You are entitled to vote at the Simpson Manufacturing Co., Inc. (the “Company,” “Simpson,” “we” or “us”) 2020 Annual Meeting of Stockholders (the “Annual Meeting”) if you were a stockholder of record at the close of business on February 25, 2020 (the “Record Date”). Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on at the Annual Meeting. There were 44,365,526 shares of our common stock outstanding on the Record Date.

Instead of mailing a printed copy of our proxy materials, including our Annual Report to Stockholders and Annual Report on Form 10-K, to each stockholder of record, we are providing access to these materials via the Internet. This reduces the amount of paper necessary to produce these materials, as well as the costs associated with mailing these materials to all stockholders. Accordingly, on March 13, 2020, we will begin mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to all stockholders of record as of the Record Date, and post our proxy materials on the website referenced in the Notice (www.proxyvote.com). As more fully described in the Notice, all stockholders may choose to access our proxy materials on the website referred to in the Notice and/or may request a printed set of

our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.

See page 61 “Questions and Answers About the Annual Meeting of Stockholders and Voting” for details.

Your vote is important. Please vote via proxy promptly so your shares can be represented, even if you plan to attend the Annual Meeting. You can vote by Internet, by telephone or by requesting a printed copy of the proxy materials and using the proxy card enclosed with the printed materials.

The Proxy Statement, Annual Report to Stockholders and Annual Report on Form 10-K are available on the Internet at www.proxyvote.com.

The following information applicable to the Annual Meeting may be found in the Proxy Statement and accompanying proxy card:

• The date, time and location of the Annual Meeting;

• A list of the matters intended to be acted on and our recommendations regarding those matters;

• Any control/identification numbers that you need to access your proxy card; and

• Information about attending the meeting and voting in person.

By Order of the Board of Directors,

 

Terry Hammons
Secretary
March 11, 2020

This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully. As used in this Proxy Statement, unless the context otherwise indicates or requires, references to “Simpson,” the “Company,” “we,” “us,” and “our” mean Simpson 

Manufacturing Co., Inc. and its consolidated subsidiaries. We will first send and/or make available this Proxy Statement and the form of proxy for our 2020 Annual Meeting of Stockholders (the “Annual Meeting”) to our stockholders on or about March 13, 2020.

The Board of Directors (the “Board”) has nominated 8 candidates, each for a term extending until our 2021 Annual Meeting of Stockholders, and 

recommends that stockholders vote for each nominee based on their specific background, experience, qualifications, attributes and skills.

The Board is comprised of directors with strong professional reputations, skills and experience in established companies and other organizations of comparable status and size to us and/or in areas or industries relevant to our business, strategy and operations. Core skills and experiences 

represented by each of the director nominees are included in the summary graphic below. Further discussion on the qualifications and experience of director nominees is included in the “2020 Director Nominees” section of this Proxy Statement.

Our Board has implemented policies and structures that we believe are among the best practices in corporate governance. The Corporate Governance

section of this Proxy Statement beginning on page 10 describes our governance framework, which includes the following:

Sustainability and environmental and social responsibility is an integral component of our business strategy. As part of Simpson’s vision, we have established deeply rooted core values that 

continue to define our business today. At the forefront of these values is doing what is right for our employees’ safety and well-being, as well as for our customers, communities and environment.

We are committed to maintaining the highest standards of corporate governance. The Board has built a strong and effective governance framework,

which has been designed to promote the long-term interests of stockholders and support Board management accountability.

We recommend that you review our Compensation Discussion & Analysis beginning on page 33, which explains in greater detail the philosophy of the Compensation and Leadership Development Committee and its actions and decisions in 2019 regarding our Named Executive Officer 

compensation programs. While the outcome of this proposal is non-binding, the Board and Compensation and Leadership Development Committee expect to consider the outcome of the vote when making future compensation decisions.

Below we highlight certain of our executive compensation policies and practices, including both those which we utilize to drive performance and 

those which we prohibit because we do not believe they would serve our stockholders’ long-term interests.

Simpson’s executive compensation philosophy emphasizes pay-for-performance. Our philosophy is to provide executive compensation opportunities that approximate the 50^th percentile of appropriate market data that is based on our revenue size and industry. Our incentive plans are designed to reward strong performance, with greater compensation paid when performance exceeds expectations and less compensation paid when performance falls below expectations. Thus, the actual compensation realized by our Named Executive Officers (“NEOs”) will be commensurate with the Company’s actual performance.

Our Compensation and Leadership Development Committee has a practice of reviewing executive compensation program components, targets and payouts on an annual basis to ensure the strength of our pay-for-performance alignment. Our performance is evaluated against both short-term goals, which support Simpson’s business strategy, and long-term goals, which measure the creation of sustainable stockholder value.

At our 2019 Annual Meeting of Stockholders, Simpson again received strong support for its NEO compensation programs, with approximately 99% of votes cast approving, on an advisory basis, our NEO compensation. In 2019, as in prior years, the Compensation and Leadership Development Committee considered input from our stockholders

and other stakeholders as part of its annual review of Simpson’s executive compensation program.

Please see the “Compensation Discussion & Analysis” section in this Proxy Statement for a detailed description of our NEO compensation programs.

As part of its oversight of the Company’s executive compensation program, the Compensation and Leadership Development Committee reviews and considers any potential risk implications created by compensation. The Compensation and Leadership Development Committee believes that the executive compensation program is designed with the appropriate balance of risk and reward in relation to

the Company’s overall business strategy and that the balance of compensation elements does not encourage excessive risk taking. The Compensation and Leadership Development Committee will continue to consider compensation risk implications, as appropriate, in designing any new executive compensation components. In connection with its ongoing risk assessment, the Compensation and

Leadership Development Committee notes the following attributes of the executive compensation program:

The Compensation and Leadership Development Committee also has oversight over the Company’s responsibility to review significant Company compensation policies and procedures, including the incentives that they create, to assess risk. At the Compensation and Leadership Development Committee’s direction, the Company’s Human Resources Department, in partnership with Meridian, the Compensation and Leadership Development Committee’s independent consultant conducted a risk assessment of the Company’s compensation programs. Based on this assessment, management has concluded that the compensation policies and practices of the Company and its subsidiaries for employees do not create risks that are reasonably likely to have a material adverse effect on the Company and management has presented the results of its assessment to the Compensation and Leadership Development Committee.

Our Board has ratified our Audit and Finance Committee’s appointment of Grant Thornton LLP as Simpson’s independent registered public 

accounting firm for the year ending December 31, 2020, and, as a matter of good governance, we are seeking stockholder ratification of that appointment.

Unless otherwise directed, the persons named as proxies on the enclosed proxy card intend to vote “FOR” the election of each of the nominees. If any nominee should become unavailable for election, 

the shares will be voted for such substitute nominee as may be proposed by our Board. However, we are not aware of any circumstances that would prevent any of the nominees from serving.

In nominating individuals to become members of the Board, the Nominating and Governance Committee considers the experience, qualifications, attributes and skills of each potential member. Each nominee brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas.

The Nominating and Governance Committee and the Board considered the following information, including the specific experience, qualifications, attributes or skills of each individual, in concluding each was an appropriate nominee to serve as a member of our Board for the term commencing at this year’s Annual Meeting (ages are as of March 11, 2020).

Our Certificate of Incorporation provides that, at each annual meeting of stockholders, all directors shall be elected annually for a term expiring at the next succeeding annual meeting of stockholders or until their respective successors are duly elected and qualified. Accordingly, on the recommendation of our Nominating and Governance Committee,  

our Board nominates for election, James S. Andrasick, Michael A. Bless, Jennifer A. Chatman, Karen Colonias, Gary M. Cusumano, Philip E. Donaldson, Celeste V. Ford and Robin G. MacGillivray who will stand for reelection as directors at this year’s Annual Meeting, each for a term extending until our 2021 Annual Meeting of Stockholders.

In identifying director candidates, the Board seeks to achieve a mix of members who collectively bring significant value to the Company through their experience and personal backgrounds relevant to Simpson’s strategic priorities and the scope and complexity of our business and industry. In light of Simpson’s strategic priorities, and based on its self-assessment, the Board identified key skills and experiences for director candidates that included, but are not limited to, current public company senior executive and board experience in managing a diversified enterprise, industry experience or understanding, an appreciation of the impacts of rapidly changing technologies and experience in managing and expanding business outside of the United States, especially in Europe. To complement its oversight responsibilities, the Board also identified implementing or overseeing company growth, strategy development, mergers and acquisitions and operations experience as key Board skills. In addition, each candidate should:

Our Corporate Governance Guidelines place limits on the number of boards on which Simpson directors may serve. Such limits provide that any director who is a chief executive officer or other senior executive of a public company should serve on no more than two public company boards, and any other director should serve on no more than four public company boards, in both instances including the Simpson Board. Additionally, any member of our Audit and Finance Committee may serve on the audit committee of no more than three other public companies. While Mr. Bless is a chief executive officer of a public company and serves as a director on two public company boards in addition to his service as a director on our Board, we believe Mr. Bless is not overboarded as demonstrated by, among other things, his perfect attendance at meetings during his tenure. We also note that the other two companies for which Mr. Bless serves as a director are Chicago-based, and require limited, if any travel to meet his commitments with respect to his board service. We believe it is also relevant to note that CNA is a publicly-traded company that is a “controlled company” under NYSE rules, with one stockholder owning approximately 89% of the outstanding common stock.

In addition, the Nominating and Governance Committee also considers it desirable that candidates contribute positively to the collaborative culture among Board members and possess professional and personal experiences and expertise relevant to our business and industry. The Nominating and Governance Committee solicits ideas for possible candidates from a number of sources, including independent director candidate search firms, members of the Board and our senior level executives.

Once a prospective candidate has come to the Nominating and Governance Committee’s attention, including candidates recommended by its advisors or suggested by stockholders, the Nominating and Governance Committee evaluates the candidate’s qualifications and skills, against the desired director attributes, and makes an initial determination as to whether to conduct a full evaluation. In making this

determination, the Nominating and Governance Committee takes into account the information provided to it with the recommendation of the candidate, as well as the Nominating and Governance Committee’s own knowledge and information obtained through inquiries to third parties to the extent the Nominating and Governance Committee deems appropriate. The preliminary determination is based primarily on the current need for additional Board members and the likelihood that the prospective candidate can satisfy the criteria that the Nominating and Governance Committee has established. If the Nominating and Governance Committee determines, in consultation with the Chair of the Board and other

directors, as appropriate, that additional consideration is warranted, it may request a third party to gather additional information about the prospective candidate’s background and experience and to report its findings to the Nominating and Governance Committee. The Nominating and Governance Committee may then evaluate the prospective candidate against the Board selection criteria that it has developed.

The Board recognizes the benefits of a diversified board and believes that any search for potential director candidates should consider diversity as to gender, race, ethnic background and personal and professional experiences.

While we do not have a formal policy with regard to diversity in identifying director nominees, the Board believes that the backgrounds and qualifications of directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. The Board nominees come from a variety of backgrounds and 50% of our directors 

will be women if all eight Board nominees are elected to the Board at the Annual Meeting. We do not discriminate against nominees on the basis of race, color, religion, gender, gender identity or expression, sexual orientation, age, national origin, disability, covered veteran status, or any other status protected by law.

The Board currently believes that a robust board evaluation process - one focused on the assessment and alignment of director skills with company strategy and priorities - is more effective than relying solely on age or tenure limits to achieve board refreshment. Therefore, we do not have a fixed retirement age for directors. Under our current Corporate Governance Guidelines, no outside director who came on to the

Board prior to 2016 will be nominated for re-election after 20 years of board service, and the Board generally will not nominate outside directors who come on to the Board after 2016 for re-election after 15 years of board service. If all eight Board nominees are elected to the Board at the Annual Meeting, the average tenure of our directors will be approximately nine years.

The New York Stock Exchange (“NYSE”) listing standards require our Board to be comprised of at least a majority of independent directors. Our Corporate Governance Guidelines require that the Board be comprised substantially of independent directors. For a director to be considered independent, our Board must determine that the director does not have any direct or indirect material relationship with us. To assist it in determining director independence, and as permitted by NYSE rules then in effect, the Board previously established

categorical standards which conform to, or are more exacting than, the independence requirements in the NYSE listing standards. These standards are contained in our Corporate Governance Guidelines, which can be found on our website at www.simpsonmfg.com under “Investor Relations - Corporate Governance.”

Based on these independence standards, our Board has affirmatively determined that the following directors are independent and meet our categorical independence standards:

In determining the independence of the directors, our Board considered ordinary course transactions between us and other entities with which the directors are associated, none of which were determined to constitute a material relationship with us. None of the above listed directors has any relationship with

Simpson, except as a director and stockholder. Our Board also considered contributions by us to charitable organizations with which the directors were associated. No director is related to any executive or significant stockholder of Simpson, nor is any director, with the exception of Ms. Colonias, a current or former employee of Simpson.

Any stockholder may nominate one or more persons for election as one of our directors at the Annual Meeting if the stockholder complies with the notice, information and consent provisions contained in our By-Laws. See “Stockholders’ Proposals” in this Proxy Statement.

The Nominating and Governance Committee will consider candidates identified through the processes described above and will evaluate the candidates, including incumbents, based on the same criteria.

