UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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DUCOMMUN INCORPORATED

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Message to our Shareholders

Stephen G. Oswald

Chairman, President and
Chief Executive Officer

Dear Fellow Shareholders:

It is my pleasure to invite you to the 2022 Ducommun Incorporated Annual Meeting of Shareholders.

Once again, out of concern for the safety of our shareholders, employees and directors due to the ongoing uncertainty relating to the COVID-19 pandemic, and to permit shareholders from any location with access to the internet to participate, we are holding our annual shareholder meeting virtually. The annual meeting will be held on Wednesday, April 20, 2022 at 9:00 a.m., Pacific Time and you will be able to attend the annual meeting online, vote your shares electronically, and submit your questions by visiting www.virtualshareholdermeeting.com/DCO2022 and entering your control number. You will not be able to attend the annual meeting in person. The attached Notice of Annual Meeting of Shareholders and Proxy Statement discuss the items scheduled for a vote by shareholders at the meeting.

The Securities and Exchange Commission rules allow companies to furnish proxy materials to their shareholders over the Internet. As a result, most of our shareholders will receive in the mail a notice regarding availability of the proxy materials for the annual meeting on the Internet instead of paper copies of those materials. The notice contains instructions on how to access the proxy materials over the Internet and instructions on how shareholders can receive paper copies of the proxy materials, including a proxy or voting instruction form. This process expedites shareholders’ receipt of proxy materials and lowers the cost of our annual meeting. The Board of Directors has fixed the close of business on February 22, 2022, as the record date for the determination of shareholders entitled to receive notice of and to vote at the Annual Meeting.

In August 2020, I publically committed to a “Return to Growth” for Ducommun in 2021 and I am proud to have delivered on that promise. Our shareholders in 2021 were the beneficiaries of year-over-year improvements in earnings, revenue, operating income and backlog, as well as an all-time high earnings per share. These results were made possible by having the right footprint, cost structure, sales, general and administrative (“SG&A”) expense that was among the industry leaders, especially at the corporate level, and strong operational leadership and experience. I also want to thank our shareholders for sticking with us in 2021 and supporting the company, my team and our board as we gave our best efforts in overcoming the many challenges and crises over the past two years.

Finally, it is important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend, please sign, date and return the enclosed proxy card or vote by telephone or using the internet as instructed on the enclosed proxy card. Please vote your shares as soon as possible. This is your annual meeting, and your participation is important.

Sincerely,

200 Sandpointe Avenue, Suite 700
Santa Ana, California 92707-5759
(657) 335-3665

REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
Please refer to the enclosed proxy materials or the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you.		BY INTERNET Go to www.proxyvote.com and follow the instructions		BY TELEPHONE Call 1-800-690-4903 prior to 11:59 pm on April 19, 2022		BY MAIL Sign the enclosed proxy card and mail it promptly in the enclosed postage-prepaid envelope		AT THE MEETING See page 73 for more information.

TABLE OF CONTENTS

Proxy Summary

This proxy summary highlights information generally contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and we encourage you to read the entire Proxy Statement before voting your shares. For additional and more complete information regarding our 2021 performance, please review Ducommun’s Annual Report on Form 10-K for the year ended December 31, 2021.

2022 Annual Meeting of Shareholders

Date and Time:	Place:	Record Date:
Wednesday, April 20, 2022, at 9:00 a.m. Pacific Time	Online via live audio webcast at www.virtualshareholdermeeting.com/DCO2022	February 22, 2022

Admission: To participate in the Annual Meeting online, including to vote during the Annual Meeting, stockholders will need the 16-digit control number included on their proxy card, the Notice or voting instruction form, or contact their bank, broker or other nominee (preferably at least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote at the Annual Meeting.

Meeting Agenda and Voting Matters

2021 Return to Growth Performance Achievements

The year ended December 31, 2021 marked a “Return to Growth” for Ducommun. We effectively leveraged many of our successes from the prior year, including a historically high backlog in our defense business, and experienced a modest level of recovery from some of our original equipment manufacturer customers in Commercial Aerospace. In addition, having the right footprint, cost structure, general and administrative (“SG&A”) expenses among industry leaders, especially at the corporate level, operational leadership and experience, Ducommun met its commitment to “Return to Growth” in 2021 made by our Chief Executive Officer (“CEO”), Stephen G. Oswald, publicly in August 2020. The critical metrics such as earnings, revenue, operating income and backlog, as well as achieving all-time high earnings per share are summarized in the tables and graphs below:

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Total Shareholder Return vs. Proxy Peers, Russell 2000 and Selected Indices

Comparison of 3 Year* Cumulative Total Return
Ducommun Inc. vs. Median of Peers** and Russell 2000, NYSE and Dow Jones Indices***
Assumes Initial Investment of $100
December 2018

Our relative total shareholder return (“TSR”) compared to the Russell 2000 Index over the 3-year period between 2019 and 2021 was in the 46^th percentile, ranking 938^th out of 2000 companies.⁽¹⁾

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Information About the Board of Directors

Ducommun is very proud that all three directors appointed to our Board of Directors (the “Board”) since 2018 are female. The tenure of our directors, as well as our Board’s diversity and independence are summarized in the graphs below.

Directors’ Tenure   Director Diversity & Independence (%)

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Corporate Governance Highlights

Executive Compensation Highlights

Our executive compensation program is oriented towards a pay-for-performance approach. In 2021, performance-based compensation represented a significant percentage of the total target compensation for each of the named executive officers.

2021 Pay Mix^*

CEO Compensation Mix   NEO Compensation Mix

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Environmental and Safety Highlights

Over the four-year period between January 1, 2018, and December 31, 2021, Ducommun’s lost time incident rate⁽²⁾ decreased by 56% and the total recordable incident rate⁽³⁾ decreased by 68%:

Lost Time Incident Rate   Total Recordable Incident Rate

Between 2018 and 2021, there was a 28% decrease in combined Scope 1 and 2 greenhouse gas emissions, and a 17% reduction in Ducommun’s total energy usage:

Scope 1 and 2: Greenhouse Gas Emissions (tons CO₂)   Total Energy Use (GigaJoules)

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Important Note Regarding Forward-Looking Statements

This Proxy Statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current facts, including statements regarding our environmental and other sustainability plans and goals, made in this Proxy Statement are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our 2021 Annual Report on Form 10-K. Website references throughout this Proxy Statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.

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Proposal 1
Election of Directors

Our Board is divided into three classes, with one class elected at each annual meeting of shareholders. Directors of each class are elected to serve for three-year terms. The Board has currently fixed the size of the Board at eight directors.

Our Certificate of Incorporation provides that when the Board consists of eight directors, only two members can be eligible to stand for election as Class 2025 Directors. In light of that limitation and other factors, on March 7, 2022, our Board, upon the recommendation of our Corporate Governance and Nominating Committee, reconstituted Ducommun’s Class of 2022 and Class of 2024 Directors. In connection therewith, on March 7, 2022, Mr. Jay Haberland, a member of Ducommun’s Class of 2022 Directors agreed to resign from such class subject to his election as a Class of 2024 Director. On March 7, 2022, our Board, upon the recommendation of our Corporate Governance and Nominating Committee, appointed Mr. Haberland to the class of 2024 Directors, and nominated the two remaining members of the class of 2022 Directors, Messrs. Robert. C. Ducommun and Dean M. Flatt, for election for a three-year term ending at the Annual Meeting of Shareholders in 2025 and until their respective successors have been duly elected and qualified, subject to their earlier death, resignation, or removal. Accordingly, at the Annual Meeting, shareholders will be asked to elect each of Messrs. Ducommun and Flatt as Class of 2025 Directors. As discussed in Proposal 2: Ratification of Elected Director, we will also be asking our shareholders to ratify the election of Mr. Haberland as a Class of 2024 Director.

In the absence of a contrary direction, proxies will be voted for the election of Messrs. Ducommun and Flatt. If either nominee becomes unable or unwilling to serve as a director at the time of the Annual Meeting, the individuals named as proxies may vote for a substitute nominee chosen by the present Board to fill the vacancy. Alternatively, the Board may reduce its size. We have no reason to believe that Messrs. Ducommun or Flatt will be unwilling or unable to serve for the stated terms if elected as directors. In the event that anyone other than Ducommun’s two nominees is nominated for election as a director, the proxy holders are not required to vote for all of the nominees and in their discretion may cumulate votes.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF MESSRS. DUCOMMUN AND FLATT AS CLASS OF 2025 DIRECTORS.

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Proposal 2
Ratification of Elected Director

In March 2022, upon the recommendation of our Corporate Governance and Nominating Committee, our Board reconstituted the Board’s classes, appointing Mr. Haberland to the Class of 2024 Directors. The Board is authorized to take such action without shareholder consent or ratification under Ducommun’s Certificate of Incorporation and Bylaws. However, we are requesting ratification because we believe it is a matter of good corporate practice. Accordingly, our Board is asking shareholders to ratify the election of Mr. Haberland as a Class of 2024 Director, to serve for a two year-term lasting until the Annual Meeting of Shareholders in 2024 and until his successor has been duly elected and qualified, subject to his earlier death, resignation, or removal. In the absence of a contrary direction, proxies will be voted to ratify the election of Mr. Haberland as a Class of 2024 Director. If Ducommun’s shareholders do not ratify the election of Mr. Haberland as a class 2024 Director, Mr. Haberland will continue to serve as a class of 2024 Director, but the Board will consider this factor, among others, in determining whether to renominate Mr. Haberland as a Director at Ducommun’s 2024 Annual Meeting of Shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE ELECTION OF MR.  HABERLAND AS A CLASS OF 2024 DIRECTOR.

Corporate Governance

Directors’ Skills and Diversity

The Board of Directors believes that the Board, as a whole, should possess the combination of skills, professional experience, and diversity of backgrounds necessary to oversee our management and support the interests of our shareholders. In addition, the Board has outlined in our Corporate Governance Guidelines certain attributes it believes every director should possess. Accordingly, the Board and its Corporate Governance and Nominating Committee consider the qualifications of directors and director candidates both individually and in the broader context of the Board’s overall composition and our current and future needs.

The Corporate Governance and Nominating Committee is responsible for developing and recommending director membership criteria to the Board for approval. The current criteria include independent and sound judgment, integrity, the ability to commit sufficient time and attention to Board activities, and the absence of potential conflicts with our interests. In addition, the Corporate Governance and Nominating Committee periodically evaluates the composition of the Board to assess the skills, experience, and perspectives that are currently represented and to determine which skills, experience, and perspectives will be valuable in the future given our current state and strategic direction. As part of this periodic assessment, the Corporate Governance and Nominating Committee also evaluates the effectiveness of the overall Board dynamic, including the effectiveness of our initiatives related to board diversity.

