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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. )
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Preliminary Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12 |
Alexander & Baldwin, Inc. | ||||
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(4) | Date Filed: |
LETTER TO OUR SHAREHOLDERS |
To the Shareholders of Alexander & Baldwin, Inc.:
This year, Alexander & Baldwin celebrates the 150th anniversary of the original partnership between our founders, Samuel T. Alexander and Henry P. Baldwin. Our Company has undergone a tremendous transformation from its roots as a small sugar cane farm on Maui to a thriving Hawaii-based commercial real estate leader. While much has changed over 150 years, the foundations of our Company have not waveredwe remain committed to our shareholders, our employees and our communities as "Partners for Hawaii."
Please join us at the 2020 Annual Meeting of Shareholders of Alexander & Baldwin, Inc., to be held in the Hokulei Ballroom, Dole Cannery, 735 Iwilei Road, Honolulu, Hawaii, on Tuesday, April 28, 2020 at 8:00 a.m. HST. We look forward to meeting with you.
Whether or not you plan to attend the Annual Meeting, we encourage you to read the Proxy Statement and vote your shares. You may vote via the Internet, by telephone or by requesting a paper proxy card to complete and return by mail. Specific instructions for shareholders are included in the enclosed proxy or on a Notice of Internet Availability of Proxy Materials being distributed to shareholders on or around March 17, 2020.
Your vote is important and your shares should be represented. Thank you for your continued support of A&B.
Sincerely, | ||
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CHRISTOPHER J. BENJAMIN President and Chief Executive Officer |
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March 17, 2020 |
NOTICE OF ANNUAL MEETING |
822 Bishop Street · Honolulu, Hawaii 96813
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: | Meeting Agenda: | |||||||
Tuesday, April 28, 2020 |
1. | Elect eight directors to serve until the next Annual Meeting of Shareholders and until their successors are duly elected and qualified; | ||||||
Time: | ||||||||
8:00 a.m., Honolulu time |
2. | Conduct an advisory vote on executive compensation; | ||||||
Place: |
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Hokulei Ballroom, Dole Cannery |
3. | Ratify the appointment of the independent registered public accounting firm for the ensuing year; and | ||||||
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4. | Transact such other business as properly may be brought before the meeting or any adjournment or postponement thereof. |
The Board of Directors has set the close of business on February 20, 2020 as the record date for the meeting. Owners of Alexander & Baldwin, Inc. stock at the close of business on that date are entitled to receive notice of and to vote at the meeting. Shareholders will be asked at the meeting to present valid photo identification. Shareholders holding stock in brokerage accounts must present a copy of a brokerage statement reflecting stock ownership as of the record date.
By Order of the Board of Directors, | ||
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ALYSON J. NAKAMURA Vice President and Corporate Secretary |
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March 17, 2020 |
IT
IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE PROMPTLY VOTE VIA
THE INTERNET OR BY TELEPHONE, OR REQUEST A PAPER PROXY CARD TO COMPLETE AND RETURN BY MAIL.
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To assist you in reviewing this Proxy Statement, we would like to call your attention to key elements of this document. The following description is only a summary. For more information, please read the complete Proxy Statement.
Annual Meeting of Shareholders
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Time and Date: | | Tuesday, April 28, 2020, 8:00 a.m. HST | | |||||
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Hokulei Ballroom Dole Cannery 735 Iwilei Road Honolulu, Hawaii |
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Record Date: | | February 20, 2020 | | |||||
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Voting: | | Shareholders as of the record date are entitled to vote. | | |||||
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Admission: | | Shareholders will be asked to present valid photo identification. Shareholders holding stock in brokerage accounts must present a copy of a brokerage statement reflecting stock ownership as of the record date. | | |||||
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Agenda Item | | Board Recommendation | | Page Reference | | |||||||
Election of eight directors | | FOR each director nominee | | 3 | | |||||||
Advisory vote on executive compensation | FOR | 45 | ||||||||||
| Ratification of appointment of Deloitte & Touche LLP as our independent registered public accounting firm | | FOR | | 47 | | ||||||
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The following table provides summary information about each director nominee. Each director nominee is elected until the next Annual Meeting of Shareholders.
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| Name | | Director Since | | Occupation | | Committees | | ||||||||
| Christopher J. Benjamin | | 2016 | | President & Chief Executive Officer, Alexander & Baldwin, Inc. | | | | ||||||||
Robert S. Harrison | 2012 | Chairman, President & Chief Executive Officer, First Hawaiian, Inc. | Nominating & Corporate Governance, Chair Compensation |
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| Stanley M. Kuriyama | | 2012 | |
Chairman of the Board of Alexander & Baldwin, Inc. Retired CEO of Alexander & Baldwin, Inc. |
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Diana M. Laing | 2019 | Retired CFO, American Homes 4 Rent | | |||||||||||||
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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SUMMARY INFORMATION |
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| Name | | Director Since | | Occupation | | Committees | | ||||||||
| Thomas A. Lewis, Jr. | | 2017 | | Retired CEO, Realty Income Corporation | | Compensation |
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Douglas M. Pasquale | 2012 | Founder & CEO of Capstone Enterprises Corporation | Audit, Chair Nominating & Corporate Governance |
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| Michele K. Saito | | 2012 | | President, DTRIC Insurance Company | | Compensation, Chair Nominating & Corporate Governance |
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Eric K. Yeaman | 2012 | Founder & Managing Partner, Hoku Capital LLC | Audit |
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Executive Compensation Linked to Performance
The Company firmly believes in pay for performance and aligning pay with shareholder interests and the Company's business objectives. Accordingly, the majority of executive compensation is tied to performance. In 2019, 78% of the target compensation for our Chief Executive Officer ("CEO"), Christopher Benjamin, was in the form of performance-based pay, consisting of annual incentives (cash) and long-term incentives (equity), with the remaining 22% set as fixed pay. For our other Named Executive Officers, 63% of their target compensation was performance-based with the remaining 37% set as fixed pay*. All elements of executive compensation are generally targeted at the 50th percentile of market pay data. In 2019, our executive compensation program received strong support from shareholders with approximately 97% of say on pay votes cast in favor of the program.
We encourage you to read our Compensation Discussion and Analysis ("CD&A"), which begins on page 20 and describes our pay for performance philosophy and each element of compensation. Our Board of Directors recommends approval, on an advisory basis, of the compensation of our Named Executive Officers, as further described in the CD&A and "Proposal No. 2: Advisory Vote on Executive Compensation" beginning on page 45.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
Table of Contents
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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PROXY STATEMENT
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Why am I receiving these materials?
The Board of Directors of Alexander & Baldwin, Inc. ("A&B" or the "Company") is soliciting proxies for the Annual Meeting of Shareholders to be held on April 28, 2020 and at any adjournment or postponement of the meeting (the "Annual Meeting").
Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the full set of proxy materials?
On or around March 17, 2020, we mailed to our shareholders (other than to certain street name shareholders or those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials, which contains instructions for accessing and reviewing on the Internet all of our proxy materials, including this Proxy Statement and our 2019 Annual Report to Shareholders. In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission ("SEC"), instead of mailing a printed copy of our proxy materials to each shareholder of record, we are furnishing proxy materials on the Internet. This process is designed to expedite shareholders' receipt of proxy materials, lower the cost of the Annual Meeting and help conserve natural resources.
How can I request a paper copy of these materials?
You will not receive a printed copy of the proxy materials unless you request it. If you would prefer to receive printed proxy materials, please follow the instructions for requesting such materials contained in the Notice of Internet Availability of Proxy Materials. This process is designed to expedite shareholders' receipt of proxy materials, lower the cost of the Annual Meeting and help conserve natural resources.
Can I vote using the Internet?
The Notice of Internet Availability of Proxy Materials also provides instructions for voting your shares using the Internet.
Who is entitled to vote at the Annual Meeting?
Shareholders of record at the close of business on February 20, 2020 are entitled to notice of and to vote at the Annual Meeting. On that date, there were 72,306,508 shares of common stock outstanding, each of which is entitled to one vote.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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GENERAL INFORMATION ABOUT THE ANNUAL MEETING |
What is the voting requirement to approve each of the proposals?
Provided a quorum is present, a majority of the votes cast will be necessary for the election of directors, the ratification of the appointment of the independent registered public accounting firm, and the approval, on an advisory basis, of our executive compensation.
What effect do abstentions and broker non-votes have on the proposals?
Abstentions and broker non-votes will be included for purposes of establishing a quorum at the Annual Meeting. However, abstentions and broker non-votes will have no effect on the voting results for any matter, as they are not considered to be votes cast.
Who will bear the cost of soliciting votes for the Annual Meeting?
Officers, employees and directors of A&B and its subsidiaries may, without additional compensation, solicit proxies by telephone or by other appropriate means. Arrangements also will be made with brokerage firms and other persons that are record holders of A&B's common stock to forward proxy soliciting material to the beneficial owners of the stock, and A&B will reimburse those record holders for their reasonable expenses. A&B has retained the firm of D.F. King & Co., Inc. to assist in the solicitation of proxies at a cost of $10,000 plus reasonable out-of-pocket expenses.
May I change my vote or revoke my proxy?
You may revoke your proxy or change your vote any time before it is voted at the Annual Meeting by:
When were the Proxy Statement materials made publicly available?
This Proxy Statement and the enclosed proxy are being mailed to shareholders and are being made available on the Internet at www.alexanderbaldwin.com on or about March 17, 2020.
Who can I contact to obtain directions to the Annual Meeting site?
You may contact Jan Matsumoto at (808) 525-8452 to obtain directions to the site of the Annual Meeting, the Hokulei Ballroom at Dole Cannery, 735 Iwilei Road, Honolulu, Hawaii.
What do the references to the term "A&B Predecessor" mean in this document?
References in this Proxy Statement to "A&B Predecessor" mean Alexander & Baldwin, Inc. prior to its separation from Matson, Inc. on June 29, 2012. A&B converted to a real estate investment trust ("REIT") in 2017.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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PROPOSAL NO. 1: ELECTION OF DIRECTORS
In line with best practices, A&B's directors stand for election annually, and elections are conducted using a majority voting standard in uncontested elections. Eight directors will be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their successors are duly elected and qualified.
Director Nominees and Qualification of Directors. The nominees of the Board of Directors are the eight persons named below. All nominees are current members of the
Board of Directors. The Board
of Directors believes that all nominees will be able to serve. However, if any nominee should decline or become unable to serve for any reason, shares represented by the accompanying proxy will be
voted for the replacement person nominated by the Board of Directors, or the Board may choose to reduce the number of directors serving on the Board. Each director nominee identified below was
unanimously nominated by the Board at the recommendation of the Nominating and Corporate Governance Committee.
While Mr. Kuriyama, who has been with the Company for 28 years, is standing for reelection, he intends to retire from the Board within the next year. He will work with the directors to effect a smooth Board leadership transition. Mr. Kuriyama's intent to retire was not the result of any dispute or disagreement with the Company on any matter.
Under A&B's mandatory retirement policy for directors, W. Allen Doane, who has served as a director of A&B or A&B Predecessor since 1998, is retiring from the Board at the Annual Meeting. In addition to his service as a director, Mr. Doane served as Chief Executive Officer of A&B Predecessor from October 1998 through December 2009 and as Chairman of the Board of A&B Predecessor from April 2006 through December 2009. The Board and management thank Mr. Doane for his years of service and valued advice.
Below are the names, ages (as of March 31, 2020), and principal occupations of each person nominated by the A&B Board, their business experience during at least the last five years, the year each first was elected or appointed a director and qualifications of each director.
Our Nominating Committee is focused on creating a Board that consists of members that have a diversity of professional experience and a combined skill set to help oversee our business effectively. The Board weighs the alignment of Board capabilities with the needs of A&B as part of the Board's self-assessment process. The Nominating Committee's processes for selecting director nominees are described in greater detail in "Certain Information Concerning the Board of DirectorsNominating Committee Processes" below.
Our Board members have a diverse range of perspectives and are knowledgeable about our businesses. Each director contributes in establishing a board climate of trust and respect, where deliberations are open and constructive. A&B's business strategy is Hawaii-focused and, accordingly, the Board believes it is valuable to shareholders that the board reflects a balanced mix that includes Hawaii-based executives who can provide extensive local knowledge and insight.
Skills Aligned with Board Needs
Strong combined skillset* and local Hawaii expertise effectively position the Board to navigate Hawaii's unique business environment:
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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PROPOSAL NO. 1 |
In selecting nominees, the Board has considered the factors noted above; the current mix of skills and experience represented by our directors; and the qualifications of each nominated director, which includes the factors reflected as follows.
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Christopher J. Benjamin Age: 56 Director Since: 2016 |
Director Qualifications: As a member of A&B's and A&B Predecessor's senior management team for over a decade, Mr. Benjamin, who is President and Chief Executive Officer of A&B, brings to the Board an in-depth knowledge of all aspects of the Company's real estate operations, including commercial real estate and real estate development. Having served for more than seven years as Chief Financial Officer, he has thorough knowledge of the financial management of the Company, including accounting, treasury and investor relations activities. He is knowledgeable about Hawaii and A&B's operating markets through his involvement in the Hawaii business community and local community organizations.
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Robert S. Harrison Age: 59 Director Since: 2012 |
Director Qualifications: As Chairman, President and Chief Executive Officer of FHB, Hawaii's largest financial institution, Mr. Harrison brings to the Board experience in managing complex business organizations. He also has banking and financial expertise. Mr. Harrison has board experience through his service on various corporate and non-profit boards and is knowledgeable about Hawaii and A&B's operating markets through his involvement in the Hawaii business community and local community organizations.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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PROPOSAL NO. 1 |
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Stanley M. Kuriyama Age: 66 Director Since: 2012 |
Director Qualifications: As a member of A&B's and A&B Predecessor's senior management team for two decades, Mr. Kuriyama, who is Chairman of the Board and former Chief Executive Officer of A&B, brings to the Board an in-depth knowledge of all aspects of the Company's real estate operations, including commercial real estate and real estate development. He is knowledgeable about Hawaii and A&B's operating markets through his involvement in the Hawaii business community and local community organizations.
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Diana M. Laing Age: 65 Director Since: 2019 |
Director Qualifications: As former Chief Financial Officer of American Homes 4 Rent, a REIT focused on the acquisition, renovation, leasing and operation of single-family homes as rental properties, as well as the former Chief Financial Officer of a number of other publicly-traded REITs, Ms. Laing contributes in-depth REIT experience, as well as experience in finance, accounting and managing a complex business organization. She also has board experience, including her service on the boards of other publicly traded companies.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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PROPOSAL NO. 1 |
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Thomas A. Lewis, Jr. Age: 67 Director Since: 2017 |
Director Qualifications: As former Chief Executive Officer and Vice Chairman of Realty Income, one of the nation's largest and most successful REITs, Mr. Lewis contributes in-depth REIT experience, as well as experience in finance, accounting and managing a complex business organization. He also has board experience, including his service on the boards of other publicly traded companies. He is knowledgeable about Hawaii, having spent his teen and collegiate years on Oahu, and is a part-time resident.
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Douglas M. Pasquale Age: 65 Director Since: 2012 |
Director Qualifications: As Chief Executive Officer of Capstone Enterprises and as former President, Chief Executive Officer and Chairman of the Board of Nationwide Health Properties, Inc. prior to its merger in July 2011 with Ventas, Mr. Pasquale contributes in-depth REIT experience, as well as experience in finance, accounting and managing a complex business organization. This experience has provided Mr. Pasquale with financial expertise, and he has been designated by the Board of Directors as an Audit Committee Financial Expert. He also has board experience, including his service on the boards of other publicly traded companies.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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PROPOSAL NO. 1 |
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Michele K. Saito Age: 60 Director Since: 2012 |
Director Qualifications: As President of DTRIC Insurance Company and former President of Farmers, two of Hawaii's largest insurance companies, Ms. Saito brings to the Board experience in managing a complex business organization and financial and accounting expertise. Ms. Saito also has board experience, including her service on various corporate and non-profit boards, and is knowledgeable about Hawaii and A&B's operating markets through her involvement in the Hawaii business community and local community organizations.
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Eric K. Yeaman Age: 52 Director Since: 2012 |
Director Qualifications: As former President and Chief Operating Officer of FHB and former Chief Executive Officer of Hawaiian Telecom, the state's leading integrated communications company, Mr. Yeaman brings to the Board experience in managing complex business organizations. He also has financial and accounting expertise and has been designated by the Board of Directors as an Audit Committee Financial Expert. Mr. Yeaman has board experience, including his service on the boards of other publicly traded companies. He is knowledgeable about Hawaii and A&B's operating markets through his involvement in the Hawaii business community and local community organizations.
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Corporate Governance Profile. Sound principles of corporate governance are a priority for A&B's Board of Directors. Governance highlights include:
Shareholder Engagement. A&B values the views of its shareholders. During 2019, members of our management team met or offered to meet with shareholders who
cumulatively
owned approximately 75 percent of our stock to discuss our operations, corporate governance, environmental and social initiatives, and executive compensation, and to solicit feedback on these
and a variety of other topics. Shareholder perspectives are shared with the Board.
Director Independence. The Board has reviewed each of its current directors and nominees and has determined that Messrs. Harrison, Lewis, Pasquale and Yeaman and
Ms. Laing and Ms. Saito are independent under New York Stock Exchange ("NYSE") rules. The Board also had previously determined that retiring and former directors W. Allen Doane, David C.
Hulihee and Jenai S. Wall were independent. In making its independence determinations, the Board considered the transactions, relationships or arrangements in "Certain Information Regarding Directors
and Executive Officers Certain Relationships and Transactions" below, as well as the following: Mr. Doane his status as a former executive officer of
A&B Predecessor and banking relationships with FHB, an entity of which Mr. Doane is a director; Mr. Harrison A&B's banking relationships with FHB, an entity of which
Mr. Harrison is Chairman of the Board and Chief Executive Officer; Ms. Laing her status as a former interim officer of A&B for seven months; and
Mr. Yeaman A&B's banking relationships with FHB, an entity of which Mr. Yeaman was President and Chief Operating Officer through August 2019.
Board Leadership Structure. The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide
independent oversight of management. It understands that there is no single approach to providing Board leadership and that the right Board leadership structure may vary as circumstances warrant.
The Board currently has a separate non-executive Chairman, a CEO and a Lead Independent Director (Douglas M. Pasquale). At this time, the Board believes that a separate Chairman is beneficial in providing oversight and leadership in handling board responsibilities. This also allows our CEO to focus on Company strategy and business operations. A Lead Independent Director allows the Board to function independently from management and provide objective judgment regarding management's performance. The Board has determined that its leadership structure is appropriate for A&B at this time.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Lead Independent Director Duties Include
The Board's Role in Strategy and Risk Oversight. The Board oversees the strategic direction of the Company. It has provided leadership on critical strategic issues,
including the migration of
the commercial real estate portfolio to Hawaii and the simplification of the Company's business model with the bulk sale of Maui agricultural lands and reinvestment in commercial real estate. It
receives regular strategic presentations from management and reviews and evaluates the Company's strategic and operating plans, as appropriate.
The Board also has oversight of the risk management process, which it administers in part through the Audit Committee. One of the Audit Committee's responsibilities involves discussing policies regarding risk assessment and risk management. Risk oversight plays a role in all major Board decisions and the evaluation of risk is a key part of the decision-making process. For example, the identification of risks and the development of sensitivity analyses are key requirements for capital requests that are presented to, and evaluated by, the Board.
This risk management process occurs throughout all levels of the organization, but is also facilitated through a formal process in which the Company identifies significant risks through regular discussions with all levels of management. Risk management is reflected in the Company's compliance, auditing and risk management functions, and its risk-based approach to strategic and operating decision-making. Management reviews its risk management activities with the Audit Committee and the full Board of Directors on a regular basis. In addition, risk management perspectives from each of A&B's business segments are included in the Company's operating and strategic plans. Cybersecurity and information security risks are among the risks discussed with the Audit Committee and reported to the full Board. The Board believes that its current leadership structure is conducive to the risk oversight process.
Pay Risk Assessment. The Compensation Committee reviews compensation policies, plans and structure for the Company's executive group, to ascertain whether any of the
compensation programs and practices create excessive risks or motivate risky behaviors that are reasonably likely to have a material adverse effect on the Company. Management has worked with the
Compensation Committee to review the NEOs' incentive plans and related policies and practices, and the overall structure and positioning of total pay, pay mix, the risk management process and related
internal controls.
Based on its formal review process, the Compensation Committee concluded that there continues to be no material adverse effects due to pay risk. Management and the Compensation Committee concluded that A&B's NEO compensation programs represent an appropriate balance of fixed and variable pay, cash and equity, short-term and long-term compensation, financial and non-financial performance, and an appropriate level of enterprise-wide risk oversight. The Company periodically reviews the compensation policies, plans and structure for the Company's employees and, based on such review, our compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company.
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Strong Compensation Risk Management
Board of Directors and Committees of the Board. The Board of Directors held seven meetings during 2019. At all regularly scheduled meetings, the non-management
directors of A&B met in executive
sessions. The independent directors of A&B also met in executive session in 2019, led by the Lead Independent Director (Douglas M. Pasquale). In 2019, all directors were present at 75% or more of the
meetings of the A&B Board of Directors and Committees of the Board on which they serve. The Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Corporate
Governance Committee, each of which is governed by a charter, which is available on the corporate governance page of A&B's website, www.alexanderbaldwin.com.
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Nominating and Corporate Governance Committee |
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Christopher J. Benjamin | | | | | | | ||||||
W. Allen Doane | member | |||||||||||
Robert S. Harrison | | | | member | | chair | ||||||
Stanley M. Kuriyama | ||||||||||||
Diana M. Laing | | | | | | | ||||||
Thomas A. Lewis, Jr. | member | |||||||||||
Douglas M. Pasquale | | chair | | | | member | ||||||
Michele K. Saito | chair | member | ||||||||||
Eric K. Yeaman | | member | | | | | ||||||
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Audit Committee: The current members of the Audit Committee are:
The Board has determined that each member is independent under the applicable NYSE listing standards and SEC rules. In addition, the Board has determined that Messrs. Pasquale, Doane and Yeaman are "audit committee financial experts" under SEC rules. The duties and responsibilities of the Audit Committee are set forth in a written charter adopted by the Board of Directors and are summarized in the Audit Committee Report, which appears in this Proxy Statement. The Audit Committee met six times during 2019.
Compensation Committee: The current members of the Compensation Committee are:
The Board has determined that each member is independent under the applicable NYSE listing standards. The Compensation Committee has general responsibility for management and other salaried employee compensation and benefits, including incentive compensation and stock incentive plans, and for making recommendations to the Board on director compensation. The Compensation Committee may form subcommittees and delegate such authority as the Committee deems appropriate, subject to any restrictions by law or listing standard. For further information on the processes and procedures for consideration of executive compensation, see the "Compensation Discussion and Analysis" section below. The Compensation Committee met four times during 2019.
Nominating and Corporate Governance Committee: The current members of the Nominating and Corporate Governance Committee (the "Nominating Committee") are:
The Board has determined that each member is independent under the applicable NYSE listing standards. The functions of the Nominating Committee include recommending to the Board individuals qualified to serve as directors; recommending to the Board the size and composition of committees of the Board and monitoring the functioning of the committees; advising on Board composition and procedures; reviewing corporate governance issues; overseeing the annual evaluation of the Board; and ensuring that an evaluation of management is occurring. The Nominating Committee met three times during 2019.
Nominating Committee Processes. The Nominating Committee is responsible for recommending to the Board individuals qualified to serve as directors of the Company. The
Nominating
Committee believes that the minimum qualifications for serving as a director are high ethical standards, a commitment to shareholders, a genuine interest in A&B and a willingness and ability to devote
adequate time to a director's duties. The Nominating Committee also may consider other factors it deems to be in the best interests of A&B and its shareholders, such as business experience, financial
expertise and knowledge and involvement in Hawaii communities and businesses. In addition, the Nominating Committee considers diversity with respect to gender, ethnicity, knowledge, skills,
professional experience, education and expertise, and representation in industries and geographies relevant to the Company as important factors in its evaluation of candidates.
The Nominating Committee identifies potential nominees through various methods, including engaging, when appropriate, firms that specialize in identifying director candidates and by asking current directors to notify the Nominating Committee of qualified persons who might be available to serve on the Board.
The Nominating Committee will consider director candidates recommended by shareholders. In considering such candidates, the Nominating Committee will take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the Nominating Committee, a shareholder must submit a written recommendation that includes the name of the shareholder, evidence of the shareholder's ownership of A&B stock (including the number of shares owned and the
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| PAGE 12 | | |
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
length of time of ownership), the name of the candidate, the candidate's qualifications to be a director and the candidate's consent for such consideration.
The shareholder recommendation and information described above must be sent to the Corporate Secretary at 822 Bishop Street, Honolulu, Hawaii, 96813 and must be received not less than 120 days before the anniversary of the date on which A&B's Proxy Statement was released to shareholders in connection with the previous year's annual meeting.
Once a potential candidate has been identified by the Nominating Committee, the Nominating Committee reviews information regarding the person to determine whether the person should be considered further. If appropriate, the Nominating Committee may request information from the candidate, review the person's accomplishments, qualifications and references, and conduct interviews with the candidate. The Nominating Committee's evaluation process does not vary based on whether or not a candidate is recommended by a shareholder.
Board and Committee Self-Evaluation Process. The Board of Directors conducts annual board and committee evaluations to assess its performance and effectiveness. As part
of this process, each
board member responds to a questionnaire that includes areas for comments. Responses are discussed and both board and committee performance are evaluated at a subsequent Board meeting.
Corporate Governance Guidelines. The Board of Directors has adopted Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities and to
promote the
more effective functioning of the Board and its committees. The guidelines provide details on matters such as:
Select Corporate Governance Guideline Topics
The full text of the A&B Corporate Governance Guidelines is available on the corporate governance page of A&B's corporate website, www.alexanderbaldwin.com.
Code of Ethics. A&B has adopted a Code of Ethics (the "Code") that applies to the CEO, Chief Financial Officer and Controller. A copy of the Code is posted on
the corporate governance page of A&B's corporate website, www.alexanderbaldwin.com. A&B intends to disclose any changes in or waivers from its Code by posting such information on its website.
Code of Conduct. A&B has adopted a Code of Conduct, which is applicable to all directors, officers and employees, and is posted on the corporate governance page
of A&B's corporate website, www.alexanderbaldwin.com.
A&B's Culture. We are proud of the culture at A&B, where we are committed to being Partners for Hawaii. 2019
marks
our 150th anniversary, and we honor the reputation that we have built over a century and a half of doing the right thing for our stakeholders. In 2017, A&B built upon its
longstanding principles and developed vision, mission and values statements that guide our daily actions:
Our Vision: Seize the opportunity created by our assets, people and relationships to make Hawaii better. Create special places and experiences, and keep A&B at the forefront of Hawaii's business community for another 150 years by acting with an abiding respect for the state's communities, people, cultures and environment.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 13 | |
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Our Mission: Utilize our extensive resources, long history and deep relationships to improve Hawaii's communities, creating value for all stakeholders. Embrace innovation to transform our organization and make it more effective in an ever-changing business environment that presents new challenges and opportunities.
Our Values:
Integrity | Do everything we do with respect for others and an unwavering commitment to preserving and enhancing the caring legacy of our founders. | |
Adaptability |
Seek to find new and better approaches; be willing to question and abandon past practices when they have become ineffective. |
|
Collaboration |
Recognize that the best solutions and implementation come when people share information and ideas and work together. |
|
Decisiveness |
Leverage that collaboration into clear and timely decision-making and communicate those decisions to the organization. |
|
Accountability |
We will be most successful if our leaders and our employees are held accountable and are recognized for results. |
Corporate Responsibility and Sustainability. Prioritizing environmental, social and governance ("ESG") issues aligns with A&B's mission to improve Hawaii's
communities and create value for
all stakeholders. We understand our responsibility to the environment and the communities in which we operate and are dedicated to making continued improvements in our efforts. A number of our 2019
ESG highlights are listed below.
Our leadership team and the Board of Directors are committed to ESG issues. Consideration of ESG issues is integrated into our operations and informs how we pursue opportunities and manage risks. It is a meaningful component of our operating and strategic plans. The Board of Directors receives regular reports and provides oversight on ESG matters. We regularly seek input from our investors on ESG and other topics. In 2019, we conducted an ESG-specific roadshow, meeting or offering to meet with governance teams from investors representing approximately 65% of our stock, including some of our largest passive investors. This outreach is part of our commitment to communicate with our shareholders.
