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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under § 240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Ryder System, Inc.
11690 N.W. 105 Street
Miami, Florida 33178
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Time:
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10:00 a.m. Eastern Daylight Time
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Date:
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May 3, 2019
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Place:
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Ryder System, Inc. Headquarters
11690 N.W. 105th Street
Miami, Florida 33178
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Purpose:
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1. To elect eleven directors for a one-year term expiring at the 2020 Annual Meeting of Shareholders.
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2. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered certified public accounting firm for the 2019 fiscal year.
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3. To approve, on an advisory basis, the compensation of our named executive officers.
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4. To approve the 2019 Equity and Incentive Compensation Plan.
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5. To approve amendments to our Restated Articles of Incorporation and By-Laws to remove supermajority voting provisions on shareholder action by written consent.
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6. To vote, on an advisory basis, on a shareholder proposal on an independent board chairman.
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7. To consider any other business that is properly presented at the meeting.
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Who May Vote:
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You may vote if you were a record owner of our common stock at the close of business on March 8, 2019.
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Proxy Voting:
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Your vote is important. You may vote:
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• via Internet;
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• by telephone;
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• by mail, if you received a paper copy of these proxy materials; or
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• in person at the meeting.
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TABLE OF CONTENTS
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Page
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CORPORATE RESPONSIBILITY AND SUSTAINABILITY
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RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTING FIRM (PROPOSAL 2)
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MANAGEMENT PROPOSAL TO APPROVE THE 2019 EQUITY AND INCENTIVE COMPENSATION PLAN (PROPOSAL 4)
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MANAGEMENT PROPOSAL TO APPROVE AMENDMENTS TO OUR RESTATED ARTICLES OF INCORPORATION AND BY-LAWS TO REMOVE SUPERMAJORITY VOTING PROVISIONS ON SHAREHOLDER ACTION BY WRITTEN CONSENT (PROPOSAL 5)
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SHAREHOLDER PROPOSAL ON INDEPENDENT BOARD CHAIRMAN (PROPOSAL 6)
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APPENDIX A - 2019 EQUITY AND INCENTIVE COMPENSATION PLAN
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APPENDIX B - PROPOSED ARTICLES OF AMENDMENT TO RYDER SYSTEM, INC. RESTATED ARTICLES OF INCORPORATION
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APPENDIX C - PROPOSED AMENDMENT TO RYDER SYSTEM, INC. BY-LAWS
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Ryder System, Inc.
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2018 Proxy Statement
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i
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Proxy Summary
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PROXY SUMMARY
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ANNUAL MEETING
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Date:
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May 3, 2019
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Time:
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10:00 a.m. Eastern Daylight Time
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Place:
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Ryder System, Inc. Headquarters, 11690 N.W. 105th Street, Miami, Florida 33178
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Record Date:
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March 8, 2019
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Online
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By Phone
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By Mail
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In Person
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www.proxyvote.com
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1.800.690.6903
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Completing, signing and
returning your proxy card
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With proof of ownership
and a valid photo ID
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VOTING MATTERS AND BOARD RECOMMENDATIONS
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Matter
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Board Recommendation
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Page
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No. 1
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Election of Directors
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FOR each Director Nominee
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No. 2
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Ratification of PricewaterhouseCoopers LLP as Independent Auditor
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FOR
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No. 3
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Advisory Vote on Executive Compensation
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FOR
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No. 4
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Management Proposal to Approve the 2019 Equity and Incentive Compensation Plan
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FOR
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No. 5
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Management Proposal to Remove Supermajority Voting Provisions for Shareholder Action by Written Consent
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FOR
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No. 6
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Advisory Vote on Shareholder Proposal on an Independent Board Chairman
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AGAINST
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Ryder System, Inc.
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2019
Proxy Statement
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1
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Proxy Summary
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2018 FINANCIAL HIGHLIGHTS
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4
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Record total revenue increased 15% to $8.4 billion and record operating revenue
*
increased 11% to $6.7 billion compared to 2017. Total revenue and operating revenue grew across all three business segments reflecting new business and higher volumes.
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4
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Earnings per share (EPS) from continuing operations decreased 65% to $5.21 primarily due to the one-time benefit of the Tax Cuts and Jobs Act (Tax Reform) in the prior year. Comparable EPS
*
increased 28% to $5.79 primarily due to lower tax rate from tax reform and improved operating performance.
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4
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EBT increased 10% from the prior year primarily due to higher operating results in all business segments.
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4
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We grew ChoiceLease by a record 9,600 vehicles and delivered our seventh consecutive year of lease fleet growth.
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4
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Adjusted return on capital (ROC)
*
increased 70 basis points from 4.2% in the prior year to 4.9% primarily due to higher pre-tax earnings.
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4
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Commercial rental revenue increased 18% from the prior year due to stronger demand as well as higher pricing.
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*
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Operating revenue, comparable EPS and adjusted ROC are non-GAAP financial measures. For a reconciliation of total revenue to operating revenue, GAAP EPS to comparable EPS, and our non-GAAP elements of our adjusted ROC to the corresponding GAAP measure as well as the reasons why management believes these measures are useful to shareholders, refer to the "Non-GAAP Financial Measures" section on pages 57-65 of our Annual Report on Form 10-K for the year ended
December 31, 2018
.
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BOARD AND GOVERNANCE HIGHLIGHTS
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BOARD OF DIRECTORS
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Name
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Age
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Director Since
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Professional Background
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Independent
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Committee Memberships
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John M. Berra
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71
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2003
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Retired EVP of Emerson Electric Company
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X
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Compensation & Governance
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Robert J. Eck
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60
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2011
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Retired CEO of Anixter International, Inc.
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X
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Compensation & Finance
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Robert A. Hagemann
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62
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2014
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Retired CFO of Quest Diagnostics Incorporated
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X
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Audit (Chair) & Finance
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Michael F. Hilton
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64
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2012
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President & CEO of Nordson Corporation
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X
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Compensation & Governance
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Tamara L. Lundgren
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61
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2012
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President & CEO of Schnitzer Steel Industries, Inc.
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X
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Audit & Governance
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Luis P. Nieto, Jr.
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63
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2007
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Retired President of the Consumer Foods Group for ConAgra Foods Inc.
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X
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Audit & Finance (Chair)
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David G. Nord
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61
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2018
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Chairman, President & CEO of Hubbell Incorporated
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X
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Compensation & Finance
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Robert E. Sanchez
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53
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2013
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Chair & CEO of Ryder System, Inc.
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Abbie J. Smith
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65
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2003
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Professor of Accounting at the University of Chicago Booth School of Business
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X
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Audit & Finance
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E. Follin Smith
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59
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2005
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Retired EVP, CFO & Chief Administrative Officer of Constellation Energy Group, Inc.
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X
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Compensation (Chair) & Governance
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Dmitri L. Stockton
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54
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2018
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Retired Chairman, President & CEO of GE Asset Management
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X
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Compensation & Finance
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Hansel E. Tookes, II
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71
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2002
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Retired President of Raytheon International
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Lead Independent Director
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Audit & Governance (Chair)
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4
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We engage in continuous outreach with shareholders throughout the year and regularly report feedback to our Board.
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4
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We routinely review governance and voting policies of our largest shareholders who publish their policies and, each year, we reach out to shareholders representing at least half of our outstanding shares to seek and discuss their feedback on corporate governance, our compensation programs and any other matters of interest. After the 2018 annual meeting, we reached out to our largest shareholders constituting over 53% of our outstanding shares to request feedback on our governance profile and compensation structure.
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Ryder System, Inc.
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2019
Proxy Statement
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2
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Proxy Summary
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4
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Our Board and management review and evaluate shareholder input to identify issues and concerns that may require Board attention or changes to our policies, practices or disclosure.
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4
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In addition to our annual outreach, our CEO, CFO and Investor Relations team meet frequently with shareholders and the investment community regarding our strategy and performance. Depending on the topics the investor wishes to discuss, our meetings with shareholders may also include our Lead Independent Director and Chair of the Corporate Governance and Nominating Committee and the Chair of the Compensation Committee.
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4
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Proposing to remove the last-remaining supermajority voting provision in our Restated Articles of Incorporation and By-Laws (for action by written consent) at
our 2019 Annual Meeting.
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4
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Appointing two new Board members in 2018 as part of our Board evaluation, succession planning and refreshment process.
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4
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Modifying our executive compensation program, including by (i) moving from long-term performance targets of less than three years to three-year performance periods and (ii) changing our stand-alone total shareholder return (“TSR”) performance metric to a TSR modifier that adjusts payouts, either upward or downward, to reflect our performance against our custom peer group.
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4
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All directors are independent (except the CEO/Chair)
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4
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Regular executive sessions in conjunction with each regularly scheduled Board meeting
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4
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None of our directors serve on more than three other public company boards
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4
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Strong Board oversight of risk management and compliance process
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4
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No related person transactions in 2018
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4
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Annual Board and committee evaluations
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4
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Strong focus on CEO succession planning
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4
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Minimum stock ownership requirements for directors and executive officers
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4
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Comprehensive Corporate Sustainability Report published in 2019
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4
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Robust code of ethics and enterprise risk management system
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4
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Strong Lead Independent Director role, who chairs meetings of the independent directors at every Board meeting and who oversees the annual Board evaluation, CEO succession planning and search process for new directors, among other responsibilities
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4
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Average Board tenure is 8.9 years; 25% of the directors on the Board have a tenure of less than six years and seven of twelve directors are women or minorities
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EXECUTIVE COMPENSATION HIGHLIGHTS
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4
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The Compensation Committee made several changes to our executive compensation program in 2018 intended to further align our compensation program with the objectives articulated by our shareholders, including:
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◦
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Setting fixed performance targets for each three-year long-term grant at the beginning of the three-year period.
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◦
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Replacing the annual ROC metric in the long-term incentive plan ("LTIP") with a three-year ROC/Cost of Capital ("COC") spread metric designed to incentivize ROC spread improvement over the full performance period, which will be measured at the end of such three-year period.
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◦
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Shifting from a standalone TSR performance metric to a TSR performance results modifier, which reduces earned performance-based awards if TSR performance is below the median of Ryder's TSR peer group and increases awards for above median performance. No TSR modifier will be applied to increase payouts if Ryder's absolute TSR is negative.
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◦
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Adding a new strategic revenue growth metric to incentivize growth in areas which shareholders told us are key to creating long-term shareholder value. The 2018 performance targets are now based on a three-year compound
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Ryder System, Inc.
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2019
Proxy Statement
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3
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Proxy Summary
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◦
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Replacing a portion of the stock option allocation in our LTIP with restricted stock awards in order to enhance executive stock ownership and serve as a retention tool for our named executive officers ("NEOs"), consistent with market and peer group practices.
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4
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In 2018, 87% of our CEO's target compensation was composed of "at risk" compensation. CEO compensation is a mix of base salary (13%), short-term incentives (20%) and long-term incentives (67%), which we believe provides compensation opportunities measured by a variety of time horizons to appropriately balance our near-term and long-term strategic goals.
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4
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A variety of distinct performance metrics tied to our financial and strategic objectives are used in our short-term and long-term incentive plans. We believe this “portfolio” approach to performance metrics encourages executives to focus on overall, sustainable Company performance.
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4
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Equity incentive programs and stock ownership guidelines are designed to align management and shareholder interests by providing vehicles for executive officers to maintain ownership positions in the Company.
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◦
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In 2017, the Compensation Committee increased stock ownership requirements from four to six times base salary for the CEO, and from two to three times base salary for all other NEOs.
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◦
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Stock ownership requirements for the Board were also increased from five to six times each director's total annual cash retainer.
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4
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Starting in 2018, the Compensation Committee replaced performance-based cash awards with performance-based restricted stock rights in order to increase shareholder alignment.
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4
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In
2018
, the Compensation Committee, after an evaluation by the Committee's independent compensation consultant and consultation with management, approved changes to the compensation peer group and TSR custom peer group to improve operational alignment and ensure appropriate comparisons.
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4
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We incorporate several risk mitigation policies into our compensation program, including:
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◦
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The Compensation Committee’s ability to use “negative discretion” to align appropriate payouts to Company and individual performance;
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◦
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Anti-hedging and anti-pledging policies; and
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◦
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Clawback policy applicable to performance-based incentive awards.
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4
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Our equity plan, as amended in 2016, as well as our cash severance and annual cash incentive awards, all require "double-trigger" vesting upon a change of control. Our new equity plan, up for approval at the Annual Meeting (Proposal 4), retains this same requirement.
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4
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Goals for our performance-based awards are approved by our independent directors and take into account our historical performance, current strategic initiatives and the macroeconomic environment in which we operate. For 2018:
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◦
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target operating revenue
*
was $6.59 billion, an increase from our 2017 actual operating revenue of $5.79 billion.
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◦
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target comparable earnings per share
*
(EPS) was $5.73, an increase of 26% from the comparable EPS results in 2017 of $4.53.
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Ryder System, Inc.
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2019
Proxy Statement
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4
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Proxy Summary
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◦
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target 2018 ROC
*
for the 2016-2018 and 2017-2019 LTIPs was 4.88%, which was significantly higher than 2017 actual ROC performance of 4.22% and was a particularly challenging target given the weak conditions in our used vehicle sales business.
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*
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Operating revenue, comparable EPS and adjusted ROC are non-GAAP financial measures. For a reconciliation of total revenue to operating revenue, GAAP EPS to comparable EPS, and our non-GAAP elements of our adjusted ROC to the corresponding GAAP measure as well as the reasons why management believes these measures are useful to shareholders, refer to the "Non-GAAP Financial Measures" section on pages 57-65 of our Annual Report on Form 10-K for the year ended
December 31, 2018
.
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Ryder System, Inc.
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2019
Proxy Statement
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5
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Information About our Annual Meeting
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INFORMATION ABOUT OUR ANNUAL MEETING
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Ryder System, Inc.
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2019
Proxy Statement
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6
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Election of Directors
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PROPOSAL NO. 1
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ELECTION OF DIRECTORS
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KEY FACTS ABOUT OUR BOARD
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Ryder System, Inc.
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2019
Proxy Statement
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7
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Election of Directors
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Ryder System, Inc.
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2019
Proxy Statement
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8
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Election of Directors
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DIRECTOR NOMINEES
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Robert J. Eck
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DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Eck served as Chief Executive Officer of Anixter International, Inc. (Anixter), a global distributor of network and security solutions, electrical and electronic solutions, and utility power solutions, from 2008 until he retired in 2018. He serves on Anixter’s Board of Directors.
Mr. Eck joined Anixter in 1989 and held roles of increasing responsibility in strategy, supply chain management, sales and marketing, and human resources. From 2007 to 2008, Mr. Eck served as Executive Vice President and Chief Operating Officer of Anixter. Prior to that position, Mr. Eck served as Executive Vice President of Enterprise Cabling and Security Solutions for Anixter from 2004 to 2007. In 2003, he served as Senior Vice President of Physical Security Products and Integrated Supply of Anixter Inc.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Anixter International, Inc.
QUALIFICATIONS:
The Board nominated Mr. Eck as a director because of his leadership experience and expertise in supply chain management, domestic and international operations, and marketing and business development, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Eck has prior leadership experience as President and Chief Executive Officer of a global public company. He also has experience as a director on a global public company board.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Eck's nomination, the Board considered Mr. Eck's qualifications listed above, his valuable, significant contributions to the Board and Company and his demonstrated willingness and ability to commit adequate time and attention to all Board matters.
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Director since:
May
2011
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Committees:
- Compensation
- Finance
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Age
: 60
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Robert A. Hagemann
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DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Hagemann served as Senior Vice President and Chief Financial Officer of Quest Diagnostics Incorporated until he retired in 2013.
Mr. Hagemann joined Quest’s predecessor, Corning Life Sciences, Inc., in 1992, and held roles of increasing responsibility until he was named Chief Financial Officer of Quest in 1998. Prior to joining Corning, Mr. Hagemann held senior financial positions at Prime Hospitality, Inc. and Crompton & Knowles, Inc. He also held various positions in corporate accounting and audit at Merrill Lynch and Company and Ernst & Young.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Graphic Packaging Holding Company
• Zimmer Biomet Holdings, Inc.
QUALIFICATIONS:
The Board nominated Mr. Hagemann as a director because of his leadership experience and expertise in finance/accounting, business development, strategy, supply chains and government contracting, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Hagemann has leadership experience as Chief Financial Officer of a global public company. He also has experience as a director on global public company boards, including serving on audit, compensation and research/innovation/technology committees.
