- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
April 12 2011 - 1:10PM
Edgar (US Regulatory)
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
þ
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))
o
Definitive Proxy Statement
þ
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12
Harsco Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
|
|
No fee required.
|
|
o
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
|
|
(1)
|
|
Title of each class of securities to which transaction applies:
|
|
|
|
|
|
|
|
(2)
|
|
Aggregate number of securities to which transaction applies:
|
|
|
|
|
|
|
|
(3)
|
|
Per unit or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
|
|
|
|
|
|
|
|
(4)
|
|
Proposed maximum aggregate value of transaction:
|
|
|
|
|
|
|
|
(5)
|
|
Total fee paid:
|
|
|
|
|
|
o
|
|
Fee paid previously with preliminary materials.
|
|
o
|
|
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
|
|
(1)
|
|
Amount Previously Paid:
|
|
|
|
|
|
|
|
(2)
|
|
Form, Schedule or Registration Statement No.:
|
|
|
|
|
|
|
|
(3)
|
|
Filing Party:
|
|
|
|
|
|
|
|
(4)
|
|
Date Filed:
|
|
|
|
|
|
Exhibit 99.1
WE HELP BUILD THE WORLD
Camp Hill, PA ? April 12, 2011
Named Executive Officer Compensation
Advisory Vote
|
Explanatory Note
The following presentation was prepared for use by those employees of
the Registrant authorized to communicate with the media and
stockholders of the Registrant pursuant to its internal policies. The
information below supplements information contained in the
"Compensation Discussion and Analysis" portion of the Registrant's
definitive Proxy Statement for its 2011 Annual Meeting. This document
may be deemed "soliciting materials" within the meaning of the rules and
regulations of the Securities and Exchange Commission promulgated
under the Securities Exchange Act of 1934, as amended.
|
The Purpose of This Communication
Harsco Corporation would like to bring to its stockholders' attention a significant disagreement
between the Company and Institutional Shareholder Services, or ISS, with respect to ISS's proxy
analysis and vote recommendation dated April 5, 2011 (the "Analysis"), regarding a proposal to
be voted on at the Company's 2011 Annual Meeting of Stockholders on April 26, 2011
In its Analysis, ISS recommends a vote "against" the Company's Proposal 3 (Named Executive
Officer Compensation Advisory Vote, or Say-on-Pay proposal), asserting a disconnect between
Company performance and the compensation of the Company's CEO
The Company strongly disagrees with ISS's Analysis, as ISS recomputed 2010 CEO
compensation to include estimated values of the long-term incentives for two performance
cycles beginning in 2010 (and ending in 2011 and 2012, respectively), and compared these
estimated values to the payout value of a performance cycle that began in 2006 and ended in
2008
The more accurate comparison is of the actual payout to the CEO for the LTIP cycles ending
December 31, 2010 and 2009, which in both cases was zero
ISS cites other reasons for its "against" recommendation, which we believe are also flawed.
Actual data shows that our compensation programs and philosophy are based on pay-for-
performance
For the reasons set forth herein, we believe ISS's recommendation is based on flawed and
inaccurate analysis and we urge you to vote "FOR" the advisory vote on named
executive officer compensation
|
Pay-for-Performance: Base Salary and
Annual Incentive Bonus
Base Salary
Our Compensation Committee has focused on pay-for-performance by delaying salary increases
for top executives, including the CEO, for all of 2010 and at least the first half of 2011 until results
improve
Annual Incentive Program (AIP)
Our AIP is based on Economic Value Added (EVA(r)) targets and achievement of less than 100% of the
pre-established EVA targets in a calendar year results in a limited payout or no payout of annual bonuses
for that calendar year
The table below shows actual EVA performance since 2007 based on an overall Company basis. While
performance has lagged in fiscal years 2009 and 2010, so have our bonus payouts for officers such as our
CEO whose payouts are based on overall Company EVA:
Calendar Year EVA Performance Bonus Payout for Corporate-level Officers
2007 193% 193% of Target
2008 19% 19% of Target
2009 0% 0% of Target
2010 15% 15% of Target
2011 To be determined To be determined
|
Pay-for-Performance: LTIP
Our LTIP targets are also based on EVA, are pre-established and are the sum of annual EVA
targets for the three years covered by the EVA performance cycle
The three-year cycle of our standard LTIP awards closely aligns pay with performance, as
calendar years with poor EVA performance reduce potential payout
Example: 2007-2008-2009 cycle (payable January 2010)
Poor overall Corporate EVA performance in calendar years 2008 and 2009 led to zero
payout, even when combined with exceptional EVA performance in 2007
Example: 2008-2009-2010 cycle (payable January 2011)
Poor overall Corporate EVA performance in calendar years 2008, 2009 and 2010 led to
zero payout
Our current three-year cycles are shown below:
Three-Year Cycle Duration of Cycle & Vesting Metric(s) Actual Award Date (if earned) Actual Payout
2009-2011 Three year cycle with 100% vesting at the end 100% EVA Performance Based 2012 Likely 0%
2010-2012 Three year cycle with 100% vesting at the end 50% EVA Performance50% Time-Based 2013 To be determined
|
2005
Paid
Jan '08
LTIP Performance Years
Versus Actual Payout
2006
2007
2006
2007
2008
2007
2008
2009
2008
2009
2010
2009
2010
2011
2010
2011
2010
2011
2012
Paid
Jan '09
Paid
Jan '10
Paid
Jan '11
To Be Paid
Jan '13
To Be Paid
Jan '12
To Be Paid
Jan '12
Actual
Payout
100%
0%
100%
0%
Likely 0%
To be
determined
To be
determined
|
Retention: The Special Two-Year LTIP Grant
The EVA performance targets for a special 2010-2011 LTIP award were
established based on advice of Stern Stewart, one of our compensation
consultants
The Compensation Committee and the Board granted this award due to their
concerns with regard to retention of key executives and senior level employees
The Board determined that, without the two-year program, we would be at a
competitive employment disadvantage compared to other companies, since at
the time of the two-year grant (1) no equity compensation was paid in
2010, (2)
no equity compensation was likely to be paid in 2011 (and none was actually
paid) and (3) it was likely that no equity compensation would be paid for the
2009-2011 three year cycle
This LTIP award is 100% performance-based (EVA), represents less shares
than would be awarded under a typical three-year plan, and payout will only
occur in 2012 if the EVA performance targets for the two-year period are
achieved
Two-Year Cycle Duration of Cycle & Vesting Metric(s) Actual Award Date (if earned)
2010-2011 2-year special one-time grant with 100% vesting at the end 100% EVA Performance 2012
|
Other Proxy Advisory Services
Recommend a "FOR" vote on NEO Compensation
Advisory Firm Recommendation on Proposal 3 Comments
Glass Lewis Yes Noted that the Company aligned executive compensation with performance during 2010
Egan-Jones Yes Notes strong alignment between our pay-for-performance culture and the long-term interests of our stockholders and the need to attract and retain experienced, highly qualified executives
ISS No A flawed analysis led to a negative recommendation by ISS on Proposal 3
|
Conclusion: The ISS Analysis of
Pay-for-Performance is Flawed
We believe the ISS Analysis is flawed because, for 2010, it attributes an
estimated value to awards requiring future performance and then compares
these values to a 2009 number reflecting the payout for 2006-2008 performance
ISS also questions the fact that, beginning in 2010, a portion of our LTIP is
time-based. This change was made to our program in 2010 and moved our
LTIP from 100% performance-based to 50% performance-based and 50% time-
based. This was done after significant review by the Committee and is based
on the need to balance the performance requirement with the need to have
awards strongly promoting retention in our long term compensation program.
We believe that this is a market practice
ISS also criticizes our failure to disclose future performance targets. We do
not disclose future performance targets for competitive harm reasons, but we
do disclose actual EVA results for past years
|
Clarification: Our Compensation Committee
Cannot Exercise Positive Discretion
ISS insinuates that final LTIP payout is determined completely at the
discretion of the Compensation Committee
This is incorrect
Payout is based on performance; however, the Compensation
Committee has retained negative discretion (in other words, the
Committee can lower any payout that may be based on performance if
it feels that the individual's performance does not warrant the payout
that is calculated based on the pre-established performance targets,
but it cannot make payouts in the absence of performance)
|
We Urge You to Vote "FOR" The Advisory Vote on
Named Executive Officer Compensation
ISS's Analysis is Flawed: It is clear that our CEO's compensation over
the past several years has been closely aligned with performance.
The levels of our CEO's compensation opportunities are 33% below ISS's own
estimate of the median peer group CEO compensation
Our Compensation Committee is actively involved in managing pay-
for-performance and has restricted compensation while supporting
the steps management has taken to improve the performance of the
Company
Harsco has taken bold steps to improve its performance:
New operational leadership has been put in place in all of our Divisions
The Company has undertaken significant restructuring programs in both our
Infrastructure and Metals divisions over the past 18 months
Retaining our key executives is key to our executing upon our plans
to improve our performance
|
Harsco (NYSE:HSC)
Historical Stock Chart
From May 2024 to Jun 2024
Harsco (NYSE:HSC)
Historical Stock Chart
From Jun 2023 to Jun 2024