For fiscal 2021, the ratio of the annual total compensation of Mr. Armes, our Chief Executive Officer (“CEO Compensation”), to the median of the annual total compensation of all of our employees and those of our consolidated subsidiaries other than Mr. Armes (“Median Annual Compensation”) was 48.4 to 1. We refer to the employee who received the Median Annual Compensation as the “Median Employee.”
This ratio is a reasonable good faith estimate calculated in a manner consistent with SEC regulations using the data and assumptions summarized below. The assumptions we used are specific to our Company and our employee population. Because the SEC’s regulations for identifying the Median Employee, calculating annual total compensation, and determining the pay ratio allow companies to use different methodologies, exemptions, estimates, and assumptions, the Company’s pay ratio disclosure may not be comparable to that reported by other companies.
Additionally, our pay ratio is not an element that the Compensation Committee considers in setting CEO compensation, nor is CEO Compensation a material element that management considers in making compensation decisions for non-officer employees.
CEO Compensation for fiscal 2021 was $3,623,164, calculated using the total of all applicable compensation elements reported in the “Summary Compensation Table” above.
Median Annual Compensation for fiscal 2021 was $74,813. We calculated the Median Annual Compensation by totaling all applicable elements of compensation for our Median Employee in accordance with the same methodology used for our Named Executive Officers set forth in the “Summary Compensation Table.” We did not make any cost-of-living adjustments in identifying the Median Employee.
We identified our Median Employee as of March 31, 2021 (the “Determination Date”). We used the fiscal year ended March 31, 2021 as the compensation measurement period.
As of the Determination Date, we had approximately 2,300 employees. This number includes all full-time, part-time, seasonal and temporary employees of the Company and its subsidiaries. This number does not include any independent contractors or “leased” workers. For purposes of identifying the Median Employee this year, all employees who became part of the Company through the December 2020 acquisition of TRUaire (1,444 employees in total, including 110 in the U.S. and 1,334 in Vietnam) were excluded from the employee pool for this fiscal year, though such employees will be included in next year’s analysis. Additionally, using the “deminimis” exception, we excluded six employees from the pool, representing all of our employees in Mexico (1), Brazil (1), and Australia (4).
We used taxable wages as reflected in our payroll records and as reported to the Internal Revenue Service on Form W-2 to identify our Median Employee. W-2 taxable wages include, among other things, salary, wages, bonuses and stock compensation, if any.
A portion of our permanent employee workforce (full-time and part-time) worked for less than the full year because, among other things, they commenced employment after the beginning of the year or took an unpaid leave of absence. In determining our Median Employee, we annualized the total compensation for those individuals (but not for individuals in temporary or seasonal positions).