DEF 14A 1 abm-def14a_20200325.htm DEF 14A abm-def14a_20200325.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. ___)

 

Filed by the Registrant    

 

Filed by a Party Other than the Registrant    

 

 

Check the appropriate box:

 

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Under Rule 14a-12

 

 

ABM Industries Incorporated

 

(Name of Registrant as Specified in Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

(3)

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

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

(5)

Total fee paid:

 

 

Fee paid previously with preliminary materials.

 

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

 

 

(1)

Amount Previously Paid:

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

(3)

Filing Party:

 

 

 

(4)

Date Filed:

 

 

 

 


 

 


 

 

 

 

 

 

 

 

 

 

 

February 13, 2020

 

 

Dear Fellow ABM Stockholders:

 

You are cordially invited to attend the 2020 Annual Meeting of Stockholders of ABM Industries Incorporated, to be held on Wednesday, March 25, 2020, at
10:00 a.m. Eastern Time, at our Corporate Headquarters at One Liberty Plaza, 7th Floor, New York, New York 10006.  

 

Since launching our 2020 Vision just four years ago, our transformation has had profound impacts on our business and financial results. I am excited about the foundation that we have developed and the next steps in our journey.

 

For our 2020 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, 2020, 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 2020 ANNUAL MEETING OF STOCKHOLDERS

WHEN

Wednesday, March 25, 2020,
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 2023 Annual Meeting and until their successors are duly elected and qualified.

2.

Approval of amendment to the Company’s Certificate of Incorporation to declassify our Board of Directors.

3.

Advisory vote to approve executive compensation.

4.

Ratification of the appointment of KPMG LLP as ABM’s independent registered public accounting firm for the fiscal year ending October 31, 2020.

5.

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

 

RECORD DATE

 

Stockholders of record at the close of business on January 29, 2020 are entitled to notice of, and to vote at the Annual Meeting.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 25, 2020:

 

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

Nominees for Election to Serve as Directors for a Term Expiring in 2023

 

2

The Board of Directors

 

8

Corporate Governance

 

8

Identifying and Evaluating Nominees for Directors

 

8

Board Leadership Structure

 

9

Director Independence

 

9

The Board’s Oversight of Risk Management

 

10

The Board’s Role in Cybersecurity Risk Oversight

 

10

Corporate Social Responsibility and Sustainability

 

11

Mandatory Retirement

 

11

Outside Board Limits

 

11

Board Committees

 

12

Board and Committee Attendance in Fiscal Year 2019

 

13

DIRECTOR COMPENSATION FOR FISCAL YEAR 2019

 

13

2019 Non-Employee Director Compensation Elements

 

14

2019 Non-Employee Director Compensation Table

 

14

Non-Employee Director Deferred Compensation Plan

 

15

Other Arrangements

 

15

Director Stock Ownership Policy

 

15

PROPOSAL 2–APPROVAL OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DECLASSIFY OUR BOARD

 

17

Proposed Amendment to the Company’s Certificate of Incorporation

 

17

EXECUTIVE COMPENSATION

 

 

PROPOSAL 3–ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

20

COMPENSATION DISCUSSION AND ANALYSIS

 

21

Our Compensation Philosophy and Practices

 

21

How We Compensated Our NEOs in 2019

 

26

Other Compensation and Governance-Related Matters

 

32

Compensation Committee Report

 

34

Additional Information About Executive Compensation

 

35

2019 Summary Compensation Table

 

35

Grants of Plan-Based Awards During Fiscal Year 2019

 

36

Outstanding Equity Awards at 2019 Fiscal Year-End

 

37

Option Exercises and Stock Vested in Fiscal Year 2019

 

38

Nonqualified Deferred Compensation in Fiscal Year 2019

 

39

Potential Benefits on Termination

 

39

2019 CEO Pay Ratio

 

43

AUDIT MATTERS

 

 

PROPOSAL 4–RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

45

AUDIT-RELATED MATTERS

 

46

Audit Committee Report

 

46

Principal Accounting Firm Fees and Services

 

47

Policy on Preapproval of Independent Registered Public Accounting Firm Services

 

47


 

 


 

 

 

 

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 25, 2020

10:00 a.m. Eastern Time

 

Place:

 

ABM Industries Incorporated

One Liberty Plaza, 7th Floor

New York, New York 10006

 

 

Record Date:

 

January 29, 2020

 

 

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

 

Approval of amendment to the Company’s Certificate of Incorporation to declassify our Board of Directors

 

FOR

 

 

17

 

03

 

Advisory vote to approve executive compensation

 

FOR

 

 

20

 

04

 

Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2020

 

FOR

 

 

45

 

 

Board Nominees

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

 

Name

Age

Director

Since

Occupation

Independent

Committee

Assignments

Donald F. Colleran

64

2018

President and Chief Executive Officer of FedEx Express, a subsidiary of FedEx Corporation

Yes

Compensation; Strategy and Enterprise Risk

Thomas M. Gartland

62

2015

Executive Chairman of SGL TransGroup; Former President, North America of Avis Budget Group, Inc.

Yes

Compensation, Chair; Governance

Winifred M. Webb

61

2014

Chief Executive Officer, Kestrel Corporate Advisors; Former Senior Executive at Ticketmaster and The Walt Disney Company

Yes

Audit; Strategy and Enterprise Risk

ABM Industries Incorporated 2020 Proxy Statement     i


 

 

ABM AT A GLANCE

2020 Vision Success

2019 was another year of solid progress for ABM. We first announced our 2020 Vision in September of 2015, and our transformation efforts have led to numerous achievements since then, including growth of both revenues and profit. These results and the strong foundation we have established reflect the value that our transformation has delivered to our stockholders. Notable highlights of fiscal year 2019 include:

 

achievement of $6.5 billion in total revenues;

 

new sales record of more than $1.0 billion;

 

generation of more than $250 million in operating cash flow from continuing operations;

 

delivery of 214th consecutive quarterly cash dividend;

 

continued alignment of organizational structure with strategic priorities through strategic leadership changes; and

 

welcomed one new member to our Board of Directors as part of the Board's continued refreshment.

ii     ABM Industries Incorporated 2020 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”).

 

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.

61

2018

Yes

 

 

 

 

 

 

 

 

 

 

 

Linda Chavez

President, Becoming American Institute

72

1997

Yes

 

 

 

 

 

 

 

 

 

 

Donald F. Colleran

President and Chief Executive Officer of FedEx Express, a subsidiary of FedEx Corporation

64

2018

Yes

 

 

 

 

 

 

Art A. Garcia

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

58

2017

Yes

‡*

 

 

 

 

 

 

Thomas M. Gartland

Executive Chairman of SGL TransGroup; Former President, North America of Avis Budget Group, Inc.

62

2015

Yes

 

 

 

 

 

 

Jill M. Golder

Chief Financial Officer, Cracker Barrel Old Country Store, Inc.

57

2019

Yes

*

 

 

 

 

 

 

 

Sudhakar Kesavan

Executive Chairman, ICF International, Inc.

65

2012

Yes

 

 

 

 

 

 

 

Filippo Passerini

Former Group President, Procter & Gamble

62

2017

Yes

 

 

 

 

 

Scott Salmirs

President and Chief Executive Officer, ABM Industries Incorporated

57

2015

No

 

 

 

 

 

 

 

 

Winifred (Wendy) M. Webb

Chief Executive Officer, Kestrel Corporate Advisors; Former Senior Executive at Ticketmaster and The Walt Disney Company

61

2014

Yes

*

 

 

 

Legend:

 

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

SER – Strategy and Enterprise Risk Committee

 

Indicates Committee Chair

*

Indicates Audit Committee Financial Expert

ABM Industries Incorporated 2020 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

Director overboarding policy

Risk oversight by Board and Committees

Majority voting with resignation policy for directors in uncontested elections

Thorough 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

Additionally, the Board proposed an amendment to the Company’s Certificate of Incorporation to provide for the annual election of all directors. Please see Proposal 2 in this Proxy Statement for more information.

Profile of our Board Members

Summary information about our Board is provided below:

 

 

Business Leadership

 

Financial/Investment

10

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Industry Experience

 

Risk Oversight

6

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Public Company Board Experience

 

International Business Experience

8

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

Tenure

 

Our Board’s ongoing refreshment efforts and proactive assessment of its collective skills, experience and perspectives have resulted in the recruitment of six new independent directors since 2015, and 70% of our Board members have served on the Board for five or fewer years. The Board and the Governance Committee believe that this balance of experience, continuity and refreshment helps the Board most effectively serve the Company and its stockholders.

 

iv     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

 

Diversity

 

Our Board and Governance Committee are committed to Board diversity: 40% of our Board members are female and 70% of our Board is diverse.

 

 

 

 

 

 

 

Independence

 

Our Board is comprised of independent directors, with the exception of Mr. Salmirs.

 

 

ABM Industries Incorporated 2020 Proxy Statement     v


 

 

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 and Retention by Executive Officers

   Limit Perquisites

   Use Double-Trigger Change-in-Control Arrangements

   Hold annual Say-on-Pay Vote

 

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

 

 

Our Executive Compensation Programs 

In fiscal year 2019, 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.

 

 

vi     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

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 73% of our other named executive officers’ (“NEOs”) compensation is at risk.

 

CEO Compensation

Other NEO Compensation

 

 

 

ABM Industries Incorporated 2020 Proxy Statement     vii


 

 

 

 

CORPORATE GOVERNANCE AND BOARD MATTERS

 

PROPOSAL 1ELECTION OF DIRECTORS

 

 

 

CORPORATE GOVERNANCE AND BOARD MATTERS

Nominees for Election to Serve as Directors for a Term Expiring in 2023

The Board of Directors

Corporate Governance

Identifying and Evaluating Nominees for Directors

Board Leadership Structure

Director Independence

The Board’s Oversight of Risk Management

The Board’s Role in Cybersecurity Risk Oversight

Corporate Social Responsibility and Sustainability

Mandatory Retirement

Outside Board Limits

Committees

Board and Committee Attendance in Fiscal Year 2019

DIRECTOR COMPENSATION FOR FISCAL YEAR 2019

2019 Non-Employee Director Compensation

2019 Non-Employee Director Compensation Table

Non-Employee Director Deferred Compensation Plan

Other Arrangements

Director Stock Ownership Policy

 

ABM Industries Incorporated 2020 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 ten. As discussed in greater detail in Proposal 2, the Board recently approved an amendment to our Certificate of Incorporation to provide for the phased declassification of the Board, subject to stockholder approval of Proposal 2 at the Annual Meeting. If Proposal 2 is approved by the requisite vote of the stockholders at the Annual Meeting, the directors elected at the 2021 annual meeting of stockholders (and each annual meeting of stockholders held thereafter) will be elected for one-year terms, and beginning with the 2023 annual meeting of stockholders, the entire Board will be elected on an annual basis.  

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 in connection with that director’s election as more fully described under “Questions and Answers About The Proxy Materials And The 2020 Annual Meeting” of this Proxy Statement. 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 2023

 

 

Donald F. Colleran

Director Since 2018

Age 64

President and Chief Executive Officer, FedEx Express, a subsidiary of FedEx Corporation

Mr. Colleran is president and chief executive officer of FedEx Express, a subsidiary of FedEx Corporation, a position held since March 2019. From 2017 to March 2019, Mr. Colleran was executive vice president and chief sales officer of FedEx Corporation. He also serves on the FedEx Corporation 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 has also been a director of EastGroup Properties, Inc. (NYSE: EGP), an equity real estate investment trust, since 2017, and serves as a member of the Compensation Committee and Nominating and Corporate Governance Committee.

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.

 

2     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

 

Thomas M. Gartland

Director Since 2015

Age 62

Executive Chairman, SGL TransGroup; Former President, North America of Avis Budget Group, Inc.

Mr. Gartland has been the executive chairman of SGL TransGroup, a privately-held global freight forwarder, since 2017, and serves as a member of the Audit Committee and Compensation Committee. 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, since 2005 and serves as chair of the Compensation Committee.

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 61

Chief Executive Officer, Kestrel Corporate Advisors; Former Senior Executive at Ticketmaster and The Walt Disney Company

Ms. Webb has been the chief executive officer of Kestrel Corporate Advisors, an advisory firm, since 2013. From 2010 to 2013, she was managing director for Tennenbaum Capital Partners. 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 (NACD). She has served on the board of directors of Wynn Resorts, Limited (NASDAQ: WYNN) since April 2018, and serves as chair of the Audit Committee; of AppFolio, Inc. (NASDAQ: APPF) since December 2019, where she serves a member of the Nominating and Corporate Governance Committee; and on the board of trustees of American Homes 4 Rent (NYSE: AMH), a publicly traded REIT, since January 2019, and serves as a member of the Compensation Committee and the Nominating and Corporate Governance Committee. She previously served on the boards of 9 Spokes International Limited from 2015 to 2018, of TiVo Inc. in 2016, of Jack in the Box Inc. 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, 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.

 

 

ABM Industries Incorporated 2020 Proxy Statement     3


 

 

Directors Whose Terms Expire in 2022

 

LeighAnne G. Baker

Director Since 2018

Age 61

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. Prior to joining Cargill in May 2014, she served as executive vice president and chief human resources officer of Hertz Global Holdings, Inc. from 2007 to 2014. Before joining Hertz, Ms. Baker was senior vice president, global human resources of The Reynolds & Reynolds Company, a leading provider of automotive dealer management systems, from 2005 to 2007. She also served in various management and leadership roles at The Timken Company from 1981 to 2005.

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.

 

 

Sudhakar Kesavan

Director Since 2012

Age 65

Executive Chairman, ICF International, Inc.

Mr. Kesavan is executive chairman 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 served as chief executive officer of ICF International from 1999 to 2019 and has served as 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 and serves on the External Advisory Board of the Institute for Data, Systems, and Society at the Massachusetts Institute of Technology. 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.

 

4     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

 

Filippo Passerini

Director Since 2017

Age 62

Former Group President, Procter & Gamble Company

Mr. Passerini retired in 2015 from the Procter & Gamble Company after a 33-year career in business and digital technology. He joined Procter & Gamble in 1981 and held executive positions in Italy, Turkey, United Kingdom, Greece, Latin America and the United States. Prior to his retirement, Mr. Passerini served for over twelve years as Group President, Global Business Services and Chief Information Officer, leading Procter & Gamble’s most global organization, and overseeing technology and business services operations in over 70 countries. Mr. Passerini has served as a director of United Rentals, Inc. (NYSE: URI) since 2009, and serves as chair of the Audit Committee and as a member of the Strategy Committee, and as a director of Integer Holding Corp. (NYSE: ITGR) since 2015, where he serves on its Corporate Governance and Nominating Committee and the Technology Strategy Committee.

Mr. Passerini’s qualifications to serve on our Board include over three decades of global experience in digital technology, general management, and operations roles, as well as public company board experience. He is globally recognized as a digital technology and shared services thought leader, known for creating new, progressive business models and driving innovation. His strategies, principles, and ideas have been the subject of numerous books, articles, and Harvard Business Reviews.

 

 

Directors Whose Terms Expire in 2021

 

Linda Chavez

Director Since 1997

Age 72

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, 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, television commentator and frequently writes 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.

 

ABM Industries Incorporated 2020 Proxy Statement     5


 

 

 

Art A. Garcia

Director Since 2017

Age 58

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

Mr. Garcia retired in 2019 as the executive vice president and chief financial officer of Ryder System, Inc., a $8.4 billion commercial fleet and supply chain management solutions company, a position held since 2010 and was 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 serves on the board of Elanco Animal Health (NYSE: ELAN), a $3.1 billion provider of products and services to improve animal health production in more than 90 countries around the world, and serves as a member of the Audit and Finance Committees, and on the board of American Electric Power (NYSE: AEP), a $16.2 billion electric public utility company, delivering electricity and custom energy solutions, where he serves as chair of the Finance Committee and a member of the Audit & Director Governance Committees.

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.

 

 

Jill M. Golder

Director Since 2019

Age 57

Senior Vice President and Chief Financial Officer, Cracker Barrel Old Country Store

Ms. Golder is senior vice president and chief financial officer of Cracker Barrel Old Country Store, Inc. (NASDAQ: CBRL), a position held since 2016. She previously served in finance leadership roles at Ruby Tuesday, Inc. from 2013 to 2016, including as executive vice president and chief financial officer from 2014 to 2016. Ms. Golder served in progressively more responsible finance positions during her 23 years at Darden Restaurants, Inc., including senior vice president finance for Olive Garden, senior vice president finance of Smokey Bones, senior vice president finance of Specialty Restaurant Group and senior vice president of Red Lobster.

Ms. Golder’s qualifications to serve on our Board include her extensive financial experience in a variety of leadership roles at various major, multinational companies. Ms. Golder also brings public company experience to our Board.

 

6     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

 

Scott Salmirs

Director Since 2015

Age 57

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.

 

 

 

ABM Industries Incorporated 2020 Proxy Statement     7


 

 

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 2020 are Donald F. Colleran, Thomas M. Gartland and Winifred M. Webb. Additionally, the Board proposed an amendment to the Company’s Certificate of Incorporation to provide for the annual election of all directors. Please see Proposal 2 in this Proxy Statement for more information.

 

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.

61

2018

Yes

 

 

 

 

 

 

 

 

 

 

 

Linda Chavez

President, Becoming American Institute

72

1997

Yes

 

 

 

 

 

 

 

 

 

 

Donald F. Colleran

President and Chief Executive Officer of FedEx Express, a subsidiary of FedEx Corporation

64

2018

Yes

 

 

 

 

 

 

Art A. Garcia

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

58

2017

Yes

‡*

 

 

 

 

 

 

Thomas M. Gartland

Executive Chairman of SGL TransGroup; Former President, North America of Avis Budget Group, Inc.

62

2015

Yes

 

 

 

 

 

 

Jill M. Golder

Chief Financial Officer, Cracker Barrel Old Country Store, Inc.

57

2019

Yes

*

 

 

 

 

 

 

 

Sudhakar Kesavan

Executive Chairman, ICF International, Inc.

65

2012

Yes

 

 

 

 

 

 

 

Filippo Passerini

Former Group President, Procter & Gamble

62

2017

Yes

 

 

 

 

 

Scott Salmirs

President and Chief Executive Officer, ABM Industries Incorporated

57

2015

No

 

 

 

 

 

 

 

 

Winifred (Wendy) M. Webb

Chief Executive Officer, Kestrel Corporate Advisors; Former Senior Executive at Ticketmaster and The Walt Disney Company

61

2014

Yes

*

 

 

 

Legend:

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

SER – Strategy and Enterprise Risk Committee

 

Indicates Committee Chair

*

Indicates Audit Committee Financial Expert

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

8     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

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, including general industry knowledge; accounting and finance; ability to make sound business decisions; management; leadership; business strategy; other public board experience; and risk management. 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.

With individual members of the Board, the Governance Committee seeks individuals that have leadership in other organizations and have significant experience in a specific area or endeavor, and who 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 professional search firms and the relationships of current directors. In the case of a search firm, the Governance Committee will pay a fee for such a firm to assist it in the recruitment and identification of potential candidates for the Board.  Mr. Colleran, a nominee for election at this Annual Meeting, was elected to the Board in 2018 and recommended to the Governance Committee by a search firm based upon the initial suggestion of one of our other independent members on the Board. After the Governance Committee evaluated Mr. Colleran’s candidacy for the Board (including, without limitation, through his interviews with directors, completion of a questionnaire and related procedures), it then determined to recommend him to the Board for election.

Candidates may also come to the attention of the Governance Committee through stockholders or other persons. Such stockholder director candidates would be evaluated under the Governance Committee’s established evaluation practices for director candidates. Stockholders wishing to submit candidates for election as directors should provide the names of such candidates to the Corporate Secretary, ABM Industries Incorporated, One Liberty Plaza, New York, New York 10006. See “Questions And Answers About The Proxy Materials And the 2020 Annual Meeting” for more information on submitting stockholder director nominations to the Company.

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. Directors who are full-time employees of ABM or who serve as chief executive officers or in equivalent positions at other public companies may not serve on the boards of more than one other publicly traded company. Other directors may not serve on the boards of more than three 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.

Director Independence

Our Corporate Governance Principles provide that a majority of our directors must be independent; Further, the

ABM Industries Incorporated 2020 Proxy Statement     9


 

 

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 affirmatively determined, that all of our directors, other than our Chief Executive Officer, independent under applicable NYSE and Securities and Exchange Commission (“SEC”) legal requirements.

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.

10     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

Corporate Social Responsibility and Sustainability

Our mission as a Company is to make a difference, every person, every day. Our strategy has evolved over the years to align with our stakeholders’ expectations regarding environmental, social, and governance policies. Recently, we have established three strategic axes of our sustainability strategy based on the topics that are most material to our business:

 

 

 

Doing business in a responsible way – Ensuring the implementation of ethical business practices is critical to enhancing our stakeholders’ trust and engaging with the local communities where we operate.

 

 

Improving our value chain continuously – Implementing sustainability initiatives along our whole value chain by partnering with strategic suppliers and clients to reduce the impact of our own operations and services.

 

 

Impacting our landscape/ecosystem – Bringing to market new services and offerings that have environmental and social benefits to positively impact the entire landscape.

Since 2011, we have voluntarily published a Sustainability Report on an annual basis in alignment with the Global Reporting Initiative framework to address our business, our team members, and the environment. More information can be found in the corporate sustainability section of our corporate website.

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.

Outside Board Limits

We limit the number of other public company boards our directors may join to ensure that our directors are able to rigorously prepare for and participate in Board and Committee meetings, to ask direct questions and require straight answers, and to spend the time needed, including by meeting as frequently as necessary, to properly discharge their responsibilities and duties as directors. Directors who are fulltime employees of the Company or who serve as chief executive officers or equivalent positions at other public companies may not serve on more than one other board of a publicly-traded company. Other directors may not serve on more than three other boards of public companies. Any director seeking to join the board of directors of another public company or for-profit organization must first notify the Governance Committee before accepting an invitation to serve on another board.  

ABM Industries Incorporated 2020 Proxy Statement     11


 

 

Board 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 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

 

 

Art A. Garcia, Chair

Jill M. Golder

Filippo Passerini

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 Mr. Garcia, Ms. Golder and Ms. Webb each qualifies as an “audit committee financial expert” under applicable SEC rules.

 

 

 

The Audit Committee met seven times in fiscal year 2019.

 

Compensation Committee

 

 

Thomas M. Gartland, Chair

LeighAnne G. Baker(1)

Linda Chavez

Donald F. Colleran(2)

 

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 five times in fiscal year 2019.

 

Governance Committee

 

 

Linda Chavez, Chair

Thomas M. Gartland

Sudhakar Kesavan

Key Oversight Responsibilities

 

 

 Director recruitment

 Corporate governance

 Board committee structure, membership and evaluations

 Director compensation

 Executive and Board Succession planning

 

 

 

The Governance Committee met five times in fiscal year 2019.

 

12     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

Strategy and Enterprise Risk Committee

 

 

Filippo Passerini, Chair

Donald F. Colleran(2)

Art A. Garcia

Winifred M. Webb

 

Key Oversight Responsibilities

 

 

 Strategy development

 Strategy implementation

 Enterprise risk assessment

 Operational risks

 

 

 

The Strategy and Enterprise Risk Committee met four times in fiscal year 2019.

(1)

Ms. Baker was appointed to the Compensation Committee on March 27, 2019.

(2)

Mr. Colleran was appointed to the Compensation Committee and the Strategy and Enterprise Risk Committee on March 27, 2019.

Board and Committee Attendance in Fiscal Year 2019 

During fiscal year 2019, the Board held seven meetings. Collectively, the directors attended 97% of the combined total meetings of the full Board and the committees on which they served in fiscal year 2019. Each director attended at least 75% of the meetings of the Board and of the committees on which he or she served during fiscal year 2019, other than Mr. Colleran. Mr. Colleran attended six out of seven Board meetings in fiscal year 2019 (86%), and 69% of the aggregate of (i) the total number Board meetings held during fiscal year 2019 and (ii) the total number of meetings held by all committees on which he served during fiscal year 2019. Mr. Colleran was unable to attend one Board and two committee meetings due to an unplanned trip to mainland China. Excluding those three meetings, Mr. Colleran’s aggregate attendance rate would have been 92%. The Governance Committee has reviewed these circumstances with Mr. Colleran and the full Board and has concluded that Mr. Colleran is highly unlikely to fail to meet the 75% attendance threshold in the future. The Board believes that Mr. Colleran has been a very strong and committed contributor to the Board since his election in September 2018. In particular, the Board highly values his expertise and guidance in the areas of revenue generation and client engagement.

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. Eight of our nine then serving directors attended the 2019 Annual Meeting of Stockholders.

 

DIRECTOR COMPENSATION FOR FISCAL YEAR 2019

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. No changes were made to non-employee director compensation in fiscal year 2019.

ABM Industries Incorporated 2020 Proxy Statement     13


 

 

2019 Non-Employee Director Compensation Elements

 

Compensation Element

2019 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 Meeting 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 2019

2019 Non-Employee Director Compensation Table

 

 

Fees

Earned or

Paid in

Cash(1)

 

Stock

Awards(2)

 

All Other

Compensation(3)

 

Total

 

  Name*

($)

 

($)

 

($)

 

($)

 

  LeighAnne G. Baker

 

87,459

 

 

124,999

 

 

1,784

 

 

214,242

 

  Linda Chavez

 

110,000

 

 

124,999

 

 

9,713

 

 

244,712

 

  Donald F. Colleran

 

93,427

 

 

124,999

 

 

2,293

 

 

220,719

 

  J. Philip Ferguson(4)

 

45,833

 

 

-

 

 

40,280

 

 

86,113

 

  Anthony G. Fernandes(4)

 

52,083

 

 

-

 

 

42,893

 

 

94,976

 

  Art A. Garcia

 

118,952

 

 

124,999

 

 

3,798

 

 

247,749

 

  Thomas M. Gartland

 

112,500

 

 

124,999

 

 

5,338

 

 

242,837

 

  Jill M. Golder

 

15,833

 

 

41,258

 

-

 

 

57,091

 

  Sudhakar Kesavan(5)

 

175,000

 

 

174,999

 

 

5,628

 

 

355,627

 

  Lauralee E. Martin(4)

 

46,875

 

 

-

 

 

2,370

 

 

49,245

 

  Filippo Passerini

 

114,509

 

 

124,999

 

 

3,450

 

 

242,958

 

  Winifred M. Webb

 

110,000

 

 

124,999

 

 

10,064

 

 

245,063

 

*Mr. Salmirs is a member of the Board and President and Chief Executive Officer of ABM. His compensation for fiscal year 2019 is reported in the Summary Compensation Table and other sections of this Proxy Statement. In fiscal year 2019, Mr. Salmirs did not receive any compensation for his service on the Board.

 

(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 per share of the Company’s common stock on the date of grant of the equity award. A director who becomes a

14     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

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 Ms. Golder was named to the Board in September 2019, she received a prorated grant of 1,156 RSUs on September 10, 2019. In addition, each non-employee director who was expected to continue on the Board after the 2019 Annual Meeting received an annual grant on January 4, 2019. For each then-current director, with the exception of Mr. Kesavan, the grant for 2019 on January 4, 2019 was 3,905 RSUs, which was calculated by dividing $125,000 by $32.01. For Mr. Kesavan, the grant for 2019 on January 4, 2019 was 5,467 RSUs, which was calculated by dividing $175,000 by $32.01. RSUs held by each director as of October 31, 2019, including RSUs that have been deferred under the Deferred Compensation Plan for Non-Employee Directors, were: Ms. Baker, 4,642; Ms. Chavez, 12,824; Mr. Colleran, 3,941; Mr. Garcia, 8,141; Mr. Gartland, 8,302; Ms. Golder, 1,156; Mr. Kesavan, 6,938; Mr. Passerini, 4,760; and Ms. Webb, 14,042.

(3)

Amounts shown include value of dividend equivalents (DEUs) credited in fiscal year 2019 with respect to RSUs held by 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. Ferguson, the amount shown also includes: $31,250 cash payment in lieu of a prorated equity award; a $5,000 donation to an organization designated by Mr. Ferguson; and $1,323 in family/spousal travel in connection with Mr. Ferguson’s retirement. For Mr. Fernandes, the amount shown also includes: $31,250 cash payment in lieu of a prorated equity award; a $5,000 donation to an organization designated by Mr. Fernandes; and $1,132 in family/spousal travel in connection with Mr. Fernandes’ retirement.  

(4)

Messrs. Ferguson and Fernandes and Ms. Martin retired from the Board on March 27, 2019.

(5)

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.

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 2020 Proxy Statement     15


 

 

16     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

PROPOSAL 2—APPROVAL OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO DECLASSIFY OUR BOARD

 

Proposal Summary

Currently, our Certificate of Incorporation divides Board members into three classes, with the directors in each class elected for three-year terms. The terms of the three classes are staggered so that only one class of directors is nominated for election at any one annual stockholders meeting. We are asking our stockholders to adopt and approve an amendment to the Company’s Certificate of Incorporation to effect a phased-in declassification of the Board over the next three years.

Our Board regularly reviews our corporate governance practices and current corporate governance trends and, in connection with this review, has discussed the potential declassification of the Board. Our Board considered the advantages and disadvantages of maintaining a classified board structure, and considered the fact that many publicly traded companies have declassified their boards of directors in favor of annual elections. After careful consideration, the Board has concluded that it would be in the best interests of the Company and its stockholders to declassify our Board to allow the stockholders to vote on the election of the entire Board on an annual basis, commencing with the 2023 annual meeting of stockholders.  

Our Board unanimously approved, adopted and declared advisable the amendment and restatement of our current Certificate of Incorporation to declassify our Board in phases and make related changes described below, the effectiveness of which is contingent upon stockholder adoption and approval of the amendment to the Certificate of Incorporation. If adopted and approved, such amendment would become effective upon the filing of the new Amended and Restated Certificate of Incorporation with the Delaware Secretary of State which the Company would do promptly following the Annual Meeting if Proposal 2 is adopted and approved.

Board Recommendation

The Board unanimously recommends that you vote “FOR” the proposal to amend the Company’s Certificate of Incorporation to declassify the Board.

Voting

Unless contrary instructions are received, the shares represented by a properly executed proxy will be voted “FOR” the proposal to amend the Certificate of Incorporation. The affirmative vote of the holders of not less than 70% of the total voting power of all outstanding shares of common stock entitled to vote on the proposal will be considered as an adoption and approval of the proposal, as more fully described under “Questions and Answers About the Proxy Materials and the 2020 Annual Meeting.”

Proposed Amendment to the Company’s Certificate of Incorporation

As noted above, members of our Board are currently elected for staggered terms of three years.  If Proposal 2 is adopted and approved, the declassification of our Board will be phased-in as follows (assuming all nominees are elected):

 

the directors who are elected under Proposal 1 of this Proxy Statement will be elected for a three-year term which expires at the 2023 annual meeting of stockholders;

 

at the 2021 annual meeting of stockholders, the directors whose terms expire at that meeting will be elected for a one-year term which expires at the 2022 annual meeting of stockholders;

 

at the 2022 annual meeting of stockholders, the directors whose terms expire at that meeting will be elected for a one-year term which expires at the 2023 annual meeting of stockholders; and

 

at the 2023 annual meeting of stockholders, all directors would have expiring terms and all directors would be elected on an annual basis going forward.  

Beginning with the 2023 annual meeting of stockholders, all directors will stand for election at each annual meeting of stockholders for a one-year term expiring at the subsequent annual meeting of stockholders.

Following the effectiveness of the amendment to the Certificate of Incorporation, any director elected or appointed to fill a vacancy caused by the death, resignation, retirement, disqualification or removal of a director who was elected for

ABM Industries Incorporated 2020 Proxy Statement     17


 

 

a three-year term will continue to hold office until the end of the term for which such departing director was elected or appointed, as applicable. In all cases, each director will hold office until his or her successor has been duly elected and qualified or until such director’s death, resignation, retirement, disqualification or removal from office.

Our current Certificate of Incorporation provides that our directors may be removed by stockholders only for cause. However, for a board that is not classified, Delaware law provides that stockholders may remove directors with or without cause. As a result, the proposed amendment to the Certificate of Incorporation would permit stockholders to remove directors elected for one-year terms with or without cause. Directors in a class who are serving out the remainder of a three-year term would continue to be removable by stockholders only for cause.

The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A. The Board of Directors has also approved a conforming amendment to our Amended and Restated Bylaws. Such amendment is subject to, and will become effective only upon, the effectiveness of the Amended and Restated Certificate of Incorporation.

If our stockholders do not adopt and approve Proposal 2, our Board will remain classified.

The foregoing discussion does not purport to be complete or cover all aspects in which the Company’s governance would differ from the governance provisions currently in effect. For complete information, you should read the full text of the Amended and Restated Certificate of Incorporation included as Appendix A to this Proxy Statement, which has been marked to show changes from the text of the current Certificate of Incorporation.

 

 

 

18     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

 

EXECUTIVE COMPENSATION

 

PROPOSAL 3ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

 

COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Philosophy and Practices

How We Compensated Our NEOs in 2019

Other Compensation and Governance-Related Matters

Compensation Committee Report

Additional Information About Executive Compensation

2019 Summary Compensation Table

Grants of Plan-Based Awards During Fiscal Year 2019

Outstanding Equity Awards at 2019 Fiscal Year-End

Option Exercises and Stock Vested in Fiscal Year 2019

Nonqualified Deferred Compensation in Fiscal Year 2019

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

ABM Industries Incorporated 2020 Proxy Statement     19


 

 

PROPOSAL 3—ADVISORY VOTE TO APPROVE

EXECUTIVE COMPENSATION

 

Proposal Summary

Pursuant to Item 402 of Regulation S-K, 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. At our 2011 and 2017 annual meetings of stockholders, our stockholders voted to conduct this advisory vote on an annual basis, which we will continue to do until the next vote on the frequency of holding our advisory say-on-pay votes in 2023.

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 2020 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 adoption of this proposal requires the affirmative vote of the holders of a majority of shares of common stock present in person or by proxy at the Annual Meeting and entitled to vote on the proposal, as more fully described under “Questions and Answers About the Proxy Materials and the 2020 Annual Meeting.”

 

20     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

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 2019 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 Revenue Officer

  

 Rene Jacobsen, Executive Vice President and Chief Facilities Services Officer

  

 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

The 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 and Retention Requirements. We require significant stock ownership and retention 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.

ABM Industries Incorporated 2020 Proxy Statement     21


 

 

2019Say-on-Pay” Vote Considerations

In March 2019, our say-on-pay proposal was approved by over 98% of the votes cast by our stockholders. The Committee and management are committed to continually strengthening our pay-for-performance correlation, as well as the overall design of our executive compensation program to support driving the right behaviors for sustainable success, align to best practices in corporate governance and reflect the interests of our stockholders and stakeholders. The Committee and management use the annual say-on-pay vote as a guidepost for stockholder perspective. In light of the overwhelming stockholder support, the Committee did not make any substantial changes to NEO compensation.

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 the independent members of our Board.