While we do not have a formal policy on board diversity, Ducommun’s Corporate Governance Guidelines reflect the Board’s belief that a blend of different perspectives contributes to the quality of the Board’s oversight, and is an essential component of effective governance. We therefore are committed to the perspective that Board diversity is not reflected solely in the variety of our directors’ professional backgrounds and experiences. Rather, we believe that the quality of our deliberations and decisions, and of our overall governance, is enhanced by the perspectives represented by directors with different personal characteristics, particularly, gender, race, cultural heritage and age. As a result, the Corporate Governance and Nominating Committee has been deliberate in striving to achieve a broad range of diversity in the pools from which qualified director candidates are selected, as it has worked over the last three years to identify successors to a group of very capable directors. With the assistance of Spencer Stuart, an independent executive search firm, the Corporate Governance and Nominating Committee successfully identified and engaged Ms. Drazba, and over the last nine months Mmes. Kramer and Strycker, each from competitive pools of candidates, and recommended to the Board that they each be appointed as directors.

The Corporate Governance and Nominating Committee supports the Board’s commitment to engaging a diverse field of director candidates. As Board seats become available, the Corporate Governance and Nominating Committee will continue to actively identify qualified women and individuals from underrepresented communities to include in the pool from which Board nominees are chosen. The Corporate Governance and Nominating Committee is confident that this commitment will contribute to better representation and higher visibility for individuals with diverse perspectives and personal characteristics.

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In evaluating director candidates, and considering incumbent directors for re-nomination to the Board, the Corporate Governance and Nominating Committee has reviewed a variety of factors, including each nominee’s independence, financial literacy, personal and professional accomplishments, and experience. Below is a matrix of the skills represented on our Board.

	Oswald	Baldridge	Drazba	Ducommun	Flatt	Haberland	Kramer	Strycker
Senior Leadership Significant experience leading organizations, developing business strategies and talent
Global/International Global business and international experience necessary for expanding the footprint of the organization
Financial Expertise with complex financial transactions and optimizing capital structures
Aerospace & Defense Industry Industry experience that provides insight on issues unique to the A&D industry
Manufacturing Experience managing the operations of a complex A&D business
Technology Experience identifying technological advances that may affect our business
Strategy, Business Development and M&A Experience with identifying M&A targets that will advance strategic objectives
Product Marketing / Innovation Experience in new product development and growing market share
Cybersecurity / Information Security Experience with successfully implementing and overseeing measures to prevent data breaches
Human Capital Expertise in compensation design and managing human capital issues
Public Company Board Understanding of the extensive and complex oversight responsibilities of public company boards to protect the interests of shareholders based on experience serving on other public company boards

The following information is furnished as of March 9, 2022, with respect to each person who is a nominee for election and/or nominee for ratification to the Board, as well as our other five directors whose terms of office will continue after the Annual Meeting.

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Directors’ Backgrounds and Qualifications

Nominees For Election

	ROBERT C. DUCOMMUN Business Advisor   Age: 70     Director Since: 1985   Term Expires: 2022   Committees: •   Audit and Corporate Governance & Nominating (Chair)		Professional background Mr. Ducommun has been an independent business advisor for over 30 years. He was previously the Chief Financial Officer for several private companies and a management consultant with McKinsey & Company.   Key qualifications As a former management consultant and Chief Financial Officer, Mr. Ducommun brings to the Board substantial financial acumen and leadership in setting the strategic direction for the Company, and also provides guidance on various environmental, social and governance (“ESG”) initiatives.
	DEAN M. FLATT LEAD DIRECTOR President, Defense & Space, Honeywell International, Inc. (Ret.)   Age: 71   Director Since: 2009   Term Expires: 2022   Committees: •   Corporate Governance & Nominating and Compensation (Chair)		Professional background Mr. Flatt is the retired President, Defense & Space of Honeywell International, Inc., a position he occupied for three years until his retirement in 2008. Mr. Flatt was previously President, Aerospace Electronic Systems and President, Performance Materials of Honeywell.   Key qualifications As the former President of several divisions of one of the world’s largest avionics manufacturers, Mr. Flatt contributes to the Board diverse operational experience and understanding of technologies relevant to the Company’s business.   Other public company directorships Curtiss-Wright Company (since 2012)

Nominee For Election Ratification

	JAY L. HABERLAND Vice President, United Technologies Corporation (Ret.)   Age: 71     Director Since: 2009   Term Expires: 2024   Committees: •   Compensation and Audit (Chair)		Professional background Mr. Haberland has served on the board, and chaired the audit committee, of National Technical Systems, a portfolio company of Aurora Capital since November 2013. Mr. Haberland is also the retired Vice President, Business Controls of United Technologies Corporation, a position he held from 2003 until 2008. Mr. Haberland was previously the Chief Financial Officer of Sikorsky Aircraft Company, a subsidiary of United Technologies Corporation (“UTC”), and Vice President, Chief Financial Officer, Controller and Chief Accounting Officer of UTC.   Key qualifications As the former Chief Financial Officer of one of the world’s largest helicopter manufacturers, the former Chief Accounting Officer of a world-wide diversified manufacturer, and as a certified public accountant, Mr. Haberland provides the Board with significant expertise in financial and accounting matters, as well as substantial international experience.   Other public company directorships Wesco Aircraft Holdings, Inc. (between October 2011 and January 2020)

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Continuing Directors

	STEPHEN G. OSWALD Chairman, President and Chief Executive Officer   Age: 58   Director Since: 2017   Term Expires: 2023   Committee: •   Innovation		Professional background Mr. Oswald has been the President and Chief Executive Officer of Ducommun since January 2017, and Chairman of the Board since May 2018. From 2012 to 2015, Mr. Oswald was Chief Executive Officer of Capital Safety Company, a manufacturer of fall protection, confined space, and rescue equipment. He elected to take time off from his career after the sale of Capital Safety Company to 3M Co. to manage personal investments. Before joining Capital Safety Company, Mr. Oswald spent approximately 15 years in various leadership roles at United Technologies Corporation, including as President of the Hamilton Sundstrand Industrial division.   Key qualifications As Chairman, President and Chief Executive Officer, Mr. Oswald provides management’s perspective in board discussions about Ducommun’s business and strategic direction.
	RICHARD A. BALDRIDGE President and Chief Executive Officer, Viasat, Inc.   Age: 63   Director Since: 2013   Term Expires: 2023   Committees: •   Audit and Innovation		Professional background Mr. Baldridge is President and Chief Executive Officer of Viasat, Inc., a global communications company. Mr. Baldridge joined Viasat in 1999 as Vice President and Chief Financial Officer, added the positions of Executive Vice President and Chief Operating Officer in 2000, was appointed President in 2003, and was named Chief Executive Officer in November 2020. Before joining Viasat, Mr. Baldridge was Vice President and General Manager of Raytheon Corporation’s Training Systems Division, and he held executive roles with Hughes Information Systems and Hughes Training Inc. before they were acquired by Raytheon in 1997. Mr. Baldridge is also a director of EvoNexus, a non-profit business incubator.   Key qualifications As the President and Chief Executive Officer of a leading provider of satellite communications systems and services and secure networking systems, Mr. Baldridge contributes to the Board broad operational and financial experience and an understanding of the defense markets that Ducommun serves.   Other public company directorships Viasat (since 2016)
	SHIRLEY G. DRAZBA Corporate Vice President, Product Line Strategy & Innovation, IDEX Corporation (Ret.)   Age: 64   Director Since: 2018   Term Expires: 2024   Committees: •   Compensation and Innovation (Chair)		Professional background Ms. Drazba served as Corporate Vice President, Product Line Strategy & Innovation for IDEX Corporation, which designs, manufactures and markets a range of pump products, dispensing equipment, and other engineered products, both domestically and abroad, from 2014 until her retirement in 2017. Before that, Ms. Drazba spent almost 20 years at Honeywell International, Inc., a manufacturer of aerospace products and services, control technologies, automotive products, turbochargers and specialty materials, in increasingly important technical and engineering leadership positions.   Key qualifications As a long-time executive responsible for product strategy, innovation, and commercial excellence, Ms. Drazba contributes to the Board extensive experience in creating high value opportunities for Ducommun’s product lines, as well as experience in market positioning and leading strategic acquisitions to enhance product portfolios.

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	SHEILA G. KRAMER Vice President, Chief Human Resources Officer, Donaldson Company, Inc.   Age: 62   Director Since: 2021   Term Expires: 2024   Committee: •   Corporate Governance & Nominating		Professional background Ms. Kramer has been the Vice President, Chief Human Resources Officer of Donaldson Company, Inc., a provider of engine and industrial filtration solutions, since January 2020. Ms. Kramer joined Donaldson Company, Inc. in October 2015 as its Vice President, Human Resources. From 2013 to 2015, Ms. Kramer was Vice President, Human Resources of Taylor Corporation, a premier provider of interactive printing and marketing solutions to more than half of Fortune 500 companies. Before joining Taylor Corporation, Ms. Kramer spent approximately 22 years in various leadership roles at Lifetouch, Inc. one of the world’s largest employee-owned photography companies.   Key qualifications As the current Vice President and Chief Human Resources Officer of Donaldson Company, Inc., Ms. Kramer contributes to the Board extensive senior leadership experience as well as direction on human capital issues pertinent to Ducommun’s ESG program.
	SAMARA A. STRYCKER Senior Vice President, Controller and Treasurer, Navistar International Corporation   Age: 50   Director Since: 2021   Term Expires: 2023   Committee: •   Audit		Professional background Ms. Strycker has been the Senior Vice President, Controller and Treasurer of Navistar International Corporation, a leading manufacturer and solutions provider for commercial trucks and engines, since January 2022. Previously, Ms. Strycker was the Senior Vice President and Corporate Controller of Navistar International Corporation between August 2014 and January 2022. Between 2008 and 2014, Ms. Strycker served in various controllership roles at General Electric’s Healthcare Division. Before joining General Electric, Ms. Strycker spent approximately 15 years as an auditor with PricewaterhouseCoopers LLP.   Key qualifications As Senior Vice President, Controller and Treasurer of Navistar International Corporation, Ms. Strycker contributes to the Board extensive senior leadership experience and financial expertise.

