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Table of Contents

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 ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

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

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

Reliance Steel & Aluminum Co.

(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):

ý

 

No fee required.

o

 

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:
        
 
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o

 

Fee paid previously with preliminary materials.

o

 

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:
        
 
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Table of Contents

GRAPHIC


LOGO

350 South Grand Avenue, Suite 5100
Los Angeles, California 90071
(213) 687-7700

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 
   
   
   
   
   

TIME AND PLACE

      RECORD DATE
 


 


 


GRAPHIC

GRAPHIC
GRAPHIC


 


May 19, 2021


10:00 a.m. PDT


Electronically
via live webcast accessible at
www.virtualshareholdermeeting.com/RS2021


 

 

 

GRAPHIC

 

Only stockholders at the close of business on March 26, 2021 are entitled to notice of, and to vote at, the Annual Meeting or any adjournments thereof.
 

ITEMS OF BUSINESS


1

 

To elect the ten directors nominated by our Board of Directors to hold office until our next annual meeting and until his or her successor is elected and qualified.

2

 

To consider a non-binding, advisory vote to approve the compensation of the Company's named executive officers.

3

 

To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for 2021.

4

 

To transact such other business, if any, as properly comes before the meeting or any adjournment thereof.

    These items of business are more fully described in the accompanying proxy statement.

PROXY VOTING

 
   
   
   
   
   

GRAPHIC
INTERNET

Visit the website noted on your proxy card to vote online.

     

GRAPHIC
BY TELEPHONE

Use the toll-free telephone number on your proxy card to vote by telephone.

     

GRAPHIC
BY MAIL

Sign, date, and return your proxy card in the enclosed envelope to vote by mail.

   

As with last year's annual meeting, this year's meeting will be a completely "virtual" meeting of stockholders. You can attend the Annual Meeting online, vote your shares electronically, and submit your questions during the Annual Meeting by visiting at www.virtualshareholdermeeting.com/RS2021. An audio recording of the Annual Meeting will be available on the Investors section of our website at investor.rsac.com after the meeting.

Your vote is important. Whether or not you plan to participate in the Annual Meeting, it is important that your shares be represented, and we hope you will vote as soon as possible.

To make it easier, you may vote on the Internet or by telephone. The instructions attached to this Notice describe how to use these convenient services. Even if you give your proxy, you have the right to vote electronically if you participate in the Annual Meeting.


 

 

By Order of the Board of Directors,

 

 

GRAPHIC
    William A. Smith II
Los Angeles, California   Senior Vice President, General Counsel
April 8, 2021   and Corporate Secretary

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

THIS PROXY STATEMENT, OUR ANNUAL REPORT TO STOCKHOLDERS, OUR 2020 ANNUAL REPORT ON FORM 10-K AND A PROXY FORM FOR VOTING ARE AVAILABLE ONLINE AT WWW.PROXYVOTE.COM BY USING THE 16-DIGIT CONTROL NUMBER PROVIDED TO YOU.


PROXY STATEMENT

TABLE OF CONTENTS

Proxy Summary

  1

Voting Information

  15

Information Concerning Our Common Stock

  17

Proposal No. 1 - Election of Directors

  18

Proposal No. 2 - Advisory Vote on the Approval of the Compensation of Our Named Executive Officers

  19

Proposal No. 3 - Ratification of Independent Registered Public Accounting Firm

  20

Board of Directors and Management

  22

Compensation Discussion and Analysis

  35

Executive Summary

  35

Executive Compensation Program Design

  35

Compensation Committee Response to COVID-19

  36

2020 Financial and Operating Highlights

  37

Relationship Between Pay and Performance

  39

Key Executive Compensation Practices

  41

2020 Say on Pay Vote

  42

2021 Executive Succession

  43

Overview of Our Executive Compensation Program

  43

Compensation Program Objectives

  43

Elements of Compensation

  44

Allocation of Compensation Components

  46

Mix of Principal Compensation Components

  46

How We Make Decisions Regarding Executive Compensation

  47

Compensation Committee and Independent Directors

  47

Independent Compensation Consultant

  47

Compensation Committee Review of Executive Compensation Peer Group and Other Data

  48

Executive Compensation Peer Group

  48

Analysis of 2020 Company and Executive Compensation Peer Group Compensation

  49

Internal Pay Equity

  49

Principal Components of Our Executive Compensation Program

  50

Base Salary

  50

Annual Cash Incentive Awards

  50

Long-Term Equity Incentive Compensation

  51

SERP and Deferred Compensation Plan

  53

Other Benefits

  53

Additional Information

  54

No Employment Agreements; Potential Payments Upon Termination or Change in Control

  54

Estimated Benefits Upon Termination or Change in Control

  55

Stock Ownership Requirements

  56

Clawback and Recoupment Policy

  56

Hedging and Pledging Policies

  57

Tax and Accounting Considerations

  57

Compensation Committee Report

  58

Executive Compensation Tables

  59

Summary Compensation Table

  59

Grants of Plan Based Awards

  60

Option Exercises and Stock Vesting

  61

Outstanding Equity Awards at Fiscal Year-End

  61

Pension Benefits

  62

Nonqualified Deferred Compensation

  62

Equity Compensation Plan Information

  62

Pay Ratio Disclosure

  63

Director Compensation

  64

Director Summary Compensation Table

  64

Securities Ownership of Certain Beneficial Owners and Management

  65

Board of Directors and Corporate Governance

  67

Compensation Committee Interlocks and Insider Participation

  75

Audit Committee Report

  76

Related Person Transactions and Indemnification

  77

Stockholder Proposals and Nominations for the 2022 Annual Meeting

  77

Stockholders Sharing the Same Address

  78

Annual Report

  78

Table of Contents

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement and in our Annual Report on Form 10-K for the year ended December 31, 2020. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

ANNUAL MEETING OF SHAREHOLDERS

 
   
   
   
   
   

TIME AND PLACE

      RECORD DATE
 


 


 


GRAPHIC

GRAPHIC
GRAPHIC


 


May 19, 2021


10:00 a.m. PDT


Electronically via live webcast accessible at
www.virtualshareholdermeeting.com/RS2021


 

 

 

GRAPHIC

 

Only stockholders at the close of business on March 26, 2021 are entitled to notice of, and to vote at, the Annual Meeting or any adjournments thereof.
 

PROXY VOTING

 
   
   
   
   
   

GRAPHIC
INTERNET

Visit the website noted on your proxy card to vote online.

     

GRAPHIC
BY TELEPHONE

Use the toll-free telephone number on your proxy card to vote by telephone.

     

GRAPHIC
BY MAIL

Sign, date, and return your proxy card in the enclosed envelope to vote by mail.

   

VOTING MATTERS

PROPOSAL
  VOTING
RECOMMENDATION

  PAGE

1

 

To elect the ten directors nominated by our Board of Directors to hold office until our next annual meeting and until his or her successor is elected and qualified.

 

FOR
each nominee

 

18

2

 

To consider a non-binding, advisory vote to approve the compensation of the Company's named executive officers.

 

FOR

 

19

3

 

To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for 2021.

 

FOR

 

20

4

 

To transact such other business, if any, as properly comes before the meeting or any adjournment thereof.

 


 

RELIANCE STEEL & ALUMINUM CO.    1


Table of Contents

PROXY SUMMARY

VOTING AND PARTICIPATION AT THE MEETING

Stockholders as of the close of business on the record date of March 26, 2021 (the "Record Date") are entitled to vote at the Annual Meeting. A list of these stockholders is available at the principle executive offices of the Company in Los Angeles, California. Each share of common stock is entitled to one vote on each matter to be voted on. Voting may be done over the Internet, by telephone, by completing and mailing the proxy card, or electronically at the Annual Meeting. Additional information including information about voting by beneficial holders who hold shares through a bank, broker or financial institution is provided under "Voting Information" on page 15 and "Information Concerning Our Common Stock" on page 17.

We hope you will participate in the meeting by accessing our live webcast. If you do, you will need the 16-digit control number included on your proxy card, on your Notice of Internet Availability of Proxy Materials or on the instructions that accompanied your proxy materials. If you are a beneficial holder, you may also vote electronically at the meeting by using the 16-digit control number included on the voting instruction form provided by your broker. If you are a beneficial holder but do not have a control number, you may gain access to the meeting by contacting your broker or by following the instructions included with your proxy materials. Even if you plan to participate in the meeting by live webcast, we encourage you to vote your shares in advance of the Annual Meeting date.

VIRTUAL STOCKHOLDER MEETING

As with last year's annual meeting, this year's meeting will be a completely "virtual" meeting of stockholders. If you were a stockholder as of the close of business on the Record Date, you can attend the Annual Meeting online, vote your shares electronically, and submit your questions and view our list of stockholders as of the Record Date during the Annual Meeting, by visiting www.virtualshareholdermeeting.com/RS2021. You will need to have your 16-digit control number included on your Notice Regarding the Availability of Proxy Materials (the "Notice of Internet Availability") or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting. The meeting webcast will begin promptly at 10:00 a.m. Pacific Daylight Time. Online check-in will begin approximately 15 minutes before then and we encourage you to allow ample time for check-in procedures. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page. An audio recording of the Annual Meeting will be available on the Investors section of our website after the meeting.

By hosting the Annual Meeting virtually, we believe we are able to expand access, improve communication and lower costs while reducing the environmental impact of the meeting. This approach also provides for the health and safety of our stockholders, employees and directors in light of the public health and safety considerations posed by the ongoing coronavirus ("COVID-19") pandemic. Additional information about our virtual stockholder meeting, including procedures for submitting questions at the Annual Meeting, is provided under "Virtual Stockholder Meeting" on page 14.

The Company anticipates that the Notice of Internet Availability in connection with these proxy solicitation materials will first be mailed on or about April 8, 2021 to all stockholders entitled to vote at the Annual Meeting and we will post our proxy materials on the website referenced in the Notice of Internet Availability. As more fully described in the Notice of Internet Availability, all stockholders may choose to access our proxy materials on the website referred to in the Notice of Internet Availability or may request to receive a printed set of our proxy materials.

2    2020 PROXY STATEMENT


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PROXY SUMMARY

PROXY STATEMENT

Your vote is very important. Reliance's Board of Directors is requesting that you allow your common stock to be represented and voted at the Annual Meeting by the Company's officers (proxies) named on the proxy card. The proxy statement is first being sent and made available to our stockholders on or about April 8, 2021.

CORPORATE GOVERNANCE HIGHLIGHTS(see page 67)

  HIGHLIGHTS OF CORPORATE GOVERNANCE
  GRAPHIC All directors are elected annually by majority of votes cast.   GRAPHIC Our stockholders have the right to act by written consent.  



GRAPHIC



The Company has an independent, non-executive Chairman of the Board.




GRAPHIC



Special meetings may be called by stockholders holding shares entitled to cast not less than 10% in voting power of our outstanding stock.



 


GRAPHIC


Clawback and recoupment policies.


 


GRAPHIC


Our Bylaws provide our stockholders with a meaningful proxy access right.


 



GRAPHIC



Following the annual meeting, we expect 40% of our directors will be women.




GRAPHIC



Board oversight in executive succession planning.



 


GRAPHIC


All of our standing committees of the Board consist solely of independent directors.


 


GRAPHIC


No super-majority voting requirements to approve mergers or other business combinations.


 



GRAPHIC



Independent directors meet regularly in executive sessions.




GRAPHIC



No stockholder rights plan or poison pill.



 


GRAPHIC


The Board has adopted a policy that directors should not stand for re-election after reaching age 75.


 


GRAPHIC


Reliance has adopted a Code of Conduct that applies to all directors, executive officers and senior management.


 



GRAPHIC



100% Board and committee meeting attendance in 2020.




GRAPHIC



Annual Board and committee self-evaluations.



