Simpson Manufacturing (SSD) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.)

Filed by the Registrant ☒

Check the appropriate box:

Letter to Stockholders

Notice of 2024 Annual Meeting of Stockholders

Table of Contents

Proxy Summary

In June 2023, Chau Banks and Felica Coney were appointed to the Board in anticipation of Jennifer Chatman and Robin MacGillivray not standing for re-election at the 2024 Annual Meeting of Stockholders.

In January 2024, in connection with the Company’s regular Board and Committee composition review and rotation plan and based on the recommendation of the Nominating and ESG Committee, the Board elected Phil Donaldson to serve as Chair of the Board, effective May 1, 2024, subject to his re-election to the Board at the Annual Meeting. Mr. Andrasick, our current Chair, will continue to serve as a director on the Board, also subject to his re-election at the Annual Meeting.

We are committed to maintaining the highest standards of corporate governance. The Board has built a strong and effective governance framework, which has been designed to promote the long-term interests of stockholders and support Board and management accountability.

We have established deeply rooted core values that define our business. Our founder, Barclay Simpson, outlined nine essential attributes for company and employee success. Those “Nine Principles of Business” are our company values, and we continue to uphold them.

At the forefront of these values is doing what is right for our employees’ safety and well-being, as well as for our customers, communities and environment. We honor the Nine Principles of Business through our involvement in our local communities and efforts to help protect our environment.

As previously disclosed, effective January 1, 2023, following the appointment of Michael Olosky as President and Chief Executive Officer (“CEO”), the executive officers were as follows:

In October 2023, we announced that Kevin Swartzendruber, Senior Vice President, Finance, intended to retire effective March 1, 2024, and that retirement has occurred.

Effective December 1, 2023, Cassandra Payton was appointed as Executive Vice President, General Counsel.

Below we highlight certain of our executive compensation policies and practices, including both those which we utilize to drive performance and those which we prohibit because we do not believe they would serve our stockholders’ long-term interests.

Simpson’s executive compensation philosophy emphasizes pay-for-performance. Our philosophy is to provide executive compensation opportunities that are competitively positioned in light of appropriate

comparative market data for companies similar to us in terms of revenue size and industry. Our incentive plans are designed to reward strong performance, with greater compensation paid when performance exceeds expectations and less compensation paid when performance falls below expectations. Thus, the actual compensation realized by our Named Executive Officers (“NEOs”) will be commensurate with the Company’s actual performance.

Our Compensation and Leadership Development Committee regularly reviews our executive compensation program’s components, targets and payouts to support the strength of our pay-for-performance alignment. Our performance is evaluated against both short-term goals, which support Simpson’s business strategy, and long-term goals, which measure the creation of sustainable stockholder value.

At our 2023 Annual Meeting of Stockholders, Simpson again received strong support for its NEO compensation programs, with over 99.5% of votes cast approving, on an advisory basis, our NEO compensation. In 2023, as in prior years, the Compensation and Leadership Development Committee considered input from our stockholders and other stakeholders as part of its annual review of Simpson’s executive compensation program.

Please see the “Compensation Discussion & Analysis” section in this Proxy Statement for a detailed description of our NEO compensation programs.

As part of its oversight of the Company’s executive compensation program, the Compensation and Leadership Development Committee reviews and considers any potential risk implications created by compensation. The Compensation and Leadership Development Committee believes that the executive compensation program is designed with the appropriate balance of risk and reward in relation to the Company’s overall business strategy and that the balance of compensation elements does not encourage excessive risk taking. The Compensation and Leadership Development Committee will continue to consider compensation risk implications, as appropriate, in designing any new executive compensation components. In connection with its ongoing risk assessment, the Compensation and Leadership Development Committee notes the following attributes of the executive compensation program:

The Compensation and Leadership Development Committee also has oversight over the Company’s responsibility to review significant Company compensation policies and procedures, including the incentives that they create, to assess risk. At the Compensation and Leadership Development Committee’s direction, the Company’s Human Resources Department, in partnership with Meridian, the Compensation and Leadership Development Committee’s independent consultant, annually conducts a risk assessment of the Company’s compensation programs. Based on the most recent assessment, management has concluded that the compensation policies and practices of the Company and its subsidiaries for employees do not create risks that are reasonably likely to have a material adverse effect on the Company, and management has presented the results of its assessment to the Compensation and Leadership Development Committee.

Corporate Governance

Our Board maintains a strong commitment to corporate governance and has implemented policies and procedures that we believe are among the best practices in corporate governance.

We maintain a corporate governance section on our website which contains copies of our principal governance documents. The corporate governance section, which may be found at www.ir.simpsonmfg.com under “Investor Relations - Corporate Governance,” includes, among others, the following documents:

Unless otherwise directed, the persons named as proxies on the enclosed proxy card intend to vote “FOR” the election of each of the nominees. If any nominee should become unavailable for election, the shares will be voted for such substitute nominee as may be proposed by our Board. However, we are not aware of any circumstances that would prevent any of the nominees from serving.

Our Charter provides that all directors shall be elected annually for a term expiring at the next succeeding annual meeting of stockholders or until their respective successors are duly elected and qualified. Accordingly, on the recommendation of our Nominating and ESG Committee, our Board nominates James Andrasick, Chau Banks, Felica Coney, Gary Cusumano, Philip Donaldson, Celeste Volz Ford, Kenneth Knight, and Michael Olosky who will stand for election as directors at this year’s Annual Meeting, each for a term extending until our 2025 Annual Meeting of Stockholders. All director nominees are current directors of the Company who were previously elected by stockholders, except for Chau Banks and Felica Coney, who were appointed to the Board effective June 1, 2023.

In nominating individuals to become members of the Board, the Nominating and ESG Committee considers the experience, qualifications, attributes and skills of each potential member. Each nominee brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas.

The Nominating and ESG Committee and the Board considered the following information, including the specific experience, qualifications, attributes or skills of each individual, in concluding each was an appropriate nominee to serve as a member of our Board for the term commencing at the Annual Meeting (ages are as of March 8, 2024).

In identifying director candidates, the Board seeks to achieve a mix of members who collectively bring significant value to the Company through their experience and personal backgrounds relevant to Simpson’s strategic priorities and the scope and complexity of our business and industry. In light of Simpson’s strategic priorities, and based on its self-assessment, the Board identified key skills and experiences for director candidates that include, but are not limited to, current public company senior executive and board experience in managing a diversified enterprise, industry experience or understanding, an appreciation of the impacts of rapidly changing technologies and experience in managing and expanding business outside of the United States, especially in Europe. To complement its oversight responsibilities, the Board also identified implementing or overseeing company growth, experience in information technology and cyber matters, strategy development, mergers and acquisitions and operations experience as key Board skills. In addition, each candidate should:

Board Diversity

Director Tenure

The Board’s Role and Responsibilities

The Board’s Key Responsibilities include:

As part of its oversight function, the Board is actively involved in overseeing risk management. In connection with overseeing risk management, the Board exercises its oversight responsibility with respect to key external, strategic, operational and financial risks through the committees of the Board and discusses the effectiveness of current efforts to mitigate certain focus risks as identified by senior management and the Board.

Our Nominating and ESG Committee generally oversees the Company’s environmental, social and governance (ESG) goals and objectives, and supports the implementation of the Company’s ESG priorities. Specific ESG topics are overseen by other committees generally responsible for the subject matter. For example, the Audit and Finance Committee has oversight responsibility for certain aspects of the environmental and social aspects of ESG, and the Compensation and Leadership Development Committee has oversight responsibility for certain aspects of the social aspects of ESG.

Although the Board is ultimately responsible for risk oversight, the Board is assisted in discharging its risk oversight responsibility by the Audit and Finance, the Compensation and Leadership Development, the Nominating and ESG and the Corporate Strategy and Acquisitions Committees. Each committee oversees management of risks, including, but not limited to, the areas of risk summarized below, and periodically reports to the Board on those areas of risk:

In an effort to continuously improve our governance and compensation practices, our Board is firmly committed to constructive engagement with our stockholders and regularly reviews and responds to their expressed views.

The Board places considerable weight on stockholder feedback in making decisions impacting our governance processes and compensation programs. Increased dialogue with our stockholders has led to meaningful changes in our corporate governance, environmental, social and executive compensation policies and practices, such as those highlighted below.

