Myr Group Inc DEF 14A, filed Mar 6, 2024

Myr Group Inc. (MYRG)

DEF 14A 2024-03-06 For: 2024-03-06

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Added on June 12, 2026

About this DEF 14A

Myr Group Inc filed this DEF 14A on March 6, 2024.

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ITEMS OF BUSINESS			BOARD RECOMMENDATIONS
Proposal 1.
Election of two Class II director nominees for two year terms			FOR Each Director Nominee
Proposal 2.
Advisory approval of the compensation of our named executive officers			FOR
Proposal 3.
Approval of the MYR Group Inc. 2017 Long-Term Incentive Plan (amended and restated as of April 24, 2024);			FOR


Proposal 4.
Ratification of the appointment of our independent registered public accounting firm			FOR
and consideration of other business properly presented at the meeting


PROXY STATEMENT			1
VIRTUAL MEETING FORMAT
PROXY SUMMARY			2
CORPORATE GOVERNANCE			7
Code of Ethics and Corporate Governance Principles
Director Independence
Executive Sessions of the Board
Communications with the Board and Reporting of Concerns
Board Leadership Structure
Board Authority to Retain Outside Consultants
Risk Oversight
Board and Committee Self-Evaluations
Committee Membership and Meeting Attendance
Board Refreshment
Overboarding Policy
NOMINATING, ENVIRONMENTAL, SOCIAL, AND CORPORATE GOVERNANCE COMMITTEE MATTERS			11
Committee Independence and Responsibilities
Criteria for Nomination to the Board of Directors
Diversity
Board Diversity Matrix
Director Succession Planning
PROPOSAL 1. ELECTION OF TWO CLASS II DIRECTOR NOMINEES FOR TWO-YEAR TERMS			14
Vote Required
2024 Director Nominees - Class II
Clas s I a nd Class III Directors
Non-Employee Director Compensation
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			26
COMPENSATION COMMITTEE MATTERS			27
Committee Independence and Responsibilities
Compensation Consultants
Management Succession Planning and Diversity
Compensation Risk Assessment
Compensation Committee Report
COMPENSATION COMMITTEE LETTER			30
COMPENSATION DISCUSSION AND ANALYSIS			31
Introduction
Objectives of Our Compensation Program
Key Features of Our Compensation
Components of Our Compensation
Shareholder Engagement and Say-on-Pay
2023 Target Compensation
Management’s Role in Determining Compensation
Peer Groups, Pay Mix and Use of Compensation Consultants
Analysis of 2023 Compensation Decisions and Actions
Conclusion of the CD&A



EXECUTIVE COMPENSATION TABLES			50
2023 Summary Compensation Table
2023 Grants of Plan-Based Awards
Employment Agreements
Outstanding Equity Awards at 2023 Fiscal Year End
2023 Option Exercises and Stock Vested
Potential Payments Upon Termination or Change in Control
2023 CEO Pay Ratio
PAY VERSUS PERFORMANCE			59
PROPOSAL 2. ADVISORY APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS			62
PROPOSAL 3. APPROVAL OF THE MYR GROUP INC. 2017 LONG-TERM INCENTIVE PLAN (AMENDED AND RESTATED AS OF APRIL 24, 2024)			64
AUDIT COMMITTEE MATTERS			80
Committee Independence and Responsibilities
Pre-Approval Policies
Independent Auditor's Fees
Audit Committee Report for the Year Ended December 31, 2023
PROPOSAL 4. RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			82
OTHER MATTERS THAT MAY BE PRESENTED AT THE 2024 ANNUAL MEETING			83
OWNERSHIP OF EQUITY SECURITIES			84
QUESTIONS AND ANSWERS ABOUT THE 2024 ANNUAL MEETING AND VOTING			85
2025 ANNUAL MEETING OF SHAREHOLDERS			88
APPENDIX A: MYR GROUP 2017 LONG-TERM INCENTIVE PLAN (AMENDED AND RESTATED AS OF APRIL 24, 2024)			89
APPENDIX B: PROXY CARD			106
APPENDIX C : R ETURN ON INVESTED CAPITAL (“ROIC”) N ON -GAAP M EASURE			107


			WHEN: Wednesday, April 24, 2024 at 8:00 a.m. Mountain Time
			WHERE: Online at virtualshareholdermeeting.com/MYRG2024
			WHO CAN VOTE: Shareholders of record at the close of business on February 29, 2024 are entitled to vote at the meeting, or any postponement or adjournment thereof.


• Separate Chair of the Board and Chief Executive Officer Positions						• Regular Executive Sessions Without Management Present
• Independent Chair of the Board						• Annual “Say-on-Pay” Shareholder Vote on Executive Compensation
• All Independent Directors Except our Current Chief Executive Officer						• 100% Independent Audit, Compensation and NESG Committees
• Majority Voting in Uncontested Elections						• Annual Engagement of Independent Executive Compensation Consultant
• Risk Oversight by Full Board and Committees						• Engagement Every Three Years of Independent Compensation Consultant for Director Compensation
• Balanced Director Ages (3 Under 60)						• Investor Outreach Program
• Annual Board and Committee Self-Evaluations						• Stock Ownership Guidelines for Named Executive Officers and Directors
• Annual Performance Evaluation of Named Executive Officers by Directors						• Code of Business Conduct and Ethics for Officers and Directors
• Periodic Engagement of Independent Executive and Corporate Governance Consultant						• Director Overboarding Policy
• Board Authority to Retain Outside Consultants						• Board Refreshment Policy With an Expected Director Retirement Age of 72.
• Three of Eight Independent Directors are Female or Racially/Ethnically Diverse						• Board and its Committees Conduct Annual Self-Evaluation Exercises.


	WE DO:		WE DO NOT:
þ	Pay for Performance	X	Allow Hedging of our Stock
þ	Hold Annual “Say-on-Pay” Shareholder Vote	X	Allow Pledging of our Stock
þ	Require Officers and Directors to Meet Stock Ownership Guidelines	X	Provide Tax Gross-Ups
þ	Encourage Shareholder Input	X	Provide Single Trigger Change in Control Provisions
þ	Maintain a Clawback Policy	X	Allow Short-Selling of our Stock
þ	Maintain an Independent Compensation Committee	X	Guarantee Minimum Annual Cash Incentive Payments to our NEOs
þ	Conduct Annual Compensation Review and Risk Assessment	X	Provide Dividends or Dividend Equivalents on Unvested Equity
þ	Provide Incentive Compensation Based Upon Financial and Safety Performance Metrics	X	Allow Repricing of Stock Options Without Shareholder Approval
þ	Cap Annual Cash Incentive and Performance Awards	X	Grant Stock Options Below Fair Market Value as of the Grant Date
þ	Base Significant Portion of Long-Term Incentive Awards on Relative Total Shareholder Return
þ	Engage an Independent Compensation Consultant
þ	Align the Financial Interests of our NEOs with those of Shareholders


	Audit	Compensation	NESG
Bradley T. Favreau	0	a	a
Kenneth M. Hartwick	a	0	0
Ajoy H. Karna	a	0	0
Jennifer E. Lowry	l	0	0
Donald C.I. Lucky	0	a	l
Shirin S. O'Connor	0	a	a
William D. Patterson	0	l	0
Richard S. Swartz	x	x	x


			Donald C.I. Lucky Age: 61 Director Since: 2015 Independent: Yes Nominated for Class: II Committee Membership: Audit ☐ Compensation ☒ NESG ☒ (Chair) Meeting Attendance: 100% Other Public Directorships: None Mr. Lucky is a construction attorney and the Construction Practice Leader at the century-old Alberta-based law firm of Reynolds Mirth Richards & Farmer LLP, where he has practiced since 1988 and previously served as Managing Partner. He has advised contractors and owners in major power projects, including oil and gas, solar, wind and carbon capture, engineer procurement and construction mega projects and more than 100 public-private finance infrastructure projects (hospitals, penitentiaries, water treatment and transportation) throughout Canada, the United States and Australia. Mr. Lucky has appeared as counsel at all levels of the Courts of Alberta and the Northwest Territories and in mediations and arbitrations as counsel and adjudicator. In addition to his practice of law, he taught Construction Law at the University of Alberta from 2002 to 2015 and has received numerous industry awards and recognitions in the area of construction law and otherwise, including being inducted into the Canadian College of Construction Lawyers in 2009. Mr. Lucky earned his Bachelor of Commerce and Bachelor of Law degrees from the University of Alberta, and his Master of Law degree from the University of Cambridge. Qualifications, Experience, Key Attributes and Skills: Throughout his career as an attorney in the construction industry, Mr. Lucky has demonstrated a detailed understanding of the legal issues and risks of our current and expanding markets. Mr. Lucky’s perspective as an academic and his involvement in various energy projects in multiple countries provides the Board with valuable new ideas and perspectives. Mr. Lucky’s experience in the construction industry, along with the wealth of knowledge he has gained through advocating for contractors, gives the Board significant insight for our strategic planning as well as an understanding and awareness of the Company’s opportunities and challenges, all of which makes him highly qualified to serve as Chair of the NESG Committee and as a member on the Compensation Committee.


			Shirin S. O'Connor Age: 60 Director Since: 2020 Independent: Yes Nominated for Class: II Committee Membership: Audit ☐ Compensation ☒ NESG ☒ Meeting Attendance: 100% Other Public Directorships: None Ms. O’Connor has served as Corporate Vice President - Engineering, Procurement, and Construction at Microsoft Corporation, a technology company, since 2022. She previously served as Vice President, Global Engineering, Global Procurement, and Quality/Continuous Improvement at Air Products and Chemicals, Inc. an industrial gases company, from 2020 to 2022. In 2020, Ms. O’Connor also previously served as Vice President, Project Director for Fluor Corporation’s (an engineering and construction firm) Energy and Chemicals Business Line. She has over 28 years of experience executing and leading large and mega capital projects for a wide range of industries including Energy and Chemicals, Advanced Technologies and Life Sciences, and Mining and Metals both domestically and internationally. Ms. O’Connor also previously served as Fluor’s Director of Engineering for Americas from 2018 to 2020 providing leadership oversight of engineering resources and execution in South America, US, and Canada. Prior to this role, Ms. O'Connor served as a Project Director for Fluor Corporation from 2005 to 2018. Ms. O’Connor earned a Bachelor of Science degree in electrical engineering from Clemson University and a Master of Science degree in electrical engineering from the University of South Carolina. Ms. O’Connor is also a registered professional engineer. Qualifications, Experience, Key Attributes and Skills: Ms. O’Connor has substantial project management, leadership, and engineering experience, including leading mega projects and support groups in the engineering construction sector. Her skills of oversight, management, and estimating of large-scale engineering, procurement and construction projects provide the Board and management with valuable insight; and contribute to the Board’s understanding of the work routinely performed by the Company. Ms. O’Connor’s ability to quickly understand large project opportunities broadens our Board’s experience and understanding of our work and the accompanying risk. Her experiences, including leading groups in sophisticated multinational organizations, make Ms. O’Connor well qualified to serve on the Board, the Compensation Committee and the NESG Committee.


			Kenneth M. Hartwick Age: 61 Director Since: 2015 Independent: Yes Class: I Committee Membership: Audit ☒ Compensation ☐ NESG ☐ Meeting Attendance: 100% Other Public Directorships: Via Renewables LP Mr. Hartwick has served as President and CEO for Ontario Power Generation, an owner of power generation in Canada and United States, since 2019. Mr. Hartwick is also a Director at Ontario Power Generation. Previously, Mr. Hartwick served as Senior Vice President of Finance, Strategy, Risk & Chief Financial Officer for Ontario Power Generation from 2016 to 2019. From 2015 to 2016, Mr. Hartwick served as the Chief Financial Officer of Wellspring Financial Corporation, a Canadian sales financing company. Prior to joining Wellspring Financial Corporation, Mr. Hartwick served for ten years as Director, President and CEO of Just Energy Group Inc., an integrated retailer of commodity products. At Just Energy Group, Inc., his role included putting in place a broad set of financing arrangements for growth in North America and the United Kingdom and the expansion of the sales organization across these locations. Prior to that, Mr. Hartwick held a variety of senior executive roles, gaining an extensive financial background in the energy, consumer products and capital markets areas, including the positions of CEO and Chief Financial Officer at Just Energy Group, Inc., Chief Financial Officer at Hydro One, Inc. and a partner at Ernst & Young LLP. In each of these roles, Mr. Hartwick participated in the expansion and growth of the businesses and the establishment of financial platforms to support that growth. Mr. Hartwick currently serves on the Board of Directors of Via Renewables LP, a publicly traded retail energy services company. From 2004 to 2016, Mr. Hartwick served on the Board of Directors of Atlantic Power Corporation, a publicly traded power generation company in the United States and Canada. From 2014 through 2016, Mr. Hartwick served on the Board of Governors for Trent University, his alma mater. Mr. Hartwick earned his Honors of Business Administration Degree from Trent University, Peterborough, Ontario and is a Certified Public Accountant. Qualifications, Experience, Key Attributes and Skills: Mr. Hartwick’s experience in senior executive positions, including the roles of chief executive officer and chief financial officer, brings leadership, risk management, and strategic planning experience to the Board and Audit Committee. Mr. Hartwick’s in-depth knowledge of financing initiatives as a senior executive in North American markets provides the Board with proficiencies to support business development, growth strategies and expenditure plans. Mr. Hartwick’s experience as a director of other publicly-traded companies enables him to provide insights into a variety of strategic planning, risk management, compensation, finance and governance practices. The culmination of Mr. Hartwick’s leadership in the energy industry and financial sector make him a valued advisor and highly qualified to serve as Board Chair and as a member of our Audit Committee.


