PRE 14A
Table of Contents
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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
 
 
Filed by the Registrant  
       
Filed by a party other than the Registrant  
Check the appropriate box:
 
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Under Rule
240.14a-12
ENOVIS CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
 
 
No fee required.
 
Fee paid previously with preliminary materials.
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and
0-11.
 


Table of Contents

 

 

 

LOGO

Proxy Statement

and

Notice of Annual Meeting

May 20, 2024 at 1:00 p.m. Eastern Time


Table of Contents

LOGO

 

Notice of 2024 

Annual Meeting 

of Stockholders 

 

 

Monday, May 20, 2024

1:00 p.m. Eastern Time

Via live webcast at

www.virtualshareholdermeeting.com/ENOV2024

To Our Stockholders:

Notice is hereby given that the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Enovis Corporation (“Enovis”) will be held via live webcast at www.virtualshareholdermeeting.com/ENOV2024 on Monday, May 20, 2024 at 1:00 p.m. Eastern Time, for the following purposes:

 

1.

To elect the ten members of the Board of Directors named in the attached proxy statement;

 

2.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;

 

3.

To approve the compensation of our named executive officers on an advisory basis (“say-on-pay”);

 

4.

To approve an amendment to the Enovis Corporation 2020 Omnibus Incentive Plan;

 

5.

To amend the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation; and

 

6.

To consider any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof.

The accompanying proxy statement describes the matters to be considered at the Annual Meeting. Only stockholders of record at the close of business on March 25, 2024 are entitled to notice of, and to vote at, the Annual Meeting and at any adjournments or postponements thereof.

We are pleased to take advantage of the Securities and Exchange Commission rules that allow us to furnish our proxy materials and our annual report to stockholders on the Internet. We believe that posting these materials on the Internet enables us to provide our stockholders with the information that they need more quickly while lowering our costs of printing and delivery and reducing the environmental impact of our Annual Meeting.

We are holding the Annual Meeting in a virtual-only format this year. We believe that this is the right choice for Enovis and its stockholders, as it provides expanded stockholder access, improves stockholder convenience, improves communications, alleviates the environmental impact of traveling to an in-person meeting and promotes the health and safety of participants by allowing them to participate from any location. To attend, participate in, and vote during the Annual Meeting, stockholders of record must go to the meeting website at www.virtualshareholdermeeting.com/ENOV2024 and enter the control number found on their proxy card or Notice of Internet Availability of Proxy Materials (the “Notice”). If you are a beneficial stockholder who owns common stock in street name, meaning through a bank, broker or other nominee, and your voting instruction form or Notice indicates that you may vote those shares through the http://www.proxyvote.com website, then you may attend, participate in, and vote during the Annual Meeting using the 16-digit control number indicated on that voting instruction form or Notice. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least five days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the Annual Meeting.

As a stockholder of Enovis, your vote is important. Whether or not you plan to attend the Annual Meeting virtually, we urge you to vote your shares at your earliest convenience and thank you for your continued support of Enovis Corporation.

Dated: April [5], 2024

By Order of the Board of Directors

Brian P. Hanigan

Secretary


Table of Contents

Table of Contents

 

PROXY SUMMARY

     1  

Corporate Social Responsibility and Sustainability

     5  

Proxy Statement for Annual Meeting of Stockholders

     8  

PROPOSAL 1 ELECTION OF DIRECTORS

     9  

Director Qualifications

     9  

Nominees for Director

     10  

Vote Required

     14  

Board Recommendation

     14  

CORPORATE GOVERNANCE

     15  

Director Independence

     15  

Board of Directors and its Committees

     15  

Compensation Committee Interlocks and Insider Participation

     17  

Identification of Director Candidates and Director Nomination Process

     17  

Board Leadership Structure

     18  

Board Evaluation Process

     18  

Board’s Role in Risk Oversight

     19  

Standards of Conduct

     20  

Certain Relationships and Related Person Transactions

     20  

Contacting the Board of Directors

     21  

DIRECTOR COMPENSATION

     22  

PROPOSAL 2 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     24  

Independent Registered Public Accounting Firm Fees and Services

     24  

Audit Committee’s Pre-Approval Policies and Procedures

     25  

Vote Required

     25  

Board Recommendation

     25  

AUDIT COMMITTEE REPORT

     26  

COMPENSATION DISCUSSION AND ANALYSIS

     27  

Executive Summary

     27  

Determination of Executive Compensation and Performance Criteria

     31  

Elements of Our 2023 Executive Compensation Program

     31  

COMPENSATION AND HUMAN CAPITAL MANAGEMENT COMMITTEE REPORT

     40  

EXECUTIVE COMPENSATION

     41  

Summary Compensation Table

     41  

Grants of Plan-Based Awards for 2023

     43  

Outstanding Equity Awards at 2023 Fiscal Year-End

     44  

Option Exercises and Stock Vested During Fiscal 2023

     47  

Nonqualified Deferred Compensation

     48  

Potential Payments Upon Termination or Change of Control

     52  

CEO PAY RATIO DISCLOSURE

     53  

PAY-VERSUS-PERFORMANCE

     54  


Table of Contents

EQUITY COMPENSATION PLAN INFORMATION

     57  

PROPOSAL 3 APPROVAL OF NAMED EXECUTIVE OFFICERS’ COMPENSATION, ON A NON-BINDING ADVISORY BASIS (“SAY-ON-PAY”)

     58  

Why You Should Approve Our Executive Compensation Program

     58  

Vote Required

     58  

Board Recommendation

     58  

PROPOSAL 4 APPROVAL OF AN AMENDMENT TO THE ENOVIS CORPORATION 2020 OMNIBUS INCENTIVE PLAN

     59  

PROPOSAL 5 APPROVAL OF AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO REFLECT NEW DELAWARE LAW PROVISIONS REGARDING OFFICER EXCULPATION

     69  

BENEFICIAL OWNERSHIP OF OUR COMMON STOCK

     71  

GENERAL MATTERS

     73  

Outstanding Stock and Voting Rights

     73  

Stockholder Proposals and Nominations

     74  

Delivery of Documents to Stockholders Sharing an Address

     74  

Additional Information

     75  

Other Matters

     75  

Appendix A

     A-1  

Special Note Regarding Forward-Looking Statements

This proxy statement (this “Proxy Statement”) includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning the plans, goals, objectives, outlook, expectations and intentions of Enovis Corporation (“Enovis” or “we”) and other statements that are not historical or current fact. Forward-looking statements are based on our current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause our results to differ materially from current expectations include, but are not limited to, risks related to macroeconomic conditions, including the impact of increasing inflationary pressures; supply chain disruptions; increasing energy costs and availability concerns; risks related to the Company’s recently completed acquisition of LimaCorporate S.p.A.; the impact of public health emergencies and global pandemics (including COVID-19); other impacts on our business and ability to execute business and growth strategies and to achieve environmental, social and governance goals; and the other factors detailed in our reports filed with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 under the caption “Risk Factors,” as well as the other risks discussed in our filings with the SEC. In addition, these statements are based on assumptions that are subject to change. This Proxy Statement speaks only as of the date hereof. We do not assume any obligation and do not intend to update any forward-looking statement except as required by law.


Table of Contents

PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement.

Annual Meeting of Stockholders

 

   
 Date and Time:   

Monday, May 20, 2024 at 1:00 p.m., Eastern Time

 Location:   

Via live webcast at www.virtualshareholdermeeting.com/ENOV2024

 Record Date:   

March 25, 2024

Availability of Proxy Materials – Use of Notice and Access

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on May 20, 2024: Our Annual Report to Stockholders and this Proxy Statement are available at www.proxyvote.com.

Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission, we have elected to provide stockholders access to our proxy materials primarily over the Internet. Accordingly, on or about April [5], 2024, we sent a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders entitled to vote at the Annual Meeting as of the close of business on March 25, 2024, the record date of the meeting. The Notice includes instructions on how to access our proxy materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our annual meetings on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

Who May Vote

You may vote if you were a stockholder of record at the close of business on March 25, 2024, the record date.

How to Cast Your Vote

You can vote by any of the following methods:

 

LOGO  

Via the internet (www.proxyvote.com) through May 19, 2024;

LOGO  

By telephone (1-800-690-6903) through May 19, 2024;

 

LOGO

 

 

By completing, signing and returning your proxy by mail in the envelope provided or to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NJ 11717 by May 19, 2024; or

 

 

Via virtual attendance and voting at the Annual Meeting. To attend the Annual Meeting, you must go to the meeting website at www.virtualshareholdermeeting.com/ENOV2024 and enter your control number. Once admitted, you may vote by following the instructions available on the meeting website. If you are a beneficial stockholder who owns shares in street name and have questions about your control number or how to obtain one, please contact the bank, broker or other nominee who holds your shares.

If you are a beneficial stockholder who owns your shares in street name, the availability of online or telephone voting may depend on the voting procedures of the organization that holds your shares.

 

    

LOGO  - 2024 Proxy Statement

 

 

1


Table of Contents

Voting Matters

We are asking you to vote on the following proposals at the Annual Meeting:

 

 Proposal    Board Vote Recommendation    Page Reference 

Proposal 1 – Election of Directors

   FOR each director nominee    9  

Proposal 2 – Approval of Auditor

   FOR    24  

Proposal 3 – Say-on-Pay

   FOR    58  

Proposal 4 – Approval of an amendment to the Enovis Corporation 2020 Omnibus Incentive Plan

   FOR    59  

Proposal 5 – Approval of an amendment to the Company’s Certificate of Incorporation

   FOR    69  

Board and Governance Highlights

 

Refreshed and experienced Board, with four new directors appointed since April 2022

 

Strong Lead Independent Director

 

60% of Board is female and/or racially or ethnically diverse

 

Female directors hold key Board leadership positions, including Lead Independent Director and Compensation and Human Capital Management Committee Chair

 

Anti-hedging, anti-pledging, and clawback policies

 

Robust stock ownership requirements for officers and directors

 

Majority voting standard in uncontested director elections

 

No stockholder rights plan

 

2

 

 

LOGO  - 2024 Proxy Statement

   


Table of Contents

Board Nominees (page 10)

The following table provides summary information about each director nominee:

 

 Name   Age   

Director

Since

   Occupation    Independent    Committee
Memberships
   Other Public Boards

 Matthew L. Trerotola

  57    2015    Chief Executive Officer, Enovis Corporation       N/A   

  AptarGroup, Inc.

 Barbara W. Bodem

  56    2022    Former Chief Financial Officer, Hill-Rom Holdings, Inc.    ü    Audit   

  BioMarin Pharmaceutical, Inc.

  Option Care Health, Inc.

 Liam J. Kelly

  57    2020    President and Chief Executive Officer, Teleflex Incorporated    ü    Nominating   

  Teleflex Incorporated

 Angela S. Lalor

  58    2022    Retired Senior VP, Human Resources, Danaher Corporation    ü    CHCM (Chair)    None

 Philip A. Okala

  55    2021    Chief Operating Officer, Tufts Medicine    ü    Audit    None

 Christine Ortiz

  53    2022    Morris Cohen Professor of Materials Science and Engineering at Massachusetts Institute of Technology    ü    Nominating   

  Mueller Water Products, Inc.

 A. Clayton Perfall

  65    2010    Former Operating Executive, Tailwind Capital    ü    Audit (Chair)    None

 Brady Shirley

  58    2022    Executive Advisor (former President and Chief Operating Officer), Enovis Corporation       N/A    None

 Rajiv Vinnakota

  53    2008    President, Institute for Citizens & Scholars (formerly the Woodrow Wilson National Fellowship Foundation)    ü   

CHCM

Nominating (Chair)

  

  ESAB Corporation

 Sharon Wienbar

  62    2016    Former Venture Partner, Scale Venture Partners    ü    CHCM   

  Resideo Technologies, Inc.

 

    

LOGO  - 2024 Proxy Statement

 

 

3


Table of Contents

Our ten director nominees are current directors and have diverse backgrounds, skills and experience, which the Board believes contributes to the effective oversight of the Company. The following charts summarize the diversity, skills and experience of our Board members:

 

 

LOGO

Skills and Attributes

 

LOGO

                          
  

Current or former CEO, CFO or COO

 

 

 

 

 

 

 

 

 

 

 

    9/10  
                          
                          

LOGO

                          
  

Other public company board experience

 

 

 

 

 

 

 

 

 

 

 

    7/10  
                          
                          

LOGO

                          
  

Related MedTech industry experience

 

 

 

 

 

 

 

 

 

 

 

    9/10  
                          
                          
LOGO                           
  

Broad international experience

 

 

 

 

 

 

 

 

 

 

 

    6/10  
                          
                          

LOGO

                          
  

Extensive M&A or capital markets experience

 

 

 

 

 

 

 

 

 

 

 

    7/10  
                          
                          
                          

LOGO

  

Tech/R&D/Innovation experience

                       
 

 

 

 

 

 

 

 

 

 

 

    5/10  
                          
                          

LOGO

                          
  

Enterprise IT/Cybersecurity experience

 

 

 

 

 

 

 

 

 

 

 

    5/10  
                          
                          

LOGO

                          
  

Sustainability/CSR experience

 

 

 

 

 

 

 

 

 

 

 

    6/10  
                          
                          

LOGO

                          
   Organizational management and leadership development   

 

 

 

 

 

 

 

 

 

 

    10/10  
                          
                          

LOGO

                          
   Finance, accounting or risk management experience  

 

 

 

 

 

 

 

 

 

 

    7/10  
                          

 

4

 

 

LOGO  - 2024 Proxy Statement

   


Table of Contents

In accordance with the Company’s Amended and Restated Bylaws (the “Bylaws”), to be elected each director nominee must receive a majority of the votes cast with respect to that director’s election. Incumbent directors nominated for election by the Board are required, as a condition to such nomination, to submit a conditional letter of resignation to the Chair of the Board. In the event that a nominee for director does not receive a majority of the votes cast at the Annual Meeting with respect to his or her election, the Board will promptly consider whether to accept or reject the conditional resignation of that nominee, or whether other action should be taken. The Board will then take action and will publicly disclose its decision and the rationale behind it no later than 90 days following the certification of election results.

Corporate Social Responsibility and Sustainability

Our corporate social responsibility (“CSR”) and sustainability program is organized around identifying, assessing and managing on an ongoing basis the environmental, social and governance (“ESG”) factors that are relevant to our long-term financial performance. Our sustainability program takes into account the interests of our key stakeholder constituencies, including our employees, customers, communities and stockholders. ESG issues that we focus on across the Company include workplace health and safety, energy efficiency, waste management, climate risk, human capital management, diversity and inclusion, supply chain management, business ethics and compliance, and data privacy and protection.

In March 2024, we published our 2023 CSR Report, which details our CSR program and initiatives, and can be accessed on our website at www.enovis.com on the Investors page under the Corporate Governance Tab. The report builds on our 2022 CSR Report, which was our first such report as a standalone medical technology company following the spin-off of ESAB Corporation in April 2022. Key elements of our CSR program and selected highlights from the 2023 CSR Report are summarized below.

The information on our website is not, and shall not be deemed to be, a part of this Proxy Statement or incorporated into any other filings we make with the SEC, and any reference to our website is intended to be an inactive textual reference only.

 

 

 

LOGO

 

Governance; Community Involvement and Corporate Citizenship

 

We take ESG-related risks and opportunities into account in our strategic decision-making, both by the Board and management.

