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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ý
Filed by a Party other than the
Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
BWX TECHNOLOGIES, INC.
(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):
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No fee required. |
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Fee paid previously with preliminary materials. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11. |
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800 Main Street, 4th Floor
Lynchburg, Virginia 24504
March 15, 2023
Dear Stockholder:
You are cordially invited to attend the 2023 Annual Meeting of
Stockholders of BWX Technologies, Inc. (the "Annual Meeting"),
which will be held on Wednesday, May 3, 2023 at 9:30 a.m. Eastern
Time. The Annual Meeting will be held in a virtual format through a
live webcast available at
www.virtualshareholdermeeting.com/BWXT2023.
Additional information on participating in the Annual Meeting is
available under General Information in the 2023 Proxy Statement.
The Notice of Annual Meeting and Proxy Statement following this
letter describe the matters to be acted on at the
meeting.
As a demonstration of our commitment to transparency and good
corporate governance practices, we have continued to engage
directly with our stockholders over the past year to discuss
matters of interest. We value the feedback we received from
our stockholders in recent years, and it has informed our decisions
on environmental, social and governance matters, among other
things.
We are utilizing the Securities and Exchange Commission’s Notice
and Access proxy rule, which allows us to furnish proxy materials
to you via the Internet as an alternative to the traditional
approach of mailing a printed set to each stockholder. In
accordance with these rules, we have sent a Notice of Internet
Availability of Proxy Materials (the "Notice") to all stockholders
who have not previously elected to receive a printed set of proxy
materials. The Notice contains instructions on how to access our
2023 Proxy Statement and 2022 Annual Report, as well as how to vote
either online, by telephone or during the Annual
Meeting.
It is very important that your shares are represented and voted at
the Annual Meeting. Please vote your shares by Internet or
telephone, or, if you received a printed set of materials by mail,
by returning the accompanying proxy card, as soon as possible to
ensure that your shares are voted at the meeting. Further
instructions on how to vote your shares can be found in our Proxy
Statement.
Thank you for your support of our company.
Sincerely yours,
Rex D. Geveden
President and Chief Executive Officer
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YOUR VOTE IS IMPORTANT.
Whether or not you plan to attend the Annual Meeting, please take a
few moments now to vote your shares.
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Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting of Stockholders To Be Held on May 3,
2023. |
The proxy statement and annual report are available on the Internet
at www.proxyvote.com.
The following information applicable to the Annual Meeting may be
found in the proxy statement and the Notice or proxy card, as
applicable:
•the
date and time of the meeting;
•a
list of the matters intended to be acted on and our recommendations
regarding those matters;
•any
control/identification numbers that you need to access your proxy
card and submit your proxy; and
•information
about participating in, and voting during, the
meeting.
BWX TECHNOLOGIES, INC.
800 Main Street, 4th Floor
Lynchburg, Virginia 24504
____________________________________________________
Notice of 2023 Annual Meeting of Stockholders
____________________________________________________
The 2023 Annual Meeting of Stockholders of BWX Technologies, Inc.
(the "Annual Meeting"), will be held via a live webcast at
www.virtualshareholdermeeting.com/BWXT2023
on Wednesday, May 3, 2023, at 9:30 a.m. Eastern Time, in order
to:
(1)elect
the nine director nominees named in the Proxy Statement as
directors to hold office until the 2024 Annual Meeting of
Stockholders and until their successors are duly elected and
qualified;
(2)hold
an advisory vote on the compensation of our named
executive officers;
(3)hold
an advisory vote on the frequency of the advisory vote on the
compensation of our named executive officers;
(4)ratify
the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm for the year ending
December 31, 2023; and
(5)transact
such other business as may properly come before the Annual Meeting
or any adjournment thereof.
If you were a stockholder of record as of the close of business on
March 6, 2023, you are entitled to vote at the Annual Meeting
and at any adjournment thereof.
Instead of mailing a printed copy of our proxy materials, including
our 2022 Annual Report, to each stockholder of record, we are
providing access to these materials via the Internet. This reduces
the amount of paper necessary to produce these materials, as well
as the costs associated with mailing these materials to all
stockholders.
Accordingly, on March 15, 2023, we began mailing the Notice of
Internet Availability of Proxy Materials (the “Notice”), or our
proxy statement if you previously elected to receive a printed copy
of the materials, to all stockholders of record as of March 6,
2023 and posted our proxy materials on the website referenced in
the Notice (www.proxyvote.com).
As more fully described in the Notice, all stockholders may choose
to access our proxy materials on the website referred to in the
Notice or may request a printed set of our proxy materials. The
Notice and website provide information regarding how you may
request to receive proxy materials in printed form by mail or
electronically by email on an ongoing basis.
If you previously elected to receive a printed copy of the
materials, we have enclosed a copy of our 2022 Annual Report to
Stockholders with this Notice and Proxy Statement.
Your vote is important. Please submit your proxy promptly so your
shares can be represented and voted at the Annual Meeting, even if
you plan to participate in the Annual Meeting. You can submit a
proxy by Internet, by telephone or by requesting a printed copy of
the proxy materials and using the enclosed proxy card. You can also
vote during the virtual Annual Meeting.
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By Order of the Board of Directors, |
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Ronald O. Whitford, Jr.
Senior Vice President, General Counsel,
Chief Compliance Officer and Secretary |
March 15, 2023
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TABLE OF CONTENTS
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Quorum;
Proposals to be Voted on at Annual Meeting; Vote
Required
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A-1 |
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2023 PROXY STATEMENT
(i)
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2023 PROXY STATEMENT SUMMARY |
2023 PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in this
proxy statement. This summary does not contain all of the
information that you should consider, and you should read the
entire proxy statement carefully before voting. BWX Technologies,
Inc. is referred to as "BWXT," the "Company," "we" or
"us."
ANNUAL MEETING OF STOCKHOLDERS
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Date and Time |
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May 3, 2023 at 9:30 a.m. Eastern Time |
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Virtual Meeting |
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The Annual Meeting will be held via a live webcast at
www.virtualshareholdermeeting.com/BWXT2023.
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Record Date |
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March 6, 2023 |
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Voting |
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Stockholders as of the record date are entitled to vote. Each share
of our common stock is entitled to one vote for each director
nominee and one vote for each of the proposals to be voted
on. |
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Attendance |
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All stockholders as of the record date and their duly appointed
proxies may attend the meeting. |
CORPORATE GOVERNANCE HIGHLIGHTS
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Board Structure and Independence
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Shareholder Rights and Accountability
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Best Practices
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•89%
Independent Directors
•33%
Gender/Racial Diversity
•Independent
Board Chair
•Regular
Executive Sessions of Independent Directors
•All
Committees Comprised Entirely of Independent Directors
•Committees
Can Engage Independent Advisors
•Annual
Board and Committee Self-Evaluations
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•10-Year
Director Tenure Limit*
•Annual
Election of Directors
•Majority
Voting with Director Resignation Policy in Uncontested
Elections*
•Annual
CEO Performance and Compensation Evaluation by Independent
Directors
•Annual
Election of Board Chair and, if Board Chair is not independent, a
Lead Independent Director
•Clawback
Policy
•No
"Poison Pill" (Stockholder Rights Plan)
•No
Dual-Class Stock
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•Active
Stockholder Engagement
•CEO
and Management Succession Planning
•Robust
Stock Ownership Guidelines for Directors and
Executives
•Limits
on Director Overboarding
•New
Director Orientation and Ongoing Director Education
•Oversight
of Strategy and Risk by Board and Committees
•No
CIC Tax Gross Ups or Single Trigger Equity Vesting
•No
Hedging or Pledging Policy
•No
Employment Agreements with Executive Officers
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*See
below.
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10-Year Director Tenure Limit.
In 2015, our Board adopted a 10-year director tenure policy that
provides that (1) no person may be nominated to serve on the Board
if they have more than 10 years of service prior to the date of
such election and (2) a director is deemed to resign and retire at
the next annual meeting of stockholders following the term in which
10 years of service is attained. See "10-Year Director Tenure
Limit" under Corporate Governance — Board Function, Leadership and
Executive Sessions below.
Majority Voting with Director Resignation Policy.
Our Bylaws provide that, in an election of directors where the
number of director nominees does not exceed the number of directors
to be elected (an "Uncontested Election"), each director nominee
must receive the majority of the votes cast with respect to that
director. Each director nominee has submitted an irrevocable
resignation contingent on (i) the receipt of a majority of the
votes cast in an Uncontested Election and (ii) acceptance of such
resignation by the Board. If a director nominee were not to receive
a majority vote, the Governance Committee would make a
recommendation to the Board on whether to accept or reject the
resignation or take other action. Any action taken by the Board
would be publicly disclosed within 90 days of certification of the
election results.
(ii)
2023 PROXY STATEMENT
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2023
PROXY STATEMENT SUMMARY |
Board Leadership.
Female directors represent 50% of our Board leadership positions.
In May 2022, we made the following Board leadership
changes:
•Jan
A. Bertsch, who formerly was Chair of the Audit and Finance
Committee, was elected as our Independent Board Chair, succeeding
our former Non-Executive Chairman who retired from the Board at
that time.
•Barbara
A. Niland, who formerly was Chair of the Compensation Committee,
was appointed Chair of the Audit and Finance
Committee.
•Gerhard
F. Burbach was appointed Chair of the Compensation Committee, and
James M. Jaska continued as Chair of the Governance
Committee.
Board Refreshment.
Since 2018, we have recruited three new directors, including one
diverse candidate, with medical industry, aeronautical and nuclear
propulsion experience, respectively, to align the Board with and
further support our strategic initiatives. We have had four
directors retire from the Board and one director resign to accept a
position with the Company in that time period.
Board Composition and Diversity.
Our Board is committed to the diversity of its membership. We have
had two female directors since 2016 and currently have three
diverse directors, representing 33% of the Board. Our Board
regularly evaluates its composition to ensure directors have an
appropriate and diverse mix of perspectives, skills, professional
experience and background (see "Board Expertise Summary" on next
page). Our director criteria and recruitment process seeks to align
the Board's capabilities with the Company's business strategy, as
well as provide for periodic director refreshment and overall Board
diversity, cohesiveness and collegiality. The Company intends to
add at least one additional female or diverse director in the next
year. Below is a summary of our director composition related to the
tenure, age, diversity, independence and expertise of our current
directors.
2023 PROXY STATEMENT
(iii)
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2023 PROXY STATEMENT SUMMARY |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS
•We
believe that a commitment to environmental, social and governance
("ESG") matters enhances stockholder value. The Board has
structured oversight of ESG processes and priorities with regular
reporting by management to the Board and its
Committees.
•Since
2015, the Compensation Committee has included an ESG performance
metric (safety) in our annual incentive plans to emphasize
continuous focus on safety performance.
•In
March 2023, we published our annual Sustainability Report, which is
available on our website at
www.bwxt.com/about/corporate-citizenship,
to provide enhanced transparency regarding our policies and
practices as they relate to our corporate purpose, people,
diversity and inclusion, health, safety, security, product impact,
environment, governance, ethics, human rights, supply chain and
community service.
2022 PERFORMANCE HIGHLIGHTS*
•Consolidated
revenue was over $2.2 billion, a 5% increase over the prior
year.
•Net
income and adjusted EBITDA were $238.6 million and $439.4 million,
respectively.
•GAAP
and non-GAAP earnings per share were $2.60 and $3.13,
respectively.
•In
2022, we returned $81.1 million to stockholders in the form of
dividends.
•As
of December 31, 2022, our backlog was $4.1 billion.
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* Please refer to Appendix A, "Reconciliation of Reported (GAAP) to
Adjusted (Non-GAAP) Results," for a reconciliation of adjusted
results, including adjusted EBITDA and non-GAAP earnings per share,
to reported results.
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(iv)
2023 PROXY STATEMENT
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2023
PROXY STATEMENT SUMMARY |
TOTAL STOCKHOLDER RETURN
The following graph depicts the cumulative total stockholder return
of BWXT for the one, three and five years ended December 31, 2022
relative to those of the S&P 500 Index ("S&P 500"), the
S&P Aerospace and Defense Select Index ("S&P A&D
Select") and our custom compensation peer group for 2022. See
"Section 4: Other Benefits and Practices" in Compensation
Discussion and Analysis for information on our peer
group.
One-Year, Three-Year and Five-Year Total Stockholder Return as of
December 31, 2022(1)
(1) Measured by dividing (i) the sum of the
cumulative amount of dividends for the measurement period, assuming
dividend reinvestment, and the difference between the applicable
share price at the end and the beginning of the measurement period
by (ii) the share price at the beginning of the measurement
period.
ANNUAL MEETING AGENDA
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Proposal |
Board Vote
Recommendation |
Page Reference |
1 |
Election of nine director nominees to one-year terms
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FOR
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6 |
EACH NOMINEE
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2 |
Advisory vote on the compensation of our named
executive officers
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FOR
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21 |
3 |
Advisory vote on the frequency of the advisory vote on the
compensation of our named executive officers
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1 YEAR
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54 |
4 |
Ratification of Deloitte & Touche LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2023
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FOR
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58 |
VOTING MATTERS
Your vote is important. Please submit your proxy promptly so your
shares can be represented and voted, even if you plan to
participate in the Annual Meeting. You may submit a proxy to have
your shares voted via the Internet at
www.proxyvote.com
or via telephone at 1-800-690-6903; by requesting a printed copy of
the proxy materials and using the enclosed proxy card; or by voting
your shares during the Annual Meeting.
2023 PROXY STATEMENT
(v)
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2023 PROXY STATEMENT SUMMARY |
PROPOSAL 1: ELECTION OF DIRECTOR NOMINEES
The Board of Directors has nominated nine directors to serve a
one-year term expiring at the 2024 annual meeting of stockholders
and until their successors are duly elected and qualified. The
following table provides summary information about each director
nominee.
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Director Nominee |
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Age |
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Director
Since |
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Principal Occupation |
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Committee(s) |
Jan A. Bertsch |
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66 |
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2013 |
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•Former
Chief Financial Officer, Owens-Illinois, Inc.
• Former Executive Vice President and Chief Financial
Officer, Sigma-Aldrich Corporation
• Former Vice President and Principal Accounting
Officer, Borg Warner, Inc.
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• Ex
officio
member of each committee
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Gerhard F. Burbach |
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61 |
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2018 |
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•Former
President, Chief Executive Officer and Director of Thoratec
Corporation
• Former leadership roles with Digirad Corporation,
Philips Medical Systems, ADAC Laboratories, McKinsey & Company
and CitiCorp
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• Compensation, Chair |
Rex D. Geveden |
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62 |
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2017 |
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•President
and Chief Executive Officer since 2017
•Former
Chief Operating Officer from October 2015 to December
2016
•Former
Associate Administrator of NASA
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• None |
James M. Jaska |
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72 |
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2016 |
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•Chief
Executive Officer, Versar, Inc.
• Former President, Valiant Integrated Services
LLC
• Former President, Government for AECOM (formerly AECOM
Technology Corporation)
• Former Director, President, Chief Financial Officer
and Treasurer, Tetra Tech, Inc.
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• Audit and Finance
• Governance, Chair
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Kenneth J. Krieg |
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62 |
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2016 |
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•Founder
and Principal, Samford Global Strategies
• Former Under Secretary of Defense for Acquisition,
Technology and Logistics, as well as a variety of other roles with
the Department of Defense
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• Compensation |
Leland D. Melvin |
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59 |
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2019 |
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•Former
astronaut serving twice on space shuttle Atlantis as a mission
specialist in support of the International Space
Station
•Former
NASA associate administrator for education
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• Compensation |
Robert L. Nardelli |
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74 |
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2014 |
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•Founder
and CEO of XLR-8, LLC
•Former
Senior Advisor to founder of Cerberus Capital Management,
L.P.
•Former
Chairman and CEO of Chrysler LLC
•Former
Chairman, President and CEO of The Home Depot, Inc.
|
|
• Audit and Finance
• Governance
|
Barbara A. Niland |
|
64 |
|
2016 |
|
•Former
Corporate Vice President and Chief Financial Officer of Huntington
Ingalls Industries, Inc. ("HII"), a Fortune 500 shipbuilding
company for the U.S. Navy and Coast Guard
•Over
30-year career with Northrop Grumman in roles of increasing
responsibility, including the spin-off of HII in 2011
|
|
• Audit and Finance, Chair
• Governance
|
John M. Richardson |
|
63 |
|
2020 |
|
•Former
Chief of Naval Operations for the U.S. Navy
• Over 37 years of service in the U.S. Navy with service
as Director of the Naval Nuclear Propulsion Program and command of
the USS Honolulu nuclear submarine
|
|
• Audit and Finance
• Compensation
|
Our Board of Directors has determined that Mses. Bertsch and Niland
and Messrs. Burbach, Jaska, Krieg, Melvin, Nardelli and Richardson
are independent.
Director nominees must receive a majority of the votes cast at the
Annual Meeting in order to be elected to the Board of Directors. In
a contested election, director nominees are elected by a plurality
of the votes cast by the shares of our common stock entitled to
vote in the election of directors.
|
|
|
Our Board recommends that you vote "FOR" each of the director
nominees.
|
(vi)
2023 PROXY STATEMENT
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|
2023
PROXY STATEMENT SUMMARY |
PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED
EXECUTIVE OFFICERS
We hold an annual stockholder vote on executive compensation and
are asking our stockholders to approve an advisory resolution for
2022 compensation. At the 2022 Annual Meeting of Stockholders,
96.9% of the votes cast were in favor of our executive compensation
program. We encourage stockholders to read the Compensation
Discussion and Analysis section of this proxy statement, which
provides an overview of our compensation philosophy and how that
philosophy was implemented in 2022. We believe that our executive
compensation is reasonable and provides appropriate incentives to
our executives to achieve results that we expect to drive
stockholder value without encouraging excessive risk taking in
business decisions.
Approval of this proposal requires the affirmative vote of a
majority of our shares of common stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on
this proposal.
|
|
|
Our Board recommends that you vote "FOR" the compensation of our
Named Executive Officers on an advisory basis.
|
PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON
THE COMPENSATION OF OUR EXECUTIVE OFFICERS
Every six years we ask our stockholders to hold a non-binding vote
on the frequency with which our advisory vote on executive
compensation should be held. At our 2011 and 2017 Annual Meetings,
our stockholders voted on an advisory basis to hold an advisory
vote on executive compensation (commonly known as the "Say on Pay"
vote) on an annual basis. At our 2023 Annual Meeting, we recommend
stockholders approve a resolution recommending that we continue to
hold our Say on Pay vote on an annual basis.
Approval of this proposal requires the affirmative vote of a
majority of our shares of common stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on
this proposal.
|
|
|
Our Board recommends that you vote "1 YEAR" on the frequency of the
advisory vote on the compensation of our Named Executive Officers
on an advisory basis.
|
PROPOSAL 4: RATIFICATION OF AUDITORS
Our Board of Directors has ratified the decision of the Audit and
Finance Committee to appoint Deloitte & Touche LLP
(“Deloitte”) to serve as the independent registered public
accounting firm to audit our financial statements for the year
ending December 31, 2023. We are asking our stockholders to
ratify this appointment. Below is summary information of Deloitte’s
fees for fiscal years ended December 31, 2022 and
2021.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Service |
|
2022 |
|
|
2021 |
|
Audit |
|
$ |
2,808,591 |
|
|
|
$ |
2,657,595 |
|
|
Audit-Related |
|
45,000 |
|
|
|
37,429 |
|
|
Tax |
|
78,750 |
|
|
|
110,250 |
|
|
All Other |
|
3,295 |
|
|
|
2,695 |
|
|
Total |
|
$ |
2,935,636 |
|
|
|
$ |
2,807,969 |
|
|
Approval of this proposal requires the affirmative vote of a
majority of the votes cast on this proposal.
|
|
|
Our Board recommends that you vote "FOR" the ratification of
Deloitte as our independent registered public accounting firm for
the year ending December 31, 2023.
|
2023 PROXY STATEMENT
(vii)
BWX TECHNOLOGIES, INC.
800 Main Street, 4th Floor
Lynchburg, Virginia 24504
|
|
|
Proxy Statement for the 2023 Annual Meeting of Stockholders
to be held on May 3, 2023 |
GENERAL INFORMATION
The Board of Directors (the "Board") of BWX Technologies, Inc.
("BWXT," the "Company," "we" or "us") has made these materials
available to you over the Internet or, upon your request, has
mailed you a printed version of these materials in connection with
our 2023 Annual Meeting of Stockholders (the "Annual Meeting"),
which will take place on May 3, 2023. We mailed the Notice of the
Annual Meeting (or Proxy Statement if you requested a hard copy) to
our stockholders on or about March 15, 2023, and our proxy
materials were posted on the website referenced in the Notice on
that same date.