New directors are oriented to our business and governance through meetings with our officers and directors and visits to our facilities. We also support and pay for participation in continuing education programs to assist directors in performing their Board responsibilities.

Our Board recognizes the critical role of annual Board and committee evaluations in ensuring the Board and each committee are functioning effectively. The Board has a regular practice of assessing its own effectiveness as well as the diversity of skill sets of its members, the alignment of areas of expertise with the Company’s strategy and priorities, and stewardship of company performance. The evaluation process also includes periodic evaluations by a third-party facilitator. To that end, in 2023, at the recommendation of the Nominating and ESG Committee, the Board engaged Heidrick & Struggles to administer an independent third-party evaluation consisting of both survey data and one-on-one interviews with each director. As of the date of this Proxy Statement, that process is ongoing. When complete, the findings will be aggregated, analyzed and reported to the full Board collectively and specific feedback will be provided to each individual director.

Throughout our organization, we have core values that shape our approach to business. Our Board, through its Nominating and ESG Committee oversees the Company’s environmental and social strategy. Management provides the Nominating and ESG Committee with an update on environmental and social matters at each of its regular quarterly meetings.

Internally, environmental, social and governance risks and opportunities are managed by the legal department, and, our ESG Steering Committee oversees and guides our environmental and social priorities and performance.

Sustainability and environmental and social responsibility are integral components of our business strategy. We evaluate environmental and social risks and opportunities and, based on our analysis, we enact initiatives to drive improvement and generate business value. Our Annual CSR (Corporate Social Responsibility) Report provides a comprehensive review of our extra financial strategy. This report also outlines the steps we take to benefit our shareholders, customers, employees, suppliers and the communities in which we operate.

We take a holistic approach to managing our environmental and social impact. We have policies and procedures in place that outline environmental and social expectations for our suppliers. Within our operations, we have set both EHS (Environmental, Health & Safety) and DE&I (Diversity, Equity & Inclusion) goals to drive our performance. Further, we commit to continuously improving our energy, water and waste profile. In our downstream operations, our products are instrumental in keeping structures strong during natural disasters such as hurricanes and seismic events. Increasingly, we are innovating to create products that restore and strengthen concrete structures, reducing the greenhouse gas emissions resulting from both demolition and construction. Finally, through our mass timber capabilities, we innovate to increase the use of sustainable materials in construction.

You can find additional details regarding our environmental and social efforts and other related programs in our CSR Report on our website at https://simpsonmfg-esg.metrio.net/.

The Board believes that attracting, developing and retaining employees is vital to Simpson’s continued success. Our Board is actively involved in our human capital management in its oversight of our long-term strategy and through its committees and engagement with management. Our focus on talent management stretches from the board level to our approximately 5,500 associates through programs overseen by management and reported on to the Board that are designed to identify, train and grow future leaders.

We strive to have a diverse culture of employees of various ages, genders, ethnicities and abilities. Our commitment to diversity and inclusion starts at the top with a highly skilled and diverse board. As of December 31, 2023, women held 33% of the Company’s top five executive positions and board seats, helping to pave the way for gender diversity in corporate leadership.

Simpson’s compensation philosophy is to be able to attract, retain, motivate, and differentiate employees through its rewards programs. We believe people should be paid for what they do and how they do it, regardless of their gender, race, or other personal characteristics and are committed to internal pay equity. Our Compensation and Leadership Development Committee monitors the relationship between the pay received by our executive officers and non-managerial employees. We believe our compensation philosophy and strategy are strongly aligned with our corporate strategic priorities and our vision for stockholder value creation.

In addition to our financial compensation, we offer a health and wellness package to our employees, which we designed to provide options for their individual and/or family needs. In addition, in an effort to continue to attract, retain, and motivate our workforce, in the United States, we offer remote and flexible work packages for positions that allow for remote work. We continue to engage our partners and benefits consultants to ensure our health and wellness package continues to meet the needs of our diverse workforce today and into the future.

A vital part of our business is providing our workforce with a safe, healthy and sustainable working environment. Our Environmental, Health and Safety program focuses on implementing change through our employee observation feedback channels to recognize risk and continuously improve our processes. We also conduct regular risk reviews and self-audits at our manufacturing facilities around the world to explore new opportunities to reduce potential employee exposure to occupational injuries.