 

ESG matters are managed and monitored by senior management throughout the year. The Board exercises oversight over ESG matters at the full Board level and through our relevant committees.

 

Under its charter, our Nominating and Corporate Governance Committee is expressly tasked with reviewing the Company’s undertakings with respect to ESG matters, including our role as a corporate citizen and policies and programs relating to health, safety and sustainability matters. An ESG update is included as a standing agenda item at each Nominating and Corporate Governance Committee Meeting.

 

Our refreshed Board is comprised of individuals with diverse backgrounds, skills and experiences, and our Nominating and Corporate Governance Committee charter and Corporate Governance Guidelines reflect our commitment to actively seeking out highly qualified women and minority director candidates, as well as candidates with diverse backgrounds, experiences and skills as part of each director search the Company undertakes.

 

Our Audit Committee charter expressly tasks the Audit Committee with the review and oversight of the Company’s policies with respect to risk assessment and risk management related to information technology and cybersecurity.

 

At least once a quarter, management provides the Audit Committee with an update on cybersecurity.

 

The Company maintains a robust information security training and compliance program, which includes, among other things, regular phishing awareness training. In October 2023, the Company again conducted a cybersecurity awareness month campaign, which focused on a variety of training topics aimed at promoting a strong and resilient security culture in our organization.

 

We also maintain a global data privacy program, which is overseen by our global privacy officer and sets out a framework for compliance with the EU General Data Protection Regulation and other relevant privacy laws and regulations.

 

    

LOGO  - 2024 Proxy Statement

 

 

5


Table of Contents

We believe in giving back to our communities and supporting other worthwhile initiatives that contribute to the betterment of society. We encourage all of our sites to participate in a “Creating Better in the Community Day.” The initiative is led by our local teams and employees are provided with an additional day of paid time off to participate. Our 2023 CSR Report highlights a number of the group events that our sites organized in 2023..

 

 

 

LOGO

 

Health, Safety and Environment

 

The protection of human health, personal safety and environmental quality rank at the highest level of importance to Enovis.

 

Our full Board reviews our safety initiatives at the start of each regularly scheduled Board meeting.

 

In addition, our executive leadership team reviews safety matters with our site leaders on a regular and ongoing basis, and our safety initiatives and safety performance are discussed and highlighted with all Enovis team members at each quarterly town hall meeting.

 

As part of our continuous improvement culture, we maintain an active and robust environmental, health and safety (“EHS”) audit program, and our team members participate in EHS training on an ongoing basis.

 

Building on the initial assessment of scope 1 and scope 2 greenhouse gas (GHG) emissions that we completed at eleven of the Company’s largest sties in the second half of 2022, in 2023 we completed our first enterprise-wide scope 1 and scope 2 GHG emissions assessment and reported the results in our 2023 CSR Report.

 

In order to identify meaningful and actionable opportunities to reduce our environmental impact, we recently completed an energy maturity assessment for five of our largest sites and plan to analyze and utilize the recommendations from this assessment to drive future improvements.

 

 

 

LOGO

 

Human Capital; Diversity, Equity and Inclusion; Human Rights and Supply Chain

 

As an equal opportunity employer, we are committed to a diverse workforce.

 

Our Compensation and Human Capital Management Committee’s responsibilities include oversight of the Company’s strategies and policies related to human capital management, including matters such as diversity, inclusion, pay equity, corporate culture, talent development and retention.

 

During 2023, we continued to expand our diversity, equity and inclusion (DE&I) initiatives and key priorities. These actions included, among other things, expanded programming by two affinity groups, our global Women’s Leadership Group and Black Leadership Group.

 

We conduct an annual global associate engagement survey to gather associate feedback. We share the survey results with all team members, and managers conduct formal focus groups and discussions with their teams to implement action plans to address key areas for improvement.

 

During 2023, we continued to build out our team member training and development initiatives, including our managing extraordinary talent program, which focuses on management fundamentals and includes seven courses and an action planning session.

 

We have publicly stated our commitment to respecting human rights across all of our business operations in accordance with the Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work.

 

LOGO

 

 

 

Without limiting the foregoing, we do not utilize or permit:

Child labor,

Forced labor, or

Other abusive or unsafe working conditions.

 

 

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To further emphasize our commitment to human rights, we have adopted a Global Human Rights Policy, which is available on our website at www.enovis.com on the Investors page under the Corporate Governance tab.

Auditor Ratification (page 24)

We ask our stockholders to approve the selection of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024. Below is summary information about fees paid or due to be paid to Ernst & Young LLP for services provided in 2023 and 2022:

 

Fee Category (fees in thousands)    2023        2022  

 Audit Fees

   $ 3,997        $ 3,509  

 Audit-Related Fees

               

 Tax Fees

     302          285  

 All Other Fees

               
     

 TOTAL

   $ 4,299        $ 3,794  

Executive Compensation (page 28)

We strive to create a compensation program for our team members, including our executives, that provides a compelling and engaging opportunity to attract, retain and motivate the best talent. We believe this results in performance-driven leadership that is aligned to achieve our financial and strategic objectives with the intention to deliver superior long-term returns to our stockholders. Our compensation program includes the following key features:

 

We link rewards to performance and foster a team-based approach by setting clear objectives that, if achieved, will contribute to our overall success;

 

We emphasize long-term stockholder value creation by using performance-based restricted stock units, stock options and time-based restricted stock units, in combination with a stock ownership policy, to deliver long-term compensation incentives while minimizing risk-taking behaviors that could negatively affect long-term results;

 

We set Annual Incentive Plan operational and financial performance targets based on the results of our Board’s strategic planning process and corporate budget, and provide payouts that vary significantly from year-to-year based on the achievement of those targets; and

 

We believe the design of our overall compensation program, as well as our internal controls and policies, serve to limit excessive risk-taking behavior, as described further on page 38.

Say-on-Pay: Advisory Vote to Approve the Compensation of our Named Executive Officers (page 58)

We are asking our stockholders to approve on an advisory basis the compensation of our named executive officers. We believe our compensation programs and practices are appropriate and effective in implementing our compensation philosophy, and our focus remains on linking compensation to performance while aligning the interests of management with those of our stockholders. Our Board of Directors has unanimously recommended that stockholders vote FOR the approval of the compensation of our named executive officers on an advisory basis.

Approval of an amendment to the Enovis Corporation 2020 Omnibus Incentive Plan (page 59)

We are asking our stockholders to approve an amendment to the Enovis Corporation 2020 Omnibus Incentive Plan. Our Board of Directors has unanimously recommended that stockholders vote FOR the approval of such plan.

Approval of an amendment to our Certificate of Incorporation (page 69)

We are asking our stockholders to approve an amendment to our Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to reflect new Delaware law provisions regarding officer exculpation. Our Board of Directors has unanimously recommended that stockholders vote FOR the approval of the amendment.

 

    

LOGO  - 2024 Proxy Statement

 

 

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Proxy Statement for Annual Meeting of Stockholders

 

 

2024 Annual Meeting

 

We are furnishing this Proxy Statement (the “Proxy Statement”) in connection with the solicitation by the Board of Directors (the “Board”) of Enovis Corporation (hereinafter, “Enovis,” “we,” “us” and the “Company”) of proxies for use at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Monday, May 20, 2024, at 1:00 p.m. Eastern Time, and at any adjournments or postponements thereof. The Board has made this Proxy Statement and the accompanying Notice of Annual Meeting available on the Internet. We first made these materials available to the Company’s stockholders entitled to vote at the Annual Meeting on or about April [5], 2024.

 

 

About Enovis Corporation

 

Enovis Corporation (NYSE: ENOV) is an innovation-driven medical technology growth company dedicated to developing clinically differentiated solutions that generate measurably better patient outcomes and transform workflows. Powered by a culture of continuous improvement, global talent and innovation, the Company’s extensive range of products, services and integrated technologies fuel active lifestyles in orthopedics and beyond.

Our principal executive office is located at 2711 Centerville Road, Suite 400, Wilmington, DE 19808. Our telephone number is (302) 252-9160 and our website is located at enovis.com.

 

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Proposal 1    Election of Directors

Ten director nominees will be elected at the Annual Meeting, each to serve until the next annual meeting of the Company and until his or her successor is duly elected and qualified. At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following persons to serve as directors for the term beginning at the Annual Meeting on May 20, 2024: Matthew L. Trerotola, Barbara W. Bodem, Liam J. Kelly, Angela S. Lalor, Philip A. Okala, Christine Ortiz, A. Clayton Perfall, Brady Shirley, Rajiv Vinnakota, and Sharon Wienbar. All nominees are currently serving on the Board.

Director Qualifications

 

 

 Nominating Committee Criteria for Board Members

 

The Nominating and Corporate Governance Committee considers, among other things, the following criteria in selecting and reviewing director nominees:

 

personal and professional integrity;

 

skills, business experience and industry knowledge useful to the oversight of the Company based on the perceived needs of the Company and the Board at any given time;

 

the ability and willingness to devote the required amount of time to the Company’s affairs, including attendance at Board and committee meetings;

 

the interest, capacity and willingness to serve the long-term interests of the Company and its stockholders; and

 

the lack of any personal or professional relationships that would adversely affect a candidate’s ability to serve the best interests of the Company and its stockholders.

Pursuant to its charter, the Nominating and Corporate Governance Committee also reviews, among other qualifications, the perspective, broad business judgment and leadership, business creativity and vision, and diversity of potential directors, all in the context of the needs of the Board at that time. We believe that Board membership should reflect diversity in its broadest sense, including persons diverse in geography, gender, and ethnicity, and we seek independent directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions.

The charter of the Nominating and Corporate Governance Committee affirmatively recognizes diversity as one of the criteria for consideration in the selection of director nominees, and in its deliberations and discussions concerning potential director appointments the Nominating and Corporate Governance Committee has paid particular attention to diversity together with all other qualifying attributes. The Nominating and Corporate Governance Committee is committed to actively seeking out highly qualified women and minority director candidates, as well as candidates with diverse backgrounds, experiences and skills, as part of each director search that our Company undertakes. In addition, the Nominating and Corporate Governance Committee annually considers its effectiveness in achieving these objectives as a part of its assessment of the overall composition of the Board and as part of the annual Board evaluation process described further below, which includes a director skills matrix to identify areas of director knowledge and experience that may benefit the Board in the future. That information is used as a part of the director search and nomination process. The Nominating and Corporate Governance Committee looks for candidates with the expertise, skills, knowledge and experience that, when taken together with that of other members of the Board, will lead to a Board that is effective, collegial and responsive to the needs of the Company.

 

 

 Board Member Service

 

The biographies of each of the nominees below contain information regarding the experiences, qualifications, attributes or skills that the Nominating and Corporate Governance Committee and the Board considered in determining that the person should serve as a director of the Company. The Board has been informed that all of the nominees listed below are willing to serve as directors, but if any of them should decline or be unable to act as a director, the individuals named in the proxies may vote for a substitute designated by the Board, or the Board may determine to reduce the size of the Board. The Company has no reason to believe that any nominee will be unable or unwilling to serve.

 

    

LOGO  - 2024 Proxy Statement

 

 

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Nominees for Director

The names of the nominees for director, their ages as of April 5, 2024, principal occupations, employment and other public company board service during at least the last five years, periods of service as a director of the Company, and the experiences, qualifications, attributes and skills of each nominee are set forth below:

 

 

 

Matthew L. Trerotola

 

LOGO

 

Director since 2015 | Age 57

 

Committees: None

 

 

 

Recent Business Experience and Other Career Highlights

 

 Enovis Corporation

 Chief Executive Officer and Chair of the Board of Directors (2023 – present)

 Chief Executive Officer and Director (2015 – 2023)

 

 DuPont

 Executive Vice President and member of Office of the Chief Executive (2013 – 2015)

 

 Danaher Corporation

 Vice President and Group Executive for Life Sciences (2012 – 2013)

 Group Executive, Product Identification (2009 – 2012)

 President, Videojet business (2007 – 2009)

 

 Served as a consultant at McKinsey & Company from 1995-1999, focused primarily on helping clients accelerate growth

  

Other Current Public Directorships

 

 AptarGroup, Inc. (2022 – present)

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Senior leadership experience and global operational expertise

 Deep experience and familiarity with EGX

 Extensive M&A and capital markets experience

 

 

 

Barbara W. Bodem

 

LOGO

 

Director since 2022

 

Independent | Age 56

 

Committees: Audit

 

 

Career Highlights and Recent Business Experience

 

 Dentsply Sirona Inc.

 Interim Chief Financial Officer (April – October 2022)

 

 Hill-Rom Holdings, Inc.

 Senior Vice President and Chief Financial Officer (2018 – 2021)

 

 Mallinckrodt Pharmaceuticals

 

 BiomEdit (private company)

 

 Director (2022 – present)

 

 Northstar Medical Radioisotope (private company)

 Director (2024 – present)

 

 Previously served in senior finance roles for Hospira, Inc. and Eli Lilly & Company

  

Other Current Public Directorships

 

 BioMarin Pharmaceutical, Inc. (2023 – present)

 Option Care Health, Inc. (2024 – present)

 

Other Public Directorships in the Past Five Years

 

 Syneos Health, Inc. (2022 – 2023)

 Turning Point Therapeutics (2021 – 2022)

 Invacare Corporation (2017 – 2018)

 

Specific Qualifications, Experience, Skills and Expertise

 

 Extensive finance, accounting and risk management experience, including as a public company chief financial officer

 Significant medical device and healthcare industry experience

 Board leadership experience as an audit committee member and chair, nom/gov committee member and compensation committee member

 

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Liam J. Kelly

 

LOGO

 

Director since 2020

 

Independent | Age 57

 

Committees: Nominating and

Corporate Governance

 

Career Highlights and Recent Business Experience

 

 Teleflex Incorporated

 Chairman, President and Chief Executive Officer (2020 – present)

 President and Chief Executive Officer (2018 – 2020)

 Served in a variety of senior leadership roles from 2009 to 2017

 

 Hill-Rom Holdings, Inc. (2002 – 2009)

 Served in a number of senior level positions, including Vice President of International Marketing and R&D

  

Other Current Public Directorships

 

 Teleflex Incorporated (2020 – present)

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Extensive experience in the medical device industry, including as a public company chief executive officer

 Significant experience managing international businesses

 Extensive healthcare and medical device M&A experience

 Significant technology, R&D and innovation experience

 

 

 

Angela S. Lalor

 

LOGO

 

Director since 2022

 

Independent | Age 58

 

Committees: Compensation and

Human Capital Management (Chair)

 

Career Highlights and Recent Business Experience

 

 Danaher Corporation

 Advisor (2022 – 2023)

 Senior Vice President, Human Resources (2012 – 2022)

 

 3M Company

 Senior Vice President, Human Resources (2005 – 2012)

 Served in a series of human resources leadership roles of progressive responsibility from 1990 – 2004

  

Other Current Public Directorships

 

 None

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Extensive leadership development, talent strategy and human capital management experience, including experience leading employee engagement and diversity, equity and inclusion initiatives

 Senior leadership experience for two public companies with significant experience and portfolios of healthcare businesses

 Extensive international M&A experience

 

    

LOGO  - 2024 Proxy Statement

 

 

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Philip A. Okala

 

LOGO

 

Director since 2021

 

Independent | Age 55

 

Committees: Audit

 

Career Highlights and Recent Business Experience

 

 Tufts Medicine

 Chief Operating Officer (2023 – present)

 

 City of Hope (a leading cancer research and treatment organization)

 System President (2022 – 2023)

 

 University of Pennsylvania Health System

 Chief Operating Officer (2017 – 2022)

 Senior Vice President for Strategy and Business Development (2013 – 2017)

 Vice President for Service Lines (2007 – 2013)

 

 Previously held management and leadership positions with other healthcare organizations, including Geisinger Health System, Roswell Park Cancer Institute and the University of Texas MD Anderson Cancer Center

 

 Fellow in the American College of Healthcare Executives and The Healthcare Financial Management Association

  

Other Current Public Directorships

 

 None

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Extensive healthcare industry experience, including as a hospital executive leading successful mergers, acquisitions and strategic alliances

 Significant financial and risk management experience in the healthcare industry

 Knowledge and expertise with respect to emerging healthcare technology trends and developments

 

 

 

Dr. Christine Ortiz

 

LOGO

 

Director since 2022

 

Independent | Age 53

 

Committees: Nominating and

Corporate Governance

 

Career Highlights and Recent Business Experience

 

 Massachusetts Institute of Technology

 Professor of Materials Science and Engineering (1999 – present)

 Author of more than 210 research publications, supervisor of the research projects of more than 300 individuals, and recipient of 30 national and international honors, including the Presidential Early Career Award in Science and Engineering awarded by President George W. Bush

 

 Founder, president and chair of the board of directors of Station 1 Laboratory, Inc., an innovative, non-profit, research and development higher educational institution

  

Other Current Public Directorships

 

 Mueller Water Products

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Deep knowledge of cutting-edge developments in biotechnology and biomaterials, computational and engineering design, and advanced manufacturing

 Extensive experience in innovation and entrepreneurship, research and development, executive leadership, marketing and branding

 Relevant public company board experience, including oversight of environmental, social and governance; diversity, equity and inclusion; and corporate social responsibility initiatives

 

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A. Clayton Perfall

 

LOGO

 

Director since 2010

 

Independent | Age 65

 

Committees: Audit (Chair)

 

Career Highlights and Recent Business Experience

 

 Tailwind Capital (2014 – 2022)

 Operating Executive, focused on growing middle market companies in the healthcare, technology, business services and industrial services sectors

 

 Archway Marketing Services, Inc.

