Compensation Highlights
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What we do | What we do not do |
Pay for performance and align interests of executives with those of long-term stockholders | No single-trigger cash severance upon a change in control |
Majority of executive pay is in the form of at-risk compensation | No repricing of stock options |
Hold-until-retirement requirements applicable to 25% of all equity granted to executives | No hedging of stock permitted |
Clawback policy — which provides for recoupment of previously earned incentives — is a precondition to receiving incentive-based compensation | |
Independent compensation consultant | |
Year-Over-Year Compensation Mix
As a result of the incremental compensation changes thoughtfully implemented each year, the Company's executive compensation mix has transitioned to being comprised significantly of at-risk compensation as compared to fixed compensation. The following charts illustrate the consistent shift of the compensation mix between fixed (i.e., base salary) and at-risk (i.e., annual cash bonus and long-term equity incentives) compensation elements for our CEO and the other named executive officers.
CEO Year-Over-Year Compensation Mix
In addition to becoming more at-risk, the CEO's compensation mix has also become more performance-based to increase alignment with stockholder interests. Specifically, as outlined above, the compensation and human capital committee has implemented changes to the structure of CEO compensation to require that 60% (increase from 50% in 2022) of his equity compensation will be denominated in performance-based equity. The chart below illustrates the significant increase in the CEO's target compensation being comprised of performance-based incentives:
Compensation Components
The key components of the Company’s executive compensation program consist of a base salary, an annual performance-based bonus pursuant to the 2014 Plan, equity awards under the 2014 Plan and various benefits, including the Company’s Supplemental Retirement Plan, the Liggett Vector Brands Inc. Savings Plan (the “401(k) Plan”) and certain perquisites, including business and personal use of corporate aircraft by each of the CEO and COO. The employment agreements with the Company’s named executive officers also provide for severance compensation in the event of termination other than for cause during the term of the agreement or, in certain cases, following a change in control of the Company during the term of the agreements.
Base Salary
Base salaries for the Company’s named executive officers are established based on their overall business experience and managerial competence in their respective roles, as well as their personal contributions to the Company and are intended to provide competitive levels of fixed compensation. The compensation and human capital committee believes that executive base salaries should be set at competitive levels and reward our executives for our long-term outstanding performance with above-average total compensation. Base salaries are reviewed annually by the compensation and human capital committee, based on recommendations by the Company’s CEO with respect to the salaries of executive officers other than himself, and may be increased based on review of the Company's results and individual executive performance. As previously disclosed, following the successful distribution of Douglas Elliman, the base salaries for the CEO and COO were reduced to reflect that these executives will be devoting a portion of their business time to Douglas Elliman. These reduced salaries are disclosed in the table below.
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| Base Salary |
| 2021 | 2022 | △ vs 2021 |
Howard M. Lorber | $3,426,270 | $1,837,500 | (46) % |
Richard J. Lampen | $1,250,000 | $650,000 | (48) % |
J. Bryant Kirkland III | $550,000 | $575,000 | 5% |
Marc N. Bell | $475,000 | $500,000 | 5% |
Nicholas P. Anson | $650,000 | $650,000 | None |
Annual Incentive Awards
The Company's executive officers are eligible to earn annual cash incentive awards under the 2014 Plan. Prior to 2022, the compensation and human capital committee delegated to its subcommittee, which consisted of Mr. Carlucci and Mr. Stanley S. Arkin, a former member of the Board, the authority to select participants in the 2014 Plan, determine the amount of their annual award opportunities, select the applicable performance criteria and performance goals for each year, determine whether the performance goals for particular awards have been met and administer and interpret the 2014 Plan with respect to performance-based compensation. Effective in 2022, the compensation and human capital committee selects participants in the 2014 Plan, determines the amount of their annual award opportunities, selects the applicable performance criteria and performance goals for each year, determines whether the performance goals for particular awards have been met and
administers and interprets the 2014 Plan with respect to performance-based compensation. An eligible executive may (but need not) be selected to receive annual incentive awards under the 2014 Plan.
In 2022, each of the Company's named executive officers participated in the annual cash incentive program under the 2014 Plan. For Messrs. Lorber, Lampen, Kirkland and Bell, the following performance metrics were established for 2022: 62.5% of the payment was based on adjusted earnings before interest and taxes, or Adjusted EBIT, as defined in the 2014 Plan, of Liggett; and 37.5% of the payment was based on distributions to stockholders of the Company. For Mr. Anson, the following performance metrics were established for 2022: 50% of the payment was based on Liggett Adjusted EBIT and 50% was based on Liggett Volume. The compensation and human capital committee selected Liggett Adjusted EBIT as a performance criterion for 2022 as it is commonly used to measure performance in the tobacco industry and Adjusted EBITA is commonly used to measure performance in the real estate brokerage industry; while selecting complementary metrics that incentivize management to seek strong stockholder returns and prioritize the Company's long-term performance.
For 2022, like 2021 and prior years and in accordance with the terms of their respective employment agreements, Messrs. Lorber, Lampen, Kirkland and Bell remained eligible to receive a target annual incentive opportunity of 100%, 75%, 33.33% and 25% of their respective base salaries. In 2022, Mr. Anson received a target annual incentive opportunity of 50% of his respective base salary. The Company did not increase the target percentage annual incentive opportunity for any of its named executive officers from the percentage set forth in each named executive officer’s employment agreements, as amended.
Depending on the level of achievement of the performance criteria, the actual annual incentive payments could exceed the target annual incentive amount for each of Messrs. Lorber, Lampen, Kirkland and Bell up to a maximum payout of 125% of target, whereas Mr. Anson's maximum payout is 200% of target (see “Grants of Plan-Based Awards in 2022”). The Subcommittee may exercise negative discretion with respect to any award to reduce any amount that would otherwise be payable under the annual incentive program granted under the 2014 Plan.
The 2022 performance necessary for Messrs. Lorber, Lampen, Kirkland, Bell and Anson to receive annual incentive awards at the target level were set at levels which were believed to be rigorous, but achievable, based on internal corporate plans.
For Messrs. Lorber, Lampen, Kirkland and Bell, the performance necessary to achieve the minimum, target or maximum awards in 2022 was as follows:
•percentages of the target cash incentive opportunity based on Liggett Adjusted EBIT were $300,000,000 (50%), $340,000,000 (100%), and $350,000,000 and above (125%); the actual Liggett Adjusted EBIT for 2022 were $355,539,000 resulting in a 125% payment on this metric; and,
•percentages of the target cash incentive opportunity based on cash dividends per share of the Company were $0.70 (50%), $0.80 (100%), and $0.90 and above (125%); the actual cash dividends paid in 2022 were $0.80 per share, resulting in a 100% payment on this metric.
For Mr. Anson, the performance necessary to achieve the minimum, target or maximum awards in 2022 was as follows:
•percentages of the target cash incentive opportunity based on Liggett Adjusted EBIT were $345,000,000 (100%) and $355,000,000 and above (200%); the actual Liggett Adjusted EBIT for 2022 were $355,539,000 resulting in a 200% payment on this metric; and
•percentages of the target cash incentive opportunity based on Liggett Volume (in billions of units) were 9.25 (100%), and 9.75 billion units (200%); the actual Liggett Volume was 10.349 billion resulting in a 200% payment on this metric.
Based on actual 2022 results compared to the established performance criteria, annual cash incentive payments equal to 115.625% of target amounts were achieved and awarded to Messrs. Lorber, Lampen, Kirkland and Bell and 200% for Mr. Anson.
Annual cash incentive payment amounts for achieving performance criteria in between the amounts listed above are determined by linear interpolation between the higher and lower amounts. The actual performance-based incentive payments made to the selected participants for the years ended December 31, 2020, 2021 and 2022 are set forth in the column labeled “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table. Annual incentive compensation earned by named executive officers after February 26, 2014 is subject to the Company's Executive Compensation Clawback Policy.
Following the distribution of Douglas Elliman and based off the reduced executive base salaries of Messrs. Lorber and Lampen, the annual incentive opportunities are disclosed in the table below (at 100% of target), based on the same target annual incentive opportunity, as a percentage of base salary, in 2021 and 2022.
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| | Target Annual Incentive Opportunity |
| % of Base Salary | 2021 | 2022 | △ vs 2021 |
Howard M. Lorber | 100% | $3,426,270 | $1,837,500 | (46) % |
Richard J. Lampen | 75% | $937,500 | $487,500 | (48) % |
J. Bryant Kirkland III | 33.33% | $183,315 | $191,648 | 5% |
Marc N. Bell | 25% | $118,750 | $125,000 | 5% |
Nicholas P. Anson | 50% | $325,000 | $325,000 | None |
Equity Compensation
Long-term equity compensation is intended to provide a variable pay opportunity that rewards long-term performance by the Company as a whole and serves as a significant incentive to remain with the Company. In establishing long-term equity compensation awards, the compensation and human capital committee has considered the historical returns generated by the Company. In 2022, the Company's annual long-term equity compensation program for its named executive officers consisted of restricted stock awards.
On March 1, 2022, the compensation and human capital committee granted restricted stock awards to Messrs. Lorber (600,000 shares with 300,000 of such shares subject to performance based vesting conditions), Lampen (180,000 shares), Kirkland (100,000 shares), Bell (100,000 shares) and Anson (20,000 shares) to recognize past and current performance and to serve as a means of incentivizing and retaining these key employees. The restricted shares vest in four equal annual installments commencing on the first anniversary of the date of grant subject to continued employment through each vesting date subject to earlier vesting upon his death or disability, a termination of employment without cause or resignation for good reason or a change in control. Shares received in respect of the March 1, 2022 restricted stock grants will be subject to the Company's Equity Retention, Hedging and Pledging Policy. See “Equity Retention Policy.”
Performance-based compensation remains an important component of our compensation program and in response to stockholder feedback, the compensation and human capital committee adjusted the CEO's 2022 executive compensation pay mix such that 50% of the CEO's long-term equity compensation award is subject to performance-based vesting conditions. In 2023, the compensation and human capital committee further increased the pay mix so that 60% (from 50%) of the CEO's annual equity award is subject to performance-based vesting conditions. The compensation and human capital committee also determined that 60% of the annual equity awards for the Company's other NEOs would be subject to performance-based vesting conditions.
Dividend Equivalents
In 2022, quarterly cash dividends were paid at $0.20 per common share. Under the terms of certain equity awards made to the Company’s named executive officers under the Company’s stock plans, dividend equivalent payments and distributions are made to the executive officers with respect to the shares of Common Stock underlying the unexercised and unvested portion of the equity awards. These payments and distributions are made at the same rate as dividends and other distributions paid on shares of the Company’s Common Stock. In 2022, named executive officers earned cash dividend equivalent payments on unexercised stock options and unvested restricted stock (granted in 2020, 2021 and 2022) as follows: Mr. Lorber — $2,493,736; Mr. Lampen — $765,553; Mr. Kirkland — $444,679; Mr. Bell — $416,537; and Mr. Anson — $22,000.
Supplemental Retirement Plan
Retirement benefits are designed to reward long and continuous service by providing post-employment security and are an essential component of a competitive compensation package. The Company’s named executive officers and certain other management employees are eligible to participate in the Supplemental Retirement Plan, which was adopted by the Board in January 2002 to promote retention of key executives and to provide them with financial security following retirement. As described more fully and quantified in “Pension Benefits at 2022 Fiscal Year End,” the Supplemental Retirement Plan provides for the payment to a participant at his or her normal retirement date of a lump sum amount that is the actuarial equivalent of a single life annuity commencing on that date. The single life annuity amounts for the named executives were determined by the
Company’s Board considering a variety of pertinent factors including (but not limited to) the executive’s level of annual compensation.
Other Benefits
The Company’s executive officers are eligible to participate in all its employee benefit plans, such as medical, dental, vision, group life, disability and accidental death and dismemberment insurance and the 401(k) Plan. These benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death. The Company also provides vacation and other paid holidays to its executive officers, as well as certain other perquisites further described below and in the Summary Compensation Table.
Perquisites
The Company’s corporate aircraft are available for the personal use of Mr. Lorber and other executive officers at Mr. Lorber’s discretion. The Company’s corporate aircraft policy permits personal use of corporate aircraft by executives, subject to an annual limit of $200,000 and $50,000 for personal use by Messrs. Lorber and Lampen, respectively. For purposes of determining the amounts allowable under this policy, the value of the personal usage is calculated using the applicable standard industry fare level formula established by the Internal Revenue Service (as distinguished from the aggregate incremental cost approach used for determining the value included in the Summary Compensation Table), and Mr. Lorber and any other executive officers pay income tax on such value. In addition, Mr. Lorber is entitled to a car and driver provided by the Company, a $3,750 per month allowance for lodging and related business expenses (effective January 1, 2022, which was reduced from $7,500 in 2021), and one club membership (effective January 1, 2022, which was reduced from two, in 2021) and Mr. Lampen is reimbursed for automobile and club expenses on an after-tax basis. See the Summary Compensation Table for details regarding the value of perquisites received by the named executive officers.
Use of Peer Group
As previously disclosed, in direct response to stockholder feedback as well as to reflect the changes in the Company's operations since the distribution of Douglas Elliman, the compensation and human capital committee undertook a multi-step process to design an appropriate peer group that reflected that, in 2022, Vector operated as a complex and diversified company that operated in two challenging industries – tobacco and real estate.
Peer group design considerations included:
•Peer Group Size: an appropriate peer group should contain between 8 and 15 companies
•Peer Company Size: peer group companies should generally be between 0.5x and 2.5x the size of Vector (as defined by market capitalization, total assets, or total revenues)
•Peer Company Industry: peer group companies should include direct competitors, similar industry focus, and comparability of size and potentially geographic considerations
•Other Considerations: other considerations include which companies would stockholders compare Vector to, which companies Vector competes for talent, and which other companies may our executives to able to serve in similar functions
The compensation and human capital committee directed its independent compensation consultant to select companies for inclusion in Vector’s 2022 peer group based on the following characteristics:
•Must be within approximately 0.5x to 2.5x compared to the Company on at least two size‐related metrics, including equity market capitalization, total assets, and/or total revenues; or be located within close geographic proximity to the Company’s headquarters with whom the Company may compete for executive talent;
•Must be one or more of a:
▪Tobacco/cannabis manufacturer or supplier,
▪Real estate companies that are developers, have brokerages services, are real estate owners/managers/investors, and/or have an NYC-Metro Area portfolio, and/or
▪Consumer product companies that have manufacturing, operate as wholesaler, and/or employ a multi-brand strategy.
In developing the peer group of companies to inform 2022 compensation decisions, our compensation and human capital committee, with the assistance of FTI Consulting, established a peer group of 10 publicly traded, national and regional companies with the following characteristics:
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| Implied Equity Market Cap(1) | Revenue(2) |
75th Percentile | $3,191.00 | $2,427.00 |
Median | $2,106.80 | $1,961.90 |
25th Percentile | $1,291.90 | $476.60 |
Vector Group Ltd. | $1,708.90 | $1,220.70 |
All financial data is $ millions. |
1. Per S&P Capital IQ as of 3/1/2022 2. Per S&P Capital IQ as of 3/1/2022; last twelve months/most recently disclosed |
The compensation and human capital committee, with the advice of FTI Consulting, examined the peer group list and, with reference to market capitalization, industry and revenue and approved the following 2022 peer group.
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Aurora Cannabis Inc. | Canopy Growth Corporation | G-III Apparel Group, Ltd. |
Ingredion Incorporated | Steven Madden, Ltd. | The Andersons, Inc. |
The Boston Beer Company, Inc. | Tilray Brands, Inc. | Turning Point Brands, Inc. |
Universal Corporation | | |
In 2023, the compensation and human capital committee has added the following companies to the peer group - Alkermes plc (NASDAQ: ALKS), Beyond Meat, Inc. (NASDAQ: BYND) and The Simply Good Foods Co. (NASDAQ: SMPL).
Change in Control Provisions
The employment agreement between the Company and Mr. Lorber contains change in control provisions. In the event of a change in control that results in a termination of employment by the Company without cause or a resignation for good reason (a “double trigger” change in control provision), Mr. Lorber will receive severance benefits as set forth below in "Potential Termination and Change in Control Payments." The purpose of these provisions is to avoid the distraction and loss of key management personnel that may occur in connection with rumored or actual corporate transactions and/or other fundamental corporate changes and to provide adequate protection to key management personnel if their employment is terminated following a change in control. A change in control provision protects stockholder interests by enhancing employee focus during rumored or actual change in control activity through incentives to remain with the Company despite uncertainties while a transaction is under consideration or pending by assurance of the payment of severance and benefits for terminated executives. A detailed summary of these provisions is set forth under the heading “Payments Made Upon a Change in Control.” In addition, any outstanding stock options and restricted stock awards held by named executive officers vest upon a change in control.
Inter-Relationship of Elements of Compensation Packages
The various elements of the compensation packages for the Company’s executive officers are not directly inter-related. For example, if it does not appear as though the target annual cash incentive award will be achieved, the number of options or restricted shares that will be granted is not affected. If shares of restricted stock that are granted in one year decline in value due to a decline in the Company’s stock price, the amount of the annual cash incentive award or compensation to be paid the executive officer for the next year is not impacted. Similarly, if shares of restricted stock granted to an executive in one year become extremely valuable due to a rising stock price, the amount of compensation or annual cash incentive award to be awarded for the next year is not affected. However, the compensation and human capital committee does evaluate the total value of executive remuneration when making decisions with respect to any compensation element.
Prohibition on Hedging
The Company's Equity Retention, Hedging and Pledging Policy, adopted in January 2013 and amended in April 2020, applies to the Company's executive officers and directors. Executive officers are prohibited from participating in certain trading activities with respect to Award Shares, that by their nature would constitute hedging. Directors are prohibited from participating in certain trading activities with respect to Common Stock granted to them in connection with their service on the Board that by their nature would constitute hedging. For both executive officers and directors, such prohibited activities, related to the Company's equity securities, include:
•Trading in publicly traded options;
•Trading in puts;
•Trading in calls; or
•Trading in other derivative instruments.
Equity Retention Policy
Under its Equity Retention, Hedging and Pledging Policy, the Company formalized its long-standing practice of significant share retention by senior management. Until normal retirement age as defined in the Company's Supplemental Executive Retirement Plan (age 60), each executive officer is required to retain at least 25% (after taxes and exercise costs) of the executive officer's Award Shares.
Stock Ownership Guidelines
The Company has Stock Ownership Guidelines that are applicable to all named executive officers and each non-employee member of the Board. Under the guidelines, which are phased in within the five years after the date that a covered person becomes a named executive officer or member of the Board, the following ownership requirements exist.
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Title | | Value of Shares Owned |
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Chief Executive Officer | | 3.0 | X | Base Salary |
Executive Vice Presidents | | 1.5 | X | Base Salary |
Other named executive officers | | 1.0 | X | Base Salary |
Non-employee directors | | 2.0 | X | Annual Retainer |
“Shares owned” for purposes of the policy include shares of the Company's stock owned outright, any shares held under an employee benefit plan, and restricted shares. The valuation of shares includes all shares held beneficially or directly by any covered person or the person's family members or trusts but excludes pledged shares. Compliance is assessed on the last day of each quarter. As of December 31, 2022, all covered individuals were following the guidelines.
Executive Compensation Clawback Policy
The Company has an Executive Compensation Clawback Policy (the “Clawback Policy”), which requires, as a condition to receive bonus or incentive-based compensation from the Company, that each named executive officer must have entered into an agreement with the Company providing that any performance-based compensation awarded, paid or payable by the Company or any of its subsidiaries subsequent to the date of adoption of the Clawback Policy shall be subject to recovery or “clawback” by the Company. Under the Clawback Policy, if the Company’s financial results are restated, the result of which is that any performance-based compensation would have been lower had it been calculated based on such restated results, the compensation and human capital committee shall review the performance-based compensation received by the named executive officers. If the compensation and human capital committee determines that the performance-based compensation would have been lower and that a named executive officer who received such compensation engaged in fraud, material financial or ethical misconduct or recklessness in the performance of the named executive officer's duties or intentional illegal conduct which materially contributed to the restatement, then the compensation and human capital committee may seek to recover the after-tax portion of the excess amount of performance-based compensation. Under the Clawback Policy, the compensation and human capital committee has the discretion to determine to seek recovery of the performance-based compensation after notice and an opportunity to be heard is provided to the named executive officer. The Company intends to update its clawback policies to comply with the SEC's and the New York Stock Exchange's new requirements regarding recovery of executive compensation prior to the effective date of those rules.
Role of Independent Compensation Consultant
The compensation and human capital committee may retain independent compensation consultants to render advice and guidance in assessing whether the Company's compensation program is reasonable and competitive.
Since June 2019, the compensation and human capital committee has engaged FTI Consulting to conduct a competitive market assessment of the Company’s executive compensation levels and structure, including an examination of market trends and best practices in the Company’s primary industries, as well as advise on the design and structure of incentive compensation programs for executives.
FTI Consulting is directed by, and only provides services to, the compensation and human capital committee.
Accounting for Stock-Based Compensation
The Company accounts for stock-based compensation, including stock option and restricted stock awards under the Company's stock plans, in accordance with the requirements of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”).
Compensation and Human Capital Committee Report
The compensation and human capital committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this document.
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| THE COMPENSATION AND HUMAN CAPITAL COMMITTEE |
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| Jean E. Sharpe |
| Paul V. Carlucci |
2022 SUMMARY COMPENSATION TABLE
The following table summarizes the compensation of the named executive officers for the years ended December 31, 2022, 2021 and 2020. The named executive officers are the Company’s Chief Executive Officer, Chief Financial Officer, and the three other most highly compensated executive officers ranked by their total compensation in the table below (not considering the amount in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column).
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| | Salary | Bonus | Stock Awards | | Option Awards | | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | | Total |
Name and Principal Position | Year | ($)(1) | ($) | ($) (2) | | ($) (2) | | ($)(3) | ($)(4) | ($) | | ($) |
Howard M. Lorber | 2022 | $ | 1,837,500 | | $ | — | | $ | 6,660,000 | | | $ | — | | | $ | 2,124,609 | | $ | — | | $ | 328,758 | | (5) | $ | 10,950,867 | |
President and Chief | 2021 | $ | 3,426,270 | | $ | — | | $ | 7,155,000 | | | $ | — | | | $ | 4,282,838 | | $ | 2,707,353 | | $ | 300,197 | | | $ | 17,871,658 | |
Executive Officer | 2020 | $ | 3,371,649 | | $ | — | | $ | 3,001,250 | | | $ | — | | | $ | 3,898,469 | | $ | 5,153,781 | | $ | 340,104 | | | $ | 15,765,253 | |
Richard J. Lampen | 2022 | $ | 650,000 | | $ | — | | $ | 1,998,000 | | | $ | — | | | $ | 563,672 | | $ | — | | $ | 134,879 | | (6) | $ | 3,346,551 | |
Executive Vice | 2021 | $ | 1,250,000 | | $ | — | | $ | 2,146,500 | | | $ | — | | | $ | 1,171,875 | | $ | 320,232 | | $ | 163,093 | | | $ | 5,051,700 | |
President and Chief Operating Officer | 2020 | $ | 900,000 | | $ | — | | $ | 900,375 | | | $ | — | | | $ | 520,313 | | $ | 609,601 | | $ | 88,075 | | | $ | 3,018,364 | |
J. Bryant Kirkland III | 2022 | $ | 575,000 | | $ | — | | $ | 1,110,000 | | | $ | — | | | $ | 221,592 | | $ | — | | $ | 9,150 | | (7) | $ | 1,915,742 | |
Senior Vice President, | 2021 | $ | 550,000 | | $ | — | | $ | 1,144,800 | | | $ | — | | | $ | 229,144 | | $ | 78,146 | | $ | 8,700 | | | $ | 2,010,790 | |
Chief Financial Officer and Treasurer | 2020 | $ | 550,000 | | $ | — | | $ | 480,200 | | | $ | — | | | $ | 211,958 | | $ | 330,737 | | $ | 8,550 | | | $ | 1,581,445 | |
Marc N. Bell | 2022 | $ | 500,000 | | $ | — | | $ | 1,110,000 | | | $ | — | | | $ | 144,531 | | $ | — | | $ | 9,150 | | (7) | $ | 1,763,681 | |
Senior Vice President, | 2021 | $ | 475,000 | | $ | — | | $ | 1,144,800 | | | $ | — | | | $ | 148,438 | | $ | — | | $ | 8,700 | | | $ | 1,776,938 | |
General Counsel and Secretary | 2020 | $ | 475,000 | | $ | — | | $ | 480,200 | | | $ | — | | | $ | 137,305 | | $ | 606,881 | | $ | 8,550 | | | $ | 1,707,936 | |
Nicholas P. Anson (8) | 2022 | $ | 650,000 | | $ | — | | $ | 222,000 | | | $ | — | | | $ | 650,000 | | $ | — | | $ | 9,150 | | (7) | $ | 1,531,150 | |
President and Chief | 2021 | $ | 650,000 | | $ | — | | $ | 143,100 | | | $ | — | | | $ | 650,000 | | $ | — | | $ | 8,700 | | | $ | 1,451,800 | |
Operating Officer of Liggett Vector Brands and Liggett | 2020 | $ | 475,000 | | $ | 650,000 | | — | | | $ | — | | | $ | — | | $ | — | | $ | 8,550 | | | $ | 1,133,550 | |
___________________________(1)Reflects actual base salary amounts paid for 2022, 2021 and 2020, unless otherwise indicated.
(2)Represents the aggregate grant date fair value of restricted stock granted under the 2014 Plan, respectively, during the years ended December 31, 2022, 2021 and 2020 as determined in accordance with FASB ASC Topic 718, rather than an amount paid to or realized by the named executive officer. Assumptions used in the calculation of such amount are included in note 14 to the Company’s audited financial statements. These grants are subject to continued service conditions; consequently, FASB ASC Topic 718 amounts included in the table may never be realized by the named executive officer.
(3)These amounts reflect performance-based cash awards under the 2014 Plan paid during 2023, 2022 and 2021 in respect of service performed in 2022, 2021 and 2020, respectively. This plan is discussed in further detail under the heading “Annual Incentive Awards.”
(4)Amounts reported represent the increase in the actuarial present value of benefits associated with the Company’s pension plans. Assumptions for 2022 amounts are further described in “Pension Benefits at 2022 Fiscal Year End.” The amounts reflect the increase in actuarial present value for the named executive officer’s benefits under the Supplemental Retirement Plan determined using interest rate, retirement date and mortality rate assumptions consistent with those used
in the Company’s financial statements. The amounts for Messrs. Lorber, Lampen, Kirkland and Bell have been reported as $0 because the actuarial value of their benefits declined by $2,291,348, $271,026, $259,799 and $610,276, respectively, in 2022, primarily due to increases in assumed interest rates in 2022. No amount is payable from this plan before a participant attains age 60 during active service except in the case of death, disability or termination without cause. There can be no assurance that the amounts shown will ever be realized by the named executive officers.
(5)Represents perquisites consisting of $256,033 for use of corporate aircraft in 2022, a $45,000 allowance paid for lodging and related business expenses and $18,575 for use of a Company-provided car and driver (which amount covers the cost of fuel, parking, tolls, depreciation expense and related expenses for Mr. Lorber's personal and business-related use) in 2022. Also includes $9,150 for 401(k) Plan matching contributions in 2022. For purposes of determining the value of corporate aircraft use, personal use is calculated based on the aggregate incremental cost to the Company. For flights on corporate aircraft, aggregate incremental cost for purposes of this table is calculated based on a cost-per-flight-mile charge developed from internal Company data. The charge reflects the direct operating cost of the aircraft, including fuel, additives and lubricants, airport fees and catering. In addition, the charge also reflects an allocable allowance for maintenance and engine restorations.
(6)Represents perquisites consisting of $93,083 for personal use of corporate aircraft in 2022 (computed using the same assumptions as in footnote (5) above), $28,174 for reimbursement of automobile expenses, $4,472 for reimbursement of club expenses and $9,150 for 401(k) Plan matching contributions in 2022.
(7)Represents 401(k) plan matching contributions.
(8)Mr. Anson serves as President and COO of Liggett Vector Brands LLC and Liggett Group LLC.
Employment Agreements and Severance Arrangements
Compensation arrangements, as reflected in the employment agreements with the Company’s named executive officers, are usually negotiated on an individual basis between the CEO and each of the other executives. While the compensation and human capital committee has delegated to the CEO the responsibility of negotiating these employment agreements and his input is given significant consideration by the compensation and human capital committee, the compensation and human capital committee and the Board have final authority over all executive compensation matters.
