GLDD DEF 14A Report ended May 2, 2019

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

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

Check the appropriate box:

Great Lakes Dredge & Dock Corporation

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS

		GLDDCORP.COM
				2122 YORK ROAD,
				OAK BROOK, IL. 60523
				P 630.574.3000 | F 630.574.3007

March 21, 2019

Dear Fellow Stockholder:

Our Board of Directors joins me in extending to you a cordial invitation to attend the 2019 Annual Meeting of Stockholders of Great Lakes Dredge & Dock Corporation. The meeting will be held on Thursday, May 2, 2019, beginning at 8:00 A.M. Central Daylight Time at the Le Méridien Hotel Chicago – Oak Brook Center, 2100 Spring Road, Grand Salon I, Oak Brook, Illinois 60523. Please refer to the accompanying Notice of 2019 Annual Meeting of Stockholders and Proxy Statement for detailed information on the meeting and each of the proposals to be considered and acted upon at the meeting.

In accordance with U.S. Securities and Exchange Commission’s rules, we have elected to deliver our proxy materials over the internet to most stockholders, which allow stockholders to receive information on a timelier basis, while lowering printing and mailing costs and reducing the environmental impact of the 2019 Annual Meeting of Stockholders.

YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. On behalf of the Board of Directors, I urge you to vote your shares by proxy as soon as possible to ensure your vote is recorded at the 2019 Annual Meeting of Stockholders. You may vote in person at the 2019 Annual Meeting of Stockholders, by telephone, over the internet or, if you have requested paper copies of our proxy materials by mail, by signing, dating and returning the proxy card in the envelope provided.

Our Board of Directors appreciates your continued support of Great Lakes Dredge & Dock Corporation.

Sincerely,

Lawrence R. Dickerson

Chairman of the Board of Directors

TABLE OF CONTENTS

PROXY STATEMENT

GREAT LAKES DREDGE & DOCK CORPORATION

2122 York Road

Oak Brook, Illinois 60523

This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Great Lakes Dredge & Dock Corporation, a Delaware corporation, to be voted at the 2019 Annual Meeting of Stockholders, which we refer to as the “ Annual Meeting ” or the “ 2019 Meeting ,” and any adjournment or postponement of the meeting. Throughout this Proxy Statement when the terms “ Great Lakes ,” the “ Company ,” “ we ,” “ our ,” “ ours ” or “ us ” are used, they refer to Great Lakes Dredge & Dock Corporation and its subsidiaries. We sometimes refer to our Board of Directors as the “ Board .” The meeting will be held at the Le Méridien Hotel Chicago – Oak Brook Center, 2100 Spring Road, Grand Salon I, Oak Brook, Illinois 60523, on Thursday, May 2, 2019, at 8:00 am Central Time, for the purposes contained in the accompanying Notice of Annual Meeting of Stockholders and as set forth in this proxy statement.

On March 21, 2019, we made this Proxy Statement and form of proxy available online and mailed to our stockholders a Notice of Internet Availability (the “ Notice ”) containing instructions on how to access this Proxy Statement and our annual report to stockholders of record as of March 7, 2019 (the “ record date ”), as permitted by the U.S. Securities and Exchange Commission’s (the “ SEC ”) rules. We will also mail this Proxy Statement, and the materials accompanying it, to stockholders who have requested paper copies. If you would like to receive a printed copy of our proxy materials by mail, you should follow the instructions for requesting those materials included in the Notice that we mailed to you.

Important Notice: The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com . (All website addresses given in this document are for informational purposes only and are not intended to be active link or to incorporate any website information into this document).

2019 PROXY SUMMARY

This summary highlights information contained in this proxy statement. This summary does not contain all of the information you should consider, and you should carefully read the entire Proxy Statement before voting.

ANNUAL MEETING OF STOCKHOLDERS

AGENDA ITEMS AND BOARD RECOMMENDATIONS

ELECTION OF DIRECTORS

The nominees for director for a three-year term will be elected provided that they receive the affirmative vote of a plurality of shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. This means that, if a quorum is present, the three persons receiving the greatest numbers of votes at the Annual Meeting will be elected to serve as directors. Withholding authority to vote for a director nominee will not affect the outcome of the election of directors. Broker non-votes will have no effect on the election of directors.

ADVISORY VOTE TO RATIFY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP will be ratified as our independent registered public accounting firm for the year ending December 31, 2019, provided the proposal receives the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will be treated as being present and entitled to vote on the matter and, therefore, will have the effect of votes against the proposal.

ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS

The advisory resolution to approve the compensation of our named executive officers will be approved provided the proposal receives the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will be treated as being present and entitled to vote on the matter and, therefore, will have the effect of votes against the proposed resolution. A broker non-vote is treated as not being entitled to vote on the matter and, therefore, is not counted for purposes of determining whether the proposal has been approved.

2019 PROXY SUMMARY

CORPORATE GOVERNANCE HIGHLIGHTS

Commitment to Board Refreshment. In May 2018, Kathleen M. Shanahan and Ronald R. Steger joined the Board as Independent Directors. More than half of our directors have joined the Board in 2016 or later.

Stockholder Engagement Efforts. The Board views stockholder outreach as an area of priority and in fiscal 2018 oversaw the enhancement of the Company’s engagement program, including outreach to over 50% of the stockholders and a specific focus on corporate governance and executive compensation.

Strong Independent Board. The Board understands that maintaining qualified independent and non-management directors on the Board is an integral part of effective corporate governance. The Board believes its current, refreshed leadership strikes an appropriate balance between independent directors and directors affiliated with the Company. This allows the Board to effectively represent the best interests of the Company and its stockholders.

Continually Updating Key Governance Policies. Annually, our Board reviews the charter of each of its standing committees. During 2018, our Board amended the Compensation Committee and Nominating and Corporate Governance Committee charters to promote corporate governance best practices and adopted the Audit Committee charter without any changes.

CORPORATE GOVERNANCE PRACTICES

EXECUTIVE COMPENSATION HIGHLIGHTS

As illustrated in the following charts and consistent with our pay for performance philosophy, the majority of our named executive officers’ target total compensation for 2018 (i.e. the sum of annualized base salary, target STI award and target LTI awards, excluding performance-based restricted stock units granted under the Special Incentive Program described below) is performance based or “at-risk,” meaning it is only earned if specific financial goals are achieved.

In addition to the regular compensation program, upon recommendation by the CEO, the Compensation Committee awarded an equity-based Special Incentive Program to senior personnel that was designed to incentivize extraordinary performance. The Special Incentive Program may be earned based upon performance metrics that were significantly higher than the regular performance-based program and further includes a time-vesting component for any earned equity. The goal of the Compensation Committee was to incentivize senior personnel to achieve and exceed the Company’s strategic goals and to further link the interests of Company leaders with those of the shareholders.

EXECUTIVE COMPENSATION PRACTICES

Our executive compensation program is designed to support our financial and strategic goals, align executive pay with stockholder value creation, and discourage unnecessary and excessive risk-taking. Our Compensation Committee regularly reviews our executive compensation program to incorporate commonly viewed best practices as it deems appropriate, examples of which include:

2019 PROXY SUMMARY

BOARD OF DIRECTORS

* – Director Nominees         |            I – Independent       | – Chair                             | – Member

The above chart shows the Committee composition is as of the record date.

2018 STOCKHOLDER OUTREACH

SAY-ON-PAY VOTE AND SUBSEQUENT INVESTOR OUTREACH

Overview

At our 2018 Annual Meeting of Stockholders, our advisory proposal to approve our executive compensation program received majority support from our stockholders, but at a significantly lower level than in prior years. While we believe that our existing executive compensation program properly encourages and rewards the achievement of financial results that promote long-term stockholder value creation, we were disappointed by the decline in support from prior years and took steps to develop a better understanding of the perspectives of our stockholders with respect to our executive compensation practices and to evaluate any concerns or constructive feedback we received. This specifically targeted stockholder engagement was done to supplement our ongoing investor relations program and is described in more detail below.

Outreach Team

The participants of the Company’s stockholder outreach team consisted of our Compensation Committee Chair, our Chief Legal Officer and Corporate Secretary, our Vice President of Human Resources, and our Manager of Investor Relations. The Compensation Committee members, our Chief Executive Officer and our Chief Financial Officer reviewed summaries of the feedback received during the process, and the full Board of Directors received regular updates from the Compensation Committee throughout the process.

