DEF 14A

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

SCHEDULE 14A

 

(RULE 14a-101)

 

INFORMATION REQUIRED IN PROXY STATEMENT

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. ___)

 

Filed by the Registrant

 

Filed by a Party Other than the Registrant

 

 

Check the appropriate box:

 

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under § 240.14a-12

 

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ABM Industries Incorporated

 

(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 all boxes that apply):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 


 

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February 10, 2023

 

 

Dear Stockholders:

On behalf of the ABM Industries Incorporated Board of Directors, I am happy to report that 2022 was a great year for ABM on several fronts, including strong financial results and significant progress on advancing multiple initiatives in our ELEVATE strategy. I also wanted to take the opportunity to thank you for your ongoing interest, ownership, and support of the Company.

The Board is pleased to use this letter as an opportunity to share our perspectives on ABM’s performance and accomplishments during the past year, which were even more impressive given the very unsettled macroeconomic environment in which they were achieved.

Strategy Oversight and Board Focus

The primary focus of the Board throughout 2022 was to ensure that the Company was well-positioned and appropriately resourced to build on our strengths as the impacts of COVID subsided and our served markets began to normalize. The Board oversaw the management team’s technology and growth-focused operational enhancement efforts, as well as advised on capital allocation priorities to drive long-term stockholder value. The Board’s commitment to responsible corporate governance is unwavering, as are our priorities of judicious risk management, effective executive compensation practices and leadership talent retention. We are also pleased that ABM has a consistent, forward-looking focus on environmentally sustainable and socially responsible initiatives and practices, including diversity and inclusion, which we believe has never been more important.

Fiscal Year 2022 Financial Performance

During 2022, the Company grew revenue 25% to $7.8 billion, through a combination of strong organic growth and growth from acquisitions. Organic growth largely reflected a post-COVID recovery, expansion with existing customers, and also several large new customer wins across the organization. Our acquisition growth was led by Able Services, which we acquired late in fiscal 2021, as well as two acquisitions in 2022, Momentum Support and RavenVolt, Inc.

The Company also significantly grew its net income and adjusted EBITDA in fiscal 2022, which reflected higher operating earnings and excellent execution, as the ABM team was able to largely offset the impacts of a historically tight labor market and wage cost inflation.

Investing in Future Growth and ELEVATE Progress

Our acquisitions of Momentum Support, a leading provider of facility services across Ireland, and RavenVolt, Inc., a leading provider in the fast-growing domain of advanced turn-key microgrid systems, are reflective of our ELEVATE strategy to expand the Company’s core capabilities in attractive and dynamic end-markets.

ABM also made significant inroads on other elements of ELEVATE during 2022. Forward-thinking systems including a team member retention predictive model and a workforce management tool were just a couple of innovations that were developed during the year. The Company also continued to move forward on its cloud-based enterprise resource management system, which is expected to begin being deployed in 2023.

 


 

 

Summary

2022 provided further evidence that ABM has the right positioning, strategy, and management team to deliver consistent and sustainable performance over the long-term. Our size, scale, and balance sheet strength provide a competitive advantage that is unmatched in the facilities services space. The Board is pleased with the trajectory of the Company and will stay focused on raising the standard in everything we do, as well as being a driving force of a cleaner, healthier and more sustainable world.

 

 

Thank you for your continued support.

 

Sincerely,

 

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Sudhakar Kesavan

Chairman of the Board

 

 


 

 

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ABM Industries Incorporated, One Liberty Plaza, 7th Floor, New York, New York 10006

NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS

WHEN

Wednesday, March 22, 2023
10:00 a.m. Eastern Time

PROXY VOTING – CAST YOUR VOTE RIGHT AWAY

Your vote is important. Even if you plan to attend the Annual Meeting in person, please vote as soon as possible using the Internet or by telephone, or by completing, signing, dating and returning your proxy card or voting instruction form.

WHERE

Virtual

www.virtualshareholdermeeting.com/ABM2023

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Using the Internet and voting at the website listed on the proxy card or the notice;

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Using the toll-free phone number listed on your proxy card or voting instruction form; or

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If you received physical proxy materials with an enclosed postage paid envelope, completing, signing, dating and mailing your proxy card or voting instruction form.

ITEMS OF BUSINESS

1.
Election of ten director nominees to serve one-year terms.
2.
Advisory approval of our executive compensation.
3.
Advisory vote on frequency of the advisory vote to approve our executive compensation.
4.
Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2023.
5.
Transaction of such other business as may properly come before the Annual Meeting.

RECORD DATE

Stockholders of record at the close of business on January 25, 2023 are entitled to notice of, and to vote at the Annual Meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON March 22, 2023:

 

The Notice of Annual Meeting, Proxy Statement and the Annual Report to Stockholders

are available on the Internet at www.proxyvote.com.

Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card or voting instruction card you received in the mail.

By Order of the Board of Directors,

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Andrea R. Newborn

Executive Vice President, General Counsel

and Corporate Secretary

 


 

 

TABLE OF CONTENTS

 

 

 

Page

PROXY STATEMENT

 

i

PROXY STATEMENT SUMMARY

 

i

CORPORATE GOVERNANCE AND BOARD MATTERS

 

1

PROPOSAL 1–ELECTION OF TEN DIRECTOR NOMINEES TO SERVE ONE-YEAR TERMS

 

2

Nominees for Election to Serve as Directors for a One-Year Term Expiring in 2024

 

2

The Board of Directors

 

7

Corporate Governance

 

7

Identifying and Evaluating Nominees for Directors

 

8

Board Leadership Structure

 

9

Director Independence

 

9

The Board’s Oversight of Risk Management

 

9

The Board’s Role in Cybersecurity Risk Oversight

 

10

Environmental, Social, and Governance

 

10

Mandatory Retirement

 

13

Outside Board Limits

 

13

Board Committees

 

13

Board and Committee Attendance in Fiscal Year 2022

 

14

DIRECTOR COMPENSATION FOR FISCAL YEAR 2022

 

15

2022 Non-Employee Director Compensation Elements

 

15

2022 Non-Employee Director Compensation Table

 

16

Non-Employee Director Deferred Compensation Plan

 

16

Director Stock Ownership Policy

 

17

EXECUTIVE COMPENSATION

 

18

PROPOSAL 2–ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION

 

19

COMPENSATION DISCUSSION AND ANALYSIS

 

20

Our Compensation Philosophy and Practices

 

20

How We Compensated Our NEOs in 2022

 

26

Other Compensation and Governance-Related Matters

 

33

Compensation Committee Report

 

35

Additional Information About Executive Compensation

 

36

2022, 2021 and 2020 Summary Compensation Table

 

36

Grants of Plan-Based Awards During Fiscal Year 2022

 

37

Outstanding Equity Awards at 2022 Fiscal Year-End

 

38

Option Exercises and Stock Vested in Fiscal Year 2022

 

39

Nonqualified Deferred Compensation in Fiscal Year 2022

 

39

Potential Post-Employment Payments

 

40

2022 CEO Pay Ratio

 

44

FREQUENCY OF SAY-ON-PAY VOTE

 

45

PROPOSAL 3–ADVISORY VOTE ON FREQUENCY OF THE ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

46

AUDIT MATTERS

 

47

PROPOSAL 4–RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING OCTOBER 31, 2023

 

48

AUDIT-RELATED MATTERS

 

49

Audit Committee Report

 

49

Principal Accounting Firm Fees and Services

 

50

Policy on Preapproval of Independent Registered Public Accounting Firm Services

 

50

 

 


 

 

GENERAL INFORMATION

 

51

Certain Relationships and Transactions with Related Persons

 

52

Equity Compensation Plan Information

 

53

Security Ownership of Certain Beneficial Owners

 

54

Security Ownership of Directors and Executive Officers

 

55

Questions and Answers About the Proxy Materials and the Annual Meeting

 

57

Other Business

 

62

Submission of Stockholder Proposals for 2024 Annual Meeting

 

63

Appendix A–Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited)

 

A-1

 

 

Note About Forward-Looking Statements

This Proxy Statement contains both historical and forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. We make forward-looking statements related to future expectations, estimates, and projections that are uncertain and often contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “should,” “target,” or other similar words or phrases. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and assumptions that are difficult to predict. Factors that might cause such differences include, but are not limited to, those discussed in Part 1 of ABM’s Annual Report on Form 10-K for the fiscal year ended October 31, 2022 under Item 1A., “Risk Factors,” and we urge readers to consider these risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

 

 

 


 

 

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PROXY STATEMENT

We are providing the enclosed proxy materials to you in connection with the solicitation by the board of directors (the “Board”) of ABM Industries Incorporated (“ABM” or the “Company”) of proxies to be voted at the Annual Meeting of Stockholders to be held on Wednesday, March 22, 2023 (the “Annual Meeting”). We began making our proxy materials available to stockholders on February 10, 2023.

 

PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting.

 

Annual Meeting of Stockholders

Time and Date:

 

Wednesday, March 22, 2023

10:00 a.m. Eastern Time

Place:

 

www.virtualshareholdermeeting.com/ABM2023

 

Record Date:

 

January 25, 2023

Stockholders of ABM as of January 25, 2023 (the “Record Date”) are entitled to vote. Each share of ABM common stock is entitled to one vote for each director nominee and one vote for each of the other proposals.

Virtual Annual Meeting

We have decided to hold the Annual Meeting virtually again this year because we believe that hosting a virtual Annual Meeting enables us to communicate with our stockholders while supporting the health and safety of our employees, stockholders and communities. We also believe the virtual Annual Meeting format facilitates stockholder access by enabling stockholders to participate fully and equally from any location around the world at no cost.

We have designed the virtual Annual Meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting. Our virtual Annual Meeting will be conducted on the internet via live webcast. Stockholders will be able to attend and participate online and submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/ABM2023. Stockholders will be able to vote their shares electronically during the Annual Meeting.

Stockholders who would like to attend and participate in the Annual Meeting will need the 16-digit control number included on their Notice of Internet Availability of Proxy Materials (the “Notice”), proxy card, or voting instruction form. The Annual Meeting will begin promptly at 10:00 a.m. Eastern Time. We encourage you to access the Annual Meeting prior to the start time. Online access will begin 15 minutes prior to the start of the Annual Meeting, at 9:45 a.m. Eastern Time.

You may submit questions in advance on the day of the Annual Meeting by logging into www.proxyvote.com and entering your 16-digit control number. Once past the log-in screen, click on “Question for Management,” type in the question, and click “Submit.” Alternatively, stockholders will be able to submit questions live during the Annual Meeting by typing the question into the “Ask a Question” field, and clicking submit. We will answer questions that comply with the Annual Meeting rules of conduct during the Annual Meeting, subject to time constraints. Questions relevant to Annual Meeting matters that we do not have time to answer during the Annual Meeting will be posted to our website following the meeting along with those questions that were addressed during the Annual Meeting. Questions regarding personal matters or matters not relevant to Annual Meeting matters will not be answered.

Although the live webcast is available only to stockholders at the time of the Annual Meeting, a replay of the Annual Meeting will be made publicly available for one year at www.virtualshareholdermeeting.com/ABM2023.

Additional information regarding the ability of stockholders to ask questions during the Annual Meeting, related rules of conduct, and other materials for the Annual Meeting, including the list of our stockholders of record, will be available during the Annual Meeting at www.virtualshareholdermeeting.com/ABM2023.

If you have difficulty accessing the meeting, please call the technical support number that will be posted on the virtual Annual Meeting login page for assistance. Technical support will be available beginning approximately 15 minutes prior to the start of the Annual Meeting through its conclusion.

ABM Industries Incorporated 2023 Proxy Statement i


 

 

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Voting Matters and Board Recommendations

 

Proposals

Board Vote

Recommendation

Page Reference

(for more detail)

 

01

 

Election of ten director nominees to serve one-year terms

 

FOR EACH DIRECTOR NOMINEE

 

2

 

02

 

Advisory approval of our executive compensation

 

FOR

 

 

19

 

03

 

Advisory approval of the frequency of the advisory vote to approve our executive compensation

 

EVERY ONE YEAR

 

45

 

04

 

Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2023

 

FOR

 

 

48

 

ABM AT A GLANCE

 

Percentage of Overall Revenue

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SERVICE LINES

JAN = Janitorial

ENG = Facilities Engineering

PKG = Parking

ATS = Technical Solutions

AVI = Aviation Services

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INDUSTRY GROUPS

B&I = Business & Industry

M&D = Manufacturing & Distribution

AVI = Aviation

EDU = Education

ATS = Technical Solutions

 

ABM Industries Incorporated 2023 Proxy Statement ii


 

 

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ABM’s Business Highlights and Accomplishments in Fiscal Year 2022

 

ABM’s 2022 Achievements

We grew revenue 25% to $7.8 billion, comprised of organic growth of 7% and growth from acquisitions of 18%. Organic growth largely reflected a post-COVID recovery, especially in our Aviation industry group, as well as solid demand in our Technical Solutions and Manufacturing & Distribution industry groups, and several new large customer wins. Our acquisition growth was led by Able Services, which we acquired in 2021, and the additions of Momentum Support and RavenVolt, Inc. in 2022.

We also posted net income of $230.4 million, adjusted EBITDA of $498.1 million(1) and a full-year adjusted EBITDA margin of 6.6%(1). These strong results reflect higher segment earnings and were aided by excellent execution, as the ABM team largely offset the impacts of a historically tight labor market and wage cost inflation.

We maintained our long-standing history of returning cash to our stockholders through the continuation of our cash dividend for the 56th consecutive year. Subsequent to fiscal year-end, our Board of Directors increased our quarterly dividend 12.8% to $0.22 per share. This increase reflects the Board’s confidence in ABM’s ability to continue to deliver solid results and cash flows.

We repurchased 2.3 million shares of common stock for a total cost of $97.5 million in fiscal 2022. Subsequent to year end, our Board of Directors approved a $150 million expansion of the Company’s existing share repurchase authorization.

We made two acquisitions during the year. In April, we acquired Momentum Support. Momentum is a leading provider of facility services across the Republic of Ireland and Northern Ireland. The acquisition expands our geographic footprint and provides multiple cross-selling opportunities. In September, we acquired RavenVolt, Inc., a leading provider of advanced turn-key micro-grid systems utilized by diversified commercial and industrial customers, national retailers, utilities, and municipalities.

In fiscal 2021, we acquired Able Services in a transaction valued at $830 million. With annual revenue of $1.1 billion, we believe that Able Services is highly complementary to ABM, as it adds to our scale in engineering and janitorial services, which represent priority growth areas for us over the next five years.

We made significant progress in our ELEVATE initiative during 2022, including developing a team member retention predictive model. We also stared piloting a workforce management tool that provides enhanced visibility into productivity levels across our portfolio of accounts. Lastly, we continued to move forward with our cloud-based enterprise resource management system, which we expect will begin deployment mid-year 2023 as part of our ELEVATE technology roadmap running through 2025.

We released our 2021 Environmental, Social and Governance Sustainability Impact Report. The report highlights the Company’s commitment to the Science Based Targets initiative, the launch of its ABMNext innovation program, and progress advancing corporate sustainability; diversity, equity and inclusion; philanthropy and community engagement.

(1)
Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures. Reconciliations of these financial measures to the nearest GAAP financial measures are set forth in Appendix A to this Proxy Statement.

CORPORATE GOVERNANCE AND BOARD HIGHLIGHTS

Board Composition and Nominees

The following chart reflects the principal occupation, age, tenure and committee memberships of each member of our Board of Directors ("Board"). Ms. Chavez will retire at the 2023 Annual Meeting of Stockholders in accordance with our Director Retirement Policy. Upon the retirement of Ms. Chavez at the 2023 Annual Meeting, and effective upon the election of directors at the 2023 Annual Meeting, the size of the Board will be reduced to ten members. Our Board expresses its deep gratitude to Ms. Chavez for her 25+ years of service and valuable contributions.

ABM Industries Incorporated 2023 Proxy Statement iii


 

 

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Name

Age

Director

Since

Occupation

Independent

Committee

Assignments

Quincy L. Allen

62

2021

Former Chief Marketing Officer of IBM Cloud, IBM Corporation

Yes

Audit

LeighAnne G. Baker

64

2018

Former Senior Vice President and Chief Human Resources Officer, Cargill, Inc.

Yes

Compensation, Chair; Stakeholder and Enterprise Risk

Linda Chavez*

75

1997

Senior Fellow, Niskanen Center

Yes

Compensation; Governance

Donald F. Colleran

67

2018

Former President and Chief Executive Officer of FedEx Express

Yes

Compensation;
Stakeholder and
Enterprise Risk

James D. DeVries**

59

2022

President, ADT Corporation

Yes

 

Art A. Garcia

61

2017

Former Executive Vice President and Chief Financial Officer, Ryder System, Inc.

Yes

Audit, Chair; Stakeholder and Enterprise Risk

Thomas M. Gartland

65

2015

Executive Chairman, SGL TransGroup

Yes

Compensation;
Governance, Chair

Jill M. Golder

60

2019

Former Chief Financial Officer, Cracker Barrel Old Country Store, Inc.

Yes

Audit; Governance

Sudhakar Kesavan

68

2012

Former Executive Chairman, ICF International, Inc.

Yes

Governance

Scott Salmirs

60

2015

President and Chief Executive Officer, ABM Industries Incorporated

No

 

Winifred M. Webb

64

2014

Founder; Kestrel Corporate Advisors

Yes

Audit;
Stakeholder and Enterprise Risk, Chair

*Ms. Chavez will be retiring from the Board at the 2023 Annual Meeting of Stockholders in accordance with our Director Retirement Policy.

**Mr. DeVries has not been assigned to any committees of the Board. Committee assignments will be made at the March 2023 Board of Directors meeting immediately following the 2023 Annual Meeting of Stockholders.

Corporate Governance

Our Board is committed to thoughtful and independent representation of stockholder interests and corporate governance policies and practices that drive long-term stockholder value. The following points summarize certain aspects of our corporate governance:

 

All directors and nominees other than Chief Executive Officer are independent

Robust director and executive officer stock ownership guidelines

Separate Chairman of Board and Chief Executive Officer

Regular executive sessions of independent directors

Director overboarding policy

Risk oversight by Board and Committees

Majority voting with resignation policy for directors in uncontested elections

Declassified Board

Board focused on refreshment and director succession planning

Thorough annual Board and Committee self-evaluation process

Diverse Board that provides a range of viewpoints

Annual Board strategy meeting and review of Company’s strategic plan

 

ABM Industries Incorporated 2023 Proxy Statement iv


 

 

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Director Nominee Skills and Experience Matrix

Our director nominees bring a well-rounded variety of experiences, qualifications, attributes and skills, and represent a mix of perspectives. The director nominee skills and experience matrix below summarizes some of the key attributes that our Board has identified as particularly valuable to the effective oversight of the Company and the execution of our corporate strategy. This director nominee skills and experience matrix is not intended to be an exhaustive list of each of our director nominees’ skills or contributions to the Board. Further information on each director nominee, including some of their specific experience, qualifications, attributes and skills is included in their biographies beginning on page 2 of this Proxy Statement.

 

SKILL

Allen

Baker

Colleran

DeVries

Garcia

Gartland

Golder

Kesavan

Salmirs

Webb

Business Leadership / Strategy.
Service in an executive management position and in formulating and implementing long-term business strategy for a large organization

Specific End Market Industries.
Employment or other direct experience in industries or end markets related to ABM's industry groups

 

 

 

Financial / Capital Allocation.
Financial management of a large and diversified organization and experience with debt and capital markets transactions

 

 

Sales and Marketing.
Experience in leading and executing sales and marketing strategies in a business-to-business environment

 

 

Human Capital / Safety.
Experience in organizational management, compensation programs, talent development, recruiting, diversity and inclusion programs, and employee health and safety

 

Risk Oversight.
Experience in identifying, prioritizing, and managing a broad spectrum of risks, overseeing enterprise risk management and risk mitigation strategies

Information Technology / Cybersecurity.
Expertise in information technology and infrastructure, including cybersecurity

 

 

 

 

 

 

 

 

Other Public Company Board Experience.
Board-level experience at other publicly traded companies

Mergers and Acquisitions.
Experience in analyzing M&A target opportunities, executing transactions, and integrating acquired companies

Environmental.
Experience in managing or overseeing environmental and climate-related programs, policies, and practices, including related reporting

 

 

 

 

 

ABM Industries Incorporated 2023 Proxy Statement v


 

 

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Independence and Tenure

Our Corporate Governance Principles provide that a majority of our directors must be independent. Our Board is comprised of independent directors, with the exception of Mr. Salmirs.

 

Our Board maintains an ongoing commitment to refreshment and proactive assessment of its collective skills, experience and perspectives. 50% of our Board nominees have served on the Board for five or fewer years. The Board and the Governance Committee believe that this balance of experience, continuity and refreshment helps the Board most effectively serve the Company and its stockholders.

 

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Diversity

Our Board and Governance Committee are committed to Board diversity: 30% of our Board nominees are female and 30% are ethnically or racially diverse.

 

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Board Nominees Diversity Matrix

Total Number of Director Nominees

10

Gender Identity

 

Female

Male

Non-Binary

Did Not Disclose Gender

 

 

 

 

 

 

 

Director Nominees

3

7

-

-

 

 

 

 

 

 

 

Number of Director Nominees who identify in any of the categories below:

 

 

 

 

 

African American or Black

-

1

-

-

Asian

-

1

-

-

Hispanic or Latinx

-

1

-

-

White

3

4

-

-

 

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EXECUTIVE COMPENSATION HIGHLIGHTS

Our Compensation Practices

 

What We Do

   Design Compensation Programs to Pay for Performance

   Use Equity Awards for Long-Term Incentive and Retention

   Maintain a Clawback Policy

   Utilize Short-Term and Long-Term Performance-Based Incentives/Measures

   Use an Independent Compensation Consultant

   Require Significant Share Ownership and Retention by Executive Officers

   Limit Perquisites

   Use Double-Trigger Change-in-Control Arrangements

   Hold Annual Say-on-Pay Vote

 

What We Don’t Do

   No Fixed-Term Employment Agreements

   No Gross-Ups for Taxes

   No Repricing of Stock Options

   No Mid-cycle Adjustments to Performance Metrics

   No Hedging and Pledging of ABM Stock

 

Our Executive Compensation Programs

In fiscal year 2022, our compensation programs continued to reflect the compensation philosophy established by our Compensation Committee – one that is intended to align our executives’ compensation with our strategic goals, and motivate and retain executives who are critical to our future success and long-term performance. Key features of our compensation philosophy include:

 

Performance-Based – Tie significant portions of compensation to performance metrics that align to our short-term and long-term business goals;

Align with Stockholder Interests – Align each executive’s interests with stockholders’ interests by requiring significant stock ownership and paying a significant portion of compensation in equity subject to performance conditions and multi-year vesting requirements; and

Market Competitiveness Attract and retain key executives who possess the capability to lead the business forward by providing innovative and effective service to our clients and customers.

 

Elements of Total Direct Compensation:

 

Base Salary – Fixed cash compensation with adjustments tied to individual responsibilities, performance and marketplace dynamics;

Annual Cash Incentive Program – Focuses on near-term performance objectives reflecting Company strategy;

Performance-Based Equity Grants – Aligns business objectives with longer-term stockholder interests; and

Time-Based Equity Grants – Fosters retention by delivering more stable value and continuity of leadership.

 

 

ABM Industries Incorporated 2023 Proxy Statement vii


 

 

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At-Risk Compensation

A significant portion of our executives’ compensation is at risk. At-risk compensation includes: annual cash incentive compensation (“bonus”), which is tied to annual financial and individual performance measures; performance-based equity awards, which are paid only if performance metrics established at the beginning of the three-year performance period are met; and time-based equity awards. Approximately 88% of our CEO’s compensation is at risk. An average of approximately 78% of our other named executive officers’ (“NEOs”) compensation is at risk.

 

CEO COMPENSATION

NEO COMPENSATION

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ABM Industries Incorporated 2023 Proxy Statement viii


 

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

 

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PROPOSAL 1—ELECTION OF TEN DIRECTOR NOMINEES TO SERVE ONE-YEAR TERMS

Nominees for Election to Serve as Directors for One-Year Terms Expiring in 2024

The Board of Directors

Corporate Governance

Identifying and Evaluating Nominees for Directors

Board Leadership Structure

Director Independence

The Board’s Oversight of Risk Management

The Board’s Role in Cybersecurity Risk Oversight

Environmental, Social and Corporate Governance

Mandatory Retirement

Outside Board Limits

Board Committees

Board and Committee Attendance in Fiscal Year 2022

DIRECTOR COMPENSATION FOR FISCAL YEAR 2022

2022 Non-Employee Director Compensation Elements

2022 Non-Employee Director Compensation Table

Non-Employee Director Deferred Compensation Plan

Director Stock Ownership Policy

 

ABM Industries Incorporated 2023 Proxy Statement 1


 

 

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PROPOSAL 1—ELECTION OF TEN DIRECTOR NOMINEES TO SERVE ONE-YEAR TERMS

 

Proposal Summary

We are asking our stockholders to elect ten director nominees to serve on the Board for a one-year term and until their successors are duly elected and qualified. Information about the Board and each director nominee is included in this section. The number of directors is currently fixed at eleven. Upon the retirement of Ms. Chavez at the 2023 Annual Meeting, and effective upon the election of directors at the 2023 Annual Meeting, the size of the Board will be reduced to ten members.

Board Recommendation

The Board unanimously recommends that you vote “FOR” each director nominee. After consideration of each nominee’s qualifications, skills and experience, as well as his or her prior contributions to our Board, the Board believes that each nominee should continue to serve on the Board.

Voting

Unless contrary instructions are received, the shares represented by a properly executed proxy will be voted “FOR” each of the director nominees presented below. If, at the time of the Annual Meeting, one or more of the director nominees has become unavailable to serve, the shares represented by proxies will be voted for the remaining nominees and for any substitute director nominee or nominees designated by the Board unless the size of the Board is reduced. The Board knows of no reason why any of the director nominees will be unavailable or unable to serve.

Director nominees are elected by stockholders by a majority of the votes cast. This means that the number of shares voted “for” a director’s election must exceed 50% of the number of votes cast on the issue of that director’s election at a stockholder meeting as more fully described under “Questions and Answers About the Proxy Materials and the 2023 Annual Meeting” of this Proxy Statement. Any nominee standing for re-election who does not receive a majority of votes cast “for” his or her re-election will be required to tender his or her resignation promptly following the failure to receive the required vote. The Governance Committee will then make a recommendation to the Board as to whether the Board should accept the resignation, and the Board will decide whether to accept the resignation.

Board Declassification

Our Board historically was divided into three classes. As approved by the Company’s stockholders at the 2020 Annual Meeting of Stockholders, the Board is in the process of being declassified over a three-year phase-out period. At the 2023 Annual Meeting of Stockholders, all director nominees elected by our stockholders will be elected to hold office for a term of one year, or until their successors are duly elected and qualified in accordance with our Bylaws, and there will cease to be Board classes at such time.

 

Nominees for Election to Serve as Directors for a One-Year Term Expiring in 2024

 

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Quincy L. Allen

Director Since 2021

Age 62

Mr. Allen is former chief marketing officer of IBM Cloud at IBM Corporation (NYSE: IBM), an international technology solutions company, a position he held from 2015 until his retirement in 2018. Prior to joining IBM, Mr. Allen served as chief marketing and strategy officer at Unisys Corporation (NYSE: UIS), an international information technology services and consulting company, from 2012 to 2015. He previously served as chief executive officer of Vertis Communications, a direct marketing and advertising company, a position held from 2009 to 2010. Prior to Vertis Communications, Mr. Allen held several leadership positions with Xerox Corporation, including serving as president of the Global Services and Strategic Marketing Group and president of Production Systems Group, as well as vice president of Xerox Corporation. Mr. Allen has served on the board of The ODP Corporation (Office Depot) (NASDAQ: ODP) since 2020, the Lumen Technologies Corporation (NYSE:LUMN) since 2021, and previously served on the boards of NCR Corporation (NYSE: NCR) from 2009 to 2012 and Gateway, Inc. from 2006 to 2007.

Mr. Allen’s qualifications to serve on the Board include his extensive operational and technology experience at major multinational technology services corporations, and his background in business development. Mr. Allen also brings public company experience to our Board.

 

ABM Industries Incorporated 2023 Proxy Statement 2


 

 

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LeighAnne G. Baker

Director Since 2018

Age 64

Ms. Baker is former senior corporate vice president and chief human resources officer of Cargill, Inc. (“Cargill”), a global food and agricultural company, a position she held from 2014 until her retirement in 2020. She served as a member of the executive team and was responsible for Cargill’s global human resources strategy and practices. Prior to joining Cargill in 2014, she served as executive vice president and chief human resources officer of Hertz Global Holdings, Inc. (NASDAQ GS: HTZ) from 2007 to 2014. Before joining Hertz, Ms. Baker was senior vice president, global human resources of The Reynolds & Reynolds Company, a leading provider of automotive dealer management systems, from 2005 to 2007. She also served in various management and leadership roles at The Timken Company from 1981 to 2005. Ms. Baker has served on the board of Pactiv Evergreen (NASDAQ: PTVE), a manufacturer and distributor of foodservice, food merchandising products and fresh beverage cartons, since 2020, where she serves as chairwoman of the board, chair of the Compensation Committee and as a member of the Audit Committee.

Ms. Baker’s qualifications to serve on our Board include many years of executive experience for large enterprises, providing extensive expertise in global human resources management, leadership development and large-scale organizational change, as well as her public company board experience.

 

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Donald F. Colleran

Director Since 2018

Age 67

Mr. Colleran is former president and chief executive officer/executive advisor of FedEx Express, a subsidiary of FedEx Corporation, a global provider of supply chain, transportation, business and related information services, a position he held from 2019 until his retirement in 2022. From 2017 to 2019, Mr. Colleran was executive vice president and chief sales officer of FedEx Corporation. He also serves on the FedEx Corporation Strategic Management Committee, which sets the strategic direction for FedEx. Mr. Colleran joined FedEx in 1989, where he has served in a variety of leadership roles including executive vice president, global sales of FedEx Services from 2006 through 2016. He has served as a director of EastGroup Properties, Inc. (NYSE: EGP), an equity real estate investment trust, since 2017, and serves as a member of the Compensation Committee and Nominating and Corporate Governance Committee.

Mr. Colleran’s qualifications to serve on our Board include his extensive experience in a variety of leadership roles at a major, multinational company, including business, sales, leadership, and global operations. Mr. Colleran also brings public company experience to our Board.

 

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James D. DeVries

Director Since 2022

Age 59

Mr. DeVries is president and chief executive officer of ADT Corporation (NYSE: ADT), having been appointed president in September 2017 and chief executive officer in December 2018. He previously served as executive vice president and chief operating officer from 2016 to 2017. Prior to joining ADT, Mr. DeVries served as executive vice president of Brand Operations at Allstate Insurance Company, from 2014 to 2016, and as executive vice president and chief administrative officer from 2008 to 2014. Mr. DeVries has served on the board of ADT, since 2018 and on the board of Amsted industries Inc., a diversified global manufacturer of industrial components serving primarily the railroad, vehicular and construction and building markets, since 2016.

Mr. DeVries’ qualifications to serve on our Board include his extensive business and management experience leading a major national company and serving on its board.

 

ABM Industries Incorporated 2023 Proxy Statement 3


 

 

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Art A. Garcia

Director Since 2017

Age 61

Mr. Garcia retired in 2019 as the executive vice president and chief financial officer of Ryder System, Inc. (NYSE: R), a commercial fleet and supply chain management solutions company (“Ryder”), a position he had held since 2010. Previously, Mr. Garcia served as senior vice president, controller and chief accounting officer of Ryder from 2005 to 2010. Mr. Garcia joined Ryder in 1997 as senior manager of corporate accounting. He later served as director of corporate accounting and, subsequently, as group director of accounting services. Prior to joining Ryder, Mr. Garcia spent 14 years with the Miami office of the accounting firm Coopers & Lybrand LLP as senior manager of business assurance. Mr. Garcia has served on the board of Elanco Animal Health (NYSE: ELAN), a provider of products and services to improve animal health production in more than 90 countries around the world since 2019, and serves as a member of the Audit and Finance Committee and the Oversight Committee, and on the board of American Electric Power (NASDAQ: AEP), an electric public utility company, delivering electricity and custom energy solutions since 2019, where he serves as chair of the Audit Committee and a member of the Finance and Director & Corporate Governance Committees.

Mr. Garcia’s qualifications to serve on our Board include his extensive business, financial and management experience and his experience as a senior financial officer. Mr. Garcia brings valuable accounting, financial management, mergers and acquisitions, and supply chain experience to our Board, as well as public company experience.

 

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Thomas M. Gartland

Director Since 2015

Age 65

Mr. Gartland has been the executive chairman of SGL TransGroup, a privately-held global freight forwarder, since 2017, where he serves as a member of the Audit Committee and Compensation Committee. Mr. Gartland retired in 2014 from his role as president, North America for Avis Budget Group, Inc., a leading global provider of vehicle rental services, a position he had held from 2011 to 2014. Previously, he was executive vice president, Sales, Marketing and Customer Care at Avis Budget Group, Inc. from 2008 to 2011, where he developed the overall strategic direction for marketing and sales. Mr. Gartland was employed by JohnsonDiversey, Inc. from 1994 to 2008, in various high-level capacities, including as president of the company’s North American region from 2003 to 2008, vice president, Sales, Health and Hospitality from 2002 to 2003, vice president, Business Development from 1998 to 2002, with various positions of increasing responsibility within the company from 1994 to 1998. Prior to that, Mr. Gartland served as vice president and director of national accounts at Ecolab, Inc. from 1980 to 1994. Mr. Gartland has served on the board of directors of Xenia Hotels & Resorts, Inc. (NYSE: XHR), a self-advised and self-administered REIT that invests primarily in premium full-service, lifestyle and urban upscale hotels, since 2015 and serves as chair of the Compensation Committee.

Mr. Gartland’s qualifications to serve on our Board include his extensive experience in senior executive positions at major, multinational companies, including sales, operations, financial management, leadership, and mergers and acquisitions. He also brings public company board experience to our Board.

 

ABM Industries Incorporated 2023 Proxy Statement 4


 

 

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Jill M. Golder

Director Since 2019

Age 60

Ms. Golder is former senior vice president and chief financial officer of the restaurant and gift store chain Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), a position she held from 2016 until her retirement in 2020. She previously served in finance leadership roles at Ruby Tuesday, Inc. from 2013 to 2016, including as executive vice president and chief financial officer from 2014 to 2016. Ms. Golder served in progressively more responsible finance positions during her 23 years at Darden Restaurants, Inc., including senior vice president finance for Olive Garden, senior vice president finance of Smokey Bones, senior vice president finance of Specialty Restaurant Group and senior vice president finance of Red Lobster. Ms. Golder has served on the board of Sysco, Inc. (NYSE: SYY), a global leader in selling, marketing and distributing food and non-food products to restaurants, healthcare and educational facilities, lodging establishments and other customers around the world since 2022, and serves as a member of the Audit and the Technology Committees, and served on the board of IZEA Worldwide, Inc. (NASDAQ: IZEA), an influencer marketing technology company, in 2021, and from 2015 to 2019.

Ms. Golder’s qualifications to serve on our Board include her extensive financial experience in a variety of leadership roles at various major, multinational companies, where she managed the financial teams and oversaw business continuity planning and cybersecurity efforts. Ms. Golder also brings public company experience to our Board.

 

 

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Sudhakar Kesavan

Director Since 2012

Age 68

Mr. Kesavan is former chief executive officer and executive chairman of ICF International, Inc. (NASDAQ: ICFI), a leading provider of consulting services and technology solutions to government and commercial clients (“ICF International”). He served as chairman and chief executive officer from 1999 to 2019 and as executive chairman from 2019 until his retirement in 2020. Previously, Mr. Kesavan served as the president of ICF Consulting Group, a subsidiary of ICF Kaiser, from 1997 to 1999. Mr. Kesavan serves on the boards of Inova Health Systems, a not-for-profit healthcare system based in Northern Virginia, Cadmus Group and Dexis, serves as board member emeritus for Northern Virginia Technology Council and serves as a trustee of the Shakespeare Theater Company in Washington, DC.

Mr. Kesavan’s qualifications to serve on our Board include his leadership and operational experience gained from serving as a chief executive officer and director of another public company. Mr. Kesavan brings valuable experience leading both organic growth and acquisition activities, a thorough understanding of corporate governance, compensation expertise, and operations, industry, public company board, financial, mergers and acquisitions, government and government relations, and global operations experience to our Board.

 

ABM Industries Incorporated 2023 Proxy Statement 5


 

 

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Scott Salmirs

Director Since 2015

Age 60

Mr. Salmirs is president and chief executive officer of the Company, a position he has held since 2015. Previously, he served as executive vice president of the Company from 2014 to 2015, with global responsibility for the Company’s aviation division and all international activities. Mr. Salmirs served as executive vice president of ABM Janitorial Services – Northeast from 2003 to 2014. Prior to joining the Company, Mr. Salmirs held various leadership positions at Goldman, Sachs & Company (NYSE: GS), Lehman Brothers, Inc., and CBRE Group (NYSE: CBRE). Mr. Salmirs has served as a director of ICF International (NASDAQ: ICFI) since 2021, where he serves on the Governance and Nominating Committee and the Human Capital Committee. He also serves on the board of Outreach, a New York nonprofit organization dedicated to rehabilitating teens with substance abuse issues, is a founding board member of Donate Eight, a nonprofit group associated with LiveOnNY, and also serves on the Business Advisory Council for the business program at SUNY Oneonta.

Mr. Salmirs’ qualifications to serve on our Board include his experience in the facility services industry, and his knowledge of and perspective on the Company as its president and chief executive officer. Mr. Salmirs brings valuable leadership skills and operations, financial management, industry, mergers and acquisitions, sales and marketing, and global operations experience to the Board.

 

 

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Winifred (Wendy) M. Webb

Director Since 2014

Age 64

Ms. Webb founded Kestrel Corporate Advisors, an advisory services firm, counseling organizations on strategic business issues, in 2013. From 2010 to 2013, she was managing director for Tennenbaum Capital Partners. Ms. Webb was a member of the corporate executive team for Ticketmaster from 2008 to 2010. She served for 20 years with The Walt Disney Company, from 1988 to 2008, in various senior positions including corporate senior vice president of investor relations and shareholder services, and governance outreach. She was also executive director for The Walt Disney Company Foundation. Before Disney, she held roles in investment banking. She has served on the boards of directors of Wynn Resorts, Limited (NASDAQ: WYNN) since 2018, serving as chair of the Audit Committee, and AppFolio, Inc. (NASDAQ: APPF) since 2019, where she is chair of the Audit Committee and a member of the Nominating and Corporate Governance, and Risk and Compliance Oversight Committees. Ms. Webb also has served on the board of trustees of AMH (NYSE: AMH), since 2019, and is a member of the Human Capital and Compensation, and Nominating and Corporate Governance Committees. She previously served on the boards of TiVo Inc. (2016), Jack in the Box Inc. (2008 to 2014), and nonprofit PetSmart Charities, Inc. (2014 to 2016). She served as co-chair of nonprofit WomenCorporateDirectors, LA/OC Chapter (2017 to 2020). Ms. Webb has been recognized as an NACD Directorship 100 honoree, a WomenInc. Most Influential Corporate Board Director, and a Directors & Boards Director to Watch.

Ms. Webb’s qualifications to serve on our Board include her experience in senior management at global public companies and her experience in the global financial services industry. Ms. Webb brings valuable public company board, investor relations, communications, media and public relations, treasury, corporate governance, global operations, corporate social responsibility, strategic planning, mergers and acquisitions, investment banking and capital markets experience to our Board.

 

ABM Industries Incorporated 2023 Proxy Statement 6


 

 

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The Board of Directors

 

Name and Principal Occupation

Age

Director

since

Independent

Committee memberships

 

 

 

 

AC

CC

GC

SER

Quincy L Allen

Former Chief Marketing Officer of IBM Cloud,
IBM Corporation

62

2021

Yes

 

 

 

LeighAnne G. Baker

Former Senior Vice President and Chief Human Resources Officer, Cargill, Inc.

64

2018

Yes

 

 

Linda Chavez**

Senior Fellow, Niskanen Center

75

1997

Yes

 

 

Donald F. Colleran

Former President and Chief Executive Officer of FedEx Express, a subsidiary of FedEx Corporation

67

2018

Yes

 

 

James D. DeVries***

President and Chief Executive Officer, ADT Corporation

59

2022

Yes

 

 

 

 

Art A. Garcia

Former Executive Vice President and Chief Financial Officer, Ryder System, Inc.

61

2017

Yes

‡*

 

 

Thomas M. Gartland

Executive Chairman of SGL TransGroup; Former President, North America of Avis Budget Group, Inc.

65

2015

Yes

 

 

Jill M. Golder

Former Chief Financial Officer, Cracker Barrel Old Country Store, Inc.

60

2019

Yes

*

 

 

Sudhakar Kesavan†

Former Executive Chairman, ICF International, Inc.

68

2012

Yes

 

 

 

Scott Salmirs

President and Chief Executive Officer, ABM Industries Incorporated

60

2015

No

 

 

 

 

Winifred (Wendy) M. Webb

Founder, Kestrel Corporate Advisors; Former Senior Executive at Ticketmaster and The Walt Disney Company

64

2014

Yes

*

 

 

Legend:

AC – Audit Committee: CC – Compensation Committee; GC – Governance Committee; SER – Stakeholder and Enterprise Risk Committee

 

Indicates Board Chair

Indicates Committee Chair

*

Indicates Audit Committee Financial Expert

**

Ms. Chavez will be retiring from the Board at the 2023 Annual Meeting of Stockholders in accordance with our Director Retirement Policy.

***

Mr. DeVries has not been assigned to any committees of the Board. Committee assignments will be made at the March 2023 Board of Directors meeting immediately following the 2023 Annual Meeting of Stockholders.

Corporate Governance

Our Board has adopted Corporate Governance Principles that reflect our commitment to sound corporate governance and the role of governance in building long-term stockholder value. Our Corporate Governance Principles, which include our independence standards, can be found on our website at http://investor.abm.com/corporate-governance.cfm. Other information relating to our corporate governance is also available on our website at the same address, including our Bylaws, our Code of Business Conduct, and the Charters of our Audit Committee, Compensation Committee, Governance Committee, and Stakeholder and Enterprise Risk Committee. These documents are also available in printed hard-copy format upon written request to the Corporate Secretary at the Company’s corporate headquarters.

ABM Industries Incorporated 2023 Proxy Statement 7


 

 

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Identifying and Evaluating Nominees for Directors

Our Board is responsible for selecting nominees for election as directors. The Board delegates the screening process to the Governance Committee with the expectation that other members of the Board will participate in this process, as appropriate. The Governance Committee does not have specific minimum qualifications that must be met for a potential candidate to be nominated to serve as a director of the Company. The Governance Committee periodically reviews the skills and types of experience that it believes should be represented on the Board in light of the Company’s current business needs and strategy. The Governance Committee then uses this information to consider whether all of the identified skills and experience are represented on the Board. Based upon its review, the Governance Committee may recommend to the Board that the expertise of the current members should be supplemented. The Governance Committee takes these factors into account when looking for candidates for the Board. Candidates recommended by the Governance Committee are subject to approval by the full Board. Our Governance Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are anticipated because of retirement or otherwise. In the event that any vacancy is anticipated, or otherwise arises, the Governance Committee considers various potential candidates for director.

Our Governance Committee recommends to the Board the criteria for director candidates, and the Board establishes the criteria. The Governance Committee is also responsible for reviewing with the Board the requisite skills and characteristics of new Board candidates and current Board members in the context of the current composition of the Board.

In analyzing director nominations and director vacancies, our Governance Committee seeks to recommend candidates for director positions who will create a collective membership on the Board with varied experience, backgrounds and perspectives, including the specific qualifications of industry knowledge; accounting and finance; management; leadership; business strategy and operations; corporate governance; other public board experience; and risk management, and also seeks diversity in its directors, including but not limited to diversity in the areas of race, ethnicity, national origin, gender, and age.

With individual members of the Board, the Governance Committee seeks individuals that have leadership in other organizations and have significant experience in a specific area or endeavor, and who understand the role of a public company director and can provide insights and practical wisdom based on their experience and expertise.

The Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director, such as professional search firms and the relationships of current directors. In the case of a search firm, the Governance Committee will pay a fee for such a firm to assist it in the recruitment and identification of potential candidates for the Board. The Governance Committee generally provides the search firm with guidance as to the qualifications, qualities and skills that the Governance Committee is seeking in potential candidates, and the search firm identifies candidates for the Governance Committee’s consideration. When identifying new candidates for Board membership, the Governance Committee includes, and requests that any such search firm it engages include, highly qualified women and racially and ethnically diverse persons in the initial pool from which potential director candidates are chosen in accordance with the Corporate Governance Principles. Mr. DeVries, a nominee for election at the Annual Meeting, was elected to the Board in 2022 and initially recommended to the Governance Committee by a search firm that also presented several other candidates for consideration. After the Governance Committee evaluated Mr. DeVries' candidacy for the Board (including, without limitation, through his interviews with directors, completion of a questionnaire and related procedures), it then determined to recommend him to the Board for election.

Candidates may also come to the attention of the Governance Committee through stockholders or other persons. The Governance Committee will consider such candidates on the same basis and in the same manner as it considers all director candidates. Stockholders wishing to submit candidates for election as directors should provide the names of such candidates to the Corporate Secretary, ABM Industries Incorporated, One Liberty Plaza, New York, New York 10006. See “Questions and Answers About the Proxy Materials and the 2023 Annual Meeting” for more information on submitting stockholder director nominations to the Company.

Our directors are expected to prepare for, attend and participate in Board meetings and meetings of the Committees of the Board on which they serve. They are also expected to meet as frequently and spend as much time as necessary to properly discharge their responsibilities and duties as directors and to arrange their schedules so that other existing and planned future commitments do not materially interfere with their service as a director. Directors who are full-time employees of ABM or who serve as chief executive officers or in equivalent positions at other public companies may not serve on the boards of more than one other publicly traded company. Other directors may not serve on the boards of more than three other publicly traded companies. Service on other boards and other commitments are considered by the Governance Committee and the Board when reviewing Board candidates.

ABM Industries Incorporated 2023 Proxy Statement 8


 

 

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Board Leadership Structure

The Company currently has separate persons serving as its Chairman and its Chief Executive Officer, in recognition of the differences between the two roles. The Chief Executive Officer (Mr. Salmirs) has general and active management over the business and affairs of the Company, subject to the control of the Board. The Chairman of our Board (Mr. Kesavan) is charged with presiding over all meetings of the Board and our stockholders, as well as providing advice and counsel to the Chief Executive Officer, coordinating the preparation of agendas, keeping directors informed of matters impacting the Company, and maintaining contact with the Company’s General Counsel.

The Board believes that at this time, the separation of these roles is the most appropriate and effective leadership structure, because this structure best serves the Board’s ability to carry out its roles and responsibilities on behalf of ABM's stockholders, including the Board’s oversight of ABM's management and ABM's overall corporate governance. The Board also believes that the current structure allows our Chief Executive Officer to focus on most effectively managing ABM.

Mr. Kesavan’s extensive management, operations, and leadership experience provides him with unique capabilities and insight, which are brought to bear in the performance of his responsibilities as Board Chairman. In particular, with respect to risk oversight, Mr. Kesavan is well positioned as a result of his risk management background of over 20 years as chief executive officer of another multinational public company. Mr. Kesavan leverages this knowledge and experience to provide leadership for the Board on the material risks facing ABM and to help guide the Board’s independent oversight of the Company’s risk exposures through his input in the Board’s meeting agendas and his facilitation of communications between the Board and management.

Director Independence

Our Corporate Governance Principles provide that a majority of our directors must be independent; Further, the Committee Charters for our Audit Committee, Compensation Committee, Governance Committee, and Stakeholder and Enterprise Risk Committee require all members be independent. Each year, our Governance Committee reviews the independence of each of our directors under applicable New York Stock Exchange (“NYSE”) listing standards and considers any current or previous employment relationships as well as any transactions or relationships between our Company and our directors or any members of their immediate families (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder). The purpose of this review is to determine whether any relationships or transactions exist that preclude a director from being deemed independent under applicable NYSE listing standards or are otherwise inconsistent with a determination that the director is independent.

Our Governance Committee has affirmatively determined and recommended to our Board, and the Board has affirmatively determined, that each of our currently-serving directors and director nominees (including Messrs. Allen, Colleran, DeVries, Garcia, Gartland, and Kesavan and Mmes. Baker, Chavez, Golder, and Webb) other than Mr. Salmirs, our Chief Executive Officer, is independent under applicable NYSE and Securities and Exchange Commission (“SEC”) rules and regulations.

The Board’s Oversight of Risk Management

Company management is responsible for day-to-day risk management activities. Our management has implemented an enterprise risk management (“ERM) process designed to work across the Company to assess, govern and manage risks identified by management in the short-, intermediate- and long-term and manage the Company’s response to those risks. Management performs an annual risk assessment, which considers industry trends, benchmarks and internal surveys of key employees. Additionally, in fiscal year 2022 the Company’s management engaged an independent third-party expert to assist the Company in its enterprise risk identification and assessment processes. The third-party’s review included (i) potential future enterprise risks, (ii) feedback regarding management’s risk appetite and risk evaluation processes, and (iii) assistance in executing and evaluating the outcomes of the Company’s annual risk identification and assessment processes.

The Board, acting directly and through its committees, is responsible for the oversight of management’s ERM process and the Company’s risk management programs and processes generally, including oversight of the Company’s business to evaluate whether systemic risks are being addressed. The Board’s and its Stakeholder and Enterprise Risk Committee’s oversight of the ERM process includes providing input with respect to the risks identified in the ERM process, including significant emerging risks, and discussions with management about how such risks are being addressed and mitigated at the Company. Management regularly provides reports to the Stakeholder and Enterprise Risk Committee covering the ERM process, including summaries of the findings and recommendations of third-party experts.

ABM Industries Incorporated 2023 Proxy Statement 9


 

 

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Our Stakeholder and Enterprise Risk Committee assists the Board in fulfilling its oversight responsibilities relating to the Company’s identification, evaluation and mitigation of strategic and operational risks, and relating to the Company’s ERM program. The Stakeholder and Enterprise Risk Committee also (i) oversees risks related to the Company’s policies and practices regarding certain social issues, including, but not limited to, diversity, culture and inclusion, employee engagement, talent development and safety, (ii) receives and reviews presentations on selected risk topics, including emerging risks, and (iii) provides oversight to management relating to stakeholder risks, including, but not limited to, risks related to social, environmental (including climate change) and cybersecurity matters.

Our Audit Committee reviews and discusses guidelines and policies with respect to risk assessment and risk management, the Company’s major financial risk exposures (including risks relating to the Company’s accounting, reporting and financial practices, including financial controls) and the steps management has taken to monitor and control these exposures. The Audit Committee also assists the Board in its oversight of the Company’s compliance with legal and regulatory requirements.

Our Compensation Committee reviews and assesses annually risks arising from the Company’s compensation policies and practices for its employees and whether any such risks are reasonably likely to have a material adverse effect on the Company, as further discussed in “Compensation Discussion and Analysis” later in this Proxy Statement.

Our Governance Committee reviews and assesses risks associated with board structure and other corporate governance policies and practices, and whether any such risks are reasonably likely to have a material adverse effect on the Company.

In fulfilling their oversight responsibilities, all committees receive regular reports on their respective areas of responsibility from members of management. Each committee reports regularly to the full Board on its activities, including on matters relating to risk oversight. In addition, the Board participates in regular discussions in executive sessions led by the Chairman of the Board and with the Company’s senior management on many key subjects, including strategy, industry group performance, operations, information systems, finance, and legal.

The Board’s Role in Cybersecurity Risk Oversight

Enterprise cybersecurity risk management is an important focus of our Board. The Board reviews the Company’s cybersecurity programs and oversees the conduct of the Company’s business to evaluate whether the Company’s risks relating to cybersecurity are being addressed. ABM has a dedicated Chief Information Security Officer (”CISO”) whose team is responsible for leading our information security policies, practices and architecture, which aim to deter, prevent and respond to cybersecurity risks. The CISO provides regular reports and updates at meetings of the Stakeholder and Enterprise Risk Committee and the Board throughout the year. Such reports cover the Company’s information technology cybersecurity training and awareness program, including NIST framework alignment, maturity road-mapping, external third-party risk, summaries of internal cyber/phishing related trainings provided to employees, as well as the evolving cybersecurity threat landscape. Additionally, these reports may include summaries of mitigation plans (for example, disaster recovery, business continuity, crisis and incident response planning), as well as the testing or validation of the effectiveness of such plans both internally and via third-party subject matter experts.

Environmental, Social, and Governance (“ESG”)

Our Company’s mission is to make a difference every person, every day. As a company with more than 110 years of history and experience, we embrace our role in taking care of people, places and spaces, and we strive to do so in ways that are ethical, respectful, inclusive, and environmentally sustainable. We understand the need to embed and integrate responsible ESG business practices into and within our operations in order to support the long-term success of our business, stockholders, employees, and clients.

 

We have established, and in 2022 continued to execute against, three areas of focus that serve as the guiding principles for the long-term advancement of our environmental, social, and related corporate responsibility strategies:

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DOING BUSINESS IN A RESPONSIBLE WAY Ensure the compliance with ethical business practices across our entire value chain; bring sustainable services to market that positively contribute to our clients’ environmental performance; and engage with the local communities where we operate. ENSURING OUR TEAM MEMBERS’ WELL-BEING Contribute to the professional and personal development of our team members while ensuring a safe and healthy work environment. MANAGING OUR ENVIRONMENTAL FOOTPRINT Act consistently with our offering of sustainable services and continue to grow our environmentally friendly practices to manage the carbon footprint of our own operations.

Doing Business in a Responsible Way

Since its inception more than 100 years ago, ABM has strived to implement ethical business practices, and we have developed our Code of Business Conduct to promote ABM’s principles of respect, integrity, collaboration, innovation, trust and excellence throughout our operations. Our Code of Business Conduct covers topics including conflicts of interest, duty of loyalty, gifts and gratuities, bribery and corruption and harassment and discrimination, among others. Our Code of Business Conduct provides for our core values of respect, integrity, collaboration, innovation, trust, and excellence to be applied throughout our operations. Our Code of Business Conduct serves as a critical tool to help all of us recognize and report unethical conduct, while preserving and nurturing our culture of honesty and accountability. We reinforce these practices through an annual comprehensive training and certification program on our Code of Business Conduct for our Board and all of our staff and management employees.

We also maintain a Supplier Code of Conduct, reflecting the policies of ABM concerning compliance with all applicable laws, respect for human rights, environmental conservation and the safety of products and services.

Ensuring our Team Members’ Well-Being – Human Capital Strategy

Our human capital strategy is grounded and guided by our values and our employees. We prioritize our human capital development in order to conduct business in a responsible way and enable our employees to be treated in a fair and respectful manner with opportunities for continued growth. The execution of this strategy is overseen at the highest levels of our organization, including our Board, our Board’s Stakeholder and Enterprise Risk Committee, as well as across our senior management team.

Delivering a safe workspace where our people feel valued and able to develop their potential is one of our main drivers to make a difference, and the cornerstone of our comprehensive risk management and safety program is safety awareness. We have established a “safety-first” culture through various programs and initiatives including, but not limited to, incorporation into our daily shift protocols, training, and alignment with our corporate incentive plans.

“Enhancing the Team Member Experience” is one of the main pillars of our ELEVATE strategy, and we have made strategic investments designed to attract, develop, and retain talent and to help our operators manage labor with more efficiency.

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Our online training platform, ABMUniversity, provides our staff and management employees with access to a wide range of training courses, videos, reference material, and other tools. Outside of ABMUniversity, our frontline employees receive on-the-job training to enable them to execute their functions at the highest level for our clients.

In 2021, we successfully piloted a frontline leadership training program, which then launched enterprise-wide in 2022. Through this program, we are aiming to develop the management and coaching skills of frontline supervisors to improve the employee experience, create an environment for career growth, and increase retention.

Ensuring our Team Members’ Well-Being – Diversity, Equity, and Inclusion

Grounded by our mission and guided by our values, we actively seek to employ individuals from all backgrounds with the talent, experience, and compassion that enable us to best deliver for those we serve. We cultivate a culture aimed at helping our employees feel seen, heard, and valued.

Diversity, equity, and inclusion are core to this culture. Inviting different perspectives and driving inclusion enables us to connect meaningfully, adapt, innovate, and bring lasting change. In 2020, we established the Company’s Culture and Inclusion Leadership Council, supported by our executive leadership team and guided by our employees. This council is focused on how ABM successfully converts its values into measurable action. In 2022, the Culture and Inclusion Leadership Council operationalized its structure to align with business objectives and ABM’s ELEVATE strategy and identified three strategic priorities focused on driving meaningful change for our people, our culture and our business. Through the Culture and Inclusion Leadership Council’s leadership, ABM aims to focus on making an impact to:

Workforce Diversity and Equity: foster a diverse workforce with equitable opportunities for all employees
Workplace Inclusion and Belonging: cultivate a culture of inclusion so that every team member feels seen and heard
Marketplace and Community: increase positive impact for our clients, partners and communities with service

Activities of the Culture and Inclusion Leadership Council are reported to the Board’s Stakeholder and Enterprise Risk Committee through management presentations on matters such as corporate culture, and diversity, equity, and inclusion.

We are an Equal Opportunity and Affirmative Action employer in compliance with the requirements of the Executive Order 11246 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act.

Managing our Environmental Footprint

We recognize our role in reducing our impact on the environment and we continuously improve our environmental and sustainability reporting processes. In 2022, we chose to work with the Science Based Targets initiative to assist with our development of ABM’s carbon reduction targets in line with the Paris Agreement goals.

Through our wide and growing range of environmentally-mindful product and service offerings, we seek to help our clients optimize their operations, reduce their environmental footprint, and meet their environmental goals. With our ABM GreenCare® program leading the way, we provide clients with cleaning products and methods that minimize environmental impacts, optimize waste management and recycling, and provide water conservation and energy reduction services, among other benefits.

Further, as one of the largest providers of electric vehicles (EV) charging design, installation, and maintenance in North America, ABM is a critical driver of supporting the booming demand for EV capacity while helping build a resilient, and responsible EV infrastructure. The Company’s significant role in leading the adoption of EV charging in the United States was recognized in 2022 with the SEAL Awards’ Sustainable Service Award.

Since 2011, we have voluntarily published a ESG Impact Report on an annual basis, which aligns with the Global Reporting Initiative framework, and since 2020, also with the disclosure framework of the Sustainability Accounting Standards Board.

ESG Governance & Reporting

To advance the comprehensive development and execution of our ESG strategy, we maintain an active dialogue with our diverse stakeholders, our clients, vendors, employees, and investors, and the communities in which we live and work. Through these engagements, we identify and prioritize the issues and opportunities that impact our business

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through a materiality assessment verified by an independent, third-party consultant, and we adhere to the principles of inclusion, materiality, responsiveness in alignment with the AA100 principles.

Our Board is responsible for overseeing the Company’s activities and practices relating to ESG. Our Board receives regular reports from meetings of its Stakeholder and Enterprise Risk Committee, which is responsible for the oversight of (i) social matters, including, but not limited to, diversity, culture and inclusion, employee engagement, and talent development, (ii) safety, (iii) environmental issues, including, but not limited to, sustainability and climate change, and (iv) enterprise and strategic risks. Our Board also receives regular reports from meetings of its Governance Committee, which is responsible for oversight of our Company’s corporate governance practices.

Since 2011, we have voluntarily published an ESG Impact Report on an annual basis, which aligns with the Global Reporting Initiative framework and the disclosure framework of the Sustainability Accounting Standards Board. Additional information about our ESG performance, progress, and goals can be found in the corporate sustainability section of our corporate website.

Mandatory Retirement

The Board has adopted a retirement policy for directors who attain the age of 73, subject to waiver by the Board if the Governance Committee and Board each deem a director’s continued service is in the best interests of the Company.

Outside Board Limits

We limit the number of other public company boards our directors may join to ensure that our directors are able to rigorously prepare for and participate in Board and Committee meetings, to ask direct questions and require straight answers, and to spend the time needed, including by meeting as frequently as necessary, to properly discharge their responsibilities and duties as directors. Directors who are full time employees of the Company or who serve as chief executive officers or equivalent positions at other public companies may not serve on more than one other board of a publicly-traded company. Other directors may not serve on more than three other boards of public companies. Any director seeking to join the board of directors of another public company or for-profit organization must first notify the Governance Committee before accepting an invitation to serve on another board.

Board Committees

The Board has four standing committees: the Audit Committee, the Compensation Committee, the Governance Committee and the Stakeholder and Enterprise Risk Committee. Each committee is composed solely of independent directors, meets periodically throughout the year, reports its actions and recommendations to the Board, receives reports from senior management, meets regularly in executive session, annually evaluates its performance and has the authority to retain outside advisors. Annually, or more frequently, as needed, our Governance Committee reviews committee assignments and makes recommendations to the Board with respect to committee membership, taking into consideration each director’s qualifications and the desire to refresh committee membership. The primary responsibilities of each committee, as well as membership of each committee, as of the date of this Proxy Statement, are summarized below. Each committee is governed by a charter, which sets forth the applicable responsibilities for each committee. For more information, see the committee charters on the corporate governance section of our website at http://investor.abm.com/corporate-governance.cfm.

 

Audit Committee

 

 

Art A. Garcia, Chair

Quincy L. Allen

Jill M. Golder

Winifred M. Webb

 

Key Oversight Responsibilities

 

 

Appointment, compensation, retention and oversight of the work of the independent auditor, including review of audit/nonaudit services
provided

Scope and results of the independent auditor’s audit

Review of financial reporting activities, including quarterly and annual financial statements, and accounting standards/principles used

Internal audit functions

Disclosure controls and internal controls

 

 

The Board has determined that each member of the Audit Committee is independent and financially literate and that Mr. Garcia, Ms. Golder and Ms. Webb each qualifies as an “audit committee financial expert” under applicable SEC rules.

 

 

 

The Audit Committee met seven times in fiscal year 2022.

 

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Compensation Committee

 

 

LeighAnne G. Baker, Chair

Linda Chavez

Donald F. Colleran

Thomas M. Gartland

 

Key Oversight Responsibilities

 

 

Recommend CEO compensation to the full Board and conduct performance evaluation

Approve other non-CEO executives’ compensation

Approve equity plans and awards

Review of compensation structure

Approve executive employment and severance agreements

 

 

 

The Compensation Committee met eight times in fiscal year 2022.

 

Governance Committee

 

 

Thomas M. Gartland, Chair

Linda Chavez

Jill M. Golder

Sudhakar Kesavan

Key Oversight Responsibilities

 

 

Director recruitment

Corporate governance

Board committee structure, membership and evaluations of Board and committees

Director compensation

Executive and Board succession planning, to the extent not conducted by the full Board

 

 

 

The Governance Committee met five times in fiscal year 2022.

 

Stakeholder and Enterprise Risk Committee

 

 

Winifred M. Webb, Chair

LeighAnne G. Baker

Donald F. Colleran

Art A. Garcia

 

 

Key Oversight Responsibilities

 

 

Social matters, including, but not limited to, diversity, culture and inclusion, employee engagement, talent development and safety, and risks related to such matters

Environmental issues, including, but not limited to, sustainability and climate change

Assist the Board in its oversight of the Company’s enterprise risk management program

Assist the Board in fulfilling its oversight responsibilities relating to the Company’s identification, evaluation and mitigation of strategic and operational risks

 

 

 

The Stakeholder and Enterprise Risk Committee met four times in fiscal year 2022.

Board and Committee Attendance in Fiscal Year 2022

During fiscal year 2022, the Board held seven meetings. Together, the directors attended 99% of the meetings of the Board and 97% of the committees on which the directors served during fiscal year 2022. Each director attended 93% or more of the aggregate of: (i) the total number of meetings held by our Board (during the period for which he or she was a director); and (ii) the total number of meetings held by all Board committees on which he or she served (during the period for which he or she served).

Our Board meets in executive session during each regularly scheduled Board meeting, with the Chairman of the Board presiding at such executive sessions, and may meet in executive session during specially called meetings.

We do not have a policy regarding directors’ attendance at our annual meetings of stockholders; however, all directors are encouraged to attend. All of our then current directors attended the 2022 Annual Meeting of Stockholders.

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DIRECTOR COMPENSATION FOR FISCAL YEAR 2022

ABM compensates non-employee directors through a combination of annual cash retainers, fees relating to chairing or serving on a committee, and equity grants. ABM also reimburses its directors for out-of-pocket expenses incurred in attending Board and Committee meetings. Equity awards to non-employee directors in fiscal year 2022 were granted under our stockholder-approved 2021 Equity and Incentive Compensation Plan. The Governance Committee reviews the compensation of non-employee directors periodically and recommends changes to the Board whenever it deems appropriate. Semler Brossy Consulting Group, LLC (“Semler Brossy”), the Compensation Committee’s independent consultant, periodically provides information regarding non-employee director compensation to the Governance Committee. No changes were made to non-employee director compensation in fiscal year 2022. Directors who retire pursuant to our Director Retirement Policy will receive an additional cash payment in lieu of the annual equity grant equal to the prorated value of the equity grant to the date of retirement. The following table describes the components of the non-employee director compensation program in effect during 2022.

2022 Non-Employee Director Compensation Elements

 

Compensation Element

2022 Compensation Program

Annual Board Cash Retainer

$175,000 for Chairman of the Board
$85,000 for other non-employee directors

Annual Board Equity Retainer

$180,000 for Chairman of the Board (vesting after one year from grant date)
$150,000 for other non-employee directors (vesting after one year from grant date)

Board and Committee Meeting Attendance Fees

None

Annual Chair Cash Fees

$15,000 for Audit Chair
$10,000 for Compensation Chair
$10,000 for Governance Chair
$10,000 for Stakeholder and Enterprise Risk Chair

Annual Committee Member Retainer*

 

*The Chairman of the Board does not receive a separate retainer for Committee memberships

$20,000 for Audit members
$12,500 for Compensation members
$10,000 for Governance members
$10,000 for Stakeholder and Enterprise Risk members

Ad Hoc Committee Service or Investment of Significant Time Above and Beyond the Requirements of Board or Committee Service*

$2,000 per day*

*The Chairman of the Board is not eligible to receive such payments

*No directors received any such payments in 2022

 

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2022 Non-Employee Director Compensation Table

 

 

Fees
Earned or
Paid in
Cash
(1)

Stock
Awards
(2)

All Other
Compensation
(3)

Total

Name*

($)

($)

($)

($)

Quincy L. Allen

104,583

149,959

 

4,619

259,161

LeighAnne G. Baker

117,083

149,959

 

2,783

269,825

Linda Chavez

107,083

149,959

 

9,327

266,369

Donald F. Colleran

107,083

149,959

 

2,783

259,825

James D. DeVries

14,167

49,962

(4)

249

64,378

Art A. Garcia

129,583

149,959

 

11,522

291,064

Thomas M. Gartland

116,875

149,959

 

10,712

277,546

Jill M. Golder

114,583

149,959

 

2,783

267,325

Sudhakar Kesavan(5)

175,000

179,977

 

3,340

358,317

Winifred M. Webb

124,375

149,959

 

10,336

284,670

 

*Mr. Salmirs is a member of the Board and President and Chief Executive Officer of ABM. His compensation for fiscal year 2022 is reported in the 2022, 2021 and 2020 Summary Compensation Table and other sections of this Proxy Statement. In fiscal year 2022, Mr. Salmirs did not receive any compensation for his service on the Board.

(1)
Amount includes annual Board cash retainers, Committee chair cash fees, and Committee member cash retainers.
(2)
The value of stock awards shown in the “Stock Awards” column is based on the grant date fair value computed in accordance with the Financial Accounting Standard Board’s Accounting Standards Codification 718, Compensation—Stock Compensation (“FASB ASC Topic 718”), excluding the effect of estimated forfeitures. The grant date fair value of the equity awards shown in the “Stock Awards” column is based on the closing price per share of the Company’s common stock on the date of grant of the equity award. A director who becomes a Board member following the date of the last held annual meeting of stockholders receives a prorated grant of restricted stock units (“RSUs”) based on the date that he or she joined the Board. In addition, each non-employee director who was expected to continue on the Board after the 2022 annual meeting of stockholders received an annual grant on January 5, 2022. For each then-current director, with the exception of Mr. Kesavan, the grant for 2022 on January 5, 2022 was 3,507 RSUs, which was calculated by dividing $150,000 by $42.76. For Mr. Kesavan, the grant for 2022 on January 5, 2022 was 4,209 RSUs, which was calculated by dividing $180,000 by $42.76. RSUs held by each then-current director as of October 31, 2022, including RSUs that have been deferred under the Deferred Compensation Plan for Non-Employee Directors, were: Mr. Allen, 5,898; Ms. Baker, 3,553; Ms. Chavez, 11,910; Mr. Colleran, 3,553; Mr. DeVries, 1,245; Mr. Garcia, 14,712; Mr. Gartland, 13,678; Ms. Golder, 3,553; Mr. Kesavan, 4,264; and Ms. Webb, 13,197.
(3)
Amounts shown include value of dividend equivalents (“DEUs”) credited in fiscal year 2022 with respect to RSUs held by non-employee directors, including deferred RSUs under the ABM Deferred Compensation Plan for Non-Employee Directors. DEUs are settled in Company stock when the underlying RSUs vest.
(4)
Mr. DeVries joined the Board on September 7, 2022. Mr. DeVries received a prorated grant of 1,245 RSUs, which was calculated by dividing $49,962 by $40.13
(5)
Chairman of the Board.

Non-Employee Director Deferred Compensation Plan

Non-employee directors are eligible to participate in the ABM Deferred Compensation Plan for Non-Employee Directors (“Director Deferred Compensation Plan”). Plan participants may elect to defer receipt of all or any portion of their annual cash retainers and fees until they cease to be members of the Board, or to specified withdrawal dates (at least three years after their election), in accordance with the terms of the Director Deferred Compensation Plan. The amounts held in each director’s account are credited with interest quarterly at a rate based on the prime interest rate published in the Wall Street Journal on the last business day coinciding with or next preceding the valuation date. In addition, the Director Deferred Compensation Plan permits directors to defer the settlement of Director RSUs to a date later than the vesting date.

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Director Stock Ownership Policy

Our Director Stock Ownership Policy requires directors to hold common stock (including unvested or deferred RSUs) having a value equivalent to five times his or her annual cash retainer within five years of becoming a director. Under this policy, directors who are not at their targeted stock ownership level within the five-year period must hold at least 50% of any net shares realized until they reach their target. “Net shares realized” means unrestricted shares acquired by a director under the 2006 Equity Incentive Plan or the 2021 Equity and Incentive Compensation Plan or acquired pursuant to the exercise of an option, net of any shares sold to pay the exercise price. All directors are either at or above the targeted stock ownership levels or are still within the initial five-year period.

Pursuant to our anti-hedging and pledging policy, our directors are not permitted to hedge or pledge shares of ABM’s common stock.

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EXECUTIVE COMPENSATION

 

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PROPOSAL 2—ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Philosophy and Practices

How We Compensated Our NEOs in 2022

Other Compensation and Governance-Related Matters

Compensation Committee Report

Additional Information About Executive Compensation

2022, 2021 and 2020 Summary Compensation Table

Grants of Plan-Based Awards During Fiscal Year 2022

Outstanding Equity Awards at 2022 Fiscal Year-End

Option Exercises and Stock Vested in Fiscal Year 2022

Nonqualified Deferred Compensation in Fiscal Year 2022

Potential Post-Employment Payments

2022 CEO Pay Ratio

 

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PROPOSAL 2ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION

 

Proposal Summary

As required by Section 14A of the Exchange Act, we are asking our stockholders to approve, on an advisory basis, the Company’s executive compensation policies and practices as described in the Compensation Discussion and Analysis, accompanying tables and related narrative contained in this Proxy Statement. At our 2017 annual meeting of stockholders, our stockholders voted to conduct this advisory vote on an annual basis. Accordingly, the Company has determined to submit an advisory vote on our executive compensation to our stockholders at each annual meeting. Subject to this year’s stockholder vote on the frequency of the advisory vote to approve our executive compensation (Proposal 3), the Company anticipates continuing to hold an advisory “Say-on-Pay” vote on an annual basis (with the next one occurring in 2024).

Board Recommendation

The Board unanimously recommends that you vote “FOR” the following resolution:

RESOLVED—that the stockholders approve, on an advisory basis, the compensation of the Company’s executives named in the 2022, 2021 and 2020 Summary Compensation Table, as disclosed in the Company’s 2023 Proxy Statement pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, which disclosure includes the Compensation Discussion and Analysis, the compensation tables and other executive compensation disclosures.

Voting

Unless contrary instructions are received, the shares represented by a properly executed proxy will be voted “FOR” the preceding resolution. Your vote is advisory and so it will not be binding on the Board. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

 

This Compensation Discussion and Analysis describes our executive compensation program for our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and other executive officers named in the 2022, 2021 and 2020 Summary Compensation Table (collectively, our “NEOs”).

 

Our Compensation Committee (referred to as the “Committee” in this section of the Proxy Statement) oversees all aspects of our NEO compensation. Our NEOs for fiscal year 2022 are:

 

 

 Scott Salmirs, President and Chief Executive Officer

 Earl R. Ellis, Executive Vice President and Chief Financial Officer

Joshua H. Feinberg, Executive Vice President and Chief Strategy and Transformation Officer

 Rene Jacobsen, Executive Vice President and Chief Operating Officer

 Andrea R. Newborn, Executive Vice President, General Counsel and Corporate Secretary

OUR COMPENSATION PHILOSOPHY AND PRACTICES

Compensation Philosophy

Our objective is to design an executive compensation program that encourages all of our leaders to produce strong financial results and create sustainable long-term value for our stockholders. To achieve this, we:

use evaluation criteria that include both internally measured performance (represented by our performance against our financial targets) and externally measured performance (represented by relative total stockholder return);
place significant weight on long-term equity compensation, thereby tying a substantial amount of total compensation of our executives to the achievement of sustained stockholder value creation; and
provide a mix of short-term annual cash incentive compensation and long-term performance-based equity compensation.

Best Practices

The following are some of the best practices we employ in our compensation program.

At-Will Employment. We do not have fixed-term employment agreements with our NEOs.
Clawback Policy. Our recoupment policy extends to both cash incentive and equity compensation, and permits us to recover incentive compensation paid to executives in connection with a restatement of the Company’s financial statements or in cases where the executive’s conduct would permit the Company to terminate him or her for “cause.”
No Single-Trigger Change-in-Control Payments. We utilize double-trigger change-in-control provisions.
No Tax Gross-Ups. We do not have tax gross-ups.
No Hedging or Pledging. We prohibit hedging and pledging of Company stock.
Stock Ownership Guidelines and Retention Requirements. We require significant stock ownership and retention by our executive officers.
Limited Perquisites. Our executive officers receive limited perquisites.
No Unearned Dividends or Dividend Equivalents. Our executive officers receive dividend equivalents on equity awards only to the extent that the awards are earned.

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Fiscal 2022 Overview Impact on Executive Compensation

Fiscal year 2022 represented a return to a more normal operating environment after the peak of the pandemic. As such, the Board and management team focused on ensuring the Company was well-positioned and appropriately resourced to build on its strengths and capture growth opportunities.

 

2022 Company Performance

Grew total revenue 25% to $7.8 billion, comprised of organic growth of 7% and growth from acquisitions of 18%. Organic growth largely reflected a post-COVID recovery, as well as solid demand in our Business & Industry, Technical Solutions and Manufacturing & Distribution industry groups, including several new large customer wins.
Posted net income of $230.4 million, adjusted EBITDA of $498.1.0 million(1) and a full-year adjusted EBITDA margin of 6.6%(1). These strong results reflect higher segment earnings and were aided by excellent execution, as the ABM team largely offset the impacts of a historically tight labor market and wage cost inflation.
$52 million in dividends to stockholders marking 226 consecutive quarters of dividend payments and over 50 years of annual dividend increases.

Pay Governance and Philosophy

Provide compensation plans with a significant portion of the total pay at-risk in short- and long-term incentives and a greater emphasis on the long-term plans, and payouts based on achievements of financial and non-financial objectives.
Maintain policies that promote good governance and serve the interests of our stockholders, including policies on anti-pledging, anti-hedging, insider trading, stock ownership guidelines for executives and clawbacks.
Follow best practices such as maximum caps on our short- and long-term incentive plans, a combination of relative and absolute performance metrics in our performance share program, multi-year vesting of our time-based stock awards, and no guaranteed base salary increases.
Hold an advisory say-on-pay vote on an annual basis, with a proven track record of investor support of executive compensation plans.
Pay programs align our executives' compensation with strategic goals while motivating and retaining executives critical to our future success and long-term performance.
A significant portion of our executives' compensation is at-risk, with approximately 88% of our CEO's compensation and approximately 78% of our other NEO's compensation tied to short- and long-term incentive plans.
Pay levels are set commensurate with performance and intended to attract and retain high quality executive talent, with our total target pay approximating the peer median.
Committee engages an independent compensation consultant to advise on internal pay equity among executives, pay-for-performance alignment and external market competitiveness, including peer analyses.

NEO 2022 Pay

Base salaries reflect each NEO's role, responsibility, experience, individual performance and market conditions, without automatic or guaranteed increases.
Corporate goals under the Company’s annual cash incentive program were achieved at above target payout for adjusted net income and revenue (as adjusted for the impact of the Momentum and RavenVolt acquisitions)(2), and below target for safety, each based on performance targets aligned to the fiscal year 2022 budget goals. Payouts relating to the corporate goals reflected our significant progress in developing and launching the Company’s ELEVATE strategy, with personal objectives for the NEOs also achieved at above target performance, ranging between 125% and 135% of target.

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Long-term equity incentives were awarded in January 2022, with (i) more than a majority (75%) granted in the form of three-year performance-based shares tied to adjusted EBITDA and organic revenue, along with a relative-total stockholder return (“TSR”) modifier on a scale of 80% to 120% of the earned award and (ii) the remainder (25%) granted in the form of time-based RSUs, with both awards earned over a three-year period.
Our 2020–2022 Performance Share Program for NEOs, which commenced with the 2020 fiscal year, used performance metrics comprised of adjusted EBITDA (as further adjusted for the impact of the Able, Momentum and RavenVolt acquisitions)(1), organic revenue growth and return on invested capital (“ROIC”), and covered a performance period from November 1, 2019, through October 31, 2022. Achievement under the 2020–2022 Performance Share Program corporate metrics resulted in an earned award at 116% of target. However, after application of the 113% TSR modifier accounting for the Company’s ranking in the 67th percentile of S&P Composite 1500 Services & Supplies Index companies, final payout for the 2020-2022 Performance Share Program was at 131% of target.

Why you should support Say-on-Pay Proposal

ABM emerged from the challenges of the pandemic and delivered strong revenue growth and solid margins in a challenging operating environment that included widespread wage cost pressures and labor shortages. Through it all, we served our clients at the highest level possible and continued to invest for the future.
The Company’s 2022 incentive payouts reflected our achievement in motivating our executives and other employees to achieve operational and financial goals that support our long-term business objectives and strategic priorities, and, in the case of the 2022 annual cash incentive, were paid on the basis of the collective above target achievement of its 2022 financial targets.
We are committed to pay programs that align the strategic priorities of management with the interests of stockholders and also serve to attract, motivate and retain a high-quality management team focused on ABM's strategy execution. ABM measures its progress against strategic priorities over the long-term, based primarily on financial metrics relating to revenue growth, profitability, cash flow and capital returns.
(1)
Adjusted EBITDA, adjusted EBITDA margin, and adjusted EBITDA (as further adjusted for the impact of the Able, Momentum and RavenVolt acquisitions), are non-GAAP financial measures. Reconciliations of these financial measures to the nearest GAAP financial measures are set forth in Appendix A to this Proxy Statement.
(2)
Adjusted Net Income is a non-GAAP measure. A reconciliation to the nearest GAAP measure, Net Income, is set forth in Appendix A.

Pay-for-Performance Alignment

The following graph provides a historical realizable pay-for-performance analysis for ABM’s CEO against the Company’s 2022 peer group for 2019–2021. The Company’s relative pay and performance were broadly aligned over the period, with the relative TSR performance at the 27th percentile of the group and CEO realizable pay at the 51st percentile of the group.

 

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Fiscal Year 2021 “Say-on-Pay” Vote Results

In March 2022, our say-on-pay proposal received 98% approval by our stockholders. The Committee and management are committed to continually strengthening our pay-for-performance correlation, as well as the overall design of our executive compensation program to support driving the right behaviors for sustainable success, aligning with best practices in corporate governance and reflecting the interests of our stockholders and stakeholders. The Committee and management use the annual say-on-pay vote as a guidepost for stockholder perspective and believe that this result indicates that our programs are aligned with stockholders’ interests.

Compensation Decision Process

Role of the Compensation Committee

The Committee is responsible for the design of the Company’s executive compensation program, and for reviewing the overall effectiveness of our executive compensation program to ensure the design achieves our objectives. The Committee:

approves CEO annual performance objectives and performance achievement;
approves our compensation market analysis process, as well as the companies used for compensation and design comparison purposes;
approves performance metrics for our annual and long-term incentive compensation programs;
approves non-CEO executive officer compensation, based on recommendations from the CEO; and
performs an annual evaluation of risk as it pertains to our Company-wide incentive compensation plans and programs.

Based on the Committee’s assessment of the CEO’s performance achievement against his performance objectives, the Committee recommends CEO compensation to the independent members of our Board. This recommendation

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includes base pay level, cash incentive compensation and equity awards. All elements of CEO pay are approved by the Board, with Mr. Salmirs recusing himself.

The Committee generally has the authority to delegate its authority to subcommittees or the Chair of the Committee, as well as to officers of the Company, when it deems appropriate and in the best interests of the Company. The Committee has delegated authority to the chief executive officer to determine and approve equity awards for non-executive officer employees of the Company.

Role of Compensation Consultants

The Committee continued to directly engage Semler Brossy in fiscal year 2022 to serve as its independent compensation consultant. The Committee takes into consideration the advice of Semler Brossy to inform its decision-making process and has sole authority for retaining and terminating its consultant, as well as approving the terms of engagement, including fees. Services provided by Semler Brossy to the Committee relating to executive compensation in fiscal year 2022 included: attended Committee meetings to present and offer independent recommendations, insights and perspectives on executive compensation matters; assessed our Compensation Comparator Group (“CCG”) used for compensation decisions; assessed how our executive compensation program aligns with pay for performance; reviewed targeted pay levels and the mix of principal compensation components for the CEO and other NEOs; advised on annual and long-term incentive design and plan structure, performance goals, award opportunities and vesting conditions; and updated the Committee on emerging trends and best practices in the area of executive compensation. The Committee meets multiple times throughout the year with the compensation consultant in executive session without management present. Semler Brossy works for the Committee and, with the approval of the Committee, has also provided services to the Governance Committee in connection with director compensation matters. Semler Brossy does not provide any other services to the Company. The Committee has determined Semler Brossy to be independent from management and that its engagement did not present any conflicts of interest. From time to time, the Committee may engage other consultants and advisors in connection with various compensation and benefits matters.

The Company’s management retains Willis Towers Watson as its primary compensation consultant to advise on program design, apprise management of evolving practices and trends, and perform other consulting services as needed.

Role of the CEO

The CEO makes recommendations to the Committee on the base salary, annual cash incentive targets, and equity awards for all executive officers other than himself. These recommendations are based on his assessment of each executive officer’s performance during the year and his review of, among other things, competitive market data and analysis of each specific executive’s role.

Use of Market Data and Our Compensation Comparator Group

The Committee uses compensation at our comparator group as one of its tools in connection with its assessment of our executive compensation programs and levels of compensation. Working with Semler Brossy, the Committee regularly reviews the various criteria by which it selects the Company’s Compensation Comparator Group. Companies in our CCG are generally selected with reference to the following criteria:

companies, like ABM, that provide business-to-business services, such as outsourcing, logistics management, food service, staffing, and cleaning;
companies in other industries that have a high ratio of employees to revenue or market capitalization; and
companies that generate annual revenue comparable to ABM.

The Committee’s decisions relating to NEO pay are informed by its review of the compensation practices reported in the proxy statements filed by the companies in the CCG. The Committee believes that this proxy data provides a reasonable indicator of total compensation paid by companies that recruit executives with skill sets similar to those which we seek in our executives. Compensation for our executives is typically managed within the ranges of compensation paid by companies in the CCG. While the Committee normally references the CCG median (50th percentile) for each compensation element, the Committee uses its judgment to determine pay levels necessary to pay for performance and attract and retain executive talent. The Committee places significant weight on individual job performance, experience, compensation history, future potential, internal comparisons, affordability, retention risk, and in the case of executives other than the CEO, the CEO’s recommendations.

 

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2022 COMPENSATION COMPARATOR GROUP

Aramark

ArcBest Corporation

The Brink’s Company

Brightview Holdings

C. H. Robinson Worldwide, Inc.

Cintas Corporation

Comfort Systems USA, Inc.

Cushman & Wakefield plc

EMCOR Group, Inc.

Healthcare Services Group, Inc.

Insperity, Inc.

Iron Mountain Incorporated

J.B. Hunt Transport Services, Inc.

Kelly Services, Inc.

Republic Services, Inc.

Robert Half International Inc.

Stericycle, Inc.

TrueBlue, Inc.

United Rentals, Inc.

Werner Enterprises, Inc.

In October 2021, the Committee reviewed the CCG and added Brightview Holdings for fiscal year 2022. The Committee removed SP Plus due to its revenue size given ABM’s increase in revenue following the Able acquisition, and removed Terminix Global Holdings, Inc. following its separation from ServiceMaster.

Elements of Compensation

The material components of our executive compensation program and their purposes and characteristics are summarized below.

 

Pay Element

Description and Purpose

Link to Business and Strategy

Base salary – payable in cash

Fixed compensation, designed to recognize individual responsibilities, performance, leadership skills and time in role; annual review and adjustment, if appropriate
Competitive base pay intended to attract and retain strong executive talent capable of leading the Company in our dynamic and competitive environment

Annual short-term incentives – payable in cash

 

Variable, at-risk compensation designed to reward annual performance related to Company key financial and operational measures as well as individual objectives
Design of short-term incentives is evaluated annually for alignment with Company strategy; metrics are focused on financial and individual performance targets aligned with short-term company objectives

Long-term incentives – structured as equity awards, settled in Company stock

 

Variable, at-risk compensation that consists of a mix of performance-based and time-based equity awards; designed to motivate and retain our NEOs to achieve the Company’s long-term goals aligning them with the interests of our stockholders
Programs are evaluated annually for alignment with achievement of Company’s long-term strategic objectives; metric selection aligned with achieving business strategy and priorities in the long-term

Using the elements of compensation described above, we structure our program in a way that places a significant portion of our executives’ compensation at risk. At-risk compensation includes: annual cash incentive compensation (“Bonus”) that is tied to annual financial, safety and individual performance measures; performance-based equity awards that are paid only if performance metrics established at the beginning of the three-year performance period are met (“PSs”); and time-based equity awards ("RSUs" together with PSs, “LTIs”). As reflected in the charts below, approximately 88% of our CEO’s compensation is at risk. Approximately 78% of our other NEOs’ compensation is at risk.

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CEO COMPENSATION

NEO COMPENSATION

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HOW WE COMPENSATED OUR NEOS IN 2022

2022 Base Salary

The Committee reviews total compensation, including base salaries, for executives in the first quarter of each fiscal year, and as needed, in connection with recruitment, promotions or other changes in responsibilities that occur during the year. Base salary amounts affect potential annual cash performance incentive payments and equity award grant amounts, since these other compensation elements are based on a percentage of base salary. The following table shows each NEO’s 2021 and 2022 base salaries as of January 1 of each fiscal year. Annual changes in base salary typically become effective on January 1.

 

Named Executive Officer

2021 Annual

Base Salary

2022 Annual

Base Salary

Scott Salmirs

$990,000

 

$1,000,000

 

Earl R. Ellis

$600,000

 

$630,000

 

Joshua H. Feinberg

$550,000

 

$575,000

 

Rene Jacobsen

$600,000

 

$700,000

 

Andrea R. Newborn

$530,000

 

$550,000

 

2022 Annual Cash Incentive Compensation

Each year, the Committee reviews the Company’s strategic and financial plan and key business objectives to align the annual cash incentive program (“CIP”) with the achievement of the Company’s goals. The metrics in the CIP have been selected to focus on driving sustainable, long-term value for our stockholders, as demonstrated by financial, safety and strategic goal achievement.

The Committee reviews the design, metrics and performance level requirements for the CIP annually, establishes the relative weightings of Financial Objectives, Safety Objectives and Personal Objectives for the CEO and all NEOs at the beginning of the year, and evaluates performance achieved against the objectives to determine cash payouts earned under the CIP.

Each of our NEOs was eligible to earn an annual cash incentive award under the CIP in fiscal year 2022.

2022 Financial and Safety Objectives for the CIP

For 2022, the Committee set Financial Objectives to recognize top-line growth and bottom-line profitability, with potential for negative adjustment to ensure acceptable margin. The Committee also set 2022 Safety Objectives to drive continued improvement on key measures of workplace safety.

2022 Personal Objectives for the CIP

For 2022, the Committee established Personal Objectives for the CEO in consultation with our full Board that aligned with the Company’s most critical strategic priorities for the year and that were set at the beginning of the fiscal year. The CEO also worked with each NEO to establish Personal Objectives for each such NEO aligned to his or her most

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critical priorities for the year, which reflect the unique role of each NEO, and that were set at the beginning of the fiscal year.

Bonus Targets and CIP Performance Objectives Weighting

The target and maximum bonus opportunities for each NEO, expressed as a percentage of his or her base salary on October 31, 2022, are set forth in the following table. The relative weights of the Performance Objectives for each NEO are: Financial Objectives, 75% (potential funding at 0% to 200%); Safety Objectives, 10% (potential funding at 0% to 200%); and Personal Objectives, 15% (potential funding at 0% to 150%). Payout can range from 0% to 192.5% of target.

2022 Annual Cash Incentive Program

 

 

Cash Bonus as a Percent of Salary

 

Target Bonus Opportunity as Percentage
of Salary

Maximum Bonus Opportunity as Percentage of Salary

Named Executive Officer

Scott Salmirs

150%

289%

Earl R. Ellis

125%

241%

Joshua H. Feinberg

125%

241%

Rene Jacobsen

125%

241%

Andrea R. Newborn

70%

135%

Funding Levels and Payouts Under CIP for NEOs in 2022

The Company’s financial and safety performance in 2022 resulted in a combined funding level for Financial Objectives and Safety Objectives above target, with Adjusted Net Income and Revenue (as adjusted for the impact of the Momentum and RavenVolt acquistions) at above target payout and Safety below target. In combination, Financial Objectives and Safety Objectives are used to determine 85% of the annual CIP opportunity for the NEOs, and Personal Objectives are used to determine 15% of the annual CIP opportunity for the NEOs.

2022 Funding Levels for Financial and Safety Objectives

 

Financial & Safety Objectives (85%)

Threshold

Target

Maximum

Actual

Actual vs.

Target

Funding
Levels

Adjusted Net Income(1)(2)
52.5% of overall weighting (equivalent to 70% of Financial Objectives weighting)

$201.0m

$236.5m

$272.0m

$245.5m

103.80%

107.60%

Revenue(2)
22.5% of overall weighting (equivalent to 30% of Financial Objectives weighting)

$7.123b

$7.498b

$7.873b

$7.751b

103.40%

164.00%

Funding Level of Financial Objectives
(75% weighting)

 

 

 

 

 

124.50%

Funding Level Safety Objectives(3)

(10% weighting)

 

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