 Chairman and Chief Executive Officer (2008 – 2013)

 

 Union Street Acquisition Corp.

 Chief Executive Officer and Director (2006 – 2008)

 

 AHL Services, Inc.

 Chief Executive Officer and Director (2001 – 2008)

 

 Snyder Communications, Inc.

 Chief Financial Officer and Director (1996 – 2000)

 

 Previously served as a partner with an international accounting firm, and as a director of numerous public and private companies

  

Other Current Public Directorships

 

 None

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Significant financial expertise and experience as a public company chief financial officer and audit committee chair

 Extensive executive leadership experience

 M&A and capital markets experience, including extensive international and healthcare M&A experience

 

 

 

Brady R. Shirley

 

LOGO

 

Director since 2022 | Age 58

 

Committees: None

 

Career Highlights and Recent Business Experience

 

 Enovis Corporation

 Executive Advisor (2024 – present)

 President and Chief Operating Officer (2022 – 2024)

 Chief Executive Officer, DJO business (2016 – 2022)

 President, DJO Surgical business (2014 -2016)

 

 National Seating & Mobility (private company)

 Director (2013 – present)

 

 Innovative Medical Device Solutions

 Chief Executive Officer and Director (2009 – 2013)

 

 Stryker Corporation (1992 – 2009)

 Served in several key leadership positions, including President of Stryker Communications and Senior Vice President of Stryker Endoscopy

  

Other Current Public Directorships

 

 None

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Extensive medical device industry experience, with a particular focus in the orthopedic industry

 Senior leadership experience, including as a chief executive officer and chief operating officer of medical device companies

 Deep knowledge of the Company’s products, technology and innovation initiatives

 

    

LOGO  - 2024 Proxy Statement

 

 

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Rajiv Vinnakota

 

LOGO

 

Director since 2008

 

Independent | Age 53

 

Committees: Nominating and

Corporate Governance (Chair);

Compensation and Human

Capital Management

 

 

Career Highlights and Recent Business Experience

 

 Institute for Citizens & Scholars (formerly the Woodrow Wilson National Fellowship Foundation)

 President (2019 – present)

 

 The Aspen Institute

 Executive Vice President (2015 – 2018), leading a division on youth and engagement

 

 The SEED Foundation

 Co-Founder and Chief Executive Officer (1997 – 2015)

 Director (1997 – present); Chair of the Board (1997 – 2005)

 

 Princeton University

 Trustee (2004 – 2007)

 Member, Executive Committee of Board of Directors (2006 – 2007)

 National Chair of Annual Giving (2007-2009)

 The Eugene and Agnes Meyer Foundation

 Director (2016 – 2019)

 

 Previously served as an associate at Mercer Management Consulting

  

Other Current Public Directorships

 

 ESAB Corporation (2022 – present)

 

Other Public Directorships in the Past Five Years

 

 None

 

Specific Qualifications, Experience, Skills and Expertise

 

 Senior leadership experience as a founder, president or chief executive officer of multiple organizations

 Extensive experience with leadership development, employee engagement and human capital management programs

 Familiarity and experience with EGX and the Company’s businesses and processes through Board and committee leadership roles

 

 

 

Sharon Wienbar

 

LOGO

 

Director since 2016

 

Independent | Age 62

 

Committees: Compensation

and Human Capital Management

 

Career Highlights and Recent Business Experience

 

 Scale Venture Partners

 Partner (2001 – 2018); Led venture capital investments in technology companies and served on the boards of numerous public and private portfolio businesses

 

 Hackbright Academy, a leading software engineering training company for women

 Chief Executive Officer (2015 – 2016)

 

 Planned Parenthood Direct (formerly Kaleido Health) (private company), a leading women’s health app

 Director (2016 – present)

 

 Everyday Health, Inc.

 Director (2014 – 2016)

 

 Glu Mobile, Inc.

 Director (2007 – 2008)

 

 Prior to venture capital career, served as an executive at several software companies, including Adobe Systems, and as a consultant at Bain & Company

 

 Served on Microsoft Inc.’s venture advisory committee

  

Other Current Public Directorships

 

 Resideo Technologies, Inc.

 

Other Public Directorships in the Past Five Years

 

 Covetrus, Inc. (2020 – 2022)

 

Specific Qualifications, Experience, Skills and Expertise

 

 Extensive executive leadership experience in the software and technology industries

 Significant M&A experience, with a particular focus on emerging technologies, venture capital investments and strategic partnerships

 Public company board leadership experience, including service as a committee chair

Vote Required

The affirmative vote of the holders of a majority of the votes cast is required for election of each director.

Board Recommendation

 

 

The Board unanimously recommends that stockholders vote FOR the election of each of the nominees for director listed above.

 

 

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CORPORATE GOVERNANCE

Director Independence

Our Corporate Governance Guidelines require that a majority of our Board members be “independent” under the NYSE’s listing standards. In addition, the respective charters of the Audit Committee, Compensation and Human Capital Management Committee and Nominating and Corporate Governance Committee require that each member of these committees be “independent” under the NYSE’s listing standards and, with respect to the Audit Committee, under the applicable heighted independence standards under the SEC rules. In order for a director to qualify as “independent,” our Board must affirmatively determine that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company) that would impair the director’s independence. Our Board undertook its annual review of director independence in February 2024. The Board has determined that Ms. Bodem, Mr. Kelly, Ms. Lalor, Mr. Okala, Dr. Ortiz, Mr. Perfall, Mr. Vinnakota, and Ms. Wienbar each qualify as “independent” under the NYSE’s listing standards.

The independent members of our Board must hold at least two “executive session” meetings each year without the presence of management. In general, the meetings of independent directors are intended to be used as a forum to discuss such topics as they deem necessary or appropriate. If the Chair of the Board is not an independent director, the independent directors select a Lead Independent Director who serves as chairperson for each executive session. Prior to his retirement from Board service in May 2023, Mitchell Rales served as the presiding director of the independent director executive sessions. Upon Mr. Rales’ retirement, Ms. Wienbar was appointed as Lead Independent Director and has since served as chairperson for executive sessions in that capacity.

Board of Directors and its Committees

The Board and its committees meet regularly throughout the year, and may also hold special meetings and act by written consent from time to time. The Board held a total of six meetings during the year ended December 31, 2023. During 2023, each of our directors attended at least seventy-five percent of the aggregate Board meetings and meetings of the committees of the Board on which such directors served (during the periods that he or she served). Our Corporate Governance Guidelines request Board members to make every effort to attend our annual meeting of stockholders. All of our directors attended our annual meeting of stockholders in 2023.

 

    

LOGO  - 2024 Proxy Statement

 

 

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The Board has a standing Audit Committee, Compensation and Human Capital Management Committee (the “CHCM Committee”), and Nominating and Corporate Governance Committee. The charters for the standing committees are available on the Company’s website at www.enovis.com on the Investors page under the Corporate Governance tab. These materials also are available in print to any stockholder upon request to: Corporate Secretary, Enovis Corporation, 2711 Centerville Road, Suite 400, Wilmington, DE 19808. The Board committees review their respective charters on an annual basis. The Nominating and Corporate Governance Committee oversees an annual evaluation of the Board and each committee’s operations and performance, as described in greater detail below.

 

 Name    Audit
Committee
   Nominating and Corporate
Governance Committee
   Compensation and Human Capital
Management Committee

 Matthew L. Trerotola

        

 Barbara W. Bodem

   ü      

 Liam J. Kelly

      ü   

 Angela S. Lalor

         LOGO

 Philip A. Okala

   ü      

 Christine Ortiz

      ü   

 A. Clayton Perfall

   LOGO      

 Brady R. Shirley

        

 Rajiv Vinnakota

      LOGO    ü

 Sharon Wienbar*

             ü

 

LOGO

Chair

ü

Member

*

Lead Independent Director

 

 

Audit Committee

 

Our Audit Committee met ten times during the year ended December 31, 2023. The Audit Committee is responsible, among its other duties and responsibilities, for overseeing our accounting and financial reporting processes, the audits of our financial statements, the qualifications of our independent registered public accounting firm, the performance of our internal audit function and independent registered public accounting firm, and the Company’s policies with respect to risk assessment and risk management related to information technology and cybersecurity. The Audit Committee reviews and assesses the qualitative aspects of our financial reporting, our processes to manage business and financial risks, and our compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The members of our Audit Committee are Mr. Perfall, Chair, Mr. Okala, and Ms. Bodem. The Board has determined that each of Mr. Perfall, Mr. Okala and Ms. Bodem qualifies as an “audit committee financial expert,” as that term is defined under the SEC rules. The Board has determined that each member of our Audit Committee is independent and financially literate under the NYSE’s listing standards and that each member of our Audit Committee is independent under the standards of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

 

Nominating and Corporate Governance Committee

 

Our Nominating and Corporate Governance Committee met five times during the year ended December 31, 2023. The Nominating and Corporate Governance Committee is responsible for recommending candidates for election to the Board. In making its recommendations, the committee will review a candidate’s qualifications and any potential conflicts of interest and assess contributions of current directors in connection with his or her renomination. The committee is also responsible, among its other duties and responsibilities, for making recommendations to the Board or otherwise acting with respect to corporate governance policies and practices, including Board size and membership qualifications, new director orientation, committee structure and membership, related person transactions, and communications with stockholders and other interested parties. The Nominating and Corporate Governance Committee is also responsible for reviewing the Company’s undertakings with respect to environmental, social, and governance matters, including the Company’s role as a corporate citizen and the Company’s policies and programs relating to health, safety and sustainability matters. The members of our Nominating and Corporate Governance Committee are Mr. Vinnakota, Chair, Mr. Kelly and Dr. Ortiz. The Board has determined that each member of our Nominating and Corporate Governance Committee is independent under the NYSE’s listing standards.

 

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Compensation and Human Capital Management Committee

 

Our CHCM Committee met five times during the year ended December 31, 2023. The members of our CHCM Committee are Ms. Lalor, Chair, Ms. Wienbar and Mr. Vinnakota. The Board has determined that each member of our CHCM Committee is a “non-employee director” within the meaning of SEC Rule 16b-3, and is independent under the NYSE’s listing standards for directors and compensation committee members.

The CHCM Committee is responsible, among its other duties and responsibilities, for determining and approving the compensation and benefits of our Chief Executive Officer and other executive officers, monitoring compensation arrangements applicable to our Chief Executive Officer and other executive officers in light of their performance, effectiveness and other relevant considerations and adopting and administering our equity and incentive plans. Specifically, the CHCM Committee annually reviews and approves the corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluates his performance in light of those goals and objectives, and determines his compensation level based on that analysis. The CHCM Committee also annually reviews and approves all elements of the compensation of our other executive officers. Our Chief Executive Officer plays a significant role in developing and assessing achievement against the goals and objectives for other executive officers and makes compensation recommendations to the CHCM Committee based on these evaluations. The CHCM Committee also administers all of the Company’s management incentive compensation plans and equity-based compensation plans. The CHCM Committee makes recommendations to the Board regarding compensation of all executive officer hires, all elements of director compensation, and the adoption of certain amendments to incentive or equity-based compensation plans. The CHCM Committee also assists the Board in its oversight of risk related to the Company’s compensation policies and practices applicable to all Enovis team members. Additionally, the CHCM Committee periodically reviews the Company’s strategies and policies related to human capital management, including with respect to matters such as diversity, inclusion, pay equity, corporate culture, talent development and retention. For further information on our compensation practices, including a description of our processes and procedures for determining compensation, the scope of the CHCM Committee’s authority and management’s role in compensation determinations, please see the Compensation Discussion and Analysis section of this Proxy Statement, which begins on page 27.

Since April 2009, our CHCM Committee has engaged Frederic W. Cook & Co. as its independent compensation consultant to, among other things, formulate an appropriate peer group to be used by the CHCM Committee and to provide competitive comparison data and for other compensation consulting services as requested by the CHCM Committee. Additional information on the nature of the information and services provided by this independent compensation consultant can be found below in the Compensation Discussion and Analysis.

Compensation Committee Interlocks and Insider Participation

No member of the CHCM Committee is or has ever been an officer or an employee of the Company or any of its subsidiaries, and no CHCM Committee member has any interlocking or insider relationship with the Company which is required to be reported under the rules of the SEC.

Identification of Director Candidates and Director Nomination Process

The Nominating and Corporate Governance Committee considers candidates for Board membership suggested by its members and other Board members, as well as by management and stockholders. The Nominating and Corporate Governance Committee may also use outside consultants and third-party search firms to assist in identifying candidates. The Nominating and Corporate Governance Committee is responsible for assessing whether a candidate may qualify as an independent director. Each possible candidate is discussed and evaluated in detail before being recommended to the Board. The Nominating and Corporate Governance Committee utilizes the same criteria for evaluating candidates regardless of the source of the referral.

The Nominating and Corporate Governance Committee recommends, and the Board nominates, candidates to stand for election as directors. Stockholders may nominate persons to be elected as directors and, as noted above, may suggest candidates for consideration by the Nominating and Corporate Governance Committee. If a stockholder wishes to suggest a person to the Nominating and Corporate Governance Committee for consideration as a director candidate, he or she must provide the same information as required of a stockholder who intends to nominate a director pursuant to the procedures contained in Section 3.3 of our Bylaws, in accordance with the same deadlines applicable to director nominations, as described below under “General Matters—Stockholder Proposals and Nominations.”