			Jennifer E. Lowry Age: 55 Director Since: 2018 Independent: Yes Class: I Committee Membership: Audit ☒ (Chair) Compensation ☐ NESG ☐ Meeting Attendance: 100% Other Public Directorships: Clearway Energy, Inc. & Electriq Power Holdings, Inc. Ms. Lowry is a retired finance and strategy executive. Ms. Lowry served as Vice President of Risk, Treasury and Corporate Finance for McCormick & Company, Inc., a global food company, from 2016 until her retirement in 2021. From 2012 to 2016, Ms. Lowry held senior management roles with Exelon Corporation (“Exelon”), a U.S. power generator, and Constellation Energy Group, Inc. (“Constellation”), an energy company which merged with Exelon. With Constellation she served as Treasurer and Vice President, and while at Exelon she was Senior Vice President, Generation Company Strategy. Prior to that, she held executive positions at companies within the electric power industry including Cogentrix Energy Group, Inc. and The AES Corporation, where she worked in Treasury, Corporate Finance and Project Development Groups. Since February 2022, Ms. Lowry has served on the board of Clearway Energy, Inc., where she currently is the chair of the Energy Risk Management Committee. In August of 2023, Ms. Lowry was also appointed to the Board of Directors of Electriq Power Holdings, Inc. Ms. Lowry also has served on numerous governing committees within Constellation and Exelon and previously served as Chair of the Maryland Zoo Board of Trustees. She attended Dartmouth College, where she earned a Bachelor of Arts degree and Bachelor of Engineering degree with a focus on electrical engineering, and she earned a Masters in Management from the Northwestern University Kellogg School of Management. Qualifications, Experience, Key Attributes and Skills: Ms. Lowry’s experience in senior executive positions, in several industries, including the electric power industry with several major utilities, brings industry knowledge and expertise, strong leadership qualities and a diverse set of finance, strategy, risk management, and governance skills to our Board. Her financial and strategic transactional experience with both national and global organizations offers unique perspectives to our Board. Ms. Lowry’s collective leadership, experience and skillset makes her a valuable asset and highly qualified to serve on our Board and as the Chair of our Audit Committee.


			Richard S. Swartz Age: 60 Director Since: 2019 Independent: No Class: I Committee Membership: Audit ☐ Compensation ☐ NESG ☐ Meeting Attendance: 100% Other Public Directorships: None Mr. Swartz was appointed President and CEO of MYR Group in 2017. Mr. Swartz also chairs the Company’s internal executive committee. Mr. Swartz has more than 40 years of industry experience. He began his career in field operations, and subsequently served in a variety of senior management positions including as the Vice President of our subsidiary Sturgeon Electric Company, Inc. (“Sturgeon Electric”) C&I division, Vice President of Sturgeon Electric’s T&D—Midwest division, Group Vice President C&I and T&D—West, and MYR Group’s Executive Vice President and Chief Operating Officer for six years, preceding his CEO appointment. Mr. Swartz was instrumental in the development and inception of project management and productivity improvement programs as well as in the formulation of several corporate safety initiatives. He spearheaded Sturgeon Electric’s participation in OSHA's Voluntary Protection Program (“VPP”) for the Mobile Workforce Demonstration Program, for which Sturgeon Electric has achieved and maintained STAR status since 2008. Qualifications, Experience, Key Attributes and Skills: Mr. Swartz’s 40 years of experience with the Company’s operations brings leadership, risk management, technical and strategic planning experience to the Board. His extensive knowledge of the Company’s personnel and capabilities provides valuable insight to the Board.


			Bradley T. Favreau Age: 40 Director Since: 2016 Independent: Yes Class: III Committee Membership: Audit ☐ Compensation ☒ NESG ☒ Meeting Attendance: 100% Other Public Directorships: American Outdoor Brands, Inc. Mr. Favreau currently serves as Partner at Engine Capital Management, LLC (“Engine Capital Management”), which serves as the investment manager to value-oriented special situations funds that invest both actively and passively in companies undergoing change. Mr. Favreau has been at Engine Capital Management since 2013. His responsibilities include sourcing and evaluating investment opportunities as well as monitoring portfolio risk and position sizing. Beginning in 2022, Mr. Favreau has served as a director and member of the Compensation Committee at American Outdoor Brands, Inc., a leading provider of outdoor lifestyle products and accessories. From 2015 to 2017, Mr. Favreau served as a director and a member of the Audit Committee of RDM Corporation, a provider of solutions for the electronic commerce and payment processing industries. Prior to Engine Capital Management, in 2011, Mr. Favreau served as a consultant at HUSCO International, a global leader in the development and manufacture of hydraulic and electro-hydraulic controls for off-highway applications. At HUSCO International, his duties included identifying and initiating supply chain improvement initiatives. Mr. Favreau has also worked as an investment professional at Apax Partners, an international private equity investment group, and in the mergers and acquisition group at UBS AG. Mr. Favreau received a Master of Business Administration from Columbia Business School and a Bachelor of Science degree from the Kelley School of Business at Indiana University. Qualifications, Experience, Key Attributes and Skills: Mr. Favreau’s experience at an investment firm with investments in a broad range of industries provides the Board with additional financial and operational expertise. Such knowledge helps our Company to position itself for future growth and allocate capital effectively. Mr. Favreau’s experiences as a director and member of the Audit Committee of RDM Corporation and as a consultant at HUSCO International offer the Board additional awareness and perspectives for the Company’s oversight and risk management functions. Mr. Favreau, with his financial background and experience serving on another board of directors, has proven to be a valuable asset to the Board, the Compensation Committee and the NESG Committee.


			Ajoy H. Karna Age: 57 Director Since: 2022 Independent: Yes Class: III Committee Membership: Audit ☒ Compensation ☐ NESG ☐ Meeting Attendance: 100% Other Public Directorships: None Mr. Karna has served as Executive Vice President and Chief Financial Officer of Covetrus, Inc., a global animal-health technology and services company, since 2022. From 2012 through 2022, Mr. Karna held senior management roles with Sysco Corporation, a wholesale restaurant food distributor, including Senior Vice President, Treasury, M&A & Corporate Finance; Senior Vice President, Finance; Senior Vice President & CEO, Foodservice Europe; and Senior Vice President, Strategy and CFO International. Prior to Sysco, Mr. Karna served in various senior roles for PepsiCo, Inc. and its subsidiaries including Senior Vice President, Merger and Acquisitions. Prior to PepsiCo, Inc. Mr. Karna served in various finance roles of increasing responsibility for the Quaker Oats Company. Mr. Karna holds an undergraduate degree in finance from Georgetown University and a Master of Business Administration degree from Northwestern University. Qualifications, Experience, Key Attributes and Skills: Mr. Karna's more than 33 years of experience in finance, strategy, and management provide the Board with added insight into financial, business, and strategic matters. Additionally, Mr. Karna’s international business, treasury, supply chain, and mergers & acquisitions experience provide value to the Board. His time with large multi-national corporations such as Sysco Corporation and PepsiCo, Inc., as well as other companies, allows him to provide a unique perspective and serve as a valuable asset to the Board and as a member of our Audit Committee.


			William D. Patterson Age: 69 Director Since: 2007 Independent: Yes Class: III Committee Membership: Audit ☐ Compensation (Chair) ☒ NESG ☐ Meeting Attendance: 100% Other Public Directorships: None Mr. Patterson is a retired water utility executive who is currently engaged in not-for-profit and philanthropic activities. From 2010 through 2016, Mr. Patterson provided advisory and consulting services to utilities through EnSTAR Management Corporation, a company that he founded. In 2010, Mr. Patterson retired from American Water Works Company Inc. (“American Water Works”), the largest investor-owned U.S. water and wastewater utility company. From 2009 until his retirement in 2010, Mr. Patterson served as Senior Vice President of Corporate and Business Development for American Water Works. From 2005 to 2008, Mr. Patterson served as Senior Vice President and Chief Financial Officer of Pennichuck Corporation, an investor-owned water utility holding company. From 2003 to 2005, he served as an executive advisor to Concentric Energy Advisors, a private firm located in Marlborough, Massachusetts, providing financial advisory and consulting services for utilities. His experience also includes nearly 20 years of work within the investment banking industry, serving in senior positions at E.F. Hutton, Shearson Lehman and Smith Barney, where he was managing director and co-head of the corporate finance department’s regulated utilities practice. Mr. Patterson earned his Bachelor of Science degree in civil engineering from Princeton University, graduating summa cum laude. He earned his Master of Business Administration degree in finance and accounting from the University of Chicago Booth School of Business. Qualifications, Experience, Key Attributes and Skills: Mr. Patterson is a financial executive and expert with 30 years of experience primarily serving the regulated utility and energy/utility infrastructure markets. Mr. Patterson brings a broad-based track record of success as a banker, investor and advisor and has held senior management and independent director positions for both public and private companies. His service as a senior executive for various companies in the utility industry provides him with an understanding and awareness of our markets and a valuable perspective that make Mr. Patterson highly qualified to serve as Chair of the Compensation Committee.


DIRECTOR COMPENSATION
Name	Fees Earned or Paid in Cash(1) ($)	Stock Awards(2)(3) ($)	Total ($)
Bradley T. Favreau	80,000	109,879	189,879
Kenneth M. Hartwick(4)	130,000	159,995	289,995
Ajoy H. Karna	80,000	109,879	189,879
Jennifer E. Lowry(5)	95,000	109,879	204,879
Donald C.I. Lucky(6)	92,500	109,879	202,379
Maurice E. Moore(7)	25,000	—	25,000
Shirin S. O'Connor	80,000	109,879	189,879
William D. Patterson(8)	95,000	109,879	204,879


Name	Share Ownership(1) (#)	Value Of Share Ownership(2) ($)	Ownership Guideline	Current Ownership Multiple
Bradley T. Favreau	11,702	1,832,884	4.0 ×	22.9	x
Kenneth M. Hartwick	22,288	3,490,969	4.0 ×	43.6	x
Ajoy H. Karna	2,302	360,562	4.0 ×	4.5	x
Jennifer E. Lowry	9,991	1,564,890	4.0 ×	19.6	x
Donald C.I. Lucky	18,542	2,904,233	4.0 ×	36.3	x

Shirin S. O'Connor	5,392	844,549	4.0 ×	10.6	x
William D. Patterson	32,627	5,110,367	4.0 ×	63.9	x


Compensation Committee:			William D. Patterson, Chair Bradley T. Favreau Donald C.I. Lucky Shirin S. O'Connor


Name			Title
Richard S. Swartz			President and Chief Executive Officer
Kelly M. Huntington(1)			Senior Vice President and Chief Financial Officer
Betty R. Wynn (née Johnson)(1)			Former Senior Vice President and Chief Financial Officer
Tod M. Cooper(2)			Senior Vice President and Chief Operating Officer–Transmission & Distribution
Don A. Egan(3)			Senior Vice President and Chief Operating Officer–Commercial & Industrial
William F. Fry(4)			Vice President, Chief Legal Officer and Secretary
Jeffrey J. Waneka(3)			Former Senior Vice President and Chief Operating Officer–Commercial & Industrial


We seek to adhere to executive compensation best practices
þ			Competitive Pay. We provide our executive officers with total compensation opportunities at levels that are competitive with our peer companies, and we reward outstanding performance and the achievement of strategic goals.
þ			Capped Incentive Awards. Annual cash incentive awards are capped at 235% of target for our CEO and lesser amounts for our other NEOs, and the number of performance shares that can be earned is capped at 200% of target for all NEOs.
þ			Independent Compensation Consultant. Our Compensation Committee has engaged its own independent compensation consultant, which performs an annual comprehensive market analysis of our executive compensation programs and pay levels.
þ			Peer Companies. We conduct a rigorous peer group assessment and maintain a peer group that provides a valuable comparison for compensation decisions.
þ			Clawback Policy. In accordance with the requirements of the Nasdaq listing standards, we maintain a Clawback Policy that empowers the Company to recover certain incentive compensation erroneously awarded to a Covered Officer in the event of an accounting restatement.
þ			Risk Assessment. The Compensation Committee performed a risk assessment and determined that no element of our compensation program was reasonably likely to have a material adverse effect on our Company.


What we do to align executive compensation with the interests of our shareholders			What we don’t do
þ	Pay for Performance. We grant equity awards that provide a mix of retention-based awards and awards that will reward our executives for the achievement of long-term performance goals that are intended to maximize shareholder value.	⊗	No Hedging or Pledging. We have an insider trading policy that prohibits our NEOs and employees from hedging the economic risk of their stock ownership and holding shares of the Company’s common stock in a margin account or pledging shares as collateral for a loan.
þ	“Say-on-Pay.” We annually put our NEO compensation to an advisory vote of our shareholders and received a positive response of over 93% of the votes represented and entitled to vote on this proposal at the 2023 Annual Meeting.	⊗	No Single Trigger. Our employment agreements with our NEOs provide for additional severance payments and benefits only on a so-called “double trigger” basis, for termination without cause or for good reason following a change of control.
þ	Stock Ownership Guidelines. We have stock ownership guidelines, with a stock retention feature, for our NEOs.	⊗	No Gross-ups. We do not include gross-up payments for excise taxes in our employment agreements.
þ	Shareholder Input. We encourage open dialogue with shareholders to solicit input and feedback on our compensation practices and policies.


Pay Component	Objective	Key Features
Base Salary	To provide a fixed level of cash compensation to reward demonstrated experience, skills and competencies relative to the market value of the job.	Varies based on skills, experience, level of responsibility and other factors. Adjustments are considered annually based on individual performance, level of pay relative to the market and internal pay equity.
Short-Term Incentives	To reward for annual corporate performance under the MIP. To align NEOs’ interests with those of our shareholders by linking part of their compensation with annually established financial and safety performance goals. To retain NEOs by providing market-competitive compensation.	Annual incentive payments are cash awards based on financial, safety and individual performance objectives. Annual cash incentive awards are capped at 235% of salary for our CEO and lower percentages for our other NEOs.
Long-Term Incentives	To reward long-term corporate performance under the LTIP. To align NEOs’ interests with long-term shareholder interests by linking part of NEO compensation with long-term corporate performance. To provide opportunities for wealth creation and stock ownership, which promote retention and enable us to attract talent and motivate our NEOs. To retain NEOs by providing multi-year vesting of equity grants and multi-year performance periods.	Targeted at levels that will provide total direct compensation (salary plus short-term incentive plus long-term equity awards) competitive with our Peer Group’s (as defined below) total direct compensation. Balances multiple objectives using different equity types, including Restricted Stock Units and performance shares to balance multiple objectives. Restricted Stock Units vest ratably over three-year periods. Performance shares granted in 2023 will cliff-vest, if earned, on December 31, 2025 and the number of shares that can be earned is capped at 200% of target.
Profit Sharing Contributions to Diversified Holdings Savings Plan	To reward annual corporate performance for our employees, including our NEOs.	Contribute up to 10% of salary depending on the profitability of the Company, up to the maximum allowed by the plan.
401(k) Matching Contributions to Diversified Holdings Savings Plan	To provide certain retirement income for our employees, including our NEOs.	Provide a match of 100% of an employee’s contributions up to the first 6% of the employee’s salary, up to the maximum allowed by the plan.
Executive Perquisites	To attract and retain NEOs.	Limited programs offering perquisites such as a Company vehicle or car allowance, financial planning services and relocation expenses.