On January 27, 2006, the Company and Howard M. Lorber entered into an amended and restated employment agreement (the “Amended Lorber Agreement”), which replaced his prior employment agreements. The Amended Lorber Agreement had an initial term of three years effective as of January 1, 2006, with an automatic one-year extension on each anniversary of the effective date unless notice of non-extension is given by either party within 60 days before this date. Under the Amended Lorber Agreement, Mr. Lorber’s base salary is subject to an annual cost of living adjustment. In addition, the Company’s Board must periodically review his base salary and may increase, but not decrease, his base salary in its sole discretion. Mr. Lorber is eligible on an annual basis to receive a target bonus of 100% of his base salary under the Company’s non-equity incentive bonus plan. During the period of his employment, Mr. Lorber is entitled to various benefits, including a Company-provided car and driver, a $3,750 per month allowance for lodging and related business expenses, one club membership and dues, and use of corporate aircraft in accordance with the Company’s Corporate Aircraft Policy. Following termination of his employment by the Company without cause (as specified in the Amended Lorber Agreement), termination of his employment by him for good reason (as specified in the Amended Lorber Agreement) or upon death or disability, he (or his beneficiary in the case of death) would continue to receive for a period of 36 months following the termination date his base salary and the bonus amount earned by him for the prior year (with such bonus amount limited to 100% of base salary). In addition, except as otherwise provided in an award agreement, all of Mr. Lorber’s outstanding equity awards would be vested and any stock options granted after January 27, 2006 would continue to be exercisable for no less than two years or the remainder of the original term if shorter. Following termination of his employment for any of the reasons described above (other than death or disability) within two years after a change in control (as defined in the Amended Lorber Agreement) or before a change in control that actually occurs in anticipation of or at the request of a third party effectuating such change in control, he would receive a lump sum payment equal to 2.99 times the sum of his then current base salary and the bonus amount earned by him for the prior year (with such bonus amount limited to 100% of base salary). In addition, Mr. Lorber will be indemnified in the event that excise taxes are imposed on change in control payments under Section 4999 of the Code.
In connection with the distribution of Douglas Elliman, Vector entered into a letter agreement with Mr. Lorber to acknowledge that he also serves as Douglas Elliman Inc.’s President and CEO and Chairman of its Board of Directors following the distribution. In addition, Mr. Lorber’s letter agreement provided that his base salary with the Company following the distribution of Douglas Elliman would be reduced from $3,642,270 per annum to $1,800,000 per annum. On April 29, 2022, the letter agreement with Mr. Lorber was amended to change the reference of Mr. Lorber’s annual cost of living adjustment from the New York metropolitan area to the South Florida metropolitan area and increase Mr. Lorber’s base salary from
$1,800,000 to $1,837,500. As of January 1, 2023, Mr. Lorber's base salary is $2,018,678, which increase reflects a contractual cost of living adjustment in 2023.
On January 27, 2006, the Company entered into employment agreements (the “Other Executive Agreements”) with Richard J. Lampen, the Company’s Executive Vice President and COO, J. Bryant Kirkland III, the Company’s Senior Vice President, Treasurer and Chief Financial Officer, and Marc N. Bell, the Company’s Senior Vice President, General Counsel and Secretary. The Other Executive Agreements replaced prior employment agreements. The Other Executive Agreements had an initial term of two years effective as of January 1, 2006, with an automatic one-year extension on each anniversary of the effective date unless notice of non-extension is given by either party within 60 days before this date. As of January 1, 2023, the annual base salaries provided for in these Other Executive Agreements were $682,500 for Mr. Lampen (increased from $650,000), $603,750 for Mr. Kirkland (increased from $575,000) and $525,000 for Mr. Bell (increased from $500,000). In addition, the Board must periodically review these base salaries and may increase, but not decrease them, their base salaries in its sole discretion. These executives are eligible to receive a target bonus of 75% for Mr. Lampen, 33.33% for Mr. Kirkland and 25% for Mr. Bell of their base salaries under the Company’s non-equity incentive bonus plan. Following termination of their employment by the Company without cause (as defined in the Other Executive Agreements), termination of their employment by the executives for good reason (as defined in the Other Executive Agreements) or upon death or disability, they (or their beneficiaries in the case of death) would continue to receive for a period of 24 months following the termination date their base salary and the bonus amount earned by them for the prior year (with such bonus amount limited to 75% of base salary for Mr. Lampen, 33.33% of base salary for Mr. Kirkland and 25% of base salary for Mr. Bell).
In connection with the distribution of Douglas Elliman, the Company entered into letter agreements with each of Messrs. Lampen, Kirkland and Bell, respectively, to acknowledge that they also serve as Douglas Elliman’s Executive Vice President and COO, Senior Vice President, CFO and Treasurer and Senior Vice President, Secretary and General Counsel, respectively, following the distribution. In addition, Mr. Lampen’s letter agreement provided that his annual base salary with the Company following the distribution was reduced from $1,250,000 to $650,000 to reflect that he devotes a portion of his business time to Douglas Elliman.
On March 6, 2020, the Company entered into an employment agreement (the "Anson Agreement") with Nicholas P. Anson, who became President and Chief Operating Officer of Liggett Vector Brands LLC and Liggett Group LLC on April 1, 2020. The Anson Agreement had an initial term of 21 months with an automatic one-year extension on December 31, 2021 and each year thereafter unless notice of non-extension is given by either party within six months before such renewal date. The Anson Agreement provided Mr. Anson with an initial annual base salary of $500,000, which was increased by the Anson Agreement to $650,000, effective January 1, 2021. Effective January 1, 2023, Mr. Anson's base salary is $682,500 (increased from $650,000). Mr. Anson is eligible to participate in any annual bonus plan Liggett may implement for its senior executives with a target bonus of 50% of base salary. Following termination of his employment by Liggett Vector Brands without cause (as defined in the Anson Agreement), termination of his employment by him for good reason (as defined in the Anson Agreement), termination of his employment due to the nonrenewal of his agreement or upon death, he (or his beneficiaries in the case of death) would continue to receive for a period of 24 months following the termination date his base salary and continued health and insurance benefits, with the base salary payable during the second year being reduced by any salary, bonus, consulting fees or other compensation earned (irrespective of when paid) from any employment or consulting work. If Mr. Anson's employment is involuntarily terminated for any of the reasons described in the foregoing sentence, after July 1 of the applicable year, the Anson Agreement calls for Mr. Anson to receive a pro-rated bonus for such year based on days worked. The severance payments and benefits payable to Mr. Anson under the Anson Agreement are subject to Mr. Anson's execution of a release of claims in favor of Liggett and its affiliates.
CEO Pay Ratio
Pursuant to Item 402(u) of Regulation S-K and Section 953(b) of the Dodd-Frank Act, presented below is the ratio of annual total compensation of the Company's CEO to the annual total compensation of the Company's median employee (excluding the CEO) for 2022.
The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below because other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
For our 2022 analysis, the Company first determined its employee population using a determination date of December 31, 2022. The Company selected December 31, 2022 as its determination date because December 31, 2022 is reflective of the Company's current structure. The Company identified the median employee using a compensation measure consisting of base
salary or wages (as applicable), overtime pay, and any bonuses paid during the twelve-month period preceding the determination date. Conforming adjustments were made for permanent employees who were hired during that period and did not receive pay for the full period.
The 2022 annual total compensation as determined under Item 402 of Regulation S-K for the Company's CEO was $10,950,867, as reported in the Summary Compensation Table of this document. The 2022 annual total compensation as determined under Item 402 of Regulation S-K for the median employee identified in 2022 was $84,368. The ratio of the Company's CEO’s annual total compensation to the Company's median employee’s annual total compensation for fiscal year 2022 is 130 to 1.
GRANTS OF PLAN-BASED AWARDS IN 2022
The table below provides information with respect to incentive compensation granted to each of the named executive officers during the year ended December 31, 2022.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | All Other Stock Awards: Number of Shares of Stock (#) | | All Other Option Awards: Number of Shares of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($) | | Grant Date Fair Value of Stock and Option Awards ($) (2) |
| | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | |
| | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | |
Name | Grant Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Howard M. Lorber | 3/1/2022 | | — | | | — | | | — | | | — | | — | | — | | 600,000 | | — | | | — | | | $ | 6,660,000 | |
| 4/18/2022 | | — | | | $ | 1,837,500 | | | $ | 2,296,875 | | | — | | — | | — | | — | | — | | | — | | | — | |
Richard J. Lampen | 3/1/2022 | | — | | | — | | | — | | | — | | — | | — | | 180,000 | | — | | | — | | | $ | 1,998,000 | |
| 4/18/2022 | | — | | | $ | 487,500 | | | $ | 609,375 | | | — | | — | | — | | — | | — | | | — | | | — | |
J. Bryant Kirkland III | 3/1/2022 | | — | | | — | | | — | | | — | | — | | — | | 100,000 | | — | | | — | | | $ | 1,110,000 | |
| 4/18/2022 | | — | | | $ | 191,648 | | | $ | 239,559 | | | — | | — | | — | | — | | — | | | — | | | — | |
Marc N. Bell | 3/1/2022 | | — | | | — | | | — | | | — | | — | | — | | 100,000 | | — | | | — | | | $ | 1,110,000 | |
| 4/18/2022 | | — | | | $ | 125,000 | | | $ | 156,250 | | | — | | — | | — | | — | | — | | | — | | | — | |
Nicholas P. Anson | 3/1/2022 | | — | | | — | | | — | | | — | | — | | — | | 20,000 | | — | | | — | | | $ | 222,000 | |
| 4/18/2022 | | — | | | $ | 325,000 | | | $ | 650,000 | | | — | | — | | — | | — | | — | | | — | | | — | |
___________________________
(1)Represents the annual incentive awards made under the 2014 Plan on April 18, 2022. In 2022, target levels were equal to 100% of base salary for Mr. Lorber, 75% of base salary for Mr. Lampen, 33.33% of base salary for Mr. Kirkland, 25% for Mr. Bell and 50% for Mr. Anson. The maximum amount is 125% of the target amount for Messrs. Lorber, Lampen, Kirkland and Bell; and, 200% for Mr. Anson. There is no threshold amount. The compensation and human capital committee approved the performance criteria for determining the award opportunities for each named executive officer under the 2014 Plan. The actual bonus amounts earned for 2022 have been determined and paid in 2023 and are reflected in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table.
