UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE14A

(RULE 14A-101)

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

 

Check the appropriate box:

MYERS INDUSTRIES, INC.

(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

---

 

NOTICE OF 2019

ANNUAL MEETING OF SHAREHOLDERS

AND PROXY STATEMENT

 

 

---

 

1293 South Main Street — Akron, Ohio 44301

March 20, 2019

 

Dear Fellow Shareholders,

 

It is a privilege to work on behalf of Myers shareholders as Chairman of its Board of Directors. I am writing to update you on our work.

During the past year, we had a few transitions among our executive team. Matteo Anversa left his position to return to the automotive industry, joining a larger company as CFO.  We wish him well in his new role. We are fortunate that our longtime Chief Accounting Officer (and former interim CFO) Kevin Brackman was able to step seamlessly into this role in December. Last year, we were also pleased to have Andrean Horton join the Myers team as Chief Legal Officer. Her prior experience serving as Chief Legal Officer and Secretary of a global enterprise, combined with her expertise in handling complex legal matters, make her an excellent addition to our executive team.  Prior to this position being created, we were fortunate to have the wise counsel of Mark Helm from Munger, Tolles and Olson.

To succeed the two directors who did not stand for re-election at last year’s annual meeting, we appointed two new directors during the year: Ron DeFeo and Lori Lutey.  Ron, who joined in August, is the former Executive Chairman and CEO of Kennametal, Inc. and was also Chairman and CEO of Terex. He brings strong operations expertise to the board along with insights that come from successfully running large, global industrial companies. Lori joined the board in September, after a distinguished career as CFO of Schneider National and VP, Finance at FedEx Services. She strengthens the board’s accounting and financial expertise, given her extensive experience in new product and customer pricing analysis. Both Ron and Lori are already making very positive contributions to the board. Our eight independent directors -- three of whom are women -- contribute a broad range of expertise in strategy, M&A, operations, financials, and capital allocation.

We continue to incorporate best practices in our corporate governance. For example, we conduct annual elections for all directors; ensure there is an independent board chair and committees comprised exclusively of independent board members; and utilize the services of an independent third party to facilitate annual self-evaluations of our board performance.

The committee system is central to our governance structure. Each of the Audit and Compensation Committees reviews and approves all proposed charges and adjustments (affecting earnings and employee compensation) at their respective committee meetings on a quarterly basis.

Our Compensation Committee continues to work to optimize the company’s compensation program, ensuring that management’s short- and long-term incentives are properly aligned with shareholders’ interests. The Governance and Nominating Committee was responsible for successfully recruiting our new directors, and also is charged with overseeing board training and evaluation. The Audit Committee continued to work closely with our outside independent accounting firm and internal financial staff, including our new CFO, to ensure the quality of our financial controls.  We also created a Finance Committee as an ad hoc committee of the board in 2018 to review optimal financial structures for the company.

Myers sold new stock in August, which improved the balance sheet and substantially lowered the company’s leverage ratio (several directors purchased stock in the open market after this offering). We have been careful stewards of this new capital and are keenly aware of relative valuations of alternative uses of these funds.

 

---

 

As a board, we hold ourselves accountable to the highest standards. We continue to self-evaluate. As previously noted, we use an independent party to evaluate every board member, each committee, and the board as a whole. To maximize the effectiveness of these evaluations, we discuss this feedback—in both board and committee meetings — and establish objectives for continuous improvement. Just as we value peer evaluations, the board believes director education is valuable. Last fall, for example, one meeting began with a presentation on the board’s proper role in M&A, delivered by a corporate director who is a leading M&A lawyer and former CEO.

Your board works closely with management to evaluate and define Myers’ enterprise strategy, which was first presented to the investment community two years ago. Our long-term strategy is guided by three key operating principles: a niche market focus; flexible operations through the use of an asset-light business model; and strong cash flow growth. More recently, we announced actions required for the successful transformation of our Distribution segment.  

As a board, we have been deeply involved with management in defining Myers’ culture as one characterized by a “winning” mentality and a results-based orientation. We are committed to transparency and candor, while remaining consistently attentive to both our customers’ needs and our employees’ safety. We want our employees to act and feel like owners, while operating with the highest possible ethical standards and promoting diversity of all kinds throughout the organization.

Environmental stewardship and corporate responsibility are likewise very important to the company — and something about which several shareholders have inquired. We incorporate environmental consciousness into all aspects of our operations by, among other measures, recycling and reprocessing plastic scrap in our factories. We also manufacture returnable packaging products and implement and maintain recycling programs. Of course, we conserve energy whenever we can, and encourage our customers to focus on sustainability, as well. At the beginning of each board meeting, we review the previous quarter’s safety record (which, thankfully, remains well below the industry average).

Effective last year, we modified the method (but not the actual dollar equivalent) of director pay. For a director’s stock retainer, rather than issuing the stock portion of our annual retainer to directors at the end of a year of service (at the annual meeting) we began issuing restricted stock at the beginning of the year of service (when directors are elected at the annual meeting), which will not vest until the first anniversary of the grant.  In our case, directors received their restricted stock grant for their 2018 term of service at the annual meeting date in April 2018 (at a price above $24/share) and such shares will vest in April 2019. This change was made to be more consistent with current best practices.  In this year’s proxy statement, it will appear that the stock portion of our director retainer doubled. In next year’s proxy statement, the “director stock retainer” portion will be approximately half of the amount appearing this year. I wanted to alert you to what is, in effect, a bookkeeping change, even though there is no actual economic change in the stock retainer portion paid to directors.

For the third consecutive year, we reached out to shareholders (Compensation Committee Chair Sarah Coffin, Treasurer Monica Vinay, and I offered to meet with each shareholder owning more than 1% of the company). This year, we met with shareholders and once again gained valuable insights about their opinions on governance and views on other matters.

We were gratified by the results of the “say on pay” proposal at last year’s annual meeting, when almost 25 million shares voted for and only about 260,000 shares voted against. This was a substantial improvement over two years ago when about 6.7 million shares voted against this same “say on pay” proposal.

As always, we welcome feedback from our shareholders. Shareholders may send communication by email to governance@myersind.com, or by mail or courier delivery addressed as follows: Board of Directors (or Committee Chair, Board Member, or Non-Management Directors, as the case may require), c/o Chief Legal Officer and Secretary, Myers Industries, Inc., 1293 Main Street South, Akron, Ohio 44301, as outlined more completely in our Communication Procedures for Interested Parties and Shareholders available on the company’s website www.myersindustries.com.

 

---

 

In last year’s letter, I was pleased to report that Myers’ stock outperformed during 2017 (up by about 40%, compared to almost 22% for the S&P 500). Unfortunately, Myers’ stock price performance was disappointing last year: down by about 20% vs. about -4% for the S&P 500. We continue to believe that one year is not an appropriate gauge of long-term performance.

Your board remains very active and engaged, and we begin 2019 with a firm commitment to building long-term shareholder value at Myers. Thank you for your support of the company and confidence in our efforts on your behalf.

 

Sincerely,

************

 

---

 

Dear Shareholders,

 

The Board of Directors of Myers Industries, Inc. (“Myers Industries” or the “Company”) has fixed the close of business on March 7, 2019 as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting of Shareholders to be held on April 24, 2019 (the “Annual Meeting”). This Proxy Statement, together with the related proxy card and our 2018 Annual Report to Shareholders, is being mailed to our shareholders on or about March 20, 2019. To be sure that your shares are properly represented at the Annual Meeting, whether or not you intend to attend the Annual Meeting via live webcast or in person, please complete and return the enclosed proxy card, or follow the instructions to vote by telephone or internet, as soon as possible.

If you have any questions or need assistance in voting your shares, please contact our Investor Relations Department at (330) 761-6212.

 

Akron, Ohio

March 20, 2019

THE 2018 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS NOTICE

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: This Proxy Statement and the Company’s 2018 Annual Report to Shareholders are available on Myers Industries’ website at:

http://investor.myersindustries.com/investor-relations/financial-information/default.aspx.

 

 

 

---

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

Items of Business

The Board of Directors recommends that you vote “FOR” each of the director nominees included in Proposal Number 1 and “FOR” each of Proposal Numbers 2 and 3. The full text of these proposals is set forth in the accompanying Proxy Statement.

How to Vote

 

 

 

 

---

 

PROXY STATEMENT SUMMARY

Below are the highlights of important information you will find in this Proxy Statement.  As this is only a summary, we request you please review the full Proxy Statement before casting your vote.

 

 

    i

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

Recent Highlights and Achievements

The Company’s management and its Board of Directors (the “Board” or “Board of Directors”) have developed a strategic vision for the Company, which they have focused on implementing for the past several years. This long-term strategy is guided by three key operating principles:

The Company’s mission is to instill a culture where safety and efficiency are part of every aspect of the business and where employees are empowered to act like owners. The Company’s management and Board of Directors work hand-in-hand to develop our strategic vision and together review the Company’s strategy and performance periodically throughout the year.

Myers Industries has made meaningful progress executing its long-term strategy.  The Company’s key achievements in 2018 included, among others:

In addition, we also announced a set of strategic transformation actions for our Distribution segment. The actions are expected to be implemented by the end of 2019 and include a new go-to-market strategy, a contribution margin improvement initiative, and an overhead and logistics optimization plan. The goal of the transformation is to reach a 10% EBITDA margin run-rate in 2020.

ii    

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

Governance Highlights

Myers Industries is committed to applying sound corporate governance practices.  We believe sound governance practices are in the best interests of our shareholders and strengthen accountability within the organization.

 

 

Myers Industries’ commitment to sound corporate governance practices has been illustrated through a number of actions taken over the years, as shown below.  

 

    iii

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

Director Nominees

You are being asked to vote on the election of the following director candidates.  The candidates listed below are the nominees recommended by the Governance and Nominating Committee (the “Governance Committee”) and approved by the Board to serve for a one-year term. Detailed information on each director is available starting on page 9.

*Mr. Liebau is an ex officio member of each of the Company’s committees.

 

Board Overview

Myers Industries has an experienced and effective Board focused on shareholder value creation.  The Board is currently composed of nine members, eight of whom are independent.  The charts below highlight the Board’s composition and experience.

iv    

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

Board Composition

Director Qualifications

 

    v

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

Shareholder Engagement

One of our key priorities is conducting robust engagement with our shareholders in order to provide transparency into our business and determine which issues are important to our shareholders. Participants in our engagement programs include executive management, members of the Board of Directors and Investor Relations personnel. Our methods of engagement include:

Shareholder Outreach

We believe engaging in shareholder outreach is an important element of strong corporate governance.  In 2018, in a continuation of the Company’s shareholder outreach efforts that began in 2016, members of our Board and executive management acted on this belief and contacted the top 14 shareholders who own 1% or greater of outstanding shares and represent collectively approximately 73% of total shares outstanding. Following this outreach, conference calls were conducted with two of the 14 shareholders initially approached who had expressed interest in having a conversation with our management and directors. During our outreach meetings, we discussed corporate governance matters, board diversity, the safety, environmental and social policies and reporting practices of the Company, and other items of shareholder interest.

The Company values the input received from these discussions with shareholders. Following these conversations, the Company has continued to emphasize the importance of safety in our operations and has renewed its focus on enhancing sustainable business practices and incorporating environmental consciousness throughout our operations.  Additionally, the Compensation Committee of the Company regularly evaluates the Company’s compensation programs and considers shareholder input in evaluating the programs.  

At any time during the year shareholders may access our Annual Report, Proxy Statement, financial presentations, and corporate governance guidelines at www.myersindustries.com.  

Shareholder Communications

Shareholders may contact any director, committee of the board, non-management director or the Board through the following:

via U.S. Mail at:

Myers Industries, Inc.

c/o Secretary

1293 South Main Street

Akron, Ohio 44301

 

via e-mail at:

governance@myersind.com

A toll-free hotline has also been established if an interested party wishes to contact a director, a committee of the Board, a non-management director or the Board by phone. The number is (877) 285-4145 and is available worldwide 24 hours a day, seven days a week.

vi    

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

 

Executive Compensation Overview

Myers Industries’ executive compensation program, set forth by the Compensation Committee, is designed to implement our executive pay philosophy to:

Compensation Practices

 

 

    vii

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

Elements of Compensation for 2018

 

Our 2018 executive compensation program was designed to reinforce the relationship between the interests of our named executive officers (or “NEOs”) and our shareholders.  The objectives and key characteristics of each element of our 2018 executive compensation are summarized below:

 

viii    

---

 

PROXY STATEMENT SUMMARY (CONTINUED)

2018 NEO Target Compensation Mix

2018 CEO Target Compensation Mix

 

 

2018 CFO Target Compensation Mix

 

 

* “Fixed” compensation includes salary and service-based restricted stock; “variable” compensation includes annual bonuses, performance stock units and stock options; “long-term” compensation includes stock options, performance stock units and restricted stock, and “short-term” compensation includes salary and annual bonuses.  

 

    ix

---

 

 

Myers Industries, Inc.

 

 

Proxy Statement

 

    1

---

 

 

 

 

2    

---

 

Corporate Governance and Compensation Practices and Policies

The Board of Directors is committed to maintaining sound corporate governance and a compensation structure that promotes the best interests of our shareholders.  

Corporate Governance Guidelines

The Company has adopted “Corporate Governance Guidelines” and a “Code of Business Conduct and Ethics” for the Company’s directors, officers and employees.  Each of our corporate governance policies is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at www.myersindustries.com.

Corporate Governance and Compensation Practices

Shareholder Outreach

In 2018, the Company and members of the Board continued to conduct considerable shareholder outreach, through which we have requested input from our largest institutional investors and other shareholders collectively holding approximately 73% of our outstanding shares.  

Following this outreach, discussions were ultimately conducted with two of the shareholders initially approached who had indicated interest in having a conversation with our management and directors. The Company received feedback on:

We value shareholder views and insights and expect to continue to dialogue with our shareholders.

Annual Elections

In accordance with best practices, all of our directors are elected annually.

Independent Chairman

    3

---

 

Board and Committee Independence

Director Resignation Policy

Over-Boarding Policy

The Company has adopted a policy that the maximum number of public company boards on which a non-CEO director may sit is five (including the Company’s board) and the maximum number of public company boards on which a CEO director may sit is three (including the Company’s board).

4    

---

 

Board Role in Risk Oversight

The Board annually reviews the Company’s strategic plan, which addresses, among other things, the Company’s risks and opportunities. Certain areas of oversight are delegated to the relevant Committees of the Board and the Committees regularly report back on their deliberations. This oversight is enabled by reporting processes that are designed to provide visibility to the Board about the identification, assessment, monitoring and management of enterprise-wide risks. Every year, management conducts an enterprise-wide risk assessment of the Company and each of its business segments and presents the assessment to the Board for review. The focus of this assessment includes a review of strategic, financial, operational, compliance, reputational and technology (IT) objectives and risks for the Company. In addition:

Each committee also considers the reputational risk implicated by the oversight responsibilities described above.

Clawback Policy

The Company maintains a “Clawback Policy” that provides for the recoupment of certain incentive compensation in the event of an accounting restatement resulting from material noncompliance (whether or not based upon misconduct) with financial reporting requirements under the federal securities laws. The Clawback Policy is administered by the Compensation Committee and applies to current and former executive officers and such other employees who may from time to time be deemed subject to the policy by the Compensation Committee.

Succession Planning

Our Board, in coordination with the Governance Committee, oversees succession planning for the CEO and other officers of the Company. As part of its succession planning oversight, the Board reviews the senior management team’s experience, skills, competence and potential, to help assess which executives have the ability to develop the attributes that the Board believes are necessary to lead and execute the Company's strategic vision.

Stock Ownership Guidelines

The Company maintains “Stock Ownership Guidelines” whereby our executive officers and non-employee directors are expected to hold a specified amount of our common stock.  These expectations are as follows:

The executive officers and non-employee directors have five years from the date they become subject to the guidelines to attain the ownership requirement. These “Stock Ownership Guidelines” are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersindustries.com.

Anti-Hedging and Pledging Policy

The Company prohibits directors, officers and employees from engaging in any hedging or pledging transactions with respect to Company shares.

    5

---

 

Board Member Recruiting Guidelines

The Company’s Board Member Recruiting Guidelines outline the process for nominating potential director candidates for consideration by the Governance Committee. These recruiting guidelines are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersindustries.com.

Executive Sessions of the Board and Committees

The Board has a policy requiring the non-management directors, both as to the Board and Committees, to meet regularly in executive session without any management personnel or employee directors present. During 2018, the Board and each Committee met regularly in executive session as follows: Board, eight times; Audit Committee, six times; Compensation Committee, four times; and the Governance Committee, four times.

Presiding Directors

The Chairman of each Committee was selected as the Presiding Director for each Committee executive session.

Anonymous Reporting

The Audit Committee maintains procedures, including a worldwide telephone “hotline,” which allows employees and interested parties to report any financial or other concerns anonymously as further detailed under “Shareholder Communication with Directors” below.

Code of Ethics

We have a “Code of Business Conduct and Ethics,” which incorporates a “Code of Ethical Conduct for the Finance Officers and Finance Department Personnel,” which embodies our commitment to ethical and legal business practices, as well as satisfying the NYSE requirements to implement and maintain such policies. The Board expects all of our officers, directors and other members of our workforce to act ethically at all times. This policy is available on the “Corporate Governance” page accessed from the “Investor Relations” page on our website at www.myersindustries.com.

Annual Board and Committee Self-Assessments

The Board conducts annual self-assessments of the Board, as well as of the Audit Committee, the Compensation Committee, and the Governance Committee, to assist in determining whether the Board and its Committees are functioning effectively.  In early 2016 and 2017, evaluations were conducted by an independent third party through telephone interviews and feedback was provided to the Board, committees and individual directors. In late 2017 through 2018 and in early 2019, the Board conducted self-assessment evaluations with the assistance of outside counsel and reviewed the results as a Board.

Shareholder Communication with Directors

Our Board provides the following methods for interested parties and shareholders to send communications to a director, to a Committee of the Board, to the non-management directors, or to the Board:

 

 

 

 

 

 

6    

---

 

Written Communication

Interested parties may send such communications by e-mail to governance@myersind.com or by mail or courier delivery addressed as follows:

Board of Directors (or Committee Chairman, Director or Non-Management Directors, as the case may be)

c/o Secretary

Myers Industries, Inc.

1293 South Main Street

Akron, Ohio 44301

All communications directed to the “Board of Directors” or to the “Non-Management Directors” will be forwarded unopened or unread to the Chairman of the Governance Committee. The Chairman of the Governance Committee in turn determines whether the communications should be forwarded to the appropriate members of the Board and, if so, forwards them accordingly. For communications addressed to a particular director or the Chairman of a particular Committee of the Board, however, the Secretary will forward those communications, unopened or unread, directly to the person or Committee Chairman in question.

Toll Free Hotline

The Company maintains a “hotline” for receiving, retaining and addressing complaints from any interested party regarding accounting, internal accounting controls and auditing matters, and procedures for the anonymous submission of these concerns.

The hotline is maintained by an independent third party. Interested parties may also use this hotline to communicate with the Board.

Any interested party may contact a director, a Committee of the Board, the non-management directors, or the Board through the toll free hotline at (877) 285-4145.

The hotline is available worldwide, 24 hours a day, seven days a week. Note that all reports made through the hotline are directed to the Chairman of the Audit Committee and the Secretary. We do not permit any retaliation of any kind against any person who submits a complaint or concern under these procedures.

Corporate Responsibility

At Myers Industries, we are committed to helping our customers make the world a safer and more efficient place. We provide bulk packaging that is more easily cleaned than other solutions. We provide stronger, rigid packaging for safe stacking and storage of food and beverage products. We provide a wide selection of storage bins to help our customers organize their workplace and drive efficiency. We also provide world-leading tire pressure monitoring systems so that our end users have the proper and safest pressure in their car tires. Not only do we incorporate health, safety and environmental consciousness into our products, but into all aspects of our operations.

Health and Safety

The health and safety of our employees, our customers and our end-users is at the forefront of each business decision we make.

    7

---

 

Environmental Stewardship

The Company incorporates environmental consciousness into all aspects of our operations by doing, among other things, the following:

Community Involvement

We are committed to being active members of the communities where we operate. By contributing financially and through volunteer work, we strive to help build stronger communities and create a better environment for our employees, our customers and the general public. Our primary focus areas for our charitable contribution program include education and youth development, community and civic development, health and social services and environmental efforts. We offer several programs to encourage employees to positively impact our communities, including a Company matching gift program and Company provided days off for employee volunteering.

Employee Relations and Workplace Environment

We are committed to providing a safe and open work environment where we empower our employees to achieve their full potential, regardless of differences in gender, age, ethnic background, culture, religion, sexual orientation, or physical ability. We strive to provide our employees with financial, personal and physical well-being through our comprehensive and highly competitive pay and benefits packages as well as by providing access to a variety of innovative, flexible and convenient employee health and wellness programs. We also invest in our people through annual employee development and engagement programs, including web-based training solutions.

 

8    

---

 

PROPOSAL NO. 1 — ELECTION OF DIRECTORS

Nominees

Set forth below for each nominee for election as a director is a brief statement, including the age, principal occupation and business experience for at least the past five years, and any directorships held with public companies. The members of the Governance Committee have recommended, and the independent members of the Board of Directors have nominated, the persons listed below as nominees for the Board of Directors.

Each of the below nominees has consented:

If any nominee should become unavailable for any reason, it is intended that votes will be cast for a substitute nominee designated by the Board. There is no reason to believe that the nominees named will be unable to serve if elected. Proxies cannot be voted for a greater number of nominees than the number named in this Proxy Statement.

THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THESE NOMINEES

 

    9

---

 

NOMINEE INFORMATION

 

10    

---

 

 

    11

---

 

12    

---

 

    13

---

 

 

Each of the foregoing nominees is recommended by the Governance Committee. The Governance Committee believes that each of the nominees possesses certain key attributes that the Governance Committee believes to be important for an effective Board.  There are, and during the past ten years there have been, no legal proceedings material to an evaluation of the ability of any director, nominee, or executive officer of Myers Industries to act in such capacity or concerning his or her integrity. There are no family relationships among any of the directors, director nominees and executive officers.

The Board of Directors recommends that you vote “FOR” each of the director nominees listed above.

14    

---

 

Nominating Process

The Governance Committee reviews and evaluates individuals for nomination to stand for election as a director who are recommended to the Governance Committee: in writing by any of our shareholders or by our current or past directors, executive officers, or identified by professional search firms retained by the Governance Committee. The Governance Committee also engaged a professional search firm during 2018 to assist the Committee and the Board in connection with the identification of Mr. De Feo and Ms. Lutey as potential director candidates.

Recruiting Guidelines and Director Qualifications

The Company’s Board Member Recruiting Guidelines outline the process for the Governance Committee to recruit and evaluate potential director candidates. These guidelines are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at www.myersindustries.com. In considering these potential candidates for nomination to stand for election, the Governance Committee will consider:

The Governance Committee endeavors to select nominees that contribute unique skills and professional experiences in order to advance the performance of the Board of Directors and establish a well-rounded Board with diverse views that reflect the interests of our shareholders. The Governance Committee considers diversity as one of a number of factors in identifying nominees for directors; however, there is no formal policy in this regard. The Governance Committee views diversity broadly to include diversity of experience, skills and viewpoint, in addition to traditional concepts of diversity such as race and gender.

When considering an individual candidate’s suitability for the Board, the Governance Committee will evaluate each individual on a case-by-case basis. The Governance Committee does not prescribe minimum qualifications or standards for directors, however, the Governance Committee looks for directors who have personal characteristics, educational backgrounds and relevant experience that would be expected to help further the goals of the Company. In addition, the Governance Committee will review the extent of the candidate’s demonstrated excellence and success in his or her chosen business, profession, or other career and the skills and talents that the candidate would be expected to add to the Board. The Governance Committee may choose, in individual cases, to conduct interviews with the candidate and/or contact references, business associates, other members of boards on which the candidate serves or other appropriate persons to obtain additional information. The Governance Committee will make its determinations on whether to nominate an individual candidate based on the Board’s then-current needs, the merits of that candidate and the qualifications of other available candidates.

Shareholder Recommendation Policy

The Governance Committee will consider individuals for nomination to stand for election as a director who are recommended to it in writing by any of our shareholders that strictly follow the below procedures.  Shareholders making recommendations for directors must:

    15

---

 

Shareholder Nomination Policy

In accordance with our Amended and Restated Code of Regulations, a shareholder may directly nominate a candidate for election as a director of the Company only if written notice of such intention is received by the Secretary not less than sixty (60) days nor more than ninety (90) days prior to the date of such Annual Meeting of shareholders or special meeting of shareholders for the election of directors. In the event that the date of such meeting to elect directors is not publicly disclosed at least seventy (70) days prior to the date of such meeting, written notice of such shareholder’s intent to nominate a candidate must be received by the Secretary not later than the close of business on the tenth (10th) day following the date on which notice of such meeting is first provided to the shareholders. A shareholder wishing to directly nominate an individual to serve as a director must follow the procedure outlined in Article I, Section 12 of our Amended and Restated Code of Regulations, titled “Advance Notice of Director Nomination” and then send a signed letter of nomination to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301. Our Amended and Restated Code of Regulations is available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at: www.myersindustries.com.

Board Committees and Meetings

There were a total of 15 regularly scheduled and special meetings of the Board of Directors in 2018. During 2018, all directors attended at least 75% of the aggregate total number of the meetings of the Board and committees on which they served. In 2018, all of our then current directors and then nominees attended our Annual Meeting.  Although we do not have a formal policy requiring directors to attend the Annual Meeting, our directors are encouraged to attend.

Board Committees

The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Governance Committee.  Set forth below are the current committee memberships.

*Mr. Liebau is an ex officio member of each of the Company’s committees.

 

In addition to the standing Audit Committee, Compensation Committee and Governance Committee, from time to time, the Board has established, and may establish in the future, special committees to address particular matters. In 2018, the Board established a Finance Committee as a temporary Ad-Hoc Board committee to provide oversight and guidance with respect to the Company’s May 2018 public offering of 4,000,000 shares of its common stock. The Finance Committee held 8 meetings in 2018. The Company disbanded the Finance Committee for 2019.

16    

---

 

Audit Committee

The Audit Committee assists our Board in the oversight and integrity of our financial statements, ensures our structure meets legal and regulatory requirements, and oversees our internal auditing functions, controls, and procedures.  The Board has determined that based on their extensive financial background and expertise, F. Jack Liebau, Jr. (ex officio), Lori Lutey, Jane Scaccetti and Robert A. Stefanko meet the criteria of a “financial expert” under SEC rules. None of our Audit Committee members serve on more than two other public company audit committees.

Audit Committee Functions:

See the Audit Committee Report on page 50 for further information regarding the Audit Committee’s activities.

Compensation Committee

The Compensation Committee administers our executive incentive compensation programs and determines, either as a committee or together with the other independent board members, annual base salaries and incentive compensation awards for our executive officers.

Compensation Committee Functions:

    17

---

 

Corporate Governance and Nominating Committee

The Governance Committee assists the Board in developing and implementing corporate governance guidelines, identifying potential director candidates, determining the size and composition of our Board and its committees, and evaluating the overall effectiveness of our Board.

Governance Committee Functions:

Committee Charters and Policies

The Board has adopted written charters for each of the Audit Committee, the Compensation Committee and the Governance Committee. Each committee reviews and evaluates the adequacy of its charter at least annually and recommends any proposed changes to the Board for approval. Each of the written charters and policies of the Audit Committee, the Compensation Committee, and the Governance Committee are available on the “Corporate Governance” page accessed from the “Investor Relations” page of the Company’s website at: www.myersindustries.com.

18    

---

 

Director Compensation

The Company has structured its non-employee director compensation to attract and retain highly qualified directors and to compensate directors for their service, while also aligning the interests of the directors to the long-term interests of the Company’s shareholders.

In addition to the compensation provided to our non-employee directors, which is described below, our Amended and Restated Code of Regulations provides that we will indemnify, to the fullest extent then permitted by law, any of our directors or former directors who was or is a party or is threatened to be made a party to any matter, whether civil or criminal, by reason of the fact that the individual is or was a director of the Company, or serving at our request as a director of another entity. We have entered into indemnity agreements with each of our directors contractually obligating us to provide such protection. We also currently have in effect director and officer insurance coverage.

2018 Non-Employee Director Compensation

The Company’s non-employee director compensation program maintained in 2018 reflected the recommendations of the Compensation Committee’s compensation consultant based on the consultant’s assessment of market competitiveness. The analysis included pay levels and prevalent practices for retainers, fees, equity-based compensation, and stock ownership guidelines, and affirmed that the Company’s non-employee director compensation program is structured in a manner consistent with good governance, continues to be aligned with best practices, and meets the needs of the Board.

 

For 2018, each non-employee director received an annual cash retainer of $55,000 and an equity based award under our 2017 Incentive Stock Plan of Myers Industries, Inc., as Amended and Restated (the “2017 Plan”) of $75.000. Directors who are employees of the Company do not receive any annual retainer. Director cash retainers are paid quarterly in arrears.

 

Until 2018, the equity based award was granted annually in arrears at the end of the non-employee directors’ terms in connection with our Annual Meeting of Shareholders. In 2018, the Compensation Committee recommended, and the Board agreed, to adopt a more customary practice of granting the equity based award at the beginning of the directors’ terms upon election at our Annual Meeting of Shareholders, subject to vesting on the first anniversary of the grant, conditioned on each director’s continued service through the vesting date. Accordingly, in 2018 each non-employee director received an equity based award for their prior year of service which vested immediately, and an equity based award for their upcoming year of service which is subject to vesting at the 2019 Annual Meeting of Shareholders. The target value of each equity based award in 2018 was $75,000, based on the fair market value of our common stock on the grant date. Directors may elect to receive an equivalent number of stock units rather than shares of common stock, with payment to be made with respect to such stock unit when such director ceases to be a member of the Board. For non-employee directors who join the Board between annual meeting dates, the annual equity award is prorated for the portion of the term that such director serves.

 

The cash portions of our non-employee directors’ annual, committee member, and committee chair retainers for 2018 is set forth below. In 2018, the Board established a Finance Committee as a temporary Ad-Hoc Board committee to provide oversight and guidance with respect to the Company’s May 2018 public offering of 4,000,000 shares of its common stock. The Compensation Committee determined, and the Board approved, the annual retainers set forth below for participation in this and other future Ad Hoc committees, pro rated for the duration of service on such committees over a calendar year.

 

The following table shows the compensation paid to our non-employee directors during fiscal year 2018.

    19

---

 

 

NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL YEAR 2018

 

 

20    

---

 

PROPOSAL NO. 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

Myers Industries provides, pursuant to Section 14A of the Securities Exchange Act of 1934, shareholders with the opportunity to cast an annual advisory vote on executive compensation (“Say-on-Pay”). The Compensation Committee has designed an executive compensation program (described further in the Compensation Discussion & Analysis (“CD&A”) and tabular disclosures of this Proxy Statement) designed as follows:

 

 

Result of 2018 Advisory Vote on Executive Compensation

At the 2018 Annual Meeting of shareholders, over 98% of the votes cast on the Say-on-Pay proposal were voted in favor of the compensation of our named executive officers.

    21

---

 

2019 Advisory Vote on Executive Compensation

We are presenting the following proposal, which gives you, as a shareholder, the opportunity to endorse or not endorse our compensation program for our NEOs by voting “FOR” or “AGAINST” the following resolution.

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion & Analysis, compensation tables, and narrative discussion is hereby APPROVED.”

Although the advisory vote is non-binding, the Board values shareholders’ opinions.  The Compensation Committee will review the results of the vote and will consider shareholders’ concerns and take into account the outcome of the vote when considering future decisions concerning our executive compensation program.

Our advisory Say-on-Pay vote occurs annually, and the next advisory vote will occur at the Annual Meeting in 2020.

The Board of Directors recommends that you vote “FOR” Proposal 2 relating to the approval of the Company’s executive compensation

22    

---

 

EXECUTIVE COMPENSATION AND RELATED INFORMATION

Compensation Discussion and Analysis

In this section, we describe the material components of our executive compensation program for our named executive officers (“NEOs”), whose compensation is set forth in the 2018 Summary Compensation Table and other compensation tables contained in this Proxy Statement.

Overview

The main role and responsibilities of the Compensation Committee is to oversee our executive compensation plans and policies, administer our equity plans, and approve all compensation for our NEOs.

Compensation Philosophy

The Compensation Committee believes that the Company’s NEOs should be paid in a manner that attracts the best-available talent, drives performance, encourages an appropriate sensitivity to risk, and encourages and rewards increases in shareholder value. This philosophy is achieved through the Company’s base salary, annual bonus opportunity, long-term incentive plan and other benefits, which are described in greater detail later in this Proxy Statement. Myers Industries’ NEOs are compensated in a manner consistent with the Company’s strategy, competitive practice, sound compensation governance principles, and shareholder interests.

