C.H. Robinson Worldwide (CHRW) DEF 14ADefinitive proxy

This Proxy Statement is soliciting your proxy for use at the C.H. Robinson Worldwide, Inc., 2021 Annual Meeting of Shareholders. A proxy enables your shares of Common Stock to be represented and voted at the Annual Meeting. Our Annual Meeting will be virtual only and held at 1:00 p.m. Central Time on Thursday, May 6, 2021. You may attend the virtual meeting and vote your shares electronically by visiting www.virtualshareholdermeeting.com/CHRW2021. This proxy can also be used at any adjournment or postponement of the Annual Meeting.

This proxy is requested by the Board of Directors of C.H. Robinson Worldwide, Inc., (“the company,” “we,” “us,” "C.H. Robinson”) for the following purposes:

Holders of record of C.H. Robinson Worldwide, Inc., Common Stock, par value $0.10 per share, at the close of business on March 10, 2021, are entitled to vote at our Annual Meeting. March 10, 2021, is referred to as the record date. As of the record date, 131,142,265 shares of Common Stock were outstanding. Each share is entitled to one vote. There is no cumulative voting.

Shares are counted as present at the Annual Meeting if either the shareholder is present and votes during the Annual Meeting, or has properly submitted a proxy by mail, by telephone, or by internet. To achieve a quorum and conduct business at the Annual Meeting, a majority of our issued and outstanding Common Stock as of March 10, 2021, must be present and entitled to vote. If a quorum is not represented at the Annual Meeting, the shareholders and proxies entitled to vote will have the power to adjourn the Annual Meeting until a quorum is represented.

If you submit your vote before the Annual Meeting using any of the following methods, your shares of Common Stock will be voted as you have instructed:

Your vote is important, and we encourage you to vote promptly. Online and telephone voting are available through 11:59 p.m. Eastern Time on Wednesday, May 5, 2021, for all shares entitled to vote. The company will be hosting the Annual Meeting virtually this year, which we believe allows C.H. Robinson to be more inclusive and reach a greater number of our shareholders. To attend the virtual meeting please visit www.virtualshareholdermeeting.com/CHRW2021 and be sure to have the 16-digit control number provided to you on your Notice of Internet Availability of Proxy Materials or Proxy Card. If you are a beneficial shareholder (you hold your shares through a nominee, such as a broker), your nominee can advise you whether you will be able to submit voting instructions by telephone or via the internet. Submitting your proxy will not affect your right to vote electronically, if you decide to login with your 16-digit control number and attend the virtual only Annual Meeting. Shareholders logging into the Annual Meeting with their 16-digit control number will receive the same rights and opportunities to participate in the Annual Meeting as they would if the meeting was an in-person meeting. This includes having the ability to ask questions throughout the Annual Meeting and having those questions answered during the question and answer period at the end of the Annual Meeting, to the extent such questions are related to the business being conducted at the Annual Meeting. Shareholders logging in with their 16-digit control number will be able to ask questions at any time during the Annual Meeting. Relevant questions related to business being conducted at the Annual Meeting will be answered following the adjournment of the Annual Meeting, and the company will prioritize questions that relate to the proposals considered at the Annual Meeting. If a shareholder asks general questions about C.H. Robinson, a representative of the company will respond to the shareholder following the adjournment of the Annual Meeting. Shareholders can learn more information about how to access the Annual Meeting by visiting www.virtualshareholdermeeting.com/CHRW2021.

If you do not return voting instructions with your proxy, your proxy will be voted:

Generally, a shareholder who does not vote themselves or by proxy on a director nominee or a proposal is not considered present for determining whether the director nominee is elected, or whether the proposal has been approved. Brokers cannot vote shares on their customers’ behalf on “non-routine” proposals without receiving voting instructions from a customer but may vote shares on “routine” proposals without such instructions. The only routine proposal among the three listed above is the proposal to ratify the selection of Deloitte & Touche. If a broker does not receive voting instructions from its customer with respect to the other non-routine proposals and is precluded from voting on those proposals, then a “broker non-vote” occurs. If a broker returns a proxy indicating a lack of authority to vote on non-routine proposals, the shares represented by the proxy will be deemed present at the meeting for purposes of determining a quorum, but not present for purposes of calculating the vote on the non-routine proposals.