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 2019 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. Services provided by Semler Brossy to the Committee relating to executive compensation in fiscal year 2019 included: attended Committee meetings to present and offer independent recommendations, insights and perspectives on executive compensation matters;  assessed our Compensation Comparator Group (“CCG”) used for compensation decisions; assessed how our executive compensation program aligns with pay for performance; reviewed targeted pay levels and the mix of principal compensation components for the CEO and other NEOs; advised on annual and long-term incentive design and plan structure, performance goals, award opportunities and vesting conditions; and updated the Committee on emerging trends and best practices in the area of executive compensation.  The Committee meets multiple times throughout the year with the compensation consultant in executive session without management present.  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 does not provide any other services to the Company. The Committee has determined Semler Brossy to be independent from management and that its engagement did not present any conflicts of interest.

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.

22     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

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 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.

 

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 this proxy data 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.

 

 

2019 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.

*Convergys Corporation was acquired by a subsidiary of SYNNEX Corporation in October 2018.

In October 2018, the Committee reviewed the CCG and determined that the CCG for fiscal year 2019 would remain the same as the CCG utilized in fiscal year 2018.

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 2016–2018 period. ABM’s position in this graph shows that the Company’s pay for performance is generally aligned with that of our CCG.

 

ABM Industries Incorporated 2020 Proxy Statement     23


 

 

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

 

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 12/31/2018 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.

 

24     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

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, at-risk compensation that consists of a mix of performance-based and time-based vested equity awards

 

Designed to link incentives to long-term stockholder value creation and retention

Equity award mix and design of performance metrics reviewed annually

Programs are evaluated annually for alignment with Company strategy and actual performance

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 (“PSs”); and time-based equity awards which vest over a four-year period (“RSUs, and together with PSs, LTIs”). As reflected in the charts below, approximately 84% of our CEO’s compensation is at risk. Approximately 73% of our other NEOs’ compensation is at risk.

 

ABM Industries Incorporated 2020 Proxy Statement     25


 

 

 

CEO Compensation

Other NEO Compensation

HOW WE COMPENSATED OUR NEOS IN 2019

2019 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 2018 and 2019 base salaries as of January 1 of each fiscal year. The base salaries for our NEOs are reviewed annually when the Compensation Committee reviews its compensation benchmark information. Annual changes in base salary typically become effective on January 1, and as noted below, only one NEO had a base salary change during fiscal year 2019.

 

Named Executive Officer

2018 Annual

Base Salary

2019 Annual

Base Salary

Scott Salmirs

$990,000

 

$990,000

 

D. Anthony Scaglione

$550,000

 

$550,000

 

Scott J. Giacobbe

$550,000

 

$550,000

 

Rene Jacobsen

$510,000

 

$513,333

(1)

Andrea R. Newborn

$510,000

 

$510,000

 

 

 

(1)

From January 1, 2019 through September 30, 2019, Mr. Jacobsen’s base salary was $510,000. On October 1, 2019, Mr. Jacobsen received an increase in base salary to $550,000 in connection with his change in responsibilities and appointment to Chief Facilities Services Officer.

 

 

2019 Annual Cash Incentive Compensation

Each year, the Committee reviews the Company’s strategic and financial plan and key business objectives to align the annual cash incentive program (“CIP”) with the achievement of the Company’s goals. The metrics in the CIP have been selected to focus on driving sustainable, long-term value for our stockholders, as demonstrated by financial, safety and strategic goal achievement.  

The Committee reviews the design, metrics and performance level requirements for the CIP annually, establishes the relative weightings of Financial Objectives, Safety Objectives and Personal Objectives for the CEO and all NEOs at the beginning of the year, and evaluates performance achieved against the objectives to determine cash payouts earned under the CIP.

26     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

Each of our NEOs was eligible to earn an annual cash incentive award under the CIP in fiscal year 2019.

2019 Financial and Safety Objectives for the CIP

For 2019, the Committee set Financial Objectives to recognize top-line growth and bottom-line profitability, with potential for adjustment to ensure acceptable margin. The Committee also set 2019 Safety Objectives to foster continued improvement on key measures of workplace safety. The NEOs with enterprise-wide responsibilities were measured on overall Company performance, while Mr. Jacobsen’s objectives included the specific financial and safety performance of the Business & Industry group to reflect his leadership of that business segment for the majority of the fiscal year.

2019 Personal Objectives for the CIP

For 2019, the Committee established Personal Objectives for the CEO in consultation with our full Board that aligned with the Company’s most critical strategic priorities for the year. The CEO also worked with each other NEO to establish Personal Objectives for each such NEO aligned to his or her most critical priorities for the year and that reflect the unique role of each NEO.

At the beginning of fiscal year 2019, 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 185% of target.

 

2019 Annual Cash Incentive Program Bonus Targets and Weighting

 

 

Performance Objectives Weighting

 

Target Bonus as Percentage of Salary(1)

Financial Objectives

Safety Objectives

Personal Objectives

Named Executive Officer

Corporate

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%

20%

40%

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 on October 31, 2019. 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 in 2019

The following table shows the Financial Objectives and Safety Objectives, achievement levels and payout for Messrs. Salmirs, Scaglione and Giacobbe, and Ms. Newborn in fiscal year 2019.

ABM Industries Incorporated 2020 Proxy Statement     27


 

 

2019 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 Income from Continuing Operations(1)  
(36% weighting)

$133.3m

$137.2m

103%

115%

Revenue
(24% weighting)

$6.589b

$6.499b

99%

79%

Funding Level of Financial Objectives (60% weighting)

--

--

--

101%

Funding Level of Safety Objectives(2)

(10% weighting)

--

--

--

160%

 

(1)

A reconciliation of Income from Continuing Operations to Adjusted Income from Continuing Operations is set forth in Appendix B.

 

 

(2)

Comprised of numerous metrics achievement, including but not limited to pre-determined improvement metrics with respect to workers’ compensation, general, aviation and auto liability claims frequency, that resulted in a funding level of 160%.

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

 

2019 Financial and Safety Objectives Achievement and Funding Levels for Mr. Jacobsen

 

Financial and Safety Objectives (70%)

Target

Actual

Actual vs.

Target

Payout

Adjusted Income from Continuing Operations(1)
(12% weighting)

$133.3m

$137.2m

103%

115%

Revenue (8% weighting)

$6.589b

$6.499b

99%

79%

Business & Industry Group Performance – Revenue vs. Budget (16% weighting)(2)

$2.898b

$2.834b

98%

67%

Business & Industry Group Performance Operating
Profit vs. Budget (24% weighting)(2)

$154.5m

$170.9m

111%

156%

Funding Level of Financial Objectives (60% weighting)

--

--

--

114%

Funding Level of Safety Objectives(3)

(10% weighting)

--

--

--

118%

 

(1)

A reconciliation of Income from Continuing Operations to Adjusted Income from Continuing Operations is set forth in Appendix B.

 

 

(2)

Excludes results from UK and Healthcare operations.

 

 

(3)

Comprised of numerous metrics achievement, including but not limited to pre-determined improvement metrics with respect to workers’ compensation, general, aviation and auto liability claims frequency for Business & Industry, that resulted in a funding level of 118%.

 

 

2019 Personal Objectives Achievements and CIP Award Payment for Scott Salmirs, President and CEO

 

Mr. Salmirs’ 2019 Personal Objectives included:

 

 

Driving sales, customer insights and client satisfaction improvement;

 

Building and strengthening the Company’s infrastructure; and

 

Aligning the Company’s organizational structure to scale for growth.

 

The Committee considered Mr. Salmirs’ performance against these and other critical objectives in a process that involved discussions with all of the independent Board members. After considering the perspectives of the Board, the

28     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

Committee concluded that Mr. Salmirs’ delivered on his objectives, including completing critical leadership and organizational changes, continuing progress on the technology roadmap to support the Company’s foundation, delivering $1 billion in new sales, and successfully leading the Company in the face of continued market challenges, The Committee determined payout at 112% of target for Mr. Salmirs for the 30% Personal Objectives component of his 2019 CIP award.

As described above, Financial Objectives, which comprised 60% of Mr. Salmirs’ cash incentive compensation, were funded at approximately 101%, and Safety Objectives, which comprised 10% of Mr. Salmirs’ CIP, were funded at approximately 160%. Accordingly, Mr. Salmirs was awarded a 2019 CIP payment of $1,360,013, which represents approximately 110% of his overall target.

2019 Personal Objectives Achievements and CIP Award Payments for Our Other NEOs

The following table presents the fiscal year 2019 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).

Named Executive Officer

2019 Performance

2019 CIP

Payout

Financial

Objectives Funding Level

(60% weighting)(1)

Safety

Objectives Funding Level

(10% weighting)

Personal Objectives (30% weighting)

Key 2019 Goals and Achievement Funding Levels

D. Anthony Scaglione
Executive Vice President and Chief Financial Officer

 

101%

 

160%

 

97%

$579,700

(105% of Target)

   Grow ABM Profitably – develop systems and processes to improve pricing strategy, drive sales culture and achieve margin and pricing escalation targets

   The ABM Way – lead new systems implementation roadmap

   Client Focused – promote customer satisfaction in order to achieve cross-selling targets with key customers

Scott J. Giacobbe
Executive Vice President and Chief Revenue Officer

 

101%

 

160%

 

90%

$568,150

(103% of Target)

   Grow ABM Profitably – drive a sales culture and achieve growth in revenue and profitability across the enterprise

   Client Focused –improve client retention and account management capabilities

   Engaged People – develop leadership pipeline and drive values-driven culture

Rene Jacobsen
Executive Vice President and Chief Facilities Services Officer

 

114%

 

118%

 

116%

$379,300

(115% of Target)

   Grow ABM Profitably – achieve bookings and sales goals and manage profitability for B&I

   Engaged People – engage team members and foster employee satisfaction

   The ABM Way – support labor management efforts and safety culture

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

 

101%

 

160%

 

116%

$396,890

(111% of Target)

   Grow ABM Profitably – improve efficiencies in contract review processes and manage significant legal matters

   Engaged People – develop legal talent and drive values-driven culture

   The ABM Way – manage Board of Directors meetings content and processes and recruitment efforts

 

(1)

See tables on pages 27-28 for more detail relating to Financial Objectives.

 

 

ABM Industries Incorporated 2020 Proxy Statement     29


 

 

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. In fiscal year 2019, the Committee approved a long-term compensation program for NEOs which included equity awards allocated among (i) time-based RSUs (25% of total equity grant at target), which typically vest over a four-year period, and (ii) PSs with a TSR-modifier (“TSR-Modified Performance Shares”) (75% of total equity grant at target), which are based on Company financial metrics, including Adjusted EBITDA, organic revenue and return on invested capital (“ROIC”) (the definitions for such metrics are set forth in Appendix B). Such TSR-Modified Performance Shares vest after a three-year period and will be modified on a scale of 80% to 120% of target award upon vesting by comparing the Company’s TSR performance relative to the S&P Composite 1500 Commercial Services & Supplies Index over a three-year performance period from November 1, 2018 to October 31, 2021.

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 at 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 January of fiscal year 2019, our NEOs received grants of equity awards in the form of TSR-Modified 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 2019 Equity Awards*

 

2019-2021
TSR-Modified Performance Shares

2019 RSU

 

Named Executive Officer

Number Granted
(at target)

Grant Date Value
($)

Number
Granted

Grant Date
Value
($)

Aggregate

Value of Equity Awards
(at target)

($)

Scott Salmirs

76,349

2,969,976

28,350

989,982

3,959,958

D. Anthony Scaglione

26,510

1,031,238

9,843

343,718

1,374,957

Scott J. Giacobbe

21,208

824,991

7,875

274,995

1,099,986

Rene Jacobsen

9,832

382,465

10,810

377,485

759,950

Andrea R. Newborn

9,832

382,465

3,651

127,493

509,958

*

The Company does not publicly disclose its specific targets applicable to equity compensation programs until after the performance period is over, including specific target goals for financial metrics comprised of Adjusted EBITDA, organic revenue and ROIC due to potential competitive harm. The Committee has set performance goals that it believes are challenging, but attainable, with significant effort on the part of the Company.  For additional information on our NEOs’ fiscal year 2019 equity awards, please see “Grants of Plan-Based Awards During Fiscal Year 2019.”

 

2017-2019 Performance Share Programs Overview

In the 2017 fiscal year, we granted two types of PS awards to our executive officers: (i) PS awards that were earned, if at all, based on the achievement of relative TSR goals and (ii) PS awards that were earned, if at all, based on the achievement of financial metrics, in each case, over a three-year performance period as described in our proxy statement filed on February 7, 2018 and that were earned as detailed below following the end of the performance period.

Results of 20172019 Performance Share Program

Our 2017-2019 Performance Share Program for NEOs, which commenced with the 2017 fiscal year, used performance metrics comprised of Adjusted EBITDA, organic revenue growth and ROIC, and covered a performance period from

30     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

November 1, 2016 through October 31, 2019. Award funding for this 2017-2019 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

 

 

The following table summarizes the results under the 2017-2019 Performance Share Program.

 

Results of 2017-2019 Performance Share Program

 

Weighting

Goal

Actual

%
Achievement

%
Payout

Weighted Payout

Adjusted EBITDA(1)

60%

$277.8m

$256.0m

92.2%

91.6%

55.0%

Organic Revenue(2)

20%

$5.670b

$5.665b

99.9%

100.0%

20.0%

ROIC(3)

20%

8.5%

6.4%

75.3%

50.7%

10.1%

Award Payout

 

 

 

 

 

85.1%

 

 

(1)

A reconciliation of Net Income to Adjusted EBITDA is set forth in Appendix B.

 

 

 

(2)

A reconciliation of Revenue to Organic Revenue is set forth in Appendix B.

 

 

 

(3)

A definition of ROIC is set forth in Appendix B.

 

 

 

Named Executive Officer

2017-2019
Performance Shares
(Target)

2017-2019 Performance Shares (Earned)(1)

Scott Salmirs

31,978

27,213

D. Anthony Scaglione

12,658

10,772

Scott J. Giacobbe

3,596

3,060

Rene Jacobsen

3,596

3,060

Andrea R. Newborn

0

0

 

 

(1)

Includes dividend equivalent units paid on earned shares.

 

Results of 20172019 TSR-Based Performance Share Program

Under the 2017–2019 TSR-based Performance Share Program (the “2017-2019 TSR-PSP”), the measurement period was a three-year period commencing on November 1, 2016 and ending on October 31, 2019, with achievement under the 2017-2019 TSR-PSP being measured by reference to the S&P SmallCap 600 Index.

Award funding for the 2017-2019 TSR-PSP is set forth below.

 

2017-2019 TSR Performance Share Table

 

ABM Three-Year
Percentile Ranking

Shares Earned
(as % of Target)

Threshold

25th Percentile

50%

Target

50th Percentile

100%

Maximum

75th Percentile

150%

ABM Industries Incorporated 2020 Proxy Statement     31


 

 

The Company ranked in the 28th percentile of S&P SmallCap 600 Index companies, resulting in a payout under the 2017–2019 TSR PSP of 57% of target.

 

 

Named Executive Officer

2017-2019
TSR Performance
Shares
(Target)

2017-2019
TSR Performance Shares
(Earned)(1)

Scott Salmirs

17,184

9,795

D. Anthony Scaglione

6,364

3,627

Scott J. Giacobbe

1,033

589

Rene Jacobsen

1,908

1,087

Andrea R. Newborn

9,547

5,441

 

(1) Includes dividend equivalent units accrued on earned shares as of January 10, 2020. Such shares were earned as of January 10, 2020, however they do not vest until September 2020.

 

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 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 2019, see “Potential Benefits on Termination.”

Stock Ownership Guidelines

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 PS program and vested RSUs, 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

32     ABM Industries Incorporated 2020 Proxy Statement


 

 

 

determining if ownership guidelines have been achieved; however, unearned PSs 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 have either met or exceeded their stock ownership guidelines or are well positioned to achieve compliance within the required time period.

Anti-Hedging and Anti-Pledging Policies

Directors, executive officers and other employees are prohibited from engaging in hedging transactions with respect to our securities. “Hedging transactions” can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds or through other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities. Because hedging transactions might permit a director, executive officer or other employee to continue to own our securities, whether obtained through our equity compensation plans or otherwise, without the full rewards and risks of ownership, such hedging transactions are prohibited. 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 Rule 10b5-1 trading plan must be submitted in writing to the Company’s legal department for review and approval prior to its effective date, and no transaction pursuant to any such plan may occur until at least 30 days following such plan’s effective date.

 

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 2019 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 pledging, 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

ABM Industries Incorporated 2020 Proxy Statement     33


 

 

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 2019” 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.

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, 2019 and the 2020 Proxy Statement.

Compensation Committee:

Thomas M. Gartland, Chair

LeighAnne G. Baker

Linda Chavez

Donald F. Colleran

 

 

34     ABM Industries Incorporated 2020 Proxy Statement


 

 

Additional Information About Executive Compensation

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

 

2019 Summary Compensation Table

 

 

 

 

 

 

 

 

 

Salary

Stock

Awards(1)

Non-equity

Incentive

Plan

Compensation(2)

All

Other

Compensation(3)

Total

Name and Principal Position

Year

($)

($)

($)

($)

($)

  Scott Salmirs

2019

990,000

3,959,958

1,360,013

145,683

6,455,654

President and

2018

975,000

3,959,941

1,020,567

67,135

6,022,643

Chief Executive Officer

2017

883,333

2,949,955

805,320

47,763

4,686,371

  D. Anthony Scaglione

2019

550,000

1,374,957

579,700

50,987

2,555,644

Executive Vice President

2018

541,666

1,399,968

461,835

30,651

2,434,120

and Chief Financial Officer

2017

495,833

1,049,942

339,465

20,348

1,905,588

  Scott J. Giacobbe

2019

550,000

1,099,986

568,150

46,042

2,264,178

Executive Vice President

2018

550,000

1,099,936

461,835

29,440

2,141,211

and Chief Revenue Officer

2017

449,900

734,928

344,575

41,919

1,571,322

  Rene Jacobsen

2019

513,333

759,950

379,300

50,304

1,702,887

Executive Vice President and

2018

508,333

749,926

311,386

36,894

1,606,539

      Chief Facilities Services Officer

2017

474,583

734,893

265,380

33,917

1,508,773

  Andrea R. Newborn(4)

2019

510,000

509,958

396,890

21,356

1,438,204

Executive Vice President, General

2018

508,333

499,950

299,773

18,538

1,326,594

Counsel and Secretary

 

 

 

 

 

 

 

(1)

The values shown are the aggregate grant date value for PS and 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 PSs. A discussion of assumptions used in calculating these values may be found in Note 17, “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, 2019. The maximum values for TSR-Modified Performance Shares granted in fiscal year 2019 under the 2019–2021 Performance Share Program are as follows: Mr. Salmirs, $6,680,843; Mr. Scaglione, $2,319,731; Mr. Giacobbe, $1,855,785; Mr. Jacobsen, $860,339; and Ms. Newborn, $860,339. These values are calculated using the October 31, 2019 closing price of $36.46 per share.

(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 2019, this column represents:

 

for Mr. Salmirs: ABM contributions to the 401(k) plan, $11,200; spousal/family travel, $9,009; TSA/registered traveler annual fee, $85; and value of dividend equivalents (DEUs) credited in fiscal year 2019 with respect to earned and vested PSs and all outstanding deferred and non-deferred RSUs, $125,389.  

 

for Mr. Scaglione: ABM contributions to the 401(k) plan, $11,200; and value of dividend equivalents (DEUs) credited in fiscal year 2019 with respect to earned and vested PSs and all outstanding deferred and non-deferred RSUs, $39,787.

 

for Mr. Giacobbe: ABM contributions to the 401(k) plan, $11,200; spousal/family travel, $128; and value of dividend equivalents (DEUs) credited in fiscal year 2019 with respect to earned and vested PSs and all outstanding RSUs, $34,714.

 

for Mr. Jacobsen: ABM contributions to the 401(k) plan, $9,650; auto allowance, $10,200; spousal/family travel, $244; and value of dividend equivalents (DEUs) credited in fiscal year 2019 with respect to earned and vested PSs and all outstanding RSUs, $30,210.

 

for Ms. Newborn: ABM contributions to the 401(k) plan, $11,200; spousal/family travel, $108; and value of dividend equivalents (DEUs) credited in fiscal year 2019 with respect to all outstanding RSUs, $10,048.

(4)

For Ms. Newborn, only compensation for fiscal year 2018 and 2019 are shown because she was not an NEO in fiscal year 2017.

ABM Industries Incorporated 2020 Proxy Statement     35


 

 

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 2019

 

 

 

 

 

 

 

 

 

 

Name

Grant

Date

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

198,000

1,237,500

2,289,375

 

 

 

 

 

 

1/9/2019

 

 

 

30,540

76,349

183,238

 

2,969,976

 

1/9/2019

 

 

 

 

 

 

28,350

989,982

  D. Anthony Scaglione

n/a

88,000

550,000

1,017,500

 

 

 

 

 

 

1/9/2019

 

 

 

10,604

26,510

63,624

 

1,031,239

 

1/9/2019

 

 

 

 

 

 

9,843

343,718

  Scott J. Giacobbe

n/a

88,000

550,000

1,017,500

 

 

 

 

 

 

1/9/2019

 

 

 

8,483

21,208

50,899

 

824,991

 

1/9/2019

 

 

 

 

 

 

7,875

274,995

  Rene Jacobsen

n/a

48,960

306,000

566,100

 

 

 

 

 

 

1/9/2019

 

 

 

3,933

9,832

23,597

 

382,465

 

1/9/2019

 

 

 

 

 

 

10,810

377,485