PATRICK INDUSTRIES INC
PATK DEF 14A Report ended April 1, 2025
PATRICK INDUSTRIES INC
10-Ks and 10-Qs
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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
(Amendment No.)
____________________
Filed by the Registrant
x
Filed by a Party other than the Registrant
o
Check the appropriate box:
o
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material under §240.14a-12
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
x
No fee required
o
Fee paid previously with preliminary materials
o
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
Proxy
Proxy
Statement
Statement
& Notice of
2025
Annual Meeting of Shareholders
& Notice of 2025 Annual Meeting of Shareholders
Dear
Shareholder
On behalf of the Board of Directors, we are pleased to invite you to
join us for our Annual Meeting of Shareholders ("Annual Meeting"),
which will be conducted via live audio webcast on
May 15, 2025
, at
10:00 A.M. ET. The virtual Annual Meeting will be conducted online at
meetnow.global/MY9UDQU. In the Notice of
2025
Annual Meeting &
Proxy Statement, we describe the matters upon which you will be
asked to vote at the meeting and provide instructions for attending
the meeting.
This Proxy Statement describes our corporate governance policies
that foster the Board's effective oversight of the Company’s business
strategies and practices. We welcome you to review this Proxy
Statement as we describe our financial performance for fiscal year
2024
.
The deliberate investments we have made toward our strategic
diversification have enhanced the resilience of our business,
bolstered our full-solutions model, and strengthened our innovation
platform, effectively reinforcing our long-term growth engine. In 2024,
we solidified our presence in the Powersports market with the
acquisition of Sportech, and later on, enhanced the depth and
breadth of aftermarket solutions through our acquisition of RecPro.
Our talented team, guided by Patrick’s BETTER Together culture,
remains committed to being the supplier of choice in the Outdoor
Enthusiast and Housing markets, where we focus on creating value
through innovative products and services, while developing trusted
and deep relationships with our customers.
Please review the proxy/notice card for instructions on how to vote
over the Internet, by telephone or by mail in order to be certain that
your shares of stock are represented at the Annual Meeting. It is
important that all Patrick Industries, Inc. shareholders vote and
participate in the affairs and governance of our Company.
Sincerely,
Andy L. Nemeth
CEO & Chairman of the Board
April 1, 2025
Please review the proxy/
notice card for instructions
on how to vote over the
Internet, by telephone or by
mail in order to be certain that
your shares of stock are
represented at the Annual
Meeting. It is important that
all Patrick Industries, Inc.
shareholders vote and
participate in the affairs and
governance of our Company.
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Notice of Annual Meeting
Date
Thursday,
May 15, 2025
;
10:00 A.M. ET
Location
Online at: meetnow.global/MY9UDQU
Record Date
March 21, 2025
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Proposals
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Board Vote
Recommendation
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|||
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1
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To elect nine directors to the Board of Directors to serve until the 2026
Annual Meeting of Shareholders
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FOR
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2
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To ratify the appointment of Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for fiscal year 2025
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FOR
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3
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To approve, in an advisory and non-binding vote, the compensation of the
Company’s named executive officers for fiscal year 2024
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FOR
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4
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To amend our Articles of Incorporation to increase the number of authorized
shares of common stock without par value, from 40,000,000 to 60,000,000
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FOR
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||
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5
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To recommend, in an advisory and non-binding vote, the frequency of
shareholder votes on executive compensation (a “Say-on-Frequency” vote)
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ONE YEAR
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In addition
To consider and transact such other business as may
properly come before the meeting or any adjournment or
postponement thereof.
Voting
Please vote your shares using the Internet, by telephone or
by mail by signing, dating and returning the enclosed Proxy
Card. If you hold
shares through a broker, custodian,
fiduciary, or nominee, please check the voting instructions
used by that broker, custodian, fiduciary, or nominee.
Holders with a control number from Computershare, our
transfer agent, can vote at the virtual Annual Meeting.
Please return your Proxy Card so your vote can be
counted. See “Voting Q&A”.
By Order of the Board of Directors,
Joel D. Duthie
Executive Vice President, Chief Legal Officer
and Secretary
April 1, 2025
Virtual Meeting Format
You will be able to attend and participate in the Annual
Meeting online, vote your shares electronically and submit
your questions prior to and during the meeting by visiting:
meetnow.global/MY9UDQU
on the meeting date and time
described in the accompanying Proxy Statement.
If you plan to attend the meeting online, you must register
by following the instructions contained in the “Voting Q & A”
section.
Notice of Internet Availability of Proxy
Materials for the Annual Meeting of
Shareholders
Our
2025
Proxy Statement and Annual Report to
Shareholders for fiscal
2024
are available on Patrick
Industries, Inc.’s website at www.patrickind.com under
“Investors - Company Info.” You may also request hard
copies of these documents free of charge by writing to us at
the following address: 107 W. Franklin Street, Elkhart,
Indiana 46516. Attention: Office of the Secretary.
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Proxy Statement
Annual Meeting of Shareholders
This Proxy Statement is provided in connection with the
solicitation of proxies by the Board of Dire
ctors (the
“Board”) for the Annual Meeting of Shareholders to be held
online (virtual meeting) on
May 15, 2025
(the “Annual
Meeting”) for the purpose of considering and acting upon
the matters specified in the Notice of Annual Meeting of
Shareholders accompanying this Proxy Statement. The
proxy card or voting instruction form sets forth your holdings
of common stock of the Company. We expect that, on or
about April 3, 2025, this Proxy Statement will be available
through the Internet.
If the form of proxy which accompanies this Proxy
Statement is executed and returned, or is voted by Internet
or by telephone, it may be revoked by the person giving it at
any time prior to the voting thereof by:
•
changing your vote using the online voting method, in
which case only your latest Internet proxy submitted
prior to the Annual Meeting will be counted;
•
filing with the Secretary of the Company, during or
before the Annual Meeting, a written notice of
revocation bearing a date later than the date of the
proxy;
•
duly executing and dating a subsequent proxy relating
to the common stock and delivering it to the Secretary
of the Company before or during the Annual Meeting;
or
•
voting your shares electronically during the Annual
Meeting.
If the form of proxy is signed, dated and returned without
specifying choices on one or more matters presented to the
shareholders, the shares will be voted on the matter or
matters listed on the Proxy Card as recommended by the
Company’s Board.
Voting Methods
Online
www.investorvote.com/PATK
Phone
For shareholders
of record: 800-652-8683
Mail
Sign, date and return the enclosed Proxy
Card in the enclosed envelope
Additional solicitations in person, by telephone, or
otherwise, may be made by certain directors, officers and
employees of the Company regarding the proposals without
additional compensation. Expenses incurred in the
solicitation of proxies, including postage, printing and
handling, and actual expenses incurred by brokerage
houses, custodians, nominees and fiduciaries in forwarding
documents to beneficial owners, will be paid by the
Company.
Patrick’s Annual Report to Shareholders, which contains
Patrick’s Annual Report on Form 10-K for the year ended
December 31, 2024
, accompanies this Proxy Statement.
Requests for additional copies of the Annual Report on
Form 10-K should be submitted to the Office of the
Secretary, Patrick Industries, Inc., 107 W. Franklin Street,
Elkhart, Indiana 46516. Annual Meeting materials may also
be viewed online through our website, www.patrickind.com
under “Investors - Company Info.”
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Table of Contents
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Advisory Vote to Approve the Compensation of Our Named Executive Officers
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Approval of an Increase in the Authorized Amount of Common Stock
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1
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Business
~10,000
11%
$327M
Financial
Highlights
Fiscal 2024 was a year of strategic execution, driven by the
dedication of our team members and our unwavering
commitment to serving customers at the highest level.
Despite what continued to be a challenging environment for
a number of the industries we serve, we remained focused
on operational efficiencies, well-positioning us to capitalize
when our end markets recover. This disciplined approach
enabled us to solidify our presence in the powersports
industry with the acquisition of Sportech in January, further
strengthening and diversifying our portfolio. Additionally, we
believe our expansion into the aftermarket space through
the acquisition of RecPro presents significant future
opportunities for growth.
In addition to our operational advancements, we took
decisive steps to enhance our financial foundation. Through
an opportunistic debt refinancing in the third quarter, we
improved our liquidity position, reduced the cost of our fixed-
rate debt, and extended our maturity profile, providing
greater financial flexibility. We believe our end markets are
at or near cyclical lows and remain confident in their long-
term growth potential. Looking ahead, we will continue to
prioritize exceptional customer service while maintaining a
flexible cost structure to adapt to evolving market
conditions. With a strong foundation in place and an
energized team, we believe that we are poised for future
success as market dynamics improve.
The charts illustrate our performance related to net sales,
operating margin and operating income, operating cash
flows, and diluted earnings per share since 2020.
$2,487
$4,078
$4,882
$3,468
7.0% / $173
8.6% / $352
10.2% / $496
7.5% / $260
$160
$252
$412
$409
$327
$2.80
$6.42
NET SALES
($ millions)
OPERATING MARGIN & INCOME
($ millions)
OPERATING CASH FLOWS
($ millions)
DILUTED EARNINGS
PER COMMON SHARE
Team Members Help
Achieve Our Goals
$3,716
6.9% / $258
Net Sales Compound
Annual Growth Rate
2020 to 2024
2024 Operating
Cash Flows
$8.99
$4.33
$4.11
2
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Executive Compensation
Highlights
Aligning Pay to Differentiated Performance
Our leaders understand and are motivated to meet key metrics that drive growth, profitability and ultimately shareholder
value in both the short and long term. Our Compensation Committee recommends compensation decisions to the Board
which support this philosophy. The plan design is brought to life through understanding each compensation element and the
impact of the individual’s and the team’s performance as outlined below.
Each compensation component, relative to peer group and general industry data, supports our philosophy of rewarding
differentiated performance by emphasizing each executive’s variable pay elements.
•
Base Salary, though lower than peer base compensation, is designed in alignment with the philosophy of focusing on
performance-dependent variable pay.
•
The annual Short-Term Cash Compensation Plan provides for enhanced payouts for performance above plan up to a
maximum of 200% of target compensation at 115% of plan and incorporates a threshold payout of 50% of target
compensation at 75% of plan.
•
The annual Long-Term Incentive Compensation Plan is designed to drive the executive’s focus on long-term profitability
through both organic and inorganic growth over a three-year award performance period. This equity plan is also
designed to motivate leadership to perform above plan with a maximum payout of 200% of target compensation at
120% of plan and a threshold payout of 50% of target compensation at 80% of plan.
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Compensation Element
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Percentile Positioning vs. Peer Proxy and
General Industry Data
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Base Salary
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25th - 50th
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Short-Term Incentive
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50th - 75th
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Total Target Cash
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50th - 75th
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Long-Term Incentive
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25th - 50th
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Total Target Compensation
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50th - 75th
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Our focus on variable pay to
motivate performance, a key
component of our compensation
plan over the past decade, has
proven successful in aligning
our team’s compensation to
shareholder returns.
Key Compensation Actions Taken in Fiscal
2024
•
Base compensation for our Named Executive Officers (“NEOs”), with the exception of
Matthew S. Filer
and Hugo E.
Gonzalez, was unchanged from
2023
to align with end-market conditions and expected financial performance in
2024
and size-scoping of our peer group and general industry data.
•
Our Compensation Committee continued to utilize external consultant, Willis Towers Watson, for data and consultation
as requested by the Compensation Committee.
For the compensation of our NEOs, please refer to the Compensation Discussion and Analysis.
3
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Corporate Governance
Highlights
In addition to executive compensation practices that
strongly link pay and performance, the Board believes that
fundamental corporate governance is critical to ensuring the
Company is managed for the long-term benefit of our
shareholders. Patrick’s Code of Ethics for Directors,
Officers and Employees and its Corporate Governance
Guidelines provide the guidepost so that we “do business
right.” For more information about our governance
programs and Board of Directors, see Proposal 1.
Board Risk Oversight
The Board has delegated its risk oversight responsibilities
to the Audit Committee, as described under the heading
“Audit Committee”. In accordance with the Audit
Committee’s Charter, each of our senior financial and
accounting officers reports directly to the Audit Committee
regarding material risks to our business, among other
matters, and the Audit Committee meets in executive
sessions with the senior financial and accounting officers,
and with representatives of our independent registered
public accounting firm. The Audit Committee Chairman
reports to the Board regarding material risks as deemed
appropriate. In addition, the Compensation Committee
annually considers the extent to which the risks arising from
the compensation policies and practices of the Company
are reasonably likely to have a material adverse effect on
the Company as a whole.
Director Independence
Seven of the nine members of the Board (as of the date of
this Proxy) have been designated by the Board as
independent directors. The Board determines whether a
director is independent by following the guidelines of the
NASDAQ Stock Market and the SEC rules and regulations.
The Board has determined that the independent directors in
2024
were Joseph M. Cerulli, John A. Forbes, Michael A.
Kitson, Pamela R. Klyn, Derrick B. Mayes, Denis G. Suggs
and M. Scott Welch. The Board has also determined that
each of the director nominees, Blake W. Augsburger and
Natalie A. Brown, will also be an independent director if
elected to serve.
Consideration of Director Candidates
•
The Corporate Governance and Nominations
Committee will consider Board nominees
recommended by shareholders, which can be sent to
the address provided below.
•
To nominate a candidate for director, under our Bylaws,
a shareholder must provide to the Secretary of the
Company:
•
Timely notice of the nomination (not less than 20
days or more than 50 days prior to the next Annual
Meeting of Shareholders)
•
Written notice of nominee
•
Nominee’s name, age, business address,
residential address, principal occupation, and
number of shares of the Company owned
•
Nominee’s consent to be elected and serve
•
Documents required under federal securities laws
•
Candidate’s other board memberships (if any)
Communication With Our Shareholders and
Ensuring Document Accessibility
You can find our Board Committee charters, Board Diversity
Policy, Code of Ethics and Business Conduct, Corporate
Governance Guidelines, and other governance-related
documents on our website at www.patrickind.com, under
“Investors-Governance” or by writing to:
Patrick Industries, Inc.
Attn: Joel D. Duthie
EVP - Chief Legal Officer and Secretary
107 W. Franklin Street
Elkhart, Indiana 46516
Shareholders can reach out directly to our Board or a Board
member by writing to the above address. Communications
intended for independent directors should be directed to the
Chairman of the Corporate Governance and Nominations
Committee.
4
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Insider Trading Policies and Procedures
In 2024, we amended and restated Patrick's Insider Trading Policy governing the purchase, sale and other disposition of our
securities by directors, officers, and employees that is designed to promote compliance with insider trading laws, rules and
regulations, and applicable listing standards, as well as procedures designed to further the foregoing purposes. In addition, it
is our intent to comply with applicable laws and regulations relating to the Company trading in its own securities.
Board Leadership Structure and Accountability
The Board’s leadership structure is designed to promote Board effectiveness and to appropriately allocate authority and
responsibility between the Board and management.
In May 2024, the Board determined that Andy L. Nemeth, our Chief Executive Officer, would be best positioned to serve as
Board Chair. The independent directors appointed John A. Forbes as Lead Independent Director. Our Lead Independent
Director provides a strong counterbalance to the Chair, including by facilitating independent oversight of management,
promoting open dialogue among the independent directors during and in between Board meetings, leading executive
sessions at each regular Board meeting without the presence of the CEO, and focusing on the Board’s priorities and
processes. The Board believes the present structure provides the Company and the Board with strong leadership,
appropriate independent oversight of management, continuity of experience that complements ongoing Board refreshment,
and the ability to clearly communicate the Company’s business and strategy to shareholders, customers, employees and the
public in a single voice.
Factors the Board considers in reviewing its leadership structure include:
•
The respective responsibilities for the positions of Chair and Lead Independent Director
•
The individuals currently in the roles of Chair and Lead Independent Director and their record of strong leadership
and performance in their roles
•
The current composition of the Board
•
The policies and practices in place to provide independent Board oversight of management (including Board
oversight of CEO performance and compensation, regular executive sessions of the independent directors, Board
input into agendas and meeting materials, and Board self-assessment)
•
The Company’s circumstances, including its financial performance
•
The views of the Company’s shareholders
•
Trends in corporate governance, including practices at other public companies
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Such other factors as the Board determines
With the exception of the CEO, no director is an employee of the Company.
•
Directors are elected for a one-year term.
•
The Board had nine meetings in 2024.
•
Each director attended at least 75% of the Board meetings and meetings of Board Committees on which they
served in 2024.
•
All directors attended the most recent Annual Meeting of Shareholders which was held on May 16, 2024.
•
We expect all Board members to attend the annual meetings, but from time to time other commitments may
prevent directors from attending each meeting.
Director Qualifications and Diversity
The Corporate Governance and Nominations Committee follows a diversity policy that requires the Committee to consider
diversity criteria – including gender, age, ethnicity and geographic background – when identifying candidates for
membership. The Committee will consider a candidate’s qualifications and background, including responsibility for operating
a public company or a division of a public company, international business experience, a candidate’s technical background
and financial expertise or professional qualification, diversity of background and personal experience, and any other public
company boards on which the candidate is a director. Board appointment will be based on merit and candidates will be
considered against objective criteria, having due regard for the benefits of diversity on the Board. The Committee will also
consider whether the candidate would be “independent” for purposes of the NASDAQ Stock Market and the SEC rules and
regulations. The Committee accepts recommendations for nominees from several sources, included among them non-
management directors and the CEO, and may, from time-to-time, engage the services of a professional search firm to
identify and/or evaluate potential nominees.
5
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Proposal 1
Election Of Directors
There are nine nominees for election to the Board,
seven of which are current members of our Board.
Each of the following nominees was elected to his or
her present term of office at the Annual Meeting of
Shareholders held on May 16, 2024, with the
exception of Blake W. Augsburger and Natalie A.
Brown, who were approved on February 25, 2025 as
nominees for election to the Board at the 2025 Annual
Meeting. Each of the nominees at the 2025 Annual
Meeting will be elected to hold office until the 2026
Annual Meeting or until their successors are duly
elected and qualified.
It is intended that the proxies will be voted for the
nominees listed below, unless otherwise indicated on
the proxy form. It is expected that these nominees will
serve, but, if for any unforeseen cause any such
nominee should decline or be unable to serve as a
director, the proxies will be voted to fill any vacancy so
arising in accordance with the discretionary authority of
the persons named in the proxies. The Board does not
anticipate that any nominee will be unable or unwilling
to serve.