Simpson is committed to giving back to our communities through four key areas:

Stockholders or other interested persons may send written communications to the independent members of our Board, addressed to Board of Directors (Independent Directors), c/o Simpson Manufacturing Co., Inc., 5956 W. Las Positas Blvd., Pleasanton, California 94588.

In general, it is not the Company’s practice to make financial or in-kind political contributions with corporate assets, even when permitted by applicable law, and no such contributions were made during 2023. The Company complies with all applicable state and federal laws related to the disclosure of lobbying activities, and no such activities occurred during 2023.

Since before our initial public offering in 1994, the roles of our Board Chair and our Chief Executive Officer have been separated. We believe that this is appropriate under current circumstances, because it allows management to make the operating decisions necessary to manage the business, while helping to keep a measure of independence between the oversight function of the Board and operating decisions. We feel that this has provided an appropriate balance of operational focus, flexibility and oversight.

Because an independent director currently serves as Chair of our Board, we do not separately have a Lead Independent Director. Mr. Andrasick, as Chair of the Board, participates in setting the agenda of Board and committee meetings, facilitating communications among members of the Board and management, leading the Board self-evaluation process, and maintaining the focus and punctuality of Board and committee meetings. In addition, the Chair’s role also includes leading the efforts in evaluating our Chief Executive Officer and in succession planning, considering Board committee membership and leadership, and presiding at annual meetings of stockholders.

In January 2024, in connection with the Company’s regular Board and Committee composition review and rotation plan and based on the recommendation of the Nominating and ESG Committee, the Board elected Phil Donaldson to serve as Chair of the Board, effective May 1, 2024, subject to his re-election to the Board at the Annual Meeting. Mr. Andrasick, our current Chair, will continue to serve as a director on the Board, also subject to his re-election at the Annual Meeting.

Pursuant to the NYSE listing standards, our nonemployee directors regularly meet in executive sessions without members of management present. In 2023, our current Board Chair, Mr. Andrasick, presided over these executive sessions.

The Board has adopted an anti hedging and anti pledging policy. Directors, officers, and employees of the Company or any subsidiary of the Company, as well as their designees, are generally prohibited from: (a) purchasing any financial instruments or engaging in any transactions that are designed to hedge or offset or have the effect of hedging or offsetting any decrease in the market value of our equity securities (such as our common stock), including, without limitation, prepaid variable forward contracts, equity swaps, collars, exchange funds and transactions with economic consequences comparable to the foregoing financial instruments; and (b) further pledging our equity securities as collateral for a loan, purchasing such securities on margin, or holding such securities in a margin account.

The standing committees of our Board are the Audit and Finance Committee, the Compensation and Leadership Development Committee, the Corporate Strategy and Acquisitions Committee and the Nominating and ESG Committee. The Board appoints members of the committees and each committee operates under a written charter approved by the Board.

With the exception of the Corporate Strategy and Acquisitions Committee all of our standing committees are composed entirely of independent directors. Attendance at committee meetings is open to every director, regardless of whether he or she is a member of such committee.

The table below sets forth our directors’ Board committee membership effective May 1, 2024 (subject to each directors’ re-election to the Board at the Annual Meeting):

The members of the Compensation and Leadership Development Committee during 2023 were Gary Cusumano (Chair), James Andrasick, Chau Banks, Jennifer Chatman and Robin MacGillivray. All members of our Compensation and Leadership Development Committee are independent in accordance with NYSE listing standards. No member of the Compensation and Leadership Development Committee (1) was, during the year ended December 31, 2023, or had previously been, an officer or employee of Simpson or any of its subsidiaries, or (2) had any material interest in a transaction of Simpson or a business relationship with, or any indebtedness to, Simpson. No interlocking relationship existed during the year ended December 31, 2023 between any member of the Board or the Compensation and Leadership Development Committee and an executive officer of Simpson.

