jbt_Current_Folio_DEF14A

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

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 14a‑12

JOHN BEAN TECHNOLOGIES  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 computed on table below per Exchange Act Rules 14a‑6(i)(1) and 0‑11.

 

 

 

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0‑11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

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(5)

Total fee paid:

 

 

Fee paid previously with preliminary materials.

 

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0‑11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

 

 

(1)

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(3)

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(4)

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Table of Contents

LOGO

March 28, 2019

Dear Shareholder:

It is my pleasure to invite you to attend the 2019 Annual Meeting of Stockholders of John Bean Technologies Corporation.

 

 

 


2nd Floor Conference Center,
Chicago, Illinois

 

 

 

  For Re-Election Of Each Of The Nominees For Director,

  For Non-Binding Resolution Regarding Named Executive Officer Compensation

  For Ratification Of The Appointment Of Our Auditor

 

When:

Friday, May 10, 2019

Time: 9:30 a.m. CT

Where:

70 West Madison Street,
2nd Floor Conference Center
Chicago, Illinois 60602

Who:

Stockholders as of March 14, 2019

Voting Recommendations:

For Re-Election Of Each Of The Nominees For Director; Alan D. Feldman and James E. Goodwin

For Non-Binding Resolution Regarding Named Executive Officer Compensation

For Ratification Of The Appointment Of Our Auditor

Please refer to the accompanying Proxy Statement for additional information about the matters to be considered at the meeting.

The Proxy Statement includes a description of our executive compensation program, which is designed to provide competitive, performance-based compensation that places a significant portion of our named executive officers’ compensation at risk. Our named executive officers’ at-risk compensation depends on our achievement of pre-approved performance measures designed to ensure we provide long-term value to our stockholders. As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, our proxy requests an advisory vote from stockholders on our named executive officers’ compensation, which we request annually in accordance with our previous advisory vote of our stockholders and the direction of our Board of Directors.

 

 

 

If your shares are held by a bank, broker or other intermediary and you plan to attend the Annual Meeting of Stockholders, please send written notification to our Corporate Secretary, 70 West Madison Street, Suite 4400, Chicago, Illinois 60602, and enclose evidence of your ownership (such as a letter from the bank, broker or intermediary confirming your ownership or a bank or brokerage firm account statement). The names of all those indicating they plan to attend the Annual Meeting of Stockholders will be placed on an admission list held at the registration desk for the meeting.

      

Your vote is important. To be sure that your vote counts and to assure a quorum, please submit your vote promptly whether or not you plan to attend the meeting. You can revoke a proxy prior to its exercise at the meeting by following the instructions in the accompanying Proxy Statement.

 

 

 

 

 

 

 

LOGO

Sincerely,

Picture 19

 

Thomas W. Giacomini

Chairman of the Board

 

 

 

 

 


 

Table of Contents

 

 

 

LOGO

NOTICE OF THE 2019 ANNUAL MEETING OF STOCKHOLDERS

Friday, May 10, 2019

Time: 9:30 a.m., Central Time

Location: 70 West Madison Street, 2nd Floor Conference Center, Chicago, IL 60602

Items of Business

 

1.  Re-elect two directors, Alan D. Feldman and James E. Goodwin, each for a term of three years;

 

2.  Approve on an advisory basis a non-binding resolution regarding the compensation of our named executive officers as described in the Proxy Statement for the 2019 Annual Meeting; 

 

3.  Ratify the appointment of KPMG LLP as our independent registered public accounting firm for 2019; and

 

4.  Vote on any other business properly brought before the meeting or any postponement or adjournment thereof.

 

How to Vote

 

 

 

 

 

 

 

 

 

    

 

    

 

    

 

Picture 41

 

Internet
Visit the website noted on your proxy card to vote online.

 

Picture 40

 

Phone
Use the toll-free telephone number noted on your proxy card to vote by telephone.

 

Picture 39 

 

Mail 
Sign, date and return your proxy card in the postage pre-paid envelope provided to vote by mail.

 

Picture 10

 

In Person

Cast your vote in person at the Annual Meeting.

 

Stockholders may help us reduce printing and mailing costs and conserve resources by opting to receive future proxy materials by e-mail. Information about how to do this is included in the accompanying Proxy Statement.

 

 

 

By Order of the Board of Directors

 

LOGO

 

James L. Marvin

 

Executive Vice President, General Counsel

 

 

 

 

 

 

 


 

Table of Contents

2019 PROXY STATEMENT SUMMARY

This summary highlights selected information contained in this proxy statement. Please read the entire proxy statement carefully before voting your shares. On March 28, 2019, we began to mail to our stockholders of record as of the close of business on March 14, 2019, either a notice containing instructions on how to access this Proxy Statement and our Annual Report through the Internet or a printed copy of these proxy materials.  This summary highlights information contained in the Proxy Statement.  This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2018 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposal   1

Election of two Directors

 

 

Board Recommendation

FOR all nominees

See

Pages 1-16

 

 

 

 

 

 

 

Alan D. Feldman

INDEPENDENT DIRECTOR

 

 

 

 

James E. Goodwin

LEAD INDEPENDENT DIRECTOR

Picture 1

 

 

 

 

Picture 14

From 2003 to 2012, President and Chief Executive Officer and from 2006 to 2012, Chairman of Midas, Inc. (an international automotive services company). Mr. Feldman previously served in various senior management positions within the fast-food, quick service and snack food industries.

 

 

 

 

From 1999 to 2001, Chairman and Chief Executive Officer of UAL Corporation (an international air transportation company). Before that, Mr. Goodwin served in various senior management positions during a 34 year career in the airline industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposal   2

Advisory Vote on Named Executive Officer Compensation

 

 

Board Recommendation

FOR

See

Pages 17-51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proposal   3

Ratification of Appointment of Independent Registered Public Accounting Firm

 

 

Board Recommendation

FOR

See

Pages 52-53

 

 

 

 

2019 Proxy Statement   

i

 


 

Table of Contents

DIRECTOR NOMINEES

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Age

 

Director
Since

 

Independent

 

Audit
Committee

 

Compensation
Committee

 

Corporate
Governance
Committee

Alan D. Feldman

 

67

 

2008

 

Yes

 

Picture 27

 

 

 

Picture 24

James E. Goodwin

 

74

 

2008

 

Yes

 

Picture 26

 

 

 

Picture 25


Picture 31   Chairperson

Picture 2   Member

BOARD AND CORPORATE GOVERNANCE HIGHLIGHTS

Our Board of Directors believes that the purpose of corporate governance is to ensure that we maximize stockholder value in a manner that is consistent with both the legal requirements applicable to us and a business model that requires our employees to conduct business with the highest standards of integrity.  The Board has adopted and adheres to corporate governance principles which the Board and senior management believe promote this purpose, are sound and represent best practices.

Corporate Governance Practices

 

 

 

 

 

 

 

Number of directors

7

 

Majority voting in uncontested director elections

  Yes

 

Director orientation and continuing education programs

  Yes

 

Annual stockholder approval of executive compensation

  Yes

Number of independent directors

6

 

Stock ownership and retention guidelines

  Yes

 

All audit committee members are “audit committee financial experts”

  Yes

 

Stockholder engagement program

  Yes

Number of Female Directors

2

 

Annual stock grant to non-employee directors

  Yes

 

Code of business ethics and conduct

  Yes

 

No poison pill   NEW

  Yes

Average tenure of directors

11 years

 

Executive sessions of Independent directors

  Yes

 

Ethics hotline policy

  Yes

 

Board succession planning and skills matrix

  Yes

Director retirement age

75 prior to election date

 

Independent compensation consultant

  Yes

 

Lead independent director

  Yes

 

Separation of Chairman and CEO Roles

 No

JBT OVERVIEW

JBT Corporation is a leading global technology solutions provider to high-value segments of the food and beverage industry with a focus on proteins, liquid foods and automated system solutions. JBT designs, produces and services sophisticated products and systems for multi-national and regional customers through its FoodTech segment. JBT also sells critical equipment and services to domestic and international air transportation customers through its AeroTech segment. JBT Corporation employs approximately 5,900 people worldwide and operates sales, service, manufacturing and sourcing operations in more than 25 countries.

 

 

 

ii

   2019 Proxy Statement

 


 

Table of Contents

2018 PERFORMANCE HIGHLIGHTS

Selected Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in millions except per share data) For the year ended December 31, 2018

   

2018

   

2017

   

2016

   

2015

   

2014

Total revenue

 

$

1,919.7

 

$

1,635.1

 

$

1,350.5

 

$

1,107.3

 

$

984.2

Operating income

 

$

143.8

 

$

143.8

 

$

101.0

 

$

88.4

 

$

51.3

Net income

 

$

104.1

 

$

80.5

 

$

67.6

 

$

55.9

 

$

30.8

Diluted earnings per share from continuing operations

 

$

3.24

 

$

2.58

 

$

2.28

 

$

1.88

 

$

1.03

Total assets

 

$

1,442.5

 

$

1,391.4

 

$

1,187.4

 

$

876.1

 

$

697.8

Long-term debt, less current portion

 

$

387.1

 

$

372.7

 

$

491.6

 

$

280.6

 

$

173.8

EXECUTIVE COMPENSATION HIGHLIGHTS

Pay-for-Performance Alignment for Executive Officers

·

Strong emphasis on results: 75% of annual cash bonus opportunity and 60% of the value of long term incentives are tied to our key business metrics.

·

Financial targets require continued performance improvements: our targets for annual cash bonuses required continued significant additional year-over-year growth in EBITDA, improvement in EBIT margin and reductions in AOWC; our targets for long term incentive performance shares require cumulative three-year growth in EPS while sustaining a high level of ROIC.

·

Balance division performance targets and full company performance targets: for named executive officers with division management roles, performance targets for annual cash bonus awards were weighted 70% – 85% on business/division performance and 15 – 30% on corporate performance in order to appropriately balance the objectives established for the divisions while providing meaningful incentives for contributions to the success of overall corporate performance.

Competitive Pay Opportunities

·

We provide competitive pay opportunities consistent with target benchmark levels, with appropriate differences based on individual experience, impact and performance.

·

Our mix of total target compensation — base pay, annual cash incentive, and long-term incentives in the form of time and performance-based RSUs — is also generally consistent with target benchmark levels.

