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DEF 14A 1 rgrdef14aproxy.htm NOTICE OF ANNUAL MEETING OF STOCKHOLDERS EDGAR HTML

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SCHEDULE 14A INFORMATION

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	Sturm, Ruger & Company, 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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STURM, RUGER & COMPANY, Inc.

1 LACEY PLACE, SOUTHPORT, CT 06890 U.S.A. | 203-259-7843 | WWW.RUGER.COM | NYSE:RGR

April 22, 2022

Dear Fellow Stockholders:

In light of the COVID-19 pandemic and in the interest of employee and shareholder safety, we have again decided to forego a live Annual Meeting of Stockholders in favor of a “virtual” meeting. You are cordially invited to participate in the 2022 Annual Meeting of Stockholders of Sturm, Ruger & Company, Inc. to be held at 9:00 a.m. Eastern Daylight Time on Wednesday, June 1, 2022. Details regarding how to participate in the meeting and the business to be conducted at the meeting are given in the attached Notice of Annual Meeting and Proxy Statement.

The Board of Directors looks forward to your participation in the 2022 Annual Meeting.

	STURM, RUGER & COMPANY, INC.


	Christopher J. Killoy
	Chief Executive Officer

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STURM, RUGER & COMPANY, Inc.

1 LACEY PLACE, SOUTHPORT, CT 06890 U.S.A. | 203-259-7843 | WWW.RUGER.COM | NYSE:RGR

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

June 1, 2022

NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Stockholders of STURM, RUGER & COMPANY, INC. (the “Company”) will be held on June 1, 2022 at 9:00 a.m. Eastern Daylight Time. The Annual Meeting of Stockholders will be a virtual meeting webcast live via the Internet. You will be able attend the meeting, vote, and submit questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/RGR2022 and entering the 16-digit control number on your proxy card or the instructions included in your proxy materials. The following matters will be considered and acted upon at the Annual Meeting of Stockholders:

A proposal to elect nine (9) Directors to serve on the Board of Directors for the ensuing year;

A proposal to ratify the appointment of RSM US LLP as the Company’s independent auditors for the 2022 fiscal year;

An advisory vote on the compensation of the Company’s Named Executive Officers;

A shareholder proposal to require the Company to oversee a third-party Human Right Impact Assessment; and

Any other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Only holders of record of Common Stock at the close of business on April 7, 2022 will be entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. The complete list of stockholders entitled to vote at the Annual Meeting shall be open to the examination of any stockholder, for any purpose germane to the Annual Meeting, during ordinary business hours, for a period of 10 days prior to the Annual Meeting, at the Company’s offices located at 1 Lacey Place, Southport, CT 06890.

The Company’s Proxy Statement is attached hereto.

	By Order of the Board of Directors

	Kevin B. Reid, Sr.
	Corporate Secretary

Southport, Connecticut

April 22, 2022

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO PARTICIPATE IN THE LIVE ANNUAL MEETING VIA THE INTERNET AT WWW.VIRTUALSHAREHOLDERMEETING.COM/RGR2022. YOUR VOTE IS IMPORTANT. TO ENSURE THAT YOUR VOTE IS RECORDED PROMPTLY, PLEASE VOTE YOUR PROXY AS SOON AS POSSIBLE, EVEN IF YOU PLAN TO PARTICIPATE IN THE ANNUAL MEETING. MOST STOCKHOLDERS HAVE THREE OPTIONS FOR SUBMITTING THEIR VOTES PRIOR TO THE ANNUAL MEETING: (1) VIA THE INTERNET AT WWW.PROXYVOTE.COM, (2) BY TELEPHONE AT 1-800-690-6903, OR (3) BY REQUESTING AND RETURNING A PAPER PROXY USING THE POSTAGE-PAID ENVELOPE PROVIDED. STOCKHOLDERS MAY REQUEST THE PROXY MATERIALS AT WWW.PROXYVOTE.COM OR BY CALLING 1-800-579-1639.

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Table of Contents

	Page

Proxy Solicitation And Voting Information	1
List Of Proposals And Recommendations Of The Board of Directors	2
Proposal No. 1 – Election Of Directors	2
Proposal No. 2 – Ratification Of Independent Auditors	2
Proposal No. 3 – Say On Pay	3
Proposal No. 4 – Shareholder Proposal	3
Proposal No. 1 – Election Of Directors	4
Director Nominees	4
The Board Of Directors, Its Committees And Policies	7
Corporate Board Governance Guidelines And Code Of Business Conduct And Ethics	8
Political Contributions Policy	8
Human Rights	8
Diversity And Inclusion	8
Human Capital	8
The Board’s Role In Risk Oversight	9
Independent, Non-Management Directors	9
Board Leadership Structure	9
Director Resignation Policy	10
Membership And Meetings Of The Board And Its Committees	10
Membership And Meetings Of The Board And Its Committees Table For Year 2021	10
Committees Of The Board	11
Audit Committee	11
Report Of The Audit Committee	12
Compensation Committee	13
Compensation Committee, Interlocks And Insider Participation	13
Compensation Committee Report On Executive Compensation	13
Nominating And Corporate Governance Committee	14
Risk Oversight Committee	15
Capital Policy Committee	16
Director Compensation	17
Directors’ Fees And Other Compensation	17
Directors’ Compensation Table For Year 2021	19
Directors’ and Executive Officers’ Beneficial Equity Ownership	20

Table of Contents

(Continued)

	Page

Beneficial Ownership Of Directors And Management Table	20
Delinquent Section 16(a) Reports	21
Certain Relationships And Related-Party Transactions	21
Principal Stockholders	22
Proposal No. 2 – Ratification Of Independent Auditors	23
Principal Accountants’ Fees And Services	23
Policy On Audit Committee Pre-Approval Of Audit And Permissible Non-Audit Services Of Independent Auditors	23
Proposal No. 3 – Advisory Vote On Compensation Of Named Executive Officers	24
Proposal No. 4 – Shareholder Proposal	25
Compensation Discussion And Analysis	29
How Did The Company Perform In 2021 And How Did We Compensate Our Executives?	29
What Are The Company’s Philosophy And Objectives Regarding Compensation?	29
What Are The Elements Of The Company’s Executive Remuneration And The Objectives Of Each?	30
How Does The Company Determine The Amount/Formula For Each Element?	31
How Are Salaries Determined?	31
How Are Profit Sharing And Bonuses Determined?	32
How Are Equity Compensation Awards Determined?	33
Clawback Policy: Hedging Policy	34
What Are The Company’s Health, Welfare And Retirement Benefits?	34
Does The Company Provide Perquisites?	34
How Is The Chief Executive Officer’s Performance Evaluated And Compensation Determined?	35
What Are The Company’s Governance Practices Regarding Compensation?	36
What Are The Company’s Governance Practices Regarding Stock Awards?	37
How Does The Compensation Committee Utilize Independent Consultants?	37
How Does The Company Evaluate Its Compensation Program Risks?	37
Executive Compensation	38
Target Compensation Table	38
2021 Summary Compensation Table	39
Summary All Other Compensation Table	41
Chief Executive Officer Pay Ratio	42
Grants Of Plan-Based Awards Table	43

Table of Contents

(Continued)

	Page

Outstanding Equity Awards At Fiscal Year-End 2021 Table	44
Option Exercises And Stock Vested In 2021 Table	46
Potential Payments Upon Termination Or Change In Control	47
Payments On Change In Control	47
Covered Terminations And Severance Payments Pursuant To Change In Control Agreements	47
Change In Control Events And Severance Benefits Not Covered By The Severance Agreements	47
Change In Control Definition	47
Termination By Death Or Disability	48
Termination By Retirement	48
Voluntary And Involuntary Termination	48
Retention And Transition Agreements	49
Potential And Actual Payments Under Severance Agreements Table	50
Pension Plans	51
Stockholder Proposals And Director Nominations For 2023	52
Stockholder And Interested Party Communications With The Board Of Directors	52
Other Matters	53

iii

Name	Board of Directors	Audit Committee	Compensation Committee	Nominating and Corporate Governance Committee	Risk Oversight Committee	Capital Policy Committee
Ronald C. Whitaker	Chairman	Member	Member
John A. Cosentino, Jr.	Lead Vice Chairman	Member	Chair
Amir P. Rosenthal	Member	Chair		Member	Member	Member
C. Michael Jacobi	Member		Member	Member
Phillip C. Widman	Member		Member		Chair	Member
Terrence G. O’Connor	Member	Member		Member	Member	Chair
Sandra S. Froman	Member		Member	Chair	Member
Michael O. Fifer	Vice Chairman				Member	Member
Christopher J. Killoy	Member					Member
Total Number of Meetings	14	5	3	4	4	4

	AUDIT COMMITTEE

	Amir P. Rosenthal, Chairman
	John A. Cosentino, Jr.
	Terrence G. O’Connor
	Ronald C. Whitaker

	COMPENSATION COMMITTEE

	John A. Cosentino, Jr., Chairman
	C. Michael Jacobi
	Sandra S. Froman
	Ronald C. Whitaker
	Phillip C. Widman


*	The report of the Compensation Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing of the Acts, except to the extent that the Company specifically incorporates such report by reference; and further, such report shall not otherwise be deemed to be “soliciting material” or “filed” under the Acts.

Chairman of the Board	$168,000
Lead Vice Chairman	$144,000
Vice Chairman	$135,000
All others	$120,000

Audit	$18,000
Capital Policy	$12,000
Compensation	$12,000
Nominating and Corporate Governance	$12,000
Risk Oversight	$12,000

Name	Fees Earned or Paid in Cash (1) ($)	Number of Shares Underlying Stock Awards (#)	Stock Awards (2) ($)	Other Compensation (3) ($)	Total Director Compensation (4) ($)
Ronald C. Whitaker	$112,000	1,599	$116,000	$15,688	$243,688
John A. Cosentino, Jr.	$104,000	1,544	$112,000	$15,158	$231,158
Amir P. Rosenthal	$90,000	1,461	$106,000	$14,092	$210,092
C. Michael Jacobi	$84,000	1,378	$100,000	$14,092	$198,092
Phillip C. Widman	$90,000	1,433	$104,000	$14,360	$208,360
Terrence G. O’Connor	$88,000	1,433	$104,000	$14,092	$206,092
Sandra S. Froman	$84,000	1,433	$104,000	$2,864	$190,864
Michael O. Fifer	$90,000	1,447	$105,000	$29,737	$224,737

(1)	See “DIRECTORS’ FEES AND OTHER COMPENSATION” above.
(2)	Represents aggregate grant date fair value of non-qualified equity awards made to each non-management Director on May 13, 2021 under the 2017 Stock Incentive Plan in accordance with the Director annual fee schedule approved in July 2020. The amounts shown represent the full grant date fair value of the awards calculated in accordance with the provisions of FASB ASC 718, and are shown at the maximum unit value expected upon the attainment of the time-based vesting of the awards.
(3)	Consists of accrued dividends paid upon the May 12, 2021 and May 15, 2021 vesting and conversion of restricted stock units awarded to each Director as described above. In addition, Ms. Froman received accrued dividends upon the vesting of long-term restricted stock units, which she received upon joining the Board of Directors on March 1, 2016.
(4)	The Company’s non-management Directors do not receive non-equity incentive plan compensation, stock options, pension benefits or non-qualified deferred compensation.

Name	Beneficially Owned Shares of Common Stock	Stock Options Currently Exercisable or to Become Exercisable within 60 days after April 7, 2022	Total Shares Beneficially Owned	Percent of Class
Non-Management Directors:
Ronald C. Whitaker	23,719	0	23,719	*
John A. Cosentino, Jr.	5,974	0	5,974	*
Amir P. Rosenthal	13,793	0	13,793	*
C. Michael Jacobi	6,359	0	6,359	*
Phillip C. Widman	26,169	0	26,169	*
Terrence G. O’Connor	6,026	0	6,026	*
Sandra S. Froman	11,910	0	11,910	*
Michael O. Fifer	5,023	0	5,023	*
Rebecca S. Halsted	0	0	0	*

Christopher J. Killoy (also a Director)	150,395	0	150,395	0.9%
Thomas A. Dineen	51,752	0	51,752	*
Thomas P. Sullivan	40,267	0	40,267	*
Kevin B. Reid, Sr.	39,681	0	39,681	*
Shawn C. Leska	24,303	0	24,303	*
Directors and executive officers as a group: (8 non-management Directors, 1 Director who is also an executive officer, 1 Nominee for Director and 9 other executive officers)	509,814	0	509,814	2.9%

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership (1) (#)	Percent of Class (%)
Common Stock	BlackRock Inc. 55 East 52^nd Street New York, NY 10055	2,792,671	15.9%
Common Stock	The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, PA 19355	1,888,300	10.7%
Common Stock	Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation 800 Third Avenue New York, NY 10022	1,030,575	5.9%

Remuneration Element	Description	Primary Objectives
Base Salary	Reflects fixed compensation.	• Attract and retain employees over time • Provide a base level of total compensation to reflect an individual’s role and responsibilities
Annual Non-Equity Incentives	Comprised of a performance-based annual bonus and a profit-sharing program.	• Focus executives and employees on important short-term Company-wide performance goals • Recognize and reward overall annual business results and individual / team contributions
Equity Compensation	Certain executives also receive annual awards of restricted stock units. Certain of these awards have performance-based criteria and others have time-based vesting criteria. Performance criteria include return on net operating assets.	• Focus executives and employees on important long-term Company-wide performance goals including increases to the Company’s stock price over a period of several years, growth in its earnings, return on net operating assets, and other measurements of corporate performance • Align our executives with the interests of shareholders and deliver a superior rate of return • Retain executives and employees over time
Health, Welfare and Retirement Benefits	Generally reflect those benefits provided to our broad employee population.	• Attract and retain employees over time • Provide for the safety, security and wellness of employees
Severance Arrangements	Specific severance agreements for Officers that provide benefits when employment terminates as a result of a change in control or by the Company without cause.	• Facilitate the Company’s ability to attract and retain talented executives • Encourage executives and employees to remain focused on the Company’s business during times of corporate change

Name	2021 Base Salary	Effective Date
Christopher J. Killoy(a)	$700,000	May 16, 2020
Thomas A. Dineen	$425,000	May 16, 2020
Thomas P. Sullivan	$375,000	May 16, 2020
Kevin B. Reid	$325,000	May 16, 2020
Shawn C. Leska	$300,000	May 16, 2020

Performance-Based Non-Equity Awards
Name	2021 Base Salary	2021 Target Award		2021 Actual Award (b)
Name	2021 Base Salary	% of Salary	$ Value	2021 Actual Award (b)
Christopher J. Killoy (a)	$700,000	100%	$700,000	$962,500
Thomas A. Dineen	$425,000	75%	$318,800	$438,300
Thomas P. Sullivan	$375,000	75%	$281,300	$386,700
Kevin B. Reid	$325,000	75%	$243,800	$335,200
Shawn C. Leska	$300,000	67%	$201,000	$275,000

	(a)	See “DIRECTORS’ FEES AND OTHER COMPENSATION,” above, for a summary of Mr. Killoy’s compensation structure.
	(b)	Represents target bonus dollar value time the sum of the EBIT payout (146.8% X 80% weighting) and the Non-Financial Objectives payout (100% X 20% weighting).

Principal Accountants’ Fees
	2021	2020
Audit Fees	$779,300	$758,900
Audit-Related Fees	$27,600	$27,600
Tax Fees	$15,500	$15,500
All Other Fees	-	-
Total Fees	$822,400	$802,000

Name	2021 Profit Sharing
Christopher J. Killoy	$220,497
Thomas A. Dineen	$133,873
Thomas P. Sullivan	$118,123
Kevin B. Reid	$102,374
Shawn C. Leska	$ 94,499

2021 Target Performance-Based Equity Award
Name	2021 Base Salary	% of Salary	$ Value	Number of RSUs Awarded
Christopher J. Killoy (c)	$700,000	125%	$875,000	12,811
Thomas A. Dineen	$425,000	75%	$318,800	4,667
Thomas P. Sullivan	$375,000	75%	$281,300	4,118
Kevin B. Reid	$325,000	75%	$243,800	3,569
Shawn C. Leska	$300,000	67%	$201,000	2,943

Percentage Achievement of Target	Resulting Payout (as a % of Target)
Less than 50%	No payout
50% to 100%	0% to 100%
100% to 150%	100% to 200%
Greater than 150%	200%

2021 Target Time-Vesting Equity Award
Name	2021 Base Salary	% of Salary	$ Value	Number of RSUs Awarded
Christopher J. Killoy (d)	$700,000	125%	$875,000	12,811
Thomas A. Dineen	$425,000	75%	$318,800	4,667
Thomas P. Sullivan	$375,000	75%	$281,300	4,118
Kevin B. Reid	$325,000	75%	$243,800	3,569
Shawn C. Leska	$300,000	67%	$201,000	2,943

		Cash Compensation				Equity Compensation
Named Executive Officer and Principal Position	Year	Salary (1)	Bonus	Profit Sharing	Performance Based Non-Equity Compensation Opportunity	Performance Based Stock Award Opportunity (2)	Retention Award Opportunity (3)	All Other Compen- sation (4)	Total Target Compensation

Christopher J. Killoy President and Chief Executive Officer	2021 2020 2019	$700,000 $700,000 $500,000	$0 $0 $0	$105,000