0001564590-22-014544.txt : 20220415 0001564590-22-014544.hdr.sgml : 20220415 20220415150111 ACCESSION NUMBER: 0001564590-22-014544 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 43 CONFORMED PERIOD OF REPORT: 20220525 FILED AS OF DATE: 20220415 DATE AS OF CHANGE: 20220415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BENCHMARK ELECTRONICS INC CENTRAL INDEX KEY: 0000863436 STANDARD INDUSTRIAL CLASSIFICATION: PRINTED CIRCUIT BOARDS [3672] IRS NUMBER: 742211011 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10560 FILM NUMBER: 22829787 BUSINESS ADDRESS: STREET 1: 56 SOUTH ROCKFORD DRIVE CITY: TEMPE STATE: AZ ZIP: 85281 BUSINESS PHONE: 623-300-7000 MAIL ADDRESS: STREET 1: 56 SOUTH ROCKFORD DRIVE CITY: TEMPE STATE: AZ ZIP: 85281 DEF 14A 1 bhe-def14a_20220525.htm DEF 14A bhe-def14a_20220525.htm

 

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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

Filed by the Registrant                               Filed by a party other than the Registrant  

Check the appropriate box:

 

 

Preliminary Proxy Statement

 

 

 

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

 

 

 

Definitive Proxy Statement

 

 

 

Definitive Additional Materials

 

 

 

Soliciting Material Under §240.14a-12

 

BENCHMARK ELECTRONICS, INC.

(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 all boxes that apply):

 

 

No fee required.

 

 

 

Fee paid previously with preliminary materials.

 

 

 

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

 


 


 

 

 

 

2022 notice of annual meeting and proxy ststement

 

 

 


BENCHMARK ELECTRONICS, INC.

56 South Rockford Drive

Tempe, Arizona 85281

 

 

NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON WEDNESDAY, MAY 25, 2022

 

Date:

Wednesday, May 25, 2022

 

Time:

8:00 a.m. local time

 

Location:

Benchmark Electronics, Inc.

56 South Rockford Drive

Tempe, Arizona 85281*

 

 

 

AGENDA:

 1.     to elect nine directors to serve on the Board of Directors until the 2023 annual meeting of shareholders and until their successors are duly elected and qualified;

 2.     to provide an advisory vote on 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 the year ending December 31, 2022;

4.     to approve an amendment to the Benchmark Electronics, Inc. 2019 Omnibus Incentive Compensation Plan to increase the total number of authorized shares of the Company’s common stock available for grant thereunder by 1,375,000 shares; and

5.     to transact such other business as may properly come before the meeting or any adjournment thereof.

 

 

RECORD DATE

Shareholders of record of Benchmark Electronics, Inc. (the “Company”) at the close of business on March 31, 2022 are entitled to notice of and to vote at the meeting and any adjournment thereof. You are cordially invited to attend the meeting.

 

By order of the Board of Directors,

 

/s/ Stephen J. Beaver

 

Stephen J. Beaver

Secretary

 

Tempe, Arizona

April 15, 2022

*

We are actively monitoring the federal, state and local public health guidance related to COVID-19. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will announce any additional or alternative arrangements for the meeting, which may include a change of venue or holding the meeting solely by means of remote communication. Please monitor our website at www.bench.com under “Investors,” as well as our filings with the Securities and Exchange Commission, for updated information. If you are planning to attend our meeting, please check our website the week of the meeting. As always, we encourage you to vote your shares prior to the annual meeting.

 

YOUR VOTE IS IMPORTANT

Regardless of whether you plan to attend the meeting, please act promptly to vote your shares. You may vote in person or by using a proxy as follows:

 

 

 

 

 

 

 

By internet:

 

 

 

By Telephone:

 

    

 

By Mail:

 

Go to www.proxypush.com/BHE.

Please have the Notice of Internet Availability of

Proxy Materials (the “Notice”) we sent to you

in hand because it has your personal control

number(s) needed for your vote.

 

 

 

  

Call 1-866-206-5293 on a touch-tone

phone. Please have the Notice we sent

to you in hand because it has your

personal control number(s) needed for

your vote.

 

 

Please request written materials as

provided in the Notice; then complete,

sign and date the proxy card and

return it to the address indicated

thereon.

 

 

 

 

 

 

 

 

Your proxy is revocable at any time before it is voted at the meeting.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON MAY 25, 2022:

THE PROXY MATERIALS FOR THE ANNUAL MEETING, INCLUDING THIS PROXY STATEMENT AND THE COMPANY’S 2021 ANNUAL
REPORT TO SHAREHOLDERS, ARE AVAILABLE AT WWW.BENCH.COM UNDER “INVESTORS” OR AS PROVIDED IN THE NOTICE.

 

 


 

 

TABLE OF CONTENTS

 

INTRODUCTION

  

 

1

 

 

 

PROPOSAL 1ELECTION OF DIRECTORS

  

 

3

 

 

 

COMPENSATION DISCUSSION AND ANALYSIS

  

 

20

 

 

 

Philosophy and Objectives

  

 

22

 

 

 

Role of Human Capital and Compensation Committee

  

 

23

 

 

 

Role of Management

  

 

23

 

 

 

Role of Independent Compensation Consultant

  

 

23

 

 

 

Competitive Market Review

  

 

24

 

 

 

Timing of Compensation Decisions

  

 

24

 

 

 

2021 Compensation

  

 

24

 

 

 

Base Salary Compensation

  

 

24

 

 

 

Annual Short-Term Incentive Compensation

  

 

25

 

 

 

Long-Term Equity-Based Incentive Program

  

 

26

 

 

 

Other Compensation Practices, Polices and Guidelines

  

 

28

 

 

 

Share Ownership Guidelines

  

 

28

 

 

 

Hedging, Short Sales and Pledging Policies

  

 

28

 

 

 

 

 

 

Deferred Compensation Benefits

  

 

28

 

 

 

 

 

 

Retirement Benefits

  

 

28

 

 

 

 

 

 

Perquisites and Personal Benefits

  

 

28

 

 

 

 

 

 

Analysis of Compensation Risk

  

 

29

 

 

 

Certain Tax Considerations

  

 

29

 

 

 

 

 

HUMAN CAPITAL AND COMPENSATION COMMITTEE REPORT

  

 

30

 

 

 

COMPENSATION TABLES AND NARRATIVES

  

 

31

 

 

 

PROPOSAL 2 — ADVISORY VOTE ON COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

  

 

41

 

 

 

COMMON SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  

 

42

 

 

 

PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  

 

44

 

 

 

AUDIT COMMITTEE REPORT

  

 

45

 

 

 

 

 

 

PROPOSAL 4 — APPROVAL OF AMENDMENT TO THE BENCHMARK ELECTRONICS, INC. 2019 OMNIBUS INCENTIVE COMPENSATION PLAN

  

 

47

 

 

 

 

 

 

EXPENSES OF SOLICITATION

  

 

54

 

 

 

DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

  

 

54

 

 

FORM 10-K

  

 

55

 

 

 

OTHER MATTERS

  

 

55

 

 

 

 

 

 

ANNEX A

  

 

A-1

 

 

 

i    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement


BENCHMARK ELECTRONICS, INC.

56 South Rockford Drive

Tempe, AZ 85281

(623) 300-7000

April 15, 2022

 

 

 

PROXY STATEMENT

 

FOR

2022 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON WEDNESDAY, MAY 25, 2022

 

INTRODUCTION

This Proxy Statement is being furnished in connection with the solicitation of proxies by the Company’s Board of Directors (the “Board”) for use at the Company’s 2022 annual meeting of shareholders to be held at the Company’s headquarters at 56 South Rockford Drive, Tempe, AZ 85281 on Wednesday, May 25, 2022 beginning at 8:00 a.m. local time (Arizona), and any adjournment thereof (the “Meeting”) for the purposes set forth in this Proxy Statement.

Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”), we are making this Proxy Statement and our 2021 Annual Report to Shareholders available to shareholders electronically on the Internet. On or about April 15, 2022, we began mailing a Notice of Internet Availability of Proxy Materials (“Notice”) to our shareholders with instructions on how to access the proxy materials online or request a printed copy of the materials. We believe this electronic process will expedite your receipt of the proxy materials and reduce the cost and environmental impact of the Meeting.

Proxies

 

Proxies properly submitted by internet, telephone or otherwise properly executed and received by the Company before or at the Meeting and not revoked will be voted in accordance with the directions set forth therein. If no direction is made, a proxy that is properly submitted and received by the Company and not revoked will be voted:

FOR the election of all nominees for director named herein to serve on the Board until the 2023 annual meeting of shareholders and until their successors are duly elected and qualified;

FOR the advisory resolution approving the named executive officer compensation (“Say-on-Pay”) as disclosed in this Proxy Statement;

FOR the ratification of the appointment of KPMG LLP (“KPMG”) as the independent registered public accounting firm of the Company for the year ending December 31, 2022; and

FOR the approval of the amendment to the Benchmark Electronics, Inc. 2019 Omnibus Incentive Compensation Plan (the “2019 Omnibus Plan”) to increase the total number of authorized shares of the Company’s common stock available for grant thereunder by 1,375,000 shares.

The proxy also confers on the persons named therein discretionary authority to vote with respect to any other matter that properly comes before the Meeting.

Proxies may be revoked by written notice received by the Company’s Secretary at any time before they are voted at the Meeting by delivering a signed notice of revocation to the Secretary, or a later dated signed proxy, or by attending the Meeting and voting in person by ballot.

Shareholders Entitled to Vote

 

Shareholders of record at the close of business on March 31, 2022 (“Record Date”) are entitled to notice of and to vote at the Meeting. As of March 31, 2022, there were 35,257,685 shares of common stock, $0.10 par value per share (“Common Shares”), issued, outstanding and entitled to vote at the Meeting. Each Common Share is entitled to one vote on all matters that may properly come before the Meeting. However, shares held at your broker, bank or other nominee for which you do not submit voting instructions will not be voted and will be deemed not entitled to vote with regard to certain proposals as discussed under “How to Vote If You Hold Your Shares in ‘Street Name’” below.

 

Benchmark Electronics, Inc.       •   2022 Proxy Statement         Benchmark.     1

 


INTRODUCTION

How to Vote If You Are a Registered Holder of Common Stock

 

If you are a registered holder of shares, you may vote them either by proxy as set forth in the Notice and/or proxy card in advance of the Meeting or by voting in person at the Meeting. By submitting a proxy, you are legally authorizing another person to vote your shares on your behalf.

Attending the Meeting

 

Only holders of our Common Shares as of the close of business on the Record Date, which was March 31, 2022, or their duly appointed proxies, may attend the Meeting. If you hold your shares through a broker, bank or other nominee, you will be required to show the Notice or voting instructions form you received from your broker, bank or other nominee or a copy of a statement (such as a brokerage statement) from your broker, bank or other nominee reflecting your stock ownership as of the Record Date in order to be admitted to the Meeting. All attendees must bring a government-issued photo ID to gain admission to the Meeting. Please note that recording devices, photographic equipment, large bags and packages will not be permitted in the meeting room.*

How to Vote If You Hold Your Shares in “Street Name”

 

Most shareholders do not have their shares registered directly with the Company in their name; instead their shares are held in their brokerage account or by a bank or other custodian who votes the shares according to the instructions submitted to them by the beneficial owner of the shares. If you do not submit voting instructions to your broker, bank or other nominee, they will not be permitted to vote your shares on any proposal, unless the proposal constitutes a “discretionary” item and your broker, bank or other nominee is a member of the New York Stock Exchange (“NYSE”) and permitted by NYSE rules to vote on “discretionary” items, such as the ratification of the Company’s independent registered public accounting firm. The election of directors, the Say-on-Pay vote and the approval of the amendment to the 2019 Omnibus Plan are “nondiscretionary” items. Without your instructions, your shares may be represented at the Meeting, but as to nondiscretionary items, they may not be voted, resulting in “broker non-votes” on those items. Because they cannot be voted on those matters, they are not deemed to be “entitled to vote” on those matters and will not be included in the calculation of voting results for those matters (neither in the numerator nor the denominator).

Accordingly, we urge you to promptly give instructions to your broker, bank or other nominee to vote FOR each of the proposals contained in this Proxy Statement by using the voting instruction card provided to you by your broker, bank or other nominee. Please note that if you intend to vote your street name shares in person at the Meeting, you must obtain a “legal proxy” from your broker, bank or other nominee and present it at the Meeting.

Quorum, Voting Requirements and Other Matters

 

The presence at the Meeting, in person or represented by proxy, of the holders of a majority of the outstanding Common Shares is necessary to constitute a quorum for the conduct of business. Common Shares represented by a proxy that is properly submitted by internet or telephone, or otherwise properly completed, signed and returned, will be counted as present at the Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as withholding authority, casting a vote or abstaining or lacks instructions as to any “discretionary” item.

All matters specified in the notice of the Meeting require the approval of the affirmative vote of a majority of the outstanding Common Shares entitled to vote and present, in person or represented by proxy, at the Meeting. An abstention on any matter, or withholding authority to vote with respect to the election of directors, will have the effect of a vote against the proposal. Proxies granted by shareholders holding their shares in “street name” to their broker, bank or other nominee and left uninstructed with respect to any “nondiscretionary” items are deemed to be not “entitled to vote” on those items, as “broker non-votes”, and will not be included in the calculation of voting results for those matters (neither in the numerator nor the denominator).

An Inspector of Election appointed by the Company will tabulate votes at the Meeting.

The Board is not aware of any matters to come before the Meeting other than those referred to in this Proxy Statement. If any other matter properly comes before the Meeting, the proxies will be voted in accordance with the discretion of the person or persons voting the proxies.

Voting Results

 

The preliminary voting results may be announced at the Meeting. The final voting results will be announced in a Current Report on Form 8-K filed with the SEC within four business days after the Meeting.

 

*

We are actively monitoring the federal, state and local public health guidance related to COVID-19. In the event it is not possible or advisable to hold our annual meeting as currently planned, we will announce any additional or alternative arrangements for the meeting, which may include a change of venue or holding the meeting solely by means of remote communication. Please monitor our website at www.bench.com under “Investors,” as well as our filings with the SEC, for updated information. If you are planning to attend our meeting, please check our website the week of the meeting. As always, we encourage you to vote your shares prior to the annual meeting.

 

 

2    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

Nominees for Election

 

The following table sets forth information with respect to each nominee for election as a director of the Company nominated by the Board. Each nominee was proposed to the Board for election by its Nominating, Sustainability and Governance Committee, and the Board determined to nominate these candidates for election by the shareholders at the Meeting. The Board has reviewed the qualifications of each nominee and has determined that, other than Mr. Benck, each satisfies the (i) independence standards promulgated by the NYSE and applicable regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) “non-employee director” standards set forth in such regulations, and (iii) “outside director” requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), and applicable regulations. The information as to age, principal occupation and directorships has been furnished by the nominees.

 

 

 

 

 

 

 

Name

 

Age

 

Principal Occupation

Director

Since

 

 

 

 

 

 

David W. Scheible

 

65

 

Chairman of the Board of the Company and Current Operating Advisor to the funds of Clayton, Dubilier & Rice

2011

Anne De Greef-Safft

 

59

 

Advisor to Private Equity Firms and their Portfolio Companies through ADS Consulting

2019

Douglas G. Duncan

 

71

 

Retired President and Chief Executive Officer of FedEx Freight Corporation

2006

Robert K. Gifford

 

64

 

President and Chief Operating Officer of BeachBody LLC

2016

Ramesh Gopalakrishnan

 

54

 

President and Chief Operating Officer of Wind, TPI Composites, Inc.

2021

Kenneth T. Lamneck

 

67

 

Retired President and Chief Executive Officer of Insight Enterprises, Inc.

2013

Jeffrey S. McCreary

 

65

 

Retired Interim President and Chief Executive Officer of Isola Group

2016

Lynn A. Wentworth

 

63

 

Chair of the Audit Committee of Graphics Packaging Holding Company

2021

Jeffrey W. Benck

 

56

 

President and Chief Executive Officer of the Company

2019

 

Board Tenure, Skills and Qualifications

 

 

TENURE (number of years)

 

SKILLS AND QUALIFICATIONS

 

 

 

 

 

 

 

AGE DISTRIBUTION

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc.       •   2022 Proxy Statement         Benchmark.     3

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

 

 

 

  

DAVID W. SCHEIBLE

 

Age: 65

Director Since: 2011

 

Committees:

     Human Capital and Compensation

     Nominating, Sustainability and Governance

Biographical Information

David W. Scheible has been a director of the Company since 2011 and has served as non-executive Chairman of the Board since March 2016. He serves on the Human Capital and Compensation and the Nominating, Sustainability and Governance Committees. Since June 2016, he has been an Operating Advisor to the funds of Clayton, Dubilier & Rice, a private investment firm. From 1998 to December 2015, Mr. Scheible held increasingly senior-level executive roles at Graphic Packaging Holding Company (NYSE:GPK), a global manufacturer of custom packaging, paperboard, laminations and coatings, systems and machinery and provider of contract packaging services to multinational companies. He served as its Chairman of the Board (May 2013-May 2016), Chief Executive Officer (2007-December 2015), and previously as Chief Operating Officer and Executive Vice President of Commercial Operations. From 1986 to 1998, he was an executive with Avery Dennison Corporation, a global manufacturer of self-adhesive products, office products and specialized label systems. Mr. Scheible received an MBA in Finance and a Bachelor of Science in Biochemistry from Purdue University.

 

 

Qualifications

With his experience as chairman, chief executive officer and as a senior executive of global manufacturing, including contract manufacturing, companies over his 30-year career, Mr. Scheible brings to the Board highly relevant leadership skills and international operations expertise.

 

 

  

ANNE DE GREEF-SAFFT

 

Age: 59

Director Since: 2019

 

Committees:

     Human Capital and Compensation

     Nominating, Sustainability and Governance

Biographical Information

Anne De Greef-Safft has been a director of the Company since December 2019 and is a member of the Human Capital and Compensation and the Nominating, Sustainability and Governance Committees. In February 2022, Ms. De Greef-Safft joined the Board of Ambarella, Inc. (NASDAQ:AMBA) and serves on its Nominating and Governance Committee. Ambarella’s artificial intelligence semiconductor solutions are used in a wide variety of human and computer vision applications. Since 2018, Ms. De Greef-Safft has also served as a member of the Board of Ag Growth International Inc. (TSE:AFN) ("AGI"), a provider of solutions for global food infrastructure including seed, fertilizer, grain, feed, and food processing systems. She chairs AGI’s Environmental, Health, and Safety Committee, and is a member of the Human Resources & Compensation and Governance, Sustainability & Social Responsibility Committees.  Ms. De Greef-Safft currently provides strategic and operational consulting services to private equity firms and their portfolio companies. From 2015 until her retirement in 2017, Ms. De Greef-Safft was Group President of the Food Service Equipment Group of Standex International Corporation. Prior to 2015, Ms. De Greef-Safft held four successive positions at Danaher Corporation as President of increasingly complex, global operating companies over a period of 12 years.  Before joining Danaher, she held various leadership positions in engineering, marketing, sales, and business development for global manufacturing companies. Ms. De Greef-Safft earned her BSEE and MSEE degrees from the Catholic University of Louvain (KU Leuven) in Belgium and an MBA from Babson College in Massachusetts.

 

 

Qualifications

Ms. De Greef-Safft brings to the Board product development, marketing, sales and manufacturing experience, both as an operator and as a seasoned global executive.

 

 

 

 

4    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

 

 

  

DOUGLAS G. DUNCAN

 

Age: 71

Director Since: 2006

 

Committees:

     Audit

     Nominating, Sustainability and Governance (Chair)

Biographical Information

Douglas G. Duncan has been a director of the Company since 2006, is a member of the Audit Committee, and chairs the Nominating, Sustainability and Governance Committee. He is the retired President and Chief Executive Officer of FedEx Freight Corporation, a provider of regional and interregional less-than-truckload freight services. He was founding CEO of this stand-alone, wholly owned subsidiary corporation of FedEx Corporation and served in that capacity from 2001 to 2010. He also served on the Strategic Management Committee of FedEx Corporation. Before the formation of FedEx Freight, he served as President and Chief Executive Officer of Viking Freight. Mr. Duncan has also held management positions in operations, sales and marketing with Caliber System and Roadway Express. He served on the Executive Committee of the American Trucking Associations and as Chairman of the American Transportation Research Institute. He graduated from Christopher Newport University, where he served on the Board of Visitors. He also serves on the board of directors of J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT).

 

 

Qualifications

Mr. Duncan brings to the Board not only his experience as a chief executive officer, but also his skills and insight into operational logistics, which he developed over the course of his 30-year career in the transportation industry. His ability to develop and execute corporate strategy at an organizational level is evidenced by his leadership as President and Chief Executive Officer at FedEx Freight.

 

 

  

ROBERT K. GIFFORD

 

Age: 64

Director Since: 2016

 

Committees:

     Human Capital and Compensation (Chair)

Biographical Information

Robert K. Gifford has been a director of the Company since 2016 and chairs the Human Capital and Compensation Committee. Since March 2017, he has served as the Chief Operating Officer of BeachBody LLC, a fitness company. From June 2016 to February 2017, he was the Head of Operations and Quality for the Ultrasound Division of Siemens Healthineers, a medical technology company. From 2010 to June 2015, he held increasingly senior roles at Ingram Micro Inc., a global technology distributor and technology sales, marketing and logistics company, most recently serving as Senior Executive Vice President and President of Supply Chain Solutions and previously as Executive Vice President of Global Logistics. Mr. Gifford also previously served as Senior Vice President of Global Supply Chain at Ecolab Inc., a provider of cleaning and sanitizing products to healthcare and food and beverage industries worldwide, and as Vice President of its North America Chemical Supply Chain & Global Equipment Supply Chain. Prior to that, Mr. Gifford progressed from early management roles beginning in 1996 at Compaq Computer Corporation prior to its acquisition by Hewlett-Packard Company (n/k/a HP Inc.), to serving as Vice President of Worldwide Logistics and Program Manager of HP, Inc. He received his MBA from Texas A&M University in 2006 and his BS in Manufacturing Management from San Jose State University in 1996.

 

 

Qualifications

Mr. Gifford brings to the Board his experience and expertise leading global supply chain systems for Fortune 100 companies in the technology industry.

 

 

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     5

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

 

 

 

  

RAMESH GOPALAKRISHNAN

 

Age: 54

Director Since: 2021

 

Committees:

     Audit

 

Biographical Information

Ramesh Gopalakrishnan has been a director of the Company since October 2021 and member of the Company’s Audit Committee.  Mr. Gopalakrishnan is currently the President and Chief Operating Officer, Wind of TPI Composites, Inc., a global manufacturer of utility-scale wind turbine blades. From September 2016 until December 2021, Mr. Gopalakrishnan was the Chief Operating Officer of Wind Operations.  Prior to joining TPI Composites, Inc., Mr. Gopalakrishnan was with Senvion GmbH, where he served as the Executive Vice President of Manufacturing from May 2015 to August 2016 and Senior Vice President, Global Blades, from February 2013 to April 2015. Mr. Gopalakrishnan also served as the Chief Operating Officer of Suzlon Energy Composites from February 2011 to January 2013. Prior to joining Suzlon Energy Composites, Mr. Gopalakrishnan held leadership roles in supply chain and strategy at Halliburton (2006-2010). Before his time at Halliburton, Mr. Gopalakrishnan held several leadership roles in operations, engineering, and advanced technology at General Electric (1996-2006) and Siemens (1993-1996). He holds a Bachelor of Science in mechanical engineering from the Indian Institute of Technology Bombay, and a Master of Science and a doctorate in mechanical engineering from State University of New York at Stony Brook.

 

 

Qualifications

Mr. Gopalakrishnan brings to the Board strong global operational and strategy expertise, derived from executive leadership positions at several multi-national companies around the world. His deep manufacturing and technology experience as well as his diverse perspectives and thought leadership further support Benchmark's strategic growth objectives.

 

 

  

KENNETH T. LAMNECK

 

Age: 67

Director Since: 2013

 

Committees:

     Audit (Chair)

     Nominating, Sustainability and Governance

Biographical Information

Kenneth T. Lamneck has been a director of the Company since 2013, chairs the Audit Committee and is a member of the Nominating, Sustainability and Governance Committee. From 2010 to 2021, he served as the President, Chief Executive Officer, and a Director of Insight Enterprises, Inc. (NASDAQ:NSIT), a global provider of information technology hardware, software and service solutions to businesses and public sector clients in over 190 countries. From 2004 to 2009, he was President, the Americas, at Tech Data Corporation, a wholesale distributor of technology products, where he led operations in the United States, Canada and Latin America. From 1996 to 2003, he held various executive management positions at Arrow Electronics, including President of Arrow/Richey Electronics and President of Arrow’s Industrial Computer Products business. Following five years of service in the United States Army, he began his civilian career at IBM as an engineer. Mr. Lamneck recently joined the board of directors of Fidelity National Information Services (NYSE:FIS). Mr. Lamneck received an MBA from the University of Texas at El Paso and a Bachelor of Science from the United States Military Academy at West Point.

 

 

Qualifications

Mr. Lamneck’s wide-ranging industry experience spanning over 30 years, both as a chief executive officer of a global technology provider and in other leadership roles at multiple global hardware, software and services companies, enables him to bring to the Board a strong international operations background and a depth of understanding into the operation and management of companies in the technology industry.

 

 

 

6    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

 

  

JEFFREY S. MCCREARY

 

Age: 65

Director Since: 2016

 

Committees:

     Nominating, Sustainability and Governance

     Human Capital and Compensation

Biographical Information

Jeffrey S. McCreary has been a director of the Company since 2016 and is a member of the Human Capital and Compensation and the Nominating, Sustainability and Governance Committees. He served as a member of the board of directors (2006-2017) of Isola Group, a leading global material sciences company that designs, develops, manufactures and markets laminate materials used to fabricate advanced multilayer printed circuit boards, and previously served as its Interim President and CEO. Mr. McCreary also served as a director and Interim President and CEO of Integrated Device Technology, Inc., which develops system-level solutions that optimize customers’ applications. In addition, he previously served as a director of MIPS Technologies, Inc., a leading provider of industry-standard processor architectures and cores for digital home, networking and mobile applications, and as a director of the Gennum Corporation, a provider of semiconductor solutions and intellectual property cores. Mr. McCreary is a former Senior Vice President at Texas Instruments, where he also served as Manager of Worldwide Sales and Marketing and in a number of other executive positions, including General Manager of Advanced Logic Products and General Manager of Worldwide Military Semiconductors. He is an NACD Board Leadership Fellow and received a B.S. in Electrical Engineering from the Rose-Hulman Institute of Technology in 1979 and an Honorary Doctorate of Engineering from Rose-Hulman in 2004.

 

 

Qualifications

Mr. McCreary brings to the Board his technology expertise and senior sales executive experience, along with his experience as a director of technology companies.

 

  

 

LYNN A. WENTWORTH

 

Age: 63

Director Since: 2021

 

Committees:

     Audit

Biographical Information

Lynn A. Wentworth has been a director of the Company since June, 2021 and is a member of the Audit Committee. Ms. Wentworth serves as a director and chair of the audit committee for Graphic Packaging Holding Company (NYSE:GPK). She was a director for CyrusOne, Inc. from 2014 until its acquisition by a consortium led by KKR and Global Infrastructure Partners (GIP) in March 2022 and had served as chair of the board since May 2021. Ms. Wentworth was also a director of Cincinnati Bell, Inc. from 2008 until its acquisition by Macquarie Asset Management in September 2021 and had served as chair of the board since May 2019.  She served as the Senior Vice President, Chief Financial Officer and Treasurer of BlueLinx Holdings Inc. until her retirement in 2008. Prior to joining BlueLinx in 2007, Ms. Wentworth was with BellSouth Corporation from 1985 to 2007, where she served as Vice President and Chief Financial Officer for the Communications Group from 2004 to 2007 and Vice President Treasurer from 2003 to 2004. She also held a variety of financial and operational assignments with increasing responsibility in tax, strategic planning, investor relations, financial planning, sales, operations, and treasury for BellSouth. Ms. Wentworth began her career at Coopers & Lybrand, where she served in both the audit and tax divisions. She holds a bachelor’s degree from Babson College, a master’s degree in taxation from Bentley College and a master’s in business administration from Georgia State University.

 

 

Qualifications

Ms. Wentworth brings to the Board a wealth of financial, operational and strategy expertise demonstrated by a track record of growth and diversification for the companies she has served.

 

 

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     7

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

 

 

 

 

 

  

JEFFREY W. BENCK

 

Age: 56

Director Since: 2019

 

     Company’s President and Chief Executive Officer

Biographical Information

Jeffrey W. Benck has been President, Chief Executive Officer and a director of the Company since March 2019. Prior to joining the Company, Mr. Benck served as President, Chief Executive Officer and Director of Lantronix, a global provider of hardware and software solutions for the Internet-of-Things (IoT) and Out-of-Band Management (OOBM) from December 2015 to February 2019. He spent two years as an Independent Board Director for Netlist Corporation, a leading provider of high-performance modular memory subsystems. Prior to joining Lantronix, Mr. Benck served as President and Chief Executive Officer of Emulex Corporation, a global supplier of advanced networking, monitoring and management solutions from July 2013 until Emulex was acquired by Avago Technologies in May 2015. He joined Emulex in May 2008 as Executive Vice President and Chief Operating Officer and was subsequently appointed to President and Chief Operating Officer in August 2010. Prior to joining Emulex, Mr. Benck was President and Chief Operating Officer of QLogic Corporation, a supplier of storage networking solutions. Earlier, he spent 18 years at IBM Corporation where he held a variety of executive leadership roles, including serving as Vice President of xSeries, BladeCenter and Retail Store Solutions development. He is also a distinguished inventor in the computer systems field and holds six U.S. patents. Mr. Benck holds a Master of Science degree in management of technology from University of Miami and a Bachelor of Science degree in mechanical engineering from Rochester Institute of Technology.

 

 

Qualifications

Mr. Benck’s broad industry experience over more than 25 years, both as a Chief Executive Officer and Director of multiple technology companies as well as other senior leadership roles in Engineering, Marketing, and Program Management at several global hardware, software and services companies enables him to provide insights to the Board from a deep understanding of operations and management of companies in the technology industry. Further, his experience as a former OEM customer of both Benchmark and our competitors also provides a unique perspective to the board.

 

 

 

 

8    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Election Procedures; Term

 

Directors will be elected by the affirmative vote of the holders of a majority of the outstanding Common Shares entitled to vote and present, in person or represented by proxy, at the Meeting. Unless authority to vote for the election of directors is withheld as to any or all of the nominees, all Common Shares represented by proxy will be voted for the election of the nominees. If the authority to vote for the election of directors is withheld as to any but not all of the nominees, all Common Shares represented by any such proxy will be voted for the election of the nominees as to whom such authority is not withheld. If a nominee becomes unavailable to serve for any reason before the election, the shares represented by proxy will be voted for such other person, if any, as may be designated by the Board. The Board, however, has no reason to believe that any nominee will be unavailable to serve as a director.

Upon completion of the Meeting, the Board will consist of nine members. Any vacancy on the Board occurring after the election may be filled (1) by election at any annual or special meeting of the shareholders called for that purpose, or (2) by a majority of the remaining directors. A director elected to fill a vacancy will be elected for the unexpired portion of the term of his or her predecessor.

All directors will be elected to serve until the 2023 annual meeting of shareholders and until their successors are duly elected and qualified.

 

  

  

The Board of Directors recommends a vote FOR the election of each of the nominees to the Board of Directors.

 

 

Executive Officers

 

The officers of the Company are elected by, and serve at the discretion of, the Board. The executive officers of the Company are Jeffrey W. Benck, Roop K. Lakkaraju, Michael D. Buseman, Stephen J. Beaver, Jan M. Janick, Robert B. Crawford, Scott M. Hicar, and Rhonda R. Turner. See “Election of Directors — Nominees for Election” for information regarding Mr. Benck’s age, Company service and business experience.

 

 

  ROOP K. LAKKARAJU    |     Executive Vice President, Chief Financial Officer

 

 Roop K. Lakkaraju, 51, has been Executive Vice President and Chief Financial Officer since January 2018. In February 2022, he joined the board of Infinera Corporation (NASDAQ:INFN) a global supplier of innovative open optical networking solutions and serves as a member of the audit committee. From February 2017 to January 2018, he served as Chief Financial Officer of Maana, Inc., an enterprise software company. From October 2013 to February 2017, he served as Chief Operating Officer and Chief Financial Officer of Support.com, a provider of cloud-based software and services for technology support. From July 2011 to October 2013, he was Chief Financial Officer of Quantros, Inc., a provider of enterprise SaaS-based solutions and information services that advance healthcare quality and safety performance. Prior to that he held executive financial and operational roles at 2Wire, Solectron Corporation, and Safeguard Scientifics. He began his career in 1993 as an auditor with Grant Thornton before joining PricewaterhouseCoopers in their Audit and Business Advisory Services. Mr. Lakkaraju holds a B.S. in Business Administration from San Jose State University.

 

 

  MICHAEL D. BUSEMAN    |    Executive Vice President, Chief Operating Officer

 

 

Michael D. Buseman, 60, has been the Executive Vice President and Chief Operating Officer since December 2020 and has been a member of the executive leadership team since July 2017. From July 2017 to December 2020, he served as the Executive Vice President, Global Operations. He served as Chief Global Logistics and Operations Officer of Avnet, Inc., a global electronics components company, from November 2013 to July 2017. From 2007 until November 2013, he was Executive Vice President of Global Manufacturing Operations of Plexus Corp., having served as its Vice President of Global Technology, Quality and Facilities since 2006. Mr. Buseman previously served as Vice President and General Manager of Operations of Celestica, Inc., as well as its Director, Operations, Engineering, and Technology. He began his career in 1983 with Unisys, Inc., holding positions of increasing responsibility, including Principal Process Engineer and Director of Advanced Design Manufacturing Services. Mr. Buseman holds a BS in Mechanical Engineering from South Dakota State University and an MBA from the University of St. Thomas, Minnesota.

 

 

STEPHEN J. BEAVER    |    Senior Vice President, General Counsel and Chief Legal Officer, Corporate Secretary

 

Stephen J. Beaver, 50, has been the Senior Vice President, General Counsel and Chief Legal Officer since December 2020 and has been the Corporate Secretary and a member of the executive leadership team since August 2018. From August 2018 to December 2020, he was Vice President, General Counsel & Corporate Secretary. Prior to joining Benchmark, Mr. Beaver served as Senior Vice President and General Counsel for Aspect Software, Inc., an enterprise software company, from April 2013 to August 2018. Prior to Aspect, Mr. Beaver was with TPI Composites, Inc., where held the post of General Counsel and Corporate Secretary from September 2008 until April 2013. Prior to TPI Composites, Mr. Beaver was Vice President, General Counsel & Secretary for Swift Transportation Company, Inc. until September 2008. Earlier in his career, Mr. Beaver practiced in the areas of labor and employment law and commercial litigation at the international law firm of Bryan Cave Leighton Paisner LLP. Mr. Beaver received a Bachelor’s Degree in Communications from the University of Arizona in 1993. He received a Juris Doctorate from Marquette University Law School, Milwaukee, Wisconsin, in 1998.

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     9

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

  Robert B. Crawford    |    Senior Vice President, Chief Revenue Officer

 

 Robert B. Crawford, 58, has been Senior Vice President, Chief Revenue Officer for the Company since July 2019. From 2015 until June 2019, Mr. Crawford served as Vice-President, Global Sales-Advanced Technology Solutions at Celestica, Inc. He served as Sr. Vice President of Worldwide Sales and Marketing for QLogic Corporation, from 2011 to 2014. Mr. Crawford held various leadership roles in leading companies, including Quantum Corporation and Dell Inc., from 1999 to 2011. Mr. Crawford holds a Bachelor of Science in mechanical engineering from Texas A&M University and an MBA from Pepperdine University.

 

 

  SCOTT M. HICAR    |    Senior Vice President, Chief Information Officer

 

Scott M. Hicar, 55, has been Senior Vice President, Chief Information Officer since December 2020 and has been a member of the executive leadership team since September 2017. From September 2017 to December 2020 he served as Vice President of Business Process Improvement and Chief Information Officer. From 2015 to 2017 he worked for TwentyEighty, a corporate learning and performance management company focused on sales growth, leadership and strategy execution as its Chief Information Officer. From 2009 to 2014, he was Senior Vice President and Chief Information Officer for DigitalGlobe, a public digital information products company focused on Aerospace and Defense. Prior to that, from 2006 to 2008, Mr. Hicar was Senior Vice President and CIO at Solectron Corporation, an electronics manufacturing services provider. From 1997 to 2006, he served as CIO for Maxtor Corporation, a public provider of storage products. Mr. Hicar has more than 25 years of technology leadership experience in transformational roles, and previously held management positions in the Supply Chain/ERP practice at Price Waterhouse Coopers, as well as serving as an internal consultant to chemical, pharmaceutical, and agriculture businesses within ICI Americas. Mr. Hicar received his Bachelor’s degree in business administration, with a concentration in management information systems, from Ohio University.

 

 

  JAN M. JANICK    |    Senior Vice President, Chief Technology Officer

 

Jan M. Janick, 63, has been Senior Vice President, Chief Technology Officer since December 2020 and has been a member of the executive leadership team since 2015. From July 2015 to December 2020 he served as Chief Technology Officer and Vice President of Global Engineering. He served as Vice President of FlashSystems and Technology at IBM from 2012 to 2015, where he led the acquisition of Texas Memory Systems and the development and delivery of the FlashSystems product line of Solid State flash memory storage systems. In prior roles at IBM, he led the development of a number of key products, including IBM’s x86-based servers and PureFlex systems. He was Vice President of Operations and Software Development at Lenovo, a multinational technology company, from 2005 to 2006. Mr. Janick serves on the Board of Directors for both the Arizona Technology Council and Arizona State University’s School of Engineering. Mr. Janick holds a BS and MS in Electrical Engineering from the University of Wisconsin-Madison. 

 

 

  RHONDA R. TURNER    |    Senior Vice President, Chief Human Resources Officer

 

 Rhonda R. Turner, 48, has been Senior Vice President, Chief Human Resources Officer since July 2019. Ms. Turner brings over 20 years of experience into this role and most recently served as senior vice president of human resources for Universal Technical Institute, Inc where she worked from 2006 to July 2019. Prior to that, she held various human resources leadership roles at leading companies such as ConocoPhillips, Circle K and Main Street Restaurant Group, a TGI Friday’s franchisee. She holds a Bachelor of Science in management from the W.P. Carey School of Business at Arizona State University. Ms. Turner is a licensed analyst in Predictive Index and holds her Certified Compensation Professional (CCP) designation from World at Work as well as multiple certifications in Korn Ferry’s Leadership Architect and Interview Architect systems.

 

 

10    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Corporate Governance, Committee Charters, Shareholder Communications

 

The Company places integrity first and foremost, which has long been a part of our corporate identity. The Company’s practices reflect corporate governance compliant with existing standards of the NYSE and requirements of the SEC, as well as other best practices, including:

 

The Company’s Code of Conduct applies to all directors, officers and employees;

 

The Company has a system in place to encourage and facilitate confidential and anonymous reports of compliance concerns, including to the Audit Committee of the Board;

 

Executive officers are subject to a clawback policy relating to performance-based compensation earned during periods for which a financial restatement is required under SEC reporting rules;

 

Directors and executives are prohibited from pledging, hedging, selling short or otherwise engaging in speculative practices regarding the Company’s securities;

 

All of our directors are independent, except for Mr. Benck who serves as Chief Executive Officer (the “CEO”);

 

The independent directors meet regularly without the presence of management;

 

The Board operates under a set of published corporate governance guidelines;

 

Any director that does not receive the affirmative vote of the holders of a majority of the outstanding Common Shares entitled to vote in the election of directors and represented, in person or by proxy, at any meeting during which an uncontested election occurs must tender his or her resignation to the Board for its consideration in accordance with the corporate governance guidelines;

 

Three members of the Board’s Audit Committee qualify as “audit committee financial experts” as defined by the SEC;

 

KPMG, our independent registered public accounting firm, reports directly to the Audit Committee;

 

The Company’s internal audit group meets in private session with the Audit Committee periodically during the year; and

•    The Company has published a sustainability report that provides transparency and documents our efforts in the area of sustainability.

The Board will continue to enhance the Company’s governance practices as value-enhancing new ideas and best practices emerge. You may access our current committee charters, Code of Conduct and Corporate Governance Guidelines on our website at www.bench.com under “Investors—Corporate Governance,” or obtain copies by writing to the Corporate Secretary at Benchmark Electronics, Inc., 56 South Rockford Drive, Tempe, Arizona 85281.

Shareholders and other interested parties may send communications about bona fide issues or questions to the Board, the nonemployee directors as a group or to individual directors, in each case, care of Benchmark Electronics, Inc., Attention: Stephen Beaver, 56 South Rockford Drive, Tempe, Arizona 85281.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     11

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Commitment to Environmental, Social & Governance (ESG) & Sustainability

 

 

 

BENCHMARK HAS BEEN MONITORING EMISSIONS AND TRACKING ENERGY REDUCTION PLANS SINCE 2012.

In 2020, we broadened our focus and established an ESG/ Sustainability Council, which is responsible for leading our ESG strategy and monitoring our corporate social responsibility and environmental sustainability initiatives. In addition, the ESG/ Sustainability Council oversees Benchmark’s sustainability disclosures, including the production of its 2021 SASB Fact Sheet as well as our recently released Sustainability Report (see www.bench.com/sustainability).

The ESG/Sustainability Council includes cross-functional leadership from Finance, Operations, Strategy, Human Resources, Facilities, Supply Chain, Marketing and Investor Communications, Regulatory Compliances, and Legal. Additionally, seven work groups have been established across the organization to work on ESG/Sustainability areas enterprise-wide and across business lines. The Nominating, Sustainability and Governance Committee of our Board of Directors oversees these efforts and assesses our performance against our agreed to objectives. Our executive leadership team is also tasked with driving results in these areas given the strategic importance of our ESG/Sustainability initiatives.

Against this backdrop, we have, with the assistance of outside ESG expertise, performed an assessment of key indicators and engaged with our internal and external stakeholders on ESG topics to help further inform our future direction and priorities. The five tenets of our ESG strategy are shown at right:

 

 

 

12    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

 

Our commitment to ESG and these tenets is both a strategic and operational imperative as we build a sustainable infrastructure across the Company.  Our five tenets arose from a priority-based approach to ESG disclosure, in line with best practices. Beginning in the spring of 2021, Benchmark completed its first assessment of ESG priorities – examining a range of key stakeholders, including investors, customers, employees, and ESG rating organizations and by studying industry peers. Our analysis of ESG topics included each of the Global Reporting Initiative (GRI) Standards, the Task Force on Climate-Related Financial Disclosures (TCFD), the 17 United Nations Sustainable Development Goals (SDGs), as well as the Sustainability Accounting Standards Board (SASB) Electronic Manufacturing Services & Original Design Manufacturing 2018 Sustainability Accounting Standard.

 

ESG OVERSIGHT

The Nominating, Sustainability and Governance Committee has direct oversight over the Company’s ESG policies and programs, including reviewing and evaluating the Company’s ESG plans and practices. Similarly, Benchmark’s Sustainability Council includes cross-functional leadership from Finance, Operations, Strategy, Human Resources, Facilities, Supply Chain, Marketing and Investor Communications, Regulatory Compliance, and Legal. Building on the SASB Fact Sheet we released in 2021, our Sustainability Council has continued to expand our program and on March 21, 2022, we published our inaugural 2021 Sustainability Report that includes Scope 1 and 2 Greenhouse Gas (GHG) emission data, as well as waste metrics and energy consumption spanning a three-year period. The Company also updated the content of its sustainability page at www.bench.com/sustainability.

Our ESG program achieves symmetry with the Company’s vision to positively impact lives by solving complex challenges with our customers, creating innovative products that no one imagined were possible. To this end, the Board is committed to overseeing Benchmark’s integration of ESG principles throughout the enterprise and in our approach to governance.

 

ENVIRONMENTAL RESPONSIBILITY

We are committed to responsible environmental practices that include conservation of natural resources, pollution prevention and reduction of waste. We also strive to continually improve our operations and promote the health and safety of our workforce in compliance with all company, local, and federal standards.

Our environmental strategy is based on mitigation and prevention. Specifically, we are minimizing our environmental impact through reducing the waste we send to landfills, purchasing environmentally responsible products, and proactively preventing needless internal waste. Our material sourcing strategy focuses on enhancing our ability to rapidly respond to changes in our customers’ requirements. We achieve this by effectively managing changes in our supply chain utilizing web-based interfaces and real-time supply chain management software products that allow us to scale operations to meet our customers’ increasingly environmentally conscious needs.

Our Environmental Management System (EMS) is managed at each site by a site-EHS administrator, who ensures that the system is implemented and maintained. Elements of the Company’s activities, products, and services at that site that may interact with the environment are identified, and the likelihood and potential severity of environmental impact is determined.  Notably:

 

      All Benchmark manufacturing facilities are either certified or working towards certification to ISO 14001

      Benchmark has a well-developed environmental data collection system as part of the EMS, covering waste, water, energy, and emissions data from our sites.

We have identified and shared opportunities for continued improvement on energy efficiency company-wide and launched several global initiatives designed to reduce energy consumption in our facilities. We are continuously researching and designing innovative ways to boost efficiency, such as utilizing high-efficiency electrical equipment including LED and motion detector lighting, solar panels, and high-efficiency HVAC units.  We have been monitoring emissions and tracking energy reduction plans since 2012. As part of our increased focus on environmental sustainability, we are evolving this process with the goal of consolidating the reporting of all internal monitoring and tracking programs at the corporate level, as one of our top enterprise-wide initiatives.

 

 


 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     13

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

Furthermore, Benchmark’s environmental strategy focuses on the following areas:

 

 

 

 

Energy Efficiency – Benchmark has had an Energy Management and Saving Guidelines procedure in place since 2012; the Company is continuously researching and designing innovative ways to save energy, such as utilizing high efficiency electrical equipment including LED lighting and HVAC units. Moreover, all Benchmark manufacturing facilities are either currently certified or undergoing certification to ISO 14001, the international standard that specifies requirements for an effective environmental management system.

 

 

 

 

Recycling – Benchmark’s efforts in this area include reusing and recycling materials, purchasing recycled materials when feasible, utilizing recycling collection bins for batteries, aluminum, plastic, and paper in our offices, and recycling toner cartridges, and computer hardware.

 

 

 

 

Use of Resources – Where feasible and appropriate, Benchmark allows and encourages telecommuting through the utilization of web conferencing and teleconferencing technologies.

 

In addition, we are continuing to incorporate the following at our facilities where feasible:

 

 

 

 

Occupancy sensors, which reduce electrical needs when areas are unoccupied;

 

Water refill stations, which reduce plastic waste; and

 

 

 

 

 

 

 

High efficiency water systems and hands-free faucets and toilets, which limit water usage;

 

 

 

Environmentally friendly air filtration systems.

  

For more information on our ESG program or to read our inaugural 2021 Sustainability Report featuring Scope 1 and Scope 2 GHG emissions, please visit our website www.bench.com/sustainability

 

 

OUR PEOPLE

We believe in upholding the principle of human rights, worker safety and observing fair labor practices within our organization and within our supply chain. We are committed to ensuring ethical organizational governance, promoting business ethics and integrity, and embracing diversity and inclusion in the board room and throughout the organization. Through our social initiatives, we strive to protect and grow our people by advocating for Diversity, Equity & Inclusion (DEI), encouraging employee development, creating inclusive teams, fostering a work life balance, implementing community initiatives, and living our corporate values every day.

Benchmark’s DEI strategy is focused on creating a culture of belonging where team members can be their authentic selves and cultivate a workplace where everyone can succeed.  Our commitment to DEI starts at the top with the Company’s Board of Directors. In early 2021, the Board’s Nominating, Sustainability and Governance Committee committed to adding more diversity to our Board with the goal of adding continued female representation, as well as individuals with racially and/or ethnically diverse backgrounds as we continue to evolve our Board structure. In June 2021, the Company welcomed a new female director. In October 2021, Benchmark also appointed a new racially and ethnically diverse member of an underrepresented minority group to fill a vacant board position. We will continue to keep diversity in mind as we refresh our Board in the future.

As of December 31, 2021,

 

 

 

 

 

 


 

14    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

In January 2022, the executive leadership team selected 16 Benchmark team members to serve on the Company’s inaugural Inclusion Council. The Inclusion Council, with oversight from our Chief Executive Officer and our Chief Human Resources Officer, meets regularly to discuss the Company’s role in DEI and provide advice to integrate, inform and shape the DEI strategy at Benchmark. To advance these objectives, the Company increased the availability of training on topics such as anti-harassment, anti-discrimination and unconscious bias. The Company also conducted a global engagement and inclusion survey in the fall of 2021 to elicit feedback from employees, and is developing action plans for continuous improvement in the areas of leadership, communication, culture, inclusion, growth and development.

We believe that providing competitive total compensation, benefits and wellness resources to our people is vital to ensuring we attract and retain the best team in the industry.  We regularly review our compensation model to ensure fair and inclusive pay practices.  We provide a comprehensive and competitive benefits package that supports the physical and mental well-being of our workforce, including a focus on financial wellness. Common benefits offered include medical, wellness, dental and vision benefits, a 401(k)-match program, survivor benefits, and disability coverage.

Human capital management is also a top priority at Benchmark. The Human Capital and Compensation Committee is responsible for overseeing the Company’s human capital practices and management compensation philosophy, including incentive compensation and equity-based plans for executives.  In 2021, the responsibilities of the Human Capital and Compensation Committee expanded to include diversity, equity and inclusion oversight.  

We are also committed to ensuring that proper working conditions exist for the health and safety of our employees. Our commitment includes:

 

The implementation of Six Sigma, a process improvement tool, as well as visual management practices, to drive the development, implementation, and continuous improvement of the Occupational Health and Safety modules related to appropriate education, reporting, and controls.

 

Site-Level monitoring by an Environmental Health and Safety (EHS) manager or safety administrator that oversees procedures for workers to report observations of unsafe acts.

 

A robust Physical Security Policy that provides a framework to detect, deter, and mitigate risks that could jeopardize the company’s integrity, people, processes, or critical assets.

 

 

 

OUR COMMUNITY

One of the five tenets of Benchmark’s ESG Strategy is Our Community, and we are committed to having a positive impact on the communities in which we do business and in which our employees live. We strengthen our communities by supporting individual employees who volunteer with local community groups and by direct participation in philanthropic initiatives either at the corporate level or through our ONE Benchmark Foundation.

Benchmark is focused on making a positive impact in our communities through charity and fundraising, educational sponsorship, and local community development through various support groups, food drives, and partnerships with local schools and universities.  Some 2021 highlights include:

 

•Provided donations to Treasures 4 Teachers, a back-to-school supply drive to benefit local teachers and families within our community•Donated to help Junior Achievement of Arizona sponsor a STEM Summit held at Phoenix•College Prep, which delivered financial literacy and STEM career skills to 200 low-income students•Continued partnerships with organizations such as the Boys and Girls Club, Arizona food banks, Greater Phoenix Leadership’s Racial Equity Advancement Project, and more

Through our ONE Benchmark Foundation, which is funded by employee and company donations, we support Benchmark employees and humanitarian efforts around the world. Since its founding in 2017, the foundation has distributed funds and aid in seven countries to charities and employees in need.

 


 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     15

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

GOVERNANCE

Benchmark is committed to achieving excellence in our governance practices to establish a strong foundation for the long-term success of the Company. We emphasize a culture of accountability and conduct our business in a manner that is fair, ethical, and responsible to earn the trust of our stakeholders, including customers, employees, investors, partners, and regulators. We also maintain robust risk management programs to ensure compliance with applicable laws and regulations governing ethical business practices.

We believe that good corporate governance provides a strong foundation for ESG and is essential to the long-term success of the Company.  Our Board of Directors sets the tone for our company and has implemented strong governance practices, including independent directors and a strong commitment to diversity, equity and inclusion.  Our Board of Directors includes three standing committees: the Audit Committee, the Human Capital and Compensation Committee, and the Nominating, Sustainability and Governance Committee. The membership of these standing committees is also comprised entirely of independent directors.  The Board is also focused on and devotes substantial attention to matters of corporate responsibility and ESG, with direct oversight and sponsorship by the Nominating, Sustainability and Governance Committee.  The Nominating, Sustainability and Governance Committee oversees our governance practices including:

 

 

 

 

 

Commitment to conducting its business in a manner that is fair, ethical, and responsible and compliant with all applicable laws and regulations.

 

 

 

 

 

 

Regular review and, as appropriate, the updating of key policy documents in light of current regulations and best practices.

 

 

 

 

 

 

Ensuring the importance of considering potential director candidate’s diversity, including race, age, gender, and ethnic diversity, among other factors.

 

 

 

 

 

 

Ensuring management fulfills its ultimate responsibility to help create and foster the best possible work environment for everyone in the organization. To this end, we implemented a “Speak Up!” campaign designed to promote a positive and ethical organizational culture. We believe that each team member, regardless of position, shares in this responsibility, and we encourage all of them to “Speak Up!” with questions or concerns about actual or potential ethical issues, questions about company policies, suggestions about how we can make our organization better and to address any other concerns.

 

 

 

 

 

 

To facilitate open and honest communication, we have a user-friendly web portal and Helpline for the reporting of concerns. These tools include local phone numbers and language support in over 150 native languages.

In addition to Benchmark’s robust governance policies, Benchmark endorses the Responsible Business Alliance (RBA) Code of Conduct, which includes provisions derived from key international human rights standards including the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work and the UN Universal Declaration of Human Rights.  We also endorse EcoVadis, a provider of sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains that evaluates criteria across four themes:  environment, fair labor practices, ethics/fair business practices and supply chains.

Our accounting, financial, and IT reporting functions are subject to rigorous controls, and our Audit Committee actively oversees our enterprise risk management practices.  Under this process, our internal audit team coordinates with subject matter experts throughout the business to identify, monitor and mitigate material risks.

 

 

OUR COVID-19 RESPONSE

Since the start of the COVID-19 pandemic in 2020 and throughout 2021, the health and safety of Benchmark’s employees and their families has been our highest priority. In March 2020, Benchmark’s management team created a COVID-19 Task Force, comprised of a cross-functional advisory team of Company leaders committed to promoting the health and safety of our employees in accordance with the U.S. Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) guidelines. We also activated our Emergency Management Business Continuity Plan, which includes measures to respond to pandemic risks, in response to the COVID-19 pandemic. As part of our COVID-19 response, we implemented enhanced safety policies, procedures, and protocols to ensure a safe workplace for our employees. In 2021, we continued the evaluation and evolution of our flexible and possible remote working arrangements that began in 2020. Through the ONE Benchmark Foundation, we made donations in 2020 and 2021 to the families of employees impacted by COVID.  

Benchmark has played a crucial role with engineering and manufacturing services to help in the global fight against COVID-19, showing our commitment to being there when our customers, and those they serve, need us most – when it matters. We were a major contributor to essential businesses producing innovative medical devices to allow healthcare professionals to prevent, test, and treat the virus. Additionally, Benchmark provided high-quality design, manufacturing, and supply chain services for a transformational COVID-19 PCR testing product for DnaNudge called COVID Nudge, that yields results within an hour.

 

16    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Operation of Board of Directors and Committees, Attendance, Director Independence

 

We currently separate the roles of the Chairman of the Board and the CEO, who also serves as a member of the Board, to align the Chairman role with our independent Directors and to further enhance the independence of the Board from management. Our Chairman works closely with our CEO and General Counsel to set the agenda for meetings, facilitate information flow between the Board and management, and gain the benefit of the CEO’s Company-specific experience, knowledge, and expertise. The Board believes that this structure clarifies the individual roles and responsibilities of the CEO and the Chairman of the Board, streamlines decision-making and promotes accountability in the management of the Company.

The Board is responsible for establishing broad corporate policies, approving the strategic direction, setting capital allocation plans, and monitoring the Company’s overall performance. The Board’s primary responsibility is to oversee management and, in so doing, promote the best interests of the Company and its shareholders. The Board oversees the succession of key management employees, and the selection and appointment of the CEO and, subject to shareholder election, directors. It reviews and approves corporate objectives and strategies, overseas key strategic initiatives, such as those relating to ESG and human capital management, and evaluates significant policies and proposed major commitments of corporate resources. It participates in decisions having a potential major economic impact on the Company. Management keeps the Board informed of Company activity through regular written and oral reports and through presentations at Board and committee meetings.

Directors are elected annually by the shareholders and hold office until their successors are duly elected and qualified. Our Amended and Restated Bylaws (the “Bylaws”) provide for a Board of Directors comprised of five to nine members as determined from time to time by the Board. The Board has set the number of current directors at nine. All current directors are nominees for election at the Meeting.

NYSE rules require the Company to have a majority of independent directors. No director qualifies as independent under the rules unless the Board affirmatively determines they have no material relationship with the Company or its subsidiaries—directly, or as a partner, shareholder or officer of an organization that has a relationship with the Company. In evaluating each director’s independence, the Board considers the NYSE rules as well as all facts and circumstances deemed relevant. As of the date of this Proxy Statement, the Board has determined that each nominee, other than Mr. Benck, our President and CEO, is independent. The Board determined that no independent director has a material relationship with the Company or management, other than as a director or shareholder, and that none of the express disqualifications contained in the NYSE rules apply to any of them. In making this determination, the Board considered any relevant transaction, relationship and arrangement as required by the NYSE listing requirements.

The Board oversees an enterprise-wide approach to risk management. The Board seeks not only to understand the risks facing the Company and management’s approach to address them, but also actively decides on the levels of risk appropriate for the Company when designing and implementing its business strategy. In this process, risk is assessed throughout the business, focusing on six primary areas: financial, legal/compliance, operational/transactional, customer services/reputation, information technology/security and inherent (other) risks. In addition to reviewing risk with the Audit Committee at least annually, the independent directors discuss risk management during non-management executive sessions led by the Chairman of the Board.

In March 2020, the World Health Organization declared COVID-19 to be a pandemic. That same month, we formed a COVID-19 Task Force committed to promoting the health and safety of our employees around the globe.  Management has briefed the Board on the impact of and the Company’s response to the pandemic on numerous occasions, at special and regular Board meetings and through written communications and updates. These updates and communications focused on employee safety and protective measures, disruptions to the Company’s plant operations, supply chain challenges and impacts to end market demand. The Board expects management to continue keeping it regularly apprised of the effect of the pandemic on the Company, its operations and employees.

While the Board has ultimate oversight responsibility for the risk management process, committees of the Board have also been entrusted with responsibility for risk management. In particular, the Audit Committee focuses on assessing and mitigating financial reporting risk including internal controls as well as enterprise risk management and cyber security. The Audit Committee also receives an annual risk assessment report from the Company’s internal auditor and quarterly reports on identified risk areas. The Audit Committee also has oversight of compliance with legal and regulatory requirements and ethical standards, and evaluates the qualifications and independence of the Company’s outside auditors. The Audit Committee also receives quarterly cybersecurity updates from the Company’s Chief Information Officer.

The Human Capital and Compensation Committee is responsible for overseeing the Company’s human capital practices and management compensation philosophy, including incentive compensation and equity-based plans for executives. The Committee also reviews and makes recommendations on executive and director compensation as informed by engagement with shareholders and its third-party compensation consultant. In 2021, the responsibilities of the Human Capital and Compensation Committee expanded its role to include diversity, equity and inclusion oversight. The Nominating, Sustainability and Governance Committee, updated in 2021 from the Nominating and Governance Committee, is responsible for identifying and recommending to the Board individuals qualified to become Board members and makes recommendations to the Board concerning committee appointments. In assessing the appropriate composition of the Board, the Nominating, Sustainability and Governance Committee believes that directors should reflect diversity in the broadest sense, including geography, gender, ethnicity, viewpoint, education, skills, and professional experience. In October 2021, the Company appointed a new independent director to fill a vacant board position.  Ramesh Gopalakrishnan, who is a native of India, brings significant global operation and strategy expertise derived from executive leadership positions at several multinational companies. Mr. Gopalakrishnan’s addition to the Board is reflective of its evolving diversity, as he joins two previously appointed female directors.

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     17

 


PROPOSAL 1 — ELECTION OF DIRECTORS

 

The Nominating, Sustainability and Governance Committee also has direct oversight over the Company’s ESG policies and programs, including reviewing and evaluating its ESG plans and practices.

The Board held four meetings during 2021. Each director attended at least 75% of the total meetings of the Board and committees on which they served during their tenure thereon. Mr. Benck, who served as President and CEO and director of the Company, did not vote in committee meetings or participate in portions of Human Capital and Compensation Committee meetings that determined, or Board meetings that ratified, his compensation. The nonemployee directors regularly meet in executive session without members of management present, including the CEO. These sessions are typically held either before or after the Board’s regularly scheduled Board and committee meetings with the Chairman of the Board or respective committee chairs presiding. Additional executive sessions can be scheduled at the request of the nonemployee directors.

 

 

The Board has Audit, Human Capital and Compensation, and Nominating, Sustainability and Governance Committees. Each of the committees operates under a written charter approved by the Board, which can be found on our website at www.bench.com under “Investors—Corporate Governance.” The current members of these committees, and the number of committee meetings held in 2021, are as follows:

 

 

 

 

 

 

Director

 

  

Audit

 

 

  

Human Capital and

Compensation

 

  

Nominating, Sustainability

and Governance

 

 

David W. Scheible

 

 

  

 

 

 

  

 

  

 

 

Anne De Greef-Safft

 

  

 

 

 

 

 

 

 

 

  

  

 

 

Douglas G. Duncan

 

  

 

 

 

 

 

 

 

  

 

  

Chair

 

Robert K. Gifford

 

  

 

 

 

  

Chair

  

 

Ramesh Gopalakrishnan

 

 

 

 

 

 

 

 

 

Kenneth T. Lamneck

 

  

 

Chair

 

  

 

  

 

 

Jeffrey S. McCreary

 

  

 

 

 

  

 

  

 

 

Lynn A. Wentworth

 

  

 

 

 

 

 

 

 

  

 

  

 

Meetings held:

  

 

12

 

  

4

  

4

Role of Audit Committee

The principal function of the Audit Committee is to assist the Board in fulfilling its responsibility to oversee (i) management’s conduct of the Company’s financial reporting process (including management’s development and maintenance of systems of internal accounting and financial controls), (ii) the integrity of the Company’s financial statements, (iii) the Company’s compliance with legal and regulatory requirements and ethical standards, (iv) the qualifications and independence of the Company’s outside auditors, and (v) the performance of the Company’s internal audit function and the outside auditors. The committee also prepares the Report of the Audit Committee required by the rules of the SEC and included later in this Proxy Statement. Additional information regarding the functions performed by the committee is set forth below in such report. The Board has determined that Mr. Lamneck, who chairs the committee, Ms. Wentworth and Mr. Duncan each qualify as “audit committee financial experts” under the rules of the SEC. In addition, the Board has determined that all members of the Audit Committee are independent under SEC and NYSE rules applicable to audit committee members. An “audit committee financial expert” is defined as a person who has the following attributes: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves; (iii) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to the breadth and complexity of issues that can reasonably be expected in the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal controls and procedures for financial reporting; and (v) an understanding of audit committee functions.

Role of Human Capital and Compensation Committee

The principal functions of the Human Capital and Compensation Committee are to (i) oversee the Company’s human capital practices, including in the areas of diversity, equity and inclusion, as well as culture, talent management and organizational health, (ii) oversee the Company’s and management compensation philosophy, (iii) oversee the administration of the Company’s compensation plans, in particular the incentive compensation and equity-based plans (and, to the extent appropriate, plans of the Company’s subsidiaries), (iv) discharge the Board’s responsibilities relating to the compensation of the Company’s executives, (v) review and make recommendations on director compensation, and (vi) prepare the annual report on executive compensation included later in this Proxy Statement. The Board has determined that all members of the Human Capital and Compensation Committee are independent under SEC and NYSE rules applicable to compensation committee members. Additional information regarding the functions performed by the committee is set forth below in “Compensation Discussion and Analysis—Role of Human Capital and Compensation Committee.”

 

18    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


PROPOSAL 1 — ELECTION OF DIRECTORS

Role of Nominating, Sustainability and Governance Committee

The principal functions of the Nominating, Sustainability and Governance Committee are to (i) identify individuals qualified to become Board members and recommend such individuals to the Board for nomination for election to the Board, (ii) make recommendations to the Board concerning committee appointments, (iii) develop, recommend and annually review corporate governance guidelines for the Company and oversee corporate governance matters, such as progress toward the Company’s ESG initiatives, and (iv) coordinate an annual evaluation of the Board. The Board has determined that all members of the Nominating, Sustainability and Governance Committee are independent under NYSE rules applicable to nominating/corporate governance committees.

 

To be considered by the Nominating, Sustainability and Governance Committee, a director nominee should have experience as a board member or senior executive of a public company or nationally recognized private company. In addition to these requirements, the committee will also evaluate whether the nominee’s skills are complementary to those of incumbent Board members and the Board’s needs for operational, management, financial, international, technological or other expertise. The Board and the committee believe that Board membership should reflect diversity in its broadest sense, including geography, gender, ethnicity, viewpoint, education, skills and professional experience. In 2021, the committee added more diversity to our Board by adding a new racially and ethnically diverse member from an underrepresented minority group as we continue to evolve our Board structure. The Nominating, Sustainability and Governance Committee has an independent search firm to identify and screen candidates, perform reference checks, prepare a biography for each candidate for the committee’s review and coordinate interviews. The committee, the Chairman of the Board and executive officers interview candidates that meet the criteria, and the committee selects nominees who it determines are best-suited to actively engage in the oversight of the Company’s strategy and drive sustainable value creation for all shareholders. The committee will consider recommending for nomination to the Board candidates suggested by shareholders, taking into account all the factors and qualities described above, provided that recommendations are submitted and received by us at our principal executive offices at 56 South Rockford Drive, Tempe, Arizona 85281, with an appropriate biographical summary, in accordance with the requirements described below under “Date of Submission of Shareholder Proposals and Director Nominations.”

The Board does not have a written policy requiring members to attend annual shareholders meetings, although the Company expects that all of its directors will attend the Meeting. With the exception of Mr. Gifford, who had an inescapable conflict, all Board members attended the prior year’s annual meeting.

Certain Transactions

 

There were no Related-Party Transactions (as defined below) since the beginning of last year. The Board reviews any proposed Related-Party Transaction to which the Company would be a party to determine if it were in the best interests of our shareholders and the Company. Financial transactions, arrangements, relationships or any series of similar transactions, arrangements or relationships beyond the compensation described elsewhere in this Proxy Statement relating to Board service or employment and exceeding $120,000 in which a Related Party (as defined below) would have a direct or indirect material interest (Related-Party Transactions) are subject to Board review. “Related Parties” are directors, director nominees, executive officers, holders of 5% or more of our Common Shares and their immediate family members. Immediate family members are children, stepchildren, spouses, parents, siblings, stepparents, mothers-in-law, fathers-in-law, brothers-in-law, sisters-in-law, daughters-in-law, sons-in-law and any person, other than a tenant or domestic employee, in the household of a director, director nominee, executive officer or holder of 5% or more of our Common Shares.

The Board does not have a written policy regarding Related-Party Transactions and does not believe such a policy is necessary because the Board has not approved, and does not expect to approve, the Company’s engagement in any Related-Party Transactions other than in rare circumstances. Any Related-Party Transaction would be considered based on facts and circumstances at the time. After review, the Board would decide in good faith whether to approve the transaction.

Human Capital and Compensation Committee Interlocks and Insider Participation

 

The members of the Human Capital and Compensation Committee during 2021 were Messrs. Gifford (Chair), McCreary, Scheible and Ms. De Greef-Safft. Each member of the committee is independent, and no member was ever employed by the Company. None of our directors has interlocking or other relationships with other boards, compensation committees or our executive officers that require disclosure under Item 407(e)(4) of Regulation S-K.

 

 

 

 

 

 

 

 

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     19

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

 

 

 

 

The discussion below includes a review of our compensation decisions with respect to 2021 for our “Named Executive Officers,” which under SEC guidelines includes our principal executive officer, our principal financial officer, and our three other most highly compensated executive officers. Our Named Executive Officers for 2021 were:

 

 

 

 

 

 

Jeffrey W. Benck

President, Chief Executive Officer (CEO)

Roop K. Lakkaraju

Executive Vice President, Chief Financial Officer (CFO)

Michael D. Buseman

Executive Vice President, Chief Operating Officer

Stephen J. Beaver

Senior Vice President, General Counsel and Chief Legal Officer, Corporate Secretary

Robert B. Crawford

Senior Vice President, Chief Revenue Officer

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

  Compensation Discussion and Analysis

 

20

 

 

 

Philosophy and Objectives

 

22

 

 

 

Role of Human Capital and Compensation Committee

 

23

 

 

 

Role of Management

 

23

 

 

 

Role of Independent Compensation Consultant

 

23

 

 

 

Competitive Market Review

 

24

 

 

 

Timing of Compensation Decisions

 

24

 

 

 

2021 Compensation

 

24

 

 

 

Base Salary Compensation

 

24

 

 

 

Annual Short-Term Incentive Compensation

 

25

 

 

 

Long-Term Incentive Compensation

 

26

 

 

 

Other Compensation Practices, Polices and Guidelines

 

28

 

 

 

Share Ownership Guidelines

 

28

 

 

 

Hedging, Short Sales and Pledging Policies

 

28

 

 

 

Deferred Compensation Benefits

 

28

 

 

 

Retirement Benefits

 

28

 

 

 

Perquisites and Personal Benefits

 

28

 

 

 

Analysis of Compensation Risk

 

29

 

 

 

Certain Tax Considerations

 

29

 

 

 

 

 

 

 

 

 

20    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

Executive Summary

 

2021 Business Overview

The Company executed well in an unprecedented operating environment and rapidly adjusted to meet the fluid demand needs of our customers.  This required tremendous effort across all functions of our business especially our front-line design and manufacturing teams. Despite the backdrop of the global pandemic and global supply chain challenges, we made tremendous progress throughout the year in advancing our 2021 strategic initiatives: grow revenue, invest in sustainable infrastructure and talent, and grow earnings faster than revenue. In 2021, we delivered year-over-year revenue growth of 10%, aligned investments to support customer growth and grew earnings four times faster than revenue for the full year demonstrating the leverage in our business model.

2021 Compensation Highlights

We believe our pay is well aligned with performance and that our structure maintains an appropriate balance between our long-term and short-term performance, creating a positive relationship between our operational performance and shareholder return. In accordance with our compensation philosophy and based on our performance, the Human Capital and Compensation Committee took the following actions in 2021:

 

Base Salaries: We reviewed base salaries for our Named Executive Officers in February 2021 and provided a modest increase to the salaries of our Named Executive Officers based on market data, performance and internal reviews.

 

Annual Performance-Based Incentive Awards: Our Named Executive Officers earned annual incentives above target consistent with our financial results based on the achievement of performance related to Revenue, Adjusted Operating Income (as defined below) and our cash conversion cycle;

 

Long-Term Equity-Based Incentives:  We maintained our practice of granting median level grants with a combination of performance-based restricted stock units (“PSUs”) and restricted stock units (RSUs) to align the compensation of our Named Executive Officers with the creation of shareholder value and to maintain our targeted level of at-risk compensation:

 

2021-2023 PSU awards: In the first quarter of 2021, the Company issued long-term equity-based incentive compensation awards consisting of 50% PSUs and 50% in RSUs. PSUs are earned based on the achievement of performance related to Revenue, Operating Income Margin and Return on Invested Capital (“ROIC”) goals as outlined in the Company’s three-year strategic plan.

 

One-time performance-based equity award: In the first quarter of 2021, the Company also issued additional performance-based equity awards consisting of 100% PSUs, which will be earned based on the achievement of performance related to Revenue, Operating Income Margin and ROIC goals over a two-year performance period and based on our target Mid-Term Model provided to investors. This grant is intended to keep senior leadership focused on driving mid- to long-term shareholder value as well as support our leadership retention objectives. The target value of this award is equal to 50% of the PSU awards that were granted for the 2020-2022 performance period.

 

2019-2021 PSU awards: The Company issued no shares under the 2019 PSU three-year awards, for which the performance period ended in December 2021, because the 2019 PSU award metrics were not achieved.

Best Compensation Practices and Policies

We also believe the following practices and policies within our program promote sound compensation governance and are in the best interests of our shareholders and executives:

What We Do

What We Don’t Do

Emphasize variable pay over fixed pay, with a significant portion tied to our financial results

No tax gross ups other than for qualified relocation expenses

Maintain stock ownership guidelines

No repricing or exchange of underwater options without shareholder approval

Maintain anti-hedging and anti-pledging policies

No option or stock appreciation rightsgranted below fair market value

Provide for “double-trigger” equity award vesting and severance benefits upon a change in control

No supplemental executive retirement plans

Use an independent compensation consultant

No significant perquisites

 


 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     21

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

Evaluation of Say-on-Pay Advisory Vote

Each year, we carefully consider the results of our shareholder say-on-pay vote from the preceding year. We also consider the feedback we receive from our investors throughout the year on topics including Company strategy and performance, governance, and executive compensation. At our 2021 annual meeting, the majority of our shareholders supported our say-on-pay proposal, with approximately 80% voting in favor of the Named Executive Officer compensation described in the 2021 proxy statement. Given this result, in addition to the shareholder feedback we received over the course of 2021, the Human Capital and Compensation Committee determined not to change its compensation philosophy or to significantly alter our compensation practices in 2022. We value the opinions of our shareholders and look forward to a continued, open dialogue on compensation matters and other issues relevant to our business.

What Guides Our Program

Philosophy and Objectives

Our executive compensation program is designed to:

 

attract, retain and reward the performance of our management talent;

 

incentivize the achievement of the Company’s strategic plan, and both short- and long-term operating objectives;

 

be transparent, fair and objective;

 

encourage the taking of prudent business risks for appropriate potential long-term benefits while avoiding excessive, unnecessary or unwise risk; and

 

encourage smart investment and prudent deployment of capital.

Primary Components of Compensation

The primary components of our executive compensation program, described in more detail below, are (i) base salary, (ii) annual performance-based incentive compensation, and (iii) long-term incentive compensation comprised of RSUs and PSUs:

 

Base Salary, which pays a set level of cash income to the executive.

 

Annual Performance-Based Incentive Award, which pays a variable cash award to reward achievement of short-term operational performance goals, which in 2021 was based on (i) total revenue, (ii) Adjusted Operating Income (as defined below), and (iii) improvements in our cash conversion cycle.

 

Long-Term Equity-Based Incentives, which are granted using a mix of equity as follows:

 

PSUs, designed to encourage the creation of long-term shareholder value and reward performance, subject to the achievement of specific long-term financial objectives over a specified performance period, which typically have a three-year performance cycle.

 

RSUs, which typically vest over a four-year period, are awarded to retain management, and permit each executive to steadily build an ownership stake in the Company to encourage the creation of long-term shareholder value.

Two of the four components are “at-risk” in that they only have value if the Company’s financial objectives are achieved. The Company believes that the design of these at-risk components closely aligns executive pay with performance beneficial to the Company and its shareholders over the short and long term.

The Company’s total target compensation opportunity is generally set in the median range of market compensation survey data and a peer group of companies (our “Peer Group” is further detailed below), which was refined by the Human Capital and Compensation Committee in 2021 and is reviewed annually to ensure an appropriate representative peer group. Our compensation program is designed to deliver above-median total compensation if above-median performance is achieved and below-median total compensation for below-median performance.

Any vesting of PSUs depends on the Company’s achievement of financial goals set by the Human Capital and Compensation Committee and derived from the Company’s overall financial objectives, which for PSUs awarded in 2021 with a performance period ending in December 2022 and December 2023, included goals relating to:

 

Revenue: The Revenue shall be the total revenue as reported in the Company’s consolidated financial statements for the measurement year.

 

Operating Income Margin: The Operating Income Margin shall be the operating income as reported in the Company’s consolidated financial statements for the measurement year, excluding one-time, non-recurring, non-operational gains or charges and amortization of intangible assets (“Adjusted Operating Income”), divided by the Revenue; and

 

22    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

ROIC: The ROIC shall be the operating income as reported in the Company’s consolidated financial statements for the measurement year, excluding one-time, non-recurring, non-operational gains or charges and amortization of intangible assets and stock compensation expense, adjusted for taxes (i.e., multiplied by one minus the tax rate), divided by the quarterly average of invested capital by the Company during the performance period, as described below. The tax rate used shall equal the book tax rate for the Company for the measurement year, excluding all discrete items. The quarterly average of invested capital shall equal the average of invested capital on each of last five quarterly consolidated balance sheets for the Company during the performance period (opening balance sheet (fourth quarter of year prior to measurement year) and first quarter, second quarter, third quarter and fourth quarter balance sheets of the measurement year). Invested capital for each balance sheet shall equal the sum of total interest-bearing debt and finance leases (both current and long-term), minority interest, and shareholders’ equity as of the date of each balance sheet less cash and cash equivalents and restricted cash at each balance sheet date.