The Board has determined that Mr. Hagemann qualifies as an audit committee financial expert.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Hagemann's nomination, the Board considered Mr. Hagemann's current service on the board of two other public companies. Mr. Hagemann was renominated based on his qualifications listed above, his valuable, significant contributions to the Board and Company and his demonstrated willingness and ability to commit adequate time and attention to all Board matters.
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Director since:
August 2014
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Committees:
- Audit (Chair)
- Finance
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Age
: 62
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Ryder System, Inc.
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2019
Proxy Statement
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9
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Election of Directors
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Michael F. Hilton
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CURRENT PRINCIPAL OCCUPATION:
Mr. Hilton serves as President and Chief Executive Officer of Nordson Corporation, a position he has held since he joined Nordson in 2010. Nordson engineers, manufactures and markets products and systems used for dispensing adhesives, coatings, sealants, biomaterials and other materials in a wide variety of end markets. Mr. Hilton has publicly announced that he intends to retire from his position as President and CEO of Nordson by the end of 2019.
DESCRIPTION OF BUSINESS EXPERIENCE:
Prior to joining Nordson, Mr. Hilton served as Senior Vice President and General Manager of Air Products & Chemicals, Inc. from 2007 until 2010 with specific responsibility for leading the company's global Electronics and Performance Materials segment. Mr. Hilton joined Air Products in 1976, where he held roles of increasing responsibility in a variety of management and operations positions. Air Products serves customers in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, equipment and services.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Nordson Corporation
• Lincoln Electric
QUALIFICATIONS:
The Board nominated Mr. Hilton as a director because of his leadership experience and expertise in global operations, strategy development, business to business marketing, and oversight of large and diverse business units, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Hilton has leadership experience as a Chief Executive Officer of a global public company. He also has experience as a director on two global public company boards, including serving on audit and governance committees.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Hilton's nomination, the Board considered Mr. Hilton's current role as CEO of another public company and service on the board of his company and one other public company. Mr. Hilton was renominated based on his qualifications listed above, his valuable contributions to the Board, his in-depth knowledge of the Company gleaned from his years of service on the Board, and his demonstrated willingness and ability to commit adequate time and attention to all Board matters.
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Director since:
July 2012
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Committees:
- Compensation
- Corporate Governance & Nominating
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Age
: 64
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Tamara L. Lundgren
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||
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CURRENT PRINCIPAL OCCUPATION:
Ms. Lundgren serves as President and Chief Executive Officer of Schnitzer Steel Industries, Inc., a position she has held since 2008. Schnitzer Steel is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with approximately 100 operating facilities in the United States, Puerto Rico and Canada.
DESCRIPTION OF BUSINESS EXPERIENCE:
Ms. Lundgren joined Schnitzer Steel in 2005 as Chief Strategy Officer and subsequently served as Executive Vice President and Chief Operating Officer from 2006 until 2008. Prior to joining Schnitzer Steel, Ms. Lundgren was a managing director at JP Morgan Chase in London and managing director at Deutsche Bank AG in New York and London. Before joining Deutsche Bank, Ms. Lundgren was a partner at the law firm of Hogan & Hartson, LLP in Washington D.C.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Schnitzer Steel Industries
OTHER RELEVANT EXPERIENCE:
• Member of the Board of Directors of Federal Reserve Bank of San Francisco
• Executive Committee member of the U.S. Chamber of Commerce
QUALIFICATIONS:
The Board nominated Ms. Lundgren as a director because of her leadership experience and expertise in global operations, strategy, finance and corporate law, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Ms. Lundgren has leadership experience as President and Chief Executive Officer of a global public company. She also has experience as a director on a global public company board.
The Board has determined that Ms. Lundgren qualifies as an audit committee financial expert.
Consistent with our policies and practices related to director service, in making a determination as to Ms. Lundgren's nomination, the Board considered Ms. Lundgren's current role as CEO of another public company and service on the board of her company. Ms. Lundgren was renominated based on her qualifications listed above, her valuable, significant contributions to the Board and Company and her demonstrated willingness and ability to commit adequate time and attention to all Board matters.
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Director since:
October 2012
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Committees:
- Audit
- Corporate Governance & Nominating
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Age
: 61
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Ryder System, Inc.
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2019
Proxy Statement
|
10
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|
|
Election of Directors
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Luis P. Nieto, Jr.
|
||
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DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Nieto served as President of the Consumer Foods Group for ConAgra Foods Inc. from 2007 until he retired in 2009.
Mr. Nieto joined ConAgra in 2005 and held various leadership positions, including President of the Meats Group and Refrigerated Foods Group. ConAgra is one of the largest packaged food companies in North America. Prior to joining ConAgra, Mr. Nieto was President and Chief Executive Officer of the Federated Group, a leading private label supplier to the retail grocery and foodservice industries, from 2002 to 2005. From 2000 to 2002, he served as President of the National Refrigerated Products Group of Dean Foods Company. Prior to joining Dean Foods, Mr. Nieto held positions in brand management and strategic planning with Mission Foods, Kraft Foods and the Quaker Oats Company. Mr. Nieto is the President of Nieto Advisory LLC, a consulting firm and is affiliated with Akoya Capital Partners.
OTHER PUBLIC BOARD MEMBERSHIPS:
• AutoZone, Inc.
QUALIFICATIONS:
The Board nominated Mr. Nieto as a director because of his leadership experience and expertise in finance, operations, supply chains, brand management, marketing and strategic planning, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Nieto has leadership experience in positions of executive oversight and senior management at a global public company. He also has experience as a director on a global public company board, including serving on audit and governance committees.
The Board has determined that Mr. Nieto qualifies as an audit committee financial expert.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Nieto's nomination, the Board considered Mr. Nieto's current service on the board of another public company. Mr. Nieto was renominated based on his qualifications listed above, his valuable, significant contributions to the Board and Company and his demonstrated willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
February 2007
|
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Committees:
- Audit
- Finance (Chair)
|
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Age
: 63
|
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David G. Nord
|
||
|
|
CURRENT PRINCIPAL OCCUPATION:
Mr. Nord serves as Chairman, President and Chief Executive Officer of Hubbell Incorporated, an international manufacturer of electrical and electronic products for a broad range of non-residential and residential construction, industrial and utility applications. Mr. Nord has held this position since May 2014, and prior to that served as President and Chief Executive Officer of Hubbell since January 2013.
DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Nord joined Hubbell in 2005 as Senior Vice President and Chief Financial Officer, and subsequently served as President and Chief Operating Officer from 2012 to 2013. Prior to joining Hubbell, Mr. Nord held various senior financial positions at United Technologies Corporation, including Vice President and Controller as well as Vice President of Finance and Chief Financial Officer of Hamilton Sundstrand Corporation, one of its principal subsidiaries.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Hubbell Incorporated
QUALIFICATIONS:
The Board nominated Mr. Nord as a director because of his leadership experience, expertise in global operations and strong financial acumen, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Nord has leadership experience as President and CEO of a global public company. He also has experience as a director on a global public company board.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Nord's nomination, the Board considered Mr. Nord's current role as CEO of another public company and service on the board of his company. Mr. Nord was nominated based on his qualifications listed above and his willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
March 2018
|
|
|
Committees:
- Compensation
- Finance
|
|
|
Age
: 61
|
|
Ryder System, Inc.
|
2019
Proxy Statement
|
11
|
|
|
Election of Directors
|
Robert E. Sanchez
|
||
|
|
CURRENT PRINCIPAL OCCUPATION:
Mr. Sanchez currently serves as Chair and Chief Executive Officer of Ryder System, Inc.
DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Sanchez was appointed Chair of Ryder's Board in May 2013. He was appointed President and Chief Executive Officer in January 2013, at which time he was also elected to Ryder's Board. Mr. Sanchez joined Ryder in 1993 and has served in positions of increasing responsibility, including a broad range of leadership positions in Ryder's business segments. Mr. Sanchez served as President and Chief Operating Officer from February 2012 to December 2012. Prior to that position, he served as President of Global Fleet Management Solutions, Ryder's largest business segment, from September 2010 to February 2012. Mr. Sanchez also served as Executive Vice President and Chief Financial Officer from October 2007 to September 2010; as Executive Vice President of Operations, U.S. Fleet Management Solutions from October 2005 to October 2007; and as Senior Vice President and Chief Information Officer from January 2003 to October 2005. Mr. Sanchez has been a member of Ryder's Executive Leadership team since 2003.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Texas Instruments
OTHER RELEVANT EXPERIENCE:
• Member of the Board of Directors of the Truck Renting and Leasing Association
QUALIFICATIONS:
The Board nominated Mr. Sanchez as a director because of his leadership experience and expertise in transportation, supply chains/logistics, global operations, finance and information technology, which the Board finds to be valuable skills that complement the other skills represented on our Board. He has leadership experience based on years of broad-based, diverse senior management experience at Ryder, including serving as President and Chief Operating Officer, Division President of Ryder's largest business segment, Chief Financial Officer and Chief Information Officer. He also has experience as a director on a global public company board, including serving as compensation committee chair.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Sanchez's nomination, the Board considered Mr. Sanchez's current role as CEO of Ryder and service on the board of another public company. Mr. Sanchez was renominated based on his qualifications listed above, his valuable, significant contributions to the Board and Company and his demonstrated willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
January 2013
|
|
|
Board Chair
|
|
|
Age
: 53
|
|
Abbie J. Smith
|
||
|
|
CURRENT PRINCIPAL OCCUPATION:
Ms. Smith serves as the Boris and Irene Stern Distinguished Service Professor of Accounting at the University of Chicago Booth School of Business.
DESCRIPTION OF BUSINESS EXPERIENCE:
Ms. Smith joined the faculty of the University of Chicago Booth School of Business in 1980 upon completion of her Ph.D. in Accounting at Cornell University. The primary focus of her research is corporate restructuring, transparency and corporate governance. She was nominated for a 2005 Smith Breeden Prize for her publication in
The Journal of Finance
and has received a Marvin Bower Fellowship from the Harvard Business School, a McKinsey Award for Excellence in Teaching and a GE Foundation Research Grant.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Dimensional Investment Group Inc.
• DFA Investment Dimensions Group Inc.
• HNI Corporation
OTHER RELEVANT EXPERIENCE:
• Trustee of certain Chicago-based UBS Funds
QUALIFICATIONS:
The Board nominated Ms. Smith as a director because of her leadership experience and expertise in business, accounting and corporate governance, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Ms. Smith has an accomplished educational background with extensive academic and teaching experience in business, accounting and corporate governance. She also has experience as a director on global public company boards, including serving as lead independent director and member of audit and governance committees.
The Board has determined that Ms. Smith qualifies as an audit committee financial expert.
Consistent with our policies and practices related to director service, in making a determination as to Ms. Smith's nomination, the Board considered Ms. Smith's current role as a professor of a distinguished university and service on the board of three other companies. Ms. Smith was renominated based on her qualifications listed above, her valuable, significant contributions to the Board and Company and her demonstrated willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
July 2003
|
|
|
Committees:
- Audit
- Finance
|
|
|
Age
: 65
|
|
Ryder System, Inc.
|
2019
Proxy Statement
|
12
|
|
|
Election of Directors
|
E. Follin Smith
|
||
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
Until May 2007, Ms. Smith served as the Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Constellation Energy Group, Inc., then the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Ms. Smith joined Constellation Energy Group as Senior Vice President, Chief Financial Officer in June 2001 and was appointed Chief Administrative Officer in December 2003.
Before joining Constellation Energy Group, Ms. Smith was Senior Vice President and Chief Financial Officer of Armstrong Holdings, Inc., the global leader in hard-surface flooring and ceilings. Prior to joining Armstrong, Ms. Smith held various senior financial positions with General Motors, including Chief Financial Officer for General Motors’ Delphi Chassis Systems division.
OTHER PUBLIC BOARD MEMBERSHIPS:
• A past director of Kraft Foods Group (until July 2015)
• A past director of Discover Financial Services (until May 2014)
QUALIFICATIONS:
The Board nominated Ms. Smith as a director based on her leadership experience and expertise in finance, human resources, risk management, legal and information technology, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Ms. Smith has leadership experience serving as Chief Financial Officer and Chief Administrative Officer of global public companies. She also has experience as a director on other global public company boards, including serving on audit, governance and risk committees.
Consistent with our policies and practices related to director service, in making a determination as to Ms. Smith's nomination, the Board considered Ms. Smith's past experience as a CFO and service on other company boards. Ms. Smith was renominated based on her qualifications listed above, her valuable, significant contributions to the Board and Company and her demonstrated willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
July 2005
|
|
|
Committees:
- Compensation (Chair)
- Corporate Governance & Nominating
|
|
|
Age
: 59
|
|
Dmitri L. Stockton
|
||
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Stockton most recently served as Senior Vice President and Special Advisor to the Chairman of General Electric Company (GE) from 2016 until his retirement in 2017. GE is a multinational industrial company that provides power and water, aviation, oil and gas, healthcare, appliances and lighting, energy management, transportation and financial services.
Mr. Stockton joined GE in 1987 and held various positions of increasing responsibility during his 30 year tenure. From 2011 to 2016, Mr. Stockton served as Chairman, President and Chief Executive Officer of GE Asset Management, a global asset management company affiliated with GE, and as Senior Vice President of GE. From 2008 to 2011, he served as President and Chief Executive Officer for GE Capital Global Banking and Senior Vice President of GE in London, UK. He previously also served as President and Chief Executive Officer for GE Consumer Finance for Central and Eastern Europe.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Deere & Company
• Stanley Black & Decker
• Target Corporation
QUALIFICATIONS:
The Board nominated Mr. Stockton as a director because of his leadership experience and his expertise in risk management, governance, finance and asset management, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Stockton also has leadership experience in positions of executive oversight and senior management from his tenure at GE, as well as experience as a director on public company boards.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Stockton's nomination, the Board considered Mr. Stockton's current service on the Board of three other public companies. Mr. Stockton was nominated based on his qualifications listed above and his willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
March 2018
|
|
|
Committees:
- Compensation
- Finance
|
|
|
Age
: 54
|
|
Ryder System, Inc.
|
2019
Proxy Statement
|
13
|
|
|
Election of Directors
Corporate Governance Framework
|
Hansel E. Tookes, II
|
||
|
|
DESCRIPTION OF BUSINESS EXPERIENCE:
Mr. Tookes served as President of Raytheon International until he retired from Raytheon Company in December 2002.
Mr. Tookes joined Raytheon in September 1999 as President and Chief Operating Officer of Raytheon Aircraft Company. He was appointed Chief Executive Officer in January 2000, Chairman in August 2000 and became President of Raytheon International in May 2001. Prior to joining Raytheon in 1999, Mr. Tookes served as President of Pratt & Whitney's Large Military Engines Group since 1996. He joined Pratt & Whitney's parent company, United Technologies Corporation, in 1980. Mr. Tookes was a Lieutenant Commander and military pilot in the U.S. Navy and later served as a commercial pilot with United Airlines.
OTHER PUBLIC BOARD MEMBERSHIPS:
• Corning Incorporated
• Harris Corporation
• NextEra Energy, Inc. (formerly FPL Group,
Inc.)
QUALIFICATIONS:
The Board nominated Mr. Tookes as a director because of his leadership experience and expertise in global operations, the transportation industry, the U.S. military and government contracting, which the Board finds to be valuable skills that complement the other skills represented on our Board. In addition, Mr. Tookes has leadership experience in positions of executive oversight and senior management at global public companies. He also has experience as a director on global
public company boards, including serving as governance committee chair and member of audit, compensation, finance and executive committees.
The Board has determined that Mr. Tookes qualifies as an audit committee financial expert.
