The Board has considered, and will continue to seriously consider, feedback from these discussions as we review and evaluate our executive compensation and other programs and the evolution of our business.
Other Considerations. The Committee reviews market-based data as one benchmark to provide a reference point for compensation practices as well as a source of comparative information to assist in determining various components of compensation. However, it does not use this information to mathematically calculate compensation nor limit itself to any specified range. The Committee reviews market-based data in general terms and uses its judgment and discretion to address individual circumstances rather than simply targeting a level of compensation that falls within a specific range of the data.
In connection with the completion of the RMT Transaction, for purposes of its review of base salary and other elements of the compensation program Zurn Elkay and WTW developed a peer group of with an emphasis on water-based manufacturing companies that reflect the focused and modified size of the Company. These fifteen companies include Advanced Drainage Systems, Inc., Badger Meter, Inc., CIRCOR International, Inc., Evoqua Water Technologies Corp., Franklin Electric Co., Inc., Graco Inc., Helios Technologies, Inc., Kadant Inc., Lindsay Corporation, Mueller Water Products, Inc., Nordson Corporation, Northwest Pipe Company, SPX FLOW, Inc., The Gorman-Rupp Company and Watts Water Technologies, Inc. (the “Peer Group”).
Setting Executive Compensation and the Role of Our Executive Officers and Consultants in Compensation Decisions
The Committee annually reviews and approves all compensation decisions related to our Named Executive Officers. The CEO establishes the AIPs for each executive officer other than himself; the Committee establishes the AIPs for the CEO. At the end of the year, prior to making the annual compensation determinations for each executive officer, one or more members of the Committee work together with the CEO to review the performance of the Company and its respective businesses, the role of each executive in the various aspects of that performance and the executive’s level of achievement of his or her AIPs. To assist with this process, in fiscal 2022 our CEO and members of management utilized data provided by our independent compensation consultant for each executive officer. Based on this review and data, the CEO made recommendations to the Committee as to the compensation of all senior management, including the Named Executive Officers other than himself. The Committee considers these recommendations and meets with its compensation consultant independently in making the final determinations. Other than our CEO, none of the other Named Executive Officers had or have any role in determining the fiscal 2022 compensation of other Named Executive Officers. We anticipate that the CEO will continue to have a role in setting the compensation for the senior management of the Company.
The Committee currently uses WTW as its independent compensation consultant to assist in analyzing the Company’s compensation programs and making compensation decisions. The Committee is directly responsible for the appointment, termination, compensation and oversight of the work of any compensation consultants hired by it and considers the independence of any such consultant prior to retention. The Company provides appropriate funding, as determined solely by the Committee, for the payment of compensation to the compensation consultants engaged by the Committee.
WTW provides ongoing advisory services to the Committee on various aspects of its overall compensation practices, including, but not limited to, the MICP, the long-term incentive compensation program and the related Performance Incentive Plan, and the compensation program for outside directors. WTW also provides assistance with reviews of compensation programs for the CEO and other executive officers. The Company paid WTW $141,000 in fiscal 2022 for these advisory services related to its executive and director compensation programs. In addition, in fiscal 2022, WTW was also engaged by management, finance and human resources to provide pension actuarial, general compensation consulting and property and casualty insurance brokerage services. Fees for these services totaled $266,000 in fiscal 2022.
After considering the factors set forth in the SEC and NYSE rules, in accordance with the Committee’s charter, the Committee determined that WTW is sufficiently independent to appropriately advise the Committee on compensation matters and that its relationship with WTW does not give rise to any conflict of interest. Going forward, the Committee expects that it will continue to engage WTW and other compensation consultants when and as appropriate and will conduct an assessment of consultants’ independence prior to any such engagement.
42