Regarding the proposals involving the election of directors (proposal one) and the ratification of Deloitte & Touche (proposal three):

Regarding the advisory proposal on the compensation of our named executive officers (proposal two):

Pursuant to our Bylaws, each of the proposals in this Proxy Statement (other than the advisory vote on the compensation of our named executive officers) requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock voted directly by the shareholder or by proxy at the Annual Meeting and entitled to vote, provided that a quorum is present at the Annual Meeting. Regarding the advisory vote on the compensation of our named executive officers, we will consider shareholders to have approved this proposal if the votes cast FOR the proposal exceed the votes cast AGAINST the proposal.

You may revoke your proxy and change your vote at any time before the voting closes at the Annual Meeting. You may do this by submitting a properly executed proxy with a later date, or by delivering a written revocation to the corporate secretary’s attention at the company’s address listed above, or during the Annual Meeting.

C.H. Robinson did not receive written notice of any shareholder proposal and, as of the date of this Proxy Statement, the Board of Directors knows of no business that will be presented for consideration at the Annual Meeting other than the matters described in this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the persons named in the proxy card will have discretionary authority to vote on such matters and will vote according to their best judgment.

There are ten nominees for election to the C.H. Robinson Board of Directors for a one-year term, all of whom are current directors. The Board of Directors has set the number of directors constituting the Board of Directors at ten.

Scott P. Anderson, Robert C. Biesterfeld Jr., Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak, Brian P. Short, James B. Stake, and Paula C. Tolliver are directors whose terms expire at the 2021 Annual Meeting. On the recommendation of our Governance Committee, the Board of Directors has nominated Directors Anderson, Biesterfeld, Crawford, Fortun, Gokey, Guilfoile, Kozlak, Short, Stake, and Tolliver for election to the Board of Directors at the Annual Meeting for terms of one year each. Each has indicated a willingness to serve. Mr. Crawford is standing for election by the shareholders for the first time at this Annual Meeting. Mr. Crawford was identified as a potential candidate for the Board of Directors by a third-party search firm and appointed by the Board of Directors on September 23, 2020.

Robert C. Biesterfeld Jr. and Ben G. Campbell will vote the proxies received by them for the election of Directors Anderson, Biesterfeld, Crawford, Fortun, Gokey, Guilfoile, Kozlak, Short, Stake, and Tolliver unless otherwise directed. If any nominee becomes unavailable for election at the Annual Meeting, Mr. Biesterfeld and Mr. Campbell may vote for a substitute nominee at their discretion as recommended by the Board of Directors.

The Board of Directors has determined that all the directors, except for Mr. Biesterfeld, are independent under the current standards for “independence” established by the Nasdaq Stock Market, on which C.H. Robinson’s stock is listed under the symbol “CHRW”. In connection with its evaluation of director independence, the Board of Directors considered the following transactions, all of which were entered into in the ordinary course of business:

The Board considered these relationships and their significance in determining that these directors are independent. Information concerning the nominees is below.

The Board of Directors (or the “Board”) has a policy that all directors and nominees nominated for election at the Annual Meeting are expected to attend the Annual Meeting. In 2020, all of the director nominees who were directors at that time attended the Annual Meeting.

During 2020, the Board of Directors held eight meetings. Each director holding office during the year attended at least 75 percent of the aggregate of the meetings of the Board of Directors (held during the period for which he or she had been a director) and the meetings of the committees of the Board on which he or she served (held during the period for which he or she served on a committee).

Our Board of Directors has three committees: the Audit Committee, the Compensation Committee, and the Governance Committee. Currently, members and chairs of these committees are:

In 2019, the Board amended our Corporate Governance Guidelines to provide that the Board will appoint a lead independent director any time that the chairman of the board is not independent, and it described the duties of the lead independent director. The Board appointed Scott P. Anderson to serve as lead independent director beginning in May 2019. In May 2020, Mr. John P. Wiehoff retired from the Board of Directors and Mr. Anderson began serving as the chairman of the Board of Directors, as well as the Chair of the Governance Committee.

Our Corporate Governance Guidelines provide that the chairman, in consultation with other Board members, sets the agenda for regular meetings of the Board, and the chair of each committee is responsible for the agendas for the meetings of the applicable committee. Directors and committee members are encouraged to suggest agenda items and may raise other matters at meetings.

We believe that our leadership structure supports the Board’s risk oversight function. Strong independent directors with significant tenure on the Board chair the committees most directly involved in the risk oversight function, there is open communication between management and the Board, and all directors are involved in the risk oversight function.

All of our Audit Committee members are “independent” under applicable Nasdaq listing standards and Securities and Exchange Commission rules and regulations. Our Board of Directors has determined that all five members of the Audit Committee, Messrs. Anderson, Gokey, Short, and Stake, and Ms. Tolliver, meet the definition of an “Audit Committee Financial Expert” as established by the Securities and Exchange Commission. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to the quality and integrity of the financial reports of the company. The Audit Committee has the sole authority to appoint, review, and discharge our independent auditors, and has established procedures for the receipt, retention, and response to complaints regarding accounting, internal controls, or audit matters. In addition, among other responsibilities in the Audit Committee Charter, the Audit Committee is responsible for:

The Governance Committee considers Board of Director nominees recommended by shareholders. The process for receiving and evaluating these nominations from shareholders is described below under the caption “Nominations.”

The Governance Committee held three meetings during 2020.

The charters for each of the Committees of the Board of Directors, our Corporate Governance Guidelines, and our company’s Code of Ethics, which are all a part of our Corporate Compliance Program, are posted under the Governance section of the Investors page of our website at www.chrobinson.com.

C.H. Robinson shareholders and other interested parties may send written communications to the Board of Directors or to any individual director by mailing it to C.H. Robinson Worldwide, Inc., Board of Directors, c/o C.H. Robinson Corporate Secretary, 14701 Charlson Road, Suite 1200, Eden Prairie, MN 55347. These communications will be compiled by the corporate secretary and periodically submitted to the Board or individual director.

The Governance Committee considers director nominee recommendations from a wide variety of sources, including members of the Board of Directors, business contacts, community leaders, and members of management. The Governance Committee will also consider shareholder recommendations for director nominees using the same selection criteria and qualifications as nominees identified by other sources, as described below. The Governance Committee may also engage search firms to assist in the director recruitment process.

The Governance Committee determines the selection criteria and qualifications of director nominees based upon the needs of the company. The Board of Directors believes that the directors should possess the highest personal and professional ethics and integrity and be committed to representing the long-term interests of the company’s shareholders. Preferred qualifications also include current or recent experience as a chief executive officer or senior leadership and expertise in a particular business discipline. Directors should be able to provide insights and practical wisdom based on their experience and expertise. The company is committed to diversity and inclusion. Corporate Governance Guidelines

provide, and the Governance Committee believes, that creating a board with a diversity of gender, ethnicity, background, talent, experience, accomplishments, and perspectives is in the best interests of the company and our shareholders. The company is committed to considering candidates for the Board, regardless of gender, ethnicity, and national origin. Any search firm retained to assist the Governance Committee in seeking director candidates is instructed to consider these commitments.

We also provide shareholders with a “proxy access” right that entitles shareholders meeting certain eligibility requirements to include nominees for director in our proxy statement. The proxy access right entitles a shareholder, or group of up to 20 shareholders, owning at least 3 percent of our outstanding shares of Common Stock continuously for at least three years to nominate and include in our proxy statement director nominees constituting up to the greater of two individuals or 20 percent of the Board of Directors. The shareholder’s notice must be delivered to the company’s corporate secretary as set forth above and must be received by the corporate secretary no earlier than 150 days, and no later than 120 days, before the anniversary date of the mailing of the previous year’s proxy statement, unless an alternative deadline under our Bylaws is triggered. Accordingly, nominations for inclusion in our proxy statement for the 2022 Annual Meeting must be received no earlier than October 24, 2021, and no later than November 23, 2021, unless an alternative deadline is triggered. In addition, the shareholder’s notice must comply with the information requirements described above for other direct nominations of director candidates, as well as the additional notice and information requirements described in our Bylaws.

No candidates for director nominations were submitted to the Governance Committee by any shareholder for the 2021 Annual Meeting. Any shareholder interested in presenting a nomination for consideration by the Governance Committee prior to the 2022 Annual Meeting should do so as early as possible, to provide adequate time to consider the nominee and comply with our Bylaws.

In 2020, each independent director of C.H. Robinson was eligible to receive an annual retainer of $100,000. The Board of Directors approved a 50% reduction in base annual retainer payments from May 1, 2020 through July 31, 2020; these reductions were realized between April 1, 2020 through June 30, 2020. These changes were enacted as part of cost savings measures in response to the COVID-19 pandemic. Directors do not receive additional compensation for each meeting they attend. The Audit Committee chair received an additional annual retainer of $30,000, and the chairs of the Governance and Compensation Committees each received an additional annual retainer of $20,000. Other members of the Audit Committee received an additional annual retainer of $12,500, and other members of the Governance and

Directors are required to own a minimum of five times their annual Board retainer in company stock no later than five years after joining the Board of Directors. We base the stock ownership requirements on all shares of company stock deemed owned by a director, which includes vested stock options, vested and unvested restricted stock units, and stock beneficially owned by the director, including owned in a trust, by a spouse, or by dependent children for our directors. All directors are in compliance with the company stock ownership requirements.

The members of the Compensation Committee are Kermit R. Crawford, Wayne M. Fortun, Timothy C. Gokey, Mary J. Steele Guilfoile, Jodee A. Kozlak (Chair), James B. Stake, and Paula C. Tolliver. The Compensation Committee members have no interlocking relationships requiring disclosure and are deemed independent under the rules of the Securities and Exchange Commission.

We believe our compensation philosophy and design are well aligned with the interests of our shareholders, as well as our performance culture, growth strategy, and desire to attract and retain high-quality executives.

The company reviews general industry survey data provided by an independent compensation consultant to assess market competitiveness of the components of NEO compensation, including appropriate mix of cash and equity. The company also relies on broader survey data to assess market competitiveness of executive compensation components.

Our compensation components are as follows:

The Compensation Committee also considers the results of the shareholders’ advisory vote on the compensation of NEOs. At our 2020 and 2019 Annual Meetings, our say-on-pay proposals received “for” votes that represented approximately 93 percent and 90 percent, respectively, of the shares voted on the proposals. The Compensation Committee considered the results of these say-on-pay votes and other shareholder feedback when evaluating our compensation practices and policies in 2020, and when setting the compensation of our NEOs for 2020. The Compensation Committee believes that our say-on-pay proposal results demonstrate shareholders’ support of our compensation practices.

Performance based compensation and alignment of individual, company, and shareholder goals are integral components of C.H. Robinson’s culture and management approach. Performance based compensation makes up a significant portion of our employees’ total compensation package. In addition, approximately 16 percent of our total employees hold equity they received through our current equity incentive plan.

Compensation decisions regarding individual executive officers are based on several factors, including individual performance, level of responsibility, unique skills of the executive, tenure, demands and complexity of the position, and critical nature of the role.

Our compensation framework and pay-for-performance practices provide appropriate incentives to our executive officers to achieve our financial goals and align our executives with our shareholders’ interests.

Annual base salary is designed to compensate our executive officers as part of a total compensation package necessary to attract, retain, and motivate high quality executives. Our 2020 base salaries generally reflect the 25th to 50th percentile of our defined market for talent. Base salary payments were reduced by 50% for the chief executive officer and 20% for the other named executive officers for the period from May 1, 2020 through July 31, 2020. These changes were enacted as part of our cost savings initiatives related to the COVID-19 pandemic.