Consistent with our policies and practices related to director service, in making a determination as to Mr. Tookes' nomination, the Board considered Mr. Tookes' current service on the board of three other public companies. Mr. Tookes was renominated based on his qualifications listed above, his valuable, significant contributions to the Board and Company and his demonstrated willingness and ability to commit adequate time and attention to all Board matters.
|
Director since:
September 2002
Lead Independent Director
|
|
|
Committees:
- Audit
- Corporate Governance & Nominating (Chair)
|
|
|
Age
: 71
|
|
CORPORATE GOVERNANCE FRAMEWORK
|
•
|
Principles of Business Conduct
|
•
|
Committee charters
|
•
|
Board - background and experience
|
•
|
Board committees - current members
|
•
|
How to contact our directors
|
•
|
The Board's annual strategic direction review
|
•
|
Director independence (including our director independence standards)
|
•
|
Director qualifications and responsibilities
|
•
|
Board and leadership structure
|
•
|
Director resignation policy
|
•
|
Director compensation
|
•
|
CEO and senior management succession
|
•
|
CEO evaluation and compensation
|
•
|
Board and committee evaluations
|
Ryder System, Inc.
|
2019
Proxy Statement
|
14
|
|
|
Board of Directors
|
BOARD OF DIRECTORS
|
Director Independence
|
|
11 of the 12 Directors are Independent
|
Ryder System, Inc.
|
2019
Proxy Statement
|
15
|
|
|
Board of Directors
|
SHAREHOLDER ENGAGEMENT AND COMMUNICATIONS WITH THE BOARD
|
Summary of Ryder's 2018 Shareholder Engagement
|
|
4
|
During the summer and fall of 2018, we sought feedback from shareholders holding over 53% of our shares, including our top 20 shareholders, on Ryder's governance and compensation profile.
|
4
|
This engagement outreach was in addition to over a hundred other meetings and discussions that management and investor relations held with shareholders since the 2018 Annual Meeting.
|
4
|
None of the shareholders whom we reached out to expressed any concerns, which we believe indicates that shareholders have been pleased with recently implemented governance changes.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
16
|
|
|
Board of Directors
|
Actions Taken as a Result of Shareholder Engagement
|
|
4
|
Provided shareholders with the right to act by written consent in 2018
|
4
|
Commenced annual elections for all directors beginning in 2018
|
4
|
Moved to three-year performance periods and fixed three-year targets in the LTIP beginning with 2018 awards
|
4
|
Implemented a balanced proxy access right in 2016
|
4
|
Adopted double-trigger vesting upon a change of control in our Equity Plan in 2016 (eliminating our single-trigger vesting provisions)
|
4
|
Commenced disclosing on an annual basis our political contributions policy and annual direct corporate contributions to political candidates on our website beginning in 2015
|
4
|
Eliminated supermajority voting provisions from our By-Laws regarding removal of directors, amendment of certain provisions of our Articles of Incorporation and By-Laws and approval of certain business combinations with interested shareholders beginning in 2014
|
4
|
Periodically publish a corporate sustainability report beginning in 2012
|
4
|
Commenced disclosure of carbon emissions and energy data through the Carbon Disclosure Project beginning in 2008
|
BOARD MEETINGS
|
BOARD LEADERSHIP STRUCTURE
|
Ryder System, Inc.
|
2019
Proxy Statement
|
17
|
|
|
Board of Directors
|
BOARD COMMITTEES
|
Ryder System, Inc.
|
2019
Proxy Statement
|
18
|
|
|
Audit Committee
|
AUDIT COMMITTEE
|
Robert A. Hagemann (Chair)
|
Tamara L. Lundgren
|
Luis P. Nieto, Jr.
|
Abbie J. Smith
|
Hansel E. Tookes, II
|
•
|
meets the independence requirements of the NYSE’s corporate governance listing standards and our director independence standards;
|
•
|
meets the enhanced independence standards for audit committee members required by the SEC;
|
•
|
is financially literate, knowledgeable and qualified to review financial statements; and
|
•
|
qualifies as an “audit committee financial expert” under SEC rules.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
19
|
|
|
Compensation Committee
|
COMPENSATION COMMITTEE
|
E. Follin Smith (Chair)
|
John M. Berra
|
Robert J. Eck
|
Michael F. Hilton
|
David G. Nord*
|
Dmitri L. Stockton*
|
Key Responsibilities
|
||||||
4
|
Overseeing, reviewing and approving our executive and director compensation plans, policies and programs
|
|||||
4
|
Considering industry trends, benchmark data and whether compensation actions support key business objectives and pay for performance philosophy
|
|||||
4
|
Approving compensation actions for direct reports to the CEO and recommending compensation actions for the CEO for consideration by the independent directors
|
|||||
4
|
Reviewing and discussing the results of the shareholder advisory vote on executive compensation (and the frequency of such vote) and considering whether to recommend any adjustments to policies and practices based on the vote results
|
|||||
4
|
Reviewing and assessing compensation policies from a risk management perspective
|
|||||
4
|
Overseeing the preparation of the Compensation Discussion and Analysis and determining whether to recommend it for inclusion in this proxy statement
|
|||||
Independence
|
||||||
4
|
All members are independent
|
Ryder System, Inc.
|
2019
Proxy Statement
|
20
|
|
|
Compensation Committee
|
Ryder System, Inc.
|
2019
Proxy Statement
|
21
|
|
|
Corporate Governance and Nominating Committee
|
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
|
Hansel E. Tookes, II
(Chair)
|
John M. Berra
*
|
Michael F. Hilton
|
Tamara L. Lundgren
|
E. Follin Smith
|
Key Responsibilities
|
||
4
|
Identifying and recommending qualified individuals to serve as directors
|
|
4
|
Reviewing the qualifications of director candidates, including those recommended by our shareholders pursuant to our By-Laws
|
|
4
|
Recommending to the Board the nominees to be proposed by the Board for election as directors at our Annual Meeting of Shareholders
|
|
4
|
Recommending the size, structure, composition and functions of Board committees
|
|
4
|
Reviewing and recommending changes to the charters of each committee of the Board
|
|
4
|
Designing and overseeing the Board and committee evaluation processes as well as the annual CEO evaluation process
|
|
4
|
Reviewing and recommending changes to our Corporate Governance Guidelines and Principles of Business Conduct and overseeing and approving governance practices of the Company and Board
|
|
4
|
Reviewing and overseeing the process by which the Board identifies and prepares for a crisis
|
|
4
|
Overseeing the Company's charitable contributions, government relations, environmental activities, safety performance, and diversity efforts
|
|
Independence
|
||
4
|
All members are independent
|
Ryder System, Inc.
|
2019
Proxy Statement
|
22
|
|
|
Corporate Governance and Nominating Committee
|
In identifying individuals to nominate for election to our Board, the Governance Committee seeks candidates who:
|
||||
4
|
have a high level of personal integrity and exercise sound business judgment
|
|||
4
|
are highly accomplished, with superior credentials, recognition and/or strong senior leadership experience in their respective fields
|
|||
4
|
have relevant expertise and experience that is valuable to the business of the Company and its long-term strategy, goals and initiatives
|
|||
4
|
have an understanding of, and concern for, the interests of our shareholders
|
|||
4
|
have sufficient time to devote to fulfilling their obligations as directors
|
Ryder System, Inc.
|
2019
Proxy Statement
|
23
|
|
|
Corporate Governance and Nominating Committee
|
Ryder System, Inc.
|
2019
Proxy Statement
|
24
|
|
|
Finance Committee
Corporate Responsibility and Sustainability
|
FINANCE COMMITTEE
|
Luis P. Nieto, Jr. (Chair)
|
Robert J. Eck
|
Robert A. Hagemann
|
David G. Nord
*
|
Abbie J. Smith
|
Dmitri L. Stockton*
|
Key Responsibilities
|
||
4
|
Reviewing our overall financial metrics, liquidity position, arrangements and requirements
|
|
4
|
Reviewing, approving and recommending certain capital expenditures, issuances or repurchases of debt and equity securities, dividend policy, pension contributions and acquisitions
|
|
4
|
Reviewing our relationships with rating agencies, banks and analysts
|
|
4
|
Reviewing and assessing our risk management policies and activities (relating to business, economic, interest rate, foreign currency and other risks relating to capital structure to access to capital) and providing guidance to the Board with respect thereto
|
|
4
|
Reviewing our overall tax planning strategy as well as our corporate insurance program and activities
|
|
4
|
Reviewing post-audits of major capital expenditures and business acquisitions
|
|
4
|
Reviewing and recommending to the Board the slate of persons to be appointed to the Company's Investment Committees and evaluating their performance
|
|
Independence
|
||
4
|
All members are independent
|
CORPORATE RESPONSIBILITY AND SUSTAINABILITY
|
Ryder System, Inc.
|
2019
Proxy Statement
|
25
|
|
|
Risk Management
|
RISK MANAGEMENT
|
Ryder System, Inc.
|
2019
Proxy Statement
|
26
|
|
|
Risk Management
|
Board's Risk Review and Assessment
|
||||
4
|
Review significant risks and consider such risks when overseeing strategic and business decisions.
|
|||
4
|
Discuss with management the effectiveness of our risk management processes in identifying, assessing and managing the organization’s most significant enterprise-wide risk exposures.
|
|||
4
|
Review an ERM report from the Chief Legal Officer, Chief Compliance Officer and Vice President of Internal Audit at least annually which (1) identifies the Company's risks, including detailed analysis of the likelihood of occurrence and potential impact of each risk, and (2) details the ERM program elements and process for risk identification.
|
|||
4
|
Review written updates and presentations on specific risks and our ERM program at every regularly scheduled meeting and discuss with management the most significant risks that are identified and managed by Ryder.
|
|||
4
|
Establish an annual schedule for the Board and committees to conduct individual, in depth reviews of the Company's key risks identified in the ERM report.
|
|||
4
|
Review an internal audit report from the Vice President of Internal Audit at least annually regarding internal audit's assessment of enterprise risks and audit activities to evaluate the controls and processes regarding such risks.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
27
|
|
|
Related Person Transactions
|
RELATED PERSON TRANSACTIONS
|
Related Person Transactions
|
|
No Related Person Transactions in 2018
|
•
|
any transaction in which we or a subsidiary of ours is a participant, the amount involved exceeds $120,000 and a “related person” has a direct or indirect material interest; or
|
•
|
any material amendment to an existing related person transaction.
|
•
|
whether the terms of the related person transaction are fair to us and on the same basis as would apply if the transaction did not involve a related person;
|
•
|
whether there are business reasons for us to enter into the related person transaction;
|
•
|
whether the related person transaction would impair the independence of an outside director; and
|
•
|
whether the related person transaction would present an improper conflict of interest for any of our directors or executive officers, taking into account the size of the transaction, the overall financial position of the director, executive officer or related person, the direct or indirect nature of the director’s, executive officer’s or related person’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Governance Committee deems relevant.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
28
|
|
|
Ratification of Independent Public Accounting Firm
|
PROPOSAL NO. 2
|
RATIFICATION OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
|
•
|
the quality of PricewaterhouseCoopers LLP's work product and performance;
|
•
|
the professional qualifications of PricewaterhouseCoopers LLP, the lead engagement partner and other members of the audit team;
|
•
|
PricewaterhouseCoopers LLP's knowledge and experience with the Company's business operations, accounting policies and industry;
|
•
|
the results of the PCAOB review of PricewaterhouseCoopers LLP;
|
•
|
PricewaterhouseCoopers LLP's independence program and controls for maintaining independence;
|
•
|
the appropriateness of Pricewaterhouse Coopers LLP's audit fees; and
|
•
|
the results of the Audit Committee's and management's annual evaluation of PricewaterhouseCoopers LLP's qualifications, performance and independence and the potential impact of selecting a different independent registered certified public accounting firm.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
29
|
|
|
Ratification of Independent Public Accounting Firm
|
Ryder System, Inc.
|
2019
Proxy Statement
|
30
|
|
|
Audit Committee Report
|
AUDIT COMMITTEE REPORT
|
Robert A. Hagemann (Chair)
|
Tamara L. Lundgren
|
Luis P. Nieto, Jr.
|
Abbie J. Smith
|
Hansel E. Tookes, II
|
Ryder System, Inc.
|
2019
Proxy Statement
|
31
|
|
|
Security Ownership of Officers and Directors
Section 16(a) Beneficial Ownership Reporting Compliance
|
SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS
|
Name of Beneficial Owner
|
|
Total Shares
Beneficially Owned
1
|
|
Percent of Class
2
|
Robert E. Sanchez
3,4
|
|
606,310
|
|
1.1%
|
John M. Berra
5
|
|
31,475
|
|
*
|
Dennis C. Cooke
|
|
111,142
|
|
*
|
John J. Diez
|
|
72,101
|
|
*
|
Robert J. Eck
3
|
|
16,773
|
|
*
|
Art A. Garcia
4
|
|
135,216
|
|
*
|
Robert A. Hagemann
5
|
|
11,006
|
|
*
|
Michael F. Hilton
|
|
12,623
|
|
*
|
Tamara L. Lundgren
|
|
9,659
|
|
*
|
Luis P. Nieto, Jr.
|
|
23,757
|
|
*
|
David G. Nord
|
|
3,065
|
|
*
|
J. Steven Sensing
|
|
57,177
|
|
*
|
Abbie J. Smith
4,5
|
|
47,655
|
|
*
|
E. Follin Smith
5
|
|
28,582
|
|
*
|
Dmitri L. Stockton
|
|
3,065
|
|
*
|
Hansel E. Tookes, II
3,5
|
|
34,927
|
|
*
|
Directors and Executive Officers as a Group
(23 persons) 3,4 |
|
1,477,003
|
|
2.8%
|
*
|
Represents less than 1% of our outstanding common stock, based on the 53,480,280 shares outstanding of the Company's common stock on February 22, 2019.
|
1
|
Unless otherwise noted, all shares included in this table are owned directly, with sole voting and dispositive power. Listing shares in this table shall not be construed as an admission that such shares are beneficially owned for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (Exchange Act).
|
2
|
Percent of class has been computed in accordance with Rule 13d-3(d)(1) of the Exchange Act.
|
3
|
Includes shares held through a trust, jointly with their spouses or other family members or held solely by their spouses, as follows: Mr. Sanchez, 2,193 shares; Mr. Eck, 1,900 shares; Mr. Tookes, 1,000 shares; and all directors and executive officers as a group, 5,266 shares.
|
4
|
Includes shares held in the accounts of executive officers pursuant to our 401(k) plan and deferred compensation plan and shares held in the accounts of directors pursuant to our deferred compensation plan as follows: Ms. A. Smith, 12,091 shares; Mr. Sanchez, 3,006 shares; and Mr. Garcia, 563 shares.
|
5
|
Includes stock granted to the director in lieu of his or her annual cash retainer, which stock has vested but will not be delivered to the director until six months after his or her departure from the Board.
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
Ryder System, Inc.
|
2019
Proxy Statement
|
32
|
|
|
Security Ownership of Certain Beneficial Owners
Compensation Discussion and Analysis Summary
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
|
Name and Address
|
Number of Shares
Beneficially
Owned
|
Percent of
Class
3
|
BlackRock, Inc.
1
55 East 52nd Street
New York, NY 10055 |
6,570,551
|
12.28%
|
The Vanguard Group, Inc.
