Other definitive proxy statements



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UNITED STATES




SECURITIES AND EXCHANGE COMMISSION




Washington, D.C. 20549




















SCHEDULE 14A INFORMATION




Proxy Statement Pursuant to Section 14(a) of the




Securities Exchange Act of 1934




(Amendment No.  )









































Filed by the Registrant







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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 Pursuant to §240.14a-12




image_01a.jpg



Trinity Industries, Inc.




(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 the appropriate box):







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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11




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image_11a.jpg




14221 N. Dallas Parkway, Suite 1100




Dallas, Texas 75254



www.trin.net





NOTICE OF ANNUAL MEETING OF STOCKHOLDERS




























































































To Be Held on May 3, 2021





TO: Trinity Industries, Inc. Stockholders:





The 2021 Annual Meeting of Stockholders of Trinity Industries, Inc. will be held at 14221 N. Dallas Parkway, Dallas, Texas 75254, on Monday, May 3, 2021, at 8:30 a.m., Central Daylight Time.





At the meeting, the stockholders will act on the following matters:






(1)



Election of the eight nominees named in the attached proxy statement as directors;






(2)



Advisory vote on named executive officer compensation;






(3)



Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021; and






(4)



Any other matters that may properly come before the meeting.





All stockholders of record at the close of business on March 12, 2021, are entitled to vote at the meeting or any postponement or adjournment of the meeting. A list of the stockholders is available at the Company’s offices in Dallas, Texas.











































By Order of the Board of Directors




signature72a.jpg




Jared S. Richardson




Vice President and Secretary




April 1, 2021





YOUR VOTE IS IMPORTANT!




Please vote as promptly as possible by using the internet or telephone or by signing, dating, and returning the enclosed proxy card to the address listed on the card.




IMPORTANT NOTICE!




Due to concerns associated with COVID-19 (also known as coronavirus), any stockholders attending the Annual Meeting will be subject to additional screening procedures. See page 3 for additional information.




Important Notice Regarding the Availability of Proxy Materials for the




Annual Meeting of Stockholders to be Held on May 3, 2021:




This Proxy Statement and the Annual Report to Stockholders for the fiscal year ended December 31, 2020, are available for viewing, printing, and downloading at


https://materials.proxyvote.com/896522


.
















"Delivering Goods for the Good of All"


























Table of Contents
























































































































































































































































Page



Proxy Statement Summary








Proxy Statement








Corporate Governance








Independence of Directors








Board Leadership Structure








Board Committees








Board’s Role in Risk Oversight








Risk Assessment of Compensation Policies and Practices








Compensation Committee Interlocks and Insider Participation








Communications with Directors








Commitment to Sustainability








Board Diversity






Proposal 1 - Election of Directors








Nominees








Proposal 2 - Advisory Vote to Approve Named Executive Officer Compensation








Proposal 3 - Ratification of the Appointment of Ernst & Young LLP








Fees of Independent Registered Public Accounting Firm for Fiscal Years 2020 and 2019








Report of the Audit Committee








Executive Compensation








Compensation Discussion and Analysis








Human Resources Committee Report








Compensation of Executives








Summary Compensation Table








Grants of Plan-Based Awards








Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table








Outstanding Equity Awards at Year-End








Option Exercises and Stock Vested in 2020








Pension Benefits








Nonqualified Deferred Compensation








Deferred Compensation Discussion








Potential Payments Upon Termination or Change in Control








Director Compensation








Director Compensation Discussion








CEO Pay Ratio








Transactions with Related Persons








Security Ownership








Security Ownership of Certain Beneficial Owners and Management








Additional Information








Stockholder Proposals for the 2022 Proxy Statement








Director Nominations or Other Business for Presentation at the 2022 Annual Meeting








Report on Form 10-K








Other Business








Appendix - Reconciliations of Non-GAAP Measures







A-



1






















PROXY STATEMENT SUMMARY





PROXY STATEMENT SUMMARY




This summary highlights information contained in this Proxy Statement. It does not contain all information you should consider, and you should read the entire Proxy Statement carefully before voting.




Annual Meeting of Stockholders






























































Time and Date:




8:30 a.m., Central Daylight Time, May 3, 2021







Place:




14221 N. Dallas Parkway, Dallas, Texas 75254







Record Date:




March 12, 2021







Voting:




Stockholders as of the record date are entitled to vote







Agenda and Voting Recommendations































































































































Item




Description





Board Recommendation





Page





1




Election of Directors





FOR each nominee









2




Advisory vote to approve named executive officer compensation





FOR









3




Ratification of Ernst & Young LLP as independent auditors for 2021





FOR










Director Nominees




The following table provides summary information about each nominee for director. Each director is elected annually by a majority of votes cast.







































































Nominee/Age



Principal Occupation



Committees



E. Jean Savage, 57



Chief Executive Officer and President,


Trinity Industries, Inc.



None



William P. Ainsworth, 64



Retired Group President of Energy and Transportation, Caterpillar, Inc.



Finance and Governance



Brandon B. Boze, 40



President, ValueAct Capital



Finance and HR



John J. Diez, 50



President, Fleet Management Solutions,


Ryder System, Inc.



Audit, Finance, and Governance



Leldon E. Echols, 65



Non-Executive Chairman, Trinity Industries, Inc.



Audit, Finance, Governance, and HR



Tyrone M. Jordan, 59



Retired President and Chief Operating Officer,


DURA Automotive Systems



Audit and HR



S. Todd Maclin, 64



Retired Chairman, Chase Commercial and Consumer Banking, JPMorgan Chase & Co.



Audit and HR



Dunia A. Shive, 60



Former Chief Executive Officer and President, Belo Corp.



Audit, Governance, and Finance










































































Trinity Industries, Inc.






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2021 Proxy Statement












PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS





Trinity Industries, Inc.




PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS




To Be Held on May 3, 2021




14221 N. Dallas Parkway




Dallas, Texas 75254




www.trin.net




This Proxy Statement is being mailed on or about April 1, 2021, to the stockholders of Trinity Industries, Inc. (the “Company”) in connection with the solicitation of proxies by the Company's Board of Directors to be voted at the Annual Meeting of Stockholders to be held at 14221 N. Dallas Parkway, Dallas, Texas, on Monday, May 3, 2021, at 8:30 a.m., Central Daylight Time (the “Annual Meeting”), or at any postponement or adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The Company’s mailing address is 14221 N. Dallas Parkway, Suite 1100, Dallas, Texas 75254.




You may vote in person by attending the meeting, by completing and returning a proxy by mail, or by using the internet or telephone. To vote your proxy by mail, mark your vote on the enclosed proxy card, then follow the instructions on the card. To vote your proxy using the internet or telephone, see the instructions on the proxy form and have the proxy form available when you access the internet website or place your telephone call.




The named proxies will vote your shares according to your directions. If you sign and return your proxy but do not make any of the selections, the named proxies will vote your shares: (i) FOR election of the eight nominees for directors as set forth in this Proxy Statement, (ii) FOR approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in these materials, and (iii) FOR ratification of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021. The proxy may be revoked at any time before it is exercised by filing with the Company a written revocation addressed to the Corporate Secretary, by executing a proxy bearing a later date, or by attending the Annual Meeting and voting in person.




The cost of soliciting proxies will be borne by the Company. In addition to the use of postal services or the internet, proxies may be solicited by directors, officers, and regular employees of the Company (none of whom will receive any additional compensation for any assistance they may provide in the solicitation of proxies) in person or by telephone. The Company has hired Georgeson, Inc. to assist in the solicitation of proxies at an estimated cost of $12,500 plus expenses.




The outstanding voting securities of the Company consist of shares of common stock, $0.01 par value per share (“Common Stock”). The record date for the determination of the stockholders entitled to notice of and to vote at the Annual Meeting, or any postponement or adjournment thereof, has been established by the Board of Directors as the close of business on March 12, 2021. At that date, there were outstanding and entitled to vote 110,710,948 shares of Common Stock.




The presence, in person or by proxy, of the holders of record of a majority of the outstanding shares entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting, but if a quorum should not be present, the meeting may be adjourned from time to time until a quorum is obtained. A holder of Common Stock will be entitled to one vote per share on each matter properly brought before the meeting. Cumulative voting is not permitted in the election of directors.









































































Trinity Industries, Inc.






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2021 Proxy Statement










PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS










































































































































Item





Description





Votes Required for Approval





Effect of Withheld Vote/Abstention





1





Election of Directors





Affirmative vote of a majority of the votes cast for the election of directors at the Annual Meeting





An incumbent director nominee who receives a greater number of votes “withheld” than “for” is required to tender his or her resignation, which will be accepted or rejected by the Board as more fully described in “Election of Directors.” An abstention will not count as a vote cast and therefore will not affect the outcome of the vote.





2





Advisory vote to approve named executive officer compensation





Affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the subject matter





An abstention will effectively count as a vote cast against this proposal.





3





Ratification of Ernst & Young LLP as independent auditors for 2021





Affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote on the subject matter





An abstention will effectively count as a vote cast against this proposal.






Votes may be cast in favor of or withheld with respect to all of the director nominees, or any of them individually. Shares of a stockholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum. Broker non-votes on any matter, as to which the broker has indicated on the proxy that it does not have discretionary authority to vote, will be treated as votes not cast or as shares not entitled to vote with respect to that matter and will not affect the outcome of the vote. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one matter.




Important Notice Regarding Attendance at the Annual Meeting




The Company intends to hold the Annual Meeting in person; however, due to concerns associated with COVID-19 (also known as coronavirus), the Company is taking steps to protect employees and visitors and to minimize the risk of disruption to its business. Accordingly, any stockholders attending the Annual Meeting will be subject to additional screening procedures. Attendees must report to security personnel, provide proper identification, and sign in upon arrival. Security will then screen all attendees prior to admission to the Annual Meeting. Security personnel will ask attendees about potential exposure to confirmed cases of COVID-19 and related questions. Any individual who responds in the affirmative to a pre-screening question, or refuses to respond, will be denied entry. Any individual who exhibits symptoms of COVID-19 during the Annual Meeting (i.e. cough, flu-like symptoms, or shortness of breath) will be promptly removed from the meeting. The Company is sensitive to recommendations that public health officials may issue in light of the evolving situation. As a result, the Company may impose additional procedures or limitations on meeting attendees (beyond those described above) or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). The Company will announce any such updates.



































































Trinity Industries, Inc.






3






2021 Proxy Statement












CORPORATE GOVERNANCE





CORPORATE GOVERNANCE




E. Jean Savage, then a member of the Board of Directors, was appointed Chief Executive Officer and President of the Company, effective February 17, 2020. Upon accepting the Company's offer of employment, Ms. Savage resigned from her membership on the Company's Audit Committee, Finance and Risk Committee, and Human Resources Committee.




The business affairs of the Company are managed under the direction of the Board of Directors (also referred to in this proxy statement as the “Board”) in accordance with the General Corporation Law of the State of Delaware and the Company’s Certificate of Incorporation and Bylaws. The role of the Board of Directors is to oversee the management of the Company for the benefit of the stockholders. This responsibility includes monitoring senior management’s conduct of the Company’s business operations and affairs; reviewing and approving the Company’s financial objectives, strategies, and plans; risk management oversight; evaluating the performance of the Chief Executive Officer and other executive officers; and overseeing the Company’s policies and procedures regarding corporate governance, legal compliance, ethical conduct, and maintenance of financial and accounting controls. The Board of Directors includes an independent Chairman and diverse and independent Board members who help ensure that the Company's business strategies and programs are aligned with stakeholder interests.




The Board first adopted Corporate Governance Principles in 1998, which are reviewed annually by the Corporate Governance and Directors Nominating Committee and were last amended in December 2020. The Company has a long-standing Code of Business Conduct and Ethics, which is applicable to all employees of the Company, including the Chief Executive Officer, the Chief Financial Officer, principal accounting officer, and controller, as well as the Board. The Company intends to post any amendments or waivers for its Code of Business Conduct and Ethics to the Company's website at


www.trin.net


to the extent applicable to an executive officer, principal accounting officer, controller, or director of the Company. The Corporate Governance Principles and the Code of Business Conduct and Ethics are available on the Company’s web site at


www.trin.net


under the heading “Investor Relations — Governance — Governance Documents.”




The directors hold regular and special meetings and spend such time on the affairs of the Company as their duties require. During 2020, the Board of Directors held twelve meetings. The Board meets regularly in non-management executive sessions. The Board has elected Leldon E. Echols as non-executive Chairman of the Board. In this role, Mr. Echols chairs the non-management executive sessions. In 2020, all directors of the Company attended at least 75% of the meetings of the Board of Directors and the committees on which they served. It is Company policy that each director is expected to attend the Annual Meeting. All of the directors then serving were in attendance at the 2020 Annual Meeting.




















Independence of Directors






The Board of Directors makes all determinations with respect to director independence in accordance with the New York Stock Exchange (“NYSE”) listing standards and the rules and regulations promulgated by the Securities and Exchange Commission (“SEC”). In addition, the Board of Directors established certain guidelines to assist it in making any such determinations regarding director independence (the “Independence Guidelines”), which are available on the Company’s website at


www.trin.net


under the heading “Investor Relations — Governance — Governance Documents — Categorical Standards of Director Independence.” The Independence Guidelines set forth commercial and charitable relationships that may not rise to the level of material relationships that would impair a director’s independence as set forth in the NYSE listing standards and SEC rules and regulations. The determination of whether such relationships as described in the Independence Guidelines actually impair a director’s independence is made by the Board on a case-by-case basis.




The Board undertook its annual review of director independence and considered transactions and relationships between each director, or any member of his or her immediate family, and the Company and its subsidiaries and affiliates. In making its determination, the Board applied the NYSE listing standards and SEC rules and regulations together with the Independence Guidelines. In making such determinations, the Board, amongst other things, considered the transactions described below.




Brandon B. Boze is a Partner and the President of ValueAct Capital, the Company's largest stockholder. ValueAct Capital and its affiliates own approximately 20.9% of the Company's outstanding shares of Common Stock. Mr. Boze qualifies as independent under the NYSE listing standards and SEC rules and regulations, and the Board does not believe that ValueAct Capital's ownership level impairs Mr. Boze's independence.




John J. Diez is President of Fleet Management Solutions for Ryder System, Inc. (“Ryder”). The Company rents equipment from, and provides transportation services to, subsidiaries of Ryder from time to time. The Company in prior years sold construction products to subsidiaries of Ryder as well. These transactions involved less than 2% of the consolidated gross revenues of each of Ryder and the Company for each fiscal year since January 1, 2018. The amounts involved in these



































































Trinity Industries, Inc.






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2021 Proxy Statement










CORPORATE GOVERNANCE





transactions for 2018, 2019, and 2020 were, respectively, $313,330, $20,189, and $11,017. These transactions were conducted in the ordinary course of business, at arms-length.




As a result of its review, the Board affirmatively determined that the following directors are independent of the Company and its management under the standards set forth in the listing standards of the NYSE and the SEC rules and regulations: John L. Adams, William P. Ainsworth, Brandon B. Boze, John J. Diez, Leldon E. Echols, Tyrone M. Jordan, S. Todd Maclin, Charles W. Matthews, and Dunia A. Shive. Although she was considered to be independent prior to accepting the Company's offer of employment, the Board determined that E. Jean Savage is not independent because of her employment by the Company. Mr. Adams and Mr. Matthews have reached the mandatory retirement age and are therefore not standing for re-election.




















Board Leadership Structure






Mr. Echols serves as the independent, non-executive Chairman of the Board. As stated in the Corporate Governance Principles, the Board believes that the decision as to whether the offices of Chairman and Chief Executive Officer should be combined or separated is the responsibility of the Board. The members of the Board possess experience and unique knowledge of the challenges and opportunities the Company faces. They are, therefore, in the best position to evaluate the current and future needs of the Company and to judge how the capabilities of the directors and senior managers can be most effectively organized to meet those needs. The separation of the roles of Chairman and Chief Executive Officer allows Ms. Savage to concentrate her focus on leading the Company’s business strategies, operations, and other corporate activities, while Mr. Echols provides independent oversight and direction and presides at meetings of the Board of Directors. For these reasons, the Board believes that this leadership structure is effective for the Company.




















Board Committees






The standing committees of the Board of Directors are the Audit Committee, Corporate Governance and Directors Nominating Committee, Finance and Risk Committee, and Human Resources Committee. Each of the committees is governed by a charter, current copies of which are available on the Company’s website at


www.trin.net


under the heading “Investor Relations — Governance — Governance Documents.” Ms. Savage, Chief Executive Officer and President (collectively referred to as the “CEO”) of the Company, does not serve on any Board committee. Director membership of the committees is identified below.












































































































Director



Audit Committee



Corporate Governance and Directors Nominating Committee



Finance and Risk Committee



Human Resources Committee



John L. Adams




*



*




William P. Ainsworth




*



*




Brandon B. Boze





C



*



John J. Diez



*



C



*




Leldon E. Echols



*



*



*



C



Tyrone M. Jordan



*





*



S. Todd Maclin



*





*



Charles W. Matthews




*




*



Dunia A. Shive



C



*



*






* - Member




C - Chair




Audit Committee




The Audit Committee’s function is to oversee, on behalf of the Board, (i) the integrity of the Company’s financial statements and related disclosures; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the qualifications, independence, and performance of the Company’s independent auditing firm; (iv) the performance of the Company’s internal audit function; (v) the Company’s internal accounting and disclosure control systems and practices; (vi) the Company’s procedures for monitoring compliance with its Code of Business Conduct and Ethics; and (vii) the Company’s policies and procedures with respect to risk assessment, management, and mitigation. In carrying out its function, the Audit Committee (a) reviews with management, the chief audit executive, and the independent auditors, the Company’s financial statements, the accounting principles applied in their preparation, the scope of the audit, any comments made by the independent auditors on the financial condition of the Company and its accounting controls and procedures; (b) reviews with management its processes and policies related to risk assessment, management, and



































































Trinity Industries, Inc.






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2021 Proxy Statement










CORPORATE GOVERNANCE





mitigation, compliance with corporate policies, compliance programs, and internal controls; and (c) performs such other matters as the Audit Committee deems appropriate. The Audit Committee also typically receives reports on information technology and cybersecurity multiple times each year.




The Audit Committee pre-approves all auditing and all allowable non-audit services provided to the Company by the independent auditors. The Audit Committee selects and retains the independent auditors for the Company, subject to stockholder ratification, and approves audit fees. The Audit Committee met seven times during 2020. The Board of Directors has determined that all members of the Audit Committee are “independent” as defined by the rules of the SEC and the listing standards of the NYSE. The Board has determined that each member of the Audit Committee qualifies as an audit committee financial expert within the meaning of SEC regulations.




Corporate Governance and Directors Nominating Committee




The functions of the Corporate Governance and Directors Nominating Committee (the “Governance Committee”) are to identify and recommend to the Board individuals qualified to be nominated for election to the Board; review the qualifications of the members of each committee (including the independence of directors) to ensure that each committee’s membership meets applicable criteria established by the SEC and NYSE; recommend to the Board the members and Chairperson for each Board committee; periodically review and assess the Company’s Corporate Governance Principles and the Company’s Code of Business Conduct and Ethics and make recommendations for changes thereto to the Board; periodically review the Company’s orientation program for new directors and the Company’s practices for continuing education of existing directors; annually review director compensation and benefits and make recommendations to the Board regarding director compensation and benefits; review, approve, and ratify all transactions with related persons that are required to be disclosed under the rules of the SEC; annually conduct an individual director performance review of each incumbent director; and oversee the annual self-evaluation of the performance of the Board. The Governance Committee also oversees the Company's Corporate Social Responsibility Report. Each of the members of the Governance Committee is an independent director under the NYSE listing standards. The Governance Committee met three times during 2020.




In performing its annual review of director compensation, the Governance Committee utilizes independent compensation consultants from time to time to assist in making its recommendations to the Board. The Governance Committee reviewed the director compensation in 2020, considered benchmarking information provided by Meridian Compensation Partners, LLC (the “Compensation Consultant”), and established director compensation as discussed in “Director Compensation.”




The Governance Committee will consider director candidates recommended to it by stockholders. In considering candidates submitted by stockholders, the Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the Governance Committee, a stockholder must submit the recommendation in writing and must include the following information:







the name of the stockholder, evidence of the person’s ownership of Company stock, including the number of shares owned and the length of time of ownership, and a description of all arrangements or understandings regarding the submittal between the stockholder and the recommended candidate; and







the name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, and the person’s consent to be a director if selected by the Governance Committee, nominated by the Board, and elected by the stockholders.




The stockholder recommendation and information described above must be sent to the Corporate Secretary at 14221 N. Dallas Parkway, Suite 1100, Dallas, Texas 75254 and must be received by the Corporate Secretary not less than 120 days prior to the anniversary date of the date the Company’s proxy statement was released in connection with the previous year’s Annual Meeting of Stockholders.




The Governance Committee believes that the qualifications for serving as a director of the Company are that a nominee demonstrate depth of experience at the policy-making level in business, government, or education; possess the ability to make a meaningful contribution to the Board’s oversight of the business and affairs of the Company and a willingness to exercise independent judgment; and have an impeccable reputation for honest and ethical conduct in both professional and personal activities. In addition, the Governance Committee examines a candidate’s time availability, the candidate’s ability to make analytical and probing inquiries, and financial independence to ensure he or she will not be financially dependent on director compensation.




The Governance Committee periodically identifies potential nominees by asking current directors and executive officers for their recommendations of persons meeting the criteria described above who might be available to serve on the Board.



































































Trinity Industries, Inc.






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CORPORATE GOVERNANCE





The Governance Committee may also engage firms that specialize in identifying director candidates, which it did in 2020. As described above, the Governance Committee will also consider candidates recommended by stockholders.




Once a person has been identified as a potential candidate, the Governance Committee makes an initial determination regarding the need for additional Board members to fill vacancies or expand the size of the Board. If the Governance Committee determines that additional consideration is warranted, the Governance Committee will review such information and conduct interviews as it deems necessary to fully evaluate each director candidate. In addition to the qualifications of a candidate, the Governance Committee will consider such relevant factors as it deems appropriate, including the current composition of the Board, the evaluations of other prospective nominees, and the need for any required expertise on the Board or one of its committees. The Governance Committee considers potential candidates in light of the skills, experience, and attributes (i) possessed by current directors and (ii) that the Board has identified as important for new directors to possess. The Governance Committee also contemplates multiple dynamics that promote and advance diversity among its members. Although the Governance Committee does not have a formal diversity policy, the Governance Committee considers a number of factors regarding diversity of personal and professional backgrounds (both domestic and international), gender, national origins, specialized skills and acumen, and breadth of experience in industry, manufacturing, financing transactions, and business combinations. The Governance Committee’s evaluation process will not vary based on whether or not a candidate is recommended by a stockholder.




Finance and Risk Committee




The duties of the Finance and Risk Committee (the “Finance Committee”) include reviewing significant acquisitions and dispositions of businesses or assets and authorizing such transactions within limits prescribed by the Board; periodically reviewing the Company’s financial status and compliance with debt instruments; reviewing and making recommendations to the Board regarding financings and refinancings; authorizing financings and refinancings within limits prescribed by the Board; reviewing and assessing risk and litigation exposure related to the Company’s operations; monitoring and oversight responsibility for the Company's qualified retirement plans and certain related non-qualified plans; reviewing the Company's liquidity; reviewing stockholder returns including the Company's dividend and share repurchase program; and reviewing the Company’s insurance coverages. In addition, the Finance Committee periodically identifies, assesses, and reviews the business, commercial, operational, financial, and other risks associated with the Company's products and services. The Finance Committee also receives regular reports on legal, environmental, and safety matters. The Finance Committee met eight times in 2020.




Human Resources Committee




The Human Resources Committee (the “HR Committee”) makes recommendations to the independent members of the Board of Directors in its responsibilities relating to the fair and competitive compensation of the Company’s CEO. The HR Committee has been delegated authority by the Board to make compensation decisions with respect to the other named executive officers (as defined below). Each member of the HR Committee is an independent director under the NYSE listing standards, including those standards applicable specifically to members of compensation committees. The HR Committee met five times during 2020.




The HR Committee reviews management succession planning and approves awards under the Company’s incentive compensation and equity-based plans. The HR Committee annually evaluates the leadership and performance of the Company’s CEO, and recommends the CEO's compensation to the Company’s independent directors. The independent directors are responsible for approving the CEO’s compensation. The CEO provides to the HR Committee an assessment of the performance of the other named executive officers. The HR Committee also has direct access to the Company’s key leaders. The HR Committee reviews and approves compensation for the Chief Financial Officer (the “CFO”) and the other executive officers named in the “Summary Compensation Table.” The CEO, the CFO, and the other executive officers named in the “Summary Compensation Table” are referred to in this proxy statement as the “named executive officers.”




The Role of the Compensation Consultant




The HR Committee retains an independent executive compensation consultant to provide an assessment of the Company’s executive compensation programs and to perform five key tasks. The consultant (i) reviews and assists in the design of the Company’s compensation programs, (ii) provides insight into executive compensation practices used by other companies, (iii) benchmarks the Company’s executive compensation pay levels with relevant peer survey data, (iv) provides proxy disclosure information for comparator companies, and (v) provides input to the HR Committee on the risk assessment, structure, and overall competitiveness of the Company’s executive compensation programs.



































































Trinity Industries, Inc.






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2021 Proxy Statement










CORPORATE GOVERNANCE





The HR Committee retained the services of the Compensation Consultant to assist in providing an independent assessment of the executive compensation programs. Meridian Compensation Partners, LLC was the HR Committee’s sole compensation consultant in 2020 and was chosen given its (i) depth of resources, (ii) content expertise, and (iii) extensive experience. The Compensation Consultant reported directly to the HR Committee for the purposes of advising it on matters relating to 2020 executive compensation. The services of the Compensation Consultant were used only in conjunction with executive compensation matters and to provide benchmarking information regarding director compensation and compensation trends for similar companies. The Compensation Consultant was not retained by the Company for any purpose. The Compensation Consultant’s ownership structure, limited service lines, and policies and procedures are designed to ensure that the Compensation Consultant’s work for the HR Committee does not raise any conflicts of interest. The amount of fees paid in 2020 to the Compensation Consultant by the Company represented less than 1% of the Compensation Consultant’s total annual revenues for 2020. The internal policies of the Compensation Consultant prohibit its partners, consultants, and employees from engaging in conduct that could give rise to conflicts of interest and from buying, selling, and trading in the securities of client companies when that partner, consultant, or employee is providing consulting services to the client. The employees of the Compensation Consultant providing consulting services to the HR Committee have no other business or personal relationship with any member of the HR Committee or any executive officer of the Company. After a review of these factors and the considerations outlined in applicable SEC and NYSE rules, the HR Committee has concluded that the work of the Compensation Consultant has not raised any conflicts of interest and that the Compensation Consultant is independent from the Company and from management.




The HR Committee instructed the Compensation Consultant to provide analyses, insight, and benchmarking information for 2020 on the named executive officers and other key executives to determine whether the compensation packages for these executives were competitive with the market and met the Company’s objectives. The Compensation Consultant was instructed to:







review the total direct compensation (base salary, annual incentive, and long-term incentive);







help identify and confirm that the comparator companies selected by the HR Committee were appropriate; and







gather publicly-traded comparator company proxies and peer survey data to ascertain market competitive rates for the named executive officers.




The Compensation Consultant benchmarked all cash and equity components of compensation for 2020, excluding deferred compensation, and, for each position, determined certain percentile benchmarks.




The Role of Management




The CEO, the CFO, the Chief Administrative Officer, and the Chief Human Resources Officer work with the HR Committee and the Compensation Consultant to develop the framework and design the plans for all compensation components. The CEO and CFO recommend the financial performance measurements for the annual incentive awards and the long-term performance-based equity awards, subject to HR Committee approval. The CFO certifies the achievement of these financial performance measures. The HR Committee recommends the CEO's compensation to the independent directors for their approval. The CEO makes recommendations to the HR Committee on compensation for each of the other named executive officers.




The Role of the HR Committee




Throughout the year, the CEO provides the HR Committee with an ongoing assessment of the performance of the other named executive officers. These assessments provide background information for any adjustment to base salary, annual incentive, or long-term incentive. Both annual incentives and long-term incentives are established with threshold, target, and maximum payout levels.




The HR Committee realizes that benchmarking and comparing peer group proxy disclosure data require certain levels of interpretation due to the complexities associated with executive compensation plans. The HR Committee uses the benchmarking information and the peer group proxy disclosure data provided by the Compensation Consultant as general guidelines and makes adjustments to compensation levels based on what the HR Committee believes is in the best interests of the Company’s stockholders. The HR Committee uses its judgment and bases its consideration of each executive’s compensation on performance in respect to the value of the executive’s contributions to the Company, the executive’s tenure, and peer survey data that establishes the ranges against which compensation is benchmarked.



































































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CORPORATE GOVERNANCE



















Board’s Role in Risk Oversight






The Audit Committee has the responsibility to oversee the Company’s policies and procedures relating to risk assessment, management, and mitigation. The Finance Committee has the responsibility to review and assess risk exposure related to the Company’s operations, including safety, environmental, financial, contingent liabilities, and other risks that may be material to the Company, as well as the activities of management in identifying, assessing, and mitigating against business, commercial, operational, financial, and personal risks associated with the Company’s products and services. The Finance Committee accomplishes this responsibility as described at


www.trin.net


under the heading “Investor Relations - Governance - Governance Documents - Finance and Risk Committee Charter.” In addition, the Audit Committee, in its discretion, reviews the Company’s major risks and exposures, including (i) any special-purpose entities, complex financing transactions and related off-balance sheet accounting matters and (ii) legal matters that may significantly impact the Company’s financial statements or risk management.




















Risk Assessment of Compensation Policies and Practices






The Company conducts a detailed risk assessment of its compensation policies and practices (the “Compensation Policies”) for its employees, including its executive officers. Participants in the Compensation Policies risk assessment include the Company’s management, human resources group, internal audit group, Compliance and Risk Committee (which consists of senior corporate and business segment executives who meet regularly to identify and review risks and assess exposures), the Compensation Consultant, and the HR Committee.




At the request of the HR Committee, the Compensation Consultant performs a risk assessment with respect to the Compensation Policies applicable to executive officers. The Compensation Consultant did not find any excessive risk in its review of the Compensation Policies applicable to executive officers.




Also, representatives of the Company’s management, human resources group, and internal audit group review the Compensation Policies and meet to discuss and assess the likelihood and potential impact of the risk presented by the Compensation Policies and present findings to the Company’s internal Compliance and Risk Committee. The Compliance and Risk Committee considers these findings and assessments and reviews the Compensation Policies and the Compensation Consultant’s risk assessment. The Corporate Compliance and Risk Committee has concluded that the Compensation Policies are not reasonably likely to have a material adverse effect on the Company.




















Compensation Committee Interlocks and Insider Participation






Messrs. Boze, Echols, Jordan, Maclin, Matthews, and Ms. Savage served on the HR Committee during the last completed fiscal year. During the time of her service on the HR Committee, Ms. Savage was considered independent of the Company and its management under the standards set forth in the listing standards of the NYSE and the SEC rules and regulations.




None of the members of the HR Committee had ever served as an executive officer or employee of the Company or any of its subsidiaries at the time of such member's service on the HR Committee. There were no compensation committee interlocks during 2020.




















Communications with Directors






The Board has established a process to receive communications by mail from stockholders and other interested parties. Stockholders and other interested parties may contact any member of the Board, including the Chairman, Mr. Echols, or the non-management directors as a group, any Board committee or any chair of any such committee. To communicate with the Board of Directors, any individual director, or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual director or group or committee of directors by either name or title. All such correspondence should be sent “c/o Corporate Secretary” at 14221 N. Dallas Parkway, Suite 1100, Dallas, Texas 75254.




All communications received as set forth in the preceding paragraph will be opened by the office of the Corporate Secretary for the sole purpose of determining whether the contents represent a message to directors. Any contents that are not in the nature of advertising, promotions of a product or service, or offensive material will be forwarded promptly to the addressee. In the case of communications to the Board or any group or committee of directors, the Corporate Secretary will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope is addressed.









































































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CORPORATE GOVERNANCE



















Commitment to Sustainability






The Company recognizes that further integrating the key principles of sustainability, including environmental stewardship, safety and quality assurance, corporate social responsibility, governance, and diversity and inclusion, are important to enhancing long-term value. The Company strives to employ Company resources in ways that make positive contributions to its stakeholders and the communities in which it operates. As the Company pursues improvements to its products and services, it keeps in mind the environmental and societal impacts of its decisions and works to protect natural resources and the environment for the benefit of current and future generations. The Company continuously looks for ways to improve its governance practices with the goal of promoting the long-term interests of stakeholders, strengthening accountability, and inspiring trust.




Environmental Stewardship




The Company takes its commitment to reducing its own environmental impact seriously, as it recognizes climate change is a challenge facing its business, industry, and communities today. The Company is committed to contributing to a more resource-efficient economy and embedding climate change mitigation into its business strategy to help confront challenges such as energy management, fuel economy and efficiency, and materials sourcing. The Company aims to operate its business in a manner that minimizes the impact on natural resources and the environment. The Company believes railcars are a more environmentally-friendly way to fuel the North American supply chain. U.S. freight railroads produce far fewer greenhouse gas emissions than certain other modes of commercial transportation, such as trucks. The Company strives to responsibly support customers' products at each stage of the product lifecycle, including recycling the railcar through scrap and salvage at the end of its useful life.




Social Responsibility




The Company actively engages stakeholders across its environmental, health, and safety initiatives to continually improve processes and performance as it operates its businesses with a goal of zero injuries and incidents.




The Company's goal is to add value to the communities in which its employees live and work, strengthening relationships and leveraging partnerships to amplify its impact. The Company strives to attract and retain a diverse and empowered workforce. Its priorities include fostering an inclusive and collaborative workplace, promoting opportunities for professional development, improving the well-being of its employees and other stakeholders, and contributing to the communities in which the Company operates.




Workforce Talent and Diversity




The Company is committed to attracting and retaining highly skilled and diverse employees and is proud that its workforce is made up of talented people from a variety of backgrounds. This commitment to diversity as a driver of long-term success is one that the Company strives to uphold throughout the organization, including through all stages of the human resources process, from recruitment and hiring to talent retention.










The Company encourages and supports employee resource and networking groups, such as the Women of Trinity, the diversity and inclusion committee, and other employee groups, which offer educational, professional development, and community service opportunities. The Company also provides focused training, mentoring, and employee development for specialized positions, such as plant managers, engineers, accountants, and more.










Through strategies such as its employee experience survey, the employee recognition program, and a comprehensive commitment to its core values, the Company is dedicated to building a healthy, engaging workplace where employees can thrive and do their best work. The Company takes pride in maintaining an active dialogue with employees. In its U.S. facilities, for example, the Company benchmarks overall employee engagement with an annual cross-organization survey targeting metrics such as safety, job satisfaction, and more.










The Company's Mexico Corporate Social Responsibility program is part of its broader environmental stewardship and social responsibility program, which addresses stakeholders, including employees, suppliers, customers, and the local communities where we operate.























































































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CORPORATE GOVERNANCE


















Board Diversity











The following table provides information regarding the diversity of the members of the Board standing for election at the Annual Meeting.

































































































































































Gender



Director



Black



Caucasian/White



Hispanic/Latino



Other




Female



Male



William P. Ainsworth




*







*



Brandon B. Boze




*







*



John J. Diez





*






*



Leldon E. Echols




*







*



Tyrone M. Jordan



*








*



S. Todd Maclin




*







*



E. Jean Savage




*






*




Dunia A. Shive






*




*





































































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PROPOSAL 1 — ELECTION OF DIRECTORS





PROPOSAL 1 — ELECTION OF DIRECTORS




The Board of Directors currently consists of ten members, of which eight are standing for election at the Annual Meeting.




Following a recommendation from the Governance Committee, each of William P. Ainsworth, Brandon B. Boze, John J. Diez, Leldon E. Echols, Tyrone M. Jordan, S. Todd Maclin, E. Jean Savage, and Dunia A. Shive has been nominated by the Board for election at the Annual Meeting to hold office until the next Annual Meeting or the election of their respective successors. Each of them is a current member of the Board. The Board of Directors has determined that all of the director nominees other than Ms. Savage, the Company's CEO, are “independent directors.” Therefore, the Board has concluded that Ms. Savage is not independent. Mr. Adams and Mr. Matthews have reached the mandatory retirement age and are not standing for re-election.




An incumbent director nominee who receives a greater number of votes “withheld” than “for” in an uncontested election is required to tender his or her resignation for consideration by the Governance Committee and the Board (with the affected director recusing himself or herself from the deliberations). The Board will be free to accept or reject the resignation and will make its decision known publicly within 90 days of certification of the vote results. If a director’s resignation is accepted by the Board, the Board may fill the resulting vacancy.




The Board believes that each of the director nominees possesses the qualifications described at


www.trin.net


under the heading “Investor Relations - Governance - Governance Documents - Corporate Governance and Directors Nominating Committee Charter.” That is, the Board believes that each nominee possesses: (i) deep experience at the policy making level in business, government, or education; (ii) the ability to make a meaningful contribution to the Board’s oversight of the business and affairs of the Company; (iii) a willingness to exercise independent judgment; and (iv) an impeccable reputation for honest and ethical conduct in both professional and personal activities.




The information provided below is biographical information about each of the nominees, as well as a description of the experience, qualifications, attributes, or skills that led the Board to conclude that the individual should be nominated for election as a director of the Company.




















Nominees






William P. Ainsworth


, 64. Director since March 2021. Mr. Ainsworth is a member of the Finance Committee and the Governance Committee. From 2019 until his retirement in 2020, Mr. Ainsworth served as Group President of the Energy & Transportation segment for Caterpillar, Inc. (“Caterpillar”), a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. From 2017 until his appointment as Group President in 2019, Mr. Ainsworth was Senior Vice President and Strategic Advisor to Caterpillar’s executive committee and was responsible for Caterpillar’s Rail Division. From 1993 until 2019, he served as President and Chief Executive Officer of Progress Rail Services, an integrated and diversified supplier of railroad and transit products and services as well as railcar leasing. Progress Rail Services was acquired by Caterpillar in 2006, and Mr. Ainsworth was appointed a Vice President of Caterpillar at that time.




Mr. Ainsworth has extensive experience in the railcar industry, providing the Board with key skills relevant to the Company’s operations. In addition, he has extensive experience in managing a significant industrial enterprise. Mr. Ainsworth was recommended to the Board for service as a director by Ms. Savage.




Brandon B. Boze


, 40. Director since 2018. Mr. Boze is the Chair of the Finance Committee and a member of the HR Committee. Mr. Boze is a Partner and the President of ValueAct Capital, a privately-owned investment firm, and has served on the management committee at ValueAct Capital since 2018. Prior to joining ValueAct Capital in 2005, Mr. Boze was an investment banker at Lehman Brothers, focused on power utilities and technology mergers and acquisitions. Mr. Boze serves as independent board Chair of CBRE Group, Inc., a commercial real estate and investment services firm. From 2009 to 2010, he served on the board of directors of Valeant Pharmaceuticals International.




Mr. Boze has experience in finance, strategy, and mergers and acquisitions, as well as deep knowledge of our business as a Partner and President of the Company's largest stockholder. In addition, Mr. Boze is a CFA charterholder. His service on the boards of other significant companies provides the Board with additional perspective on the Company’s operations.




John J. Diez


, 50. Director since 2018. Mr. Diez is Chair of the Governance Committee and a member of the Audit Committee and the Finance Committee. Since 2019, Mr. Diez has served as the President of Fleet Management Solutions for Ryder System, Inc., a commercial fleet management and supply chain solutions company. From 2015 to 2019, he was President of Dedicated Transportation Solutions for Ryder. From 2013 to 2014, Mr. Diez was Senior Vice President of Ryder Dedicated, and from 2011 to 2013, he served as Senior Vice President of Asset Management. He served as Senior Vice President, Global Field Finance from 2008 to 2011 and as Vice President and Chief Financial Officer for the Fleet



































































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PROPOSAL 1 — ELECTION OF DIRECTORS





Management Solutions business segment from 2007 to 2008. He joined Ryder as Assistant Controller in 2002. Mr. Diez spent eight years in the audit practice of KPMG LLP prior to joining Ryder. He is a Certified Public Accountant in the state of Florida and a member of the American Institute of CPAs.




Mr. Diez has extensive experience in managing a significant industrial enterprise. In addition, he possesses important skills and experience gained through his service in public accounting. His experience in equipment leasing, logistics, and supply chain matters provides the Board with key skills relevant to the Company’s operations.




Leldon E. Echols


, 65. Director since 2007. Mr. Echols serves as non-executive Chairman of the Board, Chair of the HR Committee, and a member of the Audit Committee, the Governance Committee, and the Finance Committee. He served as Executive Vice President and Chief Financial Officer of Centex Corporation, a residential construction company, from 2000 to 2006, when he retired. Prior to joining Centex, he spent 22 years with Arthur Andersen LLP and served as Managing Partner, Audit Practice for the North Texas, Colorado, and Oklahoma Region from 1997 to 2000. Mr. Echols is a member of the American Institute of Certified Public Accountants and the Texas Society of CPAs. Mr. Echols has been engaged in private investments since 2006. He is a member of the board of directors and Chair of the audit committee of EnLink Midstream Manager, LLC, a company that owns interests in EnLink Midstream, LLC, which is engaged in the gathering, transmission, treating, processing, and marketing of natural gas, natural gas liquids, and crude oil. He is also a member of the board of directors and Chair of the audit committee of HollyFrontier Corporation, an independent petroleum refiner. From 2008 to 2014, Mr. Echols served on the boards of directors of Crosstex Energy, L.P. and Crosstex Energy, Inc., which are predecessors to certain of the EnLink entities. From 2014 to 2019, he was a member of the board of directors of EnLink Midstream GP, LLC, a company that owned interests in EnLink Midstream Partners, LP.




In addition to having gained substantial managerial experience as an executive officer of Centex, Mr. Echols possesses important skills and experience gained through his service in public accounting. His service on the boards of other significant companies provides the Board with additional perspective on the Company’s operations.










Tyrone M. Jordan


, 59. Director since 2020. Mr. Jordan is a member of the Audit Committee and the HR Committee. Mr. Jordan served as the President and Chief Operating Officer of DURA Automotive Systems, a global designer and manufacturer of automotive components, from 2015 to 2019. Mr. Jordan began his career at General Motors Company (“GM”). During his GM tenures from 1984 to 2009 and from 2014 to 2015, Mr. Jordan held numerous international operations, business development, strategy, marketing and sales, mergers and acquisitions, and product development executive positions, ultimately serving as Executive Vice President, Global Operations and Customer Experience. From 2009 to 2013, Mr. Jordan served United Technologies Corporation in prominent roles in manufacturing operations, purchasing, technology and engineering, and ultimately served as Global Senior Vice President, Operations and Supply Chain, Aerospace Systems. He is a member of the board of directors and the audit committee of Oshkosh Corporation, a leading designer, manufacturer, and marketer of access equipment, specialty vehicles, and truck bodies. He also serves on the board of directors of Cooper Tire & Rubber Company, which specializes in the design, manufacture, marketing, and sale of car, truck, motorcycle, and racing tires, and of TPI Composites, Inc., an independent manufacturer of composite wind blades for the wind energy market.










Mr. Jordan has substantial experience and expertise in leading significant industrial enterprises. His experience in operations and supply chain matters provides the Board with key skills relevant to the Company. In addition, his service on the boards of other significant companies provides the Board with additional perspectives on the Company's operations. Mr. Jordan was recommended to the Governance Committee for service as a director by a third-party search firm.










S. Todd Maclin


, 64. Director since 2020. Mr. Maclin is a member of the Audit Committee and the HR Committee. Mr. Maclin retired in 2016 from a 37-year career at JPMorgan Chase & Co., and its predecessor banks, where he rose to Chairman, Chase Commercial and Consumer Banking in 2013, and served on the company's operating committee. Prior to that, he held a variety of leadership roles, including Regional Executive for Texas and the Southwest U.S., and Global Executive for Energy Investment Banking. Mr. Maclin serves as a director of The University of Texas Development Board, as a member of the advisory council for McCombs Graduate School of Business, on the executive committee of The University of Texas Chancellor's Council, on the board of visitors of UT Southwestern Health System, on the Steering Committee for the O'Donnell Brain Institute for UT Southwestern, and on the board of Southwestern Medical Foundation and a member of its investment committee. Mr. Maclin also serves on the board of The University of Texas Ex-Students' Alumni Association. Mr. Maclin serves on the board of directors of Kimberly-Clark Corporation, a global manufacturer of branded tissue and personal care products, where he serves on the audit committee. He also serves on the board of directors of RRH Corporation, the parent company of Hunt Consolidated, Inc.; is a board advisor for Cyber Defense Labs; and is an advisory director of BancAffiliated, Inc.










Mr. Maclin has substantial experience as a senior executive in the banking industry, which provides the Board with financial transaction experience. His service on the boards of other significant companies provides the Board with



































































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PROPOSAL 1 — ELECTION OF DIRECTORS





additional perspective on the Company's operations. Mr. Maclin was recommended to the Governance Committee for service as a director by multiple non-management directors.




E. Jean Savage


, 56. Director since 2018. Ms. Savage has served as Chief Executive Officer and President of the Company since February 2020. From 2017 until her retirement in February 2020, Ms. Savage served as Vice President of Caterpillar, where she had responsibility for the Surface Mining & Technology Division. From 2014 to 2017, she was Chief Technology Officer and Vice President of Caterpillar’s Innovation and Technology Development Division. From 2009 to 2014, she served as Senior Vice President and Chief Operating Officer of the Locomotive and Railcar Services business unit for Caterpillar subsidiary Progress Rail Services, an integrated and diversified supplier of railroad and transit products and services as well as railcar leasing. Ms. Savage joined Progress Rail Services in 2002 as Vice President for Quality and Continuous Improvement. She also served as Vice President of Progress Rail’s Freight Car Repair, Parts and Quality Divisions. Prior to joining Progress Rail, she worked in a variety of manufacturing and engineering positions in her 14 years at Parker Hannifin Corporation, a leader in motion and control technologies and systems. Ms. Savage is a member of the board of trustees of the Manufacturers Alliance for Productivity and Innovation and a member of the board of directors of the National Association of Manufacturers. Ms. Savage also served for nine years in the U.S. Army Reserves as a military intelligence officer.




With her experience in leading and transforming significant industrial enterprises during her time at Caterpillar, including optimizing business operations and corporate infrastructure, Ms. Savage brings substantial expertise to the Company. In addition, her experience in the railcar industry, as well as her knowledge of the complex public company reporting requirements to consolidate an operating company and a financial company, provide the Board with key skills relevant to the Company’s operations.




Dunia A. Shive


, 60. Director since 2014. Ms. Shive is Chair of the Audit Committee and a member of the Governance Committee and the Finance Committee. From 2008 to 2013, she served as Chief Executive Officer and President of Belo Corp., a media company that owned several television stations, until its acquisition by Gannett Co., Inc. After the acquisition, Ms. Shive served as Senior Vice President of TEGNA Inc., formerly Gannett Co., Inc., a publishing, broadcast and digital media company, until 2017. She joined Belo Corp. in 1993 and served in a variety of leadership positions during her tenure, including Chief Financial Officer. Ms. Shive is a member of the board of directors of Kimberly-Clark Corporation, a global manufacturer of branded tissue and personal care products, where she serves as Chair of the audit committee. Ms. Shive is also a member of the board of directors of Main Street Capital Corporation, a principal investment firm that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. From 2014 to 2018, Ms. Shive was a director of Dr Pepper Snapple Group, Inc. From 2009 to 2015, she served on the board of directors of the Associated Press, where she served as Chair of the audit committee from 2011 to 2015. From 2008 to 2013, she served on the board of directors of Belo Corp.




Ms. Shive has broad experience in managing and leading a significant publicly-traded company. In addition, she possesses important skills and experience gained through her position of Chief Financial Officer and service in public accounting prior to joining Belo Corp. Her service on the boards of other significant companies provides the Board with additional perspective on the Company’s operations.




The Board of Directors recommends that you vote


FOR


all of the Nominees.



































































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PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION





PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION




The Company seeks approval from its stockholders, on an advisory basis, of the compensation of its named executive officers as described in this proxy statement.




The Company’s long-term strategic corporate vision is to be the premier provider of railcar products and services in North America while generating high quality earnings and returns for stockholders. The Company’s highway businesses strive to be the premier provider of highway products in the United States. The Company’s compensation program plays a significant role in its ability to attract, motivate, and retain a high quality workforce. As described in the Compensation Discussion and Analysis, the Company’s executive compensation program (i) encourages high levels of performance and accountability, (ii) aligns the interests of executives with those of stockholders, (iii) links compensation to business objectives and strategies, and (iv) takes into account, as appropriate, the cyclical nature of certain of the Company’s businesses.




At the Company’s 2020 Annual Meeting, the Company held a stockholder advisory vote on the compensation of its named executive officers as described in the 2020 proxy statement, commonly referred to as a say-on-pay vote. The stockholders approved the named executive officers’ compensation, with approximately 97% of the stockholders present and entitled to vote at the meeting voting in favor of the 2020 say-on-pay resolution. This proposal provides stockholders the opportunity to approve or not approve the Company’s executive compensation program through the following resolution:




“Resolved, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby approved.”