Engagement Timeline

SUMMER		FALL		WINTER		SPRING
Reviewed votes of key stockholders from the 2018 Annual Meeting, re-assessed 2018 executive compensation program and began reaching out to top stockholders to schedule conference calls.		Held conference calls with top stockholders on executive compensation issues in order to receive feedback on their compensation priorities and provide insight into the Company’s prior executive compensation decisions.		Assessed feedback received from stockholders during conference calls, integrated that feedback into Compensation Committee decisions for 2019 and made changes to executive compensation plans as appropriate.		Reach out again to certain top stockholders to discuss the changes to 2019 executive compensation and to answer any other questions they may have on executive compensation and corporate governance issues.

Extent of Outreach

During our outreach campaign, we invited 12 of our top 25 stockholders, representing over 50% of our outstanding shares, to discuss their views and proxy voting guidelines with respect to our executive compensation program and disclosures. As a result, we held discussions with institutional stockholders that represented approximately 31.5% of our shares outstanding. Topics discussed with stockholders included our executive compensation program for 2017, changes made to the 2018 compensation program, pay-for-performance strategy, performance-based vesting criteria and metrics for our short-term and long-term incentive programs, and our executive compensation disclosures, as well as board refreshment and other corporate governance practices. The Company and the Compensation Committee intend to continue to expand this outreach campaign by increasing the frequency of outreach efforts in order to facilitate stockholder input into the Company’s executive compensation philosophy.

What We Heard

Though there was no strong consensus on any one particular item, some of the feedback we received was echoed by two or more other investors. Below is an overview of the stockholder feedback we received:

2018 STOCKHOLDER OUTREACH

What We Did and Why

The Company and the Compensation Committee considered the results of the “say-on-pay” voting and the feedback from the stockholder engagement process in assessing whether there was a need for modifications or enhancements to our executive compensation program and other governance issues. The Compensation Committee took the following actions in 2019:

CORPORATE GOVERNANCE

GOVERNANCE FRAMEWORK

Our Company is committed to the values of effective corporate governance and high ethical standards. These values are important to driving long-term performance, and the Board reevaluates our policies on an ongoing basis to ensure they sufficiently meet the Company’s needs. We believe our key corporate governance and ethics policies enable us to manage our business in accordance with the highest standards of business practice and in the best interests of our stockholders.

CORPORATE GOVERNANCE

THE BOARD OF DIRECTORS AND ITS COMMITTEES

I – Independent             F – Financial Expert – Chair – Member

Concurrent with the 2018 Annual Meeting :

(1) Mr. Dickerson was appointed Chair of the Nominating and Corporate Governance Committee.

(2) Mr. Levenson was appointed Chair of the Compensation Committee.

(3) Ms. Shanahan was appointed to the Compensation Committee.

(4) Mr. Steger was appointed to the Audit Committee.

Our Board has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Each committee has a written charter which is reviewed at least annually to reflect the activities of each of the respective committees, changes in applicable law or other relevant considerations, with any changes approved by the full Board as recommended by each individual committee. Each committee is composed entirely of directors deemed to be, in the judgment of the Board, independent in accordance within the meaning of the NASDAQ Marketplace Rules. Our Board met eight (8) times in 2018. Each director attended at least 75% of the total number of meetings of the Board and the Board committees of which he or she was a member in 2018. While we do not have a formal policy requiring members of the Board to attend the Annual Meeting of stockholders, we encourage all directors to attend. All of our directors except one attended the Annual Meeting in 2018.

The following lists the members, number of meetings held, and primary functions with respect to each committee:

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

LEADERSHIP STRUCTURE OF THE BOARD OF DIRECTORS

The Board is led by an independent Board Chair. Pursuant to the Company’s Bylaws, the Board is permitted to either separate or combine the positions of Chief Executive Officer and Board Chair as it deems appropriate from time to time. We currently separate the roles of Chief Executive Officer and Board Chair in recognition of the differences between the two roles as they are presently defined. At present, the Board believes that separation of the positions of Chief Executive Officer and Board Chair improves the ability of the Board to exercise its oversight role over management, provides multiple opportunities for discussion and evaluation of management decisions and the direction of the Company, and ensures a significant role for the Board’s non-management directors in the oversight and leadership of the Company.

The Board understands that maintaining qualified independent and non-management directors on the Board is an integral part of effective corporate governance. In the last eighteen months, the Company took active steps to refresh the Board with highly qualified and experienced directors by adding two new independent directors, Ms. Shanahan and Mr. Steger, effective as of the 2018 Annual Meeting. There are presently seven directors who are independent within the meaning of the NASDAQ Marketplace Rules (Ms. Shanahan and Messrs. Albert, Dickerson, Levenson, Steger, Steuert, and Walsh), and one director who serves as Chief Executive Officer (Mr. Petterson). The Board believes its current leadership structure strikes an appropriate balance between independent directors and directors affiliated with the Company, which allows the Board to effectively represent the best interests of the Company and its stockholder base.

The position of the independent Board Chair, or the Lead Director when the Chief Executive Officer is concurrently serving as the Board Chair, is intended to provide a check and balance on the role and responsibilities of the Chief Executive Officer. The Board believes that the independent Board Chair is a strategic role that continues to add value to the Company.

CORPORATE GOVERNANCE

GOVERNANCE DOCUMENTS

Committee Charters

Each committee operates under a written charter, a copy of which is available on our website at www.gldd.com or may be obtained by writing to our Corporate Secretary at our principal executive office.

Code of Ethics

We have a written Code of Business Conduct and Ethics (the “ Code ”) that applies to all members of the Board and our employees, including our principal executive officer, principal financial officer, controller and persons performing similar functions. The Code is reviewed and updated on a regular basis, and a new version of the Code was adopted by the Board in May 2018. All of our salaried employees have reviewed and certified compliance with the Code. In addition, on an annual basis, all of our directors and salaried employees receive training on the Code. Senior management, as well as individuals with responsibility for foreign operations or purchasing, receives additional training on the Foreign Corrupt Practices Act and other international compliance topics.

Our Code can be found on our website at www.gldd.com . We will post on our website any amendments to or waivers of the Code for executive officers or directors, in accordance with applicable laws, regulations and listing standards. A copy also may be obtained by writing to our Corporate Secretary at our principal executive office.

THE BOARD OF DIRECTORS’ ROLE IN ENTERPRISE RISK MANAGEMENT

As part of our risk management process, senior management discusses and identifies major areas of risk on an ongoing basis and periodically reviews these risks with the Board. The Company’s management process is designed to enable the Board to best determine our risk management profile and oversee our risk management strategies. The Board delegated oversight of this enterprise risk management process to the Audit Committee. This process employs a framework for identifying and assessing key strategic, operational, financial and compliance risks based upon guidelines of the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”). The Company has adopted the COSO 2013 framework for internal controls. This framework has allowed the Company to enhance its internal control environment, which is an integral part of enterprise risk management. The product of this process is a risk management overview that is shared with the Audit Committee.

Assessment of Risks in our Executive Compensation Program

We do not believe risks arising from our executive and broad-based compensation policies and practices are reasonably likely to have a material adverse effect on the Company or our business, nor do we believe that the executive compensation programs encourage unnecessary or excessive risk taking.

The Compensation Committee reviews and approves corporate goals relating to our Chief Executive Officer’s compensation and approves total compensation for our senior executives. In addition, as part of our risk management process, senior management periodically identifies and discusses major areas of risk with the Board. As part of its regular reports to the Board, the Committee discusses the potential for unnecessary or excessive risk taking. For more detail on the process by which executive compensation is set, see “Compensation Philosophy and Objectives,” page 25.

Specifically, the Board and the Compensation Committee control risks arising from executive compensation policies and practices in part by controlling the mix of cash and long-term equity incentives. Executives’ base salaries are fixed in amount and thus do not encourage risk-taking. Annual incentives are capped for all named executive officers at 200% of target and annual incentives for all of our named executive officers are tied to overall corporate performance and individual objectives, which may include individual business unit performance. The compensation provided to the executive officers in the form of long-term equity awards helps further align executives’ interests with those of the Company’s stockholders. The Compensation Committee believes that these awards do not encourage unnecessary or excessive risk-taking because the ultimate value of the awards is tied to the Company’s stock price and operating performance and because awards are staggered and subject to long-term vesting schedules. Our long-term equity awards in combination with our stock ownership requirements help ensure that executives have significant value tied to long-term stock price performance and therefore are cognizant of how short-term decisions impact the long-term health of the organization.