Target Compensation of our CEO

 

 

 

 

 

 

 

 

 

62%

 

 

20%

 

Performance-Based

18%

 

Performance-Based

 

and Time-Based

Base Salary

 

Annual Cash Bonus

 

Equity Awards

 

 

 

 

 

 

 

 

 

 

Target Compensation of our Other Named Executive Officers

 

 

 

 

 

 

 

 

 

42%

36%

 

 

 

Performance-Based

Base Salary

 

22%

 

and Time-Based

 

 

Performance-Based

 

Equity Awards

 

 

Annual Cash Bonus

 

 

 

 

 

 

 

 

 

 

 

2019 Proxy Statement   

iii

 


 

Table of Contents

Executive Compensation Best Practices

 

 

 

 

 

Annual say-on-pay stockholder vote

Competitive compensation opportunities against an appropriate compensation committee-approved peer group

Non-guaranteed performance-based annual cash bonuses

Challenging performance targets under our annual cash bonus plan and long-term stock-based compensation plan

Significant emphasis on performance-based stock-based compensation

Multi-year vesting periods for stock awards

“Double trigger” change-in-control provisions in executive agreements

No tax gross-ups in any executive agreement

No repricing of stock options without stockholder approval

Maximum caps on annual cash bonus and performance share payouts

No dividends paid on performance-based restricted stock until performance goals and vesting requirements are met

Stock ownership and retention guidelines for directors and executive officers

Prohibitions on short sales, pledging and hedging transactions

Clawback of incentive compensation in the event of misconduct prejudicial to the company or financial restatements

 

 

 

 

 

 

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   2019 Proxy Statement

 


 

Table of Contents

Table of Contents

MESSAGE FROM OUR CHAIRMAN AND CEO

 

 

 

NOTICE OF THE 2019 ANNUAL MEETING OF STOCKHOLDERS 

 

 

 

PROXY SUMMARY 

i

 

 

PROPOSAL 1:  BOARD OF DIRECTOR NOMINEES

1

Proposal Summary 

1

Board of Directors 

2

Information about the Board of Directors 

6

Corporate Governance 

6

Stockholder Engagement 

6

Meetings 

6

Committees of the Board of Directors 

6

Audit Committee 

7

Compensation Committee 

8

Nominating and Governance Committee 

10

Director Independence 

11

Executive Sessions of Independent Directors 

11

Stockholder Communications to the Board 

12

Board Leadership Structure 

12

Board Succession Planning 

12

Diversity 

12

Role of Board in Risk Oversight 

13

Director Compensation 

13

Compensation Committee Interlocks and Insider Participation in Compensation Decisions 

14

Transactions with Related Persons 

15

 

 

PROPOSAL 2:  SAY ON PAY

17

Proposal Summary 

17

Executive Compensation 

18

Compensation Discussion and Analysis 

18

Risk in Compensation Programs 

37

Compensation Committee Report 

38

Compensation Tables and Explanatory Information 

39

Summary Compensation Table 

39

Grants of Plan-Based Awards Table 

41

Outstanding Equity Awards at Fiscal Year-End Table 

42

Option Exercises and Stock Vested Table 

43

Pension Benefits Table 

43

Non-Qualified Deferred Compensation Table 

45

Potential Payments Upon Termination 

46

Securities Authorized for Issuance Under Equity Compensation Plans Table 

50

CEO Pay Ratio 

50

 

 

PROPOSAL 3:  AUDITOR

52

Proposal Summary 

52

Audit Committee Report 

53

 

 

SECURITY OWNERSHIP OF JOHN BEAN TECHNOLOGIES CORPORATION 

54

Management Ownership 

54

Other Security Ownership 

55

 

 

OTHER MATTERS 

56

Section 16(a) Beneficial Ownership Reporting Compliance 

56

Code of Ethics 

56

Proposals for the 2020 Annual Meeting of Stockholders 

56

Expenses Relating to the Proxy Solicitation 

56

 

 

QUESTIONS AND ANSWERS ABOUT OUR 2019 ANNUAL MEETING 

57

 

 

 

 

 

 

2019 Proxy Statement   

v

 


 

Table of Contents

Proposal 1 – Board of Director Nominees

   Election of Directors

 

 

 

FOR each director nominee

 

 

Proposal 

Election of Directors

 

 

Board Recommendation

The Board of Directors recommends that you vote FOR each director nominee

PROPOSAL SUMMARY

The re-election of two Directors.

The Board of Directors currently consists of seven members. We have three classes of directors, each class being of as nearly equal size as possible. The term for each class is three years. Class terms expire on a rolling basis, so that one class of directors is elected each year. The term for the nominees for director at the 2019 Annual Meeting will expire at the 2022 Annual Meeting.

The nominees for director this year are Alan D. Feldman and James E. Goodwin. Information about the nominees, the continuing directors and the Board of Directors as a whole is contained in the section of this Proxy Statement entitled “Board of Directors.”

The Nominating and Governance Committee has determined to re-nominate Messrs. Feldman and Goodwin as Class II directors at the 2019 Annual Meeting of stockholders.  The Committee determined, upon agreement with Mr. Doheny, not to re-nominate Mr. Doheny as a Class II director at the 2019 Annual Meeting. Since Mr. Doheny became the President and CEO of Sealed Air Corporation in January 2018, it has become apparent that certain markets in which Sealed Air operates have similarities to markets that present growth and expansion opportunities for the Company. Mr. Doheny and our other Directors have concluded that Mr. Doheny’s continuing service on the Board would likely present potential conflict in the future. The Board wishes to thank Mr. Doheny for his years of dedicated service to JBT. The Board has determined to reduce the size of the Board from seven directors to six directors and eliminate the vacancy in Class II effective on the date of the Annual Meeting.

The Board of Directors expects that all of the nominees will be able and willing to serve as directors. If any nominee is not available:

·

the proxies may be voted for another person nominated by the current Board of Directors to fill the vacancy;

·

the Board of Directors may decide to leave the vacancy temporarily unfilled; or

·

the size of the Board of Directors may be reduced.

Vote Required

The election of directors will be determined by a majority voting standard. This means that a director nominee will be elected to the Board of Directors only if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election.

 

 

 

 

 

2019 Proxy Statement   

1

 


 

Table of Contents

Proposal 1 – Election of Directors

BOARD OF DIRECTORS

Nominees for Directors

(Class II — Term Expiring in 2022)

Alan D. Feldman

 

 

 

LOGO

 

Background

 

  President and Chief Executive Officer of Midas, Inc. from January 2003 until May 2012 and its Chairman from May 2006 until May 2012.

  Held several senior management posts with McDonald’s Corporation, becoming President of McDonald’s USA in 1998 and Chief Operating Officer and President of McDonald’s Americas in 2001.

  Served in financial and operations posts at Frito-Lay and Pizza Hut. At Pizza Hut, Mr. Feldman was named Senior Vice President of Operations in 1990 and Senior Vice President, Business Strategy and Chief Financial Officer, in 1993.  

 

  Mr. Feldman currently serves on the Board of Directors of GNC Holdings, Inc. since July 2013, the Board of Directors of Foot Locker, Inc. since May 2005, and on the Board of Directors of the University of Illinois Foundation since September 2012 (where he also serves as Chair).

 

 

Qualifications

  Expertise in the fast-food, quick-serve and snack food industries, markets for our FoodTech businesses, as a result of his senior management positions with McDonald’s and PepsiCo’s Frito-Lay and Pizza Hut operating units.

 

  Experience as the Chief Financial Officer of Pizza Hut allows him to make significant contributions to the Board’s Audit Committee, and his former role as CEO and Chairman of Midas, Inc. provides our Board with the expertise and experience of a former chief executive officer and board chairman of an international retail, parts and services business.

 

Committees:

Chair of the Audit Committee

 

Member of the Nominating and Governance Committee

Director Since: 2008

 

Former Chairman of the Board, President and Chief Executive Officer of Midas, Inc., an international automotive services company

 

Age: 67

 

 

 

 

 

 

 

 

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   2019 Proxy Statement

 


 

Table of Contents

Proposal 1 – Election of Directors

 

James E. Goodwin

 

 

 

LOGO

 

Background

 

  Chairman and Chief Executive Officer of UAL Corporation and United Airlines from March 1999 until his retirement on October 31, 2001.

  President and Chief Operating Officer of UAL Corporation and United Airlines from 1998 to 1999. During his career with UAL Corporation and United Airlines, Mr. Goodwin became Senior Vice President-Marketing in 1985, Senior Vice President-Services in 1988, Senior Vice President-Maintenance Operations in 1991, Senior Vice President-International in 1992 and Senior Vice President-North America in 1995.

  Mr. Goodwin currently serves on the Boards of Directors of AAR Corp. since April 2002 and Federal Signal Corporation since October 2005 (where he currently serves as lead independent director).

 

  Advisory Board of Wynnchurch Capital, a private equity firm, and has served on the Boards of Directors of two of their portfolio companies, Burtek Enterprises, Inc. and Northstar Aerospace, Inc., since March 2013.

 

 

Qualifications

  Thirty-four years of operational and management experience in the airline industry brings significant expertise to the management of our AeroTech division.

 

  Experience as a chief executive and board chairman of UAL Corporation and United Airlines, as well as his current service as a director and as a member of the audit committee of AAR Corp., an aviation support company, and his experience as chairman of the board of Federal Signal Corporation adds to the insights he brings to our Board regarding opportunities in the aviation industry, to our Board’s Audit Committee and more generally in assessing and evaluating risks and opportunities facing our Company.

 

Committees:

Lead Independent Director

 

Member of the Audit Committee

 

Member of the Nominating and Governance Committee

Director Since: 2008

 

Former Chairman of the Board of Federal Signal Corporation, a manufacturer of emergency audio and visual warning device systems, and Retired Chairman of the Board and Chief Executive Officer of UAL Corporation, parent corporation of United Airlines, an international air transportation company

 

Age: 74

 

 

 

 

 

 

 

 

2019 Proxy Statement   

3

 


 

Table of Contents

Proposal 1 – Election of Directors

Class III — Term Expiring in 2020

Thomas W. Giacomini

 

 

 

LOGO

 

Background

 

  President and Chief Executive Officer since September 2013 and Chairman of the Board since May 2014.

  Served as Vice President (since February 2008) of Dover Corporation, a diversified global manufacturer, and President and Chief Executive Officer (since November 2011) of Dover Engineered Systems.

  President (from April 2009 to November 2011) and Chief Executive Officer (from July 2009 to November 2011) of Dover Industrial Products and President (from October 2007 to July 2009) of Dover’s Material Handling Platform.

  Joined Dover in 2003 following its acquisition of Warn Industries. During his tenure at Warn Industries he held a variety of leadership roles including President and Chief Operating Officer.

  Prior to joining Warn Industries, Mr. Giacomini held various roles at TRW, Inc.

  Mr. Giacomini currently serves as a director of MSA Safety Incorporated since June 2017.

•  Mr. Giacomini had served as a director of Clarcor, Inc. from August 2015 through February 2017, when it was acquired by Parker-Hannifin.

 

 

 

Qualifications

 

  Experience as a senior executive officer of a large and diversified global manufacturing company brings to the Board a managerial and operating perspective gained from his experience managing the risks, implementing the strategies and spearheading growth initiatives of a larger global company.

  MBA from Northwestern’s Kellogg School of Management and a Bachelor’s degree in Mechanical Engineering from University of Michigan (Dearborn).

 

 

Committees:

Chairman of the Board of Directors

 

 

Director Since: 2013

 

Chairman of the Board, President & Chief Executive Officer of JBT Corporation

 

Age: 53

 

 

 

 

 

 

Polly B. Kawalek

 

 

 

LOGO

 

Background

 

  Retired in 2004 after serving for 25 years in various capacities with Quaker Oats, Inc., which in 2001 became a business unit of PepsiCo.

  Served as President of Quaker Oats’ U.S. Foods division from 2001 until her retirement and from 1997 through 2000 she served as President of its Hot Breakfast division.

  Ms. Kawalek currently serves as a director of Elkay Manufacturing Company since 2005.

•  Ms. Kawalek had served as a director of Martek Biosciences Corp. from 2005 until February 2011 and as a director of Kimball International, Inc. from 1998 until January 2009.

 

 

 

Qualifications

  Twenty-five years of food industry experience from her roles at Quaker Oats, both prior and subsequent to its acquisition by PepsiCo. Ms. Kawalek’s insights into research and development, product innovation and marketing brings our Board key perspectives for strategic planning.

 

Committees:

Chair of the Nominating and Governance Committee

 

Member of the Compensation Committee

Director Since: 2008

 

Retired President of PepsiCo’s Quaker Foods Division, an international manufacturer of branded products

Age: 64

 

 

 

 

 

 

 

 

 

4

   2019 Proxy Statement

 


 

Table of Contents

Proposal 1 – Election of Directors

Class I — Term Expiring in 2021

C. Maury Devine

 

 

 

 

 

LOGO

 

Background

 

  President and Managing Director of ExxonMobil Corporation’s Norwegian affiliate, Exxon Mobil Norway, from 1996 to 2000.

