LEGGETT & PLATT, INCORPORATED Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Approval of 2022 Base Salaries for Named Executive Officers
On
2021 Annual 2022 Annual
Base Salary Base Salary
Named Executive Officers1 Rate Rate
J. Mitchell Dolloff, President & CEO $ 800,000 $ 1,120,000
Karl G. Glassman, Executive Chairman $ 1,225,000 $ 750,000
Jeffrey L. Tate, EVP & CFO $ 600,000 $ 618,000
1 The 2022 annual base salary rates for Mr. Dolloff and Mr. Glassman
were set by the Committee and the independent directors of the
Company's Board in November 2021 .
Setting of 2022 Target Percentages under the Key Officers Incentive Plan for Named Executive Officers
The named executive officers will be eligible to receive an annual cash
incentive under the 2020 Key Officers Incentive Plan (the "KOIP"), which was
filed
2021 KOIP 2022 KOIP
Target Target
Named Executive Officers1 Percentage Percentage
J. Mitchell Dolloff, President & CEO 100 % 125 %
Karl G. Glassman, Executive Chairman 125 % 100 %
Jeffrey L. Tate, EVP & CFO 80 % 80 %
Steven K. Henderson , EVP, President - Specialized
Products and Furniture, Flooring & Textile
Products 80 % 80 %
Scott S. Douglas , SVP - General Counsel &
Secretary 70 % 70 %
1 The 2022 KOIP Target Percentages for Mr. Dolloff and Mr. Glassman
were set by the Committee and the independent directors of the
Company's Board in November 2021.
Attached and incorporated herein by reference as Exhibit 10.1 is the Company's updated Summary Sheet of Executive Cash Compensation.
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Adoption of 2022 Award Formula under the Company's Key Officers Incentive Plan
Our executive officers earn an annual cash incentive paid under the KOIP, based
on achieving certain performance objectives for the year. On
Relative
Participant Type Performance Objectives Weight
Corporate Participants Return on Capital Employed (ROCE) 60%
(Dolloff, Glassman, Tate & Douglas) Cash Flow 40%
Profit Center Participants ROCE 60%
(Henderson) Free Cash Flow (FCF) 40%
Corporate Participants.
Below are the 2022 Corporate Targets and Payout Schedule. Payouts will be interpolated for achievement levels falling between those in the schedule. Financial results from acquisitions are excluded from the calculations in the year of acquisition. Financial results from divestitures will be included in the calculations; however, the ROCE and Cash Flow targets relating to the divested businesses will be prorated to reflect only that portion of the year prior to the divestiture. Financial results from businesses classified as discontinued operations will be included in the calculations. Financial results will exclude (i) certain currency and hedging-related gains and losses; (ii) gains and losses from asset disposals; and (iii) items that are outside the scope of the Company's core, on-going business activities.
ROCE and Cash Flow are adjusted for all items of gain, loss or expense for the fiscal year, as determined in accordance with standards established under Generally Accepted Accounting Principles, (i) from non-cash impairments; (ii) related to loss contingencies identified in footnotes to the financial statements in the Company's 2021 Form 10-K; (iii) related to the disposal of a segment of a business; or (iv) related to a change in accounting principle.
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2022
Corporate Targets and Payout Schedule
ROCE Cash Flow
Achievement Payout Achievement Payout
<28.1% 0% <$476.25M 0%
28.1% 50% Threshold $476.25M 50%
37.5% 100% Target $635M 100%
46.9% 150% Maximum $793.75M 150%
Profit Center Participants.
Below are the 2022 Profit Center Targets and Profit Center Payout Schedule for
Financial results will exclude (i) results from non-operating branches, (ii) certain currency and hedging-related gains and losses, (iii) gains and losses from asset disposals, (iv) items that are outside the scope of the Company's core, on-going business activities or relating to any other special events or change in business conditions, and (v) the impact of corporate allocations.
ROCE and FCF are adjusted for all items of gain, loss or expense for the fiscal year, as determined in accordance with standards established under Generally Accepted Accounting Principles, (i) from non-cash impairments; (ii) related to loss contingencies identified in footnotes to the financial statements in the Company's 2021 Form 10-K; (iii) related to the disposal of a segment of a business; or (iv) related to a change in accounting principle.
2022 Profit Center Targets 2022 Profit Center Payout Schedule
ROCE ROCE/FCF
Segments Target FCF Target Achievement Payout
Specialized & FF&T 39.8% $296.8M <75% 0%
75% Threshold 50%
100% Target 100%
125% Maximum 150%
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The definitions of ROCE, Cash Flow and Free Cash Flow and a sample calculation are included in the 2022 KOIP Award Formula, which is attached and incorporated herein by reference as Exhibit 10.2 .
Setting of Long-Term Incentive Award Multiples for Named Executive Officers
Each year equity-based long-term incentive ("LTI") awards are granted to our
named executive officers and other executives of the Company. Each named
executive officer has an LTI award multiple (set by senior management and
approved by the Committee), which, except as noted below, is allocated between
performance stock units ("PSUs") making up 67% of the overall 2022 LTI award and
restricted stock units ("RSUs") making up 33% of the overall 2022 LTI award. The
number of PSUs and RSUs to be granted to each executive is determined by
multiplying the executive's 2022 annual base salary by his or her respective LTI
award multiple and dividing this amount by the average closing price of the
Company's common stock for the 10 trading days following the 2021 fourth quarter
earnings release. Below are the 2021 LTI award multiples set by the Committee
on
2021 LTI 2022 LTI
Named Executive Officers1 Multiple Multiple
J. Mitchell Dolloff, President & CEO 343 % 400 %
Karl G. Glassman, Executive Chairman 480 % 200 %
Jeffrey L. Tate, EVP & CFO 250 % 250 %
Steven K. Henderson , EVP, President - Specialized
Products and Furniture, Flooring & Textile Products2 200 % 200 %
Scott S. Douglas, SVP - General Counsel & Secretary 175 % 175 %
1 The 2022 LTI Multiples for Mr. Dolloff and Mr. Glassman were set
by the Committee and the independent directors of the Company's
Board in November 2021. Mr. Glassman's 2022 LTI Award will consist
of 100% RSUs.
2 In addition to the RSUs awarded pursuant to the LTI award
multiples disclosed above, Mr. Henderson receives 4,000 RSUs
annually in connection with his Agreement with the Company,
dated November 4, 2019, which was filed February 24, 2021 as
Exhibit 10.4 to the Company's Form 8-K.
The PSUs will be granted pursuant to the Company's 2021 Form of Performance
Stock Unit Award Agreement , filed
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