The Board of Directors
recommends shareholders
vote
FOR
the election of
the nominees to the Board
of Directors.
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2024
Board Composition and Governance Highlights
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Size of Board
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9
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Diverse Board Committee Chairs
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✓
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Average Age (in years) of Directors
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60
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Independent Directors Meet Without Non-
Independent Directors Present
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✓
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Number of Independent Directors
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7/9
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Board Orientation and Continuing
Education
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✓
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Directors that are Gender or Racially/
Ethnically Diverse
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33%
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Board-level Oversight of Environmental,
Social & Governance (ESG) Matters
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✓
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Audit Committee Expertise
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60%
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Annual Review of Committee Charters,
Code of Ethics & Governance Guidelines
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✓
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Average Tenure (in years) on Board
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11.9
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Succession Planning
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✓
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Lead Independent Director
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✓
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Sustainability Reporting Framework:
SASB
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✓
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Annual Election of All Directors
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✓
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6
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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The board of directors
unanimously
recommends a vote
FOR
each of the nine
nominees.
Nominees
for Election
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Biography
Blake W. Augsburger, age 61, is the founder and has served as Chief Executive
Officer of LEA Professional since 2019, a global supplier of audio amplifiers and
digital signal processing solutions for the Professional, Commercial, and
Residential A/V markets. Prior to that, Mr. Augsburger held leadership positions
at Harman International Industries, Inc., including Executive Vice President,
President of the Harman Professional Division, and North America's Country
Manager from 2006 to 2016, and President of Crown International from 2001 to
2006. Mr. Augsburger has served as a director of Lakeland Financial
Corporation from 2011 to present.
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Blake W. Augsburger
Age 61
New Director Nominee
Committees
None
Other Public Board
Directorships
Lakeland Financial
Corporation
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Qualifications
Mr. Augsburger has extensive experience with strategic planning, sales and
marketing, manufacturing and new product development, acquisitions, and
operations and risk management.
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Biography
Natalie A. Brown, age 54, has been the Chief Executive Officer of Mesirow
Financial Holdings, Inc. ("Mesirow") since July 2022. Prior to that, Ms. Brown
was President of Mesirow from April 2021 to July 2022 and Chief Financial
Officer from August 2018 to April 2021. She has served on Mesirow’s Board of
Directors since 2019. She also held various leadership positions within finance
and accounting at Nuveen Investments from 1999 to 2018.
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Qualifications
Ms. Brown has extensive experience in banking, finance and auditor relations,
organizational development, succession planning and talent identification,
acquisitions, and strategic planning.
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Natalie A. Brown
Age
54
New Director Nominee
Committees
None
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7
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Biography
Joseph M. Cerulli, age 65, has been employed by Tontine Associates, LLC, an
investment management firm (together with its affiliates, “Tontine”), since
January 2007.
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Qualifications
Mr. Cerulli possesses extensive knowledge with respect to business operations,
strategic planning, financial and investment matters, including investment
banking, capital markets, and mergers and acquisitions strategy.
He has been
determined by our Board to be an “audit committee financial expert” under the
rules and regulations of the Securities and Exchange Commission (the “SEC”).
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Joseph M. Cerulli
Age
65
Director since
2008
Committees
Corporate
Governance and
Nominations (Chair) • Audit
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Biography
Todd M. Cleveland, age 57, previously served as Chairman of the Board from
January 2023 to May 2024 and Executive Chairman of the Board from January
2020 to December 31, 2022. Prior to that, Mr. Cleveland was Chairman of the
Board from May 2018 to December 2019 and our Chief Executive Officer from
February 2009 to December 2019. Mr. Cleveland was President of the Company
from May 2008 to December 2015 and Chief Operating Officer of the Company
from May 2008 to March 2013. Mr. Cleveland has served as a Director of IES
Holdings, Inc. (“IES”) from 2017 to the present, and he has been the chairman of
IES’ Human Resources and Compensation Committee since February 2019 and
a member of IES’s Audit Committee since February 2021.
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Todd M. Cleveland
Age
57
Director since
2008
Committees
None
Other Public Board
Directorships
IES Holdings, Inc.
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Qualifications
Mr. Cleveland has over 34 years of RV, marine, manufactured housing, and
industrial experience in various operating capacities. He also has extensive
knowledge of our Company and the industries to which we sell our products. Mr.
Cleveland’s experience includes management development and leadership,
acquisitions, strategic planning, finance and capital allocation, and the
manufacturing and sales of our products.
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8
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Biography
John A. Forbes, age 65, has been a partner with Full Sails LLC, a firm engaged
in strategic business consulting, since June 2017. In addition, Mr. Forbes served
as the interim Chief Financial Officer of our Company from June 2020 to
November 2020. Previously, Mr. Forbes was the President of Utilimaster, a
business unit of Shyft Group (formerly known as Spartan Motors USA, Inc.), from
July 2010 to June 2017. Prior to that time, he was the Chief Financial Officer of
Utilimaster from May 2009 to July 2010, the Chief Financial Officer of Nautic
Global Group, LLC from 2007 to 2009 and the Chief Financial Officer of Adorn,
LLC from 2003 to 2007. Mr. Forbes has served as a director of Chase Packaging
Corporation since March 2019.
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John A. Forbes
Age
65
Director since
2011
Lead Independent
Director since
2024
Committees
Compensation • Corporate
Governance and
Nominations
Other Public Board
Directorships
Chase Packaging
Corporation
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Qualifications
Mr. Forbes has over 38 years of experience in serving various manufacturing
industries, having held senior financial leadership roles. Mr. Forbes also has
extensive experience with operations and talent management, acquisitions,
strategic planning, risk management and banking relations.
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Biography
Michael A. Kitson, age 66, served as a fractional Chief Financial Officer at Ascent
CFO Solutions, a provider of outsourced financial and accounting services, from
May 2022 to March 2023. Prior to that time, Mr. Kitson served as the Chief
Financial Officer of oVertone Haircare, Inc. from July 2018 through January 2022.
Previously, Mr. Kitson was a principal with AVL Growth Partners, a firm that
provides Chief Financial Officer and other financial advisory services, from March
2017 to July 2018. Prior to that, Mr. Kitson was the Chief Financial Officer of
MikaTek, Ltd. from January 2016 to July 2016, the Chief Executive Officer of
SharpShooter Imaging from March 2015 to January 2016, the Chief Executive
Officer of Nautic Global Group (“Nautic”) from March 2011 to October 2013, and
the Chief Financial Officer of Nautic from August 2010 to March 2011.
|
||||
|
Michael A. Kitson
Age
66
Director since
2013
Committees
Audit (Chair) •
Compensation
|
||||
|
Qualifications
Mr. Kitson has over 38 years of experience in serving various manufacturing
industries in senior financial leadership roles. Mr. Kitson also has extensive
experience with corporate and operations management, finance and capital
allocation, strategic planning and risk management. He has been determined by
our Board to be an “audit committee financial expert” under the SEC’s rules and
regulations.
|
||||
9
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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|
Biography
Andy L. Nemeth
, age 56, has been the Chairman of the Board since May 2024
and the Company’s Chief Executive Officer since January 2020. Prior to that
time, Mr. Nemeth was the President from January 2016 to July 2021, Executive
Vice President of Finance and Chief Financial Officer from May 2004 to
December 2015, and Secretary-Treasurer from 2002 to 2015. He was also the
Vice President of Finance and Chief Financial Officer from 2003 to 2004.
|
||||
|
Qualifications
Mr. Nemeth has over 33 years of RV, marine, manufactured housing, and
industrial experience in various financial and managerial capacities. Mr. Nemeth
also has particular knowledge of our Company and the industries to which we sell
our products and has extensive experience with corporate management,
development and leadership, acquisitions, strategic planning, risk management,
capital allocation, and banking and finance relations.
|
||||
|
Andy L. Nemeth
Age
56
Director since
2006
Committees
None
|
||||
|
Biography
Denis G. Suggs, age 59, has been the Chief Executive Officer of LCP
Transportation, LLC, a non-emergency medical transportation company, since
February 2020. Prior to that, Mr. Suggs was the President and Chief Executive
Officer of Strategic Materials Corp. from March 2014 to January 2020 and also
served as Chairman from 2017 to 2020. Prior to that time, Mr. Suggs was the
Global Executive Vice President of Belden, Inc. from 2009 to 2013 and the
President of the Americas Division / Vice President of Belden, Inc. from 2007 to
2009. Mr. Suggs has served as a director of Smith & Wesson Brands, Inc. from
May 2021 to present.
|
||||
|
Denis G. Suggs
Age
59
Director since
2019
Committees
Compensation (Chair) •
Corporate Governance and
Nominations
Other Public Board
Directorships
Smith & Wesson Brands,
Inc.
|
Qualifications
Mr. Suggs has over 26 years of experience in leading complex global
businesses, having also held senior financial executive leadership roles with
Danaher Corporation and Public Storage Corporation. Mr. Suggs also has
extensive experience with corporate and operations management, strategic
planning, mergers and acquisitions and risk management. Mr. Suggs served as a
director of the Education Corporation of America from 2015 to 2018 and of
Strategic Materials, Inc. and the Glass Packaging Institute from 2014 to 2020.
|
10
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
|
Biography
M. Scott Welch, age 65, has been the President and Chief Executive Officer of
Welch Packaging Group, a large independently owned corrugated packaging
company, since 1985. Prior to establishing Welch Packaging Group, he worked
at Northern Box, Performance Packaging and Elkhart Container. Mr. Welch has
served as a director of Lakeland Financial Corporation (“Lakeland”) from 1998 to
present and a member of the compensation committee since 2012, and he was
Lakeland’s lead independent director from 2012 to 2019. He has also served as a
trustee of DePauw University since 2005.
|
||||
|
M. Scott Welch
Age
65
Director since
2015
Committees
Audit •
Corporate Governance and
Nominations
Other Public Board
Directorships
Lakeland Financial
Corporation
|
Qualifications
Mr. Welch has over 43 years of experience in the packaging industry and has
extensive experience in sales, marketing, acquisitions, organizational
development, strategic planning, finance and capital allocation. He has been
determined by our Board to be an “audit committee financial expert” under the
SEC’s rules and regulations.
|
The board of directors unanimously
recommends a vote
FOR
the director
nominees.
11
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
2024
Non-Employee Director
Compensation
|
07/01/2024 - 12/31/2024
|
01/01/2024 - 06/30/2024
|
|
|
Chairman of the Board Annual Retainer
(1)
|
$—
|
$400,000
|
|
Annual Retainer (Non-Chairman Members)
|
90,000
|
90,000
|
|
Committee Chairpersons Annual Retainer:
|
||
|
●
Audit
|
20,000
|
20,000
|
|
●
Compensation
|
15,000
|
15,000
|
|
●
Corporate Governance and Nominations
|
15,000
|
10,000
|
|
Lead Independent Director Additional Annual Retainer
|
25,000
|
25,000
|
|
Annual Restricted Stock Grant
(2)
|
140,000
|
140,000
|
(1)
The Chairman of the Board annual retainer was paid to Mr. Cleveland (a non-employee) for the first half of 2024. When Mr. Nemeth was appointed as
Chairman of the Board in May 2024, he was not entitled to receive any portion of the annual retainer given his employee capacity.
(2)
Non-employee directors received an annual restricted stock grant of $140,000 in May 2024, which vests upon such director’s continued service as a Board
member one year from the grant date or earlier upon certain events. In addition, non-employee directors receive cash dividends on their restricted common
stock holdings. The Company does not have stock ownership guidelines for its directors.
In addition to the compensation described above, the Company reimburses the non-employee directors’ expenses, including
travel, accommodations and meals, for attending Board and Board Committee meetings, our Annual Meeting of
Shareholders and any other activities related to our business.
The compensation paid by the Company to the directors for
2024
, other than Mr. Nemeth, is set forth in the table below.
Information on compensation for Mr. Nemeth is set forth in the “Executive Compensation” section.
|
Name
|
Fees Earned Or Paid In
Cash
(2)
|
Stock Awards
(3)
|
Other
Compensation
(4)
|
Total
|
|
Joseph M. Cerulli
|
$102,500
|
$140,050
|
$3,108
|
$245,658
|
|
Todd M. Cleveland
(1)
|
245,000
|
140,050
|
3,108
|
388,158
|
|
John A. Forbes
|
102,500
|
140,050
|
3,108
|
245,658
|
|
Michael A. Kitson
|
110,000
|
140,050
|
3,108
|
253,158
|
|
Pamela R. Klyn
|
90,000
|
140,050
|
3,108
|
233,158
|
|
Derrick B. Mayes
|
90,000
|
140,050
|
3,108
|
233,158
|
|
Denis G. Suggs
|
105,000
|
140,050
|
3,108
|
248,158
|
|
M. Scott Welch
|
102,500
|
140,050
|
3,108
|
245,658
|
(1)
Mr. Cleveland was Chairman of the Board from January 1, 2024 through May 15, 2024 and served as a director of the Board for the remainder of 2024. Mr.
Nemeth was appointed Chairman of the Board effective May 16, 2024.
(2)
Fees consist of an annual cash retainer for each non-employee director, the lead independent director, and each committee chairperson’s service.
(3)
Amounts shown do not represent compensation actually received. Such amounts reflect the aggregate grant date fair value of 1,868 shares of restricted
stock granted to each non-employee director, at a closing stock price of $75.00 on May 16, 2024.
(4)
Amounts shown represent cash dividends paid by the Company in 2024 on unvested shares held by the non-employee directors.
12
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Board
Committees
Audit Committee
The Board has an Audit Committee for which Michael A.
Kitson serves as the Chairman. The Audit Committee met
eight times in
2024
.
The Audit Committee has a charter, which sets forth the
responsibilities of the Audit Committee, which include:
•
Oversight responsibilities related to potential material
risks to the business, including, but not limited to, credit,
liquidity, IT cybersecurity, and operational risks;
•
Recommending to the Board the independent auditors
to be engaged by the Company for the purpose of
conducting the annual audit of our financial statements;
•
Discussing with the independent auditors the scope of
their examination;
•
Reviewing the financial statements and the independent
auditors’ report thereon with Company personnel and
the independent auditors;
•
Inviting the recommendations of the independent
auditors regarding internal controls and other matters;
and
•
Approving all non-audit services provided by the
independent auditors and monitoring these
engagements on a per occurrence basis.
The Board has determined that each of the current
members of the Audit Committee, as of the date of this
Proxy Statement, is independent, as defined in the
NASDAQ listing standards and relevant SEC rules. In
addition, as of the date of this Proxy Statement, the Board
has determined tha
t three of these members also meet both
the qualifications required to be an audit committee
financial expert and the financial sophistication
requirements contained in the NASDAQ listing standards
(Messrs. Cerulli, Kitson and Welch).
For a more detailed list of the roles and
responsibilities of the Audit Committee, please see
the Audit Committee Charter located in the
“Investors – Governance – Governance
Documents” section of our website at
www.patrickind.com
Compensation Committee
The Board has a Compensation Committee for which Denis
G. Suggs serves as Chairman. The Compensation
Committee met five times in
2024
.
The Compensation Committee has a charter, which sets
forth the responsibilities of the Compensation Committee,
which include:
•
Reviewing and recommending to the independent
members of the Board the overall compensation
programs for the officers of the Company;
•
Oversight authority to attract, develop, promote and
retain qualified senior executive management; and
•
Oversight authority for the stock-based compensation
programs.
In its oversight of executive officer compensation, the
Compensation Committee seeks assistance from Company
management and the Company's independent
compensation consultant, Willis Towers Watson, as further
described below under the heading “Compensation
Discussion and Analysis.” Willis Towers Watson’s fees are
approved by the Compensation Committee. Willis Towers
Watson provides the Compensation Committee with data
about the compensation paid by our peer group and
industry benchmark groups, updates the Compensation
Committee on new developments in areas that fall within
the Compensation Committee’s scope and is available to
advise the Compensation Committee regarding all of its
responsibilities, including best practices, market trends in
executive compensation, and pay versus performance
disclosures. Our Compensation Committee has assessed
the independence of Willis Towers Watson pursuant to SEC
and NASDAQ listing rules and determined that their work
did not give rise to any conflicts of interest.
The Board has determined each of the current members of
the Compensation Committee, as of the date of this Proxy
Statement, is independent as defined in the NASDAQ
listing standards and our Corporate Governance
Guidelines.
13
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Compensation Committee Interlocks and
Director Participation
During
2024
, no executive officer served on the board or
compensation committee of any other corporation with
respect to which any member of the Compensation
Committee was engaged as an executive officer. No
member of the Compensation Committee was an officer or
employee of the Company during
2024
.
For a more detailed list of the roles and
responsibilities of the Compensation
Committee, please see the Compensation
Committee Charter located in the “Investors –
Governance – Governance Documents”
section of our website at www.patrickind.com
Corporate Governance and Nominations
Committee
The Board has a Corporate Governance and Nominations
Committee for which Joseph M. Cerulli serves as the
Chairman. The Corporate Governance and Nominations
Committee met four times in
2024
.
The Corporate Governance and Nominations Committee
has a charter, which sets forth the responsibilities of the
Corporate Governance and Nominations Committee, which
include:
•
Assisting the Board in identifying, screening and
recommending qualified candidates to serve as
directors;
•
Recommending nominees to the Board to fill new
positions or vacancies as they occur;
•
Reviewing and recommending to the Board the
compensation of directors;
•
Recommending to the Board nominees for election by
shareholders at the Annual Meeting;
•
Reviewing and monitoring corporate governance
compliance as well as recommending appropriate
changes;
•
Reviewing the succession planning for our senior
executive officers;
•
Providing overall oversight of our ESG policies and
initiatives and working with management to identify and
define relevant ESG topics and programs; and
•
Conducting an annual assessment of the Board’s
performance.