 

  Secretary of Mobil Corporation from 1994 to 1996. From 1990 to 1994, Ms. Devine managed Mobil’s international government relations and from 1988 to 1990, Ms. Devine served as manager, security planning for Mobil.

 

  From 2000 to 2003, Ms. Devine was a Fellow at Harvard University’s Belfer Center for Science and International Affairs.

 

  15 years in the United States government in positions at the White House, the American Embassy in Paris, France, and the U.S. Department of Justice.

 

  Ms. Devine currently serves on the Boards of Directors of Valeo since 2015 and Conoco Phillips since 2017 and the Georgetown Visitation Preparatory School since 2013.

 

  Ms. Devine had served on the Boards of Det Norske Veritas (DNV) from 2000 to 2010, Aquatic Energy LLC from 2010 to 2012, FMC Technologies, Inc. from 2005 to 2016, and Technip from 2011 to 2017.

 

 

 

 

Qualifications 

 

  Fifteen years of government service, including posts in the White House, the American Embassy in Paris, France and the Department of Justice, provides insights into international affairs and knowledge of the Federal government.

 

  Member of the Council on Foreign Relations, an asset to our businesses that market and sell to the U.S. government and navigate international trade issues

 

Committees:

Member of the Audit Committee

 

Member of the Nominating and Governance Committee

 

Director Since: 2008

 

Retired President and Managing Director, ExxonMobil Norway, an oil and gas exploration company

 

Age: 68

 

 

 

 

 

James M. Ringler

 

 

 

 

 

LOGO

 

Background

 

  Former Chairman of the Board of Teradata Corporation.

 

  Vice Chairman of Illinois Tool Works Inc. until his retirement in 2004.

 

  Chairman, President and Chief Executive Officer of Premark International, Inc., which merged with Illinois Tool Works in November 1999.

 

  President and Chief Operating Officer of Premark from 1990 to 1996.

 

  From 1986 to 1990, he was President of White Consolidated Industries’ Major Appliance Group, and from 1982 to 1986, he was President and Chief Operating Officer of The Tappan Company.  He also was a Consulting manager with Arthur Andersen & Co.

 

  Mr. Ringler is the Former Chairman of the Board of Teradata Corporation serving since September 2007 and he has been a member of the Boards of Directors of Autoliv, Inc. since 2002, TechnipFMC since 2001, and Veoneer, Inc. since 2018.

 

  Mr. Ringler had served on the Boards of Directors of Ingredion Incorporated from 2001 to 2014 and DowDuPont, Inc. from 2001 to March 2019.

 

 

Qualifications

  Service on the Board of Directors of our predecessor, TechnipFMC, formerly known as FMC Technologies, Inc. beginning in 2001 brings to the Board familiarity with the historical business strategies, products and management of the businesses that now comprise JBT Corporation.

 

  Experience as a chief executive and board chairman provide the Board with significant experience in its evaluations of risks and opportunities facing our company.

 

Committees:

Member of the Nominating and Governance Committee

 

Member of the Compensation Committee

Director Since: 2008

 

Former Chairman of the Board of Teradata Corporation, a data warehousing and analytic technologies company, and Retired Vice Chairman of Illinois Tool Works Inc., an international manufacturer of highly engineered components and industrial systems

 

Age: 73

 

 

 

 

 

 

 

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INFORMATION ABOUT THE BOARD OF DIRECTORS

Corporate Governance

Our Board of Directors believes that the purpose of corporate governance is to ensure that we maximize stockholder value in a manner that is consistent with both the legal requirements applicable to us and a business model that requires our employees to conduct business with the highest standards of integrity. The Board has adopted and adheres to corporate governance principles which the Board and senior management believe promote this purpose, are sound and represent best practices. The Board reviews these governance practices, the corporate laws of the State of Delaware under which we were incorporated, the rules and listing standards of the New York Stock Exchange and the regulations of the Securities and Exchange Commission, as well as best practices recognized by governance authorities to benchmark the standards under which it operates. The corporate governance principles adopted by the Board of Directors may be viewed on our website under Corporate Governance at www.jbtc.com/investors, and are also available in print to any stockholder upon request. A request should be directed to our principal executive offices at 70 West Madison Street, Suite 4400, Chicago, Illinois 60602, Attention: Executive Vice President, General Counsel.

Stockholder Engagement

Our Board of Directors believes that stockholders should have opportunities to engage directly with Company management and the Board. The Company engages with stockholders on a variety of topics throughout the year to ensure we are addressing questions and concerns, to seek input and to provide perspective on the Company’s strategy, operating results, compensation and governance policies. Stockholder feedback from this engagement is considered by the Board of Directors and reflected in enhancements to policies and practices. The Company’s stockholder engagement program includes but is not limited to roadshows, one-on-one conferences and general availability to respond to investor inquiries.  The multi-faceted nature of this program allows the Company to maintain meaningful engagement with a broad audience and various types of stockholders.

In addition to the opportunity for direct engagement with senior management, there are a number of ways for stockholders to effectively communicate a point of view with the Board of Directors, including the following: a) the annual election of director nominees by way of a majority vote standard; b) the annual advisory vote to approve executive compensation; c) our commitment to thoughtfully consider stockholder proposals properly submitted to the Company; d) the ability to attend and voice opinions at the Annual Meeting of Stockholders; and e) direct written communications to our Board of Directors.

Meetings

Our Board of Directors held 6 meetings during 2018. Each director attended at least 75% of the meetings of the Board. In addition, each of our directors attended at least 75% of the meetings of the committees on which he or she served during 2018. The Board of Directors has scheduled a board meeting on the day of the 2019 Annual Meeting of Stockholders, and the Company encourages Board members to attend the Annual Meeting of Stockholders. All of our Board members attended the 2018 Annual Meeting of Stockholders.

Committees of the Board of Directors

The Board of Directors has three standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee.

Each of these committees operates pursuant to a written charter setting out the functions and responsibilities of the committee, each of which may be reviewed on our website under Corporate Governance at www.jbtc.com/investors, and is also available in print to stockholders upon request submitted to our principal executive offices at 70 West Madison Street, Suite 4400, Chicago, Illinois 60602, Attention: Executive Vice President, General Counsel.

 

 

 

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Audit Committee

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2018

Alan D. Feldman (Chair)

C. Maury Devine

James E. Goodwin

   Responsibilities associated with our external independent auditor, including their appointment, compensation, retention or termination, and oversight;

   Review and discuss with management, our Vice President of Internal Audit and our independent auditor the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies that could significantly affect our financial statements;

   Review of the scope, planning and staffing of the prospective audit and approval of estimated fees therefor;

   Resolution of disagreements between management and our independent auditor regarding financial reporting;

   Oversight over accounting and financial reporting processes associated with the preparation of our financial statements and filings with the Securities and Exchange Commission;

   Review of reports by management and legal counsel relating to litigation and compliance with laws, internal policies and controls that are material to our financial statements;

   Review and assess our financial and accounting organization and internal controls;

   Review policies with respect to major risk assessment and risk management practices designed to monitor and control exposure to such risks;

   Review of matters associated with auditor independence and approval of non-audit services; and

   Oversight over “whistle-blower” procedures for reporting questionable accounting and audit practices.

8

Audit Committee members meet privately in separate sessions with representatives of our senior management, our independent public accountants and our Vice President of Internal Audit after certain Audit Committee meetings (4 such sessions were held following Audit Committee meetings in 2018).

The Audit Committee charter gives the Audit Committee the authority and responsibility for the engagement, compensation and oversight of our independent public accountants and the review and approval in advance of the scope of audit and non-audit assignments and the related fees of the independent public accountants. The Audit Committee charter also gives this committee authority to fulfill its obligations under Securities and Exchange Commission and New York Stock Exchange requirements.

The Board of Directors has determined that all of the members of the Audit Committee (C. Maury Devine, Alan D. Feldman and James E. Goodwin) (i) are independent directors as defined by the New York Stock Exchange listing rules and satisfy the enhanced independence criteria required for audit committee service under Securities and Exchange Commission rules and the New York Stock Exchange listing rules and (ii) meet the New York Stock Exchange standard of having accounting or related financial management expertise and meet the Securities and Exchange Commission criteria for an “audit committee financial expert.”

 

 

 

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Compensation Committee

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2018

Edward L. Doheny, II (Chair)

Polly B. Kawalek

James M. Ringler

   Reviewing succession plans for the Chief Executive Officer and other primary executive officers annually, and reporting to the full Board on succession planning and management development;

   Administering our 2017 Incentive Compensation and Stock Plan and any other predecessor plans (the “Incentive Compensation Plan”), approving and administering other equity compensation plans;

   Reviewing our overall compensation philosophies to ensure policies appropriately link management interests with those of stockholders and mitigate risks;

   Approving the peer group used for compensation levels, program design and relative performance comparisons and ensuring our pay programs are competitive and enable us to attract, retain and motivate top talent;

   Reviewing all new employee benefit plans and fringe benefits and approving the activities related to mergers, consolidations, split-ups, spin-offs or terminations of such plans;

   Reviewing and approving the short- and long-term performance goals and individual objectives (as it relates to the Chief Executive Officer) compared to incentive plan terms and total incentive compensation amounts to be paid to executive officers, and reviewing, approving and administering policies and agreements permitting recovery of executive officer compensation in the event of a restatement of our financial results;

   Reviewing and approving the short- and long-term performance goals and individual objectives (as it relates to the Chief Executive Officer) compared to incentive plan terms and total incentive compensation amounts to be paid to executive officers, and reviewing, approving and administering policies and agreements permitting recovery of executive officer compensation in the event of a restatement of our financial results;

   Appointing members of the Employee Benefits Plan Committee and periodically reviewing the actions taken by that committee;

   Approving all executive officer pay packages, periodically reviewing executive officer perquisites and executive severance arrangements, hedging and pledging policies, and establishing and monitoring compliance with executive stock ownership guidelines;

   Recommending to the full Board changes to compensation for non-employee directors;

   Reviewing management’s Compensation Discussion and Analysis to be included in our annual proxy statement, issuing its report on executive compensation for inclusion in our annual report or proxy statement, reviewing and recommending for Board approval the frequency of advisory votes on executive compensation (“say-on-pay”), and reviewing the results of say-on-pay resolutions and the input received from our stockholders engagement efforts, and considering any implications thereof; and

   Hiring an executive compensation consultant to advise the Committee after determining that the consultant met independence requirements.

3

Mr. Doheny’s term as a Class II director will conclude at the Annual Meeting.  See “Proposal I — Board of Director Nominees — Proposal Summary.”  The Board intends to appoint another Board member to succeed Mr. Doheny as the Chair of the Compensation Committee at its meeting following the Annual Meeting.

 

 

 

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The Board of Directors has determined that all of the members of the Compensation Committee (Edward L. Doheny, II, Polly B. Kawalek and James M. Ringler) are independent directors as defined by the New York Stock Exchange listing rules and satisfy the enhanced independence criteria required for compensation committee service under Securities and Exchange Commission regulations and the New York Stock Exchange corporate governance listing standards.  The Compensation Committee members meet privately in separate sessions with representatives of our compensation consultant and our Executive Vice President, Human Resources after most Compensation Committee meetings (3 such sessions were held following the Compensation Committee in 2018).

Under its charter, our Compensation Committee has the authority to engage the services of outside consultants, outside lawyers, and others to assist the committee’s fulfillment of these responsibilities, and our Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”), an internationally recognized executive compensation consulting firm, as the Committee’s independent compensation consultant for 2018. For 2018, the Compensation Committee’s engagement agreement with Meridian provided for a scope of work that included ensuring that the Compensation Committee’s compensation recommendations were consistent with our business strategy, pay philosophy, prevailing market practices and relevant regulatory mandates and assisting the Committee’s efforts to make compensation decisions that were aligned with the interests of our stockholders. In addition, Meridian’s engagement for 2018 included the provision of incentive compensation plan design advice as well as advising on the Company’s compensation peer group. In connection with its engagement of Meridian in 2018, the Compensation Committee considered various factors bearing upon Meridian’s independence including, but not limited to, the amount of fees received by Meridian from the Company as a percentage of Meridian’s total revenue, Meridian’s policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship with any member of the Compensation Committee or management that could impact Meridian’s independence. After reviewing these and other factors, the Compensation Committee determined that Meridian was independent and that its engagement did not present any conflicts of interest. Meridian also determined that it was independent from management and confirmed this in a written statement delivered to the Chair of the Compensation Committee.

The Compensation Committee annually reviews executive pay, peer group selection criteria, compensation design practices and performance to help ensure that our total compensation program is consistent with our compensation philosophies. When determining compensation levels for executive officers for 2018, the Compensation Committee utilized compensation survey data that was supplied by Meridian and Aon Hewitt. For purposes of this survey, a group of peer companies was selected by our management, reviewed by Meridian and approved by the Compensation Committee. The list is reviewed prior to each compensation survey by the Compensation Committee to ensure continuing relevancy of the peer group considering the size, industry, and financial performance of the proposed companies. With each survey, the Compensation Committee’s independent consultant collects, analyzes and reports back to the Compensation Committee on the amounts, designs, and components of compensation paid by the peer group, utilizing regression analysis to develop size-adjusted values for companies with varying revenue size and to provide relevant comparisons. For our Chief Executive Officer, Chief Financial Officer and Executive Vice Presidents, the Compensation Committee also reviews data compiled annually by Meridian from proxy statement filings by peer group companies to assess pay levels and design practices for comparable executive officers.

Based on the survey market data and the additional data from public filings, the Compensation Committee reviewed the appropriateness of management’s recommendations for each of our executive officer’s base pay, annual management incentive plan bonus and long term incentive plan awards for 2018. The Compensation Committee allocated total annual compensation to our executive officers among the various elements of short-term cash (base pay and management incentive plan bonus) and long-term compensation (equity incentive awards) to approximate the market 50th percentile targeted pay levels and mix identified in the survey results and in the data obtained from public filings, with appropriate differences based on individual experience, impact and performance.

The scope of authority delegated to the Compensation Committee by the Board of Directors is to decide whether or not to accept, reject or modify our management’s proposals for total compensation awards to our named executive officers. The Compensation Committee also has the authority to recommend to the Board of Directors the amount of compensation to be paid to our non-employee directors. Our Chief Executive Officer participated this year in the compensation decisions for the other named executive officers.

 

 

 

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He did not have a role in setting his own base pay, annual management incentive plan compensation or the size of his annual long-term incentive plan award. Our Executive Vice President, Human Resources, working with Meridian, provided recommendations for each executive’s base pay, annual management incentive plan bonus and annual long-term incentive plan award for the Compensation Committee’s review. Our Chief Financial Officer and our Director, Financial Planning & Analysis also provided the Compensation Committee with information related to our financial performance against our objectives. This information was then used by the Compensation Committee as a factor in setting annual targets and ratings associated with incentive compensation awards and selecting appropriate performance metrics and objectives for long-term performance-based incentive compensation awards.

Nominating and Governance Committee

 

 

 

 

 

# of Meetings

Committee Members

Primary Responsibilities

in 2018

Polly B. Kawalek (Chair)

C. Maury Devine

Edward L. Doheny II

Alan D. Feldman

James E. Goodwin

James M. Ringler

   Identifying and recommending to the Board of Directors qualified candidates for vacancies on the Board in accordance with criteria established by the Board;

   Identifying and recommending nominees for the Board of Directors to be submitted for election at the Annual Meeting

   Making recommendations to the Board of Directors concerning the membership of Board committees and committee chairpersons;

   Developing and recommending to the Board of Directors a set of Corporate Governance Guidelines, reviewing them annually, and making recommendations to the Board from time to time regarding matters of corporate governance;

   Recommending to the Board of Directors in the event of an emergency, a temporary replacement of the Chief Executive Officer or any other primary executive officer, in accordance with the applicable succession plan;

   Reviewing our ethics policy annually and recommending changes to the Board of Directors;

   Annually reviewing and evaluating all relationships between non-employee directors and our company and making recommendations to the Board of Directors regarding the assessment of each non-employee director’s independence;

   Monitoring orientation and training needs of the directors and making recommendations regarding director training programs and advising the Board on emerging governance trends; and

   Reporting annually to the Board of Directors the Committee’s assessment of the performance of the Board and its committees..

2

The Nominating and Governance Committee will consist of the five remaining members starting on the date of the Annual Meeting. The Board of Directors has determined that all of the members of the Nominating and Governance Committee (C. Maury Devine, Edward L. Doheny II, Alan D. Feldman, James E. Goodwin, Polly B. Kawalek and James M. Ringler) are independent directors as defined by the New York Stock Exchange listing rules.

Stockholders may submit recommendations for future candidates for election to the Board of Directors for consideration by the Nominating and Governance Committee by writing to: Executive Vice President, General Counsel, John Bean Technologies Corporation, 70 West Madison Street, Suite 4400, Chicago, Illinois 60602. A letter making a director candidate recommendation must include the candidate’s name, biographical information and a summary of the candidate’s qualifications. In addition, the letter should be accompanied by a signed statement from the nominee indicating that the nominee is willing to serve as a member of the Board. To make a recommendation for the 2020 Annual Meeting, please refer to the timing requirements specified in the section of this Proxy Statement entitled “Proposals for the 2020 Annual Meeting of Stockholders.” All submissions from stockholders meeting these requirements will be reviewed by the Nominating and Governance Committee.

 

 

 

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In connection with its role in recommending candidates for the Board, the Nominating and Governance Committee advises the Board with respect to the combination of skills, experience, perspective and background that its members believe are required for the effective functioning of the Board considering our current business strategies and regulatory, geographic and market environment. The Committee has not established specific, minimum qualifications for director nominees. Our Corporate Governance Guidelines provide that directors should be selected based on integrity, successful business experience, stature in their own fields of endeavor and the diversity of perspectives they bring to the Board. Our Corporate Governance Guidelines also require that a majority of our non-employee directors be active or retired senior executives, preferably chief executive, chief financial or chief operating officers or other similar senior officers of publicly-held companies. In addition, the Corporate Governance Guidelines provide that our non-employee directors also be chosen based on recognized experience in our lines of business and leadership in areas of government service, academia, finance and international trade. Nominees to be evaluated by the Nominating and Governance Committee for future vacancies on the Board will be selected by the Committee from candidates recommended by multiple sources, including business and personal contacts of the members of the Nominating and Governance Committee, recommendations by our senior management and candidates identified by independent search firms, stockholders and other sources, all of whom will be evaluated based on the same criteria. All of the current nominees for the Board are standing members of the Board that are proposed by the entire Board for re-election.

Director Independence

The Nominating and Governance Committee conducted a review of the independence of the members of the Board of Directors and its committees and reported its findings to the full Board at its February 22, 2019 meeting. Six of our seven directors who served on our Board in 2018 were non-employee directors. Our Chairman, President and Chief Executive Officer, Thomas W. Giacomini, is our single employee director. Each of our directors completes an annual questionnaire requiring disclosure of any relationships (including industrial, banking, consulting, legal, accounting, charitable or familial relationships) which could impair the independence of such director. The Nominating and Governance Committee reviewed all of the commercial transactions, relationships and arrangements between us and our subsidiaries, affiliates and executive officers with companies with whom the six non-employee directors who served on our Board in 2018 are affiliated or employed. The only transaction, relationship and arrangement of this nature that exists and was reviewed by the Nominating and Governance Committee was the continuing service by James M. Ringler as a member of the Board of Directors of TechnipFMC, formerly known as FMC Technologies, Inc., the company from which we separated in a spin-off transaction in July 2008. TechnipFMC and JBT Corporation are parties to certain agreements that pertain to the separation of the operations of the two companies and which address, among other things, continuing indemnification obligations between the two companies, intellectual property licensing arrangements, and sales distributor agreements. Although the Board has not adopted categorical standards of materiality, this relationship was not deemed to be material or as impacting the independence of our non-employee directors.

Based on the report and recommendation of the Nominating and Governance Committee, the Board has determined that each of its non-employee members (C. Maury Devine, Edward L. Doheny II, Alan D. Feldman, James E. Goodwin, Polly B. Kawalek and James M. Ringler) satisfies the independence criteria set forth in the corporate governance listing standards of the New York Stock Exchange. In addition, all of the members of the Audit Committee satisfy the enhanced independence criteria required for members of audit committees, and all of the members of the Compensation Committee satisfy the enhanced independence criteria required for members of compensation committees, under regulations adopted by the Securities and Exchange Commission and the New York Stock Exchange corporate governance listing standards.

Executive Sessions of Independent Directors

The Board of Directors holds executive sessions of only its independent directors after regularly scheduled Board of Directors meetings. James E. Goodwin was selected by the Board of Directors to serve as the presiding “lead independent director” for these executive sessions during 2018, and was re-selected to serve in that capacity for 2019.

 

 

 

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Stockholder Communications to the Board

Stockholders and other interested parties may communicate directly with the Board of Directors, with the presiding “lead independent director” for an upcoming meeting or the independent directors as a group by submitting written correspondence c/o Lead Independent Director, John Bean Technologies Corporation, 70 West Madison Street, Suite 4400, Chicago, Illinois 60602. The lead independent director will review any such communication at the next regularly scheduled Board meeting unless, in his or her judgment, earlier communication to the full Board is warranted.

Board Leadership Structure

The Board retains the authority to modify its Board leadership structure to address our Company’s circumstances and advance the best interests of the Company and its stockholders as and when appropriate. The Board believes combining the role of Chief Executive Officer and the role of Chairman, together with the designation of a lead independent director, provides an appropriate balance in the Company’s leadership. Our Corporate Governance Guidelines provide for the annual election of a lead independent director by a majority of the non-employee directors. The lead independent director chairs executive sessions of independent directors, which our Corporate Governance Guidelines require to occur at least annually in conjunction with regularly scheduled Board meetings. Our independent directors typically meet in an executive session at the conclusion of each of our regularly scheduled Board of Director meetings and following that meeting our lead independent director provides feedback to our Chief Executive Officer to the extent desired by the independent directors. The Board’s annual self-evaluation includes questions regarding the Board’s opportunities for open communication and effectiveness of executive sessions. Our Corporate Governance Guidelines limit employee members of the Board to two seats. Our Chairman of the Board, President and Chief Executive Officer is the only member of management currently serving on our Board. A combined Chief Executive Officer and Chairman role serves as an effective bridge between the Board and our management, and provides strong unified leadership of the Company.  Currently all other members of our Board are independent. Our three Board committees are comprised entirely of independent directors and each committee has regular interaction with our senior management in establishing their agendas and obtaining information from our Company’s operations.

Board Succession Planning

The Nominating and Governance Committee oversees and plans for Board members succession to ensure a mix of skills, experience, tenure and diversity that promotes and supports the Company’s long-term strategy.  Using a variety of sources including but not limited to an independent search firm, recommendations from stockholders, management and our independent directors, the Nominating and Governance Committee will review qualified persons using a board skills analysis and recommend candidates to the Board in accordance with its Corporate Governance Guidelines and any criteria adopted by the Board regarding director candidate qualifications.  After careful review and consideration, the Board will nominate candidates for election or re-election.

Diversity

Our Corporate Governance Guidelines provide that Board members will be selected based on integrity, successful business experience, stature in their own fields of endeavor, and the diversity of perspectives they bring to the Board. Our Corporate Governance Guidelines further state that consideration should also be given to candidates with experience in the Company’s lines of business and leadership in such areas as government service, academia, finance and international trade. We have from time to time engaged the services of an executive search firm to help us identify qualified Board candidates meeting these criteria and specifically seek director candidates who helped us meet the following parameters: experience in the food, airline or airfreight industries; industrial manufacturing background; international business exposure; financial expertise; added to the diversity of our Board; possessed chief executive officer or senior P&L management skills; experience on public company boards; and a sophisticated understanding of M&A transactions and integration into existing businesses. We believe we have achieved a diversity of perspectives with our current Board membership, which consists of directors who are holding or have held a variety of senior management level positions and have extensive public company board experience, broad experience across the industries in which we conduct business, international business expertise and State

 

 

 

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and Federal government service. For more information regarding the background, experience and attributes of our directors, please refer to the complete biographies of our directors that appear under “Board of Directors” in this Proxy Statement.

Role of Board in Risk Oversight

As part of its general oversight over the management of the Company, our Audit Committee periodically reviews assessments prepared by our management of the primary risks relevant to our business and the mitigation actions we implement to address these risks. The role of the Board in risk oversight is to provide guidance to management through its Audit Committee, based upon their experience and perspectives, regarding the overall effectiveness of its strategies to monitor and mitigate those risks. During Board meetings, the Board periodically receives reports directly from the Division Presidents for each of our divisions; these updates provide our Board with a more detailed understanding of the strategies of each of our divisions and the opportunities and risks that they face. Management also provides the Board with periodic reports regarding its enterprise risk management programs, our internal audit program, our code of ethics and compliance training programs and our internal control assessments. Our Audit Committee also receives a quarterly update from our Executive Vice President, General Counsel regarding material litigation and legal loss contingencies involving the Company as well as reports to our employee hotline.

In addition, our Compensation Committee periodically reviews assessments prepared by Meridian of potential risks associated with our compensation programs and determines whether our compensation policies and practices adequately and effectively mitigate those risks. The Compensation Committee reports its findings and recommendations, if any, to the Board.

Director Compensation

The Compensation Committee bi-annually reviews non-employee director compensation to ensure that the amount of compensation provided to non-employee directors is within appropriate parameters. In late 2017, the Compensation Committee commissioned Meridian to conduct a peer group survey to review non-employee director compensation.  The results of the survey indicated that our total non-employee director compensation was below the peer group median.  Accordingly, the Compensation Committee recommended to the full Board a slight increase in non-employee director compensation in 2018 to realign with peer group companies, which was approved by the Board.

For 2018, each of our non-employee directors received an annual retainer of $80,000. This annual retainer is structured to provide each non-employee director with the option to receive 0%, 50%, or 100% of the value of the retainer in the form of restricted stock units (“RSUs”), provided a timely election to receive RSUs is made by a non-employee director, and the option to elect to receive any remainder in cash, payable in quarterly installments. RSUs granted as part of the 2018 retainer had a fair market value equal to the deferred amount of the annual retainer on the date of the grant and vest in May 2019. The amount of this annual retainer is allocated among fees earned or paid in cash (column (b)) and stock awards (column (c)) in the Director Compensation Table below based upon the election made by each director.

We also make an annual non-retainer equity grant to our non-employee directors of RSUs of equivalent value. Our practice is to make these awards on May 1 of each year. On May 1, 2018, we awarded each of our non-employee directors RSUs with a value of $120,000, which is included in the amount contained in column (c) of the Director Compensation Table below. These awards will also vest in May 2019.

Our non-employee directors do not receive additional cash remuneration for Board of Directors meetings or committee meetings attended. For 2018, the chair of the Audit Committee received an additional annual fee of $20,000; the chair of the Compensation Committee received an additional annual fee of $15,000; the chair of the Nominating and Governance Committee received an additional annual fee of $10,000; and the Board of Director’s lead independent director received an additional annual fee of $30,000, and a pro-rated portion of that fee is included as fees earned or paid (column (b)) for 2018 in the Director Compensation Table below for each chair and the lead independent director. Each non-employee director will also receive reimbursement for reasonable incidental expenses incurred in connection with the attendance of meetings of the Board and Board committees.

 

 

 

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We have ownership requirements for our non-employee directors that are based on a multiple of five times the amount of each non-employee director’s annual retainer to be met within three years of their appointment to the Board, and each of our non-employee directors who are currently subject to this requirement is in compliance with the ownership requirements. Non-employee directors who meet the ownership guidelines may elect whether to have the RSUs they elect to receive from the annual retainer and the annual non-retainer equity grants they are awarded (i) distributed at the time of vesting, which is one year after grant date, or (ii) distributed after they complete their service on our Board. Unvested RSUs will be settled and are payable in Common Stock upon the death or disability of a director or in the event of a “change in control” of the Company, as such term is defined in the Incentive Compensation Plan.

The following table shows all compensation awarded, paid to or earned by the non-employee members of our Board of Directors from all sources for services rendered in all of their capacities to us during 2018.

Director Compensation Table

 

 

 

 

 

 

 

 

 

 

 

Fees Earned

 

 

 

 

 

 

 

 

or Paid in

 

Stock 

 

All Other

 

 

 

 

Cash

 

Awards

 

Compensation

 

Total

Name (1)

    

($) (2) 

    

($) (3) 

    

($) (4) 

    

($) 

(a)

 

(b)

 

(c)

 

(d)

 

(e)

C. Maury Devine

 

76,667

 

119,951

 

10,000

 

206,618

Edward L. Doheny II

 

91,667

 

119,951

 

 —

 

211,618

Alan D. Feldman

 

95,000

 

119,951

 

 —

 

214,951

James E. Goodwin

 

103,333

 

119,951

 

 —

 

223,284

Polly B. Kawalek

 

10,000

 

199,991

 

5,000

 

214,991

James M. Ringler

 

76,667

 

119,951

 

 —

 

196,618


(1)

Thomas W. Giacomini, our Chairman, President and Chief Executive Officer, is not included in the table as he was our employee during 2018 and did not receive compensation for his services as director. The compensation paid to Mr. Giacomini is shown in the Summary Compensation Table in this Proxy Statement.

(2)

Includes the amount of any cash portion of the director’s annual retainer each director elected to receive and additional fees paid to the chairperson of each board committee and the lead independent director for serving that function.

(3)

RSU grants were made on May 1, 2018, valued at $108.75 per share, the closing price of our Common Stock on May 1, 2018, reflecting an aggregate grant date fair value for all of our non-employee directors of $799,746. The amount reflected in the stock awards column above represents the fair value of the awards at grant date. The aggregate number of outstanding RSUs held by each of our non-employee directors on December 31, 2018 was: Ms. Devine, 43,890; Mr. Doheny, 25,929; Mr. Feldman, 54,363; Mr. Goodwin, 46,690; Ms. Kawalek, 59,259; and Mr. Ringler, 45,297.

(4)

Represents charitable contributions made in the name of directors by us during 2018 pursuant to the matching charitable contribution program available to all of our employees and directors. Pursuant to this program, we match 100% of the charitable contributions of our employees and directors up to $10,000 in any year, although we may exercise discretion to approve matching contributions in excess of that limitation from time to time.

Our non-employee directors do not participate in our employee benefit plans other than our matching program for charitable contributions.

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

In 2018, the members of the Compensation Committee of the Board were Edward L. Doheny II, Polly B. Kawalek, and James M. Ringler, none of whom has ever been an officer or employee of our Company. None of our executive officers has ever served on the board of directors or on the compensation committee of any other entity that has had any executive officer serving as a member of our Board of Directors.

 

 

 

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Proposal 1 – Election of Directors

TRANSACTIONS WITH RELATED PERSONS

During 2018, we were not a participant in any transaction or series of related transactions in which any “related person” had or will have a material interest and in which the amount involved exceeded $120,000. A “related person” is any person who was in any of the following categories since the beginning of 2018:

·

any of our directors or executive officers;

·

any nominee for director;

·

any immediate family member of any of our directors or executive officers or any nominee for director, with immediate family member including any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law and any person (other than a tenant or an employee) sharing the household of a director or executive officer or a nominee for director;

·

a security holder listed in the “Other Security Ownership” table below; or

·

any immediate family member of such a security holder.

Under its charter, the Audit Committee is responsible for reviewing and approving any transactions with “related persons”.

All of our non-employee directors and executive officers are subject to our Code of Business Conduct and Ethics. Our Code of Business Conduct and Ethics provides that each of our employees and directors is expected to avoid engaging in activities where their personal interests conflict with, or have the appearance of conflicting with, our interests. Personal interests that may give rise to conflicts of interest include commercial, industrial, banking, consulting, legal, accounting, charitable and financial relationships, and may also arise when a director or employee receives personal benefits outside of the compensation or reimbursement programs approved by the Board of Directors. These requirements also extend to immediate family members of employees and directors.

Suspected violations of our Code of Business Conduct and Ethics, including potential conflicts of interest, must be reported to the Chairman of the Board, if the suspected violation involves a director, or to the General Counsel, if the suspected violation involves an executive officer (or to the Chairman of the Board if the suspected violation involves the General Counsel), or reported to our employee hotline. The Chairman of the Board or the General Counsel, as applicable, will discuss the matter with the Chairman of the Board, or the Chair of the Audit Committee, as appropriate, for evaluation and appropriate resolution. Reports made to our employee hotline will be reported to the Board of Directors, or the Audit Committee, which will have the responsibility for determining if there is a conflict of interest and, if so, how to resolve it without compromising the best interests of us and our stockholders.

Under our Corporate Governance Guidelines, directors must disclose to the Board of Directors any potential conflict of interest they may have with respect to a matter under discussion and, if appropriate, recuse themselves and not participate in the discussion or voting on a matter on which they may have a conflict. No such matters were reviewed or approved by the Board of Directors or the Audit Committee of the Board during 2018.

Our Code of Business Conduct and Ethics also prohibits any employee or director from taking for themselves personally (including for the benefit of family members or friends) business opportunities that are discovered through the use of our property, information or position with the Company without the prior consent of the Board of Directors. No employee or director may use corporate property, information or position with the Company for improper personal gain, or may compete with us, directly or indirectly.

 

 

 

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Our Code of Business Conduct and Ethics may be reviewed on our website under Corporate Governance at www.jbtc.com/investors. A waiver of any provision of our Code of Business Conduct and Ethics for a director or an executive officer may only be made by the Board of Directors, or a committee appointed by the Board, and will be promptly disclosed to the extent required by law, including the rules, regulations or listing standards of the Securities and Exchange Commission and the New York Stock Exchange.

In addition to the foregoing ethics policy, the Nominating and Governance Committee periodically reviews all commercial business relationships that exist between us and companies with which our directors are affiliated in order to determine if non-employee members of the Board are independent under the rules of the New York Stock Exchange.

 

 

 

 

 

 

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Proposal 2 – Say on Pay

   Election of Directors

 

 

 

FOR each director nominee

 

 

 

 

 

 

 

 

Proposal 

Advisory Vote on Named Executive Officer Compensation

 

 

Board Recommendation

The Board of Directors recommends a vote FOR approval of the non-binding resolution on executive compensation noted below.

