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DEF 14A
KOPPERS HOLDINGS INC. filed this Form DEF 14A on 04/04/2017
Entire Document
 


Table of Contents

EXECUTIVE COMPENSATION

 

2016 Compensation Decisions and Performance

Base Salary. As part of setting pay mix and structure for 2016, the committee evaluated NEO base salaries. Annual salary increases are neither automatic nor guaranteed, but determined by the committee after taking into consideration each NEO’s position with the company, their respective responsibilities and experience and peer company information for similar positions. Based on this evaluation, the following base salary increases were approved for the NEOs in 2016. The committee elected to leave Mr. Reeder’s base salary rate unchanged for 2016, due to his assuming his position on January 1, 2016. All increases were effective April 1, 2016 and approved by the committee.

 

 NEO   

Base Salary as of

January 1, 2016

    

Base Salary as of

April 1, 2016

     Percentage
Increase
 

 Mr. Ball

 

    

 

$690,000

 

 

 

    

 

$725,000

 

 

 

    

 

5.1

 

 

 Mr. Zugay

 

    

 

$356,900

 

 

 

    

 

$367,700

 

 

 

    

 

3.0

 

 

 Mr. Lacy

 

    

 

$395,100

 

 

 

    

 

$409,500

 

 

 

    

 

3.6

 

 

 Mr. Sullivan

 

    

 

$328,200

 

 

 

    

 

$341,400

 

 

 

    

 

4.0

 

 

Mr. Reeder

 

    

 

$310,000

 

 

 

    

 

$310,000

 

 

 

    

 

0

 

 

Annual Cash Incentives.

2016 Cash Bonus Program. Our shareholder-approved amended and restated 2005 long term incentive plan (the “LTIP”) authorizes the committee to grant, among other things described below, annual cash incentive awards for participants designated by the committee at the beginning of the program year. We call this our 2016 Cash Bonus Program. Our 2016 Cash Bonus Program is intended to ensure that amounts paid to participating NEOs are tax deductible by the company.

In early 2016, the committee designated Messrs. Ball, Lacy, Sullivan and Reeder as participants in the 2016 Cash Bonus Program and set the performance objective for 2016 at $1.52 of adjusted EPS of the company’s common stock, which the committee believed was the minimum performance level at which any annual cash incentive would be warranted. The committee also determined the following maximum annual cash incentive for each participant in the event that the performance objective was obtained:

 

 Participant    Maximum Annual
Cash Incentive
 

 Mr. Ball

 

    

 

$1,500,000

 

 

 

 Mr. Lacy

 

    

 

$1,000,000

 

 

 

 Mr. Sullivan

 

    

 

$1,000,000

 

 

 

 Mr. Reeder

 

    

 

$1,000,000

 

 

 

For 2016, we achieved adjusted EPS of $2.60, which satisfied the adjusted EPS performance objective under the 2016 Cash Bonus Program. EPS as measured under the plan was adjusted by the committee in its discretion to exclude certain disclosed events and other items that we believe are not reflective of the underlying operating performance of the company, as set forth on Annex A hereto. After determining that the adjusted EPS performance objective was met, the committee exercised its negative discretion to set the 2016 annual cash incentives at levels that were less than the specified maximum amounts. The committee does not have the discretion to increase the amount of any annual cash incentive to be paid under the 2016 Cash Bonus Program above the maximum annual cash incentive.

In exercising their negative discretion to determine the annual cash incentive payouts under the 2016 Cash Bonus Program, the committee was informed by reference to: (1) each participant’s target total annual incentive (100% of salary for Mr. Ball and 60% of salary for the other NEOs) and (2) the company’s and, as applicable, individual business units’ performance in relation to adjusted EBITDA targets contained in the annual incentive plan described below.

 

 NEO    Target Total
Annual Incentive
     Referenced Performance Metric (and Weighting)

 Mr. Ball

 

    

 

$690,000

 

 

 

  

Corporate EBITDA (100%)

 

 Mr. Zugay

 

    

 

$214,140

 

 

 

  

Corporate EBITDA (100%)

 

 Mr. Lacy

 

    

 

$237,060

 

 

 

  

Corporate EBITDA (100%)

 

 Mr. Sullivan

 

    

 

$196,920

 

 

 

  

Corporate EBITDA (50%) / CMC Business Unit EBITDA (50%)

 

 Mr. Reeder

 

    

 

$186,000

 

 

 

  

Corporate EBITDA (50%) / PC Business Unit EBITDA (50%)

 

Though not a participant in the 2016 Cash Bonus Program, Mr. Zugay received an annual cash incentive under our annual incentive plan. The committee used substantially the same methodology for determining Mr. Zugay’s annual cash incentive under the annual incentive plan as was used for determining the other NEOs’ annual cash incentives under the 2016 Cash Bonus Program.

 

KOPPERS HOLDINGS INC. - 2017 Proxy Statement    21