UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to SectionPROXY STATEMENT PURSUANT TO SECTION 14(a) of theSecurities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934 (Amendment
(Amendment No. )
Filed by the Registrant | |
Filed by a Party other than the Registrant |
Check the appropriate box:
Preliminary Proxy Statement | |
Confidential, for Use of the Commission Only (as permitted by Rule | |
Definitive Proxy Statement | |
Definitive Additional Materials | |
Soliciting Material |
INGEVITY CORPORATION
(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 |
No fee required. | ||
Fee paid previously with preliminary materials. | ||
Fee computed on table | ||
March 12, 2018
To our
MESSAGE FROM OUR CEOJohn C. Fortson | March 11, 2024 |
Dear Ingevity Stockholders:
It is our pleasure to invite you to attend ourthe 2024 annual meeting of stockholders which is to(the “Annual Meeting”) of Ingevity Corporation (“Ingevity,” the “Company” or “us”). The Annual Meeting will be held virtually via live audio webcast on April 26, 2018 at The Daniel Island Club, 600 Island Park Drive, Charleston, South Carolina. The meeting will begin23, 2024, at 9:30 a.m., local time. The following Notice Eastern Time.
You can participate in the Annual Meeting, submit questions and vote your shares of the 2018 Annual Meeting of Stockholders outlinesCompany’s common stock (the “Common Stock”) by visiting www.virtualshareholdermeeting.com/NGVT2024. Further details regarding participation, voting and the business to be conducted at the meeting.Annual Meeting appear in the following notice of the Annual Meeting and this proxy statement.
2023 was a busy year as Ingevity accelerated the implementation of several key strategic initiatives that broaden our capabilities and diversify our product portfolio to meet the needs of global customers across all our businesses. In an environment that remained dynamic and challenging, our team doubled down on our commitment to being an innovative, forward thinking, best-in-class specialty chemicals business, and I am incredibly proud of their performance. We are excited about where we’re heading.
Our carbon and pavement businesses led the way in delivering record performance. Performance Materials delivered record revenue and segment EBITDA* and continued to see strong segment growth as global auto production recovered from diminished coronavirus pandemic era production levels over the course of the year. Advanced Polymer Technologies (“APT”), formerly known as our Engineered Polymers business, continued strong business development, expanding into growth markets such as apparel and agriculture. Our Performance Chemicals segment was a tale of two businesses in 2023 as we worked through the impacts of unprecedented crude tall oil price levels on our legacy Industrial Specialties business while Pavement Technologies, hereafter Road Technologies, continued its strong performance and had another record year.
We made significant investments in growth initiatives for our future. We fully integrated Ozark Materials into our newly formed Road Technologies business to broaden our impact in the pavement industry, opened a new APT Innovation Center in Warrington, United Kingdom to support technology development, and launched a repositioning plan for our Performance Chemicals segment to enable Ingevity to produce a more diverse portfolio of renewable raw material-based products and expand into oleochemical growth markets such as soy, palm and canola oils. Additionally, we advanced our strategic investment in Nexeon to identify more opportunities to support the electric battery industry using our carbon and our production and engineering capabilities.
Our world class team remains focused on continuous improvement to prioritize employee safety and strategic growth. In 2023 we launched a global Safety Pledge campaign, reaffirming each employee’s commitment to our collective responsibility to prioritize the well-being and care of every individual at Ingevity. We added international marketing and business strategy development expertise to our board of directors (the “Board”) by electing Bruce Hoechner to the Board, and also invested in talent to support our oleochemicals transition and battery technology initiatives.
We advanced our purpose to be a responsible company that purifies, protects, and enhances the world around us. Ingevity received a Silver rating from EcoVadis in 2023, placing us in the top quartile of all responding companies, and took steps to offset Scope 2 emissions related to our United States manufacturing locations by entering into a renewable product purchase agreement to advance the Company toward greenhouse gas reduction targets. In addition to growing our portfolio of renewably based products in 2023, we achieved key biodegradability and compostability certifications for our Capa® portfolio that further endorse the sustainable nature of our Company and our products.
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Thank you for your interest and investment in Ingevity. We hope you share our enthusiasm for Ingevity and the exciting opportunities ahead as we advance bold plans to better ourselves, our Company and our communities. We are utilizing Internet delivery asexcited about the future and confident in our primary meansability to be a best-in-class specialty chemicals company that is a leader in sustainability and our markets.
A notice of distributinginternet availability of proxy materials or proxy card is being mailed, and the attached proxy statement is being made available, beginning on March 11, 2024, to our stockholders this year. Accordingly, most stockholders will not receive paper copieseach holder of our proxy materials. We will instead send stockholders a notice with instructionsrecord of Common Stock as of the record date, February 26, 2024. Please see “Questions and Answers about the Annual Meeting, Proxy Solicitation and Voting Information” for accessing the proxy materials and voting via the Internet. The notice also providesadditional information onabout how to attend, vote, onlineexamine the list of stockholders and how to obtain paper copies of our proxy materials if you so choose.submit questions during the Annual Meeting.
Whether or not you plan to attend the Annual Meeting pleasevirtually, we urge you to vote as soon as possible to ensure thatand submit your shares will be represented and voted. You may vote via the Internet, by telephone or, if you elect to receive a paper proxy card in the mail, by mailing the completed proxy card. If you attendadvance of the Annual Meeting you may vote your sharesby one of the methods described in person even if you have previously voted by proxy.
Your vote is important.the proxy materials. Your vote will mean that you are represented at the Annual Meeting regardlesseven if you do not attend virtually. Thank you for your ongoing support of whether or not you attend in person.Ingevity.
We look forward to seeing you at the meeting.
Best regards,
D. Michael Wilson
John C. FortsonChief Executive Officer & President and CEO
* Reconciliation of these non-GAAP financial measures can be found in Appendix A.
INGEVITY | 2024 Proxy Statement | 2 |
NOTICEof 2024 Annual Meeting of Stockholders of Ingevity Corporation |
TIME: 9:30 a.m., Eastern Daylight Time, on Thursday, April 26, 2018PLACE: The Daniel Island Club, 600 Island Park Dr., Charleston, SCHow to vote:
You are invited to the Annual Meeting of Stockholders of Ingevity Corporation. We will hold the meeting at the time and place noted above. At the meeting, we will ask you to:
Online Before the Annual Meeting, vote online at www.proxyvote.com | ||
By phone Call 1-800-690-6903 | ||
By mobile device Scan the QR code on your proxy card or | ||
By mail If you received a printed version of the proxy materials, you may vote by mail | ||
During the virtual meeting See “Questions and Answers about the Annual Meeting, Proxy Solicitation, and Voting Information” for details on how to virtually attend and vote during the meeting |
Holders of record of Ingevity’s Common Stock as of the close of business on February 27, 2018 are entitled to receive notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof.
DATE MATERIALS FIRST MADE AVAILABLE: March 12, 2018
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Bebe Held on April 26, 2018: Our23, 2024. The Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 are available at http://ir.ingevity.com underwww.proxyvote.com.
DATE Tuesday, 9:30 a.m. | LIVE AUDIO WEBCAST www.virtualshareholder meeting.com/NGVT2024 To be admitted, enter the control number found on your proxy card or Notice regarding the availability of proxy materials | RECORD February 26, 2024 Holders of record of our Common Stock at the close of business on the Record Date are entitled to receive notice of, virtually attend, and vote at the Annual Meeting |
To allow our stockholders greater access to the Financial Information tab.meeting and lower the barriers to stockholder participation, our Annual Meeting will be held in a virtual format only with no physical meeting location.
INTERNET AVAILABILITY OF PROXY MATERIALS:
In accordance with U.S. Securities and Exchange Commission rules, we are usingItems of business
At the Internet as our primary means of furnishing proxy materials to stockholders. Consequently, mostAnnual Meeting, stockholders will be asked to act on the following items:
■ | Elect the nine (9) director nominees named in the proxy statement; | |
■ | Approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers; | |
■ | Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024; | |
■ | Approve the amendment to the Company’s Certificate of Incorporation to provide for the exculpation of certain officers from liability in limited circumstances; and | |
■ | Consider any other business properly brought before the meeting. |
Additional information
Whether or not receive paper copies of our proxy materials. We will instead send stockholders a Notice of Internet Availability of Proxy Materials with instructions for accessingyou plan to attend the Annual Meeting virtually, we urge you to review the proxy materials including our Proxy Statementcarefully and annual report, and for voting via the Internet. The Notice of Internet Availability of Proxy Materials also provides information on how stockholders may obtain paper copies of our Proxy Materials if they so choose. If you received a hard copy of our materials, and you wish to use electronic deliveryvote in the future, you may elect to receive future notices, proxy materials and annual reports electronically by following the instructions in this Proxy Statement.advance.
Only stockholders of record at the close of business on February 27, 2018 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.
Your vote is very important. After reading the Proxy Statement, please submit your proxy as soon as possible by the Internet, telephone, or mail. Submitting your proxy by one of these methods will ensure your representation at the Annual Meeting regardless of whether you attend the meeting in person.
By Order of the Board of Directors,
Katherine Pryor Burgeson
Secretary
INGEVITY CORPORATION
5255 VIRGINIA AVE
Stacy L. CozadN. CHARLESTON, SOUTH CAROLINA 29406Secretary
PROXY STATEMENTFOR THE 2018 ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON APRIL 26, 2018
TABLE OF CONTENTS:
INGEVITY | 2024 Proxy Statement | 4 |
Table of Contents
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Why did I receive these materials?
You received these materialsThis summary highlights information about Ingevity Corporation and certain information contained elsewhere in this proxy statement (the “Proxy Materials”Statement”) because you owned sharesfor our 2024 Annual Meeting of common stock (the “Common Stock”) of Ingevity Corporation, a Delaware corporation (“Ingevity,” the “Company,” “we,” “us,” and “our”), as of the close of
business on February 27, 2018 (the “Record Date”) and are therefore entitled to vote at Ingevity’s annual meeting of stockholders to be held on April 26, 2018Stockholders (the “Annual Meeting”). This summary does not contain all of the information that you should consider in deciding to vote. Please read the entire Proxy Statement carefully before voting.
Proposal | Board Vote Recommendation | Page |
Proposal 1: Election of Directors | FOR each nominee | 15 |
Proposal 2: Advisory vote on compensation of our Named Executive Officers (Say-on-Pay) | FOR | 38 |
Proposal 3: Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024 | FOR | 77 |
Proposal 4: Amendment to the Company’s Certificate of Incorporation to provide for the exculpation of certain officers from liability in limited circumstances | FOR | 80 |
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Advancing Environmental Stewardship
■ | Entered into a renewable product purchase agreement to produce renewable energy to offset Scope 2 emissions related to Ingevity’s United States manufacturing locations and advance the company toward greenhouse gas (“GHG”) reduction targets | |
■ | Capa® portfolio earned additional sustainability certifications including compostable certification from the Biodegradable Products Institute, the elite OK biodegradable WATER and SOIL certifications from TÜV Austria Bureau of Inspection and Certification and ISCC+ certification for the production of ‘mass-balance’ materials that increase the content of renewable raw materials in Capa products | |
■ | Completed lifecycle analysis that studied CTO from cradle to the completion of the distillation process of 21 of Ingevity’s CTO distillate products and concluded that, due to their temporary storage of biogenic carbon, the carbon negative properties of the CTO distillate products completely offset GHG emissions released with the energy and land use outputs associated with production and distillation, leaving negative carbon footprints for all 21 products at the factory gate |
Committed to Social Responsibility
■ | Ingevity and our employees donated over $1.6 million and 4,200 volunteer hours through our IngeviCares philanthropy program in 2023 in support of our sustainability goal to make a positive impact in the communities where we operate | |
■ | Honored as a leading employee benefits provider in 2023, receiving benefits industry awards in recognition of Ingevity’s robust programs and campaigns to inform employees about financial wellness and retirement benefits | |
■ | Celebrated recognition as one of 60 companies in North America honored with Talent Board’s Global Candidate Experience Award for excellence in talent acquisition practices | |
■ | Incorporated the concept of belonging into our diversity, equity, and inclusion program, now called “DEIB,” to promote and foster day-to-day experiences that enable our employees to feel safe and bring their full, authentic selves to work | |
■ | Advanced our DEIB priorities by adding iVet, a new veterans employee resource group (“ERG”), and expanding programming for existing ERGs |
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Why did I receive a Notice regarding the availabilityCorporate Governance
■ | Achieved the silver rating for sustainability by EcoVadis®, an independent organization that provides evidence-based sustainability assessments for companies within global supply chains, placing Ingevity in the top quartile of all responding companies | |
■ | Placed in the 91st percentile among our industry peers in the 2023 S&P Global Corporate Sustainability Assessment ranking | |
■ | Earned a first-time score from the Carbon Disclosure Project (commonly known as CDP), the global disclosure system for investors, companies, cities, states and regions that helps identify ways to manage environmental risks and opportunities and provide vital information back to Ingevity’s stakeholders | |
■ | Continued refreshment of our Board with the election of Bruce Hoechner | |
■ | Completed centralization of Ingevity’s sustainability data in the Dakota Scope 5 platform to enhance environmental performance data tracking and forecasting toward GHG goals |
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Name | Age | Director Since | Principal Occupation | Independent | Committee Memberships* | Other Public Company Boards | |||||||
JEAN S. BLACKWELL (CHAIR) | 69 | 2016 | Retired; Former Senior Executive at Cummins Inc. | – T&C – N&G – Executive (Chair) | 2 | ||||||||
LUIS FERNANDEZ-MORENO | 61 | 2016 | Sole Member and Manager, Strat and Praxis LLC; Former Senior Executive at Ashland Inc. | – N&G (Chair) – S&S – Executive | 1 | ||||||||
JOHN C. FORTSON | 56 | 2020 | President and CEO, Ingevity Corporation | ||||||||||
DIANE H. GULYAS | 67 | 2019 | Retired; Former President, DuPont Performance Polymers, E.I. du Pont de Nemours | – T&C (Chair) – N&G – Executive | 1 | ||||||||
BRUCE D. HOECHNER | 64 | 2023 | Retired; Former CEO, Rogers Corporation | – T&C – N&G | 1 | ||||||||
FREDERICK J. LYNCH | 59 | 2016 | Operating Partner, AEA Investors LP; Former President and CEO, Masonite International Corporation | – Audit – T&C | |||||||||
KAREN G. NARWOLD | 64 | 2019 | Retired; Former EVP, Chief Administrative Officer, General Counsel and Corporate Secretary, Albemarle Corporation | – Audit – S&S (Chair) – Executive | |||||||||
DANIEL F. SANSONE | 71 | 2016 | Retired; Former EVP, Strategy and CFO, Vulcan Materials Company | – Audit (Chair) – T&C – Executive | 1 | ||||||||
BENJAMIN G. (SHON) WRIGHT | 49 | 2022 | Vice President, Cummins & President, Cummins Engine Components | – Audit – S&S |
* | Audit – Audit Committee |
T&C – Talent and Compensation Committee | |
N&G – Nominating and Governance Committee | |
S&S – Sustainability and Safety Committee | |
Executive – Executive Committee |
62.2 years | 4 years | 3 new | 3/9 | 2/9 | 3/5 | 8/9 | ||||||
AVERAGE AGE | MEDIAN TENURE | DIRECTORS ADDEDSINCE 2022(1) | DIRECTORS AREWOMEN | DIRECTORSIDENTIFY AS RACIALLY OR ETHNICALLY DIVERSE | COMMITTEESAND BOARD CHAIRED BY WOMEN | DIRECTORS AREINDEPENDENT |
(1) | William J. Slocum will not stand for reelection at the Annual Meeting. |
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We recognize that strong corporate governance practices contribute to long-term stockholder value. We are committed to sound governance practices, including those described below.
Board Independence, Composition, and Accountability | ■ 8 of 9 directors are independent, including the Chair ■ Separate Chair and CEO ■ Five fully independent Board committees ■ Regular Board and committee executive sessions ■ Diverse Board in terms of gender, race, ethnicity, experience, and skills ■ Director overboarding policy ■ Directors shall not stand for re-election in the Board service year after they reach 72 years of age (unless waived by the Board on a case-by-case basis) | |
Best Practices | ■ Active stockholder engagement program ■ Annual Board and committee self-evaluations ■ Annual director evaluations ■ Board leadership role in CEO and executive succession planning ■ Robust risk management program that includes Board oversight of key risk areas, including cybersecurity ■ Board oversight of environmental and sustainability matters (primarily through the Sustainability and Safety Committee) ■ Annual Sustainability Report containing measurable sustainability goals ■ Comprehensive new director orientation ■ Policy prohibiting officers, directors, and employees from hedging and pledging our Common Stock ■ Policy to include candidates identifying as gender-diverse and racially/ethnically-diverse among the pool of potential new director candidates ■ Significant Board refreshment, with three new directors added since 2022(1) ■ Robust stock ownership guidelines applicable to executives and directors ■ Comprehensive Code of Conduct and Ethics and Compliance Program | |
Stockholder Rights | ■ Annual election of all directors ■ Majority voting with director resignation policy (plurality in contested elections) ■ Stockholder right to call special meetings ■ No poison pill or dual-class shares ■ One share, one vote standard ■ No supermajority voting requirements |
(1) | William J. Slocum will not stand for reelection at the Annual Meeting. |
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This year, most stockholders received a Notice Regarding the Availability of Proxy Materials (the “Notice”) instead of a full set of printed proxy materials. The Notice provides access to our Proxy Materials in a fast and efficient manner via the Internet. This reduces the amount of paper necessary to produce these materials, as well as costs associated with mailing these materials to stockholders. On or around March 12, 2018, we began mailing the Notice to our shareholders of record as of
February 27, 2018, and posted our Proxy Materials on the website referenced in the Notice (http://ir.ingevity.com). As more fully described in the Notice, stockholders may choose to access our Proxy Materials on the website or may request to receive a printed set of our Proxy Materials. The Notice and website provide information regarding how you may request to receive Proxy Materials in printed form by mail or electronically by email for this meeting and on an ongoing basis.
What is included in the Proxy Materials?
The Proxy MaterialsT&C Committee continues to implement and maintain practices in our compensation programs and related areas that reflect responsible corporate governance and compensation policies. These practices include the Noticefollowing:
What We Do | What We Don’t Do | |||
Use performance metrics to align pay with Companyfinancial performance | No repricing, backdating or discounting of stockoptions | |||
Balance short-term and long-term incentives throughfocused use of performance metrics | No hedging, pledging or short sales of Common Stockby any director, executive officer or other employee | |||
Emphasize stock ownership with long-term incentivesbeing paid in Common Stock and meaningful Common Stock ownership guidelines | No excise tax gross-ups for change of control payments | |||
Maintain a “clawback” policy for executive incentivecompensation in the event of a restatement of financial results regardless of fault | No excessive perquisites | |||
Use “double trigger” change of control (with respect toreplacement awards) for severance and equity vesting provisions | No tax gross-ups on perquisites other than inconnection with relocation benefits | |||
Engage an independent consultant to advise the T&CCommittee | ||||
Discourage excessive risk taking by offering a balanced compensation program that uses multiple incentivemetrics that balance focus on achievement of long-and short-term goals | ||||
Pay dividend equivalents only on stock unit awards thatvest, if any |
INGEVITY | 2024 Proxy Statement | 14 |
PROPOSAL 1 |
OUR BOARD RECOMMENDS A VOTE FOREACH NOMINEE. |
Our Nominating & Governance Committee has recommended, and the Board has nominated, nine incumbent directors for election at the Annual Meeting as identified below. William J. Slocum will not stand for reelection at the Annual Meeting. Effective as of the Annual Meeting, our proxy statement for the Annual Meeting (the “Proxy Statement”) and our 2017 annual report to stockholders (the “Annual Report”), which includes our Annual Report on
Form 10-K for the year ended December 31, 2017. These materials provide you with important information about the Company, the Annual Meeting and the proposals to be voted on at the Annual Meeting.
What is a proxy?
A proxy is your legal designation of another person to vote the stock you own assize of the Record Date in the manner you direct. The person you designate to vote your shares is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated Katherine P. Burgeson and Ryan C. Fisher to serve as proxies for the Annual Meeting. The proxies also may be voted at any adjournments or postponements of the meeting.
The Company's Board of Directors is soliciting proxies for use at the Annual Meeting. A proxy statement is a document we give you when we are soliciting your vote pursuant to Securities and Exchange Commission (“SEC”) regulations.
How do I vote?
Your voting method depends on whether you are a stockholder of record or a beneficial owner.
Stockholder of Record. If you are a stockholder of record, you may vote using one of the following methods:
The Notice provides instructions on how to access the Proxy Materials and how to vote via the Internet. For those stockholders who request to receive a paper proxy card in the
INGEVITY - 2018 Proxy Statement - 1
mail, instructions for voting via the Internet, by telephone or by mail are set forth on the paper proxy card. Please follow the directions on your proxy card carefully. Even if you plan to attend the Annual Meeting in person, we encourage you to vote your shares ahead of time.
Beneficial Owner. If you are a beneficial owner, you may vote by following the instructions on the voting instruction form or notice provided to you by the bank or broker that holds your shares.
May I revoke my proxy and change my vote?
If you are a stockholder of record, you may revoke your proxy and change your vote before the polls close at the Annual Meeting by doing one of the following:
If you are a beneficial owner, please check your voting instruction form or contact the bank or broker that holds your shares for instructions on how to revoke or change your voting instruction.
What is the difference between a stockholder of record and a beneficial owner?
If your shares are registered in your name on the books and records of our transfer agent, you are a “stockholder of record.” We therefore sent the Notice or Proxy Materials directly to you.
If your shares are held for you in the name of your broker or bank, your shares are held in “street name” and you are considered the “beneficial owner” of your shares and the broker or bank is considered to be the stockholder of record.
If you are a beneficial owner, the Notice or Proxy Materials have been forwarded to you by the broker or bank that holds your shares and, as the beneficial owner, you have the right to direct your broker or bank on how to vote your shares by using the voting instruction form provided to you by your broker or bank.
Who is entitled to vote at the Annual Meeting?
All Ingevity stockholders who owned Common Stock as of the close of business on the Record Date are entitled to vote at the Annual Meeting.
How many votes are entitled to be cast at the Annual Meeting?
Each Ingevity stockholder is entitled to one vote for each share of Common Stock owned as of the Record Date. There
were 42,214,055 shares of Common Stock outstanding on the Record Date. There is no cumulative voting.
When and where is the Annual Meeting, and who may attend?
The Annual Meeting will be held on April 26, 2018 at 9:30 a.m., Eastern Daylight Time, at The Daniel Island Club, 600 Island Park Dr., Charleston, South Carolina. The meeting
room will open at 9:00 a.m. and registration will begin at that time. Stockholders who are entitledreduced to vote, and our invited guests, may attend the Annual Meeting.
What do I need to bring to attend the Annual Meeting?
What you need in order to attend the Annual Meeting depends upon whether you are a stockholder of record or beneficial owner.nine.
Stockholders of Record. If you are a stockholder of record and plan to attend the Annual Meeting, please bring photo
identification. Stockholders of record will be admitted only upon verification of ownership at the admission counter. Once admitted to the Annual Meeting, stockholders of record may vote their shares in person by completing the ballot made available at the meeting.
2 - INGEVITY - 2018 Proxy Statement
Beneficial Owner. If you are a beneficial owner and plan to attend the Annual Meeting, you must present proof of your ownership of shares of Common Stock as of the Record Date, such as a bank or brokerage account statement, and photo
identification. If you wish to vote at the Annual Meeting, you must also bring a legal proxy provided by the bank or broker that holds your shares.
How many votes must be present to hold the Annual Meeting?
In order for us to conduct the Annual Meeting, a majority of the shares outstanding as of the Record Date, or 21,107,028 shares, must be present in person or by proxy. This is referred to as a quorum. If a share is represented for any matter at the Annual Meeting, it is deemed to be present for quorum purposes. Abstentions and shares held of record by
a bank or broker or its nominee (“Broker Shares”) that are voted on any matter are included in determining the number of shares present at the Annual Meeting. However, Broker Shares that are not voted on any matterEach director elected at the Annual Meeting will not be included in determining whether a quorum is present at such meeting.
What proposals will be voted on atserve until the Annual Meeting?
The following proposals will be voted on at the Annual Meeting, along with any other business properly presented at the meeting:
The Board recommends that you vote “FOR” both director nomineesbeing named in this Proxy Statement and “FOR” Proposals 2 and 3.
How many votes are needed to approve each proposal?
Proposal No. 1: To be electedserving as a director if elected. If any nominee is unable to stand for election for any reason, the Common Stock represented at our Annual Meeting by proxy may be voted for another candidate proposed by our Board, or our Board may choose to reduce its size.
The information below summarizes the particular experience, qualifications, attributes and skills of each nominee. The Nominating & Governance Committee and the Board believe that, as a group, these nominees provide our Board with a strong balance of experience, leadership, qualifications, attributes and skills, and that each individual nominee will needcan make a significant contribution to receive a majority of the votes cast, which means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against” the director nominee. Any director nominee who is not elected shall offer to tender his or her resignation to the Chairman of the Board and the Nominating and Governance Committee. Abstentions and broker non-votes will have no effect on the outcomeshould serve as a director of the election of directors.Company.
have the same effect as voting against this proposal because they are considered present and entitled to vote on this proposal. Broker non-votes will have no effect on the outcome of this proposal.
Proposal No. 3: An affirmative vote of the majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required for the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2018. Abstentions will have the same effect as voting against this proposal because they are considered present and entitled to vote on this proposal. Broker non-votes will have no effect on the outcome of this proposal.
What is discretionary voting by brokers and what is a broker non-vote?
If you are a beneficial owner and hold shares through an account with a bank or broker, your shares may be voted on certain matters even if you do not provide voting instructions. Brokerage firms have the discretionary authority under the New York Stock Exchange (“NYSE”) rules to vote shares for which their customers do not provide voting instructions on “routine” matters. The ratification of the appointment of
PricewaterhouseCoopers LLP is considered a routine matter. The election of directors and the advisory approval of the Say-on-Pay proposal are not considered routine. When a matter is not routine and the brokerage firm has not received voting instructions from the beneficial owner, the brokerage firm cannot vote the shares on that matter. This is called a broker non-vote.
INGEVITY - 2018 Proxy Statement - 3
What if I do not specify a choice for a matter when returning a proxy?
Proxies signed and returned by stockholders of record that do not contain voting instructions will be voted:
Will there be any other matters of business addressed at the Annual Meeting?
As of the date of this Proxy Statement, we are not aware of any other matter that will be properly brought before the Annual Meeting. If other matters are properly introduced, the
persons named in the proxy as the proxy holders will vote on such matters in their discretion.
Who bears the expenses of solicitation?
We will bear the cost of solicitation of proxies by the Board in connection with the Annual Meeting. We will reimburse brokers, fiduciaries and custodians for reasonable expenses incurred by them in forwarding Proxy Materials to beneficial owners of Common Stock held in their names. Proxies may be
solicited by mail, personally or by telephone, facsimile or other means of communication by our officers and other employees. These people will receive no additional compensation for these services, but will be reimbursed for any expenses incurred by them in connection with these services.
What is Ingevity’s principal executive office address?
The address of Ingevity’s principal executive offices is:5255 Virginia Ave, N. Charleston, South Carolina 29406.
What is “householding” and how does it affect me?
Householding refers to a procedure allowed by the SEC to reduce the number of copies of the notice or proxy materials mailed to one address, unless their broker, bank or other nominee has received contrary instructions from any beneficial holder at that address. Under this procedure, we will deliver one Notice or one set of printed Proxy Materials to stockholders of record residing at the same address, unless we receive instructions from such stockholders to the contrary. If you reside at the same address as other stockholders of record and would like to receive a separate Notice or set of Proxy Materials, please contact us at
1-844-643-8489 (1-84-INGEVITY) or at Ingevity Corporation, 5255 Virginia Ave, N. Charleston, SC 29406, Attn: Katherine P. Burgeson, Secretary, and we will promptly deliver a separate set to you. If you and other stockholders of record residing at the same address received multiple Notices or sets of the Proxy Materials and would like to receive a single Notice or set in the future, please contact us as described above. Beneficial owners with questions about combined mailings should contact the bank or broker holding their shares.
4 - INGEVITY - 2018 Proxy Statement
Ingevity’s Board currently consists of seven members divided into three classes. Our governing documents provide for a gradual phase-out of the classification of our board, which will be complete as of the 2019 annual meeting of Stockholders (the “2019 Annual Meeting”).
Classes I and III are collectively composed of five directors whose current terms expire at the 2019 Annual Meeting. Class II is composed of the two directors who have been nominated for election at this Annual Meeting, for a one year term expiring at the 2019 Annual Meeting. Therefore, beginning with the 2019 Annual Meeting, all of our directors will stand for election each year for annual terms, and our board will no longer be divided into three classes.
At any meeting of stockholders for the election of directors at which a quorum is present, the election will be determined by a majority of the votes cast by the stockholders entitled to vote in the election, except that in the case of a contested election, the election will be determined by a plurality of the votes cast by the stockholders entitled to vote in the election.
The Board has nominated J. Michael Fitzpatrickelection of directors is not contested at this Annual Meeting. Abstentions and Frederick J. Lynch for election as Class II directors. Bothbroker non-votes will have no effect on the outcome of the nominees are current memberselection of the Board.directors.
The Nominating and Governance Committee (the “Governance Committee”) recommended both Mr. Lynch and Mr. Fitzpatrick for nomination. Based on this recommendation and each nominee’s credentials and experience outlined below, the Board has determined that each such nominee can make a significant contribution to the Board and should serve as a director of the Company.
