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Northwest Pipe Co. – ‘DEF 14A’ for 12/31/23

On:  Thursday, 4/25/24, at 4:02pm ET   ·   For:  12/31/23   ·   Accession #:  1437749-24-13214   ·   File #:  0-27140

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

 4/25/24  Northwest Pipe Co.                DEF 14A    12/31/23   11:6.6M                                   RDG Filings/FA

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201 NE Park Plaza Drive, Suite 100

Vancouver, WA 98684

April 15, 2024

Dear Fellow Shareholder:

You are cordially invited to attend the 2024 Annual Meeting of Shareholders (the “Annual Meeting”) on Thursday, June 13, 2024, at 7:00 a.m. Pacific Time. As part of Northwest Pipe Company’s effort to encourage broader participation in the Annual Meeting, the Board of Directors has determined that the Annual Meeting will be conducted virtually via webcast instead of in-person. You will be able to attend the meeting, vote your shares, and submit questions by logging in at www.virtualshareholdermeeting.com/NWPX2024.

YOUR VOTE IS IMPORTANT. As a shareholder of Northwest Pipe Company, you can play an important role by considering and taking action on the matters set forth in the attached Proxy Statement. The time and attention you invest in making thoughtful decisions is appreciated.

It has been a rewarding year, but not without its challenges. Thank you for your support and continued interest in Northwest Pipe Company.

| Notice and Proxy Statement | 2024

| Notice and Proxy Statement | 2024

| Notice and Proxy Statement | 2024

TABLE OF CONTENTS

| Notice and Proxy Statement | 2024

PROXY SUMMARY

CREATING STAKEHOLDER VALUE

‘Creating Stakeholder Value' Section starts on page 6.

	58		Years of Quality Manufacturing Data as of 12/31/2023		13		Manufacturing Facilities		1,325		Company Employees		4		Branded Product Lines

Founded in 1966, Northwest Pipe Company is a leading manufacturer of water-related infrastructure products. In addition to being the largest manufacturer of engineered steel water pipeline systems in North America, the Company manufactures stormwater and wastewater technology products; high-quality precast and reinforced concrete products; pump lift stations; steel casing pipe, bar-wrapped concrete cylinder pipe, and one of the largest offerings of pipeline system joints, fittings, and specialized components.

| Notice and Proxy Statement | 2024

PROXY SUMMARY

 

 

 

A combination of new population centers, rising demand on developed water sources, substantial underinvestment in water infrastructure over the past several decades, impacts from climate change, and increasingly stringent regulatory policies are driving demand for water infrastructure projects and environmental solutions across the United States.

The Company’s core market for its Engineered Steel Pressure Pipe (“SPP”) segment is the large-diameter, high-pressure portion of a water transmission pipeline, which the Company believes has a total addressable market of approximately $2 billion over the next three years.

With the Company’s goal of creating growth and profitability to drive shareholder value, Northwest Pipe Company continues to look beyond the engineered welded steel pipeline market and address the much larger potential market of concrete pipe and precast. The Company believes the water-related Precast Infrastructure and Engineered Systems (“Precast”) segment has a total annual addressable market of approximately $3 to $5 billion. The Company’s environmental solutions and engineered equipment manufactured by its Precast segment support this addressable market and provide precast infrastructure products that facilitate water efficiency, security, wastewater pretreatment, and stormwater quality.

The Company will continue to maximize its SPP segment by being opportunistic with the limited but identified potential acquisition opportunities, as well as expand its footprint in the precast concrete and engineered solutions market for growth through expansion or acquisition.

| Notice and Proxy Statement | 2024

PROXY SUMMARY

 

	EARNINGS PER SHARE		COMPOUND ANNUAL GROWTH RATE
	Basic net income per share is computed by dividing the net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including restricted stock units (“RSUs”) and performance share awards (“PSAs”), assumed to be outstanding during the period using the treasury stock method. The chart below shows diluted net income per share from continuing operations, which was $2.09 in 2023. The Company’s SPP market has seen improved resiliency to variability in demand. The addition of the Precast segment has improved the Company’s margins and cash conversion cycle.		The compound annual growth rate (“CAGR”) is the mean annual growth rate of revenue over a specified period of time longer than one year. The chart below shows the Company’s revenue by segment (in millions) and its six-year compound annual growth rate of 22%. The Company has achieved its growth principally through acquisitions, acquiring Ameron Water Transmission Group, LLC, its largest SPP competitor in 2018, before strategically selecting the precast concrete market and completing the acquisitions of Geneva Pipe and Precast Company (“Geneva”) (2020) and Park Environmental Equipment, LLC (“ParkUSA”) (2021).

CORPORATE GOVERNANCE

‘Corporate Governance’ Section starts on page 16.

CORPORATE GOVERNANCE HIGHLIGHTS

| Notice and Proxy Statement | 2024

PROXY SUMMARY

 

PROPOSAL #1: ELECTION OF DIRECTORS

‘Proposal #1: Election of Directors' Section starts on page 24.

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.

The Board of Directors unanimously recommends that shareholders vote “FOR” the election of its nominees for director. Proxies solicited by the Board will be voted “FOR” the election of the Board’s nominees unless a vote withholding authority is specifically indicated.

| Notice and Proxy Statement | 2024

PROXY SUMMARY

 

PROPOSAL #2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

‘Proposal #2: Advisory Vote on Executive Compensation' Section starts on page 33.

EXECUTIVE COMPENSATION

The following table reflects compensation awarded to the Company’s CEO, Chief Financial Officer (“CFO”), and each of the three other most highly compensated executive officers (collectively the “Named Executive Officers” or “NEOs”) in 2023. More detailed information regarding Executive Compensation can be found on page 33 under “Executive Compensation Discussion and Analysis” and on page 41 under “Summary Compensation.”

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.

The Board of Directors unanimously recommends voting “FOR” the approval of the compensation of the NEOs as disclosed in this proxy statement and as described pursuant to the compensation disclosure rules of the Exchange Act.

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.

ADDITIONAL INFORMATION

‘Additional Information' Section starts on page 52.

| Notice and Proxy Statement | 2024

CREATING STAKEHOLDER VALUE

 

CREATING STAKEHOLDER VALUE

COMPANY CULTURE

Northwest Pipe Company’s core values are Accountability, Commitment, and Teamwork, or ACT for short, which it seeks to demonstrate in all of its behaviors and daily interactions, both internally and externally, and with all of its stakeholders.

PROFESSIONAL STANDARDS

Northwest Pipe Company takes pride in the high standards of conduct that it identifies with as a Company. The Company has controls in place relating to compliance with its Code of Business Conduct and Ethics (“Code”), including a requirement for employees and the Board of Directors to review and understand the requirements of the Code, as well as an established whistleblower hotline and related procedures. The Company conducts training on the Code in regular intervals during the employee’s life cycle; the next training will be held in the fourth quarter of 2024. The Company also conducts anti-trust training annually. The most recent anti-trust training for certain senior management and sales employees was conducted in the first quarter of 2023.

2023 PERFORMANCE HIGHLIGHTS

In 2023, the Company overcame macroeconomic headwinds to continue to realize strong financial performance. Despite interest rate pressures and a relatively small bidding market for the Company’s Engineered Steel Pressure Pipe segment, revenues in 2023 remained elevated compared to historical standards. Additionally, the Company successfully remediated the previously identified internal control material weakness over the implementation of its enterprise resource planning system for the acquisition of ParkUSA, and began a transition to material resource planning system automation at the ParkUSA facilities. The Company enters 2024 with a strong backlog and order book, and expects 2024 steel pressure pipe demand (tons) to increase approximately 40 percent compared to 2023.

 

| Notice and Proxy Statement | 2024

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	REVENUE GROWTH (IN MILLIONS)		PROFITABILITY
	In 2023, net sales revenue decreased 3% to approximately $444 million from approximately $458 million in 2022. Despite the recent decrease, the six-year revenue CAGR is 22%, fueled by completing three significant acquisitions over that timespan. The Company aims to continue its transformation and drive shareholder value through organic growth and future acquisitions.		The Company’s diluted net income per share in 2023 was $2.09 and is still strong in relation to the $3.11 diluted net income per share in 2022, when the precast market was at record levels.

	SPP BACKLOG INCLUDING CONFIRMED ORDERS (IN MILLIONS)		PRECAST ORDER BOOK (IN MILLIONS)
	As of December 31, 2023, the Company had a backlog(1) of $273 million. The Company evaluates demand for its SPP segment using backlog including confirmed orders(2), as confirmed orders are generally not canceled and, as such, provides a more holistic measure of demand. As of December 31, 2023, SPP’s backlog including confirmed orders was $319 million, indicating a healthy project load and future revenue.		As of December 31, 2023, the Company had an order book totaling $46 million in the Precast segment, a 29% decrease from the prior year record levels. Even though challenged by macroeconomic headwinds, the Precast order book is considered strong since it is a shorter lead time business. ‘Order book’ includes unfulfilled orders outstanding at the measurement date.

| Notice and Proxy Statement | 2024

CREATING STAKEHOLDER VALUE

 

GROWTH AND STRATEGIC OPPORTUNITIES

Northwest Pipe Company’s growth strategy continues to focus on diversifying into a broader water market and capitalizing on the unique attributes of its market position, production capabilities, reputation, and nationwide sales and distribution footprint. The Company’s goal is to create transformational growth and profitability to drive shareholder value via an organic growth “Product Spread” strategy and through acquisitions.

Strategic acquisitions present prime opportunities for the Company to further expand its reach in the precast-related market. The Company acquired Geneva in January 2020, a concrete pipe and precast concrete products manufacturer based in Utah. This acquisition expanded the Company’s water infrastructure product capabilities by adding additional reinforced concrete pipe (“RCP”) capacity and a full line of precast concrete products including storm drains, manholes, catch basins, vaults, and curb inlets as well as innovative lined products that extend the life of concrete pipe and manholes for sewer applications. In October 2021, the Company acquired ParkUSA, a technology leader in water infrastructure products that manufactures water, wastewater, and environmental solutions at its three operating facilities in Texas. The ParkUSA products are assembled within concrete vaults or steel fabricated housings that can be delivered direct to the job site, saving valuable installation time for the Company’s customers.

Given the size of the addressable precast market, the Company aspires to grow organically by increasing and spreading the manufacturing of ParkUSA’s products to pre-existing Northwest Pipe Company facilities:

Further, the Company is solidifying its commitment to the precast market by continuing to invest in its Geneva facilities in Utah. The Company has recently invested in a new batch plant at the St. George, Utah facility, replaced a concrete mixer and controls in the Salt Lake City, Utah facility, and has ordered a RCP machine with associated concrete batching and mixing equipment, also at the Salt Lake City facility. The RCP machine is expected to cost approximately $16 million and will improve efficiency and increase capacity to meet growing market demand for RCP as well as increase production capacity for other concrete products in Utah.

Future strategic acquisitions will target:

| Notice and Proxy Statement | 2024

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CREATING STAKEHOLDER VALUE

 

In addition to the focus placed on the Company’s growth strategy, the following strategic and operational initiatives also play a critical role in the business:

TRANSFORMING INITIATIVES

Northwest Pipe Company’s performance culture enables it to be agile in response to the fast-changing needs of its customers and is supported by its three core ACT principles: Accountability, Commitment, and Teamwork. In addition to these key components, core drivers of the manufacturing operations include safety, quality, innovation, “Lean Manufacturing,” and reducing environmental impact through all areas of the business. This unwavering commitment underlies the principle that good business, economic growth, and social responsibility flourish together.

2023 ESG efforts largely focused on the Company defining its ESG vision and assessing current business operations to identify where ESG principles are already in practice (e.g. employee health/safety, waste reduction, recycling). High-level ESG objectives and the path forward were established under the supervision of the Board of Directors through exercises with the Company’s senior management. Other specific ESG efforts included:

	•	ESG Foundation/Baseline: Consisted of a series of benchmarking exercises to establish the Company’s current “ESG identity” and gauge the collective appetite for how intensive the program should be moving forward. This first step also accounted for industry standards/trends and peers’ behaviors in the ESG realm. The benchmarking assessment provided a practical starting point, highlighting strengths to build on, as well as opportunities to advance ESG priorities.
	•	ESG Vision Establishment: The Company published a statement communicating its ESG commitment on its website, with emphasis on:
		–	Creating a safe and engaging workplace environment where employees feel valued and supported in such a manner that enables them to succeed and grow;
		–	Focusing on cultivating workforce diversity that is representative of the communities in which the Company operates, from the shop floor through the highest levels of the Company. In addition, through the Company’s organizational efforts and practices, striving to ensure that its employee groups are culturally and socially accepted, welcomed, and equally treated in the workplace; and
		–	Prioritizing continuous improvement in reducing the Company’s impact on the environment.

 

•

Materiality Assessment: Conducted in March 2023, this three-day workshop featured a series of interviews with a multidisciplinary group of subject matter experts and department heads. The overall goals of the exercise were to identify ESG risks and opportunities, provide data to serve as a tool to further assist in defining overarching strategy, and convey ESG and sustainability reporting and communications content to stakeholders. Discussions highlighted stakeholder priorities such as: Employee Safety and Occupational Health; Business Model Resilience; Diversity, Equity, and Inclusion; Human Capital Development; Greenhouse Gas (GHG) Emissions; and Economic Performance.

 

| Notice and Proxy Statement | 2024

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CREATING STAKEHOLDER VALUE

 

	•	Greenhouse Gas (GHG) Emissions Scope 1 and 2 Inventory: As part of its commitment to sustainability, in May 2023, the Company conducted its first ever Scope 1 (direct emissions from sources controlled by the Company) and Scope 2 (indirect emissions from the purchase of electricity, steam, heat, or cooling) inventory, in partnership with an independent sustainability consultant. This effort was performed to establish a baseline against which future progress and emissions reduction efforts are measured. The analysis focused on both direct and indirect emissions produced from the Company’s manufacturing practices in the year ended December 31, 2022, broken down by each facility.
		A second inventory based on 2023 emissions is planned to be conducted in the second quarter of 2024 and will be again validated by an independent sustainability consultant. The Company will use this data to analyze year-over-year performance and establish consistency in its emissions inventory management and will consider appropriate next steps in late 2024.

Operationalizing and Integrating ESG

For 2024, the Company will continue its focus on operationalizing ESG into existing business practices and long-term strategic objectives. Since ESG principles are considered vital to the long-term business success, the Company will emphasize the following areas: (i) the ways in which ESG related initiatives create value for the Company; (ii) how the Company responds to evolving regulatory reporting requirements; (iii) customer needs and expectations; and (iv) non-financial/technical risk management. Some additional ongoing efforts to operationalize ESG include routinely analyzing the Company’s ESG ratings through a subscription to the Institutional Shareholder Services (ISS) business intelligence software, updating/publishing policies and procedures that contain ESG-related subjects, and marrying ESG to existing practices such as “Lean Manufacturing” (reduced waste, elimination of inefficiencies). As part of the practical application of tying ESG to existing practices, each facility will develop a tailored plan based on their unique needs and capabilities, focused on recognizing waste in production processes and identifying opportunities for improvement and innovation. This effort will be led by the Corporate Social Responsibility Manager (CSRM), who will make site visits to facilities and work in conjunction with appropriate facility personnel and a third-party sustainability consulting group.

 

Environmental Product Declarations

Environmental Product Declarations (“EPDs”) are now mandated in several locales where the Company manages active construction projects, and most prominently in the Western United States. In collaboration with third-party sustainability consultants, the Company recently embarked on a pilot project focused on developing EPDs for steel pipe products manufactured at its California facilities. The project will consist of a Life Cycle Assessment that will determine products’ global warming potential and identify the major contributors to the total environmental impact from the “cradle-to-gate” production process. Upon completion of the pilot project, the Company intends to replicate the EPD development process and will explore developing its own third-party verified “EPD-generation” tool that can be used during the bidding process for future projects. In addition to mandates and disclosure requirements, EPDs provide an opportunity for the Company to be more transparent about its products and practices, boost its brand image, improve supply chain management, and appeal to a broader customer base.

 

| Notice and Proxy Statement | 2024

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Table of Contents

 

CREATING STAKEHOLDER VALUE

 

Water Security

As a manufacturer of water-related infrastructure products, the Company is committed to providing water to communities with the intent of improving environmental and public health outcomes. With climate change disrupting weather patterns and causing long-term drought in regions where water has previously been more available, responsible resource management and reliable water transmission solutions are becoming even more crucial. The Company’s quality and long-lasting engineered steel pipe products support critical modernization projects that replace or rehabilitate crumbling, aging infrastructure, reducing water loss and saving millions of gallons of water a year. Some examples of the projects the Company is proud to be involved with include:

PRIORITIZING HEALTH AND SAFETY

Northwest Pipe Company’s goal is to send each employee home safely at the end of the day. As such, safety is at the central core of the Company’s culture and is infused at every level of its organization. More than just policy and procedure, the Company’s safety program gives equal focus to the human side of safety, integrating coaching and mentoring efforts with compliance-driven approaches. By instilling a deep commitment to safety that reaches from the Company’s CEO to its general laborers, the Company has achieved industry-leading safety performance. Over the last four years, the Company’s average total recordable incident rate was 2.17 and its average days away rate was 0.39, calculated in accordance with the Occupational Safety and Health Administration’s (“OSHA”) record keeping requirements.

 

| Notice and Proxy Statement | 2024

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CREATING STAKEHOLDER VALUE

 

The Company’s recordable incident and days away rates are significantly lower than comparable industry averages. Industry average rates are recorded to OSHA per 100 full-time workers for SIC code 33121 (Iron and steel pipe and tube manufacturing from purchased steel).

* 2023 industry rates are not yet available as of the date of this Proxy.

To align the Company’s commitment to safety with its incentive compensation plans, in 2023 the executive officers and certain members of the senior management team who have direct responsibility for the Company’s safety program had 10% of their short-term incentive plan tied to the Company’s recordable incident rate, with a target of 2.8. The 2023 recordable incident rate of 1.51 was a Company record and is indicative of the importance it places on safety. In addition, two of 13 facilities exceeded one million work hours without a lost time incident, and nine of 13 exceeded one year since their last lost time incident.

DIVERSITY AND INCLUSION

Northwest Pipe Company welcomes and embraces differences in age, gender identity, race, sexual orientation, physical or mental ability, ethnicity, socio-economic status, veteran status, or any other characteristics that make employees unique. The Company values these differences as strengths and believes its resilience and achievements as a company culminate from each individual’s background, perspective, and skillset.

The Company’s Affirmative Action Program (“AAP”) strives to hire, recruit, train, and promote employees without regard to race, age, religion, color, sex, national origin, physical or mental disability, marital or veteran status, sexual orientation, gender identity, or any other classification protected by law. Northwest Pipe Company only hires employees who meet the necessary education, training, skills and/or experience requirements to perform their job, and who can provide the required documentation pertaining to legal eligibility and age requirements. To support these efforts, the AAP for the Company’s facilities in the United States is reviewed annually by a third-party consultant, establishing annual hiring goals for women, minorities, veterans, and individuals with disabilities that are reflective of the communities in which the Company’s facilities are located.

| Notice and Proxy Statement | 2024

CREATING STAKEHOLDER VALUE

 

Increasing Women Representation

Northwest Pipe Company continues to support women representation at every stage of their career and at every employee base throughout the Company, from the production floor, to an engineering desk, and to a management office. In the past three years, representation of women at all levels increased 17% throughout the Company’s U.S. operation from 11.7% in 2021 to 13.7% in 2023. The Company also saw an increase of 36% of women representation in mid-level managers and senior executive roles, from 13.9% in 2021 to 18.9% in 2023.

| Notice and Proxy Statement | 2024

CREATING STAKEHOLDER VALUE

 

Race and Ethnicity Diversity

Northwest Pipe Company’s goal is to build a strong, skilled, diverse team. The Company’s promise is to provide an inclusive workplace where everyone, from any background, can do their best work. In the past three years, the Company has seen a steady increase in U.S. racial and ethnic minority representation.

In 2023, 51.4% of the Company’s total U.S. workforce is comprised of racial and ethnic minority representation, and signifies a 12% increase from 45.9% in 2021. Racial and ethnic minorities representation of mid-level managers and senior executive roles continues to grow, from 21.9% in 2021 to 22.8% in 2023.

At Northwest Pipe Company, investment in employee development is not just an investment in individual employees, it is an investment in the Company’s long-term success and competitiveness. In addition to the Company’s continued focus on general skill development of its employees, the Company has sharpened its focus on the development of its leadership pipeline with the creation of the ACTivate program. ACTivate included three new initiatives in 2023: a broad leadership development program held in-person at locations across the Company, a small-group program focused on pairing a handful of promising employees with members of the senior executive team for one-on-one career coaching and mentoring, and identifying individual career and growth development opportunities for key employees.

| Notice and Proxy Statement | 2024

CREATING STAKEHOLDER VALUE

 

| Notice and Proxy Statement | 2024

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

Northwest Pipe Company’s Board of Directors and management have committed themselves to establishing a strong corporate governance environment and to adopting best practices to meet the needs and goals of the Company. As part of that commitment, the Company has adopted Corporate Governance Principles, which cover such topics as qualifications and independence of Board members, the selection, orientation, and continuing education of Board members, as well as other topics designed to promote effective governance by the Board. The Company has also adopted a Code of Business Conduct and Ethics, which applies to all employees, officers, and directors of the Company. It sets forth guidance to help in recognizing and dealing with ethical issues, to provide mechanisms for reporting unethical conduct, and to promote a culture of honesty and accountability, and a Code of Ethics for Senior Financial Officers, which applies to senior financial officers and sets forth guidance to deter wrongdoing, promote honest and ethical conduct, and promote a culture of integrity and fairness. Copies of the Corporate Governance Principles, Code of Business Conduct and Ethics, and Code of Ethics for Senior Financial Officers are available on the Company’s website at www.nwpipe.com under “Investors” — “Corporate Governance,” or by writing to the Company’s Corporate Secretary, Northwest Pipe Company, 201 NE Park Plaza Drive, Suite 100, Vancouver, Washington 98684.

The Company has also adopted a Policy for Reporting Financial Irregularities (“Whistleblower Policy”), which is intended to create a workplace environment that encourages the highest standards of ethical, moral, and legal business conduct. The Whistleblower Policy establishes procedures for any person to confidentially and anonymously report violations, by any of the Company’s personnel, of the Code of Business Conduct and Ethics or any laws, rules, or regulations without fear of retaliation. The Whistleblower Policy also contains procedures for submission of complaints involving the Company’s accounting practices and financial internal controls.

DIRECTOR ELECTIONS

While directors are elected by a plurality of votes cast, the Company’s Corporate Governance Principles include a director resignation policy, requiring a director who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall submit to the Board of Directors a letter of resignation for consideration by the Nominating and Governance Committee. The Nominating and Governance Committee shall recommend to the Board the action to be taken with respect to such offer of resignation. The Board shall act promptly with respect to each such letter of resignation and publicly disclose its decision and rationale within 90 days following certification of the shareholder vote.

DIRECTOR INDEPENDENCE

The current Board of Directors consists of seven directors, one of whom is currently employed by the Company (Mr. Montross). The Board has affirmatively determined that all of the other directors (Mss. Julian and Lockridge and Messrs. Franson, Larson, Paschal, and Roman) are “independent” in accordance with the standards of the Nasdaq Stock Market, including standards related to independence for service on the committees on which they serve, and as defined by the director independence guidelines included in the Company’s Corporate Governance Principles.

| Notice and Proxy Statement | 2024

CORPORATE GOVERNANCE

Criteria for Director Independence

For a director to be considered independent, the director must not have any material relationships with Northwest Pipe Company, either directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company, other than as a director or shareholder. Material relationships can include vendor, supplier, consulting, legal, banking, accounting, charitable, and family relationships, among others. The Board of Directors considered all relevant facts and circumstances in making its determination of independence, including the following:

BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT

The Company’s Corporate Governance Principles provide that the independent members of the Board of Directors will select a lead director from among the independent directors if the positions of Chairperson of the Board and CEO are held by the same person, if the Chairperson of the Board is not an independent director, or if the Board otherwise determines that a lead director is appropriate. The responsibilities of the Chairperson of the Board include the following: set Board meeting agendas in collaboration with the CEO; preside at Board meetings and the annual shareholders meeting; assign tasks to the appropriate committees; serve as an ex-officio member of each Board committee; and ensure that information flows openly between the management and the Board. The responsibilities of the lead director include the following: coordinate the activities of the independent directors; make recommendations to the CEO in setting Board meeting agendas on matters concerning the independent directors; prepare the agenda for executive sessions of the independent directors, chair those sessions, and be primarily responsible for communications between the independent directors and the CEO; evaluate, along with the members of the Compensation Committee, the performance of the CEO; assist the Nominating and Governance Committee in the annual self-evaluation of the Board; recommend to the Chairperson of the Board the retention of consultants, as necessary or appropriate, who report directly to the Board; advise the Chairperson of the Board as to the quality, quantity, and timeliness of information sent to the Board; consult with other members of the Board as to recommendations for Board and committee membership and chairpersons of the Board committees, and interview Board candidates; and perform such other duties as the Board may from time to time designate.

| Notice and Proxy Statement | 2024

CORPORATE GOVERNANCE

Mr. Roman, who has served as the Chairperson of the Board since January 2013, was not “independent” within the meaning of the applicable rules of the Nasdaq Stock Market until October 1, 2021 because of his previous employment with the Company. Mr. Franson was appointed as the Board’s Lead Director in August 2016 while Mr. Roman was not considered “independent” within the meaning of the applicable rules of the Nasdaq Stock Market. Despite Mr. Roman now meeting the definition of “independent,” the Board has determined to retain Mr. Franson’s Lead Director designation, as a reflection of the Board’s commitment to principles of independence.

Board’s Role in Risk Oversight

The Board of Directors oversees management’s Company-wide risk management activities which include assessing and taking actions necessary to manage risks incurred in connection with the long-term strategic direction of the Company and the operation of its business. The Board uses its committees to assist in its risk oversight function.

While senior management has primary responsibility for managing risk, the Board of Directors has responsibility for risk oversight with specific risk areas delegated to relevant Board Committees who report on their deliberations to the Board. The specific risk areas of focus for the Board and each of its Committees are summarized below. The Board relies on senior management to keep it informed with respect to the nature of risks facing the Company and how the Company is managing those risks.

| Notice and Proxy Statement | 2024

CORPORATE GOVERNANCE

Cyber-related Risks

The Board of Directors acknowledges the Company operates in a business environment encumbered by the increased risk of cyberattacks. The Audit Committee is responsible for oversight of the Company’s cybersecurity program and discusses the topic at least quarterly. The Audit Committee is involved with the review of management’s risk assessment process and formulation of policies and procedures to prevent, detect, and to the extent it could become applicable in the future, mitigate the effects of a discovered breach. The Board’s expertise in risk assessment has been further enhanced with the Audit Committee chairperson earning a certification in cybersecurity risk, providing the Company with the appropriate oversight to this evolving threat. The Audit Committee believes that the Company’s efforts require continuous review due to the speed in which these types of criminal behaviors evolve, and due to the inherent risk with cybersecurity, that maintaining insurance is necessary to help protect the residual operational and financial risks involved which are not otherwise mitigated.

BOARD OF DIRECTORS MEETINGS

Regular attendance at the Company’s Board of Directors meetings and the Annual Meeting is expected of each director. The Board held six meetings during 2023, in addition to adopting unanimous written consents in lieu of a meeting. Each of the directors attended more than 75% of the total number of Board and applicable Committee meetings during their tenure in 2023. In addition, all of the directors serving at that time attended the Company’s 2023 Annual Meeting of Shareholders.

| Notice and Proxy Statement | 2024

CORPORATE GOVERNANCE

BOARD OF DIRECTORS COMMITTEES

The Board of Directors has an Audit Committee, a Compensation Committee, an Environmental and Social Governance Committee, and a Nominating and Governance Committee. Each of the Committees consists of independent directors and each of the Committees has adopted a written charter which is available on the Company’s website at www.nwpipe.com under “Investors” — “Corporate Governance.” The table below lists the current membership of each Committee.

Audit Committee

The Audit Committee of the Board of Directors is responsible for the oversight and monitoring of: the integrity of the Company’s financial reporting process, financial internal control systems, accounting and legal compliance, and the integrity of the financial reporting; the qualifications, independence, and performance of the independent auditors; the Company’s compliance with applicable legal and regulatory requirements; oversight of risk management practices, including data protection and cybersecurity; and the maintenance of open and private, if necessary, communication among the independent auditors, management, legal counsel, and the Board. The Audit Committee met eight times in 2023. Each member of the Audit Committee is “independent” as defined by applicable SEC and Nasdaq Stock Market rules. The Board has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” as defined by the rules of the SEC.

Compensation Committee

The Compensation Committee of the Board of Directors is responsible for the oversight and determination of executive compensation by reviewing, recommending, and approving salaries and other compensation of the Company’s executive officers, and administering the Company’s equity incentive and compensation plans, including reviewing, recommending, and approving equity incentive and compensation awards to executive officers. In addition, the Compensation Committee is responsible for recommending to the Board the level and form of compensation and benefits for all nonemployee directors; administering the Company’s Incentive Compensation Recovery Policy; oversight of the Company’s human capital management matters; and reviewing, recommending, and taking action upon any other compensation practices or policies of the Company as the Board may request or the Committee may determine to be appropriate. The Compensation Committee has sole authority to retain and terminate a compensation consultant to assist in the evaluation of executive compensation. The Compensation Committee met four times in 2023, in addition to adopting unanimous written consents in lieu of a meeting. Each member of the Compensation Committee is “independent” as defined by applicable Nasdaq Stock Market rules.

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CORPORATE GOVERNANCE

Environmental and Social Governance Committee

The Environmental and Social Governance (ESG) Committee of the Board of Directors is responsible for providing oversight and support of the Company’s environmental, health, diversity, and safety compliance policies, programs, and initiatives, and its commitment to environmental, health, diversity, and safety, corporate social responsibility, social governance, sustainability, and other related public policy matters (collectively, “ESG Matters”) relevant to the Company. The ESG Committee monitors the Company’s general strategy relating to ESG Matters, the Company’s communication plans with employees, investors, and other stakeholders of the Company with respect to ESG Matters, the Company’s developments relating to, and improving its understanding of, ESG Matters, and the Company’s compliance with certain ESG Matter-related legal and regulatory requirements. The ESG Committee met four times in 2023. Each member of the ESG Committee is “independent” as defined by applicable Nasdaq Stock Market rules.

Nominating and Governance Committee

The Nominating and Governance Committee of the Board of Directors recommends to the Board corporate governance principles for the Company, identifies qualified candidates for membership to the Board, and proposes nominees for election. The Nominating and Governance Committee met five times in 2023. Each member of the Nominating and Governance Committee is “independent” as defined by applicable Nasdaq Stock Market rules.

COMMUNICATIONS WITH DIRECTORS

Any shareholder who wants to communicate with members of the Board of Directors, individually or as a group, may do so by writing to the intended member or members of the Board, c/o Chairperson of the Board, Northwest Pipe Company, 201 NE Park Plaza Drive, Suite 100, Vancouver, Washington 98684. Communications should be sent by overnight or certified mail, return receipt requested. All communications will be submitted to the intended member(s) of the Board in a timely manner.

Nominations by Shareholders

In identifying qualified candidates for the Board of Directors, the Nominating and Governance Committee will consider recommendations by shareholders. Shareholder recommendations as to candidates for election to the Board may be submitted to the Company’s Corporate Secretary, Northwest Pipe Company, 201 NE Park Plaza Drive, Suite 100, Vancouver, Washington 98684. The Nominating and Governance Committee will evaluate potential nominees, including candidates recommended by shareholders, by reviewing qualifications, considering references, and reviewing and considering such other information as the members of the Nominating and Governance Committee deem relevant.

The Company’s Bylaws permit shareholders to make nominations for the election of directors, if such nominations are made pursuant to timely notice in writing to the Company’s Secretary. To be timely, in accordance with the Company’s Bylaws as amended effective December 14, 2023, notice must be delivered to, or mailed to and received at, the principal executive offices of the Company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. If the date of the annual meeting of shareholders is more than 30 days prior to, or more than 60 days after, the first anniversary of the date of the preceding year’s annual meeting, to be timely, a shareholder’s notice must be received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting and (ii) the 10th day following the day on which public disclosure of the date of the meeting is first made by the Company. Any nominations for the 2025 Annual Meeting of Shareholders must be received by the Company not later than March 15, 2025.

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CORPORATE GOVERNANCE

Any nominations by shareholders must also comply with the timing, disclosure, procedural and other requirements as set forth in the Company’s Bylaws, as well as any other applicable requirements set forth in Exchange Act Rule 14a‑19, including that the nominating shareholder actually solicit holders of shares representing at least 67% of the voting power of the shares entitled to vote in the Company’s election of directors. A shareholder’s notice of nomination must set forth certain information specified in the Company’s Bylaws concerning each person the shareholder proposes to nominate for election and the nominating shareholder, and the shareholder and its nominee must undertake to provide supplemental information, agreements and questionnaires, as described in greater details in the Company’s Bylaws. The Company’s Bylaws, as amended effective December 14, 2023, expanded and clarified these notice and information requirements, along with certain other procedural matters.

AUDIT COMMITTEE REPORT

The Audit Committee reports to and acts on behalf of the Board of Directors and is comprised solely of directors who satisfy the independence, financial literacy, and other requirements set forth in the listing rules of the Nasdaq Stock Market and applicable securities laws. In addition, each member of the Audit Committee qualifies as an “audit committee financial expert” as defined by the rules of the SEC.

The Audit Committee operates under a written charter, approved and adopted by the Board of Directors, which sets forth its duties and responsibilities. This charter, which is available in full on the Company’s website at www.nwpipe.com under “Investors” — “Corporate Governance”, is reviewed annually and updated, as appropriate, to address changes in regulatory requirements, authoritative guidance, evolving oversight practices, and investor feedback.

The Audit Committee’s primary duties and responsibilities are the oversight and monitoring of:

Management is responsible for preparing the Company’s financial statements and maintaining effective internal control over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s financial statements in accordance with applicable auditing standards and issuing a report thereon, and for performing an independent audit of the effectiveness of the Company’s internal controls over financial reporting. In this context, the Audit Committee performed the following:

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CORPORATE GOVERNANCE

Based on the reviews and discussions described in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2023 for filing with the SEC.

The Audit Committee’s responsibilities also include monitoring the qualifications, independence, and performance of the Company’s independent auditors. In reviewing the auditor’s performance, the Audit Committee considers the quality and efficiency of the services provided by the audit team and reviews and discusses the auditor’s most recent PCAOB inspection report and its system of quality control. The Committee also reviews and discusses proposed staffing levels and the selection of the lead engagement partner from the independent registered public accounting firm. Further, the Audit Committee recognizes the importance of maintaining the independence of the Company’s auditor, both in fact and in appearance. For 2023, the Audit Committee received and reviewed the written disclosures and letter provided by Moss Adams as required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the audit committee concerning independence, and the Audit Committee discussed with the independent accountants that firm’s independence. The Audit Committee concurs with Moss Adams’ conclusion that they are independent from the Company and its management.

Respectfully submitted by the Audit Committee of the Board of Directors.

AUDIT COMMITTEE

Keith Larson, Chairperson

Michael Franson

Richard Roman

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PROPOSAL #1: ELECTION OF DIRECTORS

PROPOSAL #1: ELECTION OF DIRECTORS

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.

At the Annual Meeting, three directors will be elected, each to serve for a three-year term. Unless otherwise specified on the proxy, it is the intention of the persons named in the proxy to vote the shares represented by each properly executed proxy for the election of the nominees named below. The Board of Directors believes that the nominees will stand for election and will serve if elected as a director. However, if the person nominated by the Board fails to stand for election or is unable to accept election, the proxies will be voted for the election of such other person as the Board may recommend.

The Company’s Articles of Incorporation and Bylaws provide that the Board of Directors shall be composed of not less than six and not more than nine directors. The size of the Board is currently fixed at seven directors. Under the Company’s Articles of Incorporation and Bylaws, the Company’s directors are divided into three classes, with each class to be as nearly equal in number as possible. The term of office of only one class of directors expires each year, and their successors are generally elected for terms of three years, and until their successors are elected and qualified. The term of a director elected by the Board to fill a vacancy expires at the next annual shareholders’ meeting. There is no cumulative voting for election of directors.

The Nominating and Governance Committee has responsibility for identifying director nominees who collectively have the complementary experience, qualifications, skills, and attributes to guide the Company and function effectively as a Board. The Nominating and Governance Committee believes that the nominees presented in this proxy have the key personal attributes that are important to an effective Board of Directors: integrity, candor, analytical skills, willingness to engage management and each other in a constructive and collaborative fashion, and ability and commitment to devote significant time and energy to serve on the Board and its committees. The Company considers the following specific experiences, qualifications, and skills to be critical in light of its strategic priorities, business objectives, operations, and structure.

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PROPOSAL #1: ELECTION OF DIRECTORS

DIRECTOR SKILLS AND QUALIFICATIONS

STRATEGIC SKILLS

Industries, End Markets, and Growth Areas. Experience in industries, end markets, and growth areas that the Company serves enables a better understanding of the issues facing these businesses.

Manufacturing Experience. Growing sales outside of the engineered steel pressure pipe water transmission market, particularly in the precast concrete and engineered solutions market, is one of the Company’s long-term growth strategies. Hence, exposure to manufacturing economies is an important qualification for Company directors.

Regulated Industries/Government Experience. The Company’s customers and project stakeholders are subject to a broad array of government regulations, and demand for products and services can be impacted by changes in law or regulation in areas such as safety, environmental, and energy efficiency. It is important to have directors with experience in government and regulated industries that provide insight and perspective in working constructively and proactively with governments and municipalities.

Innovation and Technology. The Company strives to lead the industry in water transmission and infrastructure innovation. Expertise in product development, testing, and introduction is critical to continuing new growth paths for the Company’s business.

Human Capital. The Company is committed to developing its human capital, including culture, health and safety, and diversity and inclusion. Experience managing a large workforce brings understanding to the oversight of one of the Company’s key resources.

Marketing. Driving growth in existing and new markets is critical for Company growth. The Company’s directors who have that expertise and a much-desired perspective in marketing will aid in delivery of the Company’s products and services.

CORE COMPETENCIES

Senior Leadership Experience. Experience serving as CEO or a senior executive as well as hands-on leadership experience in core management areas – such as strategic and operational planning, financial reporting, compliance, risk management, and leadership development – provide a practical understanding of complex organizations.

Risk Management. In light of the Board of Directors’ role in risk, the Company seeks directors who can help identify, manage, and mitigate key risks, including cybersecurity, regulatory compliance, competition, brand integrity, human capital, climate change, and intellectual property.

Financial Expertise. The Company believes an understanding of finance and financial reporting processes is important for its directors to enable them to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. Northwest Pipe Company seeks directors with background and experience in capital markets, corporate finance, mergers and acquisitions, accounting, and financial reporting.

Cybersecurity. Experience in cybersecurity, intelligence, and data protection, including U.S. cybersecurity policy and the U.S. Government’s cybersecurity efforts and cybersecurity threats, contribute to the Board’s oversight of cybersecurity risks.

Public Company Board Experience. Service on the boards and board committees of other public companies provides an understanding of corporate governance practices and trends and insights into board management, relations between the board, the CEO, and senior management, agenda setting, and succession planning.

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PROPOSAL #1: ELECTION OF DIRECTORS

BOARD SKILLSET MATRIX

NOMINEES AND CONTINUING DIRECTORS

The following table sets forth the names of and certain information about the Board of Directors’ nominees for election as a director and those directors who will continue to serve after the Annual Meeting.

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NOMINEES FOR DIRECTOR

Years of Service: 4 Age: 48 Committees: • Environmental and Social Governance Committee - Chairperson • Nominating and Governance Committee Independent: Yes Other directorships: None		Specific Experience, Qualifications, Attributes, and Skills:
			•	Extensive experience with organizational development and strategic human capital
			•	Deep experience in strategic planning, communications, leadership management, and finance gained through senior leadership positions
			•	Broad experience with corporate governance issues
		Board of Director Tenure:
		Amanda Julian has been a director of the Company since July 2020.
		Business Experience:
		Ms. Julian has been a senior partner of NeoPsy Systems, a firm specializing in management and organizational psychology, since June 2001. Ms. Julian has over 20 years of experience working with investors and top-level senior executives in building great companies. Ms. Julian provides investor and management teams with an understanding of how to maximize leadership effectiveness and build value creation through long-term strategic planning. Specifically, Ms. Julian specializes in applied research to assist in executive selection, executive development, organizational assessment, and strategic planning.
		Education:
		Ms. Julian holds a PhD and MA in Industrial Psychology from Bowling Green State University and obtained her undergraduate degree from the University of Colorado Boulder.

 

KEITH LARSON

Years of Service: 17 Age: 66 Committees: • Audit Committee - Chairperson • Compensation Committee • Environmental and Social Governance Committee Independent: Yes Other directorships: None		Specific Experience, Qualifications, Attributes, and Skills:
			•	Extensive management, operational, technology, networking, and cybersecurity experience as well as corporate governance for a multinational public company
			•	Deep understanding of public policy and global economic indicators, risk assessment, and financial administration gained through leadership positions in Asia and western Europe
			•	Significant expertise in manufacturing, product design, and supply chain management
		Board of Director Tenure:
		Keith Larson has been a director of the Company since May 2007.
		Business Experience:
		Mr. Larson served on the board of directors of Rogers Corporation, a publicly-held company, from December 2020 to May 2023, and is an advisor to other privately-held companies. Mr. Larson was a Vice President of Intel Corporation and Senior Managing Director of Intel Capital, until his retirement after 22 years in April 2019. As a Managing Director of Intel Capital, Mr. Larson managed a team of investment professionals focused on identifying, making, and managing strategic investments. Mr. Larson formerly served on the board of regents of a university and on a state government council, which oversaw approximately $80 billion in investments.
		Education:
		Mr. Larson attended UCLA and holds a BS in Business Administration, Accounting (Cum Laude) from the University of Southern California.

 

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PROPOSAL #1: ELECTION OF DIRECTORS

 

RICHARD ROMAN

Years of Service: 21 Age: 72 Committees: • Audit Committee Independent: Yes Other directorships: None CHAIRPERSON		Specific Experience, Qualifications, Attributes, and Skills:
			•	Extensive understanding of Company organization through previous tenure as the Company’s President and CEO
			•	Deep experience in corporate finance, insurance and risk management, mergers and acquisitions, capital markets, government regulations, and employee benefits
			•	Significant expertise in manufacturing operations, budgeting, planning, strategy, communications, and regulatory issues
		Board of Director Tenure:
		Richard Roman has been a director of the Company since January 2003 and the Chairperson of the Board since January 2013.
		Business Experience:
		Mr. Roman served as the Company’s CEO from March 2010 until December 2012 and as the Company’s President from October 2010 until December 2012. Previously, Mr. Roman was the President of Columbia Ventures Corporation, a private investment company which historically has focused principally on the international metals and telecommunications industries. Prior to joining Columbia Ventures Corporation in 1992, Mr. Roman was a partner at Coopers & Lybrand, an independent public accounting firm.
		Education:
		Mr. Roman holds a BA in History and Economics from Grinnell College and an MBA from the University of Chicago.

 

CONTINUING DIRECTORS

MICHAEL FRANSON

Years of Service: 19 Age: 69 Committees: • Audit Committee • Compensation Committee - Chairperson Independent: Yes Other directorships: None LEAD DIRECTOR		Specific Experience, Qualifications, Attributes, and Skills:
			•	Significant management and finance experience gained through senior leadership positions
			•	Extensive experience with merger and acquisition transactions
			•	Expertise in information technology
			•	Deep understanding of corporate finance including investment banking, financial analysis, capital fundraising, and financial advisory services
		Board of Director Tenure:
		Michael Franson has been a director of the Company since August 2016. Mr. Franson previously served on the Board from 2001 until 2005, and again from 2007 until 2014.
		Business Experience:
		Mr. Franson has served as an independent consultant advising clients on mergers and acquisitions and strategic financial matters since July 2016 and as a Senior Advisor for Harrison Co., a boutique investment banking firm, since 2021. From 2014 to 2016, Mr. Franson was Managing Director and Global Head of Technology M&A at KPMG Corporate Finance LLC. From 2005 to 2014, Mr. Franson was a co-founder and President of St. Charles Capital LLC, an investment banking firm focused on mergers and acquisitions, raising private capital, and providing financial advisory services for middle-market companies across the United States. From 2000 to 2005, Mr. Franson was a Managing Director at the Wallach Company, which was subsequently sold to KeyCorp, the parent of KeyBanc Capital Markets.
		Education:
		Mr. Franson holds a BS in Marketing from California State University at Chico and an MBA in Finance from the University of Oregon, Charles H. Lundquist College of Business.

 

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PROPOSAL #1: ELECTION OF DIRECTORS

 

IRMA LOCKRIDGE

Years of Service: 1 Age: 51 Committees: • Compensation Committee • Nominating and Governance Committee Independent: Yes Other directorships: Trinity Capital (NASDAQ: TRIN)		Specific Experience, Qualifications, Attributes, and Skills:
			•	Extensive experience in human resources, talent management, organizational design, and executive compensation
			•	Strong experience in strategy development, systems, and corporate communication
			•	Deep expertise in leadership development, succession planning, fostering corporate culture, and diversity, equity, and inclusion
			•	Broad experience in financial management, information technology systems, cybersecurity, and manufacturing processes
		Board of Director Tenure:
		Irma Lockridge has been a director of the Company since February 2023.
		Business Experience:
		Ms. Lockridge has served as the Chief People and Systems Officer at CoorsTek, a global engineered ceramics manufacturer, since April 2016. Ms. Lockridge’s responsibilities include leading the human resources function, corporate communications, and information systems. Prior to CoorsTek, Ms. Lockridge served as senior vice president of human resources in several businesses including Newell Brands, Western Union, TeleTech, and Colorado Casualty/Liberty Mutual Insurance. Ms. Lockridge has previous experience on both publicly traded and private company boards, and currently serves on the Board of Directors of Trinity Capital.
		Education:
		Ms. Lockridge holds a BA in Management from the Wharton Business School at the University of Pennsylvania and has attended several leadership academies at the Harvard Business School.

 

SCOTT MONTROSS

Years of Service: 11 Age: 59 Committees: None Independent: No Other directorships: None		Specific Experience, Qualifications, Attributes, and Skills:
			•	Extensive commercial and operational experience in the steel industry through various executive positions and his current tenure as the Company’s President and CEO
			•	In-depth understanding of industry manufacturing, critical infrastructure, product design and development, and supply chain logistics
			•	Significant management and finance experience including corporate reporting, accounting, controls, and mergers and acquisitions
		Board of Director Tenure:
		Scott Montross has been a director of the Company since January 2013.
		Business Experience:
		Mr. Montross has served as President and CEO of the Company since January 2013. Mr. Montross joined the Company in May 2011 and served as the Company’s Executive Vice President and Chief Operating Officer until December 2012. Prior to joining the Company, Mr. Montross spent a total of 24 years in the steel industry. Mr. Montross served as Executive Vice President, Flat Products Group for EVRAZ North America’s Oregon Steel Division from 2010 to 2011, as Vice President and General Manager of EVRAZ North America from 2007 to 2010, as Vice President of Marketing and Sales for Oregon Steel Mills, Inc. from 2003 to 2007, and as Vice President of Marketing and Sales for National Steel Corporation from 2002 to 2003.
		Education:
		Mr. Montross holds a BA in Liberal Arts from Colgate University.

 

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Years of Service: 5 Age: 65 Committees: • Compensation Committee • Environmental and Social Governance Committee • Nominating and Governance Committee - Chairperson Independent: Yes Other directorships: None		Specific Experience, Qualifications, Attributes, and Skills:
			•	Extensive understanding of the steel manufacturing industry
			•	Broad experience with human capital, operations, and governance issues gained through hands-on leadership
			•	Significant expertise in manufacturing, product design and development, supply chain, and logistics
		Board of Director Tenure:
		John Paschal has been a director of the Company since August 2019.
		Business Experience:
		Mr. Paschal was the President of the Temtco Steel Division of Kloeckner Metals Corporation until his retirement in December 2020. Mr. Paschal and his late uncle, Bill Taylor of Taylor Machine Works, co-founded Temtco Steel in 1979 with an emphasis on high-strength steel and value-added services. Temtco Steel was sold to Kloeckner Metals in 2008.
		Education:
		Mr. Paschal holds a BS in Business Administration from Mississippi State University.

 

BOARD COMPOSITION

The Company’s Corporate Governance Principles specify that the criteria used by the Nominating and Governance Committee in the selection, review, and evaluation of possible candidates for vacancies on the Board of Directors should include factors relating to whether the candidate would meet the definition of “independent” as well as skills, occupation, and experience in the context of the needs of the Board. All candidates for election to the Board must be individuals of character, integrity, and honesty. The Company does not have a formal policy with respect to the consideration of diversity in identifying director candidates; however, the Nominating and Governance Committee Charter includes diversity as one of several criteria in recommending and reviewing a director nominee candidate. From time to time, the Nominating and Governance Committee has employed a third party to help identify or screen prospective directors and may continue to do so at its discretion.

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PROPOSAL #1: ELECTION OF DIRECTORS

The Company believes that, in addition to diversity of personal characteristics and experiences, diversity of service tenures on the Board of Directors also facilitates effective Board oversight. Directors with many years of service to Northwest Pipe Company provide the Board with a deep knowledge of the Company, while newer directors lend fresh perspectives.

Board Diversity Matrix

The following chart summarizes certain self-identified personal characteristics of Northwest Pipe Company directors, in accordance with Nasdaq listing Rule 5605(f). The chart only includes information regarding (1) directors nominated for reelection at the Annual Meeting and (2) directors continuing in office. Each term used in the table has the definition provided in the rule and related instructions. To see the Company’s Board Diversity Matrix as of April 27, 2023, please see the Company’s proxy statement filed with the SEC on April 27, 2023.

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PROPOSAL #1: ELECTION OF DIRECTORS

DIRECTOR COMPENSATION

The Compensation Committee is responsible for recommending to the Board of Directors the level and form of compensation and benefits for directors. Mr. Montross, as a member of the Board who is also an employee, does not receive additional compensation for serving as director. In June 2023, the Compensation Committee, with the assistance of management, considered broad market-based survey data and recommended that certain nonemployee director compensation elements be increased.

For nonemployee directors, the Compensation Committee has approved the following director compensation:

In addition, each nonemployee director receives an annual award of $75,000 payable solely in shares of the Company’s Common Stock pursuant to the Company’s equity incentive plan. The members of the Board of Directors are also reimbursed for travel expenses incurred in attending board meetings and out-of-pocket expenses related to board education.

DIRECTOR COMPENSATION TABLE

The following table reflects compensation earned by the directors for the year ended December 31, 2023, with the exception of Mr. Montross, CEO, whose compensation is included in the Summary Compensation table on page 41.

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PROPOSAL #2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

PROPOSAL #2: ADVISORY VOTE ON EXECUTIVE COMPENSATION

YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.

In accordance with Section 14A of the Exchange Act, the Board of Directors is asking shareholders to approve an advisory resolution on executive compensation. The advisory vote is a non-binding vote on the compensation of the Named Executive Officers. The vote is not intended to address any specific item of compensation, but rather the overall compensation of the Named Executive Officers and the philosophy, policies, and practices described in this Proxy Statement. The text of the resolution is as follows:

“RESOLVED, that the shareholders of Northwest Pipe Company approve, on an advisory basis, the compensation paid to the Named Executive Officers, as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders pursuant to the executive compensation disclosure rules of the SEC, including the Executive Compensation Discussion and Analysis, compensation tables, and narrative disclosure.”

The Company urges you to read the disclosure under “Executive Compensation Discussion and Analysis” below which discusses how the Company’s compensation policies and procedures implement its compensation philosophy. You should also read the Summary Compensation table and other related compensation tables and narrative disclosure which provide additional details about the compensation of the Named Executive Officers for 2023. The Company has designed its executive compensation structure to attract, retain, and motivate executives who can accomplish the Company’s business strategy, and whose interests are aligned with those of the Company’s shareholders. The Company believes that its executive compensation program does not encourage excessive and unnecessary risk-taking by the executives but, rather, encourages the executives to remain focused on both the short-term and long-term operational and financial goals of the Company.

While the Company intends to carefully consider the voting results of this proposal, the final vote is advisory in nature and therefore not binding on the Company, its Board of Directors, or the Compensation Committee.

The Company currently holds its advisory vote on executive compensation annually. Accordingly, the next advisory vote on executive compensation will be held at the 2025 Annual Meeting of Shareholders.

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

This compensation discussion and analysis provides information about the Company’s compensation program for its Named Executive Officers: