UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.   )



 
Filed by the Registrant x
Filed by a Party other than the Registrant o

Check the appropriate box:

x Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a 6(e)(2))
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material under §240.14a-12

Ritchie Bros. Auctioneers Incorporated

(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):

x No fee required.
o Fee computed on table below per Exchange Act Rules 14a 6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0 11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:


 
 

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[GRAPHIC MISSING]

RITCHIE BROS. AUCTIONEERS INCORPORATED
9500 GLENLYON PARKWAY, BURNABY, BRITISH COLUMBIA V5J 0C6

  

Dear Fellow Shareholders,

Last year, we shared with you a message of transformation, decidedly marking the next chapter for Ritchie Bros. as we acquired IronPlanet and positioned the company to deliver a new way forward. We have made considerable progress over the past year and continue to have a clear strategy, a leading multi-channel platform poised to drive significant network effects, and a strong leadership team that is squarely focused on executing our priorities. We continue to be inspired by our noble purpose of MOVE, BUILD, GROW. Every day our team members are proudly committed to growing our business and delighting our customers. We consider ourselves enablers of commerce — by selling equipment, we help farmers grow, truckers move product and contractors build the world.

By any measure, we are proud of what we have been able to accomplish in 2018 — less than two years since the acquisition of IronPlanet. In 2018, we grew our overall gross transaction value (GTV), revenues, and net income despite continued unprecedented equipment supply challenges. It was an important year for the Company as we demonstrated our ability to execute and deliver growth in very tough market conditions while executing complex elements of our IronPlanet integration. We accomplished a great deal in 2018 and it was also a pivotal year in our future and long-term growth of Ritchie Bros. as we bolstered our solutions line up with the pioneering platforms of Marketplace-E and RB Asset Solutions while meaningfully expanding our Government business; further solidifying our business model as one that is moving beyond auctions and durably different in the marketplace.

We continue to be very excited about the future of this great Company. We have never been in a better position to grow our Company and create value for our customers and shareholders. 2019 will be another important year for the Company. We will look to fully leverage our diverse portfolio of brands and solutions and focus on our agenda of scaling our business, new customer acquisition and profitable growth through sales execution.

On May 7, 2019, Ritchie Bros. Auctioneers will host its Annual and Special Meeting of Shareholders in Vancouver. We invite all registered shareholders to attend the meeting, which will be held at its headquarters at 9500 Glenlyon Parkway, Burnaby B.C. at 11:00 am Pacific Daylight Time. During the meeting, we will provide a brief review of our 2018 achievements and our growth strategy, conduct the official business of the meeting, and welcome questions from registered shareholders.

The attached Notice of Annual Shareholders Meeting and Proxy Statement contain details of the business to be conducted at the meeting. Whether or not you attend the meeting in person, it is important your shares be represented and voted. We encourage you to read the accompanying proxy statement as it contains important information about the meeting, who is eligible to vote, how to vote, the nominated directors, our governance practices and compensation of executives and directors.

On behalf of the Board of Directors and Company management, we thank you for your continued investment in Ritchie Bros. Auctioneers and look forward to serving you in the future.

Sincerely,

[GRAPHIC MISSING]
Beverley Briscoe
Chair of the Board
Ritchie Bros. Auctioneers Incorporated
  [GRAPHIC MISSING]
Ravi Saligram
Director and Chief Executive Officer
Ritchie Bros. Auctioneers Incorporated

March 27, 2019

  


 
 

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[GRAPHIC MISSING]

RITCHIE BROS. AUCTIONEERS INCORPORATED
9500 GLENLYON PARKWAY, BURNABY, BRITISH COLUMBIA V5J 0C6

  

NOTICE OF ANNUAL AND
SPECIAL MEETING OF SHAREHOLDERS

  

TO THE SHAREHOLDERS:

NOTICE IS HEREBY GIVEN that an Annual and Special Meeting (the “Meeting”) of the shareholders of RITCHIE BROS. AUCTIONEERS INCORPORATED (the “Company”) will be held at 9500 Glenlyon Parkway, Burnaby, British Columbia, Canada, on May 7, 2019 at 11:00 a.m. (Pacific Daylight Time), for the following purposes:

1. to receive the financial statements of the Company for the financial year ended December 31, 2018 and the report of the auditors thereon;
2. to elect the directors of the Company to hold office until their successors are elected at the next annual meeting of the Company;
3. to appoint the auditors of the Company to hold office until the next annual meeting of the Company and to authorize the Audit Committee of the Board of Directors to fix the remuneration to be paid to the auditors;
4. to consider and, if deemed advisable, to approve, on an advisory basis, a non-binding advisory resolution accepting the Company’s approach to executive compensation, as more particularly described in the accompanying proxy statement;
5. to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution to ratify, confirm and approve Amendment No. 1 to the Company’s Amended and Restated Stock Option Plan to increase the maximum number of common shares of the Company reserved for issuance under the plan by an additional 5,200,000 common shares, the full text of which resolution is set out in the accompanying proxy statement;
6. to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution to ratify, confirm and approve Amendment No. 2 to the Company’s Senior Executive Performance Share Unit Plan (the “Executive PSU Plan”) to increase the maximum aggregate number of common shares of the Company reserved for issuance under the Executive PSU Plan and the Company’s Employee Performance Share Unit Plan (the “Employee PSU Plan” and together with the Executive PSU Plan, the “PSU Plans”) by an additional 1,300,000 common shares, the full text of which resolution is set out in the accompanying proxy statement;
7. to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution to ratify, confirm and approve Amendment No. 2 to the Employee PSU Plan to increase the maximum aggregate number of common shares of the Company reserved for issuance under the PSU Plans by an additional 1,300,000 common shares, the full text of which resolution is set out in the accompanying proxy statement;
8. to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution to ratify, confirm and approve Amendment No. 1 to the Company’s Amended and Restated Senior Executive Restricted Share Unit Plan (the “Executive RSU Plan”), to increase the maximum aggregate number of common shares of the Company reserved for issuance under the Executive RSU Plan and the Company’s Amended and Restated Employee Restricted Share Unit Plan (the


 
 

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“Employee RSU Plan” and together with the Executive RSU Plan, the “RSU Plans”) by an additional 500,000 common shares, the full text of which resolution is set out in the accompanying proxy statement;
9. to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolution to ratify, confirm and approve Amendment No. 1 to the Employee RSU Plan to increase the maximum aggregate number of common shares of the Company reserved for issuance under the RSU Plans by an additional 500,000 common shares, the full text of which resolution is set out in the accompanying proxy statement;
10. to consider and, if deemed advisable, to pass an ordinary resolution to ratify, confirm and approve the Company’s Amended and Restated Shareholder Rights Plan dated as of February 27, 2019 between the Company and Computershare Investor Services Inc., the full text of which resolution is set out in the accompanying proxy statement; and
11. to transact such other business as may properly be brought before the Meeting.

Further information regarding the matters to be considered at the Meeting is set out in the accompanying proxy statement.

The directors of the Company have fixed the close of business on March 13, 2019 as the record date for determining shareholders entitled to receive notice of and to vote at the Meeting. Only registered shareholders of the Company as of March 13, 2019 will be entitled to vote, in person or by proxy, at the Meeting.

Whether or not you are able to attend personally, it is important that your shares be represented and voted at the meeting. Even if you plan to attend the meeting, we urge you to vote your shares either by Internet or mail as promptly as possible so your shares will be represented at the Annual Meeting. Instructions on voting your shares are on the Notice of Internet Availability of Proxy Materials you received for the Meeting. If you received paper copies of our proxy materials, instructions on the two ways to vote your shares can be found on the enclosed proxy form. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:00 a.m. Pacific Daylight Time on May 3, 2019. To be effective, forms of proxy sent by mail must be received by Computershare Trust Company of Canada, Attention: Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, no later than 48 hours (excluding Saturdays, Sundays and holidays) before the time of the Meeting or any adjournment thereof.

All non-registered shareholders who receive these materials through a broker or other intermediary should complete and return the materials in accordance with the instructions provided to them by such broker or intermediary.

DATED at Vancouver, British Columbia, as of this 27th day of March, 2019.

By Order of the Board of Directors

[GRAPHIC MISSING]

Darren Watt
Corporate Secretary

  

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 7, 2019

The Company’s Proxy Statement and Annual Report on Form 10-K for the year ended
December 31, 2018 are available at www.rbauction.com/investors.


 
 

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RITCHIE BROS. AUCTIONEERS INCORPORATED

PROXY STATEMENT

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE MEETING, PROXY MATERIALS AND VOTING     3  
PROPOSAL ONE: ELECTION OF DIRECTORS     10  
Questions and Answers about the Election of Directors     10  
Information Concerning the Nominees to the Board of Directors     12  
Recommendation of the Board     19  
INFORMATION CONCERNING OUR EXECUTIVE OFFICERS     20  
CORPORATE GOVERNANCE     24  
Overview     24  
Structure and Members of the Board     24  
Independence of the Directors     18  
Meetings of the Board and Board Member Attendance at Annual Meeting     25  
Independent Chair     26  
Board Mandate     26  
Position Descriptions     27  
Orientation and Continuing Education     28  
Current Directors’ Continuing Education during 2018     29  
Code of Business Conduct and Ethics     29  
Shareholder and Other Interested Party Communications to the Board     30  
Executive and Chief Executive Officer Succession Planning     30  
BOARD COMMITTEES     32  
Audit Committee and Audit Committee Financial Expert     32  
Compensation Committee     32  
Nominating and Corporate Governance Committee     33  
Board Evaluations and Director Assessments     35  
Director Term Limits and Board Renewal     36  
Representation of Women on the Board and in the Director Identification and Selection Process     36  
Representation of Women in Executive Officer Appointments     36  
Corporate Governance Guidelines     38  
Board Leadership Structure     38  
Board’s Role in Risk Oversight     38  
Compensation Committee Interlocks and Insider Participation     38  

  

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OTHER MATTERS     39  
Legal Proceedings     39  
Section 16(a) Beneficial Ownership Reporting Compliance     39  
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS     40  
NON-EXECUTIVE DIRECTOR COMPENSATION     41  
Non-Executive Director Compensation Table     41  
Director Share Ownership Guidelines     42  
Non-Executive Director Deferred Share Unit Plan     43  
Non-Executive Directors Long-term Incentive Plan     44  
PROPOSAL TWO: APPOINTMENT OF ERNST & YOUNG LLP     45  
Overview     45  
Fees Billed by Independent Auditors     45  
Pre-Approval Policies and Procedures     45  
Recommendation of the Board     46  
Report of the Audit Committee     46  
PROPOSAL THREE: ADVISORY VOTE ON EXECUTIVE COMPENSATION     47  
Overview     47  
Recommendation of the Board     47  
COMPENSATION DISCUSSION AND ANALYSIS     48  
PROPOSAL FOUR: APPROVAL OF AMENDMENT No. 1 TO THE AMENDED AND RESTATED STOCK OPTION PLAN     107  
Overview     107  
Shareholder Approval and Board Recommendation     114  
PROPOSAL FIVE: APPROVAL OF AMENDMENT No. 2 TO THE EXECUTIVE PSU PLAN     116  
Overview     116  
Shareholder Approval and Board Recommendation     119  
PROPOSAL SIX: APPROVAL OF AMENDMENT No. 2 TO THE EMPLOYEE RSU PLAN     121  
Overview     121  
Shareholder Approval and Board Recommendation     121  
PROPOSAL SEVEN: APPROVAL OF AMENDMENT No. 2 TO THE EXECUTIVE RSU PLAN     123  
Overview     123  
Shareholder Approval and Board Recommendation     126  

  

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PROPOSAL EIGHT: APPROVAL OF AMENDMENT No. 2 TO THE EMPLOYEE RSU PLAN     127  
Overview     127  
Shareholder Approval and Board Recommendation     127  
PROPOSAL NINE: CONFIRMATION AND APPROVAL OF THE AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN     128  
Overview     128  
Shareholder Approval and Board Recommendation     134  
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS     135  
OTHER BUSINESS     136  
ANNEX: SELECTED DEFINITIONS OF OPERATIONAL AND FINANCIAL PERFORMANCE     137  
APPENDICES         
APPENDIX A: FIRST AMENDMENT TO THE AMENDED AND RESTATED STOCK OPTION PLAN     Appendix A-1  
APPENDIX B: SECOND AMENDMENT TO THE EXECUTIVE PSU PLAN     Appendix B-1  
APPENDIX C: SECOND AMENDMENT TO THE EMPLOYEE PSU PLAN     Appendix C-1  
APPENDIX D: FIRST AMENDMENT TO THE EXECUTIVE RSU PLAN     Appendix D-1  
APPENDIX E: FIRST AMENDMENT TO THE EMPLOYEE RSU PLAN     Appendix E-1  
APPENDIX F: SHAREHOLDER RIGHTS PLAN     Appendix F-1  

   

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PROXY STATEMENT
FOR

  

ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 2019

  

The Annual and Special Meeting of Shareholders (the “Meeting”) of Ritchie Bros. Auctioneers Incorporated (the “Company”) will be held on May 7, 2019 at 9500 Glenlyon Parkway, Burnaby, British Columbia, Canada at 11:00 a.m. (Pacific Daylight Time). On or about March 29, 2019, in connection with the solicitation by the Company’s Board of Directors (the “Board”) of proxies for the Meeting, we anticipate that we will begin mailing to each shareholder entitled to vote at the meeting either (1) a Notice of Internet Availability of Proxy Materials or (2) this Proxy Statement, Notice of Annual and Special Meeting of Shareholders and the form of proxy.

We are providing proxy materials to our shareholders primarily via a Notice of Internet Availability of Proxy Materials instead of mailing printed copies of these materials to each shareholder. The Notice of Internet Availability of Proxy Materials contains instructions about how to access our proxy materials and vote online or by mail. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials and this Proxy Statement.

You are invited to attend the Meeting at the above stated time and location. If you plan to attend and your shares are held in “street name” —  in an account with a bank, broker, or other nominee — you should follow the procedures in the materials and request voting instructions provided by or on behalf of such broker, bank or other nominee and arrange to be appointed as a proxy holder.

You can vote your shares by internet or mail, or if you hold your shares in “street name”, by following the instructions set forth in the voting instruction form provided by or on behalf of your broker, bank or other nominee.

Unless the context requires otherwise, references in this Proxy Statement to “we,” “us,” and “our” refer to Ritchie Bros. Auctioneers Incorporated. Dollar amounts are presented in U.S. dollars unless otherwise specified. Except as otherwise stated, the information herein is given as of March 15, 2019.

If you need directions to attend the meeting and vote in person, please contact our Corporate Secretary at 9500 Glenlyon Parkway, Burnaby, British Columbia V5J 0C6, Canada or by calling us at 778-331-5500.

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Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider. For more complete information about these topics, please review our Annual Report on Form 10-K and the entire Proxy Statement.

Annual and Special Meeting of Shareholders

Time and Date: May 7, 2019 at 11:00 a.m., Pacific Daylight Time
Place: 9500 Glenlyon Parkway, Burnaby, British Columbia
Record Date: March 13, 2019
Mailing Date: On or about March 27, 2019

Voting Matters and Board Recommendations

   Matter   Page   Board’s Recommendation
Election of eight directors     10       FOR  each
nominee
 
Appointment of Ernst & Young LLP as auditors of the Company until the next annual meeting     45       FOR  
Advisory Vote to Approve Executive Compensation     47       FOR  
Approval of Amendment No. 1 to the Company’s Amended and Restated Stock Option Plan     107       FOR  
Approval of Amendment No. 2 to the Company’s Executive PSU Plan     116       FOR  
Approval of Amendment No. 2 to the Company’s Employee PSU Plan     121       FOR  
Approval of the Amendment No. 1 to the Company’s Executive RSU Plan     121       FOR  
Approval of the Amendment No. 1 to the Company’s Employee RSU Plan     123       FOR  
Confirmation and Approval of the Company’s Amended and Restated Shareholder Rights Plan     128       FOR  

Executive Compensation Highlights

Placeholder 1.
Placeholder 2.
Placeholder 3.

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Questions and Answers About the Meeting, Proxy Materials and Voting

Why am I receiving this Proxy Statement?

The Company is providing the Notice of Annual and Special Meeting of Shareholders and this Proxy Statement directly to shareholders who are shareholders of record at the close of business on March 13, 2019 and therefore are entitled to vote at the Meeting. This Proxy Statement describes issues on which the Company would like you, as a shareholder, to vote. It provides information on these issues so that you can make an informed decision. You do not need to attend the Meeting to vote your shares.

When you vote by internet or mail, you appoint the proxy holders nominated by management, Beverley A. Briscoe, Board Chair, or Ravi K. Saligram, Chief Executive Officer (the “CEO”) of the Company, with full power of substitution, to be your representatives at the Meeting. A shareholder has the right to appoint a person other than the nominees of management named in the instrument of proxy to represent the shareholder at the Meeting. To exercise this right, a shareholder should insert the name of its nominee in the blank space provided. A person appointed as a proxy holder need not be a shareholder of the Company. As your representative(s), your proxy holder(s) will vote or withhold from voting the shares represented by the proxy at the Meeting (or any adjournments or postponements) in accordance with your instructions on any ballot that may be called. If you specify a choice in the proxy as to how your shares are to be voted with respect to any matter to be acted upon, the shares will be voted accordingly. With proxy voting, your shares will be voted whether or not you attend the Meeting. Even if you plan to attend the Meeting, we recommend that you vote by internet, telephone or mail as soon as possible to ensure your vote is recorded in advance of the Meeting.