Any director who is not elected shall offer to tender his or her resignation to the Chairman
THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT. |
INGEVITY | 2024 Proxy Statement | 15 |
JEAN S. BLACKWELL | ||||
BOARD COMMITTEES ■ T&C ■ Nominating & Governance ■ Executive (Chair) | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Johnson Controls International plc (since 2018) ■ Celanese Corporation (since 2014) | |||
Age: 69 Director since: Independent chair | SKILLS AND EXPERIENCE Ms. Blackwell has substantial experience in the areas of finance and law, and also as to matters of corporate responsibility, sustainability and human resources, having served both as a public company Chief Financial Officer and General Counsel, among other corporate leadership roles. She also has significant oversight and governance expertise as an experienced public company board member, having served in a number of committee chair roles. From 2016 until she took over as Board chair in 2021, Ms. Blackwell served as the chair of our Audit Committee. ADDITIONAL INFORMATION Ms. Blackwell has served as a director on numerous non-profit boards. Ms. Blackwell holds a bachelor’s degree in economics from The College of William and Mary and a juris doctor degree from the University of Michigan. | PROFESSIONAL HIGHLIGHTS Chief Executive Officer of Cummins Foundation and Executive Vice President of Corporate Responsibility for Cummins Inc. (“Cummins”) from 2008 until her retirement in 2013. Previous positions with Cummins (joined in 1997) included Chief Financial Officer; Vice President, business services; Vice President, human resources; and General Counsel. Earlier experience includes Budget Director for the State of Indiana; Executive Director of the Indiana State Lottery Commission, and Partner at the law firm of Bose McKinney & Evans, LLC. PRIOR PUBLIC COMPANY DIRECTORSHIPS ■ Essendant Inc. (formerly, United Stationers Inc.) (former public company) (2007-2018) ■ The Nassau Companies of New York (formerly Phoenix Companies, Inc.) (former public company) (2004-2009) |
INGEVITY | 2024 Proxy Statement | 16 |
LUIS FERNANDEZ-MORENO | ||||
BOARD COMMITTEES ■ Nominating & Governance (Chair) ■ Sustainability & Safety ■ Executive | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Select Energy Services, Inc. (since 2022) | |||
Age: 61 Director since:2016 | SKILLS AND EXPERIENCE Mr. Fernandez-Moreno has over thirty years of executive and operational experience in the performance materials, specialty chemicals and coatings industries. He has significant mergers and acquisitions (“M&A”) and international business experience, having held leadership roles in complex global business operations in the United States, Mexico, Brazil, France and the United Kingdom. Mr. Fernandez also has extensive expertise in the area of sustainability with a focus on integrating responsible environmental, social and governance principles and metrics into global business strategies to maximize stakeholder value. ADDITIONAL INFORMATION Mr. Fernandez-Moreno has served as a member of several private and non-profit company boards including Hasa, Inc., a portfolio company of Wind Point Partners (commencing in 2023); Huber Engineered Materials, a portfolio company of J.M. Huber Corporation, since 2019; Ascensus Specialties International Company, a portfolio company of Wind Point Partners (2017-2021); and OQ Chemicals GmbH (formerly Oxea S.a.r.l.), a subsidiary of OQ, an integrated energy company, owned by the Oman government, from 2018 to 2023. Mr. Fernandez-Moreno holds a bachelor’s degree in chemical engineering from Universidad Iberoamericana in Mexico City, Mexico, and is a graduate of the Wharton Management Certificate Program at the University of Pennsylvania. | PROFESSIONAL HIGHLIGHTS Sole Manager and Member of Strat and Praxis LLC, a consulting services company, since June 2018. Executive Advisor, Wind Point Partners (since December 2023). Senior Vice President of Ashland Inc. (“Ashland”) (2012-2017), including serving as President of its Chemicals Group (2015-2017); President, Ashland specialty ingredients (2013-2015); and President, Ashland water technologies (2012-2013). Previous experience included 27 years at Rohm & Haas Company and, after its acquisition, with The Dow Chemical Company. He also served as Executive Vice President at Arch Chemicals until its acquisition by Lonza Group AG (2010-2011). |
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JOHN C. FORTSON | ||||
SKILLS AND EXPERIENCE Mr. Fortson has served as our President and Chief Executive Officer since September 2020. From 2015 to April 2021, he served as the Company’s Chief Financial Officer, and from 2015 to February 2021, he served as the Company’s Treasurer. Mr. Fortson has more than 23 years of experience in executive, management, strategic planning, financial, M&A and sustainability matters and has held leadership positions in the chemicals, manufacturing, global aerospace and defense industries. ADDITIONAL INFORMATION Mr. Fortson has served as a member of private and non-profit company boards, including as a member of the board of the American Chemistry Council (2021-present), and as a member of the Medical University of South Carolina Heart and Vascular Advisory Board (2017-present). Mr. Fortson has a bachelor’s degree from the United States Military Academy at West Point and a master’s degree in business administration from Duke University’s Fuqua School of Business. | PROFESSIONAL HIGHLIGHTS President and Chief Executive Officer of Ingevity since September 2020. Served as Chief Financial Officer and Treasurer of Ingevity from 2015-2021. Vice President, Chief Financial Officer, and Treasurer, AAR Corporation (2013–October 2015). Managing Director, Bank of America Merrill Lynch (2007–2013). | |||
Age: 56 Director since: |
DIANE H. GULYAS | ||||
BOARD COMMITTEES ■ T&C (Chair) ■ Nominating & Governance ■ Executive | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Expeditors International of Washington, Inc. (since 2015) | |||
Age: 67 Director since: 2019 | SKILLS AND EXPERIENCE Ms. Gulyas’ qualifications to serve as a director include her extensive executive experience at one of the world’s largest chemical companies, as well as her extensive experience in international operations, sustainability, global manufacturing and sales, including in the automotive parts industry. Ms. Gulyas also has significant oversight and governance expertise as an experienced public company board member. ADDITIONAL INFORMATION Ms. Gulyas has served on the boards of several non-profit and private companies, including as chair of the board of directors of the Ladies Professional Golfing Association (2016-2022). Ms. Gulyas has a bachelor’s degree in chemical engineering from the University of Notre Dame. | PROFESSIONAL HIGHLIGHTS President, Performance Polymers business of E.I. du Pont de Nemours (“du Pont”) from 2009 until her retirement in 2014. Previous positions in her thirty-five year du Pont career include Global Chief Marketing and Sales Officer (2004-2006); Group Vice President of the electronic and communication technologies platform (2002-2004); and Vice President and General Manager of the advanced fiber business (1997-2001). PRIOR PUBLIC COMPANY DIRECTORSHIPS ■ W.R. Grace & Co. (former public company) (2015-2021) ■ Mallinckrodt Pharmaceuticals (2013-2018) ■ Navistar International Corporation (2009-2012) ■ Viasystems (former public company) (2003-2009) |
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BRUCE D. HOECHNER | ||||
BOARD COMMITTEES ■ T&C ■ Nominating & Governance | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ Curtiss Wright Corp. (since 2017) | |||
Age: 64 Director since: 2023 | SKILLS AND EXPERIENCE Mr. Hoechner has experience leading a publicly traded, global manufacturing company and has significant expertise in international marketing and business strategy development. Mr. Hoechner has significant oversight and governance expertise as an experienced public company board member, having served on governance and finance committees. ADDITIONAL INFORMATION Mr. Hoechner has served on non-profit boards. He holds a Bachelor of Science degree in chemical engineering from Pennsylvania State University and is a graduate of the Wharton Management Certificate Program at the University of Pennsylvania. | PROFESSIONAL HIGHLIGHTS President & CEO of Rogers Corporation from 2011 until his retirement in 2022. Director of Rogers Corporation from 2017 until 2023. Various positions of increasing responsibility with Rohm and Haas Company for whom he worked for 28 years and with The Dow Chemical Company (after its acquisition of Rohm and Haas), including over ten years spent living and working in Asia, culminating as President, Asia Pacific Region, Dow Advanced Materials Division (2009-2011). |
FREDERICK J. LYNCH | ||||
BOARD COMMITTEES ■ T&C ■ Audit | ||||
Age: 59 Director since: 2016 | SKILLS AND EXPERIENCE Mr. Lynch served as President and Chief Executive Officer of a public, global manufacturing company for twelve years until his retirement in 2019, also having served as a director for that organization. He also brings substantial prior executive experience in the chemicals industry, and in-depth knowledge of global business, manufacturing, supply chain management, sustainability and strategic planning. He is an “audit committee financial expert” under SEC rules. ADDITIONAL INFORMATION Mr. Lynch has served on the board of several non-profit and private companies. Mr. Lynch has a bachelor’s degree in chemical engineering from Villanova University and a master’s degree in business administration from Temple University. | PROFESSIONAL HIGHLIGHTS Operating Partner, AEA Investors, LP, a global private investment firm (since 2020); Board Chair, Verdesian Life Sciences (since 2023); Director of TileBar (since 2023), Ascential Technologies (since 2022), Traeger Grills (2020-2021), and Process Sensing Technologies (since 2020) (portfolio companies of AEA Investors, LP). President and CEO of Masonite International Corporation, a global manufacturer of doors and door systems from 2006 until his retirement in 2019. Previous experience includes President of human generics division and Senior Vice President of global supply chain for Alpharma, Inc. (2003-2006), and eighteen years at Honeywell International, including Vice President and General Manager of its specialty chemicals business. PRIOR PUBLIC COMPANY DIRECTORSHIPS ■ Masonite International Corporation (2009-2019) |
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KAREN G. NARWOLD | ||||
BOARD COMMITTEES ■ Audit ■ Sustainability & Safety (Chair) ■ Executive | ||||
Age: 64 Director since: 2019 | SKILLS AND EXPERIENCE Ms. Narwold has over thirty years of executive, management, legal and compliance experience in chemicals and manufacturing, including as Chief Administrative Officer and General Counsel of several public companies. Her areas of expertise include law, corporate governance, compliance, executive compensation, risk oversight, strategic planning, M&A and cybersecurity. Ms. Narwold also has expertise in the area of sustainability with a focus on leveraging best-in-class benchmarking to drive corporate accountability and reporting. ADDITIONAL INFORMATION Ms. Narwold has bachelor’s degree in political science from the University of Connecticut and a juris doctor degree from the University of Connecticut School of Law. | PROFESSIONAL HIGHLIGHTS Executive Vice President, Chief Administrative Officer, General Counsel, and Corporate Secretary of Albemarle Corporation (“Albemarle”), a global specialty chemicals company, from 2010 until her retirement in 2023, including leadership of the legal, public affairs (government and regulatory affairs and communications) and compliance organizations. She was also a member of Albemarle’s Enterprise Risk Management and Disclosure Committees. Previously held various leadership roles at Symmetry Holdings (2007-2010) and Barzel Industries (2008-2009), including for both as General Counsel, and at GrafTech International (1990-2006), a global graphite and carbon manufacturer and former subsidiary of Union Carbide, including serving as Vice President, human resources, General Counsel and Secretary. |
DANIEL F. SANSONE | ||||
BOARD COMMITTEES ■ Audit (Chair) ■ T&C ■ Executive | OTHER PUBLIC COMPANY DIRECTORSHIPS ■ AdvanSix Inc. (since 2016) | |||
Age: 71 Director since: 2016 | SKILLS AND EXPERIENCE Mr. Sansone has extensive executive and general management experience and substantial financial expertise, including service as Chief Financial Officer and Treasurer at a global manufacturing public company and is an “audit committee financial expert” under SEC rules. Given his level of financial expertise, Mr. Sansone is well qualified to chair the Company’s Audit Committee. He also brings expertise in the asphalt and paving markets. ADDITIONAL INFORMATION Mr. Sansone has a bachelor’s degree in finance from John Carroll University and a master’s degree in business administration from the Illinois Institute of Technology. | PROFESSIONAL HIGHLIGHTS Executive Vice President and Chief Financial Officer at Vulcan Materials Company (“Vulcan”), an S&P 500 company and the largest U.S. producer of aggregate-based construction materials, including asphalt, from 2005 until his retirement in 2014. Other roles at Vulcan included President, southern and gulf coast division; President, Gulf Coast Materials; EVP, Strategy; Treasurer; and Corporate Controller. Before joining Vulcan, Mr. Sansone held positions domestically and internationally at Monroe Auto Equipment (now Tenneco Inc.), FMC Corporation (1978-1986), and Kraft Inc. (1976-1978). |
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BENJAMIN G. (SHON) WRIGHT | ||||
BOARD COMMITTEES ■ Audit ■ Sustainability & Safety | ||||
Age: 49 Director since: 2022 | SKILLS AND EXPERIENCE Mr. Wright is an executive with extensive international manufacturing experience with industrial and chemical companies. As President of Cummins Engine Components, he is responsible for approximately 7,000 employees and 14 manufacturing locations. Mr. Wright also holds a certification in cybersecurity oversight from Carnegie Mellon University’s Software Engineering Institute. ADDITIONAL INFORMATION Mr. Wright has served on non-profit and private company boards, including as a member of the Board of Trustees at The Children’s Museum of Indianapolis (from 2019-2021). He holds a Bachelor of Science degree in chemical engineering from the University of South Carolina, and a Master of Business Administration degree from Harvard Business School. | PROFESSIONAL HIGHLIGHTS Vice President, Cummins Incorporated & President, Cummins Engine Components; various positions of increasing responsibility over a 19-year career at Cummins. Chemical Engineer, British Petroleum (1997-2002) |
INGEVITY | 2024 Proxy Statement | 21 |
The Company’s Board consists of a diverse group of respected leaders who possess the Governance Committee.requisite skills, experience and character to effectively oversee Ingevity’s evolving needs and strategy. The Governance Committee will promptly considerfollowing chart summarizes the resignation offer and make a recommendation tocore competencies that the Board considers valuable for effective governance and oversight and illustrates how the current Board members individually and collectively represent these key competencies.
Skill/Experience | Blackwell | Fernandez- Moreno | Fortson | Gulyas | Hoechner | Lynch | Narwold | Sansone | Wright | |
Industry or Market Experience | ||||||||||
C-Suite Experience | ||||||||||
Other Public Company Board Experience | ||||||||||
International Manufacturing Experience (P&L) | ||||||||||
Executive Compensation/Human Capital Management | ||||||||||
SEC Financial Expert* | ||||||||||
Enhances Diversity | ||||||||||
Substantial M&A/Joint Venture Experience | ||||||||||
Compliance/Legal Experience | ||||||||||
Environmental, Safety & Sustainability Experience | ||||||||||
Cybersecurity Experience | ||||||||||
Risk Management |
* | While each of Ms. Blackwell, Mr. Fortson, and Mr. Hoechner meet the qualifications of an audit committee financial expert under the SEC rules, none of them presently serve on the Audit Committee or are formally designated as an audit committee financial expert for the Company. |
In addition, many of our directors have experience as members of non-profit, academic and philanthropic institutions, which adds additional perspective to whether to accept or reject the tendered resignationtheir roles at Ingevity.
INGEVITY | 2024 Proxy Statement | 22 |
The information below provides biographical information about each continuing director and each nominee for director, including information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that factored into the Board’s determination that the person should serve as a director of the Company. Each of the preceding seven persons has served as a director of Ingevity since the Company became public on May 15, 2016.
The Board recommends a vote “FOR” each of J. Michael Fitzpatrick and Frederick J. Lynch to the Board, each to serve for a one-year term or until his successor is duly elected and qualified.
Current Director Nominees
J. Michael Fitzpatrick (age 71). Dr. Fitzpatrick is a member
The Board is responsible for overseeing and providing guidance on the Company’s strategy, business and performance, and protecting stockholder interests and value. In addition, the Board is responsible for appointing, overseeing and evaluating the executive officers who manage the Company’s day-to-day operations. The Board oversees management’s activities to ensure that the Company’s assets are properly safeguarded; that the Company a manufacturer of spices, herbsmaintains appropriate financial and flavorings,other internal controls; and serves on its Audit Committee. Dr. Fitzpatrick has served as a McCormick director since November 2001. He also has served as Chairmanthat the Company complies with responsible corporate governance practices, and applicable laws, regulations and ethical standards. One of the Board’s most important functions is oversight of risk management, including cybersecurity. This is discussed further below under the section titled “Board’s role in risk oversight.”
The Board actively oversees the development and execution of Directors of Aurora Plastics, Inc., a privately held company, since August 2016. Dr. Fitzpatrick previously served as a director of NOVOLEX, a privately held company, from 2013our strategies, including those related to 2016. Dr. Fitzpatrick has been an Executive Advisor Partner at Wind Point Partners since March 2005,business, operations and was Chairman and Chief Executive Officer of Citadel Plastics Holdings, Inc., a plastics manufacturer, from March 2007 to 2012. Previously, Dr. Fitzpatrick spent thirty years with Rohm & Haas Company, serving most recently as President and COO. Dr. Fitzpatrick served on the Board of Directors of Carpenter Technology Corporation, and on the Board of Directors of SPX Corporation. Dr. Fitzpatrick serves on various non-profit boards. Dr. Fitzpatrick’s qualifications to serve as director include senior executive experience at a publicly traded multinational company, general management experience in international operations, a high level of financial literacy, and extensive experience in mergers and acquisitions.
Frederick J. Lynch (age 53). Mr. Lynch has served as President of Masonite International Corporation, a global manufacturer of interior doors and entry door systems, since July 2006 and Chief Executive Officer since May 2007. He has served on the Masonite International Corporation Board of Directors since June 2009. Masonite filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on March 16, 2009 and emerged from reorganization proceedings on June 9, 2009. Mr. Lynch joined Masonite from Alpharma Inc., where he served as President of the human generics division and Senior Vice President of global supply chain. Prior to joining Alpharma, Mr. Lynch spent nearly 18 years at Honeywell International Inc., most recently as Vice President and General Manager of its specialty chemical business. Mr. Lynch serves on various non-profit boards. Mr. Lynch’s qualifications to serve as a director include his extensive global operating experience in midsize to Fortune 100 multinational manufacturing corporations, which has provided him with a deep knowledge of international business and strategic planning,finance, as well as his role as President, CEOstrategies focused on legal and board member at Masonite.regulatory matters, corporate responsibility and sustainability, stockholder engagement, innovation and protection of intellectual property, cybersecurity, talent development and executive succession.
INGEVITY - 2018 Proxy Statement - 5
Continuing Directors with Terms Expiring in 2019
Jean S. Blackwell (age 63). Ms. Blackwell has served as a member ofIn carrying out its responsibilities, the Board of Directors, a member of the Human Resources Committee,has created and the Chair of the Nominating and Governance Committee of Celanese Corporation, a global technology and specialty materials company, since March 2014. She has also served as a member of the Board of Directors of Essendant Inc. (formerly United Stationers Inc.), a leading national wholesale distributor of business products, since May 2007. She is currently a member of the Audit Committee and Governance Committee at Essendant, having previously served as Chair of the Governance Committee. She has also served as a member of the Board of Directors and Chair of the Audit Committee of Phoenix Companies, Inc., a life insurance company. Ms. Blackwell served as CEO of Cummins Foundation and Executive Vice President of Corporate Responsibility of Cummins Inc. from March 2008 until her retirement in March 2013. At Cummins she previously served as Executive Vice President and CFO, Vice President, Cummins Business Services, Vice President, Human Resources, and Vice President and General Counsel. Priordelegated responsibilities to joining Cummins, Ms. Blackwell served as the Budget Director for the State of Indiana, and as the Executive Director of the Indiana State Lottery Commission. Ms. Blackwell was previously a partner at Bose McKinney & Evans LLP, where she practiced in the area of financial and real estate transactions. Ms. Blackwell serves on various non-profit boards. Ms. Blackwell’s qualifications to serve as director include her in-depth knowledge of the business operations of a publicly traded company and a strong financial acumen from her senior management experience with various companies, including prior directorships at several public companies. She has a thorough understanding of public company financial reporting and is well versed in internal controls.five fully independent committees:
Luis Fernandez-Moreno (age 55). Mr. Fernandez-Moreno has been a member of the board of directors of VSI Intermediate Holdings LLC, a portfolio company of WindPoint Partners, since December 2017. Mr. Fernandez-Moreno served as Senior Vice President of Ashland Inc., a specialty chemical company, from October 2013 and President of its Chemicals Group from April 2015 through February 2017. He previously served as President of Ashland Specialty Ingredients from October 2013 until April 2015. From November 2012 to October 2013, he was President of Ashland Water Technologies. Mr. Fernandez-Moreno served as Executive Vice President of HTH Water Products & Wood Protection for Arch Chemicals, Inc., from September 2010 until October 2011. Prior to joining Arch Chemicals, Mr. Fernandez-Moreno spent approximately 25 years at Rohm & Haas Company until it was acquired by Dow Chemical Company, after which he managed the newly-formed Dow Coatings Materials business until August 2010. Mr. Fernandez-Moreno’s qualifications to serve as director include his extensive experience in the chemicals industry, specifically his service as an executive officer of Ashland Inc., as well as his background in the development and implementation of merger and acquisitions plans, including successful acquisitions, joint ventures, and divestitures.
■ | The Audit Committee; | |
■ | The Talent and Compensation Committee (the “T&C Committee”); | |
■ | The Nominating and Governance Committee; | |
■ | The Sustainability and Safety Committee; and | |
■ | The Executive Committee. |
Daniel F. Sansone (age 65). Mr. Sansone has served as a member of the Board of Directors, a member of the Audit Committee, and Chairperson of the Compensation Committee of AdvanSix Inc. since September 2016. He also served as Executive Vice President of Strategy at Vulcan Materials Company from January 2014 to December 2014. Vulcan, an S&P 500 company, is the largest U.S. producer of construction aggregates and a major producer of ready-mixed concrete, asphalt mix. At Vulcan he served as Executive Vice President and CFO from February 2010 to January 2014. Mr. Sansone had previously served at Vulcan as Senior Vice President and CFO. He previously was President of Vulcan’s Southern and Gulf Coast Division. Mr. Sansone serves on various non-profit boards. Mr. Sansone’s qualifications to serve as a director include his 40 years of general management and financial experience both as an executive officer and board member of public companies and by reason of his background in the asphalt business from his career with Vulcan.
Richard B. Kelson (age 71). Mr. Kelson is currently the Chairman of our Board. He is also the Chairman, President, and CEO of ServCo LLC, serving in that capacity since July 2009. Mr. Kelson also served as Alcoa Inc.’s Executive Vice President and CFO for nearly a decade, retiring in 2006 as Chairman’s Counsel. Prior to that, he was Alcoa, Inc.’s Executive Vice President — Environment, Health and Safety and General Counsel, and a member of the Executive Counsel, the senior leadership group that provides strategic direction for the company. He also served as an Operating Advisor with Pegasus Capital Advisors, L.P., a private equity fund manager. Mr. Kelson served as a member of the Board of Directors of MeadWestvaco Corporation, and its predecessor, Westvaco Corporation, from 2001 to 2015, and has served as a member of the Board of Directors of PNC Financial Services Group, Inc. since 2002, Anadigics, Inc. from February 2015 to March 2016, and Commercial Metals Company since 2010, where he is lead director and a member of the Audit Committee. Mr. Kelson has served as a director of Evocative Design LLC, a privately held company, since 2011, and has also served as a director of Shale-Inland Holdings, LLC (d/b/a FloWorks International, LLC), a privately held company, from 2012 until September 2017. He served as a Director of Lighting Science Group Corporation. Mr. Kelson has also served on various non-profit boards. Mr. Kelson’s qualifications to serve as a director include substantial experience in the areas of finance and safety and environment, which he gained during his service as an executive officer of a major publicly traded global company. Mr. Kelson also brings to the board legal expertise, having served as general counsel for Alcoa, Inc. In addition, Mr. Kelson brings additional public company board experience and leadership to our Board.
D. Michael Wilson (age 55). Mr. Wilson serves as President and Chief Executive Officer of Ingevity. Mr. Wilson came to Ingevity from Albemarle Corporation, where he served as Executive Vice President of Albemarle and President of Albemarle’s Performance Chemicals business in 2015. Mr. Wilson served as President of Albemarle’s Catalyst
6 - INGEVITY - 2018 Proxy Statement
Solutions business from September 2013 through 2014 and previously held a variety of business unit leadership roles at FMC Corporation over the course of more than fifteen years, including group head of Industrial Chemicals from 2003 to 2010, and President of the Specialty Chemicals group from 2011 to 2013. Prior to FMC Corporation, Mr. Wilson served various roles at Wausau Papers and Rexam. He holds a Bachelor of Science degree in chemistry from the University of North Carolina and a Master of Business Administration
from the Kenan-Flagler Business School at the University of North Carolina. Mr. Wilson’s qualifications to serve as director include his significant industry experience, having worked in the chemicals industry for more than twenty years. Furthermore, through his prior service as an executive officer for various companies, he has a track record of achieving growth through strategic positioning and mergers and acquisitions.
INGEVITY - 2018 Proxy Statement - 7
Corporate Governance Guidelines
Our Company is managedEach committee’s responsibilities are described under the direction“Committees of our Board which has adopted a set of Directors.”
The Board is committed to sound corporate governance policies and practices that are designed to enable Ingevity to operate responsibly and with integrity, to compete effectively, to sustain its business and to build long-term stockholder value. Our Board-approved Corporate Governance Guidelines (the “Governance Guidelines”“Guidelines”) to set forth certain corporate governance practices. The Governance Committee is responsible for reviewing periodically the Governance
Guidelines and making recommendations on governance issues that should be addressed by the Board. The Governance Guidelines are available on our website at http:https://ir.ingevity.com/governance/documents.corporate-governance/corporate-governance-documents.
The Guidelines form a transparent framework for the effective governance of Ingevity, addressing matters such as the respective roles and responsibilities of the Board and management, the Board’s leadership structure, director independence and Board and committee membership criteria. The Guidelines are reviewed at least annually by the Nominating & Governance Committee in light of changing regulations, evolving best practices and other governance developments.
INGEVITY | 2024 Proxy Statement | 23 |
Director Independence
Our Board annually conducts an assessmentregularly reviews its leadership structure, how the structure is functioning, and whether the structure continues to be in the best interest of our stockholders. The Company’s current Board leadership structure consists of the following:
INDEPENDENT CHAIR | JEAN S. BLACKWELL | |
Main Responsibilities: ■ Presides over Board and stockholder meetings ■ Provides advice and counsel to CEO ■ Acts as liaison between independent directors and CEO ■ Provides input to the T&C and Nominating & Governance Committees regarding the annual CEO performance evaluation, Board evaluation, and succession planning ■ Chairs the Executive Committee | ||
PRESIDENT & CEO | JOHN C. FORTSON | |
Main Responsibilities: ■ Manages Ingevity’s day-to-day business and operations ■ Manages and develops Ingevity’s executive leadership team ■ Ensures proper execution of Ingevity’s corporate strategy | ||
Our Guidelines do not contain a firm policy regarding separation of the offices of CEO and Chair. Instead, the Guidelines give the Board flexibility to make the determination that is in the best interests of the stockholders based on applicable circumstances at the time of the decision. Except in connection with a leadership transition in 2020, the Company has always separated the roles of Chair and CEO. The Board believes that separating the positions of CEO and Chair allows for clear delineation of the role of the Chair and minimizes duplication of effort between the CEO and the Chair. The separation of roles also allows the CEO to focus on executing Ingevity’s strategic plan and managing its operations and performance, and facilitates effective oversight by the Chair and improved communications and relations between the Board, the CEO, and other senior leaders of the Company.
The Guidelines provide that if the Chair is not independent, the Board must appoint a Lead Independent Director. During the leadership transition in 2020, Mr. Lynch served as the Lead Independent Director.
Ms. Blackwell has served as Independent Chair of the Board since February 2021. Our Board Chair is elected to serve a two-year term, unless otherwise determined by the Board. Upon the recommendation of the Nominating & Governance Committee and following its own review, the Board elected Ms. Blackwell in February 2023 to continue her service as Board Chair for another two-year term. Because Ms. Blackwell is an independent director, the Board has not deemed it necessary to appoint a lead independent director.
Our Board has established five standing committees to help the Board fulfill its responsibilities. Committee members are elected annually by the Board based on the recommendations of the Nominating & Governance Committee. Each committee operates under a charter, all of which are available at https://ir.ingevity.com/corporate-governance/corporate-governance-documents.
The Board has determined that each member of its standing committees is independent under the relevant SEC and New York Stock Exchange (“NYSE”) standards, including the heightened independence standards required for members of audit and compensation committees. For more information on independence standards, see “Director independence.”
INGEVITY | 2024 Proxy Statement | 24 |
AUDIT COMMITTEE | 2023 Meetings: 9 Average attendance in 2023: 93% | ||
CHAIR Daniel F. Sansone* | MEMBERS Frederick J. Lynch* Karen G. Narwold William J. Slocum* Benjamin G. (Shon) Wright * Audit Committee Financial Expert | PRIMARY RESPONSIBILITIES: 1. Assist the Board with overseeing the integrity of the Company’s financial statements; 2. Review management’s assessments and reports relating to the effectiveness of the Company’s internal control over financial reporting; 3. Appoint, oversee, and evaluate the qualifications, performance, and independence of the independent auditor; 4. Oversee and evaluate the effectiveness of the Company’s internal audit function; 5. Review the overall adequacy and effectiveness of the Company’s legal, regulatory, and ethics and compliance programs; 6. Review significant legal, compliance, or regulatory matters; and 7. Review the Company’s financial risk exposures and mitigating actions. | |
ADDITIONAL GOVERNANCE MATTERS: | |||
The Board has determined that each member of the Audit Committee is independent in accordance with the heightened independence standards established by the Securities and Exchange Act of 1934 (the “Exchange Act”) and adopted by the NYSE for audit committee members. The Board has also determined that each Audit Committee member is financially literate, as such qualification is interpreted by the Board in its business judgement, and that each of Messrs. Lynch, Sansone and Slocum is an “audit committee financial expert” under SEC rules. No member of our Audit Committee serves on the audit committee of more than three public companies. The Audit Committee’s report for December 31, 2023, appears under “Audit Committee Report.” William J. Slocum will not stand for reelection at the Annual Meeting. |
TALENT AND COMPENSATION COMMITTEE | 2023 Meetings: 7 Average attendance in 2023: 100% | ||
CHAIR Diane H. Gulyas | MEMBERS Jean S. Blackwell Bruce D. Hoechner Frederick J. Lynch Daniel F. Sansone | PRIMARY RESPONSIBILITIES: 1. Evaluate the CEO’s performance and determine the CEO’s compensation based on such evaluation; 2. Review and approve the compensation of other executive officers; 3. Review and recommend to the Board for its approval Non-employee director compensation; 4. Administer the Company’s equity and other compensation plans and programs; 5. Review and make recommendations to the Board with respect to talent development and succession planning, diversity, equity, inclusion, and belonging programs, employee engagement initiatives, and corporate culture; and 6. Review incentive compensation arrangements to confirm that incentive pay aligns with Company goals and outcomes and does not encourage inappropriate risk-taking. | |
ADDITIONAL GOVERNANCE MATTERS: | |||
The Board has determined that each member of the T&C Committee is (i) an “outside director” under Section 162(m) of the Internal Revenue Code, as amended (the “Code”) and (ii) a “non-employee director” under Section 16b-3(b)(3)(i) promulgated under the Exchange Act. The T&C Committee’s report for December 31, 2023, appears under “Talent and Compensation Committee Report.” In July 2023, the T&C Committee changed its name from the Leadership Development & Compensation Committee to the Talent & Compensation Committee and made other amendments to its charter to emphasize its role in talent development, employee engagement and corporate culture in addition to its traditional executive compensation oversight role. |
INGEVITY | 2024 Proxy Statement | 25 |
NOMINATING AND GOVERNANCE COMMITTEE | 2023 Meetings: 5 Average attendance in 2023: 100% | ||
CHAIR Luis | MEMBERS Jean S. Blackwell Diane H. Gulyas Bruce D. Hoechner | PRIMARY RESPONSIBILITIES: 1. Identify individuals qualified to become Board members and recommend nominees for election to the Board; 2. Make recommendations to our Board concerning the composition and needs of the Board and its committees; 3. Maintain a Board succession plan; 4. Advise our Board on corporate governance matters; 5. Oversee the annual Board and committee self-evaluation process; and 6. Review related party transactions. | |
SUSTAINABILITY AND SAFETY COMMITTEE | 2023 Meetings: 5 Average attendance in 2023: 100% | ||
CHAIR Karen G. Narwold | MEMBERS Luis Fernandez-Moreno William J. Slocum Benjamin G. (Shon) Wright | PRIMARY RESPONSIBILITIES: 1. Oversee and review Ingevity’s integration of economic, environmental, and social principles into its business strategy and decision making; 2. Oversee Ingevity’s policies, procedures and performance with respect to environmental and corporate social responsibility and sustainability programs; 3. Review Ingevity’s annual Sustainability Report; 4. Review and monitor Ingevity’s policies, procedures, and performance relating to matters affecting employee, public, process, and product safety; and 5. Review and monitor the Company’s policies, procedures, and performance relating to matters affecting community engagement. | |
ADDITIONAL GOVERNANCE MATTERS: | |||
William J. Slocum will not stand for reelection at the Annual Meeting |
EXECUTIVE COMMITTEE | 2023 Meetings: 1 Average attendance in 2023: 100% | |
CHAIR Jean S. Blackwell | MEMBERS Luis Fernandez-Moreno Diane H. Gulyas Karen G. Narwold Daniel F. Sansone | PRIMARY RESPONSIBILITIES AND LIMITATIONS: The Executive Committee is authorized to exercise certain powers of the Board not otherwise prohibited by law or Ingevity’s Guidelines or governing documents between Board meetings when a meeting of the full Board is impractical or not warranted under the circumstances. |
Each of the Audit Committee, T&C Committee, Nominating & Governance Committee, and Sustainability & Safety Committee is responsible for annually reviewing their charter and performance. The Nominating & Governance Committee further reviews each of the committee charters annually, including the Executive Committee charter.
The Board strives to select as director candidates a mix of individuals with experience at policy-making levels in substantive areas that are relevant to the Company’s activities, as well as other characteristics that will contribute to the overall ability of the Board to perform its duties and meet changing conditions.
INGEVITY | 2024 Proxy Statement | 26 |
The Nominating & Governance Committee is responsible for evaluating and recommending qualified director candidates to the Board for its consideration. In evaluating potential director nominees, the Nominating & Governance Committee considers the following, among other things:
■ | independence and other related requirements for service on committees; | |
■ | the number of public company boards on which the nominee serves; | |
■ | conflicts of interest and other legal and ethical issues that would interfere with the proper performance of the responsibilities of a director (recognizing that some directors may also be executive officers of the Company); | |
■ | the nominee’s commitment to discharging the duties of a director in accordance with the Guidelines and applicable law and to serving on the Board for an extended period of time; | |
■ | the nominee’s available time and energy to carry out his or her duties effectively; | |
■ | experience that would enable the nominee to meaningfully participate in deliberations of the Board and committees and to otherwise fulfill his or her duties; and | |
■ | whether the nominee will enhance the diversity of the Board based on his or her educational and professional background, experience, racial and ethnic makeup, gender, viewpoints or perspectives. |
In addition, the Nominating & Governance Committee also considers character, financial literacy, and relevant skills in light of the Board’s needs.
