DEF 14A 1 tm212567-1_def14a.htm DEF 14A tm212567-1_def14a - none - 15.2813442s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.      )
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Filed by a Party other than the Registrant ☐
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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 Pursuant to §240.14a-12
Gates Industrial Corporation plc
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[MISSING IMAGE: lg_gatesheader-k.jpg]
April 27, 2021
Dear Gates Shareholders:
In the past year, we faced unprecedented challenges from the ongoing Covid-19 pandemic that have impacted our global economy and, more importantly, our way of life. Despite these challenges — and, in some cases, because of them — we’ve worked harder than ever to ensure the health and safety of our employees, the sustainability of our environment, the continued provision of innovative product solutions and service to our customers, and the vitality of our global communities. Our well-tested 110 year old business model, which is built around the critical nature of our products, strong customer relationships and dedicated associates around the world, is once again carrying us successfully through a difficult time. We believe the challenges of the current environment have made us stronger as a company and will provide additional building blocks for our collective success over the next 100 years.
Against this backdrop, we are pleased to invite you to attend the 2021 Annual General Meeting of Shareholders of Gates Industrial Corporation plc to be held on Thursday, June 17, 2021, at 10:00 a.m. Mountain Time. In order to provide a consistent and convenient experience to all shareholders regardless of location, we will hold the 2021 Annual General Meeting of Shareholders virtually through a live audiocast at www.virtualshareholdermeeting.com/GTES2021. The attached Notice of Annual General Meeting of Shareholders and Proxy Statement describe the formal business to be transacted at the meeting and provide detail on the virtual meeting format, including how to register.
In accordance with the Securities and Exchange Commission’s rule allowing companies to furnish proxy materials to their shareholders over the internet, we are primarily furnishing proxy materials to our shareholders of ordinary shares electronically, rather than mailing paper copies of the materials (including our Annual Report on Form 10-K for the fiscal year ended January 2, 2021). On or about April 27, 2021, we mailed certain shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access these materials and how to vote their shares. Such notice provides instructions on how you can request a paper copy of these materials by mail, by telephone or by email. If you requested your materials via email, the email contains voting instructions and links to the materials on the internet. You may also read, print and download our annual report and our proxy statement at www.proxyvote.com.
As a shareholder of Gates Industrial Corporation plc, you play an important role for our company by considering and taking action on these matters. We appreciate the time and attention you invest in making thoughtful decisions. Regardless of whether you plan to participate in the meeting, we encourage you to vote your shares as promptly as possible.
Sincerely,
[MISSING IMAGE: sg_ivojurek-k.jpg]
Ivo Jurek
Chief Executive Officer
 

 
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GATES INDUSTRIAL CORPORATION PLC
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
June 17, 2021
Notice is hereby given that the 2021 Annual General Meeting of Shareholders (the “AGM” or the “Meeting”) of Gates Industrial Corporation plc (“Gates” or the “Company”) will be held virtually on Thursday, June 17, 2021, at 10:00 a.m., Mountain Time at www.virtualshareholdermeeting.com/GTES2021. The AGM will be held for the following purposes:
1.
To elect the nine director nominees identified in this Proxy Statement.
2.
To conduct an advisory vote to approve named executive officer compensation.
3.
To conduct an advisory vote on the Company’s directors’ remuneration report (the “Directors’ Remuneration Report”) contained in Appendix A of this Proxy Statement in accordance with the requirements of the United Kingdom (the “U.K.”) Companies Act 2006 (the “Companies Act”).
4.
To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending January 1, 2022.
5.
To re-appoint Deloitte LLP as the Company’s U.K. statutory auditor under the Companies Act (to hold office until the conclusion of the next annual general meeting at which accounts are laid before the Company’s shareholders).
6.
To authorize the Audit Committee of the Board of Directors of the Company (the “Board” or “Board of Directors”) to determine the remuneration of Deloitte LLP in its capacity as the Company’s U.K. statutory auditor.
7.
To transact such other business as may properly come before the AGM or any adjournment thereof.
The above proposals are more fully described in the Proxy Statement following this Notice, which shall be deemed to form a part of this Notice. The Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021 (the “2020 Annual Report”) accompanies the Proxy Statement following this Notice. These documents may also be accessed free of charge at www.proxyvote.com
You can vote and attend the AGM if you were a shareholder of record at the close of business on April 23, 2021.
On the day of the meeting, please visit www.virtualshareholdermeeting.com/GTES2021 and enter the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card. Online access to the audiocast will open approximately fifteen minutes prior to the start of the Annual Meeting. There will be no physical meeting location. The meeting will only be conducted via live audiocast.
It is important that your shares be represented and voted at the AGM. We encourage you to vote by internet or telephone, or complete, sign and return your proxy prior to the AGM even if you plan to attend.
By Order of the Board of Directors,
[MISSING IMAGE: sg_ivojurek-k.jpg]
Ivo Jurek
Chief Executive Officer
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 17, 2021:
The Notice of Annual General Meeting of Shareholders, Proxy Statement and 2020 Annual Report are available at www.proxyvote.com
 
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PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
June 17, 2021
10:00 a.m. Mountain Time
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING
What is the purpose of the AGM?
At the AGM, shareholders will act upon the matters outlined in the notice of meeting on the cover page of this Proxy Statement. These matters include: the election of nine directors, an advisory vote to approve named executive officer compensation, an advisory vote on the Directors’ Remuneration Report, ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending January 1, 2022, re-appointment of Deloitte LLP as the Company’s U.K. statutory auditor under the Companies Act, and a proposal to authorize the Audit Committee of the Board to determine the remuneration of Deloitte LLP in its capacity as the Company’s U.K. statutory auditor. Management will be available to respond to questions from shareholders.
Who is entitled to vote at the AGM?
Only the Company’s shareholders of record at the close of business on April 23, 2021 (the “record date” for the Meeting), are entitled to receive notice of and to participate in the virtual AGM. If you were a shareholder of record on that date, you will be entitled to vote electronically all of the shares you held on that date at the Meeting, or any postponement(s) or adjournment(s) of the Meeting. As of the record date, there were 291,605,323 ordinary shares in the capital of the Company in issue, all of which are entitled to be voted at the Meeting. The Company expects the proxy materials and the Notice of Internet Availability of Proxy Materials to be mailed and/or made available to shareholders eligible to vote on or about April 27, 2021.
Any corporation that is a shareholder of record may by resolution of its directors or other governing body authorize such person as it thinks fit to act as its representative at the AGM and the person so authorized shall (on production of a certified copy of such resolution at the Meeting) be entitled to exercise the same powers on behalf of the corporation as that corporation could exercise if it were an individual shareholder of the Company. In the case of joint holders of a share, the vote of the senior holder who tenders a vote, whether in person (virtually) or by proxy, shall be accepted to the exclusion of the vote or votes of the other joint holder or holders, and seniority shall be determined by the order in which the names of the holders stand in the register.
What are the voting rights of the holders of the Company’s ordinary shares?
Holders of ordinary shares are entitled to one vote per share on each matter that is submitted to shareholders for approval.
Who can attend the Meeting?
All shareholders as of the record date may virtually attend the AGM.
How can I attend and vote at the Meeting?
To attend the AGM, please visit www.virtualshareholdermeeting.com/GTES2021 and enter the 16-digit control number included in your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card. Online access to the audiocast will open approximately fifteen minutes prior to the start of the Annual Meeting. There will be no physical meeting location. The meeting will only be conducted via live audiocast. If you have any questions about accessing the virtual meeting website for the AGM, please contact Broadridge VSM support at 844-986-0822 / International: 303-562-9302. If you encounter any technical difficulties with the virtual meeting during the log in or meeting time, please call the technical support number that will be posted on the virtual meeting log in page. Rules governing conduct at the AGM will be posted on the virtual meeting platform along with an agenda.
 
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Will I be able to participate in the virtual Meeting on the same basis I would be able to participate in a live annual general meeting?
The AGM will be held in a virtual meeting format only and will be conducted via live audiocast. The virtual meeting format for the AGM will enable full and equal participation by all of the Company’s shareholders from any place in the world at little to no cost. The Company believes that holding the AGM virtually provides the opportunity for participation by a broader group of shareholders while reducing environmental impacts and the costs associated with planning, holding and arranging logistics for in-person meeting proceedings.
The Company designed the format of the virtual AGM to ensure that its shareholders who attend the AGM will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance shareholder access, participation and communication through online tools. To ensure such an experience, the Company will provide shareholders with the ability to submit appropriate questions real-time through the meeting website.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Beneficial owners.   If your shares are held for you in the name of your broker, bank or other nominee, your shares are held in “street name” and you are considered the “beneficial owner.” As such, these proxy materials or the Notice of Internet Availability of Proxy Materials are being made available or forwarded to you by your broker, bank or other nominee, who is considered the shareholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares in accordance with the voting instruction form provided by your bank, broker or other nominee.
Shareholders of record.   If you are registered on the register of members of the Company in respect of ordinary shares, you are considered, with respect to those shares, the shareholder of record, and these proxy materials are being sent directly to you by the Company.
What constitutes a quorum?
The presence at the Meeting, in person (virtually) or by proxy, of the holders of ordinary shares representing at least the majority of the voting rights of all shareholders entitled to vote at the Meeting will constitute a quorum, permitting the Meeting to conduct its business. If a quorum is not present at the Meeting, the director(s) present may adjourn the Meeting to a specified time and place not less than one day after the original date.
What vote is required to approve each item?
Subject to disenfranchisement in accordance with applicable law and/or the Company’s Articles of Association, each of the resolutions shall be decided on a poll in accordance with the Company’s Articles of Association whereby each shareholder present in person (virtually) or by proxy or by representative (in the case of a corporate shareholder) is entitled to one vote for every ordinary share held. The resolutions proposed in proposals 1 through 6 will be proposed as ordinary resolutions, which means that, assuming a quorum is present, each such resolution will be approved by a simple majority of the votes cast in favor thereof.
With respect to the non-binding advisory resolutions in proposal 2 (regarding the advisory approval of named executive officer compensation) and proposal 3 (regarding approval of the Directors’ Remuneration Report), the results of the vote are advisory and will not be legally binding on the Board or any committee thereof to take any action or refrain from taking any action. However, the Board values the opinions of the shareholders as expressed through advisory votes and will carefully consider the outcome of the advisory votes.
Certain proposals on which you are being asked to vote are customary or required for public limited companies incorporated in England and Wales to present to shareholders at each annual general meeting. These proposals may be unfamiliar to shareholders accustomed to proxy statements for companies organized in other jurisdictions. Specifically, proposals 3, 5 and 6 are customary proposals in accordance with English law.
 
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The inspector of election for the AGM shall determine the number of ordinary shares represented at the Meeting, the existence of a quorum and the validity and effect of proxies, and shall count and tabulate ballots and votes and determine the results thereof. Proxies received but marked as abstentions and broker non-votes that are present and entitled to vote will be included in the calculation of the number of shares considered to be present at the Meeting for purposes of determining a quorum. A “broker non-vote” occurs when a person holding shares in street name, such as through a brokerage firm, does not provide instructions as to how to vote those shares and the broker lacks the authority to vote uninstructed shares at its discretion. Abstentions and “broker non-votes” will have no effect on any of the proposals as abstentions and broker non-votes are not considered votes cast and will not be counted as a vote either for or against these proposals.
What are the Board’s recommendations?
The Board of Directors recommends a vote FOR each of the proposals submitted for shareholder vote. Unless contrary instructions are indicated on the enclosed proxy, all shares represented by valid proxies received pursuant to this solicitation (and which have not been revoked in accordance with the procedures set forth below) will be voted FOR proposals 1 through 6 and, in accordance with the recommendation of the Board of Directors, FOR or AGAINST all other matters that may properly come before the AGM. In the event a shareholder specifies a different choice by means of the enclosed proxy, such shares will be voted in accordance with the specification made.
How do I vote?
If you are a shareholder of record, you may use any of the following methods to vote:
By Written Proxy.   All shareholders of record who received proxy materials by mail can vote by returning the proxy card. If you received the proxy materials electronically, you may request a proxy card at any time by following the instructions on the voting website.
By Telephone or Internet.   All shareholders of record can vote by telephone from the U.S. and Canada, using the toll-free telephone number on the proxy card, or through the internet using the procedures and instructions described on the proxy card.
In Person.   All shareholders of record may vote in person (virtually) during the AGM.
If you are a street-name holder (that is, if you hold your shares through a bank, broker, or other nominee), you must vote in accordance with the voting instruction form provided by your bank, broker or other nominee. The availability of telephone or internet voting will depend upon your bank’s, broker’s or other nominee’s voting process.
All advance votes must be received by 11:59 Eastern Time on June 16, 2021. The return of a completed proxy card, or the submission of proxy instructions via the internet or by telephone, will not prevent a shareholder of record from attending and voting at the AGM. If you are a shareholder of record and have appointed a proxy but also attend the AGM and vote in person (virtually), your proxy appointment will automatically be terminated.
Except as set out in the Proxy Statement, all communications concerning shareholder of record accounts, including address changes, name changes, share transfer requirements and similar issues should be submitted to the Company’s transfer agent, Computershare Trust Company, N.A. at (800) 942-5909 or in writing at 250 Royall Street, Canton, MA 02021. No other means of communication will be accepted. In particular, you may not use any electronic address provided either in the Proxy Statement or in any related documents to communicate with the Company for any purpose other than those expressly stated.
Are my shares voted if I do not provide a proxy?
If you are a shareholder of record and do not provide a proxy, you must attend the AGM in order to vote. If you hold ordinary shares through an account with a bank or broker, your shares may be voted by the bank or broker on some matters if you do not provide voting instructions. Under New York Stock Exchange (“NYSE”) rules governing broker non-votes, proposals 1, 2 and 3 are considered non-routine matters for purposes of broker non-votes, and a broker will lack the authority to vote uninstructed shares
 
