On February 21, 2017, the Compensation Committee agreed to implement the previously approved base
salary increase for Mr. David Cherechinsky, the Companys Chief Accounting Officer, to $300,000, noting that such base salary increase still put Mr. Cherechinskys base salary below the median market base salary level of his
peers.
In November 2017, the Compensation Committee conducted its annual review with L&A of the base salaries of the named executive officers. The
Compensation Committee considered each named executive officers base salary relative to his peers and found that the Companys chief executive officer was still below the market 25
th
percentile and the other executives were generally aligned between the market 25
th
percentile and the market 50
th
percentile. Given that market
conditions during 2017 had improved and the Companys performance had improved as well, and also given that the Companys executive officers had not had any base salary adjustments for three years (and the executives base salary
levels have remained below median levels since the Company was
spun-off
in 2014), the Compensation Committee requested that L&A review and update the Original Three Year Base Pay Plan, in an effort to come
up with a long-term plan to align executive base salary pay to market median levels.
After such review and analysis, L&A recommended that increases
to base salaries to achieve near the market 50
th
percentile be made over a period of three years, so as to limit the amount of any increases over a one year period and to allow the Compensation
Committee to review and make any further adjustments on an annual basis. The Compensation Committee agreed to the staged increases in base salary pay over a three year period, subject to an annual cap that would allow the Company to maintain fiscal
responsibility and better manage pay for performance alignment while salaries adjust to the market median, starting in 2018 (Updated Three Year Base Pay Plan).
Thus, effective January 1, 2018, the Compensation Committee approved the following base salary increases for the Companys executive officers:
Robert Workman from $600,000 to $700,000; Daniel Molinaro from $425,000 to $450,000; Raymond Chang from $368,000 to $400,000; and David Cherechinsky from $300,000 to $305,000. These base salary adjustments were the result
of the Compensation Committee approving the Updated Three Year Base Pay Plan, as a result of their following findings:
(1) the Companys chief
executive officer was still below the market 25
th
percentile in base salary pay and the other executives were generally aligned between the market
25
th
percentile and the market 50
th
percentile,
(2) market conditions during 2017 had improved and the Companys performance had improved as well, and
(3) the Companys executive officers had not had any base salary adjustments for three years.
The Updated Three Year Base Pay Plan was designed to address the above concerns, taking into further consideration that the executives base salary
levels have remained below median levels since the Company was
spun-off
in 2014, and the implementation of this new plan was designed to bring executive compensation closer to the market 50
th
percentile over a three year period.
On February 20, 2018, the Compensation Committee, after
consulting with L&A, approved the following base salary increases for the Companys executive officers: David Cherechinsky from $305,000 to $405,000 and Mark Johnson from $168,000 to $243,000. Increases in base salary for
these executive officers were approved, effective February 16, 2018, as a result of such executives promotions to new positions at the Company and each of their increased responsibilities (Mr. Cherechinsky becoming the Companys
Chief Financial Officer and Mr. Johnson becoming the Companys Chief Accounting Officer, effective February 16, 2018). While each of their new base salaries are still below the median level of
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