SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
![]() | David C. Dauch Chairman of the Board and Chief Executive Officer |
![]() | James A. McCaslin Lead Independent Director |
Notice of Annual Meeting |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS |
Annual Meeting Agenda / Items of Business | ||
1. Election of three members of the Board of Directors to serve until the annual meeting of stockholders in 2025 | ||
2. Advisory vote on named executive officer compensation | ||
3. Ratification of the appointment of Deloitte & Touche LLP as independent public accounting firm for 2022 | ||
4. Other business properly presented at the meeting | ||
By Internet | By Telephone | By Mail | During Meeting | |||||||||||||||||
Go to www.envisionreports.com/axl and follow the instructions. You will need the control number on your proxy card or voter instruction form. | Call the number shown on your proxy card or voter instruction form. You will need the control number on your proxy card or voting instruction form. | Complete, sign and date the proxy card or voting instruction form and return it in the envelope provided. | Vote electronically at the meeting. See page 73 for instructions. | |||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the May 5, 2022 Stockholder Meeting: Our 2022 proxy statement and 2021 annual report and Form 10-K are available free of charge at www.envisionreports.com/axl. | ||
2022 AAM Proxy Statement | 1 | ||
Proxy Summary |
Your Vote is Important |
Voting Matters and Board Recommendations: | Votes Required | Board Vote Recommendation | More Information | |||||||||||
Proposal 1 | Election of three members of the Board of Directors to serve until the annual meeting of stockholders in 2025 | Majority of votes cast | FOR each nominee | Page 13 | ||||||||||
Each nominee brings a strong background and set of skills to the Board and has demonstrated sound judgment and integrity. | ||||||||||||||
Proposal 2 | Advisory vote on named executive officer compensation | Majority of votes cast | FOR | Page 33 | ||||||||||
AAM's executive compensation program is market-based, performance driven and aligns with shareholder interests. | ||||||||||||||
Proposal 3 | Ratification of the appointment of Deloitte & Touche LLP as independent public accounting firm for the year ending December 31, 2022 | Majority of votes cast | FOR | Page 70 | ||||||||||
All independence standards have been met and sound practices are employed to ensure independent financial governance. |
By Internet | By Telephone | By Mail | During Meeting | |||||||||||||||||
Go to www.envisionreports.com/axl and follow the instructions. You will need the control number on your proxy card or voter instruction form. | Call the number shown on your proxy card or voter instruction form. You will need the control number on your proxy card or voting instruction form. | Complete, sign and date the proxy card or voting instruction form and return it in the envelope provided. | Vote electronically at the meeting. See page 73 for instructions. | |||||||||||||||||
2022 AAM Proxy Statement | 2 | ||
Proxy Summary |
Governance Highlights |
Independence | Accountability | |||||||
–9 of 10 directors are independent –Lead Independent Director –Committees comprised of only independent directors (except Executive Committee) –Independent directors meet regularly in executive session without management present | –Proactive shareholder engagement program –Proxy access by-laws –Majority vote for directors in uncontested elections –Candid Board and committee evaluation process –Commitment to Board refreshment |
Sound Practices | Risk Management | |||||||
–Board policy requires inclusion of women and minority candidates in the selection process for every open seat –Nominating/Corporate Governance Committee oversight of sustainability program and human capital management, including DEI initiatives and succession planning –Director orientation and education –Stock ownership requirements for directors and executive officers –Hedging or pledging of AAM stock is prohibited | –Active Board oversight of AAM's overall risk management structure –Individual Board committees oversee risks related to their areas of responsibility –AAM has robust risk management processes throughout the Company –The Board and its committees receive regular updates from management on top enterprise risks, and the steps management has taken or will take to mitigate these risks |
Independence | Tenure | ||||
90% | 10 | ||||
Independent | Average Years of Service | ||||
Age | Diversity | ||||
67 | 30% | ||||
Average Age | 2 Women 1 Racial Minority |
2022 AAM Proxy Statement | 3 | ||
Proxy Summary |
Business and Financial Highlights |
Sales | Adjusted EBITDA | ||||
$5.2B | $833M | ||||
16.2% of Sales | |||||
Cash Provided by Operating Activities | Reduced Total Debt by More Than | ||||
$538M | $350M | ||||
2022 AAM Proxy Statement | 4 | ||
Proxy Summary |
2021 AAM Highlights | ||||||||||||||
![]() | Secured contracts valued at more than $10 billion for next-generation full-size truck axle programs with multiple customers | ![]() | Secured an agreement with REE to supply high-performance electric drive units | |||||||||||
![]() | Named as the sole supplier of front and rear pickup axles for GM’s Oshawa truck plant | ![]() | Secured business with NIO supplying differentials for its next generation ePowertrain program | |||||||||||
![]() | AAM to supply TracRite Electronic Locking Front Differentials for the new HUMMER EV | ![]() | Won Both PACE Partnership and Innovation Awards for Electric Drive Technology | |||||||||||
![]() | Supplying Power Transfer Units for the all-new Ford Bronco Sport and Maverick | ![]() | AAM CEO pledged to ACT ON supporting a more inclusive workplace | |||||||||||
![]() | Continued strong free cash flow generation and debt reduction | ![]() | Named one of Forbes America's Best Large Employers | |||||||||||
2022 AAM Proxy Statement | 5 | ||
Proxy Summary |
Shareholder Engagement |
Investor Communication Program | ![]() | Board Involvement | ![]() | Annual Shareholder Outreach Program | ||||||||||
–Senior management participation in conferences –One-on-one and group meetings –Site visits at manufacturing facilities and technical centers –Day-to-day interaction with Investor Relations | –Lead Independent Director/Compensation Committee Chair participates in outreach program –Board considers shareholder feedback and shareholder vote in decision-making –Board reviews disclosure enhancements | –Fall/Winter engagement with shareholders and proxy advisory firms –Led by CFO and Investor Relations Department –Board and management discuss shareholder feedback and the Board's response |
Shareholder Engagement Topics | |||||||||||
þ | Board involvement in ESG program | þ | Link between ESG performance and incentive compensation | ||||||||
þ | Diversity, equity and inclusion initiatives | þ | Selection process for Board candidates | ||||||||
þ | Human capital management | þ | Board oversight of risk | ||||||||
þ | Board refreshment and diversity | þ | Separation of Chairman and CEO roles | ||||||||
þ | Shareholder rights | þ | Classified Board |
2022 AAM Proxy Statement | 6 | ||
Proxy Summary |
Sustainability Program |
Science-Based Targets Energy and Emissions Reduction Water Risk Abatement Waste Removal and Recycling | Diversity, Equity and Inclusion Training and Professional Development Associate Health, Safety and Wellness # TeamAAM in the Community | AAM Technology Roadmap Electrification Initiatives Product Life Cycle Assessment AAM Quality System | Cascading AAM Initiatives to All Suppliers Connected Supply Chain Initiatives Value Chain Sustainability Supplier Diversity Programs | Leadership and Governance Stakeholder expectations Ethics Program Compliance Program |
Audit Committee | Nominating / Corporate Governance Committee | Compensation Committee | Technology Committee | |||||||||||||||||
Receives quarterly reports on key aspects of our ethics and compliance program | Oversees policies, strategies and performance related to sustainability matters and corporate social responsibility, including human capital management | Structures executive compensation programs to drive performance aligned with our business strategy, including advancements in our Sustainability Program | Oversees product technology, with a focus on advancements in electrification, light-weighting and other key product technologies |
2022 AAM Proxy Statement | 7 | ||
Proxy Summary |
2022 AAM Proxy Statement | 8 | ||
Proxy Summary |