The Compensation and Leadership Development Committee has the authority under its charter to retain or obtain the advice of advisers, including compensation consultants, as it may deem appropriate. In accordance with this authority, the Compensation and Leadership Development Committee has engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant to provide it with objective and expert analysis, advice and information with respect to executive compensation. Our Compensation and Leadership Development Committee regularly reviews its executive compensation consulting needs and periodically invites compensation consulting firms to discuss these executive compensation needs with the Compensation and Leadership Development Committee. This process enables the Compensation and Leadership Development Committee to reevaluate its compensation consultant and take a fresh look at our compensation practices and policies.

All executive compensation services provided by Meridian were conducted under the direction or authority of the Compensation and Leadership Development Committee. In addition to compensation consultants, members of our Human Resources and Finance Departments support the Compensation and Leadership Development Committee in its work. Meridian was engaged by the Compensation and Leadership Development Committee to provide services including:

Except for Mr. Knight, the Chief Executive Officer of Invitae Corporation, which filed a petition for bankruptcy on February 13, 2024 in the U.S. Bankruptcy Court for the District of New Jersey, to our knowledge, none of our executive officers or directors has been involved in any of the following events during the past ten years: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being a named subject to a pending criminal proceeding (excluding traffic violations and minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type

of business, securities or banking activities; (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law; (5) being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law or regulation; (ii) any law or regulation respecting financial institutions or insurance companies, including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (6) being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section (1a)(40) of the Commodity Exchange Act), or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons associated with a member.

We have adopted a written Related Person Transactions Policy applicable to any individual transaction or series of related-person transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which:

Pursuant to the Related Party Transactions Policy, the Nominating and ESG Committee or entire Board, as applicable, is responsible for review, approval, and ratification of transactions between the Company, its branches or subsidiaries and related persons and members of our leadership team as designated by the Nominating and ESG Committee or Board from time to time. In accordance with the Related Party Transactions Policy, except for pre-approved transactions, if a transaction involves a covered employee (or an immediate family member thereof) and is valued at less than $1 million, then a transaction review committee (the “TRC”), which serves as an advisory committee of the Company and generally includes our Chief Financial Officer, or his or her designee, and our outside counsel (provided that if the Chief Financial Officer is a related party, he or she will be replaced by another officer of the Company), will make recommendations to the Nominating and ESG Committee and the Nominating and ESG Committee will decide whether to approve or ratify the transaction; and if a transaction involves a director or 5% stockholder (or an immediate family member thereof) or involves a covered employee (or an immediate family member thereof) but is valued at $1 million or more, the TRC will make recommendations to the Board, and the Board will decide whether to approve or ratify the transaction (provided that no director shall participate in any discussion or approval of a transaction for which he or she or any of his or her immediate family members is involved). In determining whether to approve, ratify or disapprove a related party transaction, the Nominating and ESG Committee or Board will consider, among other factors, whether the transaction is entered into on terms no less favorable to us than terms generally available to an unaffiliated third-party under the same or similar circumstances; the results of an appraisal, if any; whether there was a bidding process and the results thereof; review of the valuation methodology used and alternative approaches to valuation of the transaction; and the extent of the related person’s interest in the transaction. There were no transactions found to be directly or indirectly material to a related person required by SEC rules to be disclosed in this Proxy Statement.

In 2023, annual retainers, committee membership and chair fees were paid quarterly or upon appointment to a committee as a member or as a chair position.

In addition to the annual board retainer, our nonemployee directors also receive a grant of vested shares with a value of approximately $115,000. The number of shares granted to each director is based on the average trading price of our common stock on the NYSE for 60 trading days prior to a set date, recommended by the Nominating and ESG Committee, and approved by the Board, leading up to the grant date.

The Chair of the Board also receives an additional grant of vested shares with a value of approximately $38,500.

The table below summarizes the compensation earned by or paid to our nonemployee directors for the year ended December 31, 2023.

As of December 31, 2023, our nonemployee directors held no unvested stock awards or outstanding option awards with respect to our common stock.

We are asking our stockholders to vote on an advisory basis to approve the compensation of our Named Executive Officers (or “NEOs”) (sometimes referred to as “Say on Pay”) as required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We conduct our Say on Pay votes annually, and, after the Annual Meeting, the next required Say on Pay vote is expected to occur at the 2025 Annual Meeting of Stockholders. The Board recommends a vote “FOR” this proposal because it believes that our compensation policies and practices are effective in achieving Simpson’s philosophy of providing compensation that:

For the reasons discussed in the “Compensation Discussion & Analysis,” accompanying compensation tables and related narrative disclosures in this Proxy Statement, the Board unanimously recommends that stockholders vote “FOR” the following resolution:

Although the resolution is non-binding, the Board and Compensation and Leadership Development Committee consider the outcome of the vote when making future compensation decisions.

The following profiles provide the relevant experience, age, executive officer and company tenure with Simpson of our current executive officers.

The profile for Michael Olosky, our President and Chief Executive Officer and a director nominee, is set forth above under “2024 Nominees.”

As previously disclosed, effective January 1, 2023, following the appointment of Michael Olosky as President and CEO, the executive officers were as follows:

In October 2023, we announced that Kevin Swartzendruber, Senior Vice President, Finance, intended to retire effective March 1, 2024, and that retirement has occurred.

Effective December 1, 2023, Cassandra Payton was appointed as Executive Vice President, General Counsel.

The Company focuses on designing, manufacturing, and marketing systems and products to make buildings and structures safe and secure. The Company, through its subsidiaries, designs, engineers, and manufactures structural construction products, including connectors, truss plates, anchors, fasteners and other products, and differentiates itself from competitors by designing and marketing end-to-end wood and

concrete construction product lines. The Company also provides engineering services in support of some of its products and increasingly offers design and other software that facilitates the specification, selection and use of its products. The Company believes that its primary operating brand – the Simpson Strong-Tie brand – benefits from strong brand name recognition among architects and engineers who frequently request the use of the Company’s products. The nature of our industry demands that we adhere to a focused strategy to build stockholder long-term value over time. During 2023, our management team continued to execute against the strategic goals set by the Board, which resulted in increases in net sales and return on invested capital (“ROIC”) above our peer group median for our stockholders.

Our key 2023 performance highlights are set forth below:

Net sales increased in each of 2021, 2022 and 2023. 2021 net sales increased 24.1% primarily due to higher average unit prices in North America and to a lesser extent, higher sales volumes. 2022 net sales increased 34.5% primarily due to significant product price increases implemented in 2022, market share gains, and the addition of the ETANCO Group (“ETANCO”), which contributed $212.6 million in net sales. 2023 net sales increased 4.6% primarily due to the acquisition and integration of ETANCO.

Operating margins have improved since 2019, but declined in 2022 from 2021 due to increased material costs and integration and other costs associated with the ETANCO acquisition, and stayed relatively flat from 2022 to 2023.

ROIC declined in 2022 from 2021 due to increased invested capital associated with the long-term debt to finance the ETANCO acquisition, and in 2023 from 2022 due to increased invested capital associated with increases in equity as a result of net income less both dividends paid and share repurchases, and partially offset by reduced long-term debt.

Invested capital has increased 80.6% from 2021 through 2023 reflecting the addition of long-term debt and a 15.3% compounded annual growth rate in net income offset by the company returning capital to stockholders in the form of dividends and share repurchases over the same period. Capital returned to stockholders for each of the three years 2021, 2022 and 2023 was approximately $65.7 million, $122.5 million, and $95.2 million respectively.

The following chart shows the Company’s performance against the S&P 500, the Dow Jones U.S. Building Materials & Fixtures Index and our compensation peer group (as identified below) in terms of total stockholder returns (“TSR”) delivered to our stockholders in 2023.

Our NEOs’ compensation generally is comprised of three core components – (1) base salary, (2) short-term cash awards, and (3) long-term equity awards, which are structured to complement each other and establish a balanced and performance-based pay structure. The overarching goals of our compensation programs for 2023 were to attract, motivate and retain our employees, including our management team, establish a strong sense of ownership, and closely align our executives’ and employees’ interests with those of our stockholders. The target compensation mixes for 2023 for our CEO and, on average, our other NEOs are set forth below:

The 2023 compensation results for our NEOs continued to reflect the CLDC’s pay-for-performance philosophy, which includes, among other factors, aligning executive compensation directly with our operational and financial performance.

The EOCPS program is based on both quarterly and annual performance measurements of operating income. The CLDC also incorporates a performance modifier into the EOCPS plan design, which measures performance against individual Management by Objective (“MBO”) goals.

