Moog Proxy - FY2022 - Host - Flipbook - Page 16
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This compensation discussion and analysis ("CD&A") provides detailed information about the compensation arrangements for
the Company’s named executive officers ("NEOs"):
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John R. Scannell — Chief Executive Officer; Chairman of the Board; and Director *
Jennifer Walter — Vice President; Chief Financial Officer
Patrick J. Roche — Executive Vice President; Chief Operating Officer *
Mark J. Trabert — Vice President; President, Aircraft Controls
Maureen M. Athoe — Vice President; President, Space and Defense Controls
*As announced on November 16, 2022, Mr. Scannell intends to retire as CEO, effective February 1, 2023 and Mr. Roche will be
promoted to CEO.
This CD&A includes the Executive Compensation Committee’s compensation philosophy, the objectives of our compensation
program and a discussion of each element of compensation paid to the NEOs for our most recent fiscal year.
Executive Summary
The objective of the Company’s executive compensation program is to provide a compensation package that will attract, retain,
motivate and reward superior executives who must operate in a highly competitive and technologically challenging environment.
2022 Performance
Fiscal 2022 was a strong year for the Company despite the challenges associated with COVID-19, supply chain, inflation and
labor shortages. Sales of $3 billion, a record high, were up 6% compared to fiscal 2021. The main drivers of growth were the
commercial aircraft business, both OEM and aftermarket, as well as increased sales in our RIwP® turret program in Space and
Defense. Our reported earnings per share for fiscal 2022 of $4.83 included $0.73 per share of charges associated with various
impairment charges and our portfolio shaping activities. Cash flows from operating activities in fiscal 2022 of $247 million
included a $100 million benefit from our Amended and Restated Receivables Purchase Agreement ("RPA"). Capital deployment
in fiscal 2022 included payments of dividends totaling $33 million and repurchasing approximately 487,000 shares of Company
stock for an aggregate purchase price of approximately $36 million. Additional information regarding the Company's financial
results may be found in the audited financial statements in Moog’s Annual Report on Form 10-K for the fiscal year ended
October 1, 2022. Additional information regarding adjustments made between the Company’s reported and adjusted results can
be accessed in the Supplemental Data published with the fiscal 2022 fourth quarter earnings release on our website at
www.moog.com by selecting Investors, Webcasts and then Event Archives.
2022 Executive Compensation Assessment
The Executive Compensation Committee uses data provided by Korn Ferry, our compensation consultant, to establish
competitive salaries for each of the NEOs. Information regarding the compensation consultant and this analysis is provided in
greater detail throughout the CD&A.
Our total direct compensation programs consist of base salary, short-term incentive (“STI”), and long-term incentive (“LTI”), as
well as other benefits, each of which are discussed below. However, the Executive Compensation Committee also considers how
our total compensation compares with the total compensation of comparable executives in peer organizations and the broader
marketplace.
In summary, the key aspects of the Company’s compensation for the NEOs are as follows:
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Base salary increases tied to market benchmarks, time in position and individual job performance;
STI based upon increases in adjusted earnings per share (“Adjusted EPS”) and free cash flow (“FCF”);
LTI awards in the form of SARs, performance-based restricted stock units ("PSUs") and time-vested awards ("TVAs")
link NEO compensation to long-term shareholder interests; and
Benefits that include retirement and medical coverage.
Moog’s executive compensation compared to market can be summarized as:
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Base salaries are between 90% and 103% of market median with an average of 96%;
Total Cash Compensation ("TCC") for all NEOs falls between 67% and 99% of market median with an average of 81%;
and
Total Direct Compensation ("TDC") for all NEOs falls between 59% and 97% of market median, with an average of 77%.