The Board has determined that each of the current
members of the Corporate Governance and Nominations
Committee, as of the date of this Proxy Statement, is
independent as defined in the listing standards of the
NASDAQ Stock Market and our Corporate Governance
Guidelines.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934
requires that certain of our officers, directors and 10%
shareholders file with the SEC an initial statement of
beneficial ownership and certain statements of changes in
beneficial ownership of our common stock. Based solely on
our review of such forms and written representation from
the directors and officers that no other reports were
required, we are unaware of any instances of
noncompliance or late compliance with such filings during
the fiscal year ended
December 31, 2024
,
For a more detailed list of the roles and
responsibilities of the Corporate Governance
and Nominations Committee, please see the
Corporate Governance and Nominations
Committee Charter located in the “For
Investors – Governance – Governance
Documents” section of our website at
www.patrickind.com
14
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Ratification of the Appointment of Independent
Registered Public Accounting Firm
The Audit Committee has appointed Deloitte & Touche LLP, ("Deloitte")
as our independent registered public accounting firm for the fiscal year
ending
December 31, 2025
. Deloitte has been the Company's
independent registered public accounting firm since June 2019. The
Board and the Audit Committee recommend that shareholders ratify the
appointment of Deloitte as our independent registered public accounting
firm for our fiscal year
2025
. Although we are not required to do so, we
believe that it is appropriate to request that shareholders ratify this
appointment. If shareholders do not ratify the appointment, the Audit
Committee will investigate the reasons for the shareholders' rejection and
reconsider the appointment. Representatives of Deloitte will be present at
the Annual Meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to any shareholder
questions that may arise.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them "FOR" approval of the ratification of the appointment of
Deloitte. The ratification of the appointment will be approved by our
shareholders if, at the Annual Meeting, a quorum is present and the vote
of a majority of the votes cast are voted in favor of the proposal.
Proposal 2
The Board of Directors unanimously recommends a vote
FOR
approval of the ratification of the appointment of
Deloitte as the Company's independent registered public
accounting firm for the fiscal year ending
December 31,
2025
.
15
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Independent Public Accountants
Audit Fees
The following table presents fees and out-of-pocket
expenses for professional audit services rendered by
Deloitte during the fiscal years ended
December 31, 2024
and
2023
:
As noted above in Proposal 2, the Audit Committee has
appointed Deloitte as our independent registered public
accounting firm for the fiscal year ending
December 31,
2025
.
|
2024
|
2023
|
|
|
Audit Fees
(1)
|
$3,345,300
|
$2,918,600
|
|
Tax Fees
(2)
|
-
|
507,600
|
|
Other Fees
(3)
|
1,900
|
1,900
|
|
Total Fees
|
$3,347,200
|
$3,428,100
|
(1)
Audit fees consist of fees for professional services rendered for the annual audit of the Company’s financial statements, the reviews of the financial
statements included in the Company’s quarterly reports, and other services normally provided by the independent auditor in connection with statutory and
regulatory filings or engagements.
(2)
Tax fees include fees related to tax compliance and consulting services in 2023.
(3)
Other fees consist of an annual subscription to Deloitte's online accounting research tool.
The Audit Committee has advised us that it has determined
that the non-audit services rendered by our independent
auditors during our most recent fiscal year are compatible
with maintaining the independence of such auditors.
The Audit Committee has adopted a Preapproval Policy for
Audit and Non-Audit Services pursuant to which it
preapproves all audit and non-audit services provided by
the independent auditors prior to each particular
engagement.
The Audit Committee has delegated authority to its
Chairman to approve certain proposed services other than
the annual audit, tax and quarterly review services, and the
Chairman must then report any approvals to the balance of
the Committee at the next scheduled meeting.
16
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Audit Committee Report
The following report of the Audit Committee does not constitute soliciting material and
shall not be deemed incorporated by reference by any general statement incorporating by
reference the Proxy Statement into any filing by us under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that we specifically incorporate such
information by reference, and shall not otherwise be deemed filed under such acts.
The responsibilities of the Audit Committee, which are set forth
in the Audit Committee Charter adopted by the Board, include
providing oversight of our financial reporting process through
periodic meetings with our independent auditors, principal
accounting officer and management to review accounting,
auditing, internal controls and financial reporting matters.
The Audit Committee has met and held discussions with
management and Deloitte with respect to the
2024
audited
financial statements. The Audit Committee reviewed and
discussed with Deloitte the consolidated financial statements,
and Deloitte’s evaluation of the Company’s internal controls
over financial reporting.
The Audit Committee also discussed with Deloitte the matters
required to be discussed by the applicable requirements of the
Public Company Accounting Oversight Board and the SEC,
and other professional standards and regulatory requirements
currently in effect.
We have received from Deloitte a letter providing the
disclosures required by the applicable requirements of the
Public Company Accounting Oversight Board regarding
Deloitte’s communications with the Audit Committee
concerning independence with respect to any relationships
between us and Deloitte that in their professional judgment
may reasonably be thought to bear on independence. Deloitte
has discussed its independence with us, and has confirmed in
such letter that, in its professional judgment, it is independent
from us within the meaning of the federal securities laws. The
Audit Committee concluded that non-audit services provided by
Deloitte during the year ended
December 31, 2024
were
compatible with Deloitte’s independence.
Based on the review and discussions described above, with
respect to our audited financial statements included in our
2024
Annual Report to Shareholders, we have recommended
to the Board of Directors that such financial statements be
included in our Annual Report on Form 10-K for filing with the
SEC.
As specified in the Audit Committee Charter, it is not the duty of
the Audit Committee to plan or conduct audits or to determine
that our financial statements are complete and accurate and in
accordance with generally accepted accounting principles.
That is the responsibility of management and our independent
auditors. In giving our recommendation to the Board of
Directors, we have relied on (i) management’s representation
that such financial statements have been prepared with
integrity and objectivity and in conformity with generally
accepted accounting principles and (ii) the report of our
independent auditors with respect to such financial statements.
This report was adopted by the Audit Committee on
February
20, 2025.
The Audit Committee
Michael A. Kitson (Chairman)
Joseph M. Cerulli
Pamela R. Klyn
Derrick B. Mayes
M. Scott Welch
17
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Proposal 3
Pursuant to Section 14A of the Securities
Exchange Act of 1934, shareholders have the
opportunity to vote, on an advisory and non-
binding basis, on the compensation of our
Named Executive Officers as set forth in this
Proxy Statement. This is commonly referred to
as the "Say on Pay" vote. At the May 2019
annual meeting, a majority of shareholders
determined that the Say on Pay vote would be
held annually, commonly referred to as "Say on
Frequency" vote. As required under SEC rules,
an advisory vote of the frequency of the
advisory vote on executive compensation will
be held at the 2025 annual shareholders
meeting.
Our executive compensation policy is designed
to enable the Company to attract, motivate and
retain highly-qualified senior executives by
providing a competitive compensation
opportunity based on performance. Our intent is
to provide fair and equitable compensation in a
way that rewards executives for achieving
specified financial and non-financial
performance goals.
For the reasons stated, the Board of Directors recommends
a vote
FOR
the following non-binding resolution:
RESOLVED, that the compensation paid to the Company's
Named Executive Officers for fiscal year
2024
, as disclosed
in this Proxy Statement pursuant to the compensation
disclosure rules of the SEC, including the Compensation
Discussion and Analysis, compensation tables and related
information and discussion, is hereby APPROVED.
Pursuant to Section 14A of the Securities
Exchange Act of 1934, shareholders have the
opportunity to vote, on an advisory and non-
binding basis, on the compensation of our
Named Executive Officers as set forth in this
Proxy Statement. This is commonly referred to
as the "Say on Pay" vote. At the May 2019
annual meeting, a majority of shareholders
determined that the Say on Pay vote would be
held annually, commonly referred to as "Say on
Frequency" vote. As required under SEC rules,
an advisory vote of the frequency of the
advisory vote on executive compensation will
be held at the 2025 annual shareholders
meeting.
Our executive compensation policy is designed
to enable the Company to attract, motivate and
retain highly-qualified senior executives by
providing a competitive compensation
opportunity based on performance. Our intent is
to provide fair and equitable compensation in a
way that rewards executives for achieving
specified financial and non-financial
performance goals.
Advisory Vote to Approve the Compensation
of Our Named Executive Officers
Our performance-related awards are structured to
link a substantial portion of our executives' total
potential compensation to the Company's
performance on both a short-term and long-term
basis, to recognize individual contributions, and to
align executive and shareholder interests.
We are requesting shareholder approval for the
compensation of our named executive officers for
fiscal
2024
as disclosed in this Proxy Statement,
including the disclosures under "Executive
Compensation— Compensation Discussion and
Analysis," compensation tables and the related
information and discussion.
Please note that the vote is advisory and
therefore not binding on the Company, the
Compensation Committee or the Board. However,
we value the opinions of our shareholders, and
we will carefully consider the outcome of the
advisory vote on executive compensation when
making future compensation decisions.
The affirmative vote of a majority of the votes cast
is required for advisory approval of the foregoing
non-binding resolution. See "Voting Q&A".
18
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Proposal 4
Approval of an Increase in the
Authorized Amount of Common Stock
General Background:
Our Articles of Incorporation currently authorize
40,000,000 shares of common stock. As of March 21,
2025, there were 33,555,159 shares of common stock
issued and outstanding. There are in the aggregate
687,829 shares of common stock reserved for issuance
under existing stock options and stock appreciation
rights (“SARs”), which are issuable upon the exercise of
outstanding options and SARS granted under our
existing stock option and SARs plans. In addition, there
are an aggregate of 1,314,866 net shares available for
future awards under the Patrick Industries, Inc. 2009
Omnibus Incentive Plan (the “Plan”). There are
4,442,146 authorized and unissued shares of common
stock that are not reserved for any specific use and are
available for future issuance.
On February 25, 2025, our Board unanimously adopted
a resolution, subject to shareholder approval, to
increase the authorized number of shares of common
stock from 40,000,000 to 60,000,000. If the
shareholders approve this Proposal 4, an increase in
our authorized shares of common stock will be effected
through the filing of Articles of Amendment to our
Articles of Incorporation with the office of the Indiana
Secretary of State, amending Article V of our Articles of
Incorporation to authorize 60,000,000 shares of
common stock and total shares of capital stock of
61,000,000, as soon as practicable following the Annual
Meeting, to be effective upon such filing. Upon
approval of the proposed amendment to our Articles of
Incorporation, Article V would read as follows:
Reasons for Increasing the Authorized
Number of Shares of Common Stock
The additional shares of common stock authorized upon
adoption of this proposal will be available for issuance from
time to time as determined by the Board, without further
action by the shareholders and without first offering the
shares to the shareholders. The proposed increase will
help ensure, for the foreseeable future, that a sufficient
number of shares will be available, if needed, for issuance
in connection with possible future actions approved by the
Board, including stock splits, stock dividends, acquisitions,
financings, rights offerings, employee benefit programs or
other corporate purposes, or upon exercise of stock
options, stock appreciation rights or warrants. The Board
believes that the availability of the additional shares for
such purposes without delay or the necessity for a
shareholder vote (except as may be required by applicable
law or regulatory authorities or by the rules of any stock
exchange on which the Company’s securities may be
listed) will be beneficial to the Company by providing it with
the flexibility required to respond to future business
opportunities and needs as they arise. The availability of
additional shares of authorized common stock will enable
us to act promptly when the Board determines that the
issuance of additional shares of common stock is
advisable. Assuming shareholder approval of this
proposal, there will be approximately 24,442,100
authorized and unissued shares of common stock that are
not reserved for any specific use and are available for
future issuance.
Article V
The total number of shares which the
Corporation shal
l
have authority to issue is
sixty-one million (61,000,000), consisting of
one million (1,000,000) shares of Preferred
Stock, without par value, and sixty million
(60,000,000) shares of Common Stock,
without par value.
The Company’s Articles authorize 1,000,000
shares of preferred stock. There are
currently no shares of preferred stock
outstanding and Proposal 4 does not
propose to increase the number of
authorized shares of preferred stock.
Anti-Takeover Effect
An increase in the number of shares of common stock that
the Company is authorized to issue could have a potential
anti-takeover effect with respect to the Company, although
our management has not proposed the increase for that
reason and does not presently anticipate using the
additional authorized shares for such a purpose. The
potential anti-takeover effect of the proposed amendment
arises because the Company could issue additional shares
of common stock, up to the total authorized number,
thereby diluting the shareholdings and related voting rights
of then existing shareholders in proportion to the number of
any additional shares issued.
19
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Proposal 5
Advisory Vote on Frequency of Vote on Executive Compensation
As required by the Dodd-Frank Act, at least once every six years the Company is required to request its
shareholders to recommend, in a non-binding advisory resolution, whether the advisory shareholder vote on
executive compensation should occur every one, two or three years.
In formulating its recommendation, our Board believes that a frequency of an annual advisory vote on
executive compensation is the optimal interval for conducting and responding to a “Say-on-Pay” vote. One
of the core principles of our executive compensation program is to align management’s interests with the
interests of our shareholders to support long-term value creation. We encourage our officers to focus on
long-term performance, and recommend an annual vote, thereby allowing the yearly evaluation of our
executive compensation programs by shareholders and in alignment with our long-term performance.
The frequency vote option of every one year, every two years or every three years that receives the highest
number of votes cast by shareholders will be the prevailing preferred frequency for the advisory vote on
executive compensation as selected by the shareholders. However, as this is an advisory vote, the result
will not be binding on our Board or the Company. Our Compensation Committee will consider the outcome
of the vote when determining how often the Company should submit an advisory vote to shareholders to
approve the compensation of its named executive officers included in the Proxy Statement. Proxies
submitted without direction pursuant to this solicitation will be voted for the option of every “ONE YEAR”.
Accordingly, the following resolution is submitted for shareholder vote at the Annual
Meeting of Shareholders:
“RESOLVED, that the highest number of votes cast by the shareholders of Patrick
Industries, Inc. for the option set forth below shall be the preferred frequency
selected by shareholders with which the Company is to hold an advisory vote on
the approval of the compensation of its named executive officers included in the
Proxy Statement: (i) every one year; (ii) or every two years; (iii) or every three
years.”
Recommendation of the Board:
The Board of Directors recommends that shareholders vote for the option of “ONE YEAR” as the frequency
with which shareholders are provided an advisory vote on the compensation of the Company’s named
executive officers included in the Proxy Statement.
The Board will carefully consider the outcome of the vote when making future decisions regarding the frequency of
advisory votes on executive compensation. However, because this vote is advisory and non-binding, the Board may decide
that it is in the best interest of the Company and its shareholders to hold an advisory vote more or less frequently than the
option selected by shareholders.
20
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Executive Compensation
k
The following Compensation Discussion and Analysis (“CD&A”) should be read in conjunction with the executive
compensation tables and corresponding footnotes that follow. The discussion focuses on the compensation program
approved by the Board for the
2024
fiscal year for the Named Executive Officers (“NEOs”).
Named Executive Officers
Andy L. Nemeth
,
Jeffrey M. Rodino
,
Kip B. Ellis
,
Andrew C. Roeder
,
Matthew S. Filer
and
Hugo E. Gonzalez
, who are the
NEOs for fiscal
2024
, are shown below along with a brief biography. Mr. Roeder, who joined the Company in March 2024,
assumed the position of Chief Financial Officer (“CFO”) effective March 5, 2024. Mr. Filer, who joined the Company in
November 2022 as Senior Vice President of Finance, held the position of Interim CFO from May 15, 2023 through March 4,
2024 and was an NEO for a portion of 2024 and is included in the CD&A and accompanying tables as applicable.
|
Andy L. Nemeth was appointed as Chairman of the Board in May 2024, and as Chief
Executive Officer of the Company in January 2020. Prior to that time, Mr. Nemeth
served as President of the Company from January 2016 to July 2021. Mr. Nemeth
was the Executive Vice President of Finance and Chief Financial Officer from May
2004 to December 2015, and Secretary-Treasurer from 2002 to 2015. Mr. Nemeth
has over 33 years of RV, marine, manufactured housing, and industrial experience in
various financial and managerial capacities.
|
|
|
Andy L. Nemeth
Chief Executive Officer
|
|
Jeffrey M. Rodino was named President - Recreational Vehicles ("RV") in January
2024 with responsibility for the oversight, leadership, strategic planning, and
accounting for our RV end market businesses, and served as President of the
Company from July 2021 to January 2024. Prior to that time, Mr. Rodino was Chief
Sales Officer from September 2016 to July 2021 and Executive Vice President of
Sales from December 2011 to July 2021. Mr. Rodino was Chief Operating Officer of
the Company from March 2013 to September 2016, and Vice President of Sales for
the Midwest from August 2009 to December 2011. Mr. Rodino has over 31 years of
experience in serving the RV, marine, manufactured housing, and industrial markets.
|
|
|
Jeffery M. Rodino
President—RV
|
|
|
|
|
Kip B. Ellis was named President - Powersports, Technology and Housing in January
2024, with responsibility for the oversight, leadership, strategic planning and
accounting in those end markets. Mr. Ellis served as Executive Vice President of
Operations and Chief Operating Officer of the Company from September 2016 to
January 2024. He was elected an officer in September 2016. Mr. Ellis joined the
Company as Vice President of Market Development in April 2016. Prior to his role at
Patrick, Mr. Ellis served as Vice President of Aftermarket Sales for the Dometic
Group from 2015 to 2016. Prior to his tenure at Dometic, Mr. Ellis served as Vice
President of Global Sales and Marketing from 2007 to 2015 at Atwood Mobile
Products. Mr. Ellis has over 28 years of experience serving the RV, marine,
manufactured housing, and industrial and automotive markets.
|
|
|
Kip B. Ellis
President—Powersports,
Technology, and Housing
|
21
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
|
Andrew C. Roeder was appointed Executive Vice President – Finance, Chief
Financial Officer and Treasurer of the Company in March 2024. Prior to joining
Patrick, Mr. Roeder served as Chief Financial Officer of the Marine segment of
Polaris, Inc. from 2018 to 2024. Prior to his role at Polaris, Inc. he was the CFO of
Bennington Marine from 2016 to 2018, and the Director of Financial Planning &
Analysis for Bennington from 2014 to 2015. Mr. Roeder has over 10 years of
experience serving the marine industry in various leadership capacities.
|
|
|
Andrew C. Roeder
Executive Vice President—
Finance, Chief Financial
Officer and Treasurer
|
|
Matthew S. Filer was appointed Interim Executive Vice President - Finance, Chief
Financial Officer, and Treasurer of the Company in May 2023, a position which he
held until March 2024 at which time he returned to his previous role as Senior Vice
President of Finance. In May 2024, he was elected Chief Accounting Officer. Mr. Filer
joined the Company in November 2022 as Senior Vice President of Finance. Prior to
his role at Patrick, Mr. Filer was with Caterpillar Inc. from 2007 to 2021, serving in a
series of progressive global leadership roles which culminated in his appointment as
Chief Financial Officer for divisions within Caterpillar’s Resource Industries segment.
With over 28 years of experience with prior organizations that include Honeywell and
Raytheon, Mr. Filer has extensive industry knowledge across multiple disciplines
such as rail, mining, industrial and defense.
|
|
|
Matthew S. Filer
Senior Vice President of
Finance and Chief
Accounting Officer
|
|
Hugo E. Gonzalez was appointed Executive Vice President - Operations in January
2024 and elected as Chief Operating Officer in May 2024. Prior to that, Mr. Gonzalez
served as Senior Vice President of RV Operations for the Company from July 2021
to January 2024, Group Vice President of Operations from February 2020 to June
2021, and Business Unit Director from February 2017 to January 2020. He joined
the Company in 2007 upon Patrick's acquisition of Adorn Holdings, Inc. and served in
a series of progressive leadership roles. Mr. Gonzalez has over 18 years of
experience serving the RV, manufactured housing, and marine markets.
|
|
|
Hugo E. Gonzalez
Executive Vice President—
Operations and Chief Operating
Officer
|
22
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Compensation Discussion
and Analysis
We believe our compensation plan, as it relates to the NEOs and other executives, should be aligned with the Company’s
short-term and long-term organizational strategic agendas and its operating performance and cash flows, and foster
appropriate management ownership in the Company. Our philosophy and objectives are to provide a comprehensive,
market-competitive compensation program designed to attract, retain and motivate the best qualified talent from inside and
outside the industry and to align the interests of our senior management team with the interests of our shareholders. Messrs.
Nemeth, Rodino, Ellis, Roeder, Filer, and Gonzalez comprise our NEOs for fiscal
2024
, as such term is used under SEC
rules.
The Company utilizes a “pay-for-differentiated performance” compensation philosophy that establishes base salaries,
generally lower relative to its peer group companies, coupled with performance-based short-term and long-term incentives
that are generally high relative to its peer group companies. Our performance management system links compensation to
achieving certain objectives based on our short-term and long-term goals. To develop a comprehensive performance and
rewards compensation program for our NEOs and other executives (see below "Plan Components" discussion), the
Compensation Committee conducts, among other analytical measures, independent benchmarking studies in conjunction
with utilizing a third-party compensation consultant.
2024
Executive Compensation Plan:
Pay-at-Risk
The
2024
Executive Compensation Plan for the NEOs was designed to compensate and reward the plan participants with
“pay-for-differentiated performance.” The 2024 Executive Compensation Plan is designed for each component to
incrementally reward the NEOs for performance and the achievement of established key financial metric
s. This plan design
places a high degree of emphasis and reward on variable compensation or “pay-at-risk.” Each element of compensation is
outlined below to demonstrate the philosophy and architecture of the plan's design.
Base Pay (Salary)
To implement our variable pay-at-risk philosophy in
2024
, we intentionally set the NEOs’ base salaries lower than market-
based salaries. The base pay in
2024
for Messrs. Nemeth, Rodino and Ellis was unchanged from their
2023
base pay.
Messrs. Roeder and Gonzalez were not NEOs in
2023
. Mr. Filer's base pay increased in 2024 compared to his 2023 base
pay. Base compensation in
2024
was set to align with the Company's end-market conditions and expected financial
performance
in
2024
an
d was in alignment with the Company’s and NEO’s scope and to assure a competitive position with
the market for total target direct compensation.
The CEO and each of the other NEOs’ base compensation for
2024
was aligned to the 25th to 50th percentile range of their
respective established peer group and general industry data.
|
Executive
|
2024 Base Pay
|
Fixed Or Variable Pay
|
|
CEO
|
$850,000
|
Fixed Pay
|
|
All Other NEOs Combined
(1)
|
2,445,000
|
Fixed Pay
|
(1)
All other NEOs comprised of Messrs.
Rodino
,
Ellis
,
Roeder
,
Filer
and
Gonzalez
.
23
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Non-Equity Incentive Plan Compensation (Short-Term Incentive Plan)
The
2024
Short-Term Incentive Plan (“STIP”) was designed
to reward the CEO and each of the other NEOs for
differentiated incremental performance against the net
income of the plan year (net of
2024
acquisitions) and
achievement of individual performance goals for each NEO.
The STIP is designed to be 100% variable, performance
dependent, pay-at-risk. Assuming target performance, the
net income metric performance accounts for 70% of the
performance payout and each NEO’s personal strategic
objectives account for 30% of the performance payout,
allowing for differentiation of each NEO’s individual
contributions to the performance of the Company. STIP
compensation may range from 0% to 200% of the
established target.
If the NEO's individual performance rating was below the
threshold performance rating, such NEO would not be
eligible for a STIP award regardless of the Company's
performance. If the Company’s net income (net of
acquisitions) performance was below the established
Company performance threshold, no NEO would be eligible
for a STIP award regardless of the NEO's individual
performance.
The STIP threshold, target, stretch and maximum
performance levels for both net income (net of
2024
acquisitions) and personal performance and related
payouts, are noted below for reference.
Company Performance (70% Of Target Performance Payout)
|
Net Income Performance
|
Performance To Plan (%)
|
Payout (%)
|
|
Less Than Threshold
|
<75
|
-
|
|
Threshold
|
75
|
50
|
|
Target (Plan)
|
100
|
100
|
|
Stretch
|
110
|
175
|
|
Maximum
|
115
|
200
|
NEO Individual Performance (30% Of Target Performance Payout)
|
Personal Performance
|
Performance Rating
(0-5 Scale)
|
Payout (%)
|
|
Less Than Threshold
|
<2.5
|
-
|
|
Threshold
|
2.5
|
50
|
|
Target (Plan)
|
3.5
|
100
|
|
Stretch
|
4.4
|
175
|
|
Maximum
|
5.0
|
200
|
The STIP target amount for the CEO and each of the other NEOs is designed to align to the 50th to 75th percentile range of
established peer group and general industry pay percentiles.
|
Executive
|
2024 Target STIP
|
Fixed Or Variable Pay
|
|
CEO
|
$1,800,000
|
Variable Pay
|
|
All Other NEOs Combined
(1)
|
3,830,000
|
Variable Pay
|
(1)
All other NEOs comprised of Messrs.
Rodino
,
Ellis
,
Roeder
,
Filer
and
Gonzalez
.
24
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Long-Term Incentive Plan Compensation (Long-Term Incentive Plan)
The
2024
Long-Term Incentive Plan (“LTIP”) was designed to reward the NEOs for sustained, long-term performance while
providing opportunity for incremental reward for differentiated performance against the Company’s three-year cumulative
earnings before interest, taxes, depreciation and amortization (“EBITDA”) plan. The target value of the LTIP is awarded in
Restricted Stock Units ("RSUs"). The design of the LTIP creates 80% of the target value of the award in the form of
performance-dependent variable pay and 20% in the form of retentive, time-based fixed compensation with three-year cliff
vesting.
The LTIP threshold, target, stretch and maximum performance levels for three-year cumulative EBITDA and related payouts
are noted below for reference.
|
3-Year Cumulative EBITDA
|
Performance To Plan (%)
|
Payout (%)
|
|
Less Than Threshold
|
<80
|
-
|
|
Threshold
|
80
|
50
|
|
Target (Plan)
|
100
|
100
|
|
Stretch
|
110
|
150
|
|
Maximum
|
120
|
200
|
The LTIP target amount for the CEO and each of the other NEOs is designed to align to the 25th to 50th percentile range of
peer and general industry pay percentiles. The table below outlines the target LTIP amount for the CEO and all the other
NEOs combined.
|
Executive
|
2024 Target LTIP
|
Variable Pay (80%)
|
Fixed Pay (20%)
|
|
CEO
|
$3,400,000
|
$2,720,000
|
$680,000
|
|
All Other NEOs Combined
(1)
|
4,661,250
|
3,729,000
|
932,250
|
(1)
All other NEOs comprised of Messrs.
Rodino
,
Ellis
,
Roeder
,
Filer
and
Gonzalez
.
Total Target Compensation Fixed vs. Variable Pay Summary
Upon combining all pay elements of the
2024
Executive Compensation Plan, the percentages of Total Fixed versus Variable
Pay at target are depicted in the table below.
|
Executive
|
Total Target Compensation
|
Total Target Fixed Pay
|
Total Target Variable Pay
|
||
|
$
|
%
|
$
|
%
|
||
|
CEO
|
$6,050,000
|
$1,530,000
|
25.3%
|
$4,520,000
|
74.7%
|
|
All Other NEOs Combined
(1)
|
10,936,250
|
3,377,250
|
30.9%
|
7,559,000
|
69.1%
|
(1)
All other NEOs comprised of Messrs.
Rodino
,
Ellis
,
Roeder
,
Filer
and
Gonzalez
.
Clawback Policy
An Incentive Compensation Recovery Policy (otherwise commonly referred to as a "Clawback Policy") was implemented by
the Board in 2023 in alignment with federal securities regulations and NASDAQ listing requirements.
25
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Participants and Roles
|
Participants
|
Responsibilities
|
|
Compensation Committee
|
•
Reviews and approves, with input from our management team and external advisors, the
Company’s executive compensation programs, including the NEOs.
•
Provides annual and ongoing review, discussion, analysis and recommendations regarding the
evaluation of the execution of the performance plan for the NEOs against defined business
objectives.
|
|
Independent Committee
Consultant
|
•
Provides published survey data, peer group proxy data and analysis and consultation to the
Compensation Committee on executive and non-employee director compensation.
•
Establishes and maintains an independent perspective to avoid any conflicts of interests while
working directly for the Compensation Committee unless the Committee has preapproved any work
to be conducted with management for review by the Committee and approval by the Board.
|
|
Chief Executive Officer
and Chief Human
Resources Officer
|
•
When requested by the Compensation Committee, provide executive compensation plan input
related to the performance management structure and provide support on compensation program
design and implementation, as well as compliance and disclosure requirements.
•
The CEO evaluates the performance plans of the Presidents of our end market pillars, COO, CFO
and other executives in accordance with the Board approved plan.
|
Plan Factors
There are several key factors the Compensation Committee considers when recommending plan-year executive
compensation decisions:
•
NEO's role, position scope, experience, skill set and performance history;
•
External market for comparable roles;
•
Current and expected business climate; and
•
Company’s financial position and operating results.
Plan Components
The Compensation Committee utilizes its own judgment in approving the components of compensation and plan targets for
the NEOs. The Compensation Committee further reviews and approves compensation including base compensation,
targets, thresholds, and maximums for short-term and long-term incentive compensation. In addition, the Compensation
Committee utilizes a third-party compensation consulting firm, Willis Towers Watson, to provide relevant compensation
benchmarks for the NEOs and other key leadership roles in the Company as well as plan design review and input. The CEO
evaluates the performance plans of the Presidents of our end market pillars, COO, CFO and other executive officers with the
Compensation Committee. The CEO develops his individual objectives for the plan year and evaluates his performance
against those objectives. Final determinations regarding our CEO’s performance and compensation are made during an
executive session of the Compensation Committee and are reported to and reviewed by the Board in an independent
directors’ session. Holders of approximately 95% of the shares voted in the most recent shareholder advisory vote at our
Annual Meeting of Shareholders held on
May 16, 2024
voted to approve the compensation of the NEOs for fiscal year
2023
.
The Compensation Committee takes the shareholder advisory voting results, along with any other shareholder input on
executive compensation, into consideration as one of several decision points in its executive compensation decision making
process for each plan year.
26
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Benchmark Sources and Fiscal Year
2024
Peer Group
An important factor in establishing the 2024 Executive
Compensation Plan is the external market for comparable
roles. The Compensation Committee utilizes a benchmark
peer group for purposes of market comparison to our executive
compensation packages based on our general guidelines and
as described under "Plan Components." Based on the data
utilized from an index of General Industry companies provided
by the Central Data Base Survey of Willis Towers Watson, our
independent Compensation Committee consultant, there were
no changes made by the Compensation Committee to the
benchmark peer group for the period ended
December 31,
2024
(as compared to the
2023
peer group) other than the
deletion of Masonite International Corporation due to the
acquisition of the company. We believe the following
companies listed represent an effective comparator group of
similar size with similar scope of revenue and market
capitalization.
•
American Woodmark Corporation
•
Apogee Enterprises, Inc.
•
Brunswick Corporation
•
Cavco Industries, Inc.
•
EnPro Industries, Inc.
•
Hyster-Yale Materials Handling, Inc.
•
LCI Industries, Inc.
•
Modine Manufacturing Company
•
Mueller Industries, Inc.
•
Polaris, Inc.
•
Thor Industries, Inc.
•
UFP Industries, Inc.
•
Wabash National Corporation
•
Winnebago Industries, Inc.
27
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Fiscal Year
2024
Executive
Compensation
|
Compensation And
Benefits Components
|
Description And Purpose
|
|
Base Salary
|
Cash payments reflecting a market competitive position for performance of functional role.
|
|
Short-Term Incentives
|
Lump sum cash payments reflective of approved pay-for-performance plan and the relative
achievements of the business and individual performance objectives. In addition, the Board reserves
the right at any time to award discretionary bonuses to senior management based on, among other
factors, outstanding performance.
|
|
Long-Term Incentives
|
Stock vehicle grants reflecting approved pay-for-performance plan and the relative long-term
achievement of the business performance plans as well as the Company’s desire to retain high-
performing talent and align the interests of senior management with shareholder interests.
|
|
Executive Health and Welfare Benefits
|
Health and welfare benefits mirror scope of standard plans for all employees.
|
|
Other Compensation
|
Other compensation includes: automobile allowance, Company contributions pursuant to the Patrick
Industries, Inc. 401(k) Plan and to individual Health Savings Accounts, and health club reimbursement
pursuant to the Company’s general health and welfare program.
|
|
Severance Benefits
|
Reasonable and customary transition support aligned to market benchmark data.
|
Base Salary
The Compensation Committee reviews and approves the base salaries of the NEOs each year, as well as at the time of
promotion, change in job responsibilities or any other change deemed to be a material event. Base salaries are set during
the first quarter of each year. The Compensation Committee sets the salary for the CEO and approves the base salaries for
the other NEOs and other executive officers based on recommendations by the CEO.
When determining base salary adjustments for its NEOs, the Compensation Committee considers a combination of (i) peer
group data, (ii) market data, including industry norms and benchmarking data from companies of similar size and scope and
(iii) outstanding Company and individual performance. In general, the Compensation Committee targets the 25th to 50th
percentile of the Company’s peer group in determining base salaries.
|
Name
|
2023 Base Salary
|
2024 Base Salary
|
% Increase/Decrease
|
|
Andy L. Nemeth
|
$850,000
|
$850,000
|
—
%
|
|
Jeffrey M. Rodino
|
575,000
|
575,000
|
—
%
|
|
Kip B. Ellis
|
525,000
|
525,000
|
—
%
|
|
Andrew C. Roeder
(1)
|
—
|
500,000
|
—
%
|
|
Matthew S. Filer
(2)
|
350,000
|
375,000
|
7
%
|
|
Hugo E. Gonzalez
(3)
|
350,000
|
470,000
|
34
%
|
(1)
Mr. Roeder joined the Company in March 2024 and assumed the position of CFO.
(2)
Mr. Filer, who joined the Company in November 2022 as Senior Vice President of Finance, held the position of Interim CFO for the period of May 15, 2023
through December 31, 2023 and from January 1, 2024 through March 4, 2024. The amounts shown for 2023 and 2024 represent his full annual salary.
(3)
Mr. Gonzalez's base salary in 2024 was adjusted to reflect his appointment to Executive Vice President of Operations in January 2024. The amount shown
for 2024 represents his full annual salary.
28
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Non-Equity Incentive Plan Awards
The short-term incentive portion of the
2024
Executive Compensation Plan or "STIP" consists of annual non-equity incentive
plan awards, which are reviewed and approved each year and are based on the Company’s financial results and the
individual’s performance against defined objectives. Several key components were considered in the development of the
2024
STIP to align the
2024
STIP with shareholder interest by measuring the Company’s financial performance and the
individual’s performance in support of the Company’s short- and long-term strategies. The components are noted on page
23.
The STIP metric components for
2024
are as follows:
|
2024 STIP Award Component ($ in millions)
|
Threshold
Performance
|
Target
Performance
|
Maximum
Performance
|
|
Company Performance (Net Income)
(1)
|
$115.1
|
$153.4
|
$176.5
|
|
Individual Rating
|
2.5
|
3.5
|
5.0
|
|
Payout as a Percentage of Target Award
|
50%
|
100%
|
200%
|
(1)
All net income targets are net of the contributions of
2024
acquisitions and certain one-time and non-recurring charges and credits.
The Company achieved adjusted fiscal
2024
net income of $150.2 million (net of
2024
acquisitions and non-recurring
charges and credits) which equated to 98% of the target Company performance. When combined with the individual
performance rating for each NEO, the actual STIP award payouts for
2024
were as follows:
|
Name / Benefit
|
2024 Base Salary
(1)
|
Target Award
As % Of Base
Salary
(2)
|
Target STIP Award
|
Actual Award
Amount As % Of
Target Award
|
Actual 2024 STIP
Award Payout
|
|
Andy L. Nemeth
|
$850,000
|
212%
|
$1,800,000
|
105%
|
$1,884,600
|
|
Jeffrey M. Rodino
|
575,000
|
174%
|
1,000,000
|
106%
|
1,063,500
|
|
Kip B. Ellis
|
525,000
|
171%
|
900,000
|
127%
|
1,144,350
|
|
Andrew C. Roeder
(3)
|
500,000
|
125%
|
625,000
|
93%
|
579,375
|
|
Matthew S. Filer
(4)
|
375,000
|
80%
|
300,000
|
112%
|
336,600
|
|
Hugo E. Gonzalez
|
470,000
|
187%
|
880,000
|
105%
|
921,360
|
(1)
The 2024 Base Salary for each of the NEOs reflects the Base Salary in effect as of January 2024 with the exception of Mr. Roeder who joined the Company
in March 2024.
