Information about our Board and the Nominees

Our restated certificate of incorporation divides our Board into three classes. The Board currently consists of 11 directors with three directors in Class II and four directors in each of Classes I and III.

The term of office of the Class II directors expires at the Annual Meeting. There are three Class II nominees standing for election at the Annual Meeting. The term of the Class II directors elected at the Annual Meeting ends at the 2024 annual meeting of stockholders. The term of the Class III directors ends at the 2022 annual meeting of stockholders, and the term of the Class I directors ends at the 2023 annual meeting of stockholders.

Proxies cannot be voted for the election of more than three persons to our Board at the Annual Meeting.

Each nominee named in this proxy statement has consented to being named in this proxy statement and to serve if elected. If any nominee is unable to serve or for good cause will not serve, the shares represented by the proxies will be voted for the person, if any, designated by our Board to replace such nominee. However, CMC has no reason to believe that any nominee will be unavailable. All of the director nominees, as well as the continuing directors, plan to attend this year’s virtual Annual Meeting.

Changes to our Board During 2020

In connection with our Board’s succession planning, the Nominating and Corporate Governance Committee initiated a search process to select qualified director candidates. The Nominating and Corporate Governance Committee took into account many factors including, but not limited to, requirements for independence; the individual’s general understanding of the various disciplines relevant to the success of our Company as a large globally-operated, publicly-traded company in today’s business environment; each candidate’s understanding of the Company’s businesses and the metals industry and markets; the individual’s professional expertise and educational background; the individual’s ethics, integrity, values, inquisitive and objective perspectives, practical wisdom, judgment and availability; and other factors that promote diversity of thought, views and experience.

Selected candidates were evaluated and interviewed through a series of meetings with directors and executive management. The Nominating and Corporate Governance Committee evaluated potential candidates in the context of our Board as a whole, with the objective of recommending a director candidate that would be the most likely to achieve the success of the business and represent stockholder interests through the exercise of sound judgment. A background review of the ultimate candidate was conducted by an independent professional agency specializing in the performance of such background reviews.

As a result of this process, the Nominating and Corporate Governance Committee selected Peter R. Matt from a slate of qualified candidates for election to our Board and recommended him to our Board for appointment. On January 8, 2020, our Board voted to increase the size of our Board from ten persons to 11 persons (and to increase the size of Class I from three to four directors), and our Board appointed Mr. Matt as a Class I director, effective June 16, 2020.

In connection with the mandatory retirement policy in the Company’s Corporate Governance Guidelines, Rick J. Mills, a Class II director, will retire at the Annual Meeting after nine years of distinguished service to the Company. As a consequence, our Board has not nominated Mr. Mills for reelection as a Class II director. After Mr. Mills’ retirement, without reclassifying the directors or adding new directors to fill the vacancy caused by his retirement, the Board would have ten directors, consisting of four Class I directors, two Class II directors and four Class III directors. Because the Company’s Restated Certificate of Incorporation, as amended, requires that the three classes of directors be nearly as equal as possible, the Board voted to reclassify the directors into nearly equal classes consisting of three Class I directors, three Class II directors and four Class III directors by (i) nominating Vicki L. Avril-Groves, a current Class I director, on the recommendation of the Nominating and Corporate Governance Committee, for election at the Annual Meeting as a Class II director, and (ii) upon the election of Ms. Avril-Groves as a Class II director, accepting the contemporaneous resignation of Ms. Avril-Groves as a Class I director and reducing the number of Class I directors to three. The seat on our Board currently held by Mr. Mills will be eliminated concurrently with Mr. Mills’ retirement at the Annual Meeting, without any further action of the Company or by our Board, and at such time the size of our Board will be automatically reduced from 11 persons to ten persons.

 

Commercial Metals Company    2020 Proxy Statement    15

PROPOSAL 1 — ELECTION OF DIRECTORS

 

The following table sets forth information about the nominees and the continuing directors.

 

 

Director Nominees

 

 

Class II – Term to Expire in 2024

 

Vicki L. Avril-Groves   From 2008 to 2013, Ms. Avril-Groves served as President and CEO of IPSCO Tubulars, Inc., a manufacturer of tubular products. Ms. Avril-Groves served in various capacities at IPSCO from 2004 to 2007, including Senior Vice President of IPSCO Tubular Operations, and Senior Vice President and CFO. She served as Senior Vice President and CFO of Wallace Computer Services, Inc. from 2001 to 2003. Prior thereto, Ms. Avril-Groves served in a variety of roles at Inland Steel Industries Inc. from 1976 to 1998 before being named Vice President Finance and CFO in 1998.   Other Current Public Directorships • Greif, Inc. • Finning International, Inc.   Former Public Directorships • Global Brass and Copper Holdings, Inc.		Retired – Former President and CEO of IPSCO Tubulars, Inc.   Age                Director Since 66                   2014   Committees   • Compensation (Chair)   • Nominating and Corporate Governance
Qualifications   Ms. Avril-Groves brings to the Board extensive management and leadership experience in the metals, distribution and manufacturing industries. This includes vast experience in both the fully integrated and the scrap-based electric arc furnace steel industry. Ms. Avril-Groves has strong business acumen with substantial expertise in mergers and acquisitions, strategy, restructuring, finance and accounting through her experience as CEO and CFO for various public companies. Ms. Avril-Groves is currently a director of two other publicly traded manufacturing companies. In addition, she is a 2017 National Association of Corporate Directors (“NACD”) Governance Fellow.
Barbara R. Smith   Ms. Smith was appointed President and CEO of CMC in September 2017 and Chairman of the Board in January 2018. Prior thereto, Ms. Smith served as CMC’s President and Chief Operating Officer (“COO”) from January 2017 to September 2017, COO from January 2016 to January 2017, and Senior Vice President and CFO from May 2011 to January 2016. Prior to joining CMC, Ms. Smith served as Vice President and CFO of Gerdau Ameristeel Corporation, a mini mill steel producer, from July 2007 to May 2011, after joining Gerdau Ameristeel as Treasurer in July 2006. From February 2005 to July 2006, she served as Senior Vice President and CFO of FARO Technologies, Inc., a developer and manufacturer of 3-D measurement and imaging systems. From 1981 to 2005, Ms. Smith was employed by Alcoa Inc., a producer of primary aluminum, fabricated aluminum and alumina, where she held a variety of financial leadership positions.   Other Current Public Directorships • Comerica Incorporated   Former Public Directorships • Mineral Technologies, Inc.		Chairman, President and CEO of Commercial Metals Company   Age                 Director Since 61                    2017
Qualifications   As our President and CEO, Ms. Smith has in-depth knowledge of CMC’s business, strategy, operations and financial position, which enables her to provide important contributions to strengthen CMC’s leadership, operations, strategy, growth and long-range plans. Ms. Smith has a significant level of financial expertise, as well as extensive operational and strategic experience developed during her tenure at CMC and other international organizations. She also brings to the Board over 38 years of domestic and international manufacturing experience, virtually all of which was spent in the metals and mining industries. Ms. Smith’s role as Chairman, President and CEO enables her to facilitate effective communication between management and the Board.

 

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PROPOSAL 1 — ELECTION OF DIRECTORS

 

Joseph C. Winkler   Mr. Winkler served as the Chairman and CEO of Complete Production Services, Inc., an oilfield services provider, from March 2007 to February 2012. Prior thereto, Mr. Winkler served as President and CEO of Complete Production Services, Inc. from March 2005 to March 2007. Prior to joining Complete Production Services, Inc., Mr. Winkler was an executive for National Oilwell Varco and several of its predecessor entities from April 1996 to March 2005. Mr. Winkler currently serves as our Lead Director.   Other Current Public Directorships • TETRA Technologies, Inc.   Former Public Directorships • Dresser-Rand Group Inc. • Eclipse Resources • Hi-Crush Partners LP		Retired – Former Chairman and CEO of Complete Production Services, Inc.   Age                 Director Since 69                    2012   Committees • Compensation   • Finance
Qualifications   Mr. Winkler brings to the Board significant leadership, operational and strategic experience gained from his service as Chairman and CEO of Complete Production Services, Inc. and his executive experience at National Oilwell Varco and its predecessors. His public company board of directors service provides our Board with valuable corporate leadership, governance and strategy development knowledge.

 

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PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

Directors Continuing in Office

 

 

Class III – Term to Expire in 2022

 

Rhys J. Best   Mr. Best has been engaged in private investments since June 2007. From 1999 until June 2004, Mr. Best served as Chairman, President and CEO of Lone Star Technologies, Inc., a company engaged in producing and marketing casing, tubing, line pipe and couplings for the oil and gas, industrial, automotive and power generation industries until its acquisition by United States Steel Corporation in June 2007, and from June 2004 to June 2007, Mr. Best served as Chairman and CEO of Lone Star Technologies, Inc.   Other Current Public Directorships • Cabot Oil & Gas Corporation • Arcosa, Inc. • MRC Global, Inc.   Former Public Directorships • Trinity Industries, Inc. • Non-executive Chairman of Crosstex Energy (now EnLink Midstream)		Retired – Former Chairman, President and CEO of Lone Star Technologies, Inc.; currently serving as non-executive Chairman of Arcosa, Inc. and MRC Global Inc.   Age                Director Since 74                   2010   Committees   • Audit   • Finance
Qualifications   Mr. Best brings to the Board chief executive leadership and business management experience, as well as strong business acumen and financial and strategic planning expertise. His service on the boards of directors of other publicly traded companies provides our Board with a broad perspective and experience in the areas of management, operations and strategy, as well as additional perspective on CMC’s operations, including its international operations and steel manufacturing. In 2014, Mr. Best was selected as 2014 Director of the Year by the NACD, and he is a 2017 NACD Board Leadership Fellow.

 

Richard B. Kelson   Since July 2009, Mr. Kelson has been the Chairman, President and CEO of ServCo, LLC, a strategic sourcing company. Mr. Kelson was an operating advisor of Pegasus Capital, a private equity investment firm, from September 2006 to March 2010. From 1974 to August 2006, Mr. Kelson served in a variety of capacities at Alcoa Inc., a producer of primary aluminum, fabricated aluminum and alumina, including Chairman’s Counsel from January 2006 to August 2006, Executive Vice President and CFO from 1997 to 2005, and Executive Vice President, Environmental Health and Safety, and General Counsel from 1994 to 1997.   Other Current Public Directorships • Ingevity   Former Public Directorships • Lighting Science Group Corporation • MeadWestvaco • ANADIGICS, Inc. • PNC Financial Services Group, Inc.		Chairman, President and CEO of ServCo, LLC; currently serving as non-executive Chairman of Ingevity   Age                 Director Since 74                    2010     Committees   • Compensation   • Finance
Qualifications   Mr. Kelson brings significant financial and business knowledge and leadership experience to the Board. His past service provides our Board with valuable contributions in the areas of mergers and acquisitions, capital deployment and other major financial decisions. His service as a leader of a global integrated aluminum manufacturer provides additional perspective on CMC’s global industrial and manufacturing operations. His service on the boards of directors of other publicly traded companies provides our Board with a broad perspective and experience in the areas of management, operations and strategy.

 

Commercial Metals Company    2020 Proxy Statement    18

PROPOSAL 1 — ELECTION OF DIRECTORS

 

Charles L. Szews   From 2012 to 2015, Mr. Szews served as CEO of Oshkosh Corporation, a designer, manufacturer and marketer of specialty vehicles and vehicle bodies. Mr. Szews served in various capacities at Oshkosh, including as President and CEO from 2011 to 2012, as President and COO from 2007 to 2011 and as Executive Vice President and CFO from 1997 to 2007. Prior to joining Oshkosh, Mr. Szews held a series of executive positions with Fort Howard Corporation for eight years. Prior to Fort Howard Corporation, Mr. Szews was an auditor with Ernst & Young serving in various offices and capacities over a ten-year period.   Other Current Public Directorships • Valaris plc • Group 1 Automotive, Inc. • Allegion plc   Former Public Directorships • Oshkosh Corporation • Gardner Denver, Inc. • Rowan Companies plc		Retired – Former CEO of Oshkosh Corporation   Age                Director Since 64                   2014   Committees   • Audit (Chair)   • Nominating and Corporate Governance
Qualifications   As the former CEO of a large publicly traded corporation, Mr. Szews brings to the Board chief executive leadership experience, as well as extensive financial, audit, operational, strategic planning, and mergers and acquisition experience gained from serving in a variety of roles throughout his career. Mr. Szews’ previous and current board positions on other publicly traded companies have provided him with many years of audit committee experience, including as chair. In addition, he brings vast experience in manufacturing, technology and international markets that will provide knowledge and insight into our Company’s global operations.

 

Lisa M. Barton   Since January 1, 2019, Ms. Barton has served as Executive Vice President – Utilities for American Electric Power Company, Inc. (“AEP”), one of the largest electric energy companies in the U.S. Ms. Barton has been named Executive Vice President and COO of AEP effective January 1, 2021. From 2011 through 2018, Ms. Barton served as Executive Vice President – AEP Transmission for AEP. During her tenure at AEP, she established AEP Transmission Holding Company and its affiliates, oversaw transmission operations, and grew and managed an $18 billion asset base. Prior to joining AEP, Ms. Barton worked for Northeast Utilities, Ransmeier and Spellman and Strategic Energy LLC.		Executive Vice President – Utilities, American Electric Power Co., Inc.   Age                 Director Since 55                    2020     Committees   • Finance
Qualifications   Ms. Barton brings to the Board extensive business knowledge and strong leadership, managerial and strategic experience gained through her various roles at AEP. Her experience as an executive of a publicly traded company provides our Board with experience in the areas of financial planning and oversight, leadership, business planning and operations, financial and risk management, safety management systems, customer and regulatory matters and strategic planning. Ms. Barton’s active participation in national forums on the subject of energy policy and her knowledge of cyber and physical security matters provides our Board with valuable insight into these areas as well.

 

Commercial Metals Company    2020 Proxy Statement    19

PROPOSAL 1 — ELECTION OF DIRECTORS

 

Class I – Term to Expire in 2023

 

Peter R. Matt   Since November 2016, Mr. Matt has served as Executive Vice President and CFO of Constellium N.V., a global aluminum fabrication company. Prior to joining Constellium, Mr. Matt served as a Managing Partner for Trumpline Capital, LLC. from 2015 to 2016. From 1985 to 2015, he held various leadership positions with Credit Suisse.		Executive Vice President and Chief Financial Officer, Constellium N.V.   Age                 Director Since 58                    2020     Committees   • Finance
Qualifications   Mr. Matt brings to the Board a wealth of financial, strategic and executive managerial experience. In his current role, he has helped engineer the turnaround of a global manufacturing company with extensive work on corporate and operational finance, financial planning, strategy, governance and a range of other public company topics. Over his 30 years as a banker, he worked closely with a wide range of industrial companies, including a number of steel companies, across a range of financial and strategic products including: asset finance, restructuring, public and private debt and equity securities and a variety of mergers and acquisitions transactions.

 

Sarah E. Raiss   Ms. Raiss was employed by TransCanada Corporation, a North American energy infrastructure company, from 1999 to 2011, most recently serving as Executive Vice President, Corporate Services, from 2002 to 2011. Prior to joining TransCanada, Ms. Raiss served in various engineering, operations, strategic planning and marketing positions in the telecommunications industry at Ameritech Corporation and its subsidiary, Michigan Bell.   Other Current Public Directorships • Loblaw Companies • Ritchie Brothers   Former Public Directorships • Vermillion Energy • Canadian Oil Sands Ltd. • MicroPlanet Technologies Corporation, a TSX Venture Exchange Company • Shoppers Drug Mart		Retired – Former Executive Vice President, Corporate Services, TransCanada Corporation   Age                 Director Since 63                    2011   Committees   • Audit   • Nominating and Corporate Governance (Chair)
Qualifications   Ms. Raiss brings to the Board strong business acumen and business management experience, as well as functional expertise in strategic planning, merger integration, human resources and corporate governance, all gained through her management and board experiences at significant industrial enterprises. Her service as Executive Vice President, Corporate Services of TransCanada Corporation and director of various publicly traded companies provide our Board with additional perspective on corporate strategy and opportunities for current and future operations. Ms. Raiss was recognized on the 2015 NACD Directorship 100 list. In addition, Ms. Raiss has received an Institute of Corporate Directors (“ICD”) professional designation and is a 2020 ICD Fellow.

 

Commercial Metals Company    2020 Proxy Statement    20

PROPOSAL 1 — ELECTION OF DIRECTORS

 

J. David Smith   Mr. Smith served as Chairman, President and CEO of Euramax International, Inc., an international producer of aluminum, steel, vinyl, copper and fiberglass products for construction and transportation markets, from 1996 to 2008. In 2011, Mr. Smith served as Interim CEO of Nortek, Inc., an international producer of building products, HVAC systems, ergonomic furniture systems and security systems. Prior thereto, he served as President of Alumax Fabricated Products, Inc. from 1989 to 1996, and held numerous senior operating roles in its predecessor companies from 1972 to 1989.   Other Current Public Directorships • Gypsum Management and Supply, Inc. • BlueLinx, Inc.   Former Public Directorships • Non-executive Chairman of Nortek, Inc. • Non-executive Chairman of Select Interior Concepts		Retired – Former Chairman, President and CEO, Euramax International, Inc.   Age                Director Since 71                   2004   Committees   • Audit   • Finance (Chair)
Qualifications   Mr. Smith brings to the Board managerial and operational expertise gained through his broad experience in managing and leading a significant industrial and manufacturing enterprise. His service as the Chairman, President and CEO of Euramax International, Inc. provides our Board with additional international and strategic perspectives. Mr. Smith’s interim leadership position at Nortek, as well as his service on Nortek’s board, have provided him with valuable management, governance and leadership experience that he brings to our Board. In addition, his service on several boards of international companies provides him with international experience and enables him to make valuable contributions to our international growth strategies.

There is no family relationship between any of the directors, executive officers, or any nominee for director.

 

 

Vote Required

 

Directors are elected by majority vote, and cumulative voting is not permitted.

Our Board recommends a vote FOR the election of the nominees for director named above: Vicki L. Avril-Groves, Barbara R. Smith and Joseph Winkler.

 

Commercial Metals Company    2020 Proxy Statement    21

Corporate Governance Practices.    Because corporate governance practices evolve over time, our Board reviews and approves our Corporate Governance Guidelines, committee charters and other governance policies at least once a year and updates them as necessary and appropriate. Our Board is guided by our Corporate Governance Guidelines, which addresses director responsibilities, director access to management, director orientation and continuing education, director retirement and the annual performance evaluations of the Board and its committees. The Corporate Governance Guidelines also direct that the Nominating and Corporate Governance Committee consider the periodic rotation of committee members and committee chairs as a means of introducing fresh perspectives and broadening and diversifying the views and experience represented on the committees of our Board.

Director Independence.    Our Board has determined, after considering all of the relevant facts and circumstances, that Mses. Avril-Groves, Raiss and Barton and Messrs. Best, Kelson, Matt, Mills, Smith, Szews and Winkler are independent, as “independent” is defined by the listing standards of the NYSE, because they have no direct or indirect material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us) that would cause the independence requirements of the NYSE listing standards not to be satisfied.

Board Leadership Structure.    Ms. Smith serves as the Chairman of the Board, President and CEO of the Company. Our Board has concluded that combining the roles of CEO and Chairman of the Board is the most effective leadership structure for CMC at the present time as it promotes unified leadership and direction for CMC, allowing for a single, clear focus for management to execute CMC’s strategy and business plans. The combination of the Chairman and CEO roles is balanced by the appointment of a Lead Director, as well as the majority of our Board being comprised of independent directors. As discussed further below, the Lead Director is responsible for providing leadership to our Board when circumstances arise in which the joint role of the Chairman and CEO may be, or may be perceived to be, in conflict. The Lead Director also presides over those Board sessions that are attended only by independent directors. Our Board believes that having a Lead Director as part of its leadership structure promotes greater management accountability and ensures that directors have an independent contact on matters of concern to them.

Lead Director.    When considered appropriate, our Corporate Governance Guidelines permit the designation of a Lead Director by the majority vote of independent directors. Effective January 9, 2019, the independent directors designated Mr. Winkler as Lead Director to serve a four year term. The responsibilities of the Lead Director include:

 

•

convening and presiding over executive sessions attended only by independent and non-employee directors;

 

•

communicating to the CEO the substance of discussions held during those sessions to the extent requested by the participants;

 

•

serving as a liaison between the Chairman of the Board and our Board’s independent directors on sensitive issues and otherwise when appropriate;

 

•

consulting with the Chairman of the Board on meeting schedules and agendas;

 

•

consulting with the Chairman of the Board regarding materials to be sent to our Board;

 

•

consulting with the Chairman of the Board to assure the effectiveness of our Board meeting process;

 

•

presiding at meetings of our Board in the event of the Chairman of the Board’s absence;

 

•

leading the Board’s annual evaluation of the Chairman of the Board and the CEO;

 

•

monitoring and coordinating with management on corporate governance issues and developments; and

 

•

being available to advise committee chairpersons in fulfilling their designated roles and responsibilities to the Board.

 

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CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

The Lead Director is also available to receive direct communications from stockholders through Board approved procedures and may periodically, as directed by our Board, be asked to speak for CMC or perform other responsibilities.

Board’s Role in Risk Oversight.    Management is principally responsible for defining, identifying and assessing the various risks facing CMC, formulating enterprise risk management policies and procedures and managing our risk exposures on a day-to-day basis. Our Risk Committee, comprised of the members of our executive leadership team, directs this process. The Board is responsible for overseeing our risk management processes. Enterprise risks, including environmental, social and governance (“ESG”) risks, are identified and prioritized by the Risk Committee, and each risk is assigned by the Board to a Board committee or the full Board for oversight, depending on the nature of the risk. The Risk Committee provides an annual risk assessment, with periodic updates as appropriate, to the Board or the applicable Board committee, and the Board or Board committee, as the case may be, assesses the risks and reviews options for risk mitigation presented by the Risk Committee, which includes determining a response strategy and monitoring progress on those strategies.

The following shows the allocation of risk oversight among the Board and its committees:

 

 

Full Board

Significant ESG, strategic and business risks, are monitored by the full Board

 

Audit Committee

Finance Committee

Compensation Committee

Nominating and Corporate Governance Committee

Oversees the management of risks relating to the integrity of financial reporting, business interruption and cybersecurity, and compliance with legal and regulatory requirements

Oversees the management of risks relating to capital allocation and liquidity

Oversees the management of risks relating to compensation design and attracting and retaining key employees

Oversees the management of risks associated with corporate governance

As part of our risk assessment process, the Board or an applicable Board committee also receives presentations throughout the year from management regarding specific potential risks and trends as necessary. Annually, the Finance Committee and the full Board review the Company’s strategic business plans, which includes evaluating the competitive, technological, economic and other risks associated with these plans. We believe that the practices described above facilitate effective Board oversight of our significant risks.

Corporate Governance Guidelines and Code of Ethics.    Our Board has adopted Corporate Governance Guidelines, which reflect the principles by which we operate. When appropriate, the Nominating and Corporate Governance Committee and our Board review and revise our Corporate Governance Guidelines in response to regulatory requirements and evolving leading practices for similarly situated companies. We have also adopted a Code of Conduct and Business Ethics (the “Code of Conduct”), which applies to all of our directors, officers and employees. In addition, we have adopted a separate Financial Code of Ethics, which is applicable to our CEO, CFO, Corporate Controller, any person who may function as a Chief Accounting Officer or persons performing similar functions. We intend to post any amendments to or waivers from our Financial Code of Ethics and our Code of Conduct on our website to the extent applicable to our CEO, CFO, Corporate Controller, any person who may function as a Chief Accounting Officer or persons performing similar functions. Our Corporate Governance Guidelines, the Code of Conduct, the Financial Code of Ethics and other information are available at our website, www.cmc.com under the Governance and Board of Directors section, and such information is available in print to

 

Commercial Metals Company    2020 Proxy Statement    23

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

any stockholder, without charge, upon request to Commercial Metals Company, 6565 North MacArthur Blvd., Suite 800, Irving, Texas 75039, Attention: Corporate Secretary, or by calling (214) 689-4300.

Annual Board Evaluations.    Each year, the Nominating and Corporate Governance Committee and the Lead Director lead the Board through two evaluations: a Board self-evaluation and committee self-evaluations, which include an evaluation of our Lead Director and committee chairpersons. As part of the evaluation process, the Chairman of the Nominating and Corporate Governance Committee meets with each director individually. Through this process, directors provide feedback, assess performance, and identify areas where improvement can be made. We believe this approach supports the Board’s effectiveness and continuous improvement.

Management Succession Planning.    Our Board plays an integral oversight role in talent development by actively engaging in the succession planning for the CEO and other key employees at CMC. Our executive leadership team, led by our Vice President of Human Resources, annually presents to the Board a review of executive and senior management, including a discussion of those employees who are considered to be potential successors to executive and senior level positions with regard to their readiness and development opportunities. In addition, our Nominating and Corporate Governance Committee annually reviews and adopts an emergency succession plan for the CEO.

Communications by Stockholders and Other Interested Parties.    Stockholders and other interested parties may communicate with the Lead Director or any of the non-employee and independent directors by submitting a letter addressed to their individual attention or to the attention of non-employee directors c/o Corporate Secretary at P.O. Box 1046, Dallas, Texas 75221.

Meetings of Our Board.    In fiscal year 2020, the entire Board met six times, all of which were regularly scheduled meetings. All directors attended ninety-nine percent (99%) or more of the meetings of our Board and of the committees on which they served. We expect all directors and nominees to attend the virtual Annual Meeting. All directors with the exception of Ms. Raiss attended the 2020 annual meeting of stockholders.

Executive Sessions.    As required by the NYSE listing standards, non-employee and independent directors regularly schedule executive sessions of our Board and its committees in which they meet without the presence of employee directors or management. The presiding director at such executive sessions is the Lead Director. In fiscal year 2020, the non-employee directors, which include all members of our Board other than Ms. Smith, held five non-employee director sessions in connection with Board meetings and no stand-alone meetings.

Sustainability and Corporate Responsibility.    CMC is committed to operating sustainably and being a good corporate citizen for the benefit of our investors, customers, employees and the communities in which we live and work.

We pursue our ESG priorities through four focus areas, which are embedded in our current operations and growth strategy:

 

1.

Environmental Stewardship, by using resources efficiently, including promoting the recycling and reuse of ferrous and nonferrous metals, and continually striving to reduce the environmental impacts of our operations. For more information, see the Environment page under the Investors section of our website at www.cmc.com.

 

2.	Valuing our People, by making safety a top priority and fostering a diverse and inclusive work environment that provides opportunities for training, development and advancement. For more information, see the Values page under the Investors section of our website at www.cmc.com.

 

3.	Contributing to Communities, by making investments that strengthen local economies and support the causes in which our people believe. For more information, see the Communities page under the Investors section of our website at www.cmc.com.

 

4.	Customer Service & Product Responsibility, by listening to our customers, training our people and providing quality products and materials that have been manufactured in a socially and environmentally responsible manner.

 

Commercial Metals Company    2020 Proxy Statement    24

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

CMC’s business is inherently environmentally sustainable. As a vertically integrated organization, we purchase and process scrap metal, melt the recycled metal into new steel in our state-of-the-art electric arc furnaces (“EAFs”), roll the new steel into finished products in our rolling mills, and fabricate the finished products into lengths to be used in products that support manufacturing and build buildings and infrastructure in the regions we participate in. Our operations encompass the entire life cycle of steel from initial production to use to recycling to reuse. This vertically integrated manufacturing process saves more than 657 million cubic feet of landfill space annually.

 

 

We are also exploring innovative ways to recycle steel more efficiently and cleanly. Our EAF steelmaking technology consumes substantially less energy and fewer natural resources, and generates less emissions compared to traditional blast furnaces. For every ton of steel that we recycle, we conserve 2,500 pounds of iron ore, 1,400 pounds of coal and 120 pounds of limestone. In addition, by using a scrap-based EAF steelmaking process, our CO2 emissions are 8 times less than the global steelmaking average, allowing us to significantly reduce greenhouse gas emissions compared to our competitors.

