DEF 14A 1 ldco2022_def14a.htm DUCOMMUN INC - DEF 14A DUCOMMUN INCORPORATED - 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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Filed by a Party other than the Registrant

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	Soliciting Material Pursuant to ss.240.14a-12

DUCOMMUN INCORPORATED

(Name of Registrant as Specified In Its Charter)

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

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Message to our Shareholders

Stephen G. Oswald

Chairman, President and
Chief Executive Officer

Dear Fellow Shareholders:

It is my pleasure to invite you to the 2022 Ducommun Incorporated Annual Meeting of Shareholders.

Once again, out of concern for the safety of our shareholders, employees and directors due to the ongoing uncertainty relating to the COVID-19 pandemic, and to permit shareholders from any location with access to the internet to participate, we are holding our annual shareholder meeting virtually. The annual meeting will be held on Wednesday, April 20, 2022 at 9:00 a.m., Pacific Time and you will be able to attend the annual meeting online, vote your shares electronically, and submit your questions by visiting www.virtualshareholdermeeting.com/DCO2022 and entering your control number. You will not be able to attend the annual meeting in person. The attached Notice of Annual Meeting of Shareholders and Proxy Statement discuss the items scheduled for a vote by shareholders at the meeting.

The Securities and Exchange Commission rules allow companies to furnish proxy materials to their shareholders over the Internet. As a result, most of our shareholders will receive in the mail a notice regarding availability of the proxy materials for the annual meeting on the Internet instead of paper copies of those materials. The notice contains instructions on how to access the proxy materials over the Internet and instructions on how shareholders can receive paper copies of the proxy materials, including a proxy or voting instruction form. This process expedites shareholders’ receipt of proxy materials and lowers the cost of our annual meeting. The Board of Directors has fixed the close of business on February 22, 2022, as the record date for the determination of shareholders entitled to receive notice of and to vote at the Annual Meeting.

In August 2020, I publically committed to a “Return to Growth” for Ducommun in 2021 and I am proud to have delivered on that promise. Our shareholders in 2021 were the beneficiaries of year-over-year improvements in earnings, revenue, operating income and backlog, as well as an all-time high earnings per share. These results were made possible by having the right footprint, cost structure, sales, general and administrative (“SG&A”) expense that was among the industry leaders, especially at the corporate level, and strong operational leadership and experience. I also want to thank our shareholders for sticking with us in 2021 and supporting the company, my team and our board as we gave our best efforts in overcoming the many challenges and crises over the past two years.

Finally, it is important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend, please sign, date and return the enclosed proxy card or vote by telephone or using the internet as instructed on the enclosed proxy card. Please vote your shares as soon as possible. This is your annual meeting, and your participation is important.

Sincerely,

200 Sandpointe Avenue, Suite 700
Santa Ana, California 92707-5759
(657) 335-3665

April 20, 2022

DATE & TIME:
Wednesday, April 20, 2022
9:00 a.m. Pacific Time

PLACE: Online via live audio webcast at
www.virtualshareholdermeeting.com/DCO2022

NOTICE

of Annual Meeting
of Shareholders

Meeting Agenda

1.	Elect two directors named in the Proxy Statement to serve on the Board of Directors until Ducommun’s 2025 Annual Meeting of Shareholders and until their successors have been duly elected and qualified, subject to their earlier death, resignation or removal
2.	Ratify the election of one director named in the Proxy Statement to serve on the Board of Directors until Ducommun’s 2024 Annual Meeting of Shareholders and until his successor has been duly elected and qualified, subject to his earlier death, resignation or removal
3.	Approve Ducommun’s executive compensation on an advisory basis
4.	Approve a proposed amendment and restatement of Ducommun’s 2020 Stock Incentive Plan
5.	Ratify the selection of PricewaterhouseCoopers LLP as Ducommun’s independent registered public accounting firm for the year ending December 31, 2022
6.	Transact any other business as may properly come before the meeting or any adjournment thereof

By Order of the Board of Directors

Santa Ana, California		Rajiv A. Tata
March 9, 2022		Secretary

RECORD DATE:

February 22, 2022

Your vote is very important. Please read the proxy materials carefully and submit your votes as soon as possible by the following methods set forth below to ensure your shares are represented at the 2022 Annual Meeting of Shareholders even if you cannot personally attend. Instructions for accessing the virtual annual meeting are more fully described in the accompanying proxy statement and a list of registered shareholders as of the record date will be accessible during the meeting at www.virtualshareholdermeeting.com/DCO2022. The record date for the annual meeting is February 22, 2022. Only shareholders of record at the close of business on that date may vote at the annual meeting or any adjournment thereof.

Important notice regarding the availability of proxy materials for the shareholder meeting to be held on April 20, 2022:

The Notice of Annual Meeting, our Proxy Statement and our Annual Report to Shareholders are available at http://materials.proxyvote.com/264147

REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

Please refer to the enclosed proxy materials or the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you.	BY INTERNET Go to www.proxyvote.com and follow the instructions	BY TELEPHONE Call 1-800-690-4903 prior to 11:59 pm on April 19, 2022	BY MAIL Sign the enclosed proxy card and mail it promptly in the enclosed postage-prepaid envelope	AT THE MEETING See page 73 for more information.

TABLE OF CONTENTS

Proxy Summary	4
2022 Annual Meeting of Shareholders	4
Meeting Agenda and Voting Matters	4
2021 Return to Growth Performance Achievements	4
Information About the Board	7
Corporate Governance Highlights	8
Executive Compensation Highlights	8
Environmental and Safety Highlights	9

Important Note Regarding Forward-Looking Statements	10

Proposal No. 1 Election of Directors	11

Proposal No. 2 Ratification of Elected Director	12

Corporate Governance	12
Directors’ Skills and Diversity	12
Directors’ Backgrounds and Qualifications	14
Director Independence	16
Board Leadership Structure	17
The Board’s Role in Risk Oversight	18
Nominating Process	19
Committees of the Board of Directors	20
Annual Board and Committee Evaluations	22
Director Orientation and Continuing Education	22
Shareholder Engagement	22
Meetings and Executive Sessions	23
Key Governance Documents	23
Compensation of Directors	24
Corporate Environmental, Social and Governance	25
How to Contact the Board of Directors	30
Certain Relationships and Related Transactions	30
Named Executive Officers	31
Security Ownership of Certain Beneficial Owners and Management	32

Proposal No. 3 Resolution to Approve Executive Compensation on an Advisory Basis	34

2021 Compensation Discussion and Analysis	36
Executive Summary	37
How Compensation Decisions are Made	44
2021 Named Executive Officer Compensation	45
Compensation Committee Report	53
2021 Summary Compensation Table	54
2021 Grants of Plan-Based Awards Table	56
2021 Outstanding Equity Awards at Fiscal Year-End Table	57
2021 Option Exercises and Stock Vested Table	59
2021 Pension Benefits Table	59
2021 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans	59
Potential Payments Upon Termination or Change in Control	60
Pay Ratio Disclosure	62

Proposal No. 4 Approval of Amendment of Ducommun’s 2020 Stock Incentive Plan	63

Proposal No. 5 Ratification of the Selection of Independent Registered Public Accounting Firm	70
Independent Registered Public Accounting Firm	70
Principal Accountant Fees and Services	70
Recommendation to Appoint PwC as Independent Registered Public Accounting Firm	71
Audit Committee Report	72

Questions and Answers About the Proxy Materials and the Annual Meeting	73

Annual Report to Shareholders	77

Appendix A: Reconciliation of GAAP and Non-GAAP Financial Measures	78

Appendix B: Ducommun Incorporated Amended and Restated 2020 Stock Incentive Plan	81

Date and Time:	Place:	Record Date:

Wednesday, April 20, 2022, at 9:00 a.m. Pacific Time	Online via live audio webcast at www.virtualshareholdermeeting.com/DCO2022	February 22, 2022

Proposal	Board’s recommendation	More information
Elect two directors to serve until the 2025 Annual Meeting	FOR each nominee	Page 11
Ratify the election of one director to serve until the 2024 Annual Meeting	FOR	Page 12
Approve Ducommun’s executive compensation on an advisory basis	FOR	Page 34
Approve a proposed amendment and restatement of Ducommun’s 2020 Stock Incentive Plan	FOR	Page 63
Ratify the selection of the independent auditors	FOR	Page 70

*	Based on 11,417,863 shares outstanding and closing price of $36.32 per share as of December 31, 2018.
**	Based on 11,572,668 shares outstanding and closing price of $50.53 per share as of December 31, 2019.
***	Based on 11,728,212 shares outstanding and closing price of $53.70 per share as of December 31, 2020.
****	Based on 11,925,087 shares outstanding and closing price of $46.77 per share as of December 31, 2021.
(1)	Adjusted EBITDA, Adjusted EBITDA Margin and Backlog are non-GAAP financial measures. For a discussion of these measures and for a reconciliation to the most directly comparable GAAP measures, see Appendix A to this Proxy Statement.

*	Data depicted in the graph is as of December 31 of each year.
**	For information about our peer group, see “Compensation Discussion and Analysis–Benchmarking and Peer Groups.”
***	Included to depict Ducommun’s performance against the broad, general market.

	Cumulative Total Shareholder Return as of December 31,
	2018	2019	2020	2021
Ducommun Incorporated	$ 100	$ 139	$ 148	$ 129
Russell 2000 Index	$ 100	$ 126	$ 151	$ 173
Median of proxy peers	$ 100	$ 122	$ 119	$ 111
NYSE Composite Index	$ 100	$ 122	$ 128	$ 151
Dow Jones Industrial Average	$ 100	$ 125	$ 138	$ 166

•	Stringent stock ownership guidelines for directors and executive officers
•	Lead Independent Director with significant authority and responsibilities
•	All committees except the Innovation Committee are made up entirely of independent directors
•	The Board and each Board committee conducts an annual self-evaluation
•	100% attendance at all 2021 Board and committee meetings
•	Board-level oversight of all ESG and cybersecurity initiatives
•	Regular shareholder engagement activities
•	Clawback policy applies to all incentive compensation and vested performance-based equity awards
•	Company-wide prohibition on hedging or pledging Ducommun securities
•	Annual advisory vote on executive compensation
•	Confidential ethics hotline available 24/7 by telephone or internet

	Oswald	Baldridge	Drazba	Ducommun	Flatt	Haberland	Kramer	Strycker
Senior Leadership Significant experience leading organizations, developing business strategies and talent
Global/International Global business and international experience necessary for expanding the footprint of the organization
Financial Expertise with complex financial transactions and optimizing capital structures
Aerospace & Defense Industry Industry experience that provides insight on issues unique to the A&D industry
Manufacturing Experience managing the operations of a complex A&D business
Technology Experience identifying technological advances that may affect our business
Strategy, Business Development and M&A Experience with identifying M&A targets that will advance strategic objectives
Product Marketing / Innovation Experience in new product development and growing market share
Cybersecurity / Information Security Experience with successfully implementing and overseeing measures to prevent data breaches
Human Capital Expertise in compensation design and managing human capital issues
Public Company Board Understanding of the extensive and complex oversight responsibilities of public company boards to protect the interests of shareholders based on experience serving on other public company boards


	ROBERT C. DUCOMMUN Business Advisor Age: 70 Director Since: 1985 Term Expires: 2022 Committees: • Audit and Corporate Governance & Nominating (Chair)		Professional background Mr. Ducommun has been an independent business advisor for over 30 years. He was previously the Chief Financial Officer for several private companies and a management consultant with McKinsey & Company. Key qualifications As a former management consultant and Chief Financial Officer, Mr. Ducommun brings to the Board substantial financial acumen and leadership in setting the strategic direction for the Company, and also provides guidance on various environmental, social and governance (“ESG”) initiatives.


	DEAN M. FLATT LEAD DIRECTOR President, Defense & Space, Honeywell International, Inc. (Ret.) Age: 71 Director Since: 2009 Term Expires: 2022 Committees: • Corporate Governance & Nominating and Compensation (Chair)		Professional background Mr. Flatt is the retired President, Defense & Space of Honeywell International, Inc., a position he occupied for three years until his retirement in 2008. Mr. Flatt was previously President, Aerospace Electronic Systems and President, Performance Materials of Honeywell. Key qualifications As the former President of several divisions of one of the world’s largest avionics manufacturers, Mr. Flatt contributes to the Board diverse operational experience and understanding of technologies relevant to the Company’s business. Other public company directorships Curtiss-Wright Company (since 2012)


	STEPHEN G. OSWALD Chairman, President and Chief Executive Officer Age: 58 Director Since: 2017 Term Expires: 2023 Committee: • Innovation		Professional background Mr. Oswald has been the President and Chief Executive Officer of Ducommun since January 2017, and Chairman of the Board since May 2018. From 2012 to 2015, Mr. Oswald was Chief Executive Officer of Capital Safety Company, a manufacturer of fall protection, confined space, and rescue equipment. He elected to take time off from his career after the sale of Capital Safety Company to 3M Co. to manage personal investments. Before joining Capital Safety Company, Mr. Oswald spent approximately 15 years in various leadership roles at United Technologies Corporation, including as President of the Hamilton Sundstrand Industrial division. Key qualifications As Chairman, President and Chief Executive Officer, Mr. Oswald provides management’s perspective in board discussions about Ducommun’s business and strategic direction.


	RICHARD A. BALDRIDGE President and Chief Executive Officer, Viasat, Inc. Age: 63 Director Since: 2013 Term Expires: 2023 Committees: • Audit and Innovation		Professional background Mr. Baldridge is President and Chief Executive Officer of Viasat, Inc., a global communications company. Mr. Baldridge joined Viasat in 1999 as Vice President and Chief Financial Officer, added the positions of Executive Vice President and Chief Operating Officer in 2000, was appointed President in 2003, and was named Chief Executive Officer in November 2020. Before joining Viasat, Mr. Baldridge was Vice President and General Manager of Raytheon Corporation’s Training Systems Division, and he held executive roles with Hughes Information Systems and Hughes Training Inc. before they were acquired by Raytheon in 1997. Mr. Baldridge is also a director of EvoNexus, a non-profit business incubator. Key qualifications As the President and Chief Executive Officer of a leading provider of satellite communications systems and services and secure networking systems, Mr. Baldridge contributes to the Board broad operational and financial experience and an understanding of the defense markets that Ducommun serves. Other public company directorships Viasat (since 2016)


	SHIRLEY G. DRAZBA Corporate Vice President, Product Line Strategy & Innovation, IDEX Corporation (Ret.) Age: 64 Director Since: 2018 Term Expires: 2024 Committees: • Compensation and Innovation (Chair)		Professional background Ms. Drazba served as Corporate Vice President, Product Line Strategy & Innovation for IDEX Corporation, which designs, manufactures and markets a range of pump products, dispensing equipment, and other engineered products, both domestically and abroad, from 2014 until her retirement in 2017. Before that, Ms. Drazba spent almost 20 years at Honeywell International, Inc., a manufacturer of aerospace products and services, control technologies, automotive products, turbochargers and specialty materials, in increasingly important technical and engineering leadership positions. Key qualifications As a long-time executive responsible for product strategy, innovation, and commercial excellence, Ms. Drazba contributes to the Board extensive experience in creating high value opportunities for Ducommun’s product lines, as well as experience in market positioning and leading strategic acquisitions to enhance product portfolios.


	SHEILA G. KRAMER Vice President, Chief Human Resources Officer, Donaldson Company, Inc. Age: 62 Director Since: 2021 Term Expires: 2024 Committee: • Corporate Governance & Nominating		Professional background Ms. Kramer has been the Vice President, Chief Human Resources Officer of Donaldson Company, Inc., a provider of engine and industrial filtration solutions, since January 2020. Ms. Kramer joined Donaldson Company, Inc. in October 2015 as its Vice President, Human Resources. From 2013 to 2015, Ms. Kramer was Vice President, Human Resources of Taylor Corporation, a premier provider of interactive printing and marketing solutions to more than half of Fortune 500 companies. Before joining Taylor Corporation, Ms. Kramer spent approximately 22 years in various leadership roles at Lifetouch, Inc. one of the world’s largest employee-owned photography companies. Key qualifications As the current Vice President and Chief Human Resources Officer of Donaldson Company, Inc., Ms. Kramer contributes to the Board extensive senior leadership experience as well as direction on human capital issues pertinent to Ducommun’s ESG program.


	SAMARA A. STRYCKER Senior Vice President, Controller and Treasurer, Navistar International Corporation Age: 50 Director Since: 2021 Term Expires: 2023 Committee: • Audit		Professional background Ms. Strycker has been the Senior Vice President, Controller and Treasurer of Navistar International Corporation, a leading manufacturer and solutions provider for commercial trucks and engines, since January 2022. Previously, Ms. Strycker was the Senior Vice President and Corporate Controller of Navistar International Corporation between August 2014 and January 2022. Between 2008 and 2014, Ms. Strycker served in various controllership roles at General Electric’s Healthcare Division. Before joining General Electric, Ms. Strycker spent approximately 15 years as an auditor with PricewaterhouseCoopers LLP. Key qualifications As Senior Vice President, Controller and Treasurer of Navistar International Corporation, Ms. Strycker contributes to the Board extensive senior leadership experience and financial expertise.

Board Matter	Responsibility
Agendas	• Provides input on and approves the Board agenda. • Approves schedules for Board meetings.
Board Meetings	• Presides at Board meetings at which the Chairman and CEO is not present, including regularly scheduled executive sessions of the independent directors held after regular meetings of the Board.
Executive Sessions	• Has authority to call executive sessions of the independent directors. • Sets the agenda for and leads non-management and independent director sessions held by the Board. • Briefs the Chairman and CEO on any issues arising from non-management and independent director sessions.
Communications with Directors	• Coordinates the activities of the independent directors; serves as a liaison between the Chairman and CEO and the independent directors. • Advises on the flow of information sent to the Board of Directors.
Communications with Shareholders	• Is available for consultation and communication with major shareholders as appropriate.

The Board The Board plays a direct role in our enterprise risk management (“ERM”) program, including cybersecurity, and receives quarterly reports from the chairs of each of the Board’s committees with respect to the risks overseen by each committee, and regular updates from management relating to risks posed by COVID-19.



Compensation Committee • Reviews and discusses management’s assessment of risks relating to our compensation policies and practices and whether such risks are reasonably likely to have a material adverse effect on us, as well as human capital and social risks.	Audit Committee • Reviews risks related to financial reporting and internal controls and, at least annually, reviews and assesses enterprise-wide risks and risk mitigation plans, as well as the monitoring and control of related exposures.	Nominating & Governance Committee • Evaluates the overall effectiveness of the Board and its committees, the effectiveness of our governance practices, and ESG risks.	Innovation Committee • Assists in developing a Ducommun-wide technology roadmap supportive of our business objectives, and evaluates our research and development programs.

•	experience and expertise,
•	sound judgment,
•	a record of accomplishment in areas relevant to our business activities,
•	unquestionable integrity,
•	a commitment to representing the interests of our shareholders in fulfillment of our goals and objectives,
•	independence, and the absence of potential conflicts with Ducommun’s interests,
•	the willingness to devote sufficient time, energy, and attention in carrying out the duties and responsibilities of a director, and
•	the willingness to serve on the Board for an extended period of time.

•	The Board, along with each of its committees, annually conducts a self-evaluation of its performance which includes, considerations as to the composition of the Board and its committees; whether committee charters, meeting content, and the amount of time dedicated to agenda items are appropriate; members’ concerns about the Board’s performance and the performance of individual committees; and suggestions for addressing such issues.
•	At the end of each regular Board meeting, the Board holds an executive session at which feedback on the meeting is provided to the Lead Independent Director.
•	The Nominating and Corporate Governance Committee, in conjunction with the Lead Independent Director, periodically reviews the composition of the entire Board to assess the skills, experience, and perspectives that are currently represented on the Board and to determine what skills and experience would be valuable in the future given our current state and strategic plans.

•	Policy on Trading Securities
•	Procedures for Employee Complaints About Accounting and Auditing Matters
•	Clawback Policy
•	California Transparency in Supply Chains Act Disclosure Statement
•	Prohibition Against Trafficking in Persons Policy
•	Regulation FD Policy

Type of compensation	Amount		How paid
Cash Annual retainer	$ 70,000		Cash, paid in equal increments on a quarterly basis
Equity-Based Annual retainer	100,000		Restricted stock units for a number of shares (rounded to the nearest 100 shares) equal to the stated dollar amount divided by the average closing price of our common stock on the NYSE on the five trading days immediately preceding the date of grant, which typically occurs on or shortly after the date of our annual meeting. Restricted stock units vest on the one-year anniversary of the date of grant.
Additional retainer for Lead Director	30,000		Cash, paid in equal increments on a quarterly basis
Additional retainer for committee chairs Audit	17,500		Cash, paid in equal increments on a quarterly basis
Compensation	12,500
Innovation	7,500
Corporate Governance and Nominating	7,500
Fees for committee meetings	2,000	per meeting	Cash, paid in equal increments on a quarterly basis

	Fees Earned or Paid in Cash ($)	Stock Awards ($)	^(1)(2)(3)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	⁽⁴⁾	Total ($)
Richard A. Baldridge	92,000	100,000		–		192,000
Gregory S. Churchill	44,750	–		–		44,750
Shirley G. Drazba	89,750	100,000		–		189,750
Robert C. Ducommun	99,500	100,000		1,138		200,638
Dean M. Flatt	128,500	100,000		–		228,500
Jay L. Haberland	113,500	100,000		–		213,500
Sheila G. Kramer	38,000	50,000		–		88,000
Samara A. Strycker	–	45,000		–		45,000

(1)	During fiscal year 2021, 1,700 restricted stock units were granted to each of Ms. Drazba and Messrs. Baldridge, Ducommun, Flatt, and Haberland. In addition, 1,000 restricted stock units were granted to Ms. Kramer during fiscal year 2021, reflecting her service for part of fiscal year 2021, and 1,000 restricted stock units were granted to Ms. Strycker when she was appointed to the Board in December 2021. Other than as set forth herein, our non-employee directors did not hold any other outstanding equity awards. Mr. Churchill did not stand for re-election at the 2021 Annual Meeting of Shareholders. While he received Board and committee fees for his services during the portion of fiscal year 2021 prior to his retirement, he did not receive an equity award in 2021.
(2)	These amounts represent the aggregate grant date fair value of stock awards granted in 2021 as calculated pursuant to Financial Accounting Standards Board’s Accounting Standards Codification Topic 718. The methodology and assumptions used in the valuation of stock awards are contained in Footnote 10 to our consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021.
(3)	Other than for Ms. Kramer and Ms. Strycker, restricted stock units for a number of shares (rounded to the nearest 100 shares) equal to the stated dollar amount divided by the average closing price of our common stock on the NYSE on the five trading days immediately preceding the date of grant. Restricted stock units vest on the one-year anniversary of the date of grant.
(4)	A description of the Director Deferred Income and Retirement Plan can be found above. Values represent interest earned on the director’s account in 2021.



		Ethics & Protection of Human Rights				Human Capital Management & Diversity Programs
		• We continued to promote a culture of honesty, respect, trust and teamwork through our Code of Business Conduct, whistleblower hotline and related employee training. • We continued to provide annual training to employees to develop solid ethical decision-making skills in the context of Ducommun’s Code of Conduct. • We continued to promote responsible sourcing practices through our Prohibition Against Trafficking in Persons Policy and California Transparency in Supply Chains Act disclosure statement.				• Decreased lost time incident rate by 56% and total recordable incident rate by 68% between 2018 and 2021. • Added two female directors to our Board, which now consists of eight members. Women now constitute 37.5% of our Board. • We focused on increasing diversity in leadership. At the end of 2021, 17% of our Vice Presidents were women, and 33% were from diverse backgrounds (both consistent with 2020 levels). At the Director level, 27% were women and 29% were diverse, an increase of 19% and 24%, respectively, from 2020. • Selected by Newsweek and Best Practice Institute as a Top 100 Most Loved Workplace for 2021.

		Resource Conservation in Production				Community Support
		• Achieved a 28% decrease in combined Scope 1 and 2 greenhouse gas emissions and 17% reduction in total energy usage compared to baseline (2018 – 2021) levels. • Completed energy audits at a majority of our Southern California locations and identified a number of potential site-specific energy efficiency upgrades to implement in the future. • Completed a compressed air leak detection system risk assessment across our facilities, resulting in approximately 1.2 million kilowatt hours (“kWh”) of anticipated savings we expect to realize after completion of leak repairs. • Reduced water consumption by over 7.1 million gallons annually at our state-of-the-art industrial waste water treatment and recycling system in our Huntsville, Arkansas performance center.				• We continued to support local charitable organizations through The Ducommun Foundation, which donated more than $200,000 in 2021 to non-profits assisting military veterans, active service members and families, as well as collaborating on efforts to end homelessness and other humanitarian relief efforts. • Marked our fourth year in partnership with the Los Angeles Chargers and University of California, Irvine to sponsor STEM on the Sidelines™. In 2021, a total of 147 students from 17 high schools and 43 teams participated. • Awarded 48 Ducommun Scholarships in 2021 to eligible children and grandchildren of full-time Ducommun employees - an increase from 25 scholarships in 2020. The value of these scholarships in 2021 was $138,000 compared to $71,000 in 2020.

•	Supporting social distancing at our facilities by implementing work station dividers and flex staffing, and staggering lunch breaks and work shifts;
•	Providing face coverings, gloves and other personal protective equipment at no cost to employees;
•	Providing sanitation stations with hand sanitizers and cleaning wipes throughout our facilities;
•	Performing deep cleanings and disinfecting facilities on a regular basis;
•	Implementing enhanced third-party visitor screening protocols before onsite visits and entry;
•	Limiting business travel and implementing stringent company-wide policies and procedures for essential business travel approvals and authorizations;
•	Encouraging telecommuting when possible;
•	Providing regular employee communications regarding up-to-date information to help mitigate the spread of the virus; and
•	Educating employees and their families on safety practices.

Proxy Summary

2022 Annual Meeting of Shareholders

Meeting Agenda and Voting Matters

2021 Return to Growth Performance Achievements

Information About the Board of Directors

Corporate Governance Highlights

Executive Compensation Highlights

Environmental and Safety Highlights

Important Note Regarding Forward-Looking Statements

Proposal 1 Election of Directors

Proposal 2 Ratification of Elected Director

Corporate Governance

Directors’ Skills and Diversity

Directors’ Backgrounds and Qualifications

Director Independence

Board Leadership Structure

The Board’s Role in Risk Oversight

Nominating Process

Committees of the Board of Directors

Annual Board and Committee Evaluations

Director Orientation and Continuing Education

Shareholder Engagement

Meetings and Executive Sessions

Key Governance Documents

Compensation of Directors

Corporate Environmental, Social and Governance

How to Contact the Board of Directors

Certain Relationships and Related Transactions

Named Executive Officers

Security Ownership of Certain Beneficial Owners and Management

Proposal 3: Resolution to Approve Executive Compensation on an Advisory Basis

2021 Compensation Discussion and Analysis

Executive Summary

2021 Operations and Performance: A Return to Growth

Shareholder Value

Total Shareholder Return vs. Proxy Peers, Russell 2000 and Selected Indices

Pay for Performance Philosophy

Compensation Program Overview

Compensation Best Practices

Last Year’s Say on Pay Vote

How Compensation Decisions are Made

2021 Named Executive Officer Compensation

Base Salaries

Annual Cash Incentives

Long-Term Incentives

Proposal 1
Election of Directors

Proposal 2
Ratification of Elected Director

1.	Striving to avoid adverse impact and harm to the environment in the communities in which we do business, and to identify business partners who share these values.
2.	Promoting compliance with all applicable laws and regulations pertaining to the environment and natural resources.
3.	Improving our Environmental Management System, employee awareness, and performance.
4.	Establishing meaningful goals and objectives in the pursuit of environmental, health and safety excellence, including but not limited to metrics established by SASB applicable to our operations.


	STEPHEN G. OSWALD Chairman, President and Chief Executive Officer Age: 58 Executive since: 2017			Mr. Oswald has served as President and Chief Executive Officer since January 2017, and as Chairman, President and Chief Executive Officer since May 2018. For additional information on Mr. Oswald, see “Directors’ Backgrounds and Qualifications” on page 15.

	JERRY L. REDONDO Senior Vice President of Operations and Head of Ducommun Structures Age: 62 Executive since: 2013			Mr. Redondo has served as Senior Vice President of Operations and Head of Ducommun Structures since June 2017. Before that, he was Vice President, Operational Excellence from 2015 to 2017, and Vice President, Operational Excellence for several of Ducommun’s subsidiaries from 2013 to 2015. Prior to joining Ducommun, Mr. Redondo was Group Vice President of Crane Aerospace & Electronics, Inc. (from 2010 to 2013), and Director of Operations and Global Supply Chain of the Parker Aerospace Control Systems Division of Parker Hannifin Company (from 1991 to 2010).

	RAJIV A. TATA Vice President, General Counsel & Corporate Secretary Age: 49 Executive since: 2020			Mr. Tata has served as Vice President, General Counsel and Corporate Secretary since January 2020. Between the time of his promotion and May 2018, Mr. Tata served as Deputy General Counsel and Corporate Secretary. He joined Ducommun in April 2017 as Senior Director, Corporate Compliance. Prior to joining Ducommun, Mr. Tata served as Assistant General Counsel for BakerCorp, an oilfield service company, where he was responsible for assisting with mergers and acquisitions, commercial and real estate transactions, corporate governance and regulatory compliance matters.

	Address of Shareholders	Number of Shares		Percentage of Class
William Blair Investment Management LLC	100 International Drive Baltimore Drive, MD 21202	902,219	⁽¹⁾	7.6%
Dimensional Fund Advisors LP	Building One 6300 Bee Cave Road, Austin, Texas	897,608	⁽²⁾	7.5%
BlackRock, Inc.	55 E. 52nd St. New York, NY 10055	810,275	⁽³⁾	6.8%
Paradigm Capital Management, Inc	Nine Elm Street Albany, NY 12207	714,681	⁽⁴⁾	6.0%
RBC Global Asset Management (U.S.) Inc.	50 South Fifth St., Suite 2350 Minneapolis, MN 55402	446,989	⁽⁵⁾	3.7%

(1)	The information is based on a Schedule 13G/A filed with the SEC on February 9, 2022. William Blair Investment Management LLC has sole voting power as to 807,478 shares and sole investment power as to 902,219 shares.
(2)	The information is based on a Schedule 13G filed with the SEC on February 8, 2022. Dimensional Fund Advisors LP has sole voting power as to 881,421 shares and sole investment power as to 897,608 shares.
(3)	The information is based on Schedule 13G filed with the SEC on February 1, 2022. BlackRock, Inc. has sole voting power as to 791,734 shares and sole investment power as to 810,275 shares.
(4)	The information is based on a Schedule 13G/A filed with the SEC on February 7, 2022. Paradigm Capital Management, Inc. has sole voting power as to 714,681 shares, and sole investment power as to 714,681 shares.
(5)	The information is based on a Schedule 13G/A filed with the SEC on February 14, 2022. RBC Global Asset Management (U.S.) Inc. has shared voting power as to 446,989 shares, and shared investment power as to 446,989 shares.

Name	Number of Shares			Percentage of Class
Richard A. Baldridge		22,040	⁽¹⁾		*
Shirley G. Drazba		7,240	⁽¹⁾		*
Robert C. Ducommun		572,309	⁽²⁾		4.8	%
Dean M. Flatt		31,840	⁽¹⁾		*
Jay L. Haberland		31,762	⁽¹⁾		*
Sheila G. Kramer		—	⁽³⁾		*
Stephen G. Oswald		408,372	⁽⁴⁾		3.4	%
Samara A. Strycker		—	⁽⁵⁾		*
Jerry L. Redondo		74,648	⁽⁶⁾		*
Rosalie F. Rogers		88,732	⁽⁷⁾		*
Rajiv A. Tata		18,048	⁽⁸⁾		*
Christopher D. Wampler		40,667	⁽⁹⁾		*
All Directors and Executive Officers as a Group (11 persons)		1,295,658	⁽¹⁰⁾		10.8	%

*	Less than one percent.
(1)	Includes 1,700 shares of restricted stock units that will vest on May 7, 2022.
(2)	The number of shares includes (i) 50,000 shares held by a foundation of which Mr. Ducommun is an officer, as to which he disclaims any beneficial interest, (ii) 106,229 shares as to which Mr. Ducommun has been granted a proxy to exercise voting power by his sister, Electra D. de Peyster, (iii) a total of 3,815 shares owned by Mr. Ducommun’s wife and daughter, (iv) 5,000 shares held in an IRA for the benefit of himself and (v) 1,700 shares of restricted stock units held by Mr. Ducommun which vest on May 7, 2022. Mr. Ducommun has sole voting and sole investment power as to 410,515 shares (includes 1,700 shares of restricted stock units that vest on May 7, 2022), shared voting power as to 50,000 shares and shared investment power as to 50,000 shares.
(3)	Includes 1,000 shares of restricted stock units that will vest on June 1, 2022.
(4)	Includes (i) 83,834 shares of common stock issuable upon exercise of stock options that have previously vested and are exercisable, and (ii) 20,000 shares of common stock held by a charitable trust over which Mr. Oswald shares voting and investment power with his wife.
(5)	Includes 1,000 shares of restricted stock that will vest on December 30, 2022.
(6)	Includes 22,102 shares of common stock issuable upon exercise of stock options that are vested and are exercisable.
(7)	Includes 30,102 shares of common stock issuable upon exercise of stock options that are vested and are exercisable. Ms. Rogers retired from Ducommun as of January 4, 2022.
(8)	Includes 8,087 shares of common stock issuable upon the exercise of stock options that are vested and are exercisable.
(9)	Includes 11,574 shares of common stock issuable upon exercise of stock options that are vested and are exercisable.
(10)	The number of shares includes an aggregate of 155,699 shares of common stock issuable upon exercise of stock options held by our directors and officers that are vested and are exercisable.

1)	Recognize individual and team initiatives and performance;
2)	Provide competitive levels of compensation that align pay to the achievement of our financial goals;
3)	Create a pay-for-performance compensation approach to align executive interests with shareholder interests; and
4)	Assist in attracting and retaining qualified executives.

a)	Management continued to successfully build-out Ducommun‘s defense business by ensuring the right product portfolio, strong operating discipline and metrics along with leveraging our lean, highly focused performance center concept, which resulted in year-over-year revenue gains of approximately 2.6% compared to 2020. This performance materially offset the delayed recovery in commercial aerospace and our defense business comprised approximately 70% of our total revenues in 2021, a significant achievement and record for the Company;
b)	Ducommun was awarded, for the first time, a Detail Parts Partner designation by Airbus, representing preferred supplier status and was awarded a five-year contract through 2026, which is expected to generate significant value for shareholders. As the market leader in commercial aerospace, Airbus had a backlog of over 7,000 planes as of December 2021 and anticipates increasing its monthly production rate of the A320 family of aircraft from 45 in 2021 to 70 by 2024⁽⁶⁾. This was a significant step forward for Ducommun and its industry leading Titanium structural component business and a major milestone in its 172 year history;
c)	SG&A expense, which as a percentage of revenue is lower than all but two of Ducommun‘s proxy peer group companies, based on those firms‘ most recent Form 10-K filings. Moreover, at Ducommun‘s corporate headquarters, since 2016, the number of vice presidents at the Company decreased by over 50%, demonstrating management‘s continued strong cost management and effective spending controls, which in 2021 resulted in once again achieving year-over-year margin expansion with respect to EBITDA, despite the delayed commercial aerospace recovery in 2021; and
d)	Due the actions and results above, our management team was also able to achieve $11.06 diluted earnings per share versus $2.45 for 2020. Approximately $8.40 of this increase was attributable to the completion of a sale-leaseback transaction involving our Gardena, California performance center, with the remainder attributable to management‘s strong overdrive and continued development of Ducommun‘s defense business, and perseverance in maintaining cost discipline. With respect to the sale-leaseback transaction, management took full advantage of the current demand for industrial properties in the southern California market to create significant shareholder value, with net proceeds after taxes of greater than $110 million, which management immediately utilized a portion of to complete the acquisition of MagSeal LLC, a leading provider of high-impact, military-proven magnetic seals for critical systems in aerospace and defense applications, on a debt-free basis. Moreover, the proceeds from the sale-leaseback transaction position Ducommun to complete further strategic acquisitions, or pay down debt, both of which yield value to shareholders.

•	Approximately 87% of target direct compensation for the chief executive officer was based on performance; and
•	Approximately 67% of target direct compensation of the other named executive officers, depending on position, was based on performance.

TABLE OF CONTENTS

Executive Summary	37
2021 Operations and Performance: A Return to Growth	37
Shareholder Value	39
Total Shareholder Return vs. Proxy Peers, Russell 2000 and Selected Indices	39
Pay for Performance Philosophy	40
Compensation Program Overview	41
Compensation Best Practices	43
Last Year’s Say on Pay Vote	43

How Compensation Decisions are Made	44

2021 Named Executive Officer Compensation	45
Base Salaries	45
Annual Cash Incentives	45
Long-Term Incentives	48
Performance Stock Units (FY2021-FY2023 Performance Period)	49
Relative Total Shareholder Return Modifier	50
Performance Stock Units (FY2019-FY2021 Performance Period)	50
CEO 2019 Performance Restricted Stock Unit Grant	51
CEO 2021 Performance Restricted Stock Unit Grant	51
Severance and Change in Control Agreements and Practices	52
Clawback Policy	52
Securities Trading Policy: Prohibition on Pledging and Hedging	52
Other Compensation	52
Director and Officer Stock Ownership Policy	52
Compensation Risk Assessment	53
Tax Deductibility and Gross-Ups	53

Compensation Committee Report	53

2021 Summary Compensation Table	54

2021 Grants of Plan-Based Awards Table	56

2021 Outstanding Equity Awards at Fiscal Year-End Table	57

2021 Option Exercises and Stock Vested Table	59

2021 Pension Benefits Table	59

2021 Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans	59

Potential Payments Upon Termination or Change in Control	60

Pay Ratio Disclosure	62

SEC Form DEF 14A filed by Ducommun Incorporated