ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
* |
* | |||
* |
* |
* | See Explanatory Note |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Auditor Name: |
Auditor Location: |
PCAOB ID Number: |
Item 10. |
Directors, Executive Officers and Corporate Governance |
|
Lydia I. Beebe Principal, LIBB Advisors, LLC Age Director Since Committees Experience Qualifications co-chair of the Stanford Institutional Investors Forum at Stanford Law School. She was the Chief Governance Officer for Chevron Corp. from 1995 to 2015 and served in various other legal roles since 1977. During this time, she gained valuable skills relating to executive leadership at a large publicly-traded company, including corporate governance matters that are important to our stockholders. She has extensive experience in a wide array of legal challenges that face a public company and its board of directors. Ms. Beebe also has expertise with boardroom issues as a director of other public companies. Through LIBB Advisors, she also routinely advises companies on corporate strategy and working with all stakeholders. In addition, she serves as an advisory board member of the Rock Center for Corporate Governance at Stanford University. Ms. Beebe also served as chairman of the board of the Northern California Chapter of the National Association of Corporate Directors.Other Current Public Directorships Past Directorships |
Lu M. Córdova Strategic Planning Projects, Governor’s Office, State of Colorado Age Director Since Committees Experience non-profit organization, from June 2018 to present; President of Techstars Foundation, an American seed accelerator, from December 2017 to June 2018; Chief Executive Officer then Chair of Corlund Industries, L.L.C., an investment holding company, since 2005; General Manager of Almacen Storage-US, LLC, a Mexican REIT, from 2007 to 2019Qualifications start-up phase through high growth into the public market. Her former international executive roles with Techstars, McGraw-Hill Standard & Poor’s, a financial services company, and Excite@Home, a provider of broadband internet access, along with Chief Executive roles in private corporations, have given her extensive expertise in corporate finance and strategic planning. In addition, Ms. Córdova is a citizen of both the United States and Mexico and has significant cross-border operations experience. Ms. Córdova also has experience in the development of government financial and economic policies from her formal economics education, from ten years with the 10th District Federal Reserve Bank, ultimately as Chairman, from her public service with the state of Colorado, and from serving on compensation and audit committees.Past Directorships | ||
Robert J. Druten (Chairman of the Board) Retired Executive Vice President and Chief Financial Officer of Hallmark Cards, Inc. Age Director Since Committees Experience Qualifications Other Current Public Directorships Past Directorships |
Antonio O. Garza, Jr. Counsel, White & Case, LLP Age Director Since Committees Experience Qualifications Other Current Public Directorships Past Directorships | ||
David Garza-Santos Chairman and Chief Executive Officer of Maquinaria Diesel SA de CV (“MADISA”) Age Director Since Committees Experience Qualifications Mr. Garza-Santos is a business and community leader in Monterrey, N.L. Mexico. As Chairman and Chief Executive Officer of MADISA, Mr. Garza-Santos has experience in all phases of leading a company. Mr. Garza-Santos also sits on the board of directors of Promotora Ambiental, S.A.B. de C.V., a publicly-traded waste management services company based out of Monterrey, Mexico. Mr. Garza-Santos is a recognized leader in Monterrey, which provides the Company with additional insight and leadership on the business and political environment both regionally in Monterrey as well as nationally across Mexico.Other Current Public Directorships |
Janet H. Kennedy Vice President, North America Regions, Google Cloud at Google Age Director Since Committees Experience Qualifications |
Mitchell J. Krebs President and Chief Executive Officer of Coeur Mining, Inc. Age Director Since Committees: Audit; Finance & Strategic Investment Experience Qualifications Other Current Public Directorships | ||
Henry J. Maier Retired President and Chief Executive Officer, FedEx Ground, a package shipping company, which is a subsidiary of FedEx Corp. Age Director Since Committees Experience Qualifications Other Current Public Directorships |
Thomas A. McDonnell Retired President and Chief Executive Officer of the Ewing Marion Kauffman Foundation, a non-profit foundationAge Director Since Committees Experience Qualifications Other Current Public Directorships Past Directorships | ||
Patrick J. Ottensmeyer President and Chief Executive Officer, Kansas City Southern Age Director Since Committees: Executive Experience Qualifications |
• | Monitors the quality and integrity of the Company’s financial reporting process, financial statements, and systems of internal accounting controls. In fulfilling this responsibility, the Audit Committee regularly meets with management and with the Company’s independent registered public accounting firm to review the Company’s annual audited financial statements, quarterly financial statements, reports on the effectiveness of internal control over financial reporting, and other information included in SEC filings. The Audit Committee, or the Chair of the Audit Committee as authorized in the Audit Committee charter, also meets with management to review and discuss quarterly earnings press releases and other financial information provided to investors and analysts. |
• | Appoints, compensates, retains, and oversees the independent registered public accounting firm selected to audit our consolidated financial statements. In fulfilling this responsibility, at least annually, the Audit Committee evaluates the independence, professional qualifications, and performance of the Company’s independent registered public accounting firm and that of the lead engagement partner. |
• | Reviews areas of potential significant financial risk to the Company and oversees the Company’s enterprise risk management program. In fulfilling these responsibilities, the Audit Committee meets with management to review and discuss risk assessment and risk management policies, including the Company’s significant risk exposures and steps taken by management to monitor and mitigate such exposures. |
• | Consists of three Directors elected by the Board, taking into consideration the recommendations of the Nominating Committee, to serve one-year terms. |
• | All members of the Audit Committee are independent (as defined in the NYSE’s listing standards) and meet the additional independence standards in Rule 10A-3 under the Exchange Act. |
• | The Company does not limit the number of public company audit committees on which the members of our Audit Committee may serve. However, for any director to simultaneously serve on our Audit Committee and the audit committees of more than two other public companies, the Board must affirmatively determine that such simultaneous service will not impair the director’s ability to effectively serve on our Audit Committee. |
• | The Board has determined that two of the Audit Committee members, Mr. McDonnell and Mr. Krebs, are “audit committee financial experts” as that term is defined in applicable securities regulations. The Board made this determination for Mr. McDonnell based upon his prior experience as the Chief Executive Officer of DST Systems, Inc., his accounting and financial education, his experience actively supervising others performing accounting or auditing functions, and his past and current memberships on audit committees of other public companies. The Board made this determination for Mr. Krebs based on his current position as President and Chief Executive Officer of Coeur Mining, Inc., his previous position as Chief Financial Officer of Coeur Mining, Inc., his accounting and financial education, and his experience in the corporate finance and asset management areas. |