Base salaries are reviewed annually and are adjusted to reflect a NEO's responsibilities, performance, leadership potential, succession planning, and relevant market data. A market salary adjustment was made for Mr. Pinkerton to move his salary closer to market median for his role.

The Compensation Committee approves an individualized incentive compensation plan for each NEO in the first quarter of the calendar year. NEO annual incentive compensation amounts are set as a percentage of their base salary, to reflect the executive’s responsibilities, performance, and contribution to overall company goals. The measure used to determine the financial component of annual incentive compensation is APTI.

Each year, the Compensation Committee establishes target APTI growth for the enterprise and the divisions at levels that are consistent with the company’s long-term expected results. Given the transactional nature of a significant portion of our business and our fluctuating adjusted gross profit margins due to market conditions, historically the company has found it difficult to forecast short-term performance. As such, we believe it is important to align targets more closely with our long-term growth goals, with some consideration given to shorter-term market trends and divisional business plans. Our annual targets should not vary significantly year to year, except under unusual circumstances.

For performance between threshold and target or target and maximum, the achievement percentage is determined by linear interpolation. The performance range for the financial metrics of the annual incentive compensation for NEOs ranges from 70 percent of target at threshold and 120 percent of target at maximum. The performance range for the MBO metric of the annual incentive plan for NEOs is 90 percent to 110 percent of target. The NEO annual incentive compensation plan is capped at two times the target opportunity.

In 2020, the Compensation Committee established these APTI targets based on the expectation that our stated long-term growth objective is to grow earnings per share by at least 10 percent annually. As noted below, the Compensation Committee aligned our shorter term targets more closely with anticipated outcomes that will drive our longer term goals. The Compensation Committee certified the following actual performance levels and percentage of target payout for each of the NEOs.

Incentive compensation plans are reviewed annually.

We use equity compensation as our primary tool for aligning our executives with long-term shareholder interests, rewarding them for the achievement of overall company performance, and retaining them at C.H. Robinson. Equity compensation represents approximately 63 percent of our CEO's total target compensation and approximately 51 percent of target compensation for other NEOs. Equity compensation for our executive officers is performance based and highly variable based on growth in company earnings and stock price appreciation. We believe equity compensation is an integral component of meeting our compensation goals as outlined in our compensation philosophy. Our shareholder-approved equity incentive plan is designed to give us flexibility to achieve these objectives. It allows us to grant performance based restricted shares and stock units; time based stock options, restricted shares, and stock units; and other types of equity compensation. Executive officers, other employees, and directors may receive equity compensation.

Equity awards made to our NEOs are generally granted in the form of performance based restricted shares and time based stock options, weighted equally by fair value. Both the performance based restricted shares and time based stock option awards vest over five calendar years. Given the large percentage of their total compensation that is equity, the performance vesting formula that is based on growth in company profitability, and the long-term nature of the vesting and delivery, we believe these awards are an effective tool for creating long-term ownership, aligning our executives’ interests

with those of our shareholders, and linking executive officer compensation to our long-term company growth strategy. We continue to monitor market trends and plan enhancements related to our equity award design.

For our performance based restricted share awards, vesting may occur each year for up to five calendar years, based on company performance over that period of time. Any performance based restricted shares that are unvested at the end of the five years are forfeited back to the company. Performance vesting is constructed in a manner as to vest 0 to 100 percent of the award based on the change in diluted earnings per share from the prior year’s achievement, over the five-year vesting period of the award. Additionally, an award may vest zero when there is not year-over-year diluted earnings per share growth, as was experienced by participants in 2019 and 2020.

The annual vesting percentage for performance based restricted share awards is equal to the year-over-year percentage increase (or decrease) in diluted earnings per share, plus ten percentage points.

For all performance based restricted share awards made to NEOs in 2015 through 2020, we have a post-vest holding period whereby the standard delivery of all vested shares occurs on the earlier of two years after termination of employment or two years following the end of the five-year vesting period. We believe a delayed delivery after vesting or termination strengthens our employment agreements and aligns with shareholders’ interests.