PROPOSAL SUMMARY

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and narrative descriptions that accompany those tables in this Proxy Statement, is hereby approved.”

In accordance with Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), we are seeking an advisory vote on a non-binding resolution from our stockholders on the compensation of our executive officers whose compensation is included in the Summary Compensation Table of this Proxy Statement (our “named executive officers”). This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices, as disclosed under the “Executive Compensation” section of this Proxy Statement.

At our Annual Meeting held in 2018, our stockholders approved the compensation of our named executive officers as disclosed in our 2018 Proxy Statement in a non-binding “say on pay” vote by over 98% percent of the votes cast. Although the vote is non-binding, the Board of Directors and the Compensation Committee value the opinion of our stockholders, and will consider the outcome of the vote when making future compensation decisions for our named executive officers. We hold an advisory “say on pay” vote every year based on a previous advisory vote regarding frequency.

As described in more detail in the “Compensation Discussion and Analysis” section of this Proxy Statement, we have structured our executive compensation program to attract, engage and retain talented individuals and motivate them to create long-term stockholder value by achieving performance objectives and strategic goals and appropriately managing risk. Our program is designed to:

·

Closely link compensation with company financial performance targets and achievement of individual objectives

·

Drive our key business strategies

·

Align the interests of our executives with our stockholders

·

Provide competitive compensation opportunities that attract, engage and retain talented people

In the section of this Proxy Statement entitled “Compensation Discussion and Analysis,” we describe our executive compensation programs in more detail, including the philosophy and business strategy underpinning the programs, the individual design elements of the compensation programs, and information about how our compensation plans are administered. We encourage stockholders to review this section of the Proxy Statement.

Our compensation programs consist of elements designed to complement each other and reward achievement of short-term and long-term objectives linked to financial performance metrics. We have chosen the selected metrics to align the compensation of our named executive officers to our business strategy.

 

 

 

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The Compensation Committee regularly reviews best practices related to executive compensation to ensure a close alignment between our business strategy and executive compensation opportunities. Over the past several years, under the leadership of our Compensation Committee, we have made a number of modifications to the structure of our executive compensation programs to ensure that the proportion of short- and long-term annual incentive compensation that is based upon objective business performance results has remained significant, and maintain a close alignment between business performance measures for incentive compensation awards and our company’s core strategic objectives.

For 2018, the Compensation Committee set financial performance target levels for short-term incentive compensation awards that required significant year-over-year improvement over strong 2017 results. The financial performance target levels set by the Compensation Committee for the long-term incentive compensation awards with the three-year performance period beginning in 2018 will also require significant improvement and sustained high level of performance relative to our 2017 results.

As illustrated by these actions, the Compensation Committee has strived to structure our executive compensation practices in a manner that is performance-based with a view towards maximizing long-term stockholder value. Our Compensation Committee and the Board of Directors believes that the policies and programs described in the “Compensation Discussion and Analysis” section of this Proxy Statement are effective in achieving our strategic objectives and have contributed to our positive financial performance.

Vote Required

In order for this proposal to be adopted by stockholders, at least a majority of the votes cast at the Annual Meeting in person or by proxy by the stockholders entitled to vote on the matter must be voted in its favor.

Effect of Proposal

Since the required vote is advisory, the result of the vote is not binding upon the Board of Directors and will not require the Board of Directors or the Compensation Committee to take any action regarding our executive compensation practices. The Board of Directors and the Compensation Committee value the opinions of our stockholders as expressed through their votes and other communications. Although the resolution is non-binding, the Board of Directors and the Compensation Committee will carefully consider the outcome of the advisory vote on named executive officer compensation and those opinions when making future compensation decisions.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

Our compensation programs are designed to pay for performance, aligning our executive officers’ goals with the interests of our stockholders, while allowing us to attract and retain skilled executives to deliver business results. For 2018, we continued to administer our existing short- and long-term incentive compensation programs in alignment with our financial and operational strategies. A significant portion of our named executive officers’ compensation is directly related to our business results and share performance. This ensures a close correlation of the financial interests of our named executive officers with the interests of our stockholders.

 

 

 

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The achievement of the performance metrics used in our incentive compensation plans in 2018 are set forth in the table below.  For a description of the performance metrics and adjustments, see — “Performance Metrics Used in our Incentive Compensation Plan.” Please see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10‑K for 2018 for a description of our 2018 financial results.

 

 

 

 

 

 

 

 

Performance Metrics

 

 

 

 

    

 

 

 

 

 

 

 

 

Short-Term Incentive Compensation

    

2018 Target

    

2018 Results (1) 

    

EBITDA (in millions)

 

$

229.4

 

$

226.1

 

EBIT Margin

 

 

10.0

%  

 

9.5

%  

Average Operating Working Capital (AOWC)

 

 

13.3

%  

 

15.6

%  

 

 

 

 

 

 

 

 

Long-Term Incentive Compensation

 

2016 - 2018
Target

    

2016 - 2018
Results (1)
 

 

Cumulative Diluted EPS from Continuing Operations (EPS)

 

$

6.6

 

$

8.8

 

Average Return On Invested Capital (ROIC)

 

 

15.0

%  

 

12.9

%  


(1)

EBITDA, EBIT Margin, and AOWC results were adjusted to eliminate the financial impact of the adoption of ASC 606 Revenue Recognition rules and acquisitions completed in 2018.  EBITDA and EBIT Margin results were also adjusted to eliminate M&A transaction costs and the financial impact of restructuring charges. EPS results were adjusted to account for the one-time charges from the impact of the Tax Cuts and Jobs Act, the financial impact of the adoption of ASC 606 Revenue Recognition rules, and restructuring charges in 2018.

Our 2018 performance-based compensation metrics for our short-term incentive compensation awards to our named executive officers had targets that required year-over-year growth in our earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and year-over-year improvements in our earnings before interest and taxes (“EBIT”) margin and average operating working capital as a percent of sales (“AOWC”). Demonstrating our pay-for-performance philosophy, our 2018 financial performance and individual performance impacted performance-based compensation as follows:

Our performance with respect to EBITDA, EBIT margin, and AOWC was below their target performance levels, and resulted in management incentive plan (“MIP”) awards less than the target level, with the EBITDA metric having the most significant impact on those awards. The 75% portion of MIP awards based on these performance metrics paid out at 61% of the target award amounts. The remaining 25% was based on performance against personal performance objectives approved by the Board in the case of Mr. Giacomini and approved by Mr. Giacomini in the case of all other named executive officers.

2018 Short-Term Incentive Compensation Metrics

 

 

 

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We used a three year measurement period for the metrics associated with our long-term incentive plan (“LTIP”) awards made to our named executive officers in 2018, thus the performance-based compensation derived from LTIP awards will not be determinable until after the end of 2020. The metrics for performance-based LTIP awards issued in 2018 established targets that require growth in cumulative EPS and strong average operating return on invested capital (“ROIC”) results over the three year period ending on December 31, 2020.

The three year performance period for the performance RSUs granted in 2016 ended on December 31, 2018.  In February 2019, the Compensation Committee evaluated the results of the three-year performance period for the performance RSUs granted in 2016.  We achieved cumulative EPS of $8.79 over the three-year performance period, which represents 200% of our goal for cumulative EPS, and 12.9% average ROIC over the three-year performance period, which represents 61% of our goal for average ROIC, respectively. The cumulative EPS measure is weighted 70% and the average ROIC measure is weighted 30%.  As a result, the performance RSUs for the 2016 – 2018 performance period were earned at 158% of target.

2016 – 2018 Long-Term Incentive Compensation Metrics

 

 

Picture 1

Picture 2

 

2018 Compensation Highlights

Highlighted below are features of our executive compensation program that we continued in 2018, consistent with our philosophy of aligning executive compensation opportunities with the interests of our stockholders.

·

Maintained strong incentive plan emphasis on business results. For 2018, 75% of the MIP award that could be earned by our executive officers was based on improvement in key business performance metrics closely tied to achievement of our Elevate strategic objectives (EBITDA, EBIT margin and AOWC), and 60% of the value of LTIP awards issued to our executive officers in 2018 was based on improvement in EPS and ROIC over a three year period.

·

Set financial targets to require continued performance improvement. Following a strong year in which our overall performance exceeded 2017 target levels and resulted in MIP awards above target, our Compensation Committee established 2018 performance targets requiring continued significant additional year-over-year growth in EBITDA, improvement in EBIT margin and reductions in AOWC. The LTIP awards issued to our executive officers in 2018 set aggressive targets for cumulative three-year growth in EPS while sustaining a high level of ROIC.

·

Balance division performance targets and full company performance targets for named executive officers with division management roles. For 2018, performance targets for MIP awards for our named executive officers who manage business divisions were weighted 15% – 30% on corporate performance and 70% – 85% on division performance in order to

 

 

 

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appropriately balance the objectives established for the divisions these executives manage while still providing meaningful incentives for their contributions to the success of overall corporate performance objectives.

Principles of our Executive Compensation Program

Picture 6

Our compensation program is designed around the following principles:

·

Executive compensation is performance-based. Our executive compensation program closely links a substantial portion of an executive’s compensation with company financial performance targets and achievement of individual objectives. We encourage pay for performance with a short-term management incentive program (MIP) that provides for cash payments based on achievement of financial, operational and strategic goals. Annual MIP awards are calculated based on a formula that is weighted 75% to business results and 25% to performance against individual objectives, or PPIs. Our long-term incentive plan (LTIP) awards are predominantly performance-based, with 60% of long-term incentive compensation awards tied to the achievement of financial performance objectives over a three-year period.

·

Performance metrics are designed to promote achievement of stretch objectives but not to incentivize undue risk-taking by our executive management team. The performance metrics in our incentive compensation plans are designed to create incentives to drive our key business strategies in our Elevate strategic plan. The performance metrics are intended to correlate with enterprise value growth and earnings growth.

·

Long-term compensation incentives represent a significant portion of executive compensation. At-risk long-term compensation in the form of equity-based LTIP grants, 60% of which are contingent on financial performance metrics over a three-year period, along with stock ownership guidelines, align the interests of our executives with our stockholders and provide proper motivation for enhancing both short-term and long-term stockholder value.

·

Compensation opportunities are competitive. We seek to provide competitive compensation opportunities that attract and retain talented people. We target the 50th percentile or median level of the market for all elements of compensation with the possibility of above market short-term incentive and long-term incentive payments for outstanding performance.  We target above the 50th percentile in select cases on all elements of compensation where appropriate based on individual experience, impact and performance.

 

 

 

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The following table illustrates what we do and what we do not do, consistent with our executive compensation principles:

 

 

 

WHAT WE DO

 

High percentage of executive compensation is tied to performance with caps on all incentive plan payouts.

Performance metrics are designed to promote achievement of stretch objectives and alignment with value creation.

We target the 50th percentile or median level of the market for all elements of executive compensation against an appropriate peer group, and in select cases we target above the 50th percentile where appropriate based on individual experience, impact and performance.

Each of our executive officers is required to comply with stock ownership guidelines.

Our compensation programs give our Compensation Committee the right to “claw back” awards in the event of conduct prejudicial to the company or a restatement of our financial results.

 

WHAT WE DON’T DO

 

x

Our executive severance agreements do not include excise tax gross-up provisions.

x

Our executive severance agreements do not provide single-trigger change-in-control severance benefits.

x

Our incentive programs do not encourage excessive risk taking.

x

We do not allow our directors, executive officers or other employees to engage in any hedging or pledging transactions involving JBT securities.

x

We do not allow re-pricing of stock option awards without stockholder approval.

x

No payouts below threshold level performance.

x

We do not grant excessive perquisites to executives.

