DEF 14A 1 ny20001135x1_def14a.htm 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 (Amendment No. )

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Hillenbrand, Inc.

(Name of Registrant as Specified In Its Charter)

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


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HILLENBRAND, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held February 10, 2022

The Annual Meeting of shareholders of Hillenbrand, Inc., an Indiana corporation (the “Company”), will be held at the Company’s headquarters at One Batesville Boulevard, Batesville, Indiana 47006, on Thursday, February 10, 2022, at 10:00 a.m. Eastern Standard Time, for the following purposes:

(1)

to elect six members to the Board of Directors;

(2)

to approve, by a non-binding advisory vote, the compensation paid by the Company to its Named Executive Officers;

(3)

to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2022; and

(4)

to transact such other business as may properly come before the meeting and any postponement or adjournment of the meeting.

We intend to hold the Annual Meeting in person. But given public health concerns related to the COVID-19 pandemic, we urge you to consider voting in advance of the meeting via one of the remote methods described in the proxy statement in lieu of attending the meeting in person. In addition, we continue to actively monitor developments in relation to the COVID-19 pandemic, including the spread of variant strains of the virus, and we regularly review and consider the related requirements, recommendations, and protocols that are issued and that may be issued by public health authorities and governments, including in relation to masking, testing, and vaccinations. The health and well-being of our employees and shareholders is a high priority, and we are sensitive to the public health and travel concerns our shareholders may have. Accordingly, if we determine that it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative arrangements for the meeting, which may include a change in venue or holding the meeting solely by means of remote communication. We will announce any such change and the details on how to participate by press release, on our web site at https://ir.hillenbrand.com, and in a filing with the Securities and Exchange Commission. If you are planning to attend the Annual Meeting in person, please check our web site prior to the meeting date. In addition, for your safety and ours, we require you to register your planned in-person attendance with us at least ten (10) business days prior to the meeting, by writing to the Investor Relations Department, Hillenbrand, Inc., One Batesville Boulevard, Batesville, Indiana 47006 or by email at investors@hillenbrand.com. Pre-registration and an admission ticket, as well as matching photo identification, are necessary to gain entrance to the secure area of our headquarters building where the meeting will be held, and we expect that enhanced health and safety protocols will be in place. Similar to last year and subject to public health circumstances at the time of the Annual Meeting, we may again limit food or beverage service and other opportunities for social interaction. Even if unable this year, we hope to resume the social elements of our Annual Meeting in the future, as we truly value the opportunity to have more personal engagement with our shareholders.

	By Order of the Board of Directors,



	Nicholas R. Farrell
	Secretary

Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read the proxy statement and submit your proxy and voting instructions as soon as possible. Important notice regarding the availability of proxy materials for the Annual Meeting of shareholders to be held on February 10, 2022: This proxy statement, the accompanying proxy card, and our 2021 Annual Report to Shareholders are available on the Internet at www.hillenbrand.com.

December 30, 2021

TABLE OF CONTENTS

Page

Proxy Statement Summary			1

Questions and Answers About the Annual Meeting and Voting			7

PROPOSAL NO. 1 – Election of Directors			15

The Board of Directors and Committees			24

Security Ownership of Directors and Management			38

Delinquent Section 16(a) Reports			42

Security Ownership of Beneficial Owners of More Than 5 Percent of the Company’s Common Stock			43

Executive Compensation			44

	Part I:	Compensation Discussion and Analysis	45

	Part II:	Compensation Committee Report	77

	Part III:	Executive Compensation Tables	78

	Part IV:	Compensation Consultant Matters	94

	Part V:	Compensation-Related Risk Assessment	96

	Part VI:	CEO Pay Ratio	97

	Part VII:	Anti-Hedging and Anti-Pledging	98

PROPOSAL NO. 2 – Non-Binding Advisory Vote to Approve Compensation of Named Executive Officers			99

Compensation of Directors			100

Equity Compensation Plan Information			104

Audit Committee Report			105

PROPOSAL NO. 3 – Ratification of Appointment of the Independent Registered Public Accounting Firm			106

Other Matters			108

Appendix A – Incentive Plan Definitions			A-1

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HILLENBRAND, INC.

PROXY STATEMENT SUMMARY

To assist you in reviewing the proposals to be acted upon at the 2022 Annual Meeting of shareholders (the “Annual Meeting”) of Hillenbrand, Inc., an Indiana corporation (“Hillenbrand” or the “Company”), we call your attention to the following information about the proposals and the Board’s voting recommendations, along with highlights of the Company’s corporate governance and executive compensation practices. The following description is only a summary. For more complete information about these topics, please review the proxy statement in its entirety.

Annual Meeting Information

Time and Date:	February 10, 2022 @ 10:00 a.m. EST
Location:	Hillenbrand headquarters
Record Date:	December 13, 2021
Admission:	Pre-registration by email to investors@hillenbrand.com, together with ticket attached to the proxy card (available to beneficial owners upon request as described in the proxy statement) and photo identification

See “Questions and Answers about the Annual Meeting and Voting” in the proxy statement for additional information.

Proposals and Voting Recommendations

Proposal		Board’s Voting Recommendation	Page References
No. 1	Election of Directors	FOR	15
No. 2	Non-Binding Advisory Vote to Approve Compensation of Named Executive Officers, or “Say on Pay”	FOR	99
No. 3	Ratification of Appointment of the Independent Registered Public Accounting Firm	FOR	106

Incentive Compensation Plans and Results

Short-term: The Compensation and Management Development Committee of our Board of Directors (the “Compensation Committee”) has determined to use net revenue, order intake (used by our Coperion subsidiary in lieu of net revenue as further described in the proxy statement), adjusted income before taxes (“IBT”), and cash conversion cycle as the metrics for the Company’s short-term incentive compensation (“STIC”) plan in evaluating the Company’s operational performance, efficiency, and sustainable improvements, as shown in the charts below. We believe that these metrics align the interests of our management with those of our shareholders. For fiscal 2021 STIC, the Compensation Committee approved use of two six-month measurement periods rather than the traditional one twelve-month period and also modified the payout curves, as described in the proxy statement, given the uncertainty associated with the COVID-19 pandemic. In addition, for the second six-month measurement period, the Compensation Committee added the creation of specific plans to increase workforce diversity as part of the Named Executive Officers’ collective performance goal relating to diverse talent pools. As described in the proxy statement, an individual officer’s Individual Performance Factor for STIC purposes is based upon his or her execution of collective performance goals, among other factors. In fiscal 2022, the Compensation Committee has resumed the historical practice of a single twelve-month performance period, as further described in the “Compensation Discussion and Analysis” section of the proxy statement.

The following charts show actual performance for these metrics for the past three years, reflected as the achievement percentage of target:¹

(GRAPHIC)

Long-term: For the Company’s long-term incentive compensation (“LTIC”) plan for our Named Executive Officers, the Compensation Committee determined for fiscal 2021 that one-third of the grant value would be awarded in time-based restricted stock units and the remaining two-thirds would be awarded in performance-based restricted stock units. The performance-based awards are based on shareholder value creation and relative total shareholder return metrics over a three-year measurement period, which we believe closely aligns the interests of our management with those of our shareholders.²

¹The charts present the achievement percentages for these metrics at the consolidated Company level for the Named Executive Officers. As part of the annual compensation setting process, the Compensation Committee establishes payout curves for these achievement percentages to determine payout levels. These charts do not reflect achievement of these metrics at an underlying business unit level, nor achievement of the order intake metric used by our Coperion subsidiary, which apply to certain of our Named Executive Officers as further explained in the proxy statement. Fiscal 2021 information is presented as the sum of the two underlying six-month performance periods (or, in the case of cash conversion cycle, the average of the two periods). In addition, beginning with awards made in fiscal 2021, the Company modified its historical “STIC IBT” measure by using an externally reported financial metric as the starting point for calculation. This new “Adjusted IBT” measure is further explained in the proxy statement. The chart shows STIC IBT achievement for fiscal years 2019 and 2020, and Adjusted IBT achievement for fiscal 2021.

²As further explained in the proxy statement, the Compensation Committee modified elements of the calculation of shareholder value delivered for performance-based LTIC awards made beginning in fiscal 2021 to more closely align with measures used in the Company’s external financial reporting.

The following charts show actual performance for these metrics for the past three measurement periods, reflected as the achievement percentage of target:

(GRAPHIC)

Governance and Executive Compensation Highlights

The following highlights key components of our governance and executive compensation practices.

Here’s What We Do . . .
		Pay for performance
		Benchmark Named Executive Officer target core compensation³ to the 50th percentile of peer group compensation
		Maintain stock ownership guidelines based on shares of Company common stock and time-based restricted stock units beneficially owned: for directors, five times annual cash compensation; for the CEO, five times base salary; for Senior Vice Presidents, two times base salary; for certain other senior officers designated by the CEO, one times base salary
		Seek to ensure that at least 75 percent of the CEO’s target core compensation is at risk⁴
		Require an independent Chairperson of the Board and that at least 80 percent of directors be independent
		Require that directors receive at least a majority of the votes cast in an uncontested election to be elected

³We define our Named Executive Officers’ annual “core compensation” as annual base salary and the target values for STIC and LTIC.

⁴A portion of the CEO’s target core compensation consists of time-based restricted stock units, which the Compensation Committee considers to be “at risk” since the value fluctuates based on stock price performance and vesting of all tranches is contingent upon continued service. This portion does not exceed one-third of target annual LTIC awards made to the CEO and, together with the portion represented by performance-based LTIC awards and STIC, comprises the “at risk” compensation.

		Require that the Compensation Committee be composed entirely of outside, independent directors
		Engage an independent compensation consultant, hired by and reporting directly to the Compensation Committee
		Operate with multiple performance metrics that drive our incentive compensation plans, including a relative metric that measures our performance against an appropriate peer group of companies, currently the Standard & Poor’s 400 Mid Cap Industrials index
		Maintain a clawback policy covering cash and equity incentive compensation plans that applies in the event of a restatement of our financial statements
		Impose a limit of $600,000 on total annual base compensation⁵ for non-employee directors
		Encourage Board refreshment in a variety of ways, including by requiring, without exemptions or conditions, our directors to retire no later than the first Annual Meeting of shareholders following the date on which that director turns 73 years of age
		Maintain a Board diversity policy that provides that Board members will be diverse in terms of gender and of race and ethnicity, and in terms of other characteristics, including background, perspective, knowledge, skills, and experience

Here’s What We Don’t Do . . .
☒		Permit re-pricing, exchanging, or cashing out of “underwater” stock options without shareholder approval
☒		Permit spring-loading, back-dating, or similar practices that “time” the grant of our equity awards
☒		Permit granting of stock options below fair market value
☒		Permit “recycling” (into the equity plan pool) of Company shares that are (i) used to pay an award exercise price or withholding taxes, or (ii) repurchased on the open market with the proceeds of a stock option exercise price
☒		Permit transferability of stock options for consideration

⁵As defined in the proxy statement.

☒		Permit single-trigger change in control agreements for Named Executive Officers and certain other executives
☒		Permit change in control tax gross-ups for executives
☒		Permit a liberal change in control definition in our equity plan
☒		Permit pledging, short sales or hedging of Company securities by directors, officers, or other employees
☒		Permit directors, officers, or other employees to hold Company securities in margin accounts or otherwise to pledge Company securities as collateral for loans

Recent Developments

This past year, we have augmented our governance and executive compensation practices in the following ways:

		Added two new independent members of the Board: Dennis W. Pullin, who is a member of our Compensation Committee and our Nominating/Corporate Governance Committee, and Inderpreet Sawhney, who is a member of our Audit Committee and our Nominating/Corporate Governance Committee
		Completed our CEO transition, with Joe A. Raver retiring and Kimberly K. Ryan being elected President and Chief Executive Officer and appointed a member of the Board
		Published our second annual sustainability report, or Communication on Progress, under the United Nations Global Compact, including core elements of the GRI Standards from the Global Reporting Initiative
		Adopted the Company’s Third Amended and Restated Short-Term Incentive Compensation Plan to, among other things, expand the list of potential performance goals to include additional financial and operational metrics, as well as diversity, equity, and inclusion (DE&I) and environmental, social, and governance (ESG) metrics, and to make other changes in accordance with prevailing market practices
		Measured performance for STIC purposes based on two six-month performance periods and also modified the payout curves, given the uncertainty associated with the COVID-19 pandemic, and added the creation of specific plans to increase workforce diversity as part of the Named Executive Officers’ collective performance goal relating to diverse talent pools

		Engaged a new independent compensation committee consultant, Pay Governance LLC, following a robust proposal and interview process
		Adopted our Amended and Restated Stock Incentive Plan, approved by our shareholders, including a new limit on total annual base compensation for non-employee directors

HILLENBRAND, INC.

PROXY STATEMENT

This proxy statement relates to the solicitation by the Board of Directors of Hillenbrand, Inc. (the “Company” or “Hillenbrand”) of proxies for use at the Annual Meeting of the Company’s shareholders to be held at the Company’s headquarters at One Batesville Boulevard, Batesville, Indiana 47006, telephone (812) 934-7500, on Thursday, February 10, 2022, at 10:00 a.m. Eastern Standard Time, and at any postponements or adjournments of the meeting. This proxy statement was first mailed to shareholders on or about December 30, 2021.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

The following questions and answers will explain the purpose of this proxy statement and what you need to know to vote your shares. Throughout these questions and answers and the proxy statement, we sometimes refer to Hillenbrand and the Company in terms of “we,” “us,” or “our.”

What is the purpose of this proxy statement?

The Board of Directors of Hillenbrand (the “Board”) is soliciting your proxy to vote at the 2022 Annual Meeting of shareholders of Hillenbrand because you were a shareholder at the close of business on December 13, 2021, the record date for the 2022 Annual Meeting, and are entitled to vote at the Annual Meeting. The record date for the 2022 Annual Meeting was established by the Board in accordance with our Amended and Restated Code of By-laws (the “By-laws”) and Indiana law.

This proxy statement contains the matters that must be set out in a proxy statement according to the rules of the U.S. Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange and provides the information you need to know to vote at the Annual Meeting. You do not need to attend the Annual Meeting to vote your shares.

What is the difference between holding shares as a “shareholder of record” and as a “beneficial owner”?

If your shares are registered directly in your name with Hillenbrand’s transfer agent, Computershare Investor Services, LLC, you are the “shareholder of record” with respect to those shares, and you tell us directly how your shares are to be voted.

If your shares are held in a stock brokerage account or by a bank or other nominee, then your nominee is the shareholder of record for your shares and you are considered the “beneficial owner” of shares held in street name. As the beneficial owner, you direct your broker, bank, or nominee how to vote your shares.

Q :

What am I being asked to vote on?

●

Election of six directors for the terms set forth under Proposal No. 1 – Election of Directors: Gary L. Collar, F. Joseph Loughrey, Joy M. Greenway, Dennis W. Pullin, Kimberly K. Ryan, and Inderpreet Sawhney;

●

Approval, by a non-binding advisory vote, of the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to SEC compensation disclosure rules in the “Compensation Discussion and Analysis” and “Executive Compensation Tables” sections of this proxy statement and in any related material herein (the “Say on Pay Vote”); and

●

Ratification of the appointment of Ernst & Young LLP (“EY’) as the Company’s independent registered public accounting firm for fiscal year 2022.

The Board recommends a vote FOR each of the director nominees; FOR approval of the compensation paid to the Named Executive Officers of the Company pursuant to the Say on Pay Vote; and FOR the ratification of the appointment of EY as the Company’s independent registered public accounting firm for fiscal year 2022.

Our Named Executive Officers are those officers specified by Item 402(a)(3) of Regulation S-K. See the introductory discussion in Part I under “Executive Compensation” for more information regarding Named Executive Officers.

Q:	What are the voting requirements to elect the directors and to approve the other proposals being voted on?

The Restated and Amended Articles of Incorporation of Hillenbrand (as amended to date, the “Articles of Incorporation”) provide that in an uncontested election, the directors are elected by a majority of the votes cast at the Annual Meeting. This means that to be elected, the number of votes cast “for” a director nominee must exceed the number of votes “withheld” from that nominee.

The adoption of each of the proposals (a) to approve, by a non-binding advisory vote, the compensation paid to the Named Executive Officers, and (b) to ratify the appointment of EY as the Company’s independent registered public accounting firm for fiscal year 2022 requires the affirmative vote of a majority of the votes cast for or against approval.

If you are present or represented by proxy at the Annual Meeting and you affirmatively elect to abstain, your abstention, as well as any broker non-votes, will not be counted as votes cast on any matter to which they relate. See “How will my shares be voted?” below for more information about broker non-votes.

Q:	How many votes do I have?

A:	You are entitled to one vote for each share of Hillenbrand common stock that you held as of the record date.

Q:	How do I vote?

A:	The different ways that you (if you are a shareholder of record) or your nominee (if you are a beneficial owner) can vote your shares depend on how you received your proxy statement this year.

For shareholders of record, many of you were not mailed a paper copy of proxy materials, including this proxy statement, a proxy card, and our 2021 Annual Report to Shareholders. Instead, commencing on or about December 30, 2021, we sent you a Notice of Internet Availability of Proxy Materials (“Notice”) telling you that proxy materials are available at the web site indicated in that Notice, www.proxyvote.com, and giving you instructions for voting your shares at that web site. We also told you in that Notice (and on the web site) how you can request us to mail proxy materials to you. If you subsequently do receive proxy materials by mail, you can vote in any of the ways described below. If not, you must vote via the Internet (and we encourage you to do so) at www.proxyvote.com, by telephone, or in person at the Annual Meeting as explained below.

With respect to shareholders of record who received proxy materials by mail, we commenced mailing on or about December 30, 2021. You can vote using any of the following methods:


		Proxy card or voting instruction card. Be sure to complete, sign, and date the card and return it in the prepaid envelope.

		By telephone or the Internet. The telephone and Internet voting procedures established by Hillenbrand for shareholders of record are explained in detail on your proxy card and in the Notice many shareholders receive. These procedures are designed to authenticate your identity, to allow you to give your voting instructions, and to confirm that these instructions have been properly recorded.

		In person at the Annual Meeting. You may vote in person at the Annual Meeting. You may also be represented by another person at the meeting by executing a proper proxy designating that person. If you are not the record holder of your shares and want to attend the meeting and vote in person, you must obtain a legal proxy from your broker, bank, or nominee and present it to the inspectors of election with your ballot when you vote at the meeting.

With respect to the beneficial owners of shares held by nominees, the methods by which you can access proxy materials and give voting instructions to your nominee may vary, depending on the nominee. Accordingly, if you are such a beneficial owner, you should follow the instructions provided by your nominee.

Q:	I share an address with another shareholder and we received only one Notice of Internet Availability of Proxy Materials or one paper copy of the proxy materials, as applicable. How may I obtain an additional copy?

The Company has adopted a procedure approved by the SEC called “householding.” Under this procedure, the Company is delivering a single copy of either the Notice of Internet Availability of Proxy Materials or a paper copy of the proxy materials, as applicable, to multiple shareholders who share the same address, unless the Company has received contrary instructions from one or more of the shareholders. This procedure reduces the Company’s printing costs, mailing costs, and fees. Shareholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, a separate copy of the Notice of Internet Availability of Proxy Materials or a paper copy of the proxy materials or the annual report, as applicable, will be promptly delivered to any shareholder at a shared address to which the Company delivered a single copy. To receive a separate copy, or a separate copy of future materials, shareholders may write or call the Company’s Investor Relations Department at One Batesville Boulevard, Batesville, Indiana 47006, telephone (812) 931-6000, and facsimile (812) 931-5209. Shareholders who hold shares in street name may contact their broker, bank, or other nominee to request information about householding.

Q:	How will my shares be voted?

For shareholders of record, all shares represented by the proxies mailed to shareholders will be voted at the Annual Meeting in accordance with instructions given by the shareholder. Where proxies are returned without instructions, the shares will be voted: (1) FOR election of each of the six nominees named above as directors of the Company; (2) FOR approval, by a non-binding advisory vote, of the compensation paid to the Named Executive Officers pursuant to the Say on Pay Vote; (3) FOR ratification of the appointment of EY as the independent registered public accounting firm of the Company for fiscal year 2022; and (4) in the discretion of the proxy holders, upon such other business as may properly come before the Annual Meeting (we are not currently aware of any other matter that may come before the meeting). Where a proxy is not returned, your shares will not be voted unless you attend the Annual Meeting and vote in person (including by means of remote communication, if applicable).

For beneficial owners, the brokers, banks, or nominees holding shares for the beneficial owner must vote those shares as instructed. If the broker, bank, or nominee has not received instructions from the beneficial owner, the broker, bank, or nominee generally has discretionary voting power only with respect to matters that are considered routine matters. Under applicable New York Stock Exchange rules, Proposal No. 1 relating to election of directors and Proposal No. 2 relating to a non-binding advisory vote to approve Named Executive Officer compensation, are deemed to be non-routine matters with respect to which brokers and nominees may not exercise their voting discretion without receiving instructions from the beneficial owners of the shares (this is referred to as a “broker non-vote”). Proposal No. 3 relating to ratification of the appointment of EY as the independent registered public accounting firm of the Company for fiscal year 2022 is a matter on which brokers holding stock for the accounts of their clients who have not been given specific voting instructions are allowed to vote client shares. To avoid a broker non-vote of your shares on Proposals No. 1 and 2, you must send voting instructions to your bank, broker, or nominee or obtain a legal proxy and vote your shares in person at the Annual Meeting.

Q:	What can I do if I change my mind after I vote my shares prior to the Annual Meeting?

A:	If you are a shareholder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by:

●

sending written notice of revocation to the Secretary of Hillenbrand at One Batesville Boulevard, Batesville, Indiana 47006;

●

submitting a revised proxy by telephone, Internet, or paper ballot after the date of the revoked proxy; or

SEC Form DEF 14A filed by Hillenbrand Inc