2
100 Vanguard Blvd.
Malvern, PA 19355
|
5,399,427
|
10.10%
|
1
|
Based on the most recent SEC filing by BlackRock, Inc. on Schedule 13G/A dated January 31, 2019. Of the total shares shown, the nature of beneficial ownership is as follows: sole voting power 6,094,497; shared voting power 0; sole dispositive power 6,570,551; and shared dispositive power 0.
|
2
|
Based on the most recent SEC filing by The Vanguard Group, Inc. on Schedule 13G/A dated February 12, 2019. Of the total shares shown, the nature of beneficial ownership is as follows: sole voting power 25,363; shared voting power 5,991; sole dispositive power 5,373,411; and shared dispositive power 26,016.
|
3
|
The ownership percentages set forth in this column are based on the 53,480,280 shares outstanding of the Company's common stock on February 22, 2019, and the assumption that each person listed above owned the number of shares reflected above on such date.
|
COMPENSATION DISCUSSION AND ANALYSIS SUMMARY
|
•
|
Our compensation philosophy to align executive action with the best long-term interests of shareholders;
|
•
|
Our 2018 compensation program actions and pay-for-performance profile; and
|
•
|
The redesign of our programs in 2018 based on input from our shareholders.
|
Robert E. Sanchez
|
Chair and Chief Executive Officer (CEO)
|
Art A. Garcia
|
Executive Vice President and Chief Financial Officer
|
Dennis C. Cooke
|
President - Global Fleet Management Solutions
|
J. Steven Sensing
|
President - Global Supply Chain Solutions
|
John J. Diez
|
President - Dedicated Transportation Solutions
|
EXECUTIVE SUMMARY
|
Ryder System, Inc.
|
2019
Proxy Statement
|
33
|
|
|
Compensation Discussion and Analysis Summary
|
Metric
|
2018 Results
|
2018 O/(U) 2017
|
Metric
|
2018 Results
|
2018 O/(U) 2017
|
Total Revenue
|
$8.4B
|
15%
|
FMS Operating Revenue*
|
$4.4B
|
9%
|
Operating Revenue*
|
$6.7B
|
11%
|
DTS Operating Revenue*
|
$0.9B
|
10%
|
EPS
|
$5.21
|
(65)%
|
SCS Operating Revenue *
|
$1.8B
|
17%
|
Comparable EPS*
|
$5.79
|
28%
|
Adjusted Return on Capital*
|
4.9%
|
0.7 pps
|
Financial and Strategic Highlights
|
|||
4
|
Record total revenue increased 15% to $8.4 billion and record operating revenue* increased 11% to $6.7 billion compared to 2017. Total revenue and operating revenue grew across all three business segments reflecting new business and higher volumes.
|
4
|
EPS from continuing operations decreased 65% to $5.21 primarily due to the one-time benefit of the Tax Cuts and Jobs Act (Tax Reform) in the prior year. Comparable EPS* increased 28% to $5.79 primarily due to lower tax rate from tax reform and improved operating performance.
|
4
|
Ryder realized our second consecutive year of record sales. We achieved growth across all contractual product lines which drove operating revenue growth above our three-year financial targets in all business segments. In 2018, Ryder delivered our seventh consecutive year of organic lease fleet growth and the highest year of lease fleet growth as measured by vehicle count with over 9,600 vehicles added in 2018. Lease fleet growth is a key indicator of success at leveraging secular trends to drive higher levels of outsourcing.
|
4
|
We expanded strategic partnerships with electric vehicle companies and announced the largest commercial electric vehicle purchase in the United States, which enables the broader adoption of commercial electric vehicle technology.
|
4
|
Approximately 40% of new lease business came from customers who are new to outsourcing in 2018, an increase from approximately 33% in 2015. The increase of sales to customers who are new to outsourcing vehicle ownership and maintenance provides further evidence of success in executing our long-term strategy to grow by further penetrating the non-outsourced market.
|
4
|
During a challenging year for the used vehicle sales market, used vehicle inventory remained in our target range. Managing inventory levels allows us to maximize proceeds by increasing use of the retail sales channel and also positions us well for 2019.
|
4
|
We launched COOP by Ryder
TM
, a new asset sharing platform, which is the first of its kind for commercial vehicles and offers businesses the opportunity to list and rent underutilized vehicles and continued its investment in RyderShare
TM
a cloud-based platform that provides load location visibility, tracking, and customized communications through one source.
|
4
|
Forbes named Ryder among the World's Best Employers for 2018 and first in the companies listed in the Trucking, Rental and Leasing categories. Forbes also named Ryder among America's Best Employers. In addition, Forbes named Ryder Among America's Best Employers for Women in 2018 in their first-ever ranking.
|
4
|
We acquired MXD Group, an e-commerce fulfillment provider with a national network of facilities including last mile capabilities, positioning Ryder as the second largest last mile delivery provider of big and bulky goods across the U.S. and Canada.
|
4
|
We acquired Metro Truck and Tractor Leasing, expanding our Fleet Management Solutions footprint in the Baltimore-metro area with two Maryland facilities in Beltsville and Baltimore, which provide truck leasing, rental, and maintenance services to more than 150 customers with a fleet of approximately 900 units.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
34
|
|
|
Compensation Discussion and Analysis Summary
|
Ryder System, Inc.
|
2019
Proxy Statement
|
35
|
|
|
Compensation Discussion and Analysis Summary
|
Ryder System, Inc.
|
2019
Proxy Statement
|
36
|
|
|
Compensation Discussion and Analysis Summary
|
|
|
Commit to a three-year LTIP performance target and remove discretion to change the target within the three-year performance period.
|
Beginning with our 2018 LTIP awards, we set a fixed three-year target, with no discretion to change the target within the three-year performance period.
|
Continue the use of ROC metrics in the LTIP, which shareholders value especially for leasing companies. Investors acknowledged that ROC targets must change as interest rates and equity costs change during a three-year performance period. To reconcile any concerns that targets not change during the three-year performance period with the fact that the actual cost of capital will fluctuate during any given period, several investors suggested using a target spread.
|
Beginning with our 2018 LTIP awards, we replaced the annual ROC metric in the LTIP with a three-year ROC/COC (cost of capital) spread target, which will not change during the period, and will be measured at the end of such three-year period. It is designed to incentivize ROC/COC spread improvement over the full performance period.
|
Eliminate the standalone TSR metric and instead use TSR as a modifier, which enhances or penalizes payment based on relative stock performance.
|
Beginning with our 2018 LTIP awards, we shifted TSR from a standalone metric to a results modifier, where PBRSR awards will be reduced if TSR performance is below the median of Ryder’s TSR peer group and increased if above median. No TSR modifier will be applied to increase payments if Ryder’s absolute TSR is negative.
|
Focus on growing certain areas of the business to drive long-term shareholder value. Several investors suggested creating a specific metric in the LTIP that incentivizes management to deliver strategic revenue growth.
|
Beginning with our 2018 awards, we introduced a strategic revenue growth metric, which includes such items as long-term contractual lease growth, transactional maintenance, dedicated transportation contracts and supply chain revenue growth. The 2018 performance target is based on a three-year compound average growth rate established at the grant date and will be measured at the end of the three-year performance period.
|
Review the compensation peer group to confirm operational alignment and appropriate size.
|
In 2018, we reviewed our compensation peer group and decided to remove four companies from Ryder’s compensation peer group due to operational fit and size and added three peers based on similarity. The TSR peer group was modified as well.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
37
|
|
|
Compensation Discussion and Analysis
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Our compensation program has five key goals:
|
||||||
4
|
Attracting and Retaining Talent
Offer an executive compensation program that allows us to utilize and adjust compensation elements in order to deliver market competitive compensation and reward performance.
|
|||||
4
|
Encouraging Shareholder Alignment
Align the interests of our executives with our shareholders by tying a significant portion of executive compensation to Company performance through the use of complementary pay elements including significant equity-based compensation.
|
|||||
4
|
Encouraging Firmwide Orientation
Balance the short- and long-term interests of our shareholders so that our executives are appropriately encouraged and rewarded for actions that are in the best interests of our Company as a whole and drive collaboration.
|
|||||
4
|
Encouraging Appropriate Risk-Taking
Provide incentives to executives that will promote long-term, sustainable, profitable growth and encourage appropriate risk-taking.
|
|||||
4
|
Paying for Performance
Reward each named executive officer's individual performance, contribution and value to Ryder.
|
2018 EXECUTIVE COMPENSATION PROGRAM
|
Ryder System, Inc.
|
2019
Proxy Statement
|
38
|
|
|
Compensation Discussion and Analysis
|
|
|
Settled in
|
Target Established
|
Payout Linked to Strategy/Growth
|
Additional Information
|
|
Base Salary
|
Cash
|
Set based on experience, market, performance, tenure, responsibility and succession potential
|
Competitively set to recruit and retain top talent
|
Reviewed annually based on market positioning and individual qualifications
|
Annual Cash Incentive
|
Cash
|
Target value approved at the beginning of the fiscal year based on market data for each position
|
Comparable EPS is a key measure of profitability
Operating revenue reflects progress against strategic and operational goals
|
Payouts range from 0-200% of target
Earned based on Company performance on financial metrics and individual performance
|
|
|
PBRSRs
|
Stock
|
Target grant value established at start of a three-year cycle
Based on market data, level of responsibility, and desired pay mix
|
ROC/COC spread measures efficient capital management and returns on shareholders' investment
Strategic revenue growth measures progress against long-term strategic growth goals
TSR modifier measures stock performance against peer group
|
Performance threshold required for any payout
Cliff vests after three-year performance period
Payouts range from 0-200%
Denominated and settled in stock
No positive modification if actual TSR is negative
|
Stock Options
|
Stock
|
Granted at start of three- year cycle
Grant value based on market data, level of responsibility, and desired pay mix
|
Stock price appreciation aligned to stockholder interests
|
10-year term
Vests ratably over three years
|
|
TVRSRs
|
Stock
|
Granted at start of a three-year cycle
Target grant amount based on market data, level of responsibility, and desired pay mix
|
Provides link to market-based outcomes
|
Vests ratably over three years
Denominated and settled in stock
|
Ryder System, Inc.
|
2019
Proxy Statement
|
39
|
|
|
Compensation Discussion and Analysis
|
4
Comparable EPS
(a non-GAAP financial measure)
is defined as earnings per share from continuing operations excluding non-operating pension costs and other significant items not representative of our business operations. The comparable EPS used by the Committee is consistent with the comparable EPS in Ryder press releases and public presentations.
4
Operating Revenue
(a non-GAAP financial measure)
is defined as total revenue for Ryder excluding any (1) fuel and (2) subcontracted transportation. We exclude these two components because they may be volatile without having any impact on earnings. The operating revenue used by the Committee is consistent with the operating revenue in Ryder press releases and public presentations.
|
Name
|
Target 2018 Award
|
Actual 2018 Payout
|
% of Target
|
Robert E. Sanchez
|
$1,230,170
|
$1,461,590
|
118.8%
|
Art A. Garcia
|
$400,000
|
$475,248
|
118.8%
|
Dennis C. Cooke
|
$566,848
|
$673,484
|
118.8%
|
J. Steven Sensing
|
$461,319
|
$548,102
|
118.8%
|
John J. Diez
|
$461,319
|
$548,102
|
118.8%
|
Ryder System, Inc.
|
2019
Proxy Statement
|
40
|
|
|
Compensation Discussion and Analysis
|
NEO
|
2018 LTIP Target Value ($)
|
PBRSRs ($)
1
|
Stock Options ($)
2, 3
|
TVRSRs ($)
4
|
Robert E. Sanchez
|
$4,100,000
|
$2,460,007
|
$1,230,369
|
$409,989
|
Art A. Garcia
|
$1,200,000
|
$720,002
|
$360,113
|
$120,000
|
Dennis C. Cooke
|
$1,350,000
|
$809,965
|
$405,127
|
$135,019
|
J. Steven Sensing
|
$950,000
|
$569,964
|
$285,089
|
$94,969
|
John D. Diez
|
$950,000
|
$569,964
|
$285,089
|
$94,969
|
1
|
The number of PBRSRs granted in 2018 for each of the NEOs is as follows: Mr. Sanchez, 32,923 shares; Mr. Garcia, 9,636 shares; Mr. Cooke, 10,840 shares; Mr. Sensing, 7,628 shares and Mr. Diez, 7,628 shares.
|
2
|
The number of stock options granted in 2018 for each of the NEOs is as follows: Mr. Sanchez, 77,407 options; Mr. Garcia, 22,656 options; Mr. Cooke, 25,488 options; Mr. Sensing, 17,936 options and Mr. Diez, 17,936 options shares.
|
3
|
Stock options were issued at $74.72, the closing price of our common stock as reported by the NYSE on February 21, 2018. The grant date fair value of the option awards is determined pursuant to the accounting guidance for stock compensation and represents the total amount that we will expense in our financial statements over the relevant vesting period.
|
4
|
The number of TVRSRs granted in 2018 for each of the NEOs is as follows: Mr. Sanchez, 5,487 shares; Mr. Garcia, 1,606 shares; Mr. Cooke, 1,807 shares; Mr. Sensing, 1,271 shares and Mr. Diez, 1,271 shares.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
41
|
|
|
Compensation Discussion and Analysis
|
Name
|
2017 LTIP Target Awards
|
2018 LTIP Target Award
|
Robert E. Sanchez
|
$4,100,000
|
$4,100,000
|
Art A. Garcia
|
$1,200,000
|
$1,200,000
|
Dennis C. Cooke
|
$1,350,000
|
$1,350,000
|
J. Steven Sensing
|
$950,000
|
$950,000
|
John J. Diez
|
$950,000
|
$950,000
|
|
2018
|
|
Compensation Committee LTIP Award Grant Value
|
$4.1 million
|
2018 Summary Compensation Table
|
|||||||||
|
Related to Prior Years Awards
|
Related to 2018 Award
|
Total 2018 Summary Compensation Table
|
||||||
Stock Awards
|
|||||||||
1/3 of 2016 ROC Awards
|
$
|
346,701
|
|
|
$
|
346,701
|
|
||
1/3 of 2017 ROC Awards
|
400,499
|
|
|
400,499
|
|
||||
100% of 2018 ROC/COC
|
|
1,200,446
|
|
1,200,446
|
|
||||
100% of 2018 Strategic Revenue Growth
|
|
1,200,520
|
|
1,200,520
|
|
||||
100% of 2018 TVRSR
|
|
409,989
|
|
409,989
|
|
||||
Total Stock Award
|
|
|
3,558,155
|
|
|||||
Option Awards
|
|
1,230,369
|
|
1,230,369
|
|
||||
PBCA portion of Non-Equity Incentive Compensation
|
133,669
|
|
|
133,669
|
|
||||
Total Reported for LTIP Award in SEC Summary Compensation Table
|
$
|
880,869
|
|
$ 4,041,324
1
|
|
$
|
4,922,193
|
|
|
|
Ryder System, Inc.
|
2019
Proxy Statement
|
42
|
|
|
Compensation Discussion and Analysis
|
•
|
The Compensation Peer Group is a group of 13 companies who are in similar industries and in a size range approximating Ryder's size. The pay of the NEOs at these companies serves as one input for determining target pay levels for our NEOs.
|
•
|
The relative TSR group includes the compensation peer group plus a number of companies who are too large to serve as compensation peers for our NEOs, but whose stock price performance is very relevant as a benchmark for Ryder's stock price performance because these companies operate in the markets in which we compete and because the companies are viewed as comparable by investors.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
43
|
|
|
Compensation Discussion and Analysis
|
2018 Relative TSR Group
|
|
Compensation Peer Group
|
Additional Performance Peer Companies
|
1. Avis Budget Group, Inc.
2. C. H. Robinson Worldwide, Inc.
3. CSX Corporation
4. Expeditors International of Washington, Inc.
5. GATX Corporation
6. Hertz Global Holdings, Inc.
7. Hub Group, Inc.
8. J.B. Hunt Transport Services Inc.
9. Knight-Swift Transportation Holdings Inc.
10. Landstar System, Inc.
11. Old Dominion Freight Line, Inc.
12. United Rentals, Inc.
13. XPO Logistics, Inc.
|
1. Amerco (U-Haul)
2. Arc Best Corporation (Arkansas Best Corporation)
3. FEDEX Corporation
4. Forward Air Corporation
5. Navistar International Corp.
6. PACCAR International
7. Rush Enterprises, Inc.
8. Saia, Inc.
9. Trinity Industries, Inc.
10. Triton International
11. United Parcel Service Inc.
12. Universal Logistics Holdings, Inc.
13. Werner Enterprises, Inc.
|
For the 2016-2018 grant, the 50% of the PBRSRs are earned based on relative TSR performance as described below:
|
||
|
4
|
a
threshold
level, below which no award for the TSR performance metric will be earned, and at which 30% of the award for the TSR performance metric will be earned if Ryder's TSR ranks twentieth among the 26; companies in our custom peer group;
|
|
4
|
a
target
level, at which 100% of the award for the TSR performance metric will be earned if Ryder's TSR ranks thirteenth among the 26 companies in our custom peer group; and
|
|
4
|
a
maximum
level, at which 125% of the award for the TSR performance metric will be earned if Ryder's TSR ranks in the top eight among the 26 companies in our custom peer group.
|
2017 awards have a maximum level at which 150% of the award will be earned. Awards are earned proportionately between threshold and target performance levels and between target and maximum performance levels.
|
||
|
4
|
1/3 are earned based on performance results for Year 1 of the performance period (for 2016 LTIP awards, January 2016 through December 2016);
|
|
4
|
1/3 are earned based on performance results through Year 2 of the performance period (for 2016 LTIP awards, January 2016 through December 2017); and
|
|
4
|
1/3 are earned based on performance results through Year 3 of the performance period (for 2016 LTIP awards, January 2016 through December 2018).
|
The 50% of the PBRSRs which are earned based on ROC performance in each performance period as described below:
|
||
|
4
|
a
threshold
level, below which no award for the ROC performance metric will be earned and at which 25% of the award will be earned;
|
|
4
|
a
target
level, at which 100% of the award for the ROC performance metric will be earned; and
|
|
4
|
a
maximum
level, at which 125% of the award for the ROC performance metric will be earned.
|
2017 awards have a maximum level at which 150% of the award will be earned. Awards are earned proportionately between threshold and target performance levels and between target and maximum performance levels.
|
||
|
4
|
1/3 are earned based on ROC performance results for Year 1 of the performance period (for 2016 LTIP awards, January 2016 through December 2016);
|
|
4
|
1/3 are earned based on ROC performance results for Year 2 of the performance period (for 2016 LTIP awards, January 2017 through December 2017); and
|
|
4
|
1/3 are earned based on ROC performance results for Year 3 of the performance period (for 2016 LTIP awards, January 2018 through December 2018).
|
Ryder System, Inc.
|
2019
Proxy Statement
|
44
|
|
|
Compensation Discussion and Analysis
|
Performance Measure
|
|||
TSR Performance (50% Weight)
|
Performance Measure
|
Ryder's Ranking
|
Percentage Earned
|
January 2016 - December 2016
|
TSR vs. Custom Peer Group
|
11
th
/ 27
|
115.00%
|
January 2016 - December 2017
|
TSR vs. Custom Peer Group
|
16
st
/ 26
|
70.00%
|
January 2016 - December 2018
|
TSR vs. Custom Peer Group
|
22
nd
/ 26
|
0.00%
|
|
61.67%
|
||
(Overall Payout)
|
Aggregate 2016 - 2018 LTIP Payout of PBRSRs and PBCAs
|
65.79%
|
What We Do
|
|
ü
|
Directly link pay with company performance
|
ü
|
Use double-trigger change of control provisions
|
ü
|
Use three-year performance periods and targets for long-term performance metrics
|
ü
|
Engage an independent compensation consultant
|
ü
|
Regularly benchmark executive compensation against an appropriate peer group
|
ü
|
Maintain robust stock ownership requirements
|
ü
|
Subject performance-based incentive awards to clawback policy
|
ü
|
Grant majority of pay in performance-based compensation which is not guaranteed
|
ü
|
Engage in a robust target-setting process for incentive metrics
|
ü
|
Provide for caps for incentive compensation
|
Ryder System, Inc.
|
2019
Proxy Statement
|
45
|
|
|
Compensation Discussion and Analysis
|
What We Don't Do
|
|
û
|
Provide employment agreements
|
û
|
Provide tax gross ups related to a change of control, perquisites or benefits
|
û
|
Provide excessive perquisites
|
û
|
Reprice underwater stock options without shareholder approval
|
û
|
Grant equity awards below 100% of fair market value or grant options at a discount
|
û
|
Pay dividends or dividend equivalents on unvested PBRSRs or restricted stock rights
|
û
|
Permit hedging transactions
|
û
|
Permit pledging activity or use of margin accounts by executives or directors
|
Ryder System, Inc.
|
2019
Proxy Statement
|
46
|
|
|
Compensation Discussion and Analysis
|
1.
|
Avis Budget Group, Inc.
|
8.
|
J.B. Hunt Transport Services Inc.
|
2.
|
C. H. Robinson Worldwide, Inc.
|
9.
|
Knight-Swift Transportation Holdings Inc.
|
3.
|
CSX Corporation
|
10.
|
Landstar System, Inc.
|
4.
|
Expeditors International of Washington, Inc.
|
11.
|
Old Dominion Freight Line, Inc.
|
5.
|
GATX Corporation
|
12.
|
United Rentals, Inc.
|
6.
|
Hertz Global Holdings, Inc.
|
13.
|
XPO Logistics, Inc.
|
7.
|
Hub Group, Inc.
|
|
|
Ryder System, Inc.
|
2019
Proxy Statement
|
47
|
|
|
Compensation Discussion and Analysis
|
RETIREMENT AND WELFARE BENEFITS AND PERQUISITES
|
•
|
$9,600 per year as an annual car allowance; and
|
•
|
$6,800 per year ($11,800 for our CEO) intended (but not required) to be used to pay for community, business or social activities that may be related to the performance of the executive’s duties, but which are not otherwise eligible for reimbursement as direct business expenses.
|
SEVERANCE AND CHANGE OF CONTROL
|
NEO STOCK OWNERSHIP REQUIREMENTS
|
PROHIBITIONS ON HEDGING AND PLEDGING
|
Ryder System, Inc.
|
2019
Proxy Statement
|
48
|
|
|
Compensation Discussion and Analysis
|
TAX IMPLICATIONS
|
COMPENSATION RISKS
|
Ryder System, Inc.
|
2019
Proxy Statement
|
49
|
|
|
Compensation Committee Report on Executive Compensation
|
|
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
|
E. Follin Smith (Chair)
|
John M. Berra
|
Robert J. Eck
|
Michael F. Hilton
|
David G. Nord
|
Dmitri L. Stockton
|
EXECUTIVE COMPENSATION
|
SUMMARY COMPENSATION TABLE
|
Name and Principal Position
|
Year
|
|
Salary
($)
|
|
Stock
Awards
($)
1
|
|
Option
Awards
($)
2
|
|
Non-Equity
Incentive Plan
Compensation
($)
3
|
|
Change in Pension
Value and Nonqualified Deferred Compensation
Earnings
($)
4
|
|
All Other
Compensation
($)
5
|
|
Total
($)
|
|
Robert E. Sanchez
|
Chair and Chief Executive Officer
|
2018
|
|
820,080
|
|
3,558,155
|
|
1,230,369
|
|
1,595,259
|
|
—
|
|
147,762
|
|
7,351,625
1
|
2017
|
|
804,000
|
|
2,140,487
|
|
1,640,009
|
|
1,309,625
|
|
101,879
|
|
141,757
|
|
6,137,757
|
||
2016
|
|
785,225
|
|
1,351,441
|
|
1,539,987
|
|
1,207,635
|
|
65,069
|
|
156,329
|
|
5,105,686
|
||
Art A. Garcia
|
Executive Vice President and Chief Financial Officer
|
2018
|
|
500,000
|
|
1,028,202
|
|
360,113
|
|
509,282
|
|
—
|
|
75,831
|
|
2,473,428
1
|
2017
|
|
492,500
|
|
601,366
|
|
480,031
|
|
410,686
|
|
62,842
|
|
69,795
|
|
2,117,220
|
||
2016
|
|
479,783
|
|
337,208
|
|
392,027
|
|
351,234
|
|
42,095
|
|
78,347
|
|
1,680,694
|
||
Dennis C. Cooke
|
President, Global Fleet Management Solutions
|
2018
|
|
566,825
|
|
1,147,463
|
|
405,127
|
|
708,217
|
|
—
|
|
86,462
|
|
2,914,094
1
|
2017
|
|
555,000
|
|
666,620
|
|
539,966
|
|
558,692
|
|
—
|
|
79,199
|
|
2,399,477
|
||
2016
|
|
543,750
|
|
353,692
|
|
399,982
|
|
456,462
|
|
—
|
|
89,800
|
|
1,843,686
|
||
J. Steven Sensing
|
President, Global Supply Chain Solutions
|
2018
|
|
461,300
|
|
807,045
|
|
285,089
|
|
572,427
|
|
—
|
|
75,730
|
|
2,201,591
1
|
2017
|
|
449,750
|
|
460,499
|
|
380,035
|
|
443,887
|
|
38,809
|
|
67,452
|
|
1,840,432
|
||
John J. Diez
|
President, Dedicated Transportation Solutions
|
2018
|
|
461,300
|
|
807,045
|
|
285,089
|
|
572,427
|
|
—
|
|
73,618
|
|
2,199,479
1
|
2017
|
|
449,750
|
|
463,104
|
|
380,035
|
|
444,765
|
|
21,123
|
|
64,238
|
|
1,823,015
|
||
2016
|
|
411,000
|
|
221,184
|
|
279,975
|
|
312,667
|
|
12,855
|
|
59,347
|
|
1,297,028
|
1
|
2018 “Stock Awards” Amounts
For 2018, the amounts reported in the “Stock Awards” column represent the grant date fair value, determined pursuant to the accounting guidance for stock compensation (FASB ASC Topic 718), of (1) all PBRSRs and TVRSRs granted in 2018, and (2) certain portions of PBRSRs granted in 2016 and 2017, respectively, each as further described below and on page 40 of this proxy statement in the “Compensation Discussion and Analysis” section.
Because the 2018 PBRSRs have a fixed performance target for the full three-year performance period, SEC rules require us to report all such awards in the year of grant. Alternatively, a portion of PBRSRs granted in each of 2016 and 2017 include one-year targets that are set each year of the three-year performance period, and therefore we have continued to report such portions of awards in the year such annual target is set, not the year of grant (e.g., the portion of PBRSRs granted in 2016 and 2017 that will be earned based on annual targets set in 2018 are reported in 2018, as required by FASB ASC Topic 718). Consequently, the amounts shown for 2018 are higher than in previous years due to our shift to a fixed three-year performance target for our 2018 awards. Please see "Understanding the Impact of LTIP Plan Design Changes in the Summary Compensation Table" on page 41 of this proxy statement in the “Compensation Discussion and Analysis” section.
If prior year grants were not included, the amounts reported in the “Stock Awards” column for 2018 for each NEO would be: Mr. Sanchez: $2,810,955; Mr. Garcia: $822,722; Mr. Cooke: $925,545; Mr. Sensing: $651,255; and Mr. Diez: $651,255.
Awards granted in 2018
All 2018 TVRSRs and PBRSRs awards are represented in the Stock Awards column at grant date fair value. 2018 TVRSRs vest based on continued service through the three-year performance period. 2018 PBRSRs are earned based 50% on Ryder’s ROC/COC spread measured using the final year’s (2020) spread and 50% based on Ryder’s strategic revenue growth target based on Ryder’s three-year compound average growth rate over the three-year performance period. In addition, a TSR modifier is applied at the end of the performance period to adjust earned PBRSRs positively or negatively up to 15%. The 2018 PBRSRs can be earned from 0-200%, and are represented in the column based on target performance. The following table presents the grant date fair value of the 2018 PBRSRs at the target and maximum levels of performance:
|
Ryder System, Inc.
|
2019
Proxy Statement
|
50
|
|
|
Executive Compensation
|
Name
|
2018 PBRSRs Target
|
2018 PBRSRs Maximum
|
Robert E. Sanchez
|
$2,400,966
|
$4,801,933
|
Art A. Garcia
|
$702,722
|
$1,405,444
|
Dennis C. Cooke
|
$790,526
|
$1,581,051
|
J. Steven Sensing
|
$556,285
|
$1,112,570
|
John J. Diez
|
$556,285
|
$1,112,570
|
|
Awards granted in 2017 and 2016
The 2018 “Stock Awards” column also includes portions of PBRSRs granted in 2017 and 2016. Our 2017 and 2016 PBRSRs are earned based 50% on TSR and 50% on adjusted return on capital (ROC). The targets for ROC are set annually; therefore, the portion of the PBRSRs based on ROC for the one-year 2018 performance cycle (for each of our 2017 and 2016 awards) are probable (based on applicable accounting guidance) and included in the table for 2018. The value of the 2017 PBRSRs based on ROC for the one-year 2019 performance cycle will be included in the 2019 table when the relevant target has been set.
2017 and 2016 “Stock Awards” Amounts
For 2017 and 2016, the amounts reported in the “Stock Awards” column represent the grant date fair value, determined pursuant to the accounting guidance for stock compensation (FASB ASC Topic 718), of certain portions of PBRSRs granted in 2017, 2016, 2015 and 2014 respectively, each as described below and beginning on page 40 of this proxy statement in the “Compensation Discussion and Analysis” section. The 2017 and 2016 awards are based 50% on TSR and 50% on ROC. The targets for ROC are set annually; therefore, only the PBRSRs based on ROC for the one-year 2017 performance cycle (for awards granted in 2017and 2016) are probable and included in the table for 2017, and the PBRSRs based on ROC for the one-year 2016 performance cycle (for awards granted in 2016) are probable and included in the table for 2016.
Calculation
As discussed above, the amounts in this column are based on grant date fair value in accordance with applicable accounting guidance and consequently may not reflect the actual value that the NEO will recognize. For information regarding the assumptions made in calculating the amounts reflected in this column and the maximum payout for the award, see note 22 to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2018. Dividend equivalents accrue on all grants of PBRSRs and TVRSRs and will be paid only on those that vest.
|
|
The following chart shows the Summary Compensation Table valuation of stock awards over the last three years based on grant date fair value:
|
Summary Compensation Table Stock Award Valuation
|
|||||
|
Robert E. Sanchez
|
Art A. Garcia
|
Dennis C. Cooke
|
J. Steven Sensing
|
John J. Diez
|
2016
|
|||||
1/3 of 2014 ROC grant
|
$185,645
|
$43,759
|
$50,910
|
$7,388
|
$13,355
|
1/3 of 2015 ROC grant
|
155,998
|
36,465
|
40,539
|
22,306
|
24,295
|
1/3 of 2016 ROC grant
|
256,685
|
65,324
|
66,661
|
46,653
|
46,654
|
100% of 2016 TSR grant
|
753,113
|
191,660
|
195,582
|
136,880
|
136,880
|
100% of 2016 TVRSR
|
—
|
—
|
—
|
—
|
—
|
TOTAL
|
$1,351,441
|
$337,208
|
$353,692
|
$213,227
|
$221,184
|
2017
|
|
|
|
|
|
1/3 of 2015 ROC grant
|
$204,338
|
$47,766
|
$53,101
|
$29,218
|
$31,823
|
1/3 of 2016 ROC grant
|
345,402
|
87,901
|
89,700
|
62,778
|
62,778
|
1/3 of 2017 ROC grant
|
409,986
|
120,026
|
135,005
|
94,975
|
94,975
|
100% of 2017 TSR grant
|
1,180,761
|
345,673
|
388,814
|
273,528
|
273,528
|
100% of 2017 TVRSR
|
—
|
—
|
—
|
—
|
—
|
TOTAL
|
$2,140,487
|
$601,366
|
$666,620
|
$460,499
|
$463,104
|
2018
|
|
|
|
|
|
1/3 of 2016 ROC grant
|
$346,701
|
$88,232
|
$90,037
|
$63,013
|
$63,013
|
1/3 of 2017 ROC grant
|
400,499
|
117,248
|
131,881
|
92,777
|
92,777
|
100% of 2018 ROC/COC
|
1,200,446
|
351,361
|
395,263
|
278,143
|
278,143
|
100% of 2018 SRG
|
1,200,520
|
351,361
|
395,263
|
278,143
|
278,143
|
100% of 2018 TVRSR
|
409,989
|
120,000
|
135,019
|
94,969
|
94,969
|
TOTAL
|
$3,558,155
|
$1,028,202
|
$1,147,463
|
$807,045
|
$807,045
|
2
|
Option awards consist of stock options granted pursuant to our LTIP as described beginning on page 40 of this proxy statement under the "Compensation Discussion and Analysis" section. The grant date fair value of option awards is determined pursuant to the accounting guidance for stock compensation and represents the total amount that we will expense in our financial statements over the relevant vesting period. Consequently, the amounts in this column may not reflect the actual value that the NEO will recognize. For information regarding the assumptions made in calculating the amounts reflected in this column, see note 22 to our audited consolidated financial statements, included in our Annual Report report on Form 10-K for the year ended December 31, 2018.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
51
|
|
|
Executive Compensation
|
3
|
For 2018, the amounts in this column represent (1) amounts earned under the 2018 annual cash incentive awards (ACIAs) and (2) the amount of the performance-based cash awards (PBCAs) earned in the 2016-2018 performance cycle. The ACIAs earned were paid in February 2019 and the 2016 PBCAs earned will vest and be paid after the end of the three-year performance period (2018), if the executive continues to be employed by the Company. The PBCAs granted in 2016 comprised 20% of the total LTIP grant and, similar to the 2016 PBRSRs, were based 50% on TSR segmented into three performance cycles of one, two and three years and 50% on ROC segmented into three on-year cycles. In 2017, the Committee decided to to discontinue the use of PBCAs. Following is a breakdown of the amounts earned for 2018:
|
Name
|
Year
|
Annual Cash Incentive Awards ($)
|
Performance-Based Cash Awards ($)
|
Robert E. Sanchez
|
2018
|
1,461,590
|
133,669
|
Art A. Garcia
|
2018
|
475,248
|
34,034
|
Dennis C. Cooke
|
2018
|
673,484
|
34,733
|
J. Steven Sensing
|
2018
|
548,102
|
24,325
|
John J. Diez
|
2018
|
548,102
|
24,325
|
4
|
The amounts in this column include an estimate of the change in the actuarial present value of the accrued pension benefits (under both our pension and pension restoration plans) for the NEO for the respective year. The aggregate amount attributable to all defined benefit and actuarial plans for each NEO in 2018 were: Mr. Sanchez: ($51,635); Mr. Garcia: ($22,192); Mr. Sensing: ($21,698) and Mr. Diez: ($13,493). Assumptions used to calculate these amounts are described under “Pension Benefits” beginning on page 54. No NEO realized above-market or preferential earnings on deferred compensation.