In addition to direct compensation in the form of base salaries, short-term incentive cash awards and long-term equity awards, we provide various forms of indirect compensation. Each of our named executive officers is eligible for severance and change in control payments upon termination in certain circumstances pursuant to individual change in control agreements and an executive severance plan. These agreements are designed to ensure we can attract and retain executive talent and to permit our senior executives to remain focused on value creation for stockholders in the event of a potential change-in-control event. We also provide retirement benefits (primarily via defined contribution plans) and a limited number of perquisites to our named executive officers. All of these program designs are periodically reviewed against our peer group practices by our Compensation Committee with the assistance of the Committee’s independent compensation consultant. None of our named executive officers have employment agreements.

Compensation Setting Process

Our Compensation Committee makes all final compensation decisions regarding our named executive officers. Each of our compensation plans and agreements for executive officers was reviewed and approved by our Compensation Committee. All of the members of our Compensation Committee are independent directors as defined by the listing requirements of the New York Stock Exchange. Under its charter, our Compensation Committee has the authority to engage the services of outside consultants, experts and others to assist the committee’s fulfillment of its responsibilities. In 2018, the Compensation Committee engaged Meridian, an independent compensation consultant, to provide expertise on pay philosophy, prevailing market practices and relevant regulatory mandates and assist the Committee’s efforts to make compensation decisions that were aligned with the interests of our stockholders. Our Chief Executive Officer and our Executive Vice President, Human Resources also provide input on compensation programs and policies and our Chief Executive Officer makes recommendations to the Compensation Committee with regard to compensation for our named executive officers other than himself.

 

 

 

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Allocation of Pay Between Short- and Long-Term

Our compensation programs are designed in a manner that provides incentives to our named executive officers to achieve short- and long-term financial, operating and strategic objectives. To foster a long term view among our executive officers (i.e., longer than twelve months), our compensation programs provide longer term incentives in the form of equity incentive compensation with a three-year vesting requirement and a variable performance-based component. The ultimate value of these long term incentives to an executive depends upon our financial performance over a three year period and on the market value of the equity after the end of the vesting period. That value is largely dependent upon our company’s future performance and market dynamics.

As shown in the table below, 57% of the target compensation of our Chief Executive Officer and, on average, 47% of the target compensation of our other named executive officers was linked to short-term and long-term performance based incentives for 2018. An additional 25% of our Chief Executive Officer’s target compensation, and 17% (on average) of our other named executive officers’ target compensation consist of time-based LTIP awards and is tied to the value of our Common Stock at the end of the three-year vesting periods. These time-based LTIP awards are at risk of forfeiture until the vesting date. These equity grants, in combination with the three year performance period and our executive stock ownership requirements, reflects the program’s goals of rewarding our named executive officers for long-term performance — which aligns the interests of our named executive officers with the interests of our stockholders.

 

 

 

CEO Target Compensation Allocated to “At Risk”
Performance-Based Compensation

   

Other NEO Target Compensation Allocated to “At Risk”
Performance-Based Compensation

Picture 16

 

Picture 40

(1)

The amounts shown for “At Risk” Performance-Based Compensation include MIP cash incentives based on target award levels and performance-based LTIP incentives based on grant date fair value. Those target award levels are also used in the calculation of percentages of total compensation.

 

 

 

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Our compensation philosophy is to set total target compensation for our named executive officers near the 50th percentile of compensation for similar positions at peer group companies. For our named executive officers, total target compensation includes base pay, annual cash incentive compensation (MIP), and long-term incentives (LTIP) in the form of time and performance-based RSUs. We utilize comprehensive compensation surveys to compare each element of pay and total target compensation for each of our named executive officers against compensation of comparable positions at peer companies. Each named executive officer’s total target compensation opportunity generally is designed to approximate target benchmark levels, with differences based on individual experience, impact and performance. The allocation between the elements of compensation — base pay, annual cash incentive compensation and long-term equity award value — may vary from the market in individual cases, but is established in a way that keeps total target compensation consistent with the market.

When it determined 2018 compensation levels for our named executive officers in February 2018, the Compensation Committee utilized compensation survey data and publicly disclosed proxy data supplied to the Committee by its independent consultant, Meridian. The Compensation Committee reviews this external market benchmarking data to compare our executive officer compensation against executive officer compensation paid by a peer group of industrial manufacturing and service companies. This group includes companies that are of similar size and includes companies that are engaged in the food or transportation businesses that we believed we would compete with across some of our businesses for customers, suppliers, executive talent and, ultimately, investors, and which provides a representative sample for comparison of executive pay levels, design practices, and financial and stock performance.

The revenue of these companies ranged from $662 million to $2.75 billion as of 2017 fiscal year end, with a median of $1.46 billion. Although the companies included in the survey varied in revenue size and market capitalization, the survey utilized regression analysis to develop size-adjusted values for each element of compensation. The Compensation Committee reviews the peer group annually. For 2018 named executive officer compensation, the peer group consisted of the following 24 industrial companies*, which was approved by the Compensation Committee after consulting with Meridian, our independent compensation consultant.

 

 

AAR Corp.

IDEX Corporation

Albany International Corp.

Kaman, Inc.

Altra Industrial Motion Corp.*

The Middleby Corporation

Applied Industrial Technologies, Inc.

Moog Inc.

Barnes Group

Mueller Water Products, Inc.

Briggs & Stratton Corporation

Standex International Corporation

Chart Industries, Inc.

Tennant Company

CIRCOR International, Inc.*

Titan International Inc.

Curtiss-Wright Corporation

TriMas Corporation

EnPro Industries, Inc.

Valmont Industries, Inc.

Federal Signal Corporation

Welbilt, Inc.

Hillenbrand Inc.

Woodward, Inc.

*These companies were removed from the peer group as of August 2018 and replaced by Crane Co. and Rexnord Corporation

 

 

 

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Performance Metrics Used in our Incentive Compensation Plan

Incentive compensation awards to our named executive officers in 2018 were based on performance targets tied to our year-over-year growth in EBITDA, year-over-year improvements in EBIT margin and AOWC, and our cumulative EPS and average ROIC over a three-year period. For the named executive officers with divisional responsibilities, the performance targets were tied to a blend of their divisions’ year-over-year improvement in EBITDA, EBIT margin and AOWC and overall corporate performance on such measures.

A description of each of these metrics is as follows:

·

EBITDA is operating income plus depreciation and amortization. EBITDA growth is one of our primary internal performance measures designed to align long-term incentive opportunities with our internal benchmark for generating operating cash flow.

·

EBIT margin is operating income as a percentage of total revenue. We utilize EBIT margin as a performance metric because it measures our ability to convert revenue into income.

·

Average operating working capital (AOWC) expresses the sum of our inventory (on a first-in-first out basis) plus accounts receivable minus accounts payable minus advance payments as a percentage of our total revenue. We use AOWC to measure the efficiency of our business in managing working capital levels, since it measures the conversion cycle of working capital to cash.

·

Cumulative EPS is the sum of the most recent three years of after-tax earnings generated from continuing operations divided by the total number of our diluted shares of our outstanding Common Stock. As an incentive measure, we believe that linking sustained EPS growth to compensation helps us drive our executive officers to improve overall earnings.

·

Average operating ROIC takes a three year average of the sum of our net income and after tax net interest (or tax impacted EBIT) as a percentage of our average invested capital. Our average invested capital is the average month end sum of equity, debt, accumulated other comprehensive pension income (or loss) and cash equivalents. We utilize average operating ROIC as a performance metric because it measures how efficiently and effectively we use capital to generate profits.

Since our financial performance metrics are based on year-over-year improvements as well as cumulative or average improvements over a three year period, we preserve flexibility to adjust certain of these measures to account for the cumulative effect of unusual or non-recurring items, such as changes in tax law or accounting principles, charges relating to restructuring our businesses, significant acquisitions and divestitures, and foreign exchange movements. To set our 2018 targets, for purposes of making year over year comparisons we used our 2017 results as the 2017 baseline for use in 2018 compensation decisions. In the determination of our 2018 results for the year-over-year performance-based incentive compensation awards, we made certain adjustments to account for special items.  With respect to short-term performance metrics, we excluded the financial impact of restructuring charges, the impact of the transition to ASC 606 Revenue Recognition rules, M&A transaction costs, and the impact of acquisitions completed in 2018. For long-term performance metrics, we excluded the financial impact of restructuring charges, the impact of the transition to ASC 606 Revenue Recognition rules, and the one-time charges from the impact of the Tax Cuts and Jobs Acts.

 

 

 

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Components of Compensation Program

The following table presents in summary form each of the components of our named executive officer’s compensation for 2018 and briefly describes the purpose and characteristics of each of these components.

 

 

 

 

 

Component

 

Purpose

 

Characteristics

Base Salary

 

Salary for level of responsibility, experience and sustained individual performance.

 

Fixed cash component targeted at our peer group median (size adjusted); base salary can vary from market due to individual performance, contribution, experience, time in position and internal equity considerations.

 

 

 

 

 

Management
Incentive Plan (“MIP”) Awards

 

Focus management on achievement of financial performance metrics and objectives important to the success of their divisions (as applicable) and our overall performance.

 

A  target MIP award is designed to provide peer group median cash compensation opportunities (size adjusted) when combined with base salary; significantly exceeding targets allows achievement of upper quartile cash compensation compared with peers.

 

75% is based on business performance measures (“BPI”).

 

25% is based on personal performance measures (“PPI”).

 

 

 

 

 

Long-Term Incentive Plan (“LTIP”) Awards

 

Aligns with our long-term strategic plan, focuses management on the achievement of important performance metrics and provides a retention incentive.

 

A target LTIP award is designed to provide competitive total compensation compared to our peer group when combined with base salary and target MIP award.

 

Delivered through performance-based RSUs (60%) and time-based RSUs (40%).

 

Ultimate value depends on our performance against pre-established financial goals measured over a three year period, and our stock price at the end of a three year vesting period.

 

 

 

 

 

Perquisites/ Health Wellness Incentives

 

Provides executive with a limited amount of selected benefits commensurate with those provided to executives at peer group companies.

 

Benefits which personally benefit an employee, are not related to job performance, and are available to a limited group of employees.

 

 

 

 

 

Retirement Benefits

 

Provide an appropriate level of income upon retirement.

 

U.S. retirement benefits under a tax-qualified defined contribution plan (401(k) plan) and a non-qualified defined contribution plan.

 

Additional U.S. retirement benefits for two of our long tenured executive officers through a defined benefit pension plan and a related supplemental executive retirement plan (both frozen as of December 31, 2009).

 

 

 

 

 

Potential Payments Upon Change in Control

 

Encourages executives to operate in the best interests of stockholders in light of a potential change in control

 

Contingent in nature; payable only if an executive officer’s employment is terminated or adversely impacted as specified under the change in control provisions of various plans

 

 

 

 

 

Other Potential
Post-Employment Payments

 

Potential payments under scenarios of death, disability, retirement, termination without cause.

 

Contingent in nature; payable only if executive officer’s employment is terminated under the arrangements of various plans.

 

 

 

 

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Base Salary

The Compensation Committee reviews competitive market data provided by its independent consultant, Meridian, in its process of determining the appropriate base salary for each executive officer.  The base salaries are established relative to the market data based on the particular experience, contribution, and proficiency of each executive officer in their role.

The Compensation Committee reviewed the base salaries of the named executive officers relative to the market information provided by Meridian for their respective positions based on their experience, proficiency and contribution, and accordingly approved merit increases ranging from 1% to 14% increase for each of them in 2018. Mr. Deck and Mr. Fernandez received 10% and 14% increases respectively in base salary in order to bring them closer to the targeted 50th percentile. We emphasize performance-based compensation for our named executive officers, therefore we generally provide only modest annual increases in base salary, unless an executive’s base salary is significantly lower than the comparable executive compensation market data provided by Meridian.

Annual Cash Incentive Compensation

Our annual cash management incentive compensation plan (“MIP”) component of our Incentive Compensation Plan is a variable cash-based incentive plan designed to focus management on performance factors important to our overall performance and to the continued success of our business units.

Payout Opportunity

Target percentage amounts for annual MIP awards are based on survey market data and peer company proxy statements. For 2018, the Compensation Committee set the annual MIP award target percentages (expressed as percentage of base salary) for each of our named executive officers. The highest percentage (110%) was assigned to our Chief Executive Officer and our other named executive officers had MIP target percentages ranging from 55% to 70% of base salary.

For 2018, our annual MIP opportunity was weighted primarily toward business performance (75%), referred to as the “BPI” component, and secondarily to individual performance (25%), referred to as the “PPI” component. Our Compensation Committee reviews and approves BPI targets for our MIP award program annually utilizing measures it believes correlate highly to enterprise value growth and total stockholder returns. For MIP awards for all of our executive officers in 2018, we utilized year-over-year growth in EBITDA and year-over-year improvement in EBIT margin and AOWC. For our named executive officers employed in corporate and FoodTech division roles (Messrs. Giacomini, Deck, Sternlieb, and Fernandez), EBITDA was weighted at 50% of the total BPI component, with EBIT margin and AOWC each weighted at 25%.  For our named executive officer employed in our AeroTech division (Mr. Burdakin), EBITDA was weighted at 40% of the total BPI component, with EBIT margin weighted 25% and AOWC weighted at 35%. Annual MIP award opportunities for our executive officers who had division management responsibilities also utilized division MIP targets for EBITDA, EBIT margin and AOWC. For Mr. Burdakin, business performance against corporate BPI targets was weighted 30% and against division BPI targets was weighted 70%. For Mr. Sternlieb, business performance against corporate BPI targets was weighted 15%, against FoodTech BPI targets was weighted 15%, and against Protein business BPI targets was weighted 70%.  For Mr. Fernandez, business performance against corporate BPI targets was weighted 15%, against FoodTech BPI targets was weighted 15%, and against Liquid Foods business BPI targets was weighted 70%.

The Compensation Committee established a range from “0.00” (below threshold) to “2.50” (performance far in excess of plan) for performance against each of these measures. Achievement of target performance for any metric would result in a “1.00” BPI rating. There was a minimum level for each measure below which a participant receives 0% of the target award, and correspondingly a maximum performance level which, even if exceeded, would not generate more than 250% of the BPI portion of the target award. In between the minimum and maximum performance targets, the performance level of each measure is plotted on a predefined curve which indicates the percent of the target award that should be awarded. The performance achieved on each measure is added together and divided by the number of measures to determine the actual percentage payout of the target award amount.

 

 

 

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The following charts provide the performance curves for the corporate BPI targets for 2018:  

 

 

 

 

Picture 23

Picture 41

 

 

 

Picture 42

 

The slope of each of the curves reflects the Compensation Committee’s desire to reward above-target performance. As performance increases from threshold to target, the awards increase proportionately, and when performance exceeds the target level of performance, certain awards increase more rapidly.

Determination of BPI Payout

Messrs. Giacomini and Deck received a corporate-wide BPI rating which was based on our consolidated results. Messrs. Burdakin, Sternlieb, and Fernandez have division management roles, and for 2018 their BPI rating was based in part on consolidated results and in part on the results of the divisions in which they served. For Mr. Burdakin, business performance against corporate BPI targets was weighted 30% and against AeroTech division BPI targets was weighted 70%. For Mr. Sternlieb, business performance against corporate BPI targets was weighted 15%, against FoodTech BPI targets was weighted 15%, and against Protein business BPI targets was weighted 70%.  For Mr. Fernandez, business performance against corporate BPI targets was weighted 15%, against FoodTech BPI targets was weighted 15%, and against Liquid Foods business BPI targets was weighted 70%.

 

 

 

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For 2018 MIP awards, the following table shows the overall company and division performance measures used for BPI and our performance against each of these performance measures (adjusted in the manner described under “Performance Metrics Used in our Incentive Compensation Plans” above).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Company Performance Measures 

 

 

0% Payout of

 

 

100% Payout of

 

 

250% Payout

 

 

2018

 

 

 

BPI

 

    

Target BPI 

    

 

Target BPI 

    

 

of Target BPI 

    

 

Performance 

    

Weight 

    

Payout 

EBITDA

$

200.4

 

$

229.4

 

$

262.4

 

$

226.1

 

50

%  

0.87

EBIT Margin

 

8.5

%  

 

10.0

%  

 

11.2

%  

 

9.5

%  

25

%  

0.69

AOWC

 

15.2

%  

 

13.3

%  

 

10.9

%  

 

15.6

%  

25

%  

0.00

Total BPI Rating

 

  

 

 

  

 

 

  

 

 

 

 

  

 

0.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FoodTech Division Performance Measures 

 

 

0% Payout of

 

 

100% Payout of

 

 

250% Payout

 

 

2018

 

 

 

BPI

 

    

Target BPI

    

 

Target BPI

    

 

of Target BPI

    

 

Performance

    

Weight

    

Payout

EBITDA

$

191.7

 

$

215.7

 

$

247.2

 

$

201.7

 

50

%  

0.42

EBIT Margin

 

11.6

%  

 

13.1

%  

 

14.6

%  

 

12.3

%  

25

%  

0.42

AOWC

 

10.2

%  

 

8.7

%  

 

6.6

%  

 

11.3

%  

25

%  

0.00

Total BPI Rating

 

  

 

 

 

 

 

 

 

 

 

 

  

 

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AeroTech Division Performance Measures 

 

 

0% Payout of

 

 

100% Payout of

 

 

250% Payout

 

 

2018

 

 

 

BPI

 

    

Target BPI

    

 

Target BPI

    

 

of Target BPI

    

 

Performance

    

Weight

    

Payout

EBITDA

$

53.4

 

$

59.4

 

$

67.5

 

$

63.9

 

40

%  

1.84

EBIT Margin

 

10.4

%  

 

11.4

%  

 

12.4

%  

 

11.2

%  

25

%  

0.84

AOWC

 

28.5

%  

 

26.0

%  

 

23.0

%  

 

26.4

%  

35

%  

0.83

Total BPI Rating

 

 

 

 

 

 

 

  

 

 

 

 

  

 

1.23

Our 2018 financial performance results impacted the MIP as follows:

·

Our overall performance with respect to EBITDA, EBIT margin, and AOWC was below target performance levels, and resulted in Management Incentive Plan (MIP) awards below the target level, with the EBITDA metric having the most significant impact on those awards. The 75% portion of MIP awards for Messrs. Giacomini and Deck were based on these performance metrics and paid out at 61% of the target award amounts.

Picture 4

·

Our FoodTech division’s performance with respect to EBITDA, EBIT margin, and AOWC was below target performance levels, resulting in a BPI of 32%. The 75% portion of the MIP award for Messrs. Sternlieb and Fernandez weighted performance 15% for the FoodTech division.

·

Our Protein business’s performance with respect to EBITDA exceeded its target performance level. Performance with respect to EBIT margin was achieved at the target level, while AOWC improvement did not reach the target, resulting in a BPI of 125%. The 75% portion of the MIP award for Mr. Sternlieb, weighting performance 15% for the FoodTech division performance metrics, 70% for the Protein business performance metrics, and 15% for the overall Company performance metrics, paid out at 101% of the target award level.

·

Our Liquid Foods business’s performance did not reach the threshold performance level, resulting in a BPI of 0%. The 75% portion of the MIP award for Mr. Fernandez, weighting

 

 

 

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performance 15% for the FoodTech division performance metrics, 70% for the Liquid Foods business performance metrics, and 15% for the overall Company performance metrics, paid out at 14% of the target award level.

·

Our AeroTech division’s performance with respect to EBITDA exceeded the target performance level, while performance with respect to EBIT margin and AOWC improvement was between threshold and target performance levels, and resulted in a BPI of 123%. The 75% portion of the MIP award for Mr. Burdakin, weighting performance 70% for the AeroTech division performance metrics and 30% for the overall Company performance metrics for these measures paid out at 104% of the target award level.

Our resulting BPI multiple was then multiplied by our individual named executive officer’s MIP award target percentage to determine the BPI portion of the MIP award payout to that executive.

Determination of PPI Payout

The PPI rating is based on the achievement by an executive officer of individual annual objectives. A broad range of factors, generally qualitative in nature, but others that are quantitative, may be considered in this PPI rating assessment, including corporate and operations level cost control, strategic initiatives, operational objectives regarding market development and growth, margin improvement and revenue growth as well as objectives relating to restructuring, integration and safety. These objectives differ from those utilized to determine performance ratings for establishing an executive officer’s base salary described above under “Components of Compensation Program — Base Salary.” For our 2018 MIP program, our Compensation Committee approved a PPI range from 0.00 to 2.00. For individual PPI objectives, the level of performance and resulting individual ratings on objectives required to achieve a PPI rating of 2.00 is quite high and unusual.

Our Chief Executive Officer provided the Compensation Committee his recommendation with respect to the PPI ratings for the performance of individual objectives for each of the other named executive officers. For our Chief Executive Officer, the Compensation Committee solicits feedback from the independent directors, evaluates his performance in executive session, and uses that assessment to recommend his PPI rating to the independent directors. In determining our Chief Executive Officer’s individual performance PPI rating, the independent directors evaluated his performance on a variety of objectives tied to:

·

Culture and Values;

·

JBT Strategy and Deployment;

·

JBT Operational Improvement Framework and Execution; and

·

Succession Planning

Our named executive officers received PPI ratings ranging from 1.05 to 1.75 for 2018, with an average rating of 1.49. On average, the PPI portion of the annual MIP award compensation represents less than 9% of the total compensation paid to our named executive officers (as set forth in the Summary Compensation Table below).

Calculation of Total MIP Payout

To illustrate how the annual MIP awards are determined under our compensation programs, making the assumption that an executive officer has a base salary of $400,000, a 60% target bonus, a BPI rating of 150% and a PPI rating of 125%, the executive officer’s annual MIP compensation payment would be calculated in the following manner:

 

 

 

BPI

 

 

$400,000 (base salary) x .60 (target bonus) x .75 (BPI weighting) x 150% (Corporate BPI achievement)

$

270,000

PPI

 

 

$400,000 (base salary) x .60 (target bonus) x .25 (PPI weighting) x 125% (Individual PPI rating)

$

75,000

Total MIP Award Compensation:

$

345,000

 

 

 

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The following table sets forth the potential MIP awards for 2018 at threshold, target and maximum performance levels for our named executive officers, and their actual MIP payouts driven by our overall financial performance in 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Target MIP

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual MIP

 

Award as a

 

 

 

 

 

 

 

 

 

 

 

 

 

Payout as a

 

% of

 

MIP Award Opportunity 

 

Actual MIP

 

% of

Name 

Base Salary

    

Threshold

    

Target

    

Maximum

    

Payout

    

Target

Thomas W. Giacomini

110

%  

 

$

 0

 

$

944,790

 

$

2,243,876

 

$

845,587

 

90

%

Brian A. Deck

70

%  

 

$

 0

 

$

318,364

 

$

756,115

 

$

264,242

 

83

%

David C. Burdakin

55

%

 

$

 0

 

$

221,226

 

$

525,412

 

$

253,415

 

115

%

Paul E. Sternlieb

60

%