BHE DEF 14A Report ended May 13, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒ Filed by a party other than the Registrant ☐

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☐		Preliminary Proxy Statement
☐		Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Pursuant to §240.14a-12

BENCHMARK ELECTRONICS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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BENCHMARK ELECTRONICS, INC.

56 South Rockford Drive

Tempe, Arizona 85281

NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON WEDNESDAY, MAY 13, 2020

Date: Wednesday, May 13, 2020 Time: 8:00 a.m. local time Location: Benchmark Electronics, Inc. 56 South Rockford Drive Tempe, Arizona 85281*						AGENDA: 1.  to elect nine directors to serve on the Board of Directors until the 2021 annual meeting of shareholders and until their successors are duly elected and qualified; 2.  to approve the compensation of the Company’s named executive officers; 3.  to ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020; and 4.  to transact such other business as may properly come before the meeting or any adjournment thereof.

RECORD DATE

Shareholders of record of Benchmark Electronics, Inc. (the “Company” ) at the close of business on March 20, 2020 are entitled to notice of and to vote at the meeting and any adjournment thereof. You are cordially invited to attend the meeting.

By order of the Board of Directors,

/s/ Stephen J. Beaver

Stephen J. Beaver

Secretary

Tempe, Arizona

March 30, 2020

*

We are actively monitoring the public health and travel safety concerns relating to the coronavirus (COVID-19) and the advisories or mandates that federal, state, and local governments, and related agencies, may issue. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will announce any additional or alternative arrangements for the meeting, which may include a change of venue or holding the meeting solely by means of remote communication. Please monitor our website at www.bench.com under “Investors,” as well as our filings with the SEC, for updated information. If you are planning to attend our meeting, please check our website the week of the meeting. As always, we encourage you to vote your shares prior to the annual meeting.

Your proxy is revocable at any time before it is voted at the meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 13, 2020:

THE PROXY MATERIALS FOR THE ANNUAL MEETING, INCLUDING THIS PROXY STATEMENT AND THE COMPANY’S 2019 ANNUAL REPORT TO SHAREHOLDERS, ARE AVAILABLE AT WWW.BENCH.COM UNDER “INVESTORS” OR AS PROVIDED IN THE NOTICE.

TABLE OF CONTENTS

INTRODUCTION			1
PROPOSAL 1 — ELECTION OF DIRECTORS			3
COMPENSATION DISCUSSION AND ANALYSIS			16
Philosophy and Objectives			16
Role of Compensation Committee			18
Role of Management			18
Evaluation of Say-on-Pay Advisory Vote			18
Competitive Market Review			18
Timing of Compensation Decisions			19
2019 Compensation			19
Base Salary Compensation			19
Annual Cash-Based Incentive Compensation			19
Long-Term Equity-Based Incentive Program			20
Deferred Compensation Benefits			21
Retirement Benefits			21
Perquisites and Personal Benefits			21
Other Matters			21
Share Ownership Guidelines			21
Analysis of Compensation Risk			22
Certain Tax Considerations			22
Hedging, Short Sales and Pledging Policies			22
COMPENSATION COMMITTEE REPORT			23
COMPENSATION TABLES AND NARRATIVES			24
PROPOSAL 2 — ADVISORY VOTE ON COMPENSATION OF THE COMPANY’S NAMES EXECUTIVE OFFICERS			34
COMMON SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			35
PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			36
AUDIT COMMITTEE REPORT			37
EXPENSES OF SOLICITATION			39
DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS			39
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			39
FORM 10-K			40
OTHER MATTERS			40

Benchmark Electronics, Inc. • 2020 Proxy Statement				i

BENCHMARK ELECTRONICS, INC.

56 South Rockford Drive

Tempe, AZ 85281

(623) 300-7000

March 30, 2020

PROXY STATEMENT FOR 2020 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON WEDNESDAY, MAY 13, 2020

INTRODUCTION

This Proxy Statement is being furnished in connection with the solicitation of proxies by the Company’s Board of Directors (the “ Board ”) for use at the Company’s 2020 annual meeting of shareholders to be held on Wednesday, May 13, 2020 beginning at 8:00 a.m. local time (Arizona), and any adjournment thereof (the “ Meeting ”) for the purposes set forth in this Proxy Statement.

Pursuant to rules adopted by the Securities and Exchange Commission (“ SEC ”), we are making this Proxy Statement and our 2019 Annual Report to Shareholders available to shareholders electronically on the Internet. On or about March 30, 2020, we began mailing a Notice of Internet Availability of Proxy Materials (“ Notice ”) to our shareholders with instructions on how to access the proxy materials online or request a printed copy of the materials. We believe this electronic process will expedite your receipt of the proxy materials and reduce the cost and environmental impact of the Meeting.

Proxies

Proxies properly submitted by internet, telephone or otherwise properly executed and received by the Company before or at the Meeting and not revoked will be voted in accordance with the directions set forth therein. If no direction is made, a proxy that is properly submitted and received by the Company and not revoked will be voted:

•

FOR the election of all nominees for director named herein to serve on the Board until the 2021 annual meeting of shareholders and until their successors are duly elected and qualified;

•

FOR the resolution approving the named executive officer compensation (“ Say-on-Pay ”) for 2019 as disclosed in this Proxy Statement; and

•

FOR the ratification of the appointment of KPMG LLP (“ KPMG ”) as the independent registered public accounting firm of the Company for the year ending December 31, 2020.

The proxy also confers on the persons named therein discretionary authority to vote with respect to any other matter that properly comes before the Meeting.

Proxies may be revoked by written notice received by the Company’s Secretary at any time before they are voted at the Meeting by delivering a signed notice of revocation to the Secretary, or a later dated signed proxy, or by attending the Meeting and voting in person by ballot.

Shareholders Entitled to Vote

Shareholders of record at the close of business on March 20, 2020 (“ Record Date ”) are entitled to notice of and to vote at the Meeting. As of March 20, 2020, there were 36,415,546 shares of common stock, $0.10 par value per share (“ Common Shares ”), issued, outstanding and entitled to vote at the Meeting. Each Common Share is entitled to one vote on all matters that may properly come before the Meeting. However, shares held at your broker, bank or other nominee for which you do not submit voting instructions will not be voted and will be deemed not entitled to vote with regard to certain proposals.

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INTRODUCTION

How to Vote If You Are a Registered Holder of Common Stock

If you are a registered holder of shares, you may vote them either by proxy as set forth in the Notice and/or proxy card in advance of the Meeting or by voting in person at the Meeting. By submitting a proxy, you are legally authorizing another person to vote your shares on your behalf.

Attending the Meeting

Only holders of our Common Shares as of the close of business on the Record Date, which was March 20, 2020, or their duly appointed proxies, may attend the Meeting. If you hold your shares through a broker, bank or other nominee, you will be required to show the Notice or voting instructions form you received from your broker, bank or other nominee or a copy of a statement (such as a brokerage statement) from your broker, bank or other nominee reflecting your stock ownership as of the Record Date in order to be admitted to the Meeting. All attendees must bring a government-issued photo ID to gain admission to the Meeting. Please note that recording devices, photographic equipment, large bags and packages will not be permitted in the meeting room.*

How to Vote If You Hold Your Shares in “Street Name”

Most shareholders do not have their shares registered directly with the Company in their name; instead their shares are held in their brokerage account or by a bank or other custodian who votes the shares according to the instructions submitted to them by the beneficial owner of the shares. If you do not submit voting instructions to your broker, bank or other nominee, they will not be permitted to vote your shares on any proposal, unless the proposal constitutes a “discretionary” item and your broker, bank or other nominee is a member of the New York Stock Exchange (“ NYSE ”) and permitted by NYSE rules to vote on “discretionary” items, such as the ratification of the Company’s independent registered public accounting firm. The election of directors and the Say-on-Pay vote are “nondiscretionary” items. Without your instructions, your shares may be represented at the Meeting, but as to nondiscretionary items, they may not be voted, resulting in “broker non-votes” on those items. Because they cannot be voted on those matters, they are not deemed to be “entitled to vote” on those matters and will not be included in the calculation of voting results for those matters (neither in the numerator nor the denominator).

Accordingly, we urge you to promptly give instructions to your broker to vote FOR each of the proposals contained in this Proxy Statement by using the voting instruction card provided to you by the custodian. Please note that if you intend to vote your street name shares in person at the Meeting, you must obtain a “legal proxy” from your broker, bank or other nominee and present it at the Meeting.

Quorum, Voting Requirements and Other Matters

The presence at the Meeting, in person or represented by proxy, of the holders of a majority of the outstanding Common Shares is necessary to constitute a quorum for the conduct of business. Common Shares represented by a proxy that is properly submitted by internet or telephone, or otherwise properly completed, signed and returned, will be counted as present at the Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as withholding authority, casting a vote or abstaining or lacks instructions as to any “discretionary” item.

All matters specified in the notice of the Meeting require the approval of the affirmative vote of a majority of the outstanding Common Shares entitled to vote and present, in person or represented by proxy, at the Meeting. An abstention on any matter, or withholding authority to vote with respect to the election of directors, will have the effect of a vote against the proposal. Proxies granted by shareholders holding their shares in “street name” to their broker, bank or other nominee and left uninstructed with respect to any “nondiscretionary” items are deemed to be not “entitled to vote” on those items, as “broker non-votes”, and will not be included in the calculation of voting results for those matters (neither in the numerator nor the denominator).

An Inspector of Election appointed by the Company will tabulate votes at the Meeting.

The Board is not aware of any matters to come before the Meeting other than those referred to in this Proxy Statement. If any other matter properly comes before the Meeting, the proxies will be voted in accordance with the discretion of the person or persons voting the proxies.

Voting Results

The preliminary voting results may be announced at the Meeting. The final voting results will be announced in a Current Report on Form 8-K filed with the SEC within four business days after the Meeting.

*

We are actively monitoring the public health and travel safety concerns relating to the coronavirus (COVID-19) and the advisories or mandates that federal, state, and local governments, and related agencies, may issue. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will announce any additional or alternative arrangements for the meeting, which may include a change of venue or holding the meeting solely by means of remote communication. Please monitor our website at www.bench.com under “Investors,” as well as our filings with the SEC, for updated information. If you are planning to attend our meeting, please check our website the week of the meeting. As always, we encourage you to vote your shares prior to the annual meeting.

2				Benchmark Electronics, Inc. • 2020 Proxy Statement

PROPOSAL 1 — ELECTION OF DIRECTORS

Nominees for Election

The following table sets forth information with respect to each nominee for election as a director of the Company nominated by the Board. Each nominee was proposed to the Board for election by its Nominating/Governance Committee, and the Board determined to nominate these candidates for election by the shareholders at the Meeting. The Board has reviewed the qualifications of each nominee and has determined that, other than Mr. Benck, each satisfies the (i) independence standards promulgated by the NYSE and applicable regulations under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), (ii) “non-employee director” standards set forth in such regulations, and (iii) “outside director” requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ” ), and applicable regulations. The information as to age, principal occupation and directorships has been furnished by the nominees.

✓		The Board unanimously recommends a vote FOR the election of each of the following nominees.

Name		Age		Principal Occupation		Director Since
David W. Scheible		63		Chairman of the Board of the Company, Retired Chairman and Chief Executive Officer of Graphic Packaging Holding Company, Current Operating Advisor to the funds of Clayton, Dubilier & Rice		2011
Bruce A. Carlson		70		Retired General, United States Air Force		2017
Anne De Greef-Safft		57		Strategic Consultant with Windjammer Capital Investors		2019
Douglas G. Duncan		69		Retired President and Chief Executive Officer of FedEx Freight Corporation		2006
Robert K. Gifford		62		President and Chief Operating Officer of BeachBody LLC		2016
Kenneth T. Lamneck		65		President and Chief Executive Officer of Insight Enterprises, Inc.		2013
Jeffrey S. McCreary		63		Retired Interim President and Chief Executive Officer of Isola Group		2016
Merilee Raines		64		Retired Chief Financial Officer of IDEXX Laboratories, Inc.		2018
Jeffrey W. Benck		54		President and Chief Executive Officer of the Company		2019

Board Tenure, Skills and Qualifications

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Election Procedures; Term

Directors will be elected by the affirmative vote of the holders of a majority of the outstanding Common Shares entitled to vote and present, in person or represented by proxy, at the Meeting. Unless authority to vote for the election of directors is withheld as to any or all of the nominees, all Common Shares represented by proxy will be voted for the election of the nominees. If the authority to vote for the election of directors is withheld as to any but not all of the nominees, all Common Shares represented by any such proxy will be voted for the election of the nominees as to whom such authority is not withheld. If a nominee becomes unavailable to serve for any reason before the election, the shares represented by proxy will be voted for such other person, if any, as may be designated by the Board. The Board, however, has no reason to believe that any nominee will be unavailable to serve as a director.

Upon completion of the Meeting, the Board will consist of nine members. Any vacancy on the Board occurring after the election may be filled (1) by election at any annual or special meeting of the shareholders called for that purpose, or (2) by a majority of the remaining directors. A director elected to fill a vacancy will be elected for the unexpired portion of the term of his or her predecessor.

All directors will be elected to serve until the 2021 annual meeting of shareholders and until their successors are duly elected and qualified.

✓		The Board of Directors recommends a vote FOR the election of each of the nominees to the Board of Directors.

Executive Officers

The officers of the Company are elected by, and serve at the discretion of, the Board. The executive officers of the Company are Jeffrey W. Benck, Roop K. Lakkaraju, Michael D. Buseman, Scott M. Hicar, Jan M. Janick, Lisa K. Weeks, Stephen J. Beaver, Rhonda R. Turner and Robert B. Crawford. See “Election of Directors — Nominees for Election” for information regarding Mr. Benck’s age, Company service and business experience.

ROOP K. LAKKARAJU    | Executive Vice President and Chief Financial Officer

Roop K. Lakkaraju , 49, has been Executive Vice President and Chief Financial Officer since January 2018. From February 2017 to January 2018, he served as Chief Financial Officer of Maana, Inc., an enterprise software company that has pioneered an Artificial Intelligence-driven knowledge platform. From October 2013 to February 2017, he served as Chief Operating Officer and Chief Financial Officer of Support.com (NASDAQ:SPRT), a provider of cloud-based software and services for technology support. From July 2011 to October 2013, he was Chief Financial Officer of Quantros, Inc., a provider of enterprise SaaS-based solutions and information services that advance healthcare quality and safety performance. Prior to that he held executive financial and operational roles at 2Wire, Solectron Corporation (NYSE:SLR), and Safeguard Scientifics (NYSE:SFE). He began his career in 1993 as an auditor with Grant Thornton before joining PricewaterhouseCoopers in their Audit and Business Advisory Services. Mr. Lakkaraju holds a B.S. in Business Administration from San Jose State University.

MICHAEL D. BUSEMAN    | Executive Vice President of Global Operations

Michael D. Buseman , 58, has been Executive Vice President of Global Operations since July 2017. He served as Chief Global Logistics and Operations Officer of Avnet, Inc., a global electronics components company, from November 2013 to July 2017. From 2007 until November 2013, he was Executive Vice President of Global Manufacturing Operations of Plexus Corp., having served as its Vice President of Global Technology, Quality and Facilities since 2006. Mr. Buseman previously served as Vice President and General Manager of Operations of Celestica, Inc., as well as its Director, Operations, Engineering, and Technology. He began his career in 1983 with Unisys, Inc., holding positions of increasing responsibility, including Principal Process Engineer and Director of Advanced Design Manufacturing Services. Mr. Buseman holds a BS in Mechanical Engineering from South Dakota State University and an MBA from the University of St. Thomas, Minnesota.

SCOTT M. HICAR    | Vice President of Business Process Improvement and Chief Information Officer

Scott M. Hicar , 53, has been Vice President of Business Process Improvement and Chief Information Officer since September 2017. From 2015 to 2017 he worked for TwentyEighty, a corporate learning and performance management company focused on sales growth, leadership and strategy execution as CIO. From 2009 to 2014, he was Senior Vice President and Chief Information Officer for DigitalGlobe, a public digital information products company focused on Aerospace and Defense. Prior to that, from 2006 to 2008, Mr. Hicar was Senior Vice President and CIO at Solectron Corporation, an electronics manufacturing services provider. From 1997 to 2006, he served as CIO for Maxtor Corporation, a public provider of storage products. Mr. Hicar has more than 25 years of technology leadership experience in transformational roles, and previously held management positions in the Supply Chain/ERP practice at Price Waterhouse, as well as serving as an internal consultant to chemical, pharmaceutical, and agriculture businesses within ICI Americas. Mr. Hicar received his Bachelor’s degree in business administration, with a concentration in management information systems, from Ohio University.

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JAN M. JANICK    | Chief Technology Officer and Vice President of Global Engineering

Jan M. Janick, 61, has been Chief Technology Officer and Vice President of Global Engineering since July 2015. He served as Vice President of FlashSystems and Technology at IBM from 2012 to 2015, where he led the acquisition of Texas Memory Systems and the development and delivery of the FlashSystems product line of Solid State flash memory storage systems. In prior roles at IBM, he led the development of a number of key products, including IBM’s x86-based servers and PureFlex systems. He was Vice President of Operations and Software Development at Lenovo, a multinational technology company, from 2005 to 2006. Mr. Janick serves on the Board of Directors for both the Arizona Technology Council and Arizona State University’s School of Engineering. Mr. Janick holds a BS and MS in Electrical Engineering from the University of Wisconsin-Madison.

LISA K. WEEKS    | Vice President of Strategy and Investor Relations

Lisa K. Weeks , 52, has been Vice President of Strategy and Investor Relations since 2012. She joined the Company in August 1999 and during her tenure has held numerous leadership positions in account management, operations and business development. Prior to joining the Company in 1999, she worked for AVEX Electronics from 1997 to 1999 and for Teledyne Brown from 1989 to 1997. Ms. Weeks holds both a Bachelor’s degree in aerospace engineering from Auburn University and a Master’s degree in business administration from Vanderbilt University.

STEPHEN J. BEAVER    | Vice President, General Counsel & Secretary

Stephen J. Beaver, 48 , has served as Secretary, Vice President and General Counsel of the Company since August 2018. Prior to joining Benchmark, Mr. Beaver served as Senior Vice President and General Counsel for Aspect Software, Inc., an enterprise software company, from April 2013 to August 2018. Prior to Aspect, Mr. Beaver was with TPI Composites, Inc., where held the post of General Counsel and Corporate Secretary from September 2008 until April 2013. Prior to TPI Composites, Mr. Beaver was Vice President, General Counsel & Secretary for Swift Transportation Company, Inc. until September 2008. Earlier in his career, Mr. Beaver practiced in the areas of labor and employment law and commercial litigation at the international law firm of Bryan Cave Leighton Paisner LLP. Mr. Beaver received a Bachelor’s Degree in Communications from the University of Arizona, in 1993. He received a Juris Doctorate from Marquette University Law School, Milwaukee, Wisconsin, in 1998.

RHONDA R. TURNER    | Chief Human Resources Officer

Rhonda R. Turner, 46, has been Chief Human Resources Officer of the Company since July 2019. Ms. Turner brings over 20 years of experience into this role and most recently served as senior vice president of human resources for Universal Technical Institute, Inc. from 2006 to July 2019. Prior to that, she held various human resources leadership roles at leading companies such as ConocoPhillips, Circle K and Main Street Restaurant Group, a TGI Friday’s franchisee. She holds a Bachelor of Science in management from the W.P. Carey School of Business at Arizona State University. Ms. Turner is a licensed analyst in Predictive Index and holds her Certified Compensation Professional (CCP) designation from World at Work as well as multiple certifications in Korn Ferry’s Leadership Architect and Interview Architect systems.

ROBERT B. CRAWFORD    | Chief Revenue Officer

Robert Crawford, 56 , has been Chief Revenue Officer for the Company since July 2019. From 2015 until June 2019, Mr. Crawford served as Vice-President, Global Sales-Advanced Technology Solutions at Celestica, Inc. He served as Sr. Vice President of Worldwide Sales and Marketing for QLogic Corporation, from 2011 to 2014. Mr. Crawford held various leadership roles in leading companies, including Quantum Corporation and Dell Inc., from 1999 to 2011. Mr. Crawford holds a Bachelor of Science in mechanical engineering from Texas A&M University and an MBA from Pepperdine University.

Corporate Governance, Committee Charters, Shareholder Communications

The Company places integrity first and foremost, which has long been a part of our corporate identity. The Company’s practices reflect corporate governance compliant with existing standards of the NYSE and requirements of the SEC, as well as other best practices, including:

•

The Company’s Code of Conduct applies to all directors, officers and employees;

•

The Company has a system in place to encourage and facilitate confidential and anonymous reports of compliance concerns, including to the Audit Committee of the Board;

•

Executive officers are subject to a clawback policy relating to performance-based compensation earned during periods for which a financial restatement is required under SEC reporting rules;

•

Directors and executives are prohibited from pledging, hedging, selling short or otherwise engaging in speculative practices regarding the Company’s securities;

10				Benchmark Electronics, Inc. • 2020 Proxy Statement

PROPOSAL 1 — ELECTION OF DIRECTORS

•

All of our directors are independent, except for Mr. Benck who serves as Chief Executive Officer (the “ CEO ”);

•

The independent directors meet regularly without the presence of management;

•

The Board operates under a set of published corporate governance guidelines;

•

Any director that does not receive the affirmative vote of the holders of a majority of the outstanding Common Shares entitled to vote in the election of directors and represented, in person or by proxy, at any meeting during which an uncontested election occurs must tender his or her resignation to the Board for its consideration in accordance with the corporate governance guidelines;

•

Three members of the Board’s Audit Committee qualify as “audit committee financial experts” as defined by the SEC;

•

KPMG, our independent registered public accounting firm, reports directly to the Audit Committee; and

•

The Company’s internal audit group meets in private session with Audit Committee periodically during the year.

The Board will continue to enhance the Company’s governance practices as value-enhancing new ideas and best practices emerge. You may access our current committee charters, Code of Conduct and Corporate Governance Guidelines, on our website at www.bench.com under “Investors—Corporate Governance,” or obtain copies by writing to the Corporate Secretary at Benchmark Electronics, Inc., 56 South Rockford Drive, Tempe, Arizona 85281.

Shareholders and other interested parties may send communications about bona fide issues or questions to the Board, the nonemployee directors as a group or to individual directors, in each case, care of Benchmark Electronics, Inc., Attention: Stephen Beaver, 56 South Rockford Drive, Tempe, Arizona 85281.

Sustainability

Benchmark is committed to being “sustainable”. Being sustainable describes our long-term approach to industry best practices and emerging norms in the areas of environmental consciousness, social responsibility, ethics and corporate governance, and supply chain ecosystem responsibility. Our goal is to do our part in contributing to a more sustainable world, while providing value to our shareholders consistent with our business objectives. Our sustainability priorities include:

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PROPOSAL 1 — ELECTION OF DIRECTORS

Operation of Board of Directors and Committees, Attendance, Director Independence

We currently separate the roles of the Chairman of the Board and the CEO, who also serves as a member of the Board, to align the Chairman role with our independent Directors and to further enhance the independence of the Board from management. Our Chairman works closely with our CEO and General Counsel to set the agenda for meetings, facilitate information flow between the Board and management, and gain the benefit of the CEO’s Company-specific experience, knowledge, and expertise. The Board believes that this structure clarifies the individual roles and responsibilities of the CEO and the Chairman of the Board, streamlines decision-making and promotes accountability in the management of the Company.

The Board is responsible for establishing broad corporate policies, approving the strategic direction, setting capital allocation plans, and monitoring the Company’s overall performance. The Board’s primary responsibility is to oversee management and, in so doing, promote the best interests of the Company and its shareholders. The Board oversees the succession of key management employees, and the selection and appointment of the CEO and, subject to shareholder election, directors. It reviews and approves corporate objectives and strategies, and evaluates significant policies and proposed major commitments of corporate resources. It participates in decisions having a potential major economic impact on the Company. Management keeps the directors informed of Company activity through regular written and oral reports and through presentations at Board and committee meetings.

Directors are elected annually by the shareholders and hold office until their successors are duly elected and qualified. Our Amended and Restated Bylaws (the “ Bylaws ”) provide for a Board of Directors comprised of five to nine members as determined from time to time by the Board. The Board has set the number of current directors at nine. All current directors are nominees for election at the Meeting.

NYSE rules require the Company to have a majority of independent directors. No director qualifies as independent under the rules unless the Board affirmatively determines they have no material relationship with the Company or its subsidiaries—directly, or as a partner, shareholder or officer of an organization that has a relationship with the Company. In evaluating each director’s independence, the Board considers the NYSE rules as well as all facts and circumstances deemed relevant. As of the date of this Proxy Statement, the Board has determined that each nominee, other than Mr. Benck, our President and CEO, is independent. Clay C. Williams, a former director who was not nominated for re-election at the 2019 annual meeting of shareholders, was previously determined to be independent by the Board as well. The Board determined that no independent director had a material relationship with the Company or management, other than as a director or shareholder, and that none of the express disqualifications contained in the NYSE rules apply to any of them. In making this determination, the Board considered any relevant transaction, relationship and arrangement as required by the NYSE listing requirements.

The Board oversees an enterprise-wide approach to risk management. The Board seeks not only to understand the risks facing the Company and management’s approach to address them, but also actively decides on the levels of risk appropriate for the Company when designing and implementing its business strategy. In achieving this objective, the full Board participates in an annual enterprise risk assessment. In this process, risk is assessed throughout the business, focusing on six primary areas: financial, legal/compliance, operational/transactional, customer services/reputation, information technology/security and inherent (other) risks. In addition to reviewing risk with the full Board at least annually, the independent directors discuss risk management during non-management executive sessions led by the Chairman of the Board.

While the Board has the ultimate oversight responsibility for the risk management process, committees of the Board have also been entrusted with responsibility for risk management. In particular, the Audit Committee focuses on assessing and mitigating financial reporting risk, including internal controls, and receives an annual risk assessment report from the Company’s internal auditor and quarterly reports on identified risk areas. In setting compensation, the Compensation Committee also strives to create incentives that encourage a level of risk taking consistent with the Company’s business strategy.

The Board held five meetings during 2019. Each director attended at least 75% of the total meetings of the Board and committees on which they served during their tenure thereon. Mr. Benck, who served as President and CEO and director of the Company did not vote in committee meetings or participate in portions of Compensation Committee meetings that determined, or Board meetings that ratified, his compensation. The nonemployee directors regularly meet in executive session without members of management present, including the CEO. These sessions are typically held either before or after the Board’s regularly scheduled Board and committee meetings. Additional executive sessions can be scheduled at the request of the nonemployee directors.

Benchmark Electronics, Inc. • 2020 Proxy Statement				13

PROPOSAL 1 — ELECTION OF DIRECTORS

The Board has Audit, Compensation and Nominating/Governance Committees. Each of the committees operates under a written charter approved by the Board, which can be found on our website at www.bench.com under “Investors—Corporate Governance.” The current members of these committees, and the number of committee meetings held in 2019, are as follows:

Director		Audit				Compensation		Nominating/Governance
David W. Scheible						u		u
Bruce A. Carlson			u
Anne De Greef-Safft			u					u
Douglas G. Duncan			u					Chair
Robert K. Gifford						Chair
Kenneth T. Lamneck			Chair					u
Jeffrey S. McCreary						u		u
Merilee Raines			u
Meetings held:			11			4		4

Role of Audit Committee

The principal function of the Audit Committee is to assist the Board in fulfilling its responsibility to oversee (i) management’s conduct of the Company’s financial reporting process (including management’s development and maintenance of systems of internal accounting and financial controls), (ii) the integrity of the Company’s financial statements, (iii) the Company’s compliance with legal and regulatory requirements and ethical standards, (iv) the qualifications and independence of the Company’s outside auditors, and (v) the performance of the Company’s internal audit function and the outside auditors. The committee also prepares the Report of the Audit Committee required by the rules of the SEC and included later in this Proxy Statement. Additional information regarding the functions performed by the committee is set forth below in such report. The Board has determined that Mr. Lamneck, who chairs the committee, Ms. Raines and Mr. Duncan each qualify as “audit committee financial experts” under the rules of the SEC. In addition, the Board has determined that all members of the Audit Committee are independent under SEC and NYSE rules applicable to audit committee members. An “audit committee financial expert” is defined as a person who has the following attributes: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (iii) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to the breadth and complexity of issues that can reasonably be expected in the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal controls and procedures for financial reporting; and (v) an understanding of audit committee functions.

Role of Compensation Committee

The principal functions of the Compensation Committee are to (i) oversee the Company’s management compensation philosophy and practices, (ii) oversee the administration of the Company’s compensation plans, in particular the incentive compensation and equity-based plans (and, to the extent appropriate, plans of the Company’s subsidiaries), (iii) discharge the Board’s responsibilities relating to the compensation of the Company’s executives, (iv) review and make recommendations on director compensation, and (v) prepare the annual report on executive compensation included later in this Proxy Statement. The Board has determined that all members of the Compensation Committee are independent under SEC and NYSE rules applicable to compensation committee members. Additional information regarding the functions performed by the committee is set forth below in “Compensation Discussion and Analysis—Role of Compensation Committee.”

Role of Nominating/Governance Committee

The principal functions of the Nominating/Governance Committee are to (i) identify individuals qualified to become Board members and recommend such individuals to the Board for nomination for election to the Board, (ii) make recommendations to the Board concerning committee appointments, (iii) develop, recommend and annually review corporate governance guidelines for the Company, (iv) oversee corporate governance matters, and (v) coordinate an annual evaluation of the Board, which includes an evaluation of each committee and each member of the Board.

14				Benchmark Electronics, Inc. • 2020 Proxy Statement

PROPOSAL 1 — ELECTION OF DIRECTORS

To be considered by the Nominating/Governance Committee, a director nominee should have experience as a board member or senior executive of a public company or nationally recognized private company. In addition to these requirements, the committee will also evaluate whether the nominee’s skills are complementary to those of incumbent Board members and the Board’s needs for operational, management, financial, international, technological or other expertise. Although there is no specific policy on considering diversity, the Board and the committee believe that the Board membership should reflect diversity in its broadest sense, including geography, gender, ethnicity, viewpoint, education, skills and professional experience. The Nominating/Governance Committee has an independent search firm to identify and screen candidates, perform reference checks, prepare a biography for each candidate for the committee’s review and coordinate interviews. The committee, the Chairman of the Board and executive officers interview candidates that meet the criteria, and the committee selects nominees who it determines are best-suited to actively engage in the oversight of the Company’s strategy and drive sustainable value creation for all shareholders. The committee will consider recommending for nomination to the Board candidates suggested by shareholders, taking into account all the factors and qualities described above, provided that recommendations are submitted and received by us at our principal executive offices at 56 South Rockford Drive, Tempe, Arizona 85281, with an appropriate biographical summary, in accordance with the requirements described below under “Date of Submission of Shareholder Proposals and Director Nominations.”

The Board does not have a written policy requiring members to attend annual shareholders meetings, although the Company expects that all of its directors will attend the Meeting. All Board members then in office were in attendance during the prior year’s annual meeting.

Certain Transactions

There were no Related-Party Transactions (as defined below) since the beginning of last year. The Board would review any proposed Related-Party Transaction to which the Company would be a party to determine if it were in the best interests of our shareholders and the Company. Financial transactions, arrangements, relationships or any series of similar transactions, arrangements or relationships beyond the compensation described elsewhere in this Proxy Statement relating to Board service or employment and exceeding $120,000 in which a Related Party (as defined below) would have a direct or indirect material interest ( “ Related-Party Transactions ” ) are subject to Board review. “Related Parties” are directors, director nominees, executive officers, holders of 5% or more of our Common Shares and their immediate family members. Immediate family members are children, stepchildren, spouses, parents, siblings, stepparents, mothers-in-law, fathers-in-law, brothers-in-law, sisters-in-law, daughters-in-law, sons-in-law and any person, other than a tenant or domestic employee, in the household of a director, director nominee, executive officer or holder of 5% or more of our Common Shares.

The Board does not have a written policy regarding Related-Party Transactions and does not believe such a policy is necessary because the Board has not approved, and does not expect to approve, the Company’s engagement in any Related-Party Transactions other than in rare circumstances. Any Related-Party Transaction would be considered based on facts and circumstances at the time. After review, the Board would decide in good faith whether to approve the transaction.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee during 2019 were Messrs. Scheible, Gifford (Chair), McCreary and Williams (until the end of his term in May 2019). Each member of the committee is independent, and no member was ever employed by the Company. None of our directors has interlocking or other relationships with other boards, compensation committees or our executive officers that require disclosure under Item 407(e)(4) of Regulation S-K.

Benchmark Electronics, Inc. • 2020 Proxy Statement				15

COMPENSATION DISCUSSION AND ANALYSIS

How Executive Pay Supports our Business Strategy

In fiscal year 2019 we saw great momentum in the progress towards the repositioning and realignment of Benchmark. We established a customer-centric go-to market approach, remained focused on operational excellence and efficiency projects, and accelerated our capabilities to provide a differentiated value proposition to our customers.

We believe our pay is well aligned with performance and that our structure maintains an appropriate balance between our long-term and short-term performance, creating a positive relationship between our operational performance and shareholder return. In accordance with our compensation philosophy, in 2019:

•

We reviewed base salaries and maintained all but one at the same level, while providing a modest increase to the salaries of one Named Executive Officer (defined below) based on market data, performance and internal reviews;

•

Our Named Executive Officers did not receive annual incentive pay for 2019 since the Company’s financial performance did not meet the threshold targets and metrics set by the Compensation Committee;

•

We maintained our practice of granting median level grants with a combination of performance-based restricted stock unit (“ PSU ”) and restricted stock units ( “ RSUs ” ) to align the compensation of our Named Executive Officers with the creation of shareholder value and maintain our targeted level of at risk compensation; and

•

The Company issued no shares under the 2017 PSU three-year awards, for which the performance period ended in December 2019, because the 2017 PSU award metrics were not achieved.

Philosophy and Objectives

Our executive compensation program is designed to:

•

attract, retain and reward the performance of our management talent;

•

incentivize the achievement of the Company’s strategic plan, and both short- and long-term operating objectives;

•

be transparent, fair and objective;

•

encourage the taking of prudent business risks for appropriate potential long-term benefits while avoiding excessive, unnecessary or unwise risk; and

•

encourage smart investment and prudent deployment of capital.

16				Benchmark Electronics, Inc. • 2020 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

At-risk, incentive compensation commits our executives to delivering positive results over both the short- and longer-terms by rewarding the achievement of those results and aligning their interests with the financial interests of our shareholders. The Company’s total targeted compensation opportunity is generally set in the median range of market compensation survey data and a peer group of companies (our “ Peer Group ” is further detailed below), which was refined by the Compensation Committee in 2019 and is reviewed annually to ensure an appropriate representative peer group. Our compensation program is designed to deliver above-median total compensation if above-median performance is achieved and below-median total compensation for below-median performance.

In order to more closely align the financial interests of our executive officers with those of our shareholders, we have (i) share ownership guidelines requiring our executives to acquire a long-term ownership stake in the Company (see “ Share Ownership Guidelines ” below), (ii) a practice of making all board-level compensation decisions (base salary adjustments, annual bonuses, and long-term equity-based incentives) on a single day to reinforce performance feedback to the executives (see “ Timing of Compensation Decisions ” below), and (iii) a PSU component in our compensation program, to more closely tie pay to performance. Any vesting of PSUs depends on the Company’s achievement of financial goals set by the Compensation Committee and derived from the Company’s overall financial objectives, which for PSUs awarded in 2019 with a performance period ending in December 2021, included goals relating to:

•

Revenue : The Revenue shall be the total revenue as reported in the Company’s consolidated financial statements for the Measurement Year.

•

Operating income Margin : The Operating Income Margin shall be the operating income as reported in the Company’s consolidated financial statements for the Measurement Year, excluding one-time, non-recurring, non-operational gains or charges and amortization of intangible assets, divided by the Revenue; and

•

ROIC : The ROIC shall be the operating income as reported in the Company’s consolidated financial statements for the Measurement Year, excluding one-time, non-recurring, non-operational gains or charges and amortization of intangible assets and stock compensation expense, adjusted for taxes (i.e., multiplied by one minus the tax rate), divided by the quarterly average of capital employed by the Company during the Performance Period, as described below. The tax rate used shall equal the book tax rate for the Company for the Measurement Year, excluding all discrete items. The quarterly average of capital employed shall equal the average of capital employed on each of last five quarterly consolidated balance sheets for the Company during the Performance Period (opening balance sheet (fourth quarter of year prior to Measurement Year) and first quarter, second quarter, third quarter and fourth quarter balance sheets of the Measurement Year). Capital employed for each balance sheet shall equal the sum of total interest-bearing debt and finance leases (both current and long-term), minority interest, and stockholders’ equity as of the date of each balance sheet less cash and cash equivalents at each balance sheet date.

The Committee believes that revenue growth, operating margin and the efficient use of capital are key long-term determinants of shareholder value. The PSU targets are designed to enhance focus on performance across these areas ensuring alignment between management’s compensation and the creation of shareholder value.

The foregoing financial goals are measured at the end of the performance cycle (see “ Long-Term Equity-Based Incentive Program ” below).

The primary components of our executive compensation program, described in more detail below, are (i) base salary, (ii) annual performance-based incentive compensation, and (iii) long-term incentive compensation comprised of RSUs and PSUs:

•

Base Salary , which pays a set level of cash income to the executive, generally within the median range of the Peer Group.

•

Annual Performance-Based Incentive Award , which pays a variable cash award to reward achievement of short-term operational performance goals, which in 2019 was based on (i) total revenue, (ii) Adjusted Operating Income (as defined below), and (iii) improvements in our cash conversion cycle.

•

RSUs , which typically vest over a four-year period, are awarded to retain management and permit each executive to steadily build an ownership stake in the Company to encourage the creation of long-term shareholder value.

•

PSUs , designed to encourage the creation of long-term shareholder value and reward performance, subject to the achievement of specific long-term financial objectives over a specified performance period, which in general have a three-year performance cycle.

Three of the four components are “at-risk” in that they have value only if the Company’s financial objectives are achieved or if the value of the Common Shares rise. The Company believes that the design of these at-risk components closely aligns executive pay with performance beneficial to the Company and its shareholders over the immediate and longer terms.

Benchmark Electronics, Inc. • 2020 Proxy Statement				17

COMPENSATION DISCUSSION AND ANALYSIS

Role of Compensation Committee

The Compensation Committee is responsible for reviewing and approving all salary and annual incentive compensation paid to officers of the Company who are subject to Section 16 of the Exchange Act (“ Section 16 ”), including our CEO and the other executive officers named below in the Summary Compensation Table (collectively with the CEO, the “ Named Executive Officers ”). The Compensation Committee recommends and the Board of Directors approves the CEO’s compensation. The Compensation Committee also approves the equity incentives provided to our executives, as well as most other employees (except for certain employees not subject to Section 16 for whom the CEO has been delegated authority to make limited awards).

The Compensation Committee annually reviews and approves operating and financial goals for the CEO, as well as evaluates the CEO’s performance against goals set for the period year. The CEO’s performance against pre-determined goals is a significant factor in the Committee’s and the Board of Director’s setting of the CEO’s compensation package.

Additional information with respect to the authority of the committee is set forth above under “Operation of Board of Directors and Committees, Attendance, Director Independence”.

Pursuant to its authority under its written charter approved by the Board, the Compensation Committee may form and delegate authority to subcommittees of the Compensation Committee. Under its charter, the Compensation Committee may also delegate its authority with respect to equity awards to the extent permitted by the Texas Business Organizations Code, except that the Compensation Committee shall approve all awards of equity-based compensation to any officer subject to Section 16 of the Exchange Act.

The Compensation Committee has retained Pearl Meyer & Partners, LLC to serve as its independent compensation consultant (the “ Consultant ”) and perform reviews from time to time of our executive compensation practices, as well as the compensation of our Board of Directors. The Consultant advised the Compensation Committee on certain compensation matters relating to 2019 compensation of our executive officers and directors and has performed such a review in connection with the Compensation Committee’s decisions relating to 2020 compensation. The Consultant does not provide any services on behalf of management and does not have any potential business conflicts with its role as an independent advisor.

Role of Management

Regarding most compensation matters, including executive and director compensation, management provides recommendations to the Compensation Committee; however, the Compensation Committee does not delegate any of its responsibilities to others in setting compensation for the executive officers. The CEO annually reviews the performance of the other executive officers and presents his conclusions and recommendations as to salary adjustments and annual equity awards to the Compensation Committee for its consideration. The Compensation Committee exercises its discretion in determining any adjustments or awards to the Company’s officers, including the Named Executive Officers. The Compensation Committee does not take into account any recommendations from the CEO regarding his own compensation.

Evaluation of Say-on-Pay Advisory Vote

At our 2019 annual meeting, shareholders voted 96% in favor of approving the Named Executive Officer compensation described in the 2019 proxy statement. Based on the Say-on-Pay vote at the annual meeting, the Compensation Committee determined not to change its compensation philosophy or to significantly alter our compensation practices in 2020.

Competitive Market Review

In setting executive compensation, the Compensation Committee considers all factors it deems relevant. The committee also considers data and recommendations presented by the Consultant or management based on market data that provide information on the level of the total target compensation (i.e., salary, annual incentive and long-term incentive compensation) paid to similarly positioned executives at companies in the Peer Group. To determine the amount of compensation to be paid to each of our executives, the committee performs an evaluation, including a review of the following (without assigning specific weight to each factor):

•

each executive’s performance, responsibilities and time in role;

•

market survey data;

•

relativity in pay among the Company’s executive officers;

•

comparability of each executive’s role to executives named in Peer Group proxy statements;

•

general compensation trends;

•

the Company’s financial position; and

•

for executives other than the CEO, the recommendations of the CEO.

18				Benchmark Electronics, Inc. • 2020 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee has not established a set formula or other quantitative policy for allocating between long-term and immediately payable compensation, cash and noncash compensation, setting the amount of equity awards or allocating equity awards between stock options, RSUs and PSUs. Rather, the Compensation Committee considers compensation in total for each individual, and may, accordingly, weight components differently from year-to-year.

Each year, the Compensation Committee evaluates peers from publicly traded companies that are major competitors or customers. The committee seeks to select peer companies that are comparable to Benchmark based on various criteria, including revenue, market capitalization, similar industry affiliation, scope of global operations and the belief that these companies compete for similar executive talent. The Compensation Committee refined the Peer Group for 2019 to include entities with revenues between $1.19 billion and $6.8 billion and median revenue of $2.4 billion, and focused on manufacturers and companies in the electrical components, information technology, semiconductor components and electronics manufacturing services industries.

The Peer Group for the fiscal year 2019 compensation decisions consisted of the following companies:

• AVX Corporation		• OSI Systems, Inc.
• Celestica Inc.		• Plexus Corp
• Esterline Technologies, Inc.		• Sanmina Corporation
• Fabrinet		• ScanSource, Inc.
• II-VI Incorporated		• TTM Technologies, Inc.
• Insight Enterprise, Inc.		• Vishay Intertechnology, Inc.
• Itron, Inc.		• VeriFone Systems, Inc.
• KEMET Corporation		• Zebra Technology Corporation

Timing of Compensation Decisions

In order to reinforce performance feedback through compensation and to comply with certain regulations impacting performance-based awards, the Compensation Committee makes executive compensation decisions in the first quarter of each year. This allows for an assessment based on a focal point affording the opportunity to consider the relative contribution of each of the executives. The committee reviews and approves equity awards to all eligible employees, including executive officers, once a year, on the date of the committee’s regularly scheduled first quarter meeting. When used, stock options have an exercise price equal to the closing price of the Common Shares on the date of award. The Company believes that the practice of granting stock-based awards in the first quarter of each year is reasonable when followed on a consistent basis each year and reduces the risk of inadvertently timing the grant of such awards with the release of material nonpublic information.

2019 Compensation

Base Salary Compensation

The Compensation Committee reviews base salaries of the Named Executive Officers annually. In making salary determinations, the committee considers salary median range for persons in comparable positions in the Peer Group, the executive’s experience and scope of responsibility, the committee’s assessment of the executive’s individual past and potential future contribution to the Company’s results (without assigning a specific weight to each factor) as well as the recommendations of the CEO (as to executive officers other than the CEO). During its review of base salaries for executives for 2019, the committee primarily considered market data provided by the Consultant, the results of a review of the executive’s compensation relative to the Company’s other executive officers, and the executive’s individual performance. Mr. Lakkaraju’s base salary was increased to $470,000 from $420,000 in 2019. Messrs. Benck, Buseman, Janick and Beaver’s base annual salaries remained at $900,000, $400,000, $350,000 and $325,000, respectively.

Annual Cash-Based Incentive Compensation

The purpose of the executive annual incentive compensation plan is to align the interests of executive officers with shareholders by motivating the achievement of superior financial and operational performance that increases shareholder value. Incentive bonuses are generally granted based on a percentage of each executive officer’s base salary earned during the year. Targets under the executive annual incentive plan for 2019 were set by the Compensation Committee in the first quarter of 2019. Our practice is to award cash

Benchmark Electronics, Inc. • 2020 Proxy Statement				19

COMPENSATION DISCUSSION AND ANALYSIS

incentive bonuses based on the attainment of corporate performance goals. The following table sets forth the threshold, target and maximum performance goals, which are weighted equally and assessed independently with respect to 2019 financial results of the Company for each of the executive officers:

Corporate Performance Goals

Objective Level

Adjusted Operating Income (1)

Cash Conversion Cycle (2)

Revenue

Threshold

$

72 million

78 days

$

2.240 billion

Target

$

102 million

73 days

$

2.410 billion

Maximum

$

120 million

68 days

$

2.585 billion

Actual

$

65 million

81 days

$

2.124 billion

(1)

Operating income excludes one-time, non-recurring, non-operational gains or charges and amortization of intangible assets (“ Adjusted Operating Income ”).

(2)

Represents the average of the cash conversion cycle (accounts receivable days plus contract asset days and inventory days less accounts payable and customer deposit days) calculated as of the end of each of the four quarters ended December 31, 2019.

The following table sets forth the potential 2019 threshold, target and maximum cash incentive payment levels, as a percentage of salary, for the Named Executive Officers based on the Company’s achievement of the performance goals above. Below the threshold, no award is earned; achievements between the different levels are paid ratably:

		Potential 2019 Incentive Payments as a Percentage of Salary Related to Achievement of Performance Goals
Named Executive		Threshold				Target				Maximum
Jeffrey W. Benck			57.5	%			115.0	%			230.0	%
Paul J. Tufano (1)			57.5	%			115.0	%			230.0	%
Roop K. Lakkaraju			37.5	%			75.0	%			150.0	%
Michael D. Buseman			37.5	%			75.0	%			150.0	%
Jan M. Janick			25.0	%			50.0	%			100.0	%
Stephen J. Beaver			25.0	%			50.0	%			100.0	%

(1)

Mr. Tufano retired as President and CEO on March 18, 2019.

The total incentive award is determined according to the level of achievement of the aggregate corporate performance goals. The maximum incentive bonus for these executive officers was 200% of target.

At its regular first quarter 2020 meeting, the Compensation Committee determined the extent to which the 2019 performance goals were achieved and approved the amount to be paid to each executive. The Compensation Committee determined that the Company did not meet the threshold Adjusted Operating Income, revenue and cash conversion cycle threshold goals. No incentive awards were paid for 2019.

Long-Term Equity-Based Incentive Program

The Compensation Committee believes that our long-term equity-based incentive program focuses executives on key performance metrics that align with long-term shareholder value creation and the Company’s long–term strategic plan, establishes a direct link between compensation and the achievement of long-term financial objectives and facilitates an increased equity ownership by our executives. In the first quarter of 2019, the committee awarded executive officers a combination of RSUs and PSUs under our 2010 Omnibus Incentive Compensation Plan (the “ 2010 Omnibus Plan ” ) ¹ (in each case, as further described below). To determine the awards

1

The 2010 Omnibus Plan was replaced in May 2019 with a 2019 Omnibus Incentive Plan (the “ 2019 Omnibus Plan ” ) approved by the Company’s shareholders at the Company’s 2019 annual shareholders meeting and no additional grants were made under the 2010 Omnibus Plan after that date. The 2010 Omnibus Plan continues to govern awards previously granted under the 2010 Omnibus Plan.

20				Benchmark Electronics, Inc. • 2020 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

for each executive officer, the committee evaluated each executive officer’s performance and responsibilities, and also considered market data, relative pay among the Company’s executive officers and other factors (without assigning a specific weight to each factor). The evaluation was made with input from our CEO, and also factored in the future potential contribution from each executive officer. Although management recommended the number of shares to be covered by equity awards granted to employees, the committee approved the grant of all equity awards and did not delegate the timing of such grants. Equity award grants to our CEO and other executive officers are not made automatically each year. The amount and terms of equity awards already held by executives generally are not significant factors in the committee’s determination of whether and how many equity awards should be granted to the executive officers.

RSUs— Long-term equity-based incentive compensation awards include time-based awards, which typically vest over four years, to improve retention of executive officers and to enable a steadily growing ownership stake in the Company that encourages long-term strategic performance.

PSUs— The committee believes the PSUs, which are subject to the achievement of measurable, absolute financial goals, enable management to build a meaningful ownership stake in the Company to encourage long-term strategic thinking and the avoidance of unnecessary or excessive risk taking. The financial goals for the 2019 grants were set by the committee and relate to the achievement of performance related revenue, Adjusted Operating Income and Adjusted ROIC goals as outlined in the Company’s 3-year strategic plan. Achievement of these goals will be assessed at the end of the performance period. Each metric will be weighted and assessed equally and independently. The number of PSUs that will ultimately be earned will not be determined until the end of the corresponding performance periods, and may vary from as low as zero to as high as 2.5 times the target number depending on the level of achievement of the performance goals.

The long-term equity-based incentive compensation awards made in the first quarter of 2019 consisted of approximately 50% of the total value awarded in PSUs and 50% in RSUs.

Deferred Compensation Benefits

In order to attract and retain key employees, the Company established the Benchmark Electronics, Inc. Deferred Compensation Plan (the “ Deferred Compensation Plan ”), which allows certain designated employees, including our Named Executive Officers, the opportunity to defer, on a pretax basis, their salary, bonus awards, and other specified compensation and to receive the deferred amounts, together with an investment return (positive or negative), either at a predetermined time in the future or upon termination of employment with the Company. The Company intends that the Deferred Compensation Plan will at all times be maintained on an unfunded basis for federal income tax purposes under the Code and be administered as a nonqualified ‘‘top-hat’’ plan exempt from the substantive requirements of the Employee Retirement Income Security Act. All contributions by employees to the Deferred Compensation Plan, as well as any contributions by the Company, are fully vested upon contribution.

Retirement Benefits

All employees in the United States, including the executive officers, are eligible to participate in the Company’s 401(k) Employee Savings Plan (the “ Savings Plan ”). The Savings Plan is a defined contribution tax-qualified retirement savings plan pursuant to which employees are able to contribute a portion of their eligible cash compensation to the Savings Plan and the Company provides matching cash contributions up to 4% of the employees’ eligible compensation upon hire. All contributions by employees to the Savings Plan, as well as any matching contributions by the Company, are fully vested upon contribution.

Perquisites and Personal Benefits

The Company historically has offered only minimal perquisites or other personal benefits to executive officers, consisting of a portion of the cost of financial planning services, health club memberships and annual physical exams.

Other Matters

Share Ownership Guidelines

Our Named Executive Officers are subject to a share ownership requirement implemented in 2008. During their term of employment with the Company, these officers are expected to directly own Common Shares having a market value of at least 3x annual base salary for the CEO and 2x annual base salary for the other Named Executive Officers. Any such officers who have not yet achieved this ownership requirement are expected to retain 20% of each vesting of their awarded RSUs. Once achieved, the officer remains in compliance despite any decrease in the market value of the Common Shares or any increase in base salary.

Benchmark Electronics, Inc. • 2020 Proxy Statement				21

COMPENSATION DISCUSSION AND ANALYSIS

Analysis of Compensation Risk

Periodically our Compensation Committee analyzes the potential risks posed by the Company’s compensation programs to determine whether the programs might encourage the executive officers to take unnecessary or excessive risks, or whether the programs might encourage the manipulation of reported earnings. As part of its analysis the committee also considers mitigating factors and controls:

Component		Potential Risk		Mitigating Factors
Base Salary		• Increase in fixed expense. • Retention challenges if below market levels.		• Management of expenses and increases. • Annual market surveys.
Annual Incentive Plan		• Imprudent risk taking to maximize short-term reported financial results. • Short term operating income optimization without regard for longer term results.		• Internal financial controls. • Award caps. • Tied to independently audited results.
Long-Term Equity-Based Incentive Plans		• Imprudent risk taking to maximize short-term stock price. • Earnings manipulation.		• Long-term incentive awards at risk. • Share ownership guidelines. • Vesting periods. • Internal financial controls. Independent audit.
Health & Insurance Benefits		• Increase in fixed expense. • Retention challenges if not market competitive.		• Management of expenses. • Annual market surveys. • Strategic plan design to minimize cost escalations and consumer driven design components.
Retirement Benefits (401k and Deferred Compensation Plans)		• Increase in fixed expense. • Retention challenges if not market competitive. • Legal compliance risks.		• Management of expenses. • Limited nonqualified retirement benefits. • Third-party professional advisors.
Severance Plans		• Increase in fixed expense.		• Limitations within employment, severance and change of control agreements. • Benefit limits.
Perquisites & Expatriate Benefits		• Increase in fixed expense. • Retention challenges if not market competitive.		• Management of expenses. • Annual market surveys.

Overall, we believe that the Company’s compensation programs include an appropriate mix of fixed and variable features, short-term and long-term incentives and centralized oversight. Based on this, the Compensation Committee has determined that our compensation program is unlikely to motivate inappropriate risk-taking.

Certain Tax Considerations

Beginning with our 2018 tax year, Section 162(m) of the Code (“Section 162(m)”) generally prohibits a public company from taking an income tax deduction for compensation over $1 million paid to the principal executive officer, the principal financial officer and any one of the three highest paid executive officers as of the close of the applicable taxable year. Although, the tax benefits associated with performance based compensation programs previously allowed under 162(m) generally have been eliminated, the Compensation Committee believes that a pay-for-performance model incentivizes our executive officers to achieve objectives that are aligned to the creation of stockholder value, irrespective of tax deductibility.

Hedging, Short Sales and Pledging Policies

Directors and executives are prohibited from pledging, hedging, selling short or otherwise engaging in speculative practices regarding the Company’s securities.

22				Benchmark Electronics, Inc. • 2020 Proxy Statement

COMPENSATION COMMITTEE REPORT

The Compensation Committee operates under a written charter approved by the Board of Directors. As required by the charter, each member of the committee is independent, and no member of the committee has any interlocking or other relationships with the Company.

The committee administers the Company’s executive compensation program. Among other things, the committee is responsible for:

•

establishing the compensation of our CEO, which is then ratified by the full Board;

•

determining the compensation of the Named Executive Officers other than the CEO; and

•

administering the Company’s employee benefit plans.

The committee has reviewed and discussed the Compensation Discussion and Analysis for the year ended December 31, 2019 and other compensation disclosures in this Proxy Statement with management. Based on such reviews and discussions, the committee recommended to the Board that the compensation-related disclosures made in this Proxy Statement be included herein and incorporated by reference into the Company’s annual report on Form 10-K for the year ended December 31, 2019.

Respectfully submitted,

Compensation Committee

Robert K. Gifford, Chair

Jeffrey S. McCreary

David W. Scheible

Benchmark Electronics, Inc. • 2020 Proxy Statement				23

COMPENSATION TABLES AND NARRATIVES

The following tables, narratives and footnotes describe the total compensation and benefits of our CEO and our other Named Executive Officers for 2019.

Summary Compensation Table

The following table sets forth information concerning the compensation and benefits of our Named Executive Officers during the fiscal years ended December 31, 2019, 2018 and 2017.

Name and Principal Position		Year					Salary ($)					Bonus ($)					Stock Awards (1) ($)					Non-Equity Incentive Plan Compensation (2) ($)					All Other Compensation (3) ($)					Total ($)
Jeffrey W. Benck				2019				$	692,308				$	85,000				$	4,900,044				$	—				$	313,896				$	5,991,248
President and Chief
Executive Officer (CEO) (4)
Paul J. Tufano				2019					1,123,077					—					3,110,658					—					23,707					4,257,442
President and Chief				2018					1,000,000					—					3,300,022					724,500					88,550					5,113,072
Executive Officer (CEO) (5)				2017					1,000,000					—					1,800,005					1,374,250					108,026					4,282,281
Roop K. Lakkaraju (6)				2019					458,461					—					1,292,534					—					42,474					1,793,469
Executive Vice President and				2018					403,846					150,000					834,965					190,817					20,759					1,600,387
Chief Financial Officer (CFO)
Michael D. Buseman (7)				2019					400,000					—					700,002					—					31,940					1,131,942
Executive Vice President of				2018					400,000					—					349,992					189,000					20,189					959,181
Global Operations				2017					153,846					—					732,752					137,885					79,466					1,103,949
Jan M. Janick (8)				2019					350,000					—					962,532					—					17,690					1,330,222
Chief Technology Officer				2018					346,154					—					612,509					109,038					23,390					1,091,091
Stephen J. Beaver (9)				2019					325,000					—					568,766					—					19,330					913,096
Vice President, General Counsel and Secretary				2018					125,000					40,000					568,000					39,375					105					772,480

(1)

The amounts reflect the aggregate grant date fair value of RSU and PSU grants pursuant to the Company’s equity plans during the fiscal years ended December 31, 2019, 2018 and 2017, respectively, computed in accordance with the provisions of Financial Accounting Standards Board (“ FASB ”) Accounting Standards Codification (“ ASC ”) Topic 718. Stock awards were valued using the closing market price of the Common Shares on the grant date. A portion of the awards listed above are subject to performance conditions, with the grant date fair value calculated for purposes of the Stock Awards column assuming a target level of achievement. For PSUs, assuming the performance conditions will be achieved at a maximum level of 250% of target for grants in 2019, the grant date fair value of PSU awards for each of our Named Executive Officers would be as follows:

Mr. Benck		$	3,750,030
Mr. Tufano		$	3,888,358
Mr. Lakkaraju		$	1,028,164
Mr. Buseman		$	875,004
Mr. Janick		$	765,663
Mr. Beaver		$	710,958

(2)

The amounts shown in this column reflect cash incentive bonuses earned by our Named Executive Officers pursuant to the Company’s annual executive incentive compensation plan. The amounts include cash bonuses earned in year of service regardless of when paid. No cash incentive bonuses were earned in 2019.

(3)

For the year ended December 31, 2019, the “All Other Compensation” column includes (a) $8,997 to Mr. Benck, $4,615 to Mr. Tufano, $11,000 to Mr. Lakkaraju, $11,000 to Mr. Buseman, $1,454 to Mr. Janick, $7,638 and to Mr. Beaver paid by the Company pursuant to the Company’s Savings Plan (under the Savings Plan, the Company is obligated to make matching contributions to the Savings Plan in an amount equal to 100% of each participant’s elective contributions, to the extent that such elective contributions do not exceed 4% of such participant’s eligible compensation and IRS limits), (b) payments by the Company to Messrs. Benck, Tufano, Lakkaraju, Buseman, Janick and Beaver pursuant to the Company’s Deferred Compensation Plan as elective contributions (see “Registrant Contributions in Last Fiscal Year” column below under Nonqualified Deferred Compensation), and (c) payments by the Company of premiums for term life insurance on behalf of each of our Named Executive Officers. In addition, Mr. Benck received $255,000 of perquisites during 2019 which included $250,000 in relocation assistance and $5,000 for financial planning services. Mr. Lakkaraju received $10,257 of perquisites during 2019, which included $5,000 for financial planning services and $2,800 for a health club

24				Benchmark Electronics, Inc. • 2020 Proxy Statement

COMPENSATION TABLES AND NARRATIVES

membership and $2,457 for his annual executive physical. Mr. Buseman received $4,090 of perquisites during 2019, which included $2,255 for financial planning services, $1,262 for a health club membership and $573 for his annual executive physical. Mr. Janick received $6,044 of perquisites during 2019, which included $2,000 for financial planning services and $4,044 for his annual executive physical. Mr. Beaver received $5,467 of perquisites during 2019, which included $475 for financial planning services, $4,500 for a health club membership and $492 for his annual executive physical.

(4)	Mr. Benck became President and CEO in March 2019.

(5)	Mr. Tufano retired as President and CEO in March 2019, continuing to serve as an advisor to the Company until December 31, 2019, at which point he voluntarily retired from Benchmark.

(6)	Mr. Lakkaraju became an Executive Officer in January 2018 and received a base salary increase to $470,000 during 2019.

(7)	Mr. Buseman became an Executive Officer in August 2017.

(8)	Mr. Janick became an Executive Officer in August 2018 and received a base salary increase to $350,000 during 2018.

(9)	Mr. Beaver became an Executive Officer in August 2018.

Employment and Other Agreements

The Company has entered into an employment agreement with Mr. Benck and severance agreements with Messrs. Lakkaraju, Buseman, Janick and Beaver. These agreements are automatically extended by successive one-year terms, unless terminated by the Company or the executive.

Each agreement also provides for severance payments if the applicable Named Executive Officer’s employment is terminated under certain qualifying circumstances. A more detailed discussion of the severance terms is set forth in “—Potential Payments upon Termination or Change in Control”.

Each agreement contains restrictive covenants that prohibit the applicable Named Executive Officer from competing with the Company or soliciting its customers or service providers during the term of the agreement and for two years thereafter, as well as a confidentiality covenant of indefinite length.

In addition to the restrictive covenants described in the preceding sentence, Messrs. Benck, Lakkaraju, Buseman, Janick and Beaver may not, during their periods of employment and for two years thereafter, make disparaging remarks about the Company, its subsidiaries or products and services or divert customers of the Company to its competitors.

Benchmark Electronics, Inc. • 2020 Proxy Statement				25

COMPENSATION TABLES AND NARRATIVES

Grants of Plan-Based Awards

The Benchmark Electronics, Inc. 2010 Omnibus Plan authorized, and its replacement the 2019 Omnibus Plan authorizes, the Company, upon approval of the Compensation Committee, to grant a variety of types of awards, including stock options, restricted shares, RSUs, stock appreciation rights, performance compensation awards, including PSUs, phantom stock awards and deferred share units, or any combination thereof, to any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of the Company. The 2010 Omnibus Plan was replaced in May 2019 and no additional grants can be made under that plan. The 2019 Omnibus Plan was approved by the Company’s shareholders in May 2019 and replaced the 2010 Omnibus Plan. As of December 31, 2019, the Company had equity awards outstanding with respect to 1.3 million Common Shares under the Company’s 2010 and 2019 Omnibus Plan, and 2.7 million additional Common Shares are available for issuance under the 2019 Omnibus Plan.

The following table sets forth information concerning grants of RSUs and PSUs to the Named Executive Officers during 2019 under the 2010 Omnibus Plan, as well as estimated possible payouts under cash and equity incentive plans. The Company did not grant any stock option awards during 2019; accordingly, these columns have been omitted.

2019 Grants of Plan-Based Awards

						Estimated Possible Payouts  Under Non-Equity Incentive Plan Awards (1)												Estimated Future Payouts Under Equity Incentive Plan Awards (2)												All Other Stock Awards: Number of Shares of				Grant Date Fair Value of Stock and Option
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)				Stock or Units (#)				Awards ($) (3)
Jeffrey W. Benck			3/18/19				—				—				—				28,659				57,318				143,295				—			$	1,500,012
			3/18/19				—				—				—				—				—				—				129,921			$	3,400,032
			3/18/19			$	398,076			$	796,153			$	1,592,306				—				—				—				—				—
Paul J. Tufano			2/20/19				—				—				—				27,685				55,370				138,425				—			$	1,555,343
			2/20/19				—				—				—				—				—				—				55,369			$	1,555,315
			2/20/19			$	575,000			$	1,150,000			$	2,300,000				—				—				—				—				—
Roop K. Lakkaraju			2/20/19				—				—				—				7,321				14,641				36,603				—			$	411,266
			2/20/19				—				—				—				—				—				—				31,373			$	881,268
			2/20/19			$	171,923			$	343,846			$	687,692				—				—				—				—				—
Michael D. Buseman			2/20/19				—				—				—				6,230				12,460				31,150				—			$	350,001
			2/20/19				—				—				—				—				—				—				12,460			$	350,001
			2/20/19			$	150,000			$	300,000			$	600,000				—				—				—				—				—
Jan M. Janick			2/20/19				—				—				—				5,452				10,903				27,258				—			$	306,265
			2/20/19				—				—				—				—				—				—				23,363			$	656,267
			2/20/19			$	87,500			$	175,000			$	350,000				—				—				—				—				—
Stephen J. Beaver			2/20/19				—				—				—				5,062				10,124				25,310				—			$	284,383
			2/20/19				—				—				—				—				—				—				10,124			$	284,383
			2/20/19			$	81,250			$	162,500			$	325,000				—				—				—				—				—

(1)	The information included in the “Threshold”, “Target” and “Maximum” columns represents the range of potential payout under the 2019 annual executive incentive compensation plan for the Named Executive Officers in 2019.

(2)

The information included in the “Threshold”, “Target” and “Maximum” columns represents the range of potential shares that may be earned in respect of PSUs granted under the 2010 Omnibus Plan for the Named Executive Officers in 2019. The number of PSUs that will ultimately be earned will not be determined until the end of the performance period, which is December 31, 2021. Shares earned will be proportionately increased in the event of attainment of performance goals at levels between “Threshold” and “Target” or “Target” and “Maximum”.

(3)	The amounts shown in this column reflect the grant date fair value of the RSU and PSU awards granted in 2019, as computed in accordance with FASB ASC Topic 718. The RSUs and PSUs were valued using the closing market price of the Common Shares on the grant date.

26				Benchmark Electronics, Inc. • 2020 Proxy Statement