(2)
The target award as a percentage of base salary for the NEOs, with the exception of Mr. Roeder, was determined by the Compensation Committee and
applied to the base salary in effect as of January 2024. The target award as a percentage of base salary was established for each NEO in 2024 in alignment
with the Company’s “pay-for-differentiated-performance” philosophy, market competitive positions for earned payout, and further enhancement of the pay-at-
risk for each NEO.
(3)
Mr. Roeder's target STIP award was prorated to reflect the period from his hire date of March 5, 2024 through December 31, 2024. His full year 2024 target
STIP award was $750,000.
(4)
Mr. Filer’s actual 2024 STIP award payout excluded an additional $300,000 one-time bonus payment related to his service as Interim CFO from January 1,
2024 through March 4, 2024 and to his appointment as Chief Accounting Officer in May 2024.
While these targets were used in fiscal year
2024
, the Compensation Committee reserves the right to modify, cancel,
change or reallocate any components of this calculation or criteria at any time.
Each NEO’s individual performance rating takes into account four strategic performance objectives in assessing the
personal performance of the NEOs named in the Summary Compensation Table for
2024
. The four strategic objectives are
specific for each NEO and are linked to the Company’s strategic plan and that year’s organizational strategic agenda and
include, among others:
1.
Improving the revenue and profitability of business units under the leadership and control of the NEO;
2.
The introduction of new product lines and product line extensions to achieve target revenue growth levels and market
share;
3.
The ongoing evaluation of strategic opportunities related to our capital allocation strategy and the execution of those
opportunities, as appropriate; and
4.
Objectives linked to developing and managing talent consistent with the Company’s values and enhancing and
developing the leadership capabilities of the Company’s future leaders.
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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The NEOs, other than Mr. Nemeth, initially developed their own individual objectives for the plan year which were then
reviewed and approved by the CEO.
For the
2024
STIP award, Mr. Filer initially developed his own objectives for the plan
year, based on his then-current role of Interim CFO. His objectives were reviewed and approved by Mr. Nemeth. Mr. Nemeth
developed his objectives as CEO for the plan year which were reviewed and approved by the Board.
In assessing the NEOs’ individual performance, the Compensation Committee is provided with detailed quantitative and
qualitative documentation substantiating individual performance against each individual objective.
The Compensation Committee looks to the CEO’s performance assessments of the other NEOs and his recommendations
regarding a performance rating for each, as well as input from the non-management Board members. These
recommendations may be adjusted by the Compensation Committee prior to finalization. The personal performance
assessment of our CEO is determined by the Compensation Committee with input from members of the Board.
While the achievement of corporate objectives is quantified with an individual rating, each NEO’s relative contribution to
those objectives is only one qualitative component against which the individual’s performance is assessed by the
Compensation Committee.
Long-Term Equity Incentive Plan
We believe long-term incentive compensation represents an important and appropriate motivational tool to achieve certain
long-term Company goals and closely align the interests of our management team with those of our shareholders. Our
executive officers participate in our Long-Term Incentive Plan or "LTIP" as a result of their ability to make a significant
contribution to the Company’s financial performance, their level of responsibility, their ability to meet performance objectives
and their leadership potential and execution.
In
2024
, the Compensation Committee adopted a Board approved “pay-for-differentiated-performance” based Long-Term
Incentive Plan (“
2024
LTIP”) for each of the NEOs. The
2024
LTIP utilizes a long-term incentive target award, which is
established as a percentage of base compensation for each of the NEOs. The target award is comprised of a restricted
share award (80% of which is Company performance-contingent and 20% of which is time-based).
In determining the number of shares comprising the 2024 LTIP award, the target value of the restricted share component is
divided by the stock price per share as established by the Board for the particular plan year, reflecting the trading price
range of the common stock preceding the grant date ($63.34 for the
2024
LTIP award), with the exception of Mr. Roeder's
2024 LTIP award. The number of shares comprising Mr. Roeder's 2024 LTIP award reflected the stock price on the date of
grant ($78.88 for his 2024 LTIP award), which was the closing stock price on March 5, 2024. The awarded target shares vest
over a three-year period as follows:
•
Time-based shares cliff vest at the conclusion of the three-year service period from the grant date.
•
Performance-contingent shares are earned based on the achievement of the three-year cumulative Company EBITDA
performance (
2024
to
2026
) against a target from 0% up to a maximum payout of 200% of target.
The
2024
LTIP further reflects the Company’s “pay-for-differentiated-performance” philosophy through its upside potential for
performance in excess of target levels.
For
2024
, the target as a percentage of base compensation was increased from the
2023
LTIP for all NEOs in alignment
with the Company’s “pay-for-differentiated-performance” philosophy, anticipated conditions in the Company’s end markets,
market competitive positions for earned payout, and the increased component of the pay-at-risk compensation for each
NEO.
The table below shows a sample calculation of
2024
LTIP award components:
|
Base
Salary
|
Target Award As A %
Of Base Salary
|
Target Award 2,250
Restricted Shares @
$63.34 Per Share)
|
Restricted Shares Target Award:
Performance-Contingent (80%)
(Shares @ $63.34 Per Share)
|
Restricted Shares Target Award:
Time-Based (20%) (Shares @ $63.34
Per Share)
|
||||
|
$475,000
|
30%
|
$142,500
|
1,800
|
450
|
The 2024 LTIP award is divided into (i) restricted shares with time-based vesting (“Time-Based Shares”) and (ii) restricted
shares with performance-based vesting (“Performance-Contingent Shares”). The Compensation Committee believes that
the use of Time-Based Shares and Performance-Contingent Shares aligns the NEO's focus with the Company’s long-term
financial performance objectives and provides that a significant retention value of the granted equity is maintained for each
NEO.
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
The threshold, target, stretch and maximum performance metrics for the
2024
LTIP are outlined below:
|
Plan Component
|
Threshold EBITDA
Performance
(1)
Payout As % Of Target
|
Target EBITDA
Performance
(1)
Payout As % Of Target
|
Stretch EBITDA
Performance
(1)
Payout As % Of Target
|
Maximum EBITDA
Performance
(1)
Payout As % Of Target
|
|
Time-Based Shares
|
100%
|
100%
|
100%
|
100%
|
|
Performance-
Contingent Shares
|
50%
|
100%
|
150%
|
200%
|
(1)
The Company EBITDA performance is measured as the cumulative EBITDA achieved in 2024, 2025 and 2026.
The target
2024
LTIP award components for the NEOs, with the exception of Mr. Roeder, as approved by the Board in
January
2024
, were as follows:
|
Name
|
Total Target Award
As % Of Base Salary
|
Total Target Award
($)
|
Total Target Award
(Shares)
|
Target Time-Based
Share Award (Shares)
|
Target Performance-
Contingent Share
Award (Shares)
|
|
Andy L. Nemeth
|
400%
|
$3,400,000
|
53,685
|
10,737
|
42,948
|
|
Jeffrey M. Rodino
|
257%
|
1,475,000
|
23,290
|
4,658
|
18,632
|
|
Kip B. Ellis
|
243%
|
1,275,000
|
20,132
|
4,026
|
16,106
|
|
Andrew C. Roeder
(1)
|
150%
|
750,000
|
7,925
|
1,586
|
6,339
|
|
Matthew S. Filer
|
70%
|
261,250
|
4,125
|
825
|
3,300
|
|
Hugo E. Gonzalez
|
191%
|
900,000
|
14,212
|
2,843
|
11,369
|
(1)
Mr. Roeder's total target award figure represents his full year target award. The target Ti
me-Based Share award for Mr. Roeder excludes an additional one-
time grant of 22,500 restricted common shares, which will vest in 7,500 share increments on March 5, 2025, 2026 and 2027, subject to his continued
employment.
Individual NEO threshold, target, stretch and maximum payouts in shares for each long-term incentive component of the
2024
LTIP are outlined below:
|
Name
|
Threshold EBITDA
Performance
Component Award
(Shares)
|
Target EBITDA
Performance
Component Award
(Shares)
|
Stretch EBITDA
Performance
Component Award
(Shares)
|
Maximum EBITDA
Performance
Component Award
(Shares)
|
|
Time-Based Shares
(1) (2)
|
||||
|
Andy L. Nemeth
|
10,737
|
10,737
|
10,737
|
10,737
|
|
Jeffrey M. Rodino
|
4,658
|
4,658
|
4,658
|
4,658
|
|
Kip B. Ellis
|
4,026
|
4,026
|
4,026
|
4,026
|
|
Andrew C. Roeder
(3)
|
1,586
|
1,586
|
1,586
|
1,586
|
|
Matthew S. Filer
|
825
|
825
|
825
|
825
|
|
Hugo E. Gonzalez
|
2,843
|
2,843
|
2,843
|
2,843
|
|
Performance-Contingent Shares
(1)
|
||||
|
Andy L. Nemeth
|
21,474
|
42,948
|
64,422
|
85,896
|
|
Jeffrey M. Rodino
|
9,316
|
18,632
|
27,948
|
37,264
|
|
Kip B. Ellis
|
8,053
|
16,106
|
24,159
|
32,212
|
|
Andrew C. Roeder
|
3,170
|
6,339
|
9,509
|
12,678
|
|
Matthew S. Filer
|
1,650
|
3,300
|
4,950
|
6,600
|
|
Hugo E. Gonzalez
|
5,685
|
11,369
|
17,054
|
22,738
|
(1)
Represents the number of
shares for the threshold,
target, stretch and maximum
payouts for the Time-Based
Shares and Performance-
Contingent Shares for the
2024 LTIP award.
(2)
The Time-Based Shares cliff
vest at the conclusion of the
required three-year service
period.
(3)
Mr. Roeder's Time-Based
Shares exclude an additional
one-time grant of 22,500
restricted common shares,
which will vest pro-rata on
March 5 of each of the three
years following the grant
date, subject to his
continued employment.
The Company records the estimated compensation expense over the life of the LTIP performance period in alignment with
the Company's LTIP target payout (100%) and adjusts its estimates on a periodic basis, if needed. The NEOs have voting
rights with respect to all of the shares as of the date of grant and the shares will be returned to the Company in the event
that performance targets or time-based vesting requirements are not achieved. The actual payout under the
2024
LTIP for all
the NEOs will be determined at the conclusion of the three-year performance period ending on
December 31, 2026
(the third
year in the cumulative EBITDA performance measurement period) and payment of the award will be settled in stock.
Dividends on unvested shares are held in escrow by the Company and are paid in cash when the shares become fully
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
vested. See “Potential Payments Upon Termination or Upon a Change of Control” for a discussion of amounts payable to
each of the NEOs upon termination or a change in control.
Stock Ownership Requirement
The NEOs and other executive officers are required to maintain a predefined multiple of base salary in the form of ownership
of the Company’s common stock based on the Board-established target price for a particular plan year to be achieved over
a period of three years. The Company does not have a specific holding/retention period for stock options and stock
appreciation rights (“SARS”) exercised or for the vesting of stock-based grants. For each of the NEOs employed by the
Company as of
December 31, 2024
, their respective total common stock ownership for the year ended
December 31, 2024
exceeded the stock ownership requirement. The following table sets forth information about the required share value of the
common stock to be owned by each NEO for the year ended
December 31, 2024
:
|
Name
|
2024 Base Salary
|
2024 Multiple of Base
Salary
|
Required Total Share
Value
(1)
|
|
Andy L. Nemeth
|
$850,000
|
4X
|
$3,400,000
|
|
Jeffrey M. Rodino
|
575,000
|
2X
|
1,150,000
|
|
Kip B. Ellis
|
525,000
|
2X
|
1,050,000
|
|
Andrew C. Roeder
|
500,000
|
2X
|
1,000,000
|
|
Matthew S. Filer
|
375,000
|
2X
|
750,000
|
|
Hugo E. Gonzalez
|
470,000
|
2X
|
940,000
|
(1)
Inclusive of the fair value of
stock options, SARS, restricted
stock and restricted stock units
awarded by the Company and
shares purchased by the NEO
in the open market. Total share
value is calculated based on the
NASDAQ Stock Market closing
price on December 31, 2024.
Hedging
The Company does not have a policy that prevents employees (including officers) or directors from engaging in hedging
transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s
equity securities, and such transactions are generally permitted.
Executive Compensation Considerations
Executive Retirement Plan
As part of a long-term compensation program established
prior to 2007, the Company maintains a non-qualified
executive retirement plan (the “Executive Retirement Plan”)
for Mr. Nemeth. According to the provisions of the Executive
Retirement Plan, Mr. Nemeth is entitled to receive annually
40% of his highest annual base wages earned in the last
three years prior to retirement or termination from the
Company paid over 10 years in 260 consecutive bi-weekly
payments. No new employees have been invited to
participate in the Executive Retirement Plan since January
1, 2007.
Perquisites
The Company believes in a performance-based
compensation and benefits package and, therefore,
provides few perquisites to our NEOs. The Company
provides a car allowance to our NEOs, other executives,
corporate managers and general managers, all of which are
included as taxable income.
Benefit Plans
The Company does not maintain separate benefit plans for
our NEOs. They participate in the same health and welfare
plans as all of our other general employees with the same
deductibles and co-pays. The NEOs also participate in the
same 401(k) retirement program as all of the other general
employees.
Insider Trading Policy
The Company has an
insider trading policy
whereby the mandatory trading blackout period begins 14 calendar days prior to
the close of trading on the stock market on the last trading day of the Company's quarterly reporting period and ends after
the first full trading day following the public release of the financial information for that reporting period. During this period,
Section 16 insiders and certain management and other employees who have access to “inside” information are precluded
from trading in the public market any types of Company stock or other securities. Additionally, the Company precludes any
Section 16 insider, as defined by the SEC, director, officer or employee from trading in the public market, or any other
market, based on information that is not made available to the general public.
to the disclosure of material nonpublic information and
the Board and Compensation Committee make no determinations as
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|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
Tax Considerations
The Tax Cuts and Jobs Act enacted on December 22, 2017 modified IRC Section 162(m) to, among other things, limit the
federal tax deduction for annual individual compensation paid to $1 million for NEOs beginning with the 2018 tax year.
Previously, compensation paid in excess of $1 million could be deducted if it was performance-based. The Tax Cuts and
Jobs Act includes a transition relief rule in which these changes do not apply to compensation payable pursuant to a written
binding contract in effect on November 2, 2017, and is not materially modified after that date.
Compensation Committee
The foregoing report of the
Compensation Committee does
not constitute soliciting material
and shall not be deemed
incorporated by reference by any
general statement incorporating
by reference the Proxy Statement
into any filing by the Company
under the Securities Act of 1933
or the Securities Exchange Act of
1934, except to the extent that the
Company specifically
incorporates this information by
reference, and shall not otherwise
be deemed filed under such acts.
Compensation
Committee
Report
The Compensation Committee of the Company has reviewed
and discussed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management
and, based on such review and discussions, the
Compensation Committee recommended to the Board that
the Compensation Discussion and Analysis be included in
this Proxy Statement.
The Compensation Committee
Denis G. Suggs (Chairman)
John A. Forbes
Michael A. Kitson
Derrick B. Mayes
Compensation Committee
ReportReport
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Summary Compensation
Table
The following Summary Compensation Table sets forth information about the compensation paid to our NEOs for the years
ended December 31,
2024
,
2023
and
2022
. There were no stock options or SARS awarded to our NEOs for the years
ended December 31,
2024
,
2023
and
2022
.
|
Name And Principal
Position
|
Year
|
Salary
(1)
|
Bonus
(2)
|
Stock
Awards
(3)
|
Option
Awards
(4)
|
Non-Equity
Incentive Plan
Compensation
(5)
|
Change In
Pension
Value And
Non-Qualified
Deferred
Compensation
Earnings
(6)
|
All
Other
Compensation
(7)
|
Total
|
|
Andy L. Nemeth
Chief Executive
Officer
|
2024
|
$850,000
|
$-
|
$3,564,636
|
$-
|
$1,884,600
|
$72,338
|
$28,800
|
$6,400,374
|
|
2023
|
817,308
|
-
|
4,200,020
|
-
|
1,632,600
|
69,223
|
29,400
|
6,748,551
|
|
|
2022
|
832,692
|
-
|
3,516,100
|
-
|
3,374,820
|
58,449
|
28,400
|
7,810,461
|
|
|
Jeffrey M. Rodino
President, RV
(8)
|
2024
|
566,154
|
-
|
1,546,426
|
-
|
1,063,500
|
-
|
13,415
|
3,189,495
|
|
2023
|
546,250
|
-
|
1,785,000
|
-
|
931,900
|
-
|
25,800
|
3,288,950
|
|
|
2022
|
611,442
|
-
|
1,494,376
|
-
|
1,850,000
|
-
|
24,800
|
3,980,618
|
|
|
Kip B. Ellis
President, Powersports,
Technology, and
Housing
(9)
|
2024
|
525,000
|
-
|
1,336,742
|
-
|
1,144,350
|
-
|
26,400
|
3,032,492
|
|
2023
|
504,808
|
-
|
1,540,064
|
-
|
793,890
|
-
|
25,800
|
2,864,562
|
|
|
2022
|
516,346
|
-
|
1,289,264
|
-
|
1,710,090
|
-
|
24,800
|
3,540,500
|
|
|
Andrew C. Roeder
Executive Vice President -
Finance, Chief Financial
Officer and Treasurer
(10)
|
2024
|
392,308
|
-
|
2,399,682
|
-
|
579,375
|
-
|
10,000
|
3,381,365
|
|
Matthew S. Filer
Executive Vice President of
Finance, Treasurer and
Former Interim Chief
Financial Officer
(11)
|
2024
|
372,115
|
300,000
|
273,905
|
-
|
336,600
|
-
|
14,177
|
1,296,797
|
|
2023
|
336,539
|
300,000
|
238,000
|
-
|
260,800
|
-
|
64,985
|
1,200,324
|
|
|
Hugo E. Gonzalez
Executive Vice President -
Operations and Chief
Operating Officer
(12)
|
2024
|
456,154
|
-
|
943,584
|
-
|
921,360
|
-
|
25,300
|
2,346,398
|
(1)
For information on base salaries, see “Base Salary”.