![]() | –Our mission is to deliver POWER while building a safer, greener and more sustainable future for our associates, customers, communities and the environment. To achieve that mission, we are working with our customers, industry peers and supply base to accelerate action to protect the planet for future generations. –In 2021, we launched a new operating system module to reinforce our commitment to improving the environmental impact of our global engineering and manufacturing operations. This E4 program formalizes existing performance standards and metrics to drive continuous improvement in four critical areas of environmental stewardship: GHG emissions, energy consumption, water protection and waste management. –We applied for accreditation of our new climate goals by the Science-based Targets Initiative (SBTi). |
2022 AAM Proxy Statement | 9 | ||
Proxy Summary |
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2022 AAM Proxy Statement | 10 | ||
Proxy Summary |
Compensation Highlights |
Supports Business Strategy | Market Competitive | Aligned with Shareholder Interests | ||||||
–Programs utilize incentive metrics aligned with business strategy –Rigorous performance goals as key drivers of enterprise value creation –87% of CEO compensation is variable and at risk –The 2021 annual incentive program has a strategic goal component that also includes ESG performance and progress | –Attract and retain executive talent –Benchmark pay against a peer group of similarly sized companies –Target direct compensation at the 50th percentile –Incentive awards align with operational results and shareholder value creation | –Mix of annual and long-term incentive balances focus between short-term results and long-term share appreciation –Significant portion of LTI compensation is paid in shares and performance-based –2021 say-on-pay vote of 93% –Stock ownership requirements | ||||||
2022 AAM Proxy Statement | 11 | ||
Proxy Summary |
Strategic Business Objective | Alignment | Incentive Metric | ||||||
Continue to strengthen the balance sheet; provide funding for organic growth, research & development, and other capital priorities; reduce leverage | ![]() | Operational Cash Flow –2021 Annual Incentive Program (40% metric) | ||||||
Develop innovative technology, including electrification, and reinvest in research and development | Free Cash Flow –2021 LTI Performance Awards (100% metric of performance-based LTI) | |||||||
Achieve progress on ESG priorities, including DEI initiatives and environmental goals | Strategic Goals –2021 Annual Incentive Program (20% metric) | |||||||
Secure future replacement business and achieve profitable growth while retaining flexibility to address market changes | EBITDA margin –2021 Annual Incentive Program (40% metric) | |||||||
Drive productivity and financial performance | ||||||||
Relative TSR –2021 LTI Performance Awards (modifier -15% or +15%) | ||||||||
Create sustainable value for shareholders and align with our shareholders' experience |
2022 AAM Proxy Statement | 12 | ||
Election of Directors |
Proposal 1: Election of Directors |
þ | The Board unanimously recommends a vote FOR each of the nominees. |
Election of Directors |
Herbert K. Parker | Retired Executive Vice President, Harman International Industries | |||||||
![]() | Past Positions | Key Qualifications and Experience | ||||||
Harman International Industries, Inc.: Executive Vice President, Operational Excellence 2015 - 2017 Executive Vice President and Chief Financial Officer 2008 - 2014 ABB, Inc. and related ABB companies: Chief Financial Officer, North America 2006 - 2008 Chief Financial Officer, Automation Technologies Division 2002 - 2005 Various finance positions of increasing responsibility throughout Asia, Europe and North America 1980 - 2002 | Based on his professional background and public company board and audit committee experience, the following qualifications led the Board to conclude that Mr. Parker should serve on AAM’s Board: his leadership and financial experience as the Chief Financial Officer of Harman International Industries, Inc. and of ABB; his responsibilities for mergers and acquisitions, information technology, internal audit and tax; the breadth of his management experience over global operating activities, capital allocation structures and developing and implementing strategic plans; and his subject matter knowledge in the areas of finance, investments, audit and accounting, strategic planning, human capital management and risk management. | |||||||
Age: 63 | Other Public Company Directorships | Directorship (not-for-profit) | ||||||
Director Since: 2018 | TriMas Corporation since March 2017 Apogee Enterprises, Inc. since May 2018 nVent Enterprises Plc. since May 2018 | –Stamford, Connecticut YMCA | ||||||
Committees: | ||||||||
Audit | ||||||||
Nominating/Corp Gov |
Election of Directors |
John F. Smith | Principal, Eagle Advisors LLC | |||||||
![]() | Current and Past Positions | Key Qualifications and Experience | ||||||
Principal, Eagle Advisors LLC (strategy development and performance improvement consulting) since 2011 Positions at General Motors: Group Vice President, Corporate Planning and Alliances (most recent position) 2000 - 2010 General Manager, Cadillac Motor Car 1997 - 1999 President, Allison Transmission 1994 - 1996 Vice President, Planning; International Operations, Zurich Switzerland 1989 - 1993 | Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Smith should serve on AAM's Board: his leadership experience in the automotive industry; the breadth of his management experience with General Motors international operations; and his subject matter knowledge in the areas of manufacturing, finance, innovation and technology, strategic planning, human capital management and risk management. | |||||||
Directorship (not-for-profit) | ||||||||
–Jeremie Rising | ||||||||
Age: 71 | Prior Public Company Directorships | |||||||
Director Since: 2011 | TI Fluid Systems plc (TI Automotive) 2017 - 2021 | |||||||
Committees: | ||||||||
Audit | Previous Directorships | |||||||
Technology (Chair) | CEVA Logistics, AG 2013 - April 2019 Covisint Corporation 2016 - 2017 Arnold Magnetics 2015 - 2016 Plasan Carbon Composites 2013 - 2014 Smith Electric Vehicles Corp. 2012 - 2014 | |||||||
Executive | ||||||||
Election of Directors |
James A. McCaslin | Retired President & Chief Operating Officer, Harley-Davidson Motor Co. | |||||||
![]() | Past Positions | Key Qualifications and Experience | ||||||
Positions at Harley-Davidson (Retired 2010): President & Chief Operating Officer 2001 - 2009 Various senior executive positions 1992 - 2001 Other Manufacturing Company Positions: Manufacturing and Engineering executive JI Case (agricultural equipment) 1989 - 1992 Manufacturing and Quality executive Chrysler Corporation Volkswagen of America General Motors Corporation 1966 - 1989 | Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. McCaslin should serve on AAM's Board: his leadership experience as President & COO of Harley-Davidson Motor Company; the breadth of his manufacturing and engineering experience at global manufacturing companies; and his subject matter knowledge in the areas of engineering, innovation and technology, manufacturing, human capital management and risk management. | |||||||
Age: 73 | ||||||||
Director Since: 2011 | Previous Public Company Directorship | |||||||
Lead Independent Director | Maytag Corporation 2003 - 2006 | |||||||
Committees: | ||||||||
Audit | ||||||||
Compensation (Chair) | ||||||||
Nominating/Corp Gov | ||||||||
Technology | ||||||||
Executive | ||||||||
Election of Directors |
William P. Miller II CFA | Senior Managing Director - Capital Markets, Investments and Governance Financial Markets International, Inc. | |||||||
![]() | Current and Past Positions | Key Qualifications and Experience | ||||||
Senior Managing Director: Capital Markets, Investments & Governance since October 2020 Senior Managing Director & CFO 2011 - 2013. Financial Markets International, Inc. Chief Financial Officer 2019 - September 2020 Head of Asset Allocation 2013 - 2019 Saudi Arabian Investment Company Deputy Chief Investment Officer Ohio Public Employees Retirement System 2005 - 2011 Senior Risk Manager Abu Dhabi Investment Authority 2003 - 2005 Independent Risk Oversight Officer & Chief Compliance Officer Commonfund Group 1996 - 2002 | Based on his professional background and prior AAM Board and Audit Committee experience, the following qualifications led the Board to conclude that Mr. Miller should serve on AAM's Board: his leadership qualities developed from his experience as Head of Asset Allocation and Chief Financial Officer for the Saudi Arabian Investment Company and as an officer with oversight responsibilities for investments, risk and compliance since 1996; the breadth of his experience in serving on the boards of the Chicago Mercantile Exchange and the Dubai Mercantile Exchange; and his subject matter knowledge in the areas of finance, investments, audit and accounting, innovation and technology, regulatory matters, human capital management and risk management. | |||||||