|
5
|
All Other Compensation for 2018 includes the following payments or accruals for each NEO:
|
|
Year
|
|
Employer Contributions to the 401(k) Plan ($)
(a)
|
|
Employer Contributions to the Deferred Compensation Plan ($)
(a)
|
|
Premiums Paid Under the Supplemental Long-Term Disability Insurance Plan ($)
|
|
Premiums Paid for Executive Life Insurance ($)
|
|
Charitable Awards Programs ($)
(b)
|
|
Perquisites ($)
(c)
|
Robert E. Sanchez
|
2018
|
|
15,125
|
|
89,937
|
|
9,883
|
|
1,417
|
|
10,000
|
|
21,400
|
Art A. Garcia
|
2018
|
|
15,125
|
|
31,963
|
|
11,479
|
|
864
|
|
—
|
|
16,400
|
Dennis C. Cooke
|
2018
|
|
15,125
|
|
43,643
|
|
10,314
|
|
980
|
|
—
|
|
16,400
|
J. Steven Sensing
|
2018
|
|
15,125
|
|
32,604
|
|
10,804
|
|
797
|
|
—
|
|
16,400
|
John J. Diez
|
2018
|
|
15,125
|
|
32,012
|
|
9,284
|
|
797
|
|
—
|
|
16,400
|
(a)
|
As described under “Pension Benefits”, our NEOs are not accruing benefits under our pension plan and instead receive employer contributions into their 401(k) and deferred compensation accounts. Starting in 2016, a portion of the employer contribution to the 401(k) and deferred compensation plans will be made in a lump sum after the end of the calendar year to which the contribution relates. The amounts presented above paid into the 401(k) Savings Plan and the Deferred Compensation Plan reflect amounts contributed during the calendar year reported.
|
(b)
|
Mr. Sanchez is eligible to participate, as a member of our Board, in our Matching Gifts to Education Program which, for members of our Board, is limited to a maximum benefit of $10,000 per year. See "Director Compensation" on page 60. All other NEOs are eligible to participate in our Matching Gifts to Education Program which is available to all employees and limited to a maximum benefit of $1,000 per year.
|
(c)
|
Includes a car allowance and annual perquisite allowance. The value in this column reflects the aggregate incremental cost to us of providing each perquisite to the executive.
|
2018 GRANTS OF PLAN-BASED AWARDS
|
Ryder System, Inc.
|
2019
Proxy Statement
|
52
|
|
|
Executive Compensation
|
Name
|
Grant
Type
|
Grant
Date
|
Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
1
|
Estimated Future Payouts
Under Equity
Incentive Plan Awards
2
|
All Other Stock Awards: Number of Shares of Stock or Units (#)
3
|
All Other Option Awards: Number of Securities Underlying Options (#)
4
|
Exercise or Base Price of Option Awards
($/Sh)
5
|
Grant Date Fair Value of Stock and Option Awards ($)
6
|
||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
#
|
Target
#
|
Maximum
#
|
|||||||
Robert E. Sanchez
|
ACIA
|
2/21/18
|
307,543
|
1,230,170
|
2,460,341
|
|
|
|
|
|
|
|
PBRSR
|
2/21/18
|
|
|
|
5,998
|
42,923
|
79,686
|
|
|
|
3,148,166
|
|
Options
|
2/21/18
|
|
|
|
|
|
|
|
77,407
|
74.72
|
1,230,369
|
|
TVRSR
|
2/21/18
|
|
|
|
|
|
|
5,487
|
|
|
409,989
|
|
Art A. Garcia
|
ACIA
|
2/21/18
|
100,000
|
400,000
|
800,000
|
|
|
|
|
|
|
|
PBRSR
|
2/21/18
|
|
|
|
1,711
|
12,386
|
23,102
|
|
|
|
908,202
|
|
Options
|
2/21/18
|
|
|
|
|
|
|
|
22,656
|
74.72
|
360,113
|
|
TVRSR
|
2/21/18
|
|
|
|
|
|
|
1,606
|
|
|
120,000
|
|
Dennis C. Cooke
|
ACIA
|
2/21/18
|
141,712
|
566,848
|
1,133,696
|
|
|
|
|
|
|
|
PBRSR
|
2/21/18
|
|
|
|
1,894
|
13,810
|
25,834
|
|
|
|
1,012,444
|
|
Options
|
2/21/18
|
|
|
|
|
|
|
|
25,488
|
74.72
|
405,127
|
|
TVRSR
|
2/21/18
|
|
|
|
|
|
|
1,807
|
|
|
135,019
|
|
J. Steven Sensing
|
ACIA
|
2/21/18
|
115,330
|
461,319
|
922,638
|
|
|
|
|
|
|
|
PBRSR
|
2/21/18
|
|
|
|
1,332
|
9,713
|
18,173
|
|
|
|
712,076
|
|
Options
|
2/21/18
|
|
|
|
|
|
|
|
17,936
|
74.72
|
285,089
|
|
TVRSR
|
2/21/18
|
|
|
|
|
|
|
1,271
|
|
|
94,969
|
|
John J. Diez
|
ACIA
|
2/21/18
|
115,330
|
461,319
|
922,638
|
|
|
|
|
|
|
|
PBRSR
|
2/21/18
|
|
|
|
1,332
|
9,713
|
18,173
|
|
|
|
712,076
|
|
Options
|
2/21/18
|
|
|
|
|
|
|
|
17,936
|
74.72
|
285,089
|
|
TVRSR
|
2/21/18
|
|
|
|
|
|
|
1,271
|
|
|
94,969
|
1
|
For the ACIAs, the amounts reflect the range of potential payouts at threshold, target or maximum payout levels based on Company performance. The Committee has discretion to adjust amounts based on individual performance but in no event to exceed the maximum payout amount. The Committee did not exercise such discretion in determining the earned 2018 ACIAs for our NEOs. The 2018 ACIAs as earned by our NEOs are discussed in further detail under the heading “Earned 2018 Annual Cash Incentive Awards” on page 39 of the Compensation Discussion and Analysis.
|
2
|
These columns reflect the number of potential PBRSRs that can be earned under our 2018 LTIP at threshold, target and maximum performance. 2018 PBRSRs are earned based 50% on Ryder’s ROC/COC spread measured using the final year’s (2020) spread and 50% based on Ryder’s strategic revenue growth target based on Ryder’s three-year compound average growth rate over the three-year performance period. In addition, a TSR modifier is applied at the end of the performance period to adjust earned PBRSRs positively or negatively up to 15%. The 2018 PBRSRs can be earned from 0-200%.
The total PBRSR value also includes portions of PBRSRs granted in 2017 and 2016. Our 2017 and 2016 PBRSRs are earned based 50% on TSR and 50% on adjusted return on capital (ROC). The targets for ROC are set annually; therefore, the portion of the PBRSRs based on ROC for the one-year 2018 performance cycle (for each of our 2017 and 2016 awards) are probable (based on applicable accounting guidance) and included in the table for 2018.
All awards that have been earned at the end of each performance cycle will vest at the end of the three-year performance period, subject to Committee approval. See further discussion under the heading “2018 Long-Term Incentive Program (LTIP) Grants” on page 40 of the Compensation Discussion and Analysis.
|
3
|
Represents TVRSRs granted under our 2018 LTIP. The TVRSRs for all of the NEOs vest in three equal annual installments beginning on February 21, 2019. For a more detailed description of our TVRSR granting policies, see the sections entitled “2018 Long-Term Incentive Program (LTIP) Grants” on page 40 of the Compensation Discussion and Analysis.
|
4
|
Represents stock options granted under our 2018 LTIP. The stock options for all of the NEOs vest in three equal annual installments beginning on February 21, 2019. For a more detailed description of our stock options and stock option granting policies, see the sections entitled “2018 Long-Term Incentive Program (LTIP) Grants” on page 40 of the Compensation Discussion and Analysis.
|
5
|
The exercise price of the stock options granted in 2018 was set as the closing price of our common stock on the grant date, as reported by the NYSE, as required under the Equity Plan.
|
6
|
The grant date fair value of the stock and option awards is determined pursuant to the accounting guidance for stock compensation and represents the total amount that we will expense in our financial statements over the relevant vesting period. For information regarding the assumptions made in calculating the amounts reflected in this column, see note 22 to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2018.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
53
|
|
|
Executive Compensation
|
OUTSTANDING EQUITY AWARDS AS OF DECEMBER 31, 2018
|
Options Awards
|
|
Stock Awards
|
|||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market Value of
Shares or
Units of
Stock That
Have Not
Vested
(1)
($)
|
|
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
|
|
Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(1)
($)
|
|
Exercisable
|
|
Unexercisable
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert E. Sanchez
|
89,325
|
|
—
|
|
58.21
|
|
02/07/2023
|
|
|
|
|
|
|
|
|
93,415
|
|
—
|
|
71.43
|
|
02/06/2024
|
|
|
|
|
|
|
|
|
|
83,425
|
|
—
|
|
93.51
|
|
02/11/2025
|
|
|
|
|
|
|
|
|
|
81,957
|
|
40,978
(2)
|
|
55.32
|
|
02/09/2026
|
|
18,313
(5)
|
|
881,771
|
|
|
|
|
|
34,797
|
|
69,593
(3)
|
|
76.49
|
|
02/09/2027
|
|
10,429
(6)
|
|
502,156
|
|
10,720
(8)
|
|
516,168
|
|
—
|
|
77,407
(4)
|
|
74.72
|
|
02/21/2028
|
|
0
(7)
|
|
—
|
|
54,870
(9)
|
|
2,641,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Art A. Garcia
|
18,580
|
|
—
|
|
58.21
|
|
02/08/2023
|
|
|
|
|
|
|
|
|
22,020
|
|
—
|
|
71.43
|
|
02/07/2024
|
|
|
|
|
|
|
|
|
|
19,500
|
|
—
|
|
93.51
|
|
02/11/2025
|
|
|
|
|
|
|
|
|
|
20,863
|
|
10,432
(2)
|
|
55.32
|
|
02/09/2026
|
|
4,658
(5)
|
|
224,283
|
|
|
|
|
|
10,185
|
|
20,370
(3)
|
|
76.49
|
|
02/09/2027
|
|
3,052
(6)
|
|
146,954
|
|
3,138
(8)
|
|
151,095
|
|
0
|
|
22,656
(4)
|
|
74.72
|
|
02/21/2028
|
|
0
(7)
|
|
—
|
|
16,060
(9)
|
|
773,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis C. Cooke
|
15,625
|
|
—
|
|
71.43
|
|
02/06/2024
|
|
|
|
|
|
|
|
|
21,670
|
|
—
|
|
93.51
|
|
02/11/2025
|
|
|
|
|
|
|
|
|
|
21,287
|
|
10,643
(2)
|
|
55.32
|
|
02/09/2026
|
|
4,753
(5)
|
|
228,857
|
|
|
|
|
|
11,457
|
|
22,913
(3)
|
|
76.49
|
|
02/09/2027
|
|
3,434
(6)
|
|
165,347
|
|
3,530
(8)
|
|
169,970
|
|
—
|
|
25,488
(4)
|
|
74.72
|
|
02/21/2028
|
|
0
(7)
|
|
—
|
|
18,067
(9)
|
|
869,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J. Steven Sensing
|
2,490
|
|
—
|
|
71.43
|
|
02/06/2024
|
|
|
|
|
|
|
|
|
11,920
|
|
—
|
|
93.51
|
|
02/11/2025
|
|
|
|
|
|
|
|
|
|
7,450
|
|
7,450
(2)
|
|
55.32
|
|
02/09/2026
|
|
3,326
(5)
|
|
160,147
|
|
|
|
|
|
8,064
|
|
16,126
(3)
|
|
76.49
|
|
02/09/2027
|
|
2,415
(6)
|
|
116,282
|
|
2,482
(8)
|
|
119,508
|
|
—
|
|
17,936
(4)
|
|
74.72
|
|
02/21/2028
|
|
0
(7)
|
|
—
|
|
12,713
(9)
|
|
612,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Diez
|
2,573
|
|
—
|
|
58.21
|
|
02/07/2023
|
|
|
|
|
|
|
|
|
6,695
|
|
—
|
|
71.43
|
|
02/06/2024
|
|
|
|
|
|
|
|
|
|
13,000
|
|
—
|
|
93.51
|
|
02/11/2025
|
|
|
|
|
|
|
|
|
|
9,980
|
|
7,450
(2)
|
|
55.32
|
|
02/09/2026
|
|
3,326
(5)
|
|
160,147
|
|
|
|
|
|
8,064
|
|
16,126
(3)
|
|
76.49
|
|
02/09/2027
|
|
2,415
(6)
|
|
116,282
|
|
2,482
(8)
|
|
119,508
|
|
—
|
|
17,936
(4)
|
|
74.72
|
|
02/21/2028
|
|
0
(7)
|
|
—
|
|
12,713
(9)
|
|
612,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on a stock price of $48.15, which was the closing price of our common stock on December 31, 2018.
|
(2)
|
These stock options vest on February 10, 2019.
|
(3)
|
These stock options vest in two equal annual installments on February 10, 2019 and February 10, 2020.
|
(4)
|
These stock options vest in three equal annual installments on February 21, 2019, February 21, 2020 and February 21, 2021.
|
(5)
|
Represents PBRSRs that were granted in February 2016. These PBRSRs have been earned for the one-year period ending December 31, 2016 and the two-year period ending December 31, 2017, and will vest and be paid if the executive remains employed at the conclusion of the three-year performance cycle (January 1, 2016 through December 31, 2018), subject to Committee approval.
|
(6)
|
Represents PBRSRs that were granted in February 2017. These PBRSRs have been earned for the one-year period ending December 31, 2017, and will vest and be paid if the executive remains employed at the conclusion of the three-year performance cycle (January 1, 2017 through December 31, 2019), subject to Committee approval.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
54
|
|
|
Executive Compensation
|
(7)
|
There were no earned and unvested PBRSRs in 2018.
|
(8)
|
Represents PBRSRs that were granted in February 2017 and will vest if the applicable TSR or ROC threshold is met for the three-year period ending December 31, 2019, in accordance with the terms of the Long-Term Incentive Program. As metrics are currently tracking above target, amounts are calculated at maximum performance.
|
(9)
|
Represents PBRSRs that were granted in February 2018 and will vest based on performance and contingent upon continued service through the three-year performance period. 2018 PBRSRs are earned based 50% on Ryder’s ROC/COC spread measured using the final year’s (2020) spread and 50% based on Ryder’s strategic revenue growth target based on Ryder’s three-year compound average growth rate over the three-year performance period. In addition, a TSR modifier is applied at the end of the performance period to adjust earned PBRSRs positively or negatively up to 15%. The 2018 PBRSRs can be earned from 0-200%, and are represented in the column based on payout performance. As metrics are currently tracking above target, amounts are calculated at maximum performance.
|
2018 OPTION EXERCISES AND STOCK VESTED
|
|
|
|
Option Awards
|
|
Stock Awards
1
|
||||
|
|
|
Number of Shares Acquired on Exercise
|
|
Value Realized
on Exercise
|
|
Number of Shares Acquired on Vesting
|
|
Value Realized
on Vesting
|
Name
|
|
|
(#)
|
|
($)
2
|
|
(#)
3
|
|
($)
4
|
Robert E. Sanchez
|
|
|
27,830
|
|
679,405
|
|
8,350
|
|
673,595
|
Art A. Garcia
|
|
|
6,825
|
|
158,272
|
|
1,950
|
|
157,307
|
Dennis C. Cooke
|
|
|
—
|
|
—
|
|
2,167
|
|
174,812
|
J. Steven Sensing
|
|
|
—
|
|
—
|
|
1,191
|
|
96,078
|
John J. Diez
|
|
|
6,520
|
|
159,992
|
|
1,297
|
|
104,629
|
1
|
These columns reflect restricted stock and PBRSRs previously awarded to the NEOs that vested during 2018.
|
2
|
Calculated based on the difference between the closing market price of Ryder common stock on the date of exercise and the exercise price of the option.
|
3
|
These amounts are net of shares withheld by Ryder to cover tax withholding obligations as follows: Mr. Sanchez, 3,283 shares; Mr. Garcia, 757 shares; Mr. Cooke, 519 shares; Mr. Sensing, 482 shares and Mr. Diez, 428 shares.
|
4
|
Calculated based on the closing market price of Ryder common stock on the vesting date.
|
PENSION BENEFITS
|
Ryder System, Inc.
|
2019
Proxy Statement
|
55
|
|
|
Executive Compensation
|
Name
|
Plan Name
|
Number of Years
Credited Service (#)
|
Present Value of
Accumulated Benefit ($)
|
Robert E. Sanchez
|
Retirement Plan (Frozen)
|
26
|
387,778
|
|
Benefit Restoration Plan (Frozen)
|
26
|
361,074
|
Art A. Garcia
|
Retirement Plan (Frozen)
|
21
|
353,329
|
|
Benefit Restoration Plan (Frozen)
|
21
|
203,498
|
Dennis C. Cooke
|
Retirement Plan (Not eligible)
|
0
|
—
|
|
Benefit Restoration Plan (Not eligible)
|
0
|
—
|
J. Steven Sensing
|
Retirement Plan (Frozen)
|
26
|
257,211
|
|
Benefit Restoration Plan (Frozen)
|
26
|
7,970
|
John J. Diez
|
Retirement Plan (Frozen)
|
17
|
121,134
|
|
Benefit Restoration Plan (Frozen)
|
17
|
6,463
|
2018 NONQUALIFIED DEFERRED COMPENSATION
|
Ryder System, Inc.
|
2019
Proxy Statement
|
56
|
|
|
Executive Compensation
|
|
Executive Contributions in Last Fiscal Year
|
|
Employer Contributions in Last Fiscal Year
|
|
Aggregate Earnings
in Last Fiscal Year |
|
Aggregate Balance at
Last Fiscal Year End |
Name
|
($)
|
|
($)
1
|
|
($)
2
|
|
($)
|
Robert E. Sanchez
|
300,038
|
|
89,937
|
|
(223,691)
|
|
3,274,847
|
Art A. Garcia
|
51,369
|
|
31,963
|
|
(52,814)
|
|
857,796
|
Dennis C. Cooke
|
283,413
|
|
43,643
|
|
(88,329)
|
|
1,344,985
|
J. Steven Sensing
|
129,304
|
|
32,604
|
|
(36,465)
|
|
682,829
|
John J. Diez
|
28,455
|
|
32,012
|
|
(22,898)
|
|
252,089
|
1
|
The amounts reflected in this column were reported as compensation to the NEOs in our Summary Compensation Table for 2018.
|
2
|
Aggregate earnings on deferred compensation included in this column were not reported as compensation to the NEOs in our Summary Compensation Table for 2018. The negative aggregate earnings for each NEO are attributable to negative rate of return due to market performance.
|
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
|
Ryder System, Inc.
|
2019
Proxy Statement
|
57
|
|
|
Executive Compensation
|
Ryder System, Inc.
|
2019
Proxy Statement
|
58
|
|
|
Executive Compensation
|
•
|
continuation of all medical, dental, prescription and vision insurance plans and programs until the earlier of the end of the applicable severance period (which shall be a period of one and one-half years (two and one-half years for the CEO) upon an involuntary termination without Cause and two years (three years for the CEO) upon termination after a Change of Control),
the date COBRA continuation coverage is canceled or the date the NEO is eligible to receive benefits from another employer;
|
•
|
continuation of executive life and supplemental disability insurance until the end of the relevant severance period; and
|
•
|
outplacement services under a Company-sponsored program until the earlier of (i) twenty-four months after the NEO's termination date (thirty-six months for the CEO); (ii) the date on which the NEO obtains another full-time job; (iii) the date on which the NEO becomes self-employed; and (iv) the date on which the NEO has received all services or benefits due under the applicable program.
|
|
|
|
Triggering Event
|
||||
Name
|
Compensation
Components
|
|
Involuntary Termination without Cause ($)
|
|
Change of Control without Termination ($)
|
|
Change of Control
with Qualifying Termination ($)
|
Robert E. Sanchez
|
Cash Severance
1
|
|
5,875,419
|
|
—
|
|
7,079,750
|
|
Intrinsic Value of Equity
2
|
|
—
|
|
4,784,523
|
|
4,784,523
|
|
Retirement Benefits
3
|
|
—
|
|
21,052
|
|
21,052
|
|
Welfare Benefits
4
|
|
48,991
|
|
—
|
|
58,789
|
|
Outplacement
5
|
|
15,000
|
|
—
|
|
15,000
|
|
Total Benefit to Employee
|
|
5,939,410
|
|
4,805,575
|
|
11,959,114
|
Art A. Garcia
|
Cash Severance
1
|
|
1,671,668
|
|
—
|
|
2,075,249
|
|
Intrinsic Value of Equity
2
|
|
—
|
|
1,347,464
|
|
1,347,464
|
|
Retirement Benefits
3
|
|
—
|
|
17,829
|
|
17,829
|
|
Welfare Benefits
4
|
|
19,719
|
|
—
|
|
26,292
|
|
Outplacement
5
|
|
15,000
|
|
—
|
|
15,000
|
|
Total Benefit to Employee
|
|
1,706,387
|
|
1,365,293
|
|
3,481,834
|
Dennis C. Cooke
|
Cash Severance
1
|
|
2,182,158
|
|
—
|
|
2,687,034
|
|
Intrinsic Value of Equity
2
|
|
—
|
|
1,478,870
|
|
1,478,870
|
|
Retirement Benefits
3
|
|
—
|
|
—
|
|
—
|
|
Welfare Benefits
4
|
|
29,715
|
|
—
|
|
39,620
|
|
Outplacement
5
|
|
15,000
|
|
—
|
|
15,000
|
|
Total Benefit to Employee
|
|
2,226,873
|
|
1,478,870
|
|
4,220,524
|
J. Steven Sensing
|
Cash Severance
1
|
|
1,728,727
|
|
—
|
|
1,520,112
|
|
Intrinsic Value of Equity
2
|
|
—
|
|
1,406,572
|
|
1,406,572
|
|
Retirement Benefits
3
|
|
—
|
|
436
|
|
436
|
|
Welfare Benefits
4
|
|
33,167
|
|
—
|
|
44,222
|
|
Outplacement
5
|
|
15,000
|
|
—
|
|
15,000
|
|
Total Benefit to Employee
|
|
1,776,894
|
|
1,407,008
|
|
2,986,342
|
John J. Diez
|
Cash Severance
1
|
|
1,739,435
|
|
—
|
|
1,955,341
|
|
Intrinsic Value of Equity
2
|
|
—
|
|
1,039,283
|
|
1,039,283
|
|
Retirement Benefits
3
|
|
—
|
|
304
|
|
304
|
|
Welfare Benefits
4
|
|
29,715
|
|
—
|
|
39,620
|
|
Outplacement
5
|
|
15,000
|
|
—
|
|
15,000
|
|
Total Benefit to Employee
|
|
1,784,150
|
|
1,039,587
|
|
3,049,548
|
Ryder System, Inc.
|
2019
Proxy Statement
|
59
|
|
|
Executive Compensation
|
1
|
Cash severance includes: (1) base salary, (2) pro-rata cash payment under the annual cash incentive awards, (3) in the case of involuntary termination without Cause, a payment equal to a multiple of the average payout amounts under the annual cash incentive awards for the previous three years, and (4) in the case of Change of Control with termination, a payment equal to a multiple of the target annual cash incentive award, all as described above. In the event of involuntary termination without Cause, base salary is paid over time in accordance with usual payroll practices and the annual cash incentive award is paid in a lump sum shortly after termination. In the event of termination in connection with a Change of Control, all payments are made in a lump sum shortly after termination. Timing and payment of cash severance is subject in all respects to Section 409A of the Internal Revenue Code.
|
2
|
Upon a Change of Control, the intrinsic value of equity reflects the intrinsic value of the accelerated equity. In each case, the amounts are calculated using the closing price of our common stock on December 31, 2018 ($48.15), and includes stock options, restricted stock, PBRSRs, and PBCAs.
|
3
|
This amount reflects the incremental increase in value resulting from the acceleration of the vesting of the pension restoration plan in the event of a Change of Control (whether or not there is a termination of employment), plus, in the event of a termination in connection with a Change of Control, the value of the early retirement subsidy in our pension plan. Assumed retirement age is the later of age 55 or the executive's age on December 31, 2018. See "Pension Benefits" above for more information.
|
4
|
Amounts are based on the current cost to us of reimbursing the named executive for the premiums paid for their current health, dental and prescription insurance coverage during the severance period as described above. The reimbursement is included in the earnings of the executive and subject to all applicable taxes.
|
5
|
Amounts reflect the cost of outplacement services provided under a Company-sponsored program.
|
PAY RATIO
|
Ryder System, Inc.
|
2019
Proxy Statement
|
60
|
|
|
Director Compensation
|
DIRECTOR COMPENSATION
|
Our non-employee directors received the following compensation during 2018:
|
||||
|
an annual Board retainer of $65,000, payable in January of each year;
|
|||
|
an annual committee retainer of $35,000, payable in May of each year;
|
|||
|
an annual grant of $135,000 in restricted stock units (RSUs), made on the date of our Annual Meeting of shareholders;
|
|||
|
a Board or committee meeting attendance fee of $1,000 for each additional Board or committee meeting attended in excess of eight Board meetings or eight committee meetings, payable in December;
|
|||
|
a committee chair retainer, payable in May, to each of the Chairs of the Finance and Governance Committees ($10,000), the Compensation Committee ($15,000) and the Audit Committee ($20,000); and
|
|||
|
an annual retainer of $25,000 to the Board's Lead Independent Director, payable in May.
|
2018 DIRECTOR COMPENSATION
|
Ryder System, Inc.
|
2019
Proxy Statement
|
61
|
|
|
Director Compensation
|
Name
|
Fees Earned or Paid in Cash
($)
1, 2, 3
|
Stock
Awards
($)
4,5
|
All Other
Compensation
($)
6
|
Total
($)
|
John M. Berra
|
100,000
|
179,624
|
10,000
|
289,624
|
Robert J. Eck
|
100,000
|
156,358
|
10,000
|
266,358
|
Robert A. Hagemann
|
121,000
|
146,039
|
2,000
|
269,039
|
Michael F. Hilton
|
100,000
|
153,088
|
—
|
253,088
|
Tamara L. Lundgren
|
101,000
|
149,263
|
10,000
|
260,263
|
Luis P. Nieto, Jr.
|
110,000
|
170,272
|
10,000
|
290,272
|
David G. Nord
|
89,166
|
137,332
|
—
|
226,498
|
Abbie J. Smith
|
101,000
|
182,066
|
—
|
283,066
|
E. Follin Smith
|
115,000
|
175,155
|
9,353
|
299,508
|
Dmitri L. Stockton
|
89,166
|
137,332
|
10,000
|
236,498
|
Hansel E. Tookes, II
|
136,000
|
183,125
|
10,000
|
329,125
|
1
|
Includes an annual Board retainer of $65,000 plus an annual committee retainer of $35,000.
|
2
|
Includes Committee Chair fees as follows: Mr. Hagemann, $20,000; Mr. Nieto, $10,000; Ms. E. Smith, $15,000; Mr. Tookes, $10,000; and Lead Independent Director fees of $25,000 for Mr. Tookes.
|
3
|
This column includes additional meeting fees paid to members of the Board as follows: Mr. Hagemann, $1,000; Ms. Lundgren, $1,000; Ms. A. Smith, $1,000; and Mr. Tookes, $1,000.
|
4
|
Includes the aggregate grant date fair value of outstanding awards and dividends computed in accordance with the accounting guidance for stock compensation granted to directors in 2018 in the following amounts:
|
Name
|
Outstanding Stock Awards ($)
|
Dividend in Stock
($)
|
John M. Berra
|
134,982
|
44,642
|
Robert J. Eck
|
134,982
|
21,376
|
Robert A. Hagemann
|
134,982
|
11,057
|
Michael F. Hilton
|
134,982
|
18,106
|
Tamara L. Lundgren
|
134,982
|
14,282
|
Luis P. Nieto, Jr.
|
134,982
|
35,290
|
David G. Nord
|
134,982
|
2,350
|
Abbie J. Smith
|
134,982
|
47,084
|
E. Follin Smith
|
134,982
|
40,173
|
Dmitri L. Stockton
|
134,982
|
2,350
|
Hansel E. Tookes, II
|
134,982
|
48,143
|
5
|
The following table sets forth each director's outstanding stock awards as of December 31, 2018:
|
Name
|
Outstanding Stock Awards
|
John M. Berra
|
31,475
|
Robert J. Eck
|
14,873
|
Robert A. Hagemann
|
8,606
|
Michael F. Hilton
|
12,623
|
Tamara L. Lundgren
|
9,659
|
Luis P. Nieto, Jr.
|
23,757
|
David G. Nord
|
2,041
|
Abbie J. Smith
|
35,564
|
E. Follin Smith
|
27,580
|
Dmitri L. Stockton
|
2,041
|
Hansel E. Tookes, II
|
33,927
|
6
|
Reflects benefits under the Company's Matching Gifts to Education program.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
62
|
|
|
Director Compensation
|
Ryder System, Inc.
|
2019
Proxy Statement
|
63
|
|
|
Advisory Vote on Executive Compensation
(Proposal 3)
|
PROPOSAL NO. 3
|
ADVISORY VOTE ON EXECUTIVE COMPENSATION
|
Ryder System, Inc.
|
2019
Proxy Statement
|
64
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
PROPOSAL NO. 4
|
APPROVAL OF 2019 EQUITY AND INCENTIVE COMPENSATION PLAN
|
Ryder System, Inc.
|
2019
Proxy Statement
|
65
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
Stock Options Outstanding as of February 22, 2019
(1)
|
2,042,212
|
|
|
Weighted Average Exercise Price of Stock Options Outstanding as of February 22, 2019
|
$
|
71.0137
|
|
Weighted Average Remaining Term of Stock Options Outstanding as of February 22, 2019
|
7.1386
|
|
|
Outstanding Full Value Awards as of February 22, 2019
(2)
|
1,088,884
|
|
|
Total Equity Awards Outstanding as of February 22, 2019
(1)(2)
|
3,131,096
|
|
|
Shares Available for Grant under the 2012 Plan and the Stock Award Plan, if the 2019 Plan is approved
(3)
|
0
|
|
|
Shares Requested
|
4,300,000
|
|
|
Total Potential Overhang under the 2019 Plan (and all predecessor employee and non-employee director equity compensation plans)
|
7,431,096
|
|
|
Shares of Common Stock Outstanding as of February 22, 2019
|
53,480,280
|
|
|
Fully Diluted Shares of Common Stock
|
60,911,376
|
|
|
Potential Dilution of 4,300,000 shares as a Percentage of Fully Diluted Shares of Common Stock
|
7.06
|
%
|
Ryder System, Inc.
|
2019
Proxy Statement
|
66
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
Element
|
2018
|
2017
|
2016
|
Three-Year Average
|
|||
Time-Based Stock Units and Stock Awards Granted
|
167,727
|
|
113,369
|
|
129,150
|
|
|
Performance-Based Stock Units and Stock Awards Earned
|
90,625
|
|
50,344
|
|
43,446
|
|
|
Total Full Value Awards
|
258,352
|
|
163,713
|
|
172,596
|
|
|
Stock Options Granted
|
346,833
|
|
465,140
|
|
512,665
|
|
|
Total Full Value Awards
and Stock Options Granted
|
605,185
|
|
628,853
|
|
685,261
|
|
|
Weighted Average Shares of Common Stock Outstanding as of December 31
|
52,390,075
|
|
52,612,903
|
|
53,014,736
|
|
|
Burn Rate
|
1.16%
|
1.20%
|
1.29%
|
1.22%
|
Ryder System, Inc.
|
2019
Proxy Statement
|
67
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
Element
|
2018
|
2017
|
2016
|
|||
Time-Based Stock Units and Stock Awards Granted in the Applicable Year
|
167,727
|
|
113,369
|
|
129,150
|
|
Performance-Based Stock Units and Stock Awards Granted in the Applicable Year
|
196,962
|
|
187,480
|
|
91,965
|
|
Total Grants of Stock Units and Stock Awards
|
364,689
|
|
300,849
|
|
221,115
|
|
Performance-Based Stock Units and Stock Awards that were eligible to be Earned in the Applicable Year (at maximum performance)
|
162,756
|
|
141,417
|
|
78,819
|
|
Performance-Based Stock Units and Stock Awards Earned in the Applicable Year
|
90,625
|
|
50,344
|
|
43,446
|
|
Ryder System, Inc.
