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Item 11. | Executive Compensation |
COMPENSATION DISCUSSION AND ANALYSIS
This section provides an overview and analysis of our compensation program and policies, the material compensation decisions made under those programs and policies, and the material factors considered in making those decisions. The discussion below is intended to help you understand the detailed information provided in our executive compensation tables and put that information into context within our overall compensation program. The series of tables following this Compensation Discussion and Analysis provides more detailed information concerning compensation earned or paid in Fiscal 2016, Fiscal 2015 and Fiscal 2014 for the following individuals (each a “named executive officer” during Fiscal 2016):
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• | Omar M. Asali, a Director, our President and Chief Executive Officer; |
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• | David M. Maura, a Director, and our former Managing Director and Executive Vice President of Investments; |
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• | George Nicholson, our Senior Vice President, Chief Financial Officer and Chief Accounting Officer; and |
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• | Thomas A. Williams, our former Executive Vice President and Chief Financial Officer. |
As previously disclosed, Mr. Williams’ employment with the Company terminated on January 1, 2016, which was prior to the completion of Fiscal 2016; Mr. Maura’s employment with the Company terminated on November 28, 2016, which was after the completion of Fiscal 2016; and it is expected that Mr. Asali’s employment with the Company will cease in Fiscal 2017.
Executive Summary
Highlights for Fiscal 2016
During Fiscal 2016, we executed on a number of strategic initiatives, including:
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• | At HRG, during Fiscal 2016 we increased our “Net Asset Value” (as defined below) from both the beginning of Fiscal 2016 and the end of Fiscal 2014, which are discussed further below. We believe that Net Asset Value is a good proxy for creation of value for the Company and its stockholders. |
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• | At HRG, simplifying our corporate structure by selling our remaining interest in Compass Production Partners, L.P. (“Compass”), selling our remaining 51.0% interest in CorAmerica Capital, LLC (“CorAmerica”), winding down the operations of Energy & Infrastructure Capital, LLC and progressing the wind down of Salus. |
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• | At Spectrum Brands, refinancing a portion of its indebtedness to extend maturities and reduce borrowing costs by issuing €425.0 million aggregate principal amount of 4.00% notes due 2026 and using the proceeds to repay a portion of the amounts outstanding on the 6.375% notes due 2020 and amending its credit agreement. |
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• | At Spectrum Brands, integrating the recent acquisition of the Global Auto Care business and realizing synergies through a series of initiatives to consolidate certain operations and reduce operating costs, including the exit of certain facilities. |
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• | At FGL, continuing to pursue the closing of the merger with Anbang Insurance Group Co., Ltd. and FGL. |
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• | At Salus, recovering $45.4 million on the loan to a significant borrower in default, exceeding the previous estimate of recovery and reversing $18.0 million of previously recorded allowance for bad debt. |
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• | At HGI Energy, completing the sale of the Holly, Waskom and Danville assets for a total cash consideration of $153.4 million and using the proceeds primarily to reduce Compass’ borrowings under its credit facility. |
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• | At HGI Energy, completing the sale of our equity interests in Compass to a third party for a cash purchase price of $145.0 million with the proceeds received reduced by the outstanding balance of Compass’ existing credit facility of $125.2 million. |
The foregoing is a highlight summary of only certain of HRG’s performance measures as of the end of Fiscal 2016. For a more complete understanding and evaluation of the business and financial results of the Company and its subsidiaries, you are encouraged to read the Company’s other reports filed with the SEC.
Summary of Sound Governance Features of our Compensation Programs for Fiscal 2016
Listed below are some of the Company’s more significant practices and policies that were in effect during Fiscal 2016, which were adopted to drive performance and to align our executives’ interests with those of our stockholders. Our compensation programs, practices and policies are reviewed and re-evaluated periodically, and are subject to change from time to time and at any time.
