DEF 14A 1 d357602ddef14a.htm DEF 14A DEF 14A
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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 (Amendment No. )

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

 

Preliminary Proxy Statement

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

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

The Greenbrier Companies, 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 the appropriate box):

 

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.


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 FROM OUR BOARD

 

 

Dear Shareholders:

 

On behalf of our Board of Directors, we are pleased to invite you to Greenbrier’s 2023 Annual Meeting of Shareholders. We strive to provide value to all our stakeholders, understanding that we have an obligation to be a positive force in corporate governance, environmental sustainability and social responsibility.

 

In fiscal 2022, we concluded executive transitions tied to succession planning. William A. Furman co-founded Greenbrier in 1981. During his tenure as CEO, Greenbrier became a multi-billion dollar company with operations that expanded worldwide with a consistent history of delivering shareholder value. In March 2022, Greenbrier’s Board of Directors voted unanimously to appoint a new CEO when Bill transitioned to Executive Chairman prior to his retirement from Executive Office on August 31, 2022. We look forward to building on the legacy formed by the Company in 1981.

 

We have engaged in many discussions with stakeholders, including conversations about our succession plans and commitment to Board refreshment. Your feedback is helpful as we work to increase Greenbrier’s value to shareholders and incorporate the most relevant governance practices into our operations. We are confident in our ability to drive growth and increase shareholder returns.

 

Along with the Board of Directors, our leadership team and more than 16,000 employees, we thank you for your continued support and investment. We look forward to your participation at the Annual Meeting on January 6, 2023.

 

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Admiral Thomas B. Fargo

Board Chair

 

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Lorie L. Tekorius

CEO and President

 

 

 

 

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

 

2023 ANNUAL MEETING INFORMATION

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Meeting Date:

Friday,

January 6, 2023

 

Meeting Access:

www.virtualshareholder

meeting.com/GBX2023

 

Meeting Time:

2:00 p.m. (Pacific Time)

 

Record Date:

November 3, 2022

 

 

 

PROXY VOTING

Your vote is very important. Whether or not you plan to virtually attend the Annual Meeting, please promptly vote by telephone or over the internet, or by completing, signing, dating and returning your proxy card or voting instruction form so that your shares will be represented at the Annual Meeting.

 

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    ONLINE

 

                          LOGO  

  BY PHONE

 

                          LOGO  

  BY MAIL

 

Our Notice of Annual Meeting, Proxy Statement and Annual Report for the fiscal year ended August 31, 2022, are available at http://materials.proxyvote.com/393657

Our Board has determined and authorized that the Annual Meeting be conducted virtually solely by remote communication beginning at 2:00 p.m. Pacific Time on January 6, 2023, via webcast at www.virtualshareholdermeeting.com/GBX2023. You may notify the Company of your desire to participate in the meeting by logging into the online site in advance of the meeting. The Annual Meeting is being held for the purpose of voting on the items set forth below and to transact such other business as may properly come before the meeting.

 

ITEMS TO BE VOTED ON

 

     

Proposal 1

   —    Election of Directors   Page 17

Proposal 2

   —    Advisory Approval of Executive Compensation   Page 44                    

Proposal 3

   —    Ratification of Appointment of Independent Auditors   Page 47

As of the date of this Notice, the Company has not received notice of any matters, other than those set forth above, that may properly be presented at the Annual Meeting. If any other matters are properly presented for consideration at the meeting, the persons named as proxies on the proxy card, or their duly constituted substitutes, are authorized to vote the shares represented by proxy or otherwise act on those matters in accordance with their judgment.

Holders of record of our Common Stock at the close of business on November 3, 2022, are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof.

By Order of the Board of Directors,

 

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Christian M. Lucky

Secretary

November 14, 2022

 

 

 

 


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TABLE OF CONTENTS

 

 

 

 

PROXY SUMMARY      1  
CORPORATE GOVERNANCE      4  

Board Composition

     4  

Governance Highlights

     8  

Board Independence

     8  

Board Leadership

     9  

Annual Evaluations

     9  

Board Refreshment

     10  

Board Experience

     11  

Board Committees, Meetings and Charters

     12  

Succession Planning

     13  

Risk Oversight

     13  

Our Code of Business Conduct and Ethics and FCPA Compliance

     13  

Shareholder Engagement

     14  

Environmental and Social

     14  

Related Person Transactions

     15  

Majority Voting Policy

     15  

Communication with the Board

     16  
PROPOSAL 1—ELECTION OF DIRECTORS      17  
2022 DIRECTOR COMPENSATION      18  
EXECUTIVE COMPENSATION      19  

Compensation Discussion and Analysis

     19  

Executive Summary

     19  

Say-on-Pay Vote and Shareholder Engagement on Compensation

     19  

Payouts and Pay-for-Performance Alignment

     21  

CEO and Executive Chairman Pay

     25  

Executive Compensation Program for 2022

     25  

Executive Compensation Paid for 2022

     28  

Executive Compensation Tables

     35  

Material Terms of Executive Employment Agreements and Other Arrangements

     37  

Pay Ratio

     42  

Equity Compensation Plan Information

     43  
COMPENSATION COMMITTEE REPORT      43  
PROPOSAL 2—ADVISORY APPROVAL OF EXECUTIVE COMPENSATION      44  
OWNERSHIP OF GREENBRIER COMMON STOCK      45  

Stock Ownership of Certain Beneficial Owners and Management

     45  
PROPOSAL 3—RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS      47  

Fees Paid to KPMG

     47  

Report of the Audit Committee

     48  
ANNUAL MEETING INFORMATION      49  

Online Meeting

     49  

Voting Securities and Solicitation of Proxies

     49  

Single and Multiple Mailings

     49  

Other Business

     49  

Additional Information

     49  

Shareholder Proposals

     49  

Incorporation by Reference

     50  
APPENDIX A—POLICY REGARDING THE APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY THE INDEPENDENT AUDITOR      A-1  
APPENDIX B—RECONCILIATION OF NON-GAAP FINANCIAL MEASURES      B-1  
 

 

 

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PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider. Please read this entire proxy statement carefully before voting. This Proxy Statement is first being released to shareholders on November 14, 2022.

 

                                                                                              

 

PROPOSAL 1

Election of Directors

 

  

 

 

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The Board recommends a vote FOR all Director Nominees

 

Our Nominating and Corporate Governance Committee and our Board recommend that shareholders vote “FOR” all director nominees as they have determined that each of the nominees possesses the right experience and qualifications to effectively oversee Greenbrier’s business strategy and risk management. Four of the nominees are nominated for a three-year term while one nominee (Ms. Tekorius) is nominated for a one-year term.

 

 

  

           

 

 

See “Proposal 1, Election of Directors” on page 17 of this Proxy Statement.

 

   
                    

 

DIRECTOR NOMINEES

The following table summarizes the qualifications of the director nominees.

 

Name

  

Summary of Basis for Recommendation

Wanda F. Felton

   Ms. Felton has served on the Greenbrier Board since 2017. She provides significant capital markets, emerging markets, business development and governmental experience. Ms. Felton is an “audit committee financial expert” under NYSE and SEC rules. The Board recommends a vote “FOR” Ms. Felton.

 

Graeme A. Jack

  

 

Mr. Jack has served on the Greenbrier Board since 2006 and is Chair of the Audit Committee. He provides accounting and financial reporting expertise and experience in international business transactions. Mr. Jack is an “audit committee financial expert” under NYSE and SEC rules. The Board recommends a vote “FOR” Mr. Jack.

 

David L. Starling

  

 

Mr. Starling has served on the Greenbrier Board since 2017. Mr. Starling is the former CEO of a Class I railroad and provides over 40 years of operating expertise in North America and international rail markets. The Board recommends a vote “FOR” Mr. Starling.

 

Lorie L. Tekorius

  

 

Ms. Tekorius joined the Greenbrier Board in March 2022. Ms. Tekorius was appointed as Greenbrier’s CEO in March 2022 and is a 25+ year employee of the Company. She provides significant company and industry knowledge, in addition to organizational leadership and financial and operational expertise. The Board recommends a vote “FOR” Ms. Tekorius.

 

Wendy L. Teramoto

  

 

Ms. Teramoto previously served on the Greenbrier Board from 2009 to 2017 and joined again in 2019. She brings investment management and financial expertise, and experience with manufacturing and other heavy industry companies to the Board. Ms. Teramoto is an “audit committee financial expert” under NYSE and SEC rules. The Board recommends a vote “FOR” Ms. Teramoto.

 

 

 

THE GREENBRIER COMPANIES

 

2023 Proxy Statement    

 

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          PROXY SUMMARY

 

    

 

                                                                                              

 

PROPOSAL 2

Advisory Approval

of Executive

Compensation

 

  

 

 

LOGO

 

 

The Board recommends a vote FOR this proposal

 

Our Board recommends that shareholders vote “FOR” the advisory approval of the compensation of our named executive officers for fiscal 2022.

 

 

  

           

 

 

See “Proposal 2, Advisory Approval of Executive Compensation” on page 44 of this Proxy Statement.

 

   
                    

Executive Compensation At-a-Glance

At our 2022 Annual Meeting, approximately 88% of shareholders who voted cast votes in favor of approving the compensation of our named executive officers. We continue to engage regularly with our shareholders and recognize the importance of shareholder feedback and compensation program alignment.

Performance Highlights

Below are the key financial metric results for our fiscal 2022 executive incentive programs. EBITDA and ROIC are non-GAAP financial measures that management believes are helpful in evaluating our financial performance. See Appendix B for a reconciliation of these measures to the most comparable GAAP measures.

 

  Short-Term Incentive      Long-Term Incentive
 
  LOGO     

Annual

EBITDA

$231 MILLION

Goal: $180 million

     LOGO     

3-Year

Cumulative EBITDA

No Payout- Did not meet Threshold

Goal: $1.1 billion

  
                   
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Annual

EPS

$1.40

Goal: $0.66

     LOGO     

3-Year

Return on Invested

Capital (ROIC)

No Payout- Did not meet Threshold

Goal: 11.0%

  

 

 

 

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THE GREENBRIER COMPANIES

 

 

    

 


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PROXY SUMMARY    

 

    

 

Compensation Highlights

The Company’s incentive compensation payouts demonstrate the Compensation Committee’s rigor in setting performance targets and also reflect the cyclical nature of our business. When setting the short-term and long-term incentive metrics and ranges, the Compensation Committee considers the macro business environment, industry backlog, the Company’s backlog, production and delivery schedules, and other factors such as supply chain disruptions, that impact our industry and demand for our products.

The fiscal 2022 annual incentive program metrics set in August 2021 reflected many uncertainties including limited demand visibility, supply chain disruptions and uneven labor availability against a backdrop of emerging COVID-19 variants. We were able to successfully navigate these challenges by increasing production rates more than 50% and headcount by 35%, generating stronger than expected results for the year. No adjustments were made to our Annual Incentive metrics or payout levels.

The long-term incentive performance program that completed August 31, 2022, reflected metrics set in the Fall of 2019 when projected deliveries reflected a stable industry cycle and prior to the onset of the COVID-19 pandemic and resulting economic weakness. We experienced actual industry deliveries over 30% lower than expectations. No adjustments were made to our long-term incentive program performance metrics or payout levels, which resulted in no payout in 2022 under our long-term incentive program.

 

           
  SHORT-TERM INCENTIVE           2022 AVERAGE PAYOUT
FOR ALL NEOs
        2021 AVERAGE PAYOUT
FOR ALL NEOs
        2020 AVERAGE PAYOUT
FOR ALL NEOs
 

 

 

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1-year

performance

period

 

 

   

 

 

 

  164.6%   OF TARGET  

 

 

 

 

 

  94.1%   OF TARGET  

 

 

 

 

 

  83.7%   OF TARGET  

 

                                         
           
  LONG-TERM INCENTIVE                 2022 AVERAGE PAYOUT
FOR ALL NEOs
        2021 AVERAGE PAYOUT
FOR ALL NEOs
        2020 AVERAGE PAYOUT
FOR ALL NEOs
 

 

 

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3-year

performance

period

 

   

 

   

 

 

 

  0.0%   OF TARGET  

 

 

 

 

 

  39.8%   OF TARGET  

 

 

 

 

 

  28.6%   OF TARGET  

 

 

                                                                                              
PROPOSAL 3

Ratification of

Appointment of

Independent

Auditors

 

  

 

 

 

   LOGO

 

 

The Board recommends a vote FOR this proposal

 

Our Board recommends that shareholders vote “FOR” ratification of the appointment of KPMG LLP as auditors for fiscal 2023.

 

 

  

           

 

 

See “Proposal 3, Ratification of Appointment of Independent Auditors” on page 47 of this Proxy Statement.

 

   
                    

 

 

 

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2023 Proxy Statement    

 

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CORPORATE GOVERNANCE

Board Composition

Our Board of Directors (“Board”) is composed of 11 directors. Nine directors are independent and not employed by Greenbrier. The Company’s co-founder and former Executive Chairman, Bill Furman, retired from all executive offices on August 31, 2022. He will remain a Board member until the end of his current term at the Annual Meeting of Shareholders in January 2024. As part of the Company’s succession plan, Lorie L. Tekorius was appointed as CEO & President of Greenbrier in March 2022. She was subsequently appointed to the Board of Directors and will stand for election at the Annual Meeting of Shareholders to be held on January 6, 2023 (“2023 Annual Meeting”). Upon Mr. Furman’s retirement as Executive Chairman, the Board elected Admiral Thomas Fargo as an independent Chair of the Board in September 2022. In the following pages, we highlight key areas of experience that qualify each director to serve on the Board. The Board has determined it is in the best interests of the Company and its stakeholders for each of the directors to continue serving on the Board.

 

 

    Wanda F. Felton     

 

 

     AGE: 64 POSITION: Director

 

LOGO

 

DIRECTOR SINCE: 2017

 

CURRENT TERM
EXPIRATION: 2023

  

EXPERIENCE: Ms. Felton has served as a member of the Board since 2017. Ms. Felton has over 30 years of financial industry experience in commercial and investment banking. Ms. Felton was a Presidential Appointee and was confirmed twice by the U.S. Senate to serve on the board of the Export Import Bank of the United States as Vice Chair of the Board and First Vice President from June 2011 to November 2016. In that role, she was on the team of economic deputies that advised the National Security Staff and the President’s Export Council on trade and investment. Ms. Felton was actively engaged in helping U.S. companies penetrate international markets and develop pragmatic financing solutions to win sales. Ms. Felton had oversight responsibility for the Office of the Chief Financial Officer and enterprise risk management functions, and served on the bank’s credit committee, which was responsible for approving debt financings over $10 million for a broad range of financing types across a range of industries. A significant portion of such financings supported the export of U.S.-manufactured transportation equipment, including rail equipment and aircraft, to emerging markets. She was also an ex officio member of the Enterprise Risk Management Committee. Until recently, Ms. Felton was a Senior Advisor to Spencer Stuart’s North American Board Practice focused on diversity. In September 2021, she joined Demopolis Equity Partners, a private equity fund that will invest in technology-enabled businesses (primarily fintech and e-commerce) upon formation. She continues to serve as a Trustee of The Cooper Union for the Advancement of Science and Art.

 

QUALIFICATIONS: Ms. Felton brings her significant prior experience with emerging markets business development and capital raising to the Board. Additionally, Ms. Felton is an “audit committee financial expert” under NYSE and SEC rules.

 

 

 

    Graeme A. Jack    

 

 

     AGE: 71 POSITION: Director and Chair of the Audit Committee

 

LOGO

 

DIRECTOR SINCE: 2006

 

CURRENT TERM

EXPIRATION: 2023

  

EXPERIENCE: Mr. Jack has served as a member of the Board since 2006. He is a retired partner of PricewaterhouseCoopers LLP in Hong Kong. Mr. Jack is an independent non-executive director of the Hutchison Port Holdings Management Pte. Limited, the trustee manager of Hutchison Port Holdings Trust and HUTCHMED (China) Limited. For the six years ended June 30, 2021, Mr. Jack was an independent non-executive director of COSCO SHIPPING Development Company Limited.

 

QUALIFICATIONS: Mr. Jack brings accounting and financial reporting expertise to the Board as well as extensive experience in international business transactions in Asia generally, and in China in particular. Under NYSE and SEC rules, Mr. Jack is an “audit committee financial expert.”

 

 

 

 

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CORPORATE GOVERNANCE    

 

    

 

 

    David L. Starling    

 

 

     AGE: 72 POSITION: Director

 

LOGO

 

DIRECTOR SINCE: 2017

 

CURRENT TERM

EXPIRATION: 2023

  

EXPERIENCE: Mr. Starling has served as a member of the Board since 2017. Mr. Starling also serves as Chairman of the Board of Ports America, the largest port and terminal operator in the United States. In 2021, he was appointed as Trustee of the voting trust in the Canadian Pacific & Kansas City Southern (KCS) merger. Additionally, Mr. Starling is a Senior Advisor for Oaktree Infrastructure Fund, with nearly $2.5 billion assets under management, and a part of Oaktree Capital Management. The Fund invests in companies that provide products and services to support infrastructure assets. Previously, Mr. Starling served as director, President and Chief Executive Officer of Kansas City Southern, a Class I railroad, from 2010 to 2016. He served as President and Chief Operating Officer of KCS from 2008 to 2010. Prior to that, he was Vice Chairman of the Board of Directors of Kansas City Southern de Mexico. Mr. Starling has served as Vice Chairman of the Board of Directors of Panama Canal Railway Company and Panarail, and on the Board of Ferrellgas Partners LP from 2014 to 2017. Before joining KCS, Mr. Starling served as President and Director General of Panama Canal Railway Company from 1999 through 2008.

 

QUALIFICATIONS: Mr. Starling’s more than 40 years of operating experience provides Greenbrier’s Board with unique railroading expertise in both North America and international markets.

 

 

 

    Lorie L. Tekorius    

 

 

     AGE: 55 POSITIONS: Director and Chief Executive Officer

 

LOGO

 

DIRECTOR SINCE: 2022

 

CURRENT TERM

EXPIRATION: 2023

  

EXPERIENCE: In March 2022, Ms. Tekorius became Greenbrier’s Chief Executive Office and President. Prior to this, she was Greenbrier’s President and Chief Operating Officer (COO), leading strategic planning, maintenance services, management services and the accounting, finance, human resources and other administrative functions. Ms. Tekorius joined Greenbrier in 1995 and served in various financial and operating roles of increasing responsibility. In 2016, she was appointed Executive Vice President (EVP), Chief Financial Officer (CFO), a role where she was recognized as Oregon’s 2017 CFO of the Year by the Portland Business Journal. In 2018, she was promoted to EVP, COO. Also in 2018, Ms. Tekorius was recognized as one of 14 “Women in Rail” by Railway Age in recognition of her contributions to the industry. She is a member of the Board of Directors of the Alamo Group, Inc. and sits on the Audit and Nominating and Corporate Governance Committees. Ms. Tekorius is an active community member, serving as the President of the Providence St. Vincent Medical Foundation Council of Trustees.

 

QUALIFICATIONS: As a 25+ year employee of Greenbrier, Ms. Tekorius provides significant company-specific and industry knowledge, in addition to financial and operational expertise.

