DEF 14A 1 abm-def14a_20190327.htm DEF 14A abm-def14a_20190327.htm

 

 

 

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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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material Under Rule 14a-12

 

 

ABM Industries Incorporated

 

(Name of Registrant as Specified in Its Charter)

 

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February 13, 2019

 

 

 

Dear Fellow ABM Stockholders:

 

You are cordially invited to attend the 2019 Annual Meeting of Stockholders of ABM Industries Incorporated, to be held on Wednesday, March 27, 2019, at
10:00 a.m. Eastern Time, at our Corporate Headquarters at One Liberty Plaza, 7th Floor, New York, New York 10006.  

 

2019 marks ABM’s 110th year in business, a tremendous milestone. We are the leader in the industries and markets we serve and have grown to become the country’s 44th largest employer according to Fortune magazine.

 

ABM helps make our clients’ facilities run smoothly. No other company can match our size, scale or the range of services we offer. We are excited about our current trajectory and the progress that we are making with our 2020 Vision, and we remain committed to capturing greater value for our stockholders, customers and employees.

 

For our 2019 Annual Meeting, we have elected to provide access to our proxy materials over the internet under the Securities and Exchange Commission’s “notice and access” rules. We believe that this process provides stockholders with a convenient and quick way to access the proxy materials and vote, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting.

 

On or about February 13, 2019, we expect to distribute to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our Proxy Statement and annual report via the Internet. The Notice also contains instructions on how to request a paper copy of the Proxy Statement and annual report.

 

Your vote is important. Whether or not you plan to attend the meeting, we encourage you to vote promptly so that your shares will be represented and voted at the meeting. Thank you for your continued support of ABM.

 

 

 

Sincerely,

 

 

Scott Salmirs

President and Chief Executive Officer

 


 

 

 

 

NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS

WHEN

Wednesday, March 27, 2019,
10:00 a.m. Eastern Time

PROXY VOTING – CAST YOUR VOTE RIGHT AWAY

Your vote is important. Even if you plan to attend the annual meeting in person, please vote as soon as possible using the Internet or by telephone, or by completing, signing, dating and returning your proxy card.

WHERE

ABM Industries Incorporated
One Liberty Plaza, 7th Floor
New York, New York 10006

Using the Internet and voting at the website listed on the proxy card or the e-proxy notice;

Using the toll-free phone number listed on the proxy card/voting instruction form; or

Signing, dating and mailing the proxy card in the enclosed postage paid envelope.

ITEMS OF BUSINESS

 

1.

Election of the three directors named in the Proxy Statement to serve three-year terms until the 2022 Annual Meeting and until their successors are duly elected and qualified.

 

2.

Advisory vote to approve executive compensation.

 

3.

Ratification of the appointment of KPMG LLP as ABM’s independent registered public accounting firm for the fiscal year ending October 31, 2019.

 

4.

Transaction of such other business as may properly come before the meeting.

 

RECORD DATE

 

Stockholders of record at the close of business on January 30, 2019 are entitled to notice of, and to vote at the Annual Meeting.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2019 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 27, 2019:

 

The Notice of Annual Meeting, Proxy Statement and the Annual Report to Stockholders

are available on the Internet at www.proxyvote.com.

 

Whether or not you plan to attend the Annual Meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail.

 

By Order of the Board of Directors,

Andrea R. Newborn

Executive Vice President, General Counsel

and Corporate Secretary

 

 

 

 


 

TABLE OF CONTENTS

 

 

 

Page

PROXY STATEMENT SUMMARY

 

i

GOVERNANCE

 

 

CORPORATE GOVERNANCE AND BOARD MATTERS

 

1

PROPOSAL 1–ELECTION OF DIRECTORS

 

2

The Board of Directors

 

9

Corporate Governance

 

10

Identifying and Evaluating Nominees for Directors

 

10

Board Leadership Structure

 

10

Director Independence

 

11

The Board’s Oversight of Risk Management

 

11

Mandatory Retirement

 

11

Committees

 

11

Board and Committee Attendance in Fiscal Year 2018

 

13

Compensation Committee Interlocks and Insider Participation

 

13

DIRECTOR COMPENSATION FOR FISCAL YEAR 2018

 

13

2018 Non-Employee Director Compensation

 

13

2018 Non-Employee Director Compensation Table

 

14

Non-Employee Director Deferred Compensation Plan

 

14

Other Arrangements

 

15

Director Stock Ownership Policy

 

15

EXECUTIVE COMPENSATION

 

 

PROPOSAL 2–ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

17

COMPENSATION DISCUSSION AND ANALYSIS

 

18

Our Compensation Philosophy and Practices

 

18

How We Compensated Our NEOs in 2018

 

22

Other Compensation and Governance-Related Matters

 

28

Compensation Committee Report

 

31

Additional Information About Executive Compensation

 

32

2018 Summary Compensation Table

 

32

Grants of Plan-Based Awards During Fiscal Year 2018

 

33

Outstanding Equity Awards at 2018 Fiscal Year-End

 

34

Option Exercises and Stock Vested in Fiscal Year 2018

 

35

Nonqualified Deferred Compensation in Fiscal Year 2018

 

36

Potential Benefits on Termination

 

36

CEO Pay Ratio

 

40

AUDIT MATTERS

 

 

PROPOSAL 3–RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

42

AUDIT-RELATED MATTERS

 

43

Audit Committee Report

 

43

Principal Accounting Firm Fees and Services

 

44

Policy on Preapproval of Independent Registered Public Accounting Firm Services

 

44

GENERAL INFORMATION

 

 

Certain Relationships and Transactions with Related Persons

 

46

Section 16(a) Beneficial Ownership Reporting Compliance

 

46

Equity Compensation Plan Information

 

46

Security Ownership of Certain Beneficial Owners

 

47

Security Ownership of Directors and Executive Officers

 

48

Questions and Answers About the Proxy Materials and the 2019 Annual Meeting

 

49

Submission of Stockholder Proposals for 2020 Annual Meeting

 

54

Appendix A–Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

 

A-1

 

 


 

 

 

 

PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all the information you should consider. You should read the entire Proxy Statement carefully before voting.

 

 

 

Annual Meeting of Stockholders

 

 

Time and Date:

 

Wednesday, March 27, 2019

10:00 a.m. Eastern Time

 

Place:

 

ABM Industries Incorporated

One Liberty Plaza, 7th Floor

New York, New York 10006

 

 

Record Date:

 

January 30, 2019

 

 

Stockholders of ABM as of the Record Date are entitled to vote. Each share of ABM common stock is entitled to one vote for each director nominee and one vote for each of the other proposals.

 

Voting Matters and Board Recommendations

 

Proposals

Board Vote

Recommendation

Page Reference

(for more detail)

 

01

 

Election of Directors

 

FOR EACH DIRECTOR NOMINEE

 

2

 

02

 

Advisory vote to approve executive compensation

 

FOR

 

 

17

 

03

 

Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2019

 

FOR

 

 

42

 

 

Board Nominees

 

The following table provides summary information about each director who is nominated for election.

 

Name

Age

Director

Since

Occupation

Independent

Committee

Assignments

LeighAnne G. Baker

60

2018

Senior Vice President and

Chief Human Resources Officer, Cargill, Inc.

Yes

*

Sudhakar Kesavan

64

2012

Chairman and Chief Executive Officer, ICF International, Inc.

Yes

Governance

Filippo Passerini

61

2017

Operating Executive, Carlyle Group

Yes

Compensation; Strategy and Enterprise Risk, Chair

*Ms. Baker has not been assigned to any committees of the Board. Committee assignments will be made at the March 2019 Board of Directors meeting immediately following the 2019 Annual Meeting of Stockholders.

ABM Industries Incorporated 2019 Proxy Statement     i


 

 

ABM AT A GLANCE

Substantial Traction With 2020 Vision 

We began our 2020 Vision transformation to better serve our clients and leverage our industry-specific expertise as a key differentiator, with the clear goal of providing more value to our clients, stockholders and team members. Since we began our journey, we have: 

 

 

organized under a vertical industry group structure and centralized key functional areas; 

 

invested in creating a culture of sales and strengthened our sales capabilities; 

 

enhanced our service delivery tools and processes;

 

divested businesses that were not core to our strategy; 

 

added GCA Services Group's strength to ABM; and  

 

improved our employee engagement capabilities. 

 

In fiscal year 2018, we continued that transformational focus while successfully navigating one of the toughest labor markets in American history. Notably we: 

 

 

reported record revenues of $6.4 billion, an increase of 18.1% compared to fiscal year 2017;

 

delivered 4% organic growth compared to 2.6% in fiscal year 2017;

 

achieved nearly $900 million in new sales; 

 

generated more than $200 million in operating cash flow from continuing operations;

 

integrated 30,000 new GCA Services Group team members and $1 billion in revenue;

 

initiated an enterprise-wide technology upgrade;

 

strengthened our senior management team; and

 

added two new members to our Board of Directors.

ii     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

CORPORATE GOVERNANCE AND BOARD HIGHLIGHTS

 

Board Composition

 

The following chart reflects the principal occupation, age, tenure and committee memberships of each member of our Board of Directors (the “Board”). Messrs. Ferguson and Fernandes will retire at the 2019 Annual Meeting of Stockholders in accordance with our Director Retirement Policy. In addition, as previously disclosed, Ms. Martin is retiring from the Board at the 2019 Annual Meeting and will not stand for re-election. Upon the retirements of Messrs. Ferguson and Fernandes and Ms. Martin at the 2019 Annual Meeting, and effective upon the election of directors at the 2019 Annual Meeting, the size of the Board will be reduced to nine members. Our Board expresses its gratitude to Mr. Ferguson, Mr. Fernandes and Ms. Martin for their services and valuable contributions.

 

Name and Principal Occupation

Age

Director

since

Independent

Committee memberships

AC

CC

GC

SER

 

 

 

 

LeighAnne G. Baker*

Senior Vice President and Chief Human Resources Officer, Cargill, Inc.

60

2018

Yes

 

 

 

 

 

 

 

 

 

 

 

 

Linda Chavez

President, Becoming American Institute

71

1997

Yes

 

 

 

 

 

 

 

 

 

 

Donald F. Colleran*

Executive Vice President and Chief Sales Officer, FedEx Corporation

63

2018

Yes

 

 

 

 

 

 

 

 

J. Philip Ferguson**

Former Vice-Chairman, University of Texas Investment Management Company

73

2009

Yes

 

 

 

 

 

 

Anthony G. Fernandes**

Former Chairman, Chief Executive Officer and President of Philip Services Corporation

73

2007

Yes

 

 

 

 

 

 

Art A. Garcia

Executive Vice President and Chief Financial Officer, Ryder System, Inc.

57

2017

Yes

 

 

 

 

 

 

Thomas M. Gartland

Former President, North America of Avis Budget Group, Inc.

61

2015

Yes

 

 

 

 

 

 

Sudhakar Kesavan

Chairman and Chief Executive Officer, ICF International, Inc.

64

2012

Yes

 

 

 

 

 

 

 

Lauralee E. Martin**

Former President and Chief Executive Officer, HCP, Inc.

68

2015

Yes

 

 

 

 

 

 

Filippo Passerini

Operating Executive, Carlyle Group

61

2017

Yes

 

 

 

 

 

Scott Salmirs

President and Chief Executive Officer, ABM Industries Incorporated

56

2015

No

 

 

 

 

 

 

 

 

Winifred (Wendy) M. Webb

Chief Executive Officer, Kestrel Corporate Advisors

60

2014

Yes

 

 

 

Legend:

 

AC – Audit Committee: CC – Compensation Committee; GC – Governance Committee;

SER – Strategy and Enterprise Risk Committee

 

Indicates Committee Chair

 

*

Ms. Baker and Mr. Colleran have not been assigned to any committees of the Board. Committee assignments will be made at the March 2019 Board of Directors meeting immediately following the 2019 Annual Meeting of Stockholders.

 

**

Messrs. Ferguson and Fernandes will be retiring from the Board at the 2019 Annual Meeting of Stockholders in accordance with our Director Retirement Policy. As previously disclosed, Ms. Martin is retiring from the Board at the 2019 Annual Meeting of Stockholders and is not standing for re-election.

ABM Industries Incorporated 2019 Proxy Statement     iii


 

 

Corporate Governance

 

Our Board is committed to thoughtful and independent representation of stockholder interests and corporate governance practices that drive long-term stockholder value. The following points summarize certain aspects of our corporate governance practices:

 

All directors and nominees other than Chief Executive Officer are independent

Robust director and executive officer stock ownership guidelines

Separate Chairman of Board and Chief Executive Officer 

Regular executive sessions of independent directors

99% overall attendance rate at Board and Committee meetings in fiscal year 2018

Risk oversight by Board and Committees

Majority voting with resignation policy for directors in uncontested elections

Annual Board and Committee self-evaluation process

Board is focused on refreshment and director succession planning 

Mandatory director retirement age of 73

Diverse Board that provides a range of viewpoints

Annual Board strategy meeting and review of Company’s strategic plan

 

 

Profile of Our Current Board Members

 

Our Board exhibits an effective mix of experience, skills and perspectives, and our Board and Governance Committee are committed to Board refreshment and diversity: 67% of our Board members have served on the Board for four or fewer years, and 58% of our Board is diverse. All of our Audit Committee members have financial expertise and our Compensation Committee uses an independent compensation consultant. Summary information about our Board is provided below:

 

 

Business Leadership

 

Financial/Investment

12

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industry Experience

 

Risk Oversight

3

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Public Company Board Experience

 

International Business Experience

9

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Independence

Diversity

Tenure

iv     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

EXECUTIVE COMPENSATION HIGHLIGHTS

 

Our Compensation Practices

 

What We Do

   Design Compensation Programs to Pay for Performance

   Use Equity Awards for Long-Term Incentive and Retention

   Maintain a Clawback Policy

   Utilize Short-Term and Long-Term Performance-Based Incentives/Measures

   Use an Independent Compensation Consultant

   Require Significant Share Ownership by Executive Officers

   Limit Perquisites

   Use Double-Trigger Change-in-Control Arrangements

 

What We Don’t Do

   No Fixed-Term Employment Agreements

   No Gross-Ups for Taxes

   No Repricing of Stock Options

   No Hedging and Pledging of ABM Stock

   No Guaranteed Bonuses

 

 

Our Executive Compensation Programs 

In fiscal year 2018, our compensation programs continued to reflect the compensation philosophy established by our Compensation Committee – one that is intended to align our executives’ compensation with our strategic goals, and motivate and retain executives who are critical to our future success and long-term performance. Key features of our compensation philosophy include:

 

Performance-Based Tie significant portions of compensation to performance metrics that align to our short-term and long-term business goals;

Align with Stockholder Interests Align each executive’s interests with stockholders’ interests by requiring significant stock ownership and paying a significant portion of compensation in equity subject to performance conditions and multi-year vesting requirements; and

Market Competitiveness Attract and retain key executives who possess the capability to lead the business forward by providing innovative and effective service to our clients and customers. 

 

Elements of Total Direct Compensation:

Base Salary – Fixed cash compensation with adjustments tied to individual responsibilities, performance and marketplace dynamics;

Annual Cash Incentive Program – Focuses on near-term performance objectives reflecting company strategy;

Performance-Based Equity Grants – Aligns business objectives with longer-term stockholder interests; and

Time-Based Equity Grants – Fosters retention by delivering more stable value and continuity of leadership.

 

 

ABM Industries Incorporated 2019 Proxy Statement     v


 

 

At-Risk Compensation

 

A significant portion of our executives’ compensation is at risk. At-risk compensation includes: annual cash incentive compensation (“bonus”), which is tied to annual financial and individual performance measures; performance-based equity awards, which are paid only if performance metrics established at the beginning of the three-year performance period are met; and time-based equity awards, which vest over a four-year period (collectively, performance and time-based long-term incentive awards are referred to as “LTIs”). As reflected in the following charts, approximately 84% of our CEO’s compensation is at risk. Approximately 71% of our other named executive officers’ (“NEOs”) compensation is at risk.

 

CEO Compensation

Other NEO Compensation

 

 

 

 

 

vi     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

 

 

ABM Industries Incorporated 2019 Proxy Statement     1


 

 

PROPOSAL 1—ELECTION OF DIRECTORS

 

Proposal Summary

 

We are asking our stockholders to elect three nominees to serve on the Board for a three-year term and until their successors are duly elected and qualified. Information about the Board and each director nominee is included in this section. The number of directors is currently fixed at twelve. Upon the retirements of Messrs. Ferguson and Fernandes and Ms. Martin at the 2019 Annual Meeting, and effective upon the election of directors at the 2019 Annual Meeting, the size of the Board will be reduced to nine members.  

 

Board Recommendation

 

The Board unanimously recommends that you vote “FOR” each director nominee.  After consideration of each nominee’s qualifications, skills and experience, as well as his or her prior contributions to our Board, the Board believes that each nominee should continue to serve on the Board.  

 

Voting  

 

Unless contrary instructions are received, the shares represented by a properly executed proxy will be voted “FOR” each of the director nominees presented below. If, at the time of the meeting, one or more of the director nominees has become unavailable to serve, the shares represented by proxies will be voted for the remaining nominees and for any substitute director nominee or nominees designated by the Board unless the size of the Board is reduced. The Board knows of no reason why any of the director nominees will be unavailable or unable to serve.  

 

Director nominees are elected by a majority of the votes cast. This means that the number of shares voted “for” a director’s election must exceed 50% of the number of votes cast for that director’s election. Votes cast include votes “for” and votes “against,” but excludes any abstentions or broker non-votes. Any nominee who does not receive a majority of votes cast “for” his or her election will be required to tender his or her resignation promptly following the failure to receive the required vote. The Governance Committee will then be required to make a recommendation to the Board as to whether the Board should accept the resignation, and the Board will be required to decide whether to accept the resignation.

 

 

Nominees for Election to Serve as Directors for a Term Expiring in 2022

 

 

LeighAnne G. Baker

Director Since 2018

Age 60

Senior Vice President and Chief Human Resources Officer, Cargill, Inc.

Ms. Baker is senior corporate vice president and chief human resources officer of Cargill, Inc., a global food and agricultural company, a position held since 2014. She is a member of the executive team and responsible for Cargill’s global human resources strategy and practices. Previously, Ms. Baker served as executive vice president and chief human resources officer of Hertz Global Holdings, Inc. from 2007 to 2014. Ms. Baker also served as senior vice president, global human resources of The Reynolds & Reynolds Company from 2005 to 2007.

 

Ms. Baker’s qualifications to serve on our Board include many years of executive experience for large enterprises, providing extensive expertise in global human resources management, leadership development and large scale organizational change.

 

2     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

 

Sudhakar Kesavan

Director Since 2012

Age 64

Chairman and Chief Executive Officer, ICF International, Inc.

Mr. Kesavan is chairman and chief executive officer of ICF International, Inc. (NASDAQ: ICFI) a leading provider of consulting services and technology solutions to government and commercial clients, a position held since 1999. He has also been a director of ICF International since June 1999. Previously, Mr. Kesavan served as the president of ICF Consulting Group, a subsidiary of ICF Kaiser, from 1997 to 1999. Mr. Kesavan serves on the board of the Northern Virginia Technology Council. He also serves as board member emeritus of the Rainforest Alliance, a New York-based nonprofit environmental organization, on the board of Inova Health Systems, a not-for-profit healthcare system based in Northern Virginia, and is a trustee of the Shakespeare Theater Company in Washington, DC.

 

Mr. Kesavan’s qualifications to serve on our Board include his leadership and operational experience gained from serving as a chief executive officer and director of another public company. Mr. Kesavan brings valuable experience leading both organic growth and acquisition activities, a thorough understanding of corporate governance, compensation expertise, and operations, industry, public company board, financial, mergers and acquisitions, government and government relations, and global operations experience to our Board.

 

 

Filippo Passerini

Director Since 2017

Age 61

Operating Executive, Carlyle Group

Mr. Passerini has been an operating executive in U.S. Buyouts at Carlyle Group since 2015. Previously, Mr. Passerini served as Procter & Gamble Company’s group president, Global Business Services (GBS) and chief information officer (CIO), positions he held since February 2008 and July 2004, respectively. Mr. Passerini joined Procter & Gamble, a leading multinational manufacturer of consumer goods, in 1981 and held executive positions in the United Kingdom, Greece, Italy, Turkey, Latin America and the United States. While with Procter & Gamble, he built and led one of the largest and most progressive Shared Services organizations in the world, operating in 70 countries. Mr. Passerini has served as a director of Integer Holdings Corporation (NYSE: ITGR) since 2015 and of United Rentals, Inc. (NYSE: URI) since 2009. He is a member of the CIO Hall of Fame and has received numerous awards, including: the inaugural Fisher-Hopper Prize for Lifetime Achievement in CIO Leadership; Shared Service Thought Leader of the Year; and InformationWeek’s Chief of the Year. His work, strategies and principles have been the subject of numerous books, articles and Harvard Business Reviews.

Mr. Passerini’s qualifications to serve on our board include his significant global experience in operations, technology and general management roles. He is recognized as a thought leader in digital technology and shared services, and known for creating new, progressive business models and driving innovation. Mr. Passerini brings extensive experience in operations, information technology and shared services, as well as public company board experience to our Board.

 

ABM Industries Incorporated 2019 Proxy Statement     3


 

 

 

Directors Whose Terms Expire in 2021

 

Linda Chavez

Director Since 1997

Age 71

President, Becoming American Institute

Ms. Chavez is the president of the Becoming American Institute, a position she has held since 2014. Additionally, she is founder and chairman of the Center for Equal Opportunity, a position she has held since January 2006. Prior to her appointment as chairman, Ms. Chavez served as president of the Center for Equal Opportunity from January 1995 through December 2005. Ms. Chavez was a director of Pilgrim’s Pride Corporation from 2004 to 2008, where she served on the audit committee. Previously, she was a director of Greyhound Lines, Inc. from 1995 to 1999, when it was acquired by another company. Ms. Chavez has held numerous appointed positions, including chief executive officer of the National Commission on Migrant Education from 1988 to 1992, chief executive officer of the U.S. Commission on Civil Rights from 1983 to 1985, and White House director of public liaison in 1985. In 1992, she was elected by the United Nations Commission on Human Rights to serve a four-year term as U.S. Expert to the U.N. Sub-Commission on the Prevention of Discrimination and Protection of Minorities. She is a 2006 graduate of the UCLA Anderson Graduate School of Management Director Training and Certification Program and served on the advisory board of the Outstanding Directors Exchange in 2008 and 2009, and served on the board of Research Electro-Optics, a privately held company, from 2012 to 2018. Ms. Chavez also serves or has served on numerous nonprofit boards. She is an author and nationally syndicated columnist and television commentator and writes extensively about public policy issues.

 

Ms. Chavez’s qualifications to serve on our Board include her extensive knowledge of, and experience in, government relations, and her leadership skills and corporate governance experience gained during her service as a public company director and her involvement with nonprofit organizations. Ms. Chavez brings valuable public company board experience, compensation expertise, financial experience, public policy experience, and government and government relations experience to our Board.

 

 

Art A. Garcia

Director Since 2017

Age 57

Executive Vice President and Chief Financial Officer, Ryder System, Inc.

Mr. Garcia is the executive vice president and chief financial officer of Ryder System, Inc., a $6.8 billion commercial fleet and supply chain management solutions company, a position held since 2010. He is a member of Ryder’s executive leadership team. Previously, Mr. Garcia served as senior vice president, controller and chief accounting officer of Ryder from 2005 to 2010. Mr. Garcia joined Ryder in 1997 as senior manager of corporate accounting. He later served as director of corporate accounting and, subsequently, as group director of accounting services. Prior to joining Ryder, Mr. Garcia spent 14 years with the Miami office of the accounting firm Coopers & Lybrand LLP as senior manager of business assurance.

 

Mr. Garcia’s qualifications to serve on our Board include his extensive business, financial and management experience and his experience as a senior financial officer. Mr. Garcia brings valuable accounting, financial management and supply chain experience to our Board.

 

4     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

 

Scott Salmirs

Director Since 2015

Age 56

President and Chief Executive Officer, ABM Industries Incorporated

Mr. Salmirs is president and chief executive officer of the Company, a position held since March 2015. Previously, he served as executive vice president of the Company from September 2014 to March 2015, with global responsibility for the Company’s aviation division and all international activities. Mr. Salmirs served as executive vice president of ABM Janitorial Services – Northeast from 2003 to December 2014. Prior to joining the Company, Mr. Salmirs held various leadership positions at Goldman, Sachs & Company, Lehman Brothers, Inc., and CBRE. Mr. Salmirs also serves on the board of Outreach, a New York nonprofit organization dedicated to rehabilitating teens with substance abuse issues, is a founding board member of Donate Eight, a nonprofit group associated with LiveOnNY, and also serves on the Business Advisory Council for the business program at SUNY Oneonta.