The Nominating & Governance Committee considers recommendations for director candidates from Board members, stockholders, and other third parties, such as search firms that are engaged to identify candidates. The Nominating & Governance Committee evaluates candidates recommended by stockholders using the same criteria it uses for all other candidates. Any stockholder wishing to recommend a director candidate should provide the Nominating & Governance Committee with the information required by the Company’s Bylaws to be provided with respect to director nominees submitted by stockholders. For more information, see “Questions and Answers Regarding Stockholder Communications, Stockholder Proposals, and Company Documents.”
During 2023, the Board appointed one new director (Bruce D. Hoechner). Mr. Hoechner was recommended by a third-party search firm.
Our Guidelines and the NYSE require that a majority of our Governance Guidelines,directors be independent under the applicable rules and regulations of the SEC and the general listing standards of the NYSE. TheOur Board, with the assistance of the Nominating & Governance Committee, annually (or more frequently if circumstances require) assesses the independence of each director.
In conducting its independence assessment, the Board reviews all relevant facts and circumstances, including each director’s independence by reviewing anyaffiliations and relationships, potential conflicts of interest, and significant outside relationships. In determining each director’s independence, the Board broadly considers all relevant facts and circumstances, including specific criteria included in the NYSE’s general listing standards. For these purposes, the NYSE requires the Board to consider certain relationships that existed during a three-year look-back period. The Board considers the materiality and importance of such relationships not merely from the standpoint of the director,
but also from the standpoint of persons or organizations with which the director has an affiliation. An independent director is a director who our Board affirmatively determines has no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company). other than in connection with his or her role as a director.
Upon
In February 2024, the Nominating & Governance Committee and Board conducted their review of each director’s affiliations that are relevant to independence. These affiliations were provided by the directors in their responses to annual questionnaires distributed by the Company in December 2023. Once the Company received the list of affiliations, it conducted additional diligence on each relationship and ran searches against the Company’s books and records to determine whether any financial transactions existed with the affiliates. Results of the diligence and searches were reported to the Nominating & Governance Committee and the Board.
After reviewing the affiliations and report described above, upon the recommendation of ourthe Nominating & Governance Committee, the Board has affirmatively determined that all directors other than Mr. Fortson (Ingevity’s President and CEO) are independent, in accordance with the exception of Mr. Wilson, Ingevity’s Chief Executive Officer (“CEO”), eachapplicable rules and regulations of the remaining directors — Ms. Blackwell,SEC and Messrs. Kelson, Fernandez-Moreno, Fitzpatrick, Lynch,the general listing standards of the NYSE.
INGEVITY | 2024 Proxy Statement | 27 |
The Nominating & Governance Committee assists the Board Meetingsin annually assessing the effectiveness of the Board, its committees, and each director in carrying out their respective roles, as described below.
Format | Topics | Presentation of Findings | Feedback Incorporated | |||
The Nominating & Governance Committee determines the format of the evaluations, and annually considers the effectiveness of the evaluation process. Under the current process, each director completes a written questionnaire to provide feedback on various aspects of the Board and the committees on which such director serves, and to provide general feedback on each director. The chair of the Nominating & Governance Committee then reviews each questionnaire with the director who completed it to ensure the feedback given is well understood and to ensure that each director is given the opportunity to provide comprehensive feedback. | Evaluation topics generally include, among other matters: ■ Board composition and structure; ■ Board culture; ■ Information flow and processes; ■ Board oversight of risk management and strategic planning; ■ Compliance and ethics program effectiveness; ■ Succession planning; ■ Access to management; and ■ Individual director effectiveness. | The Nominating & Governance Committee evaluates the findings and then presents to the Board and each committee chair the results of the evaluations. The Board and committees discuss the results to identify opportunities to enhance effectiveness. | The Board and/or committees implement enhancements and other modifications to their respective policies and procedures as appropriate. |
Examples of actions the Board has taken in recent years in response to the annual evaluation process include:
■ | establishment of the Sustainability & Safety Committee; | |
■ | assigning oversight of matters relating to the attraction, development, and retention of the Company’s leadership to the T&C Committee; | |
■ | rotating the Chair of the T&C Committee; | |
■ | running certain committee meetings concurrently to maximize Board time at regular meetings; | |
■ | modifying committee meeting content and length to reflect input from committee members; and | |
■ | streamlining the agenda of the Board’s final meeting of the year. |
Our Board meets on a regularly scheduled basis during the year to review significant developments affecting our CompanyIngevity and to act on matters requiring board approval, andBoard approval. The Board may hold special meetings between scheduled board
Board meetings when appropriate.
The Board met fiveten times during fiscal year 2017. All directors2023. Each director attended at least 75% or more of these meetings and of the aggregate of (i) the number of meetings of the Board held during the period he or she was a director and (ii) the number of meetings of all committees of the Board on which they served that were held during fiscal year.
Executive Sessionsthe period he or she served on such committees. All directors attended the 2023 Annual Meeting of Non-Management DirectorsStockholders.
Our Governance Guidelines require that the non-management members of our Board meet in executive session without management participationpresent at each regularly scheduled Board meeting. These meetings are chaired by the
Chairman of the Board. Our Governance Guidelines also require that the independent members ofLikewise, our Boardcommittees generally meet in executive session without management present at least onceeach regularly scheduled committee meeting.
INGEVITY | 2024 Proxy Statement | 28 |
The Board, acting as a year.
Director Attendance at Annual Meetings
Directors are invitedfull Board and encouraged to attend the Company’s Annual Meeting. All of our Directors attended the 2017 Annual Meeting.
Board Leadership Structure
Our Board has determined that having an independent director serve as the Chairman of the Board is currently the best leadership structure for the Company. Separating the positions of Chairman and CEO allows the CEO to focusthrough its committees, oversees risk management on executing the Company’s strategic plan and managing the Company’s operations and performance and permits
improved communications and relations between the Board, the CEO and other senior leadersbehalf of the Company. Our Board regularly reviewsrecognizes the importance of effective risk management in running successful business operations and believes it has effective processes in place to identify and monitor potential material risks facing the Company and to oversee the Company’s Board leadership structure, how the structure is functioning and whether the structure continues to be in the best interest of our stockholders.aggregate risk profile.
8 - INGEVITY - 2018 Proxy Statement
Codes of Business Conduct and Ethics
The Company maintains three codes of business conduct and ethics (collectively, the “Codes of Ethics”Ingevity’s enterprise risk management (“ERM”) to focus the Board and management on areas of ethical risk, provide guidance to personnel to help them recognize and deal with ethical issues, provide mechanisms to report unethical conduct, and help to foster a culture of honesty and accountability. The Codes of Ethics include:
Each of the Codes is available for review on our website at http://ir.ingevity.com/governance/codes-of-conduct. This
website is also where we will disclose, to the extent and in the manner permitted by Item 5.05 of Form 8-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the nature of any amendment to the Codes of Ethics (other than technical, administrative, or other non-substantive amendments), our approval of any material departure from a provision of the Codes of Ethics, and our failure to take action within a reasonable period of time regarding any material departure from a provision of the Codes of Ethics that has been made known to any of our executive officers.
Any waiver of the Codes of Ethics for executive officers or directors will be made only by the Board or its Governance Committee. In support of the Codes of Ethics, we have provided employees with a number of avenues for the reporting of ethics violations or similar concerns, including an anonymous telephone hotline.
Board’s Role in Risk Oversight
Our Board believes that full and open communication betweenprocess helps management and the Board identify, prioritize and manage risks that have the potential to present the most significant obstacles to achieving the Company’s business objectives or that otherwise present significant risk to the Company. Key leaders across the business in various functions work together to identify the major risks faced by the Company and its businesses. At least annually, the Company’s management and Board review the major risks identified through the Company’s ERM process along with risk mitigation plans. The ERM process is essential for effectiveregularly refreshed to adequately address the overall risk environment and tailor the Company’s priorities and mitigation plans accordingly. Management reports regularly to the Board regarding material changes or developments.
Set forth below are key areas of risk overseen by the Board, directly or through its committees.
Our Board, both directly and through the Audit Committee, receives regular updates on various legal, compliance and regulatory matters, such as developments in litigation, compliance risks and our compliance programs. In addition, regular updates provided to the Audit Committee by our General Counsel, Chief Compliance Officer, and internal audit function provide insight into our risk assessment and risk management policies and oversight. Our Board meets with our Chief Executive Officerprocesses.
While our Board is ultimately responsible for risk oversight, our Board committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to riskoversees the management in the areas of financial, accounting, internal controls, and procedures, information technologyliquidity risks. This oversight includes interaction at Audit Committee meetings with the Chief Financial Officer; management from our financial, accounting, internal audit, and cyber security risktreasury functions; and legal and regulatory compliance.
representatives from our independent registered public accounting firm. The Audit Committee also discusses with management our major financial risk exposures and the steps management has taken to monitor, control and controlremediate such exposure.
The CompensationNominating & Governance Committee oversees risks related to Board organization, Board membership (including director refreshment and succession), Board structure and other corporate governance matters.
The T&C Committee assists our Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs and with respect to succession planning for key management. For more information, see “Compensation Discussion and Analysis.”
The GovernanceSustainability & Safety Committee assistsreviews and monitors our corporate responsibility and sustainability programs, including environmental, social and governance (“ESG”) matters and oversight of people, product and process safety risk. In addition to reporting to the Sustainability & Safety Committee, management’s practice is to periodically review corporate responsibility and sustainability matters, including ESG programs and policies, in joint session with the full Board. As shown below, although the Sustainability & Safety Committee has primary responsibility for these matters, other committees, and occasionally the full Board, in fulfillingoversee specific sustainability-related matters.
INGEVITY | 2024 Proxy Statement | 29 |
Sustainability Report/ Other Area for Review | Committee | |||||
Item Description | BoD | S&S | N&G | Audit | T&C | |
Commitment to Sustainability | Sustainability Rating Agencies, Reporting and Sustainability Groups | |||||
Sustainability Materiality Refresh | ||||||
Goal Setting and Tracking Progress | ||||||
Manufacture Responsibly | Responsible Care Policy/Program | |||||
Prioritize People | Employee Experience | |||||
Safety | ||||||
Personal/Employee Safety | ||||||
Process Safety | ||||||
Public Safety/Environmental Sustainability | ||||||
Emergency Response and Crisis Communication Plans | ||||||
Culture of Inclusion/Diversity, Equity, Inclusion & Belonging | ||||||
Talent Attraction | ||||||
Compensation and Talent Management | ||||||
Employee Development | ||||||
Health and Wellness | ||||||
Supporting our Communities/Community Engagement | ||||||
Ingevicares/Philanthropic Giving | ||||||
Pursue Excellence | Commitment to Integrity and Ethical Behavior | |||||
Compliance & Ethics – Program Effectiveness, Complaints, Investigations, Financial Related Concerns, Compliance Program | ||||||
Code of Conduct | ||||||
Supplier Principles of Conduct, Diversity and Sustainability | ||||||
Cybersecurity | ||||||
Intellectual Property | ||||||
Financial Performance | ||||||
Governance | ||||||
Embrace Innovation | Business and Segment Innovation | |||||
Other | Emerging Issues, regulations in Sustainability and Safety | |||||
Alignment of sustainability and safety programs to company strategy | ||||||
Enterprise Risk Management |
INGEVITY | 2024 Proxy Statement | 30 |
The Board oversees our cybersecurity program and management of the associated risks. The Board receives updates at least twice a year from management, including our Chief Information Security Officer, on cybersecurity matters and our risk management program. The Board also receives updates periodically from third-party cybersecurity experts on the risk landscape generally. Cybersecurity risk and risk management is also integrated into our broader enterprise risk management plans and processes to ensure that cybersecurity matters are considered, and our IT department is consulted, during key business decisions that we make.
Under its oversight responsibilitiescharter, the Sustainability & Safety Committee has responsibility for overseeing and reviewing the Company’s integration of economic, environmental and social principles into its business strategy and decision making; reviewing and monitoring Ingevity’s policies, procedures and performance with respect to environmental, corporate responsibility and sustainability programs, matters affecting employee, public, process and product safety and matters affecting community engagement; reviewing the Company’s annual Sustainability Report; and making recommendations to the Board regarding the foregoing matters as the Sustainability & Safety Committee deems appropriate. In addition to the reviews completed by the Sustainability & Safety Committee, Ingevity’s management of risks associated withalso presents on ESG matters to the full Board organization, membershipat least once annually.
Our latest Sustainability Report and structure, corporate governanceother information regarding our ESG initiatives and progress are available on our website at https://www.ingevity.com/about/sustainability.
One of our Board’s most critical functions is executive succession planning, which is reviewed at least once annually and more often as needed. The T&C Committee, which has the primary responsibility for overseeing the development of succession plans for all of our directors. While executive officers, regularly discusses succession in collaboration with our CEO and CHRO, and reports on the discussions to the Board.
Under its charter, the T&C Committee is responsible for assistingoverseeing and reviewing Ingevity’s policies and programs related to DEIB, and human capital matters, including employee engagement initiatives. The T&C Committee receives periodic updates from management on, and discusses, the Company’s DEIB vision and strategy. At least once a year, the T&C Committee reviews matters related to the Company’s culture, including benefits offered, talent development, and workforce priorities. The T&C Committee also receives updates on the Company’s implementation of the IngeviWay, a framework which sets forth our purpose, vision and values and guides our behaviors and decision-making, to ensure alignment.
Additional information regarding DEIB and human capital matters are available on our website at https://www.ingevity.com/diversity-equity-inclusion and https://www.ingevity.com/the-ingeviway/.
Each director receives educational information about the Company and expectations of their role as part of an orientation upon joining the Board. Once on the Board, directors participate in evaluating certain risksan ongoing education program that incorporates site visits; management presentations; presentations by the Company’s independent auditors, investment banks and overseeinginternal and external legal counsel; third-party expert speakers on various topics; and the managementdistribution of analyst reports and pertinent articles on the Company’s business and industry. The Nominating & Governance Committee annually reviews the Board education program and recommends changes that it deems appropriate.
INGEVITY | 2024 Proxy Statement | 31 |
Under our Guidelines, a director may not stand for reelection for any service year after such risks, our entiredirector turns 72 in the interest of facilitating Board is regularly informed through managementrefreshment. The Board will determine on a case-by-case basis whether to grant an exception to this limitation taking into account such factors as the then current needs of the Board and any particular expertise or unique attributes of the director.
The Board has not established a policy enforcing a term limit because it believes that, on balance, such a policy would sacrifice the contribution of directors who have been able to develop, over a period of time, extensive insight into the Company and its operations. The Board annually evaluates each director’s contributions during the Board and committee reportsevaluation process.
Our Guidelines require any director who has a significant change in his or her full-time job responsibilities to submit a resignation. The Board then considers whether to accept any such resignation taking into account all relevant factors.
The Guidelines provide that independent directors generally may not serve on more than five public company boards (including Ingevity’s Board). However, a director who is actively employed as a CEO of a public company may not serve on more than three public company boards (including Ingevity’s Board), and a director who serves as an officer (other than CEO) at another public company may not serve on more than four public company boards (including Ingevity’s Board).
We value and are committed to regular, meaningful engagement with our stockholders and other stakeholders, including customers, suppliers, employees and our communities. In 2023, we hosted 97 calls with stockholders and potential stockholders and discussed a variety of topics, including capital allocation and leverage, strategy, key raw material costs, and financial results. Senior leadership participated in roughly a third of the calls. In May 2023, we hosted an Investor Day to drive further engagement with our stockholders and to speak with them directly about such risks and steps takenour strategic initiatives.
97 CALLS WITH | 99 MEETINGS WITH |
In 2023, we also attended 10 conferences/roadshows hosted by analysts resulting in 99 meetings with stockholders or potential stockholders.
INGEVITY | 2024 Proxy Statement | 32 |
Interested Party Communications withcontact the Board
Interested parties, including stockholders, may communicate by mail with all or selected members of the Board. Board as follows:
Via Email: | Via Mail: | ||
corporatesecretary@ingevity.com | C/O Corporate Secretary | ||
Ingevity Corporation | |||
4920 O’Hear Ave, Suite 400 | |||
N. Charleston, SC 29405 |
Correspondence should be addressed to the Board or any individual director(s) or group or committee of directors either by name or title (for example, “Chairman“Chair of the Board,” “Chair of the Nominating and& Governance Committee”Committee,” or “All Non-ManagementIndependent Directors”). All such correspondence should be sent via U.S. Mail to: Ingevity Corporation, 5255 Virginia Ave, N. Charleston, SC 29406,
Attn: Katherine P. Burgeson, Secretary, or by Email to: corporatesecretary@ingevity.com. In general, any communication delivered to the Company for forwarding to the Board, a Board committee, a particular group of directors or specified Board members will be forwarded in accordance with the stockholder’s instruction,as directed, except that we reserve the right not to forward any soliciting or advertising materials or any abusive, threatening, or otherwise inappropriate materials.
INGEVITY - 2018 Proxy Statement - 9
Committees
Our Code of Conduct applies to all Ingevity-controlled entities and their respective employees, officers and directors, including the Board. It emphasizes our Boardcommitment to doing things the right way to ensure our employees and others understand our “IngeviWay” value for integrity and ethical behavior. The Code of Conduct also contains information to enable better decision making on topics such as employee and leader responsibilities, data privacy and protection, DEIB and third-party interactions.
The Code of Conduct focuses the Board, has three standing committees that met during fiscal year 2017:management and our employees on areas of ethical risk, provides guidance and examples to help personnel recognize and deal with ethical issues, prominently features mechanisms to report unethical conduct, and helps to foster a culture of honesty and accountability. The Code of Conduct is available on our website at http:// ir.ingevity.com/governance/codes-of-conduct. All employees, including executives, and all non-employee directors are required annually to review the Audit Committee,Code of Conduct and to participate in Code of Conduct training.
Any waiver for directors or executive officers from the provisions of the Code of Conduct must be made by the Nominating & Governance Committee and the Compensation Committee. Each of these committees is composed entirely of directors who have been determinedor by the Board to be independent under current NYSE standards. Each committee operates under a charter approved byat the Board setting out the purposes and responsibilities of the committee. The committees and the Board periodically review and, as appropriate, revise the
committees’ charters to reflect, among other things, changing regulatory developments and changes in the responsibilities of the committees. All committee charters are available for review on our website under the Corporate Governance tab at http://ir.ingevity.com. The Board has also established an Executive Committee which is authorized to exercise the powers of the Board between Board meetings but did not meet during the past fiscal year.
Executive Committee
Ms. Blackwell and Messrs. Kelson, Fitzpatrick and Lynch are the current members of our Executive Committee, and Mr. Kelson serves as Chair.
The Executive Committee is authorized to exercise the authority of the full Board in managing the business and affairs of the Company. However, the Executive Committee does not have the power to do any of the following:
(1) approve or adopt or recommend to the stockholders any action or matter (other than the election or removal of directors) that Delaware law requires to be approved by stockholders; or (2) adopt, amend or repeal our bylaws. Ingevity’s Executive Committee held no meetings during fiscal 2017.
Audit Committee
Ms. Blackwell and Messrs. Fernandez-Moreno, Fitzpatrick and Sansone are the current members of our Audit Committee, and Ms. Blackwell serves as Chair.
The Board has determined that each of Ms. Blackwell and Messrs. Fitzpatrick and Sansone is an “audit committee financial expert” as that term is defined under SEC rules. The Board has also determined that all Audit Committee members are financially literate, as that qualification is interpreted by the Board in its business judgment, in compliance with the NYSE listing standards requirements for audit committee members. The Board has also determined that all membersrecommendation of the Audit Committee are independent in accordance withor the heightened independence standards established byNominating & Governance Committee. Any such waiver will be disclosed within four business days of the waiver (or an implicit waiver) on our website at http://ir.ingevity.com/governance/codes-of-conduct, and will remain posted for a period of at least 12 months. Any amendment to the Code of Conduct (other than technical, administrative, or other non-substantive amendments) for which disclosure is required pursuant to Item 5.05 of Form 8-K under the Exchange Act will also be disclosed on that page of our website.
We have provided employees with a number of avenues to report ethics and adopted by the NYSE for audit committee members.
The Audit Committee assists our Board in fulfilling its responsibilitiescompliance violations or similar concerns, including an anonymous telephone hotline, with respectoptions specific to the oversightcountries in which we operate to allow for reporting in local languages.
We maintain several governance documents on our website, which are listed below.
Our Code of Conduct is available at: https://ir.ingevity.com/corporate-governance/codes-of-conduct
The following materials are available at https://ir.ingevity.com/corporate-governance/corporate-governance-documents:
■ | Certificate of Incorporation; | |
■ | Bylaws; | |
■ | Governance Guidelines; | |
■ | Committee charters; | |
■ | Anti-Hedging Policy; and | |
■ | Stock Ownership Guidelines. |
INGEVITY | 2024 Proxy Statement | 33 |
The following materials are available at: https://www.ingevity.com/about/sustainability/:
■ | Sustainability Reports; | |
■ | Ingevity’s alignment with ten of the United Nations’ Sustainable Development Goals; | |
■ | Human Rights Policy; | |
■ | Modern Slavery Policy; | |
■ | Quality Policy; | |
■ | Responsible Care® Policy; and | |
■ | Supplier Principles of Conduct. |
These materials are also available in print at no charge to any stockholder who requests a copy by writing to Corporate Secretary, Ingevity Corporation, 4920 O’Hear Ave, Suite 400, N. Charleston, SC 29405, or by email to: corporatesecretary@ingevity.com.
The Board evaluates related party transactions consistent with Item 404 of Regulation S-K. Under its charter, the Nominating & Governance Committee is charged with reviewing all potential related party transactions and evaluation of: (1) the integrity of our financial statements; (2) our system of internal control over financial reporting; (3) the performance of our internal audit function; (4) the independence, qualifications and performance of our independent auditor; (5) our risk review and system of compliance with legal and regulatory requirements; (6) our financial management and resources; and (7) specific financial strategy initiatives as requested bymaking recommendations to the Board or management. Among other things, the Audit Committee, under its charter, directly appoints, compensates, retains and oversees the work of our independent auditor, which reports directly to the Audit Committee. The other principal duties and responsibilities of the Audit Committee are set forth in its charter. Ingevity’s Audit Committee held eight meetings during fiscal 2017.
Compensation Committee
Ms. Blackwell and Messrs. Kelson, Lynch and Sansone are the current members of our Compensation Committee, and Mr. Lynch serves as Chair. The Board has determined that all members of the Compensation Committee are independent as defined in the applicable listing standards of the NYSE, including the heightened independence standards applicable to compensation committee members.
The purpose of the Compensation Committee is to assist the Board in fulfilling its responsibilities with respect to compensation of our executives and non-employee directors and oversight of matters relating to our equity compensation and certain employee benefits plans. The Compensation
Committee’s duties include setting the overall compensation strategy and policies for our executives and non-employee directors, reviewing and approving the goals and objectives relating to the compensation of our CEO and evaluating his performance in light of those goals and reviewing our incentive compensation arrangements to confirm that they do not encourage inappropriate risk taking.
The other principal duties and responsibilities of the Compensation Committee are set forth in its charter. Ingevity’s Compensation Committee held six meetings during fiscal 2017.
10 - INGEVITY - 2018 Proxy Statement
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee has served as an employee of Ingevity at any time. During the past fiscal year, no executive officer of Ingevity served as a member of the Compensation Committee (or other committee
performing similar functions) or on the board of directorsregarding approval of any entity at which a member ofsuch transactions. Each year, the Compensation Committee or Board served as anCompany solicits information regarding potential related party transactions from directors, director nominees and executive officer.
officers, who are also required to promptly notify the Company and the Nominating and Governance Committee
Messrs. Kelson, Fernandez-Moreno, Fitzpatrick of any new affiliations or transactions as they arise. Transactions and Lynchaffiliations disclosed by such persons are then reviewed and analyzed by our Law and Compliance department using searches run against the current membersCompany’s books and records to determine if there are any financial transactions involving the Company and such affiliates. The results of such analyses are reported to the Nominating and Governance Committee for review, analysis and determination of whether there are any related party transactions and, if any are found, whether such transactions should be approved or ratified based on the relevant circumstances.
Based on a review of the transactions and affiliations reported by the Company’s directors, director nominees, and executive officers beginning in December 2023, the Nominating & Governance Committee has advised the Board that it has not identified any related party transactions since the beginning of the fiscal year ended December 31, 2023, and Mr. Fitzpatrick serves as the Chair. none are currently proposed.
INGEVITY | 2024 Proxy Statement | 34 |
The Board has determined that all membersannually reviews and approves non-employee director compensation at the recommendation of the Governance CommitteeT&C Committee. This review involves a survey of director compensation at peer companies and other similarly situated companies and a discussion with our independent compensation consultant, Pearl Meyer, regarding director compensation practices.
The 2023 non-employee director compensation program consisted of the following:
Standard Compensation | ||||
Cash Retainer | $ | 90,000 | ||
Restricted Stock Unit Award | $ | 118,000 | ||
TOTAL | $ | 208,000 | ||
Additional Cash Retainers for Leadership | ||||
Board Chair | $ | 100,000 | ||
Lead Independent Director* | $ | 25,000 | ||
Audit Committee Chair | $ | 20,000 | ||
T&C Committee Chair | $ | 15,000 | ||
Nominating & Governance Committee Chair | $ | 12,000 | ||
Sustainability & Safety Committee Chair | $ | 12,000 |
* | The Company did not have a Lead Independent Director in 2023. |
Cash retainers are independent as definedpaid to the non-employee directors quarterly in advance. Non-employee directors may elect to receive their annual cash retainer (both standard and leadership retainers) in the applicable listing standardsform of deferred stock units (“DSUs”) in lieu of cash under the 2016 Omnibus Incentive Plan, as amended, and the Non-Employee Director Deferred Compensation Plan (“Director DCP”). If a director makes such an election, the cash retainer is converted into an amount of DSUs using the closing price of the NYSE.
The purpose ofCompany’s Common Stock on the Governance Committee isbusiness day that the cash retainer would have otherwise been paid to assist the Board in fulfilling its corporate governance responsibilities, including, without limitation, with respect to identifyingdirector. DSUs representing cash retainers are fully vested upon grant and recommending qualified candidates for our Board and its committees; overseeing the evaluation of the effectiveness of
the Board and its committees; reviewing matters on corporate governance, including trends and current practices and developing and recommending Corporate Governance Guidelines and other governance policies and procedures. The Governance Committee will also consider and evaluate candidates properly submitted for nomination by stockholders in accordance with the procedures set forth in our bylaws.
The principal duties and responsibilities of the Governance Committee are set forth in its charter. Ingevity’s Governance Committee held four meetings during fiscal 2017.
Governance Committee Process for Identifying and Evaluating Director Candidates
The Governance Committee evaluates all director candidates in accordance withsettled when the director qualification standards described in our Governance Guidelines. These standards include (1) an absence of conflicts of interest and other legal and ethical issues that would interfere with such candidate’s service as a director, (2) a commitment to serve as a director in accordance with our Governance Guidelines, (3) a willingness and ability to devote sufficient time and energy to carry outterminates his or her duties,service with the Board. DSUs in lieu of cash retainers do not confer voting rights but are entitled to dividend-equivalents, which accrue from the grant date and (4) having sufficient experience to enableare delivered in cash when the director to meaningfully participate in deliberations of the Board and one or more of itsunderlying DSUs are settled.
INGEVITY | 2024 Proxy Statement | 35 |
committees and to otherwise fulfill his or her duties. In addition, the Governance Committee will evaluate a candidate’s independence, skills and experience in the context of our Board’s needs. While the Board does not have a specific diversity policy, pursuant to our Governance Guidelines, the Board strives to select as director candidates a mix of individuals who represent diverse experience, background and thought at policy-making levels that are relevant to the Company’s activities, as well as other characteristics that will contribute to the overall ability of the Board to perform its duties and meet changing conditions.
Back to Contents |
Stockholder Recommendations for Director Candidates
The Governance Committee will consider director candidates recommended by stockholders and will do so in the same manner as candidates recommended by other sources. Any stockholder wishing to recommend a director candidate should provide the Governance Committee with the
information required by the Company’s bylaws to be provided with respect to director nominees submitted by stockholders. The process for stockholders to nominate an individual for election as a director is discussed on page 40.
INGEVITY - 2018 Proxy Statement - 11
Cash Compensation
During 2017, each non-employee director received $75,000 as an annual cash retainer for service as a director. Directors who are also employees of the Company receive no additional compensation for service as a director.
Each non-employee director who served as either the Board Chair or as a Committee Chair received an additional retainer
as follows: Chairman of the Board: $75,000; Audit Committee Chair: $15,000, Compensation Committee Chair: $10,000 and Governance Committee Chair: $10,000. These amounts have been revised for 2018. See 2017 Director Compensation Table, page 13.
Each non-employee director receives an annual award grant of Ingevity restricted stock units (“RSUs”DRSUs”) under the 2016 Omnibus Incentive Plan, as amended, equivalent to $90,000approximately $118,000 at the time of grant. In 2017,The grant date for the RSU awards were made to non-employee directors underDRSUs is the Omnibus Plan and underbusiness day after the terms and conditions applicable to their grants.annual stockholders meeting. The directors become vested in their RSUsDRSUs vest on the first anniversary of the award date. Forgrant date, and shares of Common Stock underlying DRSUs are delivered to the fiscal year ended 2017,directors as soon as practicable thereafter. DRSUs do not confer voting rights but are entitled to dividend-equivalents, which accrue from the grant date and are delivered in cash when the underlying DRSUs are settled.
If a director with DRSUs ceases to be a director before the vesting date other than due to death, disability, or termination for cause, the director will vest and settle in a pro rata number of RSUs granted was determined based on the average ofDRSUs (rounded up to the highnearest whole number) unless otherwise approved by the Board. If a director with DRSUs ceases to be a director due to death or disability, all DRSUs will vest. If a director with DRSUs is terminated for cause, all unvested and low price ofunsettled DRSUs will be forfeited, together with the Company’s Common Stock as traded on the NYSE on May 27, 2016.associated dividend-equivalents.
In 2016, the Compensation Committee approved a plan permitting non-employee
Non-employee directors to elect to receive their 2017 annual cash retainer (both regular annual retainer for Board service, Board Chair retainer and Committee Chair
retainer) in the form of deferred stock units (“DSUs”) under the Omnibus Plan. In addition, each non-employee director may also elect to receive their annual stock RSUDRSU award in the form of DSUs. DSUs representing cash retainers would be 100% vested, but settled upon termination of service with the Board. RSUsDRSUs converted into DSUs (annualwith respect to the annual stock award) would beaward are subject to 1-yearthe same conditions for vesting and alsodividend-equivalents as DRSUs. However, DSUs are not settled upon termination ofuntil the director terminates service withfrom the Board.
A
Directors are entitled to reimbursement for out-of-pocket expenses incurred in connection with their Board service. Ingevity does not provide perquisite allowances to non-employee director must make his or her election to receive DSUs (in lieu of cash or RSUs) by December 31 of the calendar year preceding the year in which the compensation is earned. No changes to the DSU distribution date are permitted absent a hardship.directors.
Non-employee directorUnder our stock ownership guidelines, areeach non-employee director is expected to hold an amount of Common Stock equal to five times the annual base cash retainer. SharesFor 2023, the holding amount is $450,000. Non-employee directors have five years from the date they join the Board to meet the requirement.