The fair value of each performance based restricted share award is established on the date of grant. For grants of performance based restricted shares and stock units, the fair value is established based on the market price of our common stock on the date of the grant, discounted for post-vesting holding restrictions.

Performance based restricted share annual vesting percentage information is set forth in the following table:

Stock option awards vest ratably over five years. For grants of time based stock options, the fair value is established using the Black-Scholes option pricing model. Incentive stock option annual vesting percentage information is set forth in the following table:

We do not have a separate severance pay plan for NEOs.

Post-employment vesting of both performance based restricted share and time based stock option grants (for reasons other than death, disability, and change in control) is tied to non-compete agreements and provides protections to the company and our relationships with our employees, customers, and service providers. For both types of equity grants, the following post-employment vesting is available, based on age and tenure with the company following a minimum of five years of service:

Our NEOs are eligible to participate in all the same benefit programs as other C.H. Robinson employees. These include:

We believe that saving for retirement is important for our employees. C.H. Robinson maintains a 401(k) retirement plan that meets the requirements of an ERISA qualified plan and the Internal Revenue Code. Our U.S. employees are eligible to contribute up to 75 percent of their cash compensation to the 401(k) plan, subject to Internal Revenue Service limitations. To support our compensation objectives, in 2020, the company matched 100 percent of the first 6 percent of eligible compensation that employees contributed to the plan during the year. However, C.H. Robinson suspended the match on the 401(k) plan from May 22, 2020, through the end of the year, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. The match was reinstated on January 1, 2021.

Because we believe in aligning employee interests with our shareholders and our long-term company performance, C.H. Robinson maintains an employee stock purchase plan (ESPP) that meets the requirements of the Internal Revenue Code.

To support our goal to provide competitive compensation and benefits, the company sponsors several health and welfare benefit plans for our employees: health, dental, vision, flexible medical and dependent care spending, short-term disability and long-term disability, life insurance, and holiday and other paid time off.

The Compensation Committee Report on executive compensation is found on page 39 of this Proxy Statement.

At every February Compensation Committee meeting, our chief executive officer presents to the Compensation Committee his recommendations on base salary compensation for the company’s executive leaders, including each of the NEOs. The chief executive officer does not make a recommendation on his own compensation. The Compensation Committee determines the chief executive officer’s compensation, as well as approves the compensation for the other NEOs.

Additionally, at this same meeting, after the financial results of the previous year have been finalized, our chief executive officer presents to the Compensation Committee his recommendation on annual cash incentive compensation plans for the company’s executive leaders, including each of the NEOs. During this meeting, the Compensation Committee certifies the APTI results and corresponding incentive compensation for the executive officers for the prior year and approves recommended annual cash incentive targets for the current year.

In 2020, our NEOs were awarded performance shares and time-based stock options. Our chief executive officer presents equity recommendations to the Compensation Committee for our executive officers, excluding himself. The Compensation Committee determines the chief executive officer’s equity compensation award. The Compensation Committee approves the awards for each of the executive officers and approves the equity grants to all other recipients through the Non-Executive Stock Award Committee. The grant date of awards for all employees, including the NEOs, is the date of Compensation Committee approval.

The Compensation Committee annually conducts an evaluation of the chief executive officer’s performance. Based on this evaluation, the Compensation Committee determines base salary, annual cash incentive compensation, and equity compensation of the chief executive officer.

Mr. Biesterfeld started 2020 at a base salary of $975,000 and on March 1, 2020, as part of our annual compensation review cycle, moved to a base salary of $1,025,000. He earned annual cash incentive compensation of $467,577 for 2020 paid on February 26, 2021. Mr. Biesterfeld's annual cash incentive compensation plan awarded compensation for the company's achievement of APTI in certain ranges. In February 2020 as part of our annual grant cycle, Mr. Biesterfeld received 34,611 performance based restricted shares and 161,820 time based stock options. Both of these equity awards began vesting in 2020.

Total 2020 Realized Annual Compensation: The following table illustrates Mr. Biesterfeld’s total realized compensation in 2020 of $2,578,411, an increase of 21 percent from 2019. Mr. Biesterfeld was appointed CEO in May 2019 and his 2020 compensation is reflective of this change in role. For the period from May 1, 2020 through July 31, 2020, Mr. Biesterfeld's base salary payments were reduced by 50%, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. Our business results in 2020 led to a decline in enterprise APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares.

Total 2020 Realized Annual Compensation: The following table illustrates Mr. O’Brien’s total realized compensation in 2020 of $1,067,819, an increase of 13 percent from 2019. For the period from May 1, 2020 through July 31, 2020, Mr. O'Brien's base salary payments were reduced by 20%, which was enacted as part of our cost savings initiatives related to the COVID-19 pandemic. Our business results in 2020 led to a decline in enterprise APTI, resulting in low annual cash incentive compensation as well as no performance vesting for our performance based restricted shares.

Section 162(m) of the Internal Revenue Code precludes us from taking a federal income tax deduction for compensation paid in excess of $1 million to our “covered employees”. Our covered employees include all employees who have been a covered employee in any year since 2017. As of 2018, a covered employee includes any employee who has been the chief executive officer, the chief financial officer, or one of our three other most highly compensated executive officers in a year. Prior to 2018, this deduction limitation did not apply to qualified “performance-based” compensation and a company’s chief financial officer was not considered to be a covered employee. Consequently, compensation paid in 2018 and later years to covered employees in excess of $1 million will not be deductible unless it qualifies for transitional relief

applicable to certain binding, written performance-based compensation arrangements that were in place as of November 2, 2017.

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Robert C. Biesterfeld Jr., our chief executive officer (the “CEO”).

For 2020, our last completed fiscal year:

Based on this information, for 2020, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 101:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K.

For purposes of determining the base salary plus overtime actually paid, we included: the amount of base salary the employee received during the year, and the amount of overtime the employee received during the year. We included adjustments for annualizing the pay for any employees who were employed by us for only part of the year, which included those that were on furlough.

Our Audit Committee, pursuant to the company’s written policy and procedures regarding transactions with related parties, is responsible for reviewing, approving, and/or ratifying any transaction involving the company with related persons. As defined in the policy, (i) a “related person” includes all directors and executive officers of the company, any nominee for director, and any immediate family members of any of the foregoing persons, as well as shareholders who beneficially own greater than five percent of the company’s Common Stock and their immediate family members; and (ii) a “transaction” includes but is not limited to any financial transaction, arrangement, or relationship. A transaction does not include any compensation arrangement with an executive officer or director of the company that has been approved or authorized by the Compensation Committee. In determining whether to approve or ratify a related party transaction, the Audit Committee will consider, among other things, the business purpose and terms of the transaction, the process used to evaluate the transaction, and the significance of the interests and amounts involved in the transaction.

One of our directors, Brian P. Short, is the president, chief executive officer and, with a number of his family members, holds a controlling interest in AMMF, a privately held trucking and transportation services company. In 2020, C.H. Robinson engaged AMMF in the ordinary course of business as a contracted motor carrier to haul approximately 406 truckloads. The company paid approximately $865,000 to AMMF for these services, which represented just over one percent of AMMF’s revenues for 2020. Management reported to the Audit Committee that the prices paid for the transportation services provided by AMMF were negotiated by nine separate offices and were consistent with similar loads carried by other third-party vendors using comparable equipment. The transaction with Mr. Short was approved by the Audit Committee in accordance with the policy described above.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the company’s executive officers and directors and persons who beneficially own more than ten percent of the company’s Common Stock to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. Such executive officers, directors, and greater than ten percent beneficial owners are required by the regulations of the Securities and Exchange Commission to furnish the company with copies of all Section 16(a) reports they file.

Based solely on a review of the copies of such reports furnished to the company and written representations from the executive officers and directors, the company determined that with regard to all Section 16(a) filing requirements applicable to our executive officers and directors and greater than 10 percent beneficial owners, the following single report required to be filed under Section 16(a) was filed delinquently:

The Audit Committee operates under a written charter adopted by the Board of Directors. A copy of the charter can be found on the Investor Relations page of the C.H. Robinson website at www.chrobinson.com. The Audit Committee of the company’s Board of Directors is comprised of the following independent directors: Scott P. Anderson, Timothy C. Gokey, Brian P. Short, James B. Stake (Chair), and Paula C. Tolliver. The Board of Directors has reviewed the status of each of the members of its Audit Committee and has confirmed that each meets the independence requirements of the current Nasdaq listing standards that apply to Audit Committee members, and that Messrs. Anderson, Gokey, Short, and Stake, and Ms. Tolliver each qualifies as an “Audit Committee Financial Expert,” as defined by the Securities and Exchange Commission.

Management is responsible for the company’s internal controls and the financial reporting process. C.H. Robinson’s independent registered public accounting firm is responsible for performing an independent audit of our financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to hire, monitor, and oversee the independent auditors.

In this context, the Audit Committee has met and held discussions with management and Deloitte & Touche LLP, the company’s independent accountant for the fiscal year ended December 31, 2020. Management represented to the Audit Committee that the company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountant. The Audit Committee discussed with the independent accountant matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission.

Our independent accountant also provided to the Audit Committee the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding our independent accountant communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent accountant the independent accountant’s independence. The Audit Committee also considered whether the provision of any non-audit services was compatible with maintaining the independence of Deloitte & Touche LLP as the company’s independent auditor.

Based upon the Audit Committee’s discussions with management and the independent accountant, the Audit Committee’s review of the representation of management, and the report of the independent accountant to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

The Audit Committee has selected Deloitte & Touche LLP as the independent registered public accountant firm for C.H. Robinson for the fiscal year ending December 31, 2021. Representatives of Deloitte & Touche LLP will be present at our Annual Meeting, will have an opportunity to make a statement if they desire to do so, and will be available to answer shareholder questions. If the appointment of Deloitte & Touche LLP is not ratified by the shareholders, the Audit Committee is not obligated to appoint other accountants, but the Audit Committee will give consideration to such unfavorable vote.

The following table summarizes the total fees for audit services provided by the independent auditor for the audit of our annual consolidated financial statements for the years ended December 31, 2020, and December 31, 2019. The table also includes fees billed for audit related, tax, and other services provided by the independent auditor during the same periods.

In considering the nature of the services provided by the independent auditor, the Audit Committee determined that such services are compatible with the provision of independent audit services. The Audit Committee discussed these services with the independent auditor and our management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by the Securities and Exchange Commission to implement the Sarbanes-Oxley Act of 2002, as well as the American Institute of Certified Public Accountants. All services provided by the independent auditor during 2020 and 2019 were pre-approved, following the policies and procedures of the Audit Committee.

All the professional services were approved or pre-approved in accordance with policies of the Audit Committee and the company. These policies describe the permitted audit, audit-related, tax, and other services (collectively, the “Disclosure Categories”) that the independent auditor may perform. The policy requires that before work begins, a description of the services (the “Service List”) expected to be performed by the independent auditor, in each of the Disclosure Categories, be presented to the Audit Committee for approval.

Any requests for audit, audit-related, tax, and other services not included on the Service List must be submitted to the Audit Committee for specific pre-approval and cannot begin until approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings. However, the authority to grant specific pre-approval between meetings, as necessary, has been delegated to the chairman of the Audit Committee. The chairman must update the Audit Committee at the next regularly scheduled meeting of any services that were granted specific pre-approval.

In addition, although not required by the rules and regulations of the Securities and Exchange Commission, the Audit Committee generally requests a range of fees associated with each proposed service on the Service List and any services that were not originally included on the Service List. Providing a range of fees for a service incorporates appropriate oversight and control of the independent auditor relationship, while permitting the company to receive immediate assistance from the independent auditor when time is of the essence.

The Audit Committee reviews the status of services and fees incurred year-to-date against the original Service List and the forecast of remaining services and fees.