The Nominating and Governance Committee also takes into account the contributions of incumbent directors as Board members and the benefits to us arising from their experience on the Board. Although the Nominating and Governance Committee will consider candidates identified by stockholders, the Nominating and Governance Committee has sole discretion whether to recommend those candidates to the Board.

The Director nominees stand for election or reelection to the Board by our stockholders at the

Annual Meeting, each for a term extending until next year’s Annual Meeting of Stockholders.

As part of its oversight function, the Board is actively involved in overseeing risk management. In connection with overseeing risk management, the Board exercises its oversight responsibility with respect to key external, strategic, operational and

financial risks through the committees of the Board and discusses the effectiveness of current efforts to mitigate certain focus risks as identified by senior management and the Board.

In an effort to continuously improve our governance and compensation practices, our Board is firmly committed to constructive engagement with our stockholders and regularly reviews and responds to their expressed views.

The Board places considerable weight on stockholder feedback in making decisions impacting our governance processes and compensation programs. Over the past four years, this increased dialogue with our stockholders has led to meaningful changes in our corporate governance, environmental, social and executive compensation policies and practices, such as those highlighted below.

Enhancements to our practices and policies

Governance:

board Sustainability and Environmental and Social Responsibility:

Compensation:

New directors are oriented to our business and governance through meetings with our officers and directors and visits to our facilities. We also 

support, and pay for participation in continuing education programs to assist directors in performing their Board responsibilities.

Our Board recognizes the critical role of annual Board and committee evaluations in ensuring the Board and each committee are functioning effectively. The Board has a regular practice of assessing its own effectiveness as well as the diversity of skill sets of its members, the alignment of areas of expertise with the Company’s strategy and priorities, and stewardship of

company performance. In addition to self-evaluation, the Board has also engaged a third-party corporate governance consulting firm, to evaluate the existing skills and experience represented on the Board as well as what additional skills and experience would add to the overall effectiveness of the Board in light of its current strategy.

Sustainability and environmental and social responsibility is an integral component of our business strategy. As part of Simpson’s vision, we have established deeply rooted core values that continue to define our business today. Our founder, Barclay Simpson, outlined nine essential attributes for company and employee success. Those “Nine Principles of Business” are our company values, and we continue to abide by them to this day.

At the forefront of these values is doing what is right for our employees’ safety and well-being, as well as 

for our customers, communities and environment. We honor the Nine Principles of Business through our involvement in our local communities and efforts to help protect our environment.

You can find additional details regarding our sustainability and environmental and social responsibility efforts and other related programs in our Sustainability, Environmental and Social Responsibility Report on our website at www.simpsonmfg.com/sustainability.

Stockholders or other interested persons may send written communications to the independent members of our Board, addressed to Board of 

Directors (Independent Directors), c/o Simpson Manufacturing Co., Inc., P.O. Box 7655, Berkeley, California 94507.

Since before our initial public offering in 1994, the roles of our Board Chair and our Chief Executive Officer have been separated. We believe that this is appropriate under current circumstances, because it allows management to make the operating decisions necessary to manage the business, while helping to keep a measure of independence between the oversight function of the Board and operating decisions. We feel that this has provided an appropriate balance of operational focus, flexibility and oversight.

Because an independent director currently serves as Chair of our Board, we do not separately have  

a Lead Independent Director. Mr. Andrasick, as Chair of the Board, participates in setting the agenda of Board and committee meetings, coordinating the distribution and presentation of meeting materials, facilitating communications among members of the Board and management, leading the Board self-evaluation process, and maintaining the focus and punctuality of Board and committee meetings. In addition, the Chair’s role also includes leading the efforts in evaluating our Chief Executive Officer and in succession planning, considering Board committee membership and leadership, and presiding at annual meetings of stockholders.

Pursuant to the NYSE listing standards, our non-management directors meet at regularly scheduled executive sessions without members of 

management present. In 2019, our current Board Chair, Mr. Andrasick, presided over these executive sessions.

In 2019, the Board held 6 meetings, and its committees held a total of 28 meetings, including 6 meetings of the Audit and Finance Committee, 12 meetings of the Compensation and Leadership Development Committee, 5 meetings of the Nominating and Governance Committee and 5 meetings of the Corporate Strategy and Acquisitions Committee.

In 2019, each of our directors attended 100% of the aggregate of the total number of meetings of the

Board and the total number of meetings of the Board committee(s) on which he or she served. In addition, as a group the Board members attended 100% of the total number of Board and committee meetings.

We do not have a policy that requires our directors to attend annual meetings of stockholders, but 100% of our current directors attended the 2019 Annual Meeting of Stockholders.

The Board has adopted an anti-hedging and anti-pledging policy. Directors, officers, and employees of the Company or any subsidiary of the Company, as well as their designees, are generally prohibited from: (a) purchasing any financial instruments or engaging in any transactions that are designed to hedge or offset or have the effect of hedging or offsetting any decrease in the market value of our equity securities (such as our

common stock), including, without limitation, prepaid variable forward contracts, equity swaps, collars, exchange funds and transactions with economic consequences comparable to the foregoing financial instruments; and (b) further pledging our equity securities as collateral for a loan, purchasing such securities on margin, or holding such securities in a margin account.

The standing committees of our Board are the Audit and Finance Committee, the Compensation and Leadership Development Committee, the Corporate Strategy and Acquisitions Committee and the Nominating and Governance Committee. The Board appoints members of the committees and each 

committee operates under a written charter approved by the Board. With the exception of the Corporate Strategy and Acquisitions Committee all of our standing committees are composed entirely of independent directors. Attendance at committee meetings is open to every director, regardless of whether he or she is a member of such committee.

The members of the Compensation and Leadership Development Committee during 2019 were Gary M. Cusumano (Chair), James S. Andrasick, Celeste Volz Ford, and Robin G. MacGillivray. All members of our Compensation and Leadership Development Committee are independent in accordance with NYSE listing standards. No member of the Compensation and Leadership Development Committee (1) was, during the year ended December 31, 2019, or had

previously been, an officer or employee of Simpson or any of its subsidiaries, or (2) had any material interest in a transaction of Simpson or a business relationship with, or any indebtedness to, Simpson. No interlocking relationship existed during the year ended December 31, 2019 between any member of the Board or the Compensation and Leadership Development Committee and an executive officer of Simpson.

The Compensation and Leadership Development Committee has the authority under its charter to retain or obtain the advice of advisers, including compensation consultants, as it may deem appropriate. In accordance with this authority, from 2014 to 2019, the Compensation and Leadership Development Committee engaged Mercer LLC, Mercer (US) Inc. and Mercer Health and Benefits LLC (collectively, “Mercer”) as its independent compensation consultant to provide it with objective and expert analysis, advice and information with respect to executive compensation. Our Compensation and Leadership Development Committee regularly reviews its executive compensation consulting needs and periodically invites compensation consulting firms to discuss these executive compensation needs with the Compensation and Leadership Development Committee. This process enables the Compensation and Leadership Development Committee to reevaluate its compensation consultant and take a fresh look at our compensation practices and policies.

During 2019, the Compensation and Leadership Development Committee invited several consulting firms to present to the Compensation and Leadership Development Committee. The Compensation and Leadership Development Committee evaluated consulting firms on consulting competency, technical competency, industry knowledge, independence and fee structure, among other things. As a result of the review, our Compensation and Leadership Development Committee appointed Meridian Compensation Partners, LLC (“Meridian”) on July 25, 2019 as its independent compensation consultant, replacing Mercer.

All executive compensation services provided by Mercer and Meridian were conducted under the direction or authority of the Compensation and Leadership Development Committee. In addition to compensation consultants, members of our Human Resources and Finance Departments support the Compensation and Leadership Development Committee in its work.

The compensation consultants were engaged by the Compensation and Leadership Development Committee to provide services including:

We paid Mercer total fees of approximately $271,234, for these services in 2019.

The Company also engaged Mercer to perform additional services for us, including providing consulting services in connection with our implementation of a global Human Resources Information System (HRIS), and conducting compensation benchmarking analysis. We paid Mercer total fees of approximately $69,308 for these services in 2019. We engaged Marsh USA Inc. (“Marsh”), an affiliate of Mercer, for the placement of

our various lines of business insurance. In 2019, we paid Marsh approximately $4.6 million, primarily for insurance premiums that were passed through from Marsh to insurance carriers, and including approximately $374,000 brokerage fees that Marsh retained. The decision to engage Mercer for these additional services was made by management with the knowledge of the Board and the Compensation and Leadership Development Committee, rather than being approved by the Board or the Compensation and Leadership Development Committee.

The Compensation and Leadership Development Committee has considered the required independence factors outlined by the SEC and NYSE rules in assessing the independence of the compensation consultants. Consideration was also given by the Compensation and Leadership Development Committee under those required independence factors, plus all other relevant factors, to whether the work performed by Mercer or Marsh could give rise to a potential conflict of interest. Based on this review, the Compensation and Leadership Development Committee did not identify any conflict of interest raised by the work performed by Mercer or Marsh.

We have adopted a written Related Person Transaction Policy applicable to any individual transaction or series of related-person transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which:

Pursuant to the Related Party Transactions Policy, the Nominating and Governance Committee or entire Board, as applicable, is responsible for review, approval, and ratification of transactions between the Company, its branches or subsidiaries and related persons and members of our leadership team as designated by the Nominating and Governance Committee or Board from time to time. In accordance with the Related Party Transactions Policy, except for pre-approved transactions, if a transaction involves a covered employee (or an immediate family member thereof) and is valued at less than $1 million U.S. dollars, then a transaction review committee (the

“TRC”), which serves as an advisory committee of the Company and generally includes our Chief Financial Officer, or his or her designee, and our General Counsel (provided that if the Chief Financial Officer is a related party, he or she will be replaced by another officer of the Company), will make recommendations to the Nominating and Governance Committee and the Nominating and Governance Committee will decide whether to approve or ratify the transaction; and if a transaction involves a director or 5% stockholder (or an immediate family member thereof) or involves a covered employee (or an immediate family member thereof) but is valued at $1 million or more, the TRC will make recommendations to the Board, and the Board will decide whether to approve or ratify the transaction (provided that no director shall participate in any discussion or approval of a transaction for which he or she or any of his or her immediate family members is involved). In determining whether to approve, ratify or disapprove a related party transaction, the Nominating and Governance Committee or Board will consider, among other factors, whether the transaction is entered into on terms no less favorable to us than terms generally available to an unaffiliated third-party under the same or similar circumstances; the results of an appraisal, if any; whether there was a bidding process and the

results thereof; review of the valuation methodology used and alternative approaches to valuation of the transaction; and the extent of the related person’s interest in the transaction. There were no 

transactions found to be directly or indirectly material to a related person required by SEC rules to be disclosed in this Proxy Statement.

Under our 2019 nonemployee director compensation program, cash compensation for nonemployee

directors consisted of retainers and membership fees as follows:

The annual retainers are generally paid quarterly and the committee membership and chair fees are paid at the time of the annual meeting of stockholders. In addition to the annual board retainer, our nonemployee directors also receive a grant of vested shares with a value of approximately $95,000.

The Chair of the Board also receives a grant of vested shares with a value of approximately $25,000 along with the Additional Board Chair cash retainer.

The table below summarizes the compensation earned by or paid to our nonemployee directors during the year ended December 31, 2019.

We are asking our stockholders to vote on an advisory basis to approve the compensation of our Named Executive Officers (or “NEOs”) (sometimes referred to as “Say on Pay”) in accordance with Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”). We conduct our Say on Pay votes annually, and, after the Annual Meeting, the next required Say on Pay vote is expected to occur at the 2021 Annual Meeting of Stockholders. The Board recommends a vote “FOR” this proposal because it believes that our compensation policies and practices are effective in achieving Simpson’s philosophy of providing compensation that:

For the reasons discussed in the “Compensation Discussion & Analysis,” accompanying compensation tables and related narrative disclosures in this Proxy Statement, the Board unanimously recommends that stockholders vote “FOR” the following resolution:

“RESOLVED, that the compensation paid to the NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables and accompanying narrative discussion in Simpson‘s Proxy Statement relating to its 2020 annual meeting of stockholders, is hereby APPROVED.”

Although the resolution is non-binding, the Board and Compensation and Leadership Development Committee expects to consider the outcome of the vote when making future compensation decisions.

The following profiles provide the relevant experience, age and executive officer tenure with Simpson of our current executive officers. The profile for Karen

Colonias, our President and Chief Executive Officer and an incumbent director, is set forth above under “2020 Nominees.”

Mr. Magstadt has served as our Chief Financial Officer and Treasurer since January 2012. He joined Simpson in 2004 as a Financial Reporting Specialist, and, from 2008 until 2012, served as our Financial Reporting Manager, overseeing our external reporting program and managing various other accounting and finance

functions. He is a licensed Certified Public Accountant and holds a Bachelor of Science degree in Business Administration from California State University, Chico, and a Masters of Business Administration degree from Santa Clara University.

Mr. Dankel has been the President of North American Sales of our subsidiary, Simpson Strong-Tie Company Inc. (“Simpson Strong-Tie”) since July 2014. He has been employed with us since 1993 as a Field Sales Representative until 1997, when he was promoted to Sales Manager in McKinney, Texas, and then Branch

Sales Manager in charge of all sales functions of that branch. He has successfully integrated multiple new products, both acquired and internally developed, into Simpson Strong-Tie’s product lines. Mr. Dankel holds a Bachelor of Science degree in Business Administration from Millsaps College.

Mr. Swartzendruber has been our Senior Vice President of Finance since October 2017. Prior to joining Simpson he was vice president and corporate controller at Flex Ltd. from October 2005 through September 2017, where his responsibilities primarily included consolidation, external reporting to the SEC, external audit and compliance with US GAAP and SEC rules. Prior to joining Flex Ltd, Mr. Swartzendruber was a director of SEC reporting and technical accounting

with EchoStar (Dish Network) and prior to that, was a senior manager with Deloitte serving private equity investors in its mergers and acquisitions group and also serving high tech clients as an audit professional. Mr. Swartzendruber is a Certified Public Accountant (inactive status) in Colorado and California and graduated summa cum laude from the University of Cincinnati with a Bachelor of Business Administration in accounting and finance.

Mr. Hammons has been our Senior Vice President, General Counsel since May 2019, and Secretary since July 2019. Prior to joining Simpson he was Vice President, Deputy General Counsel, Corporate, Chief Regional Counsel and Assistant Secretary at Albemarle Corporation, from August 2015 through April 2019, where he was responsible for the company’s worldwide corporate legal activities, including all strategic transactions (M&A, 

joint ventures and venture capital), and supporting the Lithium GBU Resources team. Prior to joining ‘Albemarle Corporation, Mr. Hammons was the Assistant General Counsel – Corporate and Commercial at Air Products and Chemicals, Inc., and prior to that he held Associate positions at Arnold & Porter and Hunton & Williams. Mr. Hammons holds a J.D. from Georgetown University Law Center and a B.A. from The College of William & Mary.

The following profile provides the relevent experience, age and executive officer tenure with Simpson of Ricardo Arevalo, our former Chief Operating Officer,

Simpson Strong-Tie Company, Inc. Mr. Arevalo retired effective February 15, 2020.

Mr. Arevalo was the Chief Operating Officer of our subsidiary, Simpson Strong-Tie, from July 2014 to February 2020. Mr. Arevalo began his career with us in 1999 at the Simpson Strong-Tie branch in Brea, California, as a Field Sales Engineer for the Wood Strong-Wall. From 2002 to 2008, he served as Simpson Strong-Tie’s Branch Engineering Manager for the Southwest United States. In 2008, he was promoted to Simpson Strong-Tie’s Vice President of Engineering, and in that capacity he organized and managed the support structure for multiple engineering groups (Connectors, Lateral systems, Fasteners, Anchors, FRP, RPS, Truss  

and Engineering Services), standardized policies and modernized and expanded our research and test capabilities. Mr. Arevalo is a licensed California structural engineer and civil engineer, previously was a part-time lecturer in timber design at California Polytechnic University at Pomona and is the author of several publications on wood structures. He has represented Simpson Strong-Tie on national television promoting deck safety. Mr. Arevalo holds degrees from California Polytechnic University at San Luis Obispo and the University of California at Santa Barbara. Prior to joining Simpson Strong-Tie, he spent 19 years in private practice as a structural engineer.

The Company’s business operations are led by its senior leadership team, which in 2019 included the executive officers whose biographies are provided above. In this section, we explain and discuss the executive compensation program that our Compensation and Leadership Development Committee (“CLDC”) designed and applied to our NEOs for 2019. This discussion is also intended to describe our compensation policies with respect to our executive officers and to provide a review of 

our key compensation decisions and activities for 2019. Our goal in this discussion is to provide you with a better understanding, both in absolute terms and relative to our performance, of our executive compensation practices and the decisions made concerning the compensation payable to our executive officers, including our CEO and the other executive officers named in the “2019 Summary Compensation Table” below. Our NEOs for 2019 were the following individuals:

The Company focuses on designing, manufacturing, and marketing systems and products to make buildings and structures safe and secure. The Company, through its subsidiaries, designs, engineers, and manufactures structural construction products, including connectors, truss plates, anchors, fasteners and other products, and differentiates itself from competitors by designing and marketing end-to-end wood and concrete construction product lines. The Company also provides engineering services in support of some of its products and increasingly offers design and other software that facilitates the specification, selection and use of its products. The Company believes that its primary operating brand – the Simpson Strong-Tie brand – benefits from strong brand name recognition among architects and engineers who frequently request the use of the Company’s products.

The nature of our industry demands that we adhere to a focused strategy to build stockholder long-term value over time. During 2019, our management team continued to execute against the strategic goals set 

by the Board, which resulted in increases in net sales and return on invested capital (“ROIC”) for our stockholders. Our key 2019 performance highlights are set forth below:

Our management’s focused execution and continued commitment to a disciplined capital allocation strategy delivered strong results for our stockholders in 2019, including the following achievements:

Net sales increased in each of 2017, 2018 and 2019. 2017 net sales increased 13.5% primarily due to increases in both sales volumes and average net sales unit prices in North America as well as increases in Europe due to acquisitions. 2018 net sales increased 10.4% primarily due to higher sales volume and average unit price in the United States, offset partially by sales decreases in Europe due to the sale of a portion of a European subsidiary. 2019 net sales increased 5.4% primarily due to increased sales volume and average unit price in the United States, offset by negative foreign currency impacts in Canada and Europe.

Operating margins have improved since 2017, primarily due to the reduction of operating expenses as a percent of revenues and gains on sales of assets in 2018 and 2019, partially offset by reduced gross margins. Gross margins have been 

negatively impacted by higher material and labor costs. The reduction in operating expenses as a percent of revenues have been a focus for the company as a result of the 2020 plan announced in late 2017.

ROIC has increased since 2017 on higher net income due to the higher operating margins as noted above as well as the reduced effective tax rate as a result of the 2017 tax law change. Invested capital has remained relatively flat from 2017 through 2019 due to the company returning capital to stockholders in the form of dividends and share repurchases. Capital returned to stockholders for each of the three years 2019, 2018 and 2017 was approximately $101.1 million, $150.4 million and $107.0 million, respectively.

We outperformed the Dow Jones U.S. Building Materials & Fixtures Index and our Peer Group in terms of total stockholder returns (“TSR”) delivered to our stockholders in 2019.

Our NEOs’ compensation generally is comprised of three core components – (1) base salary, (2) short-term cash awards, and (3) long-term equity awards, which are structured to complement each other and establish a balanced and performance-based pay structure. The overarching goals of our compensation programs for 2019 were to attract, motivate and retain

our employees, including our management team, establish a strong sense of ownership, and closely align our executives’ and employees’ interests with those of our stockholders. The target compensation mixes for 2019 for our CEO and, on average, our other NEOs are set forth below:

The 2019 compensation results for our NEOs continued to reflect the CLDC’s pay-for-performance philosophy of aligning executive compensation directly with our operational and financial performance:

Base Salaries:

The changes in base salaries listed below were made based on the review of benchmark peer group data and individual performance and contribution.

Executive Officer Cash Profit Sharing
(“EOCPS”) Awards:

All NEOs paid out at approximately 57.9% their target

Equity Awards:

Please refer to the “2019 Summary Compensation Table,” “NEO Compensation Program Design” and “Executive Compensation Analysis” subsections below for a complete disclosure of our CEO and the other NEOs’ 2019 total compensation programs and values.

Our overall compensation philosophy is to align the interests of our employees and stockholders and provide employees, including our management, incentives to increase stockholder value, and to position our NEOs’ total target compensation to the median of our peers. To motivate and retain our NEOs and other employees, we aim to compensate them fairly relative to our performance. To achieve these objectives under our pay-for-performance guiding principal, we created compensation programs that reward achievement of specific performance goals,

such as operating profit, revenue growth, ROIC and the efficient use of assets. We believe that our current compensation programs allow us to attract high-performing employees and help us retain the services of employees whose contributions are instrumental in achieving our strategies. The CLDC and the Board regularly review and refine our executive compensation programs to ensure that such programs continue to reflect policies and practices that are aligned with our pay-for-performance philosophy and the interest of our stockholders.

Role of Compensation and Leadership Development Committee, Board and Management. The CLDC develops and updates our compensation policies and practices, oversees our compensation programs, sets performance goals relevant to such programs, evaluates our performance in light of such goals, and determines and exercises discretion over executive compensation, including reviewing and approving annual compensation to our NEOs. The CLDC does not delegate its role in determining executive compensation. Our officers do, however, participate in our annual budgeting process, which forms the basis for the CLDC to set, and

determine the achievement of the performance goals under our compensation programs. The Board reviews and approves the annual budget, and based on that, the CLDC approves both cash EOCPS payouts and equity-based awards to our NEOs. Our CEO provides significant input in recommending the structure of our pay programs and recommending any adjustments to the other NEOs base salary and target incentive compensation opportunities. The CLDC can accept, reject or modify the CEO’s recommendations as it sees fit, subject to the terms of any applicable program documentation.

Role of Compensation Consultants. The CLDC has engaged, and expects to continue to engage, independent advisers, including compensation consultants, from time to time to assist in carrying out its responsibilities. Since 2014, the CLDC had engaged Mercer as an independent compensation consultant to provide strategic guidance to the CLDC regarding executive and director compensation. In July 2019, the CLDC appointed Meridian as its independent compensation consultant, replacing

Mercer. The specific services provided by Mercer and Meridian to us in 2019 consisted of: updating our industry peer group and benchmarking analysis, assessment of the appropriateness and competitiveness of our executive compensation program as compared to those of the selected industry peer group, recommendation of changes to our executive compensation programs, especially our NEOs’ compensation mix, and evaluation of our executive and director compensation.

In late 2019 and early 2020 we continued our annual engagement with our stockholders. This engagement gave us a basis for further evaluation of our practices in executive compensation and corporate governance. This initiative was led by the Board and senior management, by reaching out to stockholders holding 76% of our outstanding shares. Out of those stockholders who elected to engage with us (representing approximately 41% of our outstanding shares), we organized follow-up calls. This outreach reflects our commitment to understand and address key issues of importance to our stockholders. In line with the high support for our executive compensation program as expressed in the 2019 annual shareholder advisory vote to approve our NEO compensation, stockholders continued their support for our compensation program and the changes made over the past few years. This strong level of support led our

CLDC to conclude that material changes in our executive compensation design, solely due to the outcome of the Say-on-Pay vote, were not warranted for 2020.

Following the 2019 Annual Meeting of Stockholders, we again continued to actively engage with numerous stockholders on matters of corporate governance, executive compensation and related matters. These efforts were led by the Chair of our Board and our CFO to help ensure a direct line of communication between the Board and our stockholders, and stockholder feedback was promptly relayed to the full Board and incorporated into our governance and compensation reviews. We also continue to work with Meridian to monitor changes in executive compensation to keep our executive compensation program aligned with both our business strategy and best practices in our competitive market.

The CLDC has continued to operate the following policies and practices to closely align our management’s compensation programs with stockholder value creation and the Company’s strategic goals:

We are also committed to maintaining strong compensation risk management practices that support our pay for performance philosophy, mitigate risk, and align interests of our executives and our stockholders:

A key aspect of our compensation programs focuses on the selection of performance metrics that (1) reflect our long-term strategic goals and (2) appropriately incentivize our executives to deliver sustainable performance across key areas. The CLDC sets performance goals for our NEOs’ EOCPS and performance-based equity awards prior to granting such awards and remains engaged to monitor and certify the achievement of the goals. The CLDC believes in the importance of setting challenging, but achievable, performance goals for our NEOs and using such goals to support our median pay for median performance philosophy (or in some cases median pay for above median performance). The CLDC maintains a robust and collaborative performance goal setting process with its independent compensation consultant and our management. The goal setting process spans multiple CLDC meetings on both sides of the year-end process to ensure an

active, healthy discussion and ability to respond and adapt the performance goals to changing company, industry or market conditions prior to finalization. In establishing performance goals with respect to our NEOs’ EOCPS and performance-based equity awards, the CLDC reviews market-calibrated data sets that include:

After carefully evaluating the aforementioned factors and incorporating inputs from its independent compensation consultant and our management, the CLDC approves the performance goals for our NEOs.

The performance goals for NEOs’ 2019 EOCPS and performance-based equity awards and their alignment with our strategies are set forth below:

The Board believes that, to maintain a sense of unity and fairness, the forms of compensation for our NEOs generally should match those of our other employees. Under this principle, our compensation programs for a large portion of our salaried employees, including our NEOs, comprise three basic elements:

Each element of our compensation programs possesses characteristics intended to motivate our NEOs and other employees in different ways. We believe that coordinated compensation elements work best to help us to retain their services and to motivate them to achieve results that increase stockholder value.

A NEO’s salary is a guaranteed minimum amount for his or her time invested in performing the functions of the job. Salary alone, however, does not provide performance opportunity for the NEO to earn additional compensation or incentivize increasing stockholder value over time. Our NEOs’ salaries are generally determined by the CLDC based on historical salary levels for their respective positions, current compensation for similar positions at our peers, changes in the NEOs’ responsibilities and cost of living

adjustments. Based on its review of the NEOs’ base salary rates and the recommendation of the compensation consultant, the CLDC decided to increase the salary rates for Ms. Colonias and Mr. Swartzendruber by approximately 5% and 7%, respectively. These increases were provided specifically as a result of peer data and employee performance. The table below sets forth the NEOs’ respective 2018 and 2019 annual salary rates, reflecting these changes:

In 2019, the Company also made a one-time payout of earned and accrued vacation pay as of December 31, 2018 to certain of its NEOs with an accrued balance as a result of its transition to a flexible time away policy for all of the Company’s U.S.-based exempt employees. Mr. Magstadt received $56,250, Mr. Arevalo received $41,197 and Mr. Dankel received $48,360 as a result of these payments. Ms. Colonias and Mr. Swartzendruber each did not have earned but not taken vacation as of December 31, 2018 and,

accordingly, did not receive any similar payments. The Company’s U.S. exempt employees, including our NEOs, no longer accrued vacation pay beginning January 1, 2019.

Base salaries and related payments earned by each of our NEOs with respect to each of the three years ended December 31, 2019, 2018 and 2017, respectively, if applicable, are set forth in the “2019 Summary Compensation Table” below.

We, maintain the EOCPS Plan for our executive officers, similar to the cash profit sharing plan maintained for other qualified employees, to motivate them to achieve these short-term performance goals. We believe that both of these plans have significantly contributed to our growth.

Historically, the EOCPS Plan helped us meet the requirements of Internal Revenue Code Section 162(m) for us to potentially fully deduct cash awards granted to our NEOs in excess of the $1,000,000 limit as “performance-based compensation.” While the performance-based exception under Section 162(m) was repealed by December 2017 federal tax reform legislation, EOCPS payments made in or for 2019 continued to be subject to a cap of two times the NEO’s annual target EOCPS award.

The CLDC is responsible for administrating the EOCPS Plan. The CLDC measures our Company’s or our subsidiaries’ performance against pre-determined performance goals, which are currently based on our Company’s or our subsidiaries’ operating profits, and approves our NEOs’ individual awards. EOCPS award payouts for 2019 were generally based on operating income achievement versus pre-determined quarterly and annual goals.

Under the EOCPS Plan, any earned award will be paid at such time as determined by the CLDC as long as all awards with respect to periods within a fiscal year are paid by March 15 of the succeeding fiscal year. We currently pay four quarterly awards and one annual award based on our achievement versus our pre-determined operating income goals for such quarters and the full year. For the four quarters in a year, a NEO will earn an aggregate award payout based on 50% of his or her annual target award opportunity. As for the

last payment, the NEO will earn an award payout based on the remaining 50% of his or her applicable annual target award opportunity. The effect of the five payments (four quarterly and one annual) is to increase the target amount of awards made following the end of the year (the sum of the four target quarterly awards equaling the target annual award), with the year-end awards contingent on achieving the performance versus the operating income goals established for the entire year.

If the operating income achievement is less than the threshold goal in any quarter, our NEOs will receive no EOCPS award payment for such quarter. If the annual operating income achievement is less than the annual threshold goal for the year, our NEOs will 

receive no EOCPS award payments for the annual portion of the award, but may still receive one or more quarterly EOCPS payments during the year. If the operating income achievement is less than the threshold goal in each quarter and for the full year, our NEOs will receive no EOCPS award payouts for that year.

We allocated EOCPS award opportunities among our NEOs as approved by the CLDC at the beginning of the year based on the officers’ levels of responsibility and contribution to the success of the Company or the home office operating unit. Unless the composition or responsibilities of our NEOs change, their award opportunities generally do not change substantially from year to year, although the CLDC has discretion to make any changes that it considers appropriate.

The CLDC determined to use the operating income of Simpson Strong-Tie Company Inc., our primary operating subsidiary, as the performance metric for 2019 under the EOCPS Plan. Target award payouts were set for each NEO relative to base salary. The

EOCPS minimum payout hurdle was met if 80% of the pre-established target operating income goal was met, and payment for such minimum performance was equal to 50% of the NEO’s award payout target.

The CLDC established the 2019 quarterly and annual threshold, target and maximum operating profit goals,

all of which are tied to the 2019 budget, as follows (actual results against goals also shown):

Regarding these goals, threshold operating profit represented 80% of the target operating profit for the quarter or full year, while maximum qualified operating profit represented 140% of the target operating profit for the quarter or 113.34% of the target operating profit for the full year. The goal levels were established on a subjective basis by the CLDC 

based on its judgment and evaluation of the seasonality of the Company’s business. The program was changed in 2019 to reflect a more market approach of paying awards not under a “pool” concept, but for percentage achievement against quarterly and annual performance goals that were pre-established by the CLDC based on its subjective judgment.

Threshold payout levels represented 50% of the target payout levels, and maximum payout levels represented 200% of the target payout levels. Further, payout levels were allocated across the performance periods, based on the seasonality of our planned profits, as follows: 8.5% for first quarter; 15.5% for second quarter; 15.0% for third quarter; 11.0% for fourth quarter; and 50% for the full year.

Based on actual achievement of qualified operating profit during each quarter and for the full year 2019, the NEOs earned 57.9% payout of full year 2019 target amounts which represents 83.2% performance achievement during the full year 2019.

Our NEOs’ long-term compensation is entirely equity-based. We grant equity awards to our NEOs pursuant to the Company’s current equity incentive plan, the amended and restated 2011 Incentive Plan (the “2011 Incentive Plan”).

Our NEOs’ 2019 awards of restricted stock units were made in the following two forms:

RSUs accounted for 20% of the 2019 target equity awards of our NEOs while PSUs accounted for the remaining 80%. In terms of target equity award values: Ms. Colonias’ target award value increased by $570,000 from $1,530,000 in 2018 to $2,100,000 in 2019; Mr. Magstadt’s target award value was unchanged from its 2018 level of $550,000; Mr. Dankel’s and Mr. Arevalo’s target award values each increased by $30,000 from $425,000 in 2018 to $455,000 in 2019; and Mr. Swartzendruber’s target award value increased by $40,000 from $175,000 in 2018 to $215,000 in 2019. The motivation for the year-over-year changes in target award values was the CLDC’s subjective evaluation of peer market data as provided by Mercer.

Our NEOs’ 2019 RSU Awards. In 2019, the CLDC granted each of our NEOs RSUs as indicated below:

See “Accelerated Vesting and Payout” and “Potential Payments on Termination or Change in Control” below for a discussion of potential early vesting of such RSU awards.

Our NEOs’ 2019 PSU Awards. The CLDC set the performance goals for our NEOs’ 2019 PSU awards in early 2019, with 50% of the goals based on the Company’s revenue growth (the “Revenue Growth Goals”) and the remaining 50% based on ROIC (the “ROIC Goals”). Our NEOs’ 2019 PSUs are measured against such goals for a three-year cliff-vesting performance period starting on January 1, 2019, and ending on December 31, 2021. The number of PSU shares that would vest in favor of a NEO under his or her 2019 PSU awards is between 0% and 200% of his or her target award opportunity, depending on the extent to which the performance goals will have been achieved at the end of 2021. The number of the target shares of our common stock and the maximum amount of shares of common stock that could potentially vest under the 2019 PSU awards granted to each of our NEOs is as follows:

measurement period. See “Outstanding Equity Awards at 2019 Fiscal Year End” for the threshold, target and maximum metric levels associated with this award. Actual performance results for the 2017-2019 performance period were 9.7% compounded annual revenue growth (earning approximately 97% of the target PSUs for this metric) and 13.3% average ROIC (earning 120% of the target PSUs for this metric), resulting in a total payout of approximately 108.5% for the 2017 PSU awards to the participating NEOs.

Payouts for the 2017 PSU awards for the participating NEOs was as follows:

Under the 2011 Incentive Plan, the vesting of restricted stock units may accelerate in two situations. First, when an employee ceases employment with us upon his or her retirement (depending on whether the employee meets certain age and service tenure conditions), death or disability, all of the employee’s unvested restricted stock units vest. Second, all outstanding restricted stock units held by an employee vest on a change in control that involves a substantial change in his or her terms of employment or involuntary termination. In addition, the CLDC may cause awards granted pursuant to the 2011 Incentive Plan, including awards to our NEOs, to vest earlier in certain other situations, at its discretion.

Our NEOs have entered into grant agreements with the Company with respect to their 2019 PSU and RSU awards, which agreements provide for early vesting in case of death or disability. The 2019 grant agreements also provide that, for the PSU or RSU awards to vest ahead of schedule, a recipient may retire at age 55 after having worked at the Company or its subsidiaries for 15 years (but for each year that the recipient delays his or her retirement after reaching age 55, he or she may work one year less and still retire). In addition, to increase the compatibility of the awards with the Internal Revenue Code Section 409A and avoid potential negative tax implications for the recipient and the Company, the grant agreements for 2019 RSU awards provide that, in case the awards vest ahead of

schedule and are determined by the CLDC to be subject to Section 409A, they may only be paid out in the enumerated situations as allowed under Section 409A. In particular, in case a recipient is a specified employee under Section 409A, the awards cannot be paid out until the date that is six months after the employee’s separation of service, which generally is when the employee completely stops working for the Company and its subsidiaries. Similarly, the 2019 grant agreements for PSU awards provide that, irrespective of when the PSU awards vest, they may only be paid out following the last day of the applicable vesting period after the performance period has concluded and subject to achievement of the applicable performance goals. Further, the 2019 grant agreements for PSU awards require the PSU shares that could eventually become payable in favor of the recipient following the last day of the applicable vesting period after the performance period to be prorated based on the early-vesting date and the date when the applicable vesting period is scheduled to expire.

The 2011 Incentive Plan provides that, on a change in control of the Company, if the surviving or resulting entity refuses to continue the PSU or RSU awards and does not substitute similar awards, and if the nature and terms of employment or engagement, including compensation and benefits, of a recipient will change significantly as a result of the change in control, then the awards will vest ahead of schedule. Individual grant agreements may alter this default arrangement.

Our NEOs’ 2019 grant agreements do not change the default rule under the 2011 Incentive Plan, but

additionally provide that, in the case of an asset sale, the PSU or RSU awards will vest ahead of schedule in certain situations, including where a recipient is not subsequently employed or engaged by the surviving or resulting entity or the successor to the sold business or there is a significant change in the nature and terms of the subsequent employment or engagement of the recipient. For ease of administration, our NEOs’ 2019 grant agreements also use a broader definition, “sale event,” to encompass both change-in-control and asset-sale situations, and therefore override the 2011 Incentive Plan with respect to any change in control of the Company affecting the awards thereunder.

In addition, in order to provide a “double-trigger” accelerated vesting mechanism, our NEOs’ 2019 grant agreements for PSU and RSU awards require that for the PSU or RSU awards to vest ahead of schedule on a sale event, a NEO’s employment with the Company and its subsidiaries (or the acquiring, surviving or resulting entity) will first need to be terminated, either by the officer for good reason or by his or her employer without cause within two years from the sale event. In case of early vesting of the PSU awards because of a sale event, the PSU shares thereunder will be subject to the proration described in the “Potential Accelerated Vesting and Payout” section above.

See “Potential Payments on Termination or Change in Control” below for a more detailed discussion on early vesting of our NEOs’ PSU and RSU awards.

The Company and its U.S. subsidiaries maintain a defined contribution profit sharing trust plan for U.S.-based non-union employees, including our NEOs, while some of our non-U.S. subsidiaries maintain similar plans for their employees. An employee is eligible for participation in a given calendar year if he or she is an employee on the first and last days of that year and completes the minimum service requirement during that year. As of December 31, 2019, the minimum service requirement was at least 1,000 hours of service. We currently make contributions to employees’ profit sharing trust accounts in amounts equal to 7% of the employees’ qualifying salaries or wages (regular plus overtime pay), which amounts are subject to a 6-year vesting period. We contribute an additional 3% of their qualifying salaries or wages to their profit sharing trust accounts each quarter to comply with the safe-harbor rules that govern the plan.

The safe-harbor contribution is not forfeitable and fully vests when the contribution is made. The plan limits trust contributions to amounts deductible for federal income tax purposes under Section 404(a) of Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Under the plan, other than the 3% safe-harbor contribution, the Board has exclusive discretion to authorize the trust contributions and change them at any time. Subject to such discretion, we expect the current profit-sharing-trust contribution rate to continue.

Our CEO, CFO and Vice President of Human Resources are currently trustees of the profit sharing trust plan. All our participating employees under the plan, including our NEOs, are entitled to proportionate shares of forfeited contributions from employees who terminate their employment with us before such contributions fully vest. The plan also includes a 401(k)

feature that allows our employees, including our NEOs, to contribute their pre-tax and/or Roth IRA earnings in addition to the amounts that we contribute to their accounts. We generally view our contributions to employees’ profit sharing trust accounts as serving

a similar objective as salaries. The table below sets forth, for each of our NEOs, the contribution that was made to his or her respective profit sharing trust account for 2019, as compared to his or her 2018 profit sharing trust contribution:

Contributions made to each of our NEOs’ profit sharing trust accounts with respect to each of the three years ended December 31, 2019, 2018 and

2017, respectively, if applicable, are set forth in the “2019 Summary Compensation Table” below as part of the “All Other Compensation.”

The Company maintains a benchmarking peer group that includes certain companies in the building products or construction material industries that we consider our peer companies for setting compensation for NEOs. The peer group is evaluated on an annual basis to assess its continued appropriateness based on a number of factors including: industry, revenues, and shareholder feedback. These companies designated as peers individually had revenues between $0.4 million and

$2.1 billion in 2018, which values are approximately 0.4 to 2.1 times the Company’s 2018 revenue.

The following 16 companies in the building products or construction material industries were considered our peer companies in the process of setting compensation for our NEOs for 2019. These 16 companies and the Company, ranked based on their 2018 revenues, are set forth below: