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Key Features of Our Compensation Programs
Over the course of the past several years, the Compensation Committee, in conjunction with senior management, improved the alignment of our
compensation programs with the interests of our shareholders. In addition, the Committee modified or eliminated certain components of our
compensation programs to better align the programs with prevailing market practice. The following are highlights of our compensation programs,
including our emphasis on pay commensurate with performance and actions taken to align aspects of our programs with evolving
market standards.
What We Do What We Don't Do
We pay for performance. A significant portion of the compensation of
our NEOs is directly linked to the Company’s performance, as demonstrated by
the historical payouts related to our annual and long-term incentive plans. (see
page 40 for compensation breakdown)
We require stock ownership. Our stock ownership guidelines require
each of the Company Officers to hold Company stock with a value linked to a
multiple of their respective salaries and to retain all SCI stock acquired from
grants of restricted stock and stock options (net of acquisition and tax costs and
expenses) until stock ownership guidelines are met.
We have claw-back provisions. Our claw-back provisions may be
triggered in certain circumstances. If triggered, the provisions allow the Company
to recoup annual performance-based incentives, stock options, restricted stock,
and performance units. (see page 46 for further details)
We seek independent advice. We engage independent consultants
to review executive compensation and provide advice to the
Compensation Committee.
We have an ongoing shareholder outreach program. As part of
our commitment to effective corporate governance practices, we regularly engage
with shareholders. We specifically discuss executive compensation along with
other important governance topics regularly as part of our outreach program. In
2024, we engaged with shareholders representing approximately 60% of the
Company's common stock as part of our Proxy Outreach program. (see page 8
for further details)
We do not allow tax gross-ups.
We do not provide tax gross-ups in our
compensation programs, and we do not
have provisions in our executive
employment agreements that provide for
tax gross-ups in the event of a change of
control of the Company.
We do not allow hedging or
pledging. Our policies prohibit Officers
and Directors from hedging or pledging
their SCI stock ownership.
We do not allow the repricing
of stock options. Our policies
prohibit subsequent alterations of
stock option pricing without
shareholder approval.
Starting with our 2022 grants,
we do not provide
single-trigger equity vesting
upon a change-in-control.
Consideration of 2024 “Say-on-Pay” Vote
At our Annual Meeting of shareholders held on May 7, 2024, 83.2% of the shares voted were in favor of the proposal to approve NEO compensation
(“say-on-pay” vote). The Compensation Committee believes this indicates a substantial majority of our shareholders are satisfied with our
executive compensation policies and decisions, and that our executive compensation program effectively aligns the interests of our NEOs with the
interests of our shareholders. In early 2024, we engaged with shareholders representing approximately 60% of the Company’s common stock
prior to our Annual Shareholder Meeting. Through our ongoing shareholder outreach efforts each year, we hope to better understand the
viewpoints of our shareholders and are able to explain how our decisions align with our strategic goals.
In May 2023, we disclosed that at our 2023 annual meeting, shareholders voted in favor of holding annual say-on-pay votes. In accordance with
this vote, the Company will hold say-on-pay votes annually, until the next required vote on the frequency of shareholder votes on executive
compensation, which in accordance with applicable law, is scheduled to occur at the 2029 annual meeting.
Compensation Philosophy and Process
The Company’s compensation philosophy is to align executive compensation with the performance of the Company and the individual by using
several compensation components for our executives.
Our overall compensation philosophy provides targeted direct compensation opportunities within a competitive range of target pay levels among
general industry companies of comparable size and scope (see the “Peer Comparator Group” in Annex B in this Proxy Statement).
Incentive programs provide opportunities to exceed target compensation levels through annual and long-term incentives paid in cash and stock.
However, if performance targets are not met, the resulting performance-based award payouts will be below target levels. We believe these target
levels of direct compensation are appropriate to motivate, reward, and retain our executives, each of whom has leadership talents and expertise
that make them attractive to other companies. When making annual compensation decisions, the Compensation Committee reviews each NEO’s
total compensation, as well as the compensation components, for reasonableness and comparability to market levels and the prior
year’s compensation.
Executive Compensation
2025 Proxy Statement 39