DEF 14A
KAMAN CORP filed this Form DEF 14A on 03/03/2017
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Prior to 2011, the Company's practice had been to grant new executive officers their first three-year LTIP award on the annual grant date that followed their appointment. This practice was followed with respect to Messrs. Keating and Steiner, and resulted in there being no LTIP award payout until at least three years after first becoming an executive officer. In the interim, new executives received stock options and restricted stock grants instead of LTIP awards. In February 2011, the Committee determined that, in order to better align a new executive officer's incentive compensation with the Company's performance against the Russell 2000 companies and in lieu of the stock options and restricted stock awards that were previously granted to new executive officers, the initial grants would include LTIP awards with one- and two-year performance cycles, as well as the traditional three-year performance cycle. These LTIP awards would correspondingly use one, two and three-year Russell 2000 index performance periods to determine the LTIP payouts, and would be of similar value to the stock options and restricted stock awards that were previously granted to new executive officers.
2016 LTIP Awards. In 2016, the Committee granted cash-based LTIP awards for the 2016-2018 performance period to each of our Named Executive Officers. The Committee granted an additional stock-based LTIP award covering the same performance period to Mr. Steiner that is intended to create an additional financial incentive for him to remain in the employ of the Company until he reaches age 62. Mr. Steiner currently is 59 years of age. Even if the performance criteria are achieved, the award vests in full only if Mr. Steiner remains employed by the Company until he reaches age 62, as described in more detail below. The target award opportunities for the named executive officers for the 2016-2018 LTIP performance period are as follows:
TARGET LTIP AWARDS FOR THE 2016-2018 PERFORMANCE CYCYLE
 
 
 
 
Annual LTIP Awards
 
Special Retention LTIP Award
Named Executive Officer
 
2016 Base Salary(1)
 
Cash Award Opportunity as a % of Base Salary
 
Award Value at Target(2)
 
Stock Award Opportunity as a % of Base Salary
 
Award Value at Target(2)
Neal J. Keating
 
$960,000
 
300%
 
$2,880,000
 
 
Robert D. Starr
 
$440,000
 
150%
 
$660,000
 
 
Gregory L. Steiner
 
$455,000
 
150%
 
$682,500
 
10%
 
$45,500
Steven J. Smidler
 
$364,000
 
150%
 
$546,000
 
 
Ronald M. Galla
 
$377,750
 
90%
 
$339,975


 
Shawn G. Lisle
 
$350,000
 
105%
 
$367,500
 
 
________________
(1)
Reflects base salary as of the date of grant.
(2)
Reflects estimated value of LTIP awards at 100% of target.
The Committee used the following performance measures and weightings for the LTIP awards set forth above, as compared against the benchmarks indicated, based on its determination of their importance as indicators of the Company’s long-term success:
Performance Factor
 
Benchmark
 
Weighting
Three-year average return on investment
 
Three-year average return on investment for the Russell 2000 index companies
 
33%
Average annual compound growth in earnings per share
 
Three-year average annual compound growth in earnings per share for the Russell 2000 index companies
 
33%
Three-year average total return to shareholders
 
Three-year average total return to shareholders for the Russell 2000 index companies
 
34%
Prior to 2014, the weightings were 40% for both three-year average return on investment and average compounded growth in earnings per share and 20% for three-year average total return to shareholders. In 2014, the Committee amended the weightings to those set forth above, in order to increase the emphasis on total return to shareholders.
We use the Russell 2000 Index companies for our long-term financial performance benchmarks for the same reason that we use them for our annual cash incentive awards – the Committee believes that these are the kinds of companies against which an investor would likely compare the Company’s performance when considering investment alternatives.
Company performance in the bottom quartile of the Russell 2000 earns no cash incentive award payment for the performance goal; performance at the 25th percentile results in a cash incentive award at 25% of target for the performance goal; performance

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