Company: MGRC
Filing Date: 2025-04-22
Form Type: DEF 14A
Source: 0000950170-25-056711
Chunk: 37

Company: MCGRATH RENTCORP
Filing Date: 2025-04-22
Form: DEF 14A
Chunk 37
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 with Compensation

Our full-year 10% growth in both revenue and Adjusted EBITDA reflects a diligent focus on execution. We navigated some tough market demand conditions in Portable Storage and TRS-RenTelco, as well as the distractions of the terminated merger with WillScot. The modular business had a good year, and we made solid progress with our modular growth initiatives for additional services and new equipment sales. We maintained our focus on pricing optimization, rental fleet utilization, disciplined rental fleet investments, and value-added services for our customers. Growth initiatives for Mobile Modular Plus, Site Related Services, and new modular equipment sales all grew compared to the prior year.

The annual incentive bonus amounts in respect of 2024 for the executive officers were based on the Company’s Adjusted EBITDA for corporate officers and division-specific Adjusted EBITDA for division officers (defined as the Company’s net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales, and non-operating transactions). Adjusted EBITDA accounted for 100% of the annual profitability bonus target in compensation plans for amounts paid out in 2024. In consideration of the then pending merger with WillScot, the Compensation Committee, in consultation with the Board of Directors and WillScot, approved RSUs which vest over three years in lieu of performance-based units (“PSUs”), a deviation from historical practices. This approach aligned with common market practices for companies in similar circumstances. The Compensation Committee has since reverted to its historical approach on equity grants (50% time-based RSUs and 50% PSUs) to executive officers subsequent to the termination of the merger and the Company continuing to operate as a standalone company.

Executive Compensation Program Design

The Compensation Committee has the responsibility for establishing, implementing, and continually monitoring the compensation of the Company’s executive officers. The Compensation Committee oversees and approves the design of the executive compensation program to ensure that the total compensation paid to our executive officers is fair, reasonable, competitive, and aligns with the goals and objectives of the Company. For the fiscal year ended December 31, 2024, the principal components of compensation for executive officers were:

Annual base salary;

Non-equity annual performance-based incentive compensation (“Annual Cash Bonus”) pursuant to the Non-Equity Performance-Based Incentive Plan (the “Cash Bonus Plan”); and

Long-term equity incentive compensation.

The Compensation Committee determined that these three elements, with a