In addition, management, the Compensation Committee and the Board each consider the risks associated with accounting and reporting, project cost estimating, compliance and safety. More specifically, the Compensation Committee retains subjective discretion in some instances to adjust short-term incentive formulas, which allows the Compensation Committee to review the results from the fiscal year and determine whether, despite achievement of financial goals, the intents and purposes of the Executive Leadership Annual Incentive Plan were met. In doing so, the Compensation Committee may consider whether activities taken during that fiscal year comport with the Company’s strategic plan and align management objectives with stockholder interests. As a result, the incentive may be adjusted on an individual basis, independent of achievement of formulaic targets.

In addition, certain awards granted in 2018 under our long-term incentive plan are comprised of equity that vests over a three-year period. These equity awards were structured to induce our executive officers to focus on the long-term capital appreciation, health and viability of the Company rather than a short-term increase in stock price.

CORPORATE GOVERNANCE

Finally, the Company has a Recoupment Policy, which requires certain compensation to be repaid to the Company if awarded as a result of misstated earnings. The Board will re-evaluate and, if necessary, revise the Recoupment Policy to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

SELECTION OF NOMINEES FOR BOARD OF DIRECTORS

Nominating and Corporate Governance Nomination Process

The Nominating and Corporate Governance Committee is responsible for evaluating potential candidates to serve on our Board and for recommending nominees to be presented for election or reelection to the Board at our Annual Meeting of stockholders. The Nominating and Corporate Governance Committee does not set specific minimum qualifications for director positions. In evaluating potential director candidates, including incumbent directors, the Nominating and Corporate Governance Committee considers the skills and characteristics possessed by each candidate in the context of the perceived needs of the Board in an effort to ensure there is a blend of skills and experience that will enhance the effectiveness of the Board.

In addition, whenever a new seat or a vacated seat on the Board is being filled, candidates that appear to best fit our needs are identified, and unless such individuals are well known to the Board, they are interviewed and further evaluated by the Nominating and Corporate Governance Committee. Candidates selected by the Nominating and Corporate Governance Committee are then recommended to the Board. After the Board approves a candidate, the Chair of the Nominating and Corporate Governance Committee extends an invitation to the candidate to join the Board.

When evaluating director candidates and considering incumbent directors for re-nomination to the Board, the Nominating and Corporate Governance Committee considers a variety of factors. Among the factors considered by the Nominating and Corporate Governance Committee are the following:

In identifying potential candidates for the Board, the Nominating and Corporate Governance Committee relies on recommendations from a number of possible sources, including current directors and officers. The Nominating and Corporate Governance Committee may also retain outside consultants or search firms to help identify potential candidates for membership on the Board.

Recommendation of Candidates by Stockholders

The Nominating and Corporate Governance Committee will consider stockholder recommendations for candidates for membership on the Board, provided that a complete description of such proposed nominee’s qualifications, experience and background, together with a statement signed by each proposed nominee in which he or she consents to act as such, accompanies the recommendations, and provided further that any such recommendation must also be made according to the procedures, and within the same time deadlines, applicable under our Bylaws to director nominations. Such recommendations should be submitted in writing to the Corporate Secretary and should not include self-nominations. Director candidates recommended by stockholders will be evaluated using the same criteria as those applied to other director candidates.

COMMUNICATING WITH THE BOARD OF DIRECTORS

Stockholders and other interested parties wishing to communicate with our Board of Directors can send communications to one or more members of the Board by writing to the Board or to specific directors (including independent directors or committee chairs) or to a group of directors at the following address:

Great Lakes Dredge & Dock Corporation Board of Directors

c/o Corporate Secretary

Great Lakes Dredge & Dock Corporation

2122 York Road

Oak Brook, Illinois 60523

Any such communication will be promptly distributed by the Corporate Secretary to the individual director or directors named in the communication or to all directors if the communication is addressed to the entire Board of Directors. Every effort has been made to ensure that the views of stockholders are heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner.

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

BOARD COMPOSITION

Our Board is currently composed of eight members divided into three classes. The members of each class are elected to serve three-year terms with the term of office of each class ending in successive years. Messrs. Albert, Dickerson, Steger and Steuert are members of the class whose term expires at the 2019 Annual Meeting. At the 2019 Annual Meeting of Stockholders, the class size will be reduced to three and the size of the Board will be reduced to seven. Messrs. Levenson and Walsh are members of the class whose term expires at the 2020 Annual Meeting. Mr. Petterson and Ms. Shanahan are members of the class whose terms expire at the 2021 Annual Meeting.

The Board of Directors has nominated Messrs. Dickerson, Steger and Steuert for election at the Annual Meeting to the Board of Directors for three-year terms expiring at the 2022 Annual Meeting of Stockholders and to hold office until their respective successors are elected and qualified or until their earlier death, disqualification, resignation or removal. Messrs. Dickerson, Steger and Steuert have each indicated a willingness to serve.

The persons named as proxies on the proxy card will vote the proxies received by them for the election of Messrs. Dickerson, Steger and Steuert, unless otherwise directed. In the event that a nominee becomes unavailable for election at the Annual Meeting, the persons named as proxies in the enclosed proxy card may vote for a substitute nominee at their discretion as recommended by the Board.

VOTE REQUIRED AND RECOMMENDATION

The nominees for director will be elected for three-year terms, provided that they receive a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. This means that, if a quorum is present, the three persons receiving the greatest number of votes at the Annual Meeting will be elected to serve as directors. As a result, withholding authority to vote for a director nominee and broker non-votes with respect to the election of directors will not affect the outcome of the election of directors. Proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement, which is three.

Director Qualifications

We believe that our director nominees, individually and together with our incumbent directors as a whole, possess the requisite experience and skills necessary to carry out their duties and to serve the best interests of the Company and its stockholders.

The following paragraphs provide information as of the record date of this proxy, including a brief biography with experience and description of certain key qualifications and skills, about each of our director nominees and incumbent directors.

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

DIRECTOR NOMINEES FOR ELECTION AT THE 2019 ANNUAL MEETING:

		Lawrence R. Dickerson, age 66
		Board Chair
		Director since: 2017
		Independent: Yes
		Committees: Nominating and Corporate Governance (Chair)

Mr. Dickerson spent 34 years at Diamond Offshore Drilling, Inc. (NYSE:DO), a deepwater oil and gas drilling contractor, where he served as a member of the Board of Directors from 1998, and also President and Chief Executive Officer from 2008, until his retirement in 2014. Prior to his service as President and Chief Executive Officer, Mr. Dickerson served as Chief Financial Officer, during which he helped take the company public, and Chief Operating Officer, during which he gained substantial operating and commercial experience. In addition to being a seasoned executive, Mr. Dickerson has significant board experience. He has been a member of the Board of Directors on the boards of Murphy Oil Corporation (NYSE:MUR), oil and gas exploration and production company, and Oil States International (NYSE:OIS), an oilfield equipment services company, since 2014. Mr. Dickerson is a member of the Audit and Nominating and Governance Committees at Murphy Oil Corporation, and a member of the Compensation Committee, and former member of the Audit Committee, at Oil States International. He was Chairman of the Board of Directors of Hercules Offshore, Inc. (NASDAQ:HERO) from 2015 – 2016, an offshore drilling company, and he also served on the Board of Directors of Global Industries, Ltd. (NASDAQ:GLBL), a subsea construction company from 2008 – 2012 and sold to Technip in 2011. Mr. Dickerson received a B.B.A. from the University of Texas.

Key Qualifications and Skills : Mr. Dickerson has experience as a President, Chief Executive Officer, Chief Financial Officer and Chief Operating Officer with prior service on several public boards, including as Chair of another publicly traded company and memberships on various Audit, Nominating and Governance and Compensation Committees. Mr. Dickerson has extensive operating and commercial experience in capital intensive businesses in deepwater oil and offshore/gas drilling industries, as well as governmental, international, public market, and large scale vessel construction experience.

Mr. Steger currently serves on the Boards of Directors of Global Eagle Entertainment Inc. (NASDAQ:ENT), where he holds the position of Audit Committee Chair, and Sentinel Energy Services Inc. (NASDAQ:STNL), where he is a member of the Audit Committee. Mr. Steger also serves as an Advisory Board Member of ATREG, Inc., and he previously served on the Boards of Directors of International Seaways, Inc. (NYSE:INSW) from 2016 – 2017, and Overseas Shipholding Group, Inc. (NYSE:OSG) from 2014 – 2018, where he also served as Audit Committee Chair. Additionally, Mr. Steger is currently a Senior Technical Advisor at Effectus Group, a boutique accounting advisory firm that specializes in serving high-growth technology companies. Until December 31, 2013, Mr. Steger worked as an Audit Partner for KPMG LLP, where he served a broad array of clients in the Fortune 1000 and middle market technology, chemical, food-service and semiconductor sectors. Additionally, Mr. Steger has gained significant knowledge regarding the marine services industry through his board service. Mr. Steger is a licensed Certified Public Accountant (retired status). He received a B.S. from Villanova University.

Key Qualifications and Skills : Mr. Steger has experience as a partner of one of the largest professional services networks in the world, with 37 years of accounting, advisory and consulting experience, including participation in Audit Committee investigations and PCAOB inspections, including prior service on several public boards, including as Audit Committee Chair and Corporate Governance and Risk Assessment Committee Chair. Mr. Steger has extensive experience with acquisition, divestiture, initial public offering, private equity and debt placement transactions, seconded with KPMG Munich for a three year period and has extensive experience with international debt and equity transactions.

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

		D. Michael Steuert, age 70
		Director since: 2017
		Independent: Yes
		Committees: Audit (Chair); Nominating and Corporate Governance

Mr. Steuert served as Senior Vice President and Chief Financial Officer of Fluor Corporation (NYSE:FLR), one of the world’s largest publicly traded engineering, procurement, construction, maintenance, and project management companies, from 2001 until his retirement in 2012. Prior to his service at Fluor, Mr. Steuert served as SVP and CFO of Litton Industries Inc., a defense contractor acquired by Northrop Grumman Corporation in 2001, and as Senior Vice President and Chief Financial Officer of GenCorp Inc., now Aerojet Rocketdyne, a technology-based aerospace and defense company (NASDAQ:AJRD), from 1990 – 1999. Mr. Steuert started his career at TRW Inc. In addition to his extensive executive leadership experience, Mr. Steuert has substantial board experience. He has been a member of the Board of Directors of Liquefied Natural Gas Limited (ASX:LNG) since 2015, and is a member of its Audit Committee, Compensation Committee and Chairman of its Risk Committee. He has also been a member of the Board of Directors of Weyerhaeuser Co. (NYSE:WY) since 2004 and is a member and former Chairman and financial expert of the Audit Committee. Mr. Steuert received a M.S. Industrial Administration and a B.S. Physics from Carnegie Mellon University

Key Qualifications and Skills : Mr. Steuert has extensive experience as a Chief Financial Officer, including prior service on public boards, including as Audit Committee Chair and financial expert and as Risk Committee Chair as well as memberships on multiple Audit committees and a Corporate Responsibility and Governance committee. Mr. Steuert has extensive leadership experience at one of the world’s largest publicly traded engineering, procurement, construction and maintenance project management companies.

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

CONTINUING DIRECTORS – TERM EXPIRING 2020

		Ryan J. Levenson, age 43
		Director since: 2016
		Independent: Yes
		Committees: Compensation (Chair); Nominating and Corporate Governance

Mr. Levenson is currently Principal and Portfolio Manager of Privet Fund Management LLC (“ Privet Fund ”), a hedge fund. Mr. Levenson currently serves on the Board of Directors of Hardinge, Inc. (NASDAQ:HDNG) and AgJunction, Inc. (TSX:AJX). Previously, Mr. Levenson served as a director of Frequency Electronics, Inc. (NASDAQ:FEIM) from 2016 – 2017, Cicero, Inc. (OTC:CICN) from 2015 – 2017 , RELM Wireless, Inc. (NYSE:RWC) from 2013 – 2014, where he served as a member of the Audit Committee, and as a director and member of the Compensation, Organization and Corporate Governance Committee of Material Sciences Corp. (NASDAQ:MASC) from May 2013 until its sale in March 2014. Mr. Levenson also served as a member of the Board of Directors and Compensation and Audit Committees of The Middleby Corporation (NASDAQ: MIDD) from 2006 – 2012. Prior to founding Privet Fund in February 2007, Mr. Levenson served as Vice President of Business Development at MSI, a privately held building products distributor and construction services company, from 2003 – 2006. Prior to his service with MSI, Mr. Levenson served as a financial analyst for Cramer Rosenthal McGlynn’s long/short equity hedge fund after working at SAC Capital Advisors LLC in a similar capacity. He received a B.A. from Vanderbilt University.

Agreement with Privet Fund

As previously disclosed in the Company’s filings with the SEC, pursuant to an agreement dated December 27, 2016 between the Company and Privet Fund (the “ Settlement Agreement ”), the Company agreed to include Mr. Levenson on its slate of nominees for the election of directors at the Company’s 2017 Annual Meeting of Stockholders. In March 2019, Mr. Levenson offered his resignation to the Board in accordance with Section 2.1 of the Settlement Agreement, which required Mr. Levenson to offer his resignation if Privet Fund’s aggregate beneficial ownership fell below 3.50%. Following consideration of Mr. Levenson’s contributions as a director, the Board declined his resignation.

Key Qualifications and Skills : Mr. Levenson has extensive background in private equity, investment and asset management, including prior service on several public boards, including membership on various Audit, Compensation and Corporate Governance Committees; and experience as a principal, portfolio manager and vice president of business development.

		Michael J. Walsh, age 64
		Director since: 2014
		Independent: Yes
		Committees: Compensation; Nominating and Corporate Governance

Major General Walsh USA (Ret.) served as Executive Vice President and Senior Vice President – Water Resources and Coastal Resiliency and National Program Director at Dewberry, a privately held professional services firm, based in Fairfax, VA until his retirement in 2018. He previously served as Deputy Commanding General for Civil and Emergency Operations for the U.S. Army Corps of Engineers (“ USACE ”) from 2011 – 2013, coordinating USACE emergency response and Federal Emergency Management Agency support during Superstorm Sandy, and in roles of increasing rank and responsibility in the U.S. Army since 1977. He has been awarded two bronze stars for actions in support of the nation’s combat operations over the course of his military career. Mr. Walsh received a M.S. from the University of Florida, a B.S. from Brooklyn Polytechnical University, and also attended the United States Army Command and General Staff College and Army War College. Mr. Walsh is also a National Association of Corporate Directors (“ NACD ”) Board Leadership Fellow.

Key Qualifications and Skills : Mr. Walsh has extensive experience in government contracting with a track record of leadership, and provides invaluable insights into the needs and priorities of the Company’s largest client, the USACE.

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

CONTINUING DIRECTORS – TERM EXPIRING 2021

		Lasse J. Petterson, age 61
		Director since: 2016
		Independent: No
		Committees: N/A

Mr. Petterson was named Chief Executive Officer in May 2017 and has served as a member of our Board since December 2016. Prior to his employment with the Company, Mr. Petterson served as a private consultant to clients in the oil and gas sector, and was Chief Operating Officer and Executive Vice President at Chicago Bridge and Iron Company N.V. (NYSE:CBI), an engineering, procurement and construction company, from 2009 – 2013. Prior to CB&I, Mr. Petterson was Chief Executive Officer of Gearbulk, Ltd., a privately held company that owns and operates one of the largest fleets of gantry craned open hatch bulk vessels in the world. He was also President and Chief Operating Officer of AMEC Inc. Americas, a subsidiary of AMEC plc (NASDAQ:AMFW), a British multinational consulting, engineering and project management company. Prior to joining AMEC, Mr. Petterson served in various executive and operational positions for Aker Maritime, Inc., the deepwater division of Aker Maritime ASA of Norway over the course of 20 years. He spent the first nine years of his career in various positions at Norwegian Contractors, an offshore oil & gas platform contractor. Mr. Petterson is a National Association of Corporate Directors (“ NACD ”) Board Leadership Fellow. He received a M.Sc. Engineering from Norwegian University of Technology and a B.S. from Norwegian University of Technology.

Key Qualifications and Skills : For two decades, Mr. Petterson has served in various executive and operational positions, and most recently has extensive experience as Chief Executive Officer, Chief Operating Officer and President. He has particular experience in multinational consulting, engineering and project management; extensive engineering, procurement and construction experience in the oil and gas sector, including offshore oil and gas platform contracting; and operational experience with maritime companies.