	2023 Target Total Direct Compensation ($ in 000s)(1)	Median Peer Group Total Direct Compensation Based on Mercer’s 2023 Report ($ in 000s)
Chief Executive Officer	$4,513	$4,266
Other NEOs(2)	$1,367	$1,192


• Ameresco, Inc.			• IES Holdings, Inc.
• APi Group Corporation			• Infrastructure and Energy Alternatives, Inc.(1)
• Arcosa, Inc.			• Matrix Service Company
• Astec Industries, Inc.			• Oceaneering International, Inc.
• Clean Harbors, Inc.			• Primoris Services Corporation
• Comfort Systems USA, Inc.			• Sterling Construction Company, Inc.
• Dycom Industries, Inc.			• Tetra Tech, Inc.
• Granite Construction Incorporated			• Tutor Perini Corporation(2)
• Great Lakes Dredge & Dock Corporation			• Valmont Industries, Inc.
• Harsco Corporation(3)


Name	2023 Base Salary		2022 Base Salary		Percentage Increase
Richard S. Swartz	$	885,000	$	825,000	7.3	%
Kelly M. Huntington(1)	$	440,000	$	—	N/A
Betty R. Johnson(1)	$	495,000	$	495,000	—	%
Tod M. Cooper	$	575,000	$	540,000	6.5	%
Don A. Egan(2)	$	390,000	$	332,398	17.3	%
William F. Fry	$	430,000	$	415,000	3.6	%
Jeffrey J. Waneka(2)	$	430,000	$	430,000	—	%


	2023 MIP Opportunity
	(Percent of Base Salary)(1)
Name	Pre-tax Income Target	Total Case Rate Target	Lost Time Incident Rate Target	Total Payout at Threshold	Total Payout at Target	Total Payout at Maximum
Mr. Swartz	77.0%	16.5%	16.5%	55.0%	110.0%	220.0%
Mr. Cooper	52.5%	11.3%	11.3%	37.5%	75.0%	150.0%
Ms. Huntington and Messrs. Egan and Fry	49.0%	10.5%	10.5%	35.0%	70.0%	140.0%


	Threshold	Target	Maximum	2023 Results
Pre-tax Income ($000)	85,500	120,068	179,796	125,004
Total Case Incident Rate	1.56	1.17	0.78	1.13
Lost Time Incident Rate	0.20	0.15	0.10	0.14


2023 ROIC =						Net Income + ((Interest + Amortization) x (1–Tax Rate))–Dividends
						Average of (Funded Debt – Cash and Marketable Securities + Total Shareholder’ Equity) at the beginning and the end of each performance year in the period


2023 ROIC Performance			Performance Shares Earned (% of Target)
Equal to or Above the Maximum			200%
Equal to the Target			100%
Equal to the Threshold			50%
Below the Threshold			0%


Relative TSR Performance			Performance Shares Earned (% of Target)
75th Percentile or Higher			200%
50th Percentile			100%
25th Percentile			25%
Less than 25th Percentile			0%


Named Executive Officer	Value of 2023 Equity Grants by Grant Type
	Value of Restricted Stock Units ($)	Value of ROIC Based Performance Shares(1) ($)	Value of TSR Based Performance Shares(1) ($)	Total Value of Equity Awards ($)
Richard S. Swartz	1,061,973	796,422	796,455	2,654,850
Kelly M. Huntington	255,885	191,943	191,895	639,723
Tod M. Cooper	299,910	224,904	224,895	749,709
Don A. Egan	179,946	134,989	134,970	449,905
William F. Fry	191,943	143,957	143,880	479,780


2021 ROIC =						Net Income + ((Interest + Amortization) x (1–Tax Rate))–Dividends
						Average of (Funded Debt – Cash and Marketable Securities + Total Shareholder’ Equity) at the beginning and the end of each performance year in the period


Performance Period		ROIC Achieved (1)	Incentive	Weight	Performance	Achievement
2021	ROIC	20.0%	200.0%	20.0%	40.0%	Above Maximum
2022	ROIC	18.6%	200.0%	20.0%	40.0%	Above Maximum
2023	ROIC	16.1%	200.0%	20.0%	40.0%	Above Maximum
3 year average ROIC		18.3%	200.0%	40.0%	80.0%	Above Maximum
Total Achievement					200.0%	At Maximum