Director Independence

Our Corporate Governance Guidelines provide that a majority—and preferably at least two-thirds—of the Board must be independent. The Board has determined that each of Mmes. Drazba, Kramer and Strycker, as well as Messrs. Baldridge, Ducommun, Flatt, and Haberland, qualify as independent directors as defined in the New York Stock Exchange’s (“NYSE”) listing standards and that Mr. Gregory S. Churchill qualified as an independent director under NYSE listing standards during the period he served on the Board.

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Board Leadership Structure

Our Bylaws provide the Board with the discretion to elect a Chairman who may or may not be one of our officers. This flexibility enables the Board to decide what leadership structure is in our best interests at any given time. The Board periodically reviews its structure and our leadership as part of the succession planning process. Mr. Oswald has served as Chairman since our 2018 annual meeting.

The independent members of the Board have determined that, at this time, having the same person serve as Chairman and CEO provides us with an efficient leadership structure because it allows the Board to benefit from the CEO’s extensive knowledge of our business and strategy, promotes alignment between the Board and management on corporate strategy, facilitates management’s effective execution of that strategy, facilitates communications and relations with other members of senior leadership, and also bolsters the quality of our governance. In the future however, the roles of Chairman and CEO may be filled by the same or different individuals.

The Board also believes that strong, independent leadership and oversight of management is an important component of an effective Board. To that end, the independent directors have elected Dean M. Flatt as the Lead Independent Director with significant leadership authority and responsibilities, including those as set forth below.

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The Board’s Role in Risk Oversight

The Board oversees risk management collectively and through its individual committees. The Board regularly reviews information regarding, and risks associated with, our operations, liquidity, cybersecurity, ESG program and other matters. In addition, in 2021, the Board received regular updates from management regarding risks related to COVID-19. The Board’s review and discussions regarding COVID-19 spanned, and continues to span, a broad range of issues, including protecting the health and safety of our employees; evaluating the impact of the pandemic on strategy, operations, capital allocation, liquidity and financial matters; succession planning matters; interruptions in supply chains and financial markets; vaccination rates among our workforce; and compliance with applicable laws. The Board is highly engaged with management in identifying and overseeing such matters.

While the full Board has the ultimate oversight responsibility for the risk management process, various Board committees also have responsibilities for risk management in certain areas. The key risk oversight responsibilities of each of the Board’s committees are depicted in the diagram below.

The Board   The Board plays a direct role in our enterprise risk management (“ERM”) program, including cybersecurity, and receives quarterly reports from the chairs of each of the Board’s committees with respect to the risks overseen by each committee, and regular updates from management relating to risks posed by COVID-19.
Compensation Committee   •   Reviews and discusses management’s assessment of risks relating to our compensation policies and practices and whether such risks are reasonably likely to have a material adverse effect on us, as well as human capital and social risks.			Audit Committee   •   Reviews risks related to financial reporting and internal controls and, at least annually, reviews and assesses enterprise-wide risks and risk mitigation plans, as well as the monitoring and control of related exposures.				Nominating & Governance Committee   •   Evaluates the overall effectiveness of the Board and its committees, the effectiveness of our governance practices, and ESG risks.			Innovation Committee   •   Assists in developing a Ducommun-wide technology roadmap supportive of our business objectives, and evaluates our research and development programs.

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Nominating Process

The Corporate Governance and Nominating Committee believes that all Committee-recommended nominees for election as a director of Ducommun must, at a minimum, have:

In identifying candidates to serve on the Board, the Corporate Governance and Nominating Committee follows the process delineated in the diagram below.

Identify Current Board Composition     The evolving needs of the Board are identified and evaluated, taking into account factors such as the Board’s current composition, the range of talents, experiences and skills that would best complement those already represented on the Board, the balance of management and independent directors, the diversity in perspectives represented by directors of different personal characteristics, gender, race, cultural heritage, and age, and the need for financial or other specialized expertise.

Conduct Self-Assessment     The Board conducts periodic self-assessments to identify evolving areas of need that the directors believe are important to our overall governance and for the execution of our long-term strategy.

Identify Skills Needed in the Future     The Board uses the results of the assessment to determine whether its current mix of experience, skills and perspectives are addressing the identified areas of need, and reveal capabilities that will be required to address those areas in the near future.

As a result of recent assessments, the Corporate Governance and Nominating Committee determined that the Board would benefit from additional expertise in the areas of product strategy, human capital management and finance. The committee retained Spencer Stuart, an outside search firm, to conduct searches for the best qualified candidates in these fields. Spencer Stuart utilized a disciplined process that included research and reviewing the firm’s global database and network of contacts. Over the past few years, Spencer Stuart’s searches have identified our three newest directors—Ms. Drazba, Ms. Kramer and Ms. Strycker—from competitive pools of candidates.

All candidates considered for nomination as a director of Ducommun by the Corporate Governance and Nominating Committee must complete a questionnaire, provide such additional information as the committee may request, and meet in person with our sitting directors.

The Corporate Governance and Nominating Committee will consider director candidates recommended by shareholders who have beneficially owned more than five percent (5%) of our voting common stock continuously for at least one year as of the date the recommendation is made. Shareholders may submit the name of only one person each year for consideration as a director candidate. All such recommendations must be submitted to our Secretary in writing no later than October 31 of the year preceding the annual meeting of shareholders, and must include (i) the full name, address and Social Security number of the director candidate, (ii) the full name, address and taxpayer identification number of each of the shareholders, and (iii) an affidavit of each of the shareholders that they satisfy the minimum beneficial ownership of common stock requirements set forth above. The Corporate Governance and Nominating Committee considers and evaluates candidates recommended by shareholders in the same manner that it considers and evaluates other director candidates.

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Committees of the Board of Directors

We have four standing Board committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, and the Innovation Committee. Other than the Innovation Committee, all of the committees are made up entirely of independent directors. The charters for all four committees are available on our website at https://investors. ducommun.com/corporate-governance. Shareholders may request paper copies of any charter by contacting Ducommun Incorporated, 200 Sandpointe Avenue, Suite 700, Santa Ana, California 92707-5759, Attention: Corporate Secretary.

Audit Committee

Four meetings in 2021 (100% attendance)

	JAY L. HABERLAND Chair   Members   Richard A. Baldridge Robert C. Ducommun Samara A. Strycker		All of the members of the Audit Committee meet the independence criteria of the NYSE’s listing standards. The Board, in its business judgment, has determined that each of Messrs. Baldridge, Ducommun, and Haberland, as well as Ms. Strycker, are “financially literate,” under the NYSE listing standards and that Mr. Haberland is an “audit committee financial expert,” as such term is defined in Securities and Exchange Commission (“SEC”) regulations.   The Audit Committee performs the following functions:   •   Appoints, compensates, retains and oversees the work of our independent auditor; •   Reviews the independent auditor’s internal quality control procedures and any material issues raised therein, and considers the independence of the independent auditor on an annual basis in accordance with rules of the Public Company Accounting Oversight Board; •   Approves in advance all audit services to be provided by the independent auditor and establishes policies and procedures for the engagement of the independent auditor; •   Oversees the integrity of our financial statements and compliance with legal and regulatory requirements, including procedures for handling claims of misconduct; •   Oversees the effectiveness of our disclosure controls and processes; and •   Evaluates the effectiveness of our internal audit function.

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Compensation Committee

Three meetings in 2021 (100% attendance)

	DEAN M. FLATT Chair   Members   Shirley G. Drazba Jay L. Haberland		All of the members of the Compensation Committee meet the independence criteria of the NYSE’s listing standards and the additional requirements for compensation committee members prescribed by the SEC.   The Compensation Committee performs the following functions:   •   Oversees our compensation philosophy, policies and programs; •   Reviews and approves corporate goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance in light of those goals, and determines and approves the CEO’s compensation level based on this evaluation; •   Approves the compensation of other executive officers based on the recommendation of the CEO, and approves the terms and grants of equity awards; •   Selects and retains an independent compensation consultant, currently, Willis Towers Watson, to provide consulting services relating to our executive compensation program; •   Administers and makes recommendations to the Board with respect to our incentive compensation plans for executive officers and employees generally; •   Reviews and approves employment and severance agreements for executive officers, including change-in-control provisions, plans or agreements; •   Reviews our succession plans relating to the CEO and other executive officers, in consultation with the Corporate Governance and Nominating Committee; •   Oversees our human capital and social risks; •   Reviews our Compensation Discussion and Analysis and related disclosures that are included in our annual report and proxy statement as required by SEC rules; •   Assesses whether compensation consultants involved in recommending executive or director compensation raise any conflict of interest issues that require disclosure in our annual report and proxy statement; and •   Oversees the evaluation of our management in conjunction with the Corporate Governance and Nominating Committee.

Corporate Governance and Nominating Committee

Three meetings in 2021 (100% attendance)

	ROBERT C. DUCOMMUN Chair   Members   Dean M. Flatt Sheila G. Kramer		All of the members of the Corporate Governance and Nominating Committee meet the independence criteria of the NYSE’s listing standards.   The Corporate Governance and Nominating Committee performs the following functions:   •   Recommends criteria for identifying candidates for the Board, and identifies, recruits, and reviews the qualifications of such candidates; •   Assesses the contributions and independence of incumbent directors and recommends them for reelection to the Board; •   Develops and recommends corporate governance principles to the Board, and reviews and recommends changes to those principles as necessary; •   Makes recommendations to the Board relating to the structure, composition and functioning of the Board and its committees; •   Recommends candidates for appointment to Board committees; •   Reviews the compensation of directors for service on the Board and its committees, and recommends changes thereto; •   Oversees ESG initiatives, and reviews and makes recommendations to management relating to such issues; •   Reviews our succession plans relating to the CEO and other executive officers, in consultation with the Compensation Committee; and •   Oversees the performance of the Board and our management team.

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Innovation Committee

Three meetings in 2021 (100% attendance)

	SHIRLEY G. DRAZBA Chair   Members   Richard A. Baldridge Stephen G. Oswald		The Innovation Committee performs the following functions:   •   Assists management and the Board in developing a technology roadmap to support our long-term business objectives; •   Advises the Board and management on emerging science and technology trends, including evolving digital strategies being adopted in the aerospace and defense industry, and recommending strategies relating to new product and intellectual property development; •   Monitors the overall direction, effectiveness, competitiveness and timing of our research and development programs; and •   Assists the Board and management in identifying and developing key contributors to innovation at Ducommun and empowering implementation of the Board and management’s recommendations.

Annual Board and Committee Evaluations

The Corporate Governance and Nominating Committee, together with the Lead Independent Director, coordinates regular Board performance evaluations. These evaluations are conducted through a combination of formal and informal processes, including the following:

Feedback from these processes is communicated to the Chair of the Board, the Chair of the Nominating and Corporate Governance Committee, and the Lead Independent Director so that appropriate follow-up measures can be discussed, implemented, and monitored. As discussed in “Nominating Process,” as a result of such recent self-evaluations, the Board determined that it would benefit from additional expertise in the areas of product strategy, human capital management and finance. Our three newest directors, Ms. Drazba, Ms. Kramer and Ms. Strycker have enhanced the Board with these and other areas of expertise.

Director Orientation and Continuing Education

Ducommun provides an orientation program for all new directors with respect to their role as directors and as members of the Board committees on which they will serve. In addition, Ducommun provides continuing education and ongoing development for its directors to help them continuously improve their contributions as individual directors and collectively as a Board, and pays for all reasonable expenses for any director who wishes to attend an external director continuing education program.

Shareholder Engagement

We are highly engaged with our shareholders on various topics of interest to them. For example, in 2017, we held several discussions about board diversity. As a result, in 2018, we updated our Corporate Governance Guidelines to reflect our commitment to increasing the range of perspectives represented on our Board. More recently, in the fall of 2021, we corresponded with the Diversity Disclosure Initiative, which represents over $3 trillion in assets and is a member of The Thirty Percent Coalition, a national organization that advocates for the disclosure of board diversity metrics, to confirm Ducommun’s support and compliance with such best practices. We also carefully monitor our “say-on-pay” vote results, which historically have indicated significant shareholder support for our executive compensation program. As a part of our ongoing dialogue with our shareholders, we will keep the channels of communication open and engage regarding any areas of concern to our shareholders.

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Meetings and Executive Sessions

The Board met six times in 2021. All directors attended 100% of all Board and applicable committee meetings during 2021. We strongly encourage all directors to attend the Annual Meeting of Shareholders, and all six of the directors in office at the time attended the 2021 Annual Meeting of Shareholders.

We have a policy of holding regularly scheduled executive sessions of non-management directors following each regularly scheduled meeting of the full Board. Additional executive sessions of non-management directors may be held from time to time as required. The presiding director during executive sessions currently is Mr. Flatt, the Lead Independent Director of the Board. The graphic below depicts the attendance of directors at Board and committee meetings held in 2021:

2021 Board and Committee Meetings with 100% Attendance

Key Governance Documents

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics that is applicable to all directors, employees, and officers, including our CEO, Chief Financial Officer and Principal Accounting Officer. Among other things, the Code of Business Conduct and Ethics requires directors, employees, and officers to avoid any activity that may result in a conflict of interest with Ducommun; maintain the confidentiality of information entrusted to them by us or our customers (except when disclosure is authorized or legally mandated); deal fairly with our customers, suppliers, competitors, and employees; protect Ducommun’s assets and their efficient use; and maintain our books, records, accounts and financial statements in reasonable detail to fairly reflect our transactions and conform to both applicable legal requirements and to our system of internal controls.

Code of Ethics for Senior Financial Officers

The Board has adopted a Code of Ethics for Senior Financial Officers that is applicable to our CEO and President, Chief Financial Officer, Treasurer and Controller, and the President, Vice President of Finance and Controller of each of our subsidiaries. The Code of Ethics for Senior Financial Officers, among other things, requires our Senior Financial Officers to provide full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications made by us and to promptly report violations of the Code to the Audit Committee. We intend to post on our website amendments, if any, to the Code of Ethics for Senior Financial Officers, as well as any waivers thereunder, with respect to our officers and directors as required to be disclosed by the SEC and NYSE rules.

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Corporate Governance Guidelines

The Board adopted Corporate Governance Guidelines, which among other things, specify the criteria to be considered for director candidates; impose tenure limits on directors; and require the independent directors to hold periodic meetings without executive management present. In 2018, the Board revised our Corporate Governance Guidelines to emphasize its belief that diversity and a blend of different perspectives contributes to a vital board dynamic, which is essential to effective governance.

Other Governance Documents

Our Board has approved or adopted several other important policies and statements, including:

How to Find Governance Documents

All of the documents described above are available on our website at https://www.ducommun.com in the Corporate Governance section of the Investor Relations webpage, and will be forwarded in print to any shareholder upon request. Any such request should be addressed to Ducommun Incorporated, 200 Sandpointe Avenue, Suite 700, Santa Ana, California 92707-5759, Attention: Corporate Secretary.

The Corporate Governance section of our website also contains information on our confidential ethics hotline.

Compensation of Directors

Directors who are not employees of Ducommun or its subsidiaries are paid a mix of cash and equity for their service on our Board, as shown below.

Our non-employee directors are also eligible to participate in the Directors Deferred Income and Retirement Plan. Under this plan, a director may elect to defer payment of all or part of his or her fees for service as a director until the director retires from service on the Board. Deferred directors’ fees may be notionally invested, at the election of the director, in a fixed interest account or a phantom stock account that tracks the value of our common stock including dividends (if any). All deferred amounts and related earnings will be paid in a lump sum when the director retires.

Upon retirement from the Board, Mr. Ducommun will receive an annual retainer fee of $25,000 for the shorter of his life or a period of twelve years.

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2021 Director Compensation Table

The following table presents the compensation earned or paid by Ducommun to the non-employee directors for the year ended December 31, 2021.

Director and Officer Stock Ownership Policy

In August 2020, the Compensation and Corporate Governance and Nominating Committees of the Board updated the stock ownership requirements covering all non-employee directors and executive officers. Under the revised policy, non-employee directors must acquire and hold shares of our common stock equal in value to at least five times the annual Board cash retainer paid to all non-employee directors, or $350,000. Non-employee directors are expected to meet these holding requirements by December 31 of the fifth year following their initial election to the Board. A non-employee director’s stock ownership is valued based on the average trading price of our stock over a twelve-month period ending on December 31 of each calendar year. All directors are in compliance or have additional time in which to comply with the stock ownership guidelines.

Corporate Environmental, Social and Governance

We are committed to improving the lives of our shareholders, employees, customers, business partners, and the communities in which we operate. To that end, we believe having a strong focus on corporate responsibility, including ESG matters, and conducting our business in an ethical, transparent and accountable manner, creates value for all of our stakeholders. We provide an overview of our ESG initiatives and practices below. Our complete Environmental, Social & Governance Report is available via the “Environment & Sustainability” link on our Investor Relations webpage.

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Board-Level Oversight of ESG

Our ESG initiatives are overseen by the Board in general, and specifically, the Corporate Governance and Nominating Committee. In particular, the Corporate Governance and Nominating Committee reviews and provides input on ESG metrics applicable to us and of potential interest to our stakeholders. In 2020 and based on management’s recommendations, the Corporate Governance and Nominating Committee approved the development of an ESG program substantially based on the Sustainability Accounting Standards Board’s Aerospace and Defense Industry Standard (the “SASB Standard”), as modified, as being the standard most reflective of, and relevant to, Ducommun’s operations. In 2021, we formally established an ESG steering committee comprised of senior executives to monitor and manage the initiatives approved by the Corporate Governance and Nominating Committee to further strengthen our ESG program. The Corporate Governance and Nominating Committee and the full Board receive periodic updates on the status of these initiatives.

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Operating Responsibly

We understand the importance of building trust with our investors, customers, vendors and suppliers, and that the foundation for doing so begins with our employees. To establish this trust and reflect this commitment, we rely on an anonymous hotline to support our Code of Business Conduct and Ethics and empower our employees to provide suggestions and report concerns or instances of misconduct. In keeping with our foundational core values of honesty and trust, we offer employees regular ethics training and monthly ethics bulletins to promote a culture of high ethical standards where employees feel free to voice any concerns.

We are also committed to respecting human rights and establishing expectations for high levels of ethical conduct throughout our supply chain. Ducommun’s California Transparency in Supply Chains Act Disclosure Statement and Prohibition Against Trafficking in Persons Policy are both available in the Corporate Governance section of our Investor Relations webpage.

COVID-19

Employee safety is one of our top priorities. As a result of the ongoing COVID-19 pandemic, in 2021 we continued to incorporate stringent, preventative measures and protocols based on Centers for Disease Control (“CDC”) guidance at our locations to protect the health, welfare and safety of our employees. Many of these protocols are still in effect, including:

In addition, management implemented a vaccine incentive program in the spring of 2021 that offered $100 to all employees who became fully vaccinated. As a result of ongoing communications and these incentives, approximately 69% of Ducommun’s workforce was fully vaccinated (as defined by the CDC) by the end of 2021. The Board of Directors was kept apprised with regular updates as to the successful implementation of our safety protocols and COVID-19 vaccination rates among our workforce during the year.

Workplace Health and Safety

In 2021, Ducommun adopted environmental health and safety (“EHS”) key performance indicators (“KPIs”) that were regularly communicated across the enterprise by senior management in order to improve safety outcomes. We invested in infrastructure to improve machine guarding and refreshed internal safety protocols around key processes such as lockout tagout. In addition, we used improved EHS software tools to track and engage Performance Centers in order to reduce lost time and total recordable incident rates.

Over the four-year period between January 1, 2018, and December 31, 2021, Ducommun’s lost time incident rate⁽⁴⁾ decreased by 56% and the total recordable incident rate⁽⁵⁾ decreased by 68%.

Lost Time Incident Rate Total Recordable Incident Rate

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Environmental Initiative Highlights

In support of our pledge to deliver exceptional value to all stakeholders, we are committed to the following with respect to our environmental management practices:

Below is a summary of our performance over the four-year time period between 2018 and 2021 relating to our greenhouse gas emissions and total energy use. Overall, there was a 28% decrease in combined Scope 1 and 2 greenhouse gas emissions, and a 17% reduction in total energy usage in 2021 compared to 2018.

Scope 1 and 2: Greenhouse Gas Emissions (tons CO₂) Total Energy Use (GigaJoules)

Moreover, we are pleased to report that there were no reportable spills in 2021, as defined by the SASB Standard.

Investment in Our Employees

We have implemented and maintain several programs for the financial and educational well-being of our employees and their families. For example, in 2019, we introduced our Employee Stock Purchase Plan, which provides employees the opportunity to share in Ducommun’s success and continued growth by purchasing the Company’s stock. The plan allows eligible employees to accumulate contributions through after-tax payroll deductions to purchase shares of Ducommun stock at a 15% discount. In 2021, we continued to grow the program, with a 38% increase in participation since it was launched. In addition, our 401(k) program has an 88% participation rate among eligible employees, with annual training and monthly educational sessions held at each Ducommun location.

