2018 Guide to Effective Proxies

2.17.2 Executive summary | 273 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES SBA COMMUNICATIONS CORPORATION COMPENSATIONDISCUSSIONANDANALYSIS > EXECUTIVESUMMARY $50 $100 $150 $200 $250 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 InDollars TotalShareholderReturns SBACommunications Corporation S&P500 Index PublicTowerCompany Competitors FTSENAREITAllEquityREITS 2017CompensationPeerGroup OurExecutiveCompensationProgramIsResponsivetoShareholders DuringthelastsevenannualSay-On-Payadvisoryvotesonthecompensationofournamedexecutive officers,ourshareholdershaveexpressedstrongsupportofourexecutivecompensationprogram.In 2017,85.3%ofthevotescastontheproposalwerecastinfavorofourexecutivecompensationprogram. Lastyearinconnectionwithour“Say-on-Pay”proposalwereachedouttoshareholdersrepresenting almost77.5%ofouroutstandingsharestoengageindiscussionsregardingourexecutivecompensation programs.Basedonsuchengagementeffortswewereabletocommunicatewithallthoseshareholders whoexpressedinterestindiscussingourcompensationprogram,representing65.3%ofouroutstanding shares.Anoverwhelmingpercentageofshareholderswithwhomwecommunicatedexpressedsupport fortheelementsanddesignofourexecutivecompensationprogram.Inlightofevolvingcompensation governancetrends,in2017ourCompensationCommitteecommittedtorequiringthatallfuturegrantsof equitytoofficersbesubjectto“double-trigger”acceleration.Specifically,thevestingofallequityawards toofficerscommencingin2018willonlybeacceleratedafterachangeincontroltotheextentthatthe employmentofsuchofficersisterminatedwithoutcauseortheofficerresignsforgoodreasonin connectionwithsuchchangeincontrol.Inaddition,ourCEOvoluntarilyagreedtoretroactivelyapplythis “double-trigger”accelerationprovisiontohisoutstandingequityawards. Thecoreofourexecutivecompensationphilosophyisthatourexecutives’payshouldbelinkedtothe performanceofSBA.Accordingly,ourexecutives’compensationisheavilyweightedtoward compensationthatisperformance-basedorequity-based.For2017,90%ofourCEO’stargettotal compensationandanaverageof84%ofourotherNEOs’targettotalcompensationwasperformance- basedorequity-based.Asaresult,ourexecutivesonlyrecognizevalueapproachingtheirtarget compensationwhenourshareholdershaveenjoyedvaluecreation. OurPerformanceMetricsDriveShareholderValue Werewardfinancial,operationalandqualitativecorporatemetricsthatwebelievewilldrivelong-term shareholdervalueappreciation.For2017,ourannualincentivebonusforourCEOandeachofour NEOswas: 30%basedontheperformancelevelofAnnualizedAdjustedEBITDAachieved; 30%basedontheperformancelevelofAFFOpershareachieved;and SBACommunicationsCorporation | 2018ProxyStatement 27 Total of 04 pages in section COMPENSATIONDISCUSSIONANDANALYSIS > EXECUTIVESUMMARY Thefollowinggraphsillustrateourstrongperformanceoverthepastfiveyears. AnnualizedAdjustedEBITDA (1) and AnnualizedAdjustedEBITDAMargin (1) $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 100% 90% 80% 70% 60% 50% ($000s) Margin $837,520 2013 2014 2015 2016 2017 $1,066,768 $1,097,292 ’13-’17CAGR:10.3% $1,148,068 $1,240,256 65.3% 68.3% 69.1% 70.0% 70.6% AFFOPerShare (2) $6.00 $5.00 $4.00 $3.00 $4.10 $5.23 $5.69 $6.08 $6.95 $2.00 $1.00 $0.00 $8.00 $7.00 2013 2014 2015 2016 2017 ’13-’17CAGR: 14.1% (1) AnnualizedAdjustedEBITDAforthefourthquarter- ended.SeeAppendixAforreconciliationof Non-GAAPMetrics. (2) For2016,excludestheOiReserve.See AppendixAforreconciliationofNon-GAAP Metrics. TowerCashFlow (3) and TowerCashFlowMargin (3) $830,251 $1,038,294 $1,141,119 $1,198,913 $1,278,077 77.8% 79.7% 79.7% 79.6% 79.5% 70% 75% 80% 85% 90% 95% 100% $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 2013 2014 2015 2016 2017 ($000s) Margin Returnon InvestedCapital (“ROIC”) (4) 9.1% 9.6% 10.2% 9.9% 10.0% 8.4% 9.4% 9.2% 9.0% 8.8% 8.6% 9.6% 9.8% 10.0% 10.2% 10.4% 2013 2014 2015 2016 2017 (3) SeeAppendixAforreconciliationofNon-GAAP Metrics. (4) SeeAppendixAforreconciliationofNon-GAAP Metrics. Webelievethatthesefinancialresultshaveresultedinourdeliveryofsignificantlong-termshareholder value,reflectedthroughourTSRgrowthof130%overafive-yearperiodcomparedtoincreasesin TSRof108%fortheS&P500,92%forourpublictowercompanypeers,AmericanTowerandCrown Castle,60%fortheFTSENAREITAllEquityREITSIndexand76%forour2017CompensationPeer Groupoverthatsamefive-yearperiod. 26 SBACommunicationsCorporation | 2018ProxyStatement AnnualizedAdjustedEBITDA(1)andAdjustedEBITDAMargin(1)AFFOPerShare(2)TowerCashFlow(3)andTowerCashFlowMargin(3)ReturnonInvestedCapital(“ROIC”)(4)TotalShareholderReturns COMPENSATION DISCUSSION AND ANALYSIS Introduction ThisCompensationDiscussionandAnalysisis designedto provideour shareholderswitha clear understandingof our compensationphilosophyandobjectives,compensation-settingprocess, andthe 2017compensationof our named executiveofficers, or NEOs. As discussedinProposal3 on page59, weare conductinga Sayon Payvote this year that requests your approval,on an advisorybasis, of the compensationof our named executiveofficers as describedinthis sectionandinthe tablesand accompanyingnarrative containedin“ExecutiveCompensation.”As part of that vote, you should reviewour compensationphilosophies,the designof our executivecompensationprograms andhow, webelieve,these programs havecontributed to the strong financialperformance that SBAhas providedto shareholdersover the longterm. Our named executiveofficers are those executiveofficers listedbelow: JeffreyA.Stoops PresidentandChiefExecutiveOfficer BrendanT.Cavanagh ExecutiveVicePresidentandChiefFinancialOfficer KurtL.Bagwell ExecutiveVicePresidentandPresident,International ThomasP.Hunt ExecutiveVicePresident,ChiefAdministrativeOfficerandGeneralCounsel JasonV.Silberstein ExecutiveVicePresident,SiteLeasing Executive Summary We HaveDelivered Strong ShareholderValue-Creating Results Our primary focus is the creation of shareholdervalue.We take a long-term viewof our business,and webelievethat growth inAFFO per share has the greatest impact on shareholdervaluecreation. This metric underscores the strength of our businessandlong-term recurring cash flowpotentialof SBA.In order to maximize growth inAFFO per share, duringthe past five years wehavefocused on Adjusted EBITDAgrowth, same-tower organicgrowth, margin enhancements, portfolio growth on attractiv terms, optimizingour capitalstructure, anda disciplinedapproachto capitalallocation. SBACommunicationsCorporation | 2018ProxyStatement 25 SONOCO PRODUCTS COMPANY 26 SONOCO 2018 PROXY STATEMENT executive compensation Highlighted in this report isanoverviewofSonoco’s goals regarding executive compensation, followed by the compensationobjectivesandelementsof our executive compensation programs.The rationaleof the keyactions and decisionsmadewith respect to our executive compensation program in 2017 isalso provided through several sections of theCompensa- tionDiscussionandAnalysis. Our 2017 key accomplishments: Growth in the Perimeter of the Store In2017,webeganpositioningSonoco to achieve apackaging leadershipposition serving the fastgrowing “Perimeterof the Store” as consumerdemand for fresh food products expands. InMarch 2017,Sonoco acquiredPeninsulaPackaging,a leader in thermoforming containers for fresh produce, for $230million. In July,we completed the $170millionacquisitionofClear LamPackaging, an innovator in theproductionofmulti-barrier flexible and thermoforming films, including modified atmospherepackagingwhichopens up newmarkets servingmeatsand cheeses, anddairyproducts,alongwithproduceand food servicepackaging. During2017,Sonocoprovided a3.9% total return to shareholders*,which laggedmany of ourpeersandmajor indices. Ourfive-year total return toshareholdersof109.1% compares favorably to a 108% returnby theS&P500 , and101% and92.6% returnsby theS&P400 Mid-Cap Index andS&P400Materials Index, respectively.Sonoco isa component of bothof these indexes. *Cumulative stock price appreciation, plus dividends,withdividends reinvested. $75 Million in Productivity Improvements Tooffsetnon-material inflation, wehave programs in place to improve totalproductivity, which includesmanufacturing, fixed-cost and procurement savings. In 2017,weachieved $75million in productivity savingswhich exceed- edour targetbynearly 6%, helping drivemargin improvement. 109.1% Total of 03 pages in section 25 SONOCO 2018 PROXY STATEMENT executive compensation Executive Compensation Plan Overview TheExecutiveCompensationCommitteeofourBoard ofDirectors (the “Committee”) is responsible for the oversight of all executive compensation. In light of the 2017achievements, theCommitteebelieves the compensation paid to ourNamedExecutiveOfficers (“NEOs)was commensuratewithour performance when comparedwith the performanceofourpackag- ing peers. Inaddition,we believe our targeted short- term incentivesand long-term incentives achieved our goalsofmotivatingand rewardingperformance and aligning our executives’ interestswith those ofour shareholders. While theCompanymet some ofour financial,oper- ationaland strategic commitments,we didnot fully meet all short-termand long-term targets.As a result, consistentwith theCompany’sphilosophy topay for performanceand topaywithin reason, executive compensationpaid below targeted levels in the annual incentiveplan.Specifically, thePerformance-based AnnualCash Incentive payoutwas 74.1%of target,as described indetailunder “2017CommitteeActions– Performance-basedAnnualCash Incentive”on page 32.The2015-2017Long-Term IncentivePlan vested at 87.7% of target and isdescribed inmoredetailun- der “Resultsof2015-2017PCSUPerformanceCycle” onpage 37.The specific drivers and resultsof these twoplans, aswell asother components ofexecutive compensationare covered indetail in later sections. Cash returned to shareholders in2017 primarily through higher dividends.Over thepast five years,Sonocohas returnedapproximately $927million to shareholders in the form of divi- dends and share repurchases. In2017,we raised the common stockdividendby5.4% to$1.56per share, onan annualized basis.Wehavepaid quarterly dividends to shareholders since1925 and increased dividends for35 consecutive years. Our 2017 financial performance highlights: 2017netsales reacheda record$5.04billion, up $253.8million from 2016. This 5.3% improve- ment came from higher sellingprices implemented to recover rising rawmaterial costs; acquisitions, netof divestitures;and thepositive impact of foreign exchange. $5.04 Billion $2.79 GAAPearnings in2017were$1.74perdiluted share, comparedwith$2.81per diluted share in 2016.2017earnings includedafter-tax charges of $1.05 perdiluted share related topension settlement distributions, tax changes related to the implementation of theU.S.TaxCuts and JobsAct, restructuring charges and acquisition costs,while 2016 resultsbenefited fromagain of$.09per diluted share from the sale ofour blowmolding plastics operations,offset by restructuring, impair- ment andacquisitions costs.Baseearnings (as definedonpage 19 in the10-K)were $2.79 per diluted share,up 2.7% from 2016,as ourCon- sumerPackaging segmentproduced record sales and operatingprofits,and ourPaper and Industrial ConvertedProducts segment improved operating profit by19%.Strong results fromour two largest segmentswere partially offsetbydisappointing re- sults inourDisplayandPackagingandProtective Solutions segments. $159.5 Million 24 SONOCO 2018 PROXY STATEMENT Executive Summary Our compensation decisions in 2017 were driven by our over- arching goal of linking pay with performance and creating long- term shareholder value. Our decisions involving 2017 goal setting and other actions influencing executive compensation were based on the expectation that our operating results would be essentially flat year over year due to the negative impact of divestitures offset by improvements in operations stemming from modest volume growth in our consumer, industrial and pro- tective packaging served markets and productivity improvements which would more than offset higher operating expenses. Finally, we expected to further improve year-over-year financial results through accretive acquisitions. Performance Highlights and Key Accomplishments At the center of what we do as a Company is our purpose, or the why of our existence. Sonoco’s Executive Compensation Compensation Discussion and Analysis Named Executive Officers (NEOs) for 2017 M. JACK SANDERS President and Chief Executive Officer (“CEO”) BARRY L. SAUNDERS Senior Vice President and Chief Financial Officer (“CFO”) ROBERT C. TIEDE Executive Vice President and Chief Operating Officer (“COO”)* ROBERT H. COKER Senior Vice President, Global Rigid Paper and Paper/Industrial Converting – International RODGER D. FULLER Senior Vice President, Paper/Industrial Converting Americas, Reels and Display and Packaging * Mr.Tiede was named CEO-elect in December 2017 to succeed Mr. Sanders when he retires inApril 2018. purpose is Better Packaging. Better Life. We believe this statement captures the essence of why we have been successful over the past 118 years and why this suc- cess should continue into the fu- ture. Creating better packaging for our customers promotes freshness and safety of their products which in turn provides opportunities for our employees and improved returns for our shareholders thus creating a better life for all. During 2017, we worked to achieve our purpose by continuing to pursue our Grow and Optimize strate- gy.This strategy is focused on growing through new products, new markets and new customers, including adding new capabilities for serving the fast growing “Perimeter of the Store,” and optimizing our business through new processes and new systems which im- proves productivity to help lower our cost structure. Despite volatile raw material costs and flat to negative growth from many of our largest consumer and protec- tive packaging customers, Sonoco achieved improved top-line and bottom-line results in 2017, including record net sales and gross profits.