UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
Titan International, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
þ
No fee required.
¨
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1)Title
of each class of securities to which transaction
applies:
______________________________________________________________________________________
2)Aggregate
number of securities to which transaction applies:
______________________________________________________________________________________
3)Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
______________________________________________________________________________________
4)Proposed
maximum aggregate value of transaction.
______________________________________________________________________________________
5)Total
fee paid:
______________________________________________________________________________________
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration number, or the Form or Schedule and the date of its
filing.
1)Amount
Previously Paid:
______________________________________________________________________________________
2)Form,
Schedule or Registration Statement No.:
______________________________________________________________________________________
3)Filing
Party:
______________________________________________________________________________________
4)Date
Filed:
_____________________________________________________________________________________
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Notice of Annual Meeting of Stockholders
Date:
June 9, 2022
Time:
10:00 a.m., CT
Place:
Virtual web conference
Titan International, Inc.
1525 Kautz Road, Suite 600
West Chicago, Illinois 60185
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TO TITAN STOCKHOLDERS
The Annual Meeting of Stockholders (the Annual Meeting) of Titan
International, Inc., a Delaware corporation (Titan or the Company),
will be conducted on Thursday, June 9, 2022, at 10:00 a.m.
Central Daylight Time, via the internet through a virtual web
conference at www.virtualshareholdermeeting.com/TWI2022, to
consider and act upon the following matters:
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Election of Richard M. Cashin Jr., Gary L. Cowger, Max A. Guinn,
Mark H. Rachesky, MD, Paul G. Reitz, Anthony L. Soave, Maurice M.
Taylor Jr. and Laura K. Thompson as directors to serve for one-year
terms and until their successors are elected and
qualified;
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Ratification of the selection of Grant Thornton LLP by the Board of
Directors as the independent registered public accounting firm to
audit the Company's financial statements for the year ending
December 31, 2022;
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Approval, in a non-binding advisory vote, of the 2021 compensation
paid to the Company's named executive officers;
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To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements
thereof.
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Titan's Board of Directors has fixed the close of business on
April 12, 2022, as the "record date." Only those stockholders
whose names appear as holders of record of Titan common stock at
the Company's close of business on April 12, 2022, are
entitled to receive notice of, and to vote at, the Annual Meeting
or any adjournments or postponements thereof. A copy of Titan's
Annual Report, including its Form 10-K, for the year ended
December 31, 2021, is being made available concurrently with
the accompanying Proxy Statement to all stockholders entitled to
notice of and to vote at the Annual Meeting.
Whether or not you plan to participate in the meeting, every
stockholder's vote is important. Stockholders can help the Company
avoid unnecessary costs and delay by voting your shares as soon as
possible. Stockholders of record may vote over the internet or by
telephone, following the instructions in the Notice of Internet
Availability of Proxy Materials that you received in the mail and
the Proxy Statement, or, if you requested to receive printed proxy
materials by mail, by completing, signing, dating and promptly
returning your proxy card in the return envelope, which requires no
postage if mailed in the United States. If you vote by telephone or
internet, you do not need to mail back a proxy card. Please review
the instructions on each of your voting options described in this
Proxy Statement, as well as in the Notice of Internet
Availability
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Titan International, Inc. |
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2022 Proxy Statement |
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of Proxy Materials you received in the mail. Please note that if
your shares are held by a broker or other intermediary and you wish
to vote at the Annual Meeting, you must obtain a legal proxy from
that record holder. The presence, in person or by properly executed
proxy, of the majority of common stock outstanding on the record
date is necessary to constitute a quorum for the transaction of
business at the Annual Meeting.
By Order of the Board of Directors,
/s/ Michael G. Troyanovich
Michael G. Troyanovich
Secretary and General Counsel
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This Notice of Annual Meeting of Stockholders, Proxy Statement and
form of proxy are being made available electronically and mailed on
or about April 19, 2022.
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Titan International, Inc. |
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2022 Proxy Statement |
ii
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Titan International, Inc. |
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2022 Proxy Statement |
iii
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Notice of Annual Meeting of Stockholders
Date:
June 9, 2022
Time:
10:00 a.m., CT
Place:
Virtual web conference
Ways to Vote
By Mail:
If you are a stockholder of record you may vote by returning the
enclosed proxy card
By Telephone:
Call toll-free 1-800-690-6903
By Internet:
www.proxyvote.com
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PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TITAN INTERNATIONAL,
INC.
GENERAL MATTERS
This Proxy Statement is being furnished to the stockholders of
Titan International, Inc. (Titan or the Company) in connection with
the solicitation of proxies by the Board of Directors of the
Company (the Board of Directors) for use at the Annual Meeting of
Stockholders (the Annual Meeting) to be held on June 9, 2022,
at 10:00 a.m. Central Daylight Time via the internet through a
virtual web conference at
www.virtualshareholdermeeting.com/TWI2022, and at any adjournment
or postponement of that meeting. The Company is commencing mailing
of the Notice of Internet Availability of Proxy Materials, in lieu
of a paper copy of this Proxy Statement, to its stockholders on or
about April 19, 2022. In accordance with rules adopted by the
Securities and Exchange Commission (the SEC), the Company may
furnish proxy materials, including this Proxy Statement and its
Annual Report, to its stockholders by providing access to such
documents on the internet instead of mailing printed copies. The
Company has elected to provide its stockholders access to the
Company’s proxy materials over the internet; accordingly, most
stockholders will not receive printed copies of these proxy
materials unless they request them. Instead, the Notice of Internet
Availability of Proxy Materials, which was previously mailed to the
Company’s stockholders, will instruct you as to how you may access
and review all of the proxy materials on the internet. The Notice
of Internet Availability of Proxy Materials also instructs you as
to how you may submit your proxy, including by telephone or over
the Internet. If you would like to receive a paper or email copy of
our proxy materials, you should follow the instructions for
requesting such materials in the Notice of Internet Availability of
Proxy Materials. Although the Company's Annual Report to
Stockholders, including its Form 10-K, for the year ended
December 31, 2021, has been made available to Titan
stockholders in connection with the solicitation of proxies by the
Board of Directors, it is not incorporated by reference into this
Proxy Statement and shall not be deemed to be proxy soliciting
material. In this Proxy Statement, unless the context requires
otherwise, references to “we,” “our,” or “us” refer to
Titan.
VOTING PROCEDURES
QUALIFICATIONS TO VOTE
Only holders of shares of common stock of the Company (Common
Stock) at the close of business on April 12, 2022 (the Record
Date) will be entitled to receive notice of, and vote at, the
Annual Meeting or any adjournment or postponement thereof. Shares
of Common Stock held on the Record Date include shares that are
held directly in the name of a holder of
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Titan International, Inc. |
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2022 Proxy Statement |
1
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Common Stock (the Common Stockholders) as the registered
stockholder of record on the Record Date and those shares of which
the Common Stockholder is the beneficial owner on the Record Date
and which are held through a broker, bank, or other institution, as
nominee, on the Common Stockholder’s behalf (sometimes referred to
as being held in “street name”), that is considered the stockholder
of record of those shares.
SHARES ENTITLED TO VOTE
On the Record Date, there were 62,656,877 shares of Common Stock
outstanding, and there were no other outstanding classes of stock
that will be entitled to vote at the Annual Meeting.
VOTES PER SHARE
Common Stockholders are entitled to one vote per share of Common
Stock they held of record on the Record Date on each matter that
may properly come before the Annual Meeting.
PROPOSALS REQUIRING VOTE; BOARD RECOMMENDATION
Common Stockholders are being asked to consider and vote upon the
following matters:
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Proposal |
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Board Recommendation |
Page
Reference |
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Election of Richard M. Cashin Jr., Gary L. Cowger, Max A. Guinn,
Mark H. Rachesky, MD, Paul G. Reitz, Anthony L. Soave, Laura K.
Thompson, and Maurice M. Taylor Jr. as directors to serve for
one-year terms and until their successors are elected and
qualified;
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FOR
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Ratification of the selection of Grant Thornton LLP by the Board of
Directors as the independent registered public accounting firm to
audit the Company's financial statements for the year ending
December 31, 2022; and
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FOR
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Approval, in a non-binding advisory vote, of the compensation paid
to the Company's named executive officers; |
FOR
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And such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof. The Board of
Directors unanimously recommends that you vote FOR each of the
nominees named in Proposal #1 and FOR each of Proposals #2 and
#3. |
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Titan International, Inc. |
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2022 Proxy Statement |
2
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TIME AND PLACE; DIRECTIONS; ATTENDING THE ANNUAL
MEETING
The Annual Meeting of Stockholders of Titan will be held on
Thursday, June 9, 2022, at 10:00 a.m. Central Daylight Time,
via the internet through a virtual web conference at
www.virtualshareholdermeeting.com/TWI2022.
VOTING BY STOCKHOLDERS OF RECORD; SUBMITTING YOUR
PROXY
Common Stockholders are asked to vote their shares as promptly as
possible. Common Stockholders of record on the Record Date are
entitled to cast their votes in person at the Annual Meeting, by
telephone or over the internet, as described in the instructions in
the Notice of Internet Availability of Proxy Materials and these
materials. If you requested to receive printed proxy materials by
mail, you may also vote by completing, signing, dating and promptly
returning your proxy card in the return envelope according to the
instructions on the proxy card. If you submit your vote by
telephone or internet, you do not need to mail back a proxy
card.
All shares of Common Stock represented at the Annual Meeting by
properly executed proxies received prior to or at the Annual
Meeting that are not properly revoked will be voted at the Annual
Meeting in accordance with the instructions indicated in the proxy.
If no instructions are indicated, such proxies will be voted FOR
each of the nominees named in Proposal #1 and FOR each of Proposals
#2 and #3 and persons designated as proxies will vote with their
best judgment on such other business as may properly come before
the Annual Meeting. The Board of Directors does not know of any
matters that will come before the Annual Meeting other than those
described in the Notice of Annual Meeting attached to this Proxy
Statement.
VOTING BY BENEFICIAL OWNERS OF COMMON STOCK
If your shares are held in “street name,” your broker or other
institution serving as nominee will send you a request for
directions for voting those shares. Many brokers, banks, and other
institutions serving as nominees (but not all) participate in a
program that offers internet voting options and may provide you
with a Notice of Internet Availability of Proxy Materials. Follow
the instructions on the Notice of Internet Availability of Proxy
Materials to access our proxy materials online or to request a
paper or email copy of our proxy materials. If you received these
proxy materials in paper form, the materials included a voting
instruction card so you can instruct your broker or other nominee
how to vote your shares.
For a discussion of rules regarding the voting of shares held by
beneficial owners when you do not give voting instructions to your
broker, please see “Broker Non-Votes” below.
BROKER NON-VOTES
Under the rules of the New York Stock Exchange (NYSE), member
brokers that hold shares in “street name” for their customers that
are the beneficial owners of those shares only have the authority
to vote on certain “routine” items in the event that they have not
received instructions from beneficial owners. Under NYSE rules,
when a proposal is not a “routine” matter and a member broker has
not received voting instructions from the beneficial owner of the
shares with respect to that proposal, the brokerage firm may not
vote the shares on that proposal because it does not have
discretionary authority to vote those shares on that matter. A
“broker non-vote” is submitted when a broker returns a proxy card
and indicates that, with respect to particular matters, it is not
voting a specified number of shares on those matters, as it has not
received voting instructions with respect to those shares from the
beneficial owner and does not have discretionary authority to vote
those shares on such matters. The shares of Common Stock as to
which “broker non-votes” are submitted are not entitled to vote at
the Annual Meeting with respect to the matters to which the “broker
non-votes” apply. However, such shares will be included for
purposes of determining whether a quorum is present at the Annual
Meeting.
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Titan International, Inc. |
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2022 Proxy Statement |
3
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QUORUM FOR ANNUAL MEETING
There must be a quorum for the Annual Meeting to be held. The
presence, in person or represented by proxy, of Common Stockholders
holding a majority of the Common Stock outstanding on the Record
Date is necessary to constitute a quorum for the transaction of
business at the Annual Meeting. Abstentions and “broker non-votes”
are counted as present in determining whether or not there is a
quorum. If a quorum is not present at the time the Annual Meeting
is convened, Common Stockholders representing a majority of the
shares of Common Stock present, in person or represented by proxy,
may adjourn the Annual Meeting.
VOTE REQUIRED TO APPROVE PROPOSALS
Proposal #1:
Election of each of Mr. Cashin, Mr. Cowger, Mr. Guinn, Dr.
Rachesky, Mr. Reitz, Mr. Soave, Mr. Taylor and Ms. Thompson as
directors requires the affirmative vote of Common Stockholders
holding a majority of the shares of Common Stock present in person
or represented by proxy at the Annual Meeting.
Proposal #2:
Ratification of the selection of the independent registered public
accounting firm of Grant Thornton LLP requires the affirmative vote
of the Common Stockholders holding a majority of the shares of
Common Stock present in person or represented by proxy at the
Annual Meeting.
Proposal #3:
Approval, in a non-binding advisory vote, of named executive
officer compensation requires the affirmative vote of the Common
Stockholders holding a majority of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting.
Although the advisory vote on compensation paid to the Company's
named executive officers is non-binding, the Board of Directors
will review the result of the vote and will take it into account in
making a determination concerning executive compensation in the
future.
Abstentions are counted in the number of shares present in person
or represented by proxy for purposes of determining whether a
proposal has been approved and, as a result, are equivalent to
votes against Proposal #2 and Proposal #3. There will be no
abstentions on Proposal #1. Brokers that do not receive
instructions with respect to Proposal #1 and Proposal #3 from their
customers will not be entitled to vote on that proposal as each of
such proposals is considered a “non-routine” matter; any such
broker non-votes will not have any impact on the outcome of
Proposal #1 and Proposal #3. However, such shares representing the
broker non-votes will be treated as shares present for purposes of
determining whether a quorum is present. Because Proposal #2 is
considered a “routine” matter, brokers have discretionary authority
to vote on Proposal #2 in the absence of timely instructions from
their customers. As a result, there will be no broker non-votes
with respect to Proposal #2.
REVOKING A PROXY
Any proxy given pursuant to this solicitation may be revoked at any
time before it is voted. Common Stockholders may revoke a proxy at
any time prior to its exercise by filing with the Secretary of the
Company a duly executed revocation (which must be received before
the start of the Annual Meeting), submitting a new proxy bearing a
later date by following the instructions provided in the Notice of
Internet Availability of Proxy Materials or the proxy card (which
must be received before the start of the Annual Meeting) or voting
in person by written ballot at the Annual Meeting. Attendance at
the Annual Meeting will not of itself constitute revocation of a
proxy. Any written notice revoking a proxy should be sent to:
Michael G. Troyanovich, Secretary and General Counsel of Titan
International, Inc., 1525 Kautz Road, Suite 600, West Chicago,
Illinois 60185. If you are a beneficial owner, you may revoke your
proxy and change your vote at any time before the Annual Meeting
by: (i) submitting new voting instructions to your broker or other
intermediary; or (ii) if you have obtained a legal proxy from your
broker or other intermediary, by attending the Annual Meeting and
voting in person by written ballot.
