DEF 14A

DEF 14A 1 d116097ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(RULE 14a-101)

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant ☒ Filed by a party other than the Registrant ☐

Check the appropriate box:


☐		Preliminary proxy statement

☐		Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))

☒		Definitive proxy statement

☐		Definitive additional materials

☐		Soliciting material pursuant to Sec. 240.14a-12

LOGO

CECO ENVIRONMENTAL CORP.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

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LOGO

April 15, 2021

Dear Stockholder:

We are pleased to invite you to attend CECO Environmental Corp.’s (“CECO” or the “Company”) Annual Meeting of Stockholders at 8:00 a.m. Central Time on Tuesday, May 25, 2021 to be held solely through virtual participation via webcast at www.virtualshareholdermeeting.com/CECE2021 (the “Annual Meeting”). We continue to embrace the latest technology to provide expanded access, improved communication and cost savings. We believe hosting a virtual meeting enables increased stockholder attendance and participation from locations around the world. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. Further information on attending, voting, and submitting questions at the Annual Meeting are included in the accompanying Notice of Annual Meeting and Proxy Statement.

Before outlining some of the agenda items for this year’s Annual Meeting, we want to mention the extraordinary efforts of team CECO during 2020. The COVID-19 pandemic has been a challenging crisis throughout the world, and our investors, employees and communities have been greatly impacted by the pandemic and related mitigation efforts. Working together, our Board of Directors (“Board”), management team and hard-working employees ensured the health and safety of our employees while successfully managing the business. These efforts included guidance and input from a task force of Board members and the Company’s executive management that included creating a comprehensive plan with discrete actions to mitigate the effects of the pandemic. As part of CECO’s proactive company-wide cost-reduction measures in response to the economic pressures brought on by the pandemic, many of our employees took voluntary pay reductions and, effective from April 1, 2020 through December 31, 2020, our non-management directors reduced their cash compensation for their service on our Board by 50% and our Board Chairman waived 100% of his cash compensation during this time. Also, during 2020, a search committee of the non-executive members of the Board established and undertook an international search for our new Chief Executive Officer and, over the course of five months, identified and, working with the CECO senior management team, successfully onboarded Todd Gleason, a seasoned leader with deep industry experience poised to drive transformational change. We are beyond proud of the way CECO handled and emerged from 2020.

Our Annual Meeting agenda again will include an advisory “Say-on-Pay” vote to approve the compensation paid to our named executive officers. At last year’s meeting, our Say-on-Pay proposal received over 99% approval, based on votes cast for and against, or approximately 89% approval of all shares represented at the meeting. During 2020, we continued our focus on aligning our executive compensation programs with the interests of our stockholders. We also continued to reach out to our largest stockholders for their feedback.

Our agenda this year also includes a proposal to approve the CECO Environmental Corp. 2021 Equity and Incentive Compensation Plan (the “2021 Plan”). If approved, the 2021 Plan will continue to afford the Compensation Committee the ability to design compensatory awards that are responsive to the Company’s needs and includes authorization for a variety of awards designed to advance the interests and long-term success of the Company by encouraging stock ownership among officers, other employees of the Company and its subsidiaries, and non-employee directors of the Company.

Your vote is important to us, regardless of whether or not you plan to participate virtually during the Annual Meeting. We have included voting instructions within these materials and request that you vote as soon as possible.

On behalf of our entire Board of Directors, we thank you for your continued ownership and support of CECO Environmental Corp. and our mission to help companies across the globe grow their business with safe, clean and more efficient solutions that help protect our shared environment.

Sincerely,

Jason DeZwirek

Chairman of the Board

LOGO

Todd Gleason

Chief Executive Officer

LOGO

THESE PROXY SOLICITATION MATERIALS AND CECO ENVIRONMENTAL CORP.’S ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2020, INCLUDING THE RELATED FINANCIAL STATEMENTS, WERE FIRST MADE AVAILABLE TO STOCKHOLDERS ON OR ABOUT APRIL 15, 2021.


		2021 Proxy Statement •

CECO Environmental Corp.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS



Date:		Tuesday, May 25, 2021

Time:		8:00 a.m., Central Time

Place:		www.virtualshareholdermeeting.com/CECE2021

Record Date:		Stockholders of record at the close of business on March 26, 2021 are entitled to vote at the Annual Meeting or any adjournment or postponement of the meeting.


Agenda:		The Company recommends that you vote as follows

Proposal 1: To elect eight directors for a one-year term.		FOR each director nominee.

Proposal 2: To approve, on an advisory basis, the compensation paid to our named executive officers.		FOR the approval, on an advisory basis, of the compensation paid to our named executive officers.

Proposal 3: To approve the CECO Environmental Corp. 2021 Equity and Incentive Compensation Plan.		FOR the approval of the CECO Environmental Corp. 2021 Equity and Incentive Compensation Plan.

Proposal 4: To ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for 2021.		FOR the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for 2021.

We will also transact such other business as may properly come before the Annual Meeting or any adjournment or postponement of the meeting.

We are taking advantage of the Securities and Exchange Commission rules allowing us to furnish proxy materials to stockholders on the internet. We believe that this method of delivery is more efficient and reduces the environmental impact of our Annual Meeting. Accordingly, we are mailing to stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review our proxy materials, and to vote online. The proxy materials consist of: (1) this Notice of 2021 Annual Meeting of Stockholders; (2) the Proxy Statement for the Annual Meeting (the “Proxy Statement”); and (3) the CECO Environmental Corp. 2020 Annual Report to Stockholders. If you would like to receive a paper copy of our proxy materials, please follow the instructions for requesting these materials in the Notice of Internet Availability of Proxy Materials or in the Proxy Statement.

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of CECO Environmental Corp., a Delaware corporation (“we,” “us,” “our,” or the “Company”), of proxies to be voted at the Annual Meeting to be held solely through virtual participation via webcast at 8:00 a.m., Central Time, on May 25, 2021, or any postponement or adjournment thereof.

For more information about the Annual Meeting, please refer to the “Additional Information About the Annual Meeting” section on the first page of this Notice.

By Order of the Board of Directors

Jason DeZwirek

Chairman of the Board

April 15, 2021


		2021 Proxy Statement •

TABLE OF CONTENTS


	Page

INFORMATION ABOUT THE ANNUAL MEETING		1

PROPOSAL 1 ELECTION OF DIRECTORS		2
Directors and Nominees		2
Our Board and Its Committees		7
2020 Director Compensation		11
Delinquent Section 16(a) Reports		13
Certain Transactions		13
COVID-19 Response and Employee Safety		14

EXECUTIVE COMPENSATION		15
Compensation Discussion and Analysis		15
Compensation Committee Report		26
2020 Summary Compensation Table		27
2020 Grants of Plan-Based Awards		28
2020 Outstanding Equity Awards at Fiscal Year-End Table		29
2020 Option Exercises and Stock Vested Table		30
Potential Payments Upon Termination or Change in Control		30
Chief Executive Officer Pay Ratio		34

PROPOSAL 2 ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		35

PROPOSAL 3 APPROVAL OF THE CECO ENVIRONMENTAL CORP. 2021 EQUITY AND INCENTIVE COMPENSATION PLAN		36
AUDIT MATTERS		49
Audit Committee Report		49
Independent Registered Public Accounting Firm Fees		49

PROPOSAL 4 RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		51

OTHER INFORMATION		52
Security Ownership of Certain Beneficial Owners		52

INFORMATION FOR THIS ANNUAL MEETING		54

INFORMATION FOR OUR 2022 ANNUAL MEETING		58

OTHER MATTERS		59

Appendices
CECO ENVIRONMENTAL CORP. 2021 EQUITY AND INCENTIVE COMPENSATION PLAN		I-1
RELATIVE TSR PEER COMPANIES		II-1


		2021 Proxy Statement •

Information About the Annual Meeting

Attendance and Participation

Our Annual Meeting will be conducted on the internet via webcast only. Stockholders attending the Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. Stockholders will be able to attend and participate online and submit questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/CECE2021. Stockholders who would like to attend and participate in the Annual Meeting will need the 16-digit control number included on their proxy card or voting instruction form. The Annual Meeting will begin promptly at 8:00 a.m. CT. We encourage you to access the Annual Meeting prior to the start time. Online access will begin at 7:45 a.m. CT.

The Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Stockholders should ensure that they have a strong internet connection if they intend to attend and/or participate in the Annual Meeting. Attendees should allow plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Annual Meeting.

Questions and Information Accessibility

Stockholders may submit questions during the Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CECE2021, typing your question into the “Ask a Question” field, and clicking “Submit.”

Questions pertinent to the Annual Meeting will be answered during the Annual Meeting, subject to time constraints. Any such questions that cannot be answered during the Annual Meeting due to time constraints will be posted and answered on our Investor Relations website, www.cecoenviro.com/Investor, as soon as practicable after the Annual Meeting.

Additional information regarding the ability of stockholders to ask questions during the Annual Meeting, related rules of conduct and other materials for the Annual Meeting, including the list of our stockholders of record, will be available at www.virtualshareholdermeeting.com/CECE2021. In addition, the list of stockholders entitled to vote at the meeting will be available during the Annual Meeting for inspection by stockholders for any legally valid purpose related to the Annual Meeting at www.virtualshareholdermeeting.com/CECE2021 using your control number. Stockholders may view the list for such purposes 10 days prior to the meeting by contacting Investor.Relations@OneCECO.com.

Technical Difficulties

Information regarding matters addressing technical and logistical issues, including technical support during the Annual Meeting, will be available at www.virtualshareholdermeeting.com/CECE2021 starting at 7:45 a.m. CT on May 25, 2021 through the conclusion of the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 25, 2021

This Proxy Statement and the CECO Environmental Corp. 2020 Annual Report to Stockholders, which includes our Annual Report on Form 10-K, are available at www.cecoenviro.com/investors.aspx. The content on any website referred to in this Proxy Statement is not incorporated by reference into this Proxy Statement.

We will provide a copy of our proxy materials for the Annual Meeting to any stockholder without charge upon written request addressed to CECO Environmental Corp., to the attention of the Corporate Secretary, 14651 N. Dallas Parkway, Suite 500, Dallas, Texas 75254 or by phone at (214) 357-6181. Any stockholder may also receive a copy of our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC, without exhibits, upon written request to the address above.