		Kathleen M. Shanahan, age 60
		Director since: 2018
		Independent: Yes
		Committees: Compensation

Ms. Shanahan is currently a Co-Chief Executive Officer of Turtle & Hughes, Inc., a family- and employee-owned, as well as a certified women-owned business, which services the industrial, construction, commercial, electrical contracting, export and utility markets. Ms. Shanahan has served as Chair of Ground Works Solutions (previously known as URETEK Holdings, Inc.), which provides foundation lifting and soil stabilization solutions, since 2011 and previously also served as Chief Executive Officer from 2011 – 2016. Ms. Shanahan also previously served as the Chair and Chief Executive Officer of WRS Infrastructure & Environment, Inc. (d/b/a WRScompass), an environmental engineering and civil construction company, as a member of the Board of Directors and Audit Committee of TRC Companies, Inc. (NYSE:TRR) from 2015 – 2017, and as a member of the Board of Directors and Chair of the Executive Compensation Committee of WCI Communities, Inc. (NYSE:WCI) from 2004 – 2007. Additionally, Ms. Shanahan has held numerous positions in government and public policy, having served on the campaigns and administrations as Chief of Staff for Florida Governor, Jeb Bush and for Vice President-elect, Dick Cheney; Deputy Secretary of the California Trade and Commerce Agency for California Governor, Pete Wilson; special assistant to Vice President, George H.W. Bush; and as staff assistant on President, Ronald W. Reagan’s National Security Council. Ms. Shanahan currently serves on the boards of several private companies, including Lumia Analytics, PRISM, Tampa General Hospital, and Hillsborough Area Regional Transit. She is a member of Women Corporate Directors and the International Women’s forum. Ms. Shanahan previously served on the board of TerraSea Environmental Solutions LLC, one of the Company’s previous joint ventures.

She received a M.B.A. Executive Business Administration from New York University Leonard N. Stern School of Business and a B.A. Nutrition Biochemistry and Economics from the University of California San Diego.

Key Qualifications and Skills : Ms. Shanahan has served in various executive and operational positions, and most recently has extensive experience as Chair and Chief Executive Officer of a company engaged in geotechnical construction and government contracting. She has prior service on private and public boards, including membership on various Audit and Compensation Committees. Ms. Shanahan has extensive development, leadership and management of environmental remediation, geotechnical, and civil construction operations, and experience in public policy and public affairs matters, involving advisory, communication, development and implementation strategies.

2018 DIRECTOR COMPENSATION

The compensation of our directors is determined by the Compensation Committee and ratified by the Board. Directors who are employees of the Company do not receive separate compensation for their services on the Board. The annual compensation package for our non-employee directors is designed to attract and retain highly experienced and qualified individuals to serve on the Board and promote a strong alignment of interests between the Company’s non-employee directors and its stockholders.

The Compensation Committee annually reviews the design of the annual compensation package for non-employees directors. The Company believes that the compensation of our non-employee directors fairly reflects the work and skills required for a company of our size and complexity. The compensation package was established following consultation with FW Cook, the Compensation Committee’s independent compensation consultant, and was intended to be competitive relative to the Company’s peer group and general industry market data. No changes to our non-employee director compensation program were made during 2018.

Each of our non-employee directors currently receives an annual retainer of $155,000, payable quarterly in arrears. The retainer is generally payable 50% in cash and 50% in grants of fully vested shares of our common stock at the end of each fiscal quarter. Following the adoption of the 2017 Long-Term Incentive Plan (the “ 2017 LTIP ”), either the Nominating and Corporate Governance Committee or the Compensation Committee may be responsible for reviewing and approving grants of common stock to our non-employee directors. In addition to the annual retainer, our Board approved the annual retainers for committee service or committee chair service, as applicable, as set forth below. The committee annual retainers are paid in cash to the committee members each quarter in arrears. Directors are permitted to elect to receive a greater percentage of their annual retainers in common stock rather than cash.

We also reimburse non-employee directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings.

Beginning in 2018, directors were allowed to defer their cash retainers and the equity component of their annual retainers into deferred stock units payable in shares of the Company’s common stock upon the director’s separation from the Board or such other date as selected by the Director or mandated by the terms of the Great Lakes Dredge & Dock Corporation Director Deferral Plan.

2018 DIRECTOR COMPENSATION

STOCK OWNERSHIP GUIDELINES FOR NON-EMPLOYEE DIRECTORS

Non-employee directors are subject to a stock retention requirement and are required to retain common stock in the amount of five times the annual cash retainer received for service as a member of the Board. For 2018, that amount was $387,500 in common stock. Until the required ownership level is achieved, non-employee directors are required to hold at least 50% of the shares received as equity compensation (after taxes). All directors have either achieved the required ownership level or are in compliance with the retention requirement.

PROPOSAL NO. 2 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as the independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2019. During 2018, Deloitte & Touche LLP also served as our independent registered public accounting firm and, in addition, provided certain tax and other audit-related services, see “Matters Related to Independent Registered Public Accounting Firm – Professional Fees” on page 21 . Representatives of Deloitte & Touche LLP are expected to attend the Annual Meeting, where they will be available to respond to appropriate questions and, if they desire, to make a statement.

VOTE REQUIRED AND RECOMMENDATION

Deloitte & Touche LLP will be ratified as our independent registered public accounting firm for the year ending December 31, 2019 provided this proposal receives the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote thereon, assuming a quorum is present. Abstentions will be treated as being present and entitled to vote on the matter and, therefore, will have the effect of voting against the proposal.

Although we are not required to seek stockholder ratification of this appointment, the Audit Committee and the Board believe it to be sound corporate practice to do so. If the appointment is not ratified, the Audit Committee will reconsider the appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.

PROPOSAL NO. 2 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

MATTERS RELATED TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP has been appointed by the Audit Committee to be our independent registered public accounting firm for the year ending December 31, 2019. Stockholders are being asked to ratify the appointment of Deloitte & Touche LLP at the Annual Meeting pursuant to Proposal No. 2 on page 20 of this Proxy Statement.

Professional Fees

We paid the following professional fees to our independent registered public accounting firm, Deloitte & Touche LLP and its affiliates, for the years ended December 31, 2018 and 2017:

AUDIT COMMITTEE PRE-APPROVAL POLICY FOR INDEPENDENT ACCOUNTANT SERVICES

The Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. From time to time, however, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee may also pre-approve services on a case-by-case basis. The Audit Committee may delegate pre-approval authority to one or more of its members. For the year ended December 31, 2018 the Audit Committee pre-approved all such audit and non-audit services, including tax services, provided by the independent registered public accounting firm.

REPORT OF THE AUDIT COMMITTEE

With respect to 2018, the Audit Committee has:

Based on the foregoing review and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for 2018.

The Audit Committee of the Board of Directors:

D. Michael Steuert, Chair

Carl A. Albert

Ronald R. Steger

D. Michael Steuert, Chair

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Named Executive Officers

The Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy and programs for our Chief Executive Officer, Chief Financial Officer, and our three other most highly compensated executives serving as executive officers of the Company on December 31, 2018 (the “ named executive officers ”). For 2018, our named executive officers were:

This section also describes the objectives of the Company’s executive compensation program, the performance goals the program is designed to encourage and reward, and the determination of the formulas to measure performance and award levels. For additional information regarding compensation of the named executive officers; see “Summary of Compensation Key Elements” on page 24.

Executive Summary

2018 Business Overview

In 2018, we believe we executed successfully on our strategic initiatives, which emphasized completing our restructuring plan and strengthening our balance sheet to position the Company for future investments and positive growth for our stockholders. We continued to strengthen our relationships with key clients by providing innovative solutions and by delivering cost-effective and time-efficient project completions. We achieved these objectives in 2018, while at the same time, delivering improved financial results and continuing a trend of exceptional safety performance. We strive to create the safest project and facility sites in the dredging industry and, in 2018, we saw a 27% reduction in our recordable injury rate. During the year, we also reviewed our environmental and infrastructure segment and concluded that, while it has experienced improvement from prior years, the business is not well-aligned enough with our core dredging business to continue operating it under our portfolio of assets, and we intend to divest the business in the first half of 2019.

2018 Financial Review

Our financial performance for the year was driven by excellent fleet utilization and project execution and included improvement in a number of key financial metrics. The Company continued to execute on its restructuring and other cost saving initiatives and completed the year ahead of plan. Other notable financial achievements include:

Pay-for-Performance

As discussed in more detail below, a primary goal of our executive compensation program is to achieve accountability for performance by linking elements of executive compensation to achievement of measurable performance objectives that reflect our strategic plan. Because the majority of total direct compensation is in the form of performance-based variable pay awards (annual incentive awards and long-term incentive equity awards), the aggregate total direct compensation of our executives is designed to increase when the Company’s performance exceeds, and to decrease when the Company’s performance falls short of, our strategic and financial goals. Total direct compensation for each of our executives can also increase or decrease based on individual performance. We also measure our target total direct compensation relative to a peer group of companies; see “Competitive Market Review” on page 27 .