 


GRAPHIC


Stock ownership and retention requirements applicable to all directors and officers.


 


GRAPHIC


Prohibition of speculative and hedging transactions by all employees and directors.


 

 


 


 


 


 


 


 

RELIANCE STEEL & ALUMINUM CO.    3


Table of Contents

PROXY SUMMARY

KEY EXECUTIVE COMPENSATION PRACTICES

        WHAT WE DO AND DON'T DO
  See
Pages

 

          GRAPHIC   Strong pay-for-performance compensation structure with approximately 74% of our Chief Executive Officer ("CEO") and 65% of our other named executive officers ("NEOs") target total direct compensation tied to performance metrics.       36 & 46

 

          GRAPHIC
Target total direct compensation of our NEOs designed to approximate the market median of our executive compensation peer group when targeted performance levels are achieved.       36

 

 
We align executive compensation with the interests of our stockholders
      GRAPHIC   Performance-based equity awards represented 80% of our CEO and President's (and former Chief Financial Officer ("CFO") during 2020) equity awards and 60% of our other NEOs' equity awards.       40

 

          GRAPHIC
Clawback and recoupment policy for cash and equity compensation.     56

 

          GRAPHIC   Stock ownership and retention requirements applicable to all directors and corporate officers, including our NEOs.       56

 

 

Our executive compensation program is designed to reward

     

GRAPHIC


Double trigger provisions for accelerated vesting of equity awards upon a change in control.

 

 
56

 

 

the Company's executive officers for strong operational and

     

GRAPHIC

 

All NEO performance-based equity awards are tied to a three-year performance target.

     
40

 

 

financial performance and to avoid excessive risk taking

     

GRAPHIC


Broad and deep distribution of equity awards throughout management while managing the dilutive impact and expense associated with those awards.

 

 
51
     

 

          GRAPHIC   Limited perquisites.       53

 

          GRAPHIC
Annual stockholder advisory vote to approve NEO compensation.     19

 

          GRAPHIC   Independent compensation committee.       47

 

          GRAPHIC
Independent compensation consultant.     47

 

  We adhere to executive       GRAPHIC   Independent, non-executive Chairman of the Board enhances the effectiveness of the Board's oversight and governance and compensation practices.       72

 

  compensation best practices       GRAPHIC
All variable compensation plans have caps on plan formulas; no unlimited compensation.     n/a

 

          GRAPHIC   Minimum vesting provisions provide that awards must be subject to a minimum one-year vesting period, except with respect to a maximum of 5% of the remaining shares available for grant under the Amended and Restated 2015 Incentive Award Plan (currently 137,990) shares.       n/a

 

          GRAPHIC
No employment agreements, severance agreements, change in control/golden parachute agreements or other similar agreements with any executive officer.     54

 

          GRAPHIC   No tax gross-ups for perquisites, change in control excise taxes or otherwise.       n/a

4    2020 PROXY STATEMENT


Table of Contents

PROXY SUMMARY

        WHAT WE DO AND DON'T DO
  See
Pages

 

          GRAPHIC

No dividends on unvested restricted stock units ("RSUs"). Dividends accrue and are paid only upon vesting subsequent to achievement of the applicable performance criteria.     n/a

 

          GRAPHIC   No hedging of Reliance common stock by directors, officers and employees subject to the quarterly trading blackout under our Insider Trading and Securities Compliance Policy.       57

 

          GRAPHIC
No pledging of Reliance securities by directors, officers and employees subject to the quarterly trading blackout under our Insider Trading and Securities Compliance Policy.     57

 

          GRAPHIC   No incentive plan design or feature which would encourage excessive risk-taking.       n/a

 

          GRAPHIC
No share recycling.     n/a

 

          GRAPHIC   No acceleration of unvested awards permitted, except for death, disability or termination without cause following a change in control.       n/a

 

          GRAPHIC
Froze base salaries at 2019 levels for all corporate officers in 2020 (including our NEOs).     36

 

  Compensation Committee       GRAPHIC   No change to payout opportunities for 2020.       36

 

  Response to COVID-19       GRAPHIC
No change to equity award design for 2020.     36

 

          GRAPHIC   No mid-cycle adjustments to outstanding equity awards.       n/a

RELIANCE STEEL & ALUMINUM CO.    5


Table of Contents

PROXY SUMMARY

CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Reliance has a proud heritage and demonstrated commitment to ethical business practices, sustainability and community engagement. Our commitment to corporate responsibility and sustainability is highlighted in our six core values—People, Diversity, Integrity, Leadership, Service and Partnerships. We have always focused on delivering strong financial results and returns to our stockholders, and we remain committed to doing so in a sustainable manner that respects the communities in which we operate.

Set forth below are some highlights of our corporate responsibility and sustainability initiatives. You can find additional details about these and other related programs on our website at https://www.rsac.com/environmental-social-and-governance. (The information on the Company's website is not part of this proxy statement and is not soliciting material.)

        PEOPLE AND DIVERSITY

 

          Rooted in our fundamental commitment to the health, safety and wellness of our employees, their families and the communities in which we live and do business, we leveraged the core values of our culture of safety to respond to the COVID-19 pandemic:    

 

          GRAPHIC
We implemented new, supplemental safety protocols and procedures to promote health and safety and increase awareness, including temperature monitoring, physical distancing and wearing of face coverings in the workplace, enhanced cleaning, sanitation and hygiene practices and detailed contact tracing procedures to identify and isolate potential exposures within the workplace.  

 

          GRAPHIC   We developed and implemented policies and procedures based on new health and safety regulations and standards issued by federal, state and local government agencies as well as the Centers for Disease Control and Prevention and other public health authorities.    

 

  Safety and Wellness in Response to COVID-19       GRAPHIC
We engaged a physician consultant to obtain professional medical advice about the virus and to inform our efforts to reduce risk of COVID-19 exposure to our colleagues and customers in and beyond the workplace.  

 

          GRAPHIC   We leveraged technology and embraced remote work where feasible, and modified the way we conduct many aspects of our business to reduce the number of in-person interactions in and out of the workplace. We significantly expanded the use of virtual interactions in all aspects of our business, including customer facing activities, internal meetings and our annual meeting of stockholders.    

 

          GRAPHIC
We invested in new technologies such as touchless thermal temperature screening devices and contact tracing wristbands to increase safe behavior and mitigate the spread of the virus in our workplaces.  

 

          GRAPHIC   We encouraged our employees to stay home if they did not feel well or might have been exposed to the COVID-19 virus. We adopted policies to address exclusion from the workplace due to COVID-19 illness or known or suspected exposure, and stringent return to work protocols. We implemented a special COVID-19 aid policy providing paid leave for employees impacted by the virus.    

6    2020 PROXY STATEMENT


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PROXY SUMMARY

        PEOPLE AND DIVERSITY

 

          GRAPHIC   Safety is our top priority and an important element of our day-to-day operational focus. The Company's safety programs are designed around recognized standards with appropriate variations addressing the multiple jurisdictions and regulations, specific hazards and unique working environments of the Company's operations.    

 

          GRAPHIC
Our SMART Safety program focuses on embedding our culture of safety across all of our operations.    

 

          GRAPHIC   We strive to have zero fatalities and no life-threatening or life-altering injuries and illnesses. Our executive team supports a safety management system that includes policies, standard practices and goals at our facilities, including:    

 

             

conducting regular safety assessments;

 

 

             

monitoring best practices and compliance with regulatory requirements;

   

 

  Worker Safety        

training our employees to improve safety practices;

 

 

             

integrating video-based safety programs into substantially all Company-owned trucks; and

   

 

           

maintaining emergency preparedness and response plans.

 

 

          GRAPHIC   The Company utilizes a mixture of indicators to assess the health and safety performance of its domestic operations. Lagging indicators include the OSHA Total Recordable Incident Rate ("TRIR"), Recordable Vehicle Incident Rate ("RVIR") and Lost Work Days. In fiscal year 2020, the Company had a TRIR of 1.86, a RIVR of 1.38 and 4,824 Lost Work Days.    

 

          GRAPHIC
Our focus on safety in 2020 resulted in our: (i) TRIR decreasing 23%; (ii) DVIR decreasing 15%; and (iii) Lost Work Days decreasing 23%. Lowering our incident rate means fewer people were injured and fewer lives were impacted.  

 

          GRAPHIC   To help attract and retain the best employees, we offer competitive compensation and benefits. In addition to base salaries, our compensation programs can include annual bonuses, stock-based compensation awards, a 401(k) plan with employer matching opportunities, healthcare and insurance benefits, health savings and flexible spending accounts.    

 

  Employee Wellness       GRAPHIC
We believe that we provide industry-leading healthcare benefits to our employees and funded approximately 89% of the costs associated with our U.S. employees' health insurance coverage in 2020.  

 

          GRAPHIC   As part of our comprehensive benefits offering, we provide employees and their covered spouses/domestic partners with on-site health screenings, individualized assessments and personalized wellness coaching. This one-on-one program integrates phone and mail-based communications and is designed to support employees' physical and mental health by providing individualized tools and coaching resources to help them improve or maintain their health status and encourage engagement in healthy behaviors.    

RELIANCE STEEL & ALUMINUM CO.    7


Table of Contents

PROXY SUMMARY

        PEOPLE AND DIVERSITY

 

          GRAPHIC
We believe that superior Company performance requires contributions from a variety of employee experiences, backgrounds, and characteristics.  

 

          GRAPHIC   We are committed to providing fair and unbiased opportunities and hiring, developing and supporting a diverse and inclusive workplace.    

 

  Diversity, Equity and Inclusion       GRAPHIC
Following the annual meeting, we expect women will compromise 40% of our Board and serve in several key executive leadership roles at the Company, including: President; Vice President, Corporate Initiatives; Vice President, Chief Information Officer; and Vice President, Tax.  

 

          GRAPHIC   Three of the last four new directors nominated to the Board are women.    

 

          GRAPHIC
Our commitment to diversity and inclusion is also reinforced by the Code of Conduct, which forbids employment discrimination or harassment based on race, color, sex (including pregnancy, childbirth, and related medical conditions), national origin, religion, age, disability, genetic information, veteran status, sexual orientation, marital status, or any other characteristic protected by applicable law.  

8    2020 PROXY STATEMENT


Table of Contents

PROXY SUMMARY

        INTEGRITY AND LEADERSHIP

 

          GRAPHIC   Our Company-wide ethics and compliance program is designed to ensure that integrity guides our business every day, and in every decision we make.    

 

  Ethics       GRAPHIC
Our entire workforce is required to adhere to our ethics policies and procedures, and to comply with all applicable laws and regulations.  

 

          GRAPHIC   The Reliance Code of Conduct and our Anti-Bribery and Anti-Corruption Policy apply to all Company directors, officers, and employees.    

 

          GRAPHIC
Our Code of Conduct and related policies set forth expectations regarding how we conduct business worldwide.  

 

          GRAPHIC   Training on the Code of Conduct and Anti-Bribery and Anti-Corruption Policy is assigned to all new colleagues upon hire and to existing colleagues regularly.    

 

  Code of Conduct and Related Policies Promoting Ethical Behavior       GRAPHIC
We maintain a confidential hotline and website to allow persons to report, without fear of retaliation, any inappropriate acts or omissions relating to our policies and practices. The hotline and website are provided by an independent third-party and are available worldwide and are translated into the local languages of our operations. All hotline and website reports/inquiries are administrated by the Vice President, Enterprise Risk. To date, these reports/inquiries have primarily related to employee human resources with a lesser number of safety and financial reports. The Audit Committee is informed of all hotline/website reports and any matters, whether through the hotline, website, management, or otherwise, involving accounting, internal control, or auditing matters.  

 

          GRAPHIC   The Reliance Policy on U.S. Political Activity and Spending Practices requires that all political contributions, payments or other support to U.S. political parties, committees or candidates from corporate funds must be made in accordance with applicable campaign finance laws. Company funds or resources cannot be used for, or be contributed to, political campaigns or practices under any circumstances unless pre-approved by the Company's General Counsel. However, it is acceptable for Company employees to make lawful personal political contributions as the Company supports its employees becoming involved in the political process and their communities.    

 

RELIANCE STEEL & ALUMINUM CO.    9


Table of Contents

PROXY SUMMARY

        INTEGRITY AND LEADERSHIP

 

          GRAPHIC
We are committed to mitigating the impact that our products and operations may have on the environment.    

 

          GRAPHIC   As a distributor and "first-stage" processor of metal products, our operations, by their nature, have a limited environmental impact as we do not emit significant amounts of carbon dioxide or other greenhouse gases.    

 

         

GRAPHIC


Our operations utilize steel and aluminum, which are inherently sustainable products, as they (i) are some of the most commonly-recycled materials in the United States and (ii) can be 100% recycled without loss of quality.

 

 

          GRAPHIC   In 2020, we reintroduced over 430 million pounds of recycled scrap material into the manufacturing life cycle.    

 

  Environment and Sustainability       GRAPHIC
The majority of our trucking fleet utilizes late model energy-efficient diesel tractors that consume less fuel and reduce emissions.  

 

          GRAPHIC   We use propane fuel to operate our forklifts.    

 

          GRAPHIC
We believe that our fleet of approximately 1,670 trucks (some of which are leased) is one of the Company's largest sources of greenhouse gas ("GHG") emissions. Calculating GHG emissions in accordance with methodologies outlined by the GHG protocol show that in 2020, the Company's domestic fleet of trucks (which represents over 97% of the Company's entire truck fleet) emitted approximately 123,000 metric tons of GHG emissions, compared to approximately 130,000 metric tons in 2019 and 133,000 metric tons in 2018. We believe the decrease in GHG emissions from our fleet in 2020 was largely due to the significant decline in demand for the products we sell as a result of COVID-19.  

 

          GRAPHIC   In 2021, the Company has budgeted over $1.5 million for the installation of solar power equipment at its operating facilities.    

 

          GRAPHIC
In the last three years, the Company has invested approximately $4 million on energy efficient lighting for its facilities.  

 

10    2020 PROXY STATEMENT


Table of Contents

PROXY SUMMARY

        SERVICE AND PARTNERSHIPS

 

          GRAPHIC   Reliance is committed to investing in and enriching the communities in which we live and work.    

 

          GRAPHIC
Giving back to those in need and enriching people's lives is a deep-rooted philosophy embedded in our corporate culture that extends to our employees around the world, including by:  

 

             

supporting local charities by matching certain fundraising efforts of our subsidiaries and divisions;

   

 

  Community Service        

acting as a corporate sponsor of the September 11 National Day of Service and Remembrance; and

 

 

             

supporting non-profit organizations that provide veterans and transitioning armed services members with advanced manufacturing training.

   

 

          GRAPHIC
Our dedication to each and every member of our Family of Companies is the foundation for "Reliance Cares," our emergency assistance fund dedicated to supporting employees impacted by natural disasters.  

 

         

GRAPHIC

 

Through employee funded contributions, matched dollar-for-dollar by Reliance, we have been able to provide 380 grants to employees (including over 140 grants to support employees and their families responding to COVID-19 related personal impacts) since the inception of Reliance Cares in 2017.

   

RELIANCE STEEL & ALUMINUM CO.    11


Table of Contents

PROXY SUMMARY

BOARD NOMINEES (see page 17)

      Committee Memberships
           
    Name and Occupation
Independent
Audit
Compensation
Nominating
Governance


Other Public
Company
Boards
GRAPHIC   SARAH J. ANDERSON

Retired Partner, Ernst & Young LLP

  GRAPHIC   GRAPHIC     GRAPHIC   American States Water Company
GRAPHIC   LISA L. BALDWIN

Chief Information Officer, Tiffany & Co.

  GRAPHIC   GRAPHIC   GRAPHIC    
GRAPHIC   KAREN W. COLONIAS

President and Chief Executive Officer, Simpson Manufacturing Co., Inc.

  GRAPHIC   GRAPHIC   GRAPHIC     Simpson Manufacturing Co.,
Inc.
GRAPHIC   JOHN G. FIGUEROA

Chairman and Chief Executive Officer, Carepathrx

  GRAPHIC     GRAPHIC   GRAPHIC   Apria, Inc.
GRAPHIC   JAMES D. HOFFMAN

Chief Executive Officer, Reliance Steel & Aluminum Co.

                   
GRAPHIC   MARK V. KAMINSKI*

Executive Chairman, Graniterock

  GRAPHIC   GRAPHIC      
GRAPHIC   KARLA R. LEWIS

President, Reliance Steel & Aluminum Co.

          Nominee to The Goodyear Tire & Rubber Company Board of Directors
GRAPHIC   ROBERT A. MCEVOY

Retired Managing Director, Goldman Sachs

  GRAPHIC     GRAPHIC   GRAPHIC  
GRAPHIC   ANDREW G. SHARKEY, III

Former President and Chief Executive Officer, American Iron and Steel Institute

  GRAPHIC     GRAPHIC   GRAPHIC  
GRAPHIC   DOUGLAS W. STOTLAR

Former President and Chief Executive Officer, Con-Way, Inc.

  GRAPHIC   GRAPHIC     GRAPHIC   LSC Communications, Inc. and AECOM

GRAPHIC   Member     GRAPHIC   Chair      *    Non-executive Chairman of the Board of Directors

12    2020 PROXY STATEMENT


Table of Contents

PROXY SUMMARY

VOTING MATTERS AND RECOMMENDATIONS

Proposal


Board
Recommendation



Page

 

ELECTION OF DIRECTORS:

 

 

 

 

1

 


The Board and the Nominating and Governance Committee believe that the combination of the various qualifications, skills and experiences of the director nominees will contribute to an effective and well-functioning Board and that, individually and as a whole, the director nominees possess the necessary qualifications and diversity to provide effective oversight of and quality advice and counsel to the Company's management.

 

FOR
the election of all named nominees

 

18

             

 

ADVISORY VOTE ON THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS:


 

 

 

2

 


We manage our business with the long-term objective of creating and maximizing value for our stockholders. Our pay-for-performance philosophy is aligned with and supports this objective. We are asking our stockholders to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement.



 

FOR

 

19

             

  RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM:        

3

 


The Audit Committee selected KPMG LLP to serve as the Company's independent registered public accounting firm for 2021. KPMG LLP has served in this role since 2008. Stockholders will be asked to ratify and approve this selection at the Annual Meeting.

 

FOR

 

20

RELIANCE STEEL & ALUMINUM CO.    13


Table of Contents

VIRTUAL STOCKHOLDER MEETING

As with last year's annual meeting, this year's meeting will be a completely "virtual" meeting of stockholders. If you were a stockholder as of the close of business on the Record Date of March 26, 2021, you can attend the Annual Meeting online, vote your shares electronically, and submit your questions and view our list of stockholders as of the Record Date during the Annual Meeting, by visiting www.virtualshareholdermeeting.com/RS2021.

You will need to have your 16-digit control number included on your Notice Regarding the Availability of Proxy Materials (the "Notice of Internet Availability"), your proxy card (if you received a printed copy of the proxy materials) or, for beneficial holders, the voter instruction form provided by your broker to join the Annual Meeting. If you are a beneficial holder but do not have a control number, you may gain access to the meeting by contacting your broker or by following the instructions included with your proxy materials. The meeting webcast will begin promptly at 10:00 a.m. Pacific Daylight Time. Online check-in will begin approximately 15 minutes before then and we encourage you to allow ample time for check-in procedures. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.

We will also make the Annual Meeting accessible to anyone who is interested, including employees and other constituents, by visiting the same link at www.virtualshareholdermeeting.com/RS2021. Non-stockholder guests will not be permitted to vote or submit questions at the Annual Meeting.

Submitting questions at the Annual Meeting

You can submit questions electronically at the Annual Meeting during the webcast. During the live Q&A session of the meeting, members of our senior leadership will answer questions as they come in, as time permits. We have designed our virtual meeting such that stockholders have equivalent rights to participate and ask and hear management's responses to appropriate questions as they had at our prior in-person meetings. As was the case at our prior in-person meetings, to ensure the meeting is conducted in a manner that is fair to all stockholders, the Chairman (or such other person designated by our Board) may exercise broad discretion in recognizing stockholders who wish to participate, the order in which questions are asked and the amount of time devoted to any one question. We also reserve the right to edit or reject questions we deem personal, profane or otherwise inappropriate. Detailed guidelines for submitting written questions during the meeting are available at www.virtualshareholdermeeting.com/RS2021. An audio recording of the Annual Meeting will be available on the Investors section of our website after the meeting.

If you have technical difficulties or trouble accessing the virtual meeting

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page.

14    2020 PROXY STATEMENT


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VOTING INFORMATION

We are furnishing this proxy statement to the holders of our common stock in connection with the solicitation of proxies on behalf of our Board of Directors for use at the Annual Meeting.

The Board of Directors selected Arthur Ajemyan, our Vice President, Chief Financial Officer, and William A. Smith II, our Senior Vice President, General Counsel and Corporate Secretary, or their designees, to be named as proxyholders to vote the shares of common stock represented by the proxies at the Annual Meeting. Reliance will pay the cost to solicit the proxies. The Board of Directors will solicit proxies by mail, by telephone, and electronically via the Internet. In addition, certain of our officers and agents may solicit proxies by telephone, email and personal interview (the cost of which will be nominal). We expect that banks, brokerage houses and other custodians, nominees and fiduciaries will forward soliciting material to beneficial owners and obtain authorizations to execute proxies. We will reimburse the reasonable out-of-pocket expenses they incur to forward our proxy materials. We have retained D.F. King & Co., Inc. ("D.F. King") to assist in the distribution and solicitation of proxies. Based on our agreement with D.F. King, we anticipate paying fees of approximately $10,000, plus-out-of-pocket expenses, for these services. Your bank, broker or financial institution is not able to vote on your behalf for the election of directors or on any compensation or incentive award plan matter unless you provide specific instructions by completing and returning a proxy or voting instruction form or by following instructions provided to you by your bank, broker or financial institution to vote your shares which often include instructions on how to vote your shares via telephone or the Internet. Voting your shares is important to ensure that you have a say in the governance of our Company.

We intend only the three matters described in this proxy statement to be presented at the Annual Meeting. However, we may also transact any other business that properly comes before the meeting or any adjournments thereof.

Unless you instruct us otherwise on the proxy, each proxy will be voted FOR the election of all of the nominees named herein as directors, FOR the approval of the compensation of the Company's named executive officers, and FOR the ratification of KPMG LLP as our independent registered public accounting firm for 2021.

We intend to make this proxy statement and accompanying material available to each stockholder on the Internet beginning on or about April 8, 2021. An annual report, including a letter to the stockholders from the Chief Executive Officer and the President, and an Annual Report on Form 10-K, also will be available electronically. Some stockholders will receive these materials by mail and other stockholders may request copies of these materials at no cost. The annual report and stockholder letter are not incorporated in, and are not a part of, this proxy statement and do not constitute proxy-soliciting material.

If you are a stockholder of record and execute a proxy or submit a proxy via the Internet or telephone, the proxy may be revoked at any time before it is voted:

    ·
    by filing with our Corporate Secretary either an instrument revoking the proxy or a proxy bearing a later date, duly executed in either case; or
    ·
    by voting electronically at the virtual meeting.

Any written instrument or later dated proxy should be sent or delivered to the Corporate Secretary at the address shown on the first page above and must be received prior to the Annual Meeting.

In addition, prior to the deadline for Internet or telephone voting, you may change your vote using the Internet or telephone method, in which case only your latest Internet or telephone proxy submitted before the deadline will be counted.

RELIANCE STEEL & ALUMINUM CO.    15


Table of Contents

VOTING INFORMATION

If you hold your shares through a broker, bank, financial institution, or other nominee, then you are a beneficial holder, and you may change your vote by complying with the procedures contained in the voting instructions provided to you by your broker, bank, financial institution or other nominee.

Even if you currently plan to participate in the Annual Meeting, the Company recommends that you also submit your proxy as described above so your vote will be counted if you later decide not to participate at the Annual Meeting. If you submit your vote by proxy and later decide to vote electronically at the Annual Meeting, the vote you submit at the Annual Meeting will override your proxy vote.

The presence in person electronically or by proxy of the holders of a majority of the shares entitled to vote at the meeting shall constitute a quorum for the transaction of business. Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. A broker non-vote occurs when a nominee holding shares for a beneficial owner (i.e., in "street name") does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. We believe that nominees only have discretionary voting power with respect to the ballot item on the ratification of our independent registered public accounting firm.

16    2020 PROXY STATEMENT


Table of Contents

INFORMATION CONCERNING OUR COMMON STOCK

Our only voting securities are shares of common stock, par value $0.001 per share. As of the record date of March 26, 2021, we had a total of 63,707,455 shares of common stock issued and outstanding, all of which may be voted at the Annual Meeting. Only holders of shares of record on our books at the close of business on the record date will be entitled to vote at the Annual Meeting.

Each nominee for election as a director at the Annual Meeting will only be elected if the votes cast "FOR" such nominee exceed the number of votes cast "AGAINST" such nominee, with abstentions and broker non-votes not counted as either votes "FOR" or "AGAINST" that nominee's election. As required by the Company's Bylaws, in the event that an incumbent director fails to receive a majority of votes cast in an uncontested election, such incumbent director is required to submit his or her resignation to the Board of Directors within ten calendar days of the date of the certification of the election results. Pursuant to the procedures set forth in the Bylaws, the Nominating and Corporate Governance Committee will make a recommendation to the Board of Directors within ten calendar days as to whether to accept or reject the resignation, or whether other action should be taken. The Board of Directors will then act on the resignation, taking into account the Nominating and Corporate Governance Committee's recommendation, and the Company will publicly disclose such decision by the Board of Directors with respect to the director nominee. Each of the Nominating and Corporate Governance Committee, in making its recommendation, and the Board of Directors, in making its decision, may consider any factors and other information that they consider appropriate and relevant. A director who tenders his or her resignation is not permitted to participate in the recommendation of the Nominating and Corporate Governance Committee or the decision of the Board of Directors with respect to his or her resignation.

The affirmative vote of a majority of votes present in person electronically or by proxy and entitled to vote on the matter is required to (i) approve, on a non-binding advisory basis, the compensation of the named executive officers; and (ii) ratify the engagement of KPMG LLP as our independent registered public accounting firm for 2021. Accordingly, abstentions will count as votes "AGAINST" such proposals.

Broker non-votes will have no effect on Proposal Numbers 1 and 2. Because the ratification of the appointment of KPMG LLP (Proposal No. 3) is considered a "routine" proposal, a broker holding shares as the nominee for a beneficial owner may vote for the proposal without voting instructions and, accordingly, we do not expect there to be any broker non-votes on Proposal No. 3.

RELIANCE STEEL & ALUMINUM CO.    17


Table of Contents

PROPOSAL NO. 1 - ELECTION OF DIRECTORS

 
   
   
   
    GRAPHIC   THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH NOMINEE AS A DIRECTOR.
   

The Board proposes that ten directors, eight of whom are independent, be elected to hold office until the 2022 Annual Meeting of Stockholders and until their successors have been elected and qualified, subject to their earlier death, resignation or removal. Mr. Hoffman and Mrs. Lewis are not considered independent directors because Mr. Hoffman is our Chief Executive Officer and Mrs. Lewis is our President.

The Board possesses a broad range of qualifications and skills that facilitate strong oversight of the Company's management and strategy. The following matrix identifies the primary skills that the Corporate Governance and Nominating Committee and the Board considered in connection with the re-nomination of the current directors.* For additional information regarding each nominee, see "Board of Directors and Management" beginning on page 22.

          Sarah J.
Anderson

 
  Lisa L.
Baldwin

 
  Karen W.
Colonias

 
  John G.
Figueroa

 
  James D.
Hoffman

 
  Karla R.
Lewis

 
  Mark V.
Kaminski

 
  Robert A.
McEvoy

 
  Andrew G.
Sharkey, III

 
  Douglas W.
Stotlar

 
                                       

 

 

Senior leadership experience

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

 

Accounting/financial experience

 


 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 


 


 

GRAPHIC




 

GRAPHIC




 


 


 


 


 

GRAPHIC




 

 

Other public company board experience

 

 

 

GRAPHIC

 

 

 

 

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

 

 

 

 

 

 

 

 

GRAPHIC

 

 

 

 

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

 

Operational management

 


 


 


 


 


 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 


 


 


 


 

GRAPHIC




 

 

Capital markets/banking

 

 

 

 

 

 

 

 

 

 

 

GRAPHIC

 

 

 

 

 

 

 

 

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

GRAPHIC

 

 

 

 

 

 

 

GRAPHIC

 

 

 

 

Mergers and Acquisitions

 


 


 


 


 


 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 


 


 

GRAPHIC




 

 

Information Technology/Cybersecurity

 

 

 

 

 

 

 

GRAPHIC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industry Experience

 


 


 


 


 


 


 


 


 


 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 

GRAPHIC




 


 


 

 

Military Veteran

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GRAPHIC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
*
The absence of a mark does not necessarily indicate that the director does not possess that qualification or skill.

A majority of the votes cast is required for the election of directors at the 2021 Annual Meeting. Neither Reliance nor your bank, broker or financial institution is able to vote on your behalf for the election of directors unless you provide specific instructions by completing and returning a proxy or voting instruction form or you follow instructions provided to you by your bank, broker or financial institution, which often include instructions on how to vote your shares via telephone or the Internet.

Our Board of Directors currently has eleven members. David H. Hannah will retire from the Board of Directors effective at the 2021 Annual Meeting, at which time the size of the Board will be reduced to ten members. We expect each nominee for election as a director will serve if elected. If any nominee is not able to serve, proxies may be voted by the proxyholders for substitute nominees, unless the Board of Directors chooses to reduce the number of directors serving on the Board of Directors.

Certain information with respect to each nominee is set forth in "Board of Directors and Management" below. See page 22.

18    2020 PROXY STATEMENT


Table of Contents

PROPOSAL NO. 2 - ADVISORY VOTE ON THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

 
   
   
   
    GRAPHIC   THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS.
   

We are asking our stockholders to approve, on an advisory, non-binding basis, the compensation of our named executive officers as disclosed in this proxy statement. It is Reliance's current policy to provide our stockholders with an opportunity to approve the compensation of our named executive officers each year at the Annual Meeting. Accordingly, we anticipate that the next such vote will occur at the 2022 Annual Meeting of Stockholders.

In voting on this proposal, the Board of Directors encourages you to consider the detailed discussion of compensation matters in the Compensation Discussion and Analysis section, or CD&A, beginning on page 35.

The Board of Directors recommends that stockholders vote FOR the following resolution:

    "RESOLVED, that the stockholders of Reliance Steel & Aluminum Co. approve, on an advisory basis, the compensation paid to Reliance Steel & Aluminum Co.'s named executive officers, as disclosed in the 2021 Proxy Statement pursuant to the Securities and Exchange Commission's compensation disclosure rules, including the CD&A, the Summary Compensation Table and other compensation tables and the accompanying footnotes and narratives and any related material."

Because your vote is advisory, it will not be binding upon the Board. However, the Board values our stockholders' opinions and the Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. The affirmative vote of a majority of votes present in person electronically or by proxy and entitled to vote is required to approve this proposal.

Neither Reliance nor your bank, broker or financial institution is able to vote on your behalf to support the Company's executive compensation unless you provide specific instructions by completing and returning a proxy or voting instruction form or you follow instructions provided to you by your bank, broker or financial institution, which often include instructions on how to vote your shares via telephone or the Internet.

RELIANCE STEEL & ALUMINUM CO.    19


Table of Contents

PROPOSAL NO. 3 - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 
   
   
   
    GRAPHIC   THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021.
   

KPMG LLP, our independent registered public accounting firm, billed us the fees set forth in the table below for services provided in the last two years.

    Audit Fees              
  2020     $ 3,730,000    
    2019       $ 3,680,000    
  Audit-Related Fees          
    2020       $ 144,000    
  2019     $ 147,000    
    Tax Fees              
  2020     $ 17,000    
    2019       $ 11,000    
  All Other Fees          
    2020       $    
  2019     $    

Audit fees relate to services rendered in connection with the audit of our annual financial statements and internal control over financial reporting, quarterly review of financial statements, audit services provided in connection with statutory and regulatory filings, including consents and comfort letters, and discussions surrounding the proper application of financial accounting and/or reporting standards.

Audit-related fees are those fees for services provided by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and not included as audit fees. Tax fees are fees and expenses for professional services rendered by KPMG LLP in connection with U.S. and foreign tax compliance and planning, and consultation and advice on tax examinations.

The Audit Committee approved all of these services in advance. The Audit Committee has adopted a Pre-approval Policy that requires that the Audit Committee approve in advance the services to be provided, the terms of the engagement letter, and all associated fees set forth in such letter for the independent registered public accounting firm. In addition, the Audit Committee will review proposed audit, audit-related, tax and other services that management desires the independent registered public accounting firm to perform to ensure that such services and the proposed fees related to the services will not impair the independent registered public accounting firm's independence and that such services and fees are consistent with the rules established by the Securities and Exchange Commission ("SEC"). Each quarter, the Chief Financial Officer of the Company reports to the Audit Committee which services, if any, were performed and the amount of any fees that were incurred. The Audit Committee has delegated to the Chief Financial Officer the authority to add to, amend or modify the list of services to be provided or the amount of fees to be paid; provided that the Chief Financial Officer will report any action taken to the Audit Committee at its next scheduled meeting and provided further that the fees involved are reasonably expected to be less than $100,000.

20    2020 PROXY STATEMENT


Table of Contents

PROPOSAL NO. 3 - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee selected KPMG LLP as the Company's independent registered public accounting firm for 2021. KPMG LLP has served as the Company's independent registered public accounting firm since 2008. The Board of Directors ratified this selection.

The Board of Directors believes there are significant benefits to having an independent registered public accounting firm with extensive history with the Company. These benefits include:

    the high quality of their audit work and accounting advice, as a result of their institutional knowledge of our businesses, global operations, key risks, accounting policies, financial systems and internal control framework;

    audit efficiency and effectiveness, resulting in a lower fee structure due to history and familiarity with our businesses; and

    time and expense avoided by management and staff in onboarding a new independent registered public accounting firm.

At the Annual Meeting, stockholders will be asked to ratify and approve this selection. We are not required to have the stockholders ratify the selection of KPMG LLP as our independent registered public accounting firm. Nevertheless we are presenting the selection of KPMG to our stockholders because we believe it is a good corporate practice. If the stockholders do not ratify the selection, the Audit Committee will reconsider whether or not to retain KPMG LLP, but may still retain the firm. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

A representative of KPMG LLP is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions. The affirmative vote of a majority of shares present in person electronically or by proxy and entitled to vote is required to ratify the selection of KPMG LLP as our independent registered public accounting firm for 2021. Because the ratification of the appointment of KPMG LLP is considered a "routine" proposal, a bank, broker or financial institution holding shares as the nominee for a beneficial owner may vote for the proposal without voting instructions and, accordingly, we do not expect there to be any broker non-votes on this proposal.

RELIANCE STEEL & ALUMINUM CO.    21


Table of Contents

BOARD OF DIRECTORS AND MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding our directors and executive officers:

Name
Age
Position with Reliance
James D. Hoffman   62   Chief Executive Officer; Director
Karla R. Lewis   55   President; Director
William K. Sales, Jr.   64   Executive Vice President, Operations
Jeffrey W. Durham   58   Senior Vice President, Operations
Stephen P. Koch   54   Senior Vice President, Operations
Michael P. Shanley   63   Senior Vice President, Operations
William A. Smith II   53   Senior Vice President, General Counsel and Corporate Secretary
Arthur Ajemyan   45   Vice President, Chief Financial Officer
Sarah J. Anderson(1)(3)   70   Director
Lisa L. Baldwin(1)(2)   52   Director
Karen W. Colonias(1)(2)   63   Director
John G. Figueroa(2)(3)   58   Director
David H. Hannah(5)   69   Director
Mark V. Kaminski(1)(4)   65   Director
Robert A. McEvoy(2)(3)   54   Director
Andrew G. Sharkey, III(2)(3)   74   Director
Douglas W. Stotlar(1)(3)   60   Director

(1)
Member of the Audit Committee.

(2)
Member of the Compensation Committee.

(3)
Member of the Nominating and Governance Committee.

(4)
Non-executive Chairman of the Board.

(5)
Mr. Hannah is retiring from the Board and not standing for re-election at the 2021 Annual Meeting. Accordingly, his biography is not presented below.

22    2020 PROXY STATEMENT


Table of Contents

BOARD OF DIRECTORS AND MANAGEMENT

DIRECTORS

Sarah J. Anderson

 

GRAPHIC
Director Since: 2012

Age: 70

Independent

Current Committee Memberships:

·    Audit (Chair)

·    Nominating and Governance


Recent Business Experience:

Sarah J. Anderson was appointed a director of Reliance in July 2012. Ms. Anderson retired from Ernst & Young LLP in June 2008 after more than 24 years with the firm, including as an assurance and advisory services partner from 1987 to 2008. Ms. Anderson is a certified public accountant (inactive) and is a member of the AICPA and the California Society of CPAs. Ms. Anderson was appointed by the Governor of California to the California Board of Accountancy for two four-year terms, which ended in 2015, and included tenure as president of the board. Ms. Anderson serves on the board of American States Water Company, a NYSE-listed public company, which has three principal business units: water and electric service, utility operations and contracted services, for which Ms. Anderson serves as the chair of the audit committee. Ms. Anderson also served on the board and as audit committee chair of Kaiser Ventures LLC (the reorganized successor to Kaiser Steel Corporation that filed for bankruptcy protection in 1987) until May 2013 when the company's assets were transferred to a liquidating trust. Ms. Anderson serves on the audit committee of the Orange County Community Foundation and as an emeritus director of Pacific Symphony, a non-profit 501(c)(3) organization for which she served four years as chair of the board. Ms. Anderson also serves on the Board of Trustees of South Coast Repertory, a non-profit 501(c)(3) organization, where she serves as the Vice President of Development. Ms. Anderson serves as Chair of our Audit Committee and as a member of our Nominating and Governance Committee. The Board of Directors has determined that Ms. Anderson is an independent director and that she qualifies as an audit committee financial expert.

 
 

 

Key Qualifications:

Ms. Anderson brings extensive financial and accounting expertise and audit committee experience to our Board of Directors and Audit Committee. Ms. Anderson offers financial experience that enables her to understand and analyze accounting matters and to communicate well with both our internal and external auditors. She keeps abreast of current accounting and financial topics and is able to ask appropriate questions of management and auditors alike. Ms. Anderson understands tax, audit procedures, financial reporting requirements and risk identification and assessment issues and has knowledge of practices at other public companies in other industries through her work as an auditor and board member of another public company.

 

RELIANCE STEEL & ALUMINUM CO.    23


Table of Contents

BOARD OF DIRECTORS AND MANAGEMENT

Lisa L. Baldwin

 

GRAPHIC
Director Since: 2019

Age:52

Independent

Current Committee Memberships:

·    Audit

·    Compensation


Recent Business Experience:

Lisa L. Baldwin was appointed a director of Reliance in October 2019. Ms. Baldwin has been the Chief Information Officer of Tiffany & Co. ("Tiffany"), a luxury jeweler, since 2013. From 2011 to 2013, Ms. Baldwin served as Tiffany's Vice President Strategic Services. Prior to joining Tiffany, Ms. Baldwin served as Vice President Information Services at Coach Inc. ("Coach") from 2008 to 2011. Prior to joining Coach, Ms. Baldwin worked at International Business Machines Corporation ("IBM") from 1997 to 2008 as an information technology consultant in IBM's retail practice. Earlier in her career, Ms. Baldwin worked at PricewaterhouseCoopers as a consultant. Ms. Baldwin serves as a member of our Audit Committee and Compensation Committee. The Board of Directors has determined that Ms. Baldwin is an independent director.

 
 

 

Key Qualifications:

The Board believes that Ms. Baldwin's leadership experience at Tiffany and other firms provides valuable insights on mitigating cyber security risk, incorporating technology into our ongoing operations and utilizing technology-based solutions to streamline our business. Based on her information technology and management experience, she provides valuable insight on risk management, cyber security and internal controls.

 

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BOARD OF DIRECTORS AND MANAGEMENT

Karen W. Colonias

 

GRAPHIC
Director Since: 2016

Age: 63

Independent

Current Committee Memberships:

·    Audit

·    Compensation


Recent Business Experience:

Karen W. Colonias was appointed a director of Reliance in October 2016. Ms. Colonias has been the President and Chief Executive Officer of Simpson Manufacturing Co., Inc. ("SSD"), a NYSE-listed public company and manufacturer of building materials, since January 2012. Ms. Colonias has also served on SSD's board of directors since 2013. From May 2009 to January 2012, Ms. Colonias served as SSD's Chief Financial Officer, Treasurer and Secretary. Prior to that, Ms. Colonias was Vice President of SSD's global structural product solutions subsidiary, Simpson Strong-Tie Company Inc. and, in that capacity, managed Simpson Strong-Tie's manufacturing facility in Stockton, California from 2004 to 2009. From 1998 to 2009, as SSD's Vice President of Engineering, Ms. Colonias was responsible for Simpson Strong-Tie's research and development efforts. Ms. Colonias joined Simpson Strong-Tie in 1984 as an engineer in the research and development department, where she was responsible for the design and testing of new products and code development. Ms. Colonias serves as a member of our Audit Committee and our Compensation Committee. The Board of Directors has determined that Ms. Colonias is an independent director.

 
 

 

Key Qualifications:

Ms. Colonias is experienced in strategic planning, mergers and acquisitions, facility and plant operations, international business and global finance. Based on her executive experience, including as the Chief Executive Officer of SSD, Ms. Colonias provides valuable insight on the management of the Company and its operations.

 

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BOARD OF DIRECTORS AND MANAGEMENT

John G. Figueroa

 

GRAPHIC
Director Since: 2010

Age: 58

Independent

Current Committee Memberships:

·    Compensation (Chair)

·    Nominating and Governance


Recent Business Experience:

John G. Figueroa was appointed a director of Reliance in October 2010. Mr. Figueroa is the Chairman and Chief Executive Officer of Carepathrx, a company providing innovative pharmacy solutions to Hospital Health Systems centered on end-to-end service for all pharmacy needs including specialty, infusion, and continuous home solutions for all prescriptions. From July 2014 to September 2018, Mr. Figueroa was the Chief Executive Officer of Genoa Healthcare, LLC the leading behavioral health specialty pharmacy in the United States. Mr. Figueroa has served as Chairman of the board of directors of Apria, Inc. ("Apria"), a NASDAQ listed company and one of the nation's leading providers of integrated home medical equipment, since November 2012 and also served as the company's Chief Executive Officer from November 2012 until January 2014. Mr. Figueroa also serves on Apria's compensation committee. From January 2011 until June 2012, Mr. Figueroa served as a director and the Chief Executive Officer of Omnicare, Inc., which was a public company during that time and a leading provider of pharmaceuticals to seniors. From 2006 to December 2010, Mr. Figueroa served as President of the U.S. Pharmaceutical Group of McKesson Corporation, the largest pharmaceuticals distributor in North America. Mr. Figueroa served in other senior management positions with McKesson Corporation from 1997 to 2006. Mr. Figueroa has served as an officer in the United States Army. Mr. Figueroa serves as Chair of our Compensation Committee and as a member of our Nominating and Governance Committee. The Board of Directors has determined that Mr. Figueroa is an independent director.

 
 

 

Key Qualifications:

Mr. Figueroa has developed an expertise in distribution and supply chain management and operations. In August 2010, when he was president of the U.S. Pharmaceutical Group of McKesson, Mr. Figueroa was named the Supply Chain Executive of the Decade by the Global Supply Chain Leaders Group for making significant contributions to the advancement of supply chain management and maintaining sustainable, responsible business practices in global operations. Mr. Figueroa's expertise allows him to assist management in increasing efficiency in and marketing for our distribution operations. Mr. Figueroa's experience in the healthcare industry and mergers and acquisitions provides a different perspective and increased diversity on the Board of Directors.

 

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BOARD OF DIRECTORS AND MANAGEMENT

James D. Hoffman

 

GRAPHIC
Director Since: 2019

Age: 62

Current Committee Memberships:

None


Recent Business Experience:

James D. Hoffman was appointed a director of Reliance in October 2019 and became Chief Executive Officer in January 2019. Mr. Hoffman also served as our President from January 2019 until January 2021, when Mrs. Lewis was appointed President. From March 2016 until his promotion to Chief Executive Officer in January 2019, Mr. Hoffman served as our Executive Vice President and Chief Operating Officer. Mr. Hoffman served as the Company's Executive Vice President, Operations since May 2015, and as Senior Vice President, Operations since 2008. Mr. Hoffman served as Executive Vice President and Chief Operating Officer of our subsidiary, Earle M. Jorgensen Company ("EMJ"), from April 2006 to September 2008. Mr. Hoffman was appointed executive vice president of EMJ in 2006, having been a vice president of EMJ since 1996. Mr. Hoffman is a member of the board of directors of the Metals Service Center Institute ("MSCI").

 
 

 

Key Qualifications:

Mr. Hoffman has spent his entire career in the metals service center industry and has been exposed to every operational area of the business. As our Chief Executive Officer, he offers in-depth industry expertise and has developed extensive contacts in the metals service center industry and with mills and other suppliers. As our Chief Executive Officer, Mr. Hoffman analyzes the Company's organic growth initiatives and evaluates potential acquisitions and opportunities to expand our business and has the skills and experience with the day-to-day operations of the Company necessary to guide its strategy. Mr. Hoffman is actively involved in the integration of new acquisitions into the Company's culture.

 

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BOARD OF DIRECTORS AND MANAGEMENT

Mark V. Kaminski

 

GRAPHIC
Director Since: 2004

Age: 65

Independent

Current Committee Memberships:

·    Audit


Recent Business Experience:

Mark V. Kaminski was first appointed a director of Reliance in November 2004. Mr. Kaminski was elected our non-executive Chairman of the Board in July 2016, after having served as our Lead Director since January 2015. Mr. Kaminski serves as a director, executive chairman and a member of the audit, nominating and governance, and compensation committees of Graniterock, a privately-held company that provides products and services to the construction industry, and during 2012 served as Chief Executive Officer of Graniterock. Mr. Kaminski was President and Chief Executive Officer and a director of Commonwealth Industries Inc. a then publicly-traded company (now Novelis, Inc.), and manufacturer of aluminum products, from 1991 until his retirement in June 2004. Mr. Kaminski had served in other capacities with Commonwealth Industries Inc. since 1987. Mr. Kaminski also served as a member of our Compensation Committee and our Nominating and Governance Committee until 2019 and serves as a member of our Audit Committee. Mr. Kaminski is a native American, descendant and citizen of the Citizen Potawatomi Nation. The Board of Directors has determined that Mr. Kaminski is an independent director.

