SEC Form DEF 14A filed by D/B/A Compass Diversified Holdings Shares of Beneficial Intere

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Even with the best products and most well-crafted strategies, outstanding results are only possible with great leadership and dedicated teams. Our values-driven culture means we are able to attract and retain top-tier talent both at CODI and across our subsidiaries. On behalf of the Board, I would like to take this opportunity to recognize our management team, whose commitment to fostering a culture of innovation allows us to seize and invest in growth opportunities while staying true to the principles that define CODI. Equally, I want to recognize the employees whose hard work and commitment bring these values to life each day. I also want to thank the management teams and staff at our subsidiaries, who are executing their growth strategies, challenging the status quo, and delivering exceptional outcomes for all of our stakeholders.

We recently revised our Management Services Agreement to better align management compensation with shareholder interests and increase Board oversight. Key changes include implementing a sliding scale for management fees, eliminating integration service fees on acquisitions, and establishing an incentive management fee, which is subject to approval by the Board’s compensation committee and is paid only when certain financial hurdles are met. Collectively, these changes will reduce long-term costs for shareholders and ensure a stronger alignment between our leadership team and the shareholders we serve.

During 2024, we repurchased over 400,000 common shares returning over $9.2 million to shareholders. This reflects our commitment to deploy and distribute capital to maximize shareholder value. While our primary focus remains funding our strategic growth initiatives and optimizing return on invested capital, we made the decision to opportunistically repurchase shares when we believed our stock was trading below its intrinsic value. This disciplined approach allowed us to deliver long-term value for our shareholders while maintaining financial flexibility.

Over the past few years, we have taken steps to further strengthen our governance and refresh our Board. We began the process in 2022 when we appointed an independent Board Chair and eliminated staggered terms for our directors. That same year, and continuing through 2023, we added four new directors, bringing fresh perspectives, diverse skills, and updated knowledge to the organization. The retirement of two of our longest-tenured Board members this year is the final step in a planned succession strategy, which was designed to facilitate continuity and knowledge transfer, while introducing new ideas and viewpoints. We believe our Board is well positioned to continue to effectively oversee CODI’s evolving strategy and identify and manage risks in a changing market.

On behalf of the Board and the entire organization, I want to take this opportunity to thank Jim Bottiglieri for his 20 years of service to CODI as both a key member of the management team and, most recently, as a Board member. Jim was critical to our initial public offering and has been a valued member of our Board, providing deep institutional knowledge, financial expertise, and wise counsel to the Board and management. We truly appreciate all he has done. The Board would also like to thank Gordon Burns for his 17 years of dedicated service on our Board. His leadership and support have been instrumental to CODI’s success, and we deeply appreciate his contributions.

This Proxy Statement provides important information about our Board and governance practices, executive compensation structure, and corporate responsibility and sustainability — key components of our commitment to transparency, accountability, and long-term value creation. Please join us at 12:00 p.m., Eastern Time, on May 29, 2025, for our 2025 Annual Meeting of Shareholders. You can attend virtually by registering here: virtualshareholdermeeting.com/CODI2025.

Although the current market conditions and uncertainties present challenges, looking ahead, long-term we see significant opportunities and a bright future for CODI. Thank you for your continued trust and support as we embark on another year of proactive risk oversight, strategic adaptation, innovation and long-term value creation.

Sincerely,

 

Compass Diversified Holdings’ 2025 Annual Meeting of Shareholders (the “Annual Meeting”) will be held via live audio webcast on Thursday, May 29, 2025, at 12:00 p.m. Eastern Time. This year’s Annual Meeting will be a completely virtual meeting, which means that you will be able to participate in the meeting, vote and submit your questions during the meeting online at: virtualshareholdermeeting.com/CODI2025. You will not be able to attend the Annual Meeting in person.

The Annual Meeting is being held for the following purposes:

Shareholders may also be asked to consider and act upon such other matters as may properly come before the meeting, or any adjournment(s) or postponement(s) thereof.

These matters are more fully described in the Proxy Statement. Our Board of Directors (our “Board”) recommends that you vote “FOR ALL” six (6) of the director nominees to be elected, “FOR” the resolution approving, on a non-binding and advisory basis, the Say-on-Pay Vote, and “FOR” the ratification of Grant Thornton LLP as the independent auditor for Compass Diversified Holdings and Compass Group Diversified Holdings LLC for the fiscal year ending December 31, 2025. Our Board knows of no other matters at this time that may be properly brought before the meeting.

Shareholders of record at the close of business on April 1, 2025, are entitled to notice of, and to vote at, the Annual Meeting and at any subsequent adjournment(s) or postponement(s) thereof. A list of these shareholders will be available for inspection for 10 days preceding the Annual Meeting at our principal executive offices located at 301 Riverside Avenue, 2nd Floor, Westport, CT 06880. The Notice of Annual Meeting, proxy card, Proxy Statement and related materials and the Company’s Annual Report to Shareholders, which we refer to as the “Proxy Materials” are first being sent or made available to shareholders on or about April 14, 2025.

Please carefully read the sections in the Proxy Statement on attending via live audio webcast and voting at the Annual Meeting to ensure that you comply with these requirements.

Important Notice Regarding Availability of Proxy Materials for the Annual Meeting. We are pleased to save costs and help protect the environment by using the Notice and Access method of delivery. Instead of receiving paper copies of our Proxy Materials in the mail, many shareholders will receive a Notice of Internet Availability of Proxy Materials (“Notice”), which provides an internet website address where shareholders can access electronic copies of Proxy Materials and vote. This website also has instructions for voting by telephone and for requesting paper copies of the Proxy Materials and proxy card. The Company’s 2025 Proxy Statement and 2024 Annual Report are available online at proxyvote.com. We encourage you to access and review such materials before voting.

Your vote is important to us. Whether or not you expect to attend the Annual Meeting via webcast, we urge you to consider the Proxy Statement carefully and to promptly vote your shares. To be sure that your shares are properly represented at the meeting, whether or not you attend virtually, please submit your vote through the internet at the website shown on the proxy card or Notice, or by telephone at the number shown on the proxy card or Notice; or, if you received paper copies of your Proxy Materials by mail, by completing, dating, signing, and returning the enclosed proxy card as promptly as possible. We must receive any proxy that will not be delivered during the Annual Meeting webcast no later than 11:59 p.m., Eastern Time on Wednesday, May 28, 2025.

By Order of the Board of Directors,

 

Compass Diversified Holdings, a Delaware statutory trust, which we refer to as the “Trust”, owns its businesses through Compass Group Diversified Holdings LLC, a Delaware limited liability company, which we refer to as the “Company.” Except where the context indicates otherwise, “we,” “us,” and “our” refer to the Company and the Trust. References to “shareholders” refer to shareholders of the Trust. This Proxy Statement and the accompanying materials contain “forward-looking” statements regarding the Trust’s and the Company’s current expectations within the meaning of the applicable securities laws and regulations. Forward-looking statements generally are identified by words such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “likely,” “potential” or “continue” or other similar terms or expressions. All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict. These risks and uncertainties include, but are not limited to, the factors and risks detailed in our filings with the Securities and Exchange Commission (the “SEC”), including the sections titled “Statement Regarding Forward-Looking Disclosures” and “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our expectations, objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on our forward-looking statements and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

 

Our Board, upon the recommendation of the Nominating/Governance Committee, has nominated the following six (6) directors for election to the Board: Larry L. Enterline, Alexander S. Bhathal, Harold S. Edwards, Heidi Locke Simon, Nancy B. Mahon, and Teri R. Shaffer.

If elected, each director will hold office until the 2026 Annual Meeting of Shareholders and/or until their successor is elected and qualified.

Our Board recommends that you vote FOR ALL six (6) of the director nominees to be elected to our Board, in each case, for a one-year term ending at the 2026 Annual Meeting of Shareholders.

Please see the following pages for additional information on the director nominees.

 

The names, ages (as of April 1, 2025), and positions of our director nominees are as follows:

The following describes the experience, education and other qualifications of each of the director nominees to be voted on for election at the 2025 Annual Meeting. Each of the six (6) nominees currently serves on our Board.

At the Annual Meeting, each valid proxy returned to us will be voted for the nominees listed above unless the proxy specifies otherwise. Proxies may not be voted for more than six (6) nominees for director. While our Board does not anticipate that any of the nominees will be unable to stand for election as a director at the Annual Meeting, if that is the case, proxies will be voted in favor of such other person or persons as our Board may designate.

Our Board unanimously recommends that you vote “FOR ALL” of the six (6) director nominees named above, to be elected to our Board, in each case, for a one-year term ending at the 2026 Annual Meeting of Shareholders.

The names and ages of each of our directors, nominees and executive officers and the positions held by each of them as of April 1, 2025, are as follows:

The following describes the experience, education and other qualifications of our current Chief Financial Officer.

 

 

 

 

 

Our Compensation Committee is responsible for periodically evaluating and making recommendations to our Board concerning the total compensation package for non-management directors. To effectively align the interests of our directors and shareholders, our 2024 non-management director compensation included a balanced combination of cash retainers and compensation which our directors are encouraged to use to purchase shares of Trust common stock, which we refer to as the “equity retainer” for our directors.

The elements of our annual non-management director compensation for fiscal year 2024 were as follows:

All cash retainers are paid in equal installments, quarterly in arrears. Directors do not receive additional compensation for attendance at Board or committee meetings. Directors (including the Board Chair and the director appointed by the Allocation Member) are reimbursed for reasonable out-of-pocket expenses incurred in attending meetings of the Board or its committees. The Company also reimburses directors for all reasonable and authorized business expenses related to service to the Company by the directors, in their capacity as directors, including director training, continuing education programs, director certification programs, and membership to organizations that provide thought leadership and peer-to-peer networking opportunities for directors, in each case, in accordance with the policies of the Company as in effect from time to time.

While directors may elect to receive such amount in cash, the annual “equity retainer” portion of our non-management directors’ compensation is strongly encouraged to be used by our directors to purchase shares of Trust common stock. Consequently, each non-management director who elects to use such award to purchase shares of Trust common stock receives that number of shares of Trust common stock that can be purchased using the “equity retainer” amount at the market price for shares of Trust common stock on the date of purchase. Historically, directors received their annual “equity retainer” on or around January 1 of each year, in respect of the services performed by directors during the twelve-calendar month period in the prior year.

Beginning in 2024, upon a recommendation of our Compensation Committee, the “equity retainer” was paid to our directors, prospectively, in respect of their expected service for the twelve-calendar month period from the 2024 Annual Meeting up and until the 2025 Annual Meeting. For the 2024 year only, our directors also received a partial “equity retainer” pro-rated based on their service on our Board from January 2024 through May 2024.

Upon recommendation of our Compensation Committee and ratification by the full Board, no changes to director compensation were approved for fiscal year 2025. Accordingly, each director elected at our 2025 Annual Meeting will receive a cash retainer in the amount of $100,000, or $157,500, if serving as Chair of our Board, plus an “equity retainer” in the amount of $120,000, or $132,500 if serving as Chair of our Board. The equity retainer will be paid in respect of directors’ expected service for the twelve-calendar month period from the 2025 Annual Meeting up and until the 2026 Annual Meeting, with such equity retainer to be paid on or around June 2, 2025.

Pursuant to our LLC Agreement, neither the Allocation Member’s appointed director(s), nor any executive officer of the Company serving as a director who is an employee of our Manager, may be paid compensation as a director or chair of any committee or subcommittee of the Board; provided, however, these directors may be reimbursed for their expenses, if any, incurred with respect to their attendance at each meeting of the Board, as well as any expenses reasonably incurred in their capacities as directors. Accordingly, Mr. Sabo, our Chief Executive Officer and currently the Allocation Member’s sole appointed director, does not receive compensation from the Company for his role as a director. Mr. Sabo is reimbursed by the Company for his expenses, if any, incurred with respect to his attendance at each meeting of the Board and any expenses reasonably incurred in his capacity as a director.

The following table sets forth the compensation paid or accrued by us for all of our directors in 2024:

 

 

Our sustainability framework is built on two key pillars, and supported by eight priority areas, collectively underpinned by sound governance practices.

 

This framework enables a comprehensive and flexible approach to both the acquisition and management of our subsidiaries, affirming that key ESG factors are integral to long-term value creation. This facilitates oversight of our acquisitions and enhances our responsiveness to stakeholder needs. Developed following a materiality assessment we performed in 2022; our framework underwent a significant update in 2023. We engaged an external third party to refine our materiality assessment, including performing an assessment of double materiality at the Company level. Subsequently, this external third party conducted initial formal materiality assessments for five of our nine subsidiary businesses.

The following Summary Compensation Table summarizes the total compensation accrued for our named executive officers in each of 2024, 2023 and 2022 and should be read in conjunction with the Compensation Discussion and Analysis.

 

 

 

 

 

 

The Compensation Committee makes recommendations to the Board of Directors concerning the compensation of the Company’s named executive officers. We have reviewed and discussed with management the Compensation Discussion and Analysis to be included in the Company’s Schedule 14A Proxy Statement, filed pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended. Based on the reviews and discussions referred to above, the Compensation Committee recommended to the Board, and the Board has approved, the inclusion of the Compensation Discussion and Analysis referred to above in the Company’s 2025 Proxy Statement.

Members of the Compensation Committee

The information contained in the report above shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent that we specifically incorporate it by reference in such filing.