 

Mr. Salmirs’ qualifications to serve on our Board include his experience in the facility services industry, and his knowledge of and perspective on the Company as its president and chief executive officer. Mr. Salmirs brings valuable leadership skills and operations, financial management, industry, mergers and acquisitions, sales and marketing, and global operations experience to the Board.

 

 

 

Directors Whose Terms Expire in 2020

 

Donald F. Colleran

Director Since 2018

Age 63

Executive Vice President and Chief Sales Officer, FedEx Corporation

Mr. Colleran is executive vice president and chief sales officer of FedEx Corporation, a position held since 2017. He also serves on the Strategic Management Committee, which sets the strategic direction for FedEx. Mr. Colleran joined FedEx in 1989, where he has served in a variety of leadership roles including executive vice president, global sales of FedEx Services from July 2006 through December 2016. He is also a director of EastGroup Properties, Inc. (NYSE: EGP), an equity real estate investment trust.

 

Mr. Colleran’s qualifications to serve on our Board include his extensive experience in a variety of leadership roles at a major, multinational company, including business, sales, leadership, and global operations. Mr. Colleran also brings public company experience to our Board.

 

ABM Industries Incorporated 2019 Proxy Statement     5


 

 

 

Thomas M. Gartland

Director Since 2015

Age 61

Former President, North America of Avis Budget Group, Inc.

Mr. Gartland retired in December 2014 from his role as president, North America for Avis Budget Group, Inc., a leading global provider of vehicle rental services, a position he held from October 2011 to December 2014. Previously, he was executive vice president, Sales, Marketing and Customer Care at Avis Budget Group, Inc. from April 2008 to October 2011, where he developed the overall strategic direction for marketing and sales. Mr. Gartland was employed by JohnsonDiversey, Inc. from 1994 to 2008, in various high-level capacities, including as president of the company’s North American region from 2003 to 2008, vice president, Sales, Health and Hospitality from 2002 to 2003, vice president, Business Development from 1998 to 2002, with various positions of increasing responsibility within the company from 1994 to 1998. Prior to that, Mr. Gartland served as vice president and director of national accounts at Ecolab, Inc. from 1980 to 1994. Mr. Gartland serves on the board of directors of Xenia Hotels & Resorts, Inc. (NYSE: XHR), a self-advised and self-administered REIT that invests primarily in premium full-service, lifestyle and urban upscale hotels.

 

Mr. Gartland’s qualifications to serve on our Board include his extensive experience in senior executive positions at major, multinational companies, including sales, operations, financial management, leadership, and mergers and acquisitions. He also brings public company board experience to our Board.

 

 

Winifred (Wendy) M. Webb

Director Since 2014

Age 60

Chief Executive Officer, Kestrel Corporate Advisors

Ms. Webb is chief executive officer of Kestrel Corporate Advisors, a position she has held since 2013. From 2010 to 2013, she was managing director for Tennenbaum Capital Partners, now part of BlackRock. Ms. Webb was a member of the corporate executive team for Ticketmaster from 2008 to 2010. She served for 20 years with The Walt Disney Company, from 1988 to 2008, in various senior positions including corporate senior vice president of investor relations and shareholder services, and governance outreach. She was also executive director for The Walt Disney Company Foundation. Before Disney, she held roles in investment banking. Ms. Webb is an NACD Board Leadership Fellow, the highest level of credentialing for corporate directors offered by The National Association of Corporate Directors. She serves on the board of directors of Wynn Resorts, Limited (NASDAQ: WYNN) and on the board of trustees of American Homes 4 Rent (NYSE: AMH). She previously served on the boards of 9 Spokes (ASX: 9SP) from 2015 to 2018, of TiVo Inc. (NASDAQ: TIVO) in 2016, of Jack in the Box Inc. (NASDAQ: JACK) from 2008 to 2014, and of nonprofit PetSmart Charities, Inc. from 2014 to 2016. She currently serves as co-chair of nonprofit WomenCorporateDirectors, LA/Orange County Chapter. In 2018, Ms. Webb was recognized by NACD as a Directorship 100 honoree, by WomenInc. as a Most Influential Corporate Board Director, and by Directors & Boards as a Director to Watch.

 

Ms. Webb’s qualifications to serve on our Board include her experience in senior management at global public companies and her experience in the global financial services industry. Ms. Webb brings valuable public company board, finance, investor relations, operations, communications, media and public relations, treasury, corporate governance, sales and marketing, global operations, corporate social responsibility, strategic planning, mergers and acquisitions, investment banking and capital markets experience to our Board.

 

6     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

Directors Who Will Retire at the 2019 Annual Meeting of Stockholders

 

J. Philip Ferguson

Director Since 2009

Age 73

Former Vice-Chairman, University of Texas Investment Management Company

Mr. Ferguson has spent over 45 years in the investment management business, currently serving on the board of managers of Salient Partners, on the investment committee for Silver Ventures, on the investment board for San Manuel Band of Mission Indians, and as non-executive chair of the investment committee of Ascendant Advisors. Mr. Ferguson served until April 2012 on the board of directors of the University of Texas Investment Management Company (UTIMCO), a position he held since August 2003. He chaired the UTIMCO compensation committee and served on its risk and policy committees. Mr. Ferguson also serves on the advisory committee of the MBA Investment Fund at the McCombs School of Business at the University of Texas – Austin, a position held since March 2005, and is a member of the Investment Committee for Houston Endowment Inc. Mr. Ferguson held various executive positions with AIM Capital Management, Inc. (now Invesco AIM) from 2000 to 2007, serving most recently as president and chief investment officer. Previously, he held senior positions at several investment management firms, including: managing partner at Beutel, Goodman & Company; senior vice president at Lehman Brothers, Inc.; and vice president of Goldman, Sachs & Company. Mr. Ferguson also serves or has served on various investment and civic boards, including the Investment Advisor Association, the Houston Ballet, the Memorial Hermann Foundation, Museum of Fine Arts, Houston, and on the Chancellor’s Advisory Council of Texas Christian University.

 

 

 

Anthony G. Fernandes

Director Since 2007

Age 73

Former Chairman, Chief Executive Officer and President of Philip Services Corporation

Mr. Fernandes served as chairman, chief executive officer and president of Philip Services Corporation from August 1999 to April 2002. Prior to joining Philip Services Corporation, Mr. Fernandes had a 30-year career with the Atlantic Richfield Company (ARCO), serving as executive vice president and director of ARCO from 1994 to 1999; president of ARCO Coal, a subsidiary of ARCO, from 1990 to 1994; and corporate controller of ARCO from 1987 to 1990. He also served as the chairman of ARCO Chemical Company, a NYSE company 80% owned by ARCO. Additionally, he was a trustee for the Claremont McKenna College, a California Institution from 1997 to 2005, a director of Tower Automotive, Inc. from 2003 to 2007, a director of Black and Veatch from 1999 to 2016, a director of Cytec Industries from 2002 to 2015, a director of Baker Hughes Incorporated from 2001 to 2017, and a director of Envirosystems, Inc., a privately held Canadian company, from 2015 to 2018. Mr. Fernandes currently serves as a director of Snack It Forward LLC, a privately held snack company.

ABM Industries Incorporated 2019 Proxy Statement     7


 

 

 

Lauralee E. Martin

Director Since 2015

Age 68

Former President and Chief Executive Officer of HCP, Inc.

Ms. Martin served as chief executive officer and president of HCP, Inc., a real estate investment trust focusing on properties serving the healthcare industry, from October 2013 to July 2016. Prior to joining HCP in October 2013, Ms. Martin was employed by Jones Lang LaSalle Incorporated, one of the world’s leading real estate services and money management firms, in various high-level capacities, including as chief executive officer, Americas beginning in January 2013. Prior to that, she was executive vice president and chief financial officer since January 2002, and was appointed to the additional position of chief operating officer in January 2005. Ms. Martin served on its board of directors from 2005 until May 2013. Ms. Martin previously held positions with Heller Financial as its chief financial officer, senior group president – Heller Financial Real Estate, Equipment Financing and Small Business Lending and served as president of its Real Estate group. Ms. Martin was also a member of the Heller Financial board of directors. Ms. Martin has served on the board of directors of Kaiser Aluminum Corporation (NASDAQ: KALU) since 2010, and on the board of directors of QuadReal Property Group since December 2016. She previously served as a director of HCP, Inc. from 2008 to July 2016, of KeyCorp from 2003 through 2010, and of Gables Residential Trust from 1994 through 2005. Ms. Martin served as a trustee of the Urban Land Institute and the International Council of Shopping Centers.

 

8     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

The Board of Directors

 

Our Board of Directors (the “Board”) is divided into three classes serving staggered three-year terms. Directors whose terms expire in 2019 are LeighAnne G. Baker, Sudhakar Kesavan, Lauralee E. Martin, and Filippo Passerini. Messrs. Ferguson and Fernandes will retire at the 2019 Annual Meeting of Stockholders in accordance with our Director Retirement Policy. In addition, as previously disclosed, Ms. Martin is retiring from the Board at the 2019 Annual Meeting and will not stand for re-election. Upon the retirements of Messrs. Ferguson and Fernandes and Ms. Martin at the 2019 Annual Meeting, and effective upon the election of directors at the 2019 Annual Meeting, the size of the Board will be reduced to nine members.

 

Mr. Colleran and Ms. Baker, who were appointed to the Board in September 2018 and October 2018, respectively, have not yet been appointed to Board Committees as of the date of this Proxy Statement. New Board Committee assignments will be made at the March 2019 Board meeting immediately following the 2019 Annual Meeting of Stockholders. Each independent member of the Board is eligible to serve on any Committee of the Board.

 

 

Committee

Qualifications

Name and

Current Position

Age

Director Since

Independent

Audit

 

Compensation

Governance

Strategy and Enterprise Risk

Business Leadership

Industry Experience

Public Company Board

Financial/Investment

Risk Oversight

International Business

LeighAnne G. Baker

  Senior Vice President and Chief Human Resources
  Officer, Cargill, Inc.

60

2018

YES

 

 

 

 

 

 

Linda Chavez

  President, Becoming American Institute

71

1997

YES

 

Chair

 

 

 

Donald F. Colleran

  Executive Vice President and Chief Sales Officer,
  FedEx Corporation

63

2018

YES

 

 

 

 

 

J. Philip Ferguson

  Former Vice Chairman, University of Texas Investment
  Management Company

73

2009

YES

 

 

 

 

Anthony G. Fernandes

  Former Chairman, Chief Executive Officer and President,
  Philip Services Corporation

73

2007

YES

Chair

 

 

 

Art A. Garcia

  Executive Vice President and Chief Financial Officer,  
  Ryder Systems, Inc.

57

2017

YES

 

 

 

 

Thomas M. Gartland

  Former President, North America of Avis Budget Group, Inc.

61

2015

YES

 

Chair

 

 

Sudhakar Kesavan*

  Chairman and Chief Executive Officer, ICF International, Inc.

64

2012

YES

 

 

 

Lauralee E. Martin

Former President and Chief Executive Officer, HCP, Inc.

68

2015

YES

 

 

Filippo Passerini

  Operating Executive, Carlyle Group

61

2017

YES

 

 

Chair

 

Scott Salmirs

  President and Chief Executive Officer, ABM Industries

  Incorporated

56

2015

NO

 

 

 

 

 

Winifred M. Webb

  Chief Executive Officer, Kestrel Corporate Advisors

60

2014

YES

 

 

 

*As Chairman of the Board, Mr. Kesavan attends all committee meetings and is a member of the Governance Committee.

ABM Industries Incorporated 2019 Proxy Statement     9


 

 

Corporate Governance

Our Board has adopted Corporate Governance Principles that reflect our commitment to sound corporate governance and the role of governance in building long-term stockholder value. Our Corporate Governance Principles, which include our independence standards, can be found on our website at http://investor.abm.com/corporate-governance.cfm. Other information relating to our corporate governance is also available on our website at the same address, including our Bylaws, our Code of Business Conduct, and the Charters of our Audit Committee, Compensation Committee, Governance Committee, and Strategy and Enterprise Risk Committee. These documents are also available in printed hard-copy format upon written request to the Corporate Secretary at the Company’s corporate headquarters.