 
 

 

Key Qualifications:

Based on his experience as executive chairman of Graniterock and as president and chief executive officer of Commonwealth Industries Inc., where he grew sales from $240 million to $2.5 billion, Mr. Kaminski offers valuable insight in the management of the Company and its growth. During his over 40-year career in the metals and mining industry and as the former chief executive officer of an aluminum producer, he has developed strong contacts with aluminum suppliers and peer companies that are aluminum distributors. Because of his manufacturing background, Mr. Kaminski is also able to provide guidance on improving and maintaining the Company's excellent operational efficiency and safety performance.

 

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BOARD OF DIRECTORS AND MANAGEMENT

Karla R. Lewis

 

GRAPHIC
Director Since: 2021

Age: 55

Independent

Current Committee Memberships:

None


Recent Business Experience:

Karla R. Lewis was appointed a director and President of Reliance in January 2021. From March 2015 until her promotion to President, Mrs. Lewis served as our Senior Executive Vice President and Chief Financial Officer. Mrs. Lewis joined Reliance in 1992 as Corporate Controller and has held various positions of increasing responsibility since then, including serving as Chief Financial Officer from 1999 until January 2021. She was promoted to Senior Vice President in 2000, Executive Vice President in 2002 and Senior Executive Vice President in 2015. Prior to joining Reliance, Mrs. Lewis, a certified public accountant (inactive) was employed by Ernst & Young LLP (Ernst & Whinney) in various professional staff positions. Mrs. Lewis is currently a nominee for The Goodyear Tire & Rubber Company board of directors.

 
 

 

Key Qualifications:

As the President and former Chief Financial Officer of the Company, Mrs. Lewis has an in-depth knowledge of the Company's operations, financial position and its strategic vision. Mrs. Lewis has been a long-time member of the board of directors of the MSCI and is well respected within the metals service center industry. She has proven her ability to raise debt and equity capital for the Company. Mrs. Lewis is active in overseeing the Company's acquisition strategy and has been involved with 67 acquisitions since our initial public offering in September 1994.

 

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BOARD OF DIRECTORS AND MANAGEMENT

Robert A. McEvoy

 

GRAPHIC
Director Since: 2015

Age: 54

Independent

Current Committee Memberships:

·    Compensation

·    Nominating and Governance


Recent Business Experience:

Robert A. McEvoy was appointed to the Board of Directors in October 2015. Mr. McEvoy has a wealth of knowledge of the metals industry, mergers and acquisitions, corporate finance, and equity portfolio management. Mr. McEvoy retired from The Goldman Sachs Group, Inc., a multinational investment bank and financial services company, in April 2014 after nine years with the firm. As a managing director at Goldman Sachs, Mr. McEvoy was a portfolio manager focused on the materials and industrials sectors. From 1989 to 2001, Mr. McEvoy held various positions with the investment banking firms of Donaldson, Lufkin & Jenrette and Credit Suisse First Boston. Mr. McEvoy serves as a member of our Compensation Committee and Nominating and Governance Committee. The Board of Directors has determined that Mr. McEvoy is an independent director.

 
 

 

Key Qualifications:

Mr. McEvoy's investment banking and equity investment background, including his particular focus on the metals and mining industry and prior investment banking and analyst experience covering Reliance, enables him to assist the Board and the Company with the benefit of his knowledge of our Company, our industry and competitors, capital markets and financing strategies. Mr. McEvoy's experience as an investor provides the Board and management perspective on the landscape in which Reliance competes for capital. Mr. McEvoy's investment banking experience offers insight and experience in evaluating capital market activities and merger and acquisition opportunities. Mr. McEvoy's historical knowledge of Reliance and the global metals industry as a former analyst covering Reliance and other metals companies affords him a unique perspective and understanding of our business.

 

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BOARD OF DIRECTORS AND MANAGEMENT

Andrew G. Sharkey, III

 

GRAPHIC
Director Since: 2007

Age: 74

Independent

Current Committee Memberships:

·    Compensation

·    Nominating and Governance


Recent Business Experience:

Andrew G. Sharkey, III was appointed a director of Reliance in July 2007. Mr. Sharkey served as President and Chief Executive Officer of the American Iron and Steel Institute from 1993 until his retirement in October 2008. From 1978 to 1993, Mr. Sharkey was President, Executive Vice President and director of education for the Steel Service Center Institute (currently the Metals Service Center Institute), which represents the metals service center industry as well as steel suppliers and mills. Mr. Sharkey serves as a member of our Nominating and Governance Committee and our Compensation Committee. From February 2009 through December 2013, Mr. Sharkey also served as a director and a member of the compensation committee and the governance and nominating committee of General Moly, Inc., a publicly traded company with securities listed on the NYSE American. The Board of Directors has determined that Mr. Sharkey is an independent director.

 
 

 

Key Qualifications:

Mr. Sharkey has a strong knowledge of the metals industry and, as the former president of the Steel Service Center Institute, and as the former president and chief executive officer of the American Iron and Steel Institute has extensive knowledge of steel suppliers and our peer companies and potential acquisition targets that operate in the steel distribution industry, as well as familiarity with the management teams and owners of these companies. Mr. Sharkey understands the factors that impact pricing and demand, as well as market factors that impact mills and how they will ultimately impact metals service centers. Mr. Sharkey's experience offers a perspective of the global market and insight into steel trade issues.

 

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BOARD OF DIRECTORS AND MANAGEMENT

Douglas W. Stotlar

 

GRAPHIC
Director Since: 2016

Age: 60

Independent

Current Committee Memberships:

·    Audit

·    Nominating and Governance
     
(Chair)



Recent Business Experience:

Douglas W. Stotlar was appointed a director of Reliance in October 2016. Mr. Stotlar served as President, Chief Executive Officer and Director of Con-way, Inc., a transportation and logistics company (previously known as CNF Inc.) from April 2005 until October 2015. He served as President and Chief Executive Officer of Con-way Transportation Services Inc., a regional trucking enterprise ("CTS") and a subsidiary of Con-way, Inc., from 2004 until 2005. Mr. Stotlar also served as CTS' Executive Vice President and Chief Operating Officer from 2002 until 2004, and as CTS' Executive Vice President of Operations from 1997 until 2002. He served as Vice President at large and was a member of the executive committee of the American Trucking Association and as a director for the Detroit branch of the Federal Reserve Bank of Chicago from December 2014 until December 2016. Mr. Stotlar currently serves as a director at AECOM, a NYSE-listed public company, and LSC Communications, Inc. ("LSC"), also a NYSE-listed public company. Mr. Stotlar is the chair of the nominating and governance committee and serves on the audit committee of AECOM and on the audit and compensation committees of LSC. Mr. Stotlar serves as a member of our Audit Committee and as the Chair of our Nominating and Governance Committee. The Board of Directors has determined that Mr. Stotlar is an independent director.

 
 

 

Key Qualifications:

Mr. Stotlar brings substantial knowledge of the logistics industry, which is important in our business. We believe that Mr. Stotlar's prior experience as a chief executive officer of a public company provides insight on stockholder relations and management matters. In addition, Mr. Stotlar's experience on boards of other public companies positions him well to serve as a member of our Audit Committee and as Chair of our Nominating and Governance Committee.

 

EXECUTIVE OFFICERS

In addition to Mr. Hoffman and Mrs. Lewis, the other executive officers of Reliance are as follows:

Arthur Ajemyan became Vice President, Chief Financial Officer in January 2021, having been promoted from Vice President, Corporate Controller, a position which he had held since May 2014. From 2012 to 2014, Mr. Ajemyan served as the Company's Corporate Controller. From 2005 to 2012, Mr. Ajemyan held various positions in the accounting and finance department at Reliance, including Group Controller and Director of Financial Reporting. Prior to joining Reliance, Mr. Ajemyan, a certified public accountant, held various professional staff and manager positions at PricewaterhouseCoopers from 1998 to 2005.

William K. Sales, Jr. became Executive Vice President, Operations in May 2015. From 2002 until his promotion to his current position, Mr. Sales served as Senior Vice President, Operations. Mr. Sales joined Reliance as Vice President, Non-Ferrous Operations in September 1997. From 1981 to 1997, Mr. Sales served in various sales and management positions with Kaiser Aluminum & Chemical Corp. (now DCO Management, LLC, a subsidiary of Kaiser Aluminum Corporation), a producer of aluminum products and a supplier of Reliance. Mr. Sales is a member of the board of the Metals Service Center Institute and formerly served as the chair of its aluminum products division council.

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Jeffrey W. Durham became Senior Vice President, Operations in January 2019. From 2014 until January 2019, Mr. Durham was Vice President, Merchandising at EMJ. Mr. Durham joined EMJ in 1985 and has held various leadership roles in sales, general management and purchasing.

Stephen P. Koch became Senior Vice President, Operations in April 2010. From July 2007 until he joined Reliance, Mr. Koch was president of Chapel Steel Corp., a subsidiary of Reliance. Prior to that he held the positions of executive vice president of Chapel Steel Corp. from 2005 to June 2007, and vice president of Chapel Steel Corp. from 1995 to 2005 and had previously served as sales manager of Chapel Steel Corp.

Michael P. Shanley was appointed Senior Vice President, Operations in April 2015. Mr. Shanley was president of Liebovich Bros., Inc., a subsidiary of Reliance, since September 2009, having been vice president and general manager of Hagerty Steel and Aluminum, a division of Liebovich Bros., from January 2005 to September 2009. Mr. Shanley joined Liebovich Bros. in 1978 and held various sales and management positions prior to 2005.

William A. Smith II was appointed Senior Vice President, General Counsel and Corporate Secretary in May 2015, having served as Vice President, General Counsel and Corporate Secretary since May 2013. From August 2009 to May 2013, Mr. Smith served as senior vice president, chief legal officer and secretary of Metals USA Holdings Corp., a publicly traded metals service center business acquired by Reliance in April 2013. From June 2005 to August 2008, Mr. Smith served as senior vice president, general counsel and secretary of Cross Match Technologies, Inc. and also as director of corporate development from September 2006 to August 2008. Prior to that, he was a partner in the corporate and securities practice group of the international law firm DLA Piper, where he practiced corporate law, including mergers and acquisitions.

Suzanne M. Bonner became Vice President, Chief Information Officer in July 2019, having been promoted from Executive Director of Reliance Technology Solutions ("RTS"), a position which she had held since September 2013. Prior to that time, Ms. Bonner served as Director of Finance at RTS from September 2009 until September 2013. Ms. Bonner earned her B.A. and M.B.A. from UCLA and worked in various finance, accounting, and information systems positions before joining Reliance in 2009.

OTHER CORPORATE OFFICERS

In addition, the following Reliance officers make significant contributions to our operations:

Brenda S. Miyamoto became Vice President, Corporate Initiatives in August 2012, having been promoted from Vice President, Corporate Controller, a position which she had held since May 2007. Prior to that time, Ms. Miyamoto served as Corporate Controller from January 2004 until August 2012 and Group Controller from December 2001 to January 2004. For six years prior to joining Reliance, Ms. Miyamoto, a certified public accountant (inactive), was employed by Ernst & Young LLP in various professional staff and manager positions.

Donald J. Prebola became Vice President, Health & Human Resources in June 2015, having served as Vice President, Human Resources since August 2011. Mr. Prebola served as senior vice president, operations of our subsidiary, Infra-Metals Co., from 2008 to July 2011. Prior to that he had served as co-general manager of Infra-Metals Co. since 1990.

John A. Shatkus became Vice President, Enterprise Risk in January 2021, having previously served as Vice President, Internal Audit, a position which he had held since August 2012. Mr. Shatkus joined Reliance in 2005 and served as Director, Internal Audit until August 2012. Prior to joining Reliance, Mr. Shatkus was Audit Manager at Sempra Energy and held various management positions at Sempra Energy over a 20-year period, including Regulatory Affairs Manager and Accounting Manager. Mr. Shatkus is a certified public accountant.

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Silva Yeghyayan became Vice President, Tax in August 2012, having been promoted from Director, Tax, a position which she had held since October 2005. Ms. Yeghyayan is a certified public accountant and was a tax consultant from April 2004 until joining Reliance in 2005. Ms. Yeghyayan was Senior Tax Manager at Grant Thornton LLP from 2000 to 2004, and held various professional staff and manager positions at Arthur Andersen LLP from 1989 to 2000.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis ("CD&A") describes our executive compensation program and philosophy, the compensation decisions made by the Compensation Committee and the factors considered in making those decisions. This CD&A focuses on 2020 compensation decisions for our executives, including the Named Executive Officers ("NEOs") identified below.

Named Executive Officer
Title (during 2020)
James D. Hoffman   President and Chief Executive Officer
Karla R. Lewis(1)   Senior Executive Vice President and Chief Financial Officer
William K. Sales, Jr.   Executive Vice President, Operations
Stephen P. Koch   Senior Vice President, Operations
Michael P. Shanley   Senior Vice President, Operations
(1)
In accordance with the Company's succession plan, Mrs. Lewis was promoted to President and appointed to the Company's Board of Directors on January 15, 2021. During all of 2020, Mrs. Lewis served as Senior Executive Vice President and Chief Financial Officer. Concurrent with Mrs. Lewis' promotion, Arthur Ajemyan was promoted to Vice President, Chief Financial Officer.

EXECUTIVE SUMMARY

While the Company's financial results in 2020 decreased from record levels in 2019 largely due to challenging economic circumstances as a result of COVID-19, we believe that our results demonstrated the strength and resiliency of our business model. While sales declined 19.7% from 2019 as a result of the adverse impacts of COVID-19 on nearly all of the end markets we serve, we were able to mitigate the impact of lower sales by generating record gross profit margins and proactively reducing SG&A expenses.

In 2020, we set an annual gross profit margin record of 31.5% and reduced our same-store average selling, general and administrative expense by $241.0 million. We generated strong cash flow from operations of $1.17 billion, which supported our internal growth activities with $172.2 million of capital expenditures and stockholder return activities that included $337.3 million of share repurchases and $164.1 million of dividends.

We believe the compensation of our NEOs in 2020 was aligned with our performance. Payments to the NEOs under our 2020 Annual Cash Incentive Plan were above target, consistent with management's delivery of industry-leading operating results.

EXECUTIVE COMPENSATION PROGRAM DESIGN

Our executive compensation program is designed to reward the Company's executive officers for strong operational and financial performance, attract and retain key executive talent, and align compensation with the long-term interests of our stockholders. Our stockholders have been highly supportive of our program's pay-for-performance structure, as demonstrated by our say-on-pay voting results exceeding 97% in each of the last five years from 2016 through 2020.

As described in more detail below, we structure our executive officers' target total direct compensation to be competitive with the median compensation paid by companies with whom we may compete for executive talent, including those in our executive compensation peer group. We link a majority of our executives' compensation to Company performance to drive our financial and operating performance and maximize stockholder value. We believe that this pay-for-performance philosophy has been instrumental to our success.

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COMPENSATION DISCUSSION AND ANALYSIS

We manage our business with the long-term objective of creating and maximizing value for our stockholders. Our pay-for-performance philosophy is aligned with and supports this objective.

Consistent with our past practice, the Compensation Committee evaluates performance by reviewing:

    our operating and financial results, including performance against our executive compensation peer group, our industry peer group, and general economic factors that impact our business and industry;

    economic return to stockholders over time, both on an absolute basis and relative to other companies, including the S&P 500, our executive compensation peer group and our industry peers; and

    achievement of the Company's goals and objectives (including management development, safety performance, working capital management, and capital allocation).

The Compensation Committee has linked a majority of our executives' total direct compensation directly to the achievement of specific, pre-established Company performance targets. In 2020, approximately 74% of our CEO's target total direct compensation and 65% of our other NEOs' target total direct compensation was tied to performance targets.

COMPENSATION COMMITTEE RESPONSE TO COVID-19

Recognizing the potential impact of the COVID-19 pandemic on the Company's stakeholders, including our stockholders, customers, suppliers and employees, the Company and its leadership took prompt action from the onset of the pandemic to address the rapidly evolving extraordinary circumstances associated with the COVID-19 outbreak and the then-unpredictable impacts on our business. Among these important actions, upon the recommendation of the Company's CEO, our Compensation Committee froze base salaries at 2019 levels for all corporate officers, including our NEOs, in 2020.

Despite the unforeseen operational and financial impact of COVID-19, the Compensation Committee did not make any changes to the 2020 executive compensation program because the Compensation Committee believes strongly in the durability of the program's design and its effectiveness in aligning pay with individual and Company performance over the long term as described further below.

Our actions in response to the COVID-19 pandemic were rooted in one of the core and fundamental elements of our culture: the safety, health and welfare of our people, their families and the communities in which we live and do business. Our main priority remains the health, safety and well-being of our approximately 13,200 colleagues, their families and the communities in which they live, and we are continuing to take actions to protect and ensure their health, safety and well-being.

In response to the COVID-19 pandemic, we:

    Implemented new, supplemental safety protocols and procedures to promote health and safety and increase awareness including temperature monitoring, physical distancing and wearing of face coverings in the workplace, enhanced cleaning, sanitation and hygiene practices and detailed contact tracing procedures to identify and isolate potential exposures within the workplace.

    Developed and implemented policies and procedures based on new health and safety regulations and standards issued by federal, state and local government agencies as well as the Centers for Disease Control and Prevention and other public health authorities.

    Engaged an M.D. consultant to obtain professional medical advice about the virus and to inform our efforts to reduce risk of COVID-19 exposure to our employees, subcontractors and customers in and beyond the workplace.

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    Leveraged technology and embraced remote work where feasible, and modified the way we conduct many aspects of our business to reduce the number of in-person interactions within and without our facilities. We significantly expanded the use of virtual interactions in all aspects of our business, including customer facing activities, internal meetings and our annual meeting of stockholders.

    Invested in new technologies such as touchless thermal temperature screening devices and contact tracing wristbands to increase safe behavior and mitigate the spread of the virus in our operating facilities.

    Encouraged our employees to stay home if they did not feel well or might have been exposed to the COVID-19 virus. We adopted policies to address exclusion from the workplace due to COVID-19 illness or known or suspected exposure, and stringent return to work protocols. Implemented a special COVID-19 aid policy providing paid leave for employees impacted by the virus.

2020 FINANCIAL AND OPERATING HIGHLIGHTS

The following table highlights our financial and operating results in 2020 compared to 2019:

 
   
   
   
   
   
   

   
2020
 
2019
  Change

Sales

      $ 8.81 billion       $ 10.97 billion       (19.7)%        

Tons sold in '000s

    5,230.5     5,861.6     (10.8)%        

Average selling price per ton sold

      $ 1,681       $ 1,860       (9.6)%        

Gross profit margin(1)

    31.5 %   30.3 %   1.2% pts.

Operating income

      $ 565.8 million       $ 1,013.5 million       (44.2)%        

Cash flow from operations

    $ 1,173.0 million     $ 1,301.5 million     (9.9)%        

Net income

      $ 369.1 million       $ 701.5 million       (47.4)%        

Earnings per diluted share

    $ 5.66     $ 10.34     (45.3)%        

Closing market price of stock at December 31

      $ 119.75       $ 119.76       (0.0)%        

Pretax income margin

    5.4 %   8.5 %   (3.1)% pts.

Pretax income margin—Annual Cash Incentive Plan(2)

        7.46 %       8.50 %     (1.0)% pts.

Annual return on assets ("ROA")(3)

    8.91 %   12.50 %   (3.6)% pts.

Dividends paid per share

      $ 2.50       $ 2.20       13.6%        
(1)
Gross profit, calculated as net sales less cost of sales, and gross profit margin, calculated as gross profit divided by net sales, are non-GAAP financial measures as they exclude depreciation and amortization expense associated with the corresponding sales. About half of Reliance's orders are basic distribution with no processing services performed. For the remainder of its sales orders, Reliance performs "first-stage" processing, which is generally not labor intensive as it is simply cutting the metal to size. Because of this, the amount of related labor and overhead, including depreciation and amortization, is not significant and is excluded from cost of sales. Therefore, Reliance's cost of sales is substantially composed of the cost of the material it sells. Reliance uses gross profit margin as shown above as a measure of operating performance. Gross profit margin is an important operating and financial measure, as fluctuations in our gross profit margin can have a significant impact on Reliance's earnings. Gross profit margin, as presented, is not necessarily comparable with similarly titled measures for other companies.

(2)
Presented below is pretax income margin (pretax income as a percentage of sales) calculated in accordance with our annual cash incentive plan, which excludes various non-recurring charges and

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    credits. NEO performance-based equity awards are tied to achieving an ROA target over a three-year measurement period.

   
   
   
   
   
 
 

(dollars in millions)

   
2020
  2019  
 

Pretax income

      $ 478.2       $ 929.3  
 

Impairment charges

    108.0     1.2  
 

Restructuring charges

        49.8          
 

Postretirement benefit plan settlements

    19.4      
 

Debt restructuring charge

        1.8          
 

Gains related to sales of non-core assets

        (0.9 )
 

Non-GAAP pretax income

      $  657.2       $  929.6  
 

Sales

    $  8,811.9     $  10,973.8  
 

Pretax income margin—Annual Cash Incentive Plan*

        7.46 %       8.50 %
(3)
Presented below is ROA calculated in accordance with our performance-based restricted stock awards, which is calculated as operating income, excluding various non-recurring charges and credits for the year divided by average total assets for the year.
   
   
   
   
   
 
 

(dollars in millions)

   
2020
  2019  
 

Operating income

      $ 565.8       $ 1,013.5  
 

Impairment charges

    108.0     1.2  
 

Restructuring charges

        49.8          
 

Gains related to sales of non-core assets

        (0.9 )
 

Non-GAAP operating income

      $ 723.6       $  1,013.8  
 

Total assets—beginning of year

    $  8,131.1     $  8,044.9  
 

Total assets—end of year

      $  8,106.8       $  8,131.1  
 

Total assets—average

    $  8,119.0     $  8,088.0  
 

ROA*

        8.91 %       12.50 %
*
Results rounded to nearest 1/2 percent in 2019.

See Notes 13 and 19 of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2020 for further information on our postretirement benefit plan settlements and impairment and restructuring charges.

We continued to execute our balanced capital allocation strategy in 2020 using cash flow from operations to return value to our stockholders through approximately $501.4 million of stock repurchases and dividend payments. In addition, we continued to fund organic growth by investing $172.0 million of capital expenditures.

During 2020, we repurchased approximately 3.7 million shares of our common stock at an average cost of $91.80 per share, or $337.3 million in total. As of December 31, 2020, we had remaining authorization to purchase approximately 2.8 million shares. The Company expects to continue opportunistically repurchasing shares of its common stock in the future.

We have increased our dividend 28 times since our 1994 IPO and have paid regular quarterly dividends to our stockholders for over 61 consecutive years. In February 2021, we increased our quarterly dividend by 10.0% to $0.6875 per share from $0.625 per share. We paid a total of $164.1 million in dividends to our stockholders in 2020. Since 2012, the Company's quarterly dividend has more than quadrupled from $0.15 to $0.6875 per share. We have never reduced or suspended our regular quarterly dividend.