EXECUTIVE COMPENSATION

In 2018, we believe our executive compensation program met our goal of driving performance. As is detailed more fully in Changes to the 2018 Executive Program below, given the ongoing, successful execution of the aggressive restructuring plan introduced in 2017 and other important strategic initiatives including debt reduction, the Compensation Committee introduced a special, one-time long-term incentive program that rewarded significant over-achievement of our financial goals. The CEO recommended but did not participate in this program. We believe that this program in particular drove the extraordinary financial improvement in 2018: quantitative goals were over-achieved in 2018 as compared to target and were far superior to 2017 achievement, and qualitative goals were met or exceeded. As a result, compensation for our executives was greater than target.

Compensation Program Reflects Best Practices

We designed our executive compensation program to drive performance toward the achievement of our short-term and long-term goals and to increase stockholder value, while appropriately balancing risk and reward. In March 2018, the Compensation Committee (for purposes of this “ Executive Compensation ” section of the proxy statement, the “ Committee ” ) conducted its annual review and risk assessment of the Company’s executive compensation policies and practices. Following this review, the Committee concluded that our executive compensation program was appropriately designed for the size and complexity of the Company and was not reasonably likely to encourage excessive risk-taking. The Committee intends to regularly review our executive compensation program and incorporate commonly viewed best practices as it deems appropriate; examples of best practices that we have adopted include:

“Say-on-Pay” Advisory Vote on Executive Compensation

At the 2018 Annual Meeting of Stockholders, approximately 59% of voting stockholders cast an advisory vote in support of the Company’s executive compensation program, which was lower than the historic stockholder support received for the program. The Committee considered this vote during its annual examination of the executive compensation program as one of many factors in deciding the Company’s ongoing executive compensation policies and procedures. Although the Committee had already made a number of changes to the executive compensation program prior to the advisory vote, as a result of the historically low support, the Committee determined to engage in specific stockholder outreach regarding the executive compensation program; see “Say-on-Pay Vote and Subsequent Investor Outreach” on page 5 .

Changes to the 2018 Executive Compensation Program

The Committee reviews our executive compensation program on a continuous basis and, in 2017, made several significant changes for 2018 and onward that we believe will align our executive compensation program with the achievement of our long-term strategic goals.

EXECUTIVE COMPENSATION

First, the Committee decided to fund all of the named executive officers’ annual incentive compensation based on the entire Company’s results, as opposed to funding the business segment leaders’ incentive pools on business segment results. We believe that this change enhances alignment across our divisions and among our named executive officers. Business segment leaders do continue to have individual goals based on the performance of their respective divisions, which may increase or decrease the formulaic payout determined based on Company results.

Second, the Committee determined that performance-based restricted stock units under our 2018 program would vest based on the achievement of performance metrics related to earnings before interest and taxes (“ EBIT ”) because, as we are a capital intensive company, we believe that the use of EBIT (which includes our depreciation expense) ties a significant portion of executive compensation to the achievement of both our earnings growth and capital efficiency goals.

Third, the Committee approved the implementation of a special one-time long-term incentive program. This program was recommended to the Committee by our CEO, but is for all long-term incentive plan participants other than himself. The special program was designed to incentivize the continued focus of the senior management team on the goals set forth in our restructuring plan with respect to both operational performance and cost savings targets. This supplemental program includes a significant stretch target goal, is entirely performance-based using two successive one-year stretch target goals based on earnings before taxes (“ EBT ”), includes an additional one-year post-performance period vesting period and is self-funded, meaning that the increase in earnings achieved exceeded the amount paid out in additional incentives. The Committee chose EBT because it wanted to specifically drive debt reduction in addition to the earnings growth and capital efficiency goals mentioned above.

Summary of Compensation Key Elements

The following table outlines the framework of the main elements of our executive compensation program for our named executive officers. Each element serves a different yet critical purpose in achieving the objectives of the program. Overall executive compensation is structured to place an increasingly larger amount of compensation at risk at successively higher levels of management.

EXECUTIVE COMPENSATION

Compensation Philosophy and Objectives

The Company’s executive compensation program is designed to attract and retain highly skilled, performance-oriented executives and closely align compensation paid to our named executive officers with our operating and financial goals. The Committee regularly discusses the general principles that form the basis of our executive compensation program. The objectives, which guided the Committee’s executive compensation decisions in 2018, are discussed below.

Aligning Compensation with Stockholder Interests

The primary goal of our executive compensation program is to align the interests of our executives with those of our stockholders. The key elements utilized to help achieve such an alignment include:

Rewarding Both Annual and Long-Term Performance, with an Emphasis on Long-Term Performance

The various components of our executive compensation program are intended to reward the achievement of both annual and long-term strategic and financial performance by the Company, the Company’s business divisions, and individual executives. In all cases, objectives place a greater emphasis on long-term, sustainable performance. The key pay elements utilized to help drive performance include:

Motivating and Retaining Employees

It is our goal to provide opportunities that are generally competitive with our peer companies in order to attract, motivate and retain highly experienced employees in key executive positions. These opportunities include:

Mix of Compensation

In light of the focus of our executive compensation program on sustainable long-term performance and increased stockholder value, the majority of total direct compensation for our named executive officers is granted in the form of variable compensation. The following chart illustrates the relative value of the fixed and variable compensation components for our ongoing 2018 total direct compensation program (base salary, annual incentive awards and long-term incentive equity awards) as a percentage of 2018 total direct compensation. The below percentages do not include the performance-based equity granted under the 2018 Special Incentive Program to the named executive officers (for purposes of this “Mix of Compensation” section of the proxy statement, the “NEOs” ) other than the CEO, as it is not a part of the named executive officers’ ongoing compensation package.

EXECUTIVE COMPENSATION

Implementation of Compensation Objectives

Our annual executive compensation review is undertaken at the direction and under the supervision of the Committee. Our CEO provides recommendations regarding the compensation of the other named executive officers, but is not involved in setting his own compensation.

Generally, in the first and fourth quarter of each year, the Committee reviews our historical pay, Company and individual performance information, including our performance relative to the objectives set forth in the prior year’s incentive program. Based on our performance, as well as recommendations from our CEO for executive officers other than himself, the Committee approves annual incentive awards for executive officers. The Committee also determines the executive compensation program for the current year. As part of this process, the Committee reviews the aggregate value of the total compensation opportunities provided to each of the executive officers. Following the review, the Committee determines annual base salaries, target annual incentive compensation, and long-term incentive opportunities for each executive officer. The Committee also approves the goals and performance metrics for our annual incentive compensation and the performance-based component of our long-term incentives. In the first quarter of 2018, the Committee set performance goals for the annual incentive compensation and long-term incentive programs. When calculating achievement of performance goals, budgeted and actual incentive pay is excluded from the calculation due to circular reference.

Long-term incentives are awarded pursuant to the 2017 LTIP, a stockholder approved equity plan. Every year, the Committee reviews the mix of types of incentives and the percentage of each type of incentive granted. In 2018, the Committee chose to grant restricted stock units with a combination of performance-based and service-based vesting conditions. The Committee believes this mix of grant types motivates key executives to drive business results against the Company’s goals, further aligns management’s interests with those of our stockholders over the long-term, and retains individuals deemed critical to the Company’s future success.

It is the Committee’s policy to authorize and grant equity awards as of the date of the Committee meeting at which such awards are approved by the independent directors who serve on the Committee, based upon the fair market value of our common stock as of the grant date of the award. The Committee determines the value of the award to be made to each recipient and the terms and conditions

of the awards including the applicable time and performance vesting criteria. For additional detail on the Company’s grants in 2018, refer to “Long-Term Incentive Awards” on page 30.

Throughout the year, the Committee discusses the philosophy for the overall executive compensation packages and decides whether changes should be made in the design of the program.

Role of Management in Establishing Compensation

At the direction of the Committee Chair, management generally prepares materials for the Committee in advance of its meetings. During the annual evaluation process, the CEO evaluates the performance of our named executive officers (other than himself) and other senior executives and provides a recommendation to the Committee with respect to changes to base salary, annual performance incentive, and long-term incentive equity awards. As part of regular Committee meetings, Committee members generally meet in executive session, during which members of management are not present.