Compensation of Directors. The Compensation Committee periodically reviews the compensation of A&B's non-employee Directors with the assistance of its independent
compensation consultant, Willis Towers Watson ("WTW"). The compensation
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
levels and components were last reviewed in October 2018 and the Company's share-ownership guidelines are reviewed annually. In each case, they were deemed to be well aligned with market competitive practices. The following table summarizes the compensation earned by or paid to our directors (other than Mr. Benjamin, A&B CEO, whose compensation is included in the Summary Compensation Table and receives no compensation for serving on the Board) for services as a member of our Board of Directors for the period from January 1, 2019 through December 31, 2019.
2019 DIRECTOR COMPENSATION
Name |
|
Fees Earned or Paid in Cash ($) |
|
Stock Awards ($)(1) |
|
Option Awards ($)(2) |
|
Non-Equity Incentive Plan Compen- sation ($) |
|
Change in Pension Value and Nonqualified Deferred Compen- sation Earnings ($) |
|
All Other Compen- sation ($) |
|
Total ($) |
||||||||
| | | | | | | | | | | | | | | | | | | | | | |
(a) |
|
|
(c) |
|
(d) |
|
(e) |
|
(f) |
|
(g) | | (h) | |||||||||
W. Allen Doane |
| 65,000 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 155,000 | ||||||||
Robert S. Harrison |
74,610 | 90,000 | 0 | 0 | N/A | 0 | 164,610 | |||||||||||||||
David C. Hulihee(3) |
| 36,065 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 126,065 | ||||||||
Stanley M. Kuriyama |
85,000 | (4) | 135,000 | (4) | 0 | 0 | N/A | 0 | 220,000 | |||||||||||||
Diana M. Laing |
| 38,154 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 128,154 | ||||||||
Thomas A. Lewis, Jr. |
63,500 | 90,000 | 0 | 0 | N/A | 0 | 153,500 | |||||||||||||||
Douglas M. Pasquale |
| 110,000 | | 90,000 | | 0 | | 0 | | N/A | | 0 | | 200,000 | ||||||||
Michele K. Saito |
79,500 | 90,000 | 0 | 0 | N/A | 0 | 169,500 | |||||||||||||||
Jenai S. Wall(5) |
| 20,411 | | 0 | | 0 | | 0 | | N/A | | 0 | | 20,411 | ||||||||
Eric K. Yeaman |
65,000 | 90,000 | 0 | 0 | N/A | 0 | 155,000 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
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CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS |
Our Board of Directors approved the following non-employee director compensation schedule of annual fees, which was developed with the assistance of WTW.
Pay Element | | Amount | ||
Annual Board Retainer | | $56,000 | ||
Chairman of the Board Annual Retainer | $85,000 | |||
Lead Director Retainer (in addition to Board Retainer) | | $25,000 | ||
Committee Member Retainers (in addition to Board Retainer) | Audit
Compensation
Nominating and Corporate Governance |
$9,000 $6,000 $7,500 |
||
Committee Chair Retainers (in addition to committee member retainer) | Audit
Compensation
Nominating and Corporate Governance |
$14,000 $10,000 $7,500 |
||
Annual Equity Award | $90,000 | |||
Chairman of the Board Equity Award | | $135,000 | ||
| | | | |
Directors are provided an additional per meeting fee of $750 if the number of board or committee meetings they attend exceeds an annual predefined number, which is currently set at:
Under the terms of the Alexander & Baldwin, Inc. 2012 Incentive Compensation Plan ("2012 Plan"), an automatic annual grant of restricted stock units ("RSUs") is made to each director at each Annual Meeting of Shareholders. A prorated grant is made upon appointment as a director at any time between Annual Meetings. Awards made prior to April 2018 vest in equal increments of one-third each over three years. Starting with the April 2018 annual grant, awards vest in their entirety on their one-year grant date anniversary. Accelerated vesting occurs upon cessation of service by reason of death, disability or retirement during the vesting period. Directors who are employees of A&B or its subsidiaries do not receive compensation for serving as directors.
Director Business Travel Accident Coverage. Non-management directors have coverage of $200,000 for themselves and $50,000 for their accompanying spouses while traveling
on A&B business.
Matching Gift Program. Directors may participate in A&B's matching gifts program for employees, in which A&B matches contributions to qualified cultural and
educational
organizations up to an aggregate maximum of $3,000 annually.
Director Share Ownership Guidelines. The Board has adopted guidelines that encourage each non-employee director to own A&B common stock (including RSUs) with a
value of $280,000,
which is five times the current annual board retainer of $56,000, within five years of becoming a director. All current directors have met or are on track to meet the established guidelines within the
required timeframe.
Communications with Directors. Shareholders and other interested parties may contact any of the directors by mailing correspondence "c/o A&B Law Department" to
A&B's
headquarters at 822 Bishop Street, Honolulu, Hawaii 96813. The Law Department will forward such correspondence to the appropriate director(s). However, the Law Department reserves the right not to
forward any offensive or otherwise inappropriate materials.
In addition, A&B's directors are encouraged to attend the Annual Meeting of Shareholders. All the current A&B directors attended the 2019 Annual Meeting.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 16 | | |
|
|
SECURITY OWNERSHIP OF CERTAIN SHAREHOLDERS
The following table lists the names and addresses of the only shareholders known by A&B on February 20, 2020 to have owned beneficially more than five percent of A&B's common stock outstanding, the number of shares they beneficially own, and the percentage of outstanding shares such ownership represents, based upon the most recent reports filed with the SEC. Except as indicated in the footnotes, such shareholders have sole voting and dispositive power over shares they beneficially own.
Name and Address of Beneficial Owner |
Amount of Beneficial Ownership |
Percent of Class |
||
The Vanguard Group | 10,135,990 | (a) | 14.0% | |
100 Vanguard Blvd. | | | ||
Malvern, PA 19355 | | | ||
BlackRock, Inc. | 8,196,082 | (b) | 11.3% | |
40 East 52nd Street | ||||
New York, NY 10022 | ||||
Wellington Management Group LLP | 4,211,547 | (c) | 5.8% | |
280 Congress Street | | | ||
Boston, Massachusetts 02210 | | | ||
T. Rowe Price Associates, Inc. | 3,657,255 | (d) | 5.1% | |
100 E. Pratt Street | ||||
Baltimore, MD 21202 | ||||
| | | | |
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 17 | |
|
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
Security Ownership of Directors and Executive Officers. The following table shows the number of shares of A&B common stock beneficially owned as of February 20, 2020 by each director and nominee, by each executive officer named in the "Summary Compensation Table" below, and by directors and executive officers as a group and, if at least one-tenth of one percent, the percentage of outstanding shares such ownership represents. Except as indicated in the footnotes, directors, nominees and executive officers have sole voting and dispositive power over shares they beneficially own.
Name or Number in Group |
|
Number of Shares Owned (a)(b) |
|
Stock Options (c) |
|
Total | | Percent of Class | |||||
W. Allen Doane |
| 36,611 | | 0 | | 36,611 | | | |||||
Robert S. Harrison |
26,222 | 0 | 26,222 | | |||||||||
Stanley M. Kuriyama |
| 262,963 | | 182,268 | | 445,231 | | 0.6 | |||||
Diana M. Laing |
0 | 0 | 0 | | |||||||||
Thomas A. Lewis, Jr. |
| 1,936 | | 0 | | 1,936 | | | |||||
Douglas M. Pasquale |
64,199 | 0 | 64,199 | 0.1 | |||||||||
Michele K. Saito |
| 24,598 | | 0 | | 24,598 | | | |||||
Eric K. Yeaman |
24,598 | 0 | 24,598 | | |||||||||
Christopher J. Benjamin |
| 197,134 | | 50,677 | | 247,811 | | 0.3 | |||||
Brett A. Brown |
0 | 0 | 0 | | |||||||||
Lance K. Parker |
| 17,589 | | 1,740 | | 19,329 | | | |||||
Nelson N. S. Chun |
129,842 | 54,680 | 184,522 | 0.3 | |||||||||
Meredith J. Ching |
| 109,000 | | 41,005 | | 150,005 | | 0.2 | |||||
14 Directors and Executive Officers as a Group |
900,150 | 330,370 | 1,230,520 | 1.7 | |||||||||
| | | | | | | | | | | | | |
Certain Relationships and Transactions. A&B has adopted a written policy under which the Audit Committee must pre-approve all related person transactions that are
disclosable under
Item 404(a) of SEC Regulation S-K. Prior to entering into a transaction with A&B, directors and executive officers (and their family members) must make full disclosure of all facts and
circumstances to the Law Department. The Law Department then determines whether such transaction requires the approval of the Audit Committee. The Audit Committee considers all of the relevant facts
available, including (if applicable) but not limited to: the benefits to the Company; the impact on a director's or executive's independence, including with respect to an immediate family member of a
director or executive or an entity in which a director or executive is a partner, shareholder or executive officer; the availability of other sources for comparable products or services; the terms of
the transaction; and the terms available to unrelated third parties or to employees generally. The Audit Committee will approve only those related person transactions that are in, or are not
inconsistent with, the best interests of the Company and its shareholders. If a related person transaction involves a member of the Audit Committee, that member recuses himself or herself from the
process of review and approval.
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|
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS |
The Audit Committee has established written procedures to address situations when approvals need to be sought between meetings. Whenever possible, proposed related person transactions will be included as an agenda item at the next scheduled Audit Committee meeting for review and approval. However, if it appears that a proposed related person transaction will occur prior to the next scheduled Audit Committee meeting, approval will be sought from Audit Committee members between meetings. Approval by a majority of the Committee members will be sufficient to approve the related person transaction. If a related person transaction is approved in this manner, the action will be reported at the next Audit Committee meeting.
A&B's business strategy is Hawaii-focused and, accordingly, a number of our directors are Hawaii-based executives who provide extensive local knowledge and insight. Hawaii's business community is relatively small and isolated. Given A&B's position as a major landowner in the state, the largest owner of grocery-anchored retail assets, the largest materials and construction company in the state, and as one of the state's premier real estate developers, it is to be expected that relationships will exist between the Company and key business leaders and their companies, as disclosed below. The transactions described were made in the ordinary course of business and on substantially the same terms as those made with persons not related to A&B.
Related Person Relationships with First Hawaiian Bank: Robert S. Harrison and Eric K. Yeaman, directors of A&B, are Chairman and Chief Executive Officer, and former
President and Chief Operating
Officer, respectively, of FHB. Mr. Yeaman resigned from FHB in August 2019.
FHB has the following arrangements with A&B for general corporate purposes:
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| PAGE 19 | |
CERTAIN INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS |
In addition, after the acquisition of Grace Pacific Corporation ("Grace Pacific") on October 1, 2013, FHB has the following loans or lines of credit with the Company or its subsidiaries/affiliates specifically related to Grace Pacific:
Related Person Relationships with Foodland: Jenai S. Wall, a former director of A&B, is Chairman and Chief Executive Officer of Foodland. Foodland or its sister
companies are commercial
tenants in ten properties owned by A&B subsidiaries, under leases with terms that expire between 2020 and 2035, with aggregate gross rents in 2019 of $5,065,704 and aggregate net rent from and after
January 1, 2020 to the expiration date of the leases of $13,949,226. These leases were entered into in the ordinary course of business, on commercially reasonable, prevailing terms and rates.
Letter Agreement with Diana M. Laing: The Company entered into an agreement with Diana M. Laing to serve as Interim Executive Vice President and Interim Chief Executive
Officer, as
described on page 29. Ms. Laing served as an interim corporate officer through May 7, 2019.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 20 | | |
|
|
Compensation Discussion and Analysis ("CD&A")
The CD&A addresses A&B's compensation practices for 2019 for the six executive officers named in the Summary Compensation Table on page 33 (collectively, the "Named Executive Officers" or "NEOs"). From November 15, 2018 through May 7, 2019, Diana M. Laing served as interim Chief Financial Officer, upon terms of a Letter Agreement with A&B as described on page 29. The compensation for the following NEOs is addressed in the CD&A:
Executive Summary
In 2019, our executive compensation program received strong support from shareholders, with approximately 97% of the Say-on-Pay votes cast in favor of the program. We believe this is because our pay program links pay with performance, aligns pay with shareholder interests and follows good governance practices. The vote on executive compensation is just one source of insight regarding shareholder views on our compensation practices. A&B also has an extensive shareholder outreach program that incorporates discussion of various governance topics, including compensation. In 2019, we met or offered to meet on environmental, social and governance-focused matters and company operations with shareholders owning approximately 75% of our stock. The feedback we received regarding our compensation practices was very positive. The Compensation Committee welcomes shareholder perspectives on our program and is informed regarding feedback gathered in discussions with shareholders.
Approach to Compensation Governance. The Compensation Committee consistently evaluates the Company's executive compensation practices and modifies or adopts programs or practices to provide an appropriate balance of risk and reward. A&B firmly believes in pay for performance and alignment with shareholder interests. Thus, a majority of NEO compensation is tied to performance to ensure alignment with shareholders. 78% of CEO and 63% of other NEO target total direct compensation ("TDC") (excluding the Interim CFO) is performance-based pay aligned with shareholder interests. A&B adheres to good governance practices, as listed below, to ensure that it adopts best practices to the extent that they are best aligned to the business goals and strategy of the Company as well as shareholder interests.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 21 | |
EXECUTIVE COMPENSATION |
Performance Accomplishments in 2019
2019 results reflected both the continued success of our core business and our ongoing strategic transformation. Our commercial real estate portfolio continued to generate strong results, buoyed in part by our ability to redeploy proceeds from the 2018 sale of approximately 41,000 acres of non-income-producing agricultural land on Maui into six commercial real estate asset acquisitions of improved properties and ground leases (one acquired in late 2018 and five acquired in 2019). We made further progress in executing on our broader strategic agenda and simplification efforts, including continuing the monetization of our development-for-sale pipeline and our other landholdings. Efforts to improve Materials and Construction operating performance also continue, but progress trailed expectations and resulted in an operating loss of $(69.2) million and M&C Adjusted EBITDA(1) of $(6.1) million for the segment during 2019. Organizational streamlining, professional and corporate culture development, process improvements, strategic planning efforts, and meaningful cost reductions also were implemented throughout the Company in 2019.
Commercial Real Estate ("CRE") Segment
In 2019, the Company continued to concentrate on its Hawaii-focused commercial real estate strategy to increase its recurring earnings and cash flows. Notable highlights for 2019 are as follows:
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 22 | | |
|
EXECUTIVE COMPENSATION |
In line with its simplification strategy, the Land Operations segment seeks to strategically monetize the Company's legacy, non-commercial real estate landholdings and assets. Highlights and significant accomplishments in 2019 are as follows:
Grace Pacific results were significantly impacted by competitive pressures that lowered margins.
Compensation Overview
The Company's executive compensation programs are administered by its Compensation Committee. The Compensation Committee has retained WTW to provide advice and analysis on the design, structure and level of executive compensation for A&B.
Compensation Philosophy and Objectives. The Company seeks to align its objectives with shareholder interests through a compensation program that attracts, motivates and retains qualified and effective executives, and rewards performance and
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 23 | |
EXECUTIVE COMPENSATION |
results. To achieve this, the Company uses the following pay elements, which are described more fully under the "Pay Elements" section of the CD&A:
Element of Pay | | Composition | | Metrics | | Rationale | ||||||
Base Salary | | Cash | | | | Provides a fixed rate of pay based upon an executive's responsibilities |
||||||
Annual Cash Incentives | Cash | 70% to 75% Financial Goals |
Rewards the achievement of annual Company, business unit and individual performance
Reinforces pay-for-performance principles |
|||||||||
25% to 30% Non-Financial Goals (including Value Creation and Organizational Realignment Goals) |
Rewards both immediately measurable accomplishments and actions that create longer-term value |
|||||||||||
Long-Term Incentives | | 50% Performance Share Units | | Relative 3-year TSR (FTSE NAREIT All Equity REIT Index & Selected Peer Group) | | Aligns the executives' long-term interests with those of A&B's shareholders, motivates long-term performance |
||||||
| | 50% Restricted Stock Units | | 3-year vesting period | | Aids in attracting and retaining employees
Reinforces pay-for-performance principles |
||||||
Health and Welfare Benefits | | Aids in attracting and retaining employees |
||||||||||
Retirement Benefits | | | | | | Assists employees with retirement income savings and attracts and retains employees |
||||||
Severance Benefits | | Retains talent during transitions due to a Change in Control or other covered events |
||||||||||
| | | | | | | | | | | | |
Pay for Performance. The Company's overall performance in 2019 was reflected in elements of compensation earned by NEOs (excluding the Interim CFO) for 2019. For the pay elements listed above, A&B targets pay at around the 50th percentile.
Pay Mix. The Company's combination of pay elements is designed to place greater emphasis on performance-based compensation, while at the same time focusing on long-term talent retention and ensuring an appropriate balance between pay and risk. The Committee believes this is consistent with one of its key compensation objectives, which is to align management and shareholder interests. For 2019, the Target Total Direct Compensation ("TDC") mix was generally within the same range as competitive practices based on survey data for each element of pay, as shown by the following table.
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 24 | | |
|
EXECUTIVE COMPENSATION |
Percentage of Target Total Direct Compensation
Provided by Each Pay Element for 2019
Assessment of Total Compensation. In evaluating and making pay decisions, the Compensation Committee utilizes the following tools, resources and information:
Company and individual performance
Say-on-Pay vote results
Competitive market data
Economic environment
Job responsibilities and experience
Positioning within the executive's salary range
Positioning in relation to the pay philosophy
Investor feedback |
Projected market salary increases
Value of the total pay package
Alignment to pay-for-performance principles
Reasonableness and balance of pay risk
Internal pay equity
NEO's current and expected future contributions
Size of recent awards |
Internal Pay Equity. The Compensation Committee considers internal pay equity as a factor in establishing compensation for executives. To this end, after reviewing the competitiveness of the CEO's and other NEO's annual compensation, the Committee also considers the ratio of the CEO's annual compensation relative to the average annual compensation for the other NEOs, as compared with such a ratio based on 50th percentile benchmark data. For 2019, the Company's CEO-to-NEOs pay ratio was lower than the 50th percentile ratio of companies in our executive talent market. This finding indicates that our CEO's annual compensation is reasonable in relation to these benchmarks.
The Company provides the following pay elements to its executive officers in varying combinations to accomplish its compensation objectives.
Salary: Salary is intended to provide a competitive fixed rate of pay based upon an executive's responsibilities. The Company believes that salary is less impactful than performance-based compensation in achieving the overall objectives of the Company's executive compensation program. Accordingly, at target, less than half (between 22% to 45%, excluding the Interim CFO) of a NEO's total compensation is paid as salary.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 25 | |
EXECUTIVE COMPENSATION |
Generally, the Board of Directors determines the CEO's annual salary change on the basis of the factors listed previously in the Assessment of Total Compensation section. The Board has a formal performance review process for the CEO that includes categories such as, but not limited to: company goals, financial results, strategic leadership, corporate culture, business management, and talent management. Each Board member has an opportunity to provide specific input on the CEO's performance across key categories. The results of this process are carefully considered by the Board and the Compensation Committee in determining the CEO's annual salary and incentive award.
The CEO recommends annual salary changes for the other NEOs. Salary adjustments for NEOs are generally considered by the Compensation Committee in February of each year for implementation on April 1. Any base salary increases for NEOs in 2019 reflected increases based on performance and the factors listed in the Assessment of Total Compensation section above.
Salary Information for 2018 2019
NEO |
Base Salary as of 12/31/18 |
% Change |
Base Salary as of 12/31/19 |
| |||||||||
Mr. Benjamin |
| | $ | 670,000 | | | 3% | | | $ | 690,000 | | |
Mr. Brown* |
| | N/A | | | N/A | | | $ | 400,000 | | | |
Mr. Parker |
| | $ | 386,250 | | | 3% | | | $ | 397,838 | | |
Mr. Chun |
| | $ | 352,238 | | | 3% | | | $ | 362,805 | | |
Ms. Ching |
| | $ | 297,022 | | | 3% | | | $ | 305,933 | | |
Ms. Laing** |
| | $ | 50,000/mo. | | | N/A | | | N/A | | | |
| | | | | | | |
Annual Incentives: For 2019, annual incentives for NEOs were provided through the Alexander & Baldwin, Inc. Performance Improvement Incentive Plan ("PIIP") to motivate and reward executives for achievement of pre-established financial, value creation and individual goals, as applicable. The Company believes that the annual incentive structure drives the following objectives:
Performance Goal Categories. Each plan year, a pool is funded for all plan participants (except for the CEO), based on attainment level of goals for that year, as determined by the Compensation Committee. Financial goals were established in February 2019.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 26 | | |
|
EXECUTIVE COMPENSATION |
Company Performance and Payout Determination (Except for CEO). Determination of award pool funding in 2019 was based on the Company's operating performance as compared to Financial Goals set at the beginning of the year and Value Creation and Organizational Realignment ratings recommended by the CEO, based on input from senior management and on business actions and outcomes in support of the Company's strategic direction. Recommendations were reviewed and approved by the Compensation Committee. The levels of achievement for each goal is rated on a scale from 0 to 3, as follows: 0 for below threshold performance, 1.0 for threshold performance, 2.0 for target performance and to 3.0 for maximum performance.
The incentive pool is funded by aggregating the target incentives for each PIIP participant, excluding the CEO, and multiplying that sum by the performance ratings for the applicable measures at below threshold, threshold, target or maximum levels, with proration between these levels, as determined by the Compensation Committee. The CEO's award is determined separately by the Compensation Committee and does not positively or negatively affect the aggregate incentive pool.
Goal ($ in millions) | Threshold | Target | Maximum | Actual | 0-3 Rating | | ||||||||||||||||||||
CRE Same-Store NOI Growth(2) | | | 1.0 | % | | | 3.1 | % | | | 4.1 | % | | | 5.2 | % | | | 3.0 | | | |||||
CRE Non-Same-Store NOI(2) | | | $ | 23.5 | | | | $ | 24.8 | | | | $ | 26.0 | | | | $ | 25.7 | | | | 2.8 | | | |
Real Estate Adjusted Operating Cash Flow | | | $ | 72.0 | | | | $ | 84.7 | | | | $ | 97.4 | | | | $ | 137.1 | | | | 3.0 | | | |
Consolidated Adjusted Operating Cash Flow(2) | | | $ | 62.6 | | | | $ | 73.6 | | | | $ | 84.6 | | | | $ | 135.6 | | | | 3.0 | | | |
Consolidated Adjusted Pre-tax Income(2) | | | $ | 17.1 | | | | $ | 22.8 | | | | $ | 28.5 | | | | $ | 10.9 | | | | 0.0 | | | |
Value Creation Real Estate | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 1.5 | | | | 1.5 | | | |||||
Value Creation Consolidated | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 1.5 | | | | 1.5 | | | |||||
Organizational Realignment Real Estate | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 2.0 | | | | 2.0 | | | |||||
Organizational Realignment Consolidated | | | 1.0 | | | | 2.0 | | | | 3.0 | | | | 2.0 | | | | 2.0 | | | |||||
| | | | | | | | | | | |
The incentive compensation for Mr. Brown, Mr. Chun and Ms. Ching was based on a weighted mix of (a) the level of achievement of the financial and operating goals set forth in the table above and (b) the scores awarded for Value Creation and Organizational Realignment accomplishments achieved by each of the operating segments and the Company on a consolidated basis. The incentive compensation for Mr. Parker was based on CRE Same-Store NOI Growth, CRE Non-Same-Store NOI and Real Estate Adjusted Operating Cash Flow, and Value Creation and Organizational Realignment ratings for real estate operations.
Based on 2019 performance shown above, the actual pool funding for the financial goals was 87.6% of target for Mr. Brown, Mr. Chun and Ms. Ching, while pool funding for the Value Creation and Organizational Realignment goals was 25% of target, for a total payout of 112.6% of target. Mr. Parker's pool funding was comprised of 145.2% of target for the real estate financial goals and 21.2% of target for the real estate Value Creation and Organizational Realignment goals, for a total of 166.4% of target. The CEO recommended, and the Committee approved, no modification of these NEO awards for 2019.
Ms. Laing was not eligible to participate in the PIIP for 2019.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 27 | |
EXECUTIVE COMPENSATION |
Payout Determination for the CEO. Each plan year, the CEO's annual incentive is determined by the Compensation Committee separately from other plan participants. The award is calculated using a 70% weighting for the same Financial Goals applicable to Mr. Brown, Mr. Chun and Ms. Ching, and a 30% weighting for the Committee's subjective assessment of progress in achieving other Non-Financial Goals. The Value Creation and Organizational Realignment Goals do not apply to the CEO, as the CEO is involved in the determination of the results. Instead, the Compensation Committee and the Board of Directors evaluate the CEO's non-financial performance based on a number of criteria, including leadership and execution of strategy. Based on that evaluation, the Compensation Committee rates the CEO's non-financial performance on a scale from 0 to 3, as follows: 0 for below threshold performance, 1.0 for threshold performance, 2.0 for target performance and to 3.0 for maximum performance. The Committee rated the CEO's non-financial performance at 1.5, halfway between threshold and target. The Committee considered the positive momentum achieved in the commercial real estate business, the progress made in monetization of non-core assets and the favorable steps taken to advance the Company's organizational transformation, but determined that the challenges experienced in the Materials and Construction segment and their impacts on the broader corporate simplification effort and balance sheet warranted a below-target award.
For the CEO's 2019 award, after calculation of the Financial Goals and the Non-Financial Goals, the Compensation Committee awarded the CEO a total incentive award of $835,000, which was 110% of target.
Actual awards earned in total by the NEOs were based on performance against the goals as described above and were as follows:
Annual Incentive Award Information
|
| Target PIIP Award | Actual as a % of | Actual PIIP Award | | |||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||
NEO |
% of Base Salary | $ | Target | % of Base Salary | $ | | ||||||||||||||||||||
Mr. Benjamin |
| | 110% | | | | $ | 759,000 | | | | 110.0% | | | | 121.0% | | | | $ | 835,000 | | | |||
Mr. Brown* |
| | 70% | | | | $ | 186,667 | | | | 112.6% | | | | 78.8% | | | | $ | 210,248 | | | |||
Mr. Parker |
| | 70% | | | | $ | 278,487 | | | | 166.4% | | | | 116.5% | | | | $ | 463,411 | | | |||
Mr. Chun |
| | 55% | | | | $ | 199,543 | | | | 112.6% | | | | 61.9% | | | | $ | 224,639 | | | |||
Ms. Ching |
| | 55% | | | | $ | 168,253 | | | | 112.6% | | | | 61.9% | | | | $ | 189,245 | | | |||
Ms. Laing** |
| | N/A | | | | N/A | | | | N/A | | | | N/A | | | | N/A | | | |||||
| | | | | | | | | | | |
Equity Compensation:
Equity grants are generally approved by the Compensation Committee at its January meeting. Based on current market data provided by WTW, the CEO makes recommendations for each executive officer other than himself to the Compensation Committee, which retains full authority to set the actual grant amount. In determining the type and size of a grant to an executive officer, the Compensation Committee generally considers, among other things, the items mentioned above in the Assessment of Total Compensation section.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 28 | | |
|
EXECUTIVE COMPENSATION |
Equity Grant Information
| Target LTI | LTI Vehicle Mix | | |||||||||||
| | | | | | | | |||||||
NEO | Value | PSUs | RSUs | | ||||||||||
Mr. Benjamin | | $ | 1,620,000 | | | 50% | | | | 50% | | | ||
Mr. Brown | | $ | 500,000 | | | 50% | | | | 50% | | | ||
Mr. Parker | | $ | 600,000 | | | 50% | | | | 50% | | | ||
Mr. Chun | | $ | 250,000 | | | 50% | | | | 50% | | | ||
Ms. Ching | | $ | 250,000 | | | 50% | | | | 50% | | | ||
Ms. Laing* | | N/A | | | N/A | | | | N/A | | | |||
| | | | | | | |
Performance Ranges for 2019 PSUs
Performance | Earnout* | |||
Threshold | 35th Percentile | 35% of Target | ||
Target | 55th Percentile | 100% of Target | ||
Maximum | 75th Percentile | 200% of Target | ||
| | | | |
2017 PSUs: With TSR at the 17.5 percentile for the S&P Midcap 400 index and at the 7.7 percentile for the Dow Jones U.S. Real Estate index, none of the PSUs granted in 2017 were earned. Amounts forfeited were as follows: Mr. Benjamin 24,432 PSUs, Mr. Parker 5,758 PSUs, Mr. Chun and Ms. Ching 5,233 PSUs.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 29 | |
EXECUTIVE COMPENSATION |
Target Total Direct Compensation for 2019
NEO |
|
Base Salary as of 12/31/19 |
Target PIIP Award |
2019 LTI Grant |
Target Total Direct Compensation |
| |||||||||||||
Mr. Benjamin |
| | $ | 690,000 | | | | $ | 759,000 | | | $ | 1,620,000 | | | $ | 3,069,000 | | |
Mr. Brown* |
| | $ | 400,000 | | | | $ | 280,000 | | | $ | 500,000 | | | $ | 1,180,000 | | |
Mr. Parker |
| | $ | 397,838 | | | | $ | 278,487 | | | $ | 600,000 | | | $ | 1,276,325 | | |
Mr. Chun |
| | $ | 362,805 | | | | $ | 199,543 | | | $ | 250,000 | | | $ | 812,348 | | |
Ms. Ching |
| | $ | 305,933 | | | | $ | 168,253 | | | $ | 250,000 | | | $ | 724,196 | | |
Ms. Laing** |
| | N/A | | | | N/A | | | N/A | | | N/A | | | ||||
| | | | | | | | | |
Retirement Plans: The Company provides various retirement plans to assist its employees with retirement income savings and to attract and retain its employees. The Committee periodically reviews the value of benefits from the retirement plans in conjunction with all other forms of pay in making compensation decisions.