 

 

 

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CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

We publish our Sustainability Report bi-annually, addressing the many ways in which we make a positive impact on the world, including through social responsibility and environmental initiatives. We plan to issue our next Sustainability Report in 2021. Our most recent Sustainability Report is available on the Investor section of our website at www.cmc.com. Our Sustainability Report is not incorporated by reference in, and does not form a part of, this proxy statement.

Our fiscal year 2020 ESG developments include the following:

 

 

Throughout the COVID-19 pandemic, safety has remained our top priority. In March 2020, we formed a COVID-19 Task Force, comprised of all of the members of our global leadership team, to establish and implement a companywide, coordinated response to the pandemic. The Task Force acted quickly and decisively, enacting policies and procedures designed to protect the safety, health and well-being of our employees, customers and suppliers, including restrictions on travel and group gatherings, enhanced personal protective equipment, upgraded cleaning and sanitization protocols, physical distancing and modularization of our facilities, health and temperature screenings, remote work wherever possible, and structured return to work protocols. Our timely adoption of these measures allowed us to operate safely during the pandemic, without business interruptions or disruptions to our customers.

Identifying Emerging Sustainability Issues.    By identifying and proactively addressing ESG risks and opportunities, CMC protects and creates value for its stockholders, employees, customers and society as a whole. Our Risk Committee is primarily responsible for identifying and managing ESG issues, including climate change risks. Our Board maintains oversight over ESG issues at the full Board level and through relevant committees. We also identify emerging ESG issues through our membership and active participation in several industry association committees focused on topics of safety, health and environmental stewardship.

 

Commercial Metals Company    2020 Proxy Statement    26

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

 

Board Committees

 

 

We have four standing board committees: Audit, Compensation, Nominating and Corporate Governance and Finance, the principal responsibilities of which are described below. All committee charters are available at our website, www.cmc.com.

Significant Committee Functions

 

 

 

Audit Committee   Our Board has a standing Audit Committee that performs the activities more fully described in the Audit Committee Report on page 64. Mr. Mills served on the Audit Committee through January 8, 2020, when he was appointed to the Compensation Committee. All members of the Audit Committee are financially literate under NYSE standards.		Members Mr. Szews (Chair) Mr. Best Mr. Smith Ms. Raiss   Meetings in 2020: 7   •  All members are independent
Compensation Committee   Our Board has a standing Compensation Committee that is responsible for the matters described in the Compensation Committee’s charter, including (i) annually reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and the other executive officers, (ii) evaluating the performance of the CEO and the other executive officers in light of those goals and objectives and (iii) determining and approving the CEO’s compensation based on this evaluation as well as setting the compensation of the other executive officers following a review with the CEO of the CEO’s evaluation, recommendations and decisions as to the performance and compensation of the other executive officers.		Members Ms. Avril-Groves (Chair) Mr. Kelson Mr. Mills Mr. Winkler   Meetings in 2020: 6   •  All members are independent
Additional responsibilities of the Compensation Committee are:   •  assisting our Board in the discharge of its responsibilities relating to the establishment, administration and monitoring of fair and competitive compensation and benefits programs for our executive officers and other executives;   •  making recommendations to our Board with respect to incentive compensation plans, equity-based plans and other compensation and benefits programs;   •  administering CMC’s incentive compensation, stock option, and other equity-based plans; and   •  reviewing and making recommendations to our Board regarding any employment, severance, change in control or separation agreement, or any deferred compensation arrangement, to be entered into with any executive officer.   Ms. Raiss served on the Compensation Committee through January 8, 2020, when she was appointed to the Audit Committee.   For a further discussion of the Compensation Committee’s role in executive officer compensation, the role of executive officers in determining or recommending the amount or form of executive compensation and the Compensation Committee’s engagement and use of independent third-party compensation consultants, please see the “Compensation Discussion and Analysis” section of this proxy statement.

 

Commercial Metals Company    2020 Proxy Statement    27

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

Nominating and Corporate Governance Committee   Our Board has a standing Nominating and Corporate Governance Committee that is responsible for the matters described in the Nominating and Corporate Governance Committee’s charter, including:   •  identifying and making recommendations as to individuals qualified to be nominated for election to our Board and Board committees;   •  monitoring developments in corporate governance matters and overseeing compliance with statutes, rules and regulations relating thereto, including reviewing, assessing and making recommendations to our Board with respect to our corporate governance guidelines;   •  overseeing the annual self-evaluation of the performance of our Board, Board committees and management;   •  overseeing and recommending compensation of non-employee directors;   •  reviewing and overseeing director orientation and continuing education; and   •  annually reviewing the charters of each committee of the Board, including the charter of the Nominating and Corporate Governance Committee.   Mr. Best served on the Nominating and Corporate Governance Committee through January 8, 2020, when he was appointed to the Finance Committee.		Members Ms. Raiss (Chair) Ms. Avril-Groves Mr. Mills Mr. Szews   Meetings in 2020: 4   •  All members are independent

 

Finance Committee   Our Board has established a standing Finance Committee that is responsible for the matters described in the Finance Committee’s charter, including:   •  reviewing and approving or recommending to our Board, as appropriate, potential strategic transactions including mergers, acquisitions, divestitures and major capital expenditures, as well as conducting post-transaction reviews and analysis;   •  reviewing and making recommendations to our Board with respect to the Company’s annual operating and capital expenditure plan;   •  reviewing and making recommendations to our Board with respect to CMC’s cash position, capital structure and strategies, financing strategies, debt arrangements and insurance coverage matters; and   •  reviewing and making recommendations to our Board with respect to CMC’s dividend policy, stock splits and stock repurchases, debt arrangements, and the issuances, as appropriate, of debt or equity securities.   Mr. Szews served on the Finance Committee through January 8, 2020, when he was appointed to the Nominating and Corporate Governance Committee. Mr. Matt joined the Finance Committee on June 16, 2020.		Members Mr. Smith (Chair) Ms. Barton Mr. Best Mr. Kelson Mr. Matt Mr. Winkler   Meetings in 2020: 6   •  All members are independent

 

 

 

Director Nomination Process

The Nominating and Corporate Governance Committee is responsible for identifying and evaluating nominees for directors. The Board, after considering the recommendation of the Nominating and Corporate Governance Committee, proposes a slate of nominees to the stockholders for election to the Board. For information on how to submit a candidate for consideration, please see “2022 Annual Meeting and Stockholder Proposals.”

 

Commercial Metals Company    2020 Proxy Statement    28

CORPORATE GOVERNANCE; BOARD AND COMMITTEE MATTERS

 

Director Qualifications and Attributes

Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of stockholders. Director candidates must also have an inquisitive and objective perspective, practical wisdom and mature judgment. In addition to considering these qualifications, the Nominating and Corporate Governance Committee will consider such relevant factors as it deems appropriate, including the current composition of our Board, the evaluations of other prospective nominees, and the need for any required expertise on our Board or one of its committees. Dedication of sufficient time, energy and attention to ensure diligent and effective performance of their duties is expected of directors. Directors may not serve on the board of directors of more than three other publicly traded companies. Directors should be committed to serve on our Board for an extended period of time, if elected by stockholders.

Board Diversity

When evaluating candidates, the Nominating and Corporate Governance Committee also considers factors that promote and advance diversity among the members of our Board. Although the Nominating and Corporate Governance Committee does not have a formal diversity policy, the Nominating and Corporate Governance Committee considers a number of factors regarding diversity of personal and professional backgrounds (both domestic and international), national origins, specialized skills and acumen, racial and gender diversity, and breadth of experience in industry, manufacturing, financing transactions and business combinations.

Our Board currently includes four women, including our Chairman, and one African American. In addition, 50% of our Board committees are chaired by women. We were recently recognized by the 2020 Women on Boards as a ““W” Winning Company” for our commitment to board diversity. We were also recognized by the Women’s Forum of New York as a “2019 Corporate Champion” for having more than 30% of our Board seats held by women.

Executive Officer Diversity

Although we do not have a formal policy concerning diversity of executive officers, the Board seeks to ensure that a diversity of experiences, backgrounds and viewpoints are represented in our management. As of August 31, 2020, we had three women (Barbara Smith, Chairman, President and CEO, Jody Absher, Vice President, General Counsel and Corporate Secretary, and Jennifer Durbin, Vice President of Human Resources) in executive leadership roles, which is 60% of our executive leadership team.

 

 

Compensation Committee Report

 

 

The Compensation Committee of our Board has reviewed and discussed the following section of this proxy statement entitled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Compensation Committee has recommended to our Board that this Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into CMC’s Annual Report on Form 10-K for the fiscal year ended August 31, 2020.

Vicki L. Avril-Groves (Chairman)

Richard B. Kelson

Rick J. Mills

Joseph C. Winkler

 

Commercial Metals Company    2020 Proxy Statement    29

 

 

Executive Summary

 

 

Stockholder Alignment and Execution

In fiscal year 2020, we continued to execute on our strategy of becoming a leading producer of reinforcing bar (“rebar”) and merchant bar in the United States and Poland. The actions we took in 2020 were in support of our strategy and focused on two key objectives:

 

1.	Maximize returns to stockholders; and

 

2.	Strengthen the balance sheet by, among other things, reducing debt.

Our incentive plans were designed to focus our executives on several key performance indicators that allow us to execute these key objectives.

 

 

CMC today has a portfolio of world class assets and one of the leading market positions in the U.S. and Poland in each of our major product lines. We manufacture long steel products with a strong focus in steel reinforcing bar and merchant bar as well as other long products like fence post and wire rod. We have achieved this as a result of a multiyear process of exiting businesses which did not fit our core business strategy and reinvesting the proceeds in both organic and inorganic growth, including our investment in a state of the art micro mill in Durant Oklahoma, which we commissioned in 2019, and our 2019 acquisition of four rebar mills and 33 fabrication facilities.

Fiscal year 2020 was a historic year for CMC, showcasing the potential of a transformed company following purposeful strategic repositioning and portfolio re-alignment. The benefits of these efforts became clear in fiscal year 2020 – CMC is now a company with significantly increased earnings, cash flow and operational capabilities. These actions also include a robust balance sheet, positioning CMC to thrive and grow.

Some of the key milestones of fiscal year 2020 include the following:

 

•

Increased Adjusted EBITDA over fiscal 2019 by 41%, and generated a 13% return on invested capital and $604 million of free cash flow;

 

•

Reacted quickly to the COVID-19 outbreak to protect the health of employees and avoid business interruptions and disruptions to our customers;

 

•

Announced our intent to build our third micro mill in Mesa, Arizona, which will be the first steel mill in North America with direct-connect potential to renewable energy sources;

 

•

Initiated a network optimization effort in North America that is expected to yield significant profit and working capital benefits;

 

•

Continued progress with merchant product growth including an enhanced commercial focus, broader product line offerings and improved product quality; and

 

Commercial Metals Company    2020 Proxy Statement    30

COMPENSATION DISCUSSION AND ANALYSIS

 

•

Acquired the Galvabar product line and production facility, providing customers with a complete range of corrosion resistant products.

 

 

Alignment Between Executive Pay and Company Performance

The Compensation Committee designs compensation programs to align the actions of our NEOs with the long-term interests of our stockholders based on the fundamental philosophy to pay for performance.

Above Target Annual Incentive Plan Payouts Aligned with Strong Adjusted Earnings Growth and ROIC⁽¹⁾

 

 

 

 

(1)

Adjusted Earnings is a non-GAAP financial measure. Please refer to Appendix A for reconciliations and other information.

Above Target PSU Payouts Aligned with Strong Adjusted EBITDA and Relative Total Shareholder Return over the Three-Year Performance Period⁽¹⁾⁽²⁾

 

 

 

(1)

Relative TSR performance and PSU payouts are for the three-year period ended fiscal year 2020.

(2)

Adjusted EBITDA is a non-GAAP financial measure. Please refer to Appendix A for reconciliations and other information.

 

Commercial Metals Company    2020 Proxy Statement    31

COMPENSATION DISCUSSION AND ANALYSIS

 

Corporate Governance Highlights Regarding Executive Compensation.

Following are highlights of our compensation governance framework:

What we do:

 

 

 

What we don’t do:

 

 

 

Say-on-Pay Vote

Strong stockholder support for 2020 say-on-pay

At the Company’s 2020 annual stockholder meeting, the Company received 97.5% support for its say-on-pay proposal. While the say-on-pay vote is advisory and not binding, the Compensation Committee strongly values the opinions of our stockholders as expressed in the say-on-pay vote. The Compensation Committee believes that our 2020 support level demonstrates a strong alignment of our compensation programs with our stockholders’ interests.

The Compensation Committee will continue to consider the outcome of our future say-on-pay votes when making future compensation decisions for the NEOs.

 

 

Executive Compensation Participants

CMC’s executive compensation program applies to senior executives and senior managers; however, per the SEC executive compensation disclosure rules, this CD&A focuses on the compensation paid or awarded to the six NEOs included in the Fiscal Year 2020 Summary Compensation Table on page 44.

For fiscal year 2020, the NEOs were:

 

•

Barbara R. Smith, Chairman, President and CEO

 

•

Tracy L. Porter, Executive Vice President and COO

 

•

Paul J. Lawrence, Vice President and CFO

 

•

Jody K. Absher, Vice President, General Counsel and Corporate Secretary(1)

 

Commercial Metals Company    2020 Proxy Statement    32

COMPENSATION DISCUSSION AND ANALYSIS

 

•

Jennifer J. Durbin, Vice President, Human Resources(2)

 

•

Paul K. Kirkpatrick, Former Vice President, General Counsel and Corporate Secretary(3)

⁽¹⁾ Ms. Absher was promoted to Vice President, General Counsel and Corporate Secretary effective May 25, 2020.

⁽²⁾ Ms. Durbin was promoted to Vice President, Human Resources effective January 10, 2020.

⁽³⁾ Mr. Kirkpatrick’s employment ended effective March 31, 2020.

 

 

Compensation Objectives and Principles

The Compensation Committee believes that it is in the best interests of stockholders for CMC to establish and maintain a competitive executive compensation program by focusing on the following objectives:

 

Objective		How We Accomplish this Objective
Attract and Retain Top-Caliber Talent		•  Offer median base salaries and competitive employee benefits coupled with meaningful short- and long-term “variable” incentives   •  Benchmark executive compensation against a peer group of appropriately sized competitors for executive talent   •  Provide long-term incentive vehicles with multi-year vesting periods
Pay for Performance		•  A significant portion of executive potential compensation is based upon our financial performance   •  Annual Cash Incentive Bonus Program is based solely on financial goals   •  Long-term incentive grants are 60% performance-based for the CEO and 50% for the other NEOs
Align Executive and Stockholder Interests		•  Largest portion of executive pay is delivered in the form of long-term incentives that track the Company’s stock price   •  25% of PSUs vest based on relative total shareholder return which requires us to have strong total shareholder return relative to peers

Determination of Total Compensation

Independent Compensation Advisor

The Compensation Committee engages an independent compensation consultant to assist it in an ongoing review of CMC’s executive compensation program. The review includes an analysis of market compensation best practices and developments, external regulatory requirements, the competitive market for executive talent, the evolving culture and demands of the business, our compensation philosophy, including the features of our compensation program and the extent to which they support the execution of our business and talent needs.

As a best practice, the Compensation Committee periodically evaluates its selection of an independent compensation consultant. In September 2019, the Compensation Committee conducted this evaluation, including reviewing proposals of several potential consultants, and determined to engage FW Cook as its independent compensation consultant. Our prior executive compensation consultant, Korn Ferry, and FW Cook worked together to ensure a smooth transition in their support of the Compensation Committee.

 

Commercial Metals Company    2020 Proxy Statement    33

COMPENSATION DISCUSSION AND ANALYSIS

 

All work performed by the independent compensation consultant with regard to our executive compensation program is tasked and overseen directly by the Compensation Committee. At the direction of the Compensation Committee, our management provides information and analyses to the Compensation Committee. As discussed further below, CMC participates in and purchases various compensation surveys and studies that management and the Compensation Committee use to analyze executive compensation. The Compensation Committee believes that utilizing information from multiple compensation surveys supports an objective and well-rounded view of executive compensation practices.

FW Cook does not provide any other material services to CMC. The Compensation Committee has assessed the independence of FW Cook pursuant to the NYSE rules, and the Compensation Committee concluded that FW Cook’s work for the Compensation Committee did not raise any conflicts of interest.

Role of Management and CEO in Compensation Decisions

We believe in aligning executive and stockholder interests through an executive compensation program designed with input from management in an ongoing dialogue with the Compensation Committee and, as appropriate, the Compensation Committee’s independent compensation consultant regarding internal, external, cultural, business and motivational challenges and opportunities facing us and our executives. To that end, the executive team analyzes, with assistance from the Compensation Committee’s compensation consultant, trends and recommends improvements to the compensation programs. Specifically, during fiscal year 2020, Ms. Smith reviewed with the Compensation Committee her recommendations (without any recommendation as to her own compensation) regarding base salary adjustments, annual bonus and long-term incentive awards for the NEOs. In addition, during fiscal year 2020, CMC’s Vice President of Human Resources, CMC’s Vice President, General Counsel and Corporate Secretary and CMC’s Director of Compensation also periodically attended Committee meetings at the invitation of the Compensation Committee. While the Compensation Committee receives management’s input with respect to executive compensation, all decisions regarding compensation for the NEOs are made by the Compensation Committee. The Compensation Committee also meets regularly in executive session (without the attendance of any member of management).

 

 

Role of Peer Companies

Compensation Peer Group

Our executive compensation program is designed so that base pay and total short- and long-term compensation is competitive with market practices. Market practices, or benchmarks, are based on peer group data and compensation survey data. As part of the compensation consultant transition from Korn Ferry to FW Cook, Korn Ferry assisted the Compensation Committee with its review of the compensation peer group for continued appropriateness, considering the comparability of the peer companies in terms of industry focus, size, scope and complexity of operations. The Compensation Committee believes that the compensation peer group reflects CMC’s core business segments, operating model and market for talent. The Compensation Committee did not make any changes to the compensation peer group used for setting pay in 2020.

The Compensation Committee also uses compensation survey data in its evaluation of executive pay for the NEOs. Survey data provides insight into positions that may not generally be reported in proxy statements and information about the compensation of executives of non-public companies. To assist the Compensation Committee in evaluating fiscal year 2020 compensation levels, the Compensation Committee reviewed information from the following surveys: Equilar Top 25, US Mercer Executive and Willis Towers Watson CDB Executive Reports. For purposes of this CD&A, the compensation peer group data and compensation survey data are collectively referred to as “Peer Data.”

Performance Peer Group

The performance peer group is used to measure TSR performance which is 25% of the PSU awards. Similar to the compensation peer group, with the assistance of the compensation consultant, the Compensation Committee reviews the performance peer group on an annual basis for continued appropriateness, considering the comparability of the peer companies in terms of business characteristics, strategic imperatives, operating

 

Commercial Metals Company    2020 Proxy Statement    34

COMPENSATION DISCUSSION AND ANALYSIS

 

challenges, risk profile, and stock volatility. A good custom relative performance peer group should consist of companies that are similarly impacted by broader market and industry conditions and how these factors affect long-term stock price performance. The Compensation Committee did not make any changes to the performance peer group used to measure relative TSR performance for the 2020 PSUs.

The companies included in the 2020-2022 performance peer group were chosen by the Compensation Committee based on recommendations from Korn Ferry, with management input, because each of the peer group companies was viewed as sharing similar business characteristics, challenges and strategic direction with CMC, and the stock price of the peer group companies over time generally responds to the market in a manner similar to CMC’s common stock. Our performance peer group is broader than our compensation peer group as it is focused more on our comparators for investor capital, and is less bound by revenue size, which is a driver of pay levels in the compensation peer group. The two peer groups also serve different purposes in our executive pay program. The performance peer group governs the vesting of a portion of our PSU program, while the compensation peer group is used for a market review of competitive compensation levels for our NEOs.

The following table illustrates the list of our compensation and performance peers:

 

Company		Compensation Peer		Performance Peer
AK Steel Holding Corp.		X		X
Alcoa Corp.		X		X
Allegheny Technologies, Inc.		X		X
Ball Corporation		X
Carpenter Technology Corp.				X
Cleveland-Cliffs, Inc.		X		X
Crown Holdings		X
Eagle Materials, Inc.				X
Fluor Corp.				X
Granite Construction, Inc.				X
Harsco Corp.				X
Jacobs Engineering Group, Inc.				X
Martin Marietta Materials		X		X
McDermott International, Inc.				X
Nucor Corp.		X		X
Reliance Steel & Aluminum Co		X		X
Schnitzer Steel INDS-CL A		X		X
Silgan Holdings Inc.		X
Steel Dynamics, Inc.		X		X
Textron, Inc.				X
The Timken Company		X
TimkenSteel Corp.				X
Tutor Perini Corp.				X
United States Steel Corp.		X		X
Vulcan Materials Co.				X
Weyerhaeuser Co				X
Worthington Industries		X		X

 

Commercial Metals Company    2020 Proxy Statement    35

COMPENSATION DISCUSSION AND ANALYSIS

 

 

Compensation Mix: Components and Objectives of Short- and Long-Term Compensation

In accordance with our overall compensation philosophy and program, executives are provided with a mix of base salary, short-term incentives, long-term incentives and employee benefits. As shown in the charts below, our compensation philosophy places a significant portion of the potential compensation for each NEO “at risk” such that compensation will vary based on CMC’s performance.

 

 

 

(1)

Only includes NEOs employed for the full fiscal year.

Base Salary

We pay an annual base salary to each of our NEOs in order to provide them with a fixed rate of cash compensation that is “non-variable” during the fiscal year. While the Compensation Committee generally targets base salary at the 50th percentile of the Peer Data, actual base salary may be above or below the 50th percentile based on the Compensation Committee’s review of the underlying scope of an NEO’s responsibilities, individual performance and experience, tenure in the executive’s current position or with CMC, internal pay equity and retention concerns. For 2020, the Compensation Committee increased the CEO’s base salary by 7.5% to help position her closer to the market median and in recognition of her strong performance.

 

Executive		2020 Base Salary				Percentage Change from 2019 Base Salary
Barbara R. Smith(1)			$1,075,000			7.5%
Paul J. Lawrence(2)			$550,000			29.4%
Tracy L. Porter(3)			$750,000			4.2%
Jody K. Absher(4)			$335,000			—
Jennifer J. Durbin(4)			$300,000			—

 

(1)

Ms. Smith’s base salary increased based on her performance and Peer Data.

(2)

Mr. Lawrence’s base salary increased effective September 1, 2019 in connection with his promotion to Vice President and Chief Financial Officer.

(3)

Mr. Porter’s base salary increased based on his performance.

(4)

Mses. Absher and Durbin were not NEOs in 2019. Therefore, no percentage is reported.

 

Commercial Metals Company    2020 Proxy Statement    36

COMPENSATION DISCUSSION AND ANALYSIS

 

 

Annual Cash Incentive Bonus

Role of the Annual Cash Incentive Bonus

The purpose of the Commercial Metals Company 2013 Cash Incentive Plan (the “2013 Cash Plan”) is to advance the interests of CMC and our stockholders by:

 

•

providing those employees designated by the Compensation Committee, which may include NEOs, other senior executives, senior managers and other employees, incentive compensation tied to pre-established and objective performance goals;

 

•

identifying and rewarding superior performance;

 

•

providing competitive compensation to attract, motivate and retain outstanding employees who achieve superior performance for us; and

 

•

fostering accountability and teamwork throughout CMC.

Goal-setting Process

In accordance with the terms of the 2013 Cash Plan, the Compensation Committee establishes appropriate performance periods, designates those executives eligible to participate, sets the level of potential awards and determines the financial targets or other performance measures which, if attained, result in payment of awards (the “performance goals”). Management may periodically make recommendations as to these matters, but the Compensation Committee makes all decisions with respect to the implementation of the 2013 Cash Plan.

The performance period for the annual bonus (the “Annual Cash Incentive Bonus”) is our fiscal year. The fiscal year 2020 Annual Cash Incentive Bonus was designed to focus our executives on short-term return as described below. We believe that these performance goals help focus the executives on effectively utilizing our assets, maximizing operational efficiencies and seeking profitable growth opportunities. In addition, under the fiscal year 2020 Annual Cash Incentive Bonus program, no bonus would be paid for the NEOs in the event CMC failed to achieve or exceed a 1% ROIC performance goal.

During 2020, the Compensation Committee established financial performance goals that were challenging and reflected CMC’s 2020 operating plan, economic and market conditions, and forecasts. The Compensation Committee increased the 2020 Adjusted Earnings financial goals by 4%, 9% and 11% at the threshold, target, and maximum levels, respectively, and the 2020 ROIC financial goals by 0% and 2% at the target and maximum levels, respectively. The Compensation Committee reduced the 2020 threshold level ROIC financial goal by 3%. The Compensation Committee did not adjust the financial performance goals as a result of the COVID-19 pandemic.

The table below sets forth each NEO’s fiscal year 2020 threshold, target and maximum bonus opportunities, expressed as a percentage of incentive base pay.

2020 Annual Cash Incentive Bonus Opportunity

Expressed as a Percentage of Incentive Base Pay for Fiscal Year 2020

 

Name		Incentive Base Pay				Threshold				Target				Maximum
Barbara R. Smith			$1,075,000				67.5%				135%				270%
Paul J. Lawrence(1)			$550,000				32.5%				65%				130%
Tracy L. Porter			$750,000				50%				100%				200%
Jody K. Absher			$335,000				22.5%				45%				90%
Jennifer J. Durbin			$300,000				22.5%				45%				90%

 

(1)

Mr. Lawrence’s bonus target was increased from 50% to 65% based upon his promotion and Peer Data.

 

Commercial Metals Company    2020 Proxy Statement    37

COMPENSATION DISCUSSION AND ANALYSIS

 

2020 Annual Cash Incentive Bonus Performance Goals

The following table sets forth the fiscal year 2020 financial performance goals applicable to each NEO. Payouts for performance in between performance levels are determined using straight line interpolation.

 

Commercial Metals Company		Weighting		Threshold		Target		Maximum		Actual Performance
Adjusted Earnings(1)		50%		$152 million		$228 million		$285 million		$317 million
ROIC(2)		50%		7.0%		9.4%		11.1%		13.1%
Financial Performance Payout Factor										200%

 

(1)

Adjusted Earnings means earnings from continuing operations before income taxes as determined under U.S. GAAP, less income taxes calculated using CMC’s projected effective tax rate as set forth on Appendix A and adjusted to exclude certain acquisition and legal related costs. These were excluded from the calculation because they were related to the achievement of strategic operating goals of the Company that arose after the financial performance goals were set.

(2)

ROIC means Adjusted Earnings before interest expense divided by the sum of current maturities of long-term debt, debt and stockholders equity less excess cash.

2020 Annual Cash Incentive Bonus Payouts

The table below shows the payouts received by each NEO in fiscal year 2020. The payouts (as a percentage of target) for the NEOs were consistent with those for the rest of the Company.

 

Executive		Payout ($)				Payout (% of Target)
Barbara R. Smith			$2,902,500			200%
Paul J. Lawrence			$715,000			200%
Tracy L. Porter			$1,500,000			200%
Jody K. Absher			$301,500			200%
Jennifer J. Durbin			$270,000			200%

Long-Term Incentive Program

Through our long-term incentive program, we provide senior executives, including participating NEOs, the opportunity for equity awards contingent on the attainment of multi-year performance goals. Acting in concert, the Annual Cash Incentive Bonus and the long-term incentive programs provide balanced cash incentives and equity incentives that we believe reward executive focus on delivering both financial results and long-term growth. The target long-term incentive awards are designed to achieve, when combined with base salary and the target Annual Cash Incentive Bonus, total compensation at approximately the 50th percentile of Peer Data and, when achieving maximum performance, to reach total compensation at the upper quartile of Peer Data.

Fiscal Year 2020 Long-Term Incentive Program

In fiscal year 2020, each NEO received a long-term incentive package consisting of the amounts below. Mses. Absher’s and Durbin’s long-term incentive awards were granted prior to their promotions. We expect that in the future both executives will receive at least 50% of their long-term incentive awards in the form of PSUs.

 

Executive		Target (% of Salary)		Target ($)				PSU Weighting				RSU Weighting
Barbara R. Smith		450%		$	4,837,500				60%				40%
Paul J. Lawrence(1)		175%		$	962,500				50%				50%
Tracy L. Porter		250%		$	1,875,000				50%				50%
Jody K. Absher(2)		15%		$	35,400				—				100%
Jennifer J. Durbin(2)		15%		$	35,400				—				100%

 

Commercial Metals Company    2020 Proxy Statement    38

COMPENSATION DISCUSSION AND ANALYSIS

 

 

(1)

Mr. Lawrence’s long-term incentive target increased from 125% to 175% in connection with increased responsibility and internal pay equity.

(2)

Mses. Absher’s and Durbin’s long-term incentive awards were granted prior to their promotions.

Restricted Stock Units (RSUs)

The fiscal year 2020 RSU awards vest ratably over a three-year period and will be settled in shares of CMC common stock.

Performance Share Units (PSUs)

The fiscal year 2020 PSU awards vest at the end of a three-year performance period, which runs from September 1, 2019 to August 31, 2022, and will be settled in shares of Company common stock based 75% on Adjusted EBITDA and 25% based on relative TSR. The Compensation Committee believes that such metrics are aligned with CMC’s long-term business plan and long-term stockholders’ interests.

Adjusted EBITDA Portion of PSUs (75%)

In each year of the performance period, the Compensation Committee sets an Adjusted EBITDA goal based on the business plan and performance is measured on a cumulative basis as compared to the target level. If a positive ROIC is not attained over the three-year performance period, then under the terms of the award agreements, none of the PSU awards subject to the Adjusted EBITDA metric will vest, regardless of the Adjusted EBITDA performance achieved. The payout formula is intended to encourage strong, focused performance, with each performance level representing what the Compensation Committee deemed to be stretch, but attainable performance goals given the economic and market conditions at the time the goals were set. The Adjusted EBITDA target for fiscal year 2020 was $510 million, and CMC achieved $621 million of Adjusted EBITDA in fiscal 2020. The following table sets forth the vesting percentage and payout levels for the portion of the PSU awards that vest based on fiscal year 2020 – 2022 Adjusted EBITDA performance.

2020 – 2022 Adjusted EBITDA Performance vs. Target

 

		Adjusted EBITDA Metric
		Threshold         (70%)		Target         (100%)		Maximum         (130%)
Percent of PSUs to Vest:		50%		100%		200%

Relative TSR Portion of PSUs (25%)

The following table sets forth the vesting percentage and payout levels for the portion of the PSU award that vests based on relative TSR performance.

 

		TSR Metric
		Threshold         >/=P30		Target         >/=P50		Maximum         >/=P70
Percent of Units to Vest:		50%		100%		200%

Fiscal Year 2018 – 2020 Long-Term Incentive Programs

For the PSUs granted on October 23, 2017 to all of the then-serving NEOs, the awards were settled based on CMC’s achievement of Adjusted EBITDA, ROIC and TSR performance during the three-year performance period ended August 31, 2020 as follows:

 

		Performance Metric
		Cumulative Adjusted EBITDA		ROIC		TSR Ranking
Target		$1.199 billion		Positive			50th  Percentile
Actual		$1.440 billion		8.9%			96th  Percentile
Adjusted EBITDA Funding: 167% TSR Funding: 200%

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

Special Promotion and Retention Award Granted in September 2017

For the PSUs granted on September 1, 2017 to Ms. Smith, the awards were settled based on CMC’s achievement of Adjusted EBITDA, ROIC and TSR performance during fiscal year 2018-2020. This award was issued in an amount equal to the difference between the existing long-term incentive target and the new incentive target associated with her promotion and for retention purposes.

 

		Performance Metric
		Cumulative Adjusted EBITDA		ROIC		TSR Ranking
Target		$1.199 billion		Positive			50th  Percentile
Actual		$1.440 billion		8.9%			96th  Percentile
Adjusted EBITDA Funding: 167% TSR Funding: 200%

Other Elements of Compensation

As described below, we also provide retirement benefits and health and other welfare benefits to our NEOs.

Retirement and Non-qualified Deferred Compensation Programs

Retirement Plan:    The primary tax qualified long-term compensation retirement plan we have for our employees in the United States is the Commercial Metals Companies Retirement Plan (the “401(k) Plan”). The 401(k) Plan is a defined contribution plan and all Company contributions to the plan are discretionary. Please see footnote 4 to the Fiscal Year 2020 Summary Compensation Table beginning on page 44 for more detailed information.

Benefit Restoration Plan:    As a result of limitations mandated by federal tax law and regulations that limit defined contribution plan retirement benefits of more highly compensated employees, CMC provides the Benefit Restoration Plan (“BRP”), a non-qualified plan for certain executives, including each of the NEOs, designated by the Compensation Committee, who are subject to federally mandated benefit limits in the 401(k) Plan. Following each calendar year-end, we credit to the participant’s account under the BRP a dollar amount equal to the amount of Company contributions that the participant would have received under the 401(k) Plan, but for the limits imposed by law on Company contributions to that plan. A BRP participant may also elect to defer up to 50% of his or her base salary and Annual Cash Incentive Bonus into his or her BRP account. The Compensation Committee believes that the BRP is an important element of our long-term compensation program because it helps attract and retain talent in a competitive market. Please see footnote 4 to the Fiscal Year 2020 Summary Compensation Table beginning on page 44 for more detailed information.

Perquisites

We provide car allowances to each of our NEOs. Please see footnote 4 to the Fiscal Year 2020 Summary Compensation Table beginning on page 44 for more detailed information. We do not own or provide to the NEOs corporate aircraft, security services, an executive dining room or similar perquisites.

Health and Other Welfare Benefits

Our NEOs, along with all other employees, are eligible to participate in medical, dental, vision, life, accidental death and disability, short and long-term disability, and other employee benefits generally made available to employees. In addition, CMC offers a supplemental long-term disability program for executives, including the NEOs, which is intended to replicate the coverage available to non-executive employees.

Termination, Severance and Change in Control Benefits

As of August 31, 2020, the employment agreements with each of our then serving NEOs provide severance benefits upon a qualifying termination of employment. In addition, we have entered into Executive Employment Continuity Agreements (“EECAs”) with each of the NEOs, which provide for enhanced severance benefits in the event of a qualifying termination of employment within two years following a Change in Control (as defined in such agreements). The termination provisions included in the employment agreements and EECAs are further

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

described below in the “Potential Payments and Benefits Upon Termination or Change in Control” section. The Compensation Committee believes the payments provided for under the employment agreements and EECAs upon a qualifying termination of employment to be reasonable in light of the non-competition obligations imposed upon the NEOs post-termination and in order to ensure that we have the continued attention and dedication of the executives during circumstances that could result in a Change in Control.

In connection with Mr. Kirkpatrick’s departure from the Company, Mr. Kirkpatrick and the Company entered into a separation and release agreement on February 28, 2020. The separation and release agreement supersedes the EECA between Mr. Kirkpatrick and the Company, except with regard to Mr. Kirkpatrick’s confidentiality, non-competition and non-solicitation obligations in the EECA. In addition, Mr. Kirkpatrick agreed to certain ongoing cooperation obligations contained in the separation agreement, including providing transition services to the Company through October 1, 2020. In consideration for Mr. Kirkpatrick’s release and waiver of claims and agreement to comply with the non-competition and non-solicitation obligations referenced in the separation and release agreement, the Company agreed to pay Mr. Kirkpatrick: (i) an aggregate amount equal to $360,000 in two equal lump sum payments, which is approximately equivalent to nine months of his base salary, in part as compensation for providing transition services to the Company from February 28, 2020 to October 1, 2020; (ii) Mr. Kirkpatrick’s prorated fiscal year 2020 annual performance bonus, at target, through March 31, 2020 as approved by the Company’s Compensation Committee; (iii) twenty days of accrued, unused vacation pay; and (iv) reimbursement for the monthly premium for health benefit coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) paid by Mr. Kirkpatrick for himself and his eligible dependents for COBRA coverage under the Company’s group health plan.

Finally, the 2013 Cash Plan provides that in the event of a Change in Control, the Compensation Committee has discretion to take such action as it determines to be in the best interest of the Company to determine the extent to which incentive compensation is considered earned and payable during any performance period.

 

 

Deductibility of Executive Compensation

Section 162(m) of the Code generally limits our federal tax deduction for compensation paid in any fiscal year to our CEO and our other “covered employees,” as defined in Section 162(m), to $1,000,000. In the past, an exception to this deduction limit was available for “performance-based” compensation that had been approved by our stockholders and otherwise satisfied certain requirements under Section 162(m) and applicable regulations. As a result of tax legislation enacted in 2017, this exception for performance-based compensation is not available for taxable years beginning after 2017. This legislation also expanded the definition of “covered employees” to include the chief financial officer and certain former named executive officers.

The Compensation Committee has believed that it was generally beneficial to CMC to design compensation arrangements that were intended to satisfy the requirements for deductibility under Section 162(m), and CMC has taken appropriate actions, to the extent feasible, that were designed and intended to preserve the deductibility of annual incentive and long-term performance awards previously granted to its executive officers who are covered by Section 162(m). However, the Compensation Committee also believes there may be circumstances in which CMC’s interests are best served by maintaining flexibility in the way compensation is provided, whether or not compensation is fully deductible under Section 162(m).

As a result of the 2017 tax legislation, compensation paid in excess of $1,000,000 to individuals who are covered employees is not expected to be deductible under Section 162(m) of the Code. Therefore, certain compensation paid under our existing equity plans and certain of our long-term equity awards originally designed with the intent that such amounts qualify as “performance-based” compensation may not be deductible. Although the Compensation Committee will continue to analyze the effect that Section 162(m) and the potential lack of deduction for amounts paid in excess of the deduction limit may have on CMC, the Compensation Committee continues to retain flexibility to make compensation decisions that are based on factors other than Section 162(m) and related consequences when necessary or appropriate (as determined by the Compensation Committee in its sole discretion) to enable CMC to continue to attract, retain, reward and motivate its highly-qualified executives. This flexibility may include amending or modifying the design elements of our historical compensation programs to the extent those design elements were principally adopted in an effort to comply with Section 162(m).

 

Commercial Metals Company    2020 Proxy Statement    41

COMPENSATION DISCUSSION AND ANALYSIS

 

 

Compensation Risk Assessment – NEOs

CMC’s compensation policies are structured to discourage inappropriate risk-taking by our executives. The “Compensation Risk Assessment” section on page 57 describes the Compensation Committee’s assessment, which includes, among other things, FW Cook’s annual risk assessment and the Compensation Committee’s belief that our compensation programs do not encourage excessive risk-taking and thus do not create risks that are reasonably likely to have a material adverse effect on CMC.

 

 

Stock Ownership Policy and Policy Regarding Hedging and Pledging of Company Stock

Our Board has implemented stock ownership guidelines for directors, executive officers and certain other senior level employees. Our Board believes that minimum ownership guidelines serve to further align the interests of those covered by the guidelines with our stockholders. Individuals who are hired or promoted into positions covered by the guidelines, or who are elected to serve on our Board, have five years following their hire or promotion date to attain the minimum ownership level applicable to their positions. The guidelines require ownership of Company common stock with a value of the greater of the current fair market value or the closing price per share on the date on which the shares were acquired, of not less than the following amounts, as determined on October 31^st of each year:

The Compensation Committee established stock ownership guidelines for our non-employee directors, executive officers and other senior level employees, as set forth in the following table:

 

Position		Stock Ownership Guidelines
Non-Employee Directors		5x the director’s prevailing annual cash retainer award
President and CEO		5x base salary
COO		4x base salary
EVPs, SVPs, each Company business segment     President, the CFO, the VP of Human Resources and     the General Counsel		3x base salary
Other executives as may be designated by the     Compensation Committee		1x base salary

Unvested time-vested restricted stock, unvested time-vested RSUs and vested stock options are included when determining the amount of stock ownership, with each share of unvested time-vested restricted stock and each share subject to unvested time-vested RSUs and vested options counting as one share of Company common stock for each share of Company common stock subject to such RSUs and options. Stock appreciation rights, whether or not vested, unearned PSUs and unvested stock options do not count for purposes of determining compliance with the stock ownership guidelines. In addition, unvested restricted stock and RSUs that are subject to conditions other than time vesting do not count for the purpose of determining stock ownership levels. All persons subject to the guidelines must retain the shares of Company common stock they acquire upon the exercise of any stock options (after payment of the exercise price and taxes) and 50% of the shares of Company common stock issued upon the vesting of any of their restricted stock or RSUs (after payment of taxes) until achievement of the retention levels.

As of November 18, 2020, all directors and NEOs have met or, within the applicable period, are expected to meet the stock ownership guidelines.

CMC’s insider trading and anti-hedging policy prohibits all employees from buying or selling Company securities while aware of material non-public information and prohibits the disclosure of material non-public information to others who then trade in our securities. The policy is available on our website, www.cmc.com, in the Governance and Board of Directors section. As part of this policy, certain other Company securities related transactions by directors, officers and employees are also prohibited or subject to specific notice and pre-approval requirements. The policy is premised on the belief that even in those circumstances where the proposed transaction may not constitute a violation of law or applicable regulations, it is nonetheless considered inappropriate for any director,

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

officer or other employee of ours to engage in short-term or speculative transactions in our securities, which may be viewed as reducing their incentive to improve our performance or inconsistent with the objectives of our stockholders in general. Therefore, it is our policy that directors, officers and other employees may not engage in any transactions involving our securities which constitute short sales, puts, calls, forwards, futures or other derivative securities. The policy prohibits certain other transactions including hedging or monetization transactions, such as zero-cost collars, forward sale contracts and arrangements pledging Company securities as collateral for a loan (without adequate assurance of other available assets to satisfy the loan).

 

 

Clawback Policy

In fiscal year 2014, the Compensation Committee adopted a clawback policy which allows the Compensation Committee, to the extent legally permitted and pursuant to the terms of the policy, to recover annual cash or long-term equity incentive compensation payment or award made or granted to any current or former executive officer if the payment or award was predicated upon achieving financial results that were subsequently the subject of restated financial statements and a lower payment or award would have been made to the executive based upon the restated financial statements.

 

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EXECUTIVE COMPENSATION

The following tables, footnotes and narratives, found on pages 44 through 56, provide information regarding the compensation, benefits and equity holdings in CMC for the NEOs.

Fiscal Year 2020 Summary Compensation Table

 

Name and Principal Position		Year				Salary ($)				Bonus ($)(1)				Stock Awards ($)(2)				Option Awards ($)				Non Equity Performance Incentive Plan Compensation ($)(3)				All Other Compensation ($)(4)				Total ($)
Barbara R. Smith President and CEO			2020			$	1,063,462			$	—			$	4,884,774			$	—			$	2,902,500			$	187,605			$	9,038,341
			2019			$	992,308			$	—			$	4,414,341			$	—			$	2,049,000			$	192,939			$	7,648,588
			2018			$	950,000			$	—			$	5,337,922			$	—			$	2,375,000			$	114,574			$	8,777,496
Paul J. Lawrence Vice President, Chief Financial Officer			2020			$	550,000			$	—			$	962,183			$	—			$	715,000			$	69,508			$	2,296,691
			2019			$	418,846			$	—			$	518,336			$	—			$	340,000			$	49,561			$	1,326,744
			2018			$	358,461			$	—			$	286,203			$	—			$	331,880			$	35,571			$	1,012,115
Tracy L. Porter Executive Vice President and Chief Operating Officer			2020			$	745,385			$	—			$	1,874,371			$	—			$	1,500,000			$	125,587			$	4,245,342
			2019			$	716,923			$	—			$	1,756,249			$	—			$	1,100,000			$	122,928			$	3,696,100
			2018			$	663,462			$	—			$	1,758,022			$	—			$	1,266,416			$	87,246			$	3,775,146
Jody K. Absher(5) Vice President, General Counsel and Corporate Secretary			2020			$	271,917			$	—			$	33,552			$	—			$	301,500			$	37,989			$	644,959
			2019				—			$	—				—			$	—				—				—				—
			2018				—			$	—				—			$	—				—				—				—
Jennifer J. Durbin(5) Vice President, Human Resources			2020			$	275,684			$	—			$	33,552			$	—			$	270,000			$	40,445			$	619,681
			2019				—			$	—				—			$	—				—				—				—
			2018				—			$	—				—			$	—				—				—				—
Paul K. Kirkpatrick(6) Former Vice President, General Counsel and Corporate Secretary			2020			$	287,077			$	—			$	865,955			$	—			$	187,250			$	211,931			$	1,552,213
			2019			$	478,462			$	—			$	819,578			$	—			$	475,000			$	75,475			$	1,848,515
			2018			$	468,461			$	—			$	828,878			$	—			$	600,000			$	59,342			$	1,956,681

 

(1)

No additional cash bonuses were paid in fiscal year 2020.

(2)

Amounts reported in this column for fiscal year 2020 represent the grant date fair value of PSUs and RSUs awarded in fiscal year 2020 and calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“FASB ASC Topic 718”). The grant date fair value for PSUs is based on the probable outcome of the vesting conditions as of the grant date. The maximum value of the PSUs for Ms. Smith and Messrs. Lawrence, Porter, and Kirkpatrick, respectively, are as follows: $6,096,523, $1,010,843, $1,969,166, and $909,752. Mses. Absher and Durbin were not granted PSUs in fiscal year 2020. Assumptions used in determining these values can be found in Note 15 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K, which was filed with the SEC on October 15, 2020.

(3)

Amounts reported in fiscal year 2020 for each NEO represent the 2020 Annual Cash Incentive Bonus earned by each NEO. Please see the Compensation Discussion & Analysis for further information regarding these bonuses.

(4)

For fiscal year 2020, this column includes a contribution of $18,200 to the 401(k) Plan account for Ms. Smith, Mr. Lawrence, and Mr. Porter $18,038 for Ms. Absher, $18,114 for Ms. Durbin, and $11,268 for Mr. Kirkpatrick. This column also includes contributions to the BRP accounts of Ms. Smith of $127,924, Mr. Lawrence of

 

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