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at its discretion on such proposals. Proposals 4, 5 and 6 are considered routine matters, and a broker will be permitted to exercise its discretion to vote uninstructed shares on these proposals. This means that, if you do not provide voting instructions on proposal 4, 5 or 6, your broker may nevertheless vote your shares on your behalf with respect to the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending January 1, 2022, the re-appointment of Deloitte LLP as the Company’s U.K. statutory auditor for the year ending January 1, 2022 and to authorize the Audit Committee to determine the remuneration of Deloitte LLP, but cannot vote your shares on any other matters being considered at the AGM.
Can I change my vote after I return my proxy card?
Yes. Shareholders of record may revoke a proxy and/or change their vote prior to the completion of voting at the AGM by:

signing another proxy card or voting instruction form with a later date and delivering it to the Corporate Secretary of the Company, 1144 Fifteenth Street, Denver, Colorado 80202 by 11:59 Eastern Time on June 16, 2021;

voting again over the internet or by telephone by 11:59 Eastern Time on June 16, 2021;

voting in person (virtually) at the AGM; or

notifying the Corporate Secretary in writing by 11:59 Eastern Time on June 16, 2021.
Street name holders who wish to revoke or change their votes should contact the bank, broker or other nominee that holds their shares.
Who pays for costs relating to the proxy materials and AGM?
The Company pays for the costs of preparing, assembling and mailing this Proxy Statement, the Notice, the 2020 Annual Report, the proxy card and the UK annual report and accounts for the year ended January 2, 2021, and the cost of posting the proxy materials on a website. In addition to the use of mail, the Company’s directors, officers and employees may solicit proxies personally and by telephone, facsimile and other electronic means. They receive no compensation in addition to their regular salaries for this work. The Company may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy material to their principals and to request authority for the execution of proxies. The Company may reimburse these persons for their expenses in so doing.
Shareholders’ requests under section 527 of the Companies Act
Under section 527 of the Companies Act, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish a statement on a website setting out any matter relating to:

the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be laid before the AGM; or

any circumstance connected with an auditor of the Company ceasing to hold office since the last annual general meeting.
The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act. Where the Company is required to place a statement on a website under section 527 of the Companies Act, it must forward the statement to the Company’s auditor no later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under section 527 of the Companies Act to publish on a website.
 
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PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors unanimously recommends that shareholders vote “FOR” each nominee to serve as director.
What am I voting on?
The Company’s Articles of Association provide that each director shall retire from office at each annual general meeting of the Company and shall be eligible for re-election. The first proposal for consideration at the AGM is the election of each of the nine candidates named below as a director for a one-year term expiring at the 2022 annual general meeting of shareholders. Each of these candidates is currently a director. Each nominee has agreed to serve if elected, and the Board has no reason to believe that any nominee will be unable to serve.
Upon the recommendation of the Nominating and Governance Committee, the Board has nominated each of the nine directors identified below as a nominee for a one-year term expiring at the 2022 annual general meeting of shareholders or until his or her successor is duly elected and qualified, or until his or her earlier retirement, resignation, disqualification, removal or death. If any director nominee should become unavailable for election prior to the AGM, an event that currently is not anticipated by the Board, either the proxies will be voted in favor of the election of a substitute nominee or nominees proposed by the Board, or the number of directors may be reduced accordingly.
Set forth on the following pages is biographical and other background information concerning each nominee for director, as well as a discussion of the specific experience, qualifications and skills of each director that helped lead the Board to conclude that each respective director should continue to serve as a member of the Board.
The form of shareholder resolutions for this proposal are set forth under the heading “Shareholder Resolutions for the 2021 Annual General Meeting” in this Proxy Statement.
Composition of the Board of Directors
The Company’s business and affairs are managed under the direction of its Board of Directors, which consists of nine directors. The Board has affirmatively determined that all of the directors, except Mr. Jurek who is the Chief Executive Officer of the Company, are independent under the NYSE listing standards. We are party to a shareholders agreement with certain affiliates of The Blackstone Group Inc. (“Blackstone” or the “Sponsor”). This agreement grants the Sponsor the right to designate nominees to the Board of Directors subject to the maintenance of certain ownership requirements in the Company. See “Certain Relationships and Related Person Transactions — Shareholders Agreement.” Two of the current directors, Ms. Kahr and Mr. Simpkins, are designees of the Sponsor.
Director Backgrounds
The following presents the names, ages as of April 15, 2021 and selected biographical information for each of the director nominees.
Name
Age
Position
Neil P. Simpkins
54
Director, Chair of the Board
Ivo Jurek
56
Director, Chief Executive Officer
James W. Ireland, III
66
Director
Julia C. Kahr
42
Director
Terry Klebe
66
Director
Stephanie K. Mains
53
Director
Wilson S. Neely
65
Director
Alicia Tillman
45
Director
Molly P. Zhang
59
Director
 
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Neil P. Simpkins has served as a director of Gates Industrial Corporation plc since November 2017 and as the Chair of the Board since January 2020. He has served as a director of Gates entities since 2014. He is a Senior Managing Director of Blackstone’s Corporate Private Equity Group. Since joining Blackstone in 1998, Mr. Simpkins has led the acquisitions of TRW Automotive, Vanguard Health Systems, TeamHealth, Apria, Summit Materials, Change Healthcare and Gates. Before joining Blackstone, Mr. Simpkins was a Principal at Bain Capital. While at Bain Capital, Mr. Simpkins was involved in the execution of investments in the consumer products, industrial, healthcare and information industries. Prior to joining Bain Capital, Mr. Simpkins was a consultant at Bain & Company in the Asia Pacific region and in London. He currently serves as a director of Apria, Inc., Change Healthcare, Inc. and TeamHealth, Inc. and previously served as a director of Summit Materials, Inc. from 2009 to 2018.
Ivo Jurek has served as a director of Gates Industrial Corporation plc since its formation in September 2017 and has served as the Chief Executive Officer and a director of Gates entities since May 2015. Mr. Jurek oversees and manages all of Gates’ departments and lines of products and services globally. As Chief Executive Officer, Mr. Jurek has led Gates to expand product lines in fluid power and power transmission, and strategically grow market share through acquisitions and joint ventures, while driving improved financial performance through increased plant efficiencies. Mr. Jurek has a deep understanding of new technology development, manufacturing, distribution and international business markets. Prior to joining Gates, Mr. Jurek served as President of Eaton Electrical, Asia Pacific beginning in November 2012 until May 2015. During that time, Mr. Jurek had management oversight of Eaton Electrical’s Asia Pacific portfolio which included optimizing manufacturing plants, identifying new markets, and assisting with the overall performance of the company. Prior to that, Mr. Jurek served as Group President for Cooper Power Systems — Cooper Bussmann, with complete oversight of all business activities there and in significant general management positions in International Rectifier Corporation and TRW Inc.
James W. Ireland, III has served as a director of Gates Industrial Corporation plc since November 2018. From 2011 until his retirement in 2018, Mr. Ireland served as President and Chief Executive Officer of General Electric Africa, a digital and industrial company focused on transforming the industry with machines that have software defined solutions. From 2007 until 2011, Mr. Ireland served as the President and Chief Executive Officer of General Electric’s Asset Management Group. From 1999 to 2007, Mr. Ireland was President of NBC Universal Television Stations and Network Operations (a General Electric wholly-owned subsidiary), one of the world’s leading media and entertainment companies in development, production, and marketing of entertainment, news and information to a global audience.
Julia C. Kahr has served as a director of Gates Industrial Corporation plc since its formation in September 2017 and has served as a director of Gates entities since 2014. She is a Senior Managing Director of Blackstone’s Corporate Private Equity Group. Since joining Blackstone in 2004, she has been involved in the execution of Blackstone’s investments in SunGard, Encore Medical, DJ Orthopedics, Summit Materials, Precision Medicine Group and Gates. Before joining Blackstone, she was a Project Leader at the Boston Consulting Group, where she worked with companies in a variety of industries, including health care, financial services, media and entertainment, and consumer goods. She is also the sole author of Working Knowledge, a book published by Simon & Schuster in 1998. Ms. Kahr currently serves as a director of Precision Medicine Group, Barry-Wehmiller Companies, Inc., Sheltering Arms and BRIC Arts Media and previously served as a director of Summit Materials, Inc. from 2009 to 2017.
Terry Klebe has served as a director of Gates Industrial Corporation plc since December 2017 and has served as a director of Gates entities since 2016. Mr. Klebe was previously Senior Vice President and Chief Financial Officer of Cooper Industries plc, a multinational industrial manufacturing company with 2010 revenues of  $5.1 billion, until his retirement in February 2010. Following his retirement as Chief Financial Officer, Mr. Klebe remained on the executive management team as Vice Chairman at Cooper Industries plc from February 2010 until April 2011. Mr. Klebe also served on the board of directors of Fairchild Semiconductors and as a head of the company’s Audit Committee until its sale in September 2016.
Stephanie K. Mains has served as a director of Gates Industrial Corporation plc since February 2019. Ms. Mains is currently the CEO of LSC Communications-MCL, an Atlas Holdings portfolio company. Prior to that Ms. Mains was the interim Chief Executive Officer of GE Power Conversion from April 2020 until December 2020, and the President and CEO of ABB Electrification Products Industrial Solutions, a 2018 acquisition from GE, from November 2015 until January 2019. She served as Vice President of GE
 
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Distributed Power Global Services from March 2013 until October 2015, and held positions of increasing responsibility from General Manager to Vice President for GE Energy-Power from March 2006 until March 2013. Prior to joining GE Energy, Ms. Mains spent 17 years across multiple GE businesses in financial and transformational leadership positions, including CFO for GE Aviation Services Material Solutions. She currently serves on the board of directors for Diamondback Energy, Inc., Stryten Manufacturing, LLC, and LCI Industries.
Wilson S. Neely has served as a director of Gates Industrial Corporation plc since April 2020. He is currently Director of Strategic Initiatives for InterNex Capital, an asset-based, digital lender providing innovative and flexible working capital financing to small- and medium-sized businesses. Prior to that, from 1991 until his retirement in January 2020, Mr. Neely served as a Partner of Simpson Thacher & Bartlett LLP with a corporate practice primarily in the areas of mergers and acquisitions and capital markets. While at Simpson Thacher & Bartlett LLP, Mr. Neely advised on numerous business combination transactions, including leveraged buyouts, recapitalizations and strategic partnerships between private equity funds and corporate partners. In addition, he oversaw numerous capital markets transactions. He currently serves on the board of directors and select committees for Readworks, myFace, Historic Hudson Valley, and the University of Texas Law School Foundation.
Alicia Tillman has served as a director of Gates Industrial Corporation plc since April 27, 2021. She has over 20 years of experience in global marketing, strategy, operations, and digital transformation in public and private companies. Most recently, Ms. Tillman worked at SAP from 2015 through March 2021, where she spent four years in the role of Executive Vice President and Global Chief Marketing Officer, leading a marketing organization of over 2,000 employees. At SAP, she was a key contributor to the acquisition and integration of multiple companies, rebuilt the technology foundation to scale digital and demand generation capabilities and developed the brand story. Prior to joining SAP, she worked for American Express from 2004 through 2015, serving as head of Marketing, Public Affairs and Business Services. She currently serves on the board of directors of RainFocus.
Peifang Zhang (also known as Molly P. Zhang) has served as a director of Gates Industrial Corporation plc since July 2020. She is retired from Orica Ltd., a global mining services company, where she served in a number of senior executive roles, including Vice President, Asset Management and Vice President/Manufacturing executive, Mining Systems. Before joining Orica, Dr. Zhang spent 22 years with Dow Inc. where she held executive positions including Managing Director of SCG-Dow Group, Country General Manager of Dow Thailand, Regional Manufacturing Director of Dow Asia Pacific and Global Business Vice President for Dow Technology Licensing and Catalyst. Dr. Zhang serves on the board of directors of Enerkem and Aqua Metals, Inc., and is a member of the supervisory board at GEA Group AG in Germany.
Director Qualifications
When considering whether directors have the experience, qualifications, attributes or skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Board of Directors focuses primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. The Company believes that its directors provide an appropriate mix of experience and skills relevant to the size and nature of the business. In particular, the Board of Directors considered the following important characteristics, among others:

Mr. Simpkins’ significant financial and business experience, including as a Senior Managing Director in the Corporate Private Equity Group at Blackstone and former Principal at Bain Capital.

Mr. Jurek’s extensive business and industry experience as well as his experience leading Gates since May 2015.

Mr. Ireland’s substantial management expertise, including as former Chief Executive Officer of General Electric Africa and General Electric’s Asset Management Group.