Age: 66 | ||||||||
Director Since: 2005 | Directorship (not-for-profit) | |||||||
Committees: | –Wayne County (Ohio) Humane Society | |||||||
Audit (Chair) | Previous Directorships | |||||||
Technology | Chicago Mercantile Exchange 2003 - 2017 Dubai Mercantile Exchange 2011 - 2017 |
Sandra E. Pierce | Senior Executive Vice President, Huntington Bank | |||||||
![]() | Current and Past Positions | Key Qualifications and Experience | ||||||
Chair, Huntington Bank Michigan and Sr. Vice President, Private Client Group & Regional Banking Director since August 2016 Vice Chair, First Merit Corporation and Chair and Chief Executive Officer, First Merit Michigan (acquired by Huntington Bank) 2013 - 2016 President and Chief Executive Officer, Charter One, Midwest Regional Executive (RBS Citizens, N.A.) 2005 - 2012 Various banking and executive positions with increasing responsibility with JPMorgan Chase, Michigan (successor to Bank One, First Chicago NBD and NBD Bank, N.A.) 1978 - 2005 | Based on her professional background and public company board experience, the following qualifications led the Board to conclude that Ms. Pierce should serve on AAM’s Board: her leadership experience as Senior Executive Vice President - Private Client Group & Regional Banking Director, and Chair of Huntington Bank Michigan, and as chief executive officer of FirstMerit Michigan and Charter One; the breadth of her corporate marketing and community development experience in her professional, civic and charitable endeavors; and her subject matter knowledge in the areas of strategic planning, finance, public relations, business development, human capital management and risk management. | |||||||
Directorships (not-for-profit) | ||||||||
–Downtown Detroit Partnership –Business Leaders for Michigan, Vice-Chair –Detroit Economic Club –Detroit Regional Chamber –Henry Ford Health System Foundation –The Parade Company –Wayne State University Foundation | ||||||||
Age: 63 | Other Public Company Directorship | |||||||
Director Since: 2018 | Penske Automotive Group since 2012 | |||||||
Committees: | Private Company Directorships | |||||||
Audit | Barton Malow Company since January 2013 ITC Holding Corp (subsidiary of Fortis, Inc.) since January 2017 | |||||||
Compensation | ||||||||
Election of Directors |
David C. Dauch | Chairman of the Board & Chief Executive Officer, AAM | |||||||
![]() | Current and Past Positions at AAM | Key Qualifications and Experience | ||||||
Chairman of the Board since August 2013 Chief Executive Officer since September 2012 President & Chief Executive Officer September 2012 - August 2015 President & Chief Operating Officer 2008 - 2012 Various positions of increasing responsibility 1995 - 2008 | Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Dauch should serve on AAM's Board: his leadership experience as an officer of AAM since 1998; the breadth of his management experience within, and knowledge of, AAM's global operations; and his subject matter knowledge in the areas of innovation and technology, manufacturing, strategic planning, human capital management and risk management. | |||||||
Directorships (not-for-profit) and Leadership Roles | ||||||||
Age: 57 | Other Company Directorship | –Business Leaders for Michigan –Detroit Economic Club –Detroit Regional Chamber –Great Lakes Council Boy Scouts of America –Boys & Girls Club of Southeastern Michigan –National Association of Manufacturers (NAM) –Miami University Business Advisory Council –General Motors Supplier Council –Detroit Mayor's Workforce Development Board –Michigan ESG Leadership Council | ||||||
Director Since: | Amerisure Companies since 2014 | |||||||
2013 (Chairman) | Previous Directorship | |||||||
2009 | Horizon Global Corporation 2015 - 2018 | |||||||
Committees: | ||||||||
Executive (Chairman) | ||||||||
Previous Directorships (not-for-profit) | ||||||||
–Original Equipment Suppliers Association (OESA) –FCA NAFTA Supplier Advisory Council |
Election of Directors |
William L. Kozyra | Retired President & Chief Executive Officer, TI Fluid Systems plc | |||||||
![]() | Past Positions | Key Qualifications and Experience | ||||||
President & Chief Executive Officer TI Fluid Systems plc (TI Automotive) (fluid storage, carrying and delivery systems) 2008 - December 2021 President & Chief Executive Officer Continental AG North America 1998 - 2008 Member of Executive Board Continental AG (DAX) 2006 - 2008 Vice President & General Manager Brake Products Division of Bosch Braking Systems 1995 - 1997 | Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Kozyra should serve on AAM's Board: his leadership experience as Chief Executive Officer of TI Fluid Systems plc; the breadth of his international experience with global companies in the automotive industry; and his subject matter knowledge in the areas of engineering, OEMs, manufacturing, innovation and technology, strategic planning, human capital management and risk management. | |||||||
Age: 64 | Former Public Company Directorship | Directorships (not-for-profit) and Leadership Roles | ||||||
Director Since: 2015 | ||||||||
Committees: | TI Fluid Systems plc (TI Automotive) 2008 - December 2021 | –General Motors Supplier Council –Ford Motor Company Top 100 Supplier Forum –Notre Dame Preparatory School –Automotive Hall of Fame –Boy Scouts of America, Detroit –University of Detroit Alumni Council –Society of Automotive Engineers | ||||||
Compensation | ||||||||
Nominating/Corp Gov | ||||||||
Technology | ||||||||
Peter D. Lyons | Counsel, Freshfields Bruckhaus Deringer US LLP | |||||||
![]() | Current and former Positions | Key Qualifications and Experience | ||||||
Counsel (since 2021) Partner (2014 - 2021) Freshfields Bruckhaus Deringer US LLP New York, NY since September 2014 | Based on his professional background and prior AAM Board experience, the following qualifications led the Board to conclude that Mr. Lyons should serve on AAM's Board: his experience as an attorney of major law firms since 1980; the breadth of his experience in advising global businesses on complex legal matters and transactions; and his subject matter knowledge in the areas of corporate governance, mergers and acquisitions, international business, human capital management and risk management. | |||||||
Age: 66 | ||||||||
Director Since: 2015 | ||||||||
Committees: | ||||||||
Compensation | ||||||||
Nominating/Corp Gov |
Election of Directors |
Corporate Governance |
Independence | Accountability | |||||||
–9 of 10 directors are independent –Lead Independent Director –Committees comprised of only independent directors (except Executive Committee) –Independent directors meet regularly in executive session without management present | –Proactive shareholder engagement program –Proxy access by-laws –Majority vote for directors in uncontested elections, –Candid Board and committee evaluation process –Commitment to Board refreshment |
Sound Practices | Risk Management | |||||||
–Board policy requires inclusion of women and minority candidates in the selection process for every open seat –Nominating/ Corporate Governance Committee oversight of sustainability program and human capital management, including DEI initiatives and succession planning –Director orientation and education –Stock ownership requirements for directors and executive officers –Hedging or pledging of AAM stock is prohibited | –Active Board oversight of AAM's overall risk management structure –Individual Board committees oversee risks related to their areas of responsibility –AAM has robust risk management processes throughout the Company –The Board and its committees receive regular updates from management on top enterprise risks, and the steps management has taken or will take to mitigate these risks |
Investor Communication Program | ![]() | Board Involvement | ![]() | Annual Shareholder Outreach Program | ||||||||||
–Senior management participation in conferences –One-on-one and group meetings –Site visits at manufacturing facilities and technical centers –Day-to-day interaction with Investor Relations | –Lead Independent Director/Compensation Committee Chair participates in outreach meetings –Board considers shareholder feedback and shareholder vote in decision-making –Board reviews disclosure enhancements | –Fall/Winter engagement with shareholders and proxy advisory firms –Led by CFO and Investor Relations Department –Board and management discuss shareholder feedback and the Board's response |
Shareholder Engagement Topics | |||||||||||
þ | Board involvement in ESG program | þ | Link between ESG performance and incentive compensation | ||||||||