(2)Represents the aggregate grant date fair value of restricted stock granted under the 2014 Plan for the year ended December 31, 2022 as determined in accordance with FASB ASC Topic 718, rather than an amount paid to or realized by the named executive officer. Assumptions used in the calculation of such amount are included in Note 14 to the Company’s consolidated financial statements. These grants are subject to continued service conditions and their value is tied to the Company's future stock price; consequently, FASB ASC Topic 718 amounts included in the table may never be realized by the named executive officer.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2022
The table below provides information with respect to the outstanding equity awards of the named executive officers as of December 31, 2022.
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| Option Awards | | Stock Awards |
| Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
Name | | | | | | | | |
Howard M. Lorber | 703,547 | | | — | | | — | | $11.47 | | | 2/26/2023 | | — | | | — | | | — | | — |
| 335,022 | | | — | | | — | | $14.68 | | | 2/26/2024 | | — | | | — | | | — | | — |
| 319,069 | | | — | | | — | | $18.12 | | | 2/24/2025 | | — | | | — | | | — | | — |
| 303,876 | | | — | | | — | | $19.13 | | | 2/28/2026 | | — | | | — | | | — | | — |
| 289,406 | | | — | | | — | | $19.71 | | | 2/23/2027 | | — | | | — | | | — | | — |
| 275,625 | | | — | | | — | | $18.42 | | | 2/27/2028 | | — | | | — | | | — | | — |
| — | | | 262,500 | | (1) | — | | $10.92 | | | 2/27/2029 | | — | | | — | | | — | | — |
| | | | | | | | | | | 125,000 | | (2) | $ | 1,482,500 | | | — | | — |
| | | | | | | | | | | 187,500 | | (3) | $ | 2,223,750 | | | — | | — |
| | | | | | | | | | | 187,500 | | (4) | $ | 2,223,750 | | | — | | — |
| | | | | | | | | | | 300,000 | | (5) | $ | 3,558,000 | | | — | | — |
| | | | | | | | | | | 300,000 | | (6) | 3,558,000 | | | — | | — |
Richard J. Lampen | 175,884 | | | — | | | — | | $11.47 | | | 2/26/2023 | | — | | | — | | | — | | — |
| 83,754 | | | — | | | — | | $14.68 | | | 2/26/2024 | | — | | | — | | | — | | — |
| 79,766 | | | — | | | — | | $18.12 | | | 45712 | | — | | | — | | | — | | — |
| 75,968 | | | — | | | — | | $19.13 | | | 2/28/2026 | | — | | | — | | | — | | — |
| 72,351 | | | — | | | — | | $19.71 | | | 2/23/2027 | | — | | | — | | | — | | — |
| 68,906 | | | — | | | — | | $18.42 | | | 2/27/2028 | | — | | | — | | | — | | — |
| — | | | 65,625 | | (1) | — | | $10.92 | | | 2/27/2029 | | — | | | — | | | — | | — |
| | | | | | | | | | | 37,500 | | (2) | $ | 444,750 | | | — | | — |
| | | | | | | | | | | 112,500 | | (3) | $ | 1,334,250 | | | — | | — |
| | | | | | | | | | | 180,000 | | (5) | $ | 2,134,800 | | | — | | — |
J. Bryant Kirkland III | 105,531 | | | — | | | — | | $11.47 | | | 2/26/2023 | | — | | | — | | | — | | — |
| 50,251 | | | — | | | — | | $14.68 | | | 2/26/2024 | | — | | | — | | | — | | — |
| 47,859 | | | — | | | — | | $18.12 | | | 2/24/2025 | | — | | | — | | | — | | — |
| 45,580 | | | — | | | — | | $19.13 | | | 2/28/2026 | | — | | | — | | | — | | — |
| 43,410 | | | — | | | — | | $19.71 | | | 2/23/2027 | | — | | | — | | | — | | — |
| 41,343 | | | — | | | — | | $18.42 | | | 2/27/2028 | | — | | | — | | | — | | — |
| — | | | 39,375 | | (1) | — | | $10.92 | | | 2/27/2029 | | — | | | — | | | — | | — |
| | | | | | | | | | | 20,000 | | (2) | $ | 237,200 | | | — | | — |
| | | | | | | | | | | 60,000 | | (3) | $ | 711,600 | | | — | | — |
| | | | | | | | | | | 100,000 | | (5) | $ | 1,186,000 | | | — | | — |
Marc N. Bell | 70,353 | | | — | | | — | | $11.47 | | | 2/26/2023 | | — | | | — | | | — | | — |
| 50,251 | | | — | | | — | | $14.68 | | | 2/26/2024 | | — | | | — | | | — | | — |
| 47,859 | | | — | | | — | | $18.12 | | | 2/24/2025 | | — | | | — | | | — | | — |
| 45,580 | | | — | | | — | | $19.13 | | | 2/28/2026 | | — | | | — | | | — | | — |
| 43,410 | | | — | | | — | | $19.71 | | | 2/23/2027 | | — | | | — | | | — | | — |
| 41,343 | | | — | | | — | | $18.42 | | | 2/27/2028 | | — | | | — | | | — | | — |
| — | | | 39,375 | | (1) | — | | $10.92 | | | 2/27/2029 | | — | | | — | | | — | | — |
| | | | | | | | | | | 20,000 | | (2) | $ | 237,200 | | | — | | — |
| | | | | | | | | | | 60,000 | | (3) | $ | 711,600 | | | — | | — |
| | | | | | | | | | | 100,000 | | (5) | $ | 1,186,000 | | | — | | — |
Nicholas P. Anson | — | | | — | | | — | | — | | | — | | | 7,500 | | (3) | $ | 88,950 | | | — | | — |
| — | | | — | | | — | | — | | | — | | | 20,000 | | (5) | $ | 237,200 | | | — | | — |
___________________________(1)These option grants vested on February 27, 2023, the fourth anniversary of the grant date.
(2)These restricted shares vest in two equal annual installments. The first two tranches vested on May 27, 2021 and May 27, 2022 and the next two tranches will vest on each of May 27, 2023 and May 27, 2024, provided the recipient is then still an employee of the Company, subject to earlier vesting upon the recipient's death or disability, termination of employment without cause, resignation for good reason and change in control.
(3)These restricted shares vest in four equal annual installments. The first two tranches vested on February 24, 2022 and February 24, 2023 and the final two tranches will vest on each of February 24, 2024 and February 24, 2025, provided the recipient is then still an employee of the Company, subject to earlier vesting upon the recipient's death or disability, termination of employment without cause, resignation for good reason and change in control.
(4)This restricted stock award will vest using the following schedule: 62,500 shares vested on February 24, 2023 because Vector Group Ltd. Adjusted EBITDA from January 1, 2021 to December 31, 2022 exceeded $552 million, 125,000 shares minus shares previously vested will vest on February 24, 2024 if cumulative Vector Group Ltd. Adjusted EBITDA from January 1, 2021 to December 31, 2023 exceeds $728 million, 187,500 shares minus shares previously vested will vest on February 24, 2025 if cumulative Vector Group Ltd. Adjusted EBITDA from January 1, 2021 to December 31, 2024 exceeds $1.104 billion. “Vector Group Ltd. Adjusted EBITDA” is defined in the Award Agreement to mean the Company’s Earnings Before Interest, Income Taxes, Depreciation and Amortization excluding litigation or claim judgments or settlements and non-operating items and expenses for restructuring, productivity initiatives and new business initiatives.
(5)These restricted shares vest in four equal annual installments. The first vesting occurred on February 24, 2023 and the next three tranches will vest on each of February 24, 2024, February 24, 2025 and February 24, 2026, provided the recipient is then still an employee of the Company, subject to earlier vesting upon the recipient's death or disability, termination of employment without cause, resignation for good reason and change in control.
(6)This restricted stock award will vest using the following schedule: 75,000 shares vested on February 24, 2023 because Vector Group Ltd. Adjusted EBITDA from January 1, 2022 to December 31, 2022 exceeded $255 million, 150,000 shares minus shares previously vested will vest on February 24, 2024 if cumulative Vector Group Ltd. Adjusted EBITDA from January 1, 2021 to December 31, 2023 exceeds $510 million, 225,000 shares minus shares previously vested will vest on February 24, 2025 if cumulative Vector Group Ltd. Adjusted EBITDA from January 1, 2021 to December 31, 2024 exceeds $765 million; and, 250,000 shares minus shares previously vested will vest on February 24, 2026 if cumulative Vector Group Ltd. Adjusted EBITDA from January 1, 2021 to December 31, 2025 exceeds $1.02 billion. “Vector Group Ltd. Adjusted EBITDA” is defined in the Award Agreement to mean the Company’s Earnings Before Interest, Income Taxes, Depreciation and Amortization excluding litigation or claim judgments or settlements and non-operating items and expenses for restructuring, productivity initiatives and new business initiatives.
OPTION EXERCISES AND STOCK VESTED IN YEAR ENDED DECEMBER 31, 2022
The table below provides information with respect to options that were exercised or restricted stock awards that vested during 2022, as well as the value realized on the vesting date, based on the average of the high and low of the Company's Common Stock on that date.
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| | Option Awards | | Stock Awards |
Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) |
| | |
Howard M. Lorber | | — | | | — | | | 395,872 | | | $ | 6,540,872 | |
Richard J. Lampen | | — | | | — | | | 56,250 | | | $ | 635,149 | |
J. Bryant Kirkland III | | — | | | — | | | 30,000 | | | $ | 338,746 | |
Marc N. Bell | | — | | | — | | | 30,000 | | | $ | 338,746 | |
Nicholas P. Anson | | — | | | — | | | 2,500 | | | $ | 26,906 | |
Retirement Benefits
PENSION BENEFITS AT 2022 FISCAL YEAR END
The table below quantifies the benefits expected to be paid from the Company’s Supplemental Retirement Plan. The terms of the plans are described below the table.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Number of Years of Credited | | Present Value of Accumulated | | Payments During |
Name | | Plan Name | | Service (#) (1) | | Benefit ($) (2),(3) | | Last Fiscal Year ($) |
Howard M. Lorber | | Supplemental | | 11 | | $ | 46,931,343 | | | $0 |
| | Retirement Plan | | | | | | |
Richard J. Lampen | | Supplemental | | 10 | | $ | 5,551,149 | | | $0 |
| | Retirement Plan | | | | | | |
J. Bryant Kirkland III | | Supplemental | | 19 | | $ | 1,754,673 | | | $0 |
| | Retirement Plan | | | | | | |
Marc N. Bell | | Supplemental | | 17 | | $ | 2,880,796 | | | $0 |
| | Retirement Plan | | | | | | |
Nicholas P. Anson (4) | | Supplemental | | N/A | | $ | — | | | $0 |
| | Retirement Plan | | | | | | |
___________________________
(1)Equals number of years of credited service as of December 31, 2022. Credited service under the Supplemental Retirement Plan is based on a named executive officer’s period of full time continuous covered employment after commencing participation in the Supplemental Retirement Plan.
(2)Represents actuarial present value in accordance with the same assumptions outlined in note 12 to the Company’s audited financial statements.
(3)Includes amounts which the named executive officer is not currently entitled to receive because such amounts are not vested.
(4)Mr. Anson does not participate in the Supplemental Retirement Plan.
Supplemental Retirement Plan
The Supplemental Retirement Plan provides for the payment to a participant at his normal retirement date of a lump sum amount that is the actuarial equivalent of a single life annuity commencing on that date. The “normal retirement date” under the Supplemental Retirement Plan is defined as the January 1st following attainment by a participant of the later of age 60 or the completion of eight years of employment following January 1, 2002 (in the case of Mr. Lorber) or January 1, 2004 (in the case of Messrs. Lampen, Kirkland and Bell).
The following table sets forth for each named executive officer his hypothetical single life annuity, his normal retirement date and his projected lump sum payment at his normal retirement date.
| | | | | | | | | | | | | | | | | | | | |
| | Hypothetical | | Normal | | Lump-Sum |
Name | | Single Life Annuity | | Retirement Date | | Equivalent |
Howard M. Lorber | | $ | 1,051,875 | | | January 1, 2010 | | $ | 10,855,666 | |
| | $ | 735,682 | | | January 1, 2013 | | $ | 7,121,988 | |
Richard J. Lampen | | $ | 250,000 | | | January 1, 2014 | | $ | 2,625,275 | |
J. Bryant Kirkland III | | $ | 202,500 | | | January 1, 2026 | | $ | 2,126,473 | |
Marc N. Bell | | $ | 200,000 | | | January 1, 2021 | | $ | 2,100,220 | |
Nicholas P. Anson | | $ | — | | | | | $ | — | |
No benefits are payable under the Supplemental Retirement Plan if a named executive officer resigns without good reason before attaining his normal retirement date. In the case of a participant who becomes disabled prior to his normal retirement date or whose service is terminated without cause, the participant’s benefit consists of a pro-rata portion of the full
projected retirement benefit to which he would have been entitled had he remained employed through his normal retirement date, as actuarially discounted back to the date of payment. The beneficiary of a participant who dies while working for the Company or a subsidiary (and before becoming disabled or attaining his normal retirement date) will be paid an actuarially discounted equivalent of his projected retirement benefit; conversely, a participant who retires beyond his normal retirement date will receive an actuarially increased lump sum payment to reflect the delay in payment using a post-retirement interest rate of 7.5%. The lump sum amount under the Supplemental Retirement Plan is paid six months following the named executive officer’s retirement on or after his normal retirement date or termination of employment without cause, along with interest at the prime lending rate as published in the Wall Street Journal on the lump sum amount for this six-month period.
Because Messrs. Lorber, Lampen and Bell did not retire on their normal retirement dates, their additional benefits are being increased by 7.5% per annum for each year they continue to be an employee of the Company after their normal retirement dates listed in the table above.
Potential Termination and Change in Control Payments
The compensation payable to named executive officers upon voluntary termination, involuntary termination without cause, termination for cause, termination following a change in control and in the event of disability or death of the executive is described below.
Payments Made Upon Termination
Regardless of the manner in which a named executive officer’s employment terminates, unless terminated for cause, he or she may be entitled to receive amounts earned during his or her term of employment. Such amounts include:
•unpaid base salary through the date of termination;
•any accrued and unused vacation pay;
•any unpaid award under the 2014 Plan or bonus under the 2014 Plan with respect to a completed performance period;
•all accrued and vested benefits under the Company’s compensation and benefit programs, including the pension plan and the Supplemental Retirement Plan; and
•with respect solely to Mr. Lorber, payment by the Company of a tax gross-up for any excise taxes and related income taxes on gross-ups for benefits received upon termination of employment in connection with a change in control.
Payments Made Upon Involuntary Termination of Employment Without Cause or for Good Reason, Death or Disability
In the event of the termination of employment of a named executive officer by the Company without cause or by the named executive officer for good reason, or upon the death or except for Mr. Anson, the disability of a named executive officer, in addition to the benefits listed under the heading “Payments Made Upon Termination,” the named executive officer or his designated beneficiary upon his death will receive the following benefits:
•payments for 36 months for Mr. Lorber or 24 months for the other named executive officers (the “Severance Period”) equal to 100% of the executive’s then-current base salary and (except for Mr. Anson) the most recent bonus paid to the executive (up to the amount of the executive’s target bonus);
•continued participation, at the Company’s expense, during the Severance Period in all employee welfare and health benefit plans, including life insurance, health, medical, dental and disability plans which cover the executive and the executive’s eligible dependents (or, if such plans do not permit the executive and his eligible dependents to participate after his termination, the Company is required to pay an amount each quarter (not to exceed $35,000 per year in the case of Messrs. Lampen, Kirkland and Bell) to keep them in the same economic position on an after-tax basis as if they had continued in such plans);
•with respect solely to Mr. Anson, a pro-rata amount of any bonus award for which the performance period has not been completed based on 100% of the target bonus award for such period to the extent that Mr. Anson is terminated on or after July 1 of the applicable year and bonuses are otherwise paid to the management of Liggett for that year;
•acceleration of the vesting of the named executive officer's stock options upon death or disability and with respect solely to Mr. Lorber, upon a termination of employment without cause or resignation for good reason; and,
•acceleration of the vesting of the named executive officer’s restricted stock awards upon death, disability, a termination of employment without cause or resignation for good reason.
Payments Made Upon a Change in Control
Howard M. Lorber
Mr. Lorber’s employment agreement has a “double-trigger” change in control provision: if his employment is terminated by the Company without cause or by Mr. Lorber for good reason within two years after a change in control (or before a change in control that actually occurs in anticipation of or at the request of a third party effectuating such a change in control), Mr. Lorber would be entitled to receive the following severance benefits:
•a lump-sum cash payment equal to 2.99 times the sum of his base salary plus the last annual bonus earned by him (up to 100% of base salary, including any deferred amount) for the performance period immediately preceding the date of termination;
•participation by Mr. Lorber and his eligible dependents in all welfare benefit plans in which they were participating on the date of termination until the earlier of (x) the end of the employment period under his employment agreement and (y) the date that he receives equivalent coverage and benefit under the plans and programs of a subsequent employer;
•continued participation at the Company’s expense for 36 months in life, disability, accident, health and medical insurance benefits substantially similar to those received by Mr. Lorber and his eligible dependents prior to such termination, subject to reduction if comparable benefits are actually received from a subsequent employer; and
•termination of certain restrictive covenants in his employment agreement, including non-competition and non-solicitation covenants.
Mr. Lorber's unvested and outstanding equity awards will vest in full upon a change in control.
Richard J. Lampen, J. Bryant Kirkland III, Marc N. Bell and Nicholas P. Anson
While their respective employment agreements do not contain any change in control provisions, in the event of the termination of Messrs. Lampen, Kirkland, Bell and Anson by the Company without cause or by the named executive officer for good reason upon a change in control, such named executive officers would receive the same severance benefits described in the section titled “Payments Made Upon Termination” and “Payments Made Upon Involuntary Termination of Employment Without Cause or for Good Reason, Death or Disability,” above. In addition, the unvested and outstanding stock options and restricted stock held by Messrs. Lampen, Kirkland and Bell will vest in full upon a change in control and the unvested .restricted stock held by Mr. Anson will vest in full upon a change in control.