EXECUTIVE COMPENSATION

Compensation Consultant

Pursuant to its charter, the Committee has the independent authority to engage the services of outside advisors and experts, including executive compensation consultants. The role of the compensation consultant is to provide independent, expert advice to the Committee on the design of the Company’s compensation programs and the level of compensation paid to our senior executives. The Committee engaged FW Cook as its compensation consultant with respect to 2018 executive compensation matters, including an assessment of the reasonableness of executive compensation levels and the appropriateness of the Company’s executive program structure in supporting the Company’s business objectives. In 2018, the Compensation Consultant also advised on the design and implementation of the Special Incentive Program.

The Compensation Consultant reports directly to the Committee and was not utilized to perform any other services for the Company. The Committee has assessed the independence of the Compensation Consultant and concluded that its work is independent of management and does not raise any conflict of interest. The Committee has the authority to hire and dismiss the Compensation Consultant, as well as to establish new engagements. If requested by the Committee, a representative of the Compensation Consultant may participate in Committee meetings. Management did not engage a separate executive compensation consultant during 2018.

For purposes of this proxy statement, the term “ Compensation Consultant ” refers to FW Cook.

Competitive Market Review

The Committee considers salary, annual incentive compensation and long-term incentive compensation for the named executive officers against competitive market information. In 2018, the peer group consisted of the following 15 companies (“ Peer Group ”):

The Committee selected this Peer Group with the assistance of its Compensation Consultant, after considering U.S. based public companies in the same and similar Global Industry Classification System (GICS) Industry Group with comparable revenues, total assets and enterprise value. The Compensation Consultant considered companies with similar lines of business as the Company, namely asset-intensive companies that provide infrastructure and engineering services and are of similar size to Great Lakes. The Compensation Consultant recommended maintaining a similar peer group as utilized for 2018 executive compensation decisions, removing Granite Construction and Tetra Tech and adding Badger Daylighting and NV5 Global. Select comparative financial measures for the Peer Group are summarized below:

The Committee utilizes the Peer Group as a reference point for decisions relating to our executive compensation program involving our named executive officers. Executive compensation data from the Peer Group is aggregated by the Compensation Consultant and presented to the Committee in summary form. The Committee reviews the aggregated data to obtain a general understanding of current executive compensation practices utilized by our Peer Group and as a market check that the Company’s pay practices are generally competitive and fulfill the Committee’s stated goal of attracting and retaining its named executive officers. The Committee does not target specific levels of executive compensation as compared to the Peer Group.

On an annual basis, the Compensation Consultant provides a competitive market assessment, which includes a report on the compensation of our named executive officers, relative to a market median (developed based on an analysis of the compensation elements from the Peer Group). The Committee considers the competitive market assessment when making its final executive compensation decisions, and it is the Committee’s current intention to continue annual competitive market assessments to evaluate whether our senior executives are compensated appropriately in terms of levels and design.

Components of Executive Compensation

The primary elements of our compensation program for named executive officers are base salary, an annual incentive opportunity, and long-term incentive awards. Each component is designed to contribute to a total executive compensation package that is competitive, performance-based, and supportive of our financial and strategic goals. In determining the total compensation of the named executive officers, the Committee considers our operating and financial performance as a whole as well as each executive’s execution of the responsibilities associated with his or her respective position.

EXECUTIVE COMPENSATION

Base Salary

We seek to provide competitive base salaries that allow us to attract and retain executive talent without incurring excessive fixed costs. Accordingly, we consider a variety of factors such as salaries of executives in similar positions in our Peer Group, our executives’ skills, experience, and knowledge, responsibilities required of the executives in their roles, importance of the position to the Company and the difficulty of replacement. Increases to executives’ base salaries also result in increases to annual incentive opportunities and long-term incentive awards because target annual incentive compensation and target long-term incentives are calculated as a percentage of base salary.

Effective January 1, 2018, most of our continuing named executive officers received salary increases. Decisions regarding individual salary levels were based upon a review of multiple criteria including market data of our Peer Group, the individual’s performance, the Company’s performance and the advice of the Compensation Consultant. Nominal base salary increases were provided to our named executive officers based on Peer Group and general market data.

Annual Incentive Compensation

The Company’s annual incentive compensation program is designed to be supportive of the Company’s short-term operating objectives and to provide competitive target total annual executive compensation opportunities. In 2018, the Company granted annual incentive compensation pursuant to the Executive Leadership Annual Incentive Program, which was administered under the 2017 LTIP. All of our named executive officers participated in the program, which was designed by the Committee.

The target incentive pool was equal to the sum of each participant’s individual target with the actual incentive pool funded based on achievement of certain Company financial performance measures. Performance for the named executive officers other than the CEO was measured based 80% on the financial results of the Company as a whole (measured using EBITDA, excluding restructuring) and 20% on individual goals focused on execution of the Company’s strategic plan and other priorities of the Company. Performance for the CEO was measured based solely on the financial results of the Company as a whole. The Committee also considered, but did not assign a specific weight to, the individual qualitative goals listed below when determining whether to modify the CEO’s actual award. The metrics selected by the Committee for purposes of determining annual incentive compensation consisted of the following:

EXECUTIVE COMPENSATION

As noted above, Adjusted EBITDA was measured based on the financial results of the entire Company, excluding restructuring. Although the Company decided to place the environmental & infrastructure business into discontinued operations at the end of 2018, because there had been a full year of financial performance for the business and the target Adjusted EBITDA goals were determined originally based on the inclusion of the business, the Committee elected not to adjust the metric by excluding the environmental & infrastructure business financial results when measuring the Company’s Adjusted EBITDA performance. Thus, the metric was based on historic operations of the Company (consistent with the financial target set at the beginning of the year) and not on continuing operations. Had the Committee elected to adjust the financial targets to exclude discontinued operations, the performance-based compensation would have earned at a higher level.

For 2018, the Committee set a Company Adjusted EBITDA (excluding restructuring) target of $93.4 million, which represented a 63% increase over the prior year’s actual Company Adjusted EBITDA performance for incentive purposes of $57.3 million. Company Adjusted EBITDA as compared to budget funded the incentive pool for the Executives was as follows:

Actual Company Adjusted EBITDA, excluding restructuring, of $105.5 million was above target and funded the portion of the Executive’s incentive allocation to Company performance at 156% of target. The Committee retains subjective discretion to adjust payout results as it deems appropriate and in accordance with the terms of the plan. Adjustments are generally intended to mitigate the effects of unanticipated events that, unless excluded, would be inconsistent with the intent of the annual incentive compensation program. In 2018, the Committee did not exercise its subjective discretion to adjust the quantitative performance measures.

Individual Performance Consideration

Once the financial and individual goals are calculated and weighted, the annual incentive pool is allocated to the key executives based on overall individual performance, as approved by the Committee after considering each executive’s performance and the recommendation of the CEO. Decisions regarding actual individual incentive awards are based upon funded amounts for the annual incentive pool and a qualitative evaluation of the key executive’s performance and the executive’s individual contribution to overall company performance. While the Committee may modify calculated annual incentives from 0-150% based on individual performance, individual modifications are expected to be generally +/- 10% of calculated amounts, except in extraordinary circumstances. Each named executive officer typically submits a written self-appraisal regarding the achievement of his or her pre-established qualitative goals for the year. The pre-established qualitative goals are ordinarily set at the beginning of the performance period for each named executive officer and are designed to motivate performance with respect to other stated strategic, operational, financial and corporate objectives. This year, the named executive officers’ qualitative assessment also included individual goals based on strategic initiatives set by the CEO and individual execution of certain elements relating to these strategic initiatives. For the named executive officers other than the CEO, the appraisals are reviewed by the CEO. Mr. Petterson provided performance appraisals for each of the named executive officers, which were then discussed with the Committee. The self-appraisal for the CEO is discussed with the Committee. The Committee, in its subjective judgment, awarded annual incentive awards to the key executives based on both achievements of these qualitative goals as well as the quantitative Adjusted EBITDA goal discussed above.

Each of our named executive officers received actual payouts in March 2019 under their respective 2018 performance-based annual incentive award as reflected in the following table:

As mentioned throughout and discussed in more detail below, Mr. Petterson did not participate in the Special Incentive Program, which he recommended for other Company leaders as a means to incentivize extraordinary performance. The Committee discussed the exclusion of the CEO from the Special Incentive Program in light of the overall Company performance and concluded that special recognition was justified based on Mr. Petterson’s contributions to the execution of our operating achievements that drove our strong performance.

EXECUTIVE COMPENSATION

In taking such action, the Committee considered whether it was appropriate to make a discretionary compensation decision but concluded that the extraordinary performance warranted the action. In particular, the Committee assigned significant weight to:

Accordingly, the Committee awarded Mr. Petterson a special recognition bonus in the amount of $500,000, to be paid half in cash and half in equity (based on the closing price of the stock on the date bonuses were paid). The Committee noted that this amount was considerably less than Mr. Petterson would have earned in 2018 had he participated in the Special Incentive Program.

Long-Term Incentive Awards

The 2017 LTIP permits the Company to grant restricted stock units, performance-based restricted stock units and other awards to eligible individuals, which awards may be subject to one or more performance measures selected from a broad range of permitted performance goals.

The Committee considers and reviews many factors in determining the appropriate mix of long-term equity incentive awards, including the prevalence and composition of equity awards reported in the competitive market assessment and the mix of awards required to effectively incentivize management, and reward the creation of value for stockholders and strong overall strategic and financial performance. For 2018, the Committee selected the following forms of Long-Term Incentives:

The aggregate value of a named executive officer’s long-term incentive equity award is determined by the Committee based, in part, upon the contribution that the named executive officer is expected to make to the overall growth, strategic and financial

EXECUTIVE COMPENSATION

performance of the Company during the vesting period. The Committee also considers long-term incentive equity compensation levels of our Peer Group and the annual competitive market assessment. While the Company maintains stock ownership guidelines ( see “Other Compensation Related Matters – Stock Ownership and Retention Guidelines” on page 32 ), the Committee does not consider existing stock ownership levels of individual executives in determining the amount of long-term incentive equity awards.

Target values for 2018 awards were determined by the Committee in conjunction with its consideration of the 2018 competitive market assessment. In March 2018, the named executive officers were granted a mix of RSUs and PSUs with target opportunities as a percentage of salary. In addition, the Special Incentive Program was also granted to incentivize delivery of strategic plan elements and align interests of management with stockholders, as discussed more fully above.

The total grants and grant-date fair values for the LTI awards granted under the regular program are as follows:

The total grants and grant-date market values for the LTI awards granted under the Special Incentive Program are as follows:

The Committee determined that each performance metric was achieved for the respective performance period and, as a result, the named executive officers were issued the 2018 regular PSUs. The SIPs were earned but remain subject to time vesting requirements. Specifically, actual Company EBIT, excluding restructuring, was $57.6 million (earning at 200% of target for the PSUs) and actual Company EBT, excluding restructuring, was $24.9 million (earning at 197% of target for the SIPs). The tables below identify the EBIT performance criteria for the outstanding PSU grants and the EBT performance criteria for the outstanding SIP grants for the 2018 performance periods:

Although not listed above, when the threshold, target and maximum performance criteria were set in early 2018, the Committee also set and increased performance levels for 2019 (for both the PSUs and the SIPs) and 2020 (for the PSUs).

EXECUTIVE COMPENSATION

OTHER COMPENSATION RELATED MATTERS

Additional Benefits

The Company has adopted benefit programs that are supportive of business and human resource strategies and that provide for the delivery of equitable value to executives relative to lower level employees. The Company strives to avoid programs that do not support an identifiable business objective.

Accordingly, the named executive officers generally participate in the same benefits program that is provided to other employees, including life and medical insurance and 401(k) matching and profit sharing. Our 401(k) plan provides that we will match, dollar for dollar, up to 6% of an employee’s salary and incentive compensation that is contributed to his or her 401(k) account. We also may provide a profit sharing contribution to an employee’s 401(k) account as a percentage (between 0% and 7%) of the employee’s salary. However, the IRS limits the total annual contribution for an employee into a qualified plan. This amount was $18,500 for 2018.

Supplemental Savings Plan

In addition, our named executive officers as well as other eligible employees may contribute to a Supplemental Savings Plan, a nonqualified deferred compensation plan that allows eligible employees to elect to defer salary and annual incentive compensation and to receive matching and profit sharing contributions in excess of the maximum amounts that they can defer or receive under the 401(k) plan due to IRS limits. Although the Supplemental Savings Plan is unfunded, participants may elect to notionally invest deferred amounts in most of the investment alternatives that are available under the qualified 401(k) plan. Participants also elect when to receive distributions of deferred amounts under the Supplemental Savings Plan. No tax gross-ups will be provided to participants under the Supplemental Savings Plan. In 2018, all of the eligible named executive officers participated in the Supplemental Savings Plan.

Compensation Recoupment (“Clawback”) Policy

We have a compensation recoupment policy which requires certain cash and equity incentive compensation to be repaid to the Company if awarded as a result of inaccurate financial data. The policy applies to current and former executive officers of the Company, as well as other employees designated by the Board or the Committee. In addition, the policy allows the Committee to recoup compensation paid to an employee as a result of any conduct justifying termination for cause of that employee.

Employment Agreements

As of December 31, 2018, and discussed beginning on page 38 , all of our continuing named executive officers had written employment agreements which would entitle each executive to severance benefits depending upon the circumstances of resignation or termination. The Committee believes that these agreements provide essential protections to both the named executive officers and the Company. Agreements providing for severance and change-in-control payments assist us in attracting and retaining qualified executives who have job alternatives. At the same time, the applicable agreements preserve our valuable assets by imposing upon the executives’ non-competition and non-solicitation restrictions, confidentiality obligations, and cooperation covenants.

The Board and the Committee believe that retention of key personnel is an important goal, and employment agreements are one vehicle for retaining top talent and are in our best interest and the best interest of our stockholders, particularly in the context of any potential transaction. The Board and Committee believe that the severance benefits agreed to in the case of these termination events are reasonable in light of the potential value delivered to stockholders in return. These agreements do not provide excise tax gross-ups.

Stock Ownership and Retention Guidelines

The Company maintains guidelines for stock ownership with respect to its named executive officers, senior executives and vice presidents. The purpose of the guidelines is to encourage our executives and vice presidents to demonstrate a commitment to the

Company and its stockholders by retaining a required value of Company stock. Each executive and vice president is provided with a reasonable period of time to attain the required ownership level. The guidelines provide that each named executive officer retain a number of eligible shares with a value at least equal to a multiple of his or her base annual salary as follows:

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All shares of common stock are eligible shares and count towards the retention requirement, with the shares of common stock valued using an average of the closing stock price over the prior month. Each named executive officer must retain 50% of net profit shares realized upon the: (i) exercise of stock options, (ii) settlement of performance-based restricted stock units, and (iii) vesting of restricted stock units until the required retention value is attained. As of December 31, 2018, each of our named executive officers was in compliance with the guidelines through meeting the retention requirement or complying with the retention ratio of 50% of net profit shares.

Derivatives Trading and Pledging

Because a primary goal of our equity-based incentive compensation program is to align the interests of our senior executives with those of our stockholders, we discourage the trading of derivative securities related to shares of our stock, including hedging strategies, puts, calls or other types of derivative securities. Our derivatives policy also discourages pledging shares of our stock.

COMPENSATION COMMITTEE INTERLOCKS WITH INSIDER PARTICIPATION

The Compensation Committee is comprised of Ryan J. Levenson (Chair), Kathleen M. Shanahan and Michael J. Walsh, none of whom is an employee or current or former officer of our Company, or any of the Company’s subsidiaries, nor had any relationship with our Company requiring disclosure. The Board has determined that Messrs. Levenson, Walsh and Ms. Shanahan are independent in accordance with NASDAQ listing rules. There were no interlocking relationships during the fiscal year ended December 31, 2018.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors has reviewed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on such review and discussions with the Company’s management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:

Ryan J. Levenson, Chair

Kathleen M. Shanahan

Michael J. Walsh

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for Year Ended December 31, 2018

The following table summarizes the compensation of our named executive officers for the year ended December 31, 2018:

EXECUTIVE COMPENSATION

Grants of Plan-Based Awards in 2018

The following table provides additional information about our long-term incentive equity awards, which consist of performance-based restricted stock unit awards (“ PSUs ”), restricted stock unit awards (“ RSUs ”), Special Incentive Program awards (“ SIPs ”), and non-equity incentive plan awards, in each case, granted to our named executive officers in 2018 to the 2017 LTIP: