opportunities to give feedback to senior management by participating in conferences, one-on-one and group meetings, investor visits to our manufacturing facilities and technical centers, and day-to-day interactions with individual investors throughout the year.
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Proactive Shareholder Outreach Program
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As part of our annual shareholder outreach program, we also engage with shareholders in conference calls or meetings outside the proxy season. Our CFO and Director of Investor Relations lead these exchanges, which often include a member of our Board. Topics include our executive compensation program, risk management, sustainability, strategic planning and corporate governance practices. Soliciting shareholder feedback is a key component of this program, which we do at least annually. As appropriate, we also engage with shareholders during proxy season.
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Board Involvement
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During our 2019 - 2020 outreach activities, our Compensation Committee Chair, CFO and Investor Relations Director participated in outreach meetings. Our CFO conveys shareholders' feedback to the full Board and the Compensation Committee or Nominating/Corporate Governance Committee, depending on the subject of the feedback. The Board also receives feedback we obtain from proxy advisory firms, such as ISS and Glass Lewis, as part of our outreach program.
The Board gives management feedback on key aspects of AAM's investor relations communication plan and shareholder outreach program.
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2020 AAM Proxy Statement |
6
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Proxy Summary
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Shareholder Engagement Topics
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þ
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Sustainability program
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þ
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Incentive compensation metrics and goal rigor
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þ
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Board diversity
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Selection process for Board candidates
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þ
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Board evaluation process
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Board oversight of risk
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þ
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Board refreshment
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Separation of Chairman and CEO roles
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þ
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Shareholder rights
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þ
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Classified Board
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–
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We strengthened the governance of our sustainability program by assigning oversight responsibility to the Nominating/Corporate Governance Committee of the Board.
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In March 2020, we published our 2019 Sustainability Report – a comprehensive report that discloses for the first time our Top 10 Sustainability Priority Topics and goals to reduce energy use, greenhouse gas emissions and water consumption across our global operations by the end of 2024.
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We publicly disclosed our CDP energy, greenhouse gas and water assessments for our investors for the first time.
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The Board adopted a policy that requires director searches to include women and minorities in the initial group of qualified candidates for every open Board seat.
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The Compensation Committee continued to align the metrics and rigor of our incentive compensation plans to drive achievement of our business strategy.
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2020 AAM Proxy Statement |
7
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Proxy Summary
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Sustainability Program
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AAM's sustainability program is managed within a well-defined governance structure, through clearly-established ownership and responsibilities at multiple levels in the organization.
Our corporate Policy Committee, which is led by the CEO and includes AAM's top leaders, established a Sustainability Steering Committee (SSC) to provide direction and leadership to achieve our sustainability objectives. Membership of the SSC and the key areas of responsibility are described below.
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Michael K. Simonte
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Terri M. Kemp
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David E. Barnes
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President
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Vice President - Human Resources
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Vice President & General Counsel
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Responsible for the development of strategies, action plans, goals and performance, as well as external reporting of environmental, energy and safety goals
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Responsible for social responsibility, such as promoting our people-first culture with diversity and inclusion initiatives, associate training, education and wellness programs, and support of universal human rights
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Serves as Chief Compliance Officer and is responsible for ESG compliance and corporate governance, including reporting to our Board of Directors and relevant committees on sustainability matters
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2020 AAM Proxy Statement |
8
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Proxy Summary
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Energy and Emissions Reduction
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Associate Health, Safety and Wellness
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Ethical Business Practices and Training
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Investment in Technology
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Reduce Water Use at Every Location
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Attract, Develop, Engage and Retain Diverse Talent
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Cascade and Verify Supplier Compliance
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Product Quality and Safety
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Reduce, Reuse, Recycle Industrial Materials
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Partner with Global Communications
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2020 AAM Proxy Statement |
9
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Proxy Summary
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Compensation Highlights
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Supports Business Strategy
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Market Competitive
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Aligned with
Shareholder Interests
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86% of CEO compensation is variable and at risk
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Rigorous performance goals as key drivers of enterprise value creation such as EBITDA, relative TSR and cash flow.
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Programs utilize metrics that emphasize company performance and are aligned with business strategy
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Attract and retain executive talent
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Benchmark pay against a peer group of similarly sized companies
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Target direct compensation at the 50
th
percentile
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Ensure incentive plans reward for desired behaviors and pay outcomes align with results
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Mix of annual and long-term incentive programs balances focus between short-term results and long-term share appreciation
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60% threshold of performance-based LTI
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Cap on payout of performance shares based on relative TSR if absolute TSR is negative
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CEO stock ownership requirement of 6 times base salary
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AAM's 2019 say-on-pay proposal received a favorable vote of 96% of votes cast. This result reflects our ongoing engagement with our shareholders and the Board's continued responsiveness to their feedback.
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The Compensation Committee changed our comparative peer group for benchmarking executive compensation to more closely reflect the size and complexity of our business, industry and competition for talent. Our competitor peer group, which is used to measure relative TSR, was adjusted to reflect changes in our competitors and to increase the number of companies in this group.
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For 2019, the Compensation Committee determined that total direct compensation for the CEO, Chief Financial Officer and President remain unchanged from 2018.
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We continued to set rigorous annual and long-term incentive compensation targets for awards granted in 2019 to drive management performance at the highest levels.
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The 2019 long-term incentive (LTI) awards were 66% performance-based in order to continue to drive superior performance that is aligned with our business strategy. One-half of the 2019 performance-based award is based on relative TSR and one-half is based on free cash flow performance.
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2020 AAM Proxy Statement |
10
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Proxy Summary
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Strategic Business Objective
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Alignment
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Incentive Metric
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Continue to strengthen the balance sheet; provide funding for organic growth, research and development, and other capital priorities
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Free Cash Flow
- 2019 LTI Performance Units
(50% metric of performance-based LTI)
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Develop innovative technology, including electrification and reinvest in research and development
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Relative TSR
-
2019 LTI Performance Shares (50% metric of performance-based LTI)
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Create sustainable value for shareholders
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Achieve profitable growth, along with the ability to be flexible as the market changes, and reduce leverage
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EBITDA
- 2019 Annual Incentive Program
(100% metric)
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Right-size operations to achieve productivity improvements
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2020 AAM Proxy Statement |
11
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Proxy Summary
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–
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Target performance was set at a level higher than 2018 actual adjusted EBITDA performance.
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Achievement of target performance would result in the highest adjusted EBITDA performance in AAM history.
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Target performance is higher than the performance of a majority of our peer group companies.
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Free cash flow target performance for 2019 - 2021 was set at a level higher than the previous three years' performance.
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Achievement of target performance would result in the highest free cash flow in AAM history.
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Relative TSR payout is capped if absolute TSR is negative.
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2020 AAM Proxy Statement |
12
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Election of Directors
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Proposal 1: Election of Directors
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þ
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The Board unanimously recommends a vote FOR each of the nominees.
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Election of Directors
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James A. McCaslin
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Retired President & Chief Operating Officer, Harley-Davidson Motor Co.
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Past Positions
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Key Qualifications and Experience
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Positions at Harley-Davidson (Retired 2010):
President & Chief Operating Officer
2001 - 2009
Various senior executive positions
1992 - 2001
Other Manufacturing Company Positions:
Manufacturing and Engineering executive
JI Case (agricultural equipment)
1989 - 1992
Manufacturing and Quality executive
Chrysler Corporation
Volkswagen of America
General Motors Corporation
1966 - 1989
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Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. McCaslin should serve on AAM's Board: his leadership experience as President & COO of Harley-Davidson Motor Company; the breadth of his manufacturing and engineering experience at global manufacturing companies; and his subject matter knowledge in the areas of engineering, innovation and technology, manufacturing and risk management.
|
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Age:
71
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Director Since:
2011
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Previous Public Company Directorship
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Committees:
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Maytag Corporation
2003 - 2006
|
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Compensation (Chair)
|
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Nominating/Corp Gov
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|
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Technology
|
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Executive
|
Election of Directors
|
William P. Miller II CFA
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Chief Financial Officer, Saudi Arabian Investment Company
|
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Current and Past Positions
|
Key Qualifications and Experience
|
|
Chief Financial Officer
Saudi Arabian Investment Company
since September 2019
Head of Asset Allocation
Saudi Arabian Investment Company October 2013 - September 2019
Senior Managing Director &
Chief Financial Officer
Financial Markets International, Inc.
2011 - 2013
Deputy Chief Investment Officer
Ohio Public Employees Retirement System
2005 - 2011
Senior Risk Manager
Abu Dhabi Investment Authority
2003 - 2005
Independent Risk Oversight Officer and Chief Compliance Officer
Commonfund Group 1996 - 2002
|
Based on his professional background and prior AAM Board and Audit Committee experience, the following qualifications led the Board to conclude that Mr. Miller should serve on AAM's Board: his leadership qualities developed from his experience as Head of Asset Allocation and Chief Financial Officer for the Saudi Arabian Investment Company and as an officer with oversight responsibilities for investments, risk and compliance since 1996; the breadth of his experience in serving on the boards of the Chicago Mercantile Exchange and the Dubai Mercantile Exchange; and his subject matter knowledge in the areas of finance, investments, audit and accounting, innovation and technology, regulatory matters and risk management.
|
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Age:
64
|
|||
Director Since:
2005
|
Advisory Boards (Previous)
|
||
Committees:
|
–
Public Company Accounting Oversight Board Standing Advisory Group
–
Group Golub
Capital Institutional Investor Advisory Board
|
||
Audit (Chair)
|
Previous Directorships
|
||
Technology
|
Chicago Mercantile Exchange 2003 - 2017
Dubai Mercantile Exchange 2011 - 2017
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Sandra E. Pierce
|
Senior Executive Vice President, Huntington Bank
|
||
|
|
|
|
|
Current and Past Positions
|
Key Qualifications and Experience
|
|
Chair, Huntington Bank Michigan and Sr. Vice President, Private Client Group & Regional Banking Director since August 2016
Vice Chair, First Merit Corporation and Chair and Chief Executive Officer, First Merit Michigan (acquired by Huntington Bank) 2013 - 2016
President and Chief Executive Officer, Charter One, Midwest Regional Executive (RBS Citizens, N.A.) 2005 - 2012
Various banking and executive positions with increasing responsibility with JPMorgan Chase, Michigan (successor to Bank One, First Chicago NBD and NBD Bank, N.A.) 1978 - 2005
|
Based on her professional background and public company board experience, the following qualifications led the Board to conclude that Ms. Pierce should serve on AAM’s Board: her leadership experience as Senior Executive Vice President - Private Client Group & Regional Banking Director, and Chair of Huntington Bank Michigan, and as chief executive officer of FirstMerit Michigan and Charter One; the breadth of her corporate marketing and community development experience in her professional, civic and charitable endeavors; and her subject matter knowledge in the areas of strategic planning, finance, public relations, business development, compensation/benefits and risk management.
|
||
Current Directorships (non-profit)
|
|||
–
Federal Reserve Bank of Chicago, Detroit Branch
–
Business Leaders for Michigan, Vice-Chair
–
Detroit Economic Club
–
Detroit Regional Chamber
–
Detroit Riverfront Conservancy
–
Henry Ford Health System, Chair
–
United Way (Southeast Michigan)
|
|||
Age:
61
|
Other Public Company Directorship
|
||
Director Since:
2018
|
Penske Automotive Group since 2012
|
||
Committees:
|
Private Company Directorships
|
||
Audit
|
Barton Malow Company
since January 2013
ITC Holding Corp (subsidiary of Fortis, Inc.)
since January 2017
|
||
Compensation
|
|||
|
|
Election of Directors
|
David C. Dauch
|
Chairman of the Board & Chief Executive Officer, AAM
|
||
|
|
|
|
|
Current and Past Positions at AAM
|
Key Qualifications and Experience
|
|
Chairman of the Board
since August 2013
Chief Executive Officer
since September 2012
President & Chief Executive Officer
September 2012 - August 2015
President & Chief Operating Officer
2008 - 2012
Various positions of increasing responsibility
1995 - 2008
|
Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Dauch should serve on AAM's Board: his leadership experience as an officer of AAM since 1998; the breadth of his management experience within, and knowledge of, AAM's global operations; and his subject matter knowledge in the areas of innovation and technology, manufacturing, strategic planning and risk management.
|
||
Age:
55
|
Other Company Directorship
|
Current Directorships (non-profit)
and Leadership Roles
|
|
Director Since:
|
Amerisure Companies since 2014
|
||
2013 (Chairman)
|
Previous Directorship
|
–
Business Leaders for Michigan
–
Detroit Economic Club
–
Detroit Regional Chamber
–
Great Lakes Council Boy Scouts of America
–
Boys & Girls Club of Southeastern Michigan
–
National Association of Manufacturers (NAM)
–
Original Equipment Suppliers Association (OESA)
–
Miami University Business Advisory Council
–
General Motors Supplier Council
–
FCA NAFTA Supplier Advisory Council
|
|
2009
|
Horizon Global Corporation
2015 - 2018
|
||
Committees:
|
|||
Executive (Chairman)
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
Election of Directors
|
William L. Kozyra
|
President & Chief Executive Officer, TI Fluid Systems plc
|
||
|
|
|
|
|
Current and Past Positions
|
Key Qualifications and Experience
|
|
President & Chief Executive Officer
TI Fluid Systems plc (TI Automotive) (fluid storage, carrying and delivery systems) since 2008
President & Chief Executive Officer
Continental AG North America
1998 - 2008
Member of Executive Board
Continental AG (DAX)
2006 - 2008
Vice President & General Manager
Brake Products Division of
Bosch Braking Systems
1995 - 1997
|
Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Kozyra should serve on AAM's Board: his leadership experience as an officer of TI Automotive since 2008; the breadth of his international experience with global companies in the automotive industry; and his subject matter knowledge in the areas of engineering, OEMs, manufacturing, innovation and technology, strategic planning and risk management.
|
||
Age:
62
|
Other Public Company Directorship
|
Current Directorships (non-profit)
and Leadership Roles
|
|
Director Since:
2015
|
|||
Committees:
|
TI Fluid Systems plc (TI Automotive)
since 2008
|
–
General Motors Supplier Council
–
Ford Motor Company Top 100 Supplier Forum
–
Notre Dame Preparatory School
–
Automotive Hall of Fame
–
Boy Scouts of America, Detroit
–
University of Detroit Alumni Council
–
Society of Automotive Engineers
|
|
Compensation
|
|||
Nominating/Corp Gov
|
|||
Technology
|
|||
|
|
||
|
|||
|
Peter D. Lyons
|
Partner, Freshfields Bruckhaus Deringer US
LLP
|
||
|
|
|
|
|
Current Position
|
Key Qualifications and Experience
|
|
Partner
Freshfields Bruckhaus Deringer US LLP
New York, NY
since September 2014
|
Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Lyons should serve on AAM's Board: his experience as an attorney of a major law firm since 1979; the breadth of his experience in advising global businesses on complex legal matters and transactions; and his subject matter knowledge in the areas of corporate governance, mergers and acquisitions, international business and risk management.
|
||
Age:
64
|
|
|
|
Director Since:
2015
|
|
||
Committees:
|
|
||
Compensation
|
|
||
Nominating/Corp Gov
|
|
Election of Directors
|
Elizabeth A. Chappell
|
Director, Special Projects - North American International Auto Show
|
||
|
|
|
|
|
Current and Past Positions
|
Key Qualifications and Experience
|
|
Executive Chairwoman (co-founder)
RediMinds, Inc. (data strategy, engineering and innovation firm) since December 2017
President & Chief Executive Officer
Detroit Economic Club
2002 - 2017
Executive Vice President, Corporate Communications & Investor Relations
Compuware Corporation
1997 - 2001
President & Chief Executive Officer
of a consulting firm she founded
1995 - 2000
Various executive positions with increasing responsibility with AT&T for 16 years
|
Based on her professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Ms. Chappell should serve on AAM's Board: her leadership experience as President & CEO of the Detroit Economic Club; the breadth of her community outreach and corporate citizenship experience in her professional, civic and charitable endeavors; and her subject matter knowledge in the areas of investor relations, marketing and communications, business development and risk management.
|
||
Current Directorships (non-profit)
|
|||
Age:
62
|
Previous Directorships
|
–
Detroit Economic Club
–
Detroit Regional Chamber
–
Detroit Zoo
–
Michigan Israel Business Accelerator (MIBA)
–
Michigan State University Capital Campaign
–
International Women's Forum
|
|
Director Since:
2004
|
Handleman Company
1999 - 2009
Compuware Corporation
1997 - 2002
|
||
Committees:
|
|||
Nominating/Corp Gov
|
|||
(Chair)
|
|||
Technology
|
Herbert K. Parker
|
Retired Executive Vice President, Harman International Industries
|
||
|
|
|
|
|
Past Positions
|
Key Qualifications and Experience
|
|
Positions at Harman International Industries, Inc.:
Executive Vice President, Operational Excellence
2015 - 2017
Executive Vice President and Chief Financial Officer
2008 - 2014
Positions at ABB, Inc. and related ABB companies:
Chief Financial Officer, North America
2006 - 2008
Chief Financial Officer, Automation Technologies Division
2002 - 2005
Various finance positions of increasing responsibility throughout Asia, Europe and North America 1980 - 2002
|
Based on his professional background and public company board and audit committee experience, the following qualifications led the Board to conclude that Mr. Parker should serve on AAM’s Board: his leadership and financial experience as the Chief Financial Officer of Harman International Industries, Inc. and of ABB; his responsibilities for mergers and acquisitions, information technology, internal audit and tax; the breadth of his management experience over global operating activities, capital allocation structures and developing and implementing strategic plans; and his subject matter knowledge in the areas of finance, investments, audit and accounting, strategic planning and risk management.
|
||
Current Directorship (non-profit)
|
|||
–
Stamford, Connecticut YMCA
|
|||
Age:
62
|
Other Public Company Directorships
|
||
Director Since:
2018
|
TriMas Corporation since March 2017
Apogee Enterprises, Inc. since May 2018
nVent Enterprises Plc. since May 2018
|
||
Committees:
|
|||
Audit
|
|||
Nominating/Corp Gov
|
|
Election of Directors
|
John F. Smith
|
Principal, Eagle Advisors LLC
|
||
|
|
|
|
|
Current and Past Positions
|
Key Qualifications and Experience
|
|
Principal, Eagle Advisors LLC (strategy development and performance improvement consulting) since 2011
Positions at General Motors:
Group Vice President, Corporate Planning and Alliances (most recent position)
2000 - 2010
General Manager, Cadillac Motor Car
1997 - 1999
President, Allison Transmission
1994 - 1996
Vice President, Planning; International Operations, Zurich Switzerland
1989 - 1993
|
Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Smith should serve on AAM's Board: his leadership experience in the automotive industry; the breadth of his management experience with General Motors international operations; and his subject matter knowledge in the areas of manufacturing, finance, innovation and technology, strategic planning and risk management.
|
||
Current Directorship (non-profit)
|
|||
–
Boy Scouts of America National Advisory Board
|
|||
Age:
69
|
Other Public Company Directorships
|
||
Director Since:
2011
|
TI Fluid Systems plc (TI Automotive)
since October 2017
|
||
Committees:
|
|||
Audit
|
Previous Directorships
|
||
Technology (Chair)
|
CEVA Logistics, AG 2013 - April 2019
Covisint Corporation 2016 - 2017
Arnold Magnetics 2015 - 2016
Plasan Carbon Composites 2013 - 2014
Smith Electric Vehicles Corp. 2012 - 2014
|
||
|
|||
|
|||
|
|||
|
Corporate Governance
|
Independence
|
|
Accountability
|
–
All directors are independent except our CEO
–
Lead Independent Director
–
Committees comprised of only independent directors (except Executive Committee)
–
Independent directors meet regularly in executive session without management present
|
|
–
Proactive shareholder engagement program
–
Proxy access by-laws
–
Majority vote for directors In uncontested elections,
–
Annual Board and committee evaluations
–
Commitment to Board refreshment
|
Sound Practices
|
|
Risk Management
|
–
In 2019, the Board adopted a policy to include women and minority candidates in the selection process for every open seat
–
In 2019, the Board assigned oversight responsibility for AAM's sustainability program to the Nominating/ Corporate Governance Committee
–
Director orientation and education
–
Stock ownership requirements for directors and executive officers
–
Hedging or pledging AAM stock is prohibited
|
|
–
Active Board oversight of AAM's overall risk management structure
–
Individual Board committees oversee risks related to their areas of responsibility
–
AAM has robust risk management processes throughout the company
–
The Board and its committees receive regular updates from management on top enterprise risks, and the steps management has taken or will take to mitigate these risks
|
Why we engage
|
||
|
|
|
Provide transparency into our business strategy, corporate governance practices and executive compensation programs
|
Determine which issues are important to our shareholders and communicate each others' views on those topics
|
Identify emerging issues that may impact our business and influence our practices
|
How we engage
|
||
|
|
|
Investor Communication Program
|
|
We provide institutional investors with many opportunities to give feedback to senior management by participating in conferences, one-on-one and group meetings, investor visits to our manufacturing facilities and technical centers, and day-to-day interactions with individual investors throughout the year.
|
|
|
|
Proactive Shareholder Outreach Program
|
|
As part of our annual shareholder outreach program, we also engage with shareholders in conference calls or meetings outside the proxy season. Our CFO and Director of Investor Relations lead these exchanges, which often include a member of our Board. Topics include our executive compensation program, risk management, sustainability, strategic planning and corporate governance practices. Soliciting shareholder feedback is a key component of this program, which we do at least annually. As appropriate, we also engage with shareholders during proxy season.
|
|
|
|
Board Involvement
|
|
During our 2019 - 2020 outreach activities, our Compensation Committee Chair, CFO and Investor Relations Director participated in outreach meetings. Our CFO conveys shareholders' feedback to the full Board and the Compensation Committee or Nominating/Corporate Governance Committee, depending on the subject of the feedback. The Board also receives feedback we obtain from proxy advisory firms, such as ISS and Glass Lewis, as part of our outreach program.
The Board gives management feedback on key aspects of AAM's investor relations communication plan and shareholder outreach program.
|
–
|
preside at executive sessions of independent directors;
|
–
|
call special executive sessions of independent directors, as appropriate;
|
–
|
serve as liaison between the independent directors and the Chairman & CEO;
|
–
|
inform the Chairman & CEO of issues arising from executive sessions of the independent directors; and
|
–
|
with Board approval, retain outside advisors who report to the full Board on matters of interest to the Board.
|
Audit Committee
|
|
|
|
2019 Meetings: 4
Members
:
William P. Miller II
(Chair) *
Herbert K. Parker*
Sandra E. Pierce
John F. Smith*
Samuel Valenti III
|
–
Oversees the independent auditors' qualifications, independence and performance
|
–
Oversees the quality and integrity of our financial statements
|
|
–
Oversees the performance of our internal audit function
|
|
–
Discusses with management the Company's risk assessment and risk management framework
|
|
–
Approves audit and non-audit services provided by the independent auditors
|
|
–
Oversees the Company's hedging and derivatives practices
|
|
*Financial Expert
|
–
Provides oversight of the Company's ethics and compliance programs
|
|
–
Oversees our cyber security risk management program and receives quarterly reports by our Chief Information Officer
|
|
|
Compensation Committee
|
|
|
|
2019 Meetings: 5
Members
:
James A. McCaslin
(Chair)
William L. Kozyra
Peter D. Lyons
Sandra E. Pierce
Samuel Valenti III
|
–
Recommends the CEO's compensation to the Board and determines the compensation of other executive officers
|
–
Recommends incentive compensation and equity-based plans to the Board
|
|
–
Approves executive officer compensation to ensure that it is designed to drive achievement of AAM's strategy and objectives while considering competitive market practices and shareholder interests
|
|
–
Recommends non-employee director compensation to the Board
|
|
–
Oversees management's risk assessment of the Company's policies and practices regarding compensation of executive officers and other associates
|
|
|
–
Evaluates and approves corporate goals and objectives for executive officer compensation and evaluates performance in light of these criteria
|
|
–
Oversees the preparation of the Compensation Discussion and Analysis (CD&A) and produces a Committee report for inclusion in our annual proxy statement
|
|
|
Nominating/Corporate Governance Committee
|
|
|
|
2019 Meetings: 4
Members
:
Elizabeth A. Chappell
(Chair)
William L. Kozyra
Peter D. Lyons
James A. McCaslin
Herbert K. Parker
Samuel Valenti III
|
–
Identifies qualified individuals to serve on the Board and committees
|
–
Reviews our Corporate Governance Guidelines and Code of Business Conduct and recommends changes as appropriate
|
|
–
Oversees succession planning for executive officers and other key executive positions and supports the Board's succession/contingency planning process for the CEO
|
|
–
Oversees evaluation of the Board and its committees
|
|
–
Reviews committee charters and recommends any changes to the Board
|
|
–
Oversees our sustainability program policies, strategies and performance and reviews sustainability/corporate responsibility matters with management
|
|
|
|
Technology Committee
|
|
|
|
2019 Meetings: 4
Members
:
John F. Smith
(Chair)
Elizabeth A. Chappell
William L. Kozyra
James A. McCaslin
William P. Miller II
|
–
Advises the Board and management on the Company's strategy for innovation and technology
|
–
Maintains awareness of market demands for technology advancements relative to product, processes and systems
|
|
–
Oversees and advises management regarding product, process and systems technologies
|
|
–
Reviews technology opportunities as potential ways to increase productivity, efficiency, quality and warranty performance and to support the Company's goals and objectives
|
|
|
–
Conducts strategy discussions with the full Board
|
|
|
Executive Committee
|
|
|
|
2019 Meetings: 1
Members
:
David C. Dauch
(Chair)
James A. McCaslin
Samuel Valenti III
|
–
Acts on matters requiring Board action between meetings of the full Board
|
–
Has authority to act on certain significant matters, limited by our by-laws
|
|
–
All members other than Mr. Dauch are independent
|
|
|
|
|
Responsible
Party
|
Primary Areas of Risk Oversight
|
|
|
|
|
Full Board
|
|
Oversees overall risk management function and regularly receives reports from the chairs of individual Board committees on risk-related matters falling within each committee's oversight responsibilities. Also receives reports from management on particular risks facing the Company, including through the review of AAM's strategic plan.
|
|
|
|
Audit Committee
|
|
Monitors financial, operational, and compliance risks by regularly reviewing reports and presentations given by management, Internal Audit, Company advisors and the independent auditors.
Regularly reviews risk management practices and risk-related policies (for example, AAM's risk management process and cyber security strategy) and evaluates potential risks related to internal controls over financial reporting.
Oversees cyber security risk management and risk controls. Receives quarterly reports from our Chief Information Officer on AAM's cyber security program, including AAM's monitoring, auditing, implementation and communication processes, controls and procedures.
Monitors financial risks, including capital structure and liquidity risks, and reviews the policies and strategies for managing financial exposure and contingent liabilities.
|
|
|
|
Compensation Committee
|
|
Monitors potential risks related to the design and administration of our compensation plans, policies and programs, including our performance-based compensation programs, to promote appropriate incentives that do not encourage executive officers to take unnecessary and/or excessive risks.
|
|
|
|
Nominating / Corporate Governance Committee
|
|
Monitors potential risks related to our governance practices by, among other things, reviewing succession plans and performance evaluations of the Board and CEO and monitoring legal developments and trends regarding corporate governance practices.
|
|
|
|
Technology Committee
|
|
Monitors risks associated with the Company's product portfolio and our innovation and technology plans.
|
–
|
high ethical character and shared values with AAM;
|
–
|
high-level leadership experience and achievement at a policy-making level in business, educational or professional activities;
|
–
|
breadth of knowledge of issues affecting AAM;
|
–
|
special competencies, such as financial, technical, international business or other expertise, or industry knowledge;
|
–
|
awareness of a director's vital role in AAM's good corporate citizenship and corporate image; and
|
–
|
sufficient time and availability to effectively carry out a director's duties.
|
|
|
|
|
Independence
|
Tenure
|
Age
|
Diversity
|
89%
|
8
|
64
|
33%
|
Independent
|
Average
Years of Service
|
Average
Age
|
Women or Minority
|
–
|
Corporate Governance Guidelines
|
–
|
Code of Ethics for the CEO, CFO and other Senior Financial Executives (Code of Ethics)
|
–
|
Charters of our Board Committees
|
–
|
Code of Business Conduct
|
Compensation of Directors
|
Compensation of Directors
|
–
|
recognize the significant investment of time and expertise required of directors;
|
–
|
align the directors' interests with the long-term interests of our shareholders; and
|
–
|
ensure that the compensation of directors is well received by our shareholders.
|
Annual retainer
|
$
|
110,000
|
|
Committee chair annual retainer:
|
|
||
Audit Committee chair
|
20,000
|
|
|
Compensation Committee chair
|
15,000
|
|
|
Other committee chair
|
10,000
|
|
|
Lead director annual retainer
|
30,000
|
|
Compensation of Directors
|
Name
|
Fees Earned or
Paid in Cash
(1)
($)
|
|
Stock Awards
(2)
($)
|
|
All Other Compensation
(3)
($)
|
|
Total
($)
|
|
Elizabeth A. Chappell
|
120,000
|
|
125,003
|
|
500
|
|
245,503
|
|
William L. Kozyra
|
110,000
|
|
125,003
|
|
4,000
|
|
239,003
|
|
Peter D. Lyons
|
110,000
|
|
125,003
|
|
600
|
|
235,603
|
|
James A. McCaslin
|
125,000
|
|
125,003
|
|
400
|
|
250,403
|
|
William P. Miller II
|
130,000
|
|
125,003
|
|
500
|
|
255,503
|
|
Herbert K. Parker
|
110,000
|
|
125,003
|
|
2,200
|
|
237,203
|
|
Sandra E. Pierce
|
110,000
|
|
125,003
|
|
600
|
|
235,603
|
|
John F. Smith
|
120,000
|
|
125,003
|
|
500
|
|
245,503
|
|
Samuel Valenti III
|
140,000
|
|
125,003
|
|
1,200
|
|
266,203
|
|
(1)
|
Fees earned in 2019 for annual and committee chair retainers.
|
(2)
|
Reflects the full grant date fair value of RSUs granted on May 2, 2019 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined by applying the assumptions used in our financial statements. The grant date fair value of equity awards was calculated using the closing market price of AAM common stock on the grant date ($14.35). See Note 10 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2019 for assumptions underlying the valuation of equity awards.
|
(3)
|
The Company reimburses non-employee directors for travel and related out-of-pocket expenses in connection with attending Board, committee and stockholder meetings. From time to time, the Company invites spouses of non-employee directors to attend Company events associated with these meetings. The Company pays for spousal travel and certain other expenses and reimburses non-employee directors for taxes attributable to the income associated with this benefit. Amounts reflect reimbursement of taxes on this income.
|
Name
|
Restricted Stock
Units Outstanding
(#)
|
|
Elizabeth A. Chappell
|
68,868
|
|
William L. Kozyra
|
32,284
|
|
Peter D. Lyons
|
36,296
|
|
James A. McCaslin
|
57,768
|
|
William P. Miller II
|
72,118
|
|
Herbert K. Parker
|
8,711
|
|
Sandra E. Pierce
|
8,711
|
|
John F. Smith
|
57,768
|
|
Samuel Valenti III
|
41,755
|
|
|
Beneficial Stock Ownership
|
Beneficial Stock Ownership
|
–
|
each person known to us who beneficially owns more than 5% of AAM common stock;
|
–
|
each of our non-employee directors as of March 12, 2020;
|
–
|
each of the named executive officers shown in the Summary Compensation Table
;
and
|
–
|
all directors and executive officers as a group as of March 12, 2020.
|
|
Shares Beneficially
Owned
|
|
Percent of Shares
Outstanding
|
|
Greater Than 5% Owners
|
|
|
||
Blackrock, Inc.
(1)
|
19,035,877
|
|
16.90
|
|
55 East 52nd Street
|
|
|
||
New York, NY 10055
|
|
|
||
The Vanguard Group
(2)
|
12,504,036
|
|
11.11
|
|
100 Vanguard Blvd.
|
|
|
||
Malvern, PA 19355
|
|
|
||
Dimensional Fund Advisors LP
(3)
|
9,335,229
|
|
8.30
|
|
Building One
|
|
|
||
6300 Bee Cave Road
|
|
|
||
Austin, TX 78746
|
|
|
||
|
|
|
||
Non-Employee Directors
(4)
|
|
|
||
Elizabeth A. Chappell
|
74,844
|
|
*
|
|
William L. Kozyra
|
36,296
|
|
*
|
|
Peter D. Lyons
|
41,296
|
|
*
|
|
James A. McCaslin
|
76,268
|
|
*
|
|
William P. Miller II
|
83,318
|
|
*
|
|
Herbert K. Parker
|
38,711
|
|
*
|
|
Sandra E. Pierce
|
8,711
|
|
*
|
|
John F. Smith
|
69,268
|
|
*
|
|
Samuel Valenti III
|
51,755
|
|
*
|
|
|
|
|
||
Named Executive Officers
|
|
|
||
David C. Dauch
(5)
|
789,844
|
|
*
|
|
Christopher J. May
|
49,828
|
|
*
|
|
Michael K. Simonte
|
212,539
|
|
*
|
|
Gregory S. Deveson
|
33,515
|
|
*
|
|
Norman Willemse
|
87,225
|
|
*
|
|
All Directors and Executive Officers as a Group (17 persons)
|
1,745,043
|
|
1.5
|
|
(1)
|
Based on the Schedule 13G filed on February 4, 2020 by Blackrock, Inc., reporting sole voting power over 18,687,461 shares and sole investment power over 19,035,877 shares.
|
(2)
|
Based on the Schedule 13G filed on February 12, 2020 by The Vanguard Group, reporting sole voting power over 107,927 shares, sole investment power over 12,394,153, shared voting power over 15,848 shares and shared investment power over 109,883 shares.
|
(3)
|
Based on the Schedule 13G filed on February 12, 2020 by Dimensional Fund Advisors LP, reporting sole voting power over 8,986,389 shares and sole investment power over 9,335,229 shares.
|
(4)
|
Includes vested RSUs awarded to non-employee directors that have been deferred. For the number of RSUs held by each non-employee director, see table included in
Compensation of Directors
.
|
(5)
|
Includes 548 shares held in trusts for the benefit of Mr. Dauch’s children.
|
Related Person Transactions Policy
|
|
Advisory Vote on Executive Compensation
|
Proposal 2: Advisory vote on Executive Compensation
|
–
|
The Compensation Committee changed our comparative peer group for benchmarking executive compensation to more closely reflect the size and complexity of our business, industry and competition for talent. Our competitor peer group, which is used to measure relative total shareholder return (TSR), was adjusted to reflect changes in our competitors and to increase the number of companies in this group.
|
–
|
For 2019, the Compensation Committee determined that total direct compensation for the Chief Executive Officer, Chief Financial Officer and President remain unchanged from 2018.
|
–
|
We continued to set rigorous annual and long-term incentive compensation targets for awards granted in 2019 to drive management performance at the highest levels.
|
–
|
The 2019 long-term incentive (LTI) awards are 66% performance-based in order to continue to drive superior performance that is aligned with our business strategy. One-half of the 2019 performance-based award is based on relative TSR and one-half is based on free cash flow performance.
|
þ
|
The Board unanimously recommends a vote FOR the approval of the compensation of our named executive officers.
|
Compensation Discussion and Analysis
|
Compensation Discussion and Analysis
|
Named Executive Officers
|
Named Executive Officers
|
|
David C. Dauch
Chairman & Chief Executive Officer
|
|
Christopher J. May
Vice President & Chief Financial Officer
|
|
Michael K. Simonte
President
|
|
Gregory S. Deveson
President Driveline
|
|
Norman Willemse
President Metal Forming
|
Compensation Discussion and Analysis
|
Executive Summary
|
þ
|
Delivered on our key strategic objectives of profitable growth, diversification, solid financial performance and technology leadership
|
þ
|
Completed 50 global product and program launches
|
|
|
|
|
þ
|
2020 Automotive News PACE Award Finalist
|
þ
|
Continued strong cash flow generation and debt reduction
|
|
|
|
|
þ
|
Completed sale of U.S. iron casting business
|
þ
|
Celebrated 25 years of world-class quality, technology leadership and operational excellence
|
|
|
|
|
þ
|
3rd eDrive Unit new business award – AAM’s first in China market
|
þ
|
Named GM Supplier of the Year for 3rd
consecutive year and received GM Supplier Diversity Award
|
|
|
|
|
þ
|
Published 1st Sustainability Review in 2019 and Sustainability Report in March 2020.
|
þ
|
Received Sustainability Award from Ford Motor Company
|
Compensation Discussion and Analysis
|
Strategic Business Objective
|
Alignment
|
Incentive Metric
|
|
|
|
Continue to strengthen the balance sheet; provide funding for organic growth, research and development, and other capital priorities
|
|
Free Cash Flow
- 2019 LTI Performance Units
(50% metric of performance-based LTI)
|
|
|
|
Develop innovative technology, including electrification and reinvest in research and development
|
Relative TSR
-
2019 LTI Performance Shares (50% metric of performance-based LTI)
|
|
|
||
Create sustainable value for shareholders
|
||
|
|
|
Achieve profitable growth, along with the ability to be flexible as the market changes, and reduce leverage
|
EBITDA
- 2019 Annual Incentive Program
(100% metric)
|
|
|
||
Right-size operations to achieve productivity improvements
|
Compensation Discussion and Analysis
|
–
|
The Committee changed our comparative peer group for benchmarking executive compensation to more closely reflect the size and complexity of our business, our industry and competition for talent. Our competitor peer group, which is used to measure relative TSR, was adjusted to reflect changes in competitors and to increase the number of companies in this group.
|
–
|
For 2019, the Committee determined that total direct compensation for the CEO, Chief Financial Officer and President remain unchanged from 2018.
|
–
|
We continued to set rigorous annual and long-term incentive compensation targets for awards granted in 2019 to drive management performance at the highest levels.
|
–
|
The 2019 long-term incentive (LTI) awards were 66% performance-based in order to continue to drive superior performance that is aligned with our business strategy. One-half of the 2019 performance-based award is based on relative TSR and one-half is based on free cash flow performance. For 2019, the free cash flow portion of the award is denominated in dollars and settled in cash rather than in shares. This change was made as prudent use of AAM's share pool for LTI grants.
|
|
|
Compensation Discussion and Analysis
|
Compensation of Executive Officers
|
Supports Business Strategy
|
Market Competitive
|
Aligned with
Shareholder Interests
|
|
|
|
|
|
–
86% of CEO compensation is variable and at risk
–
Rigorous performance goals as key drivers of enterprise value creation such as EBITDA, relative TSR and cash flow
–
Programs utilize metrics that emphasize company performance and are aligned with business strategy
|
–
Attract and retain executive talent
–
Benchmark pay against a peer group of similarly sized companies
–
Target direct compensation at the 50
th
percentile
–
Ensure incentive plans reward for desired behaviors and pay outcomes align with results
|
–
Mix of annual and long-term incentive programs balances focus between short-term results and long-term share appreciation
–
60% threshold of performance-based LTI
–
Cap on payout of performance shares based on relative TSR if absolute TSR is negative
–
CEO stock ownership requirement of 6 times base salary
|
|
Component
|
|
Purpose
|
|
Characteristics
|
|
|
|
|
|
Base Salary
|
|
Based on level of responsibility, experience, individual performance and internal pay equity
|
|
Fixed cash component generally targeted at the peer group median
|
Annual Incentive Compensation
|
|
Incentive to drive short-term performance aligned with strategic goals
|
|
Cash award that is at-risk subject to the attainment of performance targets
|
Long-Term Incentive Compensation
|
|
Incentive to drive long-term financial and strategic growth that creates shareholder value and supports retention of executives
|
|
Awarded in a combination of performance shares, performance units and RSUs tied to financial and share performance that drive sustainable results and shareholder value
|
Retirement and Deferred Compensation
|
|
Provide income upon retirement
|
|
401(k) and nonqualified defined benefit and deferred compensation plans
|
Perquisites
|
|
Limited supplement to total direct compensation
|
|
Primary benefit is a Company-provided vehicle with AAM content
|
Compensation Discussion and Analysis
|
–
|
Company performance objectives and goals, which serve as a basis for incentive compensation;
|
–
|
attracting, retaining and motivating executive officers;
|
–
|
information regarding financial performance, budgets and forecasts as they pertain to compensation; and
|
–
|
industry and market conditions affecting AAM's business strategy.
|
Compensation Discussion and Analysis
|
–
|
total revenue and market capitalization;
|
–
|
competitors in industry segment;
|
–
|
complexity of global business and operations; and
|
–
|
competition for talent and investor capital.
|
2018 Peers
|
|
2018 to 2019 Changes
|
|
2019 Peers
|
|
|
|
|
|
|
|
Ametek Inc.
Aptiv PLC
BorgWarner Inc.
Cooper-Standard Holdings Inc.
Cummins Inc.
Dana Incorporated
Dover Corporation
Flowserve Corporation
Fluor Corp.
Goodyear Tire & Rubber Company
Lear Corporation
Meritor, Inc.
Navistar International Corporation
PACCAR Inc
Parker-Hannifin Corporation
Rockwell Automation
Tenneco Inc.
Terex Corporation
Trinity Industries, Inc.
Visteon Corporation
|
|
ADDITIONS
|
|
Adient plc
Aptiv PLC
BorgWarner Inc.
Cooper-Standard Holdings Inc.
Cooper Tire & Rubber Company
Dana Incorporated
Delphi Technologies PLC
Flowserve Corporation
Goodyear Tire & Rubber Company
Lear Corporation
Meritor, Inc.
Navistar International Corporation
Oshkosh Corporation
Parker-Hannifin Corporation
Rockwell Automation
Tenneco Inc.
Terex Corporation
Trinity Industries, Inc.
Visteon Corporation
|
|
|
More closely aligned with the size and complexity of our business, our industry and competition for talent
Adient plc
Cooper Tire & Rubber Company
Delphi Technologies PLC
Oshkosh Corporation
|
|
|||
|
|
||||
|
|
||||
+
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
|
|||
|
|
|
|||
|
REMOVAL
|
|
|||
|
No longer aligned with our size and business operations
Ametek Inc.
Cummins Inc.
Dover Corporation
Fluor Corp.
PACCAR Inc.
|
|
|||
|
|
||||
|
|
||||
-
|
|
||||
|
|
||||
|
|
||||
|
|
Compensation Discussion and Analysis
|
Direct Compensation Elements
|
|
|
2019
|
|
|
2018
|
|
% Change
|
|
||
David C. Dauch
|
|
$
|
1,150,000
|
|
|
$
|
1,150,000
|
|
—
|
%
|
Christopher J. May
|
|
$
|
550,000
|
|
|
$
|
550,000
|
|
—
|
%
|
Michael K. Simonte
|
|
$
|
750,000
|
|
|
$
|
750,000
|
|
—
|
%
|
Gregory S. Deveson
|
|
$
|
600,000
|
|
|
$
|
530,000
|
|
13
|
%
|
Norman Willemse
|
|
$
|
575,000
|
|
|
$
|
530,000
|
|
9
|
%
|
–
|
2019 target performance was set at a level higher than 2018 actual adjusted EBITDA performance.
|
–
|
Achievement of target performance would result in the highest adjusted EBITDA performance in AAM history.
|
–
|
Target performance is higher than the performance of a majority of our competitor peer group companies.
|
Compensation Discussion and Analysis
|
|
Goal Rigor –
48% payout
|
|
|
Weighting
|
|
|
Threshold (Payout 0%)
|
|
Target
(Payout 100%)
|
|
Maximum (Payout 200%)
|
|
2019 Actual Performance
|
2019 Actual Payout %
|
Adjusted EBITDA
|
100
|
%
|
|
$910 million
|
|
$1,215 million
|
|
$1,300 million
|
|
$1,055.5 million
(1)(2)
|
48%
|
(2)
|
For purposes of calculating performance achievement under the annual incentive program, additional adjustments were made to adjusted EBITDA as reported in our annual report on Form 10-K for the year ended December 31, 2019. Adjustments made under the program include $84.5 million due to the unfavorable impact of the GM work stoppage and $0.7 million related to the divestiture of the U.S. iron casting operations as further described in the
Non-GAAP Reconciliation
in Appendix A.
|
|
Target Annual Incentive Opportunity
|
|
David C. Dauch
|
135
|
%
|
Christopher J. May
|
80
|
%
|
Michael K. Simonte
|
100
|
%
|
Gregory S. Deveson
|
80
|
%
|
Norman Willemse
|
80
|
%
|
Compensation Discussion and Analysis
|
|
Form of Award
|
|||||
|
Performance Shares
|
|
Performance Units
|
|
RSUs
|
|
LTI Mix
|
33
|
%
|
33
|
%
|
34
|
%
|
|
|
|
|
|||
Objective
|
Drive and reward TSR performance key to shareholders
|
|
Drive and reward performance key to strategic business objectives
|
|
Encourage retention and ownership supporting shareholder alignment
|
|
|
|
|
|
|||
Performance Measure
|
RelativeTSR
|
|
Free Cash Flow
|
|
Continued service with AAM
|
|
|
|
|
|
|||
Competitor Peer Group for Relative TSR
|
Adient plc
Autoliv Inc. BorgWarner Inc. Dana Incorporated Delphi Technologies PLC Lear Corporation Magna International Inc. Meritor Inc, Tenneco Inc. |
|
Not applicable
|
|
Not applicable
|
|
|
|
|
|
|||
Performance / Vesting Period
|
Subject to achievement of performance measures over the 3-year performance period January 1, 2019 through December 31, 2021
|
|
Subject to achievement of performance measures over the 3-year performance period January 1, 2019 through December 31, 2021
|
|
Cliff vest on the 3rd anniversary of grant
|
|
|
|
|
|
|||
Settlement
|
Common stock
|
|
Cash
|
|
Common stock
|
|
Compensation Discussion and Analysis
|
–
|
Free cash flow target performance for 2019 - 2021 was set at a level higher than the previous three years' performance.
|
–
|
Achievement of target performance would result in the highest free cash flow in AAM history.
|
–
|
Relative TSR payout is capped if absolute TSR is negative.
|
|
Free Cash Flow Performance Measure
|
|
Relative TSR Performance Measure
|
|
||
Performance Level
|
3 Year Cumulative
Free Cash Flow
|
Percent of
Target Award
Opportunity Earned
|
|
Company's TSR Percentile Rank
|
Percent of
Target Award
Opportunity Earned
|
|
Threshold
|
$1,100 million
|
50
|
%
|
35
th
|
50
|
%
|
Target
|
$1,375 million
|
100
|
%
|
50
th
|
100
|
%
|
Maximum
|
$1,500 million
|
200
|
%
|
75
th
|
200
|
%
|
|
2019 Target Long-Term Incentive Opportunity
|
|
2018 Target Long-Term Incentive Opportunity
|
|
||||
|
($)
(1)
|
|
%
(2)
|
|
($)
(1)
|
|
%
(2)
|
|
David C. Dauch
|
5,750,000
|
|
500
|
%
|
5,750,000
|
|
500
|
%
|
Christopher J. May
|
1,375,000
|
|
250
|
%
|
1,375,000
|
|
250
|
%
|
Michael K. Simonte
|
2,250,000
|
|
300
|
%
|
2,250,000
|
|
300
|
%
|
Gregory S. Deveson
|
1,200,000
|
|
200
|
%
|
1,060,000
|
|
200
|
%
|
Norman Willemse
|
1,150,000
|
|
200
|
%
|
1,060,000
|
|
200
|
%
|
|
Actual Performance
|
|
% of Target Shares Earned
|
|
|
Award Weighting
|
|
|
Weighted Payout
|
|
Relative TSR
|
22
nd
percentile
|
|
0
|
%
|
|
50
|
%
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|||
EBITDA Margin
|
16.5%
(1)
|
|
200
|
%
|
|
50
|
%
|
|
200
|
%
|
|
|
|
Final Payout as a % of Target
|
|
|
100
|
%
|
Compensation Discussion and Analysis
|
|
Additional 2020 LTI Opportunity
|
|
Total Target Compensation
|
|
|
$
|
|
%
|
|
David C. Dauch
|
575,000
|
|
7
|
%
|
Christopher J. May
|
275,000
|
|
12
|
%
|
Michael J. Simonte
|
375,000
|
|
10
|
%
|
Gregory S. Deveson
|
150,000
|
|
7
|
%
|
Norman Willemse
|
143,750
|
|
7
|
%
|
Indirect Compensation Elements
|
Compensation Discussion and Analysis
|
Other Compensation Matters
|
Compensation Discussion and Analysis
|
|
Multiple of
Base Salary
|
|
Chief Executive Officer
|
6
|
|
Chief Financial Officer; President
|
3
|
|
Other Executive Officers
|
2
|
|
Compensation Committee Report
|
Executive Compensation Tables
|
Executive Compensation Tables
|
Name and
Principal Position
|
Year
|
Salary
($)
|
|
Stock
Awards
(2)
($)
|
|
Non-Equity
Incentive
Plan
Compen-
sation
(3)
($)
|
|
Change in
Pension Value
And
Nonqualified
Deferred
Compensation
Earnings
(4)
($)
|
|
All Other
Compen-
sation
(5)
($)
|
|
Total
($)
|
|
David C. Dauch
(1)
Chairman & Chief Executive Officer
|
2019
|
1,150,000
|
|
4,818,898
|
|
745,200
|
|
266,426
|
|
682,727
|
|
7,663,251
|
|
2018
|
1,150,000
|
|
5,700,848
|
|
1,350,700
|
|
1,168,373
|
|
99,378
|
|
9,469,299
|
|
|
2017
|
1,150,000
|
|
7,319,937
|
|
2,819,000
|
|
1,869,698
|
|
86,982
|
|
13,245,617
|
|
|
Christopher J. May
Vice President & Chief Financial Officer |
2019
|
550,000
|
|
1,152,352
|
|
211,200
|
|
170,217
|
|
252,558
|
|
2,336,327
|
|
2018
|
550,000
|
|
1,363,250
|
|
382,800
|
|
278,969
|
|
47,939
|
|
2,622,958
|
|
|
2017
|
478,003
|
|
582,790
|
|
693,800
|
|
397,791
|
|
44,586
|
|
2,196,970
|
|
|
Michael K. Simonte
President |
2019
|
750,000
|
|
1,885,661
|
|
360,000
|
|
89,636
|
|
380,262
|
|
3,465,559
|
|
2018
|
750,000
|
|
2,230,775
|
|
652,500
|
|
517,163
|
|
66,424
|
|
4,216,862
|
|
|
2017
|
727,300
|
|
2,144,593
|
|
1,387,500
|
|
720,741
|
|
56,779
|
|
5,036,913
|
|
|
Gregory S. Deveson President Driveline
(6)
|
2019
|
597,083
|
|
1,005,700
|
|
230,400
|
|
14,506
|
|
117,249
|
|
1,964,938
|
|
2018
|
530,000
|
|
1,050,941
|
|
368,900
|
|
192,689
|
|
24,230
|
|
2,166,760
|
|
|
2017
|
375,417
|
|
1,512,287
|
|
588,300
|
|
22,485
|
|
40,331
|
|
2,538,820
|
|
|
Norman Willemse
President Metal Forming (7) |
2019
|
573,125
|
|
963,793
|
|
220,800
|
|
58,840
|
|
251,693
|
|
2,068,251
|
|
2018
|
530,000
|
|
1,050,955
|
|
368,900
|
|
227,486
|
|
50,203
|
|
2,227,544
|
|
|
2017
|
513,378
|
|
983,438
|
|
784,400
|
|
380,281
|
|
34,521
|
|
2,696,018
|
|
(1)
|
Compensation of Mr. Dauch is based solely on employment as an executive officer. He received no compensation for serving as a director.
|
(2)
|
Reflects the grant date fair value of restricted stock units and performance share awards made during fiscal year 2019 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined based on applying the assumptions used in our financial statements. See Note 10 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2019 regarding assumptions underlying the valuation of equity awards. Assuming the maximum performance levels are achieved for the performance share awards granted on March 4, 2019, the maximum value of performance share awards would be $3,795,030 for Mr. Dauch, $907,520 for Mr. May, $1,485,009 for Mr. Simonte, $792,022 for Mr. Deveson and $759,032 for Mr. Willemse based on grant date fair value. These amounts may not reflect the actual value realized upon vesting or settlement, if any.
|
(3)
|
Reflects amounts earned under the AAM Incentive Compensation Program for Executive Officers for 2019.
|
(4)
|
Reflects the annualized increase in pension value under the Salaried Retirement Program, the Albion Pension Plan and the Supplemental Executive Retirement Program (SERP). See
Pension Benefits Table
. There are no above-market or preferential earnings on compensation deferred under our Executive Retirement Savings Plan or our Executive Deferred Compensation Plan.
|
Executive Compensation Tables
|
(5)
|
The components of All Other Compensation for 2019 are as follows:
|
Name
|
Employer
401(k) Match
Contributions
(a)
($)
|
|
Retirement
Contributions
(b)
($)
|
|
Executive
Life
Insurance
Premiums
(c)
($)
|
|
Company-Provided
Vehicles
(d)
($)
|
|
Tax Gross Ups for Spousal Travel
(e)
($)
|
|
Other
(f)
($)
|
|
Total
($)
|
|
David C. Dauch
|
14,000
|
|
607,000
|
|
13,273
|
|
29,175
|
|
6,509
|
|
12,770
|
|
682,727
|
|
Christopher J. May
|
13,700
|
|
214,200
|
|
2,542
|
|
18,993
|
|
—
|
|
3,123
|
|
252,558
|
|
Michael K. Simonte
|
14,000
|
|
333,300
|
|
7,796
|
|
23,193
|
|
—
|
|
1,973
|
|
380,262
|
|
Gregory S. Deveson
|
9,500
|
|
103,300
|
|
3,761
|
|
—
|
|
—
|
|
688
|
|
117,249
|
|
Norman Willemse
|
13,583
|
|
215,000
|
|
7,357
|
|
12,980
|
|
—
|
|
2,773
|
|
251,693
|
|
(b)
|
Includes employer retirement contributions under AAM’s 401(k) plan and the ERSP as noted below. The ERSP contributions are further described in the
Nonqualified Deferred Compensation
table.
|
Name
|
Retirement
Contributions under the 401(k) Plan
($)
|
|
Employer ERSP Contributions
($)
|
|
Total
($)
|
|
David C. Dauch
|
14,000
|
|
593,000
|
|
607,000
|
|
Christopher J. May
|
14,000
|
|
200,200
|
|
214,200
|
|
Michael K. Simonte
|
14,000
|
|
319,300
|
|
333,300
|
|
Gregory S. Deveson
|
8,400
|
|
94,900
|
|
103,300
|
|
Norman Willemse
|
14,000
|
|
201,000
|
|
215,000
|
|
(d)
|
Includes personal use of Company-provided vehicles. The aggregate incremental cost of Company-provided vehicles is based on total vehicle cost if business use of the vehicle is less than 50%. For Mr. Dauch, includes the cost of personal use of a second Company-provided vehicle.
|
(e)
|
Includes amounts reimbursed for taxes attributable to the income associated with the cost of travel for spouse accompanying the NEO to Company business meetings and events.
|
(f)
|
For Mr. Dauch, includes $10,394 for the cost of travel for spouse accompanying him to Company business meetings or events, personal umbrella liability insurance premiums, and meals provided during business hours. For Mr. May, Mr. Simonte and Mr. Willemse, includes the cost of personal umbrella liability insurance premiums and the cost of an executive physical. For Mr. Deveson, includes the cost of personal umbrella liability insurance premiums.
|
Executive Compensation Tables
|
|
|
|
Estimated Future Payouts under
Non Equity Incentive Plan Awards
(1)
|
Estimated Future Payouts under
Equity Incentive Plan Awards
(2)
|
|
|
||||||||||||||
Name
|
Grant Date
|
|
Approval
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum ($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
All Other
Stock Awards:
Number of
Shares of Stock
or Units
(3)
(#)
|
|
Grant Date
Fair
Value of
Stock and
Option
Awards
(4)
($)
|
|
David C. Dauch
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annual Incentive
|
—
|
|
—
|
|
—
|
|
1,552,500
|
|
3,105,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Performance Units (Free Cash Flow)
|
3/4/2019
|
2/6/2019
|
948,750
|
|
1,897,500
|
|
3,795,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Performance Shares (TSR)
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
58,783
|
|
117,566
|
|
235,132
|
|
—
|
|
2,863,908
|
|
||
Restricted Stock Units
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
121,127
|
|
1,954,990
|
|
||
Christopher J. May
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annual Incentive
|
—
|
|
—
|
|
—
|
|
440,000
|
|
880,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Performance Units (Free Cash Flow)
|
3/4/2019
|
2/6/2019
|
226,875
|
|
453,750
|
|
907,500
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Performance Shares (TSR)
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
14,057
|
|
28,114
|
|
56,228
|
|
—
|
|
684,857
|
|
||
Restricted Stock Units
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28,965
|
|
467,495
|
|
||
Michael K. Simonte
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annual Incentive
|
—
|
|
—
|
|
—
|
|
750,000
|
|
1,500,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Performance Units (Free Cash Flow)
|
3/4/2019
|
2/6/2019
|
371,250
|
|
742,500
|
|
1,485,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Performance Shares (TSR)
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
23,002
|
|
46,004
|
|
92,008
|
|
—
|
|
1,120,657
|
|
||
Restricted Stock Units
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
47,398
|
|
765,004
|
|
||
Gregory S. Deveson
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annual Incentive
|
—
|
|
—
|
|
—
|
|
480,000
|
|
960,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Performance Units (Free Cash Flow)
|
3/4/2019
|
2/6/2019
|
198,000
|
|
396,000
|
|
792,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Performance Shares (TSR)
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
12,268
|
|
24,536
|
|
49,072
|
|
—
|
|
597,697
|
|
||
Restricted Stock Units
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25,279
|
|
408,003
|
|
||
Norman Willemse
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annual Incentive
|
—
|
|
—
|
|
—
|
|
460,000
|
|
920,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Performance Units (Free Cash Flow)
|
3/4/2019
|
2/6/2019
|
189,750
|
|
379,500
|
|
759,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||
Performance Shares (TSR)
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
11,757
|
|
23,514
|
|
47,028
|
|
—
|
|
572,801
|
|
||
Restricted Stock Units
|
3/4/2019
|
2/6/2019
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24,225
|
|
390,992
|
|
(1)
|
Reflects annual incentive awards granted under the AAM Incentive Compensation Program for Executive Officers and performance unit awards granted under the 2018 Omnibus Incentive Plan. The performance unit awards are payable in cash based on free cash flow over the 3-year performance period January 1, 2019 through December 31, 2021.
|
(2)
|
Reflects performance share awards granted under the 2018 Omnibus Incentive Plan payable in common stock based on the relative TSR performance over the 3-year performance period January 1, 2019 through December 31, 2021.
|
(3)
|
Reflects RSUs granted under the 2018 Omnibus Incentive Plan. The awards are payable in common stock, contingent upon continued employment through the 3-year vesting period. No options were granted in 2019.
|
(4)
|
Reflects the full grant date fair value of performance share awards and RSUs made during fiscal year 2019 calculated in accordance with FASB ASC 718 (without any reduction for risk of forfeiture) as determined based on applying the assumptions used in our financial statements. See Note 10 to the audited consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2019 regarding assumptions underlying the valuation of equity awards.
|
Executive Compensation Tables
|
|
|
CEO Employment Agreement
|
|
President Employment Agreement
|
Base Salary
|
|
$1,150,000 for 2019, subject to annual review and increase by the Compensation Committee
|
|
$750,000 for 2019, subject to annual review and increase by the Compensation Committee
|
Annual Incentive
|
|
Participation in the annual incentive plan for executive officers. Target opportunity of 135% of base salary for 2019, subject to annual review and increase by the Compensation Committee
|
|
Participation in the annual incentive plan for executive officers. Target opportunity of 100% of base salary for 2019, subject to annual review and increase by the Compensation Committee
|
Long-Term Incentive
|
|
Participation in the long-term incentive plans for executive officers. Target opportunity of 500% for 2019, subject to annual review and increase by the Compensation Committee
|
|
Participation in the long-term incentive plans for executive officers. Target opportunity of 300% for 2019, subject to annual review and increase by the Compensation Committee
|
Other Benefits
|
|
Participation in plans applicable to executive officers. Retiree medical, dental and vision coverage equivalent to the benefit levels offered in the Company's group health care plans for salaried associates as of September 1, 2012
|
|
Participation in plans applicable to executive officers
|
Term
|
|
Initial term expired August 31, 2015. Additional one-year extensions unless either party provides 60 days' written notice of intent not to renew
|
|
Initial term expired July 31, 2018. Additional one-year extensions unless either party provides 60 days' written notice of intent not to renew
|
Executive Compensation Tables
|
|
Free Cash Flow
|
|
Relative TSR
|
||||||
Performance Level
|
3-Year
Cumulative
Free Cash Flow
|
|
Percent of
Target Award
Opportunity
Earned
|
|
|
Company TSR
Percentile
Rank
|
|
Percent of
Target Award
Opportunity
Earned
|
|
Threshold
|
$1,100 million
|
|
50
|
%
|
|
35
th
|
|
50
|
%
|
Target
|
$1,375 million
|
|
100
|
%
|
|
50
th
|
|
100
|
%
|
Maximum
|
$1,500 million
|
|
200
|
%
|
|
75
th
|
|
200
|
%
|
Executive Compensation Tables
|
|
Stock Awards
|
|||||
Name
|
Number of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
(1)
($)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
(8)
|
|
David C. Dauch
|
88,774
(2)
|
955,208
|
|
66,440
(6)
|
714,894
|
|
|
136,904
(3)
|
1,473,087
|
|
132,879
(6)
|
1,429,778
|
|
|
121,127
(4)
|
1,303,327
|
|
58,783
(7)
|
632,505
|
|
|
|
|
|
|
||
Christopher J. May
|
7,068
(2)
|
76,052
|
|
15,888
(6)
|
170,955
|
|
|
32,739
(3)
|
352,272
|
|
31,775
(6)
|
341,899
|
|
|
28,965
(4)
|
311,663
|
|
14,057
(7)
|
151,253
|
|
|
|
|
|
|
||
Michael K. Simonte
|
26,009
(2)
|
279,857
|
|
25,998
(6)
|
279,738
|
|
|
53,572
(3)
|
576,435
|
|
51,996
(6)
|
559,477
|
|
|
47,398
(4)
|
510,002
|
|
23,002
(7)
|
247,502
|
|
|
|
|
|
|
||
Gregory S. Deveson
|
20,560
(5)
|
221,226
|
|
12,248
(6)
|
131,788
|
|
|
25,238
(3)
|
271,561
|
|
24,496
(6)
|
263,577
|
|
|
25,279
(4)
|
272,002
|
|
12,268
(7)
|
132,004
|
|
|
|
|
|
|
||
Norman Willemse
|
11,927
(2)
|
128,334
|
|
12,248
(6)
|
131,788
|
|
|
25,239
(3)
|
271,572
|
|
24,496
(6)
|
263,577
|
|
|
24,225
(4)
|
260,661
|
|
11,757
(7)
|
126,505
|
|
|
|
|
|
|
(1)
|
Reflects value of outstanding RSUs at $10.76, the closing price of AAM common stock on December 31, 2019.
|
(2)
|
Reflects RSUs granted on February 28, 2017 that vested on February 28, 2020.
|
(3)
|
Reflects RSUs granted on March 2, 2018. RSUs vest three years from the date of grant.
|
(4)
|
Reflects RSUs granted on March 4, 2019. RSUs vest three years from the date of grant.
|
(5)
|
Reflects RSUs granted to Mr. Deveson on May 1, 2017 based on his April 2017 hire date. RSUs vest three years from date of grant.
|
(6)
|
Reflects performance shares granted on March 2, 2018 for the performance period January 1, 2018 through December 31, 2020 that would be paid out at the end of the performance period based on actual performance through December 31, 2019. Relative TSR award amounts reflect a threshold payout and the free cash flow awards reflect a target payout. Payouts will be determined at the end of the performance period based on actual performance.
|
(7)
|
Reflects performance shares granted on March 4, 2019 for the performance period January 1, 2019 through December 31, 2021 that would be paid out at the end of the performance period based on actual relative TSR performance through December 31, 2019. Award amounts reflect a threshold payout. Payouts will be determined at the end of the performance period based on actual performance.
|
(8)
|
Reflects the value of 2018 and 2019 performance shares based on performance through December 31, 2019 as described above in footnotes (6) and (7) multiplied by $10.76, the closing price of AAM common stock on December 31, 2019.
|
Executive Compensation Tables
|
|
Stock Awards
|
|||
Name
|
Number of
Shares
Acquired on
Vesting
(1)
(#)
|
|
Value
Realized on
Vesting
(2)
($)
|
|
David C. Dauch
|
273,687
|
|
3,490,194
|
|
Christopher J. May
|
22,534
|
|
289,885
|
|
Michael K. Simonte
|
82,924
|
|
1,066,768
|
|
Gregory S. Deveson
|
39,908
|
|
429,410
|
|
Norman Willemse
|
38,026
|
|
489,182
|
|
(1)
|
Reflects the number of shares vested in March 2019 under RSU awards granted in March 2016 (excluding for Mr. Deveson). Also includes the number of performance shares earned for the performance period ending December 31, 2019.
|
(2)
|
Reflects the number of shares underlying vested RSUs multiplied by the closing market price of AAM common stock on the vesting date. Also includes the number of performance shares earned for the period ending December 31, 2019 multiplied by the closing market price of AAM common stock at December 31, 2019. See
CD&A
for further detail of the payouts earned
.
|
Executive Compensation Tables
|
Name
|
Plan Name
|
Number of
Years of
Credited
Service
(1)
(#)
|
|
Present
Value of
Accumulated
Benefit
(2)
($)
|
|
David C. Dauch
(3)
|
AAM Salaried Retirement Program
|
11.5000
|
|
474,286
|
|
AAM Supplemental Executive Retirement Program
|
22.8333
|
|
8,367,156
|
|
|
Christopher J. May
|
AAM Salaried Retirement Program
|
12.5000
|
|
215,361
|
|
AAM Supplemental Executive Retirement Program
|
23.8333
|
|
1,411,119
|
|
|
Michael K. Simonte
(3)
|
AAM Salaried Retirement Program
|
8.0833
|
|
315,790
|
|
AAM Supplemental Executive Retirement Program
|
19.4166
|
|
3,124,093
|
|
|
Gregory S. Deveson
|
AAM Supplemental Executive Retirement Program
|
1.0833
|
|
229,680
|
|
Norman Willemse
(4)
|
Albion Pension Plan
|
6.3333
|
|
371,955
|
|
AAM Supplemental Executive Retirement Program
|
17.0000
|
|
1,424,259
|
|
(1)
|
Benefits under the SRP were frozen effective December 31, 2006 for Mr. Dauch, Mr. May and Mr. Simonte. Benefits for Mr. Willemse under the Albion Pension Plan reflect his years of service with our UK subsidiary, Albion Automotive Limited. Credited service under the SERP reflects service through the freeze date of April 30, 2018. As a result, credited service under the SRP, the Albion Pension Plan and the SERP is less than actual service with the Company.
|
(2)
|
The values shown are based on benefits deferred to the earliest age at which unreduced benefits are payable. The assumptions used to calculate the actuarial present value of accumulated benefits are the same assumptions used in our audited consolidated financial statements for the fiscal year ended December 31, 2019 and assume continued employment until unreduced retirement age is attained. For material assumptions used, see Note 9 to the audited consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2019.
|
(3)
|
Mr. Dauch and Mr. Simonte were eligible to retire on December 31, 2019 under both the SRP and the SERP. Each qualifies for an unreduced benefit under the SRP and the lump sum benefit under the SERP.
|
(4)
|
Mr. Willemse is not a participant in the SRP. Mr. Willemse was eligible to retire on December 31, 2019 under both the Albion Pension Plan and the SERP. He qualifies for the lump sum benefit under the SERP.
|
Executive Compensation Tables
|
Executive Compensation Tables
|
Name
|
Plan
|
Registrant
contributions
In Last FY
(1)
($)
|
|
Aggregate
Earnings
In Last FY
(2)
($)
|
|
Aggregate
Withdrawals
Distributions
($)
|
|
Aggregate
Balance at
Last FYE
(3)
($)
|
|
David C. Dauch
|
EDC
|
—
|
|
9,715
|
|
(463,663
|
)
|
—
|
|
ERSP
|
593,000
|
|
9,250
|
|
—
|
|
602,250
|
|
|
Christopher J. May
|
EDC
|
—
|
|
—
|
|
—
|
|
—
|
|
ERSP
|
200,200
|
|
2,094
|
|
—
|
|
202,294
|
|
|
Michael K. Simonte
|
EDC
|
—
|
|
—
|
|
—
|
|
—
|
|
ERSP
|
319,300
|
|
1,023
|
|
—
|
|
320,323
|
|
|
Gregory S. Deveson
|
EDC
|
—
|
|
21,117
|
|
—
|
|
82,467
|
|
ERSP
|
94,900
|
|
3,526
|
|
—
|
|
98,426
|
|
|
Norman Willemse
|
EDC
|
—
|
|
11,900
|
|
—
|
|
108,986
|
|
ERSP
|
201,000
|
|
2,050
|
|
—
|
|
203,050
|
|
(1)
|
Reflects a discretionary contribution notionally funded in March 2019 and annual 2019 plan contributions notionally funded in March 2020 reported in the
Summary Compensation Table
as follows:
|
Name
|
2019 Discretionary Contributions
($)
|
|
2019 Contributions*
($)
|
|
Total 2019 Contributions
($)
|
|
David C. Dauch
|
58,300
|
|
534,700
|
|
593,000
|
|
Christopher J. May
|
18,300
|
|
181,900
|
|
200,200
|
|
Michael K. Simonte
|
31,700
|
|
287,600
|
|
319,300
|
|
Gregory S. Deveson
|
20,700
|
|
74,200
|
|
94,900
|
|
Norman Willemse
|
17,000
|
|
184,000
|
|
201,000
|
|
(2)
|
Reflects hypothetical accrued earnings or losses during 2019 on notional investments designed to track the performance of funds similar to those available under the Company’s 401(k) plan. None of the earnings shown in this column are reported as compensation in the
Summary Compensation Table
.
|
(3)
|
Reflects amounts previously reported in the
Summary Compensation Table
under the EDC for the NEOs.
|
Executive Compensation Tables
|
–
|
Age 55 with 10 years of service;
|
–
|
Age 60 with 5 years of service; or
|
–
|
Age 65
|
Name of Fund
|
Rate of
Return
|
|
|
Name of Fund
|
Rate of
Return
|
|
PIMCO Total Return Fund
|
8.26
|
%
|
|
Hartford International Opportunities Fund
|
26.12
|
%
|
PIMCO High Yield Fund
|
14.93
|
%
|
|
Victory Sycamore Established Value Fund
|
28.82
|
%
|
BNY Mellon International Bond Fund
|
5.16
|
%
|
|
FIAM Blend Target Date 2005 Fund
|
12.59
|
%
|
Vanguard Total Bond Market Index Fund
|
8.73
|
%
|
|
FIAM Blend Target Date 2010 Fund
|
14.79
|
%
|
Fidelity 500 Index Fund
|
31.47
|
%
|
|
FIAM Blend Target Date 2015 Fund
|
16.95
|
%
|
MFS Value Fund
|
30.08
|
%
|
|
FIAM Blend Target Date 2020 Fund
|
18.74
|
%
|
Vanguard FTSE Social Index Fund
|
33.96
|
%
|
|
FIAM Blend Target Date 2025 Fund
|
20.48
|
%
|
Fidelity Growth Company Fund
|
38.52
|
%
|
|
FIAM Blend Target Date 2030 Fund
|
23.03
|
%
|
Fidelity Low-Priced Stock Fund
|
25.81
|
%
|
|
FIAM Blend Target Date 2035 Fund
|
25.99
|
%
|
Eaton Vance Atlanta Capital SMID Fund
|
34.44
|
%
|
|
FIAM Blend Target Date 2040 Fund
|
26.97
|
%
|
Vanguard External Market Index Fund
|
28.05
|
%
|
|
FIAM Blend Target Date 2045 Fund
|
26.96
|
%
|
American Beacon Small Cap Value Fund
|
23.51
|
%
|
|
FIAM Blend Target Date 2050 Fund
|
26.98
|
%
|
Janus Henderson Triton Fund
|
28.60
|
%
|
|
FIAM Blend Target Date 2055 Fund
|
26.93
|
%
|
Fidelity Diversified International Fund
|
29.75
|
%
|
|
FIAM Blend Target Date 2060 Fund
|
26.97
|
%
|
Fidelity International Index Fund
|
22.00
|
%
|
|
FIAM Blend Target Date Income Fund
|
10.82
|
%
|
Harding Loevner Institutional Emerging Market Fund
|
25.76
|
%
|
|
Mass Mutual Diversified SAGIC Fund
|
3.95
|
%
|
Executive Compensation Tables
|
–
|
a material breach of his obligations under the agreement;
|
–
|
the willful and continued failure or refusal to satisfactorily perform his duties;
|
–
|
a conviction of or pleading guilty (or no contest) to a felony or to another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company or impairs its operations;
|
–
|
engaging in any misconduct, negligence, act of dishonesty (including any violation of federal securities laws) or violence that is materially injurious to the Company;
|
–
|
a material breach of a restrictive covenant (i.e., non-competition, non-solicitation) or Company policy;
|
–
|
refusal to follow the directions of the Board; or
|
–
|
any other willful misconduct that is materially injurious to AAM's financial condition or business reputation.
|
–
|
a material decrease in compensation or a failure by the Company to pay material compensation;
|
–
|
a material diminution of responsibilities, positions or titles (other than solely as a result of the Company ceasing to be a publicly-traded company);
|
–
|
relocation more than 50 miles outside the Detroit-metropolitan area; or
|
–
|
a material breach by the Company of its obligations under the agreement.
|
Executive Compensation Tables
|
–
|
a cash amount equal to annual base salary and target annual bonus multiplied by up to 1.5 based on position; target annual bonus is determined as the target amount in the year of termination;
|
–
|
a prorated annual bonus equal to the annual bonus for the performance year during which the qualifying termination occurs based on active employment during the performance year;
|
–
|
reimbursement of outplacement service costs of up to $20,000; and
|
–
|
continued participation in AAM's medical benefit plans for up to 1.5 years following termination of employment based on position, or, in certain cases, a cash amount equal to the value of the benefit continuation.
|
–
|
a cash amount equal to annual base salary multiplied by two;
|
–
|
a cash amount equal to target annual bonus multiplied by two, with target annual bonus determined as the greater of the target amount in the year of the CIC or the year of termination of employment;
|
–
|
a prorated target annual bonus with the target annual bonus determined as the greater of the target amount in the year of the CIC or the year of termination of employment;
|
–
|
reimbursement of outplacement service costs of up to $30,000 incurred within 24 months following termination of employment; and
|
–
|
continued participation in AAM's medical benefit plans for two years following termination of employment, or, in certain cases, a cash amount equal to the value of the benefit continuation.
|
Executive Compensation Tables
|
–
|
directly or indirectly engaging in any business that competes with AAM;
|
–
|
soliciting or inducing our employees to leave AAM or otherwise interfering with our relationship with our employees, agents or consultants; and
|
–
|
using, exploiting or disclosing our confidential information to any third party without our prior written consent.
|
Executive Compensation Tables
|
David C. Dauch
|
For Good
Reason Resignation ($) |
|
Without
Cause Termination ($) |
|
Disability
Retirement
($)
|
|
Retirement
($)
|
|
Termination Upon a Change in
Control (1)
($)
|
|
Compensation:
|
|
|
|
|
|
|||||
Severance
|
2,300,000
(2)
|
|
2,300,000
(2)
|
|
—
|
|
—
|
|
3,450,000
(3)
|
|
Annual Incentive
|
3,850,200
(2)
|
|
3,850,200
(2)
|
|
745,200
(4)
|
|
745,200
(4)
|
|
5,402,700
(3)
|
|
Long Term Incentives:
|
|
|
|
|
|
|||||
RSUs
(5)
|
—
|
|
—
|
|
3,731,622
|
|
2,190,930
|
|
3,731,622
|
|
2017 Performance Share Awards
(6)
|
—
|
|
1,854,228
|
|
1,854,228
|
|
1,854,228
|
|
1,854,228
|
|
2018 Performance Share Awards
(7)
|
—
|
|
1,906,371
|
|
1,906,371
|
|
1,906,371
|
|
2,859,556
|
|
2019 Performance Share Awards
(8)
|
—
|
|
421,670
|
|
421,670
|
|
421,670
|
|
1,265,010
|
|
2019 Performance Unit Awards
(9)
|
—
|
|
632,500
|
|
632,500
|
|
632,500
|
|
1,897,500
|
|
|
|
|
|
|
|
|||||
Other Benefits:
|
|
|
|
|
|
|||||
Retirement Plans
(10)
|
474,286
|
|
474,286
|
|
684,330
|
|
367,493
|
|
474,286
|
|
SERP
(11)
|
8,367,156
|
|
8,367,156
|
|
8,367,156
|
|
8,367,156
|
|
8,367,156
|
|
Welfare Benefit
(12)
|
—
|
|
—
|
|
1,050,843
|
|
1,050,843
|
|
—
|
|
Executive Retirement Savings Plan
(13)
|
602,250
|
|
602,250
|
|
602,250
|
|
602,250
|
|
602,250
|
|
Deferred Compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Health Care
(14)
|
40,256
|
|
40,256
|
|
—
|
|
—
|
|
61,178
|
|
Disability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Life Insurance
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Outplacement Services
(15)
|
50,000
|
|
50,000
|
|
—
|
|
—
|
|
50,000
|
|
Total
|
15,684,148
|
|
20,498,917
|
|
19,996,170
|
|
18,138,641
|
|
30,015,486
|
|
Christopher J. May
|
For Good
Reason Resignation ($) |
|
Without
Cause Termination ($) |
|
Disability
Retirement (16)
($)
|
|
Retirement
($)
|
|
Termination Upon a Change in
Control (1)
($)
|
|
Compensation:
|
|
|
|
|
|
|||||
Severance
|
825,000
(17)
|
|
825,000
(17)
|
|
—
|
|
—
|
|
1,100,000
(18)
|
|
Annual Incentive
|
871,200
(17)
|
|
871,200
(17)
|
|
211,200
(4)
|
|
—
|
|
1,091,200
(18)
|
|
Long Term Incentives:
|
|
|
|
|
|
|||||
RSUs
(5)
|
—
|
|
—
|
|
739,987
|
|
—
|
|
739,987
|
|
2017 Performance Share Awards
(6)
|
—
|
|
147,627
|
|
147,627
|
|
—
|
|
147,627
|
|
2018 Performance Share Awards
(7)
|
—
|
|
455,865
|
|
455,865
|
|
—
|
|
683,798
|
|
2019 Performance Share Awards
(8)
|
—
|
|
100,836
|
|
100,836
|
|
—
|
|
302,507
|
|
2019 Performance Unit Awards
(9)
|
—
|
|
151,250
|
|
151,250
|
|
—
|
|
453,750
|
|
|
|
|
|
|
|
|||||
Other Benefits:
|
|
|
|
|
|
|||||
Retirement Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
SERP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Welfare Benefit
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Executive Retirement Savings Plan
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Deferred Compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Health Care
(19)
|
25,514
|
|
25,514
|
|
42,524
|
|
—
|
|
34,019
|
|
Disability
(20)
|
—
|
|
—
|
|
3,896,046
|
|
—
|
|
—
|
|
Life Insurance
(21)
|
—
|
|
—
|
|
3,451
|
|
—
|
|
—
|
|
Outplacement Services
(22)
|
20,000
|
|
20,000
|
|
—
|
|
—
|
|
30,000
|
|
Total
|
1,741,714
|
|
2,597,292
|
|
5,748,786
|
|
—
|
|
4,582,888
|
|
Executive Compensation Tables
|
Michael K. Simonte
|
For Good
Reason Resignation ($) |
|
Without
Cause Termination ($) |
|
Disability
Retirement
($)
|
|
Retirement
($)
|
|
Termination Upon a Change in
Control (1)
($)
|
|
Compensation:
|
|
|
|
|
|
|||||
Severance
|
1,500,000
(2)
|
|
1,500,000
(2)
|
|
—
|
|
—
|
|
1,500,000
(3)
|
|
Annual Incentive
|
1,860,000
(2)
|
|
1,860,000
(2)
|
|
360,000
(4)
|
|
360,000
(4)
|
|
1,860,000
(3)
|
|
Long Term Incentives:
|
|
|
|
|
|
|||||
RSUs
(5)
|
—
|
|
—
|
|
1,366,294
|
|
766,016
|
|
1,366,294
|
|
2017 Performance Share Awards
(6)
|
—
|
|
543,251
|
|
543,251
|
|
543,251
|
|
543,251
|
|
2018 Performance Share Awards
(7)
|
—
|
|
745,969
|
|
745,969
|
|
745,969
|
|
1,118,954
|
|
2019 Performance Share Awards
(8)
|
—
|
|
165,001
|
|
165,001
|
|
165,001
|
|
495,003
|
|
2019 Performance Unit Awards
(9)
|
—
|
|
247,500
|
|
247,500
|
|
247,500
|
|
742,500
|
|
|
|
|
|
|
|
|||||
Other Benefits:
|
|
|
|
|
|
|||||
Retirement Plans
(10)
|
315,790
|
|
315,790
|
|
449,588
|
|
246,571
|
|
315,790
|
|
SERP
(11)
|
3,124,093
|
|
3,124,093
|
|
3,124,093
|
|
3,124,093
|
|
3,124,093
|
|
Welfare Benefit
(12)
|
—
|
|
—
|
|
326,864
|
|
326,864
|
|
—
|
|
Executive Retirement Savings Plan
(13)
|
320,323
|
|
320,323
|
|
320,323
|
|
320,323
|
|
320,323
|
|
Deferred Compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Health Care
(14)
|
40,255
|
|
40,255
|
|
—
|
|
—
|
|
40,255
|
|
Disability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Life Insurance
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Outplacement Services
(15)
|
30,000
|
|
30,000
|
|
—
|
|
—
|
|
30,000
|
|
Total
|
7,190,461
|
|
8,892,182
|
|
7,648,883
|
|
6,845,588
|
|
11,456,463
|
|
Gregory S. Deveson
|
For Good
Reason Resignation ($) |
|
Without
Cause Termination ($) |
|
Disability
Retirement (16)
($)
|
|
Retirement
($)
|
|
Termination Upon a Change in
Control (1)
($)
|
|
Compensation:
|
|
|
|
|
|
|||||
Severance
|
900,000
(17)
|
|
900,000
(17)
|
|
—
|
|
—
|
|
1,200,000
(18)
|
|
Annual Incentive
|
950,400
(17)
|
|
950,400
(17)
|
|
230,400
(4)
|
|
—
|
|
1,190,400
(18)
|
|
Long Term Incentives:
|
|
|
|
|
|
|||||
RSUs
(5)
|
—
|
|
—
|
|
764,789
|
|
—
|
|
764,789
|
|
2017 Performance Share Awards
(6)
|
—
|
|
429,410
|
|
429,410
|
|
—
|
|
429,410
|
|
2018 Performance Share Awards
(7)
|
—
|
|
351,436
|
|
351,436
|
|
—
|
|
527,154
|
|
2019 Performance Share Awards
(8)
|
—
|
|
88,002
|
|
88,002
|
|
—
|
|
264,007
|
|
2019 Performance Unit Awards
(9)
|
—
|
|
132,000
|
|
132,000
|
|
—
|
|
396,000
|
|
|
|
|
|
|
|
|||||
Other Benefits:
|
|
|
|
|
|
|||||
Retirement Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
SERP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Welfare Benefit
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Executive Retirement Savings Plan
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Deferred Compensation
(23)
|
82,467
|
|
82,467
|
|
82,467
|
|
—
|
|
82,467
|
|
Health Care
(19)
|
32,652
|
|
32,652
|
|
54,420
|
|
—
|
|
43,536
|
|
Disability
(20)
|
—
|
|
—
|
|
2,500,049
|
|
—
|
|
—
|
|
Life Insurance
(21)
|
—
|
|
—
|
|
11,939
|
|
—
|
|
—
|
|
Outplacement Services
(22)
|
20,000
|
|
20,000
|
|
—
|
|
—
|
|
30,000
|
|
Total
|
1,985,519
|
|
2,986,367
|
|
4,644,912
|
|
—
|
|
4,927,763
|
|
Executive Compensation Tables
|
Norman Willemse
|
For Good
Reason Resignation ($) |
|
Without
Cause Termination ($) |
|
Disability
Retirement
($)
|
|
Retirement
($)
|
|
Termination Upon a Change in
Control (1)
($)
|
|
Compensation:
|
|
|
|
|
|
|||||
Severance
|
862,500
(17)
|
|
862,500
(17)
|
|
—
|
|
—
|
|
1,150,000
(18)
|
|
Annual Incentive
|
910,800
(17)
|
|
910,800
(17)
|
|
220,800
(4)
|
|
220,800
(4)
|
|
1,140,800
(18)
|
|
Long Term Incentives:
|
|
|
|
|
|
|||||
RSUs
(5)
|
—
|
|
—
|
|
660,567
|
|
363,136
|
|
660,567
|
|
2017 Performance Share Awards
(6)
|
—
|
|
249,116
|
|
249,116
|
|
249,116
|
|
249,116
|
|
2018 Performance Share Awards
(7)
|
—
|
|
351,436
|
|
351,436
|
|
351,436
|
|
527,154
|
|
2019 Performance Share Awards
(8)
|
—
|
|
84,337
|
|
84,337
|
|
84,337
|
|
253,011
|
|
2019 Performance Unit Awards
(9)
|
—
|
|
126,500
|
|
126,500
|
|
126,500
|
|
379,500
|
|
|
|
|
|
|
|
|||||
Other Benefits:
|
|
|
|
|
|
|||||
Retirement Plans
(10)
|
371,955
|
|
371,955
|
|
263,329
|
|
356,091
|
|
371,955
|
|
SERP
(11)
|
1,424,259
|
|
1,424,259
|
|
1,424,259
|
|
1,424,259
|
|
1,424,259
|
|
Welfare Benefit
(12)
|
—
|
|
—
|
|
261,328
|
|
261,328
|
|
—
|
|
Executive Retirement Savings Plan
(13)
|
203,050
|
|
203,050
|
|
203,050
|
|
203,050
|
|
203,050
|
|
Deferred Compensation
(23)
|
108,986
|
|
108,986
|
|
108,986
|
|
108,986
|
|
108,986
|
|
Health Care
(19)
|
39,691
|
|
39,691
|
|
—
|
|
—
|
|
52,921
|
|
Disability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Life Insurance
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Outplacement Services
(22)
|
20,000
|
|
20,000
|
|
—
|
|
—
|
|
30,000
|
|
Total
|
3,941,241
|
|
4,752,630
|
|
3,953,708
|
|
3,749,039
|
|
6,551,319
|
|
(1)
|
For Mr. Dauch and Mr. Simonte, amounts reflect CIC benefits under their employment agreements and outstanding LTI awards as of December 31, 2019. For other NEOs, amounts reflect payments and benefits under the CIC Plan and outstanding LTI awards as of December 31, 2019.
|
(2)
|
Under their employment agreements, Mr. Dauch and Mr. Simonte are entitled to receive two years’ base salary and target bonus and accrued and unpaid compensation upon resignation for good reason or termination without cause. The annual bonus amount for each reflects the 2019 award paid in March 2020 and the 2019 target annual bonus for two years.
|
(3)
|
Upon termination without cause or resignation for good reason on or within two years following a CIC, Mr. Dauch and Mr. Simonte are entitled to a multiple of base salary and annual bonus (Mr. Dauch, three times; Mr. Simonte, two times) plus a target annual bonus prorated through termination. The severance amount for each reflects base salary as of December 31, 2019 times the applicable multiple. The annual bonus amount for each reflects the 2019 award paid in March 2020 and the 2019 target bonus times the applicable multiple.
|
(4)
|
In the event of disability or retirement, AAM’s Incentive Compensation Program for Executive Officers provides a pro-rata award payout through the date of disability or retirement. Amounts reflect 2019 awards payable in March 2020 under a disability termination event and also upon retirement for Mr. Dauch, Mr. Simonte and Mr. Willemse.
|
(5)
|
Outstanding RSUs vest upon termination of employment due to death, disability or upon a CIC. The value reflects the number of RSUs multiplied by the closing price of AAM common stock on December 31, 2019. In the event of retirement, RSUs vest pro-rata based on continued employment through retirement. In the event of retirement for Mr. Dauch, Mr. Simonte and Mr. Willemse, the amounts reflect the applicable pro-rata portion for each of their 2017-2019 RSU awards multiplied by the closing price of AAM common stock on December 31, 2019.
|
(6)
|
The 2017 performance share awards payable in the event of a disability, retirement, termination without cause or upon a CIC are based on target performance and the pro-rata portion of employment during the performance period. Amounts reflect actual shares paid in March 2020 based on performance through December 31, 2019 multiplied by the closing price of AAM stock on December 31, 2019.
|
(7)
|
The 2018 performance share awards payable in the event of a disability, retirement or termination without cause are based on target performance and reflect the pro-rata portion of employment during the performance period. As of December 31, 2019, approximately 2/3 of the performance period has lapsed. Amounts reflect pro-rata awards at the target amount of shares multiplied by the closing price of AAM common stock on December 31, 2019. The 2018 performance share awards vest in full upon termination without cause or resignation for good reason on or within two years following a CIC.
|
(8)
|
The 2019 performance share awards payable in the event of a disability, retirement or termination without cause are based on target performance and reflect the pro-rata portion of employment during the performance period. As of December 31, 2019, approximately 1/3 of the performance period has lapsed. Amounts reflect pro-rata awards at the target amount of
|
Executive Compensation Tables
|
(9)
|
The 2019 performance unit awards payable in the event of a disability, retirement or termination without cause are based on target performance and reflect the pro-rata portion of employment during the performance period. As of December 31, 2019, approximately 1/3 of the performance period has lapsed. Amounts reflect pro-rata awards at target. The 2019 performance unit awards vest in full upon termination without cause or resignation for good reason on or within two years following a CIC.
|
(10)
|
Reflects a joint and survivor benefit payable monthly.
|
(11)
|
Reflects the present value of the frozen SERP benefit calculated assuming a lump sum payment for Mr. Dauch, Mr. Simonte and Mr. Willemse.
|
(12)
|
Reflects welfare benefits assuming retirement under the retiree welfare plan.
|
(13)
|
Amounts reflect account balances in the ERSP as of December 31, 2019 for Mr. Dauch, Mr. Simonte and Mr. Willemse based on their eligibility for retirement.
|
(14)
|
Under their employment agreements, Mr. Dauch and Mr. Simonte are entitled to two years' health care benefits upon resignation for good reason or termination without cause. Upon termination on or within two years following a CIC, Mr. Dauch (three years) and Mr. Simonte (two years) are also entitled to health care benefits.
|
(15)
|
Under their employment agreements, Mr. Dauch ($50,000) and Mr. Simonte ($30,000) are entitled to reimbursement for outplacement services upon termination without cause, resignation for good reason or termination of employment on or within two years following a CIC.
|
(16)
|
Assumes total and permanent disability on December 31, 2019. Because Mr. May and Mr. Deveson are not eligible to retire on December 31, 2019, the amounts reflect disability payments until retirement at 65 or for health and life insurance for 30 months (6 months of short-term disability and 24 months of long-term disability).
|
(17)
|
Under the Severance Plan, Mr. May, Mr. Deveson and Mr. Willemse are entitled to a cash payment equal to 1.5 times annual base salary and annual bonus upon termination without cause or resignation for good reason plus a prorated annual bonus based on actual performance. The annual bonus amount is based on the target annual bonus for the year of termination. The severance amount reflects base salary as of December 31, 2019 times the severance multiplier of 1.5. The annual bonus amount reflects the 2019 award paid in March 2020 and the 2019 target annual bonus times the multiplier of 1.5.
|
(18)
|
Under the CIC Plan, Mr. May, Mr. Deveson and Mr. Willemse are entitled to a cash payment equal to two times annual base salary and annual bonus upon termination without cause or resignation for good reason on or within two years following a CIC. The annual bonus is based on the greater of the target annual bonus for the year of the CIC or for the year of termination. The severance amount reflects base salary as of December 31, 2019 for two years. The annual bonus amount reflects the 2019 award paid in March 2020 and the 2019 target annual bonus for two years.
|
(19)
|
Under the Severance Plan, Mr. May, Mr. Deveson and Mr. Willemse are entitled to 1.5 years of health care benefits upon termination without cause or resignation for good reason and two years' health care benefits upon termination without cause or resignation for good reason on or within two years following a CIC. In the event of disability, Mr. May and Mr. Deveson would receive health care benefits for a maximum of 30 months (6 months of short-term disability and 24 months of long-term disability).
|
(20)
|
Reflects benefits equal to 100% of base salary for the first year of disability and 60% of base salary until retirement for Mr. May and Mr. Deveson.
|
(21)
|
Reflects basic and supplemental life insurance benefits through date of termination (30 months from date of disability) for Mr. May and Mr. Deveson.
|
(22)
|
Under the CIC Plan, Mr. May, Mr. Deveson and Mr. Willemse are entitled to reimbursement of up to $30,000 of outplacement services upon termination of employment without cause or resignation for good reason on or within two years of a CIC. Under the Severance Plan, each are entitled to reimbursement of up to $20,000 of outplacement services upon termination of employment without cause or resignation for good reason.
|
(23)
|
Amounts reflect account balances in the EDC Plan as of December 31, 2019.
|
CEO Pay Ratio
|
Ratification of Independent Registered Public Accounting Firm
|
Proposal 3: Ratification of Appointment of Independent
|
Registered Public Accounting Firm for 2020
|
þ
|
The Board unanimously recommends a vote FOR ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2020.
|
|
Pre-Approval Policy and Auditor Fees
|
Policy for Pre-Approval of Audit and
Non-Audit Services
|
Independent Registered Public Accounting Firm's Fees
|
|
December 31,
|
|
||||
|
2019
|
|
2018
|
|
||
Audit Fees
(1)
|
$
|
4,838,194
|
|
$
|
6,118,093
|
|
Audit Related Fees
(2)
|
5,450
|
|
221,914
|
|
||
Tax Fees
(3)
|
416,200
|
|
700,000
|
|
||
All Other Fees
(4)
|
107,100
|
|
79,500
|
|
||
Total
|
$
|
5,366,944
|
|
$
|
7,119,507
|
|
(1)
|
Audit fees include fees for the audit of annual consolidated financial statements and internal controls over financial reporting, reviews of quarterly consolidated financial statements, statutory audits, consents and comfort letters, reviews of documents filed with the SEC and other services related to SEC matters.
|
(2)
|
Audit-related fees are for services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements.
|
(3)
|
Fees for tax services in 2019 and 2018 consisted of fees for tax compliance, tax advice and tax planning services.
|
(4)
|
Other fees for 2019 are for human capital advisory services; 2018 fees are for other non-tax related advisory and consulting services.
|
Report of the Audit Committee
|
Report of the Audit Committee
|
Voting and Meeting Information
|
Additional Information
|
–
|
In person
— attending the annual meeting and casting a ballot.
|
–
|
By mail
— using the proxy and/or voting instruction card provided.
|
–
|
By telephone or over the Internet
— following the instructions on your notice card, proxy and/or voting instruction card.
|
–
|
revoking it by written notice to AAM’s Secretary at the address on the notice;
|
–
|
voting in person at the annual meeting; or
|
–
|
delivering a later-dated proxy vote by mail, telephone or over the internet.
|
Voting and Meeting Information
|
–
|
be counted as present for purposes of determining whether there are enough votes to establish a quorum;
|
–
|
have no effect on the outcome of the election of directors; or
|
–
|
count as a vote against any other proposal to be considered at the annual meeting.
|
Additional Information
|
Annual Report
|
Electronic Delivery of Proxy Materials
|
–
|
following the instructions provided on your proxy card, voter instruction form, or notice
|
–
|
going to
www.envisionreports.com/axl
and following the instructions provided
|
2021 Stockholder Proposals and Nominations
|
Additional Information
|
Cost of Solicitation
|
Appendix A - Non-GAAP Reconciliation
|
Appendix A
|
2019 Annual Incentive Performance Metric
|
Twelve Months Ended
|
|
|
|
December 31, 2019
|
|
|
Earnings before interest expense, income taxes and depreciation and amortization (EBITDA) and Adjusted EBITDA:
|
(in millions)
|
|
|
Net income
|
$
|
(484.1
|
)
|
Interest expense
|
217.3
|
|
|
Income tax expense
|
(48.9
|
)
|
|
Depreciation and amortization
|
536.9
|
|
|
EBITDA
|
$
|
221.2
|
|
Restructuring and acquisition-related costs
|
57.8
|
|
|
Debt refinancing and redemption costs
|
8.4
|
|
|
Sale of U.S. iron castings impairment and loss on sale
|
246.3
|
|
|
Goodwill impairment
|
440.0
|
|
|
Pension settlement
|
9.8
|
|
|
Non-recurring items:
|
|
||
Gain on purchase of business
|
(10.8
|
)
|
|
Impact of GM work stoppage
(1)
|
84.5
|
|
|
Impact of financial performance for divestiture not included in target
(2)
|
0.7
|
|
|
Other
|
(2.4
|
)
|
|
Adjusted EBITDA*
|
$
|
1,055.5
|
|
(1)
|
Adjustment reflects the unfavorable impact of a work stoppage at our largest customer in the second half of 2019.
|
(2)
|
AAM sold the U.S. iron casting operations in December 2019. Prior to that sale, in February 2019, performance goals for our annual incentive plan were established. As a result of this timing, full-year EBITDA associated with the sold business was included in the 2019 annual incentive target. This adjustment reflects the impact of the budgeted EBITDA performance for the portion of the year that has been excluded from actual EBITDA results. Considering the impact of this adjustment, actual adjusted EBITDA reflects EBITDA of this business through the closing date of December 16, 2019.
|
Appendix A - Non-GAAP Reconciliation
|
2017 - 2019 Long-term Incentive Performance Metric
|
Twelve Months Ended
|
|
|||||||||
|
December 31,
|
|
|||||||||
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Earnings before interest expense, income taxes and depreciation and amortization (EBITDA) and Adjusted EBITDA:
|
(in millions)
|
|
|||||||||
Net income
|
$
|
(484.1
|
)
|
|
$
|
(56.8
|
)
|
|
$
|
337.5
|
|
Interest expense
|
217.3
|
|
|
216.3
|
|
|
195.6
|
|
|||
Income tax expense
|
(48.9
|
)
|
|
(57.1
|
)
|
|
2.5
|
|
|||
Depreciation and amortization
|
536.9
|
|
|
528.8
|
|
|
428.5
|
|
|||
EBITDA
|
$
|
221.2
|
|
|
$
|
631.2
|
|
|
$
|
964.1
|
|
Restructuring and acquisition-related costs
|
57.8
|
|
|
78.9
|
|
|
110.7
|
|
|||
Debt refinancing and redemption costs
|
8.4
|
|
|
19.4
|
|
|
3.5
|
|
|||
Sale of U.S. iron castings impairment and loss on sale
|
246.3
|
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
440.0
|
|
|
485.5
|
|
|
—
|
|
|||
Pension settlement
|
9.8
|
|
|
—
|
|
|
3.2
|
|
|||
Gain on sale of business
|
—
|
|
|
(15.5
|
)
|
|
—
|
|
|||
Non-recurring items:
|
|
|
|
|
|
||||||
Gain on purchase of business
|
(10.8
|
)
|
|
—
|
|
|
—
|
|
|||
Impact of GM work stoppage
(1)
|
84.5
|
|
|
—
|
|
|
—
|
|
|||
Gain on settlement of capital lease
|
—
|
|
|
(15.6
|
)
|
|
—
|
|
|||
Acquisition-related fair value inventory adjustment
|
—
|
|
|
—
|
|
|
24.9
|
|
|||
Other
|
(2.4
|
)
|
|
—
|
|
|
(3.7
|
)
|
|||
Adjusted EBITDA
|
$
|
1,054.8
|
|
|
$
|
1,183.9
|
|
|
$
|
1,102.7
|
|
|
|
|
|
|
|
||||||
Net sales, as reported
|
$
|
6,530.9
|
|
|
$
|
7,270.4
|
|
|
$
|
6,266.0
|
|
Estimated reduced sales due to GM work stoppage
(1)
|
242.6
|
|
|
—
|
|
|
—
|
|
|||
Adjusted Sales
|
$
|
6,773.5
|
|
|
$7,270.4
|
|
$6,266.0
|
||||
|
|
|
|
|
|
||||||
Adjusted EBITDA margin
|
15.6
|
%
|
|
16.3
|
%
|
|
17.6
|
%
|
|||
|
|
|
|
|
|
||||||
3-year cumulative adjusted EBITDA margin
|
16.5
|
%
|
|
—
|
|
|
—
|
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
No Customers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|