The Human Capital and Compensation Committee believes that revenue growth, operating margin and the efficient use of invested capital are key long-term determinants of shareholder value. The PSU targets are designed to enhance focus on performance across these areas ensuring alignment between management’s compensation and the creation of shareholder value.

Role of Human Capital and Compensation Committee

The Human Capital and Compensation Committee is responsible for reviewing and approving all salary and annual incentive compensation paid to officers of the Company who are subject to Section 16 of the Exchange Act (“Section 16”), including, among others, our CEO and the other Named Executive Officers listed below in the Summary Compensation Table. The Human Capital and Compensation Committee recommends, and the Board of Directors approves the CEO’s compensation. The Human Capital and Compensation Committee also approves the equity incentives provided to our executives, as well as most other employees (except for certain employees not subject to Section 16 for whom the CEO has been delegated authority to make limited awards). During 2021, the Human Capital and Compensation Committee’s charter was updated to also include the oversight of the Company’s human capital programs including diversity, equity and inclusion, as well as culture, talent management and organizational health.

The Human Capital and Compensation Committee annually reviews and approves operating and financial goals for the CEO, as well as evaluates the CEO’s performance against goals set for the period year. The CEO’s performance against pre-determined goals is a significant factor in the Human Capital and Compensation Committee’s and the Board of Director’s setting of the CEO’s compensation package.

Additional information with respect to the authority of the committee is set forth above under “Operation of Board of Directors and Committees, Attendance, Director Independence.”

Pursuant to its authority under its written charter approved by the Board, the Human Capital and Compensation Committee may form and delegate authority to subcommittees of the Human Capital and Compensation Committee. Under its charter, the Human Capital and Compensation Committee may also delegate its authority with respect to equity awards to the extent permitted by the Texas Business Organizations Code, except that the Human Capital and Compensation Committee shall approve all awards of equity-based compensation to any officer subject to Section 16.

Role of Management

Regarding most compensation matters, including executive and director compensation, management provides recommendations to the Human Capital and Compensation Committee; however, the Human Capital and Compensation Committee does not delegate any of its responsibilities to others in setting compensation for the executive officers. The CEO annually reviews the performance of the other executive officers and presents his conclusions and recommendations as to salary adjustments, annual incentive target amounts, and annual equity awards to the Human Capital and Compensation Committee for its consideration. The Human Capital and Compensation Committee exercises its discretion in determining any adjustments or awards to the Company’s officers, including the Named Executive Officers. The Human Capital and Compensation Committee does not take into account any recommendations from the CEO regarding his own compensation.

Role of Independent Compensation Consultant

The Human Capital and Compensation Committee has retained Pearl Meyer & Partners, LLC to serve as its independent compensation consultant (the “Consultant”) and perform reviews from time to time of our executive compensation practices, as well as the compensation of our Board of Directors. The Consultant advised the Human Capital and Compensation Committee on certain compensation matters relating to 2021 compensation of our executive officers and directors and has performed such a review in connection with the Human Capital and Compensation Committee’s decisions relating to 2021 compensation. The Consultant does not provide any services on behalf of management and does not have any potential business conflicts with its role as an independent advisor.


 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     23

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

Competitive Market Review

In setting executive compensation, the Human Capital and Compensation Committee considers all factors it deems relevant. The committee also considers data and recommendations presented by the Consultant or management based on market data that provide information on the level of the total target compensation (i.e., salary, annual incentive and long-term incentive compensation) paid to similarly positioned executives at companies in the Peer Group. To determine the amount of compensation to be paid to each of our executives, the committee performs an evaluation, including a review of the following (without assigning specific weight to each factor):

 

each executive’s performance, responsibilities and time in role;

 

market survey data;

 

relativity in pay among the Company’s executive officers;

 

comparability of each executive’s role to executives named in Peer Group proxy statements;

 

general compensation trends;

 

the Company’s financial position; and

 

for executives other than the CEO, the recommendations of the CEO.

The Human Capital and Compensation Committee has not established a set formula or other quantitative policy for allocating between long-term and immediately payable compensation, cash and noncash compensation, setting the amount of equity awards or allocating equity awards between stock options, RSUs and PSUs. Rather, the Human Capital and Compensation Committee considers compensation in total for each individual, and may, accordingly, weight components differently from year-to-year.

Each year, the Human Capital and Compensation Committee evaluates peers from publicly traded companies that are major competitors or customers. The committee seeks to select peer companies that are comparable to Benchmark based on various criteria, including revenue, market capitalization, similar industry affiliation, scope of global operations and the belief that these companies compete for similar executive talent. The Human Capital and Compensation Committee refined the Peer Group for 2021 to include entities with revenues between $1.0 billion and $8.2 billion and median revenue of $2.3 billion, and focused on manufacturers and companies in the electrical components, information technology, semiconductor components and electronics manufacturing services industries.

The Peer Group for the fiscal year 2021 compensation decisions consisted of the following companies:

 

       Belden, Inc.

       Celestica Inc.

       Curtiss-Wright Corporation

•       Fabrinet

       Kimball Electronics, Inc.

       Littlefuse, Inc.

•       Methode Electronics, Inc.

       OSI Systems, Inc.

       FLIR Systems, Inc.

       Plexus Corp.

       II-VI Incorporated

       Sanmina Corporation

       Insight Enterprises, Inc.

       ScanSource, Inc.

       Itron, Inc

       TTM Technologies, Inc.

Timing of Compensation Decisions

In order to reinforce performance feedback through compensation and to comply with certain regulations impacting performance-based awards, the Human Capital and Compensation Committee makes executive compensation decisions in the first quarter of each year. This allows for an assessment based on a focal point affording the opportunity to consider the relative contribution of each of the executives. The committee reviews and approves equity awards to all eligible employees, including executive officers, once a year, on the date of the committee’s regularly scheduled first quarter meeting. When used, stock options have an exercise price equal to the closing price of the Common Shares on the date of award. The Company believes that the practice of granting stock-based awards in the first quarter of each year is reasonable when followed on a consistent basis each year and reduces the risk of inadvertently timing the grant of such awards with the release of material nonpublic information.

 

2021 Executive Compensation Program in Detail

 

Base Salary

The Human Capital and Compensation Committee reviews base salaries of the Named Executive Officers annually. In making salary determinations, the committee considers salary median range for persons in comparable positions in the Peer Group, the executive’s experience and scope of responsibility, the committee’s assessment of the executive’s individual past and potential future contribution to the Company’s results (without assigning a specific weight to each factor) as well as the recommendations of the CEO (as to executive officers other than the CEO). During its review of base salaries for executives for 2021, the committee primarily considered market data provided by the Consultant, the results of a review of each executive’s compensation relative to the Company’s other executive officers, and each executive’s individual performance. In March 2021, base salary increases for our Named Executive Officers varied from 3% to

 

24    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


COMPENSATION DISCUSSION AND ANALYSIS

 

6%, due to merit and competitive conditions. The Human Capital and Compensation Committee believed that base salaries for our Named Executive Officers were appropriately aligned with peer group and market comparisons.

 

PHOENIXHARBOUR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Named Executive

 

 

2020 Base Salary

 

 

 

2021 Base Salary

 

 

Percentage Increase Compared to 2020

 

 

Jeffrey W. Benck

 

$

 

900,000

 

 

$

 

927,000

 

 

 

3.0

 

%

Roop K. Lakkaraju

 

$

 

470,000

 

 

$

 

484,100

 

 

 

3.0

 

%

Michael D. Buseman

 

$

 

450,000

 

 

$

 

463,500

 

 

 

3.0

 

%

Stephen J. Beaver

 

$

 

365,000

 

 

$

 

386,900

 

 

 

6.0

 

%

Robert B. Crawford

 

$

 

330,000

 

 

$

 

346,500

 

 

 

5.0

 

%

Annual Incentives

The purpose of the executive annual incentive compensation plan is to align the interests of executive officers with shareholders by motivating the achievement of superior operational and financial performance that increases shareholder value. Target annual incentive award opportunities are established based on a percentage of each executive officer’s base salary earned during the year. Incentive targets for 2021 were set by the Human Capital and Compensation Committee in the first quarter of 2021.

The following table sets forth the potential 2021 threshold, target and maximum award opportunities, as a percentage of salary, for the Named Executive Officers based on the Company’s achievement of the performance goals described below. No award is earned below threshold; achievements between the achievement different levels (i.e., between threshold and target, and target and maximum) are paid ratably:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Potential 2021 Incentive Payments as a

Percentage of Salary Related to

Achievement of Performance Goals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Named Executive

 

Threshold

 

 

Target

 

 

 

Maximum

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeffrey W. Benck

 

 

57.5

%

 

 

 

 

115.0

%

 

 

 

 

230.0

%

 

Roop K. Lakkaraju

 

 

40.0

%

 

 

 

 

80.0

%

 

 

 

 

160.0

%

 

Michael D. Buseman

 

 

37.5

%

 

 

 

 

75.0

%

 

 

 

 

150.0

%

 

Stephen J. Beaver

 

 

30.0

%

 

 

 

 

60.0

%

 

 

 

 

120.0

%

 

Robert B. Crawford

 

 

30.0

%

 

 

 

 

60.0

%

 

 

 

 

120.0

%

 

The total incentive award is determined according to the level of achievement of the aggregate corporate performance goals. The maximum incentive bonus for these executive officers was 200% of target.

Our practice is to award cash-based incentive bonuses based on the attainment of corporate performance goals. The below table sets forth the threshold, target and maximum performance goals for the annual incentive plan comprised of (i) Revenue, (ii) Adjusted Operating Income, and (iii) Cash Conversion Cycle, weighted 45%, 40% and 15% respectively. Each plan component is assessed independently with respect to 2021 financial results of the Company. The Human Capital and Compensation Committee believes these performance goals align with the Company’s continued focus on driving strategic initiatives of revenue and earnings growth while managing working capital responsibly. The Annual Incentive targets are designed to enhance focus on performance across these areas ensuring alignment between management’s compensation and the creation of shareholder value.


 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     25

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Performance Goals

 

 

 

 

 

 

 

 

 

 

 

 

Objective Level

 

 

Revenue

 

 

 

Adjusted

Operating

Income

 

Cash

Conversion

Cycle(1)

 

 

 

 

 

 

 

 

 

 

 

 

Threshold

 

$

2.050 billion

 

 

$

56.0 million

 

 

83 days

 

Target

 

$

2.155 billion

 

 

$

70.2 million

 

 

81 days

 

Maximum

 

$

2.370 billion

 

 

$

108.6 million

 

 

67 days

 

Actual

 

$

2.255 billion

 

 

$

68.7 million

 

 

70 days

 

Achievement to Target

 

 

146.81%

 

 

 

95.82%

 

 

178.99%

 

 

 

(1)

Represents the average of the cash conversion cycle (accounts receivable days plus contract asset days and inventory days less accounts payable and advance payments from customers days) calculated as of the end of each of the four quarters ended December 31, 2021.

 

At its regular first quarter 2022 meeting, the Human Capital and Compensation Committee determined the extent to which the 2021 performance goals were achieved and approved the amount to be paid to each executive. The Human Capital and Compensation Committee determined that the Company exceeded the target for Revenue, exceeded target for Cash Conversion Cycle and was slightly below the target for Adjusted Operating Income, as described above. The table below sets forth the incentive award earned and the corresponding percentage of 2021 earned salary that the amount represents based on the results described above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of Cash Incentive Earned

 

 

 

 

% of Earned Base Salary

 

 

Jeffrey W. Benck

 

 

 

 

$

1,388,113

 

 

 

 

 

150.9

%

(1)

Roop K. Lakkaraju

 

 

 

 

$

504,281

 

 

 

 

 

105.0

%

(2)

Michael D. Buseman

 

 

 

 

$

452,645

 

 

 

 

 

98.4

%

(3)

Stephen J. Beaver

 

 

 

 

$

300,018

 

 

 

 

 

78.7

%

(4)

Robert B. Crawford

 

 

 

 

$

269,350

 

 

 

 

 

78.7

%

(4)

 

(1)

Mr. Benck’s incentive payment consisted of the following percentages of base salary for each performance goal: 76.0% for revenue, 44.0% for Adjusted Operating Income and 30.9% for cash conversion cycle.

(2)

Mr. Lakkaraju’s incentive payments consisted of the following percentages of base salary for each performance goal: 52.8% for revenue, 30.7% for Adjusted Operating Income and 21.5% for cash conversion cycle.

(3)

Mr. Buseman’s incentive payments consisted of the following percentages of base salary for each performance goal: 49.6% for revenue, 28.7% for Adjusted Operating Income and 20.1% for cash conversion cycle.

(4)

Messrs. Beaver’s and Crawford’s incentive payments consisted of the following percentages of base salary for each performance goal: 39.6% for revenue, 23.0% for Adjusted Operating Income and 16.1% for cash conversion cycle.

Long-Term Equity-Based Incentive Program

The Human Capital and Compensation Committee believes that our long-term equity-based incentive program focuses executives on key performance metrics that align with long-term shareholder value creation and the Company’s long–term strategic plan, establishes a direct link between compensation and the achievement of long-term financial objectives, and facilitates an increased equity ownership by our executives. In the first quarter of 2021, the committee awarded executive officers a combination of RSUs and PSUs under the 2019 Omnibus Plan as further described below.

2021 Awards

The long-term equity-based incentive compensation awards made in the first quarter of 2021 consisted of 50% of the total value awarded in PSUs and 50% in RSUs.

PSUs—The committee believes the PSUs, which are subject to the achievement of measurable, absolute financial goals, enable management to build a meaningful ownership stake in the Company to encourage long-term strategic thinking and the avoidance of unnecessary or excessive risk taking. The financial goals for the 2021 grants were set by the committee and relate to the achievement of performance related Revenue, Operating Income Margin and ROIC goals as outlined in the Company’s three-year strategic plan. Achievement of these goals will be assessed at the end of the performance period. Each metric will be weighted and assessed equally and independently. The number of PSUs that will ultimately be earned will not be determined until the end of the

 

26    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


COMPENSATION DISCUSSION AND ANALYSIS

 

corresponding performance periods, and may vary from as low as zero to as high as 2.5 times the target number depending on the level of achievement of the performance goals.

RSUs—Long-term equity-based incentive compensation awards include time-based awards, which typically vest over four years, to improve retention of executive officers and to enable a steadily growing ownership stake in the Company that encourages long-term strategic performance.

To determine the awards for each executive officer, the committee evaluated each executive officer’s performance and responsibilities, and also considered market data, relative pay among the Company’s executive officers and other factors (without assigning a specific weight to each factor). The evaluation was made with input from our CEO, and also factored in the future potential contribution from each executive officer. Although management recommended the number of shares to be covered by equity awards granted to employees, the committee approved the grant of all equity awards and did not delegate the timing of such grants. Equity award grants to our CEO and other executive officers are not made automatically each year. The amount and terms of equity awards already held by executives generally are not significant factors in the committee’s determination of whether and how many equity awards should be granted to the executive officers.

The actual number of PSUs and RSUs granted is calculated by dividing the dollar value of the award by the closing price of the Company’s stock on the equity award grant date. The closing price of the Company’s stock on February 19, 2021 (the date of the grant) was $28.60. The table below shows the target PSUs and RSUs awarded for fiscal 2021 for each of the named executive officers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 PSUs

 

 

 

2021 RSUs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

# of Units

 

 

 

 

Grant Date

$ Value

 

 

 

# of Units

 

 

 

 

Grant Date

$ Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeffrey W. Benck

 

 

61,189

 

 

 

$

 

1,750,000

 

 

 

 

61,189

 

 

 

$

 

1,750,000

 

 

 

Roop K. Lakkaraju

 

 

17,483

 

 

 

$

 

500,000

 

 

 

 

17,483

 

 

 

$

 

500,000

 

 

 

Michael D. Buseman

 

 

14,179

 

 

 

$

 

406,000

 

 

 

 

14,179

 

 

 

$

 

406,000

 

 

 

Stephen J. Beaver

 

 

11,836

 

 

 

$

 

339,000

 

 

 

 

11,836

 

 

 

$

 

339,000

 

 

 

Robert B. Crawford

 

 

10,601

 

 

 

$

 

303,000

 

 

 

 

10,601

 

 

 

$

 

303,000

 

 

 

 

One-Time Performance-Based Equity Award

In the first quarter of 2021, the Company also issued an additional performance-based equity awards consisting of 100% PSUs, which will be earned based on the achievement of performance related to Revenue, Operating Income Margin and ROIC goals over a two-year performance period based on our target Mid-Term Model.  This grant is intended to keep senior leadership focused on driving mid- to long-term shareholder value as well as support our leadership retention objectives. The actual number of PSUs granted is calculated by dividing the dollar value of the award by the closing price of the Company’s stock on the equity award grant date. The closing price of the Company’s stock on February 19, 2021 (the date of the grant) was $28.60. The table below shows the target PSUs for each of the named executive officers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-Time PSUs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

# of Units

 

 

 

 

Grant Date

$ Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeffrey W. Benck

 

 

30,595

 

 

 

$

 

875,000

 

 

 

Roop K. Lakkaraju

 

 

8,742

 

 

 

$

 

250,000

 

 

 

Michael D. Buseman

 

 

6,889

 

 

 

$

 

197,000

 

 

 

Stephen J. Beaver

 

 

5,595

 

 

 

$

 

160,000

 

 

 

Robert B. Crawford

 

 

5,035

 

 

 

$

 

144,000

 

 

 

 

2019 PSU Award Results

The below table sets forth the threshold, target and maximum performance goals for the 2019 PSU three-year awards comprised of (i) Revenue, (ii) Operating Income Margin, and (iii) ROIC, weighted in equal thirds. Each plan component is assessed independently with respect to 2021 financial results of the Company.

 

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     27

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PSU Performance Goals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Objective Level

 

 

Revenue

 

 

 

Operating

Income Margin

 

 

ROIC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Threshold - 50%

 

$

2.500 billion

 

 

 

4.50%

 

 

 

11.00%

 

 

Target - 100%

 

$

2.925 billion

 

 

 

5.10%

 

 

 

13.00%

 

 

Maximum - 250%

 

$

3.375 billion

 

 

 

5.70%

 

 

 

15.00%

 

 

Actual

 

$

2.255 billion

 

 

 

3.00%

 

 

 

8.60%

 

 

At its regular first quarter 2022 meeting, the Human Capital and Compensation Committee determined the threshold performance goals for the 2019 PSU awards were not achieved and, therefore, no shares were approved or issued under such awards.

 

Other Compensation Practices, Polices and Guidelines

 

Share Ownership Guidelines

Our Named Executive Officers are subject to a share ownership requirement implemented in 2008 and last revised August 2021. According to that policy and while employed at the Company, within five years of becoming a Section 16 Officers under SEC guidelines, these senior officers must retain 20% of each vesting of RSUs until they meet the minimum ownership threshold of qualifying shares having a market value of at least 3x annual base salary for the CEO and 2x annual base salary for the other Named Executive Officers. Once the minimum ownership threshold is achieved, the threshold number of shares must be retained, and the officer remains in compliance despite any decrease in the market value of the Common Shares or any increase in base salary. All Named Executive Officers are in compliance with this ownership requirement or have not been with the company five years and are progressing toward the required amount.

Hedging, Short Sales and Pledging Policies

Directors and executives are prohibited from pledging, hedging, selling short or otherwise engaging in speculative practices regarding the Company’s securities.

Deferred Compensation Benefits

In order to attract and retain key employees, the Company established the Benchmark Electronics, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”), which allows certain designated employees, including our Named Executive Officers, the opportunity to defer, on a pretax basis, their salary, bonus awards, and other specified compensation and to receive the deferred amounts, together with an investment return (positive or negative), either at a predetermined time in the future or upon termination of employment with the Company. The Company intends that the Deferred Compensation Plan will at all times be maintained on an unfunded basis for federal income tax purposes under the Code and be administered as a nonqualified ‘‘top-hat’’ plan exempt from the substantive requirements of the Employee Retirement Income Security Act. All contributions by employees to the Deferred Compensation Plan, as well as any contributions by the Company, are fully vested upon contribution.

Retirement Benefits

All employees in the United States, including the executive officers, are eligible to participate in the Company’s 401(k) Employee Savings Plan (the “Savings Plan”). The Savings Plan is a defined contribution tax-qualified retirement savings plan pursuant to which employees are able to contribute a portion of their eligible cash compensation to the Savings Plan and the Company provides matching cash at 50% of eligible employee contributions up to 4% upon hire. All contributions by employees to the Savings Plan, as well as any matching contributions by the Company, are fully vested upon contribution.

Perquisites and Personal Benefits

The Company historically has offered only minimal perquisites or other personal benefits to executive officers, consisting of a portion of the cost of financial planning services, health club memberships and annual physical exams.


 

28    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


COMPENSATION DISCUSSION AND ANALYSIS

 

 

Analysis of Compensation Risk

Periodically our Human Capital and Compensation Committee analyzes the potential risks posed by the Company’s compensation programs to determine whether the programs might encourage the executive officers to take unnecessary or excessive risks, or whether the programs might encourage the manipulation of reported earnings. As part of its analysis the committee also considers mitigating factors and controls:

 

 

 

 

Component

 

  

Potential Risk

 

  

Mitigating Factors

 

Base Salary

  

 

•    Increase in fixed expense.

•    Retention challenges if below market levels.

 

  

•    Management of expenses and increases.

•    Annual market surveys.

 

  

 

  

 

Annual Incentive Plan

  

 

•    Imprudent risk taking to maximize short-term reported financial results.

•    Short term operating income optimization without regard for longer term results.

 

  

•    Internal financial controls.

•    Award caps.

•    Tied to independently audited results.

 

  

 

  

 

Long-Term

Equity-Based

Incentive Plans

  

•    Imprudent risk taking to maximize short-term stock price.

•    Earnings manipulation.

  

 

•    Long-term incentive awards at risk.

•    Share ownership guidelines.

•    Vesting periods.

•    Internal financial controls. Independent audit.

 

 

  

 

  

 

Health & Insurance

Benefits

  

•    Increase in fixed expense.

•    Retention challenges if not market competitive.

  

 

•    Management of expenses.

•    Annual market surveys.

•    Strategic plan design to minimize cost escalations and consumer driven design components.

 

 

  

 

  

 

 

Retirement Benefits

(401k and Deferred

Compensation Plans)

 

  

•    Increase in fixed expense.

•    Retention challenges if not market competitive.

•    Legal compliance risks.

  

•    Management of expenses.

•    Limited nonqualified retirement benefits.

•    Third-party professional advisors.

 

  

 

  

 

Severance Plans

  

•    Increase in fixed expense.

  

 

•    Limitations within employment, severance and change of control agreements.

•    Benefit limits.

 

 

  

 

  

 

 

Perquisites &

Expatriate Benefits

 

  

•    Increase in fixed expense.

•    Retention challenges if not market competitive.

  

•    Management of expenses.

•    Annual market surveys.

 

Overall, we believe that the Company’s compensation programs include an appropriate mix of fixed and variable features, short-term and long-term incentives and centralized oversight. Based on this, the Human Capital and Compensation Committee has determined that our compensation program is unlikely to motivate inappropriate risk-taking.

Certain Tax Considerations

Beginning with our 2018 tax year, Section 162(m) of the Code (“Section 162(m)”) generally prohibits a public company from taking an income tax deduction for compensation over $1 million paid to the principal executive officer, the principal financial officer and any one of the three highest paid executive officers as of the close of the applicable taxable year. Although, the tax benefits associated with performance-based compensation programs previously allowed under 162(m) generally have been eliminated, the Human Capital and Compensation Committee believes that a pay-for-performance model incentivizes our executive officers to achieve objectives that are aligned to the creation of shareholder value, irrespective of tax deductibility.

 

 

 

 

Benchmark Electronics, Inc.      •   2022 Proxy Statement         Benchmark.     29

 


HUMAN CAPITAL AND COMPENSATION COMMITTEE REPORT

 

 

The Human Capital and Compensation Committee operates under a written charter approved by the Board of Directors. As required by the charter, each member of the committee is independent, and no member of the committee has any interlocking or other relationships with the Company.

The committee administers the Company’s executive compensation program. Among other things, the committee is responsible for:

 

establishing the compensation of our CEO, which is then ratified by the full Board;

 

reviewing and approving the compensation of the Named Executive Officers other than the CEO as proposed by the CEO;

 

administering the Company’s employee benefit plans; and

 

overseeing the Company’s human capital programs, including diversity, equity and inclusion, as well as culture, talent   management and organizational health.

The committee has reviewed and discussed the Compensation Discussion and Analysis for the year ended December 31, 2021 and other compensation disclosures in this Proxy Statement with management. Based on such reviews and discussions, the committee recommended to the Board that the compensation-related disclosures made in this Proxy Statement, including the Compensation Discussion and Analysis, be included herein and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Respectfully submitted,

Human Capital and Compensation Committee

Robert K. Gifford, Chair

Anne De Greef-Safft

Jeffrey S. McCreary

David W. Scheible

 

 

 

30    Benchmark.    Benchmark Electronics, Inc.     •    2022 Proxy Statement

 


COMPENSATION TABLES AND NARRATIVES

 

The following tables, narratives and footnotes describe the total compensation and benefits of our CEO and our other Named Executive Officers for 2021.

Summary Compensation Table

 

The following table sets forth information concerning the compensation and benefits of our Named Executive Officers during the fiscal years ended December 31, 2021, 2020 and 2019.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name and Principal Position

 

Year

 

Salary(1) ($)

 

 

Bonus ($)

 

 

Stock

Awards(2)

($)

 

 

Non-Equity

Incentive Plan

Compensation(3)

($)

 

 

All Other

Compensation(4)

($)

 

 

Total ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeffrey W. Benck(5)

 

2021

 

$

919,731

 

 

$

 

 

$

4,375,000

 

 

$

1,388,113

 

 

$

54,002

 

 

$

6,736,846

 

President,

 

2020

 

 

841,154

 

 

 

 

 

 

3,500,000