		2021 Proxy Statement • 1

PROPOSAL 1

ELECTION OF DIRECTORS

Directors and Nominees

Our Board of Directors (“Board”) consists of eight directors, each serving a one-year term. Upon the recommendation of the Nominations and Governance Committee of the Board, our Board has proposed the re-election of each of our existing directors to serve as directors until the next annual meeting or until their successors have been duly elected and qualified. If, for any reason, any nominee should become unable or unwilling to serve as a director, our Board may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the persons named in the proxy card may exercise their discretion to vote your shares for the substitute nominee. The following table lists all of the director nominees.

Name

Director
Since

Independent

Audit
Committee

Compensation
Committee

  Nominations &
  Governance
  Committee

Jason DeZwirek

Chairman of the Board

1994

Todd Gleason

Chief Executive Officer

2020

Jonathan Pollack

2011

Eric M. Goldberg

2013

David B. Liner

2017

Chair

Claudio A. Mannarino

2015

Chair

Munish Nanda

2018

Valerie Gentile Sachs

2016

Chair

Our Board believes that collectively our directors provide the diversity of experience and skills necessary for a well-functioning board. Our Board values highly the ability of individual directors to contribute to a constructive board environment and believes that our current directors perform in such a manner. Below is a description of each director’s background, professional experience, qualifications and skills.


2 • CECO Environmental


		JASON DEZWIREK (50) Mr. DeZwirek has been our Chairman of the Board since May 2013. Previously, he served as Secretary of our Company from February 1998 until September 2013. In 1999, Mr. DeZwirek founded Kaboose Inc., a family focused online media company. Mr. DeZwirek served as the Chairman and CEO of Kaboose Inc. until its sale to Disney Online (a subsidiary of The Walt Disney Company) and Barclays Private Equity Limited in June 2009. Mr. DeZwirek also previously served as a director and corporate secretary of API Technologies Corp. (NASDAQ:ATNY), a prime contractor in electronics, highly engineered systems, secure communications and electronic components and sub-systems for the defense and aerospace industries, from November 2006 through January 2011. Mr. DeZwirek also is and has been involved in private investment activities. With his experience at Kaboose Inc., Mr. DeZwirek brings broad executive expertise, including operations, technology, management and strategy. Having served as a director of our Company for over 20 years, he also has a breadth of knowledge of the overall issues our Company faces.

		TODD GLEASON (49) Mr. Gleason has served as a director and Chief Executive Officer since July 2020. Mr. Gleason most recently served, from April 2015 to July 2020, as President and Chief Executive Officer of Scientific Analytics Inc., a predictive analytic technologies and services company. Prior to that position, Mr. Gleason served from June 2007 to March 2015 in a number of senior officer and executive positions for Pentair plc, a water treatment company. During his tenure with Pentair, Mr. Gleason served as Senior Vice President and Corporate Officer from January 2013 to March 2015, President, Integration and Standardization from January 2010 to January 2013, and Vice President, Global Growth and Investor Relations from June 2007 to January 2010. Before joining Pentair, Mr. Gleason served as Vice President, Strategy and Investor Relations for American Standard Companies Inc. (later renamed to Trane Inc. prior to its acquisition by Ingersoll-Rand Company Limited), a global, diversified manufacturing company, and in a number of different roles (including as Chief Financial Officer, Honeywell Process Solutions) at Honeywell International Inc., a diversified technology and manufacturing company. Mr. Gleason’s qualifications to sit on the Board include his financial and business background, as well as his extensive executive and leadership experience.


		2021 Proxy Statement • 3


		JONATHAN POLLACK (49) Mr. Pollack is currently the Chief Financial Officer of AcuityAds Holdings Inc. (TSX:AT), a global advertising technology company, and has served as a Director since May 2011. Mr. Pollack has been the President of JMP Fam Holdings, Inc. since 2000. Previously, he served as Executive Vice President of API Technologies Corp. (NASDAQ:ATNY) from September 2009 and as a director from June 2007 until, in each case, January 2011. Mr. Pollack also served on its audit committee and compensation committee from January 2007 through September 2009. From March 2005 through its sale in June 2009, he served as the Chief Financial Officer and Corporate Secretary of Kaboose Inc. (TSX:KAB). Prior thereto, he worked in investment banking in New York. He was also a director of Pinetree Capital Ltd. (TSX:PNP) from February 2014 until April 2015 and a Director of Aeterna Zentaris Inc. (NASDAQ: AEZS) from May 2018 until August 2019. Mr. Pollack received a Master of Science degree in Finance from the London School of Economics and a Bachelor of Commerce degree from McGill University. He sits on the boards of several philanthropic organizations in Toronto, Ontario, including the Mt. Sinai Hospital Foundation, the Crescent School Foundation and the Sterling Hall School Foundation. Mr. Pollack brings over 25 years of financial, strategic and merger and acquisitions expertise to our Board, which will assist our Board as we continue to expand our business. He also brings experience serving on the board of directors of other public companies.

		ERIC M. GOLDBERG (51) Mr. Goldberg has served as the President of All American Events & Tours, a Pittsburgh, Pennsylvania-based sports incentive company, specializing in providing unique and customized experiences for retail and corporate clients since 1996. Since 2007, he has also been a principal of GKK Capital, a commercial real estate development company. From 1996 until 1999, Mr. Goldberg was the general counsel for Native American Nations, a company focusing on developing business strategies for Native American tribes throughout the United States. From 2010 until 2011, he served as a director of API Technologies Corp. (NASDAQ:ATNY). Mr. Goldberg received a Bachelor of Science degree in Management from the Tulane University A. B. Freeman School of Business and a Juris Doctorate from the University of Miami School of Law. Mr. Goldberg is licensed to practice law in the State of Florida. Mr. Goldberg brings over 20 years of sales, marketing, operations, strategic planning and legal expertise to our Board, which assists our Board as we continue to expand our business.


4 • CECO Environmental


		DAVID B. LINER (65) Mr. Liner served as General Counsel, Corporate Secretary and Chief Compliance Officer of Roper Technologies, Inc. (NYSE: ROP) from August 2005 until June 2016 and as a Vice President until his retirement in January 2018. Roper Technologies, a component of the S&P 500, designs and develops software and engineered products and solutions for healthcare, transportation, food, energy, water, education and other niche markets worldwide. Mr. Liner helped execute Roper Technologies’ acquisition program, deploying over $5 billion in assets and acquiring over 40 businesses. Prior to joining Roper Technologies, Mr. Liner served as a corporate partner in the Detroit office of Dykema Gossett, a national law firm, where he headed the firm’s automotive industry practice and founded the firm’s China practice. He had previously been the Vice President, General Counsel and Assistant Secretary of Metaldyne Corporation, formerly MascoTech, Inc. (NYSE: MSX), a manufacturer of products for the global transportation industry. Mr. Liner earned a bachelor’s degree from the University of Michigan and his Juris Doctor from Wayne State University Law School. Mr. Liner brings extensive legal, transactional and corporate governance expertise to our Board that will assist us as we continue to expand our business and create stockholder value. Having built and led a global corporate compliance and risk program as the General Counsel of a public company, he has developed expertise in areas of governance and compliance which will provide strong support and additional depth to our Board and to the committees on which he may serve. Mr. Liner also brings international experience to our Board, including past international board service.

		CLAUDIO A. MANNARINO (50) Mr. Mannarino is the President of Sette CS Inc., a management consulting firm. From June 2014 to November 2015, he served as the Senior Vice President and Chief Financial Officer of API Technologies Corp. (NASDAQ: ATNY), a leading provider of RF/microwave, microelectronics and security technologies for critical and high-reliability applications. He also served as API’s Senior Vice President, Finance from January 2010 to June 2014 and as its Chief Financial Officer and Vice President of Finance from November 2006 to January 2010. Prior to that, he served in various, senior-level management roles throughout API’s finance organization. Before joining API, Mr. Mannarino served as Controller for two divisions of Transcontinental, Inc., a Canadian publicly traded company on the Toronto Stock Exchange. Mr. Mannarino holds a Bachelor of Commerce degree from the University of Ottawa and attained his Certified Management Accountant certification in 1996. Mr. Mannarino brings over 20 years of financial, strategic and merger and acquisition expertise to our Board, which will assist us as we expand our business.


		2021 Proxy Statement • 5


		MUNISH NANDA (56) Mr. Nanda has served as the President, Americas & Europe of Watts Water Technologies, Inc. (NYSE: WTS), a global manufacturer of plumbing, heating and water quality products, since February 2016. He joined Watts Water in April 2015 as President, Americas. Mr. Nanda previously served as President of Control Technologies for ITT Corporation from April 2011 to March 2015 and as Group Vice President of ITT Corporation’s Fluid and Motion Control Group from April 2008 to April 2011. ITT Corporation is a diversified manufacturer of highly engineered critical components and customized technology solutions for the energy, transportation and industrial markets. Prior to joining ITT Corporation, Mr. Nanda held several operating leadership and general management positions with Thermo Fisher Scientific Corporation and Honeywell International Inc. Mr. Nanda graduated with a Bachelor of Engineering degree in Production Engineering with Honors from Regional Engineering College Tiruchy in India and earned an MBA from Northern Arizona University. Mr. Nanda brings over 25 years of experience working in senior operational management roles for global industrial manufacturers, which will assist us as we continue to grow and streamline our business. Mr. Nanda also brings extensive experience in the fluid handling, energy and niche manufacturing industries.

		VALERIE GENTILE SACHS (65) Ms. Sachs served as the Vice President, General Counsel and Corporate Secretary of OM Group, Inc. (NYSE: OMG), a global developer and manufacturer of magnetic technologies, battery technologies and engineered specialty chemicals, from September 2005 through the completion of its sale in November 2015 to Apollo Global Management. She had executive responsibility for OM Group’s world-wide Legal, Internal Audit and Environment, Health & Safety operations. She also served on the boards of directors and acted as Managing Director of numerous U.S. and non-U.S. entities affiliated with OM Group. Prior to joining OM Group, Ms. Sachs served as Executive Vice President, General Counsel and Secretary of Jo-Ann Stores, Inc. (NYSE: JAS), a US-based retailer. She had previously served as General Counsel of Marconi plc (LSE and NASDAQ: MONI), a London-based, global communications and information technology company. Ms. Sachs has been a trustee of a regional humane society and is active with a number of charitable organizations fighting hunger and meeting basic human needs. She earned her bachelor’s degree (B.L.S.—Chemistry) with honors from Bowling Green State University and her Juris Doctor from Case Western Reserve University School of Law, where she was a member of Law Review and a DeWitt Scholar. Ms. Sachs brings a combination of legal expertise, extensive executive management and leadership experience to our Board. She has been an integral part of executive management teams that have effectively worked through strategic transitions, integrations and restructurings and is very familiar with international operating challenges and opportunities. As the General Counsel of three public companies, she has developed expertise in the areas of governance, compliance and executive compensation, which will provide strong support and additional depth to our Board and to the committees on which she may serve.

In order to be elected, a nominee must receive a plurality of the votes cast at the meeting in person or by proxy.

LOGO


6 • CECO Environmental

Our Board and Its Committees

Our Board held 14 meetings during 2020. Our Board’s policy regarding director attendance at the Annual Meeting is that directors are encouraged to attend, and that we will make all appropriate arrangements for directors to attend. All of the directors attended our 2020 Annual Meeting of Stockholders. During 2020, each director attended 100% of the aggregate number of meetings of our Board and the committees on which they served in 2020.

Our Board has three standing committees: the Audit Committee, the Compensation Committee and the Nominations and Governance Committee. Each of these committees operates under a written charter, which can be found on our website www.cecoenviro.com on the Investor Relations, Corporate Governance section.

Director Independence

All of our directors who served during 2020, other than Messrs. DeZwirek and Gleason, qualify as independent directors in accordance with the listing requirements of The NASDAQ Stock Market LLC (the “NASDAQ”). The NASDAQ independence definition includes a series of objective tests, including that the director is not an employee of our Company and has not engaged in various types of business dealings with us. In addition, our Board has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Mr. Pollack controls JMP Fam Holdings, Inc. (“JMP”), a firm that provided consulting services to the Company. During 2020 or any twelve-month period within the last three fiscal years, fees paid by the Company to JMP did not exceed $100,000. Because of the passage of time and the immaterial amounts paid to JMP, in April 2021, the Board determined that Mr. Pollack was an independent director.

Audit Committee

Members:

Claudio A. Mannarino, Chair

David B. Liner

Munish Nanda

The Audit Committee held five meetings in 2020.

Our Board has determined that Mr. Mannarino qualifies as an audit committee financial expert as defined in Item 407(d)(5) of Regulation S-K of the Securities Exchange Act of 1934 (the “Exchange Act”), and that each of our Audit Committee members is independent under the applicable NASDAQ listing requirements and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”).

The primary purpose of our Audit Committee is to assist our Board in its general oversight of the integrity of our Company’s financial statements and of our Company’s compliance with legal and regulatory requirements. Its responsibilities include overseeing and reviewing:

• the financial reports and other financial information;

• our Company’s system of internal accounting and financial controls;

• the engagement of our independent auditor; and

• the annual independent audit of our financial statements.

Our Audit Committee also reviews and approves the services of our independent registered public accounting firm and evaluates transactions where the potential for a conflict of interest exists.


		2021 Proxy Statement • 7

Compensation Committee

Members:

Valerie Gentile Sachs, Chair

Eric M. Goldberg

David B. Liner

The Compensation Committee held six meetings in 2020.

Each member of our Compensation Committee is independent under the applicable NASDAQ listing requirements. Our Compensation Committee oversees our compensation programs, with particular attention to the compensation for our Chief Executive Officer (“CEO”) and the other executive officers. Its primary purpose is to assist our Board in matters related to compensation of our executive officers. Its responsibilities include:

• reviewing and approving corporate goals and objectives for the compensation of our CEO, evaluating our CEO’s performance in light of those goals and objectives, and determining and recommending to our Board for approval, our CEO’s compensation level based on this evaluation; and

• approving or making recommendations to our Board with respect to the compensation of our other executive officers.

Our Compensation Committee also administers our equity programs, including our 2017 Equity and Incentive Compensation Plan and 2020 Employee Stock Purchase Plan, and will administer our 2021 Equity and Incentive Compensation Plan if Proposal 3 is approved by our stockholders. Our Compensation Committee reports to our Board on all compensation matters regarding our directors, executive officers, and other key salaried employees. Our Compensation Committee annually reviews and approves the compensation for our directors, executive officers and other key salaried employees. It does not generally delegate any of its authority to other persons, although it has the power to delegate certain authority as permitted by applicable law and the NASDAQ listing standards to subcommittees, our Board or management. Our Compensation Committee’s processes and procedures for the consideration and determination of executive compensation, including the role of executive officers and the Compensation Committee’s independent consultant in determining or recommending the amount or form of compensation of our named executive officers, are discussed in the “Compensation Discussion and Analysis” section below.

Nominations and Governance Committee

Members:

David B. Liner, Chair

Claudio A. Mannarino

Valerie Gentile Sachs

The Nominations and Governance Committee held three meetings in 2020.

Each member of our Nominations and Governance Committee is an independent director under the applicable NASDAQ listing requirements. Its primary purposes are:

• to identify individuals qualified to become Board members;

• to make recommendations to our Board regarding Board and committee composition;

• to develop and recommend to our Board corporate governance principles applicable to our Company; and

• to oversee the evaluation of our Board and management.

Our Nominations and Governance Committee identifies individuals qualified to become Board members and makes recommendations to our Board regarding Board and committee composition, consistent with the Director Nomination Policy described below. It also recommends Board members for committee membership. A copy of the Director Nomination Policy can be found on our website www.cecoenviro.com on the Investor Relations, Corporate Governance section.


8 • CECO Environmental

Our Bylaws provide stockholders the ability to nominate candidates for election as directors at the annual meeting of stockholders. Stockholders who wish to nominate a candidate should submit the candidate’s name and the other information required by our Bylaws to our Corporate Secretary and follow the procedures stated in our Bylaws. These procedures are summarized below in “Information for Our 2022 Annual Meeting.”

In addition to the formal procedure set forth in our Bylaws for the nomination of directors by stockholders, our Nominations and Governance Committee has adopted a policy to consider stockholder recommendations of candidates for nomination to our Board that stockholders submit outside the process in the Company’s Bylaws discussed above. Our Nominations and Governance Committee will consider director candidates recommended by stockholders for inclusion on the slate of directors recommended to our Board on the same basis as candidates recommended by other sources, including evaluating the candidate against the standards and qualifications set out in our Director Nomination Policy, as well as any other criteria approved by our Board from time to time. Our Nominations and Governance Committee will determine whether to interview any candidate. Recommendations must include the candidate’s name, contact information and a statement of the candidate’s background and qualifications, and must be mailed to the following address: CECO Environmental Corp., 14651 N. Dallas Parkway, Suite 500, Dallas, Texas 75254, Attention: Corporate Secretary.

Board Leadership Structure and Risk Oversight

The positions of Chairman of the Board and Chief Executive Officer are held by different individuals: Mr. DeZwirek serves as Chairman and Mr. Gleason serves as Chief Executive Officer. Our Bylaws provide that any two or more offices may be held by the same person, but our Board believes that the current separation of the offices of Chief Executive Officer and Chairman reflects the difference in the roles of those positions. Our Chief Executive Officer is responsible for determining the strategic direction and the day-to-day leadership of our Company. Our Chairman facilitates and provides leadership to our Board and executive management and ensures they are focused on key issues. The Chairman of the Board shares a common understanding of the organization with the executive management and provides focus to ensure our Board is effective in its task of setting and implementing the Company’s strategy.

The separation of the roles of Chief Executive Officer and Chairman and the independence of a majority of our Board help ensure independent oversight of management. All of our directors, other than the Chairman, Mr. DeZwirek and the Chief Executive Officer, Mr. Gleason qualify as independent under the applicable NASDAQ listing requirements. The standing committees — the Audit Committee, the Compensation Committee and the Nominations and Governance Committee — are comprised entirely of independent directors and provide independent oversight of management. Additionally, the non-management directors regularly meet in executive session, and the independent directors meet in executive session, as required.

Our management is responsible for identifying, assessing and managing the material risks facing our Company. Our Board performs an important role in the review and oversight of these risks and generally oversees our Company’s risk management practices and processes, with a strong emphasis on financial controls. Our Board has delegated primary oversight of the management of (i) financial and accounting risks and related-party transaction risks to our Audit Committee, (ii) compensation risk to our Compensation Committee, and (iii) corporate governance risk to our Nominations and Governance Committee. To the extent that the Audit Committee, Compensation Committee or the Nominations and Governance Committee identifies any material risks or related issues, the risks or issues are addressed with the full Board.


		2021 Proxy Statement • 9

Director Qualifications and Diversity

Our Board believes that the Board, as a whole, should have a diverse range of characteristics and skills to function at an optimal level in exercising its oversight over our Company. When evaluating a person for nomination for election to our Board, the qualifications and skills considered by our Board, including our Nominations and Governance Committee, include:

• Whether the person will qualify as a director who is “independent” under applicable laws and regulations, and whether the person is qualified under applicable laws and regulations to serve as a director of our Company;

• Whether the person is willing to serve as a director, and willing to commit the time necessary for the performance of the duties of a director;

• The contribution that the person can make to our Board, with consideration being given to the person’s business experience, education and skills, conflicts of interest, the interplay of the candidate’s experience with that of other Board members, and such other factors as our Board may consider relevant; and

• The character and integrity of the person.

Our Board applies a broad concept of diversity, which includes all of the criteria listed in the paragraph below together with other factors such as the nominee’s experience and leadership abilities. When our Board seeks new director candidates to add to our Board or to replace directors who have resigned or recommends the re-election of incumbent directors, our Board selects director nominees on the basis of all of these criteria with the goal of finding the best match for our Board.

The Board is also committed to having a membership that reflects a diversity of gender, race, ethnicity, age and background. This commitment is demonstrated by the fact that the Board currently includes one female director and one director who is ethnically diverse. Our directors currently range in age from 49 to 65.

With respect to skill set diversity, our Board seeks to have directors and nominees composed of qualified professionals with a broad range of skills. Our current directors have a broad range of skills, expertise and diversity, some of which have been described in the director profiles. Diversity helps to create a balanced Board to effectively develop strategies for our Company’s growth.

Code of Business Conduct and Ethics and Corporate Governance Guidelines

We have adopted a Code of Business Conduct and Ethics that applies to our directors and employees (including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions) and Corporate Governance Guidelines applicable to our directors to assist our Board in following corporate guidelines that serve the best interests of our Company and stockholders. The Code of Business Conduct and Ethics and Corporate Governance Guidelines are posted on our website www.cecoenviro.com on the Investor Relations, Corporate Governance section. We will post on our website any amendments to or waivers of the Code of Business Conduct and Ethics for executive officers or directors in accordance with applicable laws and regulations. The information on or accessible through our website is not a part of or incorporated by reference into this Proxy Statement.

Insider Trading Policy

Our Insider Trading Policy, which applies to all of our directors, officers, employees and agents, expressly prohibits buying or selling securities while in possession of material, nonpublic information about us or another company and from disclosing such information on to others who might purchase or sell securities on the basis of such information. We consider short term or speculative transactions by our personnel involving our securities to be inappropriate. We also discourage our personnel from buying or selling our securities in margin accounts. Our Insider Trading Policy expressly prohibits the following activities with respect to our securities: short sales, including short sales against the box, buying or selling puts or calls and frequent trading to take advantage of fluctuations in stock price. The restrictions under our Insider Trading Policy also apply to immediate family and household members of our directors, officers, employees and agents.


10 • CECO Environmental

Our Insider Trading Policy prohibits all members of our Board and all officers and employees of the Company and its subsidiaries from engaging in hedging or monetization transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds, or through other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Company securities. The policy further prohibits such persons from pledging, hypothecating or otherwise using the Company’s securities as collateral for a loan or other form of indebtedness.

Stockholder Communications with Directors

Our Board has adopted a process by which stockholders may communicate with our Board for matters other than director nominations. Stockholders who would like to communicate with our Board or a committee of our Board should send the communication to: Chairman of the Board, CECO Environmental Corp., 2300 Yonge Street, Suite 1710, Toronto, Ontario M4P 1E4.

Our Chairman of the Board, Mr. DeZwirek, will forward such communications to our Board at or prior to its next regular meeting. Stockholders wishing to communicate only with the independent directors can address their communications to “Independent Directors, c/o Chairman of the Board” at the same address above. These communications will be forwarded to the independent directors at or prior to the next meeting of the independent directors.

Our Board or the independent directors will determine, in their respective sole discretion, the method by which any such communications will be reviewed and considered.

2020 Director Compensation

In the past, our non-management directors received the following compensation for their service on our Board:


Director Service	Compensation ($)
Annual cash retainer, paid quarterly:		45,000
Annual equity retainer:		70,000
Annual Committee Chair supplement:
Audit Committee		30,000
Compensation Committee		15,000
Nomination and Corporate Governance Committee		15,000

Our Compensation Committee has determined that granting restricted stock units (“RSUs”) in lieu of cash meeting payments simplifies the directors’ compensation while promoting the ownership of our common stock. Accordingly, in June 2020 we granted to each non-management director RSUs covering 11,667 shares of our common stock. The RSUs generally vest on the one-year anniversary of the grant and are settled in shares of Company common stock. We also reimburse or pay our Board members their reasonable travel and out-of-pocket expenses to attend meetings. Our non-management directors are eligible to participate in the Company’s U.S. health plan with 100% of the premium payable by the enrolled director.


		2021 Proxy Statement • 11

In lieu of paying an annual cash retainer or fees to Mr. DeZwirek for his service as Chairman of the Board, we pay consulting fees to Icarus Investments Corp. (“Icarus”). As part of CECO’s proactive cost reduction measures in response to the economic pressures brought on by the COVID-19 pandemic, effective from April 1, 2020 through December 31, 2020, our non-management directors reduced their cash compensation for their service on our Board by 50% and Mr. DeZwirek waived 100% of his cash compensation during this time. The following table reflects the 2020 compensation paid to each of our non-management directors. The compensation for Todd Gleason and Dennis Sadlowski, who also served on the Board during 2020, is reported in the 2020 Summary Compensation Table, and such individuals received no additional compensation for their service as directors.


Name	Fees Earned or Paid in Cash ($)		Stock Awards¹ ($)		All Other Compensation ($)		Total ($)
Jason DeZwirek		—		70,002		60,000 ²		130,002
Eric M. Goldberg		33,750		70,002		—		103,752
David B. Liner		45,000		70,002		—		115,002
Claudio A. Mannarino		56,250		70,002		—		126,252
Munish Nanda		33,750		70,002		—		103,752
Jonathan Pollack		33,750		70,002		52,000 ³		155,752
Valerie Gentile Sachs		45,000		70,002		—		115,002

(1)

This column represents the grant date fair value of RSU awards calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), disregarding estimated forfeitures, rather than amounts realized by the named individuals. Assumptions used in calculating these amounts are included in Note 9 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. The stock awards shown in the table above represent the RSU awards granted to our directors in 2020. The table below shows the aggregate number of unvested RSUs and unexercised options held by each of our non-management directors as of December 31, 2020.


Name	RSUs (#)		Stock Options (#)
Jason DeZwirek		11,667		—
Eric M. Goldberg		11,667		15,000
David B. Liner		11,667		—
Claudio A. Mannarino		11,667		—
Munish Nanda		11,667		—
Jonathan Pollack		11,667		38,000
Valerie Gentile Sachs		11,667		—

(2)	This amount reflects the fees we paid to Icarus, a company controlled by Mr. DeZwirek, pursuant to which Icarus provides us management consulting services. This agreement ceased on December 31, 2020 as Mr. DeZwirek will be paid directly as a director and chairman starting January 1, 2021.

(3)

This amount reflects the fees we paid to JMP Fam Holdings, Inc., a company controlled by Mr. Pollack, for consulting services performed by Mr. Pollack during 2020. Pursuant to an oral arrangement, JMP Fam Holdings provided us with strategic advisory services, including the evaluation of financing options, capital structure and potential acquisitions. This agreement ceased on December 31, 2020.

Our Board has implemented mandatory stock ownership guidelines for non-management directors to further align the interests of non-management directors and stockholders. Each non-management director is required to own shares of our common stock having a value equal to five times the non-management director’s regular annual cash retainer. As of December 31, 2020, all non-management directors met the stock ownership requirement. For purposes of this requirement, a non-management director’s stock ownership includes all shares of our common stock owned by the non-management director outright or held in trust for the director and the director’s immediate family, plus a non-management director’s restricted stock units. The value of a share is measured as the greater of the then current market price or the closing price of a share of our common stock on the acquisition or grant date.


12 • CECO Environmental

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors and executive officers and persons beneficially owning more than ten percent of a class of our equity securities to file certain reports of beneficial ownership and changes in beneficial ownership with the SEC. Based solely on our review of Section 16(a) reports and any written representation made to us, the Company believes that all such required filings for 2020 were made in a timely manner, except that each of Messrs. Sadlowski, Eckl and Gohr filed one Form 4 late during June 2020 reporting one exempt acquisition of service-based RSUs.

Certain Transactions

Since January 1, 2020, except as described below, we have not been a party to any transaction or series of similar transactions in which the amount involved exceeded or will exceed $120,000 and in which any then-director, executive officer, holder of more than 5% of our common stock, or any member of the immediate family of any of the foregoing, had or will have a direct or indirect material interest. Our Audit Committee is responsible for reviewing and approving or ratifying any related party transactions in accordance with the Audit Committee Charter, and it has approved the transaction described below.

Effective April 5, 2021, Ramesh Nuggihalli joined us as Chief Operating Officer of the Company. Mr.Nuggihalli provided consulting services regarding the Company’s business strategy since November 2020. Mr. Nuggihalli received a total of $128,250 in consulting fees. Upon appointment as Chief Operating Officer, the consulting arrangement was terminated and Mr. Nuggihalli is compensated as an employee of the Company and in accordance with our executive compensation program.


		2021 Proxy Statement • 13

COVID-19 Response and Employee Safety

The COVID-19 pandemic has been a challenging crisis throughout the world. Similar to the Company’s investors, our employees have felt the impact of the illness, death and social disruption caused by the COVID-19 pandemic, which has also had a significant impact on our business and our operations. Our employees, their families, and local communities have felt the effects of the COVID-19 pandemic and government mitigation efforts.

In 2020, a committee was formed consisting of Board members and members of the Company’s executive management that focused on the impacts of the COVID-19 pandemic (“COVID-19 Committee”). The COVID-19 Committee met frequently in 2020 to assess the pandemic’s impact on our employees, business, and operations and to provided key inputs as management navigated managing the business in a challenging environment. Despite the challenges of the COVID-19 pandemic, our management team and employees have worked diligently to continue to successfully manage the business.

At CECO, the health and safety of our employees is one of our highest priorities. Through our environmental, health and safety program, we implement policies and training programs, as well as perform self-audits, to help ensure our colleagues leave the workplace safely every day. To better understand employee safety at the site level, we have implemented safety committees and developed safety scorecards to share best practices among sites. We currently share scorecard information monthly to foster visibility, accountability and commitment across our workplace, communicating and celebrating successful results across the enterprise. In addition to lagging indicators, such as injury performance, the scorecards highlight leading indicators such as safety observations and near-misses, as well as other proactive actions taken at each site to ensure worker safety. For the year ended December 31, 2020, CECO’s domestic Total Recordable Incident Rate (“TRIR”) was 1.9% as compared to our benchmark industry average TRIR of 4.5%.

Our safety focus is also evident in our response to the COVID-19 pandemic around the globe. We implemented applicable government, federal and state policies, in addition to the following policies and procedures:

• added work from home flexibility for office job roles;

• deployed Microsoft Teams world-wide to enable collaboration while helping to ensure team safety;

• implemented an Emergency Paid Pandemic Leave policy to encourage those who are sick to stay home;

• increased cleaning protocols across all locations;

• initiated regular communication regarding impacts of the COVID-19 pandemic, including health and safety protocols and procedures;

• implemented a self-certification health assessment for all employees, partners and vendors at our manufacturing facilities (where allowed by local law);

• established new physical distancing procedures for employees who need to be onsite;

• provided additional personal protective equipment and cleaning supplies;

• implemented safety protocols to address actual and suspected COVID-19 cases and potential exposure;

• prohibited all non-essential domestic and international business travel for all employees;

• required masks to be worn in all locations where allowed by local law;

• required on site visitors to complete a health and travel declaration; and

• for on site visitors traveling by plane, required a negative Polymerase Chain Reaction test before entering the facility.

CECO manufactures products and performs services deemed essential to critical infrastructure, including manufacturing, and energy, and, as a result, our facilities have continued operating during the COVID-19 pandemic. Importantly, during 2020, our experience and continuing focus on workplace safety have enabled us to preserve business continuity without sacrificing our commitment to keeping our colleagues and workplace visitors safe during the COVID-19 pandemic.


14 • CECO Environmental

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our executive compensation program is designed to attract, motivate, retain and reward executive talent to achieve our business goals, with the ultimate goal of increasing stockholder value. This Compensation Discussion and Analysis provides information about our compensation objectives and policies for our Chief Executive Officer and the other individuals included in the “2020 Summary Compensation Table,” who are referred to as our “named executive officers.” This Compensation Discussion and Analysis puts in perspective the information set forth in the “2020 Summary Compensation Table” that follows in this Proxy Statement.

For purposes of this proxy statement, the following individuals are considered our 2020 “named executive officers” (or “NEOs”).



Named Executive Officer		Title
Todd Gleason⁽¹⁾		Chief Executive Officer (“CEO”)
Matthew Eckl		Chief Financial Officer (“CFO”)
Paul Gohr		Chief Accounting Officer (“CAO”)
Dennis Sadlowski⁽¹⁾		Former CEO

(1)	Effective July 5, 2020, Mr. Sadlowski ceased serving as Chief Executive Officer and a member of the Board, and, effective July 6, 2020, Mr. Gleason commenced serving as Chief Executive Officer and a member of the Board.


		2021 Proxy Statement • 15

Compensation Highlights

• During 2020, our Compensation Committee continued to administer executive compensation programs that it considers to be competitive in the market for talent and aligned with industry best practices and the long-term interests of our stockholders.

• Our annual performance-based cash incentive compensation program is typically designed to reward NEOs for achievement of certain pre-established, short-term financial or operational goals. However, in March 2020, in light of changing market conditions and the uncertain impact of the COVID-19 pandemic, the Compensation Committee postponed approval of annual cash incentive awards to our NEOs. In April 2020, the Compensation Committee determined that the best way to recognize strong performance throughout the pandemic, ensure sustained engagement and drive key business results was to provide an annual cash bonus to our NEOs on a discretionary basis for 2020.

• Performance-based restricted stock units (“PRSUs”) that were granted in 2020 under our long-term equity incentive program require attainment of relative total shareholder return (“Relative TSR”) goals during the 2020-2022 performance period for all or a portion of those PRSUs to vest. We also granted time-based restricted stock units (“RSUs”) and (for Mr. Gleason only) stock options with an exercise price equal to the market value of our stock on the grant date and stock options with an exercise price that reflected 100% appreciation in the market value of our stock on the grant date. These RSUs and stock options vest ratably over four years.

• For 2020, 70% of the total target equity compensation for Mr. Sadlowski (who served as CEO in the first half of 2020) was designed to be performance-based.

• In February 2020, the non-executive members of the Board established a CEO search committee (the “Search Committee”) to undertake a search for a new CEO. The Search Committee was comprised of five non-executive members of the Board. An international executive search firm was retained by the Search Committee and a broad global search was commenced. Over the course of five months, a diverse pool of candidates was identified, reviewed, and interviewed. In June of 2020, Todd Gleason was identified as the top candidate for the role of CECO CEO. The Search Committee worked with the Compensation Committee’s independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), to analyze the competitive market for CEO compensation and assist the Compensation Committee in the design of a heavily performance weighted compensation package. Mr. Gleason accepted a compensation package that has a significantly lower base wage than his predecessor but provides the potential for greater longer-term value to him through equity grants, the majority of which we view as performance-based.

• Our stock ownership guidelines apply to all executive officers, including our named executive officers. Our CEO is required to own our stock having a value equal to five times his base salary. Our CFO is required to own our stock having a value equal to three times his base salary, and our other executive officers (currently, only Mr. Gohr) are required to own our stock having values equal to one times their base salaries.

• As noted above, our Compensation Committee has engaged an independent executive compensation consultant to provide advice on compensation matters. In 2019, we engaged our independent compensation consultant to conduct a market analysis of Mr. Sadlowski’s, Mr. Eckl’s, and Mr. Gohr’s total cash compensation and equity incentives against the general market and our peer group. In 2020, we had this market analysis updated for NEOs and director compensation. As described above, the independent compensation consultant also advised the Compensation Committee with respect to the compensation and offered to Mr. Gleason under the terms of his employment agreement. We have determined that our named executive officers are fairly compensated.

• Our clawback policy permits us to recover excess incentive-based compensation paid to an executive officer if we are required to restate our financial statements due to material noncompliance with the financial reporting requirements under United States federal securities laws and such executive officer willfully committed an act of fraud, dishonesty or recklessness in the performance of his duties that contributed to the noncompliance or benefitted materially as a result of receiving excess incentive-based compensation.

• We generally use tally sheets when determining executive compensation.

• We provide limited perquisites.


16 • CECO Environmental

Stockholder Engagement

At our 2020 Annual Meeting of Stockholders, our advisory “Say-on-Pay” proposal to approve the compensation we paid to our named executive officers received over 99% approval, based on total votes cast for and against, or approximately 89% approval of all shares represented at the meeting. Our Compensation Committee believes that this strong approval reflects our continued efforts to improve our compensation practices. During 2020, we had direct contact and discussions with stockholders representing approximately 57% of our outstanding shares up from approximately 55% in 2019. Mr. Gleason, Mr. Sadlowski and Mr. Eckl as well as some of our directors participated in these discussions and provided stockholder feedback to our Board as a whole. Our Compensation Committee considered the 2020 Say-on-Pay voting results at its subsequent meetings and remains dedicated to continuous improvement to our executive compensation programs, although it did not make any changes to our executive compensation policies or practices that were specifically driven by the outcome of that vote.

Compensation Policy and Objectives

Our Compensation Committee believes that an effective executive compensation program generally rewards the achievement of annual, long-term and strategic goals set by the Company and aligns our named executive officers’ interests with those of our other stockholders. Our executive compensation program is designed to attract, motivate, retain and reward highly qualified individuals who are committed to the achievement of solid financial performance and excellence in the management of our Company assets. To accomplish this objective, our typical executive compensation program is designed to provide competitive compensation and to link compensation to our Company’s financial and operational performance. Our Compensation Committee generally evaluates compensation against individual and external market factors to help ensure that we maintain our ability to attract, motivate and retain key executive talent.

Total compensation for our named executive officers generally is comprised of base salary, short-term incentives and long-term incentives, a portion of which is designed to be earned based on our Company’s financial performance. From time to time, our Compensation Committee may approve discretionary cash bonuses or special equity awards to recognize and reward a named executive officer’s individual effort in certain circumstances. As discussed elsewhere in this Compensation Discussion and Analysis, for 2020 the Compensation Committee approved discretionary short-term cash bonus awards to our NEOs in lieu of a short-term cash incentive program.

Compensation Committee Role

Our Compensation Committee oversees our compensation programs, with particular attention to the compensation for our CEO and the other named executive officers, to ensure that our compensation philosophy is consistent with the best interests of the Company and our stockholders. It reviews and approves (or, as appropriate, recommends to our Board for approval) changes to our executive compensation policies and programs. While our Compensation Committee has established objective, formula-based arrangements, it believes that an effective executive compensation program also requires the use of sound business judgment and the ability to exercise discretion. Accordingly, our Compensation Committee retains discretion to adjust the mix of cash and equity compensation components, adjust the mix of RSUs and PRSUs awarded, and offer other forms of equity-based compensation. In the past, our Compensation Committee has exercised its discretion and modified the recommended adjustments or awards to our named executive officers. We believe that this discretion allows our Compensation Committee to better calibrate the relative contributions of each named executive officer and to respond to market practices as our business needs change, as reflected in the Compensation Committee’s ability to take a different approach to the 2020 short-term cash program for the NEOs in light of the uncertainty created by the COVID-19 pandemic.

Role of Compensation Consultants in Compensation Decisions

Our Compensation Committee has engaged Meridian as its independent executive compensation consultant to advise our Compensation Committee on executive compensation matters. At our Compensation Committee’s direction, Meridian prepared, presented and made recommendations on peer group data, competitive market pay, compensation structure and general market trends. More specifically, Meridian provided market and peer group data to give our Compensation Committee context for our Company’s short-term cash compensation. The Compensation Committee sought the advice of Meridian in considering the design of the NEOs’ 2020 cash compensation, including the decision to implement a discretionary cash bonus program. As described above, we also consulted Meridian in connection with determining Mr. Gleason’s compensation package, which emphasizes performance metrics. In reviewing our executive compensation programs for market-competitiveness and alignment with industry best practices, our Compensation Committee considered the information and advice presented by Meridian.


		2021 Proxy Statement • 17

Meridian has also provided a review of our fixed, variable and long-term compensation against our peer group for our named executive officers.

Our Compensation Committee assessed the independence of Meridian, as required under the NASDAQ listing requirements, and considered and assessed all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act, that could give rise to a potential conflict of interest with respect to Meridian during 2020. Based on this review, our Compensation Committee did not identify any conflict of interest raised by the work of Meridian. Meridian does not provide any services to management or any other services to our Company.

Role of Executive Officers in Compensation Decisions

Our annual and long-term incentive-based executive compensation is generally structured to reward our executive officers for achieving our Company’s business goals. From time to time, our Compensation Committee relies upon recommendations made by our management, and in particular, our CEO, regarding compensation for our executive officers other than our CEO. As part of its review and establishment of the performance criteria and compensation of our named executive officers, our Compensation Committee meets separately with our CEO at least once each year and with our other executive officers as it deems appropriate. Our CEO and such other executive officers as our CEO deems appropriate annually review the performance of each of our other named executive officers (other than our CEO) with our Compensation Committee and makes recommendations to our Compensation Committee regarding such named executive officers’ compensation. Our Compensation Committee makes its compensation decisions for our named executive officers other than the CEO based on that review and the recommendations of our CEO. Each year, our CEO’s performance is reviewed by our non-management directors, and based on that review, our Compensation Committee makes a recommendation to the non-management directors regarding the compensation of our CEO.

Setting Executive Compensation

Our Compensation Committee evaluates the performance of our CEO and the other named executive officers as described above and reviews and approves the annual salary and any annual cash incentive, bonus, long-term stock-based compensation and other material benefits of our named executive officers other than our CEO, subject to the terms of any applicable employment agreements. Based on the recommendations of our Compensation Committee, our non-management directors approve the annual salary and any annual cash incentive, bonus, long-term stock-based compensation and other material benefits of our CEO, subject to the terms of his employment agreement.