 

    

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Board Leadership Structure

Our Board’s goal is to achieve the best possible Board leadership structure to facilitate effective oversight and management of our Company. The Board believes that there is no single, generally accepted approach to providing effective Board leadership, and that the leadership structure of the Board may vary from time to time based on the individuals serving on the Board and the specific circumstances facing the Company. To that end, our Corporate Governance Guidelines specify that the Board does not have a formal policy as to whether the positions of Chair of the Board and Chief Executive Officer should be held by separate persons, or whether the Chair should be independent, and that the Board’s policy is instead to adopt the practice that best serves the Company’s needs at any particular time.

Mr. Trerotola, our Chief Executive Officer, has served as Chair of the Board since May 2023 following Mr. Rales’ retirement at our 2023 Annual Meeting. In arriving at its decision to appoint Mr. Trerotola as Chair, the Board noted that Mr. Trerotola is be able to leverage his deep understanding of the Company’s business to elevate the right strategic opportunities and identify key risks and mitigation opportunities for the Board’s review. The Board also determined that, in his role of Chief Executive Officer, Mr. Trerotola is best positioned to effectively communicate Board strategy to the other members of management and to efficiently implement Board directives and priorities.

Following the 2023 Annual Meeting, in accordance with our Corporate Governance Guidelines, Ms. Wienbar was appointed as Lead Independent Director. We believe that the presence of a strong Lead Independent Director ensures robust independent leadership on the Board and enhances the Board’s ability to evaluate management performance and fulfill its oversight role. Our Corporate Governance Guidelines establish a clear mandate and specific responsibilities for the Lead Independent Director, which include, among other things, coordinating the activities of the independent directors, consulting with the Chair to help establish Board meeting schedules and agendas and reviewing those schedules and agendas, calling and presiding over executive sessions of the independent directors, acting as a liaison between the independent directors and the Chair, and coordinating the annual performance evaluation of the Chief Executive Officer together with the CHCM Committee. We believe that Ms. Wienbar’s extensive knowledge of the Company, leadership experience on other public and private company boards, business acumen and deep understanding of growth and innovation drivers make her well suited for the role of Lead Independent Director.

Board Evaluation Process

The Board and its committees conduct self-assessments annually at their February meetings. The Nominating and Corporate Governance Committee oversees the process. The annual evaluation procedure is summarized below.

 

Action and Timeframe

   Description

Preparation – November/December

  

Each director receives draft materials for the annual evaluation of (i) the Board’s performance and (ii) the performance of his or her committee(s). The materials include the Board and committee self-assessment questionnaires. In advance of the assessment, questions are revised and supplemented based on the input received from the Board members and, prior to distribution, the Chair of the Nominating and Corporate Governance Committee leads a final review in the December Board and committee meetings.

Assessment – December/January

  

Each director is asked to consider a list of questions to assist with the evaluation of the Board and its committees, covering topics such as Board composition, the conduct and effectiveness of meetings, quality of discussions, roles and responsibilities, quality and quantity of information provided, and other opportunities for improvement.

Review and Discussion – February

  

The Board and its committees receive a report summarizing the annual evaluations as well as a year-over-year comparison. The reports are distributed for consideration in advance of and discussed at the February Board and committee meetings. The committee chairs report to the Board on their respective committee evaluations, noting any actionable items. Past evaluations have addressed a wide range of topics such as Board materials, Board composition, director education and on-boarding, and allocation of meeting times.

Actionable Items and Follow-Up – Ongoing

  

The Board and committees address any actionable items throughout the year, including a mid-year check-in and end of year assessment against the actionable items identified in February.

 

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Board’s Role in Risk Oversight

 

 

 Full Board

 

The Board maintains responsibility for oversight of risks that may affect the Company. The Board discharges this duty primarily through its standing committees and also considers risk in its strategic planning for the Company and in its consideration of acquisitions. The Board engages in discussions about risk at each quarterly meeting, where it receives reports from its committees, as applicable, about the risk oversight activities within their respective areas of responsibility. In coordination with the Audit Committee, the Board reviews the Company’s enterprise risk management with the Company’s senior leaders, with a focus on those risks that have the highest probability and greatest impact to the Company. In addition, the Company maintains a Compliance Steering Committee, which includes all members of the Company’s executive leadership team, as well as leaders of key functional areas, such as compliance, supply chain and information technology. The Compliance Steering Committee meets on a quarterly basis to review enterprise risks, as well as related mitigation efforts, and management provides regular updates to the Board on significant matters that are discussed at such meetings.

The Audit, Nominating and Corporate Governance and CHCM Committees each make full reports to the Board of Directors at each regularly scheduled meeting regarding each committee’s considerations and actions, and risk considerations are presented to and discussed with the Board by management as part of strategic planning sessions and when considering potential acquisitions. Further details regarding the roles of the Board’s standing committees with respect to risk oversight are set forth below.

 

 

 Audit Committee

 

The Audit Committee (i) receives reports from and discusses with management, our internal audit team, and our independent registered public accounting firm all major risk exposures (whether financial, operating or otherwise), (ii) reviews the Company’s policies with respect to risk assessment and enterprise risk management, including with respect to cybersecurity risks, and (iii) oversees compliance with legal and regulatory requirements and our ethics program, including our Code of Business Conduct.

On an annual basis, management (i) provides the Audit Committee with a comprehensive overview of the Company’s compliance, information security and cybersecurity programs and initiatives and (ii) reviews its assessment of key enterprise risks and focus areas with the Audit Committee, utilizing a “risk radar” approach developed from meetings with key executives, external benchmarking discussions and reviews of industry thought leadership. Such assessment takes into account, among other things, potential impact to financial statements, regulatory and compliance considerations, potential impact to the Company’s brand and reputation, and the Company’s ability to meet customer demands.

Management reports to the Audit Committee on a quarterly basis regarding the Company’s information security and cybersecurity programs, including the Company’s training, processes, controls and procedures in these areas, as well as its efforts to monitor and improve its cybersecurity defenses and response plans. In addition, management provides regular updates to the Audit Committee on compliance and other matters that are raised through the Company’s ethics hotline and other internal channels.

 

 

 Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee oversees the corporate governance principles and governance structures that contribute to successful risk oversight and management. Pursuant to its charter, the Nominating and Corporate Governance Committee has primary oversight responsibility for reviewing the Company’s undertaking with respect to ESG matters, and reviews ESG trends and developments with management as a standing agenda item at each meeting.

 

 

 CHCM Committee

 

The CHCM Committee oversees certain risks associated with compensation policies and practices, as further discussed below under “Compensation Discussion and Analysis—Compensation Program and Risk”. The CHCM Committee also reviews the Company’s strategies and policies related to human capital management, including with respect to matters such as diversity, inclusion, pay equity, corporate culture, talent development and retention. In addition, the CHCM Committee administers and implements the Company’s clawback policies, including the Enovis Corporation Policy for Recovery of Erroneously Awarded Compensation, including interpreting such policies, reviewing and evaluating such policies and recommending updates or modifications to such policies to the Board for consideration.

 

    

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Standards of Conduct

 

 

 Corporate Governance Guidelines and Pledging

 

The Board has adopted Corporate Governance Guidelines, which set forth a framework to assist the Board in the exercise of its responsibilities. The Corporate Governance Guidelines cover, among other things, the composition and certain functions of the Board and its committees, executive sessions, Board responsibilities, expectations for directors, director orientation and continuing education, and our policy prohibiting pledging of Enovis stock.

 

 

Code of Business Conduct

 

As part of our system of corporate governance, the Board has also adopted a Code of Business Conduct (the “Code of Conduct”), that is applicable to all directors, officers and employees of the Company. The Code of Conduct sets forth Company policies, expectations and procedures on a number of topics, including but not limited to conflicts of interest, compliance with laws, rules and regulations (including insider trading laws), honesty and ethical conduct, and quality. The Code of Conduct also sets forth procedures for reporting violations of the Code of Conduct and investigations thereof. If the Board grants any waivers from our Code of Conduct to any of our directors or executive officers, or if we amend our Code of Conduct, we will, if required, disclose these matters through our website within four business days following such waiver or amendment.

 

 

Clawback Policy

 

In September 2023, the CHCM Committee adopted a new clawback policy in compliance with recently enacted SEC rules and NYSE listing standards which applies to our executive officers and mandates the recovery of any erroneously awarded incentive-based compensation in the event that the Company is required to restate its financial results due to material non-compliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. See page 39 for further details on our clawback policy.

 

 

Policies on Insider Trading, Hedging and Stock Ownership

 

The Company has a Policy on Insider Trading and Compliance which, in addition to mandating compliance with insider trading laws, requires prior legal department review and approval of any Rule 10b5-1 trading plans, and prohibits any director, officer or employee of the Company from engaging in short sales, transactions in derivative securities (including put and call options), or other forms of hedging and monetization transactions, such as zero-cost collars, equity swaps, exchange funds and forward sale contracts, that allow the holder to limit or eliminate the risk of a decrease in the value of the Company’s securities. Further, we have stock ownership policies applicable to our directors and executives to promote alignment of interests between our stockholders, directors and management, as described in greater detail further in this Proxy Statement.

 

 

Where to Find Our Key Governance Policies

 

The Corporate Governance Guidelines and Code of Conduct are available on the Company’s website at www.enovis.com on the Investors page under the Corporate Governance tab. These materials also are available in print to any stockholder upon request to: Corporate Secretary, Enovis Corporation, 2711 Centerville Road, Suite 400, Wilmington, DE 19808.

Certain Relationships and Related Person Transactions

 

 

Policies and Procedures for Related Person Transactions

 

We have adopted a written Policy Regarding Related Person Transactions pursuant to which our Nominating and Corporate Governance Committee or a majority of the disinterested members of our Board generally must approve related person transactions in advance. The policy applies to any transaction or series of similar transactions involving more than $120,000 in which the Company is a participant and in which a “related person” has a direct or indirect material interest. “Related persons” include the Company’s directors,

 

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nominees for director, executive officers, and greater than 5% stockholders, as well as the immediate family members of the foregoing. In approving or rejecting the proposed transaction, our Nominating and Corporate Governance Committee takes into account, among other factors it deems appropriate, whether the proposed related person transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the person’s interest in the transaction and, if applicable, the impact on a director’s independence. Under the policy, if we discover related person transactions that have not been approved, the Nominating and Corporate Governance Committee is to be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction.

 

 

Relationships and Transactions

 

Hayden Shirley, an employee of one of the Company’s subsidiaries, is the son of Brady Shirley, a director and former executive officer of the Company. In 2023, Mr. H. Shirley served as a director of sales for the Company’s surgical business, and earned approximately $410,445 in salary and commissions. He was also granted restricted stock unit awards with respect to 754 shares, which vest ratably over a three-year period. His compensation is consistent with the total compensation provided to other employees of the same level with similar responsibilities.

Contacting the Board of Directors

The Board of Directors has established a process for stockholders and interested parties to communicate with the Board. Stockholders and interested parties wishing to communicate with our Board may do so by writing to any of the members of the Board, the Chair of the Board, or the non-management members of the Board as a group, at:

Enovis Corporation

2711 Centerville Road, Suite 400

Wilmington, Delaware 19808

Attn: Corporate Secretary

Our Policy Regarding Stockholder Communications with the Board of Directors (the “Board Communications Policy”) requires that any stockholder communication to members of the Board prominently display the legend “Board Communication” in order to indicate to the Corporate Secretary that it is communication subject to our policy and will be received and processed by the Corporate Secretary’s office. Each communication received by the Corporate Secretary is copied for our files and promptly forwarded to the addressee. In our Board Communications Policy, the Board has requested that certain items not related to the Board’s duties and responsibilities be excluded from forwarded communications, such as mass mailings and business advertisements. In addition, the Corporate Secretary is not required to forward any communication that the Corporate Secretary, in good faith, determines to be frivolous, unduly hostile, threatening, illegal or similarly unsuitable. However, the Corporate Secretary maintains a list of each communication subject to this policy that is not forwarded, and on a quarterly basis delivers the list to the Chair of the Board. In addition, each communication subject to this policy that is not forwarded because it was determined by the Secretary to be frivolous, commercial advertising, irrelevant or similarly unsuitable is nevertheless retained in our files and made available at the request of any member of the Board to whom such communication was addressed.

 

    

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DIRECTOR COMPENSATION

Our Board, at the recommendation of our CHCM Committee, sets the compensation program for non-employee directors. The CHCM Committee reviews this program on an episodic basis and recommends changes as appropriate based on its evaluation of competitive levels for director compensation, utilizing data drawn from our current list of peer companies provided by the Committee’s independent compensation consultant and its reasoned business judgment. See “Role of Compensation Consultants and Peer Data Review” on page 37. The compensation program in effect during fiscal year 2023 was put in place in April 2022 upon the completion of the spin-off of ESAB Corporation into an independent publicly traded company (the “Separation”)) and is reflective of the Company’s shift to a growth-driven innovative medical technology company.

In 2023, non-employee Board members received compensation under the following compensation program:

 

an annual cash retainer of $70,000;

 

an annual equity award valued at $215,000, calculated under the same valuation approach applied in determining our annual equity grants as described in “Compensation Discussion and Analysis—Additional Compensation Information—Equity Grant Practice,” and awarded in connection with our annual meeting of stockholders, which consisted of 50% director restricted stock units that vest after one year of service on the Board and 50% director stock options, which are fully vested upon grant and exercisable for a seven-year term;

 

a $25,000 annual retainer for service as the Audit Committee Chair, a $20,000 annual retainer for service as CHCM Committee Chair, and a $15,000 annual retainer for service as Nominating and Corporate Governance Committee Chair; and

 

in the case of any director who joins the Board following the date of the grant of the annual equity award, a pro-rated portion of the annual equity award.

Mr. Rales, who was our non-executive Chair of the Board until his retirement effective as of the 2023 Annual Meeting, received an annual cash retainer of $1 and did not receive any other cash fees or the annual equity awards described above. Ms. Wienbar was elected by the Board to serve as Lead Independent Director effective upon Mr. Rales’ retirement, and receives an annual cash retainer of $40,000 for service as Lead Independent Director. Such retainer was pro-rated for 2023.

In December 2023, the Board, upon the recommendation of the CHCM Committee, approved certain updates to the non-employee director compensation policy in order to align director compensation with market practices among the Company’s compensation peer group. Effective as of January 1, 2024, the value of annual equity awards awarded to non-employee directors will be $230,000, and for 2024 such awards will be comprised entirely of restricted stock units that vest after one year of service on the Board.

The Board has also approved a stock ownership policy for our non-employee directors. Each non-employee director is required to own shares of our common stock (including shares issuable upon exercise of stock options and shares underlying restricted stock units) with a value equal to five times the annual cash retainer within five years of joining the Board. All of our directors, except for Ms. Bodem and Dr. Ortiz, who were appointed in April 2022 and are in the five-year grace period, have achieved these ownership targets as of the date of this Proxy Statement.

Further, our Board has adopted a policy prohibiting any director (or executive officer) from pledging as security under any obligation any shares of Company stock that he or she directly or indirectly owns and controls, and providing that pledged shares of Company common stock do not count toward our stock ownership requirements.

The Board has adopted a Director Deferred Compensation Plan which permits non-employee directors to receive, at their discretion, deferred stock units (“DSUs”) in lieu of their annual cash retainers and committee chairperson retainers. A director who elects to receive DSUs receives a number of units determined by dividing the cash fees earned during, and deferred for, the quarter by the closing price of our common stock on the date of the grant, which is the last trading day of the quarter. A non-employee director also may convert director restricted stock unit grants to DSUs under the plan. DSUs granted to our directors convert to shares of our common stock after separation from service, based upon a schedule elected by the director in advance. In the event that a director elects to receive DSUs, the director will receive dividend equivalent rights on such DSUs to the extent dividends are issued on our common stock. Dividend equivalents are deemed reinvested in additional DSUs (or fractions thereof) at the dividend payment date.

We also reimburse all directors for travel and other necessary business expenses incurred in the performance of their services on our Board and the committees thereof and extend coverage to them under our directors’ and officers’ indemnity insurance policies.

 

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The following table sets forth information regarding compensation paid to our non-employee directors during 2023:

DIRECTOR COMPENSATION FOR 2023

 

Name(1)

    

Fees Earned or
Paid in Cash
($)


 
    

Stock
Awards
($)


(2) 
    

Option
Awards
($)


(3) 
    
Total
($)

 

Mitchell P. Rales*

     1                      1  

Barbara Bodem

     70,000        106,425        107,509        283,934  

Liam J. Kelly

     70,000        106,425        107,509        283,934  

Angela Lalor

     82,527 (4)       106,425 (5)       107,509        296,461  

Philip Okala

     70,000        106,425        107,509        283,934  

Christine Ortiz

     70,000        106,425        107,509        283,934  

A. Clayton Perfall

     95,000        106,425 (5)       107,509        308,934  

Rajiv Vinnakota

     85,000        106,425        107,509        298,934  

Sharon Wienbar

     102,527        106,425 (5)       107,509        316,461  

 

*

Mr. Rales retired from the Board in May 2023.

 

(1)

Compensation for our employee directors is summarized below in the “Summary Compensation Table.”

 

(2)

Amounts shown in the “Stock Awards” column represent the grant date fair value for stock awards granted to each director during 2023, as computed pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (“FASB ASC Topic 718”). See Note 14 to our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 22, 2024. The amounts reflect the grant date fair value of the 2023 annual grant of 1,875 restricted stock units made to each director in connection with the 2023 annual meeting of stockholders, which vest in full on May 16, 2024.

 

(3)

Amounts shown in the “Option Awards” column represent the grant date fair value for options to purchase 4,167 shares of our common stock. The director stock options are fully vested upon grant and exercisable for a seven-year term.

 

(4)

Ms. Lalor elected to receive DSUs in lieu of her annual cash retainer and committee chair retainer. DSUs convert to shares of our common stock after separation from service, based upon a schedule elected by the director in advance. During 2023, the amount of DSUs received in lieu of annual cash retainer and committee chair retainer by Ms. Lalor was 1,470. DSUs received for these cash retainers are considered “vested” and thus are not reflected in the table below.

 

(5)

Restricted stock units granted to each of these directors, which were awarded in connection with the 2023 annual meeting of stockholders, were converted into DSUs at the election of each director. DSUs convert to shares of our common stock after termination of service on the Board, based upon a schedule selected by each director in advance. These DSUs will vest in full on May 16, 2024 in accordance with the vesting schedule applicable to the underlying restricted stock units.

As of December 31, 2023, the aggregate number of unvested stock awards and unexercised options outstanding held by each of our non-employee directors then serving at the time was as follows:

 

 Name    Restricted
Stock Units
     Stock
Options
 

Barbara Bodem

     1,875        7,631  

Liam J. Kelly

     1,875        12,184  

Angela Lalor

     1,875        7,631  

Philip Okala

     1,875        8,147  

Christine Ortiz

     1,875        7,631  

A. Clayton Perfall

     1,875        20,793  

Rajiv Vinnakota

     1,875        14,211  

Sharon Wienbar

     1,875        20,793  

 

    

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Proposal 2    Ratification of Selection of Independent Registered Public Accounting Firm

We are asking our stockholders to ratify the Audit Committee’s selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent auditors. Ernst & Young LLP has served as our independent auditor since its appointment in 2002. Although stockholder ratification is not required, the appointment of Ernst & Young LLP is being submitted for ratification as a matter of good corporate practice with a view towards soliciting stockholders’ opinions which the Audit Committee will take into consideration in future deliberations. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders. The Board of Directors and the Audit Committee believe that the retention of Ernst & Young LLP as the Company’s independent auditor is in the best interests of the Company and its stockholders.

Representatives for Ernst & Young LLP are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Independent Registered Public Accounting Firm Fees and Services

The following table sets forth the aggregate fees for services rendered by Ernst & Young LLP for the Company for the fiscal years ended December 31, 2023 and 2022:

 

 Fee Category (fees in thousands)    2023      2022  

Audit Fees

   $ 3,997      $ 3,509  

Audit-Related Fees

             

Tax Fees

     302        285  

All Other Fees

             

TOTAL

   $ 4,299      $ 3,794  

This category of the table above includes fees for the fiscal years ended December 31, 2023 and 2022 that were for professional services rendered (including reimbursement for out-of-pocket expenses) for the integrated audits of our annual consolidated financial statements, for reviews of the financial statements included in our Quarterly Reports on Form 10-Q, and for statutory audits.

Audit-Related Fees

This category of the table above includes the fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”

Tax Fees

This category of the table above includes fees billed for tax compliance, tax preparation, tax planning and other tax services. For 2023, Tax Fees included approximately $302,150 for tax compliance and preparation, and for 2022, Tax Fees included approximately $285,000 for tax compliance and tax preparation.

All Other Fees

This category of the table above includes fees billed for products and services other than those described above under Audit Fees, Audit-Related Fees and Tax Fees.

 

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The Audit Committee has considered whether the services rendered by the independent registered public accounting firm with respect to the fees described above are compatible with maintaining the independent registered public accounting firm’s independence and has concluded that such services do not impair its independence.

Audit Committee’s Pre-Approval Policies and Procedures

Pursuant to its charter, the Audit Committee must pre-approve all auditing services, review and attest services, internal control related services and non-audit services provided to the Company by the independent registered public accounting firm and all fees payable by the Company to the independent registered public accounting firm for such services. The Audit Committee also is responsible for overseeing the audit fee negotiations associated with the retention of Ernst & Young LLP for the audit of our financial statements. The Audit Committee has adopted a pre-approval policy to promote compliance with the NYSE’s listing standards and the applicable SEC rules and regulations relating to auditor independence. In accordance with the Audit Committee charter and the pre-approval policy, the Audit Committee reviews with Ernst & Young LLP and management the plan and scope of Ernst & Young LLP’s proposed annual financial audit and quarterly reviews, including the procedures to be utilized and Ernst & Young LLP’s compensation, and pre-approves all auditing services, review and attest services, internal control related services and permitted non-audit services (including the fees and terms thereof) to be performed for us by Ernst & Young LLP. The Audit Committee may delegate pre-approval authority to one or more members of the Audit Committee consistent with the pre-approval policy, provided that the decisions of such Audit Committee member or members must be presented to the full Audit Committee at its next scheduled meeting.

Vote Required

The affirmative vote of the holders of a majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote is required to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2024.

Board Recommendation

 

 

The Board unanimously recommends that stockholders vote “FOR” the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2024.

 

    

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AUDIT COMMITTEE REPORT

The Audit Committee consists of A. Clayton Perfall, Barbara W. Bodem and Philip A. Okala, who are all non-management directors. The members of the Audit Committee meet the independence and financial literacy requirements of the NYSE and the additional, heightened independence criteria applicable to members of the Audit Committee under SEC and NYSE rules. In 2023, the Audit Committee held ten meetings. The Audit Committee operates pursuant to a written charter adopted by the Board of Directors, which it annually reviews. The charter, which complies with all current regulatory requirements, is available on the Company’s website at www.enovis.com on the Investors page under the Corporate Governance tab. During 2023, at each of its regularly scheduled meetings, the Audit Committee met with senior members of the Company’s finance team. Additionally, the Audit Committee has separate private sessions, during its regularly scheduled meetings, with the Company’s independent registered public accounting firm and head of internal audit, respectively. The Audit Committee is updated periodically on management’s process to assess the adequacy of the Company’s system of internal control over financial reporting, the framework used to make the assessment, and management’s conclusions on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has also discussed with the independent registered public accounting firm, their evaluation of the Company’s system of internal control over financial reporting.

The Audit Committee evaluates the performance of the Company’s independent registered public accounting firm each year and determines whether to reengage the current independent registered accounting firm or consider other independent registered accounting firms. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the independent registered accounting firm, the firm’s global capabilities, and the firm’s technical expertise, tenure as the Company’s independent registered accounting firm and knowledge of the Company’s global operations and businesses. In connection with the applicable audit partner rotation requirements, the Audit Committee also is involved in considering the selection of the auditors’ lead engagement partner when rotation is required. Based on this evaluation, the Audit Committee decided to engage Ernst & Young LLP as our independent registered accounting firm for the year ended December 31, 2024. The Audit Committee reviews with the independent registered accounting firm and management the overall audit scope and plans, as well as the results of internal and external audit examinations and evaluations by management and the independent registered accounting firm of the Company’s internal controls over financial reporting and the quality of the Company’s financial reporting. Although the Audit Committee has the sole authority to appoint the independent registered public accounting firm, the Audit Committee recommends that the Board ask stockholders, at the Company’s annual meeting, to ratify the appointment of the independent registered accounting firm (see Proposal 2 beginning on page 24).

The Audit Committee has reviewed and discussed the Company’s audited financial statements for the fiscal year ended December 31, 2023 with management and with the Company’s independent registered public accounting firm, including a discussion of the quality and suitability of the accounting principles, the reasonableness of significant accounting judgments and estimates, and the clarity of disclosures in the financial statements. In addressing the quality of management’s accounting judgments, members of the Audit Committee are apprised of certifications prepared by the Chief Executive Officer and the Chief Financial Officer that the unaudited quarterly and audited annual consolidated financial statements of the Company fairly present, in all material respects, the financial condition, results of operations and cash flows of the Company.

In performing all of these functions, the Audit Committee acts in an oversight capacity. The Audit Committee reviews the Company’s quarterly and annual reports on Form 10-Q and Form 10-K prior to filing with the SEC. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for establishing and maintaining adequate internal control over financial reporting and for preparing the financial statements, and other reports, and of the independent registered public accounting firm, which is engaged to review the quarterly consolidated financial statements of the Company, and audit and report on the annual consolidated financial statements of the Company and the effectiveness of the Company’s internal control over financial reporting as of the Company’s year-end.

The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and SEC. The Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence. On the basis of the reviews and discussions referenced above, the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended December 31, 2023 be included in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

Audit Committee of the Board of Directors

A. Clayton Perfall, Chair

Barbara W. Bodem

Philip A. Okala

 

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COMPENSATION DISCUSSION AND ANALYSIS

The following discussion and analysis of compensation arrangements of our named executive officers for 2023 should be read together with the compensation tables and related disclosures set forth under the section heading “Executive Compensation.”

Executive Summary

 

 

Named Executive Officers

 

The following discussion provides details regarding our executive compensation program and the compensation of our named executive officers in 2023. Our named executive officers (“NEOs”) for 2023 are:

 

 Name    Title

Matthew Trerotola

   Chief Executive Officer

Philip “Ben” Berry

   SVP and Chief Financial Officer

Brady Shirley(1)

   President and Chief Operating Officer

Daniel Pryor

   EVP, Strategy and Business Development

Patricia Lang

   SVP and Chief Human Resources Officer

 

(1)

Effective as of April 1, 2024, Mr. Shirley stepped down from his position as our President and Chief Operating Officer. Mr. Shirley continues to serve as an employee in the role of Executive advisor and remains a member of our Board of Directors.

 

 

Our Compensation Philosophy and Guiding Principles

 

Our executive compensation approach links compensation to Company and individual performance while aligning the long-term interests of management and stockholders. We strive to create a compensation program for our team members, including our executives, that provides a compelling and engaging opportunity to attract, retain and motivate the best talent. We believe that our compensation programs motivate performance-driven leadership that is aligned to achieve our financial and strategic objectives with the intention to deliver superior long-term returns to our stockholders. Utilizing this philosophy, our executive compensation program has been designed to:

 

Link rewards to performance and foster a team-based approach

   Each executive has clear performance expectations and must contribute to our overall success rather than solely to objectives within his or her primary area of responsibility.

Align the performance responsibilities of executives with the long-term interests of stockholders

   Our program emphasizes long-term stockholder value creation by using predominantly stock options and performance-based restricted stock units, in combination with a stock ownership policy, to deliver long-term compensation incentives while minimizing risk-taking behaviors that could negatively affect long-term results.

Provide transparency through simplicity of design and practices

   We provide three main elements in our compensation program–base salary, annual incentive cash bonuses, and long-term incentives–with an appropriate blend of purposes and incentives linked to easily understood objectives, as described further on page 29.

 

    

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Fiscal 2023 Pay for Performance Alignment and Compensation Overview

 

Our leadership team delivered strong results in 2023 and continued to execute on the Company’s long-term goals of revenue growth and margin expansion. We finished fiscal 2023 with adjusted earnings per share of $2.40 and adjusted EBITDA of $269 million. Our Prevention & Recovery and Reconstructive business segments each continued to outgrow their markets, while accelerating their pace of innovation. We also made continued and significant progress on our margin improvement journey, expanding our adjusted EBITDA margin by 70 basis points.

As a result of this strong financial performance, we achieved and exceeded the established targets under our Annual Incentive Plan (“AIP”) for sales and adjusted EBITDA, leading to an overall company performance factor under the AIP of 122% of target for our NEOs.

Further, the CHCM Committee took the following actions during 2023:

 

Limited base salary increases. No base salary increases were provided to the CEO or other NEOs in 2023, with the exception of Mr. Berry, as further described below.

 

Continued focus on long-term performance. Each of our NEOs’ annual equity awards consisted of (i) 50% PRSUs that cliff vest in three years based on relative TSR performance over a three-year performance period and require above-average TSR performance in order to pay out at target, (ii) 25% stock options that vest in equal installments over a three-year period following their grant date, and (iii) 25% RSUs that vest in equal installments over a three-year period following their grant date. See “2021 and 2022 PRSU Determinations” on p. 35 for further details of the CHCM Committee’s determinations with respect to the outstanding PRSU awards in connection with the Separation.

 

 

2023 Say-On-Pay Vote

 

At our 2023 Annual Meeting, approximately 98% of the stockholder votes cast on our advisory proposal to approve the compensation of our NEOs were voted in favor of our executive compensation proposal. Our CHCM Committee considered the outcome of this vote in the context of our prior and ongoing engagement with stockholders and accordingly did not make any additional changes to our executive compensation policies and program elements. Our CHCM Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation. Accordingly, the CHCM Committee did not make any changes to the underlying structure of our executive compensation program in response to the 2023 “say-on-pay” vote, but will continue to review and consider the outcome of future say-on-pay votes when making compensation decisions for our NEOs.

 

 

Our Executive Compensation Program

 

Our executive compensation program includes elements designed to align executive pay with Company objectives and long-term stockholder returns, including the PRSU grants based on relative Total Shareholder Return as discussed above.