Ms. Kahr’s extensive knowledge of a variety of different industries and her significant financial and investment experience from her employment with Blackstone, including as a Senior Managing Director.
 
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Mr. Klebe’s financial acumen and business experience, including as former Chief Financial Officer and then Vice Chairman of the Board of Cooper Industries plc.

Ms. Mains’ leadership and operational experience from her service in various senior management roles, including as former President and CEO, ABB Electrification Products Industrial Solutions and Vice President of GE Distributed Power Global Services.

Mr. Neely’s strong knowledge of corporate governance and his legal experience as a retired Partner from Simpson Thacher & Bartlett LLP in the areas of mergers and acquisitions and capital markets.

Ms. Tillman’s executive experience in global marketing, strategy, operations and digital transformation, including digital and demand generation. The Company’s Chief Executive Officer recommended Ms. Tillman to the Nominating and Governance Committee as a nominee for inclusion in this proxy statement.

Ms. Zhang’s global business experience and her strong understanding of the Asia market, as well as her expertise in the industrials sector. The Company’s Chief Executive Officer recommended Ms. Zhang to the Nominating and Governance Committee as a nominee for inclusion in this proxy statement.
 
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CORPORATE GOVERNANCE
Board Highlights

Board composition

Size of Board: 9 members

Number of independent directors: 8 (beginning in 2021)

Committee independence: 100% (beginning in 2021)

Commitment to Board refreshment and diversity

Average director tenure in years: 3 years

New directors in the past two years: 3

Percent female: 44%

Percent ethnically diverse: 11%

Highly engaged directors

Board and committee meetings held in 2020: 20

Attendance rate: 100%

During 2020, directors received routine briefings and participated in ongoing discussions with management regarding the Company’s response to the Covid-19 pandemic.
Directors’ Independence and Controlled Company Exception
As of the record date, April 23, 2021, the Sponsor held more than a majority of the voting power of the Company’s ordinary shares eligible to vote in the election of the directors. As a result, the Company is a “controlled company” within the meaning of the NYSE corporate governance standards. Under these NYSE corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements that (1) a majority of our Board of Directors consist of independent directors, (2) the Board of Directors has a compensation committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, and (3) the Board of Directors has a nominating and governance committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. A company whose shares are listed on the NYSE that ceases to be a controlled company may continue to rely on these exemptions during transition periods prescribed by the NYSE.
The Company has previously utilized such exemptions, but beginning in 2020, a majority of the Board now consists of independent directors. Beginning in 2021, the Compensation Committee and the Nominating and Governance Committee are now comprised entirely of independent directors with written charters addressing each such committee’s purpose and responsibilities. Thus, at this time, the Company no longer relies on these controlled company exemptions.
The Board has affirmatively determined that all of its directors, except Mr. Jurek who is the Chief Executive Officer of the Company, are independent under the NYSE listing standards.
Board Meetings, AGM and Attendance
Directors are expected to attend Board meetings and meetings of committees on which they serve. In 2020, the Board of Directors met a total of six times. Overall director attendance at meetings of the Board and its committees was 100%, with each individual director attending all meetings of the Board and the committees on which he or she served during his or her tenure in 2020. It is the policy of the Board of Directors that directors are invited to attend the AGM, although such attendance is not mandatory. In 2020, one director, Ivo Jurek, attended the AGM.
 
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Board Structure
The Board believes that independent leadership is important. The Board also believes that, depending on what appears to be in the best interests of the Company and its shareholders at any given point in time, it should be able to choose whether the roles of Chair of the Board and Chief Executive Officer are combined or separate. Therefore, the Board does not have a policy on whether the role of Chair and Chief Executive Officer should be separate or combined and, if it is to be separate, whether the Chair should be selected from the independent directors. Currently, Mr. Neil Simpkins serves as Chair of the Board and Mr. Ivo Jurek serves as Chief Executive Officer.
In cases where the Board believes that the Chair and Chief Executive Officer roles should be combined or when the Chair is otherwise not “independent” pursuant to the Company’s Corporate Governance Guidelines, the independent directors may elect from among themselves an individual who acts as Lead Director. The Lead Director shall help coordinate the efforts of the independent and non-management directors in the interest of ensuring that objective judgment is brought to bear on sensitive issues involving the management of the Company and, in particular, the performance of senior management.
The Board’s Role in Management’s Succession Planning
The Board of Directors is responsible for reviewing the succession plan relating to the Chief Executive Officer and other executive officers that is developed by management. Directors are expected to have a thorough understanding of the characteristics necessary for a Chief Executive Officer to execute on a long-term strategy that optimizes operating performance, profitability and shareholder value creation. As part of its responsibilities under its charter, the Compensation Committee oversees the evaluation of management and the management continuity planning process. Additionally, it reviews the succession plans relating to the Chief Executive Officer and other executive officers and makes recommendations to the Board with respect to the selection of individuals to occupy these positions. The ongoing succession process is designed to reduce vacancy, transition and readiness risks and develop strong leadership quality and executive bench strength.
Board Committees
The Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The composition and responsibilities of each committee are described below. The Board of Directors may also establish from time to time any other committees that it deems necessary or desirable. Members serve on these committees until such member’s successor is duly elected and qualified or until such member’s earlier resignation, removal, retirement, disqualification or death.
Each of the standing committees of the Board of Directors discussed below operate under written charters, which are available on the Company’s website at www.gates.com under “About Us: Investor Relations: Governance: Governance Documents.” The information contained on, or accessible from, the website is not part of this Proxy Statement by reference or otherwise.
Audit Committee
The Audit Committee currently consists of Mr. Ireland, Mr. Klebe, Ms. Mains and Ms. Zhang, with Mr. Klebe serving as chair. The Audit Committee is responsible for, among other things:

selecting and hiring independent auditors, and approving the audit and non-audit services to be performed by the independent auditors;

assisting the Board of Directors in evaluating the qualifications, performance and independence of the independent auditors;

assisting the Board of Directors in monitoring the quality and integrity of the Company’s financial statements and its accounting and financial reporting;

assisting the Board of Directors in monitoring the Company’s compliance with legal and regulatory requirements;
 
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reviewing guidelines and policies governing the process by which management assesses and manages the Company’s exposure to risk, including the Company’s major financial and regulatory risk exposures and the steps management takes to monitor and control such exposures;

reviewing the adequacy and effectiveness of internal controls over financial reporting;

assisting the Board of Directors in monitoring the performance of the internal audit function;

reviewing with management and the independent auditors the Company’s annual and quarterly financial statements;

establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, auditing matters, and material legal and regulatory matters, as well as the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and

preparing the audit committee report required by the SEC to be included in the annual proxy statement.
The SEC rules and NYSE rules require the Company to have an Audit Committee comprised of solely independent directors. The Board has affirmatively determined that Mr. Ireland, Mr. Klebe, Ms. Mains and Ms. Zhang qualify as independent directors under the NYSE listing standards and the independence standards of Rule 10A-3 of the Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”). In addition, the Board has determined that Mr. Ireland, Mr. Klebe, Ms. Mains and Ms. Zhang are each an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended from time to time (the “Securities Act”).
The Audit Committee held six meetings during 2020.
Compensation Committee
The Compensation Committee currently consists of Ms. Kahr, Mr. Klebe and Mr. Simpkins, with Ms. Kahr serving as chair. The Compensation Committee is responsible for, among other things:

reviewing and approving corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluating the Chief Executive Officer’s performance in light of those goals and objectives and, either as a committee or together with the other independent directors (as directed by the Board of Directors), determining and approving the Chief Executive Officer’s compensation level based on such evaluation;

reviewing and approving, or making recommendations to the Board of Directors with respect to, the compensation of the other executive officers, including annual base salary, bonus and equity-based incentives and other benefits;

overseeing the evaluation of management and the management succession planning process;

reviewing and recommending the compensation of directors;

reviewing and discussing annually with management the Company’s “Compensation Discussion and Analysis” disclosure required by SEC rules;

preparing the compensation committee report required by SEC rules to be included in the annual proxy statement; and

reviewing and making recommendations with respect to incentive and equity compensation plans.
The charter of the Compensation Committee permits the committee to delegate any or all of its authority to one or more subcommittees; provided, however, that when appropriate to satisfy the requirements of Section 16b-3 of the Exchange Act, any such subcommittee shall be composed solely of two or more members that have been determined to be “Non-Employee Directors” within the meaning of Rule 16b-3 under the Exchange Act. The charter of the Compensation Committee also permits the committee to delegate to one or more officers the authority to make awards to employees other than any officer subject to Section 16 of the Exchange Act under the incentive compensation or other equity-based plan, subject to compliance with
 
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the plan, the Company’s articles of association and the laws of the jurisdiction of its organization. In addition, the Compensation Committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable.
See “Executive Compensation — Compensation Discussion and Analysis — Executive Compensation Determination Process” for a description of the process for determining compensation, including the role of the executive officers and independent compensation consultant.
The Compensation Committee held five meetings during 2020.
Nominating and Governance Committee
The Nominating and Governance Committee currently consists of Mr. Ireland, Ms. Kahr, Mr. Neely and Mr. Simpkins, with Mr. Simpkins serving as chair. The Nominating and Governance Committee is responsible for reviewing the qualifications of potential director candidates and recommending to the Board those candidates to be nominated for election to the Board. The Nominating and Governance Committee may consider (a) minimum individual qualifications, including strength of character, mature judgment, familiarity with the Company’s business and industry, independence of thought and an ability to work collegially with the other members of the Board and (b) all other factors it considers appropriate, which may include age, gender and ethnic and racial background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations such as antitrust issues, corporate governance background, various and relevant career experience, relevant technical skills, relevant business or government acumen, financial and accounting background, executive compensation background and the size, composition and combined expertise of the existing Board. In addition, although the Nominating and Governance Committee considers diversity of viewpoints, background and experiences, the Board does not have a formal diversity policy. The Nominating and Governance Committee will consider the qualification of any candidate nominated by a shareholder in accordance with the Companies Act. The Nominating and Governance Committee will evaluate candidates recommended by shareholders on a substantially similar basis as it considers other nominees.
The Nominating and Governance Committee is also responsible for, among other things:

overseeing the evaluation of the Board of Directors;

reviewing developments in corporate governance practices and developing and recommending a set of corporate governance guidelines; and

recommending members for each committee of the Board of Directors.
The Nominating and Governance Committee held three meetings during 2020.
The Board’s Role in Risk Oversight
The Board exercises direct oversight of strategic risks to the Company, which includes regular review and evaluation of the Company’s system of financial and operational internal controls, its compliance with applicable laws and regulations, its programs and protocols to minimize data and cybersecurity risks, and its processes for identifying, assessing and mitigating other significant risks that may affect the Company.
The Committees also have certain responsibilities related to risk oversight. The Audit Committee reviews guidelines and policies governing the process by which management assesses and manages the Company’s exposure to risk, including the Company’s major financial risk exposures and the steps management takes to monitor and control such exposures. The Audit Committee also oversees the Company’s Code of Business Conduct and Ethics and other material legal and regulatory policies, including the Company’s Whistleblower Policy, and reviews reports and investigations of potential violations under such policies. The Compensation Committee oversees risks relating to the Company’s compensation policies and practices for all employees and conducts a comprehensive compensation risk assessment at least annually. The Compensation Committee has regular discussions related to human capital, including management succession planning. Each committee charged with risk oversight reports to the Board on those matters on a regular basis.
To fulfill its responsibilities related to risk oversight, the Board must understand the significant risks the Company faces and confirm management is identifying and appropriately managing and mitigating
 
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such risks. In 2020, the Company implemented a robust Enterprise Risk Management (“ERM”) program, which includes an annual risk assessment and project plan, creation of a risk register to monitor mitigation actions and identify emerging risks, on-going dialogue and collaboration among management, use of data analytics and data science methodologies, quarterly meetings on mitigation plans, and periodic reports to the Board. The ERM process is managed by a management committee called the Enterprise Risk Committee, led by the Chief Financial Officer, Chief Legal Officer, Chief Accounting Officer and Vice President of Global Internal Audit, in coordination with senior functional leaders across the Company.
With respect to information security risk oversight, the Board receives regular updates from the Company’s senior management team to assess cybersecurity and other information technology risks facing the Company and the measures the Company is taking to mitigate such risks. The Company’s approach to identifying and mitigating such risks is ongoing monitoring of all of its technology systems and a comprehensive process to ensure its technology environment is operating and maintained in accordance with best practices and security standards defined within the NIST Cybersecurity Framework. In the past three years, the Company has not experienced any material information security breaches or incurred any material expenses, penalties, or settlements related to information security breaches. The Company is externally audited against top information security standards and regulations as required by applicable law. Employees take part in a mandatory internal educational program to ensure continual awareness of new and emerging threats (which includes phishing simulations) and computer-based training that is required at the time of hire and annually thereafter. Employees are subject to information technology policies, including the Company’s Acceptable Use Policy, Dual Use Device Policy, Information Security Policy and Password Policy.
Board Education
The Company provides continuing education for directors through board materials and presentations, discussions with management, and the opportunity to attend external board education programs. In addition, beginning in 2020, all directors have access to the resources of the National Association of Corporate Directors through a Company membership.
Executive Sessions
To ensure free and open discussion and communication among the non-management directors of the Board, the non-management directors meet in executive session at most Board meetings without members of management. The Chair presides over executive sessions of non-management directors. In addition, the independent directors meet in executive session at least once a year with no members of management or directors who are not “independent” present and the independent directors designate a director from among themselves to preside at executive sessions of the independent directors.
Code of Business Conduct and Ethics and Corporate Governance Guidelines
The Company maintains a Code of Business Conduct and Ethics that applies to all of its officers, directors and employees, including the chief executive officer, chief financial officer, chief accounting officer and corporate controller, or persons performing similar functions, which is posted on its website at www.gates.com under “About Us: Investor Relations: Governance: Governance Documents.” The Code of Business Conduct and Ethics is a “code of ethics” as defined in Item 406(b) of Regulation S-K. The Company will make any legally required disclosures regarding amendments to, or waivers of, provisions of the code of ethics on its website. The information contained on, or accessible from, the website is not part of this Proxy Statement by reference or otherwise.
The Company’s Corporate Governance Guidelines set forth many of the practices, policies and procedures that provide the foundation of its commitment to strong corporate governance. The policies and practices covered in the Corporate Governance Guidelines include operation of the Board of Directors, Board structure, director independence and Board committees. The Corporate Governance Guidelines are reviewed at least annually by the Nominating and Governance Committee and are revised as necessary or appropriate. The Corporate Governance Guidelines are posted on the Company’s website at www.gates.com under “About Us: Investor Relations: Governance: Governance Documents.”
 
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Director, Officer and Employee Hedging
The Company’s insider trading policy contains prohibitions on hedging and pledging. Directors, executive officers and employees are prohibited from trading in puts or calls or similar instruments of Company stock, from engaging in short sales of Company stock and from engaging in transactions (including variable forward contracts, equity swaps, collars and exchange funds) designed to hedge or offset any decrease in the market value of Company stock. Directors, executive officers and employees are also prohibited from pledging Company stock as collateral for a loan or as part of a margin account.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended January 2, 2021 (“Fiscal 2020”), Mr. Calhoun (prior to his resignation effective January 9, 2020), Mr. Simpkins, Ms. Kahr and Mr. Klebe served on the Compensation Committee. None of these individuals has been an officer or employee of the Company or any of its subsidiaries at any time. In Fiscal 2020, none of the executive officers served as a member of the board of directors or compensation committee of any other company whose executive officer(s) served as a member of the Company’s Board or Compensation Committee. The Company and certain of its affiliates are party to certain transactions with Blackstone described in the “Related-Person Transactions Policy and Procedures” section of this Proxy Statement.
Communications with the Board of Directors
Any shareholder or other interested party may communicate with the directors, individually or as a group, the Chair or the independent directors as a group, by addressing such communications to the Corporate Secretary of the Company, 1144 Fifteenth Street, Denver, Colorado 80202, who will forward such communications to the appropriate party unless the communications are of a personal nature or not related to the duties and responsibilities of the Board of Directors, including, without limitation, junk mail, mass mailings, business solicitations, spam, surveys and routine product or business inquiries.
Shareholder Engagement
The Company values shareholder engagement and is committed to maintaining open communications with the investment community. Throughout the year, management engages with shareholders on topics including company strategy and performance, corporate governance, compensation practices and sustainability. During 2020, in addition to quarterly earnings calls, the senior management team participated in eleven investor conferences and a number of other investor meetings. These engagements typically included the Chief Executive Officer and director, Mr. Jurek, as well as the Chief Financial Officer and the Vice President of Investor Relations. The input from these engagements informs the Company’s decision-making and it intends to continue this outreach going forward.
The Company also submits an advisory vote to its shareholders on an annual basis to approve the Named Executive Officer compensation. At the 2020 AGM, approximately 99% of the votes cast were in favor of the advisory vote to approve executive compensation. The Committee took this into account when making the decisions described in the Compensation Discussion and Analysis in this proxy statement.
The Company welcomes investor interaction and feedback. The Investor Relations department is the point of contact for shareholder interaction with the Company and can be reached through www.investors.gates.com. The information contained on, or accessible from, the website is not part of this Proxy Statement by reference or otherwise.
 
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Executive Officers
The following presents the positions, ages as of April 15, 2021 and selected biographical information for each of the Company’s current executive officers (other than Mr. Jurek, whose biographical information appears above under “Director Backgrounds”).
Name
Age
Position
Cristin Bracken
53
Senior Vice President, Chief Legal Officer and Corporate Secretary
Roger Gaston
65
Executive Vice President and Chief Human Resources Officer
Grant Gawronski
58
Executive Vice President and Chief Commercial Officer
Walter Lifsey
62
Executive Vice President and Chief Operating Officer
L. Brooks Mallard
54
Executive Vice President and Chief Financial Officer
Thomas Pitstick
49
Chief Marketing Officer and Senior Vice President of Strategic Planning
Cristin Bracken has served as the Company’s Senior Vice President, Chief Legal Officer and Corporate Secretary since October 2020. Ms. Bracken joined the Company in January 2017, previously serving as its Vice President and Assistant General Counsel, Compliance and Litigation, and then serving as its interim General Counsel prior to her appointment as Chief Legal Officer. As Chief Legal Officer, Ms. Bracken is responsible for all legal functions for Gates, including securities and corporate governance, M&A, litigation, commercial, regulatory, compliance, patents and trademarks, real estate, employment and labor, and environmental matters. Ms. Bracken has 27 years of experience as a lawyer specializing in compliance, complex litigation, risk management, regulatory, commercial agreements and transactions, and employment law for public and private equity-backed corporations. Prior to joining Gates, she held senior legal leadership roles in both the oil and gas and energy trading industries at companies such as SM Energy Company, Forest Oil Corporation and Dynegy Inc. She also previously served as an Assistant District Attorney in Houston, Texas. Ms. Bracken began her legal career at Fulbright & Jaworski LLP in its Dallas office.
Roger Gaston has served as the Company’s Executive Vice President and Chief Human Resources Officer since January 2018 and previously served as Senior Vice President, Human Resources beginning in August 2016. As Chief Human Resources Officer, Mr. Gaston works to build and enhance Gates’ human resources function globally. He oversees talent management, recruiting, compensation, benefits, labor relations, maintaining a healthy workforce, and talent development. Prior to Gates, Mr. Gaston worked as Senior Vice President — Human Resources for Avaya, a multibillion-dollar enterprise telecommunications and solutions company beginning in 2006. At Avaya, Mr. Gaston oversaw all aspects of human resource management and industrial relations policies, practices and operations. Before Avaya, Mr. Gaston was a Corporate Vice President — Human Resources for Storage Technology Corp. from 2000 to 2005. Prior to Storage Technology Mr. Gaston served as the Senior Vice President, Human Resources for Toys R Us, Inc. from 1996-2000. A Chapter 11 petition for bankruptcy protection was filed by Avaya in January of 2017.
Grant Gawronski has served as the Company’s Executive Vice President and Chief Commercial Officer since December 2018. His direct commercial responsibilities include the first-fit and replacement businesses in the Americas and EMEA regions, as well as the Company’s global oil & gas business. Mr. Gawronski joined Gates in 2017 as President, Americas, and has broad leadership experience. Prior to joining the Company, Mr. Gawronski served as President, Electrical Industrial and Infrastructure for Eaton Corporation from 2012 to 2017. In that role, Mr. Gawronski oversaw a portfolio that included global oil and gas business units, the power quality business unit, and all Eaton electrical business units in Latin America and Canada. Prior to that, Mr. Gawronski served as Group President at Cooper Industries, and in significant general management positions at GE Lighting.
Walter Lifsey has served as the Company’s Executive Vice President and Chief Operating Officer since August 2015. As Chief Operating Officer, Mr. Lifsey manages and oversees all manufacturing and operations globally for Gates, including the operations function, health, safety and environmental, quality assurance, procurement and certain new product development. Prior to joining Gates, Mr. Lifsey served as Chief Operating Officer of View Inc., a world-class manufacturer of intelligent windows, where Mr. Lifsey was responsible for all aspects of manufacturing, product quality, manufacturing engineering, operational
 
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planning, and manufacturing information systems. Before his time at View, Mr. Lifsey served in various roles at Atmel Corporation beginning in 2006 before becoming Chief Operating Officer where he led global operations from May 2010 to November 2012. Prior to Atmel, he served in various senior management roles at International Rectifier Corporation and TRW Inc.
L. Brooks Mallard has served as the Company’s Executive Vice President and Chief Financial Officer since February 24, 2020. As CFO, Mr. Mallard manages Gates’ global corporate finance and accounting functions, including capital structure, resource allocation, financial reporting and the maintenance of the global internal control systems. Previously, Mr. Mallard served as the Chief Financial Officer of Henniges Automotive, a global supplier of highly engineered sealing and anti-vibration systems for the automotive market, beginning June 2019. Prior to Henniges Automotive, he served as the Executive Vice President and Chief Financial Officer of Jeld-Wen beginning in November 2014, where he helped take the company from being private equity held, through an initial public offering on the New York Stock Exchange. He also has held senior financial leadership roles with TRW Automotive, Cooper Industries plc, Thomas & Betts, and Briggs & Stratton during his career.
Thomas G. Pitstick has served as the Company’s Chief Marketing Officer and Senior Vice President of Strategic Planning since October 2020. Prior to that, he served in various leadership roles, including Chief Marketing Officer and Senior Vice President of Product Line Management, as well as Senior Vice President of Innovation since joining the Company in January 2016. Mr. Pitstick has responsibility for global marketing, company branding, corporate communications, global product line management, R&D for engine systems products, strategic planning, corporate development and M&A. Prior to joining Gates, Mr. Pitstick served as Senior Vice President of Marketing — Electrical Sector with Eaton Corporation. Prior to Eaton’s acquisition of Cooper Industries, he served as Vice President and General Manager of the Cooper Power Systems Energy Automation Solutions business unit and held various roles in Cooper’s corporate and business development functions. Before Cooper, Mr. Pitstick held a number of commercial, product line management and business development roles with technology start-up companies.
 
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) describes the compensation earned by or paid to each individual who served in the capacity of principal executive officer (“Chief Executive Officer”) or principal financial officer (“Chief Financial Officer”) during Fiscal 2020 and the three other most highly compensated executive officers serving in such capacities as of January 2, 2021 (collectively, referred to as the “Named Executive Officers”). The Named Executive Officers for Fiscal 2020 are listed below:
Name
2020 Position
Principal Executive Officer
Ivo Jurek Chief Executive Officer
Principal Financial Officer
L. Brooks Mallard Chief Financial Officer
David Wisniewski Chief Financial Officer (interim) and Chief Accounting Officer
David Naemura Chief Financial Officer (former)
Next Three Most Highly Compensated Executive Officers
Roger Gaston Chief Human Resources Officer
Grant Gawronski Chief Commercial Officer
Walter Lifsey Chief Operating Officer
Effective January 31, 2020, Mr. Naemura resigned from his role as Chief Financial Officer of the Company. Mr. David Wisniewski, the Company’s Chief Accounting Officer, served as the Chief Financial Officer on an interim basis while the Company conducted an executive search for Mr. Naemura’s replacement. Effective February 24, 2020, Mr. L. Brooks Mallard joined the Company as the new Chief Financial Officer.
Compensation Philosophy and Objectives
To ensure management’s interests are aligned with those of the shareholders, the Company emphasizes a pay-for-performance compensation philosophy. The Company believes that a significant portion of each executive’s compensation should be “at risk” and tied to overall Company and individual performance. The executive compensation program is designed to enable us to attract, motivate, reward and retain high-caliber executives who are capable of creating and sustaining value for customers and shareholders and achieving the Company’s business goals over the long term. In addition, the executive compensation program is designed to provide a fair and competitive compensation opportunity that appropriately rewards executives for their contributions to the Company’s success. As described below, the Company believes that each element of its executive compensation program aligns with this philosophy.
Executive Compensation Structure
The material elements of the executive compensation program include the following, all of which are described in detail in this CD&A:

Base salary

Annual Cash Bonus (a short-term incentive tied to the Company’s annual financial performance)

Long-Term Equity Incentives (a long-term incentive opportunity consisting of performance-based restricted stock units, time-based vesting restricted stock units and stock options)

Broad-based employee benefits, limited perquisites and severance coverage
 
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Say-on-Pay and Say-on-Frequency Votes
In 2020, the Compensation Committee considered the outcome of the shareholder advisory vote on 2019 executive compensation when making decisions relating to the compensation of the Named Executive Officers and the Company’s executive compensation program and policies. The shareholders voted at the 2020 AGM, in a non-binding, advisory vote, on the 2019 compensation paid to our Named Executive Officers. Approximately 99% of the votes were cast in favor of the Company’s 2019 compensation decisions. Based on this level of support, the Compensation Committee decided that the “say-on-pay” vote result did not necessitate any substantive changes to the compensation program.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), shareholders can vote on the frequency of say-on-pay voting once every six years. The Company expects this vote to next occur at our 2025 annual meeting. Until that time, the Company expects to hold an advisory, non-binding say-on-pay vote on an annual basis.
Governance Highlights Related to Compensation Practices
The Company is committed to corporate governance practices that promote long-term value and strengthen board and management accountability to our shareholders, including the following:
Compensation Practice
Pay-for-Performance
— The majority of the total executive direct compensation is variable and directly or indirectly tied to Company performance.
— No incentive funding when Company performance on a metric does not meet threshold requirements for such metric under the annual short and long term incentive plans (relating to performance awards).
— 50% of the Chief Executive Officer’s equity-based compensation is performance based to motivate enhancement of long-term shareholder value.
— Compensation Committee review of executive tally sheets reflecting all compensation components to ensure that compensation decisions are in line with the Company’s pay-for-performance philosophy.
Excellence on the Board
— Annual election of directors by majority vote.
— Separation of Chair and Chief Executive Officer roles.
— All members of Audit Committee are financial experts.
Robust Stock Ownership Guidelines
Stock ownership guidelines of 6x base salary for the Chief Executive Officer; 3x base salary for other executive officers and certain senior vice presidents; 4x cash retainer for directors.
Double Trigger Change in Control
Executive Change in Control Plan and, beginning in 2020, equity grants require both a change in control and a qualifying termination for accelerated vesting.
Strict Trading Policy; Anti-Hedging and Pledging Policies
Enforcement of a strict trading policy; no hedging or pledging of Company stock by executives or directors.
Clawback Policy
Recovery of incentive cash and equity compensation in certain circumstances if it was paid based on inaccurate financial statements.
 
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Compensation Practice
Tax Gross-Ups
No excise tax or income tax gross-ups (except in the event of relocation).
Employment Contracts
None of the current Named Executive Officers have an employment contract.
Executive Compensation Determination Process
Role of Board, Compensation Committee.   The Compensation Committee provides assistance to the Board to oversee the Company’s executive compensation program. As part of its responsibilities under its charter, the Compensation Committee oversees the annual compensation decision process for the Named Executive Officers, including the Chief Executive Officer. The Compensation Committee has historically taken into account multiple factors, such as considering the responsibilities, performance, contributions and experience of each Named Executive Officer and their compensation in relation to other employees and other equivalent roles.
The Compensation Committee annually reviews the Chief Executive Officer’s performance, base salary, annual incentive target opportunity and outstanding long-term incentive awards and approves any changes to the Chief Executive Officer’s overall compensation package in light of such review. The Chief Executive Officer does not participate in deliberations regarding his own compensation.
In addition, the Compensation Committee has historically taken into account the recommendations of the Chief Executive Officer based on his judgment and knowledge of the industry when making compensation decisions for the executive officers (other than the Chief Executive Officer). The Chief Executive Officer annually reviews each other executive officer’s performance with the Compensation Committee and recommends to the Compensation Committee an appropriate base salary, annual incentive target opportunity and annual incentive payout and grant of long-term equity incentive award. Based upon this recommendation and the other considerations described below, and in consideration of the executive compensation philosophy described above, the Compensation Committee reviews the overall annual compensation packages for the executive officers, including the Named Executive Officers, and approves such compensation packages, other than the proposed equity grants. Proposed grants of equity to the Named Executive Officers and other Section 16 officers are reviewed and approved by the full Board in order to qualify such grants as exempt from the short-swing profit provisions of Section 16 of the Exchange Act.
Role of the Independent Compensation Consultant.   The Compensation Committee retains an independent compensation consultant, Aon plc (the “Consultant”), to support the oversight and management of the executive compensation program. The Compensation Committee retains sole authority to hire or terminate the Consultant, approve its compensation, determine the nature and scope of services, and evaluate performance. One or more representatives of the Consultant attend Compensation Committee meetings, as requested, and communicate with the Compensation Committee Chair between meetings. The Compensation Committee makes all final decisions. The Consultant’s specific roles include, but are not limited to:

advising the Compensation Committee on executive compensation trends and regulatory developments;

providing a total compensation study for executives, compared against the companies in the peer group, and recommendations for executive pay;

providing advice to the Compensation Committee on governance best practices, as well as any other areas of concern or risk;

serving as a resource to the Compensation Committee Chair for meeting agendas and supporting materials in advance of each meeting;

reviewing and commenting on proxy disclosure items, including this CD&A;

reviewing and commenting on the Compensation Committee’s annual compensation risk assessment;

advising the Compensation Committee on management’s pay recommendations; and
 
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from time to time, reviewing and providing compensation recommendations for non-employee directors to the Nominating and Governance Committee.
The Compensation Committee has assessed the independence of the Consultant as required by the NYSE rules. The Compensation Committee reviewed its relationship with the Consultant and considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act. Based on this review, the Compensation Committee concluded that the Consultant is independent and there are no conflicts of interest raised by the work performed by the Consultant.
Role of the Peer Group.   The Compensation Committee, with the help of the Consultant, conducts an annual review and evaluation of executive and director compensation in comparison to an industry peer group. In establishing the industry peer group, the Compensation Committee targets approximately 15-20 companies based on the following selection criteria:

publicly-traded companies within similar Global Industry Classification Standard (“GICS”) code classifications;

peer companies used by the potential peer companies (peers of peers) within the similar GICS codes;

peer companies used by proxy advisory firm Institutional Shareholder Services Inc. (“ISS”) in 2019;

companies with annual revenues of approximately 0.4x to 3x Gates’ annual revenues; and

companies with enterprise values of approximately 0.2x to 5x Gates’ total enterprise value.
The peer group the Compensation Committee selected to assist with Fiscal 2020 compensation decisions is unchanged from our fiscal year ended December 28, 2019 and consisted of the following companies in the GICS Industrials Sector and Capital Goods Industry Group:

AMTEK, Inc.

Colfax Corporation

Crane Co.

Donaldson Company, Inc.

Flowserve Corporation

Gardner Denver Holdings, Inc. (now Ingersoll Rand Inc., following a merger during 2020)

Graco Inc.

IDEX Corporation

Lincoln Electric Holdings, Inc.

Nordson Corporation

Pentair plc

Regal Beloit Corporation

Rexnord Corporation

SPX Corporation

The Timken Company

Xylem Inc.
The Compensation Committee uses competitive compensation data from the annual total compensation study of peer companies to inform its decisions about overall compensation opportunities and specific compensation elements. Additionally, the Compensation Committee uses multiple reference points when establishing targeted compensation levels. The Compensation Committee uses the competitive 50th percentile for targeted total compensation as a guide, but does not benchmark specific compensation elements or total compensation to any specific percentile relative to the peer companies or the broader U.S. market.
 
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Instead, the Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as Company, business and individual performance, scope of responsibility, critical needs and skill sets, leadership potential and succession planning.
For the fiscal year ending January 1, 2022 (“Fiscal 2021”), the Compensation Committee, in consultation with the Consultant, has maintained the current selection criteria used in Fiscal 2020 for selecting the peer group. Based on that criteria, one new company, Dover Corporation, was added to the peer group for Fiscal 2021 compensation decisions.
Role of Tally Sheets.   Each year, the Compensation Committee conducts a comprehensive compensation review for each Named Executive Officer prior to making decisions about executive compensation for the next year. The Committee reviews a tally sheet for each Named Executive Officer that encompasses two years of all elements of compensation, including the value of base salary, short-term incentives, long-term incentives, retirement benefits, health and welfare benefits and personal benefits. This comprehensive review ensures that future compensation decisions are in line with the Company’s pay-for-performance compensation philosophy.
Timing of Compensation Decisions.   The Compensation Committee generally makes executive compensation decisions in February of each year, after the Company reports its fourth quarter and year-end financial results for the preceding fiscal year (the “February meeting”). This timing allows the Compensation Committee to have a complete financial performance picture before making compensation decisions. The exception is executive compensation, including equity grants, to executives who are promoted or hired from outside the Company during the year. These executives may receive compensation changes or equity grants effective or dated, as applicable, as of the date of their promotion, hiring date, or other Board approved date.
Elements of Compensation
The Company’s executive compensation program is designed to recognize an executive’s scope of responsibilities, leadership ability and effectiveness in achieving key performance goals and objectives. As an executive’s level of responsibility within Gates increases, so does the percentage of total compensation that is linked to performance in the form of variable compensation. The Company also provides various retirement and benefit programs and modest, business-related benefits as discussed below.
Total Compensation Mix.   The Company’s mix of target total compensation in 2020, as illustrated by the below charts, is significantly skewed towards variable “at-risk” compensation.
[MISSING IMAGE: tm212567d1-pc_ceoneo4c.jpg]
Base Salary.   Base salaries for the Company’s Named Executive Officers in 2020 were determined by the Compensation Committee after consideration of the Chief Executive Officer’s recommendations (for all
 
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Named Executive Officers other than the Chief Executive Officer); the breadth, scope and complexity of the executive’s role; internal equity; current compensation; tenure in position and prior tenure in related roles; market pay levels; and individual performance. Base salaries are reviewed annually at the February meeting or at other times when appropriate and may be increased from time to time pursuant to such review. The Consultant assists the Compensation Committee with this process by providing market and peer group data and making recommendations.
Effective February 21, 2020, the Company adjusted the annual base salary of Mr. Jurek by 3% (from $1,000,000 to $1,030,000), Mr. Gaston by 5% (from $400,000 to $420,000), Mr. Gawronski by 3.5% (from $645,000 to $667,575), Mr. Lifsey by 3.5% (from $646,600 to $669,231) and Mr. Wisniewski by 3% (from $386,250 to $397,838), primarily to align to market compensation practices and reward certain individual performance. Mr. Mallard was hired effective February 24, 2020, with an annual base salary of $550,000. The Summary Compensation Table below shows the base salary earned by each Named Executive Officer during Fiscal 2020.
Short-Term Incentive Opportunity.   The Company provides a short-term annual incentive opportunity under the Gates Global Bonus Policy (the “Annual Plan”) to reward certain employees, including its Named Executive Officers, for achieving specific performance goals that would advance the Company’s profitability and drive key business results, and to recognize individuals based on their contributions to those results.
The following table illustrates the calculation of the annual cash incentive awards that could have been earned by each of the Company’s Named Executive Officers (other than Mr. Naemura) in 2020 under the Annual Plan, had the Company attained 100% of the target performance requirement. The target opportunity as a percentage of base salary for the Named Executive Officers remained flat from 2019 to 2020.
Name
Base Salary
($)
Target
Annual Plan
Opportunity
(% of Base
Salary)
Target Annual Plan
Opportunity
($)
I. Jurek
$ 1,030,000 150% $ 1,545,000
B. Mallard
$ 550,000 85.25%* $ 468,852
R. Gaston
$ 420,000 100% $ 420,000
G. Gawronski
$ 667,575 100% $ 667,575
W. Lifsey
$ 669,231 100% $ 669,231
D. Wisniewski
$ 397,838 50% $ 198,919
*
Bonus target percentage is prorated for Mr. Mallard based on his February 24, 2020 start date.
Potential 2020 payout targets under the Annual Plan were based on a combination of the achievement of the Company’s financial performance goals in Fiscal 2020 (the “Gates Financial Performance Factor”), which fund the Annual Plan, and the Named Executive Officer’s performance during the fiscal year against his individual performance goals (the “Individual Performance Factor”).
Gates Financial Performance Factor.   The Gates Financial Performance Factor sets the funding levels for the Annual Plan. The Board, after an evaluation of possible financial performance measures, determined to continue using Adjusted EBITDA, Free Cash Flow and Revenue as the financial performance measures for 2020, with the only change being to the calculation of Free Cash Flow to include actual working capital rather than average working capital, to provide simplification and transparency. The Board determined that these financial performance measures would be critical indicators of the Company’s performance for 2020 and, when combined, would contribute to sustainable growth. The Annual Plan financial performance measures and weightings for 2020 are described below.
 