(2)
The NEOs did not receive any payments that would be characterized as “Bonus” Payments for the fiscal years ended December 31, 2022, 2023 and 2024,
with the exception of Mr. Filer who received a discretionary bonus payment related to his service as Interim CFO in 2023 and 2024, and for his appointment
to Chief Accounting Officer in 2024.
(3)
Amounts shown do not reflect compensation actually received. Such amounts reflect the aggregate fair value of stock awards granted during the year which
is generally the total amount that the Company expects, as of the grant date, to expense in its financial statements over the awards vesting schedule in
accordance with ASC 718. See Note 16 to the Consolidated Financial Statements in our 2024 Annual Report on Form 10-K for the assumptions used in
determining the fair value of equity awards. See “Long-Term Equity Incentive Plan” for additional information.
(4)
There were no stock option awards granted for the fiscal years ended December 31, 2022, 2023 and 2024.
(5)
Amounts shown represent the short-term incentive awards earned each year by each of the NEOs and approved by the Compensation Committee, based on
the achievement by the Company of established financial targets and the individual performance targets for the NEO for such year. See “Non-Equity
Incentive Plan Awards” for additional information.
(6)
Amounts shown do not reflect compensation actually received. Such amounts reflect the aggregate change in the present value of the NEO’s accumulated
benefit under the Executive Retirement Plan. In computing these amounts, the Company uses various assumptions including remaining years of service,
estimated discount rates and present value calculations.
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|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
(7)
The amounts included in “All Other Compensation” are detailed in the following table:
|
Name And Principal Position
|
Year
|
401(k) Matching
Contribution
|
Other
(A)
|
Total All Other
Compensation
|
|||
|
Andy L. Nemeth
|
2024
|
$13,800
|
$15,000
|
$28,800
|
|||
|
2023
|
13,200
|
16,200
|
29,400
|
||||
|
2022
|
12,200
|
16,200
|
28,400
|
||||
|
Jeffrey M. Rodino
|
2024
|
1,415
|
12,000
|
13,415
|
|||
|
2023
|
13,200
|
12,600
|
25,800
|
||||
|
2022
|
12,200
|
12,600
|
24,800
|
||||
|
Kip B. Ellis
|
2024
|
13,800
|
12,600
|
26,400
|
|||
|
2023
|
13,200
|
12,600
|
25,800
|
||||
|
2022
|
12,200
|
12,600
|
24,800
|
||||
|
Andrew C. Roeder
|
2024
|
10,000
|
—
|
10,000
|
|||
|
Matthew S. Filer
(B)
|
2024
|
4,577
|
9,600
|
14,177
|
|||
|
2023
|
5,385
|
59,600
|
64,985
|
||||
|
Hugo E. Gonzalez
|
2024
|
13,800
|
11,500
|
25,300
|
(A)
Amounts shown reflect an automobile allowance, the Company contribution to individual Health Savings Accounts, and health club reimbursement pursuant
to the Company’s general health and welfare program. For 2022, 2023 and 2024, cash dividends paid on the Time-Based and Performance-Contingent
Share awards that were granted in January 2019, January 2020 and January 2021, and which fully vested in January 2022, January 2023 and January 2024,
respectively, were not required to be included in other compensation as the value of the original awards reflected the assumed effective dividend rate in the
award’s initial grant date fair value calculation.
(B)
Other amount in 2023 for Mr. Filer also includes a one-time cash payment related to relocation expenses upon his joining the Company in November 2022.
(8)
Mr. Rodino was named President, RV in January 2024 and was President of the Company from July 2021 to January 2024.
(9)
Mr. Ellis was named President, Powersports, Technology, and Housing in January 2024 and was Executive Vice President of Operations and Chief Operating
Officer of the Company from September 2016 to January 2024.
(10)
Mr. Roeder was appointed Executive Vice President-Finance, Chief Financial Officer and Treasurer of the Company on March 5, 2024.
(11)
Mr. Filer assumed the position of Interim CFO on May 15, 2023, a position he held through March 4, 2024, at which time he returned to his previous role as
Senior Vice President of Finance. In May 2024, he was elected Chief Accounting Officer.
(12)
Mr. Gonzalez was appointed Executive Vice President-Operations in January 2024 and was elected as Chief Operating Officer in May 2024.
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Grants of Plan-Based Awards
During Fiscal Year
2024
The table below sets forth information on grants of plan-based awards to the NEOs in
2024
, including estimated payouts
under non-equity incentive plan awards as set forth under “Non-Equity Incentive Plan Awards”, estimated payouts under
equity incentive plan awards as set forth under “Long-Term Equity Incentive Plan”, and stock awards and all other option
awards as set forth in the “Summary Compensation Table”. The Company’s policy is generally to grant equity awards
effective on the date the Compensation Committee approves such awards.
|
Estimated Future Payouts Under Non-
Equity Incentive Plan Awards
(1)
|
Estimated Future Payouts Under Equity
Incentive Plan Awards
(2)
|
All Other
Stock
Awards:
# Of
Shares
Of Stock
Or Units
(3)
|
Closing
Market
Price On
Grant
Date Per
Share
(4)
|
Grant Date
Fair Value
Of Stock
Awards/
SARs
(5)
|
|||||||
|
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Stretch
|
Maximum
|
|||
|
Andy L. Nemeth
|
1/24/2024
|
$900,000
|
$1,800,000
|
$3,600,000
|
21,474
|
42,948
|
64,422
|
85,896
|
10,737
|
$66.40
|
$3,564,636
|
|
Jeffrey M. Rodino
|
1/24/2024
|
500,000
|
1,000,000
|
2,000,000
|
9,316
|
18,632
|
27,948
|
37,264
|
4,658
|
66.40
|
1,546,426
|
|
Kip B. Ellis
|
1/24/2024
|
450,000
|
900,000
|
1,800,000
|
8,053
|
16,106
|
24,159
|
32,212
|
4,026
|
66.40
|
1,336,742
|
|
Andrew C. Roeder
|
3/05/2024
|
375,000
|
750,000
|
1,500,000
|
3,170
|
6,339
|
9,509
|
12,678
|
24,086
|
78.88
|
2,399,682
|
|
Matthew S. Filer
(6)
|
1/24/2024
|
150,000
|
300,000
|
600,000
|
1,650
|
3,300
|
4,950
|
6,600
|
825
|
66.40
|
273,905
|
|
Hugo E. Gonzalez
|
1/24/2024
|
440,000
|
880,000
|
1,760,000
|
5,685
|
11,369
|
17,054
|
22,738
|
2,843
|
66.40
|
943,584
|
(1)
The related performance targets and results for fiscal 2024 are described in detail under “Non-Equity Incentive Plan Awards”. For the actual non-equity
incentive awards for performance in 2024, see the “Summary Compensation Table”.
(2)
Represents number of shares of stock. Restricted shares granted in fiscal 2024 under the 2024 LTIP that are Performance-Contingent Shares will vest based
on actual EBITDA achieved as compared to target EBITDA at the conclusion of the cumulative three-year performance measurement period ending on
December 31, 2026. See detail under “Long-Term Equity Incentive Plan”.
(3)
These shares represent the Time-Based Share awards granted in fiscal 2024 that vest on the third anniversary of the grant date. See detail under “Long-
Term Equity Incentive Plan”. For Mr. Roeder, his total shares include an additional one-time grant of 22,500 restricted common shares, which will vest pro-
rata on March 5 of each of the three years following the grant date.
(4)
Represents the closing price of the Company’s stock on the NASDAQ Stock Market on the grant date for the share awards.
(5)
Represents the fair value of share awards as of the grant date computed in accordance with ASC 718. The compensation expense related to these awards
was adjusted in the Company’s financial statements in accordance with ASC 718 in the period of forfeiture.
(6)
The target non-equity incentive plan award for Mr. Filer and his actual 2024 STIP award payout excluded an additional $300,000 one-time bonus payment
made in recognition of his service to the Company as Interim CFO and his appointment to Chief Accounting Officer.
36
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Outstanding Equity Awards
as of December 31,
2024
The following table summarizes the outstanding stock awards held by the NEOs as of December 31,
2024
.
Stock Awards
|
Name
|
Grant Date
|
Number Of Shares Or
Units Of Stock That Have
Not Vested
(1)
|
Market Value Of Unearned
Shares Or Units Of Stock
That Have Not Vested
(2)
|
Equity Incentive Plan
Awards: Number Of
Shares Or Units That
Have Not Vested
(3)
|
Equity Incentive
Plan Awards: Market
Or Payout Value Of
Unearned Shares Or
Units That Have Not
Vested
(2)
|
|
Andy L. Nemeth
|
1/24/2024
|
10,737
|
$892,030
|
42,948
|
$3,568,120
|
|
1/25/2023
|
13,236
|
1,099,647
|
79,412
|
6,597,549
|
|
|
1/26/2022
|
11,688
|
971,039
|
46,755
|
3,884,405
|
|
|
Jeffrey M. Rodino
|
1/24/2024
|
4,658
|
386,987
|
18,632
|
1,547,947
|
|
1/25/2023
|
5,625
|
467,325
|
33,750
|
2,803,950
|
|
|
1/26/2022
|
4,968
|
412,741
|
19,871
|
1,650,883
|
|
|
Kip B. Ellis
|
1/24/2024
|
4,026
|
334,480
|
16,106
|
1,338,086
|
|
1/25/2023
|
4,853
|
403,187
|
29,120
|
2,419,290
|
|
|
1/26/2022
|
4,286
|
356,081
|
17,144
|
1,424,324
|
|
|
Andrew C. Roeder
|
3/05/2024
|
24,086
|
2,001,065
|
6,339
|
526,644
|
|
Matthew S. Filer
|
1/24/2024
|
825
|
68,541
|
3,300
|
274,164
|
|
1/25/2023
|
1,050
|
87,234
|
4,200
|
348,936
|
|
|
Hugo E. Gonzalez
|
1/24/2024
|
2,843
|
236,196
|
11,369
|
944,537
|
|
1/25/2023
|
1,500
|
124,620
|
6,000
|
498,480
|
|
|
1/26/2022
|
1,200
|
99,696
|
4,800
|
398,784
|
(1)
Restricted share grants related to Time-Based Share awards fully vest on January 24, 2027, January 25, 2026 and January 26, 2025. Unvested restricted
share awards are subject to forfeiture under certain circumstances if the NEO’s employment with the Company is terminated before such shares vest.
(2)
Based on a market price of $83.08 per share which was the NASDAQ Stock Market closing price on December 31, 2024.
(3)
Restricted share grants in 2024 for all NEOs related to Performance-Contingent Shares at established Company performance targets will vest based on
actual EBITDA achieved as compared to target EBITDA at the conclusion of the cumulative three-year performance measurement period. Restricted share
grants in 2023 for Messrs. Nemeth, Rodino and Ellis related to Performance-Contingent Shares at stretch Company performance will vest based on actual
EBITDA achieved as compared to target EBITDA at the conclusion of the cumulative three-year performance measurement period. For Messrs. Filer and
Gonzalez, restricted share grants in 2023 related to Performance-Contingent Shares at target Company performance will vest based on actual EBITDA
achieved as compared to target EBITDA at the conclusion of the cumulative three-year performance measurement period. Unvested restricted share awards
are subject to forfeiture under certain circumstances if the NEO’s employment with the Company is terminated before the shares vest. Except for Mr.
Gonzalez, restricted share grants related to Performance-Contingent Shares at stretch (or 150% of target payout), which were approved by the Board on
January 26, 2022, were adjusted downward to 100% of target payout as of December 31, 2024 to reflect the actual expected payout at the January 28, 2025
vesting date. The related compensation expense associated with the change in payout percentage for these awards was adjusted in the Company’s financial
statements in accordance with ASC 718.
There were no options or SARs granted to the NEOs in 2022, 2023 and 2024. There were no options and SARs outstanding
as of December 31, 2024 as Messrs. Rodino and Ellis exercised their respective outstanding options and SARS as of
December 31, 2023 in 2024. See "Stock Options and Stock Appreciation Rights Exercises and Stock Vested in Fiscal 2024"
for details.
37
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Equity Compensation Plan
Information
|
Name
|
Number Of Securities To Be Issued
Upon Exercise Of Outstanding
Options
(1)
|
Weighted Average Exercise
Price Of Outstanding Options
|
Number Of Securities Remaining
For Future Issuance Under Equity
Compensation Plans
(2)
|
|
Equity Compensation Plans
Approved by Security Holders
|
28,129
|
$27.55
|
2,039,677
|
|
Equity Compensation Plans not
Approved by Security Holders
|
-
|
N/A
|
-
|
|
Total
|
28,129
|
$27.55
|
2,039,677
|
(1)
The number of securities represented is the gross amount of shares to be issued upon exercise of outstanding options as of December 31, 2024.
(2)
Represents the number of net shares available for future awards under the 2009 Omnibus Incentive Plan as of December 31, 2024, and excludes the
number of securities to be issued upon exercise of outstanding options.
38
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Stock Options And Stock
Appreciation Rights Exercises
And Stock Vested In Fiscal
2024
The table below sets forth information about the value realized by the NEOs on vesting of stock awards and the exercise of
stock options and SARS in
2024
.
|
Name
|
Stock Awards
(1)(2)
|
Option/SARs Awards
(3)(4)
|
||
|
Number Of Shares
Acquired On Vesting
|
Value Realized on Vesting
|
Number Of Shares
Acquired On Exercise
|
Value Realized On Exercise
|
|
|
Andy L. Nemeth
|
108,000
|
$6,851,120
|
-
|
$-
|
|
Jeffrey M. Rodino
|
46,286
|
2,936,182
|
113,121
|
6,291,672
|
|
Kip B. Ellis
|
38,573
|
2,446,896
|
27,000
|
1,281,060
|
|
Andrew C. Roeder
|
-
|
-
|
-
|
-
|
|
Matthew S. Filer
|
-
|
-
|
-
|
-
|
|
Hugo E. Gonzalez
|
7,425
|
471,014
|
7,313
|
429,634
|
(1)
For Messrs. Nemeth, Rodino, Ellis and Gonzalez, the table below includes the number of Time-Based Shares awarded on January 21, 2021, which vested
on January 21, 2024, using the NASDAQ Stock Market closing price of $65.49 per share multiplied by the total number of shares acquired on vesting.
|
Nemeth
|
Rodino
|
Ellis
|
Roeder
|
Filer
|
Gonzalez
|
|
|
Number of Shares
(1)
|
12,000
|
5,144
|
4,286
|
-
|
-
|
825
|
|
Value
|
$785,840
|
$336,831
|
$280,643
|
-
|
-
|
$54,026
|
(2)
For Messrs. Nemeth, Rodino, Ellis and Gonzalez, the table below includes the number of Performance-Contingent Shares awarded on January 21, 2021,
which vested at 200% of target on January 17, 2024 (the date the performance conditions were met), using the NASDAQ Stock Market closing price of
$63.18 per share multiplied by the total number of shares acquired on vesting.
|
Nemeth
|
Rodino
|
Ellis
|
Roeder
|
Filer
|
Gonzalez
|
|
|
Number of Shares
(2)
|
96,000
|
41,142
|
34,287
|
-
|
-
|
6,600
|
|
Value
|
$6,065,280
|
$2,599,351
|
$2,166,253
|
-
|
-
|
$416,988
|
(3)
The number of shares acquired on exercise in 2024 for Messrs. Rodino, Ellis and Gonzalez are related to stock options granted on May 14, 2020 which
became 100% vested on May 14, 2023. The value realized on exercise was based on the difference between the market price per share of the common
stock on the date of exercise and the option exercise price.
|
Nemeth
|
Rodino
|
Ellis
|
Roeder
|
Filer
|
Gonzalez
|
|
|
Number of Shares
(3)
|
-
|
90,000
|
27,000
|
-
|
-
|
7,313
|
|
Value
|
-
|
$5,648,600
|
$1,281,060
|
-
|
-
|
$429,634
|
(4)
The gross number of shares acquired on exercise in 2024 of SARs for Mr. Rodino was 23,121 (or 4,938 net shares) and a value realized on exercise of
$643,072. The determination of the net number of shares acquired and the related value realized on exercise was based on the difference between the
market price per share of the common stock on the date of exercise and the exercise price of the SARs and includes a reduction for the purpose of satisfying
the minimum tax withholding obligations of Mr. Rodino upon the exercise of the SARs related to the third and fourth tranches of the SARs awarded to Mr.
Rodino in 2017.
39
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Executive Retirement Plan
The following table sets forth information about the participation of the NEOs in the Executive
Retirement Plan and is set forth in the "Summary Compensation Table" under the caption
"Change in Pension Value and Non-Qualified Deferred Compensation Earnings":
Messrs. Rodino, Ellis, Roeder, Filer,
and Gonzalez did not participate in the
Executive Retirement Plan as no new
employees have been invited to
participate in the plan since January 1,
2007. In addition, there were no
contributions made to the non-qualified
deferred compensation plan in
2024
.
See "Executive Compensation
Considerations" summary descriptions
on page
31.
(1)
Represents the interest for the current fiscal year of
an annuity to be paid at retirement pursuant to the
terms of the Executive Retirement Plan Agreement.
(2)
Represents the present value of the annuity as of
December 31, 2024. The aggregate balance as of
January 1, 2024 was $471,876.
(3)
According to the provisions of the Executive
Retirement Plan, payments of the annuity for Mr.
Nemeth may commence prior to his fully eligible
retirement age of 65 years old over a ten-year
vesting period, subject to acceleration due to death
or disability.
|
Name
|
Executive
Contribution In
Last FY($)
|
Registrant
Contribution In
Last FY
|
Aggregate
Earnings In Last
FY
(1)
($)
|
Aggregate
Withdrawals/
Distributions ($)
|
Aggregate Balance
As Of Last FYE
(2)
|
|
Andy L. Nemeth
(3)
|
-
|
-
|
$72,338
|
-
|
$544,214
|
|
Jeffrey M. Rodino
|
-
|
-
|
-
|
-
|
-
|
|
Kip B. Ellis
|
-
|
-
|
-
|
-
|
-
|
|
Andrew C. Roeder
|
-
|
-
|
-
|
-
|
-
|
|
Matthew S. Filer
|
-
|
-
|
-
|
-
|
-
|
|
Hugo E. Gonzalez
|
-
|
-
|
-
|
-
|
-
|
40
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Potential Payments Upon
Termination or Upon a
Change of Control
Executive Employment Agreements
The Company has entered into Employment Agreements (the “Agreements”) with Messrs. Nemeth, Rodino,
Ellis, Roeder and Gonzalez, pursuant to which they agreed to serve as executive officers of the Company. The
Agreements contain a non-compete clause and certain other stipulations and provide for a severance package
that includes 12 months base salary. Under the Agreements, voluntary termination by the NEO or termination
by the Company for cause will not result in any obligation of the Company to make payments. Upon termination
by the Company without cause (as defined in the Agreement), each NEO would be entitled to: (i) one year of
base salary; and (ii) annual non-equity incentive compensation that the NEO would have been entitled to
receive at the end of the fiscal year. In addition, if the NEO’s employment is terminated prior to the end of the
fiscal year due to death or disability or without cause, any non-equity incentive compensation due to the NEO is
to be pro-rated as of the effective date of the termination. The base salary portion would be paid out in equal bi-
weekly payments on the regular payroll cycle, and the non-equity incentive compensation would be calculated
and paid in accordance with the terms of the applicable plan on a pro-rata basis from the date of termination.
Upon termination due to death or disability, the NEO would only receive base salary through the end of the
month in which the disability or death occurred. In addition, each of the NEOs has agreed to comply with certain
restrictive covenants, including an agreement not to compete with the Company for the two-year period
following termination of employment, all of which remain subject to certain exceptions.
We believe that the Company should provide reasonable severance benefits to our NEOs and other general
employees that are fair and commensurate with their job duties, functions, and responsibilities. We believe it is
in the best interest of the Company to obtain a release from employees whose employment is terminated as
well as a restrictive covenant agreement from certain employees in the form of an employment agreement.
Executive Equity Compensation Agreement
In addition to reasonable severance benefits outlined under the employment agreements discussed above, the Company
has entered into certain long-term equity compensation agreements with its executive officers, of which the awards
under those agreements (in the form of restricted stock grants, stock options and SARS) are eligible for accelerated
vesting under certain circumstances.
Restricted Share Awards
With respect to the Time-Based Share awards granted under the 2009 Omnibus Incentive Plan, in the event of a
termination of employment by the Company without cause, upon a change of control or termination due to death or
disability, all unvested Time-Based Share awards would become fully vested.
With respect to the Performance-Contingent Share awards granted under the 2009 Omnibus Incentive Plan, in the event
of a termination of employment by the Company without cause or a termination due to death or disability before the
performance period ending date, the number of Performance-Contingent Shares shall continue to vest subject to the
achievement of certain pre-established performance criteria for such awards with the performance period ending with the
date as stated in the applicable award agreement. In the event of a change of control, all unvested Performance-
Contingent Shares would become fully vested as of the effective date of the change of control event and based upon the
assumption that the Company would have achieved the target amount of EBITDA for the performance period.
41
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Stock Options and SARs
With respect to stock options and SARS granted under the 2009 Omnibus Incentive Plan, in the event the NEO ceases
to be an employee of the Company, no further vesting will occur from and after the date of termination except in the
event of a termination of employment by the Company without cause, in which case both stock options and SARS would
become fully vested and exercisable as to any shares that have not otherwise vested as of the effective date of
employment termination.
Based on the employment and compensation arrangements in effect as of December 31,
2024
and assuming a
hypothetical termination date of December 31,
2024
, including the price of the Company’s common stock on that date,
the table on page
42 identifie
s the benefits each NEO would receive upon (i) a termination without cause, (ii) a change of
control, or (iii) a termination due to death or disability.
Chief Financial Officer Employment Agreement (Andrew C. Roeder)
Mr. Roeder’s Employment Agreement dated as of March 5, 2024 (the “CFO Agreement”), provides that Mr. Roeder serve
as Chief Financial Officer of the Company and that his employment term will continue unless terminated by either party
in accordance with the CFO Agreement. Pursuant to the CFO Agreement, Mr. Roeder is entitled to: (i) an annual base
salary, (ii) participate in the Company’s employee benefit plans as they are generally available to the Company’s
employees, (iii) participate in the Company’s STIP, and (iv) participate in the Company’s LTIP. The CFO Agreement also
provides that Mr. Roeder is entitled to certain severance benefits in the event that his employment is terminated (a) due
to his death or disability, or (b) by the Company without cause, or (c) by himself for good reason (as such terms are
defined in the CFO Agreement).
42
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
|
Name/Benefit
|
Termination Without
Cause
|
Change Of
Control
|
Termination Due To
Death Or Disability
|
|
Andy L. Nemeth
(4)
|
|||
|
Base Salary
|
$850,000
|
$850,000
|
-
|
|
Acceleration of Long-Term Incentives
(1)
|
17,012,790
|
17,012,790
|
$17,012,790
|
|
Annual Non-Equity Incentive Bonus
(2)
|
1,884,600
|
1,884,600
|
1,884,600
|
|
Total Benefits
|
$19,747,390
|
$19,747,390
|
$18,897,390
|
|
Jeffrey M. Rodino
|
|||
|
Base Salary
|
$575,000
|
$575,000
|
-
|
|
Acceleration of Long-Term Incentives
(1)
|
7,269,833
|
7,269,833
|
$7,269,833
|
|
Annual Non-Equity Incentive Bonus
(2)
|
1,063,500
|
1,063,500
|
1,063,500
|
|
Total Benefits
|
$8,908,333
|
$8,908,333
|
$8,333,333
|
|
Kip B. Ellis
|
|||
|
Base Salary
|
$525,000
|
$525,000
|
-
|
|
Acceleration of Long-Term Incentives
(1)
|
6,275,448
|
6,275,448
|
$6,275,448
|
|
Annual Non-Equity Incentive Bonus
(2)
|
1,144,350
|
1,144,350
|
1,144,350
|
|
Total Benefits
|
$7,944,798
|
$7,944,798
|
$7,419,798
|
|
Andrew C. Roeder
|
|||
|
Base Salary
|
$500,000
|
$500,000
|
-
|
|
Acceleration of Long-Term Incentives
(1)
|
2,527,709
|
$2,527,709
|
$2,527,709
|
|
Annual Non-Equity Incentive Bonus
(2)
|
579,375
|
$579,375
|
579,375
|
|
Total Benefits
|
$3,607,084
|
$3,607,084
|
$3,107,084
|
|
Matthew S. Filer
(3)
|
-
|
-
|
-
|
|
Hugo E. Gonzalez
|
|||
|
Base Salary
|
$470,000
|
$470,000
|
-
|
|
Acceleration of Long-Term Incentives
(1)
|
2,302,313
|
$2,302,313
|
$2,302,313
|
|
Annual Non-Equity Incentive Bonus
(2)
|
921,360
|
$921,360
|
921,360
|
|
Total Benefits
|
$3,693,673
|
$3,693,673
|
$3,223,673
|
(1)
Represents the market value of both unearned Time-Based Shares and Performance-Contingent Shares that have not vested based on a market price of
$83.08 per share, which was the NASDAQ Stock Market closing price on December 31, 2024. Termination without cause or due to death or disability
includes the right for the Performance-Contingent Shares to continue to vest after termination subject to meeting certain pre-established performance criteria
for such awards. Amounts in the table assume the Company's achievement of the target performance metrics for the 2024 performance awards, the stretch
performance metric for the 2023 awards (except for Mr. Gonzalez), and the projected actual target performance metric measured as of December 31, 2024
for the 2022 awards. For Mr. Gonzalez, the amount in the table assumes the Company's achievement of the target performance metric for the 2023
performance award. Upon a change of control, the Performance-Contingent Shares fully vest as of the effective date of the change of control event.
(2)
Represents the short-term non-equity incentive award earned in 2024 and approved by the Compensation Committee, based on the achievement of
predetermined Company performance targets for 2024. See “Summary Compensation Table.”
(3)
Mr. Filer does not have an employment agreement with the Company.
(4)
Non-qualified balances are not included in the above table for Mr. Nemeth. See "Executive Retirement Plan" for additional information.
43
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
CEO Pay Ratio
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules, the Company is providing
information about the relationship of the annual total compensation of its employees to the annual total compensation of the
CEO during
2024
. The total annual compensation of our median employee based on total annual compensation (other than
our CEO) w
as $47,141.
The annual total compensation of the CEO was
$6,400,374
. Based on this information, the ratio of
the total compensation of the CEO for fiscal
2024
to the median employee’s total annual compensation is
136 to 1
.
This pay ratio is a reasonable estimate calculated in good faith, in a manner consistent with Item 402(u) of Regulation S-K,
based on the Company’s payroll and employment records and the methodology described below. The SEC rules for
identifying the “median employee” and calculating the pay ratio based on that employee’s annual total compensation allow
companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and
assumptions that reflect their compensation practices. As such, the pay ratios reported by other companies may not be
comparable to the pay ratio set forth above, as other companies may have different employment and compensation
practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
To identify the median of the annual total compensation of all employees, as well as to determine the annual total
compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates used
were as follows:
1.
The median employee was identified using active employee information as of December 31,
2024
.
2.
Fiscal
2024
earnings (gross pay) of cash compensation were used as the consistently applied compensation measure
to identify the median employee within the employee population. Cash compensation is the most prevalent measure of
pay across the organization. Using this methodology, the median employee’s compensation was $47,141 and
determined to be applicable to a full-time, hourly, United States-based employee.
3.
The total compensation of the CEO for fiscal
2024
was
$6,400,374
, which is the total of the compensation components
reflected in the Summary Compensation Table.
44
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Pay Versus Performance
Compensation Table to compensation actually paid to our Principal Executive Officer (“PEO”) and other NEOs as well as
information on our Company performance.
|
Year
|
Summary
Compensation
Table Total
for PEO
(1)
|
Compensation
Actually Paid
to PEO
(5)
|
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs
(2)
|
Average
Compensation
Actually Paid
to Non-PEO
NEOs
(5)
|
Value of Initial Fixed $100
Investment Based on:
|
Company Net
Income ($ in
millions)
|
Company
EBITDA
(4)
($ in millions)
|
|
|
Company
Total
Shareholder
Return
(3)
|
Peer Group Total
Shareholder
Return
(3)
|
|||||||
|
2024
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
2023
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
|
|
|
|
|
|
(1)
Mr. Nemeth
served as our PEO for each year.
(2)
The Company’s Non-PEO NEOs for the years ended December 31, 2024, 2023, 2022, 2021 and 2020 were as follows:
•
2024 - Messrs. Rodino, Ellis, Roeder, Filer and Gonzalez
•
2023 - Messrs. Rodino, Ellis, Filer, Jacob A. Petkovich and Joel D. Duthie
•
2022 and 2021 – Messrs. Cleveland, Rodino, Ellis and Petkovich
•
2020 - Messrs. Cleveland, Rodino, Ellis, Petkovich, John A. Forbes and Joshua A. Boone
Mr. Petkovich joined the Company as CFO in November 2020 and resigned from the Company in May 2023. Mr. Filer joined the Company as Senior Vice President
of Finance in November 2022 and served as Interim CFO from May 2023 through March 4, 2024, at which time he returned to his previous role as Senior Vice
President of Finance and was appointed Chief Accounting Officer in May 2024. Mr. Cleveland served as Executive Chairman during the period from 2020 through
2022 and served as our PEO through December 31, 2019. Equity awards granted to Mr. Cleveland while he served as PEO continued to vest during the period from
2020 through 2022. Mr. Boone resigned as CFO of the Company in June 2020. Mr. Forbes, an independent member of our Board, served as interim CFO from June
2020 until November 2020. The compensation for Mr. Forbes reflected in this table relates to the salary, bonus and equity grant Mr. Forbes received while serving
(3)
Company Total Shareholder Return (“TSR”) reflects $100 invested as of market close on December 31, 2019, the final trading day of fiscal 2019. Peer Group TSR
reflects a customized peer group of companies, which includes Brunswick Corporation, Cavco Industries, Inc., LCI Industries, Malibu Boats, Inc., Polaris, Inc., Thor
Industries, Inc., Winnebago Industries, Inc., and Wabash National Corporation. See Stock Performance Graph on page 29 of our Form 10-K for the fiscal year ended
December 31, 2024.
(4)
Company selected measure of
EBITDA
, calculat
ed as earnings before interest, taxes, depreciation and amortization, is the primary metric used in our LTIP as
discussed in the CD&A. Below is a reconciliation of net income to EBITDA for the periods shown in the table above:
|
($ in millions)
|
2020
|
2021
|
2022
|
2023
|
2024
|
||
|
Net Income
|
$97
|
$225
|
$328
|
$143
|
$138
|
||
|
+ Interest expense
|
43
|
58
|
61
|
69
|
80
|
||
|
+ Income taxes
|
33
|
69
|
107
|
48
|
40
|
||
|
+ Depreciation & amortization
|
74
|
105
|
131
|
145
|
167
|
||
|
EBITDA
|
$247
|
$457
|
$627
|
$405
|
$425
|
45
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
(5)
The following table sets forth a reconciliation from the Summary Compensation Table (“SCT”) to Compensation Actually Paid to our PEO and for the average paid
for our Non-PEO NEOs for the year ended December 31, 2024.
|
PEO
|
Average Non-PEO NEOs
|
|
|
2024
|
2024
|
|
|
SCT Total Compensation
|
$
|
$
|
|
SUBTRACT Grant Fair Value of Equity Awards Made During Year (a)
|
(
|
(
|
|
ADD Year End Fair Value of Equity Awards Made During Year (b)
|
|
|
|
ADD Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards (c)
|
|
|
|
ADD Change in Fair Value of Equity Awards Granted in Prior Years That Vested During
Year (d)
|
(
|
(
|
|
ADD Fair Value at Vesting of Equity Awards Made During Year That Also Vested During
Year (e)
|
|
|
|
SUBTRACT Fair Value at the End of the Prior Year of Equity Awards That Were Forfeited
During Year (f)
|
|
|
|
ADD Value of Dividends Paid on Equity Awards That Vested During Year Not Included in
SCT Total Compensation (g)
|
|
|
|
Total Adjustments Related to Equity Awards
|
$
|
$
|
|
Total Adjustments Related to Pension Value (h)
|
|
|
|
Total Compensation Actually Paid
|
$
|
$
|
(a)
Represents the grant date fair value of equity-based awards made during the fiscal year.
(b)
Represents the year-end fair value of equity awards that were made during the fiscal year and were unvested as of year-end.
(c)
Represents the change in fair value during the fiscal year of equity-based awards granted in prior fiscal years that were still unvested as of year-end.
(d)
Represents the change in fair value during the fiscal year of equity-based awards granted in prior fiscal years that vested during the current fiscal year.
(e)
Represents the fair value of equity awards that vested during the same year as grant.
(f)
Represents the prior year-end fair value of equity awards forfeited during the year.
(g)
Dividends accrued during vesting period on restricted equity awards are paid only on shares that vest with payment made at the time of vesting.
(h)
Mr. Nemeth is the only participant in the Executive Retirement Plan. The annual interest credit on the annuity benefit is reported using the same value in the SCT
The Company grants Performance-Contingent Shares to executive officers annually under its LTIP and typically reports the
grant date fair value of these shares at either the target award (100% payout) or at 150% of the nominal “target” award
(shown as “stretch” awards in the Grants of Plan-Based Awards Table) and accrues expense for these awards based on
the projected payout, unless performance results and projections of future performance require a change to that estimate.
Performance-Contingent Shares are earned based on the achievement of three-year cumulative Company EBITDA (after
the Compensation Committee certifies the actual EBITDA achievement) compared to target EBITDA at the conclusion of
the cumulative three-year performance measurement period. The Company generally grants Time-Based Share awards to
executive officers annually and also at time of hire for certain other officers. Annual Time-Based Share awards cliff-vest on
the third anniversary of the grant date based on continued service through such date.
46
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
KEY FINANCIAL
MEASURES
Adjusted Net Income
EBITDA
The Company considers Adjusted Net Income (net of
2024
acquisitions and non-recurring charges and credits) and
EBITDA to be the most important key financial performance
measures that link the Company’s performance for
2024
to
actual compensation paid to its PEO and non-PEO NEOs. As
discussed in the CD&A, the annual STIP uses adjusted Net
Income (net of acquisitions and non-recurring charges and
credits) as the primary financial measure. Performance-
Contingent Shares are earned based on cumulative EBITDA
achieved by the Company during the three-year measurement
period.
Analysis of Compensation Actually Paid and
Company Performance
Since a majority of total compensation provided to the PEO
and the average paid to the Non-PEO NEOs is in the form of
equity-based grants that vest over multi-year periods, the
primary driver of changes in “Compensation Actually Paid”
totals for the PEO and the average for the Non-PEO NEOs is
the fluctuations in the Company’s stock price performance and
the Company's EBITDA performance as compared to pre-
established performance goals pursuant to the Company's
long-term incentive plans.
The charts shown illustrate total Compensation Actually Paid
(“CAP”) to the PEO and the Non-PEO NEOs versus: (a) the
Company’s TSR and the TSR of the customized peer group of
companies; (b) CAP versus Net Income; and (c) CAP versus
EBITDA for each of the years ended
December 31, 2020,
2021, 2022, 2023 and 2024.
47
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Security Ownership of
Certain Beneficial Owners
and Management
|
Name and Address of
Beneficial Owner
|
Aggregate
Number
of Shares of
Common
Stock Beneficially
Owned
|
Percent of Class
|
|
BlackRock, Inc.
50 Hudson Yards
New York, NY 10001
|
5,241,299
(1)
|
15.8%
(1)
|
|
FMR LLC
245 Summer Street
Boston, MA 02210
|
3,706,674
(2)
|
11%
(2)
|
|
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
|
2,405,541
(3)
|
7.3%
(3)
|
|
Dimensional Fund Advisors LP
6300 Bee Cave Road
Building One
Austin, TX 78746
|
2,164,827
(4)
|
6.5%
(4)
|
|
Wellington Management Group
LLP 280 Congress Street
Boston, MA 02210
|
2,027,708
(5)
|
6%
(5)
|
|
Directors:
|
||
|
M. Scott Welch
(6)
|
169,008
|
*
|
|
Todd M. Cleveland
(7)
|
168,917
|
*
|
|
Joseph M. Cerulli
|
73,978
|
*
|
|
John A. Forbes
|
53,891
|
*
|
|
Pamela R. Klyn
|
18,519
|
*
|
|
Denis G. Suggs
|
17,019
|
*
|
|
Michael A. Kitson
|
14,697
|
*
|
|
Derrick B. Mayes
|
10,549
|
*
|
|
Named Executive Officers
(8)
|
||
|
Andy L. Nemeth
|
355,641
|
1.1%
|
|
Jeffrey M. Rodino
|
229,181
|
*
|
|
Kip B. Ellis
|
147,744
|
*
|
|
Hugo E. Gonzalez
|
43,629
|
*
|
|
Andrew C. Roeder
|
35,805
|
*
|
|
Matthew S. Filer
|
14,808
|
*
|
|
All Directors And Executive
Officers As A Group (18
Persons)
(9)
* Less than 1%
|
1,466,526
|
4.4%
|
This table sets forth information concerning shareholders
known to us as having beneficial ownership of more than
five percent of our outstanding common stock and
information with respect to the stock ownership of all of our
directors, NEOs, and all of our directors and executive
officers as a group as of
March 21, 2025
(the "record
date"). The address of each director and NEO listed below
is 107 W. Franklin Street, Elkhart, Indiana 46516, except
as otherwise provided.
(1)
Information based on the Schedule 13G/A filed with the SEC by
BlackRock, Inc. on January 22, 2024. BlackRock reported that it has
sole voting power over 5,136,015 shares and sole dispositive power
over 5,241,299 shares. Aggregate number of shares beneficially owned
have been adjusted to reflect the Company's three-for-two stock split,
which was paid on December 13, 2024.
(2)
Information based on the Schedule 13G/A filed with the SEC by FMR
LLC on March 7, 2025. FMR reported that it has sole voting power over
3,700,407 shares and sole dispositive power over 3,706,674 shares.
(3)
Information based on the Schedule 13G/A filed with the SEC by The
Vanguard Group on February 13, 2024. Vanguard reported that it has
shared voting power over 40,780 shares, sole dispositive power over
2,330,852 shares, and shared dispositive power over 74,690 shares.
Aggregate number of shares beneficially owned have been adjusted to
reflect the Company's three-for-two stock split, which was paid on
December 13, 2024.
(4)
Information based on the Schedule 13G/A filed with the SEC by
Dimensional Fund Advisors LP on February 9, 2024. Dimensional
reported that it has sole voting power over 2,129,048 shares and sole
dispositive power over 2,164,827 shares. Aggregate number of shares
beneficially owned have been adjusted to reflect the Company's three-
for-two stock split, which was paid on December 13, 2024.
(5)
Information based on the Schedule 13G/A filed with the SEC by
Wellington Management Group LLP on February 10, 2025. Wellington
reported that it has shared voting power over 1,685,260 shares and
shared dispositive power over 2,027,708 shares.
(6)
Includes136,000 shares held directly by Mr. Welc
h’s spouse and 2,961
shares held in entities controlled by Mr. Welch’s adult children and in
which Mr. Welch has an equity interest.
(7)
Mr. Cleveland’s common stock holdings include 51,356 shares held in
several limited liability corporations.
(8)
Except as otherwise indicated, the NEOs in the table have sole voting
and investment power with respect to all shares of our Common Stock
shown as beneficially owned by them and such shares include stock
options, which are currently exercisable within sixty (60) days of the
record date.
(9)
Includes a total of 5,850 stock options which are exercisable within 60
days of the record date.
48
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Related Party
Transactions
In 2024, the Company entered into transactions with
companies affiliated with two of our Board members by
purchasing: (a) approximately $1.0 million of corrugated
packaging materials from Welch Packaging Group
(“Welch”), an independently owned company established by
M. Scott Welch, who currently serves as the President and
CEO of Welch; and (b) approximately $0.4 million of foam
materials from Dimensional Foam Products, d/b/a Century
Foam, an independent company owned by Todd M.
Cleveland.
Review, Approval or Ratification of
Transactions with Related Persons
We have no formal policy related to the approval of related
party transactions. However, the Company undergoes
specific procedures when evaluating related party
transactions. A related party transaction is generally
reported to the Chief Executive Officer or Chief Financial
Officer, who assists in gathering the relevant information
about the transaction and presents the information to the
Audit Committee. The Audit Committee then approves,
ratifies or rejects the transaction. The related party
transactions with companies affiliated with two of the
Company’s Board members described above were
approved by the Board consistent with these procedures.
Proposals of
Shareholders
for the
2026
Annual Meeting
Proposals Included in the Proxy Statement
Shareholder proposals for inclusion in proxy materials for
the next Annual Meeting should be addressed to the Office
of the Secretary, 107 W. Franklin Street, Elkhart, Indiana
46516, and must be received no later than
December 2,
2025.
In addition to satisfying all of the requirements under our
Bylaws, to comply with the SEC’s new universal proxy rules
for our
2026
Annual Meeting, shareholders who intend to
solicit proxies in support of director nominees other than the
Company's nominees must provide notice that sets forth all
of the information required by Rule 14a-19 under the
Exchange Act no later than
March 16,
2026
, provided that
the date of the meeting has not changed by more than 30
calendar days. If such meeting date is changed by more
than 30 days, then notice must be provided by the later of
60 calendar days prior to the date of the Annual Meeting or
the 10th calendar day following the day on which public
announcement of the date of the Annual Meeting is first
issued. The deadline for the Company to
receive notice of a
shareholder’s nomination of a director nominee is a
different date, as reflected below.
Proposals Not Included
in the Proxy Statement
Our Bylaws provide that any notice of business to be
brought by a shareholder at the
2026
Annual Meeting of
Shareholders (but not included in the proxy statement) must
be made in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Secretary of the
Corporation not less than 20 days nor more than 50 days
prior to the meeting. If the
2026
Annual Meeting of
Shareholders was held on
May 15,
2026
, this means that
such notice, together with certain prescribed information,
must be delivered on or after
March 26,
2026
and not later
than April 25,
2026
. Likewise, the Articles of Incorporation
and Bylaws require that share
holder nominations to the
Board for the election of directors to occur at the
2026
Annual Meeting of Shareholders be delivered to the
Secretary, together with certain prescribed information, in
accordance with the procedures for bringing business
before an annual meeting at which directors are to be
elected.
49
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Householding of
Annual Meeting
Materials
Some banks, brokers and other nominee record holders
may be participating in the practice of “householding” proxy
statements and annual reports. This means that only one
copy of this Notice of Annual Meeting and Proxy Statement
and the Annual Report for the year ended December 31,
2024
may have been sent to multiple shareholders in your
household. If you would prefer to receive separate copies of
a proxy statement or annual report either now or in the
future, please contact your bank, broker or other nominee.
Upon written or oral request to the Office of the Secretary,
107 W. Franklin Street, Elkhart, Indiana 46516, we will
provide a separate copy of the Annual Report for the year
ended December 31,
2024
or Notice of Annual Meeting and
Proxy Statement.
Other Matters
A copy of our Annual Report on Form 10-K for the year
ended December 31,
2024
, excluding certain of the
exhibits thereto, may be obtained without charge by
writing to Joel D. Duthie – Executive Vice President,
Chief Legal Officer and Secretary, Patrick Industries, Inc.,
107 W. Franklin Street, Elkhart, Indiana 46516.
The Board knows of no other proposals that may be
By Order of the Board of Directors
Joel D. Duthie
Executive Vice President, Chief Legal Officer
and Secretary
April 1, 2025
presented for action at the meeting. However, if any other
proposal properly comes before the meeting, the persons
named in the proxy form enclosed will vote in accordance
with their judgment upon such matter. Shareholders are
urged to execute and return promptly the enclosed form
of proxy in the envelope provided.
50
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
Voting Q&A
|
Q.
Who may vote at
the annual
meeting?
|
A.
Our Board has established the record date for the 2025 Annual Meeting of Shareholders (the
"Annual Meeting" or the "meeting") as the close of business on
March 21, 2025
. This Proxy
Statement and the accompanying materials are being sent to holders of our common stock as of
the record date at the direction of the Board.
|
|
|
Q.
How many shares
must be present
to conduct
business at the
meeting?
|
A.
Each shareholder is entitled to one vote for each share of our common stock held as of the record
date. For purposes of the meeting, a quorum means a majority of the outstanding shares entitled
to vote “present” in person or by proxy at the meeting. If a quorum is not present at the time the
Annual Meeting is convened, the Company may adjourn or postpone the Annual Meeting until
such time that a quorum is present. Shares that are represented at the Annual Meeting but abstain
from voting on any or all matters will be counted as shares present and entitled to vote in
determining the presence of a quorum.
Shareholders participating virtually in the meeting are considered to be attending the meeting “in
person.” Abstentions and withheld votes are counted as shares present at the meeting for
purposes of determining a quorum. As of the close of business on the record date, there were
33,555,159 outstanding shares of common stock entitled to one vote each. In determining whether
a quorum exists at the meeting, all shares for which proxies were submitted will be counted.
Proxies properly executed and received by us prior to the meeting and not revoked will be voted
as directed therein on all matters presented at the meeting.
|
|
|
Q.
What proposals
will be voted on at
the Annual
Meeting?
|
A.
At the Annual Meeting, shareholders will act upon the following matters:
1.
The election of the nine members of our Board of Directors named in the Proxy Statement;
2.
The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent
registered public accounting firm for fiscal year 2025;
3.
The approval, by an advisory and non-binding vote, of the compensation paid by the Company
to its Named Executive Officers in fiscal year 2024;
4.
The amendment of the Articles of Incorporation to increase the number of authorized shares of
common stock; and
5.
The approval, by an advisory and non-binding vote, of the frequency of shareholder votes on
executive compensation.
|
|
|
Q.
How does the
Board
recommend I
vote?
|
A.
Our Board unanimously recommends that you vote "FOR" all nominees for proposal 1, “FOR”
proposals 2, 3 and 4, and "One Year" for Proposal 5. With respect to Proposal 1 (Election of
Directors), a shareholder may (i) vote for the election of each named director nominee, or (ii)
withhold authority to vote for any named director nominee. With respect to Proposal 2 (Ratification
of Independent Registered Public Accounting Firm), Proposal 3 (Advisory Vote on Executive
Compensation) and Proposal 4 (Increase in Authorized Shares of Common Stock), a shareholder
may vote for, against or abstain. With respect to Proposal 5, a shareholder may vote for a
frequency of one, two or three years or abstain. Please note that brokers may not vote your
shares on Proposals 1, 3, 4 and 5 in the absence of your specific instructions as to how to vote.
Please vote either online, by telephone or by returning your Proxy Card so your vote can be
counted.
Under Proposal 1, the directors are elected by a plurality of the votes cast by shares present in
person or by proxy at the Annual Meeting and entitled to vote. Therefore, broker non-votes and
abstentions will have no effect on Proposal 1, except to the extent that they will count as votes not
cast.
|
|
|
Proposals 2, 3 and 4 require the affirmative vote of a majority of the votes cast, assuming a
quorum is present. The frequency vote option that receives the highest number of votes cast will
prevail for Proposal 5. Broker non-votes and abstentions will have no effect on these proposals.
|
||
|
Q.
What happens if
additional matters
are presented at
the Annual
Meeting?
|
A.
Other than the items of business described in this Proxy Statement, we are not aware of any other
business to be acted upon at the Annual Meeting. If, however, any other matter should properly
come before the Annual Meeting, the persons named in the proxy form enclosed will vote in
accordance with their judgment upon such matter.
|
|
51
|
Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
|
|
Q.
How do I vote if
my shares are
held in “street
name”?
|
A.
If a shareholder’s shares are held by a broker or another nominee (the “broker”) on the
shareholder’s behalf (that is, in “street name”) and the shareholder does not instruct
the broker as to how to vote the shareholder’s shares, the broker may vote the shares
in its discretion on matters designated as routine. However, a broker cannot vote
shares held in street name on matters designated as non-routine unless the broker
receives voting instructions from the beneficial owner. If a shareholder’s shares are
held in street name and the shareholder does not provide voting instructions to the
broker, the broker will have discretion to vote those shares only on Proposal 2 because
this proposal is considered a routine matter. “Broker non-votes” occur when a
brokerage firm receives a proxy for which no voting instruction has been received from
the beneficial owner and the broker does not have discretionary authority to vote on the
proposal. Broker non-votes and abstentions will be included for quorum determination
purposes at our Annual Meeting but will not be counted as votes cast on any non-
routine matter presented.
|
|
|
Q.
How can I attend
the Annual
Meeting?
|
A.
The Annual Meeting will be a completely virtual meeting of shareholders, which will be
conducted exclusively by webcast. You are entitled to participate in the Annual Meeting
only if you were a shareholder of the Company as of the close of business on the
record date, or if you hold a valid proxy for the Annual Meeting. No physical meeting
will be held.
You will be able to attend the Annual Meeting online and submit your questions during
the meeting by visiting meetnow.global/MY9UDQU. You also will be able to vote your
shares online by attending the Annual Meeting by webcast.
To participate in the Annual Meeting, you will need to review the information included
on your Notice, on your Proxy Card or on the instructions that accompanied your proxy
materials.
If you hold your shares through an intermediary, such as a bank or broker, you must
register to attend the Annual Meeting in advance using the instructions below.
The online meeting will begin promptly at 10:00 A.M. ET. We encourage you to access
the meeting prior to the start time leaving ample time for the check in. Please follow the
registration instructions as outlined in this Proxy Statement.
|
|
|
Q.
How do I register
to attend the
Annual Meeting
virtually on the
Internet?
|
A.
If you are a registered shareholder (i.e., you hold your shares through our transfer
agent, Computershare), you do not need to register to virtually attend the Annual
Meeting. Please follow the instructions on the Notice or Proxy Card that you received.
If you hold your shares through an intermediary, such as a bank, broker, fiduciary, or
nominee, you must register in advance to virtually attend the Annual Meeting. To
register to virtually attend the Annual Meeting, you must submit proof of your proxy
power (legal proxy) reflecting your Patrick Industries, Inc. holdings along with your
name and email address to Computershare. Requests for registration must be labeled
as “Legal Proxy” and be received no later than 5:00 P.M. ET on May
12, 2025.
You will receive a confirmation of y
our registration by email after we receive your
registration materials. Requests for registration should be directed to the Company as
follows:
By email:
Forward the email from your broker, or attach an image of your legal proxy, to
legalproxy@computershare.com
By mail:
Computershare
Patrick Industries, Inc. Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
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52
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Notice of 2025 Annual Meeting of Shareholders & Proxy Statement
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Q.
What if I have
trouble accessing
the Annual
Meeting virtually?
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A.
The virtual meeting platform is fully supported across MS Edge, Firefox, Chrome and
Safari browsers and devices (desktops, laptops, tablets and cell phones) running the
most up-to-date version of applicable software and plugins.
Please note that Internet
Explorer is not a supported browser.
Participants should ensure that they have a
strong Wi-Fi connection wherever they intend to participate in the meeting. We
encourage you to access the meeting prior to the start time. A link on the meeting page
will provide further assistance should you need it or you may c
all 1-888-724-2416.
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Q.
Will there be a
question and
answer session?
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A.
As part of the virtual Annual Meeting, we will hold a live Q&A session, during which we
intend to answer as many questions as time permits. Questions must comply with the
Annual Meeting procedures and be pertinent to the Company, our shareholders and
the Annual Meeting matters. Following the Annual Meeting, we intend to post answers
to any questions not answered during the meeting on our website under “Investors -
Company Info/Proxy Statements.”
If you wish to submit a question in advance of the virtual Annual Meeting:
Prior to
the virtual Annual Meeting, shareholders may submit questions, in writing, by following
the instructions on the virtual Annual Meeting website (which will be accessible
beginning on or around April 3, 2025). To submit a question in advance of the Annual
Meeting, beneficial owners must register in advance of the Meeting. See “How do I
register to attend the Annual Meeting virtually on the Internet?” above.
If you wish to ask a question during the virtual Annual Meeting:
Log in to the virtual
Annual Meeting website and enter the control number included on your Notice, proxy
card or voting instruction form. Questions and answers may be grouped by topic and
substantially similar questions may be grouped and answered once.
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Patrick Industries, Inc.
Corporate Office
107 W. Franklin Street
Elkhart, IN 46516
(800) 331-2151 / (574) 294-7511
www.patrickind.com
TABLE OF CONTENTS
2024 HIGHLIGHTSBusiness Financial HighlightsExecutive Compensation HighlightsCorporate Governance HighlightsPROPOSAL 1:Election of DirectorsNominees for Election2024 Non-Employee Director CompensationBoard CommitteesPROPOSAL 2:Ratification of the Appointment of Independent Registered Public Accounting FirmIndependent Public AccountantsAudit Committee ReportPROPOSAL 3:Advisory Vote to Approve the Compensation of Our Named Executive OfficersPROPOSAL 4:Approval of an Increase in the Authorized Amount of Common StockPROPOSAL 5:Advisory Vote on Frequency of Vote on Executive CompensationEXECUTIVE COMPENSATIONNamed Executive OfficersCompensation Discussion and AnalysisFiscal Year 2024 Executive CompensationCompensation Committee ReportSummary Compensation TableGrants of Plan-Based Awards During Fiscal Year 2024Outstanding Equity Awards as of December 31, 2024Equity Compensation Plan InformationStock Options and Stock Appreciation Rights Exercises and Stock Vested in Fiscal 2024Executive Retirement PlanPotential Payments Upon Termination or Upon a Change of ControlCEO Pay RatioPay Versus PerformanceSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTRELATED PARTY TRANSACTIONSPROPOSALS OF SHAREHOLDERS FOR THE 2026 ANNUAL MEETINGHOUSEHOLDING OF ANNUAL MEETING MATERIALSOTHER MATTERSVOTING Q&A