SEC Filings

DEF 14A
RELIANCE STEEL & ALUMINUM CO filed this Form DEF 14A on 04/05/2019
Entire Document
 

Executive Compensation Program Design

Our executive compensation program is designed to reward the Company’s executive officers for strong operational and financial performance, attract and retain key executive talent, and align compensation with the long-term interests of our stockholders. We structure our executive officers’ target total direct compensation to be competitive with the median compensation paid by companies with whom we may compete for executive talent, including those in our executive compensation peer group. We link a majority of our executives’ compensation to Company performance to drive our financial and operating performance and increase stockholder value. We believe that this pay-for-performance philosophy has been instrumental to our success.

We manage our business with the long-term objective of creating and maximizing value for our stockholders. Our pay-for-performance philosophy is aligned with and supports this objective.

Consistent with our past practice, the Compensation Committee evaluates performance by reviewing:

·

our operating and financial results, including performance against our executive compensation peer group, our industry peer group, and general economic factors that impact our business and industry;

·

economic return to stockholders over time, both on an absolute basis and relative to other companies, including the S&P 500, our executive compensation peer group and our industry peers; and

·

achievement of the Company’s goals and objectives (including management development, safety performance, working capital management, and capital allocation).

The Compensation Committee has linked a majority of our executives’ total direct compensation directly to the achievement of specific, pre-established Company performance targets. In 2018, approximately 74% of our former CEO’s and 60% of our other NEOs’ target total direct compensation was tied to performance targets.

2018 Financial and Operating Highlights

The following table highlights our financial and operating results in 2018 compared to 2017:

 

 

 

 

 

 

 

 

 

 

 

    

2018

    

2017

    

Change

 

Sales

 

$

11.53

billion  

$

9.72

billion  

18.7

%

Tons sold in '000s

 

 

6,112.6

 

 

6,053.4

 

1.0

%

Average selling price per ton sold

 

$

1,885

 

$

1,599

 

17.9

%

Gross profit margin

 

 

28.4

%  

 

28.7

%  

(0.3)

%

Operating income

 

$

937.5

million  

$

662.4

million  

41.5

%

Net income(1)

 

$

633.7

million  

$

613.4

million  

3.3

%

Cash flow from operations

 

$

664.6

million  

$

399.0

million  

66.6

%

Earnings per diluted share(1)

 

$

8.75

 

$

8.34

 

4.9

%

Closing market price of stock at December 31

 

$

71.17

 

$

85.79

 

(17.0)

%

Pretax income margin(2)

 

 

7.5

%  

 

6.0

%  

1.5

%

Annual return on assets ("ROA")(2)(3)

 

 

12.1

%  

 

8.7

%  

3.4

%

Dividends paid per share

 

$

2.00

 

$

1.80

 

11.1

%


(1)

The 2017 amount includes a $207.3 million, or $2.82 per diluted share, income tax benefit as a result of the Tax Cuts and Jobs Act of 2017.

(2)

Excludes non-recurring charges and credits, including impairment charges and gains on non-operating asset sales in 2018 and 2017.

(3)

Return on assets is calculated as operating income, excluding various non-recurring charges and credits, for the year divided by the average total assets for the year. 

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