The Ducommun Scholarship program is an exclusive benefit for the children and grandchildren of full-time Ducommun employees who plan to continue education in college or vocation school programs. These merit-based scholarships are renewable each year provided the student maintains prescribed academic performance and has a parent or grandparent that is employed by Ducommun. In 2021, Ducommun awarded a total of 30 new scholarships and 18 renewed scholarships, for a total of 48 during the year, an increase from the 25 scholarships awarded in 2020, and 22 awarded in 2019. The total value of scholarship awards in 2021 was $138,000, up 94% from $71,000 awarded in 2020. Students can renew their scholarship awards for each academic year, allowing them to work toward a two- or four-year degree. This enhancement to the program was adopted based on an awareness that some students would begin, but not always complete their studies, which Ducommun was determined to change.

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Number of Scholarships Awarded Total Value of Scholarships

Diversity and Inclusion

As of the end of 2021, 17% of our leaders at the position of Vice President and above were women and 33% were from diverse backgrounds, consistent with 2020 figures. At the Director level, 27% of our leaders were women and 29% were diverse, reflecting year-over-year increases of 19% and 24%, respectively. In addition, 37.5% or our Board is now comprised of women, up from zero in 2017.

Ducommun, like other manufacturing companies, faced a highly competitive labor market in 2021. Despite the shallow labor pool, we continued efforts to connect with diverse candidates through partnerships with outreach organizations, who helped make our job opportunities available to an inclusive pool of candidates representing minorities, women, individuals with disabilities, and veterans. In 2021, 33% of our new hires self-identified as coming from a diverse background, 44% as female, and 7% as protected veterans. Consistent with these recruitment efforts, 68% of our total workforce self-identified as being part of an underrepresented or minority group.

Newsweek Most Loved Workplaces 2021   In 2021, Ducommun was proud to be named to Newsweek’s inaugural list of Most Loved Workplaces for 2021, ranking number 66 among the top 100 companies recognized for employee happiness and satisfaction at work. Newsweek’s 2021 list of Most Loved Workplaces was produced in collaboration with the Best Practice Institute (“BPI”), a leadership development and benchmark research company, which surveyed more than 800,000 employees from businesses with workforces ranging in size from 50 to more than 10,000. Five key areas were measured to gauge employee sentiment: 1) the level of collaboration within the company; 2) how positive workers are about their future at the company; 3) the degree to which employer and employee values align; 4) respect at all levels; and 5) career achievement. The survey also included company responses and adaptability to the pandemic, workplace diversity, equity and inclusion, as well as compensation and benefits policies and practices.
Orange County Business Journal Best Places to Work   Ducommun was named to the 2021 list of “Best Places to Work” by the Orange County Business Journal (“OCBJ”) and the Best Companies Group. Created in 2009, the Best Places to Work awards program is a joint project of the OCBJ and the Best Companies Group, and includes a county-wide survey designed to identify, recognize and honor the best places of employment in Orange County, California, benefiting the county’s economy, workforce and businesses. Many organizations competed for the 2021 Best Places to Work in Orange County designation, and final awards were based on a detailed evaluation of each employer’s workplace policies, practices and demographics, and feedback from an independent employee experience survey.

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Community Investment

Ducommun is committed to being an active member of the communities in which it operates by contributing not only financial resources, but also volunteering time to help these communities become stronger and better environments in which to live and work. The Company accomplishes this by focusing on educational opportunities for underprivileged students and supporting small business recovery in communities facing social unrest.

In 2021, Ducommun partnered with the United Way of Orange County to offer a platform through Salesforce.org that helps organizations connect their employees to the causes they support, both locally and nationally. Branded as the “Ducommun Philanthropy Cloud,” this platform can manage campaigns on behalf of employees who wish to donate time and financial resources to charitable causes. Ducommun Philanthropy Cloud provides visibility to the causes Ducommun’s employees support so management can tailor future charitable donations to such organizations and work with employees to develop meaningful volunteer opportunities. Ducommun originally launched this program for a pilot group of employees in 2021, and together with its employees, collectively pledged an annual total of more than $6,000 in donations and logged over 96 hours of volunteer work for the year. Due to the success and positive feedback from the employee pilot group, the Ducommun Philanthropy Cloud will be implemented company-wide in 2022.

The Ducommun Foundation, founded in 2019, is a Section 501(c)(3) organization dedicated to financially supporting local and national non-profit and charitable organizations in the communities in which we operate. In 2021, The Ducommun Foundation donated more than $200,000 to support organizations that benefit veterans, active service members and military families, and efforts to end homelessness in local communities.

STEM on the Sidelines™   As a leader in the aerospace and defense industry, Ducommun continues to support community-based science, technology, engineering and math (“STEM”) programs and initiatives that nurture and develop the next generation of innovators, thinkers and technicians. In partnership with the Los Angeles Chargers of the National Football League and the University of California, Irvine, Ducommun established and sponsors STEM on the Sidelines™, a regional competition promoting STEM education in Los Angeles and Orange County, California high schools.   The fourth annual contest began in September and concluded in December with the winning teams honored before the Los Angeles Chargers game on December 16, 2021, at the new SoFi Stadium in Inglewood, California. More than 150 students from 17 different high schools participated in the 2021 contest, bringing the total to more than 550 students who have benefited from their involvement in STEM on the Sidelines™ since 2018.

How to Contact the Board of Directors

We encourage shareholders and other interested parties to communicate with our Board in writing by mail, addressed to Board of Directors, Ducommun Incorporated, 200 Sandpointe Avenue, Suite 700, Santa Ana, CA 92707-5759. We intend to forward all such communications to the Board, a Board committee, or any individual director or directors to whom the communication is directed, unless the communication is unduly hostile, threatening, or illegal, does not reasonably relate to Ducommun or its business, or is similarly inappropriate. The Secretary has the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such communications. The Board will endeavor to promptly respond to all appropriate communications.

Certain Relationships and Related Transactions

Since the beginning of fiscal 2021, we were not a participant in any transaction in which the amount involved exceeded or will exceed $120,000 and in which any of our directors, executive officers or beneficial holders of more than 5% of our capital stock or any of the immediate family members of any of the foregoing persons had or will have a direct or indirect material interest.

Although we do not have a written policy for the review of related party transactions, we have designed our internal control framework to identify related party transactions, including periodic disclosure certifications and monitoring controls. Any identified transactions are then reviewed by the Audit Committee of the Board to confirm that they comply with internal policies, procedures, and applicable regulations.

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Named Executive Officers

We believe our named executive officers have the appropriate balance of skills, knowledge, and experience to position us for growth and to maximize shareholder value going forward. We also believe our executive team represents an effective combination of seasoned and younger professionals as shown below.

Age Tenure

	STEPHEN G. OSWALD Chairman, President and Chief Executive Officer   Age: 58   Executive since: 2017			Mr. Oswald has served as President and Chief Executive Officer since January 2017, and as Chairman, President and Chief Executive Officer since May 2018. For additional information on Mr. Oswald, see “Directors’ Backgrounds and Qualifications” on page 15.
	JERRY L. REDONDO Senior Vice President of Operations and Head of Ducommun Structures   Age: 62   Executive since: 2013			Mr. Redondo has served as Senior Vice President of Operations and Head of Ducommun Structures since June 2017. Before that, he was Vice President, Operational Excellence from 2015 to 2017, and Vice President, Operational Excellence for several of Ducommun’s subsidiaries from 2013 to 2015. Prior to joining Ducommun, Mr. Redondo was Group Vice President of Crane Aerospace & Electronics, Inc. (from 2010 to 2013), and Director of Operations and Global Supply Chain of the Parker Aerospace Control Systems Division of Parker Hannifin Company (from 1991 to 2010).
	RAJIV A. TATA Vice President, General Counsel & Corporate Secretary   Age: 49   Executive since: 2020			Mr. Tata has served as Vice President, General Counsel and Corporate Secretary since January 2020. Between the time of his promotion and May 2018, Mr. Tata served as Deputy General Counsel and Corporate Secretary. He joined Ducommun in April 2017 as Senior Director, Corporate Compliance. Prior to joining Ducommun, Mr. Tata served as Assistant General Counsel for BakerCorp, an oilfield service company, where he was responsible for assisting with mergers and acquisitions, commercial and real estate transactions, corporate governance and regulatory compliance matters.

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CHRISTOPHER D. WAMPLER Vice President, Chief Financial Officer, Controller and Treasurer   Age: 54   Executive since: 2013

Mr. Wampler has served as Vice President, Chief Financial Officer, Controller and Treasurer since January 2021. Between the time of his promotion and June 2019, Mr. Wampler served as the interim Vice President, Chief Financial Officer and Treasurer, and served as Vice President, Controller and Chief Accounting Officer since 2016. Mr. Wampler was Vice President and Assistant Controller for several of Ducommun’s subsidiaries from 2013 to 2015. He was previously the Controller of Just Fabulous, Inc., an online subscription fashion retailer, from 2012 to 2013, and the Division Controller of the A.O. Smith Electrical Products Co. from 2004 to 2012. Mr. Wampler is a certified public accountant and a certified management accountant.

Security Ownership of Certain Beneficial Owners and Management

The tables below show the beneficial ownership of our common stock by beneficial owners of more than 5% of our common stock, each of our directors and nominees for director, each executive officer named in the Summary Compensation Table contained in this Proxy Statement, and all directors and executive officers as a group. This information is as of February 22, 2022, except as otherwise indicated in the notes to the tables, and does not account for any tax withholding of shares that may occur after February 22, 2022, in connection with the vesting of restricted stock units or settlement of performance stock units that will vest or settle within 60 days of February 22, 2022, as described in the notes to the tables. Unless otherwise indicated, such shareholders have sole voting and investment power (or share such power with their spouse) with respect to the shares set forth in the tables. We know of no contractual arrangements that may result in a change in control of Ducommun.

For the purposes of the tables, beneficial ownership of shares has been determined in accordance with Rule 13d-3 of the SEC, under which a person is deemed to be the beneficial owner of securities if she or he has or shares voting or investment power with respect to such securities or has the right to acquire ownership thereof within 60 days. Ownership percentages in the table are based upon 11,972,368 shares of common stock outstanding as of February 22, 2022, and the relevant number of shares of common stock issuable upon exercise of stock options or other awards that are exercisable, have vested, or will be exercisable within 60 days of February 22, 2022. The amounts shown in the tables do not purport to represent beneficial ownership for any purpose other than compliance with SEC reporting requirements.

Security Ownership of Certain Beneficial Owners

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Security Ownership of Directors and Management

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Proposal 3: Resolution to Approve Executive Compensation on an Advisory Basis

We are asking shareholders to approve on an advisory basis Ducommun‘s named executive officer compensation as reported in this Proxy Statement. As described below in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:

Our pay-for-performance compensation approach consists of a mix of shorter-term and longer-term incentive compensation, including annual cash incentives, restricted stock units that incrementally vest over three years, and performance stock units that will cliff vest at the end of a three-year performance period. In 2021, despite the continued headwinds facing Ducommun from the ongoing impact of the COVID-19 pandemic, the Compensation Committee continued to adhere to our pay-for-performance compensation philosophy and decided not to provide relief to management under the annual cash incentive plan relating to any COVID-19 related market impacts, which included revenue, OI and any expenditures. With respect to annual incentives, the Compensation Committee took into account the following:

The Compensation Committee incorporated these considerations into the final annual cash incentive awards that recognized the significant individual and team performance that drove our return to growth in 2021. Moreover, the Compensation Committee firmly believes that Ducommun‘s return to growth in 2021, with year-over-year increases in earnings, revenue and operating income, as well as achieving an all-time high earnings per share, positions Ducommun and its shareholders very favorably for further success going forward.

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With respect to long-term incentives, the Compensation Committee continued its practice of granting performance and restricted stock units to executives as the Company does not maintain a pension plan for our CEO or NEOs. The Compensation Committee believes this decision is consistent with our pay-for-performance compensation philosophy and maintains the alignment between executives‘ interests and those of our shareholders. As a result, in 2021:

We urge shareholders to read the “Compensation Discussion and Analysis” below, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related tables and narrative that follow the CD&A, and which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board strongly believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our executive officers reported in this Proxy Statement has supported and contributed to our success.

In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking shareholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the shareholders of Ducommun Incorporated (the “Ducommun”) approve, on an advisory basis, the compensation of Ducommun‘s named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for Ducommun‘s 2022 Annual Meeting of Shareholders.

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board. However, the Board and the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program.

At the 2021 Annual Meeting, shareholders expressed substantial support for the compensation of our named executive officers, with approximately 99% of the votes cast (excluding abstentions) approving the “say-on-pay” resolution.

Following the vote to be conducted at our 2022 Annual Meeting of Shareholders, we anticipate that the next advisory vote to approve named executive officer compensation will occur at our 2023 Annual Meeting of Shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” DUCOMMUN’S ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION.

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2021 Compensation Discussion and Analysis

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Executive Summary

This Compensation Discussion and Analysis describes the compensation awarded to, earned by, or paid to the executive officers listed below (the “Named Executive Officers” or “NEOs”) during 2021.

STEPHEN G. OSWALD,		JERRY L. REDONDO,		ROSALIE F. ROGERS,		RAJIV A. TATA,		CHRISTOPHER D. WAMPLER,
Chairman,		Senior Vice President,		Former Vice President and		Vice President, General		Vice President,
President and Chief		Operations and Head of		Chief Human Resources		Counsel and Corporate		Chief Financial Officer, Controller
Executive Officer		Ducommun Structures		Officer(7)		Secretary		and Treasurer

2021 Operations and Performance: A Return to Growth

The year ended December 31, 2021 marked a “Return to Growth” for Ducommun. We effectively leveraged many of our successes from the prior year, including a historically high backlog in our defense business, and experienced a modest level of recovery from some of our original equipment manufacturer customers in commercial aerospace. In addition, with the right footprint, cost structure, SG&A among industry leaders, especially at the corporate level, operational leadership and experience, Ducommun met its commitment to “Return to Growth” in 2021 made by our CEO, Stephen G. Oswald, publicly in August 2020. The critical metrics such as earnings, revenue, operating income and backlog, as well as achieving all-time high earnings per share are summarized in the tables and graphs below:

Diluted Earnings Per Share 2018 – 2021*

Diluted earnings per share* was $11.06 for 2021, as compared to $2.45 in 2020. This significant increase reflects the gain on a sale-leaseback transaction, management’s strong overdrive and continued development of Ducommun’s defense business and perseverance in maintaining cost discipline.

Operating Income ($000s)

Operating income grew to $48.9 million in 2021 due to revenue growth, gross margin expansion and strong cost controls in SG&A, up from approximately $45.5 million in 2020 and marking Ducommun’s return to growth in 2021.

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Revenue (in $000s)

Revenues in 2021 were $645.4 million, representing an approximately 2.6% year-over-year increase from 2020. This increase reflects purely organic growth achieved by management’s strong overdrive and development of Ducommun’s defense business.

Operating Income Margins (%)

Operating income margins increased by 40 bps, which was an excellent outcome reflecting Ducommun’s return to growth in 2021 and illustrates the benefit realized by shareholders from top-tier SG&A.

Adjusted EBITDA (in $000s)**

Adjusted EBITDA increased from approximately $87.9 million in 2020 to approximately $92.8 million in 2021 due to management’s performance during another extremely challenging year in commercial aerospace.

Adjusted EBITDA (%)**

Adjusted EBITDA increased by 40 bps from 14.0% in 2020 to 14.4% in 2021, which again resulted in an excellent outcome due to management’s performance during another extremely challenging year.

Gross Profit Margin (as % of Revenues)

Gross profit margin was 22.1% of revenues in 2021, the highest level in a decade! The 20 bps improvement was the result of revenue growth, strong operating efficiencies and cost controls despite ongoing challenges presented by the delayed commercial aerospace recovery.

Backlog (in $000s)**

Backlog, defined as customer placed purchase orders and long-term agreements with firm fixed price and delivery dates of 24 months or less, was approximately $905 million at the end of 2021, compared to $808 million at the end of 2020, reflecting a 24% increase in demand for products in Ducommun’s commercial aerospace business.

Our relative total shareholder return TSR compared to the Russell 200 Index over the 3-year period between 2019 and 2021 was in the 46^th percentile, ranking 938^th out of 2000 companies.***

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Shareholder Value

The chart below depicts our market capitalization between the years 2018 and 2021.

The following graph and table compare the total shareholder return on $100 invested in Ducommun common stock with the total shareholder return on $100 invested in the Russell 2000 Index, companies identified in the benchmarking and peer groups section of this Compensation and Disclosure Analysis, the NYSE Composite Index, and the Dow Jones Industrial Average for the three-year period from 2019 through 2021, with the year ended December 31, 2018, serving as the base period. The Russell 2000 Index measures the performance of approximately 2,000 small-capitalization companies in the Russell 3000 Index, a larger index of publicly traded companies that represents almost 98% of the investable U.S. stock market. The total returns include the reinvestment of cash dividends.

Total Shareholder Return vs. Proxy Peers, Russell 2000 and Selected Indices

Comparison of 3 Year* Cumulative Total Return

Ducommun Inc. vs. Median of Peers** and Russell 2000, NYSE and Dow Jones Indices***

Assumes Initial Investment of $100

December 2018

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Pay for Performance Philosophy

Our philosophy in compensating our named executive officers is oriented towards a pay-for-performance approach. In 2021, as reported in the Summary Compensation Table and other graphs below, performance-based compensation (defined, for this purpose, as all compensation contingent on the achievement of performance goals and/or increases in our stock price), at target, represented a significant percentage of the total compensation of each of the named executive officers:

CEO Compensation Mix   NEO Compensation Mix

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Compensation Program Overview

The direct elements of our executive compensation program are summarized below.

As shown above, our executive compensation program reflects strong pay for performance alignment, and our financial performance was the most significant factor affecting compensation of the named executive officers in 2021.

A key factor in our ability to drive margin expansion is maintaining strong cost management and effective spending controls, resulting in top-tier SG&A expenses. As depicted below, Ducommun’s SG&A expense as a percentage of revenue is lower than all but two of its proxy peer group companies, based on those firms’ most recent Form 10-K filings with the SEC. In addition, Ducommun’s strong commitment to managing costs extends to its corporate headquarters. Since 2016, the number of vice presidents at the Company has decreased by over 50%, demonstrating management’s continued strong cost management and effective spending controls.

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Vice Presidents at DCO Corporate		DCO vs. Proxy Peers SG&A Expense

The total compensation of our CEO and other named executive officers increased slightly on a year-over-year basis, consistent with our return to growth in 2021. While our CEO’s total compensation for 2021* increased by 27% compared to 2020**, a significant amount of that (87%) was performance based and reflected our year-over-year growth in earnings, revenue, operating income and earnings per share, along with SG&A expense being among industry leaders as discussed above, as well as the Company’s stock price on the grant date in 2021 being more than double than in 2020. The chart below depicts our CEO’s total compensation compared to our revenue between 2018 and 2021.

On average, total compensation for our other named executive officers increased by 14% over 2020, with 67% being performance based.

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Other NEOs Total Compensation 2019-2021

Compensation Best Practices

Our executive compensation program includes a number of positive pay practices.

What We Do				What We Don’t Do
		A significant majority of target direct compensation for the named executive officers was based on performance				We do not provide excise tax gross-ups
		We have a clawback policy in place for our annual and long-term incentive plans				We do not provide any pension or supplemental retirement benefits
		Executives and directors are subject to demanding stock ownership guidelines				We do not provide for any “single-trigger” equity vesting in the event of a change in control
		We provide only modest perquisites				We do not permit option repricing without shareholder approval
		Our Compensation Committee engages an independent compensation consultant				We do not grant stock options with an exercise price below 100% of fair market value
		We prohibit executives and directors from pledging Ducommun stock or engaging in hedging transactions involving Ducommun stock

Last Year’s Say on Pay Vote

At the 2021 Annual Meeting, shareholders expressed substantial support for the compensation of our named executive officers, with approximately 99% of the votes cast (excluding abstentions) in favor of the “say-on-pay” advisory vote. The Compensation Committee considered the results of the 2021 advisory vote in connection with its regular evaluation of our executive compensation programs, and did not make any changes to our program or policies as a result of that vote.

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How Compensation Decisions are Made

Compensation Objectives

Our compensation programs are designed to provide competitive levels of compensation that link pay to the achievement of our financial goals, recognize individual initiative and performance, and assist Ducommun in attracting and retaining qualified executives. We intend for overall compensation of the named executive officers to be at levels that are broadly competitive with other companies of similar size and complexity of operations.

We do not target any specific mix of cash versus non-cash compensation for our named executive officers. Instead, each element of compensation (salary, annual cash incentive and long-term equity incentives) is awarded and targeted at amounts that are intended to be market-competitive and consistent with our compensation principles, and that reflect internal pay equity considerations. In keeping with this approach, the Compensation Committee decided to continue to primarily rely on the grant of performance stock units when awarding variable and performance-based compensation to executives. This approach provides consistency with our philosophy of creating pay-for-performance compensation opportunities to maintain alignment between executives’ interests and those of shareholders.

Role of the Compensation Committee

Decisions relating to compensation of our executive officers generally are made by the Compensation Committee. Each element of compensation for the chief executive officer is set by the Compensation Committee. Each element of compensation for the other named executive officers is recommended by the CEO and reviewed and approved by the Compensation Committee. As discussed below, we generally target the 50^th to 75^th percentile of published survey data in assessing and establishing compensation for the named executive officers for two reasons. First, our executive officers assume multiple responsibilities that extend beyond the scope of those traditionally performed by leaders in similar roles. Additionally, our overall compensation mix leans heavily towards being performance-based, which ensures that our executive officers’ interests are aligned with those of shareholders.

Compensation Consultant

The Compensation Committee retained Willis Towers Watson (“WTW”) as an independent compensation consultant directly reporting to the Compensation Committee. WTW did not provide any other services to us in 2021 other than with respect to executive compensation. The Compensation Committee has reviewed the independence of WTW and completed an assessment of any potential conflicts of interest raised by WTW’s work for the Compensation Committee by considering the following six factors and other factors it deemed relevant: (i) whether WTW provides other services to us; (ii) the annual dollar value of fees paid to WTW, as a percentage of WTW’s total revenue; (iii) the policies and procedures of WTW that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the relevant WTW consultants with a member of the Compensation Committee; (v) whether any WTW consultants own Ducommun stock, and how much; and (vi) any business or personal relationship of the WTW consultants or WTW with any of our executive officers. As a result of this review, the Compensation Committee concluded that WTW is independent and there are no such conflicts of interest.

Benchmarking and Peer Groups

The Compensation Committee has the compensation consultant prepare a formal executive compensation assessment every year. In October 2020, WTW assessed our executive compensation compared to a specific peer group and published compensation data, and made recommendations as appropriate for changes to our executive compensation program (the “WTW compensation assessment”).

The peer group for 2021 compensation decisions consisted of the following eleven companies in the aerospace and defense and industrial machinery industries that were identified as market comparators by WTW and the Compensation Committee:

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As of the date of WTW’s compensation assessment, the peer group companies had 50^th percentile annual sales of $964 million and 25^th percentile annual sales of $767 million as of the end of the most recent fiscal year. Our annual sales were $628.9 million in 2020 (the most recent full fiscal year at the time of WTW’s compensation assessment).

In addition, the WTW compensation assessment compared our executive compensation to published survey compensation data for general industry and manufacturing industry companies with annual revenues of between $500 million and $1 billion, based on WTW’s advice that such compensation survey data would provide a reasonable basis for benchmarking our executive compensation. The compensation survey data was gathered from the 2020 General Industry Executive Compensation Survey – U.S., Durable Products Manufacturing or All Industry data cuts, published by Willis Towers Watson Services, and the 2020 U.S. Mercer Benchmark Database – Total Remuneration Survey, published by William M. Mercer. Aggregate compensation data from the surveys was provided to the Compensation Committee.

When making compensation decisions regarding the CEO, CFO and the SVP of Operations, the Compensation Committee reviews and relies upon both the peer group data and the published survey compensation data. When making compensation decisions regarding the other executive officers, the Compensation Committee relies more on the published survey compensation data included in the WTW compensation assessment because the data provided for comparable positions within our peer group companies was considered insufficient.

In reviewing the peer group data and the published survey compensation data, the Compensation Committee evaluated the relative percentile ranking of the Chief Executive Officer and the other executive officers with respect to salary, total cash compensation, and total direct compensation. The Compensation Committee also considers each named executive officer’s scope of responsibility, years of experience, demonstrated performance and marketability, and impact level within Ducommun relative to other executives in making compensation decisions.

2021 Named Executive Officer Compensation

Base Salaries

In establishing the salaries for the named executive officers in 2021, the Compensation Committee considered the WTW compensation assessment of base salary levels, which indicated that the CEO’s base salary was generally consistent with the 50^th percentile of our compensation peer group and at the 75^th percentile of published survey compensation data. The base salaries of the other named executive officers were generally consistent with the 50^th percentile of published survey compensation data. Accordingly, the Compensation Committee made the base salary changes shown below for 2021 in recognition that our executive officers assume multiple responsibilities that extend beyond the scope of those traditionally performed by leaders in similar roles. In all cases, salaries were raised to reward executives for their 2020 performance and for overcoming the unprecedented headwinds confronting Ducommun. Salaries for Mr. Tata and Mr. Wampler were raised by higher percentages to align their compensation with the market, particularly in light of Mr. Wampler’s promotion and assumption of significant new responsibilities.

Annual Cash Incentives

Annual cash incentives are awarded based on our actual financial performance compared to targets for three performance metrics, operating income, net revenues, and cash flow from operations so long as Ducommun exceeds an adjusted net income threshold of $10M. The performance metrics and their weightings are shown below.

The Compensation Committee chose these performance metrics because it believes that growth in these measures is essential to our objective of providing superior long-term total shareholder return. The Compensation Committee approves the threshold, target, and maximum goals for the financial performance measures, and the formula for funding the bonus pool, at the beginning of each year. These performance goals are set in line with our annual operating plan for the year.

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The Compensation Committee establishes a target annual cash incentive award for each named executive officer, expressed as a percentage of base salary. The 2021 annual operating plan approved by the Board contemplated that attainment of the maximum level of the cash flow from operations and operating income metrics would mark all-time record highs for Ducommun, thereby aligning management’s interests with those of shareholders. For 2021, target annual incentive award targets and actual payouts were as follows:

In establishing the annual cash incentive target amounts, the Compensation Committee considered the WTW compensation assessment, which indicated our annual cash incentive target percentages were appropriate relative to the market. Annual cash incentive payouts can range from zero to a maximum of three times the targeted percentage, depending on performance. A maximum of three times the targeted percentage is considered appropriate in recognition of the stretch nature of the performance goals, and the benefit bestowed on shareholders should they be attained.

Achievement of Performance Goals in 2021

In deciding actual payouts under the 2021 annual incentive plan, the Compensation Committee and Board first determined that Ducommun exceeded the adjusted net income threshold of $10M. The Compensation Committee then reviewed Ducommun’s performance against each metric established under the annual incentive plan to determine the award’s funding by metric, applied the appropriate weight to each metric and decided the actual funding for the 2021 annual incentive plan.

The table below depicts the threshold, target, and maximum goals for each metric under the 2021 annual incentive plan and our actual performance.

The Compensation Committee also reviewed and took into consideration several significant achievements and milestones, which are summarized below. No individual weightings were assigned to any one of these factors:

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The Compensation Committee used discretion and based its decisions regarding annual cash incentive payouts, on its informed judgment considering all of the above factors collectively, and made minor adjustments for one-time costs consistent with past practices. Despite the industry challenges confronting the business due to the delayed commercial aerospace recovery, unlike the prior year, the Compensation Committee decided not to provide relief to management under the annual cash incentive plan relating to any COVID-19 related market impacts to revenue, OI, cash or expenditures.

The annual cash incentive determination for each of the named executive officers is reflected in the table below.

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The graphs below show the year-over-year change in our named executive officers’ annual incentive compensation between 2020 and 2021.

CEO Annual Incentive Compensation 2019-2021   NEO Annual Incentive Compensation 2019-2021

Long-Term Incentives

The Compensation Committee granted long-term incentives in the form of performance stock units and restricted stock units to the named executive officers in 2021, allocated as follows:

CEO LTI Mix⁽¹⁾    Other NEO LTI Mix⁽¹⁾

Performance stock units encourage executives to pursue specific financial (and other) goals that the Compensation Committee believes will contribute to long-term shareholder value. All of the named executive officers received substantially more performance stock units than restricted stock units to reinforce our emphasis on performance-based compensation. Restricted stock units provide a direct ownership interest in Ducommun and a long-term incentive for the named executive officers to remain employed with us. In addition, restricted stock awards align executive and shareholder interests because they increase or decrease in value with changes to our stock price. Performance and restricted stock unit awards are the only forms of long-term compensation afforded to our executives as Ducommun does not maintain a pension plan for our CEO and NEOs.

In determining the aggregate value of long-term incentives to grant for 2021, the Compensation Committee considered the results of the WTW compensation assessment as to the value of long-term incentives provided at the 50^th percentile of our compensation peer group data and the 75^th percentile of the published survey compensation data. The awards to the named executive officers reflect a mix of performance-based and time-based long-term incentives that was generally

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consistent with the market and prevailing business conditions, although greater emphasis was placed on performance-based awards to further incentivize our executive officers to achieve the performance metrics thereunder. The Compensation Committee also considered the total prior long-term incentives granted by Ducommun and the number of shares available under our stock incentive plans.

For 2021, the Compensation Committee made the following long-term incentive grants to the named executive officers:

In 2020, Ducommun intentionally reduced equity grants to its named executive officers to manage share dilution in light of several combined factors, including but not limited to the COVID-19 pandemic and the grounding and delayed re-certification of the 737MAX, all of which temporarily impacted the Company’s stock price*. In 2021, in conjunction with Ducommun’s return to growth and year-over-year improvement in key metrics such as earnings, revenue, operating income and earnings per share, the Company’s stock price recovered, and equity awards returned to those levels that were consistent with historical practices**. In the context of this expected return to normalcy and growth, on a year-over-year basis, the value of long-term incentives granted to our CEO in 2021 increased on a year-over-year basis compared to 2020, and consistent with our pay-for-performance philosophy, ensured that a significant majority of our executive’s compensation is dependent on performance, thereby incentivizing the increases in earnings, revenues, operating income and an all-time high earnings per share, all to shareholders’ benefit. The value of the long-term incentives granted to our CEO and named executive officers is depicted in the graphs below:

CEO Long-Term Compensation 2019-2021   NEO Long-Term Compensation 2019-2021

Performance Stock Units (FY2021-FY2023 Performance Period)

The performance stock units awarded in 2021 may be earned based upon the achievement of annual adjusted diluted earnings per share targets during each year over a three-year performance period, subject to a relative total shareholder return modifier. The Compensation Committee chose diluted earnings per share as the performance metric to tie executive compensation directly to the annual and long-term growth in Ducommun’s earnings. The Compensation Committee chose the relative total shareholder return modifier in order to align executive compensation with shareholder value creation.

The performance stock units granted in 2021 will cliff vest at the end of the three-year performance period in an amount between 0% and 200% of the target units, as shown below.

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Adjusted Diluted Earnings Per Share

The Compensation Committee set the threshold and target adjusted diluted earnings per share levels to be consistent with the annual operating plan, with the target level increasing by 6% each year of the performance period, ensuring management is incentivized to improve adjusted diluted earnings per share relative to the end of 2021.

In the event our performance falls between two of the data points listed in the table above, the percentage of target performance stock units that vest will be determined by linear interpolation between the two data points, rounded to the nearest whole unit. Adjusted diluted earnings per share is calculated, as determined by the Compensation Committee, by adjusting diluted earnings per share to reflect changes in accounting standards, discontinued operations to exclude gain or loss on the sale of any business or product line, and to reflect any asset impairment write-offs or charges (whether of goodwill, intangible or tangible assets), transaction-related costs or expenses (including but not limited to the effects of Financial Accounting Standards Board Accounting Standards Codification Topic 805), debt refinancing costs, and restructuring and other non-recurring expenses.

Relative total shareholder return modifier

After the end of the three-year performance period, our relative total shareholder return will be calculated as compared to the Russell 2000 Index for the same performance period. As depicted in the table below, the total number of performance share units earned will then be determined by multiplying the number of units earned on the adjusted diluted earnings per share metric by a modifier between 0.75-1.25. The relative total shareholder return modifier will not be greater than 1.0 unless our absolute total shareholder return over the three-year performance period is positive, regardless of our relative ranking.

Relative Total Shareholder Return v. Russell 2000 Index

Performance Stock Units (FY2019-FY2021 Performance Period)

The three-year performance period for performance stock units awarded in 2019 ended on December 31, 2021. The threshold, target, and maximum performance levels for performance stock units awarded in 2019, and the actual performance in each of the years 2019 to 2021, were as follows:

Adjusted Diluted EPS ($) for Performance Stock Unit Determination

Because our relative total shareholder return compared to the Russell 2000 Index was in the 46^th percentile, the number of total shares earned was not adjusted due to the impact of the modifier, despite Ducommun achieving an historic diluted EPS of over $ 11.00 a share, a significant increase in shareholder value.

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CEO 2019 Performance Restricted Stock Unit Grant

In 2019, for the first time, our CEO was awarded performance restricted stock units subject to vesting based upon the achievement of revenue targets over a three-year performance period (from January 1, 2019 to December 31, 2021) established pursuant to the 2019 strategic plan approved by Ducommun’s Board of Directors, and which were granted to incentivize the achievement of long-term growth in the business. Following the end of the performance period, the Compensation Committee would determine the amount of revenue that was achieved by Ducommun relative to its strategic plan in the last year of the performance period, and the percentage and number of the performance restricted stock units earned as a result thereof. The following table summarizes the original revenue targets as a percentage and dollar value at threshold, target and maximum performance levels and the resulting payout levels:

Revenue

In 2019, during the first year of the performance period, Ducommun’s revenue growth was on track to yield eighty-seven percent (87%) of target payout percentage and sixty-two percent (62%) of the maximum payout percentage under the award. In 2020, and contrary to the assumptions used in establishing metrics under the 2019 strategic plan, commercial aerospace programs were severely impacted by the COVID-19 pandemic and the grounding of the 737MAX (which was Ducommun’s largest revenue program in 2019 of approximately $130  million), which in turn, affected Ducommun’s 2021 revenue growth as well. The total impact to 2021 revenue was $96 million, including $29 million relating to the 737MAX and $67 million from other commercial aerospace programs.

Despite the unforeseen impacts described above, the Compensation Committee made no adjustments to the targets as originally established under the 2019 grant. Instead, the Compensation Committee considered the value realized by shareholders over the past three years, including: (i) year-over-year revenue gains of approximately 2.6% in 2021 compared to 2020; (ii) Ducommun’s top-tier SG&A, especially at its corporate headquarters, demonstrating management’s continued strong cost management and effective spending controls, which in 2021, resulted in achieving year-over-year margin expansion with respect to EBITDA; and (iii) the net proceeds after taxes of greater than $110 million relating to the sale-leaseback transaction involving Ducommun’s Gardena, California performance center, resulting in record diluted earnings per share of $11.06 in 2021.

As a result of the foregoing achievements, the Compensation Committee used its discretion to award a total of 11,000 shares to our CEO under the 2019 PRSU grant. The resulting funding level lies below target yet above threshold, which reflects the Compensation Committee’s determination that our CEO’s individual achievements and performance in 2020 and 2021 of the performance period should be recognized in light of his positive impact on shareholder value. The fair value resulting from the award equated to $514,470, computed by determining the fair value of the award as of December 31, 2021.

CEO 2021 Performance Restricted Stock Unit Grant

At the beginning of 2021, our CEO was awarded performance restricted stock units that may vest based upon the achievement of revenue targets, shown below, over a three-year period (from January 1, 2021, to December 31, 2023), measured at the end of the last year of the performance period. Based on our 2021 revenues of $645 million, revenues would need to increase by approximately 25% for our CEO to achieve the maximum payout at the end of the performance period, which would provide significant shareholder value.

Revenues

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Timing of Long-Term Equity Grants

The Compensation Committee has implemented a process whereby all normal cycle long-term incentives are awarded by the spring of each year; long-term equity incentive grants in 2021 were consistent with this process. However, long-term incentive grants may be made at other times in the event of the new hire of an executive officer or a special award to recognize individual performance. In addition, the timing of the award of normal cycle long-term equity incentives may be changed in the future, as needed, to meet changing circumstances.

Severance and Change in Control Agreements and Practices

Ducommun has entered into a key executive severance agreement with each of the executive officers. These agreements (which are all substantially the same) provide for cash severance and double trigger equity acceleration if there is a qualifying termination in connection with a change in control, and limited cash severance if there is a qualifying termination outside the context of a change in control. Key executive severance agreements are considered to be a necessary in the recruitment and retention of qualified executives. We believe having severance agreements in place allows our executives to focus on shareholder interests when considering strategic alternatives because they provide some financial security in the event of an involuntary termination of employment. We do not provide gross-ups for taxes under these agreements. In connection with her retirement, Ms. Rogers entered into a retirement agreement with Ducommun that superseded and replaced her key executive severance agreement. Please refer to the section entitled “Potential Payments Upon Termination or Change of Control” below for further discussion of these agreements.

Clawback Policy

We have a clawback policy that applies in the event the Board determines there has been a restatement due to material noncompliance with financial reporting requirements under U.S. generally accepted accounting principles or SEC rules. In the event of such a restatement, the Board has the right, for the benefit of Ducommun, to recover all incentive payments and all vested performance-based equity awards made to executive officers who are found personally responsible for the material restatement, to the extent that such payments and vested awards were higher than they should have been because of the inaccurate financial statements. The clawback policy applies to incentive payments and vested performance-based equity awards made to executive officers after October 28, 2016.

Securities Trading Policy: Prohibition on Pledging and Hedging

To align the interests of our directors, officers, and employees, including our named executive officers, with our shareholders, our Insider Trading Policy does not permit any director, officer, or employee of Ducommun to either margin our securities or pledge Company securities as a loan or to engage in any hedging transactions involving our securities. Hedging includes the purchase or sale of financial instruments that are designed to hedge or offset any decrease in the market value of securities, including prepaid variable forward contracts, equity swaps, collars, and exchange funds.

Other Compensation

Other compensation and personal benefits paid or made available to the named executive officers are not material. We provide a non-qualified deferred compensation plan and automobile allowance to our named executive officers, as well as medical, dental, life and other insurance benefits. In addition, the named executive officers receive 401(k) matching contributions on the same basis as our other employees. However, we do not provide any pension or supplemental retirement benefits to our named executive officers.

Director and Officer Stock Ownership Policy

In August 2020, the Compensation and Corporate Governance and Nominating Committees of the Board adopted a stock ownership policy that requires certain of our executive officers to acquire and hold shares of our stock equal in value to a multiple of their annual salary as follows:

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Under the policy, a participant’s stock ownership will be valued based on the average trading price of Ducommun’s stock over a twelve-month period ending on December 31 of each year. Executive officers have five years from the later of the adoption of the policy in August 2020 or their initial election to meet this stock ownership guideline. All of the named executive officers are either in compliance, or have additional time in which to comply, with the stock ownership guideline as of December 31, 2021.

Compensation Risk Assessment

The Compensation Committee reviews the risks associated with our compensation policies and practices for executive officers and employees generally. The Compensation Committee did not identify any risks arising from these policies and practices that are reasonably likely to have a material adverse effect on us. In the course of its review, the Compensation Committee considered various features of our compensation policies and practices that discourage excessive risk taking, including those outlined below.

Tax Deductibility and Gross-Ups

Section 162(m) of the Internal Revenue Code places a limit of $1 million on the amount of compensation that we may deduct as a business expense in any year with respect to certain of our most highly paid executive officers. Prior to the enactment of the 2017 Tax Cuts and Jobs Act, there had been an exemption from this $1 million deduction limit for compensation payments that qualified as “performance-based” under Section 162(m). With the enactment of the 2017 Tax Cuts and Jobs Act, however, the performance-based compensation exemption has been eliminated, except with respect to certain grandfathered arrangements. While the Compensation Committee considers the deductibility of compensation as one factor in determining executive compensation, the Compensation Committee believes that it is in the best interests of our shareholders to maintain flexibility in our approach to executive compensation and to structure a program that we consider to be the most effective in attracting, motivating and retaining key executives.

The change in control provisions described in the section entitled “Severance and Change in Control Agreements and Practices” could subject an executive to an excise tax on an “excess parachute payment” under Internal Revenue Code Section 4999. Ducommun does not provide any gross-up to its executives for any excise tax due under this section of the Internal Revenue Code.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” set forth above with management. Based on these reviews and discussions, the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference into Ducommun’s Annual Report on Form 10-K for the year ended December 31, 2021.

Submitted by the Compensation Committee,

Dean M. Flatt–Committee Chair
Shirley G. Drazba
Jay L. Haberland

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2021 Summary Compensation Table

The Summary Compensation Table and the other tables which follow disclose (in accordance with SEC rules) the compensation for the years ended December 31, 2021, 2020 and 2019 awarded to, earned by or paid to the Named Executive Officers. Columns have been omitted from the table when there has been no compensation awarded to, earned by or paid to any of the Named Executive Officers required to be reported in that column in any year covered by the table.

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2021 Grants of Plan-Based Awards Table

The following table provides information on the 2021 Bonus Plan and the award of performance stock units (“PSU”s) and restricted stock units (“RSU”s) to the named executive officers during 2021: