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Table of Contents
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A Message From Our

 

  

EXECUTIVE CHAIRMAN

 

 

Fellow Shareholders:

At Leggett & Platt, we enhance people’s lives worldwide by designing and manufacturing innovative, distinctive products and components for use in bedding, furniture, homes, offices, airplanes, and automobiles.

Leggett & Platt achieved several milestones in 2021, including attaining record EPS and sales from continuing operations, increasing our dividend for the 50th consecutive year, and issuing our inaugural sustainability report. These achievements would not be possible without our 20,000 employees, who are dedicated to creating innovative, sustainable products for our customers, ensuring a safe and inclusive workplace, and driving value for our shareholders.

2022 began with the seamless, long-planned CEO transition to Mitch Dolloff, who has successfully led various of our operations over the past two decades, including our global Automotive business and more recently, our global Bedding business while serving as Leggett’s COO. We also recently promoted long-tenured employees to key leadership positions and filled several newly created positions to bolster our human capital management, as well as our ID&E and ESG efforts.

Our 2022 Annual Meeting of Shareholders will be held in a virtual format only via a live webcast starting at 10:00 AM Central Time on Tuesday, May 17, 2022 to address the agenda described in this Notice of Annual Meeting of Shareholders and Proxy Statement. Details regarding registration and attending the virtual meeting can be found at register.proxypush.com/LEG.

Your vote is very important — please vote as soon as possible, either online at www.proxypush.com/LEG or by returning the enclosed proxy or voting instruction card.

On behalf of the Board of Directors, I thank you for your participation and investment in Leggett.

Sincerely,

LEGGETT & PLATT, INCORPORATED

 

 

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Karl Glassman

Executive Chairman

 

 


Table of Contents

Notice of 2022 Annual Meeting of Shareholders

 

Virtual Meeting Only – No Physical Meeting Location

Tuesday, May 17, 2022 | 10:00 a.m. Central Time

Dear Shareholders:

The annual meeting of shareholders of Leggett & Platt, Incorporated (the “Company”) will be held on Tuesday, May 17, 2022, at 10:00 a.m. Central Time in a virtual meeting format only, via a live webcast, with no physical in-person meeting.

You will be able to attend and participate in the annual meeting online by registering in advance at register.proxypush.com/LEG no later than 5:00 p.m. Central Time on May 16, 2022. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and to submit questions during the meeting. The virtual annual meeting has been designed to provide substantially the same rights to participate as you would have at an in-person meeting.

The annual meeting is being held for the following purposes:

 

  1.

To elect twelve directors;

 

  2.

To ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022;

 

  3.

To provide an advisory vote to approve Named Executive Officer compensation; and

 

  4.

To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

You are entitled to vote only if you were a Leggett & Platt shareholder at the close of business on March 8, 2022.

An Annual Report to Shareholders outlining the Company’s operations during 2021 accompanies this Notice of Annual Meeting and Proxy Statement.

By Order of the Board of Directors,

 

 

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Scott S. Douglas

Secretary

Carthage, Missouri

March 31, 2022

 

Important Notice Regarding the Availability of Proxy Materials

for the Shareholder Meeting to Be Held on May 17, 2022

The enclosed proxy materials and access to the proxy voting site are also available to you on the Internet.

You are encouraged to review all of the information contained in the proxy materials before voting.

The Company’s Proxy Statement and Annual Report to Shareholders are available at:

www.leggett.com/proxymaterials

The Company’s proxy voting site can be found at:

www.proxypush.com/leg


Table of Contents

 Table of Contents

 

PROXY STATEMENT SUMMARY      1  
CORPORATE GOVERNANCE AND BOARD MATTERS   

Director Independence and Board Service

     5  

Board Leadership Structure

     5  

Communication with the Board

     6  

Board and Committee Composition and Meetings

     6  

Board and Committee Evaluations

     7  

Board’s Oversight of Risk Management

     7  

Consideration of Director Nominees and Diversity

     8  

Transactions with Related Persons

     9  

Director Compensation

     10  
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING   

PROPOSAL ONE: Election of Directors

     12  

PROPOSAL TWO: Ratification of Independent Registered Public Accounting Firm

     19  

Audit and Non-Audit Fees

     19  

Pre-Approval Procedures for Audit and Non-Audit Services

     20  

Audit Committee Report

     20  

PROPOSAL THREE: Advisory Vote to Approve Named Executive Officer Compensation

     22  
EXECUTIVE COMPENSATION AND RELATED MATTERS   

Compensation Discussion & Analysis

     23  

Human Resources and Compensation Committee Report

     36  

Summary Compensation Table

     37  

Grants of Plan-Based Awards in 2021

     40  

Outstanding Equity Awards at 2021 Fiscal Year End

     41  

Option Exercises and Stock Vested in 2021

     42  

Pension Benefits in 2021

     42  

Non-Qualified Deferred Compensation in 2021

     43  

Potential Payments Upon Termination or Change in Control

     44  

CEO Pay Ratio

     47  
SECURITY OWNERSHIP   

Security Ownership of Directors and Executive Officers

     48  

Security Ownership of Certain Beneficial Owners

     49  

Delinquent Section 16(a) Reports

     49  
EQUITY COMPENSATION PLAN INFORMATION      50  
Q&A – PROXY MATERIALS AND ANNUAL MEETING      51  

 


Table of Contents

Proxy Statement Summary

 

This summary highlights information contained elsewhere in this proxy statement. It does not contain all the information that you should consider—please read the entire proxy statement before voting. These materials were first sent to our shareholders on March 31, 2022. Our principal executive offices are located at 1 Leggett Road, Carthage, Missouri 64836.

2022 Annual Meeting of Shareholders

 

 

Tuesday, May 17, 2022

10:00 a.m. Central Time

 

Virtual Meeting Only – advance

registration required to attend.

Visit register.proxypush.com/LEG

 

Record Date: March 8, 2022

 

 

            

 

 

 

Proposal

 

 

 

Recommendation

 

 

 

    Page    

 

 

1  –  Election of Twelve Directors

  FOR  

12

 

2  – Ratification of PWC as
Independent Registered Public Accounting Firm

  FOR  

19

 

3  – Advisory Vote to Approve Named
Executive Officer Compensation

  FOR  

22

Business Highlights

In 2021, sales increased 19% versus 2020 to $5.073 billion. The increase was primarily due to raw material-related price increases, volume gains and currency benefit. When compared to our pre-pandemic results of 2019, trade sales were up 7%.

We also achieved record Earnings Per Share (EPS) of $2.94 in 2021. Our 2021 Earnings Before Interest and Taxes (EBIT) was $596 million for 2021, an increase of $188 million from 2020. In 2021, we generated cash from operations of $271 million versus a very strong $603 million in 2020, with the decrease primarily driven by inflationary impacts and planned working capital investments to rebuild inventory levels in several businesses following severe depletion in 2020. For detailed results, see the Company’s Annual Report on Form 10-K filed February 22, 2022.

We raised our dividend for the 50th consecutive year in 2021, reaching an indicated annual dividend of $1.68 per share with a 4.1% yield based on our year-end closing share price of $41.16.

We are pleased to have delivered these results in 2021 despite a myriad of macro market challenges, including supply chain issues related to semiconductor shortages, foam chemical shortages, labor availability, and transportation challenges, as well as higher costs associated with each of these issues.

 

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1

 

Table of Contents

 

Board Nominees

All of Leggett’s directors are elected for a one-year term by a majority of shares present and entitled to vote at the 2022 Annual Meeting of Shareholders (the “Annual Meeting”). The 2022 director nominees are:

 

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Angela Barbee

Independent

 

Former SVP — Technology and Global R&D

Weber Inc.

 

     

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Mark A. Blinn

Independent

 

Retired President & CEO

Flowserve Corporation

 

     

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Robert E. Brunner

Independent

 

Retired Executive VP

Illinois Tool Works

 

     

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Mary Campbell

Independent

 

President — Streaming and

Digital Ventures,

Qurate Retail, Inc.

 

 

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J. Mitchell Dolloff

 

President & CEO

Leggett & Platt,

Incorporated

 

 

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Manuel A. Fernandez

Independent

 

Managing Director

SI Ventures

 

   
       

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Karl G. Glassman

 

Executive Chairman

Leggett & Platt, Incorporated

 

   

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Joseph W. McClanathan

Independent

 

Retired President & CEO —

Household Products Division

Energizer Holdings, Inc.

   

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Judy C. Odom

Independent

Lead Director

 

Retired Chair & CEO

Software Spectrum, Inc.

   

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Srikanth Padmanabhan 

Independent

 

Vice President and

President – Engine

Business Segment

Cummins, Inc.

 

 

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Jai Shah

Independent

 

Group President

Masco Corporation

 

 

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Phoebe A. Wood

Independent

 

Retired Vice Chair & CFO

Brown-Forman Corp.

 

 

 

 

 

Angela

Barbee

 

Mark

Blinn

 

Robert

Brunner

 

Mary

Campbell

 

Mitchell

Dolloff

 

Manuel

Fernandez

 

Karl

Glassman

 

Joseph

McClanathan

 

Judy

Odom

 

Srikanth

Padmanabhan

 

Jai

Shah

 

Phoebe

Wood

Independent Director

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L&P Director since

  2022   2019   2009   2019   2020   2014   2002   2005   2002   2018   2019   2005

Age

  56   60   64   54   56   75   63   69   69   57   55   68

L&P Board Committees

                                               

      Audit

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      Human Resources and

      Compensation

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      Nominating, Governance

      and Sustainability

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Other Public Company Boards

  0   3   2   0   0   1   0   1   0   0   0   3
 

EXPERIENCE AND QUALIFICATIONS

   

 

   

 

   

 

   

 

   

 

   

 

   

 

   

 

Financial/Accounting

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Global Business

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R&D/Innovation/Tech

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Manufacturing/Operations

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Governance/Sustainability

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Strategic Planning

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HR/Compensation

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Risk Management

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IT/Cybersecurity

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L&P Industry Experience

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Gender/Ethnic Diversity

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Diversity – Our Nominating, Governance and Sustainability Committee recognizes the value of cultivating a Board with a diverse mix of opinions, perspectives, skills, experiences, and backgrounds. A diverse board enables more balanced, wide-ranging discussion in the boardroom, which, we believe, enhances the decision-making processes. The matrix above reflects some aspects of the Board’s diversity. In addition, seven of our ten independent director nominees (70%) are diverse, with four women and four nominees who self-identify as racial or ethnic minorities.

 

 

 

2

 

 

 

2022 Proxy Statement


Table of Contents

 

Executive Compensation

L&P seeks to align our executives’ and shareholders’ interests through pay-for-performance. In 2021, 86% of our CEO’s target pay was allocated to variable compensation and 68% was delivered in equity-based awards.

Our compensation structure strives to strike an appropriate balance between short-term and longer-term compensation that reflects the short- and longer-term interests of the business. We believe this structure helps us attract, retain and motivate high-performing executives who will achieve outstanding results for our shareholders.

Key Components of Our Executive Officers’ 2021 Compensation Program

 

Base Salary: Our executives’ salaries reflect their responsibilities, performance and experience while taking into account market data, peer benchmarking and internal equity.

 

Annual Incentive: Short-term cash incentive with payouts ranging from 0% to 150% based on Return on Capital Employed (ROCE) and cash flow targets based on the Company’s earning guidance for the year.

 

Long-Term Incentive – 2/3 allocated to PSUs: Three-year PSUs with payouts ranging from 0% to 200% based on (1) relative TSR measured against the industrial, materials and consumer discretionary sectors of the S&P 500 and S&P MidCap 400 and (2) the Company’s EBIT CAGR.

 

Long-Term Incentive – 1/3 allocated to RSUs: The RSUs vest in 1/3 increments on the first, second and third anniversaries of the grant date, further tying our executives’ pay to the Company’s performance.

 

 

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CEO Transition and 2022 Compensation

On January 1, 2022, Mitch Dolloff became the Company’s Chief Executive Officer, after serving as Leggett’s Chief Operating Officer since 2019 and in various other capacities since 2000. In connection with Mr. Dolloff’s appointment as CEO, the Board of Directors increased his 2022 base salary to $1,120,000 and set his target annual incentive percentage at 125% of base salary and his long-term incentive percentage at 400% (allocated between PSUs and RSUs as described above). At these target levels, 84% of Mr. Dolloff’s 2022 pay package is variable and 64% is equity-based. Mr. Dolloff also received a one-time promotional award of three-year RSUs valued at $1,000,000.

At the same time, our former CEO, Karl Glassman, transitioned to the role of Executive Chairman. In this role, Mr. Glassman’s 2022 compensation package was set at $750,000 base salary, 100% target annual incentive, and 200% long-term incentive (granted solely in RSUs).

 

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Table of Contents

 

Key Features of Our Executive Officer Compensation Program

 

           What We Do                                                                            What We Don’t Do                                                   
                       
   

 

  Pay for Performance – A significant majority of our Named Executive Officers’ (NEOs) compensation is at-risk variable compensation.

 

  Multiple Performance Metrics – Variable compensation is based on more than one measure to encourage balanced incentives.

 

  Incentive Award Caps – All of our variable compensation plans have maximum payout limits.

 

  Benchmarking – We compare our compensation package to market surveys and a customized peer group, and the Committee engages an independent consultant.

 

  Stock Ownership Requirements – All NEOs are subject to robust stock ownership requirements.

 

  Confidentiality  & Non-Compete Agreements – All NEOs are subject to confidentiality and non-compete agreements.

 

  Clawbacks – Our policies exceed the mandates of Sarbanes-Oxley.

 

           

 

×  No Single-Trigger Change in Control – Our CIC-related cash severance and equity awards (other than legacy stock options) have a double trigger.

 

×  No Hedging or Pledging – We do not permit our executive officers to engage in either hedging or pledging activities with respect to Leggett shares.

 

×  No Excessive Perquisites – Perquisites represent less than 1% of our NEOs’ compensation.

 

×  No Employment Agreements – All of our NEOs are employed at-will.

 

×  No Repricing of Options or Cash Buyouts

 

×  No Share Recycling

 

×  No Dividends on Equity Awards Prior to Vesting

 

×  No Tax Gross-Ups

   

Board Oversight of ESG and Related Matters

Following the self-evaluations at the end of 2020, the Board of Directors and its Committees reviewed the oversight structure for certain environmental, social and governance (ESG) matters. As a result, the renamed Nominating, Governance and Sustainability Committee amended its charter responsibilities to oversee the Company’s corporate responsibility and sustainability policies and programs, including environmental and climate change, social and governance matters, reviewing the Company’s sustainability report and any sustainability targets, and annually reviewing the Company’s political and charitable contributions. In addition, the renamed Human Resources and Compensation Committee amended its charter responsibilities to include overseeing the Company’s human resources policies and programs, executive succession planning, and senior management leadership development.

Although the Board has delegated direct oversight of certain ESG matters to its committees, the Board has retained primary oversight responsibility of the Company’s cybersecurity programs and its inclusion, diversity and equity (ID&E) efforts.

 

 

 

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2022 Proxy Statement


Table of Contents

Corporate Governance and Board Matters

 

Leggett & Platt has a long-standing commitment to sound corporate governance principles and practices. The Board of Directors has adopted Corporate Governance Guidelines that establish the roles and responsibilities of the Board and management. The Board has also adopted a Code of Business Conduct and Ethics applicable to all Company employees, officers and directors, as well as a separate Financial Code of Ethics applicable to the Company’s CEO, CFO, and Chief Accounting Officer. These documents can be found at www.leggett.com/governance. Information on our website does not constitute part of this proxy statement.

Director Independence and Board Service

 

 

 

The Board reviews director independence annually and during the year upon learning of any change in circumstances that may affect a director’s independence. The Company has adopted director independence standards (the “Independence Standards”) that satisfy the NYSE listing requirements and can be found at www.leggett.com/governance. A director who meets all the Independence Standards will be presumed to be independent.

While the Independence Standards help the Board to determine director independence, they are not the only criteria. The Board also reviews the relevant facts and circumstances of any material relationships between the Company and its directors during the independence assessment. Based on its review, the Board has determined that all current non-management directors are independent. The director biographies accompanying Proposal One: Election of Directors identify our independent and management directors on the ballot.

All non-management directors meet the additional independence standards for audit committee service

under NYSE and SEC rules and are financially literate, as defined by NYSE rules. In addition, Audit Committee members Mark Blinn, Robert Brunner, Srikanth Padmanabhan, Jai Shah, and Phoebe Wood meet the SEC’s definition of an “audit committee financial expert.” No member serves on the audit committee of more than three public companies.

All non-management directors satisfy the enhanced independence standards required by the NYSE listing standards and SEC rules for service on the Human Resources and Compensation Committee.

As provided in our Corporate Governance Guidelines, non-management directors can sit on no more than five public company boards (including our own) and the CEO can sit on no more than two public company boards without Board approval. The NGS Committee conducts an annual review of director commitment levels and affirmed that all the nominees for the 2022 Annual Meeting were compliant.

 

 

Board Leadership Structure

 

 

 

Our Corporate Governance Guidelines allow the roles of Chairman of the Board and CEO to be filled by the same or different individuals. This approach allows the Board flexibility to determine whether the two roles should be separate or combined based upon the Company’s needs and the Board’s assessment of the Company’s leadership from time to time.

The Board has elected former CEO Karl Glassman as the Executive Chairman effective January 1, 2022. Judy Odom has served as independent Lead Director since 2020. With Mitch Dolloff having succeeded Mr. Glassman as Chief Executive Officer on January 1, 2022, the Board believes this leadership structure best serves the Board, the Company and our shareholders.

The Lead Director’s responsibilities include:

 

  Serving as the liaison between the independent directors and the CEO and Chairman.
  Acting as the principal representative of the independent directors in communicating with shareholders.

 

  Working with the Chairman and CEO to set the schedule and agenda for Board meetings, and overseeing delivery of materials to the directors.

 

  Calling special executive sessions of the independent directors upon notice to the full Board.

 

  Presiding over meetings of the non-management directors and over Board meetings in the Chairman’s absence.

Our non-management directors regularly hold executive sessions without management present. At least one executive session per year is attended by only independent, non-management directors, and such an executive session was held at each quarterly Board meeting in 2021.

 

 

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Table of Contents

Corporate Governance and Board Matters

 

Communication with the Board

Shareholders and all other interested parties who wish to contact our Board of Directors may e-mail our Lead Director, Ms. Odom, at leaddirector@leggett.com. They can also write to Leggett & Platt Lead Director, P.O. Box 637, Carthage, MO 64836. The Corporate Secretary’s office reviews this correspondence and periodically provides the Lead Director all communications except items unrelated to Board functions. The Lead Director may forward communications to the full Board or to any of the other independent directors for further consideration.

Board and Committee Composition and Meetings

Leggett’s Board of Directors held six meetings in 2021, and its committees met the number of times listed in the table below. All directors attended at least 75% of the Board meetings and their respective committee meetings. Directors are expected to attend the Company’s Annual Meeting, and all of them attended the 2021 Annual Meeting.

The Board has a standing Audit Committee, Human Resources and Compensation (HRC) Committee, and Nominating, Governance and Sustainability (NGS) Committee. These committees consist entirely of independent directors, and each operates under a written charter adopted by the Board. The Audit, HRC, and NGS Committee charters are posted on our website at www.leggett.com/governance.

 

Audit Committee

Phoebe A. Wood (Chair)

Mark A. Blinn

Robert E. Brunner

Mary Campbell

Srikanth Padmanabhan

Jai Shah

 

Meetings in 2021: 5

  

The Audit Committee assists the Board in the oversight of:

•   Independent registered public accounting firm’s qualifications, independence, appointment, compensation, retention and performance.

•   Internal control over financial reporting.

•   Guidelines and policies to govern risk assessment and management.

•   Performance of the Company’s internal audit function.

•   Integrity of the financial statements and external financial reporting.

•   Legal and regulatory compliance.

•   Complaints and investigations of any questionable accounting, internal control or auditing matters.

 

 

Human Resources and

Compensation Committee

Robert E. Brunner (Chair)

Angela Barbee

Mark A. Blinn

Manuel A. Fernandez

Joseph W. McClanathan

Judy C. Odom

Jai Shah

 

Meetings in 2021: 5

 

  

 

The HRC Committee assists the Board in the oversight and administration of:

•   The Company’s human resources policies and programs.

•   CEO, executive officer, and director compensation.

•   Incentive compensation and equity-based plans.

•   Executive succession planning.

•   Senior management leadership development.

•   Employment agreements, change-in-control agreements, and severance benefit agreements with the CEO and executive officers, as applicable.

•   Related person transactions of a compensatory nature.

 

Nominating, Governance

and Sustainability Committee

Joseph W. McClanathan (Chair)

Mary Campbell

Manuel A. Fernandez

Judy C. Odom

Srikanth Padmanabhan

Phoebe A. Wood

 

Meetings in 2021: 5

 

  

 

The NGS Committee assists the Board in the oversight of:

•   Corporate governance principles, policies and procedures.

•   Identifying qualified candidates for Board membership and recommending director nominees.

•   Recommending committee members and Board leadership positions.

•   The Company’s policies and programs relating to corporate responsibility and sustainability, including environmental, social and governance matters.

•   The Company’s political and charitable contributions.

•   Director independence and related person transactions.

 

 

 

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2022 Proxy Statement


Table of Contents

Corporate Governance and Board Matters

 

Board and Committee Evaluations

The Board and each of its Committees conduct an annual self-evaluation of their practices and charter responsibilities. In addition, the Board periodically retains an outside consultant to assist in the evaluations, solicits survey responses from individual directors on Board and Committee effectiveness, and conducts director peer reviews of the qualifications and contributions of its individual members. In 2021, following the prior year’s evaluations, the Board and Committees further delineated responsibilities for various environmental, social and governance (ESG) matters, expanded committee oversight of human resources, and updated the committee charters.

Board’s Oversight of Risk Management

 

The Company’s CEO and other senior managers are responsible for assessing and managing various risk exposures on a day-to-day basis. Our Enterprise Risk Management Committee (the “ERM Committee”), comprised of a broad group of executives and chaired by our CFO, adopted guidelines by which the Company identifies, assesses, monitors and reports financial and non-financial risks material to the Company.

The ERM Committee meets at least quarterly. Identified risks, including emerging risks, are assigned to a team of subject matter experts who meet regularly throughout the year and provide an updated assessment report to the ERM Committee twice each year (or as circumstances require) for their respective risk areas. On a semi-annual basis, these reports are compiled into a risk summary report which is further reviewed and discussed with the ERM Committee to determine if any actions need to be taken. A summary is provided to senior management and the Board concerning (i) the likelihood, significance, and impact velocity of each risk, (ii) management’s actions to monitor and control risks, and (iii) identified emerging risks. The Audit Committee performs an annual review of the guidelines and policies that govern the process by which risk assessment and management is undertaken, as well as reviews and discusses major financial risks on a semi-annual basis. In addition, a designated Board member receives a copy of all reports received through the Company’s ethics hotline.

The Company has formal processes in place for both incident response and cybersecurity continuous improvement that include a cross functional Cybersecurity Oversight Committee. The Chief Information Officer (a member of the Cybersecurity Oversight Committee) updates the Board quarterly on cyber activity, with procedures in place for interim reporting as necessary.

During 2020, a COVID-19 Response Team was established to direct health and safety activities related to the pandemic. The Team, led by senior management, developed company-wide policies and established safety procedures in response to specific COVID-19

related risks. Key activities that have continued since being instituted in 2020 include protocols for (i) safety and social distancing, (ii) communication, training, and visual management, (iii) re-layout of manufacturing and internal logistics, and (iv) governance and compliance. A multi-layered COVID-19 Response Network was established to deliver training and communication to our employees at all levels of the organization, as well as obtaining employee feedback, sharing best practices, and identifying improvement opportunities. COVID-19 Response activities are reviewed with the Board on a quarterly basis, with interim updates as appropriate.

The HRC Committee’s oversight of executive officer compensation, including the assessment of compensation risk for executive officers, is detailed in the Compensation Discussion & Analysis section on page 23. The Committee also assesses our compensation structure for employees generally and has concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. The following factors contributed to this determination:

 

  We use a combination of short-term and long-term incentive rewards that are tied to varied and complementary measures of performance and have overlapping performance periods.

 

  We use common annual incentive plans across all business units.

 

  Our annual incentive plan and our omnibus equity plan contain clawback provisions that enable the Committee to recoup incentive payments, when triggered.

 

  Our employees below key management levels have a small percentage of their total pay in variable compensation.

 

  We promote an employee ownership culture to better align employees with shareholders, with approximately 3,000 employees contributing their own funds to purchase Company stock under various stock purchase plans in 2021.
 

 

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Corporate Governance and Board Matters

 

Consideration of Director Nominees and Diversity

The Nominating, Governance and Sustainability (NGS) Committee is responsible for identifying and evaluating the best available qualified candidates for election to the Board of Directors. The Committee’s procedure and the Company’s bylaws can be found at www.leggett.com/governance. Following its evaluation, the NGS Committee recommends to the full Board a slate of director candidates for inclusion in the Company’s proxy statement and proxy card.

Incumbent Directors. In the case of incumbent directors, the NGS Committee reviews each director’s overall service during his or her current term, including the number of meetings attended, level of participation, quality of performance and any transactions between the director and the Company.

New Director Candidates. In the case of new director candidates, the NGS Committee first determines whether the nominee will be independent under NYSE rules, then identifies any special needs of the Board. The NGS Committee will consider individuals recommended by Board members, Company management, shareholders and, if it deems appropriate, a professional search firm. In 2022, the Company retained a search firm, Diversified Search, to assist with identifying and evaluating potential director candidates, including Ms. Barbee.

The NGS Committee believes director candidates should meet and demonstrate the following criteria:

 

   

Character and integrity.

 

   

A commitment to the long-term growth and profitability of the Company.

 

   

A willingness and ability to make a sufficient time commitment to the affairs of the Company to effectively perform the duties of a director, including regular attendance at Board and committee meetings.

 

   

Significant business or public experience relevant and beneficial to the Board and the Company.

Board Diversity. The NGS Committee recognizes the value of cultivating a Board with a diverse mix of opinions, perspectives, skills, experiences, and backgrounds. A diverse board enables more balanced, wide-ranging discussion in the boardroom, which, we believe, enhances the decision-making processes. Having diverse representation and a variety of viewpoints is also important to our shareholders and other stakeholders.

As such, the NGS Committee actively seeks director candidates from a wide variety of backgrounds, without discrimination based on race, ethnicity, color, ancestry, national origin, religion, sex, sexual orientation, gender identity, age, disability, or any other status protected by law. In furtherance of this non-discrimination policy, for each search, the Committee will ensure that the pool includes female and racial or ethnic minority candidates.

All nominations to the Board will be based upon merit, experience and background relevant to the Board’s current and anticipated needs, as well as Leggett’s businesses.

Director Recommendations from Shareholders. The NGS Committee does not intend to alter its evaluation process, including the minimum criteria set forth above, for candidates recommended by a shareholder. Shareholders who wish to recommend candidates for the NGS Committee’s consideration must submit a written recommendation to the Secretary of the Company at 1 Leggett Road, Carthage, MO 64836. Recommendations must be sent by certified or registered mail and received by December 15th for the NGS Committee’s consideration for the following year’s Annual Meeting. Recommendations must include the following:

 

   

Shareholder’s name, number of shares owned, length of period held and proof of ownership.

 

   

Candidate’s name, address, phone number and age.

 

   

A resume describing, at a minimum, the candidate’s educational background, occupation, employment history and material outside commitments (memberships on other boards and committees, charitable foundations, etc.).

 

   

A supporting statement which describes the shareholder’s and candidate’s reasons for nomination to the Board of Directors and documents the candidate’s ability to satisfy the director qualifications described above.

 

   

The candidate’s consent to a background investigation and to stand for election if nominated by the Board and to serve if elected by the shareholders.

 

   

Any other information that will assist the NGS Committee in evaluating the candidate in accordance with this procedure.

 

 

 

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Table of Contents

Corporate Governance and Board Matters

 

Director Nominations for Inclusion in Leggett’s Proxy Materials (Proxy Access). The Board has approved a proxy access bylaw, which permits a shareholder, or group of up to 20 shareholders, owning at least 3% of our outstanding shares continuously for at least three years, to nominate and include in Leggett’s proxy materials up to the greater of two nominees or 20% of the Board, provided the shareholders and nominees satisfy the requirements specified in our bylaws. Notice of proxy access nominees for the 2023 Annual Meeting must be received no earlier than January 17, 2023 and no later than February 16, 2023.

Notice of Other Director Nominees. For shareholders intending to nominate a director candidate for election at the 2023 Annual Meeting outside of the Company’s nomination process, our bylaws require that the Company receive notice of the nomination no earlier than January 17, 2023 and no later than February 16, 2023. This notice must provide the information specified in Section 2.2 of the bylaws.

Transactions with Related Persons

According to our Corporate Governance Guidelines, the NGS Committee reviews transactions in which a related person has a direct or indirect material interest, the Company or a subsidiary is a participant, and the amount involved exceeds $120,000. If the transaction with a related person concerns compensation, the HRC Committee conducts the review.

The Company’s executive officers and directors are expected to notify the Company’s Corporate Secretary of any current or proposed transaction that may be a related person transaction. The Corporate Secretary will determine if it is a related person transaction and, if so, will include it for consideration at the next meeting of the appropriate Committee. The appropriate Committee will conduct a reasonable prior review and oversight of any related person transaction for potential conflicts of interest and will prohibit any such transaction if the Committee determines it to be inconsistent with the interests of the Company and its shareholders. If it becomes necessary to review a related person transaction between meetings, the Chair of the appropriate Committee is authorized to act on behalf of the Committee. The Chair will provide a report on the matter to the full Committee at its next meeting.

The full policy for reviewing transactions with related persons, including categories of pre-approved transactions, is found in our Corporate Governance Guidelines available on our website at www.leggett.com/governance.

The Company employs certain relatives of its executive officers, but only two had total compensation (consisting of salary and annual incentive earned in 2021, as well as the grant date fair value of equity awards issued in 2021) in excess of the $120,000 related person transaction threshold: Rebecca Burns, Staff VP—Record to Report Business Processes, the spouse of Ben Burns, Senior VP—Business Support Services, had 2021 total compensation of $175,389; and Ashley Hiatt, Staff VP—Segment Reporting, the sister-in-law of Mr. Burns, had total 2021 compensation of $152,681.

 

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Corporate Governance and Board Matters

 

Director Compensation

Our non-management directors receive an annual retainer, consisting of a mix of cash and equity, as set forth in the table below. Our management directors (Mr. Glassman and Mr. Dolloff) do not receive additional compensation for their Board service.

 

Cash Compensation

      

Director Retainer

  

$

90,000

 

Audit Committee Retainer

  

Chair

  

 

25,000

 

Member

  

 

10,000

 

HRC Committee Retainer

  

Chair

  

 

20,000

 

Member

  

 

8,000

 

NGS Committee Retainer

  

Chair

  

 

15,000

 

Member

  

 

7,000

 

Equity Compensation – Restricted Stock or RSUs

      

Director Retainer

  

 

150,000

 

Lead Director Additional Retainer

  

 

125,000

 

 

The HRC Committee reviews director compensation annually and recommends any changes to the full Board for consideration at its November meeting. The Committee considers national survey data and trends, as well as peer company benchmarking data (see discussion of the executive compensation peer group at page 33) but does not target director compensation to any specific percentage of the median. The directors’ annual cash and equity retainers were not increased in 2021.

The directors’ equity awards are generally granted in connection with the May Board meeting, and a prorated award is granted to a director elected by the Board at another time of the year.

Directors may elect to receive the equity retainer in restricted stock or restricted stock units (“RSUs”). Electing RSUs enables directors to defer receipt of the shares for two to ten years while accruing dividend

equivalent shares at a 20% discount to market price over the deferral period. Both restricted stock and RSUs vest on the day prior to the next year’s Annual Meeting.

Many of our directors elected to defer a portion of their 2021 cash retainer into Leggett stock units at a 20% discount under the Company’s Deferred Compensation Program, described on page 31. Interest-bearing cash deferrals and stock options are the other alternatives under the Program.

Our non-management directors currently comply with the stock ownership guidelines requiring them to hold Leggett stock with a value of five times their annual cash retainer within five years of joining the Board.

The Company pays for all travel expenses the directors incur to attend Board meetings, although no in-person meetings were held in 2021.

 

 

 

 

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Corporate Governance and Board Matters

 

Director Compensation in 2021

Our non-management directors received the following compensation in 2021. Ms. Barbee is not included in the following tables, since she first joined the Board in 2022.

 

Director

 

  

Fees Earned

or Paid

in Cash(1)

 

    

Stock

Awards(2)

 

    

Non-Qualified

Deferred

Compensation

Earnings(3)

 

    

All Other

Compensation(4)

 

    

Total

 

 

Mark A. Blinn

  

 

$104,000

 

  

 

$150,000

 

     

 

$  4,944

 

  

 

$258,944

 

Robert E. Brunner

  

 

118,500

 

  

 

150,000

 

  

 

$15,543

 

  

 

91,797

 

  

 

375,840

 

Mary Campbell

  

 

103,500

 

  

 

150,000

 

  

 

2,998

 

  

 

37,867

 

  

 

294,365

 

Manuel A. Fernandez

  

 

105,000

 

  

 

150,000

 

  

 

3,553

 

  

 

14,211

 

  

 

272,764

 

Joseph W. McClanathan

  

 

113,000

 

  

 

150,000

 

  

 

1,811

 

  

 

40,438

 

  

 

305,249

 

Judy C. Odom

  

 

102,500

 

  

 

275,000

 

  

 

10,091

 

  

 

53,202

 

  

 

440,793

 

Srikanth Padmanabhan

  

 

103,500

 

  

 

150,000

 

     

 

4,944

 

  

 

258,444

 

Jai Shah

  

 

106,500

 

  

 

150,000

 

  

 

3,194

 

  

 

12,774

 

  

 

272,468

 

Phoebe A. Wood

  

 

118,500

 

  

 

150,000

 

  

 

9,486

 

  

 

38,342

 

  

 

316,328

 

 

(1)

These amounts include cash compensation deferred into stock units or stock options under our Deferred Compensation Program, described at page 31. The following directors deferred cash compensation into stock units: Brunner—$118,500, Campbell—$103,500, McClanathan—$113,000, and Odom—$51,250. Mr. Shah deferred $106,500 to acquire stock options.

 

(2) 

These amounts reflect the grant date fair value of the annual restricted stock or RSU awards, which was $150,000 for each director, plus an additional $125,000 retainer for Ms. Odom’s service as Lead Director. The grant date value of these awards is determined by the stock price on the day of the award.

 

(3) 

These amounts include the 20% discount on stock unit dividends acquired under our Deferred Compensation Program and RSUs.

 

(4) 

Items in excess of $10,000 that are reported in this column consist of (i) dividends paid on the annual restricted stock or RSU awards and dividends paid on stock units acquired under our Deferred Compensation Program: Brunner—$62,172, Campbell—$11,992, Fernandez—$14,211, McClanathan—$12,188, Odom—$40,363, Shah—$12,774, and Wood—$37,944; and (ii) the 20% discount on stock units purchased with deferred cash compensation: Brunner—$29,625, Campbell—$25,875, McClanathan—$28,250, and Odom—$12,813.

All non-management directors held unvested stock or stock units as of December 31, 2021 as set forth below. The restricted stock and RSUs will vest on May 16, 2022.

 

Director

 

  

Restricted

Stock

 

    

Restricted

Stock Units

 

 

Mark A. Blinn

  

 

2,768

 

  

Robert E. Brunner

     

 

2,830

 

Mary Campbell

     

 

2,830

 

Manuel A. Fernandez

     

 

2,830

 

Joseph W. McClanathan

  

 

2,768

 

  

Judy C. Odom

     

 

5,188

 

Srikanth Padmanabhan

  

 

2,768

 

  

Jai Shah

     

 

2,830

 

Phoebe A. Wood

     

 

2,830

 

Two directors held outstanding stock options as of December 31, 2021 which were granted in lieu of cash compensation under our Deferred Compensation Program: Ms. Campbell—4,274 options and Mr. Shah—12,865 options.

 

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Table of Contents

Proposals to be Voted on at the Annual Meeting

 

PROPOSAL ONE:    Election of Directors

 

 

At the 2022 Annual Meeting, twelve directors are nominated to hold office until the 2023 Annual Meeting of Shareholders, or until their successors are elected and qualified. All nominees have been previously elected by our shareholders, except Ms. Barbee who was appointed by the Board in 2022. If any nominee named below is unable to serve as a director (an event the Board does not anticipate), proxies will be voted for a substitute nominee, if any, designated by the Board.

In recommending the slate of director nominees, our Board has chosen individuals of character and integrity, with a commitment to the long-term growth and profitability of the Company. We believe each of the nominees brings significant business or public experience relevant and beneficial to the Board and the Company, as well as a work ethic and disposition that foster the collegiality necessary for the Board and its committees to function efficiently and best represent the interests of our shareholders.

Additional information concerning the directors is found in the Proxy Summary at page 2.

 

 

  Angela Barbee

 

  

 

 

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  Independent Director

 

  Director Since: 2022

  Age: 56

 

  Committees:

  HRC

  

 

Professional Experience:

 

Ms. Barbee was Senior Vice President—Technology and Global R&D of Weber Inc., a manufacturer of charcoal, gas, pellet, and electric outdoor grills and accessories, from 2021 until January 2022. She previously served as Vice President—Advance Development, Global Kitchen & Bath Group of Kohler Company, a global leader in the design, innovation and manufacture of kitchen and bath products, engines and power systems, and luxury cabinetry and tile, from 2020 to 2021, and as Vice President—New Product Development and Engineering, Global Faucets from 2018 to 2020. Ms. Barbee served as Director—Global Creative Design Operations of General Motors, a global company that designs, builds, and sells trucks, crossovers, cars, and automobile parts and accessories, from 2013 to 2017, and in various other capacities since 1994.

 

Education:

 

Ms. Barbee holds a bachelor’s degree in mechanical engineering from Wayne State University, a master’s degree in mechanical engineering from Purdue University, and has completed the Executive Education Program in the Ross Business School at the University of Michigan.

 

Director Qualifications:

 

Through her positions at Weber, Kohler and General Motors, Ms. Barbee has a wide-ranging knowledge of manufacturing, engineering and innovation, management, and operations in the consumer products and automotive industries. She also has extensive international experience in leading engineering, development and innovation efforts.

 

 

 

 

 

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Election of Directors

 

 

  Mark A. Blinn

 

  

 

 

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  Independent Director

 

  Director Since: 2019

  Age: 60

 

  Committees:

  Audit

  HRC

  

 

Professional Experience:

 

Mr. Blinn was President and Chief Executive Officer and a director of Flowserve Corporation, a leading provider of fluid motion and control products and services for the global infrastructure markets, from 2009 until his retirement in 2017. He previously served Flowserve as Chief Financial Officer from 2004 to 2009 and in the additional role of Head of Latin America from 2007 to 2009. Prior to Flowserve, Mr. Blinn’s positions included Chief Financial Officer of FedEx Kinko’s Office and Print Services Inc. and Vice President, Corporate Controller and Chief Accounting Officer of Centex Corporation.

 

Education:

 

Mr. Blinn holds a bachelor’s degree, a law degree, and an MBA from Southern Methodist University.

 

Public Company Boards:

 

Mr. Blinn currently serves as a director of Texas Instruments, Incorporated, a global semiconductor design and manufacturing company, Emerson Electric Co., a global technology and engineering company for industrial, commercial and residential markets, and Globe Life Inc., a financial services holding company specializing in life insurance, annuity, and supplemental health insurance products. He previously served as a director of Kraton Corporation, a leading global producer of polymers for a wide range of applications.

 

Director Qualifications:

 

As the former CEO and CFO of Flowserve, Mr. Blinn has exceptional leadership experience in operations and finance, as well as strategic planning and risk management. His board service at other global, public companies provides additional perspective on current finance, oversight, and governance matters.

 

 

 

  Robert E. Brunner

 

  

 

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  Independent Director

 

  Director Since: 2009

  Age: 64

 

  Committees:

  HRC, Chair

  Audit

 

  

 

Professional Experience:

 

Mr. Brunner was the Executive Vice President of Illinois Tool Works (ITW), a Fortune 250 global, multi-industrial manufacturer of advanced industrial technology, from 2006 until his retirement in 2012. He previously served ITW as President—Global Auto beginning in 2005 and President—North American Auto from 2003.

 

Education:

 

Mr. Brunner holds a degree in finance from the University of Illinois and an MBA from Baldwin-Wallace University.

 

Public Company Boards:

 

Mr. Brunner currently serves as the independent Board Chair of Lindsay Corporation, a global manufacturer of irrigation equipment and road safety products, and as a director of NN, Inc., a diversified industrial company that designs and manufactures high-precision components and assemblies on a global basis.

 

Director Qualifications:

 

Mr. Brunner’s experience and leadership with ITW, a diversified manufacturer with a global footprint, provides valuable insight to our Board on the automotive strategy, business development, mergers and acquisitions, operations, and international issues.

 

 

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Election of Directors

 

 

  Mary Campbell

 

  

 

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  Independent Director

 

  Director Since: 2019

  Age: 54

 

  Committees:

  Audit

  NGS

 

  

 

Professional Experience:

 

Ms. Campbell was appointed President—Streaming and Digital Ventures of Qurate Retail, Inc., in 2022. Qurate Retail is comprised of a select group of retail brands including QVC, HSN, Zulily, Ballard Designs, Frontgate, Garnet Hill, and Grandin Road and is a leader in video commerce, a top-10 ecommerce retailer, and a leader in mobile and social commerce. During her more than 20 years with the company, Ms. Campbell held various leadership positions across the Merchandising, Planning and Commerce Platforms functions. Most recently, and prior to her current position, she served as Chief Content, Digital, and Platforms Officer of QxH, a segment of Qurate, since 2021, as Chief Merchandising Officer of Qurate Retail Group and Chief Commerce Officer of QVC US from 2018 to 2021, as Chief Merchandising and Interactive Officer in 2018, as Chief Interactive Experience Officer from 2017 to 2018, and as Executive Vice President, Commerce Platforms for QVC from 2014 to 2017.

 

Education:

 

Ms. Campbell holds a bachelor’s degree in psychology from Central Connecticut State University.

 

Director Qualifications:

 

Through her positions at QxH, Qurate Retail Group and QVC, Ms. Campbell has extensive knowledge in consumer driven product innovation, marketing and brand building, and traditional and new media platforms, as well as leading teams for long term growth and evolution.

 

 

 

  J. Mitchell Dolloff

 

  

 

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  Management Director

 

  Director Since: 2020

  Age: 56

 

  Committees:

  None

 

  

 

Professional Experience:

 

Mr. Dolloff was appointed the Company’s Chief Executive Officer, effective January 1, 2022, and continues to serve as President since his appointment in 2020. He previously served as Chief Operating Officer from 2019 until his appointment as CEO; President—Bedding Products from 2020 to 2021; President—Specialized Products & Furniture Products from 2017 to 2019; Senior Vice President and President of Specialized Products from 2016 to 2017; Vice President and President of the Automotive Group from 2014 to 2015; President of Automotive Asia from 2011 to 2013; Vice President of Specialized Products from 2009 to 2013; and in various other capacities for the Company since 2000.

 

Education:

 

Mr. Dolloff holds a degree in economics from Westminster College (Fulton, Missouri), as well as a law degree and an MBA from Vanderbilt University.

 

Director Qualifications:

 

As the Company’s President and CEO, Mr. Dolloff provides comprehensive insight to the Board from strategic planning to implementation at all levels of the Company around the world, as well as the Company’s relationships with investors, the financial community and other key stakeholders.

 

 

 

 

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Election of Directors

 

 

  Manuel A. Fernandez

 

 

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  Independent Director

 

  Director Since: 2014

  Age: 75

 

  Committees:

  HRC

  NGS

  

 

Professional Experience:

 

Mr. Fernandez co-founded SI Ventures, a venture capital firm focusing on IT and communications infrastructure, and has served as the managing director since 2000. Previously, he served as the Chairman, President and Chief Executive Officer at Gartner, Inc., a research and advisory company, from 1989 to 2000. Prior to Gartner, Mr. Fernandez was President and CEO of three technology-driven companies, including Dataquest, an information services company, Gavilan Computer Corporation, a laptop computer manufacturer, and Zilog Incorporated, a semiconductor manufacturer. Mr. Fernandez was the Executive Chairman of Sysco Corporation, a marketer and distributor of foodservice products, from 2012 until his retirement in 2013, having previously served as Non-executive Chairman since 2009 and as a director since 2006.

 

Education:

 

Mr. Fernandez holds a degree in electrical engineering from the University of Florida and completed post-graduate work in solid-state engineering at the University of Florida.

 

Public Company Boards:

 

Mr. Fernandez currently serves as the lead independent director of Performance Food Group Company, a foodservice products distributor. He was previously the non-executive chairman of Brunswick Corporation, a market leader in the marine industry, and a director of Time, Inc., a global media company.

 

Director Qualifications:

 

Mr. Fernandez’ venture capital experience, leadership of several technology companies as CEO and service on a number of public company boards offers Leggett outstanding insight into corporate strategy and development, information technology, international growth, and corporate governance.

 

 

 

  Karl G. Glassman

 

 

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  Management Director

 

  Director Since: 2002

  Chairman Since: 2020

  Age: 63

 

  Committees:

  None

 

  

 

Professional Experience:

 

Mr. Glassman was appointed Executive Chairman of the Board effective January 1, 2022, following his retirement as the Company’s Chief Executive Officer on December 31, 2021, a position he held since 2016. Mr. Glassman was first appointed Chairman of the Board in 2020. He previously served as President from 2013 to 2019, Chief Operating Officer from 2006 to 2015, Executive Vice President from 2002 to 2013, President of the former Residential Furnishings Segment from 1999 to 2006, Senior Vice President from 1999 to 2002, and in various capacities since 1982.

 

Education:

 

Mr. Glassman holds a degree in business management and finance from California State University—Long Beach.

 

Director Qualifications:

 

As the Company’s outgoing CEO with decades of experience in Leggett’s senior management team, Mr. Glassman offers exceptional knowledge of the Company’s operations, strategy and governance, as well as its customers and end markets. Mr. Glassman also serves on the Board of Directors of the National Association of Manufacturers.

 

 

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Election of Directors

 

 

  Joseph W. McClanathan

 

 

   g279227g14a85.jpg

  Independent Director

 

  Director Since: 2005

  Age: 69

 

  Committees:

  HRC

  NGS, Chair

  

 

Professional Experience:

 

Mr. McClanathan served as President and Chief Executive Officer of the Household Products Division of Energizer Holdings, Inc., a manufacturer of portable power solutions, from 2007 through his retirement in 2012. Previously, he served Energizer as President and Chief Executive Officer of the Energizer Battery Division from 2004 to 2007, as President—North America from 2002 to 2004, and as Vice President—North America from 2000 to 2002.

 

Education:

 

Mr. McClanathan holds a degree in management from Arizona State University.

 

Public Company Boards:

 

Mr. McClanathan currently serves as a director of Brunswick Corporation, a market leader in the marine industry.

 

Director Qualifications:

 

Through his leadership experience at Energizer and as a former director of the Retail Industry Leaders Association, Mr. McClanathan offers an exceptional perspective to the Board on manufacturing operations, marketing and development of international capabilities.

 

 

 

  Judy C. Odom

 

 

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  Lead Independent

  Director

 

  Director Since: 2002

  Age: 69

 

  Committees:

  HRC

  NGS

 

  

 

Professional Experience:

 

Until her retirement in 2002, Ms. Odom was Chief Executive Officer and Board Chair at Software Spectrum, Inc., a global business to business software services company, which she co-founded in 1983. Prior to founding Software Spectrum, she was a partner with the international accounting firm, Grant Thornton.

 

Education:

 

Ms. Odom is a licensed Certified Public Accountant and holds a degree in business administration from Texas Tech University.

 

Public Company Boards:

 

Ms. Odom previously served as a director of Sabre, Inc., a technology solutions provider for the global travel and tourism industry, and of Harte-Hanks, a direct marketing service company.

 

Director Qualifications:

 

Ms. Odom’s director experience with several companies offers a broad leadership perspective on strategic and operating issues. Her experience co-founding Software Spectrum and growing it to a global Fortune 1000 enterprise before selling it to another public company provides the insight of a long-serving CEO with international operating experience.

 

 

 

 

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Election of Directors

 

 

  Srikanth Padmanabhan

 

 

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  Independent Director

 

  Director Since: 2018

  Age: 57

 

  Committees:

  Audit

  NGS

  

 

Professional Experience:

 

Mr. Padmanabhan has served Cummins Inc., a global manufacturer of engines and power solutions, as a Vice President since 2008 and President of its Engine Business segment since 2016. Previously, he served Cummins as Vice President—Engine Business from 2014 to 2016, Vice President and General Manager of Emission Solutions from 2008 to 2014, and in various other capacities since 1991.

 

Education:

 

Mr. Padmanabhan holds a bachelor’s degree in mechanical engineering from the National Institute of Technology in Trichy, India, a Ph.D. in mechanical engineering from Iowa State University, and has completed the Advanced Management Program at Harvard Business School.

 

Director Qualifications:

 

With over 30 years at Cummins in a variety of leadership roles, Mr. Padmanabhan offers considerable knowledge of the automotive industry and the industrial sector. He brings extensive experience in managing operations, technology and innovation across a multi-billion-dollar global business. He has lived and worked in India, the United States, Mexico, and the United Kingdom.

 

 

 

  Jai Shah

 

 

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  Independent Director

 

  Director Since: 2019

  Age: 55

 

  Committees:

  Audit

  HRC

  

 

Professional Experience:

 

Mr. Shah serves as a Group President of Masco Corporation, a Fortune 500 global leader in the design, manufacture and distribution of branded home improvement and building products. In this position since 2018, Mr. Shah has responsibility for operating companies with leading brands in architectural coatings, decorative and outdoor lighting, decorative hardware and wellness businesses in North America. Mr. Shah is also responsible for Masco’s Corporate Strategic Planning activities. He previously served as President of Delta Faucet Company, a Masco business unit, from 2014 to 2018, as Vice President and Chief Human Resources Officer for Masco from 2012 to 2014, and in various capacities since 2003. Prior to Masco, Mr. Shah held a number of senior management positions at Diversey Corporation and served as Senior Auditor for KPMG Peat Marwick Chartered Accountants.

 

Education:

 

Mr. Shah is a Certified Public Accountant and Chartered Professional Accountant (Canada) and holds an MBA from the University of Michigan, as well as bachelor’s and master’s degrees in accounting from the University of Waterloo in Ontario, Canada.

 

Director Qualifications:

 

Mr. Shah’s range of experience at Masco in a variety of operational, financial and corporate roles offers the Board a broad perspective on relevant issues facing global corporations, including growth strategy development and implementation, talent management, and adapting to e-business and market innovations.

 

 

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Election of Directors

 

 

  Phoebe A. Wood

 

 

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  Independent Director

 

  Director Since: 2005

  Age: 68

 

  Committees:

  Audit, Chair

  NGS

  

 

Professional Experience:

 

Ms. Wood has been a principal in CompaniesWood, a consulting firm specializing in early stage investments, since her 2008 retirement as Vice Chairman and Chief Financial Officer of Brown-Forman Corporation, a diversified consumer products manufacturer, where she had served since 2001. Ms. Wood previously held various positions at Atlantic Richfield Company, an oil and gas company, from 1976 to 2000.

 

Education:

 

Ms. Wood holds a degree in psychology from Smith College and an MBA from UCLA.

 

Public Company Boards:

 

Ms. Wood is a director of Invesco, Ltd., an independent global investment manager, Pioneer Natural Resources, an independent oil and gas company, and PPL Corporation, a utility and energy services company.

 

Director Qualifications:

 

From her career in business and various directorships, Ms. Wood provides the Board with a wealth of understanding of the strategic, financial and accounting issues the Board addresses in its oversight role.

 

 

The Board recommends that you vote FOR the election of each of the director nominees.

 

 

 

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Audit Related Matters

 

PROPOSAL TWO: Ratification of Independent Registered Public Accounting Firm

The Audit Committee is directly responsible for the appointment of the Company’s independent registered public accounting firm and has selected PricewaterhouseCoopers LLP (“PwC”) for the fiscal year ending December 31, 2022. PwC has been our independent registered public accounting firm continuously since 1991.

The Audit Committee regularly evaluates activities to assure continuing auditor independence, including whether there should be a regular rotation of the independent registered public accounting firm. As with all matters, the members of the Audit Committee and the Board perform assessments in the best interests of the Company and our investors and believe that the continued retention of PwC meets this standard.

Although shareholder ratification of the Audit Committee’s selection of PwC is not required by the Company’s bylaws or otherwise, the Board is requesting ratification as a matter of good corporate practice. If our shareholders fail to ratify the selection, it will be considered a direction to the Audit Committee to consider a different firm. Even if this selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change is in the best interest of the Company and our shareholders.

PwC representatives are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate shareholder questions.

The Board recommends that you vote FOR the ratification of PwC

as the independent registered public accounting firm.

Audit and Non-Audit Fees

The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent external audit firm, directly involved in the selection of the lead engagement partner, and responsible for the audit fee negotiations associated with retaining PwC. The fees billed or expected to be billed by PwC for professional services rendered in fiscal years 2021 and 2020 are shown below.

 

Type of Service

   2021      2020  

Audit Fees(1)

   $ 2,461,270      $  2,396,996  

Audit-Related Fees(2)

     22,768        132,970  

Tax Fees(3)

     811,850        231,406  

All Other Fees(4)

     9,196        14,075  
  

 

 

    

 

 

 

Total

   $  3,305,084      $  2,775,447  

 

  (1)

Includes rendering an opinion on the Company’s consolidated financial statements and the effectiveness of internal control over financial reporting; quarterly reviews of the Company’s financial statements; statutory audits, where appropriate; comfort and debt covenant letters; and services in connection with regulatory filings.

 

  (2)

Includes assessment of controls; consulting on accounting and financial reporting issues; and audits of employee benefit plans.

 

  (3)

Includes preparation and review of tax returns and tax filings; tax consulting and advice related to compliance with tax laws; tax planning strategies; and tax due diligence related to acquisitions and joint ventures. Of the tax fees listed above in 2021, $254,535 relates to compliance services and $557,315 relates to consulting and planning services.

 

  (4)

Includes use of an international tax reporting software and an internet-based accounting research tool.

 

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Audit Related Matters

 

Pre-Approval Procedures for Audit and Non-Audit Services

The Audit Committee has established a procedure for pre-approving the services performed by the Company’s auditors. All services provided by PwC in 2021 were approved in accordance with the adopted procedures. There were no services provided or fees paid in 2021 for which the pre-approval requirement was waived.

The procedure provides standing pre-approval for:

Audit Services: quarterly reviews of the Company’s financial statements; statutory audits, where appropriate; comfort and debt covenant letters; consents and assistance in responding to SEC comment letters; and services in connection with regulatory filings.

Audit-Related Services: consultation on new or proposed transactions, statutory requirements, or accounting principles; reports related to contracts, agreements, arbitration, or government filings; continuing professional education; financial statement audits of employee benefit plans; and due diligence and audits related to acquisitions and joint ventures.

Tax Services: preparation or review of Company and related entity income, sales, payroll, property, and other tax returns and tax filings and permissible tax audit assistance; preparation or review of expatriate and similar employee tax returns and tax filings; tax consulting and advice related to compliance with applicable tax laws; tax planning strategies and implementation; and tax due diligence related to acquisitions and joint ventures.

Any other audit, audit-related, or tax services provided by the Company’s auditors require specific Audit Committee pre-approval. The procedure requires the Audit Committee to specifically pre-approve the terms of the annual audit services engagement letter with the Company’s auditor, including all audit procedures required to render an opinion on the Company’s annual financial statements and on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee must also specifically approve, if necessary, any changes in terms of the annual audit engagement resulting from changes in audit scope, Company structure or other matters. The Audit Committee must also specifically approve in advance all other permissible Non-Audit Services to be performed by the Company’s auditors.

Management provides quarterly reports to the Audit Committee regarding the nature and scope of any non-audit services performed and any fees paid to the auditors for all services. The Audit Committee has determined that the provision of the approved Non-Audit Services by PwC in 2021 is compatible with maintaining PwC’s independence.

Audit Committee Report

The current Audit Committee is composed of six non-management directors who are independent as required by SEC and NYSE rules. The Audit Committee operates under a written charter adopted by the Board which is posted on the Company’s website at www.leggett.com/governance.

Management is responsible for the Company’s financial statements and financial reporting process, including the system of internal controls. PwC, our independent registered public accounting firm, is responsible for expressing an opinion on the conformity of the audited consolidated financial statements with accounting principles generally accepted in the United States.

The Audit Committee is responsible for monitoring, overseeing and evaluating these processes, providing recommendations to the Board regarding the independence of and risk assessment procedures used by our independent registered public accounting firm, selecting and retaining our independent registered public accounting firm, and overseeing compliance with various laws and regulations.

At its meetings, the Audit Committee reviewed and discussed the Company’s audited financial statements with management and PwC. The Audit Committee also discussed with PwC all items required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC.

 

 

 

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Audit Related Matters

 

The Audit Committee received the written disclosures and letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence and has discussed PwC’s independence with them.

The Audit Committee has relied on management’s representation that the financial statements have been prepared in conformity with accounting principles generally accepted in the United States and on the opinion of PwC included in their report on the Company’s financial statements.

Based on review and discussions with management and PwC referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s 2021 Annual Report on Form 10-K.

 

  Phoebe A. Wood (Chair)    Robert E. Brunner    Srikanth Padmanabhan   
  Mark A. Blinn    Mary Campbell    Jai Shah   

 

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Say on Pay

 

PROPOSAL THREE: Advisory Vote to Approve Named Executive Officer Compensation

Pursuant to Section 14A of the Securities Exchange Act of 1934, Leggett’s shareholders have the opportunity to vote on an advisory resolution, commonly known as “Say-on-Pay,” to approve the compensation of Leggett’s Named Executive Officers (NEOs), as described in the Executive Compensation and Related Matters section beginning on page 23.

Since Say-on-Pay was implemented in 2011, our shareholders have supported the compensation of our NEOs with over 90% of the vote (with 95% support in 2021). Our Board has adopted a policy providing for an annual Say-on-Pay vote.

Our Human Resources and Compensation Committee is committed to creating an executive compensation program that enables us to attract and retain a superior management team that has targeted incentives to build long-term value for our shareholders. The Company’s compensation package uses a mix of cash and equity-based awards to align executive compensation with our annual and long-term performance. These programs reflect the Committee’s philosophy that executive compensation should provide greater rewards for superior performance, as well as accountability for underperformance. At the same time, we believe our programs do not encourage excessive risk-taking by management. The Board believes that our philosophy and practices have resulted in executive compensation decisions that are appropriate and that have benefited the Company over time.

For these reasons, the Board requests our shareholders approve the compensation paid to the Company’s NEOs as described in this proxy statement, including the Compensation Discussion and Analysis, the executive compensation tables and the related footnotes and narrative accompanying the tables.

Because your vote is advisory, it will not be binding upon the Board; however, the HRC Committee and the Board have considered and will continue to consider the outcome of the vote when making decisions for future executive compensation arrangements.

The Board recommends that you vote FOR the Company’s Named Executive Officer compensation package.

Discretionary Vote on Other Matters

We are not aware of any business to be acted upon at the Annual Meeting other than the three items described in this proxy statement. Your signed proxy, however, will entitle the persons named as proxy holders to vote in their discretion if another matter is properly presented at the meeting. If one of the director nominees is not available as a candidate for director, the proxy holders will vote your proxy for such other candidate as the Board may nominate.

 

 

 

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Executive Compensation and Related Matters

 

Compensation Discussion & Analysis

Our Human Resources and Compensation Committee, currently consisting solely of independent directors, is committed to creating and overseeing an executive compensation program that enables Leggett & Platt to attract and retain a superior management team that has targeted incentives to build long-term value for our shareholders. To meet these objectives, the Committee has implemented a compensation package that:

 

   

Emphasizes performance-based equity programs.

 

   

Sets incentive compensation targets intended to drive performance and shareholder value.

 

   

Balances rewards between short-term and long-term performance to foster sustained excellence.

 

   

Motivates our executive officers to take appropriate business risks.

This Compensation Discussion and Analysis describes our executive compensation program and the decisions affecting the compensation of our Named Executive Officers (NEOs):

 

Name

   Title

Karl G. Glassman

  

Chairman and Chief Executive Officer through December 31, 2021 (former CEO) and current Executive Chairman

J. Mitchell Dolloff

   President and Chief Executive Officer as of January 1, 2022 (current CEO), and President and Chief Operating Officer (COO) through December 31, 2021

Jeffrey L. Tate

  

Executive Vice President and Chief Financial Officer (CFO)

Steven K. Henderson

  

Executive Vice President (EVP), President—Specialized Products and Furniture, Flooring & Textile (FF&T) Products

Scott S. Douglas

  

Senior Vice President (SVP)—General Counsel and Secretary

Executive Summary

This section provides an overview of our NEOs’ compensation structure, Leggett’s pay practices, and the Committee’s compensation risk management. Additional details regarding the NEOs’ pay packages, the Committee’s annual review of the executive officers’ compensation, and our equity pay practices are covered in the sections that follow.

 

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Compensation Discussion & Analysis

 

Structuring the Mix of Compensation

The Committee uses its judgment to determine the appropriate percentage of fixed and variable compensation, the use of short-term and long-term performance periods, and the split between cash and equity-based compensation. The final payment and value of the variable elements depends on actual performance and could result in no payout if threshold performance levels are not achieved. The following table shows the key attributes of our 2021 executive compensation structure used to drive performance and build long-term shareholder value.

 

 

    

Compensation Type

  

 

Fixed or
Variable

   Cash or
Equity-Based
  

    

Term

  

    

Basis for Payment

Base Salary

  

Fixed

  

Cash

  

1 year

  

Individual responsibilities, performance and experience with reference to external benchmarking

Annual Incentive

  

Variable

  

Cash

  

1 year

  

Return on capital employed (60% weighting) and cash flow (40% weighting)

Long-Term Incentive – two-thirds allocated to Performance Stock Units

  

Variable

  

Equity-
Based

  

3 years

  

Total shareholder return (TSR)(1) relative to peer group and the compound annual growth rate of earnings before interest and taxes (EBIT CAGR), weighted equally

Long-Term Incentive – one-third allocated to Restricted Stock Units

  

Variable

  

Equity-


Based

  

3 years

  

Value based on the Company’s share price as 1/3 of the award vests each year following the grant date

 

  (1) 

TSR is the change in stock price over the performance period plus reinvested dividends, divided by the beginning stock price. Leggett’s three-year TSR is measured relative to approximately 300 peer companies making up the industrial, materials and consumer discretionary sectors of the S&P 500 and S&P MidCap 400.

 

 

 

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Incentive Payouts in 2021

Our executives’ 2021 annual incentive payouts under the Key Officers Incentive Plan (KOIP) tracked the Company’s operational results in 2021, in which we generated cash flow, as defined in the KOIP, of $340 million (versus a target of $450 million and below the $375 million payout threshold) and 42.4% return on capital employed (versus a target of 37.5%, resulting in a 135% payout). The KOIP, including the calculations and targets for adjusted cash flow and return on capital employed (ROCE), is described on page 27.

 

 

 

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Compensation Discussion & Analysis

 

The Performance Stock Units (PSUs) granted in 2019 vested on December 31, 2021, with payouts based 50% on the Company’s relative TSR and 50% on EBIT CAGR. Leggett’s cumulative TSR from 2019 to 2021 was 24.3%, which placed us in the 22nd percentile of the peer group which was below the payout threshold. The Company’s 5.8% EBIT CAGR over the three-year performance period resulting in a 122.5% payout. The Company’s PSUs, including the calculation of EBIT CAGR and relative TSR, as well as the vesting schedules, are described on page 29.

CEO Incentive Compensation Payouts in 2021

 

 

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Sound Pay Practices

The Company is committed to executive compensation practices that align the interests of our executives with our shareholders:

 

           What We Do                                                                            What We Don’t Do                                                   
                       
   

 

  Pay for Performance – A significant majority of our NEOs’ compensation is at-risk variable compensation.

 

  Multiple Performance Metrics – Variable compensation is based on more than one measure to encourage balanced incentives.

 

  Incentive Award Caps – All of our variable compensation plans have maximum payout limits.

 

  Benchmarking – We compare our compensation package to market surveys and a customized peer group, and the Committee engages an independent consultant.

 

  Stock Ownership Requirements – All NEOs are subject to robust stock ownership requirements.

 

  Confidentiality & Non-Compete Agreements – All NEOs are subject to confidentiality and non-compete agreements.

 

  Clawbacks – Our policies exceed the mandates of Sarbanes-Oxley.

 

           

 

×  No Single-Trigger Change in Control – Our CIC-related cash severance and equity awards (other than legacy stock options) have a double trigger.

 

×  No Hedging or Pledging – We do not permit our executive officers to engage in either hedging or pledging activities with respect to Leggett shares.

 

×  No Excessive Perquisites – Perquisites represent less than 1% of our NEOs’ compensation.

 

×  No Employment Agreements – All of our NEOs are employed at-will.

 

×  No Repricing of Options or Cash Buyouts

 

×  No Share Recycling

 

×   No Dividends on Equity Awards Prior to Vesting

 

×  No Tax Gross-Ups

   

 

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Compensation Discussion & Analysis

 

CEO Transition and 2022 Compensation

On January 1, 2022, Mitch Dolloff became the Company’s Chief Executive Officer, after serving as Leggett’s Chief Operating Officer since 2019 and in various other capacities since 2000. In connection with Mr. Dolloff’s appointment as CEO and upon the Committee’s recommendation, the Board of Directors approved the following compensation package effective for 2022:

 

   

Base Salary – increased from $800,000 to $1,120,000

 

   

Target Annual Incentive – increased from 100% to 125%

 

   

Long-Term Incentive – base award increased from 343% to 400%

These adjustments were based upon benchmarking compensation data, Mr. Dolloff’s experience and prior compensation levels, internal pay equity, and the Company’s past practice with respect to CEO compensation. Mr. Dolloff also received a one-time promotional award of three-year RSUs valued at $1,000,000 granted on January 1, 2022.

At the same time, our former CEO, Karl Glassman, transitioned to the role of Executive Chairman. In this role, Mr. Glassman’s 2022 compensation package was set at $750,000 base salary, 100% target annual incentive, and 200% long-term incentive (granted solely in RSUs).

Since Mr. Glassman remained CEO through December 31, 2021, and Mr. Dolloff’s promotion was effective January 1, 2022, this Compensation Discussion and Analysis will address their respective compensation arrangements prior to the year-end CEO transition, unless otherwise noted.

Additional Investment in Leggett Stock

In addition to having pay packages that are heavily weighted to Leggett equity-based awards, for many years our NEOs have voluntarily deferred substantial portions of their cash compensation into Company stock through the Executive Stock Unit (ESU) Program and the Deferred Compensation Program. Through participation in these programs, particularly the ESU Program, in which Company equity is held until the executive leaves the Company, our NEOs are further invested in the long-term success of the Company.

Managing Compensation Risk

The Committee regularly reviews whether our executive compensation policies and practices (as well as those that apply to our employees generally) are appropriate and whether they create risks or misalignments that are reasonably likely to have a material adverse effect on the Company.

We believe that our compensation programs align our executives’ incentives for risk taking with the long-term best interests of our shareholders. We mitigate risk by allocating incentive compensation across multiple components. This structure is designed to reduce the incentive to take excessive risk because it:

 

   

Rewards achievement on a balanced array of performance measures, minimizing undue focus on any single target.

 

   

Stresses long-term performance, discouraging short-term actions that might endanger long-term value.

 

   

Combines absolute and relative performance measures.

 

   

Uses multiple long-term incentive vehicles, including Performance Stock Units and Restricted Stock Units with 3-year vesting schedules.

Additional safeguards against undue compensation risk include stock ownership guidelines, caps on all incentive payouts, and clawbacks for performance-based compensation.

 

 

 

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Compensation Discussion & Analysis

 

Impact of 2021 Say-on-Pay Vote

At our 2021 Annual Meeting, 95% of the votes cast on the Say-on-Pay proposal approved the compensation of our NEOs. The Committee believes that this shareholder vote strongly endorses the Company’s compensation philosophy and programs. The Committee took this support into account as one of many factors it considered in connection with the discharge of its responsibilities (as described in this Compensation Discussion and Analysis) in exercising its judgment in establishing and overseeing our executive compensation arrangements throughout the year.

Our Compensation Components and Programs

Base Salary

Base salary is the only fixed portion of our NEOs’ compensation package. Salary levels are intended to reflect specific responsibilities, performance and experience, while taking into account market compensation levels for comparable positions. Although base salary makes up less than one-fourth of our NEOs’ aggregate target compensation, it’s the foundation for the total package with the variable compensation components set as percentages of base salary:

 

Name

   2021
Base Salary
     Annual Incentive:
Target Percentage
of Base Salary
  LTI Awards:
            Target Percentage             
of Base Salary

Karl G. Glassman

   $ 1,225,000      125%   480%

J. Mitchell Dolloff

     800,000      100%   343%

Jeffrey L. Tate

     600,000        80%   250%

Steven K. Henderson

     541,000        80%   200%

Scott S. Douglas

     480,000        70%   175%

The Committee reviews and determines the NEOs’ base salaries (along with the rest of their compensation packages) during the annual review, which is discussed on page 33.

Annual Incentive

Our NEOs earn their annual incentive, a cash bonus paid under the KOIP, based on achieving certain performance targets for the year.

Our executive officers are divided into two groups under the KOIP for 2021, depending upon their areas of responsibility: (i) corporate participants (Glassman, Dolloff, Tate, and Douglas), whose performance criteria and payouts are based on the Company’s overall results, and (ii) Mr. Henderson as a profit center participant whose performance targets are set for the operations under his control.

Each NEO has a target incentive amount—the amount received for achieving exactly 100% of all performance goals. The target incentive amount is the officer’s base salary multiplied by his target incentive percentage. At the end of the year, the target incentive amount is multiplied by the payout percentages for the various performance metrics (each with its own weighting) to determine the annual incentive payout.

 

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Compensation Discussion & Analysis

 

Performance Metrics. The Committee chose ROCE(1) as the primary incentive target with a 60% weighting to improve earnings and maximize returns on key assets by carefully managing working capital and fixed asset investments. The other 40% of the annual incentive is based upon cash flow(2), which is critical to fund the Company’s ongoing operations, capital expenditures, dividends and deleveraging. Profit center participants are also subject to an adjustment ranging from a potential 5% increase for exceptional safety performance to a 20% deduction for their operations’ failure to achieve safety, audit and environmental standards.

 

(1) 

Return on Capital Employed (ROCE) = Earnings Before Interest and Taxes (EBIT) ÷ quarterly average of Net Plant Property and Equipment (PP&E) and Working Capital (excluding cash and current maturities of long-term debt).

 

(2) 

For corporate participants: Cash Flow = Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) +/- Change in Working Capital (excluding cash and current maturities of long-term debt) + Non-Cash Impairments – Capital Expenditures.

For profit center participants: the same formula is used, except (i) EBITDA is adjusted for currency effects and (ii) change in working capital excludes balance sheet items not directly related to ongoing activities.

ROCE and cash flow calculations are adjusted for all items of gain, loss or expense (i) from non-cash impairments; (ii) related to loss contingencies identified in the Company’s 10-K relating to the fiscal year immediately preceding the performance period; (iii) related to the disposal of a segment of a business; or (iv) related to a change in accounting principle. Financial results from acquisitions are excluded from calculations in the year of acquisition. Financial results from businesses divested during the year are included, but 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 are included in the calculations. Financial results 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.

Targets and Payout Schedules. Upon selecting the metrics, the Committee established performance targets and payout schedules. In setting the payout schedules, the Company evaluated various payout scenarios before selecting one that struck a balance between accountability to shareholders and motivation for participants. The payout for each portion of the annual incentive is capped at 150%.

 

                    2021 Corporate Payout Schedule   2021 Profit Center Payout Schedule    

 

                      

 

ROCE and Free Cash Flow

(Relative to Target)

 

 

ROCE(1)

       

 

Cash Flow (millions)(1)

    

 

    Achievement

 

  

 

Payout    

 

  

 

Achievement

 

  

 

Payout    

 

       

 

Achievement(2)

 

 

 

Payout

 

<30.5%        0%         <$375        0%   

 

   <75%   0%
  30.5%      50%             375      50%   

 

   75%   50%
  37.5%    100%             450    100%   

 

   100%   100%
  44.5%    150%             525    150%   

 

   125%   150%

 

(1)

The 2021 results for corporate participants (Glassman, Dolloff, Tate, and Douglas) were 42.4% ROCE (resulting in a 135% payout) and $340 million of cash flow (resulting in a 0% payout).

 

(2)

As a profit center participant, Mr. Henderson’s target for a 100% payout was 42.6% ROCE (43.2% actual resulting in a 103% payout) and $286.6 million free cash flow ($224 million actual resulting in a 56% payout) for the Specialized and FF&T Segments.

 

 

 

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Compensation Discussion & Analysis

 

The following table provides the details of the 2021 annual incentive payouts for our NEOs:

 

 

  Name

 

 

 

Target Incentive Amount

 

         

 

Weighted Payout Percentage

 

         

 

Annual Incentive Payout

 

 

Karl G. Glassman

 

 

$1,531,250

 

 

 

x

 

 

81.0%

 

 

 

=

 

 

 

$1,240,313

 

 

 

Salary

 

 

 

x

 

 

 

Target %

 

   

Metric

 

 

Payout 

% 

 

 

x

 

 

 

Weight

 

   
 

 

$1,225,000

 

   

 

125%

 

   

ROCE

 

 

135%

 

   

 

60%

 

   
                                   

Cash Flow

 

 

0%

 

         

 

40%

 

               

J. Mitchell Dolloff

 

 

$800,000

 

 

 

x

 

 

81.0%

 

 

 

=

 

 

 

$648,000

 

 

 

Salary

 

 

 

x

 

 

 

Target %

 

   

Metric

 

 

Payout %

 

 

 

x

 

 

 

Weight

 

   
 

 

$800,000

 

   

 

100%

 

   

ROCE

 

 

135%

 

   

 

60%

 

   
                   

Cash Flow

 

 

0%

 

         

 

40%

 

               

Jeffrey L. Tate

 

 

$480,000

 

 

 

x

 

 

81.0%

 

 

 

=

 

 

 

$388,800

 

 

 

Salary

 

 

 

x

 

 

 

Target %

 

   

Metric

 

 

Payout 

% 

 

 

x

 

 

 

Weight

 

   
 

 

$600,000

 

   

 

80%

 

   

ROCE

 

 

135%

 

   

 

60%

 

   
                                   

Cash Flow

 

 

0%

 

         

 

40%

 

               

Steven K. Henderson

 

 

$432,800

 

 

 

x

 

 

85.2%

 

 

 

=

 

 

 

$368,746

 

 

 

Salary

 

 

 

x

 

 

 

Target %

 

   

Metric

 

 

Payout %

 

 

 

x

 

 

 

Weight

 

   
 

 

$541,000

 

   

 

80%

 

   

ROCE

 

 

103%

 

   

 

60%

 

   
         

FCF

 

 

56%

 

   

 

40%

 

   
                                   

+1% Compliance Adjustment

 

               

Scott S. Douglas

 

 

$336,000

 

 

 

x

 

 

81.0%

 

 

 

=

 

 

 

$272,160

 

 

 

Salary

 

 

 

x

 

 

 

Target %

 

   

Metric

 

 

Payout 

% 

 

 

x

 

 

 

Weight

 

   
 

 

$480,000

 

   

 

70%

 

   

ROCE

 

 

135%

 

   

 

60%

 

   
                                   

Cash Flow

 

 

0%

 

         

 

40%

 

               

Long-Term Incentive, Equity-Based Awards

Since 2020, the LTI awards for our executive officers have been allocated as follows:

 

   

Two-thirds of the target award value is granted as performance stock units (PSUs) with payouts based 50% on relative TSR and 50% on EBIT CAGR over a three-year performance period.

 

   

One-third of the target award value is granted as restricted stock units (RSUs) vesting in one-third increments over three years.

Three-Year Performance Stock Units. We grant performance stock units to our NEOs and other senior managers to tie their pay to the Company’s performance and shareholder returns. The payouts from these equity-based awards reflect our philosophy that executive compensation should provide greater rewards for superior performance, as well as accountability for underperformance.

 

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Leggett’s long-term focus emphasizes profitable growth and the Company’s TSR relative to peer companies. The PSU awards support our operational and market-based goals by allocating 50% of payout to EBIT CAGR results and 50% to our relative TSR performance. The vesting schedules for the PSU awards are as follows:

 

 

Relative TSR(1)

Percentile

 

  

 

Relative TSR
Vesting %

 

25%

   25%

30%

   35%

35%

   45%

40%

   55%

45%

   65%

50%

   75%

55%

   100%

60%

   125%

65%

   150%

70%

   175%

75%

   200%

 

 

EBIT CAGR(2)

%

 

  

 

EBIT CAGR

Vesting %

 

2%    75%
4%    100%
6%    125%
8%    150%
10%    175%
12%    200%
 

 

(1)

Relative TSR is the Company’s Total Shareholder Return compared to a peer group consisting of all the companies in the industrial, materials and consumer discretionary sectors of the S&P 500 and S&P MidCap 400 (approximately 300 companies). Although Leggett was a member of the S&P 500 until December 2021, our market capitalization is significantly below that group’s median, so the Committee included the S&P MidCap 400 in the group as well. In addition, nearly all of our business units fall into these industry sectors.

 

(2)

EBIT CAGR is the Company’s or applicable profit centers’ compound annual growth rate of Earnings Before Interest and Taxes (EBIT) in the third fiscal year of the performance period compared to the Company’s (or applicable profit centers’) EBIT in the fiscal year immediately preceding the performance period. The calculation of EBIT CAGR includes results from businesses acquired during the performance period and excludes results for any businesses divested during the performance period. EBIT CAGR also excludes (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, and (v) with respect to profit centers, all amounts relating to corporate allocations. EBIT CAGR will be adjusted to eliminate gain, loss or expense, 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 10-K relating to the fiscal year immediately preceding the performance period; (iii) related to the disposal of a segment of a business; or (iv) related to a change in accounting principle.

Three-Year Restricted Stock Units. Beginning in 2020, one-third of our executives’ LTI awards were granted as RSUs vesting in one-third increments over three years. The unvested RSUs do not accrue dividends. The variable payout of the RSUs based on the Company’s stock price ties the executives’ compensation to the Company’s performance, but the time-based vesting offers an appropriate level of stability to their equity-based compensation.

In addition to Mr. Henderson’s LTI target award percentage approved by the Committee during the annual review as described on page 34, he also receives an annual award of 4,000 RSUs. This annual award was negotiated as part of Mr. Henderson’s pay package when he joined the Company in 2017.

Other Compensation Programs

The NEOs voluntarily defer substantial portions of their cash compensation into Leggett equity through the Executive Stock Unit Program and the Deferred Compensation Program to build an additional long-term stake in the Company. The Company also provides 401(k) and non-qualified excess plans in which some of our executives choose to participate.

Executive Stock Unit Program. All our NEOs participate in the ESU Program, our primary executive retirement plan. These accounts are held until the executive’s employment is terminated.

 

 

 

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The ESU Program is a non-qualified retirement program that allows executives to make pre-tax deferrals of up to 10% of their compensation into diversified investments. We match 50% of the executive’s contribution in Company stock units, purchased at a 15% discount, which may increase up to a 100% match if the Company meets annual ROCE targets linked to the KOIP. The Company makes an additional 17.65% contribution to the diversified investments acquired with executive contributions. Matching contributions vest once employees have participated in the ESU Program for five years. Leggett stock units held in the ESU Program accrue dividends, which are used to acquire additional stock units at a 15% discount. At distribution, the balance of the diversified investments is paid in cash. Although the Company intends to settle the stock units in shares of the Company’s common stock, it reserves the right to distribute the balance in cash if sufficient shares are not available under the Flexible Stock Plan.

Deferred Compensation Program. The Deferred Compensation Program allows key managers to defer up to 100% of salary, incentive awards and other cash compensation in exchange for any combination of the following:

 

   

Stock units with dividend equivalents, acquired at a 20% discount to the fair market value of our common stock on the dates the compensation or dividends otherwise would have been paid.

 

   

At-market stock options with the underlying shares of common stock having an initial market value five times the amount of compensation forgone, with an exercise price equal to the closing market price of our common stock on the grant date (December 15 of the year in which the deferral election is made).

 

   

Cash deferrals accruing interest at a rate intended to be slightly higher than otherwise available for comparable investments.

Participants who elect a cash or stock unit deferral can receive distributions in a lump sum or in annual installments. Distribution payouts must begin no more than 10 years from the effective date of the deferral and all amounts subject to the deferral must be distributed within 10 years of the first installment. Although the Company intends to settle the stock units in shares of the Company’s common stock, it reserves the right to distribute the balance in cash if sufficient shares are not available under the Flexible Stock Plan. Participants who elect at-market stock options, which have a 10-year term, may exercise them approximately 15 months after the start of the year in which the deferral was made.

Retirement K and Excess Plan. The Company’s defined benefit Retirement Plan was frozen in 2006 (see description on page 42). Employees who had previously participated in the Retirement Plan were offered a replacement benefit: a tax-qualified defined contribution Section 401(k) Plan (Retirement K). The Retirement K includes an age-weighted Company matching contribution designed to replicate the benefits lost by the Retirement Plan freeze. Employees who did not participate in the Retirement Plan when it was frozen in 2006 are eligible to contribute to the Company’s 401(k) plan with an alternate matching contribution schedule.

Many of our officers cannot fully participate in the Retirement K due to limitations imposed by the Internal Revenue Code or the Employee Retirement Income Security Act, or due to their participation in the Deferred Compensation Program. Consequently, we maintain a non-qualified Retirement K Excess Plan which permits affected executives to receive the full matching benefit they would otherwise have been entitled to under the Retirement K. Amounts earned in the Retirement K Excess Plan are paid out in cash no later than March 15 of the following year and are eligible for the Deferred Compensation Program.

Business Unit Profit Sharing Program. Prior to Mr. Henderson’s promotion to Executive Vice President and President of the Specialized and FF&T Segments at the start of 2020, he received awards under the Company’s Business Unit Profit Sharing (BUPS) program. The BUPS is a long-term, performance-based incentive program in which participants earn a cash bonus based on a percentage of the incremental EBIT produced by the business unit(s) they manage, subject to an individual payout cap and an aggregate payout cap for all participants in the business units. For Mr. Henderson’s 2019 BUPS award (which vested on December 31, 2021), he was eligible to receive a 1.5% share of the incremental EBIT produced by the business units under his direction in the three years of the performance period in excess of the EBIT produced by those businesses in 2018 (the base year for the 2019 award), subject to a cap of 150% of his 2019 base salary.

 

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Perquisites and Personal Benefits. The Committee believes perquisites should not be a significant part of our executive compensation program. In 2021, perquisites were less than 1% of each NEO’s total compensation and consisted of use of a Company car and limited personal use of corporate aircraft by our CEO.

Given the location of the Company’s headquarters away from any major metropolitan area, the Committee wished to facilitate Mr. Glassman’s schedule and allow him to more efficiently attend to Company business by offering him limited personal use of corporate aircraft, when the aircraft is not scheduled for business purposes. The use of corporate aircraft for personal travel by Mr. Glassman and his guests is subject to an annual limit of $100,000 in aggregate incremental cost to the Company, including the cost of “deadhead” flights necessitated by such personal use. The Company does not provide tax reimbursements to Mr. Glassman for any taxes arising from imputed income relating to his use of the corporate aircraft for personal travel by him or his guests.

Effective January 1, 2022, Mr. Dolloff will be allowed to use the Company aircraft for personal travel for him and his guests subject to the aircraft not being scheduled for business purposes and his reimbursing the Company for the aggregate incremental cost of such flights, including the costs of any deadhead flights necessitated by such personal use (subject to any applicable reimbursement limits imposed by the Federal Aviation Administration).

We believe these benefits are appropriate when viewed in the overall context of our executive compensation program.

How Compensation Decisions Are Made

The Committee uses its informed judgment to determine the appropriate type and mix of compensation elements; to select performance measures, target levels and payout schedules for incentive compensation; and to determine the level of salary and incentive awards for each executive officer. The Committee may delegate its duties and responsibilities to one or more Committee members or Company officers, as it deems appropriate, but may not delegate authority to non-members for any action involving executive officers. The full Board must review and approve certain actions, including any employment agreements, severance benefit agreements, and amendments to stock plans.

The Committee has the authority to engage its own external compensation consultant as needed and has engaged Meridian Compensation Partners, LLC as its independent consultant since 2012. The Company conducts an annual conflict of interest assessment, which the Committee reviews to verify, in the Committee’s judgment, Meridian’s independence and that no conflicts of interest exist. Meridian does not provide any other services to the Company and works with the Company’s management only on matters for which the Committee is responsible.

In 2021, Meridian advised on selecting a peer group of companies for executive compensation benchmarking, provided comparative data for the annual executive compensation review described below, and assisted with other compensation matters as requested. Representatives from Meridian also attend Committee meetings on request.

The Company’s Human Resources and Legal Departments also provide compensation data, research and analysis that the Committee may request, and personnel from those departments along with Mr. Glassman and Mr. Dolloff, attend Committee meetings. However, the Committee regularly meets in executive session without management present to discuss CEO performance and compensation, as well as any other matters deemed appropriate by the Committee.

The CEO recommends to the Committee compensation levels for the other executive officers, including salary increases, annual incentive targets and long-term incentive award values, based on his assessment of each executive’s performance and level of responsibility. The Committee evaluates those recommendations and accepts or makes adjustments as it deems appropriate.

 

 

 

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Compensation Discussion & Analysis

 

The Annual Review and Use of Compensation Data

The Committee conducted the annual review of executive compensation at its February 2021 meeting to set the executive officers’ compensation for the year.

During the annual review, the Committee evaluates the three primary elements of the annual compensation package for executive officers: base salary, annual incentive, and long-term incentive awards. As discussed above, increases to base salary affect the other elements of the compensation package because the variable compensation elements (annual incentive and long-term incentive awards) are each set as a percentage of base salary. The Committee also reviews the secondary compensation elements, such as voluntary equity plans and retirement plans, as well as potential payments upon termination or change in control. Decisions about secondary and post-termination compensation elements are made as the plans or agreements giving rise to the compensation are reviewed.

In connection with the annual review, the Committee evaluates the following data presented by the Company and Meridian to consider each executive’s compensation package in the context of past decisions, internal pay relationships and the external market:

 

   

Compensation data available from proxy filings of the executive compensation peer group, and two general industry surveys published by national consulting firms (described more fully below).

 

   

Current annual compensation for each executive officer.

 

   

The potential value of each executive officer’s compensation package under three Company performance scenarios (threshold, target and maximum payout).

 

   

Comparison of CEO target and realizable pay for the prior five years.

 

   

The cash-to-equity ratio and fixed-to-variable pay ratio of each executive officer’s compensation package.

 

   

Compliance with our stock ownership requirements and a summary of outstanding equity awards.

Among the factors the Committee considers when making compensation decisions is the compensation of our NEOs relative to the compensation paid to similarly-situated executives in our markets. We believe, however, that a benchmark should be just that—a point of reference for measurement, not the determinative factor for our executives’ compensation. Because the comparative compensation information is just one of several analytic tools used in setting executive compensation, the Committee has discretion in determining the nature and extent of its use.

Benchmarking Against Peer Companies. In the annual review, the Committee used a peer group to provide additional insight into company-specific pay levels and practices. The Committee evaluates market data provided by compensation surveys and views the use of a peer group as an additional reference point when reviewing the competitiveness of NEO pay levels.

In developing the peer group, the Committee directed Meridian to focus on companies in comparable industries with a similar size and scope of business operations as Leggett. The Committee periodically reviews the composition of the peer group to ensure these companies remain relevant for comparative purposes.

 

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Prior to the annual review to set 2021 compensation, the Committee approved the following peer group of 16 U.S. based, publicly traded manufacturing companies, with Leggett near the group’s median revenue and market capitalization:

 

Allegion PLC    HNI Corporation
American Axle & Manufacturing Holdings, Inc.    Lennox International Inc.
A. O. Smith Corporation    Masco Corporation
Carlisle Companies, Incorporated    MillerKnoll, Inc.
Cooper-Standard Holdings Inc.    Owens Corning
Dana Incorporated    PENTAIR plc
Flowserve Corporation    Tempur Sealy International, Inc.
Fortune Home Brands & Security, Inc.    Tenneco Inc.

The 2021 peer group included the same companies as the prior year.

Compensation Survey Data. The Committee used broad-based compensation surveys published by Willis Towers Watson (General Industry Executive Compensation Survey) and Aon Hewitt (Total Compensation Measurement) to develop a balanced picture of the compensation market.

The Committee reviewed data from large companies across all industries (with median revenue of $4.1 billion) from the Willis Towers Watson survey and large manufacturing companies (with median revenue of $4.6 billion) from the Aon Hewitt survey. The Committee referenced market benchmarks that most closely match the NEOs’ job descriptions; however, the Committee was not made aware of the specific companies in the applicable survey groups.

The Committee used the peer group and compensation surveys to get a general sense of the competitive market. These sources generally showed our executive officers’ compensation was in line with median total compensation with an above-average percentage of at-risk, performance-based pay. Individual pay levels may vary relative to the market median for a number of reasons, including, but not limited to, tenure, responsibilities, and performance.

Additional Considerations. Although the Committee views benchmarking data as a useful guide, it gives significant weight to (i) the mix of fixed to variable pay, (ii) the ratio of cash to equity-based compensation, (iii) internal pay equity, and (iv) individual responsibilities, experience and merit when establishing base salaries, annual incentive percentages, and long-term incentive award percentages. While the Committee monitors these pay relationships, it does not target any specific pay ratios.

The Committee also considers the Company’s merit increase budget for all salaried U.S. employees in determining salary increases for executive officers.

Changes to the NEOs’ 2021 Compensation. In connection with the 2021 executive officers’ compensation review:

 

   

Mr. Glassman’s base salary was unchanged for the second year in a row, his Annual Incentive percentage was increased from 120% to 125%, and his LTI award percentage was increased from 458% to 480%.

 

   

Mr. Dolloff’s base salary was increased from $700,000 to $800,000 and his LTI award percentage was increased from 300% to 343%, while his Annual Incentive percentage was unchanged.

 

   

Mr. Tate’s base salary was increased from $570,000 to $600,000, and his Annual Incentive and LTI award percentages were unchanged.

 

   

Mr. Henderson’s base salary was increased from $530,000 to $541,000, while his Annual Incentive and LTI award percentages were unchanged.

 

   

Mr. Douglas’ base salary was increased from $450,000 to $480,000 and his Annual Incentive percentage was increased from 60% to 70%, while his LTI award percentage was unchanged.

 

 

 

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Equity Grant Practices

 

The Committee discussed the 2021 LTI awards at length at its November 2020 meeting, then approved the 2021 RSU and PSU awards at its February 2021 meeting. The Committee does not approve current market priced grants of equity-based awards when it is aware of material inside information.

Performance of Past Equity-Based Awards. The Committee monitors the value of past equity-based awards to gain an overall assessment of how current compensation decisions fit with past practices and to determine the executives’ accumulated variable compensation. However, the Committee does not increase current-year equity-based awards, or any other aspect of the NEOs’ compensation, to adjust for below-expected performance of past equity-based awards.

Clawback Provisions. All equity-based awards are subject to a clawback provision included in our Flexible Stock Plan, which allows the Committee to cancel all or any portion of an award if the recipient (i) violates any confidentiality, non-solicitation or non-compete obligations or terms in an award, employment agreement, confidentiality agreement, separation agreement, or any other similar agreement, (ii) engages in improper conduct contributing to the need to restate any external Company financial statement, (iii) commits an act of fraud or significant dishonesty, or (iv) commits a significant violation of any of the Company’s written policies or applicable laws. Under the Flexible Stock Plan, the Committee may require an award recipient to forfeit and repay to the Company any or all of the income or other benefit received on the vesting, exercise, or payment of an award (i) in the preceding two years if, in its discretion, the Committee determines that the recipient engaged in any of the foregoing activities and that such activity resulted in a significant financial or reputational loss to the Company, (ii) to the extent required under applicable law or securities exchange listing standards, or (iii) to the extent required or permitted under any written policy of the Company dealing with recoupment of compensation, subject to any limits of applicable law.

In addition, the award documents for our PSU awards include clawback provisions triggered if the Company is required to restate previously reported financial results. Following a restatement within 24 months after the awards vest, all recipients must repay any amounts paid in excess of what would have been paid under the restated results. In addition, the Committee may require repayment of the entire award from any award recipients determined to be personally responsible for gross misconduct or fraud that caused the need for the restatement.

Executive Stock Ownership Guidelines. The Committee believes executive officers should maintain a meaningful ownership stake in the Company to align their interests with those of our shareholders. We expect executive officers to attain the following levels of stock ownership within five years of appointment and to maintain those levels throughout their employment.

 

Position

 

  

Ownership Requirement  

 

CEO and Board Chairman

   5X base salary

CFO, COO and EVP

   3X base salary

All Other Executive Officers

   2X base salary

Shares of the Company’s stock owned outright, stock units and net shares acquirable upon the exercise of deferred compensation stock options count toward satisfying the ownership totals. A decline in the stock price can cause an executive officer who previously met the threshold to fall below it temporarily. After five years from appointment, an executive officer who has not met the ownership requirement or falls below it due to a stock price decline, may not sell Leggett shares and must hold any net shares acquired upon the exercise of stock options or vesting of stock units until the ownership threshold is met. As of March 8, 2022, all our NEOs were in compliance with their stock ownership requirements.

 

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Hedging and Pledging Policy. The Company’s insider trading policy prohibits its directors, officers and employees from transactions related to Leggett securities involving short sales, having put equivalent positions, buying or selling exchange-traded options and hedging transactions, which include purchase and sale of options, zero cost collars and forward sale contracts. The policy also prohibits all directors and Section 16 officers from pledging Leggett securities as collateral for a loan, including in a margin account.

Change in Control Agreements

 

Our NEOs do not have employment agreements and are all considered at-will employees.

Each of our NEOs has a severance benefit agreement which is designed to protect both the executive officer’s and the Company’s interests in the event of a change in control of the Company, as described on page 44.

The benefits provided under the severance benefit agreements do not impact the Committee’s decisions regarding other elements of the executive officers’ compensation. Because these agreements provide contingent compensation, not regular compensation, they are evaluated separately in view of their intended purpose.

Tax Considerations

 

For tax years prior to 2018, Section 162(m) of the Internal Revenue Code generally disallowed an income tax deduction to public companies for compensation over $1 million paid to certain executive officers; however, qualifying performance-based compensation was not subject to the deduction limit if certain requirements were met. As a result of the Tax Cuts and Jobs Act eliminating the performance-based compensation exception under Section 162(m), the Company currently expects that, with respect to 2018 and beyond, any compensation amounts over $1 million paid to any NEO will no longer be tax deductible unless grandfathered under the exception for pre-existing contractual arrangements.

Human Resources and Compensation Committee Report

The Human Resources and Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis with management, and, based on that review and discussion, the Committee has recommended to the Board of Directors that this Compensation Discussion & Analysis be included in this proxy statement.

 

Robert E. Brunner (Chair)

Mark A. Blinn

Manuel A. Fernandez

  

Joseph W. McClanathan

Judy C. Odom

Jai Shah

 

 

 

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Executive Compensation and Related Matters

 

Summary Compensation Table

The following table reports the total 2021 compensation of our Chief Executive Officer, Chief Financial Officer, and our three other most highly compensated executive officers as of December 31, 2021. Collectively, we refer to these five executives as the “Named Executive Officers” or “NEOs.”

 

Name and Principal Position

 

  

Year

 

    

Salary(1)(3)

 

    

Bonus(1)

 

    

Stock

Awards(1)(2)(4)

 

    

Non-Equity

Incentive Plan

Compensation(1)(2)(3)

 

    

 

Change in

Pension Value;

Nonqualified

Deferred

Compensation

Earnings(5)

 

    

All Other

Compensation

(3)(6)

 

    

Total

 

 

Karl G. Glassman

Chairman and Chief Executive

Officer through 12/31/2021 and current Executive Chairman

  

 

2021

 

  

 

$1,225,000

 

     

 

$5,912,456

 

  

 

$1,240,313

 

  

 

$124,281

 

  

 

$708,916

 

  

 

$9,210,966

 

  

 

2020

 

  

 

1,130,769

 

     

 

4,922,296

 

  

 

1,758,120

 

  

 

153,182

 

  

 

778,448

 

  

 

8,742,815

 

  

 

2019

 

  

 

1,225,000

 

           

 

6,117,860

 

  

 

1,908,060

 

  

 

163,436

 

  

 

779,556

 

  

 

10,193,912

 

J. Mitchell Dolloff

Chief Operating Officer through

12/31/2021 and current President and Chief Executive Officer

  

 

2021

 

  

 

780,769

 

     

 

2,414,277

 

  

 

648,000

 

  

 

40,444

 

  

 

334,672

 

  

 

4,218,162

 

  

 

2020

 

  

 

646,154

 

     

 

1,842,421

 

  

 

837,200

 

  

 

34,555

 

  

 

346,234

 

  

 

3,706,564

 

  

 

2019

 

  

 

596,615

 

     

 

2,076,245

 

  

 

796,800

 

  

 

25,861

 

  

 

355,070

 

  

 

3,850,591

 

                                                                       

Jeffrey L. Tate(1)

Executive VP and Chief Financial

Officer

  

 

2021

 

  

 

594,231

 

     

 

1,432,843

 

  

 

388,800

 

  

 

2,196

 

  

 

164,713

 

  

 

2,582,783

 

  

 

2020

 

  

 

526,154

 

     

 

1,250,206

 

  

 

545,376

 

  

 

468

 

  

 

148,349

 

  

 

2,470,553

 

  

 

2019

 

  

 

167,115

 

  

 

$250,000

 

  

 

1,645,901

 

  

 

188,615

 

           

 

36,468

 

  

 

2,288,099

 

Steven K. Henderson(2)

Executive VP, President—

Specialized and FF&T Products

  

 

2021

 

  

 

538,885

 

     

 

1,226,872

 

  

 

368,746

 

  

 

5,904

 

  

 

155,125

 

  

 

2,295,532

 

  

 

2020

 

  

 

489,231

 

     

 

1,023,950

 

  

 

415,074

 

  

 

3,854

 

  

 

140,786

 

  

 

2,072,895

 

                                                                       

Scott S. Douglas

Senior VP— General Counsel and

Secretary

  

 

2021

 

  

 

474,231

 

     

 

791,828

 

  

 

272,160

 

  

 

13,166

 

  

 

216,344

 

  

 

1,767,729

 

  

 

2020

 

  

 

415,385

 

     

 

690,893

 

  

 

322,920

 

  

 

43,780

 

  

 

221,704

 

  

 

1,694,682

 

  

 

2019

 

  

 

418,462

 

           

 

847,666

 

  

 

327,096

 

  

 

63,853

 

  

 

131,007

 

  

 

1,788,084

 

 

(1) 

Mr. Tate became an NEO of the Company upon his appointment as Chief Financial Officer on September 3, 2019. Mr. Tate’s 2019 salary and annual incentive award under the KOIP were prorated for the partial year he worked for the Company. As an inducement to join the Company, Mr. Tate received a one-time cash incentive of $250,000. He also received a sign-on grant of $500,000 in time-based restricted stock units (RSUs), which vest in one-third increments on the first, second and third anniversaries of the grant date. Mr. Tate also received two interim PSU awards based upon his starting base salary and 250% PSU award multiple, but adjusted for the length of time remaining in their respective performance periods—for the 2018 PSU award with one year remaining in the three-year performance period, he received a one-third prorated award, and for the 2019 PSU award with two years remaining, he received a two-thirds prorated award.

 

(2) 

Mr. Henderson became an NEO of the Company for the first time in 2020. In addition to Mr. Henderson’s LTI target awards approved by the Committee during the annual review as described on page 34, he also receives an annual award of 4,000 RSUs. This annual award was negotiated as part of Mr. Henderson’s pay package when he joined the Company in 2017. In addition to the cash incentive paid to Mr. Henderson for 2021 results under the KOIP, he was also eligible to receive a cash payment under the BUPS (described at page 31) based upon a percentage of the incremental EBIT produced by the business units he managed for the three-year period ending December 31, 2021; however, the EBIT results of these businesses did not result in a payout for this performance period.

 

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Executive Compensation and Related Matters

 

(3) 

Amounts reported in these columns include cash compensation (base salary, non-equity incentive plan compensation and certain other cash items) that was deferred into the ESU Program (to acquire diversified investments) and/or the Deferred Compensation Program (to acquire, at the NEO’s election, an interest-bearing cash deferral, Leggett stock units, or an option to purchase Leggett stock), as follows:

 

                         

Deferred Compensation Program

 

Name

 

  

Year

 

    

Total Cash

Compensation

Deferred

 

    

ESU

($)

 

    

Cash

Deferral

($)

 

    

Stock

Options

(#)

 

    

Stock

Units

(#)

 

 

Karl G. Glassman

     2021      $ 838,870      $ 238,865              16,386  
     2020        1,067,860        267,860              26,165  
       2019        1,510,297        310,297                 55,051        24,285  

J. Mitchell Dolloff

     2021        580,919        139,804              14,050  
     2020        663,692        144,952              14,372  
       2019        853,362        136,350                          22,267  

Jeffrey L. Tate

     2021        193,533        95,230              2,925  
     2020        211,162        104,068              3,141  
       2019        34,848        34,848                             

Steven K. Henderson

     2021        157,745        87,690              1,913  
       2020        184,230        82,090                          3,046  

Scott S. Douglas

     2021        361,394        71,566              9,536  
     2020        397,706        70,700              8,770  
       2019        402,805        71,572                 45,587           

 

  

See the Grants of Plan-Based Awards Table on page 40 for further information on Leggett equity-based awards received in lieu of cash compensation in 2021.

 

(4) 

Amounts reported in this column reflect the grant date fair value of the PSU awards and RSU awards as detailed in the table below. For a description of the assumptions used in calculating the grant date fair value, see Note L to Consolidated Financial Statements to our Annual Report on Form 10-K for the year ended December 31, 2021. The potential maximum value of the PSU awards on the grant date are also included in the table below.

 

Name

 

  

Year

 

    

PSU Awards:

Grant Date

Fair Value

 

    

PSU Awards:

Potential

Maximum

Value at

Grant Date

 

    

RSU
Awards:

Grant Date

Fair Value

 

 

Karl G. Glassman

     2021      $ 4,059,449      $ 8,118,898      $ 1,853,007  
     2020        3,212,055        6,424,100        1,710,241  
       2019        6,117,860        12,235,720           

J. Mitchell Dolloff

     2021        1,657,631        3,315,262        756,646  
     2020        1,202,276        2,404,553        640,145  
       2019        2,076,245        4,152,491           

Jeffrey L. Tate

     2021        983,783        1,967,566        449,060  
     2020        815,811        1,631,621        434,395  
       2019        1,217,507        2,435,013        428,394  

Steven K. Henderson

     2021        731,795        1,463,591        495,077  
       2020        606,848        1,213,695        417,102  

Scott S. Douglas

     2021        543,665        1,087,330        248,163  
     2020        450,844        901,688        240,049  
       2019        847,666        1,695,332           

 

 

 

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2022 Proxy Statement


Table of Contents

Executive Compensation and Related Matters

 

(5) 

Amounts reported in this column for 2021 are set forth below.

 

Name

 

  

Change

in Pension

Value(a)

 

    

ESU

Program(b)

 

    

Deferred

Stock

Units(c)

 

    

Total(d)

 

 

Karl G. Glassman

   $ (15,631    $ 57,645      $ 66,636      $ 124,281  

J. Mitchell Dolloff

        12,507        27,937        40,444  

Jeffrey L. Tate

        837        1,359        2,196  

Steven K. Henderson

        1,958        3,946        5,904  

Scott S. Douglas

     (12,637      10,253        2,913        13,166  

 

  (a)

Change in the present value of the NEO’s accumulated benefits under the defined benefit Retirement Plan, as described on page 42. The present value of some Retirement Plan participants’ benefit decreased in 2021 due to the increase in the Plan’s discount rate from 2.0% to 2.5%.

 

  (b)

15% discount on dividend equivalents for stock units held in the ESU Program, as described on page 30.

 

  (c)

20% discount on dividend equivalents for stock units held in the Deferred Compensation Program, as described on page 31.

 

  (d)

The total excludes negative amounts from Change in Pension Value.

 

(6) 

Amounts reported in this column for 2021 are set forth below:

 

Name

 

  

ESU

Program(a)

 

    

Deferred

Stock

Units(b)

 

    

401(k) Matching

Contributions(c)

 

    

Retirement

K Excess

Payments(c)

 

    

Life and

Disability

Insurance

Benefits

 

    

Perks(d)

 

    

Total

 

 

Karl G. Glassman

   $ 359,083      $ 150,001      $ 10,440      $ 78,311      $ 7,125      $ 103,956      $ 708,916  

J. Mitchell Dolloff

     200,301        110,279              3,870        20,222        334,672  

Jeffrey L. Tate

     138,067        24,576              2,070           164,713  

Steven K. Henderson

     118,182        17,514              5,940        13,318        155,125  

Scott S. Douglas

     99,821        72,457        10,440        16,430        5,940        11,256        216,344  

 

  (a)

This amount represents the Company’s matching contributions under the ESU Program, the additional 17.65% contribution for diversified investments acquired with employee contributions, and the 15% discount on Leggett stock units acquired with Company matching contributions.

 

  (b) 

This amount represents the 20% discount on stock units acquired with employee contributions to the Deferred Compensation Program.

 

  (c) 

The Company’s 401(k) and Retirement K Excess Plan are described on page 31.

 

  (d)

Perquisites or other personal benefits with an aggregate value of $10,000 or more are included in the Summary Compensation Table. For disclosure purposes, perquisites are valued at the Company’s aggregate incremental cost. Perquisites for our executive officers in 2021 consisted of use of a Company car and limited personal use of corporate aircraft by the CEO. Mr. Glassman’s use of corporate aircraft for personal travel by him and his guests, subject to the aircraft not being scheduled for business purposes, is subject to an annual limit of $100,000 in aggregate incremental cost to the Company, including the cost of “deadhead” flights necessitated by such personal use. The incremental cost for Mr. Glassman’s personal use of corporate aircraft in 2021 was $76,066 based upon the Company’s average variable cost per passenger mile for the Company’s fleet over the course of 2021 multiplied by the passenger miles attributable to Mr. Glassman’s use.

 

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Executive Compensation and Related Matters

 

Grants of Plan-Based Awards in 2021

The following table sets forth, for the year ended December 31, 2021, information concerning each grant of an award made to the NEOs in 2021 under the Company’s Flexible Stock Plan and the Key Officers Incentive Plan.

 

             

 

Estimated Future Payouts

Under Non-Equity Incentive
Plan Awards(2)

 

    Estimated Future Payouts
Under Equity Incentive
Plan Awards(3)

 

   

All Other

Stock

Awards:

Shares

of Stock

or Units(4)
(#)

 

   

Grant

Date Fair

Value of

Stock

and

Option
Awards

($)

 

 

Name

 

 

Grant
Date

 

   

Award
Type
(1)

 

 

Threshold

($)

 

   

Target

($)

 

   

Maximum

($)

 

   

Threshold

(#)

 

   

Target

(#)

 

   

Maximum

(#)

 

 

Karl G. Glassman

    2/23/21     AI   $ 765,625     $ 1,531,250     $ 2,296,875            
    2/23/21     PSU           46,026       92,051       184,102       $ 4,059,449  
    2/23/21     RSU                 46,026       1,853,007  
          DSU                                                     16,386       750,006  

J. Mitchell Dolloff

    2/23/21     AI     400,000       800,000       1,200,000            
    2/23/21     PSU           18,794       37,588       75,176         1,657,631  
    2/23/21     RSU                 18,794       756,646  
          DSU                                                     14,050       551,394  

Jeffrey L. Tate

    2/23/21     AI     240,000       480,000       720,000            
    2/23/21     PSU           11,154       22,308       44,616         983,783  
    2/23/21     RSU                 11,154       449,060  
          DSU                                                     2,925       122,879  

Steven K. Henderson

    2/23/21     AI     259,680       432,800       649,200            
    2/23/21     PSU           8,297       16,594       33,188         731,795  
    2/23/21     RSU                 12,297       495,077  
          DSU                                                     1,913       87,569  

Scott S. Douglas

    2/23/21     AI     168,000       336,000       504,000            
    2/23/21     PSU           6,164       12,328       24,656         543,665  
    2/23/21     RSU                 6,164       248,163  
          DSU                                                     9,536       362,285  

 

(1)

Award Type:

    

AI—Annual Incentive

    

PSU—Performance Stock Units

    

RSU—Restricted Stock Units

    

DSU—Deferred Stock Units

 

(2)

The performance metrics, payout schedules and other details of the NEOs’ annual incentive are described on page 27.

 

(3) 

PSU awards vest at the end of a three-year performance period with 50% based on our TSR as measured relative to a peer group and 50% based upon EBIT CAGR. The PSU awards are described on page 29.

 

(4)

DSU amounts (from the Deferred Compensation Program described on page 31) reported in this column represent stock units acquired in lieu of cash compensation. Stock units are purchased on a bi-weekly basis or as compensation otherwise is earned, so there is no grant date for these awards. DSUs are acquired at a 20% discount to the market price of our common stock on the acquisition date. We recognize compensation expense for this discount, which is reported in the All Other Compensation column of the Summary Compensation Table on page 37.

 

 

 

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2022 Proxy Statement


Table of Contents

Executive Compensation and Related Matters

 

Outstanding Equity Awards at 2021 Fiscal Year-End

The following table reports the outstanding stock options, performance stock units (PSUs), and restricted stock units (RSUs) held by each NEO as of December 31, 2021.

 

    Option Awards     Stock Awards  
         

Exercisable
Securities

Underlying
Unexercised
Options (#)

                Unvested
Stock Units
    Equity Incentive Plan Awards—Unearned
Shares, Units or
Other Unvested Rights
 

Name

  Grant
Date
(1)
    Exercise
Price
($)
    Expiration
Date
   

Grant

Date

    Number
of Units
(2)
(#)
    Market
Value
(3)
($)
    Performance
Period
(4)
    Number
of Units
(5)
(#)
    Market or
Payout Value
(3)
($)
 

Karl G. Glassman

 

 

1/4/16

 

 

 

80,449

 

 

 

41.02

 

 

 

1/3/26

 

 

 

RSU Awards

 

     

 

PSU Awards

 

   
 

 

12/30/16

 

 

40,917

 

 

 

48.88

 

 

 

12/29/26

 

 

 

2/18/20

 

 

 

27,192

 

 

 

1,119,223

 

 

 

2020–2022

 

 

 

81,576

 

 

 

3,357,668

 

 

 

12/17/18

 

 

55,051

 

 

 

36.33

 

 

 

12/16/28

 

 

 

2/23/21

 

 

 

46,026

 

 

1,894,430

 

 

2021–2023

 

 

 

92,051

 

 

 

3,788,819

 

Total

         

 

176,417

 

                 

 

73,218

 

 

3,013,653

         

 

173,627

 

 

7,146,487

J. Mitchell Dolloff

       

 

RSU Awards

 

     

 

PSU Awards

 

   
       

 

2/18/20

 

 

 

10,178

 

 

 

418,926

 

 

 

2020–2022

 

 

 

30,534

 

 

 

1,256,779

 

       

 

2/23/21

 

 

 

18,794

 

 

 

773,561

 

 

 

2021–2023

 

 

 

37,588

 

 

 

1,547,122

 

Total

                                 

 

28,972

 

 

1,192,488

 

         

 

68,122

 

 

 

2,803,901

 

Jeffrey L. Tate

       

 

RSU Awards

 

     

 

PSU Awards

 

   
       

 

9/3/19

 

 

 

4,277

 

 

 

176,041

 

 

 

2020–2022

 

 

 

20,719

 

 

 

852,794

 

       

 

2/18/20

 

 

 

6,907

 

 

284,292

 

 

 

2021–2023

 

 

 

22,308

 

 

 

918,197

 

       

 

2/23/21

 

 

 

11,154

 

 

 

459,099

 

                 

Total

                                 

 

22,338

 

 

 

919,432

 

         

 

43,027

 

 

 

1,770,991

 

Steven K. Henderson

       

 

RSU Awards

 

     

 

PSU Awards

 

   
       

 

2/8/19

 

 

 

1,334

 

 

54,907

 

 

 

2020–2022

 

 

 

7,706

 

 

 

317,179

 

       

 

2/18/20

 

 

 

5,138

 

 

211,480

 

 

 

2021–2023

 

 

 

16,594

 

 

 

683,009

 

       

 

5/15/20

 

 

 

2,667

 

 

 

109,774

 

     
       

 

2/23/21

 

 

 

12,297

 

 

 

506,145

 

                 

Total

                                 

 

21,436

 

 

882,306

         

 

24,300

 

 

 

1,000,188

 

Scott S. Douglas

 

 

12/17/18

 

 

45,587

 

 

 

36.33

 

 

 

12/16/28

 

 

 

RSU Awards

 

   

 

PSU Awards

 

   
       

 

2/18/20

 

 

 

3,817

 

 

157,108

 

 

 

2020–2022

 

 

 

11,450

 

 

 

471,282

 

             

 

2/23/21

 

 

 

6,164

 

 

 

253,710

 

 

 

2021–2023

 

 

 

12,328

 

 

 

507,420

 

Total

         

 

45,587

                 

 

9,981

 

 

410,818

 

         

 

23,778

 

 

 

978,702

 

 

(1) 

These option grants were issued subject to our standard vesting terms, become exercisable in one-third increments at 18 months, 30 months and 42 months following the grant date, and have a 10-year term.

 

    

* Option grant under the Deferred Compensation Program which becomes exercisable on March 15, approximately 15 months following the grant date, and have a 10-year term.

 

(2) 

These amounts represent the unvested RSUs relating to each of the listed grants. One-third of each RSU award vests on the first, second, and third anniversaries of the grant date.

 

(3) 

Values shown in these columns were calculated by multiplying the number of units shown in the prior column by the per share value of $41.16, the closing market price of our common stock on December 31, 2021.

 

(4) 

PSU awards were granted in connection with our HRC Committee’s first quarter meeting and have a three-year performance period ending on December 31.

 

(5) 

The 2020-2022 PSU awards and the 2021-2023 PSU awards are disclosed at the target payout (100% of the base award) because the combination of Leggett’s TSR ranking as of December 31, 2021 and our projected EBIT CAGR for the performance periods place the anticipated payouts between the threshold level and the target level. The one exception is Mr. Henderson’s 2020-2022 PSU award, which is disclosed at the threshold payout (50% of the base award) because that award is projected to vest below the threshold level. The PSUs are described at page 29.

 

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Table of Contents

Executive Compensation and Related Matters

 

Option Exercises and Stock Vested in 2021

The following table reports the stock awards vested in 2021 and the value realized by the NEOs upon such vesting. The stock award amounts represent the payout of the 2019-2021 PSU awards at the end of the performance period on December 31, 2021, as well as certain RSU awards that vested during the year.

 

     Option Awards      Stock Awards(1)  

Name

 

  

Shares

Acquired on

Exercise

(#)

 

    

Value
Realized
on
Exercise

($)

 

    

Shares
Acquired on
Vesting

(#)

 

    

Value
Realized on
Vesting

($)

 

 

Karl G. Glassman

  

 

146,271

 

  

$

3,276,116

 

  

 

86,934

 

  

$

3,587,585

 

J. Mitchell Dolloff

        

 

29,978

 

  

 

1,237,406

 

Jeffrey L. Tate

        

 

22,139

 

  

 

941,467

 

Steven K. Henderson

        

 

6,568

 

  

 

304,444

 

Scott S. Douglas

        

 

12,069

 

  

 

498,077

 

 

(1) 

Amounts reported in these columns consist of vested 2019-2021 PSU awards and certain RSU awards, allocated as follows:

 

     2019-2021 PSU      RSU Awards  

Name

 

  

Shares

Acquired on

Vesting

(#)

 

    

Value
Realized
on
Vesting

($)

 

    

Shares
Acquired on
Vesting

(#)

 

    

Value
Realized on
Vesting

($)

 

 

Karl G. Glassman

  

 

73,338

 

  

$

3,018,592

 

  

 

13,596

 

  

$

568,993

 

J. Mitchell Dolloff

  

 

24,889

 

  

 

1,024,431

 

  

 

5,089

 

  

 

212,975

 

Jeffrey L. Tate

  

 

14,409

 

  

 

593,074

 

  

 

7,730

 

  

 

348,393

 

Steven K. Henderson

  

 

0

 

  

 

0

 

  

 

6,568

 

  

 

304,444

 

Scott S. Douglas

  

 

10,161

 

  

 

418,227

 

  

 

1,908

 

  

 

79,850

 

Dollar amounts shown above are calculated based upon the closing price of the Company’s stock on the vesting date. For those shares distributed to the NEOs upon the PSUs vesting, they may continue to hold the shares or sell them in accordance with applicable laws and Company policies. 50% of the 2019-2021 PSU awards were distributed in shares of Leggett stock, and the balance was distributed in cash. The RSU awards were settled entirely in shares of Leggett stock.

Pension Benefits in 2021

We had a voluntary, tax-qualified, defined benefit pension plan (the “Retirement Plan”), which was frozen December 31, 2006. Benefits accrued under the Retirement Plan were fixed as of that date, and the Retirement Plan was closed to new participants. Of our current NEOs, only Mr. Glassman and Mr. Douglas participated in the Retirement Plan before it was frozen. Participants no longer accrue additional benefits under the Retirement Plan, however, the present value of the benefits may increase or decrease each year based on the assumptions used to calculate the benefit for financial reporting purposes.

The Retirement Plan required a contribution from participating employees of 2% of base salary. The normal monthly retirement benefit is the total of 1% of the employee’s average monthly salary for each year of participation in the Retirement Plan. Benefits are calculated based on actual years of participation in the Retirement Plan, and benefits become payable when a participant reaches age 65 (normal retirement age). Mr. Glassman and Mr. Douglas are eligible for early retirement benefits under the Retirement Plan (minimum age 55 and at least 15 years of service), under which they would receive a monthly benefit reduced by 1/180th for the first 60 months and a monthly benefit reduced by 1/360th for any additional months before reaching normal retirement age.

 

 

 

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2022 Proxy Statement


Table of Contents

Executive Compensation and Related Matters

 

The following table lists the present value of accumulated benefits payable to the NEOs under the Retirement Plan:

 

Name

  

Number of

Years Credited

Service

(#)

  

Present Value of

Accumulated

Benefit

($)

    

Payments

During Last

Fiscal Year

($)

 

Karl G. Glassman

   40        $ 399,115     

J. Mitchell Dolloff

   N/A            

Jeffrey L. Tate

   N/A            

Steven K. Henderson

   N/A            

Scott S. Douglas

   34          293,989     

To calculate the present value of the accumulated Retirement Plan benefit, we took the annual accrued benefit through December 31, 2021 that would be payable at normal retirement age, assuming no future contributions. We converted that amount to a lump sum using an annuity factor from the PRI2012 mortality table and discounted that amount back to December 31, 2021 using a 2.5% discount rate. These assumptions are the same as those used for financial reporting purposes found in Note M to Consolidated Financial Statements to our Annual Report on Form 10-K for the year ended December 31, 2021, except those are reported on a weighted average basis for all plans.

Non-Qualified Deferred Compensation in 2021

The following table provides the aggregate 2021 contributions, earnings, withdrawals, and ending balances for each NEO’s deferred compensation accounts. The year-end balances are based on the $41.16 closing market price of our common stock on December 31, 2021.

 

Name

 

 

Deferral
Type or
Program
(1)

 

   

Executive
Contributions
in 2021
(2)

 

         

Company
Contributions
in 2021
(2)

 

         

Aggregate

Earnings

in 2021(3)

 

         

Aggregate
Withdrawals/
Distributions

 

         

Aggregate

Balance  at
12/31/2021
(4)

 

 

Karl G. Glassman

 

 

ESU

 

 

$

238,865

 

   

$

359,083

 

   

$

130,222

 

       

$

12,800,143

 

 

 

DSU

 

 

 

600,005

 

   

 

150,001

 

   

 

(269,767

   

$

503,843

 

   

 

7,226,091

 

 

 

EDSP

 

                     

 

(27,037

             

 

270,319

 

Total

         

 

838,870

 

         

 

509,084

 

         

 

(149,774

         

 

503,843

 

         

 

20,286,324

 

J. Mitchell Dolloff

 

 

ESU

 

 

 

139,804

 

   

 

20,301

 

   

 

253,451

 

       

 

3,633,784

 

 

 

DSU

 

 

 

441,115

 

   

 

110,279

 

   

 

(57,824

   

 

619,964

 

   

 

3,389,608

 

Total

         

 

580,919

 

         

 

310,186

 

         

 

195,627

 

         

 

619,964

 

         

 

7,023,392

 

Jeffrey L. Tate

 

 

ESU

 

 

 

95,230

 

   

 

138,067

 

   

 

44,413

 

       

 

526,899

 

 

 

DSU

 

 

 

98,303

 

   

 

24,576

 

   

 

(7,368

             

 

254,657

 

Total

         

 

193,533

 

         

 

162,643

 

         

 

37,045

 

                         

 

781,556

 

Steven K. Henderson

 

 

ESU

 

 

 

87,690

 

   

 

118,353

 

   

 

30,004

 

       

 

847,970

 

 

 

DSU

 

 

 

70,055

 

   

 

17,514

 

   

 

(21,445

             

 

472,887

 

Total

         

 

157,745

 

         

 

135,867

 

         

 

8,559

 

                         

 

1,320,857

 

Scott S. Douglas

 

 

ESU

 

 

 

71,566

 

   

 

99,821

 

   

 

74,259

 

       

 

2,629,364

 

 

 

DSU

 

 

 

289,828

 

   

 

72,457

 

   

 

14,821

 

             

 

765,617

 

Total

         

 

361,394

 

         

 

172,278

 

         

 

89,080

 

                         

 

3,394,981

 

 

(1) 

Deferral Type or Program:

    

ESU—Executive Stock Unit Program (see description at page 30)

    

DSU—Deferred Compensation Program—Stock Units (see description at page 31)

    

EDSP—Executive Deferred Stock Program. This is a frozen program under which executives deferred the gain from their stock option exercises from 1 to 15 years. Upon deferral, the participant was credited with stock units representing the net option shares deferred, and the units accumulate dividend equivalents during the deferral period.

 

(2) 

Amounts reported in these columns are also included in the totals reported in the Summary Compensation Table.

 

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Table of Contents

Executive Compensation and Related Matters

 

(3)