The Compensation Committee’s goals are to:

    23

---

 

Our Strategy and Pay for Performance Approach to Executive Compensation

The Company’s mission is to instill a culture where safety and efficiency are part of every aspect of the business and where employees are empowered to act like owners.  The Company has developed a long-term strategic vision for the Company, guided by three key operating principles:

The Company’s compensation program is designed to compensate the Company’s NEOs in a manner consistent with the Company’s mission and near and long-term strategic vision. The Company’s compensation program seeks to achieve this through the mixture of base pay, short and long-term incentives, and the provision of other benefits.  Base pay and other benefits provide appropriate compensation to attract and retain talent. Short-term incentives are tied to the achievement of Company growth with targets intended to advance the long-term strategic vision of the Company. Long-term incentives, which in 2018 comprised approximately 40-60% of our NEOs’ compensation and which are primarily comprised of equity awards, provide executives with an ownership stake in the Company (emphasizing the “act like owners” principle of the Company) and help drive long-term shareholder value creation. Further, long-term incentive awards are based on performance metrics (EBITDA and free cash flow as a percentage of sales) that support the achievement of the Company’s operating principles.

Performance Highlights and Key Achievements in 2018

In 2018, we continued to execute on our strategy centered on a niche market focus, flexible operations through the use of an asset-light business model, and strong cash flow growth. As a result, we achieved the following:

In addition, we also announced a set of strategic transformation actions for our Distribution segment. The actions are expected to be implemented by the end of 2019 and include a new go-to-market strategy, a contribution margin improvement initiative, and an overhead and logistics optimization plan. The goal of the transformation is to reach a 10% EBITDA margin run-rate in 2020.

24    

---

 

As a result of these business and financial achievements, the highlights of our 2018 NEO compensation program were as follows:

Checklist of Compensation Practices

Our success depends largely on the contributions of motivated, focused and energized executives all working to achieve our strategic objectives. The Compensation Committee and senior management, with assistance from our independent compensation advisor, develop competitive pay programs for our executives and we follow the basic tenets set forth below:

Elements of Compensation for 2018

Our executive compensation program consists of several elements designed to provide an integrated and competitive total pay package: base salary, annual bonus, long-term incentives and benefits.  A majority of the compensation package for NEOs is performance-based and the metrics are focused on paying for growth.

 

 

 

 

 

    25

---

 

Description of Compensation Elements

Our 2018 executive compensation program was designed to reinforce the relationship between the interests of our NEOs and our shareholders and is comprised of three primary components: base pay (salary), annual cash bonus and long-term incentives.  The objectives and key characteristics of each element of our 2018 executive compensation are summarized below:

26    

---

 

NEO Target Compensation Mix

We believe in linking pay for performance.  The following graphs indicate the percentage of each NEO’s total target direct compensation that is attributable to base salary, target bonus, and target long-term incentives. For Mr. Anversa the percentages shown were applicable during his service as Chief Financial Officer through December 11, 2018, for Mr. Brackman the percentages shown are as adjusted effective December 11, 2018 in connection with his appointment as Chief Financial Officer, and for Ms. Horton, the percentages shown are those effective for 2019 -- Ms. Horton did not receive any long-term incentive awards in 2018 due to her employment commencement date of October 8, 2018.

 

 

    27

---

 

How Compensation is Determined

The Company believes its practices are consistent with the practices of a company of its size, reflect best practices regarding the governance of executive pay programs and reflect the executive pay program’s objectives of delivering competitive and appropriate pay aligned with our shareholders’ interests.

The Compensation Committee refers to market data to benchmark and help establish pay opportunities for the NEOs that are competitive for a company of our size in our industry, and for the role and experience of the individual executive. The Compensation Committee generally considers a range around the market median when establishing compensation levels for the NEOs.

As part of its annual review and consideration of the benchmarking process used to assess the Company’s pay levels and pay programs for its executives, the Compensation Committee and its independent compensation consultant conduct an executive compensation market analysis that draws from third-party compensation surveys and publicly available data for a group of peer companies. For fiscal 2018, the compensation peer group was developed with consideration to various quantitative and qualitative criteria, including: (1) companies within 1/3x to 3x the Company’s revenue, (2) companies operating within the Company’s industries and end-markets, and (3) companies with similar focus and/or business complexity. Our Compensation Committee regards the Company’s comparison to these companies as reference points only because finding direct publicly-traded peers within the lower end of our revenue range is difficult and does not seek to establish any specific benchmark in reference to these companies or to require changes in our executive compensation to match changes in these companies’ compensation.

This peer group will continue to be used for executive compensation benchmarking purposes for fiscal year 2019.

$ in millions

 

 

28    

---

 

Consistent with the objectives of our executive pay philosophy of attracting and retaining talented and experienced executives and other key employees, paying for performance, motivating our executive officers to achieve short-term and long-term Company goals that will increase shareholder value and rewarding executives whose knowledge, skills and performance are crucial to our success, actual compensation may be above or below the median for executives in similar roles at companies of similar size and complexity, depending on an evaluation of several factors including, but not limited to, time-in-position, experience, performance, and future potential. We believe this approach is appropriate as it attracts and retains key executives, but does not position our compensation costs out of line with performance.

Compensation Elements in 2018

Base Salary

Base salary provides a fixed element of compensation that competitively rewards our NEOs’ individual skills, competencies, experience and performance. Additionally, the base salaries provide our NEOs with income regardless of the Company’s stock price performance, which acts as a risk-balancing measure in that it helps to avoid incentives to create short-term stock price fluctuations.  Furthermore, it helps mitigate elements beyond the control of the Company, like general economic and stock market conditions unrelated to Company performance.

The Company does not have written employment agreements with our NEOs. The Board and Compensation Committee annually review the performance of the CEO and the CEO’s corporate goals and objectives and, in connection with this review, may recommend a merit-based increase to the CEO’s base salary.  

For the other NEOs, base salary adjustments are based on recommendations by the CEO to the Compensation Committee.  In making such adjustments, the Company’s performance and the individual NEO’s scope of work, performance and competitive benchmarks are considered.  

In 2018, Mr. Brackman was the only NEO who received a base salary increase as shown in the table below. Neither Mr. Banyard nor Mr. Anversa received an increase in base salary in 2018 based on peer benchmarking. Ms. Horton’s base salary was established at $375,000 upon her appointment as Executive Vice President, Chief Legal Officer and Secretary on October 8, 2018.

2018 NEO Base Salary Increases

 

⁽¹⁾ Mr. Brackman’s base salary increase included a 2.8% merit-based increase and a 3.1% adjustment upon the elimination of his eligibility to receive reimbursement for automobile related expenses.

2018 Short-Term Incentives

The Company’s annual incentive plan is a cash incentive plan in which our NEOs, alongside other senior level employees, participate.  The annual incentive plan is intended to reward management primarily for annual business growth that will help us achieve our long-term objectives.

Annual Bonus Performance Metrics

For 2018 annual bonuses, performance was determined using the following metric:

 

    29

---

 

Annual Bonus Performance – 2018 Objectives and Achievements

The Compensation Committee annually approves a target bonus opportunity for each NEO. Annual performance targets were established for achieving operating income growth.  As part of the annual bonus performance goal-setting process, the Board annually reviews and approves management’s business and financial plan for the Company. The minimum and maximum ranges are intended to appropriately reward for results that exceed or fall short of target expectations. Bonuses can range from 0% to 200% of target, depending on actual performance, a practice that is consistent with the range of annual bonus opportunities of other companies our size.

Goals are intended to reward for growth and business performance, consistent with the Company’s strategy, and motivate management with additional compensation opportunities without encouraging excessive risk-taking.  We reward our executives with higher levels of cash compensation for results that substantially exceed target results. Conversely, we pay relatively lower levels of cash compensation for results that fail to meet minimally acceptable performance expectations.  

Our 2018 goals were set first by establishing that growth is a critical element of success.  As a step toward a long term trajectory in growth for 2018, the company set an 8% growth goal target and a 23% growth goal maximum.  To incentivize our team to provide growth, we also set a threshold of 0%, which is above our industry’s historical performance level of -2% at the 25th percentile.

The following table illustrates the Company’s 2018 adjusted operating income growth results and impact on the Company’s annual incentive plan payout:

 

 

For recent years prior to 2018, the Compensation Committee had considered the individual performance of each named executive officer based on achievement against individual performance objectives. For 2018, the Compensation Committee eliminated this individual performance element and based 100% of the annual bonus opportunity on the objective financial metric of operating income growth.

Based on the Compensation Committee’s determination of the results above, the named executive officers earned bonus awards for 2018 as follows:

 

 

30    

---

 

Annual Bonus – 2019 Structure and Objectives

For the 2019 annual bonus plan, the Compensation Committee has determined to retain a single objective financial performance metric based on growth in operating income and has increased the goals for that metric to encourage continued corporate improvement consistent with the Company’s business and financial plans. The plan goals for 2019 are 11.6% growth in operating income at target (100%), 34.0% growth at maximum (200%), and a 0% threshold (for maintaining our 2018 operating income level of $40.4 million). Our goal is to continue to drive above-market levels of growth, and the Company has determined that the targeted growth level exceeds comparable recent performance levels of our peer group. The Compensation Committee has also determined to reintroduce in 2019 a qualitative element for each named executive officer based on personal performance goals established for the executive at a weighting of 20% of each executive’s total annual bonus opportunity. Payouts under this qualitative element will be based on evaluations of individual performance relative to each executive’s qualitative performance goals also within a range of 0% to 200% for this element. The Committee well understands the need to align incentive compensation with objective financial performance, but also believes that including a qualitative element allows both the Committee and executive management to guide and assess continuous improvement in personal performance of the Company’s leadership team.

2018 Long-Term Incentives

The Company’s long-term incentive plan was established to, among other things, encourage management to drive long-term shareholder value and to align management’s interests with shareholders’ interests, emphasizing the “act like owners” principle of the Company. The long-term incentive plan is intended to motivate and reward leaders for increasing shareholder value and returns. The Company believes the Company’s shareholders and employees are both best served by having our NEOs focused on and rewarded based on the achievement of longer-term results of the Company.  To accomplish this, the Board has, over the years, awarded a blend of stock options, service-based restricted stock units, performance restricted stock units, and performance-based long-term cash incentives to NEOs.  In particular, the use of stock options, service-based restricted stock units and performance restricted stock units are designed to meet specific reward objectives:

 

The Company had previously included long-term performance cash awards in addition to the long-term equity awards.  Starting in 2017, the Company stopped granting long-term performance cash awards as part of its long-term incentive plan and moved to a long-term incentive award mix for executive management (including NEOs) solely comprised of equity awards (performance-based restricted stock units, stock options and restricted stock units).  However, certain NEOs may be entitled to payouts on long-term performance cash awards under prior performance periods that have not concluded.

    31

---

 

Long-Term Performance Metrics

Prior to 2017, our long-term incentive performance metrics were based on a single metric. In 2017 the Compensation Committee revised the long-term incentive performance metrics (as described below).  These metrics were adopted to better align with the Company’s strategy, drive consistent performance over time toward achieving objective financial metrics with strong alignment with shareholder value, and to more effectively correlate this performance to compensation. Additionally, these metrics are used by management to assess operating performance of the business.

The following table shows the performance periods for the Company’s long-term incentive programs outstanding as of the end of 2018:

For the 2016-2018 performance cycle, average return on invested capital (“ROIC”) targets were adopted to support a focus on returning greater than our cost of capital over time and to supplement the metrics used in the Company’s annual bonus plan.

For the 2017-2019 and 2018-2020 performance cycles, the Compensation Committee changed the long-term performance metrics from three-year average ROIC to three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales. Cumulative EBITDA acts as a measure of the Company’s operating performance with an emphasis on growth, and relates strongly to shareholder return, creating greater alignment between executive compensation and enhancing shareholder value. Free cash flow is defined as cash flow from continuing operations less capital expenditures. Free cash flow as a percentage of sales recognizes the importance of the efficient use of cash to the Company’s ability to fund ongoing investments in our business while incentivizing management to create a business culture that generates strong cash flow year after year.  We also believe that cash flow is the strongest measurement of success and has a strong correlation over the long-term to shareholder value.

2018 Long-Term Incentive Mix

Once target values are developed, awards for each long-term element are based on an individual’s position, experience, future potential, organizational level, scope of responsibilities, their ability to impact results, and any special recruiting and retention needs. For the NEOs, the Compensation Committee aimed to emphasize performance-based elements (long-term performance stock and cash incentives) and options over service-based elements (restricted stock units).  

32    

---

 

For the Company’s NEOs, the following mix of target long-term incentives were set for 2018:

 

Long-Term Incentive Performance-Objectives and Achievements for the Three-Year Period Ended in 2018

For the three-year period ending in 2018, as described above, the Company established three-year ROIC performance objectives ranging from 8.7% (minimum) to 18.7% (maximum), with target results achieved at 13.7%.  The method for determining the corresponding awards are as follows:

Target ROIC performance reflected the Compensation Committee’s view of an appropriate benchmark based on the Company budget presented to the Committee by management. The Compensation Committee set a reasonable target in the preceding years to challenge management to continuously strive for and drive greater shareholder return.

For the three-year period ending in 2018, the Company achieved a three-year average ROIC of 10.7%, resulting in a settlement percentage of 70% of target. This applies to the cash-based performance award granted to Mr. Brackman in 2016, and a performance share award granted to Mr. Banyard in 2016.

As noted above, for the 2017-2019 and 2018-2020 performance cycles, performance will be determined using three-year cumulative EBITDA (50% weighting) and three-year total free cash flow as a percentage of sales (50% weighting).  Additionally, the long-term incentive award mix will be comprised solely of equity and will no longer include long-term cash incentives.

    33

---

 

Long-Term Incentive Plan – 2019 Structure and Objectives

For 2019, as the third year of the three-year cycle begun in 2017, the Compensation Committee has determined to continue the general structure of our long-term incentive plan consisting of 50% performance-based restricted stock units, with equally weighted metrics of three-year cumulative EBITDA and three-year total free cash flow as a percentage of sales, 30% stock options, and 20% time-based restricted stock units subject to pro rata three year vesting. The threshold, target and maximum goals established for the 2019 performance based awards exceed the levels of our 2017 and 2018 awards and will be disclosed upon the completion of the three-year performance period ending at December 31, 2021. These rigorous goals are intended to continue to drive the Company’s continued growth and long-term financial success. The Compensation Committee will continue to consider, with input from Semler-Brossy, alternative performance metrics which align with shareholder interests for the performance-based component of the Company’s long-term incentive plan for years after 2019.

Other Benefits

NEOs also participate in broad-based benefit plans that are available to all employees. These benefits are not tied to individual or Company performance, which is the same approach used for other employees. Moreover, changes to executives’ benefits reflect the changes to the benefits of other employees.

The Company’s NEOs participate in the following broad-based benefit plans that provide basic health, life and income security:

The Company provides no executive perquisites.

34    

---

 

Other Compensation Policies and Practices

Risk Assessment of Compensation Practices

In the design and approval of the Company’s executive compensation program, the Compensation Committee considers risks that may be inherent in such program. The Compensation Committee has designed the Company’s compensation program to guard against excessive risk taking.  The following are some features of the compensation program that are designed to help the Company manage compensation-related risk:

    35

---

 

As a result, the Compensation Committee believes that the design of the Company’s compensation programs does not encourage our employees to take unnecessary or excessive risks that could harm the long‑term value of Myers Industries.

Compensation Decision-Making

Timeline and Components of Compensation Decision-Making

The Compensation Committee oversees our executive compensation plans and policies, administers our equity plans, and approves all compensation for our NEOs. An example of the Compensation Committee’s annual agenda is set forth below:

36    

---

 

Parties Involved in Compensation Decision-Making

    37

---

 

Compensation Committee Interlocks and Insider Participation

At the end of fiscal year 2018, the following directors were members of the Compensation Committee: Sarah R. Coffin, Ronald DeFeo, William A. Foley, Bruce M. Lisman, and Robert A. Stefanko. Chairman F. Jack Liebau, Jr. participates on the Compensation Committee in an ex officio capacity. None of the Compensation Committee’s members have at any time been an officer or employee of the Company. In the past fiscal year, none of our NEOs have served as a member of the board of directors or compensation committee of any entity that has one or more NEOs serving on the Company’s Board or Compensation Committee.

Compensation Committee Report on Executive Compensation

The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act.

The Compensation Committee, in the performance of its duties and responsibilities, has reviewed and discussed with management the information provided under the section titled “Compensation Discussion and Analysis.” Based on discussions with management and our review of the “Compensation Discussion and Analysis” disclosure, we have recommended to the Board that the “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The foregoing report has been furnished by the current members of the Compensation Committee, being:

Sarah R. Coffin, Chair and Presiding Director, Ronald DeFeo, William A. Foley, F. Jack Liebau, Jr. (ex officio), Bruce M. Lisman and Robert A. Stefanko.

Summary of Cash and Certain Other Compensation

The following table summarizes the compensation paid by us to our named executive officers, as determined in accordance with SEC rules, for the years ended December 31, 2018, 2017 and 2016.

38    

---

 

SUMMARY COMPENSATION TABLE

 

    39

---

 

Grants of Plan Based Awards

The following table contains information concerning the grants of plan based awards to the NEOs under the 2017 Incentive Stock Plan of Myers Industries, Inc., as Amended and Restated (the “2017 Plan”). The actual value and gains, if any, on an option exercise are dependent upon the future performance of our common stock and overall market conditions. The option awards and unvested portion of stock awards identified in the table below are also reported in the Outstanding Equity Awards at Fiscal 2018 Year-End table below.

Grants of Plan Based Awards During Fiscal Year 2018

 

40    

---

 

Outstanding Equity Awards at Fiscal Year End

The following table shows all outstanding equity awards held by the NEOs at the end of fiscal year 2018 that have not been exercised or that have not vested. Certain of the awards identified in the table below are also reported in the “Grants of Plan Based Awards During Fiscal Year 2018” table above.

Outstanding Equity Awards at Fiscal 2018 Year-End

 

 

    41

---

 

Option Exercises and Stock Vested for Fiscal Year End 2018

The following table shows the options that were exercised and the restricted stock grants that vested for the NEOs during fiscal year 2018.

42    

---

 

Employment Arrangements Including Change in Control

⁽¹⁾ With respect to Ms. Horton these benefits apply only in the event of her termination without cause or for good reason within 180 days following a change in control.

    43

---

 

Summary of Potential Termination Payments and Benefits

The following table summarizes the value of the termination payments and benefits that each of our NEOs would receive if he had terminated employment on December 31, 2018 under the circumstances shown.

Policies and Procedures with Respect to Related Party Transactions

The Board is committed to upholding the highest legal and ethical conduct in fulfilling its responsibilities and recognizes that related party transactions can present a heightened risk of potential or actual conflicts of interest. Accordingly, it is our preference, as a general rule, to avoid related party transactions. No related party transactions occurred during fiscal year 2018.

Our Governance Committee reviews all relationships and transactions in which we and our directors, nominees for director and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. In addition, under Code of Business Conduct and Ethics, our Audit Committee is responsible for reviewing and investigating any matters pertaining to our ethical codes of conduct, including conflicts of interest.

44    

---

 

CEO Pay Ratio

As a result of rules adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC has adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (in the Company’s case, the CEO).  In determining the median employee, a listing of all employees (the Company’s full employee population, but excluding the CEO) as of December 17, 2018 was prepared and the Company applied a “consistently applied compensation measure” to determine the median employee.  For the consistently applied compensation measure, the Company looked to annual base salaries of employees for 2018.  We used an annual base salary as our consistently applied compensation measure as it represents the primary compensation component paid to all of our employees.  Non-U.S. employees were included in the determination of the median employee compensation, with the salary amounts of such non-U.S. employees converted to U.S. dollars using the applicable exchange rate as of December 17, 2018.  

Mr. Banyard, the Company’s CEO, had 2018 annual total compensation of $4,076,952, as reflected in the Summary Compensation Table included in this Proxy Statement.  The annual total compensation for 2018 of our median employee (other than the CEO) was calculated in accordance with the requirements of the Summary Compensation Table and determined to be $39,810.  Mr. Banyard’s annual total compensation was approximately 102.41 times that of our median employee in 2018.

 

The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

    45

---

 

Security Ownership of Certain Beneficial Owners and Management

The following table shows the number of shares of our common stock beneficially owned as of March 11, 2019 (unless otherwise indicated) by:

A beneficial owner of stock is a person who has sole or shared voting power, meaning the power to control voting decisions, or sole or shared investment power, meaning the power to cause the sale of the stock. All individuals listed in the table have sole voting and investment power over the shares unless otherwise noted. The Company had no preferred stock issued or outstanding.

 

 

46    

---

 

(14)  The table does not reflect 2,123 restricted stock units awarded to this director for a pro rata portion of the 2018-2019 term in connection with her appointment to the Board until the 2019 Annual Meeting of Shareholders, at which time her awards will vest.

(16) The table does not reflect (i) 19,563 share awards that have been deferred by this director that will be converted into common stock upon the lapse of the deferral period, or (ii) 3,081 restricted stock units awarded to this director on April 25, 2018, with respect to his current service commencing on that date until the 2019 Annual Meeting of Shareholders, at which time his awards will vest.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires Myers Industries’ directors, officers and persons who own more than ten percent of its common stock (“Section 16 Filers”) to file reports of ownership and changes in ownership with the SEC and to furnish Myers Industries with copies of all such forms they file. These reports can be viewed on the SEC’s website at www.sec.gov. For the year ended December 31, 2018, based solely on the review of copies of reports furnished to us or written representations that no reports were required, we believe that all Section 16(a) filing requirements were met in the last fiscal year by our Section 16 Filers.

    47

---

 

PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm.  In accordance with these responsibilities, the Audit Committee appointed Ernst & Young LLP (“EY”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ended December 31, 2018. Additional information regarding the services provided to the Company by EY during 2018 is set forth below, under the section titled “Matters Relating to the Independent Registered Public Accounting Firm.”

In selecting EY as the Company’s independent registered public accounting firm, the Audit Committee considered a variety of factors, including:

In determining whether to reappoint EY as the Company’s independent registered public accounting firm for the year ending December 31, 2019, the Audit Committee again took those factors into consideration along with its evaluation of the past performance of EY and EY’s familiarity with the Company’s business and internal control over financial reporting. EY’s audit report appears in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

In accordance with SEC rules and EY policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to our company. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of the lead audit partner under this rotation policy involves discussions with EY regarding qualified audit experience and ability to devote the time necessary to serve as lead audit partner. The current EY lead audit partner at EY for the Company was appointed in 2017.

The Audit Committee believes that the continued retention of EY as our independent registered public accounting firm is in the best interest of the Company and our shareholders and, although shareholder ratification is not required under the laws of the State of Ohio, we are asking shareholders to ratify the selection of EY as our independent registered public accounting firm for 2019, in order to provide a means by which our shareholders may communicate their opinions to the Audit Committee. If our shareholders do not ratify the appointment of EY, the Audit Committee will reconsider the appointment, but is not obligated to change the appointment, and may for other reasons be unable to make another appointment.

The Board of Directors recommends that you vote “FOR” Proposal 3

relating to the ratification of the appointment of Ernst & Young LLP

48    

---

 

Matters Relating to the Independent Registered Public Accounting Firm

EY Representatives at Annual Meeting

EY audited the books and records of the Company for the years ended December 31, 2018 and 2017. Representatives of EY are expected to be available at the Annual Meeting to respond to appropriate questions and will be given the opportunity to make a statement if they desire to do so.

Fees

A description of the fees billed to the Company by EY for the years ended December 31, 2018 and 2017 is set forth in the table below.

EY was first retained by the Audit Committee in 2011. The Audit Committee reviewed the non-audit services provided by EY during the year ended December 31, 2018, and determined that the provision of such non-audit services was compatible with maintaining its independence (see “Audit Committee Report” on page 50).

 

 

Pre-Approval Policy

The Audit Committee’s Pre-Approval Policy requires the pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific fee range or budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this policy, and the fees for the services performed to date. During 2018, all services were pre-approved by the Audit Committee in accordance with the policy. The Pre-Approval Policy is available on the “Corporate Governance” page accessed from the “Investor Relations” page of our website at: www.myersindustries.com.

    49

---

 

Audit Committee Report

The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act or Exchange Act.

The Audit Committee, which is composed of five independent directors, is responsible for assisting the Board in fulfilling its oversight responsibilities pertaining to the accounting, auditing and financial reporting processes of the Company. The duties and responsibilities of the Audit Committee are set forth in the Audit Committee Charter, which is published on the Company’s website (www.myersindustries.com) on the “Corporate Governance” page under the Investor Relations section (and can be found directly here: http://s2.q4cdn.com/555961355/files/doc_downloads/corp-gov/2017/Audit-Committee-Charter-Amended-11-2-2017.pdf).

Management is responsible for establishing and maintaining the Company’s internal control over financial reporting and for preparing financial statements in accordance with accounting principles generally accepted in the United States of America. The Audit Committee is directly responsible for the appointment, oversight, compensation and retention of EY, the independent registered public accounting firm for the Company since 2011. For additional information regarding the Audit Committee’s assessment of EY and tenure of EY as the Company’s independent registered public accounting firm, see “Proposal No. 3 – Ratification of Appointment of Independent Registered Public Accounting Firm beginning on page 48. EY is responsible for performing an independent audit of the Company’s annual financial statements and expressing an opinion on:

Each member of the Audit Committee is financially literate and independent as defined under the Board of Directors Independence Criteria policy and the independence standards set by the NYSE for both directors and audit committee members.  The Board has identified each of F. Jack Liebau, Jr. (ex officio), Lori Lutey, Jane Scaccetti and Robert A. Stefanko as an “audit committee financial expert.”

The Audit Committee’s responsibility is one of oversight. Members of the Audit Committee rely on the information provided and the representations made to them by management, which has primary responsibility for establishing and maintaining appropriate internal control over financial reporting, and for the Company’s financial statements and reports; and by the independent registered public accounting firm, which is responsible for performing an audit in accordance with Standards of the Public Company Accounting Oversight Board — United States (“PCAOB”) and expressing an opinion on:

In the performance of our duties we have:

50    

---

 

 

Based on the reviews and discussions referred to above, and exercising our business judgment, we recommended to the Board that the financial statements referred to above be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. We have selected EY as the Company’s independent registered public accounting firm for fiscal 2019, and have approved submitting the selection of the independent registered public accounting firm for ratification by the shareholders.

The foregoing report has been furnished by the current members of the Audit Committee, being:

Robert A. Stefanko, Chair and Presiding Director, Sarah R. Coffin, F. Jack Liebau, Jr. (ex officio), Lori Lutey, and Jane Scaccetti

    51

---

 

General Information About the Meeting and Voting

 

52    

---

 

 

    53

---

 

Executive Officers of the Company

Disclosure regarding the executive officers of the Company is set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC under the heading “Directors and Executive Officers of the Registrant,” which is incorporated into this Proxy Statement by reference. This Annual Report will be delivered to our shareholders with the Proxy Statement. Copies of our filings with the SEC, including the Annual Report, are available to any shareholder through the SEC’s website at www.sec.gov or in person at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC 20549. Information regarding operations of the Public Reference Room may also be obtained by calling the SEC at 1-800-SEC-0330. Shareholders may also access our SEC filings free of charge on our own website at www.myersindustries.com. The content of our website is available for informational purposes only, and is not incorporated by reference into this Proxy Statement.

Shareholder Proposals for Inclusion in Proxy Statement

Any shareholder who intends to present a proposal at the Company’s next Annual Meeting to be held in April 2020 must deliver a signed letter of proposal to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301:

In accordance with our Amended and Restated Code of Regulations, a shareholder may submit notice of a shareholder proposal that it intends to raise at our Annual Meeting (and not desiring to be included in the Company’s proxy statement) only if advance written notice of such intention is received by the Secretary not less than sixty (60) days nor more than ninety (90) days prior to the date of such Annual Meeting of shareholders. In the event that the date of such meeting is not publicly disclosed at least seventy (70) days prior to the date of such meeting, written notice of such shareholder’s intent to submit a proposal must be received by the Secretary not later than the close of business on the tenth (10th) day following the date on which notice of such meeting is first provided to the shareholders. A shareholder wishing to submit a shareholder proposal must follow the procedure outlined in Article I, Section 11 of our Amended and Restated Code of Regulations, titled “Advance Notice of Shareholder Proposals” and then send a signed letter of proposal to the following address: Corporate Governance and Nominating Committee, c/o Secretary, Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301. The Company disclosed the date of the 2019 Annual Meeting on February 12, 2019, and received no proposals satisfying the requirements of Rule 14a-8 under the Exchange Act or the Company’s Amended and Restated Code of Regulations. The Company intends to hold its 2020 Annual Meeting of Shareholders on April 22, 2020.

The submission of such a notice does not ensure that a proposal can be raised at our Annual Meeting.

Incorporation by Reference

The Compensation Committee Report and the Audit Committee Report (including reference to the independence of the Audit Committee members) are not deemed filed with the SEC or subject to the liabilities of Section 18 of the Exchange Act, and shall not be deemed incorporated by reference into any prior or future filings made by us under the Securities Act, or the Exchange Act, except to the extent that we specifically incorporate such information by reference. The section of this proxy entitled “Compensation Discussion and Analysis” is specifically incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

54    

---

 

Cost of Proxy Solicitation

The accompanying proxy is solicited by and on behalf of the Board, whose notice of meeting is attached to this Proxy Statement, and the entire cost of such solicitation will be borne by Myers Industries. In addition to the use of the mail, proxies may be solicited by personal interview and telephone by directors, officers and employees of Myers Industries. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of stock held of record by such persons, and Myers Industries will reimburse them for reasonable out-of-pocket expenses incurred by them in connection therewith.

Copy of the Form 10-K

Although a copy of the Annual Report on Form 10-K is provided to you at the time of delivery of the definitive Proxy Statement, we will mail without charge, upon written request, a copy of our Annual Report on Form 10-K for the year ended December 31, 2018, including the consolidated financial statements, schedules and list of exhibits, and any particular exhibit specifically requested. Requests should be sent to: Myers Industries, Inc., 1293 South Main Street, Akron, Ohio 44301, Attn: Investor Relations. The Annual Report on Form 10-K is also available at www.myersindustries.com and at the SEC’s website at www.sec.gov.

Notice Regarding Delivery of Security Holder Documents

The SEC now permits companies to send a single set of annual disclosure documents to any household at which two or more shareholders reside, unless contrary instructions have been received, but only if the Company provides advance notice and follows certain procedures. In such cases, such shareholders continue to receive a separate notice of the meeting and proxy card. This “householding” process reduces the volume of duplicate information and reduces printing and mailing expenses. We have not instituted householding for shareholders of record; however, a number of brokerage firms may have instituted householding for beneficial owners of the Company’s shares of common stock held through such brokerage firms. If your family has multiple accounts holding shares of common stock of the Company, you already may have received householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of the annual disclosure documents. The broker will arrange for delivery of a separate copy of this Proxy Statement or our Annual Report promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.

Trademark

Myers Industries, Inc.® is a registered trademark of the Company.

 

    55

---

 

 

VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com  MYERS INDUSTRIES, INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. P.O. BOX 1342 BRENTWOOD, NY 11717 Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.  During The Meeting - Go to www.virtualshareholdermeeting.com/MYE2019  You may attend the Annual Meeting of Shareholders via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.  VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.  VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.   TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:  E59658-P18485  KEEPTHISPORTIONFORYOURRECORDS  THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.  DETACHANDRETURNTHISPORTIONONLY  MYERS INDUSTRIES, INC.  For Withhold For All The Board of Directors recommends you vote  FOR All All Except all of the following:   Nominees:   01) R. DAVID BANYARD 06) BRUCE M. USMAN 02) SARAH R. COFFIN 07) LORI LUTEY 03) RONALD M. DE FEO 08) JANE SCACCETTI 04) WILLIAM A. FOLEY 09) ROBERTA. STEFANKO 05) F. JACK LIEBAU, JR.    To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. Election of Directors  The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain  Advisory approval of the compensation of the named executive officers  To ratify the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2019  NOTE: Such other business as may properly come before the meeting or any adjournment thereof.  For address change/comments, mark here. (see reverse for instructions)  Please indicate if you plan to attend this meeting.□□ Yes No  Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.  Signature [PLEASE SIGN WITHIN BOX]   Date Signature (Joint Owners) Date

 

---

 

 

 

---

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com MYERS INDUSTRIES, INC. Annual Meeting of Shareholders April 24, 2019 9:00 AM EDT This Proxy is solicited on behalf of The Board of Director The undersigned hereby appoints Kevin Brackman and Andrean Horton, or either of them, with full power of substitution, as proxies, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of MYERS INDUSTRIES, INC. that the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held at 9:00 AM EDT on April 24, 2019, at the Louis S. Myers Training Center, 1554 South Main Street, Akron, Ohio 44301, and any adjournment or postponement thereof. IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE DIRECTOR NOMINEES LISTED ON THE REVERSE SIDE OF THIS PROXY CARD AND FOR PR0POSALS 2 AND 3. Address Changes/Comments (if you noted any Address Changes/Comments above, please mark corresponding box on the reverse side) Continued and to be signed on reverse side E59659-P18485