Despite the adverse impacts of the COVID-19 pandemic on our business, we were able to generate a record gross profit margin which, combined with diligent expense control and the rightsizing of our inventory resulted in strong cash flow from operations which, in turn, enabled us to continue to invest in

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organic growth through capital expenditures, maintain (and increase) our quarterly dividend and repurchase shares.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 25, 2021 for a more detailed discussion of our results of operations in 2020 compared to 2019 and our financial condition.

RELATIONSHIP BETWEEN PAY AND PERFORMANCE

A majority of our executive compensation is tied to performance through annual cash incentive awards and long-term equity incentive awards. We believe compensation of our NEOs in 2020 was aligned with operational performance in 2020. Management delivered industry-leading operating results in 2020, and the Company achieved record annual and quarterly gross profit margins despite extraordinary challenges related to the COVID-19 pandemic. Consistent with the delivery of such industry-leading results, each NEO received payments above target but below the maximum under each of the annual cash incentive plan and the performance-based equity awards.

The Compensation Committee did not make any adjustments to the prescribed performance criteria for each of the annual cash incentive plan and the performance-based equity awards in response to the unprecedented disruption to our business due to the COVID-19 pandemic.

In 2020, our NEOs participated in our annual cash incentive plan which pays out only if the Company achieves pretax income margin at or above a threshold. Pretax income margin is calculated based on the Company's annual income before income taxes as a percentage of net sales as adjusted for certain non-recurring items. The 2020 annual cash incentive plan opportunity was established on a sliding scale, ranging from zero for results below the 3.00% pretax income margin threshold, 20.0% of base salary for results at the 3.00% pretax income margin threshold, a target of 150.0% of base salary at 5.75% pretax income margin and up to a maximum of 300.0% of base salary for pretax income margin of 8.50% or higher. If the Company achieves a pretax income margin within the range of 3.00% and 8.50% then mathematical interpolation is applied to determine the actual incentive award in the applicable range (threshold to target or target to maximum). The maximum payout under the plan of 300.0% of base salary has only been achieved one time in the last ten years. These metrics were unchanged from prior years and were established in February 2020 before the potential impacts of the COVID-19 pandemic were known. 2020 pretax income margin (as calculated in accordance with our annual cash incentive plan) was 7.46%, which resulted in each NEO receiving an award under the 2020 annual cash incentive plan equal to 243.3% of base salary.

Results for the three-year performance-based equity awards granted in 2018 were determined in the first quarter of 2021 based on the three-year performance period ended December 31, 2020. Results (based on the Company's ROA) for the performance-based equity awards granted in 2018 were 11.17%, which was above the target but below the maximum, resulting in 163.4% of the target number of awards vesting.

The Compensation Committee, in consultation with Pay Governance LLC ("Pay Governance"), the Compensation Committee's independent executive compensation advisor, and with input from management believes that pretax income margin represents an appropriate metric for measuring the Company's financial performance under the annual cash incentive plan as it aligns with how management and the Board measure the Company's performance. Pretax income margin is typically the most important metric used in the Company's corporate and operational decision-making. Since 2016, we have employed pretax income margin as the financial metric to measure the Company's financial performance under the annual cash incentive plan and the Compensation Committee continues to believe that pretax income margin is an appropriate metric to align annual cash incentive opportunities with the Company's financial performance. The Compensation Committee also believes

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that utilizing pretax income margin as the metric for measuring performance under the annual cash incentive plan complements and achieves an appropriate balance with the ROA metric employed in the Company's long-term equity incentive award program.

The table below demonstrates that based on the Company's historical results relative to its executive compensation peer group, the pretax income margin goals are (i) reasonably demanding relative to threshold and target, and (ii) extremely demanding relative to maximum performance.

GRAPHIC

 
   
   
   
   
 
Goal
 


% Time
Company
Achieved



 


Goal Rank vs.
Proxy
Peers
(Percentile)
 
Max: 8.50%         10 %       63rd  
Target: 5.75%     60 %   48th  
Threshold: 3.00%         100 %       28th  

For a discussion of the Company's annual cash incentive compensation achievement versus the minimum, target and maximum, see "Principal Components of Our Executive Compensation Program—Annual Cash Incentive Awards" (page 50).

The NEOs' performance-based equity awards are tied to achieving an ROA target over a three-year measurement period. The Compensation Committee has determined that a three-year ROA measurement period, which is directly influenced by management's decisions, is an effective metric to measure management's long-term performance. ROA also complements and achieves an appropriate balance with the one-year pretax income margin metric under the annual cash incentive award program. The outstanding 2019, 2020 and 2021 performance-based equity awards will vest if the Company achieves a ROA result at or above a minimum threshold over the three-year performance periods.

The allocation of performance-based and service-based equity awards is intended to balance performance and retention objectives. In striking the appropriate balance, the Compensation Committee sought to design a program that incentivizes strong performance while also strengthening the retention aspects of the long-term equity awards since the Company does not maintain employment agreements with its officers. Accordingly, since 2016 at least 80% of our CEO and President's equity awards and 60% of our other NEOs' equity awards have been tied to performance targets. The remaining awards are service-based.

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KEY EXECUTIVE COMPENSATION PRACTICES

WHAT WE DO AND DON'T DO
See
Pages

 

    GRAPHIC Strong pay-for-performance compensation structure with approximately 74% of our CEO's and 65% of our other NEOs' target total direct compensation tied to performance metrics.   36 & 46

 

We align executive compensation   GRAPHIC
Target total direct compensation of our NEOs designed to approximate the market median of our executive compensation peer group when targeted performance levels are achieved.   36

 

with the interests of our
stockholders
  GRAPHIC Performance-based equity awards represented 80% of our CEO and President's equity awards and 60% of our other NEOs' equity awards at target.   40

 

    GRAPHIC
Clawback and recoupment policy for cash and equity compensation. 56

 

    GRAPHIC Stock ownership requirements applicable to all directors and corporate officers, including our NEOs.   56

 

Our executive compensation   GRAPHIC

Double trigger provisions for accelerated vesting of equity awards upon a change in control. 56

 

program is designed to reward
the Company's executive officers
for strong operational and financial
  GRAPHIC All NEO performance-based equity awards are tied to a three-year performance target.   40

 

performance and to avoid
excessive risk taking
  GRAPHIC
Broad and deep distribution of equity awards throughout management while managing the dilutive impact and expense associated with those awards. 51

 

    GRAPHIC Limited perquisites.   53

 

    GRAPHIC
Annual stockholder advisory vote to approve NEO compensation. 19

 

    GRAPHIC Independent compensation committee.   47

 

    GRAPHIC
Independent compensation consultant. 47

 

    GRAPHIC Independent, non-executive Chairman of the Board enhances the effectiveness of the Board's oversight and governance and compensation practices.   72

 

    GRAPHIC
All variable compensation plans have caps on plan formulas; no unlimited compensation. n/a

 

    GRAPHIC Minimum vesting provisions provide that awards must be subject to a minimum one-year vesting period, except with respect to a maximum of 5% of the remaining shares available for grant under the Amended and Restated 2015 Incentive Award Plan (currently 137,990) shares.   n/a

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WHAT WE DO AND DON'T DO
See Pages

 

    GRAPHIC

No employment agreements, severance agreements, change in control/golden parachute agreements or other similar agreements with any executive officer. 54

 

    GRAPHIC No tax gross-ups for perquisites, change in control excise taxes or otherwise.   n/a

 

    GRAPHIC
No dividends on unvested RSUs; dividends accrue and are paid only upon vesting subsequent to achievement of the applicable performance criteria. n/a

 

We adhere to executive   GRAPHIC No hedging of Reliance common stock by directors, officers and employees subject to our Insider Trading and Securities Compliance Policy.   57

 

compensation best practices   GRAPHIC
No pledging of Reliance common stock by directors, officers and employees subject to our Insider Trading and Securities Compliance Policy. 57

 

    GRAPHIC No incentive plan design or feature which would encourage excessive risk-taking.   n/a

 

    GRAPHIC
No share recycling. n/a

 

    GRAPHIC No acceleration of unvested awards permitted, except for death, disability or termination without cause following a change in control.   n/a

 

    GRAPHIC
Froze base salaries at 2019 levels for all corporate officers in 2020 (including our NEOs). 36

 

Compensation Committee   GRAPHIC No change to payout opportunities for 2020.   36

 

Response to COVID-19   GRAPHIC
No change to equity award design for 2020. 36

 

    GRAPHIC No mid-cycle adjustments to outstanding equity awards.   n/a

2020 SAY ON PAY VOTE

In 2020, our stockholders overwhelmingly approved, on a non-binding, advisory basis, the compensation of our NEOs, with over 98% of the votes cast in favor of such compensation. In addition, we believe our stockholders have been highly supportive of our compensation program, as demonstrated by our say-on-pay voting results exceeding 97% in each of the last five years from 2016 through 2020. The Compensation Committee considered the favorable advisory vote as support for its belief that the Company's pay-for-performance policy operates as it was designed, aligning the interests of our executive officers and stockholders and driving the NEOs' performance to enhance long-term stockholder value and achieve Company objectives. As a result, the Company has made no changes to its executive compensation program. The Compensation Committee will continue to consider the outcome of the annual advisory vote to approve compensation when making future compensation decisions for the NEOs.

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2021 EXECUTIVE SUCCESSION

As part of a strategic, deliberate and well-executed long-term succession planning process, the Company's Board of Directors unanimously promoted Karla R. Lewis to President and appointed her to the Company's Board of Directors effective January 15, 2021. Mrs. Lewis' compensation did not change as a result of her promotion to President. Consistent with the Company's director compensation policies, Mrs. Lewis will receive no additional compensation for her service as a director while being an employee of the Company.

Concurrent with Mrs. Lewis' promotion, Arthur Ajemyan was promoted to Vice President, Chief Financial Officer.

In connection with his promotion, Mr. Ajemyan will receive an annual base salary of $450,000 and will be eligible to receive an annual cash incentive award with a target award of 150.0% of his base salary. Mr. Ajemyan will also be eligible to receive annual equity compensation awards as determined by the Compensation Committee of the Board.

OVERVIEW OF OUR EXECUTIVE COMPENSATION PROGRAM

Compensation Program Objectives

Our compensation program is designed and managed to align executive compensation with Company performance, to motivate our executives to deliver financial and operating results that create and maximize value for our stockholders, and to attract and retain key executive talent. While the Compensation Committee has structured individual components of pay to vary from market medians, it aims for our NEOs' total compensation to approximate the median when performance targets are achieved. We believe it is important that our executive compensation program:

    Aligns the interests of our executives with those of our stockholders.  We align the financial interests of our executive officers with the interests of our stockholders by tying a majority of our executives' incentive compensation directly to Company performance. In addition, we have implemented significant stock ownership requirements for our executive officers to strengthen the alignment of their interests and our stockholders' interests.

    Promotes and maintains a performance- and achievement-oriented culture.  In 2020, approximately 74% of our CEO's and 65% of our other NEOs' target total direct compensation was tied to performance metrics. We establish performance targets that are demanding, support our strategic and financial objectives, and promote long-term stockholder value, without encouraging unnecessary or excessive risk taking.

    Is competitive.  Our program is designed to attract, retain and motivate talented and skilled executives. As such, we structure total direct compensation at target to be competitive with the median compensation paid by companies with whom we may compete for executive talent, including those in our executive compensation peer group. While individual components of pay may vary from market medians, we aim to approximate total pay at median when performance targets are achieved.

The Company enjoys a team-oriented corporate culture and rewards the entire team of corporate officers for their collaborative effort that is reflected in the Company's industry-leading performance. Attracting and retaining a team of o