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Stockholders' Message

To our stockholders, customers and employees:

As a global company, we derive our strength not only from the steel used to manufacture our products, but also from our steadfast commitment to our core values and to delivering strong financial results.

Creating Stockholder Value
In order to create the most value for stockholders, we at Simpson Manufacturing Co., Inc., through our subsidiary Simpson Strong-Tie Company Inc., continue to follow our disciplined capital allocation strategy that balances capital expenditures and internal investments, acquisitions, dividends and share repurchases. This disciplined approach of returning cash to stockholders has enabled us to generate solid returns again in 2016. Since 2010, we have increased our quarterly dividend by 80%. In the last five years, we have repurchased more than $166 million in shares. We continue to support our capital allocation target of returning to our stockholders 50% of cash from operations through both dividends and repurchase of company shares of common stock.

In 2016, our sales were up 8%, our income from operations was up 16%, and our declared quarterly dividend totaled 70 cents per share for the year. Our successful financial performance was a direct result of our employees and their keen focus on innovation and customer service, as well as our ongoing efforts to expand our business strategically.

To further add value for our stockholders, we have made several changes to our executive compensation program based on company strategic goals and direct stockholder feedback. The revised program shifts our benchmarking pay practices to target the median, extends the performance period of our long-term equity awards, reduces the proportion of compensation delivered through our CPS program for Named Executive Officers, and establishes long-term performance metrics that align with our strategy.

We also made significant changes to our governance practices by eliminating the Shareholders Rights Plan ahead of the 2019 expiration date, decreasing our director term limit for new directors from 20 years to 15 years, proposed to declassify the staggered board, and adopting clawback, anti-hedging and anti-pledging policies.

Investing in Our Future
As we look ahead to 2017 and beyond, the dedicated employees of Simpson Strong-Tie will continue to focus on our key strengths of integrity, innovation, leadership and service to ensure that our customers, employees and stockholders receive value well into the future.

On a final note, we would like to congratulate Tom Fitzmyers on his fantastic career at Simpson Strong-Tie. Tom joined the company in 1978 and was instrumental in shaping and growing our business, including taking the company public in 1994. He also greatly influenced our company culture – what we fondly call our Secret Sauce. Our founder, Barclay Simpson, often credited Tom for much of the company’s success and was quick to point out his many contributions and his charismatic leadership. Tom served as president for a number of years and in 1994 became CEO. Since 2012, he served on the Board of Directors as Chairman and, most recently, as Vice Chairman. Thank you, Tom!

On behalf of everyone at Simpson Manufacturing Co., Inc., we thank you for your ongoing support.

Karen Colonias
President and
Chief Executive Officer

Peter N. Louras, Jr.
Non-Executive Chairman of the Board of Directors

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