|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
ITEM 1: ELECTION OF DIRECTORS |
|
|
|
|
|
|
|
| |
|
|
|
|
PROPOSAL 1 The Board recommends voting FOR each of the Director Nominees |
Crane Company Board Composition
Our Corporate Governance Guidelines provide that the Board should generally have from nine to twelve directors, a substantial majority of whom must qualify as independent directors under the listing standards of the New York Stock Exchange (“NYSE”). In addition, the Guidelines provide that any director who has attained the age of 75 as of the record date for the annual meeting of stockholders shall tender his/her resignation from the Board.
The Board currently consists of nine members, eight of whom are independent, and eight were previously directors of Crane Holdings, Co. (“Crane Holdings”). James L.L. Tullis, who was a member of the Crane Holdings’ board of directors from 1998 and Chairman since 2020, and a member and Chairman of the Crane Company Board since the separation transaction completed on April 3, 2023, has attained the age of 75 as of the record date and, in accordance with the Company’s Director retirement policy, indicated his intention to retire from the Board effective as of the Annual Meeting. The Board reviewed Mr. Tullis’ proposed resignation giving due consideration to Mr. Tullis’ skills, leadership and governance expertise, his significant contributions and experience, and the significant benefits to the Company of leadership stability and continuity following the Company’s recently completed separation transaction. In addition, and very importantly, given the Board’s decision to consolidate the Chairman and CEO roles (See “Board Leadership Structure” on page 27 for a discussion of that decision) the Board felt it would be beneficial to have Mr. Tullis remain on the Board for another year in the capacity of Lead Independent Director, to provide continued independent oversight of management and the CEO, and to assist Mr. Mitchell in transitioning to the Chairman role. Accordingly, the Board requested that Mr. Tullis stand for re-election as a director for a one-year term at the Annual Meeting.
The Company believes a board with between nine to twelve directors is appropriate to generate a manageable diversity of thought, perspective, and insight in a cost-efficient manner.
The nine directors whose terms will expire at the time of the Annual Meeting but will serve until their successors are duly elected and qualified, are Martin R. Benante, Sanjay Kapoor, Ronald C. Lindsay, Ellen McClain, Charles G. McClure, Jr., Max H. Mitchell, Jennifer M. Pollino, John S. Stroup, and James L. L. Tullis.
The Board has nominated each of the nine directors for re-election by the stockholders for a one-year term to expire at the 2025 annual meeting of stockholders. The Board has determined that all directors other than Mr. Mitchell are independent directors.
Director Nominating Procedures
The Board believes that a company’s directors should possess and demonstrate, individually and as a group, an effective and diverse combination of skills and experience to guide the management and direction of the Company’s business and affairs and to align with our long-term strategic vision. The Board has charged the Nominating and Governance Committee with responsibility for evaluating the mix of skills, experience and diversity of background of the Company’s directors and director nominees, as well as leading the evaluation process for the Board and its committees.
Criteria for Board membership take into account skills, expertise, integrity, diversity in thought, ethnicity, and gender, and other qualities which are expected to enhance the Board’s ability to manage and direct Crane Company’s business and affairs. In general, nominees for director should have an understanding of the workings of large business organizations such as Crane Company and senior level executive leadership experience. In addition, nominees should have the ability to make independent, analytical judgments, and they should be effective communicators with the ability and willingness to devote the time and effort required to be an effective and contributing member of the Board.
10
Item 1: Election of Directors
Independence of Directors
The Nominating and Governance Committee has reviewed whether any of the directors other than Mr. Mitchell, who is the current Chief Executive Officer and Chairman designee of Crane Company, and who served as Chief Executive Officer of Crane Holdings, Co. until the completion of the separation transaction on April 3, 2023, has any relationship that, in the opinion of the Committee, (i) is material (either directly or as a partner, stockholder, director, or officer of an organization that has a relationship with Crane Company) and, as such, would be reasonably likely to interfere with the exercise by such person of independent judgment in carrying out the responsibilities of a director or (ii) would otherwise cause such person not to qualify as an “independent” director under the rules of the NYSE and, in the case of members of the Audit Committee and the Management Organization and Compensation Committee, the additional requirements under Sections 10A and 10C, respectively, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the associated rules. The Nominating and Governance Committee determined that, other than Mr. Mitchell, all of Crane Company’s current directors and all persons who served as a director of Crane Company at any time from and after the closing of the separation transaction on April 3, 2023 are independent in accordance with the foregoing standards, and the Board has reviewed and accepted the determinations of the Nominating and Governance Committee.
In evaluating the independence of all directors, the Board considered all transactions in which the Company and any director had an interest, including all purchases and sales with other companies on which a director served on that company’s board. The Board determined in each case that such purchases and sales were de minimis, comprising less than 0.01% of the Company’s revenues. The Board evaluated these transactions and determined that they arose in the ordinary course of business and on the same terms and conditions available to other customers and suppliers. With regard to our directors also serving as directors of Crane NXT, Co., the Board considered the payments made to the Company by, and the payments made by the Company to, Crane NXT, Co. for transition services, repayment for third party invoices paid by the other party and tax-related obligations under agreements entered into in connection with the separation transaction. Among other things, the Board concluded that those individuals do not exert influence on the transition services or indemnification processes and that that such payments were on standard, previously negotiated terms that are consistent with terms involved in similar spin-off transactions. Furthermore, in reaching their determinations regarding the independence of the directors (other than Mr. Mitchell), the Committee and the Board applied the Standards for Director Independence described above and determined that there were no transactions that were likely to affect the independence of any director’s judgment.
Board Refreshment
Under the Corporate Governance Guidelines, each director who has attained the age of 75 as of the record date for an annual meeting of stockholders is required to tender his or her resignation from the Board. The Corporate Governance Guidelines also require a director to tender his or her resignation from the Board if there is a significant change in his or her primary job responsibilities that could impact the skills or perspectives they bring to the Board. The Nominating and Governance Committee then makes a recommendation to the Board, based on a review of all relevant circumstances, whether the Board should accept the resignation or ask the director to continue on the Board.
Mr. Tullis, who was a member of the Crane Holdings, Co. Board from 1998 and Chairman since 2020, and a member and Chairman of the Crane Company Board since the separation transaction completed on April 3, 2023, has attained the age of 75 as of the record date and, in accordance with the Company’s director retirement policy, indicated his intention to retire from the Board effective as of the Annual Meeting. The Board reviewed Mr. Tullis’ proposed resignation giving due consideration to Mr. Tullis’ skills, leadership and governance expertise, his significant contributions and experience, and the significant benefits to the Company of leadership stability and continuity following the Company’s recently completed separation transaction. In addition, and very importantly, given the Board’s decision to consolidate the Chairman and CEO roles (See “Board Leadership Structure” on page 27 for a discussion of that decision), the Board felt it would be beneficial to have Mr. Tullis remain on the Board for another year in the capacity of Lead Independent Director, to provide continued independent oversight of management and the CEO, and to assist Mr. Mitchell in transitioning to the Chairman role, the Board requested that Mr. Tullis stand for re-election for a one-year term at the Annual Meeting.
The Nominating and Governance Committee will, from time to time, seek to identify potential candidates for director to sustain and enhance the composition of the Board with an appropriate balance of knowledge, experience, skills, expertise, and diversity of thought, ethnicity, and gender, to enable Crane to formulate and implement its strategic plan.
21
Item 1: Election of Directors
| • |
|
a description of any agreement regarding how the director nominee would vote, if elected, on a particular matter, including a representation that there are no other understandings, obligations or commitments; |
| • |
|
a description of any agreement with respect to compensation as a director from any person other than the Company, including a representation that there are no other understandings, obligations or commitments; |
| • |
|
a representation that the director nominee will comply with all publicly disclosed Board policies, including those relating to confidentiality; |
| • |
|
a completed questionnaire similar to the one required of existing directors, a copy of which the Corporate Secretary will provide upon request; |
| • |
|
a description of any material interest the nominating stockholder has in any such nomination; and |
| • |
|
any other information about the proposed candidate that would, under the proxy rules of the Securities and Exchange Commission (the “SEC”), be required to be included in our proxy statement if the person were a nominee. |
Such notice must also be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director, if elected. A complete description of the requirements relating to a stockholder nomination is set forth in our by-laws.
Any stockholder recommendation for next year’s annual meeting, together with the information described above, must be sent to the Corporate Secretary at 100 First Stamford Place, 4th Floor, Stamford, CT 06902 and, in order to allow for timely consideration, must be received by the Corporate Secretary not less than 90 days, and not more than 120 days prior to April 22, 2025.
Majority Voting for Directors and Resignation Policy
Our by-laws provide that nominees for director and directors running for re-election to the Board without opposition must receive a majority of votes cast. Any director who fails to receive the required number of votes for re-election is required by Crane Company policy to tender his or her written resignation to the Chairman of the Board for consideration by the Nominating and Governance Committee. The Committee will consider such tendered resignation and make a recommendation to the Board concerning the acceptance or rejection of the resignation. In determining its recommendation to the Board, the Committee will consider all factors deemed relevant by the members of the Committee including, without limitation, the stated reason or reasons why stockholders voted against such director’s re-election, the qualifications of the director, and whether the director’s resignation from the Board would be in the best interests of the Company and its stockholders.
Board’s Role and Responsibilities
The Board is responsible for, and is committed to, overseeing the business and affairs of the Company and providing guidance for sound decision making, accountability and ethical professional conduct. It reviews the performance of our management and establishes guidelines and performance targets for our executive compensation program. The Board has adopted a comprehensive set of Corporate Governance Guidelines that set forth the Company’s governance philosophy, policies, and practices, and provide a framework for the conduct of the Board’s business.
Strategic Oversight
Our Board takes an active role in overseeing management’s formulation and implementation of its strategic plan. It receives a comprehensive overview of management’s strategic plan for all of the Company’s businesses at least annually, receives regular updates from consultants, financial advisors, and other experts on the global capital markets and industrial manufacturing environment, and receives periodic updates from individual businesses on their strategic plans at other regularly scheduled Board meetings throughout the year. The Board provides insight and feedback to senior management, and, if necessary, challenges management on the Company’s strategic direction. The Board also monitors and evaluates, with the assistance of the Chief Executive Officer, the Company’s strategic results, and approves all material capital allocation decisions.