Definition of Change in Control
Pursuant to the employment agreement between the Company and Mr. Lorber, a “change in control” is deemed to occur if:
•a person unaffiliated with the Company acquires more than 40 percent control over its voting securities;
•the individuals who, as of January 1, 2006, are members of the Company’s Board (the “Incumbent Board”), cease to constitute at least two-thirds of the Incumbent Board; however, a newly-elected director that was elected or nominated by two-thirds of the Incumbent Board shall be considered a member of the Incumbent Board;
•the Company’s stockholders approve a merger, consolidation or reorganization with an unrelated entity, unless the Company’s stockholders would own at least 51 percent of the voting power of the surviving entity; the individuals who were members of the Incumbent Board constitute at least a majority of the members of the board of directors of the surviving entity; and no person (other than one of the Company’s affiliates) has beneficial ownership of 40 percent or more of the combined voting power of the surviving entity’s then outstanding voting securities;
•the Company’s stockholders approve a plan of complete liquidation or dissolution of the Company; or
•the Company’s stockholders approve the sale or disposition of all or substantially all of the Company’s assets.
Definition of Termination for Cause
Under each of the employment agreements with Messrs. Lorber, Lampen, Kirkland and Bell, termination by the Company for “cause” is defined as the executive:
•being convicted of or entering a plea of nolo contendere with respect to a criminal offense constituting a felony;
•committing in the performance of his duties under his employment agreement one or more acts or omissions constituting fraud, dishonesty or willful injury to the Company which results in a material adverse effect on the business, financial condition or results of operations of the Company;
•committing one or more acts constituting gross neglect or willful misconduct which results in a material adverse effect on the business, financial condition or results of operations of the Company;
•exposing the Company to criminal liability substantially and knowingly caused by the executive which results in a material adverse effect on the business, financial condition or results of operations of the Company; or
•failing to substantially perform his duties under his employment agreement (excluding any failure to meet any performance targets or to raise capital or any failure as a result of an approved absence or any mental or physical impairment that could reasonably be expected to result in a disability), after written warning from the Board specifying in reasonable detail the breach(es) complained of.
Under the employment agreement between Liggett and Mr. Anson, “cause” is defined as:
•a material breach by Mr. Anson of his duties and obligations under his employment agreement which breach is not remedied to the satisfaction of the board of managers of Liggett (“Liggett Board”), within 30 days after receipt by Mr. Anson of written notice of such breach from the Liggett Board;
•Mr. Anson’s conviction or indictment for a felony;
•an act or acts of personal dishonesty by Mr. Anson intended to result in personal enrichment of Mr. Anson at the expense of the Company or any of its affiliates or any other material breach or violation of Mr. Anson’s fiduciary duty owed to the Company or any of its affiliates;
•material violation of any Company or Liggett policy or the Company’s code of business conduct and ethics; or
•any grossly negligent act or omission or any willful and deliberate misconduct by Mr. Anson that results, or is likely to result, in material economic, or other harm, to the Company or any of its affiliates (other than any act or omission by Mr. Anson if it was taken or omitted to be done by Mr. Anson in good faith and with a reasonable belief that such action or omission was in the best interests of the Company).
Definition of Termination for Good Reason
Under each of the employment agreements with Messrs. Lorber, Lampen, Kirkland and Bell, termination by the executive for “good reason” is defined as:
•a material diminution of the executive’s duties and responsibilities provided in his employment agreement, including, without limitation, the failure to elect or re-elect the executive to his position (including with respect solely to Mr. Lorber, his position as a member of the Board) or the removal of the executive from any such position;
•a reduction of the executive’s base salary or target bonus opportunity as a percentage of base salary or any other material breach of any material provision of his employment agreement by the Company;
•relocation of the executive’s office from the Miami (or with respect solely to Mr. Lorber, Miami or New York City) metropolitan areas;
•the change in the executive’s reporting relationship from direct reporting to the Board, in the case of Mr. Lorber, to the Chairman and the CEO, in the case of Mr. Lampen, or to the Chairman, CEO or the Executive Vice President and COO, in the case of Messrs. Kirkland and Bell; or
•the failure of a successor to all or substantially all of the Company’s business or assets to promptly assume and continue his employment agreement obligations whether contractually or as a matter of law, within 15 days of such transaction.
Under the employment agreement with Mr. Anson, “good reason” exists if, without the prior written consent of Mr. Anson:
•Mr. Anson is removed as President and Chief Operating Officer of Liggett, other than in connection with the termination of his employment;
•a material reduction of Mr. Anson’s base salary, target annual bonus opportunity or the aggregate level of employee benefits made available in his employment agreement;
•Mr. Anson’s duties and responsibilities at Liggett are significantly diminished or there are assigned to him duties and responsibilities materially inconsistent with his position; or
•Mr. Anson is required to relocate more than 75 miles from Mr. Anson’s current work location.
Assumptions Regarding Post-Termination Payment Tables
The following tables were prepared as though each named executive officer’s employment was terminated on December 31, 2022 using the closing price of the Company’s Common Stock as of that day ($11.86). The amounts under the columns which reflect a change in control assume that a change in control followed by a qualifying termination of employment occurred on December 31, 2022. However, the executives’ employment was not terminated on December 31, 2022 and a change in control did not occur on that date. There can be no assurance that a termination of employment, a change in control or both would produce the same or similar results as those quantified below if either or both of these events occur on any other date or at any other price, or if any other assumption used in these estimates changes based on the facts and circumstances at the time of an actual change in control or termination of employment.
Equity-Based Assumptions
•Stock options held by Messrs. Lorber, Lampen, Kirkland and Bell would have vested on December 31, 2022 with respect to a change in control or a termination of employment due to the executive's death, disability, or with respect solely to Mr. Lorber, upon a termination of employment without cause or resignation for good reason. Mr. Anson did not hold any unvested stock options at December 31, 2022.
•Restricted stock held by Messrs. Lorber, Lampen, Kirkland, Bell and Anson would have vested on December 31, 2022 with respect to a termination of employment due to the executive's death, disability, or upon a termination of employment without cause or resignation for good reason or a change in control.
•Stock options that became vested due to a change in control were valued based on their “spread” (i.e., the difference between the stock’s fair market value and the exercise price).
•It is possible that in the case of Mr. Lorber's payments, IRS rules would require these items to be valued using a valuation method such as, with respect to stock options, the Black-Scholes model if the stock options were continued after a change in control. Using a Black-Scholes value in lieu of the “spread” would cause higher value for excise taxes and the related tax gross-up payment.
Incentive Plan Assumptions
•All amounts under the 2014 Plan were deemed to have been earned for 2022 in full based on actual performance and are not treated as subject to the excise tax upon a change in control.
Retirement Benefit Assumptions
•All benefits were assumed to be payable in a single lump sum at the participant’s assumed retirement date.
Howard M. Lorber
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Company without Cause or by Named Executive Officer with Good Reason | | Disability | | Death | | Termination by Company for Cause or Voluntary Termination by Named Executive Officer Without Good Reason | | Termination by Company without Cause or by Named Executive Officer with Good Reason upon a Change in Control | |
Cash Severance | $ | 15,791,310 | | (1) | $ | 15,791,310 | | (1) | $ | 15,791,310 | | (1) | $ | — | | | $ | 15,738,672 | | (2) |
Value of Accelerated Unvested Equity (3) | $ | 13,832,750 | | | $ | 13,832,750 | | | $ | 13,832,750 | | | $ | — | | | $ | 13,832,750 | | |
Benefits Continuation (4) | $ | 167,957 | | | $ | 167,957 | | | $ | 30,310 | | | $ | — | | | $ | 167,957 | | |
Value of Supplemental Retirement Plan (5) | $ | 42,553,087 | | | $ | 42,553,087 | | | $ | 42,553,087 | | | $ | 42,553,087 | | | $ | 42,553,087 | | |
Excise Tax and Gross-Up | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | (6) |
___________________________
(1)Reflects the value of the sum of Mr. Lorber’s 2022 base salary ($1,837,500) and last paid bonus limited to 100% of base salary ($3,426,270) paid over a period of 36 months after termination.
(2)Reflects the value of the sum of Mr. Lorber’s 2022 base salary ($1,837,500) and last paid bonus limited to 100% of base salary ($3,426,270) for a period of 2.99 years paid in a lump-sum payment commencing after termination.
(3)Reflects the value of any unvested stock options or restricted stock and related dividends that would have vested upon the event using the closing price of the Company’s Common Stock on December 31, 2022 ($11.86). See “Outstanding Equity Awards at December 31, 2022.”
(4)Reflects the value of premium payments for life insurance, medical, dental and disability plans for 36 months, as applicable, at the Company’s cost, based on 2022 premiums.
(5)Reflects the lump-sum value of the benefits accrued under the Supplemental Retirement Plan as of December 31, 2022. See “Pension Benefits at 2022 Fiscal Year End.”
(6)Mr. Lorber is entitled to receive a tax gross-up for any excise taxes and related income taxes on gross-ups for benefits received upon a change in control. Based on the assumptions set forth above, no excise tax would be due on a qualifying termination of Mr. Lorber's employment in connection with a change in control.
Richard J. Lampen
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Company without Cause or by Named Executive Officer with Good Reason | | Disability | | Death | | Termination by Company for Cause or Voluntary Termination by Named Executive Officer Without Good Reason | | Termination by Company without Cause or by Named Executive Officer with Good Reason upon a Change in Control |
Cash Severance (1) | $ | 2,550,000 | | | $ | 2,550,000 | | | $ | 2,550,000 | | | $ | — | | | $ | 2,550,000 | |
Value of Accelerated Unvested Equity (2) | $ | 3,975,488 | | | $ | 3,975,488 | | | $ | 3,975,488 | | | $ | — | | | $ | 3,975,488 | |
Benefits Continuation (3) | $ | 107,844 | | | $ | 107,844 | | | $ | 20,207 | | | $ | — | | | $ | 107,844 | |
Value of Supplemental Retirement Plan (4) | $ | 5,033,279 | | | $ | 5,033,279 | | | $ | 5,033,279 | | | $ | 5,033,279 | | | $ | 5,033,279 | |
Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
___________________________
(1)Reflects the value of the sum of Mr. Lampen’s 2022 base salary ($650,000) and last paid bonus limited to 50% of base salary ($625,000) paid over a period of 24 months commencing after termination.
(2)Reflects the value of any unvested stock options or restricted stock and related dividends that would have vested upon the event using the closing price of the Company’s Common Stock on December 31, 2022 ($11.86). See “Outstanding Equity Awards at December 31, 2022.”
(3)Reflects the value of premium payments for life insurance, medical, dental and disability plans for 24 months, as applicable, at the Company’s cost, based on 2022 premiums.
(4)Reflects the lump-sum value of the benefits accrued under the Supplemental Retirement Plan as of December 31, 2022. See “Pension Benefits at 2022 Fiscal Year End.”
J. Bryant Kirkland III
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Company without Cause or by Named Executive Officer with Good Reason | | Disability | Death | | Termination by Company for Cause or Voluntary Termination by Named Executive Officer Without Good Reason | | Termination by Company without Cause or by Named Executive Officer with Good Reason upon a Change in Control |
Cash Severance (1) | $ | 1,516,630 | | | $ | 1,516,630 | | $ | 1,516,630 | | | $ | — | | | $ | 1,516,630 | |
Value of Accelerated Unvested Equity (2) | 2,171,813 | | | $ | 2,171,813 | | $ | 2,171,813 | | | $ | — | | | $ | 2,171,813 | |
Benefits Continuation (3) | $ | 55,379 | | | $ | 55,379 | | $ | — | | | $ | — | | | $ | 55,379 | |
Value of Supplemental Retirement Plan (4) | $ | 1,478,309 | | | $ | 1,478,309 | | $ | 1,711,727 | | | $ | — | | | $ | 1,478,309 | |
Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | |
___________________________
(1)Reflects the value of the sum of Mr. Kirkland’s 2022 base salary ($575,000) and last paid bonus limited to 33.33% of base salary ($183,315) paid over a period of 24 months commencing after termination.
(2)Reflects the value of any unvested stock options or restricted stock and related dividends that would have vested upon the event using the closing price of the Company’s Common Stock on December 31, 2022 ($11.86). See “Outstanding Equity Awards at December 31, 2022.”
(3)Reflects the value of premium payments for life insurance, medical, dental and disability plans for 24 months, as applicable, at the Company’s cost, based on 2022 premiums.
(4)Reflects the lump-sum value of the benefits accrued under the Supplemental Retirement Plan as of December 31, 2022. See “Pension Benefits at 2022 Fiscal Year End.”
Marc N. Bell
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Company without Cause or by Named Executive Officer with Good Reason | | Disability | | Death | | Termination by Company for Cause or Voluntary Termination by Named Executive Officer Without Good Reason | | Termination by Company without Cause or by Named Executive Officer with Good Reason upon a Change in Control |
Cash Severance (1) | $ | 1,237,500 | | | $ | 1,237,500 | | | $ | 1,237,500 | | | $ | — | | | $ | 1,237,500 | |
Value of Accelerated Unvested Equity (2) | $ | 2,171,813 | | | $ | 2,171,813 | | | $ | 2,171,813 | | | $ | — | | | $ | 2,171,813 | |
Benefits Continuation (3) | $ | 135,980 | | | $ | 135,980 | | | $ | 77,362 | | | $ | — | | | $ | 135,980 | |
Value of Supplemental Retirement Plan (4) | $ | 2,427,067 | | | $ | 2,427,067 | | | $ | 2,427,067 | | | $ | 2,427,067 | | | $ | 2,427,067 | |
Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
___________________________
(1)Reflects the value of the sum of Mr. Bell’s 2022 base salary ($500,000) and last paid bonus limited to 25% of base salary ($118,750) paid over a period of 24 months commencing after termination.
(2)Reflects the value of any unvested stock options or restricted stock and related dividends that would have vested upon the event using the closing price of the Company’s Common Stock on December 31, 2022 ($11.86). See “Outstanding Equity Awards at December 31, 2022.”
(3)Reflects the value of premium payments for life insurance, medical, dental and disability plans for 24 months, as applicable, at the Company’s cost, based on 2022 premiums.
(4)Reflects the lump-sum value of the benefits accrued under the Supplemental Retirement Plan as of December 31, 2022. See “Pension Benefits at 2022 Fiscal Year End.”
Nicholas P. Anson
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Termination by Company without Cause or by Named Executive Officer with Good Reason | | Disability | | Death | | Termination by Company for Cause or Voluntary Termination by Named Executive Officer Without Good Reason | | Termination by Company without Cause or by Named Executive Officer with Good Reason upon a Change in Control |
Cash Severance (1) | $ | 1,300,000 | | | $ | — | | | $ | 1,300,000 | | | $ | — | | | $ | 1,300,000 | |
Value of Accelerated Unvested Equity (2) | $ | 326,150 | | | $ | 326,150 | | | $ | 326,150 | | | $ | — | | | $ | 326,150 | |
Benefits Continuation (3) | $ | 58,570 | | | $ | 58,570 | | | $ | 51,670 | | | $ | — | | | $ | 58,570 | |
Value of Retirement Benefits (4) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Excise Tax and Gross-Up (not applicable) | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | |
| | | | | | | | | |
___________________________
(1)Reflects the value of the sum of Mr. Anson’s 2022 base salary ($650,000) paid over a period of 24 months, as applicable, commencing after termination. After 12 months, Mr. Anson's cash severance is reduced by any salary, bonus, consulting fees or other compensation earned (irrespective of when paid) from any employment or consulting work.
(2)Reflects the value of any unvested restricted stock and related dividends that would have vested upon the event using the closing price of the Company’s Common Stock on December 31, 2022 ($11.86). See “Outstanding Equity Awards at December 31, 2022.”
(3)Reflects the value of premium payments for life insurance, medical, dental and disability plans for 24 months, as applicable, at the Company’s cost, based on 2022 premiums.
(4)Mr. Anson is not a participant in the Supplemental Retirement Plan as of December 31, 2022.
Compensation of Directors
The compensation of the Company's non-employee directors is designed to be fair based on the amount of work required of directors of the Company. Under our current director compensation program, each of the non-employee directors receives:
•annual cash retainer fee of $75,000;
•annual committee retainer fee of $5,000;
•fees for serving as the committee chairperson of $25,000 for the corporate responsibility and nominating committee and $10,000 for each of the compensation and human capital and audit committees;
•periodic grants of restricted shares (the Company granted 7,500 restricted shares on December 15, 2022, vesting in two installments on each of June 28, 2023 and June 28, 2024, to its independent directors);
•reimbursement for reasonable out-of-pocket expenses incurred in serving on the Company's Board; and
•access to and payment for the Company's health, dental and standard life insurance coverage.
The table below summarizes the compensation the Company paid to the non-employee directors for the year ended December 31, 2022.
NON-EMPLOYEE DIRECTOR COMPENSATION IN FISCAL YEAR 2022
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fees Earned or Paid in Cash | | Stock Awards | | All Other Compensation | | | | Total |
Name | ($) | | ($) | | ($) | | | | ($) |
Stanley S. Arkin | $ | 90,000 | | | $ | — | | | $ | 4,532 | | | (1) | | $ | 94,532 | |
Henry C. Beinstein (5) | $ | 90,000 | | | $ | 84,225 | | (4) | $ | 25,693 | | | (2) | | $ | 199,918 | |
Ronald J. Bernstein | $ | 75,000 | | | $ | — | | | $ | 761,701 | | | (3) | | $ | 836,701 | |
Paul V. Carlucci (5) | $ | 85,000 | | | $ | 84,225 | | (4) | $ | 25,136 | | | (1) | | $ | 194,361 | |
Bennett S. LeBow (5) | $ | 80,000 | | | $ | 84,225 | | (4) | $ | 43,597 | | | (2) | | $ | 207,822 | |
Jean E. Sharpe (5) | $ | 110,000 | | | $ | 84,225 | | (4) | $ | 16,304 | | | (2) | | $ | 210,529 | |
Barry Watkins (5) | $ | 80,000 | | | $ | 84,225 | | (4) | $ | 2,321 | | | (2) | | $ | 166,546 | |
Wilson L. White (5) | $ | 80,000 | | | $ | 84,225 | | (4) | $ | 240 | | | (1) | | $ | 164,465 | |
___________________________
(1)Represents life insurance premiums paid by the Company.
(2)Represents health and life insurance premiums paid by the Company.
(3)Represents health and life insurance premiums paid by the Company and, consulting fees related to Mr. Bernstein's service as Non-Executive Chairman of the Board of Managers of Liggett Vector Brands and as a Senior Advisor to Liggett, effective April 1, 2020.
(4)Represents the aggregate grant date fair value of restricted stock granted under the 2014 Plan as determined in accordance with FASB ASC Topic 718.
(5)Held 7,500 shares of unvested restricted stock at December 31, 2022.
Compensation and Human Capital Committee Interlocks and Insider Participation
No member of the Company’s compensation and human capital committee is, or has been, an employee or officer of the Company other than Ms. Sharpe who joined the compensation and human capital committee in March 2009. Ms. Sharpe retired as an officer of the Company in 1993. During 2022, (i) no member of the Company’s compensation and human capital committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K; and (ii) none of the Company’s executive officers served on the compensation and human capital committee (or other board committee performing equivalent functions or, in the absence of such committee, the board of directors) of another entity whose executive officer(s) served on the Company’s compensation and human capital committee.