Identifying and Evaluating Nominees for Directors

Our Board is responsible for selecting nominees for election as directors. The Board delegates the screening process to the Governance Committee with the expectation that other members of the Board will participate in this process, as appropriate. The Governance Committee periodically reviews the skills and types of experience that it believes should be represented on the Board in light of the Company’s current business needs and strategy. The Governance Committee then uses this information to consider whether all of the identified skills and experience are represented on the Board. Based upon its review, the Governance Committee may recommend to the Board that the expertise of the current members should be supplemented. The Governance Committee takes these factors into account when looking for candidates for the Board. Candidates recommended by the Governance Committee are subject to approval by the full Board. Our Governance Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are anticipated because of retirement or otherwise. In the event that any vacancy is anticipated, or otherwise arises, the Governance Committee considers various potential candidates for director.

Our Governance Committee recommends to the Board the criteria for director candidates, and the Board establishes the criteria. The Governance Committee is also responsible for reviewing with the Board the requisite skills and characteristics of new Board candidates and current Board members in the context of the current composition of the Board.

In analyzing director nominations and director vacancies, our Governance Committee seeks to recommend candidates for director positions who will create a collective membership on the Board with varied experience and perspectives. The Governance Committee believes that this will contribute to a Board that reflects diversity, including, but not limited to, gender, ethnicity, background and experience. We do not have a policy that requires specified types of diverse backgrounds. The Governance Committee strives to recommend candidates who demonstrate leadership and significant experience in a specific area or endeavor, understand the role of a public company director and can provide insights and practical wisdom based on their experience and expertise.

The Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director, such as search firms and the relationships of current directors. Candidates may also come to the attention of the Governance Committee through stockholders or other persons. These candidates are evaluated at regular or special meetings of the Governance Committee and may be considered at any point during the year.

Our directors are expected to prepare for, attend and participate in Board meetings and meetings of the Committees of the Board on which they serve. They are also expected to meet as frequently and spend as much time as necessary to properly discharge their responsibilities and duties as directors and to arrange their schedules so that other existing and planned future commitments do not materially interfere with their service as a director. Ordinarily, directors who are full-time employees of ABM or who serve as chief executive officers or in equivalent positions at other companies may not serve on the boards of more than two other publicly traded companies. Other directors may not serve on the boards of more than four other publicly traded companies. Service on other boards and other commitments are considered by the Governance Committee and the Board when reviewing Board candidates.

Board Leadership Structure

The Company currently has separate persons serving as its Chairman and its Chief Executive Officer, in recognition of the differences between the two roles. The Chief Executive Officer (Mr. Salmirs) has general and active management over the business and affairs of the Company, subject to the control of the Board. The Chairman of our Board (Mr. Kesavan) is charged with presiding over all meetings of the Board and our stockholders, as well as providing advice and counsel to the Chief Executive Officer, coordinating the preparation of agendas, keeping directors informed of matters impacting the Company, and maintaining contact with the Company’s General Counsel. The Board believes that at this time, the separation of these roles is the most appropriate and effective leadership structure for the Company and its stockholders.

10     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

Director Independence

Our Corporate Governance Principles provide that a majority of our directors must be independent; Further, the Committee Charters for our Audit Committee, Compensation Committee and Governance Committee require all members be independent, while the Committee Charter for our Strategy and Enterprise Risk Committee requires all members be non-management directors. Each year, our Governance Committee reviews the independence of each of our directors under applicable New York Stock Exchange (“NYSE”) listing standards and considers any current or previous employment relationships as well as any transactions or relationships between our Company and our directors or any members of their immediate families (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder). The purpose of this review is to determine whether any relationships or transactions exist that preclude a director from being deemed independent under applicable NYSE listing standards or are otherwise inconsistent with a determination that the director is independent.

Our Governance Committee has affirmatively determined and recommended to our Board, and the Board has agreed, that all of our directors, other than our Chief Executive Officer, should be designated as independent.

The Board’s Oversight of Risk Management

Company management is responsible for day-to-day risk management activities. The Board, acting directly and through its committees, is responsible for the oversight of the Company’s risk management. Our management has implemented an enterprise risk management (ERM) process designed to work across the Company to identify, assess, govern and manage risks and the Company’s response to those risks.

Our Strategy and Enterprise Risk Committee assists the Board in its oversight of the overall ERM program, including risks relating to operations.

Our Audit Committee oversees risks relating to our accounting, reporting and financial practices, including financial controls, and our compliance with certain legal and regulatory requirements.

Our Compensation Committee oversees compensation-related risk management, as discussed in “Compensation Discussion and Analysis” later in this Proxy Statement.

Our Governance Committee oversees risks associated with board structure and other corporate governance policies and practices.

In fulfilling their oversight responsibilities, all committees receive regular reports on their respective areas of responsibility from members of management. Each committee reports regularly to the full Board on its activities, including on matters relating to risk oversight. In addition, the Board participates in regular discussions in executive sessions led by the Chairman of the Board and with the Company’s senior management on many key subjects, including strategy, industry group performance, operations, information systems, finance, and legal.

The Board’s Role in Cybersecurity Risk Oversight

Enterprise cybersecurity risk management is an important focus of our Board and its Strategy and Enterprise Risk Committee. As part of their oversight of risk management, the Board and the Strategy and Enterprise Risk Committee each receive regular reports and updates from the Company’s Chief Information Officer. Such reports cover the Company’s information technology security program, including its current status, capabilities, objectives and plans, as well as the evolving cybersecurity threat landscape.  

Mandatory Retirement

The Board has adopted a mandatory retirement policy for non-employee directors. Under this policy, a director who attains the age of 73 during his or her current term must resign from the Board effective upon the conclusion of the annual stockholders meeting next following his or her 73rd birthday.

Committees

The Board has four standing committees: the Audit Committee, the Compensation Committee, the Governance Committee and the Strategy and Enterprise Risk Committee. Each committee is composed solely of independent directors, meets periodically throughout the year, reports its actions and recommendations to the Board, receives reports from senior management, meets regularly in executive session, annually evaluates its performance and has the authority to retain outside advisors. Annually, or more frequently, as needed, our Governance Committee reviews

ABM Industries Incorporated 2019 Proxy Statement     11


 

 

committee assignments and makes recommendations to the Board with respect to committee membership, taking into consideration each director’s qualifications and the desire to refresh committee membership. The primary responsibilities of each committee, as well as membership of each committee, as of the date of this Proxy Statement, are summarized below. Each committee is governed by a charter, which sets forth the applicable responsibilities for each committee.  For more information, see the committee charters on the corporate governance section of our website at http://investor.abm.com/corporate-governance.cfm.

 

Audit Committee

 

 

Anthony G. Fernandes, Chair

J. Philip Ferguson

Art A. Garcia

Lauralee E. Martin

Winifred M. Webb

 

Key Oversight Responsibilities

 

 

 Independent auditor, including audit/nonaudit services provided

 Scope and results of the independent auditor’s audit

 Financial reporting activities and accounting standards/principles used

 Internal audit functions

 Disclosure controls and internal controls

 

 

The Board has determined that each member of the Audit Committee is financially literate and that each qualifies as an “audit committee financial expert” under applicable Securities and Exchange Commission rules.

 

 

 

The Audit Committee met six times in fiscal year 2018.

 

Compensation Committee

 

 

Thomas M. Gartland, Chair

Linda Chavez

Lauralee E. Martin

Filippo Passerini

Key Oversight Responsibilities

 

 

 CEO compensation and evaluation

 Executive incentive compensation

 Equity plan and awards

 Review of compensation structure

 Executive employment and severance agreements

 

 

 

The Compensation Committee met seven times in fiscal year 2018.

 

Governance Committee

 

 

Linda Chavez, Chair

J. Philip Ferguson

Thomas M. Gartland

Sudhakar Kesavan

Key Oversight Responsibilities

 

 

 Director recruitment

 Corporate governance

 Board committee structure and membership

 Director compensation

 Executive and Board Succession planning

 

 

 

The Governance Committee met five times in fiscal year 2018.

 

Strategy and Enterprise Risk Committee

 

 

Filippo Passerini, Chair

Anthony G. Fernandes

Art A. Garcia

Winifred M. Webb

 

Key Oversight Responsibilities

 

 

 Strategy development

 Strategy implementation

 Enterprise risk assessment

 

 

 

The Strategy and Enterprise Risk Committee met four times in fiscal year 2018.

 

12     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

Board and Committee Attendance in Fiscal Year 2018 

During fiscal year 2018, the Board held eight meetings. Together, the directors attended 99% of the combined total meetings of the full Board and the committees on which they served in fiscal year 2018, and no director attended less than 93% of the combined total meetings of the full Board and the committees on which he or she served in fiscal year 2018. Our Board meets in executive session during each regularly scheduled Board meeting, with the Chairman of the Board presiding at such executive sessions, and may meet in executive session during specially called meetings.

Our directors attend our annual meetings of stockholders, absent a conflict or other extenuating circumstances. Each of our then serving directors attended the 2018 Annual Meeting of Stockholders.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee during fiscal year 2018 or as of the date of this Proxy Statement is or has been an officer or employee of the Company, and no executive officer of the Company served on the compensation committee or board of any company that employed any member of the Company’s Compensation Committee or Board.

 

DIRECTOR COMPENSATION FOR FISCAL YEAR 2018

ABM compensates non-employee directors through a combination of annual cash retainers, fees relating to chairing or serving on a committee, and equity grants. ABM also reimburses its directors for out-of-pocket expenses incurred in attending Board and Committee meetings. Equity awards to non-employee directors are granted under our stockholder-approved 2006 Equity Incentive Plan. The Governance Committee reviews the compensation of non-employee directors periodically and recommends changes to the Board whenever it deems appropriate. Semler Brossy Consulting Group, LLC (“Semler Brossy”), the Compensation Committee’s independent consultant, periodically provides information regarding non-employee director compensation to the Governance Committee.

2018 Non-Employee Director Compensation Elements

 

Compensation Element

2018 Compensation Program

Annual Board Cash Retainer

    $175,000 for Chairman of the Board

    $80,000 for other non-employee directors

Annual Board Equity Retainer

    $175,000 for Chairman of the Board (vesting after one year)

    $125,000 for other non-employee directors (vesting after one year)

Board and Committee Attendance Fees

None

Annual Chair Cash Fees

    $15,000 for Audit Chair

    $10,000 for Compensation Chair

    $7,500 for Governance Chair

    $7,500 for Strategy and Enterprise Risk Chair

Annual Committee Member Retainer*

 

*The Chairman of the Board does not receive a separate retainer for Committee memberships

    $20,000 for Audit members

    $12,500 for Compensation members

    $10,000 for Governance members

    $10,000 for Strategy and Enterprise Risk members

Ad Hoc Committee Service or Investment of Significant Time Above and Beyond the Requirements of Board or Committee Service*

    $2,000 per day*

*The Chairman of the Board is not eligible to receive such payments

*No directors received any such payments in 2018

ABM Industries Incorporated 2019 Proxy Statement     13


 

 

2018 Non-Employee Director Compensation Table

 

 

Fees

Earned or

Paid in

Cash(1)

 

Stock

Awards(2)

 

All Other

Compensation(3)

 

Total

 

  Name of Director

($)

 

($)

 

($)

 

($)

 

  LeighAnne G. Baker

 

1,935

 

-

 

-

 

 

1,935

 

  Linda Chavez

 

110,000

 

 

124,994

 

 

10,127

 

 

245,121

 

  Donald F. Colleran

 

13,333

 

 

41,644

 

-

 

 

54,977

 

  J. Philip Ferguson

 

110,000

 

 

124,994

 

 

5,595

 

 

240,589

 

  Anthony G. Fernandes

 

125,000

 

 

124,994

 

 

27,814

 

 

277,808

 

  Art A. Garcia

 

110,000

 

 

124,994

 

 

3,088

 

 

238,082

 

  Thomas M. Gartland

 

112,500

 

 

124,994

 

 

4,968

 

 

242,462

 

  Sudhakar Kesavan(4)

 

175,000

 

 

174,976

 

 

6,689

 

 

356,665

 

  Lauralee E. Martin

 

112,500

 

 

124,994

 

 

4,968

 

 

242,462

 

  Filippo Passerini

 

110,000

 

 

124,994

 

 

3,088

 

 

238,082

 

  Winifred M. Webb

 

110,000

 

 

124,994

 

 

9,484

 

 

244,478

 

 

(1)

Amount includes annual Board cash retainers and Committee cash fees.