For 2023, the CHCM Committee established the following target compensation program for our CEO:

 

2023 CEO Incentive Compensation Structure
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89% of CEO compensation “at risk” and aligned with company and stockholder success

 

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With respect to our other NEOs, for 2023, the CHCM Committee established the following target compensation program:

 

2023 Incentive Compensation Structure for Other NEOs (Average)
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81% of compensation for other NEOs “at risk” and aligned with company and stockholder success

Our 2023 executive compensation structure consists of three core compensation elements: base salary, an annual cash bonus, and long-term incentives. The CHCM Committee reviewed each element individually while also considering the total compensation package provided to create an appropriate mix designed to attract, incentivize, and retain our executives. The following table summarizes the core elements of our 2023 executive compensation program:

 

 Element of Compensation   Purpose/Description   Form/Timing of Payout

 Base Salary

  Fixed compensation set at a competitive level to attract and retain our executive talent. Provides a base level of compensation that is not at risk to avoid fluctuations in compensation that could distract executives from the performance of their responsibilities.   Paid in cash throughout the year.

 Annual Incentive Plan

  Variable compensation that rewards our executive officers for achievement of critical annual operational and financial performance goals by the Company and, if applicable, respective business units, and recognizes the executive’s individual performance during the year.   Paid in cash after the year has ended and performance has been measured. See page 32 for further detail.

 Long-Term Incentive Plan

  Variable compensation that aligns the rewards of executives with the interests of stockholders to encourage actions and long-term prioritization that we believe will increase stockholder value by generating sustained and superior operational and financial performance over an extended period of time.   See page 34 for further detail.

 

    

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Leading Compensation Practices

The framework of our executive compensation program includes the governance features and other specific elements discussed below:

 

What we do     What we don’t do
ü   Pay for performance focus – Our AIP compensation is linked to pre-established financial and operational goals that are intended to drive performance over the annual performance plan period. Options, RSUs and PRSUs are linked with longer-term performance, our stock price, and, for PRSUs, relative TSR performance, which we believe incentivizes long-term Company success and stockholder value creation.     ×   No gross-up payments to cover excise taxes or perquisites – We do not provide tax gross-ups to our executives in connection with severance benefits or executive perquisites other than relocation.
ü   Varying performance metrics under short-term and longer-term incentive plans – In balancing compensation objectives linked to short-term and long-term time horizons, the Company seeks to align compensation with several performance metrics that are critical to achievement of sustained growth and stockholder value creation.     ×   No pledging or hedging of Company stock – We prohibit our executives and directors from hedging Enovis stock and from entering pledge arrangements or derivative agreements using Enovis stock.
ü   Caps on Annual Incentive Plan payouts – Executive bonus payments are capped under our AIP, as approved by our stockholders, in part to discourage excessive risk taking.     ×   No repricing or buyout of underwater stock options – We do not permit the repricing of underwater stock options without the express approval of our stockholders.
ü   Double trigger provisions for change in control payments – Severance payable upon a change in control is only received upon executive’s employment termination without cause or resignation for good reason within two years following, or the three months preceding, the change in control. This approach is commonly referred to as “double trigger.”     ×   No excessive change in control severance – No severance upon a change in control in excess of two times salary and target bonus.
ü   Clawback Policy and Insider Trading Policy – We have a comprehensive compensation clawback policy that applies to all of our executive officers and requires recovery of erroneously awarded incentive-based compensation upon a restatement of the Company’s financial statements to correct material noncompliance with any financial reporting requirement under the securities laws, and we enforce a strict insider trading policy and blackout periods for executives and directors.     ×   No short-term vesting – We do not award any long-term incentives with a standard vesting period shorter than one year.
ü   Stock Ownership Policy – We have a robust stock ownership policy to further align the long-term financial interests of Company executives with those of our stockholders.     ×   No compensation programs or policies that reward for material or excessive risk taking – We annually review the Company’s compensation policies and practices in relation to our risk management practices and any potential risk-taking incentives. Our most recent assessment concluded that the risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
ü   Independent CHCM Committee and Consultant – Our CHCM Committee is comprised solely of independent directors. The compensation consultant to the CHCM Committee during 2023, FW Cook (i) is, based on the CHCM Committee’s assessment, independent and without any conflicts of interest with the Company and (ii) has never provided any services to the Company other than the compensation-related services provided to the CHCM Committee. See page 38 for further details.     ×   No defined benefit pension plan – We do not maintain a defined benefit pension plan for any senior executives.

 

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Determination of Executive Compensation and Performance Criteria

Our executive compensation program is based on the philosophy and design outlined above with a focus on exceptional performance and continuous improvement from our management team. Within this framework, the CHCM Committee exercises its reasoned business judgment in making executive compensation decisions and takes into account recommendations by our Chief Executive Officer with respect to the compensation of each executive officer, other than himself (see “CEO Recommendations” on page 37). Some of the factors that generally are referenced when making executive compensation decisions, none of which is assigned a particular weight, are as follows:

 

The nature of the executive’s position

 

The CHCM Committee’s assessment of pay levels and practices for executives with the skills and experience our executives possess (see “Role of Compensation Consultants and Peer Data Review” on page 37)

 

The experience and performance record of the executive

 

The Company’s operational and financial performance

 

The executive’s leadership potential

 

The retention value of our compensation program over time

Further, a substantial percentage of compensation under our Annual Incentive Plan is determined solely by the achievement of annual performance criteria based on Board-approved financial and operational goals for the fiscal year. These goals are then incorporated into the metrics set for our Annual Incentive Plan and approved by the CHCM Committee, as further discussed under “Bonus Calculation and Payment - Financial and Operational Metrics and 2023 Performance Results” on page 33. We believe that this link to our Board-established corporate and business goals reinforces alignment and incentivizes breakthrough results both at the business-unit level and Company-wide.

Elements of Our 2023 Executive Compensation Program

 

 

Base Salary

 

Base salaries are designed to provide compensation that is market competitive so that we can attract the best qualified individuals and retain our senior management. Base salaries are established at an executive’s hire and generally reviewed annually for potential increases. In February 2023, the CHCM Committee set the salary levels for each of our NEOs based on the CHCM Committee’s assessment of the relative roles and responsibilities of management and the results of their individual performance assessments, combined with perspective from competitive compensation data prepared by FW Cook and the CHCM Committee’s reasoned business judgment. Mr. Berry received a phased increase to his base salary in connection with his promotion to Chief Financial Officer. On January 1, 2023, his base salary was increased to $500,000 and on August 1, 2023, he received a second increase to $575,000. Mr. Berry’s compensation during 2023 is aligned with similarly situated executives in our peer group. A comparison of base salary levels as of December 31, 2023 and 2022 is set forth below:

 

 Named Executive Officer    2022
Annual
Base Salary
     2023
Annual
Base Salary
     Percentage
Increase
 

Mr. Trerotola

   $ 1,077,000      $ 1,077,000         

Mr. Berry(1)

   $ 450,000      $ 575,000        28

Mr. Shirley

   $ 850,000      $ 850,000         

Mr. Pryor

   $ 579,000      $ 579,000         

Ms. Lang

   $ 485,000      $ 485,000         

 

(1)

Mr. Berry was promoted to the position of Chief Financial Officer on January 1, 2023.

 

    

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Annual Incentive Plan

 

The goal of our AIP is to reward our executives for achievement in key areas of Company operational and financial performance as well as each executive’s individual contributions to Company success. Our NEOs are eligible to receive a cash incentive payment that is expressed as a percentage of the executive’s base salary (i.e., “target bonus”) under the AIP. Performance measures include corporate and individual performance against pre-established financial and operational metrics approved by the CHCM Committee at the beginning of the fiscal year.

These performance metrics established by the CHCM Committee for business leaders reflect both Company-wide and business-specific performance targets and result in a company performance factor (“CPF”). The amount payable for each NEO under the AIP can be adjusted upward or downward based on the individual performance factor (“IPF”), which is linked to specific, individualized business goals for each NEO. Actual bonus amounts are determined following completion of the performance year and are based on performance relative to these pre-established business and individual goals using the following formulas:

 

 

LOGO

Executives can achieve a payout percentage of their target bonus ranging from zero for below-threshold performance, 50% for threshold performance, and up to a maximum of 200%, with 100% target goal achievement resulting in 100% payout of the individual’s target bonus for that performance metric, based on the extent to which objective pre-established financial and operational performance goals are achieved.

The total amount earned is subject to adjustment based on individual achievement as measured by an IPF. The IPF is a multiplier that ranges from 0 to 1.5 (subject to an overall payout cap of 250% of the target bonus). The IPF rating is based on individual performance against pre-established objectives and the embodiment of our Company’s core values and behaviors. The IPF and key performance indicators include both financial and non-financial Company objectives over which the executive has primary control.

Detail regarding the individual components of these formulas for fiscal year 2023, including a calculation of the payout percentages and description of the IPF component, follows below.

Key Executive Team Achievements

 

Delivered strong sales growth (9% reported, 8% organic) and expanded adjusted EBITDA margins by 70 basis points

 

Generated double-digit sales growth in the Company’s Reconstructive segment across all channels and geographies, and continued to outpace peers with 5% organic growth in the Prevention & Recovery segment

 

Continued to accelerate growth through M&A, as recent acquisitions achieved double-digit growth and continued to scale

 

Expanded the global reach of the Company’s Reconstructive segment with the transformational acquisition of LimaCorporate S.p.A.

 

Launched numerous innovative new products across all business lines, including the EMPOWRTM revision system for total knee arthroplasty, the ARVIS 2.0TM augmented reality system for surgical navigation guidance, and the Evolve34 TM Lapidus Correction System

 

Improved Company-wide employee engagement score by 2% over the prior year

 

Continued to make progress on the Company’s diversity, equity and inclusion initiatives and expanded programming by two team member affinity groups, our global Women’s Leadership Group and the Black Leadership Group

 

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Continued to build out the Company’s cybersecurity initiatives

 

Advanced the Company’s environmental reporting initiatives, which included the publication of our initial scope 1 and scope 2 GHG emissions baseline

Bonus Calculation and Payment – Financial and Operational Metrics and 2023 Performance Results

For our NEOs, in 2023 we utilized financial targets based on net sales (as adjusted), and adjusted EBITDA for the Company performance factors. Performance targets were based upon Board-approved operational and financial goals for 2023 and represented significant progress in each category toward the achievement of the Company’s long-term growth objectives and aligned with the Board-approved corporate budget.

The financial and operational performance measures and corresponding weightings of these metrics for 2023 were as follows:

 

Measure    Weighting  

Net sales (as adjusted)(1)

         40

Adjusted EBITDA(2)

     60

 

(1)

Net sales performance is measured by comparing (a) the actual US GAAP sales excluding unbudgeted acquisitions versus (b) the target sales adjusted for changes in currency translation exchange rates in order to create a constant currency view. Targets are adjusted for unbudgeted divested and discontinued operations.

(2)

Adjusted EBITDA is a non-GAAP measure and is calculated by adding to US GAAP operating income (a) depreciation and amortization expense; (b) adjustment categories included in the Company’s 2023 budget, including but not limited to restructuring, strategic transaction charges, EU MDR costs, inventory step-up and other non-cash charges relating to acquisitions, equity compensation costs, and unusual litigation costs; and (c) other nonrecurring charges for impairments of goodwill or intangibles, highly inflationary accounting, material tax, regulatory or accounting pronouncement changes, pension curtailment costs, material acquisition deal and integration costs, or material financing-related charges. Adjusted EBITDA performance is measured by comparing (a) the actual adjusted EBITDA, excluding unbudgeted acquisitions versus (b) the target adjusted EBITDA further adjusted for changes in currency translation exchange rates in order to create a constant currency view. Targets are adjusted for unbudgeted divested and discontinued operations.

Bonus Calculation – Target Bonus

The CHCM Committee annually reviews and approves AIP target bonus percentages for each executive officer in alignment with our compensation philosophy and taking into consideration the CHCM Committee’s competitive marketplace review. Targets as a percentage of base salary, which are set forth below, did not change from prior-year targets.

The 2023 corporate performance goals and achievement for each are set forth below. The net sales and adjusted EBITDA goals for 2023 are reflective of the Company’s smaller size following the separation. In setting these performance goals, the CHCM Committee considered the Company’s post-Separation structure as a focused med-tech growth company, and determined that it was appropriate to utilize criteria that were consistent with the Company’s strategic goals of revenue growth and margin expansion. As shown in the table, the weighted average performance result for the 2023 CPF was 122% of plan.

 

Measure    Weighting     Threshold      Target      Maximum      Achieved      CPF
Based on
Weighting
 
Net Sales (as adjusted)      40   $ 1.588 billion      $ 1.654 billion      $ 1.786 billion      $ 1.693 billion        123
Adjusted EBITDA      60   $ 228 million      $ 260 million      $ 325 million      $ 269 million        121
Weighted aggregate CPF for 2023                    122

 

    

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Bonuses for each of our NEOs, as calculated pursuant to the foregoing calculations, are set forth in the following table. These bonuses are also reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below on page 41.

 

 NEO   

Base Salary

($)

             Target Bonus
Percentage
            

Target
Bonus

($)

             CPF     

Bonus
before IPF
application

($)

     Individual
Performance
Factor (IPF)(1)
            

Executive
Bonus
Payment

($)

 

 Mr. Trerotola

     1,077,000        X        125%        =        1,346,250        X        122%        1,642,425        110%        =        1,806,668  

 Mr. Berry

     575,000        X        75%        =        431,250        X        122%        526,125        100%        =        526,125  

 Mr. Shirley

     850,000        X        100%        =        850,000        X        122%        1,037,000        105%        =        1,088,850  

 Mr. Pryor

     579,000        X        80%        =        463,200        X        122%        565,104        110%        =        621,614  

 Ms. Lang

     485,000        X        70%        =        339,500        X        122%        414,190        110%        =        455,609  

 

(1)

Under the Annual Incentive Plan, the IPF can range from 0 – 150%.

Bonus Calculation—Individual Performance Factor

In addition to the target bonus percentages and financial and operational metrics discussed above, the third and final factor under our AIP is the IPF, as described above. The individual performance factors for each executive were determined after evaluating each NEO’s performance, including the key executive team achievements detailed on page 32 above. In 2023, certain non-financial Company objectives were considered in determining the IPFs for our NEOs, including among others, improvements in safety performance, advancement of diversity, equity and inclusion initiatives, employee engagement, development and retention of key leaders, and information security and compliance program enhancements.

 

 

Long-Term Incentives

 

The goal of our long-term incentive plan is to align the compensation of executives with the interests of stockholders by encouraging sustained long-term improvement in operational and financial performance and long-term increase in stockholder value. Long-term incentives also serve as retention instruments and provide equity-building opportunities for executives. Since 2020, annual equity awards have generally consisted of 50% PRSUs, 25% stock options, and 25% time-vesting RSUs. The CHCM Committee believes this further aligns the long-term interests of management and stockholders and promotes increased equity ownership among our executive officers.

Annual Grants under Omnibus Incentive Plan

On February 28, 2023, the CHCM Committee granted annual awards under the 2020 Omnibus Incentive Plan with a target aggregate value as set forth in the table below. Each NEO received 50% of their annual grant in the form of PRSUs, 25% in the form of stock options and 25% in the form of RSUs. Mr. Trerotola’s target aggregate grant value for 2023 reflects an increase of 4.5% over the prior year. In determining such increase, the CHCM Committee reviewed market data based on peer group benchmarking in order to determine a grant level that would be competitive with the market. The CHCM Committee also took into consideration other factors, including that Mr. Trerotola did not receive a base salary increase in 2020, 2021, 2022 or 2023.

In addition to his annual award with an aggregate value of $1,950,000, Mr. Pryor received a one-time retention RSU grant with a target value of $1,500,000 that vests ratably over three years from the date of grant, in recognition of the critical role that Mr. Pryor plays in developing and executing the Company’s M&A strategy, as well as its information technology and cybersecurity initiatives. The retention RSU grant further aligns Mr. Pryor’s incentives with that of our stockholders, is not retirement-eligible, and all unvested retention RSUs will be forfeited if Mr. Pryor’s employment is terminated prior to the final vesting date.

 

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 Annual Grant Recipient   

Total Aggregate
Value of Grant
($)(1)

 Mr. Trerotola

  

7,000,000

 Mr. Berry

  

1,200,000

 Mr. Shirley

  

3,000,000

 Mr. Pryor

  

3,450,000

 Ms. Lang

  

1,000,000

 

(1)

The target dollar values of the equity grants noted above do not reflect the valuations computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). Instead, based on the target dollar value of equity awards and the allocation of the form of equity awards noted above, the actual number of RSUs and the target number of PRSUs granted was determined by dividing the corresponding allocation of the dollar value by the 20-day average of the closing price of our common stock as of the grant date. Additional details on amounts of the 2023 annual equity grants to our NEOs are shown under Grants of Plan-Based Awards for 2023 on page 43.

Stock options and RSUs vest in three equal annual installments beginning on the first anniversary of the grant date and PRSUs cliff vest at the end of the three-year measurement period to the extent of achievement of the relative TSR performance metric (vs. the S&P Healthcare Equipment Index) based on the following payout scale:

 

      3-Year TSR
Percentile Rank*
  

Resulting
Shares Earned
(% of target)

Below Threshold

   <30th   

0%

Threshold

   30th   

50%

Target

   55th   

100%

Maximum

   >80th   

200%

Enovis negative absolute TSR results in max payout at target

       

100%

 

*

Linear interpolation between threshold and target and target and maximum.

As shown in the table above, the target payout is subject to achieving the relative TSR performance metric at the 55th percentile, which underscores the Company’s commitment to delivering and incentivizing above-median performance and returns to stockholders. In the event that the Company’s absolute TSR for the performance period is negative, the maximum payout is capped at target.

 

 

 

Additional Compensation Information

 

Other Elements of Compensation—Non-Qualified Deferred Compensation and Perquisites

The Company does not maintain an active pension plan and instead makes matching contributions to a tax-qualified 401(k) plan and Non-Qualified Deferred Compensation Plan. We established the Non-Qualified Deferred Compensation Plan, which provides participants the opportunity to defer a percentage of their compensation without regard to the compensation limits imposed by the Internal Revenue Code under our 401(k) plan, to allow our senior-level executives to contribute toward retirement on a tax-effective basis in a manner that is consistent with other Enovis employees who are not limited by the Internal Revenue Code limits. For additional details concerning the Non-Qualified Deferred Compensation Plan, please see the Non-Qualified Deferred Compensation Table and the accompanying narrative disclosure. The Company also maintains the DJO Global Executive Deferred Compensation Plan (the “DJO Nonqualified Plan”), which was acquired in connection with the acquisition of DJO. The DJO Nonqualified Plan was frozen to new participants and future deferrals on December 31, 2019. Mr. Shirley holds an account balance in this legacy plan.

Aside from the benefits provided to Mr. Trerotola at the time of his hire, which include (i) an automobile allowance of $20,000 per year and (ii) personal use of a private aircraft chartered by the Company and/or personal financial planning services (or any combination thereof) in an aggregate amount not to exceed $100,000 in compensation income for any calendar year, we provide minimal perquisites to our executives. Such perquisites include (i) up to $10,000 in financial and tax planning services for senior executives and (ii) business-related items such as relocation assistance, which may be grossed up consistent with competitive market recruitment practices.

 

    

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Employment Agreements

Mr. Trerotola is party to an employment agreement with the Company. Mr. Trerotola’s employment agreement has an initial three-year term, subject to automatic one-year term extensions thereafter, unless we or Mr. Trerotola provides written notice in advance to terminate the automatic extension provision. Mr. Trerotola’s base salary may not be reduced below the amount previously in effect. In addition, Mr. Trerotola is entitled to participate in our Annual Incentive Plan with a target bonus amount no less than 120% of his base salary then in effect. Mr. Trerotola’s agreement also provides severance benefits as well as enhanced change in control severance benefits only if a termination for “good reason” or other than for “cause” occurs within two years following the change in control (i.e., “double trigger” provisions).

Mr. Berry’s letter agreement, entered into upon his promotion to the position of Chief Financial Officer, provides that Mr. Berry’s base salary is a specified amount and that he is entitled to annual merit salary increases based on benchmarking and Company merit increase guidelines. In addition, Mr. Berry is entitled to receive an annual bonus as a percentage of his base salary. Mr. Berry’s letter agreement also provides severance and other benefits.

Mr. Shirley is party to a service agreement with DJO, which he entered into prior to our acquisition of the DJO business in 2019 and which was assumed as part of the acquisition. The agreement provides for a four-year initial term, with automatic one-year term extensions commencing November 14, 2020, unless we or Mr. Shirley provides written notice in advance to terminate the automatic extension provision. The agreement provides that Mr. Shirley’s base salary is a specified amount and that he is entitled to such increases as determined by the Board. In addition, Mr. Shirley is entitled to receive an annual bonus of 100% of his base salary. The employment agreement also provides severance benefits, but does not provide enhanced change in control benefits.

Mr. Pryor is party to an employment agreement with the Company. Mr. Pryor’s employment agreement has an initial two-year term, subject to automatic one-year term extensions thereafter, unless our Board or Mr. Pryor provides written notice in advance to terminate the automatic extension provision. Mr. Pryor’s base salary may not be reduced below the amount previously in effect without his written agreement. In addition, Mr. Pryor is entitled to participate in our Annual Incentive Plan with a target bonus amount no less than 50% of his base salary then in effect. Mr. Pryor’s agreement also provides severance benefits.

Ms. Lang’s letter agreement, entered into upon her hire, provides that Ms. Lang’s base salary is a specified amount and that she is entitled to annual merit salary increases based on benchmarking and Company merit increase guidelines. In addition, Ms. Lang is entitled to receive an annual bonus as a percentage of her base salary. Ms. Lang’s letter agreement also provides severance and other benefits.

In addition, during 2022 each of our NEOs other than Mr. Trerotola was party to a change in control agreement with the Company. Mr. Berry entered into a change in control agreement with the Company when he was promoted to the position of Chief Financial Officer. Under the change in control agreements, severance payable upon a change in control is only received upon the executive officer’s termination without cause or resignation for good reason within two years following, or the three months preceding, the change in control. The change in control agreements are designed to retain these executive officers and ensure their continued dedication to the Company notwithstanding a possible change in control.

Additional details regarding the material terms of these agreements are summarized under “Employment Agreements, Change in Control Agreements, Retention Agreements and Executive Officer Severance Plan” on page 46 and “Potential Payments Upon Termination or Change in Control” on page 52 and a summary of the material terms and eligibility requirements for the Executive Officer Severance Plan is provided under “Potential Payments Upon Termination or Change in Control.”

 

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Stock Ownership Policy and Stock Holding Requirements

Our stock ownership policy further aligns the long-term financial interests of Company executives with those of our stockholders while also serving as a risk mitigation tool. Each executive at a vice president level or higher must retain at least one-half of vested equity awards, less shares withheld or sold for tax withholding obligations, until the executive has accumulated shares of our common stock or other qualifying forms of equity having the value described below. The ownership value thresholds are as follows:

 

 Leadership Position    Value of Shares 

 CEO

   6x base salary 

 COO/EVP/SVP

   3x base salary 

 VP

   1x base salary 

All of the Company’s NEOs have achieved these ownership targets as of the date of this Proxy Statement except for Mr. Berry who has 5 years from the date of his promotion to the position of Chief Financial Officer to meet the requirement.

CEO Recommendations

During 2023, Mr. Trerotola provided recommendations to the CHCM Committee with respect to the compensation levels for our executive officers, other than for himself. These recommendations were based on his assessment of the executive officer’s relative experience, overall performance, and impact on the achievement of our financial and operational goals and strategic objectives, combined with perspective from the competitive review data. While the CHCM Committee took these recommendations under advisement, it independently evaluated the pay recommendations for each executive officer and made all final compensation decisions in accordance with its responsibilities as set forth in the CHCM Committee Charter.

Role of Compensation Consultants and Peer Data Review

Our CHCM Committee also obtains perspective from competitive data reviewed by FW Cook, the independent advisor to the CHCM Committee on matters of executive compensation. The CHCM Committee annually reviews the list of peer companies previously recommended by FW Cook to confirm that such peer group represent competitors for talent and business, our growth trajectory, revenue, market capitalization and overall scope and nature of operations. In the fall of 2021, the CHCM Committee, in consultation with FW Cook, reviewed the Company’s peer group in anticipation of the spin-off of ESAB Corporation, and selected a go-forward peer group for the Company to utilize following the completion of the spin-off. The new peer group reflects the Company’s transformation into a focused and growth-driven innovative medical technology company. No changes were made to the peer group in 2023. The peer group is as follows:

 

 2023 Peer Group          

 Bio-Rad Laboratories (BIO)

   Globus Medical (GMED)    ResMed (RMD)

 Bruker (BRKR)

   Haemonetics (HAE)    STERIS plc (STE)

 CONMED (CNMD)

   Hologic (HOLX)    Teleflex (TFX)

 The Cooper Companies, Inc. (COO)

   ICU Medical (ICUI)    Zimmer Biomet Holdings, Inc. (ZBH)

 DENTSPLY SIRONA (XRAY)

   Integra LifeSciences Holdings (IART)   

 Envista Holdings (NVST)

   Masimo (MASI)     

Competitive review data drawn from this group was utilized by the CHCM Committee as one of many reference points to assist in its compensation decisions, and for certain NEOs, competitive review data drawn from this group was used to “benchmark” the amount of compensation paid to such NEOs.

 

    

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Independence of Compensation Consultant

The CHCM Committee considered the independence of FW Cook in light of the SEC rules regarding conflicts of interest involving compensation consultants and NYSE listing standards regarding compensation consultant independence. The CHCM Committee requested and received a letter from FW Cook addressing conflicts of interest and independence, including specific factors enumerated in both relevant SEC rules and NYSE listing standards. The CHCM Committee discussed and considered these factors, and other factors it deemed relevant, and concluded that FW Cook is independent and that its work during 2023 did not raise any conflict of interest.

Compensation Program and Risk

As part of our continued appraisal of our compensation program, management, with oversight from the CHCM Committee, annually reviews our compensation policies and practices and the design of our overall compensation program in relation to our risk management practices and any potential risk-taking incentives. This assessment includes a review of the primary elements of our compensation program in light of potential risks:

Compensation Program Risk Considerations

 

Pay Mix

  

  Compensation program reflects an appropriate mix of short- and long-term incentives, which mitigate the risk of undue focus on short-term targets while rewarding performance in areas that are key to our long-term success.

  Base salaries are set at competitive levels to promote stability and provide a component of compensation that is not at risk.

   

Performance Metrics and Goals

  

  Distinct performance metrics are used in both our short-term (AIP) and long-term incentive plans.

  Our Annual Incentive Plan is designed with a payout scale (including a maximum cap) that supports our pay-for-performance philosophy, as set forth on page 32.

 

Long-Term Incentives

  

  The equity grant portion of our compensation program, combined with our stock ownership guidelines and stock holding requirements, is designed to align the long-term interests of our executives with those of our stockholders.

   

We have controls and other policies in place that serve to limit excessive risk-taking behavior within our compensation program, including, but not limited to, the following:

Compensation Risk Mitigation Components

 

Compliance Risk Mitigation

  

  Oversight of our compensation process and procedures by the CHCM Committee, each member of which has been determined by the Board to be independent under applicable SEC rules and NYSE listing standards;

  Internal controls over our financial reporting, which are maintained by management and reviewed as a part of our internal audit process and further reviewed and tested by our external auditors, as overseen by the Audit Committee; and

  Audit Committee oversight and review of financial results and non-GAAP metrics used in certain components of our AIP and long-term incentives.

   

Personnel Risk Mitigation

  

  Implementation of and training on Company-wide standards of conduct, as described on page 20 under “Standards of Conduct.”

 

Risk Mitigation Policies

  

  Provisions in the Company’s insider trading policy prohibiting hedging transactions that would allow the holder to limit or eliminate the risk of a decrease in the value of the Company’s securities;

  A policy requiring prior legal department review and approval of any Rule 10b5-1 trading plans;

  A policy prohibiting pledging of Company shares; and

  A clawback policy applicable to all executive officers.

   

The CHCM Committee reviews with management the results of its assessment annually. Based on its most recent review, the CHCM Committee concluded that the risks arising from Company compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company.

Additionally, the CHCM Committee also reviews the Company’s strategies and policies related to human capital management, including with respect to matters such as diversity, inclusion, pay equity, corporate culture, talent development and retention.

 

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Hedging Ban

Any director, officer or employee of the Company is prohibited from engaging in short sales, transactions in derivative securities (including put and call options), or other forms of hedging and monetization transactions, such as zero-cost collars, equity swaps, exchange funds and forward sale contracts, that allow the holder to limit or eliminate the risk of a decrease in the value of the Company’s securities.

Pledging Ban

Our Board has adopted a policy that prohibits any director or executive officer from pledging as security under any obligation any shares of Company stock that he or she directly or indirectly owns and controls.

Clawback Policy

Following the SEC’s approval of Section 303A.14 of the NYSE Listed Company Manual, in September of 2023 the CHCM Committee adopted a new, more stringent, clawback policy applicable to our current and former executive officers. Under the policy, in the event the Company is required to restate its financial results due to material non-compliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Company will recover will recover, reasonably promptly, any incentive-based compensation (including any cash or equity-based compensation) that was erroneously awarded to an executive officer during the three years prior to the date that the Company determines such restatement is required. Such recovery is required by the policy regardless of whether the applicable executive officer engaged in misconduct or otherwise caused or contributed to the requirement for the restatement and regardless of whether restated financial statements are filed by the Company. The Company may effect such recovery by requiring executive officers to repay such amount(s) to the Company, by reduction or cancelation of incentive-based compensation, by set-off, to the extent permitted by law, of erroneously awarded compensation against other compensation payable by the Company to the extent permitted by law, or such other means or combination of means as the CHCM Committee determines to be appropriate.

Equity Grant Practice

The CHCM Committee has the authority to grant equity awards. The Company does not time the grant of equity awards around material, non-public information. Through 2023, grant dates were determined either as of the date of CHCM Committee approval or on the date of a specific event, such as the date of hire or promotion, for certain executive officers. In February 2024, the Company updated its annual equity grant practice to provide that annual equity grants will be made approximately ten days following the Company’s release of its full-year financial results. The target grant value is translated into a number of shares underlying each grant using a valuation formula that, for PRSUs and RSUs, incorporates a 20-day average closing price up to and including the grant date, to avoid the potential volatility impact of using a single-day closing price.

The CHCM Committee has delegated authority to our CEO and Chief Human Resources Officer for non-annual grants of equity awards to team members who are non-executive officers. The aggregate grant date value of such equity awards may not exceed the amount authorized by the CHCM committee during the fiscal year period. For 2023, the authorized amount was $3,000,000. Such awards are subject to further restrictions on individual size, and awards must be made pursuant to the terms of award agreement forms previously approved by the Board or the CHCM Committee. The effective grant date of these awards is on the first trading day on or after the date of hire or promotion for newly hired employees following review and approval by the CEO or Chief Human Resources Officer, as applicable. The CHCM Committee receives a report of any grants made pursuant to this delegated authority at each regularly scheduled meeting.

Rule 10b5-1 Trading Plans by Executive Officers

Certain of our executive officers have adopted written stock trading plans in accordance with Rule 10b5-1 under the Exchange Act and our insider trading policy. A Rule 10b5-1 Trading Plan is a written document that pre-establishes the amount (or ratio), prices, and dates (or range of possible dates) of future purchases or sales of our common stock. These plans are entered into during an open window period in accordance with the terms of our insider trading policy. From time to time, certain NEOs have entered into such plans (i) to sell the percentage of vested shares necessary to satisfy applicable tax withholding obligations upon the vesting and delivery of PRSUs and RSUs, or (ii) to exercise options that are approaching the end of their term.

 

    

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COMPENSATION AND HUMAN CAPITAL MANAGEMENT COMMITTEE REPORT

The Compensation and Human Capital Management (CHCM) Committee participated in the preparation of the Compensation Discussion and Analysis, reviewing successive drafts and discussing the drafts with management. Based on its review and discussions with management, the CHCM Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s 2024 Proxy Statement and in the Company’s Annual Report on Form 10-K for 2023 by reference to the Proxy Statement.

 

Compensation and Human Capital Management Committee of the Board of Directors
Angela S. Lalor, Chair
Rajiv Vinnakota
Sharon Wienbar

 

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EXECUTIVE COMPENSATION

Summary Compensation Table

 

Name and Principal Position   Year     Salary
($)
    Bonus
($)(1)
    Stock
Awards
($)(2)
    Option
Awards
($)(3)
    Non-Equity
Incentive Plan
Compensation
($)(4)
    Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
    All Other
Compen-
sation
($)(5)
    Total
($)
 

Matthew Trerotola

    2023       1,077,000             5,678,701       1,750,010       1,806,668              462,256       10,774,635  

Chief Executive Officer

    2022       1,077,000       2,423,250       5,402,485       1,674,597       1,080,366              538,982       12,196,680  
    2021       1,077,000             8,807,050       1,549,997       1,724,547              675,152       13,833,746  

 Philip “Ben” Berry(6)

    2023       531,443             973,502       299,993       526,125              26,641       2,357,704  

 Chief Financial Officer

                 
                                                                         

 Brady Shirley

    2023       850,000             2,433,756       750,008       1,088,850              81,177       5,203,791  

 President and Chief Operating Officer

    2022       850,000       1,700,000       2,406,878       749,816       733,125              55,389       6,495,208  
    2021       850,000             3,409,195       600,007       816,000              17,807       5,693,009  

 Daniel Pryor

    2023       579,000             2,975,748       487,488       621,614              89,119       4,752,969  

 Executive Vice President, Strategy

 and Business Development

    2022       579,000       1,042,200       1,580,192       487,382       364,770              91,392       4,144,936  
    2021       575,608             2,627,914       462,506       621,615              71,739       4,359,382  

 Patricia Lang(6)

    2023       485,000             811,247       249,994       455,609              70,979       2,072,829  

 Senior Vice President and

 Chief Human Resources Officer

    2022       476,385       765,000       797,796       249,912       280,088              68,993       2,638,124  
                                                                       

 

(1)

Amounts set forth in this column for 2022 reflect the cash payments made to each NEO pursuant to retention agreements entered into on March 5, 2021 related to the Separation.

 

(2)

Unless otherwise indicated below, amounts represent the aggregate grant date fair value of grants made to each NEO, as computed in accordance with FASB ASC Topic 718. See Note 14 to our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 22, 2024. See “Long-Term Incentives” above on page 34. Assuming the maximum achievement of the performance goals applicable to the PRSUs, the grant date value of the PRSUs granted to the NEOs in 2023 would have been $6,504,491, $1,115,062, $2,787,656, $1,811,919 and $929,180 for Messrs. Trerotola, Berry, Shirley, Pryor, and Ms. Lang, respectively. For 2021, for each of Messrs. Trerotola, Pryor, and Shirley, in addition to such NEO’s annual grant under the 2020 Omnibus Incentive Plan, amounts include the grant date fair value of the retention RSU grants made to such NEOs under their respective Retention Agreements. See “RSU Grants Pursuant to Retention Agreements” on page 35 of the Company’s 2022 Proxy Statement as filed with the SEC on April 28, 2022 for further details.

 

At the time of the Separation, the CHCM Committee certified the performance results of the Company’s PRSU awards granted in 2020, 2021 and 2022, as the performance metrics of these awards would no longer have been appropriate measurements of performance following the Separation. Accordingly, the CHCM Committee certified the performance of the 2020 PRSU awards based on the Company’s relative TSR performance through December 31, 2021. At such date, two-thirds of the performance period was completed and the Company’s performance reflected a relative TSR ranking in the 40th percentile of the Index, which resulted in a payout at 70% of target. The CHCM Committee also certified the performance of the 2021 and 2022 PRSU awards to be paid at target when they vest. The certified PRSUs remain subject to continued employment of the executive during the vesting period. In arriving at such decisions, the CHCM Committee considered that the PRSUs were to be earned based on relative total shareholder return compared to the S&P MidCap 400 Industrials Index, and that following the Separation such metric would no longer be relevant since the Company would be changing from an industrial GICS code to one in the medical device industry and would also have a new set of peers. With respect to the 2021 and 2022 PRSU awards, the CHCM also considered that such awards were less than halfway through the performance period at the time of the Separation. For such modified PRSU awards, the amounts reported in the table above for 2022 include the incremental fair value of the modified awards, computed as of the date of modification in accordance with ASC Topic 718. See “2020, 2021 and 2022 PRSU Performance Determinations” on page 35 of the Company’s 2023 Proxy Statement as filed with the SEC on March 31, 2023 and “Outstanding Equity Awards at Fiscal-Year End” on page 44 for further details.

 

      Incremental
Value
 

Matthew L. Trerotola

  

2020 PRSU award

     $258,120  

2021 PRSU award

     61,883  

2022 PRSU award

     175,070  
       $495,073  

Brady Shirley

  

2020 PRSU award

     $107,249  

2021 PRSU award

     23,952  

2022 PRSU award

     78,385  
       $209,586  

 

    

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      Incremental
Value
 

Daniel Pryor

  

2020 PRSU award

    $  82,706  

2021 PRSU award

     18,421  

2022 PRSU award

     50,904  
      $  152,031  

Patricia Lang

  

2020 PRSU award

     31,283  

2021 PRSU award

     7,964  

2022 PRSU award

     26,089  
      $  65,336  

 

(3)

Amounts represent the aggregate grant date fair value of grants made to each NEO, as computed in accordance with FASB ASC Topic 718. See Note 14 to our consolidated financial statements for the year ended December 31, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 22, 2024. For 2023 grants, options were valued by the Black Scholes-based option value based on the closing price of our common stock on the date of grant. The exercise price for stock option awards equals the closing price of our common stock on the date of grant. See “Long-Term Incentives” above on page 34.

 

(4)

Amounts represent the payouts earned pursuant to our Annual Incentive Plan. For a discussion of the performance metrics on which the 2023 Annual Incentive Plan was based, including the weighting for each performance metric and the actual percentage achievement of the financial performance targets, see “Annual Incentive Plan” above on page 32.

 

(5)

Amounts set forth in this column for 2023 consist of the following:

 

Name   Company
401(k)/Deferred
Compensation
Plan
Match and
Contribution
($)(a)
    Auto
Allowance
($)(b)
    Financial
Services
($)(c)
    Aircraft
Usage
($)(d)
    Supplemental
Long-Term
Disability
Premiums
($)(e)
    Group
Term Life
Insurance
($)(f)
    Executive
Physical
($)(g)
    Total
($)
 

Mr. Trerotola

    129,442       20,000       15,250       282,344       6,472       8,748             462,256  

Mr. Berry

    13,200                         4,693       8,748             26,641  

Mr. Shirley

    63,325                         9,104       8,748             81,177  

Mr. Pryor

    56,626             10,000             6,248       8,748       7,497       89,119  

Ms. Lang

    45,411             10,000             7,077       8,491             70,979  

 

(a)

Amounts represent the aggregate Company match and Company contribution made by the Company during 2023 to such NEO’s 401(k) plan account and Non-Qualified Deferred Compensation Plan account. See the Nonqualified Deferred Compensation table and accompanying narrative for additional information on the Non-Qualified Deferred Compensation Plan.

 

(b)

For Mr. Trerotola, amount represents an annual cash allowance for car-related expenses pursuant to his employment contract.

 

(c)

Amount represents amounts for financial planning services as reimbursed by the Company during 2023.

 

(d)

Amount represents Company expenses incurred for private plane usage in 2023. The Company is billed directly for the charter flight services used for Mr. Trerotola’s personal travel. The imputed income to Mr. Trerotola for these flights as calculated under the tax rules was $27,414, based on the SIFL rates promulgated by the Internal Revenue Service. The Company does not gross-up or make whole Mr. Trerotola for the income imputed to his personal use of chartered flights.

 

(e)

Amount represents premiums for supplemental long-term disability insurance.

 

(f)

Amount represents premiums for a life insurance benefit equal to 1.5 times salary, capped at $1,125,000.

 

(g)

Amount represents reimbursement for physical examinations.

 

(6)

Ms. Lang became an NEO in fiscal year 2022 and Mr. Berry became an NEO in fiscal year 2023.

 

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Grants of Plan-Based Awards for 2023

The following table sets forth information with respect to grants of plan-based awards to our named executive officers during 2023.

 

              Estimated
Possible Payouts Under
Non-Equity Incentive
Plan Awards(1)
    Estimated
Future Payouts
Under Equity Incentive
Plan Awards(2)
   

All Other
Stock
Awards:
Number of
shares of
stock

or units
(#)(3)

 

   

All Other
Option
Awards:
Number of
Securities
Underlying

Options
(#)(4)

 

   

Exercise
or Base
Price of
Option

Awards
($/Sh)

 

   

Grant
Date
Fair Value
of Stock
and

Option
Awards ($)(5)

 

 
 Name   Award Type   Grant Date    

Threshold

($)

   

Target

($)

   

Maximum

($)

   

Threshold

(#)

   

Target

(#)

   

Maximum

(#)

 
 Matthew L. Trerotola   Annual Incentive Plan           673,125       1,346,250       3,365,625                                            
  PRSUs     2/28/2023                         28,222       56,443       112,886                         4,052,607  
  RSUs     2/28/2023                                           28,221                   1,626,094  
  Stock Options     2/28/2023                                                 66,922       57.62       1,750,010  
 Philip “Ben” Berry   Annual Incentive Plan       215,625       431,250       1,078,125                                            
  PRSUs     2/28/2023                         4,838       9,676       19,352                         694,737  
  RSUs     2/28/2023                                           4,838                   278,766  
  Stock Options     2/28/2023                                                 11,472       57.62       299,993  
 Brady Shirley   Annual Incentive Plan           425,000       850,000       2,125,000                                            
  PRSUs     2/28/2023                         12,095       24,190       48,380                         1,736,842  
  RSUs     2/28/2023                                           12,095                   696,914  
    Stock Options     2/28/2023                                                 28,681       57.62       750,008  
 Daniel Pryor   Annual Incentive Plan           231,600       463,200       1,158,000                                            
    PRSUs     2/28/2023                         7,862       15,723       31,446                         1,128,911  
  RSUs     2/28/2023                                           7,862                   453,008  
  RSUs     2/28/2023                                           24,190                   1,393,828  
  Stock Options     2/28/2023                                                 18,642       57.62       487,488  
 Patricia Lang   Annual Incentive Plan           169,750       339,500       848,750                                            
  PRSUs     2/28/2023                         4,032       8,063       16,126                         578,923  
  RSUs     2/28/2023                                           4,032                   232,324  
  Stock Options     2/28/2023                                                               9,560       57.62       249,994  

 

(1)

Amounts represent potential payouts under our Annual Incentive Plan. Threshold estimated possible payouts incorporate a 0.5 IPF, target estimated possible payouts incorporate a 1.0 IPF and maximum estimated possible payouts incorporate the 250% maximum payout cap under the Annual Incentive Plan. For a discussion of the performance metrics and actual results and payouts under the plan for fiscal 2023 see the Compensation Discussion and Analysis and the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above, respectively.

 

(2)

Amounts represent potential shares Issuable under performance-based restricted stock unit awards. The PRSUs may be earned at the end of the performance period upon certification by the CHCM Committee of the performance level that has been met. The PRSUs cliff vest at the end of the three-year performance period, if earned.

 

(3)

Amounts represent annual awards of restricted stock units. A retention RSU was awarded to Mr. Pryor in 2023 in addition to his annual award. The RSUs vest in three equal annual installments beginning on the first anniversary of the grant date.

 

(4)

Amounts represent stock option awards that vest ratably over three years, beginning on the first anniversary of the grant date, based on continued service.

 

(5)

Unless otherwise indicated below, the amounts shown in this column represent the full grant date fair value of grants made to each NEO, as computed in accordance with FASB ASC Topic 718. PRSUs are valued based upon the probable outcome of the performance conditions associated with these awards as of the grant date and such calculation is consistent with the estimate of aggregate compensation cost recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.

 

    

LOGO  - 2024 Proxy Statement

 

 

43


Table of Contents

Outstanding Equity Awards at 2023 Fiscal Year-End

The following table shows, as of December 31, 2023, the number of outstanding stock options, performance-based restricted stock unit awards and restricted stock unit awards held by the named executive officers.

 

<
    Option Awards   Stock Awards
 Name   Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
  Option
Exercise
Price
($)
  Option
Expiration
Date(1)
  Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(2)
  Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)(3)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(4)
  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(5)

 Matthew L. Trerotola

      182,572             45.69       2/24/2026                        
      70,246             64.03       2/23/2027                        
      37,453       18,726       76.34       2/21/2028                        
      20,906       41,813       70.88       2/16/2029                        
          66,922       57.62       2/27/2030                        
                            158,773       8,894,463            
                                            56,443       4,257,495

 Philip “Ben” Berry

      10,859             33.48       3/16/2027                        
      2,983       1,493       76.34       2/21/2028                        
            11,472       57.62       2/27/2030                        
                      12,988       727,588        
                                                                    9,676       729,861

 Brady Shirley

      33,499             45.69       2/24/2026                        
      14,498       7,249       76.34       2/21/2028                        
      9,361       18,722       70.88       2/16/2029                        
            28,681       57.62       2/27/2030                        
                      66,463       3,723,257        
                                                24,190       1,824,652

 Daniel A. Pryor

      43,363             68.79       2/12/2024                        
      106,670             56.79       3/7/2025                        
      61,974             45.69       2/24/2026                        
      22,503             64.03       2/23/2027                        
      11,175       5,588       76.34       2/21/2028                        
      6,084       12,170       70.88       2/16/2029