|
2019
Proxy Statement
|
68
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
•
|
no stock options or stock appreciation rights will expire more than ten years (or, in the case of incentive stock options (discussed below) granted to any holder of at least 10% of the total combined voting power of all classes of stock of the Company or any subsidiary or parent of the Company, five years) from the date of grant;
|
•
|
except with respect to Substitute Awards discussed below, awards granted as stock options or stock appreciation rights may not have an exercise price that is less than 100% (or, in the case of incentive stock options (discussed below) granted to any holder of at least 10% of the total combined voting power of all classes of stock of the Company or any subsidiary or parent of the Company, 110%) of the fair market value of the shares on the date of grant;
|
•
|
dividend and dividend equivalents will not be paid with respect to unvested shares or stock units, but may accrue on such awards and only be paid to the extent the awards vest;
|
•
|
no dividend equivalents may be granted with respect to stock options or stock appreciation rights;
|
•
|
awards granted under the 2019 Plan will include vesting schedules under which no portion of the award may vest in less than one year from the date of grant; provided, that awards granted to non-employee directors will be deemed to satisfy this minimum vesting requirement if they vest on the earlier of the first anniversary of the date of grant or the next annual meeting of shareholders following the date of grant provided such meeting occurs not sooner than 50 weeks from the date of grant, and up to 5% of the shares reserved for issuance under the 2019 Plan (subject to adjustments as described below) may be granted under awards that are not subject to this minimum vesting requirement; and
|
•
|
the Committee has the authority to accelerate vesting in connection with a participant’s death, disability, retirement, or other termination of employment, in the event of a change of control or certain other corporate transactions or events pursuant to which awards may be adjusted under the adjustment provisions of the 2019 Plan (as described below), or in other circumstances as the Committee deems appropriate.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
69
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
•
|
For each share that is delivered pursuant to a full value award (that is, an award other than a stock option or SAR), the aggregate share limit under the 2019 Plan will be reduced by two shares.
|
•
|
For each share that is delivered pursuant to a stock option or SAR, the aggregate share limit under the 2019 Plan will be reduced by one share.
|
•
|
If and to the extent that stock options or SARs granted under the 2019 Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered without having been exercised, and if and to the extent that any full value awards are forfeited or terminated, or otherwise are not paid in full, the shares reserved for such awards will again be available for grants under the 2019 Plan.
|
•
|
If and to the extent that outstanding awards under the 2012 Plan terminate, expire or are cancelled, forfeited, exchanged or surrendered without having been exercised, vested or paid and are added to the share reserve under the 2019 Plan, then for each share that relates to a full value award, two shares will be added to the share reserve, and for each share that relates to stock options or SARs, one share will be added to the share reserve.
|
•
|
If SARs are granted, the full number of shares subject to the SARs will be considered issued under the 2019 Plan and will reduce the aggregate share limit on a 1:1 ratio, without regard to the number of shares actually delivered upon exercise of the SARs.
|
•
|
Shares withheld for payment of the exercise price of a stock option, and shares withheld for payment of taxes with respect to stock options and SARs, will not be available for re-issuance under the 2019 Plan and will reduce the aggregate share limit on a 1:1 ratio.
|
•
|
In contrast, shares withheld or tendered to the Company by a participant for payment of taxes with respect to any full value award will not reduce the aggregate share limit and will be available for re-issuance under the 2019 Plan.
|
•
|
To the extent that any awards are paid in cash, and not in shares, such awards will not reduce the aggregate share limit.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
70
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
•
|
In any calendar year, no participant may be granted any awards that relate to more than 750,000 shares, subject to adjustments as described in the 2019 Plan.
|
•
|
The maximum grant date value of shares subject to awards granted to any non-employee director during any one calendar year, taken together with any cash fees payable to such non-employee director for services rendered during the calendar year, will not exceed $500,000 in total value.
|
•
|
Any individual, entity or group, other than the Company or an employee benefit plan sponsored by the Company or its subsidiaries, becomes the beneficial owner of more than 30% of our voting stock;
|
•
|
Individuals who, as of the Effective Date, constituted our Board of Directors (referred to as the incumbent board) cease to constitute at least a majority of our Board of Directors. Any individual who becomes a director after the Effective Date and whose election or nomination was approved by a vote or by approval of the proxy statement in which such person is named as a nominee for director, without written objection to such nomination, of at least a majority of the directors then comprising the incumbent board will be considered a member of the incumbent board. However, no individual who was initially elected as a member of our Board of Directors in connection with an actual or threatened election contest will be considered to be a member of the incumbent board.
|
•
|
Consummation of a reorganization, merger or consolidation of the Company, unless, following such transaction, (i) our shareholders immediately before the transaction own more than 50% of the voting stock of the surviving entity
|
Ryder System, Inc.
|
2019
Proxy Statement
|
71
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
•
|
Consummation of a sale of all or substantially all of the assets of the Company; or
|
•
|
Consummation of a liquidation or dissolution of the Company approved by the shareholders.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
72
|
|
|
Approval of 2019 Equity and Incentive Compensation Plan (Proposal 4)
|
Plans
|
|
Number of Securities to be issued upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Excluding Securities Reflected in Column (a)
|
|||||
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
|
|
|||
Broad based employee stock plans
|
|
2,551,479
|
|
(1)
|
|
$72.28
|
(3)
|
|
1,524,137
|
|
|
Employee stock purchase plan
|
|
—
|
|
|
|
—
|
|
|
|
584,546
|
|
Non-employee directors' stock plans
|
|
202,702
|
|
(2)
|
|
—
|
|
|
|
37,484
|
|
Total
|
|
2,754,181
|
|
|
|
$72.28
|
|
|
2,146,167
|
|
(1)
|
Includes
1,861,616
stock options,
292,201
time-vested restricted stock awards,
67,898
market-based restricted stock awards and
329,764
performance-based restricted stock awards, which includes
100,602
performance-based restricted stock rights not considered granted under accounting guidance for stock compensation. Refer to
Note 22
, "
Share-Based Compensation Plans
" to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2018, for additional information.
|
(2)
|
Includes
195,443
time-vested restricted stock awards, as well as,
7,259
time-vested restricted stock awards vested but not exercisable until six months after the director's retirement.
|
(3)
|
Weighted-average exercise price of outstanding options excludes restricted stock awards and restricted stock units.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
73
|
|
|
Amendment to Restated Articles of Incorporation and By-Laws
(Proposal 5)
|
PROPOSAL NO. 5
|
AMENDMENT TO OUR RESTATED ARTICLES OF INCORPORATION AND BY-LAWS TO REMOVE SUPERMAJORITY VOTING PROVISIONS ON SHAREHOLDER ACTION BY WRITTEN CONSENT
|
Ryder System, Inc.
|
2019
Proxy Statement
|
74
|
|
|
Shareholder Proposal on Independent Board Chairman
(Proposal 6)
|
Ryder System, Inc.
|
2019
Proxy Statement
|
75
|
|
|
Shareholder Proposal on Independent Board Chairman
(Proposal 6)
|
•
|
presiding at all meetings of the Board at which the Chair is not present, including outside directors sessions of the independent directors (which are held at every regular meeting);
|
•
|
serving as the liaison between the Chair and the independent directors;
|
•
|
serving as a liaison between the Board and management to obtain the types and forms of information that the Board needs;
|
•
|
having the authority to call meetings of the independent directors;
|
•
|
requesting and previewing information sent to the Board as necessary;
|
•
|
communicating with management regarding presentations for the Board;
|
•
|
developing meeting agendas for the Board in collaboration with the Chair and Chief Legal Officer and ensuring that topics requested by the independent directors are included;
|
•
|
developing meeting schedules in collaboration with the Chair to assure that there is sufficient time for discussion of all agenda items;
|
•
|
being available for consultation and direct communication with the Company’s shareholders, as appropriate, to discuss their concerns and expectations;
|
•
|
engaging with other independent directors to identify matters for discussion at outside directors sessions; and
|
•
|
overseeing annual CEO evaluation.
|
•
|
All of our Board members are independent within the meaning of applicable laws and Company polices, with the exception of the Chair and CEO.
|
•
|
The Committee Chairs and all members of the Audit, Governance, Finance, and Compensation Committees are independent directors. These Committee Chairs determine matters to be discussed and materials to be evaluated in the areas covered by their respective committee charters. These committees also have unfettered access to management and the authority to retain independent advisors, as they deem appropriate.
|
•
|
Each committee operates under a written charter that is evaluated by each committee annually and that details oversight of key matters.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
76
|
|
|
Shareholder Proposal on Independent Board Chairman
(Proposal 6)
|
•
|
Independent directors meet in outside directors sessions at every regularly scheduled Board meeting that are led by the Lead Independent Director, without the CEO or any other Company employee present. Independent directors use these sessions to discuss matters of concern as well as any matter they deem appropriate, including evaluation of senior management, CEO evaluation, matters to be included on Board agendas, priorities and overall effectiveness.
|
•
|
Annually, our Board performs a formal evaluation of the Chair and CEO in outside director sessions.
|
•
|
The Company has established policies and procedures regarding communications to the Board for all shareholders and other interested parties, including management and employees.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
77
|
|
|
Other Matters
|
OTHER MATTERS
|
Who can vote?
|
Holders of Ryder common stock at the close of business on March 8, 2019, the record date, are entitled to vote their shares at the Annual Meeting. As of March 8, 2019, there were 53,274,557 shares of
common stock issued, outstanding and entitled to vote. Each share of common stock issued, outstanding and entitled to vote represents one vote.
|
What is a quorum?
|
A quorum is the minimum number of shares required to hold a meeting. Under our By-Laws, the holders of a majority of the total number of shares issued, outstanding and entitled to vote at the meeting must be present in person or represented by proxy for a quorum. If you sign and return your proxy marked “abstain”, your shares will be counted for purposes of determining whether a quorum is present.
|
What is the difference between a shareholder of record and a beneficial shareholder?
|
Record Shareholder.
You are a shareholder of record if you are registered as a shareholder with our transfer agent, EQ Shareowner Services.
Beneficial Shareholder.
You are a beneficial shareholder if a brokerage firm, bank, trustee or other agent (nominee) holds your shares. This is often called ownership in “street name”, since your name does not appear anywhere in our records.
|
How do I vote?
|
If you are a shareholder of record, you may vote:
|
|
via Internet;
-
by telephone;
--
by mail, if you received a paper copy of these proxy materials; or
in person at the meeting.
|
|
Detailed instructions for Internet and telephone voting are set forth on the notice of Internet availability (Notice), which contains instructions on how to access our proxy statement, Annual Report and shareholder letter online, and the printed proxy card.
|
|
If your shares are held in our 401(k) plan, your proxy will serve as a voting instruction for the trustee of our 401(k) plan who will vote your shares as you instruct. To allow sufficient time for the trustee to vote, your voting instructions must be received by March 30, 2019 (the cut-off date). If the trustee does not receive your instructions by the cut-off date, the trustee will vote the shares you hold through our 401(k) plan in the same proportion as all other shares in our 401(k) plan for which voting instructions were received.
|
|
If you are a beneficial shareholder, you must follow the voting procedures of your nominee.
|
What shares are covered by my proxy card?
|
Your proxy reflects all shares owned by you at the close of business on March 8, 2019. For participants in our 401(k) plan, shares held in your account as of that date are included in your proxy.
|
What if I am a beneficial shareholder and I do not give the nominee voting instructions?
|
Brokerage firms have the authority under NYSE rules to vote shares for which their customers do not provide voting instructions on certain “routine” matters. A broker non-vote occurs when a nominee who holds shares for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has not received instructions from the owner of the shares. Broker non-votes are included in the calculation of the number of votes considered to be present at the meeting for purposes of determining the presence of a quorum but are not counted as shares present and entitled to be voted with respect to a matter on which the nominee has expressly not voted.
|
What does it mean if I receive more than one Notice or proxy card?
|
It means that you hold shares in more than one account. To ensure all of your shares are voted, if you vote by telephone or on the Internet, you will need to vote once for each Notice, proxy card or voting instruction card you receive. Alternatively, if you vote by proxy card, you will need to sign and return each proxy card by mail.
|
How many votes are needed for the proposals to pass?
|
The table below sets forth the proportion of votes needed for each proposal on the ballot to pass. The table also sets forth whether a nominee can exercise discretion and vote your shares absent your instructions and if not, the impact of such broker non-vote on the approval of the proposal and the impact of abstentions.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
78
|
|
|
Other Matters
|
Proposal
|
How Many Votes are Needed for a Proposal to Pass?
|
|
Can Brokers Vote Absent Instructions?
|
|
Impact of Broker Non-Vote
|
|
Impact of Abstentions
|
|
No. 1
|
Election of Directors
|
Majority of Votes Cast
|
|
No
|
|
None
|
|
None
|
No. 2
|
Ratification of PricewaterhouseCoopers LLP
|
Majority of Votes Cast
|
|
Yes
|
|
Not
Applicable
|
|
None
|
No. 3
|
Say on Pay
|
Majority of Votes Cast
|
|
No
|
|
None
|
|
None
|
No. 4
|
Approval of 2019 Equity and Incentive Compensation Plan
|
Majority of Votes Cast
|
|
No
|
|
None
|
|
Same as a Vote "Against"
|
No. 5
|
Proposal to Amend our Restated Articles of Incorporation and By-Laws to Remove Supermajority Voting on Shareholder Action by Written Consent
|
75% of the shares outstanding
|
|
No
|
|
Same as a Vote "Against"
|
|
Same as a Vote "Against"
|
No. 6
|
Shareholder Proposal on Independent Board Chairman
|
Majority of Votes Cast
|
|
No
|
|
None
|
|
None
|
Proposals 3 and 6 are non-binding, advisory votes. What is the effect if they pass?
|
Although the advisory votes on Proposal 3 (Say on Pay) and Proposal 6 (Shareholder Proposal on Independent Board Chairman) are non-binding, our Board and the Compensation Committee (with respect to Proposal 3) and the Governance Committee (with respect to Proposal 6) will review the results and, consistent with our record of shareholder engagement, take them into account in making future executive compensation and corporate governance decisions.
|
How do I change my vote?
|
A shareholder of record may revoke a proxy by giving written notice of revocation to our Corporate Secretary before the meeting by delivering a later-dated proxy (either in writing, by telephone or over the Internet), or by voting in person at the Annual Meeting.
|
|
If you are a beneficial shareholder, you may change your vote by following your nominee’s procedures for revoking or changing your proxy.
|
Who can attend the Annual Meeting?
|
Only shareholders and our invited guests are permitted to attend the Annual Meeting.
Record Shareholders.
If you are a shareholder of record, you must bring a form of personal identification to the Annual Meeting, where your name will be verified against our shareholder list.
Beneficial Shareholders.
If you are a beneficial shareholder and you plan to attend the meeting, you should bring proof of ownership, such as a brokerage statement, showing your ownership of the shares as of the record date and a form of personal identification. If you are a beneficial shareholder and wish to vote your shares at the meeting, you must obtain a proxy from your nominee and bring your proxy to the Annual Meeting.
|
If I plan to attend the Annual Meeting, should I still vote by proxy?
|
Yes. Casting your vote in advance does not affect your right to attend the Annual Meeting. If you vote by telephone, on the Internet or send in your proxy card and also attend the meeting, you do not need to vote again at the meeting unless you want to change your vote.
Record Shareholders.
Written ballots will be available at the meeting for shareholders of record.
|
|
Beneficial Shareholders.
Beneficial shareholders who wish to vote in person must request a legal proxy from their nominee and bring that legal proxy to the Annual Meeting.
|
Ryder System, Inc.
|
2019
Proxy Statement
|
79
|
|
|
Other Matters
|
PROXY SOLICITATION COSTS
|
VOTE TABULATIONS
|
CONFIDENTIAL VOTING
|
SHAREHOLDER PROPOSALS
|
ELECTRONIC DELIVERY
|
Ryder System, Inc.
|
2019
Proxy Statement
|
80
|
|
|
Other Matters
|
HOUSEHOLDING
|
Ryder System, Inc.
|
2019
Proxy Statement
|
81
|
|
|
Appendix A
|
1.
|
Purpose of the Plan
|
2.
|
Definitions
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-1
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-2
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-3
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-4
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-5
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-6
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-7
|
|
|
Appendix A
|
8.
|
Change of Control
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-8
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-9
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-10
|
|
|
Appendix A
|
Ryder System, Inc.
|
2019
Proxy Statement
|
A-11
|
|
|
Appendix B
|
Ryder System, Inc.
|
2019
Proxy Statement
|
B-1
|
|
|
Appendix C
|
Ryder System, Inc.
|
2019
Proxy Statement
|
C-1
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Ryder System, Inc.
11690 N.W. 105th Street
Miami, Florida 33178 www.ryder.com |