• | Establishes, communicates to management and the Board and periodically updating the Company’s compensation philosophy, objectives, policies, strategies and programs, with the objective of ensuring they provide appropriate motivation for corporate performance and increased stockholder value. |
• | Reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer (“CEO”), evaluating and reviewing with our CEO his performance in light of those goals and objectives and setting our CEO’s compensation level based on that evaluation. |
• | Reviews and approves the compensation of other members of senior management of KCS based on recommendations from the CEO and an independent compensation consultant. |
• | Retains and reviews independence of an independent compensation consultant to provide advice on executive and director compensation programs, market pay analyses, peer groups and review of the Compensation Discussion and Analysis. In 2021, the Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian” or the “Compensation Consultant”) as its independent compensation consultant. The Compensation Committee reviewed the nature of its relationship with Meridian and determined there were no conflicts of interest with respect to its independence. See “Compensation Discussion and Analysis” for additional information on Meridian. |
• | Annually reviews and assesses the risks associated with the Company’s compensation practices, policies and programs applicable to employees to determine whether the risks arising from such practices, policies and programs are appropriate or reasonably likely to have a material adverse effect on the Company. |
• | The Compensation Committee consists of three Directors elected by the Board, taking into consideration the recommendations of the Nominating Committee, to serve one-year terms. |
• | Each member of the Compensation Committee is independent (as defined in the NYSE’s listing standards) and is considered a non-employee director for purposes of Rule 16b-3 under the Exchange Act. |
• | Recommends to the Board of Directors suitable nominees for election to the Board or to fill newly created directorships or vacancies on the Board. |
• | Reviews Company governance policies and procedures and develops and recommends to the Board changes and additions to such governance policies and procedures |
• | Establishes and maintains procedures for evaluation of Board and management performance; |
• | Periodically evaluates the performance of the Board and its committees |
• | Reviews stockholder proposals and recommends to the Board responses to such proposals |
• | Oversees the Company’s commitment to environmental, social and related governance (“ESG”) matters that are significant to the Company. |
• | The Nominating Committee consists of four Directors elected by the Board, taking into consideration the recommendations of the Nominating Committee, to serve one-year terms. |
• | Each member of the Nominating Committee is independent (as defined in the NYSE’s listing standards). |
• | Reviews and approves financing transactions exceeding $50 million, but not exceeding $500 million. |
• | Reviews management’s financing plans and reports |
• | Make recommendations to the Board with respect to matters affecting our financing plan and capital structure |
• | Monitors the Company’s risk management practices relating to foreign exchange and interest rates. |
• | The Finance Committee consists of four Directors elected by the Board, taking into consideration the recommendations of the Nominating Committee, to serve one-year terms. |
• | When the Board is not in session, the Executive Committee has all the powers of the Board in all cases in which specific directions have not been given by the Board. |
• | The Executive Committee consists of the Company’s Chief Executive Officer, the Chair of the Board, and one other Director elected by the Board, taking into consideration the recommendations of the Nominating Committee, to serve a one-year term. |
Environmental • Rail transportation is the most energy efficient way to move freight over land. In 2021, KCS moved each ton of freight approximately 419 miles on average on only one gallon of fuel. • KCS provides a carbon calculator to its customers on its website to estimate the greenhouse gas emission savings potential associated with shipping by rail vs. truck. • In 2021, KCS committed to a science-based carbon emissions reduction target approved by the Science Based Targets Initiative. KCS will reduce Scope 1 and 2 carbon emissions by at least 42% per million gross ton-miles by 2034, compared to 2019, the base year.• To optimize our fuel efficiency, KCS’s fuel conservation team drives fuel conservation and efficiency initiatives by: • Implementing strategies to improve fuel efficiency, including multiple fuel saving technologies in our locomotives • Managing horsepower-per-ton • Forecasting fuel consumption and providing monthly goals and reports with recommendations • Analyzing fuel burn and efficiency data to identify opportunities and trends • Managing vendor and program compliance • In 2021, KCS avoided the use of 25.7M gallons of diesel fuel which would be 17.0% of our annual fuel consumption if these fuel conservation and efficiency initiatives were not implemented. • KCS is committed to reducing plastic waste in the environment and continues to uphold its pledge to Operation Clean Sweep a campaign by the Plastic Industry Association and American Chemistry Council’s Plastics Division by stewarding its best management practices within our organization and with our partners. |
Safety • The consolidated 2021 rate of reportable workplace injuries and illnesses decreased by 6% from 2020. • The KCS Health, Safety, Security & Environmental Management System covers 100% of operations. • KCS has been a Responsible Care Partner since 1999. • KCS had the best-in-class • The consolidated 2021 rate of reportable train accidents decreased by 13% from 2020; total train accidents decreased by 22% |
Item 11. |
Executive Compensation |
• | Capitalize on the strategic location of the KCS cross-border rail network and the diverse and growing North American markets, while maintaining a commitment to operational excellence. |
• | Embrace new and emerging technologies while maintaining a strong cost discipline within a safe and reliable environment. |
• | Provide service that consistently exceeds our customers’ expectations. |
• | Offer challenging careers to our employees. |
• | Produce industry-leading stockholder returns. |
Current NEOs | ||
Patrick J. Ottensmeyer | President and Chief Executive Officer | |
Michael W. Upchurch | Executive Vice President and Chief Financial Officer | |
Jeffrey M. Songer | Executive Vice President and Chief Operating Officer |
Michael J. Naatz | Executive Vice President and Chief Marketing Officer | |
Adam J. Godderz | Senior Vice President - Chief Legal Officer and Corporate Secretary | |
Brian D. Hancock | Former Executive Vice President and Chief Innovation Officer* |
* | Mr. Hancock retired from the Company on July 2, 2021. |
Compensation Element |
Purpose |
Characteristic | ||
Base Salary |
To provide a fixed element of pay for an individual’s primary duties and responsibilities. | Base salaries are reviewed annually and are set based on performance, experience, competitiveness versus market and internal equity considerations. | ||
Annual Incentive |
To encourage and reward the achievement of specified financial and operational goals on an annual basis. | Performance-based cash award opportunity; amount earned is based on actual results relative to pre-determined goals. | ||
Long-Term Incentives |
||||
Performance Share Awards |
To motivate management for long-term financial success and value creation for stockholders. | Three-year performance-based share awards with pre-determined financial goals. | ||
Restricted Share Awards |
To align the executives’ interests with those of investors (via creation of stockholder value), to encourage stock ownership and to provide an incentive for retention. | Service-based long-term incentive opportunity; ultimate award value depends on share price. |
Compensation Element |
Purpose |
Characteristic | ||
Non-Qualified Stock Options |
To incentivize and reward the creation of long-term stockholder value. | Service-based long-term incentive opportunity; amounts realized are dependent upon share price appreciation. |
• | 0% for less than two years of service; |
• | 20% upon two years of service; |
• | 40% upon three years of service; |
• | 60% upon four years of service; and |
• | 100% upon five years of service. |
• | preserve our ability to compete for executive talent; |
• | provide stability during a change in control by encouraging executives to cooperate with and achieve a change in control approved by the Board, without being distracted by the possibility of termination of employment or demotion after the change in control; and |
• | provide an economic incentive to encourage an acquirer to evaluate whether to retain our executives in addition to its own. |
Pay Mix |
||||||||
CEO | Other NEOs | |||||||
Base Salary |
15 | % | 28 | % | ||||
Short - Term Incentive |
17 | % | 21 | % | ||||
Stock Options |
17 | % | 13 | % | ||||
Performance Shares |
34 | % | 25 | % | ||||
Restricted Stock |
17 | % | 13 | % | ||||
|
|
|
|
|||||
Total |
100 | % | 100 | % | ||||
|
|
|
|
Multiple of Base Salary | ||
Chief Executive Officer |
5X | |
Other NEOs |
3X |
• | base salary; |
• | target AIP opportunity; |
• | target total cash compensation (base salary plus target AIP opportunity); |
• | grant date fair value of long-term incentive grants/awards; and |
• | target total direct compensation (target total cash compensation plus the grant date fair value of long-term incentive awards). |
A. O. Smith Corporation | ITT Inc. | |
Alliant Energy Corporation | Kennametal Inc. | |
Atmos Energy Corporation | Marathon Oil Company | |
Canadian Pacific Railway | Martin Marietta Materials, Inc. | |
CF Industries Holdings, Inc. | OGE Energy Corp. | |
Curtiss-Wright Corporation | Pinnacle West Capital Corporation | |
EQT Corporation | Snap-on Incorporated | |
Evergy, Inc. | Southwest Gas Holdings, Inc. | |
Flowserve Corporation | The Timken Company | |
GATX Corporation | Trinity Industries, Inc. | |
Hexcel Corporation | Vulcan Materials Company | |
IDEX Corporation |
Percentage of Base Salary |
||||||||||||
Current Officers |
Threshold Performance Level |
Target Performance Level |
Maximum Performance Level |
|||||||||
Mr. Ottensmeyer |
0 | % | 115 | % | 230 | % | ||||||
Mr. Upchurch |
0 | % | 75 | % | 150 | % | ||||||
Mr. Songer |
0 | % | 80 | % | 160 | % | ||||||
Mr. Naatz |
0 | % | 70 | % | 140 | % |
Percentage of Base Salary |
||||||||||||
Current Officers |
Threshold Performance Level |
Target Performance Level |
Maximum Performance Level |
|||||||||
Mr. Godderz |
0 | % | 65 | % | 130 | % | ||||||
Mr. Hancock |
0 | % | 70 | % | 140 | % |
OR |
OCF |
Operational Objectives |
||||||||||||||||||
TPC |
Safety |
|||||||||||||||||||
IFR |
AFR |
|||||||||||||||||||
Ottensmeyer |
40 | % | 40 | % | 10 | % | 5 | % | 5 | % | ||||||||||
Upchurch |
45 | % | 45 | % | 5 | % | 2.5 | % | 2.5 | % | ||||||||||
Songer |
40 | % | 40 | % | 10 | % | 5 | % | 5 | % | ||||||||||
Naatz |
45 | % | 45 | % | 5 | % | 2.5 | % | 2.5 | % | ||||||||||
Godderz |
45 | % | 45 | % | 5 | % | 2.5 | % | 2.5 | % | ||||||||||
Hancock |
45 | % | 45 | % | 5 | % | 2.5 | % | 2.5 | % |
Threshold (0% Payout) |
Target (100% Payout) |
Maximum (200% Payout) |
||||||||||
OR |
62.15 | % | 59.15% - 59.65 |
% | 56.90 | % | ||||||
OCF (in millions) |
$ | 854 | $ | 1,024 - $1,057 | $ | 1,187 | ||||||
TPC |
<60.26 | % | 60.26% - 63.13 |
% | >63.13 | % | ||||||
IFR |
>1.62 | 1.62 | 1.44 | |||||||||
AFR |
>3.35 | 3.35 | 2.97 |
Rank |
Adjustment to Payout Percentage |
|||
1 st |
120 | % | ||
2 nd |
110 | % | ||
2 nd to last place (6th ) |
90 | % | ||
Last place (7 th ) |
80 | % | ||
Any other ranking (3 rd , 4th , or 5th ) |
No adjustment |
• | 2021 AIP - based on the Company’s annual revenue growth during the 12-month performance period relative to the annual revenue growth of all other Class 1 railroads over the same time frame. Each Class 1 railroad is then ranked in order of the highest to lowest annual revenue growth rate for the 12-month performance period. |
• | 2021 LTI Program - based on the average of the Company’s annual revenue growth during the 3-year performance period relative to the average of the annual revenue growth of all other Class 1 railroads over the same time frame. The average of the annual revenue growth for each Class 1 railroad is determined by first calculating the change in revenue for each applicable year and then computing the 3-year average. Each Class 1 railroad is then ranked in order of the highest to lowest average annual revenue growth rate for the 3-year performance period. |
2021 Results |
||||
OR |
60.28 | % | ||
OCF (in millions) |
$ | 1,032 | ||
TPC |
63.12 | % | ||
IFR |
1.71 | |||
AFR |
3.24 |
• | Drive sustained improvement in our operating performance; |
• | Communicate strong performance focus to the external market and earn returns well above our cost of capital; |
• | Support execution of our long-term business strategy; |
• | Create long-term stockholder value; |
• | Provide a balanced program based on performance, share price leverage and employee retention; |
• | Maintain flexibility to dovetail with our other talent management tools; |
• | Maintain our external competitiveness; and |
• | Be simple and transparent. |
Performance Shares |
50 | % | ||
Stock Options |
25 | % | ||
Restricted Stock |
25 | % |
Current Officers |
Number of Target Performance Shares Granted Under the 2021 LTI Program |
Number of Non-Incentive Stock Options Granted Under the 2021 LTI Program |
Number of Shares of Restricted Stock Granted Under the 2021 LTI Program |
|||||||||
Mr. Ottensmeyer |
11,369 | 20,429 | 5,685 | |||||||||
Mr. Upchurch |
2,821 | 5,069 | 1,410 | |||||||||
Mr. Songer* |
2,399 | 4,311 | 3,568 | |||||||||
Mr. Naatz |
2,271 | 4,082 | 1,136 | |||||||||
Mr. Godderz |
1,516 | 2,724 | 758 | |||||||||
Mr. Hancock |
2,271 | 4,082 | 1,136 |
* | Mr. Songer received a one-time $500,000 increase in his restricted stock award value in recognition of his continuing role in leading the Company’s ongoing Precision Scheduled Railroading strategy and to ensure his retention during the negotiations and potential acquisition of the Company. |
Rank |
Adjustment to Payout Percentage |
|||
1 st |
120 | % | ||
2 nd |
110 | % | ||
2 nd to last place (6th ) |
90 | % | ||
Last place (7 th ) |
80 | % | ||
Any other ranking (3 rd , 4th , or 5th ) |
No adjustment |
Performance Level |
Return on Invested Capital (75% weight) |
Consolidated Operating Ratio (25% weight) |
Percentage Payout of Total Incentive Target |
|||||||||
2021 |
||||||||||||
Threshold |
8.19% | 62.15% | 0% | |||||||||
Target |
9.77% - 10.09% |
59.15% - 59.65% |
100% | |||||||||
Maximum |
12.150% | 56.90% | 200% | |||||||||
2022 |
||||||||||||
Threshold |
-120 bp change (1) | +200 bp change (1) | 0% | |||||||||
Target |
+10 bp to +20 bp change (1) | -20 bp to -50 bp change (1) |
100% | |||||||||
Maximum |
+50 bp change (1) | -100 bp change (1) | 200% | |||||||||
2023 |
||||||||||||
Threshold |
-120 bp change (1) | +200 bp change (1) | 0% | |||||||||
Target |
+10 bp to +20 bp change (1) | -20 bp to -50 bp change (1) |
100% | |||||||||
Maximum |
+50 bp change (1) | -100 bp change (1) | 200% |
(1) | Based on the immediately preceding year’s actual results. |
* | These performance levels should not be viewed as predictions or estimates of future performance and the actual achievement of these levels is subject to numerous known and unknown risks and uncertainties including, without limitation, those described under “forward looking statements”, “risk factors” or similar headings in our quarterly and annual reports filed with the SEC. The Compensation Committee establishes these levels solely to help it align pay with performance. The levels are not intended to provide investors or any other party with guidance about our future financial performance or operating results. |
2019 LTI Program (Vest Date – 02/25/2022) |
2020 LTI Program (Vest Date – 02/24/2023) |
2021 LTI Program (Vest Date – 02/23/2024) |
||||||||||
Ottensmeyer |
$ | 9,304,068.00 | $ | 7,619,155.20 | $ | 6,848,685.60 | ||||||
Upchurch |
$ | 2,078,280.00 | $ | 1,775,272.80 | $ | 1,699,370.40 | ||||||
Songer |
$ | 2,051,172.00 | $ | 1,775,272.80 | $ | 1,445,157.60 | ||||||
Naatz |
$ | 1,983,100.80 | $ | 1,680,696.00 | $ | 1,368,050.40 | ||||||
Godderz |
$ | 1,017,453.60 | $ | 942,756.00 | $ | 913,238.40 | ||||||
Hancock (1) |
N/A | N/A | N/A |
(1) | Mr. Hancock’s awards were forfeited upon his retirement from the Company on July 2, 2021. |
• | no member of the Compensation Committee was an officer or employee of KCS or was formerly an officer of KCS; |
• | no member of the Compensation Committee had any material relationship with KCS other than service on the Board and Board committees and the receipt of compensation for that service; |
• | no executive officer of KCS served as a director or as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Compensation Committee; and |
• | no executive officer of KCS served as a member of the compensation committee (or other board committee performing equivalent functions or, if the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of KCS. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Option Awards ($)(2) |
Non-Equity Incentive Plan Compensation ($) |
All Other Compensation ($)(3) |
Total ($) |
||||||||||||||||||||||||
Patrick J. Ottensmeyer President and Chief Executive Officer |
|
2021 2020 2019 |
|
$ $ $ |
1,051,250 983,333 971,691 |
|
$ $ $ |
530,000 0 0 |
|
$ $ $ |
3,859,541 3,566,267 2,733,648 |
|
$ $ $ |
1,199,999 1,086,895 850,501 |
|
$ $ $ |
1,324,628 1,376,677 1,752,931 |
|
$ $ $ |
202,765 122,740 71,641 |
|
$ $ $ |
8,168,183 7,135,912 6,380,412 |
| ||||||||
Michael W. Upchurch Executive Vice President and Chief Financial Officer |
|
2021 2020 2019 |
|
$ $ $ |
536,250 509,428 501,641 |
|
$ $ $ |
420,500 0 0 |
|
$ $ $ |
977,182 859,644 631,971 |
|
$ $ $ |
297,753 253,253 190,014 |
|
$ $ $ |
447,747 446,108 575,884 |
|
$ $ $ |
61,300 62,492 61,602 |
|
$ $ $ |
2,740,732 2,130,925 1,961,112 |
| ||||||||
Jeffrey M. Songer Executive Vice President and Chief Operating Officer |
|
2021 2020 2019 |
|
$ $ $ |
534,000 510,076 505,159 |
|
$ $ $ |
269,000 0 0 |
|
$ $ $ |
1,343,652 860,503 625,818 |
|
$ $ $ |
253,228 253,253 187,494 |
|
$ $ $ |
464,633 446,666 579,922 |
|
$ $ $ |
54,817 62,197 63,791 |
|
$ $ $ |
2,919,330 2,132,695 1,962,184 |
| ||||||||
Michael J. Naatz Executive Vice President and Chief Marketing Officer |
|
2021 2020 2019 |
|
$ $ $ |
505,250 469,337 424,960 |
|
$ $ $ |
254,500 0 0 |
|
$ $ $ |
793,736 798,462 577,044 |
|
$ $ $ |
239,777 239,732 181,236 |
|
$ $ $ |
396,116 411,188 487,854 |
|
$ $ $ |
50,854 48,165 54,216 |
|
$ $ $ |
2,240,233 1,966,884 1,725,310 |
| ||||||||
Adam J. Godderz Senior Vice President Chief Legal Officer and Corporate Secretary (4) |
2021 | $ | 482,500 | $ | 375,000 | $ | 537,038 | $ | 160,008 | $ | 346,396 | $ | 204,870 | $ | 2,105,812 | |||||||||||||||||
Brian D. Hancock Executive Vice President and Chief Innovation Officer (5) |
|
2021 2020 2019 |
|
$ $ $ |
254,606 478,367 460,800 |
|
$ $ $ |
0 0 0 |
|
$ $ $ |
795,847 808,086 597,590 |
|
$ $ $ |
239,776 239,732 181,236 |
|
$ $ $ |
0 418,963 528,998 |
|
$ $ $ |
2,077,549 60,277 66,380 |
|
$ $ $ |
3,367,778 2,005,425 1,835,004 |
|
(1) | This column presents the aggregate grant date fair value of stock awards made in 2021, 2020 or 2019, as applicable, computed in accordance with FASB ASC Topic 718. For additional information, refer to Note 15 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC. The amount for 2021 reflects (a) the grant date fair value for time vested stock awards under our Executive Plan and the 2021 LTI Program, and (b) the probable outcome at grant date for the performance share grant made pursuant to the 2021 LTI Program. See “Compensation Discussion and Analysis” above for more detail on these awards, the Executive Plan, the 2021 LTI Program, and the Grants of Plan-Based Awards table for the value of each grant. The value of the 2021 performance shares awards, assuming the highest level of performance achieved, would be, respectively, as follows: Mr. Ottensmeyer — $4,799,992; Mr. Upchurch — $1,191,026; Mr. Songer — $1,012,858; Mr. Naatz — $958,816; Mr. Godderz – $640,055 and Mr. Hancock — $958,816. |
(2) | This column presents the aggregate grant date fair value of option awards made in 2021, 2020 or 2019, as applicable, computed in accordance with FASB ASC topic 718. For additional information, refer to Note 15 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC. |
(3) | “All Other Compensation” for the NEOs consists of: |
Name |
Year |
KCS 401(K) Plan Matching Contributions ($)(a) |
Group Term Life Insurance Premiums ($) |
AD&D Premiums ($) |
LTD Premiums ($) |
Matching Charitable Gifts ($)(b) |
Financial Planning Reimbursement ($) |
Other ($)(c) |
Total ($) |
|||||||||||||||||||||||||||
Ottensmeyer |
2021 | $ | 14,500 | $ | 600 | $ | 150 | $ | 1,050 | $ | 30,000 | $ | 15,000 | $ | 141,465 | $ | 202,765 | |||||||||||||||||||
2020 | $ | 14,250 | $ | 600 | $ | 150 | $ | 1,050 | $ | 25,000 | $ | 15,945 | $ | 65,745 | $ | 122,740 | ||||||||||||||||||||
2019 | $ | 14,000 | $ | 600 | $ | 150 | $ | 1,050 | $ | 30,000 | $ | 12,071 | $ | 13,770 | $ | 71,641 | ||||||||||||||||||||
Upchurch |
2021 | $ | 14,500 | $ | 600 | $ | 150 | $ | 1,050 | $ | 30,000 | $ | 15,000 | $ | 0 | $ | 61,300 | |||||||||||||||||||
2020 | $ | 14,250 | $ | 600 | $ | 150 | $ | 1,050 | $ | 30,000 | $ | 16,442 | $ | 0 | $ | 62,492 | ||||||||||||||||||||
2019 | $ | 14,000 | $ | 600 | $ | 150 | $ | 1,050 | $ | 30,000 | $ | 15,802 | $ | 0 | $ | 61,602 | ||||||||||||||||||||
Songer |
2021 | $ | 14,500 | $ | 600 | $ | 150 | $ | 1,050 | $ | 20,000 | $ | 15,000 | $ | 3,517 | $ | 54,817 | |||||||||||||||||||
2020 | $ | 14,250 | $ | 600 | $ | 150 | $ | 1,050 | $ | 25,000 | $ | 15,183 | $ | 5,964 | $ | 62,197 | ||||||||||||||||||||
2019 | $ | 14,000 | $ | 600 | $ | 150 | $ | 1,050 | $ | 27,668 | $ | 15,288 | $ | 5,035 | $ | 63,791 | ||||||||||||||||||||
Naatz |
2021 | $ | 14,500 | $ | 600 | $ | 150 | $ | 1,050 | $ | 15,000 | $ | 15,000 | $ | 4,554 | $ | 50,854 | |||||||||||||||||||
2020 | $ | 14,250 | $ | 600 | $ | 150 | $ | 1,050 | $ | 15,000 | $ | 15,435 | $ | 1,680 | $ | 48,165 | ||||||||||||||||||||
2019 | $ | 14,000 | $ | 600 | $ | 150 | $ | 1,050 | $ | 16,400 | $ | 15,698 | $ | 6,318 | $ | 54,216 | ||||||||||||||||||||
Godderz |
2021 | $ | 14,500 | $ | 600 | $ | 150 | $ | 1,050 | $ | 17,530 | $ | 15,000 | $ | 156,040 | $ | 204,870 | |||||||||||||||||||
Hancock |
2021 | $ | 14,500 | $ | 300 | $ | 75 | $ | 525 | $ | 30,000 | $ | 7,438 | $ | 2,024,711 | $ | 2,077,549 | |||||||||||||||||||
2020 | $ | 14,250 | $ | 600 | $ | 150 | $ | 1,050 | $ | 24,000 | $ | 15,440 | $ | 4,787 | $ | 60,277 | ||||||||||||||||||||
2019 | $ | 14,000 | $ | 600 | $ | 150 | $ | 1,050 | $ | 30,000 | $ | 15,288 | $ | 5,292 | $ | 66,380 |
(a) | Subject to Internal Revenue Service rules, we match 100% of each employee’s elective 401(k) contributions, which do not exceed 5% of his or her compensation. For 2021, the maximum match was $14,500. |
(b) | We provide a two-for-one |
(c) | Amounts in this column for 2021 include: Mr. Ottensmeyer — $138,935 for personal use of the Company’s aircraft (calculated as the incremental cost to the Company of such use) and $2,530 for an annual physical exam; Mr. Songer — $2,250 for an annual physical exam, $547 for a wellness reimbursement, and $720 for a cell phone allowance; Mr. Naatz — $4,500 for an annual physical exam and $54 for GKCCF administration fees; Mr. Godderz - $720 for a cell phone allowance, $155,277 for US Excise Tax Gross Up, and $43 for GKCCF administration fees; Mr. Hancock — $360 for a cell phone allowance, $2,000,000 for a severance payment and $24,330 for medical insurance premium payments, and $21 for GKCCF administration fees. Certain other perquisites are provided to our NEOs, but do not result in an aggregate incremental cost to the Company, and thus, no value for any of these perquisites is included in the Summary Compensation Table. Specifically, (1) all employees of the Company, including the NEOs, are given the opportunity to use our stadium and arena suites to the extent the suites are not being used for business purposes; (2) our NEOs may use the services of their administrative assistants for limited personal matters; and (3) spouses of certain of our NEOs accompanied them on private aircraft chartered to transport the NEOs for business purposes. |
(4) | Mr. Godderz was not a Named Executive Officer in 2019 or 2020. |
(5) | Mr. Hancock retired from the Company on July 2, 2021. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
|||||||||||||||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Date Action Taken by Compensation Committee |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
All Other Stock Awards: Number of Shares of Stock or Units (#) |
All Other Option Awards: Number of Securities Underlying Options (#)(5) |
Exercise or Base Price of Option Awards ($/Sh) |
Grant Date Fair Value of Stock and Option Awards ($) |
||||||||||||||||||||||||||||||||||||
Patrick J. Ottensmeyer |
N/A | N/A | $ | 0 | $ | 1,204,207 | $ | 2,408,414 | ||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 1,229 | (4) | $ | 259,442 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 0 | 11,369 | 22,738 | $ | 2,399,996 | |||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 5,685 | (3) | $ | 1,200,104 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 20,429 | $ | 211.10 | $ | 1,199,999 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
|||||||||||||||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Date Action Taken by Compensation Committee |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
All Other Stock Awards: Number of Shares of Stock or Units (#) |
All Other Option Awards: Number of Securities Underlying Options (#)(5) |
Exercise or Base Price of Option Awards ($/Sh) |
Grant Date Fair Value of Stock and Option Awards ($) |
||||||||||||||||||||||||||||||||||||
Michael W. Upchurch |
N/A | N/A | $ | 0 | $ | 399,774 | $ | 799,548 | ||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 398 | (4) | $ | 84,018 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 0 | 2,821 | 5,642 | $ | 595,513 | |||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 1,410 | (3) | $ | 297,651 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 5,069 | $ | 211.10 | $ | 297,753 | |||||||||||||||||||||||||||||||||||||||||||
Jeffrey M. Songer |
N/A | N/A | $ | 0 | $ | 422,394 | $ | 844,788 | ||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 398 | (4) | $ | 84,018 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 0 | 2,399 | 4,798 | $ | 506,429 | |||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 3,568 | (3) | $ | 753,205 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 4,311 | $ | 211.10 | $ | 253,228 | |||||||||||||||||||||||||||||||||||||||||||
Michael J. Naatz |
N/A | N/A | $ | 0 | $ | 353,675 | $ | 707,350 | ||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 353 | (4) | $ | 74,518 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 0 | 2,271 | 4,542 | $ | 479,408 | |||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 1,136 | (3) | $ | 239,810 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 4,082 | $ | 211.10 | $ | 239,777 | |||||||||||||||||||||||||||||||||||||||||||
Adam J. Godderz |
N/A | N/A | $ | 0 | $ | 309,283 | $ | 618,566 | ||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 270 | (4) | $ | 56,997 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 0 | 1,516 | 3,032 | $ | 320,028 | |||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 758 | (3) | $ | 160,014 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 2,724 | $ | 211.10 | $ | 160,008 | |||||||||||||||||||||||||||||||||||||||||||
Brian D. Hancock |
N/A | N/A | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 363 | (4) | $ | 76,629 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 0 | 2,271 | 4,542 | $ | 479,408 | |||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 1,136 | (3) | $ | 239,810 | ||||||||||||||||||||||||||||||||||||||||||||
02/03/2021 | 4,082 | $ | 211.10 | $ | 239,777 |
(1) | The amounts reflected in these columns represent the threshold, target and maximum amounts that could have been earned under our 2021 AIP. Actual amounts paid for 2021 performance are reflected in the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. |
(2) | The amounts reflected in these columns represent the threshold, target and maximum amounts that could be earned for the performance share awards made under our 2021 LTI Program. See Compensation Discussion and Analysis for additional details of the 2021 LTI Program, including the performance goals. The amounts in the grant date fair value column represent the probable outcome at grant date of the performance goals for the 2021 LTI Program. |
(3) | This amount reflects restricted stock awards granted under the 2017 Plan pursuant to our 2021 LTI Program. The shares vest in full three years after the grant date. For participants that are retirement eligible, 1/3 of the shares become non-forfeitable in three annual installments beginning one year from the grant date; however, such shares remain subject to sale and transfer restrictions in accordance with the original vesting schedule. Mr. Ottensmeyer and Mr. Upchurch are retirement eligible. Holders of restricted stock are entitled to vote such shares and dividends declared on the Common Stock are accrued and paid to the participant upon the vesting or non-forfeitability, as applicable, of the restricted shares. |
(4) | This amount reflects restricted stock awards granted under the 2017 Plan pursuant to our Executive Plan. The shares vest in full one year after the grant date. For participants that are retirement eligible, the shares become non-forfeitable immediately; however, such shares remain subject to sale and transfer restrictions in accordance with the original vesting schedule. Mr. Ottensmeyer and Mr. Upchurch are retirement eligible. Holders of restricted stock are entitled to vote such shares and dividends declared on the Common Stock are accrued and paid to the participant upon the vesting or non-forfeitability, as applicable, of the restricted shares. |
(5) | The amounts in this column reflect non-qualified stock options granted under the 2017 Plan pursuant to our 2021 LTI Program. The options vest in equal 1/3 amounts on the first, second and third anniversary of the grant date. |
Option Awards |
Stock Awards |
|||||||||||||||
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($)(3) |
|||||||||||||
Ottensmeyer |
|
4,690 161,650 |
|
$ $ |
1,101,704 28,455,431.46 |
(1) (2) |
53,996 | $ | 12,000,240 | |||||||
Upchurch |
|
37,845 11,288 |
|
$ $ |
7,559,089 1,396,024.14 |
(1) (2) |
12,570 | $ | 2,787,307 | |||||||
Songer |
27,768 | $ | 4,667,998.97 | (2) | 22,811 | $ | 5,808,904 | |||||||||
Naatz |
20,010 | $ | 3,074,586.95 | (2) | 9,240 | $ | 2,320,635 | |||||||||
Godderz |
|
8,844 5,936 |
|
$ $ |
1,725,180 726,923.58 |
(1) (2) |
3,910 | $ | 1,038,968 | |||||||
Hancock |
14,619 | $ | 2,182,889 | (1) | 7,364 | $ | 1,570,142 |
(1) | This value was realized from options that were exercised prior to the merger. The value realized on shares that were sold immediately upon exercise is the difference between the actual sales price and the exercise price of the option. |
(2) | Pursuant to the Merger Agreement, each outstanding (vested and unvested) employee stock option was converted to cash and paid out immediately following the closing into Voting Trust. Options were cashed out at the difference between the Merger Consideration Value of $301.20 and the exercise price of the respective option. |
(3) | The value realized is the fair market value of our Common Stock (the closing price on the NYSE) on the trading day prior to the vesting date. Pursuant to the Merger Agreement, all unvested restricted share awards became vested immediately prior to the effective time of the merger and received the Merger Consideration paid to shareholders ($90.00 per share plus 2.884 shares of CP common stock per share). |
Benefit |
General Severance |
Change in Control Severance | ||
Cash Severance | • CEO: 2 x (base salary + target bonus) • Other NEOs: 1 x (base salary + target bonus) |
• CEO: 3 x (base salary + target bonus) • Messrs. Upchurch & Godderz: 3 x (base salary + target bonus) (1) • Other NEOs: 2 x (base salary + target bonus) (1) | ||
Current-Year Bonus | • Prorated, subject to actual financial performance |
• Prorated at target financial performance | ||
Long-Term Incentives | • Determined by equity award agreement |
• CEO & NEOs: All unvested equity awards (including awards converted to cash-based awards in connection with the merger) shall vest upon Qualified Termination | ||
Welfare Benefit Continuation | • COBRA (for 12 months), if elected, executive will only be required to pay the same share of the applicable premium for medical coverage that would apply if the executive were participating in the medical plan as an active employee. |
• COBRA (for 18 months), if elected, executive will only be required to pay the same share of the applicable premium for medical coverage that would apply if the executive were participating in the medical plan as an active employee. | ||
Outplacement | • One year – up to $25,000 |
• One year – up to $25,000 |
(1) | Minimum of 60% target bonus used for select executives in the event of a CIC severance. |
• | Restricted Shares Award Agreements for newly hired or promoted executives provide that if there is a termination of affiliation by reason of retirement prior to vesting, then for every consecutive twelve-month period of employment completed during the period beginning on the grant date and ending on the date of termination of affiliation by reason of retirement, 1/5 of the number of restricted shares will vest and no longer be subject to restriction. |
• | Restricted Shares and Performance Shares Award Agreements for the 2019 LTI Program, 2020 LTI Program, and 2021 LTI Program provide that the restricted shares will vest and no longer be subject to |
restrictions upon a termination of affiliation by reason of a disability prior to vesting. Additionally, for the performance shares, if there is a termination of affiliation due to a disability prior to vesting, then upon such termination of affiliation the executive will be deemed to have earned a number of shares determined as if the Performance Goals were at target. Also, for the performance shares, if there is a termination of affiliation prior to vesting due to retirement, a portion of the performance shares will be forfeited where the forfeited portion shall equal the number of performance shares times a fraction, the numerator of which is the total number of remaining whole months in the performance period and the denominator of which is thirty-six months. The portion of performance shares not forfeited pursuant to the foregoing shall be earned based on the applicable performance percentage achieved and shall be paid on the later of the vesting date or the date the results are certified. |
• | Restricted Shares Award Agreements used for our Executive Plan provide that restricted shares will no longer be subject to restrictions upon a termination of affiliation due to retirement prior to vesting. |
• | Restricted Shares and Stock Option Award Agreements generally provide that all awards become fully vested or exercisable upon a Change of Control. Beginning in March 2019, awards, pursuant to our annual LTI Program, provide that such vesting will only occur upon a termination of employment within two years after a Change of Control. |
• | Beginning in February 2021, all employee equity award agreements generally provide that awards become fully vested or exercisable upon an involuntary termination of employment or a voluntary termination for Good Reason (as defined in respective award agreement), in each case within a two-year period following a Change of Control. |
Patrick J. Ottensmeyer |
||||||||||||||||||||
Benefit |
Death |
Disability |
Retirement |
Change in Control |
Without Cause or Good Reason |
|||||||||||||||
Cash Severance |
$ | — | $ | — | $ | — | $ | 6,792,621 | $ | 4,528,414 | ||||||||||
Retention Bonus |
$ | — | $ | — | $ | — | $ | 1,590,000 | $ | — | ||||||||||
Equity (Intrinsic Value) |
$ | — | $ | — | $ | — | ||||||||||||||
Unvested Restricted Stock |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Performance Shares |
$ | 23,771,909 | $ | 23,771,909 | $ | 16,666,400 | $ | 23,771,909 | $ | — | ||||||||||
Unexercisable Options |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 23,771,909 | $ | 23,771,909 | $ | 16,666,400 | $ | 23,771,909 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other Benefits |
||||||||||||||||||||
Outplacement Benefits |
$ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | ||||||||||
Health & Welfare (Present Value) |
$ | — | $ | — | $ | — | $ | 8,072 | $ | 5,381 | ||||||||||
Estimated Make Whole Payment |
$ | — | $ | — | $ | — | $ | 9,884,670 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | 9,917,742 | $ | 30,381 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 23,771,909 | $ | 23,771,909 | $ | 16,666,400 | $ | 42,072,272 | $ | 4,558,795 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Michael W. Upchurch |
||||||||||||||||||||
Benefit |
Death |
Disability |
Retirement |
Change in Control |
Without Cause or Good Reason |
|||||||||||||||
Cash Severance |
$ | — | $ | — | $ | — | $ | 2,822,322 | $ | 940,774 | ||||||||||
Retention Bonus |
$ | — | $ | — | $ | — | $ | 811,500 | $ | — | ||||||||||
Equity (Intrinsic Value) |
$ | — | $ | — | $ | — | ||||||||||||||
Unvested Restricted Stock |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Performance Shares |
$ | 5,552,923 | $ | 5,552,923 | $ | 3,828,252 | $ | 5,552,923 | $ | — | ||||||||||
Unexercisable Options |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,552,923 | $ | 5,552,923 | $ | 3,828,252 | $ | 5,552,923 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other Benefits |
||||||||||||||||||||
Outplacement Benefits |
$ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | ||||||||||
Health & Welfare (Present Value) |
$ | — | $ | — | $ | — | $ | 16,115 | $ | 10,743 | ||||||||||
Estimated Make Whole Payment |
$ | — | $ | — | $ | — | $ | 3,080,020 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | 3,121,135 | $ | 35,743 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,552,923 | $ | 5,552,923 | $ | 3,828,252 | $ | 12,307,880 | $ | 976,517 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Jeffrey M. Songer |
||||||||||||||||||||
Benefit |
Death |
Disability |
Retirement |
Change in Control |
Without Cause or Good Reason |
|||||||||||||||
Cash Severance |
$ | — | $ | — | $ | — | $ | 1,920,788 | $ | 960,394 | ||||||||||
Retention Bonus |
$ | — | $ | — | $ | — | $ | 807,000 | $ | — | ||||||||||
Equity (Intrinsic Value) |
$ | — | $ | — | $ | — | ||||||||||||||
Unvested Restricted Stock |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Performance Shares |
$ | 5,271,602 | $ | 5,271,602 | $ | — | $ | 5,271,602 | $ | — | ||||||||||
Unexercisable Options |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,271,602 | $ | 5,271,602 | $ | — | $ | 5,271,602 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other Benefits |
$ | — | ||||||||||||||||||
Outplacement Benefits |
$ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | ||||||||||
Health & Welfare (Present Value) |
$ | — | $ | — | $ | — | $ | 25,028 | $ | 16,685 | ||||||||||
Estimated Make Whole Payment |
$ | — | $ | — | $ | — | $ | 2,677,757 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | 2,727,785 | $ | 41,685 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,271,602 | $ | 5,271,602 | $ | — | $ | 10,727,175 | $ | 1,002,079 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Michael J. Naatz |
||||||||||||||||||||
Benefit |
Death |
Disability |
Retirement |
Change in Control |
Without Cause or Good Reason |
|||||||||||||||
Cash Severance |
$ | — | $ | — | $ | — | $ | 1,725,350 | $ | 862,675 | ||||||||||
Retention Bonus |
$ | — | $ | — | $ | — | $ | 763,500 | $ | — | ||||||||||
Equity (Intrinsic Value) |
$ | — | $ | — | $ | — | ||||||||||||||
Unvested Restricted Stock |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Performance Shares |
$ | 5,031,847 | $ | 5,031,847 | $ | — | $ | 5,031,847 | $ | — | ||||||||||
Unexercisable Options |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,031,847 | $ | 5,031,847 | $ | — | $ | 5,031,847 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other Benefits |
$ | — | ||||||||||||||||||
Outplacement Benefits |
$ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | ||||||||||
Health & Welfare (Present Value) |
$ | — | $ | — | $ | — | $ | 24,978 | $ | 16,652 | ||||||||||
Estimated Make Whole Payment |
$ | — | $ | — | $ | — | $ | 2,498,114 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | 2,548,092 | $ | 41,652 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 5,031,847 | $ | 5,031,847 | $ | — | $ | 10,068,789 | $ | 904,327 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Adam J. Godderz |
||||||||||||||||||||
Benefit |
Death |
Disability |
Retirement |
Change in Control |
Without Cause or Good Reason |
|||||||||||||||
Cash Severance |
$ | — | $ | — | $ | — | $ | 2,397,849 | $ | 799,283 | ||||||||||
Retention Bonus |
$ | — | $ | — | $ | — | $ | 735,000 | $ | — | ||||||||||
Equity (Intrinsic Value) |
$ | — | $ | — | $ | — | $ | — | ||||||||||||
Unvested Restricted Stock |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Performance Shares |
$ | 2,873,448 | $ | 2,873,448 | $ | — | $ | 2,873,448 | $ | — | ||||||||||
Unexercisable Options |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,873,448 | $ | 2,873,448 | $ | — | $ | 2,873,448 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other Benefits |
$ | — | ||||||||||||||||||
Outplacement Benefits |
$ | — | $ | — | $ | — | $ | 25,000 | $ | 25,000 | ||||||||||
Health & Welfare (Present Value) |
$ | — | $ | — | $ | — | $ | 25,028 | $ | 16,685 | ||||||||||
Estimated Make Whole Payment |
$ | — | $ | — | $ | — | $ | 2,649,758 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | 2,699,786 | $ | 41,685 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,873,448 | $ | 2,873,448 | $ | — | $ | 8,706,083 | $ | 840,968 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Brian D. Hancock* |
||||||||||||||||||||
Benefit |
Death |
Disability |
Retirement |
Change in Control |
Without Cause or Good Reason |
|||||||||||||||
Cash Severance |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Retention Bonus |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Equity (Intrinsic Value) |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Restricted Stock |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unvested Performance Shares |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Unexercisable Options |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other Benefits |
||||||||||||||||||||
Outplacement Benefits |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Health & Welfare (Present Value) |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Estimated Make Whole Payment |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
* | Mr. Hancock retired from the Company on July 2, 2021. Amounts paid to him upon his retirement are set forth in the Summary Compensation Table. |
• | The median of the annual total compensation of all employees of the Company (other than our CEO) was $49,462 (based on the exchange rate reported by Banco de Mexico on December 31, 2021 of 20.5835 Mexican pesos per U.S. dollar). The employee is a collective bargaining employee based in Mexico. |
• | The annual total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Amendment No. 1 on Form 10-K/A, was $8,314,898. |
• | Based on this information, for 2021 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 168 to 1. |
• | The median of the annual total compensation of U.S. Employees of the Company (other than our CEO) was $97,495. This employee is a collective bargaining employee based in Louisiana. |
• | The annual total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Amendment No. 1 on Form 10-K/A, was $8,314,898. |
• | Based on this information, for 2021 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of U.S. Employees was 85 to 1. |
• | We selected October 31, 2021 as the date upon which to identify the respective median employee. No significant changes to the respective employee populations have occurred subsequent to October 31, 2021. |
• | As of October 31, 2021, our employee population consisted of approximately 7,000 full-time employees, with approximately 2,950 of these individuals located in the U.S. and approximately 4,050 located in Mexico. Approximately 71% of our employees located in the U.S. are covered by collective bargaining agreements and approximately 77% of our employees located in Mexico are covered by a labor agreement with the Mexican railroad union (Sindicato de Trabajadores Ferrocarrileros de la República Mexicana). |
• | Workers not employed by the Company were excluded from the determination of the respective “median employee”, as such workers are employed by unaffiliated third parties, and their compensation is determined by those unaffiliated third parties. |
• | To identify the respective “median employee” from the total employee population and from the U.S. Employee population, we compared, for the twelve months ended October 31, 2021, the aggregate amount of: |
• | Salary or wages, as applicable; |
• | Annual cash incentive payments; |
• | Payments required by Mexican labor law or consistent with Mexican customary practice, including Christmas bonus, vacation premium, food stipends and statutory profit sharing; |
• | The Company’s 401(k) or Mexican savings fund matching contributions. |
• | In making the above determination for the total employee population, amounts paid in Mexican pesos were converted to U.S. dollars at an exchange rate of 20.3255 Mexican pesos per U.S. dollar, the exchange rate reported by Banco de Mexico on October 31, 2021. |
• | In making the above determinations for the total employee population and for the U.S. Employee population, we annualized the compensation of approximately 481 and 307 full-time employees, respectively, who did not work for us for the entire twelve-month period due to being hired or taking unpaid leaves of absence during the period. |
• | We identified our respective median employees using this compensation measure, which was consistently applied to all employees included in the respective calculation. |
• | We did not make any cost-of-living |
• | For each of the median employees, we combined all elements of the respective employee’s compensation for 2021 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K and consistent with the determination of the total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this Amendment No. 1 on Form 10-K/A. |
• | market competition for directors; |
• | securities law and NYSE independence, expertise and qualification requirements; |
• | director compensation provided by peer group companies selected by the Compensation Committee with the assistance of the Compensation Consultant; |
• | directors’ duties and responsibilities; and |
• | director retention. |
Type |
Amount |
|||
Board of Directors |
$ | 75,000 | ||
Chair of the Board |
$ | 100,000 | ||
Committee Chair |
$ | 20,000 | ||
Committee Membership |
$ | 10,000 |
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($)(1) |
Option Awards ($)(1) |
All Other Compensation ($)(4) |
Total ($) |
|||||||||||||||
Lydia I. Beebe |
$ | 260,000 | $ | 0 | $ | 0 | $ | 30,049 | $ | 290,049 | ||||||||||
Lu M. Córdova |
$ | 270,000 | $ | 0 | $ | 0 | $ | 17,049 | $ | 287,049 | ||||||||||
Robert J. Druten |
$ | 380,000 | (2) | $ | 0 | $ | 0 | $ | 27,430 | $ | 407,430 | |||||||||
Antonio O. Garza, Jr. |
$ | 260,000 | $ | 0 | $ | 0 | $ | 50,075 | $ | 310,075 | ||||||||||
David Garza-Santos |
$ | 250,000 | (3) | $ | 0 | $ | 0 | $ | 75 | $ | 250,075 | |||||||||
Janet H. Kennedy |
$ | 250,000 | $ | 0 | $ | 0 | $ | 10,075 | $ | 260,075 | ||||||||||
Mitchell J. Krebs |
$ | 260,000 | $ | 0 | $ | 0 | $ | 8,075 | $ | 268,075 | ||||||||||
Henry J. Maier |
$ | 270,000 | $ | 0 | $ | 0 | $ | 49 | $ | 270,049 | ||||||||||
Thomas A. McDonnell |
$ | 280,000 | $ | 0 | $ | 0 | $ | 30,030 | $ | 310,030 |
(1) | No stock or option awards were granted to any director in 2021. |
(2) | Mr. Druten deferred receipt of $240,000 pursuant to the Directors Deferred Stock Program. He accrued 817 deferred shares as a result of this deferral and receives dividend equivalents on such deferred shares. Pursuant to the Merger Agreement, outstanding deferred shares were paid out to the participant immediately prior to the effective time of the merger. In exchange for the deferred shares that were paid out, the participant received the Merger Consideration that was paid to all stockholders ($90.00 per share plus 2.884 shares of CP common stock per share). |
(3) | Mr. Garza-Santos deferred receipt of $110,000 pursuant to the Directors Deferred Stock Program. He accrued 374 deferred shares as a result of this deferral and receives dividend equivalents on such deferred shares. Pursuant to the Merger Agreement, outstanding deferred shares were paid out to the participant immediately prior to the effective time of the merger. In exchange for the deferred shares that were paid out, the participant received the Merger Consideration that was paid to all stockholders ($90.00 per share plus 2.884 shares of CP common stock per share). |
(4) | All Other Compensation for directors consists of: |
Name |
Group Term Life Premiums |
AD&D Premiums |
Charitable Matching Gifts (a) |
Other(b) |
Total |
|||||||||||||||
Lydia I. Beebe |
$ | 39 | $ | 10 | $ | 30,000 | $ | 0 | $ | 30,049 | ||||||||||
Lu M. Córdova |
$ | 39 | $ | 10 | $ | 17,000 | $ | 0 | $ | 17,049 | ||||||||||
Robert J. Druten |
$ | 24 | $ | 6 | $ | 27,400 | $ | 0 | $ | 27,430 | ||||||||||
Antonio O. Garza, Jr. |
$ | 60 | $ | 15 | $ | 14,000 | $ | 36,000 | $ | 50,075 | ||||||||||
David Garza-Santos |
$ | 60 | $ | 15 | $ | 0 | $ | 0 | $ | 75 | ||||||||||
Janet H. Kennedy |
$ | 60 | $ | 15 | $ | 10,000 | $ | 0 | $ | 10,075 | ||||||||||
Mitchell J. Krebs |
$ | 60 | $ | 15 | $ | 8,000 | $ | 0 | $ | 8,075 | ||||||||||
Henry J. Maier |
$ | 39 | $ | 10 | $ | 0 | $ | 0 | $ | 49 | ||||||||||
Thomas A. McDonnell |
$ | 24 | $ | 6 | $ | 30,000 | $ | 0 | $ | 30,030 |
(a) | We provide a two-for-one |
(b) | Amounts in this column for 2021 include: Mr. Garza – director fees paid by the Company’s wholly owned subsidiary, Kansas City Southern de Mexico, S.A. de C.V., for serving as Chairman of its board of directors. |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
• | Beneficial owners of more than five percent of our Common Stock that have publicly disclosed their ownership in filings with the SEC; |
• | The members of our Board of Directors, including our Chief Executive Officer; |
• | Our Chief Financial Officer and the other executive officers for whom information is provided in the Summary Compensation Table in this Amendment No. 1 on Form 10-K/A; and |
• | All current executive officers and directors as a group. The address for each of our directors and executive officers listed is 427 West 12th Street, Kansas City, Missouri 64105. |
Name of Beneficial Owner |
Common Stock (1) |
Percent of Class (1) |
||||||
5% or Greater Owners |
||||||||
CP VOTING TRUST(2) |
100 | 100 | % | |||||
Named Executive Officers and Directors |
||||||||
Lydia I. Beebe |
— | — | ||||||
Lu M. Córdova |
— | — | ||||||
Robert J. Druten |
— | — | ||||||
Antonio O. Garza, Jr. |
— | — | ||||||
David Garza-Santos |
— | — | ||||||
Janet H. Kennedy |
— | — | ||||||
Mitchell J. Krebs |
— | — | ||||||
Henry J. Maier |
— | — | ||||||
Thomas A. McDonnell |
— | — | ||||||
Patrick J. Ottensmeyer |
— | — | ||||||
Brian D. Hancock |
— | — | ||||||
Michael J. Naatz |
— | — | ||||||
Jeffrey M. Songer |
— | — | ||||||
Michael W. Upchurch |
||||||||
All executive officers and directors as a group (14 persons) |
— | — |
(1) | This column includes Common Stock beneficially owned by officers, directors, nominees for director and beneficial owners of more than five percent of our Common Stock. The list of our executive officers is included in our Annual Report on Form 10-K for the year ended December 31, 2021. |
(2) | David L. Starling, 2442 NE Rivercrest Rd., Fayetteville, AR 72701, is the Trustee of a Voting Trust established December 14, 2021, by and between CP, Cygnus Holding Corp., a Delaware corporation and an indirect wholly owned subsidiary of CP, and David L. Starling. Upon the execution of the Voting Trust Agreement and completion of the merger transactions contemplated under the Merger Agreement, the Company was ultimately merged with and into a wholly-owned subsidiary of CP. Immediately upon completion of these transactions, the surviving subsidiary from these mergers changed its name to Kansas City Southern (KCS), and the certificate for all outstanding common shares of the Company was deposited with the Trustee to hold in trust. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
• | the significance of the transaction to the Company; |
• | the best interests of the Company’s stockholders; |
• | the materiality of the transaction to the related person; |
• | whether the transaction is significantly likely to impair any judgments an executive officer or director would make on behalf of the Company; |
• | the Company’s Code of Business Conduct and Ethics; |
• | whether a related person serves on the Compensation Committee and if so, whether such continued service is appropriate in accordance with the Compensation Committee charter; and |
• | whether the terms of the transaction are more favorable to the Company than would be available from an unrelated third party. |
Item 14. |
Principal Accountant Fees and Services |
Year Ended December 31 |
||||||||
Fees |
2021 |
2020 |
||||||
Audit fees(1) |
$ | 2,491.4 | $ | 1,779.8 | ||||
Audit-related fees(2) |
64.0 | 63.0 | ||||||
Tax fees(3) |
36.5 | 29.5 | ||||||
All other fees |
160.0 | — | ||||||
|
|
|
|
|||||
Total |
$ | 2,751.9 | $ | 1,872.3 | ||||
|
|
|
|
(1) | Audit fees principally include fees for the audit of our consolidated financial statements included in our annual report on Form 10-K and internal control over financial reporting (integrated audit); the review of financial statements included in our quarterly reports on Form 10-Q; the audit for statutory purposes of the consolidated financial statements of KCSM, our wholly-owned subsidiary; and services routinely provided by the auditor in connection with statutory and regulatory filings or engagements. |
(2) | Audit-related fees consist of fees for other attestation and related services that are reasonably related to the performance of the audit or review of our financial statements. |
(3) | Tax fees consist of tax compliance services. |
Item 15. | Exhibits and Financial Statement Schedules |
Exhibit |
Description | |
31.1 | Certification of Patrick J. Ottensmeyer, Chief Executive Officer of the Company relating to this amendment, is attached to this Form 10-K/A as Exhibit 31.1. | |
31.2 | Certification of Michael W. Upchurch, Chief Financial Officer of the Company relating to this amendment, is attached to this Form 10-K/A as Exhibit 31.2. | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Kansas City Southern | ||
By: | /S/ PATRICK J. OTTENSMEYER | |
Patrick J. Ottensmeyer President, Chief Executive Officer and Director |