Business Context and Reporting Period
This Form 8-K Current Report was filed by SiteOne Landscape Supply, Inc. on February 11, 2021. The filing discloses the grant of performance stock units (PSUs) to certain officers under the Company's 2020 Omnibus Equity Incentive Plan, effective February 11, 2021.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity figures. The document focuses exclusively on executive compensation arrangements.
Material Changes
The primary material event reported is the approval and grant of PSUs to five named executive officers. The awards are contingent on performance over a three-year period (January 4, 2021, to December 31, 2023) and continued employment.
Guidance, Outlook, and Management Commentary
The filing details the performance criteria for the PSUs, which are based on:
- Relative EBTA Growth: Pre-tax income plus amortization growth relative to a select peer group (excluding non-recurring items).
- ROIC Modifier: A return on invested capital modifier adjusts the payout.
Payout Structure:
- Maximum (200% of target): Achieved if Relative EBTA Growth is >= 75th percentile and Avg. ROIC is > 20%.
- Target (100% of target): Achieved if Relative EBTA Growth is at the 50th percentile and Avg. ROIC is 12%-20%.
- Threshold (50% of target): Achieved if Relative EBTA Growth is at the 25th percentile and Avg. ROIC is < 12%.
- Zero Payout: If Relative EBTA Growth is below the 25th percentile.
Constraints:
- Payout is capped at 100% of target if absolute EBTA growth is negative.
- Total payout is capped at 200% of target.
- Interpolation applies for performance between levels.
Award Allocation:
| Executive / Title | Number of PSUs Awarded |
|---|---|
| Doug Black, Chief Executive Officer | 6,018 |
| Briley Brisendine, Executive Vice President, General Counsel and Secretary | 1,253 |
| John Guthrie, Executive Vice President, Chief Financial Officer and Assistant Secretary | 1,153 |
| Scott Salmon, Executive Vice President of Strategy and Development | 1,103 |
| Greg Weller, Executive Vice President of Operations | 1,003 |
Important Facts for Investors to Verify
- Verify the specific peer group selected for the Relative EBTA Growth calculation, as this directly impacts vesting.
- Confirm the Company's absolute EBTA growth trajectory to assess the risk of the 100% payout cap triggered by negative growth.
- Review the full text of the Performance Stock Unit Award Agreement (Exhibit 10.1) for specific definitions of "non-recurring items" and ROIC calculation methodologies.
- Monitor executive retention, as vesting is contingent upon continued employment.