DEF 14A
KAMAN CORP filed this Form DEF 14A on 03/03/2017
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Three-year average return on investment. Our modified three-year average return on total investment was 8.1%, which represents the average for the three-year performance period commencing January 1, 2014, and ending December 31, 2016. The Company defines total investment (capitalization) as total shareholders' equity plus total long-term debt (including current portion). Return on investment is net earnings divided by total investment as follows:
 
(In Millions)
  
2014
 
2015
 
2016
Net Earnings
$67.8
 
 
$69.9
 
 
$67.1
 
Total Equity
$527.6
 
 
$552.6
 
 
$574.1
 
Total Debt
$273.5
 
 
$233.2
 
 
$417.9
 
Total Capitalization
$801.1
 

$785.8
 
 
$992.0
 
Return on investment
8.5
%
 
8.9
%
 
6.8
%

Average Annual Compounded Growth in Earnings per Share. Our modified average annual compounded growth in diluted earnings per share represents the average diluted earnings per share growth rate over the three-year performance period, which is calculated as follows:
 
2011
 
2012
 
2013
 
3 Year
Average
 
2014
 
2015
 
2016
 
3 Year
Average
Modified, Diluted EPS
$1.88
 
 
$2.03
 
 
$2.09
 
 
$2.00
 
 
$2.49
 
 
$2.55
 
 
$2.46
 
 
$2.50
 
Average Compounded Annual Growth = ($2.50 ÷ $2.00)1/3 - 1 = 7.7%.
Three-Year Average Total Return to Shareholders. Return to shareholders combines share price appreciation and dividends reinvested. The total return to shareholders is based on a computation that is obtained from Standard & Poor’s Compustat, an independent research service. The Company’s average total return to shareholders for the performance period from 2014-2016 was 29.4%.
Financial performance below the 1st quartile results in no award payment; performance at the 1st quartile results in an award payment at 25% of target; performance at the median results in an award payment at 100% of target; and performance at the top of, or above, the 3rd quartile results in a maximum award payment at 200% of the target. Interpolation is used to determine payments for financial performance within these quartiles.
LTIP award payouts, if any, are generally made in June of the year following the end of the performance period. This payment date gives the Committee time to collect and analyze the complete performance results of the Russell 2000 companies for the performance period. As explained above, amounts earned for the performance period January 1, 2014 - December 31, 2016 are not yet determinable and are not reflected in the Summary Compensation Table. The Company will disclose actual payments for the performance period when they are made by filing a Current Report on Form 8-K.
The following chart compares the Company’s three-year (2014 - 2016) performance against the Russell 2000 Index companies for the same three-year period based on data available as of January 27, 2017.
KAMAN (2014-2016) VS. 3-YEAR RUSSELL 2000 (2014-2016)
 
 
 
 
 
 
 
EPS Growth (1)
 
ROI (2)
 
TSR (3)
25th Percentile
(0.8
)%
 
(2.9
)%
 
(19.7
)%
50th Percentile
10.0
 %
 
3.8
 %
 
23.9
 %
75th Percentile
22.1
 %
 
8.1
 %
 
64.9
 %
 
 
 
 
 
 
Kaman
7.7
 %
 
8.1
 %
 
29.4
 %
Russell Percentile
44.7
 %
 
75.0
 %
 
53.4
 %
_______________
(1)    Average annual compounded growth in earnings per share.
(2)    Three-year average return on investment.
(3)    Three-year average total return to shareholders.
As discussed above, the Summary Compensation Table does not include any amounts that have been accrued as expenses in relation to any of the LTIP awards that are expected to be settled in respect of the three-year performance period ended December 31, 2016 (although the table does reflect the grant date fair values of the special stock-based awards in the year of grant). We will

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