Ingersoll Rand 2019 Proxy Statement
49
Proxy Statement
EXECUTIVE COMPENSATION
(b) The amounts in this column reflect the aggregate grant date fair value of PSU awards and any RSU awards granted for the year under Financial Accounting Standards
Board (FASB) Accounting Standards Codification (ASC) Topic 718 and do not reflect amounts paid to or realized by the NEOs. For a discussion of the assumptions
made in determining the ASC 718 values see Note 13, “Share-Based Compensation,” to the Company’s consolidated financial statements contained in its 2018
Form 10-K. The ASC grant date fair value of the PSU award is spread over the number of months of service required for the grant to become non-forfeitable,
disregarding any adjustments for potential forfeitures. In determining the aggregate grant date fair value of the PSU awards, the awards are valued assuming target
level performance achievement. The table below includes the maximum grant date value of the 2018-2020 PSU awards for the persons listed. If the maximum level
performance achievement is assumed, the aggregate grant date fair value of the PSU awards would be as follows:
Name
Maximum Grant Date Value of
PSU Awards
($)
M. W. Lamach 11,486,949
S. K. Carter 3,157,558
D. S. Regnery 2,356,390
M. J. Avedon 1,979,469
M. C. Green 1,743,682
(c) The amounts in this column reflect the aggregate grant date fair value of stock option grants for financial reporting purposes for the year under ASC 718 and do
not reflect amounts paid to or realized by the NEOs. For a discussion of the assumptions made in determining the ASC 718 values see Note 13, “Share-Based
Compensation,” to the Company’s consolidated financial statements contained in its 2018 Form 10-K. Please see “2018 Grants of Plan-Based Awards” and
“Outstanding Equity Awards at December 31, 2018” for additional detail.
(d) This column reflects the amounts earned as annual awards under the AIM program. Unless deferred into the EDCP Plan, AIM program payments are made in cash. In
2018, Mr. Regnery and Ms. Green elected to defer a percentage (60% and 10% respectively) of their AIM awards into the EDCP Plan. Amounts shown in this column
are not reduced to reflect deferrals of AIM awards into the EDCP Plan.
(e) Amounts reported in this column reflect the aggregate increase in the actuarial present value of the benefits under the qualified Ingersoll Rand Pension Plan Number
One (the “Pension Plan”), Supplemental Pension Plans, the KMP and EOSP, as applicable. The change in pension benefits value is attributable to the additional year of
service and age, the annual AIM award and any annual salary increase. Ms. Green does not participate in any of these plans and therefore no value is shown for her.
Other external factors, outside the influence of the plan design, also impact the values shown in this column. Examples of these factors include changes to mortality
tables as well as interest and discount rates. It was primarily due to the increase in both the lump sum interest and discount rates that resulted in the changes in this
column in 2018 compared to prior years.
There was no above market interest earned by the NEOs in any year.
(f) The following table summarizes the components of this column for fiscal year 2018:
Name
Company
Contributions
($)
(1)
Company
Cost for
Life
Insurance
($)
Company Cost
for Long Term
Disability
($)
Retiree
Medical
Plan
($)
(2)
Tax Assistance
($)
(3)
Other Benefits
($)
(4)
Total
($)
M. W. Lamach 241,200 6,708 1,285 – 119,852 193,154 562,199
S. K. Carter 126,618 5,306 2,262 – – 44,888 179,074
D. S. Regnery 74,190 2,425 1,456 800 – 27,731 106,602
M. J. Avedon 78,031 2,967 1,824 – – 19,636 102,458
M. C. Green 86,644 7,620 2,532 – – 32,787 129,583
(1) Represents Company contributions under the Company’s ESP and Supplemental ESP plans.
(2) For Mr. Regnery, represents the estimated year-over-year increase in the value of the retiree medical plan, calculated based on the methods used for financial
statement reporting purposes. Mr. Regnery is the only NEO eligible for the subsidized retiree medical plan upon retirement.
(3) The amount for Mr. Lamach represents tax equalization payments related to Irish taxes owed on $335,000, which is the portion of his income that is allocated to his role
as a director of the Company. Without these payments, Mr. Lamach would be subject to double taxation on this amount since he is already paying U.S. taxes on this
income.
(4) For Mr. Lamach, this amount includes the incremental cost to the Company of personal use of the Company aircraft (whether leased or owned) by the CEO. For
security and safety reasons and to maximize his availability for Company business, the Board of Directors requires the CEO to travel on Company-provided aircraft
for business and personal purposes, unless commercial travel is deemed a minimal security risk by the Company. The incremental cost to the Company of personal
use of the aircraft is calculated: (i) by taking the hourly average variable operating costs to the Company (including fuel, maintenance, on board catering and
landing fees) multiplied by the amount of time flown for personal use in the case of leased aircraft; and (ii) by multiplying the flight time by a variable fuel charge
and the average fuel price per gallon and adding any ground costs such as landing and parking fees as well as crew charges for travel expenses in the case of the
Company owned aircraft. Both methodologies exclude fixed costs that do not change based on usage, such as pilots’ and other employees’ salaries, management
fees and training, hangar and insurance expenses. We impose an annual limit of $150,000 on the CEO’s non-business use of Company-provided aircraft. For
2018, the amount for Mr. Lamach includes $150,000 for personal use of Company-provided aircraft. Under the Company’s aircraft use policy, the Compensation
Committee has determined that business use includes travel that is related to the Company’s business or benefits the Company, such as travel to meetings of other
boards on which the CEO sits. For 2018, the amount for Mr. Lamach includes $14,849 for such business-related travel.
These amounts also include: (i) the following incremental cost of the Company-leased cars, calculated based on the lease, insurance, fuel and maintenance costs to
the Company: Mr. Lamach, $18,643; Ms. Carter $19,635; Mr. Regnery, $18,731; Ms. Avedon, $7,980; and Ms. Green, $21,808; (ii) the following costs for financial
counseling services, which may include tax preparation and estate planning services: Mr. Lamach, $9,662; Ms. Carter $8,975; Mr. Regnery, $9,000; Ms. Avedon,
$9,283; and Ms. Green $7,500; (iii) the following costs for medical services provided through an on-site physician under the Executive Health Program: Mr.
Lamach, $0; Ms. Carter, $523; Mr. Regnery, $0; Ms. Avedon $2,373 and Ms. Green, $2,729; and (iv) the following amount for product rebates that are available to
all U.S. employees: Ms. Carter, $15,755 and Ms. Green, $750.