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Middleby Corp. – ‘DEF 14A’ for 5/16/22

On:  Thursday, 3/31/22, at 4:06pm ET   ·   For:  5/16/22   ·   Accession #:  1308179-22-156   ·   File #:  1-09973

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/31/22  Middleby Corp.                    DEF 14A     5/16/22    2:3.4M                                   Labrador Co./FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Middleby Corp - DEF 14A                             HTML    441K 
 2: DEF 14A     Courtesy PDF of Proxy Statement --                   PDF    446K 
                lmidd2022_def14a                                                 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.     )

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:
	Preliminary Proxy Statement
	Confidential, for Use of the Commission Only (as permitted by Rule 14A-6(E)(2))
	Definitive Proxy Statement
	Definitive Additional Materials
	Soliciting Material under §240.14a-12

Middleby Corp.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):
	No fee required.
	Fee paid previously with preliminary materials.
	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

This is Middleby

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

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

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

		Commercial Foodservice
		Middleby is the worldwide leader in innovative solutions for commercial foodservice. We develop and manufacture advanced cooking, warming, beverage and cooling equipment, along with innovative IoT and robotics solutions to enhance operations for commercial foodservice operators. Middleby brands can be found in a wide array of foodservice businesses, including quick service, fast casual, pizza, ghost kitchen, casual and fine dining establishments, grocery and convenience stores; and institutional commissaries and stadiums.
		Residential
		Middleby is a global leader in premium, residential kitchen and outdoor cooking appliances. Our brands are known and respected by consumers around the world. Our in-home products are not only technologically advanced; they also are sought after for their classic and contemporary kitchen design. Our outdoor cooking brands drive consumer trends to enhance and simplify the backyard grilling experience.
		Food Processing
		Middleby develops innovative, industry-leading solutions for industrial protein processing, high-volume baking, and other specialty areas where automated and large scale food production is required. With a broad offering of highly respected brands and advanced technologies, Middleby has the ability to fully integrate a wide array of solutions to deliver efficiency, flexibility, quality and consistency.

2022 PROXY STATEMENT

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2022 PROXY STATEMENT

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Proxy Summary

THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION FROM THIS PROXY STATEMENT, BUT DOES NOT CONTAIN ALL THE INFORMATION THAT YOU SHOULD CONSIDER. PLEASE READ THE ENTIRE PROXY STATEMENT BEFORE VOTING YOUR SHARES. FOR MORE COMPLETE INFORMATION REGARDING MIDDLEBY’S 2021 PERFORMANCE, PLEASE REVIEW OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 1, 2022.

	WHEN		WHERE		RECORD DATE
	Monday, May 16, 2022, at 10:30 a.m. (CDT)		Virtual Meeting www.virtualshareholdermeeting.com/ MIDD2022		March 18, 2022

Meeting Agenda

The matters we will act upon at the Annual Meeting are:

Proposal		Board voting recommendation			Where to find more information
	Elect seven directors for a one-year term		FOR all nominees		Page 13
	Approve, on an advisory basis, the compensation of Middleby’s named executive officers		FOR		Page 27
	Ratify the selection of Ernst & Young LLP as Middleby’s independent registered public accounting firm for fiscal year 2022		FOR		Page 50

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Director Nominees

Name		Occupation		Age		Director since		Independent		Committees
Sarah Palisi Chapin		Principal of Chapin Creative, LLC		60		2013				•  Nominating and Corporate Governance (chair) •  Compensation
Timothy J. FitzGerald		Chief Executive Officer of The Middleby Corporation		52		2019
Cathy L. McCarthy		President and Chief Executive Officer of Cross Tack Consulting, Inc.		74		2015				•  Audit (chair)* •  Nominating and Corporate Governance
John R. Miller III		Retired Chairman and Chief Executive Officer of EOP, Inc.		81		1978				•  Compensation (chair) •  Nominating and Corporate Governance
Robert A. Nerbonne		Former CEO and President of multiple commercial foodservice equipment companies; Retired Executive Vice President of Cooper-Atkins Corporation		64		2019				•  Nominating and Corporate Governance
Gordon O’Brien Chairman of the Board		Chief Investment Officer and Chief Financial Officer at Re:Build Manufacturing, LLC		56		2005				•  Audit* •  Compensation
Nassem Ziyad		Chief Operating Officer of Ziyad Brothers Importing		56		2017				•  Audit •  Compensation

*Audit Committee Financial Expert

* One male Board member self-identifies as Asian and Latinx and a second male Board member self-identifies as Asian and White.

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2021 Performance

Middleby Segments

The following graphics show how our business revenue is distributed in terms of segments and geography.

Adjusted EPS and Free Cash Flow are not prepared in accordance with generally accepted accounting principles in the United States (GAAP). For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and insight into how these non-GAAP measures are considered by management, please see Annex A.

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Transformative Strategic Growth Initiatives

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Strategic Developments

Transformative Growth Strategy

We completed six acquisitions in 2021 adding three brands in commercial foodservice and four brands to our residential platform. We enhanced our manufacturing and distribution footprint in the Western United States with our acquisition of Imperial. We added several meaningful technologies that impact our value proposition across many product offerings within our commercial foodservice platform. We strengthened our residential portfolio with the addition of NOVY (a manufacturer of premium residential ventilation hoods) and several well well-known outdoor cooking brands (Kamado Joe, Masterbuilt and Char-Griller) to address current market trends.

Along with acquisitions we launched Middleby Innovation Kitchens (“MIK”), based in the Dallas area. The MIK is a 40,000-square foot facility with 15 live cooking vignettes and more than 150 pieces of Middleby foodservice and beverage technology. Since its opening, the MIK has hosted thousands of guests from the world’s largest chains to Middleby partners.

Middleby’s Continued M&A Focus

Middleby has completed 20+ transactions since the beginning of 2019, investing in key technology initiatives and trends, while enhancing our capabilities across all three business segments.

Technology Innovations

We continued to focus on longer-term initiatives and technology tied to emerging and accelerating trends, including:

Continued Focus on Enhanced Sales Processes

We prioritize continuing to engage and educate current and new end users of our products.

Capital Structure Update

We amended our credit agreement to increase our facility size and extend the maturity date. This significantly enhanced Middleby’s capital structure and ensured our mid-term access to adequate liquidity to execute our strategic plan.

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COVID-19 Response

The swift actions we implemented in response to the COVID-19 pandemic to protect our employees, ensure uninterrupted service to our customers, and aggressively adjust our business and cost structure continue to be essential to our business. We continue to invest in technologies to ensure the safety of our employees, our customers, and their customers.

Our COVID-19 response also included the following actions.

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Compensation Highlights

Our executive compensation program strikes a balance of fixed and variable elements with short- and long-term elements. As shown below, in fiscal year 2021, 64% of target compensation for our Chief Executive Officer and 62% of target compensation (on average) for our other Named Executive Officers (the “NEOs”) was performance-based and at risk.

As discussed in the Compensation Discussion and Analysis, our executive compensation is a combination of base salary, an annual performance-based cash bonus incentive plan, and long-term equity incentive awards. The short- and long-term incentive programs have distinct performance metrics.

Given adjustments to our executive compensation programs since 2020 in response to stockholder feedback, it is useful to compare target compensation with compensation actually realized by our CEO and other NEOs. Realized compensation is the actual value of compensation received during the reporting year rather than the amounts shown in the Summary Compensation Table.

2022 PROXY STATEMENT

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Corporate Governance Highlights

We believe that robust corporate governance is critical for making prudent decisions in the long-term interests of stockholders. Below are key elements of our corporate governance practices.

What We Do			What We Don’t Do
	Majority vote standard for uncontested director elections			No golden parachute tax gross-ups for executive officers
	Six out of seven directors are independent			No poison pill in place
	Completely independent Board committees			No stock option repricing without stockholder approval
	Separate Chairman and CEO roles			No excessive perquisites for executive officers
	Independent Chairman			No dividends paid or accumulated on unvested RSUs or PSUs
	Annual stockholder engagement p]rogram
	Independent reviews by the Board and Audit Committee of the Company’s strategy, business, and the related key risks and mitigation activities
	Executive sessions at every in-person or virtual Board and committee meeting without management present
	Clawback Policy applicable to all executive officers and other covered officers
	Confidential, multilingual Anonymous Ethics and Compliance Hotline
	The Compensation Committee is advised by an independent compensation consultant
	Our Insider Trading Compliance Program expressly prohibits hedging, pledging and short selling Company stock
	Comprehensive Sustainability Report refreshed on periodic basis – most recently refreshed in January 2022 [NEW]
	Annual Board skillset evaluation
	Corporate Governance Guidelines
	Annual Board and committee self-evaluations
	Stock ownership guidelines for executive officers
	Refreshed Middleby Code of Conduct and related training and compliance programs [NEW]
	EHS Policy, Equal Employment Opportunity Policy and Human Rights Policy made publicly available on Company website [NEW]
	Supplier Code of Conduct applicable to all suppliers to the Company [NEW]

Stockholder Engagement Highlights

We are committed to our annual stockholder engagement program, which enables us to directly discuss and obtain feedback regarding topics of concern or interest to our stockholders. In December 2021 through January 2022, the Company engaged with stockholders to understand their views regarding ESG practices, corporate governance initiatives, and executive compensation matters. For this outreach initiative, we contacted Middleby’s top 25 stockholders, representing approximately 73% of our total shares outstanding. Ultimately, an executive management team from Middleby conducted meetings with or otherwise had correspondence with stockholders representing approximately 46% of our total outstanding shares. These discussions are summarized under “Governance—Stockholder Engagement” and “Compensation Discussion and Analysis—Stockholder Engagement Following the 2021 Annual Meeting.”

2022 PROXY STATEMENT

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Proposal No. 1

Election of Directors

The Board has nominated the seven current directors to serve as directors until the 2023 Annual Meeting of Stockholders and until their successors are duly elected and qualified or until their earlier death, resignation, or removal. Each of the nominees has consented to serve as a director if elected. The Board knows of no reason why any nominee would be unavailable to serve, but, in the event of any such unavailability, the proxies received will be voted for any substitute nominees the Board recommends.

How We Select Directors

The Nominating and Corporate Governance Committee (“NCGC”) periodically reviews the overall composition of the Board and recommends, if necessary, measures to ensure the Board reflects an appropriate balance of knowledge, experience, skills, expertise, and diversity. This process unfolds in two phases:

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The following matrix shows the diversity of relevant skills and experience among our nominees.

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

The NCGC’s policy is to consider any candidate recommended by stockholders by evaluating the needs of the Board and the qualifications of the candidate. The NCGC may establish formal procedures regarding stockholder submission of candidates in the future.

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Director Nominees

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The Board has a policy that requires any director who does not receive a majority of votes cast in an uncontested election to promptly tender a resignation. The NCGC will consider any such resignation and recommend appropriate action to the Board. The Board is required to take formal action on the NCGC’s recommendation no later than 90 days following the date of the stockholders’ meeting at which the election of directors occurred. The Board will consider the information, factors, and alternatives reviewed by the NCGC and such additional information, factors, and alternatives as the Board deems relevant. Within four business days after the Board decides whether to accept or reject a director resignation, the Company will publicly disclose that decision in a Form 8-K filed with the Securities and Exchange Commission (“SEC”), including an explanation of the process by which the decision was made and, if applicable, the Board’s reason(s) for rejecting the tendered resignation.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” EACH OF THE ABOVE NAMED NOMINEES AS A DIRECTOR OF THE COMPANY

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Governance

This section summarizes the Board’s responsibilities and significant policies. For more complete information, see Middleby’s Corporate Governance Guidelines, which are available on our website, www.middleby.com, under “Investors—Corporate Governance.”

Board Leadership Structure

The Board oversees management’s performance to ensure that Middleby operates in an effective, efficient, and ethical manner in order to produce value for our stockholders. To achieve this goal, the Board monitors both the performance of the Company (in relation to goals, strategy, and competitors) and the performance of the Chief Executive Officer, and offers constructive advice and feedback.

Our Corporate Governance Guidelines require the offices of the Chairman of the Board and the Chief Executive Officer to be separate. We believe having an independent director serve as Chairman of the Board best serves the Company and our stockholders, as this leadership structure provides a broader depth of experience that informs strategy, strengthens the Board’s integrity and independence, and reduces potential conflicts in the areas of performance evaluation, executive compensation, succession planning, and the recruitment of new directors.

Currently the Board is led by Gordon O’Brien, who has been Middleby’s independent Chairman since February 2019. Mr. O’Brien previously served as Lead Independent Director of the Board for nine years. In his capacity as independent Chairman of the Board, Mr. O’Brien is able to focus on and tangibly oversee Middleby’s senior management (including the CEO), Board leadership, and governance-related matters, while Mr. FitzGerald, our CEO, is able to exclusively focus on the Company’s strategy, day-to-day operations, and financial organizational health. Mr. O’Brien’s long-term relationship with Middleby and extensive knowledge of the Company’s operating structure and culture provides him with a broad and deep perspective that informs his judgment.

Independence

A majority of Middleby’s directors must be “independent” as such term is defined under NASDAQ listing standards. The Board reviews annually the relationships that each director has with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company). The Board has determined that every director except Mr. FitzGerald, our CEO, is independent.

Risk Oversight

The Board has responsibility for oversight of risk management. The Board and its committees regularly review information regarding Middleby’s credit, liquidity, and operations and other reports that are designed to inform the Board and its committees about how we identify, assess, and manage critical risks and our risk mitigation strategies.

The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans, Board of Directors compensation, and executive incentive plan design.

The Audit Committee oversees management of financial risks, financial reporting, disclosure requirements, internal controls over financial reporting, credit and liquidity matters, and our operational infrastructure. In addition, the Audit Committee is responsible for cyber risk management, regulatory matters, and compliance programs.

The Nominating and Corporate Governance Committee is responsible for evaluating risk associated with director and management succession planning, overseeing our ESG reporting, and evaluating the Company’s environmental, social and governance policies.

Management advises the Board about material risks as part of its broader responsibility to keep the Board well informed on all matters of significance to the Company. The Board believes its current leadership structure facilitates this clear delineation of responsibility with respect to risk management. Additionally, maintaining an independent Board with an independent Chairman promotes open discussion and assessment of the Company’s ability to manage risk.

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Annual Board Evaluation and Skillset Assessment

The NCGC coordinates an annual evaluation and skillset assessment of the Board as a whole and of each Board committee. The assessment includes a review of any areas in which the Board or management believe the Board can make a better contribution to the Company. The NCGC discusses the results of the evaluation and skillset assessment with the full Board and each individual committee. In addition, the results are used to evaluate and determine the characteristics and critical skills required of prospective candidates for election to the Board and to make recommendations with respect to assignments of directors to various committees and leadership positions.

Stockholder Engagement

We believe it is important for our governance process to have meaningful engagement with our stockholders and to understand their perspectives on corporate governance, executive compensation, and other issues that are important to them.

We value opportunities to proactively engage directly with our stockholders on topics of concern or interest, and use that feedback directly to inform our business decision-making process. The Company regularly shares information with stockholders via quarterly earnings releases, investor presentations posted on Middleby’s website, and attendance at investor conferences, trade shows, and other industry events.

Beginning in 2019, the Company began to annually engage in an open dialogue with stockholders to ensure leadership was hearing stockholder perspectives regarding our executive compensation practices, ESG practices, and other topics of stockholder interest. We strive to reach out to holders of at least 75% of the Company’s common stock and to have meetings with holders of at least 25% of the Company’s common stock. These meetings are typically scheduled for the fourth quarter of the year to inform decision-making and priorities for the upcoming fiscal year. Meetings are usually attended by the the CFO, the Chief Risk and Administration Officer and the Associate General Counsel.

In December 2021 and January 2022, we engaged with stockholders to discuss the Company’s ESG initiatives and to request feedback regarding modifications to the Company’s executive compensation programs that were implemented in 2021 in response to prior stockholder feedback. For this outreach program, we contacted Middleby’s top 25 stockholders, representing approximately 73% of our total outstanding shares, and conducted meetings or otherwise had correspondence with stockholders representing approximately 46% of our total outstanding shares.

Among other things, we discussed the publication of our 2021 Sustainability Report and evolution of our ESG practices consistent with the growth of the Company and the expectations of our stakeholders. Our investors expressed appreciation that Middleby continues to expand the breadth and depth of its ESG reporting and has progressed to building upon year-to-year comparisons. Stakeholders also provided thoughtful and helpful recommendations on reporting frameworks and more robust disclosure.

Several stockholders supported the consideration of setting science-based targets for greenhouse gas (GHG) emissions. Several stockholders stated that Middleby should emphasize its sustainable innovation and how its product innovations drive sustainable solutions for its customers.

Stockholders also expressed their continued support for the actions taken by the Board and management to respond to the pandemic, and to manage health and safety matters and related supply chain and business impacts in an effective manner to position the Company appropriately for the future. The compensation-related matters we discussed are summarized under “Compensation Discussion and Analysis—Stockholder Engagement Following the 2021 Annual Meeting.”

Our engagement efforts gave us valuable insight that has helped to inform the pathway of our ESG initiatives, our business practices and strategic decision-making. We will continue our stockholder engagement program annually with the goal of evolving our practices to best meet the needs of the Company and our stakeholders.

Director Onboarding and Continuing Education

The Company provides new directors with an orientation program to familiarize them with our business; strategic plans; significant financial, accounting, and risk-management issues; compliance programs; conflicts policies; Code of Conduct; Corporate Governance Guidelines; principal officers; and internal auditors and independent auditors. Board members who have not been associated with a publicly traded company previously also are required to attend public company director education selected by the NCGC.

Every director is expected to participate in continuing educational programs in order to maintain the necessary level of expertise to function as a director. The NCGC requires all standing Board members to maintain membership with the National Association of Corporate Directors (“NACD”) and annually arranges for Board members to attend NACD training programs and other corporate governance training initiatives. The Company pays all reasonable expenses relating to continuing director education.

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Succession Planning

The Board is responsible for succession planning for the Chief Executive Officer and other executive officers. The Board of Directors and the Chief Executive Officer meet in a private session two times each fiscal year to discuss succession planning, a review of the executive management team, executive development initiatives, and other executive matters. The Chairperson of the NCGC acts as the Chairperson and maintains minutes of these succession planning meetings.

Board Meetings

The Board held two in-person meetings and twenty virtual meetings during the fiscal year ended January 1, 2022. Directors collectively had over 99% attendance at Board and committee meetings. Executive sessions of the independent directors are held in conjunction with regularly scheduled meetings of the Board and otherwise as deemed necessary. The independent directors met in executive session eleven times.

Directors are expected to physically or virtually attend the annual meeting of stockholders. All of the directors virtually attended the 2021 Annual Meeting of Stockholders.

The independent directors are required, unless waived by the Board, to attend an annual strategic review meeting in the third or fourth quarter each year.

Members of senior management who are not directors may be invited to participate in Board meetings or other Board functions when appropriate. The Board encourages the Chief Executive Officer to bring members of management from time to time into Board meetings to provide insight into items being discussed by the Board, to make presentations to the Board on particular matters, and to ensure the Board has an opportunity to interact with managers who have significant potential.

Committees of the Board

Middleby’s Board currently has an Audit Committee, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), a Compensation Committee, and a Nominating and Corporate Governance Committee. The charters for these three committees are available on our website, www.middleby.com, on the “Investors—Corporate Governance” page. All three committees are composed entirely of independent directors.

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Service on Other Boards

We do not have a policy limiting the number of other public company boards of directors upon which a director may sit. However, the NCGC considers the number of other public company boards and comparable governing bodies on which a prospective nominee or a director is a member. In addition, we expect directors to be fully committed to devoting as much time as necessary to fulfilling their Board responsibilities, both in terms of preparation for, and attendance and participation at, meetings.

Directors must provide prior written notice to the Chairperson of the NCGC before accepting a seat on the board of a public or private entity.

In recognition of the enhanced time commitment associated with membership on a public company’s audit committee, the Board has adopted a policy that no member of the Audit Committee may serve simultaneously on the audit committees of more than two other public companies.

Age and Term Limits

We believe the Board operates most effectively with a mix of incumbent directors who have a deep understanding of Middleby and new directors who offer fresh perspectives. The Board does not currently have term limits or a mandatory retirement age. However, the NCGC reviews all directors annually before deciding on our nominees.

Stockholder Communications With the Board

Stockholders may contact the Board of Directors about bona fide issues or questions concerning the Company by sending an email to legal@middleby.com or by writing to the Corporate Secretary at the Company’s principal executive offices at 1400 Toastmaster Drive, Elgin, Illinois, 60120. Any matter intended for the Board of Directors, or for any individual member or members of the Board of Directors, should be directed to the email or physical address noted above, with a request to forward the communication to the intended recipient(s). In general, any stockholder communication about bona fide issues concerning the Company delivered to the Corporate Secretary will be forwarded in accordance with the stockholder’s instructions.

Related Party Transactions

There have been no material reportable related person transactions since the beginning of fiscal year 2021. The Audit Committee is responsible for reviewing, and approving related person transactions. In fulfilling this responsibility, the Audit Committee considers whether the transaction would be on fair and reasonable terms no less favorable to the Company than those that would be available in a comparable transaction in arm’s-length dealings with an unrelated third party.

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Governance Documents

In 2021, Middleby adopted a refreshed Code of Conduct that applies to all directors, officers, and employees. In 2020, we adopted Corporate Governance Guidelines, which, in conjunction with our Restated Certificate of Incorporation, as amended, Fourth Amended and Restated Bylaws and charters of the Board’s committees, constitute the framework of our corporate governance. The Code of Conduct and Corporate Governance Guidelines, as well as the charters for our committees, are available on our website, www.middleby.com, under “Investors—Corporate Governance.” We will post any amendment to, or waiver from, the Code of Conduct, on our website.

The following additional documents are available on our website, www.middleby.com, under “Investors—Corporate Governance”:

Director Compensation

The Company believes that having highly qualified non-employee directors is critical to our success. Non-employee directors represent the interests of our stockholders, and they contribute their experience and wisdom to guide our Company, our strategy, and our management. The Board believes that compensation for directors should reflect the work required in both their ongoing oversight and governance role and their continuous focus on driving long-term performance and stockholder value.

The Compensation Committee, consisting solely of independent directors, is responsible for reviewing director compensation and considering any changes to how directors are compensated. The full Board reviews the Compensation Committee’s recommendations and approves director compensation arrangements.

In September 2021, the Compensation Committee engaged Aon plc (“Aon”), an independent compensation consultant, to conduct a director compensation assessment using the same peer group that was used to assess executive compensation. The Board compensation assessment analyzed peer company director compensation levels and practices, evaluated the competitiveness of the Company’s director compensation program from multiple perspectives relative to the peer group, and described recent market trends in director compensation. Based on Aon’s analysis and the Company’s long-term performance, the Compensation Committee increased certain Board retainers and increased the aggregate value of the annual grant of restricted stock units effective for service in 2022.

Non-employee director compensation for fiscal year 2021 consisted of cash and equity components. The following table shows the compensation structure. Directors do not receive meeting fees.

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Director Compensation for Fiscal Year 2021

The following table shows the annual and long-term compensation for services to the Company performed by the non-employee directors during fiscal year 2021. Mr. FitzGerald’s compensation is discussed in the Compensation Discussion and Analysis section of this Proxy Statement. He did not receive any additional compensation for his service as a director.

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Sustainability

In January 2022, we released Middleby’s 2021 Sustainability Report, building upon our ESG disclosures in our inaugural 2019 Sustainability Report. Middleby is uniquely positioned to have a broader impact by developing sustainable equipment solutions for the many customers we touch around the world involved in restaurants and food manufacturing operations and cooking at home. Our financial investments and product innovation efforts are focused on solutions that reduce energy consumption, lessen water usage and food waste, minimize emissions and carbon footprint, and enhance safety. We have built these sustainability objectives into our development and innovation processes, so they are core to our culture. We highlight a few of our most recent product innovations in our 2021 Sustainability Report. We also include enhanced data with respect to energy, greenhouse gas (GHG) emissions, water usage and waste metrics. We look forward to expanding further the metrics we disclose in our next sustainability report as we pivot from enhanced data collection to using that data and its insights to inform business decisions. We intend to publish an updated Sustainability Report in 2022 to demonstrate our commitment to continued environmental, social, and governance initiatives.

Here are some highlights of our recent environmental, social, and governance initiatives. For complete information, please see our most recent Sustainability Report, which is available on our website, www.middleby.com, under “Investors—Corporate Governance.”

Environmental Priorities and Management Process

Middleby’s environmental priorities are focused on reducing environmental impact to air, water, and land across our footprint and specifically with respect to our customers; improving data analysis and benchmarking to identify opportunities for improvement; identifying and implementing cost-effective and innovative solutions to reduce energy usage; and encouraging more environmentally friendly business practices within our business units. Our management process uses consistent data collection and benchmarking to identify risks, plan management strategies, implement solutions, measure success rates, and adjust systems for continuous improvement across our environmental management activities.

Data collection and reporting were conducted in alignment with the framework used by the Sustainability Accounting Standards Board (SASB) in developing their standards. For purposes of reporting, we selected aspects of the environment that we have control of and can make a meaningful impact on. The three key aspects measured at our operations are Energy Consumption, Greenhouse Gas (GHG) Emissions, Water Usage and Waste Management. These aspects are considered to meet the SASB requirements: they are of interest to investors, are relevant across the industry, have a potential to affect corporate value, reflect stakeholder consensus, and are actionable by Middleby.

Human Capital

We believe Middleby’s success is a direct result of the people we employ around the world. When our employees have the best environment, they can be their best. We strive to create a culture that encourages and celebrates collaboration, creativity, and confidence. Ultimately, we want a workplace that enables employees to develop their individual paths toward their career goals and encourages a long-term working relationship with us.

We encourage our employees to present new ideas and empower them to move their ideas forward. We believe that giving our employees autonomy fosters an environment of inclusion and empowerment, and encourages them to recognize that they play a part in Middleby’s success.

Employee Safety

Middleby actively promotes a safe workplace for all of our employees around the world because a culture of safety reduces the risk of injury to employees, decreases expenses, and increases production. Each of our manufacturing locations maintains an active safety committee that frequently reviews and assesses the conditions of the local work environment. We invest in safety training, share best practices, and review claim activity to continually minimize employee workplace injuries. We understand that our ongoing efforts to promote a safe environment today will drive long-term sustained improvement to workplace safety across the Company in the future.

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Due to the hard work of all Middleby employees, our Recordable Case Rate (work-related injuries per 100 full-time employees) steadily declined from 6.3 in 2017 to 4.0 in 2019. Similarly, our Lost Time Incident Rate declined from 1.37 in 2017 to 0.74 in 2019.

HEALTH AND SAFETY METRICS

Diversity

Middleby embraces the diversity of our team members and is committed to providing a safe and productive work environment and multiple, ongoing opportunities for career advancement. We recognize that our diverse workforce enables Middleby to attract the best talent, which makes us better aligned with our customers and able to more creatively and efficiently develop new products. As a global corporation, we embrace and celebrate our differences and endeavor to cultivate an environment where diversity and inclusion are a core value. With this principle firmly in place, Middleby encourages employees to bring their best to work every day.

In fiscal year 2021, we advanced our diversity and inclusion initiatives in several meaningful ways. Our Diversity and Inclusion Committee raised awareness and provided tools to our senior management to improve our diversity and inclusion benchmarks. Senior management actively encourages increased representation of underrepresented people of color and different genders throughout our workforce. We also believe it is important to consider diversity of race, ethnicity, age, gender, cultural background, education, and professional experience in evaluating Board candidates. Accordingly, our Board approved new Corporate Governance Guidelines in 2021 to provide that when evaluating candidates for nomination as new directors, the Nominating and Corporate Governance Committee will consider (and will ask any search firm that it engages to provide) a set of candidates that includes both underrepresented people of color and different genders. We are committed to continuing to advance upon our diversity and inclusion initiatives.

Community

Middleby recognizes that giving back to the communities we serve will greatly contribute to our long-term prosperity and help improve our communities for the future. We focus our contributions and volunteering on areas we can impact in a meaningful way. Given our decentralized structure, each operating location has the authority and flexibility to direct its own unique philanthropic activities to local causes.

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Executive Officers

The following is a summary of the professional experience of the Company’s executive officers. The ages set forth below are as of March 31, 2022.

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Proposal No. 2

Advisory Vote on Executive Compensation

Every year we give our stockholders the opportunity to vote on a non-binding, advisory basis, to approve the compensation of our Named Executive Officers. This proposal is commonly referred to as “Say on Pay.” We are asking stockholders to vote FOR the adoption of the following resolution:

“Resolved, the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K of the Securities Exchange Act of 1934, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

This vote is advisory and therefore not binding on the Company, the Compensation Committee or the Board. However, the Board and the Compensation Committee value the opinion of Middleby stockholders. The Board and the Compensation Committee will consider the views of our stockholders expressed through the advisory vote and, based on the results of the vote, the Compensation Committee will evaluate whether any actions are necessary to address stockholder concerns.

As outlined in the Compensation Discussion and Analysis (“CD&A”) section that follows, our compensation program is designed to maximize strategic Company goals based on the following objectives:

The Compensation Committee and the Board believe that the policies and procedures articulated in the CD&A are effective in achieving these goals and that the compensation of the Named Executive Officers reported in this Proxy Statement has contributed to the Company’s long-term success. The Company encourages stockholders to review the executive compensation disclosure in the CD&A and executive compensation tables for complete details of how our executive compensation policies and procedures operate and are designed to achieve the Company’s compensation objectives.

Vote Required for Approval; Board Recommendation

The vote of a majority of votes cast at the Meeting is necessary for advisory approval of this proposal. Although this vote is advisory in nature and does not require any action by the Company or the Compensation Committee, the Company strongly encourages all stockholders to vote on this matter.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION AS DISCLOSED IN THIS PROXY STATEMENT.

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Executive Compensation

Compensation Discussion and Analysis

The following Compensation Discussion and Analysis (“CD&A”) describes the material elements of compensation for the Company’s fiscal year 2021 “Named Executive Officers,” or NEOs, identified below.

Executive Summary

We seek to closely align the interests of our Named Executive Officers with the interests of our stockholders. As described in this CD&A, our compensation program features a pay for performance design that rewards our Named Executive Officers for achieving short-term and long-term financial goals.

2021 Highlights and Performance

In 2021, Middleby and its management team delivered record sales and earnings across each of our three business segments despite significant operational challenges from supply chain disruption due to the continuing effects of COVID-19. As a result, Middleby’s Earnings Per Share (“EPS”) outperformed our peer group median on a one-year, three-year and five-year basis. Middleby’s Total Shareholder Return (“TSR”) outperformed our peer group median on a one-year (FYE 2021) basis. In order to achieve these strong financial results, Middleby’s management continued to apply the same nimble management philosophy that proved effective during a challenging COVID-19 environment in 2020. In 2021 and heading into 2022, the management philosophy has not changed, but the issues have evolved to include supply chain constraints as well as current world events that require us to rapidly adjust to changing circumstances.

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LONG TERM HISTORY OF CREATING STOCKHOLDER VALUE

Highlights of 2021 Compensation Program

Middleby’s Compensation Committee made significant changes to the 2021 compensation program for our Named Executive Officers in response to meaningful stockholder engagement. As discussed below, such changes included (1) awarding annual cash bonuses to our NEOs that incorporate differentiated performance metrics from those used for the long-term equity incentive awards, and (2) issuing new long-term equity incentive awards that incorporate new performance metrics and add a holding period.

The following chart summarizes the elements of direct compensation paid to our Named Executive Officers in fiscal year 2021.

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Stockholder Engagement Following the 2021 Annual Meeting

We actively seek and consider stockholder feedback in designing and managing our executive compensation program, our corporate governance practices, and all other matters of interest to our stockholders. At the 2021 Annual Meeting, support for the Say on Pay proposal was 91%. This level of support indicated that stockholders were receptive to the meaningful changes we made to our executive compensation programs in 2020. In 2021, stockholder feedback continued to be valuable to the Company. This year, we proactively engaged with our stockholders regarding executive compensation and other corporate governance matters throughout the year, as discussed further in “Governance—Stockholder Engagement.”

The Company engaged with stockholders during December 2021 and January 2022 to discuss a variety of subjects, with an increased focus on ESG matters and executive compensation matters. We contacted our top 25 stockholders, representing approximately 73% of our total outstanding shares, and senior leaders, held meetings with stockholders representing approximately 46% of our total outstanding shares. Compensation-related feedback from these meetings was communicated to our Compensation Committee and to our full Board, and discussed with management as appropriate.

Our compensation program has been developed in response to, and as a product of, past discussions with our stockholders. In 2020, our stockholders had five significant suggestions regarding our long-term equity incentive program, and the Compensation Committee considered and ultimately acted upon all five in 2020 and 2021.

What we heard		How we responded
The performance metrics and performance periods for the long-term equity incentive program and the short-term cash incentive program had significant overlap, which stockholders did not think was appropriate.		Long-term grants of performance-based equity will now cliff vest, to the extent earned, only at the end of a three-year performance period. The long- and short-term incentive plans now have differentiated metrics and performance periods.
Our performance-based long-term equity awards had opportunities for annual vesting during the performance period, which stockholders believed was inconsistent with the objective of a long-term incentive award.		Performance-based equity grants will now cliff vest, to the extent earned, only at the end of a three-year (two-year for fiscal year 2020) performance period, with no opportunity for interim or “make-up” vesting.
Stockholders believe our long-term equity incentive program should incorporate a capital efficiency performance metric.		Performance-based equity awards are now subject to a capital efficiency metric, Enterprise Value Growth (Less Net Debt) per share, in addition to Adjusted EPS and the TSR modifier.
Stockholders believe our long-term equity incentive program should incorporate relative TSR as a performance metric.		Performance-based equity awards are now potentially impacted by as much as 30% positive or negative, depending on the Company’s TSR for the performance period as compared to TSR for our peer group.
Stockholders were supportive of our ongoing practice of imposing restrictions on the transfer of executives’ vested equity awards.		Time-based equity awards will vest in annual increments, but vested shares must be held until the associated performance shares vest (or fail to vest based on performance).

During our stockholder engagement in December 2021 and January 2022, ESG matters were the focus of stockholder interest and discussion. Several stockholders encouraged the Company to consider incorporating ESG metrics as a component of the executive compensation program in future years, and the Compensation Committee is considering that suggestion. The

Compensation Committee is considering the inclusion of ESG metrics to the total compensation mix in future years.

Stockholders did not raise any other material suggestions or concerns.

Compensation Objectives and Philosophy

The Company’s compensation and benefits programs are influenced by our business culture and are designed to maximize strategic Company goals. The objectives of our compensation program are described below.

Attract and Retain Executive Talent—The Company offers compensation packages that aim to attract and retain qualified executive talent and deliver increasing rewards for extraordinary performance.

Link Executive Compensation with Operating Performance—The Compensation Committee structures a portion of the compensation for our Named Executive Officers and senior management to vary based on the Company’s financial and operating performance in order to drive a sustained increase in stockholder value. In a typical year, a significant portion of an executive’s annual compensation is at risk and linked to the achievement of corporate goals that are tailored to the Company’s strategic plan.

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Link Executive Equity Incentive Compensation with Stockholder Interests—Long-term equity incentive compensation granted to our Named Executive Officers in fiscal year 2021 was divided between performance-based (67%) and time-based restricted stock units (33%) to (i) align our Named Executive Officers’ interests with stockholder interests through the shared experience of stock ownership; (ii) tie performance goals and payouts directly to metrics that are critical drivers of financial and operational success, stockholder value creation, and strategic objectives; and (iii) include a time-based component that encourages executive retention and discourages excess risk-taking by executives.

Facilitate a High-Growth Company Strategy—The Company provides incentive compensation that rewards executives for strong growth in earnings, which is expected to generate strong stockholder return. Performance goals are generally consistent with the Company’s performance expectations, but are tiered to ensure that awards will increase when Middleby out-performs the market. Likewise, our incentive compensation programs are designed to result in no payouts when Middleby underperforms threshold goals.

Parties Involved in Compensation Decisions

Role of the Compensation Committee

The Compensation Committee, consisting entirely of independent directors, is responsible for establishing, implementing, and monitoring the Company’s compensation program and providing input to the Board with respect to management development and succession planning.

The Compensation Committee evaluates the CEO’s performance and makes recommendations to the Board with respect to the CEO’s compensation based on this evaluation. The Compensation Committee also evaluates the other Named Executive Officers’ performance and, either as a committee or together with the other independent directors (as directed by the Board), determines and approves their compensation.

Role of the Compensation Committee’s Independent Compensation Consultant

The Compensation Committee has the power to retain independent compensation consultants, legal counsel, or other advisors as it may deem appropriate to assist it in the performance of its duties and responsibilities, without consulting or obtaining the approval of management. The Compensation Committee recognizes the importance of objective, independent expertise and advice in carrying out its responsibilities.

Since November 2017, the Compensation Committee has retained Aon’s Human Capital Solutions practice, a part of Aon, as its independent consultant. Aon reports directly to, and is directly accountable to, the Compensation Committee, and the Compensation Committee has the sole authority to retain, terminate, and obtain Aon’s advice at the Company’s expense. The Compensation Committee selected Aon as consultants because of Aon’s public company compensation experience, understanding of compensation governance and access to market competitive data.

With Aon’s assistance, the Compensation Committee monitors market compensation practices and developments, as well as the appropriateness of the various components of Middleby’s executive pay program. The Compensation Committee believes that obtaining relevant market and benchmark data is very important because it provides helpful context and a solid reference point for making decisions. When making determinations about compensation for our executives, the Compensation Committee also considers corporate and individual performance, any shifts in the current or anticipated future duties and function of the executive officers, the competitive market for executive talent and the overall labor market, and the input of other directors who are not members of the Compensation Committee.

In the past, the Compensation Committee has worked with Aon to: assess our executive compensation philosophy, objectives and components; develop a peer group of companies for compensation comparison purposes; review considerations and market practices related to the design of cash and equity incentive plans and trends in the capital goods industry; review our equity compensation strategy; and review director compensation market practices. For fiscal year 2021 specifically, Aon assisted the Compensation Committee with evaluating the appropriateness of the peer group, providing CEO and NEO benchmark compensation data, designing our incentive plans, and following good compensation practices. While the Compensation Committee takes into consideration the review and recommendations of Aon when making decisions about the Company’s executive compensation program, ultimately the Compensation Committee makes its own independent decisions about compensation matters.

The Compensation Committee has assessed the independence of Aon pursuant to SEC and NASDAQ rules, considering each of the relevant factors with respect to a compensation consultant’s independence. The Compensation Committee also considered the nature and amount of work performed for the Compensation Committee and the fees paid for those services in relation to Aon’s total revenues. Aon provides no services to the Company other than its services to the Compensation Committee, has no other ties to management that could jeopardize its fully independent status, and has strong internal governance policies that help ensure it maintains its independence. Aon has conducted a review of its performance, and has prepared an independence letter for the Compensation Committee that provides assurances and confirmation of the consultant’s independent status under the standards. None of the Compensation Committee members and none of our executive officers or directors have any personal relationship or other conflicts of interest with Aon.

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Role of the CEO

The CEO annually reviews the performance of each executive officer other than himself. For each such executive, this review includes an analysis of actual operating performance versus pre-determined operating performance targets, measures taken to improve efficiency of operations within the executive’s area of responsibility, completion of special projects, and an assessment of the executive’s commitment to the Company’s core operating principles. Based on his review, the CEO develops a recommendation to the Compensation Committee for each executive’s annual base salary, annual incentive plan opportunity and the basis for long-term equity-based grants.

The Compensation Committee uses the same methodology to establish the compensation package for the CEO.

Market Factors in Setting Compensation

The Compensation Committee uses comparative compensation information from a relevant group of peer companies as one of several points of reference when setting the compensation of our CEO. The Committee typically reviews CEO compensation benchmarking data every two to three years.

In February 2019, the Compensation Committee developed the peer group, with Aon’s assistance. The peer group was chosen based primarily on revenue, market capitalization, industry, brand leadership, and international scope. The Compensation Committee considers data from the companies in the peer group to compare total compensation and individual compensation elements for our Named Executive Officers with compensation for officers in comparable positions. The Compensation Committee retains discretion in determining how it will use peer group data.

The Compensation Committee periodically reassesses the companies within the peer group and makes changes as appropriate, considering mergers and acquisitions, changes in Middleby’s business, and other factors. After review, the Compensation Committee confirmed the peer group set forth below was appropriate as a reference for 2021 pay determinations. The 2021 peer group consisted of the following companies (the “Peer Group”):

At the time the Peer Group was developed in 2019, Middleby was positioned near the median in terms of market capitalization and slightly above the median in terms of revenue.

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For fiscal year 2021 compensation purposes, Aon presented the Compensation Committee with data regarding compensation for the NEOs. Aon collected this information from the Peer Group.

Aon compiled compensation data at the 25^th percentile, median, and 75^th percentile levels from the Peer Group, for base salaries, target annual cash incentive awards, target long-term equity awards, and total target direct compensation for individual executive officer positions. Using this data, the Compensation Committee approved adjustments to 2021 compensation packages for our NEOs to maintain an appropriate level of total compensation in comparison to the market that is consistent with emphasizing pay for performance.

Fiscal Year 2021 Compensation Decisions

The Company’s compensation program is generally divided into three elements: base salary, annual cash incentive, and long-term equity-based incentive. We use the mix of these elements to emphasize pay for performance and to recognize the different value brought by individual jobs within the Company. For example, our CEO has the greatest responsibility for the operation and performance of the business and, accordingly, the most potential upside in compensation, but he also has the most compensation at risk, depending on Middleby’s financial performance.

Base Salary

Base salary is fixed and provides some stable income since the other elements of our NEOs’ compensation packages are at significant risk. Annual base salary levels and any increases are budgeted based on the Company’s current business environment and the individual’s level of responsibility and merit within the Company.

The base salary of our CEO, Mr. FitzGerald, has remained unchanged since his promotion to CEO in February 2019. For fiscal year 2021, the Compensation Committee approved increases to base salaries of certain other NEOs. Specifically, the Compensation Committee approved increases in base salary for Messrs. Mittelman and Lindsay in alignment with market compensation data provided by Aon. Among other factors, the Compensation Committee also recognized additional duties and responsibilities for each position, the importance of retaining key executive talent and the status of the labor market generally.

Messrs. Pool and Spittle were promoted to new roles at Middleby as Chief Technology and Operations Officer and Chief Commercial Officer, respectively. The Compensation Committee approved increases in base salary commensurate with their added duties and responsibilities as newly promoted NEOs, in alignment with market compensation data provided by Aon.

Annual Performance-Based Incentive Program

The Company provides annual performance-based cash incentives pursuant to the Value Creation Incentive Plan (“VCIP”). Under the VCIP, the Compensation Committee can establish performance goals utilizing multiple metrics, with the flexibility to adjust metrics and goals to address changing business needs. The VCIP is intended to provide an incentive for strong performance and to motivate eligible employees toward the highest level of achievement and business results by tying their goals and interests to those of the Company and our stockholders.

The Company did not approve an annual cash-based incentive compensation program for fiscal year 2020 in order to focus the Company’s financial and managerial resources on the Company’s response to the COVID-19 pandemic.

In fiscal year 2021, the Compensation Committee approved and implemented an annual cash-based incentive compensation program under the VCIP for all of the NEOs. The annual incentive compensation program for 2021 includes bonus opportunities based upon performance against goals for EBITDA$ and EBITDA% for fiscal year 2021. These metrics, which emphasize different aspects of our performance than the metrics used for the long-term incentive plan, were implemented in part due to stockholder outreach, are consistent with leading governance practices, and serve as an effective reference for senior managers when making decisions for their respective operations.

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The following table shows 2021 actual EBITDA$ and EBITDA% as compared to the target EBITDA$ and EBITDA% goals and the corresponding annual performance-based cash compensation for each NEO under the VCIP. Each NEO’s target bonus opportunity under the VCIP for fiscal year 2021 was set at 100% of base salary, as set forth below:

2021 ANNUAL PERFORMANCE-BASED CASH INCENTIVE PLAN PERFORMANCE

Equity-Based Incentive Compensation

Based on feedback from stockholders, in fiscal year 2020, the Compensation Committee made significant structural modifications to the Company’s long-term equity incentive (“LTI”) program to add an enhanced capital efficiency performance metric, incorporate a TSR modifier, extend the performance period to a full three years with no interim vesting opportunities, and impose restrictions on the transfer of vested shares. The resulting LTI structure is consistent with leading governance practices, serves as an effective reference for senior managers when making decisions for their respective operations, and further aligns management with stockholder interests. The following table summarizes the legacy LTI program and the changes adopted starting in 2020. The LTI award granted to the NEOs in fiscal year 2021 contained all of the features of the new program described above and summarized below.

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2021 Long-Term Equity Incentive Awards

In September 2021, the Compensation Committee approved LTI equity awards to our Named Executive Officers consisting of time-based RSUs (33.3% of target LTI value) and performance-based PSUs (66.7% of target LTI value). The time-based RSUs will vest, subject to an NEO’s continued employment, in equal increments, in March 2022, March 2023 and March 2024. The performance period for the performance-based PSUs covers fiscal years 2021, 2022 and 2023, and vesting, if any, will be approved by the Compensation Committee in the first quarter of fiscal year 2024. All future equity grants are expected also to have a three-year performance and vesting period.

The Compensation Committee sets the grant date target value for LTI awards for our Named Executive Officers other than the CEO. Using market-based long-term equity grant values and incentive plan design information provided by the Compensation Committee’s independent compensation consultants as a guide, Mr. FitzGerald recommends to the Compensation Committee awards for our Named Executive Officers (other than himself) and members of senior management.

The Board established Mr. FitzGerald’s target LTI award based upon the recommendations of the Compensation Committee. In forming its recommendation, the Compensation Committee reviewed competitive compensation data for the Peer Group provided by Aon and considered other relevant factors.

Target LTI awards for our Named Executive Officers are shown below.

Performance Targets for 2021 LTI Awards

The performance-based PSUs have two primary, equally weighted, metrics: Adjusted EPS and Enterprise Value Growth (Less Net Debt) per share.

Performance targets are set based on management’s multi-year forecast of Adjusted EPS and Enterprise Value Growth (Less Net Debt) per share performance. The maximum possible payout is 200% of target, based on our performance against goals for these measures. We do not disclose the targets for Adjusted EPS and Enterprise Value Growth (Less Net Debt) per share due to the competitive harm that could result from this disclosure. However, consistent with stockholder feedback, the performance targets for the performance period that spans fiscal years 2021, 2022 and 2023 reflect rigorous goals that anticipate much stronger growth than we experienced in fiscal year 2020 because of the negative impact of the pandemic.

Once awards are calculated based on Middleby’s performance for the three-year performance period (“Pre-TSR Vested Shares”), the Compensation Committee will calculate whether the TSR modifier applies. If Middleby’s TSR for the three-year performance period is in the top 25% of TSR for the Peer Group, the final grants to our Named Executive Officers will equal the number of Pre-TSR Vested Shares multiplied by 130%. Conversely, if Middleby’s TSR for the three-year performance period is in the bottom 25% of TSR for the Peer Group, the final grants to our Named Executive Officers will equal the number of Pre-TSR Vested Shares multiplied by 70% (meaning that there is a negative adjustment of up to 30%). Final awards will equal the number Pre-TSR Vested Shares if Middleby’s TSR falls in the middle of the Peer Group.

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Time-Based RSUs; Holding Period

The time-based LTI awards vest ratably over three years, so long as the recipient is still employed by the Company. However, the shares underlying the vested RSUs may not be sold or otherwise transferred until the associated performance-based PSUs vest (or fail to vest based on performance). The TSR modifier will not affect the number of time-based RSUs that vest.

Vesting of 2019 Equity Incentive Awards

In 2019, the Company granted performance-based and time-based restricted stock awards to the NEOs. The performance-based component of the award provided that a portion of the award, up to the maximum number of shares subject to the award, would be earned at the end of a three-year performance period based on the achievement of specified cumulative increases in EBITDA and EPS (as certified by the Compensation Committee in early 2022). There also was the opportunity to earn a remaining portion of the award in up to 1/3 increments at the end of each of the 2019, 2020 and 2021 fiscal years based on annual EBITDA and EPS targets. The three-year performance period for the 2019 award began on December 30, 2019 and ended on January 1, 2022. The time-based component vested in 1/3 increments on each of March 10, 2020, March 10, 2021 and March 10, 2022, subject to continued employment on each such date.

One-Year Performance Period for 2021

One-third of the performance-based restricted shares that were granted to our NEOs in 2019 were eligible for vesting based upon the performance of the Company in fiscal year 2021. Target performance was based on achievement of 10% growth in EBITDA and 10% growth in EPS in fiscal year 2021.

The following chart specifies the percentage of granted performance-based shares (relative to target) that could have been earned at various levels of EBITDA and EPS growth achieved over the one-year performance period ended January 1, 2022, for Messrs. FitzGerald, Mittelman, Brewer and Lindsay:

As a result of fiscal year 2021 performance, performance-based restricted shares for the 2021 fiscal year vested at max based on achievement of 76% growth in EBITDA and 48% growth in EPS (both metrics achieved far in excess of max), and resulted in the issuance of the following shares under the LTIP: 25,000 shares to Mr. FitzGerald, and 5,554 shares to each of Messrs. Mittelman, Lindsay, Pool and Spittle upon certification of financial results by the Compensation Committee in 2022.

Three-Year Performance Period for 2019-2021

The aggregate maximum number of performance-vesting restricted shares that were eligible to vest over the three-year performance period ended January 1, 2022 equaled 75,000 for Mr. FitzGerald, and 16,667 for Messrs. Mittelman, Lindsay, Pool and Spittle. The following chart illustrates the percentage of awarded shares that were eligible to vest at various levels of cumulative EBITDA and cumulative EPS achievement over the three-year performance period ending January 1, 2022:

After accounting for the vesting of performance-based restricted stock with respect to the 2019 and 2021 fiscal years based upon annual EBITDA and EPS targets, no additional performance-based restricted shares vested in 2021 pursuant to the achievement of specified cumulative increases in EBITDA and EPS.

The number of shares of time-based restricted stock that were awarded to the NEOs in August 2019 equaled 15,000 shares to Mr. FitzGerald, and 3,333 shares to each of Messrs. Mittelman, Lindsay, Pool and Spittle. 1/3 of these awards vested on March 10, 2022.

Discretionary Cash Bonuses

The Company did not approve an annual cash-based performance program with performance metrics for fiscal year 2020 in order to focus the Company’s financial and managerial resources on responding to the COVID-19 pandemic. In 2020, Messrs. Mittelman and Lindsay demonstrated extraordinary leadership to allocate and preserve the Company’s resources and motivate its employees to navigate the initial stages of the COVID-19 pandemic. Specifically, Messrs. Mittelman and Lindsay had primary responsibility for facilitating the refinance of our existing credit facility and issuance of a convertible note to investors, significantly improving Middleby’s capital structure and ensuring

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access to adequate liquidity during an uncertain phase of the pandemic. Further, Mr. Lindsay led numerous COVID-19 initiatives to protect employee health and safety while maintaining the Company’s ability to serve its customers. In September 2021, the Compensation Committee determined it was in the best interest of stockholders to recognize this extraordinary leadership by approving discretionary cash bonuses of $275,000 and $225,000, respectively. These awards represent approximately 57% of each officer’s respective annual base salary, which the Compensation Committee determined was reasonable under the circumstances. In addition to recognizing their achievements, the Compensation Committee considered the highly competitive market for proven executive talent and the labor market generally, and the benefit to stockholders of recognizing extraordinary behavior at a time when pre-approved quantifiable performance metrics were not available.

Stock Ownership Guidelines

Company guidelines require our Named Executive Officers to own a prescribed amount of Middleby common stock, expressed as a multiple of their respective base salaries. The base salary multiples are set by the Compensation Committee at levels consistent with the individual’s level of responsibility within the Company. Unvested time-based equity counts toward an executive’s required holdings, but unvested performance-based equity does not. Any covered executives who have not yet met their stock ownership requirements are required to retain 50% of all net shares (post tax) that vest until the minimum share ownership requirement is achieved.

As of December 31, 2021, all of our Named Executive Officers exceeded the minimum stock ownership requirements, as shown below.

Clawback Policy

The Company maintains a Clawback Policy, which requires reimbursement or forfeiture of all or a portion of any incentive compensation (which includes annual bonuses and other short-and long-term cash incentives, stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units) received by a current or former executive officer during the preceding three completed fiscal years in the event that:

The Company is entitled to recover the amount of excess incentive compensation paid to any executive officer over the incentive compensation that would have been paid to the executive officer had it been based on the restated results, as determined by the Board.

Additional Compensation Information

Derivatives Trading, Hedging and Pledging

Pursuant to our Insider Trading Compliance Program, all employees, officers, and directors are prohibited from engaging in any speculative transactions in Middleby stock, including engaging in short sales; transactions involving put options, call options, or other derivative securities; or any other forms of hedging transaction, such as collars or forward sale contracts, designed to decrease the risks associated with holding Middleby stock, except in certain circumstances that must be pre-cleared with the Company’s insider trading compliance officers.

Post-Employment Benefits

The Company provides certain limited post-employment benefits, as described under “Potential Payments Upon Termination or Change in Control.”

Limited Perquisites

Our Named Executive Officers and senior executives receive only limited perquisites. Middleby does not offer our NEOs automobile allowances, club memberships, or other professional fee reimbursements.

Employment Agreements

To attract and retain highly skilled executives and to provide for certainty regarding rights and obligations, the Company has historically provided employment agreements to our Chief Executive Officer and certain other executive officers. None of the NEOs other than Mr. FitzGerald have an employment agreement with the Company. For more information, see “Employment Agreement with Timothy J. FitzGerald.”

Risk Assessment Regarding Company Compensation Program

The Compensation Committee is committed to ensuring that none of Middleby’s compensation policies and practices—particularly the performance-based compensation—pose excessive risks. The Compensation Committee, together with the Chairperson of the Audit Committee and executive management, has considered the risks arising from the Company’s compensation policies and practices and concluded that those policies and practices are not reasonably likely to have a material adverse effect on the Company. In particular, the Compensation Committee determined that Middleby’s executive compensation program includes several “risk mitigating” elements, such as stock ownership requirements for our NEOs and other senior executives, substantial time-based components in the total compensation mix, the use of multiple performance metrics in our incentive plans, and limitations on the payouts that can be earned through the incentive plans.

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Report of the Compensation Committee of the Board of Directors

The Compensation Committee, consisting entirely of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the Company’s management. Based on this review and discussion, the Compensation Committee recommends to the Company’s Board that the CD&A be included in these proxy materials.

The Compensation Committee:
John R. Miller III, Chairman,
Gordon O’Brien and Sarah Palisi Chapin

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Executive Compensation Tables

Summary Compensation Table for Fiscal Year 2021

The following table sets forth information concerning the annual and long-term compensation for services to the Company in all capacities received by the following individuals, who are collectively referred to as the Company’s “Named Executive Officers” for fiscal year 2021: the Chief Executive Officer, the Chief Financial Officer, and the three other most highly compensated executive officers. The table covers compensation for fiscal years 2019, 2020, and 2021 to the extent the individuals listed were Named Executive Officers in those years.

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Employment Agreements with Named Executive Officers

Timothy J. FitzGerald

On March 10, 2022, the Company and MM entered into an employment agreement with Mr. FitzGerald. This employment agreement supersedes his previous employment agreement. The agreement memorializes Mr. FitzGerald’s current base salary of $975,000 (which remains unchanged since his promotion to CEO in 2019), and his eligibility to participate in the Company’s management incentive programs.

The terms of the employment agreement relating to the termination of Mr. FitzGerald’s employment are discussed below under the heading “Potential Payments Upon Termination or Change in Control.”

Grants of Plan-Based Awards in Fiscal Year 2021

The following table sets forth information concerning cash incentive opportunities and grants of RSUs and PSUs made to our NEOs during fiscal year 2021. The grant dates set forth below indicate the date on which the Board granted the award.

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Outstanding Equity Awards at 2021 Fiscal Year End

The following table sets forth certain information concerning outstanding stock awards held by each of our Named Executive Officers under the LTIP at the end of fiscal year 2021.

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Stock Vested for Fiscal Year 2021

The following table sets forth the aggregate amounts received or realized in connection with the vesting of stock awards under the LTIP during the 2021 fiscal year by each of the Named Executive Officers. There were no stock option exercises by the Named Executive Officers during the 2021 fiscal year.

Potential Payments Upon Termination or Change in Control

Under Employment Agreements

Timothy J. FitzGerald

During the term of Mr. FitzGerald’s employment agreement, as described above under the heading “Employment Agreements with Named Executive Officers,” Mr. FitzGerald’s employment can be terminated by the Company or MM or by Mr. FitzGerald at any time, or by the death of Mr. FitzGerald.

If Mr. FitzGerald’s employment is terminated by the Company for reasons other than “cause” (as defined in the employment agreement), or by Mr. FitzGerald due to a material diminution of his duties, or due to his death or disability, Mr. FitzGerald would be entitled to a pro-rata share of any incentive compensation under the VCIP that would otherwise have been payable to him based on actual performance had he remained employed by the Company until the last day of the fiscal year. In addition, if the Company terminates Mr. FitzGerald’s employment without cause, or if Mr. FitzGerald terminates his employment due to a material diminution of his duties, Mr. FitzGerald would be entitled to (i) a lump sum payment equal to three times the sum of (x) his annual base salary for the full calendar year immediately prior to the date of termination and (y) an amount equal to the greater of (I) the amount of his annual incentive bonus with respect to the full calendar year immediately prior to the year of termination and (II) the average of his annual incentive bonuses for each of the three calendar years immediately prior to the year of termination, and (ii) continued coverage under any medical, dental, vision, disability and life insurance program or policy maintained by the Company for twenty-four months at the active employee cost.

If any amount payable to Mr. FitzGerald is deemed under the Internal Revenue Code to be made in connection with a change in control of the Company and would result in imposition of an excise tax, the employment agreement provides that Mr. FitzGerald’s payments will be reduced to an amount that would not result in the imposition of an excise tax, to the extent such reduction would result in a greater after-tax benefit to Mr. FitzGerald.

Under Equity Incentive Plans

In the event of a termination of employment by the Company other than for cause (with respect to Messrs. FitzGerald, Mittelman, Lindsay, Pool and Spittle), or resignation due to a diminution of duties (with respect to Mr. FitzGerald), a portion of the time-based component of any outstanding share awards would immediately vest on a pro-rata basis. Further, the performance-based component of any outstanding restricted stock or PSU award will vest in that number of shares or PSUs that would have vested based on actual performance, pro-rated for the number of days of the relevant performance period through the date of termination. Any remaining shares that do not vest are forfeited.

In the event of a “change in control” (as defined in the performance share award agreement), all of the time-based shares or RSUs, to the extent not already vested, would immediately vest as of the date of such change of control. The performance share or PSU award would immediately vest in the greater of (i) the target number of shares or PSUs or (ii) the number of shares that would have vested based on actual performance measured immediately prior to the date of the change of control as determined by the Compensation Committee. Any remaining shares that do not vest are forfeited.

2022 PROXY STATEMENT

44

Quantification

The tables below illustrate the potential payments to each Named Executive Officer under each of the circumstances discussed above. The tables assume that the terminations or change in control, as applicable, took place on January 1, 2022, the last day of our 2021 fiscal year, and are based on the applicable executive’s current employment terms and the closing value of our common stock on December 31, 2021, the last trading day of our 2021 fiscal year, which was $196.76 per share.