23
Item 1: Election of Directors
Environmental, Social and Governance (“ESG”) Oversight
ESG strategies and initiatives are overseen by the Board. Our Board takes an active role in its oversight by reviewing ESG matters relevant to the Company’s business, including environmental, sustainability, corporate governance and diversity, equity, and inclusion. At least annually, the Board receives a comprehensive review of management’s plan for the Company with respect to philanthropy, sustainability, and equality initiatives and reviews the Company’s prior year initiatives and performance on these important issues. (See “Corporate Governance and Sustainability” on page 32). Our Board also receives periodic reports from management regarding the Company’s efforts, initiatives, and performance with respect to these metrics and is not only responsible for the oversight of the Company’s ESG commitments, but for periodically reviewing the Company’s policies and practices regarding ESG matters.
Cyber and Information Security Risk Oversight
Tone at the Top
Our approach to cybersecurity begins with our desire to maintain strong governance and controls to effectively manage and reduce security risks. Security begins with our “tone at the top”, where Company leadership consistently communicates the requirements for vigilance and compliance throughout the organization, and then leads by example. The cybersecurity program is led by Crane’s Chief Information Security Officer, who provides periodic updates to the Audit Committee of our Board of Directors, annual updates to the full Board of Directors, and regular reports to the executive management team about the program, including information about cyber risk management governance and the status of ongoing efforts to strengthen cybersecurity effectiveness. The entire Board of Directors ultimately is responsible for overseeing management’s risk assessment and risk management processes designed to monitor and mitigate information security risks, including cyber risks. The Company maintains cyber risk and related insurance policies as a measure of added protection.
Our Team and Capabilities
Our cybersecurity program is staffed by a team of highly skilled cybersecurity professionals, including over 24 dedicated internal cybersecurity resources. Four members of the security team currently have Certified Information Systems Security Professional (CISSP) credentials, many hold one or more Global Information Assurance Certification (GIAC)/The Sans Institute (SANS) cybersecurity certificates, and in total the team has over 70 security and network certifications. Our response team members are in various global locations to ensure 24/7 monitoring and response capabilities and are backed by a 24/7 Managed Security Services Provider (MSSP) who monitors cybersecurity alerts. The program incorporates industry standard frameworks, policies and practices designed to protect the privacy and security of our sensitive information, backed by a suite of best-in-class security technologies and tools to implement and automate security protections for our networks, employees, and customers.
Our Program and Results
We utilize a risk-based, multi-layered information security approach following the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) and the Center for Internet Security (CIS) critical security controls. We have adopted and implemented an approach to identify and mitigate information security risks that we believe is commercially reasonable for manufacturing companies of our size and scope and commensurate with the risks we face. From the completion of the Company’s separation from Crane Holdings on April 3, 2023, and during the past five years (as Crane Holdings), no attempted cyber-attack or other attempted intrusion on our information technology networks has resulted in a material adverse impact on our operations or financial results, in any penalties or settlements, or in the loss or exfiltration of Company data. In the event an attack or other intrusion were to be successful, we have a response team of internal and external resources engaged and prepared to respond.
Crane has not experienced a material third-party security breach, but recognizes the inherent cyber risks associated with relying on third-party vendors such as cloud service providers, software vendors, data processors, and IT service providers with access to company information, systems, or processes. Crane is committed to managing these risks responsibly and transparently and has an active process in place to assess and reduce that risk, including performing due diligence on third-party vendors before onboarding and evaluating and assessing their cybersecurity policies,
24
Item 1: Election of Directors
analysts are incorporated into our comprehensive strategic review which is presented to the Board at least annually, and on an ad hoc basis as appropriate.
Stockholder Communications with Directors
The Board has established a process to receive communications from stockholders and other interested parties. Stockholders and other interested parties may contact any member (or all members) of the Board, any Board committee, or any Chair of any such committee by mail or electronically. To communicate with the Board, any individual director or any group or committee of directors, correspondence should be addressed to the Board or any individual director or group or committee of directors by either name or title. All such correspondence should be sent to Crane Company c/o Corporate Secretary,100 First Stamford Place, 4th Floor, Stamford, CT 06902. To communicate with any of our directors electronically, stockholders should use the following e-mail address: corpsec@craneco.com.
All communications received as set forth in the preceding paragraph will be opened by the office of the Corporate Secretary for the sole purpose of determining whether they contain a message to our directors. Any contents will be forwarded promptly to the addressee unless they are in the nature of advertising or promotion of a product or service or are patently offensive or irrelevant. To the extent that the communication involves a request for information, such as an inquiry about the Company or stock-related matters, the Corporate Secretary’s office may handle the inquiry directly. In the case of communications to the Board or any group or committee of directors, the Corporate Secretary’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the communication is addressed.
Board Structure
Board Leadership Structure
Our by-laws do not require that the roles of Chairman of the Board and Chief Executive Officer be held by different individuals, as the Board believes that effective board leadership structure can be highly dependent on the experience, skills, and personal interaction between persons in leadership roles and the needs of the Company at the time. Following the completion of the separation transaction these leadership roles were filled separately by our non-employee Chairman of the Board, James L. L. Tullis, who possesses extensive experience with the Company and with Crane Holdings, Co. prior to the separation, and by our Chief Executive Officer, Max H. Mitchell. At a regular Board meeting in January 2024, the Board unanimously determined that it would be in the best interests of the Company and its stockholders to combine the Chairman and CEO roles and to ensure continued good governance and independent oversight, appoint annually a director to serve in the newly created role of Lead Independent Director, both effective at the Annual Meeting. In making this determination, the Board considered the Company’s recent separation from Crane Holdings, Co., and the benefit of Board leadership under Mr. Mitchell, who has served as the Company’s Chief Executive Officer since 2014 (inclusive of his time as Chief Executive Officer of Crane Holdings, Co.), accumulated extensive day-to-day knowledge of the Company’s operations and long term needs, and driven its successful portfolio reshaping, strategic plan, and growth initiatives during his tenure. The Board also considered its current composition of diverse, experienced, skilled professionals all of whom have been determined to be independent directors (other than Mr. Mitchell). Furthermore, to assist in transitioning to this leadership structure change and to provide for the continued independent oversight of management and the CEO/Chairman, the Board established the position of Lead Independent Director. To facilitate this transition, and to assist Mr. Mitchell in assuming the duties of Chairman, the Company’s former Chairman, James L.L. Tullis was appointed to serve as Lead Independent Director, effective at the Annual Meeting.
The Board will continue to monitor and assess its leadership structure to ensure it best serves the needs of the Company and its stockholders.
27
Item 1: Election of Directors
Executive Sessions of Non-Management Directors
Prior to the completion of the separation transaction, all three meetings of Crane Holdings, Co.’s board of directors and all four of the meetings of the Crane Company Board during 2023 included executive sessions without management present. All such meetings were presided over by James L. L. Tullis, Chairman of the Crane Holdings, Co. board prior to the separation and the Crane Company Board following the separation. Crane Company’s Corporate Governance Guidelines require our non-management directors to meet in executive session without management on a regularly scheduled basis, but not less than two times a year. Beginning with the implementation of our new governance structure effective as of the Annual Meeting, the Lead Independent Director presides at executive sessions, unless he or she is unavailable, in which case the presiding person at executive sessions rotates on an annual basis among the Chairs of the Nominating and Governance Committee, the Audit Committee, and the Management Organization and Compensation Committee. If the designated person is not available to chair an executive session, then the non-management directors select a non-management director to preside.
Board Meetings and Attendance
The Crane Holdings, Co. Board met three times prior to the separation and the Crane Company Board met four times during 2023 following the separation. Each director attended 100% of the Board and committee meetings held in the respective period during which he or she was a director and committee member of Crane Holdings, Co. and/or Crane Company. In addition, it is Crane Company’s policy that each of our directors attend our annual meetings either in person, virtually or telephonically.
Board Processes
Board and Committee Evaluation Process
Board and committee evaluations play a critical role in ensuring the effective functioning of the Board. It is essential to monitor the Board, committee, and individual director performance and consider and act upon the feedback provided by each Board member. The Nominating and Governance Committee, in consultation with the Chairman of the Board, is charged with facilitating an annual self-assessment of the Board’s performance, as well as an annual self-assessment undertaken by each committee of the Board. The multistep evaluation process begins with a questionnaire, and includes discussions with the Chairman and Board members, and discussions between Committee Chairs and the members of their respective committee. The results are provided to the full Board, and the Board’s policies and practices are updated as appropriate to reflect director feedback.
Director Education
It is important for directors to stay current and informed on developments in corporate governance best practices in order to effectively discharge their duties. Our directors are provided updates on corporate governance developments at regularly scheduled board meetings and are encouraged to participate in programs offered by nationally recognized organizations that specialize in director education. The Company reimburses its directors for their reasonable costs and attendance fees to participate in such programs.
Code of Business Conduct and Ethics
Crane Company is committed to conducting its business in compliance with all applicable laws, rules and regulations and in accordance with the highest standards of business ethics. Accordingly, the directors, officers and all Company employees are required to act in accordance with Crane Company’s Code of Business Conduct and Ethics. Our Code of Business Conduct and Ethics covers many areas of professional ethical conduct, including the protection and proper use of Company assets, confidentiality, conflicts of interest, compliance with laws and fair dealing with competitors, employees and other Company stakeholders. A copy of the Code of Business Conduct and Ethics is available on our website at www.craneco.com/investors/corporate-governance.
30
Item 1: Election of Directors
Compensation of Directors
Director Compensation Program
Our director compensation program is reviewed annually by the Management Organization and Compensation Committee’s independent consultant and all changes are intended to align the program generally with the peer group median. The members of the Board, other than Mr. Mitchell (who did not receive compensation for his service as a director for Crane Company and who did not receive compensation as a director while serving as Chief Executive Officer of Crane Holdings, Co. prior to the separation transaction), receive the following compensation:
| • |
|
A retainer of $230,000 per year, payable $90,000 in cash and $140,000 in the form of Deferred Stock Units (“DSUs”) of equivalent value; the terms of DSUs are described below. A director may also elect to receive up to 100% of the cash retainer in DSUs or elect to receive all or a portion of the cash retainer in fully vested shares of Crane Company stock; |
| • |
|
A retainer of $25,000 per year for the Chair of the Audit Committee, payable in cash; |
| • |
|
A retainer of $17,500 per year for each of the Chair of the Management Organization and Compensation Committee and the Chair of the Nominating and Governance Committee, payable in cash; and |
| • |
|
A retainer of $10,000 per year for each member of the Audit Committee other than the Chair; $7,500 per year for each member of the Management Organization and Compensation Committee or the Nominating and Governance Committee other than the Chair; and $2,000 per year for each member of the Executive Committee other than the Chief Executive Officer, in each case, payable in cash; |
No meeting fees will be paid unless the total number of meetings exceeds three more than the regularly scheduled meetings of the Board and the relevant committees. The compensation of Mr. Mitchell, who was Chief Executive Officer of Crane Holdings, Co. until the closing of the separation transaction on April 3, 2023 and is the Chief Executive Officer of Crane Company, in addition to having been a director of Crane Holdings, Co. since January 31, 2014 and a director of Crane Company since the separation, is shown in the 2023 Summary Compensation Table on page 65.
Mr. Tullis, the non-employee Chairman of the Board of Crane Holdings, Co., serving in that role until the closing of the separation transaction on April 3, 2023, and following the closing of the separation transaction, the non-employee Chairman of the Board of the Company, received the same annual retainer as a non-employee director plus an incremental retainer of $135,000 per year, payable in cash (or up to 100% in DSUs or fully vested shares, at the election of the Chairman). The Company also had a time-sharing agreement with Mr. Tullis under which he was permitted personal use of the corporate aircraft, for which he reimbursed Crane Company the aggregate incremental cost. See “Other Arrangements with our Named Executive Officers—Use of Company Aircraft” on page 62. As noted earlier on page 27, Mr. Tullis will transition from Chairman to Lead Independent Director effective as of the Annual Meeting, and Mr. Mitchell will serve as Chairman and Chief Executive Officer. In this role, Mr. Tullis will assist Mr. Mitchell in transitioning to the Chairman role to ensure seamless Board leadership succession, and the Committee determined that Mr. Tullis’ incremental retainer as Lead Independent Director, including access to the Company aircraft, will continue as it had been while he was Chairman. Following the conclusion of this one-year transition period, the incremental retainer for the Lead Independent Director role is expected to align with the importance of the new role to the Company and the time commitment required, and will not include access to the Company aircraft.
The Management Organization and Compensation Committee, which is composed solely of independent directors, has the primary responsibility for reviewing and considering any revisions to our director compensation program. Prior to the separation, the Crane Holdings’ Management Organization and Compensation Committee undertook its annual review of the type and form of compensation paid to our non-employee directors in connection with their service on the Board and its committees for fiscal year 2023 and considered the results of an independent analysis completed by Frederic W. Cook & Co., Inc. (“FW Cook”). As part of this analysis, FW Cook reviewed non-employee director compensation trends and data from companies comprising the same compensation peer group used by the Management Organization and Compensation Committee in connection with its review of executive compensation. Pursuant to this compensation review process, and after considering FW Cook’s advice on industry best practice regarding the timing of equity grants, the Committee determined that no changes in the retainers for Board members were required, and maintained the current retainers set forth above. Further pursuant to this review, the Committee determined that no changes in the retainers for committee Chairpersons and members were required, and maintained the current retainers set forth above.
33
Item 1: Election of Directors
DSUs are issued each year, generally as of the date of the annual meeting and pro-rated, if necessary; are forfeitable if the director ceases to remain a director until Crane Company’s next annual meeting, except in the case of death, disability, or change in control; and entitle the director to receive an equivalent number of shares of Crane Company stock, plus accumulated dividends, upon the director’s ceasing to be a member of the Board. On April 24, 2023, each non-employee Company director received DSUs pursuant to the Crane Company 2023 Stock Incentive Plan (the “Stock Incentive Plan”) as follows: Messrs. Benante, Lindsay, Stroup and Tullis, and Ms. Pollino, each received 1,897 DSUs, Mr. Kapoor received 3,117 DSUs, Ms. McClain received 2,141 DSUs, and Mr. McClure, Jr., received 2,507 DSUs.
In connection with the separation, all DSUs previously issued by Crane Holdings, Co. that were held by then directors of Crane Holdings, Co. and outstanding immediately prior to the consummation of the separation transaction, were adjusted using the shareholder method. Pursuant to the adjustment, each pre-separation Deferred Stock Unit of Crane Holdings, Co. was adjusted into a Crane NXT, Co. DSU (under the Crane Holdings’ 2018 Stock Incentive Plan) and a Crane Company equity award (issued under our Stock Incentive Plan), with one Crane Company share for each pre-separation Holdings share The DSUs continue to be governed by the same general terms and conditions as were in place immediately prior to the consummation of the separation transaction. As a result, directors who held Crane Holdings, Co. DSUs now have both Crane Holdings Co. (now Crane NXT, Co.) and Crane Company DSUs. The Crane NXT, Co. DSUs will be payable at the same time as the corresponding Crane Company DSUs after the director ceases to be a member of the Crane Company Board.
Stock Ownership Guidelines for Directors
The Board has adopted stock ownership guidelines that require each director to hold shares of Crane Company stock having a fair market value not less than five times the cash portion of the annual retainer for directors (currently $90,000). A director must have attained this ownership level by the fifth anniversary of his or her first election as a director. As a result of the completion of the separation transaction on April 3, 2023, resulting in the Company being a newly formed independent public company, no directors have attained their fifth anniversary of service. However, all Directors have attained the required ownership levels except Mr. Kapoor, who joined the Board in April 2023. Mr. Kapoor is making what the Board believes to be reasonable progress towards compliance with this ownership guideline.
Director Compensation in 2023
The following table shows the actual compensation earned in 2023 of all directors since the completion of the separation transaction, except for Mr. Mitchell, Chief Executive Officer, who does not receive compensation as a director and whose compensation is shown in the 2023 Summary Compensation Table on page 65.
|
|
|
|
|
|
|
|
|
|
|
|
|
| Name |
|
Fees Earned or
Paid in Cash(1)
($) |
|
|
Stock
Awards(2)
($) |
|
|
Total ($) |
|
|
|
|
|
| M. R. Benante |
|
|
65,067 |
|
|
|
148,487 |
|
|
|
213,554 |
|
|
|
|
|
| S. Kapoor |
|
|
7,500 |
|
|
|
231,682 |
|
|
|
239,182 |
|
|
|
|
|
| R. C. Lindsay |
|
|
88,125 |
|
|
|
152,587 |
|
|
|
240,712 |
|
|
|
|
|
| E. McClain |
|
|
67,125 |
|
|
|
168,683 |
|
|
|
235,808 |
|
|
|
|
|
| C. G. McClure, Jr. |
|
|
45,000 |
|
|
|
192,804 |
|
|
|
237,804 |
|
|
|
|
|
| J. M. Pollino |
|
|
87,750 |
|
|
|
150,349 |
|
|
|
238,099 |
|
|
|
|
|
| J. S. Stroup |
|
|
80,625 |
|
|
|
143,016 |
|
|
|
223,641 |
|
|
|
|
|
| J. L. L. Tullis |
|
|
175,875 |
|
|
|
155,320 |
|
|
|
331,195 |
|
| (1) |
Amounts in this column include the cash value of vested shares of Crane Company common stock received in lieu of cash retainers at the election of the director. |
| (2) |
Amounts shown in this column reflect the grant date fair value for awards of DSUs made during the indicated year. The grant date fair value of each DSU granted on April 24, 2023, was $73.79. The assumptions on which this valuation is based are set forth in Note 8 to the audited financial statements included in Crane Company annual report on Form 10-K filed with the SEC on |
34
Compensation Discussion and Analysis
Incentive Plan and adjusted in connection with the separation transaction into stock options of approximately the same aggregate intrinsic value under both the Crane Holdings’ 2018 Stock Incentive Plan and our Stock Incentive Plan, with the same vesting requirements.
TRSU Awards – Vest 25% Per Year Over Four Years
The Stock Incentive Plan also authorizes the Committee to grant time-based restricted share units, or TRSUs, subject to such terms and conditions as the Committee may deem appropriate. Like the stock options, the TRSUs granted to our NEOs vest ratably over four years, and dividends are paid on TRSUs prior to vesting. As noted under “Impact Of the Separation Transaction On NEO Compensation Disclosures” above, grants of TRSUs for 2023 were made under the Crane Holdings’ 2018 Stock Incentive Plan and adjusted in connection with the separation transaction into TRSUs of approximately the same aggregate intrinsic value under both the Crane Holdings’ 2018 Stock Incentive Plan and our Stock Incentive Plan, with the same vesting requirements.
Retirement Benefits
Messrs. Mitchell and D’Iorio have accrued retirement benefits under the Crane Company defined benefit pension plan (formerly Crane Holdings, Co. defined benefit pension plan), which was closed to employees hired after 2005 and then frozen with no further benefit accruals effective December 31, 2012. Of the NEOs, only Mr. Mitchell and Mr. D’Iorio have a frozen benefit under this plan. All of the NEOs participate in a tax-qualified defined contribution retirement plan under which the Company contributes 3% of salary and bonus annually (the contribution rate was 2% prior to 2014), subject to the limitations on contributions to tax-qualified retirement plans under applicable federal tax regulations.
The NEOs also participate in the Company’s benefit equalization plan, which is designed only to restore retirement benefits under the Company’s regular defined benefit pension plan that are limited by the tax code; there is no supplemental benefit based on deemed service or enhanced compensation formulas. Benefits accrued under this plan are not funded or set aside in any manner. In the event of retirement at age 62 with 10 years of service, a participating executive would be eligible to receive benefits under that plan without the reduction factor set forth in the Company’s tax-qualified pension plan of 3% per year prior to age 65. The only NEO with a defined benefit account in this plan is Mr. Mitchell. This plan was also frozen as to defined benefit accruals effective December 31, 2012. Effective January 1, 2014, the benefit equalization plan was amended to cover participants’ benefits under the defined contribution retirement plan referenced above, and the Committee extended the participation in this plan to certain senior leadership executives, including all of the NEOs.
Other Compensation
The “All Other Compensation” and “Change in Pension Value and Nonqualified Deferred Compensation Earnings” columns of the 2023 Summary Compensation Table and the accompanying footnotes set forth the details of other compensation received by the NEOs. In certain cases, such as the Company’s contributions to defined contribution plans and the increase in actuarial value of the defined benefit pension, such compensation is determined on the same basis as that used for all other employees. In other cases, such as automobile allowances, executive health exams, cybersecurity protection in the executive’s home network environment, and other personal benefits, the compensation is only provided to certain key employees (including the NEOs), and we have determined it to be reasonable and competitive compensation for the named executive officers in relation to general industry practices. For example, our NEOs are eligible for reimbursement for the cost of their executive physicals bi-annually, subject to an expense cap of $2,500. This benefit provides our NEOs with additional flexibility to proactively manage their health and wellness. Our executives bear all taxes associated with such benefits.
In the case of personal use of the corporate aircraft in 2023, this benefit was restricted to the Chief Executive Officer and the Chairman of the Board. Our Chief Executive Officer, Mr. Mitchell, has an agreement with Crane Company pursuant to which he is not required to reimburse the Company for personal use until the aggregate incremental cost reaches $100,000, and thereafter he is required to reimburse the Company for all incremental cost incurred above that amount. The net incremental cost to Crane Company above the reimbursed amount is included in the “All Other Compensation” column of the Summary Compensation Table. The Board has approved this personal use of the aircraft for Mr. Mitchell because the Board believes that such personal use of the aircraft permits the most efficient use of time by Mr. Mitchell and thereby benefits Crane Company. For more information regarding the use of the Company aircraft, see “Use of Company Aircraft” on page 62.
56
Compensation Discussion and Analysis
Compensation Decision-Making Process
Compensation Committee’s Role
The Committee is responsible for oversight of our executive compensation program. With respect to the compensation of our Chief Executive Officer, the Committee determines his compensation, subject to review and approval by the Board. With respect to our other executive officers, the Committee determines their compensation after reviewing the recommendations of the Chief Executive Officer. The Committee administers the Annual Incentive Plan, reviewing and setting the performance targets for the Chief Executive Officer and other corporate officers subject to review by the Board, setting performance targets for all other participants after reviewing the recommendations of the Chief Executive Officer, and reviewing and approving the annual bonuses based upon actual performance. The annual bonus calculations are also reviewed by our independent auditors. The Committee also administers the Stock Incentive Plan and approves all grants of stock options and RSUs.
The Committee is assisted in these responsibilities by its independent compensation consultant, FW Cook. Although the Company pays the fees and expenses of FW Cook, the firm is retained by the Committee. FW Cook does not perform any other compensation related services for the Company. The Committee reviews the independence of FW Cook each year and has concluded that its work for the Committee has not raised any conflict of interest issues or concerns.
Role of CEO and Management
The Chief Executive Officer and certain other senior corporate officers play an important role in supporting the Committee in the discharge of its responsibilities. Management maintains records and provides historical compensation data to the Committee and FW Cook, as well as the annual operating plan and the actual performance results from which annual bonuses are determined. The Chief Executive Officer, together with other senior corporate officers, presents recommendations to the Committee regarding performance targets under the Annual Incentive Plan and long-term equity incentives under the Stock Incentive Plan. The Chief Executive Officer and other officers participate in the discussions regarding annual and long-term incentive objectives so they can provide their input and understand the expectations for each incentive plan component.
Compensation Consultant and Market Data
Each year, FW Cook reviews the Company’s compensation peer group against certain size-related metrics and alignment with the Company’s business segments and complexity of operations. When and as appropriate, FW Cook proposes the addition of other companies to the compensation peer group to replace companies that have been acquired or made substantial changes to their business portfolio, or when the Company’s profile has materially changed due to mergers or acquisitions. The 19-company peer group below was used by FW Cook in 2022 to develop comparative compensation data for the Crane Holdings, Co. Compensation Committee in setting 2023 compensation targets prior to the separation. Notably, at the time the Crane Holdings, Co. peer group was approved, the peer group’s trailing fourth quarter revenues ranged from $0.9 billion to $8.1 billion with a median of $3.9 billion, which compared to Crane Holdings, Co.’s revenue of $3.2 billion. In addition, the peer group’s market cap ranged from $2.1 billion to $20.3 billion, with a median of $7.0 billion compared with $5.4 billion for Crane Company.
In July 2022, to assist in the compensation planning for the pending separation transaction, FW Cook also set the 20-company peer group noted below for the Company post separation. This peer group developed by FW Cook in 2022 was reviewed in July 2023 and it was determined that no changes were necessary; as such, this group was used to develop comparative compensation data for the Committee in setting 2024 compensation targets. Notably, at the time the Company’s peer group was approved, the peer group’s trailing fourth quarter revenues ranged from $737 million to $4.9 billion with a median of $2.4 billion, which compared to the Company’s revenue of $2.0 billion. In addition, the peer group’s market cap ranged from $1.6 billion to $15.1 billion, with a median of $4.7 billion compared with $4.1 billion for Crane Company.
57
Compensation Discussion and Analysis
Shares that count toward the satisfaction of the guidelines are (i) shares owned by the executive, (ii) shares held in the executive’s 401(k) account, and (iii) the after-tax value (65%) of TRSUs held by the executive. Neither unearned or unvested PRSUs nor unexercised stock options count for purposes of the guidelines. The policy permits executives to sell up to 50% of the net shares realized upon an option exercise or vesting of RSUs (i.e., the total shares covered by the option exercised or the RSU grant vesting less the number of shares surrendered to pay the exercise price and satisfy tax withholding obligations), while retaining at least 50% of such net shares in order to meet the stock ownership guidelines. Once such guidelines are met, the policy permits executives to sell any shares held above the required ownership guidelines.
|
|
|
| |
|
|
| |
|
As of February 26, 2024, all of the NEOs either held the requisite number of shares or were complying with the above-referenced retention ratio in accordance with the guidelines. |
| |
Policies with Respect to Timing of Stock-Based Awards and Exercise Price of Stock Options
Annual awards of stock options and RSUs to executive officers are approved at the Committee’s regular January meeting, in order that full-year performance may be considered, and the awards are granted 10 business days later, after the Company’s full year earnings have been released, to better align grant date value with the stockholders’ experience. The Committee also grants stock options and RSUs at other dates to newly hired or promoted executives. All options must be granted at an exercise price that is at least equal to 100% of the fair market value of the Company’s common stock on the date of grant. Fair market value on a given day is defined as the closing market price on that day.
Policy with Respect to Hedging and Pledging of Company Stock
Certain forms of hedging or monetization transactions allow an individual to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock, allowing the benefit of continued ownership of the stock without the full risks and rewards of ownership. When that occurs, the individual may no longer have the same objectives as the Company’s other stockholders. For this reason, the Board has maintained a longstanding policy prohibiting any director, executive officer, or any other designated employee who qualifies as an insider from (1) entering into any hedging or other transaction to limit the risk of ownership of Company stock or (2) pledging Company stock to secure any loan or advance of credit. During 2023, none of our directors and executive officers engaged in any such transactions.
Insider Trading Policies and Procedures
We maintain insider trading policies and procedures governing the purchase, sale, and other dispositions of Company securities that are applicable to the Company itself, all of our directors, officers and employees of the company and all members of their immediate families and households. Our insider trading policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and NYSE listing standards.
Clawback Policy
On October 2, 2023, the Board unanimously approved, and the Company adopted a revised Compensation “Clawback” Policy to provide a means for the recovery of certain incentive compensation awards pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Securities and Exchange Commission 2022 final rules and the recently adopted NYSE listing standards for compensation clawback. Under the revised clawback policy, the Company is required to recoup erroneously awarded incentive compensation from current and former executive officers, including its principal accounting officer, in the event of a financial restatement that is required to correct a material error in a previously issued financial statement regardless of executive fault or misconduct. Covered compensation includes all incentive-based compensation that is granted, vested or otherwise tied to a financial reporting measure within the meaning of the rules, including those payments under the Company’s Annual Incentive Plan and Performance Based Restricted Stock Units. The policy covers compensation erroneously received (within the
61
Compensation Discussion and Analysis
meaning of the rules) during the three completed fiscal years preceding the date the financial restatement is required and recoupment is mandatory.
Impact of Internal Revenue Code Section 162(m)
Internal Revenue Code Section 162(m) limits the deductibility of compensation in excess of $1 million paid to any one NEO in any calendar year. As a result, compensation paid in excess of $1 million to our NEOs generally will not be deductible. The Compensation Committee designs compensation programs that are intended to be in the best long-term interests of the Company and our stockholders, with deductibility of compensation being one of a variety of considerations taken into account.
Other Arrangements with Our Named Executive Officers
Change in Control Provisions
Each of the Company’s executive officers has an agreement that, in the event of a change in control of the Company, provides for continued employment for a period of three years or until normal retirement following the change in control. Upon termination within such employment period after a change in control, either by the employer without cause or by the executive with “Good Reason” for constructive termination, the executive is entitled to receive a multiple of base salary and average annual bonus payments based on the number of years in the employment period, and certain other benefits. The annual incentive plans, stock options, and RSUs contain similar features which accelerate vesting in the event of termination following a change in control. The change in control agreements do not provide for any tax gross-ups, and instead cap the payments to the employee to the extent that such payments, together with accelerated vesting of stock options and RSUs, would trigger any excise tax under Section 4999 of the Internal Revenue Code resulting from such payments (and if capping the payments provides the employee with a larger after-tax payment).
As set forth below under “Potential Payments upon Termination or Change in Control,” the aggregate payments to the NEOs under the change in control agreements, including the estimated value of continuation for three years (or until normal retirement age) of the individual’s medical coverage and other benefits, had a change of control taken place on December 31, 2023, and had employment been terminated immediately thereafter, would range from $13,926,846 for Mr. Mitchell to $3,690,761 for Ms. Polmanteer. The Board has approved these agreements and other provisions to assure the continuity of management in the event of a change in control and considers these agreements and provisions to be competitive with terms offered by other companies with which we compete for executive talent.
Indemnification Agreements
Each of the NEOs has an indemnification agreement with Crane Company. The indemnification agreements require the Company to indemnify the officers or directors to the full extent permitted by law against any and all expenses (including advances of expenses), judgments, fines, penalties, and amounts paid in settlement incurred in connection with any claim against the indemnified person arising out of services as a director, officer, employee, trustee, agent, or fiduciary of the Company or for another entity at the request of the Company, and either to maintain directors and officers liability insurance coverage or to the full extent permitted by law to indemnify such person for the lack of such insurance.
Use of Company Aircraft
In February 2023, Crane Company entered into time share agreements with Messrs. Tullis and Mitchell regarding personal use of the corporate aircraft, including aircraft leased by the Company from a third-party operator. Under the agreements, Crane Company agrees to lease the aircraft to the executive pursuant to federal aviation regulations and to provide a qualified flight crew, and the executive agrees to pay the Company for each flight. The agreement with Mr. Tullis provides that he pays the aggregate incremental cost of aircraft operation. Such incremental costs include fuel, landing fees, parking fees, temporary hangar charges, flight crew meals and lodging, and, for chartered aircraft, the entire charter fee. The agreement with Mr. Mitchell provides that he is not required to reimburse the Company for personal use until the aggregate incremental cost reaches $100,000, and thereafter is required to reimburse the Company for all incremental cost incurred above that amount. During 2023 (including the period prior to the separation), the aggregate incremental cost to Crane for personal use of the aircraft by Messrs. Tullis and Mitchell, less amounts paid by them under the time share agreements, was $0 and $100,000, respectively.
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
2023 EXECUTIVE COMPENSATION TABLES |
|
|
|
|
Annual Compensation of the Named Executive Officers
Please see “Impact Of the Separation Transaction On NEO Compensation Disclosures” above regarding certain impacts on the following disclosures and tables as a result of the separation transaction, particularly the adjustments to equity awards. That discussion also clarifies the applicable compensation committees that were making NEO compensation decisions at various points in time before and after the separation transaction. The following disclosures and tables should be read in light of that discussion. The following disclosures and tables will indicate when shares reported are pre-separation Crane Holdings’ shares or post-separation Crane Company and/or Crane NXT, Co. shares, as adjusted for the separation transaction.
Base Salary — The 2023 annual base salary of the Chief Executive Officer, Mr. Mitchell, was determined by the Crane Holdings’ Compensation Committee and approved by the Crane Holdings’ board of directors prior to the separation transaction. The base salary of each of the other NEOs is recommended by the Chief Executive Officer and approved by the Crane Holdings’ Compensation Committee prior to the separation transaction. Base salary accounted for approximately 27% of the aggregate total compensation of the NEOs. In light of the then pending separation the Crane Holdings’ board of directors determined in January 2023 to hold Mr. Mitchell’s compensation flat for 2023, to be reassessed by the Board of Crane Company following separation.
Stock Awards (PRSUs and TRSUs) — In early 2023, the Crane Holdings Compensation Committee made grants of PRSUs to certain key executives, including the NEOs, which were ties to a relative TSR metric over a three-year performance period. The Crane Holdings’ Compensation Committee also made grants of TRSUs to certain key executives, including the NEOs, which will vest ratably on the first, second, third, and fourth anniversaries of the date of grant.
The grants were made pursuant to Crane Holdings’ 2018 Amended & Restated Stock Incentive Plan and adjusted for the separation transaction as discussed above under “Impact of Separation Transaction on NEO Compensation Disclosures”. See “Potential Payments Upon Termination or Change in Control” beginning on page 74 for a description of treatment of the PRSUs upon termination of employment.
Option Awards — In early 2023, consistent with previous practice, the Crane Holdings’ Compensation Committee made annual grants of stock options to executives and other key employees including the NEOs pursuant to the Crane Holdings’ 2018 Amended & Restated Stock Incentive Plan. Options become exercisable 25% per year over four years, and expire, unless exercised, 10 years after grant. The exercise price of the options granted on February 6, 2023, was $119.71, which was the fair market value of Crane Holdings’ stock on the date of grant, calculated in accordance with the terms of the 2018 Amended & Restated Stock Incentive Plan by taking the closing price on the grant date. See “Potential Payments Upon Termination or Change in Control” beginning on page 74 for a description of treatment of the options upon termination of employment. See, also, “Impact of the Separation Transaction on NEO Compensation Disclosures” for additional information about the adjustments to these awards in connection with the separation transaction.
Non-Equity Incentive Plan Compensation — In early 2023, the Crane Holdings’ Compensation Committee established target bonus awards and performance targets pursuant to the Annual Incentive Plan for each of Crane Holdings’ executive officers (including the NEOs). The awards became payable in cash in the first quarter of 2024 to the extent that certain performance targets were met during 2023. The performance targets set in early 2023 for these awards contemplated the upcoming separation transaction so no adjustments were required to be made to the performance metrics in connection with the separation. The target awards are shown in the 2023 Grants of Plan-Based Awards table beginning on page 67; the amounts shown in the 2023 Summary Compensation Table under “Non-Equity Incentive Plan Compensation” for 2023 are the actual amounts paid.
Other Compensation — The amounts appearing in the 2023 Summary Compensation Table under the caption “All Other Compensation” are disaggregated in footnote 5 to the table.
64
2023 Executive Compensation Tables
| (3) |
For PRSUs vesting in connection with a change in control, the number of shares vesting is generally based on performance results determined through the date immediately before the change in control, except that if the change in control occurs during the first half of the performance period, the number of PRSUs vesting is based on target performance. Amounts in the table immediately below for Crane Company assume 177.6% for the 2021 grant, 200% for the 2022 grant and target for the 2023 grant, for Crane NXT, Co. assume 194.7% for the 2021 grant, 200% for the 2022 grant, and target for the 2023 grant (based on performance through the end of the last fiscal year). |
If the then unvested restricted share units (including PRSUs) owned by each of the NEOs had become vested as of December 31, 2023, and assuming the value of Crane Company stock to be $118.14 per share and the value of Crane NXT, Co. stock to be $56.87 per share, the closing price of stock for each company on the last trading day of 2023, the aggregate value to each of the NEOs would have been as follows:
|
|
|
|
|
|
|
|
|
| |
|
Retirement,
Death or Disability
($) |
|
|
Termination after
Change in Control
($) |
|
|
|
|
| M. H. Mitchell |
|
|
34,295,237 |
|
|
|
29,985,442 |
|
|
|
|
| R. A. Maue |
|
|
8,024,350 |
|
|
|
7,074,046 |
|
|
|
|
| A. M. D’Iorio |
|
|
4,953,172 |
|
|
|
4,295,308 |
|
|
|
|
| A. A. Alcala |
|
|
4,239,172 |
|
|
|
3,690,867 |
|
|
|
|
| T. S. Polmanteer |
|
|
2,781,258 |
|
|
|
2,342,683 |
|
Benefit Equalization Plan
Each of the named executive officers participates in the benefit equalization plan described under the caption “Retirement Benefits” on page 72. Assuming their separation from service as of December 31, 2023, they would have become entitled to the following benefits under the defined benefit and defined contribution portions of the benefit equalization plan, respectively. In the event of a participant’s death, 100% of the defined contribution and 50% of the defined benefit would be payable to the participant’s beneficiary.
|
|
|
|
|
|
|
|
|
| |
|
Defined Benefit
($) |
|
|
Defined Contribution
($) |
|
|
|
|
| M. H. Mitchell |
|
|
797,898 |
|
|
|
619,323 |
|
|
|
|
| R. A. Maue |
|
|
— |
|
|
|
268,423 |
|
|
|
|
| A. M. D’Iorio |
|
|
— |
|
|
|
96,897 |
|
|
|
|
| A. A. Alcala |
|
|
— |
|
|
|
136,467 |
|
|
|
|
| T. S. Polmanteer |
|
|
— |
|
|
|
38,379 |
|
Change in Control Agreements
Each of the NEOs has an agreement that, in the event of a change in control of the Company, provides for the continuation of the employee’s then current base salary, bonus plan, and benefits for the three-year period following the change in control. The agreements are for a three-year period but are automatically extended annually by an additional year unless the Company gives notice that the period shall not be extended.
Upon termination within three years after a change in control, by the Company without “Cause” or by the employee with “Good Reason” (as defined in the agreement), the employee is immediately entitled to a proportionate amount of the greater of the last year’s bonus or the average bonus paid in the three prior years, plus three times the sum of his or her annual salary and the greater of the last year’s bonus or the average of the previous three years’ bonuses. All accrued deferred compensation and vacation pay, employee benefits, medical coverage, and other benefits also continue for three years (or until normal retirement) after termination.
“Cause” under the change in control agreements generally includes, among other things, personal dishonesty or certain breaches of fiduciary duty; repeated, willful, and deliberate failure to perform the executive’s specified duties; the commission of a criminal act related to the performance of duties; distributing proprietary confidential information about the Company; habitual intoxication by alcohol or other drugs during work hours; or conviction of a felony.
“Good Reason” under the change in control agreements includes, among other things, any action by Crane Company that results in a diminution in the position, authority, duties, or responsibilities of the employee.
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND THE ANNUAL MEETING |
|
|
|
|
Why did I receive these materials?
Crane Company is sending notice of Internet Availability of Proxy Materials, to you and all of our stockholders, to ask you to appoint proxies to represent you at the virtual Annual Meeting on April 22, 2024.
If a quorum does not attend the meeting virtually or is not represented by proxy, the meeting will have to be adjourned and rescheduled. In order to avoid unnecessary expense, the Board of the Company is asking you to submit a proxy for your shares so that even if you do not attend the meeting virtually, your shares will be counted as present at the meeting and voted according to your instructions.
Unless you expect to attend the meeting virtually, if you have requested paper copies of the proxy materials, please sign, date, and return the enclosed proxy in the envelope provided; vote your shares online by scanning the QR code on your proxy card; or use the internet address or the toll-free telephone number listed in this Proxy Statement. Please return your proxy in any manner described in this paragraph promptly to ensure that your shares are voted at the meeting, no matter how large or how small your holdings may be.
What is the agenda for the Annual Meeting?
At the Annual Meeting, stockholders will vote on four matters:
| (1) |
the election of each of Martin R. Benante, Sanjay Kapoor, Ronald C. Lindsay, Ellen McClain, Charles G. McClure, Jr., Max H. Mitchell, Jennifer M. Pollino, John S. Stroup, and James L. L. Tullis to the Board; |
| (2) |
a proposal to ratify the selection of Deloitte & Touche LLP as our independent auditors for 2024; |
| (3) |
a proposal to approve, by a non-binding advisory vote, the compensation paid by the Company to certain executive officers; and |
| (4) |
a proposal to approve, by a non-binding advisory vote, the frequency with which we will ask stockholders to approve the compensation paid by the Company to certain executive officers. |
Our management will also make a brief presentation about the business of Crane, and representatives of Deloitte & Touche LLP will be available to respond to any appropriate questions at the Annual Meeting.
The Board does not know of any other business that will be presented at the Annual Meeting. The form of proxy gives the proxy holders discretionary authority with respect to any other matters that come before the Annual Meeting, which means that if any such matter arises, the proxy holders named in this proxy statement will vote according to their best judgment.
How does the Board recommend that I vote?
The Board unanimously recommends that you vote for each of the nominees for director; for ratification of the selection of Deloitte & Touche LLP to continue as our independent auditors; and for the non-binding advisory votes regarding executive compensation and the frequency with which we will ask stockholders to approve the compensation paid by the Company to certain executive officers.
When and where is the Annual Meeting?
The Annual Meeting will be held virtually and is scheduled to be held online via live webcast at 10:00 a.m. Eastern Daylight Time, on Monday, April 22, 2024.
To access the Annual Meeting, please visit meetnow.global/MK7ZLCR. To login to the Annual Meeting as a Registered Holder (as defined below), Join as a “Shareholder”, by entering the control number on your proxy card.
You can view the Annual Meeting agenda, rules of conduct and procedures, and proxy materials for the Annual Meeting on the virtual meeting platform.
91
Questions and Answers About these Proxy Materials and the Annual Meeting
Will there be technical support for the Annual Meeting?
The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Please note that Internet Explorer is not a supported browser. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the Annual Meeting. We encourage you to access the Annual Meeting prior to the start time. For further assistance should you need it, you may call (888) 724-2416.
Who can attend the Annual Meeting?
Any stockholder of Crane Company, and other invitees may attend the Annual Meeting. If you are a stockholder of Crane as of the close of business on the record date, you or your proxy holder may participate, vote and submit questions, as further described below. No physical meeting will be held. We recommend that you carefully review the procedures needed to gain admission in advance. If you do not comply with the procedures described for attending the Annual Meeting via the virtual meeting platform, you will not be able to participate online.
If your shares are registered directly in your name with Crane Company’s transfer agent, Computershare, you are considered the stockholder of record, or registered holder (a “Registered Holder”), with respect to those shares. For Registered Holders to attend the Annual Meeting, vote their shares during the Annual Meeting or submit questions, the control number appearing on the proxy card mailed to you should be used to access the virtual meeting platform at meetnow.global/MK7ZLCR. If you are a Registered Holder and do not have your control number, you may contact Computershare at (877) 373-6374 to obtain it.
If you hold a valid legal proxy for the Annual Meeting because you are a beneficial holder and hold your shares through an intermediary, such as a brokerage firm, bank, or other custodian (a “Beneficial Holder”), and want to attend the Annual Meeting online by webcast (with the ability to ask a question and/or vote, if you choose to do so), you have two options:
Registration in Advance of the Annual Meeting
Submit proof of your proxy power (“Legal Proxy”) from your broker or bank reflecting your Crane Company common stock holdings along with your name and email address to Computershare.
Requests for registration as set forth in (1) above must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Daylight Time, on Wednesday, March 27, 2024. You will receive confirmation of your registration by email after Computershare receives your registration materials.
Requests for registration should be directed to Computershare at the following:
By email: Forward the email from your broker granting you a Legal Proxy, or attach an image of your Legal Proxy, to legalproxy@computershare.com.
By mail:
Computershare
Crane Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
The online meeting will begin promptly at 10:00 a.m. Eastern Daylight Time, on Monday, April 22, 2024. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this Proxy Statement.
Who can vote at the Annual Meeting?
Anyone who owned shares of our Common Stock at the close of business on February 26, 2024, the record date, is entitled to notice of and to vote at the Annual Meeting or any postponement or adjournment of the meeting. Each share is entitled to one vote.
A complete list of stockholders as of the record date will be open to the examination of any stockholder during regular business hours at the offices of Crane Company, 100 First Stamford Place, 4th Floor, Stamford, CT 06902, for a period
92
Questions and Answers About these Proxy Materials and the Annual Meeting
of 10 days prior to the day of the meeting, as well as at the meeting by visiting meetnow.global/MK7ZLCR on the meeting day and time, entering your control number and joining the Annual Meeting as a “Shareholder”.
If you are a Registered Holder, please follow the instructions on the proxy card that you received to access the Annual Meeting. If you are a Beneficial Holder, please see the registration options set forth in numbers (1) and (2) above.
Registration is only required if you are a Beneficial Holder, as set forth above.
How many votes are required for each question to pass?
Nominees for the Board will be elected if more votes are cast in favor of the nominee than are cast against the nominee by the holders of shares present in person (including virtual attendance) or represented by proxy and entitled to vote at the Annual Meeting.
In the vote on the frequency with which we will ask stockholders to approve the compensation paid to certain shareholders, the alternative which receives the largest number of votes, even if not a majority, will be considered to be the recommendation of the stockholders.
Each other matter to be voted upon at the Annual Meeting requires the affirmative vote of a majority of the votes cast by the holders of shares of common stock present in person (including virtual attendance) or represented by proxy and entitled to vote on such matter at the Annual Meeting.
What are “Broker non-votes”?
Under the rules of the NYSE, brokers holding shares for customers have authority to vote on certain matters even if the broker has not received instructions from the customer, but they do not have such authority as to other matters. For the questions on the agenda for this year’s Annual Meeting, member firms of the NYSE may vote without specific instructions from beneficial owners on the ratification of the selection of auditors, but not on the election of directors or the approval of the compensation paid by the Company to certain executive officers or the frequency of the approval of the compensation paid by the Company to certain executive officers.
“Broker non-votes” are shares held in record name by brokers or nominees, as to which the broker or nominee (i) has not received instructions from the beneficial owner or person entitled to vote, (ii) does not have discretionary voting power under NYSE rules or the document under which it serves as broker or nominee, and (iii) has indicated on the proxy card, or otherwise notified us, that it does not have authority to vote the shares on the question.
What will be the effect of abstentions and broker non-votes?
Stockholders may abstain from voting on any proposal expected to be brought before the Annual Meeting.
Abstentions and broker non-votes will have no effect on the election of directors, as each nominee will be elected if the number of votes cast in favor of such nominee exceeds the number of votes cast against such nominee. Abstentions are not treated as votes cast for such proposal.
Abstentions and broker non-votes will have no effect on any of the other three proposals, because they will not count as votes cast for or against the question and will not be included in calculating the number of votes necessary for adoption and approval.
What constitutes a quorum for the meeting?
According to the Company’s amended by-laws, a quorum for a meeting of stockholders consists of the holders of a majority of the shares of common stock issued and outstanding and entitled to vote, present in person or by proxy. Virtual attendance at the Annual Meeting constitutes “in person” attendance for purposes of establishing a quorum. On the record date, there were 57,090,082 shares of common stock issued and outstanding, so at least 28,545,042 shares must be represented at the meeting for business to be conducted. If a quorum does not attend or is not represented, the Annual Meeting will have to be postponed.
93
Questions and Answers About these Proxy Materials and the Annual Meeting
Shares of common stock represented by a properly signed and returned proxy are treated as present at the Annual Meeting for purposes of determining a quorum, whether the proxy is marked as casting a vote or abstaining. Shares represented by “broker non-votes” are also treated as present for purposes of determining a quorum.
Who will count the votes?
A representative of our transfer agent, Computershare Trust Company, N.A., will tabulate the votes.
How can I cast my vote?
In addition to the other options listed below, where applicable, you can vote by completing and mailing a proxy card, if requested. We ask you to mark your choices, sign, date, and return the proxy as soon as possible in the enclosed postage prepaid envelope.
Stockholders of record may vote at the website www.envisionreports.com/cr using the instructions on the enclosed proxy card. For convenience, registered holders may scan the PQR code on the front of their proxy card. Additionally, those that wish to vote via telephone may do so by touchtone telephone from the United States and Canada using the toll-free number listed on the proxy card, proving their identity by using the control number shown on the proxy card. Each procedure allows stockholders to appoint the designated proxies to vote their shares and to confirm that their instructions have been properly recorded.
If you hold your shares through an intermediary, such as a bank or broker, you may view the meeting materials at www.edocumentview.com/cr and then follow the instructions on your proxy card to cast your vote.
You can attend the Annual Meeting and vote your shares virtually at the Annual Meeting; if you choose to vote your shares virtually at the Annual Meeting via the Annual Meeting website, please follow the instructions on your proxy card.
How do I submit questions at the Annual Meeting?
Every Crane stockholder has an opportunity during the Annual Meeting to submit questions, both on the proposals being presented to stockholders and on general matters relating to Crane Company and its business. Stockholders may do so by accessing the virtual meeting platform as described above, before and during the Annual Meeting, and submitting questions in the space provided therein. Representatives of Crane Company will review the questions during the appropriate portion of the Annual Meeting and answers to appropriate questions will be provided during the Annual Meeting by a member of management or a director.
What if I submit a proxy but don’t mark it to show my preferences?
If you return a properly signed proxy without marking it, it will be voted in accordance with the Board’s recommendations on all proposals.
What if I submit a proxy and then change my mind?
If you submit a proxy, you can revoke it at any time before it is voted by submitting a written revocation to the Corporate Secretary, or by submitting a new proxy, or by voting virtually at the Annual Meeting. However, if you have shares held through a brokerage firm, bank, or other custodian, you can revoke an earlier proxy only by following the custodian’s procedures.
Who is paying for this solicitation of proxies?
Crane Company will pay the cost of this solicitation of proxies for the Annual Meeting. We may solicit proxies by telephone, facsimile, electronic mail, and personal contact. These solicitations will be made by our regular employees without additional compensation. We have also engaged Alliance Advisors LLC to assist in this solicitation of proxies, and we have agreed to pay that firm approximately $20,000. Banks, brokerage houses, and other institutions, nominees, and fiduciaries will be asked to forward the proxy materials to the beneficial owners of the common stock they hold of record and will be reimbursed for their reasonable expenses in forwarding such material.
Where can I learn the outcome of the vote?
The Corporate Secretary will announce the preliminary voting results at the meeting, and we will publish the final results in a Current Report on Form 8-K filed with the SEC within four business days after the meeting.
94
Pay vs Performance Disclosure
|
12 Months Ended |
|
Dec. 31, 2023
USD ($)
|
|---|
| Pay vs Performance Disclosure |
|
| Pay vs Performance Disclosure, Table |
Pay versus Performance Table Tabular disclosure for the PEO (CEO) and the average NEO (excluding the PEO) for reporting year 2023 is shown in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total for PEO (Mitchell) (2) |
|
|
Compensation Actually Paid to PEO (Mitchell) (3) |
|
|
Average Summary Compensation Table Total for Non-PEO NEOs (4) |
|
|
Average Compensation Actually Paid to Non-PEO NEOs (5) |
|
|
Value of Initial Fixed $100
Investment Based on: |
|
|
|
|
|
|
|
| |
Total Shareholder Return (6) |
|
|
Peer Group Total Shareholder Return (7) |
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
10,065,027 |
|
|
$ |
33,526,560 |
|
|
$ |
2,478,236 |
|
|
$ |
5,802,807 |
|
|
$ |
150.46 |
|
|
$ |
129.94 |
|
|
$ |
203.8 |
|
|
$ |
4.16 |
|
(1) |
The Pay Versus Performance table reflects required disclosures for fiscal year 2023. |
(2) |
For fiscal year 2023, Mr. Mitchell was the Principal Executive Officer for the Company. |
(3) |
Compensation Actually Paid (CAP) is calculated from the PEO’s SCT compensation total, less the amounts reported in the SCT equity awards (i.e., RSUs, PRSUs, and stock options), less the change in pension value; adding the fair value as of the end of the covered fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the covered fiscal year, whether positive or negative, of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. As described above in the CD&A, equity awards granted to the NEOs prior to the spin-off were adjusted upon the spin-off into awards denominated in both Crane Company and Crane NXT stock. The CAP calculations include both the Crane Company component and Crane NXT component of awards that vested during, and/or remained outstanding at the end, of 2023. The following table shows the relationship between SCT compensation and CAP: | PEO SCT Total to CAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus and Non-Equity Incentive Compensation |
|
|
All Other Compensation (i) |
|
|
|
|
|
|
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings (ii) |
|
|
|
|
|
Deductions from SCT Total (ii) |
|
|
Additions to SCT Total (iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
1,200,000 |
|
|
$ |
2,610,720 |
|
|
$ |
256,079 |
|
|
$ |
4,557,813 |
|
|
$ |
1,340,013 |
|
|
$ |
100,402 |
|
|
$ |
10,065,027 |
|
|
($ |
5,998,228 |
) |
|
$ |
29,459,761 |
|
|
$ |
33,526,560 |
|
i. |
Reflects the PEO’s All Other Compensation reported in the SCT for fiscal year 2023. |
ii. |
Represents the grant date fair value of equity-based awards granted during the year and change in pension value. |
iii. |
Additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for fiscal year 2023. The equity awards were revalued using the Monte Carlo values for the PRSUs (which vest based on relative TSR) and the Black-Scholes values for the options. Because the Company includes the amount of cash dividends paid with respect to unvested TRSUs as compensation in the All Other Compensation column of the SCT, no adjustments were made for purposes of calculating CAP. Dividends or dividend equivalents do not accrue on stock options or PRSUs. There were no service cost additions to be made with respect to pension values because the historic Crane Holdings, Co.’s pension plan was previously frozen. | Equity Reconciliation Detail for PEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year End Fair Value of
Equity Awards
Granted in the Year |
|
|
Year over Year Change
in Fair Value of
Outstanding Unvested
Equity Awards Granted
in Prior Years |
|
|
Year over Year Change
in Fair Value of Equity
Awards Granted in
Prior Years that
Vested in the Year |
|
|
Total Equity Value
Included in CAP |
|
|
|
|
|
|
2023 |
|
$ |
10,515,835 |
|
|
$ |
12,007,601 |
|
|
$ |
6,936,325 |
|
|
$ |
29,459,761 |
|
(4) |
Includes the average SCT totals of the following Non-PEO Named Executive Officers (NEOs) for fiscal year 2023: Mr. Maue, Mr. D’Iorio, Mr. Alcala, and Ms. Polmanteer. |
(5) |
Average CAP is calculated by averaging the following for the non-PEO NEOs; SCT total, less the amounts reported in the SCT equity awards (i.e., RSUs, PRSUs, and stock options), less the change in pension value; adding the fair value as of the end of the fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the fiscal year, whether positive or negative, of any awards granted in the prior fiscal year that are outstanding and unvested as of the end of the fiscal year; adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the fiscal year. As described above in the CD&A, equity awards granted to the NEOs prior to the spin-off were adjusted upon the spin-off into awards denominated in Crane Company and Crane NXT stock. The CAP calculations include both the Crane Company component and Crane NXT component of awards that vested and/or remained outstanding at the end of 2023. The following table shows the relationship between SCT compensation and CAP: | Average Non-PEO NEOs SCT Total to CAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non-Equity Incentive Compensation |
|
|
|
|
|
|
|
|
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings |
|
|
|
|
|
Deductions from SCT Total (ii) |
|
|
Additions to SCT Total (iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
594,250 |
|
|
$ |
839,775 |
|
|
$ |
69,186 |
|
|
$ |
746,608 |
|
|
$ |
221,874 |
|
|
$ |
6,542 |
|
|
$ |
2,478,236 |
|
|
($ |
975,024 |
) |
|
$ |
4,299,596 |
|
|
$ |
5,802,807 |
|
i. |
Reflects the average of all the NEOs’ All Other Compensation reported in the SCT for fiscal year 2023. |
ii. |
Represents the average of the NEOs’ grant date fair value of equity-based awards granted during the year and average change in pension value. |
iii. |
Additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for fiscal year 2023. The equity awards were revalued using the Monte Carlo values for the PRSUs (which vest based on relative TSR) and the Black-Scholes values for the options. Because the Company includes the amount of cash dividends paid with respect to unvested TRSUs as compensation in the All Other Compensation column of the SCT, no adjustments were made for purposes of calculating CAP. Dividends or dividend equivalents do not accrue on stock options or PRSUs. There were no service cost additions to be made with respect to pension values because the historic Crane Holdings, Co.’s pension plan was previously frozen. | Equity Reconciliation Detail for Non-PEO NEOs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year End Fair Value of
Equity Awards
Granted in the Year |
|
|
Year over Year Change
in Fair Value of
Outstanding Unvested
Equity Awards Granted
in Prior Years |
|
|
Year over Year Change
in Fair Value of Equity
Awards Granted in
Prior Years that
Vested in the Year |
|
|
Total Equity Value
Included in CAP |
|
|
|
|
|
|
2023 |
|
$ |
1,714,276 |
|
|
$ |
1,768,298 |
|
|
$ |
817,022 |
|
|
$ |
4,299,596 |
|
(6) |
The amount represents the value of an initial fixed $100 investment in Company stock on April 4, 2023 (our first trading day as an independently publicly-traded company), assuming reinvestment of all dividends. |
(7) |
Peer group companies include those comprising the S&P 400 MidCap Capital Goods Index, which Crane also uses in its stock performance graph disclosure in the Form 10-K. The amount represents the value of an initial fixed $100 investment in the index on April 4, 2023 (our first trading day as an independently publicly-traded company), assuming reinvestment of all dividends. |
(8) |
Represents the Company’s Net Earnings (Loss) Attributable to Crane (in millions) for fiscal year 2023. |
(9) |
Adjusted EPS is calculated as Earnings from continuing operations per diluted share excluding special items, as used for determining annual incentive compensation awards. |
|
| Company Selected Measure Name |
Adjusted EPS
|
| Named Executive Officers, Footnote |
Includes the average SCT totals of the following Non-PEO Named Executive Officers (NEOs) for fiscal year 2023: Mr. Maue, Mr. D’Iorio, Mr. Alcala, and Ms. Polmanteer.
|
| Peer Group Issuers, Footnote |
Peer group companies include those comprising the S&P 400 MidCap Capital Goods Index, which Crane also uses in its stock performance graph disclosure in the Form 10-K. The amount represents the value of an initial fixed $100 investment in the index on April 4, 2023 (our first trading day as an independently publicly-traded company), assuming reinvestment of all dividends.
|
| PEO Total Compensation Amount |
$ 10,065,027
|
| PEO Actually Paid Compensation Amount |
$ 33,526,560
|
| Adjustment To PEO Compensation, Footnote |
(3) |
Compensation Actually Paid (CAP) is calculated from the PEO’s SCT compensation total, less the amounts reported in the SCT equity awards (i.e., RSUs, PRSUs, and stock options), less the change in pension value; adding the fair value as of the end of the covered fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the covered fiscal year, whether positive or negative, of any awards granted in any prior fiscal year that are outstanding and unvested as of the end of the covered fiscal year; adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the covered fiscal year. As described above in the CD&A, equity awards granted to the NEOs prior to the spin-off were adjusted upon the spin-off into awards denominated in both Crane Company and Crane NXT stock. The CAP calculations include both the Crane Company component and Crane NXT component of awards that vested during, and/or remained outstanding at the end, of 2023. The following table shows the relationship between SCT compensation and CAP: | PEO SCT Total to CAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus and Non-Equity Incentive Compensation |
|
|
All Other Compensation (i) |
|
|
|
|
|
|
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings (ii) |
|
|
|
|
|
Deductions from SCT Total (ii) |
|
|
Additions to SCT Total (iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
1,200,000 |
|
|
$ |
2,610,720 |
|
|
$ |
256,079 |
|
|
$ |
4,557,813 |
|
|
$ |
1,340,013 |
|
|
$ |
100,402 |
|
|
$ |
10,065,027 |
|
|
($ |
5,998,228 |
) |
|
$ |
29,459,761 |
|
|
$ |
33,526,560 |
|
i. |
Reflects the PEO’s All Other Compensation reported in the SCT for fiscal year 2023. |
ii. |
Represents the grant date fair value of equity-based awards granted during the year and change in pension value. |
iii. |
Additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for fiscal year 2023. The equity awards were revalued using the Monte Carlo values for the PRSUs (which vest based on relative TSR) and the Black-Scholes values for the options. Because the Company includes the amount of cash dividends paid with respect to unvested TRSUs as compensation in the All Other Compensation column of the SCT, no adjustments were made for purposes of calculating CAP. Dividends or dividend equivalents do not accrue on stock options or PRSUs. There were no service cost additions to be made with respect to pension values because the historic Crane Holdings, Co.’s pension plan was previously frozen. | Equity Reconciliation Detail for PEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year End Fair Value of
Equity Awards
Granted in the Year |
|
|
Year over Year Change
in Fair Value of
Outstanding Unvested
Equity Awards Granted
in Prior Years |
|
|
Year over Year Change
in Fair Value of Equity
Awards Granted in
Prior Years that
Vested in the Year |
|
|
Total Equity Value
Included in CAP |
|
|
|
|
|
|
2023 |
|
$ |
10,515,835 |
|
|
$ |
12,007,601 |
|
|
$ |
6,936,325 |
|
|
$ |
29,459,761 |
|
|
| Non-PEO NEO Average Total Compensation Amount |
$ 2,478,236
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
$ 5,802,807
|
| Adjustment to Non-PEO NEO Compensation Footnote |
(5) |
Average CAP is calculated by averaging the following for the non-PEO NEOs; SCT total, less the amounts reported in the SCT equity awards (i.e., RSUs, PRSUs, and stock options), less the change in pension value; adding the fair value as of the end of the fiscal year of all awards granted during the fiscal year that are outstanding and unvested as of the fiscal year-end; adding the amount equal to the change in fair value as of the end of the fiscal year, whether positive or negative, of any awards granted in the prior fiscal year that are outstanding and unvested as of the end of the fiscal year; adding the amount equal to the change in fair value as of the vesting date, whether positive or negative, of any award granted in any prior fiscal year for which all applicable vesting conditions were satisfied at the end of or during the fiscal year. As described above in the CD&A, equity awards granted to the NEOs prior to the spin-off were adjusted upon the spin-off into awards denominated in Crane Company and Crane NXT stock. The CAP calculations include both the Crane Company component and Crane NXT component of awards that vested and/or remained outstanding at the end of 2023. The following table shows the relationship between SCT compensation and CAP: | Average Non-PEO NEOs SCT Total to CAP Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non-Equity Incentive Compensation |
|
|
|
|
|
|
|
|
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings |
|
|
|
|
|
Deductions from SCT Total (ii) |
|
|
Additions to SCT Total (iii) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
$ |
594,250 |
|
|
$ |
839,775 |
|
|
$ |
69,186 |
|
|
$ |
746,608 |
|
|
$ |
221,874 |
|
|
$ |
6,542 |
|
|
$ |
2,478,236 |
|
|
($ |
975,024 |
) |
|
$ |
4,299,596 |
|
|
$ |
5,802,807 |
|
i. |
Reflects the average of all the NEOs’ All Other Compensation reported in the SCT for fiscal year 2023. |
ii. |
Represents the average of the NEOs’ grant date fair value of equity-based awards granted during the year and average change in pension value. |
iii. |
Additions to the SCT Total reflect the value of equity calculated in accordance with the SEC methodology for determining CAP for fiscal year 2023. The equity awards were revalued using the Monte Carlo values for the PRSUs (which vest based on relative TSR) and the Black-Scholes values for the options. Because the Company includes the amount of cash dividends paid with respect to unvested TRSUs as compensation in the All Other Compensation column of the SCT, no adjustments were made for purposes of calculating CAP. Dividends or dividend equivalents do not accrue on stock options or PRSUs. There were no service cost additions to be made with respect to pension values because the historic Crane Holdings, Co.’s pension plan was previously frozen. | Equity Reconciliation Detail for Non-PEO NEOs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year End Fair Value of
Equity Awards
Granted in the Year |
|
|
Year over Year Change
in Fair Value of
Outstanding Unvested
Equity Awards Granted
in Prior Years |
|
|
Year over Year Change
in Fair Value of Equity
Awards Granted in
Prior Years that
Vested in the Year |
|
|
Total Equity Value
Included in CAP |
|
|
|
|
|
|
2023 |
|
$ |
1,714,276 |
|
|
$ |
1,768,298 |
|
|
$ |
817,022 |
|
|
$ |
4,299,596 |
|
|
| Compensation Actually Paid vs. Total Shareholder Return |
Relationship between CAP and TSR The chart below reflects the relationship between the PEO and Average Non-PEO NEO CAP (per the SEC’s definition), the Company’s TSR, Crane NXT’s TSR, and the TSR Peer Group in the above table for 2023 – the S&P 400 MidCap Capital Goods Index, which is also used to determine relative TSR performance for PRSU payouts. As noted above under “Pay versus Performance Calculations and Impact of the Spin,” the equity awards held by the Company’s NEOs following the separation, as reflected in CAP values, are tied to the value of both Crane Company and Crane NXT stock prices and performance, a
|
| Compensation Actually Paid vs. Net Income |
Relationship between CAP and GAAP Net Income The chart below reflects the relationship between the PEO and Average Non-PEO NEO CAP (per the SEC’s definition), and the Company’s GAAP Net Income in
|
| Compensation Actually Paid vs. Company Selected Measure |
Relationship between CAP and the Company-Selected Measure (Adjusted EPS) The chart below reflects the relationship between the PEO and Average Non-PEO NEO CAP and the Company’s Adjusted EPS for 2023. This metric is used to determine 75% of the earnout of annual incentive program for the PEO and other corporate NEOs and is strongly correlated to the Company’s absolute and relative stock price performance, which meaningfully impacts CAP. We consider Adjusted EPS to be among the most important financial measures used to link pay with performance in 2023 because it determines a significant portion of NEOs’ variable, and thus total, compensation
|
| Total Shareholder Return Vs Peer Group |
Relationship between CAP and TSR The chart below reflects the relationship between the PEO and Average Non-PEO NEO CAP (per the SEC’s definition), the Company’s TSR, Crane NXT’s TSR, and the TSR Peer Group in the above table for 2023 – the S&P 400 MidCap Capital Goods Index, which is also used to determine relative TSR performance for PRSU payouts. As noted above under “Pay versus Performance Calculations and Impact of the Spin,” the equity awards held by the Company’s NEOs following the separation, as reflected in CAP values, are tied to the value of both Crane Company and Crane NXT stock prices and performance, a
|
| Tabular List, Table |
The table below shows, in compliance with PVP regulations, the most important metrics used to link CAP to Company performance. These measures, along with others, significantly impact annual compensation decisions and outcomes for the executive team.
|
|
|
|
|
|
|
|
|
| Earnings from continuing operations per diluted share excluding special items |
|
Determines 75% of the annual incentive payout for the PEO and other NEOs |
|
|
|
|
|
| Cash provided by operating activities, less capital spending |
|
Determines 25% of annual incentive payout for the Principal Executive Officer (“PEO”) and other NEOs |
|
|
Relative Total Shareholder Return |
|
|
| Stock price performance versus a comparator group (S&P 400 MidCap Capital Goods Index) |
|
Determines 100% of the PRSU payout, which represents 55% of the annual LTI grant value for the PEO and 50% for other NEOs |
|
| Total Shareholder Return Amount |
$ 150.46
|
| Peer Group Total Shareholder Return Amount |
129.94
|
| Net Income (Loss) |
$ 203,800,000
|
| Company Selected Measure Amount |
4.16
|
| PEO Name |
Mr. Mitchell
|
| Measure:: 1 |
|
| Pay vs Performance Disclosure |
|
| Name |
Adjusted EPS
|
| Measure:: 2 |
|
| Pay vs Performance Disclosure |
|
| Name |
Adjusted Free Cash Flow
|
| Measure:: 3 |
|
| Pay vs Performance Disclosure |
|
| Name |
Relative Total Shareholder Return
|
| PEO |
|
| Pay vs Performance Disclosure |
|
| Salary |
$ 1,200,000
|
| Bonus |
2,610,720
|
| All Other Compensation |
256,079
|
| Stock Awards |
4,557,813
|
| Option Awards |
1,340,013
|
| Nonqualified Deferred Compensation Earnings |
100,402
|
| PEO | Deductions from SCT Total [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
(5,998,228)
|
| PEO | Year End Fair Value of Equity Awards Granted in the Year [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
10,515,835
|
| PEO | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards Granted in Prior Years [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
12,007,601
|
| PEO | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
6,936,325
|
| PEO | Total Equity Value Included in CAP [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
29,459,761
|
| Non-PEO NEO |
|
| Pay vs Performance Disclosure |
|
| Salary |
594,250
|
| Bonus |
839,775
|
| All Other Compensation |
69,186
|
| Stock Awards |
746,608
|
| Option Awards |
221,874
|
| Nonqualified Deferred Compensation Earnings |
6,542
|
| Non-PEO NEO | Deductions from SCT Total [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
(975,024)
|
| Non-PEO NEO | Year End Fair Value of Equity Awards Granted in the Year [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
1,714,276
|
| Non-PEO NEO | Year over Year Change in Fair Value of Outstanding Unvested Equity Awards Granted in Prior Years [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
1,768,298
|
| Non-PEO NEO | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
817,022
|
| Non-PEO NEO | Total Equity Value Included in CAP [Member] |
|
| Pay vs Performance Disclosure |
|
| Adjustment to Compensation, Amount |
$ 4,299,596
|
