Compensation Discussion and Analysis
Our Neo Compensation For Fiscal Year 2018
Base
Salary
Base salaries are part of the compensation package paid to our executives and are determined according to various factors, including benchmarking,
experience, talent, contribution, industry standards, expectations, and performance.
On an annual basis, all employees base salaries are reviewed for
possible adjustments. Adjustments, though, are not automatic. Instead, they are determined in conjunction with available benchmarking data and/or merit-based factors, driven either by exceptional performance or promotion that often is based on
experience with our Company. For our executives, the Compensation and Development Committee considers the market practices of our peer group as a guide for recognized ranges of compensation.
For Fiscal Year 2018, no adjustment to base salaries were made.
Variable
Incentive Compensation
The variable, performance-based elements comprise the vast majority of our NEOs compensation. The elements, our MIP and LTI,
are determined based on our NBT. For Fiscal Year 2018, our NEOs compensation was approximately 89% incentive-based pay. Our philosophy promotes heavy reliance on variable performance-based pay. For Fiscal Year 2018, performance metrics were
changed to increase the LTI and decrease the MIP with no net increase in total compensation to better align compensation with shareholder interest.
CASH INCENTIVE AWARDS
Cash incentive compensation consists of our MIP. We do not adjust or otherwise manipulate earnings in any way.
Instead, we report and pay on GAAP earnings. The financial metrics for the performance-based cash incentive compensation for our NEOs are determined prior to our Fiscal Year or within the first portion thereof. The amount of cash incentive
compensation for our NEOs is generally calculated and paid on a quarterly basis.
In Fiscal Year 2018, we lowered our percentage of NBT paid to our NEOs and
increased the amount of compensation paid under our LTI, seeking to keep total compensation equal. The result was a decrease in cash compensation offset by an approximately equal amount of equity compensation.
For Fiscal Year 2018, the incentive formulas for our MIP and cash payouts for our NEOs were as follows:
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Name
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Performance Metric
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Award
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Peter B. Orthwein
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0.25% of Company
Pre-Tax
Profit
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$
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1,582,573
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Robert W. Martin
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1.50% of Company
Pre-Tax
Profit
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$
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9,495,435
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Colleen Zuhl
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0.21% of Company
Pre-Tax
Profit
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$
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1,329,361
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Todd Woelfer
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0.17% of Company
Pre-Tax
Profit
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$
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1,076,149
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Kenneth D. Julian
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0.10% of Company
Pre-Tax
Profit
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$
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633,065
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The receipt of the cash incentive compensation is contingent upon the executive being employed with the Company or an operating
subsidiary at the time of payment; certification by our Compensation and Development Committee that the amount proposed to be paid under the Plan is consistent with
pre-determined
formulas; and that there is
no cause to consider payment of a lesser amount.
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