Stockholder Engagement

Ongoing engagement and dialogue with our stockholders is important to the Company. We have adopted a robust and active year-round engagement philosophy that includes outreach for various purposes, including soliciting feedback in advance of filing this Proxy Statement. Our outreach efforts, led by our Board with input from the Compensation and Management Development Committee, sought feedback on governance priorities, compensation programs, and environmental and social issues. In our most recent pre-proxy season engagement cycle:

We contacted

30

of our top stockholders

representing approximately

62%

of our outstanding common stock

We held approximately

8

meetings with stockholders

representing approximately

23%

of our outstanding common stock

We engaged with stockholders in the following ways:

Off Season Engagement

  • Engaged stockholders to understand their respective viewpoints
  • Educated stockholders around the Company's corporate strategy, business developments, and financial position
  • Engaged stockholders to understand any perception gaps between the Company's performance and stockholder interpretation of performance

Engagement Prior to Annual Meeting

  • Sought feedback on potential matters for stockholder consideration at the Annual Meeting
  • Discussed any areas of concern that stockholders voiced

Engagement Around and After Annual Meeting

  • Provide clarification on matters being voted on after Annual Meeting material is published
  • Seek feedback on areas of concern to inform the Board's future decisions

Our Response to Stockholder Feedback

The Compensation and Management Development Committee carefully considers feedback from our stockholders regarding our executive compensation practices, as well as other compensation and governance best practices. The Compensation and Management Development Committee implemented a series of changes to our executive compensation program in fiscal 2022 and fiscal 2023 and stockholders responded favorably. We maintained the changes in fiscal 2024 and 2025 and stockholders indicated continued support during our annual outreach program. Our say on pay (“Say on Pay”) vote results of 95% or more of votes cast in favor of Say on Pay at each annual meeting for the past three years illustrate this support.

Corporate Governance Enhancements

Key enhancements to our governance practices since 2020 include:

  • Continued refreshment of our Board membership, the leadership of our standing committees, and the membership of our standing committees, including focused succession planning (2020-2025)
  • Amended the Company’s Bylaws and Certificate of Incorporation to eliminate supermajority voting provisions (2021)
  • Amended the Company’s Certificate of Incorporation to allow Bylaw amendment granting stockholders’ right to call a special meeting (2021)
  • Amended our Code of Ethics and Business Conduct to highlight our commitment to: remaining vigilant to prevent money laundering; designing, sourcing and producing safe quality products for our customers; and complying with all requirements for doing business with the government or on publicly funded projects (2023)
  • Amended and Restated our Incentive-Based Compensation Recoupment Policy to comply with recently adopted New York Stock Exchange (“NYSE”) listing standards and Securities and Exchange Commission (“SEC”) regulations governing compensation recovery policies (2023)
  • Amended and Restated our Certificate of Incorporation to provide for exculpation of certain officers of the Company, to the extent permitted by the Delaware General Corporation Law (2024)
  • Amended our Bylaws to address changes in SEC rules regarding universal proxy cards and changes in Delaware law (2024)
  • Amended the Company’s Anti-Bribery and Anti-Corruption Policy and Whistleblower and Non-Retaliation Policy to reflect the various laws and regulations in the jurisdictions where we operate as we expand geographically (2024)
  • Revised the Company’s Stock Ownership Guidelines to remove unexercised stock options and unvested performance awards from the pool of shares that are eligible to satisfy the minimum ownership requirements of the Stock Ownership Guidelines (2025)

Governance Best Practices

The Board takes seriously its responsibility to represent the interests of stockholders and is committed to good corporate governance. To that end, the Board has adopted a number of policies and processes, including:

Board Independence & Oversight

  • Strong independent Lead Director
  • Robust director refreshment and succession planning process (5 new independent directors added since 2020)
  • Annual, robust Board and committee self-evaluation process
  • Oversight of risk management by the Board
  • Oversight of EarthLIGHT goals by the Governance Committee

Stockholder Rights

  • Majority voting for directors in uncontested elections
  • Annual election of all directors
  • Proxy access bylaw
  • No stockholder rights plan or "poison pill"

Equity Risk Mitigation

  • Executive and director stock ownership guidelines and retention requirements until ownership level achieved
  • Prohibitions on hedging and pledging of our common stock
  • Clawback policy (compliant with and exceeding NYSE listing standards) for incentive compensation paid to current and former covered officers

Executive Compensation Highlights

The Compensation and Management Development Committee reviews the Company’s executive compensation program to determine whether any changes are needed to align our compensation program with long-term stockholder value creation and strengthen our pay aligned to performance approach to compensation for our NEOs. In fiscal 2023, we added an rTSR metric to the PSUs for our NEOs and increased the weighting of LTIP awards for NEOs other than the CEO, whose LTIP awards were already 75% performance-based. These changes strengthened our overall compensation framework and reflected feedback from our stockholders. Given the Company’s strong performance and the continued effectiveness of our plan design, no significant design changes have been made to our compensation program since fiscal 2023.

Executive Compensation Strategy

Our compensation strategy is consistent with and supportive of our long-term goals and is founded on the following principles:

  • alignment of pay, performance and stockholder value creation;
  • reinforcement of the Company’s business and operating strategy;
  • competitive peer group and market practice;
  • motivation and retention of key talent; and
  • flexibility to withstand uncertainty and difficulty in a challenging economic climate.

Compensation Program Design

During our stockholder engagement in fiscal 2025, we shared an overview of our current executive compensation programs and discussed with interested stockholders program changes implemented during the past few years, such as the addition of an rTSR metric and increasing the weighting of our performance-based compensation for NEOs. After reviewing market trends and receiving stockholder support for our programs, we made no compensation program design changes for fiscal 2025.

 

Compensation Best Practices

What We Do

  • We align pay and performance by providing a greater portion of compensation in incentive compensation
  • We conduct an annual compensation risk assessment to help ensure that our executive compensation program does not encourage excessive risk taking
  • We conduct an annual review of peers, as well as benchmark pay practices and pay levels to ensure compatibility
  • We retain an independent compensation consultant to advise on director and executive compensation matters
  • We conduct regular outreach with stockholders to discuss and review our executive compensation program
  • We have stock ownership guidelines for all executive officers and directors
  • We maintain a clawback policy that complies with and exceeds the SEC rules and NYSE listing standards, and we include clawback rights in our equity award agreements
  • We have an annual Say on Pay vote

What We Don't Do

  • We do not have employment agreements with executive officers
  • We do not have “single-trigger” provisions for payout of benefits under change in control agreements
  • We do not have tax gross-ups in severance or change in control agreements
  • We do not allow new SERP participants
  • We do not allow executive loans
  • We do not permit hedging or pledging of stock by directors and executive officers
  • We do not pay dividends on equity awards until performance units are earned or time-based awards vest
  • We do not allow repricing or backdating of stock options
  • We do not provide excessive perquisites to our executives