 

 

 

    Wendy L. Teramoto    

 

 

     AGE: 48 POSITION: Director

 

LOGO

 

DIRECTOR SINCE: 2019

 

CURRENT TERM

EXPIRATION: 2023

  

EXPERIENCE: Ms. Teramoto has served as a member of the Board since 2019. She has been a senior investment management professional with an affiliate of Fairfax Financial Holdings Limited since 2018. From 2017 to 2018, she served in a senior capacity at the United States Department of Commerce. Until 2017, Ms. Teramoto was a Managing Director and a senior investment management professional, and a founding partner, at a New York-based private equity firm affiliated with Invesco Ltd. Ms. Teramoto has served as a board member for several companies in the transportation sector. In addition to serving on many private boards, Ms. Teramoto previously served on the Greenbrier Board from 2009 to 2017, and on the board for Navigator Holdings Ltd. from 2014 to 2017.

 

QUALIFICATIONS: Ms. Teramoto brings investment management and financial expertise, and experience with manufacturing and other heavy industry companies to the Board. Additionally, Ms. Teramoto is an “audit committee financial expert” under NYSE and SEC rules.

 

 

 

 

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2023 Proxy Statement    

 

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          CORPORATE GOVERNANCE

 

    

 

 

    Thomas B. Fargo    

 

 

     AGE: 74 POSITION: Chair of the Board and Chair of the Compensation Committee

 

LOGO

 

DIRECTOR SINCE: 2015

 

CURRENT TERM
EXPIRATION: 2025

  

EXPERIENCE: Admiral Fargo has served as a member of the Board since 2015. He was Lead Director from January 2021 through August 2022. In September 2022, Admiral Fargo was elected Chair of the Board of Directors upon Mr. Furman’s retirement from executive offices. He is a retired military commander with subsequent private sector experience in maritime and other transportation industries. As commander of the U.S. Pacific Command from 2002 until 2005, Admiral Fargo led the world’s largest unified command while directing the joint operations of the Army, Navy, Marine Corps and Air Force in the Asia-Pacific Theater. He serves as the Board Chair of Hawaiian Electric Industries and is on the Board of Directors for Matson, Inc. Previously, Admiral Fargo served as the Board Chairs of USAA and Huntington Ingalls Industries and served on the Boards of Northrop Grumman Corporation, Alexander & Baldwin, Inc. and Hawaiian Airlines.

 

QUALIFICATIONS: Admiral Fargo brings executive leadership and operational, manufacturing and international expertise to the Board.

 

 

 

William A. Furman    

 

 

     AGE: 78 POSITIONS: Director (Retired Executive Chairman of the Board of Directors)

 

LOGO

 

DIRECTOR SINCE: 1994

 

CURRENT TERM

EXPIRATION: 2024

  

EXPERIENCE: Mr. Furman has served as a member of the Board and as the Company’s Chief Executive Officer from 1994 until his retirement in 2022. He was Chairman of the Board of Directors from January 2014 until his retirement and served as Executive Chairman from March 2022 to August 2022. As a founder, Mr. Furman has been associated with the Company and its predecessor companies since 1974. He has led the Company through incredible growth over the last decade, including international expansion and significantly increased market share in North America, and is highly experienced in the cycles of our business. Mr. Furman led the Company through the global crisis presented by the COVID-19 pandemic. Prior to 1974, Mr. Furman was Group Vice President for the Leasing Group of TransPacific Financial Corporation. Earlier, he was General Manager of the Finance Division of FMC Corporation. Mr. Furman formerly served as a director of Schnitzer Steel Industries, Inc., a steel recycling and manufacturing company.

 

QUALIFICATIONS: As a founder of the Company, Mr. Furman brings executive management and railcar industry experience to the Board as well as historical perspective on the Company’s origins and evolution.

 

 

 

    Antonio O. Garza    

 

 

     AGE: 63 POSITION: Director

 

LOGO

 

DIRECTOR SINCE: 2021

 

CURRENT TERM

EXPIRATION: 2025

  

EXPERIENCE: Ambassador Garza has served as a member of the Board since 2021. He is Counsel in the Mexico City office of White & Case LLP, a global law firm. Prior to joining White & Case, Ambassador Garza served as the U.S. Ambassador to Mexico from 2002 to 2009. He also is currently a director of Kansas City Southern, a Class 1 railroad, and is the Chairman of its Mexican subsidiary Kansas City Southern de México. Ambassador Garza is also on the Board of MoneyGram International, Inc. and Americas Technology Acquisition Corp. He was Chairman of the Railroad Commission of Texas, elected to that statewide office in 1998, and served through 2002. Ambassador Garza is a member of the Board of Trustees of Southern Methodist University. He also is a director of the Americas Society, the U.S. Chamber of Commerce in Mexico and is a member of the Council on Foreign Relations (CFR) and COMEXI, the CFR’s Mexican counterpart. From 1994 through 1997, he was the State of Texas Secretary of State, and Senior Policy Advisor to the Governor of Texas. He is a member of the State Bar of Texas, the District of Columbia Bar and is admitted to practice before the United States Supreme Court. Ambassador Garza is a past recipient of the Aguila Azteca (Aztec Eagle), the highest honor bestowed by the Mexican government on a foreign national.

 

QUALIFICATIONS: Ambassador Garza brings international expertise and rail industry, legal and governmental experience to the Board.

 

 

 

 

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CORPORATE GOVERNANCE    

 

    

 

 

 

    James R. Huffines    

 

 

     AGE: 71 POSITION: Director

 

LOGO

 

DIRECTOR SINCE: 2021

 

CURRENT TERM

EXPIRATION: 2025

  

EXPERIENCE: Mr. Huffines has served as a member of the Board since 2021. Mr. Huffines has over 35 years of experience in banking and finance. He most recently served as Chief Operating Officer for subsidiaries of Hilltop Holdings, Inc., an NYSE publicly-traded financial company, and on the Board from 2012-2017. From 2007 to 2012, Mr. Huffines also served on the Board of Energy Future Holdings as an independent director and as the Board’s Audit Committee Chairman. Mr. Huffines presided as Chairman on the University of Texas System board of regents for four years during his seven years as a Regent. He also was on the Board and Audit Chair of the UTIMCO, a $35 billion endowment fund for higher education in Texas. Mr. Huffines currently serves on the holding company board of Susser Bank Holdings, a $1.9 billion privately owned financial institution.

 

QUALIFICATIONS: Mr. Huffines brings banking and finance expertise, public company and governmental experience to the Board. Under NYSE and SEC rules, Mr. Huffines is an “audit committee financial expert.”

 

 

 

Charles J. Swindells    

 

 

     AGE: 80 POSITION: Director

 

LOGO

 

DIRECTOR SINCE: 2005

 

CURRENT TERM

EXPIRATION: 2024

  

EXPERIENCE: Ambassador Swindells has served as a member of the Board since 2005. He also provides consulting services to the Company on international projects. Ambassador Swindells is currently engaged as an advisor to Bessemer Trust, an independent provider of investment management and wealth planning to families and individuals. He served as the Vice Chairman, Western Region of U.S. Trust, Bank of America, Private Wealth Management from August 2005 to January 2009. Ambassador Swindells served as United States Ambassador to New Zealand and Samoa from 2001 to 2005. Before becoming Ambassador, he was Vice Chairman of U.S. Trust Company, N.A.; Chairman and Chief Executive Officer of Capital Trust Management Corporation; and Managing Director/Founder of Capital Trust Company. Ambassador Swindells also served as Chairman of World Wide Value Fund, a closed-end investment company listed on the NYSE. He was one of five members on the Oregon Investment Council overseeing the $20 billion Public Employee Retirement Fund Investment Portfolio and was a member of numerous nonprofit boards of trustees, including serving as Chairman of the Board for Lewis & Clark College in Portland, Oregon.

 

QUALIFICATIONS: Ambassador Swindells brings financial and global business expertise, senior executive leadership, governance expertise and high-ranking government experience to the Board.

 

 

 

Kelly M. Williams    

 

 

     AGE: 58 POSITION: Director and Chair of the Nominating and Corporate Governance Committee

 

LOGO

 

DIRECTOR SINCE: 2015

 

CURRENT TERM

EXPIRATION: 2024

  

EXPERIENCE: Ms. Williams has served as a member of the Board since 2015. Ms. Williams is the CEO of the Williams Legacy Foundation. Ms. Williams was a senior advisor of GCM Grosvenor Private Markets from June 2015 until January of 2019. Until June 1, 2015, Ms. Williams was President of GCM Grosvenor Private Markets, a member of its Management Committee and a member of its Investment Committee. Prior to joining GCM Grosvenor, Ms. Williams was a Managing Director, the Group Head and the chair of the compensation committee of the Customized Fund Investment Group of Credit Suisse Group AG from 2000 through 2014, after Credit Suisse acquired Donaldson, Lufkin and Jenrette, where Ms. Williams was director of the Customized Fund Investment Group. She was with the Prudential Insurance Company of America from 1993 to 2000, where she was an Executive Director and a founder of the Customized Fund Investment Group in 1999. Prior to joining Prudential, Ms. Williams was an attorney at Milbank, Tweed, Hadley & McCloy LLP, where she specialized in global project finance. She graduated magna cum laude from Union College in 1986 with a Bachelor of Arts degree in Political Science and Mathematics and received her Juris Doctor from New York University School of Law in 1989. Ms. Williams serves in leadership positions on the boards of several for profit and not-for profits and has won numerous awards for leadership and public service. In addition, Ms. Williams was named as one of the Most Powerful Women in Finance by American Banker Magazine from 2011-2014. Ms. Williams also serves as President of the Nantucket Historical Association, and as a board member of Union College.

 

QUALIFICATIONS: Ms. Williams brings executive management and financial and investment expertise to the Board.

 

 

 

 

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          CORPORATE GOVERNANCE

 

    

 

Governance Highlights

 

 

   

Independent

Oversight

 

   9 of the 11 members (over 80%) of our Board meet the independence criteria established by the New York Stock Exchange and the Securities and Exchange Commission. Lorie L. Tekorius (our CEO) and William “Bill” A. Furman (co-founder and former Executive Chair) are the only non-independent members of the Board

 

   Eight of the nine independent directors of the Board, including all committee members, committee chairs, and the new Chair, meet the heightened standard of independence described below in “Board Independence”

 

   Our independent directors regularly hold separate executive sessions at Board meetings and at committee meetings

 

   Regular review of independent directors’ committee roles

 

   The Board actively oversees strategy, risk management, ESG and human capital management including our commitment to inclusion, diversity, equity, access and leadership (IDEAL)

 

   Upon the retirement of Bill Furman, the Chair of the Board is and will be an independent director

   

Board

Refreshment

 

   Six new directors have joined the Board since 2017 (55% of the Board has been refreshed)

 

   Average tenure of the Board, excluding the co-founder Mr. Furman, is six years

 

   The Board promotes ongoing director education, including through our membership in the National Association of Corporate Directors

 

   The Company received a “3+” rating (one of their highest ratings) from the 50/50 Women on Boards organization for having three or more female directors

 

   Board succession planning is an ongoing process with a focus on integrity, experience, diversity and mix of tenure of directors

 

   The Board regularly engages in identifying highly qualified candidates for future Board service

   

High

Governance

Standards

 

   Demonstrated commitment to shareholder and stakeholder engagement

 

   Our Code of Business Conduct and Ethics applies to all directors, officers, employees, and consultants

 

   Average attendance of directors at Board and committee meetings exceeded 95% over the last five years

 

   The Company maintains substantial Director and officer stock ownership requirements

 

   The Board reviews each director’s independence qualifications annually

 

   Pledging or hedging of Company stock by directors and executives is prohibited

   

Recent

Accomplishments

 

   Successful execution of the CEO succession plan resulting in the appointment of Lorie L. Tekorius as CEO and President in a seamless transition

 

   Completed multi-year succession plan that resulted in refreshment of several executive offices including the President of Manufacturing, Chief Commercial & Leasing Officer and the head of Global Sourcing

 

   Admiral Thomas B. Fargo elected as independent Chair of the Board effective September 2022

 

   Regular review and implementation of the Company’s succession planning process for key leadership and operational positions

 

   Publication of the Company’s fourth annual Environmental, Social and Governance (ESG) Report, demonstrating advancement toward specific goals and continued progress on enhancing ESG reporting metrics

 

   Board support drives continued advancement of the Company’s Inclusion, Diversity, Equity, Access and Leadership (IDEAL) commitment

 

   Increased gender diversity on our Board from 30% to 36% with ethnic diversity of 27%

Board Independence

The Board makes all determinations with respect to director independence in accordance with New York Stock Exchange (NYSE) and Securities and Exchange Commission (SEC) requirements. In addition, the Board established enhanced guidelines to assist in making determinations regarding director independence (the “Independence Guidelines”), which are set forth in our Corporate Governance Guidelines and are available on the Company’s website at http://www.gbrx.com/corporate-governance. Among other things, this heightened standard prohibits directors from serving on a committee if they receive any compensation from the Company in addition to their compensation for Board service. All of our directors who serve on Committees satisfy this heightened standard of independence, which further safeguards our Board’s autonomy and alignment with shareholders.

 

 

 

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CORPORATE GOVERNANCE    

 

    

 

Based on its annual assessment of director independence, the Board has determined affirmatively that 9 of its 11 directors meet the independence criteria established by NYSE and SEC rules as set forth in the table on page 12. In arriving at this determination, the Board thoroughly considered the consulting arrangement with Mr. Swindells and confirmed his independence and ability to exercise independent judgment. Due to the Board’s voluntary application of a heightened independence standard, Mr. Swindells does not serve on any Board committees.

In fiscal 2022, the independent directors met without Company management present at all regular meetings of the Board.

Board Leadership

As part of the Board’s CEO succession plan, Bill Furman continued to lead the Board of Directors in the newly-created role of Executive Chairman until his retirement as an executive officer on August 31, 2022. Mr. Furman will remain as a director until January 2024. The Board maintained an independent Lead Director while the Chairman of the Board (and later Executive Chairman) was not an independent director. Admiral Thomas Fargo was elected Lead Director by the independent directors in 2021 and served until his election as independent Chair of the Board effective September 1, 2022, satisfying the Board’s policy of only independent directors being eligible for the role.

The independent Chair of the Board serves stakeholder interests by:

 

 

 

 

Presiding at all meetings of the Board

 

 

 

Providing stability and leadership during the CEO transition

 

 

 

Leading regular executive sessions of the independent directors, which are held at every regularly scheduled Board meeting

 

 

 

Approving Board schedules, meeting agendas and other Board matters

 

 

 

Making requests of the CEO and providing feedback regarding the Board’s requirements and observations

 

 

 

Consulting with the CEO on Company strategy and providing advice and feedback

 

 

 

With the Chair of the Nominating and Corporate Governance Committee, implementing and participating in the Board self-assessment process

 

 

 

Acting as a liaison between the independent directors and the CEO and generally representing the independent directors on the Board

 

   

Engaging with shareholders and supporting committee chairs in engagements as appropriate

Annual Evaluations

Our Board conducts an annual evaluation of itself, its committees and each director, individually, to ensure effective functioning. In addition:

 

 

 

 

The Chair of the Board (formerly the Lead Director) and Chair of the Nominating and Corporate Governance Committee meet individually with each director to discuss goals, solicit feedback and address important matters

 

 

 

The Chair of the Board works with each committee chair to assess development opportunities and implement changes based on feedback received in the annual evaluations

 

 

 

In 2022 the Board conducted a survey of directors to evaluate areas of strength and opportunities to supplement the Board’s existing skills and experience

 

 

 

Directors certify each year that they understand and comply with the Company’s Code of Business Conduct and Ethics

 

 

 

The Board receives regular anti-bribery and Foreign Corrupt Practices Act training

 

 

 

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Board Refreshment

Our Board best serves the Company and its stakeholders when there is a balance between new directors with fresh perspectives and longer serving directors who bring continuity in a cyclical business.

To promote thoughtful Board refreshment, we have:

 

 

 

 

Appointed a total of six new directors (55% refreshment) since 2017 to enhance diversity of experience, prepare for future retirements and supplement the Board’s existing skills

 

   

Elected an independent Chair of the Board, Admiral Thomas Fargo

 

   

Continued committee refreshment with the appointment of Ambassador Antonio Garza to the Nominating and Corporate Governance Committee and James Huffines to the Audit Committee

 

   

Required that directors must meet a heightened standard of independence to serve on a committee

The size of the Board is currently 11 directors. The Board has determined this is the appropriate size at this time. In accordance with our governing documents and in connection with our Board refreshment process, the size of the Board will periodically fluctuate as new directors are appointed to overlap with directors who are not standing for election, allowing for a robust onboarding process.

Following are key metrics reflecting the balance of skills, qualifications and experience on our Board.

 

LOGO

To ensure the Board operates at the highest level, Greenbrier supports continuing education programs and performs annual evaluations, in addition to maintaining a comprehensive orientation program for all new directors. These programs, including a membership with the National Association of Corporate Directors, contribute to increased levels of Board skills and knowledge as well as a current understanding of the landscape of risks and opportunities, best practices and current governance trends. The Company is continually seeking to improve Board performance including additional training if needed when a director assumes a new leadership role. The Company pays the reasonable expenses of directors who attend continuing education programs.

 

 

 

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CORPORATE GOVERNANCE    

 

    

 

Board Experience

 

Experience Contributions

    

 

         LOGO                 LOGO                 LOGO                 LOGO                 LOGO                 LOGO                 LOGO                 LOGO                 LOGO                 LOGO                 LOGO       

LOGO

 

CEO/President

      LOGO       LOGO       LOGO       LOGO       LOGO       LOGO

LOGO

 

Diversity Initiatives

      LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

LOGO

 

Financial Expertise

          LOGO   LOGO       LOGO   LOGO       LOGO   LOGO   LOGO   LOGO

LOGO

 

Government/Military

      LOGO   LOGO       LOGO   LOGO           LOGO       LOGO    

LOGO

 

International

      LOGO   LOGO   LOGO   LOGO       LOGO   LOGO   LOGO   LOGO   LOGO   LOGO
LOGO  

Legal Training

                  LOGO                           LOGO

LOGO

 

Public Company

      LOGO       LOGO   LOGO   LOGO       LOGO       LOGO        

LOGO

 

Public Policy

      LOGO   LOGO   LOGO   LOGO   LOGO       LOGO   LOGO       LOGO    

LOGO

 

Rail/Transport/Industrial

      LOGO   LOGO   LOGO   LOGO       LOGO   LOGO       LOGO   LOGO    

LOGO

 

Risk Management

      LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

LOGO

 

Talent Development

      LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO   LOGO

The Nominating and Corporate Governance Committee considers a variety of factors including professional experience and demonstrated skills, diversity of gender, race, ethnicity, sexual orientation, age, as well as cultural and geographical background in evaluating candidates for membership on the Board. The Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a diverse mix of skills, knowledge, attributes and experiences that cover the spectrum of areas that affect the Company’s business and its stakeholders. In general, the composition of the Board is diversified across financial, operational, accounting, legal and corporate governance expertise, as well as expertise within the Company’s business and industry, including experience in global markets, public policy, manufacturing, finance and rail. All candidates for director nominees, including self-nominated candidates, shareholder suggested candidates, and board-identified candidates, are thoroughly evaluated and considered in the context of current perceived needs of the Board as a whole. The Nominating and Corporate Governance Committee regularly assesses whether the mix of skills, experience and background of our Board is appropriate for the Company, including conducting a survey of directors in 2022 to evaluate areas of strength and opportunities to supplement the Board’s existing skills and experience.

 

 

 

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Board Committees, Meetings and Charters

Below is a general overview of the role of each committee.

 

 

 

Compensation Committee    

   

 

 

Audit Committee

   

 

 

Nominating and Corporate

Governance Committee

 

 

 

The Compensation Committee focuses on increasing shareholder value by setting compensation for senior management and is responsible for:

 

1)   Oversight of compensation strategy and incentive plans design, metrics and targets for Company executives

 

2)   Oversight of executive officer compensation, evaluating CEO performance and recommending CEO compensation to the Board

 

3)   Reviewing policies relating to director compensation and stock ownership guidelines

 

4)   Assessing the independence of any compensation consultants

 

5)   Engaging with shareholders to solicit feedback and understand compensation priorities

   

 

The Audit Committee safeguards our shareholders’ investment in the Company by overseeing:

 

1)  The integrity and public reporting of the Company’s financial statements

 

2)  Company compliance with legal and regulatory requirements

 

3)  Performance of the Company’s internal audit plan and functions and internal controls

 

4)  Engagement and oversight of the Company’s independent registered public accounting firm

 

5)  Cybersecurity and information technology resilience and security

 

6)  Identification and evaluation of any related party transactions

   

 

The Nominating and Corporate Governance Committee works to ensure that stakeholders are effectively represented by overseeing:

 

1)  Board refreshment, including the identification of director nominees

 

2)  The process and protocols regarding CEO succession

 

3)  The structure and composition of Board committees

 

4)  Annual evaluations of the Board and its committees

 

5)  Risk monitoring, except if specifically reserved to another committee

 

6)  The Company’s Inclusion, Diversity, Equity, Access and Leadership (IDEAL) program

 

7)  Environmental, social and governance (ESG) matters and reporting

 

8)  Shareholder engagement to solicit feedback and understand governance priorities

 

9)  Human capital management

 

During fiscal 2022, the Board at large held five meetings, the Audit Committee held four meetings, the Nominating and Corporate Governance Committee held four meetings, and the Compensation Committee held five meetings. Each of our current directors attended 75% or more of the total Board and Board committee meetings on which the director served in fiscal year 2022 although all directors are invited and encouraged to attend all committee meetings. The independent directors met regularly in executive sessions without Company management present throughout fiscal 2022. The Chair of the Board (formerly the “Lead Director”) conducts and presides at each executive session. The Company’s policy is to encourage Board members to attend the Company’s Annual Meetings of Shareholders. All of the Company’s then-serving directors attended the Annual Meeting of Shareholders held on January 7, 2022 (except for one retiring director). The composition of each of the Board committees is set out below.

 

Name

Independent Audit Committee Compensation
Committee

Nominating and Corporate

Governance Committee

Thomas B. Fargo (former Lead Director / current Board Chair)

LOGO

 

 

 

  LOGO  Chair LOGO

Wanda F. Felton

LOGO   LOGO , F

 

 

 

LOGO

William A. Furman (former CEO and former Executive Chairman)

 

 

 

 

 

 

 

 

Antonio O. Garza

LOGO

 

 

 

 

 

 

LOGO

James R. Huffines

LOGO   LOGO , F

 

 

 

 

Graeme A. Jack

LOGO   LOGO  Chair, F   LOGO LOGO

David L. Starling

LOGO

 

 

 

  LOGO LOGO

Charles J. Swindells

LOGO

 

 

 

 

 

 

 

Lorie L. Tekorius (CEO)

 

 

 

 

 

 

 

 

Wendy L. Teramoto

LOGO   LOGO , F   LOGO

 

Kelly M. Williams

LOGO   LOGO   LOGO LOGO  Chair

LOGO  Independent         LOGO  Member         Audit Committee Financial Expert

 

 

 

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The Board has determined that each member of the Audit Committee is financially literate and that Mses. Felton and Teramoto and Messrs. Jack and Huffines qualify as “audit committee financial experts” under NYSE and SEC rules. Each of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee maintains a written charter. These charters, along with the Company’s Corporate Governance Guidelines, are available on the Company’s website at www.gbrx.com/corporate-governance.

Succession Planning

Executive Succession

The Board provides oversight of key executive officer transitions. Fiscal 2022 finalized a multi-year succession plan that resulted in the refreshment of several executives including the recent successful transitions of Brian Comstock’s appointment to Chief Commercial & Leasing Officer in January 2021 and William Krueger to President of Greenbrier Manufacturing Operations in September 2022.

Our CEO and our Chief Human Resources Officer oversee the talent pipeline initiative for other key positions. This includes creating talent profiles for potential succession candidates and implementing tailored development plans with specific actions.

The Board reviews our talent pipeline initiative quarterly, and meets formally and informally with our CEO, key executives and other high-potential members of senior management.

CEO Succession

As previously disclosed, Lorie L. Tekorius was appointed as CEO in March 2022. Her accession to the office of CEO was the result of a multi-year succession strategy led by the Board, which focused on identifying the best candidate and implementing a smooth transition.

Risk Oversight

The Board has delegated to the Nominating and Corporate Governance Committee primary responsibility for risk oversight management. In order to ensure that expertise is dispatched most effectively in risk management, certain other standing committees are given primary risk oversight management responsibility of certain categories of risks, such as the Compensation Committee’s oversight of compensation risk and the Audit Committee’s oversight of certain financial controls and

cybersecurity risks. Greenbrier has established an Enterprise Risk Management (ERM) program to ensure risks are addressed in a manner consistent with the overall corporate strategy including a strong focus on cybersecurity. Key risk identification, evaluation and mitigation actions are reviewed quarterly by the Nominating and Corporate Governance Committee, other committees, and, as appropriate, are considered by the entire Board. The entire Board remains actively engaged in the oversight and effective implementation of the ERM program. The Board as a whole is directly engaged in overseeing the management of all significant risks, especially risks that implicate public safety.

The Compensation Committee evaluates the Company’s compensation programs and has concluded that its risks are effectively mitigated by a variety of policies including clawback, hedging and stock ownership policies. The compensation program balances between short-term and long-term incentives and establishes multiple and strategically weighted performance measures. Based on the results of its evaluation, the Compensation Committee concluded that any risks associated with the Company’s compensation programs are not reasonably likely to have a material adverse effect on the Company.

Our Code of Business Conduct and Ethics and FCPA Compliance

We strive for the highest ethical standards in all of our business dealings. Our Code of Business Conduct and Ethics guides our Board, executive officers and employees in the work they do for the Company. We work diligently to ensure that all our employees fully understand and are empowered to implement ethical practices and promptly report any noncompliant or suspicious activity. The Company maintains the right to require any employee to supply a written statement certifying compliance with our Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics applies to all of the Company’s directors, officers, employees and consultants, including its principal executive officer, principal financial officer and principal accounting officer. The Company intends to post amendments to or waivers from our Code of Business Conduct and Ethics on the Company’s website at https://investors.gbrx.com/corporate-governance.

Our Code of Business Conduct and Ethics is closely tied to our FCPA and Anti-Corruption Policy. We are an international company, and as such, compliance with all anti-bribery and anti-corruption laws is a key component of our ethics focus. We conduct ongoing compliance training at all our locations across the globe.

 

 

 

 

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Shareholder Engagement

We actively and regularly engage with shareholders to identify and understand matters important to them. Our independent Chair of the Board (formerly the “Lead Director”), Board Committee Chairs and Management team are directly involved in these efforts, which are reported to the entire Board. In fiscal 2022, we invited shareholders representing 75% of outstanding shares, including all our top 10 shareholders, to engage on a variety of topics. We engaged with shareholders holding over 40% of shares.

 

 

 

WHAT WE DISCUSSED

 

 

 

 

 

   

CEO and other key executive succession planning and compensation

 

   

Best practices in corporate governance including Board refreshment and risk management

 

   

Environmental, social and diversity reporting and priorities including human capital management and our IDEAL commitment

 

   

Compensation plan design process and strategy (for details see Compensation Discussion and Analysis section)

 

   

Effective alignment of shareholder and executive interests including Total Shareholder Return alignment

 

   

Shareholder rights and appropriate take-over protections for smaller cap companies

Depending on availability and specific shareholder requests, Greenbrier was represented at these engagements by the Chairs of our Compensation and Nominating and Corporate Governance Committees and by senior executives including our CEO, Chief Human Resources Officer, SVP External Affairs and Treasurer. Shareholder engagement activity and feedback is reported directly to the Board, either by the Committee Chairs, if they participated, or by Management.

Based on shareholder feedback, the TSR modifier element in our long-term performance equity plan was changed for the 2023 long-term performance award and is now structured as a standalone metric, rather than as a modifier.

 

Environmental and Social

Greenbrier’s 2022 ESG report was published in November 2022 and can be found at www.gbrx.com/ESG/.

Environmental Sustainability

Sustainability is central to Greenbrier. Our core product offerings are not only among the most fuel-efficient modes of transport globally, but freight railcars also maintain a 40-year useful life. We remain dedicated to traditional stewardship by reducing our environmental footprint and meeting or exceeding environmental regulations in the countries where we operate. Greenbrier continues to progress on our sustainability goals which are informed by a materiality assessment completed in fiscal 2021. To ensure sustained alignment, Greenbrier will continue to balance our environmental focus areas and goals with our overall corporate strategy.

Safety

Greenbrier knows ensuring the health and safety of all employees is vital to our success. We believe no one should be injured while working at Greenbrier. In addition to following strict U.S. and E.U. and other applicable requirements, Greenbrier operates under a Health & Safety Management System that was developed consistent with ISO 45001. As part of our safety program, each

production shift begins with a safety briefing. Senior Management reviews monthly safety data, while the Board is updated each quarter. Our culture of safety evolves and works towards continuous improvement, as evidenced by an all-time low incident rate of 1.09, a 16% improvement from fiscal 2021’s previous record low of 1.29. This is against a backdrop of adding more than 4,200 employees, an increase of 35%, in fiscal 2022. Notably, several locations have achieved multiple years without a recordable incident. Greenbrier’s safety program is robust, effective and is never taken for granted.

Human Capital Management

With the oversight of our Board, Greenbrier’s approach to human capital management (HCM) is wide-reaching and encompasses many facets including business strategy alignment, talent pipeline planning, diversity and inclusion, training and development, employee well-being, workforce safety and risk mitigation.

Culture and work environment are increasingly vital in retaining talent. During the year, we developed an onboarding framework that provides a consistent and inclusive experience for newly hired Greenbrier employees. We also conducted an employee survey to gain important insights to strengthen our Company and improve the employee experience. Based on the results, we have created actionable goals to enhance communications, provide

 

 

 

 

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more robust training and development opportunities, and implement a formal recognition and reward program.

Our HCM strategy also supports our IDEAL (Inclusion, Diversity, Equity, Access and Leadership) commitment. In 2022, we created a framework for Employee Resource Groups (ERGs) at Greenbrier and were pleased by the formation of six ERGs during the year. ERGs are voluntary, employee-driven groups that are organized around a shared interest or dimension and provide an opportunity for employees to network as well as promote cultural diversity, education and professional development of its members, contributing to the success of Greenbrier’s IDEAL mission.

Ensuring our people are healthy, secure and engaged supports our overall emphasis on attracting a diverse talent base and fostering an inclusive culture for our global workforce.

Diversity of Our Leadership

BOARD OF DIRECTORS

Our Board is 36% female versus the Russell 3000 index average of 27%. Greenbrier was previously recognized by the nonprofit, 50/50 Women on Boards, as one of the few Oregon publicly-traded companies with over 20% female representation on the Board. In addition, 27% of our Board is racially or ethnically diverse.

NAMED EXECUTIVE OFFICERS (NEOs)

Our NEO group is 40% gender and racially or ethnically diverse.

For more information on these and other Company priorities, please see our 2022 Environmental, Social and Governance report available at https://www.gbrx.com/esg/.

Related Person Transactions

Under Greenbrier’s written Related Transactions Policy, the Audit Committee of the Board has the responsibility to review and, if appropriate, approve (or, when applicable, ratify) all related person transactions. Standard procedure is for related person transactions to be submitted to the Audit Committee for consideration prior to consummation whenever practicable. If advance approval of a related person transaction is not practicable under the circumstances or if Greenbrier management becomes aware of a related person transaction that has not been previously approved or ratified, the transaction is submitted to the Committee at the Committee’s next meeting. The Committee is required to review and consider all relevant information available to it about each related person transaction, and a transaction is considered approved or ratified under the policy if the Committee authorizes it according to the terms of the policy. Related person transactions of an ongoing nature are reviewed annually by the Committee. The definition of “related person transactions” for purposes of the Policy covers the

transactions that are required to be disclosed under Item 404(a) of Regulation S-K under the Securities Exchange Act.

Aircraft Usage. William A. Furman, the retired Executive Chairman of the Board of Directors of the Company, is the ultimate owner of a private aircraft managed by a private independent management company. From time to time, the Company’s business requires charter use of privately owned aircraft, which may include the aircraft owned by Mr. Furman. During fiscal 2022, charters of the aircraft owned by Mr. Furman were placed with or through the company that manages Mr. Furman’s aircraft aggregating approximately $906,995. The approximate dollar value of the amount of Mr. Furman’s interest in the transactions was $352,376. The fiscal 2022 charters of the aircraft owned by Mr. Furman were reviewed and approved by the Audit Committee in accordance with Greenbrier’s Related Transactions Policy as described in the preceding paragraph.

Contents of Office. In August 2022, in connection with his retirement from all executive offices, Mr. Furman purchased certain pieces of art and office furniture owned by Greenbrier for a total of approximately $50,905. The company obtained an independent appraisal, and Mr. Furman purchased the artwork and furniture at the appraised value. The transaction and the related appraisal were reviewed and approved by the Audit Committee in accordance with Greenbrier’s Related Transactions Policy.

Indebtedness of Management. Since the beginning of fiscal 2022, none of our directors or executive officers has been indebted to us.

Majority Voting Policy

The Company’s Corporate Governance Guidelines establish majority voting procedures with respect to the election of directors. Pursuant to the policy, in an uncontested election of directors, any nominee who has received a greater number of votes withheld from his or her election than votes for his or her election will, within two weeks following certification of the shareholder vote by the Company, submit a written resignation offer to the Board for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will consider the resignation offer and, within 60 days following certification of the shareholder vote by the Company, make a recommendation to the Board concerning the acceptance or rejection of the resignation offer.

In determining its recommendation to the Board, the Nominating and Corporate Governance Committee will consider all factors its members deem relevant, which may include:

 

    the stated reason or reasons, if any, why shareholders who cast withhold votes for the director did so;
 

 

 

 

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          CORPORATE GOVERNANCE

 

    

 

    the qualifications of the director (including, for example, whether the director serves on the Audit Committee of the Board as an “audit committee financial expert” and whether there are one or more other directors qualified, eligible and available to serve on the Audit Committee in such capacity); and

 

    whether the director’s resignation from the Board would be in the Company’s best interests and the best interests of the Company’s shareholders.

The Nominating and Corporate Governance Committee will also consider a range of possible alternatives concerning the director’s resignation offer as the Committee deems appropriate, which may include:

 

    acceptance of the resignation offer;

 

    rejection of the resignation offer; or

 

    rejection of the resignation offer coupled with a commitment to seek to address the underlying causes of the majority-withheld vote.

Under the policy, the Board will take formal action on the recommendation within 90 days following certification of the shareholder vote by the Company. In considering the recommendation, the Board will consider the information, factors

and alternatives considered by the Nominating and Corporate Governance Committee and any additional information, factors and alternatives the Board deems relevant. Any director tendering a resignation offer will not participate in the Committee’s or Board’s consideration of whether to accept such resignation offer. The Company will publicly disclose, in a Current Report on Form 8-K filed with the SEC, the decision of the Board. The Board will also provide an explanation of the process by which the decision was made and, if applicable, its reasons for rejecting the tendered resignation.

Communication with the Board

Shareholders and other interested parties may communicate with members of the Board by mail addressed to the Chair of the Board, to any other individual member of the Board, to the full Board, to the non-management directors as a group or to a particular committee of the Board. In each case, such correspondence should be sent to the Company’s headquarters at One Centerpointe Drive, Suite 200, Lake Oswego, OR 97035 or via email to investorrelations@gbrx.com. Such communications are distributed as appropriate. Please note that communications with directors does not constitute service of process to the Company and that nominations and shareholder proposals must be submitted in accordance with the procedure set forth on pages 49-50.

 

 

 

 

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PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors appointed Greenbrier’s new CEO (Lorie L. Tekorius) to the Board in March 2022. Under Greenbrier’s bylaws, directors appointed by the Board stand for election at the next Annual Meeting of Shareholders, which is in January 2023. Ms. Tekorius is standing for election as a Class III Director. The four other nominees recommended by our Nominating and Corporate Governance Committee and by the Board of Directors for election are Wanda F. Felton, Graeme A. Jack, David L. Starling and Wendy L. Teramoto as Class II Directors. The Class II candidates are nominated to serve a three-year term, until the Annual Meeting of Shareholders in 2026, or until their respective successors are qualified and elected. Ms. Tekorius will serve a one-year term and is expected to stand for election in January 2024 with the other Class III Directors or until her successor is qualified and elected.

If a nominee is unable or unwilling to serve as a director at the date of the applicable Annual Meeting or any adjournment or postponement thereof, the proxies may be voted for a substitute nominee, designated by the proxy holders or by the present Board of Directors to fill such vacancy, or for the other nominees named without nomination of a substitute, or the number of directors may be reduced accordingly. The Board of Directors has no reason to believe that any of the nominees will be unwilling or unable to serve if elected a director.

Under Oregon law, the directors who receive the greatest number of votes cast will be elected directors. Abstentions and broker non-votes will have no effect on the results of the vote.

 

LOGO  

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MS. FELTON, MR. JACK, MR. STARLING, MS. TERAMOTO AND MS. TEKORIUS. UNLESS MARKED OTHERWISE, PROXIES RECEIVED WILL BE VOTED FOR THE ELECTION OF THE FIVE NOMINEES.

 

 

Directors are divided into three classes, with three directors in Class I and four directors each in Class II and Class III. Typically, one class is elected each year for a three-year term. The following table sets forth certain information about each nominee for election to the Board and each continuing director.

 

Name

  Age     Independent     Positions    

Director

Since

    Committee
Memberships
   

Expiration of  

Current  

Term  

 

Class I Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thomas B. Fargo

    74       LOGO       Chair of the Board       2015       C Chair, G       2025  

Antonio O. Garza

    63       LOGO       Director       2021       G       2025    

James R. Huffines

    71       LOGO       Director       2021       A, F       2025    

Class II Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Wanda F. Felton

    64       LOGO       Director       2017       A, F, G       2023  

*Graeme A. Jack

    71       LOGO       Director       2006       A Chair, F, C, G       2023  

*David L. Starling

    72       LOGO       Director       2017       C, G       2023  

*Wendy L. Teramoto

    48       LOGO       Director       2019       A, C, F       2023  

Class III Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

William A. Furman

    78        
Director and
former Executive Chairman
 
 
    1994         2024  

Charles J. Swindells

    80       LOGO       Director       2005         2024  

*Lorie L. Tekorius

    55         Director and Chief Executive Officer       2022         2023    

Kelly M. Williams

    58       LOGO       Director       2015       A, C, G Chair       2024  

 

LOGO Independent       A Audit Committee       C Compensation Committee       F Audit Committee Financial Expert       G Nominating and Corporate Governance Committee   *Nominees for Election

 

 

 

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2022 DIRECTOR COMPENSATION

 

Members of the Board who are our employees are not separately compensated for serving on the Board. Non-employee directors receive an annual cash retainer fee of $80,000. The Audit Committee chair receives an additional annual cash retainer of $20,000, and each other committee chair receives an additional annual cash retainer of $15,000. The Chair of the Board (formerly the “Lead Director”), Admiral Fargo, receives an additional cash retainer of $70,000. Members of the Audit Committee receive an additional annual cash retainer of $10,000, and Members of the Compensation and Governance Committees receive an additional annual cash retainer of $7,500. All annual retainer fees are paid quarterly in arrears.

For fiscal 2022, under the terms of the Company’s Stock Incentive Grant Program for Non-Employee Directors under the 2021 Stock Incentive Plan, our non-employee directors received an award of restricted stock units for a number of shares of the Company’s Common Stock calculated by dividing $145,000 by the average closing price for the 30 trading days immediately preceding the grant date, rounded up to the nearest whole share. The awards are made annually, immediately after the close of each annual meeting, with such shares vesting on the date of the next annual meeting of shareholders or, if a director is

not re-elected, on the one-year anniversary of the date of grant (if earlier). If a non-employee director is appointed between annual meetings of shareholders, then cash retainer fees and grants of restricted stock units occur on a pro rata basis. No such initial award was made in fiscal 2022.

The Company has stock ownership guidelines for its non-employee directors, under which all non-employee directors of the Company are required to acquire and retain holdings of Company stock with a value equal to five times the annual cash retainer fee. All of our nine non-employee directors have satisfied the director share ownership expectation.

In the event a non-employee director ceases to be a director due to death or disability, or because he or she is not re-elected to serve an additional term as a director, any unvested restricted stock units shall immediately become fully vested. If a non-employee director ceases to be a director by reason of removal or resignation as a member of the Board, any unvested restricted stock units shall automatically be forfeited, and the shares subject to such award shall be available for grant under the 2021 Stock Incentive Plan.

 

 

The following table summarizes the compensation of the non-employee Board members for fiscal year 2022.

 

Name

  

Fees Earned
or Paid in Cash

($)

  

Stock Awards

($)(1)

  

All Other
Compensation

($)

  

Total    

($)    

Thomas B. Fargo

  

180,000     

  

148,684

  

—          

  

328,684      

Wanda F. Felton

  

97,500     

  

148,684

  

—          

  

246,184      

Antonio O. Garza

  

86,250     

  

148,684

  

—          

  

234,934      

James R. Huffines

  

88,333     

  

148,684

  

—          

  

237,017      

Graeme A. Jack

  

125,000     

  

148,684

  

—          

  

273,684      

Duane C. McDougall (Retired January 2022)

  

52,500     

  

—      

  

—          

  

52,500      

David L. Starling

  

95,000     

  

148,684

  

—          

  

243,684      

Charles J. Swindells

  

80,000     

  

148,684

  

120,000(2)       

  

348,684      

Wendy L. Teramoto

  

97,500     

  

148,684

  

—          

  

246,184      

Donald A. Washburn (Retired January 2022)

  

40,000     

  

—      

  

—          

  

40,000      

Kelly M. Williams

  

120,000     

  

148,684

  

—          

  

268,684      

 

(1)

Amounts shown in this column are calculated based upon the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Such amounts may not correspond to the actual value that will be realized by them if and when the restricted stock awards vest. Each director, except for Mr. McDougall and Mr. Washburn, received 3,327 restricted stock units during fiscal 2022. As of August 31, 2022, each director, except for Mr. McDougall and Mr. Washburn, held 3,327 unvested restricted stock units and 68 dividend equivalent rights that are subject to the same vesting, payment and other terms, conditions and restrictions as the restricted stock units. As of August 31, 2022, Mr. McDougall and Mr. Washburn held no unvested restricted stock units.

(2)

Represents consulting fees paid to Mr. Swindells in fiscal 2022 pursuant to a consulting agreement with the Company entered into in January 2016.

 

 

 

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EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

While we regularly engage with shareholders throughout the year, there is a very short window between the publication of proxy advisor reports and the Annual Meeting. We encourage shareholders to reach out to us as early as possible at investorrelations@gbrx.com if you would like a meeting with our Board or Management to discuss this Proxy Statement.

Executive Summary

This section discusses material information relating to our executive compensation program and plans for our named executive officers or “NEOs” for fiscal 2022:

 

William A. Furman,

Executive Chairman

(Principal Executive Officer until August 31, 2022)

Lorie L. Tekorius,

Chief Executive Officer and President

Alejandro Centurion,

Executive Vice President and President of Global Manufacturing Operations

Brian J. Comstock,

Executive Vice President, Chief Commercial & Leasing Officer

Adrian J. Downes,

Senior Vice President, Chief Financial Officer and Chief Accounting Officer

 

Say-on-Pay Vote and Shareholder Engagement on Compensation

We continued our consistent practice of shareholder engagement and summarized the topics discussed on page 14. We were pleased that 88% of voting shareholders approved, on an advisory basis, the compensation of the named executive officers as reported in the 2022 proxy statement. The Compensation Committee believes the voting result reflects strong and continuing support for the Company’s executive compensation program and considers the outcome of the annual advisory vote in our evolving compensation practices.

An outcome of our engagement since the filing of our last proxy statement was to change the TSR modifier element in our long-term performance equity program to be a standalone metric.

 

 

 

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Fiscal 2022 Focus and Accomplishments

Fiscal 2022 was a year of significant transition. Our business began to emerge from the COVID-19-related downturn, navigated supply chain disruptions and managed through labor shortages while increasing production to meet the improving demand environment. We increased production rates by 50% globally, including a production increase of 75% in our core North American market, which required a headcount increase of 35%.

The safety and well-being of our employees remains Greenbrier’s primary focus and responsibility. We are proud that our safety results in fiscal 2022 set a new record – even with the significant increase in headcount and labor hours.

Against this backdrop, the Board guided Greenbrier through the retirement of our co-founder, William A. Furman. The appointment of Lorie L. Tekorius as CEO in March 2022 and William Krueger as the President of Manufacturing Operations in September 2022 completes a multi-year process resulting in a new senior management team and positions the company to grow shareholder value.

Additional accomplishments:

 

   

Maintained a strong market share to improve profitability and support future growth

 

LOGO

 

   

Grew new railcar backlog by 2,900 units and $670 million of value from prior year

 

   

Fixed the interest rate of the majority of Greenbrier’s long-term debt to minimize risk in the rising rate environment

 

   

Continued an annual dividend of $1.08 per share. Greenbrier has returned $169.7 million to shareholders through dividends over the last five fiscal years and sustained a strong balance sheet and profitability in a highly cyclical business. Fiscal 2022 marks eight consecutive years of dividend payments by the Company and saw record dividend payments of $35.8 million.

 

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EXECUTIVE COMPENSATION    

 

    

 

Payouts and Pay-for-Performance Alignment

SHORT-TERM INCENTIVE AWARD GOALS AND PAYOUTS

 

The Compensation Committee set robust financial and strategic goals in fiscal 2022. Due to the timing of Greenbrier’s fiscal year, compensation targets for fiscal 2022 were set in August 2021. At this time, global COVID cases were averaging nearly 17 million each month and new strains were regularly emerging. The contours and potential impact of the pandemic made this one of the most challenging times in Greenbrier’s history to set incentive compensation goals.

 

For fiscal 2022, the Compensation Committee set an annual incentive EBITDA goal of $180 million and an EPS goal of $0.66, reflecting the unusual environment including ongoing supply chain disruptions and labor issues although the freight rail sector was gradually improving. The two financial metric goals are weighted at 40% each and the Strategic goals are weighted at 20%. These metrics are designed to align the financial performance of the Company with shareholder returns.

  LOGO

 

In 2022, EBITDA was set higher than the prior year achievement. When setting the goal for 2022 EPS, the Compensation Committee considered the fact that 2021 Adjusted EPS included debt extinguishment adjustments and tax benefits from the CARES Act that benefited EPS but had no impact on EBITDA. Excluding these items, the EPS target in 2022 was set higher than 2021.

Fiscal 2022 EBITDA was $231.3 million, resulting in a payout of 142.8%, and EPS was $1.40, resulting in a payout of 200.0%. These account for 80% of the payout determination. The Strategic Goals payout was 137.5%, which account for 20% of the payout determination. See below for discussion of the Strategic Goals. This resulted in a blended payout of 164.6% of the target award level to the NEOs. Management achieved this financial performance through a 50% increase to new railcar production, including a production increase of more than 75% in our core North American market, enabled by a 35% increase in headcount and a stronger-than-anticipated demand environment for leased railcars. Greenbrier will sell (“syndicate”) new railcars with leases attached to financial partners, generating more profit than selling a railcar without a lease attached.

 

 

 

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The Compensation Committee made no adjustments to EBITDA and EPS in 2022. EBITDA, Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures that management believes are helpful in evaluating our financial performance. See Appendix B for a reconciliation of these measures to the most comparable GAAP measures.

 

LOGO    LOGO

 

(1)

2021 EBITDA excludes $5.1 million of additional COVID-19 employee safety expenses beyond what was originally expected in 2021.

(2)

2021 EPS excludes $0.20 of debt extinguishment and incremental interest expense and $0.12 for COVID-19 expenses that exceeded expectations.

STRATEGIC GOALS

For fiscal 2022, the strategic goals set for NEOs in the annual incentive program were tied to successful execution of succession plans for the CEO, Manufacturing President, key talent development and to execute to Inclusion, Diversity, Equity, Access and Inclusion (IDEAL) goals. The NEOs could have earned between 0% and 150% payout based on achievement of the strategic goals. The Compensation Committee determined that a 137.5% payout was appropriate for the successful completion of these goals.

Strategic Achievements for fiscal 2022:

 

 

  Successfully executed CEO transition in March 2022, as well as a transition plan for the President of Global Manufacturing Operations. Other senior leader transitions included the head of Global Sourcing, head of the Engineering organization and the Chief Information Officer. With these thoughtful and seamless transitions, the leadership team is poised to continue advancing the business.

 

  Established an Employee Resource Groups (ERGs) framework as a way to empower employees with a particular commonality to connect and support each other. Original goal was to begin with two groups but a total of six ERGs were started by employees in fiscal 2022.

 

  Launched IDEAL onboarding program that facilitates a consistent experience for new hires with a clear vision of our company and our values.

 

  Conducted an employee survey to gather employee perceptions and establish a baseline to measure progress. 72% of employees across our U.S. locations participated. Companywide results and site-specific action plans were communicated throughout the organization.

 

 

 

 

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EXECUTIVE COMPENSATION    

 

    

 

LONG-TERM PERFORMANCE EQUITY AWARDS: GOALS AND VESTING

The Compensation Committee sets rigorous targets for our long-term performance equity awards as demonstrated in vesting percentages over the last three years. Targets are set based on Greenbrier’s new railcar backlog and production schedules, current industry demand forecasts derived from external and internal projections and business unit-specific growth initiatives for the upcoming three-year measurement period.

The 2022 long-term performance equity awards vested over a three-year performance period that began in September 2019. The Compensation Committee’s targets for these awards were EBITDA and ROIC with a TSR modifier. The EBITDA targets were set higher than in any previous year with the anticipation of industry recovery and growth resulting from acquisitions. Targets were set pre-COVID and based on expected industry deliveries at the time. Further, the Threshold ROIC was set at Target to encourage management to execute on synergies and de-lever after the largest acquisition in Company history, which was completed in July 2019. EBITDA and ROIC are non-GAAP financial measures that mana

gement believes are helpful in evaluating our financial performance. See Appendix B for an explanation of how these measures are calculated.

Fiscal 2020—2022 Long-Term Performance Equity Goals ($ in millions)

 

    

EBITDA

(80% Weighting)

    

ROIC

(20% Weighting)

   Payout

Threshold (Minimum)

   $ 770      11%      50%

Target (Goal)

   $ 1,100      11%    100%

Maximum

   $ 1,463      15%    200%

Actual

   $ 658      5%        0%

Actual industry deliveries were over 30% lower than expectations when the metrics were established in October 2019 due to the COVID-19 pandemic and resulting market pressures. No payout was achieved for long-term performance awards for the fiscal 2020 to 2022 performance period as the actual results did not exceed the threshold performance goal for either metric. No adjustments were made to our performance goals or payout levels even though the COVID-19 pandemic impacted the majority of the vesting period.

 

 

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COMPARATIVE PERFORMANCE

The Compensation Committee and full Board regularly review our performance compared to Trinity Industries, Inc. (ticker: TRN), our primary direct competitor in the railcar manufacturing industry. We have not included Freightcar America, Inc. (ticker: RAIL) in this analysis due to the small size of their company and position in the competitive landscape. Greenbrier has consistently generated higher returns than Trinity on a one-, three- and five-year basis. ROIC is a non-GAAP financial measure that management believes is helpful in evaluating our financial performance. See Appendix B for a reconciliation of this measure to the most comparable GAAP measure.

1-Year Metrics*

(in percent)

 

Company

ROE ROA ROIC

The Greenbrier Companies

4.1 1.7 2.3

Trinity Industries

5.2 0.9 1.9

                        Source: S&P Capital IQ and public company filings.

3-Year Metrics*

(in percent)

 

Company

ROE ROA ROIC

The Greenbrier Companies

4.5 2.1 3.4

Trinity Industries

(1.3) (0.4) 2.6

                        Source: S&P Capital IQ and public company filings

5-Year Metrics*

(in percent)

 

Company

ROE ROA ROIC

The Greenbrier Companies

6.7 3.4 4.7

Trinity Industries

2.4 1.2 2.6

                        Source: S&P Capital IQ and public company filings. Trinity completed the spin-off of Arcosa, Inc. in November 2018.

*Greenbrier operates on a fiscal year ending August 31 while our direct competitor, Trinity Industries, operates on a calendar year ending December 31. For the purpose of providing a similar comparison to our direct competitor, our performance metrics were based on the last twelve months ending May 31st. At the time of the drafting of this proxy, Trinity Industries’ latest available reported financials were as of June 30, 2022. For reconciliation see appendix B.

Over the three-year period from September 1, 2019, to August 31, 2022, Greenbrier’s Total Shareholder Return has performed in-line with the Russell 3000 and S&P 600 Small Cap indices, and below Trinity performance. Since Greenbrier operates in a cyclical industry, we believe that Greenbrier’s share price was impacted and amplified by the global economic turmoil of the COVID-19 pandemic and war in Ukraine. Stock market fluctuations that are disconnected from company fundamentals can inappropriately discount or ignore the long-term trends at Greenbrier, including substantial long-term revenue and market share growth and consistent returns of capital to shareholders through dividends. We believe Greenbrier’s one-year TSR reflects an amplification of this cyclicality while Trinity benefits from the stability of their significant railcar lease fleet.

 

Company / Index

  

One-Year TSR    

(9/1/21 – 8/31/22)    

 

Three-Year TSR    

(9/1/19 – 8/31/22)    

The Greenbrier Companies, Inc.

   (25.1%)   12.4%

Russell 3000

   (13.3%)   11.9%

S&P 600 Small Cap

   (12.1%)   10.4%

Trinity Industries, Inc.

   (3.8%)   17.6%

                        Source: Compustat and IBES, Equilar.

 

 

 

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EXECUTIVE COMPENSATION    

 

    

 

Fiscal 2022 CEO and Executive Chairman Pay

Lorie L. Tekorius became Greenbrier’s CEO on March 1, 2022. Ms. Tekorius is a long-tenured leader within Greenbrier and a recognized leader within the industry, bringing significant industry and company-specific knowledge. The Board believes that appropriately incenting Ms. Tekorius is key for stability during this leadership transition, which comes at a pivotal moment in our business operations. Our compensation program is designed to align the CEO’s compensation with Company performance. Stock-based compensation provides a direct incentive for improved share price performance. Ms. Tekorius’ equity risk, including unvested restricted stock units, as of August 31, 2022, was over 246,000 shares, valued at approximately $7.0 million. The Board and Ms. Tekorius are equally aware of the impact market volatility in our share price has had on total shareholder return performance. The Board believes that Ms. Tekorius’s compensation is clearly aligned with the interests with shareholders.

William A. Furman was Greenbrier’s Executive Chairman until his retirement from all executive offices on August 31, 2022. His compensation was primarily based on an employment agreement entered into before 2010. Upon the outbreak of COVID-19, Mr. Furman voluntarily reduced his base salary by nearly 25% and opted to receive payment of his fiscal 2020 and 2021 annual incentive awards in stock, not cash, to support Greenbrier’s liquidity goals. Mr. Furman worked closely with the Board and executive management team over the past two years to position the Company for long-term success and for a smooth transition following his retirement. Mr. Furman remains a top 20 shareholder and as of September 1, 2022, his total equity risk, including unvested restricted stock units, is over 522,000 shares valued at approximately $14.9 million.

As shown by the below-Target long-term performance payouts for multiple years in the Long-Term Performance Vesting Percentage chart on page 23, including no payout in fiscal 2022, there is a strong link between pay and performance.

Executive Compensation Program for Fiscal 2022

EXECUTIVE COMPENSATION PRINCIPLES

The Compensation Committee designed the Company’s executive compensation program to be consistent with the goals of its executive compensation philosophy: to drive performance and increase shareholder value. The current compensation strategy is designed to strengthen and continually reinforce the link between pay and performance.

The objectives of our executive compensation program are to:

 

   

Align the interests of key executives with the long-term success of the business, our shareholders and other stakeholders

 

   

Attract, develop, retain and motivate key executives to drive our business and financial performance

 

   

Link a significant amount of executive compensation to achievement of pre-established financial metrics and business goals that are directly tied to our overall business strategy

 

   

Incent the management team to create long-term shareholder value by balancing growth and return on capital at all points in the business cycle

Our compensation principles state that:

 

   

A significant portion of compensation should be performance-based

 

   

Total direct compensation is competitive with the market and based on the complexity of an executive’s assignment, years and depth of experience, and readiness for leadership in the CEO and key executive succession plan

 

   

Annual incentive awards should be aligned with the Company’s operating, financial and strategic objectives while considering the cyclical nature of our business

 

   

Long-term incentive plans should promote retention and reward absolute performance as well as relative performance to appropriate peers

 

   

A meaningful equity stake helps ensure that executive and shareholder interests are aligned

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

EXECUTIVE COMPENSATION PROGRAM DESIGN

The following table provides a snapshot of the elements of pay for NEOs and explains why each element is provided.

 

         
Incentive Type    Compensation Element    What the Element Rewards    Key Features & Purpose    Form of Settlement

Fixed

   Base Salary   

Individual performance while considering market pay levels, specific responsibilities and experience of each NEO

 

  

  Attract and retain talent

 

  Provide financial certainty

   Cash
 

Performance-

Based

   Annual Incentive    Achievement of specific financial and strategic goals   

•  Drive achievement of key business results on an annual basis

 

   Cash
  

 

Long-Term Equity

  

 

Achievement of specific financial

goals including relative financial

performance

  

 

•  Reward achievement of long-term objectives over a three-year performance period

 

•  Directly ties interests of our NEOs to those of our shareholders

 

  

 

GBX

Shares

Time-Based

   Long-Term Equity    Creation of long-term shareholder value   

  Retain talent

 

  Vest ratably over a three-year period at then stock price

 

  

GBX

Shares

Rationale for Selection of Performance Metrics

The Compensation Committee considers a variety of factors including annual input generated from shareholder engagement, the macro business environment, backlog of Company and industry orders, expected delivery schedules and data related to the railroad industry that affects demand including velocity of the railroads, available railcar supply, and railcar loading trends and forecasts by commodity and railcar type.

 

 

 

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Table of Contents

LOGO

    

EXECUTIVE COMPENSATION    

 

    

 

EXECUTIVE COMPENSATION PRACTICES

 

 

CHANGES THIS YEAR

   
LOGO           

 

TSR Metric Based on shareholder feedback, for fiscal 2023 we have restructured the relative TSR metric in the long-term performance equity program to be a weighted metric rather than a modifier.

 

 

WHAT WE DO

   

 

LOGO        

  

 

 

Limits on Awards The number of shares or dollar value of awards an employee may receive in any fiscal year is capped.

   

 

LOGO        

  

 

Pay-for-Performance 62% of our CEO’s, 71% of the Executive Chairman’s and 64% of our other NEOs total possible direct compensation is performance-based.

 

   
LOGO           

 

Robust Stock Ownership Guidelines We have stock ownership guidelines of 6.0x base salary for our CEO, 3.0x base salary for other Executive Officers and 5.0x annual cash retainer for directors.

 

   
LOGO           

 

 

Performance Weighting RSU grants are weighted at least 60% performance-based and 40% time-based for our NEOs.

   
LOGO           

 

Stock Retention Requirements Our NEOs are expected to retain 50% of the after-tax value of compensatory awards until stock ownership guidelines are met.

 

   
LOGO           

 

Annual “Say-on-Pay” Vote Our shareholders are given an annual advisory vote to approve our executive compensation programs. Approximately 88% of shareholders approved the 2022 advisory vote.

 

   
LOGO           

 

Clawback Policy Our policy provides for recovery of performance-based equity awards and incentive compensation paid to executive officers in the event of an accounting restatement due to material noncompliance with financial reporting requirements under federal securities laws.

 

   
LOGO           

 

 

Independent Compensation Committee 100% independent directors on the Compensation Committee.

   
LOGO           

 

Independent Compensation Consultant The Compensation Committee retains an independent compensation consultant and reassesses independence annually.

 

   
LOGO           

 

Annual Review of Compensation Program The Compensation Committee reviews all our compensation programs annually for best practices with input from our compensation consultant.

 

   
LOGO           

 

Annual Compensation Risk Assessment The Compensation Committee conducts an annual risk assessment of our compensation programs to ensure that they do not promote undue risk taking.

 

   
LOGO           

 

Grandfathered Employment Agreements We no longer enter into employment agreements with new executive officers. The legacy employment agreements were with Mr. Furman and Mr. Centurion and are no longer in place after their retirements from executive offices on August 31, 2022.

 

   
LOGO           

 

 

Minimum Vesting Requirements The plan provides for a minimum vesting period of at least one year.

   
LOGO           

 

 

Shareholder Engagement Ongoing engagement with our institutional shareholders regarding our compensation policies and practices.

   
LOGO           

 

 

Measurement Period The measurement period for long-term incentives is three years.

   
LOGO           

 

 

Responsible Share Usage The Compensation Committee reviews share usage for RSU awards annually.

 

WHAT WE DON’T DO

   

 

LOGO        

  

 

Hedging/Pledging of Company Stock We prohibit our officers and directors and insider employees from hedging and short selling our publicly traded stock. Our directors and executive officers are prohibited from margining our publicly traded stock and prohibited from pledging our publicly traded stock without advance clearance.

 

   

 

LOGO        

  

 

Change of Control (“COC”) We do not accelerate equity awards upon a COC so long as the acquiring company assumes or continues the awards. Performance-based awards vest only based on actual results measured against performance goals as of the COC. The COC definition excludes transactions with affiliates and corporate reorganizations.

 

   

 

LOGO        

  

 

Single-Trigger Change of Control Vesting We do not provide single-trigger acceleration of vesting for equity or cash severance payments upon a change of control. We require both a change of control and termination of an executive’s employment before vesting is accelerated, or severance payments are made (double-trigger).

 

   

 

LOGO        

  

 

 

Tax Gross-Ups We do not provide tax gross-ups.

   

 

LOGO        

  

 

 

Option Repricing We do not allow option repricing.

   

 

LOGO        

  

 

 

Dividends on Unvested Shares We do not pay dividends on unearned shares or RSUs.

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

Executive Compensation Paid for Fiscal 2022

Our executive compensation program elements consist of base salary, annual incentive and long-term equity incentive, which has performance-based and time-based components. In fiscal 2022, 62% of actual total direct compensation for our CEO, 71% for our Executive Chairman and 64% for our other NEOs was performance based. Our other NEOs performance percentage of total direct compensation was higher than our CEO’s due to the additional incentive compensation for Mr. Centurion in fiscal 2022.

 

 

LOGO

 

BASE SALARY

In establishing salary levels, we consider market pay levels, the specific responsibilities and experience of each NEO, and his or her individual performance. As part of its annual review, the Compensation Committee may adjust base salaries for:

 

  Annual merit increases

 

  Changes in role, such as promotions or added responsibilities

 

  Market adjustments to promote retention

Mr. Furman, our former Executive Chairman, voluntarily reduced the amount of his base salary from $1,050,000 per year to $800,000 per year in April 2020 in response to market conditions and the impact of the COVID-19 pandemic on our business. The reduced salary remained in effect during fiscal 2022. Base salaries for Ms. Tekorius, Mr. Comstock and Mr. Downes were adjusted in January 2022 to reflect changes in their respective roles and responsibilities in conjunction with succession plan transitions that are predominantly complete as of the end of fiscal 2022. Mr. Centurion received a last and final base salary adjustment to compensate him through the transition period and because he had not received an adjustment to base salary in the prior two fiscal years.

ANNUAL INCENTIVE AWARDS

Target incentive opportunities under the annual incentive plan for NEOs are expressed as a percentage of base salary and are intended to be competitive with the market.

 

    Target    

Named Executive Officer

 

 

 

 (as a % of base salary)      

 

   

William A. Furman

  115%       

Lorie L. Tekorius

  105%       

Alejandro Centurion

  100%       

Brian J. Comstock

    95%       

Adrian J. Downes

    85%         

Our NEO’s fiscal 2022 annual incentive awards are based on achievement of pre-established financial performance goals for 80% of the award potential and strategic goals for 20% of the award potential. Awards earned can range from 0% to 200% of an individual’s target incentive opportunity for the financial goals based on actual financial results (with the threshold payout level set at 50% for each respective financial metric) and 0% to 150% for Strategic goals. Although not used in fiscal 2022, the CEO has discretion to recommend to the Compensation Committee (and the Compensation Committee has discretion in the case of the CEO) to make a downward (but not upward) adjustment of any metrically calculated award of up to 20% to reflect individual performance. The actual fiscal 2022 payouts for the NEOs are presented in the Summary Compensation Table under Non-Equity Incentive Plan Compensation.

The performance metrics, their weighting, targets and payout levels are established at the beginning of each fiscal year by the Compensation Committee with input from management and the independent compensation consultant. This process includes a thorough discussion of the risks and variables of management’s financial plan for the upcoming fiscal year including existing backlog, production schedules and forecasts of industry demand. The level of financial performance required for the maximum payout is established based on the Compensation Committee’s assessment of the level of performance that shareholders would likely consider superior in view of the economic outlook for Greenbrier and its industry in particular. A comparable process is used to establish the threshold or minimum performance level, defined as the level of financial performance below which no incentive payment is appropriate.

In fiscal 2021, the Compensation Committee established a retirement date of September 1, 2023, and a transition arrangement with Mr. Centurion. The arrangement included an incentive to accomplish specific pre-determined goals, covering the transition period, to ensure a seamless manufacturing leadership transition while also navigating the ongoing effects of COVID-19, ramping up production activity in North America and managing through supply chain issues and talent shortages. As part of this agreement, Mr. Centurion had the opportunity to earn

 

 

 

 

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EXECUTIVE COMPENSATION    

 

    

 

additional short-term incentive compensation in fiscal 2022 tied to specific, pre-established performance milestones that addressed operational improvements in North America, implementations of the North American manufacturing system in Europe and talent pipeline and succession placements. The threshold payout is 75% of the target bonus of 105% and a maximum payout of 200% of target. Mr. Centurion’s performance resulted in achievement of 101.1% of the target bonus amount.

Target Setting for Financial Metrics (80%)

For fiscal 2022, achievement of Earnings Per Share (EPS) comprised 40% of each NEO’s total annual incentive and EBITDA made up 40%. Our philosophy is to incent management in both strong and weak markets. Our EBITDA and EPS goals are reflective of our business cycle impacted by emerging COVID-19 variants, supply chain disruptions, continued economic uncertainty amidst a backdrop of slowly improving demand in the freight rail market. Threshold goals continue to reflect a reduced payout percentage of 50%, down from 75% in prior years.

The Compensation Committee balances annual incentive target setting with the need for retention of talent across the organization especially as the long-term incentive plan metrics were not adjusted to reflect the impact of the COVID-19 pandemic and resulting economic volatility. The following table sets forth the financial metrics and goals under the fiscal 2022 annual incentive plan.

2022 Annual Incentive Goals

($ in millions except per share amounts)

 

 

 

  

EBITDA

  

EPS

  

Payout     

 

Threshold (Minimum)

 

   $125

 

   $0.25

 

     50%     

 

 

Target (Goal)

 

   $180

 

   $0.66

 

   100%     

 

 

Maximum

 

   $300

 

   $1.33

 

   200%     

 

Achievement below threshold results in no payout. Payout amounts are interpolated between threshold and target or target and maximum, as appropriate. EBITDA is a non-GAAP financial measure that management believes is helpful in evaluating our financial performance. See Appendix B for a reconciliation of this measure to the most comparable GAAP measure.

Strategic Goals (20%)

For fiscal 2022, achievement of strategic goals made up 20% of each NEO’s total annual incentive award opportunity as detailed on page 22. The Compensation Committee determines the level of achievement of strategic goals for all executive officers (including NEOs) as a group, on a scale of 0 – 150%.

LONG-TERM PERFORMANCE EQUITY AWARDS

Process for Granting Awards

Grants are made in October following the close of the prior fiscal year, approval of the program for the coming fiscal year and approval by the Compensation Committee of the equity pool for grants. We grant RSUs to NEOs at the same time we grant them to other members of management.

The value of the annual long-term incentive awards to each NEO is divided between two types of equity-based awards: time-based RSUs and performance-based RSUs. The weighting of RSU grants is 60% performance-based, measured over a three-year measurement period and 40% time-based, vesting ratably over three years for all NEOs with the exception of Mr. Furman’s award, which was 70% performance-based and 30% time-based. Of Mr. Furman’s 70% performance-based RSUs, 75% are tied to Company financial metrics and the remaining 25% are tied to CEO succession objectives. The 30% time-based RSUs and the performance-based RSUs that vested based on achievement of CEO succession objectives vested September 1, 2022, the date on which Mr. Furman’s employment ended following his retirement as an executive officer on August 31, 2022.

We may make off-cycle or one-time grants to newly hired executives or to NEOs in connection with significant increases in responsibilities, promotions or special circumstances as approved by the Compensation Committee. In fiscal 2022 there were no off-cycle or one-time grants made to NEOs.

To ensure responsible use of shares under our equity program, the Compensation Committee approves a pool for each annual RSU grant with assistance from Mercer, our independent compensation consultant. We consider our actual burn rate, a reasonable multiplier based on share price volatility and current availability of shares under our stock incentive plan.

In determining the specific number of RSUs to be granted to individuals, the intended value of the award was converted into a number of shares by dividing the value by the prior 30 trading day average closing market price of the Company’s Common Stock as reported on the NYSE measured from the day prior to the date of grant of the award. Grants awarded to the NEOs in fiscal 2022 are detailed in the Grants of Plan-Based Awards in Fiscal 2022 table on page 36.

Dividends Paid Only on Vesting

We do not pay dividends on unearned time-based or performance-based RSUs.

Award Types and How Each Fits our Program

Time-Based RSUs

Time-based RSUs are designed to create long-term shareholder value and to retain highly qualified leaders. Time-based RSUs

 

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

generally vest annually in the form of Company common stock over a three-year period beginning on the first anniversary following the date of the grant. In fiscal 2022, we made two exceptions to vesting of time-based RSUs in the grants to Mr. Furman and Mr. Centurion in conjunction with their planned retirements as detailed in the Executive Compensation Tables. Mr. Furman’s time-based RSUs vested in full on September 1, 2022, the date on which Mr. Furman’s employment following his retirement as an executive officer on August 31, 2022. Mr. Centurion’s time-based RSUs will vest in full on September 1, 2023, the date on which Mr. Centurion’s employment will end following his retirement as an executive officer on August 31, 2022.

Performance-Based RSUs

Performance-based RSUs are designed to focus attention on, and to reward the achievement of, our long-term financial objectives and sustained appreciation in shareholder value. At the end of the three-year performance period, a percentage ranging from 0% to 200% of the target number of shares initially awarded will be earned based on the extent to which the three-year goals are achieved. For awards granted through fiscal 2022, the resulting payout may be increased or decreased by 10% based on relative TSR performance (i.e., a 100% achievement could become 110% or 90%). The TSR modifier is used if Greenbrier is in the top three or bottom three performers at the end of the three-year measurement period among the compensation peer group for the year in which the award is granted. There was no Performance-Based payout in fiscal 2022 and therefore no TSR modifier was applied.

The value of each performance RSU equals the price of one share of our common stock on the date of grant, with payment of earned performance RSUs made in the form of Greenbrier common stock.

The three-year measurement period beginning on September 1 and ending on August 31 was chosen to coincide with our fiscal year.

Based on shareholder feedback, we have restructured the program for fiscal 2023 to include a weighted relative TSR metric rather than a modifier.

Target Setting of Financial Metrics

Our target setting process, conducted at the beginning of each three-year performance period, includes goals related to profitability and return on invested capital while taking into account the cyclical nature of our business. Our targets are designed to incent behavior that enhances long-term shareholder value at all points in the business cycle.

We establish our objectives depending on where we are in the business cycle. When backlog and demand are high and asset

prices strong, we emphasize earning a higher return. When the market is weak and prices are under pressure, we emphasize making prudent decisions related to production capacity and other considerations, as well as investments at attractive prices, over attempting to earn unrealistic short-term returns. Making intelligent decisions at the right points in the cycle allows us to increase shareholder value over the long term by protecting our core business and market share. When appropriate and supported by the underlying economic conditions and market demand, the Compensation Committee will increase or decrease targets year-over-year to properly incent management.

The Compensation Committee selected EBITDA and ROIC as the metrics for performance RSUs granted in fiscal 2022 for the 2022 – 2024 performance period with a relative TSR modifier to continue to focus on alignment of total shareholder return and executive compensation. As noted above, the Committee has modified the program for fiscal 2023 to include a weighted relative TSR metric, rather than a modifier, as a result of shareholder feedback.

Weighting of the metrics for the fiscal 2022-2024 award is 80% for EBITDA, and 20% for ROIC to emphasize cash flow generation and earnings. Achievement below threshold results in no payout for the respective metric.

Target EBITDA was set at $850 million and target ROIC at 10% for the fiscal 2022 – 2024 performance period. The EBITDA target was set higher than the previous year target, while the ROIC target was unchanged. Both targets reflect an anticipated, but slow, recovery from the lingering effects of the COVID-19 pandemic, supply chain disruptions, talent shortages and the war in Ukraine.

Achievement below threshold results in no payout for the respective metric. Payout amounts are interpolated between threshold and target or target and maximum performance levels, as appropriate. Vesting is independent for each performance criteria.

The Compensation Committee reviewed the use of EBITDA as a metric in both short- and long-term compensation awards. We continue to believe EBITDA is an important measure for incenting both short-term and long-term performance results and correlates with increased shareholder value. This coupled with the ROIC and a relative TSR metric provide alignment with stakeholders.

Mr. Furman’s performance award granted in fiscal 2022 was structured such that 75% of the performance RSUs are subject to the financial performance metrics noted above and 25% are tied to CEO succession objectives.

 

 

 

 

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EXECUTIVE COMPENSATION    

 

    

 

EMPLOYEE BENEFITS

Executive Retirement and Insurance Benefits

Supplemental Retirement Benefits

The Company maintains a Nonqualified Deferred Compensation (NQDC) Plan that permits participants to elect to defer a portion of their compensation in excess of amounts that may be deferred under the Company’s tax-qualified 401(k) plan, and to defer receipt of shares of stock or cash awarded under the Company’s long-term incentive plan. The NQDC Plan does not pay or provide for preferential or above-market earnings. Participants may direct the investment of deferred cash compensation credited to their accounts among a range of investment options similar to those available under the Company’s 401(k) Plan; shares of Company stock deferred under the NQDC Plan may be diversified into other investments. The Company’s executive officers, including its NEOs, are eligible to defer a portion of their compensation under the NQDC Plan. Mr. Comstock and Mr. Downes elected to participate in the NQDC Plan in fiscal 2022; none of the other NEOs elected to defer any portion of their fiscal 2022 cash or equity compensation under the NQDC Plan.

The Company has made discretionary employer contributions on behalf of Mr. Centurion under the target benefit component of its NQDC Plan, which has been discontinued for new participants. Target benefit contributions were designed to provide supplemental retirement benefits to the participating executives in an amount equal to 50% of the executive’s base salary as of age 65 for 15 years. Mr. Centurion has reached age 65 and is no longer eligible to receive employer contributions under the target benefit plan.

The Company makes discretionary contributions under the supplemental retirement program component of the NQDC Plan on behalf of executives who do not participate in the target benefit program, including Messrs. Furman, Comstock and Downes and Ms. Tekorius. Such contributions are credited to a Supplemental Retirement Program account on their behalf under the NQDC Plan. In January 2022, the Compensation Committee approved discretionary contributions equal to 6% of participants’ annual base salary earned plus actual bonus earned for the prior calendar year.

Executive Life Insurance

The Company provides an executive life insurance program to its executive officers and certain other management employees. The Company owns life insurance policies ensuring the executives’ lives and has endorsed the rights to the death benefits to the

participating executives. Upon termination of the executive’s employment, the Company will transfer ownership of the policy to the executive, resulting in taxable income to the executive at

the time of transfer. Each NEO, other than Mr. Furman, participates in the executive life insurance program, and each has an aggregate death benefit amount of $1 million (including previous executive-owned life insurance policies for which no further Company funding is provided) and a target aggregate after-tax cash surrender at age 62. Mr. Centurion’s policy has a value of $200,000 and Ms. Tekorius has a target aggregate after-tax cash surrender value of $125,000. Mr. Comstock and Mr. Downes have no target after-tax cash surrender value.

Perquisites and Other Personal Benefits

The Company maintains a program of certain perquisites for NEOs including the use of Company-owned automobiles or automobile allowances, payment of club membership dues, spousal travel benefits, security for international travel, executive medical benefits, and, if applicable, relocation services for executives. Under his employment contract, Mr. Furman received additional retirement-related perquisites that include the use of a remote office near his primary residence in Nevada for an additional two years, the transfer to him of title of a company-owned automobile, and payment of executive medical insurance and benefits for an additional two years. The aggregate value of total perquisites and other benefits for NEOs in fiscal 2022 was $570,594. Excluding Mr. Furman’s retirement benefits, perquisites were $244,646. Please see the Perquisites and Personal Benefits for Fiscal 2022 table and William A. Furman – Retirement Perquisites and Personal Benefits table on page 36 for additional detail. The Company continues to not provide tax gross-ups for perquisites or personal benefits and no longer enters employment agreements. We regularly evaluate our perquisite program balancing employment retention challenges and our own industry practices.

Change-of-Control Agreements—Double Triggers

We have entered into agreements with our NEOs that provide certain benefits if employment is terminated following a change of control (“COC”). This protection is provided to ensure the stability, continuity and impartiality of our executives in a COC situation. The level of protection is intended to be similar to that provided by similarly sized organizations.

The COC agreements are “double-trigger” agreements, meaning that benefits are payable only if a COC occurs and an executive’s employment is terminated, or constructively terminated.

 

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

GOAL SETTING FOR FISCAL 2023

Looking forward to fiscal 2023, we continue to focus on shareholder alignment and our commitment to pay-for-performance.

 

2023 Annual Incentive Metrics

     

2023-2025 Long-Term Incentive Metrics

 

 Continuing an earnings per share (EPS) metric in our short-term incentive plan, which accounts for 40% of the payout weighting to ensure alignment with shareholder’s interests

 

 Continuing an EBITDA metric, which accounts for 40% of the payout weighting

 

 Strategic goals will be 20% of payout weighting and will be focused on three primary areas: strategic evaluation of the global business capacity footprint, successful launch and management of a European leasing business, and implementation of a short-term energy and greenhouse gas reduction strategy

 

 EBITDA and EPS targets were set higher than 2022 achievement

 

 

 

        

 

 

After incorporating feedback from shareholders, metrics will include a relative TSR metric with a 20% weighting instead of a relative TSR modifier

 

 Retain weighting that is heavily performance-based with 60% performance-based and 40% time-based for our NEOs

 

 Utilizing EBITDA and ROIC to incent earnings, operational cash flow and capital efficiency

 

 EBITDA target is higher and ROIC is the same as the prior targets set in fiscal 2022

PEER GROUP

Greenbrier’s fiscal 2022 compensation program referred to the 16 companies listed below. The Compensation Committee relies on Mercer, our independent compensation consultant, to periodically review and recommend changes to our peer group for approval. Mercer performs this review and makes recommendations annually, providing substantial detail and support to the Compensation Committee for consideration. For fiscal 2023, the Compensation Committee removed Meritor, as it was acquired by Cummins Inc. Our fiscal 2022 peer group is:

 

 

Astec Industries

 

Crane

 

GATX

 

H&E Equipment Services

 

Hub Group

 

Hyster-Yale Materials Handling

  

Meritor

 

Manitowoc

 

Oshkosh

 

REV Group

 

Terex

 

Timken

 

Trinity Industries

 

Triton International

 

Wabash National

 

Westinghouse Air Brake

 

 

 

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Peer group companies are chosen based on whether they are in a comparable industry, have comparable revenue or market capitalization or compete with Greenbrier for executive talent. The current peer group includes companies in the following sectors: railcar manufacturing; heavy manufacturing; other related manufacturing; after-market products; transportation services; and high-value equipment leasing. Annual revenues of the peer group companies range from approximately one-third to three times Greenbrier’s annual revenue, with Greenbrier approximating the peer group median revenue size.

 

 

 

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COMPENSATION GOVERNANCE

Stock Ownership and Stock Retention

The Company has stock ownership guidelines for its executive officers, under which all executive officers of the Company are expected to retain holdings of Company stock with a value equal to a multiple of base salary ranging from one to six times base salary. The guidelines are 6.0x for CEO and 3.0x for NEOs. The applicable multiple depends on the executive officer’s position with the Company, as set forth below.

 

Named Executive Officer

   Stock
Ownership
Target as
a Multiple
of Salary
 

In

  Compliance  

Yes/No

FORMER EXEC. CHAIRMAN, William A. Furman

   6.0x   Yes

CEO & PRESIDENT, Lorie L. Tekorius

   6.0x   Yes

EVP, Alejandro Centurion

   3.0x   Yes

EVP, Brian J. Comstock

   3.0x   Yes

SVP, Adrian J. Downes

   3.0x   Yes

Executive officers are expected to achieve compliance with the applicable guidelines within five years of the date of adoption of the guidelines or appointment as an executive officer, whichever is later. They are encouraged to retain ownership of shares representing at least 50% of the after-tax value acquired through compensatory stock awards until the guidelines are met. All of our executive officers have satisfied the executive stock ownership expectation.

Incentive Compensation Claw-Back Policy

The Company has adopted a stand-alone incentive compensation claw-back policy intended to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The policy applies to all executive officers designated as such by the Board and to all incentive-based compensation granted or paid by the Company, including cash and stock. The Dodd-Frank Act requires companies to adopt a policy that will recapture (“claw-back”) excess incentive compensation, if any, that is paid to certain executives based on erroneous financial statements and mandates the SEC to issue rules implementing the claw-back requirements. Although the SEC has not yet promulgated final rules implementing the Dodd-Frank claw-back requirements, in 2013 the Company determined to adopt a claw-back policy in light of concerns expressed by shareholders about the lack of a claw-back policy, and the SEC’s delay in adopting final rules.

Policies Regarding Hedging and Pledging of Company Stock

The Company’s Policy Regarding Trading in Company Securities prohibits its directors, executive officers and employees from hedging the economic risk of owning shares of Company stock (including engaging in short sales, trading in or writing options on Company securities, or entering into other hedging transactions, including, but not limited to, prepaid variable forward contracts, zero-cost collars, equity swaps or exchange funds). The policy also restricts directors and executive officers from holding Company stock in a margin account, or pledging Company stock as collateral for a loan, except in very limited circumstances (not including margin debt) with advance approval of the Board Chair and CEO. No such approvals have been given to date.

Compensation Committee’s Independent Consultant and Compensation Consultant’s Role

The Compensation Committee has sole authority to retain and terminate independent consultants, counsel, experts and other personnel the Committee deems necessary to enable it to fully perform its duties and fulfill its responsibilities, and to determine the compensation and other terms of engagement for such consultants and experts. Pursuant to the Compensation Committee’s Charter, the Compensation Committee may delegate to its chair or to one or more of its members the responsibility for performing routine functions. There are no other express provisions in the Charter delegating Compensation Committee authority to any other person.

The Compensation Committee engaged Mercer to provide information, analysis and advice regarding executive and director compensation. Mercer provided the following services for the Compensation Committee during fiscal 2022: (i) advice on 2022 executive officer bonus program structure, performance goals and targets, and bonus amounts; (ii) advice on 2022 executive officer equity grant award sizes and performance goals and targets; (iii) market data and recommendations on executive officer compensation; (iv) advice on equity retention policies and holding requirements after vesting; (v) advice on updating the Company’s peer group companies; and (vi) ongoing advice regarding the Company’s executive compensation practices to advise whether any such practices should be modified to improve effectiveness or to implement “best practices.”

During fiscal 2022, aggregate fees paid to Mercer for executive compensation services to the Company were approximately $235,000. In addition, Mercer or its affiliates provided services to the Company for casualty consulting, general insurance, actuarial analysis of workers compensation, retirement consulting and salary studies. The aggregate fees for such additional services were approximately $440,325. The decision to engage Mercer or its affiliates to provide these other services was made by management and was reported to the Compensation Committee.

 

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

The Compensation Committee has analyzed whether our compensation consultant, Mercer, is independent, and whether Mercer’s work as a compensation consultant has raised any conflicts of interest, taking into consideration the following factors: (i) the provision of other services to the Company by Mercer; (ii) the amount of fees from the Company paid to Mercer as a percentage of Mercer’s total revenue; (iii) the policies and procedures of Mercer that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Mercer or the individual compensation advisors employed by Mercer with an executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors employed by Mercer with any member of the Compensation Committee; and (vi) any stock of the Company owned by Mercer or the individual compensation advisors employed by Mercer. The Compensation Committee has determined, based on its analysis in light of the factors listed above, that Mercer is independent, and the work of Mercer and the individual compensation advisors employed by Mercer as compensation consultants to the Company has not created any conflicts of interest.

ROLE OF MANAGEMENT

The Compensation Committee consults with our CEO and our Chief Human Resources Officer (CHRO), when making compensation decisions. Typically, our CEO and CHRO engage with other members of our management team to gather information on corporate and individual performance and their

perspective and recommendations on compensation matters. Our CEO makes recommendations to the Compensation Committee regarding compensation matters, including the compensation of our other executive officers. The Compensation Committee uses these recommendations as one of several factors in making compensation decisions, and those decisions do not necessarily follow the CEO’s recommendations.

REGULATORY CONSIDERATIONS

The Compensation Committee considered the tax and accounting consequences of using various forms of compensation and retains the discretion to pay compensation that is not tax deductible or could have adverse accounting consequences for Greenbrier.

Tax Deductibility of Executive Compensation

Our incentive compensation programs have been designed and administered in a manner generally intended to preserve income tax deductions. Section 162(m) generally limits to $1 million per person the amount that the Company can deduct for compensation paid to certain “covered employees” (as defined in Section 162[m]). Although the Company generally considers tax deductibility when structuring our executive compensation arrangements, we may pay compensation that is not tax deductible to the extent we determine that doing so is appropriate based upon business needs.

 

 

 

 

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EXECUTIVE COMPENSATION    

 

    

 

Executive Compensation Tables

SUMMARY COMPENSATION TABLE FOR FISCAL 2022

 

Name and Principal

Position

  Year  

Salary

($)

  Bonus  

Stock Awards(1)

($)

 

Non-equity

Incentive Plan

Compensation(2)

($)

 

All Other

Compensation(3)(6)

($)

 

Total    

($)    

William A. Furman

  2022       800,000             3,257,308 (4)        1,987,545       588,822   6,633,675    

Executive Chairman
(Retired August 2022)

  2021

2020

     

800,000

945,833


     



     

3,421,997

4,827,285


     

1,136,016

808,266


     

222,216

263,402


  5,580,229    

6,844,786    


Lorie L. Tekorius

  2022       800,000             1,666,024       1,382,640       127,742   3,976,406    

Chief Executive Officer and
President

  2021

2020

     

675,000

625,000


     



     

1,638,078

2,749,066


     

666,792

549,094


     

116,218

130,790


  3,096,088    

4,053,950    


Alejandro Centurion

  2022       633,333             1,325,480       1,714,782 (5)        102,128   3,775,723    

Executive Vice President
and President Global
Manufacturing Operations
(Retired August 2022)

  2021

2020

     

620,000

620,000


     



     

1,228,576

1,110,269


     

1,286,376

492,825

(5)

 
     

328,051

368,132


  3,463,003    

2,591,226    


Brian J. Comstock

  2022       562,500             1,110,684       879,582       115,041   2,667,807    

Executive Vice President,
Chief Commercial and
Leasing Officer

  2021

2020

     

506,667

445,000


     



     

982,847

832,719


     

452,839

335,104


     

85,756

90,099


  2,028,109    

1,702,922    


Adrian J. Downes

  2022       508,333             527,594       711,209       66,221   1,813,357    

Senior Vice President,
Chief Financial Officer and
Chief Accounting Officer

  2021

2020

     

458,333

425,000


     



     

491,424

416,343


     

366,520

284,483


     

58,630

56,738


  1,374,907    

1,182,564    


 

(1)

Represents the aggregate grant date fair value of the RSUs computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For purposes of valuation of RSU awards, we assume that no RSUs will be forfeited and performance goals will be achieved at target levels. These amounts reflect the grant date fair value and may not correspond to the actual value that will be recognized by the NEOs. For the performance-vested RSUs, the grant date fair value is calculated based on the target number of shares which, as of the grant date, was the estimated number of shares to be issued upon vesting of RSUs, and reflects the effect of the relative TSR modifier calculated using a Monte Carlo simulation. The estimated grant date fair value for the RSUs granted during 2022 if the maximum number of shares issuable under the performance-vested RSU awards are earned is $5,554,346 for Mr. Furman; $2,678,761 for Ms. Tekorius; $2,110,914 for Mr. Centurion; $1,785,874 for Mr. Comstock and $848,322 for Mr. Downes.

(2)

Represents annual incentive bonuses earned by each NEO under the fiscal 2022 short-term incentive plan for executive officers.

(3)

See “All Other Compensation Table for Fiscal 2022” below for detail on amounts included in this column.

(4)

Excludes $1,236,855 of grant date fair value for 25,919 RSUs that were awarded on October 20, 2021, pursuant to Mr. Furman’s amended employment agreement as payment for his fiscal 2021 annual incentive award and which was included in Mr. Furman’s fiscal 2021 Non-Equity Incentive Plan Compensation.

(5)

Pursuant to Mr. Centurion’s amended employment agreement, fiscal 2022 includes additional short-term incentive award of $672,315 as described in Annual Incentive Awards and fiscal 2021 includes additional short-term incentive award of $703,080.

(6)

Prior year amounts have been recalculated to include additional amounts for spousal travel and personal security.

ALL OTHER COMPENSATION TABLE FOR FISCAL 2022

 

Name

Perquisites
and

Personal

Benefits

($)(1)

NQ Deferred

Compensation

Plan

Contributions

($)(2)

401(k)

Matching

Contributions

($)(3)

Life

Insurance

($)

Total    

($)    

William A. Furman

  457,661   131,161       588,822    

Lorie L. Tekorius

  19,234   82,008   11,600   14,900   127,742    

Alejandro Centurion

  54,178     11,600   36,350   102,128    

Brian J. Comstock

  39,521   59,420   11,600   4,500   115,041    

Adrian J. Downes

    50,491   11,600   4,130   66,221    

 

(1)

See additional detail in supplemental table below.

(2)

These amounts represent the Company’s contributions for Mr. Furman, Mr. Comstock and Mr. Downes and Ms. Tekorius to the Non-qualified Deferred Compensation Plan for executive officers who do not participate in the target benefit plan.

(3)

These amounts represent the Company’s matching contribution to each NEO’s 401(k) plan account.

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

PERQUISITES AND PERSONAL BENEFITS TABLE FOR FISCAL 2022

 

Name

  

Vehicle Use or

Car Allowance

($)

  

Spousal

Travel

($)

  

Club

Dues

($)

  

Remote Office

Benefit

($)

  

Other

($)(1)

  

Retirement

Benefits

($)(2)

  

Total    

($)    

William A. Furman

       15,347        16,749        6,873        76,596        16,148        325,948        457,661    

Lorie L. Tekorius

       13,200        990        5,044                             19,234    

Alejandro Centurion

       13,200        36,320        4,148               510               54,178    

Brian J. Comstock

       13,200        3,151        16,682               6,488               39,521    

Adrian J. Downes

                                                 —    

Total:

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

       570,594    

 

(1)

Consists of payments made on behalf of: Mr. Furman for financial and tax advisors and home computer equipment; Mr. Centurion for executive medical benefit; and Mr. Comstock for executive medical benefit and personal use of Company owned property.

(2)

See additional detail in supplemental table below.

WILLIAM A. FURMAN—RETIREMENT PERQUISITES AND PERSONAL BENEFITS

 

Remote Office
Benefit Continuation
for Fiscal 2023
and 2024
($)
  Transfer of Remote
Office Contents
($)
  Transfer of
Vehicle Title
($)
  Executive Medical Benefit
Continuation
for Fiscal 2023 and 2024
($)
  Medical Insurance
Continuation for
Fiscal 2023 and 2024
($)
  Total
($)
109,746   104,320   58,990   22,292   30,600           325,948        

GRANTS OF PLAN-BASED AWARDS IN FISCAL 2022

 

 

 

 

Grant
Date

 

 

Possible Future Payouts Under
Non-Equity Incentive Plan Awards(1)

   

 

  Estimated Future Payouts Under
Equity Incentive Plan Awards
 

 

All Other
Stock
Awards:
Number of
Shares of
Stock or

RSUs(2)

(#)

 

Grant
  Date Fair  
Value of
Stock/

RSU
Awards
($)(3)

Name

  Threshold
($)
  Target
($)
  Maximum
($)
   

 

  Threshold
(#)
  Target
(#)
  Maximum
(#)

William A. Furman

 

10-20-21

         

23,478

 

46,955

 

93,910

   

2,297,038

 

10-20-21

               

20,123(4)

 

   960,270

   

483,000

 

1,207,500

 

2,294,250

           

Lorie L. Tekorius

 

10-20-21

         

10,267

 

20,534

 

41,068

   

1,012,737

 

10-20-21

               

13,690

 

   653,287

   

294,000

 

   735,000

 

1,396,500

           

Alejandro Centurion

 

10-21-21

         

  8,488

 

16,975

 

33,950

   

   785,433

 

10-20-21

               

11,317(6)

 

   540,047

   

736,250(5)

 

1,271,000(5)

 

2,480,000(5)

           

Brian J. Comstock

 

10-20-21

         

  6,845

 

13,690

 

27,380

   

   675,191

 

10-20-21

               

  9,126

 

   435,493

   

204,250

 

   510,625

 

   970,188

           

Adrian J. Downes

 

10-20-21

         

  3,252

 

  6,503

 

13,006

   

   320,728

 

10-20-21

               

  4,335

 

   206,866

       

161,500

 

   403,750

 

   767,125

                       

 

(1)

All amounts reported in these columns represent potential annual incentive award payout amounts under the fiscal 2022 short-term incentive plan for executive officers, if performance had been achieved at the threshold, target and stretch goal levels. Actual short-term incentive awards earned for fiscal year 2022 are reported in the Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column.

(2)

Represents time-vested RSUs, which generally vest ratably over three years, subject to continued employment.

(3)

Represents the aggregate grant date fair value of RSU awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. The grant date fair value of the performance-vested RSUs is based on the target number of shares under the award, estimated to be the probable outcome of the performance conditions as of the grant date, multiplied by the closing market price of the Company’s Common Stock on the grant date, and reflects the effect of the relative TSR modifier calculated using a Monte Carlo simulation.

 

 

 

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(4)

Mr. Furman’s time-vested RSU award vested in full on September 1, 2022. Excludes 25,919 RSUs that were granted on October 20, 2021 pursuant to Mr. Furman’s amended employment agreement as payment for his fiscal 2021 annual incentive award, with a grant date fair value of $1,236,855.

(5)

Pursuant to Mr. Centurion’s amended employment agreement, includes additional short-term incentive award as described in Compensation Discussion & Analysis—Annual Incentive Awards on page 19.

(6)

Pursuant to Mr. Centurion’s amended employment agreement, Mr. Centurion’s time-vested RSU award will vest in full on September 1, 2023, based on continued employment with the Company.

 

Material Terms of Executive Employment Agreements and Other Arrangements

EMPLOYMENT AGREEMENTS

The Company has employment agreements with Messrs. Furman and Centurion. The employment agreements with these NEOs provide for certain payments and benefits in the event the executive’s employment is terminated by the Company without cause. The employment agreements also provide for payments and benefits in the event that the executive is terminated following a change of control of the Company. Details of the payments and benefits triggered by different termination events are discussed and disclosed in tabular format under the heading “Potential Post-Termination Payments,” following the Equity Compensation Plan Information table.

In fiscal 2020, the Board and Mr. Furman amended Mr. Furman’s employment agreement and set a retirement date of September 1, 2022. In fiscal 2021, the Board and Mr. Centurion amended his employment agreement and set a retirement date from his executive officer position of September 1, 2022, and retirement from the Company on September 1, 2023. In fiscal 2022, the Board amended both employment agreements to adjust the effective date of retirement from all executive offices to be August 31, 2022. None of the terms of these agreements was amended to allow multi-year guarantees for salary increases, non-performance-based bonuses or equity compensation, tax gross-ups, single-trigger change of control payments or liberal change of control definitions.

RSU AWARDS

Each RSU represents the right to receive one share of Company stock upon vesting. Except for the award granted in fiscal 2022 to Mr. Furman, 60% of the total RSUs granted are subject to performance-based vesting and 40% are subject to time-based vesting, as described more fully in the Compensation Discussion and Analysis. 70% of Mr. Furman’s RSU award is subject to performance-based vesting and 30% is subject to time-based vesting. Vesting of unvested RSUs will accelerate in the event of termination of the NEO’s employment under certain circumstances, as described below.

ACCELERATION OF RSUS SUBJECT TO TIME VESTING PROVISIONS

All unvested RSUs subject to time vesting provisions (“time-based RSUs”) held by Messrs. Furman, Centurion, Comstock, and Downes and Ms. Tekorius will automatically vest upon death or disability. In addition, all time-based RSUs held by Messrs. Furman and Centurion will immediately vest upon the Company’s termination of the executive other than for “cause” pursuant to

such executives’ individual agreements. RSUs do not accelerate upon COC if they are assumed or continued by the acquiring company. Any time-based RSUs that are not assumed or continued will accelerate and become fully vested upon COC. In the event of a termination of employment during the two-year period following the COC, time-based RSUs held by the executives that were assumed or continued by the acquiring company will accelerate upon the executive’s termination pursuant to the terms of the executive’s employment agreement or change of control agreement, as applicable, as described above.

ACCELERATION OF RSUS SUBJECT TO PERFORMANCE VESTING PROVISIONS

RSUs do not accelerate upon COC if they are assumed or continued by the acquiring company. Any unvested RSUs subject to performance vesting provisions (“performance-based RSUs”) that are not assumed or continued would accelerate and become vested based on actual results measured against performance goals as of the COC. In the event of a termination of employment during the two-year period following the COC, performance-based RSUs held by the executives that were assumed or continued by the acquiring company would accelerate and become vested at target upon the executive’s termination pursuant to the terms of the executive’s employment agreement or COC agreement, as applicable.

The Compensation Committee will determine the level of performance against performance goals through the date of the COC, and if such performance exceeds the target level, the recipient will be entitled to receive additional shares, based on the level of performance in excess of target, which shares will be time-vested and will vest in full at the end of the measurement period, provided the recipient remains employed by the Company. In the event that the executive’s employment is terminated without cause or the executive resigns for good reason within two years following the COC, vesting of the converted time-based shares would accelerate, pursuant to the terms of the executive’s employment agreement or COC agreement, as applicable. All performance-based RSUs held by Messrs. Furman, Centurion, Comstock, and Downes and Ms. Tekorius will automatically vest upon death or disability at target levels of performance pursuant to the terms of the RSU award agreements. For the grants made to Mr. Furman in fiscal 2020, 2021 and 2022, in the event Mr. Furman had retired before the end of the performance period, 100% of his performance-based shares earned over the performance period would have vested at the end of the performance period with no prorated adjustment. Under the terms of the employment agreements with Messrs. Furman and Centurion, upon

 

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

termination of the executive’s employment by the Company without cause or termination by the executive for good reason, all performance-based RSUs will continue to vest based on performance during the applicable performance period and the

executive will become entitled to receive the number of shares issuable under the RSUs, if any, based upon the level of performance achieved during the entire performance period.

 

 

OUTSTANDING EQUITY AWARDS ON AUGUST 31, 2022

 

   

 

Stock Awards

    

Name

 

Number of
Shares of
     Stock or RSUs     
that Have

Not Vested
(#)

 

     Market Value of     

Shares of

Stock or RSUs

that Have

Not Vested
($)

 

Equity Incentive Plan
Awards: Number of

     Unearned Shares, RSUs     
or Other Rights that
Have Not Vested

(#)

 

 

     Equity Incentive Plan
     Awards: Market or
     Payout Value of

     Unearned Shares, RSUs

     or Other Rights that

     Have Not Vested

     ($)

  

  

 

William A. Furman

      30,987 (1)        883,439           
      20,123 (1)        573,707           
      25,919 (1)        738,951           
              85,540 (2)        2,438,745   
              18,076 (3)        515,347   
              54,227 (4)        1,546,012   
              11,739 (3)        334,679   
              35,216 (5)        1,004,008   

 

Lorie L. Tekorius

      4,918 (6)        140,212           
      22,925 (7)        653,592           
      13,149 (8)        374,878           
      13,690 (9)        390,302           
              22,133 (2)        631,012   
              29,586 (4)        843,497   
              20,534 (5)        585,424   

 

Alejandro Centurion

      4,372 (6)        124,646           
      9,862 (8)        281,166           
      11,317 (10)        322,648           
              19,674 (2)        560,906   
              22,190 (4)        632,637   
              16,975 (11)        483,957   

 

Brian J. Comstock

      3,279 (6)        93,484           
      7,889 (8)        224,915           
      9,126 (9)        260,182           
              14,756 (2)        420,694   
              17,752 (4)        506,110   
              13,690 (5)        390,302   

 

Adrian J. Downes

      1,639 (6)        46,728           
      3,944 (8)        112,443           
      4,335 (9)        123,591           
              7,378 (2)        210,347   
              8,876 (4)        253,055   
                            6,503 (5)        185,401     

 

(1)

Pursuant to Mr. Furman’s amended employment agreement, the time-based RSU awards granted in October 20, 2020, and October 20, 2021, vested in full on September 1, 2022.

 

 

 

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(2)

Performance-based RSU awards for each of Messrs. Furman, Centurion, Comstock and Downes and Ms. Tekorius granted on October 23, 2019, and subject to vesting contingent on the achievement of performance targets for the performance period ended August 31, 2022. The number of shares and payout value included in the table for these awards are calculated based on achieving target performance goals, which would result in 100% of the subject shares vesting. Following the end of fiscal 2022, the Compensation Committee determined that the financial performance goals were not achieved and no RSU awards were earned, resulting in these awards terminating in full.

(3)

Performance-based RSU awards for Mr. Furman granted on October 20, 2020, and October 20, 2021, and subject to vesting contingent on the achievement of performance targets for the applicable performance period ending August 31, 2023 and 2024, respectively. The number of shares and payout value included in the table for these awards are calculated based on achieving target performance goals, which would result in 100% of the subject shares vesting.

(4)

Performance-based RSU awards for each of Messrs. Furman, Centurion, Comstock and Downes and Ms. Tekorius granted on October 20, 2020, and subject to vesting contingent on the achievement of performance targets for the performance period ending August 31, 2023. The number of shares and payout value included in the table for these awards are calculated based on achieving target performance goals, which would result in 100% of the subject shares vesting.

(5)

Performance-based RSU awards for each of Messrs. Furman, Centurion, Comstock, and Downes and Ms. Tekorius granted on October 20, 2021, and subject to vesting contingent on the achievement of performance targets for the performance period ending August 31, 2024. The number of shares and payout value included in the table for these awards are calculated based on achieving target performance goals, which would result in 100% of the subject shares vesting.

(6)

Time-based RSU awards for each of Messrs. Centurion, Comstock and Downes and Ms. Tekorius granted on October 23, 2019, and vest over a period of three years in annual increments of 33 1/3% of each award beginning one year from grant date.

(7)

Time-based RSU award for Ms. Tekorius, granted on July 7, 2020, vests over a period of two years in annual increments of 50% on the second and third anniversaries of the grant date.

(8)

Time-based RSU awards for each of Messrs. Centurion, Comstock and Downes and Ms. Tekorius granted on October 20, 2020, and vest over a period of three years in annual increments of 33 1/3% of each award beginning one year from grant date.

(9)

Time-based RSU awards for each of Messrs. Comstock and Downes and Ms. Tekorius granted on October 20, 2021, and vest over a period of three years in annual increments of 33 1/3% of each award beginning one year from grant date.

(10)

Pursuant to Mr. Centurion’s employment agreement, the time-based RSU award granted on October 20, 2021, will vest in full on September 1, 2023.

(11)

Performance-based RSU award for Mr. Centurion granted on October 21, 2021, and subject to vesting contingent on the achievement of performance targets for the performance period ending September 1, 2023. The number of shares and payout value included in the table for these awards is calculated based on achieving target performance goals, which would result in 100% of the subject shares vesting.

STOCK VESTED DURING FISCAL YEAR 2022

 

 

 

Stock Awards

 

Name

Number of Shares

Acquired on Vesting

(#)

 

 

 

Value Realized On

Vesting of Shares During

the Year Ended
August 31, 2022

($)

 

 

William A. Furman

46,840 2,151,950      

Lorie L. Tekorius

41,006          1,600,828

Alejandro Centurion

31,957 1,471,940

Brian J. Comstock

11,615    535,146

Adrian J. Downes

  5,808    267,597

NONQUALIFIED DEFERRED COMPENSATION

 

Name

 

Executive
Contributions in
Last Fiscal Year
($)

Registrant
Contributions in
Last Fiscal Year
(1)
($)
Aggregate
Earnings in
Last Fiscal Year
($)
(2)
Aggregate
Withdrawals/
Distributions
($)

Aggregate    
   Balance at Last        
Fiscal Year-End    

($)    

William A. Furman

    131,161   (329,535 )     1,700,486    

Lorie L. Tekorius

    82,008   (87,460 )     599,908    

Alejandro Centurion

      (753,031 )     3,277,469    

Brian J. Comstock

  226,420   59,420   (330,039 )     2,450,338    

Adrian J. Downes

  30,500   50,491   (763,327 )     2,007,113    

 

(1)

All contribution amounts shown in this column are reported as fiscal year 2022 compensation in the Summary Compensation Table, under “All Other Compensation.”

(2)

The Nonqualified Deferred Compensation Plan does not pay above-market or preferential earnings, therefore no earnings reported in this column are reported as fiscal 2022 compensation in the Summary Compensation Table.

POTENTIAL POST-TERMINATION PAYMENTS

 

The following descriptions and tables show the benefits that each of the NEO’s, other than Mr. Furman, would be entitled to upon their termination of employment under each of the described scenarios. Because Mr. Furman retired as an executive officer on August 31, 2022, the Benefits Triggered on

Retirement table and description below discloses the amounts that Mr. Furman became entitled to upon his retirement, and the remaining tables show that he was no longer entitled to benefits under any of the other described scenarios because for him they were no longer possible.

 

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

Benefits Triggered on Termination Following a Change of Control

The amended and restated employment agreements entered into effective August 28, 2012 with Mr. Centurion, as later amended with respect to Mr. Centurion, provides for certain benefits if the officer’s employment is terminated by us without “cause” or by the officer for “good reason” within 24 months after a “change of control” of the Company. Ms. Tekorius and Messrs. Comstock and Downes have change of control agreements that provide for similar benefits upon their termination of employment under

these scenarios. In the above-described agreements, the definition of “change of control” generally is defined to include the acquisition by any individual, entity or group of 30% or more of our stock, consummation of a merger or consolidation that results in 50% or more of our stock being owned by persons who were not shareholders prior to the transaction, a sale of substantially all of our assets, the dissolution or liquidation of the Company, or replacement of a majority of the members of the Board by individuals whose nomination, election or appointment was not approved by the incumbent Board.

 

 

The following table shows the estimated change of control benefits that would have been payable to the NEOs, excluding Mr. Furman, if a change of control (as defined in the applicable agreement) had occurred on August 31, 2022, and, except as noted, each officer’s employment had been terminated on that date either by us without “cause” or by the officer with “good reason,” each as defined in the applicable agreement.

 

Name

 

 

Cash

Severance

Benefit(1)

($)

 

Annual

Insurance

Continuation(2)

($)

 

Restricted

Stock/RSU

Acceleration(3)

($)

 

Supplemental

Retirement

Benefits(4)

($)

 

Other(5)

($)

 

Total

($)

 

280G    

Capped    

Amount(6)     

($)    

William A. Furman

                                          —    

Lorie L. Tekorius

      3,769,858       9,625       1,558,984                   5,338,467       6,766,294    

Alejandro Centurion

      2,945,152       49,651       1,212,416             26,400       4,233,619       7,343,450    

Brian J. Comstock

      1,937,943       9,625       578,582                   2,526,150       4,009,759    

Adrian J. Downes

      1,275,752       11,457       282,762                   1,569,971       2,475,517    

 

(1)

The employment agreement with Mr. Centurion provides for a payment equal to two and one half times the sum of his current base salary plus the average of the two most recent annual bonuses received by Mr. Centurion. The change of control agreement with Ms. Tekorius provides for a payment equal to two and one half times the sum of her current base salary plus the average of the two most recent annual bonuses received by Ms. Tekorius. The change of control agreement with Mr. Comstock provides for a payment equal to two times the sum of his current base salary plus the average of the two most recent annual bonuses received by Mr. Comstock. The change of control agreement with Mr. Downes provide for a payment equal to one and one half times the sum of his current base salary plus the average of the two most recent annual bonuses received by Mr. Downes. All payments are to be made in a single lump sum within 30 days after the date of termination, unless a delay in payment is required in order to comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(2)

If cash severance benefits are triggered, the employment agreements with Mr. Centurion also provides that the Company will pay the cost of life, accident and health insurance benefits paid for by the Company at the time of termination for up to 24 months following the termination of employment except to the extent similar benefits are provided by a subsequent employer. The change of control agreements with Ms. Tekorius and Messrs. Comstock and Downes provide that the Company will pay the cost of all health and welfare benefits paid for by the Company at the time of termination for up to 18 months following the termination of employment except to the extent similar benefits are provided by a subsequent employer. The amounts in the table above represent 12 months of life and health insurance premium payments at the rates paid by the Company for each of these executives as of August 31, 2022.

(3)

Current outstanding equity awards do not accelerate upon COC if they are assumed or continued by the acquiring company. Time-based equity awards that are not assumed or continued accelerate and become fully vested upon COC, and performance-based equity awards that are not assumed or continued accelerate and become vested based on actual results measured against performance goals as of the COC. Upon termination following COC, time-based awards that were assumed or continued accelerate and become fully vested, and performance-based awards that were assumed or continued accelerate and become vested at target pursuant to the terms of the executive’s employment agreement or change of control agreement, as applicable. The amounts in the table above assume that no equity awards are assumed or continued by the acquiring company and represent the number of shares of unvested restricted stock and RSUs and any additional RSUs issuable to the executive, if any, based on estimate performance multiplied by a stock price of $28.51 per share, which was the closing price of our Common Stock on August 31, 2022. The expense that the Company would record would differ from the amount above under FASB ASC Topic 718 because the amount of unamortized expense is based upon the stock price as of the date of grant, rather than as of the date of vesting.

(4)

The Company provides supplemental retirement benefits under the terms of the target benefit program under the Company’s Nonqualified Deferred Compensation Plan. Under the terms of the program, in the event that employment of a participant in the target benefit program is terminated within 24 months following a change of control of the Company by the Company other than for “cause” or by the executive for “good reason,” the Company is obligated to contribute to the program on behalf of each such terminated participant an amount equal to the discounted present value of the contributions that would have been required had the participant remained employed until age 65. The amount shown in the table above is the amount that would be required to be contributed to the program on behalf of each participating NEO, assuming that the executive terminated employment as of August 31, 2022, following a change of control.

(5)

Pursuant to his employment agreement, the Company will provide Mr. Centurion with continuation of the Company’s customary automobile benefit at the Company’s expense, for a period of two years following termination of employment. The amount above represents the cost of the post-termination automobile benefit for two years, based on the current or estimated future annual cost of the executive’s leased car or other automobile benefit.

(6)

Under all of the change of control provisions described above, the amount of change of control benefits each officer will receive is capped at an amount that will prevent any payments being non-deductible under section 280G of the Code or subject to excise tax under Code section 4999. The amounts shown in this column are the capped amounts, which are equal to one dollar less than the product of three-times the amount of the officers “base amount,” which, as calculated under Code section 280G, is equal to the average of the officer’s W-2 wages over the five-year period preceding the change of control event (or such shorter period as the officer has been employed by the Company).

 

 

 

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LOGO

    

EXECUTIVE COMPENSATION    

 

    

 

Benefits Triggered on Involuntary Termination of Employment without Cause

The following table shows the estimated benefits that would have been paid to Mr. Centurion if his employment had been terminated on August 31, 2022, either by us other than for “cause” or by the officer with “good reason,” pursuant to the terms of his employment agreement with the Company. Messrs. Comstock and Downes and Ms. Tekorius do not have employment agreements with the Company.

 

Name

  

 

Cash
Severance
Benefit
(1)
($)

   Annual
Insurance
Continuation
(2)
($)
   Restricted
Stock/RSU
Acceleration
(3)
($)
  

Supplemental
Retirement
Benefits
(4)

($)

   Other(5)
($)
  

Total

($)

William A. Furman

                                          —    

Lorie L. Tekorius

       N/A        N/A        N/A        N/A        N/A        N/A    

Alejandro Centurion

       2,894,182        49,651        1,845,053               26,400        4,815,286    

Brian J. Comstock

       N/A        N/A        N/A        N/A        N/A        N/A    

Adrian J. Downes

       N/A        N/A        N/A        N/A        N/A        N/A    

 

(1)

The employment agreement with Mr. Centurion provides for lump sum cash severance payments equal to two times the sum of base salary plus two times the average bonus amount. Mr. Centurion also is entitled to receive a pro-rated bonus for the year of termination, based on the greater of the average bonus amount or the executive’s target bonus amount, and the number of days worked during the year of termination. Since it is assumed that termination is on August 31, 2022, the cash severance benefit amount includes 100% of the average bonus amount, in addition to the multiples of salary and bonus described above. All payments are to be made in a single lump sum within 30 days after the executive signs a release of claims against the Company, subject to the potential application of the six-month delay requirement applicable to “specified employees” under Code Section 409A.

(2)

The employment agreement with Mr. Centurion provides for continuation of life, accident and health insurance benefits paid by the Company for up to 24 months following the termination of employment by the Company other than for “cause” or by the executive for “good reason,” except to the extent similar benefits are provided by a subsequent employer. The amounts in the table above represent 12 months of life, accident and health insurance premium payments at the rates paid by the Company for this officer as of August 31, 2022.

(3)

Under the terms of the employment agreement with Mr. Centurion, in the event of termination of the executive’s employment by the Company without “cause” or the executive’s termination of his employment for “good reason,” all unvested time-based shares and RSUs will vest; all performance-based restricted stock awards will vest at the target performance level, and all performance-based RSUs will continue to vest based on performance during the applicable performance period and the executive will become entitled to receive the number of shares issuable under the RSUs, if any, based upon the level of performance achieved during the entire performance period. Information regarding unvested restricted stock and RSUs held by Mr. Centurion is set forth in the Outstanding Equity Awards table above. The amounts in the table above represent the number of shares of unvested restricted stock and RSUs multiplied by a stock price of $28.51 per share, which was the closing price of our Common Stock on August 31, 2022, and, with respect to performance-based RSUs held by Mr. Centurion, vesting at currently forecasted levels as of the vesting date. The expense that the Company would record would differ from the amount above as, under FASB ASC Topic 718, the amount of unamortized expense is based upon the stock price as of the date of grant, rather than as of the date of vesting.

(4)

The Company provides supplemental retirement benefits under the target benefit program under the Company’s Nonqualified Deferred Compensation Plan. Under the terms of his employment agreement, Mr. Centurion will continue to be treated as a participant in the supplemental retirement plan for two years following termination of employment. The amount shown in the table above for Mr. Centurion is the estimated amount of two years’ additional contributions under the target benefit program, assuming that Mr. Centurion’s employment was involuntarily terminated as of August 31, 2022.

(5)

Pursuant to his employment agreement, the Company will provide Mr. Centurion with continued participation in the Company auto program, at the Company’s expense, for a period of two years following termination of employment. The amount above represents the current annual cost of the employees’ participation in the Company’s automobile program for the applicable period, based on the current or estimated future annual cost of the executive’s leased car or other automobile benefit.

The Company’s obligation to pay severance benefits is, in all cases, contingent upon the officer executing a release of claims in favor of the Company. The Company’s obligation to pay severance benefits to Mr. Centurion is contingent upon Mr. Centurion’s compliance with the terms of a covenant not to compete in favor of the Company for one year following termination of employment.

Benefits Triggered on Retirement

The following table shows estimated benefits that were earned by Mr. Furman with respect to his retirement as an executive officer on August 31, 2022 (after which Mr. Furman ceased serving as an employee effective on September 1, 2022) and the estimated benefits that would have been payable by the Company to the other NEOs if each officer’s employment had terminated on August 31, 2022, by reason of retirement, excluding amounts payable under the Company’s 401(k) Plan.

 

Name

  

 

Retirement
Related
Perquisites
and Personal
Benefits

($)

   Restricted
Stock/RSU
Acceleration

($)
  

Annual
Retirement
Benefit

($)

   Total
($)

William A. Furman

       325,948 (1)         5,901,312 (2)         N/A        6,227,260    

Lorie L. Tekorius

       N/A        N/A        N/A        N/A    

Alejandro Centurion

       N/A        N/A        N/A        N/A    

Brian J. Comstock

       N/A        N/A        N/A        N/A    

Adrian J. Downes

       N/A        N/A        N/A        N/A    

 

 

 

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          EXECUTIVE COMPENSATION

 

    

 

(1)

The William A. Furman—Retirement Perquisites and Personal Benefits table above details the types and amounts of retirement-related perquisites and personal benefits that Mr. Furman earned with respect to his retirement as an executive officer on August 31, 2022. Mr. Furman’s employment agreement provided for the following benefits following the termination of his employment until September 1, 2024: continuation of medical benefits paid by the company at the time of termination; continuation of the cost of his remote office paid by the company; transfer to Mr. Furman of the contents of his remote office; and continuation of his executive medical benefits paid by the company. In addition, the company agreed to transfer to Mr. Furman title of the vehicle that the company had previously purchased for his use pursuant to his employment agreement.

(2)

Pursuant to Mr. Furman’s fiscal 2020 award agreement, provided that Mr. Furman remains in service to the Company until November 30, 2021, unvested performance-based RSUs will continue to vest based upon performance during the measurement period, and Mr. Furman will be entitled to receive the number of performance-based RSUs to which he would have been entitled if he remained in service to the Company through the end of the measurement period. Pursuant to Mr. Furman’s fiscal 2021 and 2022 award agreements, provided that Mr. Furman remains in service to the Company until September 1, 2022, unvested performance-based RSUs will continue to vest based upon performance during the measurement period, and Mr. Furman will be entitled to receive the number of performance-based RSUs to which he would have been entitled if he remained in service to the Company through the end of the measurement period. As shown in the table above the number of time based RSUs that vested on September 1, 2022, multiplied by a stock price of $28.51 per share, which was the closing price of our Common Stock on August 31 2022, the number of performance based RSUs that vested on October 18, 2022, multiplied by a stock price of $25.83, which was the closing price of our Common Stock on October 17, 2022 and the number of unvested fiscal 2020, fiscal 2021 and fiscal 2022 performance based RSUs that will continue to vest and that performance goals had been met at currently forecasted levels, multiplied by a stock price of $28.51 per share, which was the closing price of our Common Stock on August 31, 2022. The expense that the Company would record would differ from the amount above as, under FASB ASC Topic 718, the amount of unamortized expense is based upon the stock price on the date of the grant and not on the vesting date.

Benefits Triggered on Disability or Death

The following table shows estimated benefits that would have been payable by the Company to the NEOs, excluding Mr. Furman, if each officer’s employment terminated on August 31, 2022, by reason of death or disability.

 

Name

  

 

Estimated
Cash
Benefit

($)

 

Annual
Insurance

    Continuation    

($)

 

Restricted
Stock/RSU

    Acceleration(1)    

($)

 

Annual

    Retirement    

Benefit

($)

  

Total

($)

William A. Furman

                         N/A        —    

Lorie L. Tekorius

       N/A       N/A       3,618,917       N/A        3,618,917    

Alejandro Centurion

       N/A       N/A       2,405,959       N/A        2,405,959    

Brian J. Comstock

       N/A       N/A       1,895,687       N/A        1,895,687    

Adrian J. Downes

       N/A       N/A       931,564       N/A        931,564    

 

(1)

Under the terms of the Company’s standard forms of agreements, all unvested shares of restricted stock and RSUs become fully vested upon termination due to death or disability, with performance-based shares and RSUs vesting at the target level. The amounts in the table above represent the number of shares of unvested restricted stock and RSUs (with performance shares and RSUs at target level) multiplied by a stock price of $28.51 per share, which was the closing price of our Common Stock on August 31, 2022. The expense that the Company would record with respect to any such accelerated vesting would differ from the amount above as, under FASB ASC Topic 718, the amount of unamortized expense recognized upon such event is based upon the stock price as of the date of grant rather than as of the vesting date.

PAY RATIO

 

Pay Ratio Disclosure

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information regarding the ratio of the annual total compensation of our Executive Chairman, William A. Furman, to the annual total compensation of our median employee for fiscal 2022.

Fiscal 2022 annual total compensation for our Executive Chairman was $6,633,675. The annual total compensation of our median employee was $11,510. The resulting ratio of our Executive Chairman’s annual total compensation to the annual total compensation of our median employee was approximately 576 to 1.

We identified our median employee by examining compensation information derived from payroll records for all employees, excluding the Executive Chairman, respectively, who were employed by us on August 31, 2022. As of such date, over 80% of employees were located outside the United States. In identifying our median employee, we selected actual base salary (for salaried employees) and wages (for hourly employees), including any applicable bonus or profit sharing, respectively, for the 12-month period ended August 31, 2022, as the most appropriate measure of compensation and consistently applied that measure to all employees included in the calculation.

 

 

 

 

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LOGO

    

EXECUTIVE COMPENSATION    

 

    

 

EQUITY COMPENSATION PLAN INFORMATION

The following table provides certain information as of August 31, 2022, with respect to our equity compensation plans under which our equity securities are authorized for issuance.

 

Plan Category

 

 

Number of securities to

    be issued upon exercise    

of outstanding options,

warrants and rights

 

Weighted average

exercise price of

    outstanding options,    

warrants, and rights

 

    Number of securities

    remaining available for

    future issuance under

    equity compensation plans

      

Equity compensation plans approved by security holders

      1,041,582 (1)        N/A       1,971,796 (2)   
             

Equity compensation plans not approved by security holders

      None       N/A       None    

 

(1)

For performance-based awards, represents number of shares issuable at target levels of performance.

(2)

Represents 1,393,859 shares available for grant under the 2021 Stock Incentive Plan and 577,937 shares available to purchase under the 2014 Employee Stock Purchase Plan.

COMPENSATION COMMITTEE REPORT

As required by Item 407(e)(5) of Regulation S-K, the Compensation Committee reviewed and discussed with the Company’s management the above section entitled “Compensation Discussion and Analysis” prepared by the Company’s management as required by Item 402(b) of Regulation S-K. Based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended August 31, 2022.

Thomas B. Fargo, Chairman

Graeme A. Jack

David L. Starling

Wendy L. Teramoto

Kelly M. Williams

 

 

 

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PROPOSAL 2

ADVISORY APPROVAL OF EXECUTIVE COMPENSATION

 

Pursuant to Section 14A of the Exchange Act, we are seeking approval on a nonbinding, advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement. We provide our shareholders with the opportunity to vote on an advisory basis on the compensation of our named executive officers annually. While this vote is non-binding, consistent with the value we assign to shareholder engagement, we consider the outcome of the vote when making future compensation decisions.

At our 2022 Annual Meeting, our advisory vote on executive compensation passed by a vote of approximately 88% of votes cast. We believe this favorable result reflects the alignment between executive pay and performance, as well as regular shareholder engagement efforts and incorporation of feedback.

As discussed in the Compensation Discussion and Analysis beginning on page 19 of this Proxy Statement, we believe that Greenbrier’s executive compensation programs effectively align the interests of our executive officers with those of our shareholders by linking a significant portion of their compensation to Greenbrier’s performance and by providing a

competitive level of compensation designed to recruit, develop, retain and motivate talented executives critical to Greenbrier’s long-term success.

This Proposal 2 allows our shareholders to express their opinions regarding the decisions of the Compensation Committee on the compensation paid to the named executive officers through a vote on the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in accordance with the rules of the SEC, which disclosures include the disclosures in the Compensation Discussion and Analysis and the accompanying compensation tables and narrative disclosures.”

In order for this Proposal 2 to be approved, the number of votes cast “FOR” approval must exceed the number of votes cast “AGAINST” approval. Broker discretionary voting of uninstructed shares is not permitted on this Proposal 2. Abstentions and broker non-votes of uninstructed shares will not affect the outcome of voting on this Proposal 2.

 

 

 

LOGO

 

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RESOLUTION SET FORTH IN PROPOSAL 2 ABOVE. UNLESS MARKED OTHERWISE, PROXIES RECEIVED WILL BE VOTED FOR THIS PROPOSAL.

 

 

 

 

 

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OWNERSHIP OF GREENBRIER

COMMON STOCK

Stock Ownership of Certain Beneficial Owners and Management

The following table sets forth information with respect to beneficial ownership of the Company’s Common Stock (the only outstanding class of voting securities of the Company) by each of our directors or nominees for director, by each of our Named Executive Officers, by all of our current directors and executive officers as a group, and by each person who is known to the Company to be the beneficial owner of more than five percent of the Company’s outstanding Common Stock. We believe the persons and entities named below hold sole voting and investment power with respect to the shares shown opposite their respective names, unless otherwise indicated in the footnotes. The information with respect to each person or entity specified is as supplied or confirmed by such person or entity, is based upon statements filed with the SEC or is based upon our knowledge, and is as of September 30, 2022, unless otherwise indicated in the footnotes.

 

Name and Address of Beneficial Owner

  

Amount and Nature of

Beneficial Ownership(1)

   

 

           Percent of Class(2)            

 

William A. Furman

       317,369                 (4)     

One Centerpointe Drive, Suite 200

Lake Oswego, Oregon 97035

                 

Thomas B. Fargo

       17,467 (3)(5)                  (4)     

Wanda F. Felton

       11,081 (3)(6)                  (4)     

Antonio O. Garza

       9,604                 (4)     

James R. Huffines

       11,409                 (4)     

Graeme A. Jack

       57,736 (3)                  (4)     

David L. Starling

       13,030 (3)(7)                  (4)     

Charles J. Swindells

       38,298                 (4)     

Wendy L. Teramoto

       22,577                 (4)     

Kelly M. Williams

       15,770 (3)(8)                  (4)     

Lorie L. Tekorius

       135,909 (3)                  (4)     

Alejandro Centurion

       47,274 (3)                  (4)     

Brian J. Comstock

       35,946 (3)                  (4)     

Adrian J. Downes

       21,533 (3)(9)                  (4)     

All directors and executive officers as a group (15 persons)(11)

       761,475 (10)             2.32 %    

BlackRock, Inc.

       5,256,077 (12)             16.10 %    

55 East 52nd Street

New York, NY 10055

                 

The Vanguard Group

       3,566,967 (13)             10.92 %    

100 Vanguard Blvd.

Malvern, PA 19355

                 

Dimensional Fund Advisors LP

       2,342,167 (14)             7.17 %    

Building One

6300 Bee Cave Road

Austin, TX 78746

                 

Franklin Mutual Advisors

       1,873,641 (15)             5.74 %    

101 John F. Kennedy Parkway

Short Hills, NJ 07078

                                         
(1)

More than one person may be deemed to be a beneficial owner of the same securities as determined in accordance with the rules of the SEC. In certain cases, voting and investment power may be shared by spouses under applicable law. The inclusion of shares in this table shall not be deemed an admission of beneficial ownership of any of the reported shares for purposes of Sections 13(d) or 13(g) of the Exchange Act or for any other purpose.

(2)

Calculated based on number of outstanding shares as of September 30, 2022, which is 32,652,621 plus the total number of shares of which the reporting persons have the right to acquire beneficial ownership within 60 days following September 30, 2022.

(3)

Includes: (a) time-vesting RSUs that vest within 60 days after September 30, 2022, in the amount of 9,303 for Mr. Centurion, 10,266 for Mr. Comstock, 16,057 for Ms. Tekorius and 5,056 for Mr. Downes; (b) shares held in the Nonqualified Deferred Compensation Plan that the individual has a right to acquire within 60 days after September 30, 2022, in the amount of 11,599 for Mr. Fargo, 7,626 for Ms. Felton, 32,327 for Mr. Jack, 8,975 for Mr. Starling and 15,770 for Ms. Williams.

 

 

 

THE GREENBRIER COMPANIES

 

2023 Proxy Statement    

 

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          OWNERSHIP OF GREENBRIER COMMON STOCK

 

    

 

(4)

Less than 1%.

(5)

Excludes 4,784 shares held in the Nonqualified Deferred Compensation Plan that are not acquirable within 60 days after September 30, 2022.

(6)

Excludes 4,191 shares held in the Nonqualified Deferred Compensation Plan that are not acquirable within 60 days after September 30, 2022.

(7)

Excludes 2,842 shares held in the Nonqualified Deferred Compensation Plan that are not acquirable within 60 days after September 30, 2022.

(8)

Excludes 6,481 shares held in the Nonqualified Deferred Compensation Plan that are not acquirable within 60 days after September 30, 2022.

(9)

Excludes 39,518 shares held in the Nonqualified Deferred Compensation Plan that will be settled solely in cash.

(10)

Includes 43,558 time-vesting RSUs that vest within 60 days after September 30, 2022, and/or 76,297 shares held in the Nonqualified Deferred Compensation Plan that the applicable individual has a right to acquire within 60 days after September 30, 2022.

(11)

A portion of these shares for certain of the individuals is subject to certain vesting requirements.

(12)

As reported in Schedule 13G dated December 31, 2021, and filed with the SEC on January 27, 2022. BlackRock has sole voting power over 5,170,510 shares reported and sole dispositive power over all 5,256,077 shares reported. BlackRock does not have shared voting power or shared dispositive power over any of the shares reported.

(13)

As reported in Amendment No. 11 to Schedule 13G dated December 31, 2021, and filed with the SEC on February 10, 2022. The Vanguard Group has sole dispositive power with respect to 3,507,618 shares reported. The Vanguard Group has shared power to vote or direct to vote 29,561 shares reported and shared dispositive power with respect to 59,349 shares reported. The Vanguard Group does not have sole voting power over any of the shares reported.

(14)

As reported in Amendment No. 13 to Schedule 13G dated December 31, 2021, and filed with the SEC on February 8, 2022. Dimensional Fund Advisors LP (“Dimensional”) has sole voting power with respect to 2,295,355 shares reported and sole dispositive power with respect to all 2,342,167 reported. Dimensional, an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional may act as an adviser or sub-adviser to certain Funds. In its role as investment advisor, sub-advisor and/or manager, Dimensional or its subsidiaries may possess voting and/or investment power over the securities of the Company that are owned by the Funds and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported in the Amendment No. 13 to Schedule 13G are owned by the Funds. Dimensional disclaims beneficial ownership of such securities. In addition, the filing of the Schedule 13G shall not be construed as an admission that the reporting person or any affiliate of the reporting person is the beneficial owner of any securities covered by the Schedule 13G for any other purposes than Section 13(d) of the Securities Exchange Act of 1934.

(15)

As reported in Amendment No. 3 to Schedule 13G dated August 31, 2022, and filed with the SEC on September 8, 2022. Franklin Mutual Advisors (“FMA”) has sole voting power with respect to 1,774,797 shares reported and sole dispositive power with respect to all 1,873,641 reported. The securities reported herein are beneficially owned by one or more open-end investment companies or other managed accounts that are investment management clients of Franklin Mutual Advisers, LLC (“FMA”), an indirect wholly owned subsidiary of Franklin Resources, Inc. (“FRI”). When an investment management contract (including a sub-advisory agreement) delegates to FMA investment discretion or voting power over the securities held in the investment advisory accounts that are subject to that agreement, FRI treats FMA as having sole investment discretion or voting authority, as the case may be, unless the agreement specifies otherwise. Accordingly, FMA reports on Schedule 13G that it has sole investment discretion and voting authority over the securities covered by any such investment management agreement, unless otherwise noted in this Item 4. FMA and the FRI affiliates report the securities over which they hold investment and voting power separately from each other for purposes of Section 13 of the Act.

 

 

 

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THE GREENBRIER COMPANIES

 

 

    

 


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LOGO

 

    

 

PROPOSAL 3

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

 

For fiscal years 2022 and 2021, KPMG LLP (“KPMG”) performed professional services for the Company.

The Audit Committee has appointed, and recommends the approval of the appointment of, KPMG to audit the consolidated financial statements of the Company for fiscal 2023. Shareholder ratification of the Audit Committee’s selection of KPMG as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or otherwise. The Board of Directors, however, is submitting the selection of KPMG to the shareholders for ratification. In the event the shareholders do not ratify the appointment of KPMG, the selection of an independent registered public accounting firm will be determined by the Audit

Committee after careful consideration of any information submitted by the shareholders.

A representative of KPMG is expected to be present at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions.

In order for this Proposal 3 to be approved, the number of votes cast “FOR” approval must exceed the number of votes cast “AGAINST” approval. Broker discretionary voting of uninstructed shares is permitted on this Proposal 3. Abstentions will not affect the outcome of voting on this Proposal 3.

 

 

 

 

LOGO

 

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT AUDITORS FOR FISCAL 2023. UNLESS MARKED OTHERWISE, PROXIES RECEIVED WILL BE VOTED FOR THIS PROPOSAL.

 

 

 

Fees Paid to KPMG

The Audit Committee pre-approved 100% of the audit services, audit-related services, tax services and other services provided by KPMG in fiscal 2022 and 2021.

Audit, audit-related, tax and all other fees paid to KPMG for fiscal 2022 and 2021 aggregated $5,200,533 and $3,906,120 and were composed of the following:

 

 

 

2022

2021

Audit Fees

$

4,206,257

$

3,167,074

Audit-Related Fees

 

435,913

 

155,320

 

 

 

 

 

 

Total Audit and Audit-Related Fees

$

4,642,170

$

3,322,394

Tax Fees

 

558,362

 

555,166

All Other Fees

 

 

28,599

 

 

 

 

 

 

Total Audit, Audit-Related and Tax Fees

$

5,200,533

$

3,906,120