Links to our website are included in this proxy statement solely
for convenience. Content on our website is not, and shall not be
deemed to be, part of this proxy statement or incorporated herein
or into any of our other filings with the Securities and Exchange
Commission ("SEC").
HOW TO PARTICIPATE IN THE VIRTUAL ANNUAL MEETING
You are entitled to participate in our Annual Meeting if you were a
stockholder of record at the close of business on March 6, 2023.
This year’s Annual Meeting will be held virtually via a live
webcast.
To attend and participate in the virtual Annual Meeting,
please visit
www.virtualshareholdermeeting.com/BWXT2023.
You must enter the control number found on your proxy card, voting
instruction form or notice you previously received.
Online access to the webcast will open 15 minutes prior to the
start of the Annual Meeting to allow time for you to log-in and
test your device. We encourage you to access the website in advance
of the designated start time. The virtual meeting platform is
supported across browsers and devices running the most updated
version of applicable software and plug-ins. You should ensure you
can hear streaming audio prior to the start of the meeting. If you
encounter technical difficulties with the virtual meeting platform
on the meeting day, please call the technical support number that
will be posted on the meeting website.
You may vote during the Annual Meeting by following the
instructions available on the virtual meeting website. If you are
the beneficial owner of shares held in street name and you want to
vote your shares during the Annual Meeting, you must obtain a valid
proxy from your broker or nominee. You should contact your broker
or nominee or refer to the instructions provided by your broker or
nominee for further information. Whether or not you plan to attend
the Annual Meeting, we urge you to vote and submit your proxy in
advance of the Annual Meeting by one of the methods described in
the proxy materials for the Annual Meeting. The proxy card included
with the proxy materials may be used to vote your shares in
connection with the Annual Meeting. We encourage you to submit your
proxies as early as possible to avoid any processing
delays.
Questions relevant to meeting matters will be taken live via
webcast and answered during the meeting as time allows, to emulate
an in-person question and answer session. Only stockholders with a
valid control number will be allowed to ask questions.
To ensure the meeting is conducted in a manner that is fair to all
stockholders, the Chair (or such other person designated by our
Board) may exercise broad discretion in recognizing stockholders
who wish to ask questions and determining whether inappropriate
questions are rejected or edited, the order in which questions are
asked, and the amount of time devoted to any one question. Further
instructions on how to attend, participate in and vote at the
virtual Annual Meeting, including how to demonstrate your ownership
of our stock as of the record date, are available at
the virtual meeting website.
2023 PROXY STATEMENT
1
VOTING INFORMATION
RECORD DATE AND WHO MAY VOTE
Our Board selected March 6, 2023 as the record date for
determining stockholders of record entitled to vote at the Annual
Meeting. This means that if you were a registered stockholder with
our transfer agent and registrar, Computershare Trust Company,
N.A., on the record date, you may vote your shares on the matters
to be considered at the Annual Meeting. If your shares were held in
street name on that date, you should refer to the instructions
provided by your broker or nominee for further information. They
are seeking your instructions on how you want your shares voted.
Brokers holding shares in street name can vote those shares on
routine matters if the beneficial owner has not provided voting
instructions at least 10 days before the Annual Meeting. Under the
rules of the New York Stock Exchange, the election of directors,
the advisory vote on compensation of our named executive officers
and the advisory vote on the frequency of the advisory vote on
executive compensation are not considered routine matters, which
means that brokers may not vote your shares for such
matters if you have not given your broker specific
instructions as to how to vote and your shares will not be
represented in those matters.
Please be sure to give specific voting instructions to your
broker.
On the record date, 91,438,443 shares of our common stock were
outstanding. Each outstanding share of common stock entitles its
holder to one vote on each matter to be acted on at the
meeting.
HOW TO VOTE
Most stockholders can vote by proxy in three ways:
•by
Internet at
www.proxyvote.com;
•by
telephone; or
•by
mail.
Stockholder of Record
If you are a stockholder of record, you can vote your shares by
voting by Internet, telephone, mailing in your proxy or during the
Annual Meeting. You may give us your proxy by following the
instructions included in the Notice or, if you received a printed
version of these proxy materials, in the enclosed proxy card. If
you want to vote by mail but have not received a printed version of
these proxy materials, you may request a full packet of proxy
materials through the instructions in the Notice. If you vote using
either telephone or the Internet, you will save us mailing
expense.
By giving us your proxy, you will be directing us how to vote your
shares at the Annual Meeting. Even if you plan to attend the Annual
Meeting, we urge you to vote now by giving us your proxy. This will
ensure that your vote is represented at the Annual Meeting. If you
do attend the Annual Meeting, you can change your vote at that
time, if you then desire to do so.
Beneficial Owner
If you are the beneficial owner of shares held in street name, the
methods by which you can access the proxy materials and give the
voting instructions to the broker or nominee may vary. Accordingly,
beneficial owners should follow the instructions provided by their
brokers or nominees to vote by Internet, telephone or mail. If you
want to vote by mail but have not received a printed version of
these proxy materials, you may request a full packet of proxy
materials as instructed by the Notice. If you want to vote your
shares during the Annual Meeting, you must obtain a valid proxy
from your broker or nominee. You should contact your broker or
nominee or refer to the instructions provided by your broker or
nominee for further information. Additionally, the availability of
Internet or telephone voting depends on the voting process used by
the broker or nominee that holds your shares.
You may receive more than one Notice or proxy statement and proxy
card or voting instruction form if your shares are held through
more than one account (e.g., through different brokers or
nominees). Each proxy card or voting instruction form only covers
those shares held in the applicable account. If you hold shares in
more than one account, you will have to provide voting instructions
for all of your accounts to vote all your shares.
HOW TO CHANGE YOUR VOTE OR REVOKE YOUR PROXY
Stockholders of Record
For stockholders of record, you may change your vote or revoke your
proxy by written notice to our Corporate Secretary at our corporate
headquarters, 800 Main Street, 4th
Floor, Lynchburg, Virginia 24504, granting a new later dated proxy,
submitting a later dated proxy by telephone or on the Internet, or
by voting during the Annual Meeting.
2
2023 PROXY STATEMENT
Unless you attend the Annual Meeting and vote your shares, you
should change your vote using the same method (by Internet,
telephone or mail) that you first used to vote your shares. This
will help the inspector of election for the Annual Meeting verify
your latest vote.
Beneficial Owners
For beneficial owners of shares held in street name, you should
follow the instructions in the information provided by your broker
or nominee to change your vote or revoke your proxy. If you want to
change your vote as to shares held in street name by voting during
the Annual Meeting, you must obtain a valid proxy from the broker
or nominee that holds those shares for you.
QUORUM
The Annual Meeting will be held only if a quorum exists. The
presence at the Annual Meeting, in person or by proxy, of holders
of a majority of our outstanding shares of common stock as of the
record date will constitute a quorum. If you attend the Annual
Meeting or vote your shares by Internet, telephone or mail, your
shares will be counted toward a quorum, even if you abstain from
voting on a particular matter. Shares held by brokers and other
nominees as to which they have not received voting instructions
from the beneficial owners and lack the discretionary authority to
vote on a particular matter are called “broker non-votes” and will
count for quorum purposes.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
We are asking you to vote on the following proposals:
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Proposal |
Description |
Board's Voting Recommendation |
1 |
Election of nine director nominees to one-year terms
|
FOR EACH NOMINEE |
2 |
Advisory vote on the compensation of our named
executive officers
|
FOR |
3 |
Advisory vote on the frequency of the advisory vote on the
compensation of our named executive officers |
1 YEAR |
4 |
Ratification of Deloitte & Touche LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2023
|
FOR |
VOTE REQUIRED
Proposal 1: Election of Directors
For the proposal on the election of directors, a director nominee
will be elected to the Board of Directors if the numbers of votes
cast "FOR" the nominee exceeds the number of votes cast "AGAINST"
at the Annual Meeting. You may vote “FOR” or "AGAINST" each
director nominee or abstain from voting for one or more nominees.
Abstentions and broker non-votes with respect to the election of
directors will have no effect on the outcome and do not count as
votes cast. Under our Bylaws, in the event of a contested election,
the director nominees will be elected by the affirmative vote of a
plurality of the votes cast by the shares of our common stock
entitled to vote in the election of directors at the Annual
Meeting.
Proposal 2: Advisory Vote on Executive Compensation
For the advisory vote on executive compensation proposal, you may
vote “FOR” or “AGAINST” or abstain from voting. This proposal
requires the affirmative vote of a majority of the shares of our
common stock present in person or represented by proxy at the
Annual Meeting and entitled to vote on the matter in order to be
adopted. Abstentions are counted for purposes of determining a
quorum and are considered present and entitled to vote on this
proposal. As a result, abstentions have the effect of an “AGAINST”
vote. Broker non-votes will not be considered as entitled to vote
on this proposal, even though they are considered present for
purposes of determining a quorum and may be entitled to vote on
other matters. As a result, broker non-votes will not have any
effect on this proposal.
Proposal 3: Advisory Vote on the Frequency of the Advisory Vote on
the Compensation of our Named Executive Officers
For the advisory vote on the frequency of the advisory vote on the
compensation of our named executive officers proposal, you may vote
“1 YEAR,” "2 YEARS," “3 YEARS” or abstain from voting This proposal
requires the
2023 PROXY STATEMENT
3
affirmative vote of a majority of the shares of our common stock
present in person or represented by proxy at the Annual Meeting and
entitled to vote on the matter in order to be adopted. Abstentions
are counted for purposes of determining a quorum and are considered
present and entitled to vote on this proposal. As a result,
abstentions have the effect of a vote against "1 YEAR," "2 YEARS"
and "3 YEARS." Broker non-votes will not be considered as entitled
to vote on this proposal, even though they are considered present
for purposes of determining a quorum and may be entitled to vote on
other matters. As a result, broker non-votes will not have any
effect on this proposal.
Proposal 4: Ratification of Independent Registered Public
Accounting Firm
For the proposal to ratify the appointment of Deloitte as our
independent registered public accounting firm, you may vote “FOR”
or “AGAINST” or abstain from voting. This proposal requires the
affirmative vote of a majority of the votes cast on the matter.
Abstentions will not be considered as cast and, as a result, will
not have any effect on the proposal.
HOW VOTES ARE COUNTED
Stockholders of Record
For stockholders of record, all shares represented by the proxies
will be voted at the Annual Meeting in accordance with instructions
given by the stockholders. Where a stockholder returns their proxy
and no instructions are given with respect to a given matter, the
shares will be voted: (1) “FOR” the election of directors;
(2) “FOR” the approval of the compensation of our named
executive officers on an advisory basis; (3) "1 YEAR" on the
advisory vote on the frequency of the advisory vote on the
compensation of our named executive officers; (4) “FOR” the
ratification of the appointment of Deloitte as our independent
registered public accounting firm; and (5) in the discretion
of the proxy holders upon such other business as may properly come
before the Annual Meeting. If you are a stockholder of record and
you do not return your proxy, no votes will be cast on your behalf
on any of the items of business at the Annual Meeting.
Beneficial Owners
For beneficial owners of shares held in street name, the brokers or
nominees holding shares for beneficial owners must vote those
shares as instructed. Absent instructions from you, brokers, banks
and nominees may vote your shares only as they decide as to matters
for which they have discretionary authority under the applicable
New York Stock Exchange rules. A broker, bank or nominee does not
have discretion to vote on the election of directors or approval of
the compensation of our named executive officers. If you do not
instruct your broker, bank or nominee how to vote on those matters,
no votes will be cast on your behalf on the election of directors,
the advisory vote on compensation of our named executive officers
or the advisory vote on the frequency of the advisory vote on
executive compensation. Your broker will be entitled to vote your
shares in its discretion, absent instructions from you, on the
ratification of the appointment of Deloitte as our independent
registered public accounting firm. Any shares of our common stock
held in the Thrift Plan for Employees of BWXT and Participating
Subsidiary and Affiliated Companies (our "Thrift Plan”) that are
not voted or for which Vanguard, as trustee of the Thrift Plan,
does not receive timely voting instructions, will be voted in the
same proportion as the shares for which Vanguard receives timely
voting instructions from other participants in the Thrift
Plan.
Other Matters
We are not aware of any other matters that may be presented or
acted on at the Annual Meeting. If you vote by signing and
returning the enclosed proxy card or using the Internet or
telephone voting procedures, the individuals named as proxies on
the card may vote your shares, in their discretion, on any other
matter requiring a stockholder vote that comes before the Annual
Meeting.
CONFIDENTIAL VOTING
All voted proxies and ballots will be handled to protect your
voting privacy as a stockholder. Your vote will not be disclosed
except:
•to
meet any legal requirements;
•in
limited circumstances such as a proxy contest in opposition to our
Board;
•to
permit independent inspectors of election to tabulate and certify
your vote; or
•to
adequately respond to your written comments on your proxy
card.
4
2023 PROXY STATEMENT
SOLICITATION OF PROXIES
We have sent or provided access to the materials to you because our
Board is soliciting your proxy to vote your shares at our Annual
Meeting. We will bear all expenses incurred in connection with this
proxy solicitation. We have engaged Alliance Advisors to assist in
the solicitation for a fee of $26,800. In addition, our officers
and employees may solicit your proxy by telephone, facsimile
transmission, electronic mail or in person, and they will not be
separately compensated for such services. We solicit proxies to
give all stockholders an opportunity to vote on matters that will
be presented at the Annual Meeting. In this proxy statement, you
will find information on these matters, which is provided to assist
you in voting your shares. If your shares are held through a broker
or other nominee (i.e.,
in "street name") and you have requested printed versions of these
materials, we have requested that your broker or nominee forward
this proxy statement to you and obtain your voting instructions,
for which we will reimburse them for reasonable out-of-pocket
expenses. If your shares are held through our Thrift Plan and you
have requested printed versions of these materials, the trustee of
that plan has sent you this proxy statement and you should instruct
the trustee on how to vote your Thrift Plan shares.
2023 PROXY STATEMENT
5
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PROPOSAL 1: ELECTION OF DIRECTORS |
|
PROPOSAL 1: ELECTION OF DIRECTORS
Our Board of Directors is currently comprised of the nine members
identified in the table below, all of whom are standing for
election. All director nominees stand for election to one-year
terms at the Annual Meeting and each annual meeting of stockholders
thereafter.
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10-Year Director Tenure Limit
|
In 2015, our Board adopted a 10-year director tenure policy that
provides that (1) no person may be nominated to serve on the Board
if they have more than 10 years of service prior to the date of
such election and (2) a director is deemed to resign and retire at
the next annual meeting of stockholders following the term in which
10 years of service is attained. See "10-Year Director Tenure
Limit" under Corporate Governance — Board Function, Leadership and
Executive Sessions below.
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|
Director Nominee |
Director Since |
Jan A. Bertsch |
2013 |
Gerhard F. Burbach |
2018 |
Rex D. Geveden |
2017 |
James M. Jaska |
2016 |
Kenneth J. Krieg |
2016 |
Leland D. Melvin |
2019 |
Robert L. Nardelli |
2014 |
Barbara A. Niland |
2016 |
John M. Richardson |
2020 |
Director Qualifications
The table below highlights the qualifications, competency and
experience of each director, including each nominee for election to
our Board, that contributed to the Board’s determination that each
individual is uniquely qualified to serve on the Board. This
high-level summary is not intended to be an exhaustive list of each
director’s skills or contributions.
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|
Expertise / Experience |
Bertsch |
Burbach |
Geveden |
Jaska |
Krieg |
Melvin |
Nardelli |
Niland |
Richardson |
Executive / Operating |
● |
● |
● |
● |
● |
|
● |
● |
● |
Government, Nuclear or Manufacturing Industry |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Financial / Strategic / M&A |
● |
● |
● |
● |
● |
|
● |
● |
|
Technology / Scientific |
● |
● |
● |
● |
● |
● |
|
○ |
● |
Risk Management |
● |
● |
● |
● |
○ |
● |
● |
● |
● |
Healthcare / FDA Regulatory |
|
● |
|
○ |
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Aerospace Industry |
|
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● |
|
● |
● |
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● |
Safety and Environmental |
|
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● |
● |
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● |
○ |
|
● |
Public Company CEO Experience |
|
● |
● |
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● |
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|
Security and Information Technology |
● |
● |
● |
● |
○ |
● |
○ |
○ |
● |
Governance |
● |
● |
● |
● |
● |
|
● |
● |
● |
International |
● |
● |
● |
● |
● |
● |
● |
● |
● |
Other Current Public Company Boards |
2 |
1 |
1 |
0 |
1 |
0 |
1 |
0 |
2 |
●
Expertise
○
Experience
|
6
2023 PROXY STATEMENT
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PROPOSAL 1: ELECTION OF DIRECTORS |
|
Director Nominees
On the nomination of our Board following the recommendation of the
Governance Committee, the following nominees will each stand for
election as a director for a one-year term expiring at the 2024
Annual Meeting of Stockholders and until their successors are duly
elected and qualified:
|
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|
•Jan
A. Bertsch
|
•Leland
D. Melvin
|
•Gerhard
F. Burbach
|
•Robert
L. Nardelli
|
•Rex
D. Geveden
|
•Barbara
A. Niland
|
•James
M. Jaska
|
•John
M. Richardson
|
•Kenneth
J. Krieg
|
|
Each nominee has consented to serve as a director if
elected.
Unless otherwise directed, the persons named as proxies on the
enclosed proxy card intend to vote “FOR” the election of each of
the director nominees. If any nominee should become unavailable for
election, the shares will be voted for such substitute nominee as
may be proposed by our Board. We are not aware of any circumstances
that would prevent any of the nominees from serving.
Set forth below is certain information for each director nominee up
for election at the Annual Meeting and each continuing director of
our Company who is not up for election. (Ages are as of the Annual
Meeting.)
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
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Professional Experience |
•Ms.
Bertsch, age 66, served as Chief Financial Officer of
Owens-Illinois, Inc., a Fortune 500 manufacturer of glass and
packaging products, from November 2015 to April
2019.
•Previously,
Ms. Bertsch served as the Executive Vice President and Chief
Financial Officer of Sigma-Aldrich Corporation, a leading life
science and high technology company, from March 2012 to
November 2015.
•Before
joining Sigma-Aldrich, Ms. Bertsch served as Vice President,
Controller and Principal Accounting Officer of Borg Warner, Inc.,
from August 2011 to February 2012 and as Vice President
and Treasurer from December 2009 to
July 2011.
•Prior
to that, Ms. Bertsch spent several years as Senior Vice
President, Treasurer and Chief Information Officer for Chrysler
Group, LLC, and Chrysler LLC, where she worked proactively with a
number of constituents to determine a solution to Chrysler’s
long-term viability.
•Ms.
Bertsch served on the Board of Directors of Meritor, Inc. from 2016
to 2022, and serves on the Boards of Regal Rexnord Corporation
since 2019 and Axalta Coating Systems, Inc. since September
2022.
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Jan A. Bertsch
Independent Board Chair
Director since 2013
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|
Skills and Qualifications |
•Ms. Bertsch
has held numerous advisory roles in the academic, technological,
and major manufacturing industries. With 40 years of experience,
Ms. Bertsch brings extensive corporate finance, strategic
planning, restructuring and international experience to our Board.
The depth and breadth of her professional career in the life
science, automotive and manufacturing industries, with a keen focus
on operational enhancements, cost reduction strategies and revenue
generation for Fortune 500 and Fortune 1000 companies, make her a
valuable member of the Board.
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Professional Experience |
•Mr.
Burbach, age 61, was President, Chief Executive Officer and
director of Thoratec Corporation, a company that develops,
manufactures and markets proprietary medical devices used for
circulatory support, from 2006 to 2014.
•Prior
to that, he held executive leadership positions at Digirad
Corporation, Philips Medical Systems, ADAC Laboratories, McKinsey
& Company and CitiCorp.
•Mr.
Burbach received a bachelor’s degree in industrial engineering from
Stanford University and a master’s of business administration from
Harvard Business School.
•Mr.
Burbach serves on the board of directors of Fluidigm Corporation, a
public company manufacturing and marketing innovative technologies
for life sciences research, and is chairman of the board of
directors of Procyrion Inc., a private medical device company
focused on the treatment of chronic heart failure. He also serves
on the boards of Artelon, a private biomaterial developer used for
tendon and ligament reconstruction, and Vascular Dynamics, Inc., a
private medical device company developing innovative solutions for
heart failure and hypertension.
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Gerhard F. Burbach
Independent Director
Director since 2018
Committee:
– Compensation (Chair)
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Skills and Qualifications |
•Mr.
Burbach's leadership background with medical device companies
provides our Board with a key external perspective and insight into
our medical isotope business, including strategy, development,
operations, customers and other stakeholders.
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2023 PROXY STATEMENT
7
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PROPOSAL 1: ELECTION OF DIRECTORS |
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Professional Experience |
•Mr. Geveden,
age 62, has served as President and Chief Executive Officer since
January 2017, and served as our Chief Operating Officer from
October 2015 until December 2016.
•Previously,
Mr. Geveden was Executive Vice President at Teledyne Technologies
Incorporated ("Teledyne"), a provider of electronic subsystems and
instrumentation for aerospace, defense and other uses. There he led
two of Teledyne's four operating segments since 2013, and
concurrently served as President of Teledyne DALSA, Inc., a
Teledyne subsidiary, since 2014. Mr. Geveden also served as
President and Chief Executive Officer of Teledyne Scientific and
Imaging, LLC (2011 to 2013) and President of both Teledyne Brown
Engineering, Inc. and Teledyne's Engineered Systems Segment (2007
to 2011).
•Mr.
Geveden is a former Associate Administrator of the National
Aeronautics and Space Administration ("NASA"), where he was
responsible for all technical operations within the agency's $16
billion portfolio and served in various other positions with NASA
in a career spanning 17 years.
•Mr.
Geveden has served as chairman of the board of directors of TTM
Technologies, Inc. since 2021 and has been a director since
2018.
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Rex D. Geveden
President, Chief Executive Officer and Director
Director since 2017
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Skills and Qualifications |
•Mr.
Geveden has broad leadership and technical experience overseeing
commercial manufacturing operations for publicly traded companies
and high-consequence technology programs for the U.S. government.
This experience, combined with his strategic vision, make him a
valuable contributor to our Board of Directors.
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Professional Experience |
•Mr.
Jaska, age 72, has served as Chief Executive Officer, Versar, Inc.
since October 2021. He previously served as President and Chief
Executive Officer of both GC Valiant LLC and Valiant Integrated
Services LLC from 2016 to 2021. From July 2015 to January 2016, he
served as Division President of Supreme Group LLC (now known as
Valiant Integrated Services LLC).
•Previously,
Mr. Jaska served in a variety of roles of increasing responsibility
with AECOM (formerly AECOM Technology Corporation) over a 10-year
period, including President, Government (2013-2014), President of
Americas & Government (2011-2013), Division Executive Vice
President (2009-2011), Group Chief Executive, Government Group
(2005-2009) and Consultant (2004-2005).
•Mr.
Jaska also held several positions with Tetra Tech, Inc., a global
provider of professional technical services in engineering, applied
sciences, resource management and infrastructure, including
President and Director (2003-2004), President, Chief Financial
Officer and Treasurer (2001-2003), Executive Vice President, Chief
Financial Officer and Treasurer (2000-2001) and as Vice President,
Chief Financial Officer and Treasurer (1994-2000).
•Mr.
Jaska has also held leadership roles with Alliant Techsystems,
Inc., Honeywell, Inc. and Ecolab.
•He
holds a master's degree and a bachelor's degree from Western
Illinois University.
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James M. Jaska
Independent Director
Director since 2016
Committees:
– Audit and Finance
– Governance (Chair)
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Skills and Qualifications |
•Mr.
Jaska's leadership background with large technology and government
services operations provides our Board with a key external
perspective on our operations, customers and other stakeholders
relevant to our businesses.
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Professional Experience |
•Mr.
Krieg, age 62, has served as the founder and Principal of Samford
Global Strategies, a consulting practice focused on helping clients
lead and manage through periods of strategic change, since
2007.
•Previously,
Mr. Krieg served as the Under Secretary of Defense for Acquisition,
Technology and Logistics from June 2005 to July 2007, in which role
he was responsible for advising the Secretary of Defense on all
matters relating to the Department of Defense acquisition system,
research and development, advanced technology, developmental test
and evaluation, production, logistics, installation management,
military construction, procurement, environmental security,
nuclear, chemical and biological matters.
•Mr.
Krieg has also served in a variety of Department of Defense roles,
including as Special Assistant to the Secretary and Director for
Program Analysis & Evaluation and Executive Secretary of the
Senior Executive Council, and served as Vice President and General
Manager of International Paper Realty Inc.
•Mr.
Krieg also worked in a number of defense and foreign policy
assignments in Washington, DC, including positions at the White
House, on the National Security Council Staff, and in the Office of
the Secretary of Defense.
•He
serves on the board of directors on Leonardo DRS, Inc. since
November 2022 and served on the boards of Tempus Applied Solutions
Holdings, Inc. from 2014 to 2016, and API Technologies, Inc. from
2011 to 2016.
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Kenneth J. Krieg
Independent Director
Director since 2016
Committee:
– Compensation
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Skills and Qualifications |
•Mr.
Krieg has significant experience overseeing major research,
development and procurement programs for the Department of Defense.
His background provides our Board of Directors with valuable
insight into acquisition priorities and considerations of the U.S.
Government, our single largest customer.
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8
2023 PROXY STATEMENT
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PROPOSAL 1: ELECTION OF DIRECTORS |
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Professional Experience |
•Mr.
Melvin, age 59, had a 24-year career with NASA as an astronaut and
research scientist, including serving as mission specialist on two
Space Shuttle Atlantis missions to the International Space
Station.
•In
addition, he served as a NASA Associate Administrator for Education
for over four years and served as co-chair of the White House's
Federal Coordination in STEM Education Task Force to develop
education plans for STEM.
•Mr.
Melvin served as a U.S. representative to the International Space
Education Board, a global collaboration on space education among a
number of government space agencies.
•He
is a director of Star Harbor Space Training Academy, an immersive
space training academy, and Trustee Emeritus of the University of
Richmond Board of Trustees.
•Mr.
Melvin received a B.S. in chemistry from the University of Richmond
and an M.S. in materials science engineering from the University of
Virginia.
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Leland D. Melvin
Independent Director
Director since 2019
Committee:
– Compensation
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Skills and Qualifications |
•Mr.
Melvin has 24 years of experience with NASA with extensive
technical expertise in space exploration as both an astronaut and
research scientist. This experience provides an external
perspective and insight into the strategy, development, operations
and stakeholders for our space propulsion and related
programs.
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Professional Experience |
•Mr. Nardelli,
age 74, is the Founder and Chief Executive Officer of XLR-8, LLC,
an investment and consulting company, which he formed in
2012.
•He
has also served as a Senior Advisor at Emigrant Savings Bank since
August 2015, and formerly served as Senior Advisor to the
founder of Cerberus Capital Management, L.P. (“Cerberus”), a
private equity firm, and held several senior positions with
Cerberus and Cerberus Operations and Advisory Company, LLC from
2007 to August 2015.
•Mr. Nardelli
served as Chairman and CEO of Chrysler LLC from 2007 until 2009 and
served as Chairman, President and CEO of The Home Depot, Inc. from
2000 to 2007.
•Previously,
Mr. Nardelli held several senior executive positions with
General Electric Company.
•Mr. Nardelli
serves on the board of directors of Fathom Digital Manufacturing
Corporation. He has served on the boards of directors of Accelerate
Acquisition Corp. (2021-2023), The Home Depot (2000-2007), The
Coca-Cola Company (2002-2005), Chrysler LLC (2007-2009) and Pep
Boys – Manny, Moe and Jack (2015-2016).
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Robert L. Nardelli
Independent Director
Director since 2014
Committees:
– Audit and Finance
– Governance
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Skills and Qualifications |
•Mr. Nardelli
has over 40 years of global operating and financial experience,
including with large publicly traded manufacturing companies. This
experience combined with his past service on the boards of
directors of several other publicly traded companies provides a
meaningful perspective to our Board.
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Professional Experience |
•Ms.
Niland, age 64, most recently served as Corporate Vice President
and Chief Financial Officer of Huntington Ingalls Industries, Inc.
(March 2011 to March 2016), a Fortune 500 shipbuilding company for
the U.S. Navy and Coast Guard that was spun off from Northrop
Grumman Corporation in 2011.
•Previously
at Northrop Grumman, Ms. Niland served in a variety of roles of
increasing responsibility over a career spanning over 37 years,
including as Vice President and Chief Financial Officer,
Shipbuilding; Vice President and Chief Financial Officer and
Division Vice President - Finance.
•Ms.
Niland holds a master's degree from the University of Maryland
University College and a bachelor's degree from Towson
University.
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Barbara A. Niland
Independent Director
Director since 2016
Committees:
– Audit and Finance (Chair)
– Governance
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Skills and Qualifications |
•Ms. Niland
has over 30 years of financial and operations experience with
shipbuilding and manufacturing operations for the U.S. Navy. Her
tenure in senior financial leadership roles with one of our
publicly traded peer companies provides our Board with valuable
perspectives on our industry.
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2023 PROXY STATEMENT
9
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PROPOSAL 1: ELECTION OF DIRECTORS |
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Professional Experience |
•Admiral
Richardson, age 63, served as the 31st Chief of Naval Operations
for the U.S. Navy from 2015 to 2019 and as its Director of the
Naval Nuclear Propulsion Program from 2012 to 2015. As Chief of
Naval Operations, he was responsible for the management of a $160
billion budget covering 600,000 sailors and civilians, over 70
installations, 290 warships and over 2,000 aircraft
worldwide.
•During
his 37 years of service in the U.S. Navy, Admiral Richardson gained
valuable operational and national security experience safely
managing the Naval Nuclear Propulsion Program. He also served on
four nuclear submarines, including commanding the submarine USS
Honolulu, and served as naval aide to the President of the United
States.
•Admiral
Richardson earned a bachelor of science degree in physics from the
U.S. Naval Academy, a master's degree in electrical engineering
from the Massachusetts Institute of Technology and Woods Hole
Oceanographic Institution and a master's degree in National
Security Strategy from the National War College.
•Admiral
Richardson serves on the Board of Directors of The Boeing Company
and Constellation Energy Corporation, a spin-off of Exelon
Corporation, where he served as a director from 2019 to
2022.
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John M. Richardson
Independent Director
Director since 2020
Committees:
– Audit and Finance
– Compensation
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Skills and Qualifications |
•Admiral
Richardson brings extensive expertise in nuclear, safety,
regulation, operations management and oversight of complex,
high-risk systems, as well as extensive national security
experience. His unique understanding of the U.S. government, our
single largest customer, and his service on other public company
boards of directors provide valuable perspectives on our business
and industry.
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RECOMMENDATION AND VOTE REQUIRED
Our Board recommends that stockholders vote “FOR” each of the
director nominees. The proxy holders will vote all proxies received
"FOR" each of the director nominees unless instructed otherwise.
Approval of this proposal requires that the number of votes cast
"FOR" exceeds the number of votes cast "AGAINST" at the Annual
Meeting. Abstentions and broker non-votes with respect to the
election of directors will have no effect on the outcome and do not
count as votes cast. Under our Bylaws, in the event of a contested
election, the director nominees will be elected by the affirmative
vote of a plurality of the votes cast by the shares of our common
stock entitled to vote in the election of directors at the Annual
Meeting.
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10
2023 PROXY STATEMENT
CORPORATE GOVERNANCE
We maintain a corporate governance section on our website, which
contains copies of our principal governance documents. The
corporate governance section may be found at
www.bwxt.com
under “Investors — Corporate Governance.” The corporate governance
section includes the following documents:
•Amended
and Restated Bylaws
•Corporate
Governance Principles
•Code
of Business Conduct
•Code
of Ethics for Chief Executive Officer and Senior Financial
Officers
•Director
Conflict of Interest Policy
•Audit
and Finance Committee Charter
•Compensation
Committee Charter
•Governance
Committee Charter
DIRECTOR INDEPENDENCE
The Board has established categorical standards, which conform to
the independence requirements in the New York Stock Exchange
(“NYSE”) listing standards, to assist it in determining director
independence. These standards are contained in the Corporate
Governance Principles found on our website at
www.bwxt.com
under “Investor Relations — Corporate Governance.”
Based on these independence standards, our Board has determined
that the following eight directors are independent and meet our
categorical standards:
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•Jan
A. Bertsch
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•Kenneth
J. Krieg
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•Barbara
A. Niland
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•Gerhard
F. Burbach
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•Leland
D. Melvin
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•John
M. Richardson
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•James
M. Jaska
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•Robert
L. Nardelli
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In determining the independence of the directors, our Board
considered ordinary course transactions between us and other
entities with which the directors are associated. None were
determined to constitute a material relationship with
us.
The Board also determined that Mr. Geveden, who serves as an
executive officer of the Company, is not an independent director.
Accordingly, we currently have a supermajority of independent
directors (eight of nine, or 89%) in compliance with our Corporate
Governance Principles which require a majority of independent
directors.
BOARD FUNCTION, LEADERSHIP STRUCTURE, DIRECTOR TENURE LIMIT AND
MAJORITY VOTING
The mission of our Board is to promote the best interests of the
Company’s stockholders through oversight of the management of the
Company’s business and affairs. The Board believes that its
corporate governance policies and practices provide independent
oversight and accountability of management. The Company’s Corporate
Governance Principles and Committee Charters provide for a number
of processes and practices, including the 10-year director tenure
limit; appointment of a Lead Independent Director in appropriate
circumstances; executive sessions of the independent directors
without management at each regular Board meeting; a majority of
independent directors; and an Audit and Finance Committee,
Compensation Committee and Governance Committee, each comprised
exclusively of independent directors.
Chair and Chief Executive Officer Roles
BWXT does not have a policy requiring that the positions of Chair
and Chief Executive Officer be separate or be occupied by the same
individual. Our Board believes that this question is properly
addressed as part of succession planning and that it is appropriate
to make a determination on these matters when it elects a new Chief
Executive Officer, appoints a new Chair or at other times. In
anticipation of the retirement of Mr. Fees as our Non-Executive
Chairman at the 2022 Annual Meeting, the Board undertook its
regular succession planning process and elected Jan Bertsch as the
Independent Board Chair and eliminated the lead independent
director role at that time.
2023 PROXY STATEMENT
11
10-Year Director Tenure Limit
Our Bylaws provide that (1) a person shall not be nominated
for election or reelection to our Board if such person will have
served as a director for 10 years prior to the date of election or
re-election (as measured from the date of the Bylaw amendment,
July 1, 2015) and (2) any director who attains 10 years
of service during his or her term shall be deemed to have resigned
and retired at the first annual meeting following his or her
attainment of 10 years of service as a director.
Majority Voting with Director Resignation Policy
Our Bylaws provide that, in an election of directors where the
number of director nominees does not exceed the number of directors
to be elected (an "Uncontested Election"), each director nominee
must receive the majority of the votes cast with respect to that
director. Each director nominee has submitted an irrevocable
resignation contingent on (i) the receipt of a majority of the
votes cast in an Uncontested Election and (ii) acceptance of such
resignation by the Board. If a director nominee were not receive a
majority vote, the Governance Committee would make a recommendation
to the Board on whether to accept or reject the resignation or take
other action. Any action taken by the Board would be publicly
disclosed within 90 days of certification of the election
results.
THE ROLE OF THE BOARD IN SUCCESSION PLANNING
The Board believes effective succession planning, particularly for
the Chief Executive Officer, is important to the continued success
of the Company. As a result, the Board regularly reviews and
discusses succession planning for the Chief Executive Officer,
other Named Executives (as defined in "Named Executive Profiles"
below) and certain other executive officers during executive
sessions of Board meetings. The Governance Committee assists the
Board in the area of succession planning, in particular, with
respect to succession planning for the Chief Executive Officer.
From time to time, the Board also retains an executive search firm
as part of its normal succession planning function.
THE ROLE OF THE BOARD IN ESG OVERSIGHT
The BWXT Board of Directors believes that a commitment to
environmental, social and governance ("ESG") enhances shareholder
value. To ensure effective governance, our policies include tenure
limits, gender diversity, a no hedging/pledging policy for company
securities and maintaining a lead independent director, among other
things. In addition, we seek opportunities to engage with
stockholders for input on current and emerging areas of
focus.
The Board believes that the effective oversight of the Company's
ESG objectives and metrics is best accomplished by the Board and
each of its Committees. The Board oversees and monitors execution
upon the Company's strategy and corporate purpose, safety and
security performance, succession planning and overall
sustainability efforts. The Audit and Finance Committee oversees
and receives regular updates on litigation and environmental
matters, regulatory compliance, training, and concerns and
violations relating to the Code of Business Conduct. The
Compensation Committee oversees and receives regular reports on
compensation and benefits, and has maintained ESG performance
(safety goals) for all participants in the Company's annual
incentive plans since 2015.
The Governance Committee has primary responsibility for ESG matters
and oversees and receives regular reports on the Company's
corporate governance, human capital management, diversity and
inclusion, cybersecurity and other ESG matters. The executive
officers have responsibility for execution and implementation of
the Company's ESG program and have established a Diversity and
Inclusion Committee of employees who review and report to senior
management on these matters and potential actions to encourage
diversity and inclusion throughout the Company.
THE ROLE OF THE BOARD IN RISK OVERSIGHT
As part of its oversight function, the Board monitors the risks
that we face. The diagram below provides a summary of the risk
oversight allocation among the Board and its
Committees.
We maintain an enterprise risk management ("ERM") program
administered by our Risk Management group. The program facilitates
the process of reviewing key external, strategic, operational,
safety, security and financial risks as well as monitoring the
effectiveness of risk mitigation. Information on the ERM program is
presented to senior management and the Board on a quarterly basis.
The Board is updated quarterly on safety.
The Audit and Finance Committee assists the Board in fulfilling its
oversight responsibility in the areas of financial reporting,
ethics and compliance, litigation and environmental risks and by
meeting quarterly with management to review these risk exposures
and discuss BWXT’s policies and guidelines concerning risk
assessment and management.
12
2023 PROXY STATEMENT
The Compensation Committee also assists the Board with this
function by assessing risks associated with our compensation
programs in consultation with management and the Committee's
outside compensation consultant. The Compensation Committee has
included an ESG performance metric (safety) in our annual incentive
plans since 2015 to emphasize continuous focus on our safety
performance.
The Governance Committee assists the Board by assessing risks
associated with ESG (including diversity and inclusion and human
capital management), corporate governance and cybersecurity and
receives quarterly briefings on these topics. The Chief Information
Officer provides semiannual updates to the Governance Committee
regarding cybersecurity and data security risks, enhancements and
training.
CODE OF BUSINESS CONDUCT
Our Code of Business Conduct ("Code") applies to all directors,
officers and employees, including our chief executive officer,
chief financial officer, chief accounting officer, executive
officers and other Named Executives, and provides the ethical
guidelines and expectations for conducting our business. In
addition, we expect our suppliers, vendors, contractors, agents,
representatives, consultants and joint venture partners (our
"Partners") to behave in the ethical manner described in our Code
when doing work for the Company. The Code encourages our employees
and Partners to speak up to clarify a policy, identify questionable
conduct and report any violations through their supervisor,
manager, Human Resources, Legal or Ethics and Compliance
representative. Employees, Partners and third parties may also use
the BWXT Help Line, which is managed by a third party and available
24 hours a day, seven days a week, to report any questions or
concerns in a secure, confidential and (if desired) anonymous
format. The Code prohibits retaliation against anyone who makes a
good faith report of an alleged violation of our Code or policies.
The Audit and Finance Committee receives quarterly reports on
training, concerns and violations related to the Code. Our Code
satisfies the requirements for a "code of ethics" within the
meaning of SEC rules. A copy of the Code is posted on our
website,
www.bwxt.com
under "About Us – Corporate Citizenship – Ethics and Compliance."
In the event we amend or waive any of the provisions of the Code
applicable to our principal executive officer, principal financial
officer, principal accounting officer or controller that relates to
any element of the definition of "code of ethics" enumerated in
Item 406(b) of Regulation S-K under the Securities Exchange Action
of 1934, as amended (the "Exchange Act"), we intend to disclose
these actions on our website. A copy of the Code is also available
to stockholders upon request, addressed to the Corporate Secretary
at 800 Main Street, 4th Floor, Lynchburg, Virginia
24504.
Training
All employees are provided with a copy of the Code and required to
certify their understanding and compliance with the Code annually.
In addition, mandatory Code training is provided to all employees
and directors at least annually. This training is part of the
Company's broader training program administered by the Ethics and
Compliance Department, including online and in-person training.
Topics covered have included, among other things, diversity and
inclusion, sexual harassment, cybersecurity, anti-corruption and
anti-bribery, and export controls.
2023 PROXY STATEMENT
13
STOCKHOLDER ENGAGEMENT
We make it a priority to engage with our stockholders and have
continued our stockholder engagement activities in 2022. Since the
2022 Annual Meeting of Stockholders, we conducted a stockholder
engagement program and solicited stockholders holding approximately
75% of our outstanding shares to discuss, among other topics,
environmental, social, governance and compensation matters. As a
result of this outreach, stockholders representing approximately
16.6% of our outstanding shares requested meetings and provided
feedback to management. The feedback received from our stockholder
outreach program is reported to the Audit and Finance Committee,
Compensation Committee and Governance Committee, as appropriate,
and informs Board and Committee discussions and decisions on ESG
matters, among other things.
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Stockholder Feedback and Actions Taken
Since the 2022 Annual Meeting, we received stockholder feedback
regarding our sustainability report and have enhanced our
disclosure regarding GHG emissions and added an index reflecting
disclosures aligned with the Task Force on Climate-related
Financial Disclosures (TCFD) in our 2023 sustainability report,
which is available on our website.
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COMMUNICATION WITH THE BOARD
Stockholders or other interested persons may send written
communications to the independent members of our Board, addressed
to Board of Directors (independent members), c/o BWX Technologies,
Inc., Corporate Secretary’s Office, 800 Main Street, 4th
Floor, Lynchburg, Virginia 24504. All such communications shall be
forwarded to the independent directors for their review, except for
communications that (1) are unrelated to the Company’s
business, (2) contain improper commercial solicitations,
(3) contain material that is not appropriate for review by the
Board based upon the Company’s Bylaws and the established practice
and procedure of the Board, or (4) contain other improper or
immaterial information. Information regarding this process is
posted on our website at
www.bwxt.com
under “Investors — Corporate Governance.”
14
2023 PROXY STATEMENT
BOARD MEETINGS AND COMMITTEES
Director Attendance at Board and Annual Meetings of
Stockholders
Our Board met four times during 2022. Each director attended 100%
of the meetings of the Board and of the committees on which they
served during the time they served on the Board in 2022. In
addition, as reflected in our Corporate Governance Principles, we
have adopted a policy that each member of our Board must make
reasonable efforts to attend our Annual Meeting. All of our current
directors who were directors at the time of the meeting attended
the 2022 Annual Meeting of Stockholders.
Committees of the Board
The Board has established an Audit and Finance Committee,
Compensation Committee and Governance Committee in accordance with
the applicable NYSE and SEC requirements. Each Committee is
comprised exclusively of independent directors as determined by the
Board in accordance with the NYSE listing standards. Each of
these committees has a written charter approved by the Board and
available on our website at
www.bwxt.com
under “Investors — Corporate Governance.” The current members of
the committees are identified below.
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Audit and Finance Committee |
2022 Meetings: 4 |
Barbara Niland (Chair), James Jaska, Robert Nardelli and John
Richardson |
100% Independent |
Our Audit and Finance Committee’s role is financial and risk
oversight. Management is responsible for preparing financial
statements, and our independent registered public accounting firm
is responsible for auditing those financial statements. The Audit
and Finance Committee is not providing any expert or special
assurance as to our financial statements or any professional
certification as to the independent registered public accounting
firm’s work. The Audit and Finance Committee is responsible for the
following:
•Appoint,
retain and oversee our independent registered public accounting
firm and its audit process;
•Monitor
the effectiveness of our financial reporting processes and
disclosure and internal controls;
•Review
our audited financial statements with management and our
independent registered public accounting firm;
•Review
and evaluate the scope and performance of the internal audit
function;
•Review
our policies and procedures regarding ethics and compliance, as
well as training, concerns and violations related to our Code of
Business Conduct; and
•Review
of our exposure to various risks, including financial, litigation,
environmental and regulatory risks.
Our Board has determined that (i) Ms. Niland and Messrs. Jaska
and Nardelli are each "financially literate" as defined by the NYSE
and each qualify as an “audit committee financial expert” within
the definition established by the SEC and (ii) each member of the
Audit and Finance Committee is independent for purposes of Rule
10A-3 of the Exchange Act. For more information on the backgrounds
of these directors, see their biographical information under
“Proposal 1: Election of Directors” above. For more information on
the Audit and Finance Committee, see "Audit and Finance Committee
Report" and "Proposal 4: Ratification of Auditors"
below.
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2023 PROXY STATEMENT
15
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Compensation Committee |
2022 Meetings: 5 |
Gerhard Burbach (Chair), Kenneth Krieg, Leland Melvin and John
Richardson |
100% Independent |
The Compensation Committee has overall responsibility for our
executive and non-employee director compensation plans, policies
and programs. The Compensation Committee also oversees the annual
evaluation of our Chief Executive Officer, in conjunction with the
Governance Committee, and makes compensation recommendations to the
independent directors of the Board. The Compensation Committee
regularly reviews the design of our significant compensation
programs with the assistance of its compensation
consultant.
The Compensation Committee administers our Executive Incentive
Compensation Plan (the “EICP”), under which it awards annual
cash-based incentive compensation to our officers based on the
attainment of annual performance goals. Our Compensation Committee
approves, among other things, the target EICP compensation, as well
as the financial and safety goals for each officer. The Committee
recommends to the independent members of the Board individual goals
for EICP compensation for our Chief Executive Officer. Our Chief
Executive Officer establishes EICP individual goals for the
Presidents of principal operating groups and other executive
officers. The Compensation Committee also administers our 2010
Long-Term Incentive Plan (as amended, the “2010 LTIP”) and 2020
Omnibus Incentive Plan (the "2020 Plan," and together with the 2010
LTIP, the "Incentive Plans"), and may delegate some of its duties
(other than awards to directors and executive officers under the
Incentive Plans) to our Chief Executive Officer or other senior
officers. The Compensation Committee evaluates the Chief Executive
Officer's performance under the EICP and the Incentive Plans and
recommends payouts under such plans and other compensation changes
to the independent members of the Board.
The Board has determined that each member of the Compensation
Committee is (i) independent, as independence for compensation
committee members is defined by the NYSE, (ii) a "non-employee
director" for purposes of Section 16b-3 of the Exchange Act, and
(iii) an "outside director" for purposes of 162(m) of the Internal
Revenue Code.
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Executive Compensation Consultant
The Compensation Committee has the authority to retain, terminate,
compensate and oversee any compensation consultant ("Compensation
Consultant") or other advisors to assist the committee in the
discharge of its responsibilities. The Compensation Committee has
engaged Exequity LLP (“Exequity”) as its outside Compensation
Consultant. For 2022, Exequity assisted the Compensation Committee
with:
•advice
and analysis on the design, structure and level of executive and
director compensation and incentive plans;
•review
of market survey and proxy compensation data for
benchmarking;
•advice
on external market factors and evolving compensation trends;
and
•assistance
with regulatory compliance and changes regarding compensation
matters.
Exequity attends the Compensation Committee meetings, including
executive sessions. Although Exequity works with our management on
various matters for which the Compensation Committee is
responsible, our management does not direct or oversee the
retention or activities of Exequity.
See the “Compensation Discussion and Analysis” and “Compensation of
Executive Officers” sections of this proxy statement for
information about our 2022 executive officer compensation,
including a discussion of the role of the Compensation
Consultant.
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Compensation Committee Interlocks and Insider
Participation
No director who served as a member of the Compensation Committee
during the year ended December 31, 2022 (i) was during
such year, or had previously been, an officer or employee of BWXT
or any of our subsidiaries, or (ii) had any material interest
in a transaction of BWXT or a business relationship with, or any
indebtedness to, BWXT. None of our executive officers have served
as members of a compensation committee (or if no committee performs
that function, the board of directors) of any other entity that has
an executive officer serving as a member of our Board.
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16
2023 PROXY STATEMENT
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Governance Committee |
2022 Meetings: 4 |
James Jaska (Chair), Barbara Niland and Robert Nardelli |
100% Independent |
The Governance Committee has overall responsibility
to:
•establish
and assess director qualifications;
•review
the composition of the Board and recommend director nominees for
election;
•lead
the Board's oversight of ESG issues within the Company, including
diversity and inclusion;
•oversee
the annual self-evaluation process for our Board and Committees, as
well as the Chief Executive Officer in conjunction with our
Compensation Committee;
•evaluate
director orientation and director education programs;
and
•monitor
governance and cybersecurity risks.
This committee will consider individuals recommended by
stockholders for nomination as directors in accordance with the
procedures described under “Stockholders’ Proposals.”
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Director Evaluation and Nomination Process
Our Governance Committee is responsible for assessing the
qualifications, skills and characteristics of candidates for
election to the Board. In making this assessment, the Governance
Committee generally considers a number of factors, including each
candidate’s:
•professional
and personal experiences and expertise in relation to (i) our
businesses and industries and (ii) the experiences and
expertise of other Board members;
•integrity
and ethics in his/her personal and professional life;
•professional
accomplishments in his/her field;
•personal,
financial or professional interests in any competitor, customer or
supplier of ours;
•preparedness
to participate fully in Board activities, including active
membership on at least one Board committee and attendance at, and
active participation in, meetings of the Board and the committee(s)
of which he or she is a member, and any other personal or
professional commitments that would, in the Governance Committee’s
sole judgment, interfere with or limit his or her ability to do
so;
•willingness
to apply for and ability to obtain and retain an appropriate U.S.
Department of Defense or U.S. Department of Energy security
clearance; and
•ability
to contribute positively to the Board and any of its
committees.
The Board recognizes the benefits of a diverse board and requires
any search for potential director candidates to consider diversity
as to gender, ethnic background, education, viewpoint and personal
and professional experiences. Our Board includes three directors
(33% of the Board) who are diverse by gender, race or
ethnicity.
The Governance Committee solicits ideas for possible candidates
from a number of sources — including members of the Board, our
Chief Executive Officer and other senior level executive officers,
individuals personally known to the members of the Board and
independent director candidate search firms.
In addition, any stockholder may nominate one or more persons for
election as one of our directors at an annual meeting of
stockholders if the stockholder complies with the notice,
information and consent provisions contained in our Bylaws. See
“Stockholders’ Proposals” in this proxy statement and our Bylaws,
which may be found on our website at
www.bwxt.com
at “Investors — Corporate Governance.”
The Governance Committee will evaluate properly identified
candidates, including nominees recommended by stockholders. The
Governance Committee also takes into account the contributions of
incumbent directors as Board members and the benefits to us arising
from the experience of incumbent directors on the Board. Although
the Governance Committee will consider candidates identified by
stockholders, the Governance Committee has sole discretion whether
to recommend those candidates to the Board.
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2023 PROXY STATEMENT
17
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COMPENSATION OF DIRECTORS |
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COMPENSATION OF DIRECTORS
The table below summarizes the compensation earned by or paid to
our non-employee directors only for services as a member of our
Board for the year ending December 31, 2022. The Compensation
Committee of our Board, in coordination with its Compensation
Consultant, conducts an annual benchmarking analysis of our Board's
non-employee director compensation in comparison to two comparator
groups — our custom peer group used for executive compensation
benchmarking and a general industry reference group of 100
companies, for which the Company is the median based on revenue.
Directors who are also our employees do not receive any
compensation for their service as directors. For information
regarding the compensation of our Chief Executive Officer, our only
employee director, see “Compensation of Executive Officers” on the
following pages.
DIRECTOR COMPENSATION TABLE FOR 2022
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Name of Non-Employee Director |
Fees Earned or
Paid in Cash
(1)
|
Stock
Awards
(2)
|
All Other
Compensation
(3)
|
Total |
Jan A. Bertsch |
|
$ |
171,250 |
|
|
|
$ |
129,971 |
|
|
|
$ |
— |
|
|
|
$ |
301,221 |
|
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Gerhard F. Burbach |
|
105,000 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
234,971 |
|
|
James A. Jaska |
|
105,000 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
234,971 |
|
|
Kenneth J. Krieg |
|
96,250 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
226,221 |
|
|
Leland D. Melvin |
|
90,000 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
219,971 |
|
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Robert L. Nardelli |
|
90,000 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
219,971 |
|
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Barbara A. Niland |
|
113,750 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
243,721 |
|
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John M. Richardson |
|
90,000 |
|
|
|
129,971 |
|
|
|
— |
|
|
|
219,971 |
|
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(1)See
“Fees Earned or Paid in Cash” below for a discussion of the amounts
reported in this column.
(2)See
“Stock Awards” below for a discussion of the amounts reported in
this column.
(3)See
“All Other Compensation” below for a discussion of the amounts that
may be reported in this column.
During 2022, non-employee director compensation generally consisted
of cash and equity. The compensation of our non-employee directors
under our current non-employee director compensation program is
described in more detail below.
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Annual Director Compensation (All amounts in cash, except stock
award) |
Amount |
Retainer for Non-Employee Directors |
$ |
90,000 |
|
Stock Award for Non-Employee Directors |
130,000 |
|
Independent Board Chair |
100,000 |
|
Lead Independent Director (if appointed) |
25,000 |
|
Chair of the Audit and Finance Committee |
25,000 |
|
Chair of the Compensation Committee |
20,000 |
|
Chair of the Governance Committee |
15,000 |
|
Fees Earned or Paid in Cash. Under
our current director compensation program, non-employee directors
are eligible to receive the above annual retainer amounts, paid in
quarterly installments (pro-rated for partial terms). Under our
Supplemental Executive Retirement Plan (as amended and restated,
“SERP”), directors may elect to defer the payment of up to 100% of
their annual retainer and fees. Amounts elected to be deferred are
credited as a bookkeeping entry into a notional account, which we
refer to as a deferral account. The balance of a director’s
deferral account consists of deferral contributions made by the
director and hypothetical credited gains or losses attributable to
investments elected by the director, or by our Compensation
Committee if the director fails to make investment elections.
Directors are 100% vested in their deferral accounts at all times.
Ms. Bertsch and Messrs. Jaska, Krieg, Melvin and Nardelli elected
to defer 100% of their cash retainer in 2022. No other directors
made a deferral election with respect to their cash retainer in
2022. Amounts reported in the Director Compensation Table include
amounts deferred in 2022.
18
2023 PROXY STATEMENT
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COMPENSATION OF DIRECTORS |
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Stock Awards. In
addition to the cash payments provided to our directors, each
non-employee director was entitled to receive a number of
restricted stock units equal to $130,000 (prorated by quarter for
partial terms) divided by the closing price of our common stock on
the grant date, rounded down to the nearest whole share. The awards
of restricted stock units were granted under our 2020 Plan and
vested immediately on the date of grant. Directors are required to
retain shares equivalent to five times (5x) the annual cash
retainer pursuant to our stock ownership requirements. As a result,
all of our non-employee directors own equity in the
Company.
The amounts reported in the “Stock Awards” column represent the
grant date fair value computed in accordance with FASB ASC Topic
718. Grant date fair values are determined using the closing price
of our common stock on the date of grant. Each non-employee
director received an annual equity grant of 2,561 restricted stock
units on May 3, 2022 with a grant date fair value of $129,971 based
on the closing price of our common stock of $50.75 per share. There
were no unvested stock awards or unexercised option awards (whether
or not exercisable) held by the non-employee directors as of
December 31, 2022. No option awards were granted to directors
in 2022.
Under our Incentive Plan, directors may elect to defer payment of
all or a portion of their stock awards. Ms. Bertsch and Messrs.
Burbach, Jaska, Krieg, Nardelli, Melvin and Richardson each elected
to defer 100% of their 2022 stock awards. No other directors made a
deferral election with respect to their stock awards in 2022.
Amounts reported in the Director Compensation Table include amounts
deferred in 2022.
All Other Compensation.
We have a travel and reimbursement policy pursuant to which we
reimburse directors for travel and other expenses incurred in
connection with business of the Board. The presence of a director’s
spouse may be appropriate or necessary at certain meetings,
conferences or other business-related functions. In those cases,
pursuant to our policy, we pay the travel, meals and other expenses
of the director’s spouse incurred while attending such functions.
Pursuant to our reimbursement policy, to the extent the expenses of
a spouse are imputed to the director as income, we will also
reimburse the director for the taxes resulting from any such
imputed income. In 2022, there were no incremental costs to the
Company to provide reimbursement for spousal travel, meals,
activities and other expenses under our policy.
2023 PROXY STATEMENT
19
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PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION |
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NAMED EXECUTIVE PROFILES
The following profiles provide summary information regarding the
experience of our named executive officers (our “Named
Executives”), including our Chief Executive Officer, Chief
Financial Officer and three other most highly compensated executive
officers who were employed by BWXT as of December 31, 2022.
The Named Executive profiles provide professional experience,
tenure with the Company and age as of the Annual
Meeting.
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Professional Experience |
Tenure with BWXT: 8 years |
•Mr. Geveden,
age 62, has served as President and Chief Executive Officer since
January 2017, and served as our Chief Operating Officer from
October 2015 until December 2016.
•Previously,
Mr. Geveden was Executive Vice President at Teledyne Technologies
Incorporated ("Teledyne"), a provider of electronic subsystems and
instrumentation for aerospace, defense and other uses. There he led
two of Teledyne's four operating segments since 2013, and
concurrently served as President of Teledyne DALSA, Inc., a
Teledyne subsidiary, since 2014. Mr. Geveden also served as
President and Chief Executive Officer of Teledyne Scientific and
Imaging, LLC (2011 to 2013) and President of both Teledyne Brown
Engineering, Inc. and Teledyne's Engineered Systems Segment (2007
to 2011).
•Mr.
Geveden is a former Associate Administrator of NASA, where he was
responsible for all technical operations within the agency's $16
billion portfolio and served in various other positions with NASA
in a career spanning 17 years.
•He
received his bachelor and masters degrees in physics from Murray
State University.
•Mr.
Geveden chairs the board of directors of TTM Technologies,
Inc.
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Rex D. Geveden
President, Chief Executive Officer and Director
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Professional Experience |
Tenure with BWXT: 3 years |
•Mr.
LeMasters, age 45, has served as our Senior Vice President and
Chief Financial Officer since November 2021. Prior to that, he
served as is our Senior Vice President and Chief Strategy Officer
since July 2020. Mr. LeMasters served on the Company’s Board of
Directors from July 2015 to April 2020.
•Prior
to joining BWXT, Mr. LeMasters was a Managing Director at Blue
Harbour, L.P., a multi-billion dollar investment firm, a position
he held since 2011. Prior to joining Blue Harbour Group, he was a
Founding Partner of Theleme Partners from 2009 to September 2011.
He also served as a Partner at The Children’s Investment Fund (TCI)
from 2008 to 2009 and a Vice President in the Relative
Value/Event-Driven Group at Highbridge Capital Management from 2005
to 2008. Mr. LeMasters began his career as an analyst at Morgan
Stanley & Co. in the Mergers and Acquisitions Group and
subsequently joined Forstmann Little & Co. as an
analyst.
•Mr.
LeMasters earned a bachelor of science from the University of
Pennsylvania and a masters of business administration from the
Harvard Business School.
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Robb A. LeMasters
Senior Vice President and Chief Financial Officer |
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Professional Experience |
Tenure with BWXT: 5 years |
•Mr.
McCabe, age 68, served as our Senior Vice President, General
Counsel, Chief Compliance Officer and Secretary from July 2018
through January 2023, when he transitioned to Special Advisor to
the CEO.
•Prior
to joining BWXT, Mr. McCabe served as Executive Vice President,
General Counsel, Chief Compliance Officer and Secretary (or similar
roles) of Orbital ATK, Inc. (and its predecessor, Orbital Sciences
Corporation) from 2014 to 2018.
•He
served as Senior Vice President, General Counsel and Secretary of
Alion Science and Technology Corp., an advanced engineering and
technology solutions provider, from 2010 to 2014. From 2008 to
2010, he was Executive Vice President and General Counsel, and
President of the federal business, of Braintech, Inc., an automated
vision system for industrial and military robots.
•Previously,
Mr. McCabe held legal roles with XM Satellite Radio, COBIS
Corporation and what is now AT&T Public Sector, and was CEO and
a member of the board of directors of COBIS Corporation (and its
predecessor, MicroBanx).
•Earlier
in his career, Mr. McCabe was an attorney in private
practice.
•Mr.
McCabe has a bachelor’s degree from Georgetown University and a
juris doctorate and masters of business administration from the
University of Notre Dame.
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Thomas E. McCabe
Former Senior Vice President, General Counsel, Chief Compliance
Officer and Secretary
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Professional Experience |
Tenure with BWXT: 1 year |
•Adm.
McCoy, age 66, has served as our President, Government Operations
since February 2022.
•He
has more than 35 years of leadership experience in shipyard
operations, nuclear industrial operations and senior engineering
positions in the U.S. Navy and private sector.
•Prior
to joining BWXT, Adm. McCoy served as president of Irving
Shipbuilding Inc. in Nova Scotia, Canada from 2013 to 2021, chief
engineer of the U.S. Navy from 2005 to 2008 and commander of the
Naval Sea Systems Command (NAVSEA) from 2008 to 2013.
•He
earned a bachelor degree in mechanical engineering from SUNY at
Stony Brook, a masters degree in mechanical engineering from the
Massachusetts Institute of Technology ("MIT"), an engineer's degree
(post masters) in naval architecture and marine engineering from
MIT, and a masters in business administration from Emory
University.
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Kevin M. McCoy
President, BWXT Government Group |
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20
2023 PROXY STATEMENT
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Professional Experience |
Tenure with BWXT: <1 year |
•Mr.
Duffy, age 55, has served as our Senior Vice President and Chief
Administrative Officer since August 2022.
•Prior
to joining BWXT, Mr. Duffy had served as senior vice president and
chief human resources and administrative officer for Harris
Corporation (now known as L3Harris Technologies) from 2012 to
2019.
•Prior
to that, Mr. Duffy held human resources leadership positions of
increasing responsibility for several business units within United
Technologies, including Sikorsky Aircraft, UTC Fire & Security,
Carrier Corporation, Hamilton Sundstrand and Pratt & Whitney,
from 1998 to 2012.
•He
holds a master’s degree in management and technology from
Rensselaer Polytechnic Institute and a bachelor’s degree in human
resources management from Muhlenberg College.
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Robert L. Duffy
Senior Vice President and Chief Administrative
Officer
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PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
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In accordance with Section 14A of the Exchange Act, we are
asking stockholders to approve an advisory resolution on our
executive compensation as reported in this proxy statement. Our
Board has adopted a policy to hold annual advisory votes on
executive compensation. It is our belief that our ability to hire,
retain and motivate employees is essential to the success of the
Company and its stockholders. Therefore, we generally seek to
provide reasonable and competitive compensation for our executives
with a substantial portion in the form of performance-based
compensation. |
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Accordingly, we submit the following resolution to stockholders at
the Annual Meeting:
RESOLVED, that the stockholders of BWX Technologies, Inc. approve,
on an advisory basis, the compensation of executives, as such
compensation is disclosed pursuant to Item 402 of Regulation
S-K in this proxy statement under the sections entitled
“Compensation Discussion and Analysis” and “Compensation of
Executive Officers.”
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EFFECT OF PROPOSAL
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Although the resolution to approve our executive compensation is
non-binding, it serves as an opportunity for us, our Board and
Compensation Committee to gain valuable stockholder feedback on our
executive compensation decisions and practices. Even in years when
the resolution is approved, the Board and Compensation Committee
retain discretion to change executive compensation from time to
time if they conclude that such a change would be in the best
interests of the Company and its stockholders. Our Board and
Compensation Committee value the opinions of stockholders on
important matters such as executive compensation and will carefully
consider the results of this advisory vote when evaluating our
executive compensation programs. |
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RECOMMENDATION AND VOTE REQUIRED
Our Board recommends that stockholders vote “FOR” the approval of
executive compensation. The proxy holders will vote all proxies
received "FOR" approval of this proposal unless instructed
otherwise. Approval of this proposal requires the affirmative vote
of a majority of our shares of common stock present in person or
represented by proxy at the Annual Meeting and entitled to vote on
this proposal. Because abstentions are counted as present for
purposes of the vote on this matter but are not votes “FOR” this
proposal, they have the same effect as votes “AGAINST” this
proposal. Broker non-votes will not have any effect on this
proposal.
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2023 PROXY STATEMENT
21
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COMPENSATION DISCUSSION AND ANALYSIS |
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (the “CD&A”) provides
detailed information and analysis regarding the compensation of our
Named Executives as reported in the Summary Compensation Table and
other tables located in the “Compensation of Executive Officers”
section of this proxy statement.
This CD&A is divided into four sections:
Section 1:
Executive Summary. In
this section, we highlight our company performance, key
compensation decisions and outcomes during 2022.
Section 2:
Compensation Structure.
In this section, we review our 2022 compensation philosophy,
elements and processes.
Section 3:
Compensation Analysis and Outcomes.
In this section, we review the elements of 2022 total direct
compensation, including annual base salary, annual incentive
compensation and long-term incentive compensation.
Section 4:
Other Benefits and Practices.
In this section, we review perquisites, post-employment
arrangements and other compensation-related practices.
SECTION 1: EXECUTIVE SUMMARY
2022 PERFORMANCE HIGHLIGHTS*
•Consolidated
revenue was over $2.2 billion, a 5% increase over the prior
year.
•Net
income and adjusted EBITDA were $238.6 million and $439.4 million,
respectively.
•GAAP
and non-GAAP earnings per share were $2.60 and $3.13,
respectively.
•In
2022, we returned $81.1 million to stockholders in the form of
dividends.
•As
of December 31, 2022, our backlog was $4.1 billion.
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* Please refer to Appendix A, "Reconciliation of Reported (GAAP) to
Adjusted (Non-GAAP) Results," for a reconciliation of adjusted
results, including adjusted EBITDA and non-GAAP earnings per share,
to reported results.
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TOTAL STOCKHOLDER RETURN
The following graph depicts the cumulative total stockholder return
of BWXT for the one, three and five years ended December 31, 2022
relative to those of the S&P 500 Index ("S&P 500"), the
S&P Aerospace and Defense Select Index ("S&P A&D
Select") and our custom compensation peer group for 2022 (see
below).
One-Year, Three-Year and Five-Year Total Stockholder Return as of
December 31, 2022(1)
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(1) |
Measured by dividing (i) the sum of the cumulative amount of
dividends for the measurement period, assuming dividend
reinvestment, and the difference between the applicable share price
at the end and the beginning of the measurement period by (ii) the
share price at the beginning of the measurement period. |
22
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
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STOCKHOLDER ENGAGEMENT
Our executive compensation plan for 2022 is consistent with our
historical pay-for-performance approach that incorporates feedback
from our stockholder outreach efforts and metrics designed to drive
the performance of BWXT. We engage directly with our
stockholders on executive compensation, governance, environmental,
social and other topics. See "Stockholder Engagement" above for
more information on our engagement process.
Based on feedback from our stockholders, our Compensation Committee
continued with a market-based, pay-for-performance structure for
our executive compensation program and also enhanced the
performance-based components of the program. In addition, the
Compensation Committee incorporated a double-trigger vesting
requirement for equity awards in the event of a change in control
in our 2020 Omnibus Incentive Plan ("2020 Plan"), approved by
stockholders at our 2020 Annual Meeting. We have received feedback
from stockholders regarding the use of ESG metrics in our incentive
plans. The Compensation Committee has included safety metrics in
our annual incentive plan each year since our spin-off in 2015 and
will evaluate other possible ESG metrics.
As a result of discussions with stockholders as part of the
Company's annual outreach program, in February 2022 the
Compensation Committee included total shareholder return as a
performance metric in the 2022 performance restricted stock unit
grants to participants, including the Named Executives, in order to
align Named Executive and stockholder interests.
STRONG COMPENSATION GOVERNANCE PRACTICES
The following are practices we follow to incentivize performance
and foster strong corporate governance on our compensation
program:
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WHAT WE DO: |
WHAT WE DON’T DO: |
ü
Pay for Performance.
Significant emphasis on incentive- and performance-based
compensation, with 60% of annual long-term incentive awards
comprised of performance RSUs.
ü
Compensation Program Responsive to Stockholder Feedback.
We seek stockholder input and perspective on our compensation
program.
ü
Benchmarking to Similarly Sized Companies.
We avoid benchmarking executive pay to oversized peers by ensuring
that the market data reflects companies of similar revenue
size.
ü
Clawbacks.
We can recover compensation under our annual and long-term
incentive plans in appropriate circumstances.
ü
“Double Trigger” Vesting in a Change in Control.
ü
Limited Perquisites and Tax Reimbursements.
ü
Stock Ownership Requirements.
We maintain robust requirements for our executive officers and
directors.
ü
Independent Compensation Consultant.
|
X
No Hedging or Pledging.
We do not permit hedging or pledging of our securities by our
executive officers and directors.
X
No Excise Tax Gross-ups.
There are no tax gross-ups on change-in-control
benefits.
X
No Employment Agreements for our Executive Officers.
X
No Excessive Risk-Taking in Incentive Compensation.
Our annual and long-term incentive programs use multiple
performance metrics and capped pay-outs and other features intended
to minimize the incentive to take overly risky
actions.
X
No Guaranteed Minimum Pay-out for our Annual or Long-term
Performance-based Awards.
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2023 PROXY STATEMENT
23
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COMPENSATION DISCUSSION AND ANALYSIS |
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2022 EXECUTIVE COMPENSATION PLAN DESIGN
Following a comprehensive review of our executive compensation
program with Exequity, our executive compensation consultant, we
made the following design changes to the 2022 executive
compensation program: (i) adding total shareholder return ("TSR")
as a metric for our long-term incentive plan, and (ii) replacing
adjusted earnings per share with adjusted earnings before interest,
tax, depreciation and amortization ("EBITDA") as a metric in our
long-term incentive plan. The following are some of the key design
attributes and components of BWXT's 2022 incentive
program.
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2022 Executive Compensation Plan Design Overview |
Pay Philosophy |
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Base salary, annual incentive and long-term incentive compensation
designed to attract and retain leadership talent and incent a
strong focus on operating results and alignment with stockholder
interests |
Annual Incentive Program |
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90% financial performance (75% operating income and 15% operating
cash flow) and 10% individual performance (including 3% for safety)
weighting of the total award opportunity |
Long-Term Incentive Program |
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40% time-based restricted stock units and 60% performance RSUs with
performance based on 40% adjusted EBITDA, 40% return on invested
capital and 20% relative TSR performance metrics to align
incentives with strategic initiatives to drive growth, promote
efficient capital management and align with shareholder
returns |

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Financial Performance Metrics
for Performance-Based RSUs |
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Financial Performance Metrics
for Annual Incentive Awards |
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40% Adjusted EBITDA
40% Return on Invested Capital
20% Relative Total Shareholder Return |
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75% Operating Income
15% Operating Cash Flow |
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24
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
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SECTION 2: COMPENSATION STRUCTURE
PHILOSOPHY AND OBJECTIVES OF EXECUTIVE COMPENSATION
We seek to provide reasonable and competitive compensation to
executives through programs structured to:
•attract
and retain well-qualified executives;
•incent
and reward short- and long-term company performance, as well as
individual contributions; and
•align
the interests of our executives with those of our
stockholders.
We also subscribe to a “pay-for-performance” philosophy when
designing executive compensation. This means a substantial portion
of an executive’s target compensation should be “at risk” and
performance-based, where the value of one or more elements of
compensation is tied to the achievement of pre-determined financial
and/or other measures we consider important drivers in the creation
of stockholder value. Our compensation philosophy requires that a
substantial portion of total compensation be designed to
appropriately balance short- and long-term performance incentives
to align our Named Executives’ interests with those of our
stockholders.
ELEMENTS OF EXECUTIVE COMPENSATION
To support our compensation philosophy and objectives, our
executive compensation program consists of base salary, annual
incentives and long-term incentives, which we refer to as Total
Direct Compensation. In addition to the elements of Total Direct
Compensation, we also offer other benefits and practices consistent
with the market. See “Section 3: Other Benefits and Practices” on
the following pages of this CD&A for additional information on
these benefits and practices.
The Compensation Committee does not set a specific target
allocation among the elements of total direct compensation;
however, long-term incentive compensation typically represents the
largest single element of target total direct compensation, and
performance-based compensation constitutes the substantial majority
of a Named Executive’s target total direct
compensation.
The following table and chart reflect the key elements and
proportion of each Named Executive’s target total direct
compensation for 2022, the rationale for each element, and the
financial performance metrics selected for our 2022 annual
incentive awards.
2022 TOTAL DIRECT COMPENSATION ELEMENTS
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Element |
Description |
Primary Design Objectives |
Base Salary
|
•Annual
fixed cash compensation
|
•Attract
and retain leadership talent
•Compensate
for role and responsibilities
|
Annual
Incentive |
•Annual
incentive award based on 90% financial performance goals and 10%
individual goals, which includes safety goals
•Financial
performance metrics include:
◦Operating
income (75%) and
◦Operating
cash flow (15%)
•Financial
results determine payout multiplier
•No
payout unless at least threshold operating income goal is
achieved
|
•Emphasize
operating results by heavily weighting financial
performance
•Select
financial performance metrics that align our short-term performance
with our long-term performance objectives
•Align
compensation with safety, which we view as a key component for the
success of our business
•Retain
individual performance component to ensure focus on specific goals
unique to each executive's role and responsibilities
|
Long-Term
Incentive
|
•Long-term
incentive grant weighted towards performance,
including:
◦40%
restricted stock units with 3-year ratable vesting
◦60%
performance-based restricted stock units with 3-year cliff vesting
based on 40% adjusted EBITDA, 40% ROIC and 20% relative
TSR
|
•Alignment
with stockholder interest
•Promote
executive focus on long-term company performance
•Utilize
performance metrics that are meaningful drivers of long-term value
creation and align with shareholder returns
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2023 PROXY STATEMENT
25
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COMPENSATION DISCUSSION AND ANALYSIS |
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2022 TOTAL DIRECT COMPENSATION MIX
COMPENSATION PROGRAM RISK MITIGATION
We believe our compensation program is designed to retain and
motivate our Named Executives at appropriate levels of business
risk, which is generally mitigated through the following features
of the compensation program.
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Program Elements Mitigating Risk |
Reasonable and Balanced Compensation Program
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Using the elements of total direct compensation, the Compensation
Committee seeks to provide compensation opportunities for Named
Executives targeted at or near the median compensation through
benchmarking. As a result, we believe the total direct compensation
of Named Executives provides reasonable compensation opportunities
with an appropriate mix of cash and equity, annual and long-term
incentives and performance metrics.
|
Emphasis on Long-Term Incentive over Annual Incentive
Compensation
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Long-term incentive compensation typically makes up a larger
percentage of a Named Executive’s target total direct compensation
than annual incentive compensation. Incentive compensation helps
drive performance and align the interests with those of
stockholders. By tying a significant portion of total direct
compensation to long-term incentives, typically over a three-year
period, we promote longer-term perspectives regarding Company
performance.
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Long-Term Incentive Compensation subject to Forfeiture for Bad
Acts
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The Compensation Committee may terminate any outstanding stock
award if the recipient (i) is convicted of a misdemeanor involving
fraud, dishonesty or moral turpitude or a felony, or (ii) engages
in conduct that adversely affects or may reasonably be expected to
adversely affect the business reputation or economic interests of
the Company.
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Annual and Long-Term Incentive Compensation subject to
Clawback
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Incentive compensation awards include provisions allowing us to
recover excess amounts paid to individuals who knowingly engaged in
a fraud resulting in a restatement.
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Linear and Capped Incentive Compensation Payouts |
|
The Compensation Committee establishes financial performance goals
that are used to plot a linear payout formula for annual and
long-term incentive compensation to avoid an over-emphasis on
short-term decision making. The maximum payout for both the annual
and long-term incentive compensation is capped at 200% percent of
target. |
Use of Multiple and Appropriate Performance Metrics
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We use multiple performance metrics to avoid having compensation
opportunities overly weighted toward the performance result of a
single measure. In general, our incentive programs are based on a
mix of financial, safety and individual performance.
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Stock Ownership Guidelines
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Our executive officers, including Named Executives, and directors
are subject to stock ownership guidelines that help to promote
longer-term perspectives and align the interests with those of our
stockholders. |
DETERMINING NAMED EXECUTIVE COMPENSATION
The following is a summary of responsibilities and data sources
used by our Compensation Committee to determine our executive
compensation program.
26
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
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How Compensation Decisions Are Made |
Compensation Committee's Role |
•The
Compensation Committee establishes the target total direct
compensation of our executives and administers other benefit
programs.
•The
Compensation Committee reviews the design of the program and
establishes the performance metrics and goals under the incentive
programs.
•The
Compensation Committee evaluates incentive compensation payouts to
ensure they are reflective of the Company and individual
performance target attainment.
|
Compensation Planning Process |
•Members
of the Compensation Committee and our management team evaluate the
advisory vote on executive compensation and stockholder feedback
regarding our compensation programs and governance
practices.
•We
engage with and solicit stockholder feedback regarding executive
compensation, ESG and other matters, which are reported to the
Board and Committees.
•The
Compensation Committee discusses plan design alternatives and
considerations with the executive compensation
consultant.
•The
Compensation Committee reviews existing plan performance results to
determine if changes are needed.
•Annual
and long-term compensation plan design and performance metrics and
targets are approved.
|
How Our Compensation Committee Sets Annual and Long-Term Incentive
Performance Goals |
Determining
Financial Goals |
•Our
Compensation Committee strives to set financial performance goals
that are rigorous enough to motivate our executives and our
businesses to achieve meaningful increases over prior year results,
but within reasonably obtainable parameters to discourage pursuit
of excessively risky business strategies.
•For
our 2022 annual incentive plan, the committee set financial
performance goals as follows:
◦Operating
Income (75%):
The committee set the target goal based on the Company's 2022
forecast.
◦Operating
Cash Flow (15%):
The committee set the target goal based on the Company's 2022
operating cash flow forecast.
•The
committee set our 2022 long-term incentive plan financial
performance goals as follows:
◦40%
Adjusted Earnings Before Income Tax Depreciation and Amortization
("EBITDA"):
The target goal was set to focus on profitability and operational
performance that aligns with our mid-term public
guidance.
◦40%
Return on Invested Capital ("ROIC"):
The target goal was established to be higher than the average
return on invested capital of our compensation peer group and
historical internal target performance.
◦20%
Relative Total Shareholder Return ("TSR"):
The target goal was intended to align with long-term performance
for shareholders (measured by cumulative TSR with dividends
reinvested) relative to the peer group to minimize the impact of
general market movements.
|
Determining Safety Goals |
•To
promote rigor and continuous improvement in our safety goals, the
committee set our primary safety goals for Total Recordable
Incident Rate ("TRIR") and Days Away, Restricted or Transferred
("DART") to incentivize continuous focus on our safety
performance.
•There
is no payout on a safety target if our performance does not meet or
exceed the goal for 2022.
|
Resources and Advisers to Our Compensation Committee |
Independent
Outside Consultant |
•Provides
the Compensation Committee with information and advice on the
design, structure and level of executive and director
compensation.
•Attends
Compensation Committee meetings, including executive
sessions.
•Engaged
and directed by the Compensation Committee.
•Works
directly with our Compensation Committee on the compensation of our
Named Executives, including our Chief Executive
Officer.
•Exequity
served as executive compensation consultant to the Compensation
Committee for 2022.
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2023 PROXY STATEMENT
27
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COMPENSATION DISCUSSION AND ANALYSIS |
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Management |
•Our
Human Resources department, in consultation with the Compensation
Committee chair and Exequity, prepares information for the
Compensation Committee, including market data provided by Exequity
and recommendations of our Chief Executive Officer regarding
compensation of other executives.
•Our
Chief Executive Officer and senior Human Resources personnel attend
committee meetings and, as requested by the Compensation Committee,
participate in deliberations on executive compensation (except in
respect to their own compensation) and select executive
sessions.
|
Stockholder
Outreach and
Stockholder Vote
on Executive
Compensation |
•We
provide our stockholders with the opportunity to cast an annual
advisory vote on the compensation of our Named
Executives.
•96.9%
of the votes cast at our 2022 Annual Meeting of Stockholders on the
executive compensation proposal were voted in favor of our
executive compensation.
•Although
our stockholders expressed strong support for our executive
compensation proposals in the past three years, members of our
management team have conducted and plan to continue to conduct
outreach programs with our stockholders to discuss executive
compensation, corporate governance, environmental, social and other
matters. See "Stockholder Outreach" under "Corporate Governance"
above for more information.
•Our
Compensation Committee considers stockholder feedback when
selecting financial performance metrics and the mix of equity award
vehicles. Our stockholder engagement efforts have informed our
committee’s decision to select relative TSR as a long-term
performance metric.
|
How We Set Target Compensation |
Target +/-15% of
Median Compensation |
•We
believe compensation of our Named Executives is competitive at or
near the median compensation paid for comparable
positions.
•We
generally seek to set target compensation for each element of total
direct compensation and in the aggregate at approximately +/-15% of
the median compensation determined through benchmarking (referred
to as “median” or “median range” in this CD&A).
•The
Compensation Committee may adjust a Named Executive’s target
compensation, including setting it outside the median range, for a
variety of reasons, including:
◦specific
responsibilities;
◦performance;
◦tenure;
◦experience;
◦succession
planning;
◦internal
equity; and
◦other
factors or situations that are not typically captured by looking at
standard market data.
•Compensation
actually earned by a Named Executive may be outside the median
range targeted, depending on the reasons listed above, achievement
of performance goals, fluctuations in our stock price and/or
satisfaction of vesting conditions.
|
How We Benchmark Total Direct Compensation |
Primary Benchmark:
Custom Peer Group
Proxy Data |
•To
help determine 2022 target compensation for our Named Executives,
the Compensation Committee reviewed proxy data for our custom peer
group, which serves as the principal reference group.
•The
custom peer group consisted of 15 companies with whom we
compete for executive talent from the aerospace and defense and
other related industries. The companies comprising our custom peer
group for the 2022 review are listed at the end of this
CD&A.
•The
committee also utilizes the custom peer group to benchmark the
design of our incentive compensation.
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28
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
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Secondary Benchmark:
Willis Towers Watson General Industry Executive Compensation
Survey |
•In
addition, the Compensation Committee reviewed Willis Towers Watson
survey data as a secondary benchmark for reviewing Named Executive
compensation.
•Survey
data sourced from Willis Towers Watson’s 2021 General Industry
Executive Compensation Survey with a focus on companies with
revenues between $1B and $3B.
|
Annual Review |
•The
Compensation Committee reviewed each element of target compensation
at the 25th, 50th (median) and 75th percentiles of the two
benchmark groups to determine current positioning and whether any
changes were warranted for 2022 target compensation.
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SECTION 3: COMPENSATION ANALYSIS AND OUTCOMES
2022 TARGET TOTAL DIRECT COMPENSATION OVERVIEW
The table below shows the 2022 target total direct compensation for
each Named Executive.
2022 TARGET TOTAL DIRECT COMPENSATION
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Named Executive |
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Annual
Base Salary
($) |
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Annual
Incentive
($) |
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Long-Term
Incentive
($) |
|
Target Total Direct
Compensation
($) |
Rex D. Geveden |
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925,000 |
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925,000 |
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3,500,000 |
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5,350,000 |
Robb A. LeMasters |
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500,000 |
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350,000 |
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700,000 |
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1,550,000 |
Thomas E. McCabe(1)
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545,000 |
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354,250 |
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600,000 |
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1,499,250 |
Kevin M. McCoy(2)
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735,000 |
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477,750 |
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350,000 |
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1,562,750 |
Robert L. Duffy(3)
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400,000 |
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200,000 |
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— |
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600,000 |
(1)
Mr. McCabe served as our Senior Vice President, General Counsel and
Secretary until January 2, 2023 when he transitioned to Special
Advisor to the CEO. Pursuant to the terms of his Transition
Agreement, he forfeited any annual and long-term incentive payouts
to which he was entitled to in exchange for a lump-sum
payment.
|
(2)
Adm. McCoy was appointed President, Government Operations on
February 18, 2022.
|
(3)
Mr. Duffy joined the Company as Senior Vice President and Chief
Administrative Officer on August 29, 2022 after the annual
long-term incentive grant. He received a $1,200,000 sign-on
restricted stock unit grant at that time.
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ANNUAL BASE SALARY
Our Compensation Committee generally reviews base salaries of our
Named Executives on an annual basis with any adjustments to base
salary effective April 1 of each year, with occasional reviews
during the year to reflect promotions, increases in
responsibilities or other compensation-related events. Set
forth below are the base salaries for each of our Named Executives,
as determined by the Compensation Committee based on its review of
comparative market data for each Named Executive. There were
no base salary adjustments made in 2022 for the Named
Executives.
2022 ANNUAL BASE SALARY
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Named Executive |
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2022 Base Salary ($) |
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Mr. Geveden |
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925,000 |
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Mr. LeMasters |
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500,000 |
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Mr. McCabe |
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545,000 |
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Adm. McCoy(1)
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735,000 |
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Mr. Duffy(2)
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400,000 |
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(1)
Adm. McCoy was appointed President, Government Operations on
February 18, 2022.
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(2)
Mr. Duffy joined the Company as Senior Vice President and Chief
Administrative Officer on August 29, 2022.
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ANNUAL INCENTIVE COMPENSATION
Overview and Design. We
pay annual incentives to drive the achievement of key business
results and to recognize individuals based on their contributions
to those results. The Compensation Committee administers cash-based
annual incentive compensation for our Named Executives through our
Executive Incentive Compensation Plan (“EICP”), which was
previously approved by our stockholders.
2023 PROXY STATEMENT
29
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COMPENSATION DISCUSSION AND ANALYSIS |
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Analysis of Target Percentage. The
Compensation Committee set target percentages indicated in the
table below during its annual review of executive compensation in
February 2022 (and for Mr. Duffy in August 2022 in connection with
his appointment). The target percentages were not changed for the
Named Executives during 2022.
2022 TARGET ANNUAL INCENTIVE COMPENSATION
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Named Executive |
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EICP
Target %(1)
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Mr. Geveden |
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100% |
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Mr. LeMasters |
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70% |
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Mr. McCabe |
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65% |
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Adm. McCoy |
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65% |
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Mr. Duffy(2)
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50% |
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(1)Each
Named Executive’s EICP target compensation was calculated by
multiplying the applicable EICP Target % by the applicable
projected earnings from salary during 2022. See “Compensation of
Executive Officers – Summary Compensation Table” for each Named
Executives’ earnings from salary during 2022.
(2)As
a result of his mid-year appointment, Mr. Duffy's EICP target was
based on his earnings from August 29, 2022 through December 31,
2022.
The following provides details on the performance metrics selected
by our Compensation Committee for our 2022 EICP.
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2022 EICP Performance Metrics |
Financial (90%)
Operating Income (75%)
Operating Cash Flow (15%)
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Rationale: Operating
income is our primary measure of profitability, which we believe is
a strong driver of shareholder value; Operating cash flow
promotes management focus on strong cash flow generation to support
our balanced capital deployment strategy between dividends, mergers
and acquisitions and share repurchases.
Key Features: No
pay-out unless at least threshold BWXT consolidated operating
income performance goal is achieved; financial performance
determines the maximum amount a Named Executive can
earn.
Payout Calculation:
Ranges from 0% - 200% based on achievement of goals; result is
referred to as the “Financial Multiplier.”
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2022 EICP Performance Metrics (cont'd) |
Individual (10%)
Safety
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Rationale: Allows
our CEO (or the Compensation Committee, in the case of Mr. Geveden)
to differentiate incentive pay-outs among our Named Executives by
exercising discretion on the target amount of each Named
Executive’s individual performance component, based on the
assessment of each Named Executive’s individual performance during
2022.
Safety Component: A
key component of the success of our business is safety, and TRIR
and DART performance targets are included in the individual goal to
focus attention on day-to-day operational safety by measuring (i)
the rate of recordable workplace injuries and (ii) the severity of
injuries, respectively. There is a deduction for each of the TRIR
and DART safety metrics if the target is not achieved.
Payout Calculation: Ranges
from 0% - 200%, multiplied by the “Financial Multiplier;” referred
to as the “Individual Performance Result.”
|
Summary of EICP Payouts. The
total payout percentage represents the combined results of
applicable financial, individual and safety performance for each
Named Executive. The amount paid under the EICP for 2022 can be
illustrated by the following formula:
Total Cash Award = Earnings from
Salary x Target % x Total
Payout % (0 – 200%)
The Total Payout % is the sum of the Financial Multiplier and
Individual Performance Result.
At the time the Compensation Committee established the 2022
financial goals, it designed the 2022 annual incentive plan to
exclude from actual operating income and operating cash flow
results the effect of certain pre-established items that it
believed would not reflect operating performance, including
(1) expenses associated with
30
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
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restructuring activity or asset acquisitions or dispositions,
(2) pension accounting mark-to-market losses, (3) losses
in respect of legal proceedings, divestitures, and impairment to
assets, (4) acquisition-related amortization, (5) currency
fluctuations, (6) acts of God, and (7) other unusual or
non-recurring items.
Regardless of the level of performance achieved, the Compensation
Committee retains the right to adjust the amount of annual
incentive compensation payable in its discretion.
2022 EICP Performance Goals.
The Compensation Committee established the following financial and
safety performance goals for 2022.
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2022 EICP FINANCIAL GOALS
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Metric (Weight) |
Threshold Goal
50% Payout
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Target Goal
100% Payout
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Maximum Goal
200% Payout
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Actual(1)
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Operating
Income(2)
(75%)
|
$287.3 million |
$359.1 million |
$430.9 million |
$367.5 million |
Operating Cash Flow (15%) |
$207.0 million |
$258.7 million |
$310.4 million |
$250.6 million |
(1)
See "Analysis of Financial Performance" below for more
information.
|
(2)
The financial performance for all Named Executives is based on BWXT
consolidated financial results, except for Adm. McCoy, for whom
operating income (75% of 2022 EICP) is measured 40% on BWXT
consolidated results and 35% on the Government Operations segment
results.
|
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|
|
|
|
2022 SAFETY GOALS
|
Safety Metric |
Threshold |
Target |
Maximum |
Actual |
TRIR |
0.86 |
0.68 |
0.58 |
0.67 |
DART |
0.32 |
0.26 |
0.22 |
0.29 |
Total Safety Multiplier |
0.50 |
1.00 |
2.00 |
0.93 |
2022 EICP Performance Results. The
following table summarizes the level of financial performance and
safety results, included in the individual goals, relative to the
target goals before the application of negative discretion by the
Compensation Committee.
Analysis of Financial Performance. The
adjusted financial performance results for the 2022 performance
period achieved a 108% payout level for each of our Named
Executives (99% for Adm. McCoy). These results included mandatory,
pre-established adjustments from our GAAP operating income and
operating cash flow results for the items discussed on the previous
page.
Analysis of Safety and Individual Performance. The
table above sets forth the target goals applicable to each safety
metric and the level of achievement in 2022. The Company exceeded
its TRIR target, but was below its DART target in 2022, which
resulted in a payout at 100% of target for this component of the
2022 EICP.
2023 PROXY STATEMENT
31
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COMPENSATION DISCUSSION AND ANALYSIS |
|
Our Named Executives are also evaluated on pre-established
individual performance goals. For Mr. Geveden, the
Compensation Committee evaluates his individual performance based
on the following criteria: (1) leadership; (2) strategic
planning; (3) financial results; (4) succession planning; (5)
communications; and (6) Board relations. Our other Named
Executives are evaluated on performance goals specific to their
respective roles and responsibilities.
Analysis of EICP Payouts.
The following table indicates the amount earned under the EICP by
our Named Executives based for the 2022 performance period (January
1, 2022 – December 31, 2022). For each Named Executive, the
performance result (the "Weighted Performance Percentage")
established the maximum eligible amount of EICP for 2022 (the
"Eligible Amount"), subject to the final discretion of the
Compensation Committee. Mr. McCabe transitioned to Special Advisor
to the CEO on January 2, 2023, and pursuant to the terms of his
Transition Agreement, was not eligible to receive a 2022 EICP
payout.
2022 EICP PAYOUTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Geveden |
Mr. LeMasters |
Mr. McCabe(1)
|
Adm. McCoy(2)
|
Mr. Duffy |
Earnings from Salary |
$ |
925,000 |
|
$ |
500,000 |
|
$ |
545,000 |
|
$ |
735,000 |
|
$ |
137,500 |
|
Target Percentage |
100 |
% |
70 |
% |
65 |
% |
65 |
% |
50 |
% |
Weighted Performance Percentage |
108 |
% |
108 |
% |
— |
% |
99 |
% |
108 |
% |
Eligible Amount(3)
|
$ |
999,000 |
|
$ |
378,000 |
|
$ |
— |
|
$ |
472,973 |
|
$ |
74,250 |
|
Total 2022 EICP Payout(4)
|
$ |
999,000 |
|
$ |
378,000 |
|
$ |
— |
|
$ |
472,973 |
|
$ |
74,250 |
|
|
|
|
|
|
|
(1) |
Mr. McCabe entered into a Transition Agreement that provided him a
lump sum payment in lieu of certain annual and long-term incentive
payouts. |
(2) |
The financial performance for all Named Executives is based on BWXT
consolidated financial results, except for Adm. McCoy, for whom
operating income (75% of 2022 EICP) is measured 40% on BWXT
consolidated results and 35% on Government Operations segment
results. |
(3) |
Amounts may not foot due to rounding. |
(4) |
Amount is based upon financial and individual, including safety and
performance results. |
LONG-TERM INCENTIVE COMPENSATION
Value of 2022 Target Long-Term Incentive
Compensation. The
following table shows the 2022 target long-term incentive
compensation for each Named Executive.
2022
TARGET LONG-TERM INCENTIVE COMPENSATION
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Named Executive |
|
Target Value |
|
|
|
|
Mr. Geveden |
|
|
$ |
3,500,000 |
|
|
|
|
|
|
|
|
Mr. LeMasters |
|
|
700,000 |
|
|
|
|
|
|
|
|
Mr. McCabe(1)
|
|
|
600,000 |
|
|
|
|
|
|
|
|
Adm. McCoy |
|
|
350,000 |
|
|
|
|
|
|
|
|
Mr. Duffy(2)
|
|
|
— |
|
|
|
|
|
|
|
|
(1) Mr. McCabe served as our Senior Vice President, General Counsel
and Secretary until January 2, 2023 when he transitioned to Special
Advisor to the CEO. Pursuant to the terms of his Transition
Agreement, he forfeited this long-term incentive award and other
consideration in exchange for a lump-sum payment. |
|
|
|
|
|
|
(2) Mr. Duffy joined the Company as Senior Vice President and Chief
Administrative Officer on August 29, 2022 after the annual
long-term incentive grant. He received a $1,200,000 sign-on
restricted stock unit grant at that time. |
|
|
|
|
|
|
2022 Target Long-Term Incentive Award Types. In
determining the type and mix of stock granted to our Named
Executives, the Compensation Committee seeks to maintain a strong
correlation between pay and performance while promoting retention
of key employees. The Compensation Committee allocated 2022
long-term incentive compensation as follows.
32
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
|
2022 RESTRICTED STOCK UNITS
When granting stock, the Compensation Committee targets a dollar
value rather than a number of shares or units. The target value was
set by the Compensation Committee as previously discussed. The fair
market value was the closing price of our common stock on the NYSE
on the date of grant.
For more information regarding the 2022 restricted stock units, see
the "Grants of Plan-Based Awards" table under “Compensation of
Executive Officers” below.
2022 PERFORMANCE RESTRICTED STOCK UNITS
|
|
|
|
|
|
Attributes |
Rationale |
•Vest
between 0% and 200% of the amount of initial shares granted
depending on adjusted EBITDA performance (40% weighting), average
ROIC performance (40% weighting) and relative TSR (20% weighting)
attained during performance period.
•Performance
period runs from January 1, 2022 through December 31,
2024.
•For
each performance metric, results at the threshold, target and
maximum goals produce vesting at 50%, 100% and 200%, respectively,
of the initial performance restricted stock units
granted.
•Vesting
for performance results between threshold and target or target and
maximum is determined by linear interpolation. No amount will vest
with respect to any performance metrics unless threshold results
are attained.
|
•We
believe that over the long-term, there is a high degree of
correlation between our adjusted EBITDA, as a measure of
profitability and our stock price performance. The addition of
relative TSR was further designed to align incentive payouts with
stockholder value creation.
•Accordingly,
we use adjusted EBITDA in long-term stock-based compensation to
more closely align our goals with stockholder
interests.
•We
believe using different performance metrics than in the annual
incentive compensation program reduces the focus on a single metric
at the expense of others, helping to mitigate risk related to
incentive compensation.
•Including
ROIC helps promote management focus on asset
utilization.
|
The Compensation Committee sets target and maximum goals based on
the sum of the adjusted EBITDA estimates for each year of the
Performance Period. To complement financial results under our
annual incentive compensation program, we derived the estimates
from the prior year adjusted EBITDA in 2022 and assumed growth
rates of 5% and 9% for target and maximum goals,
respectively.
We set the threshold goal at 90% of the adjusted EBITDA target,
consistent with the structure of annual incentive compensation. We
set threshold, target and maximum goals for ROIC at 10.0%, 12.5%
and 15.0%, respectively, which the Compensation Committee
determined to be appropriate based on management’s projections of
the Company’s financial results for the performance period. We set
threshold, target and maximum goals for relative TSR at 25th
percentile, 50th percentile and 75th percentile,
respectively.
For more information regarding the 2022 performance restricted
stock units, see the "Grants of Plan-Based Awards" table under
“Compensation of Executive Officers” below and disclosures under
“Compensation of Executive Officers – Estimated Future Payouts
Under Equity Incentive Plan Awards.”
2023 PROXY STATEMENT
33
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|
|
|
|
|
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|
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|
COMPENSATION DISCUSSION AND ANALYSIS |
|
2020 PERFORMANCE RESTRICTED STOCK UNITS
In 2020, the Committee established the following financial
performance goals for the performance restricted stock units over
the January 1, 2020 to December 31, 2022 performance period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 Performance Restricted Stock Unit Goals
|
Metric
(Weight) |
Threshold Goal
50% Payout
|
Target Goal
100% Payout
|
Maximum Goal
200% Payout
|
Actual |
Three-Year Cumulative Earnings per Share (50%)
|
$7.99 |
$8.87 |
$9.31 |
$9.23 |
Return on Invested Capital (50%)
|
11.2% |
14.0% |
16.8% |
15.0% |
Analysis of Financial Performance.
Based on exceeding the three-year cumulative earnings per share and
return on invested capital goals, the Compensation Committee
determined the weighted financial performance was 158% of target
under the 2020 Performance Restricted Stock Unit Award in February
2023. The following table indicates the shares earned under the
LTIP by our Named Executives for the January 1, 2020 to December
31, 2022 performance period. Adm. McCoy and Mr. Duffy were not
participants in the 2020 Performance Restricted Stock Unit awards
and did not receive any payouts.
ANALYSIS OF 2020 PERFORMANCE RESTRICTED STOCK UNIT
PAYOUT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Geveden |
Mr. LeMasters |
Mr. McCabe(1)
|
Adm. McCoy
|
Mr. Duffy |
Target Award (in Shares) |
32,763 |
|
3,190 |
|
6,340 |
|
— |
|
— |
|
Weighted Financial Performance Percentage(2)
|
158 |
% |
158 |
% |
— |
% |
— |
% |
— |
% |
Total Earned Shares |
51,766 |
|
5,041 |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
(1) |
Mr. McCabe entered into a Transition Agreement that provided him a
lump sum payment in lieu of certain annual and long-term incentive
payouts, including the 2020 Performance Restricted Stock
Units. |
(2) |
The weighted financial performance is based on BWXT consolidated
financial results 50% for three-year cumulative earnings per share
and 50% for return on invested capital over the measurement
period. |
SECTION 4: OTHER BENEFITS AND PRACTICES
TRANSITION ARRANGEMENTS
Chief Administrative Officer Transition
On August 19, 2022, Richard W. Loving, who served as Senior Vice
President and Chief Administrative Officer ("CAO") provided notice
of his decision to retire from the Company and transitioned to
Special Advisor to the CEO, effective August 29, 2022, to assist
with the transition of the Chief Administrative Officer role until
his retirement from the Company on March 31, 2023. The Company and
Mr. Loving entered into a Transition Agreement on August 19, 2022,
which provided that Mr. Loving will:
•continue
to receive his current salary in his role as Special Advisor to the
CEO through his retirement date;
•participate
in the Company’s annual incentive compensation plan through
December 31, 2022;
•not
participate in the 2023 annual or long-term incentive
plans;
•receive
a cash payment of $485,000 on his retirement in exchange for his
assistance with the CAO transition, provided that he executes and
does not revoke a release of claims against the Company and that he
remains employed with the Company; and
•continue
participation in certain of our employee benefit plans (subject to
the terms and conditions of such plans).
Unvested equity awards previously granted to Mr. Loving will
continue to vest, subject to the terms set forth in the respective
award agreements.
34
2023 PROXY STATEMENT
|
|
|
|
|
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|
|
COMPENSATION DISCUSSION AND ANALYSIS |
|
General Counsel Transition
On December 29, 2022, Thomas E. McCabe, who served as Senior Vice
President, General Counsel, Chief Compliance Officer and Secretary,
provided notice of his decision to retire from the Company. Mr.
McCabe continued in his role through January 2, 2023, after which
he has served as Special Advisor to the CEO to assist with the
transition of the General Counsel role until his retirement from
the Company on August 1, 2023. The Company and Mr. McCabe entered
into a Transition Agreement on December 29, 2022, which provided
that Mr. McCabe will:
•receive
a salary of $3,000 per month in his role as Special Advisor to the
CEO from January 2, 2023 through his retirement date;
•receive
cash payments of $2,479,000, in lieu of the 2022 annual incentive
payout ($354,250), certain long-term equity incentive awards
($1,748,766 as of December 29, 2022) and other compensation to
which he was otherwise entitled through his retirement date and all
of which he agreed to forfeit in lieu of such payment, provided
that he executes and does not revoke a release of claims against
the Company;
•not
participate in the 2022 and 2023 annual incentive plans;
and
•continue
to participate in certain of our employee benefit plans, subject to
the terms and conditions of such plans.
Unvested equity awards previously granted to Mr. McCabe were
terminated as of December 29, 2022, including the 2020 performance
restricted stock unit award, and he will not participate in 2023
annual equity awards.
OTHER BENEFITS AND PERQUISITES
Subject to applicable eligibility rules, our Named Executives
receive all of the benefits offered to other BWXT employees
generally, including medical and other health and welfare benefits
and participation in our qualified defined benefit plans. We
offer these benefits to our Named Executives and other employees
consistent with market practice. Our Named Executives receive
additional limited perquisites, which we provide consistent with
the types and amounts offered to other executives in the
industry.
We provide the following perquisites to our Named Executives:
relocation and temporary housing assistance (as applicable and
necessary for business purposes), annual physicals, tax and
financial planning services, reimbursement of limited expenses in
connection with a spouse accompanying them on business travel and
other miscellaneous items. We believe the personal benefits offered
to our Named Executives are reasonable and appropriate. We also
provide our Named Executives with limited tax assistance with
respect to relocation and the reimbursement of limited spousal
expenses discussed above. For relocation, the Company provides tax
assistance to Named Executives on the same basis provided to other
employees receiving relocation assistance.
For a description of the values and valuation methodology
associated with perquisites provided in 2022, see the notes and
narratives to the Summary Compensation Table under “Compensation of
Executive Officers” below.
RETIREMENT BENEFITS
Overview. We
provide retirement benefits to our Named Executives through a
combination of (1) qualified and non-qualified defined
contribution retirement plans (our “Thrift Plans”), and (2) a
supplemental non-qualified defined contribution executive
retirement plan.
Thrift Plans. We
maintain two primary defined contribution retirement plans:
(1) a broad-based, qualified 401(k) plan (our “401(k) Plan”)
and (2) a non-qualified restoration plan (our “Restoration
Plan”). All of our Named Executives participated in the 401(k) Plan
in 2022. Our Compensation Committee established the Restoration
Plan to (1) more closely align our executive retirement plans
with general and industrial market practices, (2) ensure the
competitiveness of retirement benefits for our executives who are
not eligible to participate in our Pension Plans, and
(3) mirror the dual qualified and non-qualified plan design of
our Pension Plans. Our Restoration Plan seeks to restore benefits
provided by our 401(k) Plan that are precluded by IRC limits on
eligible compensation and total contributions. The Restoration Plan
contains the same principal components as our 401(k) Plan. All of
our Named Executives except for Robert Duffy participated in our
Restoration Plan in 2022. Our obligations under the Restoration
Plan are unfunded and plan benefits are payable from the general
assets of the Company.
Supplemental Plans. We
also maintain a supplemental executive retirement plan (our
“SERP”). The SERP provides participants with additional
opportunities to defer the payment of certain compensation earned
from us. In 2016, we discontinued Company contributions to
participants’ SERP accounts, but participants may still make
individual contributions to their notional accounts.
2023 PROXY STATEMENT
35
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|
COMPENSATION DISCUSSION AND ANALYSIS |
|
See the “Nonqualified Deferred Compensation” table and accompanying
narrative under “Compensation of Executive Officers” below for more
information about the Restoration Plan and SERP.
SEVERANCE ARRANGEMENTS
BWXT Severance Plan. We
maintain the BWX Technologies, Inc. Executive Severance Plan to
provide a measure of financial assistance to eligible executives,
including the Named Executives, who are involuntarily terminated
for reasons other than cause. The Executive Severance Plan provides
for a lump sum payment of one year of base salary and the cost of
nine months of continuation coverage for medical, dental and vision
benefits under COBRA, and outplacement services for twelve months.
Eligible executives must execute a general release, including
non-compete, non-disclosure, non-disparagement and non-solicitation
covenants, in order to receive such benefits.
Change-in-Control Agreements. The
Company provides change-in-control agreements to certain
executives, including the Named Executives. We believe
change-in-control agreements protect stockholders’ interests by
serving to:
•attract
and retain top-quality executive management;
•assure
both present and future continuity of executive management in the
event of a threatened or actual change in control; and
•ensure
the objective focus of executive management in the evaluation of
any change in control opportunities.
Our change-in-control agreements contain what is commonly referred
to as a “double trigger,” that is, they provide cash benefits only
upon a qualified termination of the executive within 30 months
following a change in control. Stock awards are subject to the
terms of the award agreements and, for stock awards granted prior
to 2021, vest outstanding stock immediately on the occurrence of a
change in control, regardless of whether there is a subsequent
termination of employment. Our 2020 Plan provides that vesting of
stock awards in the event of a change in control will be subject to
a double trigger which applies to equity awards granted in 2021 and
after. Additionally, the change-in-control agreements do not
provide any tax gross-up on the benefits following a qualified
termination. Instead, the change-in-control agreements contain a
“modified cutback” provision, which acts to reduce the benefits
payable to an executive to the extent necessary so that no excise
tax would be imposed on the benefits paid, but only if doing so
would result in the executive retaining a larger after-tax amount.
The provision was included with the intent of benefiting the
Company by seeking to preserve the tax deductibility of the
benefits paid under the agreement, without compromising the
objectives for which the agreement was approved.
See the “Potential Payments Upon Termination or Change in Control”
tables under “Compensation of Executive Officers” below and the
accompanying disclosures for more information regarding the change
in control agreements with our Named Executives, events considered
to be change in control events and other plans and arrangements
that have different trigger mechanisms relating to a change in
control.
OTHER COMPENSATION POLICIES AND PRACTICES
Stock Ownership Guidelines. We
maintain stock ownership guidelines for our executives and
non-management directors. These guidelines establish minimum stock
ownership levels of two to five times annual base salary for our
executives, and five times annual base retainer for non-management
directors. Below are the minimum ownership levels for our
non-management directors and Named Executives:
•Non-management
Directors – Five times (5x) annual base retainer
•Chief
Executive Officer – Five times (5x) annual base
salary
•Other
Named Executives – Three times (3x) annual base salary
Directors and executives have five years to achieve their
respective minimum ownership levels. No executive or director is
authorized to sell any shares of our common stock (other than to
satisfy applicable withholding tax obligations resulting from a
transaction involving such stock or to cover the exercise price of
stock options) unless they have met their respective guideline. The
Governance Committee annually reviews the compliance with these
guidelines and has discretion to waive or modify the stock
ownership guidelines for directors and executives. All of our
directors and Named Executives have achieved, or are in the process
of achieving, their minimum ownership levels in accordance with the
stock ownership guidelines.
Timing of Stock Awards.
The Compensation Committee generally approves our annual
stock-based awards for grant effective as of the second business
day following the filing of our annual report on Form 10-K or
quarterly report on Form 10-Q with the SEC.
36
2023 PROXY STATEMENT
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COMPENSATION DISCUSSION AND ANALYSIS |
|
Hedging, Pledging and Short Sale Policies. We
maintain a policy that prohibits all directors, officers and
employees from trading in puts, calls or other options on Company
securities and otherwise engaging in hedging or monetization
transactions, such as zero-cost collars and forward-sale contracts,
that are designed to hedge or offset any decrease in the market
value of Company securities. Our policy also prohibits directors,
officers and employees from holding Company securities in margin
accounts, pledging Company securities and engaging in short sales
of company securities. This policy applies to all Company
securities, including common stock held by directors, officers and
employees whether granted by the Company or held directly or
indirectly by the individual.
Clawbacks. Incentive
compensation awards include provisions allowing us to recover
excess amounts paid to individuals who knowingly engaged in a fraud
resulting in a restatement. The Compensation Committee may also
terminate any outstanding stock award if the recipient (i) is
convicted of a misdemeanor involving fraud, dishonesty or moral
turpitude or a felony, or (ii) engages in conduct that
adversely affects or may reasonably be expected to adversely affect
the business reputation or economic interests of the Company. The
Compensation Committee will evaluate changes to the clawback policy
in light of new SEC rules and will make appropriate changes to
comply with the final NYSE listing standards.
Proxy Data Custom Peer Group for 2022
Compensation. In
2022, the Compensation Committee evaluated the peer group and made
certain changes. Set forth below are the peer companies included in
our 2022 compensation review.
|
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|
•AAR
Corp
|
•HEICO
Corp.
|
•Spirit
AeroSystems Holdings, Inc.
|
•Aerojet
Rocketdyne Holdings, Inc.
|
•Hexcel
Corporation
|
•Teledyne Technologies Incorporated
|
•Astronics
Corporation
|
•Huntington
Ingalls Industries, Inc.
|
•TransDigm
Group Incorporated
|
•Barnes
Group Inc.
|
•Kaman
Corporation
|
•Triumph
Group, Inc.
|
•Curtiss-Wright
Corporation
|
•Moog
Inc.
|
•Woodward,
Inc.
|
Deductibility
of Executive Compensation. Section
162(m) of the Internal Revenue Code generally places a $1 million
limit on the amount of compensation a publicly held company can
deduct in any tax year on compensation paid to certain executive
officers. Although the Compensation Committee considers and
evaluates the impact of Section 162(m), it believes that the tax
deduction is only one of several relevant considerations in setting
compensation. Accordingly, where it is deemed necessary and in the
best interests of the Company to attract and retain the best
possible executive talent to compete successfully and to motivate
such executives to achieve the goals inherent in our business
strategy, the Compensation Committee has in the past approved and
in the future may approve compensation to executive officers which
exceeds the deductibility limits or otherwise may not qualify for
deductibility.
COMPENSATION COMMITTEE REPORT
The following report of the Compensation Committee shall not be
deemed to be “soliciting material” or to otherwise be considered
“filed” with the SEC or be subject to Regulation 14A or 14C (other
than as provided in Item 407 of Regulation S-K) or to the
liabilities of Section 18 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), nor shall such information
be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Exchange Act, except to
the extent that BWXT specifically incorporates it by reference into
such filing.
We have reviewed and discussed the Compensation Discussion and
Analysis with BWXT’s management and, based on our review and
discussions, we recommended to the Board that the Compensation
Discussion and Analysis be included in this proxy
statement.
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|
THE COMPENSATION COMMITTEE |
|
Gerhard F. Burbach, Chair |
|
Kenneth J. Krieg |
|
Leland D. Melvin |
|
John M. Richardson |
2023 PROXY STATEMENT
37
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COMPENSATION OF EXECUTIVE OFFICERS |
|
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes prior compensation of our Named
Executives for the time periods in which each was a Named
Executive.
SUMMARY COMPENSATION TABLE
|
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Name and Principal Position |
Year |
Salary(1)
|
Bonus |
Stock
Awards(2)
|
Non-Equity
Incentive Plan
Compensa-tion(3)
|
Change in
Pension
Value and
Nonqual-ified
Deferred
Compen-sation
Earnings(4)
|
All Other
Compensation(5)
|
Total |
|
|
|
|
|
|
|
|
|
Rex D. Geveden
President and Chief Executive Officer
|
2022 |
$ |
925,000 |
|
$ |
— |
|
$ |
3,576,173 |
|
$ |
999,000 |
|
$ |
— |
|
$ |
216,519 |
|
$ |
5,716,692 |
|
2021 |
925,000 |
|
— |
|
3,499,932 |
|
530,538 |
|
— |
|
168,576 |
|
5,124,046 |
|
2020 |
925,000 |
|
— |
|
3,099,983 |
|
1,259,573 |
|
— |
|
172,284 |
|
5,456,840 |
|
Robb A. LeMasters
Senior Vice President and Chief Financial Officer
|
2022 |
500,000 |
|
— |
|
715,225 |
|
378,000 |
|
— |
|
44,299 |
|
1,637,524 |
|
2021 |
457,045 |
|
— |
|
440,006 |
|
149,819 |
|
— |
|
45,773 |
|
1,092,643 |
|
|
|
|
|
|
|
|
|
Thomas E. McCabe(6)
Senior Vice President, General Counsel, Chief Compliance Officer
and Secretary
|
2022 |
545,000 |
|
— |
|
613,050 |
|
— |
|
— |
|
145,638 |
|
1,303,688 |
|
2021 |
542,500 |
|
— |
|
599,927 |
|
239,022 |
|
— |
|
59,712 |
|
1,441,161 |
|
2020 |
532,500 |
|
— |
|
599,945 |
|
484,194 |
|
— |
|
47,664 |
|
1,664,303 |
|
Kevin M. McCoy(7)
President, Government Operations
|
2022 |
735,000 |
|
— |
|
357,547 |
|
472,973 |
|
— |
|
44,100 |
|
1,609,620 |
|
|
|
|
|
|
|
|
|
Robert L. Duffy(8)
Senior Vice President
and Chief Administrative Officer
|
2022 |
137,500 |
|
— |
|
1,200,033 |
|
74,250 |
|
— |
|
7,625 |
|
1,419,408 |
|
|
|
|
|
|
|
|
|
(1)See
“Salary” below for a discussion of the amounts reported in this
column.
(2)See
“Stock Awards” below for a discussion of the amounts included in
this column.
(3)See
“Non-Equity Incentive Plan Compensation” below for a discussion of
the amounts included in this column.
(4)See
“Change in Pension Value and Nonqualified Deferred Compensation
Earnings” below for a discussion of the amounts included in this
column.
(5)See
“All Other Compensation” below for a discussion of the amounts
included in this column.
(6)Mr.
McCabe served as our Senior Vice President, General Counsel and
Secretary until January 2, 2023 when he transitioned to Special
Advisor to the CEO. Pursuant to the terms of the Transition
Agreement, dated December 29, 2022, Mr. McCabe forfeited his annual
incentive payout and outstanding and unvested equity awards to
which he was entitled in exchange for lump-sum
payment.
(7)Adm.
McCoy was appointed President, Government Operations on February
18, 2022.
(8)Mr.
Duffy joined the Company as Senior Vice President and Chief
Administrative Officer on August 29, 2022.
Salary. Amounts
reported in the “Salary” column above include amounts that have
been deferred under our qualified and non-qualified deferred
compensation plans.
Bonus. There
were no bonus payments made to the Named Executives.
Stock Awards. The
amounts reported in the “Stock Awards” column for each Named
Executive represent the aggregate grant date fair value of all
stock awards granted to Named Executives in 2022 computed in
accordance with Financial Accounting Standards Board Accounting
Standards Codification (“FASB ASC”) Topic 718, excluding the effect
of estimated forfeitures.
The amounts reported in the "Stock Awards" column include the grant
date fair values of restricted stock units and performance
restricted stock units granted to our Named Executives in 2022. The
values for performance restricted stock units are based on our
Named Executives attaining target performance levels, which we
determined was the probable outcome at the time of grant. Assuming
maximum performance levels were probable, the grant date fair value
of each Named Executive's performance restricted stock unit awards
in 2022 (other than Mr. Duffy who was not an employee at the time
of this grant) would be as follows: $4,352,285 for Mr. Geveden;
$870,439 for Mr. LeMasters; $746,051 for Mr. McCabe; and $435,219
for Adm. McCoy.
For a discussion of the valuation assumptions used in determining
the grant date fair value, see Note 9 to our consolidated financial
statements included
in our annual report on Form 10-K for the year ended
December 31, 2022. See also the “Grants of Plan-Based Awards”
table for more information regarding the stock awards granted to
our Named Executives in 2022.
38
2023 PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
Non-Equity Incentive Plan Compensation. The
amounts reported in the “Non-Equity Incentive Plan Compensation”
column are attributable to the annual incentive awards earned under
our EICP. See the “Grants of Plan-Based Awards” table for more
information regarding the annual incentive awards earned in
2022.
All Other Compensation. The
amounts reported for 2022 in the “All Other Compensation” column
are attributable to the following:
ALL OTHER COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive |
Thrift Plan
Contributions |
Restoration
Plan
Contributions |
Dividend
Equivalents |
Perquisites |
Total |
Mr. Geveden |
$ |
21,101 |
|
$ |
43,400 |
|
$ |
139,368 |
|
$ |
12,650 |
|
$ |
216,519 |
|
Mr. LeMasters |
17,941 |
|
11,700 |
|
2,008 |
|
12,650 |
|
44,299 |
|
Mr. McCabe |
18,300 |
|
14,400 |
|
28,478 |
|
84,460 |
|
145,638 |
|
Adm. McCoy |
18,300 |
|
25,800 |
|
— |
|
— |
|
44,100 |
|
Mr. Duffy |
7,625 |
|
— |
|
— |
|
— |
|
7,625 |
|
Thrift Plan Contributions and Restoration Plan
Contributions. The
amounts reported in these columns represent the total amount of
matching and service-based contributions made to each Named
Executive under our Thrift Plan and our Restoration Plan,
respectively. Under our Thrift Plan, we will match 50% of
employee’s contributions, up to 6%. Under our Restoration Plan, we
will match 50% of the first 6% of employee’s deferral
contributions. For information regarding our Thrift Plan and
Restoration Plan matching contributions and service-based
contributions, see “Compensation Discussion and Analysis – Other
Benefits and Practices – Retirement Benefits”
above.
Dividend Equivalents. The
amounts listed in this column for each Named Executive represent
the value of dividend equivalents credited to their vested
restricted stock unit and performance restricted stock unit awards
in 2022. Dividend equivalents credited to unvested restricted stock
units and performance restricted stock units are subject to the
same vesting period as the restricted stock units with respect to
which the dividend equivalents are paid. Dividend equivalents
credited to deferred restricted stock units and performance
restricted stock units are subject to the same deferral period as
the restricted stock units with respect to which the dividend
equivalents are paid.
Perquisites. In
accordance with SEC rules, perquisites and other personal benefits
received by a Named Executive are not included if their aggregate
value does not exceed $10,000. The perquisites and other personal
benefits reported for our Named Executives in 2022 are as
follows:
•The
amount reported for Mr. Geveden is attributable to $12,650 for
financial planning services.
•The
amount reported for Mr. LeMasters is attributable to $12,660
for financial planning services.
•The
amount reported for Mr. McCabe is attributable to $12,650 for
financial planning services and $71,810 for relocation costs
related to his move to our Washington office during
2022.
We calculate all perquisites and personal benefits based on the
incremental cost we incur to provide such benefits. For financial
planning services, we compute incremental cost based on the actual
cost incurred by us for the financial planning service for the
applicable Named Executive.
2023 PROXY STATEMENT
39
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
GRANTS OF PLAN-BASED AWARDS
The following table provides additional information on stock awards
and non-equity incentive plan awards made to our Named Executives
during the year ended December 31, 2022. No stock option
awards were granted to our Named Executives in 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date |
Committee
Action
Date |
Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards(1)
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards; Number of Shares of Stock or Units(2)
|
All Other
Stock
Awards: Number of Shares of Stock or
Units(3)
|
Grant Date
Fair Value
of Stock
Awards(4)
|
Name |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
Rex D. Geveden |
2/18/2022 |
2/17/2022 |
462,500 |
|
$ |
925,000 |
|
$ |
1,850,000 |
|
|
|
|
|
|
|
2/18/2022 |
2/17/2022 |
|
|
|
23,951 |
|
47,901 |
|
95,802 |
|
|
$ |
2,176,142 |
|
|
2/18/2022 |
2/17/2022 |
|
|
|
|
|
|
31,935 |
|
1,400,030 |
|
|
|
|
|
|
|
|
|
|
|
|
Robb A. LeMasters |
2/18/2022 |
2/17/2022 |
175,000 |
|
350,000 |
|
700,000 |
|
|
|
|
|
|
|
2/18/2022 |
2/17/2022 |
|
|
|
4,790 |
|
9,580 |
|
19,160 |
|
|
435,219 |
|
|
2/18/2022 |
2/17/2022 |
|
|
|
|
|
|
6,387 |
|
280,006 |
|
|
|
|
|
|
|
|
|
|
|
|
Thomas E. McCabe(5)
|
2/18/2022 |
2/17/2022 |
177,125 |
|
354,250 |
|
708,500 |
|
|
|
|
|
|
|
2/18/2022 |
2/17/2022 |
|
|
|
4,106 |
|
8,211 |
|
16,422 |
|
|
373,026 |
|
|
2/18/2022 |
2/17/2022 |
|
|
|
|
|
|
5,475 |
|
240,024 |
|
|
|
|
|
|
|
|
|
|
|
|
Kevin M. McCoy |
2/18/2022 |
2/17/2022 |
238,875 |
|
477,750 |
|
955,500 |
|
|
|
|
|
|
|
2/18/2022 |
2/17/2022 |
|
|
|
2,395 |
|
4,790 |
|
9,580 |
|
|
217,610 |
|
|
2/18/2022 |
2/17/2022 |
|
|
|
|
|
|
3,192 |
|
139,937 |
|
|
|
|
|
|
|
|
|
|
|
|
Robert L. Duffy(6)
|
8/22/2022 |
8/19/2022 |
34,375 |
|
68,750 |
|
137,500 |
|
|
|
|
|
|
|
8/29/2022 |
8/19/2022 |
|
|
|
|
|
|
22,608 |
|
1,200,033 |
|
|
|
|
|
|
|
|
|
|
|
|
(1)Amounts
shown represent the range of potential payouts under our annual
incentive compensation plan. See “Estimated Future Payouts Under
Non-Equity Incentive Plan Awards” below for a discussion of the
amounts included in this column. The actual amounts paid to our
Named Executives are included in the Non-Equity Incentive Plan
Compensation column of the “Summary Compensation Table”
above.
(2)See
"Estimated Future Payouts Under Equity Incentive Plan Awards" below
for a discussion of the amounts included in this
column.
(3)Amounts
shown represent shares of our common stock underlying restricted
stock units. See “All Other Stock Awards” below for a discussion of
the amounts included in this column.
(4)See
"Grant Date Fair Value of Stock Awards" below for a discussion of
the amounts included in this column.
(5)Mr.
McCabe served as our Senior Vice President, General Counsel and
Secretary until January 2, 2023 when he transitioned to Special
Advisor to the CEO. Pursuant to the terms of the Transition
Agreement, dated December 29, 2022, Mr. McCabe forfeited his
outstanding and unvested equity awards as of that date in return
for a one-time payment.
(6)Mr.
Duffy joined the Company as Senior Vice President and Chief
Administrative Officer on August 29, 2022.
Estimated Future Payouts Under Non-Equity Incentive Plan
Awards
The amounts shown in this column reflect the threshold, target and
maximum pay opportunities for each Named Executive under the EICP
for 2022. Generally, EICP payout depends on three principal
factors: (i) financial, safety and individual performance, (ii) the
Named Executive’s target percentage, and (iii) the Named
Executive’s earnings from base salary. For 2022, the target
percentage for each Named Executive was as follows:
|
|
|
|
|
|
|
|
|
Named Executive |
|
Target Percentage
(% of Salary) |
Rex D. Geveden |
|
100% |
Robb A. LeMasters |
|
70% |
Thomas E. McCabe |
|
65% |
Kevin M. McCoy |
|
65% |
Robert L. Duffy |
|
50% |
The amounts reflected in the “target” column of the “Grants of Plan
Based Awards” table represent the value of the payout opportunity
under the EICP at target financial performance levels. All
threshold, target and maximum amounts reported in the table above
assume that our Compensation Committee exercises no discretion over
the annual incentive compensation award ultimately paid. See
“Compensation Discussion and Analysis — Compensation Analysis and
Outcomes — Annual Incentive Compensation” above for more
information about the 2022 EICP awards and performance
goals.
40
2023 PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
Estimated Future Payouts Under Equity Incentive Plan
Awards
The amounts shown reflect the threshold, target and maximum payout
opportunities of performance restricted stock units granted in 2022
under the 2020 Plan. Each grant represents a right to receive one
share of BWXT common stock if performance targets are met. Upon
vesting, the performance restricted stock units are settled into
shares of BWXT common stock. The amount of performance restricted
stock units that vest, if any, is determined based (1) 40% on the
average annual ROIC during the three-year performance period; (2)
40% on the Company’s cumulative adjusted EBITDA during the same
period; and (3) 20% on the relative total shareholder return during
the same period. We withhold a portion of these shares to satisfy
the minimum statutory withholding tax for each Named Executive due
on vesting. The amounts shown in the “target” column represent the
number of performance shares that will vest, which is 100% of the
amount granted, if the target levels of average annual ROIC and
cumulative adjusted EBITDA are attained. The amounts shown in the
“maximum” column represent the number of performance shares that
will vest, which is 200% of the amount granted, if the maximum
level of average annual ROIC and cumulative adjusted EBITDA are
attained. The amounts shown in the “threshold” column represent the
minimum number of performance shares that will vest, which is 50%
of the amount granted, if the threshold level of average annual
ROIC, cumulative adjusted EBITDA and relative total shareholder
return are attained. No amount of performance shares will vest if
the levels of all three such performance metrics are less than the
threshold performance level. See “Compensation Discussion and
Analysis — Compensation Analysis — Long-Term Incentive
Compensation” above for more information regarding the performance
shares.
All Other Stock Awards
The amounts shown reflect 2022 grants of restricted stock units
under our 2020 Plan. Each restricted stock unit represents the
right to receive one share of Company common stock and is generally
scheduled to vest one-third each year beginning on the first
anniversary of the date of grant. Upon vesting, the restricted
stock units are settled into shares of Company common stock. We
withhold a portion of these shares to satisfy the minimum statutory
withholding tax for each Named Executive due on vesting. See
“Compensation Discussion and Analysis — Compensation Analysis and
Outcomes — Long-Term Incentive Compensation” for more information
regarding the restricted stock units.
Grant Date Fair Value of Stock Awards
The amounts included in the “Grant Date Fair Value of Stock Awards”
column for each Named Executive represent the full grant date fair
values of the equity awards computed in accordance with FASB ASC
Topic 718, disregarding potential forfeitures based on service
requirements. The grant date fair value of restricted stock units
is based on the closing price of one share of our common stock on
the date of grant, which is $43.84 for awards granted on February
18, 2022 ($53.08 for the sign-on award granted to Mr. Duffy on
August 29, 2022). The grant date fair value of the performance
restricted stock units is based on the probable outcome of each of
the three performance conditions. The grant date fair value for the
EBITDA and ROIC performance condition portions of the awards is
$43.84, based on the closing price of one share of our common stock
on the February 18, 2022 date of grant. The grant date fair value
for the relative TSR performance condition portion of the award is
$51.78, which is determined using a Monte Carlo model that
simulates our stock price and TSR relative to other companies in
the S&P Aerospace and Defense Select Industry Index. The values
for performance restricted stock units are based on our Named
Executives attaining target performance levels. For more
information regarding the compensation expense related to 2022
awards, see Note 9 to our consolidated financial statements
included in our annual report on Form 10-K for the year ended
December 31, 2022.
The amounts reported in the “Grant Date Fair Value of Stock Awards”
column for restricted stock unit awards do not factor in the value
of dividend equivalents credited to each unvested restricted stock
unit as a result of dividends on stock declared by the Company in
2022. For more information on the value of dividend equivalents
credited to our Named Executives’ vested restricted stock unit
awards, see “All Other Compensation” under the “Summary
Compensation Table.”
2023 PROXY STATEMENT
41
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2022
The following Outstanding Equity Awards at Fiscal Year-End table
summarizes the equity awards we have made to our Named Executives
that were outstanding as of December 31, 2022. None of our
Named Executives had outstanding stock options as of December 31,
2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards(1)
|
Name |
|
Grant
Date |
|
Number of
Shares or
Units of
Stock That
Have Not
Vested |
|
Market Value of Shares or Units of Stock That Have Not
Vested |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or
Other Rights That Have Not Vested |
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares, Units or Other Rights That Have Not Vested |
Rex D. Geveden |
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units(2)
|
|
2/27/2020 |
|
6,684 |
|
|
|
$ |
388,207 |
|
|
|
|
|
Performance RSU(3)
|
|
2/27/2020 |
|
|
|
|
|
32,763 |
|
|
$ |
1,902,875 |
|
Restricted Stock Units(4)
|
|
2/25/2021 |
|
15,083 |
|
|
|
876,021 |
|
|
|
|
|
Performance RSU(5)
|
|
2/25/2021 |
|
|
|
|
|
35,389 |
|
|
2,055,393 |
|
Restricted Stock Units(6)
|
|
2/18/2022 |
|
31,935 |
|
|
|
1,854,785 |
|
|
|
|
|
Performance RSU(7)
|
|
2/18/2022 |
|
|
|
|
|
47,901 |
|
|
2,782,090 |
|
Robb A. LeMasters |
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units(8)
|
|
8/6/2020 |
|
709 |
|
|
|
41,179 |
|
|
|
|
|
Performance RSU(3)
|
|
8/6/2020 |
|
|
|
|
|
3,190 |
|
|
185,275 |
|
Restricted Stock Units(4)
|
|
2/25/2021 |
|
1,978 |
|
|
|
114,882 |
|
|
|
|
|
Performance RSU(5)
|
|
2/25/2021 |
|
|
|
|
|
4,448 |
|
|
258,340 |
|
Restricted Stock Units(6)
|
|
2/18/2022 |
|
6,387 |
|
|
|
370,957 |
|
|
|
|
|
Performance RSU(7)
|
|
2/18/2022 |
|
|
|
|
|
9,580 |
|
|
556,406 |
|
Thomas E. McCabe(9)
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units(2)
|
|
2/27/2020 |
|
1,409 |
|
|
|
81,835 |
|
|
|
|
|
Performance RSU(3)
|
|
2/27/2020 |
|
|
|
|
|
6,341 |
|
|
368,285 |
|
Restricted Stock Units(4)
|
|
2/25/2021 |
|
2,696 |
|
|
|
156,584 |
|
|
|
|
|
Performance RSU(5)
|
|
2/25/2021 |
|
|
|
|
|
6,066 |
|
|
352,313 |
|
Restricted Stock Units(6)
|
|
2/18/2022 |
|
5,475 |
|
|
|
317,988 |
|
|
|
|
|
Performance RSU(7)
|
|
2/18/2022 |
|
|
|
|
|
8,211 |
|
|
476,895 |
|
Kevin M. McCoy |
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units(6)
|
|
2/18/2022 |
|
3,192 |
|
|
|
185,391 |
|
|
|
|
|
Performance RSU(7)
|
|
2/18/2022 |
|
|
|
|
|
4,790 |
|
|
278,203 |
|
Robert L. Duffy |
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock Units(10)
|
|
8/29/2022 |
|
22,608 |
|
|
|
1,313,073 |
|
|
|
|
|
(1)Stock
awards shown include restricted stock units ("RSUs") that have
time-based vesting and performance RSUs that vest depending upon
the attainment of specified performance goals. Market values are
based on the closing price of Company common stock as of
December 31, 2022 ($58.08), as reported on the New York Stock
Exchange.
(2)Represents
the final one-third of RSUs granted which vested on February 27,
2023.
(3)These
performance RSUs represent the right to receive one share of our
common stock for each performance RSU that vests. The number and
value of performance RSUs that vest depend upon the attainment of
specified performance goals. The number and value of performance
RSUs reported are based on achieving target performance levels.
These performance RSUs vested on February 27, 2023. See "2020
Performance Restricted Stock Awards" under "Compensation Discussion
and Analysis" for additional information.
(4)Represents
remaining two-thirds of RSUs granted with vesting in one-third
increments beginning with the first anniversary of the grant date.
An additional one-third (50% of the unvested RSUs shown) vested on
February 25, 2023 and the remaining one-third will vest on February
25, 2024.
(5)These
performance RSUs represent the right to receive one share of our
common stock for each performance RSU that vests. The number and
value of performance RSUs that vest depend upon the attainment of
specified performance goals. The number and value of performance
RSUs reported are based on achieving target performance levels.
These performance RSUs are generally scheduled to vest 100% on
February 25, 2024.
(6)Represents
100% of RSUs granted with vesting in one-third increments beginning
with the first anniversary of the grant date. One-third of these
RSUs vested on February 18, 2023, and the remaining RSUs will vest
in equal installments on February 18, 2024 and 2025.
(7)These
performance RSUs represent the right to receive one share of our
common stock for each performance RSU that vests. The number and
value of performance RSUs that vest depend upon the attainment of
specified performance goals. The number and value of performance
RSUs reported are based on achieving target performance levels.
These performance RSUs are generally scheduled to vest 100% on
February 18, 2025. See the "Grants of Plan-Based Awards" table for
more information about performance RSUs.
(8)Represents
the final one-third of the RSUs granted which will vest on August
6, 2023.
(9)The
stock award information for Mr. McCabe is included as of December
28, 2022. He entered into a Transition Agreement on December 29,
2022. Pursuant to the terms of the Transition Agreement, Mr. McCabe
forfeited his outstanding and unvested equity awards and other
incentive compensation as of that date in lieu of a one-time
payment.
42
2023 PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
(10)Represents
100% of RSUs granted with vesting in one-third increments beginning
on the first anniversary of the grant date.
Vesting of Restricted Stock Units and Performance Restricted Stock
Units
Restricted stock units generally vest one-third each year, except
as otherwise noted. The Company granted performance restricted
stock units that represented the right to receive one share of
Company common stock for each performance restricted stock unit
that vests. The number and value of performance restricted stock
units that vest depend upon the attainment of specified performance
goals. Performance restricted stock units are generally scheduled
to cliff vest three years after the grant date, subject to
achievement of the specified performance goals.
OPTION EXERCISES AND STOCK VESTED IN 2022
The following table provides additional information about the value
realized by our Named Executives on the vesting of BWXT stock
awards during the year ended December 31, 2022. None of the
Named Executives held or exercised stock options in
2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards |
Name |
|
Number of
Shares Acquired
on Vesting (#) |
|
Value Realized
on Vesting |
Rex D. Geveden |
|
68,672 |
|
|
$ |
3,640,769 |
|
Robb A. LeMasters |
|
1,698 |
|
|
88,883 |
|
Thomas E. McCabe |
|
13,762 |
|
|
731,430 |
|
Kevin M. McCoy |
|
— |
|
|
— |
|
Robert L. Duffy |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For each Named Executive, the amounts reported in the number of
shares acquired on vesting column in the table above represent the
aggregate number of shares of our common stock acquired by the
Named Executive in connection with restricted stock units awarded
under our Incentive Plans that vested in 2022. The amounts reported
in the value realized on vesting column were calculated by
multiplying the number of shares acquired by the closing price of
our common stock on the date of vesting. The number of shares
acquired in connection with the vesting of restricted stock units
includes shares withheld to satisfy the withholding tax due on
vesting as reported in the table at right for each Named
Executive.
|
|
Name |
Shares Withheld on Vesting of
Restricted Stock and
Restricted Stock Units |
|
Rex D. Geveden |
30,975 |
|
|
|
Robb A. LeMasters |
817 |
|
|
|
Thomas E. McCabe |
6,255 |
|
|
|
Kevin M. McCoy |
— |
|
|
|
Robert L. Duffy |
— |
|
|
2023 PROXY STATEMENT
43
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
NONQUALIFIED DEFERRED COMPENSATION IN 2022
None of our Named Executives were eligible to participate in either
qualified or nonqualified pension plans in 2022. The following
Nonqualified Deferred Compensation table summarizes our Named
Executives’ compensation under our nonqualified defined
contribution plans in 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Plan Name |
|
Executive Contributions |
|
Registrant Contributions |
|
Aggregate Earnings (Loss) |
|
Aggregate Withdrawals / Distributions |
|
Aggregate Balance as of Dec. 31, 2022 |
Rex D. Geveden |
|
SERP |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
Restoration Plan |
|
155,000 |
|
|
43,400 |
|
|
(79,069) |
|
|
— |
|
|
745,617 |
|
Robb A. LeMasters |
|
SERP |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
Restoration Plan |
|
48,750 |
|
|
11,700 |
|
|
(6,015) |
|
|
— |
|
|
106,258 |
|
Thomas E. McCabe |
|
SERP |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
Restoration Plan |
|
60,000 |
|
|
14,400 |
|
|
(24,704) |
|
|
— |
|
|
234,736 |
|
Kevin M. McCoy |
|
SERP |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
Restoration Plan |
|
25,800 |
|
|
25,800 |
|
|
(4,194) |
|
|
— |
|
|
71,914 |
|
Robert L. Duffy |
|
SERP |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
Restoration Plan |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
SERP. For
2022, participants could elect to defer the payment of certain
compensation earned from us. Under our SERP, any amounts deferred
by a participant are maintained in a notional account separate from
the account into which we make annual contributions. We refer to
this separate account as a participant’s deferral account.
Participants are 100% vested in their deferral accounts at all
times. None of the Named Executives contributed to the SERP in
2022.
Restoration Plan. Our
Restoration Plan is an unfunded, nonqualified defined contribution
plan through which we provide annual contributions to each
participant’s notional accounts, which we refer to as a
participant’s company matching account and company service-based
account. Participants include our Named Executives and other
employees of our Company whose base salary exceeds certain
compensation limits imposed by the Internal Revenue Code. Benefits
under our Restoration Plan are based on a participant’s vested
percentage in his or her notional account balance at the time of
distribution. Each participant generally vests 100% in his or her
company matching account and company service-based account upon
completing three years of service with our Company, subject to
accelerated vesting for death, disability, termination by the
Company without cause, retirement or on a change in
control.
Participants in our Restoration Plan may elect to defer the payment
of certain compensation earned from us that is in excess of limits
imposed by the Internal Revenue Code. As with our SERP, any amounts
deferred by a participant in the Restoration Plan are reflected in
a notional deferral account that is separate from the participant’s
company matching and service-based accounts. Participants are 100%
vested in their deferral accounts at all times.
Executive Contributions. Under
our SERP, a Named Executive may elect to defer up to 50% of his or
her annual salary and/or up to 100% of any bonus earned in any plan
year and a member of the Board may elect to defer up to 100% of his
or her retainers earned in any plan year. Although participants
were permitted to contribute all or a portion of their 2022 EICP
bonuses to their SERP accounts, the amounts reported in this table
as “Executive Contributions" do not include any contributions of
any 2022 EICP awards because EICP awards earned in 2022 are not
paid until 2023. There were no contributions to the SERP by Named
Executives in 2022.
All of our Named Executives except for Robert Duffy contributed to
their Restoration Plan deferral accounts in 2022. Our Restoration
Plan allows participants to defer a percentage of their base salary
in excess of the Internal Revenue Code Section 401(a)(17)
compensation limit, and receive company matching contributions with
respect to those deferrals.
Registrant Contributions. Our
Company no longer makes company contributions to our Named
Executives' SERP accounts. Under our Restoration Plan, our Company
makes notional matching and service-based contributions to eligible
participants’ company matching account and serviced-based account,
respectively. Any Restoration Plan participants who have elected to
make deferral contributions under our Restoration Plan are credited
with a company matching contribution equal to 50% of the first 6%
of their deferral contribution. For each participant in our
Restoration Plan, we also make a cash service-based contribution to
the participant’s company service-based account. The amount of this
service-based contribution is based on a percentage of the
participant’s eligible
44
2023 PROXY STATEMENT
|
|
|
|
|
|
|
|
|
|
COMPENSATION OF EXECUTIVE OFFICERS |
|
compensation in excess of the Internal Revenue Code limit and
ranges between 3% and 8%, depending on the participant’s years of
service. This service-based contribution is made regardless of
whether the participant has elected to make deferral contributions
under our Restoration Plan. All 2022 company contributions are
included in the “Summary Compensation Table” above as “All Other
Compensation.”
Aggregate Earnings. The
amounts reported in this column for our SERP and Restoration Plan
represent hypothetical amounts of earnings or losses and dividends
credited during 2022 on all accounts for each Named Executive under
our SERP and Restoration Plan. Under our SERP and Restoration Plan,
each participant elects to have his notional accounts
hypothetically invested in one or more of the investment funds
designated by our Compensation Committee. Each participant’s
notional accounts are credited and debited to reflect gains and
losses on the hypothetical investments. These gains and losses are
not reported as compensation in the Summary Compensation
Table.
Aggregate Withdrawals/Distributions. There
were no withdrawals made by any of the Named Executives from the
SERP or Restoration Plan in 2022.
Aggregate Balance at December 31, 2022. The
aggregate balance of a participating Named Executive’s notional
SERP account consists of contributions made by us to the Named
Executive’s company account, deferrals by the Named Executive to
his deferral account, hypothetical credited gains or losses on
those accounts and any aggregate withdrawals or distributions from
the SERP account. The aggregate balance of a participating Named
Executive’s notional Restoration Plan account consists of
contributions made by us to the Named Executive’s company matching
account and company service-based account, deferrals by the officer
to his deferral account, hypothetical gains or losses on those
accounts and any aggregate withdrawals or distributions from the
Restoration Plan. The balances shown represent the accumulated
account values (includi