þ | Diversity, equity and inclusion initiatives | þ | Selection process for Board candidates | ||||||||
þ | Human capital management | þ | Board oversight of risk | ||||||||
þ | Board refreshment and diversity | þ | Separation of Chairman and CEO roles | ||||||||
þ | Shareholder rights | þ | Classified Board |
Compensation Committee | |||||
2021 Meetings: 6 Members: James A. McCaslin (Chair) William L. Kozyra Peter D. Lyons Sandra E. Pierce Samuel Valenti III | –Recommends the CEO's compensation to the Board and determines the compensation of other executive officers | ||||
–Recommends incentive compensation and equity-based plans to the Board | |||||
–Approves executive officer compensation to ensure that it is designed to drive achievement of AAM's strategy and objectives while considering competitive market practices and shareholder interests | |||||
–Recommends non-employee director compensation to the Board | |||||
–Oversees management's risk assessment of the Company's policies and practices regarding compensation of executive officers and other associates | |||||
–Evaluates and approves corporate goals and objectives for executive officer compensation and evaluates performance in light of these criteria | |||||
–Oversees the preparation of the Compensation Discussion and Analysis (CD&A) and produces a Committee report for inclusion in our annual proxy statement | |||||
Nominating/Corporate Governance Committee | |||||
2021 Meetings: 4 Members: Elizabeth A. Chappell (Chair) William L. Kozyra Peter D. Lyons James A. McCaslin Herbert K. Parker Samuel Valenti III | –Identifies qualified individuals to serve on the Board and committees | ||||
–Reviews our Corporate Governance Guidelines and Code of Business Conduct and recommends changes as appropriate | |||||
–Oversees succession planning for executive officers and other key executive positions and supports the Board's succession/contingency planning process for the CEO | |||||
–Oversees evaluation of the Board and its committees | |||||
–Reviews committee charters and recommends any changes to the Board | |||||
–Oversees our sustainability program policies, strategies and performance and reviews sustainability/corporate responsibility matters with management | |||||
– Oversees human capital management, including diversity, equity and inclusion initiatives and succession planning | |||||
Technology Committee | |||||
2021 Meetings: 4 Members: John F. Smith (Chair) Elizabeth A. Chappell William L. Kozyra James A. McCaslin William P. Miller II | –Advises the Board and management on the Company's strategy for innovation and technology | ||||
–Maintains awareness of market demands for technology advancements relative to product, processes and systems | |||||
–Oversees and advises management regarding product, process and systems technologies | |||||
–Reviews technology opportunities as potential ways to increase productivity, efficiency, quality and warranty performance and to support the Company's goals and objectives | |||||
–Conducts strategy discussions with the full Board | |||||
–All Board members regularly attend Technology Committee meetings | |||||
Executive Committee | |||||
2021 Meetings: 1 Members: David C. Dauch (Chair) James A. McCaslin John F. Smith | –Acts on matters requiring Board action between meetings of the full Board | ||||
–Has authority to act on certain significant matters, limited by our by-laws | |||||
–All members other than Mr. Dauch are independent | |||||
Responsible Party | Primary Areas of Risk Oversight | |||||||
Full Board | Oversees overall risk management function and regularly receives reports from the chairs of individual Board committees on risk-related matters falling within each committee's oversight responsibilities. Also receives reports from management on particular risks facing the Company, including through the review of AAM's strategic plan. | |||||||
Audit Committee | Monitors financial, operational, and compliance risks by regularly reviewing reports by management, Internal Audit, Company advisors and the independent auditors. Regularly reviews risk management and risk assessment practices and related policies and evaluates potential risks related to internal controls over financial reporting. Oversees the Company's cyber security and other information technology risks, controls, procedures and programs, including mitigation processes. Receives quarterly reports from the Chief Information Officer on cyber security, data protection and business continuity programs, including AAM's monitoring, auditing, implementation and communication processes, controls and procedures. Monitors financial risks, including capital structure and liquidity risks, and reviews the policies and strategies for managing financial exposure and contingent liabilities. | |||||||
Compensation Committee | Monitors potential risks related to the design and administration of our compensation plans, policies and programs, including our performance-based compensation programs, to promote appropriate incentives that do not encourage executive officers to take unnecessary and/or excessive risks. | |||||||
Nominating / Corporate Governance Committee | Monitors potential risks related to our governance practices by, among other things, reviewing succession plans and performance evaluations of the Board and CEO and monitoring legal developments and trends regarding corporate governance practices. | |||||||
Technology Committee | Monitors risks associated with the Company's product portfolio and our innovation and technology plans. |
Independence | Tenure | ||||
90% | 10 | ||||
Independent | Average Years of Service | ||||
Age | Diversity | ||||
67 | 30% | ||||
Average Age | 2 Women 1 Racial Minority |
Compensation of Directors |
Compensation of Directors |
Annual retainer | $ | 110,000 | |||
Committee chair annual retainer: | |||||
Audit Committee chair | 20,000 | ||||
Compensation Committee chair | 15,000 | ||||
Other committee chair | 10,000 | ||||
Lead Independent Director annual retainer | 30,000 |
Compensation of Directors |
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Total ($) | ||||||||
Elizabeth A. Chappell | 120,000 | 125,006 | 245,006 | ||||||||
William L. Kozyra | 110,000 | 125,006 | 235,006 | ||||||||
Peter D. Lyons | 110,000 | 125,006 | 235,006 | ||||||||
James A. McCaslin | 155,000 | 125,006 | 280,006 | ||||||||
William P. Miller II | 130,000 | 125,006 | 255,006 | ||||||||
Herbert K. Parker | 110,000 | 125,006 | 235,006 | ||||||||
Sandra E. Pierce | 110,000 | 125,006 | 235,006 | ||||||||
John F. Smith | 120,000 | 125,006 | 245,006 | ||||||||
Samuel Valenti III | 110,000 | 125,006 | 235,006 |
Name | Restricted Stock Units Outstanding (#) | ||||
Elizabeth A. Chappell | 81,676 | ||||
William L. Kozyra | 74,435 | ||||
Peter D. Lyons | 78,447 | ||||
James A. McCaslin | 91,208 | ||||
William P. Miller II | 114,269 | ||||
Herbert K. Parker | 12,808 | ||||
Sandra E. Pierce | 50,862 | ||||
John F. Smith | 99,919 | ||||
Samuel Valenti III | 12,808 |
Beneficial Stock Ownership |
Beneficial Stock Ownership |
Shares Beneficially Owned | Percent of Shares Outstanding | |||||||
Greater Than 5% Owners | ||||||||
Blackrock, Inc.(1) | 17,850,020 | 15.60 | ||||||
55 East 52nd Street | ||||||||
New York, NY 10055 | ||||||||
The Vanguard Group(2) | 13,742,577 | 12.05 | ||||||
100 Vanguard Blvd. | ||||||||
Malvern, PA 19355 | ||||||||
Barrow Hanley Global Investors(3) | 6,797,272 | 5.96 | ||||||
2200 Ross Avenue, 31st Floor | ||||||||
Dallas, TX 75201 | ||||||||
Non-Employee Directors (4) | ||||||||
Elizabeth A. Chappell | 116,995 | * | ||||||
William L. Kozyra | 78,447 | * | ||||||
Peter D. Lyons | 83,447 | * | ||||||
James A. McCaslin | 118,419 | * | ||||||
William P. Miller II | 125,469 | * | ||||||
Herbert K. Parker | 80,862 | * | ||||||
Sandra E. Pierce | 50,862 | * | ||||||
John F. Smith | 111,419 | * | ||||||
Samuel Valenti III | 12,808 | * | ||||||
Named Executive Officers | ||||||||
David C. Dauch(5) | 974,802 | * | ||||||
Christopher J. May | 94,056 | * | ||||||
Michael K. Simonte | 284,914 | * | ||||||
Norman Willemse | 126,433 | * | ||||||
Michael J. Lynch(5) | 45,583 | * | ||||||
All Directors and Executive Officers as a Group (16 persons) | 2,385,548 | 2.1 |
Related Person Transactions Policy |
Advisory Vote on Executive Compensation |
Proposal 2: Advisory vote on Executive Compensation |
þ | The Board unanimously recommends a vote FOR the approval of the compensation of our named executive officers. |
Compensation Discussion and Analysis |
Compensation Discussion and Analysis |
Named Executive Officers |
Named Executive Officers | ||
David C. Dauch Chairman & Chief Executive Officer | ||
Christopher J. May Vice President & Chief Financial Officer | ||