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Titan International, Inc. |
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2022 Proxy Statement |
4
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COMPANY'S TRANSFER AGENT
Computershare Trust Company,
N.A.
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Mailing address: |
Physical address: |
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P.O. Box 505000 |
462 South 4th Street, Suite 1600 |
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Louisville, KY 40233 |
Louisville, KY 40202 |
Stockholder Information: (877)
237-6882 Agent website:
www.computershare.com/investor
COMMON STOCK DATA
The Common Stock is listed and traded on the New York Stock
Exchange under the symbol "TWI."
VOTE TABULATION
Broadridge Investor Communication Services will be responsible for
determining whether or not a quorum is present and tabulate votes
cast by proxy or in person at the Annual Meeting.
VOTING RESULTS
Titan will announce preliminary voting results at the Annual
Meeting and publish final results by filing a Current Report on
Form 8-K with the SEC.
PLEASE VOTE
Every stockholder's vote is important. Whether or not you intend to
be present at the Annual Meeting, please vote your shares as
promptly as possible in accordance with the instructions in the
Notice of Internet Availability of Proxy Materials and these
materials. Common Stockholders of record on the record date are
entitled to cast their votes in person at the Annual Meeting, by
telephone or over the Internet, as described in the instructions in
the Notice of Internet Availability of Proxy Materials and these
materials. If you requested to receive printed proxy materials by
mail, you may also vote by completing, signing, dating and promptly
returning your proxy card in the return envelope provided to you,
which requires no postage if mailed in the United
States.
PROXY NOTICE
Important Notice Regarding the Availability of Proxy Materials for
Annual Meeting of Stockholders to be held on June 9,
2022.
The Notice of Internet Availability of Proxy Materials, the Proxy
Statement and the Company's Annual Report to Stockholders,
including its Form 10-K, for the year ended December 31, 2021,
are available at the Company's website,
www.ir.titan-intl.com/financials/sec-filings,
www.ir.titan-intl.com/financials/annual-and-proxy-reports, and
www.proxyvote.com.
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Titan International, Inc. |
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2022 Proxy Statement |
5
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PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors recommends that stockholders vote FOR the
election of each of Richard M. Cashin Jr., Gary L. Cowger, Max A.
Guinn, Mark H. Rachesky, MD, Paul G. Reitz, Anthony L. Soave, Laura
K. Thompson, and Maurice M. Taylor Jr. as Directors to serve until
the 2023 Annual Meeting of Stockholders.
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Vote
Your Board of Directors recommends that you vote
"FOR"
the election of each nominee.
8
Directors
Currently on the Board of Directors
Visit the Investor Relations section of the Company's website at
https://ir.titan-intl.com/governance/board-of-directors/default.aspx
to view a comprehensive summary of relevant skills possessed by
Titan's Board of Directors.
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The Board of Directors currently consists of eight directors with
each of the directors elected annually to serve until the next
annual meeting of stockholders, and until such director's successor
is elected and qualified. The Board of Directors has determined
that, with the exception of the Chairman of the Board (Mr. Taylor)
and Paul G. Reitz, each of Richard M. Cashin Jr., Gary L. Cowger,
Max A. Guinn, Mark H. Rachesky, MD, Anthony L. Soave and Laura K.
Thompson meets the independence requirements for directors set
forth in the NYSE listing standards.
The
Nominating Committee of the Board of Directors (the Nominating
Committee) recommended to the Board of Directors the nomination of,
and the Board of Directors is nominating, each of Richard M. Cashin
Jr., Gary L. Cowger, Max A. Guinn, Mark H. Rachesky, MD, Paul G.
Reitz, Anthony L. Soave, Laura K. Thompson, and Maurice M. Taylor
Jr. at the Annual Meeting for election as a director to serve until
the 2023 Annual Meeting of Stockholders and until a successor is
elected and qualified. Each of the nominees is currently a director
serving on the Board of Directors and has consented to serve as a
director if elected.
In
the unexpected event that any nominee for director becomes unable
or declines to serve before the Annual Meeting, it is intended that
shares represented by proxies that are properly submitted will be
voted for such substitute nominee as may be appointed by the
Company's existing Board of Directors, as recommended by the
Nominating Committee. The following is a brief description of the
business experience of each of the nominees for at least the past
five years. |
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Titan International, Inc. |
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2022 Proxy Statement |
6
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NOMINEES
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Richard (Dick) Cashin is President of OEP Capital Advisors LP
(OEP), which currently manages $5 billion of investments and
commitments on behalf of over 100 individual and institutional
investors. OEP is an independent investment advisor, the former
private equity investment arm of JP Morgan Chase (JPM), having
completed a spin-out from JPM in January 2015. OEP and its
predecessors have invested nearly $13 billion in over 85
investments.
During his fourteen-year tenure with JPM, Mr. Cashin was the
Managing Partner of OEP. Prior to that, Mr. Cashin was Managing
Partner of Cashin Capital Partners (April 2000-April 2001) and
President of Citigroup Venture Capital, Ltd. (1980-2000, became
President in 1994). Dick serves on the Board of Tenax Aerospace. He
is a Trustee of the American University in Cairo, Boys Club of New
York, Brooklyn Museum, Central Park Conservancy, Jazz at Lincoln
Center, National Rowing Foundation, and Newport Festivals
Foundation. He is active in inner-city educational initiatives,
Harvard fundraising and has served as Co-Chairman of his Harvard
class for over 40 years.
Mr. Cashin possesses particular knowledge and experience in
finance, strategic planning, acquisitions and leadership of
organizations that enhances the Board of Directors' overall
qualifications. Mr. Cashin's experience with large mergers and
acquisitions especially contributes to Titan's overall long-range
plan.
“No one knows more about finance than Mr. Cashin. Just look at all
he’s accomplished throughout his career. He always has great ideas
and the ability to execute them. He’s a rare gem for our business –
trust irreplaceable.” – Maurice M. Taylor Jr.
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Richard M. Cashin Jr.
Age: 69
Director since: 1994
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Titan International, Inc. |
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2022 Proxy Statement |
7
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Mr. Cowger is the chairman and CEO of GLC Ventures, LLC, a
management consultancy on business, manufacturing and technology
strategy, and global organizational structures and implementation.
He serves on the board of directors of College for Creative Studies
and Kettering University (formerly known as General Motors
Institute), where he was a past Chairman. Mr. Cowger has served as
a board member of Delphi Technologies PLC, Tecumseh Products,
Saturn Corporation, OnStar, Saab, Adam Opel, AG, GM of Canada,
NUMMI, GMAC, and Delphi Automotive. He has also served on the board
of the United Negro College Fund, the MIT North America Executive
Board, the board of the Detroit Symphony, the governing board for
the Leaders for Manufacturing at MIT, and the board of Focus Hope,
and was the Co-Chair of the Martin Luther King Memorial Foundation
Executive Leadership Cabinet with the Honorable Andrew Young. Mr.
Cowger enjoyed a long-term career with General Motors from 1965
until his retirement in December 2009. He held senior positions at
General Motors including President and Managing Director of GM de
Mexico (1994-1997), Chairman of Adam Opel, AG (1998), Group Vice
President of Manufacturing and Labor Relations (1999-2001), and
President of GM North America (2001-2005).
Mr. Cowger's global manufacturing background provides an informed
perspective to the Company's global operations.
“His whole career was at General Motors during their bankruptcy
they had to make drastic changes to their manufacturing process.
Mr. Cowger managed all their factories world-wide during this time
and was instrumental in successfully navigating that tough time.
Titan is lucky to have him.” – Maurice M. Taylor Jr.
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Gary L. Cowger
Age: 75
Director since: 2014
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Mr. Guinn served in various roles with Deere & Company for 38
years, from 1980 through his retirement in November 2018. Mr. Guinn
served as President of the Worldwide Construction & Forestry
Division of Deere & Company from October 2014 through his
retirement and as Senior Vice President, Human Resources,
Communications, Public Affairs, and Labor Relations from 2012 to
2014. Prior to 2012, he held positions of increasing responsibility
in quality services, supply management, and manufacturing in the
agricultural, construction and forestry businesses. From 2014 to
2018, Mr. Guinn also served as a Director of John Deere Capital
Corporation, which provides and administers financing for retail
purchases of new equipment manufactured by John Deere’s agriculture
and turf and construction and forestry operations and used
equipment taken in trade for this equipment. Mr. Guinn received a
BS degree in Mechanical Engineering from the University of
Missouri-Rolla (now Missouri University of Science &
Technology) and an MBA from the University of Dubuque.
Mr. Guinn's global manufacturing background and experience bring
unique insights into the Company's global operations.
“Mr. Guinn’s entire career at Deere was in the manufacturing of
equipment. Titan is manufacturing products that Mr. Guinn knows as
well as anyone else. Period. No one understands the manufacturing
process like him and Titan greatly benefits from his expertise.” –
Maurice M. Taylor Jr.
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Max A. Guinn
Age: 63
Director since: 2019
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Titan International, Inc. |
/ |
2022 Proxy Statement |
8
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Dr. Rachesky is the Founder and Chief Investment Officer of MHR
Fund Management LLC, a New York-based investment firm that takes a
private equity approach to investing and that was founded in 1996.
MHR manages approximately $5 billion of capital and has holdings in
public and private companies in a variety of industries. Dr.
Rachesky is Chairman of the Board of Directors of Lions Gate
Entertainment Corp. and Telesat Corporation. He has also previously
served as a director of Loral Space & Communications, Inc.,
Navistar International Corporation, Emisphere Technologies, Inc.
and Leap Wireless International, Inc. Dr. Rachesky holds an MBA
from the Stanford University School of Business, an MD from the
Stanford University School of Medicine and a BA in Molecular
Aspects of Cancer from the University of Pennsylvania. Dr.
Rachesky, who is 63 years old, became a director of the Company in
June 2014.
Dr. Rachesky has demonstrated leadership skills as well as
extensive financial expertise and broad-based business knowledge
and relationships. In addition, Dr. Rachesky has significant
expertise and perspective as a member of the board of directors of
private and public companies engaged in a wide range of
businesses.
“Dr. Rachesky is one real smart guy and knows when to move on
financial matters, which are very important when you are growing.
There is not a better combination than him and Dick Cashin
together. They are both incredibly smart and competitive.” –
Maurice M. Taylor Jr.
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Mark H. Rachesky, MD
Age: 63
Director since: 2014
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Mr. Reitz joined the Company in 2010 as Chief Financial Officer,
became President in February 2014, and was named Chief Executive
Officer (CEO) effective in January 2017. Prior to joining Titan, he
was the Chief Accounting Officer for Carmike Cinemas based in
Columbus, Georgia. He has also held leadership positions with
McLeodUSA Publishing, Yellow Book USA Inc., and Deloitte and Touche
LLP. He has a Master's of Business Administration Degree from the
University of Iowa and a Bachelor of Business Administration Degree
from Northwood University. He is on the Board of Directors of
Culver-Stockton College. He also was previously on the Board of
Directors of Wheels India Limited.
Mr. Reitz has held leadership roles on both the financial and
operational sides of Titan. This experience has provided Mr. Reitz
with an extensive knowledge of the opportunities available to and
challenges involved in Titan's business.
“I hired Mr. Reitz and he stepped in as Titan’s CFO and he did such
a great job handling big deals in South America, Russia, and
France. He has a unique outlook when it comes to our acquisitions
and financial nature. We wouldn’t be where we are today without his
work and leadership.” – Maurice M. Taylor Jr.
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Paul G. Reitz
Age: 49
Director since: 2017
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Titan International, Inc. |
/ |
2022 Proxy Statement |
9
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Mr. Soave is President, Chief Executive Officer and founder of
Soave Enterprises LLC, a privately held, Detroit-headquartered
company comprised of numerous holdings in the real estate
development, environmental and industrial services, metals
recycling, agriculture, and automotive retailing industries, among
others. Mr. Soave has held this position since 1998. From 1974 to
1998, he served as President and Chief Executive Officer of
Detroit-based City Management Corporation, which he
founded.
Mr. Soave possesses particular knowledge and experience in sales,
distribution, and leadership in diversified businesses that
enhances the Board of Directors' overall qualifications. Mr.
Soave's experiences in building businesses from the ground up
contribute to the dynamic of Titan's entrepreneurial spirit. Mr.
Soave's operational and distribution background further assist with
the Company's direction.
“Titan International is very fortunate to have had Mr. Soave since
the beginning – over 30 years! No one has more of a gut business
feel than Mr. Soave. All anyone has to do is look at the businesses
he started or bought into in the beginning that made him a
billionaire. He is just plain smart.” – Maurice M. Taylor
Jr.
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Anthony L. Soave
Age: 82
Director since: 1994
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Ms. Thompson is a global business executive with deep financial and
business expertise established over a 35-year career with The
Goodyear Tire & Rubber Company. Ms. Thompson served as
Executive Vice President of Goodyear until her retirement in March
2019, and from 2013 to 2018 she served as Executive Vice President
and Chief Financial Officer. She also served in various finance and
business roles including Vice President Finance North America, Vice
President Business Development and Director Investor Relations. Ms.
Thompson is also a Director at Parker Hannifin Corporation and
WESCO International Inc. She is also active in her community
including being Vice President of the Hoover Instrumental Music
Association and an Advancement Council member of the Business
College at The University of Akron.
Ms. Thompson is a trusted business advisor with a proven track
record of developing growth strategies and delivering results in
dynamic and complex business environments. Ms. Thompson’s knowledge
and experience in business transformations and turnarounds,
mergers, acquisitions and divestitures, as well as, demonstrated
success in developing talent, building teams and championing
diversity and inclusion, will further assist Titan in achieving its
strategic goals.
“Ms. Thompson was the lead person for Goodyear Tire on our
acquisition of Goodyear Farm Tire business for North America. In
2005 the entire Titan team was impressed with Ms. Thompson’s
knowledge, of not only the financial part of Goodyear, but the
pluses and minuses in manufacturing. She is one smart lady.” –
Maurice M. Taylor Jr.
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Laura K. Thompson
Age: 57
Director since: 2021
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Titan International, Inc. |
/ |
2022 Proxy Statement |
10
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Mr. Taylor is Chairman of the Company's Board of Directors. Mr.
Taylor retired as Chief Executive Officer of the Company in
December 2016, a position that he held since 1990. Mr. Taylor has
served as a director of Titan International, Inc. since 1990, when
Titan was acquired in a leveraged buyout by Mr. Taylor and other
investors. Mr. Taylor, who owned 53% of Titan at the time, took the
Company public in 1992 on NASDAQ and, in 1993, moved Titan to the
NYSE. Mr. Taylor, who is 77 years old, has been in the
manufacturing business for more than 50 years and has a bachelor's
degree in engineering. He is also a journeyman tool and die maker
as well as a certified welder. Mr. Taylor's work experiences
provide in-depth knowledge and experience in sales, manufacturing,
engineering, and innovation that enhances the Board of Directors'
overall qualifications.
Mr. Taylor's extensive background with the Company has given him a
breadth of insight into Titan's markets and the requirements of end
users. With Mr. Taylor's knowledge and a management style that
constantly re-evaluates short-term goals, Titan is able to adapt
quickly to changing conditions. Mr. Taylor picked up the nickname
of "The Grizz" so for many years the mascot of Titan was a version
of a friendly Grizz bear. In 1996, Mr. Taylor ran as a Republican
candidate for President of the United States, campaigning to bring
sound fiscal management and business know-how to
Washington.
“Mr. Taylor possesses a special skill to see a path when others see
only obstacles and no way forward. That skill combined with his
ability to create strong connections with people has made him an
exceptional visionary leader for decades. His entrepreneurial
mindset and passion has driven Titan to become a leader in our
industry, and his continuing contributions to Titan are valuable to
me and my team.” – Paul G. Reitz
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Maurice M. Taylor Jr.
Age: 77
Director since: 1990
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Titan International, Inc. |
/ |
2022 Proxy Statement |
11
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PROPOSAL TWO
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF
GRANT THORNTON LLP
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The Board of Directors recommends that stockholders vote FOR the
ratification of the selection of the independent registered public
accounting firm, Grant Thornton LLP, to audit the consolidated
financial statements of the Company and its subsidiaries for the
year ending December 31, 2022.
Grant Thornton LLP served the Company as the independent registered
public accounting firm during the year ended December 31,
2021, and has been selected by the Audit Committee of the Board of
Directors (the Audit Committee) to serve as the independent
registered public accounting firm for the present year ending
December 31, 2022. Grant Thornton LLP has served the Company
in this capacity since 2012. If stockholders fail to ratify the
selection of Grant Thornton LLP, the Audit Committee will consider
this fact when selecting an independent registered public
accounting firm for the audit year ending December 31,
2023.
A representative from Grant Thornton LLP is expected to be present
at the Annual Meeting and will have an opportunity to make a
statement if such representative desires to do so and will be
available to respond to appropriate questions of stockholders in
attendance.
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Grant Thornton LLP
Grant Thornton LLP served the Company as the independent registered
public accounting firm during the year ended December 31,
2021
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Titan International, Inc. |
/ |
2022 Proxy Statement |
12
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PROPOSAL THREE
APPROVAL, IN A NON-BINDING ADVISORY VOTE, OF THE COMPENSATION PAID
TO THE NAMED EXECUTIVE OFFICERS
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As required by Section 14A of the Securities Exchange Act of 1934
(the Exchange Act) the Company is providing stockholders with the
opportunity to vote, on a non-binding advisory basis, on a
resolution approving the compensation of our named executive
officers as disclosed in this Proxy Statement in accordance with
the rules of the SEC, including in the “Compensation Discussion and
Analysis” section and the compensation tables and narrative
discussion contained in the “Compensation of Named Executive
Officers” section of this Proxy Statement.
As described in the "Compensation Discussion and Analysis" section,
the objectives of the Company's compensation program are to attract
and retain individuals with the necessary skills that are vital to
the long-term success of Titan. The compensation program is
designed to be fair and just to both the Company and the
individual. The overall goal of the Company's compensation policy
is to maximize stockholder value by attracting, retaining and
motivating the executive officers that are critical to the
long-term success of the Company. Stockholders are encouraged to
review the “Compensation Discussion and Analysis” and “Compensation
of Named Executive Officers” sections of this Proxy Statement for
additional information regarding the Company's executive
compensation.
The Board of Directors is requesting the support of Titan's
stockholders for the named executive officer compensation as
disclosed including in the “Compensation Discussion and Analysis”
and “Compensation of Named Executive Officers” sections of this
Proxy Statement. This proposal gives the Company's stockholders the
opportunity to express their views on the named executive officers'
compensation. This vote is not intended to address any specific
item of compensation, but rather the overall compensation of our
named executive officers and the overall compensation objectives
and philosophy described in this Proxy Statement.
The Board of Directors recommends that stockholders vote FOR the
approval, in a non-binding advisory vote, of the compensation paid
to the named executive officers and the following
resolution:
“RESOLVED, that the compensation of the Company's Named Executive
Officers as described in the Company's definitive Proxy Statement
for the Company's 2022 Annual Meeting of Stockholders pursuant to
Item 402 of Regulation S-K, including the sections entitled
'Compensation Discussion and Analysis' and 'Compensation of Named
Executive Officers,' is hereby APPROVED.”
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Executive Compensation
This proposal gives the Company's stockholders the opportunity to
express their views on the named executive officers'
compensation.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
13
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The vote on the compensation of our named executive officers,
commonly referred to as "say-on-pay," is advisory and not binding
on the Company, the Board of Directors, or the Compensation
Committee of the Board of Directors (the Compensation Committee).
The final decision on the compensation and benefits of our named
executive officers and on whether, and, if so, how, to address any
stockholder approval or disapproval of named executive officer
compensation remains with the Board of Directors and the
Compensation Committee. However, the Board of Directors and the
Compensation Committee value the opinions of the Company’s
stockholders as expressed through their votes and other
communications, and expect to consider the outcome of this vote,
together with other relevant factors, when making future
compensation decisions for the named executive
officers.
The Board of Directors previously determined that the Company will
hold an advisory vote on executive compensation annually. The next
say-on pay vote is expected to be held at the Company's 2023 annual
meeting of stockholders.
OTHER BUSINESS
The Board of Directors does not intend to present at the Annual
Meeting any business other than the items stated in the “Notice of
Annual Meeting of Stockholders” and does not know of any matters to
be brought before the Annual Meeting other than those referred to
above. If, however, any other matters properly come before the
Annual Meeting requiring a stockholder vote, the persons designated
as proxies will vote on each such matter in accordance with their
best judgment.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
14
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AUDIT AND OTHER FEES
The Audit Committee of the Board of Directors engaged the
independent registered public accounting firm of Grant Thornton LLP
as independent accountants to audit the Company's consolidated
financial statements for the fiscal year ended December 31,
2021. Fees paid to the independent registered public accounting
firm of Grant Thornton LLP included the following:
AUDIT FEES
For the years ended December 31, 2021 and 2020, Grant Thornton
LLP billed the Company $2,190,688 and $2,088,285, respectively, for
professional services rendered for the audit of the Company's
annual consolidated financial statements included in the Company's
Form 10-K, including fees related to the audit of internal controls
in connection with the Sarbanes-Oxley Act of 2002, reviews of the
quarterly financial statements included in the Company's Form 10-Q
reports, statutory audits of foreign subsidiaries and related
administrative fees and out-of-pocket expenses incurred by Grant
Thornton LLP.
AUDIT-RELATED FEES
For the years ended December 31, 2021, Grant Thornton LLP
billed the Company $115,000 for professional services rendered
related to the Company's offering of senior secured notes in 2021
and registration of common stock under the Titan International,
Inc. Equity and Incentive Compensation Plan.
For the year ended December 31, 2020, Grant Thornton LLP did not
provide to the Company any audit-related services and did not bill
the Company for any related fees.
TAX AND ALL OTHER FEES
For the year ended December 31, 2021, Grant Thornton LLP
billed the Company $20,000 for professional services rendered
related to statutory report preparation and research and
development tax credit services. For the year ended December 31,
2020, Grant Thornton LLP did not provide to the Company any tax or
other services and did not bill the Company for any related
fees.
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2021 |
2020
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Audit Fees |
$2,190,688 |
$2,088,285 |
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Audit-Related Fees |
115,000 |
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— |
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Tax Fees |
— |
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— |
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All Other Fees |
20,000 |
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— |
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Total |
2,325,688 |
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2,088,285 |
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Audit Committee Pre-Approval
All of the services provided by Grant Thornton LLP for each of 2021
and 2020 were pre-approved by the Audit Committee as required by
and described in the Audit Committee's Charter.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
15
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AUDIT COMMITTEE REPORT
In connection with the filing and preparation of the Company’s
Annual Report on Form 10-K for the year ended December 31,
2021, the Audit Committee reviewed and discussed the audited
financial statements with the Company’s management and its
independent auditors, including meetings where the Company’s
management was not present.
The Audit Committee selected Grant Thornton LLP (GT) to serve as
the independent registered public accounting firm for the Company
for 2021 with stockholders' approval. The Audit Committee has
discussed the issue of independence with GT and is satisfied that
they have met the independence requirement including receipt of the
written disclosures and the letter from GT as required by PCAOB
Rule 3526 (Public Company Accounting Oversight Board Rule 3526,
Communications with Audit Committees Concerning Independence). The
Audit Committee has discussed with GT the applicable requirements
of the PCAOB and SEC.
The Audit Committee periodically meets independently with GT to
discuss the accounting principles applied by management and to
discuss the quality of the Company's internal audit function. GT
reported to the Audit Committee that there were no unresolved
matters with management to report. The Audit Committee has
established procedures for the receipt, retention and treatment of
complaints relating to the Company. The members of the Audit
Committee are not professionally engaged in the practice of
auditing or accounting and are not experts in those fields, but
make every effort to test the veracity of facts and accounting
principles applied by management.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the Company's
audited financial statements be included in the Company's Annual
Report on Form 10-K for the year ended December 31,
2021.
Members of the Audit Committee:
•Richard
M. Cashin, Jr., Chairman
•Gary
L. Cowger
•Max
A. Guinn
•Laura
K. Thompson
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Titan International, Inc. |
/ |
2022 Proxy Statement |
16
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COMPENSATION OF DIRECTORS
The Company uses a combination of cash and stock-based incentive
compensation to attract and retain qualified directors to serve on
the Board of Directors. In setting director compensation, the
Company considers the amount of time and skill level required by
the directors in fulfilling their duties to the Company. In 2018,
the Compensation Committee engaged Pay Governance, as its outside
compensation consultant, to analyze its then-current non-employee
director compensation practices. Based on Pay Governance’s previous
analysis, the Compensation Committee adopted for 2021 the
recommendation to allow each non-employee director to elect to
receive such director’s annual director fee in restricted stock
units instead of cash.
Each non-employee director of the Company receives an annual
director fee of $90,000 in cash. Each non-employee director of the
Company may elect to receive all or a portion of the annual
director fee in restricted stock units, granted pursuant to a
restricted stock unit award, under the Company's applicable equity
plan, in lieu of cash. To the extent a non-employee director made
such an election for 2021, the received restricted stock units are
scheduled to vest on June 16, 2022, the one year anniversary of the
grant date (June 16, 2021), provided that the non-employee director
remains in continuous service through such vesting date or until
his or her earlier death, disability, retirement or not standing
for re-election. The number of restricted stock units received
under each such grant was calculated based on the closing price of
Common Stock on June 16, 2021 of $9.16 per share.
In addition to the annual director fee, the Company approved a 2021
grant of restricted stock units under the Titan International Inc.
Equity and Incentive Compensation Plan (the Incentive plan) to
each non-employee director equivalent to approximately
$90,000 in value, calculated based on the closing price of Common
Stock on June 16, 2021 of $9.16 per share. These additional
restricted stock units are scheduled to vest on June 16, 2022, the
one year anniversary of the grant date (June 16, 2021), provided
that the non-employee director remains in continuous service
through such vesting date or until his or her earlier death,
disability, retirement or not standing for
re-election.
The Chairman of the Board receives an additional $90,000 fee,
payable in cash or, upon the Chairman of the Board’s election, in
restricted stock units. The Audit Committee Chairman receives an
additional $22,500 annual cash payment while each Chairman of the
Compensation Committee, the Corporate Governance Committee of the
Board of Directors (the Corporate Governance Committee), and the
Nominating Committee receives an additional $15,000 annual cash
payment for such person's service in those positions. The “audit
committee financial expert” serving on the Audit Committee receives
an additional $7,500 annual cash payment for this role. Titan also
reimburses directors for out-of-pocket expenses related to their
attendance at such meetings.
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Annual
Director Fee
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Annual Grant of Restricted Stock Units |
Chairman of the
Board Fee |
Audit Committee
Chairman Fee
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Other Committee
Chairman Fee
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Audit Committee
Financial Expert Fee
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$90,000 |
$90,000 |
$90,000 |
$22,500 |
$15,000 |
$7,500 |
The Company does not have any consulting contracts or arrangements
with any of its directors. At December 31, 2021, the directors
beneficially owned, in the aggregate, approximately 18.7% of the
outstanding shares of Common Stock.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
17
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Compensation of Directors |
DIRECTOR COMPENSATION TABLE FOR 2021
The table below summarizes the compensation earned by each member
of the Board of Directors (other than Paul G. Reitz, Titan's
President and Chief Executive Officer) for service on the Board of
Directors for 2021. For a summary of the compensation earned by Mr.
Reitz, see "Compensation of Named Executive Officers"
below.
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Name of Director |
Fees Earned or Paid in Cash
($)
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Stock Awards
($)(a)
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All Other Compensation
($)
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Total
($) |
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Richard M. Cashin Jr. |
37,500 |
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180,000 |
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92,632 |
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(c)
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310,132 |
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Gary L. Cowger |
90,000 |
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90,000 |
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— |
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180,000 |
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Max A. Guinn |
15,000 |
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180,000 |
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— |
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195,000 |
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Mark H. Rachesky, MD |
— |
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180,000 |
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48,753 |
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(c)
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228,753 |
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Anthony L. Soave |
— |
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180,000 |
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— |
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180,000 |
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Maurice M. Taylor Jr. |
90,000 |
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180,000 |
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— |
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270,000 |
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Laura K. Thompson (b) |
116,250 |
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108,750 |
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— |
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225,000 |
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(a)The
amounts included in the “Stock Awards” column reflect the aggregate
grant date fair value of (i) 9,825 restricted stock units granted
to each non-employee director in June 2021 for his or her annual
restricted stock units award and (ii) an additional 9,825
restricted stock units granted to each of Messrs. Taylor, Cashin,
Guinn, Rachesky, Soave and to Ms. Thompson upon his or her
respective elections to receive the annual $90,000 board retainer
fee in restricted stock units in lieu of cash. In each case, the
value is computed in accordance with Financial Accounting Standards
Board Accounting Standards Codification (FASB ASC) Topic 718
Compensation - Stock Compensation. The restricted stock units for
each non-employee director on the Company's Board of Directors were
granted on June 16, 2021 and are scheduled to vest on June 16,
2022, the one year anniversary of the grant date, or, if earlier,
upon the non-employee director’s death, disability, retirement or
not standing for re-election. As previously disclosed, each such
member of the Company's Board of Directors may elect to receive all
or a portion of his or her annual $90,000 board retainer fee in
restricted stock units in lieu of cash.
(b)Laura
K. Thompson was appointed to the Company's board of directors on
April 1, 2021. Ms. Thompson received an initial grant of 1,951
shares of restricted stock units based on the April 1, 2021 closing
stock price of $9.61 which vests on the one year anniversary of the
grant date. In addition, Ms. Thompson received $26,250 as an
incremental pro-rata amount of the annual board retainer fee for
the period from her April 1, 2021 start date to June 15, 2021 and,
as noted in (a) above, an annual board retainer fee of $90,000. Ms.
Thompson received equity of $108,750 comprised of 9,825 restricted
stock units valued at $90,000 (see (a) for further detail) and her
initial equity grant of 1,951 shares of restricted stock units
valued at $18,750.
(c)This
amount consists of the aggregate incremental cost for personal use
of Company aircraft. The method used to calculate this cost is set
forth in a footnote to the Summary Compensation Table.
DIRECTORS OUTSTANDING STOCK OPTIONS AND RESTRICTED STOCK UNITS
AWARDS
The following table shows the outstanding stock options and
restricted stock units as of December 31, 2021 for each member
of the Board of Directors (other than Mr. Reitz, Titan's President
and Chief Executive Officer):
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Name of Director |
Number of Stock Options |
Number of Restricted Stock Units |
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Richard M. Cashin Jr. |
135,000 |
19,650 |
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Gary L. Cowger |
— |
9,825 |
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Max A. Guinn |
— |
19,650 |
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Mark H. Rachesky, MD |
99,000 |
19,650 |
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Anthony L. Soave |
135,000 |
19,650 |
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Maurice M. Taylor Jr. |
49,200 |
19,650 |
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Laura K. Thompson |
— |
11,776 |
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Compensation of Directors |
DIRECTOR STOCK OWNERSHIP GUIDELINES
The Board of Directors believes that each director should develop a
meaningful ownership position in the Company. Therefore, the Board
of Directors adopted stock ownership guidelines for non-employee
directors of the Company. Pursuant to these guidelines, each
non-employee director is expected to achieve stock ownership of at
least five times their annual cash retainer within five years of
the later to occur of the adoption of the guidelines or first
becoming a non-employee director. As of December 31, 2021, all of
the non-employee directors were in compliance with the stock
ownership guidelines.
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COMMITTEES OF THE
BOARD OF DIRECTORS
MEETINGS
The following table provides (i) the membership of each committee
of the Board of Directors as of the date of the filing of this
proxy statement and (ii) the number of meetings held by each
committee during 2021:
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Name of Director |
Board of
Directors |
Audit
Committee
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Compensation Committee
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Nominating Committee
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Corporate Governance Committee |
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Richard M. Cashin Jr. |
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Gary L. Cowger |
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Max A. Guinn |
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Mark H. Rachesky, MD |
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Paul G. Reitz |
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Anthony L. Soave |
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Maurice M. Taylor Jr. |
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Laura K. Thompson(a)
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2021 Meetings
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9 |
4 |
1 |
1 |
2 |
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Member of the Board of Directors or applicable
Committee |
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Chairman of the Board of Directors or applicable
Committee |
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(a) |
Laura K. Thompson was appointed to the Company's Board of
Directors, effective as of April 1, 2021, and her appointments to
the Board are reflected in the table above as of the date of her
appointment. |
BOARD OF DIRECTORS
The Board of Directors approves nominees for election as directors.
Each current director who served on the Board of Directors during
2021 attended 75% or more of (i) the aggregate number of meetings
of the Board of Directors during the period in which such
individual was a director and (ii) the aggregate number of meetings
of committees on which such director served during 2021. The Board
of Directors and committee meetings are presided over by the
applicable Chairman. If the Chairman is unavailable, the directors
present appoint a temporary Chairman to preside at the
meeting.
AUDIT COMMITTEE
The Audit Committee was composed of four independent non-employee
directors during 2021. The Board of Directors has determined that
each of the members of the Audit Committee satisfies the
requirements of the NYSE with respect to independence,
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2022 Proxy Statement |
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Committees of the Board of Directors |
accounting or financial-related expertise, and financial literacy.
Mr. Cashin qualifies as an "audit committee financial expert" as
defined in the SEC rules under the Sarbanes-Oxley Act of
2002.
The Audit Committee retains the independent registered public
accounting firm to perform audit and non-audit services, reviews
the scope and results of such services, consults with the internal
audit staff, reviews with management and the independent registered
public accounting firm any recommendations of the auditors
regarding changes and improvements in the Company's accounting
procedures and controls and management's response thereto, and
reports to the Board of Directors. The Audit Committee meets
quarterly with members of management, internal audit, and the
independent registered public accounting firm, individually and
together, to review and approve the financial press releases and
periodic reports on Form 10-Q and Form 10-K prior to their filing
and release. The Audit Committee operates under a written charter,
which was amended and restated on March 2, 2021, and is available
on the Company's website: www.titan-intl.com. In September 2016,
Titan entered into an Audit Committee Observer Agreement (the
Observer Agreement) with, among others, MHR Institutional Partners
III LP, MHR Capital Partners Master Account LP, MHR Capital
Partners (100) LP, MHR Institutional Advisors III LLC, MHR Advisors
LLC, MHRC LLC, MHR Fund Management LLC, MHR Holdings LLC, and Mark
H. Rachesky (collectively, the MHR Entities) that permits the MHR
Entities to designate an observer of the Audit Committee. Mr. David
Gutterman was designated to serve effective as of March 14, 2018,
and as of the date of this Proxy Statement serves as the observer
pursuant to the Observer Agreement.
COMPENSATION COMMITTEE
The Compensation Committee provides oversight of all of Titan's
executive compensation and benefit programs. The Compensation
Committee reviews and approves and makes recommendations
accordingly to the Board of Directors regarding, the salaries and
all other forms of compensation of the Company's executive
officers, including reviewing and approving corporate goals and
objectives with respect to executive officer compensation. The
Compensation Committee is responsible for the adoption of, the
administration of, and making awards under, the Company’s equity
compensation plans, to the extent provided for by any such plan.
The Compensation Committee is also primarily responsible for
reviewing the non-employee director compensation program and
recommending any changes to the program to the Board of Directors.
Subject to applicable law, the Compensation Committee may establish
subcommittees or delegate specific responsibilities to the
Compensation Committee Chair or any other committee member(s), or
member of management, as applicable.
NOMINATING COMMITTEE
The Nominating Committee recommended to the Board of Directors that
each of Richard M. Cashin Jr., Gary L. Cowger, Max A. Guinn, Mark
H. Rachesky, MD, Paul G. Reitz, Anthony L. Soave, Laura K.
Thompson, and Maurice M. Taylor Jr. stand for re-election as
directors based on approved criteria. See Proposal #1 for further
information regarding these director nominees.
Pursuant to its charter, the Nominating Committee is responsible
for the following: (i) identification of individuals qualified to
become Directors of the Company; (ii) seeking to address vacancies
on the Board of Directors by actively considering candidates that
bring a diversity of background and opinion; (iii) considering
director candidates on merit and considering the benefits of all
aspects of diversity when recommending such candidates to serve as
new directors; (iv) developing a process for annual evaluation of
the Board of Directors and its committees; and (v) reviewing the
Board of Directors' committee structure and composition to make
annual recommendations to the Board of Directors regarding the
appointment of directors to serve as members of each committee and
as committee chairpersons.
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2022 Proxy Statement |
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Committees of the Board of Directors |
CORPORATE GOVERNANCE COMMITTEE
Pursuant to its charter, the Corporate Governance Committee is
responsible for the following: (i) development and recommendation
of a set of corporate governance guidelines; (ii) oversight of the
Company's corporate governance practices and procedures; (iii)
evaluation of the Corporate Governance Committee and its success in
meeting the requirements of its charter; (iv) development and
oversight of a Company orientation program for new directors and
continuing education program for current directors; (v) review and
discussion with management of disclosure of the Company's corporate
governance practices; (vi) monitoring compliance with the Company's
Code of Business Conduct; and (vii) reviewing transactions between
the Company and any related persons.
BOARD LEADERSHIP STRUCTURE
The Company's Board of Directors is currently comprised of seven
non-employee directors and Mr. Reitz, Titan's President and CEO,
who was appointed to the Board of Directors in December 2017. Mr.
Taylor, the Chairman of the Board, served as Chief Executive
Officer until his retirement in 2016. Mr. Taylor has served as
Chairman of the Board since 2005, and has been a member of the
Board of Directors since 1993, when Titan first became a public
company. The Company believes that the composition of the Board of
Directors, including the independent, experienced directors,
benefits Titan and its stockholders.
While the Board of Directors does not have a formal policy
requiring the separation of the positions of Chairman of the Board
and Chief Executive Officer, the roles of the Chairman of the Board
and the Chief Executive Officer are currently separated. The
Company believes that this structure is the best governance model
for the Company at this time as the Chairman of the Board, Mr.
Taylor, is able to focus on Board matters with the insight and
experience gained from years of being the Company's Chief Executive
Officer, allowing the current President and Chief Executive
Officer, Mr. Reitz, to focus on the Company's operations. The Board
of Directors believes Titan is well-served by the current
leadership structure.
The Board of Directors conducts an annual evaluation in order to
determine whether it and its committees are functioning
effectively. As part of this annual self-evaluation, the Board of
Directors evaluates whether the current leadership structure
continues to be advantageous for Titan and its
stockholders.
RISK OVERSIGHT
The Board of Directors is responsible for overseeing Titan's
Enterprise Risk Management (ERM) process. The Board of Directors
focuses on Titan's ERM strategy and the most significant risks
facing Titan from strategic, financial, operational and legal
perspectives considering impact, likelihood and velocity. The Board
of Directors evaluates whether appropriate risk mitigation
strategies are implemented by management and are effective. The
Board of Directors is also apprised of particular risk management
matters in connection with its general oversight and approval of
corporate matters. The Board of Directors works with the Audit
Committee in its oversight of Titan's ERM process. The Audit
Committee Chairman reviews with management (i) policies with
respect to risk assessment and management of risks that may be
material to the Company, (ii) Titan's system of disclosure
controls and system of internal controls over financial reporting,
and (iii) Titan's compliance with legal and regulatory
requirements. The Company's other Board committees also consider
and address risk as they perform their respective committee
responsibilities, including evaluation of risks relating to the
Company's compensation programs and corporate governance standards.
Each of the committees reports to the full Board of Directors as
appropriate, including when a matter rises to the level of a
material risk.
Titan's management is responsible for day-to-day risk management.
The Company's Internal Audit team reports functionally to the Audit
Committee and administratively to the Chief Financial Officer and
serves as the primary monitoring and testing function
for
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2022 Proxy Statement |
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Committees of the Board of Directors |
company-wide policies and procedures. The Chief Financial Officer
and the Internal Audit team manage the day-to-day oversight of the
ERM strategy for ongoing business described above.
The Board of Directors believes the risk management
responsibilities detailed above are an effective approach for
addressing the risks facing the Company at this time.
RISKS RELATING TO EMPLOYEE COMPENSATION POLICIES AND
PRACTICES
The Board of Directors does not believe that the Company's
compensation policies and practices are reasonably likely to have a
material adverse effect on the Company at this time or that any
portion of its compensation policies and practices encourage
excessive risk taking. In examining risks relating to employee
compensation policies and practices, the Company considered the
following factors:
•The
Company is an industrial manufacturer; in the Company's opinion,
this business does not lend itself to or incentivize significant
risk-taking by Company employees.
•A
portion of the compensation for our named executive officers
consists of a fixed base salary established by their respective
employment agreements, which creates little, if any, risk to the
Company.
•Discretionary
bonuses are determined by the Compensation Committee based upon a
variety of measures, including business objectives and performance
metrics. In making determinations with respect to such bonuses, the
Compensation Committee considers the Company’s strategic objectives
and near-term and long-term interests, as well as those of the
Company’s stockholders. In that regard, the Compensation Committee
believes that the Company’s compensation program for its executives
has an appropriate balance of risk and reward in relation to the
Company’s business plan, and does not encourage excessive or
unnecessary risk-taking behavior.
•The
compensation practices for the Company's non-bargaining employees
and management have been established over several decades; in the
Company's opinion, based on its experience, these practices have
not promoted significant risk-taking.
•The
Company does not have a history of material changes in compensation
that would have a material adverse effect on the Company related to
risk management practices and risk-taking incentives.
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2022 Proxy Statement |
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DIRECTOR NOMINATION PROCESS
The Nominating Committee and other members of the Board of
Directors identify candidates for consideration by the Nominating
Committee for election to the Board of Directors. An executive
search firm may also be utilized to identify qualified director
candidates for consideration.
The Nominating Committee evaluates candidates from any reasonable
source, including stockholder recommendations and recommendations
from current directors and executive officers, based on the
qualifications for a director described in its charter. These
considerations include, among other things, merit, expected
contributions to the Board of Directors, whether the candidate
meets the independence standards of the SEC and the NYSE, and a
diversity of background and opinion, with diversity being broadly
considered by the Board of Directors to mean a variety of opinions,
perspectives, personal and professional experiences and
backgrounds, including gender, race and ethnicity differences, as
well as other differentiating characteristics such as
organizational experience, professional experience, education,
cultural and other background, viewpoint, skills and other personal
qualities. The Nominating Committee then presents qualified
candidates to the full Board of Directors for consideration and
selection. In connection with the next search by the board for a
new director, the Company is committed to incorporating procedures
by which women and diverse racial and ethnic backgrounds are
identified for consideration.
The Nominating Committee will consider nominees for election to the
Board of Directors that are recommended by stockholders, applying
the same criteria for candidates as discussed above. Any person who
intends to solicit proxies in support of director nominees other
than the Company's nominees for the 2023 Annual Meeting of
Stockholders must provide notice to the Company no later than April
8, 2023, or if the date of the 2023 Annual Meeting of Stockholders
is moved more than 30 calendar days from June 9, 2023, then notice
must be provided by the later of 60 calendar days prior to the date
of the 2023 Annual Meeting of Stockholders or the tenth calendar
day following the Company's announcement of the date of the 2023
Annual Meeting of Stockholders.
INVOLVEMENT IN LEGAL PROCEEDINGS
The Company is not aware of any events with respect to any director
or executive officer of the Company requiring disclosure under Item
401(f) of Regulation S-K that are material to an evaluation of the
ability or integrity of any director or executive
officer.
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2022 Proxy Statement |
24
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COMPENSATION DISCUSSION
AND ANALYSIS
OVERVIEW
This Compensation Discussion and Analysis describes the
compensation policies and determinations that applied to the
Company's named executive officers for 2021. The Compensation
Committee is empowered to review and approve the annual
compensation package for the Company's named executive officers.
The named executive officers for 2021 were as follows:
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Position |
Name |
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President and Chief Executive Officer |
Paul G. Reitz |
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Senior Vice President and Chief Financial Officer |
David A. Martin |
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Secretary and General Counsel |
Michael G. Troyanovich |
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Vice President and Chief Accounting Officer |
Anthony C. Eheli |
OBJECTIVE
The objectives of the Company's compensation program are to attract
and retain individuals with the necessary skills that are vital to
the long-term success of the Company. To achieve these objectives,
the compensation program is designed to be fair to both the Company
and the individual. Consideration is given to the individual's
overall responsibilities, qualifications, experience, and job
performance.
PHILOSOPHY
The overall goal of the Company's compensation policy is to
maximize stockholder value by attracting, retaining, motivating and
rewarding the executive officers that are critical to its long-term
success. The Compensation Committee believes that executive
compensation should be designed to promote the long-term economic
goals of the Company. The philosophy of the Compensation Committee
as it relates to executive compensation is that the CEO and other
executive officers should be compensated at competitive levels
sufficient to attract, motivate, and retain talented executives who
are capable of leading the Company in achieving its business
objectives in an industry facing increasing competition and change.
To that end, the Compensation Committee has determined that the
compensation package for executive officers shall consist of the
following components reflecting a mix of fixed and variable
compensation, as well as cash and equity compensation, with the
amount and mix of compensation for named executive officers
established pursuant to the terms of applicable employment
agreements and otherwise determined by the Compensation Committee,
as described below:
•Base
salaries to reflect responsibility, experience, tenure, and
performance of executive officers;
•Discretionary
cash bonus awards, when applicable, to reward performance in
achieving strategic business objectives and individual
objectives;
•Long-term
incentive compensation, when applicable, to emphasize business and
individual objectives; and
•Other
benefits as deemed appropriate to be competitive in the
marketplace.
See “Employment Agreements” below for a description of the
employment agreements to which the named executive officers are
party. In addition to reviewing the compensation of executive
officers generally in light of competitive market data that is
publicly available, the Compensation Committee also considers
recommendations from its independent compensation consultant, if
any, as well as recommendations from the Company's CEO regarding
the total compensation for the other named executive officers. The
Compensation Committee also considered the historical compensation
of each named executive officer, from both a base salary and total
compensation package perspective, in setting the 2021 compensation
for the executives.
COMPENSATION COMMITTEE CHARTER
The Compensation Committee has a charter to assist in carrying out
its responsibilities. The Compensation Committee reviews the
charter and the guidelines contained therein on an annual basis and
makes any modifications as it deems necessary. The Compensation
Committee Charter is available on our website at
www.titan-intl.com.
EXECUTIVE COMPENSATION DECISION-MAKING
The Compensation Committee analyzes individual and Company
performance in relation to considering changes to compensation
programs. The Compensation Committee also relies on data and
studies previously prepared by Pay Governance in 2018 to assist it
in setting compensation and developing pay practices that reflect
the Company’s and stockholder goals. The Company's management and
members of the Board of Directors also provide the Compensation
Committee with historical compensation information relating to the
executive officers to assist the Compensation Committee in
formulating the named executive officer’s compensation. The
Compensation Committee considers competitors, markets, and
individual performance, as well as the Company’s performance when
making salary adjustments and bonus awards. With the prior
assistance of Pay Governance, the Compensation Committee generally
evaluates the named executive officer’s compensation and pay mix
against the Company’s peer group. The information provided to the
Compensation Committee includes items such as base salary, bonuses
(both annual and long-term incentives), and equity-based awards.
The Compensation Committee takes into account the historical trend
of each element of compensation, the analysis previously prepared
by Pay Governance, and the total compensation for each year in
connection with its decision about proposed compensation amounts.
The Compensation Committee sets all compensation with regard to the
CEO of the Company. For the other named executive officers of the
Company, the Compensation Committee receives recommendations from
the CEO which it considers when setting compensation for these
individuals. The Compensation Committee members also informally
communicate with others in their own marketplaces to compare
salaries and compensation packages.
The Compensation Committee has the authority to engage compensation
consultants to assist with designing compensation for the named
executive officers. The Compensation Committee consulted with Pay
Governance in 2018, which analyzed and made recommendations with
respect to the Company’s compensation of its named executive
officers. The Compensation Committee has assessed the independence
of Pay Governance, as required under NYSE listing rules. The
Compensation Committee is not aware of any conflict of interest
that has been raised by the work previously performed by Pay
Governance. As the Company is a manufacturer in the off-highway
industry, the Company utilized a selected peer group that includes
nineteen public companies in the manufacturing and industrial
business. The size of a company is also considered when selecting
it for the peer group. For 2021, there were no changes to the
selected peer group. The companies chosen for comparison include
the following:
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Alamo Group, Inc. |
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Commercial Vehicle Group, Inc. |
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Graco Inc. |
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Park-Ohio Holdings Corp. |
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Applied Industrial Technologies, Inc.
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DXP Enterprises, Inc. |
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ITT Inc. |
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Stoneridge, Inc. |
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Barnes Group Inc. |
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Enerpac Tool Group Corp. |
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Lindsay Corporation |
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Valmont Industries, Inc. |
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EnPro Industries, Inc. |
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Federal Signal Corporation |
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Wabash National Corporation |
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Chart Industries, Inc. |
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Materion Corporation |
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Modine Manufacturing Company |
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Watts Water Technologies, Inc. |
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The Compensation Committee recognizes other companies may use
different types of calculations and matrices to decide what a
compensation package should contain. However, the Compensation
Committee believes any package that uses only such formulas and
matrices may not be a complete representation of the Company’s
performance. The Compensation Committee's members use their
extensive business experience and judgment, including reviewing
competitive compensation information obtained from public
information to evaluate and determine the Company's executive
compensation packages in addition to performance measures. While
the Compensation Committee considers the executive compensation
information for the group previously obtained through Pay
Governance, the Compensation Committee does not focus on aligning
the compensation for the Company’s executives to any specified
percentage or level of the executive compensation for companies in
the group (and therefore does not technically "benchmark" executive
compensation). The Compensation Committee's philosophy of
evaluating the overall Company performance, not just using numeric
measurement criteria, allows the Compensation Committee greater
flexibility in carrying out its duties.
The Compensation Committee may grant performance awards as part of
an executive officer’s compensation package. Generally, performance
awards require satisfaction of pre-established performance goals,
consisting of one or more business criteria and one or more
targeted performance level with respect to such criteria as a
condition of awards being granted, becoming exercisable or settled,
or as a condition to accelerating the timing of such events.
Performance may be measured over a period of any length specified
by the Compensation Committee. Additional detail regarding 2021
performance measures used by the Compensation Committee in
connection with establishing named executive officer compensation
for 2021 can be found under “Incentive Compensation”
below.
In setting compensation packages, including performance-based
incentives, the Compensation Committee considers the provisions of
its incentive programs. The Compensation Committee takes into
account whether or not stock-based compensation is to be given as
part of the executives' compensation package. The performance goals
under the Company’s incentive programs are designed using
recommendations from the Company’s compensation consultant and the
Compensation Committee's business experience and judgment to best
align executive compensation with the Company's actual
performance.
The Company conducts a stockholder outreach program through which
the Company interacts with stockholders on a number of matters
throughout the year, including executive compensation. The
compensation paid to the Company's named executive officers
disclosed in the Company's 2021 Proxy Statement was approved by
approximately 52% of the shares present in person or represented by
proxy at the 2021 annual meeting of stockholders, which reflects,
in the view of the Compensation Committee, the benefit of that
outreach. The Committee believes that the existing compensation
program continues to attract, retain and appropriately incentivize
senior management. As a result, the Compensation Committee chose
not to make any substantial changes to the existing executive
compensation program for 2021 specifically in response to the 2021
say-on-pay voting results.
SALARY LEVEL CONSIDERATIONS
Base salary levels for the named executive officers, other than Mr.
Eheli, were initially established by their respective employment
agreements, and these salary levels are reviewed and may be
adjusted annually by the Compensation Committee. In determining
appropriate salaries, the Compensation Committee considers: (i) the
CEO's recommendations as to compensation for all other executives;
(ii) the responsibilities of the executive position held, the
individual's past experience, current performance, and competitive
marketplace conditions for executive talent; (iii) compensation
levels of other executives based on, among other things, the
Compensation Committee members' own business experience and
judgment; and (iv) other comparative compensation data and
recommendations previously obtained from Pay Governance. Salary
levels are typically considered on an annual basis and there are no
guaranteed merit increases in any given year. Except to the extent
provided for in the named executive officers’ employment agreement,
the Compensation Committee's analysis is a subjective process,
which utilizes no specific weights or formulas in determining
executives' base salaries but includes a discussion with management
of various factors, as well as the other information discussed
above.
Salary adjustments for each executive can be based in part on the
CEO's recommendation to the Compensation Committee that the
executive's job performance may warrant a salary adjustment. The
CEO will discuss the executives' job performance with the
Compensation Committee and answer any questions that the
Compensation Committee may have regarding the recommendation. The
Compensation Committee will consider the recommendation of the
CEO.
BASE SALARY
Based on a discussion of the above items, the executive salaries
were approved by the Compensation Committee and are detailed
below.
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Year |
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P. Reitz |
D. Martin |
M. Troyanovich |
A. Eheli(a)
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|
Base Salary |
2019
|
|
$900,000 |
$400,000 |
$350,000 |
$— |
|
Base Salary |
2020
|
|
900,000 |
400,000 |
350,000 |
— |
|
Base Salary |
2021
|
|
900,000 |
400,000 |
350,000 |
224,054 |
(a) Mr. Eheli joined the Company in March 2021 as Vice President
and Chief Accounting Officer with an annualized based salary of
$275,000. For 2021, the actual base salary earned prorated from his
start date was $224,054.
Messrs. Reitz, Martin, and Troyanovich have employment agreements
with the Company that in each case specify a base salary (as
described in the table above). Mr. Martin’s employment agreement
provides that the Board of Directors may adjust his base salary,
and the employment agreements of Messrs. Reitz and Troyanovich
permit the Board of Directors to increase base salary from time to
time. Mr. Eheli is entitled to increases in his base salary from
time to time.
Based on our evaluation public compensation information obtained
through Equilar regarding 2021 base salaries, Mr. Reitz's base
salary was approximately at the 90th percentile for the Company’s
peer group, Mr. Martin's base salary was approximately at the 50th
percentile for the peer group, Mr. Troyanovich’s base salary was
approximately at the 25th percentile for the peer group and Mr.
Eheli's base salary was approximately at the 50th percentile for
the peer group. After reviewing 2020 Company and individual
performance, including the comparative compensation data from Pay
Governance, with respect to 2021 compensation, the Compensation
Committee decided to not increase base salaries payable to the
named executive officers.
INCENTIVE COMPENSATION
The Company sponsors the Incentive Plan, pursuant to which the
Company may grant various types of awards, both equity and cash, to
incentivize executives and other key personnel in achieving various
Company objectives. This plan permits the Compensation Committee
discretion to develop performance incentive programs, with
objectives that may vary from year to year. For 2021, the
Compensation Committee, after reviewing the Company’s 2020
performance and other information, including recommendations and
comparative compensation data provided by Pay Governance,
determined that equity awards would be granted in 2021 to the named
executive officers, as further described below.
2021 ANNUAL CASH BONUS
For 2021, the Company utilized an annual discretionary cash-based
performance incentive program to reward named executive officers
and certain management generally for making decisions that improved
performance at the Company and/or business unit level. For 2021,
the Compensation Committee looked in hindsight at holistic
Company-level, business unit-level (together, very generally
weighted 65%), and individual performance (very generally weighted
35%). For 2021, bonus targets were considered by the Compensation
Committee at 100% of base salary for Messrs. Reitz and Martin, 50%
of base salary for Mr. Troyanovich and 40% of base salary for Mr.
Eheli. In December 2021, the Compensation Committee reviewed on a
holistic basis performance at Company including the overachievement
of the Company's performance projections for 2021 and also taking
into account the refinancing of the Company’s 7.00% senior secured
notes due 2028, renewal of the revolving credit facility agreement,
and cash and net debt positions during 2021 relative to the working
capital requirements to support the growth of the business. As a
result of these considerations, the Committee determined on a
subjective basis, based on management recommendations, to award
discretionary cash bonuses to Messrs. Reitz, Martin, Troyanovich
and Eheli of $1,000,000 (111% of target opportunity), $500,000
(125% of target opportunity), $190,000 (109% of target opportunity)
and $110,000 (100% of target opportunity),
respectively.
2021 EQUITY AWARDS
On March 25, 2021, the Company awarded each of the named executive
officers the following grants of restricted stock: Mr. Reitz,
65,000 shares (approximately $573,300); Mr. Martin, 40,000 shares
(approximately $352,800); Mr. Troyanovich, 32,500 shares
(approximately $286,650); and Mr. Eheli, 11,344 (approximately
$100,054). The Committee determined to grant restricted stock to
the named executive officers based on the Compensation Committee’s
look-back, holistic and subjective review and consideration of the
Company, business unit and individual performance during 2020. The
amounts paid to the named executive officers were not formulaic,
but determined on a subjective basis in light of management
recommendations. These shares of restricted stock generally vest in
three substantially equal amounts on the first three anniversaries
of the grant date.
2021 PERFORMANCE SHARE AWARDS
In 2021, the Company awarded the following named executive officers
grants of performance shares: Mr. Reitz, 184,672 shares
(approximately $2,000,000); Mr. Martin, 46,168 shares
(approximately $500,000); and Mr. Troyanovich, 32,318 shares
(approximately $350,000). Within 15 days of the filing of the
Company's Form 10-K for the year ending December 31, 2024, the
Company will calculate its average annual Adjusted EBITDA for the
fiscal years commencing January 1, 2021 and ending December 31,
2024.[1] The Company will issue shares of common stock in exchange
for the performance shares awarded to the participant, based on
Adjusted EBITDA targets established by the Compensation Committee
and the Board of Directors in 2020, and relating to the Company’s
projected performance over the long-term, reflecting the cyclical
nature of the Company’s end markets. If the Company achieves 100%
of the Adjusted EBITDA target, Messrs. Reitz, Martin and
Troyanovich will receive 100% of the performance shares as shares
of common stock; the issuance of common stock in exchange for the
performance shares will vary
based on the percentage of the Adjusted EBITDA target that is
achieved. The following chart shows the percentage of EBITDA target
achieved and the corresponding issuance of common stock in exchange
for performance shares:
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Company's Annual Adjusted EBITDA (% of Target) |
% of Performance Shares issued as common stock |
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< 80% |
N/A |
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80% |
25% |
|
90% |
50% |
|
100% |
100% |
|
110% |
110% |
|
> 120% |
125% |
To the extent the Company's four-year average annual Adjusted
EBITDA is between 80% and 120% and is not covered within the
foregoing award levels, the Company will issue common stock
interpolated from the above thresholds in exchange for the
performance shares awarded to the participant. At this time the
Company is not able to determine the likelihood of achieving the
target, given that target contemplates performance of the Company
through 2024. However, if the Company’s average annual Adjusted
EBITDA for 2021 to 2024 was equal to the Company’s Adjusted EBITDA
in 2021, the named executive officers would receive common stock
equal to 125% of the performance shares.
[1] “Adjusted EBITDA” means (i) net income (loss) attributable to
common stockholders before (ii) interest expense, (iii) (benefit)
provision for income taxes, (iv) depreciation and amortization, and
(v) adjustments for any unusual transactions and FX gains/losses
reported in the income statement, as each such item is reported in
our financial statements on Forms 10-Q or 10-K filed with the SEC
for the previous four consecutive fiscal quarters.
2022 ANNUAL CASH INCENTIVE PROGRAM
The Compensation Committee continued the formulaic basis for
determining the annual cash incentive program for the 2022 fiscal
year. The Compensation Committee developed certain Company-related
performance goals with weighting between 65% and 100% of the annual
incentive payout depending on the goal for the participant, as well
as an individual discretionary component with 35% weighting. More
information about this program will be provided in our 2023 proxy
statement.
PERQUISITES AND PERSONAL BENEFITS; QUALIFIED RETIREMENT PLAN
PARTICIPATION
For 2021, Mr. Reitz was eligible to utilize Company-provided
aircraft for limited personal use. For more information about this
personal benefit, see the 2021 Summary Compensation Table below.
The named executive officers also received matching Company
contributions under our tax qualified 401(k) plan for employees.
The Compensation Committee believes that this compensation is
reasonable and consistent with its overall compensation
program.
NONQUALIFIED DEFERRED COMPENSATION
The Company does not have a nonqualified deferred compensation plan
and the Compensation Committee currently does not anticipate
establishing such a plan.
COMPARISON OF EXECUTIVE TOTAL COMPENSATION
Based on public compensation information obtained by Equilar, total
compensation in 2021 was approximately 50th percentile for Mr.
Reitz. Messrs. Martin and Troyanovich total compensation was
approximately at the 75th percentile of the peer group. Mr. Eheli's
total compensation was approximately at the 50th percentile of the
peer group based on his full year salary.
EMPLOYMENT AGREEMENTS
At December 31, 2021, the Company had outstanding employment
agreements with each of the named executive officers of the
Company. These agreements provide that the individuals would not
receive any separation benefits if they voluntarily leave the
Company. The agreements contain change in control provisions as
detailed below.
EMPLOYMENT AGREEMENTS PROVIDING PAYMENTS ON A CHANGE IN
CONTROL
Mr. Reitz and Mr. Troyanovich signed employment agreements
effective December 22, 2015. The agreements were originally
effective for one year from their respective effective dates and
each automatically renews for successive one-year renewal periods
unless notice of nonrenewal is given in accordance with the
provisions of the agreement. The agreements provide for four weeks
of paid vacation. Mr. Reitz's agreement was amended December 7,
2016, to reflect his change in title to President and Chief
Executive Officer, including an increase in base salary. Mr. Martin
signed an employment agreement effective June 14, 2018. Mr.
Martin's agreement is effective for two years from its effective
date and automatically renews for successive one-year renewal
periods unless notice of nonrenewal is given in accordance with the
provisions thereof. The agreement provides four weeks of paid
vacation.
Pursuant to the employment agreements for Messrs. Reitz and
Troyanovich, in the event of the executive’s voluntary termination
for good reason or involuntary termination without cause (in each
case as defined in the applicable agreement), subject to the
executive’s execution and non-revocation of a release of claims,
the Company shall (i) pay and continue all employee benefit
programs offered to the Company’s executives (the “Standard
Executive Benefits”) for both the balance of the calendar year in
which the executive is terminated or leaves the Company's employ
and also for the following calendar year; (ii) pay 100% of
prevailing executive’s base salary for both the balance of the
calendar year in which the executive is terminated or leaves the
Company’s employ and also for the following calendar year; (iii)
provide fully-paid medical and dental coverage for the remaining
portion of executive’s employment term; (iv) 100% vest any stock
options and Company match under the Company’s 401(k) plan; and (v)
pay any bonus compensation and incentive compensation for both the
balance of the calendar year in which the executive terminated
employment and also for the following calendar year (collectively
referred to as the “Termination Payments”). In the event of a
change in control, if the executive’s employment is terminated
(whether voluntarily or involuntarily), the executive would be
entitled to the Termination Payments. Additional detail on
potential payments to Messrs. Reitz and Troyanovich can be found
below in “Potential Payments upon Termination or Change in
Control.” The executives are subject to a customary perpetual
confidential information covenant and three-year non-competition
covenants.
Pursuant to the employment agreement for Mr. Martin, in the event
of executive’s voluntary termination for good reason or involuntary
termination without cause, subject to executive’s execution and
non-revocation of a release of claims, the Company shall (i) pay
100% of executive’s base salary for 12 months following the
separation date; (ii) a pro-rated bonus for the year of termination
based on the achievement of applicable performance goals for the
year and the number of days that executive was employed; (iii)
provide fully-paid COBRA coverage for the greater of the number of
months remaining in the employment period or 12 months and (iv)
cause all outstanding stock options and restricted stock, if any,
to be 100% vested. In the event of a change in control, if Mr.
Martin’s employment is terminated by the executive for any reason
within six months following the change in control, he would
be
entitled to the payments listed in the previous sentence.
Additional detail on potential payments to Mr. Martin can be found
below in “Potential Payments upon Termination or Change in
Control.”
For the purpose of each of the executive’s employment agreements, a
"change in control of the company" means:
(i) any person or entity acquires direct or
indirect beneficial ownership (as defined in the Exchange Act) of
more than 50% of the outstanding voting securities of Titan;
or
(ii) the stockholders of Titan approve, or
Titan otherwise effects, enters into, or approves, (A) a merger or
consolidation of Titan with or into any other person or entity; (B)
an agreement for the sale or disposition (in one transaction or a
series of transactions) of all or substantially all of the assets
of Titan; (C) a plan of complete liquidation of Titan; or (D) any
transaction similar to any of the foregoing, other than, in the
case of both (ii)(A) and (ii)(B) above, a merger, consolidation, or
sale that would result in the voting securities of Titan
outstanding immediately prior thereto controlling or continuing to
represent, directly or indirectly, either by remaining outstanding
or by being converted into equity securities of the surviving
person or entity, at least 50% of the total outstanding voting
securities of Titan or the surviving person or entity outstanding
immediately after such transaction.
In the event of a termination due to the executive’s death, the
employment agreements provide that the Company would pay
executive’s beneficiary or estate an amount equal to all earned but
unpaid base salary plus an additional six months of base salary.
Additionally, for Messrs. Reitz and Troyanovich, the Company would
pay an amount equal to 50% of the executive’s base salary to the
executive’s beneficiaries or estate for the remainder of the
employment term (or the extended term) and provide the Standard
Executive Benefits for a period of up to six months to the
executive’s family. For Mr. Martin, the Company would pay 100% of
his beneficiaries’ COBRA premiums for a period ending on the later
of the expiration of the employment period in which the executive’s
death occurred or a period of 12 months (provided that these
beneficiaries otherwise remain eligible for COBRA
coverage).
In the event of a termination due to a qualifying disability under
the employment agreement, the Company would pay the executive (i) a
lump sum equal to any accrued but unpaid base salary and (ii) base
salary in monthly installments for a period of 24 months following
the termination; provided that such amount shall be reduced by any
Company-provided disability insurance payments. Additionally, for
Messrs. Reitz and Troyanovich, the Company would provide the
Standard Executive Benefits for the 24-month period. For Mr.
Martin, the Company would pay 100% of executive’s COBRA premiums
(provided executive remains eligible for COBRA coverage) for the
applicable COBRA statutory period, but not more than 24 months
following the termination due to disability.
In the event of a termination for cause due to the executive's
failure or refusal to perform the executive’s duties under the
employment agreement or as assigned to executive by the CEO (as
applicable) or by the Board of Directors, the Company is required
to pay Messrs. Reitz and Troyanovich 50% of the executive’s base
salary and continue the Standard Executive Benefits for a period of
six months following termination. For other events of termination
for cause, the Company has no further obligations to the executive
upon termination. In the event that Mr. Martin’s employment is
terminated for cause, Mr. Martin would receive any accrued but
unpaid base salary and any vested employee benefits (other than
severance plans) through the termination date.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
25
|
EXECUTIVE OFFICERS
The names, ages, and positions of all executive officers of the
Company are listed below, followed by a brief account of their
business experience during the past five years. Information
pertaining to Mr. Reitz, who both serves on the Board of Directors
and is Titan’s President and CEO, may be found in the "Nominees"
section of Proposal #1 above. Officers are normally appointed
annually by the Board of Directors at a meeting immediately
following the annual meeting of stockholders. There is no other
arrangement or understanding between any officer and any other
person pursuant to which an officer was selected.
DAVID A. MARTIN
Mr. Martin, 54, joined the Company in June 2018 as Chief Financial
Officer. Prior to joining Titan, Mr. Martin served from 1993 to
2018 in various roles at Aegion Corporation, a global
technology/service provider maintaining, protecting and
strengthening infrastructure, primarily pipelines, that was listed
on the NASDAQ Global Select Market, until it was acquired in May
2021. Mr. Martin’s roles included Chief Financial Officer from 2007
to November 2017.
MICHAEL G. TROYANOVICH
Mr. Troyanovich, 64, joined the Company in August 2011 as Assistant
General Counsel. Mr. Troyanovich was appointed Secretary in
December 2012, and General Counsel in June 2013.
ANTHONY C. EHELI
Mr. Eheli, 44, joined the Company in March 2021 as Vice President
and Chief Accounting Officer. Prior to joining Titan, Mr. Eheli
served from 2011 to 2021 in various roles at Danaher Corporation,
including as a Global Director of Financial Planning and Analysis
and as a Global Corporate Controller of two separate divisions of
Danaher.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
26
|
COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following tables summarize the compensation for the Company's
named executive officers as follows: (i) Mr. Reitz, President and
Chief Executive Officer; (ii) Mr. Martin, Senior Vice President and
Chief Financial Officer; (iii) Mr. Troyanovich, Secretary and
General Counsel; and (iv) Mr. Eheli, Vice President and Chief
Accounting Officer.
2021 SUMMARY COMPENSATION TABLE
The 2021, 2020, and 2019 compensation for the Company's named
executive officers was as follows:
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Name and Principal Position
|
Year |
Salary
($) |
Bonus
($) |
2020 Special Bonus
($) |
Stock Awards
($)(a)
|
|
|
|
All Other Compensation
($)(b)
|
Total
($) |
|
Paul G. Reitz |
2021
|
900,000 |
|
1,000,000 |
|
— |
|
2,573,300 |
|
|
|
|
75,030 |
|
4,548,330 |
|
|
President and Chief Executive Officer |
2020
|
900,000 |
|
485,000 |
|
1,500,000 |
|
125,300 |
|
|
|
|
34,567 |
|
3,044,867 |
|
|
|
2019
|
900,000 |
|
425,000 |
|
— |
|
— |
|
|
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|
66,308 |
|
1,391,308 |
|
|
David A. Martin |
2021
|
400,000 |
|
500,000 |
|
— |
|
852,800 |
|
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8,580 |
|
1,761,380 |
|
|
SVP and Chief Financial Officer |
2020
|
400,000 |
|
225,000 |
|
640,000 |
|
89,500 |
|
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8,505 |
|
1,363,005 |
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|
2019
|
400,000 |
|
200,000 |
|
— |
|
— |
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19,585 |
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619,585 |
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Michael G. Troyanovich |
2021
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350,000 |
|
190,000 |
|
— |
|
636,650 |
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7,875 |
|
1,184,525 |
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Secretary and General Counsel |
2020
|
350,000 |
|
120,000 |
|
540,000 |
|
80,550 |
|
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|
|
7,875 |
|
1,098,425 |
|
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|
2019
|
350,000 |
|
110,000 |
|
— |
|
— |
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17,662 |
|
477,662 |
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Anthony C. Eheli(c)
|
2021
|
224,054 |
|
110,000 |
|
— |
|
100,054 |
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2,063 |
|
436,171 |
|
Vice President and
Chief Accounting Officer |
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(a)For
2021, represents the grant date fair market value of 2021
restricted stock and performance share awards computed in
accordance with FASB ASC Topic 718. Fair market value is defined as
the mean between the high and low stock prices on the date of the
award. Excludes the effect of estimated forfeitures.
(b)All
other compensation for 2021 is comprised of the following: Mr.
Reitz, $67,964 for personal usage of Company aircraft and 401(k)
match; Mr. Martin, Mr. Troyanovich and Mr. Eheli, 401(k) match. The
named executive officers are eligible to participate in the 401(k)
plan offered to Titan's non-bargaining employees. Part of the
amounts included in all other compensation for Mr. Reitz reflects
personal aircraft usage received during 2021. The Company
determined the expense associated with such personal aircraft usage
in accordance with Item 402(c) of Regulation S-K, which requires
such benefits to be valued on the basis of the aggregate
incremental cost to the Company. To determine the incremental cost
of personal use of corporate aircraft, the Company multiplies the
number of hours of personal flight usage (including “deadhead”
flights) by the hourly cost of fuel (Company annual average) and
the hourly cost of engine maintenance (where such cost is based on
hours of use), and then adds per flight fees such as landing, ramp
and hangar fees, catering, contract pilot fees and other
miscellaneous trip related expenses.
(c)Mr.
Eheli joined the Company in March 2021 as Vice President and Chief
Accounting Officer.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
27
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Compensation of Named Executive Officers |
2021 GRANTS OF PLAN-BASED AWARDS
The 2021 grants of plan-based awards under the incentive plan for
the Company's named executive officers were as
follows:
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Estimated Future Payouts Under Equity Incentive Plan
Awards(2)
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Name |
Grant Date |
Threshold
(#) |
Target
(#) |
Maximum
(#) |
All Other Stock Awards: Number of Shares of Stock or
Units
|
All Other Option Awards: Number of Securities Underlying
Options |
Exercise or Base Price of Option Awards
($) |
|
Grant Date Fair Value of Stock and Option Awards
($) |
|
|
Mr. Reitz |
03/25/2021 |
65,000 |
65,000 |
65,000 |
— |
— |
— |
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|
573,300 |
|
(1)
|
|
|
12/28/2021 |
46,168 |
184,672 |
230,840 |
— |
— |
— |
|
|
2,000,000 |
|
(2)
|
|
Mr. Martin |
03/25/2021 |
40,000 |
40,000 |
40,000 |
— |
— |
— |
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|
352,800 |
|
(1)
|
|
|
12/28/2021 |
11,542 |
46,168 |
57,710 |
— |
— |
— |
|
|
500,000 |
|
(2)
|
|
Mr. Troyanovich |
03/25/2021 |
32,500 |
32,500 |
32,500 |
— |
— |
— |
|
|
286,650 |
|
(1)
|
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|
12/28/2021 |
8,079 |
32,318 |
40,397 |
— |
— |
— |
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|
350,000 |
|
(2)
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|
Mr. Eheli |
3/25/2021 |
11,344 |
11,344 |
11,344 |
— |
— |
— |
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|
100,054 |
|
(1)
|
(1) Reflects an award of restricted stock that only has a
service-based component; generally vest in three substantially
equal amounts on the first, second and third anniversary of the
grant date. Calculated based on the $8.82 average of the high and
low price on the March 25, 2021 grant date for Mr. Reitz, Mr.
Martin, Mr. Troyanovich and Mr. Eheli.
(2) The amounts shown represent the threshold, target and maximum
payouts under performance share awards that were awarded in 2021 as
described more fully in the "2021 Performance Share Awards" section
of the Compensation Discussion and Analysis. The amounts are
calculated based on the $10.82 closing price on the December 28,
2021 grant date for Mr. Reitz, Mr. Martin, and Mr. Troyanovich and
assume, for purposes of this calculation, that the target number of
shares issuable under the award are granted.
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END
The table below shows the outstanding equity awards at
December 31, 2021, for the named executive officers. These
equity awards were granted under the Incentive Plan.
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Name |
|
|
|
|
Equity Incentive Plan Awards: Number of Unearned Shares That Have
Not Vested
(#)(a)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned
Shares That Have Not Vested
($)(b)
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Mr. Reitz |
|
|
|
|
296,339 |
|
3,247,875 |
|
|
|
|
Mr. Martin |
|
|
|
|
119,501 |
|
1,309,731 |
|
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|
|
Mr. Troyanovich |
|
|
|
|
94,818 |
|
1,039,205 |
|
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|
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Mr. Eheli |
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|
11,344 |
|
124,330 |
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(a)The
amounts represent awards of restricted stock granted in fiscal
years 2019-2021, as follows: (a) for Mr. Reitz, 46,667 shares of
restricted stock granted March 25, 2020, 65,000 shares of
restricted stock granted March 25, 2021, and performance share
awards with a target of 184,672 granted December 28, 2021; (b) Mr.
Martin, 33,333 shares of restricted stock granted March 25, 2020,
40,000 shares of restricted stock granted March 25, 2021, and
performance share awards with a target of 46,168 granted December
28, 2021; Mr. Troyanovich, 30,000 shares of restricted stock
granted March 25, 2020, 32,500 shares of restricted stock granted
March 25, 2021, and performance share awards with a target of
32,318 granted December 28, 2021; and Mr. Eheli, 11,344 shares of
restricted stock granted March 25, 2021.
(b)Market
value calculated as of December 31, 2021, based on $10.96, the
December 31, 2021 closing price of Titan's Common Stock
multiplied by the number of unvested shares.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
28
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Compensation of Named Executive Officers |
2021 OPTION EXERCISES AND STOCK VESTED
The following table summarizes the shares of restricted stock that
vested during the year ended December 31, 2021, for each of
the named executive officers. There were no stock options exercised
during 2021.
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Stock Awards |
|
Name |
|
|
Number of Shares Acquired on Vesting
(#)
|
Value Realized on Vesting
($) |
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Mr. Reitz |
|
|
46,666 |
391,761 |
|
|
Mr. Martin |
|
|
26,667 |
239,120 |
|
|
Mr. Troyanovich |
|
|
25,000 |
211,975 |
|
|
Mr. Eheli |
|
|
— |
— |
|
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN
CONTROL
This section quantifies certain compensation that would have been
payable under existing compensation plans and arrangements,
including the employment agreements described in “Employment
Agreements Providing Payments on a Change in Control” above, had a
named executive officer’s employment terminated and/or a change in
control occurred on December 31, 2021. Such calculations were
made using each executive’s compensation as of December 31,
2021 and, where applicable, the $10.96 closing price of the
Company’s Common Stock on December 31, 2021, the last trading
day of the year. Since many factors (e.g., the time of year when
the event occurs and the then-current price of Common Stock) could
affect the nature and amount of benefits a named executive officer
could potentially receive, any amounts paid or distributed upon a
future termination may be different from those shown in the tables
below.
TERMINATION IN CONNECTION WITH A CHANGE IN CONTROL
In the event of a change in control, if a named executive officer’s
employment is terminated (whether voluntarily or involuntarily)
and, solely with respect to Mr. Martin, the termination occurs
within six months of the change in control, such named executive
officer would be entitled to the following (assuming such change in
control and termination occurred effective December 31,
2021):
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|
|
|
|
|
|
|
|
|
|
|
Description |
|
Mr. Reitz
($) |
Mr. Martin
($) |
Mr. Troyanovich
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash compensation - Salary due(a)
|
|
900,000 |
|
400,000 |
|
350,000 |
|
|
Cash compensation - Bonus payment(b)
|
|
900,000 |
|
400,000 |
|
175,000 |
|
|
Group medical/dental(c)
|
|
22,836 |
|
22,836 |
|
22,836 |
|
|
Acceleration of restricted stock(d)
|
|
— |
|
803,730 |
|
— |
|
|
Acceleration of performance share units(e)
|
|
2,024,005 |
|
506,001 |
|
354,205 |
|
|
Total |
|
3,846,841 |
|
2,132,567 |
|
902,041 |
|
(a)Cash
compensation amounts would be paid in a lump sum at time of
termination.
(b)Bonus
payment is based on the target bonus amount for each named
executive officer.
(c)Calculated
based on the family COBRA rate for 2021 (which is $1,903 per month)
multiplied by the number of months left in the term.
(d)Market
value calculated as of December 31, 2021, based on $10.96, the
December 31, 2021 closing price of Titan's Common Stock
multiplied by the number of unvested shares.
(e)Market
value calculated as of December 31, 2021, based on $10.96, the
December 31, 2021 closing price of Titan's Common Stock
multiplied by 100% equivalent number of unvested performance
shares.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
29
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|
Compensation of Named Executive Officers |
RETIREMENT OR VOLUNTARY/INVOLUNTARY TERMINATION OF
EMPLOYMENT
If a named executive officer’s employment is involuntarily
terminated by the Company without cause or a named executive
officer terminates employment for good reason, subject to such
named executive officer’s execution and nonrevocation of a release
of claims, each of the employment agreements provides that such
named executive officer would be entitled to the following
(assuming such termination occurred effective December 31,
2021):
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|
|
|
|
|
|
|
|
|
|
|
Description |
|
Mr. Reitz
($) |
Mr. Martin
($) |
Mr. Troyanovich
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash compensation - Salary due(a)
|
|
900,000 |
|
400,000 |
|
350,000 |
|
|
Cash compensation - Bonus payment(b)
|
|
900,000 |
|
400,000 |
|
175,000 |
|
|
Group medical/dental(c)
|
|
22,836 |
|
400,000 |
|
400,000 |
|
|
Acceleration of restricted stock(d)
|
|
— |
|
803,730 |
|
— |
|
|
Total |
|
1,822,836 |
|
2,003,730 |
|
925,000 |
|
(a)Cash
compensation amounts would be paid in a lump sum at time of
termination.
(b)Bonus
payment is based on the target bonus amount for each named
executive officer.
(c)Calculated
based on the family COBRA rate for 2021 (which is $1,903 per month)
multiplied by the number of months left in the term.
(d)Market
value calculated as of December 31, 2021, based on $10.96, the
December 31, 2021 closing price of Titan's Common Stock
multiplied by the number of unvested shares.
PAYMENTS ON TERMINATION DUE TO DEATH OR DISABILITY
If a named executive officer’s employment is terminated due to
death, the employment agreements provides that such named executive
officer would have been entitled to the following (assuming
termination due to death occurred on December 31,
2021):
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|
|
|
|
|
|
|
|
|
|
|
Description |
|
Mr. Reitz
($) |
Mr. Martin
($) |
Mr. Troyanovich
($) |
|
|
|
|
|
|
|
|
|
|
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|
Cash compensation - Salary due(a)
|
|
675,000 |
|
200,000 |
|
262,500 |
|
|
Group medical/dental(b)
|
|
22,836 |
|
22,836 |
|
22,836 |
|
|
Acceleration of restricted stock(c)
|
|
1,223,870 |
|
803,730 |
|
685,000 |
|
|
Total |
|
1,921,706 |
|
1,026,566 |
|
970,336 |
|
(a)Cash
compensation amounts would be paid in a lump sum at time of
termination.
(b)Calculated
based on the family COBRA rate for 2021 (which is $1,903 per month)
multiplied by the number of months left in the term.
(c)Pursuant
to applicable restricted stock agreements, all shares of restricted
stock vest on death. The value is calculated based on $10.96, the
closing price per share of the Company's common stock on
December 31, 2021.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
30
|
|
|
|
|
Compensation of Named Executive Officers |
If a named executive officer’s employment is terminated due to
disability, each of the employment agreements provides that such
named executive officer would have been entitled to the following
(assuming termination due to disability occurred on
December 31, 2021):
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|
|
|
|
|
|
|
|
|
|
|
Description |
|
Mr. Reitz
($) |
Mr. Martin
($) |
Mr. Troyanovich
($) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash compensation - Salary due(a)
|
|
1,800,000 |
|
800,000 |
|
700,000 |
|
|
Group medical/dental(b)
|
|
45,672 |
|
34,254 |
|
45,672 |
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|
Acceleration of restricted stock(c)
|
|
1,223,870 |
|
803,730 |
|
685,000 |
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Total |
|
3,069,542 |
|
1,637,984 |
|
1,430,672 |
|
(a)Cash
compensation amounts would be paid in monthly installments over a
24-month period. The above amounts assume no reduction for any
payments under the Company's disability plans.
(b)Calculated
based on the family COBRA rate for 2021 (which is $1,903 per month)
multiplied by 24 months for Mr. Reitz and Mr. Troyanovich and 18
months for Mr. Martin.
(c)Pursuant
to applicable restricted stock agreements, all shares of restricted
stock vest on termination due to disability. The value is
calculated based on $10.96, the closing price per share of the
Company's stock on December 31, 2021.
PAYMENTS ON TERMINATION FOR CAUSE
In the event that the Company terminates a named executive
officer’s employment for failure or refusal to perform duties
assigned under the employment agreement or assigned to him by the
Company's CEO, Chairman or Board of Directors, as described under
his employment agreement, such named executive officer would have
been entitled to the following (assuming termination for cause
occurred on December 31, 2021):
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|
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|
|
|
|
|
|
|
|
|
Description |
|
Mr. Reitz
($) |
Mr. Martin
($) |
Mr. Troyanovich
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash compensation - Salary due(a)
|
|
450,000 |
|
— |
|
87,500 |
|
|
Group medical/dental(b)
|
|
11,418 |
|
— |
|
11,418 |
|
|
Total |
|
461,418 |
|
— |
|
98,918 |
|
(a)Cash
compensation amounts would be paid in monthly installments over a
six-month period.
(b)Calculated
based on the family COBRA rate for 2021 (which is $1,903 per month)
multiplied by six months.
CEO PAY RATIO
As required by Section 953(b) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, and Item 402(u) of Regulation S-K, the
Company is providing the following information about the ratio of
the annual total compensation of the median Titan employee and the
annual total compensation of Mr. Paul G. Reitz, President and Chief
Executive Officer, in each case, during 2021.
To identify the median employee, the Company used annual base
salary (or comparable cash compensation) of each of its active
employees (other than the CEO) employed as of December 31, 2021, as
a consistently applied compensation measure, annualizing the base
salary for employees hired after January 1, 2021. The salaries of
Titan's non-U.S. employees were converted into U.S. dollars at the
applicable December 31, 2021, exchange rate. Although
permitted, the Company did not use the 5% de minimis exemption to
exclude or eliminate any of its non-U.S. employees, nor were any
material assumptions or estimates made, in the median employee
determination. After identifying the median employee, the Company
calculated the annual total compensation for that employee using
the same methodology used for the CEO in the 2021 Summary
Compensation Table. The median employee received annual total
compensation of $36,943. The identified median employee was an
employee at the Company's North
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Titan International, Inc. |
/ |
2022 Proxy Statement |
31
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|
Compensation of Named Executive Officers |
American operations. Titan's CEO, who is located in the U.S.,
received annual total compensation of $4,548,330, which yields a
2021 pay ratio of approximately 123 to 1.
Because the rules for identifying the median employee and
calculating the pay ratio allow companies to use different
methodologies, to apply certain exemptions, and to make reasonable
estimates and assumptions, the pay ratio calculated by the Company
may not be comparable to the pay ratio reported by other
companies.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
32
|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
During 2021, Richard M. Cashin Jr., Gary L. Cowger, Mark H.
Rachesky, MD and Anthony L. Soave served on the Compensation
Committee. None of the persons who served on the Compensation
Committee during 2021 was an officer or employee of the Company
during 2021, or at any time has been an officer of the Company. In
addition, none of the Company’s executive officers serves, or has
served during the last completed year, as a member of the board of
directors or compensation committee of any other entity that has or
had one or more of its executive officers serving as a member of
the Compensation Committee or the Board of Directors.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
33
|
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402(b) of
Regulation S-K with Titan's management. Based on such review and
discussions, the Compensation Committee recommended to the Board of
Directors that the Compensation Discussion and Analysis be included
in this Proxy Statement for filing with the SEC and in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2021.
Members of the Compensation Committee:
•Richard
M. Cashin, Jr., Chairman
•Gary
L. Cowger
•Max
H. Rachesky, MD
•Anthony
L. Soave
•Laura
K. Thompson
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Titan International, Inc. |
/ |
2022 Proxy Statement |
34
|
CORPORATE GOVERNANCE
INDEPENDENCE
The Board of Directors has determined that six of the Company's
eight directors meet the independence requirements for directors
set forth in the NYSE listing standards. The independent directors
are: Richard M. Cashin Jr., Gary L. Cowger, Max A. Guinn, Mark H.
Rachesky, MD, Anthony L. Soave, and Laura K. Thompson. The
directors who are not independent are Paul G. Reitz, the President
and Chief Executive Officer, and Maurice M. Taylor Jr., the
Chairman of the Board and the Company's former Chief Executive
Officer. Each of the directors serving on any of the Audit
Committee, the Compensation Committee, the Corporate Governance
Committee, and the Nominating Committee meets the independence
requirements for directors serving on such committees under the
standards of the NYSE.
MEETINGS OF DIRECTORS
The independent directors of the Board of Directors meet, without
the presence of any director who is not independent, for regularly
scheduled sessions and at various other times throughout the year
if deemed necessary. When the independent directors of the Board of
Directors or respective committees thereof meet in executive
session without management, a temporary chair is selected from
among the directors present to preside at the executive
session.
CHARTERS
The Company has adopted charters for each of its Audit,
Compensation, Corporate Governance, and Nominating Committees
(collectively, the Charters). The Charters are published on the
Company's website: www.titan-intl.com. The Company will provide,
without charge, copies of the Charters to any stockholder upon
written request to the Corporate Secretary, Titan International,
Inc., 1525 Kautz Road, Suite 600, West Chicago, Illinois,
60185.
CORPORATE GOVERNANCE POLICIES AND CODE OF BUSINESS
CONDUCT
The Company's Corporate Governance Policies and Code of Business
Conduct are published on the Company's website: www.titan-intl.com.
The Company will provide, without charge, a copies of the Corporate
Governance Policies and Code of Business Conduct to any stockholder
upon written request to the Corporate Secretary, Titan
International, Inc., 1525 Kautz Road, Suite 600, West Chicago,
Illinois, 60185.
HEDGING POLICY
The Company’s insider trading policy prohibits officers, directors
and employees (each, a Covered Person) from entering into any
hedging transactions relating to Titan securities, such as
purchases on margin, short sales, short-term trading (including any
transaction, the effect of which would be to sell Titan stock
purchased in the open market if the Covered Person holds the shares
for less than six months), buying or selling put or call options,
pledging Company stock and other hedging transactions.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
35
|
COMMUNICATION WITH THE BOARD OF DIRECTORS
Stockholders or other interested parties may communicate with the
Board of Directors, or any individual member or members of the
Board of Directors, by sending correspondence in writing to its or
their attention as follows: c/o Corporate Secretary, Titan
International, Inc., 1525 Kautz Road, Suite 600, West Chicago,
Illinois, 60185. Any written communication will be forwarded to the
Board of Directors, or the specified member or members of the Board
of Directors, for consideration.
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS
Pursuant to the Company’s Corporate Governance Policies, members of
the Board of Directors are expected to attend the Company’s Annual
Meetings of Stockholders, whenever possible. The Company’s
directors typically attend such annual meetings, and, in that
regard, all directors attended the Annual Meeting of Stockholders
for 2021.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
36
|
CORPORATE GOVERNANCE
INITIATIVES ON ESG
Titan is committed to be a positive force in the lives of our
employees, customers and in the communities they work and live.
Over the last several months, the Company has made significant
progress on the environmental, social and governance (ESG) areas by
creating and updating various policies, as well as preparing new
forms of monitoring and disclosing data on our operations. The
following are some of our most recent initiatives on
ESG:
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ENVIRONMENT
|
At all its facilities around the world, Titan strives to monitor
and mitigate the impacts of its operation on the environment and to
comply with all relevant regulations and legislation. The Company
is committed to responsible sourcing and keeping its supply chain
free of conflict minerals. In 2021 Titan adopted new polices
environmental and conflict minerals policies. In 2022 Titan
continues to develop new environmental guidelines to outline our
approach and strategy regarding energy consumption, carbon
emissions and waste. Finally, divisions of our Company are working
with customers to integrate environmental consideration in new
product designs. |
|
SOCIAL
|
Titan is dedicated to increasing diversity in all levels of the
Company. Governing documents have been updated to reinforce the
commitment to expand the representation of women and minorities by
making diversity a focus in the recruitment process. In 2021, Titan
implemented a new enterprise-level policy on diversity and
inclusion, which includes updated anti-discrimination and
anti-harassment procedures. The Company also adopted new policies
on human rights, labor management and occupational health and
safety. |
|
GOVERNANCE
|
Titan believes that its corporate governance policies are effective
in aligning the Company’s strategies and goals with those of its
stakeholders while fostering appropriate accountability. In 2021,
the Board of Directors is enhancing its oversight of ESG practices
by reviewing and approving a series of new policies, expansion of
existing policies and governing documents, to help ensure Titan’s
practices are aligned with industry standards and best serve its
stakeholders.
|
Additionally, in 2021 Titan became a signatory to the UN Global
Compact, reinforcing our commitment to its principles focusing on
universal human rights, labor, the environment, and
anti-corruption.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
37
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Common Stock by each person who is known by the
Company to own beneficially more than 5% of the Company's common
stock. As of the Record Date, 62,656,877 shares of the Company
common stock were issued and outstanding.
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|
|
Shares Beneficially Owned |
|
Name and Address of Beneficial Owner |
Number |
|
Percent |
|
BlackRock Inc.
55 East 52nd Street
New York, NY 10055
|
8,341,089 |
(a) |
13.3% |
|
MHR Fund Management LLC and Mark H. Rachesky, MD
1345 Avenue of the Americas, 42nd Floor
New York, NY 10105
|
8,290,768 |
(b) |
13.2% |
|
Renaissance Technologies LLC
800 Third Avenue
New York, NY 10022
|
3,844,940 |
(c) |
6.1% |
|
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
|
3,291,873 |
(d) |
5.3% |
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|
(a) Based on information contained in a
Schedule 13G/A related to BlackRock Inc. filed with the SEC on
January 27, 2022. As reported in the Schedule 13G/A, BlackRock Inc.
has sole voting power with respect to 8,286,651 shares of Common
Stock and sole dispositive power with respect to 8,341,089 shares
of Common Stock.
(b) Based on information contained in a
Schedule 13D/A filed with the SEC on February 25, 2019 (the MHR
13D) by MHR Institutional Partners III LP, MHR Institutional
Advisors III LLC, MHR Fund Management LLC, MHR Holdings LLC and
Mark H. Rachesky, M.D. (collectively, the ‘‘MHR Reporting
Persons’’). The MHR Reporting Persons reported the following in the
Schedule 13D/A: (i) MHR Institutional Partners III LP and MHR
Institutional Advisors III LLC each has sole voting and dispositive
power over 7,200,427 shares of Common Stock; and (ii) each of MHR
Fund Management LLC and MHR Holdings LLC each has sole voting and
dispositive power over 8,005,000 shares of Common Stock. Based on
information contained in the MHR 13D and a Form 4 filed on June 21,
2021 (the MHR Form 4), Dr. Rachesky and MHR Fund Management LLC may
be deemed to beneficially own 8,290,768 shares of Common Stock,
which includes (A) all shares of Common Stock reported by the other
MHR Reporting Persons by virtue of Dr. Rachesky’s position as the
managing member of the other MHR Reporting Persons, and (B) 19,650
of restricted stock units which vests on June 16, 2022. In
addition, Dr. Rachesky has an aggregate of 99,000 unissued shares
of Common Stock issuable upon the exercise of options
exercisable.
(c) Based on information contained in a
Schedule 13G/A related to Renaissance Technologies LLC filed with
the SEC on February 11, 2022. As reported in the Schedule 13G/A,
Renaissance Technologies LLC has sole voting power with respect to
3,608,396 shares of Common Stock and dispositive power with respect
to 3,844,940 shares of Common Stock.
(d) Based on information contained in a
Schedule 13G/A related to The Vanguard Group filed with the SEC on
February 10, 2022. As reported in the Schedule 13G, The Vanguard
Group has aggregate beneficially ownership of 3,291,873 shares of
Common Stock and has sole dispositive power over 3,231,027 shares,
shared dispositive power over 60,846 shares and shared voting power
over 46,337 shares.
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Titan International, Inc. |
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2022 Proxy Statement |
38
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Security Ownership of Certain Beneficial Owners and
Management |
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of the Record Date by
(i) each director and nominee for director, (ii) each of the named
executive officers, and (iii) all directors and executive officers
as a group. The business address of each of the persons listed in
the following table, except Dr. Rachesky, is c/o Titan
International, Inc., 1525 Kautz Road, Suite 600, West Chicago,
Illinois, 60185. The business address of Dr. Rachesky is c/o MHR
Fund Management LLC, 1345 Avenue of the Americas, 42nd Floor, New
York, NY 10105.
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Shares Beneficially Owned |
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Name |
Number(a)
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|
Percent |
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Mark H. Rachesky, MD |
8,290,768 |
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(b)
|
13.2% |
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Anthony L. Soave |
1,238,143 |
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(c)
|
2.0% |
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Maurice M. Taylor Jr. |
1,031,351 |
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(d)
|
1.6% |
|
Richard M. Cashin Jr. |
743,649 |
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|
1.2% |
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Paul G. Reitz |
292,413 |
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* |
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Max A. Guinn |
196,768 |
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* |
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Gary L. Cowger |
167,143 |
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* |
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Laura K. Thompson |
11,776 |
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* |
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Michael G. Troyanovich |
193,785 |
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* |
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David A. Martin |
174,497 |
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* |
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Anthony C. Eheli |
30,254 |
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* |
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All executive officers & directors as a group (11
persons) |
12,370,547 |
|
|
19.6% |
* Less than one percent
(a) Except for voting powers held jointly
with a person's spouse, represents sole voting and investment power
unless otherwise indicated and includes unissued shares subject to
options exercisable within 60 days after the Record Date, as
follows: Dr. Rachesky, 99,000 shares; Mr. Soave, 135,000 shares,
Mr. Cashin, 135,000 shares; Mr. Taylor, 49,200; all named executive
officers and directors as a group, 464,986 shares.
(b) Based on information contained in the
MHR 13D and the MHR Form 4.
(c) Includes 5,000 shares of Common Stock
beneficially owned by Brambleton Investments LLC, which is managed
by a management company owned by Mr. Soave. Mr. Soave disclaims
beneficial ownership of such securities in excess of his pecuniary
interest.
(d) Includes 619,999 shares held jointly by
Mr. Taylor and his wife as to which they share voting and
dispositive power. Also includes 411,352 shares (or unissued shares
subject to options exercisable) held by Mr. Taylor as to which he
has sole voting and dispositive power.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
39
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Security Ownership of Certain Beneficial Owners and
Management |
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information about shares of Titan
Common Stock authorized for issuance under Titan’s equity
compensation plans, as of December 31, 2021:
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(i)
Number of securities to be issued upon exercise of outstanding
options, warrants and rights |
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(ii)
Weighted-average exercise price of outstanding options, warrants
and rights |
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(iii)
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column
(i)) |
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Equity compensation plans approved by security holders
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453,200 |
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(a)
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14.44 |
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4,291,290 |
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Equity compensation plans not approved by security
holders |
— |
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— |
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— |
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Total |
453,200 |
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14.44 |
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|
4,291,290 |
|
(a)Amount
includes outstanding stock options under the Incentive
Plan.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
40
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Audit Committee has established procedures for the approval of
all related party transactions involving executive officers and
directors. The Audit Committee reviews information pertaining to
related party transactions, if any, that are provided to the Audit
Committee, including disclosures in the director and officer
questionnaires solicited by the Company on an annual basis.
Quarterly, the Company’s Chief Financial Officer presents any
related party transactions or series of transactions expected to
exceed a certain amount to the Audit Committee for review and
approval. The Audit Committee's review process includes the Audit
Committee’s review of the underlying related party transaction
documentation and the Audit Committee obtaining information
regarding the business reasons for the transaction.
The Company sells products and pays commissions to companies
controlled by persons related to the Chairman of the Company, Mr.
Maurice Taylor. The related party is Mr. Fred Taylor, who is
Mr. Maurice Taylor’s brother. Mr. Fred Taylor passed away on
December 13, 2021. The companies that Mr. Fred Taylor is associated
with that do business with Titan include the
following: Blacksmith OTR, LLC; F.B.T. Enterprises;
Green Carbon, Inc.; Silverstone, Inc.; and OTR Wheel Engineering,
Inc. During 2021, sales of Titan product to these companies
were approximately $2.7 million. Titan had trade receivables
due from these companies of approximately $0.2 million at
December 31, 2021. On other sales referred to Titan
from these manufacturing representative companies, commissions were
approximately $2.0 million during 2021.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
41
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STOCKHOLDER PROPOSALS
Any proposal to be presented at the 2023 Annual Meeting of
Stockholders must be received at the principal executive offices of
the Company no later than December 27, 2022, in order to be
considered for inclusion in the Company's Proxy Statement and form
of proxy relating to such Annual Meeting of
Stockholders.
To be considered for presentation at the 2023 Annual Meeting, but
not for inclusion in the Company’s proxy statement and form of
proxy for that meeting, pursuant to Rule 14a-4(c)(1) under the
Exchange Act, proposals must be received by March 10, 2023;
provided, however, that in the event that the date of the 2023
Annual Meeting is changed by more than 30 days from the anniversary
of this year’s meeting date, such a proposal must be received a
reasonable time before the Company sends its proxy materials.
Failure to notify the Company by that date would allow the
Company’s proxy holders to use their discretionary voting authority
(to vote for or against the proposal) when the proposal is raised
at the 2023 Annual Meeting without any discussion of the matter
being included in the Company’s proxy statement.
Any such proposals (regardless of whether such proposal is
submitted for inclusion in the Company’s proxy materials) must
comply in all respects with the rules and regulations of the SEC
relating to stockholder proposals as well as the Company’s
certificate of incorporation and bylaws, and it is suggested that
proponents of any proposals submit such proposals to the Company
sufficiently in advance of the applicable deadline by Certified
Mail-Return Receipt Requested.
Stockholders' proposals should be sent to: Michael G. Troyanovich,
Secretary and General Counsel of Titan International, Inc., 1525
Kautz Road, Suite 600, West Chicago, Illinois, 60185. The Company
reserves the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not
comply with these and other applicable requirements.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
42
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HOUSEHOLDING INFORMATION
Titan has adopted a procedure called "householding," which has been
approved by the SEC. Under this procedure, Titan is delivering only
one copy of the Notice of Internet Availability of Proxy Materials
and, if applicable, only one copy of the Company's 2021 Annual
Report to Stockholders, including its Form 10-K, for the year ended
December 31, 2021, and this Proxy Statement to multiple
stockholders sharing the same address, unless Titan has received
contrary instructions from an affected stockholder. Stockholders
that request to receive printed proxy materials and participate in
householding will continue to receive separate proxy
cards.
Stockholders sharing an address may contact Broadridge Financial
Solutions, Inc. at 1-866-540-7095 or in writing at Broadridge,
Householding Department, 51 Mercedes Way, Edgewood, New York
11717 if they now receive (i) multiple printed copies of the Notice
of Internet Availability of Proxy Materials or, if applicable,
Titan’s Annual Report to stockholders, including its Form 10-K, and
the Proxy Statement and wish to receive only one copy of these
materials in the future or (ii) a single printed copy of the Notice
of Internet Availability of Proxy Materials or, if applicable,
Titan’s Annual Report to stockholders, including its Form 10-K, and
the Proxy Statement and wish to receive separate copies of these
materials in the future.
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Titan International, Inc. |
/ |
2022 Proxy Statement |
43
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COST OF PROXY SOLICITATION
The costs of solicitation of proxies will be borne by the Company.
In addition to the use of the mail, proxies may be solicited
personally or by telephone, facsimile or electronic mail, by
directors, officers, or regular employees of the Company, without
additional compensation. It is contemplated that brokerage houses,
custodians, nominees, and fiduciaries will be requested to forward
the soliciting material to the beneficial owners of the Company's
Common Stock held of record by such persons and will be reimbursed
by the Company for reasonable expenses incurred
therewith.
By Order of the Board of Directors,
/s/ Michael G. Troyanovich
Michael G. Troyanovich
Secretary and General Counsel
West Chicago, Illinois
April 19, 2022
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Titan International, Inc. |
/ |
2022 Proxy Statement |
44
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Titan International, Inc.
1525 Kautz Road, Suite 600
West Chicago, IL 60185
www.titan-intl.com
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