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Performance Measure
Description
Adjusted EBITDA (50%)
Adjusted EBITDA under the Annual Plan is defined in substantially the same manner as described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —  Non-GAAP Measures,” of the 2020 Annual Report.
Free Cash Flow (30%)
Calculated as Adjusted EBITDA (as defined for purposes of the Annual Plan as described immediately above), less capital expenditures, plus or minus the change in trade working capital versus prior year.
Revenue (20%)
Revenue under the Annual Plan is defined as consolidated revenue as reflected in the Company’s financial statements, excluding the impacts of acquisitions made during the fiscal year.
The Compensation Committee reserved the ability to adjust the actual financial performance results to exclude the effects of extraordinary, unusual or infrequently occurring events. The weighted achievement factor for each of the financial performance measures is determined by multiplying the weight attributed to each performance measure by the applicable achievement factor for each measure. For each of the performance measures, the achievement factor is determined by calculating the payout percentage against the target goal based on a pre-established scale. Funding attainment with respect to these performance measures can range from:

0% funding for performance below the threshold requirement;

50% of target incentive for achieving 95% of the target performance requirement (threshold);

100% of target incentive for achieving 100% of the target performance requirement (target); and

150% of target incentive for achieving 105% of the target performance requirement (maximum).
Payouts for performance between points are interpolated on a straight-line mathematical basis and rounded to the nearest whole number. The Compensation Committee may adjust the aggregate amount available to fund the Annual Plan but does not expect to do so absent unanticipated or exceptional circumstances.
After the Gates Financial Performance Factor is calculated and the aggregate amount available to fund the Annual Plan is approved by the Compensation Committee, the Company’s Chief Executive Officer may allocate the funding across the organization as he deems appropriate (excluding with respect to himself) and may adjust the Gates Financial Performance Factor either upward or downward for each functional area or geographic region based on the performance of that specific functional area or geographic region.
In 2020, the Company’s financial results, consistent with the global economy, were significantly impacted by the Covid-19 pandemic, despite the tremendous amount of hard work that took place to continue its business operations, satisfy customer demand, avoid significant layoffs or salary and benefit reductions, and provide safe work environments for its employees. The Gates Financial Performance Factors were all below threshold for the Annual Plan. Accordingly, the Compensation Committee determined in February 2021 there would be no funding of the Annual Plan for the Company’s Named Executive Officers and all other employees who are eligible to participate.
The following table outlines the calculation of the potential funding of the Annual Plan based on the Gates Financial Performance Factors, the pre-established scale, and the actual funding for 2020.
Threshold
(50% Funding
for 95% of
Target)
Target
(100%
Funding)
Maximum
(150% Funding
105% of
Target)
2020 Attainment
Measure
Weighting
(Dollars in Millions)
$
%
Funding
Adjusted EBITDA
50% $ 604.2 $ 636.0 $ 667.8 $ 506.6 80 $ 0
Free Cash Flow
30% $ 503.5 $ 530.0 $ 556.5 $ 446.9 84 $ 0
Revenue*
20% $ 3,029.4 $ 3,120.3 $ 3,200.0 $ 2,793.0 90 $ 0
*
Revenue threshold and maximum are narrower than 95% and 105% to align with the associated EBITDA levels.
 
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Individual Performance Factor.   Under the Annual Plan, the Compensation Committee establishes an annual Individual Performance Factor for each of the Company’s Named Executive Officers, based on both financial and non-financial objectives appropriate for each Named Executive Officer’s position for that year. The attainment percentage of the Individual Performance Factor is based on the participant’s achievement of his goals, performance against his competencies and calibration across his team or region, among other things, during the applicable year. There is no stated maximum on the Individual Performance Factor.
If the Annual Plan had funded for 2020, actual amounts paid under the Annual Plan would have been calculated by multiplying each Named Executive Officer’s base salary in effect on December 31, 2020 by (i) his Annual Plan target bonus opportunity (which is reflected as a percentage of base salary), (ii) the final Gates Financial Performance Factor, and (iii) the Individual Performance Factor. However, since the Compensation Committee did not fund the Annual Plan in 2020, the Individual Performance Factor did not impact payouts.
2020 One-Time Special Awards.   On rare occasions, the Compensation Committee may provide discretionary cash awards to the Company’s Named Executive Officers. In February 2021, the Compensation Committee performed a comprehensive qualitative review of management’s operational performance during 2020 to mitigate the impact of Covid-19 on the Company’s business and its global employees, and to position Gates for success post-pandemic. The Compensation Committee believes the actions taken by the Company, led by its Named Executive Officers, to mitigate the impacts of the pandemic ensured the sustainability of its business, products and services, and positioned the Company to increase long-term shareholder value. The Compensation Committee reviewed the following 2020 leadership initiatives and significant operational accomplishments as part of their overall 2020 performance assessment:
1.
Keeping employees and communities safe

In January 2020, as its business in China was being impacted, the Company mobilized a highly engaged, cross-functional emergency response team that developed and remains tactically engaged in the implementation of the Covid-19 pandemic countermeasure actions across the Company’s global footprint.

The Company proactively and effectively implemented quarantine protocols, social distancing policies, work-from-home arrangements, travel suspensions, transportation assistance, frequent and extensive disinfecting of workspaces, the provision of personal protective equipment, mandatory temperature monitoring and Covid-19 testing at certain facilities.
2.
Meeting or exceeding all applicable government regulations

The Covid-19 pandemic emergency response team stayed abreast, and sometimes ahead, of the rapidly changing regulatory environments across the Company’s more than 110 offices, factories and distribution centers around the world.
3.
Continuing to serve customers, many of whom operate in essential industries

Many of Gates’ customers operate in essential industries as defined by the US Cybersecurity and Infrastructure Security Agency (CISA) and similar government organizations around the world. The Company’s products are used across an extensive array of industries such as agriculture, food production, construction, transportation and logistics, healthcare, industrial automation and many more. Its customers explicitly requested that the Company continue to operate to support their businesses and were appreciative that it was able to do so, which the Company believes contributed both to its solid financial performance in 2020 and to the establishment of new customer relationships from which the Company expects to benefit going forward.
 
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The Company overcame ongoing challenges of government shutdowns in the locations where it operates, as well as staffing shortages due to illness, quarantines and travel restrictions, with the majority of facilities remaining open and operating throughout 2020.

The commercial function adopted and expanded on virtual sales techniques and technical sales tools to serve customers and minimize disruptions.

The Company took only limited temporary cost reduction actions to protect its ability to supply critical components to its global customer base.
4.
Ongoing investment and innovation

The Company continued to execute on critical initiatives planned prior to the pandemic, including restructurings, process standardization and new product innovation.

The Company continued to accelerate innovation, finding new opportunities to meet customer demand in a rapidly changing landscape.
5.
Focusing on Human Capital

The Company maintained compensation levels for employees across the company, including providing an annual salary increase to eligible employees, and provided enhanced health and welfare benefits where appropriate.

In the fourth quarter of 2020, the Company paid a “Manufacturing Appreciation Award” equating to approximately one week’s pay to approximately 5,000 qualifying employees in its manufacturing and distribution facilities in recognition of their commitment through the global pandemic.

The leadership team kept employees engaged and involved with fulsome and increased corporate communication.

Employees under quarantine continued to receive compensation, either through salary, sick pay or other mechanisms depending on global location, to encourage a safe response to actual and potential exposures.
In addition to the accomplishments above, the Compensation Committee considered the Company’s financial performance, including as compared to its premium diversified industrials peers, in the second half of Fiscal 2020 as the market recovery began. The Compensation Committee also considered the specific impacts of the pandemic on the financial results, reviewing a detailed quarter-by-quarter impact analysis that took into account significant sales volume declines due to shelter-in-place requirements, customer shutdowns, supply constraints and decreased demand, as well as costs and inefficiencies related to the pandemic. While the pandemic-induced economic environment in the first half of the year was challenging, the flexible posture the Company maintained enabled a strong recovery and efficient transition back to organic growth, with higher margins and strong momentum in the second half of 2020.
Based on its 2020 quantitative and qualitative performance assessment, the Compensation Committee believed strongly that the Company exhibited superior financial and operational performance in the face of significant global headwinds due to Covid-19, and the Named Executive Officers and certain other eligible employees should be rewarded for this performance in 2020. In February 2021, the Compensation Committee, in consultation with the Consultant, approved special one-time cash awards (the “2020 Special Awards”) to be paid to approximately 1,600 eligible employees, including the Company’s Named Executive Officers, as recognition for contributions, impact and leadership provided to the Company in managing its business through the Covid-19 pandemic during Fiscal 2020. The Company reacted quickly to the pandemic by first prioritizing the health and safety of its employees and the communities in which it operates around the world, and then by developing tactical operational and commercial plans to both manage the impact of the pandemic and protect the Company’s competitive position for the market recovery.
The aggregate amount of funding the Compensation Committee approved for the 2020 Special Awards was equivalent to the amount that would have funded the Annual Plan, had the Company attained 100% of the target performance requirement under the Annual Plan. The 2020 Special Awards approved for the
 
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Company’s Named Executive Officers are listed below, which represents no more than 100% of each Named Executive Officer’s target opportunity under the Annual Plan.
Name
2020 Special Award
I. Jurek
$ 1,545,000
B. Mallard
$ 468,852
R. Gaston
$ 399,000
G. Gawronski
$ 634,196
W. Lifsey
$ 669,231
D. Wisniewski
$ 188,973
Long-Term Incentive Opportunity.   The Company believes that its Named Executive Officers’ long-term compensation should be directly linked to the value it delivers to shareholders. Equity awards granted to Named Executive Officers are designed to provide long-term incentive opportunities over a period of several years. In connection with the Company’s initial public offering (the “IPO”), it adopted the Gates Industrial Corporation plc 2018 Omnibus Incentive Plan (the “2018 Omnibus Incentive Plan”), a market-based long-term incentive program that allows for awards of a mix of performance shares, restricted shares and stock options. The 2018 Omnibus Incentive Plan was informed by the peer group and broader public company practice and is consistent with the Company’s compensation objective of providing a long-term equity incentive opportunity that aligns compensation with the creation of shareholder value and achievement of business goals.
In February 2020, the Company’s Board approved an annual long-term incentive award (the “2020 LTI”) under the 2018 Omnibus Incentive Plan to incentivize long-term business performance as well as to promote retention. The 2020 LTI for Named Executive Officers, other than the Chief Executive Officer, is comprised of 34% performance-based vesting restricted stock units (“PRSUs”), 33% time-based vesting restricted stock units (“RSUs”), and 33% time-based vesting non-qualified stock options (“Options”). The 2020 LTI for the Chief Executive Officer is comprised of 50% PRSUs, 25% RSUs, and 25% Options. Mr. Naemura did not receive a 2020 LTI as his resignation was effective on January 31, 2020, prior to the February board meeting at which the 2020 LTI was approved.
Each Named Executive Officer’s target opportunity for the 2020 LTI is a percentage of his base salary. For 2020, the percentage of base salary was: Mr. Jurek (450%), Mr. Mallard (190%), Mr. Gaston (155%), Mr. Gawronski (240%), Mr. Lifsey (240%), and Mr. Wisniewski (80%).
The RSUs and Options will vest in substantially equal annual installments on the first three anniversaries of the grant date, subject to the executive’s continued employment through the vesting date. The PRSUs provide that 50% of the award will vest if the Company achieves a certain level of average annual Adjusted Return on Invested Capital (“Adjusted ROIC”) and the remaining 50% will vest if the Company achieves certain Relative Total Shareholder Return (“Relative TSR”) goals. Performance for the Adjusted ROIC and Relative TSR goals are each measured over a three year performance period based on the pre-established scale. The Compensation Committee selected Adjusted ROIC as a metric to drive focus on making sound investments and efficient use of working capital. The Compensation Committee selected Relative TSR as a metric to align a significant portion of pay delivery directly with shareholder value creation.
Performance Measure
Description
Adjusted ROIC (50%)
50% of PRSU value is calculated as (Adjusted EBITDA-depreciation and amortization) x (1 — 25% tax rate)) divided by (total assets — non-restricted cash — accounts payable — goodwill and other intangible assets that arose from the acquisition of Gates by Blackstone in 2014).
The financial measures used to determine Adjusted ROIC are calculated in accordance with U.S. GAAP as presented in the Company’s financial statements, except (i) Adjusted EBITDA is defined in substantially the same manner as described in “Item 7. Management’s Discussion and Analysis of Financial Condition and
 
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Performance Measure
Description
Results of Operations — Non-GAAP Measures” of the 2020 Annual Report, (ii) the depreciation and amortization deduction excludes the amortization of intangible assets arising from the acquisition of Gates by Blackstone in 2014 and (iii) total assets excludes both income tax receivables and deferred income tax assets.
Relative TSR (50%)
50% of PRSU value is based on the Company’s three-year relative TSR ranking against companies in the S&P 400 Capital Goods Industry Index. TSR is measured by stock price change and dividends over the performance period as a percentage of the beginning stock price. The beginning and ending stock prices are based on the 20-day trailing averages.
The total number of PRSUs that vest at the end of the three year performance period will range from a payout of 0% to a maximum of 200% as determined by measuring actual performance over the performance period for Adjusted ROIC and Relative TSR against the performance goals based on a pre-established scale. Payout for achievement between the performance levels will be determined based on a straight-line interpolation of the applicable payout range rounded to the nearest whole percentage. Payouts are subject to the Named Executive Officer’s continued employment through the end of the applicable performance period and are paid out after the certification of the performance results by the Compensation Committee. The Compensation Committee chose Adjusted ROIC and Relative TSR performance goals that are, in the Compensation Committee’s view, challenging but achievable.
Other Aspects of the Company’s Compensation Programs
Sign-on Bonuses.   From time to time, the Company may award sign-on bonuses. Sign-on bonuses are used when necessary to attract highly skilled officers to the Company. Generally, they are used to incentivize candidates to leave their current employers or may be used to offset the loss of unvested compensation they may forfeit as a result of leaving their current employers. During 2020, the Company awarded a sign-on bonus of  $100,000 to Mr. Mallard designed to replace certain compensation forfeited from his previous employer when he joined the Company. Had Mr. Mallard voluntarily left the Company within one year of his start date, he would have been required to repay this sign-on bonus.
Employment Agreements.   At this time, none of the Named Executive Officers have employment agreements in place.
Retirement Benefits.   The Company offers the following retirement benefits to eligible U.S.-based employees, including the Named Executive Officers, as specified below. Additional details about the Gates Corporation Supplemental Retirement Plan (the “Supplemental Retirement Plan”), as it applies to the Named Executive Officers, is included in the “2020 Nonqualified Deferred Compensation” section of this Proxy Statement.
Plan
Description
Gates MatchMaker 401(k) Plan
A qualified defined contribution retirement benefit available to eligible U.S. employees (as defined in the plan document) that is intended to qualify as a profit sharing plan under Section 401(k) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”).
Supplemental Retirement Plan
A funded, nonqualified plan that provides the Company’s executives, including Named Executive Officers, benefits similar to the Gates MatchMaker 401(k) Plan but without an employer match or the Code contribution and earnings limitations.
The Company offers a defined contribution retirement benefit to all eligible U.S. participants through the Gates MatchMaker 401(k) Plan. The Gates MatchMaker 401(k) Plan provides employees with individual retirement accounts funded by (1) an automatic Gates-paid contribution of 3% of employee eligible
 
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earnings, and (2) a Gates-paid match on employee contributions dollar-for-dollar on the first 3% of eligible earnings that the employee contributes. The Code sets maximum limitations on employee contributions for participants and as well as limitations on the earnings upon which employee/employer contributions may be made. The Company’s plans comply with the maximums under the Code.
The Company currently offers participation in the Supplemental Retirement Plan to specified U.S. executives that include the Named Executive Officers. This plan is a nonqualified deferred compensation plan that provides participants with two benefit opportunities:
1.
Non elective employer contribution. A 6% employer contribution (the “Retirement Contribution”) on eligible earnings that exceed Section 401(a)(17) of the Code’s dollar limits.
2.
Compensation Deferral Opportunity. Employee participants may defer up to 80% of base salary and 80% of bonus compensation. There is no employer paid matching contribution on these deferrals.
These deferrals are in addition to amounts participants may defer in the Gates MatchMaker 401(k) Plan.
Other Benefits.   The Company provides other benefits to the Named Executive Officers that its believes are necessary to compete for executive talent. The additional benefits for the Named Executive Officers generally consist of a parking subsidy, tax preparation services and an executive annual physical examination. Tax gross-ups are provided to executive officers, including the Named Executive Officers, for certain relocation benefits which are provided in connection with an executive’s commencement of employment with the Company. The specific amounts attributable to the other benefits provided to the Named Executive Officers in 2020 are set forth in the “All Other Compensation” column of the Summary Compensation Table of this Proxy Statement.
The Company also provides other benefits such as medical, dental and short-term disability coverage to each Named Executive Officer, which are identical to the benefits provided to all other eligible U.S.-based employees. Executive officers, including the Named Executive Officers, also receive enhanced benefits that are not available to other employees, such as relocation assistance and enhanced life, accidental death and dismemberment (“AD&D”) and long-term disability insurance benefits. Specifically, all Named Executive Officers were eligible for enhanced life and AD&D insurance benefits in the following amounts in 2020: 3x base salary up to $1,000,000 (for Mr. Wisniewski), 3x base salary up to $2,000,000 (for Messrs. Naemura, Gawronski, Gaston, Mallard and Lifsey) and 3x base salary up to $3,000,000 (for Mr. Jurek). In addition, all Named Executive Officers were eligible for enhanced long-term disability insurance benefits of 66.7% of their salary (up to $20,000/month). An individual disability insurance plan is offered to executives with an income of over $360,000, including the Named Executive Officers, to cover annual income in excess of  $360,000. The plan provides an additional $10,000 of monthly benefit above the group disability plan. The Company also provides vacation and paid holidays to all employees, including the Named Executive Officers. All of the Named Executive Officers were eligible for four weeks of vacation in 2020.
Change in Control and Severance Benefits.   The Board believes that executives are better able to perform their duties with respect to any potential proposed corporate transaction without concern for the impact of the transaction on their individual employment with carefully structured change in control and severance benefits. In addition, the Board believes that the interests of the Company’s shareholders are better protected and enhanced by providing greater certainty regarding executive pay obligations in the context of planning and negotiating any potential corporate transactions. Accordingly, in connection with the IPO, the Company adopted the Executive Severance Plan and the Executive Change in Control Plan. Named Executive Officers are not entitled to payments under the Executive Severance Plan if they are entitled to receive payment under the Executive Change in Control Plan discussed below. For information regarding these plans, please see “Potential Payments upon Termination or Change in Control.” Prior to 2020, the Company provided limited single-trigger change in control benefits to certain Named Executive Officers in their Options and RSU award agreements. Beginning in 2020, the Options and RSU award agreements provide for double trigger vesting based upon the occurrence of both a change in control and a qualified termination. The terms of the Company’s Supplemental Retirement Plan also provide for early distribution upon a change in control.
 
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Clawback Policy.   The Company has adopted a clawback policy for incentive compensation. Under the policy, if the Compensation Committee determines that incentive compensation of its current and former Section 16 officers (or any other current and former employee designated by the Board or the Compensation Committee) was overpaid, in whole or in part, as a result of a restatement of the reported financial results of the Company or any of its segments due to material non-compliance with financial reporting requirements (unless due to a change in accounting policy or applicable law), and such restatement was caused by or contributed to, directly or indirectly, such employee’s fraud, willful misconduct or gross negligence, then the Compensation Committee will determine, in its discretion, whether to seek to recover or cancel any overpayment of incentive compensation paid or awarded based on the inaccurate financial information or restated results. The clawback policy and the 2018 Omnibus Incentive Plan also provide that if a covered person engages in any detrimental activity (as defined in the 2018 Omnibus Incentive Plan) as determined by the Compensation Committee, the Compensation Committee may, in its sole discretion, provide for one or more of the following: (i) cancellation of any or all of such covered person’s outstanding awards; or (ii) forfeiture by the covered person of any gain realized on the vesting or exercise of awards, and prompt repayment of any such gain to the Company.
Executive Stock Ownership Guidelines.   To better align the financial interests of the Company’s Named Executive Officers and its shareholders, the Company has an executive stock ownership program. The Company, along with the Compensation Committee, reviews the executive ownership annually as of the annual measurement date, February 1, 2020. Any officer who does not meet the threshold is required to retain 50% of stock acquired through the exercise or vesting of equity awards made by the Company. In calculating the ownership, the Company includes direct and certain indirect ownership, unvested time-based vesting restricted stock units and shares underlying vested but unexercised stock options (based on the excess of the market price of the stock over the exercise price). The Company does not include unvested stock options or unvested performance-based restricted stock units.
Currently, each Named Executive Officer is expected to own the Company’s ordinary shares in the amounts listed below. As of the annual measurement date, all of the then-employed Named Executive Officers either met the applicable ownership guidelines or were in compliance with the equity retention mandate.
Chief Executive Officer
6 times base salary
Other Named Executive Officers
3 times base salary
 
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COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the 2020 Annual Report.
Submitted by the Compensation Committee of the Board of Directors:
Julia C. Kahr, Chair
Terry Klebe
Neil P. Simpkins
 
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CEO PAY RATIO
The following table sets forth the ratio of the Chief Executive Officer’s total compensation to that of the Company’s median employee for Fiscal 2020.
CEO total annual compensation
$ 7,680,120
Median employee total annual compensation
$ 35,940
Ratio
214 to 1
The SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee population and compensation practices. As a result, the pay ratio reported above may not be comparable to the pay ratio reported by other companies, as other companies may have utilized different methodologies and have different employment and compensation practices. The Company believes the pay ratio above is a reasonable estimate calculated in a manner consistent with the SEC rules.
To calculate the 2020 CEO pay ratio, the Company used the same median employee it used for purposes of calculating the 2019 CEO pay ratio, as there has been no material change in the Company’s employee population, employee compensation programs or the median employee compensation, that it believes would significantly impact the CEO pay ratio. This median employee is an hourly employee located in Canada. The methodology and material assumptions, adjustments and estimates used to identify the median employee are set forth in the Company’s proxy statement filed with the SEC on April 1, 2020. The Company calculated the median employee’s total annual compensation in the same manner as it calculated the Chief Executive Officer’s total annual compensation in the Summary Compensation Table in this Proxy Statement.
 
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COMPENSATION TABLES
2020 Summary Compensation Table
The following table sets forth the compensation for the 2018, 2019 and 2020 fiscal years for Mr. Jurek, Mr. Naemura, Mr. Gawronski and Mr. Lifsey, and Fiscal 2020 for Mr. Gaston, Mr. Mallard and Mr. Wisniewski. Mr. Gaston, Mr. Mallard and Mr. Wisniewski were not named executive officers prior to Fiscal 2020 and therefore no compensation information for such years appears in this table for these individuals.
Name and Principal Position
Year
Salary
($)(1)
Bonus
($)(2)
Stock
Awards
($)(3)
Option
Awards
($)(3)
Non-Equity
Incentive
Plan
Compensation
($)(4)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)(5)
Total
($)(6)
Ivo Jurek
2020 $ 1,063,962 $ 1,545,000 $ 3,827,542 $ 1,158,749 $ 84,867 $ 7,680,120
Chief Executive Officer
2019 $ 989,635 $ 3,350,070 $ 5,982,476 $ 164,509 $ 10,486,690
2018 $ 943,269 $ 1,389,150 $ 201,983 $ 2,534,402
L. Brooks Mallard
2020 $ 465,385 $ 568,852 $ 745,450 $ 344,849 $ 102,331 $ 2,226,867
Chief Financial Officer
David Wisniewski,
2020 $ 410,956 $ 188,973 $ 229,633 $ 105,029 $ 31,442 $ 966,033
Chief Financial Officer (interim) and Chief Accounting Officer
David Naemura,
2020 $ 130,493 $ 8,870 $ 139,363
Chief Financial Officer (former)
2019 $ 624,851 $ 1,029,035 $ 455,371 $ 89,871 $ 2,199,128
2018 $ 609,423 $ 687,470 $ 110,023 $ 1,406,916
Roger Gaston,
2020 $ 432,385 $ 399,000 $ 469,713 $ 214,829 $ 37,467 $ 1,553,394
Chief Human Resources Officer
Grant Gawronski,
2020 $ 688,997 $ 634,196 $ 1,156,005 $ 528,715 $ 51,461 $ 3,059,374
Chief Commercial Officer
2019 $ 636,519 $ 1,152,394 $ 509,972 $ 74,818 $ 2,373,703
2018 $ 503,846 $ 1,700,600 $ 455,096 $ 36,527 $ 2,696,069
Walt Lifsey,
2020 $ 690,706 $ 669,231 $ 1,158,882 $ 530,030 $ 56,884 $ 3,105,733
Chief Operating Officer
2019 $ 639,703 $ 1,155,267 $ 511,237 $ 83,436 $ 2,389,643
2018 $ 607,640 $ 567,300 $ 96,532 $ 1,271,472
(1)
The amounts reported in the “Salary” column consist of base salary earned in Fiscal 2020. The following base salary increases were effective February 21, 2020: Mr. Jurek (from $1,000,000 to $1,030,000); Mr. Wisniewski (from $386,250 to $397,838); Mr. Gaston (from $400,000 to $420,000); Mr. Gawronski (from $645,000 to $667,575); and Mr. Lifsey (from $646,600 to $669,231). Mr. Mallard’s base salary was effective on his February 24, 2020 start date. Due to an extra pay period in 2020 (27 pay periods versus the normal 26 pay periods), the salary earned in Fiscal 2020 exceeded the actual annual base salary (other than for Mr. Mallard and Mr. Naemura). For Mr. Naemura, of the $130,493 base salary earned in Fiscal 2020, $45,914 was accrued vacation that the Company paid to him upon termination.
(2)
The amounts reported in the “Bonus” column consist of amounts paid to Named Executive Officers as a one-time special award, as more fully described in the “Elements of Compensation — 2020 One-Time Special Awards” section of this Proxy Statement. Additionally, the amount reported in this column for Mr. Mallard consists of his one-time special award and his sign-on bonus of $100,000 that was
 
32

 
designed to replace certain compensation forfeited from his previous employer when he joined the Company on February 24, 2020.
(3)
The amounts reported in the “Stock Awards” and “Option Awards” columns for 2020 represent the grant date fair value of the time-based RSUs, PRSUs and time-based options granted under the 2018 Omnibus Incentive Plan calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“Topic 718”). For information regarding the assumptions used in determining the fair value of these awards, please refer to Note 18, Share-Based Compensation, of the audited consolidated financial statements included in the Annual Report. Where the number of shares ultimately issued depends on a performance or market condition, the target number of awards is used for the purpose of the above table. With respect to the PRSUs, 50% vest subject to attainment of certain levels of Adjusted ROIC and 50% vest subject to attainment of a certain Relative TSR. The grant date fair value of the shares that vest according to Adjusted ROIC was computed in accordance with Topic 718 based upon the probable outcome of the performance conditions as of the grant date. As the shares that vest according to Relative TSR are subject to market conditions as defined under Topic 718 and are not subject to performance conditions as defined under Topic 718, they have no maximum grant date fair values that differ from the grant date fair values presented in the table. Assuming the highest level of performance is achieved with respect to the Adjusted ROIC awards, the grant daet fair value of the stock awards would be: Mr. Jurek — $4,986,288; Mr. Mallard — $923,096; Mr. Wisniewski — $283,737; Mr. Naemura — $0; Mr. Gaston — $577,128; Mr. Gawronski — $1,428,367, and Mr. Lifsey — $1,431,924.
(4)
The amounts reported in the “Non-Equity Incentive Plan Compensation” column include amounts earned by Named Executive Officers under the Annual Plan. The terms of the Annual Plan are described more fully above in the “Elements of Compensation — Annual Plan.” As described above, in 2020, there were no payouts to the Named Executive Officers under the Annual Plan.
(5)
The amounts reported in the “All Other Compensation” column for 2020 reflect the sum of: (1) the amounts contributed by Gates to the Gates MatchMaker 401(k) Plan and the Supplemental Retirement Plan, which are calculated on the same basis for all participants, including the Named Executive Officers; (2) relocation benefits and a related gross-up; and (3) the cost of all other executive benefits that are required to be reported by SEC rules. The material provisions of the Gates MatchMaker 401(k) Plan and the Supplemental Retirement Plan are described in the “2020 Nonqualified Deferred Compensation” section of this Proxy Statement. Please see the following table for further information on these components.
(6)
The narrative following the table below describes these components of All Other Compensation:
Name
Company
Contributions
to Gates
MatchMaker
401(k)(a)
Company
Contributions
to Gates
Executive
Supplemental
Retirement
Benefit Plan(b)
Relocation(c)
Tax
Gross-ups(d)
Other
Benefits(e)
Total
I. Jurek
$ 17,100 $ 46,738 $ 21,029 $ 84,867
L. Mallard
$ 17,100 $ 10,823 $ 46,335 $ 19,701 $ 8,372 $ 102,331
D. Wisniewski
$ 17,100 $ 7,557 $ 6,785 $ 31,442
D. Naemura
$ 5,075 $ 3,795 $ 8,870
R. Gaston
$ 17,100 $ 8,843 $ 11,524 $ 37,467
G. Gawronski
$ 17,100 $ 24,240 $ 10,121 $ 51,461
W. Lifsey
$ 17,100 $ 24,342 $ 15,442 $ 56,884
(a)
Company Contributions to Gates MatchMaker 401(k) Plan.   Gates makes matching contributions of 100% on up to 3% of eligible earnings deferred by all eligible participants, including Named Executive Officers, in accordance with the Gates MatchMaker 401(k) Plan. Gates also makes a non-elective contribution to all eligible participants, including Named Executive Officers, in an amount equal to 3% of eligible earnings, subject to Code limitations.
 
33

 
(b)
Company Contributions to the Supplemental Retirement Plan.   Gates makes a Retirement Contribution of 6% of eligible compensation on behalf of all eligible participants, including the Named Executive Officers, under the Supplemental Retirement Plan for eligible compensation that exceeds Section 401(a)(17) of the Code.
(c)
Relocation.   Gates provides relocation benefits to its newly hired executive officers, including Named Executive Officers, that include home finding assistance, home purchase assistance (including reimbursement of closing costs and limited inspection fees), home sale assistance (marketing and closing cost assistance), moving household goods and a lump sum for miscellaneous expenses. During Fiscal 2020, Mr. Mallard received relocation benefits of $46,335.
(d)
Tax Gross-Ups.   Gates provides a reimbursement for taxable moving expenses. During Fiscal 2020, Mr. Mallard received a tax gross-up of $19,701 in relation to those expenses.
(e)
Other Benefits.   Certain additional limited benefits are made available to executives, including the Named Executive Officers. The aggregate incremental cost of these benefits is included for each Named Executive Officer in the “All Other Compensation” column of the Summary Compensation Table, but the individual values for each item are not required to be disclosed under SEC rules because none of them exceeded the greater of $25,000 or 10% of the total amount of personal benefits for each Named Executive Officer. In general, these benefits include a parking subsidy (used by all Named Executive Officers except Mr. Gawronski), and tax preparation services (used by Mr. Jurek, Mr. Wisniewski and Mr. Gaston). Gates also makes available executive physicals to all Named Executive Officers except Mr. Wisniewski (used by Mr. Jurek and Mr. Gaston). Amounts reported also include the full value of the premiums paid by Gates with respect to the enhanced life, AD&D and long-term disability insurance benefits provided to the Named Executive Officers.
 
34

 
2020 Grants of Plan-Based Awards
The following table summarizes all grants of plan-based awards to the Named Executive Officers (other than Mr. Naemura) in Fiscal 2020:
Grant
Date
Estimated Future Payouts under
non-equity incentive plan awards
($)
Estimated Future Payouts under
Equity incentive plan awards
(#)
All
other
stock
awards:
number
of
shares
of stock
units (#)
All other
option
awards:
number of
securities
underlying
options (#)
Exercise
or base
price of
option
awards
($/sh)
Grant date
fair value
of stock
and option
awards ($)
Name
Award Type
Threshold
Target
Max
Threshold
Target
Max
I. Jurek
Annual Plan(1)
$ 154,500 $ 1,545,000
PRSU(2) 2/21/2020 1,839 183,928 367,856 $ 2,668,795
RSU(3) 2/21/2020 91,964 $ 1,158,746
Options(4) 2/21/2020 241,406 $ 12.60 $ 1,158,749
L. Mallard
Annual Plan(1)
$ 46,888 $ 468,875
PRSU(2) 2/24/2020 302 30,212 60,424 $ 400,611
RSU(3) 2/24/2020 29,323 $ 344,838
Options(4) 2/24/2020 76,294 $ 11.76 $ 344,849
D. Wisniewski
Annual Plan(1)
$ 19,892 $ 198,919
PRSU(2) 2/21/2020 85 8,588 17,176 $ 124,612
RSU(3) 2/21/2020 8,335 $ 105,021
Options(4) 2/21/2020 21,881 $ 12.60 $ 105,029
R. Gaston
Annual Plan(1)
$ 42,000 $ 420,000
PRSU(2 2/21/2020 175 17,566 35,132 $ 254,883
RSU(3) 2/21/2020 17,050 $ 214,830
Options(4) 2/21/2020 44,756 $ 12.60 $ 214,829
G. Gawronski
Annual Plan(1)
$ 66,758 $ 667,575
PRSU(2) 2/21/2020 432 43,232 86,464 $ 627,296
RSU(3) 2/21/2020 41,961 $ 528,709
Options(4) 2/21/2020 110,149 $ 12.60 $ 528,715
W. Lifsey
Annual Plan(1)
$ 66,923 $ 669,231
PRSU(2) 2/21/2020 433 43,340 86,680 $ 628,863
RSU(3) 2/21/2020 42,065 $ 530,019
Options(4) 2/21/2020 110,423 $ 12.60 $ 530,030
(1)
Represents the cash-based award opportunity range under the Annual Plan, the terms of which are summarized under “Elements of Compensation — Annual Plan” above. For purposes of this table and threshold level disclosure, the Company assumed that the lowest weighted of the three performance measures achieved the threshold level of attainment (in other words, 10% of the target award was earned) and the Individual Performance Factor was set at 100%. The calculation uses each Named Executive Officer’s base salary as of December 31, 2020. The calculation was prorated for Mr. Mallard based on his February 24, 2020 start date. The actual cash-based award earned under the Annual Plan by each Named Executive Officer for 2020 was $0.
 
35

 
(2)
Represents the threshold, target and maximum payout shares of the PRSUs granted under the 2018 Omnibus Incentive Plan in 2020. Threshold payout of shares is calculated assuming an attainment of 0.1% above threshold for the Adjusted ROIC measure. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions. Please refer to “Elements of Compensation — Long-Term Incentive” above. The grant date fair value of the PRSUs for the February 21, 2020 award (February 24, 2020 award for Mr. Mallard) was calculated in accordance with ASC Topic 718 based on target, the probable outcome of the performance conditions.
(3)
Represents RSUs granted in 2020 under the 2018 Omnibus Incentive Plan. The grant date fair value of the RSUs for the February 21, 2020 award (February 24, 2020 award for Mr. Mallard) was the closing price on the date of the grant.
(4)
Represents Options granted in 2020 under the 2018 Omnibus Incentive Plan. The grant date fair value of the Options for the February 21, 2020 award (February 24, 2020 award for Mr. Mallard) was calculated in accordance with ASC Topic 718 using a Black-Scholes valuation model.
 
36

 
Outstanding Equity Awards at January 2, 2021
The following table provides information regarding outstanding equity awards held by each Named Executive Officer (other than Mr. Naemura) as of January 2, 2021.
Option Awards
Stock Awards
Name
Grant Date
Number of
securities
underlying
unexercised
options (#)
exercisable
Number of
securities
underlying
unexercised
options (#)
unexercisable
Equity
Incentive
Plan
Awards:
Number of
securities
underlying
unexercised
unearned
options
(#)(2)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
shares or
units of
stock that
have not
vested
(#)(3)
Market
value of
shares or
units of
stock that
have not
vested
($)(4)
Equity
incentive
plan
awards:
number of
unearned
shares,
units or
other
rights that
have not
vested (#)(5)
Equity
incentive
plan
awards:
market or
payout
value of
unearned
shares,
units or
other
rights that
have not
vested
($)(6)
I. Jurek
5/18/2015 Tier I(1) 1,017,239 $ 6.56 5/18/2025
5/18/2015 Tier II 1,017,239 $ 6.56 5/18/2025
5/18/2015 Tier III 1,017,239 $ 6.56 5/18/2025
5/18/2015 Tier IV 1,017,239 $ 9.84 5/18/2025
5/2/2017 Tier I(1) 81,297 54,199 $ 7.87 5/2/2027
5/2/2017 Tier II 135,496 $ 7.87 5/2/2027
5/2/2017 Tier III 135,496 $ 7.87 5/2/2027
5/2/2017 Tier IV 135,496 $ 11.80 5/2/2027
2/22/2019 Options(7) 84,040 168,082 $ 16.46 2/22/2029
2/22/2019 Options(8) 796,460 $ 19.00 2/22/2029
2/22/2019 RSU 60,146 $ 767,463
2/22/2019 PRSU 24,167 $ 308,371
2/21/2020 Options(9) 241,406 $ 12.60 2/21/2030
2/21/2020 RSU 91,964 $ 1,173,461
2/21/2020 PRSU 47,821 $ 610,196
L. Mallard
2/24/2020 Options(9) 76,294 $ 11.76 2/24/2030
2/24/2020 RSU 29,323 $ 374,161
2/24/2020 PRSU 7,855 $ 100,230
D. Wisniewski
4/9/2018 Options(10) 9,750 9,750 $ 16.54 4/9/2028
4/9/2018 RSU 3,779 $ 48,220
2/22/2019 Options(7) 5,409 10,821 $ 16.46 2/22/2029
2/22/2019 RSU 3,872 $ 49,407
2/22/2019 PRSU 1,555 $ 19,835
2/21/2020 Options(9) 21,881 $ 12.60 2/21/2030
2/21/2020 RSU 8,335 $ 106,355
2/21/2020 PRSU 2,232 $ 28,480
R. Gaston
8/8/2016 Tier I(1) 54,198 13,550 $ 6.56 8/8/2026
8/8/2016 Tier II 67,748 $ 6.56 8/8/2026
8/8/2016 Tier III 67,748 $ 6.56 8/8/2026
8/8/2016 Tier IV 67,748 $ 9.84 8/8/2026
 
37

 
Option Awards
Stock Awards
Name
Grant Date
Number of
securities
underlying
unexercised
options (#)
exercisable
Number of
securities
underlying
unexercised
options (#)
unexercisable
Equity
Incentive
Plan
Awards:
Number of
securities
underlying
unexercised
unearned
options
(#)(2)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
shares or
units of
stock that
have not
vested
(#)(3)
Market
value of
shares or
units of
stock that
have not
vested
($)(4)
Equity
incentive
plan
awards:
number of
unearned
shares,
units or
other
rights that
have not
vested (#)(5)
Equity
incentive
plan
awards:
market or
payout
value of
unearned
shares,
units or
other
rights that
have not
vested
($)(6)
5/2/2017 Tier I(1) 31,596 21,065 $ 7.87 5/2/2027
5/2/2017 Tier II 52,661 $ 7.87 5/2/2027
5/2/2017 Tier III 52,661 $ 7.87 5/2/2027
5/2/2017 Tier IV 52,661 $ 11.80 5/2/2027
2/22/2019 Options(7)
11,578 23,158 $ 16.46 2/22/2029
2/22/2019 RSU 8,287 $ 105,742
2/22/2019 PRSU 3,329 $ 42,484
2/21/2020 Options(9)
44,756 $ 12.60 2/21/2030
2/21/2020 RSU 17,050 $ 217,558
2/21/2020 PRSU 4,567 $ 58,269
G. Gawronski
3/9/2018 Options(10) 110,000 110,000 $ 17.72 3/9/2028
2/22/2019 Options(7)
28,909 57,821 $ 16.46 2/22/2029
2/22/2019 RSU 20,691 $ 264,017
2/22/2019 PRSU 8,313 $ 106,068
2/21/2020 Options(9)
110,149 $ 12.60 2/21/2030
2/21/2020 RSU 41,961 $ 535,422
2/21/2020 PRSU 11,240 $ 143,422
W. Lifsey
8/24/2015 Tier I(1) 250,668 $ 6.56 8/24/2025
8/24/2015 Tier II 250,668 $ 6.56 8/24/2025
8/24/2015 Tier III 250,668 $ 6.56 8/24/2025
8/24/2015 Tier IV 250,668 $ 9.84 8/24/2025
5/12/2016 Tier I(1)