A&B Retirement Plan for Salaried Employees (Frozen since 2012): The A&B Retirement Plan for Salaried Employees (the "Qualified Retirement Plan"), which is a tax-qualified defined benefit pension plan, provides pension benefits to the Company's salaried non-bargaining unit employees. The Pension Benefits table of this Proxy Statement provides further information regarding the Qualified Retirement Plan. In 2007, A&B Predecessor closed participation in its traditional defined pension plan for new non-bargaining unit employees hired after January 1, 2008. Effective January 1, 2012, the Company froze benefit accruals under its traditional defined benefit plans for all non-bargaining unit employees hired before January 1, 2008 and replaced the benefit with a cash balance formula in which participants accrue 5% of their eligible annual compensation. Effective January 1, 2020, the Company froze benefit accruals under the cash balance formula and replaced the benefit with a non-elective company contribution in which participants are immediately eligible to receive 3% of their annual eligible compensation.
A&B Individual Deferred Compensation and Profit Sharing Plan: The Company has a tax-qualified defined contribution retirement plan (the "IDC Plan") available to all salaried non-bargaining unit employees that provides for performance-based discretionary contributions to participants based on the degree of achievement of goals similar to 2019 AIP goals as determined by the Compensation Committee. There was a 3.65% gain-sharing contribution for 2019. Effective January 1, 2020, employees immediately will be eligible for up to five percent of annual base compensation, based on achievement of goals.
In 2019, the IDC Plan provided for a match of up to three percent of the compensation deferred by a participant during the fiscal year, subject to IRS maximum compensation limitations. Effective January 1, 2020, employees will immediately be eligible for a match of up to 3% of their eligible compensation.
A&B Excess Benefits Plan: This non-qualified benefit plan (the "Excess Benefits Plan") for executives is designed to meet the retirement plan objectives described above. Certain executives, including all NEOs, are eligible to participate in the Excess Benefits Plan. It complements the Qualified Retirement Plan and the IDC Plan by providing benefits and contributions in amounts that could not be provided by those plan's formulas due to the limits imposed by tax law. The Pension Benefits table of this Proxy Statement provides further information regarding the A&B Excess Benefits Plan.
Employment and Other Agreements: Except as set forth below, the Company does not provide employment or similar agreements for any of the NEOs. The Company believes in a policy of "at will" employment.
Effective October 10, 2018, Ms. Laing was appointed Interim Executive Vice President; she became Interim CFO, effective November 15, 2018. The Company entered into a letter agreement with Ms. Laing dated September 28, 2018, under which Ms. Laing was paid a base salary of $50,000 per month. Under the terms of the agreement, Ms. Laing's interim role would not last beyond April 10, 2019, with a one-time possible extension of no more than 90 days. Ms. Laing served as Interim Executive Vice President and Interim CFO through May 7, 2019.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 30 | | |
|
EXECUTIVE COMPENSATION |
Effective May 8, 2019, Brett A. Brown was appointed Executive Vice President and CFO. The Company entered into a letter agreement with Mr. Brown dated March 21, 2019, under which Mr. Brown (i) was paid an annual base salary of $400,000, (ii) received a long-term incentive grant of $500,000, split equally between time-based restricted stock units and performance share units under the 2012 Plan, (iii) became a participant in the PIIP with a target of $280,000, and (iv) received relocation expenses up to $50,000 (plus tax gross up) and a $25,000 signing bonus.
Severance Plan and Change in Control Agreements: The Company provides severance benefits pursuant to the Severance Plan and change in control agreements to certain executives, including the NEOs, to retain talent during transitions due to a Change in Control or other covered event and to provide a competitive pay package. The Compensation Committee designed the change in control agreement to provide a competitively structured program, and yet be conservative overall in the amounts of potential award payouts. The Compensation Committee's decisions regarding other compensation elements are affected by the potential payouts under these arrangements, as the Committee considers how the terms of these arrangements and the other pay components interrelate. These agreements are described in further detail in the "Other Potential Post-Employment Payments" section of this Proxy Statement.
Retiree Health and Medical Plan: The Company provides NEOs with the same retiree medical and life insurance benefits as are provided in general to all salaried non-bargaining unit employees who joined A&B Predecessor prior to January 1, 2008. The Company's contribution towards the monthly medical premium is based on the employee's age and years of service and is capped at $136 per month. The benefits from these plans are reflected in the "Other Potential Post-Employment Payments" section of this Proxy Statement.
The Role of Compensation Survey Data
The Company uses published compensation survey data as a reference, but does not benchmark against specific companies within such surveys. The Company operates in a number of different industries and there are no companies that are considered directly comparable in business mix, size and geographic relevance. Accordingly, the Company does not use data that are specific to any individual segment of the Company's business but instead, based on the recommendation of WTW, uses data from three national and highly recognized published surveys representing a broad group of general industry and real estate companies similar in size to the Company to assess the Company's pay practices. WTW uses data subsets in each survey that represent companies of similar size with revenues between $250 million and $1 billion. The survey sources provide only one of the tools that the Committee uses to assess appropriate pay levels. Internal equity, Company performance, business unit performance, compensation philosophy, performance consistency, historical pay movement, pay mix, pay risk, economic environment and individual performance are also reviewed.
The surveys used by WTW in its assessment of total direct compensation and CEO pay ratio as compared to other NEOs include:
The Role of the Compensation Consultant
After conducting a search, the Compensation Committee selected and retained WTW, an independent executive compensation consulting firm, to assist the Committee in:
WTW reports directly to and takes instructions from the Compensation Committee. The Committee approves all WTW engagements, including the nature, scope and fees of assignments. The Compensation Committee has reviewed WTW's work, policies and procedures and determined that no conflicts of interest exist. In accordance with the New York Stock Exchange
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 31 | |
EXECUTIVE COMPENSATION |
("NYSE") requirements, the Compensation Committee annually assesses the independence of its compensation consultant, outside legal counsel, and other advisers who will provide services with respect to executive compensation matters.
The Role of Management
Management assists the Compensation Committee in its role of determining executive compensation in a number of ways, including:
Tax and Accounting Considerations
In evaluating the Company's executive compensation structure, the Compensation Committee considers tax and accounting treatment, balancing the effects on the individual and the Company. Until the adoption of the Tax Cuts and Jobs Act (the "Tax Act") on December 22, 2017, Section 162(m) of the Internal Revenue Code limited the tax deductibility of certain executive compensation in excess of $1,000,000 for any fiscal year, except for certain "performance-based compensation." With the passage of the Tax Act, only qualifying performance-based compensation paid pursuant to a written binding contract in effect on November 2, 2017 (and not modified in any material respect on or after November 2, 2017) as set forth under the Tax Act will be eligible for this deduction exception. The Tax Act also expanded the executive officers covered by Section 162(m) to include the chief financial officer position as well as any person who ever was a covered executive for any prior taxable year, beginning after December 31, 2016. As a result of these changes, starting in 2018, most compensation in excess of $1,000,000 payable to any person who was a named executive officer of the Company since fiscal year 2016 is not deductible, regardless of whether the compensation is performance-based. The Compensation Committee believes that the potential deductibility of the compensation payable under those programs should be only one of a number of relevant factors taken into consideration, and not the sole or primary factor, in establishing the cash and equity compensation programs for the executive officers. The Compensation Committee believes that cash and equity incentive compensation must be maintained at the requisite level to attract and retain the executive officers essential to the Company's financial success, even if all or part of that compensation may not be deductible by reason of the Section 162(m) limitation. The Compensation Committee will continue to maintain flexibility and the ability to pay competitive compensation by not requiring all compensation to be deductible.
Stock Ownership Guidelines
To enhance shareholder alignment and ensure commitment to value-enhancing, longer-term decision-making, the Company has established stock ownership guidelines. Executives are required to own a value of stock equal to the salary multiple below within a five year-period from commencement of employment or within a five-year period after a change in salary based on promotion:
Position | Salary Multiple | |
CEO | 5X | |
Other NEOs | 3X | |
| | |
All NEOs, with the exception of Mr. Parker, who became an NEO in 2015, have met or are on track to meet the ownership guidelines.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 32 | | |
|
EXECUTIVE COMPENSATION |
Equity Granting Policy
Equity awards are expected to be granted for current employees at the January Compensation Committee meeting each year. Equity grants for new hires or promoted employees are approved at regularly scheduled Compensation Committee meetings. The timing of these grants is made without regard to anticipated earnings or other major announcements by the Company.
Policy Regarding Speculative Transactions and Hedging
The Company has adopted a formal policy prohibiting directors, officers and employees from (i) entering into speculative transactions, such as trading in options, warrants, puts and calls or similar instruments, involving A&B stock, or (ii) hedging or monetization transactions, such as zero-cost collars and forward sale contracts, involving A&B stock. The Company does not prohibit investments in exchange funds.
Policy Regarding Recoupment of Certain Compensation
The Company has adopted a formal "clawback" policy for senior management, including all NEOs. Pursuant to the policy, the Company will seek to recoup certain incentive compensation, including cash and equity bonuses based upon the achievement of financial performance metrics, from executives in the event that the Company is required to restate its financial statements due to a material noncompliance with any financial reporting requirement.
The Compensation Committee has reviewed and discussed the CD&A section of this Proxy Statement with management and, based on these discussions and review, it has recommended to the Board of Directors that the CD&A disclosure be included in this Proxy Statement.
The foregoing report is submitted by Ms. Saito (Chair), Mr. Harrison and Mr. Lewis.
Compensation Committee Interlocks and Insider Participation
During 2019, the members of the Compensation Committee were Ms. Wall (through April 26, 2019), Mr. Harrison (since April 26, 2019), Mr. Lewis and Ms. Saito. As set forth above under the subsection "Certain Relationships and Transactions," Ms. Wall is an executive officer in a corporation that is a tenant in several properties owned by A&B subsidiaries with leases established at market rates. Mr. Harrison is an executive officer in a corporation that has lending and tenant relationships with A&B, with loans and leases established at market rates. Because of these related person transactions, Ms. Wall and Mr. Harrison did not participate in any equity compensation decisions. Ms. Wall did not stand for re-election at the 2019 Annual Meeting and is not a director nominee for 2020.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 33 | |
EXECUTIVE COMPENSATION |
Summary Compensation Table. The following table summarizes the compensation paid by A&B to its NEOs in 2019, 2018 and 2017.
2019 Summary Compensation Table
|
Name and Principal Position (a) |
|
Year (b) |
|
|
Salary ($) (c) |
|
|
Bonus ($)(1) (d) |
|
|
Stock Awards ($)(2) (e) |
|
|
Option Awards ($) (f) |
|
|
Non-Equity Incentive Plan Compensation ($)(3) (g) |
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) (h) |
|
|
All Other Compensation ($)(5) (i) |
|
|
Total ($) (j) |
| |||||||||||||||||||
Christopher J. Benjamin | | 2019 | | | 685,000 | | | 170,116 | | | 1,969,270 | | | N/A | | | 664,884 | | | 390,393 | | | 33,403 | | | 3,913,066 | | ||||||||||||||||||||
President and Chief | 2018 | 665,000 | 268,504 | 2,003,838 | N/A | 509,768 | 0 | (6) | 32,323 | 3,479,433 | |||||||||||||||||||||||||||||||||||||
Executive Officer | | 2017 | | | 642,000 | | | 312,000 | | | 1,351,879 | | | N/A | | | 382,327 | | | 229,870 | | | 8,100 | | | 2,926,176 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Brett A. Brown(7) Executive Vice President & Chief Financial Officer |
2019 | 259,231 | 71,728 | 604,043 | N/A | 163,500 | N/A | 96,668 | (8) | 1,195,170 | |||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lance K. Parker | | 2019 | | | 394,941 | | | 59,048 | | | 729,337 | | | N/A | | | 404,363 | | | 87,508 | | | 22,815 | | | 1,698,012 | | ||||||||||||||||||||
Executive Vice President and | 2018 | 383,438 | 58,734 | 667,946 | N/A | 234,938 | 5,608 | 22,130 | 1,372,794 | ||||||||||||||||||||||||||||||||||||||
Chief Real Estate Officer | | 2017 | | | 340,863 | | | 61,543 | | | 318,612 | | | N/A | | | 201,109 | | | 65,842 | | | 8,100 | | | 996,069 | | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nelson N. S. Chun | 2019 | 360,163 | 49,839 | 303,877 | N/A | 174,800 | 77,702 | 21,546 | 987,927 | ||||||||||||||||||||||||||||||||||||||
Executive Vice President and | | 2018 | | | 349,674 | | | 70,566 | | | 306,116 | | | N/A | | | 133,972 | | | 0 | (9) | | | 20,908 | | | 881,236 | | |||||||||||||||||||
Chief Legal Officer | 2017 | 339,489 | 82,075 | 289,608 | N/A | 100,575 | 38,926 | 8,100 | 858,773 | ||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Meredith J. Ching | | 2019 | | | 275,244 | | | 42,027 | | | 303,877 | | | N/A | | | 147,398 | | | 193,129 | | | 18,304 | | | 979,979 | | ||||||||||||||||||||
Executive Vice President, | 2018 | 277,923 | 59,504 | 306,116 | N/A | 112,971 | 0 | (9) | 15,146 | 771,660 | |||||||||||||||||||||||||||||||||||||
External Affairs | | 2017 | | | 264,088 | | | 69,209 | | | 289,608 | | | N/A | | | 84,809 | | | 222,678 | | | 7,923 | | | 938,315 | | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diana M. Laing(10) | 2019 | 213,846 | N/A | N/A | N/A | N/A | N/A | N/A | 213,846 | ||||||||||||||||||||||||||||||||||||||
Interim Executive Vice President & Chief Financial Officer |
| 2018 | | | 134,531 | | | N/A | | | N/A | | | N/A | | | N/A | | | N/A | | | N/A | | | 134,531 | | ||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 34 | | |
|
EXECUTIVE COMPENSATION |
Grants of Plan-Based Awards. The following table contains information concerning the non-equity and equity grants under A&B's incentive plans during 2019 to the
NEOs.
2019 Grants of Plan-Based Awards
|
|
| |
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) |
|
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
|
All Other Stock Awards: Number of Shares of Stock |
|
All Other Option Awards: Number of Securities Underlying |
|
Exercise or Base Price of Option |
|
Grant Date Fair Value of Stock and Option |
||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Name (a) |
|
Grant Date (b) |
|
Threshold ($) (c) |
|
Target ($) (d) |
|
Maximum ($) (e) |
|
Threshold (#) (f) |
|
Target (#) (g) |
|
Maximum (#) (h) |
|
or Units (#)(3) (i) |
|
Options (#)(4) (j) |
|
Awards ($/Sh) (k) |
|
Awards ($)(5) (l) |
||||||||||||||
|
Christopher J. Benjamin |
| 1/28/19 | | 265,650 | | 531,300 | | 1,062,600 | | 12,500 | | 35,714 | | 71,428 | | 35,714 | | N/A | | N/A | | 1,969,270 | ||||||||||||||
|
Brett A. Brown |
7/29/19 | 98,000 | 196,000 | 392,000 | 3,755 | 10,729 | 21,458 | 10,729 | N/A | N/A | 604,043 | |||||||||||||||||||||||||
|
Lance K. Parker |
| 1/28/19 | | 104,432 | | 208,865 | | 417,730 | | 4,629 | | 13,227 | | 26,454 | | 13,227 | | N/A | | N/A | | 729,337 | ||||||||||||||
|
Nelson N. S. Chun |
1/28/19 | 69,840 | 139,680 | 279,360 | 1,929 | 5,511 | 11,022 | 5,511 | N/A | N/A | 303,877 | |||||||||||||||||||||||||
|
Meredith J. Ching |
| 1/28/19 | | 58,892 | | 117,784 | | 235,568 | | 1,929 | | 5,511 | | 11,022 | | 5,511 | | N/A | | N/A | | 303,877 | ||||||||||||||
|
Diana M. Laing(6) |
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The PIIP is based on financial, operating, and value creation goals, depending on the executive's job responsibilities and individual performance. Performance measures, weighting of goals and target opportunities are discussed in the CD&A section of this Proxy Statement. Information on equity grants is provided in the CD&A section of this Proxy Statement.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 35 | |
EXECUTIVE COMPENSATION |
Outstanding Equity Awards at Fiscal Year-End. The following table contains information concerning the outstanding equity awards held by the NEOs.
2019 Outstanding Equity Awards at Fiscal Year-End
|
|
Option Awards | | Stock Awards | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name |
|
Number of Securities Underlying Unexercised Options (#) Exercisable (b) |
|
Number of Securities Underlying Unexercised Options (#) Unexercisable (c) |
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) |
|
Option Exercise Price ($) (e) |
|
Option Expiration Date (f) |
|
Number of Shares or Units of Stock that Have Not Vested (#) (g) |
|
Market Value of Shares or Units of Stock that Have Not Vested ($)(5) (h) |
|
Equity In- centive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) (i) |
|
Equity In- centive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(5) (j) |
||||||||||
Christopher J. Benjamin |
| 50,677 | | | | | | 14.92 | | 1/24/2022 | | 65,534 | (1) | | 1,373,593 | | 92,660 | (6) | | 1,942,154 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Brett A. Brown |
N/A | N/A | N/A | N/A | N/A | 10,729 | (2) | 224,880 | 10,729 | (7) | 224,880 | |||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Lance K. Parker |
| 1,740 | | | | | | 13.11 | | 1/25/2021 | | 22,373 | (3) | | 468,938 | | 29,823 | (8) | | 625,090 | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nelson N.S. Chun |
31,291 | | | 13.11 | 1/25/2021 | 10,568 | (4) | 221,505 | 15,711 | (9) | 329,303 | |||||||||||||||||
|
| 23,389 | | | | | | 14.92 | | 1/24/2022 | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Meredith J. Ching |
23,466 | | | 13.11 | 1/25/2021 | 10,568 | (4) | 221,505 | 15,711 | (9) | 329,303 | |||||||||||||||||
|
| 17,539 | | | | | | 14.92 | | 1/24/2022 | | | | | | | | | ||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diana M. Laing |
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 36 | | |
|
EXECUTIVE COMPENSATION |
Option Exercises and Stock Vested. The following table contains information concerning option exercises and the vesting of stock awards for the NEOs during 2019.
Option Exercises and Stock Vested for 2019
|
| OPTION AWARDS | STOCK AWARDS | | |||||||||||||||||
| | | | | | | | | | ||||||||||||
Name |
Number of Shares Acquired on Exercise (#) (b) |
Value Realized on Exercise ($) (c) |
Number of Shares Acquired on Vesting (#) (d)(4) |
Value Realized on Vesting ($) (e) |
| ||||||||||||||||
Christopher J. Benjamin |
| | 126,874 | | | | 1,454,602 | | | | 26,788 | | | | 601,298 | | | ||||
Brett A. Brown |
| | 0 | | | | 0 | | | | 0 | | | | 0 | | | ||||
Lance K. Parker |
| | 0 | | | | 0 | | | | 7,266 | | | | 163,322 | | | ||||
Nelson N. S. Chun |
| | 14,252 | | | | 183,498 | | | | 5,784 | | | | 129,756 | | | ||||
Meredith J. Ching |
| | 29,929 | | | | 373,514 | | | | 5,784 | | | | 129,756 | | | ||||
Diana M. Laing |
| | 0 | | | | 0 | | | | 0 | | | | 0 | | | ||||
| | | | | | | | | |
The value realized in column (e) was calculated based on the market value of A&B common stock on the vesting date. No amounts realized upon exercise of options or vesting of stock have been deferred.
Pension Benefits. The following table contains information concerning pension benefits for the NEOs at the end of 2019.
Pension Benefits for 2019
Name |
Plan Name (b) |
Number of Years Credited Service(1) (#) (c) |
Present Value of Accumulated Benefit ($) (d) |
Payments During Last Fiscal Year ($) (e) |
| |||||||||||||
Christopher J. Benjamin |
| A&B Retirement Plan for Salaried Employees | | | 18.4 | | | | 648,219 | | | | | | | |||
|
| A&B Excess Benefits Plan | | | 18.4 | | | | 1,574,230 | | | | | | | |||
| | | | | | | | | | |||||||||
Brett A. Brown |
| A&B Retirement Plan for Salaried Employees | | | 0 | | | | | | | | | | | |||
|
| A&B Excess Benefits Plan | | | 0 | | | | | | | | | | | |||
| | | | | | | | | | |||||||||
Lance K. Parker |
| A&B Retirement Plan for Salaried Employees | | | 15.3 | | | | 299,286 | | | | | | | |||
|
| A&B Excess Benefits Plan | | | 15.3 | | | | 67,297 | | | | | | | |||
| | | | | | | | | | |||||||||
Nelson N. S. Chun |
| A&B Retirement Plan for Salaried Employees | | | 16.2 | | | | 553,253 | | | | | | | |||
|
| A&B Excess Benefits Plan | | | 16.2 | | | | 627,040 | | | | | | | |||
| | | | | | | | | | |||||||||
Meredith J. Ching |
| A&B Retirement Plan for Salaried Employees | | | 37.6 | | | | 1,848,839 | | | | | | | |||
|
| A&B Excess Benefits Plan | | | 37.6 | | | | 632,094 | | | | | | | |||
| | | | | | | | | | |||||||||
Diana M. Laing |
| A&B Retirement Plan for Salaried Employees | | | 0 | | | | | | | | | | | |||
|
| A&B Excess Benefits Plan | | | 0 | | | | | | | | | | | |||
| | | | | | | | | |
Actuarial assumptions used to determine the present values of the pension benefits include: Discount rates for qualified and non-qualified retirement plans of 3.32% and 2.48%, respectively. Age 62 with 5 years of service (or current age, if greater) is the assumed retirement age. Qualified plan benefits (traditional defined benefit and cash balance) are assumed to be paid on a life
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 37 | |
EXECUTIVE COMPENSATION |
annuity basis (however, cash balance portion could be paid in a lump sum). The cash balance accounts are projected to the assumed retirement age using 1.68% interest per year (the rate in effect for 2020) with no future pay credits. The projected qualified plan cash balance accounts were converted to life annuities at the assumed retirement age using the annuity conversion interest assumptions and mortality used in our financial disclosures, i.e., 2.13% (for the first 5 years), 3.07% (next 15 years) and 3.65% (years in excess of 20) applied on a rolling basis, and the Applicable Mortality Table, as defined for lump sum calculations under Section 417(e) of the Internal Revenue Code.
The Excess Benefits Plan benefits are paid as a lump sum equal to the present value of the traditional defined benefit assumed to be paid on a life annuity basis plus the cash balance account. The present value was determined based on interest rates (with 39% marginal tax rate adjustment) and mortality used in our financial disclosures, i.e., 1.30% (for the first 5 years), 1.87% (next 15 years) and 2.23% (years in excess of 20) applied on a rolling basis, and the Applicable Mortality Table, as defined for lump sum calculations under Section 417(e) of the Internal Revenue Code. The cash balance accounts are projected to the assumed retirement age using 1.68% interest per year (the rate in effect for 2020) with no future pay credits.
A&B Retirement Plan for Salaried Employees:
The A&B Retirement Plan for Salaried Employees (the "Qualified Retirement Plan") provides pension benefits to the Company's salaried employees who are not subject to collective bargaining agreements. In 2007, A&B Predecessor closed participation in its traditional defined pension plan and established a cash balance plan for new non-bargaining unit employees hired after January 1, 2008. A&B Predecessor subsequently froze the traditional plan on January 1, 2012, transitioning all employees to the cash balance plan and lowering the vesting period from five years to three years. Effective January 1, 2020, the Company froze benefit accruals under the cash balance plan.
The traditional defined benefit formula was based on participants' service and average monthly compensation in the five highest consecutive years of their final 10 years of service. For participants in the plan who remained employed after its freezing, this measurement period goes only through December 31, 2011. Compensation included base salary, overtime pay and one-year bonuses. The amounts were expressed as a single life annuity payable at the normal retirement age of 65. An employee became vested after five years of service with A&B Predecessor or the Company. An employee may take early retirement at age 55 or older, if the employee has already completed at least five years of service with A&B Predecessor or the Company. If an employee retires early, the same formula for normal retirement is used, although the benefit will be reduced for commencement before age 62 because the employee will receive payment early and over a longer period of time.
The replacement cash balance formula provides a retirement account equal to 5 percent of an employee's eligible cash compensation, for each year worked through December 31, 2019, while covered by the cash balance formula, plus interest. At retirement or other separation from service, the employee may elect to receive the vested cash balance portion of the Qualified Retirement Plan benefits as a lump sum or an actuarially equivalent annuity. Effective January 1, 2020, the Company froze benefit accruals under the cash balance formula and replaced the benefit with a non-elective company contribution through the A&B Individual Deferred Compensation and Profit Sharing Plan for Salaried Non-Bargaining Employees, in which participants receive 3% of their annual eligible compensation. Participants continue to receive interest credit for the cash balance benefits after the plan freeze.
A&B Excess Benefits Plan: The A&B Excess Benefits Plan is discussed in the CD&A section of this Proxy Statement. Under the pension portion of the Excess
Benefits Plan
associated with the Qualified Retirement Plan, benefits under the traditional defined benefit formula are payable after the executive's separation from service in a lump sum that is actuarially
equivalent to the annuity form of payment, and the cash balance account is paid as a lump sum. Under the profit sharing portion of the Excess Benefits Plan associated with the A&B Retirement Plan,
amounts are credited to executives' accounts, to be payable after the executive's separation from service. All NEOs are eligible to participate in the Excess Benefits Plan.
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 38 | | |
|
EXECUTIVE COMPENSATION |
Non-Qualified Deferred Compensation. The following table contains information concerning non-qualified deferred compensation for the NEOs.
2019 Non-Qualified Deferred Compensation
Name |
Executive Contributions in Last FY ($) (b) |
Registrant Contributions in Last FY ($)(1) (c) |
Aggregate Earnings in Last FY ($)(2) (d) |
Aggregate Withdrawals/ Distributions ($) (e) |
Aggregate Balance at Last FYE ($) (f) |
| ||||||||||||||||||||
Christopher J. Benjamin |
| | | | | | 14,118 | | | | 1,209 | | | | | | | | 40,760 | | | |||||
Brett A. Brown |
| | | | | | | | | | | | | | | | | | | | | |||||
Lance K. Parker |
| | | | | | 3,925 | | | | 106 | | | | | | | | 4,032 | | | |||||
Nelson N. S. Chun |
| | | | | | 2,703 | | | | 427 | | | | | | | | 14,008 | | | |||||
Meredith J. Ching |
| | | | | | 106 | | | | 3 | | | | | | | | 109 | | | |||||
Diana M. Laing |
| | | | | | | | | | | | | | | | | | | | | |||||
| | | | | | | | | | | |
Other Potential Post-Employment Payments.
Change in Control Agreements: A&B has entered into Change in Control Agreements with each of the NEOs other than Ms. Laing, which are intended to encourage their continued employment with A&B by providing them with greater security in the event of termination of their employment following a change in control of A&B. The Company has adopted a participation policy that extends these agreements to those senior level executives whose employment would be most likely at risk upon a change in control. Each Change in Control Agreement has an initial one-year term and is automatically extended at the end of each term for a successive one-year period, unless terminated by A&B. The Change in Control Agreements provide for certain severance benefits if the executive's employment is terminated by A&B without "cause" or by the executive for "good reason," in each case as defined in the agreement, following a "Change in Control Event" of A&B, as defined by Internal Revenue Code Section 409A, as follows: Upon a termination of employment under the above circumstances, the executive will be entitled to receive (i) a lump-sum severance payment equal to two times the sum of the executive's base salary and target bonus, (ii) pro rata payment at target with respect to outstanding contingent awards for uncompleted performance periods, (iii) a lump sum payment of amounts due the executive under deferred compensation plans, and (iv) an amount equal to the positive spread between the exercise price of outstanding options held by the executive and the fair market value of the underlying shares at the time of termination. In addition, A&B will maintain all (or provide similar) health and welfare benefit plans for the executive's continued benefit for a period of two years after termination. A&B will also reimburse executives for individual outplacement counseling services up to $10,000. These are "double trigger" agreements under which no payments are made and long-term incentives do not accelerate unless both a change in control and a qualifying termination of employment occurs.
In the event that any amount payable to the executive is deemed under the Internal Revenue Code to be made in connection with a change in control of the Company, and such payments would result in the excise tax imposed on "excess parachute payments" under the Internal Revenue Code, the Change in Control Agreements provide that the executive's payments will be reduced to an amount that would not result in the imposition of the excise tax, to the extent that such reduction would result in a greater after-tax benefit to the executive. No tax gross-up payments are provided by the Change in Control Agreements.
If there is a potential change in control of the Company, the executive agrees to remain in the employ of the Company until the earliest of (1) a date six months after the occurrence of the potential change in control, (2) the termination of the executive's employment by reason of disability or retirement, or (3) the occurrence of a change in control of the Company.
Executive Severance Plan: The Company also maintains the Executive Severance Plan ("Severance Plan") that covers the NEOs. The Severance Plan continues from year to year, subject to a periodic review by the Board of Directors. The Severance Plan provides certain severance benefits if a designated executive is involuntarily terminated without "cause," as defined in the
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 39 | |
EXECUTIVE COMPENSATION |
Severance Plan, or laid off from employment as part of a job elimination/restructuring or reduction in force. Upon such termination of employment and execution of a release agreement acceptable to the Company, the executive will be entitled to receive an amount equal to twelve months' base salary, payable in equal installments over a period of one year, continued payment by the Company of life and disability insurance premiums and COBRA premiums for continued group health plan coverage for a maximum of twelve months, reimbursement for outplacement counseling services and a prorated share of incentive plan awards at target levels under the PIIP that would have been payable to the executive had he or she remained employed until the end of the applicable performance period.
Voluntary Resignation: If the executive voluntarily resigns from the Company, no amounts are payable under the Severance Plan or the PIIP. The executive may be entitled to receive retirement and retiree health and welfare benefits to the extent those benefits have been earned or vested under the provisions of the plans. The executive may have up to three to six months after termination to exercise vested stock options at the time of termination. In addition, the executive would be entitled to any amounts voluntarily deferred (and the earnings accrued) under the tax-qualified A&B IDC Plan.
Other benefits, as described in the CD&A section of this Proxy Statement, may include accrued, vested benefits under the Qualified Retirement Plan and the Excess Benefits Plan. See also the Pension Benefits for 2019 table and accompanying narrative.
The following tables show the potential value to each executive other than Ms. Laing under various termination-related scenarios, assuming that the termination of employment or other circumstances resulting in payment occurred on December 31, 2019. Due to the interim nature of her appointment, Ms. Laing was not eligible for the Severance Plan or retirement benefits, was not granted any cash or equity incentive awards and did not have a change in control agreement.
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 40 | | |
|
EXECUTIVE COMPENSATION |
Executive Termination Scenarios
Christopher J. Benjamin |
||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components |
Change in Control w/Termination |
Termination w/o Cause(1) |
Termination w/Cause |
Voluntary Resignation |
Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance |
| | $ | 2,898,000 | | | | $ | 690,000 | | | | | | | | | | | | | | | | | | | | | |||||
Retirement Benefits(4) |
| | ($ | 122,975 | )(6) | | | ($ | 23,973 | )(6) | | | ($ | 23,973 | )(6) | | | ($ | 23,973 | )(6) | | ($ | 23,973 | )(6) | | | | | | ($ | 23,973 | )(6) | | |
|
| | ($ | 6,040 | )(5)(6) | | | ($ | 6,040 | )(5)(6) | | | ($ | 6,040 | )(5)(6) | | | ($ | 6,040 | )(5)(6) | | ($ | 168,462 | )(5)(6) | | | | | | ($ | 6,040 | )(5)(6) | | |
Health & Welfare Benefits |
| | $ | 44,002 | | | | $ | 18,595 | | | | | | | | | | | | | | | | | | | | | |||||
Outplacement Counseling |
| | $ | 10,000 | | | | $ | 10,000 | | | | | | | | | | | | | | | | | | | | | |||||
Long-Term Incentives(7) |
| | $ | 3,053,804 | | | | | | | | | | | | | | | $ | 2,215,830 | | | $ | 2,215,830 | | | | $ | 2,215,830 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) |
| | $ | 5,882,832 | | | | $ | 694,622 | | | | ($ | 23,973 | )(6) | | | ($ | 23,973 | )(6) | | $ | 2,191,857 | | | $ | 2,215,830 | | | | $ | 2,191,857 | | |
Total (Annuity) |
| | ($ | 6,040 | )(6) | | | ($ | 6,040 | )(6) | | | ($ | 6,040 | )(6) | | | ($ | 6,040 | )(6) | | ($ | 168,462 | )(6) | | | | | | ($ | 6,040 | )(6) | | |
| | | | | | | | | | | | | | | |
Brett A. Brown |
||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components |
Change in Control w/Termination |
Termination w/o Cause(1) |
Termination w/Cause |
Voluntary Resignation |
Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance |
| | $ | 1,360,000 | | | | $ | 400,000 | | | | | | | | | | | | | | | | | | | | | |||||
Retirement Benefits(4) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
Health & Welfare Benefits |
| | $ | 44,748 | | | | $ | 21,013 | | | | | | | | | | | | | | | | | | | | | |||||
Outplacement Counseling |
| | $ | 10,000 | | | | $ | 10,000 | | | | | | | | | | | | | | | | | | | | | |||||
Long-Term Incentives(7) |
| | $ | 482,161 | | | | | | | | | | | | | | | $ | 317,364 | | | $ | 317,364 | | | | $ | 317,364 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) |
| | $ | 1,896,910 | | | | $ | 431,013 | | | | | | | | | | | $ | 317,364 | | | $ | 317,364 | | | | $ | 317,364 | | | ||
Total (Annuity) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | | |
Lance K. Parker |
||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components |
Change in Control w/Termination |
Termination w/o Cause(1) |
Termination w/Cause |
Voluntary Resignation |
Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance |
| | $ | 948,355 | | | | $ | 397,838 | | | | | | | | | | | | | | | | | | | | | |||||
Retirement Benefits(4) |
| | $ | 57,517 | | | | $ | 8,891 | | | | $ | 8,891 | | | | $ | 8,891 | | | $ | 8,891 | | | | | | | not yet eligible | | | ||
|
| | ($ | 36,498 | )(5)(6) | | | ($ | 36,498 | )(5)(6) | | | ($ | 36,498 | )(5)(6) | | | ($ | 36,498 | )(5)(6) | | ($ | 121,696 | )(5)(6) | | | | | | not yet eligible | | | ||
Health & Welfare Benefits |
| | $ | 46,983 | | | | $ | 21,841 | | | | | | | | | | | | | | | | | | | | | |||||
Outplacement Counseling |
| | $ | 10,000 | | | | $ | 10,000 | | | | | | | | | | | | | | | | | | | | | |||||
Long-Term Incentives(7) |
| | $ | 1,060,655 | | | | | | | | | | | | | | | $ | 760,198 | | | $ | 760,198 | | | | $ | 760,198 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) |
| | $ | 2,123,510 | | | | $ | 438,570 | | | | $ | 8,891 | | | | $ | 8,891 | | | $ | 769,089 | | | $ | 760,198 | | | | $ | 760,198 | | |
Total (Annuity) |
| | ($ | 36,498 | )(6) | | | ($ | 36,498 | )(6) | | | ($ | 36,498 | )(6) | | | ($ | 36,498 | )(6) | | ($ | 121,696 | )(6) | | | | | | not yet eligible | | | ||
| | | | | | | | | | | | | | | |
| | |
ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 41 | |
EXECUTIVE COMPENSATION |
Nelson N. S. Chun(8) |
||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components |
Change in Control w/Termination |
Termination w/o Cause(1) |
Termination w/Cause |
Voluntary Resignation |
Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance |
| | $ | 1,124,696 | | | | $ | 362,805 | | | | | | | | | | | | | | | | | | | | | |||||
Retirement Benefits(4) |
| | ($ | 34,379 | )(6) | | | | | | | | | | | | | | | | | | | | | | | | ||||||
|
| | | | | | | | | | | | | | | | | ($ | 193,899 | )(5)(6) | | | | | | | | | ||||||
Health & Welfare Benefits |
| | $ | 37,925 | | | | $ | 17,019 | | | | | | | | | | | | | | | | | | | | | |||||
Outplacement Counseling |
| | $ | 10,000 | | | | $ | 10,000 | | | | | | | | | | | | | | | | | | | | | |||||
Long-Term Incentives(7) |
| | $ | 480,375 | | | | | | | | | | | | | | | $ | 351,480 | | | $ | 351,480 | | | | $ | 351,480 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) |
| | $ | 1,618,616 | | | | $ | 389,824 | | | | | | | | | | | $ | 351,480 | | | $ | 351,480 | | | | $ | 351,480 | | | ||
Total (Annuity) |
| | | | | | | | | | | | | | | | | ($ | 193,899 | )(6) | | | | | | | | | ||||||
| | | | | | | | | | | | | | | |
Meredith J. Ching(8) |
||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Components |
Change in Control w/Termination |
Termination w/o Cause(1) |
Termination w/Cause |
Voluntary Resignation |
Death | Disability(2) | Retirement(3) | |||||||||||||||||||||||||||
Cash Severance |
| | $ | 948,392 | | | | $ | 305,933 | | | | | | | | | | | | | | | | | | | | | |||||
Retirement Benefits(4) |
| | ($ | 40,259 | )(6) | | | | | | | | | | | | | | | | | | | | | | | | ||||||
|
| | | | | | | | | | | | | | | | | ($ | 1,111,762 | )(5)(6) | | | | | | | | | ||||||
Health & Welfare Benefits |
| | $ | 34,985 | | | | $ | 15,561 | | | | | | | | | | | | | | | | | | | | | |||||
Outplacement Counseling |
| | $ | 10,000 | | | | $ | 10,000 | | | | | | | | | | | | | | | | | | | | | |||||
Long-Term Incentives(7) |
| | $ | 480,375 | | | | | | | | | | | | | | | $ | 351,480 | | | $ | 351,480 | | | | $ | 351,480 | | | |||
| | | | | | | | | | | | | | | | |||||||||||||||||||
Total (Lump-sum) |
| | $ | 1,433,493 | | | | $ | 331,494 | | | | | | | | | | | $ | 351,480 | | | $ | 351,480 | | | | $ | 351,480 | | | ||
Total (Annuity) |
| | | | | | | | | | | | | | | | | ($ | 1,111,762 | )(6) | | | | | | | | | ||||||
| | | | | | | | | | | | | | | |
All amounts shown are lump-sum payments, unless otherwise noted. Assumptions used in the tables above are set forth in the Pension Benefits section, with the exception of Change in Control, which was calculated based on lump sum assumptions as of 12/31/2019 (1.96% (first 5 years), 2.60% (next 15 years), and 2.78% (years in excess of 20) for the Qualified Plan.
The Excess Benefits Plan benefits are paid, upon termination, as a lump sum equal to the present value of the traditional defined benefit assumed to be paid on a life annuity basis plus the cash balance account. The lump sum conversion was based on interest rates (with 39% marginal tax rate adjustment) and mortality used in our financial disclosures and included in the Pension Benefits section.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 42 | | |
|
EXECUTIVE COMPENSATION |
CEO to Median Employee Pay Ratio Information
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, we are providing information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
In determining the summary compensation table amount of pay for our CEO and the median employee, management employed the same methodology used for NEOs as set forth in the 2019 Summary Compensation Table. The Company's contribution to employee health plans was also included. As illustrated below, using the Total Pay amounts, A&B's 2019 CEO to median employee pay ratio is 53:1.
CEO to Median Pay Ratio
|
| Summary Compensation Table Amount | + | Company Contribution to Health Plans | = | Total Pay | | |||||||||||
CEO |
| | $ | 3,913,066 | | | | | | $ | 12,761 | | | | | $ | 3,925,827 | |
Median Employee |
| | $ | 66,344 | | | | | $ | 8,302 | | | | $ | 74,646 | |
As allowed under applicable rules, we used the same median employee that was identified in the 2019 proxy statement using the following steps:
The pay ratio is a reasonable estimate calculated based on rules and guidance provided by the SEC. The SEC rules allow for varying methodologies for companies to identify their median employee; and other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Consequently, the pay ratios reported by other companies are unlikely to be relevant or meaningful for purposes of comparison to our pay ratio as reported here.
Use of Non-GAAP Financial Measures
Cash Net Operating Income ("Cash NOI") is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. The Company believes Cash NOI provides useful information to investors regarding the Company's financial condition and results of operations because it reflects only those cash income and expense
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 43 | |
EXECUTIVE COMPENSATION |
items that are incurred at the property level, and when compared across periods, can be used to determine trends in earnings of the Company's properties as this measure is not affected by non-cash revenue and expense recognition items, the impact of depreciation and amortization expenses or other gains or losses that relate to the Company's ownership of properties. The Company believes the exclusion of these items from operating profit (loss) is useful because the resulting measure captures the actual cash-based revenue generated and actual expenses incurred in operating the Company's Commercial Real Estate portfolio as well as trends in occupancy rates, rental rates, and operating costs. Cash NOI should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Cash NOI represents total Commercial Real Estate cash-based operating revenues less direct property-related operating expenses. The calculation of Cash NOI excludes the impact of depreciation and amortization (including amortization of maintenance capital, tenant improvements and leasing commissions); straight-line lease adjustments (including amortization of lease incentives); amortization of favorable/unfavorable lease assets/liabilities; lease termination income; other income and expense, net; selling, general, administrative and other expenses; and impairment of commercial real estate assets.
The Company reports Cash NOI on a same-store basis ("Same-Store"), which includes the results of properties that were owned and operated for the entirety of the current and prior calendar year. The Same-Store pool excludes properties under development or redevelopment and also excludes properties acquired or sold during either of the comparable reporting periods. While there is management judgment involved in classifications, new developments and redevelopments are moved into the Same-Store pool after one full calendar year of stabilized operation. New developments and redevelopments are generally considered stabilized upon the initial attainment of 90% occupancy. Properties included in held for sale are excluded from Same-Store.
The Company believes that reporting on a Same-Store basis provides investors with additional information regarding the operating performance of comparable assets versus from other factors (such as the effect of developments, redevelopments, acquisitions or dispositions).
The Company's methods of calculating non-GAAP measures may differ from methods employed by other companies and thus may not be comparable to such other companies.
A reconciliation of Commercial Real Estate operating profit to CRE NOI and CRE Same-Store NOI and CRE Non-Same Store NOI follows:
|
|
Year Ended |
|||||
| | | | | | | |
(In millions) |
|
2019 |
|
2018 | |||
Commercial Real Estate operating profit |
$ | 66.2 | $ | 58.5 | |||
Adjustments: |
|||||||
Depreciation and amortization |
| 36.7 | | 28.0 | |||
Straight-line lease adjustments |
(5.1 | ) | (4.0 | ) | |||
Favorable/(unfavorable) lease amortization |
| (1.6 | ) | | (1.9 | ) | |
Termination income |
(0.1 | ) | (1.1 | ) | |||
Other (income)/expense, net |
| (2.0 | ) | | 0.3 | ||
Selling, general, administrative and other expenses |
10.1 | 6.9 | |||||
Legal costs previously capitalized(1) |
| 0.0 | | (0.5 | ) | ||
| | | | | | | |
CRE NOI |
$ | 104.2 | $ | 86.2 | |||
Acquisitions / dispositions and other adjustments |
| (25.7 | ) | | (11.6 | ) | |
| | | | | | | |
CRE Same-Store NOI |
$ | 78.5 | $ | 74.6 | |||
| | | | | | | |
CRE Non-Same Store NOI |
$ | 25.7 | $ | 11.6 | |||
| | | | | | | |
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 44 | | |
|
EXECUTIVE COMPENSATION |
Consolidated Adjusted Operating Cash Flow was a liquidity measure for the Company for the year ended December 31, 2019, as management believes that the measure provided useful information about the Company's ability to generate cash for ongoing business operations and strengthening the balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Net Cash Provided by Operations is the most directly comparable GAAP measurement to Consolidated Adjusted Operating Cash Flow. A reconciliation of Net Cash Provided by Operations to Consolidated Adjusted Operating Cash Flow is as follows:
(In Millions) |
|
2019 | ||
Net Cash Provided by Operations |
$ | 157.6 | ||
Adjustments: |
||||
Net cash used in investing activities |
| (240.4 | ) | |
Cash outflows for Commercial Real Estate §1031 investments |
218.4 | |||
| | | | |
Consolidated Adjusted Operating Cash Flow |
$ | 135.6 | ||
| | | | |
The Company presents the non-GAAP measure of M&C Adjusted EBITDA, which contain the results of Grace Pacific. The Company uses this non-GAAP financial measure when evaluating operating performance for the Materials & Construction segment because management believes that M&C Adjusted EBITDA provides insight into the segment's core operating results, future cash flow generation, and the underlying business trends affecting performance on a consistent and comparable basis from period to period. The Company provides this information as an additional means of evaluating the segment's ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Materials & Construction operating profit is the most directly comparable GAAP measurement to the M&C Adjusted EBITDA. A reconciliation of segment operating profit to M&C Adjusted EBITDA follows:
|
|
Year Ended December 31 |
|||||
| | | | | | | |
(In Millions) |
|
2019 |
|
2018 | |||
Materials & Construction Operating Profit |
$ | (69.2 | ) | $ | (73.2 | ) | |
Depreciation & amortization expense |
11.4 | 12.1 | |||||
Impairment of assets |
| 49.7 | | 77.8 | |||
Income attributable to non-controlling interest |
2.0 | (2.2 | ) | ||||
| | | | | | | |
M&C Adjusted EBITDA |
$ | (6.1 | ) | $ | 14.5 | ||
| | | | | | | |
Consolidated Adjusted Pre-tax Income (Loss) was an operating performance measure for the Company for the year ended December 31, 2019, as management believes that the measure provided insight into the operating results of the Company's core businesses and the underlying business trends affecting performance on a consistent and comparable basis from period to period. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Income (Loss) From Continuing Operations Before Income Taxes is the most directly comparable GAAP measurement to Consolidated Adjusted Pre-tax Income (Loss). A reconciliation of Income (Loss) From Continuing Operations Before Income Taxes to Consolidated Adjusted Pre-tax Income (Loss) follows:
(In Millions) |
|
2019 | ||
Income (Loss) From Continuing Operations Before Income Taxes |
$ | (38.9 | ) | |
Adjustments: |
||||
Non-cash asset impairments related to the M&C segment |
| 49.7 | ||
Non-cash reduction in solar investment |
0.1 | |||
| | | | |
Consolidated Adjusted Pre-tax Income (Loss) |
$ | 10.9 | ||
| | | | |
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 45 | |
|
PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Shareholders are being asked to vote to approve, on a non-binding, advisory basis, the compensation of our NEOs.
A&B's compensation philosophy is to drive the Company's performance and further shareholder interests through a compensation program that attracts, motivates and retains outstanding executives, and rewards outstanding performance. The CD&A section of this Proxy Statement discusses our policies and procedures that implement our compensation philosophy. Highlights of our compensation program include the following:
The following resolution is being submitted for a shareholder advisory vote at the Annual Meeting:
"RESOLVED, that the Company's shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company's Proxy Statement for the 2020 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2019 Summary Compensation Table and the other related tables and disclosure."
Although the advisory vote is non-binding, the Compensation Committee and the Board will review the results of the vote and consider them in future determinations concerning our executive compensation program.
The Board of Directors recommends that shareholders vote FOR the approval of the resolution relating to executive compensation.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 46 | | |
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|
The Audit Committee provides assistance to the Board of Directors in fulfilling its obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of A&B, including the review and approval of all related person transactions required to be disclosed in this Proxy Statement. Among other things, the Audit Committee reviews and discusses with management and Deloitte & Touche LLP, A&B's independent registered public accounting firm, the results of the year-end audit of A&B, including the auditors' report and audited financial statements. In this context, the Audit Committee has reviewed and discussed A&B's audited financial statements with management, has discussed with Deloitte & Touche LLP the matters required to be discussed by applicable Public Company Accounting Oversight Board rules and, with and without management present, has discussed and reviewed the results of the independent registered public accounting firm's audit of the financial statements.
The Audit Committee has received the written communication regarding independence from Deloitte & Touche LLP required under the rules of the Public Company Accounting Oversight Board and the SEC, and has discussed with Deloitte & Touche LLP its independence from A&B. The Audit Committee has determined that the provision of non-audit services rendered by Deloitte & Touche LLP to A&B is compatible with maintaining the independence of Deloitte & Touche LLP from A&B in the conduct of its auditing function.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that A&B's audited consolidated financial statements be included in A&B's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for filing with the SEC. The Audit Committee also has appointed, subject to shareholder ratification, Deloitte & Touche LLP as A&B's independent registered public accounting firm for 2020.
The foregoing report is submitted by Mr. Pasquale (Chairman), Mr. Doane and Mr. Yeaman.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 47 | |
|
PROPOSAL NO. 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors is responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The Audit Committee also conducts an annual evaluation of the independent registered public accounting firm. After evaluating, among other things, qualifications, performance and independence of Deloitte & Touche LLP, the Audit Committee has appointed Deloitte & Touche LLP as the independent registered public accounting firm of A&B for the ensuing year, and recommends that shareholders vote in favor of ratifying such appointment. Although ratification of this appointment is not required by law, the Board believes that it is desirable as a matter of corporate governance. If shareholders do not ratify the appointment of Deloitte & Touche LLP, it will be considered as a recommendation to the Board and the Audit Committee to consider the retention of a different firm. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting, where they will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from shareholders.
In compliance with the Sarbanes Oxley Act of 2002 and applicable SEC rules, the Audit Committee has adopted policies and procedures for Audit Committee approval of audit and non-audit services. Under such policies and procedures, the Audit Committee pre-approves or has delegated to the Chairman of the Audit Committee authority to pre-approve all audit and non-prohibited, non-audit services performed by the independent registered public accounting firm in order to assure that such services do not impair the auditor's independence. Any additional proposed services or costs exceeding pre-approved cost levels require additional pre-approval as described above. The Audit Committee may delegate pre-approval authority to one or more of its members for services not to exceed a specific dollar amount per engagement. Requests for pre-approval include a description of the services to be performed, the fees to be charged and the expected dates that the services will be performed. All services provided by Deloitte & Touche LLP during 2019 were pre-approved in accordance with these policies.
For the years ended December 31, 2019 and 2018, professional services were performed by Deloitte & Touche LLP (including affiliates) for A&B as follows:
Audit Fees. The aggregate fees billed for the audit of the Company's annual consolidated financial statements, including Sarbanes-Oxley Section 404 attestation-related work, for the fiscal years ended December 31, 2019 and 2018, the reviews of the interim financial statements included in the Company's Quarterly Reports on Form 10-Q and consents for SEC registration statements were approximately $1,966,000 and $2,335,000, respectively.
Audit-Related Fees. The aggregate fees billed for Audit-Related services for the fiscal years ended December 31, 2019 and 2018 were approximately $0.
Tax Fees. The aggregate fees billed for professional tax services for fiscal years ended December 31, 2019 and 2018 were approximately $34,000 and $16,000, respectively, and were related primarily to tax compliance services in 2019 and 2018.
All Other Fees. The aggregate fees billed for other services for fiscal years ended December 31, 2019 and 2018 were approximately $0 and $27,000, respectively, and were related primarily to certain advisory services in 2018.
SHAREHOLDERS WITH THE SAME ADDRESS
Individual shareholders sharing an address with one or more other shareholders may elect to "household" the mailing of the Notice of Internet Availability of Proxy Materials or our annual report and proxy statement. This means that only one Notice of Internet Availability of Proxy Materials or our annual report and proxy statement will be sent to that address unless one or more shareholders at that address specifically elect to receive separate mailings. Shareholders who participate in householding will continue to receive separate proxy cards. We will promptly send a separate Notice of Internet Availability of Proxy Materials or our annual report and proxy statement to a shareholder at a shared address on request. Shareholders with a shared address may also request us to send separate Notices of Internet Availability of Proxy Materials or our annual reports and proxy statements in the future, or to send a single copy in the future if we are currently sending multiple copies to the same address.
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
| PAGE 48 | | |
|
PROPOSAL NO. 3 |
Requests related to householding should be mailed to Alexander & Baldwin, Inc., P.O. Box 3440, Honolulu, HI 96801-3440, Attn: Alyson J. Nakamura, Corporate Secretary or by calling (808) 525-8450. If you are a shareholder whose shares are held by a bank, broker or other nominee, you can request information about householding from your bank, broker or other nominee.
The Board of Directors of A&B knows of no other business to be presented for shareholder action at the Annual Meeting. However, should matters other than those included in this Proxy Statement properly come before the Annual Meeting, the proxy holders named in the accompanying proxy will use their best judgment in voting upon them.
SHAREHOLDER PROPOSALS FOR 2021
Proposals of shareholders intended to be presented pursuant to Rule 14a-8 under the Exchange Act at the 2020 Annual Meeting of A&B must be received at the headquarters of A&B on or before November 17, 2020 in order to be considered for inclusion in the year 2021 Proxy Statement and proxy.
In order for proposals of shareholders made outside of Rule 14a-8 under the Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c) under the Exchange Act, such proposals must be received at the headquarters of A&B not later than December 29, 2020. A&B's Bylaws require that shareholder proposals made outside of Rule 14a- 8 under the Exchange Act must be submitted, in accordance with the requirements of the Bylaws, not later than December 29, 2020 and not earlier than November 29, 2020.
The Company's Bylaws provide that no person (other than a person nominated by the Board) will be eligible to be elected a director at an annual meeting of shareholders unless the Corporate Secretary has received, not less than 120 days nor more than 150 days before the anniversary date of the prior annual meeting, a written shareholder's notice in proper form that the person's name be placed in nomination. If the annual meeting is not called for a date which is within 25 days of the anniversary date of the prior annual meeting, a shareholder's notice must be given not later than 10 days after the date on which notice of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever occurs first. To be in proper written form, a shareholder's notice must include information about each nominee and the shareholder making the nomination. The notice also must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
By Order of the Board of Directors | ||
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ALYSON J. NAKAMURA Vice President and Corporate Secretary |
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ALEXANDER & BALDWIN, INC. § 2020 PROXY STATEMENT |
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain 01 - Christopher J. Benjamin 02 - Robert S. Harrison 03 - Stanley M. Kuriyama 04 - Diana M. Laing 05 - Thomas A. Lewis, Jr. 06 - Douglas M. Pasquale 07 - Michele K. Saito 08 - Eric K. Yeaman For Against Abstain For Against Abstain 2. PROPOSAL TO APPROVE THE ADVISORY RESOLUTION RELATING TO EXECUTIVE COMPENSATION 3. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE CORPORATION NOTE: Such other business as may properly come before the meeting or any adjournments thereof. THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3, AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS PROPERLY MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. Date (mm/dd/yyyy) Please print date below. Signature 1 Please keep signature within the box. Signature 2 Please keep signature within the box. + 1 U P X 036Q4C B Authorized Signatures This section must be completed for your vote to count. Please date and sign below. A Proposals The Board of Directors recommends a vote FOR the nominees listed and FOR Proposals 2 AND 3. Annual Meeting Proxy Card
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders. The Proxy Statement and the 2019 Annual Report to Shareholders are available at: www.edocumentview.com/ALEX q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 822 Bishop Street, Honolulu, Hawaii 96813 PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 28, 2020 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints C.J. Benjamin, S.M. Kuriyama and D.M. Pasquale, and each of them, proxies with full power of substitution, to vote the shares of stock of Alexander & Baldwin, Inc., which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Corporation to be held on Tuesday, April 28, 2020, and at any adjournments or postponements thereof, on the matters set forth in the Notice of Meeting and Proxy Statement, as stated on the reverse side. THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3, AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS PROPERLY MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. (continued and to be marked, dated and signed, on other side) Proxy ALEXANDER & BALDWIN, INC.