All NEOs paid out from 162% to 190.4% of their target.

In 2023, our CEO was granted equity awards with a target grant date total value of approximately $2,400,000, and our other NEOs were granted equity awards with target grant date values from approximately $420,000 to approximately $696,000. The target equity award value was delivered 35% in the form of time-based restricted stock units (“RSUs”) and 65% in the form of performance-based restricted stock units (“PSUs”). These PSUs are fully “at-risk” and will vest only on achievement of revenue growth and ROIC performance metrics in a 2023-2025 measurement period. The awards are forfeited if the threshold performance goals are not met, and the maximum amount of shares that may potentially vest under these PSUs (if and when the highest-tier performance goals are met) are capped at 200% of the target shares. The RSUs are generally subject to a three-year vesting period with the RSUs vesting in equal annual installments on the first, second and third anniversaries of the vesting start date (as determined by the CLDC), respectively.

Our overall compensation philosophy is to align the interests of our employees and stockholders and provide employees, including our management, incentives to increase stockholder value. To this end, we seek to generally position our NEOs’ total target compensation at market competitive levels, based on comparative market data for companies similar to us in terms of revenue size and industry. However, we use this data only as a market check on our compensation decisions, and not to formally benchmark elements of NEO compensation. We aim to compensate our NEOs appropriately relative to our performance. To achieve these objectives under our pay-for-performance guiding principal, we created compensation programs that reward achievement of specific performance goals, such as operating income, revenue growth and ROIC. We believe that our current compensation programs allow us to attract high-performing employees and help us retain the services of employees whose contributions are instrumental in achieving our strategies. The CLDC and the Board regularly review and refine our executive compensation programs to help ensure that such programs continue to reflect policies and practices that are aligned with our pay-for-performance philosophy and the interest of our stockholders.

The CLDC develops and updates our compensation policies and practices, oversees our compensation programs, sets performance goals relevant to such programs, evaluates our performance in light of such goals, and determines and exercises discretion over executive compensation, including reviewing and approving annual compensation of our NEOs. The CLDC does not delegate its role in determining executive compensation. Our officers do, however, participate in our annual budgeting process, which forms the basis for the CLDC to set, and determine the achievement of, the performance goals under our compensation programs. The Board reviews and approves the annual budget, and based on that, the CLDC approves both cash EOCPS payouts and equity-based awards to our NEOs. Our CEO provides significant input in recommending the structure of our pay programs and recommending any adjustments to the other NEOs’ base salary and target incentive compensation opportunities. The CLDC can accept, reject or modify the CEO’s recommendations as it sees fit, subject to the terms of any applicable program documentation.

The CLDC has engaged, and expects to continue to engage, independent advisers, including independent compensation consultants, from time to time to assist in carrying out its responsibilities. The specific services provided by Meridian to us in 2023 consisted of: reviewing our peer group and comparative compensation analysis, assessing the appropriateness and competitiveness of our executive compensation program as compared to those of the peer group, recommending changes to our executive compensation programs, and evaluating our executive and director compensation.

In late 2023 and early 2024 we continued our annual engagement with our stockholders. This engagement gave us a basis for further evaluation of our practices in executive compensation and corporate governance. This initiative was led by the Board and senior management, by reaching out to stockholders holding 72% of our outstanding shares. Out of those stockholders who elected to engage with us (representing approximately 36% of our outstanding shares), we organized follow-up calls. This outreach reflects our commitment to understand and address key issues of importance to our stockholders. In line with the high support for our executive compensation program as expressed in the 2023 annual stockholder advisory vote to approve our NEO compensation, stockholders continued their support for our compensation program. This strong level of support led our CLDC to conclude that material changes in our executive compensation design, solely due to the outcome of the Say-on-Pay vote, were not warranted for 2024.

Previously, following the 2023 Annual Meeting of Stockholders, we also actively engaged with numerous stockholders on matters of corporate governance, executive compensation and related matters. These efforts were led by the Chair of our Board and our Chief Financial Officer to help ensure a direct line of communication between the Board and our stockholders. We also continue to work with Meridian to monitor changes in executive compensation to keep our executive compensation program aligned with both our business strategy and best practices in our competitive market.