Because this is an advisory vote, it will not be binding upon the Board of Directors. However, the HR Committee will take into account the outcome of the vote when considering future executive compensation arrangements. After the 2021 Annual Meeting, the next advisory vote to approve the compensation of the named executive officers will occur at the 2022 Annual Meeting of Stockholders unless the Board modifies its policy on the frequency of holding such advisory votes.




The Board of Directors recommends that you vote


FOR


approval of this resolution.



































































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PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP





PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP




The Audit Committee has appointed Ernst & Young LLP (“Ernst & Young”) as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2021, subject to ratification by stockholders.




The Company has been advised by Ernst & Young that the firm has no relationship with the Company or its subsidiaries other than that arising from the firm’s engagement as auditors, tax advisers, and consultants.




Ernst & Young, or a predecessor of that firm, has been the auditors of the accounts of the Company each year since 1958. The Company has also been advised that Ernst & Young will be represented at the Annual Meeting, where they will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.




















Fees of Independent Registered Public Accounting Firm for Fiscal Years 2020 and 2019






The following table presents fees for professional audit services rendered by Ernst & Young for the audits of the Company’s annual financial statements for the years ended December 31, 2020 and 2019, and fees for other services rendered by Ernst & Young during those periods:











































































































2020





2019




Audit fees





$



2,321,900






$



2,288,500





Audit-related fees





80,000






155,000





Tax fees





202,780






199,051







Services rendered by Ernst & Young in connection with fees presented above were as follows:




Audit Fees




In fiscal years 2020 and 2019, audit fees include fees associated with the annual audit of the Company’s financial statements, the assessment of the Company’s internal control over financial reporting as integrated with the annual audit of the Company’s financial statements, quarterly reviews of the financial statements included in the Company’s Form 10-Q filings, statutory audits in Mexico, Europe, and Singapore, standalone financial statement audits of certain subsidiaries as required by the Company’s debt agreements, and consents included in other SEC filings. In fiscal year 2020, audit fees include fees associated with incremental audit procedures related to certain complex transactions and organizational changes, and in fiscal years 2020 and 2019, audit fees include fees associated with incremental audit procedures related to system upgrades.




Audit-Related Fees




In fiscal year 2020 and 2019, audit-related fees include fees for employee benefit plan audits. In fiscal year 2019, audit-related fees include fees and services rendered related to the completion of a service organization controls report for the Leasing Group.




Tax Fees




Tax fees in fiscal years 2020 and 2019 include fees for tax advice on general tax matters, state transfer pricing, services in relation to various tax credits, evaluation of tax treatment of insurance benefits, and state tax planning.




The Audit Committee pre-approves all audit and permissible non-audit services provided by Ernst & Young. These services may include audit services, audit-related services, tax services, and other services. The Audit Committee has adopted a policy for the pre-approval of services provided by Ernst & Young. In addition, the Audit Committee also may pre-approve particular services on a case-by-case basis. The Audit Committee has delegated pre-approval authority to the Chair of the Audit Committee. Pursuant to this delegation, the Chair must report any pre-approval decision to the Audit Committee at its first meeting after the pre-approval was obtained. Under this policy, pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular services or category of services and includes an anticipated budget.



































































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PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP



















Report of the Audit Committee






We are a standing committee comprised of independent directors as “independence” is currently defined by SEC regulations and the applicable listing standards of the NYSE. The Board of Directors has determined that all five of the members of the Audit Committee are “audit committee financial experts” as defined by applicable SEC rules. We operate under a written charter adopted by the Board of Directors. A copy of the charter is available free of charge on the Company’s website at


www.trin.net


under the heading “Investor Relations — Governance — Governance Documents — Audit Committee Charter.”




We annually select the Company’s independent auditors. That recommendation is subject to ratification by the Company’s stockholders.




Management is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and issuing a report thereon. As provided in our charter, our responsibilities include the monitoring and oversight of these processes.




Consistent with our charter responsibilities, we met and held discussions with management and the independent auditors. In this context, management and the independent auditors represented to us that the Company’s consolidated financial statements for the fiscal year ended December 31, 2020 were prepared in accordance with U.S. Generally Accepted Accounting Principles. We reviewed and discussed the consolidated financial statements with management and the independent auditors and discussed with the independent auditors matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight Board.




The Company’s independent auditors have also provided to us the written disclosures and the letter required by applicable requirements of The Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee, including concerning independence, and we discussed with the independent auditors that firm’s independence. We also considered whether the provision of non-audit services is compatible with maintaining the independent auditors’ independence and concluded that such services have not impaired the auditors’ independence.




Based upon our reviews and discussions with management and the independent auditors, and our review of the representation of management and the report of the independent auditors to the Audit Committee, we recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission.























































Audit Committee







Dunia A. Shive,


Chair





John J. Diez




Leldon E. Echols




Tyrone M. Jordan




S. Todd Maclin





The Board of Directors recommends that you vote


FOR


ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.



































































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EXECUTIVE COMPENSATION




















Compensation Discussion and Analysis






The Board has delegated oversight of the Company’s executive compensation program to the HR Committee, which includes a representative of the Company's largest stockholder. This Compensation Discussion and Analysis describes how the HR Committee designed the executive compensation program and set individual pay for the named executive officers in the Summary Compensation Table. The HR Committee reviews and recommends the CEO’s compensation to the independent directors of the Board for their approval. The HR Committee also reviews and approves the compensation of the other named executive officers.




On January 15, 2020, the Company announced the appointment of E. Jean Savage as Chief Executive Officer and President, effective February 17, 2020, following the December 31, 2019 retirement of the former Chief Executive Officer and President Timothy R. Wallace. As previously announced, during the period January 1, 2020 through February 16, 2020, the Company was managed by an interim Office of the Chief Executive Officer (the "Office of the CEO") which consisted of Melendy E. Lovett, Eric R. Marchetto and Sarah R. Teachout. Each of the members of the Office of the CEO remained in their existing positions with the Company while carrying out their Office of the CEO responsibilities.




Throughout 2020, the Company announced several changes to the roles and responsibilities for the named executive officers. These changes are described in more detail below. As a result of these changes, year-over-year comparisons for some of the named executive officers’ compensation may not be meaningful.






Executive officers named in the 2020 Summary Compensation Table are:







E. Jean Savage, Chief Executive Officer and President effective February 17, 2020.







Eric R. Marchetto, Executive Vice President and Chief Financial Officer. Mr. Marchetto served as Senior Vice President and Group President, TrinityRail until April 1, 2020, when he assumed his current role.







Melendy E. Lovett, Executive Vice President and Chief Administrative Officer. Ms. Lovett served as Senior Vice President and Chief Financial Officer until April 1, 2020, when she assumed her current role. On January 4, 2021, Ms. Lovett announced her intent to transition to retirement from the Company effective July 4, 2021.







Brian D. Madison, Executive Vice President, Services Operations







Sarah R. Teachout, Executive Vice President, Chief Legal Officer and Assistant Secretary







Gregory B. Mitchell, Executive Vice President and Chief Commercial Officer







Neil J. West, Executive Vice President, Production Operations




Executive Summary




Throughout 2020, the COVID-19 pandemic had a negative impact on demand for the Company's products and services. The resiliency of the cash flow from the Company's platform of businesses, coupled with a management team experienced in cyclical business environments, allowed the Company to withstand the volatile disruption from the global pandemic and take advantage of opportunities to strengthen its potential for long-term value creation.




Even though the Company's business was significantly impacted by the worldwide COVID-19 pandemic, the Company did not make changes to its 2020 annual or long-term incentive plan design metrics or pay-out levels for the named executive officers.




Despite the COVID-19 pandemic, the Company had a transformative year in 2020 through the development of a new strategic direction that included repositioning from an earnings focus to a returns focus and continued transition from a holding company structure to an operating company structure. The Company redefined its vision with a new purpose statement - "Delivering Goods for the Good of All," which is supported through major initiatives to optimize the rail platform and deliver significant improvement in operating cost structure, cost of capital, and capital allocation.




Industry Cyclicality




The industries in which the Company operates are highly cyclical in nature. Weaknesses in certain sectors of the U.S. and global economy may make it more difficult to sell or lease certain types of railcars. Additionally, adverse changes in commodity prices or lower demand for certain commodities could result in a decline in customer demand for various types



































































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of railcars. The Company has regularly experienced this cyclicality. During 2020, the COVID-19 pandemic is believed to have increased the cyclical volatility the Company experienced.




The Company recognizes the challenges of providing competitive compensation through business cycles, and designs its incentive compensation programs to encourage returns-focused, long-term growth. The Company sets goals intended to retain its executives and motivate them to improve the Company’s performance throughout the business cycle, with a continued focus in 2020 on profit before tax improvement and improvement in the pre-tax return on total stockholder equity, as well as relative total stockholder return ("TSR").




2020 Executive Compensation Highlights




For 2020, the HR Committee made changes to the annual and long-term incentive programs and the Transition Compensation Plan (as defined in "Post-Employment Benefits" below). These changes were made to enhance the alignment of the compensation programs with market practice and stockholders’ interests, reinforce a pay for performance philosophy, retain executives, and increase focus on the organization design project completed in 2020. Listed below are key changes for 2020:




Annual Incentive







Selected a 2020 annual incentive plan qualitative metric related to the success of the 2020 organization design project (weighted 15%). Profit before tax (“PBT”) remained the primary annual incentive plan metric (weighted 85%).







The amount of PBT required to receive a target payout under the annual incentive plan did not change from the 2019 amount. The 2020 amount of PBT required to receive the maximum payout at 200% of target was lowered from the 2019 amount. The 2020 amount of PBT required to receive the threshold payout was lowered from the 2019 amount and the threshold payout was lowered from 40% of target in 2019 to 35% in 2020, in recognition of a lowered PBT threshold.




Long-Term Incentive







Increased the 2020 three-year average return on equity ("ROE") threshold, target and maximum performance levels in the long-term incentive ("LTI") program for performance units.







Allowed continued restricted stock unit ("RSU") vesting after retirement for time-based RSU awards issued in 2020 for employees who remain employed for at least six months after the grant date then separate at or after age 60 with 10 or more years of service.




Transition Compensation Plan







Effective May 4, 2020, the Transition Compensation Plan was frozen to new participants and contributions were discontinued.




More detailed information may be found in the following discussion.




Company Highlights




The Company began 2020 focused on optimizing its cost structure, lowering its cost of capital, deploying capital to return-accretive investments, and returning meaningful and steady amounts of capital to its stockholders. The Company made changes toward stronger performance to elevate and accelerate its position as a premier provider of railcar products and services in North America. The Company's team of innovative, dedicated, and experienced executives successfully assessed the market and quickly adapted to the changing economic cycle and business climate. The Company maintains a competitive advantage by retaining seasoned executives, developing a strong leadership succession plan, and seeking to ensure long tenure and orderly transitions among its senior executives.




Financial and Operational Highlights




During 2020, the Company utilized the strengths of its business model to (i) optimize its operating structure and balance sheet; (ii) remain operationally and financially flexible; (iii) make strategic decisions when market conditions shifted; (iv) make disciplined investments in its business to grow its leasing and maintenance services business, (v) reposition and streamline its operations based on product demand; and (vi) maintain a conservative and liquid balance sheet to provide stability and capitalize on attractive investment opportunities. Financial and operational highlights are shown below:



































































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Full year revenues of $2.0 billion







Reported earnings (loss) per share ("EPS") of $(1.27) and adjusted EPS of $0.37, (excludes $1.63 per share of one-time charges and credits)







Cash flow from operations and total free cash flow after dividends and investments were $652 million and $113 million, respectively







Total net additions of 3,340 railcars to the wholly-owned and partially-owned lease fleets, an increase of 3.2% from 2019







Returned $285 million to stockholders in the form of share repurchases and dividends







Committed liquidity of $727 million as of December 31, 2020




The financial and operations highlights listed above include financial measures compiled in accordance with generally accepted accounting principles (“GAAP”) and certain non-GAAP measures. Please refer to the “Appendix - Reconciliations of Non-GAAP Measures” for information on the non-GAAP measures included above, reconciliations to the most directly comparable GAAP financial measure, and the reasons why the Company believes each measure is useful to management and investors.




Executive


Compensation Program Highlights




As further described in this Compensation Discussion and Analysis, key features of the Company’s compensation practices for the named executive officers include:
































































































Separate roles of CEO and Chairman of the Board of Directors







Objective financial performance measures are the largest component of annual and long-term incentive programs







Performance-based compensation set at 68% of the CEO’s total target compensation and at an average of 58% of the remaining named executive officers’ total target compensation







Annual and long-term incentive programs in 2020 were 85% and 80% performance-based, respectively, with no guarantees for payment of the performance-based components







Long-term equity grants (excluding one-time equity awards described in "Time-Based Restricted Stock Unit Grants in 2020") comprised 65% of the CEO’s total target compensation at grant and an average of 45% of the remaining named executive officers’ total target compensation







Payments under long-term incentive plans based on relative TSR are capped at 100% of target if relative TSR is negative over the performance period







Double trigger provision for cash severance and equity issued after 2018 in the Company’s change in control agreements








Stock ownership requirements ranging from three to six times base salary








Clawback policy that allows the Company to recoup payouts under annual and long-term incentive plans







Total target compensation is generally targeted in a range of 10% above or below the 50th percentile of the Peer Survey Data (as defined below)







Utilization of different performance metrics for annual and long-term incentive programs



image_81.jpg




No dividend or dividend equivalent payments are made on unvested performance units or unvested restricted stock units


(1)




image_81.jpg



No hedging or pledging of Company securities



image_81.jpg



No agreements containing excise tax gross ups



image_81.jpg



No executive employment agreements



image_81.jpg



No repricing or cash buyouts of underwater stock options



image_81.jpg



No replacement of underwater stock options with other awards



image_81.jpg



No perquisite allowances or payments





(1)


Dividend equivalents on unvested restricted stock units issued to employees, including the named executive officers, are accrued and paid upon vesting.









































































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Role of Stockholder Say-On-Pay Votes




In May 2020, the Company held a stockholder advisory vote on the compensation of its named executive officers as described in the 2020 proxy statement, commonly referred to as a say-on-pay vote. The named executive officers’ compensation was approved, with approximately 97% of the stockholders present and entitled to vote voting in favor of the 2020 say-on-pay resolution. The Company typically engages in multiple industry/investor conferences and roadshows each calendar quarter, in addition to handling routine investor calls and questions. On November 19, 2020, the Company held a virtual Investor Day, which included presentations by the CEO and other members of executive management, followed by a question and answer session. Also, as noted above, a representative of the Company’s largest stockholder serves on the HR Committee. Based on its 2020 stockholder engagement efforts, stockholders voiced no concerns regarding named executive officer compensation. As the Company evaluated its compensation practices and talent needs throughout 2020, it continued to apply its strong pay for performance compensation philosophy, in keeping with the stockholders' strong support of the Company’s compensation programs. Following its annual review of executive compensation, the HR Committee decided to continue utilizing annual and long-term incentive compensation that rewards senior executives for delivering value for stockholders throughout the Company’s business cycle.




Compensation Overview




The HR Committee sets each named executive officer’s compensation based on the overall objectives of the Company’s executive compensation program and the following additional factors:




•    the breadth, complexity, and scope of each executive’s responsibilities within the Company;




•    the executive’s performance in optimizing the Company’s overall success in providing leadership support of operational and financial flexibility that directs resources to railcar leasing, maintaining and manufacturing products in greatest demand, and capitalizing on investment opportunities;




•    past performance through changing economic cycles and business climates with respect to specific financial, strategic, and operating objectives; and




•    compensation benchmark data from peer group companies (the “Peer Survey Data”) against which executive compensation is compared.




Compensation Approach




The Company’s executive compensation is designed to drive executive accountability for performance of the Company as a whole. This approach is reflected in the Company’s compensation program and contributes to a performance-driven culture where executives are expected to deliver results that promote the Company’s position as an industry-leading integrated railcar leasing, manufacturing, and services business. In setting 2020 compensation, the Company utilized the Peer Survey Data and generally targeted the total target compensation of its named executive officers between 10% above or below the 50th percentile of the Peer Survey Data. This approach supports the Company’s philosophy of driving performance and accountability. For further explanation of the Peer Survey Data, see “Benchmarking and Peer Survey Data for 2020 Compensation” below.