(2)

The value of stock awards shown in the “Stock Awards” column is based on the grant date fair value computed in accordance with FASB ASC Topic No. 718. The grant date fair value of the equity awards shown in the “Stock Awards” column is based on the closing price of the Company’s common stock on the date of grant of the equity award. A director who becomes a Board member following the date of the last held annual meeting of stockholders receives a prorated grant of restricted stock units (“RSUs”) based on the date that he or she joined the Board. As Mr. Colleran was named to the Board in September 2018, he received a prorated grant of 1,227 RSUs on September 11, 2018. As Ms. Baker was named to the Board in October 2018, she received a prorated grant of 691 RSUs on December 21, 2018, which was in fiscal year 2019. In addition, each non-employee director who was expected to continue on the Board after the 2018 Annual Meeting received an annual grant on January 4, 2018. For each then-current director, with the exception of Mr. Kesavan, the grant for 2018 on January 4, 2018 was 3,261 RSUs, which was calculated by dividing $125,000 by $38.33. For Mr. Kesavan, the grant for 2018 on January 4, 2018 was 4,565 RSUs, which was calculated by dividing $175,000 by $38.33. Director RSUs granted in fiscal year 2018 vest on the first anniversary of the grant date, except that in the case of a mandatory retirement, RSUs immediately vest upon retirement. RSUs held by each director as of October 31, 2018 were: Ms. Chavez, 14,404; Mr. Colleran, 1,227; Mr. Ferguson, 7,604; Mr. Fernandes, 40,195; Mr. Garcia, 4,912; Mr. Gartland, 6,656; Mr. Kesavan, 8,840; Ms. Martin, 6,656; Mr. Passerini, 4,912; and Ms. Webb, 14,166. As of October 31, 2018, the aggregate number of stock options (relating to grants prior to 2006) held by Ms. Chavez was 6,000.

(3)

Amounts shown include value of dividend equivalents (DEUs) credited in fiscal year 2018 with respect to RSUs to non-employee directors. DEUs are settled in Company stock when the underlying RSUs vest. Directors who defer RSUs under the Deferred Compensation Plan for Non-Employee Directors do not receive DEUs on deferred RSUs until the underlying RSUs are paid out. For Mr. Kesavan, the amount shown includes $689 in family/spousal travel.

(4)

Chairman of the Board.

Non-Employee Director Deferred Compensation Plan

Non-employee directors are eligible to participate in the ABM Deferred Compensation Plan for Non-Employee Directors (“Director Deferred Compensation Plan”). Plan participants may elect to defer receipt of all or any portion of their annual cash retainers and fees until they cease to be members of the Board, or to specified withdrawal dates (at least three years after their election), in accordance with the terms of the Director Deferred Compensation Plan. The amounts held in each director’s account are credited with interest quarterly at a rate based on the prime interest rate published in the Wall Street Journal on the last business day coinciding with or next preceding the valuation date. In addition, the Director Deferred Compensation Plan permits directors to defer the settlement of Director RSUs to a date later than the vesting date.

 

14     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

Other Arrangements

ABM has entered into indemnification agreements with its directors. Among other things, these agreements require ABM to indemnify its directors to the fullest extent provided by Delaware law against certain liabilities that may arise in connection with their service as directors. ABM permits non-employee directors who were members of the Board on or before October 31, 2012 to participate in ABM’s health benefit plans. Directors who elect to participate pay the entire direct costs of participation in such plans. This benefit is not available to directors who join the Board after October 31, 2012. No directors are currently participating in ABM’s health benefit plans.

Director Stock Ownership Policy

Our Director Stock Ownership Policy requires directors to hold common stock (including unvested or deferred RSUs) having a value equivalent to five times his or her annual cash retainer within five years of becoming a director. Under this policy, directors who are not at their targeted stock ownership level within the five-year period must hold at least 50% of any net shares realized until they reach their target. “Net shares realized” means unrestricted shares acquired by a director under the 2006 Equity Incentive Plan or acquired pursuant to the exercise of an option, net of any shares sold to pay the exercise price. All directors are either at or above the targeted stock ownership levels or are still within the initial five-year period.

Pursuant to our anti-hedging and pledging policy, none of our directors is permitted to hedge or pledge shares of ABM’s common stock.

 

 

 

ABM Industries Incorporated 2019 Proxy Statement     15


 

 

 

EXECUTIVE COMPENSATION

 

PROPOSAL 2ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

 

COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Philosophy and Practices

How We Compensated Our NEOs in 2018

Other Compensation and Governance-Related Matters

Compensation Committee Report

Additional Information About Executive Compensation

2018 Summary Compensation Table

Grants of Plan-Based Awards During Fiscal Year 2018

Outstanding Equity Awards at 2018 Fiscal Year-End

Option Exercises and Stock Vested in Fiscal Year 2018

Nonqualified Deferred Compensation in Fiscal Year 2018

Potential Benefits on Termination

Potential Payments upon Qualifying Terminations of Employment Following a Change-in-Control

Potential Payments upon Retirement

Potential Payments upon Termination without Cause

Potential Payments upon Death or Disability

CEO Pay Ratio

16     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

PROPOSAL 2—ADVISORY VOTE TO APPROVE

EXECUTIVE COMPENSATION

 

Proposal Summary

We are asking our stockholders to approve, on an advisory basis, the Company’s executive compensation policies and practices as described in the Compensation Discussion and Analysis, accompanying tables and related narrative contained in this Proxy Statement.

Board Recommendation

The Board unanimously recommends that you vote “FOR” the following resolution:

RESOLVED—that the stockholders approve, on an advisory basis, the compensation of the Company’s executives named in the Summary Compensation Table, as disclosed in the Company’s 2019 Proxy Statement pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, which disclosure includes the Compensation Discussion and Analysis, the compensation tables and other executive compensation disclosures.

Voting

Unless contrary instructions are received, the shares represented by a properly executed proxy will be voted “FOR” the preceding resolution. Your vote is advisory and so it will not be binding on the Board. However, the Board will review the voting results and take them into consideration when making future decisions regarding executive compensation. The affirmative vote of the holders of a majority of the Common Stock represented in person or by proxy and entitled to vote on the proposal will be considered as an approval of the proposal.  

 

ABM Industries Incorporated 2019 Proxy Statement     17


 

 

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis describes our executive compensation program for our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the three other most highly compensated executive officers who are named in the summary compensation table (collectively, our “NEOs”). Our Compensation Committee (referred to as the “Committee” in this section of the Proxy Statement) oversees all aspects of our NEO compensation. Our NEOs for fiscal year 2018 are:

 

 

  

 Scott Salmirs, President and Chief Executive Officer

  

 D. Anthony Scaglione, Executive Vice President and Chief Financial Officer

  

 Scott J. Giacobbe, Executive Vice President and Chief Operating Officer

  

 Rene Jacobsen, Executive Vice President and President, Business & Industry

  

 Andrea R. Newborn, Executive Vice President, General Counsel and Secretary

OUR COMPENSATION PHILOSOPHY AND PRACTICES

Compensation Philosophy

Our objective is to design an executive compensation program that encourages all of our leaders to produce strong financial results and create sustainable long-term value for our stockholders. To achieve this, we:

 

use evaluation criteria that include both internally measured performance (represented by our performance against our financial targets) and externally measured performance (represented by total stockholder return);

 

place significant weight on long-term equity compensation, thereby tying the total compensation of our executives to the achievement of sustained stockholder value creation; and

 

provide a mix of short-term annual cash incentive compensation and long-term performance-based equity compensation.

Best Practices

Following are some of the best practices we employ in our compensation program.

 

At-Will Employment.  We do not have fixed-term employment agreements with our NEOs.

 

Clawback Policy.  Our recoupment policy extends to both cash incentive and equity compensation, and permits us to recover incentive compensation paid to executives in connection with a restatement of the Company’s financial statements or in cases where the executive’s conduct would permit the Company to terminate him or her for “cause.”

 

No Single-Trigger Change-in-Control Payments.  We utilize double-trigger change-in-control provisions.

 

No Tax Gross-Ups.  We do not have tax gross-ups.

 

No Hedging or Pledging.  We prohibit hedging and pledging of Company stock.

 

Stock Ownership Guidelines. We require significant stock ownership by our executive officers.

 

Limited Perquisites. Our executive officers receive limited perquisites.

 

No Unearned Dividends or Dividend Equivalents.  Our executive officers receive dividend equivalents on equity awards only to the extent that the awards are earned.

18     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

2018 “Say-on-Pay” Vote Considerations

In March 2018, our say-on-pay proposal was approved by approximately 94% of votes cast by our stockholders. The Committee and management are committed to strengthening our pay-for-performance correlation, as well as the overall design of our executive compensation program. The Committee and management will continue to use the annual say-on-pay vote as a guidepost for stockholder perspective.

Role of the Compensation Committee

The Committee is responsible for the design of the Company’s executive compensation program, and for reviewing the overall effectiveness of our executive compensation program to ensure the design achieves our objectives. The Committee:

 

approves CEO annual performance objectives and performance achievement;

 

approves our compensation market analysis process, as well as the companies used for compensation and design comparison purposes;

 

approves performance metrics for our annual and long-term incentive compensation programs;

 

approves non-CEO executive officer compensation, based on recommendations from the CEO; and

 

performs an annual evaluation of risk as it pertains to our Company-wide incentive compensation plans and programs.

Based on the Committee’s assessment of the CEO’s performance achievement against his performance objectives, the Committee recommends CEO compensation to the independent members of our Board. This recommendation includes base pay levels, cash incentive compensation and equity awards. All elements of CEO pay are approved by such directors.

The Committee generally has the authority to delegate its authority to subcommittees or the Chair of the Committee when it deems appropriate and in the best interests of the Company. The Committee also generally has the authority to delegate such powers and authority as it may determine to be appropriate.

Role of Compensation Consultants

The Committee continued to engage Semler Brossy in fiscal year 2018 to serve as its independent compensation consultant. The Committee takes into consideration the advice of Semler Brossy to inform its decision-making process and has sole authority for retaining and terminating its consultant, as well as approving the terms of engagement, including fees. Semler Brossy works for the Committee and, with the approval of the Committee, has also provided services to the Governance Committee in connection with director compensation matters. Semler Brossy provides no services to the Company. The Committee has determined Semler Brossy to be independent from the Company. The Company’s management retains Willis Towers Watson as its primary compensation consultant to advise on program design, apprise management of evolving practices and trends, and perform other consulting services as needed. The Committee also considered the independence of Willis Towers Watson under applicable rules of the New York Stock Exchange. From time to time, the Committee may engage other consultants and advisors in connection with various compensation and benefits matters.

Use of Market Data and Our Compensation Comparator Group

The Committee uses compensation at our comparator group as one of its tools in connection with its assessment of our executive compensation programs and levels of compensation. Working with Semler Brossy, the Committee regularly reviews the various criteria by which it selects the Company’s Compensation Comparator Group (“CCG”). Companies in our CCG are generally selected with reference to the following criteria:

 

companies, like ABM, that provide business-to-business services, such as outsourcing, logistics management, food service, staffing, and cleaning;

 

companies in other industries that have a high ratio of employees to revenue or market capitalization; and

 

companies that generate annual revenue comparable to ABM.

 

ABM Industries Incorporated 2019 Proxy Statement     19


 

 

The Committee’s decisions relating to NEO pay are informed by its review of the compensation practices reported in the proxy statements filed by the companies in the CCG. The Committee believes that the proxy data reviewed provides a reasonable indicator of total compensation paid by companies that recruit executives with skill sets similar to those which we seek in our executives. Compensation for our executives is typically managed within the ranges of compensation paid by companies in the CCG. While the Committee normally references the CCG median (50th percentile) for each compensation element, the Committee uses its judgment to determine pay levels necessary to pay for performance and attract and retain executive talent. The Committee places significant weight on individual job performance, experience, compensation history, future potential, internal comparisons, affordability, retention risk, and in the case of executives other than the CEO, the CEO’s recommendations.

 

 

2018 COMPENSATION COMPARATOR GROUP

Aramark Corporation

ArcBest Corporation

The Brink’s Company

C. H. Robinson Worldwide, Inc.

Cintas Corporation

Convergys Corporation

Emcor Group, Inc.

Healthcare Services Group, Inc.

Insperity, Inc.

Iron Mountain Inc.

J.B. Hunt Transport Services, Inc.

Kelly Services, Inc.

Republic Services, Inc.

Robert Half International, Inc.

ServiceMaster Global Holdings, Inc.

SP Plus Corporation

Stericycle, Inc.

TrueBlue, Inc.

United Rentals, Inc.

Werner Enterprises, Inc.

In October 2017, the Committee reviewed the CCG and added Stericycle, Inc. to the CCG for fiscal year 2018, as they share business attributes with ABM. Brinker International, Inc. and Rollins Inc. were removed from the Company’s 2018 CCG as these companies’ business and financial profiles no longer align with those of ABM. There are no changes to the CCG for fiscal year 2019.

Pay-for-Performance Alignment

The following graph illustrates three-year realizable compensation of our NEOs compared to the compensation of NEOs in our CCG. Each point on the graph represents three-year realizable compensation of the NEOs in this group relative to his or her company’s three-year Total Stockholder Return (“TSR”) performance over the 2015–2017 period. ABM’s position in this graph shows that the Company’s pay for performance is aligned with that of our CCG.

TSR reflects share price appreciation, adjusted for dividends and stock splits.

 

20     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

Realizable pay consists of: (1) actual base salary paid over the three-year period; (2) actual short-term incentive payouts over the three-year period; and (3) the 12/31/2017 market value of equity grants as listed below:

 

 

in-the-money value of stock options granted over the three-year period;

 

market value of time-vested restricted stock unit grants made over the three-year period based on the stock price at the end of the period; and

 

performance-based incentives: (i) as achieved, for performance cycles that have been completed through 2018; and (ii) as granted, for performance cycles that have not yet been completed, assuming target performance.

Elements of Compensation

The material components of our executive compensation program and their purposes and characteristics are summarized below.

 

Pay Element

Description and Purpose

Link to Business and Strategy

Base salary – payable in cash

 

Designed to recognize individual responsibilities, performance, leadership skills and time in role

Competitive base pay to help attract and retain strong executive talent

Annual review and adjustment, if appropriate

Increases are not automatic or guaranteed

Annual short-term incentives – payable in cash

 

Variable compensation measured by performance against annually established financial and individual performance targets

Design of short-term incentives is evaluated annually for alignment with Company strategy

Designed to reward annual performance related to key financial and operational measures

 

Long-term incentives – structured as equity awards, settled in Company stock

 

Variable compensation that consists of a mix of performance-based and time-vested equity awards

Designed to link incentives to long-term stockholder value creation

Performance-based equity programs are evaluated annually for alignment with Company strategy

Equity award mix and design of performance metrics reviewed annually

 

Using the elements of compensation described above, we structure our program in a way that places a significant portion of our executives’ compensation at risk. At-risk compensation includes: annual cash incentive compensation (“bonus”) which is tied to annual financial and individual performance measures; performance-based equity awards which are paid only if performance metrics established at the beginning of the three-year performance period are met (“PSUs”); TSR performance shares, which are performance-based awards paid based on the Company’s relative TSR performance (“TSR Performance Shares”), and time-based equity awards which vest over a four-year period (“RSUs”) and collectively with PSUs and TSR Performance Shares, “LTIs”. As reflected in the charts below, approximately 84% of our CEO’s compensation is at risk. Approximately 71% of our other NEOs’ compensation is at risk.

 

ABM Industries Incorporated 2019 Proxy Statement     21


 

 

 

CEO Compensation

Other NEO Compensation

 

 

HOW WE COMPENSATED OUR NEOS IN 2018

2018 Base Salary

The Compensation Committee reviews total compensation, including base salaries, for executives in the first quarter of each fiscal year, and as needed, in connection with recruitment, promotions or other changes in responsibilities. Base salary amounts affect potential annual cash performance incentive payments and equity award grant amounts, since these other compensation elements are based on a percentage of base salary. The following table shows each NEO’s 2017 and 2018 base salaries. Annual changes in base salary typically become effective on January 1.

 

NEO

2017 Annual

Base Salary

2018 Annual

Base Salary

Scott Salmirs

$900,000

 

$990,000

D. Anthony Scaglione

$500,000

 

$550,000

Scott J. Giacobbe

$451,376

(1)

$550,000

Rene Jacobsen

$500,000

 

$510,000

Andrea R. Newborn

$500,000

(2)

$510,000

 

 

(1)

On November 1, 2017, Mr. Giacobbe received an increase in base salary to $550,000 in connection with his promotion to Chief Operating Officer.

 

 

 

(2)

Ms. Newborn’s 2017 annual base salary became effective as of July 5, 2017, when Ms. Newborn’s employment with the Company commenced.

 

 

 

The base salaries for our NEOs are reviewed annually when the Compensation Committee reviews its compensation benchmark information. Salary increases for our NEOs for 2018 reflected performance and market-based considerations, including peer group benchmarking.

2018 Annual Cash Incentive Compensation

Each year, the Committee reviews the Company’s strategy and develops an annual cash incentive program (“CIP”) that is designed to incentivize behavior that will drive corporate financial objectives (“Financial Objectives”), corporate safety objectives (“Safety Objectives”) and individual performance objectives (“Personal Objectives” and together with Financial Objectives and Safety Objectives, “Performance Objectives”), to ensure achievement aligned with the Company’s strategic objectives. This process generally begins in the fourth quarter of the preceding fiscal year and culminates in the first quarter of the fiscal year, when Financial Objectives and targets are established by the Board and incorporated into the CIP by the Committee. As part of this process, the Committee reviews the Company’s strategic priorities and operating budget and market data, and these factors inform the Committee’s decisions with respect to annual incentive opportunities.

 

22     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

The Committee also establishes the relative weighting of the Financial Objectives, Safety Objectives and Personal Objectives for all NEOs at the beginning of the year. At the end of each year, the Committee conducts an extensive review of our CEO’s performance in executive session, with the assistance of Semler Brossy. Our CEO provides the Committee with an assessment of performance for each of the other NEOs. Each assessment takes into account a number of quantitative and qualitative factors, such as the attainment of key strategic goals and the Performance Objectives that were set in the beginning of the fiscal year. After assessing the CEO’s performance, the Committee recommends the CEO’s cash incentive award to the independent members of the Board, who then determine the CEO’s cash incentive award. The Committee also reviews the CEO’s assessment of the other NEOs and establishes the cash incentive awards of the other NEOs.

Each of our NEOs was eligible to earn an annual cash incentive award under the CIP in fiscal year 2018.

2018 Financial and Safety Objectives under Our CIP

Financial Objectives under the CIP in 2018 were established by the Committee in the first quarter of 2018. The Financial Objectives include a combination of adjusted EBITDA margin compared to budget and income from continuing operations compared to budget, to provide balanced measurement across both factors.

Mr. Jacobsen’s Financial Objectives also included objectives relating to the overall Commercial Operations and Business & Industry group specifically. All NEOs had Safety Objectives, comprised of numerous metrics relating to promoting a safe working environment.

At the beginning of fiscal year 2018, the Committee determined that 60% of the cash incentive award opportunity under the CIP for our NEOs would be based on the Company’s achievement of Financial Objectives and 10% of the cash incentive award opportunity under the CIP for our NEOs would be based on the Company’s achievement of Safety Objectives.  

2018 Personal Objectives under Our CIP

In the beginning of each year, the Committee establishes Personal Objectives for the CEO in consultation with our Board. The CEO reviews and approves the Personal Objectives for the other NEOs, with the Committee retaining the discretion to change these Personal Objectives.

At the beginning of fiscal year 2018, the Committee determined that 30% of the cash incentive award opportunity under the CIP for our NEOs would be based on the achievement of Personal Objectives.

Bonus Targets and CIP Performance Objectives Weighting

Each NEO’s potential CIP award was expressed as a percentage of his or her base salary, including threshold, target and maximum percentages.

The target bonus potential for each NEO and relative weights for each Performance Objective of the CIP are set forth in the following table. Payout can range from zero to 167.5% of target.

ABM Industries Incorporated 2019 Proxy Statement     23


 

 

 

2018 Annual Cash Incentive Program Bonus Targets and Weighting

 

 

Performance Objectives Weighting

Target Bonus as Percentage of Salary(1)

Financial Objectives

Safety Objectives

Personal Objectives

Corporate

Commercial Operations (All Industry Groups)

Business & Industry

Scott Salmirs

125%

60%

--

--

10%

30%

D. Anthony Scaglione

100%

60%

--

--

10%

30%

Scott J. Giacobbe

100%

60%

--

--

10%

30%

Rene Jacobsen

60%

10%

20%

30%

10%

30%

Andrea R. Newborn

70%

60%

--

--

10%

30%

(1)

Represents each NEO’s target cash incentive compensation opportunity, expressed as a percentage of his or her base salary. The percentage is the higher of the percentage reflected in the NEO’s employment agreement or as approved by the Committee.

 

Financial and Safety Objectives Achievement and Funding Levels

The following table shows the Financial Objectives and Safety Objectives, achievement levels and payout for Messrs. Salmirs, Scaglione and Giacobbe, and Ms. Newborn.

2018 Financial and Safety Objectives Achievement and Funding Levels  
for Messrs. Salmirs, Scaglione and Giacobbe, and Ms. Newborn

Financial and Safety Objectives (70%)

Target

Actual

Actual vs.

Target

Payout

Adjusted EBITDA Margin(1)  
(30% weighting)

5.49%

5.07%

92.3%

80.8%

Income from Continuing Operations(2)
(30% weighting)

$112.0

$95.9

85.6%

64.0%

Funding Level of Financial Objectives (60% weighting)

--

--

--

72.4%

Funding Level of Safety Objectives(3)

(10% weighting)

--

--

--

105.0%

($ in millions)

 

 

(1)

As used herein, “Adjusted EBITDA” means Income from Continuing Operations before interest, taxes, depreciation and amortization, and excluding items impacting comparability. A reconciliation of Net Income to Adjusted EBITDA is set forth in Appendix A.

 

 

(2)

When determining the Company’s achievement of Financial Objectives in 2018, the Committee adjusted the target for the Company’s income from continuing operations to include the benefit of the lower corporate tax rate due to US tax reform, which resulted in lower 2018 Financial Objectives funding than would have been achieved had the adjustment not been made.

 

 

(3)

Comprised of numerous metrics that resulted in a funding level of 105%.

Because Mr. Jacobsen led our Business & Industry group, his Financial Objectives included a mix of Corporate, Combined Commercial Operations and Business & Industry group objectives. These objectives and results are reflected in the following table.

24     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

2018 Financial and Safety Objectives Achievement and Funding Levels for Mr. Jacobsen

 

Financial and Safety Objectives (70%)

Target

Actual

Actual vs.

Target

Payout

Income from Continuing Operations(1)
(10% weighting)

$112.0

$95.9

85.6%

64.0%

Combined Commercial Operations Performance – Operating Profit Margin % vs. Budget(2) (20% weighting)

$375.6

$339.9

90.5%

76.3%

Business & Industry Group Performance – Operating Profit % vs. Budget (15% weighting)

5.19%

5.50%

106.0%

115.0%

Business & Industry Group Performance – Revenue vs. Budget (15% weighting)

$2,733.2

$2,721.6

99.6%

99.0%

Funding Level of Financial Objectives (60% weighting)

--

--

--

89.6%

Funding Level of Safety Objectives(3)

(10% weighting)

--

--

--

105.0%

($ in millions)

 

(1)

When determining the Company’s achievement of Financial Objectives in 2018, the Committee adjusted the target for the Company’s income from continuing operations to include the benefit of the lower corporate tax rate due to US tax reform, which resulted in lower 2018 Financial Objectives funding than would have been achieved had the adjustment not been made.

 

(2)

Operating Profit Margin % means operating profit divided by revenue.

 

(3)

Comprised of numerous metrics that resulted in a funding level of 105%.

 

2018 Personal Objectives Achievements and CIP Award Payment for Scott Salmirs, President and CEO

 

Mr. Salmirs’ 2018 Personal Objectives included:

 

 

successful integration of GCA employees and retention of key GCA talent, increased cross selling of services, and meeting targeted cost synergies resulting from the GCA acquisition;

 

continued strategic execution of the Company’s 2020 Vision; and

 

broadening and strengthening relationships and communication with the investment community and the Board.

The Committee considered Mr. Salmirs’ performance against these objectives in a process that involved discussions with all Board members. After considering the perspectives of the Board, the Committee agreed that Mr. Salmirs’ achievement of these objectives included:

 

retaining key GCA leaders and 30,000 employees, achieving targeted cross selling of services within and across industry groups, and reaching the higher end of the targeted GCA cost synergy range;

 

skillfully sustaining progress toward the Company’s 2020 Vision, including systems and technology transformation, enhanced safety measures and strategic growth initiatives; and

 

participating in investor roadshows, hosting a successful investor day, attracting new institutional stockholders, maintaining open communications with the Board and strengthening relationships with existing and new Board members.

Based on Mr. Salmirs’ achievements in 2018, the Committee concluded that Mr. Salmirs provided crucial strategic leadership to the Company in spite of challenging market conditions and determined that he successfully achieved his Personal Objectives, awarding him a payout at 95% of target for his Personal Objectives. As described above, Financial Objectives, which comprised 60% of Mr. Salmirs’ cash incentive compensation, were funded at approximately 72.4%, and Safety Objectives, which comprised 10% of Mr. Salmirs’ cash incentive compensation, were funded at approximately 105%. Accordingly, Mr. Salmirs was awarded a 2018 CIP payment of $1,020,567, which represents approximately 82.5% of his overall target.  

 

ABM Industries Incorporated 2019 Proxy Statement     25


 

 

2018 Personal Objectives Achievements and CIP Award Payments for Our Other NEOs

The following table presents the fiscal year 2018 performance under our CIP for our other NEOs’ Financial Objectives, Safety Objectives and Personal Objectives, and their resulting payout (both the total award dollar amount and as a percentage of target opportunity).

NEO

2018 Performance

2018 CIP

Payout

Financial

Objectives Funding Level

(60% weighting)(1)

Safety

Objectives Funding Level

(10% weighting)

Personal Objectives (30% weighting)

Key 2018 Goals

Achievement Funding
Level and Highlights

D. Anthony Scaglione
Executive Vice President and Chief Financial Officer

 

72.4%

 

105.0%

 

 

 

 

 

100%

$461,835

(84% of Target)

Support the Company’s 2020 Vision

Continued to drive consistency and efficiency in operations through increased scope and effectiveness of enterprise service center and procurement organizations

Drive GCA integration

Effective integration of GCA including achievement of cost synergies

Provide executive sponsorship to the Company’s systems transformation initiatives

Provided key leadership to systems transformation initiatives

Scott J. Giacobbe Executive Vice President and Chief Operating Officer

 

72.4%

 

105.0%

 

 

 

100%

$461,835

(84% of Target)

Support the Company’s 2020 Vision

 

 

 

Championed the ABMWay, creating close collaboration across all industry group leaders

Drive GCA integration

 

Effective integration of GCA operations into ABM Industry Groups

 

Build a sales culture

Built effective sales team enabling strong new sales growth

Rene Jacobsen Executive Vice President and President – Business & Industry

 

89.6%

 

105.0%

 

 

 

125%

$311,386

(101.8% of Target)

 

Restructure the Business & Industry team

 

Successfully restructured team

 

Drive Business & Industry financial performance

 

Successfully integrated UK Business & Industry operations into broader Business & Industry group

Assume leadership of Business & Industry operations in the UK

 

Drove strongest financial performance of any ABM industry group

 

Improved cash collections

Andrea R. Newborn Executive Vice President, General Counsel and Secretary

 

72.4%

 

105.0%

 

 

 

100%

$299,773

(84% of Target)

 

 

 

Support the Company’s 2020 Vision

 

 

 

 

Championed and supported corporate alignment with 2020 Vison strategy

 

Drive GCA integration and consolidate real estate

 

 

 

Effective integration of GCA, and successful management of real estate consolidation

Provide leadership to ABM legal team

Evolved the strategic capabilities of the legal team and effectively managed litigation

 

(1)

See tables on pages 24-25 for more detail relating to Financial Objectives.

26     ABM Industries Incorporated 2019 Proxy Statement


 

 

 

Equity Incentive Compensation

The Committee believes that a long-term incentive program motivates and rewards our executive officers for their contributions to our Company’s performance and serves to align long-term compensation with the performance of Company stock. Our practice is to grant long-term incentives annually in the form of equity awards that are allocated among time-based RSUs (25% of total equity grant at target), which typically vest over a four-year period, PSUs (50% of total equity grant at target), which are based on Company financial metrics and typically vest after a three-year performance period, and TSR Performance Shares (25% of total equity grant at target), which are based on comparative total stockholder return metrics and typically vest after a three-year period.

The Committee considers market data and the mix of compensation at risk when establishing the long-term incentive opportunity for each NEO. Generally, the Committee approves an equity award of a specific dollar value for each recipient based on a multiple of the recipient’s base salary. The dollar value of the award is determined after taking into consideration various factors, including a market analysis prepared by Semler Brossy and the overall mix of performance-based compensation. The Committee believes that a meaningful portion of equity compensation should be performance-based. The Committee may also grant one-time equity awards when circumstances indicate that such an award is appropriate.

In fiscal year 2018, our NEOs received grants of equity awards in the form of PSUs, TSR Performance Shares and RSUs, as shown in the table below. In addition, each NEO also holds unvested equity awards granted in prior years, which vest over a period of three or four years from the date of grant (in some circumstances, subject to performance vesting conditions).

 

Fiscal Year 2018 Equity Awards*

 

2018-2020 PSU

2018-2020 TSR Performance Shares

2018 RSU

 

NEO

Number
Granted

Grant Date Value
($)

Number Granted

Grant Date Value
($)

Number
Granted

Grant
Date
Value
($)

Aggregate

Value of Equity Awards

($)

Scott Salmirs

51,057

1,979,990

25,069

989,975

25,528

989,976

3,959,941

D. Anthony Scaglione

18,050

699,979

8,863

350,000

9,025

349,989

1,399,968

Scott J. Giacobbe

14,182

549,978

6,963

274,969

7,091

274,989

1,099,936

Rene Jacobsen

11,110

499,952

3,165

124,986

3,223

124,988

749,926

Andrea R. Newborn

6,446

249,976

3,165

124,986

3,223

124,988

499,950

*

The Company does not publicly disclose its specific targets applicable under its equity compensation programs due to potential competitive harm. For additional information on fiscal year 2018 equity award grants for our NEOs, please see “Grants of Plan-Based Awards During Fiscal Year 2018.”

 

Results of 20162018 Performance Share Program

Our 2016-2018 Performance Share Program for NEOs, which commenced with the 2016 fiscal year, uses performance metrics comprised of Adjusted EBITDA, organic revenue growth and return on invested capital (“ROIC”), and covers a performance period from November 1, 2015 to October 31, 2018. Award funding for the 2016-2018 Performance Share Program is set forth below.

%

Achievement

Award

Funding %

≥ 135

200

≥ 125

150

≥ 115

125

≥ 95 - 105

100

≥ 90

85

≥ 75

50

< 75

0

ABM Industries Incorporated 2019 Proxy Statement     27


 

 

The following table summarizes the results under the 2016-2018 Performance Share Program.

 

Results of 2016-2018 Performance Share Program

 

Weighting

Goal

Actual

%
Achievement

%
Payout

Weighted Payout

Adjusted EBITDA(1)

60%

$263.0 M

$242.3 M

92%

91.3%

54.8%

Organic Revenue(2)

20%

$5.5 B

$5.6 B

102%

100.0%

20.0%

ROIC(3)

20%

8.5%

5.3%

62%

0.0%

0.0%

Award Payout

 

 

 

 

 

74.8%

 

 

(1)

As used herein, “Adjusted EBITDA” means Income from Continuing Operations before interest, taxes, depreciation and amortization, as adjusted to take into account the effects of a major acquisition or major divestiture, and excluding items impacting comparability. A reconciliation of Net Income to Adjusted EBITDA is set forth in Appendix A.

 

 

 

(2)

Organic Revenue means the revenues amount adjusted to take into account the effects of a major acquisition or major divestiture. A reconciliation of Revenue to Organic Revenue is set forth in Appendix A.

 

 

 

(3)

ROIC is return on invested capital and equals net income excluding after-tax impact of discontinued operations, interest expense, items impacting comparability and certain tax discrete items adjusted for the net income (loss) impact of certain acquisitions, divided by invested capital.

 

 

 

Results of 20162018 TSR-Based Performance Share Program

Under the 2016–2018 TSR-based performance share program (the “2016-2018 TSR-PSP”), the measurement period was a three-year period commencing on November 1, 2015 and ending on October 31, 2018, with achievement under the 2016-2018 TSR-PSP being measured by reference to the S&P SmallCap 600 Index.

Award funding for the 2016-2018 TSR-PSP is set forth below.

 

2016-2018 TSR PSP FUNDING TABLE

 

ABM Three-Year
Percentile Ranking

Shares Earned
(as % of Target)

Threshold

25th Percentile

50%

Target

50th Percentile

100%

Maximum

75th Percentile

150%

 

The Company ranked in the 39.5% percentile of S&P SmallCap 600 Index companies, resulting in a payout under the 2016–2018 TSR PSP of 79.0% of target.

 

 

Other Compensation and Governance-Related Matters

Employment and Change-in-Control Agreements

Each of our NEOs have entered into an employment agreement with the Company. The form of agreement reflects an “at-will” employment relationship, while at the same time affording some income security by specifying certain severance payments upon involuntary or constructive termination. Under the terms of these employment agreements, an executive whose employment is terminated without cause by the Company, or who resigns for “good reason” (as such terms are defined in the NEOs’ respective employment agreements), will be entitled to receive a multiple (2.5 for Mr. Salmirs and 2.0 for the other NEOs) of the sum of his or her base salary and target bonus, as well as a prorated portion of his or her annual bonus for the year of termination and 18 months of health insurance reimbursements. Additionally, if Messrs. Salmirs, Giacobbe, Jacobsen or Scaglione voluntarily leaves the Company before age 60 and 10 years of service all unvested equity awards made after the effective date of the employment agreement will be forfeited. If Messrs. Salmirs, Giacobbe, Jacobsen or Scaglione voluntarily leaves the Company at age 60 or older with 10 years of service their equity awards granted after the effective date of the employment agreement but at least one year prior to such retirement will continue to vest, in accordance with the terms of those awards. These employment

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agreements also provide that following termination of employment for any reason, the officer will refrain from competing with, or soliciting the employees or customers of, the Company for one year following the termination of employment.

In order to assure continuity of ABM’s senior management in the event of a potential change-in-control of the Company, ABM provides our NEOs with “double-trigger” severance benefits should their employment with ABM be terminated following a change in control. The current agreements provide double-trigger severance benefits if the officer is terminated without cause, or resigns for “good reason,” within two years following a change-in-control. These benefits consist of a lump-sum payment equal to a multiple (3.0 for Mr. Salmirs and 2.5 for each of the other NEOs) of the sum of his or her base salary and target bonus; a lump-sum payment equal to the present value of health and welfare benefits for 18 months; and accelerated vesting of equity awards. There are no excise tax gross-ups under the change-in-control agreements. Instead, any such payments and benefits are subject to reduction in order to avoid the application of the excise tax on “excess parachute payments” under the Internal Revenue Code, but generally only if the reduction would increase the net after-tax amount received by the officer.

For a summary of the executives’ employment and change-in-control agreements in effect during fiscal year 2018, see “Potential Benefits on Termination.”

Stock Ownership Guidelines and Anti-Hedging and Pledging Policy

The Company has stock ownership guidelines for certain officers, including our NEOs. Executives are expected to achieve their targets within five years of becoming subject to the stock ownership policy. Stock ownership guidelines are based on a multiple of base salary. Individuals who have not met their stock ownership level at the end of the applicable five-year period are expected to retain 50% of their after-tax net shares paid under any Company long-term incentive plan or program, such as shares paid out under the performance share program and vested restricted stock units, until their ownership guidelines are satisfied. The Committee periodically reviews the stock ownership guidelines and may make adjustments to these guidelines to the extent it believes such adjustments are appropriate. Progress toward targeted ownership levels may be taken into consideration in future grants to executives. Unvested RSUs are taken into consideration when determining if ownership guidelines have been achieved; however, unearned PSUs and TSR Performance Shares are not included, nor are stock options, whether vested or unvested. Current stock ownership guidelines are as follows:

 

 

Position

Requirements

CEO

Shares with a fair market value equal to six times base salary

Executive Vice Presidents

Shares with a fair market value equal to three times base salary

Senior Vice Presidents and certain subsidiary senior officers

Shares with a fair market value equal to base salary

All of our NEOs are either at or above our stock ownership guidelines or are well positioned to achieve compliance within the required time period.

Additionally, the Company has a policy prohibiting all employees, including the NEOs and members of our Board, from engaging in any hedging transactions involving our stock. We also prohibit pledging, or using as collateral, Company stock to secure personal loans or other obligations.  

Window Trading and Rule 10b5-1 Trading Plans

Under the Company’s insider trading policy, officers may purchase or sell ABM securities only during “open window” periods, which begin on the third business day following the date of each quarterly earnings announcement and end at the close of trading on the 15th day of the third month of the fiscal quarter. The only exception to this is for officers who have entered into a trading plan pursuant to SEC Rule 10b5-1.

NEOs are permitted to establish trading plans under SEC Rule 10b5-1 during open trading windows. These plans enable an executive to diversify his or her holdings of Company stock during periods in which the executive would otherwise be unable to buy or sell such stock because he or she possessed material, nonpublic information about the Company. Any trading plan must be submitted in writing to the Company’s designated officer for review and approval prior to its effective date.

 

ABM Industries Incorporated 2019 Proxy Statement     29


 

 

Annual Compensation-Related Risk Evaluation

We annually review risks associated with our executive compensation program, as well as our other broad-based employee incentive programs, with respect to enterprise risk factors, with the assistance of management’s compensation consultant, Willis Towers Watson, which prepares a risk analysis. The Committee and its independent compensation consultant, Semler Brossy, review this analysis. In connection with its 2018 review, the Committee noted the various ways in which risk is managed or mitigated. Practices and policies mitigating risks included the balance of corporate, business unit and individual weightings in incentive compensation programs, the mix between long-term and short-term incentives, use of stock ownership requirements, the Company’s policy prohibiting hedging, and the Company’s recoupment or “clawback” policy. Based on this review, the Committee agreed with the findings in the analysis that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Compensation Recoupment (Clawback) Policy

The Board has adopted a policy relating to the recoupment of cash and equity compensation. The policy provides that, if the Company’s financial statements are the subject of a restatement due to misconduct, fraud or malfeasance, then, to the extent permitted by applicable law, the independent members of the Board, or a committee consisting of independent members of the Board may, in their discretion, recover cash compensation paid to an executive officer of the Company or rescind or make other adjustments to an equity award made to an executive officer of the Company, including recovering cash proceeds relating to the sale or other disposition of an equity award, to the extent that the payment or award was predicated upon the achievement of certain financial results that were subsequently the subject of a restatement. Where applicable, the Company may seek to recover any amount determined to have been inappropriately received by the individual executive officer. In addition, it is the Board’s policy that if the independent members of the Board, or a committee consisting of independent members of the Board, determine that an employee who received a cash incentive payment or an equity award engaged in conduct constituting “cause” (such as serious misconduct, dishonesty, disloyalty, conviction of a felony or misdemeanor involving moral turpitude, or failure to substantially perform employment-related duties or responsibilities), the Board or such committee may take such action it deems necessary to address such conduct, including recovery of cash incentive payments, rescission of equity grants made to the employee in the 36-month period prior to the date on which the Board or such committee makes such determination and recovery of proceeds relating to the sale or other disposition of an equity award during such 36-month period.

Benefits and Perquisites

The NEOs are eligible for customary employee benefits, which include participation in ABM’s 401(k) Plan, as well as group life, health and accidental death and disability insurance programs and executive health examinations. These and certain other perquisites are set forth in the Summary Compensation Table.

The NEOs are eligible to participate in ABM’s Employee Deferred Compensation Plan, which is an unfunded deferred compensation plan available to highly compensated employees. The Employee Deferred Compensation Plan benefits are shown in the “Nonqualified Deferred Compensation in Fiscal Year 2018” table, followed by a description of the plan. The Committee regularly reviews the benefits provided under this and other plans, and as a result of such a review, in January 2011, the Company entered into a trust agreement that will fund amounts due under the Employee Deferred Compensation Plan in the event of a change in control of ABM.

Accounting and Tax Considerations

The Committee takes into consideration the accounting, tax and related financial implications to the Company and executives when designing compensation and benefit programs. From an accounting perspective, in general, base salary, annual cash incentive payments, and the costs related to benefits and perquisites are recognized as compensation expense at the time they are earned or provided, and equity-based compensation expense is recognized over the vesting period of the grant. Subject to the exceptions and limits described below, the Company deducts for federal income tax purposes, payments of compensation and other benefits to executives. The Company does not deduct nonqualified deferred compensation until the year that the deferred compensation is paid to the executive.

Section 162(m) of the Internal Revenue Code generally does not allow a tax deduction to public companies for compensation paid to certain executive officers in one year over $1 million per executive. Prior to the 2017 tax reform, compensation based solely on the attainment of one or more preestablished objective performance goals (subject to meeting certain other requirements) was exempt from this limit. Our stockholder-approved equity incentive and executive officer incentive plans were designed to permit the Committee to grant certain types of performance-based compensation intended to qualify for this exception from the Section 162(m) limit. However, the exemption for

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performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, subject to transition relief for certain arrangements in place as of November 2, 2017. For ABM, this means that the new Section 162(m) rules will apply starting with the tax year beginning November 1, 2018.

In August 2018, the Internal Revenue Service issued initial guidance on certain aspects of new Section 162(m) and also indicated that it anticipates proposing rules on new Section 162(m) and requested additional comments from the public. Given the absence of any proposed or final regulations at this time, the Committee will continue to monitor developments in this regard. The Committee continues to have the flexibility to pay nondeductible compensation if it believes that it is in the best interests of the Company.

COMPENSATION COMMITTEE REPORT

The Committee has reviewed the Compensation Discussion and Analysis and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions with management, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in ABM’s Annual Report on Form 10-K for the fiscal year ended October 31, 2018 and 2019 Proxy Statement.

Compensation Committee:

Thomas M. Gartland, Chair

Linda Chavez

Lauralee E. Martin

Filippo Passerini

 

 

ABM Industries Incorporated 2019 Proxy Statement     31


 

 

Additional Information About Executive Compensation

The following tables and accompanying narrative provide detailed information regarding the compensation of the NEOs.

 

2018 Summary Compensation Table

 

 

 

 

 

 

 

 

 

Fiscal

Salary

Stock

Awards(1)

Nonequity

Incentive

Plan

Compensation(2)

Change in Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

All

Other

Compensation(3)

Total

    Name

Year

($)

($)

($)

($)

($)

($)

  Scott Salmirs

2018

975,000

3,959,941

1,020,567

-

67,135

6,022,643

President and

2017

883,333

2,949,955

805,320

-

47,763

4,686,371

Chief Executive Officer

2016

793,333

2,039,917

969,600

-

35,135

3,837,985

  D. Anthony Scaglione

2018

541,666

1,399,968

461,835

-

30,651

2,434,120

Executive Vice President

2017

495,833

1,049,942

339,465

-

20,348

1,905,588

and Chief Financial Officer

2016

466,666

615,542

405,883

-

22,770

1,510,861

  Scott J. Giacobbe(4)

2018

550,000

1,099,936

461,835

-

29,440

2,141,211

Executive Vice President

2017

449,900

734,928

344,575

-

41,919

1,571,322

and Chief Operating Officer

 

 

 

 

-

 

 

  Rene Jacobsen(4)

2018

508,333

749,926

311,386

-

36,894

1,606,539

Executive Vice President and President, Business &

2017

474,583

734,893

265,380

-

33,917

1,508,773

Industry

 

 

 

 

 

 

 

  Andrea R. Newborn(5)

2018

508,333

499,950

299,773

-

18,538

1,326,594

Executive Vice President, General Counsel and

 

 

 

 

 

 

 

Secretary

 

 

 

 

 

 

 

 

(1)

The value shown is the aggregate grant date value for performance share unit (PSU) and restricted stock unit (RSU) awards computed in accordance with FASB ASC Topic No. 718, based on target levels of achievement (the probable outcome at grant), in the case of PSUs. A discussion of assumptions used in calculating these values may be found in Note 16, “Share-Based Compensation Plans,” in the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2018. The maximum values for PSU awards granted in fiscal year 2018 under the 2018–2020 Performance Share Program are as follows: Mr. Salmirs, $3,959,981; Mr. Scaglione, $1,399,958; Mr. Giacobbe, $1,099,956; Mr. Jacobsen, $999,904; and Ms. Newborn, $499,952. The maximum values for TSR Performance Shares granted under the 2018–2020 TSR-Based performance share program are as follows: Mr. Salmirs, $1,484,962; Mr. Scaglione, $525,000; Mr. Giacobbe, $412,453; Mr. Jacobsen, $187,479; and Ms. Newborn, $187,479.

(2)

Amounts shown in this column represent annual performance-based cash payments under the CIP, as described in the Compensation Discussion & Analysis.

(3)

For fiscal year 2018, this column represents:

 

for Mr. Salmirs: ABM contributions to the 401(k) plan, $11,000; spousal/family travel, $3,881; home office expense, $109; airline club membership fee, $59; TSA/registered traveler annual fee, $66; and value of dividend equivalents (DEUs) credited in fiscal year 2018 with respect to earned PSUs and RSUs, $52,020. DEUs are settled in Company stock when the underlying RSUs vest. Employees who defer RSUs under the ABM Deferred Compensation Plan do not receive DEUs on deferred RSUs until the underlying RSUs are paid out.

 

for Mr. Scaglione: ABM contributions to the 401(k) plan, $11,000; and value of dividend equivalents (DEUs) credited in fiscal year 2018 with respect to earned PSUs and RSUs, $19,651. DEUs are settled in Company stock when the underlying RSUs vest. Employees who defer RSUs under the ABM Deferred Compensation Plan do not receive DEUs on deferred RSUs until the underlying RSUs are paid out.

 

for Mr. Giacobbe: ABM contributions to the 401(k) plan, $11,000; auto allowance, $600; and value of dividend equivalents (DEUs) credited in fiscal year 2018 with respect to earned PSUs and RSUs, $17,840. DEUs are settled in Company stock when the underlying RSUs vest.

 

for Mr. Jacobsen: ABM contributions to the 401(k) plan, $11,000; auto allowance, $11,050; and value of dividend equivalents (DEUs) credited in fiscal year 2018 with respect to earned PSUs and RSUs, $14,844. DEUs are settled in Company stock when the underlying RSUs vest.

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for Ms. Newborn: ABM contributions to the 401(k) plan, $11,000; and value of dividend equivalents (DEUs) credited in fiscal year 2018 with respect to earned RSUs, $7,538. DEUs are settled in Company stock when the underlying RSUs vest.

(4)

For Messrs. Giacobbe and Jacobsen, only compensation for fiscal years 2017 and 2018 are shown because neither of these individuals was an NEO in fiscal year 2016.

(5)

For Ms. Newborn, only compensation for fiscal year 2018 is shown because she was not an NEO in fiscal years 2017 or 2016.

Payments which may be made to an NEO upon certain terminations of employment pursuant to their respective employment agreements are described under “Potential Benefits on Termination,” beginning on page 36 of this Proxy Statement.

The following table shows payout ranges for the NEOs with respect to non-equity incentive plan awards under the CIP and equity incentive plan awards granted under the 2006 Equity Incentive Plan, as well as other information.

 

Grants of Plan-Based Awards During Fiscal Year 2018

 

 

 

 

 

 

 

 

 

 

 

  Named Executive

  Officer

Grant

Date

RSU/PSU

Grant

Date

FMV

Estimated Future Payouts Under Non-

Equity Incentive Plan Awards(1) ($)

Estimated Future Payouts Under Equity

Incentive Plan Awards(2) (#)

All Other

Stock

Awards: #

of Shares

or Stock

Units(3)

Grant Date 
Fair Value

of Stock

and Option

Awards(4)

($)

 

 

 

Threshold

Target

Maximum

Threshold

Target

Maximum

 

 

 Scott Salmirs

n/a

 

618,750

1,237,500

2,072,813

 

 

 

 

 

 

1/10/2018

$39.49

 

 

 

12,535

25,069

37,604

 

989,975

 

1/10/2018

$38.78

 

 

 

25,529

51,057

102,114

 

1,979,990

 

1/10/2018

$38.78

 

 

 

 

 

 

25,528

989,976

 D. Anthony Scaglione

n/a

 

275,000

550,000

921,250