Michael K. Simonte President | ||
Norman Willemse President Metal Forming | ||
Michael J. Lynch President Driveline |
Compensation Discussion and Analysis |
Executive Summary |
Sales | Adjusted EBITDA | ||||
$5.2B | $833M | ||||
16.2% of Sales | |||||
Cash Provided by Operating Activities | Reduced Total Debt by More Than | ||||
$538M | $350M | ||||
þ | Secured contracts valued at $10 billion for next-generation full-size truck axle programs with multiple customers | þ | Secured an agreement with REE to supply high-performance electric drive units | ||||||||
þ | Named as the sole supplier of front and rear pickup axles for GM's Oshawa truck plant | þ | Secured business with NIO supplying differentials for its next generation ePowertrain program | ||||||||
þ | AAM to supply TracRite electronic locking front differentials for the new HUMMER EV | þ | Won both PACE Partnership and Innovation Awards for our electric drive technology | ||||||||
þ | Supplying power transfer units for the all-new Ford Bronco Sport and Maverick | þ | CEO pledged to ACT ON supporting a more inclusive workplace | ||||||||
þ | Continued strong free cash flow generation and debt reduction | þ | Recognized as one of Forbes America's Best Large Employers |
Compensation Discussion and Analysis |
Strategic Business Objective | Alignment | Incentive Metric | ||||||
Continue to strengthen the balance sheet; provide funding for organic growth, research & development, and other capital priorities; reduce leverage | ![]() | Operational Cash Flow –2021 Annual Incentive Program (40% metric) | ||||||
Develop innovative technology, including electrification, and reinvest in research & development | Free Cash Flow –2021 LTI Performance Awards (100% metric of performance-based LTI) | |||||||
Achieve progress on ESG priorities, including DEI initiatives and environmental goals | Strategic Goals –2021 Annual Incentive Program (20% metric) | |||||||
Secure future replacement business and achieve profitable growth while retaining flexibility to address market changes | EBITDA margin –2021 Annual Incentive Program (40% metric) | |||||||
Drive productivity and financial performance | ||||||||
Relative TSR –2021 LTI Performance Awards (modifier -15% or +15%) | ||||||||
Create sustainable value for shareholders and align with our shareholders' experience |
Compensation Discussion and Analysis |
Compensation of Executive Officers |
Supports Business Strategy | Market Competitive | Aligned with Shareholder Interests | ||||||
–Programs utilize incentive metrics aligned with business strategy –Rigorous performance goals as key drivers of enterprise value creation –87% of CEO compensation is variable and at risk –The 2021 annual incentive program has a strategic goal component that also includes ESG performance and progress | –Attract and retain executive talent –Benchmark pay against a peer group of similarly sized companies –Target direct compensation at the 50th percentile –Incentive awards align with operational results and shareholder value creation | –Mix of annual and long-term incentive balances focus between short-term results and long-term share appreciation –Significant portion of LTI compensation paid in shares and performance-based –2021 say-on-pay vote of 93% –Stock ownership requirements | ||||||
Compensation Discussion and Analysis |
Component | Purpose | Characteristics | ||||||||||||
Base Salary | Based on level of responsibility, experience, individual performance and internal pay equity | Fixed cash component generally targeted at peer group median | ||||||||||||
Annual Incentive Compensation | Incentive to drive short-term performance aligned with strategic goals | Cash award that is at risk due to service and performance conditions | ||||||||||||
Long-Term Incentive Compensation | Incentive to drive strategic growth and value creation that supports retention of executives | A mix of performance shares, performance units and RSUs tied to financial and share performance that drives results aligned with shareholder interests | ||||||||||||
Retirement and Deferred Compensation | Provide income upon retirement | 401(k) and nonqualified defined benefit and deferred compensation plans | ||||||||||||
Perquisites | Limited supplement to total direct compensation | Primary benefit is a Company-provided vehicle with AAM product content |
Compensation Discussion and Analysis |
Comparative Peer Group for 2021 | ||||||||||||||
Adient plc Aptiv PLC BorgWarner Inc. Cooper-Standard Holdings Inc. Cooper Tire & Rubber Company Dana Incorporated Delphi Technologies PLC* | Flowserve Corporation Goodyear Tire & Rubber Company Lear Corporation Meritor, Inc. Navistar International Corporation OshKosh Corporation | Parker-Hannifin Corporation Rockwell Automation Tenneco Inc. Terex Corporation Trinity Industries, Inc. Visteon Corporation | ||||||||||||
*Removed from peer group in July 2021 due to acquisition |
Compensation Discussion and Analysis |
Direct Compensation Elements |
Base Salaries as of December 31, | 2021 | 2020 | % Change | ||||||||||||||
David C. Dauch | $1,150,000 | $1,150,000 | —% | ||||||||||||||
Christopher J. May | $ 550,000 | $ 550,000 | —% | ||||||||||||||
Michael K. Simonte | $ 750,000 | $ 750,000 | —% | ||||||||||||||
Norman Willemse | $ 600,000 | $ 575,000 | 4% | ||||||||||||||
Michael J. Lynch (effective November 1, 2021) | $ 550,000 | $ 455,000 | 21% |
Compensation Discussion and Analysis |
Adjusting to meet market challenges | Managing what we can control | |||||||
AAM's Strong 2021 Operating Performance | ||||||||
Advancing electrification across our product portfolio | Moving forward ESG objectives |
Key Achievements | ||
–Improved year-over-year Adjusted EBITDA Margin –Nearly 30% increase in Operational Cash Flow –Record adjusted free cash flow –Lowest capital expenditures as a % of sales in the last 20 years –Continued benefits from restructuring as evidenced by increased profits and cash flow | ||
Weighting | Threshold (Payout 0%) | Target (Payout 100%) | Maximum (Payout 200%) | 2021 Actual Performance(1) | % of Target Earned | 2021 Actual Payout(2) | |||||||||||||||||
EBITDA Margin | 40% | 12.0% | 15.30% | 16.25% | 16.16% | 191% | 76% | ||||||||||||||||
Operational Cash Flow | 40% | $400 million | $575 million | $625 million | $654 million | 200% | 80% |
Compensation Discussion and Analysis |
Target Opportunity (as a % of base salary) | |||||
David C. Dauch | 135% | ||||
Christopher J. May | 80% | ||||
Michael K. Simonte | 100% | ||||
Norman Willemse | 80% | ||||
Michael J. Lynch | 80% |
Compensation Discussion and Analysis |
Form of Award | |||||||||||
Performance Shares | Performance Units | RSUs | |||||||||
LTI Mix | 25% | 25% | 50% | ||||||||
Objective | Drive performance of strategic business objectives | Drive performance of strategic business objectives | Retain NEOs and provide shareholder alignment | ||||||||
Performance Measure | Free Cash Flow | Free Cash Flow | Continued service with AAM | ||||||||
Competitor Peer Group for Relative TSR | Adient plc Autoliv Inc. BorgWarner Inc. Dana Incorporated Lear Corporation Magna International Inc. Meritor Inc. Tenneco Inc. | Adient plc Autoliv Inc. BorgWarner Inc. Dana Incorporated Lear Corporation Magna International Inc. Meritor Inc. Tenneco Inc. | Not applicable | ||||||||
Award Payout Modifier of -15% or +15% | Relative TSR | Relative TSR | Not applicable | ||||||||
Performance / Vesting Period | Subject to achievement of performance measures over a 3-year period | Subject to achievement of performance measures over a 3-year period | Cliff vest on the 3rd anniversary of grant | ||||||||
Settlement | Common stock | Cash | Common stock |
Compensation Discussion and Analysis |
Free Cash Flow | Weighting | Threshold | Target | Maximum | ||||||||||
2021 | 20% | $200 million | $250 million | $300 million | ||||||||||
2022 | 20% | $200 million | $250 million | $300 million | ||||||||||
2023 | 20% | $200 million | $300 million | $400 million | ||||||||||
3-yr Cumulative | 40% | $600 million | $800 million | $1 billion | ||||||||||
Payout % | 50% | 100% | 200% |
TSR Percentile Rank | Threshold | Target | Maximum | |||||||||||
3-yr Cumulative | Below 25th | Between 25th - 74th | 75th and above | |||||||||||
Modifier | (15)% | —% | 15% |
2021 Target Long-Term Incentive Opportunity | 2020 Target Long-Term Incentive Opportunity | |||||||||||||
($)(1) | %(2) | ($)(1) | %(2) | |||||||||||
David C. Dauch | 5,750,000 | 500% | 5,750,000 | 500% | ||||||||||
Christopher J. May | 1,375,000 | 250% | 1,375,000 | 250% | ||||||||||
Michael K. Simonte | 2,250,000 | 300% | 2,250,000 | 300% | ||||||||||
Norman Willemse | 1,200,000 | 200% | 1,150,000 | 200% | ||||||||||
Michael J. Lynch | 682,500 | 150% | 682,500 | 150% |
Compensation Discussion and Analysis |
Amount of LTI Increase | Total 2021 LTI Opportunity | |||||||
$ | $ | |||||||
David C. Dauch | 575,000 | 6,325,000 | ||||||
Christopher J. May | 275,000 | 1,650,000 | ||||||
Michael J. Simonte | 375,000 | 2,625,000 | ||||||
Norman Willemse | 143,750 | 1,343,750 | ||||||
Michael J. Lynch | 113,750 | 796,250 |
Actual Performance | % of Target Shares / Units Earned | Award Weighting | Weighted Payout | ||||||||||||||||||||
Relative TSR | 22nd percentile | 0% | 50% | 0% | |||||||||||||||||||
Adjusted Free Cash Flow | $1,168.9(1) | 63% | 50% | 32% | |||||||||||||||||||
Final Payout as a % of Target | 32% |
Shareholder Alignment Realized pay(1) – 62% below target | ||
(1) Realized pay is determined by share price on the date of payment of the awards in March 2022. | ||
Compensation Discussion and Analysis |
2022 | 2021 | |||||||||||||
Base Salary | $1,250,000 | $1,150,000 | ||||||||||||
Target Annual Incentive | $1,875,000 | $1,552,500 | ||||||||||||
Target Long-Term Incentive | $7,187,500 | $5,750,000 |
Compensation Discussion and Analysis |
Indirect Compensation Elements |
Other Compensation Matters |
Compensation Discussion and Analysis |
Multiple of Base Salary | |||||
Chief Executive Officer | 6 | ||||
Chief Financial Officer; President | 3 | ||||
Other Executive Officers | 2 |
Compensation Committee Report |
Executive Compensation Tables |
Executive Compensation Tables |
Name and Principal Position | Year | Salary(2) ($) | Stock Awards(3) ($) | Non-Equity Incentive Plan Compen- sation(4) ($) | Change in Pension Value And Nonqualified Deferred Compensation Earnings(5) ($) | All Other Compen- sation(6) ($) | Total ($) | ||||||||||||||||
David C. Dauch(1) Chairman & Chief Executive Officer | 2021 | 1,150,000 | 4,879,478 | 4,238,325 | — | 908,657 | 11,176,460 | ||||||||||||||||
2020 | 991,875 | 4,442,271 | 2,794,500 | 152,010 | 463,772 | 8,844,428 | |||||||||||||||||
2019 | 1,150,000 | 4,818,898 | 745,200 | 266,426 | 682,727 | 7,663,251 | |||||||||||||||||
Christopher J. May Vice President & Chief Financial Officer | 2021 | 550,000 | 1,272,918 | 1,148,263 | — | 331,696 | 3,302,877 | ||||||||||||||||
2020 | 474,375 | 1,158,857 | 792,000 | 172,069 | 198,204 | 2,795,505 | |||||||||||||||||
2019 | 550,000 | 1,152,352 | 211,200 | 170,217 | 252,558 | 2,336,327 | |||||||||||||||||
Michael K. Simonte President | 2021 | 750,000 | 2,025,088 | 1,937,775 | — | 505,790 | 5,218,653 | ||||||||||||||||
2020 | 646,875 | 1,843,637 | 1,350,000 | 87,102 | 288,483 | 4,216,097 | |||||||||||||||||
2019 | 750,000 | 1,885,661 | 360,000 | 89,636 | 380,262 | 3,465,559 | |||||||||||||||||
Norman Willemse President Metal Forming | 2021 | 600,000 | 1,036,662 | 1,179,885 | 135,589 | 358,260 | 3,310,396 | ||||||||||||||||
2020 | 495,937 | 908,647 | 828,000 | 46,368 | 214,397 | 2,493,349 | |||||||||||||||||
2019 | 573,125 | 963,793 | 220,800 | 58,840 | 251,693 | 2,068,251 | |||||||||||||||||
Michael J. Lynch(7) President Driveline | 2021 | 470,837 | 614,293 | 1,004,294 | — | 280,903 | 2,370,327 |
Executive Compensation Tables |
Name | AAM Incentive Compensation Plan ($) | 2018 Omnibus Incentive Plan ($) | Total Non-Equity Incentive Plan Compensation ($) | ||||||||
David C. Dauch | 3,042,900 | 1,195,425 | 4,238,325 | ||||||||
Christopher J. May | 862,400 | 285,863 | 1,148,263 | ||||||||
Michael K. Simonte | 1,470,000 | 467,775 | 1,937,775 | ||||||||
Norman Willemse | 940,800 | 239,085 | 1,179,885 | ||||||||
Michael J. Lynch | 862,400 | 141,894 | 1,004,294 |
Name | Employer 401(k) Match Contributions(a) ($) | Retirement Contributions(b) ($) | Executive Life Insurance Premiums(c) ($) | Company-Provided Vehicles(d) ($) | Other(e) ($) | Total ($) | ||||||||||||||
David C. Dauch | 14,500 | 873,100 | 15,852 | — | 5,205 | 908,657 | ||||||||||||||
Christopher J. May | 14,100 | 287,500 | 3,241 | 25,884 | 971 | 331,696 | ||||||||||||||
Michael K. Simonte | 14,500 | 458,000 | 9,303 | 21,731 | 2,256 | 505,790 | ||||||||||||||
Norman Willemse | 13,979 | 306,800 | 9,395 | 24,480 | 3,606 | 358,260 | ||||||||||||||
Michael J. Lynch | 14,500 | 238,900 | 8,423 | 18,109 | 971 | 280,903 |
Name | Retirement Contributions under the 401(k) Plan ($) | Employer ERSP Contributions ($) | Total ($) | ||||||||
David C. Dauch | 14,500 | 858,600 | 873,100 | ||||||||
Christopher J. May | 14,500 | 273,000 | 287,500 | ||||||||
Michael K. Simonte | 14,500 | 443,500 | 458,000 | ||||||||
Norman Willemse | 14,500 | 292,300 | 306,800 | ||||||||
Michael J. Lynch | 14,500 | 224,400 | 238,900 |
Executive Compensation Tables |
Estimated Future Payouts under Non Equity Incentive Plan Awards(1) | Estimated Future Payouts under Equity Incentive Plan Awards(2) | |||||||||||||||||||||||||||||||
Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | Grant Date Fair Value of Stock and Option Awards(4) ($) | ||||||||||||||||||||||
David C. Dauch | ||||||||||||||||||||||||||||||||
Annual Incentive | — | — | — | 1,552,500 | 3,105,000 | — | — | — | — | — | ||||||||||||||||||||||
Performance Units (Free Cash Flow) | 3/1/2021 | 2/3/2021 | 672,031 | 1,581,250 | 3,636,875 | — | — | — | — | — | ||||||||||||||||||||||
Performance Shares (Free Cash Flow) | 3/1/2021 | 2/3/2021 | — | — | — | 64,806 | 152,484 | 350,713 | — | 1,716,970 | ||||||||||||||||||||||
Restricted Stock Units | 3/1/2021 | 2/3/2021 | — | — | — | — | — | — | 304,967 | 3,162,508 | ||||||||||||||||||||||
Christopher J. May | ||||||||||||||||||||||||||||||||
Annual Incentive | — | — | — | 440,000 | 880,000 | — | — | — | — | — | ||||||||||||||||||||||
Performance Units (Free Cash Flow) | 3/1/2021 | 2/3/2021 | 175,313 | 412,500 | 948,750 | — | — | — | — | — | ||||||||||||||||||||||
Performance Shares (Free Cash Flow) | 3/1/2021 | 2/3/2021 | — | — | — | 16,906 | 39,779 | 91,492 | — | 447,912 | ||||||||||||||||||||||
Restricted Stock Units | 3/1/2021 | 2/3/2021 | — | — | — | — | — | — | 79,557 | 825,006 | ||||||||||||||||||||||
Michael K. Simonte | ||||||||||||||||||||||||||||||||
Annual Incentive | — | — | — | 750,000 | 1,500,000 | — | — | — | — | — | ||||||||||||||||||||||
Performance Units (Free Cash Flow) | 3/1/2021 | 2/3/2021 | 278,906 | 656,250 | 1,509,375 | — | — | — | — | — | ||||||||||||||||||||||
Performance Shares (Free Cash Flow) | 3/1/2021 | 2/3/2021 | — | — | — | 26,896 | 63,284 | 145,553 | — | 712,578 | ||||||||||||||||||||||
Restricted Stock Units | 3/1/2021 | 2/3/2021 | — | — | — | — | — | — | 126,568 | 1,312,510 | ||||||||||||||||||||||
Norman Willemse | ||||||||||||||||||||||||||||||||
Annual Incentive | — | — | — | 480,000 | 960,000 | — | — | — | — | — | ||||||||||||||||||||||
Performance Units (Free Cash Flow) | 3/1/2021 | 2/3/2021 | 142,774 | 335,938 | 772,657 | — | — | — | — | — | ||||||||||||||||||||||
Performance Shares (Free Cash Flow) | 3/1/2021 | 2/3/2021 | — | — | — | 13,768 | 32,396 | 74,511 | — | 364,779 | ||||||||||||||||||||||
Restricted Stock Units | 3/1/2021 | 2/3/2021 | — | — | — | — | — | — | 64,791 | 671,883 | ||||||||||||||||||||||
Michael J. Lynch | ||||||||||||||||||||||||||||||||
Annual Incentive | ` | — | — | 440,000 | 880,000 | — | — | — | — | — | ||||||||||||||||||||||
Performance Units (Free Cash Flow) | 3/1/2021 | 2/3/2021 | 84,602 | 199,064 | 457,847 | — | — | — | — | — | ||||||||||||||||||||||
Performance Shares (Free Cash Flow) | 3/1/2021 | 2/3/2021 | — | — | — | 8,159 | 19,197 | 44,153 | — | 216,158 | ||||||||||||||||||||||
Restricted Stock Units | 3/1/2021 | 2/3/2021 | — | — | — | — | — | — | 38,393 | 398,135 |
Executive Compensation Tables |
Executive Compensation Tables |
CEO Employment Agreement | President Employment Agreement | |||||||||||||
Base Salary | $1,150,000 for 2021 | $750,000 for 2021 | ||||||||||||
Annual Incentive | Participation in the annual incentive plan for executive officers; Target opportunity of 135% of base salary for 2021 | Participation in the annual incentive plan for executive officers; Target opportunity of 100% of base salary for 2021 | ||||||||||||
Long-Term Incentive | Participation in LTI plans for executive officers; Target opportunity of 500% for 2021 | Participation in LTI plans for executive officers; Target opportunity of 300% for 2021 | ||||||||||||
Other Benefits | Participation in plans applicable to executive officers; Retiree medical, dental and vision coverage equivalent to the benefit levels offered in the Company's group health care plans for salaried associates as of September 1, 2012 | Participation in plans applicable to executive officers | ||||||||||||
Term | Initial term expired August 31, 2015; Additional one-year extensions unless either party provides 60 days' written notice of intent not to renew | Initial term expired July 31, 2018; Additional one-year extensions unless either party provides 60 days' written notice of intent not to renew |
Executive Compensation Tables |
Free Cash Flow | Weighting | Threshold | Target | Maximum | ||||||||||
2021 | 20% | $200 million | $250 million | $300 million | ||||||||||
2022 | 20% | $200 million | $250 million | $300 million | ||||||||||
2023 | 20% | $200 million | $300 million | $400 million | ||||||||||
3-yr Cumulative | 40% | $600 million | $800 million | $1 billion | ||||||||||
Payout % | 50% | 100% | 200% |
TSR Percentile Rank | Threshold | Target | Maximum | |||||||||||
3-yr Cumulative | Below 25th | Between 25th - 74th | 75th and above | |||||||||||
Modifier | (15)% | —% | 15% |
Executive Compensation Tables |
Stock Awards | ||||||||||||||
Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | 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 ($)(7) | ||||||||||
David C. Dauch | 121,127(2) | 1,130,115 | 627,579(5) | 5,855,312 | ||||||||||
492,218(3) | 4,592,394 | 304,968(6) | 2,845,351 | |||||||||||
304,967(4) | 2,845,342 | |||||||||||||
Christopher J. May | 28,965(2) | 270,243 | 163,717(5) | 1,527,480 | ||||||||||
128,405(3) | 1,198,019 | 79,558(6) | 742,276 | |||||||||||
79,557(4) | 742,267 | |||||||||||||
Michael K. Simonte | 47,398(2) | 442,223 | 260,459(5) | 2,430,082 | ||||||||||
204,281(3) | 1,905,942 | 126,568(6) | 1,180,879 | |||||||||||
126,568(4) | 1,180,879 | |||||||||||||
Norman Willemse | 24,225(2) | 226,019 | 128,369(5) | 1,197,683 | ||||||||||
100,681(3) | 939,354 | 64,792(6) | 604,509 | |||||||||||
64,791(4) | 604,500 | |||||||||||||
Michael J. Lynch | 14,378(2) | 134,147 | 79,008(5) | 737,145 | ||||||||||
61,966(3) | 578,143 | 38,394(6) | 358,216 | |||||||||||
38,393(4) | 358,207 | |||||||||||||
Executive Compensation Tables |
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | ||||||
David C. Dauch | 136,904 | 1,436,123 | ||||||
Christopher J. May | 32,739 | 343,432 | ||||||
Michael K. Simonte | 53,572 | 561,970 | ||||||
Norman Willemse | 25,239 | 264,757 | ||||||
Michael J. Lynch | 16,251 | 170,473 |
Executive Compensation Tables |
Name | Plan Name | Number of Years of Credited Service(1) (#) | Present Value of Accumulated Benefit(2) ($) | ||||||||
David C. Dauch(3) | AAM Pension Plan | 11.5000 | 551,986 | ||||||||
AAM Supplemental Executive Retirement Program | 22.8333 | 8,389,552 | |||||||||
Christopher J. May | AAM Pension Plan | 12.5000 | 256,586 | ||||||||
AAM Supplemental Executive Retirement Program | 23.8333 | 1,527,327 | |||||||||
Michael K. Simonte(3) | AAM Pension Plan | 8.0833 | 367,044 | ||||||||
AAM Supplemental Executive Retirement Program | 19.4166 | 3,132,456 | |||||||||
Norman Willemse(4) | Albion Pension Plan(5) | 6.3333 | 550,100 | ||||||||
AAM Supplemental Executive Retirement Program | 17.0000 | 1,428,071 | |||||||||
Michael J. Lynch(3) | AAM Pension Plan | 10.3333 | 247,959 | ||||||||
AAM Supplemental Executive Retirement Program | 21.6666 | 1,474,383 |
Executive Compensation Tables |
Executive Compensation Tables |
Name | Plan | Registrant contributions In Last FY(1) ($) | Aggregate Earnings In Last FY(2) ($) | Aggregate Withdrawals Distributions ($) | Aggregate Balance at Last FYE ($) | ||||||||||||
David C. Dauch | EDC | — | — | — | — | ||||||||||||
ERSP | 858,600 | 247,551 | — | 2,439,569 | |||||||||||||
Christopher J. May | EDC | — | — | — | — | ||||||||||||
ERSP | 273,000 | 31,354 | — | 692,439 | |||||||||||||
Michael K. Simonte | EDC | — | — | — | — | ||||||||||||
ERSP | 443,500 | 18,246 | — | 1,013,650 | |||||||||||||
Norman Willemse | EDC | — | 5,410 | — | 124,264 | ||||||||||||
ERSP | 292,300 | 33,430 | — | 726,260 | |||||||||||||
Michael J. Lynch | EDC | — | — | — | — | ||||||||||||
ERSP | 224,400 | 16,591 | — | 572,881 |
Executive Compensation Tables |
Name of Fund | Rate of Return | Name of Fund | Rate of Return | |||||||||||
PIMCO Total Return Fund | (0.84) | % | Hartford International Opportunities Fund | 7.60 | % | |||||||||
PIMCO High Yield Fund | 4.05 | % | Victory Sycamore Established Value Fund | 31.95 | % | |||||||||
BNY Mellon International Bond Fund | (6.79) | % | FIAM Blend Target Date 2010 Fund | 5.28 | % | |||||||||
Vanguard Total Bond Market Index Fund | (1.65) | % | FIAM Blend Target Date 2015 Fund | 6.90 | % | |||||||||
Fidelity 500 Index Fund | 28.69 | % | FIAM Blend Target Date 2020 Fund | 8.54 | % | |||||||||
MFS Value Fund | 25.42 | % | FIAM Blend Target Date 2025 Fund | 9.79 | % | |||||||||
Vanguard FTSE Social Index Fund | 27.77 | % | FIAM Blend Target Date 2030 Fund | 11.17 | % | |||||||||
Fidelity Growth Company Fund | 22.73 | % | FIAM Blend Target Date 2035 Fund | 14.01 | % | |||||||||
Fidelity Low-Priced Stock Fund | 24.63 | % | FIAM Blend Target Date 2040 Fund | 16.11 | % | |||||||||
Eaton Vance Atlanta Capital SMID Fund | 22.25 | % | FIAM Blend Target Date 2045 Fund | 16.16 | % | |||||||||
Vanguard Extended Market Index Fund | 12.47 | % | FIAM Blend Target Date 2050 Fund | 16.15 | % | |||||||||
American Beacon Small Cap Value Fund | 28.15 | % | FIAM Blend Target Date 2055 Fund | 16.17 | % | |||||||||
Janus Henderson Triton Fund | 7.21 | % | FIAM Blend Target Date 2060 Fund | 16.16 | % | |||||||||
Fidelity Diversified International Fund | 13.35 | % | FIAM Blend Target Date 2065 Fund | 16.24 | % | |||||||||
Fidelity International Index Fund | 11.45 | % | FIAM Blend Target Date Income Fund | 2.87 | % | |||||||||
Harding Loevner Institutional Emerging Market Fund | (3.40) | % | Mass Mutual Diversified SAGIC Fund | 1.74 | % |
Executive Compensation Tables |
Executive Compensation Tables |
Executive Compensation Tables |
Executive Compensation Tables |
David C. Dauch | For Good Reason Resignation ($) | Without Cause Termination ($) | Disability Retirement ($) | Retirement ($) | Termination Upon a Change in Control(1) ($) | ||||||||||||
Compensation: | |||||||||||||||||
Severance | 2,300,000(2) | 2,300,000(2) | — | — | 3,450,000(3) | ||||||||||||
Annual Incentive | 6,147,900(2) | 6,147,900(2) | 3,042,900(4) | 3,042,900(4) | 7,700,400(3) | ||||||||||||
Long Term Incentives: | |||||||||||||||||
RSUs(5) | — | — | 8,567,851 | 4,664,167 | 8,567,851 | ||||||||||||
2020 Performance Share Awards(6) | — | 2,296,200 | 2,296,200 | 2,296,200 | 3,444,300 | ||||||||||||
2020 Performance Unit Awards(7) | — | 1,265,000 | 1,265,000 | 1,265,000 | 1,897,500 | ||||||||||||
2021 Performance Share Awards(8) | — | 474,225 | 474,225 | 474,225 | 1,422,676 | ||||||||||||
2021 Performance Unit Awards(9) | — | 527,083 | 527,083 | 527,083 | 1,581,250 | ||||||||||||
Other Benefits: | |||||||||||||||||
Retirement Plans(10) | 551,986 | 551,986 | 689,896 | 436,707 | 551,986 | ||||||||||||
SERP(11) | 8,389,552 | 8,389,552 | 8,389,552 | 8,389,552 | 8,389,552 | ||||||||||||
Welfare Benefit(12) | — | — | 1,085,825 | 1,085,825 | — | ||||||||||||
Executive Retirement Savings Plan(13) | 2,439,569 | 2,439,569 | 2,439,569 | 2,439,569 | 2,439,569 | ||||||||||||
Executive Deferred Compensation Plan | — | — | — | — | — | ||||||||||||
Health Care(14) | 48,038 | 48,038 | — | — | 74,180 | ||||||||||||
Disability | — | — | — | — | — | ||||||||||||
Life Insurance | — | — | — | — | — | ||||||||||||
Outplacement Services(15) | 50,000 | 50,000 | — | — | 50,000 | ||||||||||||
Total | 19,927,045 | 24,489,553 | 28,778,101 | 24,621,228 | 39,569,264 |
Christopher J. May | For Good Reason Resignation ($) | Without Cause Termination ($) | Disability Retirement(18) ($) | Retirement ($) | Termination Upon a Change in Control(1) ($) | ||||||||||||
Compensation: | |||||||||||||||||
Severance | 825,000(16) | 825,000(16) | — | — | 1,100,000(17) | ||||||||||||
Annual Incentive | 1,522,400(16) | 1,522,400(16) | 862,400(4) | — | 1,742,400(17) | ||||||||||||
Long Term Incentives: | |||||||||||||||||
RSUs(5) | — | — | 2,210,529 | — | 2,210,529 | ||||||||||||
2020 Performance Share Awards(6) | — | 599,011 | 599,011 | — | 898,516 | ||||||||||||
2020 Performance Unit Awards(7) | — | 330,000 | 330,000 | — | 495,000 | ||||||||||||
2021 Performance Share Awards(8) | — | 123,713 | 123,713 | — | 371,138 | ||||||||||||
2021 Performance Unit Awards(9) | — | 137,500 | 137,500 | — | 412,500 | ||||||||||||
Other Benefits: | |||||||||||||||||
Retirement Plans | — | — | — | — | — | ||||||||||||
SERP | — | — | — | — | — | ||||||||||||
Welfare Benefit | — | — | — | — | — | ||||||||||||
Executive Retirement Savings Plan | — | — | — | — | — | ||||||||||||
Executive Deferred Compensation Plan | — | — | — | — | — | ||||||||||||
Health Care(19) | 30,519 | 30,519 | 50,865 | — | 40,692 | ||||||||||||
Disability(20) | — | — | 3,767,045 | — | — | ||||||||||||
Life Insurance(21) | — | — | 106,439 | — | — | ||||||||||||
Outplacement Services(22) | 20,000 | 20,000 | — | — | 30,000 | ||||||||||||
Total | 2,397,919 | 3,588,143 | 8,187,502 | — | 7,300,775 |
Executive Compensation Tables |