External Pay Comparisons

Our Compensation Committee considers external pay comparison data as a market check on its compensation decisions, but not for specific benchmarking. With input from Meridian, our independent compensation consultant, in December 2019, our Compensation Committee recommended not changing our peer group as it believed our then-current peer group, as revised in December 2018, reflected our peers for purposes of determining executive compensation in 2020. These companies were selected based on revenue, market capitalization and various market peer indices, as well as overall business characteristics, including product offerings and end markets, similar to ours.


• Ameresco, Inc.	• Esco Technologies, Inc.	• Manitex International, Inc.
• Argan, Inc.	• Graham Corporation	• Powell Industries, Inc.
• Aspen Aerogels, Inc.	• Heritage-Crystal Clean Inc.	• Preformed Line Products Co.
• DMC Global, Inc.	• Hurco Companies, Inc.	• The Gorman-Rupp Co.
• Douglas Dynamics, Inc.	• L.B. Foster Company	• Thermon Group Holdings Inc.
• Enphase Energy, Inc.	• Lydall, Inc.	• US Ecology, Inc.

We are currently positioned in the 37^th percentile in terms of revenue and market cap for this peer group. Based on its review of the peer group data and market data and other factors discussed in this Compensation Discussion and Analysis, Meridian determined that our CEO’s 2020 total target compensation is between the 25^th percentile and median of this peer group, which corresponds to our Company’s size within the peer group, as described above.


18 • CECO Environmental

2020 Executive Compensation

In April 2020, the Compensation Committee determined that the best way to recognize strong performance throughout the COVID-19 pandemic, ensure sustained engagement and drive key business results was to provide an annual cash bonus to our NEOs on a discretionary basis for 2020. Our Company’s financial performance remained resilient, despite lower orders volume, and our proactive cost reductions assisted in maintaining stable margins and Adjusted EBITDA. As a result, in recognition of the foregoing, the Committee approved 2020 cash bonus awards for NEOs (other than Mr. Gleason) equal to 50% of each such NEO’s target award under our 2019 annual cash incentive program, consistent with the Company’s approach for other participants in the annual incentive program. These payments are described below in this Compensation Discussion and Analysis and reflected in our 2020 Summary Compensation Table under the column captioned “Bonus.”

As incentive for future performance, in May 2020, Mr. Sadlowski and Mr. Eckl were granted PRSUs that give them the opportunity to earn shares based on our Company’s future performance. As in prior years, each named executive officer, including Mr. Gohr, also received grants of timed-based RSUs that generally vest over four years, so the value an executive officer may actually realize depends on our future stock performance. In connection with his commencement of service, Mr. Gleason was granted stock options, the majority of which have an exercise price equal to two times the fair market value of our stock on the grant date and therefore will only have value if that stock value is exceeded.

The charts below show the proportion of base salary and cash bonus payments for 2020 and the RSUs and PRSUs granted in the first half of 2020 for each of Messrs. Sadlowski, Eckl and Gohr, who were serving as executive officers at the beginning of 2020. The compensation of Mr. Gleason, who commenced service as our CEO in July 2020, is discussed in further detail below. The PRSUs noted below represent the grant date fair value and assume probable achievement with respect to performance conditions. These charts do not reflect an additional grant of RSUs made to Mr. Eckl in the second half of 2020, as further described below.

LOGO

Elements of Compensation

Our 2020 executive compensation program consists of cash, with a fixed base salary and bonus, and equity generally in the form of RSUs and PRSUs (and, for Mr. Gleason, stock options).

Base Salary

We provide our named executive officers with a base salary to compensate them for the expertise and value they bring to us. Base salary is determined for each individual based on the executive’s position and responsibility, taking into account the executive’s impact level, external market data, scope of responsibility, prior experience, past accomplishments and other similar factors, and whether the particular base salary is subject to any existing employment agreement.


		2021 Proxy Statement • 19

Salary levels for our named executive officers are reviewed and approved by the Compensation Committee annually as well as upon a promotion or other change in job responsibility. The salary levels, including any increases, are also based on our Compensation Committee’s evaluation of the individual’s strengths, development and expected future contributions with respect to the corporate goals and objectives relevant to the individual’s compensation, including individual performance. In 2020, our Compensation Committee did not approve any adjustments to the base salaries for our named executive officers in light of the market uncertainty created by COVID-19.


Named Executive Officer	Base Salary Rate ($) (as of 12/31/19)		Base Salary Rate ($) (as of 12/31/20)		% Increase
Todd Gleason¹		N/A		450,000		N/A
Dennis Sadlowski		587,000		587,000		0%
Matthew Eckl		342,000		342,000		0%
Paul Gohr		208,000		208,000		0%

(1)	In accordance with his employment agreement, Mr. Gleason’s base salary was initially established at $450,000 in connection with his commencement of employment in July 2020 and was not increased from that level during 2020.

Cash Incentive Compensation

We believe that, in typical circumstances, a portion of our named executive officers’ cash compensation should be earned based on our annual performance, so that our executive officers are appropriately motivated to maximize our financial and operating performance each year. Early each year, our Compensation Committee typically selects executive officers to participate in the annual incentive program and determines the amount of the award and the performance goals for the participant. However, in March 2020, in light of changing market conditions and the uncertain impact of the COVID-19 pandemic, the Compensation Committee postponed approving metrics for the annual cash incentive awards to our NEOs.

In April 2020, our Compensation Committee took into consideration the impact of the ongoing COVID-19 pandemic on the Company’s operations and recognized the extraordinary actions that would be required by executive management to deliver uninterrupted performance, ensure sustained employee engagement and drive key business results. The Compensation Committee determined that it was appropriate under these unusual circumstances to provide an annual cash bonus to our NEOs on a discretionary basis for 2020. The Compensation Committee did not establish “target” awards for the NEOs, and did not establish specific financial metrics for 2020.

Following the end of the 2020 fiscal year, the Compensation Committee evaluated the Company’s performance and the performance of the individual NEOs, with a particular focus on the following key accomplishments:

• The NEOs were disciplined in developing and applying COVID-19 policies and procedures to protect our workforce and maintain our plant operations, all of which remained open throughout the pandemic;

• The NEOs addressed the challenges in the markets, and took prompt and decisive actions designed to minimize the adverse impact of the pandemic on the Company’s businesses;

• The NEOs continued to execute on the Company’s transformation strategy, successfully completing the acquisition, and subsequent integration, of Environmental Integrated Solutions Limited and the joint venture with Mader Machine Co., Inc.;

• The NEOs delivered on several cost saving initiatives and identified others that are expected to result in annualized savings of approximately $17 million: and

• The NEOs maintained the Company’s strong liquidity and balance sheet.


20 • CECO Environmental

In recognition of the foregoing, and with input from the COVID-19 Committee, the Compensation Committee approved 2020 cash bonus awards for NEOs (other than Mr. Gleason) equal to 50% of each such NEO’s target award under our 2019 annual cash incentive program, consistent with the Company’s approach for other participants in the annual incentive program. Even at this level, the Committee believes the 2020 cash bonus payments reflect a strong correlation with the short-term financial performance of the Company.

The payouts of the discretionary awards for 2020 are set forth in the table below and reflected in our 2020 Summary Compensation Table under the column captioned “Bonus.”


Named Executive Officer		Amount of Bonus Payment ($)

Matthew Eckl		94,000

Paul Gohr		36,500

Dennis Sadlowski		149,564¹

¹	Mr. Sadlowski was entitled to receive a pro-rata portion of his 2020 bonus pursuant to the terms of his separation agreement.

Pursuant to his employment agreement, Mr. Gleason received a fixed annual bonus for 2020 equal to $150,000 in lieu of any other annual cash bonus opportunity for the year. In addition, the Company paid him a “sign-on” bonus of $150,000 in connection with his commencement of service as CEO. If Mr. Gleason terminates employment with the Company without good reason (as defined in his employment agreement) prior to September 30, 2021 and Mr. Gleason has not relocated his primary residence to the Dallas, Texas area as of his date of termination, he is required to repay to the Company the $150,000 sign-on bonus within 30 days after his date of termination.

Long-Term Equity Compensation

Our Compensation Committee believes that granting stock-based awards and options from time to time provides our executive officers with a strong economic interest in maximizing stockholder returns over the longer term and is important in retaining and recruiting the key talent necessary to ensure our Company’s continued success. As a result, our equity compensation plans have been designed to promote the long-term financial interests and growth of our Company by helping attract and retain management with the ability to contribute to the success of the business, by providing an opportunity for increased equity ownership by our executive officers and by maintaining competitive levels of total compensation.

Under our 2017 Equity and Incentive Compensation Plan, awards may take the form of restricted stock grants, bonus stock grants without restrictions, non-qualified stock options, incentive stock options, RSUs, performance-based awards and certain other awards. Our Compensation Committee believes that the ability to grant various types of equity awards offers more flexibility in designing the overall compensation packages. Our Compensation Committee administers our equity compensation plans.

2020 Equity Grants

Our Compensation Committee changed our Company’s long-term equity incentive practices in 2018 to provide for grants of long-term incentive awards that generally consist of RSUs that generally vest over time and PRSUs that generally vest only to the extent our Company attains the performance goal established by our Compensation Committee. To the extent stock units vest, the recipient receives one share of our common stock for each vested stock unit and an amount in cash equal to the dividends, if any, that would have been paid on the underlying common stock since the date of the stock unit grant.

For 2020, the value of the total stock units awarded to each named executive officer serving at the beginning of the year was based on a fixed dollar amount determined by our Compensation Committee with Meridian’s guidance. To determine the number of stock units, we divided the value of the award by $6.25. For Messrs. Sadlowski and Eckl, our Compensation Committee allocated the stock units between RSUs and PRSUs. Because he served as our Chief Executive Officer, our Compensation Committee determined that Mr. Sadlowski would be granted equity awards with an aggregate value of approximately $500,000, and that his awards would be more heavily allocated to PRSUs (70% of the target long-term incentive award value), with the remaining 30% allocated to time-based RSUs. For Mr. Eckl, our Compensation Committee determined that his equity awards would have an aggregate value of approximately $250,000,


		2021 Proxy Statement • 21

with the target long-term incentive award value allocated evenly between time-based RSUs and PRSUs. Messrs. Sadlowski and Eckl both have a significant portion of their annual equity opportunity tied to PRSUs due to their leadership positions and responsibilities for our financial performance.

Our Compensation Committee determined that Mr. Gohr should receive time-based RSUs with a target value of $50,000. The target long-term incentive award values for Messrs. Sadlowski, Eckl and Gohr were unchanged from 2019.

On July 6, 2020, we awarded an additional, special grant of 50,000 time-based RSUs to Mr. Eckl in recognition of his commitment to the organization and for his seamless onboarding of Mr. Gleason as CEO.

The RSUs that were granted to the named executive officers in 2020 generally vest in four substantially equal annual installments on each of the first four anniversaries of the grant date. All of the 2020 RSU awards granted to all of our named executive officers are shown in the “2020 Grants of Plan-Based Awards Table” below in this Proxy Statement.

The long-term performance awards that were granted in 2020 were designated as PRSUs that generally vest on March 15, 2023, to the extent our Company attains the Relative TSR (as defined below) goal for the performance period beginning on January 1, 2020 and ending on December 31, 2022 as established by our Compensation Committee. The Compensation Committee determined to use Relative TSR for the 2020 PRSU awards because this metric keeps the focus on the future financial performance of the company and creating value even in challenging times Messrs. Sadlowski and Eckl were granted the following target PRSU awards:



PRSU Target Opportunity

Dennis Sadlowski		Matthew Eckl

56,000		20,000

For purposes of the 2020 PRSU awards, Relative TSR is the percentile rank of the Company’s total shareholder return as compared to (and included in) the total shareholder returns of all members of a designated peer group at the end of the 2020-2022 performance period. “Total shareholder return” is a rate of return reflecting stock price appreciation, plus the reinvestment of dividends in additional shares of stock (with appropriate adjustments for certain changes in capital structure), from the beginning of the performance period through the end of the performance period, where (1) the beginning stock price is based on the average closing stock price for the 20 calendar days preceding January 1, 2020 and (2) the ending stock price is based on the average closing stock price for the 20 calendar days preceding January 1, 2023.

For purposes of Relative TSR, the Company’s total shareholder return will be compared against a peer group of 90 publicly traded companies that, at the time of selection by the Compensation Committee, were classified in the Materials or Industrials sector with a market capitalization from $100 million to $500 million. The list of Relative TSR peer companies is included with this Proxy Statement as Appendix II. The peer group is subject to adjustment in the event of certain significant events that occur with respect to a peer company, including bankruptcy, delisting, liquidation, certain acquisitions, or “going private” transactions.

Based on our Relative TSR achievement during the 2020-2022 performance period, the PRSUs can be earned as follows (with straight-line interpolation between performance levels):



Performance Level	Relative TSR	% of Target PRSUs Earned

Below Threshold	Below 25^th percentile		0%

Threshold	At 25^th percentile		50%

Target	At 50^th percentile		100%

Maximum	At or above 75^th percentile		150%

However, regardless of the level of Relative TSR performance, if the Company’s absolute total shareholder return during the performance period is negative, the percentage of target PRSUs earned will not exceed 100% of target.


22 • CECO Environmental

In accordance with the terms of his employment agreement, the Compensation Committee approved the following initial awards to Mr. Gleason:

• A grant of time-based RSUs valued at approximately $600,000, which grant will generally vest, subject to Mr. Gleason’s continued employment with the Company, in substantially equal installments on each of the first four anniversaries of the date of grant;

• A grant of stock options valued at approximately $900,000, which award will generally vest, subject to Mr. Gleason’s continued employment with the Company, in substantially equal installments on each of the first four anniversaries of the date of grant. This stock option award has an exercise price equal to the market value (determined in accordance with the employment agreement) of our stock on the grant date; and

• A grant of stock options valued at approximately $1,500,000, which award will generally vest, subject to Mr. Gleason’s continued employment with the Company, in substantially equal installments on each of the first four anniversaries of the date of grant. This stock option award has an exercise price equal to two times the market value (determined in accordance with the employment agreement) of our stock on the grant date.

LOGO

Under the terms of his employment agreement, for calendar years following 2020, Mr. Gleason is generally eligible for annual awards under our equity compensation arrangements as reasonably determined by the Compensation Committee. His total annual equity award target opportunity for each such calendar year will have an aggregate grant date value (as reasonably determined by the Compensation Committee) of no less than $1,000,000. Mr. Gleason’s annual equity awards will be made in the form of time-based RSUs and/or PRSUs, or in such other forms as determined by the Compensation Committee after consideration of competitive market data provided by its independent compensation consultant. However, no less than 60% of Mr. Gleason’s annual equity awards will be subject to the achievement performance objectives determined by the Compensation Committee.

Performance-Based Awards Granted in Prior Years

In 2018, we granted PRSUs to our NEOs that were generally scheduled to vest on March 15, 2021 to the extent the Company attained Adjusted EBITDA goals for the 2020 fiscal year established by the Compensation Committee. For purposes of these awards, Adjusted EBITDA is as calculated for purposes of the Company’s quarterly financial reports. Based on 2020 Adjusted EBITDA achievement, the NEOs were eligible to earn PRSUs in the following amounts, with no interpolation between performance levels:


	PRSUs Earned (#)
2020 Adjusted EBITDA Performance Level	Dennis Sadlowski		Matthew Eckl		Paul Gohr

Target: $45,000,000		70,000		25,000		—

Maximum: $50,000,000		120,000		50,000		7,500

No PRSUs would be earned for Adjusted EBITDA performance below the target level. Although the PRSUs of Messrs. Sadlowski and Eckl could be earned at either a “target” or “maximum” level, Mr. Gohr’s PRSUs could only be earned if the “maximum” level of Adjusted EBITDA was achieved. The Company’s Adjusted EBITDA for 2020 was $32.8 million. As a result, none of Mr. Eckl or Mr. Gohr’s PRSUs were earned. Mr. Sadlowski’s PRSUs were forfeited in connection with his departure from the Company.


		2021 Proxy Statement • 23

In June 2017, pursuant to his employment agreement, Mr. Sadlowski received performance units at a “target” level of $700,000, the payout of which performance units could vary from 0% to 200% of the target award, subject generally to a two-year performance period (which began on June 10, 2018 and ended on June 10, 2020) and the achievement of stock price performance criteria and objectives established by the Compensation Committee (as set forth in the table below). To the extent earned, the performance units were generally scheduled to vest on the third anniversary of the grant date. If, upon the conclusion of the performance period, our stock price performance was between performance levels, there would be no interpolation between payout levels. For purposes of this award, stock price performance is measured based on the highest average fair market value of our common stock that is attained during any period of 30 consecutive trading days that fall within the performance period.


Performance Level	Stock Price Performance	Performance Units Earned

Below Threshold	Below $12.00	0%

Threshold	$12.00	50%

Target	$15.00	100%

Maximum	$18.00 +	200%

To the extent earned, the performance units would be paid in the form of shares of common stock determined by dividing the dollar value of the earned performance units by the highest stock price performance hurdle attained during the performance period ($12.00, $15.00 or $18.00, as applicable), rounded to the nearest whole share. During the two-year performance period, the highest stock price achieved for 30 consecutive trading days was $8.75. As a result, Mr. Sadlowski did not earn any of the performance units.

Personal Benefits and Perquisites

We provide our named executive officers with a limited number of perquisites that we believe are reasonable and consistent with our overall compensation program and better enable us to attract and retain employees for key positions. These perquisites generally consist of car allowances and payment of life insurance premiums. In connection with his appointment as CEO, Mr. Gleason is also entitled to reimbursement through June 30, 2021 for up to $2,500 per month for apartment or comparable rental expenses incurred by him in the Dallas, Texas area, pursuant to the terms of his employment agreement. During 2020, we agreed to extend the reimbursement period through December 31, 2021.

Retirement and Post-Employment Benefits

Our Company sponsors a 401(k) retirement plan for substantially all of our U.S. employees (the “401(k) Plan”), pursuant to which we match contributions each pay period at 100% of the employee’s contributions for the first 3% of eligible compensation, and 50% of the employee’s contribution on the next 3% of eligible compensation, for a maximum match of 4.5% of eligible compensation. Our named executive officers participate in the 401(k) Plan on the same terms as our other eligible employees. We believe the 401(k) Plan, which has limited cost to our Company, is set at a reasonable level, is highly valued by participants, and is part of a competitive compensation program consistent with our overall goal of attracting and retaining qualified employees.

Agreements with Individual Named Executive Officers

We have employment agreements with Mr. Gleason and Mr. Eckl, and we had an employment agreement with Mr. Sadlowski during his employment.

Effective July 6, 2020, we entered into an employment agreement with Mr. Gleason in connection with his appointment as our CEO. We entered into an employment agreement with Mr. Eckl effective as of January 9, 2017 when he joined our Company as our CFO. These employment agreements set forth the basic terms and conditions of employment for such named executive officers, including initial base salary, annual incentive opportunity, and long-term incentive opportunity, as well as certain sign-on equity and cash bonus compensation and certain perquisites and personal benefits. The employment agreements also include customary restrictive covenants and provide for certain severance compensation and benefits in the event of a qualifying termination of employment. The terms of these employment agreements reflect the product of arms’ length negotiations between the individual and the Company.


24 • CECO Environmental

We also had an employment agreement with our Former CEO, Mr. Sadlowski. We entered into the June 10, 2017 employment agreement with Mr. Sadlowski in connection with his appointment as our permanent CEO, having served as our interim CEO for the previous four months pursuant to an interim offer letter dated January 26, 2017. In connection with his departure from the Company, we entered into a separation and consulting agreement with Mr. Sadlowski, effective as of July 5, 2020. Under the separation and consulting agreement, Mr. Sadlowski is entitled to the benefits previously negotiated under his employment agreement with the Company for a termination without cause, except that Mr. Sadlowski is entitled to (1) up to 18 months (rather than up to 12 months) of health and welfare premium reimbursements, (2) a pro-rata 2020 bonus payout, (3) payments equal to 4 weeks of vacation pay, and (4) certain other benefits as further described under “Potential Payments Upon Termination or Change in Control” below. In addition, in order to facilitate an orderly transition of duties, Mr. Sadlowski also agreed to provide consulting services to the Company through December 31, 2020 at the rate of $48,917 per month.

For more information regarding these individual arrangements and the benefits provided thereunder, please see “Potential Payments Upon Termination or Change in Control” below.

Stock Ownership Guidelines

To reinforce the alignment of our CEO’s long-term financial interest with the interests of our stockholders, we have required our CEO to own shares of our common stock having a value equal to at least five times his base salary. During 2018, our Compensation Committee revised our stock ownership guidelines to require our other executive officers to own shares of our common stock having values equal to the applicable multiple of base salary set forth in the table below:


Named Executive Officer		Ownership Requirement (as multiple of base salary)

Chief Executive Officer		5X

Chief Financial Officer		3X

Other Executives Officers (currently, only Mr. Gohr)		1X

Our executive officers have five years after becoming subject to these guidelines to achieve the stock ownership required. Our Compensation Committee in its discretion may extend the period of time for attainment of such ownership levels in appropriate circumstances. For purposes of this requirement, stock ownership includes all shares of our common stock owned by the named executive officer directly or held in trust for the executive or the executive’s immediate family. In addition, restricted stock and RSUs are also included in determining whether the required level of ownership has been attained. For purposes of the stock ownership requirements, the value of a share is measured as the greater of the then current market price or the closing price of a share of the common stock on the grant date. As of December 31, 2020, all NEO’s met the stock ownership requirement except for Mr. Gleason, who has served as our Chief Executive Officer only since July 2020. As a result of his departure from the Company, Mr. Sadlowski is no longer subject to the stock ownership guidelines.

Our executive officers are prohibited under our Insider Trading Policy from engaging in certain transaction in our securities, including short sales against the box, buying or selling puts or calls and frequent trading to take advantage of fluctuations in stock price. Our Insider Trading Policy is described in the “Insider Trading Policy” paragraph under “Our Board and Its Committees” section above.

Clawback Policy

Our Board adopted a clawback policy that provides if (1) our Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under the U.S. federal securities laws and (2) our Board reasonably in good faith determines that any current or former “Section 16 officer” of our Company willfully committed an act of fraud, dishonesty or recklessness that contributed to the noncompliance or benefitted materially from excessive incentive-based compensation, then our Board may direct the Company to use prompt and reasonable efforts to recover the excessive incentive-based compensation paid to the individual.


		2021 Proxy Statement • 25

Risk Considerations in our Compensation Program

Our executive compensation consists of both fixed and variable compensation. The fixed (or salary) portion of compensation is designed to provide a steady income so our executive officers are not pressured to focus exclusively on short-term gains, which may be detrimental to long-term stock price appreciation and other business metrics. The variable portions of compensation consist of cash incentives or discretionary cash bonuses and long-term equity incentives (time-based RSUs, PRSUs and stock options). In a typical year, incentive compensation is generally tied to the achievement of corporate performance goals based on metrics established by our Compensation Committee. For 2020, we used a Relative TSR goal for long-term equity incentives. Although 2020 cash bonuses were determined on a discretionary basis by the Compensation Committee, we believe that the level of such bonuses was appropriate in light of our 2020 performance. For 2021 only, we made a decision to add an additional metric for orders to our usual incentive program metrics of Adjusted EBITDA, revenue and free cash flow, as steadily rebuilding our backlog will be a priority in 2021. We believe that the variable components of compensation motivate our executive officers to produce short- and long-term corporate results while the fixed element of compensation helps provide security so that management is not encouraged to take unnecessary or excessive risks in working to produce such results. Periodically, our Compensation Committee conducts a risk review of the compensation programs for all employees, including our named executive officers. In 2020, a market pay analysis study was conducted, and following discussions held in Compensation Committee meetings that addressed risks associated with our plans and metrics, we believe our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on our Company.

Tax and Accounting Considerations

We recognize a charge to earnings for accounting purposes for equity awards over their requisite service period. With respect to the tax deductibility of compensation, although the “performance-based compensation” exception under Section 162(m) of the Internal Revenue Code was repealed as part of the late 2017 U.S. tax reform, generally effective as of January 1, 2018, our Compensation Committee still considers the tax deductibility of compensation. However, our Compensation Committee is fully authorized to approve compensation that may not be deductible when it believes that such payments are appropriate to attract and retain executive talent.

Conclusion

We recognize the importance of attracting, motivating, retaining and rewarding executive talent who can effectively lead our business. Our Compensation Committee continues to analyze and adjust our compensation programs to emphasize the alignment of our named executive officers’ interests with the long-term interests of our stockholders. It seeks to incentivize our named executive officers to maximize our Company’s performance and reward them for their achievements. With the various components of our executive compensation programs, our Compensation Committee seeks a balance between fixed and at-risk compensation, cash and equity, and short-term and long-term rewards with the ultimate objective of creating long-term value for our stockholders.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and, by incorporation by reference, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

This report is submitted on behalf of the members of the Compensation Committee:

Valerie Gentile Sachs, Chair

Eric M. Goldberg

David B. Liner


26 • CECO Environmental

2020 Summary Compensation Table

The following table sets forth certain information with respect to the compensation for the years indicated for Mr. Gleason and Mr. Sadlowski, the individuals who served as our principal executive officer during 2020, Mr. Eckl, our principal financial officer, and Mr. Gohr, our other 2020 executive officer. We refer to these executive officers collectively as “our named executive officers.”


Name and Principal Position	Year		Salary ($)		Bonus ($)⁽¹⁾		Stock Awards ($)⁽²⁾		Option Awards ($)⁽³⁾		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)⁽⁴⁾		Total ($)
Todd Gleason Chief Executive Officer		2020		216,346		300,000		599,059		2,400,000		—		24,376		3,539,781
Todd Gleason Chief Executive Officer
Dennis Sadlowski Former Chief Executive Officer		2020		311,296		—		545,440		—		—		1,114,680		1,971,416
		2019		582,963		—		500,000		—		289,739		33,168		1,405,870
		2018		575,000		—		742,500		—		715,561		29,692		2,062,753
Matthew Eckl Chief Financial Officer		2020		336,739		94,000		570,700		—		—		25,165		1,026,604
		2019		339,846		—		250,000		—		92,899		27,352		710,097
		2018		334,192		—		357,650		—		228,736		18,795		939,373
Paul Gohr Chief Accounting Officer		2020		205,005		36,500		40,880		—		—		19,843		302,228
		2019		205,744		—		50,000		—		35,790		19,075		310,609
		2018		198,423		—		86,625		—		70,991		18,347		374,386

(1)

This column reflects, for Mr. Gleason, (a) a sign-on cash bonus equal to $150,000 that was paid in 2020 in lieu of any relocation payments in connection with Mr. Gleason’s relocation to the Dallas, Texas area, and (b) a fixed bonus for the 2020 calendar year equal to $150,000 (paid in lieu of any other annual cash bonus opportunity for 2020), each as provided for under Mr. Gleason’s employment agreement. For Messrs. Eckl and Gohr, this column reflects the discretionary cash bonuses for 2020 that such named executive officers received.

(2)

This column reflects the aggregate grant date fair value of stock awards calculated in accordance with FASB ASC Topic 718, disregarding estimated forfeitures. There is no assurance that the named executive officers will realize these amounts. Assumptions used in calculating these amounts are included in Note 9 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. For PRSU awards, the grant date fair value represents the probable outcome of the applicable performance conditions. Assuming maximum achievement with respect to the performance metrics applicable to the 2020 PRSU awards, the grant date fair values of such awards would be as follows: $507,360 for Mr. Sadlowski; and $181,200 for Mr. Eckl.

(3)

This column reflects the aggregate grant date fair value of option awards granted to Mr. Gleason, calculated in accordance with FASB ASC 718. Assumptions used in calculating this amount are included in Note 9 to the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

(4)	Amounts reported in this column for 2020 consist of the following:


Named Executive Officer	401 (k) Matching Contributions ($)		Term Life Insurance Premiums ($)		Car Allowance ($)		Rental Allowance ($)		Severance ($)⁽¹⁾		Total ($)
Todd Gleason		4,798		575		6,000		13,003		—		24,376
Dennis Sadlowski		12,825		6,070		6,923		—		1,088,862		1,114,680
Matthew Eckl		7,857		4,846		12,462		—		—		25,165
Paul Gohr		8,914		960		9,969		—		—		19,843

(1)

Reflects the following payments and benefits that were accrued by Mr. Sadlowski in connection with cessation of service as CEO, as further described below under “Potential Payments Upon Termination or Change in Control”: (a) a lump sum cash payment equal to Mr. Sadlowski’s annual base salary ($587,000); (b) a lump sum cash amount equal to the 2020 annual bonus that Mr. Sadlowski would have received had he remained employed through the end of the 2020 calendar year (which was equal to what he would have earned under our typical annual cash incentive program at 50% of his target award), pro-rated based on Mr. Sadlowski’s service as an employee during 2020 ($149,564); (c) four weeks of vacation pay ($45,115); (d) COBRA reimbursements for up to 18 months ($12,683); (e) consulting fees pursuant to his separation and consulting agreement ($293,500); and (f) a Company laptop and phone ($1,000).


		2021 Proxy Statement • 27

2020 Grants of Plan-Based Awards


	Grant Date		Committee Action Date		Estimated Future Payouts Under Equity Incentive Plan Awards⁽¹⁾						All Other Stock Awards: Number of Shares of Stock or Units (#)⁽²⁾		All Other Option Awards: Number of Securities Underlying Options (#)⁽³⁾		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards ($)⁽⁴⁾
Name	Grant Date		Committee Action Date		Threshold (#)		Target (#)		Maximum (#)						Exercise or Base Price of Option Awards ($/Sh)
Todd Gleason		7/6/20		7/6/20		—		—		—		94,340		—		—		599,059
		7/6/20		7/6/20		—		—		—		—		316,902		6.36		900,000
		7/6/20		7/6/20		—		—		—		—		898,204		12.72		1,500,000
Dennis Sadlowski		5/20/20		5/19/20		—		—		—		24,000		—		—		122,640
Dennis Sadlowski		5/20/20		5/19/20		28,000		56,000		84,000		—		—		—		422,800
Matthew Eckl		5/20/20		5/19/20		—		—		—		20,000		—		—		102,200
		5/20/20		5/19/20		10,000		20,000		30,000		—		—		—		151,000

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SEC Form DEF 14A filed by CECO Environmental Corp.