DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

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CTS CORPORATION

(Name of Registrant as Specified In Its Charter)

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

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LOGO

Dear CTS Shareholder:

2022 Results

We achieved solid results in 2022, delivering double-digit sales growth in the face of economic uncertainties, geo-political challenges and supply chain pressures. Our focus on profitable growth, diversification through our advanced materials capability and electrification in mobility markets were key drivers of our success. Our full-year sales increased 14% to $586.9 million, with non-transportation revenues increasing 24%, up 13% organically from 2021, and transportation sales increasing 7%. We also delivered strong adjusted EBITDA margin expansion. GAAP earnings per diluted share was $1.85 in 2022, up from a loss of $(1.30) in 2021. Adjusted earnings per diluted share was $2.46 in 2022, up from $1.93 in 2021.

We remain focused on advancing our long-term growth strategy which centers on diversifying our end-market profile through expansion of our technologies, products, customers and geographic reach. This strategy enhances the value creation opportunity for our stakeholders, as well as the quality of our earnings. We made good progress on our diversification efforts in 2022, notably increasing non-transportation sales to approximately 48% of total 2022 sales. We further accelerated our diversification efforts in 2022 through the acquisition of TEWA Temperature Sensors Sp. Zo.o., a designer and manufacturer of high-quality temperature sensors headquartered in Lublin, Poland. TEWA complements our existing temperature sensing platform and the acquisition further supports our end-market diversification strategy by expanding our temperature sensing portfolio and presence in Europe. In addition, in 2022, we acquired Ferroperm Piezoceramics A/S, a company specializing in the design and manufacture of high performance piezoelectric ceramic components for use in complex and demanding medical, industrial and aerospace applications, located in Kvisgaard, Denmark. Ferroperm adds to our existing medical diagnostics and imaging product lines and further supports our end-market diversification strategy. Both acquired businesses are performing well and have further strengthened our ability to add new applications and improved our distribution offerings which have helped us continue to gain traction with our customers. Looking ahead, we will continue our focus on further diversification to grow non-transportation revenues at a faster pace, leveraging our balance sheet to pursue complementary M&A opportunities while continuing to strategically grow our transportation business and strengthen our product portfolio.

The move towards electric and hybrid vehicles, as well as increased sensor content with passive safety and future applications for our e-Brake^™ product, present tremendous opportunities for us. Smart actuators aside, the majority of our product portfolio is agnostic to the propulsion system, creating flexibility for us to meet the needs of our customers. In 2022, the global share of electrified automobiles grew to approximately 10-12% of global vehicle share. We expect this to accelerate to 15% or more by 2025 and above 30% by the end of the decade. With that backdrop, we are focused on achieving our goal of having 25% of our light vehicle revenue generated from electrified platforms by 2025 and our progress on that front continued as we added 27 electric vehicle platform wins in 2022.

We also continued our progress on ESG initiatives in 2022. At CTS, we understand that we have a responsibility to help shape not only a smarter future – but one that will be sustainable for future generations. This begins with making sustainable business choices across our own organization creating long-term value for our company, our stakeholders and the communities in which we do business. We have worked to bring these values to life in several ways, including with the CTS Cares platform, through which our employees across the globe participated in community activities and contributed more than 4,400 hours to community service projects and charitable causes in 2022. We are also proud to be issuing our inaugural ESG report highlighting our efforts in 2022.

With the full dedication and care of our leadership team and every CTS employee globally, we will continue to drive the company forward to deliver superior performance for our customers, shareholders and employees. I want to thank our valued customers, employees, shareholders, business partners and the Board of Directors for their support this past year.

CTS 2023 Proxy Statement

2023 Annual Meeting of Shareholders

As we look to the future, you are cordially invited to attend the 2023 Annual Meeting of Shareholders of CTS Corporation. The meeting will be held on Thursday, May 11, 2023, at 9:30 a.m. central time, at the Hotel Arista, located at 2139 City Gate Lane, Naperville, Illinois 60563.

We are pleased to continue to take advantage of the Securities and Exchange Commission rules allowing us to furnish proxy materials to shareholders on the Internet. We believe that these rules provide you with proxy materials more quickly and reduce the environmental impact of our Annual Meeting. Accordingly, we are mailing to shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review our 2023 Proxy Statement and Annual Report to Shareholders for the year ended December 31, 2022, and to vote online or by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions for requesting these materials on page 63 of this 2023 Proxy Statement.

We hope you will attend the meeting in person. Whether you plan to attend the meeting or not, we encourage you to read this 2023 Proxy Statement and to vote your shares. The vote of every shareholder is important.

LOGO

Kieran M. O’Sullivan

Chairman, President and Chief Executive Officer

CTS 2023 Proxy Statement

Table of Contents



Notice of the 2023 Annual Meeting of Shareholders			1

Proxy Statement Summary			2

Proposal 1: Election of Directors			6

Committees of the Board of Directors			14

Audit Committee			14

Compensation and Talent Committee			15

Nominating, Governance and Sustainability Committee			16

Technology and Transactions Committee			17

Further Information Concerning the Board of Directors			18

Attendance			18

Director Independence			18

Review and Approval of Transactions with Related Persons			18

Meetings of Non-Management Directors			18

Board Leadership Structure			18

Board of Directors’ Role in Risk Oversight			19

Director Education			20

Stock Ownership Guidelines for Executives and Directors			20

Director Resignation Policy			21

Code of Ethics			21

Communications to Directors			21

ESG — 2022 Key Highlights			22

Stock Ownership Information			23

Five Percent Owners of CTS Common Stock			23

Directors’ and Officers’ Stock Ownership			24

Proposal 2: Approval, on an Advisory Basis, of the Compensation of CTS’ Named Executive Officers			25

Proposal 3: Approval, on an Advisory Basis, of the Frequency of Future Advisory Votes Regarding the Compensation of CTS’ Named Executive Officers			26


Compensation Discussion and Analysis			27

Executive Summary			27

Compensation Objectives			28

Competitive Market Pay Information			29

How 2022 Named Executive Officer Compensation was Determined			30

Elements of 2022 Named Executive Officer Compensation			30

Agreements and Arrangements with Named Executive Officers			38

CTS Securities Hedging/Pledging Policy			39


Compensation Committee Report			39

CTS Corporation 2022 Compensation and Talent Committee			39

Executive Compensation			40

2022 Summary Compensation Table			40

2022 Grants of Plan-Based Awards			41

Outstanding Equity Awards at 2022 Fiscal Year-End			42

2022 Option Exercises and Stock Vested			43

Potential Payments Upon Termination or Change-in-Control			43

Change-in-Control Severance Table			45

Executive Severance Policy			45

CEO Pay Ratio			47

Pay Versus Performance Disclosure			49

2022 Director Compensation			52

Proposal 4: Ratification of Appointment of Grant Thornton LLP as Independent Auditor for 2023			54

Report of the Audit Committee			55

CTS Corporation 2022 Audit Committee			55

Independent Auditor			55

Proposal 5: Shareholder Proposal – Shareholder Ratification of Excessive Termination Pay			56

Board Response to Shareholder Proposal

SEC Form DEF 14A filed by CTS Corporation