represents amounts paid during the fiscal year to named executive officers as direct compensation for their services to us. Base salary and increases to base salary recognize the overall experience, position and responsibilities within RPM and
expected contributions to RPM of each named executive officer. Adjustments to salaries are used to reward superior individual performance of our named executive officers on a
day-to-day basis during the year and to encourage them to perform at their highest levels. We also use our base salary to retain top quality executives and attract
management employees from other companies.
In July 2017, our Chief Executive Officer and our President and Chief Operating Officer recommended that the Compensation
Committee not increase the base salaries of the named executive officers with the exception of a 1.6% increase to Ms. Kastners base salary. As in the past, this recommendation was based upon an analysis of:
NAMED EXECUTIVE OFFICER BASE
Annual Cash Incentive Compensation
2017, we provided annual cash incentive compensation under the Amended and Restated 1995 Incentive Compensation Plan, which was designed to motivate participants to achieve our financial objectives and reward executives for their achievements when
those objectives are met. All named executive officers who are Covered Employees under Section 162(m) of the Internal Revenue Code, namely the Chief Executive Officer and the next three highest paid
executive officers, excluding the Chief Financial Officer, participated in the fiscal 2017 incentives. In addition, although the Chief Financial Officer is not a Covered Employee by definition,
the Compensation Committee evaluated Mr. Gordon under performance criteria similar to that used to determine the cash incentive compensation of the other named executive officers. The amount of cash incentive compensation earned by our named
executive officers in fiscal 2017 is set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. We paid these amounts in July 2017.
In July 2016, the Compensation Committee determined, on a percentage basis, the portion of the aggregate cash incentive compensation award pool under the Incentive
Compensation Plan, or the Incentive Plan, to be awarded to each of the Covered Employees in respect of the Companys performance for the fiscal year ending May 31, 2017 as follows: Mr. Sullivan, 40%; Mr. Rice, 30%;
Mr. Moore, 15%; and Ms. Kastner, 15%. The Compensation Committee determined that cash incentives paid would range from zero to 150% of salary with a target of 100% for all direct reports of the Chief Executive Officer, regardless of title,
namely, Messrs. Rice, Gordon, Moore and Ms. Kastner. The Compensation Committee may reduce or eliminate the amount of a named executive officers annual cash incentive award, at the Compensation Committees sole discretion, based
solely on individual performance.
The Incentive Plan in place for fiscal 2017 provided for an aggregate cash incentive compensation award pool of 1.5% of our pre-tax income for fiscal 2017. In July 2017, the Compensation Committee calculated the aggregate non-equity compensation award pool based on our audited pre-tax income and each individuals cash incentive payout amount. For fiscal 2017, the Companys pre-tax income as defined in the Incentive Plan was
$473 million, providing a cash incentive compensation award pool under the Incentive Plan for the Covered Employees of approximately $7.0 million. Upon the recommendation of our Chief Executive Officer, and after a review of a variety of
factors described below, the Compensation Committee awarded cash incentives totaling $1,820,000 to the Covered Employees, which was significantly below the aggregate amount authorized to be paid pursuant to the award pool formula. The cash incentive
compensation paid to the Covered Employees equaled approximately 76% of their salaries for fiscal 2017.
RPM International Inc. (NYSE: RPM) owns subsidiaries that are world leaders in coatings, sealants, building materials and related services. From homes to precious landmarks worldwide, their brands are trusted by consumers and professionals alike to protect, improve and beautify. Among its leading consumer brands are Rust-Oleum, DAP and Zinsser. Learn more about RPM brands >>
RPM is a compelling long-term investment.
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