RPM 2020 Proxy Statement

EXECUTIVE COMPENSATION (CONTINUED) Annual Cash Incentive Compensation For fiscal 2020, we provided annual cash incentive compensation under the Amended and Restated 1995 Incentive Compensation Plan, which was designed to motivate participants to achieve our financial objectives and reward executives for their achievements when those objectives are met. All named executive officers participated in the fiscal 2020 incentives. The amount of cash incentive compensation earned by our named executive officers in fiscal 2020 is set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. We paid these amounts in July 2020. For fiscal 2020, the Compensation Committee determined, on a percentage basis, the portion of the aggregate cash incentive compensation award pool under the Incentive Compensation Plan, or the Incentive Plan, to be awarded to each of the named executive officers in respect of the Company’s performance for the fiscal year ending May 31, 2020 as follows: Frank C. Sullivan, 40%; Mr. Gordon, 15%; Mr. Moore, 15%; Ms. Kastner, 15%; and Michael H. Sullivan, 15%. The Compensation Committee determined that cash incentives paid would range from zero to 200% of salary with a target of 125% for Frank C. Sullivan; and from zero to 150% of salary with a target of 100% for Messrs. Gordon, Moore and Michael H. Sullivan and Ms. Kastner. The Compensation Committee may reduce or eliminate the amount of a named executive officer’s annual cash incentive award, at the Compensation Committee’s sole discretion, based solely on individual performance. The Incentive Plan in place for fiscal 2020 provided for an aggregate cash incentive compensation award pool of 1.5% of our pre-tax income for fiscal 2020. In July 2020, the Compensation Committee calculated the aggregate non-equity compensation award pool based on our audited pre-tax income and each individual’s cash incentive payout amount. For fiscal 2020, the Company’s pre-tax income as defined in the Incentive Plan was $527.4 million, providing a cash incentive compensation award pool under the Incentive Plan for the Covered Employees of approximately $7.911 million. Upon the recommendation of our Chief Executive Officer, and after a review of a variety of factors described below, the Compensation Committee awarded cash incentives totaling $2.635 million to the named executive officers, which was significantly below the aggregate amount authorized to be paid pursuant to the award pool formula. The cash incentive compensation paid to the named executive officers equaled approximately 101.3% of their salaries for fiscal 2020. The Compensation Committee also determined that for fiscal 2021 the cash incentive compensation paid will range from zero to 200% of salary with a target of 125% of salary for Frank C. Sullivan, and from zero to 150% of salary with a target of 100% of salary for direct reports of Frank C. Sullivan. 30