Annual Corporate
Governance
Review
Contact Information
Meghan Elmblad,
Interim Manager of Investor Relations
-
262-7112
investors@timken.com
The Timken Company
Company Overview | 2 |
Celebrating 125 years in 2024 since our founding NYSE listed since 1922
Leader in Engineered Bearings and Industrial Motion >19K Employees Operating in 45 Countries
>100 Years of Continuous Quarterly Dividends $4.8B Revenue
1.6% Dividend Yield(1)
Flagship Brands
Sales by Geography(2)
53% Americas
25% Europe, Mid-East,
Africa (EMEA)
22% Asia-Pacific
Business Segment Sales(2) | Channel Overview(2) |
68% | Engineered Bearings | 60% | Original Equipment Customers |
32% | Industrial Motion | 40% | Distributors/End-Users |
- Total dividend yield as of December 31, 2023.
- Percentage of actual sales for 2023.
Experienced and Diverse Executive Officer Team | 3 |
Richard G. Kyle
President and
Chief Executive Officer
18 years at Timken; over 30 years of industry experience
Christopher A. Coughlin
Executive Vice President, President of Industrial Motion
40 years at Timken
Philip D. Fracassa
Executive Vice President, Chief Financial Officer
18 years at Timken; over 30 years of industry experience
Andreas Roellgen
Executive Vice President and President of Engineered Bearings
26 years at Timken
Hansal N. Patel | Natasha Pollock |
Vice President, General | Vice President, |
Counsel and Secretary | Human Resources |
12 years at Timken; nearly 20 | 22 years at Timken |
years of industry experience |
Highly Qualified, Diverse Board of Directors | 4 |
John M. Timken, Jr. | Richard G. Kyle | Maria A. Crowe | Elizabeth A. Harrell | Sarah C. Lauber | John A. Luke, Jr.* |
Independent Chairman, | President and | Retired President of | Retired Major General, | Executive Vice President, | Retired Chairman, WestRock Co.; |
Board of Directors | Chief Executive Officer | Manufacturing Operations | USAF | CFO & Secretary | Retired President and CEO, |
The Timken Company | The Timken Company | Eli Lilly and Company | Douglas Dynamics, Inc. | MeadWestvaco Corporation |
Christopher L. Mapes | James F. Palmer | Ajita G. Rajendra | Frank C. Sullivan | Ward J. Timken, Jr. |
Executive Chairman of the Board | Retired Corporate Vice President | Retired Executive Chairman, | Chairman and | Chief Executive Officer |
Lincoln Electric Holdings, Inc. | and Chief Financial Officer | President and CEO | Chief Executive Officer | McKinley Strategies LLC |
Northrop Grumman Corporation | A. O. Smith Corporation | RPM International Inc. | ||
*Mr. Luke has reached 75 years of age and will not be standing for reelection at the 2024 Annual Meeting of Shareholders in accordance with the Board's retirement policies.
Highly Independent, Diverse Board | 5 |
Committee Memberships | ||||||
Name and Title | Age* | Director since | Independent | Audit | Compensation | Nominating & |
Corporate Governance | ||||||
Maria A. Crowe | 64 | 2014 | ✓ | ✓ | ✓ | |
Retired President of Manufacturing Operations, Eli Lilly and Company | Chair | |||||
Elizabeth A. Harrell | 70 | 2017 | ✓ | ✓ | ✓ | |
Retired Major General, U.S. Air Force | ||||||
Richard G. Kyle | 58 | 2013 | ||||
President and Chief Executive Officer, The Timken Company | ||||||
Sarah C. Lauber | 52 | 2021 | ✓ | ✓ | ✓ | |
Executive Vice President, CFO & Secretary, Douglas Dynamics, Inc. | ||||||
John A. Luke, Jr.* | 75 | 1999 | ✓ | ✓ | ✓ | |
Retired Chairman, WestRock Company; Retired President and CEO, MeadWestvaco Corporation | ||||||
Christopher L. Mapes | 62 | 2014 | ✓ | ✓ | ✓ | |
Executive Chairman of the Board, Lincoln Electric Holdings, Inc. | ||||||
James F. Palmer | 74 | 2015 | ✓ | ✓ | ✓ | |
Retired Corporate Vice President and Chief Financial Officer, Northrop Grumman Corporation | Chair | |||||
Ajita G. Rajendra | 72 | 2014 | ✓ | ✓ | ✓ | |
Retired Executive Chairman, President and CEO, A. O. Smith Corporation | Chair | |||||
Frank C. Sullivan | 63 | 2003 | ✓ | ✓ | ✓ | |
Chairman and Chief Executive Officer, RPM International Inc. | ||||||
John M. Timken, Jr. | 72 | 1986 | ✓ | |||
Chairman, Board of Directors, The Timken Company | Independent | |||||
Chairman | ||||||
Ward J. Timken, Jr. | 56 | 2002 | ✓ | |||
Chief Executive Officer, McKinley Strategies, LLC | ||||||
Other Public
Boards
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*Mr. Luke has reached 75 years of age and will not be standing for reelection at the 2024 Annual Meeting of Shareholders in accordance with the Board's retirement policies.
Board Nominee Composition Overview | 6 |
GENDER AND ETHNIC
DIVERSITY
3
6
1
Gender Ethnic Other
INDEPENDENCE
LEADERSHIP | REFRESHMENT | |
2/3 of Committee | Over half of our | 90% |
Chairs are | current Board | |
ethnically or | refreshed within | |
gender diverse | the last decade |
40% of Board nominees are diverse by either gender or ethnicity
Representative Skills and Attributes of our Board | 7 |
LEADERSHIP AND GOVERNANCE
Senior leadership experience at a large organization, including current or former service as a public company officer (CEO, CFO, etc.) or high-ranking military officer, or other public company board service leading to valuable insight on corporate governance matters
HUMAN CAPITAL MANAGEMENT
Expertise in talent management, public company compensation structures, key employee development and retention, and executive succession planning
GLOBAL OPERATIONS
Service in a leadership role with multinational companies or in global markets, leading to a deep knowledge of global industry dynamics and international supply chain management
MANUFACTURING AND ENVIRONMENTAL MANAGEMENT
Expertise in manufacturing operations and logistics and environmental management to drive operating performance through sustainable means
FINANCIAL REPORTING AND CAPITAL ALLOCATION
Experience in the finance function of an enterprise, including an in-depth understanding of financial management, financial reporting and capital allocation processes
MARKETING AND SALES
Expertise in marketing, sales, and customer service in a business-to-business (B2B) context
CORPORATE SOCIAL RESPONSIBILITY
Experience with management oversight of a public-company corporate social responsibility program or sustainability function
STRATEGY AND M&A
Responsibility for driving growth through innovative strategic initiatives and through acquisitions and other business combinations
RISK MANAGEMENT
Experience with risk management and compliance oversight relevant to the exercise of fiduciary responsibilities
GOVERNMENTAL AND REGULATORY AFFAIRS
Insight into managing governmental and regulatory affairs in a complex and global business environment
INFORMATION SECURITY
Expertise in managing the information security and data privacy functions of complex organizations
Strong Corporate Governance Practices | 8 |
BOARD INDEPENDENCE
- 9 of 10 Director nominees are independent
- Independent Chair of the Board
DIRECTOR ELECTIONS
- Commitment to Board refreshment and diversity - 6 new Directors (representing over half of our Board) added in the past decade
- 2 of 3 of the committee chairs are ethnically or gender diverse
- All committee members are independent
- Declassified Board with annual Board elections
- Directors are elected by a majority of votes cast, and our Majority Voting Policy requires any Director who fails to receive a majority of the votes cast in favor of his or her election to submit his or her resignation to the Board
BOARD PRACTICES
- Stock ownership requirements for nonemployee Directors (5x cash retainer)
- At each Board meeting, the independent Directors have the opportunity to conduct executive sessions
- Annual Board, committee and Director evaluations
- Over-boardingpolicy limits the number of public company boards a Director can serve on
SHAREHOLDER RIGHTS
- Shareholder proxy access with 3/3/20/20 parameters
- Special meetings may be called by shareholders holding 25% of the Company's common shares
- No "supermajority" voting requirements
OTHER BEST PRACTICES
- Annual advisory vote on our named executive officer compensation with consistently strong shareholder support over the past five years
- 4 of 10 Director nominees are ethnically or gender diverse
- Code of Conduct for Directors, officers and employees
- Strong focus on shareholder engagement - over 500 interactions with investors in 2023
- Audit Committee or Board receives reports on cyber security threats and trends at least annually and receives regular updates on our information security program
- Nominating and Corporate Governance Committee provides oversight for Corporate Social Responsibility program
- Annual corporate social responsibility report references GRI, SASB and TCFD in response to investor preferences
Executive Compensation Philosophy - Pay for Performance | 9 |
and Strong Alignment with Shareholders |
We utilize our executive compensation plans and program to help us attract, motivate, reward and retain highly-qualified executives who are capable of creating and sustaining value for our shareholders over the long term.
OBJECTIVES | PHILOSOPHY | |
Align the interests of our executives and shareholders | Recognizing that people are our most important resource | |
Reward sustained, strong business results | Rewarding results linked to both short- and long-term performance | |
Incentivize profitable growth and capital deployment discipline | (pay-for-performance) | |
Positioning our pay to be competitive in the marketplace | ||
Attract, retain and motivate the best talent | ||
Focusing on increasing shareholder value | ||
Consistent, Strong Support of Named Executive Officer Compensation
97% | 96% | 97% | 98% | 98% |
2019 | 2020 | 2021 | 2022 | 2023 | ||||||
Compensation Best Practices | 10 |
What We Do | What We Do Not Do | ||
We utilize stock ownership requirements for executives (7x | We do not re-price outstanding stock options and have | ||
base salary for CEO and 2x-3x for the other named | |||
eliminated options from our award mix | |||
executive officers) | |||
We have a standalone clawback policy that provides for the | |||
recovery of excess compensation as required by the SEC | We do not provide excise tax gross-ups on perquisites or | ||
and NYSE while also incorporating additional clawback and | under named executive officer severance agreements | ||
forfeiture provisions | |||
We use shareholder-approved plans to provide short- and | We do not allow hedging or pledging of our shares | ||
long-term incentives | |||
We use different metrics for short- and long-term incentive | We do not have employment agreements for our named | ||
plans that are designed to align pay with performance, | |||
executive officers | |||
including relative TSR for long-term incentive compensation | |||
We provide very limited perquisites | We do not have single-trigger vesting | ||
We have a minimum one-year vesting period on all equity | We stopped providing pension benefits to newly appointed | ||
grants (in addition to any other criteria for vesting) | executive officers several years ago* | ||
*Note: Excludes statutorily mandated pension benefits provided in certain jurisdictions outside the United States.
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The Timken Co. published this content on 21 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2024 17:48:35 UTC.