12 23 2021 Moog Proxy - FY2021 - FINAL - Flipbook - Page 17
What We Do
What We Don't Do
Pay for performance philosophy
No re-pricing SAR awards
Capped incentive payouts
No permitted hedging, short sale or derivative transactions in
Company stock
Challenging performance objectives through multiple metrics and
overlapping multi-year time horizons
No guaranteed salary increases or guaranteed incentive bonuses for
NEOs
Stock ownership guidelines for officers and directors
No excessive perquisites
Independent compensation consultant retained directly by Executive
Compensation Committee
No excise tax gross up
Change in control agreements are double triggered
No excessive dilution: as of October 2, 2021, total dilution was less
than 1% of the Company's outstanding shares
Executive Compensation Committee review compensation related
risks
The Role of Shareholder Say-On-Pay Votes
The Company provides its shareholders with the opportunity to cast an advisory vote every three years on its executive
compensation program (referred to as a “say-on-pay proposal”). At the Company’s Annual Meeting of Shareholders held on
February 9, 2021, approximately 88% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the
proposal. The Executive Compensation Committee believes this result affirms shareholders’ support of the Company’s approach
to executive compensation and therefore maintained this approach in fiscal 2021. The Executive Compensation Committee will
continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the NEOs.
Compensation Philosophy and Objectives
Moog seeks to fulfill the objective of its executive compensation program by linking annual changes in executive compensation to
overall Company performance, as well as each individual’s contribution to the results achieved. The emphasis on overall
Company performance is intended to align the executives’ financial interests with the interests of shareholders. Moog also seeks
fairness in total compensation with reference to external comparisons, internal comparisons and the relationship between
management and non-management remuneration.
The Company’s executive compensation program aims to take a balanced approach. We recognize that near-term shareholder
value can be created by the achievement of near-term results. To reward near-term success, annual salary increases are linked
to market rates and individual job performance and the STI payment reflects annual increases in EPS and FCF conversion.
These targets are independent of each other and the payment received under the STI plan ultimately depends on performance
against these two criteria. "On target" performance would be EPS growth of 10% and FCF conversion of 100%. The STI is
comprised of a cash and stock element, typically paid out in a ratio of cash to stock of 2:1.
The Company’s business, particularly in aerospace and defense, requires that executives make decisions and commitments
where benefits, in financial terms, take years to develop. The LTI awards are intended to reward long-term success and to align
executives’ financial interests with those of long-term shareholders through the award of PSUs in conjunction with SARs and
TVAs under the 2014 LTI Plan. The PSUs vest conditionally based on a three-year performance period, using total sales and
operating margin targets.
The Company believes that its total executive compensation program maintains alignment between both short and long-term
incentives, Company performance and the interests of shareholders. The metrics selected for linkage to these plans were
chosen because of their profile within the Company as key performance indicators.
Roles and Governance
The Executive Compensation Committee
The Executive Compensation Committee of the Board is composed solely of independent, non-employee directors. The
Executive Compensation Committee meets to determine CEO compensation and has final approval on all elements of officer
compensation. Any changes in benefit plans which affect executive officers are presented to the Executive Compensation
Committee for review and approval, prior to presentation to the entire Board for subsequent approval.
For fiscal 2021, this committee was comprised of the following members:
William G. Gisel, Chair
R. Bradley Lawrence
Peter J. Gundermann
Brian J. Lipke
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