EXECUTIVE COMPENSATION
Retirement and Deferred Compensation Plans
None of our NEOs participate in an SPX defined benefit pension plan.
Our executives, along with the majority of our U.S.-based employee population, are eligible to receive matching contributions into the SPX Corporation Retirement
Savings and Stock Ownership Plan (the 401(k) Plan), a tax-qualified retirement savings plan. Matching contributions are immediately vested and are invested initially in the SPX Common Stock Fund in
the form of units. This fund under the 401(k) Plan is primarily invested in SPX common stock, with a small portion of the fund in cash, for purposes of administrative convenience.
Executive officers and other senior-level management employees are also eligible to participate in the SPX Corporation Supplemental Retirement Savings Plan (the
SRSP), a non-qualified deferred compensation plan that permits voluntary deferrals of base salary and annual bonuses.
For more information regarding these plans, see the Nonqualified Deferred Compensation table and accompanying narrative and footnotes, beginning on page 41.
Termination and Change-in-Control Provisions
As described below, all our NEOs, except our CEO, have entered into the current form of our
change-in-control agreement as filed with the SEC.
On September 28, 2015, the
Committee recommended, and the Board approved, an employment agreement and a change-in-control agreement for Mr. Lowe, President and Chief Executive Officer, and
severance benefit agreements and change-in-control agreements for all other executive officers. The Committee reviews these agreements annually considering stakeholder
interests and market competitiveness and will address adjustments as it deems appropriate.
Our severance arrangements are designed to protect stockholder interests
by stabilizing management during periods of uncertainty. Executives often assign significant value to severance agreements because these agreements provide compensation for lost professional opportunities in the event of a negative qualifying event
following a change-in-control.
Severance agreements can also be a powerful tool to
discourage entrenchment of management, in that these agreements can offset the risk of financial and professional loss that management may face when recommending a sale to or merger with another company. Our severance arrangements are structured to
serve the above functions, which differ, and are perceived by recipients to differ, from pay for performance. Accordingly, decisions relating to other elements of compensation have minimal effect on decisions relating to existing severance
agreements. As described above, all our NEOs, except our CEO, have entered into the most current form of our severance benefit agreement as filed with the SEC.
We
utilize a double-trigger in the event of a change-in-control. If the executive officer experiences a qualifying negative employment action following a change-in-control, then the executive officer becomes immediately vested in all previously- granted unvested SPX equity, including shares subject to performance vesting, at
the target level of vesting. This feature is designed to be equitable in the event of dismissal without cause or resignation for good reason, and we believe it is appropriate in the event of termination following a change-in-control.
Severance and
change-in-control terms are further discussed and quantified in Potential Payments Upon Termination or Change-in-Control, beginning on page 42.
Notes
The discussion of performance targets in this CD&A is exclusively in the context of executive compensation and should not be used for any other purpose or regarded
as an indication of managements expectations of future results.
References to bonusor bonuses in this CD&A and the compensation
tables are to our annual performance-based payments reflected as Non-Equity Incentive Plan Compensation in the Summary Compensation Table on page 34 and Estimated Future Payouts
under Non-Equity Incentive Plan Awards in the Grants of Plan-Based Awards table on page 37, except for the $375,000 sign-on bonus received by
Mr. Harris and the discretionary increases in annual incentive compensation for 2020 for Messrs. Lowe, Harris, Data, Swann and Sproule, which are reflected as Bonus in the Summary Compensation Table on page 34.
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2021 PROXY STATEMENT |
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31 |