Michael K. Simonte | For Good Reason Resignation ($) | Without Cause Termination ($) | Disability Retirement ($) | Retirement ($) | Termination Upon a Change in Control(1) ($) | ||||||||||||
Compensation: | |||||||||||||||||
Severance | 1,500,000(2) | 1,500,000(2) | — | — | 1,500,000(3) | ||||||||||||
Annual Incentive | 2,970,000(2) | 2,970,000(2) | 1,470,000(4) | 1,470,000(4) | 2,970,000(3) | ||||||||||||
Long Term Incentives: | |||||||||||||||||
RSUs(5) | — | — | 3,529,045 | 1,910,420 | 3,529,045 | ||||||||||||
2020 Performance Share Awards(6) | — | 952,972 | 952,972 | 952,972 | 1,429,459 | ||||||||||||
2020 Performance Unit Awards(7) | — | 525,000 | 525,000 | 525,000 | 787,500 | ||||||||||||
2021 Performance Share Awards(8) | 196,813 | 196,813 | 196,813 | 590,440 | |||||||||||||
2021 Performance Unit Awards(9) | — | 218,750 | 218,750 | 218,750 | 656,250 | ||||||||||||
Other Benefits: | |||||||||||||||||
Retirement Plans(10) | 367,044 | 367,044 | 452,294 | 291,954 | 367,044 | ||||||||||||
SERP(11) | 3,132,456 | 3,132,456 | 3,132,456 | 3,132,456 | 3,132,456 | ||||||||||||
Welfare Benefit(12) | — | — | 359,514 | 359,514 | — | ||||||||||||
Executive Retirement Savings Plan(13) | 1,013,650 | 1,013,650 | 1,013,650 | 1,013,650 | 1,013,650 | ||||||||||||
Executive Deferred Compensation Plan | — | — | — | — | — | ||||||||||||
Health Care(14) | 48,037 | 48,037 | — | — | 48,037 | ||||||||||||
Disability | — | — | — | — | — | ||||||||||||
Life Insurance | — | — | — | — | — | ||||||||||||
Outplacement Services(15) | 30,000 | 30,000 | — | — | 30,000 | ||||||||||||
Total | 9,061,187 | 10,954,722 | 11,850,494 | 10,071,529 | 16,053,881 |
Norman Willemse | For Good Reason Resignation ($) | Without Cause Termination ($) | Disability Retirement ($) | Retirement ($) | Termination Upon a Change in Control(1) ($) | ||||||||||||
Compensation: | |||||||||||||||||
Severance | 900,000(16) | 900,000(16) | — | — | 1,200,000(17) | ||||||||||||
Annual Incentive | 1,660,800(16) | 1,660,800(16) | 940,800(4) | 940,800(4) | 1,900,800(17) | ||||||||||||
Long Term Incentives: | |||||||||||||||||
RSUs(5) | — | — | 1,769,873 | 955,429 | 1,769,873 | ||||||||||||
2020 Performance Share Awards(6) | — | 469,678 | 469,678 | 469,678 | 704,518 | ||||||||||||
2020 Performance Unit Awards(7) | — | 258,750 | 258,750 | 258,750 | 388,125 | ||||||||||||
2021 Performance Share Awards(8) | — | 100,752 | 100,752 | 100,752 | 302,255 | ||||||||||||
2021 Performance Unit Awards(9) | — | 111,979 | 111,979 | 111,979 | 335,938 | ||||||||||||
Other Benefits: | |||||||||||||||||
Retirement Plans(10) | 550,100 | 550,100 | 375,894 | 550,100 | 550,100 | ||||||||||||
SERP(11) | 1,428,071 | 1,428,071 | 1,428,071 | 1,428,071 | 1,428,071 | ||||||||||||
Welfare Benefit(12) | — | — | 339,230 | 339,230 | — | ||||||||||||
Executive Retirement Savings Plan(13) | 726,260 | 726,260 | 726,260 | 726,260 | 726,260 | ||||||||||||
Executive Deferred Compensation Plan(23) | 124,264 | 124,264 | 124,264 | 124,264 | 124,264 | ||||||||||||
Health Care(19) | 32,188 | 32,188 | — | — | 42,918 | ||||||||||||
Disability | — | — | — | — | — | ||||||||||||
Life Insurance | — | — | — | — | — | ||||||||||||
Outplacement Services(22) | 20,000 | 20,000 | — | — | 30,000 | ||||||||||||
Total | 5,441,683 | 6,382,842 | 6,645,551 | 6,005,313 | 9,503,122 |
Executive Compensation Tables |
Michael J. Lynch | For Good Reason Resignation ($) | Without Cause Termination ($) | Disability Retirement ($) | Retirement ($) | Termination Upon a Change in Control(1) ($) | ||||||||||||
Compensation: | |||||||||||||||||
Severance | 825,000(16) | 825,000(16) | — | — | 1,100,000(17) | ||||||||||||
Annual Incentive | 1,522,400(16) | 1,522,400(16) | 862,400(4) | 862,400(4) | 1,742,400(17) | ||||||||||||
Long Term Incentives: | |||||||||||||||||
RSUs(5) | — | — | 1,070,496 | 579,505 | 1,070,496 | ||||||||||||
2020 Performance Share Awards(6) | — | 289,075 | 289,075 | 289,075 | 433,612 | ||||||||||||
2020 Performance Unit Awards(7) | — | 159,251 | 159,251 | 159,251 | 238,877 | ||||||||||||
2021 Performance Share Awards(8) | — | 59,703 | 59,703 | 59,703 | 179,108 | ||||||||||||
2021 Performance Unit Awards(9) | — | 66,355 | 66,355 | 66,355 | 199,064 | ||||||||||||
Other Benefits: | |||||||||||||||||
Retirement Plans(10) | 247,959 | 247,959 | 316,313 | 197,241 | 247,959 | ||||||||||||
SERP(11) | 1,474,383 | 1,474,383 | 1,474,383 | 1,474,383 | 1,474,383 | ||||||||||||
Welfare Benefit(12) | — | — | 268,087 | 268,087 | — | ||||||||||||
Executive Retirement Savings Plan(13) | 572,881 | 572,881 | 572,881 | 572,881 | 572,881 | ||||||||||||
Executive Deferred Compensation Plan | — | — | — | — | — | ||||||||||||
Health Care(19) | 36,028 | 36,028 | — | — | 48,037 | ||||||||||||
Disability | — | — | — | — | — | ||||||||||||
Life Insurance | — | — | — | — | — | ||||||||||||
Outplacement Services(22) | 20,000 | 20,000 | — | — | 30,000 | ||||||||||||
Total | 4,698,651 | 5,273,035 | 5,138,944 | 4,528,881 | 7,336,817 |
Executive Compensation Tables |
CEO Pay Ratio |
Ratification of Independent Registered Public Accounting Firm |
Proposal 3: Ratification of Appointment of Independent | ||
Registered Public Accounting Firm for 2022 |
þ | The Board unanimously recommends a vote FOR ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2022. |
Pre-Approval Policy and Auditor Fees |
Policy for Pre-Approval of Audit and Non-Audit Services |
Independent Registered Public Accounting Firm's Fees |
December 31, | ||||||||
2021 | 2020 | |||||||
Audit Fees(1) | $ | 4,781,790 | $ | 4,548,252 | ||||
Audit Related Fees(2) | 195,200 | 165,175 | ||||||
Tax Fees(3) | 477,000 | 482,000 | ||||||
Total | $ | 5,453,990 | $ | 5,195,427 |
Report of the Audit Committee |
Report of the Audit Committee |
Voting and Meeting Information |
Additional Information |
By Internet | By Telephone | By Mail | During Meeting | |||||||||||||||||
Before the meeting, go to www.envisionreports.com/axl and follow the instructions. You will need the control number on your proxy card or voter instruction form. | Call the number shown on your proxy card or voter instruction form. You will need the control number on your proxy card or voting instruction form. | Complete, sign and date the proxy card or voting instruction form and return it in the envelope provided. | To vote during the virtual meeting, go to www.envisionreports.com/axl for instructions.You will need the control number on your proxy card or voter instruction form. | |||||||||||||||||
Voting and Meeting Information |
Voting and Meeting Information |
Additional Information |
Annual Report |
Electronic Delivery of Proxy Materials |
2023 Stockholder Proposals and Nominations |
Additional Information |
Cost of Solicitation |
Appendix A - Non-GAAP Reconciliation |
2021 Annual Incentive Performance Metrics | |||||
EBITDA Margin: | |||||
(in millions) | EBITDA | ||||
Net income | $ | 5.9 | |||
Interest expense | 195.2 | ||||
Income tax benefit | (4.7) | ||||
Depreciation and amortization | 544.3 | ||||
EBITDA | $ | 740.7 | |||
Restructuring and acquisition-related costs | 49.4 | ||||
Debt refinancing and redemption costs | 34.0 | ||||
Loss on sale of business | 2.7 | ||||
Unrealized gain on equity securities | (24.4) | ||||
Pension settlements | 42.3 | ||||
Non-recurring items: | |||||
Facility fire charges, net of recoveries | (11.4) | ||||
Adjusted EBITDA | $ | 833.3 | |||
Net Sales, as reported | $ | 5,156.6 | |||
Adjusted EBITDA margin | 16.16 | % |
Twelve Months Ended December 31, 2021 | |||||
Operational Cash Flow: | |||||
(in millions) | |||||
Adjusted EBITDA | $ | 833.3 | |||
Purchases of property, plant and equipment | (181.2) | ||||
Proceeds from sale of property, plant and equipment | 2.0 | ||||
Operational Cash Flow | $ | 654.1 |
Appendix A - Non-GAAP Reconciliation |
2019 - 2021 Long-term Incentive Performance Metric | Twelve Months Ended | ||||||||||||||||
December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Free Cash Flow and Adjusted Free Cash Flow: | (in millions) | ||||||||||||||||
Net cash provided by operating activities | $ | 538.4 | $ | 454.7 | $ | 559.6 | |||||||||||
Purchases of property, plant and equipment | (181.2) | (215.6) | (433.3) | ||||||||||||||
Proceeds from sale of property, plant and equipment | 2.0 | 1.7 | 5.0 | ||||||||||||||
Free Cash Flow | $ | 359.2 | $ | 240.8 | $ | 131.3 | |||||||||||
Restructuring and acquisition-related costs | 63.7 | 70.6 | 76.5 | ||||||||||||||
Adjustments under LTI plan: | |||||||||||||||||
Impact of financial performance for divestitures not included in target(1) | 76.8 | 65.5 | — | ||||||||||||||
Impact of GM work stoppage(2) | — | — | 84.5 | ||||||||||||||
Adjusted Free Cash Flow under LTI Plan | $ | 499.7 | $ | 376.9 | $ | 292.3 | |||||||||||
Three-year cumulative adjusted Free Cash Flow | $ | 1,168.9 |