The HR Committee realizes that benchmarking against the Peer Survey Data requires interpretation due to the potential differences in position scope. The HR Committee uses the Peer Survey Data benchmarking information and the peer group proxy disclosure data provided by the Compensation Consultant as general guidance, making adjustments to compensation levels based on such interpretations and what the HR Committee believes to be consistent with the overall compensation objectives of the Company and in the best long-term interests of the Company’s stockholders.




The Company’s compensation philosophy has proven to be appropriate and sufficient to attract, motivate, and retain the key executives needed to enhance the performance, profitability and stockholder returns of the Company. The HR Committee considers the targeted range and develops a total target compensation amount for each named executive officer using the objectives described below and the Peer Survey Data as general guidelines. An individual’s total target compensation may be set at or below the 50th percentile if a named executive officer is relatively new to his or her current position. Total target compensation may be set above the 50th percentile if a named executive officer is a seasoned executive and has significant experience and achievements in his or her role at the Company or has extensive work experience in similar positions elsewhere that the HR Committee has determined provides additional value. In evaluating such situations, the HR Committee also considers:




•    the full range of payout opportunity for performance-based compensation, which typically results in actual compensation levels that vary from the targeted range described above,



































































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•    the periodic and relative impact on earnings and returns of external business conditions outside the control of the executives,




•    the scope and breadth of the individual executive’s role as compared to similar peer roles, and the executive’s influence and participation in executive activities in addition to the peer-defined scope, and




•    the cyclical nature of the Company’s business.




Pay for Performance Philosophy




The Company’s executive compensation philosophy is based on pay for performance. As illustrated in Table 1 below, target performance-based incentive compensation, including both annual and performance-based long-term compensation, comprised 68% of our CEO's total target compensation and 58%, on average, of our other named executive officers' total target compensation. To reward executives based on strong financial performance associated with TSR and ROE, the portion of 2020 LTI awards issued as performance units was maintained at 80% in 2020, consistent with 2019. The remaining 20% was issued as time-based restricted stock units. The HR Committee believes that by having a significant amount of an executive’s compensation based on performance, and therefore at risk of non-payment, the executive will be properly motivated to bring added value to the Company and stockholders. The Company’s executive compensation program is also designed to provide significant upside opportunity for exceptional performance, above-market compensation for above-market performance and, conversely, reduced compensation when Company performance is lower than expected.




Table 1: 2020 Named Executive Officer Total Target Compensation — Fixed vs. Performance-Based


(1)



chart-d021843e4bb94688bc81a.jpg
chart-bdfb476a78a94ee38c71a.jpg



(1)    Excludes one-time equity awards described in "Time-based Restricted Stock Unit Grants in 2020".










Objectives of the Executive Compensation Program




The primary emphasis of the Company’s executive compensation program is to encourage and reward progress toward the Company’s strategic operational and financial objectives. These objectives are recommended by management, with oversight of the Board of Directors, and are designed to promote the long-term interests of the Company’s stockholders. As stockholders themselves, the Company’s leaders are keenly focused on achieving these objectives.




Table 2 below provides a summary of the executive compensation program objectives.



































































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Table 2: Executive Compensation Program Summary
















































2020 Executive Compensation Program Objectives



2020 Executive Compensation Program Design




Provide an incentive for long-term value creation for stockholders




Use equity-based awards and executive stock ownership requirements to align with stockholder interests



Encourage the highest level of performance and accountability for optimizing and growing the rail platform for the Company's overall success



Provide compensation opportunity commensurate with Company performance and annual and long-term incentives that are linked to stockholder interests



Align compensation with annual and long-term business objectives, strategies, and financial targets



Provide a reasonable mix of fixed and incentive compensation (approximately 32% fixed, 68% incentive for the CEO; approximately 42% fixed, 58% incentive on average for the other named executive officers)



Motivate senior executives to successfully guide the Company through changing economic cycles and business climates



Provide a reasonable balance between annual and long-term compensation (approximately 35% annual, 65% long-term for the CEO; approximately 55% annual, 45% long-term on average for the other named executive officers)



Attract, motivate and retain the key executives needed to enhance the performance and profitability of the Company throughout its business cycles and meet the Company's objective for collaboration and innovation among its senior executives



Maintain competitive pay levels based on the Peer Survey Data and peer group proxy disclosure data (targeted range for total target compensation is generally within 10% above or below the 50th percentile of the Peer Survey Data)



Encourage executives to enhance the Company’s position as an industry-leading integrated railcar leasing, manufacturing, and services business



Provide compensation levels aligned with performance and that address both industry competitiveness as well as recruiting/retention competitiveness





Benchmarking and Peer Survey Data for 2020 Compensation




The HR Committee retains the Compensation Consultant to provide the HR Committee with guidance on executive compensation-related matters and to perform a total compensation benchmarking study at least annually. In setting 2020 compensation, this benchmarking information included data from each company named in the peer group shown in Table 3. The HR Committee considered the data provided by the Compensation Consultant when developing 2020 base salaries, annual incentive compensation, long-term incentive compensation, and total target compensation for the Company’s named executive officers.




The HR Committee performs an annual review to determine whether peer companies remain appropriate. For the November 2019 compensation study to establish 2020 compensation, the peer companies shown in Table 3 below were largely unchanged from the group used to establish 2019 compensation. American Railcar Industries was taken private and was therefore removed from the peer group. These companies had median 2018 fiscal year revenue of $2.5 billion and market capitalization of $1.8 billion as of September 2019. The peer group shown in Table 3 below is comprised of industrial companies with similar size (measured by revenue and market capitalization), span of operation, and business complexity, that the Company could potentially compete with for executive talent.




Table 3: Peer Companies Used for 2020


























































































Air Lease Corporation







REV Group, Inc







Allison Transmission Holdings, Inc.







Ryder System, Inc.







Astec Industries, Inc.







Terex Corporation







FreightCar America, Inc







The Greenbrier Companies, Inc.







GATX Corporation







United Rentals, Inc.







Herc Holdings Inc.







Wabash National Corporation







The Manitowoc Company, Inc.







WABCO Holdings Inc.







Meritor, Inc.







Westinghouse Air Brake Technologies Corporation







Oshkosh Corporation







The Peer Survey Data is size-adjusted, regressed market data for base salary, target annual and long-term incentive compensation, and total target compensation obtained from the


Aon Hewitt Total Compensation Measurement Survey


.



































































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As a point of reference when available for named executive officers, the HR Committee also reviewed the most recently available peer group proxy disclosure data for the 2020 peer companies in Table 3.




2020 Total Target Compensation




In establishing 2020 total target compensation, excluding any one-time awards, for the named executive officers, the HR Committee considered individual and Company performance, job responsibilities, alignment of the named executive officers’ and stockholders’ interests, the importance of retaining a seasoned team of key executives, the Peer Survey Data, peer group proxy disclosure data, and the CEO’s recommendations. Taking these factors into account, the HR Committee (and the independent directors, with respect to the CEO) established 2020 total target compensation for each named executive officer.




In connection with the appointment of a new CEO and the Company's organizational design work, several named executive officers had significant changes to their respective roles and responsibilities during 2020. Consequently, their current roles may be different from the roles the named executive officers held when their 2020 total target compensation was approved.


Given the significant number of role changes in 2020, individual assessment of each named executive officer's compensation vis-a-vis the targeted range is not as useful as in prior years.


In the aggregate, the 2020 total target compensation for the named executive officers other than the CEO was within the targeted range of 10% above or below the 50th percentile of the Peer Survey Data, at 0.7% below the targeted range midpoint. The CEO's total target compensation was 18% below the targeted range midpoint. Table 4 below shows the CEO and aggregate 2020 total target compensation for named executive officers other than the CEO compared to a range of 10% above or below the 50th percentile of the 2020 Peer Survey Data for current named executive officer roles. See “Components of Compensation” for further discussion on the establishment of each component of compensation.




Table 4: CEO and Aggregate (Excluding CEO) Total Target Compensation


(1)



chart-47825ea2909146268ba1a.jpg
chart-070043ebe8374506b8a1a.jpg



(1)    Excludes one-time equity awards described in "Time-based Restricted Stock Unit Grants in 2020".










Ms Savage was appointed as CEO effective in February 2020. Prior to serving as CEO, Ms. Savage served on the Company's Board of Directors and brings a proven track record transforming large organizations and deep experience optimizing manufacturing operations and corporate infrastructure. She understands both the leasing and manufacturing businesses and the value creation potential of each, and is focused on meeting customer expectations and enhancing stockholder value. Ms. Savage's 2020 total target compensation is below the targeted range given her recent appointment to the CEO and President role.










For the named executive officers other than the CEO, the HR Committee considered the Company’s and each named executive officer’s 2019 performance when setting 2020 target compensation. The named executive officers provided the



































































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leadership and management that were pivotal to the Company’s success in 2019. The following individual performance factors were applicable in determining 2020 compensation for named executive officers other than the CEO:




Mr. Marchetto - his long tenure in the company’s rail business, having held executive positions in the areas of finance, sales, administration, leasing, and commercial activities. In March 2019, Mr. Marchetto became Senior Vice President and Group President, TrinityRail and in April 2020 became Chief Financial Officer of the Company. His total 2020 target compensation was increased to reflect his responsibilities as Group President of TrinityRail;




Ms. Lovett - her exceptional performance as Chief Administrative Officer, followed by assumption of the Chief Financial Officer role in 2019. She has had oversight of the Company’s railcar leasing business, human resources and information technology in addition to her 2019 leadership of the Company's finance organization. Ms. Lovett's total 2020 target compensation was increased to reflect her responsibilities as Chief Financial Officer;




Mr. Madison - his proven leadership and deep experience in portfolio management, business development, and sales and marketing. His financial services expertise ranges from high volume, scale-driven, origination platforms to middle- and large-ticket market segments. Mr. Madison has provided leadership of the Company's railcar leasing business since 2016. He became Executive Vice President, Services Operations in July 2020;




Ms. Teachout - her significant contributions with regard to the Company’s legal activities including her successful oversight of the Company’s litigation since joining the Company in 2015 as Vice President and Deputy General Counsel. Following the spin-off of Arcosa, Ms. Teachout became Senior Vice President and Chief Legal Officer and her 2020 target compensation reflects her responsibilities. Ms. Teachout has significant legal expertise that greatly benefits the Company’s business;




Mr. Mitchell - his supply chain experience and ability to tailor innovative solutions for customers to move their freight by rail. In addition to his leadership as Chief Commercial Officer, he has also led the Company's logistics and highway products businesses. He has more than 20 years of experience across major retail and manufacturing organizations. He became Executive Vice President of the Company in July 2020;




Mr. West - his key leadership and management of the remarkable growth of the Company's railcar maintenance business throughout 2019 and for several years prior. He has been a key leader in the Company's manufacturing organization, with broad experience improving the performance of its industrial businesses. In July 2020, Mr. West was promoted to Executive Vice President, Production Operations.




In addition to the above performance-related factors, the HR Committee considered the executive compensation program design features shown in Table 2 above in setting each component of compensation. Total target compensation for two of the named executive officers was within the targeted range, while total target compensation for Ms. Lovett and Ms. Teachout was above the target range. Given their new positions, total target compensation for Ms. Savage and Mr. West was below the targeted range. Total target compensation for Mr. Madison was below the targeted range and this pay position compared to the market range is the primary justification for a one-time equity award that is discussed in "Long-Term Incentive Compensation." The HR Committee believes that the 2020 total target compensation levels for the named executive officers were appropriate.




Components of Compensation




The Company’s 2020 executive compensation program has three key components:







a base salary;







an annual incentive; and







a long-term incentive.




At the direction of the HR Committee, the Compensation Consultant met with Company management, including the former and current CEOs, to discuss the scope and complexity of responsibilities, level of revenue responsibility, and internal reporting relationships for the Company’s named executive officers. Following these discussions, the Compensation Consultant determined the reference points from the Peer Survey Data for base salary, target annual incentive compensation, target long-term incentive compensation, and total target compensation of each named executive officer as compared to the 50th percentile of the Peer Survey Data.




After discussions with the HR Committee and Company management and a review of the Peer Survey Data, the Compensation Consultant provided comparative compensation data for each named executive officer position. The HR Committee considered the Compensation Consultant’s analyses and, the CEO’s compensation recommendations for each named executive officer.



































































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Set forth below are the components of total target compensation, how these components were applied to each named executive officer, and an analysis of why such amounts were set or paid. Although the HR Committee generally utilized the range of 10% above or below the 50th percentile of the Peer Survey Data for each component of compensation as a reference point, the HR Committee does not target each component within that particular range as it does generally with total target compensation. In establishing each component of compensation for the named executive officers, the HR Committee considered the same factors as it did for establishing total target compensation, as well as any additional factors noted below.




Base Salary




Base salary is intended to attract, motivate, and retain key executives by providing a consistent level of pay that appropriately and fairly compensates the executive for the breadth, complexity, and scope of responsibility inherent in the position. After evaluating the market compensation data, the CEO discusses with the HR Committee the CEO's evaluation of each named executive officer, excluding the CEO. The discussion includes performance for the past year; highlights of specific achievements; changes in the breadth, complexity, or scope of responsibilities that have occurred or will occur in the next year; operating results; organizational improvements; and relative pay equity among the named executive officers. As noted above, the CEO’s compensation is established by the independent members of the Board.




2020 Base Salary




Ms. Savage assumed the CEO role in 2020. For comparison, Ms. Savage's 2020 base salary is 19% less than the 2019 base salary received by the former CEO, Timothy Wallace. In light of current market data, their strong operational performance and several role changes among the named executive officers, the base salaries increased for 2020 in the range of 4% to 6% for each named executive officer other than for Mr. West. Mr. West received a 23% base salary increase in recognition of the additional responsibilities he assumed in leading Production Operations.




In recognition of the individual performance factors set forth under “2020 Total Target Compensation,” recognizing the importance of retaining key executives, and upon review of the Peer Survey Data, the annualized 2020 base salaries for the named executive officers were set at the amounts listed below based on the rationale set forth above under “2020 Total Target Compensation.”

























































































































Named Executive Officer



2020 Base Salary Amount





E. Jean Savage





$



850,000






Eric R. Marchetto





$



562,000






Melendy E. Lovett





$



520,000






Brian D. Madison





$



425,000






Sarah R. Teachout





$



450,000






Gregory B. Mitchell





$



405,000






Neil J. West





$



375,625









Setting Incentive Compensation Performance Goals




The following discussion contains statements regarding future performance goals. These statements are solely disclosed in the limited context of the Company’s compensation program and should not be considered as statements of the Company’s expectations or estimates. The Company specifically cautions investors not to apply these statements to other contexts.




The Company approaches goal setting throughout its business cycle by considering its business plan forecast over the relevant performance period for each incentive program and the Company’s historical incentive plan payouts, to strike a balance among motivational goals and business conditions that support creation of stockholder value. To set 2020 annual performance levels, each business unit developed a forecast that included both upside and downside business projections for the respective incentive plan performance period. These business unit projections were consolidated at the corporate level to obtain company-wide forecasts. Incentive targets for 2020 were established by the HR Committee for the named executive officers, other than Ms. Savage, and recommended by the HR Committee to the independent directors regarding Ms. Savage, based on several important factors, including







historical, current and forecasted business and industry performance;







an evaluation of the Company’s current placement in its multi-year business cycle, excluding any forecast of the COVID-19 impact;



































































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a review of Peer Survey Data in support of the HR Committee’s objective of delivering competitive pay throughout the Company’s business cycle;







the volatile nature of the Company’s earnings, common within the cyclical industries in which the Company operates; and







recognition of the individual performance factors set forth under “2020 Total Target Compensation.”




Because the Company is a cyclical business, its goal-setting philosophy for the annual incentive program is based on its annual operating plan, while the long-term goal setting process encourages performance improvement over a longer period. The annual goal setting process seeks strong performance throughout each business cycle. When the business cycle indicates that the performance opportunity may be lower than prior years due to economic conditions, incentive plan targets may be lower than prior years’ targets. The Company’s goal setting process is structured so that its incentive compensation programs provide significant motivation to achieve considerable results within the current business cycle. The long-term goal setting process strives for long-term company performance that rewards stockholders and aligns annual decisions to the long-term business plan. This goal setting philosophy has been in place for many years, and has served to drive effective results for stockholders as illustrated by the Company’s long-term performance.




The HR Committee believes that (i) the threshold performance level should be set such that a participant will not earn incentive compensation until a significant portion of target performance is attained; (ii) the target performance level should represent a considerable but reasonable level of performance; and (iii) the maximum performance level should represent an aggressive level of performance that will be difficult to achieve. The amount of incentive compensation earned is linearly interpolated for Company performance falling between the specified performance levels.




Once the HR Committee has established performance levels for incentive compensation, it receives regular updates throughout the year regarding the Company’s progress with respect to the performance levels and potential payouts under the incentive compensation programs. The HR Committee also continually assesses whether it believes the programs are producing the desired results. At the end of each year, the HR Committee reviews the results of the programs and further assesses the effectiveness of the programs over the preceding year. This review forms the foundation for the incentive compensation programs for the coming year.




2020 Annua


l Incentive


Compensation




The HR Committee may adjust, from year to year, the performance metrics, performance levels, or other elements of the annual incentive compensation program (referred to as “AIP”) with the objective of assuring management’s focus on appropriate performance metrics. The HR Committee also may choose to: (i) modify or discontinue the AIP at any time, overall or as to any one or more named executive officers, including non-payment or partial payment of incentive compensation or granting equity in lieu of cash compensation, with or without notice; (ii) modify a named executive officer’s AIP target if his or her responsibilities change significantly; (iii) reduce a named executive officer’s annual incentive compensation on a discretionary basis for failing to meet job performance expectations; (iv) recoup all or any portion of annual incentive compensation under circumstances where the Company restates its financial statements; or (v) remove named executive officers from the AIP at any time. The HR Committee may remove any unusual or infrequently occurring, or non-recurring items of income or expense from the calculation of financial goal attainment and incentive compensation.




2020 Annual Incentive Compensation Targets




Ms. Savage assumed the CEO role in 2020 and her 2020 AIP target is 44% less than the former CEO. In light of their strong operational performance and in certain cases to reflect their new roles, all other named executive officers received increases to their AIP target amounts for 2020.










The HR Committee desires collaboration and innovation among the named executive officers, and understands the Company’s business in relation to the overall economic cycle. The HR Committee approved 2020 AIP targets as follows:



































































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Named Executive Officer






2020 Annual Incentive Target







E. Jean Savage





$



739,500






Eric R. Marchetto





$



450,000






Melendy E. Lovett





$



410,000






Brian D. Madison





$



300,000






Sarah R. Teachout





$



320,000






Gregory B. Mitchell





$



215,000






Neil J. West





$



215,625







Ms. Savage’s potential annual incentive compensation was greater than the other named executive officers since she had ultimate responsibility for the overall success of the Company. To moderate the impact of base salary adjustments on other components of compensation, and to facilitate comparisons to market data, a specified dollar amount was used for annual incentive compensation targets rather than a percentage of base salary.




2020 Annual Incentive Compensation Performance Levels and Payouts




I


n performing its annual review of the Company’s incentive compensation programs, the HR Committee determined that applying Company-wide goals has been highly effective in achieving a desired level of accountability for the success of the Company as a whole. The HR Committee believed that emphasizing both PBT growth and returns was important as the Company continued its rail focus while continuing to seek operational efficiencies and cost reductions. Employing PBT as the financial metric also emphasized earnings. Accordingly, the HR Committee approved PBT as the exclusive financial performance metric for the Company’s 2020 AIP program, weighted 85% of an executive’s target AIP. PBT is defined as income (loss) from continuing operations before income taxes.




The threshold performance level of PBT is intended to motivate participants to achieve a significant percentage of target. In anticipation of continued business cycle downturn, the threshold performance level of PBT was set at 75% of the PBT target performance level, which was lowered from 80% of target in 2019. By attaining the threshold PBT performance level, participants would earn 35% of the PBT portion of their annual incentive compensation target, which was reduced from a 40% threshold payout in 2019 in recognition of the lowered threshold performance level.




The target PBT performance level was maintained at the same level as in 2019. The maximum payout level was set at 120% of the target PBT payout and would only be achieved if extraordinary results were achieved in 2020. The maximum AIP performance level was lowered from 125% of target in 2019. Table 5 below provides the threshold, target, and maximum PBT performance levels for the 2020 AIP. Table 5 also shows the potential payout opportunities as a percent of the annual incentive compensation target for the named executive officers.




Since the Company was undergoing an organizational design project in 2020, the remaining 15% of each participant’s 2020 target AIP could be earned based on a qualitative evaluation of the success of this project. The payout of this portion of the AIP could range from a minimum of 0% to a target and maximum of 15% of each participant’s 2020 target AIP. The payout was evaluated subjectively based on the achievement of the organization design goals as well as timely implementation.




See the “Grants of Plan-Based Awards Table” for more information on possible AIP payments to the named executive officers.




Table 5: 2020 Annual Incentive Performance Levels and Payout Opportunities ($ in millions)


















































































































































































Threshold





Target





Maximum





2020 Actual





85% - Profit Before Tax ($M)





$160





$213





$255





$(332)





Named executive officer PBT AIP payout opportunity as a percentage of target





35%





100%





200%





—%





15% - Success of the Organization Design





N/A





Successful





N/A





Successful







2020 actual payout level





15%






The Company did not meet the 2020 AIP PBT threshold performance level. The HR Committee approved the exclusion of any impact to PBT from (i) the pension annuitization ($151.5M) and (ii) any restructuring charges associated with the organization design project ($11.0M), but these exclusions were not sufficient to achieve threshold performance. The Committee believes that these exclusions are appropriate because (i) the decision to terminate the pension and execute an organization design project are both in the best long-term financial interest of the Company and stockholders and the



































































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financial impact resulting from these decisions should not positively or negatively impact the 2020 annual incentive payout and (ii) the AIP was performing as intended. The Committee evaluated the organizational design project and awarded target achievement for this portion of named executive officers' 2020 AIP. Accordingly, the named executive officers earned 15% of their respective target AIP amounts. The HR Committee did not make any adjustments to 2020 AIP payouts to the named executive officers for any reason, including the impact of the COVID-19 pandemic.




The 2020 annual incentive compensation amounts paid to each named executive officer were as follows: Ms. Savage


$110,925; Mr. Marchetto $67,500; Ms. Lovett $61,500; Mr. Madison $45,000; Ms. Teachout $48,000; Mr. Mitchell $32,250; and Mr. West $32,344. The


HR Committee believed that the 2020 AIP performed as designed.




Long-Term Incentive Compensation




Long-term incentive compensation is a key part of the total target compensation for executives and is provided through the stockholder-approved Fourth Amended and Restated Trinity Industries, Inc. 2004 Stock Option and Incentive Plan (the “Stock Plan”). The overarching purpose of LTI is to align executives’ interests with those of the Company’s stockholders and motivate executives to create long-term stockholder value by improving the Company’s earnings and returns through a variety of strategic and operational initiatives.




For 2020, the HR Committee established a target level of LTI (the “target LTI”) for the named executive officers. The target LTI for each named executive officer was set as a specified dollar amount used to calculate the named executive officer’s target LTI grant. The target LTI grant was calculated by dividing the target LTI dollar amount for each named executive officer by the closing stock price on the date of grant.




A named executive officer’s target LTI grant can be composed of multiple types of long-term incentives as provided in the Stock Plan. Since 2008, the Company has utilized two types of long-term incentives for the named executive officers’ target LTI grants: (i) performance-based restricted stock or stock units; and (ii) time-based restricted stock or stock units.




The 2020 target LTI grants made to the named executive officers were comprised of 80% performance-based restricted stock units (“Performance Units”) for the 2020-2022 performance period, and 20% time-based restricted stock units. When granted in 2020, the target LTI grants of 80% Performance Units were to help drive executive accountability for performance of the Company as a whole. As shown in Table 6 below, the Company’s use of 80% Performance Units in 2020 compares to 51% of performance-based LTI opportunity made by the 2020 compensation benchmarking peer group.




The HR Committee makes additional time-based awards to the named executive officers when it determines that such awards will be helpful in retaining the officers. In making this determination, the HR Committee considers a number of factors, including historical time-based awards provided, the officer’s tenure with the Company, the officer’s performance in his or her respective roles, and the criticality of the officer’s retention to achieve future strategic objectives.



































































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Table 6: Average Weighting of LTI Awards









chart-e95682a0bd714f509471a.jpg











2020 Long-Term Incentive Compensation Targets




Ms. Savage assumed the CEO role in 2020 and her 2020 LTI target is 33% less than the former CEO. The 2020 LTI targets for Mr. Marchetto, Ms. Teachout and Mr. Mitchell were increased to maintain a market-competitive level and to strengthen retention. Ms. Lovett's LTI was increased to maintain a market competitive level as the Chief Financial Officer, the role she held at the time 2020 target LTI amounts were approved. Mr. Madison's LTI was increased in light of the comparison of his 2019 LTI target to current 2020 market competitive level. Mr. West's LTI target was increased in recognition of the additional responsibilities he assumed in leading Production Operations.










The HR Committee approved the following grant date target LTI award amounts:










































































































































Named Executive






2020 LTI Target Amount








E. Jean Savage





$



3,000,000







Eric R. Marchetto





$



960,000







Melendy E. Lovett





$



875,000







Brian D. Madison





$



550,000







Sarah R. Teachout





$



670,000







Gregory B. Mitchell





$



375,000









Neil J. West





$



450,000








To moderate the impact of base salary adjustments on other components of compensation, and to facilitate comparisons to market data, a specified dollar amount was used for long-term incentive compensation targets rather than a percentage of base salary. See the “Grants of Plan-Based Awards Table” for more information on possible future payments to the named executive officers.




Performance Unit Component




The Company uses a performance-based restricted stock unit program (the “Performance Unit Program”) for the performance-based component of the named executive officers’ target LTI grants. This program is designed to (i) increase



































































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the visibility of the long-term incentive performance goals for the program’s participants, (ii) align their efforts toward achieving these goals, and (iii) reinforce pay for performance linkage through settlement of awards immediately following the end of the relevant performance period.




The Performance Unit Program is designed to accomplish these goals by granting Performance Units as 80% of the participant’s target LTI level at the beginning of a three-year performance period. The Company’s attainment of the performance levels during the performance period determines the number of units that are ultimately earned following the end of the performance period. These units are non-voting and do not receive dividends during the performance period.




Performance Unit Component Performance Levels




I


n 2020, the HR Committee established relative TSR and three-year average ROE as the performance metrics for the 2020-2022 performance period, each representing 50% of the named executive officer’s target performance-based LTI grant. These metrics and their weighting are consistent with performance awards for the period 2019-2021. The HR Committee established the 2020-2022 relative TSR performance levels as (i) threshold of 25th percentile; (ii) target of 50th percentile; and (iii) maximum of 75th percentile, which are unchanged from 2019-2021 relative TSR performance levels and are consistent with the relative TSR performance threshold, target, and maximum levels established by several of the Company's peers.




The HR Committee defined ROE as PBT, adjusted for non-controlling income or loss, divided by equity. “Equity” is defined as total stockholder’s equity, excluding non-controlling interest, adjusted for accumulated other comprehensive income or loss. Any share repurchases executed during the performance period reduce stockholders’ equity. The HR Committee established the 2020-2022 three-year average ROE threshold, target, and maximum performance levels as 9.0%, 12.5% and 14.5%, respectively. These performance levels were increased from those applicable in 2019-2021 and were set after a rigorous analysis of leasing industry ROE history, the Company’s ROE history, and the Company's 3-year financial forecast. Please refer to “Incentive Compensation Overview” for a description of the HR Committee’s performance goal-setting process.




Table 7: Performance Levels for the Performance Unit Program









chart-90da517c266b467ea4f1a.jpg
chart-e5aa5f30b81642fd9731a.jpg
chart-7265606a659746fdb491a.jpg
chart-1c23002a6814422e8121a.jpg









Performance Unit Program Grants in 2020




In 2020, the named executive officers were granted 80% of their respective target LTI compensation as Performance Units, which is a heavier than our peer average of 51% as shown in Table 6. At the end of the 2020-2022 performance period, for both relative TSR and three-year average ROE components combined, the named executive officers can earn from 30% of the target grant at the threshold performance level up to 200% of the target grant at the maximum



































































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performance level. If the Company achieves target relative TSR and target three-year average ROE, the named executive officers will retain 100% of their grant. The named executive officers will retain 0% of the target grant if the Company does not achieve the threshold performance levels. For Company performance falling between the performance levels, the amount of the grant awarded is linearly interpolated. See the “Grants of Plan-Based Awards Table” for the specific number of Performance Units granted to each named executive officer in 2020 under the Performance Unit Program. The relative TSR portion of the 2020 Performance Unit payout will be capped at 100% of target if the three-year annualized relative TSR is negative over the performance period.




Time-Based Restricted Stock Unit Grants in 2020




In 2020, the named executive officers were granted 20% of their respective target LTI compensation as time-based RSUs. These units were granted to reflect the HR Committee’s desire for long-term retention of the key executives. These time-based restricted stock units are expected to vest in equal installments on May 15, 2023 and 2024 if the named executive officer remains an employee with the Company on such dates or if they retire six months after grant date and attain age sixty and ten years of service. These units are non-voting and do not receive dividends during the vesting period.










The Company made one-time equity awards to certain named executive officers in 2020, primarily due to the role changes described above. As the new CEO, Ms. Savage received a new-hire equity award of stock options and time-based RSUs. In addition, the HR Committee approved additional retention-based grants for Mr. Marchetto, Mr. Madison, and Mr. Mitchell. Details supporting these one-time awards are outlined below.

























































Named Executive



2020 One-Time LTI Award Type



Supporting Details



E. Jean Savage



300,000 Non-qualified Stock Options vesting in February 2023 and 50,000 RSUs vesting 50% in February 2022 and 50% in February 2023



To attract Ms. Savage to the CEO role, the Company offered a sign-on LTI grant.



Eric R. Marchetto



47,439 time-based RSUs vesting 1/3 per year in January 2023, January 2024, and January 2025



Mr. Marchetto has a wealth of financing and industry knowledge that is critical as the Company works to enhance value for its stockholders and customers and capture the synergies from its integrated rail platform. This award provides strong retention through a five year vesting period.



Brian D. Madison



14,382 time-based RSUs vesting 1/3 per year in May 2021, 2022 and 2023



Mr. Madison has a proven track record as an outstanding leader of the railcar leasing business. His total target compensation is below the targeted range and this award improved the competitive position of his overall 2020 compensation.



Gregory B. Mitchell



7,191 time-based RSUs vesting 1/3 per year in May 2021, 2022 and 2023



Mr. Mitchell's award was in recognition of his role as Chief Commercial Officer as well as to provide strong retention for his high level oversight and knowledge of the Highway Products group while the legal activity related to this business is managed.











Treatment of Equity Awards in Connection with the Spin-off of Arcosa




2017-2019 Performance Unit Performance




Performance levels for the 2017-2019 Performance Unit grants were set at cumulative three-year EPS and return on operating capital (“ROOC”) levels for the 2017-2019 performance period as shown in Table 7 above. Participants had an opportunity to earn from 30% of the target grant by attaining threshold EPS and ROOC performance to 200% of the target grant by attaining maximum EPS and ROOC performance. Because of the spin-off of Arcosa, the total EPS and ROOC performance of the 2017-2019 Performance Units was assessed to be 158% of target based on the Company's forecast at the time of the HR Committee’s determination prior to the spin-off. After the performance adjustment, the awards became time-based restricted stock units that vested over the remaining vesting period, which ended on May 15, 2020. ROOC was defined as profit before taxes divided by the Company’s property, plant and equipment, net working capital, and goodwill and intangible assets.




Except for basing the remainder of the Performance Unit period for 2017-2019 on the September 2018 forecast as described above, the HR Committee did not exercise any positive or negative discretion regarding the Performance Units for 2017-2019.



































































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Executive Perquisites




There is no executive perquisite allowance program in 2020. Named executive officers are encouraged to have a physical examination each year that is paid for by the Company.




Post-employment Benefits




The Company’s retirement, savings, and transition compensation plans are designed to assist executives in the transition from active employment. The HR Committee believes these plans assist in recruiting and retaining senior executives and facilitate employment transition. Each of the plans is discussed in the “Compensation of Executives” section of this proxy statement. The Company’s retirement, savings, and transition compensation plans for the named executive officers consist of the following:




•    Trinity Industries, Inc. Standard Pension Plan (the “Standard Pension Plan”) - a funded, tax qualified, non-contributory defined benefit pension plan that covers certain of the Company’s employees, including certain of the named executive officers. Earnings are capped by the Internal Revenue Code of 1986, as amended (the “Code”), for those defined as “highly compensated employees.”




Effective March 31, 2009, the Board amended the Standard Pension Plan to reduce future pension costs. Under this amendment, all future benefit accruals under the Standard Pension Plan automatically ceased for all participants, and the accrued benefits under the Standard Pension Plan were determined and frozen as of that date. The amendment to the Standard Pension Plan did not affect other benefits earned by participants prior to March 31, 2009. No new participants have been added to the Standard Pension Plan since it was frozen.




Effective December 31, 2019, the Standard Pension Plan was terminated. Consequently, upon completion of the termination and annuitization of the Standard Pension Plan in December 2020, the Company no longer has any remaining funded pension plan obligations.




•    Trinity Industries, Inc. Profit Sharing 401(k) Plan (the “401(k) Plan”) - a voluntary, tax qualified, defined contribution plan that covers most of the Company’s employees, including the named executive officers, and includes a Company match for a portion of each employee’s contribution.




The 401(k) Plan permits employees to elect to set aside a portion of their compensation (subject to the maximum limit on the amount of compensation permitted by the Code to be deferred for this purpose) in a tax exempt trust maintained pursuant to a retirement plan qualified under Code Section 401(a). Prior to August 1, 2020, depending upon years of service, the Company could match up to 50% of a participant’s deferred compensation not to exceed 6% of the employee’s compensation. For employees eligible to participate in the annual retirement contribution under the 401(k) Plan, the Company could contribute up to an additional 3% of the employee’s compensation (subject to the maximum limit permitted by the Code) depending upon years of service. Effective August 1, 2020, the 401(k) Plan was modified to: (i) become a “safe-harbor” plan with eligible participants receiving company matching contributions of 100% of a participant’s deferred compensation not to exceed 6% of the employee’s compensation (subject to the maximum limit permitted by the Code), (ii) eliminating the years of service component for these company matching contributions and (iii) eliminating the annual retirement contribution from the 401(k) Plan.




•    Trinity Industries, Inc. Deferred Compensation Plan (previously known as the Supplement Profit Sharing Plan for Employees of Trinity Industries) (the “Deferred Compensation Plan”) -


a supplemental deferred compensation plan, that includes certain employer contribution provisions, for highly compensated employees, including the named executive officers, that allows them to defer a portion of their base pay and annual incentive and includes a Company match for a portion of their contribution


.




•    Transition Compensation Plan (the “Transition Compensation Plan”) - a plan designed to facilitate a smooth transition when a senior executive separates from service with the Company. The Transition Compensation Plan is a long-term plan whereby an amount equal to 10% of a participant’s salary and annual incentive compensation was set aside each year in an account on the books of the Company. The account is credited monthly with an interest rate equivalent as determined annually by the HR Committee (5% for 2020). Effective January 1, 2019, Company contributions to the Transition Compensation Plan were discontinued when the account balance reached two times January 1, 2019 base salary plus 2019 target annual incentive. Effective May 4, 2020, the Transition Compensation Plan was frozen to new participants and the annual 10% contribution of salary and annual incentive compensation ceased. The accounts will continue to earn interest at the annually approved rate. The account is payable to the participant in a lump sum or annual installments from one to 20 years as elected by the participant, commencing on the one year anniversary of the participant’s separation from service, subject to compliance with the following conditions, unless in the event of the participant’s death, disability or a change in control (as such terms are defined in the Transition Compensation Plan):



































































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(i)    The participant must give at least six months advance written notice of intent to transition out of his or her position and must work with the CEO, the Board, or its designee to develop and implement an agreed-on succession process to facilitate the smooth transition of the participant’s duties and responsibilities to his or her successor.




(ii)    For a minimum of one year after completing the required transition, the participant must be available to the Company for consultation, at mutually agreed remuneration, regarding the Company’s business and financial affairs.




(iii)    For one year after separation from service, the participant may not, directly or indirectly, become or serve as an officer, employee, owner or partner of any business which competes in a material manner with the Company, without the prior written consent of the CEO, the Chairman of the HR Committee, the Board, or its designee.




A breach of any of the foregoing conditions will cause the forfeiture of any remaining unpaid amounts. Notwithstanding the foregoing, in the event of a participant’s separation from service due to death, disability or a change in control of the Company, the conditions set forth above shall be of no force and effect. Payment will commence in accordance with the participant’s election. If no election is made, payment will be made as a lump sum on the one year anniversary of the participant’s separation from service.




Named executive officers who participate in the Transition Compensation Plan are Mr. Marchetto, Ms. Lovett, Mr. Madison, and Ms. Teachout.




Change in Control Agreements




The Board has determined that it is appropriate to reinforce and encourage the continued attention and dedication of members of the Company’s management to the interests of stockholders without distraction in potential circumstances arising from the possibility of a change in control of the Company. Accordingly, the Company has a change in control agreement with Mses. Savage, Lovett and Teachout and Messrs. Marchetto, Madison, Mitchell and West. The original agreements had a three-year term and may be extended. The agreements provide for payment to the named executive officers of a lump sum equal to two times (three times for Ms. Savage) the executive’s base salary plus the target annual bonus in effect upon the change of control, or if higher, at the time of termination. The severance benefits provided by the change in control agreements also include, for 24 months after termination, continuation of all medical, dental, vision, health, and life insurance benefits being provided to the named executive officer at the time of termination of employment and a lump sum equivalent to the amount of income tax payable due to the continuation of insurance benefits.




The change in control agreements contain a “double trigger” provision that requires both a change in control of the Company and a qualifying termination of the named executive officer’s employment before cash compensation will be paid under the agreement. A qualifying termination of employment must be in connection with a change in control or within two years following a change in control where the named executive officer is terminated without “cause” or the named executive officer terminates his or her employment for “good reason” (a “Qualifying Termination”). In addition, the agreements contain a non-compete provision to protect the Company’s business goodwill. Further, the named executive officer is required to execute a release of claims against the Company to receive compensation under the agreement.




The change in control agreements provide for the single trigger of a change in control for vesting of equity awards granted prior to January 1, 2019 and provide for the Qualifying Termination double-trigger for vesting for equity awards granted on or after January 1, 2019. Vesting of retirement and deferred compensation benefits under the Company’s non-qualified retirement and deferred compensation plans is accelerated upon the Qualifying Termination double trigger.




The change in control agreements do not include excise tax gross ups. Instead, if any payment to which the named executive officer is entitled would be subject to the excise tax imposed by Section 4999 of the Code, then the named executive officer shall be solely responsible for the payment of all income and excise taxes due from the named executive officer and attributable to such payment, with no right of additional payment from the Company as reimbursement for any excise taxes.




The Company considers the compensation payable under the agreements upon specified events of termination following a change in control to be appropriate in light of the industries in which it is engaged, the limited number of companies in many of those industries, and the uncertain length of time necessary to find new employment. The level of payments and benefits provided under the change in control agreements are considered appropriate. These benefits are recognized as part of the total compensation package and are reviewed periodically, but are not specifically considered by the HR Committee when making changes in base salary, annual incentive compensation, or long-term incentive compensation. The change in control severance benefits are discussed in the Compensation of Executives section under “Potential Payments Upon Termination or Change in Control.” The Company does not have severance agreements with named executive officers other than the change in control agreements.



































































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Health and Welfare Benefits




The Company-supported medical plan; life insurance; and long-term disability plan; employee-paid dental, vision, critical illness insurance; and supplemental life insurance are substantially similar for the named executive officers as for all full-time employees. The Company does not provide health benefits to retirees.




Compensation-Related Policies and Positions




Internal Equity Regarding CEO Compensation




The HR Committee follows the same processes and methods disclosed herein to establish the compensation for all other named executive officers as it does in recommending to the independent directors the compensation package for the CEO. As noted previously, the CEO is compared to other executives in comparable positions in the Peer Survey Data. Since the CEO of the Company has a unique and greater set of responsibilities as compared to the other named executive officers, including ultimate responsibility for the overall success of the Company, the Board does not consider the CEO’s compensation to be comparable to the compensation of the other named executive officers


.




Recoupment on Restatement




The Board has adopted a Company policy that allows payouts to be recouped under annual and/or long-term incentive plans if the financial statements on which they are based are subsequently required to be restated as a result of errors, omissions, fraud, or other misconduct. The policy provides discretion to the HR Committee to make such determinations while providing a framework to guide their decisions.




Stock Ownership Requirements; Anti-Hedging/Anti-Pledging Policy




Stock ownership requirements have been adopted that require the CEO to maintain ownership of Company Common Stock valued at six times base salary, the other named executive officers at three times base salary, and the Board at five times annual cash retainer. Stock ownership is defined as (i) stock owned without restrictions; (ii) shares or units granted on which restrictions remain, including restricted shares that vest at retirement; (iii) shares or share equivalents held in a qualified or non-qualified profit sharing plan; and (iv) equivalent shares determined from vested, in-the-money stock options. Individuals subject to the stock ownership requirements have five years to achieve compliance with the ownership requirements, subject to extensions in limited circumstances. Prior to achieving compliance by the applicable compliance date, the named executive officers may sell up to 50% of shares received from each award that vests after becoming subject to stock ownership requirements. The named executive officers and the directors are all in compliance with the Company’s stock ownership requirements or are within the time period allowed to achieve compliance.




The Company has also adopted a policy prohibiting officers, directors, such additional persons as may be recommended by the Company’s Disclosure Committee and approved by the CEO and CFO, and their respective related persons from (i) selling Company securities short, (ii) pledging or hypothecating any Company securities (e.g., using such securities for margin loans or to collateralize other indebtedness), or (iii) engaging in derivative transactions, including without limitation hedging, puts, and calls, involving Company securities. Other than with regard to the specified persons above, the Company does not have a policy regarding the ability of its employees to hedge or pledge Company securities, including with respect to the types of transactions identified in Item 407(i)(1) of Regulation S-K.




Tax Deductibility under Code Section 162(m)




Section 162(m) of the Code generally imposes a $1 million deduction limitation on compensation paid to certain executive officers of a publicly-held corporation during the year. The executive officers to whom the Section 162(m) deduction limit applies include the Company’s Chief Executive Officer and Chief Financial Officer, the next three most highly compensated executive officers, and any such “covered employee” for a year after 2016. The Compensation Committee reserves discretion to award compensation that is not deductible under Section 162(m), as the Compensation Committee deems appropriate.




Conclusion




The HR Committee believes the executive compensation program provides appropriate incentives for each named executive officer to strive for the Company’s achievement of exceptional operating results and concurrent preservation of, and improvements to, the Company’s financial condition, thereby clearly aligning each executive’s potential compensation with the long-term interests of stockholders. In summary, the Company’s executive compensation program contributes to a high-performance culture where executives are expected to deliver results that promote the Company’s position as an industry-leading integrated railcar leasing, manufacturing, and services business.



































































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Human Resources Committee Report






We have reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and based on such review and discussions, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.




Human Resources Committee




Leldon E. Echols, Chair




Brandon B. Boze




Tyrone M. Jordan




S. Todd Maclin




Charles W. Matthews





















































































































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Compensation of Executives








Summary Compensation Table




The following table and accompanying narrative disclosure should be read in conjunction with the Compensation Discussion and Analysis, which sets forth the objectives of the Company’s executive compensation programs.




The “Summary Compensation Table” below summarizes the total compensation paid to or earned by each of the named executive officers for the fiscal years ended December 31, 2020, 2019, and 2018.




From January 1, 2020, until Ms. Savage was appointed Chief Executive Officer and President, the Company was managed by an interim Office of the Chief Executive Officer comprised of Ms. Lovett, Mr. Marchetto, and Ms. Teachout.




Summary Compensation Table



































































































































































































































































































































































































































































































































































































































































































































































































































































Name and Principal Position


(1)





Year





Salary


(2)


($)





Bonus ($)





Stock Awards


(3)


($)






Stock Options


(3)


($)






Non-Equity Incentive Plan Compensation


(4)


($)






Change in Pension Value and Nonqualified Deferred Compensation Earnings


(5)






($)






All Other Compensation


(6)


($)





Total


($)






E. Jean Savage




President and Chief Executive Officer





2020




$



741,026





$









$



4,361,717





$



1,578,000





$



110,925





$



5,586





$



70,828





$



6,868,081











































Eric R. Marchetto




Executive Vice President and Chief Financial Officer





2020




562,000











2,050,047











67,500





3,374





54,885





2,737,806







2019




535,417





37,500





899,243











442,000





63,000





131,253





2,108,413







2018




412,000





337,500





436,899











294,150











62,162





1,542,711







Melendy E. Lovett




Executive Vice President and Chief Administrative Officer





2020




520,000











957,017











61,500





19,492





38,918





1,596,927





2019




491,667











799,320











416,000





9,420





113,624





1,830,031





2018




435,000





150,000





1,740,734











337,995





5,508





124,302





2,793,539







Brian D. Madison




Executive Vice President, Services Operations





2020




425,000











901,599











45,000





2,241





34,217





1,408,057













































Sarah R. Teachout




Executive Vice President and Chief Legal Officer





2020




450,000











732,825











48,000





2,560





40,252





1,273,637








2019




430,000





250,000





849,450











312,000











94,418





1,935,868





















































































Gregory B. Mitchell




Executive Vice President and Chief Commercial Officer





2020




405,000











560,170











32,250











9,975





1,007,395













































Neil J. West




Executive Vice President, Production Operations





2020




375,625











492,188











32,344











20,576





920,733



























































































(1)


Ms. Savage, then a member of the Board of Directors, was appointed Chief Executive Officer and President of the Company, effective February 17, 2020. Upon accepting the Company's offer of employment, she resigned from her membership on the Company's Audit Committee, Finance and Risk Committee, and Human Resources Committee.




(2)    For Marchetto, Madison, Teachout, and West $28,100; $25,500; $45,000; and $30,050, respectively, of the above amount was deferred pursuant to the Deferred Compensation Plan and also is reported in the “Nonqualified Deferred Compensation Table.”




(3)    Equity awards are the grant date fair value dollar amounts computed in accordance with ASC Topic 718. The policy and assumptions made in the valuation of share-based payments are contained in Note 13 of Item 8 of the Annual Report on Form 10-K for the year ended December 31, 2020. The amounts reported above include grants of performance-based restricted stock units under the Performance Unit Program for the 2020-2022 performance period at target value for Savage $2,681,204; Marchetto $858,016; Lovett $782,016; Madison $491,583; Teachout $598,820; Mitchell $335,155; and West $402,179. The potential maximum values for the grants under the Performance Unit Program are for Savage $5,362,409; Marchetto $1,716,033; Lovett $1,564,033; Madison $983,167; Teachout $1,197,640; Mitchell $670,311; and West $804,357.




(4)    Non-equity incentive plan compensation represents cash awards earned during 2020 under the 2020 Annual Incentive Program based on goal achievements. For 2020, for Marchetto, Madison, Teachout, and West $40,760; $17,676; $51,600; and $14,600; respectively, of the above amount was deferred pursuant to the Deferred Compensation Plan and is also reported in the “Nonqualified Deferred Compensation Table.”




(5)    This column represents both changes in deferred plan for director fees for the named executive officers, as well as above market earnings on deferred compensation. For 2020 for Marchetto, Lovett, Madison, and Teachout, the above market earnings on nonqualified deferred compensation under the Transition Compensation Plan were $3,374; $19,492; $2,241, and $2,560, respectively. The above market earnings on the 2005 deferred plan for director fees for Savage was $5,586.




Consequently, upon completion of the termination and annuitization of the Standard Pension Plan, in December 2020, the Company no longer has any remaining funded pension plan obligations. Effective May 4,



































































Trinity Industries, Inc.






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2021 Proxy Statement










EXECUTIVE COMPENSATION





2020, the Transition Compensation Plan was frozen to new participants and the annual 10% contribution of salary and annual incentive compensation ceased.




(6)    The following table is a breakdown of all other compensation included in the “Summary Compensation Table” for the named executive officers:




All Other Compensation












































































































































































































































































































































































































































































































































































































































































































Name





Year






Executive Perquisite Allowance


(1)







Perquisites and Other Personal Benefits


(2)







Company Contributions to Defined Contribution Plans


(3)







Executive Transition Compensation Plan


(4)






Total All Other Compensation





E. Jean Savage





2020





$










$



69,165






$



1,663






$










$



70,828










































Eric R. Marchetto





2020



















33,902






20,983






54,885







2019



















33,511






97,742






131,253







2018





30,000













32,162













62,162






Melendy E. Lovett





2020












10,890






8,645






19,383






38,918






2019












8,857






14,000






90,767






113,624






2018





30,000






5,452






11,550






77,300






124,302






Brian D. Madison





2020



















18,550






15,667






34,217


















































Sarah R. Teachout





2020



















23,652






16,600






40,252






2019



















20,218






74,200






94,418
























Gregory B. Mitchell





2020



















9,975













9,975
















































Neil J. West





2020



















20,576













20,576

















































(


1)    Represents the amounts payable pursuant to the executive perquisite allowance, which was discontinued for 2019.




(2)    Represents the dividends earned in 2020 under the amended 2005 Deferred Plan for Director Fees and $64,165 in relocation expenses for Savage.




(3)    Represents the Company’s matching amounts and the Annual Retirement Contribution under the Company’s 401(k) Plan for 2020 for Savage $1,663; Marchetto $8,313; Lovett $8,645; Madison $9,442; Teachout $9,536; Mitchell $9,975; and West $12,263 and under the Company’s Deferred Compensation Plan for 2020 Marchetto $25,589; Madison $9,108; Teachout $14,116; and West $8,313.




(4)    Effective May 4, 2020, the Transition Compensation Plan was frozen to new participants and the annual 10% contribution of salary and annual incentive compensation ceased. Represents a prorated amount equal to 10% of the salaries and annual incentive compensation set aside pursuant to the Transition Compensation Plan. These amounts also are included in the “Nonqualified Deferred Compensation Table.” Marchetto, Lovett, Madison, and Teachout participate in the Transition Compensation Plan, which is an unfunded long-term plan whereby an amount equal to 10% of salary and annual incentive compensation was set aside in an account on the books of the Company. The account is credited monthly with an interest rate equivalent as determined annually by the HR Committee (5% for 2020). The account is payable to the participant in a lump sum or annual installments from one to 20 years, subject to compliance with the following conditions, unless in the event of the participant's death, disability or a change in control (as such terms are defined in the Transition Compensation Plan):




(i)    The participant must give at least six months advance written notice of intent to transition out of his or her position and must work with the CEO, the Board, or its designee to develop and implement an agreed-on succession process to facilitate the smooth transition of the participant’s duties and responsibilities to his or her successor.




(ii)    For a minimum of one year after completing the required transition, the participant must be available to the Company for consultation, at mutually-agreed remuneration, regarding the Company’s business and financial affairs.




(iii)    For one year after separation from service, the participant may not, directly or indirectly, become or serve as an officer, employee, owner or partner of any business which competes in a material manner with the Company, without the prior written consent of the CEO, the Chair of the HR Committee, the Board, or its designee.



































































Trinity Industries, Inc.






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2021 Proxy Statement












EXECUTIVE COMPENSATION





Grants of Plan-Based Awards




The following table summarizes the 2020 grants of equity and non-equity plan-based awards for the named executive officers.




Grants of Plan-Based Awards Table

























































































































































































































































































































































































































































































































































































































































































































Name




Grant Date


(1)





Estimated Possible Payouts and Future Payouts Under Non- Equity Incentive Plan Awards


(2)





Estimated Future Payouts Under Equity Incentive Plan Awards


(3)




All Other Stock Awards Number of Shares of Stock or Awards (#)



All Other Option Awards Number of Securities Underlying Options (#)



Exercise or Base Price of Option Awards (#)




Grant Date Fair Value of Stock Awards


(4)


($)




Threshold ($)



Target ($)



Maximum ($)




Threshold


(5)


(#)




Target (#)



Maximum (#)



E. Jean Savage














2020 Annual Incentive Plan: Profit Before Tax




$



220,001




$



628,575




$



1,257,150











2020 Annual Incentive Plan: Organization Design









110,925




110,925











2020 Equity Awards - Stock Option



02/17/20










300,000




21.61




1,578,000




2020 Equity Awards - Time Based



02/17/20









50,000






1,080,500




2020 Equity Awards - Time Based



05/04/20









33,004






600,013




2020 Equity Awards - Performance ROE



05/04/20






19,802




66,007




132,014







1,050,171




2020 Equity Awards - Performance TSR



05/04/20






19,802




66,007




132,014







1,631,033




Total




220,001




739,500




1,368,075




39,604




132,014




264,028




83,004




300,000





5,939,717




Eric R. Marchetto














2020 Annual Incentive Plan: Profit Before Tax




133,875




382,500




765,000











2020 Annual Incentive Plan: Organization Design









67,500




67,500























2020 Equity Awards - Time Based



01/30/20









47,439






1,000,014




2020 Equity Awards - Time Based



05/04/20









10,562






192,017




2020 Equity Awards - Performance ROE



05/04/20






6,337




21,123




42,246







336,067




2020 Equity Awards - Performance TSR



05/04/20






6,337




21,123




42,246







521,949




Total




133,875




450,000




832,500




12,674




42,246




84,492




58,001






2,050,047




Melendy E. Lovett














2020 Annual Incentive Plan: Profit Before Tax




121,975




348,500




697,000











2020 Annual Incentive Plan: Organization Design









61,500




61,500























2020 Equity Awards - Time Based



05/04/20









9,626






175,001




2020 Equity Awards - Performance ROE



05/04/20






5,776




19,252




38,504







306,299




2020 Equity Awards - Performance TSR



05/04/20






5,776




19,252




38,504







475,717




Total




121,975




410,000




758,500




11,552




38,504




77,008




9,626






957,017




Brian D. Madison














2020 Annual Incentive Plan: Profit Before Tax




89,250




255,000




510,000











2020 Annual Incentive Plan: Organization Design









45,000




45,000























2020 Equity Awards - Time Based



01/23/20









14,382






300,009




2020 Equity Awards - Time Based



05/04/20









6,051






110,007




2020 Equity Awards - Performance ROE



05/04/20






3,631




12,102




24,204







192,543




2020 Equity Awards - Performance TSR



05/04/20






3,631




12,102




24,204







299,040




Total




89,250




300,000




555,000




7,262




24,204




48,408




20,433






901,599





































































Trinity Industries, Inc.






39






2021 Proxy Statement










EXECUTIVE COMPENSATION

























































































































































































































































































































































































































































































































Sarah R. Teachout














2020 Annual Incentive Plan: Profit Before Tax




95,200




272,000




544,000











2020 Annual Incentive Plan: Organization Design









48,000




48,000























2020 Equity Awards - Time Based



05/04/20









7,371






134,005




2020 Equity Awards - Performance ROE



05/04/20






4,423




14,742




29,484







234,545




2020 Equity Awards - Performance TSR



05/04/20






4,423




14,742




29,484







364,275




Total




95,200




320,000




592,000




8,846




29,484




58,968




7,371






732,825




Gregory B. Mitchell














2020 Annual Incentive Plan: Profit Before Tax




63,963




182,750




365,500











2020 Annual Incentive Plan: Organization Design









32,250




32,250























2020 Equity Awards - Time Based



01/23/20









7,191






150,004




2020 Equity Awards - Time Based



05/04/20









4,126






75,011




2020 Equity Awards - Performance ROE



05/04/20






2,475




8,251




16,502







131,273




2020 Equity Awards - Performance TSR



05/04/20






2,475




8,251




16,502







203,882




Total




63,963




215,000




397,750




4,950




16,502




33,004




11,317






560,170




Neil J. West














2020 Annual Incentive Plan: Profit Before Tax




64,148




183,281




366,563











2020 Annual Incentive Plan: Organization Design









32,344




32,344























2020 Equity Awards - Time Based



05/04/20









4,951






90,009




2020 Equity Awards - Performance ROE



05/04/20






2,970




9,901




19,802







157,525




2020 Equity Awards - Performance TSR



05/04/20






2,970




9,901




19,802







244,654




Total




64,148




215,625




398,907




5,940




19,802




39,604




4,951






492,188






(


1)    The grant date of all stock awards is the date of the HR Committee meeting or Board meeting at which such award was approved.




(2)    Represents the potential amounts payable in 2021 under the 2020 annual incentive program for attainment of performance goals. As previously noted, the awards under the 2020 annual incentive program paid at 15% of the overall performance target, which is based on the components of PBT and a qualitative evaluation of the success of the organizational design project.




(3)    For 2020 equity awards, represents the number of performance-based restricted stock units that were awarded in May 2020 to each of the named executive officers as performance-based awards based on financial performance for 2020 through 2022. These units are earned and vest as discussed below.




(4)    The grant date fair value of the stock awards is calculated in accordance with ASC Topic 718.




(5)    Represents threshold payment if threshold relative TSR and ROE is achieved.






Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table




The stock awards described in the “Summary Compensation Table” are the dollar amounts of the grant date fair value of the awards calculated in accordance with ASC Topic 718. The following discussion contains statements regarding future performance goals. These statements are solely disclosed in the limited context of the Company’s compensation program and should not be considered as statements of the Company’s expectations or estimates. The Company specifically cautions investors not to apply these statements in other contexts.




The equity awards granted in May 2020 to the named executive officers were grants of 80% performance-based restricted stock units and 20% time-based restricted stock units, all granted pursuant to the Stock Plan. The performance-based restricted stock unit awards were made at the target amount for each named executive officer. Recipients of the performance-based restricted stock units will not earn any such units unless the Company achieves (i) threshold performance level of 25th percentile of the annualized relative TSR measured against the average three-year annualized TSR of the companies comprising the S&P MidCap 400 index or (ii) 2020-2022 three-year average ROE of 9.0%. Recipients may earn the following percentages of the target grant amount: (i) 30% of the target grant for threshold performance (25th percentile of relative TSR measured against S&P MidCap 400 index and 2020-2022 three-year average ROE of 9.0%); (ii) 100% of the target grant for target performance (50th percentile of relative TSR measured against S&P MidCap 400 index and 2020-2022 three-year average ROE of 12.5%); and (iii) 200% of the target grant for maximum performance (75th percentile of relative TSR measured against S&P MidCap 400 index and 2020-2022 three-



































































Trinity Industries, Inc.






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2021 Proxy Statement










EXECUTIVE COMPENSATION





year average ROE of 14.5%). For performance falling between the specified levels, the amount of units earned will be interpolated accordingly. During the performance period, recipients do not earn dividends on, and are not entitled to vote with respect to, the performance-based restricted stock units.




In 2020, the named executive officers were granted 20% of their respective target LTI compensation as time-based restricted stock units. These units were granted to reflect the HR Committee’s desire to ensure the long-term commitment of key executives to build stockholder value. These time-based restricted stock units will vest in equal installments on May 15, 2023 and 2024 if the named executive officer remains an employee on such dates. During the vesting period, recipients do not earn dividends on, and are not entitled to vote with respect to, the time-based restricted stock units. Dividends on these units are accrued and paid upon vesting.




Each performance-based restricted stock unit earned will convert into either one share of Common Stock or the cash value of one share of Common Stock and vest on May 15, 2023. In the event of death or disability occurring prior to the third anniversary of the date of grant, the performance metrics will be assumed to have been met at target, with the actual number of shares to be awarded determined by multiplying the target grant by a fraction, the numerator of which is the number of days since the date of grant to the date of death or disability and the denominator of which is the number of days in the full performance period. In the event of a change in control of the Company, the performance metrics will be assumed to have been met at target level and the recipients will earn the target grant of units. In the event of retirement or termination without cause prior to the third anniversary of the date of grant, the number of performance-based restricted stock units earned will be based on the level of achievement for the entire performance period, multiplied by a fraction, the numerator of which is the number of days from the date of grant to the date of retirement or termination without cause, and the denominator of which is the number of days in the full performance period. However, in the event of such a retirement or termination without cause, all units earned (and shares payable with respect thereto) are subject to forfeiture, at the discretion of the HR Committee, if the recipient of the grant is affiliated in certain respects with a competitor, customer, or supplier of the Company.




In January 2020, the named executive officers Marchetto, Madison, and Mitchell were granted additional LTI compensation as time-based restricted stock units. These units were granted to reflect the HR Committee’s desire to


ensure the long-term commitment of key executives to build stockholder value. These time-based restricted stock units will vest in equal installments for Marchetto on January 30, 2023, 2024, and 2025; Madison and Mitchell on May 15, 2021, 2022, and 2023 if


the named executive officer remains an employee on such dates. During the vesting period, recipients do not earn dividends on, and are not entitled to vote with respect to, the time-based restricted stock units. Dividends on these units are accrued and paid upon vesting.




Non-equity incentive plan awards for 2020 to the named executive officers were based on 15% of each participant's 2020 target AIP earned based on the successful organizational design project. As performance was below the threshold level, the named executive officers did not earn any 2020 AIP for the PBT metric.




See “Setting 2020 Annual Incentive Compensation Performance Levels” under “Compensation Discussion and Analysis” above for a description of the goals.




The Company has a 401(k) Plan that permits employees to elect to set aside a portion of their compensation (subject to the maximum limit on the amount of compensation permitted by the Code to be deferred for this purpose) in a tax exempt trust maintained pursuant to a retirement plan qualified under Code Section 401(a). Prior to August 1, 2020, depending upon years of service, the Company could match up to 50% of a participant’s deferred compensation not to exceed 6% of the employee’s compensation. For employees eligible to participate in the annual retirement contribution under the 401(k) Plan, the Company could contribute up to an additional 3% of the employee’s compensation (subject to the maximum limit permitted by the Code) depending upon years of service. Effective August 1, 2020, the 401(K) Plan was modified to: (i) become a “safe-harbor” plan with eligible participants receiving company matching contributions of 100% of a participant’s deferred compensation not to exceed 6% of the employee’s compensation (subject to the maximum limit permitted by the Code), (ii) eliminating the years of service component for these company matching contributions and (iii) eliminating the annual retirement contribution from the 401(k) Plan.




Base salary and annual incentive compensation in 2020 represented from


12.4% to 44.3% of the


named executive officers’ total compensation as reflected in the “Summary Compensation Table.”






Outstanding Equity Awards at Year-End




The following table summarizes as of December 31, 2020, for each named executive officer, the number of shares of unvested restricted stock and the number of shares underlying stock options. The market value of the stock awards was based on the closing price of the Common Stock as of December 31, 2020, which was $26.39.



































































Trinity Industries, Inc.






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EXECUTIVE COMPENSATION





Outstanding Equity Awards at Fiscal Year-End Table

















































































































































































































































































































































































Option Awards



Stock Awards



Name




Number of Securities Underlying Unexercised Options Exercisable




(#)





Number of Securities Underlying Unexercised Options Unexercisable


(1)




(#)





Option Exercise Price




($)





Option Expiration Date





Number of Shares or Units of Stock That Have Not Vested




(#)





Market Value of Shares or Units of Stock That Have Not Vested


($)





Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested




(#)






Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested






($)




E. Jean Savage




300,000



$



21.61




2/17/2030



83,004




$



2,190,476











(3)




$



















(2)




$









151,816





(4)




$



4,006,424




Eric R. Marchetto







98,402




$



2,596,829





37,232





(3)




$



982,552









6,648




(2)




$



175,441





48,583





(4)




$



1,282,105




Melendy E. Lovett







88,133




$



2,325,830





33,095





(3)




$



873,377









11,524




(2)




$



304,118





44,280





(4)




$



1,168,549




Brian D. Madison







37,574




$



991,578





16,549





(3)




$



436,728









4,823




(2)




$



127,279





27,835





(4)




$



734,566




Sarah R. Teachout







27,979




$



738,366





26,889





(3)




$



709,601









3,546




(2)




$



93,579





33,907





(4)




$



894,806




Gregory B. Mitchell







43,069




$



1,136,591





14,479





(3)




$



382,101









4,876




(2)




$



128,678





18,977





(4)




$



500,803




Neil J. West







34,152




$



901,271





7,240





(3)




$



191,064









2,217




(2)




$



58,507





22,772





(4)




$



600,953






(1)    Stock options become exercisable on February 17, 2023.




(2)    Represents the market value and actual number of performance-based shares to be awarded in 2021 upon certification by the Human Resources Committee of the Board of Directors of the achievement of the financial performance goals for the cumulative performance in 2018-2020.




(3)    Represents the 2019 maximum TSR, and 2019 threshold ROE, and number or value, as applicable, of performance-based restricted stock units that could be earned if financial performance goals are achieved. The actual number of shares to be issued in 2022 will be based on the Company’s TSR and ROE from 2019 through 2021. See “Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table” and “Compensation Discussion and Analysis — Long Term Incentive Compensation.”




(4)    Represents the 2020 maximum TSR, and 2020 threshold ROE, and number or value, as applicable, of performance-based restricted stock units that could be earned if financial performance goals are achieved. The actual number of shares to be issued in 2023 will be based on the Company’s TSR and ROE from 2020 through 2022. See “Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table” and “Compensation Discussion and Analysis — Long Term Incentive Compensation.”




(5)


The following table provides the vesting date of unvested stock awards.



































































Trinity Industries, Inc.






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Vesting Date




E. Jean Savage




Eric R. Marchetto




Melendy E. Lovett




Brian D. Madison




Sarah R. Teachout




Gregory B. Mitchell




Neil J. West



05/15/21










13,335





32,563





21,017





8,236





12,710





4,447




02/17/22




25,000








































05/15/22










9,001





21,633





8,736





6,747





8,138





2,439




07/23/22