MIDDLEBY - DEF 14A

DEF 14A 1 lmidd2021_def14a.htm MIDDLEBY CORP - DEF 14A MIDDLEBY - DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

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Exchange Act of 1934 (Amendment No. __)

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This is Middleby

With a rich history of more than a century for many of our brands, The Middleby Corporation is a world leader in three business segments: commercial cooking, industrial baking and processing and residential appliances.

Middleby is proud to be built on trusted, long-standing relationships with customers, suppliers, stockholders and employees. We also pride ourselves in consistently delivering new award-winning innovation to the marketplaces we serve. Trends change, and we do as well, in order to best serve the ever-evolving needs of our customers.

Middleby is well-known for disrupting our industry with advanced innovation and new processes across all of our business platforms. These innovations deliver speed, labor reduction, energy savings, food safety, employee safety and green operating benefits to our customers.

		Foodservice and Beverage Middleby is a world leader in innovative solutions for commercial foodservice. We develop and manufacture advanced cooking, warming, beverage and cooling equipment, along with innovative cloud technology to enhance operations for commercial foodservice operators. Middleby brands can be found in a wide array of foodservice businesses in quick service, fast casual, pizza, ghost kitchen, casual and fine dining, grocery and convenience stores, institutional commissary and stadiums.

		Residential Middleby is a global leader in premium, residential kitchen and outdoor cooking appliances. Our brands are well known and well respected by consumers around the world. Our in-home products are not only technologically advanced; they also are sought after for their classic and contemporary kitchen design.

		Food Processing & Bakery Middleby develops innovative, industry-leading solutions for industrial protein processing, high-volume baking, and other specialty areas where automated and large scale food production is required. With a broad offering of highly respected brands and advanced technologies, Middleby has the ability to fully integrate a wide array of solutions delivering efficiency, flexibility, quality and consistency.

May 10, 2021

10:30 a.m., CDT

Virtual Meeting www.virtualshareholdermeeting.com/MIDD2021

NOTICE

of Annual Meeting of Stockholders

The Annual Meeting of Stockholders of The Middleby Corporation will be held for the following purposes:

AGENDA

1.	To elect seven directors to hold office until the 2022 Annual Meeting.
2.	To approve, on an advisory basis, the compensation of our executive officers.
3.	To approve the adoption of the Company’s 2021 Long-Term Incentive Plan.
4.	To ratify the selection of Ernst & Young LLP as Middleby’s independent public accountants for the fiscal year ending January 1, 2022.
5.	To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

RECORD DATE :

March 19, 2021

By Order of the Board of Directors

Martin M. Lindsay

Chief Risk and Administration Officer, Treasurer and Secretary

WHO MAY VOTE:

Your vote is important to us. Even if you plan to attend the Annual Meeting virtually, we urge you to return your proxy promptly. For more information about how to vote, please see “Information About the Annual Meeting,” which begins on page 57.

HOW TO ATTEND:

To attend and register for the virtual meeting, please see “Information About the Annual Meeting,” which begins on page 57.

HOW TO RECEIVE ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS:

The Notice of Internet Availability of Proxy Materials, this Proxy Statement, and Middleby’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021, are being distributed or made available to stockholders on or about March 31, 2021.

As part of our precautions regarding COVID-19, we are holding the Annual Meeting virtually. In order to attend and participate in the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction card. You may also ask questions, vote online, and examine our stockholder list during the meeting by following the instructions provided at www. virtualshareholdermeeting.com/MIDD2021 during the Annual Meeting. A list of stockholders entitled to vote at the annual meeting will be available for stockholders as of the record date upon request by sending an email to legal@middleby.com.

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.

INTERNET
Visit the website on your proxy card

BY TELEPHONE
Call the telephone number on your proxy card

BY MAIL
Sign, date and
return your
proxy card in the
enclosed envelope

IN PERSON
Attend the annual
meeting virtually
See page 57 for
instructions on how
to attend


2021 PROXY STATEMENT	3

TABLE OF

CONTENTS

Proxy Summary	05
Proposal 1: Election of Directors	13
How We Select Directors	13
Director Nominees	15
Governance	18
Board Leadership Structure	18
Independence	18
Risk Oversight	18
Annual Board Evaluation and Skillset Assessment	19
Stockholder Engagement	19
Director Onboarding and Continuing Education	19
Succession Planning	19
Board Meetings	20
Committees of the Board	20
Service on Other Boards	21
Age and Term Limits	21
Stockholder Communications With the Board	21
Related Party Transactions	21
Governance Documents	22
Director Compensation	22
Sustainability	24
Executive Officers	26
Proposal 2: Advisory Vote on Executive Compensation	27
Vote Required for Approval; Board Recommendation	27
Executive Compensation	28
Compensation Discussion and Analysis	28
Executive Compensation Tables	37
Security Ownership of Certain Beneficial Owners and Management	45
Delinquent Section 16(A) Reports	47
Proposal 3: To Approve the Adoption of the Company’s 2021 Long-Term Incentive Plan	48
Proposed 2021 LTIP Share Reserve	48
Summary of the 2021 LTIP	49
New Plan Benefits	53
Federal Income Tax Consequences of Participation in The 2021 LTIP	53
Required Vote for Approval	54
Proposal 4: Ratification of Selection of Independent Public Accountants	55
Vote Required for Approval; Board Recommendation	55
Report of the Audit Committee	56
Information About The Annual Meeting	57
Annex A - Non-GAAP Financial Measures	59
Appendix A - The Middleby Corporation 2021 Long-Term Incentive Plan	61


2021 PROXY STATEMENT	4


WHEN	WHERE	RECORD DATE
Monday, May 10, 2021, at 10:30 a.m. (CDT)	Virtual Meeting www.virtualshareholdermeeting.com/ MIDD2021	March 19, 2021

Proposal		Board voting recommendation		Where to find more information
	Elect seven directors for a one-year term		FOR all nominees	Page 13
	Approve, on an advisory basis, the compensation of Middleby’s named executive officers		FOR	Page 27
	Approve the adoption of the Company’s 2021 Long-Term Incentive Plan		FOR	Page 48
	Ratify the selection of Ernst & Young LLP as Middleby’s independent registered public accounting firm for fiscal year 2021		FOR	Page 55

Name	Occupation	Age	Director since	Independent	Committees
Sarah Palisi Chapin	Principal of Chapin Creative, LLC	59	2013		• Nominating and Governance (chair) • Compensation
Timothy J. FitzGerald	Chief Executive Officer of The Middleby Corporation	51	2019
Cathy L. McCarthy	President and Chief Executive Officer of Cross Tack, Inc.	73	2015		• Audit (chair)* • Nominating and Governance
John R. Miller III	Retired Chairman and Chief Executive Officer of EOP, Inc.	80	1978		• Compensation (chair) • Nominating and Governance
Robert A. Nerbonne	Former CEO and President of multiple commercial foodservice equipment companies; Retired Executive Vice President of Cooper-Atkins Corporation	63	2019		• Nominating and Governance
Gordon O’Brien Chairman of the Board	Chief Investment Officer and Chief Financial Officer at Re:Build Manufacturing, LLC	55	2005		• Audit* • Compensation
Nassem Ziyad	Chief Operating Officer of Ziyad Brothers Importing	55	2017		• Audit

ANTICIPATING OPERATIONAL RISKS	Our diligent work with the supply chain in 2020 continues to help us manage operational risks in 2021. We foresee and plan for challenges with component availability, lead time, costs, and shipping. Our internal supply chain team has created a vendor database, and actively publishes alternative solutions to offset the risk of part shortages. Should we incur supply chain issues, our work in 2020 has prepared us to manage them.
VACCINES	With much of our workforce falling within the “essential workers” classification, we are offering guidance to our employees so they may receive the vaccinations as they become available in their locations. We also believe there will be an increase in indoor dining as people are vaccinated, which should stimulate demand for our products and help our customers rebound from a difficult year.
EMPLOYEE SAFETY	We have implemented company-wide safety procedures, including installation of Bluezone air purification in common areas of our facilities, mandated mask policies, enhanced workplace sanitation, reduced travel, social distancing, staggered shifts, and work-at-home protocols for non-production employees.
CUSTOMER SUPPORT	Access to customer support and technical service, and shipping of service parts and finished goods, remain uninterrupted. Production continues to meet customer demand with minimal disruptions as we balance the health and safety of our employees.
COVID-19 PRODUCT INTRODUCTIONS	We developed and launched several products addressing the unique COVID-19 needs of our customers. In particular, we expanded our line of medical grade refrigeration products; developed sterilization equipment for N95 masks, touchless handwashing stations, plexiglass safety shields for restaurants and retail locations; and introduced products tied to food delivery, off-premise food preparation, and fast food drive-thru needs. In the fourth quarter we introduced Bluezone® by Middleby—an air purification system that kills 99.9995% of airborne infectious aerosols in restaurants and other public venues. In addition, we are introducing Vyv antimicrobial lighting in Middleby core products for restaurants and food processing plants.
LIQUIDITY AND CASH FLOW	We were disciplined in protecting the Company’s liquidity profile in fiscal year 2020 and will remain focused in the fiscal year 2021. We are managing the business with an eye toward potential challenges that may arise in the future, based on the uncertainty of the current environment.

*	2020 Realized Compensation includes the following:
	*Base Salary* represents the fixed cash remuneration paid in fiscal year 2020
	*Annual Incentive Bonus Plan* represents the annual cash incentive plan with respect to services performed in fiscal year 2020
	*Stock Awards* represents the fair value of time-based restricted stock that vested in the first quarter of 2021 with respect to services performed in the 2020 fiscal year
	*Salary Reduction Grant* represents the value of stock grants that are equal to the amount of cash base salary that was waived by our CEO and our NEOs in April 2020
	*Appreciation of Salary Reduction Grant* represents the difference in the fair value of the Salary Reduction Grant as of the December 28, 2020 vesting date and the amount of base salary that was waived
	*Other* is All Other Compensation and is unchanged from the Summary Compensation Table

What We Do		What We Don’t Do
	Majority vote standard for uncontested director elections		No golden parachute tax gross-ups for executive officers
	Six out of seven directors are independent		No poison pill in place
	Completely independent Board committees		No stock option repricing without stockholder approval
	Separate Chairman and CEO roles [NEW]		No excessive perquisites for executive officers
	Independent Chairman		No dividends paid or accumulated on unvested RSUs [NEW]
	Annual Stockholder Engagement Program [NEW]
	Independent reviews by the Board and Audit Committee of the Company’s strategy, business, and the related key risks and mitigation activities
	Executive sessions at every in-person or virtual Board and committee meeting without management present
	Clawback Policy applicable to all executive officers and other covered officers [NEW]
	Confidential, multilingual Ethics and Compliance Hotline [NEW]
	The Compensation Committee is advised by an independent compensation consultant
	Our Insider Trading Compliance Program expressly prohibits hedging, pledging and short selling Company stock
	Comprehensive Sustainability Report refreshed on periodic basis [NEW]
	Annual Board skillset evaluation
	Corporate Governance Guidelines [NEW]
	Annual Board and committee self-evaluations [NEW]
	Stock ownership guidelines for executive officers

	Chapin	FitzGerald	McCarthy	Miller	Nerbonne	Obrien	Ziyad
*Finance and Accounting*
Experience with financial reporting, capital structure, and complex financial transactions
*Environmental, Social and Governance*
Governance experience gained through board service or senior executive professional experience
*Human Capital Management*
Experience directly managing a large number of employees, oversight of social issues, including diversity and inclusion, and expertise in compensation
*Mergers, Acquisitions & Divestitures*
Experience with significant corporate transactions
*Risk Management*
Experience identifying, managing and mitigating corporate risks
*Leadership Experience*
Senior executive experience exhibiting strong critical thinking, verbal communication skills, and a diverse set of views and thought processes
*Global/Multi-Divisional Experience*
Experience managing a diverse set of operating domestic and international divisions owned by a common parent
*Industry Experience*
Senior management experience in manufacturing, distribution, sales, marketing or other operational roles in the industries in which we compete

Sarah Palisi Chapin
Age: 59 Director since: 2013 *INDEPENDENT* Committees: • Nominating and Corporate Governance (chair) • Compensation	Professional background Ms. Chapin has been Principal of Chapin Creative, LLC, a business incubation, strategy, and marketing advisory firm, since 2016. For five years before founding Chapin Creative, she was Chief Executive Officer of Hail Merry, a marketer and manufacturer of gluten-free, vegan, refrigerated plant ingredient snacks. Earlier in her career, she was Chief Executive Officer, then Chairman, of Enersyst Development Center, an intellectual property development and licensing firm in food processing, vending, and foodservice, from 1995 to 2003. She served as Vice President of Worldwide Business Strategy of Burger King Corporation from 1990 to 1995, including as co-leader for development of Restaurant Services, Inc., Burger King’s purchasing agent. She began her career in food service as Director of New Concepts and Engineering for Pizza Hut from 1985 to 1990.
Service on other public boards • Caribou Coffee Company (2007-2013) (compensation committee chair)		Service on private boards • Yummy Spoonfuls, an organic baby and toddler food company (2014-2018) • Hail Merry, a plant-based food brand (2009-2016) • PrimeSource Foodservice Equipment Distributors (2002-2012) • IRM, a data analytics subscription company (1998-2008) • Enersyst Development Center (1995-2002)
Relevant skills Ms. Chapin’s more than three decades of experience in the food service and food processing industries give her a comprehensive understanding of strategy, franchising, commercial kitchen technology, brand management, product development, marketing, operational excellence, market expansion, and acquisition strategy.

Timothy J. FitzGerald
Age: 51 Director since: 2019 Committees: • None	Professional background Mr. FitzGerald has been Chief Executive Officer of Middleby since February 2019. Before assuming that role, he held many positions with Middleby and its principal subsidiary, Middleby Marshall Inc. (“MM”), including Vice President and Chief Financial Officer of Middleby and MM from 2003 to 2019; Vice President and Corporate Controller of Middleby and MM from 2000 to 2003; and Corporate Controller of Middleby and MM from 1998 to 2003. Before joining Middleby, Mr. FitzGerald was an Audit Manager with Arthur Anderson LLP for seven years.
Service on private boards • Hardinge Inc., a metal machining provider (since 2018)
Relevant skills Mr. FitzGerald’s extensive history at the subsidiary and corporate level of the Company and his day to day leadership as CEO provide the Board with intimate knowledge and an invaluable perspective regarding Middleby’s operations, challenges, and business strategy.

Cathy L. McCarthy
Age: 73 Director since: 2015 *INDEPENDENT* Committees: • Audit (Chair) • Nominating and Corporate Governance	Professional background Since 2011, Ms. McCarthy has served as President and Chief Executive Officer of Cross Tack, Inc., a management consulting firm. From 2007 to 2011, Ms. McCarthy served as President and Chief of Executive Officer of SM&A, a public company that provides business strategy, competition management, and project management consulting services. Before becoming President, Ms. McCarthy served in various senior executive positions at SM&A, including Executive Vice President, Chief Financial Officer, Corporate Secretary from 2005 to mid-2007. Prior to SM&A, Ms. McCarthy was Chief Financial Officer of PIA Merchandising, an in-store merchandising company; Giant Group, Ltd., an investment firm; and Wherehouse Entertainment, a major music and video retailer. Ms. McCarthy began her career at Mellon Bank, N.A., where she was Vice President of several lending departments responsible for oversight of highly leveraged and distressed assets and commercial lending.
Service on other public boards • SM&A (2007-2008) • Solta Medical, Inc. (2007-2014)		Service on private boards • Recros Medica, Inc., a medical device firm (co-founder 2014 & Chairperson since 2020) • PixCell, Inc., a medical device firm (Chairperson since 2017)
Relevant skills Ms. McCarthy’s operating experience as a Chief Executive Officer and a Chief Financial Officer of numerous public and private companies, combined with her extensive background in strategy, mergers and acquisitions, financial reporting, and internal controls, provide the Board with valuable strategy and financial oversight capabilities.

John R. Miller III
Age: 80 Director since: 1978 *INDEPENDENT* Committees: • Compensation (chair) • Nominating and Corporate Governance		Professional background Mr. Miller was Chairman and Chief Executive Officer of Equal Opportunity Publications, Inc.—a pioneer in diversity recruitment with a portfolio of seven national career magazines, a diversity website, an online job board, and Career Expos for women, members of minority groups, and people with disabilities—from 1968 to 2019. He began his career as a Sales Manager at Procter & Gamble in the Packaged Soap Division.
Service on other public boards • Director Emeritus of First National Bank of Long Island and its holding company, the First of Long Island Corporation.
Relevant skills Mr. Miller’s marketing background and extensive experience with diversity and inclusion matters is valuable in Board discussions regarding employee recruitment, human resources policy, new product introductions, and overall marketing strategy.

Robert A. Nerbonne
Age: 63 Director since: 2019 *INDEPENDENT* Committees: • Nominating and Corporate Governance		Professional background Mr. Nerbonne was formerly the CEO and President of multiple commercial foodservice equipment companies. He was Executive Vice President of Cooper-Atkins Corporation, a company that manufactures thermometers, timers, and wireless monitoring solutions, from 2014 to 2018. He was a consultant for Cooper-Atkins Corporation from 2012 to 2014. Earlier in his career, Mr. Nerbonne was Chief Executive Officer of Ali Group North America, a manufacturer of equipment for the food service industry, from 2009 to 2011. He was Group President, Americas of Enodis (today Welbilt), and held other senior roles at that company, from 2002 to 2009. Prior to 2002, held various leadership positions in the commercial food service industry, including President of Pitco from 1988 to 1998, before Middleby acquired that company.
Service on private boards • Cooper-Atkins Corporation (2014-2018)
Relevant skills
Mr. Nerbonne’s extensive and varied leadership roles within the commercial food service industry, as well as his mergers and acquisition background, provide the Board with valuable insight on how to proactively address market conditions and develop long-term strategy.

Gordon O’Brien
Age: 55 Director since: 2005 Chairman since: 2019 *INDEPENDENT* Committees: • Audit (chair) • Compensation		Professional background Mr. O’Brien has been Chief Investment Officer and Chief Financial Officer at Re:Build Manufacturing, LLC since 2020 and Managing Partner at Cannon Capital since 2017. Before that, he was President of Specialty Finance and Operations of American Capital Strategies from 2008 to 2017, and Principal and Managing Director of American Capital Strategies from 1998 to 2008. Earlier in his career, he was Vice President of Pennington Partners/PENMAN Partners, a private equity firm, from 1995 to 1998.
Relevant skills Mr. O’Brien’s extensive experience with capital markets and acquisition strategy, as well as his private equity experience as a director on numerous other boards, is valuable in Board discussions regarding Middleby’s capital structure, liquidity needs, and acquisition strategy.

Nassem Ziyad
Age: 55 Director since: 2017 *INDEPENDENT* Committees: • Audit		Professional background Mr. Ziyad has been Chief Operating Officer of Ziyad Brothers Importing, a leading distributor and global marketer of a diverse portfolio of ethnic food products, representing multinational customers such as Nestle, Kraft and Bel, since 1983.
Relevant skills
Mr. Ziyad’s extensive experience in marketing, branding, and financial management of food products throughout the world is valuable in Board discussions regarding ethnic food distribution, cross border trade, global ethnic food trends, brand management, and marketing.

Audit Committee
Members: • McCarthy (Chairperson), O’Brien, and Ziyad Meetings in fiscal year 2020: • once in person and three times virtually		The Audit Committee is responsible for: • selecting Middleby’s independent auditor; • reviewing the arrangements for and scope of the audit and pre-approving permitted non-audit services; • reviewing the Company’s interim and annual financial statements or other results of the audit; • reviewing the Company’s internal accounting procedures and controls and the recommendations of the independent auditor; and • reviewing the external audit process.
The Board has determined that Ms. McCarthy and Mr. O’Brien are “financially sophisticated,” as required by NASDAQ Rule 5605(c)(2), and qualify as “audit committee financial experts,” as such term is defined in SEC rules. All of the members have been determined by the Board to meet the additional independence criteria for audit committee members set forth in NASDAQ Rule 5605(c)(2).
Compensation Committee
Members: • Miller (Chairperson), O’Brien, and Chapin Meetings in fiscal year 2020: • once in person and three times virtually		The Compensation Committee is responsible for: • making recommendations concerning the compensation of the non-employee members of the Board and all executive officers; • administering the Value Creation Incentive Plan (the “VCIP”), our annual incentive compensation program, including establishing and certifying performance goals; and • administering and making grants to executive officers under the Company’s 2011 Long-Term Incentive Plan (the “LTIP”).
All of the members of the Compensation Committee have been determined by the Board to be independent as defined under applicable NASDAQ listing standards. There are no compensation committee interlocks.

•	Conflict Minerals Policy
•	Insider Trading Compliance Program
•	Sustainability Report
•	Accounting Complaint Procedures
•	Clawback Policy

Type of compensation	How paid	Amount
Annual retainer for every non-employee director	Cash, paid in quarterly installments	$100,000
Additional retainer for Chairman of the Board	Cash, paid in quarterly installments	$25,000
Additional cash retainer for chairpersons of the Audit Committee and the Compensation Committee	Cash, paid in quarterly installments	$20,000
Additional cash retainer for chairperson of the Nominating and Corporate Governance Committee	Cash, paid in quarterly installments	$10,000*
Equity	Restricted stock or RSUs awarded in March of each year with a one-year vesting period	Aggregate value of $130,000 based on the price of Middleby’s common stock at the close of business on the grant date

Name	Fees Earned or Paid in Cash ($)⁽¹⁾	Stock Awards ($)⁽²⁾	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	All Other Compensation ($)	Total ($)
Sarah Palisi Chapin	82,500	130,020	—	—	—	212,520
Nominating and Corporate
Governance Committee
Chairperson
Cathy McCarthy	90,000	130,020	—	—	—	220,020
Audit Committee Chairperson
John R. Miller III	90,000	130,020	—	—	—	220,020
Compensation Committee
Chairperson
Robert E. Nerbonne	75,000	130,020	—	—	—	205,020
Gordon O’Brien	93,750	130,020	—	—	—	223,770
Chairman of the Board
Nassem Ziyad	75,000	130,020	—	—	—	205,020

28%	57%	7	28%

of our US senior and executive management team are women	of our Board are women or underrepresented people of color	of our key operating locations in the United States and Europe are led by female managing directors	of our Middleby national accounts sales professionals are women

Name	Age	Professional Background
Timothy J. FitzGerald	51	Mr. FitzGerald’s professional biography appears above under Election of Directors.
Bryan E. Mittelman	50	Chief Financial Officer of the Company since February 2019, and Chief Accounting Officer from July 2018 to February 2019. Vice President, Controller at Knowles Corporation from December 2013 to July 2018. Corporate Controller at Morningstar, Inc. from December 2011 to September 2013.
David Brewer⁽¹⁾	64	Executive Vice President and Chief Operating Officer of the Company since February 2019, and Chief Operating Officer of the Commercial Foodservice Equipment Group from March 2009 to February 2019. President, Pitco Frialator, Inc., from July 2007 to March 2009. President, Lantech North America, from June 2005 to July 2007. Vice President of Global Supply Chain, YUM!, from March 2002 to June 2005.
Martin M. Lindsay	56	Chief Risk and Administration Officer, Treasurer and Secretary of the Company since February 2021. Vice President, Treasurer and Secretary of the Company from February 2019 to January 2021. Corporate Treasurer and Assistant Secretary of the Company and MM from February 2002 to February 2019. Assistant Treasurer of the Company and MM from March 1999 to February 2002.

•	attract and retain executive talent;

•	link executive compensation with operating performance;

•	align executive long-term compensation with stockholder interests; and

•	facilitate a high-growth company strategy.

*Compensation Discussion and Analysis*	28
Executive Summary	28
Stockholder Engagement Following the Say on Pay Vote	30
Compensation Objectives and Philosophy	30
Parties Involved in Compensation Decisions	31
Fiscal Year 2020 Compensation Decisions	33

*Report of the Compensation Committee of the Board of Directors*	36

	Timothy FitzGerald	Chief Executive Officer
	Bryan E. Mittelman	Chief Financial Officer
	David Brewer⁽¹⁾	Executive Vice President and Chief Operating Officer
	Martin M. Lindsay⁽²⁾	Chief Risk and Administration Officer, Treasurer and Secretary

	(1)	Effective February 18, 2021, Mr. Brewer retired from his position as Executive Vice President and Chief Operating Officer of the Company.
	(2)	Mr. Lindsay has been Chief Risk and Administration Officer, Treasurer and Secretary of the Company since February 2021. Prior to that he served as Vice President, Treasurer and Secretary of the Company from February 2019 to February 2021.

Compensation element	How paid	Metrics and Vesting
Base salary	Cash	Typically based on the Company’s current business environment, the individual’s level of responsibility and merit within the Company, and peer benchmarking data. Beginning in March 2020 and in response to the COVID-19 pandemic, Messrs. FitzGerald and Brewer took no base salary for the remainder of fiscal year 2020, and instead received time-based equity grants in amounts equivalent to their respective foregone salaries. Messrs. Mittelman and Lindsay waived 50% of their respective base salaries and received time-based equity grants in amounts equivalent to the waived amounts.
Annual incentive compensation	Cash	COVID-19 began affecting the Company’s international operations beginning in February 2020—around the same time the Compensation Committee typically develops the performance goals for the annual cash-based incentive compensation program. The Compensation Committee and our NEOs collectively agreed not to devote resources to the 2020 annual cash-based incentive compensation program and instead focused all efforts on the Company’s response to changing business and operating conditions. Accordingly, the Compensation Committee did not approve awards under our annual cash-based incentive compensation program for fiscal year 2020.
Long-term equity incentives	2/3 performance-based restricted stock units (RSUs)	The Company is transitioning to a new LTI award structure in response to stockholder feedback. In fiscal year 2020 only, these awards of restricted stock units (“RSUs”) will cliff vest, to the extent earned, at the end of the two-year performance period based on continued employment and performance against goals for Enterprise Value Growth (Less Net Debt) per share (50%) and Adjusted EPS (50%). Final awards may be modified (+/- 25%) based on Middleby’s TSR compared to TSR for our peer group. Awards made in fiscal year 2021 and thereafter will have a three-year performance period.
	1/3 time-based RSUs at target	In fiscal year 2020 only, the RSUs will vest in equal tranches on the first and second anniversaries of the grant date, subject to continued employment. Shares underlying the vested RSUs must be held until the associated performance RSUs vest (or fail to vest based on performance). Awards made in fiscal year 2021 and thereafter will have a three-year vesting period.

What we heard		How we responded
The performance metrics and performance periods for the long-term equity incentive program and the short-term cash incentive program had significant overlap, which stockholders did not think was appropriate.		Long-term grants of performance-based equity will now cliff vest, to the extent earned, only at the end of a three-year (two-year for fiscal year 2020) performance period. The long- and short-term incentive plans now have distinct performance periods and vesting metrics.
Our performance-based long term equity awards had opportunities for annual vesting during the performance period, which stockholders believed was inconsistent with the objective of a long-term incentive award.		Performance-based equity grants will now cliff vest, to the extent earned, only at the end of a three-year (two-year for fiscal year 2020) performance period, with no opportunity for interim or “make-up” vesting.
Stockholders believe our long-term equity incentive program should incorporate a capital efficiency performance metric.		Performance-based equity awards are now subject to a capital efficiency metric, Enterprise Value Growth (Less Net Debt) per share, in addition to Adjusted EPS and the TSR modifier.
Stockholders believe our long-term equity incentive program should incorporate relative TSR as a performance metric.		Performance-based equity awards are now potentially impacted by as much as 25% positive or negative, depending on the Company’s relative Total Shareholder Return (“TSR”) for the performance period as compared to TSR for our peer group.
Stockholders were supportive of our ongoing practice of imposing restrictions on the transfer of executives’ vested equity awards.		Time-based equity awards will vest in annual increments, but vested shares must be held until the associated performance shares vest (or fail to vest, based on performance).

Barnes Group Inc.	ITT Inc.
Crane Co.	John Bean Technologies Corporation
Dover Corporation	Nordson Corporation
Flowserve Corporation	Pentair plc
Fortive Corporation	Snap-on Incorporated
Gardner Denver Holdings, Inc.	Welbilt, Inc.
Graco Inc.	Woodward, Inc.
IDEX Corporation	Xylem Inc.

Named Executive Officer	2020 Base Salary
Timothy J. FitzGerald (CEO)	$975,000
Bryan E. Mittelman (CFO)	$425,000
David Brewer (Executive VP and COO)	$850,000
Martin M. Lindsay (Chief Risk and Administration Officer, Treasurer and Secretary)	$350,000

Component	Legacy LTI Practices	New LTI Practices
Award Type	Time-based restricted stock awards (“RSAs”) (1/3 weight) Performance-based RSAs (2/3 weight)	Time-based RSUs (1/3 weight) Performance-based RSUs (2/3 weight)
Award Timing	LTI awards made every three years	LTI awards made annually
Term	Three years	Three years*
Performance and Vesting Period	Time-based awards: annual vesting Performance-based awards: annual vesting with possible lookback aggregate vesting	Time-based awards: ratable over three years, but must be held until the associated performance-based RSUs vest (or fail to vest based on performance) Performance-based awards: cliff vest to the extent earned, at the end of the three-year performance period
Performance Criteria	EPS (50% weighting) EBITDA (50% weighting) These were the same performance metrics used in the short-term cash incentive plan	Adjusted EPS (50% weighting) Enterprise Value Growth, less Net Debt (50% weighting) per share
TSR Modifier	N/A	TSR modifier
		• Vested performance shares increase by 25% for three-year* TSR performance that is at or above the 75^thpercentile versus the Peer Group
		• Vested performance shares are unchanged for three-year* TSR performance that is between the 25^thand 75^thpercentile versus Peer Group
		• Vested performance shares decrease by 25% for three-year* TSR performance that is at or below the 25^thpercentile versus the Peer Group

Executive	Grant date target value of award* ($)		Target performance- based RSUs (#)	Target time-based RSUs (#)
Timothy J. FitzGerald	$	4,189,900	21,666	10,834
Bryan E. Mittelman	$	966,900	5,000	2,500
David Brewer**	$	0	NA	NA
Martin M. Lindsay	$	966,900	5,000	2,500

*	The Compensation Committee determined the number of RSUs to grant based on the price of Middleby common stock on December 31, 2020, which was $128.92 per share.
**	David Brewer did not receive a long-term equity incentive award in connection with the Company’s strategic plan.

Metric	Definition	Rationale
Adjusted EPS	Net Earnings plus the following: amortization, restructuring expenses, acquisition-related inventory step-up charges, facility consolidation expense, net periodic pension benefit other than service costs, one-time restructuring costs, and income tax effect of pre-tax adjustments.	This is a transparent metric that is reported in Middleby’s earnings releases, that closely aligns with stockholder growth expectations, and that is closely aligned with the valuation of the Company.
Enterprise Value Growth (Less Net Debt) Per Share	Adjusted EBITDA multiplied by a market multiple minus Net Debt, with the result divided by shares outstanding.	This metric closely aligns to stockholder value creation by comprehensively capturing growth and capital efficiency, and incorporating cash flow generation, fluctuation in debt balances, utilization of equity, and changes to total shares outstanding. During our recent stockholder engagement process, stockholders expressed a preference for a comprehensive capital efficiency return metric.

(a)	the Company is required to prepare an accounting restatement of its financial statements due to material noncompliance with any financial reporting requirement under securities laws and
(b)	the restated result indicates that any executive officer received additional incentive compensation based on the erroneous data. The Company is entitled to recover the amount of excess incentive compensation paid to any executive officer over the incentive compensation that would have been paid to the executive officer had it been based on the restated results, as determined by the Board.

	Fiscal Year		Salary ($)			Bonus ($)		Stock Awards ($)		⁽²⁾	Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension ($)		Other ($)			Total ($)
Timothy J. FitzGerald		2020		975,000	⁽³⁾		—		4,363,011			—		—		—		7,182	⁽⁷⁾		5,345,194
		2019		975,000			—		5,057,550			—		1,149,688		—		15,945			7,198,183
		2018		850,000			850,000		1,850,000			—		—		—		11,555			3,561,555
Bryan E. Mittelman		2020		425,000	⁽⁴⁾		—		1,006,850			—		—		—		6,042	⁽⁸⁾		1,437,892
		2019		425,000			—		1,123,900			—		358,417		—		8,363			1,915,680
		2018		—			—		—			—		—		—		—			—
David Brewer		2020		850,000	⁽⁵⁾		—		—			—		—		—		7,551	⁽⁹⁾		857,551
		2019		850,000			—		2,528,775			—		1,002,292		—		13,759			4,394,826
		2018		750,000			750,000		—			—		—		—		12,507			—
Martin M. Lindsay		2020		350,000	⁽⁶⁾		—		1,006,850			—		—		—		6,177	⁽¹⁰⁾		1,363,027
		2019		350,000			—		1,123,900			—		295,167		—		7,081			1,776,148
		2018		220,000			550,000		—			—		—		—		8,205			778,205

SEC Form DEF 14A filed by The Middleby Corporation