|RELIANCE STEEL & ALUMINUM CO filed this Form DEF 14A on 04/05/2019|
Presented below is the ratio of annual total compensation of our CEO to the annual total compensation of our median employee (excluding our CEO). The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Exchange Act of 1934. The pay ratio rules provide companies with flexibility to select the methodology and assumptions used to identify the median employee, calculate the median employee's compensation and estimate the pay ratio. As a result, our methodology may differ from those used by other companies, which likely will make it very difficult to compare pay ratios with other companies, including those within our industry.
We identified the median employee from the Company’s employee population as of December 31, 2018. After excluding employees under the “de minimis exemption” (as described below), the Company’s employee population consisted of 14,249 employees located in the U.S., Canada, Mexico and the United Kingdom. For purposes of identifying the median employee, the Company was permitted to exclude up to 5% of its total employees who are non-U.S. employees. The Company relied on this exemption to exclude the employee populations of the following jurisdictions, which collectively accounted for less than 5% of the Company’s total employee population of 14,769 as of December 31, 2018: Australia (10); Belgium (31); France (76); India (21); Malaysia (77); People’s Republic of China (125); Singapore (52); South Korea (68); Turkey (29); and the United Arab Emirates (31).
In identifying our median employee, we calculated the annual total compensation of each employee for the twelve month period that ended on December 31, 2018. Annual total compensation for these purposes included base salary, overtime wages, bonus, commissions, incentives and comparable cash elements of compensation in non-U.S. jurisdictions and was calculated using internal payroll records. Specifically excluded from the annual compensation measure in identifying the median employee were retirement benefits and stock-based compensation. The compensation for full-time employees who were not employed by us for the entire 12-month period was annualized to reflect compensation for the entire 12-month period.
The 2018 annual total compensation as determined under Item 402(u) of Regulation S-K for our former CEO was $16,027,997. As reflected in the Summary Compensation Table above, $10,668,496 of our former CEO’s total compensation was equity-based of which 80% is tied to performance targets. The 2018 annual total compensation for our median employee was $59,077. The ratio of our former CEO’s annual total compensation to our median employee’s total cash compensation for fiscal year 2018 is approximately 271 to 1.