When you vote by internet or mail, you will confer discretionary authority upon a proxy holder named in the instrument of proxy to vote your shares on any amendments or variations to matters identified in the accompanying Notice of Annual and Special Meeting of Shareholders and any other matter which may properly come before the meeting in respect of which such proxy has been granted, subject to any limitations imposed by law.

Why does my name not appear as a shareholder of record?

Many, if not most, investors own their shares through a broker dealer or other nominee. Broker dealers frequently clear their transactions through other broker dealers, and may hold the actual certificates for shares in the name of securities depositories, such as Cede & Co. (operated by the Depository Trust Company) in the United States or CDS Clearing and Depository Services Inc. in Canada. In such a case, only the ultimate certificate holder appears on our records as a shareholder, even though that nominee may not have any economic interest in the shares that you actually own through your broker dealer. You should contact your broker dealer for more information about this process.

If your shares are held in an account with a brokerage firm, bank, dealer, or other similar organization, then you are the non-registered/beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by or on behalf of that organization. The registered holder of the shares is considered the shareholder of record for purposes of voting at the Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the shares in your account by following the instructions on the voting instruction form that is provided by or on behalf of the intermediary. You are also invited to attend the Meeting. However, since you are not the shareholder of record, you may not attend the Meeting and vote your shares in person at the Meeting unless you arrange with your broker, bank, or other nominee to be appointed as proxy holder.

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Who is making this solicitation and who will pay the related costs?

This solicitation is made on behalf of the management of the Company. No director has given management notice that he or she intends to oppose any action intended to be taken by management at the Meeting. The Company will bear the cost of soliciting proxies. In an effort to have as large a representation at the Meeting as possible, the Company’s directors, officers and employees may solicit proxies by telephone or in person in certain circumstances. These individuals will receive no additional compensation for their services other than their regular salaries. Upon request, the Company will reimburse brokers, dealers, banks, voting trustees and their nominees who are holders of record of the Company’s common shares on the record date for the reasonable expenses incurred for mailing copies of the proxy materials to the beneficial owners of such shares.

When is the record date?

The Board has fixed March 13, 2019, as the record date for the Meeting. Only holders of our common shares as of the close of business on that date will be entitled to vote at the Meeting.

How many shares are outstanding and how many votes can be cast by all shareholders?

A total of • common shares were outstanding as of March 13, 2019. Votes may be cast on each matter presented, consisting of one vote for each common share of the Company outstanding as of the record date.

Are there any shareholders that hold more than 10% of the shares that may be voted?

To the knowledge of the Company’s directors and executive officers, based on filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (the “SEC”), no person beneficially owns, or controls or directs, directly or indirectly, common shares of the Company carrying more than 10% of the voting rights attached to all voting shares of the Company other than Baillie Gifford & Co., which reported beneficial ownership of 11,089,983 common shares as of December 31, 2018, representing •% of the issued and outstanding common shares of the Company as of March 13, 2019.

What items of business will be voted on at the Meeting and how does the Board recommend I vote?

Shareholders will be being asked to vote on the following:

the election of eight directors for terms expiring in 2020;
an advisory vote on executive compensation;
the appointment of Ernst & Young LLP as the Company’s auditor for the fiscal year ending December 31, 2019 and to authorize the Audit Committee of the Board to fix the remuneration to be paid to the auditors;
approval of Amendment No. 1 to the Company’s Amended and Restated Stock Option Plan;
approval of Amendment No. 2 to the Company’s Executive PSU Plan;
approval of Amendment No. 2 to the Company’s Employee PSU Plan;
approval of Amendment No. 1 to the Company’s Executive RSU Plan;
approval of Amendment No. 1 to the Company’s Employee RSU Plan;
confirmation and approval of the Company’s Amended and Restated Shareholder Rights Plan; and
any other business that may properly come before the Meeting.

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The Board recommends a vote FOR each nominee for director and FOR each of the proposals.

What are my voting rights if I hold common shares?

Each common share is entitled to one vote. No cumulative rights are authorized, and dissenters’ rights are not applicable to any of the matters being voted upon.

How do I vote if I am a registered shareholder?

If you are a registered shareholder, you may vote your shares by internet at www.investorvote.com, by telephone, by mail or by attending the Meeting in person and voting. To vote by internet, you will need your voting control number, which can be found on your proxy card or Notice of Internet Availability of Proxy Materials. To vote by mail, you should promptly complete, sign and return your proxy card, or if you have received a Notice of Internet Availability of Proxy Materials, request a proxy card by internet at www.investorvote.com, calling 1-866-962-0498 or emailing service@computershare.com. Joint owners wishing to complete a proxy form must each sign the proxy card.

How do I vote if I am a non-registered/beneficial holder?

If you are a non-registered/beneficial holder, you should receive a voting instruction form from a broker dealer or other nominee that you may use to instruct such persons how to vote your shares. If you receive a voting instruction form, you may exercise voting rights in respect of those shares in accordance with the procedures provided by the broker dealer or other nominee, which may include voting by mail, telephonically by calling the telephone number shown on the voting form or via the internet at the website shown on the voting instruction form. If you are a non-registered/beneficial holder, you are not considered to be a shareholder of record, and you will not be permitted to vote your shares in person at the Meeting unless you have obtained a proxy for those shares from the person or entity of record holding your shares. Should you require additional information regarding the Meeting, please contact our Corporate Secretary at 9500 Glenlyon Parkway, Burnaby, British Columbia V5J 0C6, Canada or by calling us at 778-331-5500.

Can shareholders vote in person at the Meeting?

If you prefer, you may vote at the Meeting. If you hold your shares through a brokerage account but do not have a physical share certificate, or the shares are registered in someone else’s name, you need to arrange with your stockbroker or the registered owner to be appointed as proxy holder entitling you to vote at the Meeting.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, it likely means that you have multiple accounts with the Company’s transfer agent and/or with stockbrokers. Please vote or arrange for voting of all of the shares.

What if I share an address with another shareholder and we received only one copy of the proxy materials or what if I receive multiple copies?

SEC rules permit companies and intermediaries such as brokers to send one envelope with individual copies of our Notice of Internet Availability of Proxy Materials or proxy materials to multiple shareholders who share the same address, unless we receive contrary instructions from a shareholder. This process, which is commonly referred to as “householding”, provides cost savings for companies. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if you are receiving duplicate copies

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of these materials and wish to have householding apply, please notify your broker. You may also call (800) 542-1061 or write to: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, and include your name, the name of your broker or other nominee, and your account number(s). You can also request prompt delivery of a copy of this proxy statement and the annual report by written request to our Corporate Secretary at 9500 Glenlyon Parkway, Burnaby, British Columbia V5J 0C6, Canada or by calling us at 778-331-5500.

May I revoke my proxy or change my vote?

Yes. If you are a registered shareholder, you may revoke your proxy by:

signing another proxy with a later date and delivering it to Computershare Investor Services Inc., 100 University Avenue, Toronto, Ontario, Canada, M5J 2Y1 (according to the instructions on the proxy), not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time for holding the Meeting;
attending the Meeting in person and registering with the scrutineer of the Meeting as a shareholder present in person and by signing and dating a written notice of revocation;
signing and dating a written notice of revocation and delivering it to the registered office of the Company, 9500 Glenlyon Parkway, Burnaby, British Columbia V5J 0C6, Canada, at any time up to and including the last business day preceding the day of the Meeting or to the Chair of the Meeting on the day of the Meeting; or
in any other manner provided by law.

In addition, if you are a registered shareholder and have voted using the internet following the instructions as described in the Notice of Internet Availability of Proxy Materials, you may change your vote by following the procedures described in the Notice of Internet Availability of Proxy Materials to submit a vote with a later date.

If you are not a registered shareholder and wish to change your proxy nominee or your vote, you should consult your broker or nominee with respect to submitting new voting instructions. Intermediaries may set deadlines for the receipt of revocation notices that are farther in advance of the Meeting than those set out above and, accordingly, any such revocation should be completed well in advance of the deadline prescribed in the form of proxy or voting instruction form to ensure it is given effect at the Meeting.

How are abstentions and broker non-votes counted?

Shares held or represented by proxy by persons present at the Meeting in respect of which the holder or proxy holder does not vote, or abstains from voting, with respect to any proposal are counted for purposes of establishing a quorum. If a quorum is present, abstentions will not be included in vote totals and will not affect the outcome of the vote of any proposal contained in this year’s Proxy Statement. “Broker non-vote” shares are those shares held in “street name” by brokers or nominees, who do not have discretionary authority to vote such shares as to a particular matter, which are held or represented by proxy by a person present at the meeting will be counted for purposes of establishing a quorum. If a quorum is present, broker non-votes will not be counted as votes in favor of such matter or, in the case of election of directors, as votes “withheld” with respect to such election, and also will not be counted as shares voting on such matter. Accordingly, abstentions and broker non-votes will have no effect on the voting on a matter that requires the affirmative vote of a certain percentage of the shares voting on the matter.

Under the rules of the New York Stock Exchange (“NYSE”), brokers or nominees are entitled to vote shares held for a beneficial owner on “routine” matters, such as the appointment of Ernst & Young LLP as our independent auditors, without instructions from the beneficial owner of those shares. However, absent instructions from the beneficial owner of such shares, a nominee is not entitled to vote shares held for a beneficial owner on certain “non-routine” matters. The election of our directors, the advisory vote on executive compensation and the approval of the Amendment to the Amended

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and Restated Stock Option Plan, the Amendment to the Executive PSU Plan, the Amendment to Employee PSU Plan, the Amendment to the Executive RSU Plan, the Amendment to Employee RSU Plan and the Amended and Restated Shareholder Rights Plan are considered non-routine matters. Accordingly, if you hold your shares in street name, it is critical that you arrange to exercise your voting right if you want it to count on all matters to be decided at the Meeting.

How many votes are needed to hold the meeting and approve the proposals and how does the Board recommend that I vote?

To conduct the Meeting, the Company must have a quorum, which means that two persons must be present in person, and each entitled to vote and holding or representing by proxy not less than 33% of the votes entitled to be cast at the Meeting. The table below shows the votes needed to approve each of the proposals, as further described in each of the proposals and the Board’s recommendation for voting on each proposal.

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   Proposals   Votes Required   Board
Recommendation
1.   Election of eight nominees to serve as directors for a term of one year each   The eight nominees receiving the highest number of affirmative votes cast at the Meeting will be elected, unless WITHHOLD votes for any nominee are greater than FOR votes, in which case, such incumbent nominee will be required to promptly tender his or her resignation. WITHHOLD votes are not counted otherwise. See “Proposal One: Election of Directors — Questions and Answers about the Election of Directors — Might directors elected be required to resign?” on page 11 for more information on the majority voting policy.   FOR each nominee
2.   Appointment of Ernst & Young LLP as the Company’s auditor for the fiscal year ending December 31, 2019 and to authorize the Audit Committee to fix the remuneration of the auditors   Majority of votes cast at the Meeting voting FOR the proposal. WITHHOLD votes are not counted.   FOR
3.   Annual Advisory Vote on Executive Compensation   Affirmative vote of the majority of votes cast at the Meeting. This is an advisory vote and, while not binding on us, our Board and Compensation Committee value the opinions of all of our shareholders and will consider the outcome of this vote when making future decisions on executive compensation.   FOR
4.   Approval of Amendment No. 1 to the Company’s Stock Option Plan   Affirmative vote of the majority of votes cast at the Meeting.   FOR
5.   Approval of Amendment No. 2 to the Company’s Executive PSU Plan   Affirmative vote of the majority of votes cast at the Meeting.   FOR
6.   Approval of Amendment No. 2 to the Company’s Employee PSU Plan   Affirmative vote of the majority of votes cast at the Meeting.   FOR
7.   Approval of Amendment No. 1 to the Company’s Executive RSU Plan   Affirmative vote of the majority of votes cast at the Meeting.   FOR
8.   Approval of Amendment No. 1 to the Company’s Employee RSU Plan   Affirmative vote of the majority of votes cast at the Meeting.   FOR
9.   Confirmation and approval of the Company’s Amended and Restated Shareholder Rights Plan   Affirmative vote of the majority of votes cast at the Meeting.   FOR

  

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Will my shares be voted if I do not vote by internet, telephone or sign and return my Proxy Card or Voting Instruction Form?

If your shares are registered in your name and you do not vote by internet, telephone or sign and return your proxy card, or attend and vote in person, your shares will not be voted at the Meeting. If your shares are held through an account with a brokerage firm, bank, dealer or other nominee, your brokerage firm or other nominee, under certain circumstances, may vote your shares.

How are votes counted?

If your instructions as to voting in any instrument of proxy or voting instruction form are certain, your shares will be voted or withheld from voting in accordance with your instructions. If you do not specify a choice in the proxy card or voting instruction form as to any of the following matters, and one of the proxy holders recommended by management is appointed as proxy holder, your shares will be voted “FOR” each of the proposals as recommended by the Board as further described in each of the proposals.

Voting results will be tabulated and certified by a representative of Computershare Investor Services, Inc., scrutineer of the Meeting.

What happens if additional matters are presented at the Meeting?

Management of the Company is not aware of any amendments to or variations of any of the matters identified in the enclosed Notice of Annual and Special Meeting of Shareholders nor of any other business which may be brought before the Meeting. When you vote by internet, telephone or mail, you will confer discretionary authority upon a proxy holder named in the instrument of proxy to vote your shares on any amendments or variations tothe matters identified in the accompanying Notice of Annual and Special Meeting and on any other matter that may properly be brought before the Meeting in respect of which such proxy has been granted, subject to any limitations imposed by law.

Where can I find the voting results of the Meeting?

The Company will publish the voting results of the Meeting in a Current Report on Form 8-K, which are required to be filed with the SEC at www.sec.gov within four business days after the date of the Meeting and on SEDAR at www.sedar.com.

How can I obtain additional information, including a copy of the Proxy Statement and the 2018 Annual Report on Form 10-K?

The Company will mail, without charge to any registered holder or beneficial owner of common shares, upon written request, a copy of its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, including the consolidated financial statements, management’s discussion and analysis of financial condition and results of operations, schedules and list of exhibits, and any particular exhibit specifically requested, any interim financial statements of the Company and the relevant management’s discussion and analysis of financial condition and results of operations that have been filed with securities regulators for any period after the end of the Company’s most recently completed financial year and the Company’s proxy statement in respect of its most recent annual and special meeting of shareholders. Requests should be sent to our Corporate Secretary at 9500 Glenlyon Parkway, Burnaby, British Columbia V5J 0C6, Canada. The Company may require payment of a reasonable charge for reproduction if a person that is not a registered shareholder or beneficial owner of common shares makes the request. This Proxy Statement, the Annual Report on Form 10-K and additional information relating to the Company are also available at www.rbauction.com/investors, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Financial information is provided in the Company’s comparative financial statements and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2018 as contained in the Company’s Form 10-K.

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Proposal One: Election of Directors

Questions and Answers about the Election of Directors

What is the current composition of the Board?

The Company’s Articles of Amalgamation require the Board to have at least three and no more than ten directors and provide that the Board is authorized to determine the actual number of directors within that range. The current Board is composed of the following nine directors: Ravichandra (Ravi) K. Saligram, Beverley Briscoe, Robert G. Elton, J. Kim Fennell, Amy Guggenheim Shenkan, Erik Olsson, Edward B. Pitoniak, Sarah Raiss and Christopher Zimmerman.

Is the Board divided into classes? How long is the term?

No, the Board is not divided into classes. All directors are elected for one-year terms to hold office until the next annual meeting of shareholders unless he or she sooner ceases to hold office.

Who can nominate individuals for election as directors?

Shareholders may nominate director candidates pursuant to and in accordance with the provisions of the Company’s by-laws, which includes advance notice provisions for nominations of directors by shareholders, and of the Canada Business Corporations Act (the “CBCA”). The advance notice provisions require advance notice to the Company of nominations for persons for election to the Board in circumstances where nominations are made other than pursuant to a shareholder proposal made in accordance with the provisions of the CBCA or a requisition of shareholders made in accordance with the CBCA. Shareholders should note that nominations for directors must be made in compliance with the procedures in the Company’s by-laws, which include requirements to notify the Company in writing in advance of an intention to nominate directors for election to the Board prior to any annual or special meeting of shareholders and sets forth the information that a shareholder must include in such notice. Please see the information under “Shareholder Proposals and Director Nominations” on page 135.

The Company has not received any director nominations in connection with the Meeting.

Who is standing for election this year?

The following eight current Board members are being nominated by or at the direction of the Board, based on the recommendation of the Nominating and Corporate Governance Committee:

Ravi K. Saligram
Beverley Briscoe
Robert G. Elton
J. Kim Fennell
Amy Guggenheim Shenkan
Erik Olsson
Sarah Raiss
Christopher Zimmerman

Each of the nominees, except Mr. Saligram, qualifies as independent under applicable NYSE listings standards and Canadian securities laws and regulations and the rules of the Toronto Stock Exchange (the “TSX”). See “Corporate Governance — Independence of the Directors” on page 18 for a summary of how “independence” is determined. Additional information concerning the above nominees, including their ages, positions and offices held with the Company, and terms of office as directors, is set forth below under “Information Concerning the Nominees to the Board of Directors” on page 12.

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What if a nominee is unable or unwilling to serve?

If any one or more of the nominees named in this Proxy Statement is unable to serve or for good cause will not serve, then the persons voting the accompanying proxy may in their discretion vote for a substitute. The persons named in the enclosed form of proxy intend to vote for the election of any such substitute nominee. Each of the nominees has agreed to serve, if elected, and the Board is not presently aware of any reason that would prevent any nominee from serving as a director if elected.

How are nominees elected?

In the election of directors, you may vote “FOR” each or any of the nominees, or you may “WITHOLD” from voting for each or any of the nominees. The eight nominees receiving the highest number of votes “FOR” cast in person or by proxy at the Meeting will be elected as directors.

Might directors elected be required to resign?

Yes. The Board has adopted a majority voting policy that will apply to any uncontested election of directors. Pursuant to this policy, any nominee for director who receives a greater number of votes marked “WITHHOLD” than votes “FOR” such election will promptly tender his or her resignation to the Board Chair following the Meeting. The Board’s Nominating and Corporate Governance Committee will consider the offer of resignation and make a recommendation to the Board whether to accept it.

In making its recommendation with respect to a director’s resignation, the Nominating and Corporate Governance Committee will consider, in the best interests of the Company, the action to be taken with respect to such offered resignation. The recommended action may include (i) accepting the resignation; (ii) recommending that the director continue on the Board but addressing what the Nominating and Corporate Governance Committee believes to be the underlying reasons why shareholders “withheld” votes for election from such director; or (iii) rejecting the resignation.

The Nominating and Corporate Governance Committee would be expected to recommend that the Board accept the resignation except in extenuating circumstances. The Board will consider the Nominating and Corporate Governance Committee’s recommendation within 90 days following the Company’s annual meeting, and in considering such recommendation, the Board will consider the factors taken into account by the Nominating and Corporate Governance Committee and such additional information and factors that the Board considers to be relevant. The Board will promptly disclose its decision by a press release, such press release to include the reasons for rejecting the resignation, if applicable. A director who tenders his or her resignation pursuant to the majority voting policy will not be permitted to participate in any meeting of the Board or the Nominating and Corporate Governance Committee at which the resignation is considered. If the resignation is accepted, subject to applicable law, the Board may leave the resultant vacancy unfilled until the next annual general meeting, fill the vacancy through the appointment of a new director whom the Board considers to merit the confidence of the shareholders, or call a special meeting of shareholders at which there will be presented one or more nominees to fill any vacancy or vacancies.

May additional directors be appointed by the Board between annual general meetings?

The Articles of Amalgamation of the Company provide that the Board has the power to increase the number of directors at any time between annual meetings of shareholders and appoint one or more additional directors, provided that the total number of directors so appointed shall not exceed one-third of the number of directors elected at the previous annual meeting.

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Information Concerning the Nominees to the Board of Directors

The following section provides information with respect to the nominees to our Board. Directors are to be elected for a one-year term expiring at our next annual meeting unless he or she sooner ceases to hold office (if the director dies or resigns, is removed by resolution of the shareholders or becomes disqualified from being a director under the CBCA).

The Board and the Nominating and Corporate Governance Committee believe that each director nominee brings a strong set of attributes and qualifications and that together these director nominees would create an effective and well-functioning Board that will continue to serve the Company and our shareholders well. Included in each director nominee’s biography below is a summary describing the key attributes and qualifications of the nominees upon which the decisions to nominate were made. Information below regarding shares owned, controlled or directed, Deferred Share Units (“DSUs”) issued under the Company’s Non-Executive Director Deferred Share Unit Plan, restricted share units (“RSUs”) granted under the Company’s RSU Plans and performance share units (“PSUs”) under the Company’s PSU Plans is given as of February 25, 2019.

[GRAPHIC MISSING]
  BEVERLEY
ANNE BRISCOE

  Residence:
Vancouver, B.C.,
Canada
  Age: 64
  Independent
  Director since:
October 29, 2004
 

Shares owned, controlled or
directed:
22,288
 
DSUs held: 33,136
 
Committees
Member of the Nominating and Corporate
Governance Committee
 
Voting results 2018
Votes For: 90,466,618
Percentage: 98.49%
  
  

Key attributes and qualifications

Ms. Briscoe has strong financial and leadership skills, having been in the industrial and transportation sector for over 15 years and in a number of financial roles prior thereto. Ms. Briscoe’s service on various boards enables her to bring to the Board experience and knowledge of governance and financial matters from a number of perspectives.

Ms. Briscoe was appointed Board Chair effective June 30, 2014 and has been a director of the Company since 2004. Ms. Briscoe’s previous employment includes: from 2004 to present she worked as a management consultant and corporate director; from 1997 to 2004 she was President and owner of Hiway Refrigeration Limited, a British Columbia-based company specializing in selling and servicing transportation refrigeration equipment used in the trucking and shipping industries; from 1994 to 1997 she was Vice President and General Manager of Wajax

 

Industries Limited, a heavy equipment dealer; from 1989 to 1994 she was Chief Financial Officer for the Rivtow Group of Companies, a marine transportation and industrial equipment conglomerate; from 1983 to 1989 she held CFO positions with several operating divisions of The Jim Pattison Group, a diversified holding company; and from 1977 to 1983 she worked as an auditor with a predecessor firm of PricewaterhouseCoopers. She is the past Chair of the Industry Training Authority for British Columbia, past Chair of the BC Forest Safety Council and past Chair of the Audit Committee for the Office of the Superintendent of Financial Institutions. She currently is Lead Director and Audit Committee Chair of Goldcorp Inc. Ms. Briscoe is a Fellow of the Institute of Chartered Accountants, has a Bachelor of Commerce degree from the University of British Columbia, and is also a Fellow of the Institute of Corporate Directors

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Other directorships

Goldcorp Inc. (TSX: “G”; NYSE: “GG” — a public gold and precious metal company) — Lead Director; Chair of the Audit Committee.

 

  

  

[GRAPHIC MISSING]
  RAVICHANDRA K. SALIGRAM
  Residence: Vancouver, B.C., Canada
  Age: 62
  Not Independent
  Director since:
July 7, 2014
 

Shares owned, controlled or
directed:
83,010
 
PSUs held: 169,325
 
Committees
None
 
Voting results 2018
Votes For: 91,483,789
Percentage 99.60%
 
 

Key attributes and qualifications

Mr. Saligram’s tenure as CEO, President and a member of the board of directors for OfficeMax Incorporated provides valuable business, leadership and management experience, including expertise in the omnichannel provision of products, services and solutions. Mr. Saligram’s past and current experience as a director on other public boards provides a broad perspective on matters facing public companies and governance matters.

Mr. Saligram was appointed CEO and a director in July 2014. Prior to joining the Company, Mr. Saligram was CEO, President and a member of the board of directors of OfficeMax Incorporated (2010 — 2013), an omnichannel provider of workplace products, services and solutions. From 2003 through November 2010, Mr. Saligram served in executive management positions with ARAMARK Corporation, a global food services company, including President of ARAMARK International and Chief Globalization

 

Officer and Executive Vice President of ARAMARK Corporation. From 1994 through 2002, Mr. Saligram served in various capacities for the InterContinental Hotels Group, a global hospitality company, including President of Brands and Franchise for North America; Chief Marketing Officer and Managing Director, Global Strategy; President, International; and President, Asia Pacific. Earlier in his career, Mr. Saligram held various general and brand management roles at S.C. Johnson & Son, Inc. in the United States and overseas. Mr. Saligram earned an MBA from the University of Michigan, Ann Arbor, and an electrical engineering degree from Bangalore University, India.

Other directorships

Church & Dwight Co., Inc. (NYSE: “CHD” — a public consumer products company) — Director and member of the Governance and Nominating Committee.

 

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[GRAPHIC MISSING]
  ROBERT GEORGE ELTON
  Residence:
Vancouver, B.C.,
Canada
  Age: 67
  Independent
  Director since:
April 30, 2012
 

Shares owned, controlled or directed: nil
  
DSUs held: 17,232
  
Committees
Chair of the Audit Committee
Member of the Compensation Committee
  
Voting results 2018
Votes For: 89,528,734
Percentage: 97.47%
  
  
  

Key attributes and qualifications

Mr. Elton’s experience in senior executive positions during the course of the past 15 years brings strong leadership and management skills to the Company. Mr. Elton’s tenure in academia, currently as an adjunct professor at the University of British Columbia’s Sauder School of Business, enables him to bring to the Board knowledge of business from a current and alternative perspective.

Mr. Elton held executive roles at Vancouver City Savings Credit Union from 2013 to 2017, including Chief Financial Officer and Chief Risk Officer. Mr. Elton has also served as a corporate director at the University of British Columbia’s Sauder School of Business. Mr. Elton was President and Chief Executive Officer of BC Hydro, a government-owned electric utility, from 2003 to 2009. Prior to this he was Executive Vice President Finance and Chief Financial Officer of BC Hydro (2002 — 2003),

 

Powerex (2001 — 2002), a subsidiary of BC Hydro, and Eldorado Gold Corporation (1996 — 2001) (TSX: “ELD”; NYSE “EGO”; ASX: “EAU”). Mr. Elton spent over 20 years with PriceWaterhouseCoopers and predecessor firms, becoming partner in 1987 before leaving the firm in 1996. He is a Fellow of the Institute of Chartered Accountants in British Columbia and has a Master of Arts degree from Cambridge University, U.K.

Other directorships

Corix Utilities (a private utility infrastructure company) — Director, Chair of the Audit Committee

Past directorships

bcIMC (a private investment management company) — Director

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[GRAPHIC MISSING]
  J. KIM FENNELL
  Residence:
Los Gatos, CA USA
  Age: 62
  Independent
  Director since:
July 1, 2017
 

Shares owned, controlled or directed: nil
  
DSUs held: 3,447
  
Committees:
Member of the Compensation Committee
  
Voting results 2018
Votes for: 91,567,233
Percentage: 99.69%
  
  
  
  

Key attributes and qualifications

Mr. Fennell is a Silicon Valley veteran with over 30 years’ management experience in the high-tech industry across a variety of market sectors. He has proven leadership managing organizations from 40-person startups to 3,000-person corporate business units and broad experience with early stage “disruption” technology solutions and business models. Mr. Fennell is currently Head of Global Technology Partnerships and US/Canada Business Development at Uber Technologies, Inc., the leading mobile application-based car hailing and food & freight delivery network that connects customers with independent drivers. Prior to July of 2017, Mr. Fennell served as Head of Location-Based Services Partnerships at Uber. Mr. Fennell had been President and CEO of deCarta, Inc., a location-based services platform company from 2004 until its acquisition by Uber in 2015. Prior to deCarta, he held CEO positions at Pinnacle Systems (NASDAQ:PCLE) and StorageWay Inc. and other senior positions in the technology sector. He was an early executive at Octel Communications, a global leader of voice technologies, opening and managing

 

subsidiaries in Canada, Europe and then Asia before running Octel shortly after its acquisition by Lucent in 1997. Mr. Fennell holds a B.A. (Honours) from Queen’s University. He is a Charter Member of the C100 association, a group that mentors Canadian-based entrepreneurs and start-ups, and is on the board of the Silicon Valley Leadership Group Foundation.

Other directorships

Silicon Valley Leadership Group Foundation — Director

Where is My Transport (private UK-based startup) — Director

Past directorships

deCarta, Inc. — Director

Pinnacle Systems (NASDAQ:PCLE) — Director

StorageWay Inc. — Director

 

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[GRAPHIC MISSING]
  AMY GUGGENHEIM SHENKAN
  Residence:
San Francisco, CA USA
  Age: 54
  Independent
  Director since:
July 1, 2017
 

Shares owned, controlled or directed: nil
  
DSUs held: 3,447
  
Committees:
Member of the Audit Committee
Member of the Nominating and Corporate
Governance Committee
  
Voting results 2018
Votes for: 91,516,093
Percentage: 99.63%
  
  

Key attributes and qualifications

Amy Guggenheim Shenkan was appointed to the Ritchie Bros. Board in 2017. She currently serves on the Company’s Audit Committee and Nominating and Corporate Governance Committee. Ms. Shenkan has also served on the boards of E.L.F. Cosmetics (formerly a Texas Pacific Group company), and vRide (acquired by Enterprise Holdings). Ms. Shenkan has a 30-year track record of leadership within innovative, high growth technology and consumer facing companies. She is known for her deep digital and business transformation expertise, leading major post-merger integrations, setting strategy, leveraging content as a strategic asset, and testing and evolving new business models for large enterprises undergoing disruption. Ms. Shenkan was President and Chief Operating Officer of Common Sense Media, a technology-based media company dedicated to helping kids, families and educators successfully navigate the media and technology world, from 2011 through 2017. Ms. Shenkan grew Common Sense into the most significant, entrepreneurial, rapidly growing organization of its kind in the United States. Prior to joining Common Sense Media

 

in 2011, Ms. Shenkan was a digital transformational expert with McKinsey & Company, Inc., advising global businesses across many industries about the use of the internet to drive digital transformations. Ms. Shenkan also held leadership roles at Travelocity (formerly Preview Travel) and Wells Fargo as these companies grew their businesses through innovation. Ms. Shenkan holds a B.A. in Economics and Psychology and graduated Summa Cum Laude and Phi Beta Kappa from the University of Michigan and earned an M.B.A. from the Harvard Business School.

Past directorships

E.L.F. Cosmetics (cosmetic company and formerly a Texas Pacific Group company) — Director

vRide (ride sharing platform acquired by Enterprise Holdings) — Director

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[GRAPHIC MISSING]
  ERIK OLSSON
  Residence: Scottsdale, AZ, USA
  Age: 56
  Independent
  Director since: June 1, 2013
 

Shares owned, controlled or directed: nil
  
DSUs held: 13,941
  
Committees
Member of the Compensation Committee
Member of the Audit Committee
  
Voting results 2018
Votes For: 81,202,184
Percentage: 88.40%
  
  
  

Key attributes and qualifications

Mr. Olsson’s experience in senior leadership positions, as well as his knowledge of the equipment industry in general, provides important insight to our Board on the Company’s strategic planning and operations. Further, his experience as a member of another public company board provides him with an enhanced perspective on issues applicable to public companies.

Mr. Olsson has served as President, Chief Executive Officer and a Director of Mobile Mini, Inc., the world’s leading provider of portable storage solutions, since 2013. Mr. Olsson had previously been President, Chief Executive Officer, and a Director of RSC Holdings, Inc., a premier provider of rental equipment in North America, from 2006 until its acquisition by United Rentals, Inc. in April 2012. Prior to that

 

he served as Chief Financial Officer and Chief Operating Officer of RSC Holdings, Inc. In addition, he held various senior positions in the United States, Brazil, and Sweden in his 13 years with industrial group Atlas Copco AB, a mining equipment maker. Mr. Olsson holds a degree in Business Administration and Economics from the University of Gothenburg.

Other directorships

Mobile Mini, Inc. (NASDAQ:GS: “MINI” — portable storage company) — Director

Dometic Group AB, a global industrial provider of solutions for mobile living — Director

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[GRAPHIC MISSING]
  SARAH RAISS
  Residence:
Calgary, Alberta,
Canada
  Age: 61
  Independent
  Director since: July 1, 2016
 

Shares owned, controlled or directed: nil
  
DSUs held: 5,704
  
Committees
Chair of the Compensation Committee
  
Voting results 2018
Votes for: 89,446,300
Percentage: 97.38%
  
  
  
  

Key attributes and qualifications

Ms. Raiss brings almost 40 years of experience encompassing various board positions and executive and management positions in engineering, operations, strategy, merger and acquisition integration, government relations and community investment, governance, human resources, information technology, marketing and other administrative functions. She has business experience in Canada, the United States and abroad.

Ms. Raiss retired in August 2011 as Executive Vice-President of Corporate Services, TransCanada Corporation, one of North America’s leading energy infrastructure companies with operations in natural gas, oil and power industries

Since her retirement, Ms. Raiss’s principal occupation has been serving as a corporate director, and she has served on a number of other corporate boards noted below. Ms. Raiss was named a 2015 National Association of Corporate Directors Directorship 100, recognizing the most influential people in governance, 50 of which are corporate directors.

Ms. Raiss has a BS in Applied Mathematics and an MBA, both from the University of Michigan.

 

Other directorships

The Loblaw Companies, Ltd. (TSX: “L” — a public food retailer) — Director and member of the Corporate Governance Committee and Chair of the Pension Committee

The Commercial Metals Company (NYSE: “CMC” — a public metal manufacturer and recycler) — Director, past Chair of the Compensation Committee and Chair of the Nominations and Governance Committee; former member of the Audit Committee

Past directorships

The Vermilion Energy, Inc. (TSX: “VET”; NYSE: “VET”; — a public oil and gas producer) — Director and Chair of the Governance and Human Resource Committee and member of the Health, Safety and Environment Committee

Canadian Oil Sands, Ltd. (TSX: “COS” — a public oil investment company) — (2012 — 2016) Director and Chair of the Corporate Governance and Compensation Committees and member of the Audit Committee

Shoppers Drug Mart Corporation (TSX: “SC” — a provider of pharmacy products and services) — (2009 — 2014) Director and member of the HR and Compensation Committee

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[GRAPHIC MISSING]
  CHRISTOPHER ZIMMERMAN
  Residence:
Manhattan Beach, CA,
USA
  Age: 59
  Independent
  Director since:
April 11, 2008
  
 

Shares owned, controlled or
directed:
6,856
  
DSUs held: 18,264
  
Committees

Member of the Nominating and Corporate
Governance Committee
  

Voting results 2018
Votes for: 91,487,066
Percentage: 99.60%
  

Key attributes and qualifications

Mr. Zimmerman brings over 30 years of business, operating and leadership experience to the Board. The Company benefits from Mr. Zimmerman’s strong operational and international expertise from his experience as a chief executive officer of several organizations throughout the course of the past 15 years.

Mr. Zimmerman has served as President and CEO of business operations for the St. Louis Blues, a professional hockey team, since 2014. Prior to this, he was President of Easton Sports, a designer, developer and marketer of sports equipment and accessories from 2010 to 2013. Prior to joining Easton Sports, Mr. Zimmerman was President and Chief Executive Officer of

 

Canucks Sports and Entertainment, a sports entertainment company in Vancouver, B.C, from 2006 until 2009. Before joining Canucks Sports and Entertainment, Mr. Zimmerman was the President and Chief Executive Officer of Nike Bauer Inc., a hockey equipment company. Prior to this appointment in March 2003, Mr. Zimmerman was General Manager of Nike Golf USA. He joined Nike Golf in 1998 after spending 16 years in a variety of senior advertising positions, including USA Advertising Director for the Nike Brand and Senior Vice President at Saatchi and Saatchi Advertising in New York. Mr. Zimmerman has an MBA from Babson College.

In addition to the information presented above regarding common shares beneficially owned, controlled or directed, Mr. Saligram, the CEO of the Company, is the only director that holds stock options. None of the Company’s non-executive directors have been granted stock options since their appointment. The Company ceased granting stock options to non-executive directors in 2004, and the Company’s Policy Regarding the Granting of Equity-Based Compensation Awards (the “Stock Option Policy”) precludes any such issuance.

Recommendation of the Board

The Board recommends a vote “FOR” each of the nominees.

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Information Concerning Our Executive Officers

The following table sets forth certain information with respect to our current executive officers, other than Mr. Saligram, whose information may be found under “Proposal One: Election of Directors — Information Concerning the Nominees to the Board of Directors” on page 128.

  

SHARON DRISCOLL

Chief Financial Officer

Age: 57

 

Sharon Driscoll joined Ritchie Bros. in July 2015 as Chief Financial Officer, following 17 years of senior executive experience at companies such as Rexall Pharmacies Canada (Katz Group Canada), Sears Canada Inc. and Loblaw Companies Limited. Most recently, Ms. Driscoll was Executive Vice President and CFO at Katz Group Canada Ltd., where she led financial operations, including capital allocation, financing strategies, treasury operations, regulatory compliance, risk management and financial talent development, from 2013 to 2015. Prior to Katz Group, Ms. Driscoll was Senior Vice President and CFO of Sears Canada Inc., one of Canada’s largest retailers, from 2008 to 2013.

Ms. Driscoll is a Chartered Professional Accountant and has a Bachelor of Commerce (Honours) degree from Queen’s University. Ms. Driscoll also serves as a Director of Empire Company Limited (TSX: EMP.A).


  

JEFF JETER

President, Sales U.S.

Age: 60

 

Jeff Jeter joined the Company in 2017 upon completion of the acquisition of IronPlanet. Mr. Jeter leads Ritchie Bros.’ United States sales organization with a team of regionally based territory managers as well strategic account managers focused on targeted industry verticals. Mr. Jeter joined IronPlanet in 2007 as Senior Vice President, International and New Business and most recently served as IronPlanet’s President, leading the United States and international sales teams. During Mr. Jeter’s tenure at IronPlanet he also managed the marketing organization and helped the business drive new business initiatives including identifying strategic opportunities and delivering new market launch plans. Prior to joining IronPlanet in 2007, he served as Senior Principal at PRTM Management Consultants where he helped lead PRTM’s customer experience consulting for Fortune 1000 companies. Prior to joining PRTM, Mr. Jeter was Senior Vice President of Marketing for Manugistics Group, Inc. from 1999 to 2004 where he executed global marketing strategies as well as industry vertical go-to-market plans and sales operations initiatives. Mr. Jeter has over 30 years of experience in sales, marketing, and international business, including two international assignments for Iomega, a wholly owned subsidiary of EMC Corporation and leader in innovative storage and network security solutions for small businesses, home offices and consumers.

Mr. Jeter holds a B.A. from Wake Forest University and an M.B.A. from Mercer University.

  

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KARL WERNER

President, International

Age: 54

 

Karl Werner joined the Company in 1996 as Territory Manager for the Olympic Peninsula and Alaska. In 1999 he was appointed to Regional Manager for the Northwest US and in 2004 transferred to the Company’s corporate head office as Senior Manager, Strategic Projects. In 2005 he was appointed to Divisional Manager, Auction Operations. In 2008 he was appointed to VP of Auction Operations until October 2013, when he became Chief Auction Operations Officer. In 2014, he took on the additional responsibilities of Managing Director for the Middle East, Africa and India. Mr. Werner was appointed to his current position of President, International in January 2017, where he oversees sales and business operations in Europe, the Middle East, Africa and India, Latin America, Australia and Asia.

Mr. Werner came to the Company after 10 years of operating a heavy-haul transport company. He has a strong background in real estate development and operations management. Mr. Werner sits on advisory boards for various strategic partners.


  

KIERAN HOLM:

SVP, Operations Excellence & Efficiencies

Age: 50

 

Kieran Holm joined the Company in 2004 in the marketing department before taking on progressively more senior positions. The roles included general management as Area Manager in Texas; Regional Manager in Chicago; sales management as Vice President, Sales — North Central United States from 2012 to 2014 and strategic management as Managing Director Asia Pacific from 2015 to 2017. In 2017 he relocated back from Tokyo to take on his current role overseeing the operations side of Ritchie Bros. Kieran has developed and executed strong growth strategies, managed high-performing teams and spearheaded Ritchie Bros.’ expansion into new markets and segments including auctioning real-estate assets and classic cars.

Mr. Holm holds an MBA, specializing in finance, from McGill University, earned at the University’s Tokyo, Japan, campus; and a Bachelor of Arts degree from the University of Victoria (Canada). He speaks English, Japanese and French.


  

MARIANNE MARCK

Chief Information Technology Officer

Age: 59

 

Marianne Marck joined the Company as Chief Information Technology Officer in 2016. Prior to joining the Company, Ms. Marck was Senior Vice President, Retail and Digital Technology at Starbucks Coffee Company from 2011 to 2016. Ms. Marck has over 15 years of executive experience relating to technology and digital platforms working with companies such as Blue Nile Inc., the Walt Disney Internet Group, and CNET Networks.

Ms. Marck has a B.A., Mathematics from Mills College in Oakland, CA.

  

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TODD WOHLER

Chief Human Resources Officer

Age: 60

 

Todd Wohler joined the Company as Chief Human Resources Officer in January 2015, bringing over 20 years of experience across multiple regions and industries. Over the course of his career Mr. Wohler has been instrumental in building global teams and organizations that have excellent track records of success. He has developed and implemented transformational HR strategies and recruited hundreds of executives and leaders for organizations across the globe in multiple industries. Prior to joining the Company, Mr. Wohler served as Chief Human Resources Officer at Quintiles Transnational from 2011 to 2012 as Senior Vice President of Human Resources at ARAMARK for ARAMARK’s international business from 2004 to 2011 and as Senior Vice President of Human Resources at United Water from 2001 to 2004. Mr. Wohler began his career at Schlumberger, a global oil and gas technology company, where he began as a field engineer and worked in many different branches of the company in the US, Paris, and London during his 20-year tenure.

Mr. Wohler has a Bachelor of Science degree in Mechanical Engineering from Virginia Polytechnic Institute and State University and a Master of Business Administration from Tulane University.


  

DOUG FEICK

SVP, Corporate Development and Integration Optimization

Age: 54

 

Doug Feick joined the Company in June 2017 upon completion of the acquisition of IronPlanet. Mr. Feick leads mergers, acquisitions and strategic development for Ritchie Bros. and also is driving the integration of IronPlanet with the Company. From 2011 until the acquisition of IronPlanet, Mr. Feick served as SVP, Corporate Development and Chief Legal Officer for IronPlanet. From 2002 to 2010, Mr. Feick served as Executive Vice President, Business Affairs and General Counsel at ChoiceStream, Inc. where he managed all legal matters and was responsible for business and corporate development activities, including strategic partner negotiations and deal structuring. Prior to ChoiceStream, he was Vice President, Corporate Development and Associate General Counsel, International at Yahoo!, Inc. where he first started and ran Yahoo!’s international legal group and then co-ran Yahoo!’s domestic and international corporate development activities. Mr. Feick has over 25 years of legal and business experience.

Mr. Feick graduated with a B.S. in Business Administration from Miami University and a J.D. from the University of Southern California School of Law. Mr. Feick is a member of the State Bar of California.

  

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DARREN WATT

SVP, General Counsel & Corporate Secretary

Age: 47

 

Darren Watt joined the Company in 2004 as in-house legal counsel. In 2012, Mr. Watt was promoted to Vice President Legal Affairs, and in 2013 was appointed General Counsel and Corporate Secretary, and also assumed the role of VP Corporate Development until the appointment of Mr. Saligram and the subsequent establishment of a distinct corporate development team in 2015, at which point Mr. Watt resumed his focus on legal matters. Mr. Watt was promoted to Senior Vice President and General Counsel in 2016. Prior to joining the Company Mr. Watt practiced with McCarthy Tétrault LLP from 1998 to 2004 as an Associate lawyer in the area of Corporate Finance & Securities.

Mr. Watt is a member of the Law Society of British Columbia and holds a Law Degree from the University of British Columbia, as well as an Honours Bachelor of Arts degree (International Relations) from the University of Toronto.

  

  

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Corporate Governance

Overview

The Board and the Company believe that excellent corporate practices are essential for the effective and prudent operation of the Company and for enhancing shareholder value. The Board’s Nominating and Corporate Governance Committee is responsible for reviewing and, if deemed necessary, recommending changes to the Company’s corporate governance practices.

Structure and Members of the Board

The Company’s Articles of Amalgamation require the Board to have at least three and no more than ten directors and provide that the Board is authorized to determine the actual number of directors within that range. The current Board is comprised of the following nine directors:

Ravi K. Saligram
Beverley Briscoe
Robert G. Elton
J. Kim Fennell
Amy Guggenheim Shenkan
Erik Olsson
Edward B. Pitoniak
Sarah Raiss
Christopher Zimmerman

Independence of the Directors

The Board is comprised of a majority of independent directors as defined under the applicable rules of the NYSE and National Instruments 58-101 (“NI 58-101”) and 52-110 (“NI 52-110”) adopted by the Canadian Securities Administrators. The NYSE listing standards provide that no director qualifies as “independent” unless the Board affirmatively determines that such director has no material relationship with the Company and NI 58-101 and NI 52-110 provide, in effect, that an independent director is a person that has no direct or indirect “material relationship” with the Company (defined to mean a relationship which could in the view of the Board, be reasonably expected to interfere with the exercise of the director’s independent judgment). The NYSE listing standards and NI 52-110 set forth specific categories of relationships that disqualify a director from being independent.

The Board has reviewed the independence of each director and considered whether any director has a material relationship with the Company. As a result of this review, the Board affirmatively determined that Beverley Briscoe, Robert G. Elton, Erik Olsson, J. Kim Fennell, Amy Guggenheim Shenkan, Edward B. Pitoniak, Sarah Raiss and Christopher Zimmerman, representing eight of the nine directors, are independent within the meaning of the applicable rules of the NYSE and NI 58-101 and NI 52-110. Mr. Saligram is not independent given his employment as CEO of the Company. The Board’s independence determination was based on information provided by the directors. The Board also determined that Eric Patel, who did not stand for re-election at the 2018 Annual and Special Meeting of Shareholders and, therefore, ceased to be a director of the Company on May 8, 2018, was independent during the portion of fiscal 2018 during which he served on the Board.

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Meetings of the Board and Board Member Attendance at Annual Meeting

In the year ended December 31, 2018, the Board held seven meetings, comprised of regularly scheduled quarterly meetings as well as a number of supplemental meetings. Agenda and materials in relation to Board and Board committee meetings are generally circulated to directors for their review in advance of meetings. The following table presents information about attendance by directors at Board and committee meetings for the year ended December 31, 2018. Each of our incumbent directors attended 100% of the meetings of the Board of Directors. All directors are invited to attend Audit committee meetings, regardless of whether they are members.

  

   Director   Board Meetings   Audit
Committee
Meetings
  Compensation
Committee
Meetings
  Nominating and
Corporate
Governance
Committee
Meetings
Ravi K, Saligram(1)   7   5   7   4
Beverley Briscoe(2)(5)   7   4   8   4
Robert G. Elton(3)(4)   7   5*   8  
J. Kim Fennell(4)   7     8  
Amy Guggenheim Shenkan(3)(5)(7)   7   5     3
Erik Olsson(3)(5)   7   5   8  
Eric Patel(3)(4)(6)   1   2   4  
Edward B. Pitoniak(5)   7       4*
Sarah Raiss(4)   7     8*  
Christopher Zimmerman(5)   7       4
Total Meetings held in 2018   7   5   8   4

* Indicates Director is Chair of the Committee.
(1) Mr. Saligram routinely attends Audit, Compensation and Nominating and Corporate Governance Committee meetings in an ex-officio capacity.
(2) Ms. Briscoe routinely attends Audit and Compensation Committee meetings in an ex-officio capacity.
(3) Member of the Audit Committee.
(4) Member of the Compensation Committee.
(5) Member of the Nominating and Corporate Governance Committee.
(6) Mr. Patel served as a director of the company for the period from May 1, 2017 until May 8, 2018, but did not stand for re-election at the 2018 Annual and Special Meeting of Shareholders.
(7) Ms. Guggenheim Shenkan became a member of the Nominating and Corporate Governance Committee on May 8, 2018.

In addition, the independent directors met immediately before or following each of the above-referenced board meetings, holding seven meetings and several information sessions in 2018 without management present. These meetings were chaired by the Board Chair.

Board members are encouraged but not required to attend the annual general meeting of shareholders. All but one of the directors serving at such time attended the 2018 annual and special meeting of shareholders.

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Independent Chair

Beverley Briscoe is the Board Chair and is an independent director. Under the description of the position adopted by the Board, Ms. Briscoe is responsible for overseeing the management, development and effective performance of the Board, and taking all reasonable measures to ensure that the Board fully executes its mandate and that directors clearly understand and respect the boundaries between the Board’s and management’s responsibilities. See also “— Board Leadership Structure” on page 38.

Board Mandate

The mandate of the Board is to supervise management of the Company and to act in the best interests of the Company and its shareholders. The Board acts in accordance with its formal mandate and:

the CBCA;
the Company’s Articles of Amalgamation and By-laws;
the Company’s Code of Business Conduct and Ethics;
the charters of the Board committees, including the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee;
the Company’s Corporate Governance Guidelines; and
other applicable laws and Company policies.

The Board or its designated committees approve significant decisions that affect the Company and its subsidiaries before they are implemented. The Board or a designated committee oversees the implementation of such decisions and reviews the results.

The Board meets with the CEO and other executive officers of the Company from time to time to discuss and review internal measures and systems adopted by the management to ensure a culture of integrity throughout the organization.

The Board is involved in the Company’s strategic planning process. The Board is responsible for reviewing and approving strategic initiatives, taking into account the risks and opportunities of the business. Management updates the Board on the Company’s performance in relation to strategic initiatives at least quarterly. Management undertakes an annual strategic planning process, with regular Board involvement in the process and review and approval of the resulting strategic plan. During fiscal 2018, there were seven meetings of the Board. The frequency of meetings and the nature of agenda items change depending upon the state of the Company’s affairs.

The Board is responsible for overseeing the identification of the principal risks of the Company and ensuring that risk management systems are implemented. The principal risks of the Company include those related to the Company’s underwritten business, ability to sustain and manage growth, its reputation and industry. The Board ensures that the Company adopts appropriate risk management practices, including a comprehensive enterprise risk management program, and the Board regularly reviews and provides input on the same. See also the discussion under “— Board’s Role in Risk Oversight” on page 38

The Board is responsible for the selection and performance of the CEO, and the appointment of other executive officers. The Compensation Committee is responsible for developing guidelines and procedures for selection and long-range succession planning for the CEO. See the discussions under “— Executive & Chief Executive Officer Succession Planning” on page 30.

The Board reviews all the Company’s financial communications, including annual and quarterly reports. The Company communicates with its stakeholders through a number of channels including its website. The Board oversees the Company’s disclosure policy, which requires, among other things, the accurate and timely communication of all material information as required by applicable law.

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The Audit Committee meets regularly to review reports from management of the Company and discuss specific risk areas with management and the external auditors. The Board, through the Audit Committee, oversees the effectiveness and integrity of the Company’s internal control processes and management information systems. The Audit Committee also directly oversees the activities of the Company’s external auditors. The Company’s Disclosure Committee reports to the Audit Committee on a quarterly basis on the quality of the Company’s internal control processes.

The Nominating and Corporate Governance Committee is responsible for reviewing the governance principles of the Company, recommending any changes to these principles, and monitoring their disclosure. This committee is responsible for the report on corporate governance included in the Company’s Proxy Statement. Through industry forums and access to professional advisors, the committee keeps abreast of best practices to ensure the Company continues to carry out high standards of corporate governance. The Board has adopted Corporate Governance Guidelines, which are available on our website at www.rbauction.com/investors.

As provided in the Company’s Corporate Governance Guidelines, the Board, with the assistance of the Nominating and Corporate Governance Committee, determines from time to time the number of directors on the Board, within a range specified in the Company’s charter documents. The Board believes that given the size and scope of the Company, the Board should include at least eight directors. The Board believes that the current membership of the Board reflects appropriate experience and an appropriate number of unrelated and independent directors, and permits the Board to operate in an efficient manner. As described below, in February 2015 the Board adopted a diversity policy, including a target for the number of women on the Board.

Position Descriptions

The entire Board is responsible for the overall governance of the Company. Any responsibility that is not delegated to senior management or a Board committee remains with the entire Board. The Board has adopted position descriptions for the CEO and the Board Chair. The charters of the committees of the Board are considered to be position descriptions for the chairs of the committees. The CEO position description was reviewed and revised in connection with the process of hiring Mr. Saligram. The CEO has overall responsibility for all Company operations, subject to Board oversight.

The Board reviews and approves the corporate objectives for which the CEO is responsible and such corporate objectives form a key reference point for the review and assessment of the CEO’s performance.

The Board has defined the limits to management’s authority. The Board expects management, among other things, to:

set the appropriate “tone at the top” for all employees of the Company;
implement effective succession planning strategies and provide for development of senior management;
review the Company’s strategies and their implementation in all key areas of the Company’s activities, provide relevant reports to the Board related thereto and integrate the Board’s input into management’s strategic planning for the Company;
carry out a comprehensive planning process and monitor the Company’s financial performance against the annual plan approved by the Board; and
identify opportunities and risks affecting the Company’s business, develop and provide relevant reports to the Board related thereto and, in consultation with the Board, implement appropriate mitigation strategies.

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Orientation and Continuing Education

All new directors receive a comprehensive information package, which includes a record of historical public information about the Company, a copy of the Company’s Code of Business Conduct and Ethics, the mandate of the Board and the charters of the Board committees, and other relevant corporate and business information and securities filings. In addition, the Company’s orientation for directors involves meeting with the Board Chair, CEO and senior management of the Company for an interactive introductory discussion about the Company, its strategy and operations, providing the directors with an opportunity to ask questions. New directors are also expected to attend a Company auction shortly after their appointment and to attend as an observer at least one meeting of each Board committee during their first year. All directors are also encouraged to meet with management informally, visit auction sites and attend auctions and “town hall” meetings on a periodic basis.

Senior management makes regular presentations to the Board on the main areas of the Company’s business and updates the Board quarterly on the Company’s financial and operating performance. External subject matter experts are also invited to make presentations to the Board on emerging topics of interest on a periodic basis. Periodically, directors tour the Company’s various facilities and attend Company auctions.

Directors are encouraged to take relevant professional development courses at the Company’s expense, and at times, the Company also recommends appropriate courses and conferences and encourages directors to attend. The Company maintains, at its expense, individual memberships for all directors with the National Association of Corporate Directors (“NACD”) and the Institute of Corporate Directors (“ICD”) and a number of directors have attended training courses offered to members of these institutions. The Company also canvases the directors on an annual basis to determine what courses or training each of them has attended during the past year.

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Current Directors’ Continuing Education during 2018

Significant training events for 2018 included:

  

   Date   Presented/Hosted By   Topic/Description   Attendees
February   Company   Orlando Site visit   All Directors
April   NACD   Leading Minds of Compensation   Sarah Raiss
May   ICD   National Conference   Beverley Briscoe, Robert
Elton, Sarah Raiss
June   JP Morgan   Independent Director Event — Varied topics: activism, geo-political risks, tips for excellent directorship, diversity and culture   Amy Guggenheim Shenkan
August   Company   Pleasanton Office Visit   All Directors
October   Fortune   Fortune Global Forum 2018   Ravi Saligram
October   NACD   Annual Summit   Robert Elton
October   Spencer Stuart   New Director Program: Shareholder Engagement   Amy Guggenheim Shenkan

Code of Business Conduct and Ethics

The Board has adopted a Code of Business Conduct and Ethics, applicable to all directors, officers and employees, the full text of which can be found on our website at www.rbauction.com/investors. Any shareholder may request a paper copy, free of charge, of the Code of Business Conduct and Ethics by making such request in writing to Ritchie Bros. Auctioneers Incorporated, Attention: Corporate Secretary, 9500 Glenlyon Parkway, Burnaby, British Columbia, V5J 0C6, Canada.

The Board and management review and discuss from time to time the effectiveness of the Code of Business Conduct and Ethics and any areas or systems that may be further improved. The Company performs a Code of Business Conduct and Ethics compliance review on an annual basis, and seeks annual confirmation of understanding of and adherence to the Code from all employees throughout the Company and from directors. The Company, through directors’ and officers’ questionnaires and other systems, gathers and monitors relevant information in relation to potential conflicts of interest that a director or officer may have.

No material change report has been filed that pertains to any conduct of a director or executive officer that constitutes a departure from the Code.

The Company complies with the relevant provisions under the CBCA that deal with conflict of interest in the approval of agreements or transactions, and the Code of Business Conduct and Ethics sets out additional guidelines in relation to conflict of interest situations. Specifically, the Code of Business Conduct and Ethics includes provisions requiring disclosure and avoidance of conflicts of interest where personal interests interfere, or appear to interfere, with the Company’s business responsibilities, including doing business with family members, accepting outside employment, using corporate opportunities for personal benefit, holding interests in outside organizations that impact the Company and regarding the Company not providing corporate loans or extending credit guarantees to or for the personal benefit of directors or officers.

The Company was founded on, and the business continues to be successful largely as a result of, a commitment to ethical conduct and doing what is right. Employees are regularly reminded about their obligations in this regard and senior management demonstrates a culture of integrity and monitors employees by being in attendance at most of the Company’s industrial auctions.

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The Company has implemented procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters or reports of wrongdoing or violations of the Code of Business Conduct and Ethics.

Exemptions or waivers from our Code of Conduct and Business Ethics may only be granted by formal approval of senior management and/or the Audit Committee. The Company will publish any waivers of the Code of Code of Conduct and Business Ethics for an executive officer or director on our website. The Company had no such waivers in 2018. Further, during 2018, the Company had no transactions where the policies and procedures summarized above required review, approval, or ratification, or where such policies and procedures were not followed.

Shareholder and Other Interested Party Communications to the Board

In 2015, in furtherance of its commitment to engaging in constructive and meaningful communication with shareholders, the Company adopted a formal Shareholder Engagement Policy in order to promote open and sustained dialogue with shareholders and other interested parties in a manner consistent with the Company’s disclosure controls and procedures. Shareholders and other interested parties may initiate communications with the Board by directing their questions or concerns to the independent directors through the Board Chair c/o the Corporate Secretary, Ritchie Bros. Auctioneers Incorporated, 9500 Glenlyon Parkway, Burnaby, B.C. V5J 0C6 or email to chairman_of_the_board@rbauction.com.

All relevant correspondence, with the exception of solicitations for the purchase or sale of products and services and other similar types of correspondence, will be forwarded to the Chair. Purely for administrative purposes, correspondence to the Chair may be opened or viewed by the Company’s Corporate Secretary. A copy of the Company’s Shareholder Engagement Policy is available on the Company’s website at www.rbauction.com/investors.

Executive and Chief Executive Officer Succession Planning

The Board is responsible for ensuring that the Company has an appropriate organizational structure in place, including a CEO and other key executives who have the skills and expertise to ensure the effective management of the Company. The Board is supported in this function by the Compensation Committee which is responsible for ensuring that management has a robust process in place for CEO and senior executive succession planning.

Under the oversight of the Compensation Committee, Mr. Saligram and the Chief Human Resources Officer have implemented a talent review process building on the Company’s annual performance management process. This process, in addition to identifying the high-potential and high-performing talent, assists Mr. Saligram and the Chief Human Resources Officer to review succession plans at key levels and establish development plans for key talent. This process is the basis for enterprise succession planning and will continue to evolve in the coming years with the aim of ensuring that the Company has the appropriate level of executive bench strength necessary to drive growth and ensure long-term profitability. The CEO formally reviews the succession plan for his role as well as other key executive roles with the full Board once a year in addition to having periodic discussions of talent progression throughout the year. In addition to ordinary course CEO succession planning, the Company’s Nominating & Corporate Governance Committee has, in consultation with the CEO, also implemented a succession plan to address unanticipated emergency situations. The emergency succession plan is reviewed annually.

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Following his appointment as CEO in 2014, Mr. Saligram, in consultation and with the approval of the Board, implemented a new organizational structure for the Company. This structure was subsequently augmented by the addition of further key executives with complimentary skill sets, primarily as part of the acquisition and integration of IronPlanet in 2017. These initiatives and developments have significantly strengthened the succession pool of the Company. At the same time, the Company has engaged external consultants to assist with pre-hire assessments as well as integration plans to support the successful integration of these new executives into the Company.

Further to the above, the Board encourages senior management to participate in professional and personal development activities, courses and programs, and supports management’s commitment to training and developing its employees with a special focus on areas of strategic importance.

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Board Committees

Audit Committee and Audit Committee Financial Expert

The Audit Committee oversees the Company’s corporate accounting and financial reporting processes and the audits of its financial statements. The members of our Audit Committee are Robert G. Elton, Erik Olsson and Amy Guggenheim Shenkan. Mr. Elton is Chair of the Audit Committee. All committee members qualify as independent directors for audit committee purposes under the applicable NYSE listing standards, SEC rules and NI 52-110, including Mr. Patel, who was a member of the Audit Committee until the 2018 Annual and Special Meeting of the Shareholders, at which he did not stand for re-election and Mr. Pitoniak, who was a member of the Audit Committee until the 2018 Annual and Special Meeting of the Shareholders. The Board has determined that all current members of the Audit Committee are “financially literate” as interpreted by the Board in its business judgment. The Board has further determined that Mr. Elton qualifies as an audit committee “financial expert,” as defined in the applicable rules of the SEC. The Audit Committee held five meetings during 2018. Each of our incumbent directors on the Audit Committee attended all meetings of the committee that occurred following the time of their appointment to the committee.

Information regarding the relevant education and experience of the members of the Audit Committee, as required under NI 52-110, is disclosed, under “Proposal One: Election of Directors — Information Concerning the Nominees to the Board of Directors”.

The Audit Committee Charter establishes the Audit Committee and sets out its duties and responsibilities. The Audit Committee reviews and reassesses the adequacy of the Audit Committee Charter on an annual basis and, if appropriate, proposes changes to the Board. The Audit Committee Charter was most recently updated in February 2017. The Audit Committee Charter is available on our website at www.rbauction.com/investors. For further information on our Audit Committee and related matters, including the Report on Audited Financial Statements, see “Proposal Two: Appointment of Ernst & Young LLP” on page 45.

The Audit Committee meets periodically with our independent accountants and management to review the scope and results of the annual audit and to review and discuss our financial statements and related reporting matters prior to the submission of the financial statements to the Board. In addition, the committee meets with the independent auditors on at least a quarterly basis to review and discuss the annual audit or quarterly review of our financial statements.

Compensation Committee

The Board has established a Compensation Committee, the current members of which are Robert G. Elton, Erik Olsson, J. Kim Fennell and Sarah Raiss. Ms. Raiss is Chair of the Compensation Committee. The Board has determined that the current committee members, as well as Mr. Patel, who was the Chair of the Compensation Committee until the 2018 Annual and Special Meeting of the Shareholders, at which he did not stand for re-election, qualify as independent directors for compensation committee purposes under the applicable NYSE standards, SEC rules and NI 58-101 and a non-employee director under the SEC rules. The Compensation Committee held eight meetings during 2018.

The Compensation Committee reviews and assesses its charter at least annually and, if appropriate, proposes changes to the Board. The charter was most recently updated in August 2017. A copy of the charter is available on our website at www.rbauction.com/investors.

The Compensation Committee, acting pursuant to its charter is responsible for, among other matters:

recommending to the Board the Company’s compensation philosophy for the Company’s executive officers, and overseeing the implementation of such compensation policies and programs;

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reviewing and approving corporate goals and objectives relevant to the CEO’s compensation, evaluating the CEO’s performance in light of those goals and objectives and determining, or recommending to the independent directors of the Board, the CEO’s compensation based on this evaluation at least annually;
reviewing and approving the CEO’s recommendations regarding annual compensation for the Company’s other executive officers;
considering the implications of the risks associated with the Company’s compensation policies, practices and programs and reporting to the Board annually regarding such considerations; and
reviewing and recommending to the Board for its approval and, where required, submission to the Company’s shareholders, annual and long-term incentive and equity-based compensation plans for the Company’s executive officers and others, relevant changes to such plans, and overseeing the administration of such plans.

The Compensation Committee’s charter allows the committee to form and delegate authority to subcommittees and to delegate authority to one or more designated members of the Board or Company officers, provided that any such delegation complies with all applicable laws, regulations and stock exchange rules. See “Compensation Discussion and Analysis” on page 48 for additional discussion regarding the process and procedures of the Compensation Committee with respect to compensation.

Nominating and Corporate Governance Committee

The Board has established a Nominating and Corporate Governance Committee, the current members of which are Edward B. Pitoniak, Beverley A. Briscoe, Amy Guggenheim Shenkan and Christopher Zimmerman. Mr. Pitoniak is Chair of the committee. The Board has determined that the current committee members each qualify as an independent director for nominating and corporate governance committee purposes under the applicable NYSE standards and NI 58-101. The committee held four meetings during 2018.

The Nominating and Corporate Governance Committee reviews and assesses its charter at least annually and, if appropriate, proposes changes to the Board. The charter was most recently updated in November 2017. The charter is available on our website at www.rbauction.com/investors.

The Nominating and Corporate Governance Committee, acting pursuant to its charter, serves the following purposes:

to address Board succession issues and identify individuals qualified to become members of the Board, consistent with criteria approved by the Board;
to select and recommend to the Board director and committee member candidates;
to develop, update as necessary and recommend to the Board corporate governance principles and policies applicable to the Company, including the Corporate Governance Guidelines, and to monitor compliance with such principles and policies;
to oversee the evaluation of the Board;
to facilitate and encourage director orientation and continuing education;
to review and recommend to the Board annual Board compensation;
to review and recommend for the Board’s approval annual director and officer insurance policies; and
to ensure the adoption and maintenance of a short-term or emergency succession plan for the CEO.

Annually, the Nominating and Corporate Governance Committee follows a process designed to consider the election of directors, in accordance with the guidelines articulated in its charter and the Company’s Corporate Governance Guidelines, including, if applicable, to seek individuals qualified to

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become new Board members for recommendation to the Board to fill any vacancies. In assessing the qualification of a candidate, the committee adheres to the director selection guidelines set forth in the committee’s charter, which include, among other things:

the candidate’s personal and professional ethics, integrity and values;
the candidate’s training, experience and ability at making and overseeing policy in the business, government or education sectors;
the candidate’s willingness and ability to devote the required time and effort to fulfill effectively the duties and responsibilities related to Board and committee membership, the candidate’s willingness and ability to serve on the Board for multiple terms, if nominated and elected; and
the candidate’s independence under SEC, Canadian securities laws or applicable stock exchange rules on independence.

The Nominating and Corporate Governance Committee believes that having directors with, among other things, relevant professional experience, industry knowledge, functional skills and expertise, geographic experience and exposure, leadership qualities and public company board and committee experience is beneficial to the Board as a whole. Directors with such backgrounds can provide a useful perspective on significant risks and competitive advantages and an understanding of the challenges the Company faces. The committee monitors the mix of skills and experience of directors and committee members to assess whether the Board has the appropriate tools to perform its oversight function effectively. With respect to nominating existing directors, the committee reviews relevant information available to it and assesses their continued ability and willingness to devote the required time and effort to serve as a director, taking into consideration any other engagements they may have, including any other public boards on which they serve. The committee also assesses each person’s contribution in light of the mix of skills and experience the committee deems appropriate for the Board. The Nominating and Corporate Governance Committee takes into account the diversity objectives set forth in the Diversity Policy and Directors Selection Guidelines discussed below in addition to the relevant skills and experience required by the Board, in selecting candidates for filling Board vacancies and charging its composition.

With respect to considering nominations of new directors, including nominations by shareholders, the Nominating and Corporate Governance Committee identifies candidates based upon the criteria set forth above and in its charter. The committee reviews selected candidates and makes a recommendation to the Board. The committee may also seek input from other directors or from senior management when identifying candidates.

The Nominating and Corporate Governance Committee has the responsibility for establishing corporate governance guidelines and overseeing the evaluation and effectiveness of the Board as a whole, as well as the committees of the Board and the contribution of individual directors. The committee maintains and updates from time to time an inventory of the competencies, capabilities and skills of current non-executive Board members. The following matrix is used as a reference tool for the ongoing assessment of Board composition, to ensure that desired skills and attributes are considered as new Board members are being assessed and to identify any gaps in the competencies that are required to successfully advance the overall strategy of the Company.

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  General Business Skill   Functional Experience
   Name   Large
Organization
Experience
  CEO
Experience
  Overseas
Experience
  Accounting
Knowledge
  Employee
Recruitment &
Development
  Environmental,
Health & Safety
  Financial /
Investment
  IT, Software,
Infrastructure &
Security
  Marketing   Organizational
Structure
  Sales   Strategic
Planning
  Industrial
Equipment
Industry
Beverley Briscoe     •         •         •         •         •         •         •                           •                  •         •    
Robert Elton     •         •                  •         •         •         •         •                                    •             
Erik Olsson     •         •         •         •         •                  •                           •         •         •         •    
Edward Pitoniak     •         •                           •                  •         •         •         •         •         •             
Sarah Raiss     •                  •                  •         •         •         •                  •                  •             
Christopher Zimmerman     •         •                           •                                    •         •         •         •             
J. Kim Fennell     •         •         •                  •                  •         •         •         •         •         •             
Amy Guggenheim Shenkan     •                           •         •                  •         •         •         •         •         •             

  

Pursuant to our by-laws, in addition to nomination of directors by or at the direction of the Board, shareholders may nominate director candidates pursuant to and in accordance with the provisions of the Company’s by-laws, which includes advance notice provisions for nominations of directors by shareholders, and of the CBCA. The advance notice provisions in the Company’s by-laws are described under “Shareholder Proposals and Director Nominations” on page 135.

The Nominating and Corporate Governance Committee does not have a formal policy on consideration of recommendations for candidates to the Board from registered shareholders. The Nominating and Corporate Governance Committee believes the evaluation of potential members of the Board is by its nature a case-by-case process, depending on the composition of the Board at the time, the needs and status of the business of the Company, and the experience and qualification of the individual. Accordingly, the Nominating and Corporate Governance Committee would consider any such recommendations on a case-by-case basis in their discretion, and, if accepted for consideration, would evaluate any such properly submitted nominee.

The Nominating and Corporate Governance Committee periodically reviews the Company’s director compensation practices and recommends to the Board the form and amount of compensation and benefits for directors. The committee from time to time retains independent consultants to provide advice regarding compensation for the directors of the Company. Please refer to the discussion of director compensation under “Non-Executive Director Compensation” on page 41.

Board Evaluations and Director Assessments

The Board has an annual assessment process for the Board, its committees, and individual directors. The process is administered by the Nominating and Corporate Governance Committee. The process considers Board and committee performance relative to the Board mandate or relevant committee charters, as appropriate, and provides a mechanism for all directors to assess and provide comments on Board, committee and Board Chair performance, as well as a self-assessment of individual director performance. As part of these evaluations, the directors will provide their assessments of the effectiveness of the Board, the Board Chair, themselves as individual Board members, and the committees on which they serve. The Board also periodically performs a peer-to-peer review as part of its continuing effort to advance and refine its assessment process, with the most recent peer-to-peer review taking place in February 2016. The Board as a whole will review the individual committee assessments, and the Chair will review individual members’ self evaluations and peer

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reviews with them, along with any other ideas for improvement. The Board may, at its discretion, engage an independent corporate governance expert to gather, organize and/or summarize the individual assessments for discussion with the Board and the committees. The results of each annual assessment are shared with all directors.

Director Term Limits and Board Renewal

The Company has determined not to adopt any formal term limit for the members of the Board (other than a mandatory retirement age of 72 as set out in the Company’s Corporate Governance Guidelines), but generally views a term of 10 – 15 years as an appropriate guideline to allow for the development of sufficient continuity and experience on the Board, while also ensuring adequate Board renewal. This guideline is set forth in the Company’s Corporate Governance Guidelines.

The Nominating and Corporate Governance Committee reviews the composition of the Board on a regular basis in relation to approved director criteria and skill requirements and recommends changes as appropriate to renew the Board.

Representation of Women on the Board and in the Director Identification and Selection Process

The Company has adopted a Diversity Policy and amended the Director Selection Guidelines forming part of the Nominating and Corporate Governance Committee Charter (the “Director Selection Guidelines”) to implement the provisions of such Diversity Policy. The Company values diversity and recognizes the organizational strength, deeper problem-solving ability and opportunity for innovation that diversity brings to the Board. The Company believes diversity is an important element of corporate governance and is good for the business.

Diversity contributes to the achievement of the Company’s corporate objectives. It enables the Company to attract people with the best skills and attributes, and to develop a workforce whose diversity reflects that of the communities in which it operates.

The Company’s Diversity Policy and Director Selection Guidelines established, as a measurable objective for improving gender diversity, that by 2016 at least 25% of the Board be comprised of women. In addition to a candidate’s independence, industry knowledge, skills, experience, leadership qualities and other factors, the Nominating and Corporate Governance committee takes into account the diversity objectives set forth in the Diversity Policy and Director Selection Guidelines in selecting candidates for filling nomination and appointment to the Board.

The Company has achieved this target and currently has three female directors on the Board, including the Board Chair, representing 33.3% of the Board, which had 9 directors on December 31, 2018.

Representation of Women in Executive Officer Appointments

The Company is committed to improving the level of diversity, including the representation of women in executive officer appointments. The Company currently has two female executive officers: Sharon Driscoll, our Chief Financial Officer, and Marianne Marck, our Chief Information Technology Officer, representing 22% of the Company’s executive officers, up from 14.2% in 2016 and up from 0% since the appointment of Mr. Saligram as CEO in July of 2014.

The Company has not adopted any specific target regarding women in executive positions. The Company believes that it has a balanced approach in its executive selection process and has given emphasis to gender representation in its executive search program. Pursuant to the Company’s Diversity Policy, the Company’s management is responsible for implementing the Diversity Policy, achieving the diversity initiatives established by the Company and reporting to the Board on progress toward and achievement of diversity initiatives. In addition, management has embarked on a process to assess and improve diversity within the organization and will continue to focus on the development of a diversity and inclusion strategy during 2019. Since 2011, the Company has sponsored various leadership development initiatives including the Women’s Go Networking and Mentoring program and

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the Company’s Women in Leadership program open to all female employees aspiring to leadership roles. In addition, we have sponsored high-potential women to attend external leadership training and the annual Art of Leadership for Women conference.

Further, as noted above, since the appointment of Mr. Saligram as the Company’s CEO in July of 2014, female representation at the executive officer level has increased from 0% to 22%. Mr. Saligram also recognizes that it is equally important to increase female representation at the mid-management level as these positions are the Company’s pipeline for future executive officer roles. As such, the Company has continued to focus on recognizing high-potential women in our organization and, as a result, female representation at the Company’s mid-management level and above has increased. In order to implement this initiative, the Company has:

established a global diversity and inclusion function supported by executive officers to anchor diversity and inclusion in the business strategy and to connect talent strategies;
structured a women’s employee resource group to implement Company-wide innovative diversity initiatives relating to women. These initiatives provide networking, training, development and mentoring opportunities for women to realize opportunities for personal and professional growth, and further develop confidence in leadership roles;
provided gender intelligence training to employees at director level and above to identify conscious and unconscious biases, with the aim of enhancing their appreciation of the value of diversity for the Company’s shareholders, customers, employees and the communities we serve;
developed a career website and recruiting collateral to include representation of the Company’s diverse workforce which demonstrates our commitment to diversity and inclusiveness. The talent acquisition team was trained on diversity recruiting tactics and the Company ensures female candidates are identified and interviewed during the recruiting process; and
developed its talent management strategy to ensure diversity and inclusion integration into every aspect of its programs including succession planning, leadership development, learning, and identification and development of high potential talent using 360-degree assessments and coaching.
launched the Women’s LINK Program, a global initiative to support women within the Company and further strengthen our core value of being a diverse and inclusive global organization to drive innovation through diversity of thought, gender, nationality and ethnicity.

The Company’s management believes these initiatives and efforts will ensure a pipeline of diverse candidates and improve representation of women to be considered when making leadership and executive officer appointments. The Company is committed to providing an environment in which all employees are treated with fairness and respect, and have equal access to opportunities for advancement based on skills and aptitude.

   Group(1)   Representation of Women
in Total Group
  Representation of Women as a
% of Total Group
Executive Officers     2 of 9       22.2 % 
Executive Committee     3 of 12       25.0 % 
Growth Council     7 of 39       17.9 % 
Director or above     22 of 104       21.2 % 

(1) Data is as of December 31, 2018.

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Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines addressing, among other things, Board and management roles, Board functions and responsibilities, director qualifications, director independence, Board structure and performance evaluations. The guidelines are available on our website at www.rbauction.com/investors

Board Leadership Structure

The Board does not have a formal written policy regarding the separation of the roles of CEO and Board Chair; however, the Board believes that separating the Board Chair and CEO positions is the most effective leadership structure for the Company. This structure allows the Board Chair to focus on the effectiveness of the Board while the CEO focuses on executing the Company’s strategy and managing the Company’s operations and performance.

As required under the Corporate Governance Guidelines, the Board holds at least four scheduled meetings each year of the non-executive directors without management present. Additional executive sessions may be held from time to time as required. Ms. Briscoe, as independent Board Chair, presides at executive sessions. The non-executive directors met either immediately before or following each meeting of the Board, holding five meetings and several information sessions in 2018 without management present.

Board’s Role in Risk Oversight

The Board oversees the Company’s enterprise risk management program, which focuses on the identification, assessment and mitigation of risks associated with achievement of the Company’s strategic objectives. Principal risks are identified and evaluated relative to their potential impact and likelihood of occurrence, including consideration of mitigating activities. The Company’s annual risk assessment process is linked to the annual strategic planning process, with periodic updates conducted to identify potential emerging risks, such as those associated with major business decisions, key initiatives and external factors. The Company’s enterprise risk management program is overseen at the senior executive level in conjunction with the Company’s risk management and internal audit group. Reports on principal risks and mitigation strategies are reviewed by the Company’s executive officers, the Audit Committee and the Board.

Oversight of the Company’s management of principal risks forms part of the mandate of the Board and its committees. The Board has primary responsibility for oversight of the enterprise risk management program. Each of the Company’s principal risks is the responsibility of either a specific committee or the entire Board, as appropriate. The Board is responsible for overseeing the Company’s activities with respect to the identification, assessment and mitigation of cybersecurity and technology risks. The Audit Committee is responsible for reviewing, including with management and the Company’s independent auditor, if appropriate, the guidelines and policies with respect to risk assessment and risk management, specifically the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. The Compensation Committee is responsible for compensation risk and accordingly, has considered the implications of the risks associated with the Company’s compensation policies and practices to ensure they do not encourage inappropriate risk taking by the Company’s executive officers.

Compensation Committee Interlocks and Insider Participation

There were no compensation committee or board interlocks among the directors during 2018.

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Other Matters

Legal Proceedings

We do not currently know of any legal proceedings against us involving our directors, executive officers, affiliates of record or beneficial owners of more than 5% of our common shares or any of their affiliates, or in which any of these persons has a material interest adverse to us.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s directors, certain officers and persons who own 10% or more of our common shares, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Such persons are required to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon the Company’s review of copies of such forms furnished to the Company and written representations from such persons, the Company is not aware of any failure by any of our executive officers, directors and greater than 10% holders to timely file any report required to be filed under Section 16(a) with respect to the fiscal year ended December 31, 2018.

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Certain Relationships and Related Person Transactions

No executive officer, director, or employee or former executive officer, director or employee of the Company or any of its subsidiaries, nor any proposed nominee for election as a director of the Company, nor any associate of any director, executive officer or proposed nominee, is, or at any time since January 1, 2018 has been, indebted to the Company or any of its subsidiaries or indebted to another entity where the indebtedness is subject to a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or any of its subsidiaries either for a purchase of securities or otherwise, other than “routine indebtedness” as defined in Form 51-102F5 adopted by the Canadian Securities Administrators.

Other than as disclosed in this Proxy Statement, since January 1, 2018, none of our directors, executive officers, nominees for director or beneficial owners of more than 5% of our common shares or any of their immediate family members was indebted to the Company or had a material interest in a transaction with the Company where the amount involved exceeded $120,000, nor are any such transactions currently proposed.

Other than as disclosed in this Proxy Statement, none of the directors or officers of the Company, no director or officer of a body corporate that is itself an insider or a subsidiary of the Company, no person or company who beneficially owns, directly or indirectly, voting securities of the Company or who exercised control or direction over voting securities of the Company or a combination of both carrying more than 10% of the voting rights attached to any class of outstanding voting securities of the Company entitled to vote in connection with any matters being proposed for consideration at the Meeting, no proposed director or nominee for election as a director of the Company and no associate or affiliate of any of the foregoing has or had any material interest, direct or indirect, in any transaction or proposed transaction since January 1, 2018 that has materially affected or would or could materially affect the Company or any of its subsidiaries.

In accordance with its charter, our Audit Committee is responsible for reviewing all related person transactions, including current or proposed transactions in which the Company was or is to be a participant, the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest. The Audit Committee does not currently have a written related party transaction policy but its practice is to consider relevant facts and circumstances in determining whether or not to approve or ratify such a transaction, such as: (i) the nature of the related person’s interest in the transaction; (ii) the terms of the transaction; (iii) the relative importance (of lack thereof) of the transaction to the Company; (iv) the materiality and character of the related person’s interest, including any actual or perceived conflicts of interest; and (v) any other matters the Audit Committee deems appropriate. Based on its consideration of all of the relevant facts and circumstances, the Audit Committee decides whether or not to approve such transactions and approves only those transactions that are deemed to be in the overall best interests of the Company.

In addition, pursuant to our Corporate Governance Guidelines, if any actual or potential conflict of interest arises for a director, the director is expected to promptly inform the Board Chair and the CEO. If a significant conflict exists and cannot be resolved, the director is expected to resign. All directors are expected to recuse themselves from any discussion or decision affecting their personal business or interests.

Other than as disclosed in this Proxy Statement, none of the directors or officers of the Company, no proposed nominee for election as a director of the Company, none of the persons who have been directors or officers of the Company at any time since January 1, 2018 and no associate or affiliate of any of the foregoing has any material interest, direct or indirect, in any matter to be acted upon at the Meeting.

There are no family relationships (by blood, marriage, or adoption, not more remote than first cousin) between any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer.

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Non-Executive Director Compensation

The Nominating and Corporate Governance Committee periodically reviews the Company’s director compensation practices and recommends to the Board the form and amount of compensation and benefits for directors. For 2018, the annual retainer paid to non-executive directors, other than the Board Chair, was $200,000. The annual retainer paid to the Board Chair was $345,000. The Chairs of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee received an additional fee of $20,000, $15,000, and $10,000, respectively.

Non-executive directors filing tax returns in jurisdictions outside of Canada are further entitled to reimbursement by the Company for expenses related to obtaining tax advice in connection with their engagement as a director of the Company, up to a maximum of $5,000 per calendar year.

Effective January 1, 2018, 50% of the annual Board retainer paid to non-executive directors, including the annual fee paid to the Board Chair (but excluding fees for chairmanship of Board committees) is paid in the forms of DSUs. Executive directors receive no additional compensation for service on the Board. For a discussion of DSUs, see “Non-Executive Director Deferred Share Unit Plan” on page 43.

Non-Executive Director Compensation Table

The table below sets out the compensation of the Company’s non-executive directors for the year ended December 31, 2018.

    Non-Executive Director   Fees Earned or Paid in
Cash
($)(1)
  Share-Based
Awards
($)(2)
  All Other Compensation
($)(3)
  Total
($)
Beverley Briscoe     172,500       168,375       21,395       362,270  
Robert Elton     120,000       92,250       11,063       223,313  
J. Kim Fennell     100,000       92,250       1,534       193,784  
Amy Guggenheim Shenkan     100,000       92,250       2,277       194,527  
Erik Olsson     100,000       92,250       13,788       206,038  
Eric Patel (4)     70,970             251,046       322,016  
Edward Pitoniak     110,000       92,250       15,705       217,955  
Sarah Raiss     115,000       92,250       8,094       215,344  
Christopher Zimmerman     100,000       92,250       11,777       204,027  

(1) Represents total fees earned or paid in cash for service on the Board, including annual Board retainer, the annual fee paid to the Board Chair and to the Committee Chairs.

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(2) The dollar amounts represent the grant date fair value of DSUs granted in 2018, calculated in accordance with ASC 718, utilizing the assumptions discussed in Note 2(f) and Note 25 to our financial statements for the fiscal year ended December 31, 2018, without taking into account estimated forfeitures. The number of DSUs granted and the fair value on each grant date calculated in accordance with ASC 718 are as follows:

  March 6, 2018(5)   May 15, 2018   August 14, 2018   November 14, 2018
   Non-Executive Director   Fair Value ($)   DSUs (#)   Fair Value ($)   DSUs (#)   Fair Value ($)   DSUs (#)   Fair Value ($)   DSUs (#)
Beverley Briscoe     39,000       1,217       43,125       1,299       43,125       1,262       43,125       1,285  
Robert Elton     17,250       538       25,000       753       25,000       732       25,000       745  
J. Kim Fennell     17,250       538       25,000       753       25,000       732       25,000       745  
Amy Guggenheim Shenkan     17,250       538       25,000       753       25,000       732       25,000       745  
Erik Olsson     17,250       538       25,000       753       25,000       732       25,000       745  
Eric Patel                                                
Edward Pitoniak     17,250       538       25,000       753       25,000       732       25,000       745  
Sarah Raiss     17,250       538       25,000       753       25,000       732       25,000       745  
Christopher Zimmerman     17,250       538       25,000       753       25,000       732       25,000       745  

(3) All other compensation includes the value of additional DSUs credited to non-executive directors during 2018 corresponding to dividends declared and paid by the Company on common shares during 2018 and reimbursement of expenses for tax advice. The value of such dividend equivalent DSUs was calculated by multiplying the number of such additional DSUs credited by the fair market value of a common share on the date the dividend was paid.
(4) Amounts for Mr. Patel reflect fees earned for his services through the date of the 2018 Annual and Special Meeting of Shareholders, at which Mr. Patel did not stand for re-election. The amount reflected in All Other Compensation includes a $251,046 cash settlement, net of tax withholding, for his vested DSUs subsequent to his departure from the Board.
(5) DSUs are awarded quarterly in arrears. The March 6, 2018 DSU grants are based on the 2017 compensation practices that were in place in the fourth quarter of 2017. The remaining DSU grants are based on the 2018 compensation practices detailed above. For a discussion of DSUs, see “Non-Executive Director Deferred Share Unit Plan” on page 43.

Director Share Ownership Guidelines

In January 2012, the Board adopted share ownership guidelines for the non-executive directors of the Company. The Board believes that share ownership aligns the interests of its directors with the interests of the Company’s shareholders, promotes sound corporate governance and demonstrates a commitment to the Company. Effective January 2018, the Board amended its share ownership guidelines for the non-executive directors of the Company to require non-executive directors to hold common shares and/or DSUs with a combined value of not less than five times the cash portion of the annual fixed retainer paid to such directors. Since the value of DSUs increase or decrease in lock-step with the price of the Company’s common shares, DSUs reflect a philosophy of aligning the interests of the directors with those of the shareholders by tying compensation to share price performance.

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The following table sets out the applicable equity ownership guideline and equity ownership for each current non-executive director.

   
Equity Ownership Guideline
  Common Shares(1)
(#)
  DSUs (2) (#)   Total Value of Equity Ownership(3) ($)   Meets Share Ownership Requirement(4)
   Non-Executive Director   Multiple of Cash Portion of Retainer   Cash Portion of Retainer ($)   Total Value of Equity Ownership Required
($)
Beverley Briscoe     5x       172,500       862,500       22,288       33,136       2,039,056       Yes  
Robert Elton     5x       100,000       500,000             17,232       633,975       Yes  
J. Kim Fennell     5x       100,000       500,000             3,447       126,805       No (5) 
Amy Guggenheim Shenkan     5x       100,000       500,000             3,447       126,805       No (6) 
Erik Olsson     5x       100,000       500,000             13,941       512,898       Yes  
Edward Pitoniak     5x       100,000       500,000       7,121       18,264       933,917       Yes  
Sarah Raiss     5x       100,000       500,000             5,704       209,866       No (7) 
Christopher Zimmerman     5x       100,000       500,000       6,856       18,264       924,168       Yes  

(1) Represents the number of common shares held as of February 25, 2019.
(2) Represents the number of DSUs and dividend equivalents credited to each non-executive director held as of February 25, 2019.
(3) The total value of equity ownership is based on the closing price of the Company’s common shares on the NYSE on February 25, 2019, of $36.79 and includes the value of both common shares and DSUs.
(4) The share ownership guidelines were implemented in January 2012 and updated in December 2017.
(5) Mr. Fennell joined the Board in July 2017 and is anticipated to meet the equity ownership guideline by July 2022.
(6) Ms. Guggenheim Shenkan joined the Board in July 2017 and is anticipated to meet the equity ownership guideline by July 2022.
(7) Ms. Raiss joined the Board in July 2016 and is anticipated to meet the equity ownership guideline by July 2021.

Non-Executive Director Deferred Share Unit Plan

In 2017, the Board approved amendments to the DSU Plan pursuant to which, in respect of calendar years commencing on or after January 1, 2018, 50% of the annual Board retainer paid to non-executive directors, including the annual fee paid to the Board Chair, will be paid in the form of DSUs regardless of a director’s current level of share ownership or whether a non-executive director had satisfied share ownership guidelines. Prior to January 1, 2018, a non-executive director on each quarterly date on which the annual Board retainer for the prior completed calendar quarter was payable could elect to receive a cash payment only if the share ownership guidelines were met.

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The annual Board retainer which is payable in the form of DSUs as contemplated in the plan is payable, calculated and credited quarterly in arrears as follows:

The number of DSUs credited to a director is calculated by dividing the dollar amount of the portion of the Board retainer to be paid in the form of DSUs by the fair market value of a common share on the date the DSUs are credited, being the volume weighted average price of the Company’s common shares reported by the NYSE for the immediately preceding twenty trading days.
DSUs are credited on the 65th day (or the next business day if the 65th day is not a business day) after the end of the quarter in relation to the portion of the annual Board retainer payable for any fourth calendar quarter and DSUs are credited on the 45th day (or next business day if the 45th day is not a business day) after the end of the quarter in relation to the portion of the annual Board retainer payable for any other calendar quarter.

Although DSUs vest immediately upon being granted under the DSU Plan, no amount is payable to the non-executive director holding the DSUs until the director ceases to be a director, following which the director will be entitled to receive a lump sum cash payment, net of any applicable withholdings, equal to the number of DSUs held multiplied by the fair market value of one common share (determined as described above) as of the 24th business day after the first publication of the Company’s interim or annual financial statements and management’s discussion and analysis for the fiscal quarter of the Company next ending following the director ceasing to hold office. Additional DSUs are credited under the DSU Plan corresponding to dividends declared on the common shares. DSUs are considered equivalent to common shares for purposes of determining whether a director is complying with or satisfying share ownership guidelines.

Non-Executive Directors Long-term Incentive Plan

The Company adopted the long-term incentive plan for non-executive directors (the “Non-Executive Director LTIP”) in 2009. Under the Non-Executive Director LTIP, part of the annual retainer of non-executive directors was used prior to 2012 to purchase common shares. Such shares were purchased by the administrator of the Non-Executive Director LTIP through open market purchases and held by the plan administrator on behalf of the participants.

In connection with the adoption of the DSU Plan, the Non-Executive Director LTIP was amended to provide that the Company would cease to pay contributions for participants under such plan to the plan administrator in respect of annual fees earned after January 1, 2012. Participants are not permitted to withdraw any common shares held in the Non-Executive Director LTIP unless a certain event occurs or certain conditions are satisfied (e.g. the termination, retirement or resignation of the participant as a director of the Company).

Effective August 8, 2018, the Non-Executive Director LTIP was discontinued. The shares were distributed and continue to be held directly by those Non-Executive Directors who were participating in the Non-Executive Director LTIP.

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Proposal Two: Appointment of Ernst & Young LLP

Overview

We are asking our shareholders to appoint Ernst & Young LLP as our auditor for the year ending December 31, 2018 and that the Audit Committee be authorized to fix their remuneration. Ernst & Young LLP has been our auditor since April 25, 2013. The Audit Committee is satisfied that Ernst & Young LLP meets the relevant independence requirements and is free from conflicts of interest that could impair their objectivity in conducting an audit of the Company.

To the Company’s knowledge, a representative from Ernst & Young LLP will be present at the Meeting to take questions, and the firm will be permitted to make a statement if it so desires.

Fees Billed by Independent Auditors

The fees billed to us by Ernst & Young LLP, our independent auditor, in each of the last two fiscal years are set forth in the following table. All services and fees, including tax service fees, were pre-approved by the Audit Committee.

  Year Ended December 31,
   Item   2018(5)   2017(5)
Audit Fees(1)     1,607,078       1,679,402  
Audit-Related Fees(2)           119,412  
Tax Fees(3)     15,316       40,021  
All Other Fees(4)            
Total   $ 1,622,394     $ 1,838,835  

(1) “Audit Fees” represents fees billed for the audit of our annual financial statements and review of our quarterly financial statements and for services that are normally provided in connection with statutory and regulatory filings or engagements. Audit fees are billed and paid in Canadian dollars.
(2) “Audit-Related Fees” represents fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”
(3) “Tax Fees” include fees for tax compliance, tax advice and tax planning.
(4) “All Other Fees” include all other non-audit services.
(5) The amounts reported are converted from Canadian dollars to U.S. dollars based on the average Canadian and U.S. dollar exchange rate of CA$1 to US$0.7716 for 2018 and CA$1 to US$0.7704 for 2017.

Pre-Approval Policies and Procedures

The Audit Committee Charter provides that the Audit Committee is responsible for the selection, appointment, and retention of the independent auditor, subject to annual shareholder approval, and evaluation and, where appropriate, replacement of the independent auditor. In addition, the Audit Committee approves compensation of the independent auditor. The Audit Committee also has responsibility for pre-approving the retention of the independent auditor for all audit and non-audit services the independent auditor is permitted to provide the Company and approve the fees for such services, other than any de minimis non-audit services allowed by applicable law or regulation. The Audit Committee is required to pre-approve all non-audit related services performed by the auditors.

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The Audit Committee’s pre-approval policy outlines the procedures and the conditions pursuant to which permissible services proposed to be performed by the auditors are pre-approved, provides a general pre-approval for certain permissible services and outlines a list of prohibited services. For 2017 and 2018, all of the services related to amounts billed by the Company’s external accountants were pre-approved by the Audit Committee.

Recommendation of the Board

The Board recommends a vote “FOR” the appointment of Ernst & Young LLP as the Company’s auditor for the fiscal year ending December 31, 2019 and the authorization of the Audit Committee to fix the auditor’s remuneration.

Report of the Audit Committee

To the Shareholders of Ritchie Bros. Auctioneers Incorporated:

The Audit Committee reviewed and discussed with management and the Company’s independent auditors the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Audit Committee has discussed with the independent registered public accountants matters required to be discussed by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and considered the compatibility of non-audit services with the auditors’ independence. In addition, the Audit Committee discussed the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301. The Audit Committee also has received the written disclosures and the letter from the independent accountant required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has also discussed with the independent accountant the accountant’s independence. Based on the review and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the SEC.

Audit Committee of the Board
Robert G. Elton, Chair
Amy Guggenheim Shenkan
Erik Olsson

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Proposal Three: Advisory Vote on Executive Compensation

Overview

The Board of Directors believes that the Company’s operating success and shareholder value depend to a large extent on the ability of the Company’s leadership. Accordingly, our executive compensation program is designed to provide a competitive level of compensation necessary to:

attract and retain the talent needed to lead a strategic transformation to grow the Company’s business;
provide a strong incentive for executives and key employees to work toward the achievement of the Company’s goals, including long-term earnings growth and sustained value creation; and
ensure that the interests of management and the Company’s shareholders are aligned and that the compensation packages are fair to senior management, employees, the shareholders and other stakeholders.

In accordance with Section 14A of the Exchange Act and Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the following resolution, commonly known as a “Say on Pay” proposal, gives our shareholders the opportunity to vote to approve or not approve, on an advisory basis, the compensation of our Named Executive Officers (“NEOs”). This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and our compensation philosophy, policies and practices, as disclosed in this “Compensation Discussion and Analysis” beginning on page 48. Shareholders will be given an opportunity to cast an advisory vote on this topic annually.

While the final vote is advisory in nature and therefore not binding on us, or our Directors, we value the opinions of all our shareholders and will carefully consider the outcome of this vote when making future compensation decisions for our NEOs.

We encourage our shareholders to read this “Compensation Discussion and Analysis”, which explains specifically how, what and why we pay our executives, and will equip shareholders to cast an informed vote.

Our Board believes that our current compensation program appropriately links executive pay to achievement of corporate goals, properly aligns management and shareholder interests, and is fair, reasonable and competitive relative to market practice. We therefore recommend that shareholders vote in favor of the following resolution:

“RESOLVED, that the compensation paid to the Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the Executive Compensation Tables and the accompanying narrative discussion in the proxy statement of the Company, dated March •, 2019, is hereby approved.”

Recommendation of the Board

The Board recommends a vote “FOR” the adoption of the above resolution indicating approval of the compensation of the Company’s NEOs.

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Compensation Discussion and Analysis

Table of Contents

A LETTER FROM OUR COMPENSATION COMMITTEE CHAIR     50  
EXECUTIVE COMPENSATION PROGRAM PHILOSOPHY     52  
EXECUTIVE COMPENSATION PRINCIPLES AND FRAMEWORK     54  
Attract, Motivate and Retain Top-caliber Talent     54  
Pay for Performance     54  
Reward Long-Term Growth and Profitability     55  
Align Compensation with Shareholder Interests     55  
Promote Accountability; Discourage Excessive Rick-Taking     56  
The Compensation Committee     57  
Advisors to the Compensation Committee     57  
Compensation Framework     58  
2018 BUSINESS PERFORMANCE     59  
2018 Strategic Achievements     59  
2018 Key Accomplishments     60  
Long-Term Financial Performance     61  
2018 COMPENSATION FOR NAMED EXECUTIVE OFFICERS     62  
Significant 2018 Compensation Actions     62  
CEO Compensation Summary     63  
CEO Realizable Pay Analysis     64  
Pay-for-Performance Design     65  
Elements of Executive Compensation     66  
Base Salary     66  
Short-term Performance-Based Non-Equity Incentive Compensation     67  
Long-term Equity Based Incentive Compensation     68  
Special Equity Awards     75  
New-Hire Awards Granted     76  
Deferred Compensation     77  
Other Compensation     77  
COMPENSATION PEER GROUP     78  
COMPENSATION COMMITTEE REPORT     82  
EXECUTIVE COMPENSATION TABLES     83  
Summary Compensation Table     83  

  

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CEO Pay Ratio     85  
2018 Grants of Plan-Based Awards     86  
Stock Option Plan     87  
IronPlanet Stock Plans     88  
Performance Share Units Plans     88  
Restricted Share Unit Plans     90  
Outstanding Equity Awards as of December 31, 2018     91  
Stock Option Exercises and Shares Vested in 2018     93  
Non-Qualified Deferred Compensation     95  
U.S. Deferred Compensation Plan     95  
Executive Employment Agreements     96  
Potential Payments upon Termination or Change in Control     100  
Equity Compensation Plan Information as of December 31, 2018     102  

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Letter from our Compensation Committee Chair

  

  

Dear Fellow Shareholders,

In 2018, Ritchie Bros. continued the transformation from an unreserved event-based auctioneer to a customer-centric, multi-channel provider of disposition services for the industrial equipment industry. Looking ahead, we are excited by the tremendous growth opportunities on the horizon.

We continue to believe we have compensation programs that are strongly linked to our strategy and business model and to the creation of long-term sustainable value. Shareholders confirmed this by our most recent strong Say on Pay vote of 97.3%.

The following decisions were made by the Committee in 2018 with future changes for 2019.

Performance Share Unit Plan Changes

In 2018 we made changes to our performance share unit plan to solidify the link between executive pay and company performance as the company continues its transformational journey. After a full review of the performance metrics, the Committee remained satisfied with the alignment of ROIC and Earnings CAGR with the Company’s long-term strategic plans. In consultation with some major shareholders, the Committee added a third performance metric, operating free cash flow (OFCF) per share, given how important cash generation is to our shareholders, and as an indicator of the financial health and value of the business. For 2019 we will have three equally weighted metrics:

i. ROIC

ii. Earnings CAGR

iii. OFCF per share

For a description of these non-GAAP measures refer to “Annex: Selected Definitions of Operational and Financial Performance” in this Proxy Statement.

We stress test the stretch in the plans annually with the assistance of our external compensation consultant — including reviewing payout curves, the ratio of value shared between management and shareholders and targets relative to historic performance.

The Committee amended certain PSU and RSU awards (including the CEO Sign-On Grant) to allow these awards to be settled in shares, rather than cash, to encourage executive share ownership. We also adjusted the CEO Sign-On Grant (SOG) following the IronPlanet acquisition, to align the remaining performance periods for measuring TSR with the performance periods used for the 2016 and 2017 PSU grants awarded to other employees and executives. This resulted in a performance of 118.8% for the most recently vested CEO SOG.

We eliminated the TSR modifier for our PSUs, as it is not effective to measure industry outperformance or underperformance, because we do not have a group of peer companies with similar business models and TSR performance correlation. We have retained Committee discretion to modify performance factors and payouts accordingly based on actual absolute or relative performance.

  

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2019 Share Request

At the 2019 AGM we are asking our shareholders for an additional 7,000,000 shares for our equity plans. Our ability to provide equity-based awards is critical to our ability to attract, motivate and retain high quality employees, and drive performance aligned with our strategy and create shareholder value. Our run rate and overhang has been positioned close to the median of our compensation peer group. Our aggregate value of annual grants as a percent of market capitalization has been on the lower end of our peers.

We believe our actions continue to provide strong pay for performance linkage and thank our shareholders for their support of our plans.

Sincerely,

[GRAPHIC MISSING]

Sarah Raiss
Chair, Compensation Committee
(On behalf of the entire board)

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Executive Compensation Program Philosophy

The philosophy underlying our executive compensation program is to provide attractive, flexible and market-based total compensation that is tied to performance and aligned with the interests of our shareholders.

Our executive compensation program is structured to align our named executive officers’ interests with those of our stockholders, by linking compensation to business objectives and performance, and to attract and retain talented executives. In general, our executive officers, including Ravi Saligram, our Chief Executive Officer, and our other named executive officers, are eligible for, and participate in, our compensation and benefits programs according to the same terms as those available to all of our employees. Our executive compensation program is administered by the Compensation Committee of our Board of Directors, which is composed solely of independent directors. The key elements of our executive compensation program are base salary, annual cash bonuses pursuant to our Short-Term Incentive Plan (“STI”), and long-term equity awards under our Long-Term Incentive Plan (“LTI”).

The Compensation Committee is responsible for determining the level of compensation awarded to our named executive officers (“NEO”) and our other executive officers. The Compensation Committee targets compensation levels that take into account current market practices and believes that offering market-comparable pay opportunities allows our Company to maintain a successful and stable executive team.

Our compensation practices communicate both our goals and our standards of conduct, and they motivate and reward employees in relation to their performance. Within this framework, we follow these principles:

Attract, motivate and retain top-caliber talent
Pay for performance
Reward long-term growth and profitability
Align compensation with shareholder interests
Promote accountability; no incentive for excessive or inappropriate risk-taking

These principles are the foundation for a compensation framework that focuses management’s best efforts on achieving the Company’s goals and generating sustainable shareholder value. To this end, our principles lead us to take certain actions:

What We Do

At-risk Pay:  79% of the CEO’s target compensation is at-risk incentive compensation, and between 60% to 69% of the other NEOs’ target compensation is at risk
Pay for Performance
Review Peer Compensation Data:  prior to making executive compensation decisions
Competitive Benchmarking
Double Trigger Severance Provisions
Caps on Incentive Payouts
Mitigate Undue Risk
Post-Employment Covenants
Modest Perquisites:  providing only those that have a sound value to our business
Stock Ownership Guidelines
Regular Review of Share Utilization

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Responsive to Shareholder Feedback
Independent Compensation Consulting Firm
Annual Risk Review by the Compensation Committee

What We Don’t Do

No Excise Tax Gross-Ups upon Change in Control
No Repricing of Stock Options
No Liberal Recycling of Shares
No Pledging Shares of Company Stock Received as Compensation as Collateral for a Loan
No Hedging Shares of Company Stock Received as Compensation
No Guaranteed Incentive Payouts
No Above Market Returns on Deferred Compensation Plans
No Tax Gross Ups
No Excessive Severance Obligations

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Executive Compensation Principles and Framework

Our compensation principles and practices are summarized below.

Attract, Motivate and Retain Top-caliber Talent

Our compensation principles and framework are designed to attract and retain the superior leadership we need to lead and grow the business.

To ensure our compensation practices remain competitive, we benchmark NEOs’ compensation against the compensation offered by companies in our Peer Group. We engage an independent compensation consultant to assess the appropriateness of the Peer Group and to advise on compensation structure and levels.

In 2016 we thoroughly reviewed our Peer Group with the assistance of Meridian Compensation Partners (“Meridian”). With the acquisition of IronPlanet we again engaged Meridian in 2017 to evaluate our Peer Group given the multichannel evolution and enhanced digital capabilities of our new combined company. See the detailed discussion of our Peer Group on pages 78 – 81.

Pay for Performance

Our compensation policy supports the Company’s strategy and business goals. We pay for performance.

CEO target compensation: 79% at-risk.
The CEO’s target compensation is payable based on achievement of performance targets linked directly to the Company’s Strategic Roadmap and to long-term shareholder value creation. See graph below.
Executive target compensation: 60% to 69% at risk (depending on the executive).
Majority of executives’ compensation (at target) is in the form of at-risk incentive compensation that is awarded and paid out based on the achievement of Company goals, corporate and business unit financial performance, and the creation of long-term sustainable shareholder value. The proportion of variable versus fixed compensation increases along with an executive’s responsibility and ability to affect the Company’s strategic results. See graph below.
Our STI plan focuses on specific annual objectives and is meant to reward achievement of our annual financial performance goals. The plan establishes appropriate company performance expectations to ensure that our executives are accountable for our continued growth and profitability. Performance metrics and goals were established by the Compensation Committee based on an informed review of the Company’s financial performance and strategy and the pay practices of the companies in our Peer Group.
Our LTI plan is 100% performance focused, comprised of 50% PSUs and 50% stock options. We grant stock options as part of a well-balanced compensation program to focus our executives on increasing long-term shareholder value. Stock options have a ten-year term and reward for share price appreciation. PSUs have a three-year performance period and reward for meeting certain pre-established performance targets.

[GRAPHIC MISSING] 

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Reward Long-Term Growth and Profitability

Shareholder-Oriented Long-Term Incentives

Long-term incentives make up a significant portion of total direct compensation (58% for our CEO and between 38% and 46% for our other NEOs), and like short-term variable pay is contingent on performance.

RSUs are not included in our regular long-term incentive award mix. We occasionally award RSUs on a very targeted basis, primarily to new hires to compensate for equity awards forfeited at a former employer, or to provide retention for business-critical employees where there is a real retention risk.

The Compensation Committee and the Board believe that the use of equity-based compensation, combined with share ownership guidelines, aligns the interests of executives with those of shareholders, and rewards the creation of sustainable, long-term shareholder value.

Our heavy weighting toward long-term incentives ensures that pay outcomes are fully aligned with shareholders over the longer term while keeping our compensation program competitive with our peers.

Our emphasis on equity compensation and the significant shareholdings required to be maintained by our executives create a direct link between share price performance and the potential value that our executives can realize from our equity programs.

Align Compensation with Shareholder Interests

Our compensation policy promotes alignment of interest between management and shareholders through equity ownership requirements, at-risk pay elements, and long-term incentive compensation. As well, we actively seek our shareholders’ opinions on our executive compensation program and carefully consider their feedback when making compensation decisions.

Equity Ownership Requirements and Hold Until Met

Our CEO, Mr. Saligram, is subject to market leading ownership requirements. He is required to hold 100% of the after-tax value from any payouts or gains resulting from awards under the annual long-term incentive program and his sign-on grant until the share ownership guidelines are satisfied. Thereafter, 50% of the after-tax value of each payout/gain is to be held for a period of at least two years following the payout date. In addition, Mr. Saligram is required to hold common shares with a value equal to the sum of his annual base salary and short-term incentive bonus for a period of at least one year following the end of his employment.

Our share ownership guidelines require all NEOs, as well as all other executives, to hold meaningful levels of equity in the Company. Executives must hold equity with a minimum value equal to a multiple of their base salary, with the multiple increasing in proportion to the executive’s responsibility and ability to affect the company’s strategic results. Ownership levels for NEOs are shown on the table below.

   NEO   Ownership
Guideline
  Minimum Share
Value Required
  Qualifying
Ownership(1)
  Ownership
Completion
Ravi Saligram     5x base salary       5,000,000       6,229,446       125 % 
Sharon Driscoll     3x base salary       1,342,584       1,172,126       87 % 
Jeff Jeter     3x base salary       1,230,000       2,118,594       172 % 
Karl Werner     3x base salary       1,192,500       920,999       77 % 
Todd Wohler     3x base salary       1,200,000       923,334       77 % 

(1) Qualifying ownership is as of February 25, 2019.

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Shareholder Feedback

The Company endeavors to solicit shareholders’ views on a number of topics. We held a non-binding advisory shareholder vote on the compensation program for our NEOs, commonly referred to as a “say on pay” vote, at our 2018 Annual and Special Meeting of Shareholders.

We received 97% of votes in favor of our say on pay proposal at the 2018 Annual and Special Meeting of Shareholders. Our Compensation Committee has considered and will continue to consider the outcome of our say on pay votes and our shareholders’ views when making compensation decisions for our NEOs, including the outcome of “Proposal Three: Advisory Vote on Executive Compensation” at this Annual and Special Meeting.

Promote Accountability; Discourage Excessive Risk-Taking

Our compensation program discourages excessive risk-taking. The Company enforces this principle through the share-ownership requirements described above, as well as hedging and trading restrictions and a clawback policy described below. Moreover, each year the Compensation Committee reviews compensation policies and practices to ensure they do not encourage executive officers to take excessive or inappropriate risks.

Hedging and Trading Restrictions

The Company prohibits hedging or monetization transactions that could limit an employee’s economic risk exposure to our share price with respect to their ownership of common shares or awards of stock options or other equity-based compensation. Prohibited transactions include the purchase of financial instruments, including prepaid variable forward contracts, equity swaps, collars, puts, calls or other derivative securities that are designed to hedge or offset a decrease in market value of the Company’s equity securities.

Clawback Policy

The Company has an Incentive Compensation Clawback Policy, which permits recovery of both short and long-term equity Incentive Compensation from all executive officers (the “Clawback Policy”) if:

the Company restates financial results, for any reason other than a change in applicable accounting rules or interpretations; and
the amount of the performance-based compensation paid or awarded to an executive officer would have been a lower amount had it been calculated based on such restated financial statement.

In this circumstance, the Board may seek to recover for the benefit of the Company the excess performance-based compensation, both short- and long-term, paid or awarded during the three years preceding such restatement.

Compensation Risk and Governance Review

Oversight of the Company’s management of principal risks forms part of the mandate of the Board and its committees. Each of the Company’s principal risks is the responsibility of either a specific committee or the entire Board, as appropriate. The Compensation Committee is responsible for compensation risk and, accordingly, has considered the implications of the risks associated with the Company’s compensation policies and practices to ensure they do not encourage inappropriate risk-taking by the Company’s executive officers.

The Compensation Committee has implemented a formal decision-making process that involves management, the Committee and the Board. The Committee uses a multi-step review process for all compensation matters, first adopting goals and metrics of performance, reviewing how performance compares to the pre-established metrics and then seeking Board input as to the reasonableness of the results. The Committee uses independent external compensation consultants to provide advice in connection with executive pay benchmarking, incentive plan design, compensation governance and pay for performance. The Committee believes that the current executive compensation program

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strikes an appropriate balance between short-term and long-term incentives, adopting multiple distinct metrics for each component that are aligned with the Company’s overall strategic objectives. The program ensures that executives are compensated fairly and in a way that does not encourage executives to take inappropriate risks.

All of the members of the Compensation Committee are independent, and one member is also the chair of the Audit Committee, ensuring that the Compensation Committee has an in-depth knowledge of the Company’s financial position when making compensation decisions.

In 2018, the Compensation Committee completed a full risk review of the executive compensation programs with Meridian, our independent compensation consultants, and concluded that our compensation programs are not reasonably likely to have a material adverse effect on the Company, its business or its value. This review helps the Compensation Committee to structure executive compensation programs that avoid exposing the Company to unwarranted risk.

The Compensation Committee

The Compensation Committee is comprised of Robert G. Elton, Erik Olsson, J. Kim Fennell and Sarah Raiss, each of whom is an independent director, with Ms. Raiss serving as the Chair. Details of the Compensation Committee’s duties are summarized under “Corporate Governance — Board Committees — Compensation Committee” on page 32 and are fully set out in the Compensation Committee’s charter, which can be found on our website at www.rbauction.com/investors. The Compensation Committee held eight meetings during 2018.

Advisors to the Compensation Committee

The Compensation Committee retains independent consultants to provide advice regarding executive compensation matters. However, the Compensation Committee is ultimately responsible for its decisions and, in making its decisions or recommendations to the Board, considers information and considerations in addition to the recommendations provided by consultants.

During 2018, the Compensation Committee retained Meridian to review and provide oversight and advice related to executive compensation programs. Meridian is fully independent and provides no advice or services to the Company’s management.

The aggregate fees billed to the Company for consultation over the past two years are set out below.

  2018   2017
Meridian Compensation Partners
                 
Executive Compensation Related Fees   $ 115,833     $ 166,576  
All other fees            
TOTAL (in USD)   $ 115,833     $ 166,576  

  

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Compensation Framework

The compensation paid to each of our NEOs in 2018 primarily consisted of the three elements shown below. The Company believes that the mix of base salary, performance-based bonus, and participation in long-term incentive plans creates a balanced approach to executive compensation consistent with generally accepted compensation principles and good governance practices. The Compensation Committee annually reviews the relative emphasis of each of these elements to ensure the overall compensation structure remains consistent with the compensation principles. In addition, the Compensation Committee annually assesses the competitiveness of the Company’s compensation program relative to programs among selected peer companies. (see Peer Group Comparisons, page 78.)

  

   Compensation Type   Form   Period   How It Is Determined   Risk Management
FIXED   Provides market competitive level of fixed compensation.
Base salary
(page 66)
  Cash   One year   Based on market competitiveness among the Peer Group, individual performance, experience, scope of the role and internal equity.   Fixed pay, paid throughout the year and provides a certainty at a base level for fulfilling individual responsibilities.
AT-RISK   The STI encourages achievement of annual pre-established corporate and business unit objectives. STI is subject to clawback.
Short-term incentive
(STI)
(page 67)
  Cash   One year   Focuses on specific annual objectives.

Target award based on market competitiveness among the Peer Group and other factors.

Actual award based on corporate and business unit performance, and, if applicable, for some executives, individual goals.

  Provides a balanced focus on short-term performance based on a pre-determined set of performance metrics. Actual payout on metrics could be 0 – 200%.

Targets and results are approved by the Compensation Committee.

AT-RISK   LTI compensation provides incentive to achieve longer-term performance and opportunity to receive equity-based compensation aligned with shareholder interests. Payout is tied to both corporate performance and share-price performance. LTI is subject to clawback.
Long-term incentive
(LTI)
(page 68)
  Performance share units   Three-year term, with vesting at the end of three years   Focuses on longer-term objectives.

Target award based on market competitiveness of the LTI package among the Peer Group and other factors.

Actual payout based on our overall performance measured against pre-established performance targets.

  Performance is measured on previously established targets approved by the Compensation Committee.
Three-year vesting period maintains longer term focus for decision-making and management of business. Vesting and payout eligibility capped.

Actual payout could be 0 – 200.

     Stock options   Ten-year term, with one-third vesting annually over three years   Target award based on market competitiveness among the Peer Group and other factors.
The final realized value is based on the appreciation of the Company’s common share price.
  Provides a balanced incentive to take appropriate risks.
Three-year vesting and ten-year term maintain longer-term focus for decision-making and management of business.

  

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2018 Business Performance

Our executive compensation program is designed to link the pay of our NEOs to the performance achieved in the year and over a sustained period of time. In 2018, this performance resulted in short-term incentive corporate performance factors for NEOs ranging from •% (for our CEO) and •% (for executives on the STI plan) of target. The 2016 PSU awards relating to the 2016 to 2018 performance period vested at •% of target.

2018 Strategic Achievements

Our company delivered good financial and operational results in 2018, growing GTV, growing revenue and growing earnings. These results reflect the efforts of our global workforce, led by Mr. Saligram and our other executive officers, including our named executive officers. During 2018, many initiatives and corporate development actions were accomplished:

Accelerated online auction volume
Deployed full solution suite enabling company to penetrate upstream markets/customers
GovPlanet awarded non-rolling stock contract; now executing two weekly on-line auctions
Record-breaking 2018 Orlando auction; sold both onsite and online
Robust services businesses growth in 2018 (i.e., RB Financial Services)

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The Company’s management team has actively been executing the Company’s “Grow, Drive, Optimize” strategy. During 2018, many initiatives and corporate development actions were accomplished:

  

 
Grow:

Revenue &
Earnings
    
ü Accelerated Online channel mix and growth through strong IronPlanet weekly featured auction performance.
ü Launched Online auction capabilities in new countries internationally; asset lite entry to gain international penetration
ü Operationalized our new GovPlanet Non-Rolling Stock contract and conducted groundbreaking $10 million GTV live auctions in late 2018
ü Launched RB Asset Solutions – End to End capabilities for end users
ü Fully launched and started to successfully scale Marketplace-E; our premium listing service
ü Continued strength-on-strength growth of our Services businesses with RBFS growing     % and Mascus growing     %.
ü Continued to grow our CAT alliance and driving new volume in North America and Internationally
Drive:
Efficiencies & Effectiveness
    
ü Realigned our combined US sales team to better match regional market potentials
ü Achieved stated IronPlanet acquisition synergies; realized $20 million in run-rate IronPlanet acquisition synergies by the end of fiscal 2018
ü Disciplined expense management and focus on improving overall operating leverage
ü The inaugural combined company flagship Orlando auction drove record performance of USD $278 million
ü Significantly completed the IronPlanet integration program and created an integrated sales support function
ü Released Phase 1 of the new integrated auction platform known as MARS.
ü Consistently measured corporate performance against key scorecard and evergreen model targets; absent non-recurring and adjusting items, 2018 performance was impacted primarily due to macro-economic pressures and tight equipment supply, however, the Company still achieved many of its evergreen model targets
Optimize:
Balance Sheet
    
ü Cash flow: Company continues to generate cash provided by operating activities in excess of net income
ü Reduced overall debt levels with voluntary debt repayment while returning cash to shareholders via ongoing dividends
ü Controlled capital expenditures: delivered net capital spend at significantly less than 8.5% of revenues; which is our current Evergreen target max for Capital Spend as a percentage of Agency proceeds
ü Reduced our leverage ratio to 1.9x at the end of the Fourth Quarter of 2018

Full year business results in 2018 continued to be influenced by broad-based effects of unprecedented demand for infrastructure projects, high equipment utilization rates, and an overall equipment shortage principally in the United States and Canada. In 2018, the Company also continued the complex work of integrating the IronPlanet acquisition. Despite these headwinds, the Company delivered a number of key accomplishments and positioned itself for strong long-term growth.

2018 Key Accomplishments

Net income attributable to stockholders of $121.5 million increased 62% compared to $75.0 million in 2017. Diluted earnings per share (“EPS”) attributable to stockholders increased 61% to $1.11 versus $0.69 in 2017, while diluted adjusted EPS attributable to stockholders (non-GAAP measure) increased 33% to $1.08 from $0.81 in 2017. Other key highlights included:

GTV of $4.96 billion up 11% compared to $4.47 billion in 2017.

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Total revenues of $1.17 billion; increased 20% compared to $971.2 million in 2017.
Agency proceeds of $729.1 million increased