AIMC Altra Industrial Motion Corporation

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Executive Compensation

On February 10, 2020, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Altra Industrial Motion Corp., a Delaware corporation (the “Company”), approved the 2020 compensation for the Company’s named executive officers (as identified in the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 22, 2019).  The Compensation Committee based its determinations of the 2020 compensation, in part, on a 2018 report by the Company’s compensation consultant, Frederic W. Cook & Co., which indicated that (i) executive officer base salaries were below median market levels and (ii) total target direct compensation (the sum of base salary, target bonus and the annualized grant date present value of long-term incentive grants) for the Company’s executive officers generally fell below the 25^th percentile of peer group data.  The Compensation Committee’s determination of the 2020 salaries, target bonus and long-term incentive grants for the Company’s named executive officers remains consistent with the Compensation Committee’s philosophy to bring and maintain the compensation for the Company’s named executive officers in line with median market levels.  

For the year 2020, the named executive officers will receive base salaries as set forth below.  

On February 10, 2020, the Compensation Committee issued grants of restricted stock units, stock options, and target performance shares to the named executive officers under the Company’s 2014 Omnibus Incentive Plan as set forth below.  

The restricted stock awards and stock option awards will vest in equal installments on August 15, 2020, August 15, 2021, August 15, 2022 and August 15, 2023.  The stock option awards expire on the tenth anniversary of the grant date.

The performance objective for the performance shares measures the Company’s total shareholder return (“TSR”) against the TSR for a peer group of companies over a measurement period of three years beginning on January 1, 2020 and ending on December 31, 2022.  Award payouts for the performance shares are based on the percentile rank of the Company’s TSR compared to the TSR of peer group companies over the performance period.  Achievement of a relative TSR percentile rank at the 50th percentile results in an earned performance share award at 100% of target.   The percentage of the award earned at the end of the performance cycle based on the performance target can range between 0%, for achievement of a relative TSR percentile rank below the 25th percentile, and 150%, for achievement of a relative TSR percentile rank at or above the 75th percentile.  

On February 10, 2020, the Compensation Committee of the Company also approved the 2020 target bonus percentage amounts for the named executive officers of the Company pursuant to the Company's Management Incentive Compensation Program.  The Compensation Committee established target bonus percentages for each of Carl R. Christenson, Christian Storch, Glenn E. Deegan, Craig Schuele and Todd Patriacca such that those executives may be entitled to receive a cash bonus equal to 110%, 70%, 60%, 50% and 50% of their 2020 base salary, respectively, subject to upward or downward adjustment by the Compensation Committee based on their respective individual and the Company’s performance in 2020.  The Company's performance is based on achievement of certain targeted amounts of adjusted EBTIDA, working capital management, core growth, and earnings per share.