Moog Proxy - FY2022 - Host - Flipbook - Page 19
Principal Elements of the Executive Compensation Program
Base Salary
Both the Executive Compensation Committee and the Company use Korn Ferry’s Job Evaluation methodology for professional
roles, including its NEOs. Korn Ferry’s Job Evaluation methodology is an analytical, factor-based scheme that measures the
relative importance of jobs by assigning them points within an organization. Each NEO has an evaluation score that is used to
benchmark compensation. Korn Ferry provides annual peer-company salary data, as well as data from their wider executive
compensation survey. This information provides the basis for determining a competitive base salary for each position. NEOs’
base salaries are reviewed annually, and adjustments are based on a comparison with market benchmarks, time in position and
individual job performance.
Short Term Incentive (STI)
The Company’s senior managers and executives consist of over 400 individuals. This entire group, including the NEOs,
participates in the STI plan in which bonus payouts each year are a function of the Company’s performance against annual
adjusted EPS and FCF targets. Any payout depends entirely on these two elements. The two elements operate independently of
each other and there are no individual performance incentives in the formula.
The Company uses these two metrics to underscore the importance of collaboration at all levels of leadership. The Company
supplies products to a diverse array of customers in a variety of global markets. The common thread is that the technology used
in our high-performance precision control and fluid flow systems and our other key technical resources are transferable from one
segment to another in response to fluctuating customer demands. Having our senior leadership focus on “what’s good for the
Company” has been an important factor in the Company’s performance. For a detailed explanation of the STI calculation
method, refer to the Short Term Incentive (STI) section under The Process Used to Determine Compensation beginning on page
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Long Term Incentive (LTI)
Moog Inc. 2014 Long Term Incentive Plan
In January 2015, the 2014 LTI Plan was approved by shareholders, providing for the grant of awards covering 2,000,000 Class A
or Class B shares of stock. The 2014 LTI Plan was implemented to provide a more flexible framework that permits the
development and implementation of a variety of stock-based incentives, which enable the Company to base awards on key
performance metrics, as well as to further align our LTI compensation with our peers and shareholder interests.
The LTI awards granted in fiscal 2022 continued to consist of SARs, PSUs and TVAs. SARs align awards to share price
increases over the medium to long term. PSUs provide an equity compensation element that is linked to key performance
indicators. The number of PSUs that will vest depends on growth and profitability performance, which will be measured at the
end of a three-year performance period. TVAs balance the Company's LTI mix in the form of cash-denominated, time-vested
awards that may be settled in cash or a number of shares of stock based upon the current stock price at vesting. It is intended
that TVAs will be settled to Class B shares upon vesting.
All SARs and PSUs granted in fiscal 2022 were issued in underlying Class B shares.
The number of annual SARs, PSUs and TVAs awarded was determined utilizing Korn Ferry peer company survey data as part of
the analysis. Individual performance is not used to determine the number of awards.
Moog Inc. 2008 Stock Appreciation Rights Plan (2008 SAR Plan)
Issuances of new awards under the 2008 SAR Plan terminated on January 7, 2015 following shareholder approval of the 2014
LTI Plan. The 2008 SAR Plan covers outstanding SARs, which confer a benefit based on appreciation in value of Class A shares
and are settled in the form of Class A shares.
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