Common Stock owned outright by thea director or his or her immediate family members residing in the same household, either outright or in family trusts, and sharesCommon Stock held in retirement plan accounts are deemed to be owned shares for purposes of these guidelines, as well asare vested and nonvested RSUsunvested DRSUs and DSUs. Until a
A non-employee director meetsin the first five years of service on the Board who has not yet met these guidelines he or she must hold 50% of the net
shares gained from the settlement of RSUs. If ahis or her vested DSUs and DRSUs. A non-employee director who does not meet these guidelines within five years he or she must hold 100% of his or her vested DSUs or DRSUs until the net shares gained from the settlementguidelines are met.
As of RSUs.
EachDecember 31, 2023, each non-employee director is deemed to bewho has served on the Board for at least five years has attained the minimum stock ownership levels, and the remaining directors are on track towards achievingfor compliance.
Our directors are not permitted to engage in hedging activities with respect to our stock. See “Compensation Discussion and Analysis – Other Compensation Policies and Practices – Anti-hedging” for more information about the ownership goal.Company’s anti-hedging policy.
INGEVITY | 2024 Proxy Statement | 36 |
12 - INGEVITY - 2018 Proxy Statement
The following table includes information concerning compensation for service as a director paid to or earned by the people listed in the table who served asour directors during the fiscal year ended December 31, 2017:2023 (note that Mr. Fortson’s compensation is set forth in the “Summary Compensation Table” and not included below).
Name | Fees earned or paid in cash ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Non-equity incentive plan compensation ($) | Change in pension value and nonqualified deferred compensation ($) | Total ($) | ||||||
Richard B. Kelson | 150,000 | 90,040 | — | — | — | 240,040 | ||||||
Jean S. Blackwell | 90,000 | 90,040 | — | — | — | 180,040 | ||||||
Luis Fernandez-Moreno | 75,000 | 90,040 | — | — | — | 165,040 | ||||||
J. Michael Fitzpatrick | 85,000 | 90,040 | — | — | — | 175,040 | ||||||
Frederick J. Lynch | 85,000 | 90,040 | — | — | — | 175,040 | ||||||
Daniel F. Sansone(3) | — | 165,081 | — | — | — | 165,081 | ||||||
D. Michael Wilson | — | — | — | — | — | — |
2023 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE | ||||
Fees Paid in | Stock | All Other | Total | |
Cash(1) | Awards(2) | Compensation(3) | Compensation | |
Name | ($) | ($) | ($) | ($) |
Jean S. Blackwell | 190,000 | 118,012 | — | 308,012 |
Luis Fernandez-Moreno | 102,000 | 118,012 | — | 220,012 |
Diane H. Gulyas | 105,000 | 118,012 | — | 223,012 |
Bruce D. Hoechner | 90,000 | 147,597 | — | 237,597 |
Frederick J. Lynch | 90,000 | 118,012 | — | 208,012 |
Karen G. Narwold | 102,000 | 118,012 | — | 220,012 |
Daniel F. Sansone | 110,000 | 118,012 | — | 228,012 |
William J. Slocum | — | 208,106 | — | 208,106 |
Benjamin G. (Shon) Wright | 90,000 | 118,012 | — | 208,012 |
(1) |
(2) | ||
(3) | The amount of perquisites and other personal benefits has been excluded for all non-employee directors as the total value of each director’s perquisites and other personal benefits was less than $10,000. |
INGEVITY | 2024 Proxy Statement | 37 |
PROPOSAL 2 |
At the December 2017 meeting the Board of Directors approved increases in the annual cash and the annual stock award of RSUs effective January 1, 2018. The annual cash retainer will increase to $85,000. Effective in 2018, each non-employee director who serves as either the Board Chair or as a Committee Chair will receive an additional retainer as
OUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL. |
follows: Chairman of the Board: $85,000, Audit Committee Chair: $20,000, Compensation Committee Chair: $15,000, and Nominating & Governance Committee Chair: $12,000. Effective 2018, each non-employee director will receive an annual stock award of RSUs equivalent to in value of $95,000 on the grant date.
EXECUTIVE OFFICERS
Set forth below is information about our executive officers as of March 12, 2018,In accordance with the exceptionrequirements of Mr. Wilson, who is also a director and is discussed above. Each of the following executive officers has served in their positions with the Company since its separation from its former parent company, WestRock Corporation (“WestRock”) in May, 2016 (the “Separation”), except for Mr. Smith, who joined the Company in June 2016 and was promoted to his current position in January 2017.
John C. Fortson (age 50) Mr. Fortson serves as Executive Vice President, Chief Financial Officer and Treasurer of Ingevity. Mr. Fortson came to Ingevity from AAR Corporation where he served as Vice President, Finance since May 2013, becoming Vice President, Chief Financial Officer and Treasurer in July 2013. Prior to joining AAR Corporation, Mr. Fortson was a Managing Director in the Investment Banking Department of Bank of America Merrill Lynch working in the firm’s New York, London and Chicago offices. Mr. Fortson is a graduate of the United States Military Academy at West Point and has a Master of Business Administration from Duke University’s Fuqua School of Business. Mr. Fortson spent seven years as an
infantry officer in the U.S. Army. His last assignment was as a parachute rifle company commander in the 82nd Airborne Division.
Katherine P. Burgeson (age 60) Ms. Burgeson serves as Executive Vice President, General Counsel and Secretary of Ingevity. Ms. Burgeson came to Ingevity from WestRock, where she served as Associate General Counsel, a position she held since July 1, 2015. Prior to the merger of MeadWestvaco Corporation and Rock-Tenn Company which resulted in the formation of WestRock, Ms. Burgeson served as Deputy General Counsel of MeadWestvaco, where she was lead legal counsel for commercial, corporate and mergers and acquisition-related matters. Ms. Burgeson joined Westvaco Corporation, MeadWestvaco’s predecessor in 2000. Prior to joining Westvaco, Ms. Burgeson was a partner at Cummings & Lockwood in Stamford, Connecticut. Ms. Burgeson began her legal career as an associate at Shearman & Sterling. Ms. Burgeson received her J.D. from Fordham University School of Law and her B.A. from Trinity College in Hartford, Connecticut.
INGEVITY - 2018 Proxy Statement - 13
Michael P. Smith (age 57) Mr. Smith serves as Executive Vice President and President, Performance Chemicals, Strategy and Business Development. Mr. Smith joined Ingevity in June 2016 after 23 years of service at FMC Corporation. He served as vice president and global business director for FMC’s health and nutrition business after holding multiple positions of increasing responsibility within that business. During his career with the company, Mr. Smith held various roles including marketing manager for FMC Water Treatment Chemicals in Manchester, England; global business manager for FMC Process Additives, also in Manchester; director of business planning for FMC Chemicals; division general manager for the active oxidants division; division general manager for hydrogen peroxide; general manager for food ingredients for FMC BioPolymer; and division general manager for FMC BioPolymer. Prior to joining FMC, Mr. Smith held several sales and management positions with Hercules Incorporated, a supplier of hydrocarbon and pine-based resins. Mr. Smith holds a Bachelor of Arts degree in chemistry
from the University of Virginia and a Master of Business Administration degree from the University of Michigan.
S. Edward Woodcock, Jr. (age 52) Mr. Woodcock serves as Executive Vice President and President, Performance Materials. Mr. Woodcock served as vice president of MeadWestvaco’s, and later, WestRock’s Carbon Technologies business from 2010 to 2016 after holding multiple positions of increasing responsibility within that business, most recently global business director, Automotive. During his 28-year career with the company, Mr. Woodcock has held various roles including business director, Automotive, for the Asia-Pacific region, worldwide marketing manager for the chemical division’s non-U.S. business, area sales manager for Latin America, and technical manager for the Process Technology business. At various stages of his career, he has had direct responsibility for products from each of our businesses. Mr. Woodcock holds a Bachelor of Science degree in chemical engineering from the University of Virginia.
PRINCIPAL STOCKHOLDERS
The following table lists any person (including any “group” as that term is used in Section 13(d)(3)14A of the Exchange Act) who,Act, we are asking stockholders to our knowledge, wasapprove, on an advisory basis, the beneficial owner asfollowing resolution concerning the compensation of February 27, 2018, of more than 5% of our outstanding voting shares.
Title of Class | Name and Address of Beneficial Owners | Number of Shares | Percent of Class | ||||
Common Stock | BlackRock Inc. 55 East 52nd Street New York, New York 10055 | 5,415,950 | (1) | 12.83 | % | ||
Common Stock | The Vanguard Group 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 3,965,343 | (2) | 9.39 | % |
14 - INGEVITY - 2018 Proxy Statement
The following table shows how much of our Common Stock our current directors, named executive officers (“NEOs”), and all officers and directors as a group beneficially owned as:
RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of February 27, 2018. Beneficial ownership is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. In general, beneficial ownership includes any shares a director or officer can vote or transfer and any security the director or officer has the
right to vote or transfer within 60 days. Each stockholder listed in the table has sole voting and investment power for all shares shown as beneficially owned by him or her. Individual directors andour named executive officers as well as directorsdescribed in this Proxy Statement, including the Compensation Discussion and Analysis and the tabular compensation disclosures and related narrative discussion.
In considering this proposal, we encourage you to review the Compensation Discussion and Analysis (“CD&A”) and the tabular compensation disclosures and accompanying narrative discussion that follow. The CD&A describes our executive officerscompensation philosophy, programs, and objectives, while the tabular compensation disclosures and accompanying narrative discussion provide detailed information on the compensation of our NEOs.
We believe our compensation policies and procedures are competitive, focused on pay-for-performance principles, and strongly aligned with the long-term interests of our stockholders. Our executive compensation philosophy is based on the belief that compensation should be set at levels that enable us to attract and retain employees who are committed to achieving high performance and who demonstrate the ability to do so. We strive to provide executive compensation packages that are driven by Ingevity’s overall financial performance, stockholder value, the success of areas of our business directly impacted by each executive’s performance, and the performance of the individual executive. We view our compensation program as a group beneficially own less than one percentstrategic tool that supports the successful execution of our business strategy and reinforces a performance-based culture. To that end, our executive compensation program emphasizes long-term compensation over short-term compensation, with a significant portion weighted toward equity awards. This approach strongly aligns our executives’ compensation with the interests of our stockholders.
Because your vote is advisory, it will not be binding upon the Board. However, the Board and T&C Committee value stockholders’ opinion as expressed through their votes on this proposal, and will carefully consider the outcome of this proposal in connection with their ongoing evaluation of the Company’s executive compensation program.
An affirmative vote of the majority of the shares of Common Stock outstanding aspresent in person or represented by proxy at the Annual Meeting and entitled to vote on this proposal is required to approve, on an advisory basis, the compensation paid to Ingevity’s NEOs.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ADOPTION OF THIS RESOLUTION TO APPROVE, ON AN ADVISORY BASIS, THE COMPANY’S EXECUTIVE COMPENSATION AS DESCRIBED IN THIS PROXY STATEMENT. |
INGEVITY | 2024 Proxy Statement | 38 |
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of our Common Stock to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and to provide us copies of these reports. Based solely on a review of the copies of these reports
furnished to us and written representations that no other reports were required to be filed, we believe that all filing requirements applicable to our directors and executive officers and beneficial owners of greater than 10% of our Common Stock have been complied with during the fiscal year ended December 31, 2017.
The Compensation Committee has reviewed and discussed the
This section outlines the Company’s executive compensation programs and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference intopractices for our Annual Report on Form 10-K for fiscal 2017.
THE COMPENSATION COMMITTEENEOs, who are listed below.
Frederick J. Lynch, ChairRichard B. KelsonJean S. BlackwellDaniel F. Sansone
INGEVITY - 2018 Proxy Statement - 15
JOHN C. FORTSON | MARY DEAN HALL | STACY L. COZAD | S. EDWARD | RICHARD A. WHITE | ||||
President, Chief | Executive Vice President & | Executive Vice | WOODCOCK | Senior Vice President & | ||||
Executive Officer, | Chief Financial Officer | President, | Executive Vice President & | President, Performance | ||||
and Director | General Counsel and | President, Performance | Chemicals | |||||
Secretary | Materials |
COMPENSATION DISCUSSION AND ANALYSIS
INGEVITY | 2024 Proxy Statement | 39 |
Executive Summary
Our business was significantly impacted by the extreme price volatility during 2023 of CTO, a key raw material used in our Performance Chemicals (“PC”) segment.
We recognize that a rapid transition to alternative raw materials is essential for the long-term growth of our PC segment, and we took decisive action during 2023 to reduce our exposure to the CTO price volatility, including:
■ | Diversifying our feedstocks and focusing on high-margin, high-growth markets, | |
■ | Announcing the closure of our DeRidder, Louisiana, manufacturing site in 2024, which predominately serves lower margin, cyclical markets, | |
■ | Transitioning our Crossett, Arkansas, manufacturing site to produce products derived from alternative feedstocks and enable entry into new markets, and | |
■ | Implementing significant cost savings actions, which helps support the repositioning of our PC Segment. |
We were also impacted by the prolonged industrial slowdown across our many end markets and regions. Despite lower volumes from industrial weakness, our Advanced Polymers Technologies (“APT”) segment delivered double-digit segment EBITDA growth through cost initiatives and lower input costs. We remain focused on improving APT’s profitability and driving caprolactone adoption in bioplastics.
Our Performance Materials (“PM”) segment achieved record results as auto production rebounded close to pre-2020 levels, and consumer preference for hybrid electric vehicles increased. To support PM’s growth, we are developing new activated carbon applications aimed at diversifying our portfolio and expanding into related, large-scale opportunities influenced by significant long-term trends.
Based on our three business segments’ performance and the challenging business conditions noted above, our consolidated sales increased 1% to $1.69 billion while adjusted EBITDA* decreased 12% to $396.8 million.
For additional information on Ingevity’s performance in 2023, see the “Proxy Summary,” above.
The following summarizes the key compensation decisions for our NEOs for fiscal 2023:
Base Salary: The T&C Committee approved increases to the base salaries for Mr. Fortson and Mr. Woodcock of 6% and 8%, respectively, to better align Mr. Fortson with the market median and to recognize Mr. Woodcock’s individual performance and deep industry expertise. None of the other NEOs received base salary adjustments in 2023.
Short-Term Incentive Plan Awards: Based on our 2023 STIP Adjusted EBITDA* and STIP Adjusted Revenue* results, as well as each NEO’s individual performance achievements, the T&C Committee approved STIP payouts to our NEOs ranging from 15% to 84% of target.
2023 Long-Term Incentive Plan Compensation: In February 2023, our NEOs were granted annual long-term incentive awards comprised of 60% in Performance Stock Units (“PSUs”) and 40% in Restricted Stock Units (“RSUs”). The T&C Committee removed stock options as a form of award under our LTIP, resulting in our LTIP equity mix being less dilutive to stockholders and providing a more compelling long-term incentive plan design for executives. PSUs vest after the completion of a three-year performance period, and the number of shares earned, if any, will be based on our three-year average adjusted return on invested capital (“Average ROIC”*) and cumulative earnings per share (“Cumulative EPS”*) performance relative to pre-established targets. In addition, the program includes a Relative Total Shareholder Return (“rTSR”) modifier, pursuant to which the number of shares earned based on our Cumulative EPS* and Average ROIC* performance will be: (i) increased by 15% if our rTSR performance is above the 75th percentile relative to the combined S&P 400 Chemicals Index and the S&P 600 Chemicals Index (together, the “S&P 1000 Chemicals Index”), or (ii) decreased by 15% if our rTSR performance is below the 25th percentile relative to the S&P 1000 Chemicals Index. RSUs vest ratably over a three-year period on the first three anniversaries of the grant date.
2023 PC Transformation Award: Effective May 1, 2023, Mr. White, our PC segment leader, and 34 other members of the PC team were granted a performance-based equity award (the “PC Transformation Award”) to retain, incentivize, and align the awardees to the critical strategic transformation of our PC segment. As noted earlier, the extreme volatility of CTO prices has impacted Ingevity’s business significantly. Rapid transition to a broader based oleochemical product line model is essential for the long-term growth of the PC segment. This will require a unique and significant end-to-end transformational realization in a short timeframe. The PC Transformation Award has a two-year and eight month performance period from May 1, 2023 through June 30, 2025 with
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
INGEVITY | 2024 Proxy Statement | 40 |
the following weighted measures:
■ | 50% Oleochemical /alternative fatty acid product volume (“AFA Product Volume”); and | |
■ | 50% AFA EBITDA Margin (“AFA EBITDA Margin”*) |
The maximum payout under the PC Transformation Award is 100% of the target PSUs.
Payout of 2021 PSU Award: The PSU awards granted in 2021 had Average ROIC* and Cumulative EPS* as the performance metrics for the 2021-2023 performance period. Based on our performance relative to the pre-established targets, the NEOs earned 67% of their target PSUs.
Ingevity’s executive compensation program reflects the Company’s “pay-for-performance” philosophy. Compensation is directly linked to business plans and individual performance, with short- and long-term incentive programs based on metrics tied to the achievement of key financial objectives and individual performance. We are focused on achieving long-term, sustainable stockholder value.
We designed our executive compensation program to attract, motivate, and retain highly talented executives. In setting compensation, the T&C Committee considers both our peer group and national survey data (“Comparative Compensation Data”). We also consider other factors, including each executive’s role and level of responsibility, the importance of the executive’s contributions toward meeting the Company’s goals and objectives, individual performance and experience, internal pay equity, and the economic and business environment in which the Company operates.
The Company’s executive compensation program is designed to deliver stockholder value by appropriately compensating senior leaders for the successful execution of Ingevity’s operating strategy and achievement of its stated performance goals.to:
This Compensation Discussion and Analysis (“CD&A”) discusses the compensation program and the compensation decisions made for fiscal year 2017 with respect to the following Named Executive Officers (“NEOs”):
BUSINESS STRATEGY | PERFORMANCE | PAY COMPETITIVELY | ALIGN NEOS’ AND STOCKHOLDERS’ INTERESTS | DISCOURAGE EXCESSIVE RISK-TAKING |
Mr. Rose left the Company effective January 31, 2017. However, Mr. Rose is an NEO for the 2018 Proxy Statement based on his service to the Company as an executive officer
and the compensation and severance paid to him during fiscal 2017.
2017 Performance Highlights
The Company’s management team faced a broad set of challenges and opportunities in 2017. Having completed the Company’s spin-off from WestRock in the previous year, management successfully focused on : executing the operating plan for the year; improving environmental, health & safety performance and launching the Company’s sustainability initiative; continuing to build out corporate functions such as finance and IT; strengthening relationships with external stakeholders including the investment and capital market communities; navigating difficult market conditions in the Performance Chemicals business; adeptly managing the Performance Materials business to ensure continued innovation and the capacity necessary to meet growing demand; and enhancing employee engagement through the development of “The “IngeviWay,” the articulation of the Company’s core purpose, identity, vision and values.
Management also focused on opportunities to grow the business through M&A, culminating in the agreement to acquire the Georgia-Pacific pine chemicals business announced in August 2017. The Company has since put in place detailed integration plans to ensure a successful merging of the businesses.
All of these strategic initiatives had to be accomplished while at the same time maintaining keen focus on safety, commercial excellence, operations, and continuance of margin enhancement and cost discipline.
Overall, the Company delivered outstanding financial results. Net sales in 2017 were $972.4 million as compared to net sales of $908.3 for the prior year. Adjusted EBITDA in 2017 was $242.7 million which was up from our 2016 Adjusted EBITDA of $202.4 million. Free cash flow of $121.7 million(1) was well ahead of expectations enabling Ingevity to end the year at a reduced leverage of 1.22x.
Additionally, on January 24, 2018, the Company closed on an offering of $300 million unsecured senior notes, priced at 4.5%, with the proceeds intended to be used to finance the Georgia-Pacific acquisition, or, if the transaction does not close, for working capital needs, capital expenditures, other acquisitions and other opportunities to enhance company performance.
For more information regarding the Company’s non-GAAP financial measure Adjusted EBITDA for both fiscal years 2017 and 2016, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Use of Non-GAAP Financial Measures” on page 45 of the 2017 Form 10-K.
See Appendix A for |
INGEVITY | 2024 Proxy Statement | 41 |
16 - INGEVITY - 2018 Proxy Statement
The major elements of our executive compensation program are summarized below.
Base Salary | Fixed cash compensation that recognizes level of responsibilities, contributions towards meeting the Company’s goals and objectives, individual performance and experience, internal pay equity, the economic and business environment in which the Company operates, and other relevant considerations. | Mr. Fortson and Mr. Woodcock were the only NEOs who received base salary adjustments in 2023 of 6% and 8%, respectively, to better align Mr. Fortson with the market median and to recognize Mr. Woodcock’s individual performance and deep industry expertise. None of the other NEOs received base salary adjustments in 2023. | |
Short-term Incentive Plan (“STIP”) | Performance-based cash compensation that rewards achievement of key annual financial performance targets for the full Company (in the case of our corporate leadership--CEO, CFO, GC, and CHRO), and a blend of our full Company and applicable business segment results (in the case of our segment presidents) along with achievement of individual performance goals. | 2023 STIP performance metrics for corporate leadership were Company STIP-Adjusted EBITDA* (50%), Company STIP-Adjusted Revenue* (30%) and Individual Performance (20%). 2023 STIP performance metrics for the business segment leadership were Company STIP-Adjusted EBITDA* (25%), BU STIP-Adjusted EBITDA* (25%), Company STIP-Adjusted Revenue* (15%), BU STIP-Adjusted Revenue* (15%) and Individual Performance (20%). | |
Long-Term Incentive Plan (“LTIP”) | Equity compensation that promotes achievement of long-term strategic objectives and aligns the executives’ interests with stockholder interests. The 2023 LTIP opportunity is allocated as folows: ■ 60% - Performance Stock Units (“PSUs”) ■ 40% - Service-Based Restricted Stock Units (“RSUs”) | 2023 PSU performance metrics are Average ROIC* (30%) and Cumulative EPS* (70%). We added a +/-15% relative total shareholder return (“rTSR”) modifier to enhance alignment with stockholder value. The rTSR modifier increases the LTIP payout if we achieve a greater than 75th percentile rTSR as compared with our chosen S&P indices and decreases the LTIP payout if we are below the 25th percentile as compared with such indices. | |
* | Definitions and reconciliations, if applicable, of the non-GAAP financial measures shown in this column can be found in Appendix A. |
INGEVITY | 2024 Proxy Statement | 42 |
ExecutiveThe mix of compensation elements awarded in 2023 to our CEO, Mr. Fortson, and the other NEOs is illustrated below. The chart reflects base salary and target STIP and LTIP, and does not include “All Other Compensation” shown in the “Summary Compensation PoliciesTable” or the one-time PC Transformation Award to Mr. White described above.
CEO | Other NEOs |
* | Other NEO chart reflects the average pay mix for the other four NEOs. |
The T&C Committee values the input received from our stockholders on the Company’s executive compensation practices. At the 2023 annual stockholders’ meeting, our stockholders approved the compensation of our NEOs on an advisory basis by 93.6% of the votes cast.
Although the vote was non-binding, the T&C Committee considered the approval rate as an indication that Ingevity stockholders support the Company’s executive compensation philosophy and Practices
decisions.
CEO compensation
The BoardT&C Committee, on behalf of Directorsthe Board, is responsible for reviewing and approving the goals and objectives of Ingevity’s CEO, evaluating the CEO’s performance in light of such goals and objectives, and setting the CEO’s compensation based on such evaluation. The T&C Committee meets with the CEO to discuss his performance and compensation and seeks feedback on the CEO’s performance from the full Board and from senior management, including the officers that report to the CEO. Ultimately, decisions regarding the CEO’s compensation are made by the T&C Committee, meeting in executive session, without the CEO or any other executive present. In setting compensation for providing counselthe CEO, the T&C Committee also takes into account other considerations as the committee deems appropriate, including overall leadership and external survey data compiled from our peer group of companies by Pearl Meyer, the T&C Committee’s independent compensation consultant (the “Compensation Consultant”), other Comparative Compensation Data, and the advice of the Compensation Consultant.
INGEVITY | 2024 Proxy Statement | 43 |
Compensation for other executives
The T&C Committee, on behalf of the Board, is also responsible for reviewing and approving the compensation of senior management,executives reporting to the CEO, including the other NEOs. The Compensation Committee’s role is to assistIn approving compensation for the Board in fulfilling its responsibilities with respect to compensationother NEOs, the T&C Committee takes into account the assessment of the Company’s executives and oversight of matters relating to the Company’s equity compensation and employee benefit plans.
The Compensation Committee is supported in its worktheir performance by the Company’s Chief Human Resources OfficerCEO and other memberskey internal stakeholders, addressing such factors as achievement of management. Theindividual goals and objectives, contribution to Ingevity’s performance and corporate goals, and other considerations as the committee deems appropriate, including Comparative Compensation Committee has sole discretion to retainData and obtain the advice of athe Compensation Consultant. In making his recommendations to the T&C Committee, the CEO is also supported by the CHRO.
The T&C Committee has retained Pearl Meyer in that role.the Compensation Consultant as its independent compensation consultant to advise the T&C Committee on the composition of the compensation peer group, specific compensation levels for the NEOs, and whether the compensation program is appropriately designed to discourage excessive risk-taking, among other compensation related services. The Compensation Consultant also compiles the Comparative Compensation Data. The T&C Committee has the sole discretion and is directly responsible for the appointment, termination, compensation, and oversight of the work of Pearl Meyer. the Compensation Consultant.
Although the CompensationT&C Committee retains Pearl Meyerthe Compensation Consultant directly, in carrying out assignments, Pearl Meyerthe Compensation Consultant also interacts with Ingevity management when necessary and appropriate. Specifically, Pearl Meyerthe Compensation Consultant interacts with the Chief Human Resources OfficerCHRO, other leaders in the Company’s human resources organization, and other members of management with respect to compensation and benefits data, best practices, peer group developments, and executive compensation trends. In addition, Pearl Meyerthe Compensation Consultant may in its discretion, seek input and feedback from members of management regarding its consulting work product prior to presentationbefore presenting it to the CompensationT&C Committee for example to confirm its alignment with Ingevity’s business strategy, determine what additional data may need to be gathered,needed, or identify other issues. Pearl Meyer
The T&C Committee regularly meets with the Compensation Consultant in executive session independent of management. Further, the T&C Committee Chair speaks on occasion with the Compensation Consultant on executive compensation matters independently of management.
The Compensation Consultant does not provide any services to Ingevity other than its consulting services to the CompensationT&C Committee related to executive and director compensation. The CompensationT&C Committee determined that, in fiscal 20172023, the work performed for the CompensationT&C Committee by Pearl Meyerthe Compensation Consultant did not raise any conflict of interest. In making
this its determination, the CompensationT&C Committee considered the independence of Pearl Meyer in light ofthe Compensation Consultant considering SEC rules and regulations and NYSE listing standards.
In setting compensation for Company senior executives reporting to the CEO (including the NEOs), the Compensation Committee takes into account the CEO’s assessment
The Compensation Committee meets with the CEO to discuss his own compensation package, but ultimately, decisions regarding the CEO’s compensation are made by the Compensation Committee, meeting in executive session, without the CEO or any other executive present. In setting the compensation for the CEO, the Committee will take into account such factors as overall leadership, company and individual performance as compared to plan and goals, and taking into account such other matters as the Compensation Committee deems appropriate, including Comparative Compensation Data, the advice of and other materials presented by its compensation consultant.
INGEVITY - 2018 Proxy Statement - 17
Peer Group Analysis
Consistent with Ingevity’s goal to provide compensation that remains competitive, the CompensationT&C Committee considers, among other mattersthings, the executive compensation practices of companies in a peer group selected bybased on recommendations from the Compensation Committee based on recommendation of itsConsultant. In selecting the peer group for 2023 executive compensation, consultant. In making its decision, the CompensationT&C Committee considered such factors as: (i) revenue size and profit margins, (ii) industry and business characteristics comparable to Ingevity; (iii) location and geographic reach, including global operations and/or distribution; (iv) competition for talent; and (v) data availability.
i. | revenue size and profit margins; | |
ii. | industry and business characteristics; | |
iii. | location and geographic reach, including global operations and/or distribution; | |
iv. | competition for talent; and | |
v. | data availability. |
The 2017 peer group is identical to the peer group used in 2016. The CompensationT&C Committee generally
targets compensation tocommensurate with the market median withinbased on our Comparative Compensation Data. Compensation decisions also take into account other relevant factors, including an executive’s role and responsibilities, performance, the peer group when determining an NEO’s compensation. However,importance of the Compensation Committee reservesexecutive’s contributions towards meeting the right to use the market data provided by the peer group as one of several reference points useful for determining the formCompany’s goals and amount of compensation. Competitive market data is supplemented with broader general industry survey data.objectives, experience and tenure, internal pay equity, special hiring situations, retention concerns, and other relevant factors.
Below is the peer group from which proxy data was used in the most recent executive compensation study.
INGEVITY | 2024 Proxy Statement | 44 |
The peer group is reviewed periodically for appropriateness and comparability. The T&C Committee most recently reviewed peer group composition in April 2023 with the Compensation Consultant and discussed the peer group companies’ businesses, revenues, and relative performance. Following the T&C Committee’s most recent review, the Committee approved the following peer group with respect to the 2023 executive compensation program.(1)
AdvanSix Inc.* | Innospec Inc. |
Ashland Inc.* | Koppers Holdings Inc.* |
Avient Corp.* | Mativ Holdings, Inc.* |
Balchem Corp. | Minerals Technologies Inc. |
Cabot Corp. | Orion S.A.* |
Ecovyst Inc. | Quaker Chemical Corp. |
Element Solutions Inc* | Sensient Technologies Corp. |
H.B. Fuller Co. | Stepan Co. |
Hexcel Corp. | Tronox Holdings |
* | Newly added in 2023 and will be used to evaluate 2024 NEO compensation. | |
(1) | The T&C Committee excluded the following companies that were part of the Company’s 2022 peer group: CMC Materials, Ferro Corp, and GCP Applied Technologies, Inc. | |
Our
When taken as a whole, along with the best interestsother elements of our shareholders. Incentive programs are aligned with key financial metrics and individual performance measurements to ensure that our executives are all striving toward the same business goals in a unified and coordinated manner.
We designed our executive compensation program, to attract, motivate and retain highly-talented executives. It isthe pay elements described below are intended to provide market competitivea level of compensation as determined by using both our peer groupsufficient to attract and national market survey data and considers other relevant factors such as individual performance, internal equity and experience. To accomplish this, our program is meant to:
18 - INGEVITY - 2018 Proxy Statement
Compensation Practices and Policies
What We Do
What We Don’t Do
Pay Elements:oversight.
Base salaries are designed to provide a stable source of income for our executive officers.
Short-term Incentive Plan (STIP)
Funding of the STIP is exclusively based on the Company meeting its pre-established financial performance targets. Funding runs between 50 percent to 200 percent of the STIP target incentive potential. If the Company does not meet the threshold target values the plan is not funded. If the Company meets or exceeds the maximum target values the plan is funded at 200 percent.
NEO individual awards are based initially on Ingevity’s attainment of STIP-Adjusted EBITDA target and influenced by
individual performance against individual goals. No payout occurs if Ingevity’s actual performance is below the threshold performance level.
Long-term incentive Plan (LTIP)
Long-term incentive awards are earned based on a limited number of key performance metrics that have been selected to ensure long-term value creation aligned with the long-term interests of our stockholders. It recognizes an executive’s recent performance and potential future contributions and provides a total compensation opportunity with payouts based on actual performance relative to pre-established financial performance targets. Fifty percent of our long-term incentive compensation is comprised of performance based restricted stock units (“PSUs”). The value of these awards is earned only after a threshold level of performance is achieved and maximum payout is capped at 200 percent. The other 50 percent is delivered through service-based restricted stock units (“RSUs”) and non-qualified stock options.
Additional Elements of Executive Compensation
Executives generally participate in the same benefit plans as other Ingevity employees. These are described on page 25 under “Benefits and Perquisites”. Where IRS rules limit the ability of executives to participate at the same level as other employees, they may participate in a non-qualified plan which is described more fully on page 31. We do not offer a defined benefit pension plan. However, the Company maintains a Retirement Restoration Plan that mirrors benefits provided under a qualified defined benefit plan sponsored and maintained by our former parent company, WestRock (the “WestRock Pension Plan”). The Retirement Restoration Plan is a non-qualified plan that was adopted by the Company to honor historical WestRock obligations under an Employee Matters Agreement between WestRock and the Company as part of the Separation. The plan was frozen at the time of the Separation, and none of our NEOs currently accrue a benefit under this plan. Our benefits programs are intended to be competitive with market practice.
Our perquisites program is limited and designed to promote the security and wellbeing of our executives thereby allowing them to focus on company business. Our perquisites include financial counseling and executive physicals. The value of the financial counseling is credited to the NEO as imputed income. There is no tax gross-up.
Pay Mix
Over 50 percent of our NEOs’ total direct compensation is performance based as shown in the charts below. Performance-based compensation is delivered in a combination of performance-based cash, stock options and performance-based restricted stock.
INGEVITY - 2018 Proxy Statement - 19
Pay Mix
The charts below illustrate the target total direct compensation for 2017 for Mr. Wilson and the average of the other NEOs.
A significant portion (71%) of Mr. Wilson’s total direct compensation is performance-based compensation and is delivered in a combination of performance-based cash, stock options and performance-based restricted stock units
(“PSUs”). Similarly, (62%) of the average of the NEOs’ total direct compensation is delivered through performance-based compensation.
Say-on-Pay Vote
At last year’s annual meeting, more than 96% of votes cast were in favor of the advisory vote to approve our executive compensation. The Compensation Committee and Ingevity
management have taken these results into consideration by continuing to emphasize the performance-based elements of our compensation program.
2017 Base Salary
Base salaries are intended to provide a level of fixed compensation sufficient to attract and retain an effective management team when considered in combination with the long-term and short-term incentive awards and other elements of our executive compensation program. The relative levels of base salary for executive officers are designed to reflect each executive officer’s scope of responsibility, experience and performance, competitive pay levels, market trends, economic conditions, and other relevant factors.
The T&C Committee generally reviews and approves base salaries annually in February, with new salaries effective as of February 1 of the same year. The T&C Committee may make other salary increases, accountability within Ingevity and economic factors. Baseadjustments periodically in connection with promotions or changes in role or responsibilities, to reward individual performance, for reasons related to retention, or to ensure market competitiveness. The committee’s review focuses on whether base salaries are reviewed annually to determine if they are equitably aligned within Ingevity and are at sufficientsufficiently competitive levels to attract and retain top talent. In 2016, ouraddition, consideration is given to Comparative Compensation Data and such other factors as the T&C Committee considers appropriate. The T&C Committee also reviews base salary compensation with the Compensation Consultant.
INGEVITY | 2024 Proxy Statement | 45 |
Our CEO’s base salary was 91% ofincreased to align his pay more closely to the market median and our NEOs’ base salaries ranged from 74% to 106% of the market medianCEO pay based on our peer group and survey data. Comparative Compensation Data. Mr. Woodcock’s salary was increased in acknowledgement of his extensive tenure in the role and deep industry expertise. All other NEO base salaries were unchanged from 2022.
The following chart showsfull-year base
salary increases salaries for 2017. Mr. Smith’s increase isour NEOs in connection with his promotion in February 2017 to Executive Vice President, and President of Performance Chemicals and Business Development. The following table shows base salary for each NEO at December 31, 2017:2023 were as follows:
NEO | Percentage Increase | 2017 Annual Base Salary ($) | ||||
D. Michael Wilson | 6.3 | % | 850,000 | |||
John C. Fortson | 3.2 | % | 490,000 | |||
Katherine P. Burgeson | 9.1 | % | 360,000 | |||
Michael P. Smith | 23.0 | % | 375,000 | |||
S. Edward Woodcock | 9.1 | % | 300,000 |
20 - INGEVITY - 2018 Proxy Statement
NEO | 2023 Annual Base Salary ($) | 2022 Annual Base Salary ($) | % Change | ||
John C. Fortson | 1,000,000 | 940,000 | 6.0% | ||
Mary Dean Hall | 510,000 | 510,000 | 0.0% | ||
Stacy L. Cozad | 470,000 | 470,000 | 0.0% | ||
S. Edward Woodcock | 475,000 | 435,000 | 8.4% | ||
Richard A. White(1) | 460,000 | 460,000 | 0.0% |
(1) | Mr. White’s 2022 annual base salary was set at $380,000 effective January 1, 2022 and was increased to $460,000 effective November 1, 2022. |
2017 Short-Term Incentive Plan
(“STIP”)
and 2023 awards
Ingevity’s STIP consists of an annual cash incentive that is designed to motivate and reward participants including NEOs, for achieving Ingevity’s annual financial operationalperformance targets and strategic goals, through cash incentives. their individual performance goals.
The incentive award range that aneach NEO may earn is determined atnear the beginning of the year and expressed as a percentage of such NEO’s base salary. STIP payouts may never exceed 200% of base salary.
For 2023, the amount paid is based onT&C Committee established the actual results achieved for the year.
The 2017 annual incentive program was funded based on Ingevity’s achievement of a quantifiably predetermined financial target based on STIP adjusted earnings before interest, taxes, depreciation and amortization (“STIP-Adjusted EBITDA”), with adjusted payouts forfollowing threshold,
target, and maximum performance notSTIP incentive opportunities for the NEOs:
NEO | Threshold (as a percentage of base salary)* | Target (as a percentage of base salary)* | Maximum (as a percentage of base salary)* | |||
Mr. Fortson | 25.0% | 100% | 200% | |||
Ms. Hall | 17.5% | 70% | 140% | |||
Ms. Cozad | 16.25% | 65% | 130% | |||
Mr. Woodcock | 16.25% | 65% | 130% | |||
Mr. White | 15.0% | 60% | 120% |
* | Linear interpolation is used to determine awards for performance between the threshold, target, and maximum goals. |
The T&C Committee selected the following metrics as the basis for 2023 STIP because the committee believes they are important and effective measures of short-term performance. The T&C Committee continued to exceed 200%emphasize individual accountability with the inclusion of target. For additional information concerning the STIP-Adjusted EBITDA calculation, including a reconciliation of such numbers to GAAP, please see Appendix A. Individual awards are based initially on Ingevity’s attainment of this STIP-Adjusted EBITDA goal and also influenced by20% individual performance againstcomponent to STIP, which considers an individual’s success in meeting Company and individual short-term goals. No payout occurs if Ingevity’s actual STIP-Adjusted EBITDA performance is below the threshold performance level. Threshold performance is set at 92% of target. There is no payout if performance falls below 92% of target.
The weighting and actual performance of each target measure is described in the table below:
Company-Wide Metrics | Segment Metrics | Individual Performance | ||||||||
NEO | STIP-Adjusted EBITDA* | STIP-Adjusted Revenue* | BU STIP-Adjusted EBITDA* | BU STIP-Adjusted Revenue* | ||||||
Mr. Fortson | 50% | 30% | 0% | 0% | 20% | |||||
Ms. Hall | 50% | 30% | 0% | 0% | 20% | |||||
Ms. Cozad | 50% | 30% | 0% | 0% | 20% | |||||
Mr. Woodcock (Performance Materials Segment) | 25% | 15% | 25% | 15% | 20% | |||||
Mr. White (Performance Chemicals Segment) | 25% | 15% | 25% | 15% | 20% |
See Appendix A for |
In 2023, the Company moved its engineered polymers business line from the Performance Chemicals segment into its own segment designated as Advanced Polymer Technologies. The Compensationperformance targets for the Performance Chemicals segment reflect this change. At the time the T&C Committee approvedset the following target short-term incentive awardsperformance levels for 2017:
Annual Short Term Incentive Award Targets (as percent of base salary) | ||||||||||||
Threshold | Target(1) | Maximum | Actual 2017 Payout | |||||||||
Mr. Wilson | 50 | % | 100 | % | 200 | % | 200 | % | ||||
Mr. Fortson | 35 | % | 70 | % | 140 | % | 140 | % | ||||
Ms. Burgeson | 25 | % | 50 | % | 100 | % | 100 | % | ||||
Mr. Smith | 27.5 | % | 55 | % | 110 | % | 110 | % | ||||
Mr. Woodcock | 27.5 | % | 55 | % | 110 | % | 110 | % |
Actual STIP-Adjusted EBITDAthe Company and each business unit, the goals were believed to be challenging but achievable, and the maximum level of performance was believed to be achievable but only with exceptional performance. During 2023, the Performance Chemicals segment was impacted by the unprecedented and material regulatory-driven cost increase to CTO, a key raw material for 2017 was calculated utilizing Ingevity’s publishedits industrial specialties product line. The dramatic cost increase caused a disproportionately negative impact to Performance Chemicals’ and corporate financial statements except thatresults. The terms of the CompensationSTIP permit the T&C Committee may adjust such calculationsto make certain discretionary adjustments to exclude the effect of certain non-recurring items of gain or loss.loss, or other adjustments reflecting substantial out of the ordinary matters.
The Compensation2023 STIP targets and actual performance and payouts are set forth below.
Company STIP-Adjusted EBITDA* | Company STIP-Adjusted Revenue* | |||||||||||||||
Performance Level | Payout Range (% of target award) | Goals(1) | Actual Performance | % of Target Achieved/ Payout | Goals(1) | Actual Performance(1) | % of Target Achieved/ Payout | |||||||||
Threshold** | 25% | $ | 405.0 | $ 398.3 | 0.0% | $ | 1,690.0 | $ 1,688.2 | 0.0% | |||||||
Target | 100% | $ | 500.0 | $ | 1,937.0 | |||||||||||
Maximum | 200% | $ | 600.0 | $ | 2,173.0 | |||||||||||
Performance Chemicals BU STIP-Adjusted EBITDA* | Performance Chemicals BU STIP-Adjusted Revenue* | |||||||||||||||
Performance Level | Payout Range (% of target award) | Goals(1) | Actual Performance(1) | % of Target Achieved/ Payout | Goals(1) | Actual Performance(1) | % of Target Achieved/ Payout | |||||||||
Threshold** | 25% | $ | 130.0 | $ 64.9 | 0.0% | $ | 940.0 | $ 900.9 | 0.0% | |||||||
Target | 100% | $ | 170.0 | $ | 1,067.0 | |||||||||||
Maximum | 200% | $ | 230.0 | $ | 1,213.0 |
(1) | Amounts expressed in millions |
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
** | No payout is earned on a metric if results are below threshold. |
INGEVITY | 2024 Proxy Statement | 47 |
Performance Materials BU STIP-Adjusted EBITDA* | Performance Materials BU STIP-Adjusted Revenue* | |||||||||||||||||
Performance Level | Payout Range (% of target award) | Goals(1) | Actual Performance | % of Target Achieved/ Payout | Goals(1) | Actual Performance | % of Target Achieved/ Payout | |||||||||||
Threshold** | 25% | $ | 240.0 | $ | 288.8 | 162.5% | $ | 530.0 | $ | 586.0 | 90.0% | |||||||
Target | 100% | $ | 275.0 | $ | 595.0 | |||||||||||||
Maximum | 200% | $ | 300.0 | $ | 650.0 |
* | See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
** | No payout is earned on a metric if results are below threshold. |
(1) | Amounts expressed in millions |
Individual performance
Performance goals are typically established near the beginning of the year and generally include both leadership objectives and strategic business objectives. Individual NEO performance is evaluated by the T&C Committee believes STIP-Adjusted EBITDA is an appropriateby comparing actual performance to the pre-established individual goals, as well as by considering individual accomplishments and effective measureother relevant performance criteria.
Against the challenging backdrop of Ingevity’s overall short-term performance. The threshold level of performance was set at 92 percent of target, which was at the 2016 STIP target level. At the time the Compensation Committee determined the target level of performance, the goal was believed to be high, but obtainable. The maximum level of performance was2023, and based on 108% of target and was believed to be realizable, but only with exceptional performance.
In determiningindividual achievements against their goals, the T&C Committee approved STIP funding for the individual performance elementcomponent of the NEOs STIP awards ranging from 75% to 150% of target. A description of each NEO’s short-term incentive payment for 2017, the Compensation Committee considered the followingindividual performance achievements with respect to 2023 is set forth below under “NEO Performance and Compensation Decisions.”
2023 STIP Payouts
STIP payouts for our NEOs were as compared to the individual’s 2017 goals:follows:
D. Michael Wilson, CEO and President. Mr. Wilson’s accomplishments during the year included:
NEO | STIP | 2023 Target(1) | Company STIP- Adjusted EBITDA Funding(2) | BU STIP- Adjusted EBITDA Funding(2) | Company STIP- Adjusted Revenue Funding(2) | BU STIP- Adjusted Revenue Funding(2) | Total 2023 STIP Payout for Financial Metrics(2),(3) | Individual Performance Funding | Total 2023 STIP Payout, Reflecting Financial and Individual Performance Metrics(3) | Total 2023 STIP Payout(4) | |||||||||||
Mr. Fortson | $ | 995,000 | 0.0% | 0.0% | 0.0% | 85.0% | 17.0% | $ | 169,150 | ||||||||||||
Ms. Hall | $ | 357,000 | 0.0% | 0.0% | 0.0% | 100.0% | 20.0% | $ | 71,400 | ||||||||||||
Ms. Cozad | $ | 305,500 | 0.0% | 0.0% | 0.0% | 100.0% | 20.0% | $ | 61,100 | ||||||||||||
Mr. Woodcock | $ | 306,584 | 0.0% | 162.5% | 0.0% | 90.0% | 67.6% | 150.0% | 84.1% | $ | 257,780 | ||||||||||
Mr. White | $ | 276,000 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 75.0% | 15.0% | $ | 41,400 |
(1) | Target represents the target STIP opportunity percentage for each NEO described above multiplied by the amount of salary paid in 2023. |
(2) | Percentages reported are equal to the percentage of target achieved for each metric (as shown in the table above). See Appendix A for definitions and reconciliations of these non-GAAP financial measures to the nearest GAAP measures. |
(3) | Total 2023 STIP Payout, Reflecting Financial and Individual Performance Metric presents the total 2023 STIP payout percentage for each NEO after weighting the financial metrics percentage at 80% and the individual performance metric at 20%. |
(4) | To obtain “Total 2023 STIP Payout,” multiply “2023 STIP Target” by “Total 2023 STIP Payout, Reflecting Financial and Individual Performance Metrics.” Calculated scores are rounded up to the nearest $10. |
INGEVITY - 2018 Proxy Statement - 21
John C. Fortson, EVP, CFO & Treasurer. Mr. Fortson’s accomplishments during the year included:
Katherine P. Burgeson, EVP, General Counsel & Secretary. Ms. Burgeson’s accomplishments during the year included:
Michael P. Smith, EVP & President Performance Chemicals,Strategy and Business Development. Mr. Smith’s accomplishments during the year included:
S. Edward Woodcock, EVP & President Performance Materials. Mr. Woodcock’s accomplishments during the year included:
22 - INGEVITY - 2018 Proxy Statement
Long-Term Incentive Plan
(“LTIP”)
and 2023 awards
Equity-based awardsIngevity’s LTIP is designed to recognize the performance of our executives who drive the development and execution of our long-term business strategies and goals. The primary purposes of theseThese awards are designed to further align further the executive’s interestexecutives’ interests with those of Ingevity’s stockholders, and with Ingevity’s longer-term objectives, to drivereward executives for stockholder return, tovalue creation, maintain the competitiveness of our total compensation packages, foster executive stock ownership, and to promote retention. The Compensation Committee also considers peer group data for a general understanding of industry equity practices as well as equity plan share usage and dilution and company expense.
When making LTIP awards are granted under the Compensation2016 Omnibus Incentive Plan, as amended (the “Omnibus Plan”), which provides for, among other things, “double trigger” vesting of any LTIP awards that qualify as replacement awards in connection with a change of control, as described under the heading “Severance Arrangements.”
INGEVITY | 2024 Proxy Statement | 48 |
For 2023, the awards granted annually under the Company’s LTIP were delivered in two forms, as described below.
Type of Award | Percentage of Total LTIP Opportunity | Vesting and Payment Terms | ||
PSUs | 60% | PSUs vest upon certification by the T&C Committee of the achievement of certain pre-determined performance targets over a three-year performance period, provided the recipient meets the requisite terms, including continued service. Payouts depend on the level of achievement of the performance targets set by the T&C Committee for the related three-year performance period. PSU payouts may be modified +/-15% by the Company’s rTSR performance. The performance metrics and targets and the rTSR modifier are described below. | ||
RSUs | 40% | RSUs granted for the annual LTIP opportunity vest ratably in three annual increments beginning on the first anniversary of the grant date, provided the recipient meets the terms, including continued service. |
The T&C Committee first determinesremoved options as a form of award under our LTIP for 2023 and reallocated the total grant daterespective LTIP compensation value between PSUs and RSUs. The result is a plan that is less dilutive to stockholders and more compelling for attracting, retaining, and motivating executives while also rewarding business outcomes aligned to the stockholder experience. The T&C Committee believes that the current LTIP equity allocation provides a good balance of performance and retention oriented elements.
The target values of individual NEO awards are expressed as a percentage of base compensation and are set early each year by the T&C Committee. The number of RSUs and PSUs awarded is based on the closing price of the awardCompany’s Common Stock on the grant date.
Each NEO’s 2023 total LTIP opportunity prior to application of the rTSR modifier and then delivers that value in three components: PSUs to deliver an estimated 50%the breakdown of each NEO’s long-term incentive award, with the remaining portion to be delivered in the form of non-qualified stock options (25%) and service-based RSUs (25%).LTIP components are shown below.
Performance-Based
NEO | Base Salary | Target LTIP Opportunity | RSUs (40%) | PSUs at Target* (60%) | ||||||||||||
Mr. Fortson | $ | 1,000,000 | 400% | $ | 1,600,000 | $ | 2,400,000 | |||||||||
Ms. Hall | $ | 510,000 | 200% | $ | 408,000 | $ | 612,000 | |||||||||
Ms. Cozad | $ | 470,000 | 165% | $ | 310,200 | $ | 465,300 | |||||||||
Mr. Woodcock | $ | 475,000 | 150% | $ | 285,000 | $ | 427,500 | |||||||||
Mr. White | $ | 460,000 | 150% | $ | 276,000 | $ | 414,000 |
* | PSUs are shown at target but may pay out from 0-230% based on performance and positive application of the rTSR modifier (as further described below) is the only circumstance under which PSUs may pay out in excess of 200%. See “Performance-Based Restricted Stock Units” for more information. |
The PSUsfollowing performance metrics apply with respect to the PSU awards granted in 2017 vest on December 31, 2019. The number of shares delivered will be determined based on the Company’s financial performance relative to pre-established financial targets based on fiscal 20192023:
70% - Adjusted three-year cumulative earnings per share (“Cumulative EPS”*); and
30% - Average adjusted return on invested capital (ROIC)(“Average ROIC”*).
Actual PSUs earned are subject to the rTSR modifier based on the percentile ranking of our TSR over the three-year performance period relative to that of the companies comprising the S&P 1000 Chemicals Index. The rTSR modifier increases the PSU payout by 15% if we achieve a greater than 75th percentile rTSR as compared with the S&P 1000 Chemicals Index, and cumulative earnings per share duringdecreases the period beginning January 1, 2017PSU payout by 15% if we are below the 25th percentile as compared with the S&P 1000 Chemicals Index. The rTSR modifier is not interpolated for performance between the 25th and ending December 31, 2019,75th percentiles. The rTSR modifier is intended to emphasize the importance of maximizing stockholder returns while moderating payouts when financial metrics are achieved but the Company underperforms the market.
The T&C Committee, in consultation with adjusted payoutsthe Compensation Consultant, believes that the performance metrics of Cumulative EPS and Average ROIC*, together with the rTSR modifier, closely align executives’ interests with those of our stockholders and incentivizes long-term value creation.
* | See Appendix A for definitions and reconciliations, if applicable, of these non-GAAP financial measures to the nearest GAAP measures. |
INGEVITY | 2024 Proxy Statement | 49 |
The T&C Committee established threshold, target, and maximum performance nottargets for the three-year performance period from January 1, 2023, through December 31, 2025, with respect to exceed 200%each metric. At the time the performance levels were set, the target level of target, as determined byperformance was believed to be challenging but achievable, and the Compensationmaximum level was believed to be achievable, but only with exceptional performance. The 2023 PSU awards will vest (or not) after the T&C Committee certifies Ingevity’s performance at the end of the performance period.
There is no payout for performance below threshold. Payout at threshold is at 25% of PSUs granted, at target is 100% of PSUs granted, and at maximum is 200% of PSUs granted. Linear interpolation is used to determine award payouts between these pre-determined points. Payout of PSUs based on performance against the metrics for the performance period is then subject to the rTSR modifier described above. The Compensationapplication of the rTSR modifier could result in payment below 25% of PSUs granted at threshold performance or up to 230% of PSUs granted at maximum performance.
Under the Omnibus Plan, the T&C Committee may adjust the return on invested capital and cumulative earnings per shareresults for PSU metrics from time to time to exclude the effect of certain non-recurring items of gain or loss. No vestingloss or other significant out of the ordinary matters (such as mergers, acquisitions, and dispositions; entry into joint ventures; significant restructurings; or changes in accounting rules or tax codes) if they had not been factored in when performance targets were established. Any such adjustments are made to ensure that executives are neither unduly rewarded nor penalized for successfully implementing Board-approved strategic initiatives, or as a result of external events that were unforeseen or outside their control.
In April 2023, Mr. White was granted, along with 34 other members of the PC team, a performance-based equity award (the “PC Transformation Award”) to reward and align the awardees to the strategic transformation of our PC segment. The volatility of CTO pricing has impacted Ingevity’s business significantly. Rapid transition to a broader based oleochemical product line model is essential for the long-term growth of the PC segment. This will occur if Ingevity’s actual performancerequire a unique and significant end-to-end transformational realization in a short time-frame by key members of the PC team. To appropriately incentivize and reward this critical segment transformation, the T&C Committee granted a performance-based equity award opportunity that is belowintended to attract and retain key business, technical, and operational employees and incentivize them to effect the threshold levels.
In 2017 NEOs were grantedrequired transformation and drive behaviors aligned with meeting the following 2017-2019 PSU opportunity:extraordinary challenge.
2017-2019 PSU Targets (as percent of base salary) | |||||||||
Minimum | Target(1) | Maximum | |||||||
Mr. Wilson | 0 | % | 125 | % | 250 | % | |||
Mr. Fortson | 0 | % | 87.5 | % | 175 | % | |||
Ms. Burgeson | 0 | % | 42.5 | % | 85 | % | |||
Mr. Smith | 0 | % | 40 | % | 80 | % | |||
Mr. Woodcock | 0 | % | 40 | % | 80 | % |
Mr. White received a PC Transformation Award effective May 1, 2023 of 13,969 PSUs, with a grant date fair value of $1,000,041. The Compensationmaximum payout under the PC Transformation Award is 100% of the target PSUs. The T&C Committee believes that returnMr. White is critical to the success of the business transformation initiative as the leader of the PC segment, and that his PC Transformation Award is an appropriate acknowledgement of the significant challenge involved in driving both volume growth and margin in the new oleochecmical product line across new markets in a condensed window of time.
The PC Transformation Award has a two-year and eight month performance period from May 1, 2023 through June 30,2025, and is based on invested capitalthe following performance metrics with respect to Mr. White’s grant:
50% - Oleochemical/alternative fatty acid product volume (“AFA Product Volume”); and cumulative earnings per share
50% - AFA EBITDA Margin (“AFA EBITDA Margin”*).
* | See Appendix A for definitions and reconciliations, if applicable, of these non-GAAP financial measures to the nearest GAAP measures. |
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The T&C Committee established challenging goals for each of the performance metrics so that only extraordinary results will result in a payout. The T&C Committee will certify performance results for the established metrics and, if the committee determines that any PSUs are appropriateearned as a result, the earned PSUs will vest (if at all) one year from the date that the performance is certified, provided that the awardee continues to be employed by the Company through the vesting date. Note that, if the threshold metrics are met sooner than the end of the performance period, the T&C Committee may certify the results at such time.
The PC Transformation Award grant to Mr. White, which is detailed above, is included in the “Summary Compensation Table” and effective measuresthe “Grant of Ingevity’s overallPlan-Based Awards in 2023” table.
The PSU awards granted in 2021 (“2021 PSU Awards”) had Average ROIC* and Cumulative EPS* as the performance targets for the related 2021-2023 performance period. The performance targets for these grants were established in the beginning of 2021, reflecting the long-term performance. goals in place at that time, and were recalculated in 2023 to incorporate the financial impact of significant one-time acquisitions and strategic investments occurring during the performance period that were not contemplated in the previously approved 2021 PSU Awards plan. This recalculation increased the target, threshold, and maximum performance goals required to result in a payout.
The T&C Committee approved payment to the NEOs of the 2021 PSU Awards, based upon the achievement of Average ROIC* and Cumulative EPS* performance goals at or around the threshold level of performance was setfor Cumulative EPS* and at 50% of target and was, at the time it was established, believed to be an achievable goal. At the time the Compensation Committee determinedor around the target level for Average ROIC*. As a result, these PSUs were paid at 67% of the target amount.
Actual performance, as certified by the goal was believed to be aggressive, but obtainable. T&C Committee is reflected below:
Metric | Threshold | Target | Maximum | Actual Performance | Payout | |||||
Cumulative EPS* 50% | $15.05 | $16.73 | $18.06 | $15.11 | 67% | |||||
Average ROIC* 50% | 9.4% | 12.4% | 13.1% | 12.5% |
* | See Appendix A for more details on the calculation of actual performance on the Cumulative EPS and Average ROIC. |
The maximum level of performance was setpayment calculation for the 2021 PSU Awards that settled in February 2024 is shown below:
NEO | Target PSUs | Percentage Payable | PSUs Payable* | |||
Mr. Fortson | 17,811 | 67% | 11,934 | |||
Ms. Hall | 2,324 | 67% | 1,558 | |||
Ms. Cozad | 3,973 | 67% | 2,662 | |||
Mr. Woodcock | 3,824 | 67% | 2,563 | |||
Mr. White | 1,260 | 67% | 845 |
* | The Company does not issue fractional shares. Any fractional amount of PSUs are paid out to the next whole share. |
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The T&C Committee generally targets executive compensation commensurate with the market median based on 200%our Comparative Compensation Data. For this reason, Mr. Fortson’s base salary was raised 6% and his LTIP target increased from 300% to 400% of targethis base salary in 2023. The T&C Committee set Mr. Fortson’s compensation using the pay elements described below to strike a balance between providing competitive compensation to Mr. Fortson and aligning his pay with stockholder interests and the stockholder experience.
Mr. Fortson’s total compensation package for 2023 includes a mix of long- and short-term variable pay elements that put 84% of his compensation at risk. These pay elements create a compensation structure that ensures a high correlation between ultimate payouts and individual and business performance. In 2023, approximately 68% of Mr. Fortson’s realized pay was believed to be realizable, but only with exceptional performance.
Restricted Stock Units (“RSUs”). We grant a portion of our awards under the LTIPdelivered in the form of service-based RSUslong-term incentives, which strongly aligns his compensation to stockholder interests.
A significant portion of Mr. Fortson’s target direct compensation is comprised of potential pay that could be realized in future years, depending on our performance against pre-established metrics. Due to this variable element, the T&C Committee finds it instructive to review Mr. Fortson’s realized pay against his target compensation to ensure that pay is appropriately aligned with performance and stockholder value creation. Realized pay is comprised of actual pay earned, including base salary and STIP payouts, plus the value of stock awards that vested, and options that were exercised, during the period.
The chart below shows that Mr. Fortson’s realized pay in 2023 was approximately 60 percent of his target direct compensation, which illustrates how the “at-risk” nature of a substantial portion of his compensation strongly aligns with Company performance.
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A description of the grant date.performance highlights for 2023 of each NEO and related compensation decisions is set forth below.
Stock Options. We grant
John C. FORTSON, President, Chief Executive Officer, and Director | ||
Age: 56 | ■ Delivered full-year revenue of $1.69B and EBITDA* of $397M, which were both ahead of market estimates ■ Increased sales by 1.4% year over year despite the difficult economic landscape in 2023, including achievement of record results in Performance Materials and Road Technologies ■ Took decisive action to mitigate the impact of unfavorable market conditions by implementing global cost containment strategies ■ Led the strategy transformation efforts to guide the Company in the identification of future growth paths for each business segment ■ Spearheaded Company-wide adoption of a new safety initiative that resulted in a substantial increase in safety hazard identification and near miss reporting ■ Finalized capacity expansion at the Company’s plant in Warrington, UK to deliver significantly more polyol capacity to fuel future growth ■ Drove the Company to place in the 91st percentile among our industry peers in the 2023 S&P Global Corporate Sustainability Assessment ranking | |
Base Salary: Mr. Fortson’s base salary increased 6.0% to $1,000,000 STIP: Mr. Fortson received a STIP award of $169,150, representing a 17% payout against target. Mr. Fortson’s STIP target remained at 100% of base salary for fiscal year 2023 LTIP: Mr. Fortson’s LTIP target increased from 300% to 400% of base salary for fiscal year 2023 |
*See Appendix A for definitions and reconciliations, if applicable, of these non-GAAP financial measures to the nearest GAAP measures.
Mary Dean HALL, Executive Vice President & Chief Financial Officer | ||
Age: 67 | ■ Led the realignment of the Company’s segment reporting structure to move engineered polymers into its own reportable segment, Advanced Polymer Technologies, increasing transparency into how segment operating performance is measured for investors ■ Oversaw the successful completion of the SAP S/4 migration across the Company on schedule and under budget with minimal business disruption ■ Led timely comprehensive and rigorous cost-savings financial analysis, ensuring the ability of management to make sound decisions regarding the business transformation and cost mitigation efforts ■ Redesigned the supply chain function to leverage global footprint and successfully drove significant cost savings initiatives and process efficiency ■ Enhanced risk identification and management processes by implementing a co-sourcing model for internal audit, adding experienced staff, and integrating risk management processes across the Company into a holistic risk management framework, including cybersecurity and enterprise risk management | |
Base Salary: Ms. Hall’s base salary remained at $510,000 STIP: Ms. Hall received a STIP award of $71,400, representing a 20% payout against target. Ms. Hall’s STIP target remained at 70% of base/salary for fiscal year 2023 LTIP: Ms. Hall’s LTIP target increased from 160% to 200% of base salary for fiscal year 2023 |
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Stacy L. COZAD, Executive Vice President, General Counsel and Secretary | ||
Age: 53 | ■ Led improvements in the areas of intellectual property protection and data privacy ■ Oversaw legal, compliance, and government affairs efforts to successfully navigate the restructuring of Performance Chemicals ■ Matured the Company’s ethics and compliance program ■ Ensured strong regulatory advocacy strategies for key opportunities across all three business segments ■ Drove re-envisioning of the Company’s sustainability strategy, including concentrating efforts on customer-focused innovation | |
Base Salary: Ms. Cozad’s base salary remained at $470,000 STIP: Ms. Cozad received a STIP award of $61,100, representing a 20% payout against target. Ms. Cozad’s STIP target remained at 65% of base salary for fiscal year 2023 LTIP: Ms. Cozad’s LTIP target increased from 130% to 165% of base salary for fiscal year 2023 |
S. Edward WOODCOCK, Executive Vice President and President, Performance Materials | ||
Age: 58 | ■ Delivered record financial results despite significant market volatility ■ Oversaw the business segment with the lowest total case incident rate (TCIR) level across the Company’s U.S. locations, demonstrating an excellence in safety culture ■ Advanced the path to successful commercialization of the Nexeon alternative carbon use diversification opportunity ■ Delivered significant annual cost savings by transitioning the U.S. Performance Materials warehouse operations to a new in-house operating model ■ Developed opportunities and broadened sustainability benefits for NeuFuel™ by partnering with American CNG and school districts nation-wide to outfit school bus fleets with technology that enables diesel vehicles to run on natural gas to reduce fleet GHG emissions and operating costs | |
Base Salary: Mr. Woodcock’s base salary increased 8.4% to $475,000 STIP: Mr. Woodcock received a STIP award of $257,780, representing an 84.1% payout against target. Mr. Woodcock’s STIP target remained at 65% of base salary for fiscal year 2023 LTIP: Mr. Woodcock’s LTIP target increased from 130% to 150% of base salary for fiscal year 2023 |
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Richard A. WHITE, Senior Vice President, and President, Performance Chemicals | ||
Age: 61 | ■ Drove record financial performance for Road Technologies business ■ Navigated the Performance Chemicals segment through a challenging year and outlined a path to transform the segment and position it for future growth ■ Oversaw the successful transformation of the Crossett, Arkansas plant from production of CTO-based products to production of oleochemical-based products ■ Led the integration of Ozark Materials and Ozark Logistics into the Ingevity core business | |
Base Salary: Mr. White’s base salary was remained at $460,000 STIP: Mr. White received a STIP award of $41,400, representing a 15% payout against target. Mr. White’s STIP target remained at 60% of base salary for fiscal year 2023 LTIP: Mr. White’s LTIP target increased from 100% to 150% of base salary for fiscal year 2023. In addition, Mr. White received the one-time PC Transformation Award (see “PC Transformation Award” described above). |
The Company has entered into an offer letter with each of the following NEOs regarding employment terms (“Offer Letters”): Mr. Fortson, Ms. Hall, Ms. Cozad, and Mr. White. The Offer Letters generally list the compensation arrangements for the applicable NEO, including the STIP and LTIP details, details regarding sign-on or one-time equity or cash compensation, and details on stock ownership guidelines and other applicable Company policies. Offer Letters for Mses. Hall and Cozad include assistance with relocation benefits.
The Company has a portionSeverance and Change of our awardsControl agreement with each of the NEOs. The purpose of the agreements is to ensure that Ingevity:
(a) | offers benefits that provide an overall compensation package that is competitive with that offered by other companies with which Ingevity competes for talent; | |
(b) | can retain and rely upon the undivided focus of its senior executives during and following a change of control; and | |
(c) | diminishes the inevitable distraction our NEOs will experience due to personal uncertainties and risks created by the potential job loss following a change of control. |
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The following is a summary of the benefits provided for upon termination under the LTIPSeverance and Change of Control agreements.
Involuntary Termination by Company other than for Cause and Absent a Change of Control | Involuntary Termination of Employment other than for Cause, or Termination for Good Reason, in Each Case within two years of a Change of Control | Retirement, Death, Disability, or Termination for Cause or Without Good Reason following a Change of Control | ||
■ Base salary through date of termination; ■ Prorated target STIP for the calendar year in which the termination occurs; ■ Accrued unpaid vacation pay; ■ Severance payment of the following: – Mr. Fortson: Two times sum of base salary and target STIP; – All other NEOs: Sum of base salary and target STIP; ■ Health benefits – cost of health coverage for: – Mr. Fortson: Two years; – All other NEOs: One year; ■ Outplacement services; and ■ All other benefits in accordance with the terms of the applicable plans. | ■ Base salary through date of termination; ■ Prorated target STIP for the calendar year in which the termination occurs; ■ Accrued unpaid vacation pay; ■ Severance payment of the following: – Mr. Fortson: Three times sum of base salary and target STIP; – All other NEOs: Two times sum of base salary and target STIP; ■ Health benefits – cost of health coverage for: – Mr. Fortson: Three years; – All other NEOs: Two years; ■ Outplacement services; and ■ All other benefits in accordance with the terms of the applicable plans, provided that, for any PSU award, the applicable performance goals will be deemed achieved at the greater of target or actual performance levels (if actual performance is determinable by the T&C Committee) with no proration. | No benefits other than outstanding base salary through the date of termination. |
The agreements also include one-year post-termination restrictive covenants in the form of non-solicitation of customers and employees and non-competition provisions. All severance payable is further subject to the NEO signing an appropriate release of claims. None of the agreements include any tax gross-ups arising from any excise tax imposed by the Code on excess parachute payments. The benefits to be received are further described under “Potential Payments Upon Certain Termination Events or a Change of Control.”
The treatment of Ingevity’s equity awards in the event of a change of control is governed by the award agreements and our Omnibus Plan. In particular, in the event of a change of control where the NEO receives a “replacement award,” there will be no accelerated vesting, exercisability, or payment of an outstanding award unless the NEO’s employment is terminated without Cause (as defined below), other than as a result of death or disability, or the NEO resigns for Good Reason (as defined below) within two years of the change of control event. In such cases, upon the second trigger, NEO holders of such awards will be entitled to accelerated vesting; awards will be exercisable and/or will be settled. If a NEO does not receive a replacement award or if an award is not otherwise assumed by the acquirer, then upon the occurrence of a change of control, all outstanding unvested awards will be fully vested (with the exception of PSUs, which will vest on a pro-rata basis as further described in the table below) and exercisable.
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A summary of the treatment upon certain termination scenarios appears below.
Type of Award | Upon Involuntary Termination by the Company (other than Change of Control, for Cause, or for Poor Performance) | Termination by Executive due to Retirement (Absent Cause or Poor Performance) | Death or Disability | Change of Control with Qualified Termination, Assuming Replacement Awards are Issued | Change of Control, Assuming No Replacement Awards are Issued | |||||
Options | Vest on a pro rata bases beginning on or after the first anniversary of the Award Date. However, Mr. Woodcock’s and Ms. Hall’s options will vest in full because they are each retirement-eligible. | Immediately vest in full. | ||||||||
PC Transformation Award PSUs | Vest immediately after the first anniversary of the Award Date and after actual performance is certified by the T&C Committee. | No vesting | Vest immediately after the first anniversary of the Award Date and after actual performance is certified by the T&C Committee. | Immediately vest in full. | Vest on a pro rata basis, subject to actual performance through the date of the change of control, or based on target performance, if higher than actual performance. | |||||
RSUs (3-year ratable vest and 3-year cliff vesting) | Vest on a pro rata basis beginning on or after the first anniversary of the Award Date. | Immediately vest in full. | ||||||||
PSUs | Vest on a pro rata basis beginning on or after the first anniversary of the Award Date, subject to actual performance as certified by the T&C Committee following the end of the performance period. | Immediately vest in full. | Vest on a pro rata basis, subject to actual performance through the date of the change of control, or based on target performance, if higher than actual performance. |
Relevant definitions:
■ | Retirement is defined as a termination by the grantee, not for Cause or certain other circumstances, upon the date that the grantee reaches Retirement Age. Commencing with awards granted in 2021, “Retirement Age” means on or after age 55 (with at least 20 years of service) or age 65 (with at least 5 years of service) for the participants who received non-grandfathered language. However, certain participants received grandfathered language in their 2021 awards whereby Retirement Age is defined as age 65 (or 55 with at least 20 years of service), which is the same definition in effect for awards issued prior to 2021. Both Mr. Woodcock and Ms. Hall have reached Retirement Age. |
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■ | Cause is defined as: (a) the willful or gross neglect by the executive to perform his or her employment duties with the Company (or its affiliates) in any material respect; (b) a plea of guilty or nolo contendere to, or conviction for, the commission of a felony offense by the executive; (c) a material breach by the executive of a fiduciary duty owed to the Company (or its affiliates); (d) a material breach by the executive of any nondisclosure, non-solicitation or non-competition obligation owed to the Company (or its affiliates); (e) a clearly established, willful and material violation by the executive of the Company’s Code of Conduct; or (f) a willful and material act by the executive that represents a gross breach of trust that is inconsistent with the executive’s position of authority with the Company and is materially and demonstrably injurious to the Company, including through potential loss of reputation. | |
■ | Good Reason (but only after a change of control during the requisite period) means: (a) a material diminution in the executive’s annual base salary; (b) a material diminution in the executive’s authority, duties, or responsibilities; (c) a material change in the geographic location at which the executive must perform services for the Company; or (d) any other action or inaction that constitutes a material breach by the Company of the award agreement. | |
■ | Poor Performance is defined as the continuing failure by the executive to perform the executive’s duties in any material respect, as determined in the sole discretion of the Company, provided, however, that the executive shall be given notice and an opportunity effectuate a cure as determined by the Company in its sole discretion. | |
■ | Qualified Termination means a termination of employment by the Company without Cause, other than as a result of death or disability, or a termination of employment by the executive for Good Reason. |
Benefits to be received are further described under “Potential Payments Upon Certain Termination Events or a Change of Control.”
The Company maintains the Ingevity Corporation Retirement Savings Plan, adopted as of January 1, 2016 (as amended, the “RSP”). The RSP allows participants to make pay contributions on a pre-tax, Roth, and after-tax basis. The RSP provides for a Company match of up to 6% and an additional 3% automatic non-contributory Company contribution. Contributions and Company matches are 100% vested immediately, while any automatic non-contributory Company contribution is 100% vested after the first 3 years of employment.
The Company maintains a Retirement Restoration Plan that mirrors benefits provided under the WestRock Pension Plan, a qualified defined benefit plan sponsored and maintained by our former parent company, WestRock Company. The Retirement Restoration Plan is a non-qualified stock optionsplan that was adopted by the Company to honor historical WestRock obligations under an Employee Matters Agreement between WestRock and the Company as part of the separation. Benefit amounts under the plan were frozen at the time of the separation. No additional employees may become participants under the plan and no current participants are accruing any additional benefits (other than what was in orderplace and frozen at the time of separation). Mr. Woodcock is the only NEO with a benefit under the plan.
The Company maintains the Ingevity Corporation Deferred Compensation Plan, effective January 1, 2016 (the “DCP”). The purpose of the DCP is to motivateattract and reward executivesretain key employees by enabling participants to defer voluntarily the receipt of certain amounts, including compensation not otherwise eligible for improving share price,deferral under the RSP, to align their long-term interest with those of stockholdersprovide matching contributions on certain deferrals, to restore lost defined contribution benefits due to Code limits, and to maintainprovide retirement and other benefits to participants through an individual account program. The DCP allows participants to defer up to 80% of their base compensation and 80% of their STIP. The restoration component of the competitivenessDCP provides for a Company match of up to 6% and an additional 3% automatic non-contributory Company contribution.
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We provide relocation assistance to employees, including our total compensation packages. Such stock optionsNEOs. Relocation benefits in the amount of $677.00, including a tax-gross up of $177.00, were paid to Ms. Hall related to her move to permanent housing during 2023 as reflected in “All Other Compensation” in the “Summary Compensation Table.” These expenses were paid pursuant to the Company’s broad-based relocation policy that covers all Company salaried employees and includes a gross-up feature. Ms. Hall was granted an extension to secure permanent housing. Certain reimbursable expenses related to the closing of her home purchase in late 2023 are expected to be reimbursed to Ms. Hall during 2024. No other relocation benefits were provided to a NEO during 2023. We also provide valuelimited other benefits to our executives, including our NEOs, to promote their security and well-being, thereby allowing them to focus on Company business. Other benefits paid to NEOs in 2023 include financial counseling and executive officers only if the price of our Common Stock increases.physicals. The stock options vest in full upon the third anniversaryvalue of the award datebenefits is credited to the NEOs as imputed income. Other than with respect to relocation benefits, the Company does not provide any tax gross-ups.
In addition, NEOs participate in each of the benefit plans or arrangements that generally are made available to all U.S.-based salaried employees, including vacation benefits, medical and have a term of 10 years.dental benefits, and life, accidental death and disability insurance.
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Executive Stock Ownership Policy
Our stock ownership guidelines align the long-term interests of our NEOs with those of our stockholders and discourage excessive risk taking.risk-taking. Our guidelines require stock ownership levels as a value of Ingevity sharesCommon Stock equal to a multiple of base salary or retainer for non-employee directors. The Ownership Guidelines require allsalary. NEOs tomust retain 50% of net shares of Common Stock received as incentiveunder LTIP awards until the following stock ownership levels are met.met:
Position | Required Base Salary Multiple | ||
CEO | 5x | ||
3x | |||
Senior Vice Presidents | 2x |
In determining compliance with these guidelines, stock ownership includes shares vestedfully-vested Common Stock and unvested restricted stock awards.RSUs. Unvested performance-based restricted stock units and/or sharesPSUs and vested but unexercised stock options are not included. Executives generally have five years from the date of their designation to achieve the targeted level of ownership. If the required level of ownership is not achieved within the first five years, the holding requirement increases from 50% to 100% of net shares of Common Stock received under LTIP awards until the ownership levels are met.
As of December 31, 2023, Messrs. WilsonFortson and Fortson have met their respective ownership guidelinesWhite, and the other NEOsMses. Hall and Cozad are on track towards achievingto achieve their target ownership levels.levels in a timely manner. Mr. Woodcock had previously met the required ownership level on a timely basis, however, due to a decrease in stock price year-over-year, he was below the required ownership level as of December 31, 2023. As permitted by the stock ownership guidelines, the T&C Committee determined that the year-over-year decrease in the Company’s stock price did not cause Mr. Woodcock to violate the guidelines. We expect that Mr. Woodcock will once again meet the target ownership level by the next compliance review date.
Anti-Hedging/Anti-Pledging
Ingevity’s insider trading policy prohibits members of our Board, executive officers, and other employees from entering into any hedgingtrading in options, warrants, puts and calls, or monetization transactions relating to our
similar instruments involving Company securities or otherwise tradingselling Company securities “short.” The policy also prohibits holding Company securities in any instrument relatingmargin accounts.
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We maintain a compensation recoupment policy (“Clawback Policy”) covering our NEOs, which was amended in 2023 to the future price ofcomply with recent SEC and NYSE rules. Under our securities or pledging Ingevity Common Stock as collateral for any loans.
Recoupmentcurrent Clawback Policy,
In in the event of a material restatement of the Company’s financial statements filed with the SEC the Company’s Board will review the facts and circumstances that leddue to theits material noncompliance with any financial reporting requirement for the restatement. In their review,under securities laws, the Board will consider whetherrequire reimbursement or forfeiture of any covered current or former executive received Incentive Compensation (as defined therein) that was received by any current or former Covered Officers (as defined in the policy)policy and required by the SEC and NYSE) during the three-year period preceding the restatement to the extent that such Incentive Compensation was awarded or paid based in whole or in part on the apparent achievement of financial results that were determined by reference to the originally filed financial information, but which financial results were not achieved underbased on the Company’s restated results. The Board will further consider whether any such currentThis requirement applies regardless of fault or former executive engaged in Misconduct (as defined inmisconduct on the policy) which resulted in or substantially contributed to the material restatement.
If the Board determines that any covered executive did engage in such Misconduct, and such executive received Incentive Compensation within the three-year period preceding the restatement that would not have been payable if the original financial information had reflected the restated resultspart of operations, the Board may, in its sole discretion, direct that the Company recover all or a portion of such excessive Incentive Compensation.Covered Officer.
The Board may consider such factors as it shall determine relevant in determining the appropriate recoupment from such current or former executive and the means of recovery. The Board may seek recoupment from any of the following sources: future payments of Incentive Compensation, cancellation of outstanding equity awards, future equity awards and direct repayment.
Equity Grant Practices
The CompensationT&C Committee has adopted equity grant practicesguidelines for the granting of equity-based compensation, including, among other things, a requirement that set forth the timing and approvals required for equity grants.
Severance and Change of Control Agreements
The Compensation Committeeannual awards be approved severance and double trigger change of control agreements covering each of the NEOs, which became effective on March 1, 2017. These agreements supersede any prior agreements in place with our NEOs under Ingevity or our former parent company, WestRock.
An NEO whose employment is terminated by the Company in the absence ofT&C Committee at a Change of Control (as defined) is entitled to receive severance benefits provided the termination was without Cause (as defined). An NEO whose employment is terminated within two years after a Change of Control is entitled to receive severance benefits provided the termination was without Cause or is a resignation by the NEO for Good Reason (as defined). The purpose of the agreements
24 - INGEVITY - 2018 Proxy Statement
is to ensure that Ingevity (a) offers benefits that provide an overall compensation package that is competitive with that offered by other companies with whom Ingevity competes for talent; (b) retains and relies upon the undivided focus of its senior executives during and following a change of control; and (c) diminishes the inevitable distraction of our NEOs by virtue of personal uncertainties and risks created by the potential job loss following a change in control. The cash severance entitlement is equal to a multiple of the NEO’s actual base salary and target annual incentive, which varies by executive level, and in the case of change of control
severance, the multiple is enhanced. The agreements also include one-year post-termination restrictive covenants relating to non-solicitation of customers and employees, and non-competition provisions. All severance payable is subject to the NEO signing an appropriate release of claims along with post-termination covenants relating to confidentiality, non-competition and non-solicitation. None of the agreements include any tax gross ups arising from any excise tax imposed by the Internal Revenue Code on excess parachute payments.
NEOs participate in each of the benefit plans or arrangements that generally are made available to all U.S. based salaried employees including:
At least annually, the WestRock final average pay pension plan or 4% for employees grandfathered in the WestRock cash balance pension plan.
Additional benefits made available to NEOs are:
The value of the financial counseling is credited to the NEO as imputed income. There is no tax gross-up.
The Company also makes available a non-qualified deferred compensation plan to the NEOs as well as a select group of highly compensated employees that allows participants to defer up to 80% of their base compensation and 100% of their annual incentive. The plan also contains a restoration component that restores lost defined contribution benefits due to IRS limits.
Risk Analysis
The CompensationT&C Committee engaged Pearl Meyer to reviewreviews Ingevity’s executive and non-executive compensation programs to assess whether they encourage or create excessive risk-taking not in the best interest of the Company or its stockholders. The most recent assessment occurred in April 2023.
In conducting this assessment, Pearl Meyerthe T&C Committee reviewed various components and design features of all of the Company’s executive and non-executive plans and programs as presented by management and the Compensation Consultant, and analyzed them in the context of risk mitigation. A summary ofManagement and the findings of the assessment was providedCompensation Consultant presented their conclusions to the CompensationT&C Committee, which concludedwere that Ingevity’s compensation arrangements are not constructed or administered in a way that is likely to create risks that could materially and adversely affect the Company.
Among the factors considered in Pearl Meyer’sthe assessment and reviewed by the CompensationT&C Committee were: (i)
■ the balance of the Company’s overall program design, including the mix of cash and equity compensation; (ii)
■ the mix of fixed and variable compensation; (iii)
■ the balance of short-term
and long-term objectives of our incentive compensation; (iv)
■ the performance metrics, performance targets, threshold performance requirements, and capped payouts related to our incentive compensation; (v)
■ the Company’s share ownership guidelines, including share ownership levels, retention practices, and prohibitions on hedging pledging and other derivative transactions related to Ingevity stock; (vi)
■ the CompensationT&C Committee’s ability to exercise negative discretion to reduceregarding the amount of the annual and long-term incentive awards,awards;
■ the existence of a clawback policy; and (vii)
■ internal controls and oversight structures in place at the Company.
Based on Pearl Meyer’sits review, the CompensationT&C Committee’s deliberations, and such other matters as the CompensationT&C Committee deemed relevant, the CompensationT&C Committee believes Ingevity’s well-balanced mix of salary and short-term and long-term incentives, as well as the performance metrics that are included in the incentive programs, are appropriate and consistent with the Company’s risk management practices and overall strategies.
The T&C Committee considers tax and accounting considerations in structuring our executive compensation program.
Section 162(m) was recently amendedof the Code generally disallows tax deductions for compensation paid by public companies to disallow a tax deduction to public companiescertain executive officers for compensation over $1 million paid forin any fiscal year toyear. Nonetheless, the Company’s chief executive officer and up to three other executive officers (other than the chief financial officer) whose compensation
must be included in this proxy statement because they are our most highly compensated officers. Section 162(m) exempts qualifying performance-based compensation with respect to taxable years beginning on or before December 31, 2017 and payable pursuant to a binding
INGEVITY - 2018 Proxy Statement - 25
written agreement in effect on November 2, 2017. Accordingly, only performance-based awards that are deductible in our current fiscal year and performance-based awards outstanding on that date (including any transition relief afforded to us because of our separation from WestRock) or awarded thereafter pursuant to a binding written agreement may be exempt from the deduction limit if applicable requirements are met. While our Compensation Committee structured awards to our executive officers under the 2017 annual and long-term plans to qualify for this exemption, the CompensationT&C Committee believes that shareholderstockholder interests are best served if theirthe T&C Committee’s discretion and flexibility in awarding compensation isare not restricted, even though some compensation awards may result in non-
deductiblenon-deductible compensation expenses. Thus, considering the repeal ofT&C Committee reserves the performance-based compensation exception to 162(m), our Compensation Committee expects in the futureability to approve compensation that is not deductible for income tax purposes. However,purposes, when the T&C Committee determines that such compensation is appropriate.
INGEVITY | 2024 Proxy Statement | 60 |
The T&C Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the T&C Committee does not anticipate a shift away from variable or performance-based compensation payablerecommended to our NEOsthe Board that the Compensation Discussion and Analysis be included in the future, nor do we anticipate applying less rigor in the process by which we establish performance goals or evaluate performance against such pre-established goals, with respect to compensation paid to our NEOs. In addition, accounting considerations are one of many factors that our Compensation Committee considers in determining compensation mix and amount.
26 - INGEVITY - 2018this Proxy Statement
and incorporated by reference into our Annual Report on Form 10-K for fiscal 2023.
THE TALENT AND COMPENSATION COMMITTEE
Diane H. Gulyas, Chair
Jean S. Blackwell
Bruce D. Hoechner
Frederick J. Lynch
Daniel F. Sansone
INGEVITY | 2024 Proxy Statement | 61 |
The table below includes the total compensation of our Chief Executive Officer, our Chief Financial Officer and the four other most highly compensated executive officers of our Company during 2017, whom we refer to in this proxy statement as NEOs for the fiscal year ended December 31, 2017.2023.
Name and Principal Position | Year | Salary(1) ($) | Bonus(2) ($) | Stock Awards(3) ($) | OptionAwards(4) ($) | Non-Equity Incentive Comp.(5) ($) | Change in Pension Value and Nonqualified Deferred Comp. Earnings(6) ($) | All Other Comp.(7) ($) | Total ($) | ||||||||||||||||||
D. Michael Wilson | 2017 | 845,833 | — | 1,593,778 | 531,253 | 1,700,000 | 76,315 | 186,723 | 4,933,902 | ||||||||||||||||||
2016 | 800,000 | 565,419 | 2,579,160 | 509,157 | 1,029,600 | 8,002 | 616,767 | 6,108,105 | |||||||||||||||||||
2015 | 266,667 | 500,000 | — | — | — | — | 22,917 | 789,584 | |||||||||||||||||||
John C. Fortson | 2017 | 488,750 | — | 643,534 | 214,493 | 686,000 | 18,907 | 100,819 | 2,152,503 | ||||||||||||||||||
2016 | 475,000 | 197,678 | 1,608,602 | 286,606 | 427,930 | 2,233 | 356,169 | 3,354,218 | |||||||||||||||||||
2015 | 95,000 | 250,000 | — | — | — | — | 11,813 | 356,813 | |||||||||||||||||||
Katherine P. Burgeson | 2017 | 357,500 | — | 229,488 | 76,503 | 360,000 | 143,992 | 68,047 | 1,235,530 | ||||||||||||||||||
2016 | 325,833 | 89,950 | 269,912 | 80,533 | 209,680 | 642 | 223,525 | 1,200,075 | |||||||||||||||||||
2015 | 312,966 | 50,000 | 185,636 | 77,322 | 148,721 | 159,025 | 24,963 | 958,633 | |||||||||||||||||||
Michael P. Smith | 2017 | 369,167 | — | 224,974 | 74,991 | 412,500 | 1,595 | 67,722 | 1,150,948 | ||||||||||||||||||
S. Edward Woodcock | 2017 | 297,917 | — | 179,990 | 59,997 | 330,000 | 70,903 | 96,869 | 1,035,675 | ||||||||||||||||||
2016 | 275,000 | 48,611 | 192,454 | 54,731 | 176,960 | 7,411 | 30,914 | 786,081 | |||||||||||||||||||
2015 | 243,127 | — | 87,616 | — | 98,929 | 125,024 | 18,159 | 572,855 | |||||||||||||||||||
Edward A. Rose | 2017 | 33,333 | — | 130,716 | — | — | 211 | 1,754,817 | 1,919,077 | ||||||||||||||||||
2016 | 400,000 | 111,111 | 431,111 | 122,200 | — | 8,416 | 44,341 | 1,117,179 | |||||||||||||||||||
2015 | 379,166 | — | 199,874 | — | 203,500 | 378,846 | 34,716 | 1,196,102 |
Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Option Awards(3) ($) | Non-Equity Incentive Comp.(4) ($) | Change in Pension Value and Nonqualified Deferred Comp. Earnings ($)(5) | All Other Comp.(6) ($) | Total ($) | |||||||||
John C. Fortson | 2023 | 995,000 | 4,000,032 | 169,150 | 126,880 | 5,291,062 | ||||||||||||
President & Chief Executive Officer
| 2022 | 930,233 | 2,115,062 | 705,003 | 1,525,580 | 118,592 | 5,394,470 | |||||||||||
2021 | 825,000 | 1,856,297 | 618,757 | 1.414,050 | 108,184 | 4,822,288 | ||||||||||||
Mary Dean Hall | 2023 | 510,000 | 1,020,029 | 71,400 | 77,366 | 1,678,795 | ||||||||||||
EVP, Chief Financial Officer & Treasurer
| 2022 | 509,151 | 612,023 | 204,015 | 584,500 | 46,406 | 1,956,096 | |||||||||||
2021 | 352,273 | 1,548,099 | 85,067 | 599,900 | 75,471 | 2,660,809 | ||||||||||||
Stacy L. Cozad | 2023 | 470,000 | 775,569 | 61,100 | 84,649 | 1,391,318 | ||||||||||||
EVP, General Counsel & Secretary
| 2022 | 469,151 | 608,339 | 152,754 | 500,110 | 81,125 | 1,811,478 | |||||||||||
2021 | 421,667 | 350,000 | 914,112 | 138,007 | 498,690 | 123,089 | 2,445,565 | |||||||||||
S. Edward Woodcock | 2023 | 471,667 | 712,658 | 257,780 | 26,704 | 94,358 | 1,563,167 | |||||||||||
EVP & President, Performance Materials
| 2022 | 434,151 | 424,254 | 141,402 | 445,870 | 80,959 | 1,526,636 | |||||||||||
2021 | 425,000 | 898,585 | 132,815 | 250,160 | 156,413 | 1,862,973 | ||||||||||||
Richard A. White | 2023 | 460,000 | 1,690,160 | 41,400 | 74,165 | 2,265,725 | ||||||||||||
SVP & President, Performance Chemicals | 2022 | 392,945 | 285,065 | 95,021 | 389,020 | 72,915 | 1,234,966 |
(1) |
(2) |
INGEVITY | 2024 Proxy Statement | 62 |
(3) | No options were awarded in 2023 |
(4) |
(5) | The Company does not maintain a qualified defined benefit pension plan for any of our salaried employees, including our NEOs. However, the Company maintains a Retirement Restoration Plan that mirrors benefits provided under a qualified defined benefit plan sponsored and maintained by our former parent company, WestRock. See Pension Benefits Table - 2023 below. The |
INGEVITY - 2018 Proxy Statement - 27
present value of accumulated benefits is based on benefits payable at age 65 using a discount rate of 4.15% and mortality based on the RP-2014 White Collar Mortality Table adjusted back to 2006 using Scale MP-2014 and projected with Scale MP-2016. While these amounts appear as a lump sum, the normal form of payment is an annuity. These amounts are “pension accounting values” and were not realized by these NEOs during 2017.
(6) | Amounts shown in | |
D. Michael Wilson | John C. Fortson | Katherine P. Burgeson | Michael P. Smith | S. Edward Woodcock | Edward A. Rose | |||||||||||||
Financial Planning/Counseling(1) | $ | 15,346 | $ | 16,378 | $ | 15,346 | $ | 16,608 | $ | 16,609 | $ | 15,307 | ||||||
Qualified Savings Plan Contributions(2) | $ | 24,300 | $ | 24,300 | $ | 24,131 | $ | 22,829 | $ | 36,000 | $ | 3,000 | ||||||
Non-Qualified Savings Plan Contributions(3) | $ | 144,189 | $ | 57,901 | $ | 26,785 | $ | 18,952 | $ | 42,543 | $ | |||||||
Life Insurance Premiums | $ | 1,913 | $ | 1,103 | $ | 810 | $ | 845 | $ | 675 | $ | $75 | ||||||
Executive Long-Term Disability(4) | $ | 975 | $ | 1,137 | $ | 975 | $ | 1,137 | $ | 1,042 | $ | $99 | ||||||
Relocation(5) | $ | — | $ | — | $ | — | $ | 7,351 | — | — | ||||||||
Severance Related Benefits(6) | $ | 987,000 | ||||||||||||||||
Consulting Fees(7) | $ | 100,000 | ||||||||||||||||
Accelerated Vesting of Stock Grants(8) | $ | 520,047 | ||||||||||||||||
Long-term Cash Awards(9) | $ | 129,293 | ||||||||||||||||
Total Other Compensation | $ | 186,723 | $ | 100,819 | $ | 68,047 | $ | 67,722 | $ | 96,869 | $ | 1,754,817 |
John C. Fortson ($) | Mary Dean Hall ($) | Stacy L. Cozad ($) | S. Edward Woodcock ($) | Richard A. White ($) | ||||||
Financial Planning/Counseling(a) | 17,285 | 17,693 | 17,693 | 17,693 | 17,603 | |||||
RSP Contributions(b) | 29,700 | 14,694 | 29,700 | 29,700 | 29,700 | |||||
DCP Contributions(c) | 75,450 | 40,994 | 35,250 | 43,936 | 24,104 | |||||
Life Insurance Premiums | 2,487 | 1,349 | 88 | 1,152 | 1,005 | |||||
Executive Long-Term Disability(d) | 1,957 | 1,958 | 1,918 | 1,877 | 1,752 | |||||
Relocation Expenses(e) | 677 | |||||||||
TOTAL OTHER COMPENSATION | 126,880 | 77,366 | 84,649 | 94,358 | 74,165 | |||||
Annual matching and non-contributory contributions by the Company to |
Annual matching and non-contributory contributions by the Company to |
Annual long-term disability premium paid by the Company. | ||
(e) | Includes tax gross-up of $177 |
INGEVITY | 2024 Proxy Statement | 63 |
Back to Contents |
28 - INGEVITY - 2018 Proxy Statement
The following table reports plan-based awards granted to the NEOs during fiscal 2017.2023. The material terms of our short- and long-term incentive compensation awards are described in “Compensation Discussion and Analysis — Compensation Philosophy” beginning on page 18.Design; Pay Elements.”
Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards or Units (# of awards)(3) | All Other Option Awards (# of awards)(4) | Exercise Or Base Price of Option Awards(5) ($) | Grant Date Fair Market Value of Stock & Option Awards(6) ($) | ||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (# of awards) | Target (# of awards) | Maximum (# of awards) | ||||||||||||||||||||||||||||
D. Michael Wilson | |||||||||||||||||||||||||||||||||
STIP Annual | 425,000 | 850,000 | 1,700,000 | ||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||
PSUs | 5/27/2016 | 17,333 | 35,466 | 70,932 | 989,501 | ||||||||||||||||||||||||||||
RSUs | 5/27/2016 | 56,977 | 1,589,658 | ||||||||||||||||||||||||||||||
Stock Options | 5/27/2016 | 48,170 | 27.90 | 509,197 | |||||||||||||||||||||||||||||
PSUs | 2/27/2017 | 10,003 | 20,006 | 40,012 | 1,062,519 | ||||||||||||||||||||||||||||
RSUs | 2/27/2017 | 10,003 | 531,259 | ||||||||||||||||||||||||||||||
Stock Options | 2/27/2017 | 25,652 | 53.11 | 531,253 | |||||||||||||||||||||||||||||
John C. Fortson | |||||||||||||||||||||||||||||||||
STIP Annual | 171,500 | 343,000 | 686,000 | ||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||
PSUs | 5/27/2016 | 9,471 | 18,941 | 37,882 | 528,454 | ||||||||||||||||||||||||||||
RSUs | 5/27/2016 | 38,715 | 1,080,149 | ||||||||||||||||||||||||||||||
Stock Options | 5/27/2016 | 27,115 | 27.90 | 286,606 | |||||||||||||||||||||||||||||
PSUs | 2/27/2017 | 4,039 | 8,078 | 16,156 | 429,023 | ||||||||||||||||||||||||||||
RSUs | 2/27/2017 | 4,039 | 214,511 | ||||||||||||||||||||||||||||||
Stock Options | 2/27/2017 | 10,357 | 53.11 | 214,493 | |||||||||||||||||||||||||||||
Katherine P. Burgeson | |||||||||||||||||||||||||||||||||
STIP Annual | 90,000 | 180,000 | 360,000 | ||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||
PSUs | 5/27/2016 | 2,661 | 5,322 | 10,644 | 148,484 | ||||||||||||||||||||||||||||
RSUs | 5/27/2016 | 5,320 | 148,248 | ||||||||||||||||||||||||||||||
Stock Options | 5/27/2016 | 7,619 | 27.90 | 80,533 | |||||||||||||||||||||||||||||
PSUs | 2/27/2017 | 1,441 | 2,881 | 5,762 | 153,010 | ||||||||||||||||||||||||||||
RSUs | 2/27/2017 | 1,440 | 76,478 | ||||||||||||||||||||||||||||||
Stock Options | 2/27/2017 | 3,694 | 53.11 | 76,503 | |||||||||||||||||||||||||||||
Michael P. Smith | |||||||||||||||||||||||||||||||||
PSUs | 2/27/2017 | 103,125 | 206,250 | 412,500 | 1,412 | 2,824 | 5,648 | 149,983 | |||||||||||||||||||||||||
RSUs | 2/27/2017 | 1,412 | 74,991 | ||||||||||||||||||||||||||||||
Stock Options | 2/27/2017 | 3,612 | 53.11 | 74,991 | |||||||||||||||||||||||||||||
S. Edward Woodcock | |||||||||||||||||||||||||||||||||
STIP Annual | 82,550 | 16,500 | 330,000 | ||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||
Replacement Cash | — | 48,611 | — | ||||||||||||||||||||||||||||||
Award | |||||||||||||||||||||||||||||||||
PSUs | 5/27/2016 | 1,907 | 3,813 | 7,626 | 106,382 | ||||||||||||||||||||||||||||
RSUs | 5/27/2016 | 3,085 | 86,072 | ||||||||||||||||||||||||||||||
Stock Options | 5/27/2016 | 5,178 | 27.90 | 54,731 | |||||||||||||||||||||||||||||
PSUs | 2/27/2017 | 1,130 | 2,259 | 4,518 | 119,975 | ||||||||||||||||||||||||||||
RSUs | 2/27/2017 | 1,130 | 60,014 | ||||||||||||||||||||||||||||||
Stock Options | 2/27/2017 | 2,897 | 53.11 | 59,997 | |||||||||||||||||||||||||||||
Edward A. Rose | |||||||||||||||||||||||||||||||||
STIP Annual | 120,000 | 240,000 | 480,000 | ||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||
Replacement Cash | — | 111,000 | — | ||||||||||||||||||||||||||||||
Award | |||||||||||||||||||||||||||||||||
PSUs | 5/27/2016 | 4,256 | 8,512 | 17,024 | 237,485 | ||||||||||||||||||||||||||||
RSUs | 5/27/2016 | 6,940 | 193,626 | ||||||||||||||||||||||||||||||
Stock Options | 5/27/2016 | 11,561 | 27.90 | 122,200 |
Name | T&C Committee Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise Or Base Price of Option Awards ($/ Sh) | Grant Date Fair Market Value of Stock and Option Awards(5) ($) | |||||
Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||
John C. Fortson | ||||||||||||
STIP | 248,726 | 995,000 | 1,989,808 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 7,268 | 29,070 | 58,140 | 2,400,019 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 19,380 | 1,600,013 | ||||||||
Options | ||||||||||||
Mary Dean Hall | ||||||||||||
STIP | 89,250 | 357,000 | 714,000 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,853 | 7,413 | 14,826 | 612,017 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 4,942 | 408,012 | ||||||||
Options | ||||||||||||
Stacy L. Cozad | ||||||||||||
STIP | 76,375 | 305,500 | 611,000 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,409 | 5,636 | 11,272 | 465,308 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 3,758 | 310,260 | ||||||||
Options | ||||||||||||
S. Edward Woodcock | ||||||||||||
STIP | 76,635 | 306,584 | 613,084 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,295 | 5,179 | 10,358 | 427,578 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 3,453 | 285,080 | ||||||||
Options | ||||||||||||
Richard A. White | ||||||||||||
STIP | 69,000 | 276,000 | 552,000 | |||||||||
PSUs | 02/16/2023 | 02/28/2023 | 1,254 | 5,015 | 10,030 | 414,038 | ||||||
RSUs | 02/16/2023 | 02/28/2023 | 3,344 | 276,081 | ||||||||
Options | ||||||||||||
PC Transformation Award PSUs | ||||||||||||
04/07/2023 | 05/01/23 | 11,175 | 13,969 | 13,969 | 1,000,041 |
(1) |
(2) |
(3) | RSU awards to our executives generally vest ratably |
(4) |
(5) |
INGEVITY | 2024 Proxy Statement | 64 |
INGEVITY - 2018 Proxy Statement - 29
The table below shows the equity awards that have been previously awarded by the Company to our NEOs and which remained outstanding as of December 31, 2017.2023. Market and payout values are based on $47.22, the closing price of the Company’s Common Stock on December 29, 2023, the last business day of 2023.
Option Awards(1) | Stock Awards(2) | ||||||||||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options Exercisable (b) | Number of Securities Underlying Unexercised Options Unexercisable (c) | Number of Securities Underlying Unexercised Unearned Options (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares of Stock that have not yet Vested (g) | Market Value of Unvested Shares of Stock ($) (h) | Equity Incentive Plan Awards: Number of Unearned Unvested Units of Shares (i)(3) | Plan Awards Payout Value of Unearned, Unvested Units or Shares ($) (j)(4) | ||||||||||||||||||
D. Michael Wilson | 0 | 48,170 | 0 | 27.90 | 5/27/2026 | 35,082 | 2,472,229 | 55,472 | 3,909,112 | ||||||||||||||||||
0 | 25,652 | 0 | 53.11 | 2/27/2027 | |||||||||||||||||||||||
John C. Fortson | 0 | 27,115 | 0 | 27.90 | 5/27/2026 | 20,170 | 1,421,380 | 27,019 | 1,904,029 | ||||||||||||||||||
0 | 10,357 | 0 | 53.11 | 2/27/2027 | |||||||||||||||||||||||
Katherine P. Burgeson | 0 | 7,619 | 0 | 27.90 | 5/27/2026 | 5,853 | 412,461 | 8,203 | 578,065 | ||||||||||||||||||
0 | 3,694 | 0 | 53.11 | 2/27/2027 | |||||||||||||||||||||||
Michael P. Smith | 0 | 3,621 | 0 | 53.11 | 2/27/2027 | 2,488 | 175,329 | 5,956 | 419,719 | ||||||||||||||||||
S. Edward Woodcock | 0 | 5,178 | 0 | 27.90 | 5/27/2026 | 3,560 | 250,873 | 6,072 | 427,894 | ||||||||||||||||||
0 | 2,897 | 0 | 53.11 | 2/27/2027 | |||||||||||||||||||||||
Edward A. Rose | 5,000 | 0 | 0 | 27.90 | 5/27/2026 | 0 | 0 | 2,837 | 199,923 |
Option Awards(1) | Stock Awards | ||||||||||
Name (a) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) (b) | Number of Securities Underlying Unexercised Options Unexercisable (#) (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock that Have Not Vested(2) (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(3) (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights that Have Not Vested ($) (j) | |
John C. Fortson | |||||||||||
05/27/2016 | 27,115 | 27.90 | 05/27/2026 | ||||||||
02/27/2017 | 10,357 | 53.11 | 02/27/2027 | ||||||||
02/28/2018 | 8,661 | 74.91 | 02/28/2028 | ||||||||
02/28/2019 | 5,792 | 115.22 | 02/28/2029 | ||||||||
02/28/2020 | 14,749 | 45.04 | 02/28/2030 | ||||||||
02/26/2021 | 12,871 | 6,435 | 69.48 | 02/26/2031 | 2,969 | 140,196 | 17,811 | 841,035 | |||
02/28/2022 | 8,426 | 16,852 | 68.23 | 02/28/2032 | 6,888 | 325,251 | 20,666 | 975,849 | |||
02/28/2023 | 19,380 | 915,124 | 29,070 | 1,372,685 | |||||||
Mary Dean Hall | |||||||||||
04/19/2021 | 1,679 | 840 | 73.21 | 04/19/2031 | 387 | 18,274 | 2,324 | 109,739 | |||
04/19/2021 | 4,415 | 208,476 | |||||||||
02/28/2022 | 2,439 | 4,876 | 68.23 | 02/28/2032 | 1,993 | 94,109 | 5,980 | 282,376 | |||
02/28/2023 | 4,942 | 233,361 | 7,413 | 350,042 | |||||||
Stacy L. Cozad | |||||||||||
02/01/2021 | 2,419 | 114,225 | |||||||||
02/26/2021 | 2,871 | 1,435 | 69.48 | 02/26/2031 | 662 | 31,260 | 3,973 | 187,605 | |||
02/28/2022 | 1,826 | 3,651 | 68.23 | 02/28/2032 | 1,492 | 70,452 | 4,478 | 211,451 | |||
02/28/2022 | 2,199 | 103,837 | |||||||||
02/28/2023 | 3,758 | 177,453 | 5,636 | 266,132 |
INGEVITY | 2024 Proxy Statement | 65 |
Option Awards(1) | Stock Awards | ||||||||||
Name (a) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) (b) | Number of Securities Underlying Unexercised Options Unexercisable (#) (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock that Have Not Vested(2) (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested(3) (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights that Have Not Vested ($) (j) | |
S. Edward Woodcock | |||||||||||
02/27/2017 | 2,897 | 53.11 | 02/27/2027 | ||||||||
02/28/2018 | 3,235 | 74.91 | 02/28/2028 | ||||||||
02/28/2019 | 2,556 | 115.22 | 02/28/2029 | ||||||||
02/28/2020 | 8,369 | 45.04 | 02/28/2030 | ||||||||
02/26/2021 | 7,197 | 339,842 | |||||||||
02/26/2021 | 2,763 | 1,381 | 69.48 | 02/26/2031 | 637 | 30,079 | 3,824 | 180,569 | |||
02/28/2022 | 1,690 | 3,380 | 68.23 | 02/28/2032 | 1,382 | 65,258 | 4,145 | 195,727 | |||
02/28/2023 | 3,453 | 163,051 | 5,179 | 244,552 | |||||||
Richard A. White | |||||||||||
02/28/2020 | 819 | 45.04 | 02/28/2030 | ||||||||
02/26/2021 | 911 | 455 | 69.48 | 02/28/2031 | 210 | 9,916 | 1,260 | 59,497 | |||
07/01/2021 | 609 | 28,757 | |||||||||
02/28/2022 | 1,136 | 2,271 | 68.23 | 02/28/2032 | 928 | 43,820 | 2,785 | 131,508 | |||
02/28/2023 | 3,344 | 157,904 | 5,015 | 236,808 | |||||||
05/01/2023 | 13,969 | 659,616 |
(1) |
(2) | The RSU awards reported in column (g) generally vest ratably |
(3) | Column | |
The number of PSU shares |
INGEVITY | 2024 Proxy Statement | 66 |
30 - INGEVITY - 2018 Proxy Statement
This table shows the stock options that were exercised by, and the RSUs that vested for, each of our NEOs during 2017. Option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate market value of shares of Common Stock.2023.
Option Awards(1) | Stock Awards(2) | |||||||
Number of Shares Acquired on Exercise (#) | Value Realized upon Exercise | Number of Shares Acquired on Vesting (#) | Value Realized Upon Vesting ($) | |||||
D. Michael Wilson | — | — | 18,993 | 1,142,924 | ||||
John C. Fortson | — | — | 12,905 | 831,313 | ||||
Katherine P. Burgeson | — | — | 907 | 48,506 | ||||
Michael P. Smith | — | — | 537 | 28,719 | ||||
S. Edward Woodcock | — | — | 655 | 35,029 | ||||
Edward A. Rose | 6,561 | 337,285 | 2,391 | 130,715 |
Option Awards | Stock Awards | |||||||||||||
Name | Award | Grant Date | Exercise or Vest Date, As Applicable | Number of Shares Acquired on Exercise (#) | Value Realized Upon Exercise(1) ($) | Number of Shares Acquired on Vesting(2) (#) | Value Realized Upon Vesting(3) ($) | |||||||
John C. Fortson | ||||||||||||||
PSU | 02/28/2020 | 02/16/2023 | 8,835 | 792,234 | ||||||||||
PSU | 09/01/2020 | 02/16/2023 | 10,430 | 935,258 | ||||||||||
RSU | 02/28/2020 | 02/28/2023 | 1,732 | 142,994 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 2,968 | 260,620 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 3,445 | 284,419 | ||||||||||
Mary Dean Hall | ||||||||||||||
RSU | 04/19/2021 | 04/19/2023 | 4,415 | 317,218 | ||||||||||
RSU | 04/19/2021 | 04/19/2023 | 387 | 27,806 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 997 | 82,312 | ||||||||||
Stacy L. Cozad | ||||||||||||||
RSU | 02/01/2021 | 02/01/2023 | 2,418 | 200,380 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 662 | 58,130 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 747 | 61,672 | ||||||||||
S. Edward Woodcock | ||||||||||||||
PSU | 02/28/2020 | 02/16/2023 | 5,014 | 449,605 | ||||||||||
RSU | 02/28/2020 | 02/28/2023 | 983 | 81,156 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 637 | 55,935 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 691 | 57,049 | ||||||||||
Richard A. White | ||||||||||||||
PSU | 02/28/2020 | 02/16/2023 | 1,473 | 132,084 | ||||||||||
RSU | 02/28/2020 | 02/28/2023 | 289 | 23,860 | ||||||||||
RSU | 02/26/2021 | 02/26/2023 | 210 | 18,440 | ||||||||||
RSU | 02/28/2022 | 02/28/2023 | 465 | 38,390 |
(1) | The value realized |
(2) | ||
Column represents the value of the awards | ||
INGEVITY | 2024 Proxy Statement | 67 |
The following table provides information with respect to the Company’s non-qualified defined benefit plan (which we refer to as the “Retirement Restoration Plan”). The Retirement Restoration Plan provides benefits to only three of our NEOs (one of whom is a former executive) representing “historic” liabilities assumed by the Company under the terms of the EMA in connection with our separation from our former Parent, WestRock. None of our NEOs currently accrues a benefit under this plan with respect to service with the Company.
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | ||||||
Katherine P. Burgeson | Retirement Restoration Plan | 15.83 | 1,135,112 | — | ||||||
S. Edward Woodcock | Retirement Restoration Plan | 27.083 | 344,111 | — | ||||||
Edward A. Rose | Retirement Restoration Plan | 31.92 | 1,443,448 | 63,764 |
Understanding Our Pension Benefits Table
The Company maintains the Retirement Restoration Plan, a non-qualified plan that mirrors benefits provided under a qualified defined benefit pension plan sponsored and maintained by our former Parent,parent, WestRock (the “WestRock Pension Plan”). The Retirement Restoration Plan was adopted by the Company to honor obligations under the EMAEmployee Matters Agreement between the Company and WestRock to pay certain assumed historic liabilities transferred as a result of the separation.separation of WestRock and the Company.
Mr. Woodcock is the only NEO who has a benefit under the Retirement Restoration Plan. None of our other NEOs currently accrues a benefit under this plan with respect to service with the Company.
Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | ||||
S. Edward Woodcock | Retirement Restoration Plan | 27.83 | 341,670 | – |
(1) | The accumulated benefits included in this column were computed through December 31, 2023, using the assumptions stated in Note 14 to the Company’s audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2024. |
The WestRock Pension Plan (now frozen) provides an unreduced benefit payable at age 65 (or 62, if the employee has 20 years of service). The retirement benefit payable is equal to 1.6% of final average earnings (or pay) times years of benefit service (up to a maximum of 40 years), minus an
employee’s primary social security benefit multiplied by 1.25% times years of benefit service (up to a maximum of 40 years of service). The formula is illustrated below:
[1.6% x Years of Benefit x Final Average Pay]
Service (up to 40)-
Less
[1.25% x Years of Benefit x Primary Social Security Benefit]
Service (up to 40)
The Retirement Restoration Plan mirrors benefits provided under the WestRock Pension Plan following the same formula but recognizing compensation in excess of the Internal Revenue Code limit, which was $270,000 for 2017. Messrs.
INGEVITY - 2018 Proxy Statement - 31
limits. Mr. Woodcock, and Rose and Ms. Burgeson, while participantsa participant in this plan, no longer accrueaccrues any benefit under this plan. Benefits are payable in annuity form only, and a lump sum is not available. The underlying plan, the WestRock Pension Plan, to which our Retirement Restoration Plan relates, was
frozen (generally) on December 31, 2015. Accordingly, the values above represent ana historic liability accrued under the former Parent’s plan, the WestRock Pension Plan with respect to service performed for WestRock, not Ingevity.
The Company maintains a non-qualified deferred compensation plan that permits executives to defer up to 80% of their base salary and 100%80% of their short-term incentive compensation. The plan also operates as an excess benefit plan enabling employees to defer salary, Company matching, transition and other non-contributing contributions in excess of Internal Revenue Code limits that apply to the Company’s qualified 401(k) Savings Plan. Amounts contributed may be allocated towards notional accounts into
RSP. The DCP provides for a Company match of up to 16 investment funds as directed by the executive. 6% and an additional 3% automatic non-contributory Company contribution.
There is no guaranteed investment return with respect to any of these funds. The funds mirror those options available to all employees who participate in the Company’s broad-based qualified 401(k) Savings PlanRSP including two additional funds. In 2017, theThe Company adopted the use of a Rabbi Trust, which will beis funded through the purchase of Company Owned Life Insurance.Company-owned life insurance.
INGEVITY | 2024 Proxy Statement | 68 |
The table below includes information on each of our NEO’s non-qualified deferred compensation plan accounts for 2017.2023.
Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End (3) ($) | |||||||||||
D. Michael Wilson | 160,543 | 144,189 | 76,315 | — | 598,140 | ||||||||||
John C. Fortson | 38,801 | 57,901 | 18,907 | — | 135,682 | ||||||||||
Katherine P. Burgeson | 61,077 | 26,785 | 12,689 | — | 153,767 | ||||||||||
Michael P. Smith | 22,423 | 18,952 | 1,595 | — | 31,261 | ||||||||||
S. Edward Woodcock | 99,256 | 42,453 | 17,119 | — | 148,197 | ||||||||||
Edward A. Rose | 0 | 0 | 211 | 17,837 | 17,940 |
Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End(3) ($) | ||||||
John C. Fortson | 50,300 | 75,450 | 156,493 | 1,163,632 | ||||||
Mary Dean Hall | 322,327 | 40,994 | 103,610 | 480,592 | ||||||
Stacy L. Cozad | 47,000 | 35,250 | 23,086 | 169,472 | ||||||
S. Edward Woodcock | 140,900 | 43,936 | 316,622 | 2,131,384 | ||||||
Richard A. White | 38,410 | 24,104 | 9,810 | 260,163 | ||||||
(1) |
(2) |
(3) |
32 - INGEVITY - 2018 Proxy Statement
Potential Payments Upon
InvoluntaryCertain Termination(1)(other than Events or a Change of Control)Control
Please refer to “Compensation Discussion & Analysis – Other Compensation and Benefits – Severance Arrangements” for a discussion of the benefits payable to our NEOs upon certain termination events and the definition of certain capitalized terms below.
The table below shows the severance benefits that would be payable to each of our NEOs if he or she had experienced an involuntarythe termination or change of employment from the Companycontrol events indicated below on December 29, 2017 (absent cause and excluding death,31, 2023. The table below does not include amounts under the RSP or DCP, accrued but unused vacation, disability benefits, or retirement), pursuantother benefits payable to the terms of Severance and Change of Control Agreements.
D. Michael Wilson | John C. Fortson | Katherine P. Burgeson | Michael P. Smith | S. Edward Woodcock | |||||||||||
Cash Severance(2) | $ | 3,400,000 | $ | 1,249,500 | $ | 810,000 | $ | 581,250 | $ | 465,000 | |||||
Prorated Target Incentive(3) | $ | 850,000 | $ | 343,000 | $ | 180,000 | $ | 206,250 | $ | 165,000 | |||||
Prorated Vesting Options(4) | $ | 1,082,300 | $ | 609,219 | $ | 171,217 | $ | 77,261 | $ | 116,344 | |||||
Prorated Vesting RSUs(5) | $ | 1,319,128 | $ | 704,489 | $ | 197,950 | $ | 110,356 | $ | 141,856 | |||||
Prorated Vesting PSUs(5) | $ | 1,159,654 | $ | 132,625 | $ | 195,554 | $ | 56,869 | $ | 95,205 | |||||
Long-Term Cash | $ | 41,983 | |||||||||||||
Post-Termination Health Care(6) | $ | 39,062 | $ | 19,531 | $ | 19,306 | $ | 19,531 | $ | 19,531 | |||||
Outplacement Services and Financial Planning(7) | $ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 40,000 | $ | 40,000 | |||||
Total Other Compensation | $ | 7,890,144 | $ | 3,098,364 | $ | 1,614,027 | $ | 1,091,517 | $ | 1,084,919 |
CEO Pay Ratio—2023
We calculated each employee’s annual total cash compensation as of December 31,
Our calculation includes all full-time, part-time and temporary employees of the
We applied a foreign currency exchange rate as of December 31, 2023 to all compensation elements paid in currencies other than U.S. Dollars. After calculating the
The annual total compensation for We believe this pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K, the
Pay Versus PerformanceThe table below includes the compensation of our
The table below shows the
Descriptions between Compensation Actually Paid and Company and Peer Group Performance The charts below provide an
Tabular List The table below represents the most important financial performance measures used by Ingevity to link compensation
The Audit Committee is directly responsible for appointing, retaining, fixing the compensation of, and overseeing the work of our independent registered public accounting firm. Although it is not legally required to do so, the Board has elected to seek stockholder ratification of the appointment of
Representatives of
Vote required:An affirmative vote of the
Recommendation of the |
THE BOARD RECOMMENDS A VOTE “FOR”THE RATIFICATION OF THE APPOINTMENT OF PWC AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY. |
INGEVITY | 2024 Proxy Statement | 77 |
The following table shows the fees paid by usthe Company to PricewaterhouseCoopers LLPPwC for audit and other services provided for the fiscal 2016years 2023 and 2017, all of which were preapproved by the 2022.
Amounts Shown in $ | 2023 | 2022 |
Audit Fees | 2,375,000 | 2,551,000 |
Audit-Related Fees | 189,530 | 769,967 |
Tax Fees | - | - |
All Other Fees | 10,000 | 317,778 |
TOTAL | 2,574,530 | 3,638,745 |
2016 (In thousands) | 2017 (In thousands) | |||||
Audit Fees: | $ | 1,030 | $ | 1,132 | ||
Audit-Related Fees: | 725 | 50 | ||||
Tax Fees: | 0 | 227 | ||||
All Other Fees: | 10 | 15 | ||||
Total: | $ | 1,765 | $ | 1,423 |
Audit Fees. This categoryAmount includes fees associated withfor professional services performed for the integrated audit of the Company’s annual financial statements, the audit of internal control over financial reporting, review of the Company’s quarterlyconsolidated financial statements included in its Forms 10-Qthe Company’s Form 10-K filing and assistance with review of documents filedfinancial statements included in the Company’s Form 10-Q filings. Amount also includes other services that are normally provided by PwC in connection with the SEC.statutory and regulatory filings or engagements.
Audit-Related Fees. This
Amount includes fees paid for services renderedthat are reasonably related to the performance of the audit or review of the Company’s financial statements. For 2023 and 2022, amount includes services provided in connection with the audited financial statements included in our Registration Statement on Form 10Company’s implementation of a new enterprise resource planning system.
Amount includes fees and related transactional support services associated with our Registration Statement on Form 10.expenses for U.S. federal, state, and international tax planning and tax compliance services. There were no tax fees for 2023 or 2022.
Amount includes fees for services in connection with attestations by PricewaterhouseCoopers LLPPwC that are required by statute or regulation. Additionally, for 2022, amount includes services provided in connection with the Company’s implementation of a new enterprise resource planning system.
Pre-Approval Policy
The Audit Committee’s pre-approval policy requires that all services to be performed by the Company’s independent registered public accounting firm be pre-approved either on a case-by-case basis by the Audit Committee or its delegate or on a categorical basis based on the Audit Committee’s prior approval of a specific category of service and the
expected cost thereof. Any request for services involving less than $50,000$150,000 may be approved by the Chair of the Audit Committee, if it is not practicable to obtain the approval of the full committee, provided that any such approval is presented to the full Audit Committee at its next regularly scheduled meeting.
The Audit Committee pre-approved all of the audit fees, audit-related fees, and all other fees paid to PwC in fiscal 2023.
INGEVITY | 2024 Proxy Statement | 78 |
The Audit Committee has reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2023, including management’s annual assessment of and report on the Company’s internal control over financial reporting, with management and with PwC, the Company’s independent auditor. The Audit Committee has discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee also received from PwC the written disclosures and letter required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence and has discussed with PwC the issue of their independence from the Company.
Based on the foregoing, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for filing with the SEC.
THE AUDIT COMMITTEE
Daniel F. Sansone, Chair
Frederick J. Lynch
Karen G. Narwold
William J. Slocum
Benjamin G. Wright
INGEVITY | 2024 Proxy Statement | 79 |
PROPOSAL 4APPROVAL OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO PROVIDE FOR THE EXCULPATION OF CERTAIN OFFICERS FROM LIABILITY IN LIMITED CIRCUMSTANCES |
INGEVITY - 2018
OUR BOARD RECOMMENDS A VOTE FORTHE PROPOSED AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION. |
The State of Delaware enacted legislation in 2022 that enables Delaware companies to limit the liability of certain officers in the event of a claim of breach of the duty of care under limited circumstances. We are asking our stockholders to approve an amendment (the “Charter Amendment”) to Ingevity’s Certificate of Incorporation (our “Charter”) to permit Ingevity to limit the liability of certain of Ingevity’s officers* in the specific circumstances permitted by the recent Delaware law, which is a limit that already applies to Ingevity’s directors under our existing Charter. In addition to the amendment described below, we will also make a minor amendment to update the Company’s registered address within Delaware.
The Delaware legislation only permits exculpation for direct claims for certain breaches of the duty of care does not permit the elimination of liability of certain officers for:
■ | breaches of the duty of loyalty; | |
■ | acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; or | |
■ | any transaction in which the officer derived an improper personal benefit. |
The new law does not affect the right of stockholders to bring derivative claims on behalf of the Company against officers for breach the duty of care. Limiting the scope of liability of certain officers in this manner allows Ingevity to strike an appropriate balance between stockholders’ interest in incentivizing reasonable and sound business decisions and driving accountability on the one hand, and stockholders’ interest in Ingevity being able to attract and retain quality individuals to serve as its officers on the other hand.
The Board believes that the Charter Amendment is advisable and in the best interest of our stockholders because the scope of the limited liability is narrow and it helps protect our officers (in addition to our directors) from the risk of financial ruin from carrying out their duties. Further, the Board believes that the Charter Amendment will enhance Ingevity’s ability to attract and retain talented officers. In light of the benefits to Ingevity, its officers and its stockholders, and upon the recommendation of the Nominating & Governance Committee, the Board recommends that the stockholders adopt the Charter Amendment to provide the exculpation of certain officers* to the extent permitted by Delaware law.
INGEVITY | 2024 Proxy Statement | 80 |
The proposed amendment to Article VIII of the Charter to permit the exculpation discussed above is as follows:
ANo director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment or repeal of this Article VIII shall not adversely affect any right or protection of any director or officer of the Corporation existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.
This summary of the proposed amendment is not intended to be complete and is qualified in its entirety by the full text of the Third Amended and Restated Certificate of Incorporation, a copy of which is included as Appendix B to this Proxy Statement.
We ask our stockholders to vote on the following resolution:
“RESOLVED, that the Company’s stockholders approve the Company’s Third Amended and Restated Certificate of Incorporation as set forth in Appendix B to this Proxy Statement.”
If the proposed Charter Amendment is adopted by the required vote of stockholders, it will become effective on the date that the Company’s Third Amended and Restated Certificate of Incorporation reflecting the Charter Amendment is filed with the Secretary of State of the State of Delaware. The Board reserves the right, notwithstanding stockholder approval of the Charter Amendment, and without further action by the stockholders, to elect not to proceed with the Charter Amendment if, at any time prior to filing, the Board determines that it is no longer in the best interests of the Company and its stockholders to proceed with the Charter Amendment.
The affirmative vote of a majority of the shares of Common Stock present in person or by proxy and entitled to vote on the matter at the Annual Meeting is required for the approval of the Charter Amendment.
THE BOARD RECOMMENDS A VOTE “FOR”THE APPROVAL OF THE CHARTER AMENDMENT. |
* | Officers covered by the limit of liability proposed in the Charter Amendment would include our NEOs, chief accounting officer, treasurer, and certain other officers who have consented (or deemed to have consented) to be identified as an officer and to accept service of process. |
INGEVITY | 2024 Proxy Statement | 81 |
The following table lists any person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act) who, to our knowledge, was the beneficial owner as of February 26, 2024, of more than 5% of our outstanding Common Stock.
Name and Address of Beneficial Owner | Amount of Common Stock Beneficially Owned | Percentage of our Common Stock | Sole Voting Shares | Shared Voting Shares | Sole Investment Shares | Shared Investment Shares | ||||||
BlackRock, Inc.(1) 55 East 52nd Street New York, New York 10055 | 6,003,674 | 16.6% | 5,934,518 | 6,003,674 | ||||||||
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 3,743,322 | 10.33% | 67,220 | 3,639,887 | 103,435 | |||||||
Inclusive Capital Partners, L.P.(3) Jeffrey W. Ubben 1170 Gorgas Avenue San Francisco, CA 94129 | 2,401,405 | 6.6% | 2,401,405 | 2,401,405 | ||||||||
Wellington Management Group LLP(4) c/o Wellington Management Company LLP 280 Congress Street Boston, MA 02210 | 2,148,379 | 5.93% | 1,905,361 | 2,148,379 | ||||||||
Victory Capital Management Inc.(5) 4900 Tiedeman Road 4th Floor Brooklyn, OH 44144 | 1,854,554 | 5.12% | 1,839,610 | 1,854,554 |
(1) | Information provided is based solely on an amendment to Schedule 13G filed on January 22, 2024. |
(2) | Information provided is based solely on an amendment to Schedule 13G filed on February 13, 2024. |
(3) | Information provided is based solely on an amendment to Schedule 13D filed on May 30, 2023. |
(4) | Information provided is based solely on a Schedule 13G filed on February 8, 2024. |
(5) | Information provided is based solely on a Schedule 13G filed on February 7, 2024. |
INGEVITY | 2024 Proxy Statement | 82 |
The following table shows how much of our Common Stock our current directors, NEOs, and all executive officers and directors as a group beneficially owned as of March 3, 2024. Beneficial ownership is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. In general, beneficial ownership includes any shares of Common Stock a director or officer can vote or transfer and any security the director or officer has the right to vote or transfer within 60 days. Except as described further below, each stockholder listed in the table has sole voting and investment power for all shares of Common Stock shown as beneficially owned by him or her. Each individual director and executive officer owns less than 1% of the shares of Common Stock outstanding as of March 3, 2024(1). Directors and executive officers as a group beneficially own 1.1% of the Common Stock outstanding as of March 3, 2024.
Name of Beneficial Owner | Common Stock Beneficially Owned(2) | Stock Vesting within 60 Days | Options Exercisable within 60 Days | Total Common Stock Beneficially Owned(2) | Vested but Unsettled DSUs (including vesting within 60 days) (“Vested DSUs”)(3) | Total Common Stock Beneficially Owned Plus Vested DSUs(2) | ||||||
Independent Directors | ||||||||||||
Jean S. Blackwell | 15,857 | 1,645 | — | 17,502 | — | 17,502 | ||||||
Luis Fernandez-Moreno | 17,907 | 1,645 | — | 19,552 | — | 19,552 | ||||||
Diane H. Gulyas | 8,129 | 1,645 | — | 9,774 | — | 9,774 | ||||||
Bruce D. Hoechner | 326 | — | — | 326 | 1,645 | 1,971 | ||||||
Frederick J. Lynch | 17,857 | 1,645 | — | 19,502 | — | 19,502 | ||||||
Karen G. Narwold | 2,695 | — | — | 2,695 | 7,444 | 10,139 | ||||||
Daniel F. Sansone | 10,209 | 1,645 | — | 11,854 | 4,995 | 16,849 | ||||||
William J. Slocum(4) | 1,542 | — | — | 1,542 | 3,492 | 5,034 | ||||||
Benjamin G. Wright | 1,542 | — | — | 1,542 | 1,645 | 3,187 | ||||||
Executive Officers | ||||||||||||
John C. Fortson | 84,837 | — | 102,832 | 187,669 | — | 187,669 | ||||||
Mary Dean Hall | 12,495 | 4,802 | 7,396 | 24,693 | — | 24,693 | ||||||
Stacy L. Cozad | 9,256 | — | 7,958 | 17,214 | — | 17,214 | ||||||
S. Edward Woodcock | 20,592 | — | 24,581 | 45,173 | — | 45,173 | ||||||
Richard A. White | 3,153 | — | 4,457 | 7,610 | — | 7,610 | ||||||
Directors and Officers as a group (16 persons) | 208,593 | 13,027 | 148,200 | 369,820 | 19,221 | 389,041 |
(1) | As of March 3, 2024, there were 36,280,935 shares of Common Stock outstanding. |
(2) | Includes shares of Common Stock held directly and indirectly. |
(3) | For information on DSU vesting, voting rights, and payment, please see “Director Compensation,” above. |
(4) | Mr. Slocum is deemed to hold the shares of Common Stock listed in the table for the benefit of certain funds managed by Inclusive Capital Partners, L.P. and indirectly, for the benefit of Inclusive Capital Partners, L.P. Mr. Slocum disclaims beneficial ownership of the equity listed in the table, except to the extent of his pecuniary interest therein, if any. |
To the Company’s knowledge, based solely on a review of the copies of the reports furnished to the Company and the reporting persons’ written representations that no additional reports were required, the Company believes that, during 2023, all persons required to report complied with the Section 16(a) requirements.
INGEVITY | 2024 Proxy Statement | 83 |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 23, 2024 (the “Annual Meeting”): Our proxy statement for the Annual Meeting (the “Proxy Statement”) and Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“Annual Report”) are available at www.proxyvote.com.
You received these materials (the “Proxy Materials”) because you owned shares of the Company’s Common Stock, par value $0.01 (the “Common Stock”) as of the close of business on February 26, 2024 (the “Record Date”) and are, therefore, entitled to vote at the Annual Meeting.
Most of our stockholders received a Notice Regarding the Availability of Proxy Materials (the “Notice”) instead of a full set of printed Proxy Materials. The Notice provides access to our Proxy Materials in a fast and efficient manner via the Internet. This reduces the amount of paper necessary to produce these materials, and cuts costs associated with mailing these materials to stockholders. On or around March 11, 2024, we began mailing the Notice to holders of our Common Stock as of the Record Date and posted our Proxy Materials on the website referenced in the Notice (www.proxyvote.com). As more fully described in the Notice, stockholders may choose to access our Proxy Materials on the website or may request to receive a printed set of our Proxy Materials. The Notice and website provide information regarding how you may request to receive Proxy Materials in printed form by mail or electronically by email for this Annual Meeting and on an ongoing basis.
The Proxy Materials include the Notice of the Annual Meeting, the Proxy Statement, - 39
and our Annual Report. These materials provide you with important information about the Company, the Annual Meeting, and the proposals to be voted on at the Annual Meeting.
A proxy is your legal designation of another person to vote the shares of Common Stock you own as of the Record Date in the manner you direct. The person you designate to vote your shares of Common Stock is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated Stacy L. Cozad, our Executive Vice President, General Counsel, and Secretary, and Ryan C. Fisher, our Vice President and Deputy General Counsel, to serve as proxies for the Annual Meeting. The proxies also may be voted at any adjournments or postponements of the meeting. The Board is soliciting proxies for use at the Annual Meeting. A proxy statement is a document we give you when we are soliciting your vote pursuant to SEC regulations.
If your shares of Common Stock are registered in your name on the books and records of our transfer agent, you are a “stockholder of record.” We therefore sent the Notice or Proxy Materials directly to you.
If your shares of Common Stock are held for you in the name of your broker or bank, your shares are held in “street name” and you are considered the “beneficial owner” of your shares and the broker or bank is considered to be the stockholder of record.
If you are a beneficial owner, the Notice or Proxy Materials have been forwarded to you by the broker or bank that holds your shares of Common Stock, and, as the beneficial owner, you have the right to direct your broker or bank on how to vote your shares by using the voting instruction form provided to you by your broker or bank.
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Your voting method depends on whether you are a stockholder of record or a beneficial owner.
If you are a stockholder of record, you may vote using one of the following methods:
ONLINE | BY PHONE | BY MOBILE DEVICE | BY MAIL | DURING THE VIRTUAL MEETING |
Before the Annual Meeting, vote online at www.proxyvote.com | Call 1-800-690-6903 | Scan the QR code on your proxy card or Notice | If you received a printed version of these proxy materials, you may vote by mail | Vote online during the meeting at www.virtualshareholdermeeting.com/ NGVT2024 by entering your 16-digit control number and following the site instructions |
Even if you plan to attend the Annual Meeting virtually, we encourage you to vote your shares ahead of time.
If you are a beneficial owner, you may vote by following the instructions on the voting instruction form or notice provided to you by the bank or broker that holds your shares.
If you are a stockholder of record, you may revoke your proxy and change your vote at any time before the polls close at the Annual Meeting by doing one of the following:
■ | Voting again by telephone or via the Internet prior to 11:59 p.m., Eastern Time, on April 22, 2024; | |
■ | Giving written notice to the Corporate Secretary of the Company; | |
■ | Delivering a later-dated proxy to the Company; or | |
■ | Voting during the Annual Meeting by following the instructions available on the meeting website, www.virtualshareholdermeeting.com/NGVT2024. |
If you are a beneficial owner, please check your voting instruction form or contact the bank or broker that holds your shares for instructions on how to revoke or change your voting instruction.
All Ingevity stockholders who owned Common Stock as of the close of business on the Record Date are entitled to vote at the Annual Meeting.
Each Ingevity stockholder is entitled to one vote for each share of Common Stock owned as of the Record Date. There were 36,247,546 shares of Common Stock outstanding on the Record Date. There is no cumulative voting.
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In order to allow greater access to the meeting to our stockholders and lower the barriers to stockholder participation, our Annual Meeting will be held in a virtual meeting format only with no physical meeting location, which will enable stockholders to participate from any location and at no cost.
To participate in the virtual meeting, you will need the 16-digit control number included on your Notice, proxy card or voting instruction form. The meeting will begin promptly at 9:30 a.m., Eastern Time, and we encourage stockholders to access the meeting prior to the start time. Technical assistance will be available on the day of the Annual Meeting. If you experience difficulties joining the Annual Meeting, please call 844-986-0822 in the U.S., or 303-562-9302 for International assistance.
We are committed to ensuring that stockholders will be afforded the same rights and opportunities to participate in the Annual Meeting as they would at an in-person meeting. You will be able to attend the Annual Meeting online, vote your shares of Common Stock electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/NGVT2024 and entering the 16-digit control number included on your Notice, proxy card, or voting instruction form.
We will try to answer as many stockholder-submitted questions as time permits, and in the event we receive more questions than we can answer during our allotted period of time, we will answer them in the order received. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or Company business, or that do not comply with the Annual Meeting rules of conduct. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition. To the extent you have a question that was not answered during the Annual Meeting, please contact our Investor Relations team at investors@ingevity.com.
In order for us to conduct the Annual Meeting, a majority of the shares of Common Stock outstanding as of the Record Date must be present at the meeting (including by proxy). This is referred to as a quorum. If a share is represented for any matter at the Annual Meeting, it is deemed to be present for quorum purposes. Abstentions and shares of Common Stock held of record by a bank or broker or its nominee (“Broker Shares”) that are voted on any matter are included in determining the number of shares present at the Annual Meeting. However, broker non-votes will not be included in determining whether a quorum is present at such meeting.
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QUESTIONS AND ANSWERS REGARDING STOCKHOLDER COMMUNICATIONS, STOCKHOLDER PROPOSALS AND COMPANY DOCUMENTS
The following table summarizes the Board’s voting recommendations for each proposal, the vote required for each proposal to pass, and the effect of abstentions and uninstructed shares on each proposal. If you are a stockholder of record who submits a proxy card without selecting an option for any of the proposals, the proxy holders will vote in accordance with the Board recommendations in the table below.
Proposal | Description | Board Voting Recommendation | Vote Required to Pass(1) | Effect of Abstentions on Votes Cast(2) | Effect of Broker Non-votes(3) | |||||
1 | Election of Nine Directors | FOR all director nominees | Majority of the votes cast | None | None | |||||
2 | Advisory Vote on Compensation of our Named Executive Officers (Say-On-Pay) | FOR | Majority of shares present | Counts as a vote against the proposal | None | |||||
3 | Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2024 | FOR | Majority of shares present | Counts as a vote against the proposal | Broker may vote in its discretion | |||||
4 | Amendment of the Company’s Certificate of Incorporation to provide for the exculpation of certain officers from liability in limited circumstances | FOR | Majority of shares present | Counts as a vote against the proposal | None |
(1) | For Proposal 1, majority of votes cast means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against”the director nominee. For Proposals 2-4, “shares present” includes abstentions. |
(2) | Abstentions are considered present and entitled to vote. |
(3) | Brokers only have authority to vote in their discretion for routine matters. All of the proposals, except for Proposal 3, are considered non-routinematters. If you are a beneficial owner holding shares through a broker and you do not specify a choice to your broker for a non-routine proposal, thebroker is not entitled to vote in its discretion and this is considered a broker non-vote. |
As of the date of this Proxy Statement, we are not aware of any other matter that will be properly brought before the Annual Meeting. If other matters are properly introduced, the persons named in the proxy as the proxy holders will vote on such matters in their discretion using their best judgment.
We will bear the cost of solicitation of proxies by the Board in connection with the Annual Meeting. We will reimburse brokers, fiduciaries, and custodians for reasonable expenses incurred by them in forwarding Proxy Materials to beneficial owners of Common Stock held in their names. Proxies may be solicited by mail, in person, by telephone, facsimile, or other means of communication by our officers and other employees. These people will receive no additional compensation for these services but will be reimbursed for any expenses incurred by them in connection with these services. In addition, Ingevity’s officers, directors, and employees may solicit proxies but will receive no additional or special compensation for such work.
The address of Ingevity’s principal executive office is: 4920 O’Hear Avenue, Suite 400, North Charleston, South Carolina 29405.
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“Householding” refers to a procedure allowed by the SEC to reduce the number of copies of the Notice or Proxy Materials mailed to holders of our Common Stock residing at the same address. Under this procedure, we will deliver one Notice or one set of printed Proxy Materials to beneficial holders of our Common Stock residing at the same address, unless their broker, bank, or other nominee has received contrary instructions from any beneficial holder at that address. Likewise, we will deliver one Notice or one set of printed Proxy Materials to record holders of our Common Stock residing at the same address, unless we receive instructions from such stockholders to the contrary. If you reside at the same address as other stockholders of record and would like to receive a separate Notice or set of Proxy Materials, please contact us at 1-844-643-8489 (1-84-INGEVITY) or at Ingevity Corporation, 4920 O’Hear Avenue, Suite 400, North Charleston, South Carolina 29405, Attn: Corporate Secretary, and we will promptly deliver a separate set to you. If you and other stockholders of record residing at the same address received multiple Notices or sets of the Proxy Materials and would like to receive a single Notice or set in the future, please contact us as described above. Beneficial holders with questions about combined mailings should contact the bank or broker holding their shares.
Any director who is not elected at the Annual Meeting shall offer to tender his or her resignation to the Chair of the Board and the Nominating & Governance Committee. The Nominating & Governance Committee will promptly consider the resignation offer and make a recommendation to the Board as to whether to accept or reject the tendered resignation and whether other action should be taken. The Board will act on the tendered resignation within 90 days following the stockholders’ meeting at which the election occurred. The Nominating & Governance Committee, in making its recommendation, and the Board, in making its decision, may consider all the information, factors, and alternatives it considers appropriate. Any director who offers his or her resignation pursuant to this provision may not participate in the Nominating & Governance Committee deliberations and recommendation or in the Board’s deliberations and decision whether to accept or reject the resignation offer.
The Company will file a Current Report on Form 8-K with the SEC and post the filing to the Company’s website within four business days following the Annual Meeting.
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We will provide without charge, at the written request of any stockholder of record as of February 27, 2018,the Record Date, a copy of our Annual Report, on Form 10-K, including the financial statements, and financial statement schedule, as filed with the SEC, excluding exhibits. We will provide copies of the exhibits to eligible stockholders making such a request.
Requests for copies of our Annual Report on Form 10-K should be mailed to: Ingevity Corporation, 5255 Virginia Ave, N.4920 O’Hear Avenue, Suite 400, North Charleston, SC 29406,South Carolina 29405, Attn: Katherine P. Burgeson,Corporate Secretary. You may also access a copy of our annual reportAnnual Report via the Internet by visiting our website located at http://ir.ingevity.com under the Financial Information tab.www.proxyvote.com.
Under SEC rules, a proposal that a stockholder wishes to include in our proxy statement for the 2019 Annual Meeting2025 annual meeting of stockholders must be received by our Corporate Secretary no later than the close of business on November 12, 2018.10, 2024. Proposals shouldmust be sentin writing and delivered to: Ingevity Corporation, 5255 Virginia Ave, N.
4920 O’Hear Avenue, Suite 400, North Charleston, SC 29406,South Carolina 29405, Attn: Katherine P. Burgeson,Corporate Secretary. StockholdersIn addition, proposals must otherwise comply with the requirements of Rule 14a-8 of the Exchange Act. Accordingly, stockholders wishing to submit a proposal should refer to Rule 14a-8 of the Exchange Act, which sets standards for eligibility and specifies the types of proposals that are not appropriate for inclusion in our proxy statement.
Under our bylaws,Bylaws, any stockholder entitled to vote in theof record may nominate persons for election ofas directors at an annual meeting of our stockholders may nominate persons for election as directors by providing written notice of their intent to do so to our Corporate Secretary no lesslater than 90 days and not morethe close of business on the 90th day, nor earlier than 120 daysthe close of business on the 120th day, prior to the first anniversary of the preceding year’s annual
meeting. If the annual meeting is held on a date that is more than 30 days before, or more than 60 days after, such anniversary, then such notice must instead be provided no earlier than the close of business on the 120th day prior to the meeting and no later than the close of business on the later of: (i) the 90th day prior to the meeting; or (ii) the seventh day following the day on which public announcement of the date of the meeting is first made by the Company. We anticipate holding our 2025 annual meeting of stockholders on or about the one-year anniversary of this year’s meeting. This means that written notice of any nominations intended to be made at the 2019 Annual Meetingour 2025 annual meeting of stockholders must be delivered betweento our Corporate Secretary no earlier than the close of business on December 27, 201824, 2024 and no later than the close of business on January 26, 2019.23, 2025. Any such notice must contain the information and conform to the requirements specified in our bylaws.Bylaws. In addition, the Company will only consider nominations from a stockholder who is a stockholder of record: (i) at the time of giving such notice; (ii) on the record date for the determination of stockholders entitled to vote at the annual meeting; and (iii) at the time of the annual meeting.
In addition to the requirements in the preceding paragraph, stockholders who intend to solicit proxies in support of director nominees other than Ingevity’s nominees through the use of a “universal proxy card” must provide notice that sets forth the information required by Rule 14a-19 of the Exchange Act no later than February 22, 2025, which is 60 days prior to April 23, 2025, the one-year anniversary of the Annual Meeting.
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Under our bylaws,Bylaws, any stockholder of record wishingwho wishes to present a matter for consideration (other than the nomination of a director or matters that have been submitted for inclusion in our proxy statement for such annual meeting) in person at the 2019 Annual Meetingan annual meeting of our stockholders must provide written notice of their intent to do so to our Corporate Secretary no lesslater than 90 days and not morethe close of business on the 90th day, nor earlier than 120 days
the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting. If the annual meeting is held on a date that is more than 30 days before, or more than 60 days after, such anniversary, then such notice must instead be provided no earlier than the close of business on the 120th day prior to the meeting and no later than the close of business on the later of: (i) the 90th day prior to the meeting; or (ii) the seventh day following the day on which public announcement of the date of the meeting is first made by the Company. We anticipate holding our 2025 annual meeting of stockholders on or about the one-year anniversary of this year’s meeting. This means that any notice regarding matters to be presented at the 2019 Annual Meetingour 2025 annual meeting of stockholders must be delivered betweento our Corporate Secretary no earlier than the close of business on December 27, 201824, 2024 and no later than the close of business on January 26, 2019. The23, 2025. Any such notice must contain the information and conform to the requirements specified in our bylaws.Bylaws.
In addition, the Company will only consider proposals from a stockholder who is a stockholder of record: (i) at the time of giving such notice; (ii) on the record date for the determination of stockholders entitled to vote at the annual meeting; and (iii) at the time of the annual meeting.
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40 - INGEVITY - 2018
This Proxy Statement
contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,” “guidance,” “believes,” “anticipates” or similar expressions. Forward-looking statements may include, without limitation, anticipated timing, charges and costs of the closure of our DeRidder, Louisiana plant; the potential benefits of any acquisition or investment transaction, expected financial positions, guidance, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; litigation related strategies and outcomes; and markets for securities. Actual results could differ materially from the views expressed. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, charges, costs or actions, including adverse legal or regulatory actions, resulting from, or in connection with, the closure of our DeRidder, Louisiana plant; losses due to resale of CTO at less than we paid for it; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation and the Russia-Ukraine war and Israel-Gaza war; risks related to our international sales and operations; adverse conditions in the automotive market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient raw materials, or any material increase in the cost to acquire such raw materials; issues with or integration of future acquisitions and other investments; the provision of services by third parties at several facilities, including the impact of WestRock’s shutdown of its North Charleston paper mill; supply chain disruptions; natural disasters and extreme weather events; or other unanticipated problems such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair; attracting and retaining key personnel; dependence on certain large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes, and the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (the “SEC”), including those described in Part I, Item 1A. Risk Factors in our most recent Annual Report on Form 10-K as well as in our other filings with the SEC. These forward-looking statements speak only to management’s beliefs as of the date of this Proxy Statement. Ingevity assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this Proxy Statement.
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In the CD&A, Ingevity has presented certain financial measures in this Proxy Statement, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) These financial measures are not meant
to be considered in isolation or as a substitute for the most directly comparable financial measure calculated in accordance with GAAP.
Adjusted EBITDA
“Adjusted EBITDA” is defined as net income plus provisions for income taxes, interest expense, depreciation and amortization, separation costs and restructuring and other (income) charges.
In section entitled “2017 Performance
GAAP financial measure Adjusted EBITDA for both fiscal years 2017 and 2016, including a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of Non-GAAP Financial Measures” on page 45 of the 2017 Form 10-K.
Segment EBITDA
“Segment EBITDA” is defined as segment profit plus depreciation and amortization.
In the description of Michael P. Smith’s and S. Edward Woodcock’s individual performance achievements in the CD&A we discuss Segment EBITDA. For more information regarding the non-GAAP financial measure Segment EBITDA
for both fiscal years 2017 and 2016, including a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of Non-GAAP Financial Measures” on page 45 of the 2017 Form 10-K.
STIP-Adjusted EBITDA
“STIP-Adjusted EBITDA” is defined as Adjusted EBIDTA, plus or minus the impact of Separation-related Reimbursement Awards and certain non-cash gains or charges.
In the section entitled “2017 Short-Term Incentive Plan (“STIP”)” in the CD&A we discuss STIP-Adjusted EBITDA for fiscal year 2017. STIP-Adjusted EBITDA was selected as a performance measure under the Short Term Incentive Plan for 2017 because Adjusted EBITDA is the primary performance measurement of the Company’s earnings guidance and drives behavior consistent with the stockholders’ interests.
Additionally, for compensation award purposes, eliminating the fair market gain or loss from the Separation-related Reimbursement Awards and other certain non-cash gains or losses was appropriate because the impacts of both were primarily driven by external market conditions and not by decisions management could directly influence.
The table below reconciles STIP-Adjusted EBITDA for 2017 to net income for 2017, the most comparable financial measure calculated in accordance with GAAP set forth in the Company’s 2017 Form 10-K.
Adjusted EBITDA andAdjusted EBITDA Margin | Definitions. “Adjusted EBITDA” is defined as net income (loss) plus interest expense, net, provision (benefit) for incometaxes, depreciation, amortization, restructuring and other (income) charges, net, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related (income) costs, litigation verdict charges, gain on sale of strategic investment, loss on CTO resales, and pension and postretirement settlement and curtailment (income) charges, net. “Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by Net sales. | |
Reason Used. We believe these non-GAAP financial measures provide management as well as investors, potentialinvestors, securities analysts and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results. We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful measures because they exclude the effects of financing and investment activities as well as non-operating activities. | ||
Reconciliation. The table below reconciles Adjusted EBITDA to net income (loss), the most comparable financialmeasure calculated in accordance with GAAP. | ||
Free Cash Flow
| Definition. “Free Cash Flow” is defined as net cash provided by operating
| |
Reason Used. Management believes that free cash flow is an important liquidity measure for the Company and that it is useful to investors and management as a measure of the ability of our business to generate cash. | ||
Reconciliation. The | ||
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Company STIP-Adjusted EBITDA | Definition. “Company STIP-Adjusted EBITDA” is defined as Adjusted EBITDA (as defined above), plus or minus the impact of certain non-cash gains or charges as determined in the T&C Committee’s sole discretion. Excluded items may include the cumulative effect of accounting changes, the effect of new accounting pronouncements, last-in, first-out (LIFO) adjustment (income) expense, (gain) loss on currency translation and hyperinflation (gain) loss per share, and certain other adjustments reflecting substantial or out of the ordinary matters. | |
Reason Used. Company STIP-Adjusted EBITDA was selected as a performance measure under the 2023 STIP because Adjusted EBITDA is the primary performance measurement of the Company’s earnings guidance and drives behavior consistent with the stockholders’ interests. Additionally, for | ||
Reconciliation. The table below reconciles Company STIP-Adjusted EBITDA to net income (loss), the most comparable financial measure calculated in accordance with GAAP. | ||
Business Unit STIP-Adjusted EBITDA (“BU STIP-Adjusted EBITDA”) | Definition. “BU STIP-Adjusted EBITDA” is defined as Segment EBITDA, as defined under ASC 280, plus or minus the impact of certain non-cash gains or charges as determined in the T&C Committee’s sole discretion. Excluded items may include the cumulative effect of accounting changes, the effect of new accounting pronouncements, last-in, first-out (LIFO) adjustment (income) expense, (gain) loss on currency translation and hyperinflation (gain) loss per share, and certain other adjustments reflecting substantial or out of the ordinary matters. | |
Reason Used. BU STIP-Adjusted EBITDA was selected as a performance measure under the 2023 STIP because Segment EBITDA is the primary performance measurement of the Company’s segment earnings and drives behavior consistent with the stockholders’ interests. Additionally, for segment compensation award purposes, eliminating the fair market gain or loss from other certain non-cash gains or losses was appropriate because the impacts of both were primarily driven by external market conditions and not by decisions management could directly influence. | ||
Reconciliation. The table below reconciles Performance Chemicals’ BU STIP-Adjusted EBITDA and Performance Materials’ BU STIP-Adjusted EBITDA to Segment EBITDA, respectively, the most comparable financial measure calculated in accordance with GAAP | ||
Company STIP-Adjusted Revenue | Definition. Company STIP-Adjusted Revenue is defined as revenue in accordance with GAAP, plus or minus the impact of certain non-recurring items including, without limitation, currency impacts, discontinued or sold operations, acquisition impacts, and new accounting pronouncements. | |
Reason Used. Company STIP-Adjusted Revenue was selected as a performance measure under the 2023 STIP to drive behaviors consistent with our Ingevity 2.0 Strategy, which is to drive sustainable revenue growth to achieve enduring enterprise success and create long-term stockholder value. | ||
Reconciliation. The table below reconciles Company STIP-Adjusted Revenue to the Company’s | ||
Business Unit STIP-Adjusted Revenue (“BU STIP-Adjusted Revenue”) | Definition. “BU STIP-Adjusted Revenue” is defined as segment revenue in accordance with GAAP, plus or minus the impact of certain non-recurring items including, without limitation, currency impacts, discontinued or sold operations, acquisition impacts, and new accounting pronouncements. | |
Reason Used. BU STIP-Adjusted Revenue was selected as a performance measure under the 2023 STIP to drive behaviors within each segment consistent with our Ingevity 2.0 Strategy, which is to drive sustainable revenue growth to achieve enduring enterprise success and create long-term stockholder value. | ||
Reconciliation. The table below reconciles Performance Chemicals’ BU STIP-Adjusted Revenue and Performance Materials’ BU STIP-Adjusted Revenue to each segment’s revenue, respectively, the most comparable financial measure calculated in accordance with GAAP. | ||
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Cumulative Earnings(Loss) per Share (“Cumulative EPS”) | Definition. “Cumulative EPS” is defined as continuing operations diluted EPS attributable to Ingevity stockholders plusrestructuring and other (income) charges, net, including inventory lower of cost or market charges associated with restructuring actions, per share, acquisition and other-related (income) costs per share, pension and postretirement settlement and curtailment (income) charges, net per share, loss on CTO resales per share, gain on sale of strategic investment per share, debt refinancing fees per share, litigation verdict charges per share, tax expense (benefit) recorded as a result of legislative tax rate changes and certain discrete tax items such as excess tax benefits on share-based compensation vesting per share, and certain non-cash (income) charges per share (which includes: cumulative effect of accounting changes per share, the effect of new accounting pronouncements per share, last-in, first-out (LIFO) adjustment (income) expense per share, (gain) loss on currency translation and hyperinflation (gain) loss per share, and the income tax expense (benefit) per share on these items. | |
Reason Used. Cumulative EPS was selected as a performance measure because Cumulative EPS is a primaryperformance measurement of the Company’s profitability over the performance period. | ||
Reconciliation. The table below reconciles Cumulative EPS to diluted earnings per share, the most directly comparablefinancial measure calculated in accordance with GAAP. | ||
Average Return onInvested Capital (“Average ROIC”) | Definitions. “Average ROIC” is defined as the average of the Return on Invested Capital (“ROIC”) for each of the three yearswithin the performance period of the PSU award. ROIC is defined as net operating profit after tax (NOPAT) divided by the average Invested Capital for the period using an average ROIC from each of the three plan years. NOPAT is defined as net income (loss) from continuing operations plus interest expense (income), net, restructuring and other (income) charges, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related (income) costs, loss on CTO resales, gain on sale of strategic investment, debt refinancing fees, litigation verdict charges, pension settlement and curtailment (gain) loss, and the income tax expense (benefit) on these items, including the tax expense (benefit) recorded as a result of legislative tax rate changes, and certain discrete tax items such as excess tax benefits on share-based compensation vestings. Invested Capital is defined as total debt including financing lease obligations (including the amounts recorded as the result of adoption of new accounting standards), less the financing lease restricted investment plus total Ingevity stockholders’ equity. Average Invested Capital for each year will be defined as a two (2) point average: (beginning calendar year Invested Capital plus end of calendar year Invested Capital) divided by two. | |
Reason Used. Average ROIC has been selected as a performance measure commencing with the 2021 PSUs because italigns with shareholder interests and promotes capital discipline. The T&C Committee believes that the use of an average calculation drives management accountability consistently throughout the performance period. | ||
Reconciliation. The table below calculates the Average ROIC for the 2021 PSUs and reconciles NOPAT (Average ROICnumerator) to net income attributable to Ingevity’s stockholders, the most comparable measure calculated in accordance with GAAP, and calculates Average Invested Capital (Average ROIC denominator) using the balance sheet. | ||
INGEVITY | 2024 Proxy Statement | 94 |
AFA EBITDA andAFA EBITDA Margin | Definitions. “AFA EBITDA” is defined as net income (loss) plus interest expense, net, provision (benefit) for income taxes,depreciation, amortization, restructuring and other (income) charges, net, including inventory lower of cost or market charges associated with restructuring actions, acquisition and other-related (income) costs, litigation verdict charges, gain on sale of strategic investment, loss on CTO resales, and pension and postretirement settlement and curtailment (income) charges, net for alternative fatty acid (“AFA”) products sold from the Company’s plants in North Charleston, South Carolina and Crossett, Arkansas (together, the “Performance Plants”). “AFA EBITDA Margin” is defined as AFA EBITDA divided by net sales of AFA products from the Performance Plants. | |
Reason Used. AFA EBITDA Margin was selected as a performance measure for the PC Transformation Award PSUsbecause it is a good indicator of whether the Company’s efforts to accelerate the transition of our PC segment to a broader based oleochemical product line is being accomplished on a profitable basis. We believe these non-GAAP financial measures provide management as well as investors, potential investors, securities analysts and others with useful information to evaluate the performance of the strategic transformation of our PC segment to diversify our feedstocks from CTO-based products to oleochemical products, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results. We believe AFA EBITDA and AFA EBITDA Margin are useful measures because they exclude the effects of financing and investment activities as well as non-operating activities. | ||
Reconciliation. When performance under the PC Transformation Award PSUs is certified, the Company will provide a tablethat reconciles AFA EBITDA to net income (loss), the most comparable financial measure calculated in accordance with GAAP. | ||
INGEVITY | 2024 Proxy Statement | 95 |
In millions, unaudited | Year Ending 2023 | Year Ending 2022 | Year Ending 2021 | ||||||
Net income (loss) (GAAP) | (5.4) | $ | 211.6 | $ | 118.1 | ||||
Interest expense | 93.3 | 61.8 | 51.7 | ||||||
Interest income | (6.3) | (7.5) | (4.0) | ||||||
Provision (benefit) for income taxes | (4.7) | 58.0 | 44.7 | ||||||
Depreciation and amortization | 122.8 | 108.8 | 109.9 | ||||||
Restructuring and other (income) charges, net | 189.9 | 13.8 | 16.2 | ||||||
Acquisition and other-related (income) costs | 4.5 | 5.9 | 0.6 | ||||||
Gain on sale of strategic investment | (19.3) | — | — | ||||||
Loss on CTO resales | 22.0 | — | — | ||||||
Litigation verdict charge | — | — | 85.0 | ||||||
Pension and postretirement settlement and curtailment charges (income), net | — | 0.2 | — | ||||||
Adjusted EBITDA (Non-GAAP)(1) | $ | 396.8 | $ | 452.6 | 422.2 | ||||
Certain non-cash charges(2) | 1.5 | (1.7) | 1.8 | ||||||
Company STIP-Adjusted EBITDA (Non-GAAP) | $ | 398.3 | $ | 450.9 | $ | 424.0 | |||
Net Sales | $ | 1,692.1 | $ | 1,668.3 | 1,391.5 | ||||
Adjusted EBITDA Margin (Non-GAAP) | 23.5% | 27.1% | 30.3% |
(1) | For more information on the adjustments from Net income (loss) to Adjusted EBITDA, |
(2) | Represents certain non-cash costs primarily including non-cash income resulting from inventory adjustments recorded during the period in accordance with last-in, first-out (“LIFO”) inventory accounting, certain acquisitions and strategic investments, and non-cash translation impacts associated with currency exchange rate fluctuations. |
In millions, unaudited | Year Ending 2023 | Year Ending 2022 | ||||
Net Cash Provided by Operating Activities (GAAP) | $ | 205.1 | $ | 313.4 | ||
Capital expenditures | (109.8) | (142.5) | ||||
Free Cash Flow (Non-GAAP) | $ | 95.3 | $ | 170.9 |
INGEVITY | 2024 Proxy Statement | 96
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